Annual Report bysteel, s.a. December 31, 2016
Index
A) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
MANAGEMENT REPORT TO THE BOARD OF DIRECTORS MACROECONOMICS FRAMEWORK BUSINESS ACTIVITY MATERIAL EVENTS OCCURRING AFTER THE END OF THE PERIOD FUTURE PERSPECTIVES OWN SHARES AUTHORIZATION FOR TRANSACTIONS BETWEEN THE ENTITY AND ITS DIRECTORS BRANCHES OF THE ENTITY PROPOSED RESULTS APPLICATION FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES INFORMATION REQUIRED BY LEGISLATION AUTHORIZED DISCLOSURE DATE FOR ISSUE THE FINANCIAL STATEMENTS FINAL NOTE
3 3 13 23 23 24 24 25 25 25 25 26 26
B)
ANNEX TO THE BOARD OF DIRECTORS REPORT
27
C)
CORPORATE BODIES
28
D)
INDIVIDUAL FINANCIAL INFORMATION
29
INDIVIDUAL BALANCE SHEET INDIVIDUAL INCOME STATEMENT INDIVIDUAL STATEMENT OF EQUITY CHANGES IN 2016 INDIVIDUAL STATEMENT OF EQUITY CHANGES IN 2015 INDIVIDUAL CASH FLOWS STATEMENT ANNEX AT DECEMBER 31, 2016
29 30 31 32 33 34
E)
LEGAL CERTIFICATION OF ACCOUNTS
69
F)
REPORT AND OPINION OF THE SOLE FISCAL AUDITOR
71
Annual Report 2016
A)
Management Report to the Board of Directors
Dear Shareholders,
In compliance with the legal and statutory regulations, the Board of Directors presents the management report for 2016 fiscal year. As the environment where we operate is directly related to the positive evolution or downturn of the global economy, before presenting the entity’s financial information and its business centers we will do a slight approach to the most important national and international macroeconomic data.
1.
Macroeconomics framework
1.1
International macroeconomic framework
With regard to the international framework, the current outlook points to a gradual pick-up in activity and world trade. Despite this positive development in 2016, in the coming years world economic growth is expected to remain below the levels seen, on average, in the period prior to the financial crisis. In the fourth quarter of 2016, the world economy was more buoyant, boosted by advanced economies, accompanied by an improvement in industrial production in both Japan and the European Union. Among the advanced economies, the Gross Domestic Product (GDP) of the United States of America (USA) accelerated to 1.9% year on year (1.7% in the 3rd quarter), coupled with robust private consumption and recovery of private investment; while that of the United Kingdom remained at 2.2%. For emerging countries, China’s GDP slowed down to 6.7% (the lowest in the last 25 years) and both exports and imports of goods fell to -7.2% and -5.3%, respectively (-2.9% and -14.3% in 2015). In 2016, world trade in goods also accelerated as a result of more dynamic world exports, since world imports decelerated. The strengthening of trade was mainly observed in emerging and developing countries (especially in Asia).
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In the fourth quarter of 2016, the economic sentiment indicator showed a significant recovery for both the European Union (EU) and the euro area (EA), as a result of improved confidence indicators. According to the European Commission’s (EC) preliminary estimate, the GDP of the European Union and the euro area increased to 1.9% and 1.8% year on year in real terms. The quantitative indicators for the euro area for the whole of 2016 indicate a strengthening of economic activity (industrial production, retail sales and exports of goods in nominal terms).
Macroeconomic Indicators
2014
2015
2016(e)
2,4 1,6 1,2 0,3
2,6 2,2 2,0 1,2
1,6 1,9 1,8 1,0
GDP: USA EUROPEAN UNION EUROZONE JAPÃN
Source: GPEARI Finanças Reading: Percentage variationl (e) - estimated
The EU labour market saw a gradual improvement throughout 2016, with a drop in the unemployment rate for both the EU and the EA, standing at 8.2% and 9.6%, respectively, in, December 2016 (9.0% and 10.5% in December 2015). In December 2016, the expectations of euro area entrepreneurs in relation to job creation worsened for the manufacturing, service and retail sectors, but improved for the construction industry. In the US, the unemployment rate dropped to 4.9% (5.3% in 2015), strengthening the trend of the gradual pick-up in employment observed in recent years. In December 2016, the annual rate of inflation of the euro area rose to 1.1%, mainly due to the recovery of energy prices and the acceleration of unprocessed food prices. However, for 2016 as a whole, the annual average inflation rate only increased to 0.2% (0.0% in 2015), reflecting a less marked fall in energy prices, to -5.0%, on average (-6.9% in 2015). The annual rate of inflation of advanced economies and China accelerated at the end of 2016, rising to 1.3% in the US (0.1% in 2015).
