Annual Report • Mar 27, 2015
Annual Report
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'14
Part I – Shareholding Structure, Organisation and Corporate Governance
Part II – Statement of Compliance
Part III – Analysis of Compliance with the Adopted Corporate Governance Code
Appendix I
Appendix II
Appendix III
1.1. Group at a glance 1.2. Corporate developments in 2014
1.3. Proposal for the application of results
Sonaecom is a sub-holding of the Sonae Group for the telecommunications and information technology areas, created in 1994 and first quoted on Euronext Lisbon in 2000.
Prior to the merger of Optimus and Zon, in August 2013, the portfolio of the company was composed by two business units: Optimus, an integrated telecommunications operator in Portugal and the Software and Information Systems area (SSI). The company also operated in the Online and Media segment, with a number of businesse newspaper which has been published in Portugal for 25 years.
After the merger between Zon and Optimus, Sonaecom reached a relevant holding in an integrated telecommunications group the NOS Group which constitutes the main asset in its holdings portfolio.
Sonaecom holds a participation of 50% in ZOPT, SGPS, S.A., which in turn holds 50.01% of the share capital of NOS, SGPS, S.A. (NOS). Additionally, Sonaecom also had, until 25 February 2014, a direct stake of 7.28% in the capital of NOS.
The first half of 2014 was marked by Sonaecom tender offer for the acquisition of own shares. Following the merger between Optimus and Zon, give the option to its shareholders to sell, in equal standing conditions, their Sonaecom shares for by enabling direct exposure of Sonaecom shareholders to NOS, the reference asset of Sonaecom portfolio. Following the tender offer, in NOS was reduced to 2.14%.
Sonaecom is an entrepreneurial growth company that chooses exceptional people to work and unlock their full potential. Sonaecom relentlessly pursues the creation of innovative products, services and solutions that fulfil the needs of its markets and generate superior economic value.
Our fundamental commitment is to create economic value founded on the principles of ethical business practice and sustainable development. We take a long-term strategic view based on stakeholder relationships built around confidence and trust.
We develop the competencies and capabilities of every Sonaecom employee through fresh challenges, an appetite for change and teamwork. Supported by an internal culture that promotes meritocracy, we believe these factors are crucial to attracting, retaining and developing people with outstanding talent and potential.
As our guiding force, the strength of our ambition is reflected in the way we continuously challenge ourselves to remain resilient and determined in our efforts to improve our capabilities and add value to our clients.
Innovation is the lifeblood of our business. By continuously challenging conventions, we consistently surprise the market. We believe that failure can also be a source of learning. At the same time, we are aware that it is important to balance mistakes within acceptable risk limits.
We have an active sense of social responsibility. With a strong concern for the environment and the development of human knowledge, fulfilling this responsibility involves helping to improve the lives of the communities around us.
We value efficiency and healthy competition, and continuously strive to optimise the use of our resources while maximising their returns.
We take a position of independence and autonomy in relation to central and local government. That said, we are always ready to co-operate with the authorities to improve the regulatory, legislative and social environment.
On 23 and 24 January 2014, under terms previously authorized by the Portuguese Securities Market Commission, CMVM, Sonae SGPS, S.A. (Sonae) acquired over the counter 1,454,134 Sonaecom shares from Sonaecom directors and related parties.
The consideration of this acquisition was determined and settled on 20 February 2014, the date of calculation of the results of the tender offer, by the same amount paid to the shareholders who accepted the offer. Following this transaction, Sonae became the direct holder of 78,133,508 shares and the indirect holder of 194,063,119 shares, representative of share capital and voting rights, giving Sonae a total participation of 272,196,627 Sonaecom shares.
On 5 February 2014, Sonaecom made public the decision to launch a general and voluntary tender offer for the acquisition of shares representing the share capital of Sonaecom.
The offer was general and voluntary, with the offerer obliged to acquire all the shares that were the object of the offer and were, until the end of the respective period, subject to valid acceptance by the recipients.
The period of the offer, during which sales orders were received, ran for two weeks, beginning on 6 February and ending on 19 February 2014.
On 20 February 2014, the results of the offer were released. The level of acceptance reached 62%, corresponding to 54,906,831 Sonaecom shares. Euronext announced Sonaecom exclusion from the PSI-20 from 24 February 2014.
The physical and financial settlement of the offer occurred on 25 February 2014, being the consideration of the offer composed by 26,476,792 NOS shares and 19,631 euros.
Following the offer, Sonaecom became the holder of 11,012,532 NOS
On 28 February 2014, Goldman Sachs Inc. informed Sonaecom about the reduction of its qualifying holding on 25 February 2014 from 2.12% to 0.79% of its share capital, corresponding to 2,881,353 shares and voting rights.
he agenda, namely: 1. To decide on the appointment of members to fulfil the vacant seats that may exist in the corporate bodies on the date of the General Meeting;
ear ended 31 December 2013;
Decide on the proposed appropriation of the Net Results for year ended 31 December 2013;
Assess the management and audit of the Company;
Discuss and approve the document setting out the proposed remuneration policy t bodies and to persons discharging managerial responsibilities, as well as on the plan to grant shares and its respective regu
Authorise the purchase and sale of own shares up to the limit of 10%, as permitted by Portuguese Company Law;
Authorise both purchasing or holding of shares of the Company by affiliated companies, under the terms of Article 325-B of Portuguese Company Law.
rd of Directors was reduced from 11 to 3 m Teixeira de Azevedo and António Bernardo Aranha da Gama Lobo Xavier.
Sonae informed Sonaecom on several acquisitions, from 24 February to 17 July 2014, of shares representing the share capital and voting rights of Sonaecom. After the completion of these transactions, Sonae is the direct holder of 81,022,964 shares of Sonaecom, being the 194.063.119 voting rights corresponding to the shares held by its subsidiary Sonae Investiments, B.V. also attributable to it.
On 18 July 2014, Sonaecom acquired a 60% share capital stake on S21Sec, one more bet in the growing IT Security market. S21Sec is a multinational, with headquarters in Spain high-value digital assets: data, operations and corporate image. With own products/platforms the company acts with a special focus on antifraud and e-crime in various segments like government, energy and other critical infrastructures, financial entities and telecommunications.
On 22 September 2014, Sonaecom announced that its subsidiary Sonaecom Sistemas de Informação, SGPS, S.A. has reached to an agreement with NOS, to sell the total share capital of Mainroad Serviços em Tecnologias de Informação, S.A., a leading company in Portugal in the area of information technology, holding two data centres one in Porto and another in Lisbon and offering a full set of services business continuity, cloud computing and IT managed services. The transaction became effective on 30 September 2014.
The Board of Directors proposes that the net income in Sonaecom Individual accounts, in the amount of 5,820,800.19 euros be transferred as follows:
The Board of Directors also proposes that an amount of 8,449,354.32 euros from Other Reserves to be paid to shareholders.
It was also approved that, considering that it will not be possible to determine precisely the number of own shares that will be held by the company on
2.4. Sonaecom individual results in 2014
Consolidated turnover in 2014 reached 122.3 million euros, increasing 8.1% when compared to 2013, or 3.5% excluding S21Sec contribution. This rise was fuelled by an increase of 16.8% in product sales and an increase of 4.5% in service revenues (or 10.9% and 0.4%, excluding S21Sec contribution).
Operating costs amounted to 117.5 million euros, 8.5% above 2013. The level of personnel costs increased 11.0% mainly driven by S21Sec headcount. Commercial costs grew 19.3%, to 33.8 million euros, driven by SSI increase in cost of goods sold, aligned with product sales evolution. As for other operating costs, the 1.6% decline is mainly explained by a lower level of provisions and outsourcing costs.
Total EBITDA stood at 36.3 million euros, up by 36.5% when compared to 2013, primarily as a result of discontinued operations, as equity results lines and underlying EBITDA decreased by 5.0% and 9.2%, respectively. The equity results were mostly impacted by ZOPT contribution, which in turn depends on NOS net income evolution. On what concerns the underlying EBITDA, it stood at 7.7 million euros, corresponding to a margin of 6.3%, which compares to 7.4% in 2013. This evolution is mainly driven by the higher weight of equipment sales, which generates lower margins.
EBIT increased 41.4% y.o.y. to 29.1 million euros, fully explained by the higher EBITDA.
Net financial results stood at negative 1.3 million euros in 2014, impacted by the adjustment of NOS fair value at market price, contributing with a negative 3.1 million euros, despite the 1.3 million euros received in dividends, as a result of the 2.14% direct stake at NOS share capital. In 2013, the adjustment of NOS fair value was positive by 46.6 million euros.
27.8 million euros, fully driven by the lower net financial results. Net results group share stood at 28.0 million euros, which compares with 75.7 million euros in 2013.
Operating CAPEX
decreased from 7.4 million euros to 6.9 million euros, reaching 5.6% of Sales.
Gross debt totalled 11.8 million euros, versus 25.9 million euros in 2013. The reported Gross debt includes S21Sec total Gross debt in the amount of 10.5 million euros. We highlight that Sonaecom holds a 60% stake in S21Sec.
Net debt reached a very comfortable negative 170.2 million euros, i.e., a positive cash position.
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED INCOME STATEMENT | 4Q13(R) | 4Q14 | 3Q14 | q.o.q. | 2013(R) | 2014 | ||
| Turnover | 26.4 | 32.1 | 21.8% | 31.8 | 1.2% | 113.2 | 122.3 | 8.1% |
| Service Revenues | 18.3 | 22.7 | 24.3% | 20.6 | 10.1% | 80.1 | 83.7 | 4.5% |
| Product Sales | 8.1 | 9.4 | 16.2% | 11.1 | -15.3% | 33.0 | 38.6 | 16.8% |
| Other Revenues | 0.9 | 0.6 | -30.9% | 1.6 | -62.0% | 3.5 | 2.9 | -18.6% |
| Operating Costs | 24.5 | 29.9 | 22.2% | 30.9 | -3.3% | 108.3 | 117.5 | 8.5% |
| Personnel Costs | 9.6 | 11.9 | 24.0% | 11.8 | 0.9% | 40.0 | 44.4 | 11.0% |
| Commercial Costs(1) | 6.3 | 7.5 | 19.2% | 9.8 | -23.8% | 28.3 | 33.8 | 19.3% |
| Other Operating Costs(2) | 8.6 | 10.5 | 22.3% | 9.3 | 13.1% | 39.9 | 39.3 | -1.6% |
| EBITDA | 0.4 | 2.3 | - | 22.4 | -89.7% | 26.6 | 36.3 | 36.5% |
| Underlying EBITDA(3) | 2.8 | 2.8 | 2.0% | 2.4 | 17.4% | 8.4 | 7.7 | -9.2% |
| Equity method(4) | -2.7 | -0.5 | 79.8% | 7.3 | - | 16.6 | 15.7 | -5.0% |
| Discontinued Operations(5) | 0.3 | 0.0 | -100.0% | 12.6 | -100.0% | 1.6 | 12.9 | - |
| Underlying EBITDA Margin (%) | 10.6% | 8.9% | -1.7pp | 7.6% | 1.2pp | 7.4% | 6.3% | -1.2pp |
| Depreciation & Amortization | 1.2 | 2.3 | 88.5% | 1.7 | 34.0% | 6.0 | 7.1 | 19.7% |
| EBIT | -0.8 | 0.0 | - | 20.6 | -100.0% | 20.6 | 29.1 | 41.4% |
| Net Financial Results | 37.6 | 4.6 | -87.8% | 0.3 | - | 58.8 | -1.3 | - |
| Financial Income | 38.6 | 0.4 | -99.0% | 0.7 | -43.8% | 70.8 | 4.4 | -93.8% |
| Financial Expenses | 1.0 | -4.2 | - | 0.4 | - | 12.0 | 5.7 | -52.4% |
| EBT | 36.8 | 4.6 | -87.5% | 21.0 | -78.2% | 79.4 | 27.8 | -65.0% |
| Tax results | -1.1 | -0.3 | 71.3% | -0.7 | 58.3% | -3.8 | -0.7 | 81.9% |
| Net Results | 35.7 | 4.3 | -88.0% | 20.3 | -78.9% | 75.6 | 27.1 | -64.2% |
| Group Share | 35.8 | 4.9 | -86.3% | 20.5 | -76.0% | 75.7 | 28.0 | -63.1% |
| Attributable to Non-Controlling Interests | -0.1 | -0.6 | - | -0.2 | - | -0.1 | -0.9 | - |
(1) Commercial Costs = COGS + Mktg& Sales Costs; (2)OtherOperating Costs = Outsourcing Services + G&A + Provisions +others; (3)Includes the businesses fully consolidated by Sonaecom; (4) Includes the 50% holding in Unipress, the 50% holding in Infosystems,the 45% holding in SIRS and the 50% holding in ZOPT; (5)Includes Mainroad contribution untilthe sale and the capital gain (R) The values were adjusted in orderto reflect, from1January 2013 onwards, Sonaecomstructure following themerger betweenOptimus and Zon and following theMainroad sale.
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED BALANCE SHEET | 4Q13 | 4Q14 | 3Q14 | q.o.q. | 2013 | 2014 | ||
| Total Net Assets | 1,227.1 | 1,095.8 | -10.7% | 1,080.6 | 1.4% | 1,227.1 | 1,095.8 | -10.7% |
| Non Current Assets | 767.3 | 792.5 | 3.3% | 773.1 | 2.5% | 767.3 | 792.5 | 3.3% |
| Tangible and Intangible Assets | 22.2 | 28.3 | 27.5% | 28.7 | -1.5% | 22.2 | 28.3 | 27.5% |
| Goodwill | 28.4 | 28.7 | 1.0% | 29.5 | -2.6% | 28.4 | 28.7 | 1.0% |
| Investments | 711.4 | 723.2 | 1.6% | 707.6 | 2.2% | 711.4 | 723.2 | 1.6% |
| Deferred Tax Assets | 5.2 | 6.8 | 31.5% | 7.1 | -3.2% | 5.2 | 6.8 | 31.5% |
| Others | 0.0 | 5.5 | - | 0.3 | - | 0.0 | 5.5 | - |
| Current Assets | 459.8 | 303.4 | -34.0% | 307.5 | -1.4% | 459.8 | 303.4 | -34.0% |
| Trade Debtors | 36.4 | 40.0 | 9.8% | 39.4 | 1.5% | 36.4 | 40.0 | 9.8% |
| Liquidity | 188.0 | 182.0 | -3.2% | 182.9 | -0.5% | 188.0 | 182.0 | -3.2% |
| Others | 235.3 | 81.3 | -65.4% | 85.2 | -4.6% | 235.3 | 81.3 | -65.4% |
| Shareholders' Funds | 1,136.8 | 1,023.9 | -9.9% | 1,004.3 | 1.9% | 1,136.8 | 1,023.9 | -9.9% |
| Group Share | 1,136.5 | 1,024.5 | -9.9% | 1,004.4 | 2.0% | 1,136.5 | 1,024.5 | -9.9% |
| Non-Controlling Interests | 0.3 | -0.6 | - | -0.1 | - | 0.3 | -0.6 | - |
| Total Liabilities | 90.3 | 72.0 | -20.3% | 76.4 | -5.8% | 90.3 | 72.0 | -20.3% |
| Non Current Liabilities | 29.3 | 13.2 | -55.0% | 18.4 | -28.1% | 29.3 | 13.2 | -55.0% |
| Bank Loans | 24.8 | 9.1 | -63.5% | 8.5 | 6.5% | 24.8 | 9.1 | -63.5% |
| Provisions for Other Liabilities and Charges | 3.1 | 2.6 | -15.7% | 3.0 | -13.3% | 3.1 | 2.6 | -15.7% |
| Others | 1.4 | 1.6 | 8.4% | 6.9 | -77.4% | 1.4 | 1.6 | 8.4% |
| Current Liabilities | 61.0 | 58.8 | -3.6% | 58.0 | 1.3% | 61.0 | 58.8 | -3.6% |
| Loans | 1.0 | 2.0 | 98.2% | 2.0 | 0.7% | 1.0 | 2.0 | 98.2% |
| Trade Creditors | 21.8 | 21.6 | -0.9% | 21.5 | 0.4% | 21.8 | 21.6 | -0.9% |
| Others | 38.2 | 35.2 | -7.8% | 34.5 | 2.0% | 38.2 | 35.2 | -7.8% |
| Operating CAPEX(1) | 3.3 | 2.2 | -34.5% | 1.9 | 16.3% | 7.4 | 6.9 | -7.7% |
| Operating CAPEX as % of Turnover | 12.5% | 6.7% | -5.8pp | 5.8% | 0.9pp | 6.6% | 5.6% | -1.0pp |
| Total CAPEX | 3.3 | 2.2 | -34.4% | 1.9 | 11.8% | 7.9 | 12.5 | 58.5% |
| Underlying EBITDA - Operating CAPEX | -0.5 | 0.7 | - | 0.6 | 20.9% | 1.0 | 0.8 | -19.9% |
| Gross Debt | 25.9 | 11.8 | -54.5% | 16.9 | -30.1% | 25.9 | 11.8 | -54.5% |
| Net Debt | -162.1 | -170.2 | -5.0% | -166.0 | -2.6% | -162.1 | -170.2 | -5.0% |
(1) Operating CAPEX excludes Financial Investments.
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| LEVERED FREE CASH FLOW | 4Q13(R) | 4Q14 | 3Q14 | q.o.q. | 2013(R) | 2014 | ||
| Underlying EBITDA-Operating CAPEX | -0.5 | 0.7 | - | 0.6 | 20.9% | 1.0 | 0.8 | -19.9% |
| Change in WC | -8.4 | 5.4 | - | -3.4 | - | -8.5 | 1.0 | - |
| Non Cash Items & Other | 0.0 | -1.4 | - | 0.2 | - | -0.5 | 1.4 | - |
| Operating Cash Flow | -8.9 | 4.7 | - | -2.7 | - | -8.0 | 3.1 | - |
| Investments | 0.0 | 0.0 | - | 14.0 | -100.0% | 113.8 | 7.7 | -93.2% |
| Dividends | 0.0 | 0.0 | - | 7.3 | -100.0% | 0.0 | 8.6 | |
| Own shares | 0.0 | 0.0 | - | 0.0 | - | -2.5 | 0.0 | 100.0% |
| Financial results | 1.0 | 0.0 | - | 1.0 | - | 16.6 | -0.3 | - |
| Income taxes | -0.8 | -0.1 | 90.8% | -0.7 | 89.5% | -3.1 | -1.1 | 63.8% |
| FCF(1) | -8.6 | 4.6 | - | 18.9 | -75.7% | 116.7 | 18.1 | -84.5% |
(1) FCF Levered after Financial Expenses but before Capital Flows and Financing related u p-front Costs. (R) The values were adjusted in orderto reflect, from 1January 2013 onwards, Sonaecom structure following the merger between Optimus andZon and following theMainroad sale.
| TOTAL RGUs | CONVERGENT RGUs | % 3, 4 & 5P Subscribers |
IRIS Subscribers |
|---|---|---|---|
| 7,610.5 thousands | 1,853.3 thousands | 81.4% | 693.6 thousands |
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| NOS PRO-FORMA HIGHLIGHTS | 4Q13 | 4Q14 | 3Q14 | q.o.q. | 2013 | 2014 | ||
| Operating Revenues | 356.3 | 353.8 | -0.7% | 347.8 | 1.7% | 1,426.8 | 1,383.9 | -3.0% |
| EBITDA | 118.3 | 113.5 | -4.0% | 133.4 | -14.9% | 536.6 | 510.5 | -4.9% |
| EBITDA margin (%) | 33.2% | 32.1% | -1.1pp | 38.4% | -6.3 pp | 37.6% | 36.9% | -0.7pp |
| Net Income | -13.1 | 12.3 | - | 18.8 | -34.6% | 63.4 | 74.7 | 17.8% |
| CAPEX | 80.7 | 142.5 | 76.7% | 86.6 | 64.6% | 269.5 | 374.4 | 38.9% |
| EBITDA-CAPEX | 37.6 | -29.0 | - | 46.8 | - | 267.1 | 136.1 | -49.0% |
| RECURRENT CAPEX | 77.1 | 83.2 | 7.9% | 68.0 | 22.3% | 261.4 | 275.8 | 5.5% |
| EBITDA-RECURRENT CAPEX | 41.2 | 30.3 | -26.4% | 65.4 | -53.6% | 275.2 | 234.7 | -14.7% |
NOS operating revenues were 1,383.9 million euros in 2014, and declined 3.0% when compared with 2013.
EBITDA reached 510.5 million euros, decreasing 4.9% when compared to 2013 and representing a 36.9% EBITDA margin. Recurrent CAPEX amounted to 275.8 million euros in 2014, an increase of 5.5% y.o.y.. As a consequence of EBITDA and CAPEX evolution,
EBITDA-Recurrent CAPEX decreased 14.7%.
Net Financial Debt to EBITDA stood at 1.9x at the end of 2014.
The average maturity of its Net Financial Debt was 2.63 years at the end of 2014.
NOS published its 2014 results on 26th February, 2015, which are available at www.nos.pt.
Subsequent to the merger between Optimus and ZON (currently NOS), and since the day in which new shares issued were listed, on 9 rresponding to a share price increase from 0
its market capitalisation by 26.8%.
During 2014, SSI took solid steps in the wake of its active portfolio management strategy. After the bet in the growing IT cyber security market, through the acquisition of a 60% stake at S21Sec share capital, on July 18th September 30th, in a context of increasing convergence between information and communication technologies.
nies in the IT/IS sector focused on international expansion. Following the two latest portfolio changes, SSI international revenues now ascend to about 55% of total revenues (data from the 4Q14).
WeDo Technologies, a worldwide market leader in enterprise business assurance, continued to expand its international footprint. The retail, energy and finance industries, as well as more than 190 telecommunications operators from more than 90 countries, ended 2014 with international revenues representing 74.8% of its turnover.
WeDo Technologies, continuously focused in the improvement of its services and software products, announced, in February 2014, the successful release of the fraud management software suite, RAID:FMS 7, a new release that enables service providers to handle risk threats associated with new products and services, in a single platform, being already working in RAID 8.
Again in 2014, WeDo Technologies was named by Stratecast (Frost & Sullivan) as the worldwide leader in Financial Assurance area, which comprises: Revenue Assurance, Fraud Management and Margin Assurance.
Also, it should be highlighted that during 2014, the company has won new customers in Pakistan, Bangladesh, Malaysia, Indonesia, Hungary, Morocco, Bahrain, Oman, Madagascar, Angola, Switzerland, Kyrgyzstan, Turkey, Germany, Mexico (a major retailer), Bolivia, Austria, Ireland, USA and Jamaica. In Portugal, besides the energy company, already mentioned in previous quarters, the company has won the first customer in healthcare segment, which clearly reflects
S21Sec is a multinational based in Spain, specialized in cyber security services and technologies, with the purpose of protecting organizations more critical and high-value digital assets: data, operations and corporate image. With its own products and platforms the company acts with a special focus on antifraud and e-crime in various segments like government, financial entities, telecommunications, energy and other critical infrastructures. S21Sec is under a turnaround process which is already giving positive signs.
Saphety continues to strengthen its position in purchase-to-pay solutions, optimisation of business processes and data and multimedia out 20 countries worldwide. In 2014, Saphety has won new contracts including (i) GS1 Greece and GS1 Mexico, two important players for synchronization solutions; (ii) Yazaki in Brazil, with the SaphetyDoc implementation in more than 76 suppliers in the automotive sector; (iii) Ford Lusitana; and (iv) EDP in Portugal, with SaphetyDOC. Importantly, external markets increased more than 20% and represented in 2014 25% of turnover.
On what concerns Bizdirect, the Competence Center launched in Viseu, that counted with the visit of Portuguese Prime Minister, has already delivered some successful projects. This center was created to respond to the growing demand for projects in the areas of CRM (Customer Relationship Management) and ECM (Enterprise Content Management), investing in the training of professionals and focusing in the international market. The investment in IT hardware and software has been registering some improvements, which enabled Bizdirect to increase its turnover by 20.2% in 2014 when compared to 2013. International revenues increased significantly and represented 12.2% of total Turnover.
| MAIN OPERATING KPI's | 4Q13(R) | 4Q14 | 3Q14 | q.o.q. | 2013(R) | 2014 | ||
|---|---|---|---|---|---|---|---|---|
| IT Service Revenues/Employee(1) ('000 euros) | 29.2 | 25.1 | -13.9% | 24.1 | 4.5% | 130.1 | 110.9 | -14.8% |
| Equipment Sales as % Turnover | 25.6% | 25.4% | -0.2pp | 31.2% | -5.8pp | 24.3% | 27.3% | 3.0pp |
| Equipment Sales/Employee(2) ('000 euros) | 180.7 | 283.0 | 56.6% | 363.8 | -22.2% | 732.0 | 1,072.7 | 46.5% |
| EBITDA/Employee ( '000 euros) | 5.8 | 4.1 | -28.8% | 4.0 | 3.7% | 21.2 | 16.2 | -23.6% |
| Employees | 589 | 851 | 44.5% | 825 | 3.2% | 589 | 851 | 44.5% |
(1) Excluding employees dedicated to Equipment Sales; (2)Bizdirect; (R)The values were restated in orderto reflectSonaecom structureafterMainroad sale.
IT service revenues per employee reached 110.9 thousand euros in 2014, 14.8% below 2013, driven by the 44.5% headcount increase effect. The EBITDA per employee reached 16.2 thousand euros, less 23.6% y.o.y, driven by the EBITDA evolution, coupled with the higher headcount level.
| Million euros | ||||||||
|---|---|---|---|---|---|---|---|---|
| SSI CONSOLIDATED INCOME STATEMENT | 4Q13(R) | 4Q14 | 3Q14 | q.o.q. | 2013(R) | 2014 | ||
| Turnover | 21.9 | 27.8 | 27.2% | 28.0 | -0.6% | 94.3 | 106.3 | 12.7% |
| Service Revenues | 16.3 | 20.8 | 27.5% | 19.3 | 7.7% | 71.4 | 77.3 | 8.2% |
| Equipment Sales | 5.6 | 7.1 | 26.3% | 8.7 | -19.0% | 22.9 | 29.0 | 26.6% |
| Other Revenues | 0.7 | 0.5 | -36.3% | 1.3 | -63.5% | 2.7 | 2.0 | -26.8% |
| Operating Costs | 19.2 | 24.8 | 29.2% | 26.0 | -4.6% | 84.7 | 96.5 | 13.9% |
| Personnel Costs | 6.9 | 9.3 | 35.8% | 9.3 | -0.3% | 29.8 | 33.9 | 13.7% |
| Commercial Costs(1) | 5.3 | 6.2 | 17.5% | 8.6 | -28.5% | 23.0 | 28.7 | 24.9% |
| Other Operating Costs(2) | 7.1 | 9.3 | 31.4% | 8.0 | 16.2% | 31.9 | 33.9 | 6.2% |
| EBITDA | 3.7 | 3.5 | -6.1% | 8.9 | -60.9% | 13.4 | 17.6 | 30.9% |
| Underlying EBITDA(3) | 3.4 | 3.5 | 2.8% | 3.3 | 7.0% | 12.3 | 11.7 | -4.7% |
| Discontinued Operations(4) | 0.3 | 0.0 | -100.0% | 5.6 | -100.0% | 1.2 | 5.9 | - |
| Underlying EBITDA Margin (%) | 15.7% | 12.7% | -3.0pp | 11.8% | 0.9pp | 13.0% | 11.0% | -2.0pp |
| Operating CAPEX(5) | 2.6 | 1.8 | -31.7% | 1.5 | 18.9% | 6.4 | 5.9 | -7.6% |
| Operating CAPEX as % of Turnover | 12.1% | 6.5% | -5.6pp | 5.4% | 1.1pp | 6.8% | 5.6% | -1.2pp |
| Underlying EBITDA - Operating CAPEX | 0.8 | 1.7 | 118.6% | 1.8 | -3.2% | 5.9 | 5.8 | -1.4% |
| Total CAPEX | 2.6 | 1.8 | -31.6% | 1.6 | 13.3% | 6.8 | 6.0 | -12.1% |
(1) Commercial Costs = COGS + Mktg & Sales; (2) Other Operating Costs = Outsourcing Services + G&A + Provisions + others; (3)Includes the businesses fully consolidated by SSI; (4)Includes Mainroad contribution untilthe sale and the capital gain; (5)Operating CAPEX excludes Financial Investments; R) The values were restated in orderto reflect Sonaecom structure afterMainroad
Turnover continued to benefit from the international expansion of SSI companies and the active potfolio management, growing 12.7% y.o.y., to 106.3 million euros. Service Revenues increased 8.2% to 77.3 million euros, while Equipment sales increased by 26.6% to 29.0 million euros.
The IT infrastructure market, where Bizdirect is positioned, gave signs of recovery in 2014.
Excluding S21Sec five months contribution in 2014, SSI turnover would have increased by 7.0%.
Operating costs increased 13.9%, reaching 96.5 million euros, impacted mostly by higher commercial costs but also by higher staff costs and other operational costs. Commercial costs increased 24.9% when compared to 2013, to 28.7 million euros, driven by a higher cost of goods sold, aligned with the higher level of equipment sales. Staff costs increased 13.7%, mainly driven by S21Sec integration.
EBITDA
Total EBITDA increased 30.9%, fully explained by discontinued operations. Underlying EBITDA reached 11.7 million euros, declining 4.7% y.o.y.. but grew 2.8% y.o.y. in the 4Q14. Underlying EBITDA margin stood at 11.0% in 2014, decreasing 2.0 p.p., while reaching 12.7% in the 4Q14.
Underlying EBITDA-operating CAPEX stood at 5.8 million euros, decreasing 1.4% when compared to 2013, fully explained by the lower level of EBITDA.
dividual results for the years ended 31 December 2014 and 2013 are summarised as follows:
| Million euros | 2013 | 2014 | Difference | % |
|---|---|---|---|---|
| Service Revenues | 2.6 | 0.3 | (2.3) | -88% |
| Operating Costs (1) | (4.5) | (2.5) | 2.0 | -45% |
| EBITDA | (1.8) | (2.0) | (0.2) | 9 % |
| EBIT | (1.9) | (2.0) | (0.1) | 6 % |
| Dividend Received | 24.7 | 8.6 | (16.1) | - |
| Net Financial Activity | 13.6 | 2.5 | (11.1) | -82% |
| Other Financial Results | (120.7) | (3.6) | 117.1 | -97% |
| EBT | (89.1) | 5.4 | 94.5 | -106% |
| Net Income | (90.6) | 5.8 | 96.4 | -106% |
(1) Excludes Amortization, Depreciation and Provisions
(1) Excluding depreciation, amortisation and provisions.
mpares with four executive directors and six non executive in 2013. For additional information about management changes in 2014, please refer to Section 4 – Corporate Governance Report.
This line totalled 0.3 million euros, which compares to 2.6 million in 2013. It essentially comprises management services provided to its subsidiaries which decreased significantly since the merger between Optimus with Zon (occurred on 2013, August 27th).
Total operating costs exclude depreciation, amortisation charges and provisions. This line amounted to 2.5 million euros, which compares with 4.5million euros in 2013. This decrease is linked with the reduction of directors (executive and non-executive).
EBITDA was negative 2.0 million euros (negative 1.8 million euros in 2013) and the decrease versus last year was fully driven by the lower level of service revenues.
In 2014, Sonaecom received dividends from NOS (1.3 million euros) and ZOPT (7.3 million euros). In 2013, Sonaecom received 24.7 million euros from Optimus.
The net financial activity (interest income less interest expenses) was positive by 2.5 million euros, significantly below 2013 (13.6 million euros) due to the lower level of loans granted to subsidiaries.
Other financial results were a negative 3.6 million euros, almost fully explained by the negative 3.1 million of market value adjustments related to the 2.14% direct stake on NOS (shares recorded at fair value through profit and loss). In 2013, these market value adjustments were responsible for a positive 46.6 million euros that were written off by an impairment recognition on Optimus financial investments amounted in 167.2 million euros.
Net results for the year were positive by 5.8 million euros, mainly driven by the dividends.
The following table summarises the major cash movements during 2014:
| Changes in Sonaecom SGPS Liquidity | million euros |
|---|---|
| Sonaecom SGPS stand-alone liquidity as at 31 December 2013 | 185.9 |
| Cash and Bank | 26.3 |
| Treasury Applications | 159.7 |
| Bank | 156.5 |
| Subsidiaries | 3.2 |
| Changes in Nominal Gross Debt | (41.6) |
| External Debt | (19.9) |
| Treasury applications from subsidiaries | (21.7) |
| Shareholder Loans granted | (23.3) |
| Dividend paid | - |
| Free Cash Flow | 9.3 |
| Interest paid | (2.9) |
| Interest received | 3.7 |
| Dividend received | 8.6 |
| Operational Free Cash Flow and others | (0.1) |
| Sonaecom SGPS stand-alone liquidity as at 31 December 2014 | 176.9 |
| Cash and Bank | 0.2 |
| Treasury Applications | 176.7 |
| Bank | 176.7 |
| Subsidiaries | 0.0 |
-alone liquidity decreased 9.0 million euros to 177.0 million euros due to the following movements:
(i) FCF was positive by 9.3 million euros (including dividends of 8.6 million from NOS and ZOPT);
(ii) Loans granted to subsidiaries decreased 2.6 million euros and supplementary capital placed in subsidiaries decreased by 20.7 million euros;
However:
(iv) Treasury applications from subsidiaries in Sonaecom SGPS decreased 21.7 million euros.
(i) Liquidity of 176.9 million euros;
3.1. Equity Capital Markets in 2014
3.2. Share price evolution during 2014
3.3. Shareholding structure and own shares
Sonaecom shares have been listed on the Portuguese Stock Exchange Euronext Lisbon since June 2000, with the symbol SNC. The table below lists the main statistics relating 4 stock performance.
| Stock market | Euronext Lisbon |
|---|---|
| Ticker | SNC |
| ISIN | PTSNC0AM0006 |
| Bloomberg code | SNC PL Equity |
| Reuters code | SNC.LS |
| Number of shares outstanding | 311,340,037 |
| Share capital | 230,391,627 |
| Stock price as of last day December (euros) | 1.450 |
| 2.651 | |
| 1.270 | |
| 192,806 | |
| 531,197 | |
| Market capitalisation as of last day December (euros) | 451,443,054 |
Graph 1 Sonaecom performance vs PSI 20 and DJ Euro Stoxx Telecoms in 2014
At the end of 2014 reached a market price of 1.450 euros per share, 43.6% below the closing price of 2.569 euros per share at 31 December 2013. The share price reached a maximum of 2.651 euros per share on 9 January 2014 and a minimum of 1.270 euros on 17 December 2014.
The year of 2014 was marked by the launching by Sonaecom of a Tender Offer for the acquisition of own shares.
Sonaecom gave the option to its shareholders to sell, in equal standing conditions, their Sonaecom shares for consideration of the directly held 37,489,324 NOS shares, which were not necessary to the pursuit of Sonaecom business purposes, thereby enabling direct exposure of Sonaecom shareholders to NOS, the reference asset of Sonaecom portfolio. Sonaecom offered an ove per Sonaecom share, to be composed of NOS shares and, where applicable, a remaining cash amount.
The Offer Period took place between 6 and 19 February 2014. The orders of acceptance of the Offer reached a total of 54,906,831 shares representing the share capital and voting rights of Sonaecom. These shares were then cancelled and the share capital of Sonaecom was reduced to 230,391,627.38 euros, represented by 311,340,037 shares, with a nominal value of 0.74 euros. As a consequence of the lower level of free float, the Euronext announced Sonaecom exclusion from the PSI-20, the main Portuguese stock index.
As far as the Portuguese market is concerned, PSI-20, the principal local stock index, ended 2014 at 4,798.99 points, a decrease of 26.8% versus year-end 2013. DJ Euro Stoxx Telecoms, the European Stock Telecommunications index, ended 2014 with an annual increase of approximately 14.1%.
S isation stood at approximately 451 million euros at the end of 2014. The average daily trading volume reached approximately 193 thousand shares, a decrease of 63.7% compared to 2013 (531 thousand shares).
In 2014 market share price decreased 43.6% compared to 2013.
Sonaecom shares would have been influenced by various milestones during the year, as follows:
9 May 2014: Sonaecom informs on the acquisition of own shares by Sonae;
12 May 2014: Sonaecom first quarter 2014 consolidated results released;
In accordance with the Portuguese Securities Code, shareholdings amounting to or exceeding the thresholds of 2%, 5%, 10%, 15%, 20%, 25%, 33.33%, 50%, 66.67% and 90% of the total share capital must be reported to the Portuguese Securities Market Commission and disclosed to the capital market. Reporting is also required if the shareholdings fall below the same percentages.
| Shareholder | Number of shares held | % Shareholding as at 31 Dec. 2014 |
|---|---|---|
| Sonae - SGPS, S.A. | 275 086 083 | 88.36% |
| Own shares | 5 571 014 | 1.79% |
| Free Float | 30 682 940 | 9.86% |
Sonae SGPS, S.A. (Sonae) is S a Portuguese multinational retail company, market leader in Portugal in food and specialised retail formats, with two core partnerships: shopping centres and telecoms. The company holds a total shareholding position of approximately 88.36%, equivalent to 89.97
At 31 December 2014, the free float stood at approximately 9.86%. The free float is the percentage of shares not held or controlled by shareholders with qualified holdings and excluding own shares.
During 2014, as a consequence of the Tender Offer, the number of shares issued by Sonaecom changed from 366,246,868 to 311,340,037 shares.
in 2014.
Part I Shareholding Structure, Appendices I, II and III Organisation and Corporate Governance
Part II Statement of Compliance Part III Analysis of Compliance with the Adopted Corporate Governance Code
fully subscribed and paid up and is divided into 311,340,037 registered ordinary shares with a nominal value of 0.74 Euro each.
All shares representing the share capital of Sonaecom are traded in the Euronext Lisbon regulated market.
There are no restrictions on the transferability or ownership of Sonaecom shares.
At 31 December 2014, Sonaecom held 5,571,014 own shares, representing 1,789% of its share capital.
4. Impact of the change in Sonaecom shareholder control in significant agreements
There are no agreements signed by Sonaecom that include clauses intended to constitute defensive measures against change in its shareholding control or which would cease in case of change in control of the company after a takeover bid. is owned by one single shareholder.
5. System to which the renewal or removal of defensive measures are subject, in particular those which establish the limitation of the number of votes that can be cast or exercised by a single shareholder individually or in agreement with other shareholders. No defensive measures were taken.
In compliance with the Article 8, paragraph 1, point (b) of regulation 05/2008 of the Securities and Exchange Commission, the qualified shareholdings at 31 December 2014 are described:
| % of voting rights | ||||
|---|---|---|---|---|
| Without own | ||||
| Shareholder | Number of shares | % of Share capital | With own shares | shares |
| Directly | ||||
| Sontel BV | 194,063,119 | 62.33% | 62.33% | 63.47% |
| Sonae- SGPS, S.A. | 81,022,964 | 26.02% | 26.02% | 26.50% |
| Total attributable (1) | 275,086,083 | 88.36% | 88.36% | 89.97% |
(1) Belmiro Mendes de Azevedo is, according to article 20 paragraph 1, subparagraph b), and article 21, paragraph 1, both of the Portuguese Securities Code, the ultimate beneficial owner, as it holds circa 99% of the share capital and voting rights in Efanor Investimentos, SGPS, SA and the latter wholly owns Sonae - SGPS S.A. and Sontel BV.
8. Number of shares and bonds held by the members of management and supervisory Board, presented in the terms of no. 5 of art. 447 of the Portuguese Companies Act
The information can be found in Appendix I of this Report.
9. Competence of the Board of Directors in capital increases
This is a competence that corresponds exclusively to the General Shareholde
10. Commercial relationships between the holders of qualified shareholdings and the company
Business and transactions with holders of qualified shareholdings are part of the usual activity of Sonaecom subsidiaries and are executed in normal market conditions. The amounts involved correspond mostly to interest and are not significant.
11. Identification and roles of t :
João Augusto Esmeriz Vieira de Castro Chairman Term of office 2012-2015 António Agostinho Cardoso da Conceição Guedes Secretary Term of office 2012-2015
Following the resignation of the Chairman João Augusto Esmeriz Vieira de Castro, due to personal reasons, and the Secretary António Agostinho Cardoso da Conceição Guedes, the election of the following elements to fill the vacancies until the end of the term of office was decided in the Annual General of April 24 2014:
António Agostinho Cardoso da Conceição Guedes Charmain Term of office 2012-2015 Maria Daniela Farto Baptista Passos Secretary Term of office 2012-2015
*Throughout the reference year
12. Potential restriction on voting rights
Articles of Association do not envisage any limitation on the tallying of the votes or the existence of shares with no voting rights.
13. Maximum percentage of voting rights that can be exercised by a single shareholder or by shareholders with whom s/he is in any of the relationships described in paragraph 1, article 20.
This regulation is not i Articles of Association, given that they do not establish any limitation on the number of votes that may he held or exercised by a single shareholder or group of shareholders.
14. Shareholder decisions which, due to the Articles of Association, may only be taken with a qualified majority As established unless otherwise required by law.
15. Identification of the adopted governance model
This company adopted the monist governance model, whose administration structure is centralised in the Board of Directors. The supervisory structure includes a Statutory Audit Board and a Statutory External Auditor.
functions pertaining to the corporate purpose, monitoring risks, and executing nd strategy. The Statutory Audit Board has the supervising responsibility.
16. Statutory regulations on procedural and material requirements applicable to the appointment and replacement of the members of the Board of Directors
The members of the Board of Directors are elected, as established by law and the , in the terms specified in
The Articles of Association establish that, should shareholders representing at least 10% of the share capital vote against the winning proposal for the election of the directors, a director will be elected by the shareholders in said minority, in the same meeting, and the director elected shall automatically replace the person with the lowest number of votes in the winning list, or, in case of an equal number of votes, the person in the last position in the list. One shareholder may not nominate more than one candidate.
Should candidates be nominated by more than a group of shareholders, the vote shall concern those candidacies as a whole. These regulations shall not apply to the election of a substitute director.
It is also statutorily established that in case of death, resignation, or any temporary or definitive incapacity of any director other than a director elected under the minority rule, the Board of Directors shall replace said director through co-option. This appointment shall be subject to ratification by shareholders in the following General Meeting.
However, the definitive lack, for any reason, of a director elected under the aforementioned special rules shall lead to a new election by the General Meeting.
The Board of Directors shall appoint its Chairman.
Pursuant to the So , the Board of Directors may be constituted by three to twelve members, elected in the -elected. Of The current Board of Directors term of office is 2012 to 2015.
Until April 14, 2014, the composition of the Board of Directors was as follows:
| Members | |
|---|---|
| Duarte Paulo Teixeira de Azevedo | Chairman [resigned on March 27, 2014 - resignation with effect on April 24, 2014] |
| António Sampaio e Mello | Independent non-executive Director [resigned on March 26, 2014 - resignation with effect on April 24, 2014] |
| David Charles Denholm Hobley | Non-executive Director [resigned on March 26, 2014 - resignation with effect on April 24, 2014] |
| Gervais Gilles Pellissier | Non-executive Director [resigned on March 18, 2014 - resignation with effect on April 24, 2014] |
| Jean-François René Pontal | Non-executive Director [resigned on March 26, 2014 - resignation with effect on April 24, 2014] |
| Frank Dangeard | Independent non-executive Director [resigned on March 26, 2014 - resignation with effect on April 24, 2014] |
| Ângelo Gabriel Ribeirinho dos Santos Paupério | Executive Director and CEO |
| António Bernardo Aranha da Gama Lobo Xavier | Executive Director |
| Maria Cláudia Teixeira de Azevedo | Executive Director and CEO of the SSI and Online & Media divisions |
| Miguel Nuno Santos Almeida | Executive Director and Deputy CEO [resigned on March 26, 2014 - resignation with effect on April 24, 2014]] |
In view of the resignations tendered by the members of the Board of Directors Jean-François René Pontal, David Charles Denholm Hobley, Gervais Gilles Pelissier, António Maria Theotónio Pereira Sampaio e Melo, Frank Emmanuel Dangeard, Duarte Paulo Teixeira de Azevedo and Miguel Nuno Santos Almeida, on the aforementioned dates, it was decided at the Annual General Meeting, held in April 24, 2014, to reduce the number of members of the Board of Directors to three.
| As a result of that decision, the Board of Directors has changed to the following: | ||||||||
|---|---|---|---|---|---|---|---|---|
| Director | Role | Date 1s t Apointment |
Term of Office | |||||
| Ângelo Gabriel Ribeirinho dos Santos Paupério | Chairman | 24-04-2007 | 31-12-2015 | |||||
| António Bernardo Aranha da Gama Lobo Xavier | Executive Director | 23-04-2010 | 31-12-2015 | |||||
| Maria Cláudia Teixeira de Azevedo | Executive Director; CEO of SSI and Online & Media divisions |
05-04-2006 | 31-12-2015 |
18. Positions of the Board Directors
Members
Ângelo Gabriel Ribeirinho dos Santos Paupério Chairman of the Board of Directors António Bernardo Aranha da Gama Lobo Xavier Executive Director
Maria Cláudia Teixeira de Azevedo Executive Director and CEO of the SSI and Online & Media divisions
The Board of Directors, given its composition resulting from the decision made by the shareholders in the General Meeting on April 24, 2014 - of reducing the number of members of this body to three - and in virtue of the company's dimension, considers the delegation of powers in an Executive Committee or managing director unnecessary.
The company believes that its current dimension, its shareholder structure and the reduced dispersion of its share capital do not justify the existence of independent directors.
19. Professional qualifications of the members of the Board of Directors
The academic qualifications, experience, and duties of the directors are given in Appendix II of this report.
20. Significant family, professional, and commercial relationships of the members of the Board of Directors with shareholders that have qualified shares
Maria Claudia Teixeira de Azevedo, member of the Board of Directors, is the sister of the CEO of Sonae, SGPS, S.A. Duarte Paulo Teixeira de Azevedo company which holds, as of 31 December 2014, an 88.36% share in Sonaecom, corresponding to 89.97% of the voting rights. This Director is also daughter of Belmiro Mendes de Azevedo, shareholder and member of the Board of Directors of Efanor Investimentos, S.A., a company that holds the control of Sonaecom's share capital.
The Chairman of the Board of Directors of Sonaecom, Ângelo Ribeirinho dos Santos Paupério, is also a member of the Board of Directors of Sonae SGPS, S.A., shareholder of Sonaecom in the terms described above.
| Sonaecom, SGPS, S.A. | |||||||
|---|---|---|---|---|---|---|---|
| Shareholders' Remmuneration Committee | Board of the Shareholders' General Meeting | Statutory Audit Board | |||||
| Statutory External Auditor | |||||||
| Board and Corporate Governance Officer | Board of Directors | Company Secretary |
Following below are the main functions and responsibilities of the Sonaecom corporate bodies:
and executing the ves and strategy.
Articles of Association allow the Board of Directors to delegate powers to one or more Managing Directors or an Executive Committee when it comes to everyday business, duties and management responsibilities. However, they do not allow the Board of Directors to approve capital increases, which shall be decided in the General .
website (www.sonae.com) at http://www.sonae.com/investidores/governo-das-sociedades/orgaos-de-administracao-e-fiscalizacao/.
The Board of Directors is advised by a set of corporate functions; described in section ii), below:
ii) Distribution of competences among the various company departments
Main duties:
Ensuring the rigour and reliability of the financial information, with the support of the most efficient information system;
y, ensuring the monitoring of fiscal procedures in all Sonaecom businesses, as well as compliance with tax obligations and control of the fiscal group;
Management of the Sonaecom transfer pricing dossier;
Planning and Management Control Department
Main duties:
Leading and monitoring the annual Sonaecom budgeting process, as well as preparing the report on budget implementation;
Challenging the corporate business and areas as regards the goals set so as to constantly improve and optimise the efficiency business, performance, and results;
Preparing and analysing business management information, as well as consolidated data, on a monthly, quarterly, and annual basis, analysing deviations from the budget and proposing corrective actions;
Supporting decisions for the allocation of capital to ongoing businesses and new business opportunities; in charge of analysing the invested capital and the return on the invested capital;
Creating business plans together with the business management teams;
Performing technical and benchmark studies for the Sonae business in order to evaluate its performance in comparison with competitors and other players in the market.
As a result of the changes that have taken place throughout 2014 in the Sonaecom's portfolio, Risk Management is ensured at the level of company business. Thus, each business unit is involved in the functional processes, with the responsibility of implementing internal controls and managing specific risks. In general, each one of the businesses has as main responsibilities:
Promoting a culture of risk awareness, as well as mediating and managing the business risks that interfere with the achievement of objectives and the creation of value in the organisation;
Promoting and monitoring the implementation of programmes and actions aimed at bringing risk levels close to the acceptable levels established by the management.
Main duties:
Assessing risk exposure and checking the effectiveness of risk management and internal controls through the execution of audits of business processes and information systems;
Proposing measures to improve controls and monitor the evolution of risk exposure associated with the main audit findings.
Main duties:
Relations with Euronext Lisbon, with the Portuguese Securities Market Commissions and with shareholders regarding legal issues;
Legal management of company governance and monitoring of compliance with best practices in this area;
Monitoring, controlling and ensuring compliance of business activities in software, information systems and media areas;
Drafting and/or analysing contracts to maximise security and reduce legal risks and potential costs;
Management of all aspects pertaining to the intellectual and industrial property of the various businesses, such as brands, trademarks, names, patents, logos, marketing, slogans, domain names and copyright;
Execution of all public deeds, registrations and notarial procedures required for business, whether they are commercial, property, or corporate;
Management of all dispute processes and corporate processes in the pre-litigation stages and during litigation;
Support to obtain the various licences required for business;
Monitoring the development of the legislation relevant to the
ernational
operations, in particular, in the latter, regarding the legal environment in the countries under analysis;
Human Resources Department
Main duties:
Support to senior management on the implementation and development of human resources policies;
Defining and implementing the human resources strategy, planning and talent management on various levels;
Ensuring the presence and development of the technical and management competences of Sonaecom executives, either through the implementation of adequate recruitment and selection practices, or through the design and implementation of training transversal and/or individualised training and development plans;
Developing human resources management models and processes in areas such as remuneration and benefit policy; career management; social climate monitoring and development; administrative management and salary processing; staff budgeting and reporting on human resources issues, occupational health, hygiene, and safety management;
Monitoring legal occupational issues;
Representing the company in official bodies and associations linked to this area.
Investor Relations Department
Main duties:
up to date information about the company;
Support to the Board of Directors, providing relevant information about the capital markets;
Support in the definition of the corporate message to be disseminated to the capital market.
22. Location of the terms of reference of the Board of Directors
The terms of reference of the Board of Directors are available on the company's website (www.sonae.com) at http://www.sonae.com/investidores/governo-das-sociedades/orgaos-de-administracao-e-fiscalizacao/.
23. Number of meetings held and attendance level of each member of the Board of Directors.
The Sonaecom Board of Directors meets at least four times , and whenever the Chairman or two members of the Board of Directors call a meeting. Six meetings of the Board were held in 2014 with a 100% attendance rate, in person or by means of a representative. The following table displays detailed information about the attendance at meetings:
| Date | Participants |
|---|---|
| 10 March 2014 | Paulo Azevedo Ângelo Paupério Cláudia Azevedo Miguel Almeida António Lobo Xavier António Sampaio e Mello David Hobley Frank Dangeard Jean-François Pontal Gervais Pelissier (represented by Paulo Azevedo) |
| 2 May 2014 | Ângelo Paupério Cláudia Azevedo António Lobo Xavier |
| 23 May 2014 | Ângelo Paupério Cláudia Azevedo António Lobo Xavier |
| 1 August 2014 | Ângelo Paupério Cláudia Azevedo António Lobo Xavier |
| 20 October 2014 | Ângelo Paupério Cláudia Azevedo António Lobo Xavier |
| 15 December 2014 | Ângelo Paupério Cláudia Azevedo António Lobo Xavier |
24. Suitability of the competent corporate bodies to appraise the performance of the Executive Directors
carried out by the Shareholder Remuneration Committee. This evaluation is performed
25. Predetermined criteria for evaluating the performance of Executive Directors
The performance evaluation of Executive Directors is based on predetermined criteria, consisting of objective performance indicators established for each period and aligned with the overall strategy of growth and positive business performance.
These indicators consist in business, economic and financial KPIs (Key Performance Indicators) and are subdivided into collective, departmental and personal KPIs.
Collective business KPIs include economic and financial indicators based on the budget, on the performance of each business unit, as well as on the consolidated performance of Sonaecom.
In turn, departmental business KPIs are similar in nature to the previous ones, being directly influenced by the performance of the business Executive Director.
Personal KPIs include objective and subjective indicators and seek to assess the compliance with the obligations and commitments undertaken individually by the executive director.
26. Availability of each of the members of the Board of Directors, specifying the roles held simultaneously in other companies, inside and outside the Group, and other relevant activities performed by the members of these bodies during the business year.
The list of roles held by the company directors is disclosed in Appendix II of this report.
Each one of the members of the Board of Directors consistently displayed their availability to perform their duties, attending meetings and taking part in the respective works on a regular basis.
27. Identification of the committees created within the Board of Directors and location of their operating regulations
The Board of Directors, given its composition, resulting from the decision made by the shareholders in the General Meeting on April 24, 2014 - of reducing the number of members of this body to three -, and in virtue of the company's dimension, considers that keeping any specialized Committee is unnecessary.
The company keeps a Corporate Governance Officer, who reports to the Board of Directors, through the Chairman, and also, when appropriate, through the Senior Independent Non-Executive Director.
In particular, the main duties of the Corporate Governance Officer are:
(i) Ensuring the smooth running of the activities of the Board and, when applicable, Board Committees;
(ii) Participating in Board Meetings and, if applicable, relevant Board Committee Meetings and, when appointed, serving as a member;
(iii) Facilitating the acquisition of information by all Board members;
(iv) Supporting the Board in defining its role, objectives and operating procedures; taking a leading role in organising Board evaluations and assessments;
(v) Keeping under close review all Legislative, Regulatory and Corporate Governance issues; supporting and challenging the Board to achieve the highest standards in Corporate Governance;
(vi) Ensuring that the Board is conscious of the concept of stakeholders and the need to protect minority interests, when important business decisions are being taken by the Board of Directors;
(vii) Helping to ensure that the procedure to nominate and appoint Directors is properly carried out and assist in the induction of new directors;
(viii) Acting as a primary point of contact and source of advice and guidance for, particularly, Non-Executive Directors as regards the company and its activities; facilitating and supporting the Independent Non-Executiv
(ix) Helping to ensure compliance with the continuing obligations of the Portuguese Securities Market Commissions;
(x) Participating in making arrangements for and managing the process of Shareholders
(xi) Participating in the arrangement of insurance cover for Directors and Officers;
(xii) Participating, on behalf of the company, in external initiatives to debate and improve Corporate Governance regulations and practices in Portugal.
28. Composition, if applicable, of the Executive Committee and/or identification of the managing director(s)
The Board of Directors, given its composition resulting from the decision made by the shareholders in the General Meeting on April 24, 2014 - of reducing the number of members of this body to three - and in virtue of the company's dimension, considers the delegation of powers in an Executive Committee or managing director unnecessary.
In this way, the management of the company is carried out collectively by the Board of Directors and all its members have executive functions. The director Maria Cláudia Teixeira de Azevedo is CEO of the SSI and Online & Media divisions.
29. Specification of the competences of each of the Committees created and synthesis of the activities performed in the exercise of those competences
The Board of Directors, given its composition, resulting from the decision made by the shareholders in the General Meeting on April 24, 2014 - of reducing the number of members of this body to three - trusts that keeping any specialized Committee is unnecessary.
The company has a Corporate Governance Officer, with the functions and responsibilities disclosed in section 27 of this Report.
The company has a company secretary, who is responsible for:
30. Identifying the supervisory body
supervisory bodies.
In accordance with the Articles of Association, the Board of Auditors may be made up of an odd or even number of members, with a minimum of three and a maximum of five members, elected for four-year terms. The Board of Auditors also includes one or two alternate members, depending on whether the number of members is three or more.
Board of Auditors' members:
Arlindo Dias Duarte Silva Chairman Armando Luís Vieira de Magalhães Member Óscar José Alçada da Quinta Member Jorge Manuel Felizes Morgado (Alternate Member)
Members Date 1st appointed End of term office Arlindo Dias Duarte Silva 02-05-2007 31-12-2015 Armando Luís Vieira de Magalhães 02-05-2007 31-12-2015 Óscar José Alçada da Quinta 02-05-2007 31-12-2015 Jorge Manuel Felizes Morgado (Alternate) 02-05-2007 31-12-2015
Statutory External Auditor
The Statutory External Auditor for Sonaecom is Deloitte & Associados, SROC, S.A. represented since 2012 by António Manuel Martins Amaral, who may be replaced by João Luís Falua Costa da Silva.
32. Degree of independence of the members of the Statutory Audit Board
All members of the Statutory Audit Board are independent under the terms of article 414, paragraph 5, and they are not covered by any incompatibility under the terms of article 414-A (1), both from the Portuguese Companies Act. The Statutory Audit Board carried out an assessment of the independence of its members by the renewal of written declarations issued individually.
Members of the Statutory Audit Board must notify the company immediately of any occurrence during the course of their mandates that gives rise to incompatibilities or a loss of independence, as required by law.
33. Professional Qualifications
Professional qualifications and other relevant curricular elements are disclosed in Appendix II of this Report.
34. Terms of reference and annual activity report
The operating regulations of the Statutory Audit Board can be consulted in the Sonaecom website (www.sonae.com), at http://www.sonae.com/investidores/governo-das-sociedades/orgaos-de-administracao-e-fiscalizacao/.
The annual report and opinions of the Statutory Audit Board are published during each financial year, together with documents relating to accountability of the Board of Directors, available at http://www.sonae.com/investidores/informacao-financeira/relatorios/.
35. Statutory audit Board Meetings
Resolutions of the Statutory Audit Board are passed by majority vote, with dissenting members being required to give their reasons for dissent in the minutes.
The Statutory Audit Board meets at least once a quarter. In 2014, four formal meetings of that body were held, the attendance rate being 83%,. The respective minutes were drawn. Two of the members were present in all the meetings; one of the members could not be present in two of those meetings, due to compelling reasons. However, he followed up and contributed for the decision making process pertaining to the competences of the collective body, by discussing the topics, contributing for the diligences to be executed and being informed of the obtained results and clarifications.
36. Availability of the members, with a description of roles held in other companies inside and outside the Group, as well as other activities carried out by members of the Statutory Audit Board
Members of the Statutory Audit Board consistently demonstrated their availability when carrying out their functions, having regularly attended meetings of the body and taken part in the respective work.
d professional experience are available in Appendix II to this report.
37. Description of the procedures and criteria that apply to interventions by the Supervisory Body for the purpose of contracting services additional to the external auditor
The Statutory Audit Board shall have the authority to approve the provision of services that are additional to the audit services provided by the External Auditor.
To that end, at the first meeting held in each financial year, the Statutory Audit Board schedules a work plan that includes supervisions of the External Audit follow-up of work performed and review of conclusions of the audit work and of interim and annual statutory audits; (iii) overseeing nce; (iv) providing services other than audit services, in fulfilment of Recommendation CMVM IV.2 and (v) assessing annual activity;
In the assessment of criteria that support the hiring of additional duties to the Statutory External Auditor, the Board verifies the presence of the following:
contracting additional services should not affect the independence of the External Auditor;
additional services do not account for a surcharge of more than 30%;
tax consultancy services and other services are provided with high levels of quality, autonomy and independence in relation to the services carried out as part of the audit process;
the necessary factors guaranteeing independence and exemption are in place.
38.1 Statutory Audit Board
The Statutory Audit Board, while performing its functions, statutory and legally assigned, including the ones set out in Art. 420 of the Portuguese Companies Act, has the following main duties, among others:
a) To oversee the co
c) To verify that the books of account, accounting records and supporting documentation are correctly maintained and kept up to date;
d) To verify the accuracy of the documents used in the presentation of the accounts;
e) To verify if the accounting policies and accounting criteria used by the company are suitable to showing a true and fair view of the financial position and the results of its operations;
f) To prepare an annual report on the supervisory work performed and express an opinion on the management report, accounts and other proposals submitted by the Board of Directors, in which it should express its agreement or not, with the management report and the accounts of the year;
g) To evaluate if the corporate governance report disclosed, includes the information listed in Art. 245.a of the Portuguese Securities Code;
Chairman of the General Meeting fail to do this in circumstances when it is necessary;
i) To assess the risk management systems, internal control system and internal audit system and to monitor the effectiveness of them, and receive the respective reports;
j) To oversee the independence of the internal audit function, particularly with regard to restrictions to its organisational independence and any lack of resources for internal audit activity;
k) To receive communications of alleged irregularities occurr others;
l) To appoint and hire services from experts to help one or more members in the exercise of their duties. The hiring and fees of these experts should take into consideration the complexity of the matters involved and the financial position of the company;
m) To oversee the preparation and disclosure of financial information;
and corresponding remuneration;
nd to the Shareholders´ General Meeting their dismissal, if there is due case to do so;
p) To assure that the company provides the Statutory External Auditor the necessary conditions for carrying out its duties, to intermediate between him and the company, as well as, be a receiver of the reports;
q) To issue a prior opinion on relevant business activities (higher than 10 million euros) with qualified shareholders, or entities with whom they are in any relationship, according to Art. 20 of the Portuguese Securities Code;
r) To carry out any other supervisory duties required by law.
The SAB obtains from the Board of Directors all the necessary information to carry out its duties, namely relating to the operational and financial progress of the company, changes to its business portfolio, the terms of any transactions that have occurred and the details of the decisions taken.
The SAB is the global supervision body of the company for matters of internal control and risk management, acts in an independent manner and has primacy over other bodies regarding the supervision of those matters.
The full Terms of Ref (www.sonae.com), at http://www.sonae.com/investidores/governo-das-sociedades/orgaos-de-administracao-e-fiscalizacao/.
38.2 Statutory Auditor
The Statutory Auditor is the supervisory body responsible for the legal certification of the Company's financial information with the following competences:
a) check the regularity of all books, records and supporting documents;
b) whenever it feels appropriate and through whatever means it deems appropriate, check the extension of cash and values of any type of assets or securities belonging to the Company or received as a guarantee, deposit or another purpose;
c) check the accuracy of financial statements and express opinions regarding them on the Statutory Audit Certificate and on the Audit Report; d) verify that the accounting policies and valuation criteria adopted by the Company result in the correct valuation of assets and results;
e) perform any examinations and tests required for the audit and legal certification of accounts and execute all procedures set forth in the law; f) verify, within its functions, the implementation of policies and remuneration systems, as well as the efficiency and effectiveness of the internal control mechanisms, reporting any deficiencies to the Statutory Audit Board, within the limits of legal powers and applicable procedures; g) to evaluate if the corporate governance report discloses includes the information listed in Art. 245.a of the Portuguese Securities Code.
39. Identification of the Statutory External Auditor and the partner who represents it
The Statutory External Auditor for Sonaecom is Deloitte & Associados, SROC, S.A. represented by António Manuel Martins Amaral, who may be replaced by João Luís Falua Costa da Silva.
40. Number of consecutive years in which the external auditor and the respective partner who represents it, have performed duties for the company and/or for the Group
The present structure of the supervisory body, composed of a Statutory Audit Board and a Statutory External Auditor, was adopted by the company at t eeting, in accordance with applicable legislation, on 2 May 2007, and Deloitte & Associados, SROC, S.A, was chosen as the Statutory Auditor, serving until the end of the current term.
In 2008, a new term corresponding to the 2008/2011 four-year period began and the Statutory External Auditor was re-appointed to the post. In 2012, the proposal for election of Deloitte & Associados, SROC, S.A. to a new term (2012/2015) was submitted by the Statutory Audit Board to the Sharehol independence of the auditor and the advantages and costs of its replacement are weighed:
Statutory Audit Board oversaw an extended selection process that began in 2010, in which various audit companies of recognised national and international competence were invited to take part.
For this purpose the conditions of eligibility were identified beforehand, which comprised the background of experience and competence of the candidates in the activity sectors in which Sonaecom operates, the competence, sufficiency, and availability of the work team proposed, the methods used, as well as the size of the charges to be defrayed by the company.
During 2011, all the factors in the selection equation were weighed and the Statutory Audit Board decided to propose to the General Meeting reing in service neither eliminates nor
(Transcription of the proposal submitted by the Statutory Audit Board under point 5 on the Agenda for the Annual General Meeting on 27 April 2012).
41. Description of other services rendered to the company by the Statutory Auditor
Deloitte & Associados, SROC, S.A performs the duties of an External Auditor and compliance and tax consulting services, among others.
42. Identification of Statutory external auditor designated for the purposes of article 8 and of the partner who represents it in the performance of these duties, as well as the respective registry number at the Portuguese Securities Market Commission (CMVM). The Sonaecom External Auditor, designated for the purposes of Article 8 of the Portuguese Securities Code, is Deloitte & Associados, SROC S.A, recorded under No 231 at the Portuguese Securities Market Commission, represented by António Manuel Martins Amaral.
43. Number of consecutive years in which the external auditor and the respective partner who represents it have performed duties for the company and/or for the Group
Deloitte & Associados, SROC, S.A. was appointed External Auditor of the company in the annual Shareholde held the May 2, 2007, exercising duties until the end of the term then in progress.
In 2008, a new term corresponding to the 2008/2011 four-year period began and the Statutory External Auditor was re-appointed to the post. In 2012, the proposal for election of Deloitte & Associados, SROC, S.A. to a new term (2012/2015) was submitted by the Statutory Audit Board at represents it in the performance of its duties was replaced in 2012.
44. Policy and frequency for rotation of the external auditor and the respective partner who represents it
The Statutory Audit Board has adopted the recommended principle of not replacing the External Auditor after the end of two four-year mandates if, after careful assessment, it has concluded that the supervision of its activity after that said period does not interfere with the independence of the External Auditor, and the advantages and costs of renewing the mandate outweigh its replacement.
Notwithstanding the analysis leading to the decision that the External Auditor should remain in service beyond the end of two terms, a new Partner was appointed by the External Auditor to represent it in 2012.
45. Body in charge of assessing the External Auditor and frequency of assessment
the appointment or removal of the Statutory Auditor/External Auditor is decided at the General Shareholders Meeting, based on a proposal from the Statutory Audit Board.
The Statutory Audit Board oversees the performance of the External Auditor and the work developed during each exercise, considers and approves the additional work to provide and, annually, prepares an overall appraisal of the External Auditor, which includes an assessment of their independence.
