Interim / Quarterly Report • Aug 29, 2016
Interim / Quarterly Report
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ESTORIL-SOL, SGPS, S.A. Capital social integralmente realizado 59.968.420 Euros Sociedade Anónima com sede na Av. Dr. Stanley Ho, Edifício do Casino Estoril, 2765-190 Estoril - Cascais
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| Governing Bodies | 3 |
|---|---|
| Management Report | 5 |
| Notes to the Board of Directors Report | 15 |
| Holders of qualified shareholdings | 17 |
| Consolidated Financial Statements and Notes | 19 |
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| Chairman Deputy Chairman Secretary |
- Pedro Canastra de Azevedo Maia - Tiago Antunes da Cunha Ferreira de Lemos - Marta Horta e Costa Leitão Pinto Barbosa |
|---|---|
| ADVISORY BOARD | |
| Chairman | - Rui José da Cunha |
| REMUNERATION COMMITTEE | |
| - Pansy Catilina Chiu King Ho - Jorge Armindo de Carvalho Teixeira - Calvin Ka Wing Chann |
|
| BOARD OF DIRECTORS | |
| Chairman Deputy-Chairmen Members |
- Stanley Hung Sun Ho - Mário Alberto Neves Assis Ferreira - Patrick Wing Ming Huen - Pansy Catilina Chiu King Ho - Ambrose Shu Fai So - Man Hin Choi - António José de Melo Vieira Coelho - Vasco Esteves Fraga - Jorge Armindo de Carvalho Teixeira - Calvin Ka Wing Chann - Miguel António Dias Urbano de Magalhães Queiroz |
| EXECUTIVE COMMITTEE | |
| Chairman Deputy-Chairmen |
Pansy Catilina Chiu King Ho Jorge Armindo de Carvalho Teixeira Vasco Esteves Fraga Calvin Ka Wing Chann |
| AUDIT BOARD | |
| Chairman Deputy-Chairmen Alternates |
- Mário Pereira Pinto - António José Alves da Silva - Manuel Martins Lourenço - Armando do Carmo Gonçalves |
| COMPANY SECRETARY | |
| Secretary: Alternate: |
- Carlos Alberto Francisco Farinha - Artur Alexandre Conde de Magalhães Mateus |
| STATUTORY AUDITOR | - Lampreia, Viçoso & Associado, SROC, Ltd - Represented by José Martins Lampreia |
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Estoril Sol, S.A. was incorporated on 25 June 1958 and its company object is "the operation of the gambling concession, on an exclusive basis, in the Estoril permanent area, including other related trade and industries".
On 18 March 2002, ESTORIL-SOL, SA modified its legal status to "Holding Company, SGPS", Public Corporation, thereby no longer directly conducting any business activities, and such business is now to be conducted by various associated undertakings which have been incorporated for this purpose.
The Company held indirectly through subsidiaries interests in the tourism sector, in particular, in gaming activities at casinos. The Company owns the Game Concessions of Estoril (Casino do Estoril and Casino Lisboa) and Póvoa de Varzim.
At 30 th June 2016, the share capital of ESTORIL-SOL, S.G.P.S., S.A. was 59.628.420 Euros, represented by 11.993.684 shares with a nominal unit value of 5 (five) Euros, of which 6.116.779 were registered shares and 5.876.905 bearer shares.
At the time this report was prepared, ESTORIL SOL, SGPS, S.A. held 62.565 treasury shares, with no trading taking place during the financial year.
During the first semester of 2016, the Company, did not sold or acquired own shares.
The Company's shares are listed on the Lisbon Stock Exchange since February 14, 1986.
The price and trading volume of Estoril-Sol, SGPS, SA securities, on the dates of reporting to the market during the year 2016 were according table below:
| Date for disclosing Estoril-Sol, SGPS, S.A. , information | |||||||
|---|---|---|---|---|---|---|---|
| Disclosure | Date | Qtd | Open | High | Low | Close | |
| Annual results for 2015 2016, 1st Quarter results |
29/04/2016 31/05/2016 |
95 28 |
1,35 1,55 |
1,35 1,55 |
1,35 1,55 |
1,35 1,55 |
|
| Dividend payment (2015) | 22/06/2016 | 125 | 1,62 | 1,62 | 1,62 | 1,62 |
As at June 30th, 2016 the Company had two reference shareholders, which control 90,46% of the share capital, as infographics below:
During June 2016, the Company has made a dividend payment of 0,211€ per share related to the year 2015.
(a) - Holds 10% of its Share Capital
On June 30 th , 2016, ESTORIL-SOL, S.G.P.S., S.A. had the following stakes in the following subsidiaries:
ESTORIL-SOL (III) - TURISMO ANIMAÇÃO E JOGO, S.A., incorporated on 26 July 2001, headquartered in Estoril, the social object of which is the operation of games of chance in areas where this is permitted by law and, in addition, may also operate in the tourism, hotel, restaurant and entertainment industries, as well as providing consultancy services in those areas of activity. This company operates the Estoril and Lisbon Casinos.
Its share capital of EUR 34,000,000 is 100% held by ESTORIL-SOL, S.G.P.S., S.A.
VARZIM SOL - ANIMAÇÃO, TURISMO E JOGO, S.A., headquartered in Póvoa de Varzim, has the social object, in particular, of operating the gambling concession of Póvoa de Varzim. This company operates the Póvoa de Varzim Casino.
It has a share capital of EUR 33.650.000, 100% held by ESTORIL SOL, S.G.P.S., S.A..
ESTORIL SOL (V) - Investimentos Imobiliários, S.A. - Its share capital of EUR 50,000 is fully paid up by ESTORIL-SOL, S.G.P.S., S.A.. The Company is now idle, but owns a site located on maritime land in the parish of Ericeira.
DTH - DESENVOLVIMENTO TURÍSTICO E HOTELEIRO, SA – With a share capital of EUR 2,429,146, is 100% held by ESTORIL-SOL, S.G.P.S., S.A.. It owns a plot of land in Monte Estoril, where the former Miramar Hotel stood.
ESTORIL - SOL IMOBILIÁRIA, S.A. - With a share capital of EUR 7,232,570, it is 100% owned by ESTORIL SOL, S.G.P.S., S.A.. Its social object is the construction, promotion, management and sale of tourist complexes and real estate.
ESTORIL SOL - INVESTIMENTOS HOTELEIROS, S.A. - With a share capital of EUR 10,835,000 is 90% held by ESTORIL SOL, S.G.P.S., S.A., with the remaining 10% being held by the company itself.
ESTORIL SOL E MAR - Investimentos Imobiliários, S.A. - With a share capital of EUR 1.286.000, is fully paid up by ESTORIL-SOL, S.G.P.S., S.A..
ESTORIL-SOL DIGITAL – ONLINE GAMING PRODUCTS AND SERVICES, S.A. – with a Share Capital of EUR 500.000 is 100% held by ESTORIL-SOL (III) –TURISMO, ANIMAÇÃO E JOGO, S.A. The Company was founded in September 2015 in order to apply for an online gaming license.