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2014
2015
2016(e)
USA EUROPEAN UNION
1,6 0,5
0,1 0,0
1,3 0,3
EUROZONE
0,4
0,0
0,2
JAPÃN
2,8
0,8
-0,1
USA EUROPEAN UNION
6,2 10,3
5,3 9,4
4,9 8,2
EUROZONE
11,6
10,9
9,6
JAPÃM
3,6
3,4
3,1
USA
2,9
0,3
-1,0
EUROPEAN UNION EUROZONE
1,2 0,9
2,2 2,0
1,9 1,7
JAPÃN
2,1
-1,2
-0,9
Macroeconomic Indicators Inflation:
Unemployment rate::
Industrial Production Index:
Source: IMFI/ European Commission/ Eurostat/ GPEARI Finance Reading: Percentage variation (e) - estimated
In average annual terms, the price of oil fell again in 2016 compared to the previous year, prolonging the trend observed since 2013. This downward trend is expected to be halted in 2017, with a projected average oil increase of approximately 15%. In the years ensuing, the growth rate should slow down. At the end of 2016, the spot price of Brent crude oil averaged USD 45/bbl (EUR 42/bbl). However, in the last months of the year, oil prices rose significantly to an average of USD 55/bbl (EUR 52/bbl) in December 2016, reflecting the agreement reached between member and non-member countries of OPEC (in November 2016) to reduce production by 1.2 million barrels per day from January 2017. In the fourth quarter of 2016, the price of non-energy raw materials accelerated 9.8% year-on-year (1.3% in the third quarter), a trend that extended to all products, with emphasis on metals and industrial inputs. The reduction of the price of oil in an oil-importing economy, such as the Portuguese economy, has a positive impact on GDP growth by reducing production and transport costs and their transmission to consumer prices. The impact on consumer prices reflects both the direct effect of the reduction in the price of oil products and the indirect effect of reducing the cost of producing other goods. In addition, by reducing the price of oil the reduction of inflation has a positive effect on the real disposable income of households and, consequently, on private consumption.
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Despite the direct effect of the oil price reduction described above, there are no negligible effects in this regard, in particular the effect of the fall in the price of this raw material in oil-exporting economies, by significantly reducing revenues associated with the exploitation of this raw material, as is the case of Angola. With oil production as the main source of export and tax revenues, Angola is suffering the impact of the steep decline in this raw material since mid-2014. In this context, and due to the strong link between the Portuguese and Angolan market, the sharp contraction in external demand from Angola, which has had a significant impact on Portuguese exports, cannot go unnoticed.
Raw materials
Brent oil USD/Barrel (1) Agricultural goods (2) Metal (2)
2014
2015
2016(e)
99,5 1,9 -10,3
53,6 -13,5 -23,1
45,1 -6,9 -5,4
Source: Ministry of Finance / Bank of Portugal Reading: (1) Barrel average price/USD / (2) Percentage variation (e) - estimated
In December 2016, the euro exchange rate depreciated significantly against the dollar, with the euro standing at USD 1,054 at the end of the year, corresponding to a depreciation of 3.2% in comparison to the end of 2015 (USD 1,089). Throughout 2016, the euro-dollar followed a markedly downward trend, in the context of diverging monetary policies between the two sides of the Atlantic.
Foreign currencies
2014
2015
2016
EUR/USD EUR/JPY EUR/GBP
1,214 145,23 0,779
1,089 131,07 0,734
1,054 123,00 0,856
EUR/CHF
1,202
1,084
1,074
Source: Ministry of Finance / Bank of Portugal Reading: Foreign currencies parity at the end of the period
The Council of the European Central Bank (ECB) maintained a set of unconventional monetary policy measures during 2016, with the rate of the main refinancing operations declining to 0,00%. In December 2016, short-term interest rates on the euro money market continued their downward trend, renewing historically low levels, to -0.26% on average for the year 2016. In the US, 3-month interest rates accentuated the upward movement since the beginning of the year, with a yearly average of 0.74%. Thus, at the end of December 2016, 3-, 6- and 12-month Euribor interest rates stood at -0.32%, -0.22% and -0.08%, respectively. In the US, short-term interest rates rose to close to 1.00% at the end of 2016.
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Reference interest rates
Eurozone USA Japan
2014
2015
2016
0,05 0,25 0,10 0,50
0,05 0,50 0,10 0,50
0,00 0,75 -0,10 0,25
2014
2015
2016
0,14 0,02 0,08 0,17 0,33
-0,13 -0,21 -0,13 -0,04 0,06
-0,33 -0,37 -0,32 -0,22 -0,08
0,26
0,61
1,00
0,11
0,08
-0,05
Source: Ministry of Finance / Bank of Portugal Reading: Percentage at the end of the period
Monetary Market interest rates
Eurozone Eonia Euribor 1 month Euribor 3 months Euribor 6 months Euribor 12 months USA Libor 3 months Japan Libor 3 months Source: Ministry of Finance / Bank of Portugal Reading: Percentage, annual average
In December 2016, long-term interest rates rose for both the US and the euro area, albeit more sharply for the former. Investors also penalised some bond markets (Portugal and Italy), resulting in a spread versus Germany, partly due to the fragility of the banking sector of both countries. Concerns about the political situation in Europe led to the widening of intraeuro spreads, particularly in Portugal, Italy and Spain. At the end of 2016, international stock indices took a downturn. The drop in stock prices was influenced by the negative performance of the Chinese stock exchange, the significant decline in the price of oil and some instability in the financial sector.
Stock markets
Dow Jones EURO STOXX Nikkei 225 Standard & Poors 500
2014
2015
2016
13,1 14,2 17,5
11,8 23,9 6,8
-9,7 -11,7 1,5
Source: European Central Bank
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Despite the emergence of new positive factors in 2016, namely low energy prices, the uncertainty associated with the global economic outlook remains high and the intensification of downside risks are related to geopolitical tensions, the reappearance of volatility in financial and foreign exchange markets in the context of diverging monetary policies among major economies and the incomplete implementation of structural reforms. Moreover, a prolonged period of very low inflation, or even deflation, will be equally detrimental both to the prospects of world growth, and in particular to European growth, and to the persistence of excessive public and private indebtedness. In this context, the uncertainty surrounding economic policy guidelines in the United States, as well as the development of the UK's relations with the European Union and a possible weaker recovery of emerging market economies generate risks of possibly less buoyant developments in economic activity and trade flows on a global level. In terms of financial markets, the possibility of renewed tensions cannot be excluded and there is some uncertainty about the configuration of the ECB’s non-conventional monetary policy. In addition, the vulnerable situation of the banking system or the fiscal position in some euro area countries may lead to an increase in sovereign debt interest rates. These factors could lead to an increase in the financing costs of the European economy, with an impact on private consumption and investment.