46 and 47. Work other than auditing performed by the External Auditor for the company and/or for companies with which it is in a control relationship, as well as reporting on the internal procedures for purposes of approval of the contracting of such services and the reasons for such hiring and the annual remuneration paid by the company and/or by legal entities in a control or group relationship to the auditor and to other individuals or legal entities belonging to the same network, and break out of the percentages for each service
The remuneration paid to the Statutory External Auditor and to the External Auditor, Deloitte & Associados, SROC, SA, by proposal of the Statutory Audit Board, and to other individuals and entities of the same company network, supported by the Company and/or by corporate entities in a control relation with the latter, are as follows, analysed by type of service:
| 2014 | 2013 | |||
|---|---|---|---|---|
| % | % | |||
| For the company | ||||
| Statutory audit review | 19,126 | 16% | 8,001 | 6% |
| Other services of assurance | - | - | 10,000 | 7 % |
| Tax consultancy | - - | - | 2,877 | 2% |
| Other consultancy | 4,738 | 4% | - | - |
| By entities inclued in the group | ||||
| Statutory audit review | 96,537 | 80% | 102,972 | 75% |
| Other services of assurance | - | - | - | - |
| Tax consultancy | - | - | 11,870 | 9% |
| Other consultancy | - | - | 1,250 | 1% |
| Total | ||||
| Statutory audit review | 115,663 | 96% | 110,973 | 81% |
| Other services of assurance | - | - | 10,000 | 7 % |
| Audit services | 115,663 | 96% | 120,973 | 88% |
| Tax consultancy | - | - | 14,747 | 11% |
| Other consultancy | 4,738 | 4% | 1,250 | 1% |
| Total | 120,401 | 100% | 136,970 | 100% |
*Includes individual and consolidated accounts (*) Includes individual and consolidated accounts.
Statutory Audit Board, tracks and controls services requested from External Auditor and their network of companies, so their independence is not compromised. Quarterly, the Statutory Audit Board receives and analyses information about fees and services rendered by the Statutory External Auditor.
In the adoption of the procurement of services to the External Auditor, it was ensured that:
a) the additional services do not account for a surcharge of more than 30%;
b) the fees paid by the Sonaecom Group to the Deloitte group represent less than 1% of the total annual billing of Deloitte in Portugal;
c) the Deloitte applied quality system (internal control), according to the provided information, monitors the potential loss of independence risks, or of any conflicts of interest with Sonaecom and ensures the quality and the rules of ethics and independence.
Every year a Letter of Independence is prepared, in which Deloitte guarantees compliance with international guidelines in matters of auditor independence.
48. articles of association
Amendments to the follow the terms of the Portuguese Companies Act, requiring a two-thirds majority of the votes cast for approval. For the General Meeting to be held, Association require that a minimum of 50% of the issued share capital should be present or represented at the meeting.
49. Means and policy for reporting irregularities occurring in the company
Sonaecom's values and principles, widespread and deeply rooted in the culture of its people, are based on absolute respect and the adoption of rules of good conduct in the management of conflicts of interests and duties of care and confidentiality, having adopted a Code of Ethics and Conduct which sets out the principles and standards of conduct that reflect the culture of the company.
Said Code of Conduct, which should guide the actions of its employees when exercising their functions, is available at http://www.sonae.com/responsabilidade-corporativa/codigo-de-conduta/?l=en.
Any individual who seeks to report an irregularity that they think has been or know to have been committed by any manager, staff member or partner of Sonaecom shall do so through letter sent to the Statutory Audit Board, with brief description of the facts. The identity of the discloser will be kept anonymous if this is expressly requested.
The complaint will be analysed and, if there are grounds for reporting an irregularity, the appropriate steps will be taken.
The Statutory Audit Board has statutory accountability in this process, specifically to receive reports of alleged irregularities, submitted by company stockholders, by staff or by other parties. After the receipt, the Statutory Audit Board must record all alleged irregularities reported, to undertake investigation with due diligence by the Board of Directors through internal and/or external auditing, and to report its/their conclusions.
50. Individuals, bodies, or committees in charge of internal auditing and/or implementing internal control systems
Risk Management is one of the components of Sonaecom's culture and a pillar of the Corporate Governance, which is why each business unit in Sonaecom has, as part of its competencies in the functional processes, the responsibility of implementing internal controls and management of specific risks.
At the same time, the Internal Audit Department evaluates the exposure to risk and verifies the effectiveness of risk management in the internal controls of business processes and information systems. Additionally, it proposes measures to improve controls and monitor the evolution of risk exposure associated with the main audit findings and conclusions.
51. Making explicit (if necessary by including an organisation chart) the hierarchical and/or functional dependency relationships with other company bodies or committees
The Board of Directors monitors the activities of the Internal Audit Department, who reports functionally to the Statutory Audit Board, as a supervisory body and independent entity of the Board of Directors. Internal Audit can meet with the Statutory Audit Board, without the presence of any member of the Board of Directors.
As regards matters of internal control and risk management, the Statutory Audit Board is the supervisory statutory body, acting independently and with the responsibility of overseeing the Internal Audit plan of activities, gathering regular information on their work, evaluate findings and issuing the guidelines it deems necessary.
The external auditor, within the scope of the annual audit process, analyses the functioning of internal control mechanisms and reports identified shortcomings.
Responsibilities for the creation, operation and periodic evaluation of the internal control and risk management systems are published under the terms of reference of the Board of Directors and the Statutory Audit Board, all of which are available at the company's website.
52. Existence of other functional areas with risk control competencies
Besides the areas mentioned above, Sonaecom has other functional areas and business processes with competency in controlling and monitoring risks, in particular the following:
The functions of Planning and Control, along with the respective pivots in the business areas, are responsible for preparing and monitoring
the execution of annual plans of action as well as resources, budgets and forecasts in the finance and operating areas;
53. Reporting and description of the main types of risks (economic, financial, and legal) to which the company is exposed in the performance of its activity
Risks are presented and ranked, in the present section, based on the ranking and (Business Risk Management). BRM is a systematic way of identifying risks that affect the organisation (everyday language) and makes it possible to define and group risks along with their main causes (dictionary of risks).
onomic risks are associated with the following risk categories: business environment, strategy, operations, information processing and technology, empowerment and integrity.
Sonaecom is exposed to the current adverse economic environment in Portugal, although, due to the increasing pace of the internationalisation of SSI companies, that exposure is increasingly disappearing. Despite showing positive signs of recovery, the year of 2014 in Portugal was still a year affected by the crisis and by the end of Troika's financial assistance program. Consequently, businesses that operate solely or mainly on the Portuguese market were affected by the reduced levels of consumption.
Regarding WeDo Technologies, the impact of the adverse economic environment in the business is diluted due to regional expansion, to the expansion of the respective product portfolio and, still, to the enlargement to other business sectors.
S21Sec, although mainly operating in the Spanish market, in which the economic recovery has been slower, mitigates that risk by operating in a segment of high growth and criticality in organizations.
In the case of Bizdirect, the company has been affected by shrinkage of the market for IT equipment that has shown high levels of positive recovery for 2014. On the other hand, Bizdirect has outweighed the decline in the IT equipment market with the provision of software licensing corporate agreements' management services and with the expansion of the Microsoft solutions integration activity.
Saphety has a constant position in the domestic market as a leader in process simplification and automation solutions and has been investing in the expansion of this activity into the international market.
In the case of Público, the exposure to a segment that is going through a period of financial crisis and changing of reading trends has forced the definition of a restructuring project. With the need to ensure sustainability without compromising its role as an independent information source in Portugal, Público has continued to execute this project, which involves a greater focus on meeting growing demands in the digital world and a sizeable reduction in its operating costs structure.
For Sonaecom, having an optimised technology infrastructure is a critical success factor that helps to reduce potential failures in leveraging technological developments. Accordingly, its various businesses continue to take actions to optimize the technological structure and foster innovation.
WeDo Technologies is certified in Research, Development and Innovation Management (NP 4457:2007). This certification, along with its existing quality certification (ISO 9001:2008), helps the company to continue innovating sustainably and helps to mitigate potential risk factors, ensuring that the offer is continuously adapted to technological trends.
S21Sec is integrated in a sector that demands constant innovation and a clear domain of all technological trends and it continuously invests in research and innovation. It is also certified by UNE-EN ISO 9001:2008 quality management and by UNE- ISO/ IEC 27001:2007, Information Security management International reference Standard.
Although Bizdirect assumes cloud computing as a risk factor for their activity, since it can cannibalise the market for the sale of infrastructure and reduce procurement of systems by clients, it also assumes it as a chance to extend its offer. Strategic relationships with partners allow us to offer a full portfolio of products, including cloud solutions. We emphasise, for example, the partnership that allows Bizdirect to offer integration of Microsoft solutions, such as Dynamics CRM, SharePoint, BizTalk, and Office 365.
Público has continued with restructuring of its layout and content and in adopting technological innovations in its online edition. These innovations are designed to ensure a greater alignment with the new reading habits of the Portuguese, offering new access channels to information using smartphones and tablets, as well as sustaining -specialist online newspaper.
and international markets in its respective businesses sectors.
WeDo Technologies may be most exposed to international competition; however, it is known as the worldwide leader in revenue assurance software and is a top three global competitor in the aggregate market for revenue assurance and fraud management.
The risk of specialization and consequent limitation of activity due to portfolio has been mitigated in all Sonaecom's businesses, through the expansion of the product line or business segments.
WeDo Technologies continues to consolidate its global presence outside Portugal and has identified new target business sectors since 2009, in order to reduce exposure to centralization in a single market and in a single line of products. Therefore, to offset the concentration of clients in the telecommunications sector, it expanded the scope of its activity into new sectors, like retail, energy, and financial sectors. It also enlarged its product portfolio, expanding from revenue assurance and fraud management to business assurance. Also, since 2012, following the acquisition of Connectiv Solutions in the USA, WeDo Technologies has made a commitment to managed services and Software as a Service (SaaS).
In the case of S21Sec, one of the strategic priorities is to strengthen its position in the telecommunications sector, while still maintaining its focus in the financial segment. In addition, its product portfolio is to be extended in order to evolve in the e-crime market and incorporate analytic technologies, thus allowing the expansion of its operating area.
Bizdirect has recently expanded its portfolio to the integration of solutions focused on Microsoft technologies.
Saphety, apart from being divided into three types of solutions that can operate in integrated fashion SaaS: SaphetyGov, SaphetyBuy and SaphetyDoc, has widened its portfolio to a new solution: SaphetySync. This is a global standard solution, based on GS1 standard, which allows for the continuous and safe data synchronization, thus representing a differentiating key-factor for the internationalization of its portfolio.
Since Sonaecom businesses are particularly focused on the use of technology, potential faults with technical/operational resources (network infrastructure, information system applications, servers etc.) can present a significant risk of business interruption if they are not well managed. This, in turn, can pose other risks to the company, such as adverse impacts on our reputation and our brand, on the integrity of our revenues and client satisfaction, and on quality of service. These can lead to loss of clients.
In the IT sector, business clients typically have a lower tolerance for interruptions. In this context, SSI companies face risks associated with the availability of software platforms that support the processes as well as the corresponding clients. To identify this specific set of risks and to implement actions for prevention and mitigation that guarantee continuity of critical services and operations, Sonaecom has adopted a Business Continuity Management (BCM) programme over several years.
Confidentiality, integrity and availability (Information Security Management)
Since Sonaecom is primarily a technology, media and telecommunications (TMT) group, all its subsidiary companies extensively use technology and information that are typically subject to availability, integrity, confidentiality and privacy risks.
In addition to being a technological issue, security should also be considered as a cultural and behavioural issue. In this sense, awareness is a key success factor when it comes to promoting a strong culture of information security among employees, partners and key stakeholders. Sonaecom has developed several initiatives to raise awareness and accountability over the past few years, of which the following stand out:
A security communication plan based on campaigns to raise awareness of the issues considered most relevant in each year;
Publication of
Clauses on personal data protection and confidentiality in contracts with employees and business partners. All employees are bound to obligations of confidentiality, secrecy and protection of personal data. As such they are forbidden from disclosing to third parties information to which they have access as a result of their roles in the company. These obligations and these duties shall remain in force even after the end of the employment relationship between the company and the employee. Our business partners have, generally, the same confidentiality obligations.
For specific issues related to the confidentiality and privacy of personal data, a few Sonaecom companies has appointed a Chief of Personal Data Protection Officer (CPDPO), who:
Has responsibility for implementing and complying with the laws and regulations applicable to data processing.
Acts on behalf of the company during interactions wi Protection Commission).
Promotes the adoption of data protection principles that are consistent with international standards and best practices.
Product-service failure (professional liability)
As Sonaecom companies are customer-oriented, we give special attention to the impact that the potential failure of our products or services may have on our customers, particularly with regard to civil liability issues. Risk events can be physical (for example: damage to equipment or facilities) or non-physical (for example: error in a software installation) and, usually, they are related to accidents, unintentional acts, errors or omissions by employees or subcontractors.
The risk management strategy selected by Sonaecom for this type of risk, involves the transfer of risk through insurers in addition to the implementation of internal controls. In this context, we continue to carry out the actions designed and implemented in previous years relating to professional liability insurance, and which consist of:
Implementation of improvements in certain internal controls to further reduce the causes of risk;
Renewal of existing professional liability insurance that incorporates an extended scope of coverage and is adapted to the business realities of SSI companies and Media;
certain international locations where our general insurance policy is not applicable due to legal restrictions.
Sonaecom's businesses are exposed to a variety of financial risks associated with its operations, namely interest rate risk, foreign exchange risk, liquidity risk, and credit risks (described and analysed in detail in the Appendix to the Annual Consolidated Financial Statements).
The financial risks management policy is determined by the Board of Directors, and the risks are identified and monitored by the Finance Department and Treasury.
In addition to a management policy for each of the identified risks and the implementation of control mechanisms to identify and determine them, Sonaecom uses, among others, natural hedges, credit insurances and, occasionally, deriva attitude in relation to financial risk management is conservative and prudent, refusing speculative purposes and resorting only to high credit quality financial institutions.
Sonaecom and its subsidiaries have the support of legal and tax departments permanently dedicated to the specifications of the corresponding activity, under management's supervision, and exercising their competencies in interaction with other functions and departments, in order to pre-emptively ensure the protection of the company's interests and businesses, in compliance with their legal obligations, as well as by applying good practices. The teams in these departments have specialized training and participate in in-house and external training courses to update their knowledge.
Legal and tax advice is also provided, nationally and internationally, by outsourced resources selected from firms with established reputations and which have the highest standards of competence, ethics and experience.
these companies have a presence in several countries, which involves specific risks relating to very different legal frameworks in each country.
The SSI companies are exposed to specific national, local and sectorial laws and regulations, depending on the market they operate in; they are particularly exposed to the continuous risk of eventual regulatory changes that can condition business and, consequently, hinder or harm the range of the strategic goals.
Sonaecom collaborates with the authorities with the aim of defining an optimal legal and regulatory framework that, in our opinion, promotes the development of the communications sector in Portugal. Such collaboration may involve sending comments in response to public consultations, issued by national and international entities.
54. Description of the risk management processes: identification, assessment, monitoring, control and management The risk management process is supported by a consistent and systematic methodology, based on the international standard Enterprise Risk ns of the Treadway Commission). This methodology aims to identify business risks, assess their causes, measure triggers, manage the identified risks and, finally, monitor them.
Derived from this general framework, the management and control of the main risks facing Sonaecom, are achieved through the following key approaches and methods:
Concerning the Enterprise- businesses to prioritise and identify critical risks that might compromise their performance and goals and to take actions to manage those risks, within the predefined levels of acceptance. This is achieved through constant monitoring of risks and the implementation of certain corrective measures.
Regarding Safety Management, the implementation of Information Security Management processes is intended to manage the risks associated with the availability, integrity, confidentiality, and privacy of information. The scope of this process also includes the development and maintenance of the Information Security Policy, verification of compliance with policy procedures, development of training programmes and awareness, setting and supervision of KPIs for information security.
Finally, regarding the Specific Risk Management Cycles or Processes, the development of specific risk management cycles/processes enables the mitigation of critical risks that can impact certain processes, areas or entities, positioning these risks within the levels defined by the management team. In addition, it identifies and monitors other operational risks that management considers relevant.
55. The key elements of the risk management and internal control systems implemented in-company regarding the disclosure of financial information
Sonaecom acknowledges that, as with other listed companies with similar activities, it is potentially exposed to risks related to the financial and cial risk management is conservative and prudent, and these principles have been maintained during 2014.
Therefore, Sonaecom is committed to ensuring an effective internal control environment, particularly regarding the financial reporting process. It seeks to identify and improve the most relevant processes in terms of the preparation and disclosure of financial information, with the objectives of transparency, consistency, simplicity and materiality. The internal control system aims to obtain reasonable assurance regarding the preparation of financial statements, in accordance with accounting principles and adopted policies, and warranting the quality of financial reporting.
The internal control system for the accounting department and the preparation of financial statements, includes the following key controls:
The most significant accounting estimates are disclosed in the notes to the financial statements. These estimates were based on the best information available during the preparation of the financial statements, and in the best knowledge and experience of past and/or present events. The most significant balances and transactions with related parties are disclosed in the notes to the financial statements. In the appendix to the report, we present a list of all parties related to the Sonaecom Group. These are mainly associated with the operational activities of the Group, as well as the granting and obtaining of loans under a
More specific information regarding how these and other risks were mitigated, is disclosed in the notes to the financial statements.
56. Department responsible for investor relations, composition, functions, information provided by these services and contact details current and potential investors, analysts and market authorities with the go activities, by providing relevant, timely and reliable information.
The department regularly prepares presentations and communications covering quarterly, half-year and annual results. Likewise, it is also its responsibility to issue announcements to the market, whenever necessary, disclosing or clarifying any relevant event that could influence
Any interested party may contact the Investor Relations Department using the following contact details:
Carlos Alberto Silva Tel: (+351) 22 010 2349 Fax: (+351) 22 011 8561 E-mail: [email protected] / [email protected] Address: Building 1.A Lugar do Espido Via Norte 4471-909 Maia Website: www.sonae.com
57. Legal representative for Capital Market Relations The legal representative for Capital Market Relations and Euronext is António Bernardo Aranha da Gama Lobo Xavier, who may be contacted by phone or e-mail: Tel: (+351) 22 010 2349 Fax: (+351) 22 011 8561 E-mail: [email protected] / [email protected] Address: Building 1.A Lugar do Espido Via Norte 4471-909 Maia
58. Details regarding information requests received during the target year or pending from previous years, amount and average response time
During 2014, the Investor Relations Department received a normal number of information requests, considering the size of the company in the capital markets. These information requests were submitted either by e-mail or post, or by phone. The response to these requests was provided with the maximum possible speed. The average response time, without prejudice to the complexity of the matter, didn't exceed 2 working days.
59. Address www.sonae.com
60. Location of the information mentioned in Article 171 of the Portuguese Companies Act
Website: http://www.sonae.com/investidores/governo-das-sociedades/
61. Location where the Articles of Association, Bodies and/or Commi Website: http://www.sonae.com/investidores/governo-das-sociedades/orgaos-de-administracao-e-fiscalizacao/
62. Location where is provided information concerning the identity of the governing bodies, the representative for market relations, the Investor Relations Department, functions and means of access
Websites:http://www.sonae.com/investidores/governo-das-sociedades/equipa-de-gestao/ http://www.sonae.com/investidores/contactos/
63. Location of accounting documents and the calendar of corporate events
Accounting documents: http://www.sonae.com/investidores/informacao-financeira/relatorios/ Calendar of corporate events: http://www.sonae.com/investidores/calendario-do-investidor/
64. Location of the notice for the General Meeting and all the preparatory and subsequent information related to it Website: http://www.sonae.com/investidores/governo-das-sociedades/assembleia-geral/
65. Location of the historical records with the resolutions tak voting results, with reference to the previous three years Website: http://www.sonae.com/investidores/governo-das-sociedades/assembleia-geral/
66. Competence for determining the remuneration of Governing bodies, members of the Executive Committee or Managing Director and the
s and other Statutory Governing Bodies, Meeting.
67. Composition of the Remuneration Committee, including identification of other individuals or companies hired to provide support and statement on the independence of advisors
Sonaecom has a Remuneration Committee consisting of two members: Paulo Azevedo, on behalf of Sonae SGPS, S.A. and Francisco de la Fuente Sánchez, on behalf of Sontel BV.
The company has not hired any entities to provide regular support to the Remuneration Committee.
When establishing the remuneration policy, the Remuneration Committee resorts to benchmark studies on remuneration practices annually disclosed by the internationally renowned consultants Hay Group and Mercer, and also by companies included in the main Portuguese Stock bmitted to the approval of the
The members of the Remuneration Committee are independent in relation to the Board of Directors.
68. Knowledge and experience of the members of the Remuneration Committee on remuneration policy
ricula vitae and available for consultation in Appendix II of this report. These qualifications allow them to exercise their responsibilities competently and accurately, each having the appropriate skills to perform their duties.
69. Description of the remuneration policy of the Board of Directors and the Supervisory bodies
ation to goals regarding the remuneration of members of the Statutory Governing Bodies are elaborated taking into account (i) overall market comparisons, (ii) practises of similar companies, including other segments of the Group with comparable situations and (iii) each made of their performance.
shareholders, such that, among the various component parts of the remuneration package, the variable component, the value of which depends on the the Company in which business risks are carefully considered, is thus encouraged.
The remuneration policy includes control mechanisms, which consider the link between individual and group performance, in such a manner as to avoid behaviour which is likely to involve excessive risk. This goal is also achieved by limiting the maximum value of each Key Performance Indicator (KPI).
The body responsible for approval of the remuneration of both executive and non-executive members of the Board of Directors and the other statutory governing bodies o
have been established and reflected in the Remuneration and Compensation Policy, currently in operation (available for consultation at the website http://other.static.sonae.com/2014/07/31/Prop5PT/Prop5PT.pdf?download=1 April 2014. The Remuneration and Compensation Policy is based on the following principles.
Remuneration Policy Principles:
Competitive:
At Sonaecom, the remuneration policy is determined by comparison with the overall market and the practices of comparable companies. This information is obtained from the main remuneration surveys carried out independently for Portugal and the main European markets. Currently, the market surveys conducted by Mercer and the Hay Group are used as references.
The average value for top managers in Europe is used to determine the figures for the overall market. The companies that make up the pool of comparable companies, are those included in the Portuguese stock market index, the PSI-20.
The remuneration package applicable to Executive D remuneration packages in Portugal and across Europe, seeking to ensure that fixed remuneration is equal to the median market value and the total remuneration is close to the market third quartile.
ined by the success of the Company. The variable component of remuneration is structured in such a way as to establish a link between the sums awarded and the level of performance, both at individual and group level. If predefined objectives are not achieved, measured through KPIs applicable to the business and to the individual performance, the total or some part of the value of short and medium term incentives will be reduced.
Part of the variable remuneration of Executive Directors is paid in the form of shares and deferred for a period of 3 years.
the manner in which the Executive Director has contributed towards this result. Hence, the interests of directors are aligned with those of Shareholders and with medium term performance.
All aspects of the remuneration structure are clear and openly disclosed internally and externally through documentation published on the
positioning, the expectations and motivations of our employees and the need to retain talent.
The Remuneration and Compensation Policy currently in operation, that took place on the 24 April 2014, and is based on the following principles:
· no compensation payments to Board Directors or members of Statutory Governing Bodies related to the cessation of their duties, whether their resignation occurs according to their original mandate or whether it is anticipated for whatever reason, without prejudice to the obligation of the Company to comply with any relevant legislation in force in this area;
· non-existence of any specific system of benefits, in particular relating to retirement, in favour of members of the Board of Directors, auditing bodies and other executives.
Sonaecom reviews its remuneration policy annually as part of its risk management process, in order to ensure that it is entirely consistent with its desired risk profile. During 2014, no problems relating to payment practice were found that posed significant risks to the Company.
In designing remuneration policy, care has been taken not to encourage excessive risk-taking behaviour, attributing significant importance, but at the same time a balanced approach, to the variable component, thus closely linking individual remuneration to group performance.
Sonaecom has in place internal control procedures concerning remuneration policy, which target the identification of potential risks. Firstly, the variable remuneration structure is designed in such a way as to discourage excessive risk-taking behaviour to the extent that remuneration is linked to the evaluation of performance. The existence of KPI goals constitutes an efficient control mechanism. Secondly, the Company does not allow contracts to be signed that would minimise the importance of the Medium Term Incentive Plan (MTIP). This policy includes forbidding any transaction that might eliminate or mitigate the risk of share price variations.
l situation and market practice, and does not include any variable remuneration.
Th a proposal from the Statutory Audit Board.
70, 71, 72 and 73. Information regarding how remuneration is structured to align the interests of management body members with the -term interests, as well as how it is based on performance evaluation and lack of incentives to take on excessive risk. Reference, if applicable, to the variable remuneration policy and how performance evaluation can potentially affect this component. Deferred payment of the variable remuneration component, specifying the deferral period. Criteria underpinning the attribution of variable tention of these shares in the event of any contracts related to them, specifically hedging or risk transfer contracts, the respective limit, and their relationship with the total annual remuneration and the c managers
The Remuneration and Compensation Policy applicable to statutory governing bodies and its managers complies with community guidelines, national legislation and the recommendations of the Securities Market Commission. It is based on the presumption that initiative, competence and commi -term interests, with the aim of sustainability.
The content of the performance indicators, on which the variable remuneration component depends, and its specific role in determining actual remuneration, ensures that the Executive Directors are aligned with the defined strategic objectives and the compliance with the legal standards
Therefore, for each financial year, individual performances and contributions to collective success are assessed and the results will necessarily
The remuneration of executive directors is determined according to the level of responsibility of the director involved. The salary is paid in 14 monthly amounts and is subjected to annual review.
Above and beyond the fixed remuneration, Executive Directors are also entitled to a variable remuneratio Remuneration Policy. The variable remuneration is divided into two equal parts:
ture and, in view of the fact that it is dependent on the achievement of objectives, its payment is not guaranteed. Variable remuneration is determined annually with the value based on a predefined goal of between 33% and 60% of total annual remuneration (fixed remuneration, plus variable remuneration target values). The weight of the overall variable
Of this amount, around 70% is based on business, economic and financial KPIs. These indicators are objectives, which are divided into collective and departmental KPIs. Collective business KPIs are economic and financial indicators based on budgets for the performance of each business unit, as well on the overall consolidated performance of Sonae. On the other hand, departmental business KPIs are of a similar nature to Collective KPIs in that they are directly influenced by the performance of the Executive director concerned. The remaining 30% are determined based on the achievement of personal KPIs, which include both objective and subjective indicators. The result of departmental business KPIs and individual KPIs can vary between 0% and 120 % of the predefined goal. Combining all component parts, the value of the bonus has a minimum of 0% and a maximum limit of 140% of the predefined bonus objective.
Variable remuneration can be paid in cash, shares or a combination of cash and shares.
The Medium Term Variable Performance Bonus aims to co those of the shareholders and increasing the awareness of their importance on the overall success of the Company. Variable remuneration is awarded annually, according to the results of the previous year, and is then integrated into the MTPB plan. Payment of this component of variable remuneration is dependent on the director continuing to work with the Company for a period of three years after its award, as well as the overall continuing success of the company during this period, measured in accordance with the objectives set by the
If, subsequently to being awarded the right to this kind of remuneration and before exercising this rights, dividends are distributed, changes are made in the nominal value of shares or share capital is changed, the number of shares on the plan will be adjusted to the number of shares that, considering the above modifications, are equivalent to the number of initial shares. This maintains an alignment with the total shareholder return. At the vesting date, shares are only delivered if the criterion for continuing positive performance of the company, mentioned above, is met. Payment is made by delivering shares at a discount that can vary between 90% and 100%, although Sonaecom retains an option to pay an equivalent value in cash.
The remuneration of Non-Executive directors, when existing, will be exclusively composed of fixed values, determined by reference to market values. Therefore, for each Non-Executive director, approximately 15% of fixed remuneration will be dependent on the attendance rate of the meetings of the Board of Directors. In addition, an annual responsibility allowance will be paid. The fixed remuneration can be increased by up to 6% for those non- will be no variable remuneration.
74. Criteria underpinning the assignment of variable remuneration in options, indication of the deferral period and the exercise price Not applicable. The Company did not establish any variable remuneration in options.
The main parameters and reasoning concerning the variable remuneration system are disclosed in the remuneration policy approved in the Shareholders General Meeting, http://other.static.sonae.com/2014/07/31/Extracto\da\_Acta\_AG\_Sonaecom\_24042014\_Portugu\\_s/Extracto\_da\_Acta\_AG\_Sonaecom\_240 42014\Portugu\\_s.pdf?download=1
Not applicable. The Company does not have any complementary pension or early retirement schemes for Directors, and there are no other significant benefits in kind.
77, 78 and 79. Indication of the annual remuneration earned, in aggregate of Directors, including fixed and variable remuneration. Related to this, reference to the different components that led to them, amounts of any kind paid by other controlled or Group companies, or those under shared control, and remuneration paid as profit sharing and/or bonus payments and the reasons why such bonuses and/or profit sharing payments were made
The remuneration for each Sonaecom director, awarded by the Company and Group Companies during the year 2014 and 2013, is summarized in the charts below.
| 2014 | 2013 | |||||||
|---|---|---|---|---|---|---|---|---|
| Fixed | Annual Performance |
Medium Term | Fixed | Annual Performance |
Medium Term | |||
| Amounts in euros | Remuneration | Bonus | Incentive Plan | Total | Remuneration | Bonus | Incentive Plan | Total |
| Individual breakdown | ||||||||
| Executive Directors | ||||||||
| Ângelo Gabriel Ribeirinho dos Santos Paupério (CEO) | 162 018 | 125 100 | 125 100 | 412 218 | 287 190 | 302 800 | 302 800 | 892 790 |
| Maria Cláudia Teixeira de Azevedo | 147 332 | 75 415 | 75 415 | 298 162 | 147 442 | 67 300 | 67 300 | 282 042 |
| António Bernardo Aranha Gama Lobo Xavier | 198 320 | - | - | 198 320 | 198 430 | - | - | 198 430 |
| 507 670 | 200 515 | 200 515 | 908 700 | 633 062 | 370 100 | 370 100 | 1 373 262 | |
| Non-Executive Directors | ||||||||
| Duarte Paulo Teixeira de Azevedo (Chairman) (1) | 18 940 | - | - | 18 940 | 60 710 | - | - | 60 710 |
| Jean François René Pontal (2) | 11 730 | - | - | 11 730 | 39 730 | - | - | 39 730 |
| David Charles Denholm Hobley (2) | 10 790 | - | - | 10 790 | 37 300 | - | - | 37 300 |
| António Maria Theotonio Pereira Sampaio Mello (2) | 10 790 | - | - | 10 790 | 35 970 | - | - | 35 970 |
| Nuno Manuel Moniz Trigoso Jordão (3) | - | - | - | - | 11 748 | - | - | 11 748 |
| Frank Emmanuel Dangeard (2) | 10 530 | - | - | 10 530 | 34 830 | - | - | 34 830 |
| Gervais Pellissier (2) | - | - | - | - | - | - | - | |
| 62 780 | - | - | 62 780 | 220 288 | - | - | 220 288 | |
| Total | 570 450 | 200 515 | 200 515 | 971 480 | 853 350 | 370 100 | 370 100 | 1 593 550 |
(1) The value for Duarte Paulo Teixeira de Azevedo for 2014 and 2013, disclosed in the table above, is related to management services recharged by Sonae to Sonaecom. The values recharged by Sonae to Sonaecom represents the equivalent cost of his services centralised at Sonae SGPS during 2014 and 2013. He left the Board of Sonaecom on 2014.04.30 and the recharging of management services ceased on that date.
(2) The values for Non-Executive Directors for 2014 relate to the 4 months ended 2014.04.30 (the date they left the Board of Sonaecom) and full year 2013.
(3) The value for Nuno Manuel Moniz Trigoso Santos Jordão for 2013, disclosed in the table above, is related to management services recharged by Sonae to Sonaecom. The values recharged by Sonae to Sonaecom represents the equivalent cost of his services centralised at Sonae SGPS during 2013 up to the date he left the Board of Sonaecom on 2013.05.09.
| Unvested | |||||
|---|---|---|---|---|---|
| Plan 2010 | Plan 2011 | Plan 2012 | Plan 2013 | Total | |
| Award date | 10 Mar 2011 | 09 Mar 2012 | 08 Mar 2013 | 10 Mar 2014 | |
| Sonaecom shares (4) | |||||
| Share price at award date(1) | 1.399 | 1.256 | 1.505 | ||
| Share price at vesting date | |||||
| Share price at 31 December 2014(2) | 1.450 | 1.450 | 1.450 | ||
| Ângelo Gabriel Ribeirinho dos Santos Paupério (CEO) | |||||
| Number of shares at 01 January 2014 | 150 417 | 168 240 | 96 070 | 414 727 | |
| Number of shares at 31 December 2014 | |||||
| Maria Claúdia Teixeira de Azevedo | |||||
| Number of shares at 01 January 2014 | 55 647 | 53 265 | 33 624 | 142 536 | |
| Number of shares at 31 December 2014 | |||||
| António Bernardo Aranha Gama Lobo Xavier | |||||
| Number of shares at 01 January 2014 | |||||
| Number of shares at 31 December 2014 | |||||
| Total | |||||
| Number of shares at 01 January 2014 | 206 064 | 221 505 | 129 694 | 557 263 | |
| Number of shares at 31 December 2014 | |||||
| Sonae SGPS shares (4) | |||||
| Share price at award date (1) | 0.811 | 0.401 | 0.701 | 1.337 | |
| Share price at vesting date | 1.333 | ||||
| Share price at 31 December 2014(3) | 1.024 | 1.024 | 1.024 | 1.024 | |
| Ângelo Gabriel Ribeirinho dos Santos Paupério (CEO) | |||||
| Number of shares at 01 January 2014 | 173 401 | 348 961 | 133850 | 656 212 | |
| Number of shares at 31 December 2014 | 712 913 | 339 898 | 232 692 | 1 285 503 | |
| Maria Claúdia Teixeira de Azevedo | |||||
| Number of shares at 01 January 2014 | 41 239 | 71 024 | 30 116 | 142 379 | |
| Number of shares at 31 December 2014 | 185 178 | 101 776 | 51 718 | 338 672 | |
| António Bernardo Aranha Gama Lobo Xavier | |||||
| Number of shares at 01 January 2014 | |||||
| Number of shares at 31 December 2014 | |||||
| Total | |||||
| Number of shares at 01 January 2014 | 214 640 | 419 985 | 163 966 | 798 591 | |
| Number of shares at 31 December 2014 | - | 898 091 | 441 674 | 1 339 765 | |
| Values | |||||
| CEO | |||||
| Value at award date | 351 062 | 351 243 | 238 414 | 940 719 | |
| Value at vesting date | 231 144 | 231 144 | |||
| Values at 31.12.2014 | 730 023 | 348 056 | 238 277 | 1 316 355 | |
| Maria Claúdia Teixeira de Azevedo | |||||
| Value at award date | 111 295 | 95 381 | 71 715 | 278 392 | |
| Value at vesting date | 54 972 | 54 972 | |||
| Values at 31.12.2014 | 189 625 | 104 219 | 52 959 | 346 803 | |
| António Bernardo Aranha Gama Lobo Xavier | |||||
| Value at award date | |||||
| Value at vesting date | |||||
| Values at 31.12.2014 | |||||
| Total | |||||
| Value at award date | 462 357 | 446 624 | 310 130 | 1 219 110 | |
| Value at vesting date | 286 115 | 286 115 | |||
| Values at 31.12.2014 | 919 648 | 452 274 | 291 236 | 1 663 158 |
(1) Average share price in the month prior to the award date;
(2) On 9 January 2014, the share price hit a high of 2.651 euros and a low of 1.27 euros per share on 17 December 2014;
(3) On 12 November 2014, the share price hit a high of 1.058 euros and a low of 0.942 euros per share on 16 October 2014.
(4) At 10 March 2014, Sonaecom shares plans were fully converted into shares Sonae SGPS. This conversion was based on the terms of trade set out in the Tender Offer at 20 February 2014 (1 share Sonaecom - approximately 2.05 Sonae SGPS shares)
| Sonaecom | Sonae SGPS | Total | |||
|---|---|---|---|---|---|
| Amounts (in euros) | Role | Total remuneration | Role | Total remuneration | |
| Name | |||||
| Ângelo Gabriel Ribeirinho dos Santos Paupério | CEO | 412 218 | Executive | 628 682 | 1 040 900 |
| Duarte Paulo Teixeira de Azevedo (1) | Chairman | 18 940 | CEO | 1 253 660 | 1 272 600 |
(1) The amounts disclosed in the table above are the amounts of remuneration awarded by each Group company, independently of where they are processed and paid.
80. Compensation paid or owed to former Executive Directors following loss of office No compensation was paid or is currently owed to former Executive Directors in relation to early loss of office during 2013 and 2014.
81. Indication of the annual remuneration earned, in aggregate and individual amount, by l situation and market practice, and does not include any variable remuneration.
The amount of fixed annual remuneration for members of this body in 2013 and 2014, was as follows:
| 2014 | 2013 | |
|---|---|---|
| Amounts in euros | ||
| Individual breakdown | ||
| Statutory Audit Board | ||
| Arlindo Dias Duarte Silva | 9,900 | 10,010 |
| Armando Luís Vieira Magalhães | 7,900 | 8,010 |
| Óscar José Alçada Quinta | 7,900 | 8,010 |
| Jorge Manuel Felizes Morgado | ||
| Total | 25,700 | 26,030 |
ixed annual remuneration of 5,000 euros and the Secretary earns a fixed annual remuneration of 1.500 euros.
83. e and its relation with the variable component of the remuneration
There are no agreements in place with members of the Board of Directors that establish amounts to be paid in case of dismissal without due cause, without prejudice to the applicable legal provisions.
84. Reference to the existence and description, stating the sums involved, of the agreements between the company and members of the Board of Directors, providing for compensation in case of dismissal without due cause or termination of the employment relationship, following a change in Company control
There are no agreements made between the company and members of the Board of Directors, that provide for compensation in cases of dismissal, unfair dismissal or termination of employment following a change in Company control.
85 and 86. Identification of the plan and respective recipients. Plan features (assignment conditions, share transfer clauses, share price and option exercise price criteria, period during which options can be exercised, features of the shares or options to be assigned, incentives to acquire shares and/or exercise options).
The MTPB is designed to align the interests of employees and Executive Directors with the success of the company, reinforcing their engagement and the perception of the impact of their performance on the success of Sonaecom.
The MTPB is applicable to all Sonaecom Group companies. Regarding Público Comunicação Social, S.A. and the companies owned by it, the attribution rules are more restricted than those described below and this is not expected to change.
The MTPB is subjected to the Medium Term Incentive Plan eligibility rules described in this report.
The general terms of the MTIP and any significant amendments thereto are reviewed by the Remuneration Committee and then approved at proved at the
All Sonaecom employees at Sonaecom Management Levels GF1 to GF6 are eligible to be awarded a Medium Term Performance Bonus under the MTIP, provided that they held Management Level GF6 or higher, on 31 December of the respective performance year.
Classification as Management Level GF6, on recruitment or by promotion, does not automatically give entitlement to the award of a MTPB. Any decisions to make an award, including the value awarded (which is calculated as a percentage of the individual annual fixed remuneration), should take into account the total variation in the compensation package of each employee. It is recommended that, for the first MTPB awarded, the value should be equal or lower than 50% of the higher value recommended for the same Management Level.
The MTPB reference values for employees with Management Levels GF1 and GF2 is based on a percentage of their total Target Performance Bonuses , which is defined on an individual basis, and taking into account their level of qualification, the structure of their compensation package and the achievement of personal KPIs.
Reference values for Executive Directors (Management Levels GF1 and GF2) are approved by the Remuneration Committee. As for Management Level GF3 employees, the reference value is approved by the Chairman of the Board of Directors.
The competent bodies above may decide to alter the value of individual MTPBs to be awarded, should the value be considered to be no longer appropriate.
The value of the MTPB may alter over the period between the awarding date and the vesting date, as it is linked to a standard share package and to the Total Shareholder Return of the respective Sonae SGPS, S.A. (Sonae) and/or Sonaecom SGPS shares. Vesting is dependent on the overall continuing success of the company during said period, measured in accordance with the objectives set by the Remuneration Committee every three years.
For employees with Management Levels GF3, GF4, GF5 and GF6, the MTPB reference values are based on a percentage of the Annual fixed remuneration, which is defined on an individual basis, taking into account their level of qualification, the structure of their compensation package and also the achievement of personal KPIs.
The MTPB reference value for employees who have a monthly performance bonus (commissions) is calculated based on the overall value of commissions received annually and taking into consideration the higher values awarded to other employees with the same Management Level. Whenever the annual commissions awarded are outside the above range, Sonaecom may decide to adjust them.
| Management Level | Reference values for MTPB (% of annual fixed remuneration) |
|---|---|
| GF3 | Up to 65% |
| GF4 | Up to 60% |
| GF5 | Up to 50% |
| GF6 | Up to 45% |
The MTPB plan is established annually, based on the variable remuneration awarded, and each plan has a three year term. As from the award date of the third consecutive plan, three tri-annual plans will be open.
The MTPB is valued at the award date, based on the listed share prices in Portugal of the shares that make up the respective share package. Regarding Sonae shares, the most favourable of the following prices is used: the closing price on the first working day after Sharehold Meeting. In the case of Sonaecom shares, the value is calculated by dividing the average of the closing prices of the last 30 trading sessions, before the award date.
If, subsequent to being awarded the right to this kind of remuneration and before exercising this right, dividends are distributed, changes are then the number of shares, which the director has been awarded, will be adjusted to an equivalent number, taking into account the impact of these changes.
Vesting of the MTPB
On the vesting date of MTPB plans three years after being awarded -, compensation is paid in the form of shares or as a discount when purchasing shares.
rather than delivering actual shares, provided that the Shareholding and Retention Policy described below is complied with, when applicable.
Levels: GF1 and GF2):
Each GF1 or GF2 is required to retain 50% of the shares delivered on the vesting of each Plan until they hold, on an accumulated basis, a total number of shares that is equivalent to the value of two annual fixed salaries. The requirement to retain shares ends as soon as the respective manager holds, on an accumulated basis, a total number of shares that meets the agreed shareholding requirement, either by retaining MTPB shares awarded or by acquiring shares in their individual name. The inclusion of the latter shares is optional and is of the exclusive decision of each manager, who, in this case, should inform the company of this intent and provide the respective share information. For this purpose, the annual fixed salary is the monthly base remuneration paid 14 times a year.
The SH&R Policy was applied on a transitional basis to the 2004_05/2008 and the 2005_06/2009 Plan, with a share retention level of 20% of the shares attributed under each case. The 2006 Plan and subsequent ones, are subjected to a share retention level of 50%.
The SH&R Policy, is to be managed individually by the employees involved and will be monitored by the Human Resources and the Accounting and Administrative departments.
The Executive Directors shall not sign, nor will sign contracts with the Company or with third parties that would have the effect of mitigating the risk inherent in the variability of the remuneration established by the company.
The right to MTPB ceases when an employee no longer shares a legal or administrative relationship with Sonae, or any company that represents the sub-holding where they work, nor any other company directly or indirectly affiliated with either of the above. In the event of death or permanent disability, the MTPB is valued at current market prices of the shares and the equivalent value in cash will be paid to the employee or to his or her legal heirs. In the event of retirement, rights to a MTPB are retained and vest on the normal vesting date.
88. Planned control mechanisms for any employee share capital participation scheme, to the extent voting rights are not directly exercised by them
T
89. Mechanisms implemented by the Company to monitor transactions with related parties (for the purposes of the concept of IAS 24) Sonaecom endeavours to carry out transactions with related parties based on principles of rigour and transparency, and in strict observance of the rules of market competition. Such transactions are subject to specific internal procedures based on mandatory standards, in particular transfer pricing rules, or on voluntarily adopted internal systems of checks and balances for example, formal validation or reporting processes, depending on the value of the transaction in question.
In this regard, Sonaecom has adopted specific procedures in order to prevent conflicts of interest, promoting communication between the Board of Directors and the Statutory Audit Board, which provides the necessary clarifications to assure that transactions are concluded under normal market conditions.
90. Indication of transactions subjected to control in the reference year
During the 23 and 24 of Jannuary 2014, within the Voluntary Tender Offer launched by Sonaecom and under the CMVM Recommendations, a few Executives and Sonaecom related parties have disposed of 1.454.134 ordinary shares, voting rights related, to Sonae - SGPS, S.A.. Further information regarding this transaction is disclosed in the announcement issued to the market on the 24 Jannuary 2014 and is available for consultation in the following website: http://www.sonae.com/investidores/comunicados/. This transaction was executed under normal market conditions and were evaluated by the Statutory Audit Board. Besides this transaction, the Company did not execute any other transactions with any member of the Board or supervisory bodies during the 2014 financial year.
91. Description of the procedures and criteria for intervention of the Statutory Audit Board for the purpose of preliminary assessment of the business carried out between the Company and holders of qualified shareholdings or entities that are in a relation with them, under the terms of article 20 of the Portuguese Securities Code
Transactions with owners of qualified shares or with entities related in any way with them, under the terms of article 20 of the Portuguese Securities Code, are subject to a formal prior opinion by the Statutory Audit Board, if their value exceeds 10 million euros. In addition, all transactions with related parties in excess of 1 million euro, are also submitted to quarterly reports by the Statutory Audit Board.
92. Location of accounting documents containing information regarding transactions with related parties, in accordance with IAS 24 or, alternatively, disclosure of this information
Information on transactions with related parties, in accordance with IAS 24, can be found in note 34 of the 2014 Consolidated Financial
The Corporate Governance Report provides a description of the Corporate Governance structure, policies and practices followed by the Company under the terms of article 245-A of the Portuguese Securities Code and information duties required by CMVM Relation no. 4/2013, of 1 August. The Report additionally discloses, in light with the principle of comply or explain, the terms of compliance by the Company with the CMVM Recommendations contained in the CMVM Corporate Governance Code (2013).
The Report should be read as an integral part of the Annual Management Report and the Individual and Consolidated Financial Statements for the year 2014.
The requirements for the provision of information as per article 3 of Law no. 28/2009, of 19 June, articles 447 and 448 of the Portuguese Companies Act, article 245-A of the Portuguese Securities Code and of CMVM Regulation no. 5/2008, have also been fulfilled. The Company has adopted the CMVM Recommendations on Corporate Governance in July 2013.
All of the rules and regulations mentioned in the Report are publicly available at www.cmvm.pt.
The governance model adopted by Sonaecom enabled the Board of Directors to operate normally, and none of the other statutory governing bodies have reported any constraints to their normal functioning. The Statutory Audit Board exercised its supervisory function, having received appropriate support from the Board of Directors to this end, via regular provision of information.
ted the examinations and verifications deemed necessary to review and legally certify the accounts, interacting with the Statutory Audit Board, within the framework of their competences and responsibilities and with full cooperation from the Board of Directors.
The Board of Directors has been carrying out its duties and cooperating with the Statutory Audit Board and the Statutory External Auditor, when so requested, in a transparent and rigorous manner and in compliance with its Terms of Reference and best corporate governance practices.
In accordance with the corporate governance recommendations published in July 2013 by the CMVM, the following section gives a detailed description ncludes shareholding positions of our directors.
The full text containing the corporate governance guidelines currently adopted by Sonaecom - whether published by specific regulation, recommendation or voluntarily, including the Code of Conduct and, in particular, the internal regulations for share transactions and Conflicts of Interest , are made publicly available on our website www.sonae.com and also at the CMVM website: www.cmvm.pt.
The CMV December 2014, are listed below.
1.1. Companies shall encourage shareholders to attend and vote at general meetings, namely by not setting an excessively large number of shares required for the entitlement of one vote, and by implementing the means necessary to exercise the voting right by post and electronically.
The Company encourages its shareholders to participate in general meetings, in particular by assigning to each share one vote, not limiting the number of votes that may be held or exercised by each shareholder and making available to shareholders the means necessary to exercise voting by post or electronically.
Additionally, the Company publishes on its website, from the date of notice of each General Meeting, standard documentation for participation at the General Meeting, thereby facilitating the shareholde a specific e- and for the reception of all communications to participate in the General Meeting.
I.2. Companies shall not adopt mechanisms that hinder the passing of resolutions by shareholders, including setting a resolution-fixing quorum greater than that required by law.
I.3. Companies shall not establish mechanisms that might cause mismatching between the right to receive dividends or the subscription of new securities and the voting right of each common share, unless duly substantiated in terms of long-term interests of shareholders.
ised by a sole shareholder, either individually or in agreement with other shareholders, shall also foresee that, at least every five years, the maintenance of such bylaw provision shall be subject to a resolution at the General Meeting with no requirements for an aggravated quorum as compared to the legal one and that in said resolution, all votes issued be counted, without applying said restriction.
I.5. Measures that require payment or assumption of fees by the company in the event of change of control or change in the composition of the Board and are able to impair the free transfer of shares and the free assessment by shareholders of the performance of Board members, shall not be adopted.
The Company does not adopt, unilaterally, policies that have the effect of any restrictions listed in this recommendation. __________________________________________________________________________________________________
II.1.1. Within the limits established by law, and unless the company is of a reduced size, the board of directors shall delegate the daily management of the company, and the delegated duties should be identified in the Annual Report on Corporate Governance.
The Board of Directors trusts that, considering the current structure itself reduced to three -, there is no need to delegate the daily management of the company to an Executive Committee or a Delegated Director.
business, exercising all management acts pertaining to its corporate purpose, monitoring risks and setting strategic guidelines. Thus, all Board members perform executive duties. Maria Cláudia Teixeira de Azevedo who is currently an Executive Director at Sonaecom, is the CEO of the SSI - sub-holding of Sonaecom - and Online & Media divisions.
II.1.2. The Board of Directors shall ensure that the company acts in accordance with its goals and should not delegate its duties, as regards es; ii) definition of the corporate structure of the group; iii) decisions considered to be strategic due to the amount, risk and particular characteristics involved.
II.1.3. In addition to its supervisory duties, the General and Supervisory Board shall take full responsibility at corporate governance level, hence, either through the statutory provision, or equivalent, it must be established, as a mandatory requirement, that this body to decide on the strategy and major policies of the company, the definition of the corporate structure of the group and the decisions that shall be considered strategic due to the amount or risk involved. This body shall also assess compliance with the strategic plan and the
II.1.4. Unless the company is of a reduced size, and depending on the adopted model, the Board of Directors and the General and Supervisory Board shall create the necessary committees in order to:
ts own overall performance. And further yet, the performance of all existing committees;
b) Reflect on the system structure and governance practices adopted, verify its efficiency and propose to the competent bodies measures to be implemented with a view to their improvement.
The Board of Directors has decided that, considering the current dimension of the company, the existence of a specific Committee to ensure the effectiveness and the quality of the work performed by Executive Directors is not justified. Such responsibility is delegated to the Remuneration Committee.
The Company has a Corporate Governance Officer who reports hierarchically to the Board of Sonaecom and its main duties are to assess the system structure and governance practices adopted, verify its efficiency and propose to the competent bodies measures to be implemented with a view to their improvement (as detailed above in Part I, paragraph 29).
II.1.5. Depending on the applicable model, the Board of Directors or the General and Supervisory Board should set goals in terms of risktaking and create systems for their control to ensure that the risks effectively incurred are consistent with those goals.
The Board of Directors has established internal risk control systems which are monitored by the Statutory Audit Board.
II.1.6. The Board of Directors shall include a sufficient number of non-executive members, whose role is to ensure effective monitoring, supervision and assessment of the activity of the remaining members of the board.
The current dimension of the company does not justify the existence of non-executive Directors. As a supervisory body, the Statutory Audit Board is responsible for supervising and assessing the activity of the members of the Board of Directors.
II.1.7. The non-executive members of the management body shall include a number of independent members as appropriate, taking into account the adopted corporate governance model, the size of the company, its shareholder structure and the relevant free float.
The independence of the members of the General and Supervisory Board and members of the Audit Committee shall be assessed under the terms of the legislation in force. The other members of the Board of Directors are considered independent, if the member is not associated with any specific group of interests in the company nor is under any circumstance likely to affect an exempt analysis or decision, namely due to:
a. Having been an employee of the company or of a company holding a controlling or group relationship with the latter, within the last three years;
b. Having, in the past three years, provided services or established a commercial relationship with the company or company which is in a control or group relationship with the latter, either directly, or as a partner, board member, manager or director of a legal person;
c. Being paid by the company or by a company with the latter in a control or group relationship, other than the remuneration paid for the exercise of Board member functions;
d. Living with a partner or being spouse, relative or any next of kin relative, either direct or up to and including the third degree of collateral affinity, of board members or natural persons that are direct and indirectly holders of qualifying holdings;
e. Being a qualifying shareholder or representative of a qualifying shareholder.
II.1.8. When executive directors are requested by other Board members to supply information, the former shall do so in a timely and appropriate manner.
II.1.9. The Chairman of the Executive Board or of the Executive Committee shall submit, as applicable, to the Chairman of the Board of Directors, the Chairman of the Statutory Audit Board, the Chairman of the Audit Committee, the Chairman of the General and Supervisory Board and the Chairman of the Financial Matters Committee, the convening notices and minutes of the relevant meetings.
II.1.10. Should the Chairman of the Board of Directors carries out executive duties, said body shall appoint, from among its members, an independent member to ensure the coordination and the conditions of other non- -executive members can make independent and informed decisions or set up an equivalent mechanism to ensure such coordination.
All members of the Board of Directors, including its Chairman, have an executive role. The company believes that its current dimension and the an Executive Committee or a Delegated Director. which does not have any non-executive members.
II.2.1. Depending on the applicable model, the Chairman of the Supervisory Board, the Audit Committee or the Financial Matters Committee shall be independent in accordance with the applicable legal standard, and have the appropriate skills to carry out its duties.
The Chairman of the Statutory Audit Board, as well as all the members of this body, are independent under the terms of article 414, paragraph 5, of the Portuguese Companies Act, and possess the necessary skills and experience to perform their duties.
II.2.2. The supervisory body shall be the main representative of the External Auditor and the first recipient of the relevant reports, and is responsible for proposing the relevant remuneration and ensuring that the proper conditions for the provision of services are provided within the company.
The company fully complies with the Portuguese Companies Act, regarding duties and function of the Statutory Audit Board. The Statutory . Also, primordially receiving its reports and interacting with it according to the role of the Statutory Audit Board and in compliance with its Regulation, available at http://www.sonae.com/investidores/governo-das-sociedades/orgaos-de-administracao-e-fiscalizacao/.
II.2.3. The supervisory board shall assess annually the Statutory External Auditor and propose to the competent body its dismissal or termination of the contract as to the provision of their services, whenever justifiable grounds are present.
II.2.4. The supervisory board shall assess the functioning of the internal control systems and risk management, proposing adjustments if deemed necessary.
II.2.5. The Audit Committee, the General and Supervisory Board and the Statutory Audit Board should decide on the work plans and resources concerning the internal audit services and services that ensure compliance with the rules applicable to the company (compliance services), and should be recipients of reports made by these services, at least when it concerns matters related to accountability, identification or resolution of conflicts of interest and detection of potential irregularities.
II.3.1. All members of the Remuneration Committee or equivalent shall be independent from the members of the executive members of the board and shall include at least one member with knowledge and experience in remuneration policy.
The members of the Remuneration Committee, Duarte Paulo Teixeira de Azevedo and Francisco de la Fuente Sánchez, are independent in relation to the The curricula vitae of the Rem I of this report.
II.3.2. Any individual or entity who, in the last three years, has rendered services to any structure under the direction of the Board of Directors to the company management body itself or who currently has a relationship with the company or with a consultant of the company, should not be hired to assist the Remunerations Committee in the performance of its duties. This recommendation is equally applicable to any individual or legal entity that has a relationship with such by means of an employment or service agreement.
The company does not hire any entity that rendered services to any structure under the direction of the Board of Directors to assist the Remunerations Committee in the performance of its duties. The Remuneration Committee resorts to benchmark studies on remuneration practices annually disclosed by internationally renowned consultants, whose independence is assured either by the fact that they have no connection to the Board of Directors, or due to their broad experience and recognised status in the market.
II.3.3. The statement on the remuneration policy of the management and supervisory bodies referred to in article 2 of Law No. 28/2009 of 19 June, shall contain, in addition to the content therein stated, adequate information on:
a) Identification and explanation of the criteria for determining the remuneration granted to the members of the governing bodies;
b) Information regarding the maximum potential amount, in individual terms, and the maximum potential amount, in aggregate terms, to be paid to the members of the corporate bodies, and also the identification of the circumstances whereby these maximum amounts may be payable;
c) Information regarding the enforceability or unenforceability of payments for board members dismissal or termination of appointment.
udes the information referred to in this recommendation. Payments for the dismissal or termination of appointment of directors are not required, subject to the applicable legal provisions.
A statement on the remuneration policy is available at http://www.sonae.com/investidores/assembleias-gerais/ in the following address: http://other.static.sonae.com/2014/07/31/Extracto\da\_Acta\_AG\_Sonaecom\_24042014\_Portugu\\_s/Extracto\_da\_Acta\_AG\_Sonaecom\_24042 014\Portugu\\_s.pdf?download=1
II.3.4. A proposal for approval of plans for the allotment of shares and/or options to acquire shares or based on share price variation to board members shall be submitted to the General Meeting. The proposal shall contain all the information necessary for a proper appraisal of the plan.
II.3.5. Approval of any retirement benefit scheme established for members of the statutory governing bodies must be submitted to the he proposal shall contain all the information necessary for the correct assessment of the system.
___________________________________________________________________________________________________
III.1. The remuneration of the executive members of the board shall be based on actual performance and shall discourage excessive risk taking.
The remuneration of the members of the Board of Directors who perform executive duties is based on their effective performance and discourages excessive risk taking.
III.2. The remuneration of the non-executive board members and the members of the supervisory board, shall not include any component whose value depends on the performance of the company or of its value.
at the remuneration of non-executive members of the Board of Directors, when existing, and the remuneration of members of the Supervisory Board includes only one fixed component. As a result, these members do not receive variable remuneration nor do they participate in the MTIP.
III.3. The variable remuneration component shall be overall reasonable in relation to the fixed component of the remuneration and maximum limits should be set for all components.
n policy includes a fixed component and a variable component, as set forth in the main European reference indicators. In comparative terms, the fixed remuneration is close to the average and the total remuneration is close to the third quartile of the indicators. The variable component represents over 40% of the total income received. The minimum and maximum variable components are pre-established as a percentage of a fixed component and, thus, are objectively established.
III.4. A significant part of the variable remuneration should be deferred for a period of no less than three years and its payment should depend on the continued positive performance of the company during said period.
III.5. Members of the Board of Directors shall not enter into contracts with the company or third parties which intend to mitigate the risk inherent to remuneration variability set by the Company.
proposal of the Remuneration Committee, addresses the principle defined in this recommendation: that Executive Directors shall not sign contracts with the Company or with third parties that would have the effect of mitigating the risk inherent in the variability of the remuneration established by the company. The company did not identify any contracts of this nature.
The Remuneration policy is available for consultation at the website disclosed on paragraph II.3.3..
III.6. Until the end of their mandate, executive board members shall maintain the company's shares that were allotted by virtue of variable remuneration schemes, up to twice the value of the overall annual remuneration, except for those that need to be sold for paying taxes on the gains of said shares.
Since 2008, the company has implemented a share retention policy that fully complies with this recommendation.
III.7. If the variable remuneration includes the allocation of options, the beginning of the exercise period shall be deferred for a period not less than three years.
III.8. When the removal of the board member is not due to a serious breach of their duties, nor to their unfitness for the normal exercise of their functions, but is yet due to inadequate performance, the company shall be endowed with the adequate and necessary legal instruments, so that any damages or compensation, beyond that which is legally due, is unenforceable.
The company uses the appropriate legal instruments available in law for this situation. There are no individual contracts with the directors to establish how eventual compensations would be calculated. In addition, the company has never attributed or contemplated attributing compensation to the directors in the event of dismissal or cessation due to inadequate performance.
___________________________________________________________________________________________________
IV.1. The Statutory External Auditor shall, within the framework of its duties, verify the implementation of remuneration policies and systems of the corporate bodies, as well as the efficiency and effectiveness of the internal control mechanisms, reporting any deficiencies to the C .
The External Auditor discloses the activities carried out during 2014 in its annual audit report, which is subject to approval at the Shareholders´ Annual General Meeting, and is available for consultation at the website: http://www.sonae.com/investidores/informacao-financeira/relatorios/.
IV.2. The Company or any other entities with the latter in a control relationship, shall not engage the Statutory External Auditor or any entity with the latter in a group relationship or which is part of the same network, for services other than audit services. If there are reasons for hiring such services - which must be approved by the supervisory board and explained in its Annual Report on Corporate Governance said value should not exceed more than 30% of the total value of services rendered to the company.
The services provided by the Statutory External Auditor were approved by the Statutory Audit Board within the recommended principles (please see points 46 and 47).
IV.3. Companies shall support auditor rotation at the end of two or three terms of office, depending on whether they last for four or three years, respectively. Its continuance beyond this period must be based on a specific opinion of the supervisory board that explicitly considers
g held on 2 May 2007 and is serving until the end of the current term.
In 2008, a new term corresponding to the 2008/2011 four-year period began and the Statutory Auditor was re-appointed to the post. In 2012, the proposal for election of Deloitte & Associados, SROC, S.A. to a new term (2012/2015) was submitted by the Supervisory Board to the eeting, having been supported by a specific opinion in which the conditions of independence of the auditor and the advantages and costs of its replacement are weighed. Further information regarding this matter can be found in paragraph 40 of this report.
__________________________________________________________________________________________________
V.1. In relation to business conducted between the company and shareholders with qualified shareholdings, or entities with which these are related, in accordance with article 20 of the Portuguese Recommendation fully adopted.
The Company endeavours to carry out transactions with related parties based on principles of rigour and transparency, and in strict observance of the rules of market competition. Such transactions are subject to specific internal procedures based on mandatory standards, in particular transfer pricing rules, or on voluntarily adopted internal systems of checks and balances for example, formal validation or reporting processes, depending on the value of the transaction in question.
V.2. The supervisory or audit board shall establish procedures and criteria that are required to define the relevant level of significance of business with qualifying shareholders - or entities with which they are in any of the relationships described in paragraph 1 of article 20 of the Portuguese Securities Code thus significant relevant business is dependent upon prior opinion of that body. Recommendation fully adopted.
Transactions with owners of qualified shares or with entities related in any way with them, under the terms of article 20 of the Portuguese Securities Code, are subject to a formal prior opinion by the Statutory Audit Board, if their value exceeds 10 million euros. In addition, all
transactions with related parties in excess of 1 million euro, are also submitted to quarterly reports by the Statutory Audit Board.
VI. INFORMATION
VI.1. Companies shall provide, via their websites in both Portuguese and English version, access to information on their progress as regards the economic, financial and governance standing. Recommendation fully adopted.
___________________________________________________________________________________________________
VI.2. Companies shall ensure the existence of an i timely manner. A record of the submitted requests and their processing shall be kept.
Recommendation fully adopted.
The company has an Investor Relations Department, which fulfils the requirements of this recommendation.
- Article 447
| Additions | Reductions | Balance at 31 December 2014 |
||||
|---|---|---|---|---|---|---|
| Date | Quantity | Market price | Quantity | Market Price | Quantity | |
| Ângelo Gabriel Ribeirinho dos Santos Paupério Sonae- SGPS, S.A.(6) |
770 426 a) | |||||
| Shares attributed under the Medium Term Incentive Plan |
02.05.2014 | 507 276 | 0.07 | |||
| Sale | 31.12.2014 | 500 000 | 1.03 | |||
| Sonaecom, SGPS, S.A.(9) Sale Enxomil - SGPS, SA (10) |
23.01.2014 | 552 837 | 2.58 | - b) 10 000 b) |
||
| Maria Cláudia Teixeira de Azevedo Efanor Investimentos, SGPS, S.A.(1) Linhacom, SGPS, S.A.(4) Sonae- SGPS, S.A.(6) |
1 99 996 204 678 |
|||||
| Shares attributed under the Medium Term Incentive Plan Sonaecom, SGPS, S.A.(9) |
02.05.2014 | 163 551 | 0.07 | |||
| Sale | 23.01.2014 | 40 566 | 2.58 | - b) |
||
| António Bernardo Aranha da Gama Lobo Xavier Sonae- SGPS, S.A.(6) Sonaecom, SGPS, S.A.(9) |
- - |
|||||
| Sale | 23.01.2014 | 2 603 | 2.58 | |||
| Sale | 24.01.2014 | 83 297 | 2.58 | b) |
a) Includes 125,000 shares held by spouse
b) Includes shares held indirectly.
| Additions | Reductions | Balance at 31 december 2014 |
||||
|---|---|---|---|---|---|---|
| Date | Quantity | Market price | Quantity | Market price | Quantity | |
| David Graham Shenton Bain | ||||||
| Sonae- SGPS, S.A.(6) | 20 000 | |||||
| Sonaecom, SGPS, S.A.(9) | 15 000 | |||||
| Rui José Gonçalves Paiva | ||||||
| Sonae- SGPS, S.A.(6) | 48 793 | |||||
| Shares attributed under the company's | ||||||
| remuneration policy | 05.05.2014 | 48 793 | 0.14 | |||
| Sonaecom, SGPS, S.A.(9) | 03.01.2014 | 105 754 | 2.60 | - | ||
| Carlos Alberto Rodrigues Silva | ||||||
| Sonae- SGPS, S.A.(6) | 30 486 | |||||
| Fernando José Lobo Pimentel | ||||||
| Macareno Videira | ||||||
| Sonae- SGPS, S.A.(6) | 28 126 | |||||
| Ana Cristina Dinis da Silva Fanha | ||||||
| Vicente Soares | ||||||
| Sonae- SGPS, S.A.(6) | 41 697 | |||||
| Shares attributed under the Medium | 28.03.2014 | 41 697 | 1.33 | |||
| Term Incentive Plan | ||||||
| Sonaecom, SGPS, S.A.(9) | - |
| Additions | Reductions | Balance at 31 December 2014 |
||||
|---|---|---|---|---|---|---|
| Date | Quantity | Quantity | Quantity | |||
| (1) Efanor Investimentos, SGPS, S.A. Sonae - SGPS, S.A.(6) Pareuro, BV(2) Sonaecom, SGPS, S.A.(9) |
200 100 000 5 583 100 - |
|||||
| Sale | 23.01.2014 | 1 000 | 2.58 | |||
| (2) Pareuro, BV Sonae - SGPS, S.A.(6) |
849 533 095 | |||||
| (3) Migracom, SGPS, S.A. Imparfin, SGPS, S.A.(5) Sonae - SGPS, S.A.(6) |
150 000 1 536 683 |
|||||
| Sale Sonaecom, SGPS, S.A.(9) |
jun/14 | 1 400 000 | 1.27 | - | ||
| Sale | 23.01.2014 | 387 342 | 2.58 | |||
| (4) Linhacom,SGPS, S.A. Imparfin, SGPS, S.A.(5) Sonae - SGPS, S.A.(6) |
150 000 439 314 |
|||||
| Sonaecom, SGPS, S.A.(9) | - | |||||
| Sale (5) Imparfin, SGPS, S.A. |
23.01.2014 | 120 300 | 2.58 | |||
| Sonae - SGPS, S.A.(6) | 4 105 280 | |||||
| (6) Sonae - SGPS, S.A. Sonaecom, SGPS, S.A.(9) |
81 022 964 | |||||
| Acquisition | jan/14 | 1 454 134 | 2.58 | |||
| feb-14 | 785 660 | 2.07 | ||||
| mar/14 | 371 589 | 2.16 | ||||
| apr-14 | 1 399 759 | 2.21 | ||||
| may-14 | 132 448 | 2.30 | ||||
| jul/14 | 200 000 | 1.59 | ||||
| Sonae Investments BV(7) Sontel BV(8) |
2 894 000 32 745 |
|||||
| (7) Sonae Investments BV Sontel BV(8) |
58 555 | |||||
| (8) Sontel BV | ||||||
| Sonaecom, SGPS, S.A.(9) | 194 063 119 | |||||
| (9) Sonaecom, SGPS, S.A. | 5 571 014 | |||||
| (10) Enxomil - SGPS, SA Sonae - SGPS, S.A.(6) Acquisition |
31.12.2014 | 500 000 | 1.03 | 500 000 |
54
| Number of shares as of 31 dezembro 2014 |
|
|---|---|
| Efanor Investimentos, SGPS, S.A. (1) | |
| Sonae- SGPS, S.A. | 200,100,000 |
| Pareuro, BV | 5,583,100 |
| Sonaecom, SGPS, S.A. | - |
| Pareuro, BV | |
| Sonae- SGPS, S.A. | 849,533,095 |
| Sonae- SGPS, S.A. | |
| Sonaecom, SGPS, S.A. | 81,022,964 |
| Sonae Investments BV | 2,894,000 |
| Sontel BV | 32,745 |
| Sonae Investments BV | |
| Sontel BV | 58,555 |
| Sontel BV | |
| Sonaecom, SGPS, S.A. | 194,063,119 |
(1) Belmiro Mendes de Azevedo is, according to article 20 paragraph 1, subparagraph b), and article 21, paragraph 1, both of the Portuguese Securities Code, the ultimate beneficial owner, as it holds circa 99% of the share capital and voting rights in Efanor Investimentos, SGPS, SA and the latter wholly owns Sonae - SGPS S.A. and Sontel BV.
| % of voting rights | ||||
|---|---|---|---|---|
| Without own | ||||
| Shareholder | Number of shares | % of Share capital | With own shares | shares |
| Directly | ||||
| Sontel BV | 194,063,119 | 62.33% | 62.33% | 63.47% |
| Sonae- SGPS, S.A. | 81,022,964 | 26.02% | 26.02% | 26.50% |
| Total attributable (1) | 275,086,083 | 88.36% | 88.36% | 89.97% |
(1) Belmiro Mendes de Azevedo is, according to article 20 paragraph 1, subparagraph b), and article 21, paragraph 1, both of the Portuguese Securities Code, the ultimate beneficial owner, as it holds circa 99% of the share capital and voting rights in Efanor Investimentos, SGPS, SA and the latter wholly owns Sonae - SGPS S.A. and Sontel BV.
