Annual Report • Apr 29, 2009
Annual Report
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SONAE CAPITAL, SGPS, SA Head Office: Lugar do Espido, Via Norte, Maia Share Capital: 250,000,000 Euro Maia Commercial Registry and Fiscal Number 508 276 756 Sociedade Aberta
(Translation from the Portuguese Original)
To the Shareholders,
2008 was a landmark year in the recent history of Sonae Capital, in which significant steps were taken towards implementing projects under development and in which the business portfolio continued to be restructured, as previously announced in the 2007 Report and Accounts.
After years of perseverance and determination, Troiaresort, the first resort developed by Sonae Turismo, was officially opened in 2008. Troiaresort is the visible demonstration of Sonae Turismo's ability to design and implement a differentiating value proposition in a key economic sector for the country – high quality tourism – maximizing the potential of the Troia Peninsula as a unique destination.
Three years after the implosion of the unfinished Troia towers, the first stage of the planned investment was completed, on time and on budget, involving an investment to date of 245 million Euros (out of the forecast investment of 400 million Euros for all phases of the project), with an Annual Gross Value Added of 20 and 40 million Euros (direct and indirect, respectively) and complying with the conditions of the Investment Contract agreed with the Portuguese Government. The Troiaresort development project has enabled skills, concepts and methodologies to be acquired, which will form the basis for sustaining future developments.
In 2008, we continued to restructure our business portfolio, with the goal of focusing on businesses in which we have differentiating skills and to ensure that the necessary cash flows and resources are available to invest in new business sectors and opportunities that can anticipate the needs of consumers and our business partners. In 2009, we will continue to divest from businesses which we consider to be non strategic for our future development.
The repositioning of businesses in which we wish to be present – which are competitive both nationally and internationally and which have at their disposal innovative and differentiating processes and practices – was already noticeable in 2008. Sonae Capital's investment in the Sustainable Buildings market, with the first project in Portugal to be certified by the international LEED methodology in environmental merit, is a good example of our investment strategy: businesses of the future based on environmental concerns. We will maintain our focus on mature businesses and on their international expansion while we will remain attentive to opportunities in the seed and venture capital areas.
The year 2009, with the completion of the disposal of non strategic businesses, will mark the end of the phase of the necessary focusing of Sonae Capital, while 2010 will be the year in which it starts out on the road of strategic investment, firmly anchored on our differentiating resources and our capability and willingness to learn how to do better.
Maia, 28 April 2009 Belmiro de Azevedo
| 1. | The Group | 4 | |
|---|---|---|---|
| 2. | Executive Summary | 5 | |
| 3. | Macroeconomic Environment | 6 | |
| 4. | Main Events | 8 | |
| 5. | Consolidated Financial Statements Review | 11 | |
| 6. | Business Review | 17 | |
| 7. | Share Price Performance | 38 | |
| 8. | Sustainability | 38 | |
| 9. | Individual Financial Statements | 40 | |
| 10. Activity carried out by Non Executive Board Members | 40 | ||
| 11. Profit Appropriation Proposal | 40 | ||
| 12. Acknowledgements | 41 | ||
| - Glossary | 42 | ||
| II. Corporate |
Governance Report |
48 | |
| III. Consolidated |
Financial Statements |
98 | |
| IV. Individual |
Financial Statements |
147 | |
| V. Report |
and | Opinion of the Fiscal Board |
169 |
| VI. Statutory |
Audit and Auditors' Report |
172 | |
| VII. Extract |
from the Minutes of the Annual General |
||
| Shareholders' | Meeting | 175 | |
Unless otherwise stated, comparable figures (presented within brackets), percent or absolute changes mentioned in this announcement refer to the comparable period of the previous year for performance figures and to the year end 2007 for financial position figures.
Like for like comparisons exclude the contributions of the Plysorol Group and Elmo (discontinued operations) to 2008 consolidated financial statements, as explained in chapter 5 of the current report.
Sonae Capital, SGPS, SA (Sonae Capital) is a holding company which was incorporated on 14 December 2007 through the spin‐off of the shareholding of Sonae, SGPS, SA, corresponding to the whole of the share capital and voting rights of the company previously named Sonae Capital, SGPS, SA (currently SC, SGPS, SA). The 250,000,000 shares representing Sonae Capital's share capital are listed on Euronext Lisbon since 28 January 2008.
Sonae Capital's business portfolio, still in the early days of its development, has been evolving from a fragmented to a more focused structure. Since its incorporation, several businesses have been sold since they did not fit into the new strategic guidelines, and new business opportunities are being assessed.
Sonae Capital's business areas are grouped into two different sub‐holdings, depending on the nature of their activities, as follows:
Sonae Capital, SGPS, SA Report and Accounts 4
31 December 2008
During 2008, Spred's activities were reorganized to underscore the relative sizes of operations and the new areas where Sonae Capital intends to assess new business opportunities.
Thus, Mature Businesses include businesses which generate steady cash‐flows, the Selfrio Group (Facility Management) currently being the only eligible business, of significant relative size (nearly 100 million euro turnover and 640 workforce).
In Emerging Businesses, Energy and Environment reflect the commitment of Sonae Capital to look for growth opportunities in these areas. During 2008, Sonae Capital acquired Edifícios Saudáveis, a consultancy company dedicated to building sustainability, certification in energy efficiency, air quality control and related areas. This is still a small operation, with 0.8 million euro of turnover and 10 employees. Other opportunities are currently being assessed, namely in relation to energy efficiency and renewable energy production.
Finally, Financial Shareholdings bring together a diverse range of wholly owned companies of smaller size, such as Box Lines and Atlantic Ferries, or shareholdings in relevant companies (Sonae Indústria, Norscut and TP).
in the profit margins of the Selfrio Group and Atlantic Ferries. EBITDA for the year was negatively impacted by closure of Troiaresorts' operations during most of the year and by pre‐(re)opening costs.
• On a like for like basis, net profit for the year totalled 28.4 million euro (9.4 million euro), including 53.1 million euro of investment income arising mainly from gains on the sale of Contacto Construções (46.4 million euro) and Choice Car (9.1 million euro) and from the estimated negative impact of the deconsolidation of the Plywood business (negative 9.3 million euro).
| Selected Financial data | Values in 106 euro |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 4Q | YTD | |||||||||
| 2008 1 | 2007 1 | % Chg. | 2008 1 | 2007 1 | % Chg. | |||||
| Turnover | 87.0 | 60.1 | 44.7% | 230.5 | 197.3 | 16.9% | ||||
| EBITDA | 15.6 | 4.6 | >100% | 13.6 | 9.1 | 49.7% | ||||
| EBIT | 3.1 | 2.3 | 33.1% | ‐7.8 | 1.6 | ‐ | ||||
| Net Financial Expenses | ‐2.3 | ‐1.7 | ‐38.5% | ‐11.0 | ‐10.0 | ‐10.2% | ||||
| Investment Income | ‐6.6 | 2.6 | ‐ | 53.1 | 12.1 | >100% | ||||
| Net Profit | ‐8.1 | 5.6 | ‐ | 28.4 | 9.4 | >100% | ||||
| 1 Continued Operations. |
||||||||||
| 31.12.08 | 31.12.07 | 30.09.08 | % Chg. YoY | % Chg. QoQ | ||||||
| Capex | 119.6 | 104.3 | 79.2 | 14.7% | 51.1% | |||||
| Net Debt | 273.8 | 172.2 | 284.0 | 58.9% | ‐3.6% | |||||
| Selected Operational data (24 March 2009) Sales information |
| Total # Units (Sold + Pre Sold) |
Total # Available Units | |
|---|---|---|
| Total Troiaresort | 200* | 220 |
| City Flats/Lofts ‐ Building E | 7 | 99 |
| City Flats/Lofts ‐ Building F | 88 | 18 |
| Efanor ‐ Building Delfim Pereira da Costa | ‐ | 40 |
* Includes 22 tourism units sold to an affiliated company of Soares da Costa, as part of an agreement signed regarding the payment, already in 2009, of the remainder of the price of construction works on UNOP 1. For more detailed information on sales please refer to chapter 6.2 of this report.
The World Economy slowed down in 2008, reversing the trend recorded in the previous two years. This slowdown was sharper in advanced economies, namely in the United States, Japan and the European Union, while in emerging and developing economies, mainly Asian (China and India) some slowdown in growth occurred compared to that of recent years. In the most recent edition of the World Economic Outlook Update, published in January 2009, the IMF forecasts world GDP growth of 3.4% (1.8 p.p. below that of 2007), with a slowdown in growth in developed countries to 1.0% (2.7% in 2007) and in the rest of the world economy an increase of 6.3% (8.3% in 2007).
The deterioration in worldwide economic growth was due to a combination of adverse factors which caused a fall in business and consumer confidence and delayed investment decisions, namely the uncertainty and volatility associated with the international financial market crisis, which began with the subprime real estate crisis. Despite emerging initially in financial markets, the crisis swiftly spread to the real economy. The sharp fall in real estate prices and the consequent devaluation of assets led to greater limitations in the availability of credit, effectively putting an end to an extended period of widespread liquidity and extensive credit at low interest rates. The current environment is characterised by lower levels of confidence, stricter financing criteria and increased risk awareness causing a huge increase in spreads. Moreover, the sharp rise in energy prices, raw materials and food products during the first half of 2008, had negative impacts on household available income, with consumer confidence at minimum historical levels.
The year 2009 and probably also 2010, will be marked by strong and simultaneous recession in the main developed economies and to a higher than expected slowdown in emerging economies. As a result of the deterioration of the global macroeconomic environment, the main international organizations have continuously been revising their growth predictions downwards. According to the IMF's most recent projections published in March 2009, the world economy should contract around 0.5% and 1.0%, recovering for a 1.5% to 2.5% growth in 2010. Developed economies should continue to contribute negatively, with economic indicators recently disclosed pointing out to a higher fall in activity levels. It is expected that economic activity contracts to a range between ‐3% and 3.5%. In emerging economies, economic activity should slow down at a stronger than expected pace, between 1.5% and 2.5%.
The year 2009 is likely to be characterised by a general recession and the worst since the 40's. Doubt remains as to the recovery capacity in 2010.
The Portuguese Economy, after recording a reasonable growth period, during which GDP grew by 1.4% in 2006 and 1.9% in 2007, but still below potential GDP, started to slow, in 2008, in the same way as most world economies, due to the worsening macroeconomic environment driven by the international financial system crisis.
Recent forecasts point to 0.3% growth in 2008 GDP. In the first three quarters of the year, GDP growth progressively deteriorated to an average of 0.7%. This economic performance has been driven mainly by the trend of investment and external demand. In relation to investment, the upward trend recorded in 2007 was reversed and began to decrease in 2008 (forecast for the year is for a contraction to ‐0.8%, compared to 3.2% growth in 2007), with a general slowdown of its component parts. The performance of external net demand was weak. Exports are expected to have slowed to 0.6% growth (7.5% in 2007). During 2008, imports were contained (2.4% growth), in line with the international environment and the contraction of internal demand. The growth of internal demand is expected to have slowed down to 1.0% by the end of 2008 (1.6% in 2007). This performance was driven by the unfavourable performance of private consumption that will have slowed to 1.4% this year, due to the consumer uncertainty that marks the current macro economic environment and to the less favourable outlook for economic activity and employment in Portugal. On the positive side, the highlight has been the growth of public expenditure which, as in 2007, continued to slow down (0.2% growth is expected in 2008), as a result of budget consolidation required to balance public finances. As a result, the public deficit in 2008 should be of around 2.4% of GDP (2.6% of GDP in 2007). The behaviour of inflation during the year varied: the rising trend that started in the 3rd quarter of 2007 continued into the first half of the year, but fell progressively in the second half of the year, and ended the year at 2.6% (2.5% in 2007). Despite the slowdown in economic activity in 2008, the unemployment rate fell to 7.8% (8.0% in 2007).
In 2009, the current macroeconomic situation, marked by pessimism and uncertainty, will worsen, with forecasts indicating GDP contraction to at least ‐0.8%. Exports are expected to slow down, adversely affecting the performance of Portuguese exporting companies. The lower levels of business and consumer confidence, more difficult access to credit and the rise in unemployment should dampen internal demand, leading to a fall in consumption and imports. The fall in fuel and food product prices, as well as the fall in interest rates, should be favourable to domestic household demand and also help to reduce company costs. Public consumption is expected to increase to counter the cyclical trend and provide support to the economy. Lastly, investment is expected to show a downward trend which will probably intensify further due to the uncertainty of the external environment and by the credit crunch.
Agreement for the sale of the whole of the shareholding in Contacto – Sociedade de Construções, SA to Soares da Costa, Construção, SGPS, SA.
Contractual sale of the whole of the shareholding in Contacto – Sociedade de Construções, SA to Soares da Costa, Construção, SGPS, SA, following the terms of the initial agreement of 3 January 2008. The sales price was 81.5 million euro, generating a cash inflow of 17.5 million euro.
Sale of 12.25% of the share capital of Spinveste – Promoção Imobiliária, SA and 12.25% of the share capital of Spinveste – Gestão Imobiliária, SGII, SA for 5 million euro, to Espimaia (owned by former Sonae managers). Additionally, a call option was granted to Espimaia for the remaining shareholding in both companies, to be exercised up to 31 December 2011. This transaction implied a net asset valuation of 40.8 million euro.
Agreement reached with Salvador Caetano Auto, SGPS, SA on the terms for the definitive sale of the shareholding of 50% in Choice Car, SGPS, SA for a total price of 12.5 million euro.
Negotiation of the end of the agreement regarding the phased disposal of its entire shareholding in Elmo, SGPS, SA, company that controls 100% of Plysorol, SAS and its subsidiaries.
Promissory purchase and sale agreement signed with a company wholly owned by Hagen Imobiliária, SA for the sale of a parcel of land where the Hotel Resort, within the Troiaresort project will be built. The promissory sale will have an estimated impact of 13 million euro on the consolidated results of Sonae Capital, to be recognized on the date of the definitive sale agreement.
Completion of the sale of Choice Car, SGPS, SA. The sales price was 12.5 million euro with a corresponding capital gain of 9.1 million euro impacting the 2008 consolidated results of Sonae Capital.
Disposal of several retail real estate assets, with an estimated positive impact of circa 0.9 million euro in the 2008 consolidated results of Sonae Capital.
Contacto Concessões, SGPS, SA, an affiliate of Sonae Capital, SGPS, SA acquired from Eiffage, SA and its subsidiaries 5,500 shares, representing 11% of the share capital of Norscut – Concessionária de Auto‐estradas, SA, increasing its shareholding in this company from 25% to 36%.
SC, SGPS, SA, a wholly owned subsidiary of Sonae Capital, SGPS, SA, completed an unsecured bond issue of 50 million euro, with a tenor of 10 years and a put option exercisable as from the end of the eighth year onwards.
Notification made by the French Competition Authority ("Conseil de la Concurrence") to Plysorol to pay a fine of around 4.2 million euro on charges of price coordination during the period between 1995 and 2004 and of using a common price list from 1987 to 2004.
Sonae Capital, SGPS, SA informed about the opening of rehabilitation proceedings of Plysorol, SAS.
Sonae Capital, SGPS, SA informed about the Court decision regarding the rehabilitation proceedings of Plysorol, SAS.
Sonae Capital, SGPS, SA Report and Accounts 9
Sonae Capital, SGPS, SA announced that the voting rights in relation to 138,890,609 shares representing 55.5562% of the share capital of Sonae Capital, SGPS, SA are attributable to Efanor Investimentos, SGPS, SA.
Sonae Capital, SGPS, SA announced that the voting rights in relation to 22,589,704 shares representing 9.036% of the share capital of Sonae Capital, SGPS, SA are attributable to Banco BPI, SA.
Sonae Capital, SGPS, SA announced that the voting rights in relation to 17,166,440 shares representing 6.8666% of the share capital of Sonae Capital, SGPS, SA are attributable to Mr. Mohnish Pabrai.
* Information as required by Article 17 of the Portuguese Securities Code. For updated information on qualifying shareholdings please refer to section III.2 of the Corporate Governance Report.
Disclosure of resolutions approved at the Shareholders' General Meeting, including an increase in the number of members of the Board of Directors from 3 to 7 and election of new members to fill vacant positions in the Board of Directors, until the end of the current mandate.
Disclosure of resolutions of the Board of Directors, namely appointment of an Executive Committee and appointment of a Board Audit and Finance Committee and a Board Nomination and Remuneration Committee.
Sonae Capital, SGPS, SA informed that the Chairman of the Fiscal Board resigned and his vacancy was filled by the substitute member of the Fiscal Board.
Sonae Capital, SGPS, SA informed about election of the Chairman of the Fiscal Board.
Sonae Capital, SGPS, SA informed about payment of interest of the first coupon of SONAE CAPITAL SGPS 2007/2012 – 1st and 2nd Emissions bond loan.
Sonae Capital, SGPS, SA informed about payment of interest of the second coupon of SONAE CAPITAL SGPS 2007/2012 – 1st and 2nd Emissions bond loan.
Sonae Capital, SGPS, SA Report and Accounts 10
Notes:
• In view of the fact that Sonae Capital, SGPS, SA was incorporated as a result of a demerger from Sonae, SGPS, SA, no historical consolidated financial statements exist for the company, since it was exempt from preparing them as a wholly owned affiliate of Sonae, SGPS, SA.
Thus, in order to ensure comparability of financial data, pro forma financial statements were prepared for the year 2007 (profit and loss account for the twelve month period ended 31 December 2007 and balance sheet as at 31 December 2007), considering a historical business portfolio equivalent to that of Sonae Capital, SGPS, SA at the time.
The pro forma consolidated financial statements do not include the contribution of Contacto – Sociedade de Construções, SA sold on 21 February 2008.
In the 2008 financial statements, these contributions are identified as discontinued operations as a result of the following events, announced by Sonae Capital in due time:
The consolidated financial statements of Sonae Capital also include a loss of 9.3 million euro reflecting the best estimate of the impact of deconsolidating these businesses, which will take place as soon as Sonae Capital loses definitive control over Plysorol and when Elmo (sole shareholder of Plysorol) is liquidated.
In view of the above considerations, like for like comparisons regarding consolidated financial statements do not take into consideration discontinued operations and are used consistently throughout the report when applicable.
Values in 103 euro
| 4Q 08 Total Operations |
4Q 08 Discontinued Operations |
4Q 08 Continued Operations |
4Q 07 Continued Operations |
∆ (A/B) | |
|---|---|---|---|---|---|
| (A) | (B) | ||||
| Turnover | 87,039.4 | 0.0 | 87,039.4 | 60,136.9 | 44.7% |
| Other Operational Income | 3,341.1 | 0.0 | 3,341.1 | 3,724.8 | ‐10.3% |
| Total Operational Income | 90,380.5 | 0.0 | 90,380.5 | 63,861.7 | 41.5% |
| Cost of Goods Sold | ‐17,064.4 | 0.0 | ‐17,064.4 | ‐14,026.6 | ‐21.7% |
| Change in Stocks of Finished Goods | 9,861.9 | 0.0 | 9,861.9 | 5,963.6 | 65.4% |
| External Supplies and Services | ‐53,304.7 | ‐4.8 | ‐53,299.9 | ‐39,178.4 | ‐36.0% |
| Staff Costs | ‐12,323.0 | 0.0 | ‐12,323.0 | ‐10,002.0 | ‐23.2% |
| Other Operational Expenses | ‐3,689.0 | 5.8 | ‐3,694.8 | ‐1,755.2 | <‐100% |
| Total Operational Expenses | ‐76,519.3 | 0.9 | ‐76,520.3 | ‐58,998.6 | ‐29.7% |
| Operational Cash‐Flow (EBITDA) | 15,557.8 | 0.9 | 15,556.9 | 4,592.4 | >100% |
| Amortisation and Depreciation | ‐2,896.3 | 0.0 | ‐2,896.3 | ‐2,008.1 | ‐44.2% |
| Provisions and Impairment Losses | ‐7,846.3 | 0.0 | ‐7,846.3 | ‐511.8 | <‐100% |
| Operational Profit/(Loss) (EBIT) | 3,118.6 | 0.9 | 3,117.7 | 2,343.2 | 33.1% |
| Net Financial Expenses | ‐2,354.6 | ‐46.1 | ‐2,308.5 | ‐1,666.8 | ‐38.5% |
| Share of Results of Associated Undertakings | 961.2 | 0.0 | 961.2 | 159.1 | >100% |
| Investment Income | ‐6,553.6 | 0.0 | ‐6,553.6 | 2,562.7 | ‐ |
| Profit before Taxation | ‐4,828.5 | ‐45.2 | ‐4,783.3 | 3,398.1 | ‐ |
| Taxation | ‐3,348.9 | 0.7 | ‐3,349.6 | 2,193.6 | ‐ |
| Net Profit | ‐8,177.3 | ‐44.5 | ‐8,132.8 | 5,591.8 | ‐ |
| Attributable to Equity Holders of Sonae Capital | ‐10,774.9 | ‐44.2 | ‐10,730.7 | 5,024.6 | ‐ |
| Attributable to Minority Interests | 2,597.6 | ‐0.3 | 2,597.8 | 567.1 | >100% |
Like for like consolidated profit and loss account for the quarter was significantly impacted by the sale of 52 Troiaresort apartments and Golf & Beach villa plots in the last quarter of the year:
The remaining businesses' quarterly turnover increased marginally compared to the same period last year.
Quarterly like for like operational cash‐flow (EBITDA) includes 1.3 million euro of non‐recurrent costs associated with the write‐off of assets that were replaced and disposed of in the course of refurbishment works in the Troia Peninsula hotel units.
Net profit for the quarter fell by 13.7 million euro, to negative 8.1 million euro, on a like for like basis, with improved operational performance being offset by the 9.3 million euro estimated loss which will arise from the deconsolidation of the Plywood business, the 8.1 million euro impairment losses in real estate properties, recorded in the period, and a lower level of deferred tax assets arising from tax losses carried forward.
| 2008 Total Operations |
2008 Discontinued Operations |
2008 Continued Operations |
2007 Continued Operations |
∆ (A/B) | |
|---|---|---|---|---|---|
| (A) | (B) | ||||
| Turnover | 250,845.3 | 20,307.7 | 230,537.6 | 197,277.2 | 16.9% |
| Other Operational Income | 8,763.7 | 513.5 | 8,250.2 | 8,202.3 | 0.6% |
| Total Operational Income | 259,609.0 | 20,821.2 | 238,787.8 | 205,479.5 | 16.2% |
| Cost of Goods Sold | ‐66,745.9 | ‐11,150.9 | ‐55,595.0 | ‐51,004.3 | ‐9.0% |
| Change in Stocks of Finished Goods | 57,293.7 | ‐703.5 | 57,997.2 | 32,409.3 | 79.0% |
| External Supplies and Services | ‐181,586.9 | ‐6,534.1 | ‐175,052.7 | ‐132,258.6 | ‐32.4% |
| Staff Costs | ‐50,256.5 | ‐4,857.6 | ‐45,398.9 | ‐38,554.4 | ‐17.8% |
| Other Operational Expenses | ‐8,919.7 | ‐907.0 | ‐8,012.7 | ‐6,401.8 | ‐25.2% |
| Total Operational Expenses | ‐250,215.2 | ‐24,153.1 | ‐226,062.1 | ‐195,809.7 | ‐15.4% |
| Operational Cash‐Flow (EBITDA) | 10,235.0 | ‐3,404.8 | 13,639.8 | 9,112.8 | 49.7% |
| Amortisation and Depreciation | ‐10,941.4 | ‐1,104.1 | ‐9,837.4 | ‐7,324.1 | ‐34.3% |
| Provisions and Impairment Losses | ‐10,694.8 | 4.6 | ‐10,699.4 | ‐722.7 | <‐100% |
| Operational Profit/(Loss) (EBIT) | ‐12,242.4 | ‐4,431.3 | ‐7,811.1 | 1,622.9 | ‐ |
| Net Financial Expenses | ‐11,948.6 | ‐932.0 | ‐11,016.6 | ‐9,998.2 | ‐10.2% |
| Share of Results of Associated Undertakings | ‐2,099.8 | 0.0 | ‐2,099.8 | 857.3 | ‐ |
| Investment Income | 53,084.7 | 0.0 | 53,084.7 | 12,142.0 | >100% |
| Profit before Taxation | 26,793.9 | ‐5,363.3 | 32,157.2 | 4,624.1 | >100% |
| Taxation | ‐3,842.2 | ‐77.5 | ‐3,764.7 | 4,809.2 | ‐ |
| Net Profit | 22,951.7 | ‐5,440.8 | 28,392.5 | 9,433.2 | >100% |
| Attributable to Equity Holders of Sonae Capital | 21,393.6 | ‐3,274.5 | 24,668.1 | 8,579.4 | >100% |
| Attributable to Minority Interests | 1,558.1 | ‐2,166.2 | 3,724.3 | 853.8 | >100% |
On a like for like basis, turnover for the year amounted to 230.5 million euro, a 33.3 million euro increase explained by the following changes in yearly contributions:
Values in 103
euro
• ‐6.9 million euro in other business segments, of which ‐5.6 million euro in respect of Real Estate Asset Management, due to a lower level of asset sales, which amounted to 2.9 million euro (8.2 million euro).
Like for like operational cash‐flow (EBITDA) for the year increased 4.5 million euro, to 13.6 million euro, and was positively impacted by:
On the downside, the Tourism Operations business segment contributed with a 4.9 million euro fall in EBITDA, to negative 1.6 million euro, including 1.3 million euro of non‐recurrent costs arising from the write‐off of assets which were replaced and disposed of following refurbishment works in Troiaresort's hotel units, the impact of closure of operations in the resort during the first eight months of the year and of pre‐(re) opening costs. The Real Estate Asset Management contribution fell 2.6 million euro, to 3.6 million euro, as a consequence of a lower level of real estate assets sales.
Provisions and impairment losses for the year include 6.2 million euro related to real estate properties and 2.2 million euro related to other debtors (first quarter of 2008), which led to a fall in operational profit which stood at negative 7.8 million euro (positive 1.6 million euro).
Net financial expenses increased around 1.0 million euro, amounting to 11.0 million euro.
Investment income for the year totalled 53.1 million euro, including: capital gain of 46.4 million euro from the sale of Contacto – Sociedade de Construções, SA in February; capital gain of 9.1 million euro from the sale of Choice Car, SGPS, SA in September; and estimated loss of 9.3 million euro arising from the exit from the Plywood business. In 2007, this caption included mainly the gain on the sale of ba Vidro and on the sale of 75% of Cinclus.
As a result, net income for the period was 28.4 million euro, a 19 million euro increase over 2007.
Values in 103 euro
| 31.12.2008 Total |
31.12.2008 Discontinued Operations |
31.12.2008 Continued Operations |
31.12.2007 Continued Operations |
|
|---|---|---|---|---|
| Fixed Assets | 415,181.7 | 28,944.4 | 386,237.3 | 328,841.8 |
| Goodwill | 61,766.6 | 0.0 | 61,766.6 | 62,517.5 |
| Non‐Current Investments | 44,230.6 | 1.5 | 44,229.1 | 96,171.9 |
| Other Non‐Current Assets | 39,590.0 | 343.9 | 39,246.1 | 38,429.6 |
| Stocks | 241,382.4 | 18,663.1 | 222,719.3 | 142,074.7 |
| Trade Debtors and Other Current Assets | 106,803.4 | 26,692.2 | 80,111.2 | 83,788.0 |
| Cash and Cash Equivalents | 19,317.0 | 1,383.5 | 17,933.4 | 43,957.0 |
| Total Assets | 928,271.7 | 76,028.6 | 852,243.1 | 795,780.5 |
| Total Equity attributable to Equity Holders of Sonae Capital Total Equity attributable to Minority Interests Total Equity |
306,845.8 49,319.4 356,165.2 |
‐12,816.9 ‐8,619.8 ‐21,436.7 |
319,662.7 57,939.2 377,601.9 |
321,033.2 36,758.8 357,792.0 |
| Non‐Current Borrowings | 151,811.1 | 1,578.8 | 150,232.3 | 191,453.6 |
| Other Non‐Current Liabilities | 69,381.3 | 41,038.2 | 28,343.1 | 36,768.4 |
| Provisions | 23,456.8 | 4,431.3 | 19,025.5 | 11,442.2 |
| Non‐Current Liabilities | 244,649.2 | 47,048.3 | 197,600.9 | 239,664.2 |
| Current Borrowings | 141,262.5 | 12,151.1 | 129,111.4 | 24,751.0 |
| Trade Creditors and Other Current Liabilities | 184,896.6 | 38,266.0 | 146,630.6 | 169,757.9 |
| Provisions | 1,298.2 | 0.0 | 1,298.2 | 3,815.5 |
| Current Liabilities | 327,457.3 | 50,417.0 | 277,040.3 | 198,324.3 |
| Total Liabilities | 572,106.5 | 97,465.3 | 474,641.2 | 437,988.5 |
| Total Equity and Liabilities | 928,271.7 | 76,028.6 | 852,243.1 | 795,780.5 |
The year 2008 was marked by the strong pace of investment in projects under development, namely Troiaresort and Efanor, and in the Imosede Fund.
Capex for the year amounted to 119.6 million euro, with the main items being:
In addition, real estate projects under development required investment of 61.0 million euro, recorded as changes in work in progress for the period, of which 50.7 million euro was invested in residential units in Troiaresort and 6.1 million euro in the 40 apartment building Delfim Pereira da Costa in Efanor.
The reduction in Non‐Current Investments reflects a reduction of 50 million euro in the fair value of the shareholding (7.846%) in Sonae Indústria, adversely impacted by the negative trend of stock markets during 2008.
As at 31 December 2008 net debt (including discontinued operations) stood at 273.8 million euro, a 101.9 million euro increase compared to end 2007 (total operations), reflecting the investment in the resort development business. Net debt fell by 10.2 million euro compared to 30 September 2008 as a result of the stronger cash inflow from the concentration of Troiaresort apartment deeds signed in the last quarter of 2008.
Repayment Schedule (nominal value of borrowings in million euro) 24.8 114.4 24.2 3.7 17.8 141.0 25.6 3.5 31.6 31.0 61.1 31.7 N+1 N+2 N+3 N+4 N+5 After N+5 YE 07 YE 08 N: Reporting Date
As at 31 December 2008, debt maturity profile was as follows:
The amount of 141 million euro maturing in 2009 includes a commercial paper programme of 110 million euro. Currently, Sonae Capital is negotiating the extension of this programme for two more years as foreseen in the initial contract.
Gearing reached 76.9% (48.1%) and interest cover was 1.0, improving from last year's 0.6.
Figures included in the Business Review chapters with respect to the year 2007 refer to contributions to Sonae Capital's consolidated figures and thus may differ from management and statutory figures reported in the 2007 Report of the Board of Directors.
Total contributions of Turismo and Spred to consolidated turnover and operational cash‐flow (EBITDA) from continued operations, can be detailed as follows, and are thoroughly explained in the following paragraphs:
| Turnover | Values in 103 euro |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 4Q 08 | 4Q 07 | ∆ | 2008 | 2007 | ∆ | ||||||
| Resort & Residential Development | 31,016.5 | 6,618.7 | >100% | 33,375.3 | 7,744.2 | >100% | |||||
| Real Estate Asset Management | 3,428.9 | 2,921.2 | 17.4% | 9,700.5 | 15,307.0 | ‐36.6% | |||||
| Tourism Operations | 8,913.5 | 8,400.7 | 6.1% | 34,852.9 | 33,782.3 | 3.2% | |||||
| Other | 0.1 | 1.0 | ‐89.1% | 9.0 | 6.5 | 38.4% | |||||
| Turismo's contribution | 43,359.1 | 17,941.7 | >100% | 77,937.7 | 56,839.9 | 37.1% | |||||
| Selfrio Group | 27,389.7 | 25,446.2 | 7.6% | 84,720.6 | 74,232.4 | 14.1% | |||||
| Box Lines | 10,851.0 | 10,318.9 | 5.2% | 45,596.3 | 44,954.9 | 1.4% | |||||
| Atlantic Ferries | 896.3 | 630.3 | 42.2% | 4,849.8 | 630.3 | >100% | |||||
| Other | 4,334.1 | 4,626.2 | ‐6.3% | 17,309.2 | 18,448.6 | ‐6.2% | |||||
| Spred's contribution | 43,471.2 | 41,021.6 | 6.0% | 152,476.0 | 138,266.3 | 10.3% |
euro
| 4Q 08 | 4Q 07 | ∆ | 2008 | 2007 | ∆ | |
|---|---|---|---|---|---|---|
| Resort & Residential Development | 13,032.1 | 1,660.8 | >100% | 4,781.8 | ‐6,028.4 | ‐ |
| Real Estate Asset Management | 1,240.4 | 595.3 | >100% | 3,631.0 | 6,206.5 | ‐41.5% |
| Tourism Operations | ‐1,828.2 | 64.7 | ‐ | ‐1,559.9 | 3,337.9 | ‐ |
| Other | ‐478.6 | ‐72.1 | <‐100% | ‐770.2 | ‐973.9 | 20.9% |
| Turismo's contribution | 11,965.7 | 2,248.8 | >100% | 6,082.7 | 2,542.1 | >100% |
| Selfrio Group | 2,803.0 | 2,578.9 | 8.7% | 8,073.4 | 6,984.8 | 15.6% |
| Box Lines | ‐106.9 | ‐177.3 | 39.7% | 1,487.7 | 1,213.0 | 22.6% |
| Atlantic Ferries | ‐268.2 | ‐200.3 | ‐33.9% | 157.1 | ‐378.2 | ‐ |
| Other | 213.0 | ‐20.3 | ‐ | ‐161.0 | 97.7 | ‐ |
| Spred's contribution | 2,641.0 | 2,181.0 | 21.1% | 9,557.2 | 7,917.2 | 20.7% |
Troiaresort is Sonae Turismo's first resort development project and will be the company's flagship project over the coming years.
Troiaresort is being developed in the northern tip of the Tróia peninsula, located less than one hour from Lisbon, between the Sado Estuary Natural Reserve and the Serra da Arrábida Natural Park. The project is being developed in an area of 486 hectares with 380 thousand m2 of construction area, and positioned as a family oriented resort, offering a wide range of products and services throughout the year, taking advantage of the outstanding environmental and cultural heritage of the peninsula.
The project follows a multipurpose concept, made up of tourism apartments and villas, hotels, a marina, a golf course, a casino, congress and exhibition centre and retail area.
The Residential Development area is focused on developing high quality residential projects targeting the high and medium/high market segments in key urban centres.
The main project underway is the Efanor project, in Matosinhos (Porto Metropolitan Area), which covers a land area of 12 hectares, with a construction area or around 110 thousand m2 , and involves the construction of a maximum of 700 high quality apartments, divided among 6 buildings. Construction of the first building is currently underway.
In June 2007 construction work was for the City Flats / City Lofts project, also in Matosinhos, which has two buildings comprising 212 apartments, with an average area of 50 m2 .
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | |
|---|---|---|---|---|---|---|
| Turnover | 31,016.5 | 6,618.8 | > 100% | 33,375.3 | 7,744.2 | > 100% |
| Operational Cash‐Flow (EBITDA) |
13,032.1 | 1,660.8 | > 100% | 4,781.8 | (6,028.4) | ‐ |
Contribution to consolidated figures Unit: 103
In 2008, growth in turnover was explained by the 52 sales deeds signed for Troiaresort's Marina and Beach apartments and Golf & Beach villa plots in the last quarter of the year. The sale of City Flats apartments, sole contributors to 2007 turnover, remained below last year's level, due to a slowdown in sales, following a surge in the second half of 2007, after construction work was concluded (76 sales deeds were signed in 2007 compared to 16 sales deeds and 16 rental contracts in 2008).
Operational cash‐flow (EBITDA) for the year reflects the impact of the sale of Troiaresort apartments and Golf & Beach villa plots, which represent a turnaround from the previous year's negative EBITDA, still impacted by Troiaresort's development and marketing costs. The average margin (net of commercialisation and marketing fees) in the year was 45%, which was dependent on the project mix and reflects a higher margin on the sale of villa plots.
Euro
On 8 September 2008 the Troiaresort site was officially opened, three years after the implosion of the towers that marked the beginning of construction works on the peninsula.
As of the date of this announcement, several construction works and key projects have been concluded, namely:
Works and projects currently underway include:
On 14 May 2008, a promissory agreement for the sale of a parcel of land where the Hotel Resort will be built was signed with Empire House – Investimentos Imobiliários, SA, wholly owned by Hagen Imobiliária, SA. The promissory agreement states that the signing of the definitive agreement is conditional on sine qua non provisions, namely the operation of the Hotel Resort by an internationally renowned luxury hotel brand and its inauguration within 36 months of the building permit being issued by the Grândola Municipal Council. The agreement has a precedent condition establishing that authorisation (already issued) for the sale must be obtained from the Minister responsible for Tourism, under the terms of the investment contract agreed between Sonae Capital Group companies, the Portuguese State and other public entities on 16 May 2000 and revised in June 2005. The promissory sale will have an estimated impact of 13 million euro on Sonae Capital's consolidated results, which will only be recognised on the date of the definitive sale agreement.
From the last reporting date (11 November 2008) to 24 March 2009, no new promissory purchase agreements were signed and some were converted thus resulting in a decrease of one in the number of apartments promised to be sold. In that same period, 128 sales deeds were signed (in the previous period 8 deeds were signed which together with those signed in this period total 136 deeds as shown in the table below). The fall in new contracts signed is a consequence of the negative macroeconomic environment and increased caution in taking investment decisions by potential buyers.
| Troiaresort sales information as at 24 March 2009 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Promissory Purchase Agreements |
# Deeds | Total # Units (Sold + Pre |
% of Total | |||||||
| #1 | Area2 | Price3 | # | Area2 | Price3 | Sold) | ||||
| Beach apartments [211 units] | 51 | 132.0 | 3,995 | 68 | 124.9 | 4,042 | 119 | 56% | ||
| Marina apartments [78 units] | 6 | 84.6 | 3,915 | 42 | 83.3 | 3,883 | 48 | 62% | ||
| Golf and Beach Villa Plots4 [96 units] | 6 2,161.8 | 574 | 26 2,036.2 | 530 | 32 | 33% | ||||
| Aqualuz Troia Mar[35 units] | 1 | 87.7 | 4,447 | ‐ | ‐ | ‐ | 1 | 3% | ||
1
Number of pre sold units (Promissory Purchase Agreement) net of units with deeds already signed. 2 Average areas (m2 ), including indoor areas as well as balcony and terrace areas.
3 Average sales price (€/m2 ).
4 All plots have a GCA of 343.8 m2 .
On 13 March 2009, 22 tourism units in the Troiaresort (comprising plots of land and apartments) were sold to one of the general contractors in Troiaresort, as part of an agreement signed on the same date regarding payment of the last instalment of the price of construction work in the Central Area. The total consideration amounted to 13.7 million euro, in accordance with the current price list.
Troiaresort has been actively promoting the resort concept and projects in both national and international markets, through media support (newspapers and magazines) and specific sector initiatives. Up to the date of this announcement, the latter included:
In addition to these initiatives, Troiaresort has been particularly active in the German market, working together with its local partner Engel & Völkers.
To date, around 27% of the units available were sold in foreign markets, among which Germany and Spain are the most representative.
The general feeling is that promotional efforts have been translating into serious interest for the project's tourism offer, resulting in an increased flow of visitors to the two sales offices and the tourism apartments on sale. However, this has not yet been reflected in completed sales, due to buying decisions being delayed because of the negative macroeconomic environment. Nevertheless, during the last 30 days 8 new reservations of apartments were confirmed, following the beginning of the occupancy of the resort with the owners of the apartments and hotel customers. These reservations are expected to be followed by the signature of the correspondent promissory purchase agreements and sales deeds.
In view of the seasonal pattern of visitor flows (higher in summer months, Easter and public holidays) and the fact that most apartments already sold will only be occupied up to the beginning of summer 2009, new sales are expected to take place in the second half of the year, despite the adverse macroeconomic environment.
Up to 31 December 2008, total investment in Troiaresort amounted to 244.8 million euro (including VAT), broken down as follows:
| Values in 106 euro |
||
|---|---|---|
| Estimated investment |
Amount already invested |
|
| Real Estate projects currently for sale | 85.2 | 75.3 |
| Real Estate projects to be developed | 166.0 | 46.8 |
| Other projects (works in Tróia aparthotels, marina and car parks) | 77.6 | 69.3 |
| Infrastructures (general and specific infrastructures of the different UNOPs and cost of licenses related with Detailed Plans) |
64.9 | 53.4 |
| Total | 393.7 | 244.8 |
In addition to Troiaresort, two smaller tourism projects in the Douro region, Quinta da Azenha and Vistas do Freixo, are in the Detailed Planning stage, and are being promoted as part of a Special Town and Country Plan (POACL ‐ Plano de Ordenamento da Albufeira de Crestuma‐Lever), which have total plot areas of 460,415 m2 and 77,127 m2 , respectively. The projects are made up of tourism villas, tourism apartments and family housing.
Construction of the first building of the Efanor project, Delfim Pereira da Costa, is underway as scheduled and the showcase apartment should be ready by June 2009. Due to more difficult market conditions, the sole promissory purchase agreement signed to date has been cancelled at the request of the prospective buyer. Marketing efforts continue to be on hold until the conclusion of the showcase apartment, in view of the reduction in demand.
Residential Development sales information as at 24 March 2009
| Apartments Sold1 |
Average Area (m2 2 ) |
Average Sales Price (€/m2 ) |
Rentals3 | |
|---|---|---|---|---|
| City Flats / Lofts ‐ Building E [106 units] | 7 | 55.2 | 1,978 | 14 |
| City Flats / Lofts ‐ Building F [106 units] | 88 | 49.6 | 2,020 | 0 |
| Efanor ‐ Building Delfim Pereira da Costa [40 units] | ‐ | ‐ | ‐ | n.a. |
1 93 sales deeds already signed.
Regarding other residential property projects, the highlight has been progress on the D. João V building project in Campolide, Lisbon. The Detailed Planning terms of reference were published on 16 July 2008 and assessed in an audience of the Lisbon City Council in February 2009. The Detailed Plan is expected to be approved in 2009. The project has a gross construction area above ground of 34,300 m2 .
2 Includes indoor area as well as balcony and terrace areas.
3 6 of these rental contracts have an embedded purchase option.
The Real Estate Asset Management business area is responsible for property management, real estate procurement services, sales, project management, building technical management and condominium management of all real estate assets (land and buildings) owned by Sonae Turismo.
Thus, real estate owned to feed the pipeline of future resort or residential projects, is managed by the Real Estate Asset Management division before a decision is taken to invest in a resort or residential project, at which point the design and development, engineering, construction and commercialization stages take place. From that point up to the conclusion of the project, the management of the asset is transferred to the Resort and Residential Development division. Also, rents paid by tourism operational companies to companies owning tourism assets are not included in the Asset Management division.
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | |
|---|---|---|---|---|---|---|
| Turnover | 3,428.9 | 2,921.2 | +17.4% | 9,700.5 | 15,307.0 | ‐36.6% |
| Operational Cash‐Flow (EBITDA) |
1,240.4 | 595.3 | >100% | 3,631.0 | 6,206.5 | ‐41.5% |
Contribution to consolidated figures Unit: 103
Revenues in the period can be broken down as follows:
| 2008 | 2007 | ∆ | ||||||
|---|---|---|---|---|---|---|---|---|
| Turnover by Type | Value | Weight | Value | Weight | ||||
| Sale of Real Estate Assets | 2,902.8 | 30% | 8,247.6 | 54% | ‐65% | |||
| Rents | 5,603.8 | 58% | 5,909.8 | 39% | ‐5% | |||
| Car Parks | 459.6 | 5% | 443.5 | 3% | 4% | |||
| Condominium Management | 729.3 | 7% | 706.1 | 4% | 3% | |||
| Management Services | 5.0 | 0% | ‐ | 0% | ‐ | |||
| Total | 9,700.5 | 100% | 15,307.0 | 100% | ‐37% | |||
| Unit: 103 |
Euro
Operational figures for the year of 2008 remained below those of the previous year, mainly due to a lower level of real estate assets sales, as highlighted in the table above. In 2007, turnover included 5.5 million euro from the sale of a plot of land located in Senhora da Hora, Matosinhos.
Net profit for the period, amounting to negative 4.1 million euro (negative 1.4 million euro),,was positively impacted by investment income arising from the following transactions:
Property management comprises a set of assets which can be grouped under different categories:
| Category | Main assets |
|---|---|
| Assets in operation | • Boavista complex, namely Hotel Porto Palácio, Congress Centre, Health Club and SPA, with a gross construction area above ground of 22,990 m2 ; |
| • Lagos complex, namely Aqualuz Lagos Suite Hotel Apartments and Health Club, with a gross construction area above ground of 22,632 m2 ; |
|
| • Troiaresort Aqualuz Aparthotels (Tróia Mar, Tróia Rio and Tróia Lagoa), with a gross construction above ground area of 32,224 m2 ; |
|
| Troia Shopping, with 33 available shops and a 4,114 m2 retail • area. |
|
| Projects under development and for sale |
Projects already in the construction stage: |
| • Maia Business Park, owned through the Imosede real estate fund, comprises offices and industrial facilities of Efanor Group companies already built and in use and a portfolio of future projects for office and industrial buildings, with a total gross construction area above ground of 192,569 m2 ; |
|
| Projects in the design and licensing stages: | |
| • Residential project D. João V, in Lisbon, with a gross construction area of 34,300 m2 ; |
|
| • Fábrica do Cobre, in Porto, with a gross construction area above ground of 43,700 m2 for residential and commercial purposes; |
|
| • Quarteirão Duque de Loulé, in Lisbon, a residential project with a gross construction area above ground of 10,298 m2 ; |
|
|---|---|
| • Baluarte project, in Lagos, with a gross construction area above ground of 3,815 m2 , for residential and commercial purposes; |
|
| Projects for sale: | |
| • Infrastructured land plots for residential purposes in Marco de Canaveses (47,448 m2 of gross construction area above ground), in Santarém (26,010 m2 of gross construction area above ground of, ) and in São João da Madeira (30,840 m2 of construction area above ground); |
|
| • Plots of land in Matosinhos (gross construction area above ground of 21,417 m2 for future construction of an office building and a hotel). |
|
| Land | Most significant assets include: |
| in Beja (5,290,000 m2 presently • Rural plot of land with no construction viability); |
|
| • Rural plot of land in Mourão, Alqueva region, for future development of real estate projects. |
|
| Other Rented and For Sale Assets |
Besides the above mentioned, other real estate assets include housing, offices, retail premises, industrial buildings and car parks which are rented out or for sale. |
Sonae Capital's strategy regarding real estate asset management is to dispose of real estate assets that do not fit the strategy for the future development of Tourism or Residential real estate projects.