1.2
National macroeconomic framework
In 2016, the Portuguese economy maintained the path of moderate recovery that has characterised the past few years. This moderate growth translates into an average annual GDP growth rate of 1.2% in 2016, with GDP expected to accelerate to 1.4% in 2017 and stabilise its growth rate by 1.5% in the two years ensuing. In the coming years, GDP growth should be close to that projected by the ECB for the euro area, but it will not be able to reverse the negative spread accumulated between 2010 and 2013. This lack of real convergence vis-Ă -vis the euro area reflects the persistence of structural constraints to the growth of the Portuguese economy, with emphasis on the high levels of indebtedness of the public and private sectors, unfavourable demographic trends and the persistence of inefficiency in the labour and product markets, which require the continuation of the process of structural reforms. After a very dynamic growth of exports of goods and services in 2015 (6.1%), in 2016 the growth rate decelerated to 3.7%. This slowdown, which should not prevent a new gain in market shares, reflects both the deceleration of external demand and some temporary factors, such as the reduction in production in industrial units in the automotive and energy sectors. In addition, in 2016 exports continued to reflect unfavourable sales behaviour for some non-EU markets, most notably Angola. Current projections point to a dissipation of these factors in 2017 and an acceleration of external demand, contributing to the return of more dynamic growth of exports.
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Portuguese economic recovery in 2016 thus continued to be sustained by the buoyancy of exports of goods and services, accompanied by a slightly higher growth in domestic demand and a positive evolution of Gross Fixed Capital Formation (GFCF). The external environment of the Portuguese economy should remain favourable, albeit with a downward revision of global trade flows relative to previous periods. In addition, monetary and financial conditions should remain globally accommodative, and the Portuguese economy should maintain the financing capacity vis-Ă -vis the exterior. In turn, the price of energy and non-energy raw materials should reverse the downward trend of recent years. In this globally favourable environment, exports of goods and services should be more dynamic than external demand and will continue to be the component of global demand with the greatest contribution to the growth of activity. The greater buoyancy of the Portuguese economy in the coming years will also be sustained by an acceleration of the GFCF, based on a recovery of business investment. In sectoral terms, at the end of 2016, there was a lower rate of change in the Gross Value Added (GVA) of the main activity sectors compared to 2015, especially in construction and industry. Activity in the services sector, which accounts for 74% of GVA, after a slight deceleration in 2016, should show a moderate acceleration profile in 2017. This sector will continue to benefit from the momentum of exports, in particular tourism, but also of services associated with the export of goods, in line with a greater allocation of productive resources to the sectors most exposed to international competition.
Indicadores MacroeconĂłmicos Expenditure and GDP - Private Consumption - Public Consumption - GFCF - Exports - Imports - GDP at market prices Inflation Industrial Production Index Industrial Turnover Index PSI 20 Index Unemployment rate
2014
2,2 -0,5 2,8 3,9 7,2 0,9 -0,2 1,8 -1,2 -26,8 13,9
2015
2,6 0,8 4,6 6,1 8,2 1,6 0,5 1,2 0,2 10,7 12,4
2016(e)
2,1 1,0 -1,7 3,7 3,5 1,2 0,8 -1,2 6,1 -11,9 11,0
Source: Ministry of Finance / Bank of Portugal Reading: Percentage variation, excepting unemployment rate (e)- Estimatied
Against a background of rising real disposable income, declining unemployment, and with consumer confidence remaining at particularly high levels, in the last quarter of 2016 private consumption was more dynamic and higher than GDP growth in the third quarter. The acceleration of this aggregate in year-on-year terms will have essentially reflected the acceleration of the consumption of non-durable goods. On the other hand, there was a slowdown in the consumption of durable goods for the second consecutive quarter, explained by the deceleration in the purchase of passenger cars.