The growth trend of gaming revenues started in 2015 continued in the first semester of 2016. During the first six months of 2016 the gross game revenues of the Estoril Sol Group grew 3,2% and amounted to 90,9 million Euros.
In the first semester of 2016 the Group's EBITDA increased by 7,9% and amounted to Euro 14,9 million.
For the first six months of 2016 the Group reported positive net results of 2,5 million Euros.
Pursuing a very careful selection of the investments, the Group made investments (CAPEX) during the first semester of 2016 in the total amount of approximately 1 million Euros.
In a concerted effort to financial stability and less dependence on third parties, the Group has consistently reduced its bank debt, this reduction resulted in a significant decrease in financial costs incurred by the Group. By the end of June 2016 the Group bank debt was 49,6 million Euros.
8
The recovery trend of gaming revenues growth rate that began in the second half of 2014 remained in the first six months of 2016, however this positive trend lost it empowerment compared to last year (2015), with special emphasis in the last couple of months of this semester, which resulted in a lower performance for the semester as an all. As consequence, the gaming revenues increased in the first semester of 2016 when
compared with the same period last year, 4,5% in the industry and 3,2% in the Estoril-Sol Group.
If this positive trend continues in the months to come, the year 2016 may continue the positive game revenue evolution cycle that began in 2015,and broke with a negative cycle observed since 2008 which caused accumulated game revenues losses of nearly 30% in Portugal.
The Estoril-Sol Group, through its subsidiaries, operates three of the four biggest casinos in Portugal, accounting for 64% of net income and taxes paid and generated by the activity in Portugal.
Revenues from gambling in Portugal during the first half of 2016 amounted to approximately 142,2 million Euros, an increase of 4,5% compared to last year which represents almost 6,1 million Euros.
In the same period the Group game revenues achieved 90,9 million Euros, an increase of 3,2% equivalent to 2,6 million Euros.
The other operating revenues of Estoril-Sol, restaurant and entertainment, grew by 2,6% to 4,2 million Euros. The increase in these revenues is partially justified by the game revenues increase and also for the strengthening and promotion of leisure and entertainment areas within the casinos operated by Estoril-Sol.
| Jun - 2016 | Jun - 2015 | Var % | |
|---|---|---|---|
| Gaming Revenue | 90.900.804 | 88.097.734 | 3,2% |
| Special Gaming Tax | -47.870.160 | -46.746.313 | a) |
| Effective Tax Rate | 53% | 53% | |
| Game Revenue - Net | 43.030.644 | 41.351.421 | 4,1% |
| Other revenue ( F&B / Entertainment ) | 4.247.834 | 4.139.046 | 2,6% |
| Operating costs | -32.289.471 | -31.592.627 | 2,2% |
| EBITDA | 14.989.007 | 13.897.840 | 7,9% |
| Amortization and Depreciation | -10.581.339 | -10.521.643 | 0,6% |
| Financial Costs | -1.845.166 | -2.588.035 | -29% |
| Income tax (IRC) | -7.000 | -8.700 | |
| Consolidated net result (1st semester) | 2.555.502 | 779.462 | -228% |
The operating cost increase by 2,2% mainly reflects this investment undertaken by the Group to streamline and increase the entertainment offer within the casinos.
a) Includes the amounts recorded in "Gaming taxes" as "Special Gaming tax (current)" and "Annual gaming tax ( difference to minimum grant )"
The Group improved its operating results by 7,9%, with a positive EBITDA of 14,9 million Euros for the first six months of 2016.
In a concerted effort to financial stability and less dependence on third parties, the Group has been successively reducing its bank debt. This reduction resulted in a significant decrease in financial costs incurred by the Group Estoril-Sol, a decrease of 29% over the first half of 2016 compared to same period last year. Estoril-Sol supported almost 1,8 million Euros with loan interests during the first six months of 2016.
The favorable combination of game revenues growth, substantial financial bank debt reduction and cost structure stability allowed the Group to show a positive consolidated net result of 2,5 million Euros for the first six months of 2016 compared to earnings of 0,7 million Euros in the previous year.
By analyzing the results at casino level, it is possible to conclude that only Casino Lisboa has a positive net result, approximately 7 million Euros. Still, it is important to highlight the fact that in the first six months of 2016, all Group casinos shown positive operational results (EBITDA).
It must be emphasize that these performances, with special focus over Casino da Póvoa, have been repeatedly penalized by tax rates applied
to game revenues, which in the case of Casino da Póvoa achieve a 62% effective tax rate over game revenues for the period ended June 2016, proving once more the high and inadequate levels of taxation over game revenues given the current situation of the Portuguese casinos.
Therefore, It will be prudent and realistic to foresee the continuation of moderate and gradual recovery of activity levels and operational results generated by the Group casinos, conditioned by the need to continue the consolidation budget process as well as the reduction of the Group financial bank debt.
During the first quarter of 2013, after a unanimous vote taken at the headquarters of the Portuguese Association of Casinos as well as within the Board of Estoril-Sol, the operating companies from the Group Estoril-Sol, have filed lawsuits against the State in which they seek to be restored the financial balance of Gaming Concessions. Such a claim is founded, among other reasons, because the State, through its actions and omissions has given rise to changes in circumstances that were the basis for the negotiation of the gaming concessions. Of them highlights the fact that it was assumed for tax basis a continuing and significant increase of gaming revenue throughout the concession period. Despite not having checked this proposition due to the economic climate and as a result of the State attitude in relation to online gambling and illegal gambling, among others, it continued to require them to pay very high taxes, calculated on revenue that the Concessionaires did not obtain. Thus, remained no alternative to the Concessionaires that was not to challenge with the competent Administrative and Fiscal Courts the settlements of tax to which they were presented, and for that purpose submit the necessary judicial guarantees. However by the time of approval of this report, and despite the fact that all tax settlements were contested by the Group, all taxes are without exception, or paid or its payment was legally postponed under Decree-Law 1/2015, and for this reason the Group Estoril-Sol does not have any overdue debt related with game taxes.
On the 28th June 2015 the online gambling regulation approved by decree-law 66/2015 entered into force. This regulation now applicable, approved by the Government, represents, once again, a penalty to the gambling concessionaires unilaterally terminating the exclusive right of exploitation of games of fortune and chance in Portugal, - a right by which the concessionaires paid considerable sums and assumed significant additional obligations - the law published, puts them in equal circumstances as the offenders of the past who, in the meantime, managed to illegally build their customer database, key factor to ensure the success of this business, being noticeable by the studies conducted, that the current gambling concessionaires little or nothing would be able to benefit, in the future, from the law deliberated in the meantime, in order to balance their operating accounts.