The property portfolio of Sonae Capital was reviewed by Cushman & Wakefield who issued a valuation report which is published separately on the company's website (www.sonaecapital.pt). The total value of properties was put at 910.9 million euro, of which 444.1 million euro correspond to the market value of properties and 466.8 million euro to an opinion of value.
Sonae Turismo runs tourism operations in hotels, fitness and leisure.
The Group's activity in this area covers:
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | |
|---|---|---|---|---|---|---|
| Turnover | 8,913.5 | 8,400.7 | +6.1% | 34,852.9 | 33,782.3 | +3.2% |
| ‐ Hotels | 3,590.3 | 3,186.4 | +12.7% | 13,632.0 | 13,274.1 | +2.7% |
| ‐ Fitness | 4,474.3 | 4,436.8 | +0.8% | 17,799.5 | 17,104.7 | +4.1% |
| ‐ Funcenter | 609.7 | 729.9 | ‐16.5% | 2,712.7 | 2,939.9 | ‐7.7% |
| ‐ Others | 239.1 | 47.6 | >100% | 708.6 | 463.6 | +52.8% |
| Operational Cash‐Flow (EBITDA) |
(1,828.2) | 64.7 | <‐100% | (1,559.9) | 3,337.9 | ‐ |
| ‐ Hotels | (2,370.7) | (1,736.2) | ‐36.5% | (5,347.7) | (2,103.4) | <‐100% |
| ‐ Fitness | 877.9 | 1,165.8 | ‐24.7% | 4,401.0 | 4,551.2 | ‐3.3% |
| ‐ Funcenter | 91.9 | 730.5 | ‐87.4% | 379.4 | 1,039.4 | ‐63.5% |
| ‐ Others | (427.3) | (95.4) | <‐100% | (992.7) | (149.3) | <‐100% |
| Contribution to consolidated figures | Unit: 103 Euro |
Overall, in 2008 management of tourism operations was focused on:
Hotel Porto Palácio's operational indicators were positive for the year, and began to show the positive impact of refurbishment works and of new commercial policies implemented. RevPAR increased 14% on a year to date basis, increasing to 42.3 euro, while average daily revenue per room was 102.1 euro, up 8% over last year's figure.
The Boavista complex contribution to quarterly consolidated turnover increased 0.2 million euro being positively impacted by growth in room and catering revenues. On a year to date basis, contribution remained roughly in line with the previous year's figure.
Aparthotel Aqualuz Tróia Mar and complementary facilities (Wellness Centre & Spa and food and beverage area), which opened in the third quarter of the year, generated a 0.4 million euro (0.5 million euro) contribution to 2008 consolidated turnover. It should be noted that during 2007 Troia Hotels closed after the Summer season, so that figures are not comparable.
Operational Cash‐Flow (EBITDA) for the year was negative 5.3 million euro, and includes 1.3 million euro of costs (accounted for in the last quarter of the year) associated with the write‐off of assets (building fixtures and other equipment) that were replaced and disposed of in the course of the refurbishment works carried out in the Troia Peninsula hotels. In addition to this effect, the contribution of Troiaresort's hotel operations was also impacted by the closure of operations during the first eight months of the year and by the pre‐(re)opening costs. The Boavista complex quarterly contribution improved 0.5 million euro to negative 0.3 million euro, contributing with negative 1.5 million euro to the year's consolidated operational cash‐flow (EBITDA). Aqualuz Lagos Suite Hotel Apartment posted a positive operational cash‐flow (EBITDA) of 0.7 million euro year to date.
The year 2009 will be the first full year of operation of Troiaresort's aparthotel units and of Troia Marina, Golf and supermarket, with an expected positive impact on the year's financial performance indicators. The ramp up of hospitality and complementary activities in the resort is expected to be gradual, in view of the current macroeconomic downturn. Regarding the Boavista complex, 2009 results will be very much dependent on conferences and events scheduled for the Greater Metropolitan Area of Porto (some of which have already been translated into confirmed reservations in the Boavista Complex).
Turnover grew 4% in the year, to 17.8 million euro, largely due to the 0.5 million euro increase in revenues associated with value added services (personal trainer, Day Spa, etc). Operational cash‐ flow (EBITDA) amounted to 4.4 million euro, down from 4.6 million euro in 2007, reflecting increases in marketing costs and maintenance costs, in order to increased membership, retain customers and ensure the quality of service provided. Quarterly consolidated operational cash‐flow (EBITDA) was 0.9 million euro (1.2 million euro), a decrease over previous quarters essentially due to non‐ recurrent cost associated with indemnities paid to former service providers, following the resolution of judicial claims. Overall, the annual operational cash‐flow (EBITDA) margin stood at 24% (27%) reflecting the impact of the abovementioned non recurrent items and the temporary closure of two units in the third quarter for renovation works.
Average number of active members amounted to 28,819 as at 31 December 2008 in line with the previous year.
Despite the less favourable macroeconomic environment, the objectives for the year aim at maintaining activity and profitability levels.
The activity of the Selfrio Group is divided in four major areas:
The Selfrio Group has also taken some steps towards international expansion of the air conditioning systems and refrigeration businesses to Spain (Sopair) and Brazil (Friengeenering). Some steps were also taken to study other markets.
During the second half of 2008, Selfrio developed and implemented a Technical Call Centre, which will be rolled out in 2009. This unit will ensure a faster response to customers' requests. Certified technicians will provide assistance to incoming customer calls by providing diagnosis based on remote electronic control systems and the solution to the problem at hand thus ensuring a faster response time while at the same time reducing or eliminating the need for intervention by mobile maintenance units.
The Technical Call Centre implemented in Selfrio is the embryo of a comprehensive approach to after sales service at the Selfrio Group aimed at improving customer relations and satisfaction, while increasing maintenance income streams.
The relative size of the different business areas, in terms of turnover for the years 2007 and 2008, can be broken down as follows:
The overall performance of the Selfrio Group and its contribution to the consolidated figures of Sonae Capital can be summarized as follows:
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | ||
|---|---|---|---|---|---|---|---|
| Turnover | 27,389.7 | 25,446.2 | +7.6% | 84,720.6 | 74,232.4 | +14.1% | |
| Operational Cash‐Flow (EBITDA) |
2,803.0 | 2,578.9 | +8.7% | 8,073.4 | 6,984.8 | +15.6% | |
| Unit: 103 Contribution to consolidated figures |
Sistavac was the main contributor to revenue growth with 35.8 million euro, an increase of 42%. This growth was the result of some significant contracts won in the industrial and hotel segments.
The refrigeration business with the Selfrio brand name, has long been the largest contributor to the Group's operations. In 2008, revenues remained in line with the previous year and totalled 30.4 million euro. The commercial segment, especially modern food retail where Selfrio is the uncontested market leader in Portugal, is still the main contributor to turnover, despite the industrial segment's important contribution.
The Group's objectives for 2008 for its maintenance and technical services area (SMP) included the goal of increasing business activity, This was fully attained with a 13% growth in revenues to 5.8 million euro. A factor which contributed to this performance was the broadening of the range of services provided with the introduction of a global solution for maintenance services to the construction sector.
Despite growing competition from larger Iberian operators, SKK was able to increase sales of equipment by 8% to 6.2 million euro and control the erosion of gross margins. There were two main reasons for this growth: on one hand, SKK has focused on providing solutions rather than merely selling equipment by relying on the Group's in‐house project and manufacturing capabilities; on the other hand, it has been successful in negotiating better conditions from its suppliers.
Operational cash‐flow (EBITDA) for 2008 reached 8.1 million euro, a 16% increase, with the EBITDA margin increasing slightly to 9.5% (9.4% in 2007), despite the weak performance of Sopair (Selfrio Group's company in the Spanish refrigeration and air conditioning market), where sales fell by 18% and the EBITDA contribution was zero. The company made significant changes to adapt itself to the tougher market conditions in Spain. Despite the challenges, the Group remains optimistic especially in view of the existing backlog of projects on hand for the first months of 2009.
In 2009 and in view of the challenging environment, the Selfrio Group aims at maintaining business activity and profitability levels.
Since 14 February 2005, Atlantic Ferries has had the concession for the river public transport of passengers, light and heavy vehicles and goods, between Setúbal and the Tróia Peninsula, following the public tender offer launched, for that purpose, by APSS – Administração dos Portos de Setúbal e Sesimbra, SA. The concession contract runs for 15 years and is renewable for two successive periods of 5 years, and has involved an investment of 40 million euro. The transport service started on 8 October 2007, with four chartered ferries owned by APSS. Figures for the full year 2008 are therefore not comparable with those for 2007.
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | ||
|---|---|---|---|---|---|---|---|
| Turnover | 896.3 | 630.3 | +42.2% | 4,849.8 | 630.3 | > 100% | |
| Operational Cash‐ Flow (EBITDA) |
(268.2) | (200.3) | ‐33.9% | 157.1 | (378.2) | ‐ | |
| Unit: 103 Contribution to consolidated figures |
Between October 2007 and 13 July 2008, Atlantic Ferries operated under the old system, using the same ferries and routes and charging the same prices.
On 14 July 2008, two new ferries, each with a capacity of 60 light vehicles and 500 passengers each, began operation, with a new ferry route to the new ferry pier located south of Troiaresort (as part of the overall plan to upgrade the Peninsula and divert through traffic from the Central Area) and with a new pricing structure. During the summer (until 16 September), the new service was run in conjunction with the continued operation of one of the old ferries, using the old previous route, at the old prices, catering for beachgoers.
Since 16 September, ferry transport is exclusively provided by the two new ferry boats and a temporary shuttle bus service between the ferry pier and the central area is available, which is free of charge to users.
Ticket sales in the last quarter of 2008 were weaker than those in the same period of last year because of reduced vehicle and passenger flows related to the construction work in the Tróia Peninsula (which reached a peak in May 2008), while weekend passenger flows fell due to less favourable weather conditions. Nevertheless, turnover on a quarterly basis increased reflecting the ticket price increase which was required to cover the costs of the longer ferry route and to provide improved standards of the service.
In 2008, 12,558 monthly passenger tickets were sold. Sales of single tickets for the different tariffs were as follows:
| Passengers | Light vehicles | Heavy vehicles | Two wheel vehicles | |
|---|---|---|---|---|
| 1Q 2008 | 219,018 | 100,132 | 2,573 | 2,124 |
| 2Q 2008 | 327,988 | 117,058 | 3,258 | 4,146 |
| 3Q 2008 | 510,016 | 150,835 | 2,492 | 4,573 |
| 4Q 2008 | 129,243 | 64,503 | 1,896 | 1,198 |
| Total 2008 | 1,186,265 | 432,528 | 10,219 | 12,041 |
The pronounced seasonality of Atlantic Ferries' activity is clearly shown in the quarterly trend of ticket sales. Traffic is particularly heavy during the spring and summer months and is very much influenced by weather conditions especially at weekends, at which time the Peninsula is a popular destination for leisure activities.
In July 2009 operations will be expanded when two new catamarans enter service, which are already moored in the river Sado, each having a capacity of 350 passengers, thus completing the contractual obligations under the concessionary agreement for the public transport service. The operation's performance in the future is dependent on tourism occupancy and number of visitors in the spring and summer seasons, and on the start up of operations of complementary services at Troiaresort, namely the casino and congress centre.
Box Lines is the Sonae Capital business focused on sea transportation, including a cabotage service to and from the Portuguese mainland to the islands of the Azores and Madeira, coastal cabotage, ship chartering, as well as being a shipping agent and logistics operator specialised in groupage cargo. It also provides services in the area of international sea container transport management and general cargo ships.
The cabotage market, which makes up the bulk of Box Line's revenues, experienced a slight fall in volume and turnover in 2008. This trend was slightly better than the performance of the international shipping market in general, which due to the weakening of the world economy and the slowdown in consumption, especially in the second half of the year, led to excess capacity in the industry and aggressive price cuts.
The size of the Azores cabotage market is around 55‐60 thousand TEUS. In addition to Box Lines, two other operators run a service between the Portuguese mainland and the Azores. During 2008, the market experienced downward pressure on prices, due in particular to an increase in capacity at the end of 2007 (a competitor introduced a new ship with a container capacity of around 350 TEUS).
On this route, Box Lines operates two leased ships, under a bareboat charter, each with a container capacity of approximately 270 TEUS.
During 2008, Box Lines transported circa 18,000 TEUS on this route, with a capacity utilization of around 90%. Although there are no official statistics, Box Lines estimates its market share to be around 23%, on the mainland/islands routes.
The Madeira cabotage market is around 50‐55 thousand TEUS. Five companies (including Box Lines) operate in this market. Box Lines operates this route with one leased ship, also under a bareboat charter, with a container capacity of 270 TEUS. Despite the absence of official statistics, Box Lines believes that it is market leader with a market share of around 24%. During 2008, Box Lines transported circa 12,300 TEUS with a capacity utilization of 75%.
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | |||
|---|---|---|---|---|---|---|---|---|
| Turnover | 10,851.0 | 10,318.9 | +5.2% | 45,596.3 | 44,954.9 | +1.4% | ||
| Operational Cash‐Flow (EBITDA) |
(106.9) | (177.3) | +39.7% | 1,487.7 | 1,213.0 | +22.6% | ||
| Unit: 103 Contribution to consolidated figures Euro |
In 2008, Box Lines performed well despite adverse market conditions, with turnover and operational cash‐flow above last year levels.
Despite the fact that the cabotage market for container cargo remained flat, Box Lines performed very well with two digit growth in the groupage and air freight service lines which contributed towards growth in the top line.
Box Lines operational cash‐flow (EBITDA) of 1.5 million euro is equivalent to an EBITDA margin of 3.3%, an increase of 0.6 p.p. compared to last year. This improved performance was achieved despite adverse market conditions involving downward pressure on prices, fierce competition and other cost increases (especially fuel). The abrupt continued increases in fuel prices, experienced during 2008, penalized the EBITDA margin by nearly 0.7 p.p., which the company was successfully able to offset by lowering other operational expenses.
In spite of the slowdown in economic activity, in 2009 Box Lines intends to maintain current levels of activity and profitability.
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | ||
|---|---|---|---|---|---|---|---|
| Turnover | ‐ | ‐ | ‐ | 20,307.7 | ‐ | ‐ | |
| Operational Cash‐Flow (EBITDA) |
0.9 | ‐ | ‐ | (3,404.8) | ‐ | ‐ | |
| Unit: 103 Contribution to consolidated figures |
Euro |
As stated in the introductory note to chapter 5, the 2008 consolidated income statement includes the third quarter contribution of the Plysorol Group (Plywood unit) and the third and fourth quarter contributions of Elmo (sole shareholder of Plysorol).
Plysorol is currently under a restructuring process under the jurisdiction of the French courts and is expected to be sold or liquidated in a decision to be taken by the Commercial Court of Lisieux. It is management's intention to liquidate Elmo immediately after Plysorol is sold or liquidated. As such, this activity was considered as discontinued and will be terminated in 2009.
[Company accounted for using the Equity Method]
TP carries out its business activity in the area of energy production through cogeneration and wind power.
The cogeneration business is developed through partnerships with a range of industrial companies, in whose premises the power plants are located. In most cases, TP has a majority position in the partnership. Currently, TP manages an energy production capacity of around 62 MW, distributed among 13 projects (taking into account cogeneration facilities that reached the term of their useful life in 2007).
In the wind power business, the company has the following interests:
ENEOP is authorised, through a tender offer contract awarded by the Portuguese government, to inject 1,000 MW of energy into the Portuguese Electrical System and to install equipment, for the generation of electricity through wind power, with a maximum production capacity of 1,200 MW. Investment is scheduled to continue until 2012.
The investment schedule for ENEOP is progressing according to plan. The first wind farm (8 MW) is expected to be fully operational towards the end of the first quarter of 2009. Additional wind farm projects, involving around 150 MW, are under construction and are expected to become operational by the end of the year.
The consortium is currently negotiating the financing of the full project, which is expected to be finalised in the second half of the year. TP has already ensured the necessary financing (two commercial paper issues totalling 40 million euro) for its share in the ongoing investment until ENEOP obtains approval for the financing of the full project.
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | |
|---|---|---|---|---|---|---|
| Turnover | 10,599.8 | 8,752.5 | 21.1% | 35,053.8 | 33,303.5 | 5.3% |
| Operational Cash‐Flow (EBITDA) |
3,686.0 | 1,771.0 | >100% | 8,655.0 | 7,983.0 | 8.4% |
| Operating Profit (EBIT) | 1,782.2 | 898.8 | 98.3% | 4,824.0 | 4,960.3 | ‐2.7% |
| Net Profit | 981.9 | 515.0 | 90.7% | 2,862.2 | 3,063.5 | ‐6.6% |
Statutory Consolidated Accounts Unit: 103
Turnover for the year increased 5.3% driven by an increase in the average sales price of energy sold to the electricity grid, despite the decrease in the amount of energy sold due to the abovementioned decrease in the number of cogeneration plants. It should be noted that TP's profit and loss account only reflects cogeneration activity since the wind farm under operation is accounted for using the equity method (the wind farm in Serra do Sicó is not yet operational).
The increase in the average sales price was felt in the second half of the year and in particular in the last quarter of 2008, reflecting the 6 month lag of adjustment to fuel prices in the sales price of energy injected into the electrical system.
Operational cash‐flow (EBITDA) during the fourth quarter strongly benefited from the adjustments mentioned above which offset on one hand the negative trend of EBITDA up to the third quarter of 2008 and on the other the impairment loss of 1.3 million euro related to an amount owed by one of the host industrial companies which went bankrupt. Currently, TP is looking for an alternative host for the cogeneration equipment in question.
euro
In 2000, NORSCUT won the DFBOT shadow toll concession for the A24 Motorway for a 30 year period. The motorway connects the towns of Viseu and Chaves (all the way to the border with Spain), in northern Portugal, with a total extension of 156.4 km.
During the initial period of the concession, from 2001 until 2007, the multiple stretches of the motorway were constructed. This phase continued for two more years than initially expected due to the unilateral decision of the grantor (the Portuguese State) to change the original motorway layout, which also resulted in increased construction costs.
In September 2007, two months after completion of the motorway construction, the full extension of the motorway effectively entered service. From that moment on and until the end of the concession period, revenues of the concession will depend on actual vehicle traffic on the various stretches of the motorway under concession.
The year 2008 was marked by a significant event. At the end of July, and following the appointment of an arbitration court to analyse Norscut's compensation claim for increased construction costs and loss of revenues resulting from the abovementioned delayed works, Norscut and the Portuguese State signed an agreement to restore the financial balance of the concession in which Norscut's right to receive a total compensation amount of 291.9 million euro was recognised, of which 94.9 million euro related to lost revenue and as such was payable to Norscut while the remainder (197.0 million euro) concerning to increased construction costs was payable to the contractor.
As a result of this agreement, Norscut raised an 18 month loan at the beginning of August, equivalent to the amount of the compensation agreed (291.9 million euro) and guaranteed (principal and interest) by the Portuguese State. The goal is to reach an agreement with the Portuguese State before the maturity of this bridge loan, by extending the concession period or other alternative measure, and at the same time refinance the outstanding debt (initial and additional debt). In case such an agreement is not reached, the Portuguese State will fully repay the principal and interest of the bridge loan on maturity.
| 4Q 2008 | 4Q 2007 | ∆ | 2008 | 2007 | ∆ | |
|---|---|---|---|---|---|---|
| Turnover | 21,887.9 | 26,613.2 | ‐17.7% | 92,536.5 | 44,298.9 | >100% |
| Operational Cash‐Flow (EBITDA) |
38,063.3 | 24,979.0 | +52.4% | 105,983.3 | 33,019.5 | >100% |
| Depreciation | 23,978.5 | 12,918.5 | +85.6% | 60,152.9 | 17,254.5 | >100% |
| Net Financial Charges | 12,008.7 | 13,448.5 | ‐10.7% | 52,219.3 | 17,825.3 | >100% |
| Net Profit | 1,555.5 | (2,154.7) | ‐ | (4,774.6) | (1,483.8) | <‐100% |
| Statutory Accounts | Unit: 103 | euro |
Since 2008 was the first full year of operation of the entire stretch of motorway, some caution is required when comparing performance with the previous year. Vehicle traffic increased 9% over the previous year (considering full year opened stretches). Towards the second half of the year, and despite the ramp up stage of the motorway, traffic growth slowed as a result of the rise in fuel costs and the slowdown in economic activity.
Sonae Indústria is a global manufacturer of wood based panels and its shares are listed on Euronext Lisbon.
As at 31 December 2008, Sonae Capital's shareholding in Sonae Indústria, SGPS, SA was 10,984,164 shares, equal to 7.846% of the share capital and voting rights. During the year Sonae Capital acquired 1,462,349 Sonae Indústria shares with an average acquisition price of 2.36 euro per share.
Using the closing share price of Sonae Indústria as at 31 December 2008 (1.525 euro), the market value of this shareholding was 16.8 million euro.
For information on Sonae Capital's share price performance, please refer to paragraph III.4 of the Company's 2008 Corporate Governance Report.
A comprehensive policy regarding Sustainability is still under development in Sonae Capital.
Due to its significance within the context of Sonae Capital's Sustainability practices, this chapter will only include a description of Troiaresort's approach to this area, during the year 2008. This is by far the most visible and significant demonstration of the importance of sustainable development to Sonae Capital and its businesses.
Since the beginning of the project, Troiaresort has always considered environmental issues to be critically important concerns, pursuing environmental excellence as a source of competitive advantage, and capitalizing on the environmental heritage as a source of value creation.
The project has been characterized by a systematic assessment of the sustainability of solutions and by the implementation of an environmental management system that has progressively involved the project, construction and operational activities, which represented a pioneering approach in comparison to resorts with similar characteristics. The management system has been certified in accordance with NP EN ISO 14001 since 2005 and in 2008 was registered with the EU's Eco‐Management and Audit Scheme (EMAS), being the first resort in Portugal to obtain such a distinction. EMAS is an European Union voluntary scheme and a management tool available for companies who wish to evaluate and improve their environmental performance and inform their stakeholders on their environmental performance and goals.
Amongst measures implemented in 2008 in relation to the environmental management system, the main highlight was the environmental and urban restoration of degraded areas and the optimization of water consumption. Regarding water management, a new irrigation system was installed on the golf course, and water in an existing lake of the golf course was treated. Additionally, new water supply networks and residual water drainage networks were built, and are equipped with remote management devices. The upgraded waste water treatment station (ETAR), which is currently undergoing an Environmental Impact Assessment, will allow waste water to be re‐used for irrigation purposes.
Acknowledgement of the importance of biodiversity and ecosystems as distinctive features of tourism destinations, led to the signature of a memorandum of understanding between Sonae Turismo and Instituto de Conservação da Natureza e da Biodiversidade (Portuguese Biodiversity and Nature Conservation Institute), concerning Troiaresort's contribution to the European goal of halting the loss of biodiversity, by 2010, as part of the "Business & Biodiversity" initiative, promoted by the Portuguese European Union Presidency. This initiative seeks to promote, through voluntary long term agreements, the integration of biodiversity into company strategies and policies. This particular partnership will involve the promotion of a wideranging initiative aimed at easing global pressure on the bottlenose dolphin species which inhabits the river Sado, the study and promotion of conservation actions regarding salt marsh birds, the restoration of indigenous plants and the control of exotic and invading species, diversifying priority habitats, managing visitor flows and installing information panels regarding flora and fauna. As a result of this partnership, between 2007 and 2008, several acacia trees (an invading and exotic species) were cut down in a 250 hectare area, included in the Natura 2000 Network.
Troia Marina, which started operations in 2008, won the European Blue Flag award for recreational harbours and marinas, a benchmark in environmental quality for this type of infrastructure. Another highlight was the Accessible Beach award given to Tróia‐Mar beach, as a result of the implementation of a number of actions aimed at improving accessibility to the beach for disabled people.
With the objective of promoting ties between Troiaresort and the local community, several activities are being undertaken to increase knowledge of the unique heritage of the area, including biodiversity and culture. In 2008, more than 400 children from neighbouring towns, participated in environmental educational activities and in activities focused on Tróia's Roman ruins, which constitute a cultural heritage of unquestionable value.
The challenge of sustainable development accepted by Sonae Turismo, as a critical factor of success in the tourism industry, will be strengthened even more by the preparation of the first Troiaresort's sustainability report for the year 2008, which will be published in 2009. This report aims to communicate how Troiaresort manages sustainability issues, covering a range of areas such as the promotion of the natural and cultural heritage of the region, and relationships with the surrounding community and employees. For its preparation, various stakeholders were consulted, including employees, official entities, customers, local communities and NGOs.
Sonae Capital, SGPS, SA was incorporated on 14 December 2007 and, as the holding company of the Group, is focused on the management of its shareholding in its affiliated company SC, SGPS, SA (which holds 100% of the sub‐holdings Sonae Turismo, SGPS, SA and Spred, SGPS, SA), allocating funds according to the investment and treasury requirements of its affiliated company.
The net loss for 2008 was 848,271 euro (2,012 euro net loss). Operational costs include mainly salaries (1.2 million euro) and services acquired from third parties (0.6 million euro). The result of the financing activity was 0.6 million euro.
Non‐current loans include a Commercial Paper Programme issued on 14 March 2008, of up to 30,000,000 euro, with guaranteed subscription and five years maturity. As at 31 December 2008, balance was maintained at 30,000,000 euro.
Current loans include a Commercial Paper Programme issued on 28 March 2008, of up to 60,000,000 euro, without guaranteed subscription and ten years maturity, which can be extended at Sonae Capital's request. As at 31 December 2008, balance was maintained at 21,850,000 euro.
Since their appointment in April 2008, non‐executive Directors have been proactively scheduling and attending meetings with the Group's sub‐holdings Directors and with business managers, gathering knowledge and advising and challenging businesses, and capitalising on their professional and academic expertise. Apart from their duties as Board members, each non‐ executive Director is a member of one of the Company's Board Committees (Board Audit and Finance Committee and Board Nomination and Remuneration Committee). For details on the duties of Board members and of the Company's Board Committees please refer to chapter II of the Company's Corporate Governance Report.
Sonae Capital, SGPS, SA, as the holding company of the Group, recorded a net loss of 848,270.54 euro for the year 2008. The Board of Directors proposes to the Shareholders' General Meeting that this amount should be transferred to Retained Earnings.
The Board of Directors would like to thank all its stakeholders for their support and confidence, with special thanks to the Fiscal Board and the Statutory Auditor for their cooperation and work. Finally, we express our thanks and recognition to our employees for their efforts and dedication during the year.
Maia, 25 March 2009
The Board of Directors,
Belmiro Mendes de Azevedo
José Luís dos Santos Lima Amorim
Mário Pereira Pinto
Francisco de La Fuente Sánchez
Rafael Cerezo Laporta
Paulo José Jubilado Soares de Pinho
Pedro Manuel Bastos Mendes Rezende
Average Daily Revenue = Lodging Revenues / Number of rooms sold.
Bareboat regime = Renewable 3 years leasing contracts of ships without crew, with a call option at its term.
Capex = Investment in Fixed Assets.
DFBOT = Design, Finance, Build, Operate and Transfer.
GCA (Gross Construction Area) = Area measured by the exterior perimeter of the exterior walls.
Gearing = Net Debt / Equity.
Interest Cover Ratio = EBITDA / Financial Charges.
Net Debt = Non Current Loans + Current Loans – Cash and Cash Equivalents – Current Investments.
Operational Cash‐Flow (EBITDA) = Operating Profit (EBIT) + Amortisation and Depreciation + Provisions and Impairment Losses + Impairment Losses of Real Estate Assets in Stocks (included in Cost of Goods Sold) – Reversal of Impairment Losses and Provisions (included in Other Operating Income).
RevPar = Revenue per Available Room.
TEUS = Twenty Feet Equivalent Unit Container.
UNOP (Operational Planning Unit) = Planning and management operational units as set out by the Tróia Urbanisation Plan through Cabinet Resolution nr. 23/2000.
The signatories individually declare that, to their knowledge, the Report of the Board of Directors, the Consolidated and Individual Financial Statements and other accounting documents required by law or regulation were prepared in accordance with applicable International Financial Reporting Standards, and give a true and fair view, in all material respects, of the assets and liabilities, financial position and the consolidated and individual results of Sonae Capital, S.G.P.S., S.A., and of the companies included in the consolidation perimeter, where appropriate, and that the Report of the Board of Directors faithfully describes major events that occurred during the year 2008 and their impacts, if any, the business performance and position of Sonae Capital, S.G.P.S., S.A. and of the companies included in the consolidation perimeter, and contains an appropriate description of the major risks and uncertainties that they face.
Maia, 25 March 2009
Belmiro Mendes de Azevedo Rafael Cerezo Laporta
José Luís dos Santos Lima Amorim Paulo José Jubilado Soares de Pinho
Chairman of the Board of Directors Member of the Board of Directors
Member of the Board of Directors Member of the Board of Directors
Member of the Board of Directors Member of the Board of Directors
Mário Pereira Pinto Pedro Manuel Bastos Mendes Rezende
Francisco de La Fuente Sánchez Member of the Board of Directors
Sonae Capital, SGPS, SA Report and Accounts 43
31 December 2008
Appendix to the Report of the Board of Directors as of 31 December 2008 required by article 447 of the Portuguese Companies Act
| Balance as at | ||||||
|---|---|---|---|---|---|---|
| Purchases | Sales | 31.12.2008 | ||||
| Date | Quantity | Aver. Price € | Quantity | Aver. Price € | Quantity | |
| Belmiro Mendes de Azevedo | ||||||
| Efanor Investimentos, SGPS, SA (1) | 49,999,997 | |||||
| Sonae Capital, SGPS, SA | 838,862 | |||||
| Conversion of Demerger Rights (*) (a) | 28.01.2008 | 1,862 | ‐ | |||
| Purchase | 01.02.2008 | 160,000 | 1.84 | |||
| Purchase | 04.02.2008 | 150,000 | 1.83 | |||
| Purchase | 05.02.2008 | 350,000 | 1.78 | |||
| Purchase | 06.02.2008 | 177,000 | 1.76 | |||
| José Luís dos Santos Lima Amorim (b) | ||||||
| Sonae Capital, SGPS, SA | 8,125 | |||||
| Conversion of Demerger Rights (*) | 28.01.2008 | 8,125 | ‐ | |||
| Mário Pereira Pinto (c) | ||||||
| Sonae Capital, SGPS, SA | 8,125 | |||||
| Conversion of Demerger Rights (*) | 28.01.2008 | 8,125 | ‐ | |||
| Francisco de La Fuente Sánchez (d) | ||||||
| Sonae Capital, SGPS, SA | 2,500 | |||||
| Paulo José Jubilado Soares de Pinho | ||||||
| Sonae Capital, SGPS, SA (e) | 12,650 | |||||
| Purchase | 10.06.2008 | 3,000 | 1.35 | |||
| Purchase | 22.09.2008 | 2,000 | 0.83 | |||
| Purchase | 16.12.2008 | 3,000 | 0.50 | |||
| Purchases | Sales | Balance as at | ||||
|---|---|---|---|---|---|---|
| Date | Quantity | Aver. Price € | Quantity | Aver. Price € | 31.12.2008 Quantity |
|
| (1) Efanor Investimentos, SGPS, SA | ||||||
| Sonae Capital, SGPS, SA | 88,859,200 | |||||
| Purchase of Demerger Rights | 11.01.2008 | 13,029,263 | 0.17 | |||
| Purchase of Demerger Rights | 14.01.2008 | 11,000,000 | 0.20 | |||
| Purchase of Demerger Rights | 15.01.2008 | 26,613,385 | 0.21 | |||
| Conversion of Demerger Rights (*) | 28.01.2008 | 82,350,553 | ‐ | |||
| Conversion of Purchased Demerger Rights (*) | 28.01.2008 | 6,330,331 | ‐ | |||
| Purchase of shares | 07.03.2008 | 178,316 | 1.48 | |||
| Pareuro, BV (2) | 2,000,000 | |||||
| Share capital increase | 21.01.2008 | 1,980,000 | 151.51 | |||
| (2) Pareuro, BV Sonae Capital, SGPS, SA |
50,000,000 | |||||
| Conversion of Demerger Rights (*) | 28.01.2008 | 50,000,000 | ‐ |
(*) The shares representing the whole of the share capital of Sonae Capital, SGPS, SA were attributed to the shareholders of Sonae, SGPS, SA with the exercise of the respective demerger rights (which occured during the month of January of 2008) using the 0.125 attribution factor rounded down to the nearest whole number.
(a) The 1,862 shares are owned by the spouse.
(b) Through Change Partners, SCR, S.A., company of which he is a Member of the Board of Directors.
(c) Through Change Partners, SCR, S.A., company of which he is the Chairman of the Board of Directors.
(d) Through Banco Comercial Português, S.A. (Millennium BCP), company of which he is a Member of the Supervisory Board.
(e) At the appointment date as Member of the Board of Directors of Sonae Capital, SGPS, SA owned 4,650 shares.
Sonae Capital, SGPS, SA Report and Accounts 44
31 December 2008
Number of shares held by shareholders owning more than 10%, 33% or 50% of the company's share capital:
Number of shares as at 31.12.2008
Efanor Investimentos, SGPS, SA Sonae Capital, SGPS, SA 88,859,200 Pareuro, BV 2,000,000
Pareuro, BV Sonae Capital, SGPS, SA 50,000,000
As required by number 1 of article 8 of CMVM Regulation Nr. 05/2008, the following shareholders held more than 2% of the company's share capital, as at 31 December 2008:
| Shareholder | Nr. of Shares | % of Share Capital |
% of Voting Rights |
|
|---|---|---|---|---|
| Efanor Investimentos, SGPS, S.A. | ||||
| Directly Owned | 88,859,200 | 35.544% | 35.544% | |
| Through Pareuro, BV (controlled by Efanor) | 50,000,000 | 20.000% | 20.000% | |
| Through Belmiro Mendes de Azevedo (Chairman of the Board of Directors of Efanor) | 837,000 | 0.335% | 0.335% | |
| Through Maria Margarida Carvalhais Teixeira de Azevedo (Member of the Board of Directors of | 1,862 | 0.001% | 0.001% | |
| Efanor) Through Linhacom, SGPS, S.A. (controlled by the Member of the Board of Directors of Efanor Maria Cláudia Teixeira de Azevedo) |
43,912 | 0.018% | 0.018% | |
| Through Migracom, SGPS, S.A. (controled by the Member of the Board of Directors of Efanor Duarte Paulo Teixeira de Azevedo) |
161,250 | 0.065% | 0.065% | |
| Through descendents of Duarte Paulo Teixeira de Azevedo (Member of the Board of Directors of Efanor) |
411 | 0.000% | 0.000% | |
| Through descendents of Nuno Miguel Teixeira de Azevedo (Member of the Board of Directors of Efanor) |
1,312 | 0.001% | 0.001% | |
| Total attributable | 139,904,947 | 55.962% | 55.962% | |
| Banco BPI, S.A. Directly Owned Through Banco Português de Investimento, S.A. (controlled by Banco BPI) Through Fundos de Pensões do Banco BPI (controlled by Banco BPI) Through BPI Vida ‐ Companhia de Seguros de Vida, S.A. (controlled by Banco BPI) Total attributable |
16,888,797 53,409 5,008,922 638,576 22,589,704 |
6.756% 0.021% 2.004% 0.255% 9.036% |
6.756% 0.021% 2.004% 0.255% 9.036% |
|
| Mohnish Pabrai | ||||
| Through Pabrai Investment Fund II, L.P. (controlled by Mohnish Pabrai) | 3,957,000 | 1.583% | 1.583% | |
| Through Pabrai Investment Fund 3, L.P. (controlled by Mohnish Pabrai) | 5,624,000 | 2.250% | 2.250% | |
| Through Pabrai Investment Fund IV, L.P. (controlled by Mohnish Pabrai) | 7,422,315 | 2.969% | 2.969% | |
| Through Dalal Street, L.L.C. (controlled by Mohnish Pabrai) | 28,000 | 0.011% | 0.011% | |
| Through Dakshana Foundation (controlled by Mohnish Pabrai) | 132,625 | 0.053% | 0.053% | |
| Through Harina Kapoor (spouse of Mohnish Pabrai) | 2,500 | 0.001% | 0.001% | |
| Total attributable | 17,166,440 | 6.867% | 6.867% |
As required by article 14 of CMVM Regulation Nr. 5/2008, transactions of Sonae Capital's securities made by persons with managerial responsibilities and their related persons during the 2nd Half of 2008, were as follows:
| Name | Date | Nr. of Shares | Purchase / Sale |
Price | Type of Transaction |
Stock (Nr. of Shares) | |
|---|---|---|---|---|---|---|---|
| Paulo José Jubilado Soares de Pinho (Non‐Executive Member of the Board of Directors of Sonae Capital, SGPS, SA) |
22.09.2008 16.12.2008 |
2,000 3,000 |
Purchase Purchase |
0.83 0.50 |
Stock Exchange Stock Exchange |
Initial Balance Final Balance |
7,650 2,000 3,000 12,650 |
| Nuno Miguel Teixeira de Azevedo (Member of the Board of Directors of Efanor Investimentos, SGPS, SA) |
25.10.2008 | 478 | Sale | 0.57 | Bolsa | Initial Balance Final Balance |
1,790 478 1,312 |
(Translation from the Portuguese Original)
The corporate governance policy of Sonae Capital SGPS S.A. (hereinafter Sonae Capital or Company) aims, among other objectives, to implement transparency procedures in its relationship with both investors and markets. The corporate governance structure of Sonae Capital is built upon the maximization of shareholders' interests and the satisfaction of their legal and regulatory rights.
Sonae Capital, as a public listed company, is regulated by Regulation 1/2007 of the Portuguese Securities Market Commission (Comissão de Mercado de Valores Mobiliários and hereinafter CMVM), with the amendments set forth by CMVM Regulation 5/2008.
Furthermore, Sonae Capital guides its corporate governance practices by the Corporate Governance Code, available at www.cmvm.pt.
| Recommendation | Compliance | Reference in this report |
|
|---|---|---|---|
| General Meeting | |||
| I.1.1 | The Chair of the General Meeting Board shall be equipped with | Yes | I.1 |
| the necessary and adequate human resources and logistic | |||
| support, taking the financial position of the company into | |||
| consideration | |||
| I.1.2 | The remuneration of the Chair of the General Meeting Board | No | 0.3 (1) |
| shall be disclosed in the annual report on corporate governance | I.1 | ||
| I.2.1 | The obligation to deposit or block shares before the General | Yes | I.2 |
| Meeting, contained in the articles of association, shall not | |||
| exceed 5 working days | |||
| I.2.2 | Should the General Meeting be suspended, the company shall | Yes | I.2 |
| not compel share blocking during the suspension period and | |||
| shall then follow the standard requirement of the first session | |||
| I.3.1 | Companies may not impose any statutory restriction on postal | No | 0.3 (2) |
| voting | I.3 | ||
| I.3.2 | The statutory deadline for receiving early voting ballots by mail | Yes | I.3 |
| shall not exceed 3 working days | |||
| I.3.3 | The company's articles of association shall provide for the one | Yes | I.3 |
| share‐one vote principle | |||
| Recommendation | Compliance | Reference | |
|---|---|---|---|
| in this report |
|||
| I.4.1 | Companies shall not set a constitutive or deliberating quorum | No | 0.3 (3) |
| that outnumbers that which is prescribed by Law | I.4 | ||
| I.5.1 | The minutes of the General Meetings shall be made available to | Yes | I.5 |
| shareholders on the company's website within a 5 day period, | |||
| irrespective of the fact that such information may not be legally | |||
| classified as material information. The list of attendees, agenda | |||
| items of the minutes and resolutions passed during such | |||
| meetings shall be kept on file on the company's website for a 3 year period |
|||
| I.6.1 | Measures aimed at preventing successful takeover bids, shall | Yes | I.6 |
| respect both the company's and the shareholders' interests | |||
| I.6.2 | In observance of the principle of the previous sub‐paragraph, | Not | (*) |
| the company's articles of association that restrict/limit the | Applicable | ||
| number of votes that may be held or exercised by a sole | |||
| shareholder, either individually or together with other |
|||
| shareholders, shall also envisage a resolution by the General | |||
| Meeting, (5 year intervals, at least) on whether that statutory provision is to continue – without super quorum requirements |
|||
| as to the one legally in force – and that in said resolution, all | |||
| votes issued be counted, without applying said restriction | |||
| I.6.3 | In cases such as change of control or changes to the | Not | (*) |
| composition of the Board of Directors, defensive measures | Applicable | ||
| 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 Board of Directors by the shareholders | |||
| Management and Supervisory Boards | |||
| II.1.1.1 | The Board of Directors shall assess the adopted model in its | Yes | II.0 |
| governance report and identity possible constrains to its | |||
| functioning and shall propose measures that it deems fit for overcoming such obstacles |
|||
| II.1.1.2 | Companies shall set up internal control systems in order to | Yes | II.8 |
| efficiently detect any risk to the company's activity by | |||
| protecting its assets and keeping its corporate governance | |||
| transparent | |||
| II.1.1.3 | The Management and Supervisory Boards shall establish | Yes | II.2 |
| internal regulations and shall have these disclosed on its | II.5 | ||
| website | |||
| II.1.2.1 | The Board of Directors shall include a number of non executive | Yes | II.2 |
| members that ensure the efficient supervision, auditing and | |||
| II.1.2.2 | assessment of the executive members' activity Non executive members must include an adequate number of |
Yes | II.2 |
| independent members. The size of the company and its |
|||
| shareholder structure must be taken into account when | |||
| deciding on this number and may never be less than a quarter | |||
| of the total number of Directors | |||
| II.1.3.1 | Depending on the applicable model, the Chair of the Fiscal | Yes | II.5 |
| Board, the Audit Committee or the Financial Matters |
|||
| Committees shall be independent and be capable of adequately | |||
| carrying out its duties |
| Recommendation | Compliance | Reference in this report |
|
|---|---|---|---|
| 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 the reports; ii) how the report is to be handled, including confidential treatment, should it be required by the author |
No | 0.3 (4) II.9 |
| II.1.4.2 | The general guidelines on this policy should be disclosed in the corporate governance report |
Yes | II.9 |
| II.1.5.1 | The remuneration of the members of the Board of Directors shall be aligned with the interests of the shareholders. 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 variable remuneration shall be consistent with the maximization of the long term performance of the company, and shall be dependent on sustainability of the levels of the adopted performance; iii) when the remuneration of non executive members of the Board of Directors is not legally imposed, a fixed amount should be set |
Yes | II.2 II.10 II.6 |
| II.1.5.2 | The Remuneration Committee and the Board of Directors shall submit a statement on the remuneration policy to be presented at the Annual Shareholders General Meeting concerning the Management and Supervisory bodies and other directors as provided for in Article 248/3/b of the Securities Code. The shareholders shall be informed on the proposed criteria and main factors to be used in the assessment of the performance for determining the variable remuneration (share bonuses; share options, annual bonuses or other awards) |
Yes | I.7 II.4 |
| II.1.5.3 | At least one of the Remuneration Committee's representatives shall be present at the Annual Shareholders' General Meeting |
Not Applicable |
(**) |
| II.1.5.4 | A proposal shall be submitted at the General Meeting on the approval of plans for the allotment of shares and/or share options or in addition variations in share prices, to members of the Management and Supervisory Boards and other Directors within the scope of Article 248/3/B of the Securities Code. The proposal shall mention all the necessary information for it to be correctly assessed. The proposal shall contain the regulation plan or in its absence, the plan's general conditions. The main characteristics of the retirement benefit plans for members of the Management and Supervisory Boards and other Directors within the context of Article 248/3/B of the Securities Code, shall also be approved at the General Meeting |
Yes | I.7 |
| II.1.5.5 | The remuneration of the members of the Management and Supervisory Boards shall be individually and annually disclosed and, information on fixed and variable remuneration must be separately disclosed as well as any other remuneration received from other companies within the group of companies or companies controlled by shareholders of qualifying holdings |
Yes | II.2 II.5 II.6 |
| Recommendation | Compliance | Reference in this report |
|
|---|---|---|---|
| II.2.1 | Within the limits established by Law for each Management and Supervisory structure, and unless the company is of a reduced size, the Board of Directors shall delegate the day‐to‐day running of the business and the delegated duties should be identified in the Annual Report on Corporate Governance |
Yes | II.3 |
| 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 taken that are considered to be strategic due to the amounts, risk and particular characteristics involved |
Yes | II.2 II.3 |
| 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 non executive members that can ensure that these may take decisions, in an independent and informed manner, and furthermore shall explain these mechanisms to the shareholders in the Corporate Governance report |
Yes | II.0 II.2 |
| II.2.4 | The annual management report shall include a description of the activity carried out by the non executive Board Members and shall mention any restraints encountered |
Yes | |
| II.2.5 | The management body should promote member replacement for financial matters at least after 2 mandates |
No | 0.3 (5) |
| II.3.1 | When Directors who carry out executive duties are requested by members of other statutory bodies to supply information, the former shall do so in a timely manner and the information supplied must be adequate for the request made |
Yes | II.3 |
| II.3.2 | The Chairman of the Executive Board of Directors 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 Supervisory Board or the Auditing Committee |
No | 0.3 (6) |
| 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.4.1 | Besides fulfilling its supervisory duties, the General and Supervisory Board shall advise, follow‐up and carry out, on an on‐going basis, the assessment of the management of the company by the Executive Board of Directors. Besides 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 taken that are considered to be strategic due to the amounts, risk and particular characteristics involved |
Not Applicable |
(*) |
| II.4.2 | The annual reports and financial information on the activity carried out by the General and Supervisory Committee, the Financial Matters Committee, the Audit Committee and the Fiscal Board shall be disclosed on the company's website together with the financial statements |
Yes | II.5 |
| Recommendation | Compliance | Reference in this report |
|
|---|---|---|---|
| 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 Fiscal Board shall include a description of the supervisory activity and shall mention any restraints that they may have come up against |
Yes | II.5 |
| II.4.4 | The Financial Matters Committee, the Audit Committee and the Fiscal Board (depending on the applicable model) shall represent the company for all purposes towards the external auditor, and shall propose the services supplier, the respective remuneration, ensure that adequate conditions for the supply of these services are in place within the company, as well as being the liaison officer between the company and the first recipient of the reports |
No | 0.3 (7) |
| II.4.5 | According to the applicable model, the Committees for Financial Matters, Audit Committee and the Fiscal Board, shall assess the external auditor on an annual basis and advise the General Meeting that he/she be discharged whenever justifiable grounds are present |
Yes | II.5 |
| II.5.1 | Unless the company is of a reduced size and depending on the adopted model, the Board of Directors and the General and Supervisory Committees, shall set up the necessary Committees in order to: i) ensure that a competent and independent assessment of the Executive Directors' performance is carried out, as well as its own overall performance and in addition, the performance of all existing Committees; ii) review 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 |
Yes | II.4 |
| II.5.2 | Members of the Remuneration Committee or similar committees, shall be independent from Members of the Board of Directors |
Yes | II.4 |
| II.5.3 | All the Committees shall draw up minutes of the meetings held | Yes | II.4 |
| Information and Auditing | |||
| III.1.2 | Companies shall maintain permanent contact with the market thus upholding the principle of equality for shareholders and ensure that investors are able to access information in a uniform fashion. To this end, the company shall have an Investor Relations team. |
Yes | III.8 |
| III.1.3 | The following information that is made available on the company's Internet website, shall be disclosed in the English language: a) The company, public company status, headquarters and other data provided for in Article 171 of the Commercial Companies Code; b) Articles of Association; c) Credentials of the members of the Board of Directors and of the member responsible for Capital Markets Relations; d) Investor Relations team – its functions and contacts; e) Financial statements; f) Half‐Yearly Calendar of Company Events; g) Proposals for discussion and voting during the General Meeting; h) Notices convening meetings. |
Yes | III.8 |
(*) The recommendations regarding practices, corporate structures, procedures or a corporate governance model not adopted by Sonae Capital shall be considered not applicable for this purpose. Under the terms and conditions of article 278 of the Portuguese Companies Code, Sonae Capital structured its corporate governance model with a Board of Directors, a Fiscal Board and a Statutory Auditor. The Recommendations considered not applicable shall not be considered in the evaluation of the level of compliance of the Corporate Governance Code by the Company.
