Annual Report • May 23, 2008
Annual Report
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As soluções da Novabase resultam de uma reconhecida capacidade de consultoria, integração de produtos líderes de mercado e desenvolvimento de produtos próprios. A sua forma de trabalho é assumir como seu o objectivo do cliente, construindo relações de verdadeira parceria.
Novabase's solutions stem from its combined consulting expertise, its integration of leading products and its development of original products. Novabase's working method is to see the customer's goal as its goal, building relationships of true partnership.
Relatório e Contas Novabase 2007
A Novabase é a empresa portuguesa líder em soluções de negócio com Tecnologias de Informação (TI) e uma das empresas europeias do seu sector com maiores taxas de crescimento nos últimos anos (número 217 em 2007 no ranking da organização Europe's 500, referente ao crescimento e à criação de emprego).
Criada em 1989, conta hoje com mais de 1650 colaboradores e realizou em 2007 um volume de negócios de 313M€, 39% dos quais fora de Portugal.
A missão da Novabase é conceber, realizar e gerir soluções de negócio inovadoras que permitam aos seus clientes obter benefícios - lucros, qualidade de serviço, satisfação pessoal - superiores ao seu custo.
Comprometemo-nos, com os nossos Clientes, Colaboradores, Accionistas e com a comunidade em geral, a criar valor num contexto de confiança e parceria.
Novabase is the leading Portuguese company in Information Technology (IT) business solutions and one of the European IT sector's fastest-growing companies in recent years (ranked 217th in 2007 by Europe's 500 with respect to growth and job creation).
Established in 1989, Novabase today has more than 1,650 employees. Its 2007 turnover was €313 million, 39% of which originated from outside of Portugal.
Novabase's mission is to design, deploy and manage innovative business solutions with customer benefits – profitability, service quality and individual satisfaction – that surpass their cost.
We promise our customers, staff, shareholders and the community at large to create value in a spirit of trust and partnership.
Cotada na Euronext Lisboa desde Julho de 2000, a Novabase cultiva as melhores práticas de mercado na área de "Corporate Governance".
Listed on the Euronext Lisbon stock exchange since July 2000, Novabase fosters the best market practices in the area of Corporate Governance.
Relatório e Contas Novabase 2007
Sumário Financeiro Financial Highlights
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Negócio Internacional com detalhe por área de negócio International Business with detail by business area
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Negócio Internacional 2007 International Business 2007
Mobile Consulting Digital TV
2007
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A Novabase tinha definido como objectivo para o ano de 2007 aumentar a rentabilidade e a sustentabilidade dos seus negócios. S Dear Shareholders,
Se a rentabilidade é um objectivo fácil de quantificar, a sustentabilidade exige uma definição mais cuidada. Para cada um dos nossos negócios a sustentabilidade passa por ingredientes diferentes. Assim, no negócio de consultoria, maior sustentabilidade significa ofertas mais centradas nas áreas "core" dos clientes e maior internacionalização. Já nos negócios de Outsourcing e Infra-estruturas, maior sustentabilidade significa contratos mais longos e aumento das sinergias entre as duas áreas. Na Digital TV, por seu turno, maior sustentabilidade significa maior capacidade financeira, a fim de fazer crescer o negócio de forma mais rápida para melhor se posicionar num mercado em explosão, no mais curto intervalo de tempo possível. Para a área de Bilhética, maior sustentabilidade significa uma maior padronização da solução, por forma a aumentar a rentabilidade dos projectos e potenciar a internacionalização através de parceiros. Para todos os negócios significa também um investimento sustentado e consequente na busca de mais e melhor talento.
É pois com o maior prazer que vos damos a conhecer o resultado do nosso trabalho no exercício de 2007 agora findo, um ano em que, sem margem para dúvidas, os negócios da Novabase melhoraram a sua rentabilidade e sustentabilidade.
O Volume de Negócios consolidado cresceu 19.8% para os 313M€, o EBITDA cresceu 22.2% para 20M€. Salientese um crescimento do EBITDA superior ao crescimento do Volume de Negócios, indicando claramente um crescimento global da rentabilidade operacional. Os Resultados Líquidos cresceram 35.4% para os 7M€. O "cash" gerado no período foi de 11.9M€. O Negócio internacional cresceu 50%, de 81M€ para 122M€, com uma significativa contribuição do negócio de Digital TV.
De entre os vários negócios da Novabase, gostaria de destacar a grande contribuição para o nosso objectivo de aumentar a rentabilidade que foi dada pelos negócios Novabase Consulting (margem EBITDA 16.6%), Novabase Digital TV (margem EBITDA 6.1%) e pela área
Novabase's goal for 2007 was to increase the profitability and sustainability of its business.
While profitability is an easy goal to quantify, sustainability demands a more careful definition. Sustainability entails different ingredients for each of our businesses. In the consulting business, for example, greater sustainability means products and services with more focus on core customer areas, and greater internationalization. However, in the outsourcing and infrastructures businesses, greater sustainability means longer contracts and increased synergies between these two areas. In digital TV, in turn, greater sustainability means more financial capacity to grow the business more quickly for better positioning in an exploding market in the shortest possible time frame. In the ticketing business, greater sustainability means more standardized solutions to increase project profitability and solidify internationalization through partners. In all of these business areas, it also means a sustained, coherent investment in the search for more and better talent.
It is therefore with great pleasure that we announce the results of our work in 2007, a year in which Novabase, without question, improved the profitability and sustainability of its business.
Our consolidated turnover grew 19.8% to €313 million, and EBITDA grew 22.2% to €20 million. The higher EBITDA growth compared to turnover is particularly noteworthy, as it clearly demonstrates overall growth in operating profitability. Net profit grew 35.4% to €7 million. Cash generated in the year was €11.9 million. International business grew 50%, from €81 million to €122 million, with a significant contribution from the Digital TV business.
Among Novabase's various businesses, I would like to underscore the important contributions toward our profitability goal made by Novabase Consulting (EBITDA margin of 16.6%), Novabase Digital TV (EBITDA margin of 6.1%) and the IT Infrastructures area of Novabase Engineering (EBITDA margin of 5.7%). These areas had world-class operating profitability at the end of 2007 that surpasses that of leading international counterparts. Although Ticketing and Mobility Solutions – also under Novabase Engineering – had negative EBITDA margins (-3.9% and -7%, respectively), it
de IT Infrastructures do negócio Novabase Engineering (margem EBITDA 5.7%). Estas áreas apresentaram no final do ano de 2007 rentabilidades operacionais "world class" que comparam com vantagem com os mais importantes congéneres internacionais. Infelizmente, as áreas de Ticketing e Mobility Solutions, igualmente incluídas no negócio Novabase Engineering, apresentaram margens EBITDA negativas (respectivamente -3.9% e -7%). Apesar disso, foi possível obter um valor do EBITDA consolidado de 20M€ (mais 22.2% que no ano anterior e dentro do intervalo previsto no início do ano e oportunamente divulgado ao mercado).
A Novabase deu também passos largos nos últimos dois anos para cumprir outro dos seus desígnios: a obtenção de um modelo de governo corporativo que apostasse no cumprimento do maior número possível de recomendações da CMVM. Foi assim com grande prazer que vimos esta autoridade reguladora comunicar ao mercado durante este ano que a Novabase é a sociedade cotada portuguesa mais cumpridora daquelas recomendações.
Junto ao final do ano a Novabase mudou a sua sede e a maior parte dos seus colaboradores em Lisboa para um novo edifício. Situada no Parque das Nações, a nova sede da Novabase é um edifício moderno e funcional que projecta uma nova imagem da empresa ao mesmo tempo que cria muito melhores condições de trabalho para os seus colaboradores e para os seus clientes e demais visitantes.
A nossa empresa continua a ser uma referência na contratação de recursos humanos especializados no mercado Português, sendo já hoje um dos principais empregadores de capital humano especializado em Portugal. Reforçamos a nossa aposta na formação especializada através de iniciativas como a Novabase Academy, Consulting Campus e Projecto CMU/Portugal de que somos aderentes desde a primeira hora.
No ano de 2008 que agora se inicia, a Novabase vai continuar a trabalhar para o mesmo desígnio de aumentar a rentabilidade e a sustentabilidade dos seus negócios, fonte imprescindível de crescimento do seu valor accionista. Em primeiro lugar, encontrando uma solução para os negócios que ainda não cumpriram was still possible to achieve a consolidated EBITDA of €20 million (22.2% more than the previous year, and within the range forecast at the start of the year and disclosed to the market at that time).
Novabase has also made great strides in the last two years toward fulfilling another of its goals: a corporate governance model committed to meeting the highest possible number of CMVM (Portuguese Securities Market Commission) recommendations. It was thus with great pleasure that we saw this regulatory authority notify the market this year that Novabase is the Portuguese listed company that complies most closely with these recommendations.
Toward the end of the year, Novabase moved its head office and most of its Lisbon staff to a new building. Located in Parque das Nações, Novabase's new head office is a modern, functional building that projects a new company image and provides a greatly improved work environment for employees, customers and other visitors.
Our company continues to be a benchmark in attracting specialized human resources in the Portuguese market, and is currently one of the chief employers of specialized human capital in Portugal. Our focus on specialized training is reinforced by initiatives such as the Novabase Academy, Consulting Campus and CMU/Portugal Project, which we joined on day one.
In 2008, Novabase will continue to work toward the same goal of increasing the profitability and sustainability of its business, an essential source of growth for its shareholder value. Firstly, by finding a solution for the business areas that did not meet this goal in 2007. Secondly, by maintaining a standard overall margin for its business, which now operates at high levels of profitability. Thirdly, by continuing to reinforce sustainability by revitalizing its products and services, properly capitalizing its business and underpinning the objective conditions that facilitate internationalization.
Specifically, we will merge our outsourcing (formerly under Novabase Consulting) and IT infrastructures businesses (formerly under Novabase Engineering) into a new area to be called Novabase IMS (Infrastructures and Managed Services). This is our chosen means of leveraging the synergy between these two businesses.
esse desígnio em 2007. Em segundo lugar, mantendo a margem típica global dos negócios que já se encontram a funcionar a níveis elevados de rentabilidade. Em terceiro lugar, continuando a reforçar a sustentabilidade por via do reforço da oferta, da capitalização adequada dos seus negócios e do reforço das condições objectivas que potenciam a internacionalização.
Vamos designadamente efectuar a fusão dos negócios de Outsourcing (até agora integrado na Novabase Consulting) e de IT Infrastructures (até agora incluído na Novabase Engineering) numa nova área a designar por Novabase IMS (Infrastructures and Managed Services). Esta é a forma que escolhemos para potenciar ao máximo a sinergia entre estes dois negócios.
Procurar-se-ão fontes adicionais de financiamento para o negócio de Digital TV (o IPO previsto para Novembro de 2007 teve que ser adiado devido às dificuldades dos mercados accionistas nessa parte do ano). Com efeito, o negócio de Digital TV é um negócio com características próprias, muito diferente dos restantes negócios da Novabase e com necessidades de financiamento importantes que devem ser resolvidas com recurso a meios adequados ao tipo de risco em causa e sem o recurso exclusivo a meios financeiros próprios da Novabase. O negócio de Ticketing, tendo características muito próximas dos restantes negócios típicos da Novabase, tem que melhorar o seu desempenho, optando por uma maior padronização da oferta e por melhorias operacionais significativas. O Negócio Novabase Consulting vai continuar o seu esforço de sofisticação da oferta a que temos assistido nos últimos anos, procurando manter os elevadíssimos padrões de rentabilidade que já hoje possui.
Iremos ainda em 2008 fechar o ciclo de renovação das instalações na cidade de Lisboa através da criação de um novo centro de operações que substituirá as instalações de Carnaxide. Pretende-se que este centro esteja mais próximo da sede, embora em local adequado a uma operação de qualidade a custo controlado.
Continuaremos a optimizar as nossas áreas funcionais centrais, hoje já totalmente centralizadas, procurando fazer mais pelo mesmo custo, absorvendo mesmo uma parte do incremento de custo da mudança de instalações.
Acredito que a Novabase será em 2008, conforme planeámos, uma empresa melhor, mais rentável, com negócios mais sustentáveis, com uma imagem de maior prestígio, com um cada vez maior grau de satisfação dos nossos clientes e elevando o nível de motivação e satisfação dos nossos colaboradores.
We will pursue additional sources of financing for the Digital TV business (the IPO scheduled for November 2007 had to be postponed due to difficulties in the capital markets at this time of the year). The Digital TV business has unique characteristics – highly divergent from Novabase's other business areas - with significant financing needs that must be addressed with resources suited to the type of risk involved, and beyond Novabase's own exclusive financial means. The Ticketing business – whose characteristics are similar to those of Novabase's other regular business areas – must improve its performance through more standardized products and services, and through major operating improvements. Novabase Consulting will continue its efforts toward refining its products and services, as in recent years, to maintain its current superior levels of profitability.
Likewise, in 2008, we will close the renovation cycle of our facilities in Lisbon by creating a new centre of operations, which will replace the facilities in Carnaxide. Our aim is for this centre to be closer to the head office, while still at a suitable location for quality operations at a controlled cost.
We will continue to optimize our core functional areas – now completely centralized – seeking to do more at the same cost, and even absorbing part of the additional costs of changing facilities.
I believe that Novabase will be – as we have planned – a better, more profitable company in 2008, with a more sustainable business, an image of greater prestige and increasingly greater degrees of customer satisfaction, thus increasing levels of employee motivation and fulfillment.
10 Relatório e Contas Novabase 2007 10 Rogério Carapuça Presidente do Conselho de Administração Chairman and CEO
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Áreas de Negócio Business Areas
| NOVABASE | ||||||
|---|---|---|---|---|---|---|
| NOVABASE CONSULTING |
NOVABASE ENGINEERING |
NOVABASE DIGITAL TV |
NOVABASE CAPITAL |
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| Financial Services | IT Infrastructures | |||||
| Government & Healthcare |
Ticketing Solutions | |||||
| Telecommunications & Media |
Mobility Solutions | |||||
| Business & IT Consulting |
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| Advanced Custom Development |
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| Business Intelligence |
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| Enterprise Applications & Integration |
Multisourcing Services
A Novabase é a maior empresa portuguesa de soluções de negócio com tecnologias de informação, com um volume de negócios de 313.2M€ em 2007.
A crescer em média 29% ao ano nos últimos 7 anos, está entre as 500 empresas que mais crescem na União Europeia.
Novabase is the leading Portuguese company in Information Technology business solutions, with a turnover of 313.2M€ in 2007. With average annual growth of 29% in the last 7 years, Novabase is among the European Union's 500 fastest-growing companies.
área de Consultoria da Novabase opera como consultora de negócio e de soluções tecnológicas, com uma presença incontornável no mercado nacional e uma experiência internacional relevante. A Novabase Consulting is a technology solutions and business
A missão nesta área é endereçar os desafios estratégicos dos Clientes, desenvolvendo e gerindo processos de negócio suportados por Soluções inovadoras e de excelência tecnológica, adaptadas às suas reais necessidades.
Actualmente as organizações estão confrontadas com mercados voláteis, novos desafios de negócio, maior competição global e um vasto leque de oportunidades resultantes de novas gerações de tecnologia. A Novabase oferece aos Clientes um forte domínio tecnológico e conhecimento das suas necessidades, aliados à flexibilidade necessária para os acompanhar nos seus desafios de negócio, para construir, com eles, a geração de Soluções do Futuro.
Nesta óptica, a área de Consultoria tem uma estrutura matricial em que se cruzam, de uma forma consistente mas flexível, o conhecimento sectorial dos principais mercados - Telecomunicações, Sector Financeiro, Administração Pública & Saúde e Energia & Utilities - com uma forte especialização tecnológica, organizada em torno das seguintes linhas de competência:
O foco na aplicação prática da tecnologia para a resolução eficaz dos desafios de negócio dos Clientes permitiu a evolução de um forte domínio em áreas de tecnologia avançada para uma consultora de oferta alargada, que hoje trabalha directamente com as maiores empresas e organismos nacionais, nos principais sectores, e que beneficia já de um conjunto relevante de experiências internacionais em regiões tão diversas como a Europa, o Médio Oriente e a América Latina.
consulting firm with a paramount position in the domestic market and a solid international track record.
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This business area's mission is to address strategic customer challenges by developing and managing business processes supported by innovative, premium technology solutions tailored to customers' real needs.
These days, organizations are faced with volatile markets, new business challenges, greater global competition and a vast array of opportunities arising from new technology generations. Novabase offers its customers solid technology expertise and knowledge of their needs, combined with the flexibility required to assist them in their business challenges and build the next generation of "Future Solutions".
Along these lines, Novabase Consulting has a matrix structure combining, in a consistent yet flexible manner, sector-specific knowledge of primary markets (telecommunications, finance, public administration, healthcare, energy and utilities) with solid technology specialization organized around the following competencies:
Its focus on practical, efficient technology solutions for our customers' business challenges has allowed Novabase Consulting to evolve from a specialist in advanced technologies to a highly versatile consulting firm. It now works directly with the largest companies and institutions from Portugal's primary economic sectors and has a solid international track record in diverse regions such as Europe, the Middle East and Latin America.
Os projectos desenvolvidos pela Novabase vão do e-government ao sector financeiro, dos sistemas de bilhética às soluções de telecomunicações. É fornecedor de referência de ministérios, bancos, operadoras de comunicações e empresas de transportes, em Portugal e no exterior.
Projects developed by Novabase span from e-government to the finance sector, from ticketing to telecommunications systems and solutions. Novabase is a benchmark supplier of ministries, banks, telecom operators and transportation companies, in Portugal and abroad.
área de Infra-estruturas da Novabase lidera o ranking Português dos integradores de sistemas globais de Tecnologias de Informação, tendo actualmente uma base de operação instalada em Espanha. A Novabase IT Infrastructures leads Portugal's ranking of global IT
Esta área desenvolve a sua actividade na prestação de serviços de gestão e administração de infra-estruturas de tecnologias de informação e telecomunicações, nomeadamente no outsourcing, no suporte à gestão e desenvolvimento do ciclo de vida das infra-estruturas inteligentes de informação nas componentes de consultoria, planeamento, concepção, suporte, optimização e gestão.
A Novabase é nesta área especialista na consultoria, desenho, implementação e operação de Infra-estruturas Inteligentes de Informação ou 3I.
As Infra-estruturas 3I ou Infra-estruturas Inteligentes de Informação são o veículo de migração do mercado empresarial para a nova realidade da utilização das TIs. Estas caracterizam-se por grande flexibilidade, capacidade e versatilidade na resposta imediata à alteração, adaptação ou construção de novos processos de negócio.
As Infra-estruturas 3I respondem à convergência e consolidação da tecnologia IP, à necessidade de disponibilização de serviços Triple Play, aos requisitos de arquitecturas aplicacionais orientadas a serviços e à crescente necessidade de virtualização, optimização e gestão de capacidade dos recursos disponíveis.
A Novabase disponibiliza serviços e soluções globais nas seguintes áreas:
Generations Networks e Value Added Next Generation Applications
• NG-OSS Next Generation Operational Support System Services
Em 2008 será lançada a Novabase IMS – Infrastructures and Managed Services, que irá agregar esta oferta de IT Infrastructures e a área de serviços Multisourcing que se encontra na Novabase Consulting, de forma a criar uma oferta integrada nesta área.
systems integrators, and currently has an operating base in Spain.
This business area provides services in IT and telecommunications infrastructure management and administration, namely outsourcing and life cycle management and development for intelligent IT infrastructures in the areas of consulting, planning, design, support, optimization and management.
Novabase is a specialist in this area involving intelligent IT infrastructure – or "3I" infrastructure – consulting, design, deployment and operation.
3I infrastructures, or Intelligent IT Infrastructures, are the tool for migrating from the enterprise market to the new reality of IT use. They are characterized by their great flexibility, capacity and versatility in immediately responding to changes and adaptations to, or the launch of, new business processes.
3I infrastructures address the convergence and consolidation of IP technology, the need for triple play services, the requirements of service-oriented application architectures and the growing need to virtualize, optimize and manage the capacity of available resources.
Novabase provides global services and solutions in the following areas:
• Telecommunications Infrastructures: NGN (Next Generation Networks) and Value-Added Next Generation Applications
• NG-OSS (Next Generation Operational Support System Services)
Novabase IMS – Infrastructures and Managed Services will be launched in 2008 to combine these IT infrastructures offerings with the area of multisourcing services, under Novabase Consulting, to create an integrated product and service offering in this area.
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área de Mobilidade da Novabase tem como objectivo disponibilizar ao mercado soluções para a área das comunicações móveis, integrando toda a cadeia de valor. A Novabase Mobility Solutions' goal is to offer solutions for mobile
Esta área apresenta uma capacidade de inovação em aplicações e serviços, garantindo a disponibilização de um pipeline continuado de funcionalidades para os utilizadores.
Os desenvolvimentos mais recentes, até 2007, foram a confirmação da implantação da plataforma Windows Mobile, fazendo já parte do dia-a-dia das empresas e até do grande público, e a comprovação através do grande crescimento do volume de vendas, de que os PDA Phone Windows Mobile são já uma peça importante no portfolio dos operadores e das grandes cadeias de retalho.
O core diário de actividade deste negócio tem estado mais focado na distribuição destas plataformas aos operadores móveis e grandes distribuidores no espaço ibérico e menos na área de desenvolvimento de aplicações.
Esta área apresenta margens operacionais negativas em 2007, sendo o objectivo para 2008 encontrar uma solução viável para este negócio.
communications integrating the entire value chain.
This business area has the capacity to provide innovative applications and services, ensuring a constant pipeline of user features.
Recent developments through 2007 include the implementation of the Windows Mobile platform, which is now a day-to-day routine among companies and even the general public, and the affirmation of Windows Mobile PDA Phones as an important part of operator and major retail chain portfolios through their substantial increase in sales.
This area's core daily business has focused primarily on the distribution of these platforms to mobile operators and major distributors in the Iberian market, as opposed to applications development.
The operating margins in this area were negative in 2007, and one of the goals for 2008 is to find a viable solution for this business.
Com uma cultura de inovação, a Novabase está entre os maiores investidores portugueses em I&D, tendo sido pioneira em múltiplas áreas. Do business intelligence às soluções multi-canal, da TV Digital aos sistemas de pagamento sem contacto, passando por soluções de negócio VoIP, a Novabase soube ao longo da sua existência criar e desenvolver projectos inovadores nos principais sectores de actividade.
With a culture of innovation, Novabase is among Portugal's largest investors in R&D, and is a pioneer in a number of areas. From Business Intelligence to multi-channel solutions, digital TV, no-contact payment systems and VOIP business solutions, Novabase has, over the course of its existence, created and developed innovative projects in its primary business sectors.
Novabase Annual Report 2007 1177
A Novabase Ticketing Solutions has an unique position in the market área de Bilhética da Novabase detém uma posição de mercado inigualável devido aos casos de sucesso que tem acumulado na implementação de soluções inovadoras em Clientes de várias áreas - de onde se destacam os operadores de transportes e recintos desportivos, em Portugal e no estrangeiro.
Em Portugal, a Novabase tem um histórico único de implementações bem sucedidas de soluções integradas de bilhética, com soluções end-to-end customizáveis às necessidades dos Clientes, baseadas em tecnologia própria best-of-breed (a maioria das componentes das soluções fornecidas são baseadas em tecnologia própria, o que tem permitido aumentar o valor acrescentado e o controlo da qualidade das ofertas).
As oportunidades de crescimento desta oferta centram- -se na internacionalização da tecnologia Novabase para outras geografias. Os primeiros passos foram já dados nos últimos anos, também com os primeiros projectos internacionais.
A Novabase disponibiliza nesta área sistemas integrados de atendimento, controlo de acessos, monitorização operacional e gestão financeira, com uma oferta end-to- -end que abrange os dispositivos e sistemas necessários à realização do ciclo de vida de um bilhete, desde a sua produção até ao apuramento e distribuição de receitas no back-office.
Em 2008 o objectivo da área de Bilhética é o de continuar a inovar e a lançar novas soluções flexíveis mas padronizadas, que permitam endereçar as necessidades específicas dos seus Clientes (operadores de transporte) com custos e tempos de implementação mais reduzidos.
thanks to its solid track record in successfully deploying innovative solutions for customers in diverse areas of business, particularly transportation operators and sports facilities, both in Portugal and abroad.
In Portugal, Novabase has a unique history of successfully deploying integrated ticketing solutions, with end-to-end solutions tailored to customer needs, based on exclusive best-of-breed technologies (the majority of solutions offered are based on exclusive technologies developed by the company, thereby enhancing their added value and inherent quality).
Growth opportunities in this area are centered on the internationalization of Novabase technology in other regions. Recent years have witnessed the first steps in this direction, together with the first international projects.
In this area, Novabase offers integrated systems for customer service, access control, operations monitoring and financial management, with end-to-end solutions covering devices and systems needed to complete the life cycle of a ticket, from production to back-office revenue calculation and distribution.
Novabase Ticketing Solutions' goal in 2008 is to continue to innovate and launch new flexible, yet standardized, solutions addressing specific customer (transportation operator) needs more quickly and cost-effectively.
Empregando mais de 1600 pessoas e com este número a crescer cerca de 20% ao ano, a Novabase é um dos maiores criadores nacionais de emprego especializado. Mas, mais do que empregos, a Novabase oferece a cada colaborador um desafio: realizar, dia após dia, o seu próprio potencial.
Novabase Annual Report 2007 1199 With more than 1600 employees and with this number growing at around 20% per year, Novabase is one of the country's largest creators of specialized employment. More than just a job, Novabase offers every employee a challeng: to continually realize their full potential.
Com cerca de 39% dos seus negócios no exterior, a Novabase é um dos maiores exportadores nacionais e o maior do seu sector.
With 39% of its turnover originating from outside Portugal, Novabase is one of the country's main exporters and the largest in its sector.
área de Digital TV da Novabase é um dos principais players a nível europeu, com um volume de negócios superior a 100 milhões de euros em 2007, marcado pelo aumento do negócio internacional e por uma melhoria significativa na performance operacional. A Novabase Digital TV is one of the leading players in Europe, with a
O portfolio de oferta nesta área integra todas as set-top- -box disponíveis no mercado e soluções baseadas em PC suportando os diferentes tipos de recepção (PC, TV e IPTV) e transmissão (DVB-C, DVB-S, DVB-T e IPTV). Integra ainda equipamento receptor PC e TV e soluções como módulos de recepção e plataformas de middleware.
A Novabase é um dos líderes tecnológicos no mercado de set-top-box, com um histórico de inovação e lançamento no mercado de novos produtos de grande valor para os Clientes (primeiro receptor DVB de tamanho reduzido, primeiro receptor FTA em formato scart, entre outros).
Os Clientes nesta área são fabricantes de set-top-box (no mercado OEM/ODM), operadores de cabo e pay TV (no mercado de operadores) e clientes residenciais (no mercado de retalho). A Novabase é fornecedor de todos os principais operadores de TV por cabo e pay TV na Alemanha (o maior mercado de TV a nível europeu).
Estima-se que o mercado global de set-top-box para Digital TV cresça a ritmos muito elevados, impulsionado pelo fim de operação do sistema analógico, a ocorrer até 2012 na Europa, de acordo com o determinado pelos reguladores.
Esta é uma área de negócio com elevado potencial de crescimento, que necessita de financiamento significativo, estável e de longo prazo, pelo que foi decidido pela Novabase procurar uma solução que pode passar pela preparação de um IPO ou pela alienação a um player de relevo com capacidade financeira.
Com efeito, no final de 2007 a Novabase e os restantes accionistas optaram pela via da colocação em bolsa deste negócio de Digital TV na Bolsa de Frankfurt, que no entanto teve de ser adiada devido à situação difícil nos mercados de capitais internacionais no que respeita aos IPO, apesar da reacção dos investidores durante o road-show ter sido positiva.
turnover exceeding €100 million in 2007, marked by a growing international business and significant improvements in operating performance.
This area's product and service portfolio includes all set-top boxes available on the market and PC-based solutions supporting different types of reception (PC, TV and IPTV) and transmission (DVB-C, DVB-S, DVB-T and IPTV). It also includes PC and TV receiving equipment and solutions such as receiver modules and middleware platforms.
Novabase is a technology leader in the set-top box market, with a history of innovation and of launching new products of great customer value on the market (first compact DVB receiver, first FTA receiver in SCART format, among others).
Customers in this area include set-top box manufacturers (OEM/ODM market), cable and pay TV operators (operator market) and residential customers (retail market). Novabase is the supplier for all the major cable and pay TV operators in Germany (the largest TV market in Europe).
It is estimated that the global set-top box market for digital TV is growing at an extremely fast pace, driven by upcoming switch-off of the analogue system in Europe in 2012, as determined by regulatory authorities.
This business area has extremely high growth potential requiring significant, stable, long-term financing. For this reason, Novabase chose to pursue a solution along the lines of an IPO launch or sale to a key player with suitable financial capacity.
At the end of 2007, Novabase and other shareholders ultimately chose the route of listing the Digital TV business on the Frankfurt Stock Exchange. However, this had to be postponed due to the difficult circumstances in the international capital markets with regard to IPOs, notwithstanding investors' positive reaction during the road show.
A NOVABASE é uma empresa cotada desde Julho de 2000 que funciona de acordo com um modelo de governo, em permanente evolução, cujo objectivo é o de procurar contribuir para a optimização do seu desempenho e favorecer todos os stakeholders, as pessoas cujos interesses estão envolvidos na actividade societária – nomeadamente os accionistas e investidores, os clientes e parceiros e os colaboradores.
A CMVM publicou, em 2007, um relatório sobre a divulgação de informação relativa ao governo das sociedades que avaliou o grau de cumprimento das recomendações da CMVM sobre o governo societário das sociedades cotadas no Eurolist da Euronext em 31 de Dezembro de 2006 e que coloca a NOVABASE como a empresa mais cumpridora entre as sociedades cotadas.
Este relatório sobre a divulgação de informação relativa ao governo das sociedades da CMVM teve por base o relatório sobre a estrutura e as práticas de governo societário elaborado pelas sociedades no final de cada exercício e que é elaborado conforme modelo constante do anexo ao Regulamento da CMVM nº 7/2001 (com as alterações introduzidas pelo Regulamento da CMVM n.º 11/2003, pelo Regulamento da CMVM n.º 10/2005 e pelo Regulamento da CMVM n.º 3/2006). A NOVABASE surge como a cotada com maior grau de cumprimento, tendo atingido 92% de cumprimento em 2006, o que demonstrou uma clara evolução face ao ano de 2005 cujo grau de cumprimento foi de 38%.
Face à evolução das boas práticas do Governo das Sociedades, bem como às Recomendações da CMVM sobre o Governo das Sociedades Cotadas e tendo em conta a experiência da NOVABASE desde a sua admissão à negociação no Mercado de Cotações Oficiais da Euronext Lisbon, foi aprovada pelos accionistas na última Assembleia Geral em 12 de Abril de 2007 o modelo de governo anglo saxónico que aperfeiçoou o modelo de governo existente em 2006.
Novabase has been a listed company since July 2000. It operates according to a constantly-evolving corporate governance model, aimed at optimizing its performance and benefiting all of its stakeholders - the people interested in its corporate activities, namely shareholders, investors, customers, partners and employees.
In 2007, the CMVM (Portuguese Securities Market Commission) published a report evaluating levels of compliance with CMVM recommendations on the corporate governance of companies listed on the Eurolist of Euronext on 31 December 2006. It ranked Novabase as the most compliant of these listed companies.
This CMVM report was based on reports on corporate governance structure and practices, prepared by companies at the end of each year following the model in the Annex to CMVM Regulation 7/2001, (as amended by CMVM Regulation 11/2003, CMVM Regulation 10/2005 and CMVM Regulation 3/2006). Novabase was the listed company with the highest degree of compliance, reaching 92% in 2006, a clear upturn compared to 38% in 2005.
Shareholders approved an Anglo-Saxon corporate governance model at the Annual General Meeting of 12 April 2007, refining the model from 2006, in light of trends in best corporate governance practices, CMVM recommendations on the management of listed companies and Novabase's experiences since its admission to trading on the Euronext Lisbon Official Stock Exchange.
A CMVM considerou em 2007 a Novabase como a empresa cotada portuguesa com maior grau de cumprimento das suas recomendações (92%).
In 2007, the CMVM (Portuguese Securities Market Commission) considered Novabase to be the Portuguese listed company with the highest degree of compliance with its recommendations (92%).
Principais alterações ao governo de 2006 aprovadas na AG de 12 de Abril de 2007 que vigoraram em 2007 Main changes to the 2006 governance model approved at the Annual General Meeting of 12 April 2007, effective in 2007
Since the corporate governance model is a dynamic process under constant refinement and definition, the main changes to the 2006 governance model, implemented in 2007 (approved at the last Annual General Meeting of 12 April 2007), are as follows:
| Modelo/Órgão | Alterações Implementadas em 2007 |
|---|---|
| Model/Board | Changes Implemented in 2007 |
Adopção do modelo de governo anglo saxónico - Face à reforma do Código das Sociedades Comerciais, levada a cabo pelo Decreto-Lei n.º 76-A/2006, de 29 de Março, o Conselho de Administração apresentou na última Assembleia Geral uma proposta de alteração de estatutos que visou a adopção pela Novabase do modelo de governo anglo saxónico através da institucionalização da Comissão de Auditoria enquanto órgão estatutário de fiscalização da sociedade, e a consequente extinção do Conselho Fiscal. O modelo de governo da sociedade passou a ser estruturado por um Conselho de Administração, compreendendo uma Comissão de Auditoria, e um revisor oficial de contas.
Adoption of the Anglo-Saxon corporate governance model: in light of amendments to the Company Code under Decree-Law no. 76-A/2006 of 29 March, the Board of Directors submitted, at the last Annual General Meeting, a proposal to change the articles of association so that Novabase could adopt the Anglo-Saxon corporate governance model by institutionalizing the Audit Committee as a board according to the articles of association for supervising company activities, consequently eliminating the Board of Auditors. In this way, the company's new corporate governance model was comprised of a Board of Directors including an Audit Committee and a statutory auditor.