Curricula Vitae and positions held by members of management and supervisory bodies.
- Board of Directors:
| Ângelo Gabriel Ribeirinho dos Santos Paupério | |
|---|---|
| Birth date | |
| 14 September 1959 | |
| Academic Curriculum | |
| Degree in Civil Engineering - University of Oporto | |
| MBA by Porto Business School | |
| Professional experience | |
| Executive Vice-Chairman of Sonae - SGPS, S.A. | |
| Manager of Sonae Investimentos, SGPS, S.A. | |
| Manager of MDS, SGPS, S.A. | |
| Manager of Sonae Sierra, SGPS, S.A. | |
| Vice-Chairman of Sonae MC - Modelo Continente, SGPS, S.A. | |
| Vice-Chairman of Sonae - Retalho Especializaof , S.A. | |
| Vice-Chairman of Sonaerp - Retail Properties, S.A. | |
| Member of the Board of Directors of ZOPT, SGPS, S.A. | |
| Member of the Board of Directors of NOS, SGPS, S.A. | |
| Guest professor at Porto Business School | |
| Member of the High Council of Universidade Católica Portuguesa | |
| Member of the High Council of Porto Business School | |
| Chairman of the Board of Directors of APGEI |
Offices held in companies in which Sonaecom is a shareholder
Chairman of the Board of Directors of Sonaecom - Sistemas de Informação, SGPS, S.A.
Member of the Board of Directors of ZOPT, SGPS, S.A.
Member of the Board of Directors of NOS, SGPS, S.A.
Chairman of the Board of Directors of Sonaecom - Serviços Partilhados, S.A.
Chairman of the Board of Directors of Público - Comunicação Social, S.A.
Offices held in other entities
Member of the Board of Directors of Sonae, SGPS, S.A.
Member of the Board of Directors of Sonae Center Serviços II, S.A.
Member of the Board of Directors of Sonae Investimentos, SGPS, S.A.
Member of the Board of Directors of Sonae Sierra, SGPS, S.A.
Member of the Board of Directors of Sonae, RE, S.A.
Executive Director of Sonae Investments, B.V.
Executive Director of Sontel B.V.
Member of the Board of Directors of MDS, SGPS, S.A.
Chairman of the Board of Directors of MDS AUTO, Mediação de Seguros, S.A.
Sole Director of Enxomil, SGPS, S.A.
Sole Director of STTR - Construção e Imóveis, S.A.
Maria Cláudia Teixeira de Azevedo
Birth date
13 January 1970
Academic Curriculum
Degree in Management - Catholic University of Oporto
MBA by INSEAD
Professional experience
Member of the Board of Directors of Efanor Investimentos, SGPS, S.A.
Executive Director of Sonaecom - Sistemas de Informação, SGPS, S.A.
Chairman of the Executive Board of Sonae Capital, SGPS, S.A.
Chairman of the Board of Directors of Sonae Turismo, SGPS, S.A.
Member of the Board of Directors of ZOPT, SGPS, S.A.
Offices held in companies in which Sonaecom is a shareholder
Member of the Board of Directors of ZOPT, SGPS, S.A.
Member of the Board of Directors of Sonaecom - Sistemas de Informação, SGPS, S.A.
Chairman of the Board of Directors of iTrust - Cyber Security Intelligence Services, S.A.
Chairman of the Board of Directors of WeDo Consulting, Sistemas de Informação, S.A.
Member of the Board of Directors of Público - Comunicação Social, S.A.
Chairman of the Board of Directors of Grupo S21 SEC Gestión, S.A.
Member of the Board of Directors of WeDo Technologies (UK) Limited
Member of the Board of Directors of Praesidium Services Limited (UK)
Manager of WeDo Poland Sp. Z.o.o.
Offices held in companies in which Sonaecom is a shareholder (continued)
Director of WeDo Technologies Mexico, S. De R.L. de C.V.
Chairman of the Board of Directors of WeDo Technologies Americas Inc.
Member of the Board of Directors ot WeDo Technologies Egypt
Member of the Board of Directors of WeDo Technologies Australia PTY Limited
Member of the Board of Directors of NOS, SGPS, S.A.
Offices held in other entities
Member of the Board of Directors of CAPWATT - BRAINPOWER, S.A.
Manager of CARVEMAGERE, MANUTENÇÃO E ENERGIAS RENOVÁVEIS, LDA
Member of the Board of Directors of COMPANHIA TÉRMICA HECTARE, ACE
Manager of C.T.E. - CENTRAL TERMOELÉCTRICA DO ESTUÁRIO, UNIPESSOAL, LDA
Member of the Board of Directors of CONTACTO CONCESSÕES, SGPS, S.A.
Member of the Board of Directors of ECOCICLO II - ENERGIAS, S.A.
Manager of ENERLOUSADO - RECURSOS ENERGÉTICOS, UNIPESSOAL, LDA
Chairman of the Board of Directors of IMOAREIA - INVESTIMENTOS TURÍSTICOS, SGPS, S.A.
Member of the Board of Directors of INTEGRUM ACE, S.A.
Member of the Board of Directors of INTEGRUM COLOMBO - ENERGIA, S.A.
Member of the Board of Directors of INTEGRUM ENGENHO NOVO - ENERGIA, S.A.
Member of the Board of Directors of INTEGRUM MARTIM LONGO - ENERGIA, S.A.
Member of the Board of Directors of INTEGRUM VALE DA CAIMA - ENERGIA, S.A.
Member of the Board of Directors of INTEGRUM VALE DO TEJO - ENERGIA, S.A.
Member of the Board of Directors of INTEGRUM II - ENERGIA, S.A.
Member of the Board of Directors of INTEGRUM III - ENERGIA, S.A.
Manager of RONFEGEN - RECURSOS ENERGÉTICOS, UNIPESSOAL, LDA
Member of the Board of Directors of SC - ENGENHARIA E PROMOÇÃO IMOBILIÁRIA, SGPS, SA
Member of the Board of Directors of SC, SGPS, SA
Member of the Board of Directors of SISTAVAC, SGPS, SA
Member of the Board of Directors of SISTAVAC, SA
Member of the Board of Directors of SONAE CAPITAL, SGPS, SA
Chief Executive Officer of SONAE CAPITAL, SGPS, SA
Chairman of Board of Directors of SONAE TURISMO - SGPS, SA
Chief Executive Officer of SONAE TURISMO - SGPS, SA
Member of the Board of Directors of SPRED, SGPS, SA
Chairman of the Board of Directors of EFANOR - SERVIÇOS DE APOIO À GESTÃO, S.A.
Member of the Board of Directors of IMPARFIN, SGPS, S.A.
Chairman of the Board of Directors of LINHACOM, SGPS, S.A.
Member of the Board of Directors of SEKIWI, SGPS, S,A,
Member of the Board of Directors of EFANOR - INVESTIMENTOS, SGPS, S.A.
Member of the Curators Council of Fundação Belmiro de Azevedo
Birth date
16 October 1959
Educational qualifications
Degree in Law - University of Coimbra
Master in Economics Law - University of Coimbra
Professional experience
Partner and Member of the Board of Directors of MLGTS
Non-executive Director of the Board of Directors of BPI, SGPS
Non-executive Director of the Board of Directors of Riopele, S.A.
Non-executive Director of Board of Directors of Mota-Engil, SGPS, S.A.
Executive Director of Sonaecom, SGPS, S.A.
Member of the Board of Directors of Público - Comunicação Social, S.A.
Member of the Board of Directors of Sonaecom - Sistemas de Informação, SGPS, S.A.
Non-executive Director of NOS, SGPS, S.A.
Offices held in companies in which Sonaecom is a shareholder
Member of the Board of Directors of Sonaecom - Sistemas de Informação, SGPS, S.A.
Member of the Board of Directors of Público - Comunicação Social, S.A.
Member of the Board of Directors of NOS - SGPS, S.A.
Offices held in other entities
Partner and Member of the Board of Directors of MLGTS & Associados, Sociedade de Advogados
Member of the Board of Directors of BPI, SGPS, S.A.
Member of the Board of Directors of Mota-Engil, SGPS, S.A.
Member of the Board of Directors of Riopele, S.A.
Chairman of the Board of the Shareholders General Meeting of Textil Manuel Goncalves, S.A.
Member of the Board of Directors of Vallis Capital Partners
| Arlindo Dias Duarte Silva | |
|---|---|
| Birth date | |
| 27 October 1936 | |
| Academic Curriculum | |
| 1963 | Degree in Economics - University of Oporto |
| Professional experience | |
| 1960-1963 | Teacher in Escola Comercial e Industrial |
| 1968-1971 | Military service required, including in Angola (interruption in banking activity) |
| 1976-1979 | Restart of banking activity, subdirector of Banco BPA since 1976 |
| 1989-1992 | Member of the General Council of Câmara dos Revisores Oficiais de Contas |
| 1992-1995 | Member of Directive Board in Câmara dos Revisores Oficiais de Contas |
| Since 1979 | Registered as Statutory Auditor, performing these functions either as a member of Sociedade de Revisores Oficiais de Contas, both on an individual name |
| Since 1979 | Statutory auditor, Member of Statutory Audit Board or Single Supervisor in various societies as Banco Universo, União Portuguesa de Bancos, Orbitur - Intercâmbio de Turismo, SA, ATPS - SGPS, SA, MDS - Corretor de Seguros, SA, Imoareia - Sociedade Imobiliária, SA e Contacto - SGPS, SA |
| Offices held in other entities | |
| Member of the Statutory Audit Board of Sonae, SGPS, SA |
Member of the Statutory Audit Board of Rochinvest - Investimentos Imobiliários e Turismo, SA
Offices held in charitable associations
Member of the Statutory Audit Board of Associação Cultural do Senhor do Padrão
Birth date
22 August 1945 1972 Bachelor in Accounting - ex-ICP and current ESCAP 1978 Degree in Economics - University of Oporto 1996 Executive MBA - European Management, IESF/EFG 1964-1989 Held several functions in a credit institution 1989-2010 Statutory External Auditor and Partner of Santos Carvalho & Associados, SROC, SA Since 2010 Statutory External Auditor and Partner of Armando Magalhães, Carlos Silva & Associados, SROC, Lda. Member of the Statutory Audit Board of Sonae Capital, SGPS, SA Member of the Statutory Audit Board of Sonae Indústria, SGPS, SA Member of the Statutory Audit Board of Futebol Clube do Porto - Futebol SAD Member of the Statutory Audit Board of Real Vida Seguros, SA Academic Curriculum Professional experience Offices held in other entities
Member of the Statutory Audit Board of Associação Sénior de Golfe do Norte de Portugal
Offices held in charitable associations
Member of the Statutory Audit Board of Fundação Eça de Queiroz
Birth date
01 December 1957
| Academic Curriculum | ||||
|---|---|---|---|---|
| 1982 | Degree in Economics - University of Oporto | |||
| 1990 | Statutory External Auditor number 731 | |||
| Professional Experience | ||||
| 1982-1986 | Administrative and financial responsibilities in the area of textile companies, construction and office equipment | |||
| Since 1986 | Provision of services related to external audit for Statutory Auditors and for companies in the previous activities | |||
| 1990-1992 | Independent Statutory Auditor | |||
| Since 1992 | Statutory External Auditor and Partner of Óscar Quinta, Canedo da Mota & Pires Fernandes, SROC | |||
| Offices held in other entities | ||||
| Member of the Statutory Audit Board of Sonae Indústria, SGPS, SA |
Member of the Statutory Audit Board of BA GLASS I - Serviços de Gestão e Investimentos, SA
Birth date
| Academic Curriculum | |
|---|---|
| 1977 | Degree in Management - ISEG - Technical University of Lisbon |
| 1999 | MBA in Finance - IEDE Madrid |
| 2004 | MBA in Management and Information Systems - Faculty of Economics and Business - Catholic University |
| 22 April 1991 | Statutory External Auditor number 775 |
| Professional Experience | |
| 1980-1989 | Audit assistant and manager of Coopers & Lybrand |
| 1989-1991 | Responsible for Management Control and Internal Audit of the Grupo Coelima |
| 1991-2004 | Partner of Deloitte - Member of the Statutory Audit Board and Statutory External Auditor of many companies, responsable for the consultancy in the North of the Country and for the Corporate Finance in Portugal until 2001 |
| Since 2004 | Statutory External Auditor and Consultant in many national and international companies |
| Since 2006 | Partner of Horwath Parsus - Consultoria e Gestão, Lda. |
| Offices held in other entities | |
| Member of the Statutory Audit Board of Sonae, SGPS, SA | |
| Member of the Statutory Audit Board of Sonae Sierra, SGPS, SA | |
| Member of the Statutory Audit Board of Sonae Capital, SGPS, SA | |
| Member of the Statutory Audit Board of Sonae Indústria, SGPS, SA | |
| Statutory External Auditor of Valorinveste - Soc. Invest. Imb., SA | |
| Statutory External Auditor of Jofabo - Construção e Imobiliária, SA | |
| Statutory External Auditor of Know it - Soluções Formação Tecnológica, SA | |
| Statutory External Auditor of Blue Share, SA | |
| Statutory External Auditor of Praianorte - Hotelaria e Turismo, SA | |
| Statutory External Auditor of Companhia das Pastas-Empreendimento e Investimentos Hoteleiros, SA | |
| Staturory Auditor of Luso - Insular, projetos e Construção, SA | |
| Staturory Auditor of PMVA - Imobiliária, SA |
| Duarte Paulo Teixeira de Azevedo | |
|---|---|
| Date of Birth | |
| 31 December 1965 | |
| Academic Curriculum | |
| 1986 | Degree in Chemical Engineering - École Polytechnique Féderále de Lausanne |
| 1989 | MBA - Porto Business School |
| Executive Formation | |
| 1994 | Executive Retailing Program - Babson College |
| 1996 | Strategic Uses of Information Technology Program - Stanford Business School |
| 2002 | Breakthrough Program for Senior Executives - IMD |
| 2008 | Proteus Programme - London Business School |
| 2012 | Corporate Level Strategy - Harvard Business School |
| Professional Experience in Sonae Group | |
| 1988-1990 | Analyst and Manager of Projeto Novos Investimentos in Sonae Tecnologias de Informação |
| 1990-1993 | Manager of Projeto de Desenvolvimento Organizativo and Comercial Director in Portugal in New Business in Sonae Indústria (Painéis Derivados de Madeira) |
| 1993-1996 | Director of Planning and Strategic Control and Organizational Development in Sonae Investimentos - SGPS, S.A. (currently Sonae - SGPS, S.A.) |
| 1996-1998 | Executive Director of Modelo Continente Hipermercados, SA (Merchandising, IT e Marketing Retalho) |
| 1998-2000 | Chairman of the Executive Committee of Optimus - Telecomunicações, S.A. (Operador Móvel) |
| 1998-April 2007 | Executive Director of Sonae - SGPS, S.A. |
| 2002-2007 | Chairman of the General Board of Público - Comunicação Social, S.A. |
| 2003-2007 | Chairman of the General Board of Glunz, AG |
| 2004-2007 | Chairman of the Board of Directors of Tableros de Fibras, S.A. (Tafisa) |
| Since May 2007 | Chairman of the Executive Committee of Sonae - SGPS, S.A. |
Curricula Vitae of the members of the Remuneration Committee.
| 2001-2002 | Chairman of Apritel - Associação dos Operadores de Telecomunicações | |||||
|---|---|---|---|---|---|---|
| 2001-2008 | Member of the General Council of EGP - UPBS (now Porto Business School) | |||||
| 2003 | Co-author of the book "Reformar Portugal" | |||||
| 2006-2013 | Member of the Board of Founders of Fundação Casa da Música | |||||
| 2008-2009 | Member of the General Council of AEP - Associação Empresarial de Portugal | |||||
| 2009-2014 | Member of the Board of Trustees of AEP - Associação Empresarial de Portugal | |||||
| Since 2008 | Member of ERT - European Round Table of Industrislists | |||||
| Since 2009 | Chairman of the Board of Trustees of Universidade do Porto | |||||
| Since 2012 | Member of the Board of COTEC | |||||
| Since 2013 | Membrer of International Advisory Board of Allianz SE | |||||
| Offices held in other entities of Sonae | ||||||
| Chairman of Exectutive Committee of Sonae - SGPS, S.A. | ||||||
| Chairman of the Board of Directors of Sonae Investimentos, SGPS, S.A. | ||||||
| Chairman of the Board of Directors of Sonae MC - Modelo Continente , SGPS, S.A. | ||||||
| Chairman of the Board of Directors of Sonae - Sprecialized Retail , SGPS, S.A. | ||||||
| Chairman of the Board of Directors of Sonae Center Serviços II, SGPS, S.A. | ||||||
| Chairman of the Board of Directors of Sonae Sierra, SGPS, S.A. | ||||||
| Offices held in other entities | ||||||
| Chairman of the Board of Directors of Migracom, SGPS, S.A. | ||||||
| Vice-Chairman of the Board of Directors of Sonae Indústria, SGPS, S.A. | ||||||
| Member of the Board of Directors of Efanor Investimentos, SGPS, S.A. | ||||||
| Member of the Board of Directors of Imparfin, SGPS, S.A. | ||||||
| Member of ERT - European Round Table of Industrislists | ||||||
| Chairman of the Board of Trustees of Universidade do Porto | ||||||
| Member of the Board of COTEC | ||||||
| Membrer of International Advisory Board of Allianz SE |
Francisco de La Fuente Sánchez
Birth date
2 January 1942
1965 Degree in Electrical Engineering - Technical University 2000-2010 Non-Executive Director of Fundação Portugal-África 2004-2010 Member of the Advisory Council of Instituto Português de Corporate Governance 2005-2009 Chairman of Fundação EDP 2005-2012 Member of the Advisory Council of Fórum para a Competitividade 2006-2009 Member of the Supervisory Board of Millennium BCP - Banco Comercial Português 2007-2009 Chairman of Corporate Governance Committee of the Supervisory Board of Millennium BCP 2007-2012 Guest vowel of Conselho Nacional da Água 2007-2012 Vice-Chairman and Non-Executive Chairman of Directors of EFACEC Capital 2007-2012 Chairman of Conselho Nacional do Colégio de Engenharia Eletrotécnica da Ordem dos Engenheiros 2007-2013 Chairman of the General Board of PROFORUM Since 2002 Member of the Board of Trustees of Fundação Luso-Espanhola Since 2003 Member of Fórum Ibero América Since 2004 Member of the Board of Trustees of Fundação Luso-Brasileira Since 2005 Member of Patronato da Fundação Hidroelétrica del Cantábrico Since 2009 Member co-opted of the Conselho de Escola do Instituto Superior Técnico Since 2010 Chairman of the General Meeting of Iberwind - Desenvolvimento e Projetos. S.A. Academic Curriculum Main Professional Activities in the last five years
Offices held in other entities
Non-Executive Director of Sonae Capital, SGPS, S.A.
Chairman of the General Meeting of Iberwind - Desenvolvimento e Projetos. S.A.
Chairman of the General Meeting of APEDS - Associação Portuguesa de Engenheiros para o Desenvolvimento Social
Member of the Remuneration Committee of Sonae, SGPS, S.A.
Member co-opted of Conselho de Escola do Instituto Superior Técnico
Chairman of the direction of AAAIST - Associação de Antigos Alunos do Instituto Superior Técnico
Member of Patronato da Fundação Hidroelétrica del Cantábrico
Chairman of honor of Hidroelétrica del Cantábrico, S.A.
Member of the Board of Trustees of Fundação Luso-Brasileira
Member of Fórum Ibero América
Member of the Board of Trustees of Fundação Luso-Espanhola
For the years ended at 31 December 2014 and 2013
| (Amounts expressed in Euro) | Notes | December 2014 | December 2013 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Tangible assets | 1.c), 1.h) and 5 | 2,696,429 | 5,530,098 |
| Intangible assets | 1.d), 1.e) and 6 | 25,581,936 | 16,647,260 |
| Goodwill | 1.f) and 7 | 28,719,066 | 28,434,416 |
| Investments in associated companies and companies jointly controlled | 1.b) and 8 | 721,607,751 | 710,434,285 |
| Financial assets at fair value through profit or loss | 1.g), 4 and 9 | 1,424,996 | - |
| Investments available for sale | 1.g), 4 and 10 | 113,054 | 115,448 |
| Other non-current assets | 1.g), 1.r), 1.x), 4, 14 and 34 | 5,501,453 | 922,434 |
| Deferred tax assets | 1.p), 1.s) and 11 | 6,837,230 | 5,199,886 |
| Total non-current assets | 792,481,915 | 767,283,827 | |
| Current assets | |||
| Financial assets at fair value through profit or loss | 1.g), 4 and 9 | 58,540,576 | 202,442,350 |
| Inventories | 1.i),12 and 22 | 1,077,458 | 553,525 |
| Trade debtors | 1.g), 1.j), 4, 13, 22 and 34 | 40,000,771 | 36,416,353 |
| Other current debtors | 1.g), 1.j), 4, 14, 22 and 34 | 9,816,130 | 23,040,766 |
| Other current assets | 1.r), 1.x), 4, 15 and 34 | 11,912,225 | 9,298,406 |
| Cash and cash equivalents | 1.g), 1.k), 4 and 16 | 182,010,595 | 188,014,923 |
| Total current assets | 303,357,755 | 459,766,323 | |
| Total assets | 1,095,839,670 | 1,227,050,150 | |
| Shareholders' funds and liabilities | |||
| Shareholders' funds | |||
| Share capital | 17 | 230,391,627 | 366,246,868 |
| Own shares | 1.u) and 18 | (7,686,952) | (7,686,952) |
| Reserves | 1.t) | 773,848,807 | 674,091,313 |
| Consolidated net income/(loss) for the year | 27,958,229 | 103,838,479 | |
| 1,024,511,711 | 1,136,489,708 | ||
| Non-controlling interests | 19 | (632,000) | 269,824 |
| 1,023,879,711 | 1,136,759,532 | ||
| Liabilities | |||
| Non-current liabilities | |||
| 1.l), 1.m), 4 and 20.a) | 9,058,985 | 24,810,079 | |
| Other non-current financial liabilities | 1.h), 4 and 21 | 480,274 | 67,937 |
| Provisions for other liabilities and charges | 1.o), 1.s) and 22 | 2,579,321 | 3,060,986 |
| Deferred tax liabilities | 1.p), 1.s) and 11 | - | 89,522 |
| Other non-current liabilities | 1.r), 1.x), 4, 23, 34 and 39 | 1,075,209 | 1,277,304 |
| Total non-current liabilities | 13,193,789 | 29,305,828 | |
| Current liabilities | |||
| Short-term loans and other loans | 1.l), 1.m), 4 and 20.b) | 1,980,451 | 998,996 |
| Trade creditors | 4, 24 and 34 | 21,565,689 | 21,768,279 |
| Other current financial liabilities | 1.h), 4 and 25 | 285,904 | 70,728 |
| Other creditors | 4 and 26 | 6,647,364 | 10,439,327 |
| Other current liabilities | 1.r), 1.x), 4, 27, 34 and 39 | 28,286,762 | 27,707,460 |
| Total current liabilities | 58,766,170 | 60,984,790 | |
| 1,095,839,670 | 1,227,050,150 |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério António Bernardo Aranha da Gama Lobo Maria Cláudia Teixeira de Azevedo
For the years and quarters ended at 31 December 2014 and 2013 (restated note 1)
| (Amounts expressed in Euro) | Notes | December 2014 | September to December 2014 (not audited) |
December 2013 (restated) |
September to December 2013 (restated and not audited) |
|---|---|---|---|---|---|
| Sales | 1.r), 28 and 34 | 38,375,020 | 9,416,572 | 33,057,911 | 8,059,387 |
| Services rendered | 1.r), 28 and 34 | 83,341,646 | 22,732,110 | 71,707,832 | 18,187,386 |
| Other operating revenues | 1.q), 29 and 34 | 2,761,594 | 595,605 | 3,323,218 | 835,236 |
| 124,478,260 | 32,744,287 | 108,088,961 | 27,082,009 | ||
| Cost of sales | 1.i), 12 and 22 | (30,341,304) | (6,568,115) | (24,753,054) | (6,248,192) |
| External supplies and services | 1.h), 30 and 34 | (41,853,327) | (11,279,142) | (37,522,457) | (7,706,619) |
| Staff expenses | 1.x), 39, 40 and 42 | (44,454,793) | (11,942,370) | (38,653,177) | (9,629,950) |
| Depreciation and amortisation | 1.c), 1.d), 1.f), 5, 6 and 7 | (7,142,387) | (2,309,073) | (5,966,045) | (1,224,963) |
| Provisions and impairment losses | 1.j), 1.o), 1.w) and 22 | (25,972) | (25,972) | (1,634,614) | (651,088) |
| Other operating costs | 3 1 | (320,238) | (81,534) | (277,046) | (69,089) |
| (124,138,021) | (32,206,206) | (108,806,393) | (25,529,901) | ||
| Gains and losses in associated companies and companies jointly controlled | 1.b), 8 and 32 | 15,742,802 | (537,925) | (490,365) | (2,662,160) |
| Gains and losses on financial assets at fair value through profit or loss | 1.g), 9 and 32 | (1,975,451) | 4,949,971 | 46,636,719 | 37,489,324 |
| Other financial expenses | 1.h), 1.m), 1.v), 1.w), 32 and 34 | (2,404,912) | (764,322) | (11,990,838) | (961,318) |
| Other financial income | 1.v), 32 and 34 | 2,959,024 | 394,648 | 7,976,199 | 1,036,831 |
| Current income / (loss) | 14,661,702 | 4,580,453 | 41,414,283 | 36,454,785 | |
| Income taxation | 1.p), 11 and 33 | (689,789) | (304,173) | (3,812,770) | (1,063,121) |
| Consolidated net income/(loss) for the year of continued operations | 13,971,913 | 4,276,280 | 37,601,513 | 35,391,664 | |
| Consolidated net income/(loss) for the year of discontinued operations | 3 7 | 13,125,666 | - | 66,164,934 | 328,495 |
| Consolidated net income/(loss) for the year | 27,097,579 | 4,276,280 | 103,766,447 | 35,720,159 | |
| Attributed to: | |||||
| Shareholders of parent company | 3 8 | 27,958,229 | 4,918,595 | 103,838,479 | 35,779,066 |
| Non-controlling interests | 19 | (860,650) | (642,315) | (72,032) | (58,907) |
| Earnings per share Including discontinued operations: |
3 8 | ||||
| Basic | 0.09 | 0.02 | 0.29 | 0.10 | |
| Diluted | 0.09 | 0.02 | 0.29 | 0.10 | |
| Excluding discontinued operations: | |||||
| Basic | 0.05 | 0.02 | 0.10 | 0.10 | |
| Diluted | 0.05 | 0.02 | 0.10 | 0.10 |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013 (restated note 1).
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
António Bernardo Aranha da Gama Lobo
For the years and quarters ended at 31 December 2014 and 2013 (restated note 1)
| (Amounts expressed in Euro) | Notes | December 2014 | September to December 2014 (not audited) |
December 2013 (restated) |
September to December 2013 (restated and not audited) |
|---|---|---|---|---|---|
| Consolidated net income / (loss) for the period | 27,097,579 | 4,276,280 | 103,766,447 | 35,720,159 | |
| Components of other consolidated comprehensive income, net of tax, that will be reclassified subsequently to profit or loss: Changes in reserves resulting from the application of equity method Changes in currency translation reserve and other |
8 1.v) |
2,687,127 766,596 |
15,786,112 (572,217) |
(2,536,500) (1,155,064) |
(2,335,500) (383,964) |
| Consolidated comprehensive income for the period | 30,551,302 | 19,490,175 | 100,074,883 | 33,000,695 | |
| Attributed to: | |||||
| Shareholders of parent company | 31,411,952 | 20,132,490 | 100,146,915 | 33,059,602 | |
| Non-controlling interests | (860,650) | (642,315) | (72,032) | (58,907) |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013 (restated note 1).
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
António Bernardo Aranha da Gama Lobo
For the years ended at 31 December 2014 and 2013
| Reserves | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Own shares | Reserves for Medium Term Incentive |
Reserves of own shares |
Other reserves Total reserves | Non- -controlling interests |
Net income / | Total | |||||
| (Amounts expressed in Euro) 2014 |
Share capital | (Note 18) Share premium Legal reserves | Plans (Note 39) | (loss) | |||||||
| Balance at 31 December 2013 Appropriation of the consolidated net result of 2013 |
366,246,868 | (7,686,952) | 775,290,377 | 13,152,684 | 1,077,258 | 7,686,952 | (123,115,958) | 674,091,313 | - | 103,838,479 1,136,489,708 | |
| Transfers to other reserves | - | - | - | - | - | - | 103,838,479 | 103,838,479 | - | (103,838,479) | - |
| Consolidated comprehensive income for the year ended at 31 December 2014 |
- | - | - | - | - | - | 3,453,723 | 3,453,723 | - | 27,958,229 | 31,411,952 |
| Reduction of the share capital following the result of the general and voluntary acquisition of own shares (Note 17) Effect of the recognition of the Medium Term Incentive Plans (Notes |
(135,855,241) | - | - | - | - | - | (5,815,229) | (5,815,229) | - | - (141,670,470) | |
| 1.x and 39) Effect of the conversion of the Medium Term Incentive Plans (Notes |
- | - | - | - | 105,935 | - | - | 105,935 | - | - | 105,935 |
| 1.x and 39) | - | - | - | - | (1,183,193) | - | (1,134,660) | (2,317,853) | - | - | (2,317,853) |
| Early termination of the derivative on owh shares (Notes 34 and 39) | - | - | - | - | - | - | 492,439 | 492,439 | - | - | 492,439 |
| Balance at 31 December 2014 | 230,391,627 | (7,686,952) | 775,290,377 | 13,152,684 | - | 7,686,952 | (22,281,206) | 773,848,807 | - | 27,958,229 | 1,024,511,711 |
| Non-controlling interests | |||||||||||
| Balance at 31 December 2013 | - | - | - | - | - | - | - | - | 269,824 | - | 269,824 |
| Comprehensive income of non-controlling interests | - | - | - | - | - | - | - | - | (860,650) | - | (860,650) |
| Dividend distribution | - | - | - | - | - | - | - | - | (19,920) | - | (19,920) |
| Other changes | - | - | - | - | - | - | - | - | (21,254) | - | (21,254) |
| Balance at 31 December 2014 | - | - | - | - | - | - | - | - | (632,000) | - | (632,000) |
| Total | 230,391,627 | (7,686,952) | 775,290,377 | 13,152,684 | - | 7,686,952 | (22,281,206) | 773,848,807 | (632,000) | 27,958,229 1,023,879,711 |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
António Bernardo Aranha da Gama Lobo
| Reserves | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Amounts expressed in Euro) | Share capital | Own shares | (Note 18) Share premium Legal reserves | Reserves for Medium Term Incentive Plans (Note 39) |
Reserves of own shares |
Other reserves Total reserves | Non- -controlling interests |
Net income / (loss) |
Total | ||
| 2013 | |||||||||||
| Balance at 31 December 2012 | 366,246,868 | (5,544,847) | 775,290,377 | 7,991,192 | 3,650,779 | 5,544,847 | (145,743,071) | 646,734,124 | - | 75,419,377 1,082,855,522 | |
| Appropriation of the consolidated net result of 2012 | |||||||||||
| Transfers to other reserves | - | - | - | 5,161,492 | - | - | 70,257,885 | 75,419,377 | - | (75,419,377) | - |
| Dividend distribution | - | - | - | - | - | - | (43,281,102) | (43,281,102) | - | - | (43,281,102) |
| Consolidated comprehensive income for the year ended at 31 December 2013 |
- | - | - | - | - | - | (3,691,564) | (3,691,564) | - | 103,838,479 | 100,146,915 |
| Acquisition of own shares | - | (2,500,042) | - | - | - | 2,500,042 | (2,500,042) | - | - | - | (2,500,042) |
| Delivery of own shares under the Medium Term Incentive Plans (Notes 1.x) and 39) Effect of the recognition of the Medium Term Incentive Plans (Notes |
- | 357,937 | - | - | (425,568) | (357,937) | 430,292 | (353,213) | - | - | 4,724 |
| 1.x) and 39) | - | - | - | - | 4,320,629 | - | - | 4,320,629 | - | - | 4,320,629 |
| Early termination of the derivative on owh shares (Notes 34 and 39) Derecognition of incentive plans of discontinued operations |
- | - | - | - | - | - | 1,411,644 | 1,411,644 | - | - | 1,411,644 |
| (Nota 3.e)) | - | - | - | - | (6,468,582) | - | - | (6,468,582) | - | - | (6,468,582) |
| Balance at 31 December 2013 | 366,246,868 | (7,686,952) | 775,290,377 | 13,152,684 | 1,077,258 | 7,686,952 | (123,115,958) | 674,091,313 | - | 103,838,479 1,136,489,708 | |
| Non-controlling interests | |||||||||||
| Balance at 31 December 2012 | - | - | - | - | - | - | - | - | 387,479 | - | 387,479 |
| Comprehensive income of non-controlling interests | - | - | - | - | - | - | - | - | (72,032) | - | (72,032) |
| Dividend distribution | - | - | - | - | - | - | - | - | (29,880) | - | (29,880) |
| Other changes | - | - | - | - | - | - | - | - | (15,743) | - | (15,743) |
| Balance at 31 December 2013 | - | - | - | - | - | - | - | - | 269,824 | - | 269,824 |
| Total | 366,246,868 | (7,686,952) | 775,290,377 | 13,152,684 | 1,077,258 | 7,686,952 | (123,115,958) | 674,091,313 | 269,824 | 103,838,479 1,136,759,532 |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
António Bernardo Aranha da Gama Lobo
| (Amounts expressed in Euro) | December 2014 | December 2013 | ||
|---|---|---|---|---|
| Operating activities | ||||
| Receipts from trade debtors | 130,622,335 | 555,100,940 | ||
| Payments to trade creditors | (77,638,778) | (329,681,342) | ||
| Payments to employees | (50,409,282) | (83,146,614) | ||
| Cash flows from operating activities | 2,574,275 | 142,272,984 | ||
| Payments / receipts relating to income taxes, net | 694,575 | (4,380,429) | ||
| Other receipts / payments relating to operating activities, net | 350,013 | (6,436,770) | ||
| Cash flows from operating activities (1) | 3,618,863 | 131,455,785 | ||
| Investing activities | ||||
| Receipts from: | ||||
| Financial investments | 15,400,849 | 15,557 | ||
| Tangible assets | 25,444 | 860,225 | ||
| Intangible assets | - | 1,002,664 | ||
| Dividends | 8,642,154 | - | ||
| Loans granted | - | 427,850,000 | ||
| Interest and similar income | 4,948,947 | 5,802,467 | ||
| Payments for: | ||||
| Financial investments | (5,522,188) | (1,303,441) | ||
| Tangible assets | (1,123,460) | (69,813,219) | ||
| Intangible assets | (1,761,424) | (28,879,720) | ||
| Cash flows from investing activities (2) | 20,610,322 | 335,534,533 | ||
| Financing activities | ||||
| Receipts from: | ||||
| Loans obtained | 1,566,524 | 3,925,434 | ||
| Payments for: | ||||
| Leasing | (277,766) | (2,617,595) | ||
| Interest and similar expenses | (3,832,825) | (13,170,914) | ||
| Dividends | (19,920) | (43,310,983) | ||
| Acquisition of own shares | - | (2,500,042) | ||
| Loans obtained | (26,937,235) | (369,952,000) | ||
| Cash flows from financing activities (3) | (29,501,222) | (427,626,100) | ||
| Net cash flows (4)=(1)+(2)+(3) | (5,272,037) | 39,364,218 | ||
| Effect of the foreign exchanges | 133,113 | (489,036) | ||
| Effect of the discontinued operations | (1,051,278) | 87,443,813 | ||
| Cash and cash equivalents at the beginning of the year | 188,004,715 | 61,685,720 | ||
| Cash and cash equivalents at the end of the year | 181,814,513 | 188,004,715 |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
António Bernardo Aranha da Gama Lobo
For the years ended at 31 December 2014 and 2013
1. Acquisition or sale of subsidiaries or other businesses
| Notes | December 2014 | December 2013 | |
|---|---|---|---|
| a) Amounts received of sales and acquisitions | |||
| Mainroad | 3.d | 13,354,926 | - |
| S21 | 3.a | 2,045,923 | - |
| Distrinews, S.A. | - | 9,375 | |
| Infosystems | - | 6,182 | |
| 15,400,849 | 15,557 | ||
| b) Amounts paid of acquisitions | |||
| Sonae SGPS shares acquisition | 9 | 5,522,188 | - |
| Connectiv Solutions, Inc | - | 1,213,537 | |
| Saphety Brasil | - | 56,904 | |
| Saphety Colômbia | - | 20,500 | |
| Distrinews, S.A. | - | 12,500 | |
| 5,522,188 | 1,303,441 | ||
| c) Amounts received of dividends | |||
| ZOPT | 8 | 7,250,000 | - |
| NOS SGPS | 32 | 1,321,504 | - |
| Unipress | 8 | 70,650 | - |
| 8,642,154 | - |
| Notes | December 2014 | December 2013 | |
|---|---|---|---|
| Cash in hand | 16 | 22,423 | 10,979 |
| Cash at bank | 16 | 4,551,280 | 28,793,626 |
| Treasury applications | 16 | 177,436,892 | 159,210,318 |
| Overdrafts | 16 and 20 | (196,082) | (10,208) |
| Cash and cash equivalents | 181,814,513 | 188,004,715 | |
| Overdrafts | 196,082 | 10,208 | |
| Cash assets | 182,010,595 | 188,014,923 |
| Notes | December 2014 | December 2013 | |
|---|---|---|---|
| a) Bank credit obtained and not used | 2 0 | 1,194,888 | 16,000,000 |
| b) Purchase of company through the issue of shares | Not applicable | Not applicable | |
| c) Conversion of loans into shares | Not applicable | Not applicable |
| Activity | Cash flow from operating activities |
Cash flow from investing activities |
Cash flow from financing activities |
Net cash flows |
|---|---|---|---|---|
| 2014 | ||||
| Multimedia | (2,127,063) | (454,881) | (54,513) | (2,636,457) |
| Information Systems | 2,157,379 | 13,563,515 | (6,551,597) | 9,169,297 |
| Holding | 3,588,547 | 7,501,688 | (22,895,112) | (11,804,877) |
| 3,618,863 | 20,610,322 | (29,501,222) | (5,272,037) |
| Activity | Cash flow from operating activities |
Cash flow from investing activities |
Cash flow from financing activities |
Net cash flows |
|---|---|---|---|---|
| 2013 | ||||
| Telecommunication | 145,550,815 | (90,693,038) | (22,210,261) | 32,647,516 |
| Multimedia | (2,855,285) | (850,037) | (55,686) | (3,761,008) |
| Information Systems | (2,301,853) | (3,654,595) | (682,486) | (6,638,934) |
| Holding | (8,937,892) | 430,732,203 | (404,677,667) | 17,116,644 |
| 131,455,785 | 335,534,533 | (427,626,100) | 39,364,218 |
The notes are an integral part of the consolidated financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
António Bernardo Aranha da Gama Lobo
Tecnologias de Informação, S.A. and has its head office at Lugar de Espido, Via Norte, Maia Portugal. It is the parent company of the
information technology area were transferred to the Company through a demerger-merger process, executed by public deed dated 30 September 1997.
Articles of Association were modified and its name was changed to Son has been the management of investments in other companies. Also denominated to Euro, being represented by one hundred and fifty million shares with a nominal value of 1 Euro each.
On 1 June 2000, the Company carried out a Combined Share Offer, involving the following:
was increased under the terms explained below. The new shares were fully subscribed for and paid up by Sonae, SGPS, S.A. (a Shareholder of Sonaecom, hereinafter re was subscribed for and paid up on the date the price of the Combined Share Offer was determined, and paid up in cash, 31,000,000 new ordinary shares of 1 Euro each being issued. The subscription price for the new shares was the same as that fixed for the sale of shares in the aforementioned Combined Share Offer, which was Euro 10.
In addition, in this year, Sonae sold 4,721,739 Sonaecom shares under an option granted to the banks leading the Institutional Offer for Sale and 1,507,865 shares to Sonae Group managers and to the former owners of the companies acquired by Sonaecom.
181,000,000 to Euro 226,250,000 by public subscription reserved for the existing Shareholders, 45,250,000 new shares of 1 euro each
having been fully subscribed for and paid up at the price of Euro 2.25 per share.
to SONAECOM, SGPS, S.A..
70,276,868, from Euro 226,250,000 to Euro 296,526,868, by the issuance of 70,276,868 new shares of 1 euro each and with a share premium of Euro 242,455,195, fully subscribed by France Télécom. The corresponding public deed was executed on 15 November 2005.
By decision of the Shareholders General Meeting held on 18 69,720,000, from Euro 296,526,868 to Euro 366,246,868, by the issuance of 69,720,000 new shares of 1 euro each and with a share premium of Euro 275,657,217, subscribed by 093X public deed was executed on 18 October 2006.
By decision of the Shareholders General Meeting held on 16 April 2008, bearer shares were converted into registered shares.
During the year ended at 31 December 2013, the merger between Zon Multimédia Serviços de Telecomunicações e Multimédia, SGPS, the telecommunications segment was classified, for presentation became of, rather than the holding activity:
Consequently, since the merger mentioned above, the telecommunications segment became jointly controlled (note 8).
On 5 February 2014, Sonaecom made public the decision to launch a general and voluntary tender offer for the acquisition of shares representing the share capital of Sonaecom.
The offer was general and voluntary, with the offered obliged to acquire all the shares that were the object of the offer and were, until the end of the respective period, subject to valid acceptance by the recipients.
The period of the offer, during which sales orders were received, ran for two weeks, beginning on 6 February and ending on 19 February 2014. On 20 February 2014, the results of the offer were released. The level of acceptance reached 62%, corresponding to 54,906,831 Sonaecom shares (Note 9 and 17).
In 2014 Sonaecom reduced its share capital to Euro 230,391,627.
Euronext Lisbon announced Sonaecom exclusion from the PSI-20 from 24 February 2014.
The Group operates in Portugal and has subsidiaries (from the information systems consultancy segment) operating in about 12 countries.
Since 1 January 2001, all Group companies based in the Euro zone have adopted the Euro as their base currency for processing, systems and accounting.
The consolidated financial statements are also presented in euro, rounded at unit, and the transactions in foreign currencies are included in accordance with the accounting policies detailed below.
The accompanying financial statements relate to the consolidated financial statements of the Sonaecom Group and have been prepared on a going concern basis, based on the accounting records of the companies included in the consolidation through full consolidation method (note 2) in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). These financial statements were prepared based on the acquisition cost, except for the revaluation of some financial instruments.
For Sonaecom, there are no differences between IFRS as adopted by European Union and IFRS published by the International Accounting Standards Board, with the exception of the start dates of the adoption of the standards indicated below.
Sonaecom adopted IFRS for the first time according to SIC 8 (Firsttime adoption of IAS) on 1 January 2003.
The following standards, interpretations, amendments and revisions have been approved (endorsed) by the European Union, and have mandatory application to financial years beginning on or after 1 January 2014 and were first adopted in the year ended at 31 December 2014:
1-Jan-14
Amendments to IAS 39 (Novation of Derivatives and Continuation of Hedge Accounting)
1-Jan-14 The objective of the proposed amendments is to provide an exception to the requirement for the discontinuation of hedge accounting in IAS 39 and IFRS 9 in circumstances when a hedging instrument is required to be novated as a result of laws or regulations.
IFRIC 21 Levies (Levies Charged by Public Authorities on Entities that Operate in a
Specific Market)
This interpretation clarifies on when a liability to pay a levy imposed by a government (does not include income taxes - see IAS 12 - "Income Taxes") should be recognised by an entity. IFRIC 21 identifies that the obligating event that gives rise to a liability is the activity that triggers the payment of the levy in accordance with the relevant legislation.
(*)In accordance with the Regulation, which approves the adoption of IFRS 10, 11 and 12 and the amendments to IAS 27 and IAS 28, an entity shall use these standards no later than periods beginning on or after January 1, 2014. The early adoption is however permitted.
The application of these standards and interpretations had no material effect on the financial statements of the Group.
The following standards, interpretations, amendments and revisions have been at the date of approval of these financial statements, approved (endorsed) by the European Union, whose application is mandatory only in future periods or financial years:
| Standard / Interpretation | Effective date (annual |
|---|---|
| periods beginning on or | |
| after) | |
| 1-Jul-14 | |
| Cycle | |
| amendments to IFRSs in response to eight issues addressed during | |
IAS 19 - Amendments (Defined Benefit 1-Jul-14
Plans: Employee Contributions) The objective of the amendments is to simplify the accounting for
contributions that are independent of the number of years of employee service.
These standards, although endorsed by the European Union, were not adopted by the Company for the year ended at 31 December 2014, since their application is not yet mandatory. The application of these standards and interpretations, as applicable to the Group will have no material effect on future statements of the Group.
The following standards, interpretations, amendments and revisions have not yet been approved (endorsed) by the European Union, at
| the date of approval of these financial statements: Standard / Interpretation |
Effective date (annual periods beginning on or |
|---|---|
| after) | |
| IFRS 9 (Financial Instruments) and subsequent amendments This standard introduces new requirements for classifying and measuring financial assets. |
1-Jan-18 |
| Amendments to IFRS 10 - "Consolidated Financial Statements", IFRS 12 - "Disclosure of Interests in Other Entities" and IAS 28 - "Investments in Associates and Joint Ventures" |
1-jan-16 |
| The purposed of these amendments is to clarify several issues regarding the application of the requirement for investment entities to measure subsidiaries at fair value instead of consolidating them. IFRS 10 and IAS 28 - Amendments (Sale or |
1-Jan-16 |
| Contribution of Assets between an Investor and its Associate or Joint Venture) |
|
| The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those established in IAS 28 (2011), when dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are |
|
| housed in a subsidiary. | 1-Jan-16 |
| IFRS 11 - Amendments (Accounting for Acquisitions of Interests in Joint Operations) The objective was to add new guidance on the accounting for the acquisition of an interest in a joint by controlled operation that constitutes a business. The IASB decided which acquirers of such interests shall apply all the principles applied to business combinations accounting as established in IFRS 3 - "Business Combinations", and other IFRSs, that do not conflict with the guidance provided in IFRS 11. |
|
| IFRS 14 (Regulatory Deferral Accounts) | 1-Jan-16 |
| Permits an entity which is a first-time adopter of IFRS to continue to account, with some limited changes, for 'regulatory deferral account balances', in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements. |
|
| IFRS 15 (Revenue from Contracts with Customers) IFRS 15 specifies how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers. |
1-Jan-17 |
| Amendments to IAS 1 - Presentation of | 1-Jan-16 |
| Financial Statements (Disclosures) |
The amendment introduces a set of directions and guidelines to improve and simplify the disclosures in the context of current IFRS reporting requirements.
| Standard / Interpretation | Effective date (annual | |||
|---|---|---|---|---|
| periods beginning on or | ||||
| after) | ||||
| IAS 16 and IAS 38 - Amendments | 1-Jan-16 | |||
| (Clarification of Acceptable Methods of | ||||
| Depreciation and Amortisation) | ||||
| The IASB has clarified that the use of revenue-based methods to | ||||
| calculate the depreciation of an asset is not appropriate because | ||||
| revenue generated by an activity that includes the use of an asset | ||||
| generally reflects more factors other than the consumption of the | ||||
| economic benefits embodied in the asset. | ||||
| IAS 16 and IAS 41 - Amendments | 1-Jan-16 | |||
| (Agriculture: Bearer Plants) | ||||
| The amendments bring bearer plants, which are used solely to grow | ||||
| produce, into the scope of IAS 16 so that they are accounted for in | ||||
| the same way as property, plant and equipment. | ||||
| IAS 27: Amendments (Equity Method in | 1-Jan-16 | |||
| Separate Financial Statements) | ||||
| This amendment will allow entities to use the equity method to | ||||
| account for investments in subsidiaries, joint ventures and associates | ||||
| in their separate financial statements. | ||||
| 1-Jan-16 | ||||
| Cycle | ||||
| amendments to IFRSs in response to issues addressed during the | ||||
These standards have not yet been approved European Union and, as such, were not adopted by the Group for the year ended at 31 December 2013. Their application is not yet mandatory.
Estimated that the application of these standards and interpretations, when applicable, will have no material effect on future consolidated financial statements.
During the year ended 31 December 2014, as a result of the sale of Mainroad (Note 3. d)), this was classified, for presentation effects as a discontinued operation. As set forth by IFRS 5, changes were made in the consolidated balances sheets and the consolidated profit and loss statements for the year ended at 31 December 2013, , in order to income/(loss) for the income/(loss) of discontinued operations.
Profit and loss statement at 31 December 2013
| (Amounts expressed in Euro) | Before the change |
Restatement of the Mainroad' contribution to discontinued operations |
Profit and loss statement restated |
|---|---|---|---|
| Total revenue | 120,449,875 | (12,360,914) | 108,088,961 |
| Costs and losses | |||
| External supplies and services | (44,474,432) | 6,951,975 | (37,522,457) |
| Depreciation and amortisation | (6,641,792) | 675,747 | (5,966,045) |
| Other operating costs | (70,063,034) | 4,745,143 | (65,317,891) |
| (121,179,258) | 12,372,865 | (108,806,393) | |
| Financial results | 42,124,754 | 6,961 | 42,131,715 |
| Income taxation | (3,873,144) | 60,374 | (3,812,770) |
| Consolidated net income/(loss) for the year of | |||
| continued operations | 37,522,227 | 79,286 | 37,601,513 |
| Consolidated net income/(loss) for the year of | |||
| discontinued operations | 66,244,220 | (79,286) | 66,164,934 |
| Consolidated net income/(loss) for the year | 103,766,447 | - | 103,766,447 |
| Attributed to non-controlling interests | (72,032) | - | (72,032) |
| Attributed to shareholders of parent company | 103,838,479 | - | 103,838,479 |
| Earnings per share | |||
| Including discontinued operations: | |||
| Basic | 0.29 | 0.00 | 0.29 |
| Diluted | 0.29 | 0.00 | 0.29 |
| Excluding discontinued operations: | |||
| Basic | 0.10 | 0.00 | 0.10 |
| Diluted | 0.10 | 0.00 | 0.10 |
The accounting policies and measurement criteria adopted by the Group on 31 December 2014 are comparable with those used in the preparation of 31 December 2013 financial statements.
The main accounting policies used in the preparation of the accompanying consolidated financial statements are as follows:
Investments in companies in which the Group has direct or indirect in which it has control over the financial and operating policies (definition of control used by the Group) were fully consolidated in the accompanying consolidated financial statements. Third party companies are recorded separately in the consolidated balance sheet and in the consolidated profit and loss statement, respectively, under -
Total comprehensive income is attributed to the owners of the Shareholders of parent company and the non-controlling interests even if this results in a deficit balance of non-controlling interests.
In the acquisition of subsidiaries, the purchase method is applied. The results of subsidiaries bought or sold during the year are included in the profit and loss statement as from the date of acquisition (or of control acquisition) or up to the date of sale (or of control cession). Intra-Group transactions, balances and dividends are eliminated.
The expenses incurred with the acquisition of investments in Group companies are recorded as cost when they are incurred. The fully consolidated companies are listed in note 2.
b) Investments in associated companies and companies jointly controlled
Investments in associated companies correspond to investments in which the Group has significant influence (generally investments and are recorded using the equity method.
The investments in companies jointly controlled are also recorded using the equity method. The classification of these investments is determinate based on Shareholders Agreements, which regulate the shared control.
In accordance with the equity method, investments are adjusted net results of associated companies, against a corresponding entry to gain or loss for the year, and by the amount of dividends received, as well as by other changes in the equity of the associated companies, nvestments in associated companies and companies jointly controlled is performed annually, with the aim of detecting possible impairment situations.
company or a company jointly controlled exceeds the book value of the investment, the investment is recorded at nil value, except when the Group has assumed commitments to the associated company or a company jointly controlled, a situation when a provision is recorded
The difference between the acquisition price of the investments in associated companies and companies jointly controlled and the fair value of identifiable assets and liabilities at the time of their acquisition, when positive, is recorded as Goodwill, included in the investment value and, when negative, after a reassessment, is recorded, directly, in the profit and loss statement under the caption
A description of the associated companies and companies jointly controlled is disclosed in note 8.
Tangible assets are recorded at their acquisition cost less accumulated depreciation and less estimated accumulated impairment losses.
Depreciations are calculated on a straight-line monthly basis as from the date the assets are available for use in the necessary conditions to operate as intended by the management, by a corresponding
Impairment losses detected in the realisation value of tangible assets are recorded in the year in which they arise, by a corresponding and loss statement.
The annual depreciation rates used correspond to the estimated useful life of the assets, which are as follows:
| Years of useful life |
|
|---|---|
| Buildings and other constructions | 1 - 20 |
| Plant and machinery | 3 - 15 |
| Vehicles | 1 - 4 |
| Fixtures and fittings | 1 - 10 |
| Other tangible assets | 4 - 20 |
Current maintenance and repair costs of tangible assets are recorded as costs in the year in which they occur. Improvements of significant amount, which increase the estimated useful life of the assets, are capitalised and depreciated in accordance with the remaining estimated useful life of the corresponding assets.
The estimated costs related with the mandatory dismantling and removal of tangible assets, incurred by the Group, are capitalised and depreciated in accordance with the estimated useful life of the corresponding assets.
Work in progress corresponds to tangible assets still in the construction/development stage which are recorded at their acquisition cost. These assets are depreciated as from the moment they are in condition to be used and when they are ready to start operating as intended by the management.
Intangible assets are recorded at their acquisition cost less accumulated amortisation and less estimated accumulated impairment losses. Intangible assets are only recognised if it is likely that they will bring future economic benefits to the Group, if the Group controls them and if their cost can be reasonably measured.
Intangible assets comprise, essentially, software, brands. patents, costs incurred with the acquisition of attributed under the purchase price allocation in business combinations) and know-how.
Amortisations of intangible assets are calculated on a straight-line monthly basis, over the estimated useful life of the assets (one to nineteen years, but most of which are amortized between 3 and 6 years), as from the month in which the corresponding expenses are in a straight-line basis over the estimated average retention period of the customers (six years).
Expenditures with internally-generated intangible assets, namely research and development expenditures, are recognised in the profit and loss statement when incurred.
Development expenditures can only be recognised as an intangible asset if the Group demonstrates the ability to complete the project and is able to put it in use or available for sale.
Amortisation for the period is recorded in the profit and loss
Brands and patents are recorded at their acquisition cost and are amortised on a straight-line basis over their respective estimated useful life. When the estimated useful life is undetermined, they are not depreciated but are subject to annual impairment tests.
Sonaecom Group does not hold any brands or patents with undetermined useful life, therefore the second half of the above referred paragraph is not applicable.
The differences between the price of investments in subsidiaries added the value of non-controlling interests, and the amount attributed to the fair value of the identifiable assets and liabilities at the time of their acquisition, when positive, are recorded under the calculation, are recorded directly in the profit and loss statement. The Group will choose, on an acquisition-by-acquisition basis, to measure non-controlling interests either at their proportionate interest on the fair value of the assets and liabilities acquired, or at the fair value of the non-controlling interests themselves. Until 1 January 2010, noncontrolling interests were always measured at their proportionate interest on the fair value of the acquired assets and liabilities.
Contingent consideration is recognised as a liability, at the acquisition-date, according to its fair value, and any changes to its the acquisition-date) and as long as they relate to facts and circumstances that existed at the acquisition date, otherwise these changes must be recognised in profit or loss.
Transactions regarding the acquisition of additional interests in a subsidiary after control is obtained, or the partial disposal of an investment in a subsidiary while control is retained, are accounted for gain or loss recognised.
The moment a sales transaction to generate a loss of control, should be derecognised assets and liabilities of the entity and any interest retained in the entity sold should be remeasured at fair value and any gain or loss calculated on the sale is recorded in results.
r the estimated period of recovery of the investments, usually 10 years, and the annual amortisation was recorded in the profit and loss statement 2004 and in accordance with the IFRS 3 them to impairment tests (paragraph w). Impairment losses of
Goodwill are recorded in the profit and loss statement for the period
The Group classifies its financial instruments in the following -to- -forwhich the investments were acquired.
The classification of the investments is determined at the initial recognition and re-evaluated every quarter.
This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if it has been acquired mainly with the purpose of selling it in the short term or if the adoption of this method allows reducing or eliminating an accounting mismatch. Derivatives are also registered as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to mature within 12 months of the balance sheet date.
Loans and receivables are non-derivative financial assets with fixed or variable payments that are not quoted in an active market. These financial investments arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable.
Loans and receivables are carried at amortised cost using the effective interest method, deducted from any impairment losses.
Loans and receivables are recorded as current assets, except when their maturity is greater than 12 months from the balance sheet date, a situation in which they are classified as non-current assets. Loans
Held-to-maturity investments are non-derivative financial assets with fixed or variable payments and with fixed maturities that the until their maturity.
-to-maturity
Available-for-sale financial assets are non-derivative investments that are either designated in this category or not classified in any of the other above referred categories. They are included in non-current
assets unless management intends to dispose them within 12 months of the balance sheet date.
Purchases and sales of investments are recognised on trade-date the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or initially recognised at fair value and the transaction costs are recorded in the profit and loss statement. Investments are derecognised when the rights to receive cash flows from the investments have expired or all substantial risks and rewards of their ownership have been transferred.
-forthrough profi
Realised and unrealised gains and losses arising from changes in the fair value of financial assets classified at fair value through profit or loss are recognised in the profit and loss statement. Realised and 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 securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the profit and loss statement as gains or losses from investment securities.
The fair value of quoted investments is based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using other valuation techniques. Thes transactions, reference to similar instruments, discounted cash flow specific circumstances. If none of these techniques can be used, the Group values those investments at cost net of any identified impairment losses. The fair value of listed investments is determined based on the closing Euronext share price at the balance sheet date.
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In case of equity securities classified as available-for-sale, a significant (above 25%) or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If 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 losses on that financial asset previously recognised in profit or loss is removed from equity and recognised in the profit and loss statement.
Lease contracts are classified as financial leases, if, in substance, all risks and rewards associated with the detention of the leased asset are transferred by the lease contract or as operational leases, if, in substance, there is no transfer of risks and rewards associated with the detention of the leased assets. The lease contracts are classified as financial or operational in accordance with the substance and not with the form of the respective contracts.
Tangible assets acquired under finance lease contracts and the related liabilities are recorded in accordance with the financial method. Under this method the tangible assets, the corresponding accumulated depreciation and the related liability are recorded in accordance with the contractual financial plan at fair value or, if less, at the present value of payments. In addition, interests included in lease payments and the depreciation of the tangible assets are recognised as expenses in the profit and loss statement for the period to which they relate.
Assets under long-term rental contracts are recorded in accordance with the operational lease method. In accordance with this method, the rents paid are recognised as an expense, over the rental period.
Inventories are stated at their acquisition cost, net of any impairment losses, which reflects their estimated net realisable value.
Accumulated inventory impairment losses reflect the difference between the acquisition cost and the realisable amount of inventories, as well as the estimated impairment losses due to low turnover, obsolescence and deterioration, and are registered in profit
Trade and other current debtors are recorded at their net realisable value and do not include interests, since the discount effect is not significant.
These financial instruments arise when the Group provides money, supplies goods or provides services directly to a debtor with no intention of trading the receivable.
The amounts of these captions are presented net of any impairment losses and are registered in profit and loss statement in heading losses are recorded in the profit and loss statement under the
Amounts included correspond to amounts held in cash and term bank deposits and other treasury applications where the risk of change in value is insignificant.
The consolidated cash flow statement has been prepared in accordance with IAS 7, using the direct method. The Group classifies, mature in less than three months, for which the risk of change in
in the cash flow statement also includes bank overdrafts, which are -term loans and other
The cash flow statement is classified by operating, financing and investing activities. Operating activities include collections from customers, payments to suppliers, payments to personnel and other flows related to operating activities. Cash flows from investing activities include the acquisition and sale of investments in associated, subsidiary companies and companies jointly controlled as well as receipts and payments resulting from the purchase and sale of fixed assets. Cash flows from financing activities include payments and receipts relating to loans obtained and finance lease contracts.
All amounts included under this caption are likely to be realised in the short term and there are no amounts given or pledged as guarantee.
expenses incurred in setting up loans are recorded as a deduction to the nominal debt and recognised during the period of the loan, based on the effective interest rate method. The interests incurred but not yet due are added to the loans caption until their payment.
Financial expenses relating to loans obtained are generally recognised as expenses at the time they are incurred. Financial expenses related to loans obtained for the acquisition, construction or production of fixed assets are capitalised as part of the cost of the assets. These expenses are capitalised starting from the time of preparation for the construction or development of the asset and are interrupted when the assets are ready to operate, at the end of the production or construction phases or when the associated project is suspended.
The Group only uses derivatives in the management of its financial risks to hedge against such risks. The Group does not use derivatives for trading purposes.
The cash flow hedges used by the Group are related to:
Wedo Consulting. The values and times periods involved are identical to the amounts invoiced and their maturities.
In cases where the hedge instrument is not effective, the amounts that arise from the adjustments to fair value are recorded directly in the profit and loss statement.
At 31 December 2014, the Group had foreign exchange forwards to hedge the foreign currency risk related to account receivables in dollars (note 1.v), in addition to those mentioned in note 1.x).
Provisions are recognised when, and only when, the Group has a present obligation (either legal or implicit) resulting from a past event, the resolution of which is likely to involve the disbursement of funds by an amount that can be reasonably estimated. Provisions are reviewed at the balance sheet date and adjusted to reflect the best estimate at that date.
Provisions for restructurings are only registered if the Group has a detailed plan and if that plan has already been communicated to the parties involved.
Contingent liabilities are not recognised in the consolidated financial statements but are disclosed in the notes, if the possibility of a cash outflow affecting future economic benefits is remote.
Contingent assets are not recognised in the consolidated financial statements but are disclosed in the notes when future economic benefits are likely to occur.
and deferred tax. Income tax is recognised in accordance with IAS 12
Sonaecom has adopted, since January 2008, the special regime for the taxation of groups of companies, under which, the provision for income tax is determined on the basis of the estimated taxable income of all the companies covered by that regime, in accordance with such rules. The special regime for the taxation of groups of companies covers all direct or indirect subsidiaries, and even through companies resident in another Member State of the European Union or the European Economic Area, only if, in the last case, there is an obligation of administrative cooperation, on which the Group holds at least 75% of their share capital, where such participation confers more than 50% of voting rights, if meet certain requirements. The remaining Group companies not covered by the special regime for the taxation of groups of companies are taxed individually based on their respective taxable income, in accordance with the tax rules in force in the location of the headquarters of each company.
Deferred taxes are calculated using the liability method and reflect the timing differences between the amount of assets and liabilities
for accounting purposes and the respective amounts for tax purposes.
Deferred tax assets are only recognised when there is reasonable expectation that sufficient taxable profits shall arise in the future to allow such deferred tax assets to be used. At the end of each year the recorded and unrecorded deferred tax assets are revised and they are reduced whenever their realisation ceases to be probable, or increased if future taxable profits are, likely, enabling the recovery of such assets (note 11).
Deferred taxes are calculated with the tax rate that is expected to be in force at the time the asset or liability will be used based on decreed tax rate or substantially decreed tax rate at balance sheet date.
Whenever deferred taxes derive from assets or liabilities directly cording is also made under the always recorded in the profit and loss statement.
Subsidies awarded to finance personnel costs are recognised as less cost during the period in which the Group incurs the associated costs and are included in the profit and loss statement under the caption
Subsidies awarded to finance investments are recorded as deferred income on the Balance Sheet and are included in the profit and loss are recognized during the estimated useful life of the corresponding assets.
For businesses in the digital security area, non-repayable subsidies are recognized in the balance sheet as deferred income and are recognized in the profit and loss statement in 'Other operating income'. The incentive is recognized during the project development period.
The reimbursable subsidies are recognized in the balance sheet as liabilities in 'Medium and long-term loans net of short-term portion ' and 'Short-term loans and other loans' and are depreciated in accordance with the established payment plans. These subsidies are recorded at amortized cost in accordance with the method of effective interest rate.
Expenses and income are recorded in the period to which they relate, regardless of their date of payment or receipt. Estimated amounts are used when actual amounts are not known.