(**) At the time of the 2008 Annual Shareholders General Meeting, the Remunerations Committee had not yet been formed. Thus, the recommendation shall be considered, in respect of the year 2008, as not applicable. Sonae Capital has the firm intention to comply with this recommendation in the current and upcoming years.
Sonae Capital is willing to comply with most of the recommendations set in the Corporate Governance Code in the upcoming years: due to its recent incorporation, certain procedures, practices and corporate structures are still under review and implementation. On the other hand, certain practices that are fully aligned with the recommendations of the Corporate Governance Code are classified as "non compliant" in this report, exclusively due to the fact that such compliance in 2008 was partial (either functional or chronologically).
(3) Article 25 of the Articles of Association of Sonae Capital establishes that shareholders representing more than 50% of the share capital of the Company as the constitutive quorum for the first instance of the General Meeting. The definition of a constitutive quorum for the first meeting of the General Meeting (where the Portuguese Company Law sets no constitutive quorum requirement) is based on the understanding that it is essential to assure, in any shareholders' decision, a material representation that can legitimate the resolution so obtained. Sonae Capital will continue to maintain this practice and requirement as it understands that it is the recommended way to maximize shareholders rights and to improve clarity in the decision making process of its Shareholders' General Meeting.
(4) Sonae Capital has not defined or disclosed its whistle blowing policy during 2008. Although the Fiscal Board is the governing body responsible for receiving and treating any communication or claim, only in early 2009 did the Company fully implemented all the necessary and sufficient procedures for the recommendation of the Corporate Governance Code to be complied with.
The Board of Directors believes that the following members remain independent (under the terms of number 5 of Article 414 of the Portuguese Company Law), as there have been no changes to the factors that justified such an assessment when they were appointed:
| Name | Governing Body |
|---|---|
| Francisco de La Fuente Sánchez | Board of Directors |
| Rafael Cerezo Laporta | Board of Directors |
| Paulo José Jubilado Soares de Pinho | Board of Directors |
| Pedro Manuel Bastos Mendes Rezende | Board of Directors |
The Fiscal Board believes that all of its members remain independent (under the terms of number 5 of Article 414 of the Portuguese Companies Code), as there have been no changes to the factors that justified such an assessment when they were appointed:
| Name | Governing Body |
|---|---|
| Armando Luís Vieira de Magalhães | Chairman of the Fiscal Board |
| Jorge Manuel Felizes Morgado | Fiscal Board |
| Carlos Manuel Pereira da Silva | Fiscal Board |
The Board Audit and Finance Committee of the Board of Directors believes that all of its members remain independent (under the terms of number 5 of Article 414 of the Portuguese Companies Code), as there have been no changes to the factors that justified such an assessment when they were appointed:
| Name | Governing Body |
|---|---|
| Francisco de La Fuente Sánchez | Chairman of the Board Audit and |
| Finance Committee | |
| Paulo José Jubilado Soares de Pinho | Board Audit and Finance Committee |
The Board Nomination and Remuneration Committee believes that all of its members remain independent (under the terms of number 5 of Article 414 of the Portuguese Companies Code), as there have been no changes to the factors that justified such an assessment when they were appointed:
| Name | Governing Body |
|---|---|
| Rafael Cerezo Laporta | Chairman of the Board Nomination |
| and Remuneration Committee | |
| Pedro Manuel Bastos Mendes Rezende | Board Nomination and Remuneration |
| Committee |
As at 31 December 2008, the Board of the Shareholders' General Meeting had the following members, mandated for the four year period 2007‐2010:
‐ António Agostinho Cardoso da Conceição Guedes (Chairman);
‐ Maria Daniela Farto Baptista Passos (Secretary).
In addition to the support provided by the Company's Secretary, during the preparatory stages of the Shareholders' General Meeting, its Board members are aided by the Legal corporate department, namely in relation to the preparation of several support and output documents and files.
Remuneration of the members of the Board of the General Shareholders' Meeting is made up of a fixed amount, based on the Company situation and market practices, and amounted to a total of 4,500 euro for the year.
According to the Company's Articles of Association only those shareholders with voting rights, who own shares or subscription rights, can attend the Shareholders' General Meeting, provided that they can prove to the Company, ownership of such shares or subscription rights under the terms of the law, up to five business days prior to the Shareholders' General Meeting. This proof of title must be issued by a financial institution where records of title are kept by the shareholders.
The proof of title can be made, within the period mentioned above, by letter, fax or e‐mail, and on the latter two the original document must be received in the Company's registered office until the business day prior to the Shareholders' General Meeting.
The Articles of Association of the Company do not provide for the eventuality of suspension and it has never happened in the past. However, the Company's Articles of Association do not impose the blocking of shares during the suspension period and thus, to be present at the continuation of the Shareholders' General Meeting, the shareholder has to comply with the five business days prior notice as required for the first meeting. Furthermore, the Chairman of the Board of the Shareholders' General Meeting considers that if the suspension period does not exceed five working days, the blocking of shares should be maintained until the meeting is resumed, as it is not possible to require that shareholders comply with a new five working day blocking period; if the suspension period exceeds five working days, only a five working day‐ period of share‐blocking will be required.
It is recommended that the presence at a Shareholders' General Meeting of shareholders holding non‐voting preference shares, and their presence in the discussion of the points on the agenda for the Shareholders' General Meeting will depend on the authorisation of the Shareholders' General Meeting. The Company has not issued non‐voting preference shares.
An individual shareholder may be represented at the Meeting by means of a letter addressed to the Chairman of the Board of the Shareholders' General Meeting, indicating the name and address of the representative nominated, as well as the date of the meeting. Corporate shareholders may be represented at the meeting by means of a letter addressed to the Chairman of the Board of the Shareholders' General Meeting, the authenticity of which will be considered by the Chairman of the Board of the Shareholders' General Meeting.
Under the terms of the Company's Articles of Association, to each share corresponds one vote.
The Articles of Association of the Company only allow votes in writing in respect of alterations to the Articles of Association and the election of members to the statutory bodies. Written voting papers shall only be considered valid if they are received at the Company's registered office at least three days before the date of the Shareholders' General Meeting, and must be sent by registered post with acknowledgement of receipt, and addressed to the Chairman of the Board of the Shareholders' General Meeting. This does not exempt from the need to comply with the procedures set out in the Articles of Association, in order to be registered as a valid shareholder for the Shareholders' General Meeting. Written voting papers must be signed by shareholders or by their legal representatives. Individual shareholders must attach a certified copy of their identity card and, for corporate shareholders, the signature must be authenticated confirming that the signatory is duly authorised and mandated for the purpose.
In addition to the above mentioned, to be considered valid, written voting papers also have to set out clearly, in an unambiguous manner: (i) the agenda item or items to which they refer; (ii) the specific proposal to which they relate, indicating the respective proposer or proposers, and; (iii) the precise and unconditional voting intention on each proposal. Notwithstanding the content of (ii), a shareholder is permitted to include in a written voting paper, in relation to an identified proposal, the intention to vote against all alternative proposals, in relation to the same item on the agenda, without further specification. It is assumed that shareholders have abstained from any proposals that are not specifically included in their written voting papers. Written voting papers shall be deemed as votes against any proposals presented after the issuance of such written voting papers. The Chairman of the Board of the Shareholders' General Meeting, or his or her substitute, is responsible for verifying that written voting papers comply with all the above requirements and, those not accepted, are treated as null and void.
The Company makes available to shareholders minutes of written voting papers and representation letters on the Company's website (www.sonaecapital.pt), publicized via notice of Shareholders' General Meeting.
Electronic voting is not foreseen under the Company's Articles of Association.
The Shareholders' General Meeting shall meet ordinarily, within the timing established by law for the Shareholders' Annual General Meeting, or extraordinarily, whenever the Board of Directors or the Fiscal Board or shareholders representing more than the minimum voting share capital required for this purpose by law (5%), request it.
The Shareholders General Meeting can meet, at the first instance, as long as shareholders representing over fifty percent of the share capital are present or represented.
Under the terms of the Company's Articles of Association, resolutions at the Shareholders' General Meeting shall be taken by simple majority, unless otherwise determined by law.
The notice of the Shareholders' General Meeting and the proposals and respective appendices required by law, addressed to the Board of the Shareholders' General Meeting, are made publicly available to all shareholders, for consultation, at the registered office during office hours, on the Company's website (www.sonaecapital.pt) and on the Information Disclosure System of the Portuguese Securities Market Commission (www.cmvm.pt), at least fifteen days prior to the Shareholders' General Meeting.
The Company will keep a record, on its website (www.sonaecapital.pt), of the attendance lists, agenda and decisions of the Shareholders' General Meetings of the previous three years. For the time being, the abovementioned information is only available for the Shareholders' General Meeting that took place in 2008, the first since the Company's incorporation in December 2007.
Besides access to information on the above mentioned disclosure systems, shareholders can request specific information or explanations on any matter related to the Shareholders' General Meeting through the Investor Relations Office.
The Company has not taken measures of any kind that would hinder the success of a public tender offer for the purchase of its shares, nor has the Board of Directors knowledge of any special rights or shareholders agreements in which the Company or its shareholders are involved.
The Company's Articles of Association do not foresee any defensive practices that automatically and significantly erode the Company's assets in the event of a change in control or change in the composition of the management body.
Additionally, there are no agreements between the Company and its board members or other senior managers that foresee indemnities or penalty payments in any case of termination of the existing work relationship resulting from the change in control of the Company.
The remuneration of the members of the statutory bodies of the Company is fixed by the Shareholders' General Meeting, which has appointed a Shareholders' Remuneration Committee to set and propose the compensation and performance assessment policies and respective guidelines.
The Shareholders' Remuneration Committee has two members, Belmiro Mendes de Azevedo (Chairman) and Bruno Walter Lehmann. Belmiro Mendes de Azevedo is also Chairman and CEO of Sonae Capital.
Sonae Capital was incorporated in December 2007.
During 2008, significant changes were made to the corporate governance structure of Sonae Capital to respond to the strategic and management needs of the Company's business portfolio. The new governance structure proposed by the Board of Directors and approved at the Shareholders' General Meeting of 9 April 2008 envisaged strengthening the strategy formulation of the Company and the independent appraisal of the execution of strategy by Executive Directors.
With the implementation of the current governance structure, there was a clear intent of complying with best practices in terms of Corporate Governance.
At the date of its incorporation, Sonae Capital adopted a model based on a Board of Directors, a Fiscal Board and a Statutory Auditor. The Board of Directors has the responsibility of management while the remaining two bodies have supervisory responsibility.
The significant changes introduced just months after its incorporation strengthened and enlarged the supervision of the Company mainly through the creation of an Executive Committee to which the day‐to‐day management was delegated and the creation of two boards, made up only of independent non executive directors, with the responsibility of supervising and appraising the Company's and management's activities and performance. Details of the new structure, its different bodies, roles and responsibilities are presented in the following sections.
For the time being and since only a few months have elapsed since the new governance structure has been set up, the Board of Directors believes the current model is adequate for the size of Sonae Capital and for the challenges it faces. With time, the Board of Directors, whenever deemed necessary, will adopt procedures and policies to fine tune the governance structure and eventually propose changes to it.
Under the current governance structure, the Board of Directors is responsible for the business portfolio strategy decisions and respective implementation. The Board of Directors delegates to the Executive Committee the management of day‐to‐day operations, with the exception of matters highlighted in section II.3 of the current report. The members of the Company's Executive Committee are also members of the Board of Directors of Sonae Turismo and Spred, which also include experienced managers, thus aligning the strategy of the Company with that of each of its business segments. In addition to the Executive Committee, the Board has also appointed specialised advisory committees, namely the Board Audit and Finance Committee and the Board Nomination and Remuneration Committee, aimed at strengthening the decision making process at Board level.
The audit of the Company is ensured by the Fiscal Board and by the Statutory Auditor, both elected at the Shareholders' General Meeting. For more information on these statutory bodies, please refer to sections II.4 and II.6, respectively.
The Corporate Centre comprises six functional departments, which provide support and advice to the governing bodies and business segments and, in some cases ensure co‐ordination of policies and procedures within the Company.
Functional departments are the following:
| Functional department | Reports to |
|---|---|
| Human Resources | Executive Committee |
| Risk Management and Environment | Executive Committee |
| Portfolio Management | Executive Committee |
| Administrative Services | Chief Financial Officer |
| Finance & Treasury | Chief Financial Officer |
| Reporting & Investor Relations | Chief Financial Officer |
The Human Resources department is responsible for defining and implementing the Group's human resources policy and for managing senior managers' careers.
The Risk Management and Environment department main responsibilities include definition and execution of internal audits and risk management activities in Group companies, as well as promotion and implementation of environment and sustainability best practices.
The Portfolio Management competencies comprise the following: portfolio configuration and capital allocation between existing businesses and new business opportunities, mergers and acquisitions, legal support and corporate internal and external communication.
Administrative Services comprise a set of different service lines, namely consolidation, shared service centre, information systems and tax support. The shared service centre provides accounting, administrative, treasury and payroll services to Group companies.
The Finance and Treasury department has a leading role regarding internal and external financing operations, treasury management and liaison with financial institutions. This department is also responsible for financial risk management at Group level and for the preparation and follow‐up of the Group's financial plan.
The Reporting and Investor Relations department plays a role in: corporate planning and reporting activities, consolidated reporting both internally and externally; compilation and analysis of operational business indicators in management reports, and; ensuring a permanent contact with institutional investors, shareholders and analysts via the Investor Relations Office.
The Chief Financial Officer is responsible for the operational co‐ordination of all functional departments within the Corporate Centre, meeting regularly with their respective managers.
Under the Company's Articles of Association, the Board of Directors can be made up of an odd or even number of members, with a minimum of three members and a maximum of eleven members, elected at the Shareholders' General Meeting.
The election of one member of the Board of Directors takes place independently from the remaining elections, under the terms of the law, among persons listed in proposals subscribed by groups of shareholders, provided that such groups of shareholders hold shares that represent more than ten and less than twenty percent of the share capital. The same shareholder cannot subscribe to more than one proposal, and each proposal must contain the identification of at least two persons eligible for each of the positions to be filled. If proposals are presented by more than one group of shareholders, voting will be based on all of these proposals.
The Board of Directors appoints a substitute in case of death, resignation or temporary or permanent incapacity or unavailability of any member. If a Director fails to be present at any two meetings without providing a justification for such absence which is accepted by the Board of Directors, such a Director will be deemed permanently unavailable. A substitute is elected to the Board of Directors in the case of permanent unavailability of the member of the Board elected under the provisions set in the previous paragraph.
Following the resolution approved on the Shareholders' General Meeting held on 9 April 2008, the Board of Directors is currently made up of three executive members and four non executive independent Directors, mandated until 2010:
| Name | Position | First appointment on |
|---|---|---|
| Belmiro Mendes de Azevedo | Chairman and CEO | December 2007 |
| José Luís dos Santos Lima Amorim | Executive | December 2007 |
| Mário Pereira Pinto | Executive | December 2007 |
| Francisco de La Fuente Sánchez | Non executive | April 2008 |
| Rafael Cerezo Laporta | Non executive | April 2008 |
| Paulo José Jubilado Soares de Pinho | Non executive | April 2008 |
| Pedro Manuel Bastos Mendes Rezende | Non executive | April 2008 |
Non executive members were appointed based on their prestige in business, finance, academia and consultancy areas, to strengthen the skills of the Board of Directors, namely in relation to the approval of the portfolio configuration strategy and of the annual business plan and any significant changes to it.
All of the non executive members of the Board of Directors are considered independent under the terms of number 5 article 414 of the Portuguese Company Law, and comply with incompatibility rules under the terms of number 1 (except paragraph b, which is not applicable to members of the Board) of Article 414 of the Portuguese Company Law.
Independent non executive Directors have to disclose immediately to the Company any event that, in the course of their mandate, might lead to incompatibilities or loss of independence under the terms of the legal requirements.
The current composition of the Board of Directors, especially the number of non executive and independent members (4 from a total of 7 members) ensure the necessary supervision of the activities performed by executive Directors.
Under the Company's Articles of Association and the Board of Directors' Terms of Reference, there are no restrictions as to the maximum number of positions that Board members can hold simultaneously.
The Board of Directors is responsible for the management of the business and for carrying out all operations related to fulfilling the Company's objectives, and for that purpose, the Board is given the widest powers, including:
Under the terms of the Company's Articles of Association, the Board of Directors may also deliberate on share capital increases, through new entries in cash, up to one thousand million euro, in one or more stages. The Board of Directors determines, in accordance with the law, the conditions of subscription and the categories of shares to be issued, based on the existing ones at the time.
No specific responsibilities are assigned to each member of the Board, within the Company's business segments.
The Company's Articles of Association establish that the Board of Directors appoints, if it so decides, one or more Managing Directors or an Executive Committee from amongst its members, to which it shall delegate the powers to manage the businesses that the Board may determine. The Board of Directors appointed an Executive Committee in 2008. Information on the Executive Committee can be found in section II.3 of this report.
The Board of Directors may also create specialised committees to ensure the effectiveness of the Non executive Directors and of the main Board Meetings. Those currently created are the Board Audit and Finance Committee and the Board Nomination and Remuneration Committee. Please refer to section II.4 for information on these committees.
According to the Company's Articles of Association, the Board of Directors meets at least once every quarter and, in addition, whenever the Chairman or two Board Directors convene a meeting. During 2008, the Board of Directors held nine meetings, with a 98% attendance rate.
The Board of Directors may only deliberate if a majority of their members is present or represented, and decisions will be taken by a majority of votes cast by members present, represented or voting in writing.
The functioning and other logistic issues are dealt with by the Board's Secretary, which also ensures that records of decisions taken are kept in minutes of meetings and provides Board members with support information for the proposed agenda at least five days in advance and always leaving a weekend between distribution and the respective meeting.
The Board of Directors approved and enacted its Terms of Reference, which are available for consultation on the Company's website (www.sonaecapital.pt).
In ascertaining the incompatibility rules applicable to the members of the Board of Directors, the Company relies solely on criteria established in paragraph 1 of Article 414‐A of the Portuguese Company Law, and has not defined, internally, any other assessment criteria.
During 2008, members of the Board of Directors of Sonae Capital, SGPS, SA were paid the following remuneration and other compensation, exclusively at Sonae Capital, SGPS, SA level (Directors are not paid in any other Group company):
| Values in Euro | ||||
|---|---|---|---|---|
| Fixed Remuneration |
Performance Bonus Paid |
Deferred Performance Bonus Paid |
Total | |
| Chairman and CEO1 | 256,195 | 82,067 | ‐ | 338,262 |
| Other Executive Directors | 286,420 | 35,417 | 56,197 | 378,034 |
| Sub‐total Executive Directors |
542,615 | 117,484 | 56,197 | 716,296 |
| Non executive Directors2 | 82,000 | ‐ | ‐ | 82,000 |
| Total | 624,615 | 117,484 | 56,197 | 798,296 |
1 Previous years deferred performance bonuses were attributed to the Chairman and CEO by Sonae, SGPS, SA. These bonuses were paid in cash at year end 2007 by Sonae, SGPS, SA and the net proceeds were used to buy shares in Sonae Capital, SGPS, SA, thus exposing the Chairman and CEO to fluctuations in the value of the Company to best align his interest with the interests of the Company and of its shareholders.
2 Part of this remuneration (40,000 euro) was only paid in March 2009, since it is linked to objectives of involvement in challenging strategic guidelines of particular businesses, which was only assessed after the year end by the Remuneration Committee.
During 2008, no compensation to former executive Directors was paid in relation to early contract termination nor was any compensation paid to the Company's Directors, on any basis, by other group companies. The Company has no supplementary pension retirement scheme set up for its Directors.
Executive Directors are included in the deferred performance bonuses plans based on shares, which are described in section III.6 of this report.
The Company has not defined any rules regarding payments should the duties cease during the respective mandate. In 2008, no such instances occurred and as a result no such payments were made. Any compensation occurring in the future will be that which results from applicable law.
Information on other offices held by the Company's Directors, qualifications and experience can be found in the curricula vitae included as an appendix to this report.
The Board of Directors delegates to the Executive Committee the powers to manage the day‐ to‐day operations of the Company and, regulates how the Executive Committee operates and how the delegated powers can be exercised. The Board of Directors does not delegate the following powers:
The existing Executive Committee was appointed on 9 April 2008, and its office ceases with the Board's term of office (2010), and has the following members:
| Name | Position |
|---|---|
| Belmiro Mendes de Azevedo | Chief Executive Officer |
| José Luís dos Santos Lima Amorim | Chief Financial Officer |
| Mário Pereira Pinto | Director |
The Company's Executive Committee meets once a month and whenever the Chief Executive Officer or the majority of its members convenes it, in writing, at least 3 days before the meeting is held. There were ten meetings during the year of 2008 with all of its members present in all meetings.
The Executive Committee may only deliberate if a majority of its members is present or represented, and decisions are taken by a majority of votes cast by members present, represented or voting in writing.
The Executive Committee meetings may also be attended by members of the Corporate team, at a Director's request, for assistance and advice on specific and revised issues.
The functioning of the Committee and other logistic issues are ensured by the Executive Committee's Secretary (who is also the Board of Directors' Secretary), who also ensures records of decisions taken are kept in minutes of the meetings and provides Committee members with support information for the proposed agenda at least five days in advance and always leaving a weekend between distribution and the respective meeting. The existence of a common Secretary to both governing bodies, ensuring information flows between them, contributes to the timely supply of information and reduces misinterpretation of information requests, thus leading to more efficiency and effectiveness in the process.
On a meeting held on 9 April 2008, the Board of Directors decided to appoint a Board Audit and Finance Committee (BAFC) and a Board Nomination and Remuneration Committee (BNRC), and their office ceases with the Board's term of office.
The BAFC is currently composed of two non executive independent Directors, Francisco de La Fuente Sánchez (Chairman) and Paulo José Jubilado Soares de Pinho.
The BAFC reviews Company's reports, financial information and financial statements, before they are approved by the Board, advises the Board on reports to shareholders and financial markets, on the adequacy and appropriateness of internal information provided by the Executive Committee, including internal business controls, and on compliance with best practices in corporate governance, and evaluates risk associated with the Company's activities on behalf of the Board. The BAFC meets directly with the Statutory External Auditors and the internal audit team.
The BAFC shall meet at least four times a year before the disclosure of the annual and interim results, and whenever it is convened by its Chairman, or the Board's Chairman or the Chief Executive Officer. During 2008, the BAFC held three meetings, with full attendance from its members.
The Secretary of the BAFC circulates agendas and support documents required to the members of the BAFC at least five days in advance and always leaving a weekend between distribution and the respective meeting, also ensuring records of decisions taken are kept in minutes of the meetings.
The Board Nomination and Remuneration Committee (BNRC) is composed of two non executive independent Directors, Rafael Cerezo Laporta (Chairman) and Pedro Manuel Bastos Mendes Rezende.
The BNRC reports and proposes to the Board of Directors on nomination processes and remuneration systems of executive and non executive Directors. To that end, it may take advice from external experts. This Committee also liaises with the Shareholders' Remuneration Committee, mentioned in section I.7 of this report.
The BNRC meets at least once a year, before the annual meeting of the Shareholders' Remuneration Committee. Due to the date of its appointment, no meeting was held during the year of 2008.
Specialised committees may only deliberate if a majority of their members is present or represented, and decisions will be taken by a majority of votes cast by members present, represented or voting in writing. The deliberations of the specialised committees are taken in an advisory role in support of decisions by the Board of Directors.
According to the Company's Articles of Association, the Fiscal Board shall be made of an odd or even number of members, with a minimum number of three members and a maximum number of five members, being the number of members decided by the Shareholders' General Meeting of the Company. One or two substitutes shall be appointed if the Fiscal Board is made up of three or more members, respectively.
The Fiscal Board appoints its Chairman if the Shareholders' General Meeting has not made such an appointment. If the Chairman ceases his/her functions before the end of his/her mandate, the remaining members shall choose amongst themselves who will perform those duties until the end of the mandate. Substitute member(s) shall replace effective member(s) who are unable or have ceased to exercise their functions, and shall remain member(s) until the next Shareholders' General Meeting which will appoint new members to fill any vacancy(ies). If there are no substitute members available, the Shareholders' General Meeting shall appoint new members.
As at 31 December 2008, the Fiscal Board had the following members, mandated for the four year period 2007‐2010:
| Name | Position |
|---|---|
| Armando Luís Vieira de Magalhães | Chairman |
| Jorge Manuel Felizes Morgado | Member |
| Carlos Manuel Pereira da Silva | Member |
On 17 September 2008, João Manuel Gonçalves Bastos resigned as Chairman of the Fiscal Board, and this vacancy was filled by Carlos Manuel Pereira da Silva, the substitute member of the Fiscal Board at the time. Under the terms of the law and of the Fiscal Board's Terms of Reference, Armando Luís Vieira de Magalhães was elected Chairman of the Fiscal Board at a meeting held on 11 November 2008.
The members of the Fiscal Board are considered independent under the terms of number five article 414 of the Portuguese Company Law.
Under the Company's Articles of Association and the Fiscal Board's Terms of Reference, there are no restrictions as to the maximum number of positions that Fiscal Board members can hold simultaneously. The limitation foreseen in Portuguese Company Law that limits to five the number of positions that Fiscal Board members can hold simultaneously, are not applicable to law firms, statutory audit firms and individual statutory auditors. All the members of the Fiscal Board of the Company are individual statutory auditors.
The duties of the Fiscal Board are those determined by law, which include amongst others:
Overseeing the preparation and disclosure of financial information;
Convening the Shareholders' General Meeting, whenever the Chairman of the General Meeting fails to do so in circumstances deemed necessary;
The Fiscal Board establishes, in the first meeting of each year, a work plan and timetable for the year.
To carry out its duties, the Fiscal Board:
The Fiscal Board issues an annual report on the supervisory work performed, as well as an opinion on the report of the Board of Directors, consolidated and individual financial statements and proposals presented by the Board of Directors, in order to meet the legal deadlines for presentation of those documents to the annual Shareholders' General Meeting. The Fiscal Board's report on annual activity is included in the annual reports made available on the Company's website (www.sonaecapital.pt).
The Fiscal Board approved and minuted its Terms of Reference, which are available for consultation on the Company's website (www.sonaecapital.pt).
In ascertaining the incompatibility rules applicable to the members of the Fiscal Board, the Company relies solely on criteria established in number one Article 414‐A of the Portuguese Company Law, and has not defined, internally, any other assessment criteria.
During 2008, members of the Fiscal Board of Sonae Capital, SGPS, SA were paid the following fixed remuneration (no other remuneration was paid):
Information on other offices held by members of the Fiscal Board, qualifications and experience can be found in the curricula vitae included in an appendix to this report.
The Company's Statutory External Auditor for the period 2007 to 2010 is Deloitte & Associados, SROC, represented by António Marques Dias or by António Manuel Martins Amaral, elected by the Shareholders' General Meeting following the approval of a proposal made by the Fiscal Board.
During 2008, the total remuneration paid to Company's external auditors was 207,887 euro, corresponding to the following services:
| Values in Euro | ||||
|---|---|---|---|---|
| 2008 | % | 2007 | % | |
| Statutory Audit | 154,387 | 74.3 | 177,902 | 69.6 |
| Other Assurance | 8,500 | 4.1 | 50,000 | 19.6 |
| Tax Consultancy | 45,000 | 21.6 | 27,585 | 10.8 |
| Total | 207,887 | 100.0 | 255,487 | 100.0 |
In order to ensure the External Auditor independence, tax consultancy services and other services are provided by different teams from those involved in audit services.
The Board of Directors appointed Anabela Nogueira Matos and André Pinto Rocha as Company's Secretary and respective substitute, whose offices cease with the term of office of the members of the Board of Directors. The Company's Secretary's duties are those determined by law, among which are:
Certifying signatures made by members of the statutory bodies in Company's documents;
Certifying the total or partial content of the Company's Articles of Association, as well as the identity of the members of the various statutory bodies and respective competences;
One of the most important objectives of Sonae Capital is to ensure the implementation of internal control and risk management principles, which fit into the Group's activities. Market visibility, exposure and diversification of the businesses' risks and the increasing speed in information transmission, makes the adoption of these principles crucial to value creation and to compliance with ethical and social responsibility values. These objectives are pursued through coordinated plans and systems aimed at controlling uncertainties, preventing errors and irregularities from occurring, minimizing their consequences and maximizing the organisation's performance and the fairness of its information, and comprise the following activities:
Internal control policies and procedures are set at both corporate and business levels, pursuing:
Risk management, as a support to Sonae Capital's corporate culture, is inherent in all management processes and is a permanent concern of all managers and employees of the Group. Risk management aims to create value and is one of the components of companies' sustainable development through the identification, management and control of uncertainties and threats that may affect the different businesses, in order to ensure that they operate on a going concern basis of operations and benefit from business opportunities.
Internal audit, resulting from and supporting the Risk management process, means assisting in value creation, through a systematic and structured approach to the development and assessment of management effectiveness and control of risks associated with business processes and information systems.
The risk management and internal audit functions are centrally coordinated by a single functional responsible person, Sonae Capital's corporate centre, and its activities are reported, coordinated and followed up by the Board Audit and Finance Committee. Following the spin‐ off of Sonae Capital, the year of 2008 was crucial to the organisation of these functions and to the carrying out of resulting activities.
The risk management function promotes, coordinates, facilitates and supports the development of risk management processes. In 2008, the Company launched a process relying on an uniform and systematic methodology based on the international model of Enterprise Risk Management – Integrated Framework of COSO (The Committee of Sponsoring Organisations of the Treadway Commission), which comprises, amongst others, the following:
In view of the wide range of businesses and risks, this approach was firstly applied to the Fitness business, and will be followed by the implementation, in 2009, of the resulting plan of actions, with particular focus on Health & Safety, Cleanliness and Information Systems' risks. This approach is expected to be applied in 2009 to the entire Troiaresort project, including the implementation of a plan of actions, which will be followed by the implementation of this framework to all Sonae Turismo's affiliates.
Risk management activities were planned and carried out with respect to other critical areas:
At Sonae Capital, the integrity and reliability of financial information is achieved by the existence of a clear distinction between producers and users of such information and also by performing several validation procedures throughout the process of its production and disclosure.
At the business level (individual companies), accounting processes and financial statement preparation are assured by the administrative services of Sonae Capital. These statements are also reviewed by the Chief Financial Officer of each business area.
Sonae Capital's consolidated financial statements are prepared on a quarterly basis by the consolidation department, within the administrative services of the Company's corporate centre. This represents an additional validation level of the integrity and reliability of the financial information, namely by ensuring the uniform application of accounting principles and standards across the individual companies.
The Statutory Auditors perform an annual audit and half year limited review of individual and consolidated financial statements. In performing their examination, in accordance with the Auditing Standards issued by the Portuguese Institute of Statutory Auditors, they are required to obtain a reasonable assurance, in the annual audit, and a moderate assurance, in the half year limited review, that financial statements are free from material misstatement. Such examination includes verifying, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Significant estimates and judgements made by management in their preparation are also assessed. Verification is also made of whether the accounting policies are appropriate, are consistently applied and adequately disclosed.
The Reporting and Investor Relations department is responsible for preparing the Report of the Board of Directors. The Statutory Auditors also review the content of this report (annual and semi‐annual versions) and its conformity with supporting financial information.
In addition, in relation to the preparation of consolidated financial information and the Report of the Board of Directors, the whole process is overseen by the Fiscal Board and the Board Audit and Finance Committee. On a quarterly basis, these Bodies meet and review the consolidated financial statements and Report of the Board of Directors. Supporting information for the discussion of these issues is distributed in advance of the meetings. The Chief Financial Officer and supporting staff also attend these meetings, on request, to present the necessary clarifications.
The Statutory Auditors also present to the Fiscal Board and the Board Audit and Finance Committee, a summary of the main findings resulting from their examination of the companies' financial information.
Sonae Capital is exposed to a variety of financial risks namely interest rates, transaction and translation foreign currency exchange rates, liquidity, counterparty and credit risk, commodity and raw material prices, and debt and equity financial market fluctuations. Sonae Capital's financial risk management policy seeks to minimize potential adverse effects of the volatility of financial markets.
The current situation of financial markets places liquidity risk management at the forefront of companies' concerns. To that end, the comprehensive set of systems established at Sonae Capital ensures the compliance of payment obligations and the funding of its businesses and strategy.
The abovementioned systems comprise the centralisation (at holding level) of liquidity management, financial planning based on cash flow forecasts, treasury and cash management control instruments, diversification of sources and counterparts of funding, adjustment of debt maturity profiles to businesses cash flow generation and an adequate level of liquidity through contractual arrangements with relationship banks.
Sonae Capital's attitude towards financial market risk management is conservative and cautious, sometimes using derivative instruments to hedge certain exposures related to its operating businesses. The Company does not therefore enter into derivatives or other financial instruments that are unrelated to its operating businesses.
Management of financial risks is performed and monitored by the corporate finance function. The activity of the finance function is also reported, coordinated and followed up by the Board Audit and Finance Committee.
The Internal Audit function promoted activities according to an annual plan previously approved and based on a previous evaluation of business risks. This plan included work in business processes, compliance and information systems, namely in Sonae Turismo's businesses, including the following:
Troiaresort: Sales of real estate and investment; Hotel business: Purchases and Payments, fixed assets management and cash management; Fitness: Purchases and payments; Selfrio Group: Invoicing and collections.
Fitness: Monitoring the activity.
Fitness: Operational systems; Sonae Capital: Software licensing.
Sonae Capital encourages continued education and the adoption of best international methodologies and practices in Risk Management and Internal Audit. To that end, the Group supports attendance at training and update programmes, which include the international professional certification in Internal Audit promoted by the IIA – The Institute of Internal Auditors – the Certified Internal Auditor (CIA). Two of the three members of the Internal Audit team are Certified Internal Auditors.
The main features of the whistle blowing policy fully implemented in 2009, entail:
The procedures for communicating irregularities, namely the envisaged means to address the Chairman of the Fiscal Board, the procedures to ensure that communication reaches the recipient without being breached or read in advance and the need for the explicit and clear identification of the whistle blower (even if his/her identity is to be kept confidential and only known to the Chairman of the Fiscal Board);
To ensure a thorough, rigorous and impartial review process, means the access of the Fiscal Board to all the relevant documentation that can be provided by the Company to fully investigate the reported irregularities and the prevention from access to the review process of any individual that, even indirectly, may have a conflict of interest with the disclosure of the review process;
The Company's Policy and Procedures, whose main features are summarized above, are available for consultation on the Company's website (www.sonaecapital.pt).
The compensation policy of the members of the Statutory Governing Bodies of Sonae Capital, SGPS, SA was approved at the Shareholder's General Meeting held on 9 April 2008.
The proposed policy is based on the understanding that initiative, effort and commitment are essential foundations for delivering good performance. It also aims at aligning individual contributions with the Company's strategic objectives, focussing primarily on performance compensation.
Under these guidelines, fixed remuneration is primarily linked to personal skills and the responsibility level inherent to each function, while variable remuneration is linked to the level of success achieved by the Company as well as by the companies managed by each individual.
The Company's remuneration policy does not foresee any compensation for ending the mandate of any Board member before its completion. In these cases, compensations will be the ones resulting from applicable law.
The compensation policy approved by the Shareholders' General Meeting for the period from 2007 to 2010 follows these guiding principles:
a) the compensation policy for Executive Directors includes three components: (i) a Fixed Remuneration, established on an annual basis, (ii) a Short Term Variable Bonus, established on the first quarter of the following year to which it relates, and (iii) a Medium/Long Term Variable Bonus, with the aim of aligning Executive Directors interests with those of all shareholders, attributed annually, discretionary and with deferred payment;
b) Individual compensation considers that (i) the definition of each Executive Director's fixed remuneration is based on personal skills and the responsibility level inherent to each function. This remuneration will be based on the Company situation and market practices; (ii) the Short Term Variable Bonus is based on the achievement of predefined objectives, based on performance indicators of the business and of the teams under their responsibility, as well as to individual performance indicators; (iii) the Medium/Long Term Bonus is based on the responsibility inherent to each function and on individual skills, and on the achievement of predefined objectives, which are linked to performance indicators, and may be converted into Sonae Capital shares or its equivalent in cash on the date of payment, calculated using the share market price on the due date.
For additional information on the share based payments of Sonae Capital please refer to section III.6 of this report.
The remuneration of Non Executive Directors is made up of a fixed amount which is based on the Company situation and market practices.
The remuneration of members of the Fiscal Board is made up of a fixed amount which is based on the Company situation and market practices.
Remuneration of the members of the Board of the General Shareholders' Meeting is made up of a fixed amount, based on the Company situation and market practices.
For the consideration paid as remuneration to each of the statutory bodies, refer to the corresponding section in this report.
Sonae Capital was incorporated on 14 December 2007 with a fully subscribed and paid up share capital of 250,000,000 euro, made up of 250,000,000 ordinary shares, bearer and non‐ titled, each with a nominal value of 1 euro.
All shares of Sonae Capital were admitted to trading on Euronext Lisbon regulated market on 28 January 2008.
According to the Company's Articles of Association, shares can be titled or non‐titled shares, nominal or bearer, freely interchangeable, according to the terms of the law. Preferential shares without voting rights may be issued, which can be redeemable, at nominal value, with or without the addition of a premium, if the Shareholders' General Meeting so decides. If this is the case, the meeting shall determine the method of calculation of any redemption premium. The Company may issue autonomous warrants, under the terms of the law, and with conditions that are determined by resolution of the shareholders or of the Board of Directors, under the terms specified in the Articles of Association.
Sonae Capital's shareholders have, under the terms of the law, the right to share in profits, the right to attend the Shareholders' Annual General Meeting and exercise their right to vote, the right to a share of the net assets of the Company in case of liquidation, the right to convert shares, the right to information and preference rights in offers for subscribing shares of the same category.
As far as the Company is aware, there are no shareholders with special voting rights, nor are there limitations, restrictions or shareholders' agreements in place regarding the transfer, control or sale of shares or voting rights.
Resolutions at the Shareholders' General Meeting regarding changes to the Articles of Association can only be taken, at the first instance, as long as shareholders representing over fifty percent of the share capital are present or represented (the law establishes a threshold of one third of the share capital). The resolution must be approved by two thirds of the votes cast, whether the meeting is held at first or second instance. The Articles of Association of the Company only allow votes in writing in respect of alterations to the Articles of Association and the election of members to the statutory bodies.
Sonae Capital does not have an employee shareholder system in place, hence there are no control mechanisms for such systems in which the voting rights are not directly exercised by them.
As at 31 December 2008, the shareholders, that in accordance with article 20 of the Securities Code, held qualifying shareholdings representing at least 2% of the share capital of Sonae Capital, were the following:
| Shareholder | Nr. Shares Held | % Share Capital |
% Voting Rights |
|---|---|---|---|
| Efanor Investimentos, SGPS, SA | 139,904,947 | 55.962% | 55.962% |
| Banco BPI, S.A. | 22,589,704 | 9.036% | 9.036% |
| Mohnish Pabrai | 17,166,440 | 6.867% | 6.867% |
During the year, main changes to qualifying shareholdings were as follows:
• Efanor Investimentos, SGPS, SA informed about its qualifying shareholding of 138,890,609 shares (55.5562% of voting rights) on 1 February 2008. Since then it increased its position to 139,904,947 shares (55.962% of voting rights);
In accordance and for the purposes of article 447 of the Portuguese Company Law, the number of shares held by members of the Governing Bodies as at 31 December 2008 was as follows:
| Governing Bodies | Nr. Shares Held |
|---|---|
| Board of Directors | |
| Belmiro Mendes de Azevedo | 838,862 |
| José Luís dos Santos Lima Amorim | 8,1251 |
| Mário Pereira Pinto | 8,1251 |
| Francisco de La Fuente Sánchez | 2,5001 |
| Rafael Cerezo Laporta | ‐ |
| Paulo José Soares Jubilado de Pinho | 12,650 |
| Pedro Manuel Bastos Mendes Rezende | ‐ |
| Fiscal Board | |
| Armando Luís Vieira de Magalhães | ‐ |
| José Manuel Felizes Morgado | ‐ |
| Carlos Manuel Pereira da Silva | ‐ |
| 1 Shares held indirectly by companies in which the Director is a member of the governing bodies. |
During 2008, transactions of Sonae Capital's shares attributable to members of the Governing Bodies were as follows:
| Governing Bodies | Date | Transactions | Shares held at 31 December 2008 |
|||
|---|---|---|---|---|---|---|
| Nr. Shares |
Price (€) |
Type | ||||
| Board of Directors | ||||||
| Belmiro Mendes de Azevedo | 838,862 | |||||
| 28.01.2008 | 1,862 | ‐ | C | |||
| 01.02.2008 | 160,000 | 1.84 | P | |||
| 04.02.2008 | 150,000 | 1.83 | P | |||
| 05.02.2008 | 350,000 | 1.78 | P | |||
| 06.02.2008 | 177,000 | 1.76 | P | |||
| José Luís dos Santos Lima Amorim | 8,1251 | |||||
| 28.01.2008 | 8,125 | ‐ | C | |||
| Mário Pereira Pinto | 8,1251 | |||||
| 28.01.2008 | 8,125 | ‐ | C | |||
| Francisco de La Fuente Sánchez | 2,5001 | |||||
| (a) | 2,500 | |||||
| Paulo José Jubilado Soares de Pinho | 12,650 | |||||
| (a) | 4,650 | |||||
| 10.06.2008 | 3,000 | 1.35 | P | |||
| 22.09.2008 | 2,000 | 0.83 | P | |||
| 1 | 16.12.2008 | 3,000 | 0.50 | P | ||
| Shares held indirectly by companies in which the Director is a member of the governing bodies. |
P: Purchase
S: Sales
C: Conversion of demerger rights (a) Shares held at appointment date III.4 Sonae Capital Shares
Name: Sonae Capital, SGPS, SA ISIN code:
Security's issuer: Sonae Capital, SGPS, SA NYSE Euronext:
Listing date: 28 January 2008 Reuters:
Share capital: 250,000,000 € Bloomberg:
Listed amount: 250,000,000 shares
Treasury stock: The Company does not own treasury stock
Since the first day of trading until the end of the year, Sonae Capital's share price decreased 69.4%. In the same period, the Portuguese Stock Market reference index (PSI20) decreased 42.8%.