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On the other hand, the GFCF once again recorded a year-on-year decrease in the last quarter of 2016, down -1.7% compared to a growth of 4.6% in 2015. The evolution of the GFCF throughout the year reflected the decline of the construction component, in line with the evolution of cement sales, conditioned by the sharp drop in public investment. Public investment dropped sharply in 2016, but this component is particularly uncertain given the late entry into force of the budget for this year and taking into account the expenditure profile associated with investment projects co-financed by Community funds. Inflation, as measured by the Harmonized Index of Consumer Prices (HICP), is expected to increase to 0.8% in 2016, compared to 0.5% in 2015. Compared with projections for the euro area, inflation is expected to remain 0.6 pp above the euro area average in 2016. The price increase in 2016 reflects a slight acceleration in service prices and a lower drop in the prices of energy and non-energy industrial goods. The upward trend in inflation is driven by an increase in internal and external inflationary pressures, motivated by the context of growth of the national and global economy, by the positive impact of the monetary policy measures adopted by the ECB, as well as by the incorporation of the technical hypotheses of price increases of raw materials in euro. In addition, there was an improvement in consumer quality indicators. On the other hand, the qualitative indicators of business opinion showed a mixed evolution, with domestic demand for consumer goods improving while the volume of retail sales deteriorated. With regard to the conditions on the labour market, there is also evidence of a favourable trend in employment. Employment growth will occur in the private sector, as public employment is expected to remain relatively stable. These developments in employment, along with the hypothesis of stabilisation of the active population, imply maintaining a downward trend in the unemployment rate, 11.0% at the end of 2016, versus 12.4% in 2015. However, the growth in activity has translated into rather sluggish labour productivity in the recent recovery period. After a slight drop in 2016, annual labour productivity growth is projected to be around 0.5% in the coming years. Despite the moderate recovery of the Portuguese economy since 2013, several structural constraints to economic growth persist, including the high level of indebtedness of the various sectors of the economy – households, non-financial corporations and the public sector – unfavourable demographic trends, a high level of long-term unemployment and a pace of recovery of investment short of that observed in previous recoveries. In this context, it is important to continue to deepen the process of structural reforms by increasing incentives for innovation, factor mobility and investment in physical and human capital, thereby creating conditions for a sustained increase in productivity and growth potential of the economy . In addition, in a context of relatively high levels of uncertainty, maintaining a predictable institutional and fiscal framework will contribute to preserving investor confidence and ensuring a favourable investment climate. Finally, pursuing an additional fiscal consolidation effort is crucial if the downward trend of the level of public indebtedness is to be sustained and to remain robust to adverse shocks.
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1.2.1
The construction sector
In a moderate economic recovery, the performance of the construction sector is once again negative. In fact, investment in construction and Gross Value Added (GVA) recorded significant decreases throughout 2016, with a 3.1% fall in the sector’s GVA and a 3.6% drop in Gross Fixed Capital Formation (GFCF) in construction, contrasting with the positive GDP growth of 1.1% in the same period. With the confirmation of this new fall in production in 2016, this will be the 9th consecutive year in which the construction sector did not grow at all. It is estimated that the volume of production in 2016 is less than 45% of production in 2001, when construction peaked. Even so, not all indicators behaved negatively in 2016 when compared to the previous year. With regard to employment, the number of construction workers grew 3.7% year on year, representing an increase of 10 thousand workers on average throughout 2016. On the other hand, the data on transactions involving dwellings confirm the strong momentum that has been characterising the real-estate market, where the number of sales of housing units grew 20% year on year. Estimates point to a total of more than 128 thousand dwellings sold during 2016. Production indicators were very positive, with a 36% increase in the number of new licensed dwellings, +29% in the value of public works promoted and +19% in public works contracts. These increases anticipate a pick-up in the sector in the short term. In turn, the amount of new loans granted for the acquisition of housing amounted to EUR 3.2 billion, a growth of 54% in comparison to the same period of 2015. There were also positive developments in the licensing of new non-residential buildings, with a licensed area of more than 1.6 million m2 during the first eight months of 2016, which translates into a year-on-year increase of 27.5%. The public works market began to show signs of recovery in the last months of 2016, reversing the downward trend witnessed over a long period. The amount of public works contracts put out to tender amounted to EUR 1,756 million, 42% higher than in 2015. This is the best record since 2011 in terms of promotion of public works. In turn, the total volume of contracts awarded and reported in the public works observatory, resulting from public tenders, stood at EUR 718 million in 2016. Despite a 14% growth over the previous year, hiring remains at historically low levels. Contracts entered into as a result of direct awards amounted to EUR 544 million in 2016, 20% higher than in 2015. On the whole, contracts concluded and reported in 2016, which include public tenders, direct awards and other modalities, such as competitions limited by prior qualification, amounted to EUR 1,355 million, 12% more than in 2015.
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These are the first signs of a potential recovery of the construction activity that the 2017 State budget should help to consolidate due to its direct effects on employment and economic growth. Consumption of cement in the national territory followed the downward trend in the sector, with a negative change of 4.4% in 2016, conditioned by the sharp drop in public investment in the construction sector. In the State budget for 2017, growth in public investment is once again not foreseen. In a crisis context, this variable is crucial to boost private investment and construction and to kick start the Portuguese economy.
Sector Indicators Concrete sales Building licenses Construction – Works completed: - Buildings - Total - Buildings - Family Housing - Dwellings - Family Housing GFCF (Construction)
2014
2015
2016(e)
-9,5 -5,2
6,9 -3,3
-4,4 2,0
-12,0 -21,2 -24,4 -3,2
-19,2 -21,5 -25,4 4,1
-8,3 -2,8 -2,3 -3,6
Source: Ministry of Finance Percentage variation (e) - estimated
The economic situation in Angola remains unfavourable for the construction sector. Insufficient demand, lack of materials and difficulties in obtaining bank loans were the main constraints. Likewise, the deterioration of sales perspectives, excessive bureaucracy and state regulations have conditioned the activity of Portuguese companies in Angola. The drop in crude oil prices in the period under review has reduced Angolan tax revenues from oil exports, leading the Government to cut public spending, including contracts to the State, thus affecting Portuguese companies oriented towards the Angolan market. Furthermore, construction companies continue to experience delays in payments, a recurrent situation in Angola. The conversion of kwanzas revenues to dollars and their expatriation to Portugal will be a growing problem due to the lack of foreign exchange in the market. Consequently, the Angolan crisis will have a negative impact on the margin of Portuguese companies, as Angola continues to be the largest market for Portuguese construction companies.