Between the 30th of June 2016 and the date of this report, no relevant facts occurred that could materially affect the financial position and the future results of Estoril-Sol, SGPS,S.A. and the other Companies of the Group, in addition to the reported below:
-Within the online gaming activities, which is carried out through Estoril Sol Digital, Online Gaming Products and Services, S.A, a subsidiary company of Estoril Sol (III) – Turismo, Animação e Jogo, S.A., a company owned by the issuer (Estoril-Sol, SGPS, S,A,), signed with Vision Gaming Holding Limited, a company based in Malta, an association agreement, through which it holds a minority interest, corresponding to 49.9998% of the share capital of Estoril Sol Digital, keeping the Estoril Sol (III) SA most of the capital and votes in that company (Estoril Sol Digital, Online Gaming Products and Services, S.A.). From this operation resulted no gains/losses for the Estoril-Group, as the partial sale of the capital have been carried out by the same value of its constitution.
Within the terms of paragraph c) nº1 of article 246 of Portuguese Securities Code, we hereby inform you that to the best of our knowledge:
Estoril, 27th July, 2016
The Board of Directors:
| - Chairman | - Stanley Hun Sun Ho |
|---|---|
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Information regarding the securities issued by ESTORIL-SOL, S.G.P.S., and by companies with which the Company is in controlling or group relationship, which are owned by the members of the Corporate Offices of the Company on 30th June 2016:
Stanley Hung Sun Ho – Chairman of the Board of Directors
Patrick Huen – Vice-Chairman of the Board of Directors
Mário Alberto Neves Assis Ferreira – Vice-Chairman of the Board of Directors
Pansy Catilina Ho – Member of the Board of Directors
Ambrose So – Member of the Board of Directors
Man Hin Choi – Member of the Board of Directors
António José de Melo Vieira Coelho – Member of the Board of Directors
Vasco Esteves Fraga – Member of the Board of Directors
Jorge Armindo de Carvalho Teixeira – Member of the Board of Directors
Calvin Ka Wing Chann – Member of the Board of Directors
Miguel António Dias Urbano de Magalhães Queiroz – Member of the Board of Directors
Rui José da Cunha – Director of the Advisory Board
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On 30th June 2016, ESTORIL SOL, S.G.P.S., S.A. held 62.565 treasury shares, and as FINANSOL - SOCIEDADE DE CONTROLO, S.G.P.S., S.A., on 30th June 2016, held 6.930.604 shares of ESTORIL-SOL, S.G.P.S., S.A., it was a direct holder of 57,79% of the share capital and 58,09% of the voting rights.
The members of the Board of Directors and of the Advisory Board of the Companies which are controlled by or grouped under ESTORIL-SOL, held 255,698 shares of ESTORIL-SOL, S.G.P.S., S.A., corresponding to 2,1% of the share capital and voting rights.
Therefore, in overall terms, the direct and indirect stake of FINANSOL in the capital of ESTORIL-SOL is 57,79%, and 60,23% to the voting rights.
On 30th June 2016, ESTORIL-SOL, S.G.P.S., S.A. held 62.565 treasury shares, and, as AMORIM – ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S., S.A. held 3.917.793 shares, this company was a direct holder of 32,67% of the share capital and 32,84% of the voting rights of ESTORIL SOL, S.G.P.S., S.A..
Mr. José Américo Amorim Coelho, held 34,915 shares of ESTORIL-SOL, S.G.P.S., S.A., corresponding to 0,29% of the share capital and voting rights.
Therefore, in overall terms, the direct and indirect stake of AMORIM - ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S., SA in the share capital of ESTORIL-SOL, S.G.P.S., S.A. was, on 30th June 2016, 32,67% and 33,13% of the voting rights.
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(Amounts in Euros)
| ASSETS | Notes | Jun - 16 | Dec-15 | |
|---|---|---|---|---|
| NON-CURRENT ASSETS: | ||||
| Tangible fixed assets | ||||
| Reversible to the State | 10 | 44.360.095 | 49.062.404 | |
| Not reversible to the State | 10 | 56.592.752 | 57.724.052 | |
| Tax deductions on investments | - | (16.505.646) | (18.341.549) | |
| Total non-current assets | 84.447.201 | 88.444.907 | ||
| Intangible assets | 11 | 61.141.965 | 66.962.403 | |
| Investment properties | - | 201.571 | 204.346 | |
| Other non current assets | - | 36.616 | 31.623 | |
| 145.827.353 | 155.643.279 | |||
| CURRENT ASSETS: | ||||
| Inventories | - | 6.759.377 | 6.753.442 | |
| Accounts receivable - trade | - | 290.717 | 249.575 | |
| Other accounts receivable | - | 1.941.972 | 1.020.032 | |
| Cash and cash equivalents | 12 | 8.116.580 | 10.883.646 | |
| Total current assets | 17.108.646 | 18.906.695 | ||
| Total assets | 162.935.999 | 174.549.974 | ||
| EQUITY and LIABILITIES | ||||
| EQUITY: | ||||
| Capital | 13 | 59.968.420 | 59.968.420 | |
| Treasury shares | 13 | (708.306) | (708.306) | |
| Share issue premiuns | 13 | 7.820.769 | 7.820.769 | |
| Legal Reserves | - | 6.821.678 | 6.614.782 | |
| Other Reserves and Retained earnings | - | (5.803.289) | (7.271.176) | |
| Consolidated net profit | - | 2.555.502 | 4.196.063 | |
| Total equity | 70.654.775 | 70.620.552 | ||
| LIABILITIES: | ||||
| NON-CURRENT LIABITIES: | ||||
| Financial debt | 14 | 3.124.753 | 5.003.232 | |
| Other accounts payable | 15 | 4.886.853 | 4.886.853 | |
| Provisions | - | 8.000.291 | 8.284.263 | |
| Total non-current liabilities | 16.011.897 | 18.174.348 | ||
| CURRENT LIABILITIES: | ||||
| Financial debt | 14 | 46.542.303 | 50.715.146 | |
| Other accounts payable | 15 | 29.727.024 | 35.039.927 | |
| Total current liabilities | 76.269.327 | 85.755.073 | ||
| Total liabilities | 92.281.224 | 103.929.421 | ||
| Total equity and liabilities | 162.935.999 | 174.549.973 |
| 1st Semester | 2nd Quarter | ||||
|---|---|---|---|---|---|
| Notes | 2016 | 2015 | 2016 | 2015 | |
| REVENUE: | |||||
| Gaming revenues | 6 | 90.900.804 | 88.097.734 | 44.480.594 | 43.983.163 |
| Gaming taxes | 6 | (47.870.160) | (46.746.313) | (23.584.305) | (23.307.370) |
| 43.030.644 | 41.351.421 | 20.896.290 | 20.675.793 | ||