PTSNP0AE0008
SONC
SONAC LS
SONC.PL
The following table and chart summarizes the most relevant information on the Sonae Capital shares traded in Euronext Lisbon.
| Euronext Lisbon | Since 28.01.08 until 31.12.08 |
|---|---|
| Closing prices | |
| First day of trading | 1.44 € |
| Maximum price (4 Feb.08) | 1.83 € |
| Minimum price (31 Dec.08) | 0.44 € |
| 31 December 2008 | 0.44 € |
| Transactions | |
| Average daily quantity | 862,404 |
| Total shares traded | 205,252,193 |
| Turnover | |
| Total (million euro) | 273.9 |
| Average daily turnover (million euro) | 0.95 |
| Market Capitalisation (a) | |
| Year end (31 December 2008) | 110,000,000 € |
(a) Market capitalisation was calculated using the total number of shares.
During 2008, and further to the earnings disclosure highlighted in the previous graph, the following corporate events were announced to the market.
Agreement for the sale of the whole of the shareholding in Contacto – Sociedade de Construções, SA to Soares da Costa, Construção, SGPS, SA.
Contractual sale of the whole of the shareholding in Contacto – Sociedade de Construções, SA to Soares da Costa, Construção, SGPS, SA, following the terms of the initial agreement of 3 January 2008. The sales price was settled at 81.5 million euro, generating a cash inflow of 17.5 million euro.
SC, SGPS, SA, a wholly owned subsidiary of Sonae Capital, SGPS, SA completed an unsecured bond issue of 50 million euro, with a tenor of 10 years and a put option exercisable from the end of the eighth year onwards.
Sale of 12.25% of the share capital of Spinveste – Promoção Imobiliária, SA and 12.25% of the share capital of Spinveste – Gestão Imobiliária, SGII, SA for 5 million euro, to Espimaia (owned by former Sonae managers). Additionally, a call option was granted to Espimaia for the remaining shareholding in both companies, to be exercised up to 31 December 2011. This transaction implied a net asset valuation of 40.08 million euro.
Agreement reached with Salvador Caetano Auto, SGPS, SA about the terms for the definitive sale of the shareholding of 50% in Choice Car, SGPS, SA for a total price of 12.5 million euro.
Disclosure of resolutions approved on the Shareholders' General Meeting, including an increase in the number of members of the Board of Directors from 3 to 7 and election of new members to fill vacant positions in the Board of Directors, until the end of the current mandate.
Disclosure of resolutions of the Board of Directors, namely appointment of an Executive Committee and appointment of a Board Audit and Finance Committee and a Board Nomination and Remuneration Committee.
Negotiation of the end of the agreement regarding the phased disposal of its entire shareholding in Elmo, SGPS, SA, company that controls 100% of Plysorol, SAS and its subsidiaries.
Promissory purchase and sale agreement signed with a company wholly owned by Hagen Imobiliária, SA for the sale of a parcel of land where the Hotel Resort, within the Troiaresort project, will be built. The promissory sale will have an estimated positive impact of 13 million euro on the consolidated results of Sonae Capital, to be recognized on the date of the definitive sale agreement.
Announcement of notification made by the French Competition Authority ("Conseil de la Concurrence") to Plysorol to pay a fine of around 4.2 million euro on charges of price coordination during the period between 1995 and 2004 and of using a common price list from 1987 to 2004.
Announcement of the completion of the sale of Choice Car, SGPS, SA. The sales price was 12.5 million euro with the corresponding gain of 9 million euro impacting the 2008 consolidated results of Sonae Capital.
Contacto Concessões, SGPS, SA, an affiliate of Sonae Capital, SGPS, SA, acquired from Eiffage, SA and its subsidiaries 5,500 shares, representing 11% of the share capital of Norscut – Concessionária de Auto‐estradas, SA, increasing its shareholding in this company from 25% to 36%.
Sonae Capital, SGPS, SA informed about the opening of rehabilitation proceedings of Plysorol, SAS.
Sonae Capital, SGPS, SA informed about the Court decision regarding the rehabilitation proceedings of Plysorol, SAS.
Disposal of several retail real estate assets, with an estimated positive impact of circa 0.9 million euro in the 2008 consolidated results of Sonae Capital.
The 2007 profit appropriation proposal subscribed by the Company's Board of Directors, was approved in the Shareholders' General Meeting held on 9 April 2008. The 2007 net loss was thus transferred to retained earnings and no dividends were distributed. The Company was incorporated in December 2007, hence there is no history of dividend distribution.
The Board of Directors will not propose a dividend distribution in the next Shareholders' General Meeting.
In the future, the Board of Directors may submit proposed dividend distributions for approval by the Shareholders' Annual General Meeting, after taking into consideration the Company's performance, its investment plans and business environment.
During the 2008 financial year, the Company did not adopt any share allotment plans or stock option plans.
In 2007 and previous years, the Sonae Capital Group granted deferred performance bonuses, based on shares of Sonae SGPS, SA to be acquired at nil cost, three years after they were attributed. The acquisition can be exercised during the period commencing on the third anniversary of the grant date and the end of that year. The Company has the choice to settle in cash instead of shares, and the option can only be exercised if the employee still works for the Sonae Capital Group on the vesting date. On 28 January 2008, existing liabilities based on Sonae SGPS, SA's shares have been recalculated to reflect liabilities based on Sonae Capital, SGPS, SA's shares. Closing share prices as at that date were used in the recalculation.
As at 31 December 2008 and 31 December 2007, the market value of total liabilities arising from share‐based payments, which have not yet vested, may be summarized as follows:
| Year of grant | Vesting year | Number of participants |
31 Dec.08 | Fair value 31 Dec.07 |
|---|---|---|---|---|
| 2005 | 2008 | 0 | ‐ | 573,543 |
| 2006 | 2009 | 6 | 73,981 | 267,377 |
| 2007 | 2010 | 5 | 49,081 | 218,103 |
| 2008 | 2011 | 7 | 120,607 | ‐ |
| Total | 243,668 | 1,059,023 |
The business dealings or transactions with members of the Board of Directors or holders of qualified shareholdings, made on an arms length basis, amounted to 962,802 euro, broken down as follows:
There were no business dealings with Fiscal Board members.
Transactions with the Statutory Auditor were solely those related to his official duties, and the fees paid are described in section II.6 of the current report.
Transactions with holding companies, affiliates or group companies were not material and were made on an arms length basis as part of the normal business activity of the Company and, as such, do not require further disclosure.
Sonae Capital, SGPS, SA, via its Investor Relations Office maintains constant contact with investors and analysts by providing up to date information. In addition, on request, it provides clarification of relevant facts about the Company's activities, as already disclosed under the terms of law.
The objective of the Investor Relations Office of Sonae Capital, SGPS, SA is to ensure adequate relations with shareholders, investors, analysts, as well as with financial markets, particularly, with Euronext Lisbon and with the Portuguese Securities Market Commission (CMVM).
In addition to the information about the Company available on the Company's official website, the Investor Relations Office of Sonae Capital, SGPS, SA, supplies, whenever necessary, all relevant information related to material events and answers queries from shareholders, investors, analysts and general public about financial indicators and different business areas' information available to the public.
In strict compliance with law and regulations, the Company informs expeditiously its shareholders and the capital markets in general of all relevant facts concerning its activities, avoiding delays between their occurrence and disclosure.
Information is made publicly available through the Information Disclosure System of the Portuguese Securities Market Commission (www.cmvm.pt) and on the Company's own website (www.sonaecapital.pt).
The Investor Relations Office can be contacted at: Telephone: +351 22 010 79 03; Fax: +351 22 010 79 35; E‐mail: [email protected]; Address: Lugar do Espido, Via Norte, Apartado 3053, 4471‐909 Maia. The Investor Relations Manager is Pedro Capitão, who can be contacted using the above numbers and address.
The Legal Representative for Capital Market Relations is José Luís dos Santos Lima Amorim (Telephone: +351 22 010 79 03; Fax: + 351 22 010 79 35; E‐mail: [email protected]).
Sonae Capital makes available a website for disclosing corporate information about the Company. The website address is: http://www.sonaecapital.pt
In order to create greater interaction with shareholders and investors, the website contains a section entirely devoted to Investor Relations and information available includes:
The Company believes that through these procedures it ensures permanent contact with the market and respect for the principles of equal treatment of shareholders and equal access to information by investors.
Maia, 25 March 2009
Belmiro Mendes de Azevedo
José Luís dos Santos Lima Amorim
Mário Pereira Pinto
Francisco de La Fuente Sánchez
Rafael Cerezo Laporta
Paulo José Jubilado Soares de Pinho
Pedro Manuel Bastos Mendes Rezende
Curricula Vitae of the Members of the Governing Bodies
Age: 71
Nationality: Portuguese
| Education: | ƒ Graduation in Chemical Engineering ‐ Porto University (1963) ƒ PMD (Programme for Management Development) ‐ Harvard Business School (1973) ƒ Financial Management Programme ‐ Stanford University (1985) ƒ Strategic Management ‐ Wharton University (1987) |
|---|---|
| Positions held in Group Companies: |
Chairman of the Board of Directors of the following companies: ƒ SC, SGPS, SA ƒ Sonae Turismo, SGPS, SA ƒ Spred, SGPS, SA ƒ Selfrio, SGPS, SA |
| Positions held in Other Companies: |
ƒ Member of the EGP‐UPBS (University of Porto Business School) General Board ƒ Member of the Management Board of COTEC ‐ Portugal ƒ Founding Member of Manufuture Portugal Forum ƒ Member of the Harvard Business School European Advisory Board ƒ Member of WBCSD ‐ Order of Outstanding Contributors to Sustainable Development ƒ Member of the International Advisory Board of Allianz AG ƒ Member of the European Union Hong‐Kong Business Cooperation Committee ƒ Sole Director of BA ‐ Business Angels, SGPS, SA ƒ Chairman of the Board of Directors of the following companies: ƒ Efanor Investimentos, SGPS, SA ƒ Sonae, SGPS, SA ƒ Sonae Indústria, SGPS, SA ƒ Casa Agrícola de Ambrães, SA ƒ Praça Foz ‐ Sociedade Imobiliária, SA ƒ Setimanale – SGPS, SA |
| Main Professional activities in the last five years: |
ƒ 1999‐2007 ‐ Chairman and CEO of Sonae, SGPS, SA ƒ Since 2003 ‐ Chairman of the Board of Directors of Sonae Indústria, SGPS, SA ƒ Since 2007 ‐ Chairman of the Board of Directors of Sonae, SGPS, SA |
José Luís dos Santos Lima Amorim Executive Director of Sonae Capital, SGPS, SA
Age: 52
Nationality: Portuguese
| Positions held in Group Chairman of the Board of Directors of the following companies: Companies: ƒ Aquapraia ‐ Investimentos Turísticos, SA ƒ Bloco Q ‐ Sociedade Imobiliária, SA ƒ Bloco W ‐ Sociedade Imobiliária, SA ƒ Casa da Ribeira ‐ Hotelaria e Turismo, SA ƒ Centro Residencial da Maia, Urbanismo, SA ƒ Country Club da Maia ‐ Imobiliária, SA ƒ Elmo, SGPS, SA ƒ Empreendimentos Imobiliários Quinta da Azenha, SA ƒ Imoareia ‐ Investimentos Turísticos, SGPS, SA ƒ Imoclub ‐ Serviços Imobiliários, SA ƒ Imoferro ‐ Sociedade Imobiliária, SA ƒ Imohotel ‐ Empreendimentos Turísticos Imobiliários, SA ƒ Imosedas ‐ Imobiliária e Serviços, SA ƒ Insulatroia ‐ Sociedade Imobiliária, SA ƒ Marimo ‐ Exploração Hoteleira e Imobiliária, SA ƒ Marmagno ‐ Exploração Hoteleira e Imobiliária, SA ƒ Marvero ‐ Exploração Hoteleira e Imobiliária, SA ƒ Praedium ‐ SGPS, SA ƒ Praedium II ‐ Imobiliária, SA ƒ Praedium III ‐ Serviços Imobiliários, SA ƒ Prédios Privados ‐ Imobiliária, SA ƒ Predisedas ‐ Predial das Sedas, SA ƒ S.I.I ‐ Soberana ‐ Investimentos Imobiliários, SA ƒ SC ‐ Engenharia e Promoção Imobiliária, SGPS, SA ƒ Sodesa ‐ Comercialização de Energia, SA ƒ Solinca ‐ Investimentos Turísticos, SA ƒ Solinca III ‐ Desporto e Saúde, SA ƒ Soltróia ‐ Sociedade Imobiliária de Urbanização e Turismo de Tróia, SA ƒ Torre São Gabriel, Imobiliária, SA ƒ Tróia Market ‐ Supermercados, SA ƒ Troiaresort ‐ Investimentos Turísticos, SA |
Education: | ƒ Graduation in Economics ‐ Faculdade de Economia, Porto University (1978) ƒ Member of the Statutory Auditors Institute (since 1982) |
|---|---|---|
| ƒ Tulipamar ‐ Exploração Hoteleira e Imobiliária, SA |
ƒ Troiaverde ‐ Exploração Hoteleira e Imobiliária, SA |
Member of the Board of Directors of the following companies:
Member of the Management Board of the following companies:
| Positions held in Other Companies: |
Member of the Board of Directors of Change Partners, SCR, SA |
|---|---|
| Main Professional activities in the last five |
ƒ 1999‐2007 ‐ Head of Planning and Control at Sonae SGPS, SA ƒ 1999‐2007 ‐ Secretary to the Board of Directors and Executive Committee of Sonae, SGPS, |
| years: | SA ƒ 2001‐2007 ‐ Head of Investor Relations of Sonae, SGPS, SA |
Mário Pereira Pinto Executive Director of Sonae Capital, SGPS, SA
Age: 57
Nationality: Portuguese
| Education: | ƒ Graduation in Economics ‐ Faculdade de Economia, Porto University (1975) ƒ Advanced Management Programme ‐ INSEAD, Fontainebleau (1989) |
|---|---|
| Positions held in Group Companies: |
Chairman of the Board of Directors of Change, SGPS, SA |
| Member of the Board of Directors of the following companies: | |
| ƒ Edíficios Saudáveis Consultores ‐ Ambiente e Energia em Edifícios, SA |
|
| ƒ Integrum ‐ Edifícios Sustentáveis, SA |
|
| ƒ Norscut ‐ Concessionária de Auto Estradas, SA |
|
| ƒ Pargeste, SGPS, SA |
|
| ƒ SC, SGPS, SA |
|
| ƒ Sodesa ‐ Comercialização de Energia, SA |
|
| ƒ TP ‐ Sociedade Térmica Portuguesa, SA |
|
| Positions held in Other | Chairman of the Board of Directors of the following companies: |
| Companies: | ƒ Change Partners, SCR, SA |
| ƒ Change Partners I, SGPS, SA |
|
| ƒ Glomack ‐ SGPS, SA |
|
| Member of the Board of Directors of the following companies: | |
| ƒ BA ‐ Glass, SA |
|
| ƒ CEV ‐ Biotecnologia de Plantas Consumo em Verde, SA |
|
| Member of the Management Board of the following companies: | |
| ƒ CPartners, Serviços de Apoio à Gestão, Unipessoal, Lda |
|
| ƒ PSISA ‐ Consultores, Lda |
|
| Chairman of the Fiscal Board of Estoril‐Sol, SGPS, SA | |
| Main Professional activities in the last five years: |
ƒ Since 2002 ‐ Chairman of Change Partners, SCR, SA |
Francisco de La Fuente Sánchez Non executive Director of Sonae Capital, SGPS, SA
Age: 67
Nationality: Portuguese
| Education: | ƒ Graduation in Electrotechnical Engineering ‐ IST (1965) |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other Companies: |
_ |
| Main Professional activities in the last five years: |
In the EDP Group and in the Electrical Sector in Portugal: ƒ 2002‐2003 ‐ Chairman of the Board of Directors of EDP Serviner ‐ Serviços de Energia, SA ƒ 2002‐2003 ‐ Chairman of the Board of Directors of EDP Valor ‐ Gestão Integrada de Serviços, SA ƒ 2002‐2003 ‐ Chairman of the Board of Directors of EDP Energia, SA ƒ 2002‐2003 ‐ Chairman of the Board of Directors of EDP Distribuição ‐ Energia, SA ƒ 2002‐2003 ‐ Chairman of the Board of Directors of EDP Produção ‐ Gestão da Produção de Energia, SA ƒ 2000‐2003 ‐ Chairman and CEO of EDP ‐ Electricidade de Portugal, SA ƒ 2003‐2006 ‐ Chairman of the Board of Directors of EDP ‐ Electricidade de Portugal, SA ƒ 2004‐2006 ‐ Chairman of the Board of Directors of ELECPOR ‐ Associação Portuguesa das Empresas do Sector Eléctrico ƒ 2006‐2007 ‐ Counsellor of the Board of Directors of EDP – Electricidade de Portugal, SA |
| ƒ Since 2005 ‐ Chairman of EDP Foundation In the Electrical Sector outside Portugal: ƒ 2002‐2005 – Member of the Board of Directors of Hidroeléctrica del Cantábrico, SA ƒ Since 2005 ‐ Honorary Chairman of Hidroeléctrica del Cantábrico, SA |
|
| In Other Sectors: ƒ 2000‐2002 ‐ Non executive Director of BVLP – Bolsa de Valores de Lisboa e Porto ƒ 2000‐2003 ‐ Non executive Director of Galp Energia ƒ 2000‐2006 ‐ Member of the General Council of AIP – Associação Industrial Portuguesa ƒ 2003‐2004 ‐ Manager of PROFORUM ‐ Associação para o Desenvolvimento da Engenharia ƒ 2003‐2004 ‐ Director of BCSD Portugal ‐ Business Council for Sustainable Development ƒ 2003‐2005 ‐ Director of the Competitiveness Forum ƒ 2000‐2006 ‐ Non executive Chairman of the Board of Directors of ONI ƒ 2000‐2006 ‐ Member of the Superior Council of BCP – Banco Comercial Português ƒ 2004‐2007 ‐ Chairman of PROFORUM ‐ Associação para o Desenvolvimento da Engenharia |
Age: 58
Nationality: Spanish
| Education: | ƒ Graduation in Economics ‐ London School of Economics (1970 ‐ 1974) ƒ Master in Business Administration ‐ Columbia University (1975 – 1977) |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other Companies: |
|
| Main Professional activities in the last five years: |
ƒ 1982‐2008 ‐ At the Boston Consulting Group: leaves the European Chief Executive Office to be fully dedicated to clients in Spain and Portugal, (together with Russia and Eastern European Countries during 2002‐2003). Main work during these years in retail and financial services industries |
| ƒ Since 2007 ‐ Member of the Consulting Board of the Exea Group (Family Corporation of the Puig Family) |
|
| ƒ Since 2007 ‐ Member of the Board of Directors and Chairman of the Audit Committee of Puig Beauty and Fashion |
|
| ƒ Since 2007 ‐ Member of the Board of Directors of Flamagas, SA ƒ Since 2007 ‐ Member of the Board of Directors of ISDIN, SA |
Paulo José Jubilado Soares de Pinho Non executive Director of Sonae Capital, SGPS, SA
Age: 46
Nationality: Portuguese
| Education: | ƒ Graduation in Economics ‐ Faculdade de Economia da Universidade Nova de Lisboa (1985) ƒ MBA – Master in Business Administration ‐ Faculdade de Economia da Universidade Nova de Lisboa (1989) ƒ PhD in Banking and Finance ‐ City University Business School, London (1994) ƒ Negotiation Analysis ‐ Amsterdam Institute of Finance (2005) ƒ Advanced Course ‐ European Venture Capital and Private Equity Association (2006) ƒ Valuation Guidelines Masterclass ‐ European Venture Capital and Private Equity Association (2007) ƒ Private Equity and Venture Capital Programme ‐ Harvard Business School (2007) |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other Companies: |
|
| Main Professional activities in the last five years: |
ƒ Since 2002 ‐ Associate Professor at Faculdade de Economia da Universidade Nova de Lisboa ƒ Since 2003 ‐ Chairman of General Council of Fundo de Sindicação de Capital de Risco PME – IAPMEI ƒ Since 2005 ‐ Member of the Advisory and Strategic Board of Fundo Fast Change Venture Capital ƒ Since 2007 ‐ Senior Advisor for Iberia of Profit Technologies, EUA ƒ Since 2007 ‐ Senior Advisor of New Next Moves Consultants, Portugal ƒ Since 2007 ‐ Director of Venture Valuation, Switzerland (Representative for Portugal) ƒ 2004‐2007 ‐ Executive Director and Member of the Board of Directors of REN ‐ Redes Energéticas Nacionais, SA ƒ 2007‐2008 ‐ Member of the Board of Directors of Xis Vending ‐ Serviços de Vending, SA |
Pedro Manuel Bastos Mendes Rezende Non executive Director of Sonae Capital, SGPS, SA
Age: 47
Nationality: Portuguese and Spanish
| Education: | ƒ ICAI ‐ Industrial Mechanical Engineer, Madrid (1979 – 1985) ƒ Master in Business Administration ‐ INSEAD, Fontainebleau (1989 – 1990) |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other Companies: |
|
| Main Professional activities in the last five years: |
2003‐2006 ‐ EDP, Energias de Portugal, SA ƒ Member of the Board of Directors and of the Executive Committee ƒ CEO of EDP Produção and of Companhia Portuguesa de Produção de Electricidade (CPPE) ƒ Member of the Board of Directors and Executive Director of Hidroeléctrica del Cantábrico (Hidrocantábrico) ƒ Chairman of the Board of Directors of EDP Engenharia e Manutenção, EDP Energia Ibérica and Tergen |
| Since 2006 ‐ Hyperion Energy Investments |
Founding Partner and CEO
Chairman of the Fiscal Board of Sonae Capital, SGPS, SA
| Education: | ƒ Bachelor degree in Accounting, ISCAP (1972) ƒ Graduation in Economics ‐ Faculdade de Economia, Porto University (1978) ƒ Executive MBA – European Management, IESF/IFG (1996) |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other Companies: |
Member of the Fiscal Board of the following companies: ƒ Sonaecom, SA ƒ Sonae Indústria, SGPS, SA ƒ Futebol Clube do Porto – Futebol SAD ƒ Eça de Queiroz Foundation |
| Main Professional activities in the last five years: |
ƒ Statutory Auditor and Managing Partner of Santos Carvalho & Associados, SROC, SA (since 1989) |
Member of the Fiscal Board of Sonae Capital, SGPS, SA
| Education: | ƒ Graduation in Management – ISEG, Universidade Técnica de Lisboa ƒ MBA in Finance – IEDE, Madrid ƒ MBA in Management and Information Systems – Faculdade de Economia e Gestão, Universidade Católica |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other | Member of the Fiscal Board of the following companies: |
| Companies: | ƒ Sonae, SGPS, SA |
| ƒ Sonae Indústria, SGPS, SA |
|
| ƒ Sonae Sierra, SGPS, SA |
|
| Main Professional | ƒ 1991‐2004 ‐ Partner of Deloitte |
| activities in the last five | ƒ Since 2004 ‐ Statutory Auditor |
| years: | ƒ Since 2004 ‐ Partner of Horwath Parsus ‐ Consultoria e Gestão, Lda |
Carlos Manuel Pereira da Silva
Member of the Fiscal Board of Sonae Capital, SGPS, SA
| Education: | ƒ Graduation in Economics ‐ Faculdade de Economia, Porto University (1978) |
|---|---|
| Positions held in Group Companies: |
_ |
| Positions held in Other Companies: |
_ |
| Main Professional activities in the last five years: |
ƒ Statutory Auditor and Managing Partner of Santos Carvalho & Associados, SROC, SA (since 1992) |
CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2008 AND 31 DECEMBER 2007
(Amounts expressed in euro)
| Total Operations | Discontinued Operations Continued Operations | Pró-forma | ||||
|---|---|---|---|---|---|---|
| ASSETS | Notes | 31.12.2008 | 31.12.2008 | 31.12.2008 | 31.12.2007 | 31.12.2007 |
| NON-CURRENT ASSETS: | ||||||
| Tangible assets | 10 | 413,691,033 | 28,576,969 | 385,114,064 | 328,038,248 | 329,029,906 |
| Intangible assets | 11 | 1,490,665 | 367,402 | 1,123,263 | 803,537 | 812,094 |
| Goodwill | 12 | 61,766,621 | - | 61,766,621 | 62,517,465 | 63,796,454 |
| Investments in associated companies | 6 | 14,882,648 | - | 14,882,648 | 18,985,662 | 18,985,662 |
| Other investments | 7 and 13 | 29,347,984 | 1,524 | 29,346,460 | 77,186,273 | 77,186,273 |
| Deferred tax assets | 20 | 15,757,915 | - | 15,757,915 | 14,117,740 | 14,320,920 |
| Other non-current assets | 14 | 23,832,047 | 343,901 | 23,488,146 | 24,311,811 | 24,318,632 |
| Total Non-Current Assets | 560,768,913 | 29,289,796 | 531,479,117 | 525,960,736 | 528,449,941 | |
| CURRENT ASSETS: Stocks |
15 | 241,382,414 | 18,663,103 | 222,719,311 | 142,074,734 | 143,489,662 |
| Trade accounts receivables | 16 | 60,816,452 | 17,704,550 | 43,111,902 | 35,322,604 | 48,746,435 |
| Other debtors | 17 | 20,818,049 | 5,183,491 | 15,634,558 | 24,998,713 | 23,853,744 |
| Taxes recoverable | 18 | 16,833,257 | 1,281,829 | 15,551,428 | 16,608,583 | 19,444,523 |
| Other current assets | 19 | 8,335,621 | 2,522,313 | 5,813,308 | 6,858,080 | 8,879,644 |
| Investments held for trading | 13 | 499 | - | 499 | 499 | 499 |
| Cash and cash equivalents | 21 | 19,316,486 | 1,383,546 | 17,932,940 | 43,956,550 | 44,333,841 |
| Total Current Assets | 367,502,778 | 46,738,832 | 320,763,946 | 269,819,763 | 288,748,348 | |
| TOTAL ASSETS | 928,271,691 | 76,028,628 | 852,243,063 | 795,780,499 | 817,198,289 | |
| EQUITY AND LIABILITIES | ||||||
| EQUITY: | ||||||
| Share capital | 22 | 250,000,000 | - | 250,000,000 | 250,000,000 | 250,000,000 |
| Reserves and retained earnings | 35,452,156 | (9,542,376) | 44,994,532 | 62,453,729 | 91,854,242 | |
| Profit/(Loss) for the year attributable to the equity holders of Sonae Capital | 21,393,605 | (3,274,530) | 24,668,135 | 8,579,431 | 14,994,319 | |
| Equity attributable to the equity holders of Sonae Capital | 306,845,761 | (12,816,906) | 319,662,667 | 321,033,160 | 356,848,561 | |
| Equity attributable to minority interests | 23 | 49,319,413 | (8,619,778) | 57,939,191 | 36,758,832 | 36,758,832 |
| TOTAL EQUITY | 356,165,174 | (21,436,684) | 377,601,858 | 357,791,992 | 393,607,393 | |
| LIABILITIES: | ||||||
| NON-CURRENT LIABILITIES: | ||||||
| Bank Loans | 24 | 35,513,299 | 1,578,783 | 33,934,516 | 122,710,414 | 122,710,414 |
| Bonds | 24 | 99,080,105 | - | 99,080,105 | 49,766,000 | 49,766,000 |
| Obligations under finance leases | 24 and 25 | 16,814,552 | - | 16,814,552 | 18,726,595 | 18,726,595 |
| Other loans | 24 | 403,176 | - | 403,176 | 250,577 | 250,577 |
| Other non-current liabilities | 27 | 66,217,083 | 41,038,203 | 25,178,880 | 34,461,335 | 39,150,435 |
| Deferred tax liabilities | 20 | 3,164,170 | - | 3,164,170 | 2,307,082 | 7,526,370 |
| Provisions | 32 | 23,456,843 | 4,431,299 | 19,025,544 | 11,442,155 | 16,654,464 |
| Total Non-Current Liabilities | 244,649,228 | 47,048,285 | 197,600,943 | 239,664,158 | 254,784,855 | |
| CURRENT LIABILITIES: | ||||||
| Bank Loans | 24 | 138,865,035 - |
12,151,075 - |
126,713,960 - |
7,714,042 15,000,000 |
7,714,042 15,000,000 |
| Bonds Obligations under finance leases |
24 24 and 25 |
1,957,324 | - | 1,957,324 | 1,860,326 | 1,860,326 |
| Other loans | 24 | 440,145 | - | 440,145 | 176,635 | 176,635 |
| Trade creditors | 29 | 52,979,478 | 12,292,570 | 40,686,908 | 30,876,038 | 62,517,417 |
| Other creditors | 30 | 79,339,000 | 19,117,634 | 60,221,366 | 110,830,844 | 31,226,932 |
| Taxes and contributions payable | 18 | 12,610,226 | 1,328,503 | 11,281,723 | 12,039,282 | 13,399,775 |
| Other current liabilities | 31 | 39,967,884 | 5,527,248 | 34,440,636 | 16,011,718 | 33,095,450 |
| Provisions | 32 | 1,298,200 | - | 1,298,200 | 3,815,464 | 3,815,464 |
| Total Current Liabilities | 327,457,289 | 50,417,027 | 277,040,262 | 198,324,349 | 168,806,041 | |
| TOTAL LIABILITIES | 572,106,517 | 97,465,312 | 474,641,205 | 437,988,507 | 423,590,896 | |
| TOTAL EQUITY AND LIABILITIES | 928,271,691 | 76,028,628 | 852,243,063 | 795,780,499 | 817,198,289 | |
The accompanying notes are part of these financial statements.
1) Continued Operations (exclude Contacto - Sociedade de Construções, SA)
(Amounts expressed in euro)
| 31.12.2007 | |||||
|---|---|---|---|---|---|
| Notes | Total Operations | 31.12.2008 Discontinued Operations 2 |
Continued Operations | Pro-Forma 1 |
|
| Operational income | |||||
| Sales | 35 | 142,760,686 | 20,297,949 | 122,462,737 | 94,811,629 |
| Services rendered | 35 | 108,084,584 | 9,751 | 108,074,833 | 102,465,562 |
| Other operational income | 36 | 8,763,734 | 513,532 | 8,250,202 | 8,202,339 |
| Total operational income | 259,609,004 | 20,821,232 | 238,787,772 | 205,479,530 | |
| Operational expenses | |||||
| Cost of goods sold and materials consumed | 15 | (66,745,851) | (11,150,858) | (55,594,993) | (51,004,254) |
| Changes in stocks of finished goods and work in progress | 37 | 57,293,719 | (703,500) | 57,997,219 | 32,409,338 |
| External supplies and services | 38 | (181,586,889) | (6,534,148) | (175,052,741) | (132,258,568) |
| Staff costs | 39 | (50,256,467) | (4,857,596) | (45,398,871) | (38,554,407) |
| Depreciation and amortisation | 10 and 11 | (10,941,437) | (1,104,062) | (9,837,375) | (7,324,129) |
| Provisions and impairment losses | 32 | (10,694,800) | 4,594 | (10,699,394) | (722,729) |
| Other operational expenses | 40 | (8,919,714) | (906,981) | (8,012,733) | (6,401,846) |
| Total operational expenses | (271,851,439) | (25,252,551) | (246,598,888) | (203,856,595) | |
| Operational profit/(loss) | (12,242,435) | (4,431,319) | (7,811,116) | 1,622,935 | |
| Financial Expenses | 41 | (16,467,881) | (1,102,065) | (15,365,816) | (17,053,855) |
| Financial Income | 41 | 4,519,318 | 170,078 | 4,349,240 | 7,055,704 |
| Net financial expenses | (11,948,563) | (931,987) | (11,016,576) | (9,998,151) | |
| Share of results of associated undertakings | 6 | (2,099,789) | - | (2,099,789) | 857,332 |
| Investment income | 42 | 53,084,662 | - | 53,084,662 | 12,141,976 |
| Profit/(Loss) before taxation | 26,793,875 | (5,363,306) | 32,157,181 | 4,624,092 | |
| Taxation | 43 | (3,842,186) | (77,470) | (3,764,716) | 4,809,155 |
| Profit/(Loss) after taxation | 22,951,689 | (5,440,776) | 28,392,465 | 9,433,247 | |
| Profit/(Loss) for the year | 44 | 22,951,689 | (5,440,776) | 28,392,465 | 9,433,247 |
| Attributable to: | |||||
| Equity holders of Sonae Capital | 46 | 21,393,605 | (3,274,530) | 24,668,135 | 8,579,431 |
| Minority interests | 23 | 1,558,084 | (2,166,246) | 3,724,330 | 853,816 |
| Profit/(Loss) per share | |||||
| Basic | 46 | 0.085574 | (0.013098) | 0.098673 | 0.034318 |
| Diluted | 46 | 0.085574 | (0.013098) | 0.098673 | 0.034318 |
The accompanying notes are part of these financial statements.
1) Continued Operations (exclude Contacto - Sociedade de Construções, SA) - Note 1.1.
2) Discontinued operations (Elmo, SGPS, SA and its affiliated undertakings - Plysorol Group)
(Amounts expressed in euro)
| 4th Quarter 07 | |||||
|---|---|---|---|---|---|
| Notes | Total Operations | 4th Quarter 08 Discontinued 2 Operations |
Continued Operations | 1 Pro-Forma |
|
| Operational income | |||||
| Sales | 35 | 62,095,875 | - | 62,095,875 | 34,368,455 |
| Services rendered | 35 | 24,943,541 | - | 24,943,541 | 25,768,439 |
| Other operational income | 36 | 3,341,096 | - | 3,341,096 | 3,724,789 |
| Total operational income | 90,380,512 | - | 90,380,512 | 63,861,683 | |
| Operational expenses | |||||
| Cost of goods sold and materials consumed | 15 | (17,064,417) | - | (17,064,417) | (14,026,596) |
| Changes in stocks of finished goods and work in progress | 37 | 9,861,870 | - | 9,861,870 | 5,963,607 |
| External supplies and services | 38 | (53,304,734) | (4,837) | (53,299,897) | (39,178,401) |
| Staff costs | 39 | (12,323,040) | - | (12,323,040) | (10,002,033) |
| Depreciation and amortisation | 10 and 11 | (2,896,316) | - | (2,896,316) | (2,008,078) |
| Provisions and impairment losses | 32 | (7,846,277) | - | (7,846,277) | (511,793) |
| Other operational expenses | 40 | (3,689,005) | 5,765 | (3,694,770) | (1,755,226) |
| Total operational expenses | (87,261,919) | 928 | (87,262,847) | (61,518,520) | |
| Operational profit/(loss) | 3,118,593 | 928 | 3,117,665 | 2,343,163 | |
| Financial Expenses | 41 | (4,279,618) | (46,107) | (4,233,511) | (4,706,312) |
| Financial Income | 41 | 1,924,970 | 6 | 1,924,964 | 3,039,493 |
| Net financial expenses | (2,354,648) | (46,101) | (2,308,547) | (1,666,819) | |
| Share of results of associated undertakings | 6 | 961,200 | - | 961,200 | 159,113 |
| Investment income | 42 | (6,553,600) | - | (6,553,600) | 2,562,661 |
| Profit/(Loss) before taxation | (4,828,455) | (45,173) | (4,783,282) | 3,398,118 | |
| Taxation | 43 | (3,348,888) | 678 | (3,349,566) | 2,193,636 |
| Profit/(Loss) after taxation | (8,177,343) | (44,495) | (8,132,848) | 5,591,754 | |
| Profit/(Loss) for the year | 44 | (8,177,343) | (44,495) | (8,132,848) | 5,591,754 |
| Attributable to: | |||||
| Equity holders of Sonae Capital | 46 | (10,774,925) | (44,237) | (10,730,688) | 5,024,644 |
| Minority interests | 23 | 2,597,582 | (259) | 2,597,841 | 567,110 |
| Profit/(Loss) per share | |||||
| Basic | 46 | (0.043100) | (0.000177) | (0.042923) | 0.020099 |
| Diluted | 46 | (0.043100) | (0.000177) | (0.042923) | 0.020099 |
The accompanying notes are part of these financial statements.
1) Continued Operations (exclude Contacto - Sociedade de Construções, SA) - Note 1.1.
2) Discontinued operations (Elmo, SGPS, SA and its affiliated undertakings - Plysorol Group)
| Attr ibuta ble t o Eq uity Hold of S e Ca pita l ers ona |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Note s |
Sha re Cap ital |
Dem erge r Res erve |
Pro -form a 2 Adju stm ents |
Hed ge Res erve |
Cur renc y Tra nsla tion Res erve |
Oth er R ese rves and Re tain ed Ear ning s |
Res erve s and Re tain ed Ear ning s |
Net Pro fit/(L ) oss |
Tota l |
Min ority Inte rest s |
Tota l Equ ity |
|
| t 1 J 200 Bala 7 nce as a anu ary |
250 ,000 ,000 |
132 ,638 ,253 |
(12 1,67 6,27 0) |
69,5 84,4 32 |
417 ,724 |
(59, 798 ,471 ) |
21,1 65,6 68 |
2,18 9,06 7 |
273 ,354 ,735 |
18,8 76,3 52 |
292 ,231 ,087 |
|
| n of fit o f 20 App iatio 06: ropr pro |
||||||||||||
| Tran sfer to l l res d re tain ed e arni ega erve s an ngs |
- | - | - | - | - | 2,18 9,06 7 |
2,18 9,06 7 |
(2,1 89,0 67) |
- | - | - | |
| Divi den ds d istrib uted |
- | - | - | - | - | - | - | - | - | - | - | |
| Cha s in nge rese rves |
||||||||||||
| Cha s in the peri od nge Tran sfer to r lts - fair valu e of hed inst ents |
- | - | - | (8,0 94,0 73) |
(464 ,977 ) |
- | (8,5 59,0 50) |
- | (8,5 59,0 50) |
(22, 328 ) |
(8,5 81,3 78) |
|
| ging esu rum Tran sfer to r lts esu |
- - |
- | - | - (9,5 20,8 81) |
- | - | - (9,5 20,8 81) |
- | - (9,5 20,8 81) |
- | - (9,5 20,8 81) |
|
| Affil liate d an d as iated und erta king lude d fo le soc exc r sa |
- | - 96,5 48,8 26 |
- | - | 96,5 48,8 26 |
- | 96,5 48,8 26 |
- | 96,5 48,8 26 |
|||
| Affil liate d an d as iated und erta king lude d fo le in ults soc exc r sa res |
- | - | 31,4 37,2 08 |
- | - | - (31, 437 ,208 ) |
- | - | ||||
| Aqu isitio n of affi lliate d an d as iated und erta king soc s |
- | - | (6,3 09,7 64) |
- | - | - (6,3 09,7 64) |
- | - (6,3 09,7 64) |
- 17,1 08,0 25 |
- 10,7 98,2 61 |
||
| Oth han er c |
- - |
- | - | - | - (3,6 59,6 24) |
(3,6 59,6 24) |
- | (3,6 59,6 24) |
(57, 033 ) |
(3,7 16,6 57) |
||
| ges Con solid ated Pro fit/(L )for the twe lve m onth oss s |
- | - | - | - | - | |||||||
| end ed 3 1 De ber 200 7 cem |
- | - | - | - | - | - | - | 14,9 94,3 19 |
14,9 94,3 19 |
853 ,816 |
15,8 48,1 35 |
|
| 07 1 Bala 31 t D mbe r 20 nce as a ece |
250 ,000 ,000 |
132 ,638 ,253 |
- | 51,9 69,4 78 |
(47, ) 253 |
(92, ) 706 ,236 |
91,8 54,2 42 |
14,9 94,3 19 |
356 ,848 ,561 |
36,7 58,8 32 |
393 ,607 ,393 |
|
| Bala t 1 J 200 8 nce as a anu ary |
- 250 ,000 ,000 |
- 132 ,638 ,253 |
- - |
- 51,9 69,4 78 |
- (47, 253 ) |
- (92, 706 ,236 ) |
- 91,8 54,2 42 |
- 14,9 94,3 19 |
- 356 ,848 ,561 |
- 36,7 58,8 32 |
- 393 ,607 ,393 |
|
| App iatio n of fit o f 20 07: ropr pro |
||||||||||||
| Tran sfer to l l res d re tain ed e arni ega erve s an ngs |
- | - | - | - | - | 8,57 9,43 1 |
8,57 9,43 1 |
(8,5 79,4 31) |
- | - | - | |
| Divi den ds d istrib uted |
- | - | - | - | - | - | - | - | - | - | - | |
| Cha s in nge rese rves |
||||||||||||
| Cha s in the peri od nge |
- | - | - | (50, 321 ,296 ) |
(1,7 54,6 82) |
- | (52, 075 ,978 ) |
- | (52, 075 ,978 ) |
(94, 458 ) |
(52, 170 ,436 ) |
|
| Tran sfer to r lts - fair valu e of hed ging inst ents esu rum |
- | - | - | - | - | - | - | - | - | - | - | |
| Tran sfer lts to r esu |
- | - | - | - | - | - | - | - | - | - | - | |
| Affil liate d an d as iated und king lude d fo le erta soc exc r sa |
- | - | - | - | - | 5,75 8,01 9 |
5,75 8,01 9 |
(6,4 14,8 88) |
(656 ,869 ) |
4,37 5,48 5 |
3,71 8,61 6 |
|
| Affil liate d an d as iated und king lude d fo le in ults erta soc exc r sa res |
- | - | - | - | - | - | - | - | - | - | - | |
| Aqu isitio n of affi lliate d an d as iated und king erta soc s |
- | - | - | - | - | (9,5 15,8 85) |
(9,5 15,8 85) |
- | (9,5 15,8 85) |
6,71 0,52 7 |
(2,8 05,3 58) |
|
| Oth han er c ges |
- | - | - | - | - | (9,1 47,6 73) |
(9,1 47,6 73) |
- | (9,1 47,6 73) |
10,9 43 |
(9,1 36,7 30) |
|
| Con solid ated Pro fit/(L )for the twe lve m onth oss s end ed 3 1 De ber 200 8 cem |
- | - | - | - | - | - | - | 21,3 93,6 05 |
21,3 93,6 05 |
1,55 8,08 4 |
22,9 51,6 89 |
|
| Bala t 31 De ber 200 8 nce as a cem |
250 ,000 ,000 |
132 ,638 ,253 |
- | 1,64 8,18 2 |
(1,8 01,9 35) |
(97, 032 ,344 ) |
35,4 52,1 56 |
21,3 93,6 05 |
306 ,845 ,761 |
49,3 19,4 13 |
356 ,165 ,174 |
|
The accompanying notes are an integral part of these financial statements.
2) Pro-Forma Equity (excludes Contacto - Sociedade de Construções, SA)
(Amounts expressed in euro)
| Continued Operations |
Pro-forma 1 | ||
|---|---|---|---|
| Notes | 31.12.2008 | 31.12.2007 | |
| OPERATING ACTIVITIES | |||
| Cash receipts from trade debtors | 238,291,437 | 215,997,007 | |
| Cash paid to trade creditors | (226,349,902) | (186,808,364) | |
| Cash paid to employees | (49,528,678) | (38,373,599) | |
| Cash flow generated by operations | (37,587,143) | (9,184,956) | |
| Income taxes (paid) / received | (4,896,544) | (6,398,314) | |
| Other cash receipts and (payments) relating to operating activities | (5,796,838) | 8,136,559 | |
| Net cash flow from operating activities (1) | (48,280,525) | (7,446,711) | |
| INVESTMENT ACTIVITIES | |||
| Cash receipts arising from: | |||
| Investments | 47 | 115,837,437 | 114,899,762 |
| Tangible assets | 10,463,055 | 22,381,443 | |
| Intangible assets | 8,906 | - | |
| Interest and similar income | 1,752,573 | 8,184,461 | |
| Loans granted | 1,936,891 | 70,504,378 | |
| Dividends | 2,898,787 | 2,717,872 | |
| Cash Payments arising from: | 132,897,649 | 218,687,916 | |
| Investments | 47 | (8,130,199) | (80,159,253) |
| Tangible assets | (86,701,965) | (83,324,197) | |
| Intangible assets | (673,057) | (335,284) | |
| Loans granted | (12,590,161) | (10,143,067) | |
| Others | (229,539) | - | |
| (108,324,921) | (173,961,801) | ||
| Net cash used in investment activities (2) | 24,572,728 | 44,726,115 | |
| FINANCING ACTIVITIES | |||
| Cash receipts arising from: | |||
| Loans obtained | 105,962,976 | 111,024,639 | |
| Capital increases, additional paid in capital and share premiums Others |
15,090,881 200,000 |
30,820,921 - |
|
| 121,253,857 | 141,845,560 | ||
| Cash Payments arising from: | |||
| Loans obtained | (104,859,372) | (130,481,852) | |
| Interest and similar charges | (14,694,751) | (19,227,620) | |
| Others | (1,814,989) | (1,004,006) | |
| Net cash used in financing activities (3) | (121,369,112) | (150,713,478) | |
| (115,255) | (8,867,918) | ||
| Net increase in cash and cash equivalents (4) = (1) + (2) + (3) | (23,823,052) | 28,411,486 | |
| Effect of foreign exchange rates | 599,527 | 494,239 | |
| Cash and cash equivalents at the beginning of the period | 41,383,143 | 13,086,955 | |
| Cash and cash equivalents at the end of the period | 21 | 16,960,564 | 41,004,202 |
The accompanying notes are part of these financial statements.
1) Continued Operations (exclude Contacto - Sociedade de Construções, SA) - Note 1.1.
SONAE CAPITAL, SGPS, SA ("Company", "Goup" or "Sonae Capital") whose head-office is at Lugar do Espido, Via Norte, Apartado 3053, 4471-907 Maia, Portugal, is the parent company of a group of companies, as detailed in Notes 5 to 7 ("Sonae Capital Group") and was set up on 14 December 2007 as a result of the demerger of the shareholding in SC, SGPS, SA (previously named Sonae Capital, SGPS, SA) from Sonae, SGPS, SA, which was approved by the Board of Directors on 8 November 2007 and by the Shareholder's General Meeting held on 14 December 2007.