O Conselho de Administração propôs na última Assembleia Geral a redução do número mínimo de acções de mil para apenas uma para efeitos de exercício de direito de voto por parte dos accionistas. Assim a cada acção corresponde um voto. Esta alteração estatutária já se encontra alinhada com o novo Código do Governo das Sociedades da CMVM que foi aprovado em 2007 e entrará em vigor em 1 de Janeiro de 2009.
At the last Annual General Meeting, the Board of Directors proposed reducing the minimum number of shares from 1,000 to 1 for the purposes of shareholder voting. One share thus corresponds to one vote.
This amendment to the articles of association is in accordance with the new Corporate Governance Code of the CMVM (Portuguese Securities Market Commission), which was approved in 2007 and will come into force on 1 January 2009.
Resumo da Declaração de Cumprimento da Novabase às Recomendações propostas pela CMVM Summary of Novabase's Declaration of Compliance with CMVM recommendations
Resumo da Declaração de Cumprimento da Novabase às Recomendações propostas pela CMVM (Regulamentos da CMVM N.º 07/2001, com as alterações introduzidas pelo Regulamento da CMVM Nº 11/2003, pelo Regulamento da CMVM Nº 10/2005 e pelo Regulamento da CMVM Nº 3/2006).
Indicam-se, discriminadamente, as recomendações da CMVM sobre o Governo das Sociedades Cotadas adoptadas e não adoptadas (entendendo-se como não adoptadas as recomendações não seguidas na íntegra).
Summary of Novabase's Declaration of Compliance with CMVM recommendations (CMVM Regulation 07/2001, as amended by CMVM Regulation 11/2003, CMVM Regulation 10/2005 and CMVM Regulation 3/2006).
Novabase Annual Report 2007 2323 CMVM recommendations on the management of listed companies, adopted and not adopted (defining not adopted as those recommendations which were not followed in their entirety), are detailed below.
| I - Divulgação de Informação | Disclosure of Information | |
|---|---|---|
| Recomendação | Recommendation | |
| 1 | A sociedade deve assegurar a existência de um permanente contacto com o mercado, respeitando o princípio da igualdade dos accionistas e prevenindo as assimetrias no acesso à informação por parte dos investidores. Para tal deve a sociedade criar um gabinete de apoio ao investidor. |
1. The company must ensure that it has permanent contact with the market, that the principle of equality among shareholders is upheld and that uneven access of investors to information is prevented. To these ends, companies should set up an investor support office. |
| Grau de Cumprimento | Degree of Fulfillment | |
| Total | Complete | |
| Comentário | Remarks | |
| A Novabase assegura um apoio permanente ao mercado de capitais. O Gabinete de Relações com Investidores representa a Novabase junto da CMVM e dos investidores, promovendo o contacto com os investidores, particulares e institucionais, nacionais e estrangeiros. O Gabinete disponibiliza a informação através do site |
Novabase provides permanent support to the capital market. The Investor Relations Office represents Novabase in its dealings with the CMVM and investors, including contact with private and institutional, foreign and Portuguese investors. The office provides information through Novabase's website, with links of interest for investors with relevant information by investor profile (financial information, financial calendar, |
internet da Novabase, o investidor dispõe de links de interesse contendo a informação relevante atribuída ao seu perfil (informação financeira, calendário financeiro; informação privilegiada, espaço reservado a Assembleias Gerais, e o modelo de voto por correspondência e de voto electrónico, este último disponível desde 2006, entre outros).
priviledged information, area reserved for Annual General Meetings and the postal/electronic voting model available since 2006, among others).
2
Não deve ser restringido o exercício activo do direito de voto, quer directamente, nomeadamente por correspondência, quer por representação. Considera-se, para este efeito, como restrição do exercício activo do direito de voto:
a) a imposição de uma antecedência do depósito ou bloqueio das acções para a participação em Assembleia Geral superior a 5 dias úteis;
b) qualquer restrição estatutária do voto por correspondência;
c) a imposição de um prazo de antecedência superior a 5 dias úteis para a recepção da declaração de voto emitida por correspondência;
d) a não existência de boletins de voto à disposição dos accionistas para o exercício do voto por correspondência.
a) The imposition of a period of more then 5 working days between the deposit or blocking of shares and permission to participate in the General Meeting;
b) Any restriction in the articles of association on postal voting; c) The imposition of a requirement that postal votes be received more than 5 days in advance;
d) The non-availability of voting slips for shareholders wishing to submit their vote by post.
Os estatutos da Novabase actualmente já não prevêem qualquer limitação no livre exercício de direito de voto, sendo possível exercer o referido direito por representação, por correspondência e por voto electrónico. A Novabase cumpre assim integralmente com a presente recomendação da CMVM. The current articles of association of Novabase do not provide for any restriction on voting rights, and votes may be cast by proxy, by post on electronically. Novabase therefore fulfills this CMVM recommendation in its entirety. A Novabase dispõe de uma equipa de auditoria interna que tem como função a realização de auditorias na área financeira a empresas participadas pela Novabase. Na área da gestão de risco de projecto a Novabase dispõe de uma metodologia de qualificação de projectos, mediante a análise de determinados parâmetros. Na área de gestão da Oferta procede à análise da indústria com o objectivo de detectar as tendências que se formam e de promover o desenvolvimento de competências dentro da Novabase para endereçar as mesmas. Controla riscos típicos do sector das TI´s como obsolescência tecnológica; riscos III - Regras Societárias A sociedade deve criar um sistema interno de controlo, para a detecção eficaz de riscos ligados à actividade da empresa, em salvaguarda do seu património e em benefício da transparência do seu governo societário. It is recommended that companies establish an internal control system, for the efficient detection of risks linked to their activity, as a means of safeguarding their assets and enhancing the transparency of their corporate governance practices. Novabase has an internal audit team whose job is to conduct audits of the financial departments of Novabase's affiliates. Where project risk management is concerned, Novabase has a project qualification methodology which analyzes various specific parameters. The offer management unit analyses the industry in order to detect current trends and promote the development of skills within Novabase to address these trends. It controls typical risks in the IT sector, such as technology obsolescence, the risk that solutions may not be suitable, and the timing of the development and proposal of new solutions not being right for the market. Total Grau de Cumprimento Complete Degree of Fulfillment Recomendação Recommendation Total Grau de Cumprimento Complete Grau de Cumprimento Comentário Remarks Comentário Remarks Corporate Rules
exigências do mercado.
3
das soluções não se revelarem adequadas e do timing do desenvolvimento e proposta de novas soluções ser menos ajustado em relação às
IV
| III - Regras Societárias | Corporate Rules | continuação |
|---|---|---|
| Recomendação | Recommendation | |
| As medidas que sejam adoptadas para impedir o êxito de ofertas públicas de aquisição devem respeitar os interesses da sociedade e dos seus accionistas. Consideram-se nomeadamente contrárias a estes interesses as cláusulas defensivas que tenham por efeito provocar automaticamente uma erosão no património da sociedade em caso de transição de controlo ou de mudança da composição do órgão de administração, prejudicando dessa forma a livre transmissibilidade das acções e a livre apreciação pelos accionistas do desempenho dos titulares do órgão de administração. |
Measures adopted to prevent the success of takeover bids should respect the interests of the company and its shareholders. Measures considered contrary to these interests include defensive clauses intended to cause an automatic erosion of company assets in the event of the transfer of control or changes to the composition of the board which prove detrimental to the free transferability of shares and the free assessment by shareholders of the performance of board members. |
|
| Grau de Cumprimento | Degree of Fulfillment | |
| Parcial | Partial | |
| Comentário | Remarks | |
| Não se encontram previstas nos estatutos da sociedade quaisquer medidas que visem impedir o êxito de ofertas públicas de aquisição. Existe um Acordo Parassocial entre um núcleo de accionistas que termina em Abril de 2009 (cujo conteúdo foi divulgado em 27 de Abril de 2006). A CMVM considera que estes Acordos são susceptíveis de prejudicar a livre transmissibilidade das acções e a livre apreciação pelos accionistas do desempenho dos titulares do órgão de administração. A Novabase entende que a simples celebração do acordo parassocial não constitui por si uma medida defensiva e lesiva dos interesses dos accionistas, uma vez que contribui para assegurar a estabilidade na gestão da sociedade, salvaguardando assim o interesse social e accionista da Novabase. |
No measures aimed at preventing the success of takeover bids exist in Novabase's articles of association. There is a shareholders' agreement among a group of shareholders which expires in April 2009 (whose content was disclosed on 27 April 2006). The CMVM considers that these Agreements could be detrimental to the free transferability of shares and the free assessment by shareholders of the performance of members of the board. Novabase believes that the existence of a shareholders' agreement in itself does not constitute a defensive measure contrary to shareholder interests, since it ensures stability in the management of the company, therefore safeguarding Novabase's corporate and shareholder interests. |
|
| IV - Órgão de Administração | Board of Directors | |
| Recomendação | Recommendation |
pluralidade de membros que exerçam uma orientação efectiva em relação à gestão da sociedade e aos seus
Total
responsáveis.
Degree of Fulfillment
The board should be composed of a number of members who provide effective guidance for the management of the company and the persons responsible for said management.
Complete
O Conselho de Administração da Novabase é composto por uma pluralidade de membros que exercem um controlo efectivo na orientação da vida societária. Durante o exercício de 2007, o referido Conselho reuniu regularmente, pelo menos uma vez por mês, garantindo o controlo efectivo da gestão da sociedade.
O órgão de administração deve incluir um número suficiente de administradores não executivos cujo papel é o de acompanhar e avaliar continuamente a gestão da sociedade por parte dos membros executivos. Titulares de outros órgão sociais podem desempenhar um papel complementar ou, no limite, sucedâneo, se as respectivas competências de fiscalização forem equivalentes e exercidas de facto.
A composição do Conselho de Administração inclui 4 administradores não executivos, sendo que 3 deles são independentes e compõem a Comissão de Auditoria. Pela via deste órgão estes administradores independentes exercem funções de acompanhamento e avaliação continua da gestão da sociedade, têm o direito de propor a nomeação de auditores externos e de acompanhar a execução do plano estratégico e do Orçamento da Novabase em cada exercício e da acção da Comissão Executiva no exercício das suas funções de gestão corrente da Novabase. Pelo acima exposto, a Novabase cumpre igualmente com esta recomendação.
De entre os membros não executivos do órgão de administração deve incluir-se um número suficiente de membros independentes. Quando apenas exista um administrador não executivo este deve ser igualmente independente. Titulares independentes de outros órgãos sociais podem desempenhar um papel complementar ou, no limite, sucedâneo, se as respectivas competências de fiscalização forem equivalentes e exercidas de facto.
Novabase's Board of Directors is composed of a number of members who effectively control and guide the company's activities. In 2007, this board met regularly, at least once a month, thus ensuring effective control of the company's management.
The board of directors should include a sufficient number of non-executive directors, whose role it is to continuously monitor and assess the management of the company by the executive members of the board. Members of other corporate bodies may exercise ancillary roles or, at the very most, substitute board members, if the supervisory powers involved are equivalent and exercised in fact.
The composition of the Board of Directors includes 4 non- -executive directors, 3 of whom are independent and comprise the Audit Committee. It is through this body that these independent directors monitor and assess the management of the Company on a continuous basis. They are empowered to propose the appointment of external auditors, monitor the implementation of Novabase's Strategic and Budgetary Plan each year and the activities of the Executive Committee in performing its duties involving the everyday running of Novabase. In view of the above, Novabase has fulfilled this recommendation.
The non-executive members of the board of directors must include a sufficient number of independent members. When there is only one non-executive director, he/she must also be independent. Independent members of other corporate bodies may exercise ancillary roles or, at the very most, substitute board members, if the supervisory powers involved are equivalent and exercised in fact.
6
| Grau de Cumprimento | Degree of Fulfillment | |
|---|---|---|
| Total | Complete | |
| Comentário | Remarks | |
| O Conselho de Administração da Novabase integra actualmente três administradores independentes nos termos do número 2 do artigo 1º do Regulamento da CMVM n.º 7/2001, para acompanhar e fiscalizar, em termos informados, a gestão societária, pelo que a Novabase cumpre integralmente a presente recomendação. |
Novabase's Board of Directors is currently comprised of three, independent directors under the terms of Article 1 (2) of CMVM Regulation 7/2001, to monitor and supervise the management of the company on an informed basis. Novabase thus fulfills this recommendation in its entirety. |
|
| Recomendação | Recommendation | |
| 7 | O órgão de administração deve criar comissões de controlo internas com atribuição de competências na avaliação da estrutura e governo societários. |
The board of directors should create internal control committees, with the power to assess the corporate structure and its governance. |
| Grau de Cumprimento | Degree of Fulfillment | |
| Total | Complete | |
| Comentário | Remarks | |
| Na última Assembleia Geral Anual foi aprovada uma proposta de alteração de estatutos que visou a adopção pela sociedade do modelo de governo "anglo-saxónico", através da criação estatutária da Comissão de Auditoria no interior do Conselho de Administração. |
A proposal to change the articles of association so that the company could adopt the Anglo-Saxon corporate governance model, through the creation in the articles of association of the Audit Committee within the Board of Directors, was approved at the last Annual General Meeting. |
|
| A composição desta comissão foi aprovada em AG. | The composition of this Committee was approved at the Annual General Meeting. |
|
| Recomendação | Recommendation | |
| 8 | A remuneração dos membros do órgão de administração deve ser estruturada por forma a permitir o alinhamento dos interesses daqueles com os interesses da sociedade e deve ser objecto de |
The remuneration of members of the board of directors should be structured in such a way as to permit the interests of board members to be in line with those of the company, and should be disclosed annually in individual terms. |
permitir o alinhamento dos interesses daqueles com os interesses da sociedade e deve ser objecto de divulgação anual em termos individuais.
| IV - Órgão de administração | Board of Directors continuação |
|---|---|
| Grau de Cumprimento | Degree of Fulfillment |
| Total | Complete |
| Comentário | Remarks |
| Foram criados mecanismos que asseguram o alinhamento de interesses entre os seus administradores e os accionistas da sociedade, através de uma remuneração variável que por um lado depende da performance financeira anual da Novabase e que por outro lado depende da performance bolsista do titulo Novabase. A Novabase acolheu expressamente a recomendação relativa à divulgação em termos individuais das remunerações dos membros do órgão de administração, no sentido da publicação das remunerações dos elementos do Conselho de Administração de forma individualizada. |
Mechanisms have been created to align the interests of the company's directors and shareholders by means of variable remuneration, which depends both on Novabase's annual financial performance and the performance of Novabase's stock. Novabase has explicitly adopted the recommendation to publish individualized information on remuneration of members of managing boards (i.e. by publishing individualized information on remuneration of members of the Board of Directors). |
| Recomendação | Recommendation |
| Deve ser submetida à apreciação pela assembleia geral anual de accionistas uma declaração sobre politica de remunerações dos órgãos sociais. |
A declaration on the policy for remunerating members of a company's corporate bodies should be submitted to the attention of shareholders at the annual general meeting. |
| Grau de Cumprimento | Degree of Fulfillment |
| Total | Complete |
| Comentário | Remarks |
| Foram apresentados pela Comissão de Vencimentos e aprovados na Assembleia Geral Anual de 2006, os critérios gerais a seguir nesta avaliação durante o triénio 2006-2008. Anualmente, a Comissão de Vencimentos apresenta à Assembleia Geral um relatório sobre a aplicação desta política relativo ao exercício precedente. No presente exercício, tal relatório é apresentado em anexo ao Relatório e Contas. |
The general criteria to be followed in this evaluation for the years 2006 to 2008 were presented by the Remuneration Committee and approved at the 2006 Annual General Meeting. Each year, the Remuneration Committee submits a report to the Annual General Meeting on the application of this policy in the previous year. In 2007 this report is an annex to the Annual Report and Accounts. |
| Recomendação | Recommendation |
| Os membros da comissão de remunerações ou equivalente devem ser independentes relativamente aos membros do órgão de administração. |
Members of the remuneration committee or equivalent should be independent as regards the members of the board of directors. |
| Grau de Cumprimento | Degree of Fulfillment |
Total
8A
IV IV
Complete
| IV - Órgão de administração | Board of Directors | continuação | |
|---|---|---|---|
| Comentário | Remarks | ||
| A Novabase cumpre integralmente com a presente recomendação, sendo a actual Comissão de Vencimentos, objecto de aprovação pela Assembleia Geral Anual de 2006, composta por Francisco Luís Murteira Nabo, Pedro Rebelo de Sousa e por Fernando Eduardo Ribeiro Marques, todos membros independentes face à Administração e restantes orgãos sociais. |
Novabase fulfills this recommendation in its entirety, since the current members of the Remuneration Committee, subject to the approval of last year's Annual General Meeting, are independent, namely Francisco Luís Murteira Nabo, Pedro Rebelo de Sousa and Fernando Eduardo Ribeiro Marques. |
||
| Recomendação | Recommendation | ||
| 10 | Deve ser submetida à assembleia geral a proposta relativa à aprovação de planos de atribuição de acções, e/ou de opções de aquisição de acções ou com base nas variações do preço das acções, a membros do órgão de administração e/ou trabalhadores. A proposta deve conter todos os elementos necessários para uma avaliação correcta do plano. A proposta deve ser acompanhada do regulamento do plano ou, caso o mesmo ainda não tenha sido elaborado, das condições gerais a que o mesmo deverá obedecer. |
A proposal should be submitted to the general meeting with regard to the approval of plans for the allotment of shares, and/or options to purchase shares or based on variations in share prices, to members of the board of directors and/ or employees. Said proposal should contain all information necessary to ensure that the plan is correctly assessed. The proposal should be accompanied by the rules of procedure for the plan, or, if these have not yet been drafted, by the general conditions for the plan. |
|
| Grau de Cumprimento | Degree of Fulfillment | ||
| Total | Complete | ||
| Comentário | Remarks | ||
| Todas as propostas dos planos de atribuição de acções e/ou de opções de aquisição de acções a membros do órgão de administração e/ou a trabalhadores submetidas à Assembleia Geral da Novabase continham todos elementos necessários para uma avaliação correcta do plano, tendo sido devidamente acompanhadas do respectivo regulamento. |
All proposals for plans to grant shares and/or options for the purchase of shares to members of the board and/or workers submitted at Novabase's Annual General Meeting did include all the elements required for the correct evaluation of the proposal in question and were duly accompanied by their corresponding regulations. |
||
| Recomendação | Recommendation | ||
| 10A | A sociedade deve adoptar uma política de comunicação de irregularidades alegadamente ocorridas no seio da sociedade, com os seguintes elementos: indicação dos meios através dos quais as comunicações de práticas irregulares podem ser feitas internamente, incluindo as pessoas com |
The company should adopt a policy whereby alleged irregularities occurring within the company are reported, containing the following information: the method through which the irregular practices are reported internally, including the persons permitted to receive such information, the manner in which such reports are to be dealt with, including confidential |
treatment of the information, if such is the wish of the person making the declaration. The general direction of this policy should be disclosed in the corporate governance report.
das sociedades.
legitimidade para receber comunicações, indicação do tratamento a ser dado às comunicações, incluindo tratamento confidencial, caso assim seja pretendido pelo declarante. As linhas gerais desta política devem ser divulgadas no relatório do governo
| IV - Órgão de administração | Board of Directors continuação |
|
|---|---|---|
| Grau de Cumprimento | Degree of Fulfillment | |
| Total | Complete | |
| Comentário | Remarks | |
| A Assembleia Geral Anual de 2006 aprovou um sistema de comunicação de práticas irregulares. Este sistema permite veicular para a Comissão de Auditoria as eventuais participações que sejam feitas. A Novabase pediu em 2006 a aprovação do mesmo à Comissão Nacional de Protecção de Dados (CNPD). |
The 2006 Annual General Meeting approved a system for communicating irregular practices. This system provides for any reports to be directed to the Audit Committee. In 2006 Novabase sought the approval of this system from the Comissão Nacional de Protecção de Dados (Portuguese Data Protection Authority). |
|
| V. Investidores Institucionais | Institutional Investors | |
| Recomendação | Recommendation | |
| Os investidores institucionais devem tomar em consideração as suas responsabilidades quanto a uma utilização diligente, eficiente e critica dos direitos inerentes aos valores mobiliários de que sejam titulares ou cuja gestão se lhes encontre confiada, nomeadamente quanto aos direitos de informação e de voto. |
Institutional investors should take into consideration their responsibility to contribute to the diligent, efficient and critical use of the rights conferred on them by the securities they hold or whose management has been entrusted to them, particularly with regard to information and voting rights. |
|
| Grau de Cumprimento | Degree of Fulfillment | |
| Não aplicável | N/A | |
| Comentário | Remarks | |
| Não aplicável | N/A |
IV
11
Órgãos estatutários e não estatutários
Boards according to the Articles of Association and Other Boards
| Órgãos da Sociedade | Corporate Bodies |
|---|---|
| Órgãos Estatutários | Boards according to the Articles of Association |
| Assembleia Geral (AG) | Annual General Meeting |
Órgão social constituído pelos accionistas com direito de voto. São accionistas com direito de voto todos os accionistas da NOVABASE que detenham pelo menos uma acção da Sociedade.
Corporate board comprised of shareholders with voting rights. Novabase shareholders owning at least one share have voting rights.
Os seus membros poderão ser executivos ou não executivos. Os Administradores executivos integram uma Comissão Executiva criada pelo Conselho de Administração. Entre os Administradores não pertencentes à Comissão Executiva, há três membros independentes nos termos do número 5 do artigo 414.º do Código das Sociedades Comerciais. Os referidos três administradores são ainda considerados independentes nos termos do Regulamento n.º 7/2001 (com as alterações introduzidas pelo Regulamento da CMVM n.º 11/2003, pelo Regulamento da CMVM n.º 10/2005 e pelo Regulamento da CMVM n.º 3/2006). Neste actual mandato, o CA é composto por 3 membros independentes, são eles:
Board of Directors
Luís Fernando de Mira Amaral Manuel Alves Monteiro João Francisco Quadros Saldanha
Members of the Board of Directors may be executive or non-executive. Executive directors make up an Executive Committee created by the Board of Directors. Three directors not belonging to the Executive Committee are independent under the terms of number 5 Article 414 of the Portuguese Company Code and under the terms of CMVM Regulations 7/2001, 11/2003, 10/2005 and 3/2006. The Board of Directors is comprised of the following 3 independent members in its current term:
| Luís Fernando de Mira Amaral | Manuel Alves Monteiro | João Francisco Quadros Saldanha |
|---|---|---|
| Comissão Executiva (CE) | Executive Committee |
A CE, cuja composição é aprovada pelo CA, possui, à data de 31 de Dezembro, sete membros deste órgão de administração. Compete-lhe a gestão corrente da Sociedade podendo praticar todos os actos necessários a esse desígnio, respeitando as competências próprias do Conselho de Administração quanto aos actos que terão de ser a ele submetidos para aprovação, nomeadamente as matérias previstas nas alíneas a) a d), f), l) e m) do artigo 406º do Código das Sociedades Comerciais. A Comissão Executiva define a estrutura organizacional da Sociedade, nomeia colaboradores para exercer cargos de gestão nos órgãos dessa estrutura, e gere todas as áreas funcionais da empresa.
The composition of the Executive Committee is approved by the board of Directors and includes, on 31 December, seven members of this board. It is responsible for the day-to-day running of the company and may perform all actions required to this end, respecting the powers of the Board of Directors with regard to actions which must be submitted for its approval, namely the matters specified in Article 406, Items a) through d), f), l) and m) of the Portuguese Company Code. The Executive Committee defines the company's organizational structure, appoints employees to perform management duties in the corporate boards of this structure and manages all of the company's functional areas.
Criada estatutariamente, os seus 3 membros integram o Conselho de Administração como administradores não executivos independentes. Compete-lhe fiscalizar a actividade da sociedade por forma a garantir o cumprimento da lei e dos estatutos. Efectuou, no ano de 2007, as reuniões estatutariamente previstas e desenvolveu os trabalhos de verificação de contas que entendeu necessários no cumprimento das suas obrigações, tendo procedido às análises e formulado as sugestões que entendeu adequadas.
32 Relatório e Contas Novabase 2007 32 Created by the articles of association, its three members are non-executive independent members of the Board of Directors. Responsible for supervising company activities to ensure compliance with the law and articles of association. It held the compulsory number of meetings in 2007 as required by the articles of association and made all examinations of the accounts that it saw fit as part of its duties. It conducted analyses and made suggestions as deemed necessary.
Para além dos Órgãos Estatutários (Assembleia Geral, Conselho de Administração, Comissão Executiva e Comissão de Auditoria), existe ainda a Comissão de Vencimentos, resumindo-se de seguida as respectivas actividades:
In addition to the boards according to the articles of association (Annual General Meeting, Board of Directors, Executive Committee and Audit Committee), there is also a Remuneration Committee, whose activities are summarized below:
| Órgãos da Sociedade | Corporate Bodies |
|---|---|
| Órgãos Não Estatutários | Other Boards |
| Comissão de Vencimentos (CV) | Remuneration Committee |
Este órgão delibera sobre as condições de remuneração dos membros dos órgãos sociais. A actual composição desta Comissão para o triénio 2006-2008 foi estabelecida pela Assembleia Geral de 20 de Abril de 2006. Preside à CV Francisco Luís Murteira Nabo. Fazem igualmente parte desta comissão Pedro Rebelo de Sousa e Fernando Eduardo Ribeiro Marques.
The Remuneration Committee decides upon the remuneration of corporate board members. Its current members for the three-year period of 2006-2008 were decided in the Annual General Meeting of 20 April 2006. Presiding at the Remuneration Committee is Francisco Luís Murteira Nabo. Pedro Rebelo de Sousa and Fernando Eduardo Ribeiro Marques are also part of this committee.
Os actuais membros desta Comissão são independentes nos termos do n.º 9 do Capítulo 1 do Anexo ao Regulamento da CMVM n.º 7/2001.
All of its members are independent under the terms of Chapter 1, Item 9 of the Annex to CMVM Regulation 7/2001.
Financial and Stock Performance
V
V
O volume de negócios da Novabase, em 2007, atingiu os 313.2M€ (milhões de euros), o que corresponde a um aumento de 19.8% face aos 261.5M€ registados em 2006. Este valor ultrapassa o objectivo estabelecido no início do ano, de atingir em 2007 os 290M€ de volume de negócios.
Novabase's turnover in 2007 was €313.2 million, an increase of 19.8% compared to €261.5 million in 2006.
This figure surpasses the goal laid out at the beginning of the year of reaching €290 million in turnover in 2007.
Deste volume de negócios, 38.9% são gerados fora de Portugal, ou seja 122.0M€, o que representa um crescimento significativo face aos 81.0M€ registados em 2006. O crescimento fora de Portugal ocorreu fundamentalmente na área Novabase Digital TV, embora importe destacar que na área Novabase Consulting as vendas internacionais já representam 15.3% da sua facturação.
38.9% (or €122.0 million) of this turnover originates from outside of Portugal, a significant increase compared to €81.0 million in 2006. Growth outside of Portugal occurred primarily through Novabase Digital TV, although it is important to note that international business now accounts for 15.3% of sales at Novabase Consulting.
O EBITDA atingiu 20.0M€ em 2007, mais 22.2% face aos 16.4M€ obtidos em 2006. Este valor está a meio do intervalo estabelecido no início do ano, de atingir um EBITDA entre os 19M€ e os 21M€.
EBITDA reached €20.0 million in 2007, 22.2% more than the previous year's €16.4 million. This figure falls in the middle of the EBITDA range of €19-21 million laid out at the beginning of the year.
EBITDA
Os Resultados Operacionais (EBIT) atingiram os 13.9M€, um acréscimo de 61.0% face a 2006 (8.6M€). Os Resultados Antes de Impostos (RAI) são neste período de 10.4M€, registando um crescimento de 87.4% versus os 5.5M€ registados em 2006.
Os Resultados Líquidos Consolidados, depois de interesses minoritários, atingiram 7.0M€, tendo crescido 35.4% face ao valor de 5.2M€ registado em 2006.
Operating Results (EBIT) were €13.9 million, an increase of 61.0% compared to 2006 (€8.6 million). Earnings Before Taxes (EBT) in 2007 were €10.4 million, which reflects an increase of 87.4% compared to €5.5 million in 2006.
Consolidated Net Profit after minority interests was €7.0 million, 35.4% more than the previous years' €5.2 million.
Resultados Líquidos Consolidados Net Results
M€
V
A evolução comparativa do EBITDA para os Resultados Líquidos é a seguinte: Trends in EBITDA to net profit were as follows:
EBITDA para Resultados Liquidos 2007 vs 2006 From EBITDA to Net Profit (2007 vs. 2006)
A
O
s Amortizações cresceram 10.7% e fixaram-se em 6.2M€ (inclui 0.5M€ relativas à saída das instalações).
Os Resultados Financeiros atingiram o valor líquido negativo de 3.5M€, que compara com o valor líquido negativo de 3.1M€, obtido em 2006. Esta deterioração no 4Q ocorreu essencialmente no negócio de Digital TV que foi penalizado com 0.6M€ de perdas com diferenças cambiais.
O Imposto corrente ascendeu a -1.1M€ enquanto o Imposto diferido activo resultou num proveito de imposto que ascendeu a 1.0M€, pelo que o IRC (imposto sobre o rendimento) de 2007 se fixou em -0.1M€. O recurso a candidaturas de SIFIDE (sistemas de incentivos fiscais à Investigação & Desenvolvimento Empresarial) teve um impacto de 3.6M€ e permitiu reduzir o IRC (imposto sobre o rendimento) de 2007 de -3.7M€ para -0.1M€.
Os Interesses Minoritários em 2007 de -3.3M€ comparam com 0.3M€ no período homólogo. A diferença provém dos resultados da Digital TV, que em 2006 tinham sido negativos, situação invertida em 2007 em que são positivos.
Assim, os Resultados Líquidos Consolidados, depois de interesses minoritários e dos resultados das operações descontinuadas são, neste período, de 7.0M€, representando um acréscimo de 35.4% face aos 5.2M€ apurados em 2006.
valor do investimento recorrente consolidado ascendeu, em 2007, a 3.2M€. Este valor, que corresponde a saída de cash do Balanço, decompõe-se em três parcelas, uma primeira parcela relativa a imobilizado em curso no valor de 0.4M€ referente ao desenvolvimento de projectos ainda em curso, uma segunda parcela, no valor de 0.7M€ relativa a imobilizado incorpóreo referente a projectos capitalizados de I&D e ainda uma terceira parcela, no valor de 2.1M€, relativa a imobilizado corpóreo diverso, como equipamento e software informático e mobiliário.
O investimento não recorrente é negativo, no valor total de -2.2M€, correspondendo na sua maioria a parcelas relativas a desinvestimentos, que incluem abates, variações de perímetro, transferências e reclassificações que são non-cash itens. No entanto, este valor total de -2.2M€ inclui ainda um investimento corpóreo de 2.6M€ relativo à mudança de instalações que corresponde a uma saída de cash do Balanço.
Houve portanto uma saída total de cash de 5.8M€, da qual 3.2M€ é recorrente e 2.6M€ é não recorrente.
Amortization grew 10.7% at €6.2 million (including €0.5 million for the facilities change).
The Financial Results were minus €3.5 million net compared to minus €3.1 million net in 2006. This downturn in the fourth quarter occurred primarily in the Digital TV business, which was penalized with €0.6 million in losses due to exchange differences.
Current taxes rose to minus €1.1 million, while active deferred taxes resulted in a tax gain of €1.0 million for a 2007 corporate income tax (IRC) of minus €0.1 million. The use of SIFIDE research and development tax incentives had an impact of €3.6 million, reducing 2007 corporate income tax (IRC) from minus €3.7 to minus €0.1 million.
2007 minority interests were minus €3.3 million compared to €0.3 million in the previous year. This difference stems from the results of Digital TV, which were negative in 2006 but positive in 2007.
Consolidated Net Profit, after minority interests and earnings from discontinued operations, was €7.0 million for the year, which represents an increase of 35.4% compared to €5.2 million in 2006.
Consolidated recurring investment reached €3.2 million in 2007. This amount, which corresponds to a cash write-off, is divided into three parts: the first pertains to work in progress, in the amount of €0.4 million, related to the development of projects that are still under construction; the second, in the amount of €0.7 million, pertains to intangible assets related to capitalized R&D projects; and the third, in the amount of €2.1 million, pertains to miscellaneous tangible fixed assets, such as IT equipment and software, and furnishings.
Non-recurring investment is negative, totaling minus €2.2 million, and for the most part pertains to disinvestments, including writeoffs, perimeter variations, transfers and reclassifications (non-cash items). However, this total figure of minus €2.2 million also includes a tangible investment of €2.6 million for the facilities relocation, corresponding to a cash write-off.
Cash write-offs thus totaled €5.8 million, of which €3.2 million is recurring and €2.6 million is non-recurring.
| Investimento Capital Expenditure |
Não Recorrente Non-Recurring |
Recorrente Recurring |
Total Total |
|
|---|---|---|---|---|
| Imobilizado em curso - Work in Progress | ||||
| Imobilizado em curso - Work in Progress | 0.4 | 0.4 | ||
| Transferência p/ Imob. Firme | -1.1 | -1.1 | ||
| Transfer to Tangible Fixed Assets | ||||
| Sub-total (1) | -1.1 | 0.4 | -0.7 | |
| Subtotal (1) | ||||
| Imobiliz. Incorpóreo - Intangible Assets | ||||
| I&D - R&D | -0.4 | 0.7 | 0.3 | |
| Propriedade Industrial Out.Direitos | 0.1 | 0.1 | ||
| Industrial Property and Other Rights | ||||
| Sub-total (2) | -0.3 | 0.7 | 0.4 | |
| Subtotal (2) | ||||
| Imobiliz. Corpóreo - Tangible Fixed Assets | ||||
| Eq. Transporte/leasing/aov | -0.2 | -0.2 | ||
| Transport Equipment/Leasing/OR | ||||
| Corpóreos relativos a mudança de instalações | 2.6 | 2.6 | ||
| Tangible/Facilities Relocation | ||||
| Outros Corpóreos - Tangible/Other | -1.4 | 2.1 | 0.6 | |
| Sub-total (3) | 1.0 | 2.1 | 3.0 | |
| Subtotal (3) | ||||
| Total - Total | -0.4 | 3.2 | 2.8 | |
| Variação Perímetro | -1.8 | -1.8 | ||
| Perimeter Variation | ||||
| Total - Total | -2.2 | 3.2 | 1.0 |
E m termos de Recursos Humanos, a Novabase teve em média, em 2007, 1650 colaboradores, o que representa um acréscimo de 11.7% face a 2006 (1477). A distribuição de colaboradores pelas várias áreas da Novabase é a que se mostra na figura seguinte:
In terms of human resources, Novabase had an average of 1,650 employees in 2007, an increase of 11.7% compared to 1,477 in 2006. The following table shows the breakdown of employees among Novabase's various business areas:
Número Médio de colaboradores Average Number of Employees
colaboradores - employees
Novabase Consulting
A Novabase Consulting apresentou em 2007 uma equipa de 975 consultores e contribuiu com 24% do volume de negócios total da Novabase e 63% do EBITDA total gerado em 2007.