| Other operating revenue | 6 | 4.247.834 | 4.139.046 | 2.301.983 | 2.314.488 |
| 47.278.477 | 45.490.467 | 23.198.273 | 22.990.281 | ||
| OPERATING EXPENSES: | |||||
| Cost of sales | - | (1.320.837) | (1.276.848) | (685.537) | (660.063) |
| Supplies and external services | 7 | (13.874.219) | (12.819.672) | (6.937.375) | (6.367.153) |
| Wages and salaries | 8 | (15.484.555) | (15.580.888) | (7.700.284) | (8.011.184) |
| Depreciation and amortization | - | (10.581.339) | (10.521.643) | (5.220.347) | (5.228.575) |
| Impairments - accounts receivable ( (increases) / reversals ) | 900 | (80.364) | 450 | (41.689) | |
| Provisons ( (increases) / reversals ) | - | (2.488) | (598.000) | (2.488) | (598.000) |
| Impairment of non-depreciable / amortizable investments | - | (6.733) | (4.745) | (3.389) | (4.745) |
| Other indirect taxes | - | (157.096) | (167.014) | (82.858) | (86.903) |
| Other operating expenses | - | (1.444.443) | (1.065.095) | (739.276) | (610.798) |
| Total operating expenses | (42.870.810) | (42.114.270) | (21.371.104) | (21.609.109) | |
| Income before financial results and taxes | 4.407.667 | 3.376.197 | 1.827.169 | 1.381.172 | |
| FINANCIAL (LOSSES) AND GAINS: | |||||
| Financial losses | 9 | (1.860.667) | (2.598.457) | (918.555) | (1.272.233) |
| Financial gains | 9 | 15.501 | 10.421 | 7.776 | 6.028 |
| (1.845.166) | (2.588.036) | (910.780) | (1.266.205) | ||
| Income before taxes | 2.562.502 | 788.161 | 916.389 | 114.967 | |
| Income taxes | 14 | (7.000) | (8.700) | - | (8.700) |
| CONSOLIDATED NET INCOME | 5 | 2.555.502 | 779.461 | 916.389 | 106.267 |
| Attributable to: | |||||
| Equity holders of the parent Acionistas da empresa mãe |
2.555.502 | 779.461 | 916.389 | 106.267 | |
| Net result per share | 17 | 0,21 | 0,07 | 0,08 | 0,01 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODS ENDED 30th JUNE 2016 AND 2015
(Amounts in Euros)
| Share Capital |
Treasury Shares |
Issue Premiums | Legal Reserve | Other Reserves and Retained Earnings |
Consolidated net result of the year |
Total Equity |
|
|---|---|---|---|---|---|---|---|
| Balance at 01st January 2015 | 59.968.420 | (708.306) | 7.820.769 | 6.614.782 | (5.528.891) | (1.736.283) | 66.430.491 |
| Application of the consolidated net profit of the year ended 31st December 2014 |
- | - | - | - | (1.736.283) | 1.736.283 | - |
| Consolidated Other Comprehensive Income (OCI) of the period ended 30th June 2015 |
- | - | - | - | - | 779.461 | 779.461 |
| Balance at 30th June 2015 | 59.968.420 | (708.306) | 7.820.769 | 6.614.782 | (7.265.176) | 779.461 | 67.209.952 |
| Balance at 01st January 2016 | 59.968.420 | (708.306) | 7.820.769 | 6.614.782 | (7.271.176) | 4.196.063 | 70.620.552 |
| Application of the consolidated net profit of the year ended 31st December 2015 |
- | - | - | 206.896 | 1.467.887 | (4.196.063) | (2.521.280) |
| Consolidated Other Comprehensive Income (OCI) of the period ended 30th June 2016 |
- | - | - | - | - | 2.555.502 | 2.555.502 |
| Balance at 30th June 2016 | 59.968.420 | (708.306) | 7.820.769 | 6.821.678 | (5.803.289) | 2.555.502 | 70.654.775 |
| 1st Semester | 2nd Quarter | ||||
|---|---|---|---|---|---|
| Notes | 2016 | 2015 | 2016 | 2015 | |
| OPERATING ACTIVITIES: | |||||
| Receipts from clients | 93.265.018 | 90.393.324 | 45.850.819 | 45.452.370 | |
| Payments to suppliers | (17.154.577) | (15.978.260) | (8.674.529) | (7.299.479) | |
| Payments to staff | (13.821.813) | (13.587.676) | (6.833.917) | (6.991.847) | |
| Cash flow generated by operations | 62.288.627 | 60.827.388 | 30.342.373 | 31.161.044 | |
| Payment of income tax | (101.933) | (192.625) | (90.233) | (189.625) | |
| Payment of Special Gaming tax | (50.601.834) | (46.870.287) | (19.046.988) | (17.829.141) | |
| Other payments relating to the operating activity Cash flow from operating activities (1) |
(3.150.541) 8.434.319 |
(2.284.173) 11.480.303 |
(1.408.857) 9.796.296 |
(1.455.397) 11.686.881 |
|
| INVESTING ACTIVITIES: | |||||
| Receipts from: | |||||
| Interest and similar income | 15.501 | 10.421 | 7.776 | 6.028 | |
| 15.501 | 10.421 | 7.776 | 6.028 | ||
| Payments in respect of: | |||||
| Tangible fixed assets | (722.512) | (1.165.002) | (372.654) | (769.451) | |
| Intangible assets | (24.000) | - | (24.000) | - | |
| (746.512) | (1.165.002) | (396.654) | (769.451) | ||
| Cash flow from investment activities (2) | (731.011) | (1.154.581) | (388.879) | (763.423) | |
| FINANCING ACTIVITIES: | |||||
| Receipts from: | |||||
| Bank loans obtained | 193.031.877 | 305.011.730 | 99.218.270 | 109.002.843 | |
| 193.031.877 | 305.011.730 | 99.218.270 | 109.002.843 | ||
| Payments in respect of: | |||||
| Bank loans repaid | (199.007.854) | (314.412.509) | (105.448.089) | (118.504.236) | |
| Interest and similar costs | (1.937.745) | (2.697.554) | (862.608) | (1.204.430) | |
| Dividens | (2.512.356) | - | (2.512.356) | - | |
| (203.457.955) | (317.110.063) | (108.823.053) | (119.708.666) | ||
| Cash flow from financing activities (3) | (10.426.079) | (12.098.334) | (9.604.784) | (10.705.823) | |
| Variation in cash and cash equivalents (4)=(1)+(2)+(3) | (2.722.770) | (1.772.613) | (197.367) | 217.635 | |
| Cash and cash equivalents at the start of the period | 12 12 |
10.839.350 8.116.580 |
10.040.238 8.267.625 |
8.313.947 8.116.580 |
8.049.992 8.267.627 |
| Cash and cash equivalents at the end of the period | |||||
| The notes form an integral part of these financial statements | |||||
| 23 |
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The Estoril Sol Group, through its subsidiary and associated companies (Note 4), conducts business in gaming, the restaurant sector, entertainment and also real estate.
Estoril Sol, S.G.P.S, S.A. is the Holding Company of the Estoril Sol Group ("Group") and the shares representing its share capital are admitted for trading on a regulated market - the Euronext – as such, on 1 January 2005 it was obliged to prepare Consolidated Accounts pursuant to article 3 of Regulation (EC) no. 1606/2002, of the European Parliament and of the Council, of 19 July, following the Portuguese government's publication of Decree Law no. 35/2005, article 11.