The costs attributable to current year and whose expenses will only occur in future years are estimated and recorded under the caption possible to estimate reliably the amount and the timing of occurrence of the expense. If there is uncertainty regarding both the date of disbursement of funds, and the amount of the obligation, the value is classified as Provisions (note o).
Sales revenues are recognised in the consolidated profit and loss statement when the significant risks and rewards associated with the ownership of the assets are transferred to the buyer and the amount of the corresponding revenue can be reasonably quantified. Sales are recognised before taxes and net of discounts. The revenues and costs of the consultancy projects developed in the information systems consultancy segment are recognised in each period, according to the percentage of completion method.
Non-current financial assets and liabilities are recorded at fair value and, in each period, the financial actualization of the fair value is
such amounts are appropriately established and communicated.
Assets and liabilities due in more than one year from the date of the balance sheet are classified, respectively, as non-current assets and non-current liabilities.
In addition, considering their natu current assets and liabilities (notes 11 and 22).
Portuguese commercial legislation requires that at least 5% of the annual reserve reaches at least 20% of the share capital. This reserve is not distributable, except in case of liquidation of the Company, but may be used to absorb losses, after all the other reserves are exhausted, or to increase the share capital.
The share premiums relate to premiums generated in the issuance of capital or in capital increases. According to Portuguese Commercial law, share premiums follow the same requirements of but they can be used to absorb losses, after all the other reserves are exhausted or to increase share capital.
According to IFRS 2 related with the Medium Term Incentive Plans is registered under the distributable and which can not be used to absorb losses. Hedging reserve
H hedges derivatives that are considered effective (note 1.n)) and it is non-distributable nor can it be used to absorb losses.
The own shares reserve reflects the acquisition value of the own shares and follows the same requirements of legal reserve.
Under Portuguese law, the amount of distributable reserves is determined in accordance with the individual financial statements of the Company, presented in accordance with IFRS. Additionally, the increments resulting from the application of fair value through equity components, including its implementation through net results, shall be distributed only when the elements that gave rise to them are sold, liquidated or exercised or when they finish their use, in the case of tangible or intangible assets. Therefore, at 31 December 2014, Sonaecom, SGPS, S.A. have free reserves distributable amounting approximately Euro 26,5 million. To this effect were considered as distributable increments resulting from the application of fair value through equity components already exercised during the period ended 31 December 2014.
or losses arising from the sale of own shares are recorded under the
All assets and liabilities expressed in foreign currency were translated into euro using the exchange rates in force at the balance sheet date.
Favorable and unfavorable foreign exchange differences resulting from changes in the rates in force at transaction date and those in force at the date of collection, payment or at the balance sheet date are recorded as income and expenses in the consolidated profit and loss statement of the year, in financial results.
Entities operating abroad with organisational, economic and financial autonomy are treated as foreign entities.
Assets and liabilities of the financial statements of foreign entities are translated into Euro using the exchange rates in force at the balance sheet date, while expenses and income in such financial statements are translated into euro using the average exchange rate for the period. The resulting exchange differences are recorded under
Goodwill and adjustments to fair value generated in the acquisitions of foreign entities reporting in a functional currency other than Euro are translated into Euro using the exchange rates prevailing at the balance sheet date.
The following rates were used to translate into Euro the financial statements of foreign subsidiaries and the balances in foreign currency:
| 2014 | 2013 | |||
|---|---|---|---|---|
| 31 | 31 | |||
| December | Average | December | Average | |
| Pounds Sterling | 1.2839 | 1.2407 | 1.1995 | 1.1780 |
| Brazilian Real | 0.3105 | 0.3206 | 0.3070 | 0.3508 |
| American Dollar | 0.8237 | 0.7538 | 0.7251 | 0.7533 |
| Polish Zloti | 0.2340 | 0.2390 | 0.2407 | 0.2383 |
| Australian Dollar | 0.6744 | 0.6796 | 0.6484 | 0.7294 |
| Mexican Peso | 0.0560 | 0.0567 | 0.0553 | 0.0591 |
| Egyptian Pound | 0.1155 | 0.1068 | 0.1044 | 0.1097 |
| Malaysian Ringgit | 0.2354 | 0.2303 | 0.2211 | 0.2393 |
| Chilean Peso | 0.0014 | 0.0013 | 0.0014 | 0.0015 |
| Singapore Dollar | 0.6227 | 0.5948 | 0.5743 | 0.6021 |
| Swiss Franc | 0.8317 | 0.8233 | 0.8146 | 0.8125 |
| Swedish Krona | 0.1065 | 0.1099 | 0.1129 | 0.1156 |
| South African Rand | 0.0713 | 0.0695 | 0.0687 | 0.0783 |
| Angolan Kwanza | 0.0080 | 0.0077 | 0.0074 | 0.0078 |
| Colombian Peso | 0.0004 | 0.0004 | 0.0004 | 0.0004 |
| Canadian Dollar | 0.7111 | 0.6824 | 0.6816 | 0.7316 |
| Moroccan Dirham | 0.0912 | 0.0896 | 0.0890 | 0.0897 |
At 31 December 2014, the Group had foreign exchange forwards amount to USD 5,333,000 (USD 4,060,461, at 31 December 2013), fixing the exchange rate for EUR, which have an average maturity of 1 month (2 months at 31 December 2013).
Impairment tests are performed at the date of each balance sheet and whenever an event or change of circumstances indicates that the recorded amount of an asset may not be recoverable. Whenever the book value of an asset is greater than the amount recoverable, an impairment loss is recognised and recorded in the profit and loss The recoverable amount is the greater of the net selling price and the value in use. Net selling price is the amount obtainable upon the sale of an asset in a transaction within the capability of the parties involved, less the costs directly related to the sale. The value in use is the present value of the estimated future cash flows expected to result from the continued use of the asset and of its sale at the end of its useful life. The recoverable amount is estimated for each asset
Evidence of the existence of impairment in accounts receivables appears when:
For certain categories of financial assets for which it is not possible to determine the impairment for each asset individually, the analysis is made for a group of assets. Evidence of an impairment loss in a portfolio of accounts receivable may include past experience in terms of collections, increasing number of delays in collections, as well as changes in national or local economic conditions that are related with the collections capacity.
For goodwill and financial investments in associated companies, the recoverable amount, calculated in terms of value in use, is determined based on the most recent business plans duly approved investments in companies jointly controlled the recoverable amount is determinate taking into account with several information as business plans approved by the Board of Directors and the average ratings of external reviewers (researches).
For Accounts receivables, the Group uses historical and statistical information to estimate the amounts in impairment. For Inventories, the impairment is calculated based on market evidence and several indicators of stock rotation.
The accounting treatment of Medium Term Incentive Plans is based on IFRS 2 -
Under IFRS 2, when the settlement of plans established by the Group responsibility is recorded, as a credit entry, under the caption
The quantification of this responsibility is based on fair value and is recognised over the vesting period of each plan (from the award date of the plan until its vesting or settlement date). The total responsibility, at any point of time, is calculated based on the respective accounting date.
When the responsibilities associated with any plan are covered by a hedging contract, i.e., when those responsibilities are replaced by a fixed amount payable to a third party and when Sonaecom is no longer the party that will deliver the Sonaecom shares, at the settlement date of each plan, the above accounting treatment is subject to the following changes:
For plans settled in cash, the estimated liability is recorded under the ng to the date. The liability is quantified based on the fair value of the shares as of each balance sheet date.
When the liability is covered by a hedging contract, recognition is made in the same way as described above, but with the liability being quantified based on the contractually fixed amount.
Equity-settled plans to be liquidated through the delivery of shares of Sonae SGPS are recorded as if they were settled in cash, which means that the estimated liability is recorded under the balance deferred period elapsed. The liability is quantified based on the fair value of the shares as of each balance sheet date.
For 2011 Sonaecom shares plan, the Company was signed with Sonae-SGPS, S.A., a contract that agrees to the transfer of Sonaecom, SGPS, S.A. shares for employees and board members of the Group as requested by Sonaecom and under the MTIP of This contract ceased during the year of 2014.
For Sonaecom shares plans, the company converted all such plans into shares of Sonae SGPS. The impacts associated to the Medium Term Incentive Plans are registered, in the balance sheet, under the
caption ´Other current liabilities' and 'Other non-current liabilities' (note 39).
At 31 December 2014, the Sonae SGPS shares plans resulting from the conversion of the original plan of Sonaecom shares were covered by hedging contracts with the parent company, which fixed the price for the acquisition of such shares at that responsibility with the plans is recorded at the price specified in the contract, in proportion to the time elapsed since the award date until the payment date, the other plan is not covered by the contract being recorded liability at fair value. Therefore, the responsibility is recorded based on that fixed price, proportionally to the period of time elapsed since the award -current income statement under the captio
Events occurring after the date of the balance sheet which provide additional information about conditions prevailing at the time of the balance sheet (adjusting events) are reflected in the consolidated financial statements. Events occurring after the balance sheet date that provide information on post-balance sheet conditions (nonadjusting events), when material, are disclosed in the notes to the consolidated financial statements.
The most significant accounting estimates reflected in the consolidated financial statements of the years ended at 31 December 2014 and 2013, are as follows:
Estimates used are based on the best information available during the preparation of the consolidated financial statements and are based on the best knowledge of past and present events. Although future events are neither foreseeable nor controlled by the Group, some could occur and have impact on such estimates. Changes to the estimates used by the management that occur after the approval date of these consolidated financial statements, will be recognised in net income, in accordance with IAS 8 methodology.
The main estimates and assumptions in relation to future events included in the preparation of these consolidated financial statements are disclosed in the corresponding notes, when applicable.
Due to its activities, the Group is exposed to a variety of financial risks such as market risk, liquidity risk and credit risk.
These risks arise from the unpredictability of financial markets, which affect the capacity of project cash flows and profits. The Group financial risk management, subject to a long-term ongoing perspective, seeks to minimise potential adverse effects that derive from that uncertainty, using, whenever it is possible and advisable, derivative financial instruments to hedge the exposure to such risks (note 1.n).
The Group is also exposed to equity price risks arising from equity investments, although they are usually maintained for strategic purposes.
The Group operates internationally, having subsidiaries that operate in countries with a different currency than Euro namely Brazil, United Kingdom, Poland, United States of America, Mexico, Australia, Egypt, Colombia, Panama, Singapore and Malaysia (branch) and so it is exposed to foreign exchange rate risk.
Foreign exchange risk management seeks to minimise the volatility of investments and transactions made in foreign currencies and contributes to reduce the sensitivity of Group results to changes in foreign exchange rates.
Whenever possible, the Group uses natural hedges to manage exposure, by offsetting credits granted and credits received expressed in the same currency. When such a procedure is not possible, the Group adopts derivative financial hedging instruments (note 1.n).
The Group's exposure to foreign exchange rate risk, results essentially from the fact that some of its subsidiaries report in a currency different from euro, making the risk of operational activity immaterial.
The amount of assets and liabilities (in Euro) belonging to the Group and recorded in a different currency is as follows:
| Assets | Liabilities | |||
|---|---|---|---|---|
| 31 December | 31 December | 31 December | 31 December | |
| 2014 | 2013 | 2014 | 2013 | |
| American Dollar | 34,275,275 | 21,637,176 | 20,680,010 | 20,865,270 |
| Australian Dollar | 107,260 | 91,470 | 465,128 | 268,625 |
| Egyptian Pound | 702,303 | 515,284 | ||
| Pounds Sterling | 4,966,107 | 5,261,738 | 5,413,231 | 5,623,137 |
| Mexican Peso | 6,210,283 | 2,769,540 | 5,802,943 | 1,281,814 |
| Brazilian Real | 5,277,748 | 6,222,138 | 3,832,735 | 4,829,559 |
| Malaysian Ringgit | 757,351 | 648,169 | 447,262 | 431,156 |
| Polish Zloti | 155,746 | 150,473 | 472,026 | 361,454 |
| Singapore Dollar | 404,516 | 31,174 | ||
| Swiss Franc | 2,308,337 | 345,616 | ||
| Canadian Dollar | 2,902 | |||
| Pesos Colombianos | 35,646 | 49,911 | 269,227 | 114,726 |
| 2014 | 2013 | ||||
|---|---|---|---|---|---|
| Change in | |||||
| exchange | |||||
| rates | Income | funds | Income | funds | |
| American Dollar | 5% | 749,359 | (69,595) | 35,495 | 3,101 |
| Australian Dollar | 5% | (624) | (17,270) | (2,929) | (5,928) |
| Swiss Franc | 5% | 115,417 | - | 17,281 | - |
| Egyptian Pound | 5% | 35,115 | - | 25,764 | - |
| Pounds Sterling | 5% | 159,578 | (181,934) | 132,546 | (150,616) |
| Mexican Peso | 5% | 61,889 | (41,522) | 44,162 | 30,225 |
| Brazilian Real | 5% | (2,459) | 74,710 | (604) | 70,233 |
| Malaysian Ringgit | 5% | 22,120 | (6,616) | 17,071 | (6,221) |
| Polish Zloti | 5% | (14,104) | (1,710) | (10,633) | 84 |
| Singapore Dollar | 5% | - | - | 18,663 | 4 |
| Euro | 5% | (210,088) | - | (118,973) | - |
| Canadian Dollar | 5% | 145 | - | - | - |
| Pesos Colombianos | 5% | 875 | (12,554) | 1,051 | (4,291) |
| 917,223 | (256,491) | 158,894 | (63,409) |
the exchange rate is as
follows (increases/(decreases)):
total debt is indexed to variable rates, exposing the total cost of debt to a high risk of volatility. The impact of this volatility on effect of the following factors (i) relatively low level of financial leverage; (ii) possibility to use derivative financial instruments that hedge the interest rate risk, as mentioned below; (iii) possible correlation between the level of market interest rates and economic growth having the latter a posit consolidated results (particularly operational), and in this way and (iv) the existence of stand alone or consolidated liquidity which is also bearing interest at a variable rate.
The Group only uses derivatives or similar transactions to hedge interest rate risks considered significant. Three main principles are followed in all instruments selected and used to hedge interest rate risk:
rate are used swaps and other derivatives, when it is deemed necessary, to hedge future changes in cash flow relating to interest payments. Interest rate swaps have the financial effect of converting the respective borrowings from floating rates to fixed rates. Under the interest rate swaps, the Group agrees with third parties (banks) to exchange, in pre-determined periods, the difference between the amount of interest calculated at the fixed contract rate and the floating rate at the time of re-fixing, by reference to the respective agreed notional amounts.
The counterparties of the derivative hedging instruments are limited contracting such instruments, to give preference to financial institutions that form part of its financing transactions. In order to select the counterparty for occasional operations, Sonaecom requests proposals and indicative prices from a representative number of banks in order to ensure adequate competitiveness of these operations.
In determining the fair value of hedging operations, the Group uses certain methods, such as option valuation and discounted future cash flow models, using assumptions based on market interest rates prevailing at the balance sheet date.
Comparative financial institution quotes for the specific or similar instruments are used as a benchmark for the valuation.
The fair value of the derivatives contracted, that are considered as fair value hedges or the ones that are considered not sufficiently effective for cash flow hedge (in accordance with the provisions established in IAS 39), are recognised under borrowings captions and changes in the fair value of such derivatives are recognised directly in the profit and loss statement for the year. The fair value of derivatives of cash flow hedge, that are considered effective according to IAS 39, are recognised under borrowing captions and changes in the fair value are recognised in equity.
the financing with significant impact in the Group, based on the analysis of the debt structure, the risks and the different options in the market, particularly as to the type of interest rate (fixed / variable). Under the policy defined above, the Executive Committee is responsible for the decision on the occasional interest rate hedging contracts, through the monitoring of the conditions and alternatives existing in the market.
At 31 December 2014, are not contracted any derivatives of interest rate hedging.
The analysis of sensibility to interest rate risk is presented in note 20.
The existence of liquidity in the Group requires the definition of some policies for an efficient and secure management of the liquidity, allowing us to maximise the profitability and to minimise the opportunity costs related to that liquidity.
The liquidity risk management has a threefold objective: (i) Liquidity, i.e., to ensure the permanent access in the most efficient way to obtain sufficient funds to settle current payments within the respective dates of maturity as well as any eventual not forecasted requests for funds, within the deadlines set for this; (ii) Safety, i.e. to minimise the probability of default in any reimbursement of application of funds; and (iii) Financial Efficiency, i.e., to ensure that the Group maximises the value / minimises the opportunity cost of holding excess liquidity in the short term.
The main underlying policies correspond to the variety of instruments allowed, the maximum acceptable level of risk, the maximum amount of exposure by counterparty and the maximum periods for investments.
The existing liquidity in the Group should be applied to the alternatives and by the order described below:
The applications in the market are limited to eligible counterparties, with ratings previously established by the Board and limited to certain maximum amounts by counterparty.
The definition of maximum amounts intends to ensure that the application of liquidity in excess is made in a prudent way and taking into consideration the best practices in terms of bank relationships.
The maturity of applications should equal the forecasted payments (or the applications should be easily convertible, in the case of asset investments, to allow urgent and not estimated payments), considering a threshold for eventual deviations on the estimates. The threshold depends on the accuracy level of treasury estimates and would be determined by the business. The accuracy of the estimates
is an important variable to quantify the amounts and the maturity of the applications in the market.
The maturity analysis for the loans obtained is presented in note 20.
accounts receivable related to current operational activities. The credit risk associated to financial operations is mitigated by the fact that the Group only negotiates with entities with high credit quality.
The management of this risk seeks to guarantee that the amounts owing are effectively collected within the periods negotiated without affecting the financial health of the Group. The Group uses credit rating agencies and has specific departments responsible for risk control, collections and management of processes in litigation, as well as credit insurances, which all contribute to the mitigation of credit risk.
The amounts included in the financial statements related to trade debtors and other debtors, net of impairment losses, represent the maximum exposure of the Group to credit risk.
Group companies included in the consolidation through full consolidation method, their head offices, main activities, Shareholders and percentage of share capital held at 31 December 2014 and 2013, are as follows:
| Percentage of share capital held | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | ||||||||
| Company (Commercial brand) | Head office | Main activity | Shareholder | Direct | Effective* | Direct | Effective* | ||
| Parent company | |||||||||
| Subsidiaries | Maia | Management of shareholdings. | - | - | - | ||||
| Dublin | Rendering of consultancy services in the area of information systems. |
We Do | 100% | 100% | 100% | 100% | |||
| Maia | Development of management platforms and commercialisation of products, services and information, with the internet as its main support. |
Sonae com SI | 75.10% | 75.10% | 75.10% | 75.10% | |||
| ('Itrust') (a) | Maia | Commercialization of products and management services, implementation and consulting in information systems and technologies areas. |
Sonaecom CSI | 100% | 100% | ||||
| Lookwise, S.L.U. ('Lookwise') (b) | Navarra | Development, promotion and commercial exploitation of information systems with solutions in safety and regulatory compliance, including assignment or transfer to third parties. Research, development and innovation, as well as consulting, maintenance and audit for products, systems, facilities and communication and security services. |
S21 Sec Gestion | 100% | 60% | ||||
| Lugares Virtuais, S.A. | Maia | Organisation and management of electronic online portals, content acquisition, management of electronic auctions, acquisition and deployment of products and services electronically and any related activities. |
Miauger | Dissolved | 100% | 100% | |||
| Maia | Rendering of consultancy services in IT areas. | Sonae com SI | Sold | 100% | 100% | ||||
| Maia | Organisation and management of electronic auctions of products and services on-line. |
Sonaecom | Dissolved | 100% | 100% | ||||
| PCJ - Público, Comunicação e Jornalismo, S.A. ('PCJ') |
Maia | Editing, composition and publication of periodical and non periodical material and the exploration of radio and TV stations and studios. |
Sonaecom | 100% | 100% | 100% | 100% | ||
| Berkshire | Rendering of consultancy services in the area of information systems. |
Sonae com SI We Do UK |
100% - |
100% - |
- 100% |
- 100% |
|||
| Oporto | Editing, composition and publication of periodical and non periodical material. |
Sonaecom | 100% | 100% | 100% | 100% | |||
| S21 Sec Barcelona, S.L. ('S21 Sec Barcelona') (b) | Barcelona | Consulting, advisory, audit and maintenance of all types of facilities and advanced communications services and security systems. Purchase and installation of advanced communications and security systems produced by others. |
S21 Sec Gestion | 100% | 60% | ||||
| S21 Sec Brasil, Ltda ('S21 Sec Brasil') (b) | São Paulo | Consulting in information technology. Development and licensing of customizable computer programs. Development of custom computer programs. Technical support, maintenance and other services in information technology. |
S21 Sec Gestion | 99.99% | 59.99% | ||||
| S21 Sec Fraud Risk Management, S.L. ('S21 Sec FRM') (b) |
Navarra | Consulting, advisory, audit and maintenance of all types of facilities and advanced communications services and security systems. Purchase and installation of advanced communications and security systems produced by others. |
100% 60% S21 Sec Gestion |
||||||
| S21 Sec Gestion, S.A. ('S21 Sec Gestion') (b) | Navarra | Consulting, advisory, audit and maintenance of all types of facilities and advanced communications services and security systems. Purchase and installation of advanced communications and security systems produced by others. |
Sonaecom CSI | 60% | 60% | ||||
| S21 Sec Inc. ('S21 Sec Inc.') (b) | Texas | Consulting, advisory, audit and maintenance of all types of facilities and advanced communications services and security systems. Purchase and installation of advanced communications and security systems produced by others. |
S21 Sec Gestion | 100% | 60% | ||||
| S21 Sec Information Security Labs, S.L. ('S21 Sec Labs') (b) |
Navarra | Research, development and innovation, as well as consulting, maintenance and audit for products, systems, facilities and communication and security services. |
S21 Sec Gestion | 100% | 60% |
| Percentage of share capital held | |||||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | ||||||
| Company (Commercial brand) S21 Sec Institute, S.L. ('S21 Sec Institute') (b) |
Head office Gipuzcoa |
Main activity Education, formation, awareness, counseling, technical assistance, certification, research, innovation and development, in all types of methodologies, career plans, safety culture, products and services of digital security and cyber security, facilities, services and systems of advanced communication environments and digital security. |
Shareholder S21 Sec Gestion |
Direct 100% |
Effective* 60% |
Direct | Effective* |
| S21 Sec México, S.A. de CV ('S21 Sec México') (b) Mexico City | Computer consulting services | S21 Sec Gestion | 99.87% | 60% | |||
| S21 Sec, S.A. de CV ('S21 Sec, S.A. de CV') (b) | Mexico City | Computer consulting services | S21 Sec Gestion | 99.99% | 60% | ||
| ('Saphety') | Maia | Rendering services, training, consultancy services in the area of communication, process and electronic certification of data; trade, development and representation of software. |
Sonae com SI | 86.995% 86.995% | 86.995% 86.995% | ||
| Saphety Brasil Transações Eletrônicas Ltda. ('Saphety Brasil') |
São Paulo | Rendering services, training, consultancy services in the area of communication, process and electronic certification of data; electronic identification, storage and availability of databases and electronic payments; trade, development and representation of software related with these services. |
Saphety | 99.8% | 86.821% | 99.8% | 86.821% |
| ('Saphety Colômbia') | Bogotá | Rendering services, training, consultancy services in the area of communication, process and electronic certification of data; electronic identification, storage and availability of databases and electronic payments; trade, development and representation of software related with these services. |
Saphety | 100% 86.995% | 100% 86.995% | ||
| Servicios de Inteligencia Estratégica Global, S.L. ('SIEG') (b) |
Navarra | Provision of advice services, guidance, consulting, team building and training in areas of research, testing, processing and delivering relevant information for strategic and operational management of companies, governments, organizations and institutions. Support services and support to business and defense of companies and organizations internationally. Research, development, innovation and marketing methodologies, software, hardware and technologies in general, within the scope of research, analysis and automatic and intelligent processing of information, including sensitivity analysis and indicators prospectively. |
S21 Sec Gestion | 100% | 60% | ||
| SGPS, S.A. ('Sonaecom CSI') (f) | Maia | Management of shareholdings. | Sonae com SI | 100% | 100% | ||
| Sonaecom - Serviços Partilhados, S.A. ('Sonaecom SP') |
Maia | Support, management consulting and administration, particularly in the areas of accounting, taxation, administrative procedures, logistics, human resources and training. |
Sonaecom | 100% | 100% | 100% | 100% |
| Maia | Management of shareholdings in the area of corporate ventures and joint ventures. |
Sonaecom | 100% | 100% | 100% | 100% | |
| Sonaecom - Sistemas de Información Espanã, S.L. ('SSI Espanã') |
Madrid | Rendering of consultancy services in the area of information systems. |
Sonae com SI | 100% | 100% | 100% | 100% |
| Sonaecom BV | Amsterdam | Management of shareholdings. | Sonaecom | 100% | 100% | 100% | 100% |
| Sonaetelecom BV | Amsterdam | Management of shareholdings. | Sonaecom | 100% | 100% | 100% | 100% |
| Tecnológica Telecomunicações, LTDA. | Rio de Janeiro | Rendering of consultancy and technical assistance in the area of IT systems and telecommunications. |
We Do Brasil | 99.99% | 99.90% | 99.99% | 99.90% |
| Maia | Rendering of consultancy services in the area of information systems. |
Sonae com SI | 100% | 100% | 100% | 100% | |
| Wedo do Brasil Soluções Informáticas, Ltda. | Rio de Janeiro | Commercialisation of software and hardware; rendering of consultancy and technical assistance related to information technology and data processing. |
We Do | 99.91% | 99.91% | 99.91% | 99.91% |
| Poznan | Rendering of consultancy services in the area of information systems. |
Cape Technologies | 100% | 100% | 100% | 100% | |
| Delaware | Rendering of consultancy services in the area of information systems. |
Cape Technologies | 100% | 100% | 100% | 100% | |
| Sydney | Rendering of consultancy services in the area of information systems. |
Cape Technologies | 100% | 100% | 100% | 100% | |
| Amsterdam | Management of shareholdings. | We Do | 100% | 100% | 100% | 100% | |
| Kuala Lumpur | Rendering of consultancy services in the area of information systems. |
We Do BV | 100% | 100% | 100% | 100% |
| Percentage of share capital held | |||||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | ||||||
| Company (Commercial brand) | Head office | Main activity | Shareholder | Direct Effective* | Direct Effective* | ||
| Cairo | Rendering of consultancy services in the area of information | We Do BV | 90% | 90% | 90% | 90% | |
| systems. | Sonaecom BV | 5% | 5% | 5% | 5% | ||
| Sonaetelecom BV | 5% | 5% | 5% | 5% | |||
| Berkshire | Rendering of consultancy services in the area of information systems. |
We Do | 100% | 100% | 100% | 100% | |
| Mexico City | Rendering of consultancy services in the area of information | Sonaecom BV | 0.001% | 0.001% | 0.001% | 0.001% | |
| systems. | We Do BV | 99.999% | 99.999% | 99.999% | 99.999% | ||
| We Do Technologies Panamá S.A. ('We Do | Panamá City | Rendering of consultancy services in the area of information | We Do BV | Settled | 100% | 100% | |
| Panamá') (h) | systems. | ||||||
| We Do Technologies Singapore PTE. LTD. ('We | Singapore | Rendering of consultancy services in the area of information | We Do BV | Settled | 100% | 100% | |
| Do Singapura') (i) | systems. | ||||||
| * Sonaecom effective participation | |||||||
| (a) Company established in July 2014 | |||||||
| (b) Company adquired in July 2014 | |||||||
| (c) Company dissolved in February 2014 | |||||||
| (d) Company sold in September 2014 | |||||||
| (e) Company dissolved in May 2014 | |||||||
| (f) Company established in May 2014 | |||||||
| (g) Company began its liquidation process at 1 January 2015 | |||||||
| (h) Company settled in 2014 |
(i) Company settled in December 2014
All the above companies were included in the consolidation in accordance with the full consolidation method under the terms of IAS 27 anies).
During the years ended at 31 December 2014 and 2013, the following changes occurred in the composition of the Group:
| Purchaser | Subsidiary | % Direct Date Participation |
% Effective Participation |
|
|---|---|---|---|---|
| 2014 | ||||
| Sonaecom CSI | Lookwise | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec Barcelona | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec Brasil | Jul-14 | 99.99% | 59.99% |
| Sonaecom CSI | S21 Sec FRM | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec Gestion | Jul-14 | 60% | 60% |
| Sonaecom CSI | S21 Sec Inc. | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec Labs | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec Institute | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec México | Jul-14 | 99.87% | 60% |
| Sonaecom CSI | S21 Sec, S.A. de CV | Jul-14 | 99.99% | 60% |
| Sonaecom CSI | SIEG | Jul-14 | 100% | 60% |
| Sonaecom CSI | S21 Sec Ciber seguridad | Jul-14 | 50% | 30% |
| Sonaecom CSI | Big Data | Jul-14 | 50% | 30% |
| 2013 | ||||
| Saphety | Saphety Brasil | Feb-13 | 99.8% | 86.8% |
acquired in 31 July 2014 incorporated in the Group consolidations statements could be detailed as follows:
| (Amounts expressed in Euro) | Notes | Values before acquisition |
Adjustments to fair value |
Fair value |
|---|---|---|---|---|
| Acquired assets | ||||
| Tangible assets | 5 | 296,360 | - | 296,360 |
| Intangible assets | 6 | 8,415,602 | - | 8,415,602 |
| Other non current assets | 373,756 | - | 373,756 | |
| Deferred tax assets | 11 | 1,044,217 | - | 1,044,217 |
| Trade debtors | 2,276,529 | - | 2,276,529 | |
| Other current debtors | 1,983,746 | - | 1,983,746 | |
| Other current assets | 746,850 | - | 746,850 | |
| Cash and cash equivalents | 2,828,615 | - | 2,828,615 | |
| 17,965,675 | - | 17,965,675 | ||
| Acquired liabilities | ||||
| 10,550,712 | - | 10,550,712 | ||
| Provisions for other liabilities and charges | 2 2 | - | 273,266 | 273,266 |
| Other non-current liabilities | 41,901 | - | 41,901 | |
| Short-term loans and other loans | 2,416,104 | - | 2,416,104 | |
| Trade creditors | 1,679,816 | - | 1,679,816 | |
| Other creditors | 2,686,420 | - | 2,686,420 | |
| Other current liabilities | 242,455 | - | 242,455 | |
| 17,617,408 | 273,266 | 17,890,674 | ||
| Net assets and liabilities | 348,267 | (273,266) | 75,001 | |
| Acquisition price | 75,001 | |||
| Goodwill / (Badwill) | - |
Following this acquisition, is being performed a preliminary assessment of the fair value of assets acquired and assumed liabilities through this operation, having been registered Provisions for other liabilities and charges to cover several contingencies.
Several scenarios were included in the various reviews and sensitivity analysis performed, on which did not result significant variations in the allocation of the fair value of assets and liabilities. For the remaining assets and liabilities no significant differences were identified between the fair value and the respective book value.
The allocation of the acquisition price is still subject to changes until the conclusion of a period of one year from the date of acquisition, in accordance with IFRS 3 - Business Combinations. However, the Group does not expect material changes as a result of the allocation changes made.
The contribution of the S21 Group, to the net income attributed to shareholders of Sonaecom, for the year ended at 31 December 2014, was negative at the amount of 1,049 thousand euros.
The detail of this contribution is as follows:
| (Amounts expressed in Euro) | Contribution at 31 December 2014 |
|---|---|
| Total Revenues | 6,316,027 |
| Costs and losses | |
| Cost of sales | (1,410,563) |
| External supplies and services | (1,200,463) |
| Staff expenses | (3,675,197) |
| Depreciations and amortisations | (1,455,886) |
| Other operating costs | (25,428) |
| (7,767,537) | |
| Financial Results | (339,483) |
| Income Tax | (192,743) |
| Net income for the year before non-controlling interests | (1,983,736) |
| Net income attributed to non-controlling interests | (934,377) |
| Net income attributed to shareholders of parent company | (1,049,359) |
If the S21 Group had been consolidated since 1 January 2014, the amounts of consolidated operating revenues and net income before non-controlling interests for the year ended at 31 December 2014, were as follows:
| (Amounts expressed in Euro) | 31 December 2014 ('Pro-forma') |
|---|---|
| Consolidated operating revenues | 133,011,594 |
| Net income before non-controlling interests | 24,331,672 |
The contribution of the S21 Group in the consolidated balance sheet of Sonaecom at 31 December 2014, is as follows:
| (Amounts expressed in Euro) | Contribution at 31 December 2014 |
|---|---|
| Assets | |
| Tangible Assets | 202,436 |
| Intangible Assets | 7,138,703 |
| Deferred tax assets | 924,079 |
| Trade debtors | 3,988,335 |
| Other current debtors | 1,841,702 |
| Cash and cash equivalents | 747,617 |
| Other assets | 1,354,200 |
| Total assets | 16,197,072 |
| Liabilities | |
| 8,605,481 | |
| Other non-current Liabilities | 323,874 |
| Short-term loans and other loans | 1,816,177 |
| Trade creditors | 1,552,450 |
| Other creditors | 1,076,124 |
| Current liabilities | 1,875,937 |
| Total liabilities | 15,250,043 |
| Net assets | 947,029 |
| Shareholder | Subsidiary | Date | Share capital | Current % shareholding |
|---|---|---|---|---|
| 2014 | ||||
| Sonae com SI | Sonaecom CSI | May-14 | 50,000 EUR | 100% |
| Sonaecom CSI | Itrust | Jul-14 | 50,000 EUR | 100% |
| 2013 | ||||
| Saphety | Saphety Colômbia | Apr-13 | 50,000,000 COP* | 100% |
* Corresponds to about Euro 17,500 (at 31 December 2014 rate)
| Shareholder | Subsidiary | Date | Share capital |
|---|---|---|---|
| 2014 | |||
| Miauger | Lugares Virtuais | Feb-14 | 100% |
| Sonaecom | Miauger | May-14 | 100% |
| We Do BV | We Do Panamá | Dec-14 | 100% |
| We Do BV | We Do Singapura | Dec-14 | 100% |
| 2013 | |||
| We Do BV | We Do Chile | May-13 | 100% |
| Shareholder | Subsidiary | Date | % shareholding |
|---|---|---|---|
| 2014 | |||
| Sonae com SI | Mainroad | Sep-14 | 100% |
| 2013 | |||
| Sonae com SI | Infosystems | Nov-13 | 50% |
In September 2014, Mainroad was sold for the company jointly controlled NOS Communications SA for Euro 14 million, amount based on independent evaluations. The purchase and sale agreement contemplates the possibility of future adjustments to the base price, arising from trends in future revenues. As a result of the sale value and the derecognition of Mainroad, was generated, in the consolidated accounts of Sonaecom, a gain of Euro 12.6 million, as follows:
| (Amounts expressed in Euro) | Notes | 30 September 2014 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Tangible assets | 5 | (2,437,500) |
| Intangible assets | 6 | (169,646) |
| Deferred tax assets | 11 | (169,548) |
| Total non-current assets | (2,776,694) | |
| Current assets | ||
| Trade debtors | (2,971,079) | |
| Other current debtors | (122,457) | |
| Other current assets | (545,243) | |
| Cash and cash equivalents | (645,074) | |
| Total current assets | (4,283,853) | |
| Liabilities | ||
| Non-current liabilities | ||
| Other non-current financial liabilities | 37,441 | |
| Provisions for other liabilities and charges | 22 | 315,990 |
| Other non-current liabilities | 218,089 | |
| Total non-current liabilities | 571,520 | |
| Current liabilities | ||
| Trade creditors | 2,121,435 | |
| Other current financial liabilities | 19,206 | |
| Other creditors | 666,821 | |
| Other current liabilities | 2,296,831 | |
| Total current liabilities | 5,104,293 | |
| Total assets and liabilities derecognized | (1,384,734) | |
| Compensation received | 14,000,000 | |
| Gain/(Loss) resulting from the disposal (note 37) | 12,615,266 |
Following the announcement made, on 14 December 2012, between Sonaecom, SGPS, S.A., Kento Holding Limited and Jadeium BV (currently named ommend to the Boards of Zon Multimédia January 2013, Sonaecom, SGPS, S.A. carried out a capital increase in kind, transferring 81.807% of its financial participation in Optimus SGPS, S.A. to ZOPT,SGPS, S.A. (vehicle used for this purpose), conditional upon completion of the merger.
Thus, following the above mentioned agreement, on 27 August 2013, and after fulfilling all the requirements required to the operation, the merger was closed. Sonaecom considers this to be the date on which Zopt took control of Zon Optimus (now NOS SGPS, SA (hereinafter 'NOS'), following the amendment of its name in June 2014), having 50.01% of its share capital. Accordingly, in the same day, it was registered the capital increase in kind held a 50% stake in Zopt, as well as shareholder loans to be received from Zopt amounting to Euro 230 million (Note 8), which would later be converted on supplementary capital and reduced to Euro 115 million.
Additionally, the remaining stake of 18.193% in Optimus SGPS was converted into a minority stake of 7.28% in NOS (Note 9).
not to acquire any shares of NOS, with the exception of the shares acquired by Sonaecom as a result of the operation.
ger, and for a period of three months, the Group Kento / Jadeium may exercise a call option over half of the shares of NOS that Sonaecom holds at the date of the exercise of call option, at a price equal to the weighted average price of the previous month.
After the share capital increase of Zopt and the closing of the merger between Optimus SGPS and Zon, Sonaecom derecognized in 2013 in consolidated accounts, the assets and liabilities fully consolidated of Optimus SGPS and its subsidiaries amounting to Euro 992 million. Sonaecom has also recognized an investment in Zopt amounting to Euro 598 million1 , loans to be received from Zopt amounting Euro 230 million (note 8) and an investment registered at fair value through NOS shares (the conversion of 20,921,650 Optimus SGPS shares, representing 18.193% of the share capital, to 37,489,324 NOS shares, representing 7.28% of the share capital), at the market price of 27 August 2013 (date of the closing of the merger), amounting to Euro 156 million (note 9).
Following the merger, was performed on Zopt a preliminary assessment of the fair value of assets acquired and assumed liabilities through this operation. In accordance with IFRS 3 - Business Combinations, a preliminary evaluation of the fair value of the acquired assets and liabilities assumed in this transaction was subject to changes over a period of one year from the date of control, and this ended at 26 August 2014.
1 The Zopt participation of 598 million euros (598 = ((2.850 X 50,01% )-230)X 50%) results from the valuation of NOS, amounting to 2,850 million euros. This corresponds to the sum of the valuation of the capital increase in Zopt made by Zon and Optimus in 1,500 million euros and 1,000 million euros, respectivetly (the valuation was made by entities involved in the capital increase and the merger project) and the minimum synergies estimated, disclosed in the merger project in the amount of 350 million euros, deducted from loans totaling 230 million euros (level 3 of inputs in the hierarchy of fair value). It was decided t NOS (the argument for not using the Zon share price at the date of the close of the merger, as abovementioned, is proven by the positive evolution of NOS share price since the date of the merger until 31 December 2013 (2,782 million euros versus 2,141, price at 27 August 2013, merger date)). For this reason, the market capitalization of Zon was not considered as a reference for valuing the Zopt investment. The valuation of Zon and Optimus was based on internally and projections, regarding the main economic indicators, including operating results and investment. For this purpose, was used a weighted average cost of capital of 9.5% and growth rate of 3%.
The detail of the net assets of the ZON Group at 26 August 2013 and the goodwill recorded under this transaction, updated at 26 August 2014, is as follows:
| (Amounts expressed in thousand Euro) | Book Values | Adjustments to fair value initially reported |
Changes of the adjustments to fair value |
Fair value |
|---|---|---|---|---|
| Acquired assets | ||||
| Tangible assets | 598,675 | 57,301 | - | 655,976 |
| Intangible assets | 137,644 | 170,575 | (33,202) | 275,017 |
| Investments in group companies | 33,646 | 284,807 | (41,259) | 277,194 |
| Deferred tax assets | 55,972 | 10,381 | 10,009 | 76,362 |
| Inventories | 18,034 | - | - | 18,034 |
| Accounts receivable and other assets | 169,888 | 1,861 | - | 171,749 |
| Cash and cash equivalents | 157,914 | - | - | 157,914 |
| 1,171,773 | 524,925 | (64,452) | 1,632,246 | |
| Acquired liabilities | ||||
| Borrowings | 817,435 | 7,634 | - | 825,069 |
| Provisions | 25,948 | 7,798 | 42,872 | 76,618 |
| Deferred tax liabilities | 7,450 | 68,591 | (9,994) | 66,047 |
| Share plan | 3,694 | - | - | 3,694 |
| Accounts payable and other liabilities | 296,169 | 2,062 | - | 298,231 |
| Minorities | 9,662 | - | - | 9,662 |
| 1,160,358 | 86,085 | 32,878 | 1,279,321 | |
| Net assets and liabilities | 11,415 | 438,840 | (97,330) | 352,925 |
| Goodwill | 1,147,075 | |||
| Acquisition price | 1,500,000 |
The fair value of net assets acquired was determined through various valuation methodologies for each type of asset or liability based on the best information available. The main fair value adjustments made in this process were : (i) valuation of Cines TV and TV Series channels (EUR +66.1 million), which will be amortised straight-line over a period of 10 years, (ii) portfolio customers (EUR +71.3 million), which will be amortised straight-line over the estimated average period of customer retention that is 6 years, (iii) financial investments (EUR +262.1 million) including EUR +224.2 million n, valuation of client portfolios in the amount of EUR +17.1 million , among others, and their respective associated deferred taxes , (iv) increase of EUR +57.3 million in the book value of basic equipment , (v) changes in the fair value of borrowings in the amount of EUR -7.6 million , and (vi) contingent liabilities relating to present obligations amounting to EUR -59.6 million.
The detail of Optimus Group's net assets and Goodwill at 26 August 2013 identified under this transaction, updated at 26 August 2014, are as follows:
| (Amounts expressed in thousand Euro) | Book Values | Adjustments to fair value initially reported |
Changes of the adjustments to fair value |
Fair value |
|---|---|---|---|---|
| Acquired assets | ||||
| Tangible assets | 569,441 | (62,616) | - | 506,825 |
| Intangible assets | 353,331 | 45,480 | - | 398,811 |
| Deferred tax assets | 100,976 | 27,626 | (2,368) | 126,234 |
| Inventories | 19,125 | (1,384) | - | 17,741 |
| Accounts receivable and other assets | 224,165 | - | - | 224,165 |
| Cash and cash equivalents | 17,987 | - | - | 17,987 |
| 1,285,025 | 9,106 | (2,368) | 1,291,763 | |
| Acquired liabilities | ||||
| Borrowings | 452,362 | - | - | 452,362 |
| Provisions | 35,224 | 30,091 | 47,124 | 112,439 |
| Deferred tax liabilities | 1,142 | 10,997 | - | 12,139 |
| Share plan | 6,469 | 3,144 | - | 9,613 |
| Accounts payable and other liabilities | 287,368 | 15,326 | - | 302,694 |
| 782,565 | 59,558 | 47,124 | 889,247 | |
| Net assets and liabilities | 502,460 | (50,452) | (49,492) | 402,516 |
| Goodwill | 597,484 | |||
| Acquisition price | 1,000,000 |
The fair value of net assets acquired was determined through several valuation methodologies for each type of asset or liability, based on the best information available. The main fair value adjustments made in this process were: (i) customer portfolio (+23.4 million euros), which will be amortised linearly based on the estimated average time of customer retention; (ii) telecom licenses (+12.7 million euros), which will be amortised over their the estimated useful life; (iii) infrastructure reconstruction and replacement equipment costs and other adjustments on basic equipment in the amount of -22.7 million euros; (iv) adjustment of -27.7 million euros to carrying amount of the assets falling within by the commitments made to the Competition Authority, under the merger operation, in particular, the agreement on an option to acquire the fiber network of Optimus; (v) contingent liabilities related to present obligations in the amount of -80.9 million euros, as permitted by IFRS 3, of which a percentage, corresponding to tax contingencies, was recorded as a reduction to deferred tax assets by tax losses, and (vi) contractual obligations in the amount of -15.3 million euros related to long-term contracts whose prices are different from market prices.
The methodologies used in the main fair value adjustments were Discounted cash flows (Level 3) with the exception to Rooftops and Towers that was used the Rebuilding costs (Level 2), to Basic Equipment that was used the Replacement costs (Level 2) and to Contractual obligations that was used the Comparision with today fees (Level 2).
ents such as: (i) the customers used in the valuation of the customer portfolio; (ii) the average time of use of existing 2G/3G and LTE technologies and revenue growth as a result of the emergence of other new technologies, used in the valuation of the telecom licenses, among others. Although these estimates were based on the best information available at the date of preparation of the consolidated financial statements, current and future results may differ from these estimates.
Several scenarios have been considered in the valuations. The sensitivity analyzes performed have not led to significant changes in the allocation of the fair value of assets and liabilities.
For the remaining assets and liabilities were not identified significant differences between the fair value and their book value.
As usual on mergers and acquisitions, also in this operation, there was a part of the acquisition price which was not possible to allocate to the fair value of some identified assets and liabilities, that of different elements, which cannot be individually quantified and isolated in a viable way and include, for example, synergies, qualified workforce and technical skills.
Thus, as a result of the derecognition of the investment in Optimus SGPS and its subsidiaries, the recognition of the investments in Zopt and NOS, and the loans to be received from Zopt in 2013, it was registered a capital loss of 9 million euros, as follows:
| (Amounts expressed in Euro) | 27 August 2013 |
|---|---|
| Assets and liabilities derecognized | (992,397,240) |
| Compensation received | 983,447,575 |
| Gain/(Loss) resulting from the disposal (note 37) | (8,949,665) |
The compensation received can be detailed as follows:
| (Amounts expressed in Euro) | 27 August 2013 |
|---|---|
| Participation in Zopt (note 8) | 597,641,944 |
| Loans Zopt (note 8) | 230,000,000 |
| NOS shares (note 9) | 155,805,631 |
| 983,447,575 |
The impacts in balance sheet of the output of the telecommunications sector companies in August 2013 resulted of this operation, are detailed as follows:
| (Amounts expressed in Euro) | Notes | 27 August 2013 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Tangible assets | 5 | (562,475,126) |
| Intangible assets | 6 | (353,993,403) |
| Goodwill | 7 | (485,150,340) |
| Other non-current assets | 312,080,798 | |
| Deferred tax assets | 11 | (98,625,767) |
| Total non-current assets | (1,188,163,838) | |
| Current assets | ||
| Inventories | (19,124,520) | |
| Trade debtors | (127,955,743) | |
| Other current assets | (82,942,364) | |
| Cash and cash equivalents | (17,986,673) | |
| Total current assets | (248,009,300) | |
| Shareholders' funds and liabilities | ||
| Medium term incentive plans reserves | 6,468,582 | |
| Others | 5,464 | |
| 6,474,046 | ||
| Liabilities | ||
| Non-current liabilities | ||
| (813,080) | ||
| Other non-current financial liabilities | 17,879,658 | |
| Provisions for other liabilities and charges | 22 | 35,247,971 |
| Deferred tax liabilities | 259,753 | |
| Other non-current liabilities | 31,672,299 | |
| Total non-current liabilities | 84,246,601 | |
| Current liabilities Short-term loans and other loans |
||
| Trade creditors | 115,535,594 119,124,642 |
|
| Other current financial liabilities | 2,660,326 | |
| Other creditors | 15,254,142 | |
| Other current liabilities | 100,480,547 | |
| Total current liabilities | 353,055,251 | |
| Total assets and liabilities derecognized | (992,397,240) |
At 31 December 2014 and 2013, the breakdown of financial instruments was as follows:
| 2014 | |||||||
|---|---|---|---|---|---|---|---|
| Financial assets | |||||||
| at fair value | |||||||
| Loans and | Investments | through profit or | Other financial | Others not | |||
| Non-current assets | receivables | available for sale | loss | assets | Subtotal | covered by IFRS 7 | Total |
| Financial assets at fair value through profit or | |||||||
| loss (note 9) | - | - | 1,424,996 | - | 1,424,996 | - | 1,424,996 |
| Investments available for sale (note 10) | - | 113,054 | - | - | 113,054 | - | 113,054 |
| Other non-current assets | 507,518 | - | - | - | 507,518 | 4,993,935 | 5,501,453 |
| 507,518 | 113,054 | 1,424,996 | - | 2,045,568 | 4,993,935 | 7,039,503 | |
| Current assets | |||||||
| Financial assets at fair value through profit or | |||||||
| loss (note 9) | - | - | 58,540,576 | - | 58,540,576 | - | 58,540,576 |
| Trade debtors (note 13) | 40,000,771 | - | - | - | 40,000,771 | - | 40,000,771 |
| Other current debtors (note 14) | 2,553,869 | - | - | - | 2,553,869 | 7,262,261 | 9,816,130 |
| Other current assets (note 15) | - | - | - | 9,830,558 | 9,830,558 | 2,081,667 | 11,912,225 |
| Cash and cash equivalents (note 16) | 182,010,595 | - | - | - | 182,010,595 | - | 182,010,595 |
| 224,565,235 | - | 58,540,576 | 9,830,558 | 292,936,369 | 9,343,928 | 302,280,297 | |
| 2013 | |||||||
| Financial assets | |||||||
| at fair value | |||||||
| Loans and | Investments | through profit or | Other financial | Others not | |||
| receivables | available for sale | loss | assets | Subtotal | covered by IFRS 7 | Total | |
| Non-current assets | |||||||
| Investments available for sale (note 10) | - | 115,448 | - | - | 115,448 | - | 115,448 |
| Other non-current assets | 922,434 | - | - | - | 922,434 | - | 922,434 |
| 922,434 | 115,448 | - | - | 1,037,882 | - | 1,037,882 | |
| Current assets | |||||||
| Financial assets at fair value through profit or loss (note 9) |
- | - | 202,442,350 | - | 202,442,350 | - | 202,442,350 |
| Trade debtors (note 13) | 36,416,353 | - | - | - | 36,416,353 | - | 36,416,353 |
| Other current debtors (note 14) | 17,177,732 | - | - | - | 17,177,732 | 5,863,034 | 23,040,766 |
| Other current assets (note 15) | - | - | - | 7,043,665 | 7,043,665 | 2,254,741 | 9,298,406 |
| Cash and cash equivalents (note 16) | 188,014,923 | - | - | - | 188,014,923 | - | 188,014,923 |
| 241,609,008 | - | 202,442,350 | 7,043,665 | 451,095,023 | 8,117,775 | 459,212,798 |
| 2014 | |||||
|---|---|---|---|---|---|
| Liabilities | |||||
| recorded at | Other financial | Others not covered | |||
| amortised cost | liabilities | Subtotal | by IFRS 7 | Total | |
| Non-current liabilities | |||||
| Medium and long-term loans net of short-term portion | |||||
| (note 20) | 9,058,985 | - | 9,058,985 | - | 9,058,985 |
| Other non-current financial liabilities (note 21) | - | 480,274 | 480,274 | - | 480,274 |
| Other non-current liabilities (note 23) | - | 203,812 | 203,812 | 871,397 | 1,075,209 |
| 9,058,985 | 684,086 | 9,743,071 | 871,397 | 10,614,468 | |
| Current liabilities | |||||
| Short-term loans and other loans | |||||
| (note 20) | 1,980,451 | - | 1,980,451 | - | 1,980,451 |
| Trade creditors (note 24) | - | 21,565,689 | 21,565,689 | - | 21,565,689 |
| Other current financial liabilities (note 25) Other creditors (note 26) |
- | 285,904 | 285,904 | - | 285,904 |
| Other current liabilities (note 27) | - | 1,238,426 | 1,238,426 | 5,408,938 | 6,647,364 |
| - 1,980,451 |
18,877,053 41,967,072 |
18,877,053 43,947,523 |
9,409,709 14,818,647 |
28,286,762 58,766,170 |
|
| 2013 | |||||
| Liabilities | |||||
| recorded at | Other financial | Others not covered | |||
| amortised cost | liabilities | Subtotal | by IFRS 7 | Total | |
| Non-current liabilities | |||||
| Medium and long-term loans net of short-term portion | |||||
| (note 20) | 24,810,079 | - | 24,810,079 | - | 24,810,079 |
| Other non-current financial liabilities (note 21) | - | 67,937 | 67,937 | - | 67,937 |
| Other non-current liabilities (note 23) | - 24,810,079 |
969,434 1,037,371 |
969,434 25,847,450 |
307,870 307,870 |
1,277,304 26,155,320 |
| Current liabilities | |||||
| Short-term loans and other loans | |||||
| (note 20) | 998,996 | - | 998,996 | - | 998,996 |
| Trade creditors (note 24) | - | 21,768,279 | 21,768,279 | - | 21,768,279 |
| Other current financial liabilities (note 25) | - | 70,728 | 70,728 | - | 70,728 |
| Other creditors (note 26) | - | 6,153,540 | 6,153,540 | 4,285,787 | 10,439,327 |
| Other current liabilities (note 27) | - | 19,223,723 | 19,223,723 | 8,483,737 | 27,707,460 |
| 998,996 | 47,216,270 | 48,215,266 | 12,769,524 | 60,984,790 |
Considering the nature of the balances, the amounts to be paid and related to the share based plans were considered outside the scope of IFRS 7. On the other hand, the deferred costs/profits recorded in the captions her non-current assets - -financial instruments.
The Board of Directors believes that, the fair value of the breakdown of financial instruments recorded at amortised cost or registered at the present value of the payments does not differ significantly from their book value. This decision is based in the contractual terms of each financial instrument.
The movement in tangible assets and in the corresponding accumulated depreciation and impairment losses in the years ended at 31 December 2014 and 2013 was as follows:
| 2014 | |||||||
|---|---|---|---|---|---|---|---|
| Land, Buildings and other constructions |
Plant and machinery |
Vehicles | Fixtures and fittings |
Other tangible assets |
Work in progress |
Total | |
| Gross assets Balance at 31 December 2013 |
7,444,000 | 11,448,857 | 36,094 | 7,013,597 | 251,073 | 1,302,572 | 27,496,193 |
| New companies (Note 3. a)) | 928,630 | 631,866 | 39,669 | 2,467,953 | 127,207 | - | 4,195,325 |
| Additions | 58,445 | 97,795 | - | 191,433 | - | 458,631 | 806,304 |
| Disposals Transfers and write-offs Discontinued operations (Note 3.d)) |
(66) 805,493 (5,708,178) |
- (212,180) (1,710,071) |
(3,791) 144 |
(23,281) 492,885 (1,766,740) |
- 46,759 (769) |
- (1,643,623) (87,732) |
(27,138) (510,522) (9,273,490) |
| Balance at 31 December 2014 Accumulated depreciation and impairment losses |
3,528,324 | 10,256,267 | - 72,116 |
8,375,847 | 424,270 | 29,848 | 22,686,672 |
| Balance at 31 December 2013 | 4,614,466 | 11,042,578 | 12,625 | 6,061,365 | 235,061 | - | 21,966,095 |
| New companies (Note 3. a)) | 815,248 | 600,391 | 9,654 | 2,404,872 | 68,800 | - | 3,898,965 |
| Depreciation for the year | 590,913 | 148,536 | 9,285 | 520,646 | 24,265 | - | 1,293,645 |
| Disposals | (8) | - | (421) | (76,505) | - | - | (76,934) |
| Transfers and write-offs | (12,403) | (321,577) | 16 | 85,115 | (6,689) | - | (255,538) |
| Discontinued operations (Note 3.d)) | (3,891,918) | (1,500,003) | - | (1,443,300) | (769) | - | (6,835,990) |
| Balance at 31 December 2014 | 2,116,298 | 9,969,925 | 31,159 | 7,552,193 | 320,668 | - | 19,990,243 |
| Net value | 1,412,026 | 286,342 | 40,957 | 823,654 | 103,602 | 29,848 | 2,696,429 |
| 2013 | |||||||
|---|---|---|---|---|---|---|---|
| Land, Buildings and other constructions |
Plant and machinery |
Vehicles | Fixtures and fittings |
Other tangible assets |
Work in progress |
Total | |
| Gross assets | |||||||
| Balance at 31 December 2012 (restated) | 301,133,284 | 1,072,287,146 | 171,736 | 213,226,929 | 6,715,058 | 20,665,640 | 1,614,199,793 |
| Additions | 18,694 | 3,081,762 | 34,691 | 11,151,440 | 1,187 | 27,990,128 | 42,277,902 |
| Disposals | (547,779) | (2,821,787) | (15,282) | (382,671) | (793) | (125,388) | (3,893,700) |
| Transfers and write-offs | 5,239,931 | 32,156,750 | (69,323) | (809,232) | 99,472 | (36,488,232) | 129,366 |
| Discontinued operations (note 3.e) | (298,400,130) | (1,093,255,014) | (85,728) | (216,172,869) | (6,563,851) | (10,739,576) | (1,625,217,168) |
| Balance at 31 December 2013 | 7,444,000 | 11,448,857 | 36,094 | 7,013,597 | 251,073 | 1,302,572 | 27,496,193 |
| Accumulated depreciation and impairment losses | |||||||
| Balance at 31 December 2012 (restated) | 168,923,346 | 666,298,617 | 151,192 | 191,742,065 | 6,127,629 | - | 1,033,242,849 |
| Depreciation for the year | 5,554,901 | 37,667,093 | 18,195 | 12,477,309 | 178,349 | - | 55,895,847 |
| Disposals | (288,854) | (2,091,168) | (6,232) | (276,941) | (793) | - | (2,663,988) |
| Transfers and write-offs | (36,230) | (1,399,715) | (67,149) | (275,117) | 11,640 | - | (1,766,571) |
| Discontinued operations (note 3.e) | (169,538,697) | (689,432,249) | (83,381) | (197,605,951) | (6,081,764) | - | (1,062,742,042) |
| Balance at 31 December 2013 | 4,614,466 | 11,042,578 | 12,625 | 6,061,365 | 235,061 | - | 21,966,095 |
| Net value | 2,829,534 | 406,279 | 23,469 | 952,232 | 16,012 | 1,302,572 | 5,530,098 |
The additions that occurred during the year ended at 31 December 2013 included: assets associated with the UMTS operation cket Radio -to-the- between Optimus SGPS and Zon and the consequent derecognition of the assets of the telecommunications segment (note 3.e), during the year ended at 31 December 2013, the assets above mentioned were no longer part of the initial and final balance, at 31 December 2014 (note 3.e).
| 2014 | 2013 | |||||
|---|---|---|---|---|---|---|
| (restated) | ||||||
| Discontinued | Discontinued | |||||
| operations | operations | |||||
| Continued operations | (note 37) | Total Continued operations | (note 37) | Total | ||
| Tangible assets | 826,046 | 467,599 | 1,293,645 | 685,620 | 55,210,227 | 55,895,847 |
| Intangible assets (note 6) | 6,316,341 | 48,586 | 6,364,927 | 4,310,425 | 38,813,335 | 43,123,760 |
| Goodwill (note 7) | - | - | - | 970,000 | - | 970,000 |
| 7,142,387 | 516,185 | 7,658,572 | 5,966,045 | 94,023,562 | 99,989,607 |
At 31 December 2013, additions include about Euro 5.4 million of capitalizations of personnel costs related to own work.
The acquisi 7,373 and Euro 920,831 as of 31 December 2014 and 2013, and their net book value as of those dates amounted to Euro 794,358 and Euro 100,728, respectively. During the year ended at 31 December 2013, the finance lease contracts of NOS - Comunicações SA and Be Artis, were derecognised (note 3.e), therefore, the finance lease contracts were no longer part of the initial and final balance on 31 December 2014.
ans obtained, except for the assets acquired under financial lease contracts.
at 31 December 2014 and 2013 were made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Information systems / IT equipment | 23,998 | 455,656 |
| Other projects in progress | 5,850 | 846,916 |
| 29,848 | 1,302,572 |
During the year ended at 31 December 2014 and 2013, there are no commitments to third parties relating to investments to be made.
In the years ended at 31 December 2014 and 2013, the movement occurred in Intangible assets and in the corresponding accumulated amortisation and impairment losses, was as follows:
| 2014 | ||||
|---|---|---|---|---|
| Brands and patents and other rights |
Software | Intangible assets in progress |
Total | |
| Gross assets | ||||
| Balance at 31 December 2013 | 10,348,140 | 30,539,349 | 4,561,408 | 45,448,897 |
| New companies (note 3. a) | - | 20,680,062 | - | 20,680,062 |
| Additions | 10,020 | 1,054,534 | 4,988,352 | 6,052,906 |
| Transfers and write-offs | 667,872 U |
4,930,876 | (4,130,894) | 1,467,854 |
| Discontinued operations (note 3.d) | (25,330) n |
(1,638,360) | - | (1,663,690) |
| Balance at 31 December 2014 | 11,000,702 | 55,566,461 | 5,418,866 | 71,986,029 |
| Accumulated amortisation and impairment losses | ||||
| Balance at 31 December 2013 | 7,141,359 | 21,660,278 | - | 28,801,637 |
| New companies (note 3. a) | - | 12,264,460 | - | 12,264,460 |
| Amortisation for the year (note 5) | 2,705,465 | 3,659,462 | - | 6,364,927 |
| Transfers and write-offs | 522,106 U |
(54,993) | - | 467,113 |
| Discontinued operations (note 3.d) | (24,812) n |
(1,469,232) | - | (1,494,044) |
| Balance at 31 December 2014 | 10,344,118 | 36,059,975 | - | 46,404,093 |
| Net value | 656,584 | 19,506,486 | 5,418,866 | 25,581,936 |
| 2013 | ||||
|---|---|---|---|---|
| Brands and patents and |
Intangible assets | |||
| other rights | Software | in progress | Total | |
| Gross assets | ||||
| Balance at 31 December 2012 (restated) | 471,734,531 | 324,743,860 | 22,694,448 | 819,172,839 |
| Additions | 15,347,168 | 945,238 | 15,429,479 | 31,721,885 |
| Disposals | (1,000,000) | (2,868) | - | (1,002,868) |
| Transfers and write-offs | 3,292,284 | 9,762,754 | (12,218,518) | 836,520 |
| Discontinued operations (note 3.e) | (479,025,843) | (304,909,635) | (21,344,001) | (805,279,479) |
| Balance at 31 December 2013 | 10,348,140 | 30,539,349 | 4,561,408 | 45,448,897 |
| Accumulated amortisation and impairment losses | ||||
| Balance at 31 December 2012 (restated) | 184,502,817 | 255,141,914 | - | 439,644,731 |
| Amortisation for the year | 29,196,162 | 13,927,598 | - | 43,123,760 |
| Disposals | (1,000,000) | (641) | - | (1,000,641) |
| Transfers and write-offs | (67,651) | (1,612,486) | - | (1,680,137) |
| Discontinued operations (note 3.e) | (205,489,969) | (245,796,107) | - | (451,286,076) |
| Balance at 31 December 2013 | 7,141,359 | 21,660,278 | - | 28,801,637 |
| Net value | 3,206,781 | 8,879,071 | 4,561,408 | 16,647,260 |
Under the agreed terms resulting from the grant of the UMTS License, NOS Comunicações, committed, in previous years, to contribute to the 274 million which will have to be realised until the end of 2015. In accordance with the Agreement established on 5 June 2007 with the Ministry of Public Works, Transportation and Communications (MOPTC), part of these commitments, up to Euro 159 million, would be realised through own projects eligible as contributi and technology, if not directly related with the accomplishment of other obligations inherent to the attribution of the UMTS License, and activities of research, development and promotion of services, contents and applications). These own projects must be recognised by the MOPTC and by entities created specifically for this purpose. The total amount was already incurred and validated by the above referred entities, so, at this date, there are no additional responsibilities related to these commitments. These charges were recorded in the financial statements at the moment the projects were carried out and the estimated costs became known.
The remaining commitments, up to Euro 116 million, has been realised, as agreed between NOS Comunicações and MOPTC, through contributions , assigned to the widespread use of broadband established by the three mobile operators with businesses in Portugal. All nonderecognized from the consolidated financial statements, following the merger between Optimus SGPS and Zon and, subsequently, the derecognition of the assets and liabilities of the telecommunications segment (note 3.e).
At 31 December 2013, the amortisation of the year of Euro 43,123,760 include an amount of Euro 38,813,335related to the amortisation of assets of discontinued operations (notes 3.d, 3.e and 37) and an amount of Euro 4,310,425 related to continued operations.
Intangible and tangible assets include interest and other financial expenses incurred, directly related to the construction of certain items of work in progress. The amounts capitalised in the years ended at 31 December 2013 were Euro 462,097. An interest capitalisation rate of 4.5%, which corresponded to the average interest rate supported by the Group. In the year ended at 31 December 2013, these assets were derecognized, following the merger between Optimus SGPS and Zon and, subsequently, the derecognition of the assets and liabilities of the telecommunications segment (note 3.e).
At 31 December 2014, the additions related with intangible assets include about Euro 4.9 million of capitalizations of personnel costs related to own work (about Euro 7.7 million at 31 December 2013), mainly related to IT software and RAID NetClarus and Bitácora products development projects.
The assessment of impairment for the main tangible and intangible assets, in the various segments, is carried out as describe to the extent that such assets are closely related to the overall activity of the segment and consequently cannot be analysed separately.
For the years ended at 31 December 2014 and 2013, the movements occurred in Goodwill were as follows:
| 2014 | 2013 | |
|---|---|---|
| Opening balance | 28,434,416 | 517,985,506 |
| Goodwill adjustment of Connectiv | - | (3,066,150) |
| Discontinued units (note 3.e) | - | (485,150,340) |
| Other movements of the year | 284,650 | (364,600) |
| Impairment losses (note 5) | - | (970,000) |
| Closing balance | 28,719,066 | 28,434,416 |
ly, the effects of the exchange rate update of the Goodwill.
merger between Optimus SGPS and Zon and, subsequently, the derecognition of the assets and liabilities of the telecommunications segment (note 3.e).
Thus, Goodwill at 31 December 2014 and 2013 was made up as follows:
| Information Systems | Multimedia | |
|---|---|---|
| 2014 | ||
| Goodwill | 22,689,066 | 6,030,000 |
| Information Systems | Multimedia | |
| 2013 | ||
| Goodwill | 22,404,416 | 6,030,000 |
At 30 April 2012, the group acquired the entire share capital of Connectiv Solutions. Following that, the company started from 1 May 2012 to consolidate the financial statements using the full consolidation method.
Connectiv main activity is the rendering of consulting services in the area of information systems.
The acquisition price was allocated as following:
| (Amounts expressed in Euro) | Values before acquisition |
Adjustments to fair value |
Fair value |
|---|---|---|---|
| Acquired assets | |||
| Tangible assets | 576,455 | - | 576,455 |
| Intangible assets | 49,303 | 3,190,109 | 3,239,412 |
| Other current debtors | 1,155,221 | - | 1,155,221 |
| Other assets | 116,744 | - | 116,744 |
| Cash and cash equivalents | 315,304 | - | 315,304 |
| 2,213,027 | 3,190,109 | 5,403,136 | |
| Acquired liabilities | |||
| Other creditors | 184,608 | - | 184,608 |
| Other liabilities | 1,144,459 | - | 1,144,459 |
| 1,329,067 | - | 1,329,067 | |
| Net assets and liabilities | 883,960 | 3,190,109 | 4,074,069 |
| Acquisition price | 9,241,844 | ||
| Goodwill initialy estimated | 5,167,775 | ||
| Adjustments to initial price | 412,703 | ||
| Know-how allocation | (3,478,853) | ||
| Final Goodwill | 2,101,625 |
As usual on mergers and acquisitions, also in the acquisition of Connectiv, there was a part of the acquisition price which was not possible to be allocated to the fair value of some identified assets and liabilities, that was considered as Goodwill. This Goodwill is related to a number of different elements, which cannot be individually quantified and isolated in a viable way and include, for example, synergies, qualified workforce, technical skills and market power. The total amount of this Goodwill will be considered as fiscal cost in Connectiv accounts, for a period of 15 years, according with the United States of America law.