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2.
Business activity
bysteel is specialize in design, development, manufacturing, assembly of metallic structures, metallic construction and assembly of coatings on roofs and facades, such as industrial and commercial buildings, rehabilitation buildings, art works, housing and offices, among others. The services provided by bysteel aim to meet its customers and market demands through a sustained image and based in recognition, trust, good taste and refined aesthetic service applied in each project. “To be one of the reliable European metal construction companies, recognized as a priority partner in the most demanding and innovative projects.” This mission is pursued through qualified and motivated resources with the certainty that each outcome defines the excellence of the created relationships and the customer’s delivered value. Today, bysteel is a relevant and prestigious player in the markets where it operates, leaving its mark in countries such as France, Angola and the United Kingdom, where it aspires to become the first promotor choice for metallic construction. Creating, producing, constructing structures and metallic construction works in accordance with the highest market standards, at a competitive price has allowed bysteel to consolidate an image of solidity and credibility with the largest international customers. The reinforcement of the existing trade relations along with the creation of new ones has enabled bysteel to strengthen its international position and the customer portfolio diversification, highlighting the important bet that has been made in France and in the United Kingdom. 2015 was a transition year and paradigm shift! The clear bet on the French market required time for analysis and definition of the bysteel’s position as a player in that market, implying a respective turnover adaptation. Thus, 2016 was a year of international turnover consolidation and growth, which grew by approximately 18% compared to 2015, only 6% below the excellent 2014 result. The French market was, without a doubt, responsible for this recovery, accounting for 71.5% of total international turnover. After eight years of crisis, 2016 was a year of recovery in the construction sector in France, with a volume growth of 1.9%, according to the Fédération Française du Bâtiment (FFB). Associated with the public spending growth and persistently low interest rates, the residential and non-residential construction sector is expected to maintain a growth path in 2017 of approximately 3.4%. It is in this context that bysteel outlooks next year.
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Regarding the United Kingdom, and despite the British economy has performed better than expected after the country voted for the European Union's exit, bysteel maintained a conservative position in 2016 with an international turnover of 6%. The construction sector grew more than expected in 2016. The same may not happen in 2017, with an expected inflation acceleration and a consequent decrease of companies and consumers purchasing power. Indeed, the customer portfolio diversification, associated with bysteel’s paradigm shift regarding internationalisation, led to a weight reduction of Angola's geography since 2013, representing only 1.5% in 2016 of its international turnover. The Republic of the Congo, which accounted for 42.3% of its international turnover in 2014, had no weight in 2016 and the same is expected to 2017. bysteel industrial production unit transformed, in 2016, 6.079 tons of steel, 10% less than in the previous period. This decrease in total production was reflected in a proportional decrease of the total turnover compared to the previous year. In 2016 the international turnover corresponds to 80.3% of bysteel’s total turnover, an increase of approximately 18% YoY.
TURNOVER BY GEOGRAFY 100%
80%
60%
40%
20%
0% % 2014 Portugal
bysteel, s.a.
Angola
% 2015 France
Brazil
Congo Republic
% 2016 Algeria
UK
Others
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2.1. National operation In 2016, the construction sector in Portugal shows again an unfavorable behavior for the 9th consecutive year, according to the Portuguese Federation of Construction Industry and Public Works data. However, the same source notes the appearance of positive signs that point to the sector recovery as early as 2017. In this context, bysteel recorded a 53.5% fall in turnover in Portugal. The reference work in this period in the national market was the Autoeuropa Building Expansion in Palmela, as well as the conclusion of two works already started in 2015, the Museum of Art, Architecture and Technology in Lisbon and the Food Court - IKEA Matosinhos.
Art Architecture and Technology Museum - EDP
bysteel completed in 2016 the 800-tonne metal structure assembly that that made Amanda Levete's innovative architecture and ingenuity real, in a building with more 7,000 square meters located on the Tagus River bank, in the district of Belém establishing a natural and fluid relation between the city and the river. It was a metallic construction project for the EDP Foundation, inaugurated on October 4, 2016 to celebrate the Lisbon Architecture Triennale.
Food Court - IKEA Matosinhos
In this work, performed at night in order not to disturb the normal shopping mall activity, about 400-tonnes of metallic structure were applied. This was a project of high technical complexity due to the need to apply large pillars inside the mall to support the slab of IKEA's new restoration space. The logistics associated with night work have increased the rigor required in this project.
Autoeuropa Building Expansion in Palmela
bysteel was responsible for the metal structure supply and assembly of a new building with about 10,500 square meters, where more than 785 tons of steel were applied, in another expansion of Autoeuropa industrial unit in Palmela. Timeliness and rapid responsiveness were essential to the successful completion of the project.