The attached financial statements were prepared on the assumption of the continuity of operations, based on the books and accounting records of the companies included in the consolidation (Note 4), adjusted to comply with the provisions of the IAS 34 as adopted in the European Union and should be read together with the consolidated financial statements for the year ended 31st December 2015. The interim financial information now disclose was not subjected to an external audit or limited review.
During the period ended on 30 th June 2016, there were no changes in accounting policies in relation to those used in the preparation and presentation of the financial statements of the year ended on 31st December 2015, nor were any material errors recognised relating to previous periods.
The companies included in the consolidation, their registered offices, the method of consolidation adopted and the proportion of the capital effectively held on 30th June 2016 and 31st December 2015 are the following:
| Effective percentage | ||||
|---|---|---|---|---|
| Method of | of the capital held | |||
| Name | Head office | Consolidation | Jun-16 | Dec-15 |
| Estoril-Sol, S.G.P.S., S.A. | Estoril | Integral | Holding. Co. | Holding. Co. |
| Estoril-Sol (III) - Turismo, Animação e Jogo, S.A. | Estoril | Integral | 100 | 100 |
| Varzim Sol - Turismo, Jogo e Animação, S.A. | Póvoa de Varzim | Integral | 100 | 100 |
| Estoril-Sol V - Investimentos Imobiliários, S.A. | Estoril | Integral | 100 | 100 |
| DTH - Desenvolvimento Turistico e Hoteleiro, S.A. | Estoril | Integral | 100 | 100 |
| Estoril-Sol Imobiliária, S.A. | Estoril | Integral | 100 | 100 |
| Estoril-Sol - Investimentos Hoteleiros, S.A. | Estoril | Integral | 100 | 100 |
| Estoril Sol e Mar - Investimentos Imobiliários, S.A. | Estoril | Integral | 100 | 100 |
| Estoril-Sol Digital, Online Gaming Products and Services, S.A. | Estoril | Integral | 100 | 100 |
Estoril-Sol, SGPS, S.A. indirectly holds 33.33% of the company Parques do Tamariz, S.A., through Estoril Sol Imobiliária, S.A.
These holdings are presented at the value resulting from the equity pick-up method. Using this method, the financial statements include the part attributable to the Estoril Sol Group of the results recognised from the date on which the significant influence starts up to the date on which it effectively ends. Associate companies are entities in which the Estoril Sol Group has between 20% and 50% of the voting rights, or in which the Group has significant influence.
During the first quarter of 2016 the subsidiary company Parques do Tamariz, was dissolved, as it had no longer any assets and did not engage any economic activity. No additional losses resulted from this operation to the Group Estoril-Sol.
The segments reportable by the Group are based on the identification of segments in line with the financial information that is reported internally to the Board of Directors and which supports the Board in its evaluation of the performance of the businesses and in taking decisions with regard to the allocation of the resources to be used. The segments identified by the Group for reporting by segments, are therefore consistent with the way in which the Board of Directors analyses its business, corresponding to the Estoril Gaming Concession the Estoril Casino and Lisbon Casino, Póvoa Casino and Others (essentially including the effect of the holding companies and of the other operating activities of the Group).
| June - 2016 | ||||||
|---|---|---|---|---|---|---|
| Estoril Game Concession | ||||||
| Estoril | Lisboa | Póvoa | ||||
| Casino | Casino | Sub-Total | Casino | Other | Total | |
| Net assets | 36.321.368 | 79.131.789 | 115.453.156 | 41.143.522 | 6.339.321 | 162.935.999 |
| Net liabilities | 25.087.817 | 32.513.984 | 57.601.802 | 30.168.972 | 4.510.450 | 92.281.224 |
| Result of the segment | (860.410) | 6.993.200 | 6.132.790 | (2.606.587) | (970.701) | 2.555.502 |
| Investment assets: | ||||||
| - tangible fixed | 495.770 | 120.755 | 616.524 | 451.433 | 22.402 | 1.090.359 |
| June - 2015 | ||||||
| Estoril Game Concession | ||||||
| Estoril | Lisboa | Póvoa | ||||
| Casino | Casino | Sub-Total | Casino | Other | Total | |
| Net assets | 45.519.181 | 82.229.902 | 127.749.083 | 46.294.948 | 6.123.717 | 180.167.748 |
| Net liabilities | 34.753.803 | 39.002.420 | 73.756.223 | 34.743.409 | 4.458.164 | 112.957.796 |
| Result of the segment | (984.930) | 5.575.631 | 4.590.701 | (3.169.161) | (642.078) | 779.462 |
| Investment assets: |
On 30th June 2016 and 2015, the information by business segment, is as follows:
The consolidated operating income, in the years ended on 3th June 2016 and 2015, is split in the following manner:
| June - 2016 | ||||||
|---|---|---|---|---|---|---|
| Estoril Game Concession | Póvoa Game | |||||
| Concession | ||||||
| Estoril | Lisboa | Póvoa | ||||
| Nature | Casino | Casino | Sub-Total | Casino | Other | Total |
| Gaming revenues: - Slot Machines |
22.431.003 | 32.902.598 | 55.333.601 | 17.157.275 | 72.490.876 | |
| 7.309.064 | 7.517.655 | 14.826.719 | 3.510.753 | - | 18.337.472 | |
| - Table based gaming | 103.335 | 101.992 | - | 72.456 | ||
| - Progressive games prizes | 29.843.402 | (1.343) 40.418.910 |
70.262.312 | (29.536) 20.638.492 |
- | 90.900.804 |
| - | ||||||
| Gaming taxes: | ||||||
| - Special Gaming Tax (current) | (14.870.034) | (20.210.127) | (35.080.160) | (10.334.014) | - | (45.414.174) |
| - Annual Gaming Tax | ||||||
| ( difference to minimum grant ) | - | - | - | (2.455.986) | - | (2.455.986) |
| (14.870.034) | (20.210.127) | (35.080.160) | (12.790.000) | - | (47.870.160) | |
| Other operating revenues: | ||||||
| - F&B and Entertainment | 1.904.692 | 307.606 | 2.212.298 | 454.987 | - | 2.667.285 |
| - Tax deductions - Entertainment | 552.401 | 404.203 | 956.603 | 467.840 | - | 1.424.443 |
| - Supplementary income | 120.566 | 18.530 | 139.095 | 10.899 | - | 149.994 |
| - Other | 4.956 | - | 4.956 | 1.155 | - | 6.111 |
| 2.582.615 | 730.338 | 3.312.953 | 934.881 | - | 4.247.834 | |
| 17.555.984 | 20.939.122 | 38.495.105 | 8.783.373 | - | 47.278.477 |
| June - 2015 | ||||||
|---|---|---|---|---|---|---|
| Estoril Game Concession | Póvoa Game Concession |
|||||
| Estoril | Lisboa | Póvoa | ||||
| Nature | Casino | Casino | Sub-Total | Casino | Other | Total |
| Gaming revenues: | ||||||
| - Slot Machines | 22.102.401 | 31.137.314 | 53.239.715 | 15.634.086 | - | 68.873.801 |
| - Table based gaming | 8.046.438 | 7.341.473 | 15.387.911 | 3.989.300 | - | 19.377.211 |
| - Progressive games prizes | (84.190) | (51.040) | (135.230) | (18.048) | - | (153.278) |
| 30.064.649 | 38.427.747 | 68.492.396 | 19.605.338 | - | 88.097.734 | |
| Gaming taxes: | ||||||
| - Special Gaming Tax (current) | (15.074.420) | (19.239.394) | (34.313.814) | (9.811.693) | - | (44.125.507) |
| - Annual Gaming Tax ( difference to minimum grant ) |
- | - | - | (2.620.807) | - | (2.620.807) |
| (15.074.420) | (19.239.394) | (34.313.814) | (12.432.500) | - | (46.746.313) | |
| Other operating revenues: | ||||||
| - F&B and Entertainment | 1.689.225 | 239.145 | 1.928.370 | 388.192 | - | 2.316.562 |
| - Tax deductions - Entertainment | 546.000 | 366.000 | 912.000 | 758.856 | - | 1.670.856 |
| - Supplementary income | 114.474 | 23.491 | 137.965 | 9.642 | - | 147.607 |
| - Other | 3.141 | - | 3.141 | 879 | - | 4.020 |
| 2.352.840 | 628.636 | 2.981.476 | 1.157.569 | - | 4.139.046 | |
| 17.343.069 | 19.816.989 | 37.160.058 | 8.330.407 | - | 45.490.467 |
Income from the segments comes from transactions with external customers. There are no transactions between segments. The accounting policies of each segment are the same as those of the Group.