The acquisition price includes a deferred amount of USD 2 million (1 million paid in 2013 and 1 million paid in 2014) and a contingent amount to be paid annually, during 4 years, depending on the performance of the company in terms of revenue, which was estimated in about USD 2 million (USD 658 thousand have already been paid in the year ended at 31 December 2013). For the year ended at 31 December 2013, the contingent amount payable was reduced by USD 547,579 (Euro 412,703) and an amount of USD 4,547,579 (Euro 3,478,653), which generated an adjustment to initial Goodwill, in accordance with IFRS 3 Business Combinations, as this adjustment occur in the period permited by IFRS 3 to goodwill allocation, which was fully amortized by the end of the year ended at 31 December 2014.
At 1 January 2013, Connectiv was incorporated, by merger, in WeDo Americas.
The evaluation of the existence of impairment losses in Goodwill is made by taking into account the cash-generating units, based on the most recent re is evidence of impairment and prepared according to cash flow projections for periods of five years. In the area of information systems, the assumptions used are essentially based on the various businesses of the Group and the growth of the several geographic areas where the Group operates. The average growth rate used to the turnover of 5 years was 12.6%. This increase essentially due to WeDo group by investment in new industries, and the recent focus on the security market that is growing strongly. For the Media sector, the average growth rate used was 2.0%. The discount rates used were based on the estimated weighted average cost of capital, which depends on the business segment of each subsidiary, as indicated in the table below. In perpetuity, the Group considered a growth rate of 2% in the area of information systems and 0% in Multimedia area. In situations where the measurement of the existence, or not, of impairment is made based on the net selling price, values of similar transactions and other proposals made are used. Regarding the area of telecommunications (Zopt), the assessment of whether or not the impairment is determinate taking into account with several information as business plans approved by the Board of Directors, which implied average growth rate of operating margin amounts to 2.7%, and the average ratings of external reviewers (researches).
| Information Systems | Multimedia | Telecommunications | |
|---|---|---|---|
| Assumptions | |||
| Basis of recoverable amount | Value in use | Value in use | Value in use |
| Discount rate | 10.5% | 9.0% | 8.2% |
| Growth rate in perpetuity | 2.0% | 0.0% | 2.0% |
For the sector of Information Systems, in digital security area (Cibersecurity), a growth rate used was 3%.
During the year ended at 31 December 2014, was made a discount rate revaluation used, this rate was changed for 10.5% (13% in 2013) in the area of information systems, for 9% (12% in 2013) in the area of multimedia and for 8.2% (9% in 2013) in the area of telecommunication. In information systems area was also revaluated the growth rate used, this rate was changed for a more conservative rate of 2% (3% in 2013), taking into account the maturity of the company in the sector.
During the year ended at 31 December 2013, due to the worsening of the financial crisis, which caused a significant deteriora macroeconomic scenario in the last years, the advertising market suffered a sharp decline . This situation along with, the bearish forecasts for the next years, aggravated the outlook for future developments. Sales of newspapers and related products have been declining, affecting the projections of cash flows of the multimedia segment, lending the record of a loss in the amount of Euro 970 thousand in the year ended at 31 December 2013, respectively, under the caption 'Depreciation and amortisation' of the Income Statement, in accordance with the policy described in note 1.w.
The analyses of the impairment indices and the review of the impairment projections and tests have not lead to clearance losses, during the year ended on 31 December 2014. For the sensitivity analyses made, required in the IAS 36 - Impairment of Assets, have not lead to material changes of the recoveries, so not result material additional impairments.
The associated companies and the companies jointly controlled, their head offices, percentage of ownership and value in profit and loss statement on 31 December 2014 and 2013, are as follows:
| Percentage of ownership | Value in profit and loss statement | ||||||
|---|---|---|---|---|---|---|---|
| 31 December 2014 | 31 December 2013 | 31 December 2014 | 31 December 2013 | ||||
| Head Office | Direct | Total | Direct | Total | |||
| ZOPT (a) | Oporto | 50% | 50% | 50% | 50% | 15,809,426 | (523,500) |
| Vila Nova de Gaia | 50% | 50% | 50% | 50% | 31,069 | 44,967 | |
| Sociedade Independente de Radiodifusão Sonora, S.A. | Oporto | 45% | 45% | 45% | 45% | (32,738) | (44,245) |
| Infosystems (a) (b) | Luanda | Sold | Sold | - | 32,413 | ||
| S21Sec Ciber seguridad SA de CV ('Ciber seguridad') (c) | Mexico City | 50% | 30% | - | - | (64,936) | - |
| Intelligent Big Data, S.L. ('Big Data') (d) | Gipuzcoa | 50% | 30% | - | - | (19) | - |
| Total (note 32) | 15,742,802 | (490,365) |
(a) Includes the results of the subsidiaries,proportionally to capital held
(b) Company sold in November 2013
(c) Company directly owned by S21 Sec México
(d) Company directly owned by S21 Sec Gestion
The associated companies and companies jointly controlled have been consolidated by the equity method. In accordance with the IFRS 11, the classification of investments in joint ventures is determined based on the existence of an agreement that clearly demonstrate and regulate the joint control. Thus, in accordance with the requirements of this standard, at 31 December 2014 the group only held jointly controlled companies.
During the years ended at 31 December 2014 and 2013, the movement occurred in investments in associated companies and companies jointly controlled, were as follows:
| 31 December 2014 | 31 December 2013 | |||||
|---|---|---|---|---|---|---|
| Ownership value | Goodwill | Total investment | Ownership value |
Goodwill | Total investment | |
| Investments in associated companies and companies | ||||||
| jointly controlled | ||||||
| Balance at 1 January | 622,479,701 | 87,849,200 | 710,328,901 | 570,243 | 321,700 | 891,943 |
| Increases | 1,500 | - | 1,500 | 625,114,444 | 87,527,500 | 712,641,944 |
| Decreases | - | - | - | (34,251) | - | (34,251) |
| Equity method | ||||||
| Effect on gains and losses (note 32) | 15,742,802 | - | 15,742,802 | (490,365) | - | (490,365) |
| Effect on reserves | 2,687,127 | - | 2,687,127 | (2,536,500) | - | (2,536,500) |
| Dividends | (7,320,650) | - | (7,320,650) | (143,870) | - | (143,870) |
| 633,590,480 | 87,849,200 | 721,439,680 | 622,479,701 | 87,849,200 | 710,328,901 | |
| Registered in Impairment losses (note 22) | 168,071 | - | 168,071 | 105,384 | - | 105,384 |
| Total investment in associated companies and companies | ||||||
| jointly controlled | 633,758,551 | 87,849,200 | 721,607,751 | 622,585,085 | 87,849,200 | 710,434,285 |
The value increases for the year ended 31 December 2013 corresponds to the increase in Zopt, according to the following:
| 2013 | |
|---|---|
| Zopt | |
| Participation in Zopt (note 3.e) | 597,641,944 |
| Supplementary capital in Zopt (note 3.e) | 230,000,000 |
| Sold of supplementary capital of Zopt (note 3.e) | (115,000,000) |
| Total | 712,641,944 |
At 31 December 2014 and 2013, the Goodwill amount, additional to the amount existing on financial statements of Zopt, amounting to Euro 87,527,500 results from the difference between the value of the investment (Euro 712,641,944) and the ownership on Zopt value (Euro 625,114,444), once was not identified any additional assets and liabilities allocation for being already recorded at fair value on financial statements of Zopt on the date of the merger between Optimus, SGPS and ZON (note 3.e).
The effect on the application reserves of the equity method results from other changes in equity of the associated companies and the jointly controlled, particularly with regard to the translation reserves (Euro 7.6 million on 31 December 2014) and the operations of own shares (Euro -5.2 million on 31 December 2014).
| 31 December 2014 | 31 December 2013 | ||||||
|---|---|---|---|---|---|---|---|
| Ownership value | Goodwill | Total | investment Ownership value | Goodwill | Total investment |
||
| Investments in associated companies and companies | |||||||
| jointly controlled | |||||||
| Zopt | 633,292,491 | 87,527,500 | 720,819,991 | 622,079,444 | 87,527,500 | 709,606,944 | |
| Unipress | 466,060 | 321,700 | 787,760 | 505,641 | 321,700 | 827,341 | |
| SIRS | (138,122) | - | (138,122) | (105,384) | - | (105,384) | |
| Ciber seguridad | (30,543) | - | (30,543) | - | - | - | |
| Big Data | 594 | - | 594 | - | - | - | |
| Total | 633,590,480 | 87,849,200 | 721,439,680 | 622,479,701 | 87,849,200 | 710,328,901 |
| 2014 (Amounts expressed in thounsand Euro) |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Operational | ||||||||||
| Empresa | % holding | Asset | Liability | Equity | Revenue | results | Net result | |||
| ZOPT* | 50% | 4,550,765 | 2,004,499 | 2,546,266 | 1,383,930 | 128,153 | 62,845 | |||
| Unipress | 50% | 3,913 | 2,981 | 932 | 3,057 | 851 | 62 | |||
| SIRS | 45% | 309 | 616 | (309) | 907 | (31) | (73) | |||
| Ciber seguridad | 30% | 298 | 463 | (165) | 547 | (172) | (170) | |||
| Big Data | 30% | 1 | 1 | (0) | 0 | (3) | (3) |
* Consolidated accounts of Zopt Group, prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). The equity includes non-controlling interests, being that at 31 December 2014 the market capitalization of the NOS amounts to Euro 2,697 million.
The consolidated financial statements of Zopt, at 31 December 2014 and 2013 can be resumed as follows:
| (Amounts expressed in thousands of Euro) | December 2014 | December 2013 |
|---|---|---|
| Assets | ||
| Tangible assets | 1,198,203 | 1,153,257 |
| Intangible assets | 2,396,111 | 2,408,062 |
| Deferred tax assets | 155,884 | 173,392 |
| Other non-current assets | 316,168 | 299,279 |
| Non-current assets | 4,066,366 | 4,033,990 |
| Trade debtors | 331,521 | 276,630 |
| Cash and cash equivalents | 29,772 | 74,390 |
| Other current assets | 123,106 | 103,831 |
| Current assets | 484,399 | 454,851 |
| Total assets | 4,550,765 | 4,488,841 |
| Liabilities | ||
| 621,057 | 932,770 | |
| Provisions for other liabilities and charges | 180,688 | 179,113 |
| Other non-current liabilities | 95,397 | 99,453 |
| Non-current liabilities | 897,142 | 1,211,336 |
| Short-term loans and other loans | 505,749 | 215,791 |
| Trade creditors | 340,918 | 296,915 |
| Other current liabilities | 260,690 | 253,049 |
| Current liabilities | 1,107,357 | 765,755 |
| Total liabilities | 2,004,499 | 1,977,091 |
| 1,276,520 | 1,251,127 | |
| Non-controlling interests | 1,269,746 | 1,260,623 |
| 2,546,266 | 2,511,750 | |
| 4,550,765 | 4,488,841 |
| (Amounts expressed in thousands of Euro) | December 2014 | December 2013 (restated) |
|---|---|---|
| Total revenue | 1,383,930 | 476,848 |
| Costs and losses | ||
| Direct costs and External supplies and services | (594,556) | (204,528) |
| Depreciation and amortisation | (360,381) | (115,611) |
| Other operating costs | (300,839) | (132,491) |
| (1,255,776) | (452,630) | |
| Financial results | (51,966) | (18,965) |
| Income taxation | (13,343) | (6,406) |
| Consolidated net income/(loss) for the year | 62,845 | (1,153) |
| Consolidated net income/(loss) for the year attributed to non-controlling interests | 31,573 | (454) |
| Attributed to shareholders of parent company | 31,271 | (699) |
The value on the income statement related to Zopt results from net income/(loss) of NOS, the net income/(loss) of Zopt and the impact on results of the process of allocating the fair value to the assets and liabilities acquired by Zopt.
NOS SA, NOS Açores and NOS Madeira brought actions for judicial review of ICP-Fee (for 2009, 2010, 2011, 2012 and 2013) for carrying on the business of Electronic Communications Services Networks Supplier in the amounts, respectively, of (i) 1,861 thousand euros, 3,808 thousand euros, 6,049 thousand euros, 6,283 thousand euros and 7,270 thousand euros; (ii) 29 thousand euros, 60 thousand euros, 95 thousand euros, 95 thousand euros and 104 thousand euros; (iii) 40 thousand euros, 83 thousand euros, 130 thousand euros, 132 thousand euros and 149 thousand euros, and seeking reimbursement of the amounts meanwhile paid in connection with the enforcement proceedings. This fee is a percentage decided annually by ANACOM (in 2 electronic communications revenues. The scheme is being introduced gradually: ⅓ in the first year, ⅔ in the second year and 100% in the third year. NOS SA, NOS Açores and NOS Madeira claim, in addition to defects of unconstitutionality and illegality, that only revenues from the electronic communications business per se, subject to regulation by ANACOM, should be considered for the purposes of the application of the percentage and the calculation of the fee payable, and that revenues from television content should be excluded.
On 18 December 2012 a ruling was passed on the proceedings instigated by NOS SA for 2009, for which the appeal was upheld, with no prior hearing, condemning ICP-ANACOM to pay the costs. ICP-ANACOM appealed and by decision of July 2013 was not upheld.
The remaining proceedings are awaiting trial and decision.
During the course of the 2003 to 2014, some companies of the NOS Group were the subject of tax inspections for the 2001 to 2012 financial years. Following these inspections, NOS, as the controlling company of the Tax Group, and companies not covered by Tax Group, were notified of the corrections made to the Group's tax losses, to VAT and stamp tax and to make the payments related to the corrections made to the above exercises. The total amount of the notifications is about 25.8 million euros. Note that the Group considered that the corrections were unfounded, and contested the amounts mentioned. The Group provided the bank guarantees demanded by the Tax Authorities in connection with these proceedings
At end of year 2013 and taking advantage of the extraordinary settlement scheme of tax debts, the Group settled 7.7 million euros (corresponding to notifications in the amount of -current net of the provision recorded in the amount of 3.5 million euros.
As belief of the Board of Directors of the NOS group, supported by our lawyers and tax advisors, the risk of loss of these proceedings is not likely and the outcome thereof will not affect materially the consolidated position.
the amount of 195 thousand euros and the NOS Madeira, amounting to 817 thousand euros.
In 2011, NOS SA brought an action in Lisboa Judicial Court against PT, claiming payment of 22.4 million euros, for damages suffered by NOS SA, arising from violates of Portability Regulation by part of the PT, in particular, the large number of unjustified refusals of portability requests by PT in the period between February 2008 and February 2011. The court declared the compulsory performs action of expert evidence, which will be currently underway.
It is the understanding of the Board of Directors, supported by lawyers who monitor the process, that there are, in substance, a good chance of winning the NOS SA get in action, even in that of PT have already been convicted for the same offense, by ICP ANACOM. However, it is impossible to determine the outcome of the action.
The cases and the processes described above are provisioned in the consolidated accounts of Zopt, given the degree of risk identified.
In April 2012, following the decision made on 19 July 2011 in which NOS Açores was acquitted, PT brought two new actions against NOS Açores, one relating to the MID service and the other to the supply of video and audio channels, claiming payment of 222 thousand euros and 316 thousand euros respectively, plus interest. They are awaiting decision. Related to the first process, was given the sentence, without impacting interests, reduced the amount payable by NOS Açores to about 97 thousand euros concerning the first action. In what concerns the second action, in the third quarter of 2014, NOS Açores was sentenced to pay 316 thousand euros, plus interest and legal costs. Both these values are fully provisioned at 30 September 2014, in NOS group accounts.
Already in 2014, a NOS SA providers of marketing services has brought a civil lawsuit seeking a payment of about Euro 1,243 thousands, by the alleged early termination of contract and for compensation. It is belief of the Board that the arguments used are not correct, so the outcome of the proceeding will not result in significant impact on the financial statements of the Group. The action awaits trial.
SPORT TV Portugal, S.A. was fined by the Competition Authority to the value of Euro 3,730 thousand for the alleged abuse of its dominant position in the domestic market of subscription channels with premium sport content. SPORT TV is not in agreement with the decision and has therefore decided to appeal against the same to the competent judicial authorities. Meanwhile, the Court of Competition, Regulation and Supervision altered the value to Euro 2,7
The general conditions that affect the agreement and termination of this contract between NOS and its clients, establish that if the products and services provided by the client can no longer be used prior to the end of the binding period, the client is obliged to immediately pay damages.
At 31 December 2014, damages charged but not received by NOS SA, NOS Madeira and NOS Açores amount to a total of Euro 119,395 thousand. In the year ended 31 December 2014, were received and recorded in the income statement Euro 6,556 thousand.
At 31 December 2014, accounts receivable and accounts payable include 37,139,253 euros and 29,913,608 euros, respectively, resulting from a dispute between the subsidiary NOS SA and, essentially, the operator MEO Serviços de Comunicação e Multimédia, S.A. (previously named TMN Telecomunicações Móveis Nacionais, S.A.), in relation to the indefinition of interconnection tariffs, recorded in the year ended at 31 December 2001. In the lower court, the deci d the decision of the
ement of outstanding amounts will depend on the price that will be established.
There is recorded a provision to cover the infringement proceedings in the amount of approximately 4.5 million euros, established by the National of rules relating to legal protection of data. During the project phase of decision, NOS SA argued, firstly, a set of procedural irregularities and, secondly, a set of fact and law arguments that the Board understood to impose a final decision to dismiss the case. However, on 16 January 2014, NOS SA received a settlement notice regarding the fine imposed by the CNPD, against which appealed to the courts. On 8 September 2014, the Court for Competition, Regulation and Sup da Concorrência, R consequence of this decision, the provision was reduced by 3.9 million euros. fine of 100 thousand euros, a decision which is still subject to appeal.
Infringement proceedings due to an alleged failure, by NOS SA, to apply the resolutions taken by ANACOM on 26 October 2005, concerning termination rates for fixed calls. Following a deliberation of Board of Directors of the regulator, in April 2012, a fine of approximately 6.5 million euros was applied to NOS SA; NOS SA has applied for the judicial review of the decision and the court has declared the pr changes used initially in the accusation presented against NOS SA. In September 2014 ANACOM applied, based on the same facts, a fine on NOS SA, amounting to about Euro 6.5 million and was judicial review that decision.
The fiscal authorities are of the opinion that NOS SA has broken the principle of full competition under the terms of (1) of article 58 of the Corporate Tax Code (CIRC), by granting in previous exercises supplementary capital to its subsidiary Be Towering, without having been remunerated at a market interest rate. In consequence, it has been notified, with regard to the years 2004, 2005, 2006 and 2007, of corrections to the determination of its taxable income in the total amount of 20.5 million euros. NOS SA contested the decision with regard to all the above mentioned years. As for the year 2007, the Fiscal and Administrative Court of Oporto has already decided unfavourably. The company has contested this decision.
For the year ended at 31 December 2010, the subsidiary NOS SA was notified of the Report of Tax Inspection, where it is considered that the increase, when calculating the taxable profit for the year 2008, of the amount of 100 million euros, with respect to initial price of future credits transferred to securitization, is inappropriate. Given the principle of periodisation of taxable income, NOS SA was subsequently notified of the improper deduction of the amount of 20 million euros in the calculation of taxable income for the years 2009 to 2012 (Report of the Tax Inspection received in January 2015). Given that the increase made in 2008 was not accepted due to not complying with Article 18 of the CIRC, also in the years following, the deduction corresponding to credits generated in that year, will eliminate the calculation of taxable income, to meet the annual amortisation hired as part of the operation (20 million per year during 5 years). NOS SA challenged the decisions regarding 2008, 2009 and 2010 fiscal years and will challenge, in time, the decision regarding 2011 and 2012 fiscal years. Regarding the year 2008, the Administrative and Fiscal Court of Porto has already decided unfavourably, in March 2014, and the company has initiated the corresponding appeal.
12. Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CSLU)
Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CSLU): The Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CSLU) is legislated in Articles 17 to 22 of Law nr 35/2012, of 23 August. From 1995 until June 2014, PT Comunicações, SA (PTC) was the sole provider for the universal service of electronic communications, having been designated illegally without a tender procedure, as acknowledged by the European Court esignating Portugal Telecom. In accordance with Article 18 of the abovementioned Law 35, the net costs of the operator responsible for providing the universal service, approved by IPC-ANACOM, must be shared between other companies who provide, in national territory public communication networks and publicly accessible electronic communications services. NOS is therefore within the scope of this extraordinary contribution given that PTC has requested the payment of CLSU to the compensation fund. The compensation fund can be activated to compensate the net costs of the electronic communications universal service, relative to the period before the designation of the provider by tender, whenever, cumulatively (i) there are net costs, considered excessive, the amount of which is approved by ICP-ANACOM, following an audit to their preliminary calculation and support documents, which are provided by the universal service provider, and (ii) the universal service provider requester the Government compensation for the net costs approved under the terms previously mentioned. In September 2013, ICP-ANACOM delibered to approve the final results of the CLSU audit presented by PTC, relative to the period from 2007 to 2009, in a total amount of 66.8 million euros, a decision which was contested by NOS and about which NOS was, in June 2014, notified of the argument provided by ICP-ANACOM. Also in June 2014, ICP-ANACOM requested NOS to send the information regarding the revenue eligible, for the purpose of the contribution toward the compensation fund. This information was sent with the y contribution. An audit to the amount of revenues eligible is underway and in its closing stages. It is expected that PTC submits to ICP-ANACOM the CLSU calculations incurred in the period from 2012 to June 2014. It is estimated that the contribution of Optimus, SA, up until the date of the merger, amounts to 22 million euros.
It is the opinion of the Board of Directors of NOS that this extraordinary contribution violates the Directive of Universal Service, given that PTC was not designated the universal service provider through a tender procedure. Moreover, considering the existing legal framework since NOS began its activity, the request of payment of the extraordinary contribution violates the principle of the protection of confidence, recognized on a legal and constitutional level in Portuguese domestic law. For these reasons, NOS will judicially challenge the liquidation of each and all extraordinary contributions. Following these facts, which took place especially in June 2014, and after reassessing the process with its attorneys, this contribution is classified as a contingent liability. However, the Board of Directors is convinced it will be successful in all challenges, both future and already undertaken.
Regardless of the belief of the Board of Directors of NOS, was attributed, in 2014, in the Goodwill allocation period provided by IFRS 3, a provision to remedy this situation, with regard to possible liability to the date of the merger.
The Sonaecom Board of Directors believes that the above processes may result in contingencies that affect the NOS group's accounts are properly provisioned, given the degree of risk in the consolidated accounts of Sonaecom.
In August 2013, Sonaecom Group began to hold NOS shares recorded at fair value through profit or loss, as a result of the merger between Optimus SGPS and Zon (Note 3.e), since it is the initial classification of an asset held for a sale purpose in a shorthe shared control situation with ZOPT. Some of these shares were used as part of the General Public and Voluntary Offer acquisition of own shares, as described below.
In the period ended 31 December 2014 were acquired Sonae shares in accordance with the movement described below.
The movements occurred in financial assets at fair value through profit or loss, in 31 December 2014 and 2013 were as follows:
| 2014 | ||||||
|---|---|---|---|---|---|---|
| Fair value adjustments |
Increase and decrease in fair value of shares |
|||||
| Financial assets at fair value through profit or loss | Opening balance | Increases | Decreases | (note 32) | intended to cover MTIP | Closing balance |
| NOS | 202,442,350 | - | (141,650,837) | (3,129,895) | - | 57,661,618 |
| Sonae SGPS | - | 5,522,188 | (2,804,200) | (167,060) | (246,974) | 2,303,954 |
| 202,442,350 | 5,522,188 | (144,455,037) | (3,296,955) | (246,974) | 59,965,572 | |
| Recorded under the caption non current assets (note 4) | 1,424,996 |
Recorded under the caption current assets (note 4) 58,540,576
| *Incentive medium-term plans | ||||||
|---|---|---|---|---|---|---|
| 2013 | ||||||
| Financial assets at fair value through profit or loss | Opening balance | Increases (note 3.e) |
Decreases | Fair value adjustments (note 32) |
Increase and decrease in fair value of shares intended to cover MTIP |
Closing balance |
| NOS | - | 155,805,631 | - | 46,636,719 | - | 202,442,350 |
| - | 155,805,631 | - | 46,636,719 | - | 202,442,350 | |
| Recorded under the caption current assets | 202,442,350 | |||||
*Incentive medium-term plans
in Profit and Loss Statement (note 32), with the exception of increases and decreases in the fair value of shares intended to cover incentive plans, which is recorded in other captions of the income statement.
Decreases at 31 December 2014 represent the counterpart in NOS shares provided for the terms of trade of the General Public and Voluntary Offer for acquisition of own shares. As a result of this offering Sonaecom reduced its investment in NOS shares in 26,476,792 shares (EUR 141,650,837) (note 17) and now holds 11,012,532 shares representing the share capital of NOS, corresponding to a share of 2.14%.
The decrease in the investment in Sonae SGPS shares, essentially correspond to the payment of medium-term incentive plan expired in the year ended at 31 December 2014.
The amount recorded in non-current assets corresponds to the investment in Sonae SGPS shares, to cover the medium-term incentive plans, which payment will occur in more than one year.
The evaluation of fair value of the investment is detail as follows:
| 2014 | NOS | Sonae SGPS | |||
|---|---|---|---|---|---|
| Shares | 11,012,532 | 2,249,955 | |||
| Level of inputs in the hierarchy of fair value | Level 1 | ||||
| Valuation method | Quoted price on the stock exchange | ||||
| Quoted price* | 5.236 | 1.024 | |||
| Fair value | 57,661,618 | 2,303,954 |
* Used the share price of 31 December 2014 in the determination of the fair value.
| 2013 | NOS |
|---|---|
| Shares | 37,489,324 |
| Level of inputs in the hierarchy of fair value | Level 1 |
| Valuation method | Quoted price on the stock exchange |
| Quoted price* | 5.4 |
| Fair value | 202,442,350 |
* Used the share price of 31 December 2013 in the determination of the fair value.
At 31 December 2014 and 2013, this caption included investments classified as available-for-sale and was made up as follows:
| % | 2014 | 2013 | |
|---|---|---|---|
| 1.38% | 197,344 | 197,344 | |
| VISAPRESS - Gestão de Conteúdos dos Média, CRL | 10.00% | 5,000 | 5,000 |
| Others | - | 10,710 | 13,104 |
| Impairment losses | (100,000) | (100,000) | |
| 113,054 | 115,448 |
At 31 December 2014, these investments correspond to shareholdings of immaterial amount, in unlisted companies, in which the Group has no significant influence, and in which the acquisition cost of such investments is a reasonable estimation of their fair value, adjusted where applicable, by the respective impairment losses.
The assessment of impairment in the investments described above is performed through comparisons with the value of the percentage of share capital detained by the Group and with multiples of sales and EBITDA of companies of the same sector.
The financial information regarding these investments is detailed below (in thousands of euro):
| Assets | funds | Gross debt | Turnover | Operational results |
Net income | |
|---|---|---|---|---|---|---|
| (1) | 13,630 | 6,201 | 1,020 | 14,311 | (626) | (1,018) |
| VISAPRESS - Gestão de Conteúdos dos Média, CRL (1) | 110 | 10 | - | 58 | 8 | 8 |
(1) Amounts expressed in thousands euro at 31 December 2013.
Deferred tax assets at 31 December 2014 and 2013, amounted to Euro 6,837,230 and Euro 5,199,886, respectively, and arose, mainly, from tax losses carried forward, from differences between the accounting and tax amount of some fixed assets and from others temporary differences. The movements in deferred tax assets in the years ended at 31 December 2014 and 2013 were as follows:
| 2014 | |||||||
|---|---|---|---|---|---|---|---|
| Companies included in | Movements in | Record/(reverse) | |||||
| Balance at 31 | the consolidation | deferred tax of | Utilization of | of deferred tax of | Discontinued | Balance at 31 | |
| December 2013 | perimeter (note 3.a) | the year | deferred tax | previous years | units (Note 3.d)) | December 2014 | |
| Tax losses | 848,995 | 1,044,217 | 736,268 | (231,986) | - | - | 2,397,494 |
| Tax provisions not accepted and other temporary differences | 1,510,903 | - | 274,141 | - | (58,532) | (104,181) | 1,622,331 |
| Tax benefits (SIFIDE, RFAI and CFEI) | 946,535 | - | - | - | 232,276 | (65,367) | 1,113,444 |
| Adjustments in the conversion to IAS/IFRS | 227 | - | - | - | (227) | - | - |
| Differences between the tax and accounting amount of certain fixed assets and others |
1,997,545 | - | (252,245) | - | - | - | 1,745,300 |
| Effect on results (Note 33) | 5,304,205 | - | 758,164 | (231,986) | 173,517 | - | 6,003,900 |
| Companies included in the consolidation perimeter (Note 3.a)) and discontinued operations (Note 3.d)) |
- | 1,044,217 | - | - | - | (169,548) | 874,669 |
| Others | (104,319) | - | 62,980 | - | - | - | (41,339) |
| Closing balance | 5,199,886 | 1,044,217 | 821,144 | (231,986) | 173,517 | (169,548) | 6,837,230 |
| 2013 | ||||||
|---|---|---|---|---|---|---|
| Balance at 31 December 2012 |
Movements in deferred tax of the year |
Utilization of deferred tax |
Record/(reverse) of deferred tax of previous years |
Discontinued units (note 3.e) |
Balance at 31 December 2013 |
|
| Tax losses Tax provisions not accepted and other temporary differences |
6,172,973 36,302,876 |
1,160,777 (75,391) |
(928,527) - |
(1,054,642) 4,718,206 |
(4,501,586) (39,434,788) |
848,995 1,510,903 |
| Tax benefits (SIFIDE and RFAI) Adjustments in the conversion to IAS/IFRS Temporary differences arising from the securitisation of receivables |
9,709,216 13,249,801 3,220,000 |
5,088,052 (4,416,654) - |
(1,320,450) - (2,146,667) |
(5,900) 1,392,244 - |
(12,524,383) (10,225,164) (1,073,333) |
946,535 227 - |
| Differences between the tax and accounting amount of certain fixed assets and others |
32,510,701 | (3,849,386) | - | 4,202,743 | (30,866,513) | 1,997,545 |
| Sub-total effect on results | 101,165,567 | (2,092,602) | (4,395,644) | 9,252,651 | (98,625,767) | 5,304,205 |
| Discontinued operations | 95,065,947 | (2,407,278) | (3,249,921) | 9,217,018 | (98,625,767) | - |
| Continued operations (note 33) | 6,099,620 | 314,676 | (1,145,723) | 35,632 | - | 5,304,205 |
| Others | (30,786) | (73,533) | - | - | - | (104,319) |
| Closing balance | 101,134,781 | (6,351,339) | (4,395,644) | 9,252,651 | (98,625,767) | 5,199,886 |
ry differences related to the value of the UMTS license, of the NOS Comunicações. In consolidated financial statements and in accordance with IAS / IFRS, the license was amortised linearly, by the estimated period of useful life. For tax purposes, until the year 2009, the UMTS license was amortised using, on the first five years of commercial operation, from 2004 to 2008, incremental monthly basis depending of the capacity of the network installed, which would be applied after the straight-line monthly basis until the term of the license. Thus, the group recorded deferred tax assets relating to the temporary differences between the value of the license for tax purposes and the value recorded in the consolidated financial statements. In 31 December 2013, these assets are no longer part of the final balance, following the merger between Optimus SGPS and Zon at August of 2013 and, subsequently, the derecognition of the assets and liabilities of the telecommunications segment (Note 3.e).
Deferred taxes related to the IAS / IFRS conversion adjustments correspond to the temporary differences generated in the companies included in consolidation and result from the fact that IAS / IFRS conversion adjustments, recorded in these companies at 31 December 2009, already considered in consolidated financial statements under IAS / IFRS, from previous years, only be considered for tax purposes, linearly, for a period of five years between 2010 and 2014.
At 31 December 2008, deferred tax assets were recognised in the amount of Euro 16.1 million with regard to the securitisation of future receivables completed in December 2008. As a result of that operation, and in accordance with the provisions of Decreto-Lei nº 219/2001 (Decree-Law) of 4 August, an amount of Euro 100 million was generated from that operation and it was added for purposes of determining the taxable income for the year 2008, thereby generating a temporary difference between accounting and taxable income result, which led to the recognition of a deferred tax asset to the extent, that its use was, with reasonable safety, probable at that date. Until 27 August 2013, an amount of Euro 15 million was reversed corresponding to the reversal of the above referred temporary difference. In the year ended at 31 December 2013, these assets are no longer part of at August 2013, and, subsequently, the derecognition of the assets and liabilities of the telecommunications segment (note 3.e).
At 31 December 2014 and 2013, assessments of the deferred tax assets to be recovered and recognised were made. Potencial defered tax assets were recorded to the extent that future taxable profits were expected to be generated against which the tax losses and deductible tax differences
The rate used at 31 December 2014, in Portuguese companies, to calculate the deferred tax assets relating to tax losses carried forward was 21% (23% in 2013), as a consequence of the IRC rate change from 23% to 21% from 2015 onwards . The rate used to calculate the temporary differences in Portuguese companies, including provisions not accepted and impairment loss understood to be unlikely the taxation of temporary differences during the estimated period when the referred rate will be applicable. Tax benefits, related to deductions from taxable income, are considered at 100%, and in some cases, their full acceptance is dependent on the approval of the authorities that concede such tax benefits. For foreign companies was used the rate in force in each country.
In accordance with the tax returns and other information prepared by the companies that have registered deferred tax assets, the detail of such deferred tax assets, by nature, at 31 December 2014 was as follows:
| 2014 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nature | Companies included in the |
tax group* We Do Brasil We Do USA SSI Espanã We Do Mexico | Saphety Brasil |
S21 Sec Gestion |
S21 Sec Institute |
S21 Sec Labs |
Lookwise | Total | Total Sonaecom Group |
|||
| Tax losses: | ||||||||||||
| To be used until 2021 | - | - | - | - | 33,607 | - | - | - | - | - | 33,607 | 33,607 |
| To be used until 2022 | - | - | - | - | 26,824 | - | - | - | - | - | 26,824 | 26,824 |
| To be used until 2023 | - | - | - | - | 185,904 | - | - | - | - | - | 185,904 | 185,904 |
| To be used until 2025 | - | - | - | 126,288 | - | - | - | - | - | - | 126,288 | 126,288 |
| To be used until 2026 | 948 | - | - | - | - | - | - | - | - | - | - | 948 |
| To be used until 2027 | - | - | - | - | - | - | - | 13,482 | 45,833 | - | 59,315 | 59,315 |
| To be used until 2028 | - | - | - | - | - | - | 289,787 | 36,623 | 12,017 | 526,337 | 864,764 | 864,764 |
| To be used until 2030 | - | - | 137,641 | 32,650 | - | - | - | - | - | - | 170,291 | 170,291 |
| To be used until 2033 | - | - | 98,249 | - | - | - | - | - | - | - | 98,249 | 98,249 |
| To be used until 2034 | - | - | 831,304 | - | - | - | - | - | - | - | 831,304 | 831,304 |
| Tax losses | 948 | - | 1,067,194 | 158,938 | 246,335 | - | 289,787 | 50,105 | 57,850 | 526,337 | 2,396,546 | 2,397,494 |
| Tax provisions not accepted and other temporary differences |
738,624 | 317,536 | 432,855 | - | 103,040 | 6,966 | 23,132 | - | 178 | - | 883,707 | 1,622,331 |
| Tax benefits (SIFIDE, RFAI and CFEI) | 1,094,673 | - | 18,771 | - | - | - | - | - | - | - | 18,771 | 1,113,444 |
| Differences between the tax and accounting amount of certain fixed assets and others |
- | - | - | - | - | - | - | - | - | - | - | 1,745,300 |
| Others | - | 5,962 | (52,881) | - | 5,687 | (107) | - | - | - | - | (41,339) | (41,339) |
| Total | 1,834,245 | 323,498 | 1,465,939 | 158,938 | 355,062 | 6,859 | 312,919 | 50,105 | 58,028 | 526,337 | 3,257,685 | 6,837,230 |
* In 2014, Digitmarket was included in tax group, following the changes occured in the aplicable legislation.
At 31 December 2014 and 2013, the Group has other situations where potential deferred tax assets could be recognised, but since it is not expected that sufficient taxable profits will be generated in the future to cover those losses, such deferred tax assets were not recorded:
| 2014 | 2013 | |
|---|---|---|
| Tax losses | 9,097,403 | 5,988,664 |
| Temporary differences (provisions not accepted for tax purposes and other temporary diferences) | 30,179,083 | 34,979,707 |
| Others | 779,002 | 1,254,119 |
| 40,055,488 | 42,222,490 |
| At 31 December 2014 and 2013, tax losses for which deferred tax assets were not recognised have the following due dates: | ||||
|---|---|---|---|---|
| Due date | 2014 | 2013 | ||
| 2014 | - | 407,763 | ||
| 2015 | 1,218,965 | 1,261,963 | ||
| 2016 | 269,298 | 304,480 | ||
| 2017 | 199,008 | 209,237 | ||
| 2018 | 254,728 | 216,766 | ||
| 2019 | 373,957 | 331,156 | ||
| 2020 | 148,146 | 28,467 | ||
| 2021 | 168,442 | 53,860 | ||
| 2022 | 341,225 | 53,174 | ||
| 2023 | 92,878 | - | ||
| 2025 | 123,915 | - | ||
| 2026 | 762,523 | - | ||
| 2027 | 220,864 | - | ||
| 2028 | 183,642 | - | ||
| 2029 | 1,166,417 | |||
| 2030 | 44,295 | 84,942 | ||
| 2031 | 89,045 | 105,369 | ||
| 2032 | 54,390 | - | ||
| Unlimited | 3,385,665 | 2,931,487 | ||
| 9,097,403 | 5,988,664 |
The years 2027 and following are applicable to the subsidiaries incorporated in countries in which the reporting period of tax losses is greater than twelve years.
The deferred tax liabilities at 31 December 2013 amounting to Euro 89,522, result mainly from temporary differences between tax and accounting results of intangible assets.
The movement that occurred in deferred tax liabilities in the years ended at 31 December 2014 and 2013 were as follows:
| 2014 | 2013 | |
|---|---|---|
| Opening balance | (89,522) | (1,089,637) |
| Temporary differences between accounting and tax result | 88,971 | 740,362 |
| Discontinued operations | - | 740,173 |
| Continued operations | 88,971 | 189 |
| Discontinued operations (note 3.e) | - | 259,753 |
| Sub-total effect on results (note 33) | 88,971 | 189 |
| Others | 551 | - |
| Closing balance | - | (89,522) |
The reconciliation between the earnings before taxes and the taxes recorded for the years ended at 31 December 2014 and 2013 is as follows:
| 2014 | 2013 (restated - note 1) |
|
|---|---|---|
| Earnings before taxes | 14,661,702 | 41,414,283 |
| Income taxation | (3,372,191) | (10,353,571) |
| Deferred tax assets not recognised in the individual accounts and / or resulting from consolidation adjustments and other | ||
| adjustments to taxable income | 2,880,672 | 4,028,066 |
| Record/(reverse) of deferred tax assets related to previous years and tax benefits | 108,150 | 564,199 |
| Use of tax losses and tax benefits without record of deferred tax asset in previous years | 141,116 | 2,702,328 |
| Temporary differences for the year without record of deferred tax assets | (447,536) | (403,722) |
| Record of deferred tax liabilities | - | (350,070) |
| Income taxation recorded in the year (note 33) | (689,789) | (3,812,770) |
The tax rate used to reconcile the tax expense and the accounting profit is 23% (25% in 2013) because it is the standard rate of the corporate income tax in Portugal in 2014, country where almost all of the income of Sonaecom group are taxed.
Portuguese Tax Authorities can review the income tax returns of the Company and of its subsidiaries with head office in Portugal for a period of four years (five years for Social Security), except when tax losses have been generated, tax benefits have been granted or when any review, claim or impugnation is in course, in which circumstances, the periods are extended or suspended. Consequently, tax returns of each year, since the year 2011 (inclusive) are still subject to such review. The Board of Directors believes that any correction that may arise as a result of such review would not have a significant impact on the accompanying consolidated financial statements.
there are no liabilities not provisioned in the consolidated financial statements, associated to probable tax contingencies that should have been registered or disclosed in the accompanying financial statements, at 31 December 2014.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Raw materials | 341,038 | 427,855 |
| Merchandise | 761,420 | 150,670 |
| 1,102,458 | 578,525 | |
| Accumulated impairment losses on inventories (note 22) | (25,000) | (25,000) |
| 1,077,458 | 553,525 |
The cost of goods sold in the years ended at 31 December 2014 and 2013 amounted to Euro 30,341,304 and Euro 24,753,054 respectively and was determined as follows:
| 2014 | 2013 | |
|---|---|---|
| Opening inventories | 578,525 | 18,179,938 |
| Purchases | 30,235,375 | 51,803,061 |
| Increase of accumulated impairment losses on inventories (note 22) | - | 466,664 |
| Inventory adjustments | 629,862 | (4,514,410) |
| Output of the telecommunications sector companies (note 3.e) | - | (19,124,520) |
| Descontinued operations (note 37) | - | (21,479,154) |
| Closing inventories | (1,102,458) | (578,525) |
| 30,341,304 | 24,753,054 |
f cts agreements signed with customers by the subsidiary Optimus Comunicações S.A. (note 5). These amounts were, in the year ended at 31 December 2013, derecognized following the merger between Optimus SGPS and Zon (note 3.e).
The accumulated impairment losses on inventories reflect the difference between the acquisition cost and market net realisable value of the inventory, as well as the estimate of impairment losses due to low stock turnover, obsolescence and deterioration. The accumulated impairment losses
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Trade debtors: | ||
| Information Systems | 35,521,789 | 32,032,744 |
| Multimedia and others | 4,478,982 | 4,383,609 |
| 40,000,771 | 36,416,353 | |
| Doubtful debtors | 3,704,428 | 3,889,900 |
| 43,705,199 | 40,306,253 | |
| Impairment losses in accounts receivable (note 22) | (3,704,428) | (3,889,900) |
| 40,000,771 | 36,416,353 |
At 31 December 2014 and 2013, the accumulated impairment losses by segment were made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Impairment losses in accounts receivable: | ||
| Information Systems | 1,919,632 | 1,965,707 |
| Multimedia and others | 1,784,796 | 1,924,193 |
| 3,704,428 | 3,889,900 |
ts included in the balance sheet are net of cumulative doubtful debtors impairment losses that were estimated by the Group, taking into consideration its past experience and an assessment of the current macroeconomic environment. The Board of Directors believes that the book value of the accounts receivable does not differ significantly from its fair value.
Trade debtors by age at 31 December 2014 and 2013 were as follows:
| Due without impairment | Due with impairment | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Total | Not due | Until 30 days | From 30 to 90 days |
More than 90 days |
Until 90 days | From 90 to 180 days |
From 180 to 360 days |
More than 360 days |
|
| 2014 | |||||||||
| Trade debtors | 43,705,199 | 18,460,254 | 5,152,882 | 4,422,285 | 10,303,734 | 332,333 | 63,824 | 481,021 | 4,488,866 |
| 2013 | |||||||||
| Trade debtors | 40,306,253 | 16,421,523 | 7,189,764 | 4,782,586 | 4,719,780 | 954,061 | 856,685 | 1,179,790 | 4,202,064 |
At 31 December 2014, of the total amount of accounts receivable impaired and overdue for more than 90 days, net of VAT, that the Group expects and makes efforts to recover, around 90% were covered by impairment adjustments.
Credit risk monitoring, which is performed on a continuous basis, can be resumed as follows:
(i) In the case of regular customers, impairment adjustment is calculated by applying an uncollectibility percentage based on historical data regarding collections, to the accounts receivables overdue.
(ii) In the case of the remaining accounts receivable, impairment adjustments are determined on a stand-alone basis, based on the age of the receivables, net of the amounts payable and the information of the financial situation of the debtor.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| State and other public entities | 7,262,261 | 5,863,034 |
| Advances to suppliers | 305,618 | 534,960 |
| Other debtors | 2,357,876 | 16,752,397 |
| Accumulated impairment losses in accounts receivable (note 22) | (109,625) | (109,625) |
| 9,816,130 | 23,040,766 |
benefit from the scheme of Outstanding Debts Settlement of Tax and Social Security, and carried out a payment totalling of Euro 4,993.935 related essentially to VAT. The Board of Directors believes that these amounts are not due and there are no material liabilities associated that has no provision and that should be disclosed. On 31 December 2014, this amount was reclassified to 'Other non-current assets'.
Other debtors and advances to suppliers by age at 31 December 2014 and 2013 are as follows:
| Due without impairment | Due with impairment | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| From 30 to | More than 90 | From 90 to | From 180 to | More than | |||||
| Total | Not due | Until 30 days | 90 days | days | Until 90 days | 180 days | 360 days | 360 days | |
| 2014 | |||||||||
| Advances to suppliers | 305,618 | 6,109 | 3,218 | 15,475 | 280,816 | - | - | - | - |
| Other debtors | 2,357,876 | 97,384 | 30,472 | 1,133,713 | 1,007,557 | - | - | 8,108 | 80,642 |
| 2,663,494 | 103,493 | 33,690 | 1,149,188 | 1,288,373 | - | - | 8,108 | 80,642 | |
| 2013 | |||||||||
| Advances to suppliers | 534,960 | 52,663 | 239,007 | 3,136 | 240,154 | - | - | - | - |
| Other debtors | 16,752,397 | 364,583 | 4,489,285 | 3,228,261 | 8,464,783 | - | - | 5,197 | 200,288 |
| 17,287,357 | 417,246 | 4,728,292 | 3,231,397 | 8,704,937 | - | - | 5,197 | 200,288 |
The amounts due and without impairment correspond, mostly, to Sonae Group companies and other entities, without credit risk.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Invoices to be issued to clients for services rendered | 9,058,592 | 6,242,561 |
| Specialised work paid in advance | 1,478,537 | 1,892,828 |
| Other accrued income | 760,712 | 783,419 |
| Prepaid rents | 332,985 | 293,202 |
| Rappel discounts (annual quantity discounts) | 11,255 | 17,684 |
| Other costs paid in advance | 270,144 | 68,712 |
| 11,912,225 | 9,298,406 |
The results of the projects in progress, carried out by the information systems segment, are recognised based on the completion percentage method. .
At 31 December 2014 and 2013, projects in progress could be summarised as follows:
| 2014 | 2013 | |
|---|---|---|
| Number of projects in progress | 894 | 664 |
| Total costs recognised | 18,961,821 | 18,133,225 |
| Total revenues recognised | 34,928,537 | 30,823,190 |
| Total deferred revenues (note 27) | 7,053,922 | 5,944,035 |
| Total accrued revenues | 6,281,550 | 4,680,950 |
At 31 December 2014 and 2013, the detail of cash and cash equivalents was as follows:
| 2014 | 2013 | |
|---|---|---|
| Cash | 22,423 | 10,979 |
| Bank deposits repayable on demand | 4,551,280 | 28,793,626 |
| Treasury applications | 177,436,892 | 159,210,318 |
| Cash and cash equivalents | 182,010,595 | 188,014,923 |
| Bank overdrafts (Note 20) | (196,082) | (10,208) |
| 181,814,513 | 188,004,715 |
During the year ended at 31 December 2014, the above mentioned treasury applications bear interests at an average rate of 1.03% (1.69% in 2013), being distributed, on that date, by 6 financial institutions.
At 31 December 2014 and 2013, the share capital of Sonaecom was comprised by 311,340,037 and 366,246,868, respectively, ordinary registered shares, of 0.74 and Euro 1 each, respectively. At those dates, the Shareholder structure was as follows:
| 2014 | 2013 | |||
|---|---|---|---|---|
| Number of shares |
% | Number of shares | % | |
| Sontel BV | 194,063,119 | 62.33% | 194,063,119 | 52.99% |
| Sonae SGPS | 81,022,964 | 26.02% | 76,679,374 | 20.94% |
| 30,682,940 | 9.86% | 82,152,012 | 22.43% | |
| Own shares (note 18) | 5,571,014 | 1.79% | 5,571,014 | 1.52% |
| Goldman Sachs* | - | - | 7,780,349 | 2.12% |
| Efanor Investimentos, SGPS, S.A.** | - | - | 1,000 | 0.00% |
| 311,340,037 | 100.00% | 366,246,868 | 100.00% |
* On 23 October 2013, Goldman Sachs Group, Inc. informed Sonaecom about the completion of a qualifying holding of 2.12% in Sonaecom, corresponding to 7,780,349 shares and voting rights. On 23 February 2014, has been included in 'Free Float' because it does not correspond to a qualified participation.
** In the year ended at 31 december 2014, following the completion of Public Offer of own shares, Efanor has no longer a direct participation in the capital of Sonaecom.
On 5 February 2014, Sonaecom made public the decision to launch a general and voluntary tender offer for the acquisition of shares representing the share capital of Sonaecom.
The offer was general and voluntary, with the offered obliged to acquire all the shares that were object of the offer and were, until the end of the respective period, subject to valid acceptance by the recipients.
The period of the offer, during which sales orders were received, ran for two weeks, beginning on 6 February and ending on 19 February 2014.
As a return for the own shares acquired in this General Public Offer and Voluntary process Sonaecom delivered 26,476,792 shares representing the share capital of NOS which were recorded in the balance sheet by Euro 141,650,837 (Note 9) and the amount of Euro 19,632 in cash, so as a result of this General Public and Voluntary Offer, assets and equity Sonaecom decreased by Euro 141,670,470.
All shares that comprise the share capital of Sonaecom, are authorized, subscribed and paid. All shares have the same rights and each share corresponds to one vote.
During the period ended 31 December 2014, Sonaecom did not acquire, sold or delivered own actions, in addition the own shares purchased under the General Public Offer and Voluntary process described in Note 17, whereby the amount held to date, is of 5,571,014 own shares representing 1.79% of its share capital, at an average price of Euro 1.380.
Non-controlling interests at 31 December 2014 and 2013 are made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Digitmarket | 422,253 | 375,209 |
| S21 Sec FRM (note 3.a) | 203,201 | - |
| S21 Sec Barcelona (note 3.a) | 180,018 | - |
| Saphety Colômbia | (35,341) | (13,836) |
| Saphety | (37,039) | (71,967) |
| Saphety Brasil | (48,982) | (20,688) |
| S21 Sec Brasil (note 3.a) | (60,983) | - |
| S21 Sec Labs (note 3.a) | (208,676) | - |
| Lookwise (note 3.a) | (359,242) | - |
| S21 Sec Gestion (note 3.a) | (678,123) | - |
| Others | (9,086) | 1,106 |
| (632,000) | 269,824 |
At 31 December 2014 and 2013, the caption Loans had the following breakdown:
| Amount outstanding | ||||||
|---|---|---|---|---|---|---|
| Type of | ||||||
| Company | Issue denomination | Limit | Maturity | reimbursement | 2014 | 2013 |
| Sonaecom SGPS | 'Obrigações Sonaecom SGPS 2013' | 20,000,000 | Jun-16 | Final | - | 20,000,000 |
| Costs associated with financing set-up | - | - | - | - | (58,271) | |
| Interests incurred but not yet due | - | - | - | - | 61,767 | |
| - | 20,003,496 | |||||
| WeDo USA | Bank loan | - | Apr-19 | Parcel | - | 4,449,538 |
| S21GES | Bank loan | 1,229,223 | Jul-21 | Parcel | 1,229,223 | - |
| S21GES | Bank loan | 600,919 | Jul-21 | Parcel | 600,919 | - |
| S21GES | Bank loan | 573,839 | Jul-21 | Parcel | 573,839 | - |
| S21GES | Bank loan | 547,000 | Jul-21 | Parcel | 547,000 | - |
| S21GES | Bank loan | 309,000 | Jul-21 | Parcel | 309,000 | - |
| S21GES | Bank loan | 296,000 | Jul-21 | Parcel | 296,000 | - |
| S21GES | Bank loan | 192,000 | Jul-21 | Parcel | 192,000 | - |
| S21 Sec Labs | Repayable subsidies | - | Jun-24 | Parcel | 2,046,913 | - |
| S21 Sec Gestion | Repayable subsidies | - | Jun-25 | Parcel | 1,701,292 | - |
| Lookwise | Repayable subsidies | - | Dec-25 | Parcel | 1,215,946 | - |
| Saphety | Minority Shareholder loans | - | - | - | 451,322 | 451,322 |
| Costs associated with financing set-up | - | - | - | (152,924) | (121,435) | |
| Interests incurred but not yet due | - | - | - | 48,455 | 27,158 | |
| 9,058,985 | 4,806,583 | |||||
| 9,058,985 | 24,810,079 |
| Amount outstanding |
||||||
|---|---|---|---|---|---|---|
| Type of | ||||||
| Company | Issue denomination | Limit | Maturity | reimbursement | 2014 | 2013 |
| WeDo USA | Bank loan | - | Apr-14/Oct-14 | - | - | 988,788 |
| S21 Sec Gestion | Overdraft facilities | 200,000 | Jul-15 | - | 199,912 | - |
| S21 Sec Gestion | Overdraft facilities | 150,000 | Jul-15 | - | 150,057 | - |
| S21 Sec Gestion | Overdraft facilities | 150,000 | Jul-15 | - | 111,033 | - |
| S21 Sec Gestion | Overdraft facilities | 100,000 | Jul-15 | - | 99,815 | - |
| S21 Sec Gestion | Factoring | 300,000 | Jul-15 | - | 111,431 | - |
| S21 Sec Gestion | Factoring | 400,000 | Jul-15 | - | 261,674 | - |
| S21 Sec Labs | Repayable subsidies | - | Dec-15 | - | 223,880 | - |
| Lookwise | Repayable subsidies | - | Dec-15 | - | 179,164 | - |
| S21 Sec Gestion | Repayable subsidies | - | Dec-15 | - | 431,228 | - |
| Several | Bank overdrafts (Note 16) | - | - | - | 196,082 | 10,208 |
| Several | Interests incurred but not yet due | - | - | - | 16,175 | - |
| 1,980,451 | 998,996 |
In May 2013, Sonaecom signed a Bond Loan, privately placed, amounting to Euro 20 million, without guarantees and with a maturity date of three years. The bonds bear interest at floating rate indexed to Euribor and paid semiannually. This issue was organized and mounted by Caixa Económica Montepio Geral. This loan was repaid early in June 2014.
The loan above is unsecured and the fulfilment of the obligations under this loan is exclusively guaranteed by the underlying activities and the indebted company cash flows generation capacity.
The average interest rate of the bond loans, in the year 2013, was 2.71%.
In June 2010, Sonaecom contracted a Commercial Paper Programme Issuance with a maximum amount of Euro 15 million with subscription grant and maturity of tree years, organised by Caixa Económica Montepio Geral. In June 2013 an addition was made to the contract that lasted for one year, automatically renewable for equal periods up to a maximum of 5 years. In March 2014, this credit line was transferred to Sonae SGPS.
The average interest rate of the Commercial Paper Programmes, in the year 2013, was 4.26%.
The loan above are unsecured and the fulfilment of the obligations under this loan is exclusively guaranteed by the underlying activities and the indebted company cash flows generation capacity.
Sonaecom has also a short term bank credit line, in the form of current or overdraft account commitment, in the amount of Euro 1 million and S21GES in the amount of Euro 756 thousand, in periods, generally up to a year.
All these loans and bank credit lines bear interest at market rates, indexed to the Euribor for the respective term, and were all contracted in Euro.
At 31 December 2014 the Group had grants obtained from dependent entities of the Government of Navarra, CDTI and 'Ministerio de Ciencia y Tecnología'. These subsidies are recorded at amortized cost in accordance with the method of effective interest rate and have the following repayment plan:
| 2014 | |
|---|---|
| 2015 | 834,272 |
| 2016 | 866,451 |
| 2017 | 1,039,114 |
| 2018 | 1,025,130 |
| 2019 and next | 2,033,456 |
| These subsidies bear interest at rates between 0% and 4%. | 5,798,423 |
In April 2012, WeDo Americas contracted a long term loan, amounted to USD 7.5 million with the maturity of seven years, organised by Espirito Santo Bank. Repayment of this loan was due in 11 equal semi-annual payments, with the first made in April 2014. This loan was repaid early in October 2014.
| 2014 | |||
|---|---|---|---|
| Issue denomination | Limit | Maturity | Bank |
| Bank loan | 1,229,223 | Jul-21 | Popular |
| Bank loan | 600,919 | Jul-21 | Santander |
| Bank loan | 573,839 | Jul-21 | BBVA |
| Bank loan | 547,000 | Jul-21 | Bankinter |
| Bank loan | 309,000 | Jul-21 | Sabadell |
| Bank loan | 296,000 | Jul-21 | Popular |
| Bank loan | 192,000 | Jul-21 | La Caixa |
The average interest rate of these loans, at 31 December 2014, was 3.05%.
At 31 December 2014, the main financial constraints (covenants) included in debt contracts are related with pledge clauses, which impose certain ritage, on the modification ssue of new shares or change in shareholder rights. The penalties applicable in the event of default in these covenants are generally the early payment of the loans obtained.
At 31 December 2014 and at present date, Sonaecom was fully compliant with all the financial constraints above mentioned.
At 31 December 2014 and 2013, the obligations to credit institutions (nominal values) related with medium and long-term loans and its interests are repayable as follows (values based on the latest interest rate established for each type of loan):
| Within 12 | Between 12 and | Between 24 and | Between 36 and | Between 48 and | Between 60 and | |
|---|---|---|---|---|---|---|
| months | 24 months | 36 months | 48 months | 60 months | 72 months | |
| 2014 | ||||||
| Other loans S21GES: | ||||||
| Reimbursements | - | - | 185,913 | 874,779 | 865,083 | 1,822,129 |
| Interests | 115,902 | 112,809 | 131,734 | 166,717 | 123,119 | 116,829 |
| 115,902 | 112,809 | 317,647 | 1,041,496 | 988,202 | 1,938,958 | |
| 2013 | ||||||
| Bond loan: | ||||||
| Reimbursements | - | - | 20,000,000 | - | - | - |
| Interests | 980,278 | 980,278 | 424,318 | - | - | - |
| Other loans WeDo USA: | ||||||
| Reimbursements | - | 988,786 | 988,786 | 988,786 | 988,786 | 494,394 |
| Interests | 134,394 | 108,363 | 82,549 | 56,231 | 30,273 | 4,242 |
| 1,114,672 | 2,077,427 | 21,495,653 | 1,045,017 | 1,019,059 | 498,636 |
Minority Shareholder loans have no maturity defined.
At 31 December 2014 and 2013, the available bank credit lines of the Group were as follows:
| Maturity | ||||||
|---|---|---|---|---|---|---|
| Amount | More than 12 | |||||
| Company | Credit | Limit | outstanding | Amount available | Until 12 months | months |
| 2014 | ||||||
| Sonaecom | Authorised overdrafts | 1,000,000 | - | 1,000,000 | x | |
| S21 Sec Gestion | Overdraft facilities | 200,000 | 199,912 | 88 | x | |
| S21 Sec Gestion | Overdraft facilities | 150,000 | 111,033 | 38,967 | x | |
| S21 Sec Gestion | Overdraft facilities | 150,000 | 150,057 | - | x | |
| S21 Sec Gestion | Overdraft facilities | 125,457 | - | 125,457 | x | |
| S21 Sec Gestion | Overdraft facilities | 100,000 | 99,815 | 185 | x | |
| S21 Sec Gestion | Overdraft facilities | 30,191 | - | 30,191 | x | |
| S21 Sec Gestion | Bank loan | 1,229,223 | 1,229,223 | - | x | |
| S21 Sec Gestion | Bank loan | 600,919 | 600,919 | - | x | |
| S21 Sec Gestion | Bank loan | 573,839 | 573,839 | - | x | |
| S21 Sec Gestion | Bank loan | 547,000 | 547,000 | - | x | |
| S21 Sec Gestion | Bank loan | 309,000 | 309,000 | - | x | |
| S21 Sec Gestion | Bank loan | 296,000 | 296,000 | - | x | |
| S21 Sec Gestion | Bank loan | 192,000 | 192,000 | - | x | |
| Others | Several | - | 196,082 | - | x | |
| 5,503,629 | 4,504,880 | 1,194,888 | ||||
| 2013 | ||||||
| Sonaecom | Bond loan | 20,000,000 | 20,000,000 | - | x | |
| Sonaecom | Commercial paper | 15,000,000 | - | 15,000,000 | x | |
| Sonaecom | Authorised overdrafts | 1,000,000 | - | 1,000,000 | x | |
| WeDo USA | Bank loan | 5,438,326 | 5,438,326 | - | x | x |
| Others | Several | - | 10,208 | - | x | |
| 41,438,326 | 25,448,534 | 16,000,000 |
At 31 December 2014 and 2013, there are no interest rate hedging instruments therefore the total gross debit is exposed to changes in market interest rates.
Based on the debt exposed to variable rates at the end of 2014, including the debt on finance lease, and considering the applications and bank balances at the same date, if market interest rates has rised (fallen), in average, 75bp during the year 2014, the interest paid that year would be decreased (increased) in an amount of approximately Euro 1,200,000.
At 31 December 2014 and 2013, this caption was made up of accounts payable to tangible and intangible assets suppliers related to lease contracts which are due in more than one year in the amount of Euro 480,274 and Euro 67,937, respectively.
At 31 December 2014 and 2013, the payment of these amounts was due as follows:
| 2014 | 2013 | |||
|---|---|---|---|---|
| Present value of | Present value of | |||
| Lease payments | lease payments | Lease payments | lease payments | |
| 2014 | - | - | 76,294 | 70,728 |
| 2015 | 322,845 | 285,904 | 41,332 | 38,286 |
| 2016 | 269,054 | 249,949 | 26,142 | 25,040 |
| 2017 | 228,987 | 221,858 | 4,682 | 4,612 |
| 2018 | 8,549 | 8,467 | - | - |
| 829,435 | 766,178 | 148,450 | 138,665 | |
| Interests | (63,258) | - | (9,784) | - |
| 766,177 | 766,178 | 138,666 | 138,665 | |
| Short-term liability (note 25) | - | (285,904) | - | (70,728) |
| 766,177 | 480,274 | 138,666 | 67,937 |
The movements in provisions and in accumulated impairment losses in the years ended at 31 December 2014 and 2013 were as follows:
| Opening balance |
Companies included in the consolidation perimeter (Note 3.a)) |
Increases | Decreases | Utilisations and Transfers |
Discontinued units (Notes 3.d and 3.e) |
Closing balance |
|---|---|---|---|---|---|---|
| 3,999,525 | 500,020 | 68,383 | (209,538) | (407,060) | (137,277) | 3,814,053 |
| 25,000 | - | - | - | - | - | 25,000 |
| 3,060,986 | 273,266 | 530,090 | (229,160) | (739,871) | (315,990) | 2,579,321 |
| 7,085,511 | 773,286 | 598,473 | (438,698) | (1,146,931) | (453,267) | 6,418,374 |
| 82,895,444 | - | 18,801,662 | (5,504,235) | (19,030,746) | (73,162,600) | 3,999,525 |
| 4,377,789 | - | 466,664 | (1,995,000) | (520,824) | (2,303,629) | 25,000 |
| 43,673,340 | - | 4,257,934 | (5,753,550) | (3,868,767) | (35,247,971) | 3,060,986 |
| 130,946,573 | - | 23,526,260 | (13,252,785) | (23,420,337) | (110,714,200) | 7,085,511 |
Reinforcements and reductions values of the accumulated impairment losses on receivable accounts and provisions for liabilities and charges, at 31 December 2014 and 2013, are detailed as follows:
| Accumulated impairment losses on accounts receivables | Increases | Decreases | Increases | Decreases |
|---|---|---|---|---|
| Continuing unitis - registed in the line 'Provisions and accumulated impairment losses' (increases) and in 'Other operating costs' (decreases) (note 29) |
25,972 | (209,538) | 1,108,347 | (174,361) |
| Discontinued unitis (note37) | 42,411 | - | 17,693,315 | (5,329,874) |
| Total increases/(decreases) of accumulated impairment losses on accounts receivables | 68,383 | (209,538) | 18,801,662 | (5,504,235) |
| Provisions for other liabilities and charges | Increases | Decreases | Increases | Decreases |
| Recorded in the income statement, under the caption 'Income Tax ' (note 33) | 395,159 | (166,673) | 946,897 | (1,222,647) |
| Recorded in 'Fixed Assets' regard to the provision for dismantling and abandonment of offices | ||||
| net value recorded in 'Other financial expenses' related to the financial actualization of the | 67,291 | (4,573) | 518,932 | - |
| provision for dismantling as foreseen in IAS 16 - 'Fixed Assets' (Note 1.c)) | ||||
| Recorded in the income statement 'Gains and losses of associates and jointly controlled | ||||
| entities' related to the registration of the provision resulting from the application of the equity method (Note 8) |
97,693 | - | 44,245 | - |
| Recorded in reserves related to the registration of the provision resulting from the application of the equity method (Note 8) |
(35,005) | - | - | - |
| Other increses and decreases - recorded in 'Provisions and impairment losses' (increases) and in 'Other operating revenue' (decreases) (note 29) |
- | (57,914) | 600,363 | (401,094) |
| Total continuing operations | 525,138 | (229,160) | 2,110,437 | (1,623,741) |
| Discontinued operations | 4,952 | - | 2,147,497 | (4,129,809) |
| Total increases/(decreases) of provisions for other liabilities and charges | 530,090 | (229,160) | 4,257,934 | (5,753,550) |
| Result of the Mainroad sold (restatement of balances) | - | - | (74,096) | 66,887 |
| Total recorded in the income statement in 'Provisions and impairment losses' (increases) | ||||
| and in 'Other operating revenue' (decreases) (note 29) | 25,972 | (267,452) | 1,634,614 | (508,568) |
At 31 December 2014 and 2013, the breakdown of the provisions for other liabilities and charges is as follows:
| 2014 | 2013 | |
|---|---|---|
| Several contingencies | 1,803,847 | 1,781,800 |
| Legal processes in progress | 131,761 | 199,151 |
| Dismantling | 48,497 | 242,073 |
| Other responsibilities | 595,216 | 837,962 |
| 2,579,321 | 3,060,986 |
At 31 December 2014, the value of provisions for the dismantling is recorded at its present value, accordingly with the dates of its utilization (in accordance with IAS 37
and for which an outflow of funds is probable.
In relation to the provisions recorded for legal processes in progress and others, given the uncertainty of such proceedings, the Board of Directors is unable to estimate, with reliability, the moment when such provisions will be used and therefore no financial actualisation was carried out.