Sonae Capital's business portfolio was reorganized into two main strategic businesses areas:
As defined by international standard IFRS 5, and to ensure comparability between 2008 and 2007, the consolidated income statement and consolidated statement of cash-flows include pro forma consolidated financial statements previously considered in the financial statements presented for the year ended 31 December 2007. Thus, the comparative consolidated financial statements reported on 31 December 2007, reflect the effects of the sale of Contacto - Sociedade de Construções, SA.
The principal accounting policies adopted in preparing the accompanying consolidated financial statements are as follows:
The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS" – previously named International Accounting Standards – "IAS"), issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the "International Financial Reporting Interpretations Committee" ("IFRIC"), previously named "Standing Interpretations Committee" ("SIC"), beginning on 1 January 2008.
Interim financial statements were presented quarterly, in accordance with IAS 34 – "Interim Financial Reporting".
The accompanying consolidated financial statements have been prepared from the books and accounting records of the Company, of its affiliated undertakings and of jointly controlled companies, on a going concern basis and under the historical cost convention, except for derivative financial instruments which are stated at fair value.
As at the date of issue of these consolidated financial statements the following standards had already been endorsed by the European Union, whose adoption was not required:
IFRIC 17 "Distributions of Non-cash Assets" (mandatory as from 1 July 2009) not yet ratified by the European Union;
Revision of IAS 39 - "Reclassification of Financial Assets" and "Qualifying hedging instruments" - (mandatory as from 1 July 2009) - not yet ratified by the European Union;
The adoption of these standards was not required for the financial year begining on 1 January 2008 and as such, Sonae Capital has decided not to engage in their early adoption. There will be no material impacts on future financial statements of the Group from adopting these standards and interpretations, with the exception of IFRS 8.
The consolidation methods adopted by the Group are as follows:
Investments in companies in which the Group owns, directly or indirectly, more than 50% of the voting rights at Shareholders' General Meetings or is able to establish financial and operational policies so as to benefit from its activities (definition of control normally used by the Group), are included in the consolidated financial statements using the full consolidation method. Equity and net profit attributable to minority shareholders are shown separately, under the caption Minority interests, in the consolidated balance sheet and in the consolidated income statement, respectively. Companies included in the consolidated financial statements are listed in Note 5.
When losses attributable to minority interests exceed the minority interest in the equity of the Group company, the excess, and any further losses attributable to minority interests, are charged against the equity holders of Sonae Capital except to the extent that minority shareholders have a binding obligation and are able to cover such losses. If the Group company subsequently reports profits, such profits are allocated to the equity holders of Sonae Capital until the minority's share of losses previously absorbed by the equity holders of Sonae Capital has been recovered.
Assets and liabilities of each Group company are measured at their fair value at the date of acquisition. Any excess of the cost of acquisition over the Group's interest in the fair value of the identifiable net assets acquired is recognised as goodwill (Note 2.2.c)). Any excess of the Group's share in the fair value of the identifiable net assets acquired over cost, is recognised as income in profit or loss for the period of acquisition, after reassessment of the estimated fair value. Minority interests include their proportion of the fair value of net identifiable assets and liabilities recognised on acquisition of Group companies.
Adjustments to the financial statements of Group companies are performed, whenever necessary, in order to adapt accounting policies to those used by the Group. All intra-group transactions, balances, income and expenses and distributed dividends are eliminated on consolidation.
Financial investments in companies excluded from consolidation are recorded at acquisition cost net of impairment losses (Note 7).
Whenever the Group has, in substance, control over other entities created for a specific purpose, even if no share capital interest is directly held in those entities, these are consolidated by the full consolidation method. Such entities, when applicable, are disclosed in Note 5.
Investments in associated companies (companies where the Group exercises significant influence but does not establish financial and operational policies – usually corresponding to holdings between 20% and 50% in a company's share capital) and in jointly controlled companies are accounted for in accordance with the equity method.
Under the equity method, investments are recorded at cost, adjusted by the amount corresponding to the Group's share of changes in equity (including net profit) of associated and jointly controlled companies and by dividends received.
Any excess of the cost of acquisition over the Group's share in the fair value of the identifiable net assets acquired is recognised as goodwill (Note 2.2.c)), which is included in the caption Investment in associated and jointly controlled companies. Any excess of the Group's share in the fair value of the identifiable net assets acquired over cost is recognised as income in the profit or loss for the period of acquisition, after reassessment of the estimated fair value of the net assets acquired.
An assessment of investments in associated and jointly controlled companies is performed when there is an indication that the asset might be impaired. Any impairment loss is disclosed in the income statement. Impairment losses recorded in prior years that are no longer justifiable, are reversed.
When the Group's share of losses exceeds the carrying amount of the investment, this is reported at nill value and recognition of losses is discontinued, unless the Group is committed beyond the value of its investment.
The Group's share in unrealized gains arising from transactions with associated and jointly controlled companies is eliminated. Unrealized losses are eliminated, but only to the extent that there is no evidence of impairment of the asset transferred.
Investments in associated and jointly controlled companies are disclosed in Note 6.
The excess of the cost of acquisition of investments in group, jointly controlled and associated companies over the Group's share in the fair value of the assets and liabilities of those companies at the date of acquisition is shown as Goodwill (Note 12) or as Investments in associated and jointly controlled companies (Note 6). The excess of the cost of acquisition of investments in foreign companies over the fair value of their identifiable assets and liabilities at the date of acquisition is calculated using the functional currency of each of those companies. Translation to the Group's currency (Euro) is made using the closing exchange rate. Exchange rate differences arising from this translation are disclosed in Currency Translation Reserves.
Goodwill is not amortised, but is subject to impairment tests on an annual basis. The recoverable amount is determined based on the business plans used in the management of the Group or on valuation reports prepared by independent entities. Impairment losses identified in the period are disclosed in the income statement under Provisions and impairment losses, and may not be reversed.
Any excess of the Group's share in the fair value of identifiable assets and liabilities in Group, jointly controled and associated companies over costs, is recognised as income in the profit and loss for the period, at the date of acquisition, after reassessment of the fair value of the identifiable assets and liabilities acquired.
Goodwill arising from acquisitions made prior to the date of transition to IFRS (1 January 2004) is stated using the carrying amounts, net of accumulated amortisation, calculated in accordance with generally accepted accounting principles in Portugal, adjusted for intangible assets which do not meet IFRS criteria, and is subject to impairment tests. Impacts of these adjustments were recorded in Retained earnings, in accordance with IFRS 1. Goodwill arising from foreign companies was recalculated retrospectively using the functional currency of each such company. Exchange rate differences generated in the translation are also disclosed as Retained earnings (IFRS 1).
Assets and liabilities denominated in foreign currencies in the individual financial statements of foreign companies are translated to euro using exchange rates at the balance sheet date. Profit and loss and cash flows are converted to euro using the average exchange rate for the period. Exchange rate differences originated after 1 January 2004 are recorded as equity under Currency Translation Reserves. Exchange rate differences that originated prior to 1 January 2004 (date of transition to IFRS) were written-off through Retained earnings.
Goodwill and fair value adjustments arising from the acquisition of foreign companies are recorded as assets and liabilities of those companies and translated to euro using exchange rates at the balance sheet date.
Whenever a foreign company is sold, accumulated exchange rate differences are recorded in the income statement as a gain or loss on the disposal, in the caption Investment income.
Exchange rates used on translation of foreign group, jointly controlled and associated companies are listed below:
| 31.12.2008 | 31.12.2007 | ||||
|---|---|---|---|---|---|
| End of period | Average of period | End of period | Average of period | ||
| Pound Sterling | 1.04987 | 1.25890 | 1.36361 | 1.46209 | |
| Brazilian Real | 0.30830 | 0.37657 | 0.38516 | 0.37577 |
Source: Bloomberg
Tangible assets acquired up to 1 January 2004 (transition date to IFRS) are recorded at acquisition cost, or revalued acquisition cost, in accordance with generally accepted accounting principles in Portugal until that date, net of depreciation and accumulated impairment losses.
Tangible assets acquired after that date are recorded at acquisition cost, net of depreciation and accumulated impairment losses.
Depreciation is calculated on a straight line basis, as from the date the asset is first used, over the expected useful life for each class of assets and disclosed in Amortisation and Depreciation in the consolidated profit and loss account.
Impairment losses in tangible assets are accounted for in the year when they are estimated, and are disclosed in Impairmant Losses in the consolidated profit and loss account, except for those relating to stocks whose impairment is recorded in Cost of goods sold and materials consumed.
The depreciation rates used correspond to the following estimated useful lives:
| Years |
|---|
| 10 to 50 |
| 10 to 20 |
| 4 to 5 |
| 4 to 8 |
| 3 to 10 |
| 4 to 8 |
Maintenance and repair costs related to tangible assets are recorded directly as expenses in the year they are incurred.
Tangible assets in progress represent fixed assets still under construction/development and are stated at acquisition cost net of impairment losses. These assets are depreciated from the date they are completed or start being used.
Gains or losses on sale or disposal of tangible assets are calculated as the difference between the selling price and the carrying amount of the asset at the date of its sale/disposal. These are recorded in the income statement under either Other operational income or Other operational expenses.
Intangible assets are stated at acquisition cost, net of depreciation and accumulated impairment losses. Intangible assets are only recognised if it is probable that future economic benefits will flow from them, if they are controlled by the Group and if their cost can be reliably measured.
Expenditure on research associated with new technical know-how is recognised as an expense recorded in the income statement when it is incurred.
Expenditure on development is recognised as an intangible asset if the Group demonstrates the technical feasibility and its intention to complete the asset, its ability to sell or use it and the probability that the asset will generate future economic benefits. Expenditure on development which does not fulfil these conditions is recorded as an expense in the period in which it is incurred.
Internal costs associated with maintenance and development of software are recorded as an expense in the period in which they are incurred. Only costs directly attributable to projects for which the generation of future economic benefits is probable are capitalized as intangible assets.
Amortisation is calculated on a straight line basis, as from the date the asset is first used, over the expected useful life which normally is between 3 and 6 years, and are disclosed in Amortisation and Depreciation in the consolidated profit and loss account.
Lease contracts are classified as (i) a finance lease if the risks and rewards incidental to ownership lie with the lessee and (ii) as an operating lease if the risks and rewards incidental to ownership do not lie with the lessee.
Whether a lease is classified as a finance or an operating lease depends on the substance of the transaction rather than the form of the contract.
Tangible assets acquired through finance lease contracts are recorded as assets and corresponding obligations as liabilities in the balance sheet. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. Both the finance charge and the depreciation expense for depreciable assets are taken to the income statement in the period in which they are incurred.
Lease payments under operating lease contracts are recognised as an expense on a straight line basis over the lease term.
Where the Group acts as a lessor in operating leases, the value of assets leased is maintained in the Group's balance sheet and related rents are taken to the profit and loss account on a straight line basis over the period of the lease.
Assets are assessed for impairment at each balance sheet date whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the income statement under Provisions and impairment losses.
The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction less the costs of disposal. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if this is not possible, for the cash-generating unit to which the asset belongs.
Reversal of impairment losses recognised in prior years is only recorded when it is concluded that the impairment losses recognised for the asset no longer exist or have decreased. This analysis is performed whenever there is an indication that the impairment loss previously recognised has been reversed. The reversal is recorded in the income statement as Operational income. However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for that asset in prior years.
Borrowing costs are normally recognised as an expense in the period in which they are incurred.
Borrowing costs directly attributable to the acquisition, construction or production of tangible and real estate projects included under stocks are capitalised as part of the cost of the qualifying asset. Borrowing costs are capitalised from the time of preparation of the activities to construct or develop the asset up to the time the production or construction is complete or when asset development is interrupted. Any income earned on funds temporarily invested pending their expenditure on the qualifying asset, is deducted from the borrowing costs that qualify for capitalisation.
Non-current assets (or disposal groups) are classified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case the sale must be highly probable and the asset or disposal group is available for immediate sale in its present condition. In addition, the sale should be expected to occur within 12 months from the date of classification.
Non-current assets (or disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. These assets are not depreciated.
Goods for sale and raw materials are stated at the lower of cost, net of discounts obtained or estimated, and net realisable value. Cost is determined on a weighted average basis. Goods for sale include mostly land for real estate developments.
Finished goods and work in progress are stated at the lower of the weighted average production cost or net realisable value. Production cost includes cost of raw materials, labour costs and overheads (including depreciation of production equipment based on normal levels of activity). Work in progress includes mostly resorts and real estate developments for sale in the normal course of business.
Net realisable value is the estimated selling price less estimated costs of completion and estimated costs necessary to make the sale.
Differences between cost and net realisable value, if negative, are shown as operating expenses under Cost of sales or Changes in stocks of finished goods and work in progress, depending on whether they refer to goods for sale and raw materials or finished goods and work in progress.
Income and costs associated with construction contracts are recorded using the stage of completion method. Under this method, at the end of each period, income and expenses are recognised by reference to the stage of completion of the contract activity. The stage of completion is determined by the ratio between costs incurred until the closing balance sheet date and total estimated contract costs. The difference between income determined by this ratio and total amounts invoiced is recorded in Other current assets or Other current liabilities.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recorded only to the extent of the amount of contract costs incurred that will probably be recoverable. Contract costs are recorded as expenses in the period in which they are incurred.
Revenue arising from contract variations, claims and completion premiums is recorded when these are agreed with the customer, or when negotiations are at an advanced stage and it is probable that these will be favourable to the Group.
Provisions are recognised when, and only when, the Group has an obligation (legal or constructive) resulting from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted at the balance sheet date to reflect the best estimate as of that date.
Restructuring provisions are recorded by the Group whenever a formal and detailed restructuring plan exists and that plan has been communicated to the parties involved.
Financial instruments were classified in the categories presented in the consolidated balance sheet as detailed in Note 9.
Investments are classified into the following categories:
Held to maturity investments are classified as non-current assets unless they mature within 12 months of the balance sheet date. Investments classified as held to maturity have defined maturities and the Group has the intention and ability to hold them until the maturity date.
Investment measured at fair value through profit or loss include investments held for negotiation, which the Group acquires with a view to their disposal within a short time period. They are shown in the consolidated balance sheet as Current Investments.
The Group classifies as investments available for sale, those which are not considered as investments measured at fair value through profit or loss nor as investments held to maturity. These assets are classified as non current assets, unless there is an intention to dispose of them in a period of less than 12 months from the balance sheet date.
All purchases and sales of investments are recognised on the trade date, independently of the settlement date.
Investments are initially measured at cost, which is the fair value of the consideration paid for them, including transaction costs.
Available-for-sale investments and investments measured at fair value through profit or loss are subsequently carried at fair value, without any deduction for transaction costs which may be incurred on sale, by reference to their quoted market price at the balance sheet date. Investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured, are stated at cost, less impairment losses.
Gains or losses arising from a change in fair value of available-for-sale investments are recognised directly in equity, under Fair value reserve, included in Reserves and retained earnings until the investment is sold or otherwise disposed of, or until it is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is transferred to net profit or loss for the period.
Changes in the fair value of investments measured at fair value through profit or loss are included in the consolidated income statement for the period.
Held to maturity investments are carried at amortised cost using the effective interest rate, net of capital reimbursements and interest income received.
Loans and accounts receivable are booked at amortised cost using the effective interest method less any impairment losses.
Financial income is calculated using the effective interest rate, except for amounts receivable within a very short time period, for which the income receivable is immaterial.
These financial investments arise when the Group supplies money, goods or services directly to a debtor without the intention to negotiate the debt involved. Loans and accounts receivable are classified as current assets, expect in cases where the maturity date is more than 12 months from the date of the balance sheet, when they are classified as non current assets. These financial investments are included in the classes identified in Note 9.
Amounts owing from "Customers" and "other third party debts" are booked at their nominal value and shown in the consolidated balance sheet less any impairment losses, recognised in the caption Losses due to impairment in receivables in order to reflect their net realisable value. These captions, when current, do not include interest, since the discount impact is considered immaterial.
Impairment losses are booked following the events that have taken place, which indicate objectively and in a quantifiable manner that the whole or a part of the debt will not be received. For this, each Group company takes into consideration market information which demonstrates that:
Recognised impairment losses equal the difference between the amount receivable in the accounts and the related present value of future estimated cash flows, discounted at the initial effective interest rate, which is considered to be zero, since the discount impact is considered immaterial, in those cases where a receipt is expected within less than a year.
Financial liabilities and equity instruments are classified and accounted for based on their contractual substance, independently from the legal form they assume.
Loans are recorded as liabilities at their nominal value, net of up-front fees and commissions related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis, in accordance with the accounting policy defined in Note 2.16.. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.
Accounts payable are stated at their nominal value, since they do not bear interest and the discount impact is considered immaterial.
The Group uses derivatives in the management of its financial risks, only to hedge such risks and/or to optimise funding costs.
Derivatives classified as cash flow hedge instruments are used by the Group mainly to hedge interest rate risks on loans obtained. Conditions established for these cash flow hedge instruments are identical to those of the corresponding loans in terms of base rates, calculation rules, rate setting dates and repayment schedules of the loans and for these reasons they qualify as perfect hedges. Inefficiences that may exist are shown in the caption Net Financial Income/Expenses in the consolidated income statement.
The Group's criteria for classifying a derivative instrument as a cash-flow hedge instrument include:
Cash-flow hedge instruments used by the Group to hedge the exposure to changes in interest rate of its loans are initially accounted for at cost and subsequently adjusted to their corresponding fair value. Changes in fair value of these cash flow hedge instruments are recorded in equity under the caption Hedging reserves, and then recognised in net financial income/expenses in the income statement over the same period in which the hedged instrument affects income statement.
Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded in equity under the caption Hedging reserve are transferred to profit or loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement.
In those cases in which derivative instruments, in spite of having been negotiated with the abovementioned objectives (essencialy derivatives in the form of interest rate options), in relation to which the company did not apply hedge accounting, are initially recorded at cost, if any, and subsequently measured at fair value. The changes in value resulting from the measurement at fair value, calculated using especially designed software tools, are included in Net financial charges in the consolidated income statement.
When embedded derivatives exist, they are accounted for as separate derivatives when the risks and the characteristics are not closely related to economic risks and characteristics of the host contract, and this is not stated at fair value, and unrealised gains or losses recorded in the consolidated income statement.
In specific situations,the Group may use interest rate derivatives with the goal of obtaining fair value cover. In these situations, derivatives are booked at their fair value in the consolidated financial statements. In situations in which the derivative involved is not measured at fair value (in particular borrowings that are measured at amortised cost), the effective share of cover will be adjusted to the accounting value of the derivative covered through the profit and loss account.
Equity instruments are those that represent a residual interest on the Group's net assets and are recorded at the amount received, net of costs incurred with their issuance.
Cash and cash equivalents include cash on hand, cash at banks, term deposits and other treasury applications which mature in less than three months and are subject to insignificant risk of change in value.
In the consolidated statement of cash flows, cash and cash equivalents also include bank overdrafts, which are included in the balance sheet caption current bank loans.
Share-based payments result from Deferred Performance Bonus Plans that are referenced to the Sonae Capital, SGPS, SA share price and vest within a period of 3 years after being granted.
Share-based payment liabilities are measured at fair value on the date they are granted (normally in March of each year) and are subsequently remeasured at the end of each reporting period, based on the number of shares or share options granted and the corresponding fair value at the closing date. These obligations are stated as Staff costs and Other liabilities, and are recorded on a straight-line basis, between the date the shares are granted and their vesting date, taking into consideration the time elapsed between these dates, when the Group has the choice to settle the transaction in cash.
Contingent liabilities are not recorded in the consolidated financial statements. Instead they are disclosed in the notes to the financial statements, unless the probability of a cash outflow is remote, in which case, no disclosure is made.
Contingent assets are not recorded in the consolidated financial statements but disclosed when future economic benefits are probable.
The tax charge for the year is determined based on the taxable income of companies included on consolidation and considers deferred taxation.
Current income tax is determined based on the taxable income of companies included on consolidation, in accordance with the tax rules in force in the respective country of incorporation.
Deferred taxes are calculated using the balance sheet liability method, reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are calculated and annually remeasured using the tax rates that have been enacted or substantively enacted and therefore are expected to apply in the periods when the temporary differences are expected to reverse.
Deferred tax assets are recognised only when it is probable that sufficient taxable profits will be available against which the deferred tax assets can be used, or when taxable temporary differences are recognised and expected to reverse in the same period. At each balance sheet date a review is made of the deferred tax assets recognised, which are reduced whenever their future use is no longer probable.
Deferred tax assets and liabilities are recorded in the income statement, except if they relate to items directly recorded in equity. In these cases the corresponding deferred tax is recorded in equity.
Revenue from the sale of goods is recognised in the income statement when the risks and benefits have been transferred to the buyer and the amount of the revenue can be measured reasonably. Sales are recognised net of sales taxes and discounts and other expenses arising from the sale, and are measured as the fair value of the amount received or receivable.
Revenue from services rendered is recognised in the income statement taking into consideration the stage of completion of the transaction at the balance sheet date.
Dividends are recognised as income in the year they are attributed to the shareholders.
Income and expenses are recorded in the year to which they relate, independently of the date of the corresponding payment or receipt. Income and expenses for which their real amount is not known are estimated.
Other current assets and Other current liabilities include income and expenses of the reporting year which will only be invoiced in the future. Those captions also include receipts and payments that have already occurred but will only correspond to income or expenses of future years, when they will be recognised in the income statement.
Transactions in currencies other than the Euro, are translated to Euro using the exchange rate as at the transaction date.
At each balance sheet date, all monetary assets and liabilities expressed in foreign currencies are translated to the functional currency of each foreign company at the exchange rates as at that date. All non-monetary assets and liabilities recorded at fair value and stated in foreign currencies are converted to the functional currency of each company, using the exchange rate at the date the fair value was determined.
Exchange gains and losses arising from differences between historical exchange rates and those prevailing at the date of collection, payment or the date of the balance sheet, are recorded as income or expenses of the period, except for those related to non-monetary assets or liabilities, for which adjustments to fair value are directly recorded under equity.
Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in
the consolidated financial statements. Events after the balance sheet date that are non-adjusting events are disclosed in the notes when material.
The most significant accounting estimates reflected in the financial statements are as follows:
Estimates were based on the best information available at the date of the preparation of the financial statements and on the best knowledge and experience of past and/or current events. These estimates may, however, be affected by subsequent events which are not foreseable at the present date. Changes to these estimates, which take place after the date of the financial statements, will be recognised prospectively in the income statement, in accordance with IAS 8.
The main estimates and assumptions used relating to future events included in the consolidated financial statements are desribed in the corresponding notes attached.
All business segments of the Group are identified annually. The Group has not identified secondary segments since the Group operates almost entirely in Portugal and business segments have been identified as primary segments.
Information regarding business segments identified is included in Note 48.
a) Interest Rate risk - POLICY
As a result of maintaining its debt in the consolidated balance sheet at variable rates, and the resulting cash flows from interest payments, the Group is exposed to an Euro interest rate risk.
the volatility of Group results does not depend only on the volatility of its financial results linked to the volatility of interest rates;
under normal market conditions, there is a correlation between the levels of interest rates and economic growth, with the expectation being that the impact of movements in interest rates (and the respective volatility of cash flows to service the debt) can to some extent be compensated by movements in the remaining lines of the profit and loss account, in particular by operational profits or losses;
the setting up of any form of risk cover structure has an implicit opportunity cost associated with it,
the Group policy concerning the mitigation of this risk does not establish the maintenance of any minimum proportion of fixed interest rate debt (converted to fixed rate through use of derivatives), but rather has opted for a dynamic approach to monitoring exposure, which aligns market conditions to the real exposure of the Group, in order to avoid the possibility of exposure that could have a real impact on the consolidated results of the Group.
In view of the above, the Group policy concerning this issue defines a case by case review of each potential transaction, such that any contract for derivatives must follow the following principles:
derivatives are not used for trading or speculation;
derivatives to be contracted must match exactly the underlying exposures in relation to indices to be used, refixing dates for interest rates and dates for payment of interest, and the amortisation profile of the underlying debt;
the maximum financial cost of the entire derivative and underlying exposure must always be known and limited from the date of the derivative contract, with the aim that the resulting level of costs are within the cost of funds considered in the business plans;
derivative contracts are only agreed with authorised entities, specifically Financial Institutions with a minimum Investment Grade rating, giving preference to Banking Relationship Institutions of the Group;
all transactions must be the object of competitive bids, involving at least two financial institutions;
all transactions are entered into by using market standard contracts (ISDA - International Swaps and Derivatives Association), with schedules negotiated with each one of the Institutions;
to determine the fair value of the hedging transactions, the Group uses a range of methods in accordance with market practices, namely option valuation models and discounted future cash flow models, with specific market assumptions (interest and exchange rates, volatilities, etc.) prevailing at the Balance Sheet date. Comparative quotes provided by financial institutions are also used as a valuation benchmark;
any transaction that does not comply with all of the above principles must be individually approved by the Board of Directors.
Interest rate sensitivity is based on the the following assumptions:
Changes in interest rates affect interest receivable and payable of financial instruments indexed to variable rates (interest payments, related to financial instruments not defined as hedging instruments for interest rate cash flow hedges). As a result, these instruments are included in the calculation of financial results sensitivity analysis;
Changes in market interest rates affect income and expenses related to fixed interest rate financial instruments, in cases in which these are recognised at fair value. As such, all financial instruments with fixed interest rates booked at amortised cost, are not subject to interest rate risk, as defined in IFRS 7;
In the case of instruments designated as fair value hedges of interest rate risk, when changes to the fair value of the hedging instrument, which are attributable to movements in interest rates, are almost completely compensated in the financial results in the same period, these financial instruments are also considered not to be exposed to interest rate risks;
Changes in market interest rates of financial instruments which were designated as cash flow hedging instruments to cover fluctuations in payments resulting from changes in interest rates, are recorded in reserves, and are thus included in the sensitivity analysis calculation of shareholders' funds (other reserves);
Changes in market interest rates of interest rate derivatives, which are specified as being part of hedging relationships as defined in IAS 39, affect the results of the company (net gain/loss resulting from the revaluation of the fair value of financial instruments), and are thus included in the calculation of profit and loss sensitivity;
Changes in the fair value of derivatives and other financial assets and liabilities are estimated by calculating the discounted present value of future cash flows at existing market interest rates at the end of each year, and assuming a parallel variation in interest rate trends;
The sensitivity analysis is applied to all financial instruments existing at the end of the period.
Given the above mentioned assumptions, if interest rates of financial instruments denominated in euro had been 0.75 percentage points higher/lower, the consolidated net profit before tax of the Group as at 31 December 2008 would have been lower by around 1,385,930.37 and higher 1,428,477.87 euro, respectively (as at 31 December 2007 they would have been higher/lower by around 1,266,881.40 euro). The equity impact of the interest rate sensitivity analysis as at 31 December 2008 would have been lower/higher by around 0 euro (as at 31 December 2008 the impact would have been lower/higher by around 0 euro).
The Sonae Capital Group, as a Group mainly operating in the Iberian peninsula, has an immaterial exposure to exchange rate risk.
In relation to translation risks, given that almost all of shareholders' funds and loans to affiliates are denominated in euro, there is no significant exposure to this risk.
In relation to transaction risks, whenever exposure arises in this area, the risk is mainly managed through forward exchange rate contracts, in order to eliminate the volatility of forward exchange rate fluctuations, and thus increase cash flow certainty. From time to time, and if the amounts involved and degree of uncertainty are relevant, the Company, with approval from the Board of Directors, may use other options.
In view of the low volume of balances in foreign currency, no exchange rate sensitivity analysis were carried out.
The Group is exposed to risks arising from the value of investments made in financial shareholdings. However, these investments are in general made with strategic objectives in mind and not for current trading.
Credit risks at Sonae Capital arisis mainly from (i) debts from customers relating to operational activity, (ii) its relationships with financial institutions in the course of its day to day business activity, and (iii) the risk of non compliance by business counterparts in portfolio transactions.
a. the specific profiles of customers of each business,
b. the careful determination of appropriate credit limits, based on the one hand on the customer's profile and on the other on the nature of business, avoiding excessive concentration of credit, and thus minimising its exposure to this risk;
c. regular follow up of customers' accounts;
d. the setting up of devolved processes of granting credit, and the segregation of administrative procedures from decision making processes;
e. the use of legal means necessary to recover debts.
-Financial Institutions: The credit risk is linked to possible non compliance by Financial Institutions, to which the Group is contractually bound, in its normal operational activity, term deposits, cash balances and derivatives.
To mitigate this risk, the Group:
d. Regularly monitors total exposures with each counterpart, in order to guarantee compliance with the policy established.
Shareholding Buy/Sale transactions: In the course of its business, the Group is exposed to the credit risk of counterparts with whom it agrees transactions concerning investments in shareholdings. In these cases, the means used to mitigate risks are determined on a one on one basis, in order to take into account the specifics of the transaction, with the constant supervision of the Board of Directors. Despite the variability of the means used, there exists always the possibility of using normal market methods, namely carrying out due diligences, obtaining financial information concerning the counterpart in question, or the pledging of an asset which is released when the financial transaction has been completed.
The objective of liquidity risk management is to ensure at any given moment that the Group has the financial capability under favourable market conditions to: (i) comply with its payment obligations when these fall due and (ii) ensure in a timely manner the appropriate financing for the development of its businesses and strategy.
To that end, the Group aims at maintaining a flexible financial structure, so that the process of managing liquidity within the Group inlcudes the following key aspects:
Centralised liquidity management (cash surpluses and needs) at the holding company level, seeking to optimise the finance function in the Group;
Financial planning based on cash flow forecasts, both at an individual company and consolidated levels, and for different time periods (weekly, monthly, annual and multi year);
Short and long term financial control systems (based on Treasury and Cash Management systems), which allow in a timely manner to identify variances, anticipate financing needs and identify refinancing opportunities;
Diversification of sources of financing and counterparts;
Spread of debt maturity dates, aiming at avoiding excessive concentration, at specific points in time, of debt repayments;
Contracts with relationship Banks, of committed credit lines (of at least one year) and Commercial Paper Programmes, with cancellation clauses which are sufficiently comfortable and prudent, seeking to obtain an appropriate level of liquidity while optimising the amount of commitment commissions payable.
During the period there were no changes in accounting policies or prior period errors.
Group companies included in the consolidated financial statements, their head offices and percentage of share capital held by the Group as at 31 December 2008 and 2007 are as follows:
| Percentage of capital held | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | ||||||||
| COMPANY | Head Office | Direct | Total | Direct | Total | ||||
| Sonae Capital SGPS, SA | Maia | HOLDING | HOLDING | HOLDING | HOLDING | ||||
| Tourism | |||||||||
| 4) | Águas Furtadas - Imobiliária, SA | a) | Matosinhos | 100.00% | 87.74% | 100.00% | 100.00% | ||
| Aqualuz - Turismo e Lazer, Lda | a) | Lagos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Aquapraia-Investimentos Turísticos, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| 4) | Azulino Imobiliária, SA | a) | Matosinhos | 100.00% | 87.74% | 100.00% | 100.00% | ||
| Bloco Q-Sociedade Imobiliária, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Bloco W-Sociedade Imobiliária, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Casa da Ribeira - Hotelaria e Turismo, SA | a) | Marco de Canaveses | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Centro Residencial da Maia,Urban., SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Cinclus Imobiliária, SA | a) | Porto | 100.00% | 87.74% | 100.00% | 100.00% | |||
| Country Club da Maia-Imobiliaria, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Empreend.Imob.Quinta da Azenha, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Fundo de Investimento Imobiliário Fechado Imosede |
a) | Maia | 51.00% | 51.00% | 57.84% | 57.84% | |||
| Golf Time - Golfe e Inv.Turisticos, SA | a) | Porto | 75.00% | 75.00% | 75.00% | 75.00% | |||
| Imoareia Investimentos Turisticos, SGPS, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imobiliária da Cacela, SA | a) | Matosinhos | 100.00% | 87.74% | 100.00% | 100.00% | |||
| Imoclub-Serviços Imobiliários, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imodivor - Sociedade Imobiliária, SA | a) | Maia | 100.00% | 87.74% | 100.00% | 100.00% | |||
| Imoferro-Soc.Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imohotel-Emp.Turist.Imobiliários, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imopenínsula - Sociedade Imobiliária, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imoponte-Soc.Imobiliaria, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imoresort - Sociedade Imobiliária, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Imosedas-Imobiliária e Serviços, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Implantação - Imobiliária, SA | a) | Matosinhos | 100.00% | 87.74% | 100.00% | 100.00% | |||
| Insulatroia - Sociedade Imobiliária, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Investalentejo, SGPS, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Marimo -Exploração Hoteleira Imobiliária, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Marina de Troia, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Marina Magic - Exploração de Centros Lúd, | a) | Lisbon | 100.00% | 100.00% | 100.00% | 100.00% | |||
| SA Marmagno-Expl.Hoteleira Imob., SA |
a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Martimope - Sociedade Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Marvero-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| 7) | Partnergiro-Empreendimentos Turisticos, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | ||
| Porturbe-Edificios e Urbanizações, SA | a) | Maia | 100.00% | 87.74% | 100.00% | 100.00% | |||
| Praedium II-Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Praedium III-Serviços Imobiliários, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Praedium-SGPS, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Prédios Privados Imobiliária, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Predisedas-Predial das Sedas, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Promessa Sociedade Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% | |||
| 7) | Promosedas-Prom.Imobiliária, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% | ||
| SC - Engenharia e Promoção Imobiliária, | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |||
| SGPS, SA | |||||||||
| Sete e Meio - Investimentos e Consultadoria, SA |
a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Sete e Meio Herdades - Investimentos Agricolas e Turismo, SA |
a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| SII - Soberana Investimentos Imobiliários, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Soconstrução, BV | a) | Amsterdam (The Netherlands) |
100.00% | 100.00% | 100.00% | 100.00% | |||
| Soira-Soc.Imobiliária de Ramalde, SA | a) | Porto | 100.00% | 87.74% | 100.00% | 100.00% | |||
| Solinca III-Desporto e Saúde, SA | a) | Lisbon | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Solinca-Investimentos Turísticos, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Solinfitness - Club Malaga, SL | a) | Malaga (Spain) | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Soltroia-Imob.de Urb.Turismo de Troia, SA | a) | Lisbon | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Sonae Turismo Gestão e Serviços, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% | |||
| Sonae Turismo - SGPS, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Sontur, BV | a) | Amsterdam (The Netherlands) |
100.00% | 100.00% | 100.00% | 100.00% |
|---|---|---|---|---|---|---|
| Sótaqua - Soc. de Empreendimentos Turisticos, SA |
a) | Maia | 100.00% | 87.74% | 100.00% | 100.00% |
| 1) Spinveste - Promoção Imobiliária, SA | a) | Porto | 87.74% | 87.74% | 100.00% | 100.00% |
| 1) Spinveste-Gestão Imobiliária SGII, SA | a) | Porto | 87.74% | 87.74% | 100.00% | 100.00% |
| Torre São Gabriel-Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| 2) Troia Market, SA | a) | Grândola | 100.00% | 100.00% | - | - |
| 2) Troia Natura, SA | a) | Grândola | 100.00% | 100.00% | - | - |
| Troiaresort - Investimentos Turisticos, SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% |
| Troiaverde-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% |
| Tulipamar-Expl.Hoteleira Imob., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% |
| Urbisedas-Imobiliária das Sedas, SA | a) | Matosinhos | 100.00% | 100.00% | 100.00% | 100.00% |
| Venda Aluga-Sociedade Imobiliária, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| 3) Vistas do Freixo-Emp.Tur.imobiliários,SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| World Trade Center Porto, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Spred | ||||||
| Atlantic Ferries - Traf.Loc.Flu.e Marit., SA | a) | Grândola | 100.00% | 100.00% | 100.00% | 100.00% |
| Box Lines Navegação, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Contacto Concessões, SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| 4) Contacto - Sociedade de Construções, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Cronosaúde – Gestão Hospitalar, SA | a) | Porto | 100.00% | 50.00% | 100.00% | 50.00% |
| Edifícios Saudáveis Consultores - Ambiente e 2) |
a) | Porto | 100.00% | 100.00% | - | - |
| Energia em Edifícios, S.A. | ||||||
| 6) Elmo SGPS, SA | a) | Maia | 60.00% | 60.00% | - | - |
| Friengineering, SA | a) | São Paulo (Brazil) | 100.00% | 70.00% | 100.00% | 70.00% |
| Inparvi SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| 2) Integrum-Edificios Sustentáveis, SA | a) | Maia | 100.00% | 100.00% | - | - |
| Integrum-Serviços Partilhados, SA Invsaúde - Gestão Hospitalar, SA |
a) a) |
Maia Maia |
100.00% 100.00% |
70.00% 50.00% |
100.00% 100.00% |
70.00% 50.00% |
| 5) Leroy Gabon, SA | a) | Libreville (Gabon) | 99.99% | 59.99% | - | - |
| PJP - Equipamento de Refrigeração, Lda | a) | Matosinhos | 100.00% | 70.00% | 100.00% | 70.00% |
| 5) Placage d'Okoumé du Gabon, SA | a) | Libreville (Gabon) | 99.88% | 59.93% | - | - |
| 5) Plysorol, SAS | a) | Niort (France) | 100.00% | 60.00% | - | - |
| Saúde Atlântica - Gestão Hospitalar, SA | a) | Maia | 50.00% | 50.00% | 50.00% | 50.00% |
| SC Insurance Risks Services, SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| Selfrio,SGPS, SA | a) | Matosinhos | 70.00% | 70.00% | 70.00% | 70.00% |
| Selfrio-Engenharia do Frio, SA | a) | Matosinhos | 100.00% | 70.00% | 100.00% | 70.00% |
| Sistavac-Sist.Aquecimento,V.Ar C., SA | a) | Matosinhos | 100.00% | 70.00% | 100.00% | 70.00% |
| SKK-Central de Distr., SA | a) | Porto | 100.00% | 70.00% | 100.00% | 70.00% |
| SKKFOR - Ser. For. e Desen. de Recursos, SA |
a) | Maia | 100.00% | 70.00% | 100.00% | 70.00% |
| SMP-Serv. de Manutenção Planeamento, SA | a) | Matosinhos | 100.00% | 70.00% | 100.00% | 70.00% |
| Société de Tranchage Isoroy SAS | a) | Honfleur (France) | 100.00% | 100.00% | 100.00% | 100.00% |
| Société des Essences Fines Isoroy | a) | Honfleur (France) | 100.00% | 100.00% | 100.00% | 100.00% |
| Sopair, SA | a) | Madrid (Spain) | 100.00% | 70.00% | 100.00% | 70.00% |
| Spinarq, SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Spred SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| Textil do Marco, SA | a) | Marco de Canaveses | 90.37% | 90.37% | 90.37% | 90.37% |
| Others | ||||||
| DMJB, SGPS, SA | a) | Maia | 100.00% | 100.00% | 100.00% | 100.00% |
| Interlog-SGPS, SA | 98.98% | 98.98% | 100.00% | 100.00% | ||
| Pargeste SGPS, SA | a) | Lisbon | ||||
| Maia | 89.99% | 89.99% | 89.99% | 89.99% | ||
| Rochester Real Estate, Ltd | a) | Kent (U.K.) | 100.00% | 100.00% | 100.00% | 100.00% |
| SC-Consultadoria,SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| SC-S.G.P.S., SA | a) | Porto | 100.00% | 100.00% | 100.00% | 100.00% |
| Sonae Financial Participations, BV | a) | Amsterdam (The Netherlands) |
100.00% | 100.00% | 100.00% | 100.00% |
a) Majority of voting rights;
1) Sale of 12.25% of the share capital on 31 March 2008.
2) Company incorporated in the period.
3) Company included in the Spred segment in the last period.
4) Company sold in the period;
5) Control of the company regained in June 2008 and loss of the control in November 2008, due to the begining of rehabilitation proceedings
6) Control of the company and of its addiliates in June 2008 and loss of the control in November 2008, due to the begining of rehabilitation proceedings
7) Company liquidated in the period.
These group companies are consolidated using the full consolidation method as described in Note 2.2.a).
Associated and jointly controlled companies included in the consolidated financial statements, their head offices and the percentage of share capital held by the Group as at 31 December 2008 and 2007 are as follows:
| Percentage of capital held | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | Book Value | ||||||
| COMPANY | Head Office | Direct | Total | Direct | Total | 31.December.2008 | 31.December.2007 | |
| Tourism | ||||||||
| Andar - Sociedade Imobiliária, SA | Maia | 50.00% | 50.00% | 50.00% | 50.00% | 902,597 | - | |
| Sociedade de Construções do Chile, SA | Lisbon | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| Sociedade Imobiliária Troia - B3, SA | Grândola | 20.00% | 20.00% | 20.00% | 20.00% | 448,236 | 450,631 | |
| Vastgoed One - Sociedade Imobiliária, SA | Maia | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| Vastgoed Sun - Sociedade Imobiliária, SA | Maia | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| Spred | ||||||||
| 1) 2) CarPlus – Comércio de Automóveis, SA | Vila Nova de Gaia | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| Cinclus-Plan. e Gestão de Projectos, SA | Porto | 25.00% | 25.00% | 25.00% | 25.00% | 622,210 | 567,259 | |
| Change, SGPS, SA | Porto | 50.00% | 50.00% | 50.00% | 50.00% | 1,698,566 | 2,035,846 | |
| 1) 2) Choice Car - Comércio de Automóveis, SA | Porto | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| 2) | Choice Car SGPS, SA | Maia | 50.00% | 50.00% | 50.00% | 50.00% | - | 3,750,798 |
| Etablissement A. Mathe, SA | France | 27.74% | 27.74% | 27.74% | 27.74% | - | 31,937 | |
| 1) 2) | Finlog - Aluguer e Comércio de Automóveis, SA |
Matosinhos | 100.00% | 50.00% | 100.00% | 50.00% | - | - |
| 1) 2) Guerin – Rent a Car (Dois), Lda | Lisbon | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| Lidergraf - Artes Gráficas, Lda | Vila de Conde | 24.50% | 24.50% | 24.50% | 24.50% | 475,434 | 813,764 | |
| 1) 2) Luso Assistência - Gestão de Acidentes, SA | Porto | 100.00% | 50.00% | 100.00% | 50.00% | - | - | |
| Norscut - Concessionária de Scut Interior Norte, SA |
Lisbon | 36.00% | 36.00% | 25.00% | 25.00% | - | 1,547,478 | |
| Operscut - Operação e Manutenção de Auto estradas, SA |
Lisbon | 15.00% | 15.00% | 15.00% | 15.00% | 24,000 | 24,000 | |
| Sodesa, SA | Lisbon | 50.00% | 50.00% | 50.00% | 50.00% | - | 482,661 | |
| TP - Sociedade Térmica, SA | Porto | 50.00% | 50.00% | 50.00% | 50.00% | 10,711,605 | 9,281,288 | |
| Total (Note 13) | 14,882,648 | 18,985,662 |
1) Companies owned by Choice Car SGPS, SA.
2) Associated companies sold in the period.
Nil balances shown result from the reduction to acquisition cost of amounts determined by the equity method, discontinuing the recognition of its part of aditional losses under the terms of IAS 28.
Associated and jointly controlled companies are consolidated using the equity method.
As at 31 December 2008 and 2007, aggregate values of main financial indicators of associated and jointly controlled companies can be analysed as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Total Assets | 1,475,404,966 | 1,242,669,996 | |
| Total Liabilities | 1,413,132,523 | 1,139,976,914 | |
| Income | 200,894,684 | 239,497,012 1) | |
| Expenses | 202,257,996 | 236,175,541 2) | |
1) Includes income related with Choice Car, SGPS, SA and its subsidiaries in the amount of 138,089,074 euro.
2) Includes costs releted with Choice Car, SGPS, SA and its subsidiaries in the amount of 138,570,628 euro.
During the periods ended 31 December 2008 and 2007, movements in investments in associated companies may be summarised as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Investment in associated companies | |||
| Opening balance as at 1 January | 18,985,662 | 14,932,898 | |
| Acquisitions in the period | 4,938,936 | 5,985,283 | |
| Disposals in the period | (3,140,129) | - | |
| Equity method effect | (9,239,994) | (1,634,249) | |
| Transfers | 3,338,173 | (298,270) | |
| Closing balance as at 31 December | 14,882,648 | 18,985,662 | |
| Investment in associated companies | 14,882,648 | 18,985,662 |
The use of the equity method had the following impacts: -2,099,789 euro are recorded in Share of results of associated undertakings (857,332 euro at 31 December 2007) and 7,140,205 euro are recorded as Other changes in Reserves (-2,491,581euro at 31 December 2007).
Group companies, jointly controlled companies and associated companies excluded from consolidation, their head offices, percentage of share capital held and book value as at 31 December 2008 and 2007 are made up as follows:
| Percentage of capital held | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | Book Value | |||||||
| COMPANY | Reason for exclusion |
Head Office | Direct | Total | Direct | Total | 31.December.2008 | 31.December.2007 | |
| Tourism | |||||||||
| Delphinus – Soc. de Tur. e Div. de Tróia, SA | a) | Grândola | 79.00% | 79.00% | 79.00% | 79.00% | - | - | |
| 1) | Fun International Entertainement, SA | a) | Porto | - | - | 50.00% | 50.00% | - | - |
| Infratroia – Emp. de Infraest. de Troia, E.N. | a) | Grândola | 25.90% | 25.90% | 25.90% | 25.90% | 64,747 | 64,747 | |
| Spidouro S.P.E.I. Douro e Trás-os-Montes, SA |
Vila Real | 8.30% | 8.30% | 8.30% | 8.30% | - | - | ||
| Star-Viagens e Turismo, SA | Lisbon | 1.00% | 1.00% | 10.00% | 10.00% | 1 | 1,550,976 | ||
| Spred | |||||||||
| 2) | Arbiworld BV | Porto | 100.00% | 100.00% | 100.00% | 100.00% | 9,988,577 | 9,988,577 | |
| Net, SA | Lisbon | 2.80% | 2.80% | 2.80% | 2.80% | 11,132 | 11,132 | ||
| Sear - Sociedade Europeia de Arroz, SA | Santiago do Cacém | 15.00% | 15.00% | 15.00% | 15.00% | 150,031 | 150,031 | ||
| 3) | Sonae Indústria, SGPS, SA | Maia | 7.85% | 7.85% | 6.80% | 6.80% | 16,750,852 | 63,320,071 | |
| Real Change FCR - Fundo | Porto | 13.33% | 13.33% | 13.33% | 13.33% | 1,800,000 | 1,800,000 | ||
| Fundo de Capital de Risco F-HITEC | Lisbon | 7.14% | 7.14% | - | - | 250,000 | - | ||
| Outros investimentos | 332,644 | 300,739 | |||||||
| Total (Note 13) | 29,347,984 | 77,186,273 |
a) Group company, jointly controlled company or associated company for which, at the date of the issuance of these financial statements, complete financial information was not available.