Novabase Consulting had a team of 975 consultants in 2007, and generated 24% of Novabase's total turnover and 63% of the total EBITDA in 2007.
EBITDA
V V
Esta área de negócio apresentou um forte crescimento em 2007, cresceu 10.0% num enquadramento de fraco crescimento da economia e também do negócio de IT, o qual segundo os analistas terá sido inferior a 4%.
This business area showed strong growth in 2007, growing 10.0% in an environment of weak economic and IT growth of less than 4% according to analysts.
Volume de Negócios Novabase Consuting Novabase Consulting Turnover
O EBITDA da Novabase Consulting em 2007 aumentou 31.4% (de 9.6M€ para 12.6M€), acima do aumento das vendas de 10.0%, fixando-se a margem EBITDA nos 16.6%.
Novabase Consulting's EBITDA grew 31.4% in 2007 (from €9.6 to €12.6 million), above the 10.0% sales increase, for an EBITDA margin of 16.6%.
EBITDA Novabase Consuting Novabase Consulting EBITDA
M€
V V
Em 2007, a Novabase Engineering dispôs de uma força laboral de 287 colaboradores e contribuiu com 39% do volume de negócios e apenas 2% do EBITDA total gerado pela Novabase.
Novabase Engineering had a workforce of 287 employees in 2007, and generated 39% of Novabase's total turnover and just 2% of the total EBITDA.
O volume de negócios global desta área de negócios atingiu 122.0M€, o que representa um crescimento de 13.9% face ao valor de 2006. Este crescimento deve-se, essencialmente, à área de IT Infrastructures.
This business area's total turnover reached €122.0 million, an increase of 13.9% compared to 2006. This growth was primarily due to the IT Infrastructures area.
O EBITDA da Novabase Engineering em 2007 diminuiu 81.8%, essencialmente devido à redução acentuada de rentabilidade da área de Mobility Solutions, embora o negócio de maior dimensão da Novabase Engineering, IT Infrastructures, tenha melhorado para o melhor nível de sempre (margem passou de 2.9% para 5.7%).
Ainda nesta área, o negócio de Ticketing já iniciou a recuperação da rentabilidade no 4Q07 e espera-se que continue a recuperação durante 2008. O negócio de Mobility Solutions suscita maior preocupação, estando a administração a tomar medidas para conseguir a sua estabilização.
Novabase Engineering's EBITDA fell 81.8% in 2007, mainly due to a sharp decline in the profitability of the Mobility Solutions area. However, Novabase Engineering's largest business, IT Infrastructures, had its best performance ever (increase in margin from 2.9% to 5.7%).
Also in this business area, the Ticketing business began to recover profitability in the fourth quarter of 2007, which is expected to continue in 2008. Greater concerns have emerged in the Mobility Solutions business, where management is pursuing measures to achieve greater stability.
Volume de Negócios Novabase Engineering Novabase Engineering Turnover
V V
EBITDA Novabase Engineering Novabase Engineering EBITDA
V V
Em 2007 a Novabase Digital TV dispõe de uma massa crítica de 302 colaboradores e contribui com 37% do volume de negócios e 35% do EBITDA gerados em 2007 da Novabase.
Novabase Digital TV had a critical mass of 302 employees in 2007, generating 37% of Novabase's turnover and 35% of its EBITDA.
A área de negócio Digital TV da Novabase é uma das mais significativas a nível Mundial (quota de mercado mundial de 2.5%) situando-se entre as dez maiores do Mundo. Em 2007 este negócio cresceu 38.5% e atingiu 115.8M€. Este crescimento é tanto mais significativo quanto, tal como já era previsto, se verificou uma redução de vendas no mercado nacional.
Novabase's Digital TV area, globally ranked among the top ten, is one of the most important in the world (worldwide market share of 2.5%). This business grew 38.5% to €115.8 million in 2007. This growth is even more noteworthy in light of the decrease in domestic market sales, in line with earlier predictions.
Volume de Negócios Novabase Digital TV Novabase Digital TV Turnover
Novabase Annual Report 2007 4411
O EBITDA da Novabase Digital TV em 2007 aumentou 105.4% para 7.0M€, o que consolida a recuperação da rentabilidade neste negócio, já iniciada em 2006.
Novabase Digital TV's EBITDA grew 105.4% to €7.0 million in 2007, consolidating this business' recovery of profitability which began in 2006.
EBITDA Novabase Digital TV Novabase Digital TV EBITDA
V V
C
O ano de 2007 foi caracterizado por uma apreciação do índice PSI20, que valorizou 16.0%.
A cotação da acção Novabase desvalorizou-se no período 40.2%, o que compara com uma desvalorização de 2.4% ocorrida no índice EuroStoxx Technology. Em 2007, a rotação representou 64.2% do capital da Novabase, tendo sido transaccionadas 20.2 milhões de acções, valores próximos dos ocorridos em 2006 (rotação de 65.5% do capital, tendo sido transaccionados 20.6 milhões de acções). A Novabase saiu do índice PSI20 no final do 1º semestre de 2007, como resultado da entrada em bolsa de novos players com níveis de liquidez bastante superiores.
2007 was marked by gains in the PSI20 Index, which was up 16.0%.
Novabase's share price fell 40.2% during the year, compared to a 2.4% drop in the EuroStoxx Technology Index. Rotation represented 64.2% of Novabase's capital in 2007, with 20.2 million shares traded, similar to the figures for 2006 (turnover of 65.5% of capital, with 20.6 million shares traded). Novabase left the PSI20 Index at the end of the first half of 2007 due to the entry of new market players with significantly higher liquidity levels.
Ao comparar a cotação da Novabase com um conjunto de outras empresas similares do sector de TI na Europa, observamos que a performance da acção Novabase em 2007 foi inferior relativamente à performance das outras empresas, mostrando uma menor volatilidade.
When comparing Novabase's share price with other similar companies from Europe's IT sector, one can see that the Novabase share's performance in 2007 was lower than that of other companies, with less volatility.
A cotação média, ponderada pela quantidade, do título Novabase em 2007 cifrou-se em 5.17 euros por acção. Foram transaccionados 20.2 milhões de acções em todas as 255 sessões de bolsa em 2007, correspondentes a um valor de transacção de 103.3M€.
V V
O número médio diário de acções transaccionadas em 2007 fixou-se em 79.1 mil títulos, correspondente a um valor médio diário de cerca de 0.4M€.
A cotação no último dia de bolsa de 2007, dia 31 de Dezembro de 2007, fixou-se nos 3.27 euros, o que representa uma desvalorização de cerca de 40.5% face aos 5.50 euros com que a Novabase se fixou no final de 2006.
A cotação de fecho máxima ocorrida em 2007 atingiu os 5.91 euros, enquanto que o valor mínimo de fecho registado fixou-se nos 3.27 euros. A capitalização bolsista no final de 2007 fixou-se em 102.7M€.
The average Novabase share price weighted by quantity in 2007 was 5.17 euros per share. 20.2 million shares were traded in all 255 stock exchange sessions in 2007, corresponding to a trading value of €103.3 million.
The daily average number of shares traded in 2007 was 79.1 thousand shares, corresponding to a daily average value of about €0.4 million.
The share price on the last day of trading, 31 December 2007, was 3.27 euros, which represents a loss of around 40.5% compared to the 5.50 euros that Novabase shares registered at the end of 2006.
The highest closing price achieved in 2007 was 5.91 euros, while the lowest closing price recorded was 3.27 euros. Market capitalization at the end of 2007 was €102.7 million.
| Resumo - Summary | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | |
|---|---|---|---|---|---|---|---|
| Cotação mínima - Minimum price Cotação máxima - Maximum price Cotação média ponderada - Average weighted price Nº títulos transaccionados (milhões) |
3.27 5.91 5.17 20.2 |
5.22 7.27 5.91 20.6 |
5.45 6.96 6.16 8.5 |
5.01 7.80 6.13 5.5 |
5.10 6.26 5.81 4.0 |
4.06 8.45 6.32 7.0 |
|
| Number of shares traded (million) Capitalização Bolsista no último dia (M€) Market capitalization on last day (million €) |
102.7 | 172.7 | 182.4 | 178.1 | 166.7 | 163.9 |
No exercício de 2007, a Novabase SGPS, SA apresentou um resultado líquido consolidado de € 6.996.311,73 (seis milhões novecentos e noventa e seis mil, trezentos e onze euros e setenta e três cêntimos) e um resultado líquido negativo de €1.523.597,64 (um milhão quinhentos e vinte e três mil, quinhentos e noventa e sete euros e sessenta e quatro cêntimos) nas contas individuais, (que não reflectem os resultados das suas participadas).
VI
Nos termos das disposições legais e estatuárias, o Conselho de Administração propõe que os resultados líquidos, a título individual, apurados no exercício de 2007, no valor negativo de € 1.523.597,64, sejam integrados na rubrica de Resultados Transitados.
Rogério dos Santos Carapuça (Presidente/Chairman)
João Nuno da Silva Bento
Luís Mira Amaral
José Afonso Oom de Sousa
Álvaro José da Silva Ferreira
João Quadros Saldanha
Pedro Miguel Quinteiro Marques de Carvalho
Manuel Tavares Festas
Manuel Alves Monteiro
Luís Paulo Cardoso Salvado
Joaquim Sérvulo Rodrigues
In 2007, Novabase SGPS, SA recorded a consolidated net profit of €6.996.311,73 (six million, nine hundred and ninety six thousand three hundred and eleven euros and seventy three cents) and a net loss of €1.523.597,64 (one million, five hundred and twenty three thousand five hundred and ninety seven euros and sixty four cents) in the individual accounts, (which do not reflect the results of its affiliates).
Pursuant to the provisions of the law and the articles of association, the Board of Directors proposes that the net loss for 2007, in the amount of €1,523,597.64, be allocated on an individual basis to Retained Earnings.
Pedro Rebelo de Sousa (Presidente/Chairman) Maria José Santana (Secretário/Secretary)
Luís Mira Amaral (Presidente/Chairman) Manuel Alves Monteiro João Quadros Saldanha
Rogério dos Santos Carapuça (Presidente/Chairman) José Afonso Oom Ferreira de Sousa Pedro Miguel Quinteiro Marques de Carvalho Luís Paulo Cardoso Salvado João Nuno da Silva Bento Álvaro José da Silva Ferreira José Carlos de Almeida Pedro de Jesus * João Vasco Tavares da Mota Ranito * Manuel Saldanha Fortes Tavares Festas Joaquim Manuel Jordão Sérvulo Rodrigues Luís Fernandes de Mira Amaral Manuel Alves Monteiro João Francisco Ferreira de Almeida e Quadros Saldanha
* Renunciou ao mandato em 28 de Setembro 2007 * Resigned from office on 28 September 2007
Lisboa, 3 de Abril de 2008
Demonstrações Financeiras Financial Statements
| 31.12.07 | 31.12.06 | ||
|---|---|---|---|
| Activo | Assets | ||
| Activos Não Correntes | Non current assets | ||
| Activos fixos tangíveis | Property plant and equipment | 8.447 | 6.091 |
| Activos fixos intangíveis | Intangible assets | 34.737 | 36.959 |
| Investimentos em empresas associadas | Investments in associates | 4.925 | 3.623 |
| Activos por impostos diferidos | Deferred income tax assets | 11.111 | 9.829 |
| Total de Activos Não Correntes | Total Non current assets | 59.220 | 56.502 |
| Activos Correntes | Current assets | ||
| Inventários | Inventories | 20.864 | 23.611 |
| Clientes e outras contas a receber | Trade and other receivables | 120.155 | 92.158 |
| Imposto sobre o rendimento a receber | Income tax receivable | 1.486 | 1.268 |
| Acréscimos de proveitos | Accrued income | 14.357 | 14.799 |
| Outros activos correntes | Other current assets | 3.180 | 3.221 |
| Activos financeiros disponíveis para venda | Available-for-sale financial assets | - | 839 |
| Caixa e equivalentes a caixa | Cash and cash equivalents | 38.335 | 39.563 |
| Total de Activos Correntes | Total Current assets | 198.377 | 175.459 |
| Total do Activo | Total assets | 257.597 | 231.961 |
| Capitais Próprios | Equity | ||
| Capital social | Share capital | 15.701 | 15.701 |
| Acções próprias | Treasury shares | (249) | (260) |
| Prémios de emissão | Share premium | 49.213 | 49.213 |
| Reservas e resultados acumulados | Reserves and retained earnings | 29.199 | 24.890 |
| Resultado líquido | Profit for the year attributable to equity holders | 6.997 | 5.169 |
| Capitais Próprios atribuíveis aos accionistas | Total Equity attributable to the company's equity holders | 100.861 | 94.713 |
| Interesses minoritários | Minority interest | 13.641 | 11.211 |
| Capitais Próprios totais | Total equity | 114.502 | 105.924 |
| Passivo | Liabilities | ||
| Passivos Não Correntes | Non current liabilities | ||
| Empréstimos | Borrowings | 5.762 | 9.182 |
| Provisões | Provisions | 1.662 | 1.072 |
| Passivos por impostos diferidos | Deferred income tax liabilities | 392 | 157 |
| Total de Passivos Não Correntes | Total Non current liabilities | 7.816 | 10.411 |
| Passivos Correntes | Current liabilities | ||
| Empréstimos | Borrowings | 12.692 | 16.671 |
| Fornecedores e outras contas a pagar | Trade and other payables | 105.409 | 83.490 |
| Imposto corrente sobre o rendimento a pagar | Income tax payable | 131 | 41 |
| Proveitos diferidos e outros passivos correntes | Deferred income and other current liabilities | 17.047 | 15.424 |
| Total dos Passivos Correntes | Total Current liabilities | 135.279 | 115.626 |
| Total do Passivo | Total liabilities | 143.095 | 126.037 |
| Total dos Capitais Próprios e Passivo | Total equity and liabilities | 257.597 | 231.961 |
| Operações em continuação | Continuing Operations | 12 M * 31.12.07 |
12 M * 31.12.06 |
|---|---|---|---|
| Vendas Prestação de serviços Custo das vendas Fornecimentos e serviços externos Gastos com o pessoal Outras perdas líquidas Amortizações e depreciações Resultados Operacionais |
Sales Services rendered Cost of goods sold External supplies and services Employee benefit expense Other losses - net Depreciation and amortisation Operating profit |
204.030 109.167 (178.223) (49.586) (64.018) (1.348) (6.164) 13.858 |
154.780 106.723 (133.778) (55.741) (54.916) (2.893) (5.570) 8.605 |
| Proveitos financeiros Custos financeiros Perdas em associadas Resultados Antes de Impostos |
Finance income Finance costs Losses of associates Profit before income tax |
3.745 (7.228) (25) 10.350 |
1.930 (4.616) (397) 5.522 |
| Imposto sobre o rendimento | Income tax expense | (59) | (78) |
| Resultados das operações em continuação | Profit for the year from continuing operations | 10.291 | 5.444 |
| Operações descontinuadas | Discontinued operations | ||
| Resultados das operações descontinuadas Resultado líquido |
Profit for the year from discontinued operations Profit for the period |
- 10.291 |
68 5.512 |
| Atribuível a: | Attributable to: | ||
| Accionistas Interesses minoritários |
Equity holders of the Company Minority interest |
6.997 3.294 |
5.169 343 |
| 10.291 | 5.512 | ||
| Resultado por acção das operações em continuação atribuível aos accionistas (€ por acção) - básico e diluído |
Earning per share for profit from continuing operations attributable to the equity holders of the Company during the year (expressed in EUR per share) - basic and diluted. |
0.23€ | 0.17€ |
| Resultado por acção das operações descontinuadas atribuível aos accionistas (€ por acção) - básico e diluído |
Earning per share for profit from discontinued operations attributable to the equity holders of the Company during the year (expressed in EUR per share) - basic and diluted. |
Zero € | Zero € |
| 12 M * - período de 12 meses findo em | 12 M * - period of 12 months ended |
Parecer da Comissão de Auditoria Sobre a Informação Financeira Consolidada Opinion of the Audit Committee on the Consolidated Financial Information
S enhores Accionistas, Nos termos da lei, do mandato que nos foi conferido pelos Senhores Accionistas e conforme previsto na g) do artigo 423º-F do Código das Sociedades Comerciais, apresentamos sucinto relato da actividade fiscalizadora desenvolvida e damos Parecer sobre o Relatório de Gestão e as Demonstrações Financeiras Consolidadas apresentados pelo Conselho de Administração da Novabase SGPS, SA relativamente ao exercício findo em 31 de Dezembro de 2007.
Esta comissão realizou ao longo do ano de 2007 diversas reuniões, quer formais quer informais sob a forma de reuniões ah-doc, quer ainda com órgãos de gestão responsáveis pelos Negócios da Novabase, tendo procedido à fiscalização:
• da Administração da Sociedade, seja no tocante à observância do cumprimento da lei, do contrato de sociedade e demais regulamentação em vigor, seja no tocante à sua actividade de gestão, às políticas prosseguidas e à conduta transparente, rigorosa e credível;
• da eficácia dos sistemas de gestão de riscos, e das acções de controlo interno e de auditoria interna; e
• dos mecanismos, procedimentos e acções desenvolvidos na preparação e divulgação de informação financeira, assim como na revisão da exactidão dos documentos de prestação de contas, das políticas contabilísticas e critérios valorimétricos adoptados pela Sociedade, por forma a assegurar que os mesmos correspondem a uma correcta avaliação do património e dos seus resultados.
No âmbito das competências que nos foram conferidas verificámos que:
• o relatório consolidado de gestão evidencia de forma correcta, clara e completa os aspectos mais significativos da evolução dos negócios e da situação patrimonial da Sociedade; igualmente, encontram- -se devidamente identificados todos os riscos existentes, quer aqueles de natureza operacional, quer aqueloutros de natureza financeira; e
Pursuant to the law, the mandate from our shareholders and the provisions of Article 423-F, Item g) of the Portuguese Company Code, we now present a brief summary of our supervisory activities, together with our opinion on the Annual Report and Consolidated Financial Statements presented by the Novabase SGPS, SA Board of Directors for the year ending 31 December 2007.
Over the course of 2007, the Audit Committee held various formal meetings, informal ad-hoc meetings and meetings with Novabase management to supervise the following:
• Company management, in terms of compliance with the law, the memorandum of association and other regulations in force, as well as in relation to management activities, policies pursued and the transparency, diligence and credibility of conduct;
• The efficacy of risk management systems and internal control and auditing activities; and
• Mechanisms, procedures and activities employed in preparing and disclosing financial information and reviewing the accuracy of the accounting documentation, accounting policies and valuation criteria used by the Company, to ensure that these entail an accurate assessment of the Company's assets and results.
• The Consolidated Annual Report accurately, clearly and fully reflects the most significant aspects of the Company's business and financial situation; similarly, all existing risks of both an operational and financial nature have been duly identified; and
• The Consolidated Financial Statements and corresponding Annex truly and fairly reflect the Company's financial situation.
Therefore, in light of the information received from the Board of Directors and the Company's various departments, together with the conclusions of the Statutory Auditors Report, it is our opinion that:
Nestes termos, tendo em consideração as informações recebidas do Conselho de Administração e dos diversos Departamentos da sociedade, bem como, as conclusões constantes da Certificação Legal das Contas, somos do parecer que:
Lisboa, 03 de Abril de 2008
• The Annual Report be approved;
• The Consolidated Financial Statements be approved.
Lisbon, 03 April 2008
A Comissão de Auditoria The Audit Committee
Luis Mira Amaral (Presidente/ Chairman)
João Quadros Saldanha (Vogal/ Member)
Manuel Alves Monteiro (Vogal/ Member)
STATUTORY AUDITORS REPORT IN RESPECT OF THE CONSOLIDATED FINANCIAL INFORMATION
1 Nos termos da legislação aplicável, apresentamos a Certificação Legal das Contas e Relatório de Auditoria sobre a informação financeira contida no Relatório de gestão e nas demonstrações financeiras consolidadas anexas da Novabase SGPS, SA, as quais compreendem o Balanço consolidado em 31 de Dezembro de 2007, (que evidencia um total de 257.597 milhares de euros, e um total de capital próprio de 114.502 milhares de euros, o qual inclui interesses minoritários de 13.641 milhares de euros e um resultado líquido de 6.997 milhares de euros), a Demonstração consolidada dos resultados por naturezas, a Demonstração de alterações no capital próprio consolidado e a Demonstração consolidada dos fluxos de caixa do exercício findo naquela data, e o correspondente Anexo.
O exame a que procedemos foi efectuado de acordo com as Normas Técnicas e as Directrizes de Revisão/ Auditoria da Ordem dos Revisores Oficiais de Contas, as 4
As required by law, we present the Statutory Auditors Report in respect of the Consolidated Financial Information included in the Board of Directors' Report and the consolidated financial statements of Novabase SGPS, SA, comprising the consolidated balance sheet as at 31 December 2007, (which shows total assets of Euros 257.597 thousand, total minority interests of Euros 13.641 thousand and a total shareholder's equity of Euros 114.502 thousand including a net profit of Euros 6.997 thousand), the consolidated statement of income by nature, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended and the corresponding notes to the accounts. 1
We conducted our examination in accordance with the Standards and Technical Recommendations approved by the Institute of Statutory Auditors which require that we plan and perform the examination to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. Accordingly, our examination included: (i) verification that the subsidiary's financial statements have been properly examined and for the cases where such an examination was not carried out, verification, on a sample basis, of the evidence supporting the amounts and disclosures in the consolidated financial statements, and assessing the reasonableness of the estimates, based on the 4
quais exigem que o mesmo seja planeado e executado com o objectivo de obter um grau de segurança aceitável sobre se as demonstrações financeiras consolidadas não contêm distorções materialmente relevantes. Para tanto o referido exame incluíu: (i) a verificação de as demonstrações financeiras das empresas incluídas na consolidação terem sido apropriadamente examinadas e, para os casos significativos em que o não tenham sido, a verificação, numa base de amostragem, do suporte das quantias e divulgações nelas constantes e a avaliação das estimativas, baseadas em juízos e critérios definidos pelo Conselho de Administração, utilizadas na sua preparação; (ii) verificação das operações de consolidação e da aplicação do método da equivalência patrimonial; (iii) a apreciação sobre se são adequadas as políticas contabilísticas adoptadas e a sua divulgação, tendo em conta as circunstâncias; (iv) a verificação da aplicabilidade do princípio da continuidade; (v) a apreciação sobre se é adequada, em termos globais, a apresentação das demonstrações financeiras consolidadas; e (vi) a apreciação se a informação financeira consolidada é completa, verdadeira, actual, clara, objectiva e lícita.
Em nossa opinião, as referidas demonstrações financeiras consolidadas apresentam de forma verdadeira e apropriada, em todos os aspectos materialmente relevantes, a posição financeira consolidada de Novabase SGPS, SA em 31 de Dezembro de 2007, as alterações no capital próprio consolidado, o resultado consolidado das suas operações e os fluxos consolidados de caixa no exercício findo naquela data, em conformidade com as normas internacionais de relato financeiro (IFRS) tal como adoptados na União Europeia e a informação nelas constante é completa, verdadeira, actual, clara, objectiva e lícita. 7
Lisboa, 3 de Abril de 2008
PricewaterhouseCoopers & Associados, S.R.O.C., Lda. representada por:
Abdul Nasser Abdul Sattar, R.O.C.
judgements and criteria of Management used in the preparation of the consolidated financial statements; (ii) verification of the consolidation operations, and, when applicable, the utilization of the equity method; (iii) assessing the appropriateness and consistency of the accounting principles used and their disclosure, as applicable; (iv) assessing the applicability of the going concern basis of accounting; (v) assessing the overall presentation of the consolidated financial statements; and (vi) assessing whether the consolidated financial information is complete, true, timely, clear, objective and licit.
In our opinion, the consolidated financial statements referred to above, present fairly in all material respects, the consolidated financial position of Novabase SGPS, SA as at 31 December 2007, the consolidated results of their operations and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU and the information included is complete, true, timely, clear, objective and licit. 7
Lisbon, 3 April 2008
PricewaterhouseCoopers & Associados, S.R.O.C., Lda. represented by:
Abdul Nasser Abdul Sattar, R.O.C.
PricewaterhouseCoopers & Associados Sociedade de Revisores Oficiais de Contas, Lda. Sede: Palácio Sottomayor, Rua Sousa Martins, 1 - 3º, 1050 - 217 Lisboa Matriculada na Conservatória do Registo Comercial sob o nº 506 628 752 (ex nº. 11912)
Inscrita na lista dos Revisores Oficiais de Contas sob o nº 183 NIPC 506 628 752 Capital Social Euros 245.500 Inscrita na Comissão de Valores Mobiliários sob o nº 9077
CORPORATE GOVERNANCE REPORT 2007
| Shareholdings of Corporate Board Members (Article 447, Item 5 of the Company Code) | ||||
|---|---|---|---|---|
| …………………………………………………………………………………………….……………. 3 | ||||
| Shareholdings (Article 447, Item 4 of the Company Code)……………………………………. 3 |
| 1.1. Division of Powers, Structure and Corporate Governance Model ………………… 11 | |
|---|---|
| 1.1.1. Organization Chart …………………………………………………………………… 12 |
|
| 1.1.2. Corporate Boards and Governance Model …………………………………… 13 |
|
| 1.2. Changes in Novabase's share prices ………………………………………………………….16 | |
| 1.2.1. Relevant Occurrences and Presentation of Results…………….….……… 18 |
|
| 1.2.2. Changes in Share Capital ………………………………………….……… 20 |
|
| 1.3. Novabase's Dividend Policy …………………………………………….……… 20 | |
| 1.4. Plan for Options to Subscribe and/or Purchase Novabase Stock .………… 21 | |
| 1.5. The Use of New Technologies in Publicising Information and in Preparation for Annual | |
| General Meetings …………………………………………………………………… 26 | |
| 1.6. Business with Members of the Corporate Boards and Qualified | |
| Shareholders……………………………………………………………………… 26 | |
| 1.7. Investor Relations Office ………………………….…………….…………………….…… 26 | |
| 1.8. Remuneration Committee ……………………….…………………………………….…… 27 | |
| 1.9. Fees Paid to Auditors ………………………………………….……………………………. 27 |
| 3.1. Internal Rules and Confidentiality …………………………………………………………… 30 | |
|---|---|
| 3.2. Conflicts of Interest ………………………………………………………………………….… 30 | |
| 3.3. Risk Control in Novabase's Business Activities ………………………………………….…31 | |
| 3.4. Limits to Voting Rights, Special Rights and Shareholders' Agreements ………………31 |
| 4.1. Individual Remuneration of Members of the Board of Directors ……….…38 | |
|---|---|
| 4.2. Policy for Reporting Irregularities…………………….………………………………………39 | |
| 5.1. Fees Paid to Auditors ……………………………………….……………….…… 40 | |
|---|---|
| 5.2. Business with Key Shareholders ………………………………………….………………… 40 |
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| Shareholders | No. Shares | % capital | % Voting Rights |
|---|---|---|---|
| José Afonso Oom Ferreira de Sousa | 2.498.746 | 7,96% | 8,09% |
| Pedro Miguel Q. Marques de Carvalho | 2.498.697 | 7,96% | 8,09% |
| Rogério dos Santos Carapuça | 1.884.787 | 6,00% | 6,10% |
| Luís Paulo Cardoso Salvado | 1.786.790 | 5,69% | 5,79% |
| João Nuno da Silva Bento | 1.783.563 | 5,68% | 5,78% |
| Álvaro José da Silva Ferreira | 804.866 | 2,56% | 2,61% |
| Manuel Saldanha Fortes Tavares Festas | 74.946 | 0,24% | 0,24% |
| Manuel Alves Monteiro | 5.000 | 0,02% | 0,02% |
| TOTAL | 11.337.395 | 36,11% | 36,69% |
| Shareholder | Partial No. | No. Shares | % Capital | % Voting Rights |
|---|---|---|---|---|
| ES TECH VENTURES, SGPS, SA | 1,792,144 | |||
| Other companies controlled by or part of the Novabase Group |
1,200,395 | |||
| Corporate Board members | 170 | |||
| Banco Espírito Santo, SA Group (under the terms of Article 20, Item 1 of the Securities Code) (*) |
2,992,709 | 9.53% | 9.68% | |
| José Afonso Oom Ferreira de Sousa | 2,498,746 | 7.96% | 8.09% | |
| Pedro Miguel Q. Marques de Carvalho | 2,498,697 | 7.96% | 8.09% | |
| Rogério dos Santos Carapuça | 1,884,787 | 6.00% | 6.10% | |
| Luís Paulo Cardoso Salvado | 1,786,790 | 5.69% | 5.78% | |
| João Nuno da Silva Bento | 1,783,563 | 5.68% | 5.77% | |
| Caixagest - Técnicas de Gestão de Fundos, SA (*) |
1,465,828 | 4.67% | 4.74% | |
| Millennium Acções Portugal Fund | 675,802 | |||
| Millennium PPA Fund | 621,378 | |||
| Millennium BCP - Gestão de Fundos, SA (under the terms of Article 20, Item 1 of the Securities Code) (*) |
1,297,180 | 4.13% | 4.20% | |
| Santander Gestão de Activos - Sociedade Gestora F.I.M., SA (*) |
947,950 | 3.02% | 3.07% | |
| BPI – own portfolio | 160,064 | |||
| Funds managed by BPI – Gestão de Activos SGFIM, SA |
734,440 | |||
| BPI customers with discretionary portfolio management |
1000 | |||
| Banco BPI, SA Group (under the terms of Article 20, Item 1 of the Securities |
||||
| Code) (*) Álvaro José da Silva Ferreira |
895,504 804,866 |
2.85% 2.56% |
2.90% 2.60% |
|
| Manuel Saldanha Tavares Festas | 74,946 | 0.24% | 0.24% | |
| TOTAL | 18,931,566 | 60.29% | 61.26% |
(*) Shareholdings correspond to last positions notified to the company as of 31 December 2007.
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Novabase has chosen to attach a separate annex to the 2007 Annual Report and Accounts, devoted entirely to the management of the listed company, as required by CMVM (Portuguese Securities Market Commission) Regulation 07/2001 on the Management of Listed Companies, as amended by CMVM Regulation 11/2003, CMVM Regulation 10/2005 and CMVM Regulation 3/2006.
In addition, this report aims to fulfil the obligation to annually disclose the detailed structure and practices of corporate governance, under the terms of Article 245-A of the Securities Code, applicable to the issuers of shares admitted to trading in regulated markets.
This annex contains information complying with the requirements of Article 7 of the Securities Code and refers only to the company's annual report, of which it is an integral part as an annex.
Novabase has been a publicly-traded company since July 2000. It operates according to a constantly-evolving corporate governance model, aimed at optimizing its performance and benefiting all of its stakeholders - those interested in its corporate activities, namely shareholders, investors, customers, partners and employees.
In 2007, the CMVM published a report on the disclosure of information involving corporate governance which evaluated degrees of compliance with CMVM recommendations on the corporate governance of companies listed on the Eurolist of Euronext on 31 December 2006. It ranked Novabase as the most compliant of these listed companies.
This CMVM report on the disclosure of information involving corporate governance was based on reports on corporate governance structure and practices, prepared by companies at the end of each year following the model in the Annex to CMVM Regulation 7/2001 (as amended by CMVM Regulation no. 11/2003, by CMVM Regulation no. 10/2005 and by CMVM Regulation no. 3/2006). Novabase was the listed company with the highest degree of compliance, having reached 92% in 2006, a clear upturn compared to 38% in 2005.
Shareholders approved an Anglo-Saxon corporate governance model at the Annual General Meeting of 12 April 2007, refining the model from 2006, in light of trends in best corporate governance practices, CMVM recommendations on the management of listed companies and Novabase's experiences since its admission to trading on the Euronext Lisbon Official Stock Exchange.
Since the corporate governance model is a dynamic process under constant refinement and definition, the main changes to the 2006 governance model, implemented in 2007 (approved at the last Annual General Meeting of 12 April 2007), are as follows:
| Model/Board | Changes Implemented in 2007 |
|---|---|
| Anglo-Saxon Model | Adoption of the Anglo-Saxon corporate governance model: in light of amendments to the Company Code under Decree-Law no. 76-A/2006 of 29 March, the Board of Directors submitted, at the last Annual General Meeting, a proposal to change the articles of association so that Novabase could adopt the Anglo-Saxon corporate governance model by institutionalizing the Audit Committee as a board according to the articles of association for supervising company activities, consequently eliminating the Board of Auditors. In this way, the company's new corporate governance model was comprised of a Board of Directors including an Audit Committee and a statutory auditor. |
| General Meeting | At the last Annual General Meeting, the Board of Directors proposed reducing the minimum number of shares from 1,000 to 1 for the purpose of shareholders exercising their voting rights. Each share thus corresponds to one vote. This amendment to the articles of association is now aligned with the new CMVM Corporate Governance Code, which was approved in 2007 and will become effective on 1 January 2009. |
Summary of Novabase's Declaration of Compliance with CMVM recommendations (CMVM Regulation 07/2001, as amended by CMVM Regulation 11/2003, CMVM Regulation 10/2005 and CMVM Regulation 3/2006).