-
| 2014 | 2013 | |
|---|---|---|
| Medium Term Incentive Plan (note 39) | 871,397 | 307,870 |
| Others | 203,812 | 969,434 |
| 1,075,209 | 1,277,304 |
paid under the acquisition of Connectiv (note 7).
At 31 December 2014 and 2013, this caption had the following composition and maturity plans:
| Total | Till 90 days | From 90 to 180 days | More than 180 days | |
|---|---|---|---|---|
| 2014 | ||||
| 18,735,676 | 18,735,676 | - | - | |
| Intangible and tangible assets suppliers | 421,218 | 421,218 | - | - |
| 2,408,795 | 2,408,795 | - | - | |
| 21,565,689 | 21,565,689 | - | - | |
| 2013 | ||||
| 17,159,275 | 17,159,275 | - | - | |
| Intangible and tangible assets suppliers | 1,281,412 | 1,281,412 | - | - |
| 3,327,592 | 3,327,592 | - | - | |
| 21,768,279 | 21,768,279 | - | - |
he acquisition of intangible and tangible assets. The Board of Directors believes that the difference between the fair value of these balances and its book value is not significant.
At 31 December 2014, this caption includes the amount of Euro 285,904 (2013: Euro 70,728) related to the short term portion of lease contracts (note 21).
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| State and other public entities | 5,408,938 | 4,285,787 |
| Other creditors | 1,238,426 | 6,153,540 |
| 6,647,364 | 10,439,327 |
id to Optimus SA, Be Artis and Be Towering in relation to the termination of MTIP contract (note 34).
The liability to other creditors matures as follows:
| Total | Till 90 days | From 90 to 180 days | More than 180 days | |
|---|---|---|---|---|
| 2014 | ||||
| Other creditors | 1,238,426 | 1,238,426 | ||
| 2013 | ||||
| Other creditors | 6,153,540 | 6,153,540 |
The liability to other creditors does not incorporate any interest. The Board of Directors believes that the difference between the fair value of these balances and its book value is not significant.
At 31 December 2014 Tax, Corporate Income Tax, Social Security contributions and withholdings of Personal Income Tax) from the following subsidiaries:
| 2014 | 2013 | |
|---|---|---|
| Sonaecom | 2,261,864 | 1,306,526 |
| WeDo | 769,925 | 661,317 |
| WeDo Brasil | 569,907 | 404,056 |
| S21 Sec Gestion | 499,937 | - |
| Público | 402,604 | 389,492 |
| Saphety | 176,185 | 125,185 |
| Sonaecom SP | 74,718 | 86,568 |
| Digitmarket | 63,564 | 798,710 |
| Others | 590,234 | 513,933 |
| 5,408,938 | 4,285,787 |
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Costs: | ||
| Personnel costs | 11,961,118 | 12,145,020 |
| Advertising and promotion | 780,904 | 474,495 |
| Medium Term Incentive Plans (note 39) | 1,263,646 | 284,788 |
| Rappel discounts (annual quantity discounts) | 60,459 | 68,810 |
| Specialised works | 571,071 | 211,278 |
| Rents | 190,711 | 29,933 |
| Tangible and intangible assets | 106,877 | 16,273 |
| Stocks | 1,375,723 | 70,231 |
| Other costs | 1,694,198 | 3,446,326 |
| Other external suppliers and services | 2,135,992 | 2,761,354 |
| 20,140,699 | 19,508,508 | |
| Deferred income: | ||
| Customer advance payments (note 15) | 7,442,073 | 7,576,081 |
| Other deferred income | 703,990 | 622,871 |
| 8,146,063 | 8,198,952 | |
| 28,286,762 | 27,707,460 | |
| 2014 | 2013 (restated -note 1) |
|
|---|---|---|
| Information Systems | 105,902,042 | 93,953,709 |
| Multimedia and others | 15,814,624 | 10,812,034 |
| 121,716,666 | 104,765,743 |
At 31
| 2014 | 2013 (restated - note 1) |
|
|---|---|---|
| Supplementary income | 676,992 | 632,433 |
| Reversal of provisions (note 22) | 267,452 | 508,568 |
| Others | 1,817,150 | 2,182,217 |
| 2,761,594 | 3,323,218 |
0 in 2014 and Euro 376,660 in 2013) (Note 7).
| 2014 | 2013 (restated - Note 1) |
|
|---|---|---|
| Subcontracts | 19,393,642 | 17,717,153 |
| Specialised works | 5,482,365 | 4,228,950 |
| Travelling costs | 4,583,883 | 4,493,886 |
| Rents | 4,396,333 | 4,239,686 |
| Advertising and promotion | 2,860,738 | 3,147,205 |
| Fees | 1,239,156 | 1,233,990 |
| Communications | 1,196,748 | 669,307 |
| Commissions | 591,979 | 393,871 |
| Energy | 288,275 | 236,941 |
| Maintenance and repairs | 182,381 | 51,019 |
| Security | 120,181 | 4,513 |
| Others | 1,517,646 | 1,105,936 |
| 41,853,327 | 37,522,457 |
The commitments assumed by the Group at 31 December 2014 and 2013 related to operational leases are as follows:
| 2014 | 2013 (restated - note 1) |
|
|---|---|---|
| Minimum payments of operational leases: | ||
| 2014 | - | 2,735,954 |
| 2015 | 3,350,003 | 2,417,945 |
| 2016 | 2,645,460 | 2,024,927 |
| 2017 | 2,233,519 | 1,510,981 |
| 2018 | 1,482,594 | 1,129,834 |
| 2019 onwards | 154,742 | 84,334 |
| Renewable by periods of one year | 896,394 | 338,280 |
| 10,762,712 | 10,242,255 |
During the year ended at 31 December 2014, an amount of Euro 4,156,750 (Euro 3,606,535 in 31 December 2013) was recorded in the heading
| 2014 | 2013 (restated - note 1) |
|
|---|---|---|
| Taxes | 132,951 | 135,163 |
| Others | 187,287 | 141,883 |
| 320,238 | 277,046 |
Net financial results for the years ended at 31 December 2014 and 2013 were made up as follows ((costs) / gains):
| 2014 | 2013 (restated - Note 1) |
|
|---|---|---|
| Financial results of associates and jointly controlled companies: | ||
| Gains and losses related with the aplication of the equity method (Note 8) | 15,742,802 | (490,365) |
| 15,742,802 | (490,365) | |
| Gains and losses on financial assets at fair value through profit or loss: | ||
| Gains and losses on financial assets at fair value through profit or loss (Note 9) | (3,296,955) | 46,636,719 |
| Dividends obtained | 1,321,504 | - |
| (1,975,451) | 46,636,719 | |
| Financial expenses: | ||
| Interest expenses: | (1,051,727) | (10,505,468) |
| Bank loans | (752,901) | (9,900,712) |
| Leasing | (32,631) | (5,851) |
| Other interests | (266,195) | (598,905) |
| Foreign exchange losses | (820,005) | (850,930) |
| Other financial expenses | (533,180) | (634,440) |
| (2,404,912) | (11,990,838) | |
| Financial income: | ||
| Interest income | 1,958,554 | 7,422,162 |
| Foreign exchange gains | 837,162 | 537,553 |
| Others financial gains | 163,308 | 16,484 |
| 2,959,024 | 7,976,199 |
sts earned on treasury applications. At 31 December 2013, this caption includes also the amount of Euro 4,674,111 received from Unitel, following the disposal of the shareholder loans to be received from Zopt to this entity (note 8).
Income taxes recognised during the years ended at 31 December 2014 and 2013 were made up as follows ((costs) / gains):
| 2014 | 2013 (restated - Note 1) |
|
|---|---|---|
| Current tax | (1,249,969) | (3,293,294) |
| Tax provision net of reduction (note 22) | (228,486) | 275,750 |
| Deferred tax assets (note 11) | 699,695 | (795,415) |
| Deferred tax liabilities (note 11) | 88,971 | 189 |
| (689,789) | (3,812,770) |
During the years ended at 31 December 2014 and 2013, the balances and transactions maintained with related parties were mainly associated with the normal operational activity of the Group and to the concession and obtainment of loans.
The most significant balances and transactions with related parties, which are listed in the appendix to this report, during the years ended at 31 December 2014 and 2013 were as follows:
| Balances at 31 December 2014 | |||
|---|---|---|---|
| Accounts receivable (notes 13 and 14) |
Accounts payable (note 24) |
Other assets / (liabilities) (notes 15, 23 and 27) |
|
| Holding company | |||
| Sonae SGPS | (181,442) | 49,132 | 183,592 |
| Other related companies | |||
| Be Artis | 722,921 | 46,385 | (2,749,104) |
| Modelo Continente Hipermercados, S.A. | 398,309 | 119,292 | (588,978) |
| NOS Comunicações | 1,613,720 | 244,376 | 221,358 |
| Nos SGPS | 45,651 | - | - |
| Raso Viagens | 7,648 | 288,641 | (10,894) |
| SC-Sociedade de Consultadoria | 376,031 | - | (213,731) |
| Sierra Portugal | 380,961 | 928 | 275,419 |
| Sonae Indústria PCDM | 9,709 | - | - |
| Sonaecenter II | 1,206,884 | 506,906 | (907,181) |
| Mainroad | 224,098 | 217,844 | (782) |
| Worten | 55,166 | (1,485) | - |
| 4,859,656 | 1,472,019 | (3,790,301) |
| Balances at 31 December 2013 | |||
|---|---|---|---|
| Accounts receivable (notes 13 and 14) |
Accounts payable (note 24) |
Other assets / (liabilities) (notes 15, 23 and 27) |
|
| Holding company | |||
| Sonae SGPS | 49,924 | - | (31,198) |
| Other related companies | |||
| Be Artis | 1,939,686 | 2,963,167 | (391,071) |
| Modelo Continente Hipermercados, S.A. | 325,466 | 61,513 | (292,299) |
| NOS Comunicações | 1,264,110 | 3,681,010 | (51,959) |
| Raso Viagens | 20,039 | 322,234 | (8,227) |
| SC-Sociedade de Consultadoria | 351,089 | - | (173,685) |
| Sierra Portugal | 553,453 | 3,811 | 295,038 |
| Sonae Indústria PCDM | 142,558 | - | - |
| Sonae Investments BV | - | - | - |
| Sonaecenter II | 1,649,702 | 106,217 | (697,310) |
| Worten | 33,210 | (867) | - |
| Nos SGPS | 10,203,626 | - | (1,943,340) |
| 16,532,863 | 7,137,085 | (3,294,051) |
| Transactions at 31 December 2014 | |||||
|---|---|---|---|---|---|
| Sales and services rendered (note 28) |
Supplies and services received (note 30) |
Interest and similar income / (expense) (note 32) |
Supplementary income (note 29) |
||
| Holding company | |||||
| Sonae SGPS | 1,810 | 49,229 | 1,563,161 | - | |
| Other related companies | |||||
| Be Artis | 7,769,762 | 1,341 | - | (41) | |
| MDS | 395,689 | 30,018 | - | - | |
| Modelo Continente Hipermercados, S.A. | 916,072 | 305,255 | - | 19,418 | |
| Nos SGPS | 170 | (7,936) | 1,329 | - | |
| Raso Viagens | 179,150 | 1,430,082 | - | - | |
| SC-Sociedade de Consultadoria | 1,646,715 | - | - | - | |
| Sierra Portugal | 4,262,300 | 10,363 | - | - | |
| Sonae Indústria PCDM | 709,750 | - | - | - | |
| Sonaecenter II | 13,845,628 | 427,603 | - | - | |
| Unipress | 80,435 | 546,417 | - | 135,000 | |
| Worten | 246,972 | 710 | - | - | |
| 30,054,453 | 2,793,082 | 1,564,490 | 154,377 |
| Transactions at 31 December 2013 | ||||||
|---|---|---|---|---|---|---|
| Sales and services | Supplies and | Interest and similar | Supplementary | |||
| rendered | services received | income / (expense) | income | |||
| (note 28) | (note 30) | (note 32) | (note 29) | |||
| Holding company | ||||||
| Sonae SGPS Subsidiaries |
212 | 48,600 | 685,345 | - | ||
| Infosystems | 129,948 | 165,012 | - | (266,424) | ||
| Unipress | 196,192 | 582,202 | - | 57,000 | ||
| Other related companies Be Artis MDS |
3,728,001 595,298 |
290,298 1,122 |
- - |
28,800 - |
||
| Modelo Continente Hipermercados, S.A. | 835,657 | 347,542 | - | 144,948 | ||
| NOS Comunicações | 1,089,183 | 1,035,463 | - | 40,185 | ||
| Raso Viagens | 136,223 | 1,368,354 | - | 10,151 | ||
| SC-Sociedade de Consultadoria | 1,332,782 | - | - | - | ||
| Sierra Portugal | 5,370,033 | 16,294 | - | - | ||
| Sonae Indústria PCDM | 1,056,895 | - | - | - | ||
| Sonae Investments BV | - | - | 6,606 | - | ||
| Sonaecenter II | 8,266,354 | 685,977 | - | - | ||
| Nos SGPS | - | (526,753) | 17,520,021 | - | ||
| 22,606,830 | 3,849,099 | 18,211,972 | 281,084 |
During 2012, the Group signed an agreement with Sonae SGPS, under which Sonae compromise to transfer to employees and board members of Sonaecom, Sonaecom SGPS shares, at the price of Euro 1.184, until 2016, as requested by Sonaecom and under the MTIP of Sonaecom. Under this contract, Sonaecom paid in advance to Sonae SGPS, SA the amount of Euro 3,291,520.
During 2013, Sonaecom partially anticipated the maturity of the contract, receiving the amount of Euro 4,444,207. At 11 July 2014 the company terminated this contract so, Sonae SGPS, SA repaid the remaining amount in debt.
The transactions between Group companies were eliminated in consolidation, and therefore are not disclosed in this note.
All the above transactions were made at market prices.
Accounts receivable and payable to related companies will be settled in cash and are not covered by guarantees. During the years ended at 31 December 2014 and 2013, no impairment losses referring to account receivables from related parties were recognised.
o this report.
Guarantees provided to third parties at 31 December 2014 and 2013 were as follows:
| Company | Beneficiary | Description | 2014 | 2013 |
|---|---|---|---|---|
| We Do, WeDo Egypt and S21 Sec Gestion | Digi Tecommunications; Emirates Telecom. Corp.; Group Etisalat; Scotia Leasing Panama; Viva Bahrain; Zain Jordan; TT dotCom Snd Bhd; Empresa de Telecominicaciones; Sociedad Estatal de Correos y Telegrafos and Asiacell Communicationes |
Completion of work to be done | 1,346,265 | 1,101,201 |
| Sonaecom | Direção de Contribuições e Impostos (Portuguese tax authorities) |
VAT Reimbursements | 1,435,379 | 5,955,731 |
| S21 Sec Gestion, S21 Sec Labs and Lookwise |
Centro para Desarrollo Tecnolo; Ministerio de Indústria and Ingenieria de sistemas para la Defensa de España, S.A. |
Grants | 1,264,330 | - |
| We Do and Saphety | IAPMEI | QREN projects | 334,299 | 392,707 |
| Sonaecom and Público | Direção de Contribuições e Impostos and Autoridade Tributária e Aduaneira (Portuguese tax authorities) |
240,622 | 2,714,853 | |
| WeDo | Caixa Geral de Depósitos | Bank loan (note 20) | - | 5,534,407 |
| Several | Others | 439,548 | 336,175 | |
| 5,060,443 | 16,035,074 |
In addition to these guarantees were set up sureties for the current fiscal processes. The Sonae SGPS consisted of Sonaecom SGPS surety to the amount of Euro 6,540,647 and Sonaecom SGPS consisted of NOS Comunicações surety for the amount of Euro 10,502,945, and of Público for the amount of Euro 565,026.
At 31 December 2014, the Board of Directors of the Group believes that the decision of the court proceedings and ongoing tax assessments in progress will not have significant impacts on the consolidated financial statements.
Following the classification of the Telecomunications segment as a discontinued operation (note 3.e), were identified for the years ended at 31 December 2014 and 2013 the following business segments:
These segments were identified taking into consideration the following criteria/conditions: the fact of being group units that develop activities where we can separately identify revenues and expenses, for which financial information is separately developed and their operating results are regularly reviewed by management and over which decisions are made. For example, decisions about allocation ofresources, for having similar products/services and also taking into consideration the quantitative threshold (in accordance with IFRS 7).
The segm areholdings.
Excluding the ones mentioned above, the remaining activities of the Group have been classified as unallocated.
Inter-segment transactions during the years ended at 31 December 2014 and 2013 were eliminated in the consolidation process. All these transactions were made at market prices.
Inter-segment transfers or transactions were entered under the normal commercial terms and conditions that would also be available to unrelated third parties and were mainly related to interest on treasury applications and management fees.
In the period ended at 31 December 2014, in result of the Mainroad sold (Note 3.d)), this was classified, for presentations effects, as a discontinued operation. As set forth by IFRS 5, changes were made in the consolidated profit and loss statements for the period ended at 31 December 2013, in order to disclose a single amount in profit and loss statements related to net income/(loss) of discontinued operations (note 37).
Overall information by business segment at 31 December 2014 and 2013, prepared in accordance with the same accounting policies and measurement criteria adopted in the preparation of the consolidated financial statements, can be summarised as follows:
| Multimedia | Information Systems | Holding Activities | Subtotal | Eliminations and others | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 2014 December 2013 December 2014 | December 2013 December 2014 December 2013 December 2014 | December 2013 | December 2014 December 2013 | December 2014 | December 2013 | |||||||
| Revenues: | ||||||||||||
| Sales and services rendered | 15,895,582 | 18,764,151 | 105,902,042 | 93,953,709 | 303,482 | 2,627,835 | 122,101,106 | 115,345,695 | (384,440) | (10,579,952) | 121,716,666 | 104,765,743 |
| Reversal of provisions | 176,714 | 264,495 | 63,601 | 243,367 | 27,137 | 706 | 267,452 | 508,568 | - | - | 267,452 | 508,568 |
| Other operating revenues | 637,133 | 502,453 | 1,782,820 | 2,591,407 | 153,203 | 113,177 | 2,573,156 | 3,207,037 | (79,014) | (392,387) | 2,494,142 | 2,814,650 |
| Total revenues | 16,709,429 | 19,531,099 | 107,748,463 | 96,788,483 | 483,822 | 2,741,718 | 124,941,714 | 119,061,300 | (463,454) | (10,972,339) | 124,478,260 | 108,088,961 |
| Depreciation and amortisation | (512,093) | (917,499) | (6,584,033) | (4,430,302) | (15,779) | (65,561) | (7,111,905) | (5,413,362) | (30,482) | (552,683) | (7,142,387) | (5,966,045) |
| Provisions and impairment losses | (19,388) | - | (6,584) | (1,537,845) | - | (96,769) | (25,972) | (1,634,614) | - | - | (25,972) | (1,634,614) |
| Net operating income / (loss) for the segment | (2,686,383) | (2,193,158) | 5,080,280 | 8,005,874 | (2,101,049) | (1,881,454) | 292,848 | 3,931,262 | 47,391 | (4,648,694) | 340,239 | (717,432) |
| Interest income | 4,009 | 29,877 | 141,604 | 446,773 | 3,206,328 | 24,475,792 | 3,351,941 | 24,952,442 | (1,393,387) | (17,530,280) | 1,958,554 | 7,422,162 |
| Interest expenses | (540,130) | (458,690) | (1,315,473) | (1,091,876) | (562,201) | (10,397,251) | (2,417,804) | (11,947,817) | 1,366,076 | 1,442,349 | (1,051,728) | (10,505,468) |
| Gains and losses in associated companies and companies jointly controlled |
(1,698) | - | (64,955) | - | 15,809,455 | (167,099,143) | 15,742,802 | (167,099,143) | - | 166,608,778 | 15,742,802 | (490,365) |
| Gains and losses on financial assets at fair | (1,975,451) | 46,636,719 | (1,975,451) | 46,636,719 | (1,975,451) | 46,636,719 | ||||||
| value through profit or loss | - | - | - | - | - | - | ||||||
| Other financial results | (470) | (127,680) | (226,780) | (498,627) | 1,450,287 | 19,609,992 | 1,223,037 | 18,983,685 | (1,575,751) | (19,915,018) | (352,714) | (931,333) |
| Income taxation | 919,868 | 634,284 | (2,041,404) | (2,946,728) | 438,714 | (1,508,562) | (682,821) | (3,821,006) | (6,968) | 8,236 | (689,789) | (3,812,770) |
| Consolidated net income/(loss) for the period | ||||||||||||
| excluding discontinued operations | (2,304,804) | (2,115,367) | 1,573,272 | 3,915,416 | 16,266,084 | (90,163,907) | 15,534,552 | (88,363,858) | (1,562,639) | 125,965,371 | 13,971,913 | 37,601,513 |
| Consolidated net income/(loss) for the period of discontinued operations |
- | - | 6,074,196 | 1,147,211 | - | - | 6,074,196 | 1,147,211 | 7,051,470 | 65,017,723 | 13,125,666 | 66,164,934 |
| Attributable to: | ||||||||||||
| Shareholders of parent company | (2,304,804) | (2,115,367) | 8,485,626 | 5,130,163 | 16,787,958 | (90,113,407) | 22,968,780 | (87,098,611) | 4,989,449 | 190,937,090 | 27,958,229 | 103,838,479 |
| Non-controlling interests | - | - | (838,158) | (67,536) | - | - | (838,158) | (67,536) | (22,492) | (4,496) | (860,650) | (72,032) |
| Assets: | ||||||||||||
| Tangible and intangible assets and goodwill | 971,400 | 3,987,720 | 76,946,687 | 78,022,279 | 44,757 | 59,802 | 77,962,844 | 82,069,801 | (20,965,413) | (31,458,027) | 56,997,431 | 50,611,774 |
| Inventories | 316,038 | 441,970 | 761,420 | 150,670 | - | - | 1,077,458 | 592,640 | 0 - 39,115 |
1,077,458 | 553,525 | |
| Financial investments | 914,645 | 112,954 | 10,320 | 878,981 | 659,753,394 | 648,107,486 | 660,678,359 | 649,099,421 | 62,467,442 | 61,450,312 | 723,145,801 | 710,549,733 |
| Other non-current assets | 3,570 | 3,570 | 7,317,197 | 5,528,461 | 175,757,576 | 178,906,506 | 183,078,343 | 184,438,537 | (170,739,660) | (178,316,217) | 12,338,683 | 6,122,320 |
| Other current assets of the segment | 6,417,451 | 7,260,077 | 56,315,833 | 53,757,378 | 242,404,457 | 409,899,824 | 305,137,741 | 470,917,279 | (2,857,444) | (11,704,481) | 302,280,297 | 459,212,798 |
| Liabilities: | ||||||||||||
| Liabilities of the segment | 13,175,550 | 15,777,829 | 74,665,129 | 72,566,030 | 5,751,364 | 37,284,768 | 93,592,043 | 125,628,627 | (21,632,084) | (35,338,009) | 71,959,959 | 90,290,618 |
| CAPEX | 582,710 | 974,574 | 6,007,870 | 6,834,698 | 12,923,078 | 15,285,975 | 19,513,658 | 23,095,247 | (7,057,560) | (15,237,182) | 12,456,098 | 7,858,065 |
During the years ended at 31 December 2014 and 2013, the inter-segments sales and services were as follows:
| Multimedia | Information Systems |
Holding Activities | |
|---|---|---|---|
| 2014 | |||
| Multimedia | - | 134,310 | - |
| Information Systems | 294 | - | - |
| Holding Activities | - | 40,797 | 303,482 |
| External trade debtors | 15,895,288 | 105,726,935 | - |
| 15,895,582 | 105,902,042 | 303,482 | |
| 2013 (restated - note 1) | |||
| Telecommunications | 46,858 | 4,710,974 | 2,077,959 |
| Multimedia | - | 48,024 | 105,610 |
| Information Systems | 294 | - | 215,928 |
| Holding Activities | 2,400 | 5,687 | - |
| External trade debtors | 18,714,599 | 89,189,024 | 72,440 |
| 18,764,151 | 93,953,709 | 2,471,937 |
During the years ended at 31 December 2014 and 2013, sales and services rendered of the segments of Multimedia and Activities Holding were obtained predominantly in the Portuguese market, this market represents more than 90% of revenue.
During the year ended at 31 December 2014, for the Information Systems segment, also the Portuguese market is dominant, accounting for 40.9% of revenue (54.1% in 2012) followed by the Brazilian and American markets, representing 7.6% and 5.3% of revenue (7.4% and 6.8% in 2013), respectively.
The financial statements of NOS at 31 December 2014 and 2013 incorporated in the consolidated financial statements of Sonaecom through ZOPT by the equity method (Notes 3.e and 8), can be summarized as follows:
| (Amounts expressed in thousands of Euro) | December 2014 | December 2013 (restated) |
|---|---|---|
| Assets | ||
| Tangible assets | 1,141,770 | 1,096,823 |
| Intangible assets | 1,164,207 | 1,160,599 |
| Deferred tax assets | 141,115 | 156,467 |
| Other non-current assets | 40,872 | 61,143 |
| Non-current assets | 2,487,964 | 2,475,032 |
| Trade debtors | 331,527 | 276,630 |
| Cash and cash equivalents | 21,070 | 74,380 |
| Other current assets | 115,371 | 103,831 |
| Current assets | 467,968 | 454,841 |
| Total assets | 2,955,931 | 2,929,873 |
| Liabilities | ||
| 616,526 | 928,239 | |
| Provisions for other liabilities and charges | 127,221 | 132,972 |
| Other non-current liabilities | 50,074 | 46,221 |
| Non-current liabilities | 793,821 | 1,107,432 |
| Short-term loans and other loans | 503,508 | 213,431 |
| Trade creditors | 317,036 | 296,823 |
| Other current liabilities | 281,436 | 251,974 |
| Current liabilities | 1,101,980 | 762,228 |
| Total liabilities | 1,895,801 | 1,869,660 |
| 1,050,311 | 1,050,598 | |
| Non-controlling interests | 9,818 | 9,615 |
| 1,060,129 | 1,060,213 | |
| 2,955,931 | 2,929,873 |
| December 2014 | December 2013 (restated) |
|---|---|
| 1,383,934 | 990,259 |
| (595,558) | (413,817) |
| (339,294) | (243,070) |
| (301,681) | (254,869) |
| (1,236,533) | (911,756) |
| (55,142) | (50,811) |
| (17,179) | (16,433) |
| 75,080 | 11,259 |
| 369 | 449 |
| 74,711 | 10,810 |
The net income (loss) for the year of discontinued operations are detailed as follows:
| 31 December 2013 | |
|---|---|
| (restated - note 1) | |
| - | 18,822,654 |
| 11,100,105 | 452,293,041 |
| 136,924 | 6,197,740 |
| 11,237,029 | 477,313,435 |
| - | (21,479,154) |
| (6,432,024) | (236,026,089) |
| (3,604,114) | (35,391,222) |
| (516,185) | (94,023,562) |
| (42,411) | (8,926,890) |
| (4,436) | (9,729,670) |
| (10,599,170) | (405,576,587) |
| (10,649) | (2,100,206) |
| 1,391 | 2,698,636 |
| 628,601 | 72,335,278 |
| (118,201) | 2,779,321 |
| 510,400 | 75,114,599 |
| 12,615,266 | (8,949,665) |
| 13,125,666 | 66,164,934 |
| 31 December 2014 |
At 31 December 2013, the net income/ (loss) consists on net income generated by companies associated with the telecommunications segment until the date of merger of Optimus SGPS with ZON in the amount of Euro 75,193,885, the loss calculated with this operation in the amount of Euro 8,949,665 (note 3.e)), and also the net loss generated by Mainroad in the amount of Euro 79,286 (Notes 1 and 3.d)).
At 31 December 2014, the net income (loss) relates to the net income generated by Mainroad in the amount of Euro 510,400 and the gain from its sale in the amount of Euro 12,615,266 (Notes 1 and 3.d)).
Earnings per share, basic and diluted, are calculated by dividing the consolidated net income attributable to the Group (Euro 27,958,229 in 2014 and Euro 103,838,479 in 2013) by the average number of shares outstanding during the years ended at 31 December 2014 and 2013, net of own shares (Euro 314,920,162 in 2014 and 360,941,333 in 2013).
In June 2000, Sonaecom Group created a discretionary Medium Term Incentive Plan, for more senior employees, based on Sonaecom options and shares and Sonae-SGPS, S.A. shares. The vesting occurs three years after the award of each plan, assuming that the employees are still employed in the Group, during that period.
The Sonaecom plans outstanding at 31 December 2013 can be summarised as follows:
| Vesting period | 31 December 2013 | ||||
|---|---|---|---|---|---|
| Share price at award | Aggregate number | Number of | |||
| date* | Award date | Vesting date | of participations | shares | |
| Sonaecom shares | |||||
| 2010 Plan | 1.399 | 10-Mar-11 | 10-Mar-14 | 44 | 477,778 |
| 2011 Plan | 1.256 | 09-Mar-12 | 10-Mar-15 | 45 | 540,805 |
| 2012 Plan | 1.505 | 08-Mar-13 | 10-Mar-16 | 46 | 406,903 |
| Sonae SGPS shares | |||||
| 2010 Plan | 0.811 | 10-Mar-11 | 10-Mar-14 | 2 | 214,640 |
| 2011 Plan | 0.401 | 09-Mar-12 | 10-Mar-15 | 2 | 419,985 |
| 2012 Plan | 0.701 | 08-Mar-13 | 10-Mar-16 | 2 | 163,966 |
*Average share price in the month prior to the award date for Sonaecom shares and the lower of the average share price for the month prior to the Annual General Meeting and the share price on the day after the Annual General Meeting, for Sonae SGPS shares.
At 10 March 2014, Sonaecom shares plans were fully converted into Sonae SGPS shares. This conversion was based on the terms set out in Tender offer for the general and voluntary acquisition of own shares at 20 February 2014, referred to in Note 17 to determine the fair value of Sonaecom plans, and based on the price of shares Sonae SGPS.
The conversion of the plans was based Sonaecom / Sonae SGPS implied ratio arising from the tender offer (1 Sonaecom Share approximately 2.05 Sonae SGPS shares).
After conversion, at 10 March 2014, the converted plans can be detailed as follows:
| Vesting period | 10 March 2014 | ||||
|---|---|---|---|---|---|
| Share price at | Aggregate number | Number of | |||
| 20.02.2014* | Award date | Vesting date | of participations | shares | |
| Sonae SGPS shares ( Arising from the conversion of | |||||
| Sonaecom plans) | |||||
| 2010 Plan | 1.258 | 10-Mar-11 | 10-Mar-14 | 46 | 1,003,507 |
| 2011 Plan | 1.258 | 09-Mar-12 | 10-Mar-15 | 48 | 1,132,008 |
| 2012 Plan | 1.258 | 08-Mar-13 | 10-Mar-16 | 50 | 863,405 |
*Share price of the day of publication of the results of the Tender Offer
The 2010 plan was delivered in March 2014 for all companies except for Sonaecom SGPS, SA, whose delivery was in May 2014. Accordingly, the outstanding plans at 31 December 2014 are as follows:
| Vesting period | 31 December 2014 | ||||
|---|---|---|---|---|---|
| Share price at 31 December 2014/ Award date |
Award date | Vesting date | Aggregate number of participations |
Number of shares |
|
| Sonae SGPS shares (Arising from the conversion of | |||||
| Sonaecom plans) | |||||
| 2011 Plan | 1.024 | 09-Mar-12 | 10-Mar-15 | 22 | 757,414 |
| 2012 Plan | 1.024 | 08-Mar-13 | 10-Mar-16 | 24 | 554,543 |
| Sonae SGPS shares | |||||
| 2011 Plan | 0.401 | 09-Mar-12 | 10-Mar-15 | 2 | 431,413 |
| 2012 Plan | 0.701 | 08-Mar-13 | 10-Mar-16 | 2 | 168,427 |
| 2013 Plan | 1.024 | 10-Mar-14 | 10-Mar-17 | 190 | 1,652,013 |
The 2013 Plan includes 166 employees of WeDo Group following the adoption by these companies of the same medium term incentives plans that the rest of the group.
| Sonaecom shares | Sonae SGPS shares | ||||
|---|---|---|---|---|---|
| Aggregate number of participations |
Number of shares | Aggregate number of participations |
Number of shares | ||
| Outstanding at 31 December 2013: | |||||
| Unvested | 135 | 1,425,486 | 6 | 798,591 | |
| Total | 135 | 1,425,486 | 6 | 798,591 | |
| Movements in the year: | |||||
| Awarded | - | - | 219 | 1,776,375 | |
| Converted | (135) | (1,425,486) | 135 | 2,923,738 | |
| Vested | - | - | (48) | (1,218,147) | |
| Companies excluded from the consolidation perimeter (Note 3.d)) | - | - | (75) | (886,277) | |
| Cancelled / elapsed / corrected / transfers (1) | - | - | 3 | 169,530 | |
| Outstanding at 31 December 2014: | |||||
| Unvested | - | - | 240 | 3,563,810 | |
| Total | - | - | 240 | 3,563,810 |
(1) Corrections are made for dividends paid and changes to capital and other adjustments including those resulting from changes in the maturity of the MTIP, which may now be made through shares at a discount.
The responsibility of the plans was recognized under the caption 'Other current liabilities' and 'Other non-current liabilities'. Sonae SGPS shares plans (excluding the Sonaecom shares plans converted into Sonae SGPS shares plans), the group entered into hedging contracts with external entities, and the liabilities are calculated based on the agreed price. The contracts mentioned above can be summarized as follows:
| Sonae SGPS shares | ||||
|---|---|---|---|---|
| 2011 Plan | 2012 Plan | |||
| Notional value | 323,727 | 268,451 | 592,178 | |
| Maturity | Mar-15 | Mar-16 | ||
| Level of inputs in the hierarchy of fair value | Level 2 | |||
| Valuation method | Current replacement cost | |||
| Fair value* | 481,197 | 120,032 | 601,229 | |
* Used the share price of 31 December 2014 in the determination of the fair value.
In 11 July 2014 Sonaecom ceased the contract that has with Sonae SGPS, SA, for 2011 Plan in which it undertook to make the transfer of shares to employees Sonaecom SGPS group by indication Sonaecom and under the incentive plans medium term.
Share plans costs are recognised in the accounts over the year between the award and the vesting date of those shares. The costs recognised in previous years and in the period ended at 31 December 2014, were as follows:
| Sonaecom shares | Sonae SGPS shares |
NOS SGPS shares | Total | |
|---|---|---|---|---|
| Costs recognised in previous years | 29,602,457 | 4,310,802 | 279,519 | 34,192,778 |
| Costs recognised in the year | 167,711 | 761,580 | 10,473 | 939,764 |
| Companies excluded from the consolidation perimeter | - | (300,629) | - | (300,629) |
| Impact of conversion | (1,251,767) | 2,386,427 | - | 1,134,660 |
| Costs of plans vested in previous years | (28,518,401) | (4,047,509) | - | (32,565,910) |
| Costs of plans vested in the year | - | (1,503,198) | - | (1,503,198) |
| Total cost of the plans | - | 1,607,473 | 289,992 | 1,897,465 |
| Responsability of plans | - | 2,208,702 | 289,992 | 2,498,694 |
| Fair value of hedging contracts | - | (601,229) | - | (601,229) |
| Recorded in 'Cash ans cash equivalents' (1) | (194,530) | (43,048) | (237,578) | |
| Recorded in 'Other current liabilities' (note 27) | - | 1,100,226 | 163,420 | 1,263,646 |
| Recorded in 'Other non-current liabilities' (note 23) | - | 701,777 | 169,620 | 871,397 |
| Recorded in reserves | - | - | - | - |
(1) Sonaecom partially anticipated the maturity of the hedging contract with Sonae SGPS, which led to a refund for the current market value of Sonaecom shares.
At 10 March 2014, Sonaecom shares plans were fully converted into Sonae SGPS shares. This conversion was based on the terms of trade set out in the Tender Offer, at 20 February 2014, referred to in Note 17 to determine the fair value of the plans and, based on the share prices Sonae SGPS. Thus, the number of Sonae SGPS shares to be delivered to the company employees was determined. As set forth by IFRS 2, the responsibility of each plan over the period between the award date and the conversion date, amounted to Euro 2,317,853 was recognised under the caption 'Other current liabilities' and' Other non-current liabilities' with a corresponding entry in the equity.
In 27 August 2013, part of the Sonaecom and Sonae SGPS plans outstanding were converted to NOS plans. The conversion of the Sonaecom plans was made according to the merger ratio, but the conversion of Sonae SGPS plans was made according to the fair value of the shares. This decision was duly approved by the Board Nominations and Remunerations Committee. The cost of NOS plans was recognized until 30 September 2013, date on which NOS started to take responsibility for them. The responsibility of these plans was calculated based on share price of 30 September 2013 -
During 2014 and 2013, the remunerations paid to Directors and other members of key management in functions at the years ended 31 December 2014 and 2013 (19 managers in 2014 and 2013) were as follows:
| 2014 | 2013 | |
|---|---|---|
| Short-term employee benefits * | 1.586.101 | 1.716.252 |
| Share-based payments * | 366.317 | 462.820 |
| 1.952.418 | 2.179.072 |
*In 2013, remuneration for key management personnel transferred to NOS has not been considered, following the merger between Optimus SGPS and Zon.
The short-term employee benefits, which include the salary and performance bonus, were calculated on an accruals basis. The share-based payments for 2014 and 2013 correspond to the value of the Medium Term Incentive Plan and will be awarded in 2015, in respect of performance during 2014 (and the Medium Term Incentive Plan awarded in 2014 in respect of performance during 2013, for the 2013 amounts), whose shares, or the cash equivalent, will be delivered in March 2018 and March 2017, respectively. Full details on the Group remuneration policy are disclosed in the Corporate Governance Report.
In 2014 and 2013, the Group paid, in respect of fees, to the Statutory Auditor of the Group, Deloitte, and its network of companies, the following amounts:
| 2014 | 2013 | |
|---|---|---|
| Statutory audit | 115,663 | 110,974 |
| Other guarantee and reliability services | - | 10,000 |
| Tax Advice | - | 14,747 |
| Other consulting | 4,738 | 1,250 |
| Total | 120,401 | 136,971 |
During the years ended at 31 December 2014 and 2013, the companies included in the consolidation employed an average number of 1,139 and 912, respectively (excluding the companies included in discontinued operations). At 31 December 2014, the number of employees was 1,128.
These consolidated financial statements were approved by the Board of Directors on 2 March 2015.
These financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards (IAS / IFRS) as adopted by the European Union and the format and disclosures required by those Standards, some of which may not conform to or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.
| Key management personnel - Sonaecom | |||
|---|---|---|---|
| Ângelo Gabriel Ribeirinho dos Santos Paupério | Maria Cláudia Teixeira de Azevedo | ||
| António Bernardo Aranha da Gama Lobo Xavier | |||
| Key management personnel - Sonae SGPS | |||
|---|---|---|---|
| Álvaro Carmona e Costa Portela | Christine Cross | ||
| Álvaro Cuervo Garcia | Duarte Paulo Teixeira de Azevedo | ||
| Belmiro de Azevedo | José Manuel Neves Adelino | ||
| Bernd Hubert Joachim Bothe | Michel Marie Bon |
| Sonae/Efanor/NOS Group Companies | |||
|---|---|---|---|
| 3shoppings - Holding,SGPS, S.A | BIG Picture 2 Films | ||
| ADD Avaliações Eng. A.e Pericias, Ltda | Bloco Q-Sociedade Imobiliária,SA | ||
| Adlands B.V. | Bloco W-Sociedade Imobiliária,SA | ||
| Aegean Park,SA | BOM MOMENTO - Restauração, S.A. | ||
| Agepan Eiweiler Management GmbH | Canasta-Empreendimentos Imobiliários,SA | ||
| Agepan Tarket Laminate Park GmbH Co. KG | Cape Technologies Limited | ||
| Agloma Investimentos, Sgps, S.A. | Carnes do Continente-Ind.Distr.Carnes,SA | ||
| Agloma-Soc.Ind.Madeiras e Aglom.,SA | Carvemagere-Manut.e Energias Renov., Lda | ||
| Airone - Shopping Centre, Srl | Casa da Ribeira - Hotelaria e Turismo,SA | ||
| ALEXA Administration GmbH | Casa da Ribeira-Sociedade Imobiliária,SA | ||
| ALEXA Holding GmbH | Cascaishopping- Centro Comercial, S.A. | ||
| ALEXA Shopping Centre GmbH | Cascaishopping Holding I, SGPS, S.A. | ||
| Algarveshopping- Centro Comercial, S.A. | CCCB Caldas da Rainha-Centro Com., SA | ||
| Aqualuz - Turismo e Lazer, Lda | Centro Colombo- Centro Comercial, S.A. | ||
| Arat Inmuebles, S.A. | Centro Residencial da Maia,Urban.,SA | ||
| ARP Alverca Retail Park, SA | Centro Vasco da Gama-Centro Comercial,SA | ||
| Arrábidashopping- Centro Comercial, S.A. | Chão Verde-Soc.Gestora Imobiliária,SA | ||
| Aserraderos de Cuellar,SA | Cinclus Imobiliária,SA | ||
| Atelgen-Produção Energia, ACE | Citorres-Sociedade Imobiliária,SA | ||
| Atlantic Ferries-Tráf.Loc,Flu.e Marít,SA | Coimbrashopping- Centro Comercial, S.A. | ||
| Avenida M-40 B.V. | Colombo Towers Holding, BV | ||
| Azulino Imobiliária, S.A. | Companhia Térmica Hectare, ACE | ||
| BA Business Angels, SGPS, SA | Companhia Térmica Tagol, Lda. | ||
| BA Capital, SGPS | Contacto Concessões, SGPS, S.A. | ||
| BB Food Service, SA | Contibomba-Comérc.Distr.Combustiveis,SA | ||
| Be Artis-Conc.,Const.e Gest.Redes Com,SA | Contimobe-Imobil.Castelo Paiva,SA | ||
| Be Towering-Gestão de Torres de Telec,SA | Continente Hipermercados, S.A. | ||
| Beeskow Holzwerkstoffe | Country Club da Maia-Imobiliaria,SA | ||
| Beralands BV | Craiova Mall BV | ||
| Bertimóvel - Sociedade Imobiliária, S.A. | Cronosaúde - Gestão Hospitalar, S.A. |
| CTE-Central Termoeléct. do Estuário, Lda | Glunz Uka Gmbh |
|---|---|
| Cumulativa - Sociedade Imobiliária, S.A. | Golf Time-Golfe e Invest. Turísticos, SA |
| Darbo SAS | Guimarãeshopping- Centro Comercial, S.A. |
| Harvey Dos Iberica, S.L. | |
| Discovery Sports, SA | Herco Consul.Riscos Corret.Seguros, Ltda |
| Distodo Distribui e Logist,Lda | Herco, Consultoria de Risco, S.A. |
| Dortmund Tower GmbH | HighDome PCC Limited |
| Dos Mares - Shopping Centre B.V. | Iberian Assets, SA |
| Dos Mares-Shopping Centre, S.A. | Igimo-Sociedade Imobiliária,SA |
| Dreamia, B.V | Iginha-Sociedade Imobiliária,SA. |
| Dreamia, Serv de Televisão, SA | Imoareia - Invest. Turísticos, SGPS, SA |
| Ecociclo - Energia e Ambiente, SA | IMOBEAUTY, S.A. |
| Ecociclo II | Imobiliária da Cacela, S.A. |
| Edições Book.it, S.A. | Imoclub-Serviços Imobilários,SA |
| Efanor Investimentos, SGPS, S.A. | Imoconti- Soc.Imobiliária,SA |
| Efanor Serviços de Apoio à Gestão, S.A. | Imodivor - Sociedade Imobiliária, S.A. |
| Empracine-E.Pro.Act. Cinem,Lda | Imoestrutura-Soc.Imobiliária,SA |
| Empreend.Imob.Quinta da Azenha,SA | Imohotel-Emp.Turist.Imobiliários,SA |
| Enerlousado-Recursos Energéticos, Lda. | Imomuro-Sociedade Imobiliária,SA |
| Equador & Mendes,Lda | Imopenínsula - Sociedade Imobiliária, SA |
| Estação Viana - Centro Comercial, S.A. | Imoplamac Gestão de Imóveis,SA |
| Estêvão Neves-Hipermercados Madeira,SA | Imoponte-Soc.Imobiliaria,SA |
| Euroresinas-Indústrias Quimicas,SA | Imoresort - Sociedade Imobiliária, S.A. |
| Farmácia Selecção, SA | Imoresultado-Soc.Imobiliaria,SA |
| Fashion Division Canárias, SL | Imosedas-Imobiliária e Seviços,SA |
| Fashion Division, S.A. | Imosistema-Sociedade Imobiliária,SA |
| Feneralt-Produção de Enercia, ACE | Impaper Europe GmbH |
| FINSTAR-Socied.Investim.Par SA | Implantação - Imobiliária, S.A. |
| Fozimo-Sociedade Imobiliária,SA | Infofield-Informática,SA |
| Fozmassimo - Sociedade Imobiliária, SA | Inparsa - Gestão Galeria Comercial, SA |
| Freccia Rossa- Shopping Centre S.r.l. | Inparvi SGPS, SA |
| Fundo de Invest. Imobiliário Imosede | Integrum - Energia, SA |
| Fundo Esp.Inv.Imo.Fec. WTC | Integrum ACE, SA |
| Fundo I.I. Parque Dom Pedro Shop.Center | Integrum Colombo Energia, SA |
| Fundo Invest. Imobiliário Imosonae Dois | Integrum Engenho Novo - Energia, S.A. |
| Fundo Invest.Imob.Shopp. Parque D.Pedro | INTEGRUM II - ENERGIA, S.A. |
| Gaiashopping I- Centro Comercial, S.A. | INTEGRUM III - ENERGIA, S.A. |
| Gaiashopping II- Centro Comercial, S.A. | Integrum Martim Longo - Energia, S.A. |
| GHP Gmbh | Integrum Vale do Caima - Energia, SA |
| Gli Orsi Shopping Centre 1 Srl | Integrum Vale do Tejo - Energia, SA |
| Glunz AG | Intelligent Big Data, S.L. |
| Glunz Service GmbH | Interlog-SGPS,SA |
| Glunz UK Holdings Ltd | Invesaude - Gestão Hospitalar S.A. |
| Ioannina Develop. of Shopping Centers SA | Modelo Hiper Imobiliária,SA |
|---|---|
| Isoroy SAS | Modelo.com-Vendas p/Correspond.,SA |
| La Farga - Shopping Center, SL | Movelpartes-Comp.para Ind.Mobiliária,SA |
| Land Retail B.V. | Movimento Viagens-Viag. e Turismo U.Lda |
| Larim Corretora de Resseguros, Ltda | MSTAR, SA |
| Larissa Develop. of Shopping Centers, SA | Münster Arkaden BV |
| Lazam MDS Corretora e Adm. Seguros, SA | Norte Shop. Retail and Leisure Centre BV |
| Le Terrazze - Shopping Centre 1 Srl | Norteshopping-Centro Comercial, S.A. |
| Libra Serviços, Lda. | NOS Açores Comunicações, SA |
| Lidergraf - Artes Gráficas, Lda | NOS Comunicações , S.A. |
| Lookwise, S.L. | NOS Lusomundo Audiovisuais, SA |
| Loop 5 - Shopping Centre, GmbH | NOS Lusomundo Cinemas, SA |
| Lusomundo España, SL | NOS Lusomundo TV Lda |
| Lusomundo Imobiliária 2, SA | NOS Madeira Comunicações, SA |
| Lusomundo Moçambique, Lda | NOS, SGPS, S.A. |
| Lusomundo Soc. Inv. Imob. SA | NOSPUB, Publicidade e Conteúdos, S.A. |
| Luz del Tajo - Centro Comercial S.A. | Nova Equador Internacional,Ag.Viag.T,Ld |
| Luz del Tajo B.V. | Nova Equador P.C.O. e Eventos |
| Madeirashopping- Centro Comercial, S.A. | Novobord (PTY) Ltd. |
| Maiashopping- Centro Comercial, S.A. | Novodecor (PTY), LTD |
| Maiequipa-Gestão Florestal,SA | OSB Deustchland Gmbh |
| Pantheon Plaza BV | |
| Marcas do Mundo-Viag. e Turismo Unip,Lda | Paracentro - Gest.de Galerias Com., S.A. |
| Marcas MC, ZRT | Pareuro, BV |
| Marina de Tróia S.A. | Park Avenue Develop. of Shop. Centers SA |
| Marinamagic-Expl.Cent.Lúdicos Marít,Lda | Parklake Shopping Srl |
| Marmagno-Expl.Hoteleira Imob.,SA | Parque Atlântico Shopping - C.C., SA |
| Martimope-Empreendimentos Turísticos, SA | Parque D. Pedro 1 B.V. |
| Marvero-Expl.Hoteleira Imob.,SA | Parque de Famalicão - Empr. Imob., S.A. |
| MDS Affinity-Sociedade de Mediação Lda | Parque Principado SL |
| MDS Africa SGPS, S.A. | Pátio Boavista Shopping Ltda. |
| MDS Auto - Mediação de Seguros, SA | Pátio Campinas Shopping Ltda |
| MDS Corretor de Seguros, SA | Pátio Goiânia Shopping Ltda |
| Mds Knowledge Centre, Unipessoal, Lda | Pátio Londrina Empreend.e Particip.Ltda |
| MDS Malta Holding Limited | Pátio Penha Shopping Ltda. |
| MDS, SGPS, SA | Pátio São Bernardo Shopping Ltda |
| Megantic BV | Pátio Sertório Shopping Ltda |
| Miral Administração Corretagem Seg, Ltda | Pátio Uberlândia Shopping Ltda |
| MJLF-Empreendimentos Imobiliários, SA | PCJ - Público, Comunicação e Jornalismo, S.A. |
| Modalfa-Comércio e Serviços,SA | Peixes do Continente-Ind.Dist.Peixes,SA |
| MODALLOOP - Vestuário e Calçado, SA | Per-Mar-Sociedade de Construções,SA |
| Modelo - Dist.de Mat. de Construção,S.A. | Pharmaconcept - Actividades em Saúde, SA |
| Modelo Continente Hipermercados,SA | PHARMACONTINENTE - Saúde e Higiene, S.A. |
| Modelo Continente International Trade,SA | PJP - Equipamento de Refrigeração, Lda |
Plaza Eboli B.V. River Plaza BV Plaza Eboli - Centro Comercial S.A. River Plaza Mall, Srl Plaza Mayor Holding, SGPS, S.A. Rochester Real Estate,Limited Plaza Mayor Parque de Ócio B.V. Ronfegen-Recursos Energéticos, Lda. Plaza Mayor Parque de Ocio,SA RSI Corretora de Seguros, Ltda Plaza Mayor Shopping B.V. S.C. Microcom Doi Srl Plaza Mayor Shopping, SA S21 Sec Barcelona, S.L. Poliface North America S21 Sec Brasil, Ltda Porturbe-Edificios e Urbanizações,SA S21 Sec Ciber Seguridad, S.A. de CV Powercer-Soc.de Cogeração da Vialonga,SA S21 Sec Fraud Risk Management, S.L. Praedium - Serviços, SA S21 SEC Gestion, S.A. Praedium II-Imobiliária,SA S21 Sec Inc. Praedium SGPS, SA S21 Sec Information Security Labs, S.L. Praesidium Services Limited S21 Sec Institute, S.L. Predicomercial-Promoção Imobiliária,SA S21 Sec México, S.A. de CV Predilugar - Sociedade Imobiliária, SA S21 Sec, S.A. de CV Prédios Privados Imobiliária,SA Predisedas-Predial das Sedas,SA Saphety Brasil Transações Eletrônicas Ltda. Proj. Sierra Germany 4 (four)-Sh.C.GmbH Proj. Sierra Italy 2 - Dev.of Sh.C. Srl Saúde Atlântica - Gestão Hospitalar, SA Proj.Sierra Germany 2 (two)-Sh.C.GmbH SC Aegean B.V. Project 4, Srl SC Assets SGPS, SA Project SC 1 BV SC Finance BV Project SC 2 BV SC For-Serv.Form.e Desenv.R.H.,Unip.,Lda Project Sierra 10 BV SC Mediterranean Cosmos B.V. Project Sierra 11 BV SC, SGPS, SA Project Sierra 12 BV SC-Consultadoria,SA Project Sierra 2 B.V. SC-Eng. e promoção imobiliária,SGPS,S.A Project Sierra 6 BV SCS Beheer,BV Project Sierra 8 BV SDSR - Sports Division 2, S.A. Project Sierra Four Srl SDSR - Sports Division SR, S.A. Project Sierra Spain 1 B.V. Selifa-Empreendimentos Imobiliários,SA Project Sierra Spain 2 B.V. Sempre à Mão - Sociedade Imobiliária,SA Project Sierra Spain 2-Centro Comer. SA Servicios de Inteligencia Estratégica Global, S.L. Project Sierra Spain 3 B.V. Sesagest-Proj.Gestão Imobiliária,SA Project Sierra Spain 3-Centro Comer. SA Sete e Meio - Invest. Consultadoria, SA Project Sierra Two Srl Sete e Meio Herdades-Inv. Agr. e Tur.,SA Promessa Sociedade Imobiliária, S.A. Shopping Centre Colombo Holding, BV Quorum Corretores de Seguros Ltda SIAL Participações, Lda Racionaliz. y Manufact.Florestales,SA Sierra Asia Limited Raso - Viagens e Turismo, S.A. Sierra Berlin Holding BV Raso, SGPS, SA Sierra Brazil 1 B.V.
Shopping Centre Parque Principado B.V.
Sierra Central S.A.S. Sierra Developments Holding B.V. Sierra Developments, SGPS, S.A. Soconstrução BV Sierra Enplanta Ltda Sodesa, S.A. Sierra European R.R.E. Assets Hold. B.V. Soflorin, BV Sierra Germany GmbH Sierra GP Limited Solinca - Eventos e Catering, SA Sierra Greece, S.A. Solinca - Health and Fitness, SA Sierra Investimentos Brasil Ltda Sierra Investments (Holland) 1 B.V. Solinfitness - Club Malaga, S.L. Sierra Investments (Holland) 2 B.V. Solingen Shopping Center GmbH Sierra Investments Holding B.V. SOLSWIM-Gestão e Expl.Equip.Aquáticos,SA Sierra Investments SGPS, S.A. Soltroia-Imob.de Urb.Turismo de Tróia,SA Sierra Italy Holding B.V. Somit Imobiliária,SA Sierra Italy Srl Sonae - Specialized Retail, SGPS, SA Sierra Management Germany GmbH Sonae Capital Brasil, Lda Sierra Management Italy S.r.l. Sonae Capital,SGPS, S.A. Sierra Management Romania, Srl Sonae Center Serviços II, SA Sierra Management, SGPS, S.A. Sierra Portugal, S.A. Sonae Financial Services, S.A. Sierra Project Nürnberg BV Sonae Ind., Prod. e Com.Deriv.Madeira,SA Sierra Property Management Greece, SA Sonae Indústria - Management Services,SA Sierra RE Greece BV Sierra Reval-PM Mark. and Consult., Inc Sonae Industria (UK),Ltd Sierra Romania Sh. Centers Services Srl Sonae Industria de Revestimentos, S.A. Sierra Services Holland 2 BV Sonae Investimentos, SGPS, SA Sierra Services Holland B.V. Sonae Investments,BV Sierra Solingen Holding GmbH Sonae MC - Modelo Continente, SGPS, SA Sierra Spain 2 Services, S.A. Sonae Novobord (PTY) Ltd Sierra Spain, Shop. Centers Serv.,S.A.U. Sonae RE, S.A. Sierra Spain, Shop. Centers Services, SL Sonae Retalho Espana-Servicios Gen.,SA Sierra Zenata Project B.V. Sonae SGPS, SA SISTAVAC, S.A. Sonae Sierra, SGPS, S.A. SISTAVAC, SGPS, S.A. Sonae Tafibra Benelux, BV SISTAVAC-Sistemas HVAC-R do Brasil, Ltda Sonae Turismo-SGPS,SA SKK SRL SONAECENTER SERVIÇOS, SA SKK-Central de Distr.,SA Sonaecom - Cyber security and intelligence, SGPS, S.A. SKKFOR - Ser. For. e Desen. de Recursos Sonaecom - Serviços Partilhados, S.A. Soc.Inic.Aproveit.Florest.-Energias,SA Sociedade de Construções do Chile, S.A. Sonaecom BV Sociedade Independente de Radiodifusão Sonora, S.A. Sonaecom, SGPS, S.A. Société de Tranchage Isoroy S.A.S. Sonaegest-Soc.Gest.Fundos Investimentos
Sonae Center Serviços, S.A. Sonae Sierra Brasil SA Sonae Sierra Brazil B.V.
| Sonaerp - Retail Properties, SA | Torre São Gabriel-Imobiliária,SA |
|---|---|
| SONAESR - Serviços e logistica, SA | Troia Market-Supermercados, S.A. |
| Sonaetelecom BV | Troia Natura, S.A. |
| Sondis Imobiliária,SA | Troiaresort-Investimentos Turísticos, SA |
| Sontaria-Empreend.Imobiliários,SA | Troiaverde-Expl.Hoteleira Imob.,SA |
| Sontel BV | Tulipamar-Expl.Hoteleira Imob.,SA |
| Sontur BV | |
| Sonvecap BV | Unishopping Administradora Ltda. |
| Sopair, S.A. | Unishopping Consultoria Imob. Ltda. |
| Sótaqua - Soc. de Empreendimentos Turist | Upstar Comunicações SA |
| Soternix-Produção de Energia, ACE | Urbisedas-Imobiliária das Sedas,SA |
| Spanboard Products,Ltd | Valecenter Srl |
| SPF- Sierra Portugal | VALOR N, S.A. |
| Spinarq Moçambique, Lda | Via Catarina- Centro Comercial, S.A. |
| Spinarq-Engenharia,Energia e Ambiente,SA | Viajens y Turismo de Geotur España, S.L. |
| Spinveste - Promoção Imobiliária, SA | Vistas do Freixo-Emp.Tur.Imobiliários,SA |
| Spinveste-Gestão Imobiliária SGII,SA | Vuelta Omega, S.L. |
| Sport TV Portugal, SA | |
| Sport Zone Canárias | |
| Sport Zone España-Com.Art.de Deporte,SA | WeDo Poland Sp. Z.o.o. |
| Sport Zone Turquia | WeDo Technologies (UK) Limited |
| Spred, SGPS, SA | WeDo Technologies Americas, Inc. |
| Tableros Tradema,S.L. | WeDo Technologies Australia PTY Limited |
| Tafiber,Tableros de Fibras Ibéricas,SL | WeDo Technologies BV |
| Tafibra Suisse, SA | |
| Tafisa Canadá Societé en Commandite | WeDo Technologies Egypt LLC |
| Tafisa Développement | WeDo Technologies Mexico, S de R.L. |
| Tafisa France, SA | Weiterstadt Shopping BV |
| Tafisa Investissement | World Trade Center Porto, S.A. |
| Tafisa Participation | Worten Canárias |
| Tafisa UK,Ltd | Worten España Distribución, SL |
| Tafisa-Tableros de Fibras, SA | Worten-Equipamento para o Lar,SA |
| Taiber,Tableros Aglomerados Ibéricos,SL | ZIPPY - Comercio y Distribución, S.A. |
| Tecmasa Reciclados de Andalucia, S.L. | ZIPPY - Comércio e Distribuição, SA |
| Tecnológica Telecomunicações LTDA. | Zippy Turquia |
| Teconologias del Medio Ambiente,SA | Zon Audiovisuais, SGPS |
| Teliz Holding B.V. | Zon Cinemas, SGPS |
| Textil do Marco,SA | ZON Finance BV |
| The Artist Porto Hot.&Bistrô-Act.Hot.,SA | ZON III-COMUNICAÇ ELETRÓN SA |
| TLANTIC B.V. | ZON II-SERVIÇOS TELEVISÃO,SA |
| Tlantic Portugal-Sist. de Informação, SA | Zon TV Cabo SGPS SA |
| Tlantic Sistemas de Informação Ltdª | Zon TV Cabo, SA |
| Todos os Dias-Com.Ret.Expl.C.Comer.,S.A. | Zubiarte Inversiones Inmob,SA |
| Tool Gmbh | ZYEVOLUTION-Invest.Desenv.,SA |
| Torre Ocidente, Imobiliária,SA |
For the years ended at 31 December 2014 and 2013
| (Amounts expressed in Euro) | Notes | December 2014 | December 2013 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Tangible assets | 1.a, 1.f and 2 | 38,672 | 52,710 |
| Intangible assets | 1.b and 3 | 6,085 | 7,092 |
| Investments in Group companies | 1.c and 5 | 52,792,142 | 66,580,286 |
| Investments in joint ventures | 1.d and 6 | 597,666,944 | 597,666,944 |
| Financial assets at fair value through profit or loss | 1.e, 4 and 7 | 1,424,996 | - |
| Other non-current assets | 1.d, 1.n, 4, 8 and 25 | 170,645,171 | 175,735,246 |
| Total non-current assets | 822,574,010 | 840,042,278 | |
| Current assets | |||
| Financial assets at fair value through profit or loss | 1.e, 4 and 7 | 58,540,576 | 202,442,350 |
| Other current debtors | 1.e, 1.g, 4, 10 and 25 | 3,732,898 | 19,763,330 |
| Other current assets | 1.e, 1.n, 4, 11 and 25 | 517,881 | 515,229 |
| Cash and cash equivalents | 1.e, 1.h, 4, 12 and 25 | 176,887,883 | 185,918,581 |
| Total current assets | 239,679,238 | 408,639,490 | |
| Total assets | 1,062,253,248 | 1,248,681,768 | |
| Shareholder' funds and liabilities | |||
| Share capital | 13 | 230,391,627 | 366,246,868 |
| Own shares | 1.q and 14 | (8,441,804) | (8,441,804) |
| Reserves | 1.p | 830,933,789 | 928,723,768 |
| Net income / (loss) for the year | 5,820,800 | (90,569,383) | |
| 1,058,704,412 | 1,195,959,449 | ||
| Liabilities | |||
| Non-current liabilities | |||
| 1.i, 1.j, 4, 15.a and 25 | - | 20,003,496 | |
| Provisions for other liabilities and charges | 1.l, 1.o and 16 | 304,811 | 332,469 |
| Other non-current liabilities | 1.n, 1.t, 4 and 17 | 399,254 | 370,948 |
| Total non-current liabilities | 704,065 | 20,706,913 | |
| Current liabilities | |||
| Short-term loans and other loans | 1.h, 1.i, 1.j, 4, 15.b and 25 | 87,859 | 21,660,813 |
| Other creditors | 4, 18 and 25 | 1,065,550 | 7,308,273 |
| Other current liabilities | 1.n, 1.t, 4, 19 and 25 | 1,691,362 | 3,046,320 |
| Total current liabilities | 2,844,771 | 32,015,406 | |
| 1,062,253,248 | 1,248,681,768 |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério Maria Cláudia Teixeira de Azevedo António Bernardo Aranha da Gama Lobo Xavier
For the years and quarters ended at 31 December 2014 and 2013
| September to | September to | ||||
|---|---|---|---|---|---|
| (Amounts expressed in Euro) | Notes | December 2014 | December 2014 | December 2013 | December 2013 |
| (not audited) | (not audited) | ||||
| Services rendered | 20 and 25 | 303,482 | 258,761 | 2,627,835 | 155,898 |
| Other operating revenues | 21 and 25 | 153,199 | 89,238 | 113,879 | 30,301 |
| 456,681 | 347,999 | 2,741,714 | 186,199 | ||
| External supplies and services | 1.f, 22 and 25 | (1,018,283) | (682,707) | (2,142,911) | (467,398) |
| Staff expenses | 1.t, 28 and 30 | (1,313,559) | (1,028,437) | (2,307,890) | (467,002) |
| Depreciation and amortisation | 1.a, 1.b, 2 and 3 | (15,779) | (12,180) | (65,561) | (13,346) |
| Provisions and impairment losses | 1.l and 16 | - | - | (90,138) | 2,416 |
| Other operating costs | (135,696) | (100,847) | (39,962) | (9,905) | |
| (2,483,317) | (1,824,171) | (4,646,462) | (955,235) | ||
| Gains and losses on Group companies | 5 and 23 | 7,032,750 | 6,767,750 | (147,101,781) | (2,858,138) |
| Gains and losses on financial assets at | |||||
| fair value through profit or loss | 5, 7 and 23 | (1,975,451) | (6,925,422) | 46,636,719 | 37,489,326 |
| Other financial expenses | 1.c, 1.i, 1.j, 1.r, 1.s, 15 and 23 | (1,018,096) | (988,884) | (11,211,267) | (508,249) |
| Other financial income | 1.r, 5 and 23 | 3,369,520 | 2,741,673 | 24,502,045 | 1,297,759 |
| Current income / (loss) | 5,382,087 | 118,945 | (89,079,032) | 34,651,662 | |
| Income taxation | 1.m, 9 and 24 | 438,713 | 244,419 | (1,490,351) | (181,033) |
| Net income / (loss) for the year | 5,820,800 | 363,364 | (90,569,383) | 34,470,629 | |
| Earnings per share | 2 7 | ||||
| Including discontinued operations: | |||||
| Basic | 0.02 | 0.00 | (0.25) | 0.10 | |
| Diluted | 0.02 | 0.00 | (0.25) | 0.10 | |
| Excluding discontinued operations: | |||||
| Basic | 0.02 | 0.00 | (0.25) | 0.10 | |
| Diluted | 0.02 | 0.00 | (0.25) | 0.10 |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
For the years and quarters ended at 31 December 2014 and 2013
| (Amounts expressed in Euro) | Notes | December 2014 | September to December 2014 (not audited) |
December 2013 | September to December 2013 (not audited) |
|---|---|---|---|---|---|
| Net income / (loss) for the year | 5,820,800 | 363,364 | (90,569,383) | 34,470,629 | |
| Components of other comprehensive income, net | |||||
| of tax | - | - | - | - | |
| Comprehensive income for the year | 5,820,800 | 363,364 | (90,569,383) | 34,470,629 |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
For the years ended at 31 December 2014 and 2013
| (Amounts expressed in Euro) | Reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Share capital | Own shares (note 14) |
Share premium | Legal reserves | Medium Term Incentive Plans reserves (note 28) |
Own shares reserves |
Other reserves | Total reserves | Net income / (loss) |
Total | |
| 2014 | ||||||||||
| Balance at 31 December 2013 | 366,246,868 | (8,441,804) | 775,290,377 | 13,152,684 | 473,962 | 8,441,804 | 131,364,941 | 928,723,768 | (90,569,383) | 1,195,959,449 |
| Appropriation of result of 2013 | ||||||||||
| Transfer to legal reserves and other reserves | - | - | - | - | - | - | (90,569,383) | (90,569,383) | 90,569,383 | - |
| Comprehensive income for the year ended at 31 December 2014 |
- | - | - | - | - | - | - | - | 5,820,800 | 5,820,800 |
| Reduction of the share capital following the result of the general and voluntary acquisition of own shares (Note 13) |
(135,855,241) | - | - | - | - | - | (5,815,229) | (5,815,229) | - | (141,670,470) |
| Effect of the recognition of the Medium Term Incentive Plans (Note 28) Effect of the conversion of the Medium Term |
- | - | - | - | (57,543) | - | - | (57,543) | - | (57,543) |
| Incentive Plans (Note 28) | - | - | - | - | (416,419) | - | (931,405) | (1,347,824) | - | (1,347,824) |
| Balance at 31 December 2014 | 230,391,627 | (8,441,804) | 775,290,377 | 13,152,684 | - | 8,441,804 | 34,048,924 | 830,933,789 | 5,820,800 | 1,058,704,412 |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
| (Amounts expressed in Euro) | Reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Share capital | Own shares (note 14) |
Share premium | Legal reserves | Medium Term Incentive Plans reserves (note 28) |
Own shares reserves |
Other reserves | Total reserves | Net income / (loss) |
Total | |
| 2013 | ||||||||||
| Balance at 31 December 2012 Appropriation of result of 2012 |
366,246,868 | (6,299,699) | 775,290,377 | 7,991,192 | 650,156 | 6,299,699 | 79,961,643 | 870,193,067 | 103,229,835 | 1,333,370,071 |
| Transfer to legal revserves and other reserves Dividends distribution |
- - |
- - |
- - |
5,161,492 - |
- - |
- - |
98,068,343 (43,281,102) |
103,229,835 (43,281,102) |
(103,229,835) - |
- (43,281,102) |
| Comprehensive income for the year ended at 31 December 2013 |
- | - | - | - | - | - | - | - | (90,569,383) | (90,569,383) |
| Delivery of own shares under the Medium Term Incentive Plans |
- | 354,213 | - | - | (406,268) | (354,213) | 425,568 | (334,913) | - | 19,300 |
| Sale of own shares to subsidiaries under the Short Term Incentive Plans |
- | 3,724 | - | - | - | (3,724) | 4,723 | 999 | - | 4,723 |
| Effect of the recognition of the Medium Term Incentive Plans |
- | - | - | - | 230,074 | - | - | 230,074 | - | 230,074 |
| Early termination of the derivate on own shares (notes 25 and 28) |
- | (1,314,192) | (1,314,192) | - | (1,314,192) | |||||
| Acquisition of own shares | - - |
- (2,500,042) |
- - |
- - |
- - |
2,500,042 | (2,500,042) | - | - | (2,500,042) |
| Balance at 31 December 2013 | 366,246,868 | (8,441,804) | 775,290,377 | 13,152,684 | 473,962 | 8,441,804 | 131,364,941 | 928,723,768 | (90,569,383) | 1,195,959,449 |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
| (Amounts expresses in Euro) | December 2014 | December 2013 | ||
|---|---|---|---|---|
| Operating activities | ||||
| Payments to employees | (310,368) | (1,625,097) | ||
| Cash flows from operating activities | (310,368) | (1,625,097) | ||
| Payments / receipts relating to income taxes, net | 805,887 | (1,147,572) | ||
| Other payments / receipts relating to operating activities, net | 2,079,550 | 337,933 | ||
| Cash flows from operating activities (1) | 2,575,069 | (2,434,736) | ||
| Investing activities | ||||
| Receipts from: | ||||
| Financial Investments | 28,127,148 | 15,260,284 | ||
| Tangible assets | - | 41 | ||
| Interest and similar income | 3,727,224 | 22,984,316 | ||
| Loans granted | - | 428,385,000 | ||
| Dividends | 8,571,504 | 40,425,876 | 24,700,000 | 491,329,641 |
| Payments for: | ||||
| Financial Investments | (10,203,078) | (16,940,284) | ||
| Tangible assets | (1,102) | (25,691) | ||
| Intangible assets | (498) | - | ||
| Loans granted | 2,625,000 | (7,579,678) | - | (16,965,975) |
| Cash flows from investing activities (2) | 32,846,198 | 474,363,666 | ||
| Financing activities | ||||
| Receipts from: | ||||
| Loans obtained | - | - | 15,356,000 | 15,356,000 |
| Payments for: | ||||
| Interest and similar expenses | (2,905,244) | (10,276,050) | ||
| Acquisition of own shares | - | (2,500,042) | ||
| Loans obtained | (41,634,568) | (349,026,569) | ||
| Dividends | - | (44,539,812) | (43,281,102) | (405,083,763) |
| Cash flows from financing activities (3) | (44,539,812) | (389,727,763) | ||
| Net cash flows (4)=(1)+(2)+(3) | (9,118,545) | 82,201,167 | ||
| Cash and cash equivalents at the beginning of the year | 185,918,581 | 103,717,414 | ||
| Cash and cash equivalents at year end | 176,887,883 | 185,918,581 |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
For the years ended at 31 December 2014 and 2013
| December 2014 | December 2013 | |
|---|---|---|
| 1. Acquisition or sale of subsidiaries or other businesses | ||
| a) Other business activities | ||
| Reimburse of investments from Sonaecom BV | 14,720,000 | - |
| Reimburse of investments from Sonae Com Sistemas de Informação, SGPS, S.A. | 10,195,000 | - |
| Reimburse of investments from Sonaetelecom BV | 1,549,284 | - |
| Reimburse of supplementary capital from Miauger - Organização e Gestão de Leilões Electrónicos, S.A. | 988,854 | 1,146,146 |
| Reimburse of supplementary capital from PCJ - Público, Comunicação e Jornalismo, S.A. | 674,010 | 7,624,773 |
| Reimburse of supplementary capital from Público- Comunicação Social, S.A. | - | 6,489,365 |
| 28,127,148 | 15,260,284 | |
| b) Other business activities | ||
| Purchase of shares Sonae SGPS | 5,522,188 | - |
| Cash outflow to coverage losses Público - Comunicação Social, S.A. | 3,180,000 | - |
| Cash outflow to coverage losses Miauger - Organização e Gestão de Leilões Electrónicos, S.A. | 826,880 | 1,146,145 |
| Cash outflow to coverage losses PCJ - Público, Comunicação e Jornalismo, S.A. | 674,010 | - |
| Share capital increase of PCJ - Público, Comunicação e Jornalismo, S.A. | - | 7,624,774 |
| Share capital increase of Público - Comunicação Social, S.A. | - | 6,489,365 |
| Supplementary capital to Público - Comunicação Social, S.A. | - | 850,000 |
| Supplementary capital to Miauger - Organização e Gestão de Leilões Electrónicos, S.A. | - | 830,000 |
| 10,203,078 | 16,940,284 | |
| c) Dividends received | ||
| ZOPT SGPS, S.A. | 7,250,000 | - |
| NOS, SGPS, S.A.* | 1,321,504 | 24,700,000 |
| 8,571,504 | 24,700,000 | |
* This company changed name from ZonOptimus, SGPS, SA to NOS, SGPS, SA in June 2014.
| December 2014 | December 2013 | |
|---|---|---|
| 2. Details of cash and cash equivalents | ||
| Cash in hand | 1,260 | 811 |
| Cash at bank | 201,623 | 26,252,770 |
| Treasury applications | 176,685,000 | 159,665,000 |
| Overdrafts | (87,847) | - |
| Cash and cash equivalents | 176,800,036 | 185,918,581 |
| Overdrafts | 87,847 | - |
| Cash assets | 176,887,883 | 185,918,581 |
| 3. Description of non-monetary financing activities | ||
| a) Bank credit obtained and not used | 1,000,000 | 16,000,000 |
| b) Purchase of company through the issue of shares | Not applicable | Not applicable |
| c) Conversion of loans into shares | Not applicable | Not applicable |
The notes are an integral part of the financial statements at 31 December 2014 and 2013.