In the periods ended on 30th June 2016 and 2015, external supplies and services were as follows:
| Jun - 2016 | Jun - 2015 | |
|---|---|---|
| Gifts to customers | 2.232.978 | 2.065.900 |
| Subcontracts | 1.744.458 | 1.457.571 |
| Energy and other fluids | 1.415.904 | 1.397.653 |
| Conservation and repairs | 1.388.034 | 1.350.751 |
| Cleaning and laundry | 1.212.756 | 1.125.847 |
| Specialized work | 1.113.662 | 893.655 |
| Advertising | 993.445 | 920.985 |
| Royalties | 939.520 | 977.599 |
| Surveillance and security | 789.384 | 774.113 |
| Rents | 589.941 | 561.714 |
| Insurance | 375.667 | 377.135 |
| Fees | 275.740 | 214.606 |
| Communication | 235.771 | 226.174 |
| Travel and hotels | 133.313 | 100.059 |
| Other | 433.645 | 375.910 |
| 13.874.219 | 12.819.672 |
In the periods ended on 30th June 2016 and 2015, staff costs were as follows:
| Jun - 2016 | Jun - 2015 | |
|---|---|---|
| Remuneration of governing bodies | 1.404.141 | 1.445.149 |
| Remuneration of staff | 10.510.905 | 10.404.524 |
| Indemnities | 50.713 | 77.500 |
| Charges on remuneration | 2.709.016 | 2.785.185 |
| Insurance | 91.547 | 87.465 |
| Social charges | 545.182 | 505.539 |
| Other | 173.051 | 275.526 |
| 15.484.555 | 15.580.888 |
Financial costs and income for the periods ended on 30th June 2016 and 2015 is broken down as follows:
| Financial Costs | Jun - 2016 | Jun - 2015 |
|---|---|---|
| Interest borne: | ||
| Financing from banks | (1.045.562) | (1.738.793) |
| Finance and operating leasing | (34.762) | (38.903) |
| (1.080.325) | (1.777.696) | |
| Other financing costs: | ||
| Comissions and similar charges | (549.229) | (648.298) |
| Other financial costs | (231.114) | (172.464) |
| (1.860.667) | (2.598.458) | |
| Financial Income | Jun - 2016 | Jun - 2015 |
| Exchange gains | 9.660 | 7.613 |
| Other | 5.841 | 2.808 |
| 15.501 | 10.421 | |
| Net financial costs | (1.845.166) | (2.588.036) |
During the periods ended on 30th June 2016 and 2015, the movement in tangible assets, as well as in the respective depreciation and accumulated impairment losses, was as follows:
| January to June 2016 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Land | Buildings and other constructions |
Basic equipment |
Vehicles | Office equipment |
Other tangible fixed assets |
Fixed assets in progress |
Total | |
| Gross amount: | ||||||||
| Opening balance | 16.513.836 | 197.253.396 | 119.447.590 | 66.744 | 4.330.748 | 82.292 | 131.617 | 337.826.223 |
| Acquisitions | - | 163.152 | 879.139 | - | 48.068 | - | - | 1.090.359 |
| Adjustments / Transfers | - | - | - | - | - | - | (60.938) | (60.938) |
| Write-off | - | - | (224.907) | - | (2.704) | - | - | (227.611) |
| Closing balance | 16.513.836 | 197.416.548 | 120.101.822 | 66.744 | 4.376.112 | 82.292 | 70.679 | 338.628.033 |
| Depreciation and accumulated | ||||||||
| impairment losses: | ||||||||
| Opening balance | - | 129.470.334 | 97.760.983 | 45.412 | 3.682.050 | 80.995 | - | 231.039.774 |
| Depreciation of the year | - | 3.821.045 | 2.917.689 | 4.785 | 105.674 | 361 | - | 6.849.554 |
| Disposals | - | - | - | - | - | - | - | - |
| Write-off | - | - | (211.428) | - | (2.712) | - | - | (214.140) |
| Closing balance | - | 133.291.379 | 100.467.244 | 50.197 | 3.785.012 | 81.356 | - | 237.675.188 |
| Net amount | 16.513.836 | 64.125.169 | 19.634.578 | 16.547 | 591.100 | 936 | 70.679 | 100.952.847 |
| January to June 2015 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Land | Buildings and other constructions |
Basic equipment |
Vehicles | Office equipment |
Other tangible fixed assets |
Fixed assets in progress |
Total | |
| Gross amount: | ||||||||
| Opening balance | 16.513.836 | 197.253.396 | 113.891.718 | 66.744 | 3.928.055 | 82.292 | 364.823 | 332.100.864 |
| Acquisitions | - | - | 1.066.476 | - | 27.169 | - | 272.751 | 1.366.396 |
| Adjustments / Transfers | - | - | 113.456 | - | - | - | (113.456) | - |
| Write-off | - | - | (669.347) | - | (4.300) | - | - | (673.647) |
| Closing balance | 16.513.836 | 197.253.396 | 114.402.303 | 66.744 | 3.950.924 | 82.292 | 524.118 | 332.793.613 |
| Depreciation and accumulated impairment losses: |
||||||||
| Opening balance | - | 121.688.433 | 92.786.527 | 35.476 | 3.538.941 | 80.249 | - | 218.129.626 |
| Depreciation of the year | - | 3.899.175 | 2.848.603 | 4.968 | 74.385 | 385 | - | 6.827.516 |
| Disposals | - | - | - | - | - | - | - | - |
| Write-off | - | - | (668.461) | - | (4.174) | - | - | (672.635) |
| Closing balance | - | 125.587.608 | 94.966.669 | 40.444 | 3.609.152 | 80.634 | - | 224.284.507 |
| Net amount | 16.513.836 | 71.665.788 | 19.435.634 | 26.300 | 341.772 | 1.658 | 524.118 | 108.509.106 |
The breakdown of intangible assets on 30 th June 2016 and 31st December 2015 is as follows:
| Net |
|---|
| Assets |
| 26.657.108 |
| 9.387.194 |
| 25.073.664 |
| 61.117.965 |
| 24.000 |
| 61.141.965 |
(a) -The Board of Directors of Turismo de Portugal, IP, at a meeting held on 25 July 2016, decided under the Legal Framework for Games and Online Betting (RJO), approved by Decree-Law No. 66/2015 of 29 April, assign to Estoril Sol Digital, Online Gaming Products and Services, SA, a license for online gambling exploration, which will operate under the internet domain www.estorilsolcasinos.pt/ . This license shall be valid for an initial period of three years from the date of issue, expiring on July 24th, 2019, if not renewed, under the terms and conditions set out in RJO. Estoril Sol Digital, began exploring the online gambling activity in the web site mentioned above on the same day the license was issued, ie 25th July 2016.