CMVM recommendations on the management of listed companies, adopted and not adopted (defining not adopted as those recommendations which were not followed in their entirety), are itemized below.
| Recommendation | Degree of Fulfilment |
Remarks |
|---|---|---|
| I – Disclosure of Information 1. The company must ensure that it has permanent contact with the market, that the principle of equality among shareholders is upheld and that uneven access of investors to information is prevented. To these ends, companies should set up an investor support office. |
TOTAL | Novabase provides permanent support to the capital market. The Investor Relations Office represents Novabase in its dealings with the CMVM and investors, including contact with private and institutional, foreign and Portuguese investors. The office provides information through Novabase's website, with links of interest for investors with relevant information by investor profile (financial information, financial calendar, reserved information, area reserved for Annual General Meetings and the postal/electronic voting model – the latter available since 2006 – among others). |
| II – Voting Rights and Representation of Shareholders 2. The active exercising of voting rights, whether directly, by post or by proxy should not be restricted. To this end, the following examples are considered to restrict the active exercise of voting rights: a) The imposition of a period of more then 5 working days between the deposit or blocking of shares and permission to participate in the general meeting; b) Any restriction in the articles of association on postal voting; c) The imposition of a requirement that postal votes be received more than 5 days in advance; d) The non-availability of voting slips for shareholders wishing to submit their vote by post. |
TOTAL | As they stand, Novabase's articles of association do not provide for any restriction on voting rights, and votes may be cast by proxy, by post or electronically. Novabase therefore fulfils this CMVM recommendation in its entirety. |
| III – Corporate Rules 3. It is recommended that companies establish an internal control system, |
TOTAL | Novabase has an internal audit team whose job is to conduct audits of the financial departments of Novabase's affiliates. |
| for the efficient detection of risks linked to their activity, as a means of safeguarding their assets and enhancing the transparency of their corporate governance practices. |
Where project risk management is concerned, Novabase has a project qualification methodology which analyzes various specific parameters. The offer management unit analyses the industry in order to detect current trends and promote the development of skills within Novabase to address these trends. It controls typical risks in the IT sector, such as technology obsolescence, the risk that solutions may not be suitable, and the timing of the development and proposal of new solutions not being right for the market. |
|
|---|---|---|
| 4. Measures adopted to prevent the success of takeover bids should respect the interests of the company and its shareholders. Measures considered contrary to these interests include defensive clauses intended to cause an automatic erosion of company assets in the event of the transfer of control or changes to the composition of the board which prove detrimental to the free transferability of shares and the free assessment by shareholders of the performance of members of the board. |
PARTIAL | No measures aimed at preventing the success of takeover bids exist in Novabase's articles of association. There is a shareholders' agreement among a group of shareholders which expires in April 2009 (whose content was disclosed on 27 April 2006). The CMVM believes that these agreements may prove detrimental to the free transferability of shares and the free assessment by shareholders of the performance of members of the board. Novabase believes that the existence of a shareholders' agreement does not constitute a defensive measure contrary to shareholder interests in itself, since it ensures stability in the management of the company, therefore safeguarding Novabase's corporate and shareholder interests. |
| IV – Board of Directors 5. The board should be composed of a number of members who provide effective guidance for the management of the company and the persons responsible for said management. |
TOTAL | Novabase's Board of Directors is composed of a number of members who effectively control and guide the company's activities. In 2007, this board met regularly, at least once a month, thus ensuring effective control of the company's management. |
| 5-A. The board of directors should include a sufficient number of non executive directors, whose role it is to continuously monitor and assess the management of the company by the executive members of the board. Members of other corporate bodies may exercise ancillary roles or, at the very most, substitute board members, if the supervisory powers involved are equivalent and exercised in fact. |
TOTAL | The composition of the Board of Directors includes 4 non-executive directors, 3 of whom are independent and comprise the Audit Committee. It is through this body that these independent directors monitor and assess the management of the Company on a continuous basis. They are empowered to propose the appointment of external auditors, supervise the implementation of Novabase's strategic and budgetary plan each year, and monitor the activities of the Executive Committee in performing its duties involving the day-to-day running of Novabase. In view of the above, Novabase has fulfilled this recommendation. |
| 6. The non-executive members of the board of directors must include a sufficient number of independent members. When there is only one non executive director, he/she must also be independent. Independent members of other corporate bodies may exercise ancillary roles or, at the very most, substitute board members, if the supervisory powers involved are equivalent and exercised in fact. |
TOTAL | Novabase's Board of Directors is currently comprised of three independent directors (more than 25% of all members of the board) under the terms of Article 1 (2) of CMVM Regulation 7/2001, to monitor and supervise the management of the company on an informed basis. Novabase thus fulfils this recommendation in its entirety. |
|---|---|---|
| 7. The board of directors should create internal audit committees, with the power to assess the corporate structure and its governance. |
TOTAL | A proposal to change the articles of association so that the company could adopt the Anglo-Saxon corporate governance model, through the creation in the articles of association of the Audit Committee within the Board of Directors, was approved at the last Annual General Meeting. The composition of this Committee was approved at the Annual General Meeting. |
| 8. The remuneration of members of the board of directors should be structured in such a way as to permit the interests of board members to be in line with those of the company, and should be disclosed annually in individual terms. |
TOTAL | Mechanisms have been created to align the interests of the company's directors and shareholders by means of variable remuneration, which depends both on Novabase's annual financial performance and the performance of Novabase's stock. Novabase has explicitly adopted the recommendation to publish individualized information on remuneration of members of managing boards (i.e. by publishing individualized information on remuneration of members of the Board of Directors). |
| 8-A. A declaration on the policy for remunerating members of a company's corporate bodies should be submitted to the attention of shareholders at the annual general meeting. |
TOTAL | The general criteria to be followed in this evaluation for the three-year period of 2006- 2008 were presented by the Remuneration Committee and approved at the 2006 Annual General Meeting. Each year, the Remuneration Committee submits a report to the Annual General Meeting on the application of this policy in the preceding year. This year, this report is an annex to the Annual Report and Accounts. |
| 9. Members of the remuneration committee or equivalent should be independent as regards the members of the board of directors. |
TOTAL | Novabase fulfils this recommendation in its entirety, since the current members of the Remuneration Committee, subject to the approval of the 2006 Annual General Meeting, are independent from management and other corporate boards, namely Francisco Luís Murteira Nabo, Pedro Rebelo de Sousa and Fernando Eduardo Ribeiro Marques. |
| 10. A proposal should be submitted to | TOTAL | All proposals for plans to allot shares and/or |
| the general meeting with regard to the approval of plans for the allotment of shares, and/or options to purchase shares or based on variations in share prices, to members of the board of directors and/or employees. Said proposal should contain all information necessary to ensure that the plan is correctly assessed. The proposal should be accompanied by the rules of procedure for the plan, or, if these have not yet been drafted, by the general conditions for the plan. |
options for the purchase of shares to members of the board and/or workers submitted at Novabase's Annual General Meeting did include all the elements required for the correct evaluation of the proposal in question and were duly accompanied by their corresponding regulations. |
|
|---|---|---|
| 10-A. The company should adopt a policy whereby alleged irregularities occurring within the company are reported, containing the following information: the method through which the irregular practices are reported internally, including the persons permitted to receive such information, the manner in which such reports are to be dealt with, including confidential treatment of the information, if such is the wish of the person making the declaration. The general direction of this policy should be disclosed in the corporate governance report. |
TOTAL | The 2006 Annual General Meeting approved the creation of a system for communicating irregular practices. This system provides for any reports to be routed to the Audit Committee. In 2006 Novabase sought the approval of this system from the CNPD – Comissão Nacional de Protecção de Dados (Portuguese Data Protection Authority). Novabase delivered an urgent request for this assessment in 2007. Novabase is still waiting for authorization from the Portuguese Data Protection Authority to implement the system. |
| V. Institutional Investors 11. Institutional investors should take into consideration their responsibility to contribute to the diligent, efficient and critical use of the rights conferred on them by the securities they hold or whose management has been entrusted to them, particularly with regard to information and voting rights. |
N/A | N/A |
1.1. Division of Powers between the Company's Boards and Departments in Corporate Decision Making
This report contains detailed information on Novabase's structure and corporate governance model. The adoption of an Anglo-Saxon corporate governance model was approved at the Annual General Meeting of 12 April 2007. In light of amendments to the Company Code under Decree-Law no. 76-A/2006 of 29 March, the Board of Directors submitted a proposal at this Annual General Meeting (which was approved) to change the articles of association so that Novabase could adopt the Anglo-Saxon corporate governance model by institutionalizing the Audit Committee as a board according to the articles of association for supervising company activities, consequently eliminating the Board of Auditors. In this way, the company's new corporate governance model included a Board of Directors, which elects an Executive Committee, an Audit Committee and a statutory auditor.
The powers, operation and composition of the boards according to the articles of association – namely, the Annual General Meeting, Board of Directors, Executive Committee, Audit Committee and Statutory Auditor – are described later in this chapter.
Novabase was organized into three business areas in 2007:
_ Novabase Consulting
Novabase Consulting's corporate governance model includes partners responsible for primary markets and practices.
These markets are as follows:
_Financial Services _Government & Healthcare _Telecommunications & Media
The practices – structures responsible for product and service development and delivery – are as follows:
_ Business & IT Consulting
Novabase Engineering operated with the following practices in 2007:
In 2007, Novabase Digital TV continued to streamline and consolidate its business to create synergies and economies of scale between Germany (affiliate Technotrend) and its TV assets in Portugal.
Novabase Capital is not a business area, but rather a support structure that serves the needs of Novabase business. It combines Novabase's Corporate Venture function with the area of Mergers and Acquisitions, and is able to respond to the needs of the other areas in this dominion. It also manages the Risk Capital Fund called FCR-Novabase Capital/FIC, established in partnership with the IAPMEI -Instituto de Apoio às Pequenas e Médias Empresas Industriais (Institute for the Support of Small and Medium Enterprises) of the Ministry of the Economy.
Novabase SGPS and Novabase Services control the central functional areas: Marketing and Communication, Finance Accounting, Legal, Administration and Logistics, Human Resources and IT. Novabase SGPS directly controls the Investor Relations function.
Each of the aforementioned organizational units corresponds to a company or a group of companies. The attached organization chart includes all the companies within the consolidation perimeter of Novabase SGPS, SA.
The corporate and coordinating boards at Novabase SGPS, S.A. are as follows:
Annual General Meeting: Novabase's highest decision-making board. In 2007, it was presided over by Pedro Rebelo de Sousa.
The Annual General Meeting met once in 2007 (12 April) to examine, discuss and vote on the following matters:
Shareholders owning more than 50% of the share capital attended the meeting and all the items on the agenda were approved by more than 2/3 of the votes.
Rules governing the appointment and substitution of members of the board of directors and the amendment of the Company's Memorandum and Articles of Association
Constitutive and decision-making quorum for the Annual General Meeting
The Annual General Meeting can, whether it meets on first or second notice, decide on the appointment and replacement of members of the board of directors, by a majority of votes cast, no matter what percentage of the share capital is represented there, with abstentions not being counted.
When amendments to the Memorandum and Articles of Association are under consideration, the Annual General Meeting decides by a two-thirds majority of votes cast.
However, should shareholders representing at least half the share capital be present or represented on second notice, the decision on amendments to the memorandum and articles of association can be taken by an absolute majority of votes cast, and a two-thirds majority is not required.
Audit Committee: Comprised of independent members of the Board of Directors appointed by the General Meeting of Shareholders, the Audit Committee is responsible for supervising company management and compliance with the law and articles of association,
and for issuing an opinion on management's annual report and accounts. Its supervisory powers ensure the independence and quality of company audits in accordance with the best international standards. It also ensures the efficacy of the company's internal control system and monitors the company's fulfilment of principles and best practices involving corporate governance.
It held the compulsory number of meetings in 2007 as required by the articles of association and made all examinations of the accounts that it saw fit as part of its duties. It conducted analyses and made suggestions as deemed necessary. It is currently comprised of Luís Fernando de Mira Amaral (Chairman), João Francisco Quadros Saldanha and Manuel Alves Monteiro, all of whom are non-executive voting members, independent from the Board of Directors.
The Report from the Audit Committee is reproduced in its entirety as an annex to this document.
Board of Directors: Responsible for ensuring the general interests of the company, exercising all powers under the law and the articles of association, and performing all actions necessary or appropriate toward the pursuit of its corporate purpose. It worked entirely within its remit and in compliance with the guidelines laid down and approved for this financial year, which are reflected in this report.
The Board of Directors has general powers to act in the pursuit of the Company's corporate and business interests, within the confines of the law, the memorandum and articles of association and the decisions of the General Meeting and, in particular, to:
r) Change the registered office and increase the share capital pursuant to the provisions in the memorandum and articles of association;
s) Undertake projects to merge, demerge and transform Novabase;
Regarding decisions to increase capital, the Board of Directors can, by a two-thirds majority of the votes of its members, increase the share capital one or more times by cash payments, up to a ceiling of twenty-eight million two hundred thousand euros, setting the terms and conditions of each increase of capital and the form and time limits for subscribing.
The following figure illustrates the composition of the Board of Directors elected for the three-year period of 2006-2008, together with the primary responsibilities of its members in 2007.
| Rogério Santos Carapuça | Chairman and CEO |
|---|---|
| José Afonso Oom Ferreira de Sousa | Novabase Capital and Legal Management |
| Pedro Miguel Quinteiro Marques de Carvalho |
CIO and Administrative and Logistics Management |
| Luís Paulo Cardoso Salvado | CFO/CHO and CEO Novabase Consulting |
| João Nuno da Silva Bento | CEO Novabase Digital TV |
| Álvaro José da Silva Ferreira | Novabase Consulting and Novabase Engineering /IT Infrastructures |
| José Carlos de Almeida Pedro de Jesus |
Novabase Engineering/Ticketing |
| João Vasco Tavares da Mota Ranito | Novabase Engineering/Mobility Solutions |
| Manuel Saldanha Fortes Tavares Festas |
IR – Investor Relations |
| Joaquim Sérvulo Rodrigues | Non-executive |
| Luís Fernando de Mira Amaral | Non-executive and independent |
| Manuel Alves Monteiro | Non-executive and independent |
| João Francisco Quadros Saldanha | Non-executive and independent |
The Board of Directors' composition includes three qualified, non-executive independent members, under the terms of Article 1, Item 2 of CMVM Regulation no. 7/2001, namely Luís Fernando de Mira Amaral, Manuel Alves Monteiro and João Francisco Quadros Saldanha.
Luís Paulo Salvado became the CFO in 2007 (replacing José Afonso de Sousa). Novabase thus fulfilled the recommendation of frequent CFO turnover.
Members José Carlos de Almeida Pedro de Jesus and João Vasco Tavares da Mota Ranito resigned from office on 28 September 2007.
Executive Committee: Responsible for the day-to-day running of the company and may perform all actions required to this end, respecting the powers of the Board of Directors with regard to actions which must be submitted for its approval, namely the matters specified in Article 406, Items a) through d), f), l) and m) of the Portuguese Company Code.. The Executive Committee defines the company's organizational structure, appoints employees to perform management duties in the corporate boards of this structure and manages all of the company's operating areas.
Following the approval of the current corporate governance model at the last Annual General Meeting, the Executive Committee was created by the Board of Directors, and is currently comprised of the following members as of 31 December 2007: Rogério Santos Carapuça, José Afonso Oom Ferreira de Sousa, Pedro Miguel Quinteiro Marques de Carvalho, Luís Paulo Cardoso Salvado, João Nuno da Silva Bento, Álvaro José da Silva Ferreira and Manuel Saldanha Fortes Tavares Festas.
Statutory Auditor: The Statutory Auditor is responsible for examining the company's accounts, together with supervisory duties involving the ongoing pursuit of the company's corporate purpose. Its active member is the official auditing firm PricewaterhouseCoopers & Associados, represented by Abdul Nasser Abdul Sattar (acting statutory auditor) and César Abel Rodrigues Gonçalves (substitute statutory auditor).
Remuneration Committee: The board decides upon the remuneration of corporate board members. Its current members for the three-year period of 2006-2008 were decided in the Annual General Meeting of 20 April 2006. Presiding at the Remuneration Committee was Murteira Nabo Pedro Rebelo de Sousa and Fernando Eduardo Ribeiro Marques are also part of this committee. All of its members are thus independent under the terms of Chapter 1, Item 9 of the Annex to CMVM Regulation 7/2001.
Chapter III Point no. 3.3 of this report describes the internal procedures adopted by Novabase for risk control in its business activities.
2007 was marked by gains in the PSI20 Index, which was up 16.0%. Novabase's share price fell 40.2% during the year, compared to a 2.4% drop in the EuroStoxx Technology Index.
Share turnover accounted for 64.2% of Novabase's capital in 2007, with 20.2 million shares traded, similar to the figures for 2006 (turnover of 65.5% of capital, with 20.6 million shares traded).
Novabase left the PSI20 Index at the end of the first half of 2007 due to the entry of new market players with significantly higher liquidity levels.
In comparing Novabase's share price with other similar companies from Europe's IT sector, one can see that the Novabase share's performance in 2007 was lower than that of other companies, with less volatility.
The average Novabase share price weighted by quantity in 2007 was 5.17 euros per share. 20.2 million shares were traded in all 255 stock exchange sessions in 2007, corresponding to a trading value of €103.3 million.
The daily average number of shares traded in 2007 was 79.1 thousand shares, corresponding to a daily average value of about €0.4 million.
The share price on the last day of trading, 31 December 2007, was 3.27 euros, which represents a loss of around 40.5% compared to the 5.50 euros that Novabase shares registered at the end of 2006.
The highest closing price achieved in 2007 was 5.91 euros, while the lowest closing price recorded was 3.27 euros. Market capitalization at the end of 2007 was €102.7 million.
| Summary | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Minimum price (EUR ) | 3.27 | 5.22 | 5.45 | 5.01 | 5.10 | 4.06 |
| Maximum price (EUR ) | 5.91 | 7.27 | 6.96 | 7.80 | 6.26 | 8.45 |
| Average price weighted by quantity (EUR) |
5.17 | 5.91 | 6.16 | 6.13 | 5.81 | 6.32 |
| Number of shares traded (millions) |
20.2 | 20.6 | 8.5 | 5.5 | 4.0 | 7.0 |
| Market capitalization on last day of period (millions of euros) |
102.7 | 172.7 | 182.4 | 178.1 | 166.7 | 163.9 |
Novabase published the following relevant occurrences and results in 2007:
Novabase – Sociedade Gestora de Participações Sociais, S.A. (hereinafter "Novabase") announces the decision to postpone the announced Initial Public Offer ("IPO") of the shares of its subsidiary in the Digital TV area, the Dutch company Techno Trend NV ("TTNV"), in the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange planned for 30 November 2007.
Novabase announces the price range for the IPO of Techno Trend NV.
Novabase announces its decision to participate in the Initial Public Offer ("IPO") of the shares representing the share capital of its subsidiary in the Digital TV area.
Turnover reaches €218.8 million (€183.1 million in 9M06), EBITDA reaches €15.0 million (€13.6 million in 9M06) and Net Profit reaches €5.1 million (€5.0 million in 9M06).
Novabase announces having been notified by Millennium bcp – Gestão de Fundos de Investimento, S.A., BCP Group that the participation of the portfolios it manages in Novabase, SGPS, S.A.'s capital stock increased to 1,297,180 shares following a purchase of 31,474 shares on 5 April 2007.
Novabase announces that it has received the resignations of Mr. José Carlos de Almeida Pedro de Jesus and Mr. João Vasco Tavares da Mota Ranito as members of the Board of Directors and, subsequently, as members of the Executive Committee.
Novabase announces having been notified by Millennium bcp – Gestão de Fundos de Investimento, S.A., BCP Group that the participation of the portfolios it manages in Novabase, SGPS, S.A.'s capital stock increased to 1,154,190 shares.
Novabase announces having been notified by Millennium bcp – Gestão de Fundos de Investimento, S.A., BCP Group that the participation of the portfolios it manages in Novabase, SGPS, S.A.'s capital stock decreased to 1,140,190 shares.
Turnover reaches €151.1 million (€125.4 million in 6M06), EBITDA reaches €10.5 million (€10.0 million in 6M06) and Net Profit reaches €3.9 million (€3.6 million in 6M06). The Consolidated Sales and Services Volume in the 6M07 reached €151.1 million, which represents an increase of 20.4% compared to the €125.4 million in 6M06.
Information published or publicly disclosed in 2006 by Novabase as an issuer of securities admitted to trading in regulated markets.
Turnover reaches €77.2 million (€64.7 million in 2006), EBITDA reaches €6.3 million (€5.1 million in 2006) and Net Profit reaches €2.6 million (€1.4 million in 2006). The Consolidated Sales and Services Volume in the 3M07 reached €77.2 million, which represents an increase of 19.4% compared to the €64.7 million in 3M06.
The Annual General Meeting of Shareholders of Novabase, Sociedade Gestora de Participações Sociais, S.A. (hereinafter: "Novabase") was held this afternoon. All the proposals submitted by the Board of Directors were approved.
Novabase announces having been notified by Millennium bcp – Gestão de Fundos de Investimento, S.A., BCP Group that the participation of the portfolios it manages in Novabase, SGPS, S.A.'s capital stock decreased to 1,276,993 shares.
Novabase provides clarification on the article "Novabase Coveted by Multinationals" published by the newspaper Expresso last Saturday, 31 March.
Novabase announces having been notified by Millennium bcp – Gestão de Fundos de Investimento, S.A., BCP Group that the participation of the portfolios it manages in Novabase, SGPS, S.A.'s capital stock decreased to 1,540,899 shares.
Turnover reaches €261.5 million (€226.4 million in 2005), EBITDA reaches €16.4 million (€17.3 million in 2005) and Net Profit reaches €5.2 million (€5.1 million in 2005).
In 2001, as part of the company's Stock Option Plan described in Point 1.4 of this Annex, Novabase increased its share capital, with cash payments, from 14,100,000 euros to 14,127,982 euros. The increase in capital involved the issue of 55,964 shares with a face value of 0.50 euros each. These shares were subscribed and paid up at a price of 8.50 or 10.40 euros, depending on the take-up price of the options on which the subscription of the shares was based.
In 2002 and 2003, as a result of the performance of the stock markets in general and of the Portuguese stock market in particular, no options were exercised, and thus no increase in share capital was necessary.
In 2004, as part of the company's Stock Option Plan described in Point 1.4 of this Annex, Novabase increased its share capital, with cash payments, from 14,127,982 euros to 14,203,353.50 euros. This increase in capital involved the issue of 150,743 shares with a face value of 0.50 euros each. These shares were subscribed and paid up at a price of 4.96 euros.
In 2005, as part of the company's Stock Option Plan described in Point 1.4 of this Annex, Novabase increased it share capital, with cash payments, from 14,203,353.50 euros to 14,362,882.50 euros. This increase in capital involved the issue of 319,058 shares with a face value of 0.50 euros each. Of these, 314,971 shares were subscribed and paid up at a price of 4.96 euros, and the remaining 4,087 were subscribed and paid up at a price of 5.87 euros.
In 2006, as part of the company's Stock Option Plan described in Point 1.4 of this Annex, Novabase increased its share capital, with cash payments, from 14,362,882.50 euros to 15,700,697.00 euros. This increase in capital involved the issue of 2,675,629 shares with a face value of 0.50 euros each. Of these, 2,634,308 shares were subscribed and paid up at a price of 4.96 euros, 38,755 at a price of 5.87 euros and 2,566 at a price of 6.10 euros each.
In 2007, as a result of the performance of the stock markets in general and of the Portuguese stock market in particular, no increase in share capital was necessary due to the low number of options that were exercised.
All of Novabase's ordinary shares are admitted to trading on the Eurolist of Euronext Lisbon.
Dividends for 2000, 2001 and 2002 – the Board of Directors proposed at the General Meetings of Shareholders on 22 May 2001, 29 April 2002 and 29 April 2003 that the profits made in the financial years of 2000, 2001 and 2002 should continue to be invested in the company to enable it to give priority to structural investments with a decisive impact on the company's growth and profitability. The prospectus of the public offer for the sale and admission to official trading of Novabase's shares on the Lisbon and Oporto Stock Exchanges (today Eurolist of Euronext Lisbon) had already announced the company's intention not to distribute dividends to the shareholders in the three years following its admission to trading. The Annual General Meeting therefore decided unanimously not to distribute dividends to the shareholders for the financial years ending on 31 December of 2000, 2001 and 2002.
Dividends for 2003, 2004, 2005 and 2006 – shareholders present at Annual General Meetings decided not to distribute dividends.
A second Stock Subscription and/or Purchase Option Plan for 2003 to 2005 ("2003-2005 Plan") was passed at the General Meeting of Shareholders of 29 April 2003, as the possibility of offering stock options to employees and members of the Board of Directors of Novabase and other companies in the group under the Stock Option Plan passed in the General Meeting of Shareholders of 22 May 2001 had been exhausted.
While the 1st Plan's admission and performance components corresponded to the years 2000, 2001 and 2002, admission and/or performance options for the years 2003, 2004 and 2005 could be attributed in the 2003-2005 Plan.
In order to approximate the date of positive performance in a given year and its corresponding reward, the 2003-2005 Plan does not involve a one-year waiting period. In this way each option may be immediately exercised without delay in the year following that of performance evaluation. The period for exercising options is three years under the terms of the 2003-2005 Plan's regulation.
The Stock Option Plan for the years 2003 to 2005, like the previous one, includes all employees and members of the Board of Directors of Novabase and other companies in the group (any companies in which Novabase directly or indirectly holds or acquires a majority holding in the share capital, or holds less than 50% of the capital but has management control are considered to be group companies for this purpose). The idea behind the decision to implement this plan was also for Novabase to create employee loyalty by allowing them to share in its success and to align the interests with the shareholders through the incentive to employees provided by their direct investment in the performance of the company's shares. When adopting this employee investment scheme, Novabase also intended to encourage and reward individual performance by offering stock options as one of the components of the plan: the performance component.
In the case of members of Novabase's Board of Directors, it was the Remuneration Committee's responsibility to determine the number of options to be attributed.
The 2003-2005 Stock Option Plan options (which depend on whether they are exercised by buying shares from Novabase or by subscribing new shares in an increase in the company's share capital) are attributed in two types of complementary components making it possible to align it with payment and reward systems:
a) Basic admission component - attributed once only to each employee of the Novabase Group or director of any company in the Novabase Group, equivalent to a percentage of their annual net salary, to be fixed individually.
b) Annual individual performance components - attributed annually in 2004, 2005 and 2006 for performance in 2003, 2004 and 2005, respectively, by setting aside part of the bonus or variable remuneration of the employees or directors of any company in the Novabase Group.
The options attributed in the different components by 31 December of each year can be exercised in three stages. The first can be exercised on 25 May of the year following that in which the first annual performance component is attributed, and the other two on the same day (or on the first subsequent working day) in the following months of May, and in blocks corresponding to 1/3 of the number of options attributed.
The exercise structure of each component is the same and lasts for three years, as shown below:
The two types of component - admission (AC) and performance (PC) - may overlap, as shown below:
The subscription and/or purchase price of the shares in the options attributed in each component under the 2003-2005 Plan is defined before the date of attribution. It should, as a rule, be the arithmetical average of the prices of transactions of Novabase shares at sessions of the Euronext Lisbon market between 1 October and 31 December of the year before that in which the options are attributed, weighted by their volumes and possibly corrected according to the current Stock Option Plan approved at the Annual General Meeting held on 29 April 2003.
The take-up price of options attributed under annual performance components in the 2003-2005 Plan should, as a rule, correspond to the aforementioned arithmetical average of market sessions between 1 October and 31 December of the year before that corresponding to the performance.
The shares corresponding to the options attributed but not yet exercised under the previous Stock Option Plan (referring to 2000 to 2002) and the 2003-2005 Plan should not at any time exceed the maximum accumulated limit of 25%, corresponding to 12.5% per plan, in relation to the total share volume representing Novabase's share capital at that time.
It was the Board of Directors' responsibility to select participants in the Stock Option Plan for the years 2003 to 2005 and for attributing options in the different components, except in the case of Novabase SGPS directors, whose stock option offerings are the responsibility of the Remuneration Committee.
In the case where financial operations may significantly impact Novabase's share value, the number of shares available for options and their acquisition and/or subscription price will be adjusted to compensate for that impact. The commission monitoring the Plan, designated by Novabase's Board of Directors, will propose these corrections.
A third Stock Option Plan for Novabase and group companies' employees and members of the Board of Directors of Novabase was approved in the last Annual General Meeting.
This third Stock Option Plan in place between 2006-2008 is inclusive of the directors of some of the companies in the Novabase Group (any companies in which Novabase directly or indirectly holds or acquires a majority holding in the share capital, or holds less than 50% of the capital but has management control, are considered to be group companies for this purpose) who are primarily dedicated to the management of these companies, as well as those performing duties considered of high relevance in any company in the Novabase Group, based on a fixed term or open-ended employment contract.
In this Stock Option Plan's options (which depend on whether they are exercised by buying shares from Novabase or by subscribing new shares in an increase in the company's share capital) are also attributed under a new component, the Annual Loyalty Component.
Options attributed in this component by 31 December of each year can be exercised in three stages. The first can be exercised on 25 May of the year following that in which the first annual component is attributed, and the other two on the same day (or on the first subsequent working day) in the following months of May, and in blocks corresponding to 1/3 of the number of options attributed.
Each participant may benefit only once from the options under this plan, which will occur, in the case of Novabase directors, in the year following that in which they begin their management duties.
The subscription and/or purchase price of the shares in the options attributed within the Annual Loyalty Component under this third Plan for the years 2006-2008 is defined before the date of attribution. It should, as a rule, be the arithmetical average of the prices, weighted by the respective volumes, of the transactions of Novabase's shares at sessions of the Eurolist of Euronext Lisbon market between 1 October and 31 December of the year previous to that in which the options are attributed, with the necessary adjustment under the terms of the current Plan, approved by the Annual General Meeting on 20 April 2006.
The subscription and/or purchase price of the shares for the first year of implementation of the Plan, corresponding to the 2006 Annual Loyalty Component, taking into account the adjusted arithmetic average of the share prices of the transactions of Novabase's shares at sessions of the Eurolist of Euronext Lisbon market between 1 October and 31 December 2005, under the terms of the Plan, will be 6.46 euros per share.
The shares corresponding to the options attributed but not yet exercised under this third 2006-2008 Stock Option Plan should not at any time exceed 8% of the total volume of shares representing Novabase's share capital at the time, for the three Annual Loyalty Components.
It is the Board of Directors' responsibility to select participants in the Stock Option Plan for the years 2006 to 2008, except in the case of Novabase directors, whose stock option offerings are the responsibility of the Remuneration Committee.
In the case where financial operations may significantly impact Novabase's share value, the number of shares available for options and their acquisition and/or subscription price will be adjusted to compensate for that impact. The commission monitoring the Plan, designated by Novabase's Board of Directors, will propose these corrections.
In 2001 the first phase of the current Stock Option Plan was implemented, and by 25 May 2001, 55,964 subscription options for Novabase shares had been exercised, which corresponded to 47.6% of the options attributed and exercisable on that date. The options were exercised by means of an increase in capital decided upon for the purpose on 1 June 2001. Of the 55,964 shares subscribed, 45,043 were subscribed at €8.50, and the remaining 10,921 at €10.40.
In 2002 and 2003, due to the performance of the capital markets, none of the options provided for in the Stock Option Plan were exercised.
In 2004, 150,743 subscription options for Novabase shares were exercised on 25 May 2004 under the Stock Option Plan and the Stock Subscription and/or Purchase Option Plan, corresponding to 11.9% of the options attributed and exercisable on that date. The options were exercised by means of an increase in capital decided upon for the purpose, whose public recording and corresponding commercial registry occurred on 28 May 2004. These 150,743 shares were subscribed and paid up at the unit price of 4.96 euros.
In 2005, 319,058 subscription options for Novabase shares were exercised on 25 May 2005 under the Stock Option Plan and the Stock Subscription and/or Purchase Option Plan, corresponding to 8.9% of the options attributed and exercisable on that date. The options were exercised by means of an increase in capital decided upon for the purpose, whose public recording and corresponding commercial registry occurred on 1 June 2005. Of the 319,058 shares, 314,971 were subscribed and paid up at the unit price of 4.96 euros, and the remaining 4,087 were subscribed and paid up at the unit price of 5.87 euros.
In 2006, 2,675,629 subscription options for Novabase shares were exercised on 25 May 2006 under the Stock Option Plan and the Stock Subscription and/or Purchase Option Plan, corresponding to 48% of the options attributed and exercisable on that date. The options were exercised by means of an increase in capital decided upon for the purpose, whose public recording and corresponding commercial registry occurred on 01 June 2006. Of the 2,675,629 shares, 2,634,308 were subscribed and paid up at the unit price of 4.96 euros, 38,755 were subscribed and paid up at the unit price of 5.87 euros, and the remaining 2,566 were subscribed and paid up at the unit price of 6.10 euros.
In 2007, 23,169 subscription options for Novabase shares were exercised on 25 May 2007 under the Stock Option Plan and the Stock Subscription and/or Purchase Option Plan, corresponding to less than 1% of the options attributed and exercisable on that date (active options). All 23,169 options were subscribed at the unit price of 4.91 euros (resulting from the adjustment to the unit price of 4.96 euros, as explained later). The Board of Directors elected to sell treasury shares in lieu of an increase in capital in order to exercise attributed options.
| Period | Total Shares Exercised |
Shares | Subscription Price |
Shares | Subscription Price |
|---|---|---|---|---|---|
| 2001 | 55,964 | 45,043 | 8.5 | 10,921 | 10.40 |
| 2004 | 150,743 | 150,743 | 4.96 | ||
| 2005 | 319,058 | 314,971 | 4.96 | 4,087 | 5.87 |
| 2006 | 2,675,629 | 2,634,308 | 4.96 | 38,755 | 5.87 |
| 2006 | 2,566 | 6.10 | |||
| 2007 | 23,169 | 23,169 | 4.91 |
To date, 3,045,281 options, corresponding to an equivalent number of Novabase shares, have been attributed but not exercised under the stock option plans described
Should all attributed options (and exercisable options to be attributed) be exercised on the next vesting date of 25 May 2008, up to 1,989,963 shares may be issued, broken down by the following prices: 990,890 shares at the price of 6.10 euros each (expiring on 25 May 2008) and 999,073 shares at the price of 6.46 euros each (corresponding to 2/3 of the 1,498,610 shares attributed to management, expiring on 25 May 2009) as part of an increase in capital to be ultimately decided on by the Board of Directors to put the Plans into effect.