1) Sale, in 2007, of the entire shareholding.
2) Company acquired in 2007, in relation to which call and put options exist, and as such was excluded from consolidation.
3) Investment measured at fair value.
Nil balances shown above result from deduction of impairment losses from related investments (Note 32).
As at 31 December 2008, the consolidated financial statements of Sonae Capital, SGPS, SA include the following contributions from the Plysorol Group and Elmo, SGPS, SA (sole shareholder of Plysorol SAS): (i) the consolidated income statement includes 3 months (third quarter of 2008) contribution from Plysorol SAS and its affiliates and 6 months (second half of 2008) contribution from Elmo, SGPS, SA; (ii) the consolidated financial position includes the financial position of Elmo, SGPS, SA as at 31 December 2008 and that of Plysorol and its affiliates as at 30 September 2008 (last available financial information).
In the 2008 consolidated financial statements, the contributions of these companies are identified as discontinued operations as a result of the following events, announced by Sonae Capital, SGPS, SA in due time:
May 2008: announcement of the negotiation for the termination of the phased disposal agreement (signed in June 2007) of Sonae Capital's shareholding in Elmo, SGPS, SA and the resulting regain of control of this company and of its affiliates;
November 2008: opening of rehabilitation proceedings of Plysorol SAS, decided by the Commercial Court of Lisieux, and the appointment of two judicial administrators with the role of assisting the management team in selling all or part of Plysorol's assets as a going concern.
The consolidated financial statements of Sonae Capital, SGPS, SA also include a loss of 9.3 million euro (recorded in Investment income - Note 42) reflecting the best estimate of the impact of deconsolidating these businesses, which will take place as soon as Sonae Capital loses definitive control over Plysorol SAS and when Elmo, SGPS, SA (sole shareholder of Plysorol SAS) is liquidated.
Main changes to the consolidation perimeter over the twelve months period ended 31 December 2008 are as follows:
| Additions | |||
|---|---|---|---|
| Percentage of capital held | |||
| 31.December.2008 | |||
| COMPANY | Head Office | Direct | Total |
| Tourism | |||
| Troia Market, SA | Grândola | 100.00% | 100.00% |
| Troia Natura, SA | Grândola | 100.00% | 100.00% |
| Edifícios Saudáveis Consultores - Ambiente e Energia em Edifícios, S.A. |
Porto | 100.00% | 100.00% | |
|---|---|---|---|---|
| 1) | Elmo SGPS, SA | Maia | 60.00% | 60.00% |
| Integrum-Edificios Sustentáveis, SA | Maia | 100.00% | 100.00% | |
| 1) | Leroy Gabon, SA | Libreville (Gabon) | 99.99% | 59.99% |
| 1) | Placage d'Okoumé du Gabon, SA | Libreville (Gabon) | 99.88% | 59.93% |
| 1) | Plysorol, SAS | Niort (France) | 100.00% | 60.00% |
1) Elmo, SGPS, SA and its affiliates were included on consolidation as a result of regaining control over these companies, as announced on 5 May 2008, with reference to financial information as at 30 June 2008, due to financial information not being available at a date closer to that of the announcement. Hence, the Consolidated Income Statements and the Consolidated Statements of Cash-Flows were affected by the inclusion of Elmo and its subsidiaries in the period between June and September of 2008 as far as the Plysorol Group is concerned, and in the period between June and December 2008 as far as Elmo is concerned.
The impact of these companies in net assets, in the correspondent dates of inclusion, was the following:
| Plysorol Group | Others | Total of Additions | |
|---|---|---|---|
| Net Assets | |||
| Tangible and intangible asstes | 29,848,791 | 151,543 | 30,000,334 |
| Other Assets | 55,880,276 | 227,743 | 56,108,019 |
| Cash and cash equivalents | 1,949,364 | 158,221 | 2,107,585 |
| Borrowings | (13,951,858) | - | (13,951,858) |
| Other liabilities | (89,525,340) | (193,408) | (89,718,748) |
| (15,798,767) | 344,099 | (15,454,668) |
The impact of these companies in the profit and loss account, in the correspondent dates of inclusion, was the following (as mentioned above the Plysorol Group did not affect the profit and loss account when it was included):
| Date of Inclusion | |
|---|---|
| Operational Income | 357,625 |
| Operational Costs | 410,806 |
| Financial Results | (692) |
| Profit before Taxation | 325,031 |
| Taxation | 93,348 |
| Net Profit | 231,683 |
Disposals in the twelve months ended 31 December 2008 were as follows:
| Percentage of capital held | ||||
|---|---|---|---|---|
| 31.December.2008 | ||||
| COMPANY | Head Office | Direct Total |
||
| Spred | ||||
| Contacto - Sociedade de Construções, SA | Porto | 100.00% | 100.00% | |
| Águas Furtadas - Imobiliária, SA | Matosinhos | 100.00% | 87.74% | |
| Azulino Imobiliária, SA | Matosinhos | 100.00% | 87.74% |
Net assets of companies sold on the date of disposal were as follows:
| CONTACTO | ÁGUAS FURTADAS | AZULINO | TOTAL | |
|---|---|---|---|---|
| 31.December.2007 | 30.June.2008 | 31.December.2008 | DISPOSALS | |
| Net assets disposed of | ||||
| Tangible and intangible asstes | 283,817 | - | - | 283,817 |
| Other Assets | 102,717,889 | 1,412,049 | 3,857,038 | 107,986,976 |
| Cash and cash equivalents | 378,941 | 149 | 10,552 | 389,642 |
| Borrowings | - | - | - | |
| Other liabilities | (69,521,129) | (1,439,345) | (57,036) | (71,017,510) |
| 33,859,518 | (27,147) | 3,810,554 | 37,642,925 | |
| Goodwill (Note 12) | 1,278,898 | - | - | 1,278,898 |
| 35,138,416 | (27,147) | 3,810,554 | 38,921,823 | |
| Gain/(loss) on sale | 46,361,584 | 103,763 | 880,728 | 47,346,075 |
| Sales price | 81,500,000 | 76,616 | 4,691,282 | 86,267,898 |
| Cash received | 81,500,000 | 76,616 | 4,691,282 | 86,267,898 |
| Amounts receivable | - | - | - | - |
| 81,500,000 | 76,616 | 4,691,282 | 86,267,898 | |
| Net cash inflow arising from the disposal | ||||
| Cash consideration received | 81,500,000 | 76,616 | 4,691,282 | 86,267,898 |
| Cash and cash equivalents disposed of | (378,941) | (149) | (10,552) | (389,642) |
| 81,121,059 | 76,467 | 4,680,730 | 85,878,256 | |
Financial Instruments, in accordance with the policies decribed in Note 2.12 were classified as follows:
| Assets not covered | |||||||
|---|---|---|---|---|---|---|---|
| Note | Borrowings and accounts receivable |
Available for sale | Investments held to maturity |
Sub-total | by IFRS 7 |
Total | |
| As at 31 December 2008 | |||||||
| Non-Current Assets | |||||||
| Other Investments | 13 | - | 29,346,460 | - | 29,346,460 | - | 29,346,460 |
| Other non-current assets | 14 | 23,488,146 | - | - | 23,488,146 | - | 23,488,146 |
| 23,488,146 | 29,346,460 | 0 | 52,834,606 | - | 52,834,606 | ||
| Current assets | |||||||
| Trade account receivables | 16 | 43,111,902 | - | - | 43,111,902 | - | 43,111,902 |
| Other debtors | 17 | 15,634,558 | - | - | 15,634,558 | - | 15,634,558 |
| Investments held for trading | 13 | - | 499 | - | 499 | - | 499 |
| Cash and cash equivalents | 21 | 17,932,940 | - | - | 17,932,940 | - | 17,932,940 |
| 76,679,400 | 499 | - | 76,679,899 | - | 76,679,899 | ||
| 100,167,546 | 29,346,959 | - | 129,514,505 | - | 129,514,505 | ||
| As at 31 December 2007 | |||||||
| Non-Current Assets | |||||||
| Other Investments | 13 | - | 77,186,273 | 77,186,273 | - | 77,186,273 | |
| Other non-current assets | 14 | 24,311,811 | - | - | 24,311,811 | - | 24,311,811 |
| 24,311,811 | 77,186,273 | 0 | 101,498,084 | - | 101,498,084 | ||
| Current assets | |||||||
| Trade account receivables | 16 | 35,322,604 | - | - | 35,322,604 | - | 35,322,604 |
| Other debtors | 17 | 24,998,713 | - | - | 24,998,713 | - | 24,998,713 |
| Other current assets | 19 | - | 499 | - | 499 | - | 499 |
| Investments held for trading | 13 | 135,206 | - | 6,722,874 | 6,858,080 | - | 6,858,080 |
| Cash and cash equivalents | 21 | 43,956,550 | - | - | 43,956,550 | - | 43,956,550 |
| 104,413,073 | 499 | 6,722,874 | 111,136,446 | - | 111,136,446 | ||
| 128,724,884 | 77,186,772 | 6,722,874 | 212,634,530 | - | 212,634,530 | ||
| Financial Liabilities | |||||||
| Note | Financial liabilities recorded at amortised cost |
Liabilities not covered by IFRS 7 |
Total | ||||
| As at 31 December 2008 | |||||||
| Non-Current Liabilities | |||||||
| Bank Loans | 24 | 33,934,516 | - | 33,934,516 | |||
| Bonds | 24 | 99,080,105 | - | 99,080,105 | |||
| Other loans | 24 | 17,217,728 | - | 17,217,728 | |||
| Other non-current liabilities | 27 | 25,062,343 | 116,537 | 25,178,880 | |||
| 175,294,692 | 116,537 | 175,411,229 | |||||
| Current Liabilities | |||||||
| Bank Loans | 21 and 24 | 126,713,960 | - | 126,713,960 | |||
| Bonds | 24 | - | - | 0 | |||
| Other loans | 24 | 2,397,469 | - | 2,397,469 | |||
| Trade creditors | 29 | 40,686,908 | - | 40,686,908 | |||
| Other current liabilities | 30 | 22,919,592 | 37,301,774 | 60,221,366 |
192,717,929 37,301,774 230,019,703
| 368,012,621 | 37,418,311 | 405,430,932 | ||
|---|---|---|---|---|
| As at 31 December 2007 | ||||
| Non-Current Liabilities | ||||
| Bank Loans | 24 | 122,710,414 | - | 122,710,414 |
| Bonds | 24 | 49,766,600 | - | 49,766,600 |
| Other loans | 24 | 18,977,172 | - | 18,977,172 |
| Other non-current liabilities | 27 | 33,636,840 | 824,495 | 34,461,335 |
| 225,091,026 | 824,495 | 225,915,521 | ||
| Current Liabilities | ||||
| Bank Loans | 24 | 7,714,042 | - | 7,714,042 |
| Bonds | 24 | 15,000,000 | - | 15,000,000 |
| Other loans | 24 | 2,036,961 | - | 2,036,961 |
| Trade creditors | 29 | 30,876,038 | - | 30,876,038 |
| Other creditors | 30 | 88,410,995 | 22,419,849 | 110,830,844 |
| Other current liabilities | 31 | 16,011,718 | - | 16,011,718 |
| 160,049,754 | 22,419,849 | 182,469,603 | ||
| 385,140,780 | 23,244,344 | 408,385,124 |
During the periods ended 31 December 2008 and 2007, movements in Tangible assets as well as in depreciation and accumulated impairment losses, are made up as follows:
| Tangible | Total | ||||||
|---|---|---|---|---|---|---|---|
| Land and | Plant and | Fixtures and | assets | Tangible | |||
| Buildings | Machinery | Vehicles | Fittings | Others | in progress | Assets | |
| Gross cost: | |||||||
| Opening balance as at 1 January 2007 | 237,568,514 | 50,025,298 | 1,868,762 | 8,020,773 | 4,289,312 | 50,615,313 | 352,387,972 |
| Changes in consolidation perimeter | - | - | - | - | - | - | - |
| Capital expenditure | 11,181,184 | 444,273 | 106,415 | 181,346 | 49,426 | 92,447,078 | 104,409,722 |
| Disposals | (5,822,521) | (17,656,970) | (182,301) | (311,549) | (56,752) | (398,344) | (24,428,437) |
| Exchange rate effect | 24,333 | 776 | - | 2,188 | 3,183 | - | 30,480 |
| Transfers | 118,646 | 30,514,988 | - | 798,266 | 73,558 | (64,044,176) | (32,538,718) |
| Opening balance as at 1 January 2008 | 243,070,156 | 63,328,365 | 1,792,876 | 8,691,024 | 4,358,727 | 78,619,871 | 399,861,019 |
| Changes in consolidation perimeter (companies in) | 25,639,505 | 44,169,128 | 4,604,870 | 2,776,460 | 7,454,547 | 662,438 | 85,306,948 |
| Changes in consolidation perimeter (companies out) | (546,763) | (3,863,705) | (51,204) | (1,457,386) | (468,783) | (333,387) | (6,721,228) |
| Capital expenditure | 28,643,889 | 358,614 | 175,938 | 142,872 | 32,873 | 89,690,250 | 119,044,436 |
| Disposals | (3,275,033) | (5,102,134) | (175,789) | (712,631) | (140,211) | (1,428,697) | (10,834,495) |
| Exchange rate effect | (63,356) | (2,815) | - | (6,075) | (10,176) | - | (82,422) |
| Transfers | (3,050,317) | 31,462,202 | 13,991 | 54,220 | (2,888,830) | (65,501,746) | (39,910,480) |
| Closing balance as at 31 December 2008 | 290,418,081 | 130,349,655 | 6,360,682 | 9,488,484 | 8,338,147 | 101,708,729 | 546,663,778 |
| Accumulated depreciation | |||||||
| and impairment losses | |||||||
| Opening balance as at 1 January 2007 | 32,501,594 | 23,987,948 | 1,227,081 | 6,027,427 | 2,785,393 | 7,438 | 66,536,881 |
| Changes in consolidation perimeter | - | - | - | - | - | - | - |
| Charge for the period | 3,184,604 | 3,017,031 | 213,767 | 653,173 | 320,661 | - | 7,389,236 |
| Disposals | (976,736) | (1,192,110) | (117,733) | (249,567) | (37,629) | (7,438) | (2,581,213) |
| Exchange rate effect | - | - | - | - | 6,287 | - | 6,287 |
| Transfers | (371,717) | (102,959) | (4,256) | (21,621) | (19,525) | - | (520,078) |
| Opening balance as at 1 January 2008 | 34,337,745 | 25,709,910 | 1,318,859 | 6,409,412 | 3,055,187 | - | 70,831,113 |
| Changes in consolidation perimeter (companies in) | 16,054,207 | 28,698,269 | 4,400,715 | 1,643,611 | 5,465,999 | - | 56,262,801 |
| Changes in consolidation perimeter (companies out) | (109,841) | (3,825,311) | (39,742) | (1,257,575) | (454,546) | - | (5,687,015) |
| Charge for the period | 9,976,997 | 6,091,153 | 383,767 | 3,543,761 | (3,154,729) | - | 16,840,949 |
| Disposals | (807,107) | (4,003,197) | (168,945) | (611,849) | (123,990) | - | (5,715,088) |
| Exchange rate effect | (10,200) | (1,244) | - | (4,463) | (7,267) | - | (23,174) |
| Transfers | 113,384 | 1,791,862 | (151,431) | (2,927,929) | 1,637,273 | - | 463,159 |
| Closing balance as at 31 December 2008 | 59,555,185 | 54,461,442 | 5,743,223 | 6,794,968 | 6,417,927 | - | 132,972,745 |
| Carrying amount | |||||||
| As at 31 de December de 2007 | 208,732,411 | 37,618,455 | 474,017 | 2,281,612 | 1,303,540 | 78,619,871 | 329,029,906 |
| As at 31 de December de 2008 | 230,862,896 | 75,888,213 | 617,459 | 2,693,516 | 1,920,220 | 101,708,729 | 413,691,033 |
Transfers from Tangible assets in progress include transfers to stocks of amounts related with real estate projects in commercialization at Troia.
The acquisition cost of Tangible assets held by the Group under finance lease contracts amounted to 23,281,476 euro and 23,206,431 euro as at 31 December 2008 and 2007, respectively, and their net book value as of those dates amounted to 21,791,402 euro and 22,827,661 euro, respectively (Note 25).
Major amounts included in the caption Tangible assets in progress, refer to the following projects:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Troia | 30,599,577 | 35,958,162 |
| Aparthotel Aqualuz refurbishment | 3,852,380 | 7,938,315 |
| Ferry boat construction | 11,699,558 | 22,533,373 |
| Troia Marina | - | 6,807,999 |
| Boavista Complex refurbishment | 2,633,744 | 2,715,381 |
| Troia Hotels refurbishment | 23,136,340 | |
| Work in progress at Maia (Business Park) | 26,398,201 | |
| Others | 3,388,929 | 2,666,641 |
| 101,708,729 | 78,619,871 |
Depreciation charge for the period includes impairment losses on tangible assets amounting to 6,193,176 euro (48,334 euro as at 31 December 2007).
During the periods ended 31 December 2008 and 2007, movements in Intangible assets as well as in amortisation and accumulated impairment losses, are made up as follows:
| Intangible | Total | ||||
|---|---|---|---|---|---|
| Patents and other | assets | Intangible | |||
| Gross cost: | similar rights | Software | Others | in progress | Assets |
| Opening balance as at 1 January 2007 | 654,033 | 2,353,747 | 36,583 | 110,346 | 3,154,709 |
| Capital expenditure | 34,198 | 27,034 | - | 83,779 | 145,011 |
| Disposals | - | (2,608) | - | - | (2,608) |
| Exchange rate effect | - | - | - | - | - |
| Transfers | 2,931 | 81,124 | - | (136,784) | (52,729) |
| Opening balance as at 1 January 2008 | 691,162 | 2,459,297 | 36,583 | 57,341 | 3,244,383 |
| Changes in consolidation perimeter (companies in) | 7,071,048 | 11,970 | - | - | 7,083,018 |
| Changes in consolidation perimeter (companies out) | (8,757) | - | - | - | (8,757) |
| Capital expenditure | 272,590 | 24,452 | 680 | 247,538 | 545,260 |
| Disposals | (24,362) | (203,845) | (2,185) | (230,392) | |
| Exchange rate effect | - | (3,263) | - | - | (3,263) |
| Transfers | (4,598,746) | 93,445 | - | (218,967) | (4,724,268) |
| Closing balance as at 31 December 2008 | 3,402,935 | 2,382,056 | 37,263 | 83,727 | 5,905,981 |
| Accumulated amortisation and impairment losses | |||||
| Opening balance as at 1 January 2007 | 329,468 | 1,806,262 | 34,705 | - | 2,170,435 |
| Charge for the period | 57,157 | 200,776 | 1,289 | - | 259,222 |
| Disposals | - | (2,173) | - | - | (2,173) |
| Exchange rate effect | - | - | - | - | - |
| Transfers | 24 | 4,193 | 588 | - | 4,805 |
| Opening balance as at 1 January 2008 | 386,649 | 2,009,058 | 36,582 | - | 2,432,289 |
| Changes in consolidation perimeter (companies in) | 6,135,009 | 2,992 | - | - | 6,138,001 |
| Changes in consolidation perimeter (companies out) | - | - | - | - | - |
| Charge for the period | 89,640 | 179,063 | 227 | 268,930 | |
| Disposals | (24,362) | (197,116) | (221,478) | ||
| Exchange rate effect | (1,744) | (1,744) | |||
| Transfers | (4,112,469) | (88,214) | 1 | (4,200,682) | |
| Closing balance as at 31 December 2008 | 2,474,467 | 1,904,039 | 36,810 | - | 4,415,316 |
| Carrying amount | |||||
| As at 31 de December de 2007 | 304,513 | 450,239 | 1 | 57,341 | 812,094 |
| As at 31 de December de 2008 | 928,468 | 478,017 | 453 | 83,727 | 1,490,665 |
During the periods ended 31 December 2008 and 2007, movements in goodwill, as well as in corresponding impairment losses, are as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Gross value: | |||
| Opening balance | 65,098,050 | 50,335,026 | |
| Acquisitions with increase in percentage ownership | - | 14,763,024 | |
| Increases - Acquisition of companies | 39,869 | - | |
| Decreases - Disposals of companies (Note 8) | (1,278,898) | - | |
| Decreases of percentage held | (790,804) | - | |
| Closing balance | 63,068,217 | 65,098,050 | |
| Accumulated impairment | |||
| losses: | |||
| Opening balance | 1,301,596 | 1,301,596 | |
| Increases (Note 30) | - | - | |
| Decreases | - | - | |
| Closing balance | 1,301,596 | 1,301,596 | |
| Carrying amount: | 61,766,621 | 63,796,454 |
The increase in the year ended 31 December 2007 relates mainly to the acquisition of the affiliated company DMJB, SGPS, SA.
A significant part of goodwill relates to real estate assets, which have been valued by an external independent valuer. This valuation has not revealed impairment issues.
During the periods ended 31 December 2008 and 2007, movements in investments, were as follows:
| 31.December.2008 | 31.December.2007 | |||
|---|---|---|---|---|
| Non current | Current | Non current | Current | |
| Investments in group companies, jointly controlled companies | ||||
| or associated companies excluded from consolidation | ||||
| Opening balance as at 1 January | 9,631,930 | - | 10,750,640 | - |
| Acquisitions in the period | 30,000 | - | 1,137,119 | - |
| Disposals in the period | (1,444,878) | - | (2,257,119) | - |
| Transfers | 1,290 | |||
| Closing balance as at 31 December | 8,217,052 | - | 9,631,930 | - |
| Accumulated impairment losses (Note 32) | (7,814,035) | - | (7,707,938) | - |
| 403,017 | - | 1,923,992 | - | |
| Investments held for sale | ||||
| Fair value as at 1 January | 96,274,392 | 499 | 86,140,706 | 499 |
| Acquisitions in the period | 3,697,828 | - | 11,788,577 | - |
| Disposals in the period | (37,000) | - | (14,071,777) | - |
| Increase/(Decrease) in fair value | (50,016,547) | - | (8,094,073) | - |
| Transfers | (20,549,379) | - | 20,510,959 | - |
| Fair value as at 31 December | 29,369,294 | 499 | 96,274,392 | 499 |
| Accumulated impairment losses (Note 32) | (424,327) | - | (21,012,111) | - |
| Fair value (net of impairment losses) as at 31 December | 28,944,967 | 499 | 75,262,281 | 499 |
| Other Investments (Note 7) | 29,347,984 | 499 | 77,186,273 | 499 |
| 29,347,984 | 499 | 77,186,273 | 499 |
Investments in group companies, jointly controlled companies or associated companies excluded from consolidation are recorded at acquisition cost less impairment losses. The Group considers that it is not reasonable to estimate a fair value for these investments as there is no visible market data. Investments held for sale include 11,788,637 euro as at 31 December 2008 and 31 December 2007, recorded at cost net of impairment losses for the reason mentioned above.
As at 31 December 2008 and 2007, Other non current assets are detailed as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Loans granted to related parties | |||
| Norscut - Concessionária de Scut Interior Norte, SA | 22,126,938 | 14,069,052 | |
| Andar - Sociedade Imobiliária, SA | - | 3,338,173 | |
| Others | 628,104 | 14,069,052 | |
| 22,755,042 | 17,697,214 | ||
| Impairment losses (Note 32) | (270,489) | (270,489) | |
| 22,484,553 | 17,426,725 | ||
| Trade accounts receivable and other debtors | |||
| Amounts receivable on sale of financial investments | - | 5,510,000 | |
| Others | 1,057,092 | 1,895,437 | |
| 1,057,092 | 7,405,437 | ||
| Impairment losses (Note 32) | (53,499) | (520,351) | |
| 1,003,593 | 6,885,086 | ||
| Total financial instruments (Note 9) | 23,488,146 | 24,311,811 | |
| Continued Operations | 23,488,146 | 24,311,811 | |
| Discontinued Operations | 343,901 | 6,821 | |
| Total Operations | 23,832,047 | 24,318,632 |
Generally, values included in Other non current assets bear interest at market rates, and it is estimated that their fair value does not significantly differ from amounts in the balance sheet.
As at 31 December 2008 and 2007, the ageing of Other non current assets can be detailed as follows:
| Other Non Current Assets | ||||
|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | |||
| Not due | 33,693 | 4,882,926 | ||
| Due but not impaired | ||||
| < 6 months | - | - | ||
| 6 - 12 months | 161,722 | - | ||
| > 1 year | 808,178 | 1,669,012 | ||
| 969,900 | 1,669,012 | |||
| Due and impaired | ||||
| < 6 months | - | - | ||
| 6 - 12 months | - | - | ||
| > 1 year | 53,499 | 853,499 | ||
| 53,499 | 853,499 | |||
| 1,057,092 | 7,405,437 | |||
| - | - |
Loans granted to related parties do not have a defined maturity, and therefore are not due.
As at 31 December 2008 and 2007, stocks are detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Raw materials and consumables | 3,289,226 | 3,995,719 |
| Goods for sale | 45,055,925 | 48,658,484 |
| By-products | - | 120 |
| Finished goods | 91,066,633 | 585,511 |
| Work in progress | 91,964,062 | 95,732,710 |
| Payments on account | 193,459 | 576,543 |
| 231,569,305 | 149,549,087 | |
| Accumulated impairment losses on Stocks (Note 32) | (8,849,994) | (7,474,353) |
| Continued Operations | 222,719,311 | 142,074,734 |
| Discontinued Operations | 18,663,103 | 1,414,928 |
| Total Operations | 241,382,414 | 143,489,662 |
Goods for sale include real estate assets amounting to 42,800,464 euro as at 31 December 2008 (43,878,180 euro as at 31 December 2007).
Work in progress includes resorts and real estate developments amounting to 83,053,572 euro as at 31 December 2008 (86,039,445 euro as at 31 December 2007).
Cost of goods sold as at 31 December 2008 and 2007 amounted to 66,745,677 euro and 50,994,100 euro, respectively, and may be detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Opening Stocks | 52,654,203 | 41,225,376 |
| Exchange rate effect | (21,864) | 14,638 |
| Changes in consolidation perimeter | (5,154,950) | - |
| Purchases | 57,891,517 | 51,275,168 |
| Adjustments | (1,974,696) | 9,557,213 |
| Closing Stocks | 48,345,151 | 52,654,203 |
| 55,049,059 | 49,418,192 | |
| Impairment losses (Note 32) | 2,040,188 | 1,683,477 |
| Reversion of impairment losses | (1,494,253) | (97,415) |
| Continued Operations | 55,594,994 | 51,004,254 |
| Discontinued Operations | 11,150,858 | (10,154) |
| Total Operations | 66,745,851 | 50,994,100 |
As at 31 December 2008 and 2007, Trade accounts receivable are detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Trade accounts receivable | ||
| Tourism | 3,471,057 | 4,112,328 |
| Spred | 38,921,105 | 29,647,904 |
| Holding | 605,554 | 906,240 |
| 42,997,715 | 34,666,472 | |
| Trade Debtors, bills receivable | 620,350 | 1,160,740 |
| Doubtful debtors | 5,203,438 | 6,149,143 |
| 48,821,503 | 41,976,355 | |
| Accumulated impairment losses on Trade Debtors (Note 32) | (5,709,601) | (6,653,751) |
| Continued Operations | 43,111,902 | 35,322,604 |
| Trade accounts receivable | 17,710,537 | 14,064,252 |
| Accumulated impairment losses on Trade Debtors (Note 32) | (5,989) | (640,421) |
| Discontinued Operations | 17,704,550 | 13,423,831 |
| Total Operations | 60,816,452 | 48,746,435 |
In the normal course of activity collection risk may arise in Trade debtors. The amounts presented on the face of the balance sheet are net of impairment losses, which were estimated based on the Group's experience and on the assessment of present economic conditions. As a result, amounts disclosed in Trade debtors reflect their fair value.
As at 31 December 2008 we do not have any reason to believe that normal collection times regarding trade accounts receivable not due for which there are no impairment losses will not be met.
As at 31 December 2008 and 2007, the ageing of Trade Accounts Receivables can be detailed as follows:
| Trade Accounts Receivable | ||||
|---|---|---|---|---|
| 31.December.2008 | Spred | Tourism | Holding and Others | Total |
| Not Due | 22,494,422 | 1,215,948 | 305,910 | 24,016,280 |
| Due but not impaired | ||||
| 0 - 30 days | 10,531,261 | 813,779 | 92,651 | 11,437,691 |
| 30 - 90 days | 4,245,838 | 325,184 | 9,147 | 4,580,169 |
| + 90 days | 2,225,633 | 412,271 | 197,846 | 2,835,750 |
| Total | 17,002,732 | 1,551,234 | 299,644 | 18,853,610 |
| Due and impaired | ||||
| 0 - 90 days | 458,273 | - | - | 458,273 |
| 90 - 180 days | 550,209 | 61,662 | - | 611,871 |
| 180 - 360 days | 26,306 | 113,574 | - | 139,880 |
| + 360 days | 942,218 | 2,496,492 | 1,302,879 | 4,741,589 |
| Total | 1,977,006 | 2,671,728 | 1,302,879 | 5,951,613 |
| Continued Operations before impairments | 41,474,160 | 5,438,910 | 1,908,433 | 48,821,503 |
| Trade Accounts Receivable | ||||
| 31.December.2007 | Spred | Tourism | Holding and Others | Total |
| Not Due | 20,560,590 | 1,822,772 | - | 22,383,362 |
| Due but not impaired | ||||
| 0 - 30 days | 6,324,929 | 167,468 | 6,492,397 | |
| 30 - 90 days | 1,847,697 | 602,723 | 2,450,420 | |
| + 90 days | 2,025,379 | 821,235 | 2,846,614 | |
| Total | 10,198,005 | 1,591,426 | - | 11,789,431 |
| Due and impaired | ||||
| 0 - 90 days | 531,501 | 3,734 | 731,912 | 1,267,147 |
| 90 - 180 days | - | 5,703 | 84,756 | 90,459 |
| 180 - 360 days | 316,298 | 161,085 | 89,573 | 566,956 |
| + 360 days | 696,218 | 3,779,903 | 1,402,879 | 5,879,000 |
| Total | 1,544,017 | 3,950,425 | 2,309,120 | 7,803,562 |
| Continued Operations before impairments | 32,302,612 | 7,364,623 | 2,309,120 | 41,976,355 |
To determine the recoverability of Trade accounts receivable, the Group reviews all changes to the credit quality of its counterparties since the date of the credit to the date of reporting consolidated financial statements. Credit risk is not concentrated because of the significant number of trade debtors. The Group thus believes that credit risk does not exceed recorded impairment losses for trade accounts receivable doubtul accounts.
In addition, the Group considers that maximum exposure to credit risk corresponds to the total of trade accounts receivable disclosed in the consolidated balance sheet.
As at 31 December 2008 and 2007, Other debtors are made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Loans granted to and other amounts to be received from related parties | ||
| Sit B3 | 2,559,886 | 2,485,702 |
| Others | 66,721 | 6,090 |
| 2,626,607 | 2,491,792 | |
| Other Debtors | ||
| Suppliers with a debtor balance | 1,343,494 | 1,258,295 |
| Sale of assets | 28,257 | 15,348 |
| Sale of financial investments | 27,256,338 | 35,056,077 |
| Others | 13,662,675 | 9,778,625 |
| 42,290,764 | 46,108,345 | |
| Other Debtors | 44,917,371 | 48,600,137 |
| Accumulated impairment losses on Other Debtors (Note 32) | (29,282,813) | (23,601,424) |
| Total financial instruments (Note 9) | 15,634,558 | 24,998,713 |
| Continued Operations | 15,634,558 | 24,998,713 |
| Other Debtors | 5,286,999 | (1,111,412) |
| Accumulated impairment losses on Other Debtors (Note 32) | (103,508) | (33,557) |
| Discontinued Operations | 5,183,491 | (1,144,969) |
| Total Operations | 20,818,049 | 23,853,744 |
As at 31 December 2008, "Accounts receivable from the sale of financial investments" includes mainly the debt arising from the sale of Elmo, SGPS, SA in 2007 (19,794,479 euro), which is subject to impairment loss (Note 32). .
Loans granted to related parties bear interest at market rates and do not have a defined maturity, not exceeding however twelve months.
As at 31 December 2008 and 2007, ageing of Other debtors can be summarised as follows:
| Other Debtors | ||||
|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | |||
| Not Due | 9,976,516 | 34,094,834 | ||
| Due but not impaired | ||||
| 0 - 30 days | 558,147 | 932,589 | ||
| 30 - 90 days | 199,949 | 566,417 | ||
| + 90 days | 2,238,415 | 5,215,623 | ||
| Total | 2,996,511 | 6,714,629 | ||
| Due and impaired | ||||
| 0 - 90 days | 6,047 | 1,484,915 | ||
| 90 - 180 days | 2,659 | - | ||
| 180 - 360 days | 84,136 | 108,948 | ||
| + 360 days | 29,224,895 | 3,705,019 | ||
| Total | 29,317,737 | 5,298,882 | ||
| Continued Operations before impairment | 42,290,764 | 46,108,345 |
As at 31 December 2008 we do not have any reason to believe that normal collection times regarding other debtors not due and for which there are no impairment losses will not be met.
Values included in Other debtors are close to their fair value.
As at 31 December 2008 and 2007, Taxes recoverable and taxes and contributions payable are made up as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Tax recoverable | |||
| Income taxation - payments on account and amounts withheld | 6,415,647 | 5,671,599 | |
| VAT | 6,696,567 | 8,371,960 | |
| Other taxes | 2,439,214 | 2,565,024 | |
| Continued Operations | 15,551,428 | 16,608,583 | |
| Discontinued Operations | 1,281,829 | 2,835,940 | |
| Total Operations | 16,833,257 | 19,444,523 | |
| Taxes and contributions payable | |||
| Income taxation | 6,069,803 | 5,381,029 | |
| VAT | 3,395,423 | 4,152,904 | |
| Staff income tax withheld | 439,664 | 336,602 | |
| Social security contributions | 998,722 | 863,037 | |
| Other taxes | 378,111 | 1,305,710 | |
| Continued Operations | 11,281,723 | 12,039,282 | |
| Discontinued Operations | 1,328,503 | 1,360,493 | |
| Total Operations | 12,610,226 | 13,399,775 |
As at 31 December 2008 and 2007, Other current assets are made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Interest receivable | 37,952 | 135,206 |
| Deferred costs - External supplies and services | 4,626,563 | 3,525,816 |
| Deferred costs - Rents | 222,003 | 230,516 |
| Other current assets | 926,790 | 2,966,542 |
| Continued Operations | 5,813,308 | 6,858,080 |
| Discontinued Operations | 2,522,313 | 2,021,564 |
| Total Operations | 8,335,621 | 8,879,644 |
Deferred tax assets and liabilities as at 31 December 2008 and 2007 can be detailed as follows, split between the different types of temporary differences:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 | |
| Amortisation and Depreciation harmonisation adjustments | 1,356,090 | - | 863,368 | 49 |
| Write off of tangible and intangible assets | 1,370,641 | 2,174,715 | - | 1,510,830 |
| Revaluation of tangible assets | - | - | 780,104 | 795,849 |
| Tax losses carried forward | 12,101,380 | 11,589,253 | - | - |
| Others | 929,804 | 353,772 | 1,520,698 | 354 |
| Continued Operations | 15,757,915 | 14,117,740 | 3,164,170 | 2,307,082 |
| Discontinued Operations | - | 203,180 | - | 5,219,288 |
| Total Operations | 15,757,915 | 14,320,920 | 3,164,170 | 7,526,370 |
During the periods ended 31 December 2008 and 2007, movements in Deferred tax are as follows:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 | |
| Opening balance | 14,320,920 | 4,742,146 | 7,526,370 | 4,923,518 |
| Effect in results: | ||||
| Amortisation and Depreciation harmonisation adjustments | (16,625) | - | 85,405 | 33 |
| Provisions and impairment losses not accepted for tax purposes | - | (116,517) | - | 941,300 |
| Write-off of tangible and intangible assets | 39,546 | 1,303,283 | - | - |
| Write-off of accruals | 575,607 | 353,771 | - | - |
| Revaluation of tangible assets | - | - | (12,828) | (54,772) |
| Tax losses carried forward | 469,119 | 8,038,237 | - | - |
| Changes in tax rates | - | - | - | - |
| Others | 427 | - | (52,885) | 1,510,830 |
| 1,068,074 | 9,578,774 | 19,692 | 2,397,391 | |
| Effect in reserves: | ||||
| Change in tax rate | - | - | ||
| Others | 572,101 | - | 837,396 | 205,461 |
| 572,101 | - | 837,396 | 205,461 | |
| Sale of group companies | (203,180) | - | (5,219,288) | - |
| Closing balance | 15,757,915 | 14,320,920 | 3,164,170 | 7,526,370 |
In accordance with the tax statements presented by companies (included in continued operations) that recorded deferred tax assets arising from tax losses carried forward, as at 31 December 2008 and 2007, and using exchange rates effective at that time, tax losses carried forward can be summarised as follows:
| 31.December.2008 | 31.December.2007 | |||||
|---|---|---|---|---|---|---|
| Tax losses carried forward |
Deferred tax assets | Time limit | Tax losses carried forward |
Deferred tax assets | Time limit | |
| With limited time use | ||||||
| Generated in 2002 | - | - | 2008 | 1,209,557 | 302,389 | 2008 |
| Generated in 2003 | 1,698,457 | 424,614 | 2009 | 9,126,348 | 2,281,587 | 2009 |
| Generated in 2004 | 3,379,654 | 844,914 | 2010 | 6,627,219 | 1,656,805 | 2010 |
| Generated in 2005 | 5,012,344 | 1,253,086 | 2011 | 7,025,798 | 1,756,449 | 2011 |
| Generated in 2006 | 11,671,794 | 2,917,948 | 2012 | 11,702,529 | 2,925,632 | 2012 |
| Generated in 2007 | 7,454,598 | 1,863,649 | 2013 | 8,743,671 | 2,185,919 | 2013 |
| Generated in 2008 | 17,206,043 | 4,316,695 | 2014 | - | - | |
| 46,422,890 | 11,620,906 | 44,435,122 | 11,108,780 | |||
| With a time limit different from the above mentioned | 1,453,780 | 480,473 | 1,453,780 | 480,473 | ||
| 1,453,780 | 480,473 | 1,453,780 | 480,473 | |||
| 47,876,670 | 12,101,379 | 45,888,902 | 11,589,253 |
As at 31 December 2008 and 2007, Deferred tax assets resulting from tax losses carried forward were re-assessed against each company's business plans, which are regularly updated, and available tax planning opportunities. Deferred tax assets have only been recorded to the extent that future profits will arise which may be offset against available tax losses or against deductible temporary differences.
As at 31 December 2008, tax losses carried forward (included in continued operations), amounting to 115,561,909 euro (115,337,098 euro as at 31 December 2007), have not originated deferred tax assets for prudential reasons.
| 31.December.2008 | 31.December.2007 | |||||
|---|---|---|---|---|---|---|
| Tax losses carried forward |
Deferred tax assets | Time limit | Tax losses carried forward |
Deferred tax assets | Time limit | |
| With limited time use | ||||||
| Generated in 2002 | - | - | 2008 | 36,487,545 | 9,121,887 | 2008 |
| Generated in 2003 | 10,708,823 | 2,677,206 | 2009 | 13,379,146 | 3,344,787 | 2009 |
| Generated in 2004 | 4,833,350 | 1,208,338 | 2010 | 5,065,719 | 1,266,430 | 2010 |
| Generated in 2005 | 8,106,023 | 2,026,505 | 2011 | 7,726,020 | 1,931,505 | 2011 |
| Generated in 2006 | 13,526,865 | 3,381,682 | 2012 | 13,437,053 | 3,359,264 | 2012 |
| Generated in 2007 | 21,860,604 | 5,465,150 | 2013 | 22,867,073 | 5,716,767 | 2013 |
| Generated in 2008 | 39,345,143 | 9,836,287 | 2014 | - | - | 2014 |
| 98,380,808 | 24,595,168 | 98,962,556 | 24,740,640 | |||
| Without limited time use | 4,660,539 | 1,553,472 | 4,849,357 | 1,616,291 | ||
| With a time limit different from the above mentioned | 12,520,562 | 3,575,667 | 11,525,185 | 3,403,077 | ||
| 17,181,101 | 5,129,139 | 16,374,542 | 5,019,368 | |||
| 115,561,909 | 29,724,307 | 115,337,098 | 29,760,008 |
As at 31 December 2008 and 2007, Cash and cash equivalents can be detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Cash at hand | 164,398 | 183,580 |
| Bank deposits | 17,318,099 | 43,040,144 |
| Treasury applications | 450,443 | 1,110,117 |
| Cash and cash equivalents on the balance sheet - Continued operations | 17,932,940 | 44,333,841 |
| Bank overdrafts - Continued Operations | (315,693) | (2,950,698) |
| Cash and cash equivalents on the balance sheet - Discontinued operations | (656,683) | |
| Cash and cash equivalents in the statement of cash-flows | 16,960,564 | 41,383,143 |
| Cash and cash equivalents on the balance sheet - Continued operations | 17,932,940 | |
| Cash and cash equivalents on the balance sheet - Discontinued oprations | 1,383,546 | |
| Cash and cash equivalents on the balance sheet | 19,316,486 | |
| Bank overdrafts - Continued Operations | (315,693) | |
| Bank overdrafts - Discontinued operations | (12,151,075) | |
| Bank Overdrafts (Note 24) | (12,466,768) |
As a result of the inclusion of Elmo and its affiliates in June 2008 and of the temporary loss of control of Elmo's affiliates after November 2008, the 2008 consolidated statement of cash-flows only included six months contribution of Elmo and three months contribution of its affiliates. Thus, the 16,960,564 euro of Cash and cahs equivalents in the statement of cash-flows includes the contributions of Elmo and its affiliates after June.
Bank overdrafts are disclosed in the balance sheet under Current bank loans.
The share capital of Sonae Capital SGPS, SA is represented by 250,000,000 ordinary shares, which do not have the right to a fixed remuneration, with a nominal value of 1 euro each.
The demerger originated a reserve in the amount of 132,638,253 euro, which has a treatment similar to that of a Legal Reserve. According to Company Law, it cannot be distributed to shareholders, unless the company is liquidated, but can be used to make good prior year losses, once other reserves have been used fully, or for capital increases.
Movements in minority interests in the periods ended 31 December 2008 and 2007 are as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Opening balance as at 1 January | 36,758,832 | 18,876,352 |
| Companies incorporated in the year | - | - |
| Acquisitions with increase in percentage ownership | 13,116,954 | 17,108,025 |
| Adjustments arising from companies excluded from consolidation | 4,375,485 | - |
| Changes resulting from currency translation | (94,458) | (22,328) |
| Others | 58,048 | (57,033) |
| Profit for the period attributable to minority interests | 3,724,330 | 853,816 |
| Closing balance as at 31 December | - | - |
| Continued Operations | 57,939,191 | 36,758,832 |
| Discontinued Operations | (8,619,778) | - |
| Total Operations | 49,319,413 | 36,758,832 |
As at 31 December 2008 and 2007, Borrowings are made up as follows:
| 31.December.2008 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Oustanding amount | Oustanding amount | |||||||
| Limit | Current | Non Current | Limit | Current | Non Current | Repayable on | ||
| Bank loans | ||||||||
| a) | Sonae Capital SGPS - commercial paper | 30,000,000 | 30,000,000 | Mar/2013 | ||||
| b) | Sonae Capital SGPS - commercial paper | 60,000,000 | 21,850,000 | Mar/2013 | ||||
| c) d) | Sonae Turismo - commercial paper | 110,000,000 | $\sim$ | ٠ | 110,000,000 | 109,999,989 | Aug/2009 | |
| e) f) SC, SGPS - commercial paper | 110,000,000 | 102,599,990 | ٠ | ч. | $\sim$ | Aug/2009 | ||
| g) | Praedium SGPS - commercial paper | . . | ٠ | $\overline{\phantom{a}}$ | 7,500,000 | 1,250,000 | $\overline{\phantom{a}}$ | Aug/2008 |
| h) | Imoferro | 6,983,171 | 122,295 | 6,529,175 | May/2027 | |||
| Invesaúde | 1,000,000 | 500,000 | 500,000 | 2,000,000 | 250,000 | 1,250,000 | Aug/2010 | |
| d) | SC-Insurance and Risk Services - commercial paper | $\overline{\phantom{a}}$ | ч. | 1,977,175 | 1,977,175 | $\sim$ | Feb/2008 | |
| Selfrio Engenharia | 4,900,000 | 1,400,000 | 3,500,000 | 3,850,000 | 1,068,750 | 2,781,250 | May/2012 | |
| Up-front fees | (65, 484) | |||||||
| Others | 48,277 | 1,578,783 | 93,474 | 2,150,000 | ||||
| 126,398,267 | 35,513,299 | 4,761,694 | 122,710,414 | |||||
| Bank overdrafts (Note 21) | 12,466,768 | 2,952,348 | ||||||
| Bank loans | 138,865,035 | 35,513,299 | 7,714,042 | 122,710,414 | ||||
| Bond Loans | ||||||||
| Sonae Capital 2007/2012 Bonds | 20,000,000 | 20,000,000 | Dec/2012 | |||||
| Sonae Capital 2007/2012 Bonds | 30,000,000 | 30,000,000 | Dec/2012 | |||||
| d) | SC-Insurance Bonds | 15,000,000 | ||||||
| SC, SGPS, S.A. 2008/2018 Bonds | 50,000,000 | Mar/2018 | ||||||
| Up-front fees | ٠ | (919, 895) | $\overline{\phantom{a}}$ | (234,000) | ||||
| Bond Loans | $\sim$ | 99,080,105 | 15,000,000 | 49,766,000 | ||||
| Other loans | 133,696 | 403,176 | 176,635 | 250,577 | ||||
| Derivatives (Note 26) | 306,449 | |||||||
| Obligations under finance leases | 1,957,324 | 16,814,552 | 1,860,326 | 18,726,595 | ||||
| 141,262,504 | 151,811,132 | 24,751,003 | 191,453,586 |
a) Commercial paper programme, with subscription guarantee, issued on 14 March 2008 and valid for a five year period.
b) Current term commercial paper programme, issued on 28 March 2008 and valid for a ten year period.
c) SC, SGPS, SA is a co-guarantor in this loan.
d) These loans were fully paid in January and February 2008.
e) Sonae Turismo, SGPS, SA is a co-guarantor in this loan.
f) Commercial paper programme issued on 29 August 2006 and valid up to 29 August 2009. An extension for an additional two years is available.
g) This loan was fully paid on 20 June 2008, before the due date.
h) This loan is guaranteed by a mortgage on the building owned by this affiliated company. This loan was fully paid on 9 May 2008.