| December - 2015 | ||||
|---|---|---|---|---|
| Gross | Accumulated | Net | ||
| Assets | Amortization | Assets | ||
| Estoril Gaming Concession | ||||
| - Casino Estoril | 153.576.455 | (123.826.853) | 29.749.602 | |
| - Casino Lisboa | 30.000.000 | (19.584.235) | 10.415.765 | |
| Póvoa Gaming Concession - Casino da Póvoa | 77.034.109 | (50.237.073) | 26.797.036 | |
| 260.610.564 | (193.648.161) | 66.962.403 |
On 30 th June 2016 and 31st December 2015, this caption was broken down as follows:
| Jun- 2016 | Dec - 2015 | |
|---|---|---|
| Cash | 7.416.165 | 8.643.414 |
| Bank Deposits: - Immediately avaiable bank deposits |
677.548 | 2.210.633 |
| Other teasury applications Cash and bank deposits |
22.866 8.116.579 |
29.599 10.883.646 |
| Bank overdrafts Cash and cash equivalents |
- 8.116.580 |
(44.296) 10.839.350 |
On 30th June 2016 and 31st December 2015, the share capital of the Company is represented by 11,993,684 shares, of which 6,116,779 are registered shares and 5,876,905 bearer shares, of a nominal unit value of 5 Euros, which confer the right to a dividend.
The share capital issued by the Company on 30th June 2016 and on 31st December 2015 is broken down as follows:
| Jun - 2016 | Dec - 2015 | |
|---|---|---|
| Share capital | 59.968.420 | 59.968.420 |
| Treasury shares | (708.306) | (708.306) |
| Issue premiums | 7.820.769 | 7.820.769 |
| 67.080.883 | 67.080.883 |
The share capital is represented by the following categories of shares:
| Data | Nominal value | No. of shares |
|---|---|---|
| 3oth of June 2016 | ||
| Registered | 5€ | 6.116.779 |
| Bearer | 5€ | 5.876.905 |
| 11.993.684 | ||
| 31st of December 2015 | ||
| Registered | 5€ | 6.116.779 |
| Bearer | 5€ | 5.876.905 |
| 11.993.684 |
| Year of Acquisition | No. Shares | Nominal value | Total nominal | Total premiums | Total |
|---|---|---|---|---|---|
| 2001 | 34.900 | 5 | 174.500 | 280.945 | 455.445 |
| 2002 | 43 | 5 | 215 | 184 | 399 |
| 2007 | 22 | 5 | 110 | 88 | 198 |
| 2008 | 27.600 | 5 | 138.000 | 114.264 | 252.264 |
| Total | 62.565 | 312.825 | 395.481 | 708.306 |
Treasury shares were acquired by the Company as follows:
Legal persons with more than a 20% holding in the share capital:
Finansol, Sociedade de Controlo, S.G.P.S, S.A., with 60.2%
Amorim – Entertainment e Gaming International, S.G.P.S., S.A., with 35.87%.
On 30 th June 2016 and 31st December 2015, this caption was broken down as follows:
| Jun - 2016 | Dec - 2015 | ||||
|---|---|---|---|---|---|
| Nature of the financing | Nominal | Balance sheet | Nominal | Balance sheet | |
| Value | Value | Value | Value | ||
| Non-current financing: | |||||
| - Bank loans | 3.114.041 | 3.114.041 | 4.992.520 | 4.992.520 | |
| - Financial leasing | 10.712 | 10.712 | 10.712 | 10.712 | |
| 3.124.753 | 3.124.753 | 5.003.232 | 5.003.232 | ||
| Current financing: | |||||
| - Bank loans | 3.750.000 | 3.787.179 | 3.750.000 | 3.789.885 | |
| - Commercial paper | 17.000.000 | 16.705.106 | 30.000.000 | 29.625.669 | |
| - Current accounts | 26.045.600 | 26.045.600 | 17.168.100 | 17.246.461 | |
| - Bank overdrafts (Note 12) | - | - | 44.296 | 44.296 | |
| - Financial leasing | 4.418 | 4.418 | 8.835 | 8.835 | |
| 46.800.018 | 46.542.303 | 50.971.231 | 50.715.146 | ||
| 49.924.771 | 49.667.056 | 55.974.463 | 55.718.378 |
The average interest rates for financing, borne by the Group, including commissions and other charges, come within an interval of between 4,74% and 6,5%.
Some of the financing operations, mainly bank loans, include commitments to maintain certain financial ratios based on contractually negotiated limits (financial covenants).
These ratios are:
On the 30 th June 2016 and 31st December 2015, these ratios were according the contractually negotiated limits.
The amount classified as non-current bank loans, for a total amount of 3.114.041 Euros, falls due in ac5cordance with the following schedule:
- 1.559.020 Euros in 2017; - 1.555.021 Euros in 2018;
Depending on the operating funds that are freed up, we feel the financial risk to which the associated undertakings are exposed is minimal, and the same understanding has prevailed in the examination carried out by financial institutions, as shown by the fact that assets guarantees are dispensed with for operations under contract.
The amount included in the column "Nominal value" corresponds to the contracted value that is still owing. The column "Balance sheet value" is added to the nominal value of financial charges already incurred but still not due, less interest and or commissions paid in advance.