Metallic Bridge in Ruivães
This contract made by the group's construction company, dst, s.a, required the design, supply and production of a 23-ton and 33-meter metal bridge in record time. The assembly of this structure was carried out in only 2 days
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2.2. International operation The international activity of bysteel has been showing a growth trend since 2011, strongly boosted in 2014 by the production of the metal structure for twelve hospitals in Congo. In that year, there was a growth of more than 200% in the exports volume compared to the same period of the previous year. Despite the strong bet in market diversification, it was not possible to recover from the activity reduction felt in Congo. The weight of exports in the entity’s total turnover contracted by 3.8 percentage points compared to 2014. Nevertheless, bysteel is one of the fastest growing export companies, due to its efforts to consolidate its position as a reference player in Europe. The commitment to sustained growth in the French market began in 2015 and among the list of works, the biggest brightness is the remodeling of one of the most luxurious hotels in Paris, the Hotel Crillon, the construction of Point Sèvres five towers and the Stade Délort remodeling with more than eight thousand seats in Marseille. Combining the importance of design / production projects with the delivery capacity and performance in a highly competitive market such as the French one, bysteel’s position is reinforced by these contracts, having this recognition allowed some of the largest construction companies loyalty, namely Bouygues, Vinci and Eiffage groups. This business path was recognized with the title of "National Champion" by the European Business Awards (EBA) 2014/2015 for excellence, innovation, ethics and good business practices in 2014. The 2016 year was also marked by strengthened work to consolidate bysteel’s position in the United Kingdom. The recognition was soon followed by London Stock Exchange Group plc which, in its publication "1000 Companies to inspire Europe 2016", integrated bysteel into the group of companies that, together, accounted for a 66% job creation growth in the last two years and, at the same time, have recorded positive turnover growth since 2013. The diversification effort in 2015 was preponderant for the year 2016, allowing to increase the international operation weight by 18.4% and reach an international turnover of more than nineteen million euros
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INTERNATIONAL BUSINESS 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013
2014
2015
2016
International turnover weight
In terms of international operations, the French market was the main source of revenue in 2016. From this year works in progress list it should be highlighted the second phase of the Complexe Sportif d'Antony, the expansion of Lyon Airport, Thais-Levallois, A9A2, A9B, Hippodrome de Longchamps and Roland Garros. In the United Kingdom, bysteel started its activity in 2015 with the construction of the Graduate Center building on the Queen Mary University campus. The works featured in 2016 in this geography are the Addesltone Town Center and, the first venture of Thames Valley Science Park façade cladding, which began by the year’s end. bysteel has been decreasing its activity in Angola and 2016 was the lowest of the last three years, accounting for only 1.5% of turnover. This year the reference work is the Fortaleza Shopping Mall.
Complexe Sportif d’Antony
With 5,250 square meters this will be the first big gym of the city with capacity to hold several team sports and high performance competitions, with a parking lot park with capacity for one-hundred cars and with a climbing wall of sixteen meters high. This is project started in August 2015, and scheduled to be completed October 2017, where bysteel was responsible for supply and assembly of more than 500 tons of steel: the longest beam measures 31 meters and weighs more than 9 tons.
Aéroport de Lyon
The new terminal 1 of the Lyon-Saint Exupéry Airport aims to double its current capacity and reach fifteen million passengers by 2020. It will have an area of 70,000 square meters including a huge skylight called "Green Space" where once again the technical requirement is placed on this superstructure assembly. This project represents another design / construction project of bysteel responsibility, where a total of more than 2,000 tons of steel were applied.
bysteel, s.a.
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Thais-Levallois
Thais-Levallois is a 7-storey building with more than 5,600 square meters located on Anatole France street, in LevalloisPerret, whose superstructure was built after demolition of the existing building, where the components of rehabilitation and new construction merge. It was a project totally under the responsibility of bysteel. With a link between volume and verticality, this 300-tonne building is integrated in the heart of one of the most attractive villages of western Paris.
A9A2 Building
This building was built over the railroad which leads to Austerlitz Station, and comprises a mixed solution of reinforced concrete and metal structure. It is an office building with about 17,500 square meters and eight floors, where bysteel was responsible for the demanding design and construction project, totaling over 2,200 tons of steel applied.
A9B Building
This project of the architect Bernard Reichen comprises the construction of an office and commercial building of 22,500 square meters, with the upper floors including ornamental terraces where once again the design was made by bysteel. About 2,000 tons of metal structure were produced and applied in a project that tested the technical and project management capacity of one of the most important bysteel customers in the French market.
Hippodrome Longchamp
The renovated Longchamp intends to establish itself as one of the world great hippodromes, through an emblematic architecture able to adapt to the surrounding, maintaining the initial project historical heritage, which dates from the nineteenth century. With tight construction deadlines and a project where deadlines compliance was critical, bysteel responded unequivocally, demonstrating once again that it deserves trust for demanding projects.
Stade de Roland Garros
The modernization of the existing facilities to respond to players and assistance needs has added bysteel to another reference project in France, the modernization of the Stade Roland Garros for the Fédération Française de Tennis. It is a project of about 500 tons of metal structure, to be developed in several phases, with an expected end to 2020
Queen Mary University
With a total budget of £ 39 million, the new Graduate Center, which has seven floors, over 7,700 square meters of total area and around 800 tons of applied metal structure, will be the "new home" of the School of Economics and Finance of Queen Mary University. It was the first work on English soil where, once again, the demand and responsibility for quality and safety were put to the test in this project, completed in November 2016.
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Addlestone Town Center
A development project of 70 million pounds, started in March 2015 that will create a new space in the city centre and will include a hotel, 230 new apartments, cinemas, a gym and parking with 445 places, giving priority to neighborhood spaces to boost the city's economy. In this project, bysteel is responsible for the metal construction of a two-story building that will include six top-floor cinemas and a street-floor commercial space for a total of 850 tons of metal structure.
Thames Valley Science Park
The Gateway Building, the first bysteel facade cladding work in the UK, will be one of four four-story buildings totaling 18,500 square meters in a mix of laboratories, offices and lodgings where aluminum and glass coatings, which have been designed to fit a new generation of users. This building is part of a complex that will generate more than five thousand jobs developed to attract innovative and technology-based companies.