Ricardo André Fraga Costa
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
Tecnologias de Informação, S.A. and has its head office at Lugar de Espido, Via Norte, Maia Portugal.
information technology area were transferred to the Company through a demerger-merger process, executed by public deed dated 30 September 1997.
Articles of Association were modified and its name was changed to has been the management of investments in other companies. Also denominated to euro, being represented by one hundred and fifty million shares with a nominal value of 1 Euro each.
On 1 June 2000, the Company carried out a Combined Share Offer, involving the following:
capital was increased under the terms explained below. The new shares were fully subscribed for and paid up by Sonae-, SGPS, S.A. (a Shareholder was subscribed for and paid up on the date the price of the Combined Share Offer was determined, and paid up in cash, 31,000,000 new ordinary shares of 1 Euro each being issued. The subscription price for the new shares was the same as that fixed for the sale of shares in the aforementioned Combined Share Offer, which was Euro 10.
In addition, Sonae sold, in that year, 4,721,739 Sonaecom shares under an option granted to the banks leading the Institutional Offer for Sale and 1,507,865 shares to Sonae Group managers and to the former owners of the companies acquired by Sonaecom.
share capital was increased from Euro 181,000,000 to Euro 226,250,000 by public subscription reserved for the existing Shareholders, 45,250,000 new shares of 1 Euro each having been fully subscribed for and paid up at the price of Euro 2.25 per share.
O to Sonaecom, SGPS, S.A.. 70,276,868, from Euro 226,250,000 to Euro 296,526,868, by the issuance of 70,276,868 new shares of 1 Euro each and with a share premium of Euro 242,455,195, fully subscribed by France Telecom. The corresponding public deed was executed on 15 November 2005.
neral Meeting held on 18 69,720,000, to Euro 366,246,868, by the issuance of 69,720,000 new shares of 1 Euro each and with a share premium of Euro 275,657,217, subscribed by 093X Telecomunicações Celulares, S.A. (EDP) and Parpública Participações Públicas, SGPS, S.A. (Parpública). The corresponding public deed was executed on 18 October 2006.
By decision of the Shareholders General Meeting held on 16 April 2008, bearer shares were converted into registered shares.
On 5 February 2014, Sonaecom made public the decision to launch a general and voluntary tender offer for the acquisition of shares representing the share capital of Sonaecom.
The offer was general and voluntary, with the offered obliged to acquire all the shares that were the object of the offer and were, until the end of the respective period, subject to valid acceptance by the recipients.
The period of the offer, during which sales orders were received, ran for two weeks, beginning on 6 February and ending on 19 February 2014. On 20 February 2014, the results of the offer were released. The level of acceptance reached 62%, corresponding to 54,906,831 Sonaecom shares (Note 7 and 13).
In 2014 Sonaecom reduced its share capital to Euro 230,391,627.
Euronext announced Sonaecom exclusion from the PSI-20 from 24 February 2014.
The financial statements are presented in euro, rounded at unit.
The accompanying financial statements have been prepared on a accordance with International Financial Reporting Standards(IFRS).
The adoption of the International Financial Reporting Standards (IFRS) as adopted by the European Union occurred for the first time in 2007 and as defined by IFRS 1 date of transition from generally accepted accounting principles in Portugal to those standards.
For Sonaecom, there are no differences between IFRS as adopted by European Union and IFRS published by the International Accounting Standards Board, with the exception of the start dates of the adoption of the standards indicated below.
The following standards, interpretations, amendments and revisions have been approved (endorsed) by the European Union and have mandatory application to financial years beginning on or after 1 January 2014 and were first adopted in the year ended at 31 December 2014:
| Standard / Interpretation | Effective date (annual |
|---|---|
| periods beginning on or | |
| after) | |
| IFRS 10 (Consolidated Financial Statements) | 1-Jan-13(*) |
| Builds on existing principles by identifying the concept of control as | |
| the determining factor in whether an entity should be included | |
| within the consolidated financial statements of the parent company. | |
| The standard provides additional guidance to assist in the | |
| determination of control where this is difficult to assess. | |
| IFRS 11 (Companies jointly controlled) | 1-Jan-13(*) |
| Provides for a more realistic reflection of joint arrangements by | |
| focusing on the rights and obligations of the arrangement, rather | |
| than its legal form (as is currently the case). The standard addresses | |
| inconsistencies in the reporting of joint arrangements by requiring a | |
| single method to account for interests in jointly controlled entities. | |
| IFRS 12 (Disclosures of Interests in Other | 1-Jan-13(*) |
| Entities) | |
| New and comprehensive standard on disclosure requirements for all | |
| forms of interests in other entities, including joint arrangements, | |
| associates, special purpose vehicles and other off balance sheet | |
| vehicles. | |
| 1-Jul-14 | |
| amendments to IFRSs in response to four issues addressed during the | |
| IAS 27 (Separate Financial Statements) | 1-Jan-13(*) |
| Consolidation requirements previously forming part of IAS 27 have | |
| been revised and are now contained in IFRS 10 Consolidated Financial | |
| Statements. |
| Standard / Interpretation | Effective date (annual periods beginning on or after) |
|---|---|
| IAS 28 (Investments in Associates and Joint | 1-Jan-13(*) |
| Ventures) | |
| The objective of IAS 28 (as amended in 2011) is to prescribe the | |
| accounting for investments in associates and to set out the | |
| requirements for the application of the equity method when | |
| accounting for investments in associates and joint ventures. | |
| Amendments to IFRS 10, IFRS 12 and IAS 27 | 1-Jan-14 |
| (Investment Entities); | |
| The amendments apply to a particular class of business that qualify as | |
| investment entities. The admendments provide an exception to the | |
| consolidation requirements in IFRS 10. | |
| IAS 32- Admendments (Offsetting Financial | 1-Jan-14 |
| Assets and Financial Liabilities) | |
| IAS 32 is amended to refer to the disclosure requirements in respect | |
| of offsetting arrangements. | |
| Amendments to IAS 36 (Recoverable | 1-Jan-14 |
| amount disclosures for Non-Financial | |
| Assets) | |
| The amendments introduce additional disclosures and clarify the | |
| disclosures required when an asset is impaired and the recoverable amount of assets was based on fair value less cost of disposal. |
|
| Amendments to IAS 39 (Novation of | 1-Jan-14 |
| Derivatives and Continuation of Hedge | |
| Accounting) | |
| The objective of the proposed amendments is to provide an | |
| exception to the requirement for the discontinuation of hedge | |
| accounting in IAS 39 and IFRS 9 in circumstances when a hedging | |
| instrument is required to be novated as a result of laws or regulations. | |
| IFRIC 21 Levies (Levies Charged by Public | 1-Jan-14 |
| Authorities on Entities that Operate in a | |
| Specific Market) | |
| This interpretation clarifies on when a liability to pay a levy imposed | |
| by a government (does not include income taxes - see IAS 12 Income | |
| taxes) should be recognised by an entity. IFRIC 21 identifies that the | |
| obligating event that gives rise to a liability is the activity that | |
| triggers the payment of the levy in accordance with the relevant | |
| legislation. | |
| (*)In accordance with the Regulation, which approves the adoption of IFRS 10, 11 and 12 and the amendments to IAS 27 and IAS 28, the |
|
| entity shall use these standards no later than periods beginning on or | |
| after January 1, 2014. The early adoption is however permitted. | |
| The application of these standards and interpretations had no | |
| material effect on the financial statements of the Company. |
The following standards, interpretations, amendments and revisions have been at the date of approval of these financial statements, approved (endorsed) by the European Union, whose application is mandatory only in future financial years:
1-Jul-14
Cycle
amendments to IFRSs in response to eight issues addressed during
IAS 19 - Amendments (Defined Benefit Plans: Employee Contributions) 1-Jul-14
The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service.
These standards, although endorsed by the European Union, were not adopted by the Company for the year ended at 31 December 2014, since their application is not yet mandatory.
The application of these standards and interpretations, as applicable to the Company will have no material effect on future statements of the Company.
The following standards, interpretations, amendments and revisions have not yet been approved (endorsed) by the European Union, at the date of approval of these financial statements:
| Standard / Interpretation | Effective date (annual periods beginning on or after) |
|---|---|
| IFRS 9 (Financial Instruments)and | 1-Jan-18 |
| subsequent amendments | |
| This standard introduces new requirements for classifying and | |
| measuring financial assets. | |
| Amendments to IFRS 10 - Consolidated | 1-jan-16 |
| Financial Statements, IFRS 12 - Disclosure | |
| of Interests in Other Entities and IAS 28 - | |
| Investments in Associates and Joint | |
| Ventures The proposed of these amendments is to clarify several issues about |
|
| the application of the requirement for investment entities to | |
| measure subsidiaries at fair value instead of consolidating them. | |
| IFRS 10 and IAS 28 - Amendments (Sale or | 1-Jan-16 |
| Contribution of Assets between an Investor | |
| and its Associate or Joint Venture) | |
| The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. |
The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.
| Standard / Interpretation | Effective date (annual periods beginning on or after) |
|---|---|
| IFRS 11 - Amendments (Accounting for | 1-Jan-16 |
| Acquisitions of Interests in Joint Operations) | |
| The objective was to add new guidance on the accounting for the | |
| acquisition of an interest in a joint operation that constitutes a | |
| business. The IASB decided that acquirers of such interests shall apply all of the principles on business combinations accounting in IFRS 3 Business Combinations, and other IFRSs, that do not conflict with the |
|
| guidance in IFRS 11. IFRS 14 (Regulatory Deferral Accounts) |
1-Jan-16 |
| Permits an entity which is a first-time adopter of IFRS to continue to account, with some limited changes, for 'regulatory deferral account balances' in accordance with its previous GAAP, both on initial adoption of IFRS and in subsequent financial statements. |
|
| IFRS 15 (Revenue from Contracts with | 1-Jan-17 |
| Customers) | |
| IFRS 15 specifies how and when an IFRS reporter will recognise | |
| revenue as well as requiring such entities to provide users of financial | |
| statements with more informative, relevant disclosures. The standard | |
| provides a single, principles based five-step model to be applied to all | |
| contracts with customers. | |
| Amendments to IAS 1 - Presentation of | 1-Jan-16 |
| Financial Statements (Divulgation) | |
| The amendment introduces a set of directions and guidelines to | |
| improve and simplify the disclosures in the context of current IFRS | |
| reporting requirements. | |
| IAS 16 and IAS 38 - Amendments | 1-Jan-16 |
| (Clarification of Acceptable Methods of | |
| Depreciation and Amortisation) | |
| The IASB has clarified that the use of revenue-based methods to | |
| calculate the depreciation of an asset is not appropriate because | |
| revenue generated by an activity that includes the use of an asset | |
| generally reflects factors other than the consumption of the | |
| economic benefits embodied in the asset. | |
| IAS 16 and IAS 41 - Amendments | 1-Jan-16 |
| (Agriculture: Bearer Plants) | |
| The amendments bring bearer plants, which are used solely to grow | |
| produce, into the scope of IAS 16 so that they are accounted for in | |
| the same way as property, plant and equipment. | |
| IAS 27: Amendments (Equity Method in | 1-Jan-16 |
| Separate Financial Statements) | |
| This amendment will allow entities to use the equity method to | |
| account for investments in subsidiaries, joint ventures and associates | |
| in their separate financial statements. | |
| 1-Jan-16 | |
| Cycle | |
| amendments to IFRSs in response to issues addressed during the |
European Union and, as such, were not adopted by the Company for the year ended at 31 December 2014. Their application is not yet mandatory.
It is predicted that the application of these standards and interpretations, as applicable to the Company will have no material effect on future financial statements of the Company.
The accounting policies and measurement criteria adopted by the Company at 31 December 2014 are comparable with those used in the preparation of the individual financial statements at 31 December 2013.
The main accounting policies used in the preparation of the accompanying financial statements are as follows:
Tangible assets are recorded at their acquisition cost less accumulated depreciation and less estimated accumulated impairment losses.
Depreciations are calculated on a straight-line monthly basis as from the date the assets are available for use in the necessary conditions to operate as intended by the management, by a corresponding charge to the profit and loss
Impairment losses detected in the realisation value of tangible assets are recorded in the period in which they arise, by a corresponding it and loss statement.
The annual depreciation rates used correspond to the estimated useful life of the assets, which are as follows:
| Years of useful life | |
|---|---|
| improvements in buildings owned by third parties | 10-20 |
| Plant and machinery | 5 |
| Fixtures and fittings | 4-8 |
| Vehicles | 4 |
Current maintenance and repair costs of tangible assets are recorded as costs in the period in which they occur. Improvements of significant amount, which increase the estimated useful life of the assets, are capitalised and depreciated in accordance with the estimated useful life of the corresponding assets.
Intangible assets are recorded at their acquisition cost less accumulated amortisation and less estimated accumulated impairment losses. Intangible assets are only recognised, if it is likely that they will bring future economic benefits to the Company, if the Company controls them and if their cost can be reliably measured.
Intangible assets correspond, essentially, to software and industrial property.
Amortisations are calculated on a straight-line monthly basis, over the estimated useful life of the assets (three to six years) as from the month in which the corresponding expenses are incurred.
Amortisation for the period is recorded in the profit and loss
c) Investments in Group companies and other non-current assets Investments in companies in which the Company has direct or 50% or in which it has control over the financial and operating policies at their acquisition cost, in accordance with IAS 27, as Sonaecom presents, separately, consolidated financial statements in accordance with IAS / IFRS.
Loans and supplementary capital granted to affiliated companies with maturities, estimated or defined contractually, greater than one non-
Investments and loans granted to Group companies are evaluated whenever an event or change of circumstances indicates that the recorded amount may not be recoverable or impairment losses recorded in previous years no longer exist.
Impairment losses estimated for investments and loans granted to Group companies are recorded, in the period that they are estimated, statement.
The expenses incurred with the acquisition of investments in Group companies are recorded as cost when they are incurred.
Investments in Joint Ventures (companies in which the Company has, General Meeting of or in which it has the control over the financial and joint ventures', at acquisition cost in accordance with IAS 27, as such, Sonaecom presents, separately, consolidated financial statements in accordance with IAS / IFRS.
Loans and supplementary capital granted to companies jointly controlled , with maturities, estimated or defined contractually, greater than one year, are recorded, at their nominal value, under the -
Investments and loans granted to joint ventures are evaluated whenever an event or change of circumstances indicates that the recorded amount may not be recoverable or impairment losses recorded in previous years no longer exist.
Impairment losses estimated for investments and loans granted to joint ventures are recorded, in the period that they are estimated, under the caption statement.
The expenses incurred with the acquisition of investments in joint ventures are recorded as cost when they are incurred.
The Company classifies its financial instruments in the following -to- -forwhich the investments were acquired.
The classification of the investments is determined at the initial recognition and re-evaluated every quarter.
This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if it is acquired principally for the purpose of selling in the short term or if the adoption of this method allows reducing or eliminating an accounting mismatch. Derivatives are also registered as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to mature within 12 months of the balance sheet date.
Loans and receivables are non-derivative financial assets with fixed or variable payments that are not quoted in an active market. These financial investments arise when the Company provides money or services directly to a debtor with no intention of trading the receivable.
Loans and receivables are carried at amortised cost using the effective interest method, deducted from any impairment losses.
Loans and receivables are recorded as current assets, except when its maturity is greater than 12 months from the balance sheet date, a situation in which they are classified as non-current assets.
Held-to-maturity investments are non-derivative financial assets with fixed or variable payments and with fixed maturities that the hold until their maturity.
Available-for-sale financial assets are non-derivative investments that are either designated in this category or not classified in any of the other above referred categories. They are included in non-current assets unless management intends to dispose them within 12 months of the balance sheet date.
Purchases and sales of investments are recognised on trade-date the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value are recorded in the income statement. Investments are derecognised when the rights to receive cash flows from the investments have expired or transferred, and consequently all substantial risks and rewards of their ownership have been transferred.
Available-forntly carried at fair value.
-tocarried at amortised cost using the effective interest method.
Realised and unrealised gains and losses arising from changes in the fair value of financial assets classified at fair value through profit or loss are recognised in the income statement.
Realised and 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 securities classified as available-forsale are sold or impaired, the accumulated fair value adjustments are included in the profit and loss statement as gains or losses from investment securities.
The fair value of quoted investments is based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Company establishes fair value by using valuation transactions, reference to similar instruments, discounted cash flow specific circumstances. If none of these valuation techniques can be used, the Company values these investments at acquisition cost net of any identified impairment losses. The fair value of listed investments is determined based on the closing Euronext share price at the balance sheet date.
The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In case of equity securities classified as available-for-sale, a significant decline (above 25%) or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If such evidence exists for available-forsale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment losses on that financial asset previously recognised in the profit or loss statement is removed from equity and recognised in the profit and loss statement. Impairment losses recognised in the profit and loss statement on equity securities are not reversed through the profit and loss statement.
Lease contracts are classified as financial leases, if, in substance, all risks and rewards associated with the detention of the leased asset are transferred by the lease contract or as operational leases, if, in substance, there is no transfer of risks and rewards associated with the detention of the leased assets.
The lease contracts are classified as financial or operational in accordance with the substance and not with the form of the respective contracts.
Tangible assets acquired under finance lease contracts and the related liabilities are recorded in accordance with the financial method. Under this method the tangible assets, the corresponding accumulated depreciation and the related liability are recorded in accordance with the contractual financial plan at fair value or, if less, at the present value of payments. In addition, interest included in lease payments and depreciation of the tangible assets are recognised as expenses in the profit and loss statement for the period to which they relate.
Assets under long-term rental contracts are recorded in accordance with the operational lease method. In accordance with this method, the rents paid are recognised as an expense, over the rental period.
Other current debtors are recorded at their net realisable value, and do not include interest, because the financial updated effect is not significant.
The amount relating to this caption is presented net of any impairment losses, which are recorded in the profit and loss Future reversals of impairment losses are recorded in the profit and
correspond to amounts held in cash and term bank deposits and other treasury applications where the risk of any change in value is insignificant.
The cash flow statement has been prepared in accordance with IAS 7 that mature in less than three months, for which the risk of change in cash flow statement also includes bank overdrafts, which are reflected in the balanc -term loans and other
The cash flow statement is classified by operating, financing and investing activities. Operating activities include payments to personnel and other captions relating to operating activities.
Cash flows from investing activities include the acquisition and sale of investments in associated and subsidiary companies and receipts and payments resulting from the purchase and sale of tangible assets.
Cash flows from financing activities include payments and receipts relating to loans obtained and finance lease contracts.
All amounts included under this caption are likely to be realised in the short term and there are no amounts given or pledged as guarantee.
Loans are recorded as liabilities by t expenses incurred in setting up loans are recorded as a deduction to the nominal debt and recognised during the period of the financing, based on the effective interest rate method. The interests incurred but not yet due are added to the loans caption until their payment.
j) Financial expenses relating to loans obtained
Financial expenses relating to loans obtained are generally recognised as expenses at the time they are incurred. Financial expenses related to loans obtained for the acquisition, construction or production of fixed assets are capitalised as part of the cost of the assets. These expenses are capitalised starting from the time of preparation for the construction or development of the asset and are interrupted when the assets are ready to operate, at the end of the production or construction phases or when the associated project is suspended.
The Company only uses derivatives in the management of its financial risks to hedge against such risks. The Company does not use derivatives for trading purposes.
The cash flow hedges used by the Company are related to:
(i) Interest rate swaps operations to hedge against interest rate risks on loans obtained. The amounts, interest payment dates and repayment dates of the underlying interest rate swaps are similar in all respects to the conditions established for the contracted loans. Changes in the fair value of cash flow hedges are recorded in assets or Hedging
values and times periods involved are identical to the amounts invoiced and their maturities.
In cases where the hedge instrument is not effective, the amounts that arise from the adjustments to fair value are recorded directly in the profit and loss statement.
At 31 of December 2014 and 2013, the Company did not have any derivative, beyond those mentioned in note 1.t).
Provisions are recognised when, and only when, the Company has a present obligation (either legal or implicit) resulting from a past event, the resolution of which is likely to involve the disbursement of funds by an amount that can be reasonably estimated.
Provisions are reviewed at the balance sheet date and adjusted to reflect the best estimate at that date.
Provisions for restructurings are only registered if the Company has a detailed plan and if that plan has already been communicated to the parties involved.
Contingent liabilities are not recognised in the financial statements but are disclosed in the notes, except if the possibility of a cash outflow affecting future economic benefits is remote.
Contingent assets are not recognised in the financial statements but are disclosed in the notes when future economic benefits are likely to occur.
and deferred tax. Income tax is recognised in accordance with IAS 12
Sonaecom has adopted, since 1 January 2008, the special regime for the taxation of groups of companies, under which, the provision for income tax is determined on the basis of the estimated taxable income of all the companies covered by that regime, in accordance with such rules. The special regime for the taxation of groups of companies covers all direct or indirect subsidiaries, and even through companies resident in another Member State of the European Union or the European Economic Area, only if, in the last case, there is an obligation of administrative cooperation, on which the Group holds at least 75% of their share capital, where such participation confers more than 50% of voting rights, if meet certain requirements.
Deferred taxes are calculated using the liability method and reflect the timing differences between the amount of assets and liabilities
for accounting purposes and the respective amounts for tax purposes.
Deferred tax assets are only recognised when there is reasonable expectation that sufficient taxable profits shall arise in the future to allow such deferred tax assets to be used. At the end of each period, the recorded and unrecorded deferred tax assets are revised and they are reduced whenever their realisation ceases to be probable, or increased if future taxable profits are likely enabling the recovery of such assets (note 9).
Deferred taxes are calculated with the tax rate that is expected to be in effect at the time the asset or liability is realized, based on the rates that have been enacted or substantially enacted at the balance sheet date.
Whenever deferred taxes derive from assets or liabilities directly ds caption. In all other situations, deferred taxes are always registered in the profit and loss statement.
Expenses and income are recorded in the period to which they relate, regardless of their date of payment or receipt. Estimated amounts are used when actual amounts are not known.
The costs attributable to current period and whose expenses will only occur in future periods are estimated and recorded under the caption possible to estimate reliably the amount and the timing of occurrence of the expense. If there is uncertainty regarding both the date of disbursement of funds, and the amount of the obligation, the value is classified as Provisions (note 1.l)).
Non-current financial assets and liabilities are recorded at fair value and, in each period, the financial actualisation of the fair value is
Dividends are recognised when the S such amounts are appropriately established and communicated.
Assets and liabilities due in more than one year from the date of the balance sheet are classified, respectively, as non-current assets and non-current liabilities.
In addition, considering their nature, the deferred taxes and the provisions for other liabilities and charges, are classified as noncurrent assets and liabilities (notes 9 and 16).
Portuguese commercial legislation requires that at least 5% of the annual net profit must be appropriated to a legal reserve, until such reserve reaches at least 20% of the share capital. This reserve is not distributable, except in case of liquidation of the Company, but may be used to absorb losses, after all the other reserves are exhausted, or to increase the share capital.
The share premiums relate to premiums generated in the issuance of capital or in capital increases. According to Portuguese law, share ie, they are not distributable, except in case of liquidation, but they can be used to absorb losses, after all the other reserves are exhausted or to increase share capital.
According to IFRS 2 related with the equity settled plans is registered, as a credit, under the caption of Medium Term Incentive Plan Reserves, which are not distributable and which cannot be used to absorb losses.
During the year ended at 31 December 2014, due to the conversion of the existing Sonaecom share plans on Sonae SGPS shares and the amount registered in t -term incentives plans
hedges derivatives that are considered effective (note 1.k) and it is non-distributable nor can it be used to absorb losses.
The own shares reserve reflects the acquisition value of the own shares and follows the same requirements of legal reserves.
Additionally, the increments resulting from the application of fair value through equity components, including its implementation through the net results, shall be distributed only when the elements that gave rise to them are sold, liquidated or exercised when they finish their use, in the case of tangible or intangible assets.
Therefore, at 31 December 2014, Sonaecom, SGPS, S.A., had free distributable reserves amounting to approximately Euro 26.5 million. To this effect were considered distributable increments resulting from the application of fair value through equity components already exercised during the period ended at 31 December 2014.
or losses related to the sale of own shares are recorded under the
All assets and liabilities expressed in foreign currency were translated into Euro using the exchange rates in force at the balance sheet.
Favourable and unfavourable foreign exchange differences resulting from changes in the rates in force at transaction date and those in force at the date of collection, payment or at the balance sheet date
are recorded as income and expenses in the profit and loss statement of the period, in financial results.
The following rates were used for the translation into Euro:
| 2014 | 2013 | |||
|---|---|---|---|---|
| 31 December | Average | 31 December | Average | |
| Pounds Sterling | 1.2839 | 1.2407 | 1.1995 | 1.1780 |
| Swiss franc | 0.8317 | 0.8233 | 0.8146 | 0.8125 |
| Swedish krona | 0.1065 | 0.1099 | 0.1129 | 0.1156 |
| American Dollar | 0.8237 | 0.7538 | 0.7251 | 0.7533 |
Impairment tests are performed at the date of each balance sheet and whenever an event or change of circumstances indicates that the recorded amount of an asset may not be recoverable.
Whenever the book value of an asset is greater than the amount recoverable, an impairment loss is recognised and recorded in the or under the assets. The amount recoverable is the greater of the net selling price and the value of use. Net selling price is the amount obtained upon the sale of an asset in a transaction within the capability of the parties involved, less the costs directly related to the sale. The value of use is the present amount of the estimated future cash flows expected to result from the continued use of the asset and of its sale at the end of its useful life. The recoverable amount is estimated for each asset individually or, if this is not possible, for the cashgenerating unit to which the asset belongs.
For financial investments in Group companies, the recoverable amount, calculated in terms of value in use, is determined based on last business plans duly approved by the Board of Directors of the Company.
For financial investments in joint ventures, the recoverable amount is determinated taking into account with several information as business plans approved by the Board of Directors and the average ratings of external reviewers (researches).
Evidence of the existence of impairment in accounts receivables appears when:
t) Medium-term incentive plans
The accounting treatment of Medium Term Incentive Plans is based on IFRS 2 -
Under IFRS 2, when the settlement of plans established by the own shares, the estimated responsibility is recorded, as a credit entry, under the
loss statement.
The quantification of this responsibility is based on its fair value at the attribution date and is recognised over the vesting period of each plan (from the award date of the plan until its vesting or settlement date). The total responsibility, at any point in time, is calculated the respective accounting date.
When the responsibilities associated with any plan are covered by a hedging contract, ie, when those responsibilities are replaced by a fixed amount payable to a third party and when Sonaecom is no longer the party that will deliver the Sonaecom shares, at the settlement date of each plan, the above accounting treatment is subject to the following changes:
For plans settled in cash, the estimated liability is recorded under the cap quantified based on the fair value of the shares as of each balance sheet date.
When the liability is covered by a hedging contract, recognition is made in the same way as described above, but with the liability being quantified based on the contractually fixed amount.
Equity-settled plans to be liquidated through the delivery of shares of Sonae SGPS are recorded as if they were settled in cash, which means that the estimated liability is recorded under the balance for the cost relating to the deferred period elapsed. The liability is quantified based on the fair value of the shares as of each balance sheet date.
For 2011 Sonaecom shares plan, the Company was signed with Sonae-SGPS, S.A., a contract that agrees to the transfer of Sonaecom, SGPS, S.A. shares for employees and board members of the Group as requested by Sonaecom and under the MTIP of This contract ceased during the year of 2014.
For Sonaecom shares plans, the company converted all such plans into shares of Sonae SGPS.
The impacts associated to the Medium Term Incentive Plans are registered, in the balance sheet, under the caption ´Other current liabilities' and 'Other non-current liabilities'. The cost is recognized (Note28).
On 31 December 2014, the two Sonae SGPS share plans resulting from the conversion were covered by portfolio shares of the parent company. The plan allocated during the year is not covered and the responsibility is recorded at the fair value. The responsibility of all statement under
Events occurring after the date of the balance sheet which provide additional information about conditions prevailing at the time of the balance sheet (adjusting events) are reflected in the financial statements. Events occurring after the balance sheet date that provide information on post-balance sheet conditions (non-adjusting events), when material, are disclosed in the notes to the financial statements.
The most significant accounting estimates reflected in the financial statements of the years ended at 31 December 2014 and 2013 include mainly impairment analysis of assets, particularly financial investments in Group companies.
Estimates used are based on the best information available during the preparation of financial statements and are based on the best knowledge of past and present events. Although future events are not controlled by the Company neither foreseeable, some could occur and have impact on the estimates. Changes to the estimates used by the management that occur after the approval date of these financial statements, will be recognised in net income, in accordance with IAS 8 pective methodology.
The main estimates and assumptions in relation to future events included in the preparation of financial statements are disclosed in the respective notes.
f financial risks such as market risk, liquidity risk and credit risk.
These risks arise from the unpredictability of financial markets, which financial risk management, subject to a long-term ongoing perspective, seeks to minimise potential adverse effects that derive from that uncertainty, using, every time it is possible and advisable, derivative financial instruments to hedge the exposure to such risks (note 1.k)).
The Company is also exposed to equity price risks arising from equity investments, although they are usually maintained for strategic purposes.
Foreign exchange risk management seeks to minimise the volatility of investments and transactions made in foreign currency and contributes to reduce the sensitivity of results to changes in foreign exchange rates.
Whenever possible, the Company uses natural hedges to manage exposure, by offsetting credits granted and credits received expressed in the same currency. When such procedure is not possible, the Company adopts derivative financial hedging instruments (note 1. k).
Considering the reduced values of assets and liabilities in foreign currency, the impact of a change in exchange rate will not have significant impacts on the financial statements.
cost of debt to a high risk of volatility. The impact of this volatility in the Company results or in its Shareholders´ funds is mitigated by the effect of the following factors: (i) relatively low level of financial leverage; (ii) possibility to use derivative instruments that hedge the interest rate risk, as mentioned below; (iii) possible correlation between the level of market interest rates and economic growth the and in this way partially offsetting the increase of financial costs d alone or consolidated liquidity which is also bearing interest at a variable rate.
The Company only uses derivatives or similar transactions to hedge interest rate risks considered significant. Three main principles are followed in all instruments selected and used to hedge interest rate risk:
ble rates, interest rate swaps and other derivatives are used to hedge future changes in cash flow relating to interest payments, when it is considered necessary. Interest rate swaps have the financial effect of converting the respective borrowings from floating rates to fixed rates. Under the interest rate swaps, the Company agrees with third parties (banks) to exchange, in pre-determined periods, the difference between the amount of interest calculated at the fixed contract rate and the floating rate at the time of re-fixing, by reference to the respective agreed notional amounts.
In order to select the counterparty for occasional operations, Sonaecom requests proposals and indicative prices from a representative number of banks in order to ensure adequate competitiveness of these operations.
In determining the fair value of hedging operations, the Company uses certain methods, such as option valuation and discounted future cash flow models, using assumptions based on market interest rates prevailing at the balance sheet date. Comparative financial institution quotes for the specific or similar instruments are used as a benchmark for the valuation.
The fair value of the derivatives contracted, that are considered as fair value hedges or the ones that are considered not sufficiently effective for cash flow hedge (in accordance with the provisions established in IAS 39 borrowings captions and changes in the fair value of such derivatives are recognised directly in the profit and loss statement for the period. The fair value of derivatives of cash flow hedge, that are considered effective according to IAS 39 under borrowing captions and changes in the fair value are recognised in equity.
the financing with significant impact in the Company, based on the analysis of the debt structure, the risks and the different options in the market, particularly as to the type of interest rate (fixed / variable). Under the policy defined above, the Executive Committee is responsible for the decision on the occasional interest rate hedging contracts, through the monitoring of the conditions and alternatives existing in the market.
On 31 Decembre 2014, are not contracted any derivatives instruments of hedging of the interest rate changes.
The existence of liquidity in the Company requires the definition of some policies for an efficient and secure management of the liquidity, allowing us to maximise the profitability and to minimise the opportunity costs related with that liquidity.
The liquidity risk management has a threefold objective: (i) Liquidity, ie, to ensure the permanent access in the most efficient way to obtain sufficient funds to settle current payments in the respective dates of maturity as well as any eventual not forecasted requests for funds, in the deadlines set for this; (ii) Safety, ie, to minimise the probability of default in any reimbursement of application of funds; and (iii) Financial efficiency, ie, to ensure that the Company maximises the value/ minimise the opportunity cost of holding excess liquidity in the short term.
The existing liquidity should be applied to the alternatives and by the order described below:
The applications in the market are limited to eligible counterparties, with ratings previously established by the Board and limited to certain maximum amounts by counterparty.
The definition of maximum amounts intends to assure that the application of liquidity in excess is made in a prudent way and taking into consideration the best practices in terms of bank relationships.
The maturity of applications should equalise the forecasted payments (or the applications should be easily convertible, in case of asset investments, to allow urgent and not estimated payments), considering a threshold for eventual deviations on the estimates. The threshold depends on the accuracy level of treasury estimates and would be determined by the business. The accuracy of the treasury estimates is an important variable to quantify the amounts and the maturity of the applications in the market.
The maturity of each class of financial liabilities is presented in note 15.
accounts receivable related to current operational activities. The credit risk associated to financial operations is mitigated by the fact that the Company only negotiates with entities with high credit quality.
The management of this risk seeks to guarantee that the amounts owing are effectively collected within the periods negotiated without affecting the financial health of the Company.
The amounts included in the financial statements related to other current debtors, net of impairment losses, represent the maximum exposure of the Company to credit risk.
The movement in tangible assets and in the corresponding accumulated depreciation and impairment losses in the years ended at 31 December 2014 and 2013 was as follows:
| 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Buildings and | ||||||||
| other | Plant and | Fixtures and | Other tangible | |||||
| constructions | machinery | Vehicles | Tools | fittings | assets | Work in progress | Total | |
| Gross assets | ||||||||
| Balance at 31 December 2013 | 348,914 | 43,858 | 22,060 | 171 | 242,718 | 104 | - | 657,825 |
| Additions | - | - | - | - | - | - | 1,600 | 1,600 |
| Disposals | - | - | - | - | - | - | - | - |
| Transfers and write-offs Balance at 31 December 2014 |
(1,706) 347,208 |
- 43,858 |
- 22,060 |
- 171 |
- 242,718 |
- 104 |
- 1,600 |
(1,706) 657,719 |
| Accumulated depreciation | ||||||||
| and impairment losses | ||||||||
| Balance at 31 December 2013 | 325,938 | 43,643 | 2,298 | 171 | 232,961 | 104 | - | 605,115 |
| Depreciation for the year | 4,213 | 7 2 | 5,515 | - | 4,474 | - | - | 14,274 |
| Transfers and write-offs | (342) | - | - | - | - | - | (342) | |
| Balance at 31 December 2014 | 329,809 | 43,715 | 7,813 | 171 | 237,435 | 104 | - | 619,047 |
| Net value | 17,399 | 143 | 14,247 | - | 5,283 | - | 1,600 | 38,672 |
| 2013 | ||||||||
| Buildings and | ||||||||
| other | Plant and | Fixtures and | Other tangible | |||||
| constructions | machinery | Vehicles | Tools | fittings | assets | Work in progress | Total | |
| Gross assets | ||||||||
| Balance at 31 December 2012 | 722,909 | 46,685 | - | 171 | 333,756 | 104 | - | 1,103,625 |
| Additions | - | - | 22,060 | - | 3,669 | - | - | 25,729 |
| Disposals | (373,995) | (2,827) | - | - | (94,707) | - | - | (471,529) |
| Balance at 31 December 2013 | 348,914 | 43,858 | 22,060 | 171 | 242,718 | 104 | - | 657,825 |
| Accumulated depreciation | ||||||||
| and impairment losses | ||||||||
| Balance at 31 December 2012 | 486,209 | 40,497 | - | 171 | 280,140 | 104 | - | 807,121 |
| Depreciation for the year | 38,653 | 5,207 | 2,298 | - | 17,185 | - | - | 63,343 |
| Disposals | (198,924) | (2,061) | - | - | (64,364) | - | - | (265,349) |
| Balance at 31 December 2013 | 325,938 | 43,643 | 2,298 | 171 | 232,961 | 104 | - | 605,115 |
Net value 22,976 215 19,762 - 9,757 - - 52,710
The movement in intangible assets and in the corresponding accumulated amortisation and impairment losses in the years ended at 31 December 2014 and 2013 was as follows:
| 2014 | ||||
|---|---|---|---|---|
| Brands, patents and other rights |
Software | Intangible assets in progress |
Total | |
| Gross assets | ||||
| Balance at 31 December 2013 | 9,719 | 192,404 | - | 202,123 |
| Additions | - | - | 498 | 498 |
| Balance at 31 December 2014 | 9,719 | 192,404 | 498 | 202,621 |
| Accumulated amortisation and impairment losses | ||||
| Balance at 31 December 2013 | 9,719 | 185,312 | - | 195,031 |
| Amortisation for the year | - | 1,505 | - | 1,505 |
| Balance at 31 December 2014 | 9,719 | 186,817 | - | 196,536 |
| Net value | - | 5,587 | 498 | 6,085 |
| 2013 | ||||
|---|---|---|---|---|
| Brands, patents | Intangible assets | |||
| and other rights | Software | in progress | Total | |
| Gross assets | ||||
| Balance at 31 December 2012 | 9,719 | 190,031 | 2,373 | 202,123 |
| Transfers | - | 2,373 | (2,373) | - |
| Balance at 31 December 2013 | 9,719 | 192,404 | - | 202,123 |
| Accumulated amortisation and impairment losses | ||||
| Balance at 31 December 2012 | 9,339 | 183,474 | - | 192,813 |
| Amortisation for the year | 380 | 1,838 | - | 2,218 |
| Balance at 31 December 2013 | 9,719 | 185,312 | - | 195,031 |
| Net value | - | 7,092 | - | 7,092 |
At 31 December 2014 and 2013, the breakdown of financial instruments was as follows:
| 2014 | ||||||
|---|---|---|---|---|---|---|
| Financial assets | ||||||
| at fair value | ||||||
| Loans and | through profit | Other financial | Others not | |||
| receivables | or loss | assets | Subtotal | covered by IFRS 7 | Total | |
| Non-current assets | ||||||
| Financial assets at fair value through profit or loss (note 7) | - | 1,424,996 | - | 1,424,996 | - | 1,424,996 |
| Other non-current assets (note 8) | 165,651,236 | - | - | 165,651,236 | 4,993,935 | 170,645,171 |
| 165,651,236 | 1,424,996 | - | 167,076,232 | 4,993,935 | 172,070,167 | |
| Current assets | ||||||
| Financial assets at fair value through profit or loss (note 7) | - | 58,540,576 | - | 58,540,576 | - | 58,540,576 |
| Other trade debtors (note 10) | 1,891,356 | - | - | 1,891,356 | 1,841,542 | 3,732,898 |
| Other current assets (note 11) | - | - | 428,812 | 428,812 | 89,069 | 517,881 |
| Cash and cash equivalents (note 12) | 176,887,883 | - | - | 176,887,883 | - | 176,887,883 |
| 178,779,239 | 58,540,576 | 428,812 | 237,748,627 | 1,930,611 | 239,679,238 | |
| 2013 | ||||||
|---|---|---|---|---|---|---|
| Financial assets | ||||||
| at fair value | ||||||
| Loans and | through profit | Other financial | Others not | |||
| receivables | or loss | assets | Subtotal | covered by IFRS 7 | Total | |
| Non-current assets | ||||||
| Other-non current assets (note 8) | 175,735,246 | - | - | 175,735,246 | - | 175,735,246 |
| 175,735,246 | - | - | 175,735,246 | - | 175,735,246 | |
| Current assets | ||||||
| Financial assets at fair value through profit or loss (note 7) | - | 202,442,350 | - | 202,442,350 | - | 202,442,350 |
| Other trade debtors (note 10) | 17,119,404 | - | - | 17,119,404 | 2,643,926 | 19,763,330 |
| Other current assets (note 11) | - | - | 379,145 | 379,145 | 136,084 | 515,229 |
| Cash and cash equivalents (note 12) | 185,918,581 | - | - | 185,918,581 | - | 185,918,581 |
| 203,037,985 | 202,442,350 | 379,145 | 405,859,480 | 2,780,010 | 408,639,490 |
| 2014 | |||||
|---|---|---|---|---|---|
| Liabilities | |||||
| recorded at | Other financial | Others not | |||
| amortised cost | liabilities | Subtotal | covered by IFRS 7 | Total | |
| Non-current liabilities | |||||
| Other non-current liabilities (note 17) | - | - | - | 399,254 | 399,254 |
| - | - | - | 399,254 | 399,254 | |
| Current liabilities | |||||
| Short-term loans and other loans (note 15) | 87,859 | - | 87,859 | - | 87,859 |
| Other creditors (note 18) | - | 1,040,710 | 1,040,710 | 24,840 | 1,065,550 |
| Other current liabilities (note 19) | - | 575,899 | 575,899 | 1,115,463 | 1,691,362 |
| 87,859 | 1,616,609 | 1,704,468 | 1,140,303 | 2,844,771 | |
| 2013 | |||||
| Liabilities | |||||
| recorded at | Other financial | Others not | |||
| amortised cost | liabilities | Subtotal | covered by IFRS 7 | Total | |
| Non-current liabilities | |||||
| 20,003,496 | - | 20,003,496 | - | 20,003,496 | |
| Other non-current liabilities (note 17) | - | - | - | 370,948 | 370,948 |
| 20,003,496 | - | 20,003,496 | 370,948 | 20,374,444 | |
| Current liabilities | |||||
| Short-term loans and other loans (note 15) | 21,660,813 | - | 21,660,813 | - | 21,660,813 |
| Other creditors (note 18) | - | 7,199,301 | 7,199,301 | 108,972 | 7,308,273 |
ell as the specialized costs with share plans were - - -financial instrument.
Other current liabilities (note 19) - 2,711,843 2,711,843 334,477 3,046,320
21,660,813 9,911,144 31,571,957 443,449 32,015,406
ed cost or registered at the present value of the payments does not differ significantly from their book value. This decision is based in the contractual terms of each financial instrument.
At 31 December 2014 and 2013, this caption included the following investments in Group companies:
| Company | 2014 | 2013 |
|---|---|---|
| Sonaetelecom BV | 73,460,618 | 75,009,902 |
| 52,241,587 | 52,241,587 | |
| PCJ - Público, Comunicação e Jornalismo, S.A. ('PCJ') | 11,850,557 | 11,176,547 |
| Sonaecom BV | 10,300,000 | 25,020,000 |
| Público - Comunicação Social, S.A. ('Público') | 10,227,595 | 10,227,595 |
| Sonaecom - Serviços Partilhados, S.A. ('Sonaecom SP') | 50,000 | 50,000 |
| 5,714,245 - |
||
| 158,130,357 | 179,439,876 | |
| Impairment losses (note 16) | (105,338,215) | (112,859,590) |
| Total investments in Group companies | 52,792,142 | 66,580,286 |
* Company liquidated in May 2014.
174
The movements that occurred in investments in this caption during the years ended at 31 December 2014 and 2013 were as follows:
| Company | Balance at 31 December 2013 |
Additions | Disposals | Transfers and write-offs |
Balance at 31 December 2014 |
|---|---|---|---|---|---|
| Sonaetelecom BV | 75,009,902 | - | (1,549,284) | - | 73,460,618 |
| Sonae com SI | 52,241,587 | - | - | - | 52,241,587 |
| PCJ | 11,176,547 | 674,010 | - | - | 11,850,557 |
| Sonaecom BV | 25,020,000 | - | (14,720,000) | - | 10,300,000 |
| Público | 10,227,595 | - | - | - | 10,227,595 |
| Sonaecom SP | 50,000 | - | - | - | 50,000 |
| Miauger* | 5,714,245 | 826,880 | - | (6,541,125) | - |
| 179,439,876 | 1,500,890 | (16,269,284) | (6,541,125) | 158,130,357 | |
| Impairment losses (note 16) | (112,859,590) | (17,154) | 1,986,256 | 5,552,273 | (105,338,215) |
| 66,580,286 | 1,483,736 | (14,283,028) | (988,852) | 52,792,142 |
* Company liquidated in May 2014.
| Company | Balance at 31 December 2012 |
Additions | Disposals | Transfers and write-offs |
Balance at 31 December 2013 |
|---|---|---|---|---|---|
| Optimus SGPS | 1,005,866,218 | - | (1,005,866,218) | - | - |
| Sonaetelecom BV | 75,009,902 | - | - | - | 75,009,902 |
| Sonae com SI | 52,241,587 | - | - | - | 52,241,587 |
| Sonaecom BV | 25,020,000 | - | - | - | 25,020,000 |
| Miauger * | 4,568,100 | 1,146,145 | - | - | 5,714,245 |
| Público | 3,738,230 | 6,489,365 | - | - | 10,227,595 |
| PCJ | 3,551,772 | 7,624,775 | - | - | 11,176,547 |
| Sonaecom SP | 50,000 | - | - | - | 50,000 |
| 1,170,045,809 | 15,260,285 | (1,005,866,218) | - | 179,439,876 | |
| Impairment losses (note 16) | (97,197,713) | (15,661,877) | - | - | (112,859,590) |
| 1,072,848,096 | (401,592) | (1,005,866,218) | - | 66,580,286 |
* Company liquidated in May 2014.
Following the announcement made, on 14 December 2012, between Sonaecom, SGPS, S.A., Kento Holding Limited and Jadeium BV (currently named Unitel International Holdings Multimédia J participation in Optimus SGPS, S.A. to ZOPT,SGPS, S.A. (vehicle used for this purpose), conditional upon completion of the merger.
Thus, following the above mentioned agreement, on 27 August 2013, and after fulfilling all the remedies required to the operation, the merger was closed. Sonaecom considers this to be the date on which Zopt took control of Zon Optimus (presently NOS, SGPS changed the name in June 2014). Accordingly, in the same day, it was registered the capital increase in kind with the transference of 81.807% Zopt, as well as shareholder loans to be received from Zopt amounting to Euro 230 million (note 8), which would later be converted on supplementary capital and reduced to Euro 115 million. Additionally, the remaining stake of 18.193% in Optimus SGPS, was converted into a minority stake of 7.28% in NOS (note 7).
not to acquire any shares of NOS, with the exception of the shares acquired by Sonaecom as a result of the operation.
ger, and for a period of three months, the Group Kento / Jadeium may exercise a call option over half of the shares of NOS that Sonaecom holds at the date of the exercise of call option, at a price equal to the weighted average price of the previous month.
After the share capital increase of Zopt and the closing of the merger between Optimus SGPS and Zon, Sonaecom derecognised an investment in Optimus SGPS amounting to Euro 1,006 million and the supplementary capital amounting to Euro 144.6 million (note 8). Sonaecom has also recognized an investment in Zopt amounting to Euro 598 million2 (note 6), loans to be received from Zopt amounting Euro 230 million and an investment registered at fair value through NOS shares (the conversion of 20,921,650 Optimus SGPS shares, representing 18.193% of the share capital, to 37,489,324 NOS shares, representing 7.28% of the share capital), at the market price of 27 August 2013 (date of the closing of the merger), amounting to Euro 156 million (note 7).
Thus, as a result of the derecognition of the financial investment in Optimus SGPS, the recognition of the investments in Zopt and NOS, and the loans to be received from Zopt, it was registered in 2013 a capital loss of 167 million euros (note 23).
er and PCJ, respectively, correspond to increases in capital to cover losses.
In the period ended at 31 December 2014, the amounts and Sonaecom BV, correspond to reimbursement of shares. 'Transfers and uses', in the amount of Euro 6,541,125, correspond to the derecognition of the investment in Miauger, dissolved on May 2014.
In the year ended at 31 December 2013, the amounts of Euro 7,624,774 and Euro 6,489,365 under the captio respectively, relates to increases of share capital and the amount of Euro 1,146,145 in Miauger relates to an increase of capital to cover losses.
The Company presents separate consolidated financial statements at 31 December 2014, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, which presents total consolidated assets of Euro 1,095,839,670 total consolidated liabilities of ,711 including a consolidated net profit (attributable to the Shareholders of the parent company Sonaecom, SGPS, S.A.) for the year ended at 31 December 2014 of Euro 27,958,229.
At 31 December 2014 and 2013, the main financial information regarding the subsidiaries and joint ventures directly owned by the company is, as follows (values in accordance with IFRS):
| 2014 | 2013 | ||||||
|---|---|---|---|---|---|---|---|
| Company | Head office | % holding | funds | Net profit / (loss) | % holding | funds | Net profit / (loss) |
| ZOPT (a) (note 6) | Matosinhos | 50% | 2,546,265,994 | 62,844,160 | 50% | 2,511,749,899 | (1,153,082) |
| Sonae com SI | Maia | 100% | 83,742,146 | 5,215,847 | 100% | 86,001,299 | 1,449,651 |
| Sonaecom BV | Amsterdam | 100% | 357,278 | 115,877 | 100% | 14,961,401 | 381,558 |
| PCJ | Maia | 100% | 1,504,008 | 264,562 | 100% | 1,239,445 | (674,010) |
| Sonaetelecom BV | Amsterdam | 100% | 46,517 | (21,629) | 100% | 1,617,430 | 1,557 |
| Miauger (b) | Maia | - | - | - | 100% | 221,974 | (826,880) |
| Sonaecom SP | Maia | 100% | 83,993 | 677 | 100% | 83,316 | 33,280 |
| Público | Maia | 100% | 268,264 | (2,588,364) | 100% | 169,234 | (2,063,171) |
(a) Values of 2013 restated.
(b) Company liquidated in May 2014.
The evaluation of the existence of impairment losses for the main goodwill is made by taking into account the cash-generating units, based on most up-to-date business plans duly approved by the Board of Director - of the group, which are made on an annual basis unless there is evidence of impairment and prepared according to projected cash flows for periods of five years. In the area of information systems, the assumptions used are essentially based on the various businesses of the Group and the growth of the several geographic areas where the Group operates. The average growth rate, for the area of multimedia, was 2.0%. The average growth rate for the turnover of the 5 years was 12.6%. This improvement due industries and the recent focus on the security market that are in a strong increase. The
2 The Zopt participation of 598 million euros (598 = ((2.850 X 50,01% )-230)X 50%) results from the valuation of NOS, amounting to 2,850 million euros. This corresponds to the sum of the valuation of the capital increase in Zopt by Zon and Optimus in 1,500 million euros and 1,000 million euros, respectivetly (the valuation was made by the entities involved in the capital increase and the merger project) and the minimum synergies estimated, disclosed in the merger project in the amount of 350 million euros, deducted from loans totaling 230 million euros (level 3 of inputs in the hierarchy of NOS (the argument for not using the Zon share price at the date of the close of the merger, as abovementioned, is proven by the positive evolution of NOS share price since the date of the merger until the date of this document (2,782 million euros versus 2,141, price at 27 August 2013, merger date). For this reason, the market capitalization of Zon was not considered as a reference for valuing the Zopt investment. The valuation of Zon and Optimus was based on rating results and investment. For this purpose, was used a weighted average cost of capital of 9.5% and growth rate of 3%.
discount rates used were based on the estimated weighted average cost of capital, which depends on the business segment of each subsidiary, and are as indicated in the table below. In perpetuity, is considered a growth rate of about 2% in the area of information systems and 0% in the area of multimedia. In situations where the measurement of the existence, or not, of impairment is made based on the net selling price, values of similar transactions and other proposals made are used. Regarding the area of telecommunications (Zopt), the assessment of whether or not the impairment is determinated taking into account with several information as business plans approved by the Board of Directors, whose implicit average growth rate of the operating margin is 2.7%, and the average ratings of external reviewers(researches).
| Information Systems | Multimedia | Telecommunications | |
|---|---|---|---|
| Assumptions | |||
| Basis of recoverable amount | Value in use | Value in use | Value in use |
| Discount rate | 10.5% | 9.0% | 8.2% |
| Growth rate in perpetuity | 2.0% | 0.0% | 2.0% |
During the year ended at 31 December 2014, was made a discount rate revaluation used, this rate was changed for 10.5% (13% in 2013) in the area of information systems, for 9% (12% in 2013) in the area of multimedia and for 8.2% (9% in 2013) in the area of telecommunication. In information systems area was also revaluated the growth rate used, this rate was changed for a more conservative rate of 2% (3% in 2013).
The analyses of the impairment indices and the review of the impairment projections and tests have not lead to clearance losses, during the year ended on 31 December 2014. For the sensitivity analyses made, required in the IAS 36 - Impairment of Assets, have not lead to material changes of the recoveries, so not result material additional impairments.
At 31 December 2014 e 2013, this caption included the following investments in joint ventures:
| Company | 2014 | 2013 |
|---|---|---|
| ZOPT, SGPS, S.A. ('ZOPT') (note 5) | 597,666,944 | 597,666,944 |
*Company established in December 2012
The movements that occurred in this caption during the years ended at 31 December 2014 and 2013 were as follows:
| Company | Balance at 31 December 2013 |
Additions | Disposals | Transfers and write-offs |
Balance at 31 December 2014 |
|---|---|---|---|---|---|
| ZOPT | 597,666,944 | - | - | - | 597,666,944 |
| Company | Balance at | Additions | Disposals | Transfers and | Balance at 31 |
| 31 December 2012 | (note 5) | write-offs | December 2013 | ||
| ZOPT | 25,000 | 597,641,944 | - | - | 597,666,944 |
In August 2013, Sonaecom Group began to hold NOS shares recorded at fair value through profit or loss, as a result of the merger between Optimus SGPS and Zon (note 5), since it is the initial classification of an asset held for a sale purpose in a short-t
During the year ended at 31 December 2014, were also acquired Sonae SGPS shares in accordance with the movement described bellow.
The movements occurred in this caption during the year ended at 31 December 2014, were as follows:
| 2014 | ||||||
|---|---|---|---|---|---|---|
| Financial assets at fair value through profit or loss | Opening balance | Increases | Decreases | Fair value adjustments (Note 23) |
Increase and decrease in fair value of shares intended to cover MTIP |
Closing balance |
| NOS* | 202,442,350 | - | (141,650,837) | (3,129,895) | - | 57,661,618 |
| Sonae SGPS | - | 5,522,188 | (2,804,200) | (167,060) | (246,974) | 2,303,954 |
| 202,442,350 | 5,522,188 | (144,455,037) | (3,296,955) | (246,974) | 59,965,572 | |
| Recorded under the caption non current assets (note 4) | 1,424,996 | |||||
| Recorded under the caption current assets (note 4) | 58,540,576 |
* This company changed its name from ZON Optimius, SGPS, S.A., to NOS, SGPS, S.A., in 2014.
ement (note 23). With the exception of increases and decreases in the fair value of shares intended to cover incentive plans medium term which value is recorded in other captions of the income statement.
The decreases in investments in Sonae SGPS shares, corresponds to the payment of the medium-long term incentive plan expired in the year ended at 31 December 2014.
Decreases at 31 December 2014 represent the counterpart in NOS shares provided fot the terms of trade of the Genreral Public and Voluntary Offer for acquisition of own shares.. As a result of this offering Sonaecom reduced its investment in shares in NOS 26,476,792 shares (Euro 141,650,837) (note 13) and now holds 11,012,532 shares representing the share capital of NOS, corresponding to a share of 2.14%.
The evaluation of fair value of the investment is detail as follows:
| NOS | Sonae SGPS | ||
|---|---|---|---|
| Shares | 11,012,532 | 2,249,955 | |
| Level of inputs in the hierarchy of fair value | Level 1 | ||
| Valuation method | Quoted price on the stock exchange | ||
| Quoted price* | 5.236 | 1.024 | |
| Fair value | 57,661,618 | 2,303,954 |
* Used the share price of 31 December 2014 in the determination of the fair value.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Financial assets | ||
| Medium and long-term loans granted to group companies and joint ventures: | ||
| Sonae com SI | 12,220,000 | 15,655,000 |
| PCJ | 4,345,000 | 4,610,000 |
| Público | 2,435,000 | 1,780,000 |
| Sonaecom SP | 420,000 | - |
| 19,420,000 | 22,045,000 | |
| Supplementary capital: | ||
| Zopt | 115,000,000 | 115,000,000 |
| Sonae com SI | 32,476,791 | 39,951,792 |
| Público | 5,362,405 | 2,182,405 |
| PCJ | 1,189,445 | 1,863,455 |
| Miauger | - | 988,853 |
| 154,028,641 | 159,986,505 | |
| 173,448,641 | 182,031,505 | |
| Accumulated impairment losses (note 16) | (7,797,405) | (6,296,259) |
| Others | 4,993,935 | - |
| 170,645,171 | 175,735,246 |
| 2014 | |||||
|---|---|---|---|---|---|
| Company | Opening balance | Increases | Decreases | Transfers | Closing balance |
| Sonae com SI | 15,655,000 | 9,155,000 | (12,590,000) | - | 12,220,000 |
| PCJ | 4,610,000 | 40,000 | (305,000) | - | 4,345,000 |
| Público | 1,780,000 | 655,000 | - | - | 2,435,000 |
| Sonaecom SP | - | 420,000 | - | - | 420,000 |
| 22,045,000 | 10,270,000 | (12,895,000) | - | 19,420,000 | |
| 2013 | |||||
|---|---|---|---|---|---|
| Company | Opening balance | Increases | Decreases | Transfers | Closing balance |
| Sonae com SI | 15,815,000 | 3,705,000 | (3,865,000) | - | 15,655,000 |
| PCJ | 4,690,000 | - | (80,000) | - | 4,610,000 |
| Público | - | 1,780,000 | - | - | 1,780,000 |
| Sonaecom BV | 2,075,000 | - | (2,075,000) | - | - |
| Optimus SGPS | 312,850,000 | - | (312,850,000) | - | - |
| Zopt | - | 230,000,000 | (115,000,000) | (115,000,000) | - |
| 335,430,000 | 235,485,000 | (433,870,000) | (115,000,000) | 22,045,000 |
| 2014 | |||||
|---|---|---|---|---|---|
| Company | Opening balance | Increases | Decreases | Transfers | Closing balance |
| ZOPT | 115,000,000 | - | - | - | 115,000,000 |
| Sonae com SI | 39,951,791 | - | (7,475,000) | - | 32,476,791 |
| Público | 2,182,405 | 3,180,000 | - | - | 5,362,405 |
| PCJ | 1,863,455 | - | (674,010) | - | 1,189,445 |
| Miauger | 988,853 | - | (988,853) | - | - |
| 159,986,504 | 3,180,000 | (9,137,863) | - | 154,028,641 |
| 2013 | |||||
|---|---|---|---|---|---|
| Company | Opening balance | Increases | Decreases | Transfers | Closing balance |
| ZOPT | - | - | - | 115,000,000 | 115,000,000 |
| Sonae com SI | 39,951,792 | - | - | - | 39,951,792 |
| Público | 7,821,770 | 850,000 | (6,489,365) | - | 2,182,405 |
| PCJ | 9,488,228 | - | (7,624,773) | - | 1,863,455 |
| Miauger | 1,305,000 | 830,000 | (1,146,147) | - | 988,853 |
| Optimus SGPS | 144,630,000 | - | (144,630,000) | - | - |
| 203,196,790 | 1,680,000 | (159,890,285) | 115,000,000 | 159,986,505 |
In the year ended at 31 December 2013, the increase in medium and long-term loans granted to Zopt of Euro 230 million and the decrease in supplementary capital, occurred in Optimus SGPS amounting to Euro 144.6 million, result of the operation explain above in note 5. The decrease in 2013 of Euro 115 million in medium and long-term loans granted to Zopt, result of the disposal of 50% of these loans to Unitel (note 5 and 23). The transfers arise from the capital increase made in Zopt through the conversion of loans amounted Euro 115 million to supplementary capital. The decrease of Euro 313 million in medium and long-term loans granted to Optimus SGPS correspond to the liquidation of the entire loan.