On 30 th June 2016 and 31st December 2015, this caption was broken down as follows:
| Jun - 2016 | Dec - 2015 | |
|---|---|---|
| Other accounts payable - non-current | ||
| Annual payment - Difference to minumum grant | ||
| Installments payment schedule - approved for 2014 | 3.734.424 | 3.734.424 |
| Installments payment schedule - approved for 2015 | 1.152.429 | 1.152.429 |
| 4.886.853 | 4.886.853 | |
| Other accounts payable - current | ||
| Current suppliers | 3.041.841 | 4.021.681 |
| Suppliers of investments | 449.492 | 115.268 |
| State and Public Sector | ||
| Annual gaming payment | 6.436.656 | 10.965.250 |
| Annual payment - Difference to minumum grant | ||
| Decree 1/2015 - 10% over 50% rate of the annual gaming payment | 2.455.985 | 2.098.102 |
| Installments payment schedule - approved for 2015 | 576.215 | 576.215 |
| Special Gaming Tax (to be paid next month) | 5.750.647 | 6.436.312 |
| Social Security contribuitons | 720.919 | 635.457 |
| Other in favour of the State | 687.077 | 1.082.685 |
| Charges with holidays payable | 4.022.522 | 3.929.751 |
| Responsabilities for accumulated gaming premiums (note 16) | 1.775.428 | 1.847.883 |
| Other | 3.810.242 | 3.331.323 |
| 29.727.024 | 35.039.927 |
The Decree Law n º 29/88 of 3 August, down in paragraph 1 of Article 3, the concessionaire is obliged to pay an annual payment amounting to 50% of the gross gaming revenues. This payment cannot be, under any circumstances, lower than the values in the table attached to that Decree Law.
The minimum annual contributions were established (prices of the year 2000) by Decree-Law No. 275/2001 of 14 December 2001, by the time the Concessions Contracts were extended by fifteen years more.
At the beginning of the year 2015 the Regulatory-Decree nº1/2015 of 21st January came to approve the split payment in installments of the annual minimum contributions calculated based on Decree-Law 275/2001, sub-
ject to prior approval from "Turismo de Portugal" of the payments schedule proposed by the Game Concessionaire Companies.
The Regulatory-Decree nº1/2015 was applied for the first the time to the amounts related to the year ended December 2014, which initially payment deadline was on January 31st, 2015.
The value of Casino da Póvoa minimum annual payment for the year 2015 at 2000 current prices, is 18.305.883 Euros. According to Article 4 of the Decree n º 29/88 of 3rd August this value is updated based on the index of consumer prices for the mainland, excluding housing, published by the National Statistics Institute (INE), for the year to which the payment relates to. Following this update, the minimum annual payment for the year 2015 stood at 24.807.765 Euros.
In 2015 Casino da Póvoa gross gaming revenues amounted to 41.962.037 Euros. The 50% annual payment over gross gaming revenues represents 20,981,019 Euros, a figure lower than the minimum annual payment calculated pursuant to Decree-Law No. 275/2001. By that reason the Casino da Póvoa Concessionaire would have to pay to the state the remaining amount in the total of 3,826,746 Euros for the year 2015. (Note 28). Of this amount, 2,098,102 Euros are at the date of this report settled by the Concessionaire Company since they had the maturity date on January 31st, 2016. The remaining 1,728,645 Euros according to prior authorization from Turismo de Portugal will be paid in three equal annual instalments, 576.215 Euros, on December 31st , 2016, 2017 and 2018.
The remaining 4,886,853 Euros registered in the caption "Other accounts payable – non-current", as "Annual payment – difference to minimum grant" is related to the following instalment payment schedules in accordance with a prior authorization from Turismo de Portugal:
In the normal course of its activity, the Group is involved in diverse legal proceedings. Given the nature of these and the provisions set up, in accordance with studies and opinions of legal consultants, the current expectation is that the respective outcome will not lead to any material effects in terms of the activity undertaken, the asset position and the result of the operations.
Differences in understanding between the Group and the Tax Authorities over Corporation Tax (IRC), relating to the years 2007, 2008, 2009 and 2010, with regard to the taxation of undocumented expenses incurred in the course of the gaming activity of subsidiaries that form part of the Group and which operate games of fortune as their main activity. During the year 2013 occurred the 1st instance verdict contrary to the allegations and convictions of the Group relating to the process for the years 2007 to 2009. It is the Company's belief, grounded in favourable opinions from legal advisers, that a final decision should be favourable, which is why the Group appealed to higher courts. On the date of these financial statements there are also previous legal decisions that are in the Group's favour, as well as judicial jurisprudence which is favourable to the Group on this matter. Even so, on this date the Group has bank guarantees provided in favour of the Finance Office of Cascais amounting to 7.197.635 Euros.
One of the subsidiaries of the Group made a collective dismissal in 2010 within the terms established in the Law, which affected 112 employees. Some of these contested this procedure and filed a lawsuit in Court trying to have this overturned and for their reintegration as Company staff. The Company and the legal consultants responsible for the case consider that there is a high probability of the Company winning and, therefore, it has set up a provision corresponding only to the legal obligations allowed for in labour legislation in cases of collective dismissal which it will have to pay to the former employees by way of indemnity evens if it wins the case. As at 31st December 2015 there are 30 former employees with pending litigation related with this dismissal. The provision accrued within the accounts amounts to 763.545 Euros. During the first six months of 2016 the Company came to terms with another 11 former employees. As at the 30th June 2016 the Group had dispute with 19 former employees and accrued financial responsibility in the above terms of approximately 476.271 Euros.
One of the subsidiaries of the Group made a collective dismissal in 2013 within the terms established in the Law, which affected 21 employees. Some of these contested this procedure and filed a lawsuit in Court trying to have this overturned and for their reintegration as Company staff. The Company and the legal consultants responsible for the case consider that there is a high probability of the Company winning and, therefore, it has set up a provision corresponding only to the legal obligations allowed for in labour legislation in cases of collective dismissal which it will have to pay to the former employees by way of indemnity evens if it wins the case. As at 31th June 2016 there are 14 former employees with pending litigation related with this dismissal. The provision accrued within the accounts amounts to 360.000 Euros.
The Group also sets up diverse technical provisions related with the normal functioning of its main activity, the operation of games of fortune. Among the more significant ones we should highlight:
On 30 th June 2016 and 31st December 2015 the guarantees provided by the Group were as follows:
| Jun - 2016 | Dec - 2015 | |
|---|---|---|
| Obligations related with the Special Gaming Tax | 6.650.000 | 22.050.000 |
| Tax lawsuits in hand / litigation | 7.414.888 | 7.414.888 |
| Current suppliers | 39.250 | 39.250 |
| 14.104.138 | 29.504.138 |
In January 2016 the Group saw its responsabilities with bank guarantees reduced by 15,4 million Euros, as they were related with the Special Game Tax from the year ended 31st December 2015 paid during January 2016 (Note 15).
The consolidated result per basic share of the years ended on 30th June 2016 and 2015 was determined as follows:
| Jun - 2016 | Jun - 2015 | |
|---|---|---|
| Consolidated net profit of the period | 2.555.502 | 779.461 |
| Average weighted number of shares in circulation | 11.931.119 | 11.931.119 |
| Result per basic share | 0,21 | 0,07 |
Due to the fact that there are no situations that cause dilution, the net result per diluted share is the same as the net result per basic share.
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