However, considering the current price of Novabase's shares on the Eurolist of Euronext Lisbon, together with the above take-up prices, we do not expect these options to be exercised.
Note that the above take-up prices will be adjusted according to share capital increases, under the Stock Option Regulations number 9, item d) Adjustment of the Purchase/Subscription Share Price. A formula which adjusted the strike in each plan that was still in place, in accordance with the formula resulting from the share capital increase, was applied.
The formula was:
| • | P0 | = €5.70 | N0 | = 28,725,765 |
|---|---|---|---|---|
| --- | ---- | --------- | ---- | -------------- |
| • | P1 | = €4.96 | N1 | = | 2,634,308 |
|---|---|---|---|---|---|
P3 = €6.10 N3 = 2,566
Final Result
The result for each active strike is detailed below:
| Strike | New Strike |
|---|---|
| 4.96 € | 4.91 € |
| 5.87 € | 5.81 € |
| 6.10 € | 6.03 € |
| 6.46 € | 6.39 € |
These strikes were applied in the stock options exercise on 25 May 2007.
Since 2002 Novabase has had an area dedicated to investor relations at its company website at www.novabase.pt. Investors have access to a number of links containing information of interest to their profile. In terms of financial information, they will have access to Annual Reports and Accounts for previous years, the Financial Calendar, relevant information about the sector supporting the predictability of earnings, reserved information, information on the composition and powers of the company's Corporate Boards, the names and e-mail addresses of the analysts covering the security, the market consensus on three-year sales and EBITDA margins, the market performance of Novabase's shares, Novabase's shareholders, a space reserved for the Annual General Meetings for convening meetings and posting preparatory information for Annual General Meetings and the form for postal votes and electronic voting (available since 2006), a Corporate Governance space in which Novabase publishes this report and the contact details of Novabase's Investor Relations Office.
No other business or transactions of financial significance beyond those described in Chapter V of this report were conducted among any of the involved parties, namely between the company and members of its managing and auditing boards, qualified shareholders, or companies controlled by or part of the Novabase Group.
Novabase provides permanent support to the capital market. The Investor Relations Office is responsible for representing Novabase in its dealings with the CMVM and investors, while promoting contact with private and institutional, foreign and Portuguese investors.
The office provides information on the Novabase website, as mentioned above.
The investor relations office can be contacted as follows:
_ Manuel Tavares Festas Market and Investor Relations Telephone: +351 213 836 300 Fax: +351 213 836 301 E-mail: [email protected] Address: Av. D. João II, Lote 1.03.2.3., Parque das Nações, 1998-031 Lisbon, Portugal
The composition of the Remuneration Committee is described in Point 1.1.2 of Chapter I – Disclosure of Information of this report. None of its members are affiliated in any way, either directly or by kinship, with Novabase management.
The Remuneration Committee prepares an annual activity report, which is attached to this report.
Annual fees paid to auditors are described in Chapter V of this report.
To ensure greater shareholder involvement in the company, particularly through attendance at Novabase's Annual General Meetings, the Board of Directors proposed an amendment to the articles of association, approved in the last Annual General Meeting, in which each share would correspond to one vote. Shareholders' right to information and postal voting were likewise regulated. Therefore, pursuant to the amended terms of Clause 9, Item 5 of Novabase's articles of association, each share corresponds to one vote. Pursuant to the terms of Item 9 of this same clause, regulations were imposed on postal voting.
Shareholders wishing to participate in the Annual General Meeting must prove, up to five days before the meeting, that their shares have been registered in an account as book entry shares. If the shares are jointly owned, only a common representative, or his/her representative, may participate in the Annual General Meetings.
Shareholders with voting rights may, according to Article 22 of the Securities Code, exercise them by post. The invitations to the meetings of the Annual General Meetings contain the rules for postal votes, i.e. the requirement that they must be handed in personally at the company's registered office or sent by registered post and received up to the third working day prior to the Annual General Meeting. The voting form must be signed by the shareholder and should clearly indicate his or her vote on each item on the meeting's agenda. A legible photocopy of the shareholder's identity card must accompany the voting form. If the shareholder is a legal person, the voting form must be signed by one of its representatives and his or her signature should be notarized in that capacity.
Shareholders with voting rights may vote electronically. The rules to be followed for this method of voting can be found in the notices convening the General Meetings.
Novabase provides the postal voting form for the Annual General Meetings at the company's website, www.novabase.pt. These have been available for Annual General Meetings since 2003.
Electronic voting can be done via the company's website (www.novabase.pt). Shareholders with voting rights must register on this site, and must send a letter to Novabase, before the day of the respective Annual General Meeting, drawn up according to the model given on the site. It must be addressed to the Chairman of the Annual General Meeting, and the signature must be duly notarized (or, in the case of private individuals, the signature must be accompanied by a photocopy of the respective identity card), together with the certificate issued pursuant to Article 78, Item 2 of the Portuguese Securities Code, by the financial agents responsible for registering the shares. After the aforementioned letter has been sent, Novabase will send the authorization and electronic voting instructions to the e-mail address provided by the shareholder at the time of registration. Electronic voting may take place in the period stipulated in the notice convening the Annual General Meeting.
The attendance of the shareholder (or an appointed representative of the shareholder) at the Annual General Meeting will result in the revocation of the electronic or postal vote.
Votes exercised either by correspondence or by electronic means shall be considered as negative votes concerning resolution proposals that may be presented after the exercise of such votes.
Novabase has encouraged shareholders to participate and exercise their voting rights at Annual General Meetings, and representation of shareholders at the meetings has been duly provided for and regulated in the company's articles of association. Shareholders can be represented at Annual General Meetings by their spouses, parents or offspring, by another shareholder or by a member of the Board of Directors. Shareholders requiring representation may send a letter addressed to the chairperson of the Annual General Meeting at least three days before the date set for the AGM.
A special page devoted to Annual General Meetings has been created at the site www.novabase.pt, where Novabase will post the invitation and preparatory information for the next Annual General Meeting, in an effort to encourage postal, electronic and proxy votes.
Novabase undertakes to guarantee the confidentiality of the information provided by customers or third parties involved in each project, and will not make them available to any other entities, unless expressly authorized to do so by the customer.
Novabase also undertakes, at the end of each project, to remove and destroy any and all records of the data analysed that are not needed for subsequent projects and that the customer considers confidential.
Without prejudice to the above, the standardization and identification processes defined during the project can be used in any project extensions to it in the future. The information to be saved consists of reference and parameter files for the tools used and there is no need to save any data contained in the databases processed.
The existence of independent directors on the Board of Directors is a means of overseeing this board, together with other aspects of management and the company in general.
These independent directors make up the Audit Committee, which operates within the Board of Directors and has the following duties:
n) To prepare reports, define policies and guidelines, create recommendations, implement procedures and execute the necessary measures to fulfil the provisions of these Regulations, national legal and regulatory provisions, recommendations issued by the Portuguese Securities Market Commission (CMVM), and standards which may be imposed under legislation passed by competent authorities of the European Union concerning the powers and responsibilities of the Audit Committee as part of the corporate governance principles adopted by Novabase.
Novabase has an internal audit team whose job is to conduct audits of the financial departments of Novabase's affiliates. The Audit Committee employs this team's services whenever necessary. Although it focuses on large customers, Novabase can conduct an internal customer credit analysis whenever a project manager requests one.
The Audit Committee, referred to in the previous point, will also have powers involving the assessment of sufficient internal control mechanisms to understand and manage the inherent risks of Novabase's activities, suggesting policies and procedures to the Board of Directors to achieve these goals and refine these mechanisms.
Where project risk management is concerned, Novabase has a project qualification methodology which analyzes various specific parameters. Once the risk of the project has been ascertained, it is assigned to a project manager with the appropriate seniority. A number of qualifying training courses for project managers have been pursued in recent years. A system of ceilings is in place, by which authorization of proposals must be validated by a supervisor and the maximum ceiling requires authorization by the Board itself. There is a procedure for centrally validating, sending and filing proposals, which is revised by Novabase's legal department at the contract level. This department must issue its opinion before a proposal can be sent to a customer.
As Novabase's business is information technology, it runs the risk of (i) the solutions it develops becoming obsolete relatively fast, (ii) the proposed solutions proving not to be suitable and (iii) the timing of the development and proposal of new solutions not being right for the market. With these risks in mind, Novabase has set up an offer management unit, which analyses the industry in order to detect current trends and promote the development of internal skills to address these trends. Directors of each business division focus especially on the technology area, maintaining a privileged ongoing relationship with independent analysts of the information technology market.
There are no statutory limits to voting rights and there are no shares with special rights.
On 20 April 2006 the following Novabase shareholders signed a shareholders' agreement according to the following table, which shows the individual positions on this date:
| Shareholders | No. Shares | % capital |
|---|---|---|
| José Afonso Oom Ferreira de Sousa | 2.498.697 | 8,70% |
| Pedro Miguel Quinteiro Marques de Carvalho | 2.498.697 | 8,70% |
| Rogério dos Santos Carapuça | 1.873.113 | 6,52% |
| Luís Paulo Cardoso Salvado | 1.783.543 | 6,21% |
| João Nuno da Silva Bento | 1.783.543 | 6,21% |
| Álvaro José da Silva Ferreira | 804.866 | 2,80% |
| João Vasco Tavares da Mota Ranito | 492.628 | 1,71% |
| José Carlos de Almeida Pedro de Jesus | 366.592 | 1,28% |
| Manuel Saldanha Fortes Tavares Festas | 74.946 | 0,26% |
| Total | 12.176.665 | 42,39% |
The following contents of this shareholders' agreement are noteworthy:
The Shareholders' Agreement will remain in force for a three-year period as of its signature. However, any Signatory who resigns or is dismissed with or without just cause from his management duties at Novabase while the Shareholders' Agreement is in force may opt to terminate his participation in the agreement.
Apart from this shareholders' agreement, Novabase has no knowledge of the existence of any other shareholders' agreements regarding its share capital.
Novabase's Board of Directors currently consists of thirteen members. As explained earlier, two of its members resigned on 28 September 2007 and their corresponding positions have remained vacant. Under the terms of Article 14 of the articles of association, the Board of Directors may delegate specific management powers to a particular director. These powers must be recorded in the minutes. It may also delegate the everyday running of the company to an executive committee consisting of five directors.
Following the approval of the new corporate governance model at the 2006 Annual General Meeting, the Board of Directors established an Executive Committee, initially comprised of nine members of the Board of Directors, the composition and duties of which are described in Point 1.1.2 of Chapter 1 of this report. It was subsequently reduced to seven members following the resignation of the two members, as described in this same Point.
In the decision to set up an Executive Committee at Novabase, limits were established on what could be delegated to this Committee. The following matters, specified in Article 407 Item 4 of the Portuguese Company Code, have been excluded:
The members of the Board of Directors were elected unanimously by the shareholders at the time of their election in the Annual General Meeting of 20 April 2006. The board is comprised of the members specified in Chapter I, Point 1.1.2 of this report.
Taking into consideration the independence criteria defined by CMVM Regulation 7/2001, as amended by CMVM Regulation 11/2003, CMVM Regulation 10/2005 and CMVM Regulation 3/2006, and the corporate boards appointed at the last Annual General Meeting, the Board of Directors is currently comprised of three directors who fulfil these independence criteria. In this way, Novabase complies with the CMVM recommendation on this matter.
The chart below details the composition of the Board of Directors on 31 December 2007, including a breakdown of executive versus non-executive and independent versus nonindependent members.
| Director | Category |
|---|---|
| Rogério Santos Carapuça | Executive and non-independent |
| José Afonso Sousa | Executive and non-independent |
| Pedro Marques de Carvalho | Executive and non-independent |
| Luís Paulo Salvado | Executive and non-independent |
| João Nuno Bento | Executive and non-independent |
| Álvaro Silva Ferreira | Executive and non-independent |
| Manuel Saldanha Fortes Tavares Festas | Executive and non-independent |
| Joaquim Sérvulo Rodrigues | Non-executive and non-independent |
| Luís Fernando de Mira Amaral | Non-executive and independent |
| Manuel Alves Monteiro | Non-executive and independent |
| João Francisco Quadros Saldanha | Non-executive and independent |
In addition to their management of Novabase SGPS, SA, the members of the Board of Directors who also manage other companies in the Novabase Group are as follows:
| Director | Companies in the Novabase Group |
|---|---|
| Rogério Santos Carapuça | • Novabase Serviços, S.A. • Novabase Consulting, S.A. • OctalTV, S.A. |
| José Afonso Sousa | • Novabase Capital SGCR, S.A. • Novabase Serviços, S.A. • Octal, S.A. |
| Pedro Marques de Carvalho | • Novabase Serviços, S.A. • Novabase Consulting, S.A. |
| Luís Paulo Salvado | • Novabase Consulting SGPS, S.A. • NBO, S.A. • Novabase Serviços, S.A. • Novabase Enterprise Applications, S.A. • Novabase Consulting, S.A. • Novabase Advanced Custom Development, S.A. • Mentorit, S.A. • Collab, S.A. • Novabase Consulting S.A. (Espanha) • Octal, S.A. • Octal2Mobile, S.A. • Novabase IIS, S.A. • Novabase Infraestruturas, SGPS, S.A. |
| João Nuno Bento | • Novabase Consulting, SGPS, S.A. • Novabase Business Intelligence, S.A. • Celfocus, S.A. • Novabase Enterprise Applications, S.A. • Novabase Consulting, S.A. • MentorIt, S.A. • Collab, S.A. |
| • Novabase Interactive TV, SGPS S.A. • OctalTV, S.A. • ONTV, S.A. • Novabase Consulting, S.A. (Espanha) • Octal, S.A. • Octal2Mobile, S.A • Gedotecome Informática, Lda • Novabase Capital SGCR, S.A. |
|
|---|---|
| Álvaro Silva Ferreira | • Novabase Business Intelligence, S.A. • Novabase Consulting, SGPS, S.A. • NBO, S.A. • Novabase Enterprise Applications, S.A. • Novabase Consulting, S.A. • MentorIt, S.A. • Collab, S.A. • Novabase Consulting, S.A. (Espanha) • Novabase IIS, S.A. • Novabase Infraestruturas, SGPS, S.A. |
| Manuel Tavares Festas | • Novabase Serviços, SA |
The current members of Novabase's Board of Directors have the following qualifications and professional experience:
| Director | Professional Qualifications | Professional Experience in the last 5 years |
|---|---|---|
| Rogério dos Santos Carapuça |
• Ph.D in Electrotechnical and Computer Engineering from IST • M.Sc. in Electrotechnical and Computer Engineering from IST • Graduate in Electrotechnical Engineering from IST |
• Chairman of Novabase Board of Directors since 1999 • Director of various Novabase Group companies |
| José Afonso Oom Ferreira de Sousa |
• MBA from Universidade Nova de Lisboa • M.Sc. in Electrotechnical Engineering from IST • Graduate in Electrotechnical Engineering from IST |
• CFO of Novabase Group since 1999 • Director of various Novabase Group companies |
| Pedro Miguel Q. Marques de Carvalho |
• Graduate in Applied Mathematics from Universidade Nova de Lisboa |
• CIO of Novabase Group since 1999 • Director of various Novabase Group companies |
| Luís Paulo Cardoso Salvado |
• MBA in Information Management from Universidade Católica Portuguesa • Graduate in Electrotechnical Engineering from IST |
• CFO of Novabase Group since April 2007 • CHO • CEO of Consulting Division • Director of various Novabase Group companies |
| João Nuno da Silva Bento |
• MBA in Information Management from Universidade Católica |
• CEO of Novabase Digital TV |
| Portuguesa • Graduate in Electrotechnical |
• Director of various Novabase Group |
|
|---|---|---|
| Engineering from IST | companies | |
| Álvaro José da Silva Ferreira |
• MBA from Universidade Nova de Lisboa • Graduate in Informatics Engineering from Universidade Nova de Lisboa |
• Director of various Novabase Group companies |
| Manuel Saldanha Fortes Tavares Festas |
• Postgraduate Diploma in Financial Assets and Markets from ISCTE • Graduate in Management from Universidade Católica Portuguesa |
• Novabase Investor Relations • Director of Novabase Serviços and Novabase |
| Joaquim Sérvulo Rodrigues |
• MBA from INSEAD • M.Sc. in Electrotechnical Engineering from IST • Graduate in Electrotechnical Engineering from IST |
Capital • Chairman of the executive committee of the board of directors of Es Tech Ventures, SGPS, SA |
| Luís Fernando de Mira Amaral |
• Postgraduate Diploma in Management (Stanford Executive Program) from Stanford University • M.Sc. in Economics from Universidade Nova de Lisboa • Graduate in Electronical Engineering from IST |
• CEO and Vice President of Caixa Geral de Depósitos • Director of Sociedade Portuguesa de Inovação, SA • President of the Portuguese Competitiveness Forum • Member of the Board of Directors of BPI • President of IGFSS |
| Manuel Alves Monteiro | • Graduate in Law, member of the Portuguese Bar Association (Ordem dos Advogados) |
• Non-executive director of AICEP, CIN-SGPS, and of Douro Azul SGPS • Member of the General and Supervisory Board of EDP and Member of the Consulting Board of BPP, FEUP and FGEUC • Member of the Coordinating Council of SEDES |
| João Francisco Quadros Saldanha |
• MBA from Universidade Nova de Lisboa • Graduate in Mining Engineering from IST |
• Director of Bascol – SGPS, S.A. and Inapal Plásticos, S.A. • Director of ICEP and IAPMEI • Director of Empordef – SGPS, S.A., of OGMA S.A., of SPEL, of INDEP and IDD |
The number of shares representing the share capital of Novabase held by each member of the Board of Directors is detailed at the beginning of this report.
Members of the Board of Directors received information concerning all matters handled and decisions made by the Executive Committee, which holds meetings on a more frequent basis.
Since 2003 Novabase has fulfilled the CMVM recommendation of publishing individualized information on remuneration of members of the Board of Directors. In this report, Novabase fully discloses remuneration received in 2007 by each board member.
By unanimous decision of the Remuneration Committee, fixed remuneration components for members of the Novabase SGPS Board of Directors in 2007 are shown in the chart below.
Equally by unanimous decision of the Remuneration Committee on 19 September 2006, the directors who are primarily dedicated to the management of companies in the Novabase Group shall have a variable remuneration consisting of (i) a sum to be paid in cash, to be defined annually by the Remuneration Committee, according to the performance and the results of Novabase SGPS each year and the contribution of each director to these results; and (ii) a set of options attributed within the admission component to the Stock Subscription and/or Purchase Option Plan for the years 2006 to 2008 in force within the Novabase Group.
The first part of the directors' variable remuneration is therefore aligned with the company's annual performance, while the second is aligned with the stock performance of the Novabase share. In 2007, the first parcel of the variable remuneration was 780,002 euros (seven hundred and eighty thousand and two euros), to be paid as detailed in the chart below.
As this attributed option price has been defined based on the average price of the last three months of 2005, this is a reference share value at the beginning of the 2006-2008 term of office. Therefore, these shares will value accordingly to the Novabase share during this term, which will correspond to the best interests of all other shareholders. In this way, the interests between the company's directors and shareholders have been properly aligned.
In the Remuneration Committee meeting of 19 September 2006, it was thus resolved to offer 1,959,720 options (following the resignation of two members, the total number of active options on 31 December 2007 decreased to 1,498,610) under the basic admission component of the 2006-2008 Stock Subscription and/or Purchase Option Plan in force at the Novabase Group, to be distributed among the seven executive directors according to the following chart.
| Director | Fixed Annual Remuneration 2007 (€) |
Variable Annual Remuneration 2007 (€) |
Total 2007 (€) |
Options Attributed @6.46 (€) 2006-2008 |
|---|---|---|---|---|
| Rogério dos Santos Carapuça | 223,870.50 | 91,765.00 | 315,635.50 | 230,555 |
| Pedro Miguel Q. Marques de Carvalho | 180,610.50 | 91,765.00 | 272,375.50 | 230,555 |
| José Afonso Oom Ferreira de Sousa | 210,350.00 | 91,765.00 | 302,115.00 | 230,555 |
| Luís Paulo Cardoso Salvado (2) | 216,660.50 | 91,765.00 | 308,425.50 | 230,555 |
| João Nuno da Silva Bento | 180,610.50 | 91,765.00 | 272,375.50 | 230,555 |
| Álvaro José da Silva Ferreira | 180,610.50 | 91,765.00 | 272,375.50 | 230,555 |
| João Vasco Tavares da Mota Ranito (1) | 129,007.50 | 91,765.00 | 220,772.50 | |
| José Carlos Almeida Pedro de Jesus (1) | 129,007.50 | 91,765.00 | 220,772.50 | |
| Manuel Saldanha F. Tavares Festas | 73,902.50 | 45,882.00 | 119,784.50 | 115,280 |
| Luís Fernando de Mira Amaral | 36,050.00 | 36,050.00 | ||
| Manuel Alves Monteiro | 36,050.00 | 36,050.00 | ||
| João Francisco Quadros Saldanha | 36,050.00 | 36,050.00 | ||
| Total | 1,632,780.00 | 780,002.00 | 2,412,782.0 0 |
1,498,610 |
Page 38 of 40
(1) Members whose term ended on 28 September 2007
(2) Due to a processing error, only the amount of 206,360.50 euros in gross fixed salary was paid to this director in 2007, with the remaining 10,300.00 euros paid in 2008
Novabase SGPS directors are paid exclusively by this entity and do not receive additional remuneration of any kind from other Novabase Group companies.
In the wake of its compliance with CMVM Recommendations on the corporate governance of listed companies, the Novabase Board of Directors views the adoption of a policy for reporting irregularities as good practice for the company, since it will foster a culture of responsibility and diligence.
Novabase's Board of Directors has therefore approved a system for communicating irregularities, responsible for receiving all information involving potential irregular employee practices. Such information is subsequently routed to the Audit Committee, which is then responsible for making decisions concerning procedures to be adopted, and for reporting these decisions to the CEO and the CFO.
In 2006, Novabase requested authorization from the CNPD – Comissão Nacional de Protecção de Dados (Portuguese Data Protection Authority) to implement this system. To date, it is yet to receive a response, despite urgent requests submitted in 2007.
Novabase thus complies with the provisions of the Company Code and CMVM Recommendations.
The annual amount paid for legal account review and auditing services to the auditors PriceWaterhouseCoopers, by Novabase and/or by its affiliates, rose to approximately 462,000 euros in 2007, compared to 224,000 euros in 2006. This increase is primarily attributable to the additional auditing of TTNV in 2007.
| Service | 2006 (€) | 2007 (€) |
|---|---|---|
| Legal account review and auditing |
224,000 | 462,000 |
| Consulting services | 0 | 12,000 |
In 2006, the value of the products and services provided to the BES Group by Novabase rose to €16.7 million (roughly 6.4% of annual turnover) compared to €16.4 million in 2007 (roughly 5.2% of annual turnover).
There were no other business operations with key shareholders.
Av. D. João II, Lote 1.03.2.3. Parque das Nações 1998–031 Lisbon. Portugal Tel. +351 213 836 300 . Fax +351 213 836 301 www.novabase.pt
The Novabase Annual General Meeting held on 20 April 2006 approved a new corporate governance model, which is based essentially on the existence of nonexecutive directors and on the creation, within the composition of the Board of Directors, of an Executive Committee and an Audit and Internal Control Committee comprised entirely of independent directors.
Also in 2007, in line with recent developments in corporate governance, Novabase adopted an "Anglo-Saxon" corporate governance model at the Annual General Meeting of 12 April, by which the articles of association established an Audit Committee as a supervisory body for the company.
Appointed at the Novabase Annual General Meeting of 12 April 2007, the members of the current Audit Committee are also members of the group's Board of Directors, maintaining their articles of independence as set forth in the applicable legislation.
The composition of the current Audit Committee has remained unchanged compared to the former "Audit and Internal Control Committee". Its composition is as follows:
Luis Mira Amaral (Chairman)
João Quadros Saldanha (Member)
Manuel Alves Monteiro (Member)
The new responsibilities delegated by the Annual General Meeting to the current Audit Committee, as Novabase's supervisory body, include the following supervisory powers, in addition to those set forth in their internal regulations:
This report thus includes the activities carried out in 2007 by the Audit Committee, whether in its current form or as Novabase's former Audit and Internal Control Committee.
In fulfillment of its most recent assigned duties as the company's supervisory body, the Audit Committee carried out activities over the year that focused on ensuring that the financial information was audited by external auditors with sufficient quality standards and independence, in strict compliance with the most sound international principles and standards, and ensuring the appropriate functioning of the company's internal control system.
During 2007, this corporate governance body held a total of five formal meetings and several informal meetings.
In addition to these meetings, regular meetings were also held between the Committee and the company's CFO, thus improving the communication channel established previously between the Committee and the corporate finance executive, to discuss all matters considered relevant by the Committee in performing its duties.
The Committee also set up several meetings with external auditors regarding auditing work and internal control issues, as well as meetings with the executives responsible for different operational areas in the company.
It is important to mention that the Committee has made it a common practice to keep the Board of Directors abreast of all of its activities, whether to analyse and approve the annual, half-yearly and quarterly accounts or at other times and regarding other matters.
To fulfill the Committee's objectives, within the scope of its duties, it is important to mention the following tasks undertaken by the members of the Committee as described above for 2007:
General evaluation of the operational efficiency of internal auditing, analysing the auditing standards, resources, performance, technical competence and performance measures;
Approval of an annual schedule of tasks to be undertaken by the Audit Committee, identifying the main areas to be covered, their position in time and respective frequency;
The modern forms of corporate governance, currently at the implementation stage in Portugal and, therefore, at Novabase itself, dictate that everyone must make a greater effort in providing managing and supervisory bodies with the appropriate contextual framework, procedures and knowledge so that companies can pursue their work with accuracy and transparency, creating shareholder value in a sustained and responsible manner.
In this sense, the Novabase Audit Committee is aware that there is a path of constant improvement in the perception of its mission and working methods, so that its functions contribute, likewise, to enabling the company to do its job with respect for the soundest principles of business ethics and rigor in the production and publication of financial information. In this light, following the path that will enable us, gradually, to provide Novabase with an ever broader and more comprehensive action plan for its Audit Committee, the Committee aims to base its activities on the annual activity schedule mentioned above, covering the issues identified there and confident that, by so doing, it can carry out the missions entrusted to it in a highly positive manner.
With a view to improving the framework in which it acts, the Audit Committee plans to develop a more robust system for evaluating the work of external auditors, whether regarding their technical skills, the quality of their contributions in the areas in which they are expected to intervene and, naturally, their level of independence and professional rigor. Together with this evaluation system, the Committee intends to implement an advisory framework to forestall non-audit service situations, issues that are on the list of concerns for the authorities and regulators, and which Novabase and its Audit Committee will take full interest in handling appropriately.
To this end, as has been done until now, the Audit Committee receives the diligent collaboration of everyone who works at the company, together with external auditors, the statutory auditor and the Executive Committee. Along these lines, the Committee thanks everyone for their support and contributions throughout 2007.
The Audit Committee
Luís Mira Amaral (Chairman)
João Saldanha
Manuel Alves Monteiro
Lisbon, 13 March 2008
The Novabase SGPS Remuneration Committee held one meeting in 2007, on 24 July. The Committee is comprised of Dr. Francisco Murteira Nabo (Chairman) and members Dr. Pedro Rebelo de Sousa and Prof. Fernando Ribeiro Marques.
In this meeting, attended by all members of the Committee, the remuneration of the company's corporate board members for 2007 and the cash component of the performance bonus for executive directors were established.
These remuneration amounts were set based on the limits imposed by the decision of the General Meeting of 20 April 2006 involving general guidelines for the remuneration of the members of Novabase SGPS' various corporate boards.
The following was decided for the year 2007:
The Chairman of the General Meeting will be remunerated according to attendance at each General Meeting. The attendance amount will equal one thousand euros. The Secretary of the General Meeting will also be remunerated according to attendance, in the amount of seven hundred and fifty euros.
The following was decided for members of the Board of Directors:
a) Independent Directors will each be remunerated with a gross fixed annual amount of €36,050 (thirty six thousand and fifty) euros. This amount will be paid in 14 equal monthly sums. These directors are Luis Fernando Mira Amaral, Manuel Alves Monteiro and João Quadros Saldanha.
b) The non-executive Director, representing a key shareholder, Joaquim Manuel Jordão Sérvulo Rodrigues, will not receive any remuneration.
c) The decision was made to maintain the general structure of executive directors' remuneration, with a fixed component and a variable component. This structure had been previously established by earlier decisions of the Remuneration Committee and reaffirmed by the general guidelines of the General Meeting of 20 April 2006.
2) The Executive Committee member and CFO, Luis Paulo Cardoso Salvado, will receive gross fixed annual remuneration of €216,660.50 (two hundred and sixteen thousand, six hundred and sixty euros and fifty cents) to be paid in 14 equal monthly sums;
3) The Executive Committee member, José Afonso de Sousa, will maintain a gross fixed annual remuneration of €210,350 (two hundred and ten thousand, three hundred and fifty euros) to be paid in 14 equal monthly sums;
The Remuneration Committee made no further decisions in 2007.