Sonae Capital SGPS - 2007/2012 Bond Loan 1 st issue in the amount of 20,000,000 euro, with a 5 year maturity, and a sole reimbursement on 31 December 2012, except if the reimbursement is anticipated, fully or partially, which can happen on 31 December 2010.
Sonae Capital SGPS - 2007/2012 Bond Loan 2 nd issue in the amount of 30,000,000 euro, with a 5 year maturity, and a sole reimbursement on 31 December 2012.
SC, SGPS, SA - 2008/2018 Bond Loan in the amount of 50,000,000 euro, with a 10 year maturity, and a sole reimbursement on 3 March 2018, except if the reimbursement is anticipated, fully or partially, which can happen on 3 March 2016.
These bond loans bear interest every six months at 6 months Euribor interest rates plus spreads that range between 0.50% and 0.95%.
The repayment schedule of the nominal value of borrowings may be summarised as follows:
| 31.December.2008 | 31.December.2007 | |||
|---|---|---|---|---|
| Capital | Interest | Capital | Interest | |
| $N+1$ a) | 140.956.055 | 9.538.183 | 24.751.003 | 5,130,659 |
| $N+2$ | 25.569.642 | 4,879,463 | 114.359.681 | 4,293,458 |
| $N+3$ | 3.526.491 | 4,710,393 | 24,155,400 | 4,071,652 |
| $N+4$ | 31.621.778 | 4,608,497 | 3.683.383 | 2,774,451 |
| $N+5$ | 30.961.854 | 2,138,519 | 31.732.355 | 2,596,855 |
| After N+5 | 61.116.744 | 9.140.875 | 17.756.767 | 6,532,429 |
| 293.752.566 | 35.015.931 | 216.438.590 | 25.399.505 |
a) Includes amounts drawn under commercial paper programmes (Notes b) and f) above).
| 31.December.2008 | 31.December.2007 | |||
|---|---|---|---|---|
| Commitments < 1 year |
Commitments > 1 year |
Commitments < 1 year |
Commitments > 1 year |
|
| Value of available lines | ||||
| Spred | 6,122,383 | - | 4,997,606 | - |
| Tourism | 12,276,213 | - | 21,096,754 | 11 |
| Holding and Others | 31,550,010 | 15,000,000 | 16,750,000 | - |
| 49,948,607 | 15,000,000 | 42,844,360 | 11 | |
| Value of contracted lines | ||||
| Spred | 19,449,398 | 3,500,000 | 8,063,942 | 4,931,250 |
| Tourism | 12,346,754 | 22,346,754 | 110,000,000 | |
| Holding and Others | 156,000,000 | 15,000,000 | 18,727,175 | - |
| 187,796,152 | 18,500,000 | 49,137,871 | 114,931,250 |
As at 31 December 2008 and 2007, Obligations under finance leases are made up as follows:
| Obligations under finance leases | Minimum finance lease payments | Present value of minimum finance lease payments |
|||
|---|---|---|---|---|---|
| Amounts under finance leases: | 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 | |
| N+1 | 2,920,970 | 2,838,317 | 1,957,324 | 1,860,326 | |
| N+2 | 2,785,982 | 2,807,793 | 1,932,271 | 1,923,983 | |
| N+3 | 2,844,623 | 2,755,761 | 2,102,575 | 1,967,866 | |
| N+4 | 1,497,815 | 2,797,005 | 841,395 | 2,107,900 | |
| N+5 | 1,497,815 | 1,463,020 | 886,577 | 12,726,847 | |
| After N+5 | 14,072,970 | 15,231,536 | 11,051,734 | - | |
| 25,620,175 | 27,893,432 | 18,771,876 | 20,586,921 | ||
| Future Interest | (6,848,299) | (7,306,511) | |||
| 18,771,876 | 20,586,921 | ||||
| Current obligations under finance leases | 1,957,324 | 1,860,326 | |||
| Non-current obligations under finance leases | 16,814,552 | 18,726,595 |
Finance leases are contracted at market interest rates, have defined useful lives and include an option for the acquisition of the related assets at the end of the period of the contract.
As at 31 December 2008 and 2007, the fair value of finance leases is close to their book value.
Obligations under finance leases are guaranteed by related assets.
As at 31 December 2008 and 2007, the book value of assets acquired under finance leases can be detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Assets acquired under finance leases | ||
| Land and Buildings | 3,950,101 | 3,950,101 |
| Plant and machinery | 17,638,796 | 2,529,409 |
| Vehicles | 32,400 | - |
| Tools | 31,518 | 67,833 |
| Fixtures and Fittings | 138,587 | 162,215 |
| Other assets | - | - |
| Assets in progress | - | 16,118,103 |
| Total tangible assets (Note 10) | 21,791,402 | 22,827,661 |
The hedging instruments used by the Group as at 31 December 2008 were mainly interest rate options (cash-flow hedges) contracted with the goal of hedging interest rate risks on loans in the amount of 50,000,000 euro, whose net fair value was -306,449 euro. As at 31 December 2008, all derivatives are hedging derivatives.
These interest rate hedging instruments are valued at fair value as at the balance sheet date, determined by valuations made by the Group using derivative valuation calculation schedules and external valuations when these schedules do not permit the valuation of certain instruments. The determination of fair value of these financial instruments is based, for swaps, on updating on the balance sheet date the future cash-flows resulting from the difference between the fixed interest rate of the fixed leg of the derivative and the variable interest rate indexed to the variable leg of the derivative. For options, fair value is determined using the Black-Scholes model and its variants.
The risk cover principles generally used by the Group to contractually arrange hedging instruments are as follows:
The counterparts for derivatives are selected based on their financial strength and credit risk profile, with this profile being generally measured by a rating note attributed by rating agencies of recognised merit. The counterparts for derivatives are top level, highly prestigious financial institutions which are recognised nationally and internationally.
The fair value of derivatives are shown as follows:
| Assets | Liabilities | |||
|---|---|---|---|---|
| 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 | |
| Hedge accounting derivatives | - | - | - | - |
| Interest rate (Note 24) | - | - | (306,449) | - |
| Other derivatives | - | - | - | - |
| - | - | (306,449) | - |
As at 31 December 2008 and 2007 Other non current liabilities were made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Loans and other amounts payable to related parties | ||
| Plaza Mayor Parque de Ocio, SA | 2,317,828 | 2,323,820 |
| Intragroup elimination with discontinued operations | (9,443,000) | - |
| Others | 700,000 | 600,000 |
| (6,425,172) | 2,923,820 | |
| Other creditors | ||
| Creditors in the restructuring process of Torralta | 30,141,463 | 30,141,462 |
| Fixed assets suppliers | 1,337,500 | 1,387,500 |
| Others | 8,552 | 8,553 |
| 31,487,515 | 31,537,515 | |
| Pension fund responsabilities | 116,537 | - |
| Continued Operations | 25,178,880 | 34,461,335 |
| Discontinued Operations | 41,038,203 | 4,689,100 |
| Total Operations | 66,217,083 | 39,150,435 |
As at 31 December 2008 and 2007, "Other creditors" include 30,141,462 euro payable to creditors of an affiliated undertaking under the terms of a judicial restructuring process. The court decision dated 27 November 1997 (which confirms the terms approved in the creditors meeting of 23 September 1997) states that these credits will be payable 50 years from the date that the decision was confirmed (30 January 2003).
As at 31 December 2008 and 2007, the maturity of Other non current liabilities can be detailed as follows:
| 31.December.2008 | N+1 | N+2 | N+3 | N+4 | N+5 | Total |
|---|---|---|---|---|---|---|
| Fixed assets suppliers | 50,000 | 50,000 | 50,000 | 50,000 | 1,137,500 | 1,337,500 |
| Other non current creditors | - | - | - | - | 30,150,015 | 30,150,015 |
| 50,000 | 50,000 | 50,000 | 50,000 | 31,287,515 | 31,487,515 | |
| 31.December.2007 | N+1 | N+2 | N+3 | N+4 | N+5 | Total |
| Fixed assets suppliers | 50,000 | 50,000 | 50,000 | 50,000 | 1,187,500 | 1,387,500 |
| Other non current creditors | - | - | - | - | 30,150,015 | 30,150,015 |
| Continued Operations | 50,000 | 50,000 | 50,000 | 50,000 | 31,337,515 | 31,537,515 |
In 2008 and previous years, the Sonae Capital Group granted deferred performance bonuses to employees, based on shares of Sonae SGPS, SA to be acquired at nil cost, three years after they were attributed to the employee. In any case, the acquisition can be exercised during the period commencing on the third anniversary of the grant date and the end of that year. The company has the choice to settle in cash instead of shares. The option can only be exercised if the employee still works for the Sonae Capital Group on the vesting date. On 28 January 2008 existing liabilities based on Sonae, SGPS, SA's shares have been recalculated to reflect liabilities based on Sonae Capital, SGPS, SA's shares. Closing share prices as at that date were used in this recalculation.
Liabilities arising from Deferred performance bonus are valued under the terms of Note 2.13.. As at 31 December 2008 and 2007 the market value of total liabilities arising from share-based payments, which have not yet vested, may be summarised as follows:
| Year of | Vesting | Number of | Fair Value | ||||
|---|---|---|---|---|---|---|---|
| grant | year | participants | 31.December.2008 | 31.December.2007 | |||
| Shares | |||||||
| 2005 | 2008 | 0 | - | 573,543 | |||
| 2006 | 2009 | 6 | 73,981 | 267,377 | |||
| 2007 | 2010 | 5 | 49,081 | 218,103 | |||
| 2008 | 2011 | 7 | 120,607 | - | |||
| Total | 243,668 | 1,059,023 |
As at 31 December 2008 and 2007 the financial statements include the following amounts corresponding to the period elapsed between the date of granting and those dates for each deferred bonus plan, which have not yet vested:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Staff costs | (318,068) | 559,369 |
| Retained earnings | 464,971 | 265,126 |
| 146,904 | 824,495 | |
| Other liabilities | 146,904 | 824,495 |
| 146,904 | 824,495 |
As at 31 December 2008 and 2007, Trade accounts payable were made up as follows:
| Payable | ||||
|---|---|---|---|---|
| 31.December.2008 | less than 90 days | 90 to 180 days | More than 180 days | |
| Trade creditors current account | ||||
| Tourism | 11,222,670 | 9,713,773 | 1,396,723 | 112,174 |
| Spred | 26,657,618 | 25,823,140 | 742,951 | 91,527 |
| Holding and others | 616,293 | 436,082 | 133,466 | 46,745 |
| 38,496,581 | 35,972,995 | 2,273,140 | 250,446 | |
| Trade creditors - Invoices Accruals | 2,190,326 | 2,180,215 | 6,805 | 3,306 |
| Continued Operations | 40,686,908 | 38,153,210 | 2,279,945 | 253,752 |
| Discontinued Operations | 12,292,570 | |||
| Total Operations | 52,979,478 | |||
| Payable | ||||
| 31.December.2007 | less than 90 days | 90 to 180 days | More than 180 days | |
| Trade creditors current account | ||||
| Tourism | 8,416,470 | 7,780,787 | 16,520 | 619,163 |
| Spred | 19,113,590 | 13,794,661 | 5,271,181 | 47,748 |
| Holding and others | 256,166 | 225,571 | 24,520 | 6,075 |
| 27,786,226 | 21,801,019 | 5,312,221 | 672,986 | |
| Trade creditors - Invoices Accruals | 3,089,812 | 208,953 | 6,366 | 2,874,493 |
| Continued Operations | 30,876,038 | 22,009,972 | 5,318,587 | 3,547,479 |
| Discontinued Operations | 31,641,379 | |||
As at 31 December 2008 and 2007, this caption relates only to trade payables due in the normal course of Group companies activities. The Board of Directors believes that the fair market value of these payables is approximately their book value, and that the effect of discounting these balances is immaterial.
As at 31 December 2008 and 2007, Other creditors were made up as follows:
| Payable | ||||
|---|---|---|---|---|
| 31.December.2008 | less than 90 days | 90 to 180 days | More than 180 days | |
| Other creditors | ||||
| Fixed assets suppliers | 13,679,803 | 13,661,668 | 145 | 17,990 |
| Others | 9,239,789 | 7,412,226 | 1,293,548 | 534,015 |
| 22,919,592 | 21,073,894 | 1,293,693 | 552,005 | |
| Advances from customers and down payments | 36,972,893 | |||
| 59,892,485 | ||||
| Related parties | ||||
| 328,881 | ||||
| 328,881 | ||||
| Other liabilities | ||||
| Continued Operations | 60,221,366 | |||
| Discontinued Operations | 19,117,634 | |||
| Total Operations | 79,339,000 | |||
| Payable | ||||
| 31.December.2007 | less than 90 days | 90 to 180 days | More than 180 days | |
| Other creditors | ||||
| Fixed assets suppliers | 11,352,552 | 11,153,900 | 172,959 | 25,693 |
| Others | 6,058,443 | 5,419,722 | 507,971 | 130,750 |
| 17,410,995 | 16,573,622 | 680,930 | 156,443 | |
| Advances from customers and down payments | 22,419,849 | |||
| 39,830,844 | ||||
| Related parties | ||||
| Contacto - Sociedade de Construções, SA | 71,000,000 | |||
| 71,000,000 | ||||
| Other liabilities | ||||
| Continued Operations | 110,830,844 | |||
| Discontinued Operations | (79,603,912) | |||
| Total Operations | 31,226,932 |
As at 31 December 2008 and 2007, this caption includes balances payable to other creditors and fixed assets suppliers that do not include interest. The caption includes also advances from customers on promissory sales of stocks and tangible assets.The Board of Directors believes that the fair market value of these payables is approximately their book value, and that the effects of discounting these balances is immaterial.
As at 31 December 2008 and 2007 Other current liabilities were made up as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Staff Costs | 6,895,030 | 5,555,852 | |
| Amounts invoiced for works not yet completed | 3,818,919 | 3,055,140 | |
| Other external supplies and services | 908,497 | 1,555,468 | |
| Interest payable | 2,444,463 | 712,251 | |
| Expenses with contruction contracts | 11,855,567 | - | |
| Others | 8,518,160 | 5,133,007 | |
| Continued Operations | 34,440,636 | 16,011,718 | |
| Discontinued Operations | 5,527,248 | 17,083,732 | |
| Total Operations | 39,967,884 | 33,095,450 | |
Movements in Provisions and impairment losses over the period ended 31 December 2008 and 2007 are as follows:
| Balance as at | Discontinued | Balance as at | |||
|---|---|---|---|---|---|
| Captions | 01.January.08 | Increase | Decrease | Operations | 31.December.08 |
| Accumulated impairment losses on investments (Note 13) | 28,720,049 | 138,091 | - | (20,587,784) | 8,270,356 |
| Accumulated impairment losses on other non-current assets (Note 14) |
790,840 | - | (466,852) | - | 323,988 |
| Accumulated impairment losses on trade accounts receivable (Note 16) | 7,294,172 | 595,823 | (2,180,396) | 5,989 | 5,715,588 |
| Accumulated impairment losses on other current debtors (Note 17) | 23,634,981 | 5,920,663 | (272,831) | 103,508 | 29,386,321 |
| Accumulated impairment losses on stocks (Note 15) | 7,474,353 | 2,899,163 | (1,523,522) | 1,026,857 | 9,876,851 |
| Non-current provisions | 16,654,464 | 16,850,846 | (14,479,766) | 4,431,299 | 23,456,843 |
| Current provisions | 3,815,464 | 330,000 | (2,847,264) | - | 1,298,200 |
| 88,384,323 | 26,734,586 | (21,770,631) | (15,020,131) | 78,328,147 | |
| Balance as at | Balance as at | ||||
| Captions | 01.January.07 | Increase | Decrease | 31.December.07 | |
| Accumulated impairment losses on investments (Note 13) | 9,176,772 | 20,663,277 | (1,120,000) | 28,720,049 | |
| Accumulated impairment losses on other non-current assets (Note 14) |
860,370 | - | (69,530) | 790,840 | |
| Accumulated impairment losses on trade accounts receivable (Note 16) | 7,715,390 | 294,147 | (715,365) | 7,294,172 | |
| Accumulated impairment losses on other current debtors (Note 17) | 3,755,991 | 19,946,498 | (67,508) | 23,634,981 | |
| Accumulated impairment losses on stocks (Note 15) | 5,893,615 | 1,683,957 | (103,219) | 7,474,353 | |
| Non-current provisions | 17,839,855 | 3,393,019 | (4,578,410) | 16,654,464 | |
| Current provisions | 923,529 | 2,891,935 | - | 3,815,464 | |
| 46,165,522 | 48,872,833 | (6,654,032) | 88,384,323 |
As at 31 December 2008 and 2007 increases in Provisions and impairment losses can be analysed as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Provisions and impairment losses | 4,501,624 | 1,601,958 | |
| Impairment losses not included in this note | |||
| Tangible assets (Note 10) | - | 48,334 | |
| Provisions for losses on investments | 173,447 | 20,663,277 | |
| Provisions for accounts receivable | 15,925,722 | 22,294,479 | |
| Impairment losses on stocks | |||
| Recorded in cost of goods sold (Note 15) | 2,040,188 | 1,683,477 | |
| Others | 4,093,605 | 2,581,308 | |
| 26,734,586 | 48,872,833 |
As at 31 December 2007, increases in impairment losses were of 19,794,479 euro related to the partial sale of Elmo,SGPS, SA and of 20,663,277 euro related to the part of this investment yet to be sold. In 2008, investment income includes negative 9,325,722 euro (Note 8) that correspond to the difference betwen the increase in the provision related to Elmo and its affiliates in the amount of 15,925,722 euro and the reversion of the existing provision of 6,600,000 euro.
As at 31 December 2008 and 2007, Provisions can be analysed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Guarantees given to customers arising from construction contracts | - | 4,697,502 |
| Judicial claims | 5,340,899 | 3,954,369 |
| Risks associated with Elmo and its affiliates | 9,325,722 | |
| Others | 10,088,422 | 11,818,057 |
| 24,755,043 | 20,469,928 |
Impairment losses are deducted from the book value of the corresponding asset.
As at 31 December 2008 and 2007, the most important contingent assets and liabilities referred to guarantees given and were made up as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Guarantees given: | |||
| on tax claims | 4,213,279 | 5,845,298 | |
| on judicial claims | 309,450 | 2,696,996 | |
| on municipal claims | 5,964,208 | 5,887,208 | |
| Others | 59,341,316 | 74,799,709 |
"Others" include the following guarantees:
5,989,454 euro (22,730,724 euro as at 31 December 2007) of guarantees on construction works given to clients;
37,417,063 euro (37,899,252 euro as at 31 December 2007) of guarantees given concerning building permits in the tourism business;
1,510,062 euro (1,389,682 euro as at 31 December 2007) of guarantees given for VAT refund requests;
12,000,000 euro as at 31 December 2008 and 2007 of guarantees given on the sale of the shareholding in Granosalis, SGPS, S.A. (this guarantee has been cancelled in February 2009).
Minimum lease payments (fixed income) arising from operational leases, in which the Group acts as a lessor, recognized as income during the period ended 31 December 2008 and 2007 amounted to 5,601,173 euro and 5,517,470 euro, respectively.
Additionally, as at 31 December 2008 and 2007, the Group had operational lease contracts, as a lessor, whose minimum lease payments (fixed income) had the following payment schedule:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Due in: | ||
| N+1 automatically renewed | 6,217,740 | 5,856,407 |
| N+1 | 343,440 | 235,550 |
| N+2 | 343,150 | 223,556 |
| N+3 | 351,127 | 228,020 |
| N+4 | 359,305 | 212,771 |
| N+5 | 343,631 | 209,678 |
| After N+5 | - | 116,260 |
| 7,958,393 | 7,082,242 |
Lease payments arising from operational leases, in which the Group acts as a lessee, recognized as an expense during the period ended 31 December 2008 and 2007 amounted to 6,931,875 euro and 7,172,905 euro, respectively.
Additionally, as at 31 December 2008 and 2007, the Group had operational lease contracts, as a lessee, whose minimum lease payments (fixed income) had the following payment schedule:
| 31.December.2008 | 31.December.2008 | |
|---|---|---|
| Due in: | ||
| N+1 automatically renewal | 2,334,225 | 1,790,192 |
| N+1 | 4,976,679 | 3,434,346 |
| N+2 | 1,200,424 | 1,690,770 |
| N+3 | 1,123,087 | 1,193,496 |
| N+4 | 1,036,381 | 1,011,701 |
| N+5 | 974,351 | 881,020 |
| After N+5 | 4,628,585 | 11,644,170 |
| 16,273,732 | 21,645,695 |
As at 31 December 2008 and 2007, Turnover is made up as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Total | Total | ||
| Sale of goods | 12,038,649 | 13,377,208 | |
| Sale of products | 110,424,088 | 81,434,421 | |
| 122,462,737 | 94,811,629 | ||
| Services Rendered | 108,074,833 | 102,465,562 | |
| Continued Operations | 230,537,570 | 197,277,191 | |
| Discontinued Operations | 20,307,700 | 104,867,995 | |
| Total Operations | 250,845,270 | 302,145,186 | |
As at 31 December 2008 and 2007, Other operational income is made up as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Total | |||
| Own work capitalised | 2,074,344 | 789,086 | |
| Gains on sales of assets | 739,172 | 2,572,877 | |
| Reversal of impairment losses | 954,284 | 556,970 | |
| Supplementary income | 2,732,217 | 2,776,608 | |
| Others | 1,750,185 | 1,506,798 | |
| Continued Operations | 8,250,202 | 8,202,339 | |
| Discontinued Operations | 513,532 | 33,345,161 | |
| Total Operations | 8,763,734 | 41,547,500 |
31.December.2008
Change in Stocks in 2008 includes:
| Total | |
|---|---|
| Finished goods | 85,927,463 |
| Work in progress | (27,944,159) |
| Impairment losses on goods and work in progress | 13,915 |
| Continued Operations | 57,997,219 |
| Discontinued Operations | (703,500) |
| Total Operations | 57,293,719 |
Change in Stocks is made up as follows:
| 31.December.2008 | |
|---|---|
| Opening stocks | 96,318,341 |
| Currency translaction effect | - |
| Change in perimeter | - |
| Stock adjustments | (28,729,050) |
| Closing stocks | 183,030,695 |
| 57,983,304 | |
| Impairment losses | (15,354) |
| Reversion of impairment losses | 29,269 |
| Continued Operations | 57,997,219 |
| Discontinued Operations | (703,500) |
| Total Operations | 57,293,719 |
As at 31 December 2008 and 2007, External supplies and services are made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Subcontracts | 130,721,699 | 95,163,542 |
| Services | 9,660,484 | 8,177,155 |
| Rents | 8,151,524 | 7,297,746 |
| Fees | 2,981,695 | 2,861,775 |
| Maintenance | 2,532,567 | 2,421,708 |
| Cleaning, health and safety | 2,762,655 | 2,369,191 |
| Electricity | 2,836,480 | 2,454,047 |
| Travelling expenses | 1,444,960 | 1,124,835 |
| Publicity | 2,353,020 | 893,503 |
| Fuel | 1,376,396 | 981,967 |
| Security | 868,654 | 701,681 |
| Communication | 1,097,117 | 917,999 |
| Others | 8,265,490 | 6,893,419 |
| Continued Operations | 175,052,741 | 132,258,568 |
| Discontinued Operations | 6,534,148 | 123,102,014 |
| Total Operations | 181,586,889 | 255,360,582 |
As at 31 December 2008 and 2007, Staff costs are made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Salaries | 35,824,542 | 30,322,171 |
| Social security contributions | 6,685,509 | 5,864,319 |
| Insurance | 584,859 | 480,440 |
| Welfare | 629,106 | 487,255 |
| Other staff costs | 1,674,855 | 1,400,222 |
| Continued Operations | 45,398,871 | 38,554,407 |
| Discontinued Operations | 4,857,596 | 6,440,066 |
| Total Operations | 50,256,467 | 44,994,473 |
As at 31 December 2008 and 2007, Other operational expenses are made up as follows:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Total | Total | ||
| Losses on sales of assets | 2,099,571 | 2,213,912 | |
| Other taxes | 2,123,760 | 1,652,240 | |
| Property tax | 1,345,163 | 1,126,465 | |
| Doubtful debts written-off | 65,087 | 71,533 | |
| Others | 2,379,152 | 1,337,696 | |
| Continued Operations | 8,012,733 | 6,401,846 | |
| Discontinued Operations | 906,981 | 1,410,454 | |
| Total Operations | 8,919,714 | 7,812,300 | |
As at 31 December 2008 and 2007, Net financial expenses are made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Expenses: | ||
| Interest payable | ||
| related with bank loans and overdrafts | (6,373,557) | (3,055,455) |
| related with non convertible bonds | (5,189,564) | (243,524) |
| related with finance leases | (1,015,203) | (264,294) |
| others | (757,172) | (12,198,574) |
| (13,335,496) | (15,761,847) | |
| Exchange losses | (269,353) | (162,919) |
| Payment discounts given | (10,427) | (2,545) |
| Up front fees | (257,287) | (755,161) |
| Other financial expenses | (1,493,253) | (371,383) |
| (15,365,816) | (17,053,855) | |
| Income: | ||
| Interest receivable | 2,886,460 | 6,206,880 |
| Exchange gains | 1,271,775 | 578,717 |
| Payment discounts received | 84,255 | 84,369 |
| Gains on fair value of hedge derivatives | 106,750 | - |
| Other financial income | - | 185,738 |
| 4,349,240 | 7,055,704 | |
| Net financial expenses | ||
| Continued Operations | (11,016,576) | (9,998,151) |
| Discontinued Operations | (931,987) | 2,576,271 |
| Total Operations | (11,948,563) | (7,421,880) |
As at 31 December 2007, Interest expenses - others includes 7,584,535 euro related to interest from Sonae SGPS's loans.
As at 31 December 2008 and 2007, Investment income is made up as follows:
| 31.December.2008 | 31.December.2007 | ||||
|---|---|---|---|---|---|
| Total | Total | ||||
| Dividends | 2,829,840 | 167,088 | |||
| Sale of Águas Furtadas Imobiliária | 103,763 | - | |||
| Sale of Azulino Imobiliária | 880,728 | - | |||
| Sale of Contacto - Soc. de Construções | 46,361,584 | - | |||
| Partial sale (12.25%) of Spinveste - Promoção Imobiliária | 639,175 | - | |||
| Partial sale (12.25%) of Spinveste - Gestão Imobiliária | (875,009) | - | |||
| Others | - | ||||
| Gains on disposal of investments in group companies | 47,110,241 | - | |||
| Sale of Choice Car SGPS | 9,059,871 | ||||
| Others | - | ||||
| Gains on disposal in associated and in jointly controlled companies |
9,059,871 | - | |||
| Sale of 9% from the 10% owned in STAR - Viagens e Turismo | 1,589,025 | - | |||
| Partial sale of Cinclus Planeamento | - | 2,522,725 | |||
| Total sale of ba Vidro | - | 9,786,396 | |||
| Sale of Fun International | - | (1,137,117) | |||
| Others | - | 65,472 | |||
| Gains/(Losses) on sale of investments in assets available for sale |
1,589,025 | 11,237,476 | |||
| Impairment losses on investments | (9,325,722) | - | |||
| Others | 1,821,407 | 737,412 | |||
| Investment Income | |||||
| Continued Operations | - | 53,084,662 | - | 12,141,976 | |
| Discontinued Operations | - | - | - | (58,838) | |
| Total Operations | - | 53,084,662 | - | 12,083,138 |
As at 31 December 2008 and 2007, Taxation is made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Total | Total | |
| Current tax | 4,813,098 | 4,496,758 |
| Deferred tax (Note 20) | (1,048,382) | (9,305,913) |
| Taxation | ||
| Continued Operations | 3,764,716 | (4,809,155) |
| Discontinued Operations | 77,470 | 2,246,998 |
| Total Operations | 3,842,186 | (2,562,157) |
The reconciliation between the profit before taxation and the tax charge for the periods ended 31 December 2008 and 2007 may be summarised as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Total | Total | |
| Profit before income tax | 26,793,875 | 13,285,978 |
| Difference between accounting and tax treatment of capital gains/(losses) | (53,361,657) | (22,507,025) |
| Share of gains/(losses) of associated undertakings | 2,099,784 | (857,332) |
| Provisions and impairment losses not accepted for tax purposes | 11,486,334 | (2,241,238) |
| Other permanent differences | 7,130,188 | 2,814,933 |
| Taxable Profit | (5,851,476) | (9,504,684) |
| Use of tax losses carried forward | (24,827,132) | (5,431,547) |
| Recognition of tax losses that have not originated deferred tax assets | 46,669,123 | 29,259,730 |
| 15,990,515 | 14,323,499 | |
| Income tax rate in Portugal | 25.00% | 25.00% |
| 3,997,629 | 3,580,875 | |
| Effect of different income tax rates in other countries | (677,548) | (177,194) |
| Effect of increases or decreases in deferred taxes | (579,263) | (6,590,324) |
| Municipality tax | 760,028 | 370,917 |
| Under / (over) taxation estimates | 98,728 | 114,911 |
| Autonomous taxes and tax benefits | 242,612 | 138,658 |
| Taxation | 3,842,186 | (2,562,157) |
As at 31 December 2008 and 2007, the reconciliation of consolidated net profit can be analysed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| 91,693,541 | 46,524,213 | |
| Aggregate net profit | ||
| Harmonisation adjustments | (28,505,553) | (2,434,160) |
| Elimination of intragroup dividends | (40,464,917) | (5,567,435) |
| Share of gains/(losses) of associated undertakings | (2,099,789) | 857,332 |
| Elimination of intragroup capital gains/(losses) | (7,205,026) | (59,803,298) |
| Elimination of intragroup provisions | 9,701,449 | (1,843,000) |
| Consolidation adjustments to gains/(losses) on sales of investments | 5,302,465 | 33,271,298 |
| Others | (29,705) | (1,571,703) |
| Consolidated net profit for the year | ||
| Continued Operations | 28,392,465 | 9,433,247 |
| Discontinued Operations | (5,440,776) | 6,414,888 |
| Total Operations | 22,951,689 | 15,848,135 |
Balances and transactions during the periods ended 31 December 2008 and 2007 with related parties are detailed as follows:
| Sales and services rendered | Purchases and services obtained | |||
|---|---|---|---|---|
| Transactions | 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 |
| Parent company and group companies excluded from consolidation (a) |
341,622 | 1,063,869 | 393,615 | 1,898,353 |
| Associated companies | 3,876 | 429,720 | 162,093 | 1,323,457 |
| Other partners in Group companies | 81,130,202 | 167,505,008 | 8,435,016 | 8,560,656 |
| 81,475,700 | 168,998,597 | 8,990,724 | 11,782,466 | |
| Interest income | Interest expenses | |||
| Transactions | 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 |
| Parent company and group companies excluded from consolidation (a) |
- | 1,152,465 | - | 71,777 |
| Associated companies | 1,497,726 | 3,863 | - | - |
| Other partners in Group companies | 18,059 | 1,171,109 | 182,468 | 9,359,464 |
| 1,515,785 | 2,327,437 | 182,468 | 9,431,241 |
| Accounts receivable | Accounts payable | |||||
|---|---|---|---|---|---|---|
| Balances | 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 | ||
| Parent company and group companies excluded from consolidation (a) |
208,004 | 98,684 | 119,339 | 469,379 | ||
| Associated companies | 24,123 | 393,405 | 176,157 | 94,440 | ||
| Other partners in Group companies | 19,760,304 | 32,520,201 | 5,948,939 | 4,117,245 | ||
| 19,992,431 | 33,012,290 | 6,244,435 | 4,681,064 | |||
| Loans obtained | Loans granted | |||||
| Balances | 31.December.2008 | 31.December.2007 | 31.December.2008 | 31.December.2007 | ||
| Parent company and group companies excluded from consolidation (a) |
- | - | - | - | ||
| Associated companies | - | - | 22,451,938 | 17,407,225 | ||
| Other partners in Group companies | 2,317,826 | 2,340,818 | - | - | ||
| 2,317,826 | 2,340,818 | 22,451,938 | 17,407,225 |
(a) The parent company is Efanor Investimentos, SGPS, SA; balances and transactions with Sonae, SGPS, SA are included under Other partners in Group companies.
Remunerations attributed in 2008 to key management staff of main companies of the Sonae Capital Group (excluding members of the Board of Directors of Sonae Capital, SGPS, SA) amounted to 1,465,578 euro, of which 976,500 euro are fixed remunerations and 489,078 euro are performance bonuses.
Earnings per share for the periods ended 31 December 2008 and 2007 were calculated taking into consideration the following amounts:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Total | Total | ||
| Net profit continued operations | |||
| Net profit taken into consideration to calculate basic earnings per share (Net profit for the period ) |
24,668,135 | 8,579,431 | |
| Effect of dilutive potential shares | - | - | |
| Interest related to convertible bonds (net of tax) | - | - | |
| Net profit taken into consideration to calculate diluted earnings per share |
24,668,135 | 8,579,431 | |
| Number of shares | |||
| Weighted average number of shares used to calculated basic earnings per share |
250,000,000 | 250,000,000 | |
| Effect of dilutive potential ordinary shares from convertible bonds | - | - | |
| Weighted average number of shares used to calculated diluted earnings per share |
250,000,000 | 250,000,000 | |
| Earnings per share (basic and diluted) | |||
| Continued Operations | 0.098673 | 0.034318 | |
| Discontinued Operations | (0.013099) | 0.025660 | |
| Total Operations | 0.085574 | 0.059977 |
There are no convertible instruments included in Sonae Capital, SGPS, SA's shares, hence there is no dilutive effect.
As at 31 December 2008 and 2007, cash receipts and cash payments related to investments can be analysed as follows:
| 31.December.2008 | 31.December.2007 | ||||
|---|---|---|---|---|---|
| Amount received | Amount paid | Amount received | Amount paid | ||
| Purchase of Norscut shares | - | 603,050 | - | - | |
| Purchase of additional paid-in capital in Norscut | - | 3,973,736 | - | 5,927,817 | |
| Sale of Sonae Indústria SGPS shares | - | 3,447,328 | - | - | |
| Sale of Contacto Soc. Construções | 81,500,000 | - | - | - | |
| Partial sale (12.25%) of Spinveste - Promoção Imobiliária | 2,700,000 | - | - | - | |
| Partial sale (12.25%) of Spinveste - Gestão Imobiliária | 2,300,000 | - | - | - | |
| Sale of Choice Car SGPS | 12,500,000 | - | - | - | |
| Purchase of DMJB | - | - | - | 22,000,000 | |
| Purchase of Cooper Gay | - | - | - | 15,058,760 | |
| Purchase of Imoponte | - | - | - | 5,825,001 | |
| Purchase of Arbiworld | - | - | - | 9,988,557 | |
| Partial Purchase of SC - Eng.e Prom. Imob.SGPS | - | - | 7,963,000 | ||
| Payment of affiliates acquired in 2005 | - | - | - | 7,557,860 | |
| Share capital decrease of Contacto | - | - | 11,200,000 | - | |
| Sale of Safira | - | - | 5,000,000 | - | |
| Partial sale of Barbaridade Glass | - | - | 11,280,191 | - | |
| Sale of MDS | - | - | 45,500,000 | - | |
| Sale of Lazam | - | - | 11,300,000 | - | |
| Sale of Cooper Gay | - | - | 13,729,189 | - | |
| Sale of Star Viagens | 3,140,000 | - | - | - | |
| Sale of Granosalis | 11,000,000 | - | 11,000,000 | - | |
| Others | 2,697,437 | 106,085 | 5,890,382 | 5,838,258 | |
| Continued Operations | 115,837,437 | 8,130,199 | 114,899,762 | 80,159,253 | |
| Discontinued Operations | (11,200,000) | - | |||
| Total Operations | 115,837,437 | 8,130,199 | 103,699,762 | 80,159,253 |
In 2008 and 2007, the following were identified as primary business segments:
Tourism
Spred
No secondary business segments were disclosed since Group activities are almost all carried out in Portugal. Foreign activities are not significant enough to justify disclosure of a different geographical segment.
The contribution of the business segments to the income statement for the periods ended 31 December 2008 and 2007 can be detailed as follows:
| 31.December.2008 | |||||
|---|---|---|---|---|---|
| TOTAL | Tourism | Spred | Holding | Adjustments | Consolidated |
| Operational income | |||||
| Sales | 36,784,589 | 105,976,097 | - | - | 142,760,686 |
| Services rendered | 41,153,099 | 66,573,842 | 357,643 | - | 108,084,584 |
| Other operational income | 1,948,846 | 4,190,974 | 2,623,914 | - | 8,763,734 |
| 79,886,534 | 176,740,912 | 2,981,557 | - | 259,609,004 | |
| Inter-segment income | 3,232,590 | 1,123,054 | 211,359 | (4,567,003) | - |
| 83,119,124 | 177,863,967 | 3,192,915 | (4,567,003) | 259,609,004 | |
| Operational cash-flow (EBITDA) | 7,025,885 | 6,152,468 | (1,995,659) | (947,694) | 10,235,000 |
| Depreciation and amortisation | (8,350,465) | (2,578,395) | (32,428) | 19,850 | (10,941,437) |
| Provisions and impairment losses | (3,200,486) | (1,299,638) | - | (6,194,676) | (10,694,800) |
| 1 Reversal of provisions and impairment losses |
827,611 | 98,099 | 100,000 | 1,500 | 1,027,211 |
| Operational profit (EBIT) | (5,565,863) | 2,372,534 | (1,928,087) | (7,121,020) | (12,242,435) |
| Net financial expenses | (26,305,921) | (2,099,593) | 16,458,983 | (2,032) | (11,948,563) |
| Share of results of associated undertakings | - | - | - | (2,099,789) | (2,099,789) |
| Investment income | 4,189,769 | 46,228,784 | 2,666,108 | - | 53,084,662 |
| Profit before taxation | (27,682,015) | 46,501,725 | 17,197,004 | (9,222,841) | 26,793,875 |
| Taxation | (1,009,594) | (2,346,464) | (497,115) | 10,987 | (3,842,186) |
| Net profit for the period | (28,691,609) | 44,155,262 | 16,699,889 | (9,211,854) | 22,951,689 |
| - attributable to equity holders of Sonae | 21,393,605 | ||||
| - attributable to minority interests | 1,558,084 | ||||
| 31.December.2007 | ||||||
|---|---|---|---|---|---|---|
| TOTAL | Tourism | Spred | Holding | Adjustments | Consolidated | |
| Operational income | ||||||
| Sales | 16,233,606 | 65,614,146 | - | - | 81,847,752 | |
| Services rendered | 40,189,659 | 177,974,939 | 2,132,836 | - | 220,297,434 | |
| Other operational income | 5,191,649 | 35,757,369 | 598,482 | - | 41,547,500 | |
| 61,614,914 | 279,346,454 | 2,731,318 | - | 343,692,686 | ||
| Inter-segment income | 896,371 | 26,432,714 | 253,138 | (27,582,223) | - | |
| 62,511,285 | 305,779,168 | 2,984,456 | (27,582,223) | 343,692,686 | ||
| Operational cash-flow (EBITDA) | 2,527,710 | 13,377,773 | (1,349,269) | 362,288 | 14,918,502 | |
| Depreciation and amortisation | (6,289,845) | (1,203,074) | (107,205) | - | (7,600,124) | |
| Provisions and impairment losses | (551,700) | (1,050,258) | - | - | (1,601,958) | |
| 1 Reversal of provisions and impairment losses |
143,074 | 1,807,894 | 100,000 | - | 2,050,968 | |
| Operational profit (EBIT) | (4,170,761) | 12,932,335 | (1,356,474) | 362,288 | 7,767,388 | |
| Net financial expenses | (17,051,468) | 1,534,165 | 8,095,423 | - | (7,421,880) | |
| Share of results of associated undertakings | - | - | - | 857,332 | 857,332 | |
| Investment income | (1,198,577) | 132,641 | 10,963,250 | 2,185,824 | 12,083,138 | |
| Profit before taxation | (22,420,806) | 14,599,141 | 17,702,199 | 3,405,444 | 13,285,978 | |
| Taxation | 7,138,790 | (4,386,180) | (190,453) | - | 2,562,157 | |
| Net profit for the period | (15,282,016) | 10,212,961 | 17,511,746 | 3,405,444 | 15,848,135 | |
| - attributable to equity holders of Sonae | 14,994,319 | |||||
| - attributable to minority interests | 853,816 |
1 Amount included in the caption Other operational income but added back in the calculation of Operational Cash-flow (EBITDA).