Shopping Fortaleza (Angola)
In a project estimated in more than US $62 million, corresponding to 18,000 square meters, bysteel assumed responsibility for the metal structure production and assembly of the new mall located in the marginal area of Luanda, near Fortaleza. By 2017, there already are a few key works throughout various geographies, and Angola's position in international turnover is expected to be strengthened, which has been losing prominence since 2013. The strong commitment to the Gallic market and the effort to consolidate its position in one of the most competitive markets in Europe, the United Kingdom.
2.3. Investment The equity structure of bysteel continues to show an incremental strengthening of productive net assets. Thus, the investment made in 2016 amounted to about 315 thousand euros, which were primarily for the acquisition of transport equipment. Description Basic equipment Transport equipment Admi nistrative equipment Others TFA TFA under construction TOTAL
bysteel, s.a.
2014 87.953,56 6.500,00 25.836,56 120.290,12
2015 115.312,33 110.596,14 17.516,61 1.967,60 67.675,92 313.068,60
2016 86.667,33 207.965,55 19.820,79 178,85 520,00 315.152,52
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2.4. Human resources In 2016, bysteel remained watchful to personal and professional development policy for its employees, which it considers essential. In this sense, during the period ended in December 31, 2016, the entity implemented several transversal training programs, in a total of 11 training actions and a total of 980 certified hours, covering several employees from several departments, including the operational ones, as well as intermediate and higher technical staff. In 2016, the entity’s average staff included 173 employees, of whom 166 are employees and seven administrators. Description Board Members Employees TOTAL
2014
2015 7 187 194
2016 7 177 184
7 166 173
2.5. Economic and financial analysis In 2016, bysteel continued to focus on strengthening its position in foreign markets and internationalization. The period under analysis was characterized by the robustness of its international operating activity, reinforcing its position in the French market. The international operations weight now accounts for more than 80% of the entity's turnover. The strengthening of the entity's operating activity in 2016 was positively reflected in bysteel net profitability, and its positive net profit was consolidated at € 701.4m. Regarding the financial situation of bysteel at the end of 2016, its liquidity and solidity is immediately highlighted, since it has a financial autonomy ratio of 29.42% (+1.61 pp vs. 2015) and its net assets stood at € 25.6 million at the end of the period. The structure of assets focused on customers and other debtors and in tangible fixed assets. bysteel’s financial strength remains a very important base so that the entity can carry on its internationalization process with optimism and enthusiasm. Equity increased to € 7.5M and it is important to highlight the slight increase in the entity's liabilities during 2016 to € 18.1M (compared to € 17.9M at the end of 2015).
bysteel, s.a.
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Balance sheet 30.000
thousand euro
25.000 20.000 15.000 10.000 5.000 0 2015
2016 Assets
Liabilities
Equity
As far as the operational activity of bysteel in 2016 is concerned, it is worth mentioning its turnover, which stood at € 24.1M and a cost of sales reduction of € 4,5M YoY. This reduction is mainly due to the works typology change in which bysteel is involved, where the greatest imposition is undoubtedly the technical capacity and know-how necessary to respond to the international projects exigency and complexity. The investment in new markets and raise new clients in those geographies had some impact on bysteel’s expenses structure, specifically, on other external charges. Accordingly, in line with the entity’s high level of activity, the other external charges amounted to € 12.2M, the cost of sales and staff costs stood at € 7.7M and € 5.1M respectively, which contributed to a positive EBITDA of € 1.7M In order to make it possible to increase its profitability levels and safeguard its services quality, bysteel carried out an indepth optimization exercise of its operational activity, which translated into a positive result of € 701.4m at the end of the economic period under review.
Income Statment 2.000
thousand euros
1.500 1.000 500 0 2015
2016
-500 EBITDA bysteel, s.a.
Operating results
Financial results
Net Profit / Loss Page 21 of 71
Annual Report 2016
The positive evolution of the entity's activity in 2016 is reflected in the values evidenced by some economic, financial and profitability indicators, namely: Description Economic indicators Gross Added Valued* EBITDA* EBITDA % Net Debt/EBITDA Cash-Flow* Rotation of Fixed Assets Rotation of Working Capital Rotation of Stocks Financial Indicators Financial autonomy General liquidity General solvency Profitability Indicators Gross margin of sales Return on sales Return on total assets Return on equity
2014
2015
2016
6.151.161 1.434.979 5,35% 2,97 1.281.778 299,83% 140,59% 739,73%
4.302.818 611.263 2,30% 4,15 653.857 285,25% 117,84% 662,93%
6.400.867 1.654.981 6,87% 3,01 1.588.452 250,54% 101,49% 288,18%
32,43% 152,22% 48,00%
27,81% 139,59% 38,51%
29,42% 144,19% 41,68%
56,28% 1,11% 1,36% 4,20%
54,10% -0,93% -0,99% -3,57%
68,55% 2,91% 2,74% 9,31%
*Amounts in euros
The entity’s operating performance was reflected in the gross value added creation of € 6.4M and an EBITDA of € 1.7M, translating an increase of € 1M compared to the 2015 value. There was also an improvement in Net Debt / EBITDA ratio compared to 2015, because of the yearly EBITDA growth. bysteel’s positive evolution is also confirmed by the cash flows generated in 2016, which rose sharply to around € 934.6m, more than double than in 2015. The good performance of bysteel is demonstrated by the effectiveness shown in rotation ratios of the fixed and current assets, with values above 200% and 100%, respectively. This operational efficiency is also evidenced by the period inventory turnover ratio, above 200%. Regarding the general liquidity ratio, which analyses of entity’s’ capacity to meet its short-term liabilities stood at 144.2% in 2016, confirming bysteel growing trend to meet its short-term liabilities.
bysteel, s.a.