Lisbon, 23 March 2008
The Remuneration Committee
ACCOUNTS 2007
Consolidated Financial Statements for the period of 31 December 2007 year ended
(Page left intentionally blank)
| I. | CONSOLIDATED FINANCIAL STATEMENTS for the Year Ended 31 December 2007 | 5 | |
|---|---|---|---|
| ● | Consolidated Balance Sheet as at 31 December 2007 | 6 | |
| ● | Consolidated Income Statement for the year ended 31 December 2007 | 7 | |
| ● | Consolidated Cash Flow Statement for the year ended 31 December 2007 | 8 | |
| ● | Consolidated Statement of Changes in Equity for the year ended 31 December 2007 | 9 | |
| ● | Notes to the Consolidated Financial Statements for the year ended 31 December 2007 | 10 | |
| Note 1. | General Information | 10 | |
| Note 2. | Accounting Policies | 10 | |
| Note 3. | Financial risk management | 17 | |
| Note 4. | Critical accounting estimates and judgements | 20 | |
| Note 5. | Segment information | 22 | |
| Note 6. | Companies included in consolidation | 24 | |
| Note 7. | Property plant and equipment | 25 | |
| Note 8. | Intangible assets | 26 | |
| Note 9. | Investments in associates | 28 | |
| Note 10. | Deferred income tax assets and liabilities | 28 | |
| Note 11. | Inventories | 29 | |
| Note 12. | Financial instruments by category | 30 | |
| Note 13. | Trade and other receivables | 30 | |
| Note 14. | Accrued income | 31 | |
| Note 15. | Other current assets | 31 | |
| Note 16. | Available-for-sale financial assets | 32 | |
| Note 17. | Cash and cash equivalents | 32 | |
| Note 18. | Non-current assets classified as held for sale | 32 | |
| Note 19. | Share capital, share premium, treasury shares and share options | 33 | |
| Note 20. | Reserves and retained earnings | 34 | |
| Note 21. | Minority interest | 34 | |
| Note 22. | Borrowings | 35 | |
| Note 23. | Retirement benefit obligations | 36 | |
| Note 24. | Provisions | 37 37 |
|
| Note 25. Note 26. |
Trade and other payables Deferred income and other current liabilities |
37 | |
| Note 27. | External supplies and services | 38 | |
| Note 28. | Employee benefit expense | 38 | |
| Note 29. | Other losses - net | 39 | |
| Note 30. | Depreciation and amortisation | 39 | |
| Note 31. | Finance income | 40 | |
| Note 32. | Finance costs | 40 | |
| Note 33. | Share of losses of associates | 40 | |
| Note 34. | Income tax expense | 40 | |
| Note 35. | Earnings per share | 41 | |
| Note 36. | Commitments | 42 | |
| Note 37. | Related-party transactions | 43 | |
| Note 38. | Other Information | 44 | |
| Note 39. | Subsequent events | 45 | |
| II. | INFORMATION ● ● Statutory Auditors report |
SUPERVISORY BOARD AND AUDITORS REPORT IN RESPECT OF THE CONSOLIDATED FINANCIAL Report and Opinion of the Audit Committee on the consolidated financial statements |
47 49 51 |
| III. ● |
MEMBERS | SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY THE BOARD Detail of securities issued by the company and other group companies, held by board members as at 31 December 2007 |
53 55 |
(Page left intentionally blank)
for the Year Ended 31 December 2007
| (Amounts expressed in thousands of Euros) | ||||
|---|---|---|---|---|
| Note | 31.12.07 | 31.12.06 | ||
| Assets | ||||
| Non current assets | ||||
| Property plant and equipment | 7 | 8 447 | 6 091 | |
| Intangible assets | 8 | 34 737 | 36 959 | |
| Investments in associates | 9 | 4 925 | 3 623 | |
| Deferred income tax assets | 10 | 11 111 | 9 829 | |
| Total Non current assets | 59 220 | 56 502 | ||
| Current assets | ||||
| Inventories | 11 | 20 864 | 23 611 | |
| Trade and other receivables | 13 | 120 155 | 92 158 | |
| Income tax receivable | 1 486 | 1 268 | ||
| Accrued income | 14 | 14 357 | 14 799 | |
| Other current assets | 15 | 3 180 | 3 221 | |
| Available-for-sale financial assets | 16 | - | 839 | |
| Cash and cash equivalents | 17 | 38 335 | 39 563 | |
| Total Current assets | 198 377 | 175 459 | ||
| Total assets | 257 597 | 231 961 | ||
| Equity | ||||
| Share capital | 19 | 15 701 | 15 701 | |
| Treasury shares | 19 | (249) | (260) | |
| Share premium | 19 | 49 213 | 49 213 | |
| Reserves and retained earnings | 20 | 29 199 | 24 890 | |
| Profit for the year attributable to equity holders | 6 997 | 5 169 | ||
| Total Equity attributable to the company's equity | ||||
| holders | 100 861 | 94 713 | ||
| Minority interest | 21 | 13 641 | 11 211 | |
| Total equity | 114 502 | 105 924 | ||
| Liabilities | ||||
| Non current liabilities | ||||
| Borrowings | 22 | 5 762 | 9 182 | |
| Provisions | 24 | 1 662 | 1 072 | |
| Deferred income tax liabilities Total Non current liabilities |
10 | 392 7 816 |
157 10 411 |
|
| Current liabilities | ||||
| Borrowings | 22 | 12 692 | 16 671 | |
| Trade and other payables | 25 | 105 409 | 83 490 | |
| Income tax payable | 131 | 41 | ||
| Deferred income and other current liabilities | 26 | 17 047 | 15 424 | |
| Total Current liabilities | 135 279 | 115 626 | ||
| Total liabilities | 143 095 | 126 037 | ||
| Total equity and liabilities | 257 597 | 231 961 |
The Acountant The Board of Directors
The accompanying notes are an integral part of these consolidated financial statements
| (Amounts expressed in thousands of Euros) | ||||
|---|---|---|---|---|
| 12 M * | 12 M * | |||
| Note | 31.12.07 | 31.12.06 | ||
| Continuing Operations | ||||
| Sales | 5 | 204 030 | 154 780 | |
| Services rendered | 5 | 109 167 | 106 723 | |
| Cost of goods sold | (178 223) | (133 778) | ||
| External supplies and services | 27 | (49 586) | (55 741) | |
| Employee benefit expense | 28 | (64 018) | (54 916) | |
| Other losses - net | 29 | (1 348) | (2 893) | |
| Depreciation and amortisation | 30 | ( 6 164) | ( 5 570) | |
| Operating profit | 13 858 | 8 605 | ||
| Finance income | 31 | 3 745 | 1 930 | |
| Finance costs | 32 | (7 228) | (4 616) | |
| Share of losses of associates | 33 | (25) | (397) | |
| Profit before income tax | 10 350 | 5 522 | ||
| Income tax expense | 34 | (59) | (78) | |
| Profit for the year from continuing operations | 10 291 | 5 444 | ||
| Discontinued operations | ||||
| Profit for the year from discontinued operations | 18 | - | 68 | |
| Profit for the year | 10 291 | 5 512 | ||
| Attributable to: | ||||
| Equity holders of the Company | 6 997 | 5 169 | ||
| Minority interest | 21 | 3 294 | 343 | |
| 10 291 | 5 512 | |||
| Earnings per share for profit from continuing operations | ||||
| attributable to the equity holders of the Company | 35 | 0.23 euros | 0.17 euros | |
| during the year (expressed in EUR per share) - basic and diluted | ||||
| Earnings per share for profit from discontinued operations | ||||
| attributable to the equity holders of the Company | 35 | Zero euros | Zero euros | |
| during the year (expressed in EUR per share) - basic and diluted |
12 M * - period of 12 months ended
The Acountant The Board of Directors
The accompanying notes are an integral part of these consolidated financial statements
| 12 M 12 M Note 31.12.07 31.12.06 Cash flows from operating activities Cash receipts from customers 286 683 Cash paid to suppliers and employees (269 862) (260 600) 16 821 Cash Generated/(Used) from Operations Income taxes paid (954) Other operating proceeds 2 264 1 310 18 131 Net Cash generated / (used) in operating activities Cash flows from investing activities Receipts: Sale of subsidiary, net of cash acquired - Sale of Available-for-sale financial assets 875 Interest received 1 137 2 012 Payments: Acquisition of subsidiary (2 619) Purchases of Property plant and equipment (4 958) Purchases of Intangible assets (1 262) (8 839) (6 827) Net Cash used in investing activities Cash flows from financing activities Receipts: Proceeds from borrowings 22 8 526 Proceeds from issuance of ordinary shares 19 e 29 1 700 Proceeds from sale of treasury shares 19 110 10 336 Payments: Repayments of borrowings 21 (16 938) Issuance ordinary shares costs of subsidiary 20 (775) Interests and similar costs (3 801) |
(Amounts expressed in thousands of Euros) | |||
|---|---|---|---|---|
| 250 476 | ||||
| (10 124) | ||||
| (1 800) | ||||
| 21 | ||||
| (1 779) | ||||
| (11 903) | ||||
| 1 432 | ||||
| - 484 |
||||
| 1 916 | ||||
| (909) | ||||
| (927) | ||||
| (2 476) | ||||
| (4 312) | ||||
| (2 396) | ||||
| 10 248 | ||||
| 13 299 | ||||
| 882 | ||||
| 24 429 | ||||
| (4 494) | ||||
| - (2 262) |
||||
| Purchase of treasury shares 19 - |
(3 855) | |||
| (21 514) | (10 611) | |||
| (11 178) Net Cash (used) / generated from financing activities |
13 818 | |||
| Cash and bank overdrafts - net increase / (decrease) 126 |
(481) | |||
| Cash and bank overdrafts at the beginning of the year 31 152 |
31 633 | |||
| Cash and bank overdrafts at the end of the year 31 278 |
31 152 |
12 M * - period of 12 months ended
The accompanying notes are an integral part of these consolidated financial statements
(Amounts expressed in thousands of Euros)
| Attributable to equity holders of the Company | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Note | Share Capital |
Share premium |
Treasury shares |
reserves | Fair value Legal () adjust. () and other reserves reserves (*) |
Stock Options |
Retained earnings |
Minority Interest |
Total Equity |
|
| Balance at January 1, 2006 | 14 363 | 37 252 | (14) | 1 254 | 147 | - | 25 615 | 12 018 | 90 635 | |
| Fair value gains | - | - | - | - | 82 | - | - | - | 82 | |
| Net income recognised directly in equity |
- | - | - | - | 82 | - | - | - | 82 | |
| Profit for the year | - | - | - | - | - | - | 5 169 | 343 | 5 512 | |
| Total recognised income | - | - | - | - | 82 | - | 5 169 | 343 | 5 594 | |
| Issue of share capital | 19 | 1 338 | 11 961 | - | - | - | - | - | - | 13 299 |
| Legal reserve | 20 | - | - | - | 22 | - | - | (22) | - | - |
| Treasury shares movements | 19 | - | - | (246) | - | - | - | (2 726) | - | (2 972) |
| Stock Options | 19 | - | - | - | - | - | 518 | - | - | 518 |
| Changes in consolidation universe | 6 e 21 | - | - | - | - | - | - | - | (1 150) | (1 150) |
| Balance at 31 December 2006 | 15 701 | 49 213 | (260) | 1 276 | 229 | 518 | 28 036 | 11 211 | 105 924 | |
| Balance at January 1, 2007 | 15 701 | 49 213 | (260) | 1 276 | 229 | 518 | 28 036 | 11 211 | 105 924 | |
| Profit for the year | - | - | - | - | - | - | 6 997 | 3 294 | 10 291 | |
| Total recognised income | - | - | - | - | - | - | 6 997 | 3 294 | 10 291 | |
| Treasury shares movements | 19 | - | - | 11 | - | - | - | 99 | - | 110 |
| Stock Options | 19 | - | - | - | - | - | 168 | - | - | 168 |
| Sale of available-for-sale financial assets | 16 | - | - | - | - | (229) | - | - | - | (229) |
| Acquisitions to minority interests | 20 e 21 | - | - | - | - | - | - | (592) | (1 082) | (1 674) |
| Subsidiary share capital issuance costs | 20 e 21 | - | - | - | - | - | - | (306) | (469) | (775) |
| Changes in consolidation universe | 6 e 21 | - | - | - | - | - | - | - | 687 | 687 |
| Balance at 31 December 2007 | 15 701 | 49 213 | (249) | 1 276 | - | 686 | 34 234 | 13 641 | 114 502 |
(*) These reserves cannot be distributed to equity holders
Novabase, S.G.P.S., SA (hereunder referred to as Novabase or the company), originally incorporated under the name Novabase – Sistemas de Informação e Bases de Dados, Lda., is the oldest company in the Novabase Group, and being the Group's Holding Company holds and manages the financial holdings in all Group companies. It was incorporated on 11 May 1989 and its main activity until 1999 was the development and implementation of information technology solutions.
On 23 December 1999, the company changed its name and purpose and was converted into a holding company with the purpose of managing financial holdings in other companies as an indirect way of doing business.
Novabase is organized in three business divisions:
(i) Novabase Consulting - Includes areas such as IT Consulting, system implementation, outsourcing, recruiting and contracting of human resources within the Information Technology industry.
(ii) Novabase Engineering - Includes engineering solutions based on own hardware and software and is focused on areas like ticketing and access control, and telecommunication solutions.
(iii) Novabase Digital TV - Includes Digital TV business, namely development and commercialization of set-top-boxes to cable operators, satellite and business sector and products.
Novabase Capital, not considered as a division, is a support structure for the Novabase Group. It focus mainly on "Corporate Venture" functions and Mergers and Acquisitions, and is able to support the divisions' needs in these areas. Since June 2005, Novabase Capital is the managing company of 'Fundo de Capital de Risco para Investidores Qualificados Novabase Capital'.
The address of its registered office is in Av. D. João II, Lote 1.03.2.3, Parque das Nações – 1998-031 Lisboa - Portugal and presently has operations in Portugal, Spain and Germany.
Novabase is listed on the Euronext Lisbon.
The consolidated financial statements presented in this report were authorized by the Board of Directors on April 3, 2008.
These consolidated financial statements will be approved by General Meeting of Sharehoders.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the year presented, unless otherwise stated.
The consolidated financial statements of Novabase have been prepared in accordance with International Financial Reporting Standards - IFRS, as adopted by the European Union (EU).
IFRS 7 - Financial instruments: Disclosures (effective from January 1, 2007). IFRS 7 introduces new disclosures relating to financial instruments, and will require quantitative and qualitative disclosures regarding the group's risk exposure associated to financial instruments.
(ii) Standards and interpretations effective in 2007 but not relevant
The adoption of the standards and interpretations set below became effective from January 1, 2007, but the effect of the adoption is not relevant for group operations.
IFRS 4 - Insurance contracts
IFRIC 7 - Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies
IFRIC 8 - Scope of IFRS 2
IFRIC 9 - Re-assessment of embedded derivatives
IFRIC 10 - Interim financial reporting and impairment
(iii) Standards, amendments and interpretations effective from March 1, 2007 that have not been early adopted by the group
The following standards, amendments and interpretations to published standards are mandatory for accounting periods beginning on or after March 1, 2007 or later periods, but the group has not early adopted them:
IAS 1 (revised) presentation of financial statements (effective for annual periods beginning on or after 1 January 2009). This revision objective is to aggregate information in the financial statements on the basis of shared characteristics. Consequently all owner changes in equity will be presented in the statement of changes in equity, separately from non-owner changes in equity. All non owner changes in equity are required to be presented in one statement of Comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). The statement of Comprehensive income will include income and costs registered directly in the income statement and other gains and losses recognised in the period that were not included in the income statement. Additionally, the IAS 1 revised, changes the headlines of the financial statements, from 'Balance sheet' to 'Statement of financial position' and 'Income statement' to 'Statement of comprehensive income'. The impact of the adoption is being assessed by management.
IFRS 2 (Amendment), Share based payments (effective for annual periods beginning on or after 1 January 2009). IFRS 2 amendment deals with vesting conditions and cancellations. The objective is to restrict the concept of vesting conditions to service and performance conditions and to clarify that cancellations must be treated equally whether made by the entity or other parties. The impact of the amendment is being assessed by management.
IFRS 3 (Revised), Business combinations and IAS 27 (revised), Separate and consolidated financial statements (effective for annual periods beginning on or after 1 January 2009). The revision of these standards introduces the option of applying the "full goodwill method" on a business combination accounting the transactions with minorities according to the economic entity model. New accounting treatments on transaction costs, measurement of consideration are required in business combination. This revision will significantly impact Group's future business acquisitions.
IFRS 8, Operating segments (effective from 1 January 2009). IFRS 8 replaces IAS 14 and aligns segment reporting with the requirements of the US standard SFAS 131, 'Disclosures about segments of an enterprise and related information'. The new standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. The group will apply IFRS 8 from 1 January 2009. The impact of the adoption is being assessed by management.
IFRIC 11, IFRS 2 – Group and treasury share transactions (effective from periods beginning on or after 1 March 2007). IFRIC 11 provides guidance on whether share-based transactions involving treasury shares or involving group entities (for example, options over a parent's shares) should be accounted for as equity-settled or cash-settled share-based payment transactions in the stand-alone accounts of the parent and group companies. The group will adopt IFRIC 11 from 1 January 2008, but no impact is expected on the group's financial statements.
IAS 23 (Amendment), Borrowing costs (effective from 1 January 2009). This amendment was not yet adopted by the European Union. It requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed.
IFRIC 12, Service concession arrangements (effective from 1 January 2008). IFRIC 12 applies to contractual arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services. IFRIC 12 is not relevant to the group's operations.
IFRIC 13, Customer loyalty programmes (effective from 1 July 2008). IFRIC 13 clarifies that where goods or services are sold together with a customer loyalty incentive (for example, loyalty points or free products), the arrangement is a multiple-element arrangement and the consideration receivable from the customer is allocated between the components of the arrangement using fair values.
IFRIC 14, The limit on a defined benefit asset, minimum funding requirements and their interaction (effective from 1 January 2008). IFRIC 14 provides guidance on assessing the limit on the amount of the surplus that can be recognised as an asset. It also explains how the pension asset or liability may be affected by a statutory or contractual minimum funding requirement.
The consolidated financial statements have been prepared under the historical cost convention, except for the available-for-sale financial assets and derivatives.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions which impact on the reported values for assets and liabilities, and for income and expenses presented for the year. Nevertheless the management usage of it's best judgement at the time of the decision, the final results can differ from the estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 4.
The Board of directors believes that the estimates and assumptions adopted avoid significant risks from which can result material adjustments to assets and liabilities value.
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The acquisition cost is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of acquisition, plus costs directly attributable to the acquisition. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The group applies a policy of treating transactions with minority interests as transactions with equity owners. Therefore, in the acquisition of financial holdings to minority interests, the excess of the cost of acquisition over the shareholding percentage of the subsidiary acquired is recorded in Equity.
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.
The Group's share of its associates' post-acquisition profits or losses is recognised in the income statement, and its share of postacquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.
For the preparation of this information, the companies Novabase S.G.P.S. and Novabase Serviços, S.A. are both presented as part of the Consulting Division business segment.
Geographical segment results are calculated based on selling destination markets, which includes export and the activity of companies located outside of Portugal. Geographic segment assets are calculated based on location of each of the Group's facilities.
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in thousand euros, which is the Company's functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.
The functional currency of all the Group entities is identical to the presentation currency in the consolidated financial statements.
Property, plant and equipment comprise mainly basic and transport equipment, and are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items (purchase price and all the expenses supported direct or indirectly to bring the asset to its current condition).
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method, during the useful estimated life as follows:
| N.º of Years | ||
|---|---|---|
| • | Buildings and other constructions | 3 to 50 |
| • | Basic equipment | 3 to 4 |
| • | Transport equipment | 4 |
| • | Tools and utensils | 4 |
| • | Furniture, fittings and equipment | 3 to 10 |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount, and are included in the income statement.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates.
Goodwill (that have an indetermined useful life) is tested annually for impairment, in the second half of the year, and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-generating units represents the Group's investment in each business segment in which Novabase operates in namely, Novabase Consulting, Novabase Engineering and Novabase Digital TV. Additionally, for the purpose of impairment tests of goodwill not allocated to those two cash-generating units, the group defined cash generating units at the level of each subsidiary associate acquired.
Investigation expenses in the search of new technical and scientific knowledge are recorded in the income statement as and when incurred. Development expenses are accounted for as fixed assets when: i) the technical development process is proven to be executable; ii) group is able to conclude it's development and intends to do so ; iii) commercialization is assured, and iv) it's possible to estimate it's total cost with accuracy.
These assets are recorded and presented in terms of development or acquisition value, on the basis of the cost of the hours spent by the employees involved, and costs directly associated as well as any outsourcing costs.
Amortisation is calculated using the straight-line method, for periods between 3 to 5 years. Impairment of internaly generated assets is tested at the reporting date.
These assets are shown at historical cost. These assets have a definite useful life and are recognized at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of the assets over their estimated useful lives.
Intangible assets in progress refer to the ongoing internal development of software and hardware products.
The financial assets and liabilities are recognised in the date of the negotiation or contract, except if there is a contractual or legal estipulation in contrary, saying that the rights and obligations related with the amounts transacted are transfered to a different date. In this case, the relevant date is the last.
In the initial moment, the financial assets and liabilities are recognised by their fair value. The fair value is the amount that a determined asset or liability can be transfered or paid between entities both knowing and interested in doing the transaction. In the contracted date, the fair value is usually the amount of the transaction.
These assets are derecognised when i) contractual rights to the receivement of cash flows expires, ii) the group has transfered both risks and benefits related to the asset or iii) nevertheless, the group maintains a part but not substantially all the risks and benefits related to the asset, but has transfered the control of the asset.
The fair value is based in current bid prices, or in valuation methods and techniques (if the market for the financial asset is not active). A market is considered active if regular transactions occur.
The group classifies its financial assets in the following categories: (i) loans and receivables and (ii) available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets on initial recognition and re-evaluates that classification at each reporting date.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and subsequently remeasured at their fair value.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. Loans and receivables are subsequently measured at amortised cost accordingly to the effective interest method. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The group's loans and receivables comprise 'trade and other receivables' and 'accrued income'.
Available-for-sale financial assets are non-derivative financial assets that: (i) the group intends to maintain for indetermined period, (ii) are available for sale in the moment of initial recognition or (iii) are not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.
Investments are initially recognised at fair value. When the medium term expectations point to a significant decline in the fair value of the security below its cost in the balance sheet date, an impairment loss is recognised in the income statement.
Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale are recognised in equity. When assets classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities. Dividend income from available-for-sale financial assets is recognised in the income statement under 'Finance income' heading, when the group's right to receive payments is established.
The fair values of listed investments are based on current market prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These techniques include the use of recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances.
Assets that have an indefinite useful life are not subject to amortisation and depreciation, and are tested annually for impairment. Assets that are subject to amortisation and depreciation are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of impairment test, assets are allocated by segment, given that it is at this level that management monitors its return on investment.
The group assesses at each balance sheet date whether there is objective evidence that a financial or a group of financial assets is impaired.
In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously reconised in profit or loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.
In the case of other financial assets that shows impairment signs, their present value is determined by the use of estimated future cash flows, and an impairment loss (which is considered the difference between the asset's present value of estimated future cash flows and the carrying amount) is recognised in the income statement. Several indicators are used to identify impaiment:
(iv) probability that the debtor will enter bankruptcy or financial reorganisation.
The amount of the impairment loss is the difference between the asset's present value of estimated future cash flows and its carrying amount. The loss is recognised in the income statement within 'Other losses - net'. The carrying amount of the asset is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the same allowance account. Subsequent recoveries of amounts previously written off are credited against 'Other losses - net' in the income statement.
Merchandise and raw materials are stated at the lower of cost and net realisable value, cost is determined using the weighted average cost method.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Trade receivables are recognised initially at fair value and subsequently measured at cost less impairment losses.
The Group sells a part of its trade receivables through factoring transactions. A factoring transaction entails the sale of a portfolio of trade receivables to a financial institution. In the transactions that the Group transfers to a third party all the benefits and risks relating to the factored receivables, the receivables are de-recognised from the Group balance sheet.
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options of the company and its subsidiaries are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of acquisition as part of the purchase consideration.
When a Group company purchases the Holding Company's equity share capital (Treasury shares), the consideration paid is deducted from the equity attributable to the Company's equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received is included in equity attributable to the Company's equity holders.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
Cost incurred with interest on loans are included in the income statement under 'Financial costs' heading.
Income tax of the period includes current and deferred income tax. The income taxes are registered in the income statement, except if related with items recognised directly in equity. The current income tax charge is calculated on the basis of profit before income tax and adjusted according to the tax laws enacted at the balance sheet date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss, it is not accounted for.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax is recognised on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
The Group recognises a liability and an expense for bonuses, based on a formula that takes into consideration the profit attributable to the Company's employees after certain adjustments.
The subsidiary TechnoTrend AG is responsible for a defined benefit plan.
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and remuneration.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, when exceeding the highest value between 10% of the plan assets or 10% of the defined benefit responsibilities, are charged or credited to income over the remaining of employees' expected average working lives.
In accordance with Portuguese legislation, workers annually earn the right to two months of salary, namely for a vacation period and a vacation subsidy, which is accrued in the previous year to its settlement. The workers also have the annual right to a Christmas subsidy, accrued during that year and paid each December. These obligations are recorded in the respective year in which the right is earned, despite the payment date of that right.
The group rewards the services rendered by some workers through an equity-settled stock option plan. The fair value of the services received is recognized as cost, and registered under the equity account during the vesting period. The amount registered as cost represents the fair value of the stock option attributed, estimated based only on market conditions. Acquisition conditions different from market conditions were used to estimate the number of options vested at the end of acquisition period. The number of options expected to become exercisable is reviewed for each reporting date, and the difference from the previous estimate is reviewed and registered in the profit and loss.
Provisions are recognised when: i) the Group has a present legal or constructive obligation as a result of past events; ii) it is more likely than not that an outflow of resources will be required to settle the obligation and; iii) the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required on settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Revenue comprises of the fair value of the sale of goods and services, net of value-added tax, (VAT) rebates and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
Sales of goods are recognised when a Group entity has delivered products to the customer, the customer has accepted the products and collectibility of the related receivables is reasonably assured.
Software products are usually sold without a right of return. However, if there is any chance of return, accumulated experience is used to estimate and provide for such returns at the time of sale.
Revenues from consulting projects, classified as "time and materials" are recognized in the accounting period in which the services are rendered.
Revenues from consulting projects, classified as "turn key" (or "fixed contract") are recognized using the percentage of completion method based on sales of services, a ratio between costs incurred, contracted price, and estimated costs to be incurred until the end of the project is prepared by each project manager. This method allows adjusting the accrued income and deferred revenue headings in order to reflect the accurate result of each project at the end of each financial period.
Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income.
Dividend income is recognised when the right to receive payment is established.
Government subsidies are recognised at fair value, when there is high likelihood that the subsidy will be received and the Group fulfils all the requirements to receive it.
Non-refundable subsidies to finance development projects are recorded in the balance sheet as deferred income and are recognized in the income statement for each period, in proportion to the corresponding amortisation changes.
Operational subsidies are aimed at recovering the costs incurred and recorded with training initiatives and are recorded in the income statement as the expenses are incurred, regardless of when the subsidy is received.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Payments made under operating leases (net of any incentives received from the lesser) are charged to the income statement on a straight-line basis over the period of the lease.
Lease contracts for tangible assets have been recorded in fixed assets whenever the Group assumes substantially all the benefits and risks associated with ownership of the assets in question. The value at which these contracts are capitalised is the lower of the fair value of the leased asset and the present value of the minimum lease payments. Each payment is allocated between liabilities and financial costs in order to calculate a straight-line rate of liability remuneration. The responsabilities to third parties, deducted from its financial costs, are booked under liabilities (short and long term). The interest component of the lease payment is booked in income statement during the lease contract period, in a way to have an equal interest rate in the remaining balance of liabilities for each period.
Fixed assets acquired by way of Leases are depreciated during the shortest of the following two periods: useful life and lease contract period (4 years).
The consolidated financial statements for the year ended 31 December 2007 are considered comparable in all material aspects with those presented for the year ended 31 December 2006.
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest risk and price risk), credit risk, liquidity risk and cash flow interest-rate risk.
The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
The Group operates internationally and is exposed to foreign exchange risk arising from exposure to the U. S. Dollar, since some of the subsidiaries (TechnoTrend AG, Celfocus and Octal TV) perform transactions in this currency.
The finance department is responsible for the tracking of the exchange rate mentioned above, to reduce the impact of the fluctuation in consolidated results.
The table below summarises the Group's exposure to foreign currency exchange rate risk at 31 December. Included in the table are the Group's financial instruments at carrying amounts, categorised by currency.
| Euro | Dolar | Other | Total | |
|---|---|---|---|---|
| As of 31 December 2006 | ||||
| Assets | ||||
| Trade and other receivables | 75 660 | 10 641 | 1 056 | 87 357 |
| Accrued income | 14 799 | - | - | 14 799 |
| Other current assets | - | - | - | - |
| Available-for-sale financial assets | 839 | - | - | 839 |
| Cash and cash equivalents | 34 607 | 4 848 | 108 | 39 563 |
| 125 905 | 15 489 | 1 164 | 142 558 | |
| Liabilities | ||||
| Borrowings | 25 853 | - | - | 25 853 |
| Trade and other payables | 63 440 | 19 374 | 676 | 83 490 |
| Deferred income and other current liabilities | 15 424 | - | - | 15 424 |
| 104 717 | 19 374 | 676 | 124 767 | |
| As of 31 December 2007 | ||||
| Assets | ||||
| Trade and other receivables | 97 823 | 19 053 | 139 | 117 015 |
| Accrued income | 14 357 | - | - | 14 357 |
| Other current assets | - | - | - | - |
| Available-for-sale financial assets | - | - | - | - |
| Cash and cash equivalents | 36 300 | 2 034 | 1 | 38 335 |
| 148 480 | 21 087 | 140 | 169 707 | |
| Liabilities | ||||
| Borrowings | 18 454 | - | - | 18 454 |
| Trade and other payables | 87 109 | 18 250 | 50 | 105 409 |
| Deferred income and other current liabilities | 17 047 | - | - | 17 047 |
| 122 610 | 18 250 | 50 | 140 910 |
The Group used a sensitivity analysis technique that measures the estimated change to the income statement of either an instantaneous 10% strengthening or weakening in Euro against all other currencies, from the rates applicable at 31 December 2007, for each class of financial instrument with all other variables remaining constant. This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation.
Under this assumption, with a 10% strengthening (weakening) of Euro against all exchange rates, profit before tax would have increased or decreased by EUR 293 thousand in 2007, and decreased or increased, respectively by EUR 340 thousand, in 2006.
The group's interest-rate risk arises from short term finance investments in banks and borrowings. Short term finance investments in banks expose the group to cash flow interest-rate risk dependent of changes in market interest rates. Borrowings issued at variable rates expose the group to cash flow interest-rate risk. Borrowings issued at fixed rates expose the group to fair value interest rate risk. During 2007 and 2006, the group's borrowings at variable rates were denominated in Euros.
With the intention to stabilize its cash flows, the group uses full factoring transactions. As at 31.12.07, the amount transfered to factoring companies was EUR 13 402 thousand (2006: EUR 21 765 thousand).
The Group used a sensitivity analysis technique that measures the estimated change to the income statement of either an instantaneous increase or decrease of 0.5% (50 basis points) in market interest rates, from the rates at 31 December 2007, for each class of financial instrument with all other variables remaining constant. This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation. The sensitivity analysis is based on the following assumptions:
(i) Changes in market interest rates affect the interest income or expense of variable interest financial instruments;
(ii) Changes in market interest rates only affect interest income or expense in relation to financial instruments with fixed interest rates if these are recognized at their fair value;
(iii) Changes in market interest rates affect the fair value of other financial assets and liabilities;
(iv) Changes in the fair values of other financial assets and liabilities are estimated by discounting the future cash flows of net present values using appropriate market rates prevailing at the year end.
Under these assumptions, an increase or decrease of 0.5% in market interest rates, would impact respectively in an increase or decrease of profit before tax of approximately EUR 32 thousand, in 2007 and in a decrease or increase, respectively, of approximately EUR 42 thousand, in 2006.
Credit risk is managed, simultaneously, on business units level, for the amounts of outstanding trade and other receivables, and on group basis, for financial instruments. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and commited transactions. For banks and financial institutions, only independently and well known parties are accepted. Credit risk management of trade and other receivables is based in credit limits, taking into account the financial position of the customer and past experience.
In 31 December 2007, the 60 major customers represented approximately 75% of the total balance (2006: 73%) .
The distribution by geographical market of those customers is showen in the table below:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Portugal | 42% | 68% |
| Germany | 25% | 12% |
| Spain | 12% | 7% |
| Latin America | 9% | 6% |
| Rest of Europe | 5% | 2% |
| Asia | 4% | - |
| Middle East | 3% | 5% |
| 100% | 100% |
The distribution by activity sector of those customers is showen in the table below:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Telecomunications | 38% | 36% |
| Consuption electronics | 27% | 18% |
| Financial Services | 14% | 13% |
| Transports | 11% | 13% |
| Public Administration | 2% | 5% |
| Information Technology | 6% | 9% |
| Other | 2% | 6% |
| 100% | 100% |
The 20 customers with greater balance as at 31 December 2007 (which represent more than half of the total balance), although some ponctual delay in the invoices payment in the past, never represented losses for the group. The remaining balance includes 1 thousand customers with an average balance of EUR 60 thousand.
The table below shows the ratings atributted by Moody's Investors Services to the financial institutions with whom the group as higher balances as at 31 December 2007:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| A1 | 8 234 | 12 866 |
| Aa1 | 4 731 | 92 |
| Aa3 | 14 607 | 7 369 |
| 27 572 | 20 327 |
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions.
Management monitors rolling forecasts of the group's liquidity reserve (comprises undrawn borrowing facility and cash and cash equivalents) on the basis of expected cash flow, taking into account the analysis of the remaining contractual maturity of the financial liabilities and the expected date of financial assets inflows. Additionally, a regular monitoring is made to the maturity concentration of borrowings and liabilities of the group.
The plafonds of borrowings and factoring contracted by the group are showen in the table below:
| Borrowings | Factoring | |
|---|---|---|
| BES | 10 400 | - |
| BPI | 12 800 | - |
| BCP | 7 500 | 10 000 |
| CGD | - | 25 000 |
| BBVA | 5 000 | - |
| Santander | 5 000 | - |
| Barclays | 8 840 | - |
| BESSA | 1 500 | - |
| SCH | 2 900 | - |
| Dresdner | 3 000 | - |
| Coface | - | 7 500 |
| 56 940 | 42 500 |
The Group's objectives when managing capital, which is a broader concept than the 'equity' on the face of balance sheets, are: (i) To safeguard the Group's ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders;
(ii) To maintain a strong capital structure to support the development of its business;
(iii) To maintain an optimal capital structure to reduce the cost of capital.
Management monitors the Return on Capital (ROC) ratio, that the group defines as the 'Operating profit' divided by 'Total Equity', that measures the group company to generate cash flows related to the capital invested in its business.
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Operating profit | 13 858 | 8 605 |
| Total equity | 114 502 | 105 924 |
| Return on Capital | 12 % | 8 % |
The group has the objective to maintain ROC above the cost of capital (measured by WACC - weighted average cost of capital), which alows the group add value. The group's WACC in 2007, as well as in 2006, is around 10%. In 2007, the strategy of Novabase focused in the rentability and sustainability of its business.
The group exposure to price risk, as at 31 December 2006 was related with the investment of Novabase in equity securities of Portugal Telecom and PT Multimedia. Those investments were disposed during 2007, therefore, the price risk is no longer considered relevant.
The preparation of financial statements requires the use of certain critical accounting estimates by the board of directors, that affect assets, liabilities, income and expenses and the disclosure of these items at the financial statements reporting date. Actual results can therefore differ from the estimated.
The estimates and assumptions considered more relevant in the preparation of the financial statements are discussed below.
The Group tests annualy, on the second half of the year, whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates (see note 8).
The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues, based on estimates of whether additional taxes will be due.
When the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax estimates in the period in which such determination is made.
Revenue recognition in respect of turn key projects, is made by management recurring to analysis and estimates of the actual and future developments of consulting projects in place. These projections could have a different development in the future, from the present estimates performed by management. Eventual changes in the estimates would be reflected under accrued income and deferred income headings on the Balance Sheet and under services rendered on the Income Statement.
A provision for warranties is recognised when the underlying products or services are sold. The provision is established using historical information of nature, frequency and average costs of warranty claims.
Management maintains a provision for impairment of trade and other receivables, in order to reflect the estimated losses that result from clients' inability to make the required payments. When evaluating the adequacy of an allowance for doubtful accounts, management bases its estimates on the aging of accounts receivable balances and historical write-off experience, customer credit worthiness and changes in customer payment terms. If the financial condition of customers were to deteriorate, actual write-offs might be higher than expected.
The group is exposed to inventory impairment as a result of changes in economical enviroment, due to operating in a very dynamic market. To manage this risk, the group follows with attention market developments, as a way to identify the possible impact of those changes in its business.
As at 31 December 2007, for business segment report, the Group is organised as follows:
The companies considered in each business segment are presented in note 6. For the preparation of this information, the companies Novabase S.G.P.S. and Novabase Serviços, S.A. are both presented as part of the Consulting Division business segment.