The contribution of the business segments to the balance sheets as at 31 December 2008 and 2007 can be detailed as follows:
| 31.December.2008 | |||||
|---|---|---|---|---|---|
| TOTAL | Tourism | Spred | Holding | Adjustments | Consolidated |
| Fixed assets | |||||
| Intangible | 997,632 | 493,033 | - - | - | 1,490,665 |
| Tangible | 360,342,004 | 59,488,496 | 53,709 | (6,193,176) | 413,691,033 |
| 2 Goodwill |
- | - | - | 61,766,621 | 61,766,621 |
| Investments | 4,597,013 | 16,194,587 | 40,840,321 | (17,401,288) | 44,230,632 |
| Deferred tax assets | 14,298,563 | 1,116,614 | 341,614 | 1,125 | 15,757,915 |
| Other assets | 303,455,885 | 172,216,653 | 589,024,506 | (692,679,204) | 372,017,841 |
| Cash, Cash Equivalents and Current Investments | 11,397,028 | 2,956,050 | 4,963,907 | - | 19,316,985 |
| Total assets | 695,088,125 | 252,465,433 | 635,224,056 | (654,505,922) | 928,271,691 |
| Non-current liabilities | |||||
| Borrowings | 2,875,439 | 19,921,071 | 129,014,621 | - | 151,811,131 |
| Deferred tax liabilities | 2,917,845 | - | 246,326 | - | 3,164,170 |
| Other non-current liabilities | 544,728,225 | 116,241,277 | 2,123,393 | (573,418,970) | 89,673,926 |
| Current liabilities | |||||
| Borrowings | 1,408,048 | 15,098,018 | 124,756,438 | - | 141,262,504 |
| Other current liabilities | 133,469,198 | 94,766,656 | 71,246,009 | (113,287,078) | 186,194,785 |
| Total liabilities | 685,398,755 | 246,027,023 | 327,386,787 | (686,706,048) | 572,106,517 |
| Technical investment | 113,736,379 | 5,791,083 | 62,233 | - | 119,589,696 |
| 1 Gross Debt |
4,283,487 - | 35,019,089 - | 253,771,059 - | - | 293,073,636 |
| 1 Net Debt |
(7,113,541) | 32,063,040 | 248,807,152 | - | 273,756,651 |
| 31.December.2007 | |||||
|---|---|---|---|---|---|
| TOTAL | Tourism | Spred | Holding | Adjustments | Consolidated |
| Fixed assets | |||||
| Intangible | 593,936 | 218,158 | - | - | 812,094 |
| Tangible | 301,842,053 | 26,612,633 | 575,220 | - | 329,029,906 |
| 2 Goodwill |
- | - | - | 63,796,454 | 63,796,454 |
| Investments | 2,451,539 | 10,571,412 | 99,803,510 | (16,654,526) | 96,171,935 |
| Deferred tax assets | 13,558,815 | 762,105 | - | - | 14,320,920 |
| Other assets | 197,350,492 | 262,464,964 - | 323,309,310 | (514,392,126) | 268,732,640 |
| Cash, Cash Equivalents and Current Investments | 20,222,050 | 2,662,597 | 21,449,693 | - | 44,334,340 |
| Total assets | 536,018,885 | 303,291,869 | 445,137,733 | (467,250,198) | 817,198,289 |
| Non-current liabilities | |||||
| Borrowings | 120,455,895 | 21,231,691 | 49,766,000 | - | 191,453,586 |
| Deferred tax liabilities | 2,307,082 | 5,219,288 | - | - | 7,526,370 |
| Other non-current liabilities | 224,906,319 | 63,900,370 | 8,723,393 | (241,725,183) | 55,804,899 |
| Current liabilities | |||||
| Borrowings | 3,597,104 | 21,153,900 | - | - | 24,751,004 |
| Other current liabilities | 224,273,698 | 99,070,392 | 95,414,547 | (274,703,600) | 144,055,037 |
| Total liabilities | 575,540,098 | 210,575,641 | 153,903,940 | (516,428,783) | 423,590,896 |
| Technical investment | 73,123,914 | 31,406,734 | 24,084 | - | 104,554,732 |
| 1 Gross Debt |
124,052,999 | 42,385,591 | 49,766,000 | - | 216,204,590 |
| 1 Net Debt |
103,830,949 | 39,722,994 | 28,316,307 | - | 171,870,250 |
1 Includes intercompany loans to or from Sonae, SGPS, SA.
2 Goodwill allocation can be detailed as follows:
| TOTAL | 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|---|
| Tourism | 35,923,584 | 36,714,382 | ||
| Spred | 11,211,799 | 13,029,917 | ||
| Holding and Others | 14,631,238 | 14,052,155 | ||
| Total Operations | 61,766,621 | 63,796,454 |
| 31.December.2008 | |||||
|---|---|---|---|---|---|
| CONTINUED OPERATIONS | Tourism | Spred | Holding | Adjustments | Consolidated |
| Operational income | |||||
| Sales | 36,784,589 | 85,678,148 | - | - | 122,462,737 |
| Services rendered | 41,153,099 | 66,564,091 | 357,643 | - | 108,074,833 |
| Other operational income | 1,948,846 | 3,677,442 | 2,623,914 | - | 8,250,202 |
| 79,886,534 | 155,919,681 | 2,981,557 | - | 238,787,772 | |
| Inter-segment income | 3,232,590 | 1,118,868 | 211,359 | (4,562,816) | - |
| 83,119,124 | 157,038,549 | 3,192,915 | (4,562,816) | 238,787,772 | |
| Operational cash-flow (EBITDA) | 7,025,885 | 9,557,246 | (1,995,659) | (947,693) | 13,639,779 |
| Depreciation and amortisation | (8,350,465) | (1,474,333) | (32,428) | 19,850 | (9,837,375) |
| Provisions and impairment losses | (3,200,486) | (1,304,231) | - | (6,194,676) | (10,699,394) |
| 1 Reversal of provisions and impairment losses |
827,611 | 25,173 | 100,000 | 1,500 | 954,284 |
| Operational profit (EBIT) | (5,565,863) | 6,803,853 | (1,928,087) | (7,121,020) | (7,811,116) |
| Net financial expenses | (26,305,921) | (1,167,606) | 16,458,983 | (2,032) | (11,016,576) |
| Share of results of associated undertakings | - | - | - | (2,099,789) | (2,099,789) |
| Investment income | 4,189,769 | 46,228,784 | 2,666,108 | - | 53,084,662 |
| Profit before taxation | (27,682,015) | 51,865,032 | 17,197,004 | (9,222,841) | 32,157,181 |
| Taxation | (1,009,594) | (2,268,994) | (497,115) | 10,987 | (3,764,716) |
| Net profit for the period | (28,691,609) | 49,596,038 | 16,699,889 | (9,211,853) | 28,392,465 |
| - attributable to equity holders of Sonae | 24,668,135 | ||||
| - attributable to minority interests | 3,724,330 | ||||
| CONTINUED OPERATIONS | 31.December.2007 Tourism |
Spred | Holding | Adjustments | Consolidated |
| Operational income | |||||
| Sales | 16,243,521 | 78,568,108 | - | - | 94,811,629 |
| Services rendered | 40,596,354 | 59,698,185 | 2,171,023 | - | 102,465,562 |
| Other operational income | 4,289,384 | 3,286,357 | 626,597 | - | 8,202,339 |
| 61,129,259 | 141,552,650 | 2,797,620 | - | 205,479,530 | |
| Inter-segment income | 1,382,026 | 220,823 | 186,836 | (1,789,685) | - |
| 62,511,285 | 141,773,473 | 2,984,456 | (1,789,685) | 205,479,530 | |
| Operational cash-flow (EBITDA) | 2,527,710 | 7,917,247 | (1,349,269) | 17,135 | 9,112,824 |
| (6,289,845) | (969,175) | (107,205) | 42,096 | (7,324,129) | |
| Depreciation and amortisation | (551,700) | (171,029) | - | - | (722,729) |
| Provisions and impairment losses 1 Reversal of provisions and impairment losses |
143,074 | 313,897 | 100,000 | - | 556,971 |
| Operational profit (EBIT) | (4,170,762) | 7,090,940 | (1,356,474) | 59,231 | 1,622,935 |
| Net financial expenses | (17,051,468) | (1,047,963) | 8,095,423 | 5,857 | (9,998,151) |
| Share of results of associated undertakings | - | - | - | 857,332 | 857,332 |
| Investment income | (1,198,577) | 132,641 | 10,963,250 | 2,244,662 | 12,141,976 |
| Profit before taxation | (22,420,807) | 6,175,618 | 17,702,199 | 3,167,082 | 4,624,092 |
| Taxation | |||||
| 7,138,790 | (2,137,251) | (190,453) | (1,931) | 4,809,155 | |
| Net profit for the period | (15,282,017) | 4,038,367 | 17,511,746 | 3,165,151 | 9,433,247 |
| - attributable to equity holders of Sonae | 8,579,431 |
1 Amount included in the caption Other operational income but added back in the calculation of Operational Cash-flow (EBITDA).
| 31.December.2008 | |||||
|---|---|---|---|---|---|
| CONTINUED OPERATIONS | Tourism | Spred | Holding | Adjustments | Consolidated |
| Fixed assets | |||||
| Intangible | 997,632 | 125,631 | - - | - | 1,123,263 |
| Tangible | 360,342,004 | 30,911,527 | 53,709 | (6,193,176) | 385,114,064 |
| 2 Goodwill |
- | - | - | 61,766,621 | 61,766,621 |
| Investments | 4,597,013 | 16,193,063 | 40,840,321 | (17,401,288) | 44,229,108 |
| Deferred tax assets | 14,298,563 | 1,116,614 | 341,614 | 1,125 | 15,757,915 |
| Other assets | 303,455,885 | 126,517,465 | 589,024,506 | (692,679,203) | 326,318,654 |
| Cash, Cash Equivalents and Current Investments | 11,397,028 | 1,572,504 | 4,963,907 | - | 17,933,439 |
| Total assets | 695,088,125 | 176,436,803 | 635,224,056 | (654,505,921) | 852,243,063 |
| Non-current liabilities | |||||
| Borrowings | 2,875,439 | 18,342,289 | 129,014,621 | - | 150,232,349 |
| Deferred tax liabilities | 2,917,845 | - | 246,326 | - | 3,164,170 |
| Other non-current liabilities | 544,728,225 | 70,771,775 | 2,123,393 | (573,418,970) | 44,204,424 |
| Current liabilities | |||||
| Borrowings | 1,408,048 | 2,946,943 | 124,756,438 | - | 129,111,429 |
| Other current liabilities | 133,469,198 | 56,500,704 | 71,246,009 | (113,287,078) | 147,928,833 |
| Total liabilities | 685,398,755 | 148,561,711 | 327,386,787 | (686,706,048) | 474,641,205 |
| Technical investment | 113,736,379 | 5,919,782 | 62,233 | - | 119,718,395 |
| 1 Gross Debt |
4,283,487 | 21,289,232 | 253,771,059 | - | 279,343,778 |
| 1 Net Debt |
(7,113,541) | 19,716,728 | 248,807,152 | - | 261,410,339 |
| 31.December.2007 | |||||
| CONTINUED OPERATIONS | Tourism | Spred | Holding | Adjustments | Consolidated |
| Fixed assets | |||||
| Intangible | 593,936 | 209,601 | - | - | 803,537 |
| Tangible | 301,842,053 | 26,337,373 | 575,219 | (716,397) | 328,038,248 |
| 2 Goodwill |
- | - | - | 62,517,465 | 62,517,465 |
| Investments | 2,451,539 | 10,571,412 | 99,803,510 | (16,654,526) | 96,171,935 |
| Deferred tax assets | 13,558,815 | 558,925 | - | - | 14,117,740 |
| Other assets | 197,350,492 | 158,317,755 | 323,309,310 | (428,803,030) | 250,174,527 |
| Cash, Cash Equivalents and Current Investments | 20,222,050 | 2,286,668 | 21,449,693 | (1,362) | 43,957,049 |
| Total assets | 536,018,885 | 198,281,734 | 445,137,732 | (383,657,850) | 795,780,501 |
| Non-current liabilities | |||||
| Borrowings | 120,455,895 | 21,231,691 | 49,766,000 | - | 191,453,586 |
| Deferred tax liabilities | 2,307,082 | - | - | - | 2,307,082 |
| Other non-current liabilities | 224,906,319 | 53,985,780 | 8,723,393 | (241,712,002) | 45,903,490 |
| Current liabilities | |||||
| Borrowings | 3,597,104 | 21,153,900 | - | - | 24,751,004 |
| Other current liabilities | 224,273,698 | 43,053,654 | 95,414,545 | (189,168,552) | 173,573,345 |
| Total liabilities | 575,540,098 | 139,425,025 | 153,903,938 | (430,880,554) | 437,988,507 |
| Technical investment | 73,045,626 | 31,257,747 | 24,084 | - | 104,327,457 |
| 1 | |||||
| Gross Debt | 124,052,999 | 42,385,591 | 49,766,000 | - | 216,204,590 |
| 1 Net Debt |
103,830,949 | 40,098,923 | 28,316,307 | 1,362 | 172,247,541 |
1 Includes intercompany loans to or from Sonae, SGPS, SA.
2 Goodwill allocation can be detailed as follows:
| CONTINUED OPERATIONS | 31.December.2008 | 31.December.2007 |
|---|---|---|
| Tourism | 35,923,584 | 36,714,298 |
| Spred | 11,211,799 | 11,171,929 |
| Holding and Others | 14,631,238 | 14,631,238 |
| Continued Operations | 61,766,621 | 62,517,465 |
| 31.December.2008 | ||||
|---|---|---|---|---|
| Tourism | Spred | Holding | Consolidated | |
| Operating activities | (45,557,607) | 529,504 | (3,252,422) | (48,280,525) |
| Investment activities | 28,127,976 | (13,050,302) | 9,495,054 | 24,572,728 |
| Financing activities | (70,300,567) | (21,913,831) | 92,099,143 | (115,255) |
| Change in cash and cash equivalents | ||||
| Total Operations | (87,730,198) | (34,434,629) | 98,341,775 | (23,823,052) |
| 31.December.2007 | ||||
| Tourism | Spred | Holding | Consolidated | |
| Operating activities | (6,340,756) | (1,079,095) | (26,860) | (7,446,711) |
| Investment activities | (17,454,154) | 42,211,588 | 19,968,681 | 44,726,115 |
| Financing activities | (7,711,028) | 21,425,883 | (22,582,773) | (8,867,918) |
| Change in cash and cash equivalents | ||||
| Continued Operations | (31,505,938) | 62,558,376 | (2,640,952) | 28,411,486 |
| Discontinued Operations | 15,166,626 | (15,016,096) | 33,315 | 183,845 |
| Total Operations | (16,339,312) | 47,542,280 | (2,607,637) | 28,595,331 |
| 31.December.2008 | 31.December.2007 | |||
|---|---|---|---|---|
| Inflows | ||||
| Gross Bank Debt | 253,771,059 | 49,766,000 | ||
| Cash and Cash Equivalents | 4,936,907 | 21,449,693 | ||
| Net Bank Debt | 248,834,152 | 28,316,307 | ||
| Sonae Turismo | 26,616,000 | 5,320,000 | ||
| Spred | 35,000 | 1,191,600 | ||
| Intercompany ST Loans obtained | 26,651,000 | 6,511,600 | ||
| Total inflows | 275,485,152 | 34,827,907 |
| Sonae Turismo | 522,843,530 | 271,501,584 |
|---|---|---|
| Spred | 49,501,321 | 36,695,533 |
| Intercompany ST Loans Granted | 572,344,851 | 308,197,117 |
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Tourism | 691 | 532 |
| Spred | 985 | 1,002 |
| Holding and Others | 66 | 27 |
| Continued Operations | 1,742 | 1,561 |
| Discontinued Operations | 801 | 167 |
| Total Operations | 2,543 | 1,728 |
On 25 February 2009, the Commercial Court of Lisieux decided to renew the "observation period" of the rehabilitation proceedings ("Redressement Judiciaire") for Plysorol until the end of May 2009. During this period, the company will therefore continue its activity under the protection of insolvency law and under the supervision of the two insolvency administrators.
These consolidated financial statements were approved by the Board of Directors on 25 March 2009 and are still subject to approval by the Shareholders General Meeting.
| ASSETS | Notes | 31 December 2008 | 31 December 2007 | |
|---|---|---|---|---|
| NON CURRENT ASSETS: | ||||
| Tangible assets Investments |
4 | 5,285 382,638,753 342,739 |
- 382,638,253 - |
|
| Other non current assets | 5 | 116,153,000 | 49,749,000 | |
| Total Non Current Assets | 499,139,777 | 432,387,253 | ||
| CURRENT ASSETS | ||||
| Other current assets | 6 | 44,731,586 | 23,901 | |
| Cash and cash equivalents | 7 | 25,516 | 1,363 | |
| Total Current Assets | 44,757,102 | 25,264 | ||
| TOTAL ASSETS | 543,896,879 | 432,412,517 | ||
| EQUITY AND LIABILITIES | ||||
| EQUITY: | ||||
| Share Capital | 8 | 250,000,000 | 250,000,000 | |
| Translation and Fair Value Reserves | (304,749) | - | ||
| Other reserves | 9 | 132,638,253 | 132,638,253 | |
| Retained earnings | (1,509) | - | ||
| Profit / (Loss) for the period TOTAL EQUITY |
(848,271) 381,483,724 |
(2,012) 382,636,241 |
||
| LIABILITIES: | ||||
| NON CURRENT LIABILITIES | ||||
| Bank loans | 10 | 29,934,516 | - | |
| Bonds | 10 | 49,825,545 | 49,766,000 | |
| Deferred tax liabilities | 59,985 | - | ||
| Total Non Current Liabilities | 79,820,046 | 49,766,000 | ||
| CURRENT LIABILITIES | ||||
| Trade creditors | 22,134 | 800 | ||
| Bank loans | 10 | 21,850,000 | - | |
| Other creditors | 12 | 59,230,978 | 1,994 | |
| Other current liabilities | 13 | 1,489,997 | 7,482 | |
| Total Current Liabilities | 82,593,109 | 10,276 | ||
| TOTAL EQUITY AND LIABILITIES | 543,896,879 | 432,412,517 | ||
The accompanying notes are part of these financial statements
| Notes | th 4 Quarter 2008 (Unaudited) |
31 December 2008 | 31 December 2007 | |
|---|---|---|---|---|
| Operational income: | ||||
| Other operational income | (6,788) | 10,055 | - | |
| Total operational income | (6,788) | 10,055 | - | |
| Operational expenses: | ||||
| External supplies and services | 14 | (239,193) | (560,648) | (2,479) |
| Staff costs | 16 | (295,388) | (1,167,426) | |
| Depreciation and amortisation | (661) | (2,642) | ||
| Other operational expenses | (26,004) | (54,095) | (254) | |
| Total operational expenses | (561,246) | (1,784,812) | (2,734) | |
| Operational profit/(loss) | (568,034) | (1,774,757) | (2,734) | |
| Financial income | 17 | 2,016,509 | 5,544,698 | 8,301 |
| Financial expenses | 17 | (1,731,146) | (4,898,944) | (7,579) |
| Net financial income/(expenses) | 285,363 | 645,753 | 722 | |
| Profit/(loss) before taxation | (282,671) | (1,129,004) | (2,012) | |
| Taxation | 281,285 | 280,733 | ||
| Profit/(loss) for the period | (1,386) | (848,271) | (2,012) | |
| Profit/(loss) per share | ||||
| Basic | 19 | (0.000006) | (0.003393) | (0.000008) |
| Diluted | 19 | (0.000006) | (0.003393) | (0.000008) |
The accompanying notes are part of these financial statements
(Translation of the individual financial statements originally issued in Portuguese)
| Res erve s |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sha C apit al re |
Own Sha res |
Sha re Prem ium |
Add aid in C ition al p apit al |
Leg al Res erve |
Leg al R luat ion eva Res erve |
Fair Va lue Res erve |
Hed ging Res erve |
Tra nsla tion Res erve |
Oth er R ese rves |
Reta ined s Earn ings |
Net prof it / (los s) |
Tota l Eq uity |
|
| Bala at 1 Jan 200 7 nce as uary |
- | - | - | - | - - |
- | - | - | - | - | |||
| App iatio n of prof its: ropr |
|||||||||||||
| Tra nsfe le gal to r rese rve |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Divi den ds di strib uted |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Tra nsfe tain ed e arni to r re ngs |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Acq uisit ion/ (dis al) o f ow n sh pos ares |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Incr e/(d ) in fair valu e of hed ging fina ncia l ins trum ents t of taxe eas ecre ase , ne s |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Defe rred ising from incr e/(d ) in fair valu e of hed ging fina ncia l ins ta trum ents x ar eas ecre ase |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Incr e/(d ) in fair valu e of inve stm ents eas ecre ase |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Defe rred ising from incr e/(d ) in fair valu e of inve ta stm ents x ar eas ecre ase |
- | - | - | - | - | - - |
- | - | - | - | - | - | |
| Prof it/(lo ss) for t he p erio d en ded 31 D mbe r 20 07 ece |
- | - | - | - | - | - - |
- | - | - | - | (2,0 12) |
(2,0 12) |
|
| Oth ers |
250 ,000 ,000 |
- | - | - | - | - - |
- | - | 132 ,638 ,253 |
- | - 3 82,6 38,2 53 |
||
| Bala at 3 1 D mbe r 20 07 nce as ece |
250 ,000 ,000 |
- | - | - | - | - - |
- | - | 132 ,638 ,253 |
- | (2,0 12) |
382 ,636 ,241 |
| Res erve s |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sha C apit al re |
Own Sha res |
Sha re Prem ium |
Add aid in C ition al p apit al |
Leg al Res erve |
Leg al R luat ion eva Res erve |
Fair Va lue Res erve |
Hed ging Res erve |
Tra nsla tion Res erve |
Oth er R ese rves |
Reta ined s Earn ings |
Net prof it / (los s) |
Tota l Eq uity |
|
| Bala at 1 Jan 200 8 nce as uary |
250 ,000 ,000 |
- | - | - | - | - | - - |
- | 132 ,638 ,253 |
- | (2,0 12) |
382 ,636 ,241 |
|
| App iatio n of prof its: ropr |
|||||||||||||
| Tra nsfe to le gal r rese rve |
- | - | - | - | - | - | - - |
- | - | - | - | - | |
| Divi den ds di strib uted |
- | - | - | - | - | - | - - |
- | - | - | - | - | |
| Tra nsfe tain ed e arni to r re ngs |
- | - | - | - | - | - | - - |
- | - | (2,0 12) |
2,01 2 |
- | |
| Acq uisit ion/ (dis al) o f ow n sh pos ares |
- | - | - | - | - | - | - - |
- | - | - | - | - | |
| Incr e/(d ) in fair valu e of hed ging fina ncia l ins t of trum ents taxe eas ecre ase , ne s |
- | - | - | - | - | (304 ,749 - |
) - |
- | - | - | - | (304 ) ,749 |
|
| Defe rred ta ising from incr e/(d ) in fair valu e of hed ging fina ncia l ins trum ents x ar eas ecre ase |
- | - | - | - | - | - | - - |
- | - | - | - | - | |
| Incr e/(d ) in fair valu e of inve stm ents eas ecre ase |
- | - | - | - | - | - | - - |
- | - | - | - | - | |
| Defe rred ising from incr e/(d ) in fair valu e of inve ta stm ents x ar eas ecre ase |
- | - | - | - | - | - | - - |
- | - | - | - | - | |
| Prof it/(lo ss) for t he p erio d en ded 31 D mbe r 20 08 ece |
- | - | - | - | - | - | - - |
- | - | - | (848 ,271 ) |
(848 ,271 ) |
|
| Oth ers |
- | - | - | - | - | - | - - |
- | - | 503 | - | 503 | |
| Bala at 3 1 D mbe r 20 08 nce as ece |
250 ,000 ,000 |
- | - | - | - | (304 ,749 - |
) - |
- | 132 ,638 ,253 |
(1,5 09) |
(848 ,271 ) |
381 ,483 ,724 |
Theaccompanying notes are part of these financial statements The Board of Directors
| 31 December 2008 | 31 December 2007 | |
|---|---|---|
| OPERATING ACTIVITIES | ||
| Cash receipts from trade debtors | 504,945 | |
| Cash paid to employees | 834,586 | |
| Cash flow generated by operations | (1,339,531) | - |
| Income taxes (paid)/received | 29,056 | |
| Other cash receipts/(payments) relating to operating activities | 85,435 | (15,515) |
| Net cash flow from operating activities [1] | (1,283,152) | (15,515) |
| INVESTMENT ACTIVITIES | ||
| Cash receipts arising from: | ||
| Interest and similar income | 2,217,250 | |
| 2,217,250 | - | |
| Cash payments arising from: | ||
| Investments | 500 | - |
| Tangible assets | 7,927 | |
| Loans granted | 107,772,300 | 49,749,000 |
| (107,780,727) | (49,749,000) | |
| Net cash flow from investment activities [2] | (105,563,476) | (49,749,000) |
| FINANCING ACTIVITIES | ||
| Cash receipts arising from: | ||
| Loans obtained | 110,981,400 | 50,000,000 |
| 110,981,400 | 50,000,000 | |
| Cash Payments arising from: | ||
| Interest and similar costs | 4,110,618 | 234,122 |
| Loans obtained | - | - |
| (4,110,618) | (234,122) | |
| Net cash from financing activities [3] | 106,870,782 | 49,765,878 |
| Net increase/(decrease) in cash and cash equivalents [4] = [1]+[2]+[3] | 24,154 | 1,363 |
| Cash and cash equivalents at the beginning of the period | 1,363 | - |
| Cash and cash equivalents at the end of the period | 25,516 | 1,363 |
The accompanying notes are part of these financial statements
(Translation of the individual financial statements originally issued in Portuguese)
(Amounts expressed in euro)
Sonae Capital, SGPS, SA ("the Company" or "Sonae Capital") whose registered office is at Lugar do Espido, Via Norte, Apartado 3053, 4471-907 Maia, Portugal, was constituted on 14 December 2007 by public deed, following the demerger from Sonae, SGPS, SA of the whole of the share capital of the company formerly named Sonae Capital, SGPS, SA, now named SC, SGPS, SA in compliance with paragraph a) of article 118 of the Commercial Companies Code.
Individual financial statements are presented as required by Commercial Companies Code. According to Decree-Law 35/2005 of 17 February, individual financial statements have been prepared in accordance with International Financial Reporting Standards.
As mentioned previously, the company was set up on 14 December 2007. Therefore, the income statement by nature as at 31 December 2008 is not directly comparable with the one from the previous year.
The principal accounting policies adopted in preparing the accompanying individual financial statements are as follows:
The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), applicable to financial years beginning on 1 January 2008.
The accompanying financial statements have been prepared from the books and accounting records on a going concern basis and under the historical cost convention, except for financial instruments which are stated at fair value (Note 2.3).
Financial charges connected with loans contracted are generally recognised as a cost in accordance with the accruals principle, using for this purpose the effective interest rate method.
Investments are classified into the following categories:
Held to maturity investments are classified as non-current assets unless they mature within 12 months of the balance sheet date. Investments classified as held to maturity have defined maturities and the Company has the intention and ability to hold them until the maturity date. Investments measured at fair value through profit or loss are classified as current investments. Available-for-sale investments are classified as non-current assets.
Investments measured at fair value through profit and loss include investments held for negotiation which the company acquires with a view to disposal within a reasonable period of time and are classified in the balance sheet as current investments.
The Company classifies as available for sale investments those which are not classified as investments measured at fair value through profit and loss nor as investments held to maturity. These investments are classified as non current assets, unless there is an intention to dispose of them within 12 months of the balance sheet date.
All purchases and sales of investments are recognised on the trade date, independently of the settlement date.
Investments are initially measured at cost, which is the fair value of the consideration paid for them, including transaction costs, in the case of available for sale investments.
Available-for-sale investments and investments measured at fair value through profit or loss are subsequently carried at fair value, without any deduction for transaction costs which may be incurred on sale, by reference to their quoted market price at the balance sheet date. Investments in equity instruments that do not have a quoted market price and whose fair value cannot be reliably measured are stated at cost, less impairment losses.
Gains or losses arising from a change in fair value of available-for-sale investments are recognised directly in equity, under Fair value reserve, until the investment is sold or otherwise disposed of, or until its fair value is lower than its carrying amount and that corresponds to an impairment loss, at which time the cumulative gain or loss previously recognised in equity is transferred to net profit or loss for the period.
The gains and losses resulting from changes to the fair value of derivatives valued at fair value are shown in the financial statements in the caption net financial charges/income.
Held to maturity investments are carried at amortised cost using the effective interest rate, net of capital reimbursements and interest income received.
In accordance with IAS 27, investments in affiliated and associated undertakings are stated at acquisition cost, less impairment losses.
Financial liabilities and equity instruments are classified and accounted for based on their contractual substance, independently from the legal form they assume.
Loans are recorded as liabilities at their nominal value, net of up-front fees and commissions related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the income statement on an accruals basis, in accordance with the accounting policy defined in Note 2.4. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.
Trade accounts payable are stated at their nominal value.
The Company uses derivatives in the management of its financial risks only to hedge such risks, and/or to optimize funding costs, in accordance with the interest rate risk policy stated in note 3.1.
The derivatives used by the Company defined as cash-flow hedge instruments relate mainly to interest rate hedge instruments on loans contracted. The indices, calculation methods, dates for re-fixing interest rates and the reimbursement plans for the interest rate hedge instruments are all identical to the conditions established for the underlying contracted loans, and thus qualify as perfect hedges. Inefficiencies that may exist are shown in the caption Net Financial Income/Expenses in the income statement.
The Company's criteria for classifying a derivative instrument as a cash-flow hedge instrument include:
Cash-flow hedge instruments used by the company to hedge the exposure to changes in interest rates of its loans are initially accounted for at cost, if any, and subsequently adjusted to their corresponding fair value. Changes in fair value of these cash flow hedge instruments are recorded in equity, under the caption Hedging reserves, and then recognised in the income statement over the same period in which the hedged instrument affects profit or loss.
Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded in equity, under the caption Hedging reserves, are transferred to profit or loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement.
In cases in which derivative instruments, in spite of having been negotiated in accordance with the interest rate risk policy stated in note 3.1, in relation to which the Company did not apply hedge accounting, are initially registered at cost, if any, and subsequently measured at fair value. The changes in value resulting from the measurement at fair value, calculated using especially designed software tools, are included in Net financial charges in the income statement.
When embedded derivatives exist, they are accounted for as separate derivatives when the risks and characteristics are not closely related to economic risks and characteristics of the host contract, and this is not stated at fair value, and unrealized gains or losses recorded in the income statement.
In specific situations, the Company may use interest rate derivatives with the goal of obtaining fair value hedging. In these situations, derivatives are booked at their fair value in the profit and loss account. In situations in which the derivative involved is not measured at fair value (in particular borrowings measured at amortised cost), the effective share of hedging will be adjusted to the accounting value of the derivative hedged through the profit and loss account.
Cash and cash equivalents include cash on hand, cash at banks, term deposits and other treasury applications which mature in less than three months and are subject to insignificant risk of change in value.
In the cash-flow statement, cash and cash equivalents also include bank overdrafts, which are included in the balance sheet caption current bank loans.
Income and expenses are recorded in the year to which they relate, independently of the date of the corresponding payment or receipt. Income and expenses for which their real amount is not known are estimated.
Other current assets and Other current liabilities include income and expenses of the reporting year which will only be invoiced in the future. Those captions also include receipts and payments that have already occurred but will only correspond to income or expenses of future years, when they will be recognised in the income statement.
Events after the balance sheet date that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in the financial statements. Events after the balance sheet date that are non-adjusting events are disclosed in the notes, when material.
The most significant accounting estimates reflected in the financial statements are as follows:
The estimates were based on the best information available at the date of the preparation of the financial statements and on the best knowledge and experience of past and/or current events. These estimates may, however, be affected by subsequent events which are not foreseeable at the present day. Changes to these estimates, which take place after the date of the financial statements, will be recognized prospectively in the income statement, in accordance with IAS 8.
The main estimates and assumptions concerning future events included in the financial statements are described in the corresponding notes to the accounts, when applicable.
Current income tax is determined in accordance with tax rules in force in Portugal, considering the profit for the period.
Deferred taxes are calculated using the balance sheet liability method. Deferred tax assets are recognised only when their use is probable.
a) Interest Rate risk - POLICY
As a result of maintaining its variable rate debt in the balance sheet, and the resulting cash-flows from interest payments, the Company is exposed to the Euro interest rate risk.
In view of the fact that:
the Company policy concerning the mitigation of this risk does not establish the maintenance of any minimum proportion of fixed interest rate debt (converted to fixed rate through use of derivatives), but rather has opted for a dynamic approach to monitoring exposure, which aligns market conditions to the real exposure of the Company, in order to avoid the possibility of exposure that could have a real impact on the Company's results.
In view of the above, the Company policy concerning this issue defines a case by case review of each potential transaction, such that any contract for derivatives must follow the following principles:
derivatives are not used for trading, profit making or speculation;
derivatives to be contracted must match exactly the underlying exposures in relation to indices to be used, refixing dates for interest rates and dates for payment of interest, and the amortisation profile of the underlying debt;
Interest rate sensitivity is based on the following assumptions:
Changes in market interest rates of interest rate derivatives, which are not specified as being part of hedging relationships as defined in IAS 39, affect the results of the company (net gain/loss resulting from the revaluation of the fair value of financial instruments), and are thus included in the calculation of profit and loss sensitivity;
Changes in the fair value of derivatives and other financial assets and liabilities are estimated by calculating the discounted present value of future cash flows at existing market interest rates at the end of each year, and assuming a parallel variation in interest rate trends;
Given the above assumptions, if interest rates of financial instruments denominated in euro had been 0.75 percentage points higher/lower, the net profit before tax of the Company as at 31 December 2008 would have been higher by approximately 320,658.52 euro and lower by approximately 278,111.02 euro, respectively (as at 31 December 2007 they would have been higher/lower by around 12 euro). The equity impact of the interest rate sensitivity analysis as at 31 December 2008 and 2007 is immaterial.
c) Exchange Rate Risk
The Company has no exposure to exchange rate risk.
d) Other Price Risks
The Company is exposed to risks arising from the value of investments made in financial shareholdings. However, these investments are in general made with strategic objectives in mind and not for current trading.
3.2. Credit Risk
Credit risks at Sonae Capital arises mainly from (i) its relationships with financial institutions in the course of its day to day business activity, and (ii) the risk of non compliance by business counterparts in portfolio transactions.
To mitigate this risk, the Company:
d) Regularly monitors total exposures with each counterpart, in order to guarantee compliance with the policy established.
Shareholding Buy/Sale transactions: In the course of its business, the Company is exposed to the credit risk of counterparts with whom it agrees transactions concerning investments in shareholdings. In these cases, the means used to mitigate risks are determined on a one on one basis, in order to take into account the specifics of the transaction, with the constant supervision of the Board of Directors. Despite the wide range of means used, there exists always the possibility of using normal market methods, namely carrying out due diligence, obtaining financial information concerning the counterpart in question, or the pledging of an asset which is released when the financial transaction has been completed.
The objective of liquidity risk management is to ensure at any given moment that the Company has the financial capability under favourable market conditions to: (i) comply with its payment obligations when these fall due and (ii) ensure in a timely manner the appropriate financing for the development of its businesses and strategy.
To that end, the Company aims at maintaining a flexible financial structure, so that the process of managing liquidity within the Company includes the following key aspects:
As at 31 December 2008 and 31 December 2007 investments are detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Investments in affiliated and associated undertakings | 382,638,253 | 382,638,253 |
| Investments in other companies (Sonae RE – 0.04%) | 500 | - |
| 382,638,753 | 382,638,253 |
As at 31 December 2008, the detail of investments in affiliated and associated companies is as shown in the table below.
Investments carried at cost correspond to those in unlisted companies and for which a fair value cannot be reliably estimated.
| 31.December.2008 | 31.December.2007 | |||||||
|---|---|---|---|---|---|---|---|---|
| Company | % Held | Fair Value | Book | Fair Value | % Held | Fair Value | Book | Fair Value |
| Value | Reserve | Value | Reserve | |||||
| Investments at Book Value: | ||||||||
| SC, SGPS, SA | 100.00% | - | 382,638,253 | - | 100.00% | - | 382,638,253 | - |
| Total | - | 382,638,253 | - | - | 382,638,253 | - |
During the year ended 31 December 2007, the demerger of Sonae, SGPS, SA's shareholding in SC, SGPS, SA (previously named Sonae Capital, SGPS, SA) took place. The transaction involved the spin off of the entire share capital of SC, SGPS, SA held by Sonae, SGPS, SA for its accounting value of 382,638,253 euro, with which the new company Sonae Capital, SGPS, SA was incorporated.
As at 31 December 2008 and 31 December 2007 other non current assets are detailed as follows:
| 31.December.200381.December.2007 | ||
|---|---|---|
| Loans granted to group companies: | ||
| SC, SGPS, SA | 116,153,000 | 49,749,000 |
| 116,153,000 | 49,749,000 |
This asset was not due or impaired as at 31 December 2008. The fair value of loans granted to group companies is basically the same as their book value.
As at 31 December 2008 and 31 December 2007 other current assets can be detailed as follows:
| 31.December.200831.December.2007 | ||
|---|---|---|
| Group companies - Short term loans: | ||
| SC, SGPS, SA | 40,133,300 | - |
| SC - Sociedade de Consultadoria, SA | 1,235,000 | - |
| Group companies - Interest: | ||
| SC, SGPS, SA | 2,802,326 | - |
| Income tax withheld | 27,538 | - |
| Accrued income | 533,422 | 8,301 |
| Deferred costs | - | 15,600 |
| 44,731,586 | 23,901 |
As at 31 December 2008 and 31 December 2007 cash and cash equivalents can be detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Cash | 1,000 | - |
| Bank deposits | 24,516 | 1,363 |
| Cash and cash equivalents in the balance sheet | 25,516 | 1,363 |
| Bank overdrafts | - | - |
| Cash and cash equivalents in the cash flow statement | 25,516 | 1,363 |
As at 31 December 2008 share capital consisted of 250,000,000 ordinary shares of 1 euro each.
As at 31 December 2008, the caption Other reserves relates to the overall value of the demerger reserve (Note 1), and corresponds to the difference between the book value of the shareholding in SC, SGPS, SA (382,683,253 Euros) which was spun off from Sonae, SGPS, SA to the Company, and the value of the share capital of the Company (250,000,000 Euros).
As at 31 December 2008 and 31 December 2007 this caption included the following loans:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Bank loans - Commercial paper | 30,000,000 | - |
| Up-front fees not yet charged to income statement | (65,484) | - |
| Bank loans | 29,934,516 | - |
| Nominal value of bonds | 50,000,000 | 50,000,000 |
| Up-front fees not yet charged to income statement | (174,455) | (234,000) |
| Bonds | 49,825,545 | 49,766,000 |
| Non-current loans | 79,760,061 | 49,766,000 |
| Bank overdrafts | 21,850,000 | - |
| Current loans | 21,850,000 | - |
Sonae Capital SGPS – 2007/2012 1 st Bond Issue , amounting to 20,000,000 euro, reimbursable after 5 years, in one instalment on 31 December 2012, unless reimbursement is anticipated either totally or partially, which can take place on 31 December 2010.
Bonds Sonae Capital 2007/2012 2 nd Bond issue, amounting to 30,000,000 euro, repayable after 5 years, in one instalment, on 31 December 2012.
These bond issues pay interest every six months at Euribor six month interest rates plus spreads which vary between 0.50% and 0.60%.
The caption non current bank loans includes a commercial paper programme, with subscription guarantee, launched on 14 March 2008, valid for a five year period, with a maximum limit of 30,000,000 euro.
The caption current bank loans includes a commercial paper programme, without subscription guarantee, launched on 28 March 2008, valid for a ten year period, which may be extended at the option of the Company, with a maximum limit of 60,000,000 euro.
The above loans are not guaranteed, and their fair value is considered to be close to their book value, in view of the fact that interest payable on them is at variable market rates.
Derivatives are booked at fair value (Note 11).
The nominal value of the loans and the estimated nominal values of interest to be paid on them have the following maturity dates:
| 31.December.2008 | 31.December.2007 | |||
|---|---|---|---|---|
| Capital | Interest | Capital | Interest | |
| N+1 | 21,850,000 | 3,499,342 | - | 2,684,000 |
| N+2 | 20,000,000 | 2,576,018 | - | 2,684,000 |
| N+3 | - | 2,576,018 | 20,000,000 | 2,684,000 |
| N+4 | 30,000,000 | 2,583,076 | - | 1,610,400 |
| N+5 | 30,000,000 | 155,046 | 30,000,000 | 1,614,873 |
| After N+5 | - | - | - | - |
| 101,850,000 | 11,389,500 | 50,000,000 | 11,277,273 |
As at 31 December 2008 and 31 December 2007, available credit lines may be summarised as follows:
| 31.December.2008 | 31.December.2007 | |||
|---|---|---|---|---|
| Commitments less than 1Y |
Commitments of over 1 Y |
Commitments less than 1Y |
Commitments of over 1 Y |
|
| Amounts of credit lines available | 14,150,000 | 15,000,000 | 8,750,000 | - |
| Amount of credit lines contracted | 36,000,000 | 15,000,000 | 8,750,000 | - |
The hedging instruments used by the Company as at 31 December 2008 were mainly interest rate options (cash-flow hedges) entered into with the goal of hedging interest rate risk on loans in the amount of 50,000,000 euro whose net fair value was -306,449 euro. As at 31 December 2008, all derivatives and considered to be hedging instruments.
These interest rate hedging instruments are valued at fair value as at the balance sheet date, determined by valuations made by the Company using derivative valuation calculation schedules and external valuations when these schedules do not permit the valuation of certain instruments. The determination of fair value of these financial instruments is based, for swaps, on updating on the balance sheet date the future cash-flows resulting from the difference between the fixed interest rate of the fixed leg of the derivative and the variable interest rate indexed to the variable leg of the derivative. For options, fair value is determined using the Black-Scholes model and its variants.
The risk hedging principles generally used by the Company to contractually arrange hedging instruments are as follows:
The fair value of derivatives are shown as follows:
| Assets | Liabilities | |||
|---|---|---|---|---|
| 31.Dec.2008 | 31.Dec.2007 | 31.Dec.2008 | 31.Dec.2007 | |
| Non hedge accounting derivatives | - | - | - | - |
| Interest rate | - | - | - | - |
| Hedge accounting derivatives | ||||
| Interest rate | - | - | 306,449 | - |
| Other derivatives | - | - | - | - |
| 0 | 0 | 306,449 | 0 |
As at 31 December 2008 and 31 December 2007, these captions were made up as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Other creditors | ||
| Group companies - Short term loans: | ||
| SC - Insurance and Risk Services, SGPS, SA | 38,793,000 | - |
| Interlog, SGPS, SA | 20,289,000 | - |
| Spinarq Arquitectura e Projectos, SA | 35,000 | - |
| Pargeste, SGPS, SA | 14,400 | - |
| Other creditors | 99,578 | 1,994 |
| 59,230,978 | 1,994 |
Loans obtained from group companies bear interest at market rates and are repayable within one year.
As at 31 December 2008 and 31 December 2007, these captions were made up as follows:
| 31.December.2007 | |
|---|---|
| 28,326 | 25 |
| 314,842 | - |
| 800,023 | 7,457 |
| 33,569 | - |
| 6,788 | - |
| 306,449 | - |
| 1,489,997 | 7,482 |
| 31.December.2008 |
Derivative hedging instruments used by the Company and in force as at 31 December 2008, relate to swaps and interest rate options (cash-flow hedges) entered into with the aim of hedging interest rate risk on loans in the amount of 50,000,000 euro, whose fair value was - 306,449 euro.
As at 31 December 2008 external supplies and services can be detailed as follows:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Operational rents | 12,864 | - |
| Insurance costs | 68,846 | - |
| Travelling expenses | 95,841 | - |
| Fees | 11,020 | - |
| Services obtained | 361,433 | 2,011 |
| Other services | 10,644 | 468 |
| 560,648 | 2,479 |
As at 31 December 2008, the Company had operational lease contracts, as a lessee, whose minimum lease payments (fixed income) had the following payment schedule:
| 31.December.2008 | |
|---|---|
| N+1 | 13,834 |
| N+2 | 13,834 |
| N+3 | 13,834 |
| N+4 | 13,834 |
| 55,336 |
As at 31 December 2008, Staff costs are made up as follows:
| 31.December.2008 | |
|---|---|
| Governing bodies' remunerations | 1,093,959 |
| Social security contributions | 59,876 |
| Other staff costs | 13,591 |
| 1,167,426 |
As at 31 December 2008 net financial expenses can be detailed as follows:
| 31.December.200831.December.2007 | ||
|---|---|---|
| Interest payable and similar expenses | ||
| Interest arising from: | ||
| Bank loans | (1,588,348) | - |
| Bonds | (2,791,156) | (7,456) |
| Other | (271,563) | (1) |
| Other financial expenses | (247,877) | (122) |
| (4,898,944) | (7,579) | |
| Interest receivable and similar income | ||
| Interest income | 5,544,698 | 8,301 |
| 5,544,698 | 8,301 | |
| Net financial expenses | 645,754 | 722 |
As at 31 December 2008, Taxation is made up as follows:
| 31.December.2008 Total |
31.December.2007 Total |
|
|---|---|---|
| Current tax | 1,518 | - |
| Deferred tax | (282,251) | - |
| (280,733) | - |
The reconciliation between the profit before taxation and the tax charge for the periods ended 31 December 2008 and 2007 is:
| 31.December.2008 | 31.December.2007 | ||
|---|---|---|---|
| Total | Total | ||
| Profit before income tax | (1,129,004) | (2,012) | |
| Difference between accounting and tax of capital gains/(losses) | 11,361 | (249,600) | |
| Taxable Profit | (1,117,643) | (251,612) | |
| Recognition of tax losses originating deferred taxes | 1,117,643 | 251,612 | |
| - | - | ||
| Income tax rate in Portugal | 25.00% | 25.00% | |
| - | - | ||
| Effect of increases or decreases in deferred taxes | (282,251) | - | |
| Autonomous taxes | 1,518 | - | |
| Taxation | (280,733) | - | |
| Effective tax rate | - | - |
| 31.December.2008 | |||
|---|---|---|---|
| Tax losses | To be used until | ||
| Generated in 2007 | 251,612 | 2013 | |
| Generated in 2008 | 1,117,643 | 2014 |
As at 31 December 2008 deferred tax assets related with tax losses originated in 2008 and 2007, in the amount of 342,314 euro, were recorded.
Earnings per share for the periods ended 31 December 2008 and 2007 were calculated taking into consideration the following amounts:
| 31.December.2008 | 31.December.2007 | |
|---|---|---|
| Net profit | ||
| Net profit taken into consideration to calculate basic earnings per share (Net profit for the period ) |
(848,271) | (2,012) |
| Effect of dilutive potential shares | - | - |
| Net profit taken into consideration to calculate diluted earnings per share | (848,271) | (2,012) |
| Number of shares | ||
| Weighted average number of shares used to calculate basic earnings per share |
250,000,000 | 250,000,000 |
| Weighted average number of shares used to calculate diluted earnings per share |
250,000,000 | 250,000,000 |
| Earnings per share (basic and diluted) | (0.003393) | (0.000008) |
The accompanying financial statements were approved by the Board of Directors and authorized for issue on 25 March 2009.
In the period ended 31 December 2008 shareholders' loan contracts were entered into with the following companies:
In the period ended 31 December 2008 short-term loan contracts were entered into with the following companies:
As at 31 December 2008 amounts owed by affiliated undertakings can be summarized as follows:
| Closing Balance |
|---|
| 156,286,300 |
| 1,235,000 |
| 157,521,300 |
As at 31 December 2008 amounts owed to affiliated undertakings can be summarized as follows:
| Companies | Closing Balance |
|---|---|
| SC - Insurance and Risk Services, SGPS, SA | 38,793,000 |
| Interlog, SGPS, SA | 20,289,000 |
| Spinarq Arquitectura e Projectos, SA | 35,000 |
| Pargeste, SGPS, SA | 14,400 |
| 59,131,400 |
(This is a translation of a report originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails)
Porto, 25 March 2009
________________________________________ DELOITTE & ASSOCIADOS, SROC, S.A. Represented by António Manuel Martins Amaral
Lugar do Espido, Via Norte, Maia Share Capital: € 250,000,000.00 Maia Commercial Registry and Fiscal Number 508 276 756 Sociedade Aberta
I hereby certify that, under the terms of Minute number two of the Shareholders' General Meeting held on 28 April 2009, the following proposals were approved:
One- "We propose that the the Report of the Board of Directors, the individual and the consolidated Financial Statements for 2008, including appendices thereto, are approved as presented."
Two- "Under the terms of the law and of the Articles of Association, the Board of Directors proposes to the Shareholders General Meeting that the 2008 Net Loss, of 848,270.54 euro (eight hundred and forty eight thousand two hundred and seventy euro and fifty four cents), is transferred to Retained Earnings."
Maia, 28 April 2009
The Company's Secretary
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