During the years ended at 31 December 2014 and 2013, the loans granted to Group companies and joint ventures earned interest at market rates with an average interest rate of 5.62%. Supplementary capital is non-interest bearing.
Loans granted to Group companies and Supplementary capital, do not have a defined maturity, therefore no information about the aging of these loans is presented.
The evaluation of the existence of impairment losses for the loans made to Group companies was based on the most up-to-date business plans duly tors, which include projected cash flows for periods of five years. The discount rates used and the perpetuity growth considered are presented in the previous note (note 5).
The caption 'Other' corresponds to an amount related to the fact that Sonaecom SGPS, SA has chosen to benefit from the Outstanding of Tax Debt Settlement Scheme, and to Social Security, and carried in 2013, to a payment in the amount of Euro 4,993,935 mainly related to VAT. The Board of Directors believes that these amounts are not due and there are no material liabilities associated that has no provision and that should be disclosed. nature.
At 31 December 2014 and 2013 the value of deferred tax assets not recorded where it is not expected that sufficient taxable profits will be generated in the future to cover those losses, have the following detail:
| 2014 | 2013 | |
|---|---|---|
| Tax losses | 3,239,108 | - |
| Provisions not acceptable for tax purposes, impairment losses and others | 115,185,229 | 120,480,657 |
| CFEI | 151 | 4,563 |
| Total | 118,424,488 | 120,485,220 |
| Deferred tax assets | 26,597,040 | 29,522,324 |
At 31 December 2014 and 2013, the deferred tax assets relating to tax losses carried forward have the following origin dates:
| Year of origin | 2014 | 2013 |
|---|---|---|
| 2014 | 680,213 | - |
| 680,213 | - |
For the year ended at 31 December 2014 the rate to be used to calculate the deferred tax assets/liabilities would be 21% relating to tax losses carried forward, and of 22.5% for remaining deferred tax assets and liabilities, as a consequence of the IRC rate change from 23% to 21% from 2015 onwards. For the year ended at 31 December 2013, the rate to be used to calculate the deferred tax assets/liabilities would be 23% relating to tax losses carried forward, and of 24.5% for remaining deferred tax assets and liabilities, as a consequence of the IRC rate change from 25% to 23% from 2014 onwards.. Tax benefits, related to deductions from taxable income, are considered at 100%, and in some cases, their full acceptance is dependent on the approval of the authorities that concede such tax benefits.
y differences during the estimated period when the referred rate will be applicable.
The reconciliation between the earnings before tax and the tax recorded for the years ended at 31 December 2014 and 2013 is as follows:
| 2014 | 2013 | |
|---|---|---|
| Earnings before tax | 5,382,087 | (89,079,032) |
| Income taxation | (1,237,880) | 22,269,758 |
| Correction of the tax of the previous year and other related taxes | (13,180) | (593,204) |
| Tax provision (notes 16 and 24) | 12,167 | (168,062) |
| Movements in provisions not accepted for tax purposes | 1,221,227 | (1,238,475) |
| Adjustments to the taxable income | 1,197,869 | (23,947,623) |
| Use of losses carried forward, which deferred taxes were not recorded | - | 2,187,255 |
| Other deferred tax assets not registered | (741,490) | - |
| Income taxation recorded in the year (note 24) | 438,713 | (1,490,351) |
The tax rate used to reconcile the tax expense and the accounting profit was 23% (25% in 2013) because it is the standard rate of the corporate income tax in Portugal in 2014.
The adjustments to the taxable income in 2014 relates, mainly, to losses and gains in financial investments and dividends received (note 23), which do not contribute to the calculation of the taxable profit for the year.
Portuguese Tax Authorities can review the income tax returns of the Company for a period of four years (five years for Social Security), except when tax losses have been generated, tax benefits have been granted or when any review, claim or impugnation is in progress, in which circumstances, the periods are extended or suspended. Consequently, tax returns of each year, since the year 2011 (inclusive) are still subject to such review. The Board of Directors believes that any correction that may arise as a result of such review would not produce a significant impact in the accompanying financial statements.
consultants, the Board of Directors believes that there are no liabilities not provisioned in the financial statements, associated to probable tax contingencies that should have been recorded or disclosed in the accompanying financial statements, at 31 December 2014.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| State and other public entities | 1,841,542 | 2,643,926 |
| Other debtors | 1,891,356 | 17,119,404 |
| 3,732,898 | 19,763,330 |
erests receivable 5).
com SGPS, SA to benefit from the scheme of Outstanding Debts Settlement of Tax and Social Security. This amount was transferr the year ended at 31 December 2014 (note 8).
s and taxes to be recovered.
Other debtors and advances to suppliers by age at 31 December 2014 and 2013 are as follows:
| Due without impairment | Due and with impairment | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| From 30 to | More than 90 | From 90 to | From 180 to | More than | |||||
| Total | Not due Until 30 days | 90 days | days | Until 90 days | 180 days | 360 days | 360 days | ||
| 2014 | |||||||||
| Other debtors | 1,891,356 | 176,493 | 54,544 | 909 | 1,659,410 | - | - | - | - |
| 2013 | |||||||||
| Other debtors | 17,119,404 | 1,296,375 | 4,685,020 | 3,212,670 | 7,925,339 | - | - | - |
At the year ended at 31 December 2014, the amounts due without impairment to more than 90 days correspond, mostly, to amounts receiving from Group companies.
The debts of the state and other public entities were not subject detail above, for not being financial assets.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Accrued income | ||
| Interest receivable | 415,350 | 201,875 |
| Invoices to be issued | 7,636 | 26,536 |
| Other accrued income | 5,827 | 150,734 |
| 428,813 | 379,145 | |
| Pluriannual costs | ||
| Insurance | 29,571 | 31,601 |
| Rents | 7,133 | - |
| Other pluriannual costs | 52,364 | 104,483 |
| 89,068 | 136,084 | |
| 517,881 | 515,229 | |
At 31 December 2014 and 2013, the breakdown of cash and cash equivalents was as follows:
| 2014 | 2013 | |
|---|---|---|
| Cash | 1,260 | 811 |
| Bank deposits repayable on demand | 201,623 | 26,252,770 |
| Treasury applications | 176,685,000 | 159,665,000 |
| 176,887,883 | 185,918,581 | |
| Bank overdrafts (note 15) | (87,847) | - |
| 176,800,036 | 185,918,581 |
| 2014 | 2013 | |
|---|---|---|
| Bank applications | 176,665,000 | 156,495,000 |
| Sonaecom BV | 20,000 | - |
| We Do | - | 1,365,000 |
| Público | - | 1,345,000 |
| Saphety | - | 285,000 |
| Sonaecom SP | - | 170,000 |
| PCJ | - | 5,000 |
| 176,685,000 | 159,665,000 |
During the year ended at 31 December 2014, the above mentioned treasury applications bear interests at an average rate of 1.18% (4.46% in 2013).
At 31 December 2014 and 2013, the share capital of Sonaecom was comprised by 311,340,037 and 366,246,868 shares, respectively, corresponding to ordinary registered shares of 0.74 and 1 Euro each. At those dates, the Shareholder structure was as follows:
| 2014 | 2013 | |||
|---|---|---|---|---|
| Number of shares | % | Number of shares | % | |
| Sontel BV | 194,063,119 | 62.33% | 194,063,119 | 52.99% |
| Sonae SGPS | 81,022,964 | 26.02% | 76,679,374 | 20.94% |
| 30,682,940 | 9.86% | 82,152,012 | 22.43% | |
| Own shares (note 14) | 5,571,014 | 1.79% | 5,571,014 | 1.52% |
| Goldman Sachs* | - | 0.00% | 7,780,349 | 2.12% |
| Efanor Investimentos, SGPS, S.A.** | - | 0.00% | 1,000 | 0.00% |
| 311,340,037 | 100.00% | 366,246,868 | 100.00% |
* On 23 October 2013, Goldman Sachs Group, Inc. informed Sonaecom about the completion of a qualifying holding of 2.12% in Sonaecom, corresponding to 7,780,349 shares and voting rights. On 23 February 2014, has been included in 'Free Float' because it does not correspond to a qualified participation.
** In the period ended at 31 December 2014, following the completion of Public Offer of own shares, Efanor has no longer a direct participation in the capital of Sonaecom.
On 5 February 2014, Sonaecom made public the decision to launch a general and voluntary tender offer for the acquisition of shares representing the share capital of Sonaecom.
The offer was general and voluntary, with the offered obliged to acquire all the shares that were object of the offer and were, until the end of the respective period, subject to valid acceptance by the recipients.
The period of the offer, during which sales orders were received, ran for two weeks, beginning on 6 February and ending on 19 February 2014.
On 20 February 2014, the results of the offer were released. The level of acceptance reached 62%, corresponding to 54,906,831 Sonaecom shares. In 2014 Sonaecom reduced its capital by Euro 136 million as a result of the extinction of the own shares acquired (54,906,831 shares) and reduction of the nominal value of the remaining shares of capital stock of the Sonaecom Euro 1 to Euro 0.74 per share. Following this result, the Euronext announced the exclusion of Sonaecom PSI-20 from February 24, 2014.
As a return for the own shares acquired in this General Public Offer and Voluntary process Sonaecom delivered 26,476,792 shares representing the share capital of NOS which were recorded in the balance sheet by Euro 141,650,837 (Note 7) and the amount of Euro 19,632 in cash, so as a result of this General Public and Voluntary Offer, assets and equity of Sonaecom decreased by Euro 141,670,470.
All shares that comprise the share capital of Sonaecom, are authorised, subscribed and paid. All shares have the same rights and each share corresponds to one vote.
During the period ended 31 December 2014, Sonaecom did not acquire, sold or delivered own actions, in addition the own shares purchased under the General Public Offer and Voluntary process described in Note 13, whereby the amount held to date, is of 5,571,014 own shares representing 1.79% of its share capital, at an average price of Euro 1.515.
At 31 Decem
| Amount outstanding | |||||
|---|---|---|---|---|---|
| Type of | |||||
| Issue denomination | Limit | Maturity | reimbursement | 2014 | 2013 |
| 20,000,000 | Jun-16 | Final | - | 20,000,000 | |
| Costs associated with financing set-up | - | - | - | - | (58,271) |
| Interests incurred but not yet due | - | - | - | - | 61,767 |
| - | 20,003,496 |
| Amount outstanding | |||||
|---|---|---|---|---|---|
| Type of | |||||
| Issue denomination | Limit | Maturity | reimbursement | 2014 | 2013 |
| Treasury applications | - | - | - | - | 21,654,000 |
| Interests incurred but not yet due | - | - | - | 12 | 6,813 |
| 12 | 21,660,813 | ||||
| Overdraft facilities (note 12) | 87,847 | - | |||
| 87,859 | 21,660,813 |
In May 2013, Sonaecom signed a Bond Loan, privately placed, amounting to Euro 20 million, without guarantees and with a maturity date of three years. The bonds bear interest at floating rate indexed to Euribor and paid semiannually. This issue was organized and mounted by Caixa Económica Montepio Geral. This loan was repaid early in June 2014.
The loan above was unsecured and the fulfillment of the obligations under this loan was exclusively guaranteed by the underlying activities and the indebted company cash flows generation capacity.
The average interest rate of the bond loans, in the period 2014, was 2.64% (2.71% in 2013).
In June 2010, Sonaecom contracted a Commercial Paper Programme Issuance with maximum amount of Euro 15 million with subscription grant and maturity of three years, organised by Caixa Económica Montepio Geral. In June 2013 an addition was made to the contract that lasted for one year, automatically renewable for equal periods up to a maximum of 5 years. In 31 March 2014, this credit line was transferred to Sonae SGPS.
The average interest rate of the commercial papers, in the period of 2013, was 4.26%.
All the loans above were unsecured and the fulfillment of the obligations under these loans was exclusively guaranteed by the underlying activities and the indebted company cash flows generation capacity.
Sonaecom has also short term bank credit lines, in the form of current or overdraft account commitments, in the amount of Euro 1 million. These credit lines have maturities up to one year, automatically renewable, except in case of termination by either party, with some periods of notice.
All these loans and bank credit lines bear interest at market rates, indexed to the Euribor for the respective term, and were all contracted in euro.
During the years ended at
| 2014 | 2013 | |
|---|---|---|
| Sonaecom BV | - | 14,720,000 |
| Digitmarket | - | 4,385,000 |
| Sonaetelecom BV | - | 1,559,000 |
| Sonae com SI | - | 800,000 |
| Miauger | - | 190,000 |
| - | 21,654,000 |
The treasury applications received from Group companies are payable in less than one year and earn interests at market rates. During the years ended at 31 December 2014 and 2013, the treasury applications earned an average interest rate of 2.77% and 3.08%, respectively.
At 31 December 2013, the repayment schedule of medium and long-term loans and of interests (nominal values), for both bonds and commercial paper were as follows (values based on the latest interest rate established for each type of loan):
| Within 12 months | Between 12 and 24 months |
Between 24 and 36 months |
Between 36 and 48 months |
Between 48 and 60 months |
|
|---|---|---|---|---|---|
| 2013 | |||||
| Bond loan Reimbursements |
- | - | 20,000,000 | - | - |
| Interests | 980,278 | 980,278 | 424,318 | - | - |
| Commercial paper | |||||
| Reimbursements | - | - | - | - | - |
| Interests | - | - | - | - | - |
| 980,278 | 980,278 | 20,424,318 | - | - |
Although the maturity of commercial paper issuance is between one week and six months, the counterparties assumed the placement and the maintenance of those limits for a period of one to three years. As so, such liabilities are recorded in the medium and long term in the year ended at 31 December 2013.
At 31 December 2014 and 2013, the available credit lines of the Company are as follows:
| Maturity | |||||
|---|---|---|---|---|---|
| Amount | Amount | More than 12 | |||
| Credit | Limit | outstanding | available | Until 12 months | months |
| 2014 | |||||
| Authorised overdrafts | 1,000,000 | - | 1,000,000 | x | |
| 1,000,000 | - | 1,000,000 | |||
| Maturity | |||||
| Amount | Amount | More than 12 | |||
| Credit | Limit | outstanding | available | Until 12 months | months |
| 2013 | |||||
| Bond loan | 20,000,000 | 20,000,000 | - | x | |
| Commercial paper | 15,000,000 | - | 15,000,000 | x | |
| Authorised overdrafts | 1,000,000 | - | 1,000,000 | x | |
| 36,000,000 | 20,000,000 | 16,000,000 |
At 31 December 2014 and 2013, there are no interest rate hedging instruments.
Based on the debt exposed to variable rates at the end of 2014, and considering the applications and bank balances at the same date, if market interest rates rise (fall), in average, 75bp during the year 2014, the interest paid that year would be decreased (increased ) in an amount of approximately Euro 1,300,000.
The movements in provisions and in accumulated impairment losses in the years ended 31 December 2014 and 2013 were as follows:
| Opening balance |
Increases | Reductions | Transfers and utilizations |
Closing balance |
|
|---|---|---|---|---|---|
| 2014 | |||||
| Accumulated impairment losses on investments in Group companies | |||||
| (notes 5 and 23) | 112,859,590 | 17,154 | (1,986,256) | (5,552,273) | 105,338,215 |
| Accumulated impairment losses on other non-current assets (notes 8 and 23) |
6,296,259 | 2,490,000 | - | (988,854) | 7,797,405 |
| Provisions for other liabilities and charges | 332,469 | 51 | (41,115) | 13,406 | 304,811 |
| 119,488,318 | 2,507,205 | (2,027,371) | (6,527,721) | 113,440,431 | |
| 2013 | |||||
| Accumulated impairment losses on investments in Group companies (notes 5 and 23) Accumulated impairment losses on other non-current assets |
97,197,713 | 15,661,877 | - | - | 112,859,590 |
| (notes 8 and 23) | 17,204,998 | 3,930,000 | (14,838,739) | - | 6,296,259 |
| Provisions for other liabilities and charges | 74,959 | 258,216 | (706) | - | 332,469 |
| 114,477,670 | 19,850,093 | (14,839,445) | - | 119,488,318 |
ofit and loss statement with the exception of the impairment losses in investments in Group companies and other non-current assets, which, due to their nature, are mount of Euro 51, recorded, in - as required in the IAS 16
stered in the financial
Additionally, in 31 Decemb d to probable liabilities resulting from several transactions which cash outflow is probable.
Additionally, in 31 December 2014, t
I or decommissioning - as required in the IAS 16
This caption, in the amounts of Euro 399,254 and Euro 370,948, at 31 December 2014 and 2013, respectively, corresponds to the medium and longterm amounts associated with the Medium Term Incentive Plans (note 28).
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Other creditors (note 25) | 1,040,710 | 7,199,301 |
| State and other public entities | 24,840 | 108,972 |
| 1,065,550 | 7,308,273 |
to be paid to NOS Comunicações, S.A., Be Artis and Be Towering in relation to the termination of MTIP contract (note 28).
The liability to other creditors matures as follows:
| Total | Until 90 days | From 90 to 180 days | More than 180 days | |
|---|---|---|---|---|
| 2014 | ||||
| Other creditors | 1,040,710 | 1,040,710 | - | |
| 1,040,710 | 1,040,710 | |||
| 2013 | ||||
| Other creditors | 7,199,301 | 7,199,301 | - | |
| 7,199,301 | 7,199,301 |
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Accrued costs | ||
| Staff expenses | 434,009 | 555,627 |
| Medium Term Incentive Plans (note 28) | 1,115,463 | 334,477 |
| Consultancy | 22,402 | 100,558 |
| Other accrued costs | 119,488 | 2,055,658 |
| 1,691,362 | 3,046,320 |
d interests and not yet due of the Boan Loan that was transferred to NOS (note 15).
(note 25).
| 2014 | 2013 | |
|---|---|---|
| Supplementary income | 125,665 | 113,105 |
| Others | 27,534 | 774 |
| 153,199 | 113,879 |
at Sonaecom secured on behalf of its subsidiaries.
At 31 December 2014 and 2013, this caption was made up as follows:
| 2014 | 2013 | |
|---|---|---|
| Specialised work | 705,588 | 1,713,604 |
| Travel and accommodation | 77,348 | 112,905 |
| Insurance | 48,482 | 49,852 |
| Communications | 38,836 | 39,495 |
| Rents | 31,101 | 101,607 |
| Fees | 4,930 | 11,139 |
| Other external supplies and services | 111,998 | 114,309 |
| 1,018,283 | 2,142,911 |
The commitments assumed by the company at 31 December 2014 and 2013 related to operational leases are as follows:
| 2014 | 2013 | |
|---|---|---|
| Minimum payments of operational leases: | ||
| 2014 | - | 52,997 |
| 2015 | 16,692 | 52,997 |
| 2016 | 6,955 | 43,260 |
| 2017 | - | 32,723 |
| 2018 | - | 1,255 |
| 23,647 | 183,232 |
Net financial results for the years ended 31 December 2014 and 2013 are made up as follows ((costs)/gains):
| 2014 | 2013 | |
|---|---|---|
| Gains and losses on investments in Group companies | ||
| Losses related to Group companies (notes 5, 8 and 16) | (2,507,154) | (171,801,781) |
| Gains related to Group companies | 2,289,904 | - |
| Dividends | 7,250,000 | 24,700,000 |
| 7,032,750 | (147,101,781) | |
| Gains and losses on financial assets at fair value through profit or loss | ||
| Gains on financial assets at fair value through profit or loss (note7) | (3,296,955) | 46,636,719 |
| Dividends | 1,321,504 | - |
| (1,975,451) | 46,636,719 | |
| Other financial expenses | ||
| Interest expenses: | ||
| Bank loans | (487,353) | (4,783,651) |
| Other loans (note 25) | (246,513) | (6,111,696) |
| Bank overdrafts and others | - | - |
| (733,866) | (10,895,347) | |
| Other financial expenses | (284,230) | (315,920) |
| (1,018,096) | (11,211,267) | |
| Other financial income | ||
| Interest income (note 25) | 3,207,046 | 24,501,871 |
| Foreign currency exchange gains | 829 | 174 |
| Other financial income | 161,645 | - |
| 3,369,520 | 24,502,045 |
At 31 December 2014 and 2013, the losses related to Group companies include the increase of the impairment losses in other non-current assets (notes 8 and 16), in the amount of Euro 2,490,00 and Euro 3,930,000, respectively. Also include, in 2014, the increase of the impairment losses in Investments in group companies (notes 5 and 16), in the amount of Euro 17,154 and, in 2013, the increase of the impairment losses in Investments in group companies, in the amount of Euro 823,138 and the loss arising from the merger (note 5), in the amount of Euro 167,048,643.
At 31 December 2014, the loss related to Group companies include the reverse of impairment losses in Investments in group companies in the amount of Euro 1,986,256 (note 16) and the gain resulting from the liquidation of Miauger, in the amount of Euro 303,649.
At 31 December 2014 and 2013, gains related to dividends received from investments in Group companies and in join-ventures are associated with dividends received from ZOPT, SGPS, S.A. and the subsidiary Optimus SGPS, respectively. At 31 December 2014, gains related to dividends received from investments registered at fair value through profit or loss are associated with dividends received from NOS, SGPS, S.A..
At 31 December 2014, losses related to financial assets at fair value through profit or loss are associated with a decrease in the fair value of the participation held in NOS and Sonae SGPS (note 7), in the amount of Euro 3,296,955. At 31 December 2013, gains related to financial assets at fair value through profit or loss corresponds to an increase in the fair value of the direct participation held in NOS (Note7), in the amount of Euro 46,636,719.
the amount of Euro 4,674,111 received from Unitel, following the disposal of the shareholder loans to be received from Zopt to this entity (notes 5 and 8).
Income taxes recognized during the years ended at 31 December 2014 and 2013 were made up as follows ((costs) / gains):
| 2014 | 2013 | |
|---|---|---|
| Current tax | 426,546 | (1,322,289) |
| Tax provision (notes 9 and 16) | 12,167 | (168,062) |
| Closing balance | 438,713 | (1,490,351) |
The most significant balances and transactions with related parties (which are detailed in the appendix) at 31 December 2014 and 2013 were as follows:
| Balances at 31 | |||||
|---|---|---|---|---|---|
| December 2014 | |||||
| Other assets / | Loans granted / | ||||
| Accounts receivable | Accounts payable | Treasury applications | (liabilities) (note 11 | (obtained) | |
| Parent Companies | (note 10) | (note 18) | (note 12) | and 19) | (note 8 and 15) |
| Sonae SGPS | - | 230,575 | - | 183,592 | - |
| Subsidiaries | |||||
| PCJ | 218,774 | - | - | 20,879 | 4,345,000 |
| Público | 78,347 | 972,916 | - | 19,104 | 2,435,000 |
| Sonae com SI | 533,324 | 79,073 | - | 70,072 | 12,220,000 |
| Sonaecom BV | 436 | 357,408 | 20,000 | 282 | - |
| Sonaetelecom BV | - | 61 | - | - | (11) |
| Sonaecom SP | 34,845 | 84,040 | - | 3,910 | 420,000 |
| Others related parties | |||||
| Be Artis | (1,963) | 58,460 | - | - | - |
| NOS SGPS** | - | 20,474 | - | - | - |
| Be Towering | - | 4,753 | - | - | - |
| Digitmarket | 51,158 | 3,473 | - | (18,231) | - |
| Mainroad | 19,742 | 107,511 | - | - | - |
| NOS Comunicações* | 115,344 | 307,259 | - | (3,854) | - |
| Saphety | 116,343 | 5,436 | - | (61,130) | - |
| Wedo | 2,054,971 | 185,986 | - | - | - |
| Sonae Center Serviços II | - | 149,305 | - | - | - |
| Others | 160 | 28,485 | - | (23,296) | - |
| 3,221,481 | 2,595,215 | 20,000 | 191,328 | 19,419,989 |
* This company changed its name from Optimus- Comunicações, S.A., to NOS Comunicações, S.A., in 2014.
** This company changed its name from ZON Optimus, SGPS, S.A., to NOS, SGPS, S.A., in 2014.
| Balances at 31 | |||||
|---|---|---|---|---|---|
| December 2013 | |||||
| Other assets / | Loans granted / | ||||
| Accounts receivable | Accounts payable | Treasury applications | (liabilities) (note 11 | (obtained) | |
| (note 10) | (note 18) | (note 12) | and 19) | (note 8 and 15) | |
| Parent Company | |||||
| Sonae SGPS | 850 | 49,000 | - | (31,198) | - |
| Subsidiaries | |||||
| Miauger | - | 60,086 | - | - | (190,151) |
| PCJ | 68,078 | (100,277) | 5,000 | 22,617 | 4,610,000 |
| Público | 85,696 | 925,581 | 1,345,000 | 7,560 | 1,780,000 |
| Sonae com SI | 180,605 | 1,401 | - | 70,643 | 14,854,257 |
| Sonaecom BV | 1,910 | 240,841 | - | - | (14,720,000) |
| Sonae Telecom BV | - | 25,335 | - | - | (1,559,000) |
| Sonaecom SP | - | 27,948 | 170,000 | (45,021) | - |
| Others related parties | |||||
| Be Artis | - | 2,860,366 | - | - | - |
| Be Towering | 4,596 | 111,261 | - | 3,737 | - |
| Digitmarket | 4,784 | 44,434 | - | - | (4,390,919) |
| Lugares Virtuais | - | 210,390 | - | - | - |
| Mainroad | 56,125 | 32,451 | - | 167 | - |
| NOS Comunicações * | 595,075 | 2,716,307 | - | 155,410 | - |
| Permar | - | - | - | - | - |
| Saphety | 114,410 | 5,433 | 285,000 | 576 | - |
| SonaecenterII | - | 82,406 | - | (94,260) | - |
| Wedo | 670,392 | (190,068) | 1,365,000 | 1,903 | - |
| NOS SGPS ** | 10,203,626 | - | - | (1,943,340) | - |
| Others | 92,264 | 14,121 | - | 85,484 | - |
| 12,078,411 | 7,117,016 | 3,170,000 | (1,765,722) | 384,187 | |
* This company changed its name from Optimus- Comunicações, S.A., to NOS Comunicações, S.A., in 2014.
** This company changed its name from ZON Optimus, SGPS, S.A., to NOS, SGPS, S.A., in 2014.
| Transactions at 31 | ||||
|---|---|---|---|---|
| December 2014 | ||||
| Supplies and services | Interest and similar | |||
| Sales and services | received | income / (expense) | Supplementary | |
| rendered (note 20) | (note 22) | (note 23) | income (note 21) | |
| Parent Company | ||||
| Sonae SGPS | - | 49,229 | 1,563,161 | - |
| Subsidiaries | ||||
| Miauger | - | - | (1,573) | - |
| PCJ | - | - | 255,319 | - |
| Público | - | 360 | 278,611 | 5,827 |
| Sonae com SI | - | (24,721) | 781,415 | - |
| Sonaecom BV | - | - | (154,210) | - |
| Sonaecom SP | - | 302,633 | 13,387 | - |
| Others related parties | ||||
| Sonaecenter II | - | 111,965 | - | |
| NOS Comunicações* | - | 282,501 | - | 119,838 |
| Be Artis | - | 1,180 | - | - |
| Digitmarket | 48,435 | 1,322 | (18,361) | - |
| Lugares Virtuais | - | - | - | - |
| Mainroad | 35,736 | (473) | 6,137 | - |
| Saphety | 48,436 | 2,459 | 6,482 | - |
| Wedo | 170,875 | 132 | 24,646 | - |
| NOS SGPS** | - | (7,936) | (5,280) | - |
| Others | - | 92,942 | (16,737) | - |
| 303,482 | 811,593 | 2,732,997 | 125,665 |
* This company changed its name from Optimus- Comunicações, S.A., to NOS Comunicações, S.A., in 2014.
** This company changed its name from ZON Optimus, SGPS, S.A., to NOS, SGPS, S.A., in 2014.
| Transactions at 31 December 2013 |
||||
|---|---|---|---|---|
| Supplies and services | Interest and similar | |||
| Sales and services | received | income / (expense) | Supplementary | |
| rendered (note 20) | (note 22) | (note 23) | income (note 21) | |
| Parent Company | ||||
| Sonae SGPS | - | 48,600 | 685,345 | - |
| Subsidiaries | ||||
| Miauger | - | - | (4,759) | - |
| PCJ | - | - | 271,236 | - |
| Público | 119,391 | (48,343) | 131,074 | 1 |
| Sonae com SI | 4,626 | - | 692,980 | - |
| Sonaecom BV | - | - | (442,398) | - |
| Sonaecom SP | - | 78,955 | (881) | - |
| Others related parties | ||||
| Sonaecenter II | (9,917) | 645,794 | - | |
| NOS Comunicações* | 2,209,035 | 282,501 | - | 113,104 |
| Be Artis | - | 24,985 | - | - |
| Digitmarket | 40,904 | - | (131,098) | - |
| Lugares Virtuais | 21,423 | 2,400 | 42,884 | - |
| Mainroad | 40,417 | - | 33,129 | - |
| Saphety | 42,846 | (104,291) | 11,357 | - |
| Wedo | 123,754 | 3,410 | 68,147 | - |
| NOS SGPS** | - | (526,753) | 17,520,021 | - |
| Others | - | 58,020 | (50,448) | - |
| 2,592,479 | 465,278 | 18,826,589 | 113,105 |
* This company changed its name from Optimus- Comunicações, S.A., to NOS Comunicações, S.A., in 2014.
** This company changed its name from ZON Optimus, SGPS, S.A., to NOS, SGPS, S.A., in 2014.
During the years ended at 31 December 2014 and 2013, the company recognized the total amount of Euro 7,250,00 and Euro 24,700,000, respectively, related to dividends from its subsidiaries (note 23).
During 2012, the Group signed an agreement with Sonae SGPS, under which Sonae compromise to transfer to employees and board members of Sonaecom, Sonaecom shares, at the price of 1.184 euros, until 2016, as requested by Sonaecom and under the MTIP of Sonaecom. Under this contract, Sonaecom paid to Sonae SGPS, SA the amount of EUR 3,291,520.
During the year ended at 31 December 2013, Sonaecom partially anticipated the maturity of the contract, receiving the amount of Euro 4,444,207. At 11 July 2014 the company terminated this contract so, Sonae SGPS, SA will repay the remaining amount in debt.
All the above transactions were made at market prices.
Accounts receivable and payable to related companies will be settled in cash and are not covered by guarantees.
appendix to this report.
Guarantees provided to third parties at 31 December 2014 and 2013 were as follows:
| Beneficiary | Description | 2014 | 2013 |
|---|---|---|---|
| Direção de Contribuições e Impostos (Portuguese tax authorities) | VAT reimbursements | 1,435,379 | 5,955,731 |
| Direção de Contribuições e Impostos (Portuguese tax authorities) | Additional tax assessments (VAT, Stamp and Income tax) | 222,622 | 2,696,853 |
| Direção de Contribuições e Impostos (Portuguese tax authorities) | Others | - | 16,795 |
| 1,658,001 | 8,669,379 |
In addition to these guarantees were set up sureties for the current fiscal processes. The Sonae SGPS consisted of Sonaecom SGPS surety to the amount of Euro 6,540,647and Sonaecom SGPS consisted of NOS Comunicações surety for the amount of Euro 10,502,945 and of Público of the amount of Euro 565,026.
At 31 December 2014, the Board of Directors of the Company believes that the decision of the court proceedings and ongoing tax assessments in progress will not have significant impacts on the financial statements.
Earnings per share, basic and diluted, are calculated by dividing the net income of the year (Euro 5,820,800 euros in 2014 and negative Euro 90,569,383 in 2013) by the average number of shares outstanding during the years ended at 31 December 2014 and 2013, net of own shares (317,970,541 in 2014 and 360,941,333 in 2013).
In June 2000, the Company created a discretionary Medium Term Incentive Plan for more senior employees, based on Sonaecom options and shares and Sonae-SGPS, S.A. shares. The vesting occurs three years after the award of each plan, assuming that the employees are still employed in the Company.
The Sonaecom plans outstanding at 31 December 2013 can be summarized as follows:
| Vesting period | 31 December 2013 | ||||
|---|---|---|---|---|---|
| Share price at award date* |
Award date | Vesting date | Aggregate number of participations |
Number of shares |
|
| Sonaecom shares | |||||
| 2010 Plan | 1.399 | 10-Mar-11 | 10-Mar-14 | 2 | 206,064 |
| 2011 Plan | 1.256 | 09-Mar-12 | 10-Mar-15 | 2 | 221,505 |
| 2012 Plan | 1.505 | 08-Mar-13 | 10-Mar-16 | 2 | 129,694 |
| Sonae SGPS shares | |||||
| 2010 Plan | 0.811 | 10-Mar-11 | 10-Mar-14 | 2 | 214,640 |
| 2011 Plan | 0.401 | 09-Mar-12 | 10-Mar-15 | 2 | 419,985 |
| 2012 Plan | 0.701 | 08-Mar-13 | 10-Mar-16 | 2 | 163,966 |
*Average share price in the month prior to the award date, for Sonaecom shares and the lower of the average share price for the month prior to the Annual General Meeting and the share price on the day after the Annual General Meeting, for Sonae SGPS shares.
At 10 March 2014, Sonaecom shares plans were converted in full for shares Sonae SGPS. This conversion was based on the terms set out in exchange takeover bid at 20 February 2014, referred to in Note 13 to determine the fair value of Sonaecom plans, and based on the price of shares Sonae SGPS.
Therefore, the conversion of the plans was based Sonaecom / Sonae SGPS implied ratio under fixed terms on takeover bid (1 share of Sonaecom -
After conversion at 10 March 2014, the converted plans can be detailed as follows:
| Vesting period | 10 March 2014 | ||||
|---|---|---|---|---|---|
| Share price at 20 February 2014* |
Award date | Vesting date | Aggregate number of participations |
Number of shares |
|
| Sonae SGPS shares | |||||
| 2010 Plan | 1.258 | 10-Mar-11 | 10-Mar-14 | 2 | 422,647 |
| 2011 Plan | 1.258 | 09-Mar-12 | 10-Mar-15 | 2 | 454,317 |
| 2012 Plan | 1.258 | 08-Mar-13 | 10-Mar-16 | 2 | 266,008 |
*Quotation of the day of publication of the results of the Tender Offer
By the Board Nomination and Remuneration Decision, the delivery of the 2010 Plan was prosecute in May 2014.
| Vesting period | 31 December 2014 | ||||
|---|---|---|---|---|---|
| Share price at 31 December 2014/ Award date |
Award date | Vesting date | Aggregate number of participations |
Number of shares |
|
| Sonae SGPS shares ( Arising from the conversion of | |||||
| Sonaecom plans) 2011 Plan |
1.024 | 09-Mar-12 | 10-Mar-15 | 2 | 466,679 |
| 2012 Plan | 1.024 | 08-Mar-13 | 10-Mar-16 | 2 | 273,247 |
| Sonae SGPS shares | |||||
| 2011 Plan | 0.401 | 09-Mar-12 | 10-Mar-15 | 2 | 431,413 |
| 2012 Plan | 0.701 | 08-Mar-13 | 10-Mar-16 | 2 | 168,427 |
| 2013 Plan | 1.024 | 10-Mar-14 | 10-Mar-17 | 2 | 284,410 |
During the year ended at 31 December 2014, the movements that occurred in the plans can be summarized as follows:
| Sonaecom shares | Sonae SGPS shares | |||
|---|---|---|---|---|
| Aggregate number of participations |
Number of shares | Aggregate number of participations |
Number of shares | |
| Outstanding at 31 December 2013: | ||||
| Unvested | 6 | 557,263 | 6 | 798,591 |
| Total | 6 | 557,263 | 6 | 798,591 |
| Movements in year: | ||||
| Awarded | - | - | 2 | 266,008 |
| Vested | - | - | (4) | (637,287) |
| Converted | (6) | (557,263) | 6 | 1,142,972 |
| Cancelled / lapsed / corrected* | - | 53,892 | ||
| Outstanding at 30 September 2014: | ||||
| Unvested | - | - | 10 | 1,624,176 |
| Total | - | - | 10 | 1,624,176 |
* The adjustments are made for dividends paid and for share capital changes and others adjustments, namely, resulting from a change in the vesting of the MTIP, which may now be made through the purchase of shares with a discount.
-current liabilities'. For originally plans of Sonae SGPS shares, the Group entered into hedging contract with external entities, and the responsibilities are calculated based on the prices agreed on those contracts.
The detail of the hedging contracts is as follows:
| Sonae SGPS shares | ||
|---|---|---|
| 2011 Plan | 2012 Plan | |
| Notional value | 323,727 | 268,451 |
| Maturity | Mar-15 | Mar-16 |
| Level of inputs in the hierarchy of fair value | Level 2 | |
| Valuation method | Current replacement cost | |
| Fair value* | 481,197 | 120,032 |
* Used the share price of 31 December 2014 in the determination of the fair value.
During the year 2012, Sonaecom signed a contract with Sonae SGPS, SA, in which it undertook to make, by the end of year 2016 the transfer of shares to employees Sonaecom SGPS group by indication Sonaecom and under the incentive plans medium term. During the year ended at 31 December 2013, Sonaecom partially anticipated the maturity of the contract and at 11 July 2014 the company ceased it.
Share plan costs are recognised in the accounts over the period between the award and the vesting date of those plans. The costs recognised in previous years and in the year ended at 31 December 2014, were as follows:
| Sonaecom shares |
Sonae SGPS shares |
NOS shares | Total | |
|---|---|---|---|---|
| Costs recognised in previous years | 2,905,435 | 3,376,254 | 399,083 | 6,680,772 |
| Costs recognised in the period | 57,543 | 154,790 | 10,472 | 222,805 |
| Impact of conversion of Sonaecom Plans | (531,505) | 1,666,165 | 1,134,660 | |
| Costs of plans vested in previous years | (2,431,473) | (3,112,960) | - | (5,544,433) |
| Costs of plans vested in the period | - | (1,216,665) | - | (1,216,665) |
| - | 867,584 | 409,555 | 1,277,139 | |
| Responsability of plans | - | 1,468,813 | 409,555 | 1,878,368 |
| Fair value of hedging contracts (1) | - | (601,229) | - | (601,229) |
| Recorded in cash and cash equivalents (2) | - | (194,530) | (43,048) | (237,578) |
| Recorded in other current liabilities (note 19) | - | 906,075 | 209,388 | 1,115,463 |
| Recorded in other non current liabilities (note 17) | - | 156,039 | 243,215 | 399,254 |
| Recorded in reserves | - | - | - | - |
(1)Sonaecom has signed hedging contracts to cover its responsibilities related with the medium and longtransferring, through contracts, the responsibility for each company of the group. The fair value of the hedging contracts, considered in the table above, corresponds to t
(2)Sonaecom partially anticipated the maturity of the hedging contract with Sonae SGPS, receiving an amount equivalent to the present market value of Sonaecom shares.
At 10 March 2014, Sonaecom shares plans were fully converted into shares Sonae SGPS. This conversion was based on the terms of trade set out in the Tender Offer at 20 February 2014, referred to in Note 13, to determine the fair value of the plans and, based on the share prices Sonae SGPS. Therefore, it was determined the number of shares to be delivered to Sonae SGPS employees. The liability relating to the period of each plan on the date of conversion (EUR 1,347,824) was recognized under 'Other current liabilities' and' Other non-current liabilities' by hand equity in accordance with the provisions of IFRS 2.
In 27 August 2013, part of the Sonaecom and Sonae SGPS plans outstanding were converted to NOS plans. The conversion of the Sonaecom plans was made according to the merger ratio, but the conversion of Sonae SGPS plans was made according to the fair value of the shares. This decision was duly approved by the Board Nominations and Remunerations Committee. The cost of NOS plans was recognized until 30 September 2013, date on which NOS started to take responsibility for them. The responsibility of these plans was calculated based on share price of 30 September 2013 -
During 2014 and 2013, the remunerations paid to Directors and other members of key management in functions were as follows:
| 2014 | 2013 | |
|---|---|---|
| Short-term employee benefits | 766,574 | 1,223,450 |
| Share-based payments | 196,124 | 370,100 |
| 962,698 | 1,593,550 |
*In 2013, the remuneration for key management personnel transferred to Zon Optimus has not been considered, following the merger between Optimus SGPS and Zon.
The short-term employee benefits, which include the salary and performance bonus, were calculated on an accruals basis. The share-based payments for 2014 and 2013 correspond to the value of the Medium Term Incentive Plan and will be awarded in 2015, in respect of performance during 2014 (and the Medium Term Incentive Plan awarded in 2014 in respect of performance during 2013, for the 2013 amounts), whose shares, or the cash equivalent, will be delivered in March 2018 and March 2017, respectively.
During the years ended at 31 December 2014 and 2013, the company employed an average number of 3 and 4, respectively. At 31 December 2014, the number of employees was 3.
In 2014 and 2013, the Company paid, in respect of fees, to the Statutory Auditor, Deloitte, and its network of companies, the following amounts:
| 2014 | 2013 | |
|---|---|---|
| Statutory audit | 19,156 | 8,000 |
| Other guarantee and reliability services | - | 10,000 |
| Tax advice | 4,738 | 2,877 |
| Total | 23,894 | 20,877 |
These consolidated financial statements were approved by the Board of Directors on 2 March 2015.
These financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards (IAS / IFRS) as adopted by the European Union and the format and disclosures required by those Standards, some of which may not conform to or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.
At 31 December 2014, the related parties of Sonaecom, SGPS, S.A. are as follows
| Key management personnel - Sonaecom | ||
|---|---|---|
| Ângelo Gabriel Ribeirinho dos Santos Paupério | Maria Cláudia Teixeira de Azevedo | |
| António Bernardo Aranha da Gama Lobo Xavier |
| Key management personnel - Sonae SGPS | ||
|---|---|---|
| Álvaro Carmona e Costa Portela | Christine Cross | |
| Álvaro Cuervo Garcia | Duarte Paulo Teixeira de Azevedo | |
| Belmiro de Azevedo | José Manuel Neves Adelino | |
| Bernd Hubert Joachim Bothe | Michel Marie Bon |
| Sonaecom Group Companies | ||
|---|---|---|
| Cape Technologies Limited | ||
| Servicios de Inteligencia Estratégica Global, S.L. | ||
| Intelligent Big Data, S.L. | ||
| ITRUST - Cyber security intelligence services, S.A. | Sonaecom - Cyber security and intelligence, SGPS, S.A. | |
| Lookwise, S.L. | Sonaecom - Serviços Partilhados, S.A. | |
| PCJ - Público, Comunicação e Jornalismo, S.A. | ||
| Praesidium Services Limited | Sonaecom BV | |
| Sonaecom, SGPS, S.A. | ||
| S21 Sec Barcelona, S.L. | Sonaetelecom BV | |
| S21 Sec Brasil, Ltda | Tecnológica Telecomunicações LTDA. | |
| S21 Sec Ciber Seguridad, S.A. de CV | ||
| S21 Sec Fraud Risk Management, S.L. | ||
| S21 SEC Gestion, S.A. | WeDo Poland Sp. Z.o.o. | |
| S21 Sec Inc. | WeDo Technologies (UK) Limited | |
| S21 Sec Information Security Labs, S.L. | WeDo Technologies Americas, Inc. | |
| S21 Sec Institute, S.L. | WeDo Technologies Australia PTY Limited | |
| S21 Sec México, S.A. de CV | WeDo Technologies BV | |
| S21 Sec, S.A. de CV | ||
| WeDo Technologies Egypt LLC | ||
| Saphety Brasil Transações Eletrônicas Ltda. | WeDo Technologies Mexico, S de R.L. |
| Sonae/Efanor/NOS Group Companies | |
|---|---|
| 3shoppings - Holding,SGPS, S.A | Casa da Ribeira - Hotelaria e Turismo,SA |
| ADD Avaliações Eng. A.e Pericias, Ltda | Casa da Ribeira-Sociedade Imobiliária,SA |
| Adlands B.V. | Cascaishopping- Centro Comercial, S.A. |
| Aegean Park,SA | Cascaishopping Holding I, SGPS, S.A. |
| Agepan Eiweiler Management GmbH | CCCB Caldas da Rainha-Centro Com., SA |
| Agepan Tarket Laminate Park GmbH Co. KG | Centro Colombo- Centro Comercial, S.A. |
| Agloma Investimentos, Sgps, S.A. | Centro Residencial da Maia,Urban.,SA |
| Agloma-Soc.Ind.Madeiras e Aglom.,SA | Centro Vasco da Gama-Centro Comercial,SA |
| Airone - Shopping Centre, Srl | Chão Verde-Soc.Gestora Imobiliária,SA |
| ALEXA Administration GmbH | Cinclus Imobiliária,SA |
| ALEXA Holding GmbH | Citorres-Sociedade Imobiliária,SA |
| ALEXA Shopping Centre GmbH | Coimbrashopping- Centro Comercial, S.A. |
| Algarveshopping- Centro Comercial, S.A. | Colombo Towers Holding, BV |
| Aqualuz - Turismo e Lazer, Lda | Companhia Térmica Hectare, ACE |
| Arat Inmuebles, S.A. | Companhia Térmica Tagol, Lda. |
| ARP Alverca Retail Park, SA | Contacto Concessões, SGPS, S.A. |
| Arrábidashopping- Centro Comercial, S.A. | Contibomba-Comérc.Distr.Combustiveis,SA |
| Aserraderos de Cuellar,SA | Contimobe-Imobil.Castelo Paiva,SA |
| Atelgen-Produção Energia, ACE | Continente Hipermercados, S.A. |
| Atlantic Ferries-Tráf.Loc,Flu.e Marít,SA | Country Club da Maia-Imobiliaria,SA |
| Avenida M-40 B.V. | Craiova Mall BV |
| Azulino Imobiliária, S.A. | Cronosaúde - Gestão Hospitalar, S.A. |
| BA Business Angels, SGPS, SA | CTE-Central Termoeléct. do Estuário, Lda |
| BA Capital, SGPS | Cumulativa - Sociedade Imobiliária, S.A. |
| BB Food Service, SA | Darbo SAS |
| Be Artis-Conc.,Const.e Gest.Redes Com,SA | Discovery Sports, SA |
| Be Towering-Gestão de Torres de Telec,SA | Distodo Distribui e Logist,Lda |
| Beeskow Holzwerkstoffe | Dortmund Tower GmbH |
| Beralands BV | Dos Mares - Shopping Centre B.V. |
| Bertimóvel - Sociedade Imobiliária, S.A. | Dos Mares-Shopping Centre, S.A. |
| BIG Picture 2 Films | Dreamia, B.V |
| Bloco Q-Sociedade Imobiliária,SA | Dreamia, Serv de Televisão, SA |
| Bloco W-Sociedade Imobiliária,SA | Ecociclo - Energia e Ambiente, SA |
| BOM MOMENTO - Restauração, S.A. | Ecociclo II |
| Canasta-Empreendimentos Imobiliários,SA | Edições Book.it, S.A. |
| Carnes do Continente-Ind.Distr.Carnes,SA | Efanor Investimentos, SGPS, S.A. |
| Carvemagere-Manut.e Energias Renov., Lda | Efanor Serviços de Apoio à Gestão, S.A. |
Empracine-E.Pro.Act. Cinem,Lda Imoestrutura-Soc.Imobiliária,SA Empreend.Imob.Quinta da Azenha,SA Imohotel-Emp.Turist.Imobiliários,SA Enerlousado-Recursos Energéticos, Lda. Imomuro-Sociedade Imobiliária,SA Equador & Mendes,Lda Imopenínsula - Sociedade Imobiliária, SA Estação Viana - Centro Comercial, S.A. Imoplamac Gestão de Imóveis,SA Estêvão Neves-Hipermercados Madeira,SA Imoponte-Soc.Imobiliaria,SA Euroresinas-Indústrias Quimicas,SA Imoresort - Sociedade Imobiliária, S.A. Farmácia Selecção, SA Imoresultado-Soc.Imobiliaria,SA Fashion Division Canárias, SL Imosedas-Imobiliária e Seviços,SA Fashion Division, S.A. Imosistema-Sociedade Imobiliária,SA Feneralt-Produção de Enercia, ACE Impaper Europe GmbH FINSTAR-Socied.Investim.Par SA Implantação - Imobiliária, S.A. Fozimo-Sociedade Imobiliária,SA Infofield-Informática,SA Fozmassimo - Sociedade Imobiliária, SA Inparsa - Gestão Galeria Comercial, SA Freccia Rossa- Shopping Centre S.r.l. Inparvi SGPS, SA Fundo de Invest. Imobiliário Imosede Integrum - Energia, SA Fundo Esp.Inv.Imo.Fec. WTC Integrum ACE, SA Fundo I.I. Parque Dom Pedro Shop.Center Integrum Colombo Energia, SA Fundo Invest. Imobiliário Imosonae Dois Integrum Engenho Novo - Energia, S.A. Fundo Invest.Imob.Shopp. Parque D.Pedro INTEGRUM II - ENERGIA, S.A. Gaiashopping I- Centro Comercial, S.A. INTEGRUM III - ENERGIA, S.A. Gaiashopping II- Centro Comercial, S.A. Integrum Martim Longo - Energia, S.A. GHP Gmbh Integrum Vale do Caima - Energia, SA Gli Orsi Shopping Centre 1 Srl Integrum Vale do Tejo - Energia, SA Glunz AG Interlog-SGPS,SA Glunz Service GmbH Invesaude - Gestão Hospitalar S.A. Glunz UK Holdings Ltd Ioannina Develop. of Shopping Centers SA Glunz Uka Gmbh Isoroy SAS Golf Time-Golfe e Invest. Turísticos, SA La Farga - Shopping Center, SL Guimarãeshopping- Centro Comercial, S.A. Land Retail B.V. Harvey Dos Iberica, S.L. Larim Corretora de Resseguros, Ltda Herco Consul.Riscos Corret.Seguros, Ltda Larissa Develop. of Shopping Centers, SA Herco, Consultoria de Risco, S.A. Lazam MDS Corretora e Adm. Seguros, SA HighDome PCC Limited Le Terrazze - Shopping Centre 1 Srl Iberian Assets, SA Libra Serviços, Lda. Igimo-Sociedade Imobiliária,SA Lidergraf - Artes Gráficas, Lta Iginha-Sociedade Imobiliária,SA. Loop 5 - Shopping Centre, GmbH Imoareia - Invest. Turísticos, SGPS, SA Lusomundo España, SL IMOBEAUTY, S.A. Lusomundo Imobiliária 2, SA Imobiliária da Cacela, S.A. Lusomundo Moçambique, Lda Imoclub-Serviços Imobilários,SA Lusomundo Soc. Inv. Imob. SA Imoconti- Soc.Imobiliária,SA Luz del Tajo - Centro Comercial S.A.
Imodivor - Sociedade Imobiliária, S.A. Luz del Tajo B.V.
Madeirashopping- Centro Comercial, S.A. Novobord (PTY) Ltd. Maiashopping- Centro Comercial, S.A. Novodecor (PTY), LTD Maiequipa-Gestão Florestal,SA OSB Deustchland Gmbh Marcas do Mundo-Viag. e Turismo Unip,Lda Paracentro - Gest.de Galerias Com., S.A. Marcas MC, ZRT Pareuro, BV Marina de Tróia S.A. Park Avenue Develop. of Shop. Centers SA Marinamagic-Expl.Cent.Lúdicos Marít,Lda Parklake Shopping Srl Marmagno-Expl.Hoteleira Imob.,SA Parque Atlântico Shopping - C.C., SA Martimope-Empreendimentos Turísticos, SA Parque D. Pedro 1 B.V. Marvero-Expl.Hoteleira Imob.,SA Parque de Famalicão - Empr. Imob., S.A. MDS Affinity-Sociedade de Mediação Lda Parque Principado SL MDS Africa SGPS, S.A. Pátio Boavista Shopping Ltda. MDS Auto - Mediação de Seguros, SA Pátio Campinas Shopping Ltda MDS Corretor de Seguros, SA Pátio Goiânia Shopping Ltda Mds Knowledge Centre, Unipessoal, Lda Pátio Londrina Empreend.e Particip.Ltda MDS Malta Holding Limited Pátio Penha Shopping Ltda. MDS, SGPS, SA Pátio São Bernardo Shopping Ltda Megantic BV Pátio Sertório Shopping Ltda Miral Administração Corretagem Seg, Ltda Pátio Uberlândia Shopping Ltda MJLF-Empreendimentos Imobiliários, SA Peixes do Continente-Ind.Dist.Peixes,SA Modalfa-Comércio e Serviços,SA Per-Mar-Sociedade de Construções,SA MODALLOOP - Vestuário e Calçado, SA Pharmaconcept - Actividades em Saúde, SA Modelo - Dist.de Mat. de Construção,S.A. PHARMACONTINENTE - Saúde e Higiene, S.A. Modelo Continente Hipermercados,SA PJP - Equipamento de Refrigeração, Lda Modelo Continente International Trade,SA Plaza Eboli B.V. Modelo Hiper Imobiliária,SA Plaza Eboli - Centro Comercial S.A. Modelo.com-Vendas p/Correspond.,SA Plaza Mayor Holding, SGPS, S.A. Movelpartes-Comp.para Ind.Mobiliária,SA Plaza Mayor Parque de Ócio B.V. Movimento Viagens-Viag. e Turismo U.Lda Plaza Mayor Parque de Ocio,SA MSTAR, SA Plaza Mayor Shopping B.V. Münster Arkaden BV Plaza Mayor Shopping, SA Norte Shop. Retail and Leisure Centre BV Poliface North America Norteshopping-Centro Comercial, S.A. Porturbe-Edificios e Urbanizações,SA NOS Açores Comunicações, SA Powercer-Soc.de Cogeração da Vialonga,SA NOS Comunicações , S.A. Praedium - Serviços, SA NOS Lusomundo Audiovisuais, SA Praedium II-Imobiliária,SA NOS Lusomundo Cinemas, SA Praedium SGPS, SA NOS Lusomundo TV Lda Predicomercial-Promoção Imobiliária,SA NOS Madeira Comunicações, SA Predilugar - Sociedade Imobiliária, SA NOS, SGPS, S.A. Prédios Privados Imobiliária,SA NOSPUB, Publicidade e Conteúdos, S.A. Predisedas-Predial das Sedas,SA Nova Equador Internacional,Ag.Viag.T,Ld Proj. Sierra Germany 4 (four)-Sh.C.GmbH Nova Equador P.C.O. e Eventos Proj. Sierra Italy 2 - Dev.of Sh.C. Srl
Pantheon Plaza BV
200
Proj.Sierra Germany 2 (two)-Sh.C.GmbH Sete e Meio - Invest. Consultadoria, SA Project 4, Srl Sete e Meio Herdades-Inv. Agr. e Tur.,SA Project SC 1 BV Shopping Centre Colombo Holding, BV Project SC 2 BV Shopping Centre Parque Principado B.V. Project Sierra 10 BV SIAL Participações, Lda Project Sierra 11 BV Sierra Asia Limited Project Sierra 12 BV Sierra Berlin Holding BV Project Sierra 2 B.V. Sierra Brazil 1 B.V. Project Sierra 6 BV Sierra Central S.A.S. Project Sierra 8 BV Sierra Developments Holding B.V. Project Sierra Four Srl Sierra Developments, SGPS, S.A. Project Sierra Spain 1 B.V. Sierra Enplanta Ltda Project Sierra Spain 2 B.V. Sierra European R.R.E. Assets Hold. B.V. Project Sierra Spain 2-Centro Comer. SA Sierra Germany GmbH Project Sierra Spain 3 B.V. Sierra GP Limited Project Sierra Spain 3-Centro Comer. SA Sierra Greece, S.A. Project Sierra Two Srl Sierra Investimentos Brasil Ltda Promessa Sociedade Imobiliária, S.A. Sierra Investments (Holland) 1 B.V. Quorum Corretores de Seguros Ltda Sierra Investments (Holland) 2 B.V. Racionaliz. y Manufact.Florestales,SA Sierra Investments Holding B.V. Raso - Viagens e Turismo, S.A. Sierra Investments SGPS, S.A. Raso, SGPS, SA Sierra Italy Holding B.V. River Plaza BV Sierra Italy Srl River Plaza Mall, Srl Sierra Management Germany GmbH Rochester Real Estate,Limited Sierra Management Italy S.r.l. Ronfegen-Recursos Energéticos, Lda. Sierra Management Romania, Srl S.C. Microcom Doi Srl Sierra Management, SGPS, S.A. Saúde Atlântica - Gestão Hospitalar, SA Sierra Portugal, S.A. SC Aegean B.V. Sierra Project Nürnberg BV SC Assets SGPS, SA Sierra Property Management Greece, SA SC Finance BV Sierra RE Greece BV SC For-Serv.Form.e Desenv.R.H.,Unip.,Lda Sierra Reval-PM Mark. and Consult., Inc SC Mediterranean Cosmos B.V. Sierra Romania Sh. Centers Services Srl SC, SGPS, SA Sierra Services Holland 2 BV SC-Consultadoria,SA Sierra Services Holland B.V. SC-Eng. e promoção imobiliária,SGPS,S.A Sierra Solingen Holding GmbH SCS Beheer,BV Sierra Spain 2 Services, S.A. SDSR - Sports Division 2, S.A. Sierra Spain, Shop. Centers Serv.,S.A.U. SDSR - Sports Division SR, S.A. Sierra Spain, Shop. Centers Services, SL Selifa-Empreendimentos Imobiliários,SA Sierra Zenata Project B.V. Sempre à Mão - Sociedade Imobiliária,SA SII Soberana Invest. Imobiliários, S.A.
RSI Corretora de Seguros, Ltda Sierra Management Spain Gestión C.Com.S.A. Sesagest-Proj.Gestão Imobiliária,SA SIRS Sociedade Independente de Radiodifusão Sonora, S.A.
SISTAVAC, S.A. Sonae Sierra, SGPS, S.A. SISTAVAC, SGPS, S.A. Sonae Tafibra Benelux, BV SISTAVAC-Sistemas HVAC-R do Brasil, Ltda Sonae Turismo-SGPS,SA SKK SRL SONAECENTER SERVIÇOS, SA SKK-Central de Distr.,SA Sonaegest-Soc.Gest.Fundos Investimentos SKKFOR - Ser. For. e Desen. de Recursos Sonaerp - Retail Properties, SA Soc.Inic.Aproveit.Florest.-Energias,SA SONAESR - Serviços e logistica, SA Sociedade de Construções do Chile, S.A. Sondis Imobiliária,SA Sociedade Independente de Radiodifusão Sonora, S.A. Sontaria-Empreend.Imobiliários,SA Société de Tranchage Isoroy S.A.S. Sontel BV Soconstrução BV Sopair, S.A. Sodesa, S.A. Sótaqua - Soc. de Empreendimentos Turist Soflorin, BV Soternix-Produção de Energia, ACE Solinca - Eventos e Catering, SA SPF- Sierra Portugal Solinca - Health and Fitness, SA Spinarq Moçambique, Lda Solinfitness - Club Malaga, S.L. Spinveste - Promoção Imobiliária, SA Solingen Shopping Center GmbH Spinveste-Gestão Imobiliária SGII,SA SOLSWIM-Gestão e Expl.Equip.Aquáticos,SA Sport TV Portugal, SA Soltroia-Imob.de Urb.Turismo de Tróia,SA Sport Zone Canárias Somit Imobiliária,SA Sport Zone España-Com.Art.de Deporte,SA Sonae - Specialized Retail, SGPS, SA Sport Zone Turquia Sonae Capital Brasil, Lda Spred, SGPS, SA Sonae Capital,SGPS, S.A. Tableros Tradema,S.L. Sonae Center Serviços II, SA Tafiber,Tableros de Fibras Ibéricas,SL Sonae Center Serviços, S.A. Tafibra Suisse, SA Sonae Financial Services, S.A. Tafisa Canadá Societé en Commandite Sonae Ind., Prod. e Com.Deriv.Madeira,SA Tafisa Développement Sonae Indústria - Management Services,SA Tafisa France, SA Sonae Industria (UK),Ltd Tafisa Participation Sonae Industria de Revestimentos, S.A. Tafisa UK,Ltd Sonae Investimentos, SGPS, SA Tafisa-Tableros de Fibras, SA Sonae Investments,BV Taiber,Tableros Aglomerados Ibéricos,SL Sonae MC - Modelo Continente, SGPS, SA Tecmasa Reciclados de Andalucia, S.L. Sonae Novobord (PTY) Ltd Teconologias del Medio Ambiente,SA Sonae RE, S.A. Teliz Holding B.V. Sonae Retalho Espana-Servicios Gen.,SA Textil do Marco,SA Sonae SGPS, SA The Artist Porto Hot.&Bistrô-Act.Hot.,SA Sonae Sierra Brasil SA TLANTIC B.V. Sonae Sierra Brazil B.V. Tlantic Portugal-Sist. de Informação, SA
Sontur BV Sonvecap BV Spanboard Products,Ltd Spinarq-Engenharia,Energia e Ambiente,SA Tafisa Investissement
| Sonae/Efanor/NOS Group Companies | |
|---|---|
| Tlantic Sistemas de Informação Ltdª | Vistas do Freixo-Emp.Tur.Imobiliários,SA |
| Todos os Dias-Com.Ret.Expl.C.Comer.,S.A. | Vuelta Omega, S.L. |
| Tool Gmbh | Weiterstadt Shopping BV |
| Torre Ocidente, Imobiliária,SA | World Trade Center Porto, S.A. |
| Torre São Gabriel-Imobiliária,SA | Worten Canárias |
| Troia Market-Supermercados, S.A. | Worten España Distribución, SL |
| Troia Natura, S.A. | Worten-Equipamento para o Lar,SA |
| Troiaresort-Investimentos Turísticos, SA | ZIPPY - Comercio y Distribución, S.A. |
| Troiaverde-Expl.Hoteleira Imob.,SA | ZIPPY - Comércio e Distribuição, SA |
| Tulipamar-Expl.Hoteleira Imob.,SA | Zippy Turquia |
| Zon Audiovisuais, SGPS | |
| Unishopping Administradora Ltda. | Zon Cinemas, SGPS |
| Unishopping Consultoria Imob. Ltda. | ZON Finance BV |
| Upstar Comunicações SA | ZON III-COMUNICAÇ ELETRÓN SA |
| Urbisedas-Imobiliária das Sedas,SA | ZON II-SERVIÇOS TELEVISÃO,SA |
| Valecenter Srl | Zon TV Cabo SGPS SA |
| VALOR N, S.A. | Zon TV Cabo, SA |
| Via Catarina- Centro Comercial, S.A. | Zubiarte Inversiones Inmob,SA |
| Viajens y Turismo de Geotur España, S.L. | ZYEVOLUTION-Invest.Desenv.,SA |
203
The signatories individually declare that, to their knowledge, the Management Report, the Consolidated and Individual Financial Statements and other accounting documents required by law or regulation were prepared meeting the standards of the applicable International Financial Reporting Standards, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated and individual results of the issuer and that the Management Report faithfully describes the business evolution and position of the issuer and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face.
The Board of Directors
Ângelo Gabriel Ribeirinho Paupério
Maria Cláudia Teixeira de Azevedo
(This is a translation of a report originally issued in Portuguese in the event of discrepancies, the Portuguese language version prevails)
Page 2 of 2
Porto, 17 March 2015
______________________________________ Deloitte & Associados, SROC S.A. Represented by António Manuel Martins Amaral
In compliance with the applicable legislation and according with the terms of the mandate given to the Statutory Audit Board, we hereby issues our Report and Opinion of the audit performed, as well the Management Report and other documentation concerning the individual and consolidated accounts, for the year ended at 31 December 2014, which are of the responsibility of the Company's Board of Directors.
The Statutory Audit Board, during the year under review, accompanied under its competence, the management of the company and its subsidiaries, examined, to the adequate extension, the evolution of the company, the validity of accounting records, the quality of the preparation and financial information disclosure process, related accounting policies, valuation criteria and, the compliance with legal regulations and laws.
The Statutory Audit Board held meetings with quarterly frequency, which, were attended by the Board and personnel responsible for financial operations, accounting, internal audit, risk management and the Society of Statutory Auditor and the External Auditor. Additionally, the Statutory Audit Board attended the meeting of the Board of Directors which approved the management report and accounts for the year.
The Statutory Audit Board oversaw the effectiveness of the risk management and internal control procedures, having appreciated the planning and results of the internal and external auditors. The Statutory Audit Board reviewed with precise attention the accounting treatment of transactions that materially influenced the development of the activity expressed in the financial statements.
Furthermore, the Statutory Audit Board appreciated the Corporate Governance Report which is attached to the company's Management Report, regarding the consolidated financial accounts, under the terms and for the purpose of No. 5 of Art. 420 of the Portuguese Commercial Code (Código das Sociedades Comerciais), having concluded that the report includes the elements referred to in Art. 245 – A of the Securities Market Code (Código dos Valores Mobiliários).
As part of its responsibilities, the Statutory Audit Board examined the management report and other documentation concerning the individual and consolidated accounts, prepared by the Board of Directors, considering that the information disclosed satisfies the legal standards and is appropriate for understanding the financial position and results of the company and its consolidation universe, and analyzed the legal certification of accounts and audit report, issued by the society of the statutory auditor, to which it has given consent.
In the light of the above mentioned, the Statutory Audit Board is of the opinion that there are the conditions for the Shareholders' General Meeting to approve:
In accordance with paragraph 1, point a) of Art. 8 of Regulation nº 5/2008 of CMVM and point c) of paragraph 1 of Art. 245 of the Portuguese Securities Market Code, we declare that, to the best of our knowledge, the consolidated and individual financial statements were prepared in accordance with the applicable accounting standards and give a true and fair view of the assets and liabilities, financial position and results of Sonaecom, SGPS, S.A. and the main companies included in the consolidation perimeter, and that the Management Report faithfully describes the business performance and position of the issuer and of the companies included in the consolidation perimeter containing a description of the major risks and uncertainties that they face. Further, we inform that the Corporate Governance report issued complies with the Art. 245-A of the Portuguese Securities Code.
Maia, 25 March 2015
The Statutory Audit Board
Arlindo Dias Duarte Silva
Óscar José Alçada da Quinta
Armando Luís Vieira de Magalhães
Sonaecom SGPS is listed on the Euronext Stock Exchange.
Information is available on Reuters under the symbol SNC.LS and on Bloomberg under the symbol SNC:PL.
This document may contain forward-looking information and statements, based on management's current expectations or beliefs. Forward-looking statements are statements that are not historical facts.
These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including, but not limited to, changes in regulation, the telecommunications industry and economic conditions; and the effects of competition. Forward-looking statements may be identified by words such as "believes", "expects", "anticipates", "projects", "intends", "should", "seeks", "estimates", "future" or similar expressions.
Although these statements reflect our current expectations, which we believe are reasonable, investors, analysts and, generally, the recipients of this document are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. You are cautioned not to put undue reliance on any forward-looking information or statements. We do not undertake any obligation to update any forward-looking information or statements.
Report available on Sonaecom's www.sonae.com
Carlos Alberto Silva [email protected]
Sonaecom, SGPS, S.A. Edifício 1A Lugar do Espido - Via Norte 4471-909 Maia
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