The business segment results for the year ended 31 December 2006, are as follows:
| Digital | ||||||
|---|---|---|---|---|---|---|
| Consulting | Engineering | TV | Other | Group | ||
| Total Sales and Services rendered of the segment | 92 400 | 111 541 | 85 814 | 2 288 | 292 043 | |
| Sales and Services rendered inter-segment | (23 809) | (4 464) | (2 245) | (22) | (30 540) | |
| Sales and Services rendered | 68 591 | 107 077 | 83 569 | 2 266 | 261 503 | |
| Operating profit | 6 168 | 1 396 | 173 | 868 | 8 605 | |
| Finance costs – net | (383) | (1 039) | (1 261) | (3) | (2 686) | |
| Share of losses of associates (note 33) | - | (24) | - | (373) | (397) | |
| Profit for the year from continuing operations | 5 210 | 694 | (952) | 492 | 5 444 | |
| Profit for the year from discontinued operations | 68 | - | - | - | 68 | |
| Other information's: | ||||||
| Depreciation / amortisation | (3 389) | (1 017) | (1 037) | (127) | (5 570) | |
| Impairment of receivables | (112) | (592) | (647) | - | (1 351) | |
| Impairment of inventory | - | (295) | (2 611) | - | (2 906) |
The business segment results for the year ended 31 December 2007, are as follows:
| Digital | Novabase | ||||
|---|---|---|---|---|---|
| Consulting | Engineering | TV | Other | Group | |
| Total Sales and Services rendered of the segment | 83 036 | 133 548 | 113 003 | 492 | 330 079 |
| Sales and Services rendered inter-segment | (7 761) | (11 555) | 2 762 | (328) | (16 882) |
| Sales and Services rendered | 75 275 | 121 993 | 115 765 | 164 | 313 197 |
| Operating profit | 9 430 | (841) | 5 519 | (250) | 13 858 |
| Finance costs – net | 875 | (1 841) | (2 515) | (2) | (3 483) |
| Share of losses of associates (note 33) | - | 9 | - | (34) | (25) |
| Profit for the year from continuing operations | 9 480 | (1 636) | 2 714 | (267) | 10 291 |
| Other information's: | |||||
| Depreciation / amortisation | (3 362) | (1 280) | (1 508) | (14) | (6 164) |
| Impairment of receivables | (78) | (672) | (294) | (50) | (1 094) |
| Impairment of inventory | - | (2 154) | (714) | - | (2 868) |
The business segment assets and liabilities at 31 December 2006 and capital expenditure for the year then ended are as follows:
| Digital | Novabase | ||||
|---|---|---|---|---|---|
| Consulting | Engineering | TV | Other | Group | |
| Assets | 86 290 | 84 401 | 54 008 | 3 639 | 228 338 |
| Associates | 35 | 1 322 | 52 | 2 214 | 3 623 |
| Total Assets | 86 325 | 85 723 | 54 060 | 5 853 | 231 961 |
| Total Liabilities | 33 215 | 55 109 | 35 986 | 1 727 | 126 037 |
| Capital expenditure (12 Months) | 2 203 | 1 105 | 1 806 | 81 | 5 195 |
The business segment assets and liabilities at 31 December 2007 and capital expenditure for the year then ended are as follows:
| Digital | Novabase | ||||
|---|---|---|---|---|---|
| Consulting | Engineering | TV | Other | Group | |
| Assets | 92 859 | 86 420 | 71 220 | 2 173 | 252 672 |
| Associates | 735 | 1 577 | 52 | 2 561 | 4 925 |
| Total Assets | 93 594 | 87 997 | 71 272 | 4 734 | 257 597 |
| Total Liabilities | 37 138 | 53 811 | 52 244 | (98) | 143 095 |
| Capital expenditure (12 Months) | 4 914 | 986 | 1 374 | 31 | 7 305 |
Business segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash.
Capital expenditure comprises additions to property plant and equipment (Note 7) and intangible assets (Note 8).
At 31 December 2007, the Group operates in the following geographical areas:
Sales and services rendered by geographical segments in the period ended 31 December 2006 are as follows:
| Novabase | ||||
|---|---|---|---|---|
| Portugal | Germany | Other | Group | |
| Sales and Services rendered | 180 487 | 44 879 | 36 137 | 261 503 |
Sales and services rendered by geographical segments in the period ended 31 December 2007 are as follows:
| Novabase | ||||
|---|---|---|---|---|
| Portugal | Germany | Other | Group | |
| Sales and Services rendered | 191 233 | 43 802 | 78 162 | 313 197 |
The geographical segment assets and liabilities at 31 December 2006 and capital expenditure for the year then ended are as follows:
| Novabase | |||||
|---|---|---|---|---|---|
| Portugal | Germany | Other | Unallocated | Group | |
| Assets | 148 512 | 28 437 | 12 773 | 38 616 | 228 338 |
| Associates | 3 623 | - | - | - | 3 623 |
| Total Assets | 152 135 | 28 437 | 12 773 | 38 616 | 231 961 |
| Capital expenditure (12 Months) | 3 619 | 996 | 8 | 572 | 5 195 |
The geographical segment assets and liabilities at 31 December 2007 and capital expenditure for the year then ended are as follows:
| Novabase | |||||
|---|---|---|---|---|---|
| Portugal | Germany | Other | Unallocated | Group | |
| Assets | 151 655 | 47 784 | 13 923 | 39 310 | 252 672 |
| Associates | 4 225 | - | 700 | - | 4 925 |
| Total Assets | 155 880 | 47 784 | 14 623 | 39 310 | 257 597 |
| Capital expenditure (12 Months) | 5 784 | 1 280 | 241 | - | 7 305 |
Geographical segment assets are allocated based on location of each of the Group's facilities. Deferred income tax assets as well as goodwill and internally generated intangible assets are not allocated to any geographical segment.
The companies consolidated by full method on 31 December 2007 were the following:
| Shareholding % | |||||
|---|---|---|---|---|---|
| Holding company, | Head Office | Share Capital | |||
| Subsidiaries and Associates | and country | 31.12.07 | 31.12.07 | 31.12.06 | |
| Parent company - Group holding : | |||||
| Novabase S.G.P.S. | Lisbon - Portugal | € 15 700 697 | - | - | |
| Novabase Consulting Division : | |||||
| Novabase Consulting, S.A. | Lisbon - Portugal | € 2 041 000 | 96.3% | 96.3% | |
| Novabase B. I., S.A. | Lisbon - Portugal | € 250 000 | 96.3% | 96.3% | |
| Novabase Core Fin. Software Sol., S.A. | Lisbon - Portugal | € 100 000 | 100.0% | 100.0% | |
| NBO Recursos em TI | Lisbon - Portugal | € 50 000 | 96.3% | 96.3% | |
| Novabase A. C. D., S.A. | Lisbon - Portugal | € 750 000 | 93.4% | 93.4% | |
| Novabase Consulting SGPS, S.A. | Lisbon - Portugal | € 10 675 498 | 96.3% | 96.3% | |
| Novabase Consulting Espanha, S.A. | Madrid - Spain | € 1 000 000 | 100.0% | 100.0% | |
| Novabase E. A., S.A. | Lisbon - Portugal | € 150 000 | 96.3% | 96.3% | |
| CelFocus, S.A. | Lisbon - Portugal | € 100 000 | 53.0% | 53.0% | |
| Mentor, S.A. | Lisbon - Portugal | € 50 000 | 100.0% | 100.0% | |
| (i) | COLLAB – Sol. I. Com. e Colab., S.A. | Lisbon - Portugal | € 61 333 | 50.7% | 55.4% |
| (ii) | SAF, S.A. | Lisbon - Portugal | € 325 000 | 86.7% | 53.9% |
| (iii) Novabase International Solutions BV | Amsterd. - Netherl | € 18 000 | 90.0% | - | |
| Nbase International Investments B.V. | Amsterd. - Netherl | € 1 220 800 | 100.0% | 100.0% | |
| Novabase Engineering Division : | |||||
| Novabase Infraestruturas, SGPS, S.A. | Oeiras - Portugal | € 50 000 | 87.3% | 87.3% | |
| Novabase IIS, S.A. | Oeiras - Portugal | € 70 500 | 87.3% | 87.3% | |
| Octal - Engenharia de Sistemas, S.A. | Lisbon - Portugal | € 3 000 000 | 100.0% | 100.0% | |
| Novabase Infr. Integracion S. Inf., S. A. | Madrid - Spain | € 120 202 | 100.0% | 100.0% | |
| Gedotecome, Lda. | Lisbon - Portugal | € 25 000 | 100.0% | 100.0% | |
| (iv) ES IT International Trade & Services | Fribourg - Switzerl | CHF200 000 | - | 99.9% | |
| Octal 2 Mobile | Lisbon - Portugal | € 50 000 | 80.0% | 80.0% | |
| Novabase Digital TV Division : | |||||
| (v) | Techno Trend Holding NV | Amsterd. - Netherl | € 97 295 | 39.5% | 50.0% |
| (vi) Techno Trend AG | Erfurt - Germany | € 5 263 320 | 39.5% | 44.1% | |
| (vi) Novabase Interactive TV | Lisbon - Portugal | € 278 125 | 39.5% | 38.3% | |
| (vi) Octal TV , S.A. | Lisbon - Portugal | € 250 000 | 31.6% | 30.7% | |
| (vi) OnTV, S.A. | Lisbon - Portugal | € 100 000 | 39.5% | 19.5% | |
| Novabase Capital : | |||||
| Novabase Capital SGCR, S.A. | Lisbon - Portugal | € 2 500 000 | 100.0% | 100.0% | |
| (vii) Sapi 2 ci, Consultadoria Informática, S.A. | Oporto - Portugal | € 60 100 | - | 50.0% | |
| (vii) Sapi 2 pi, Projectos Informáticos, Lda. | Oporto - Portugal | € 5 000 | - | 50.0% | |
| Novabase Shared Services: | |||||
| Novabase Serviços, S.A. | Lisbon - Portugal | € 250 000 | 100.0% | 100.0% | |
(i) See note 29.
(ii) See note 20.
(iii) This company was incorporated in the second half of 2007. 90% of the shares are held by Nbase International Investments BV.
(iv) This company was sold in October 2007.
(v) The Group has the power to govern the financial and operating policies of this company (see note 20).
(vi) This company is controlled by Techno Trend Holding NV (see note 20).
(vi) The Group no longer has the power to govern the financial and operating policies of this company.
The companies consolidated using the equity method on 31 December 2007 were the following:
| Holding company | Head Office | Share Capital | Shareholding % | Equity 31.12.07 |
Results 31.12.07 |
||
|---|---|---|---|---|---|---|---|
| and country | 31.12.07 | 31.12.07 | 31.12.06 | Euro'000 | Euro'000 | ||
| Superemprego, S. A. | Lisbon - Portugal | € 500 000 | 36.25% | 36.25% | 293 | 47 | |
| Mind, S.A. | Lisbon - Portugal | € 370 000 | 50.0% | 50.0% | 853 (*) | 196 (*) | |
| Sapi 2 ci, Consultadoria Informática, S.A. | Oporto - Portugal | € 60 100 | 50.0% | - | 290 (*) | 90 (*) | |
| Sapi 2 pi, Projectos Informáticos, Lda | Oporto - Portugal | € 5 000 | 50.0% | - | 67 (*) | 13 (*) | |
| Fundo Capital Risco | Lisbon - Portugal | € 7 142 857 | 30.0% | 30.0% | 7 208 | (85) | |
| Key Lab | Lisbon - Portugal | € 500 000 | 15.0% | 15.0% | 1 162 | 201 | |
(*) Information regarding 31.12.2006.
The detail of Property plant and equipment is analysed as follows:
| 31.12.07 | 31.12.06 | ||||||
|---|---|---|---|---|---|---|---|
| Accumulated | Net book | Accumulated | Net book | ||||
| Cost | depreciation | value | Cost | depreciation | value | ||
| Buildings and other constructions | 2 072 | 222 | 1 850 | 1 361 | 427 | 934 | |
| Basic equipment | 5 017 | 2 151 | 2 866 | 3 968 | 2 163 | 1 805 | |
| Transport equipment | 4 715 | 2 687 | 2 028 | 5 331 | 2 729 | 2 602 | |
| Tools and utensils | 632 | 440 | 192 | 502 | 364 | 138 | |
| Furniture, fittings and equipment | 2 415 | 911 | 1 504 | 1 513 | 909 | 604 | |
| Other tangible fixed assets | 19 | 12 | 7 | 12 | 4 | 8 | |
| 14 870 | 6 423 | 8 447 | 12 687 | 6 596 | 6 091 |
During 2006, movements on Property plant and equipment were as follows:
| Change in | ||||||
|---|---|---|---|---|---|---|
| 01.01.06 | Acquisitions | Consolidation | 31.12.06 | |||
| Balance | / Increases | Disposals | Transfers | Universe | Balance | |
| Cost : | ||||||
| Buildings and other constructions | 1 328 | 33 | - | - | - | 1 361 |
| Basic equipment | 5 967 | 704 | (2 269) | 75 | (509) | 3 968 |
| Transport equipment | 4 643 | 1 652 | (898) | - | (66) | 5 331 |
| Tools and utensils | 406 | 101 | (5) | - | - | 502 |
| Furniture, fittings and equipment | 1 670 | 172 | (294) | (1) | (34) | 1 513 |
| Other tangible fixed assets | 12 | 57 | (57) | - | - | 12 |
| 14 026 | 2 719 | (3 523) | 74 | (609) | 12 687 | |
| Accumulated Depreciation : | ||||||
| Buildings and other constructions | 286 | 141 | - | - | - | 427 |
| Basic equipment | 3 663 | 1 033 | (2 125) | 1 | (409) | 2 163 |
| Transport equipment | 2 021 | 1 582 | (804) | - | (70) | 2 729 |
| Tools and utensils | 321 | 48 | (5) | - | - | 364 |
| Furniture, fittings and equipment | 956 | 267 | (290) | (1) | (23) | 909 |
| Other tangible fixed assets | 3 | 58 | (57) | - | - | 4 |
| 7 250 | 3 129 | (3 281) | - | (502) | 6 596 |
During the period ended 31 December 2007, movements on Property plant and equipment were as follows:
| Change in | ||||||
|---|---|---|---|---|---|---|
| 01.01.07 | Acquisitions | Consolidation | 31.12.07 | |||
| Balance | / Increases | Disposals | Transfers | Universe | Balance | |
| Cost : | ||||||
| Buildings and other constructions | 1 361 | 1 805 | (1 070) | - | (24) | 2 072 |
| Basic equipment | 3 968 | 1 851 | (729) | 243 | (316) | 5 017 |
| Transport equipment | 5 331 | 1 027 | (1 235) | - | (408) | 4 715 |
| Tools and utensils | 502 | 130 | - | - | - | 632 |
| Furniture, fittings and equipment | 1 513 | 1 201 | (208) | - | (91) | 2 415 |
| Other tangible fixed assets | 12 | 29 | (22) | - | - | 19 |
| 12 687 | 6 043 | (3 264) | 243 | (839) | 14 870 | |
| Accumulated Depreciation : | ||||||
| Buildings and other constructions | 427 | 527 | (710) | - | (22) | 222 |
| Basic equipment | 2 163 | 989 | (695) | - | (306) | 2 151 |
| Transport equipment | 2 729 | 1 362 | (1 056) | - | (348) | 2 687 |
| Tools and utensils | 364 | 76 | - | - | - | 440 |
| Furniture, fittings and equipment | 909 | 286 | (203) | - | (81) | 911 |
| Other tangible fixed assets | 4 | 30 | (22) | - | - | 12 |
| 6 596 | 3 270 | (2 686) | - | (757) | 6 423 |
Buildings and other constructions includes assets in the amount of EUR 1 658 thousand installed on third party permises. Depreciation is included in 'Depreciation and amortisation' item in the income statement (note 30).
Transport Equipment includes the following finance lease contracts:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Acquisition cost | 4 686 | 4 888 |
| Accumulated depreciation | (2 668) | (2 364) |
| Net book value | 2 018 | 2 524 |
| 31.12.07 | 31.12.06 | |
| Depreciation charge | 1 354 | 1 483 |
Intangible assets are analysed as follows:
| 31.12.07 | 31.12.06 | |||||
|---|---|---|---|---|---|---|
| Cost | Accumulated Amortisation |
Net book value |
Cost | Accumulated Amortisation |
Net book value |
|
| Internally generated intangible assets | 4 226 | 1 637 | 2 589 | 3 891 | 1 230 | 2 661 |
| Industrial property and other rights | 11 792 | 6 563 | 5 229 | 11 699 | 5 328 | 6 371 |
| Work in progress | 516 | - | 516 | 1 177 | - | 1 177 |
| Goodwill | 26 403 | - | 26 403 | 26 750 | - | 26 750 |
| 42 937 | 8 200 | 34 737 | 43 517 | 6 558 | 36 959 |
During 2006, movements were as follows:
| Change in | ||||||
|---|---|---|---|---|---|---|
| 01.01.06 | Acquisitions Impairment ch. | Consolidation | 31.12.06 | |||
| Balance | / Increases | Disposals | Transfers | Universe | Balance | |
| Cost : | ||||||
| Internally generated intangible assets | 3 423 | 572 | (860) | 1 675 | (919) | 3 891 |
| Industrial property and other rights | 11 682 | 42 | (242) | 219 | (2) | 11 699 |
| Work in progress | 1 305 | 1 862 | - | (1 968) | (22) | 1 177 |
| Goodwill | 27 164 | - | (213) | - | (201) | 26 750 |
| 43 574 | 2 476 | (1 315) | (74) | (1 144) | 43 517 | |
| Accumulated Amortisation | ||||||
| Internally generated intangible assets | 824 | 989 | (860) | 781 | (504) | 1 230 |
| Industrial property and other rights | 4 117 | 1 452 | (239) | - | (2) | 5 328 |
| 4 941 | 2 441 | (1 099) | 781 | (506) | 6 558 |
During the period ended 31 December 2007, movements were as follows:
| Change in | ||||||
|---|---|---|---|---|---|---|
| 01.01.07 | Acquisitions Impairment ch. | Consolidation | 31.12.07 | |||
| Balance | / Increases | Disposals | Transfers | Universe | Balance | |
| Cost : | ||||||
| Internally generated intangible assets | 3 891 | 707 | (1 229) | 857 | - | 4 226 |
| Industrial property and other rights | 11 699 | 116 | (23) | - | - | 11 792 |
| Work in progress | 1 177 | 439 | - | (1 100) | - | 516 |
| Goodwill | 26 750 | - | - | - | (347) | 26 403 |
| 43 517 | 1 262 | (1 252) | (243) | (347) | 42 937 | |
| Accumulated Amortisation | ||||||
| Internally generated intangible assets | 1 230 | 1 636 | (1 229) | - | - | 1 637 |
| Industrial property and other rights | 5 328 | 1 258 | (23) | - | - | 6 563 |
| 6 558 | 2 894 | (1 252) | - | - | 8 200 |
| Amortisation | Accumulated | Net book | ||||
|---|---|---|---|---|---|---|
| Business | Period | Company | Cost | amortisation | value | |
| (i) | ATX Projects | 10 years | Novabase Consulting | 8 295 | 3 588 | 4 707 |
| (ii) | SAP and Meta4 | 5 years | Novabase Serviços | 2 194 | 1 915 | 279 |
| Other | 1 303 | 1 060 | 243 | |||
| 11 792 | 6 563 | 5 229 |
(i) Amount paid to Espírito Santo group, for the acquisition of a service contract, over a period between 6 to 10 years.
(ii) Human resources and management information systems based respectively on META4 and mySAP platforms, for the Group internal use.
Internally generated intangible assets includes the cost of projects for the development of software, as well as the cost of projects for products development in specific areas.
The amount with research and development recognized as a cost, related to the main projects, reached 8.5M € (2006: 5.9M€).
Movements in goodwill were as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Balance at 1 January | 28 369 | 28 570 |
| (i) Changes in consolidation universe |
(347) | (201) |
| Balance at the end of the year | 28 022 | 28 369 |
| Movements in goodwill impairment charges were as follows: | ||
| 31.12.07 | 31.12.06 | |
| Balance at 1 January | (1 619) | (1 406) |
| (ii) Impairment losses |
- | (213) |
| Balance at the end of the year | (1 619) | (1 619) |
(i) In 2006: Disposal of Manchete participation. In 2007: Sapi2 were consolidated by the equity method as the group doesn't have the power to govern the financial and operating policies of this company.
(ii) In 2006: An impairment loss was registered in this period, related with the remaining value of the Goodwill associated with the subsidiary Mind.
Goodwill is allocated to the Group's cash-generating units (CGUs) identified according to the business segments.
| 31.12.07 | 31.12.06 | ||
|---|---|---|---|
| Novabase Consulting division | 14 155 | 14 155 | |
| Novabase Engineering division | 731 | 731 | |
| Novabase Digital TV division | 11 517 | 11 517 | |
| (*) | Novabase Capital | - | 347 |
| 26 403 | 26 750 |
(*) Cash generating units were defined at the level of each company acquired.
With the objective of analysing the goodwill impairment, in 2007 were performed evaluations which support the recoverable value of the goodwill.
For Novabase Consulting and Novabase Engineering divisions, was used the discounted cash flow method, using the following key assumptions:
| Consulting | Engineering |
|---|---|
| 12.36% | 14.26% |
| 4.00% | 3.00% |
| 5.00% | 2-1% |
For the purpose of preparing the discounted cash flow model it was considered a 5 year period.
For Digital TV division, was used cash flows projections based on a 3 year period and evaluations based in the Economic Value Added method. In that time horizon, the margin % of the operational profit varies from 5 to 7%. Management determined forecasted gross margins and growth rates based on past performance and its expectations for the market development. The return on net assets rate for the period 2010-2014 is 22.5% and after 2014 is 10%. The discount rates used are pre-tax and reflect the market risk premium. The discount rate is 9% for the period 2010-2014 and 8% after 2014. The growth rate of net assets is 9% for the period 2010-2014 and 2% after 2014.
Application of the previously described method generates a recoverable value of assets superior to the carrying value of the related assets, concluding therefore that no need for an impairment charge to the goodwill allocated to each cash generating units.
A reasonably possible change in a key assumption on which management has based its determination of the recoverable amount wouldn't cause the carrying amount to exceed its recoverable amount.
This heading is analysed as follows:
| Shareholding % | Acquisition Cost | ||||
|---|---|---|---|---|---|
| 31.12.07 | 31.12.06 | 31.12.07 | 31.12.06 | ||
| (i) | Plano B | 75% | 75% | 9 | 9 |
| (ii) | WRC | 4% | 4% | 15 | 15 |
| (ii) | Tape | 1% | 1% | 4 | 4 |
| (ii) | Intelcart | 10% | 10% | 2 | 2 |
| TV Lab | 45% | 45% | 49 | 49 | |
| (iii) | Key Lab (see note 6) | 15% | 15% | 1 325 | 1 316 |
| Fundo Capital Risco | 30% | 30% | 2 128 | 2 212 | |
| (iv) | SAPi2 | 50% | 50% | 432 | - |
| (v) | NB Middle East | 91% | - | 700 | - |
| (v) | Contactless | 62% | - | 245 | - |
| Other | 16 | 16 | |||
| 4 925 | 3 623 |
(i) These companies are dormant and therefore were excluded from consolidation.
(ii) These companies were considered not materially relevant, and therefore were not included in the consolidation.
(iii) This balance includes the amount of EUR 1 270 thousand of the goodwill arising from the acquisition of this equity holding.
(iv) Novabase does not have the power to control the operational and financial policies of this company.
(v) Companies incorporated in December 2007, that will start activities only in the beginning of 2008.
Novabase Group recognises the tax effects on timing differences that arose between the tax basis of assets and liabilities and their carrying amount in the Consolidated Financial Statements, in accordance with the International Accounting Standard 12 - Income Taxes.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts can be presented as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Deferred tax assets: | ||
| To be recovered within 12 months | 1 531 | 1 665 |
| To be recovered after more than 12 months | 9 580 | 8 164 |
| 11 111 | 9 829 | |
| Deferred tax liabilities: | ||
| To be recovered within 12 months | - | - |
| To be recovered after more than 12 months | 392 | 157 |
| 392 | 157 |
The movement in the deferred income tax is as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Balance at 1 January | 9 829 | 9 053 |
| Change in consolidation universe | - | (74) |
| Transfers | 256 | (2) |
| Income statement charge | 1 026 | 852 |
| Balance at the end of the year | 11 111 | 9 829 |
The movement in deferred tax assets during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:
| Tax losses |
Accelerated Amortisation |
Tax incentives |
Provisions | Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2006 | 5 915 | 330 | 2 172 | 636 | 9 053 |
| Charged to the income statement | 290 | (124) | 751 | (65) | 852 |
| Transfers | (2) | - | - | - | (2) |
| Change in consolidation universe | (74) | - | - | - | (74) |
| Balance at 31 December 2006 | 6 129 | 206 | 2 923 | 571 | 9 829 |
| Charged to the income statement | 268 | (113) | 716 | 155 | 1 026 |
| Transfers | 256 | - | - | - | 256 |
| Balance at 31 December 2007 | 6 653 | 93 | 3 639 | 726 | 11 111 |
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Merchandise | 9 652 | 12 373 |
| Finished products | 2 085 | 1 822 |
| Raw materials, subsidiary goods and consumables | 12 448 | 11 433 |
| Inventory impairment | 24 185 (3 321) |
25 628 (2 017) |
| 20 864 | 23 611 |
Movements in inventory impairment are analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Balance at 1 January | 2 017 | 5 917 |
| Impaiment | 2 868 | 2 906 |
| Impaiment reversal | (1 023) | (480) |
| Transfers | - | (463) |
| Write-offs | (541) | (5 863) |
| 3 321 | 2 017 |
The amount of inventories recognised in income statement, under 'cost of goods sold' and 'external supplies and services' headings is EUR 188 025 thousand (2006: EUR 141 451 thousand).
| Other | Non-financial | ||||
|---|---|---|---|---|---|
| Loans and | Available- | financial | assets/ | ||
| receivables | -for-sale | liabilities | liabilities | Total | |
| TAs of 31 December 2006 | |||||
| Assets | |||||
| Trade and other receivables | 87 357 | - | - | 4 801 | 92 158 |
| Accrued income | 14 799 | - | - | - | 14 799 |
| Other current assets | - | - | - | 3 221 | 3 221 |
| Available-for-sale financial assets | - | 839 | - | - | 839 |
| Cash and cash equivalents | 39 563 | - | - | - | 39 563 |
| 141 719 | 839 | - | 8 022 | 150 580 | |
| Liabilities | |||||
| Borrowings | - | - | 25 853 | - | 25 853 |
| Trade and other payables | - | - | 83 490 | - | 83 490 |
| Deferred income and other current liabilities | - | - | 15 424 | - | 15 424 |
| - | - | 124 767 | - | 124 767 | |
| TAs of 31 December 2007 | |||||
| Assets | |||||
| Trade and other receivables | 117 015 | - | - | 3 140 | 120 155 |
| Accrued income | 14 357 | - | - | - | 14 357 |
| Other current assets | - | - | - | 3 180 | 3 180 |
| Available-for-sale financial assets | - | - | - | - | - |
| Cash and cash equivalents | 38 335 | - | - | - | 38 335 |
| 169 707 | - | - | 6 320 | 176 027 | |
| Liabilities | |||||
| Borrowings | - | - | 18 454 | - | 18 454 |
| Trade and other payables | - | - | 105 409 | - | 105 409 |
| Deferred income and other current liabilities | - | - | 17 047 | - | 17 047 |
| - | - | 140 910 | - | 140 910 | |
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Trade receivables | 117 359 | 88 610 |
| Impairment of trade receivables | (3 291) | (3 345) |
| 114 068 | 85 265 | |
| Prepayments to suppliers | 1 940 | 2 976 |
| Employees | 264 | 310 |
| Taxes | 936 | 1 515 |
| Subsidies from European Social Fund | 102 | 186 |
| Related parties debtors | 517 | 661 |
| Financial investments disposals | 22 | 380 |
| Other | 2 306 | 865 |
| 6 087 | 6 893 | |
| 120 155 | 92 158 |
The fair value of trade receivables balance approximates it's carrying amount.
The carrying amount of this heading plus the balance of accrued income (see note 14) represents the maximum exposure to credit risk.
The ageing analysis of the carrying amounts of trade receivables that were past due is as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Carrying amount of receivables not due | 79 218 | 55 362 |
| Carrying amount of receivables not impaired | ||
| Past due for less than 6 months | 23 630 | 17 551 |
| Past due for more than 6 months | 10 804 | 12 209 |
| Carrying amount of receivables due and not impaired | 34 434 | 29 760 |
| Carrying amount of receivables not impaired | ||
| Past due for less than 6 months | 244 | 95 |
| Past due for more than 6 months | 3 463 | 3 393 |
| Carrying amount of receivables due and not impaired | 3 707 | 3 488 |
| 117 359 | 88 610 | |
| Movements in impairment of trade receivables are analysed as follows: | ||
| 31.12.07 | 31.12.06 | |
| Balance at 1 January | 3 345 | 2 471 |
| Change in consolidation universe | (13) | (66) |
| Impairment | 972 | 1 097 |
| Impairment reversal | (739) | (439) |
| Transfers | (115) | 282 |
| Writte-offs | (159) | - |
| 3 291 | 3 345 | |
| 14. Accrued income | ||
| Accrued income is analysed as follows: | ||
| 31.12.07 | 31.12.06 | |
| - Ongoing projects | 13 256 | 14 265 |
| - Other accrued income | 1 101 | 534 |
| 14 357 | 14 799 | |
| 15. Other current assets | ||
| This heading is analysed as follows: | ||
| 31.12.07 | 31.12.06 | |
| - Hardware and software maintenance | 848 | 1 594 |
| - Subcontracts | 807 | 638 |
| - Other deferred costs | 1 525 | 989 |
In order to assure cut off of operations for these services, costs were deferred and will be taken to the income statement in next periods.
3 221 3 180
The carrying amount of this heading represents the maximum exposure to credit risk.
Movements in this heading are analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Balance at 1 January | 839 | 757 |
| Disposals | (610) | - |
| Fair value adjustments in Equity | (229) | 82 |
| Balance at the end of the year | - | 839 |
| This heading is analysed as follows: | ||
| 31.12.07 | 31.12.06 | |
| Ordinary shares | ||
| - Portugal Telecom | - | 602 |
| - PT Multimédia | - | 237 |
| - | 839 |
In 2007, the amount of dividends received, booked in income statement under 'Finance Income' heading, was EUR 0 (2006: EUR 36 thousand).
With reference to the consolidated Cash Flow Statement, the detail and description of Cash and bank overdrafts is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| - Cash | 5 | 327 |
| - Short term bank deposits | 38 330 | 39 218 |
| - Other Cash Investments: | ||
| - Finance investments in Portuguese banks | - | 18 |
| Cash and cash equivalents | 38 335 | 39 563 |
| - 'Overdrafts' | (7 057) | (8 411) |
| 31 278 | 31 152 |
The fair value of Cash and cash equivalents balance approximates it's carrying amount.
The maximum exposure to credit risk at the reporting date is the carrying value mentioned above.
There is a short-term bank deposit of EUR 500 thousand given as collateral related to a EUR 7 000 thousand factoring line from Coface to Techno Trend AG.
In 2004, Novabase decided to discontinue its operations in Novabase Brazil. This company's activity was not profitable and demanded significant management resources and cash requirements. Also in 2004, the Training activity has been exposed to a similar process, and the companies' operating in this area were disposed. The costs related with this two decisions were provisioned in 2004, in the amount of EUR 1.8 and 2.2 million respectively.
The disposal of 80% of Novabase Brazil in 2005 generated an income of EUR 682 thousand. The remaining 20% held by Novabase Consulting were disposed in the first half of 2006, generating an income of EUR 68 thousand.
The result of the discontinued operations, as well as assets and liabilities of these activities are analysed as follows:
| 31.12.07 | 31.12.06 | |||
|---|---|---|---|---|
| Training | Brazil | Training | Brazil | |
| Income Expenses |
- - |
- - |
- - |
68 - |
| Result before taxes of discontinued operations Taxes |
- - |
- - |
- - |
68 - |
| Result after taxes of discontinued operations | - | - | - | 68 |
| 31.12.07 | 31.12.06 | |||
|---|---|---|---|---|
| Training | Brazil | Training | Brazil | |
| Non-current assets classified as held for sale | ||||
| Amount to receive for the disposal | 2 915 | - | 2 915 | - |
| Provisions | (2 915) | - | (2 915) | - |
| - | - | - | - |
The Share Capital, fully subscribed and paid of EUR 15 700 697 is represented by 31 401 394 shares with a nominal value of EUR 0.5 each.
| Number of shares (thousands) |
Ordinary shares |
Share premium |
Treasury shares |
Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2006 | 28 726 | 14 363 | 37 252 | (14) | 51 601 |
| Shares issued | 2 675 | 1 338 | 11 961 | - | 13 299 |
| Treasury shares purchased | - | - | - | (314) | (314) |
| Treasury shares disposed | - | - | - | 68 | 68 |
| Balance at 31 December 2006 | 31 401 | 15 701 | 49 213 | (260) | 64 654 |
| Treasury shares disposed | - | - | - | 11 | 11 |
| Balance at 31 December 2007 | 31 401 | 15 701 | 49 213 | (249) | 64 665 |
The number of treasury shares held by Novabase S.G.P.S. on 31.12.07 is under the limits established by its statutory rules (10% of share capital) and in accordance with the Portuguese commercial law.
At 31 December 2006 Novabase S.G.P.S. held 520 577 treasury shares, representing 1.66% of it's share capital.
During 2007 the company disposed 23 169 shares by the exercise of stock options, at the average price of EUR 4.74.
At 31 December 2007, Novabase S.G.P.S. held 497 408 treasury shares, representing 1.58% of total share capital.
There are several Stock Options Plans in force approved in distinct Shareholders General Meetings.
The Stock Options attributed will automatically expire, whenever the employee is no longer working in any of the Group companies, or ceases functions as Administrator.
All active plans as at 31 December 2007 will be settled with shares of the company.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
| 31.12.07 | 31.12.06 | |||
|---|---|---|---|---|
| Average exercise price in EUR per share |
Options (thousands) |
Average exercise price in EUR per share |
Options (thousands) |
|
| Balance at 1 January Granted |
- | 4 725 - |
6.27 | 5 886 2 968 |
| Exercised | 4.91 | (23) | 4.97 | (2 676) |
| Lapsed | 5.74 | (2 260) | 6.58 | (1 453) |
| Balance at the end of the year | 2 442 | 4 725 |
Share options outstanding (in thousands) at the end of the period have the following expiry date and exercise prices:
| Exercise | Shares (thousands) | ||
|---|---|---|---|
| Expiry date | price | 31.12.07 | 31.12.06 |
| 2007 | 4.91 | - | 475 |
| 2007 | 5.81 | - | 1 285 |
| 2008 | 6.03 | 854 | 1 005 |
| 2009 | 6.39 | 1 588 | 1 960 |
| 2 442 | 4 725 |
The cost of EUR 168 thousand (2006: EUR 518 thousand) has been charged in 'Employee benefit expense' in the Income Statement.
Portuguese companies are obliged / required by law to transfer at least 5% of annual net profit to legal reserves until this balance reaches 20% of the share capital. This reserve cannot be distributed to shareholders though it may be used to absorb losses after all other reserves have been used.
Novabase S.G.P.S. since its incorporation has decided not to distribute dividends to the shareholders, ensuring that the company has adequate financial resources needed for its continued development.
In March 2007, Techno Trend Holding NV acquired 3.3% of Techno Trend AG to Texas Instruments Inc. by the amount of USD 1 750 000, which allowed to increase the financial holding to 78.4%. Additionally, Techno Trend Holding NV increased share capital, from EUR 70 thousand to EUR 97 thousand, receiving for the subscription 24.9% of Novabase Interactive TV shares, 21.6% of Techno Trend AG shares and 49% of OnTV shares. Consequently, Novabase S.G.P.S. diluted its financial holding in Tecnho Trend Holding NV from 50% to 39.5%. These operations had an impact in minority interest, which decreased EUR 804 thousand.
In the beginnig of 2007, Novabase Consulting, S.A. acquired 34% of SAF by the amount of EUR 342 thousand, increasing its financial holding to 86.7%. This operation had an impact in minority interest, which decreased EUR 278 thousand.
In both cases, SAF and Techno Trend Holding NV, as the financial holdings were acquired to minorities in which the group already had control, Economic Entity Model Method was applied, and the difference between the acquisition cost and the net assets value of the subsidiaries acquired has been booked in Equity, respectively, EUR 65 thousand and EUR 527 thousand.
In 2007, Techno Trend Holding NV incurred in expenses of EUR 775 thousand with share capital issue and Initial Public Offering (IPO) process. From this amount approximately EUR 306 thousand was attributed to the group being recognised in reserves. The remaining amount was atributted to minority interest (note 21).
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Balance at 1 January | 11 211 | 12 018 |
| Acquisitions of minority by the group (see note 20). | (1 082) | - |
| Costs of issuance of ordinary shares of a subsidiary (see note 20). | (469) | - |
| Change in consolidation universe (*) | 687 | (1 150) |
| Minority interests in profit for the year | 3 294 | 343 |
| 13 641 | 11 211 |
(*) Share capital issue (EUR 877 thousand) - see note 29. NB Int. Sol. (EUR 13 thousand), SAPi2 (EUR -203 thousand) - see note 6.
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Non-current | ||
| Bank borrowings | 4 325 | 7 400 |
| Finance lease liabilities | 1 437 | 1 782 |
| 5 762 | 9 182 | |
| Current | ||
| Bank borrowings | 11 584 | 15 303 |
| Finance lease liabilities | 1 108 | 1 368 |
| 12 692 | 16 671 | |
| Total borrowings | 18 454 | 25 853 |
The fair value of Non current liabilities balance approximates it's carrying amount.
The exposure of the Group's current borrowings to the contractual repricing dates are as follows:
| 6 months or less |
6-12 months | Total | |
|---|---|---|---|
| At 31 December 2006 | 13 953 | 1 350 | 15 303 |
| At 31 December 2007 | 10 120 | 1 464 | 11 584 |
| The maturity of non-current borrowings is as follows: | |||
| 31.12.07 | 31.12.06 | ||
| Between 1 and 2 years | 2 979 | 2 700 | |
| Between 2 and 5 years | 1 346 | 4 700 | |
| 4 325 | 7 400 | ||
| The effective interest rates at the balance sheet date were as follows: | |||
| 31.12.07 | 31.12.06 | ||
| Bank borrowings | 5.622% | 4.751% | |
| Bank overdrafts | 4.921% | 4.388% | |
| 31.12.07 | 31.12.06 | ||
| Finance lease liabilities – minimum lease payments: | |||
| Not later than 1 year | 1 108 | 1 368 | |
| Between 1 and 5 years | 1 437 | 1 782 | |
| 2 545 | 3 150 | ||
| Future finance charges of finance leases | 852 | 924 | |
| Present value of finance lease liabilities | 3 397 | 4 074 | |
| The present value of finance lease liabilities can be analysed as follows: | |||
| 31.12.07 | 31.12.06 | ||
| Not later than 1 year | 1 474 | 1 758 | |
| Between 1 and 5 years | 1 923 | 2 316 | |
| 3 397 | 4 074 |
Techno Trend AG has a pension plan for board management. This obligation is recorded under 'trade and other payables'. Yearly costs incurred with this plan are recorded in the income statement.
This item is analysed as follows:
Balance sheet obligations related with:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Retirement benefit obligations | 357 | 380 |
| 357 | 380 | |
| Profit and loss related with: | ||
| 31.12.07 | 31.12.06 | |
| Retirement benefit obligations | 25 | 25 |
| 25 | 25 |
Retirement benefit obligations recorded under assets and liabilities is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Present value of defined benefits obligation | 632 | 596 |
| Fair value of plan assets | (275) | (216) |
| 357 | 380 |
Retirement benefit obligations recorded under profit and loss is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Actual cost of service | 114 | 60 |
| Interest paid | 29 | 26 |
| Expected return on plan assets | (11) | (8) |
| Net actuarial loss recognized during the period / year | (107) | (53) |
| Total, accounted under staff costs | 25 | 25 |
Movement in balance sheet is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Balance at 1 January | 380 | 434 |
| Total costs recognized in income statement | 25 | 25 |
| Contributions paid | (48) | (79) |
| Balance at the end of the year | 357 | 380 |
| Main actuarial assumptions used are the following: |
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Discount Rate | 5.50% | 4.50% |
| Expected return on plan assets | 4.50% | 4.50% |
| Future wage increase | 0.00% | 0.00% |
| Predicted plan increases | 2.00% | 2.00% |
Movements on Provisions are analysed as follows:
| Legal | Other risks | |||
|---|---|---|---|---|
| Warranties | Disputes | and charges | Total | |
| Balance at 1 January 2006 | 275 | 100 | 216 | 591 |
| Additional provisions | 635 | - | 10 | 645 |
| Used during year | (35) | - | (128) | (163) |
| Changes in consolidation universe | - | - | (1) | (1) |
| Balance at 31 December 2006 | 875 | 100 | 97 | 1 072 |
| Additional provisions | 1 029 | - | 86 | 1 115 |
| Used during year | (475) | - | (50) | (525) |
| Balance at 31 December 2007 | 1 429 | 100 | 133 | 1 662 |
Provisions balance includes the following matters:
Warranties - Liabilities related with third parties subcontracts in the supply of hardware for the TV and mobility businesses, to cover the client's warranty period.
Legal Disputes - Responsibilities with indemnities to third parties related with the legal disputes in progress. The payment of this liability depends on the conclusion of the mentioned legal actions (see note 38).
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Trade payables | 59 081 | 47 194 |
| Marketing | 54 | 1 856 |
| Personnel - remuneration, vacation and vacation subsidies | 6 866 | 5 563 |
| Bonus | 6 184 | 3 770 |
| Projects in progress | 8 906 | 6 723 |
| VAT | 8 461 | 7 762 |
| Social security contributions | 1 528 | 1 464 |
| Income tax withholding | 1 053 | 930 |
| Employees | 432 | 489 |
| Subscribers of share capital in subsidiaries | 537 | 1 394 |
| Retirement benefit obligations | 357 | 380 |
| Prepayments from clients | 269 | 706 |
| Other accruals | 5 398 | 2 413 |
| Other payables | 6 283 | 2 846 |
| 105 409 | 83 490 |
The fair value of Trade and other payables balance approximates it's carrying amount.
The maturity of trade and other payables is as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Not later than 1 year | 105 409 | 83 490 |
| 105 409 | 83 490 | |
| 26. Deferred income and other current liabilities | ||
| This item is analysed as follows: | ||
| 31.12.07 | 31.12.06 | |
| Subsidies | ||
| - Research and development subsidies | 1 339 | 331 |
| - Training subsidies | 167 | 331 |
| Consulting projects | 15 541 | 14 762 |
| 17 047 | 15 424 |
In 2007, the group expected to receive some financial incentives to investment:
| Contracted | Received | |
|---|---|---|
| Amount | Amount | |
| Subsidies | ||
| - SIME – Sistema de Incentivos à Modernização Empresarial | 1 230 | - |
| - Portivity - Portable Interactivity | 240 | 164 |
| - NITEC - Sistema de Incentivos à Criação de Núcleos de Investigação e Desenvolvimento Tecnológico no Sector Empresarial |
81 | - |
| - Training projects | 365 | 250 |
| 1 916 | 414 |
External supplies and services heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Subcontracts | 18 988 | 19 033 |
| Supplies and Services : | ||
| Transportation and travel expenses | 7 255 | 6 055 |
| Commissions and consultancy fees | 7 322 | 7 187 |
| Specialised services | 3 593 | 2 214 |
| Rentals | 2 575 | 2 114 |
| Advertising and promotion | 2 214 | 12 120 |
| Merchandise transport | 2 322 | 1 663 |
| Royalties | 340 | 930 |
| Communications | 789 | 779 |
| Insurance | 695 | 748 |
| Water, electricity and fuel | 800 | 696 |
| Utility expenses | 223 | 448 |
| Other services | 2 470 | 1 754 |
| 30 598 | 36 708 | |
| 49 586 | 55 741 |
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Board members remuneration | 5 611 | 5 785 |
| Salaries and wages | 49 030 | 40 385 |
| Social security charges | 8 297 | 7 173 |
| Stock options attibuted | 168 | 518 |
| Other personnel expenses | 912 | 1 055 |
| 64 018 | 54 916 |
| 31.12.07 | 31.12.06 | |
|---|---|---|
| 'Novabase Consulting' | 975 | 862 |
| 'Novabase Engineering' | 287 | 261 |
| 'Digital TV' | 302 | 244 |
| 'Novabase Capital' : | 1 | 21 |
| 'Staff' | 85 | 89 |
| 1 650 | 1 477 |
| 31.12.07 | 31.12.06 | |
|---|---|---|
| (i) Gain on financial participation disposals |
823 | 1 085 |
| Client impairment and reversal of client impairment | (347) | (1 170) |
| Inventories impairment and reversal of inventories impairment | (1 845) | (2 426) |
| Warranties provisions | (552) | (607) |
| Other Provisions | (36) | 89 |
| Other | 609 | 136 |
| (1 348) | (2 893) |
(i) In the first half of 2006, the 50.001% financial holding on Manchete was disposed by the group, by the total amount of EUR 1 500 thousand. This amount is totally received as at 31 December 2006.
The following subsidiary assets and liabilities were disposed:
| Manchete | |
|---|---|
| Cash and cash equivalents | 68 |
| Tangible fixed assets | 117 |
| Intangible fixed assets | 10 |
| Trade, other receivables and income accrual | 475 |
| Other current assets | 17 |
| Borrowings | (62) |
| Provisions for other risk and charges | (1) |
| Trade, other payables and deferred income | (214) |
| Expense accruals | (74) |
| Net assets | 336 |
In 2007, the subsidiary Collab issued share capital in EUR 11 thousand, with a premium fully subscribed of some EUR 1 689 thousand. The group did not subscribe the shares issued, what resulted in a dilution of the financial holding of the group from 55.4% to 50.7%. However, with this operation the group had a gain of EUR 823 thousands.
Depreciation and amortisation heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Property plant and equipment Depreciation: | ||
| Buildings and other constructions | 527 | 141 |
| Basic equipment | 989 | 1 033 |
| Transport equipment | 1 362 | 1 582 |
| Tools and utensils | 75 | 48 |
| Furniture, fittings and equipment | 286 | 267 |
| Other tangible fixed assets | 31 | 58 |
| 3 270 | 3 129 | |
| Intangible fixed assets Amortisation : | ||
| Internally generated intangible assets | 1 636 | 989 |
| Industrial property and other rights | 1 258 | 1 452 |
| 2 894 | 2 441 | |
| 6 164 | 5 570 | |
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Interest received | 1 295 | 494 |
| Net income on the disposal of financial assets | 267 | - |
| Positive exchange differences | 2 181 | 1 406 |
| Other financial gains | 2 | 30 |
| 3 745 | 1 930 |
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Interest paid | ||
| - Loans | (1 982) | (898) |
| - Interest on leasing contracts | (422) | (403) |
| - Factoring interest | (1 379) | (652) |
| - Other interest | (43) | (43) |
| Bank guarantees charges | (229) | (143) |
| Bank services | (157) | (166) |
| Negative exchange differences | (2 920) | (2 172) |
| Other financial losses | (96) | (139) |
| (7 228) | (4 616) |
This heading is analysed as follows:
| Profit / (Loss) | |||
|---|---|---|---|
| 31.12.07 | 31.12.06 | ||
| Mind, S.A. | - | (398) | |
| Fundo Capital Risco and subsidiaries | (34) | 25 | |
| Key Lab | 9 | (24) | |
| (25) | (397) |
This heading is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Current tax | 1 085 | 930 |
| Deferred tax due to timing differences | (1 026) | (852) |
| 59 | 78 |
Group income tax for the year differs from that obtained when using the holding company's country average tax rate as a result of:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Profit before tax | 10 350 | 5 522 |
| Income tax at nominal rate | 2 588 | 1 519 |
| Fiscal benefits from work creation | (287) | (216) |
| Provisions and amortisations not considered for fiscal purposes | 188 | 193 |
| Deferred tax recognition on provisions from previous periods | (38) | (443) |
| Subsidiary disposals | (217) | (298) |
| Autonomous taxation | 368 | 316 |
| Losses in companies where no deferred tax is recognised | 90 | - |
| Expenses not deductible for tax purposes | 150 | 99 |
| Difference from foreign companies income tax rate | (199) | (78) |
| R&D fiscal benefits | (3 554) | (1 476) |
| Income tax adjustment due to changes in legislation | - | 569 |
| Impairment of deferred taxes | 339 | - |
| Impairment of other taxes | 117 | - |
| Provision for legal disputes | 383 | - |
| Other | 131 | (107) |
| Income tax | 59 | 78 |
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company (Note 19).
Each share diluted result is calculated by adjusting the average weighted number of ordinary shares, in order to consider the conversion of all the potentials dilutive ordinary shares. Novabase has just one type of potential ordinary dilutive shares: stock options. It was decided that the number of shares to be acquired at its fair value by the weighted average of the Novabase shares market price. This number of shares was compared with the number of shares that would be issued if all the options were exercised.
This item is analysed as follows:
| 31.12.07 | 31.12.06 | |
|---|---|---|
| Weighted average number of ordinary shares in issue | 30 896 263 | 30 286 549 |
| Stock options adjustment | - | 98 731 |
| Adjusted weighted average number of ordinary shares in issue | 30 896 263 | 30 385 280 |
| Profit from continuing operations attributable to equity holders of the Company | 6 997 | 5 101 |
| Basic earnings per share (euro per share) | 0.23 euros | 0.17 euros |
| Diluted earnings per share (euro per share) | 0.23 euros | 0.17 euros |
| Profit from discontinued operations attributable to equity holders of the Company | - | 68 |
| Basic earnings per share (euro per share) | - | - |
| Diluted earnings per share (euro per share) | - | - |
The financial commitments not included in the balance sheet are bank guarantees provided to third parties for ongoing projects,
| Bank | 31.12.07 | 31.12.06 | |
|---|---|---|---|
| Novabase S.G.P.S. | BPI | 101 | 169 |
| Novabase S.G.P.S. | BES | 5 500 | 3 000 |
| Novabase Consulting, S.A. | BPI | 1 734 | 1 073 |
| Novabase Consulting, S.A. | BES | 5 004 | 4 956 |
| Novabase B. I., S.A. | BPI | 5 | 100 |
| Novabase B. I., S.A. | BES | - | 11 |
| NBO Recursos em TI | BPI | 523 | - |
| Novabase A. C. D., S.A. | BPI | - | - |
| Novabase Serviços, S.A. | BPI | 405 | 399 |
| Novabase Serviços, S.A. | BES | 371 | - |
| Manchete, S.A. | BPN | - | 9 |
| SAF, S.A. | BPI | 10 | 6 |
| Novabase Core Fin. Software Sol., S.A. | BPI | 2 | 1 |
| CelFocus, S.A. | BPI | - | 417 |
| COLLAB – Sol. I. Com. e Colab., S.A. | BPI | 152 | - |
| Octal - Engenharia de Sistemas, S.A. | BCP | 1 159 | 910 |
| Octal - Engenharia de Sistemas, S.A. | BES | 21 | 21 |
| Octal - Engenharia de Sistemas, S.A. | COSEC | - | 98 |
| Novabase IIS, S.A. | BNP PARIBAS | - | 10 |
| Novabase IIS, S.A. | BES | 1 205 | 1 023 |
| Novabase IIS, S.A. | BCP | 13 | 10 |
| Novabase Infr. Integracion S. Inf., S. A. | BESSA | 224 | - |
| Novabase Infr. Integracion S. Inf., S. A. | BES | - | 66 |
| Gedotecome, Lda. | BCP | 19 | 35 |
| Octal TV , S.A. | BCP | 26 | 26 |
| Octal TV , S.A. | BBVA | 237 | 237 |
| Novabase Consulting Espanha, S.A. | BBVA | - | 34 |
| Novabase Consulting Espanha, S.A. | BESSA | 11 | - |
| Octal 2 Mobile | BBVA | 4 500 | 4 500 |
| 21 222 | 17 111 |
The commitments detailed above includes bank garantees in the amount of EUR 5 500 thousand issued from Novabase S.G.P.S. to the associated TT AG, in order to guarantee the loans made by this company.
In the 2007, the Group had the following grouped credit lines contracted:
| Credit line | |
|---|---|
| Group of companies | (Millions €) |
| NB SGPS; NB Serviços; NB IIS; Octal 2 Mobile; NB IDTV; Octal; NB Consulting | 10.0 |
| NB SGPS; NB Consulting; NB EA; Octal; NB Serviços; NB BI; NB ACD; NBO NB Capital | 7.0 |
| NB IIS; Octal 2 Mobile; Octal; TV Lab | 4.5 |
| Octal; NB IIS; Octal2Mobile | 5.0 |
| NB SGPS; Octal; NB IIS; Octal2Mobile | 5.0 |
With the intention to stabilize its cash flows, the group uses full factoring transactions. As at 31.12.07, the amount transfered to factoring companies was EUR 13 402 thousand (2006: EUR 21 765 thousand).
The subsidiary Novabase Business Intelligence - Sistemas de Informação de Suporte à Decisão, Qualidade de Dados e Georeferenciação, S.A. disposed to the administrator and shareholder of its subsidiary COLLAB - Soluções Informáticas de Comunicação e Colaboração S.A., Pedro Gustavo Cabrita Quintas, 4 250 shares of the company by EUR 150 each. The payment was diferred for a period until 6 months, and an early termination clause was provided in the sale and purchase agreement in case
For reporting purposes, related party consider subsidiaries, associated companies, shareholders with management influence and key elements in the Group management.
| i) Sales of goods and services |
||
|---|---|---|
| 31.12.07 | 31.12.06 | |
| BES group | 16 354 | 16 719 |
| 16 354 | 16 719 | |
| The above identified transactions were performed at arms length. | ||
| ii) Purchases of goods and services |
||
| 31.12.07 | 31.12.06 | |
| BES group | 174 | 55 |
| 174 | 55 | |
| iii) Key management compensation |
||
| 31.12.07 | 31.12.06 | |
| Salaries and other short-term employee benefits | 5 586 | 5 760 |
| Post-employment benefits | 25 | 25 |
| 5 611 | 5 785 | |
| iv) Balances arising from sales/purchases of goods/services |
||
| 31.12.07 | 31.12.06 | |
| Receivables from related parties: | ||
| BES group | 7 796 | 6 737 |
| 7 796 | 6 737 | |
| Payables from related parties: | ||
| BES group | 19 | - |
| 19 | - |
At 31 December 2007 and 31 December 2006, no provisions for loans provided to associates were considered necessary.
| 31.12.07 | 31.12.06 | |
|---|---|---|
| BES group | 3 400 | 5 100 |
| vi) Bank deposits and finance investments (including 'overdrafts') |
||
| 31.12.07 | 31.12.06 | |
| BES group | 1 084 | 7 716 |
| vii) Interests paid on loans to related parties | ||
| 31.12.07 | 31.12.06 | |
| BES group | 272 | 266 |
On 31 December 2007 the Group was part intervenient in the following processes:
(i) Capital increase and subsequent beginning of the legal procedures to the cessation of activities in mobility solutions business
In 2007, the subsidiary Octal2Mobile reached a negative net equity in the amount of EUR 1 Million, so the group has decided in February 2008 to subscribe a share capital increase in the amount of EUR 2 Millions to finance the subsidiary activity.
In March 14, 2008, the group comunicate to the market that the Iberic distribution contract celebrated in 2006 by Octal2Mobile with HTC (High Tech Computer Corp) was not renewed. By decision of the Board of Directors, the group has decided to initiate the legal procedures to the cessation of activity in mobility solutions area. This was considered an inevitable decision in the present strategic and financial conditions of the business. At the present date, the activity of this business was the supply of systems and solutions in the mobile comunications area.
(ii) Novabase acquire 60% of the GLOBALEDA; Novabase signs with EDA an Outsourcing Contract of EUR 11.5 Millions
Novabase Consulting acqurired to EDA - Electricidade dos Açores, S.A. 60% of the company GLOBALEDA - Telecomunicações e Sistemas de Informação, S.A. by the amount of EUR 0.9 Millions. Simultaneously, Novabase signed with EDA a global outsourcing contract in information technologies by EUR 11.5 Millions, for 6 years and an anual fee of EUR 1.9 Millions. In the end of the contract, EDA has a purchase option for the 60% of the GLOBALEDA, at the net book value of the company on that date.
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II. SUPERVISORY BOARD AND AUDITORS REPORT IN RESPECT OF THE CONSOLIDATED FINANCIAL INFORMATION (Page left intentionally blank)
Dear Shareholders,
Pursuant to the law, the mandate from our shareholders and the provisions of Article 423-F, Item g) of the Portuguese Company Code, we now present a brief summary of our supervisory activities, together with our opinion on the Annual Report and Consolidated Financial Statements presented by the Novabase SGPS, SA Board of Directors for the year ending 31 December 2007.
Over the course of 2007, the Audit Committee held various formal meetings, informal ad-hoc meetings and meetings with Novabase management to supervise the following:
The Consolidated Annual Report accurately, clearly and fully reflects the most significant aspects of the Company's business and financial situation; similarly, all existing risks of both an operational and financial nature have been duly identified; and
The Consolidated Financial Statements and corresponding Annex truly and fairly reflect the Company's financial situation.
Therefore, in light of the information received from the Board of Directors and the Company's various departments, together with the conclusions of the Statutory Auditors Report, it is our opinion that:
Lisbon, 03 April 2008
The Audit Committee
Luis Mira Amaral (Chairman)
João Quadros Saldanha (Member)
Manuel Alves Monteiro (Member)
PricewaterhouseCoopers & Associados - Sociedade de Revisores Oficiais de Contas, Lda. Palácio Sottomayor Rua Sousa Martins, 1 - 3º 1069-316 Lisboa Portugal Tel +351 213 599 000 Fax +351 213 599 999
(Free translation from the original version in Portuguese)
1 As required by law, we present the Statutory Auditors Report in respect of the Consolidated Financial Information included in the Board of Directors' Report and the consolidated financial statements of Novabase SGPS, SA, comprising the consolidated balance sheet as at 31 December 2007, (which shows total assets of Euros 257.597 thousand, total minority interests of Euros 13.641 thousand and a total shareholder's equity of Euros 114.502 thousand including a net profit of Euros 6.997 thousand), the consolidated statement of income by nature, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended and the corresponding notes to the accounts.
2 It is the responsibility of the Company's Board of Directors (i) to prepare the Directors' Report and consolidated financial statements which present fairly, in all material respects, the financial position of the company and its subsidiaries, the consolidated changes in equity, the consolidated result of their operations and their consolidated cash flows; (ii) to prepare historic financial information in accordance with International Financial Reporting Standards as adopted by the EU and which is complete, true, timely, clear, objective and licit, as required by the Portuguese Securities Market Code; (iii) to adopt adequate accounting policies and criteria; (iv) to maintain appropriate systems of internal control; and (v) to disclose any relevant matters which have influenced the activity, the financial position or results of the company and its subsidiaries.
3 Our responsibility is to verify the consolidated financial information included in the documents referred to above, namely if it is complete, true, timely, clear, objective and licit, as required by the Portuguese Securities Market Code, and to issue an independent and professional report based on our audit.
Novabase SGPS, SA
4 We conducted our examination in accordance with the Standards and Technical Recommendations approved by the Institute of Statutory Auditors which require that we plan and perform the examination to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. Accordingly, our examination included: (i) verification that the subsidiary's financial statements have been properly examined and for the cases where such an examination was not carried out, verification, on a sample basis, of the evidence supporting the amounts and disclosures in the consolidated financial statements, and assessing the reasonableness of the estimates, based on the judgements and criteria of Management used in the preparation of the consolidated financial statements; (ii) verification of the consolidation operations, and, when applicable, the utilization of the equity method; (iii) assessing the appropriateness and consistency of the accounting principles used and their disclosure, as applicable; (iv) assessing the applicability of the going concern basis of accounting; (v) assessing the overall presentation of the consolidated financial statements; and (vi) assessing whether the consolidated financial information is complete, true, timely, clear, objective and licit.
5 Our examination also covered the verification that the consolidated financial information included in the Board of Director's report is in agreement with the remaining documents referred to above.
6 We believe that our examination provides a reasonable basis for our opinion.
7 In our opinion, the consolidated financial statements referred to above, present fairly in all material respects, the consolidated financial position of Novabase SGPS, SA as at 31 December 2007, the consolidated results of their operations and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU and the information included is complete, true, timely, clear, objective and licit.
Lisbon, 3 April 2008
PricewaterhouseCoopers & Associados, S.R.O.C., Lda. represented by:
Abdul Nasser Abdul Sattar, R.O.C.
III. SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY THE BOARD MEMBERS
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| Share Capital |
Total nº of shares |
Shares held by board members at 31.12.06 |
Transactions | Shares held by board members at 31.12.07 |
% of shares held by board members |
|
|---|---|---|---|---|---|---|
| Novabase SGPS, S.A. | 15 700 697 | 31 401 394 | 11 332 395 | 5 000 | 11 337 395 | 36.1% |
| José Afonso Oom Ferreira de Sousa | 2 498 746 | 0 | 2 498 746 | 8.0% | ||
| Pedro Miguel Quinteiro M. de Carvalho | 2 498 697 | 0 | 2 498 697 | 8.0% | ||
| Rogério dos Santos Carapuça | 1 884 787 | 0 | 1 884 787 | 6.0% | ||
| Luís Paulo Cardoso Salvado | 1 786 790 | 0 | 1 786 790 | 5.7% | ||
| João Nuno da Silva Bento | 1 783 563 | 0 | 1 783 563 | 5.7% | ||
| Álvaro José da Silva Ferreira | 804 866 | 0 | 804 866 | 2.6% | ||
| Manuel Saldanha Tavares Festas | 74 946 | 0 | 74 946 | 0.2% | ||
| Manuel Alves Monteiro | 0 | 5 000 | 5 000 | 0.0% | ||
| CelFocus | 100 000 | 100 000 | 3 | 0 | 3 | 0.0% |
| Paulo Jorge Barros Pires Trigo | 1 | 0 | 1 | 0.0% | ||
| Francisco Manuel Martins Pereira do Valle | 1 | 0 | 1 | 0.0% | ||
| José Afonso Oom Ferreira de Sousa | 1 | 0 | 1 | 0.0% | ||
| COLLAB – Sol. I. Com. e Colab., S.A. | 50 000 | 50 000 | 18 750 | 0 | 18 750 | 37.5% |
| Álvaro José da Silva Ferreira | 7 500 | 0 | 7 500 | 15.0% | ||
| João Nuno da Silva Bento | 7 500 | 0 | 7 500 | 15.0% | ||
| Pedro Cabrita Quintas | 3 750 | 0 | 3 750 | 7.5% | ||
| ES IT International Trade & Services, S.A. | 200 000 | 2 000 | 1 | 0 | 1 | 0.1% |
| José Afonso Oom Ferreira de Sousa | 1 | 0 | 1 | 0.1% | ||
| NB Advanced Custom Development, S.A. | 750 000 | 750 000 | 8 753 | 0 | 8 753 | 1.2% |
| João Pedro Silva | 8 753 | 0 | 8 753 | 1.2% | ||
| Novabase Consulting SGPS, S.A. | 10 675 498 | 10 675 498 | 394 117 | 0 | 394 117 | 3.7% |
| João Rafael Leitão Ivo da Silva | 105 687 | 0 | 105 687 | 1.0% | ||
| Luís Miguel Mota da Cunha Lobo | 107 299 | 0 | 107 299 | 1.0% | ||
| Nuno Carlos Dias Santos Fórneas | 67 362 | 0 | 67 362 | 0.6% | ||
| Pedro Miguel Correia Vala Chagas | 113 769 | 0 | 113 769 | 1.1% | ||
| Novabase Infraestruturas, SGPS, S.A. | 50 000 | 5 000 000 | 419 993 | 0 | 419 993 | 8.4% |
| Miguel Vicente | 381 812 | 0 | 381 812 | 7.6% | ||
| Luís Dias | 38 181 | 0 | 38 181 | 0.8% | ||
| Novabase International Solutions, B.V. | 18 000 | 18 000 | 0 | 720 | 720 | 4.0% |
| Paulo Jorge Barros Pires Trigo | 0 | 720 | 720 | 4.0% | ||
| SAF | 325 000 | 325 000 | 24 375 | 0 | 24 375 | 7.5% |
| Mário Jacinto S. Oliveira L. Figueira | 24 375 | 0 | 24 375 | 7.5% | ||
| Tecnhotrend AG | 5 263 320 | 5 263 320 | 674 668 | (674 668) | 0 | 0.0% |
| Heiko Kieser | 654 332 | (654 332) | 0 | 0.0% | ||
| Michael Pauli | 20 336 | (20 336) | 0 | 0.0% | ||
| Tecnhotrend Holding, B.V. | 97 295 | 9 729 470 | 3 500 000 | 747 391 | 4 247 391 | 43.7% |
| Heiko Kieser | 3 110 300 | 579 384 | 3 689 684 | 37.9% | ||
| Michael Pauli | 389 700 | 18 007 | 407 707 | 4.2% | ||
| Miguel Rolo | 0 | 150 000 | 150 000 | 1.5% | ||
| TV Lab, S.A. | 525 000 | 525 000 | 26 250 | 0 | 26 250 | 5.0% |
| António Precatado | 26 250 | 0 | 26 250 | 5.0% |
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Rogério dos Santos Carapuça, married, bearer of personal identification card no. 5032603, taxpayer identification no. 169184633, residing at Rua Paulo da Gama, nº9, Lisbon, hereby attests the following to the best of his knowledge, as Chairman and CEO of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Rogério dos Santos Carapuça
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Pedro Miguel Quinteiro Marques de Carvalho, married, bearer of personal identification card no. 6944162, taxpayer identification no. 165287659, residing at Rua Alberto Villa Verde Cabral, nº1C - 2ºEsq., Lisbon, hereby attests the following to the best of his knowledge, as Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Pedro Miguel Quinteiro Marques de Carvalho
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, José Afonso Oom Ferreira de Sousa, married, bearer of personal identification card no. 5322170, taxpayer identification no. 136872425, residing at Rua Tomás de Figueiredo, nº14 – 3º., Lisbon, hereby attests the following to the best of his knowledge, as Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
José Afonso Oom Ferreira de Sousa
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Luís Paulo Cardoso Salvado, single, bearer of personal identification card no. 7886567, taxpayer identification no. 183165900, residing at Rua Sarmento de Beires, nº45 – 13B, Lisbon, hereby attests the following to the best of his knowledge, as Chief Financial Officer of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Luís Paulo Cardoso Salvado
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, João Nuno da Silva Bento, married, bearer of personal identification card no. 7301557, taxpayer identification no. 128316853, residing at Alameda da Beloura, 25, Sintra, hereby attests the following to the best of his knowledge, as Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
João Nuno da Silva Bento
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Álvaro José da Silva Ferreira, divorced, bearer of personal identification card no. 9065596, taxpayer identification no. 196060630, residing at Rua António Livramento, 23, Lisboa, hereby attests the following to the best of his knowledge, as Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Álvaro José da Silva Ferreira
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Manuel Saldanha Fortes Tavares Festas, married, bearer of personal identification card no. 6252233, taxpayer identification no. 185591663, residing at Rua Gregório Lopes, nº24 – 10ºEsq., Lisboa, hereby attests the following to the best of his knowledge, as Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Manuel Saldanha Fortes Tavares Festas
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Joaquim Manuel Jordão Sérvulo Rodrigues, married, bearer of personal identification card no. 5330655, taxpayer identification no. 109515170, residing at Rua S. Francisco Xavier, 104, Lisboa, hereby attests the following to the best of his knowledge, as non executive Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Joaquim Manuel Jordão Sérvulo Rodrigues
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Luís Fernando de Mira Amaral, married, bearer of personal identification card no. 1305560, taxpayer identification no. 122745396, residing at Av. Eng. Arantes e Oliveira, nº22 – 7ºD, Lisboa, hereby attests the following to the best of his knowledge, as independent Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Fernando de Mira Amaral
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, Manuel Fernando de Macedo Alves Monteiro, married, bearer of personal identification card no. 3448279, taxpayer identification no. 158731093, residing at Avenida Tenente Coronel José Pessoa, 21, Cascais, hereby attests the following to the best of his knowledge, as independent Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
Manuel Fernando de Macedo Alves Monteiro
To whom it may concern,
For the purposes of the provisions of Article 245 (1) (c) of the Portuguese Securities Code, João Francisco Ferreira de Almada e Quadros Saldanha, married, bearer of personal identification card no. 6220120, taxpayer identification no. 192289012, residing at Rua Soldados Índia, 60, Lisboa, hereby attests the following to the best of his knowledge, as independent Member of the Board of Novabase, SGPS, S.A.:
The information contained in the Annual Report and Accounts, the legal certification of accounts and other accounting documents required by law or regulations concerning the financial year ending 31 December 2007, was prepared in accordance with applicable accounting standards, and truly and fairly reflects the assets and liabilities, financial position and results of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter.
Moreover, the Annual Report for this financial year truthfully reflects the development of the business, performance and position of Novabase, SGPS, S.A. and the companies included in its consolidation perimeter, specifically containing an accurate description of the primary risks and uncertainties faced by these companies.
Lisbon, 7 April 2008
João Francisco Ferreira de Almada e Quadros Saldanha
Av. D. João II, Lote 1.03.2.3, Parque das Nações 1998-031 Lisboa – Portugal Tel. +351 213 836 300 Fax +351 213 836 301
52 Relatório e Contas Novabase 2007 52
[email protected] www.novabase.pt
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