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Also within the financial strength scope, it stands out the total solvability ratio, which shows the entity's ability to, with their own means, pay off creditors. Indeed, in 2016 this ratio reached 41.7%, increasing 3.2 percentage points, which, once more, deserves a positive highlight, when analyzed in the current market conditions context. As show in the table above in respect of profitability indicators, deserves featured the bysteel capacity to increase gross sales margin up 68.6%, in 2016, and the notable recovery in sales profitability (+ 2.9%) and total assets (+ 2.7%), which again confirm the gains in operating efficiency, supporting and leveraging the international investment reinforcement made by the entity during 2016. It is worth mentoring bysteel’s return on equity, which in 2016 reached 9.3%, representing an increase of 12.9 pp compared to the previous year. In short, in the economic period ended at December 31, 2016, bysteel achieved an excellent operating result and its financial indicators were extremely positive, which reinforce the entity’s financial strength and its capacity to meet future growth challenges.
3.
Material events occurring after the end of the period
After the period end, and to date, there were no events that may have a significant impact on the financial statements at December 31, 2016.
4.
Future perspectives
The essence of bysteel is guided by excellence and it is believed that the future, as well as the designed, built and assembled structures, need innovation, responsibility and efficiency, fundamental characteristics, so that bysteel brand continues to be chosen as a partnership by the largest European manufacturers. Therefore, bysteel strategy for 2017 is to maintain the focus on customer portfolio internationalization and diversification, through the strengthening of existing commercial and strategic partners’ loyalty, without dissociating the aim of extending its presence to other international markets. Thereunto, an optimization of the internal processes has been developed, and no less relevant, the entity's certification in accordance with the international requirements – the factory production control certification for the EXC4 execution class –, to reflect the quality that bysteel puts in every project delivered to the client. In addition, today’s increase in production bysteel, s.a.
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Annual Report 2016
capacity allows an efficient response to execute projects of thousands of tons in the most ambitious deadlines, many of them directly came from bysteel design department, placing the entity at the cutting edge of metal construction technology in the most advanced markets. This work allows bysteel to be a hallmark in France, through its branch office, in a market where opportunities in the construction sector are excellent. Associated with this market growth prospect of 3.4% in 2017, the necessary conditions for the entity’s affirmation this geography appear to be created. The United Kingdom appears as a market that has been showing a consistent weight since the moment that bysteel entered the market. With the British economy showing signs of higher growth than expected in 2016 after the Brexit announcement, the same may not happen in 2017 so the stance should be a more conservative one, without affecting this market weight in the entity’s international activity. It is a market where infrastructures modernization and upgrading is most needed, making it one of the most dynamic European countries in the construction sector and where bysteel intends to become a key player. bysteel believes that the future is built through solidity and therefore maintains strongly committed to innovation, together with competence, modernity and rigor wherewith executes its project. For 2017 it aims to strengthen its recognition as a leading player in the markets in which operates, creating tailored made customer’s solutions with high added value. At the Human Resources level, bysteel intends to maintain a growth in line with 2016, with a clear focus on training and retaining motivated talent to create long-term sustainable value.
5.
Own shares
During the year 2016, the entity did not acquire or sell its own shares. On December 31, 2016, the entity did not hold treasury shares.
6.
Authorization for transactions between the entity and its directors
During the year 2016 the entity did not grant loans or credits to directors, did not make payments on their behalf, did not provide guarantees for liabilities incurred by them, nor any advances have been provided to them, nor entered into any contracts with them, directly or intermediary.
bysteel, s.a.
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7.
Branches of the entity
On December 31, 2016, the entity had the following branches:
“Bysteel, S.A. - França” – Trappes, Françe;
“Bysteel, S.A. - Bélgica” – Brussels, Belgium.
8.
Proposed results application
The Board of Directors proposes to the Shareholders that the net positive result of the year 2016 of 701,358.45 Euros (seven hundred and one thousand, three hundred fifty-eight euros and forty-five cents) to be applied under the item of Retained Earnings.
9.
Financial risk management objectives and policies
Within the economic and financial context in which the entity operates is essential to have a risk management strategy fully integrated into the overall strategy of the organization that increase its degree of resilience and gradually become immune to unforeseen and adverse effects. Therefore, risk analysis is ensured by the group’s different business units in which the entity operates. A prior identification study of the risks classified as the most critical is being developed, and risk management strategies are defined for control procedures implementation that reduce them to an acceptable level. Through the control procedures implementation the entity seeks to ensure the efficiency and effectiveness of its operations, as well as assets safeguarding, financial reporting reliability and compliance with laws and regulations. The ultimate goal will be the trade-off maximization between risks and business margins, in order to achieve, in a sustained way, the group’s strategic objectives in which it operates.
10. Information required by legislation The Board of Directors advises that the entity does not have debts in arrears to the State, in compliance with the terms of Law-decree number 534/80 of November 7. In compliance with the provisions of the Article 210th of the Contributory Code, published by the Law number 110/2016 of September 16, the Board advises that the situation of the entity before the Social Security is regularized within the legally stipulated deadlines.
bysteel, s.a.
Page 25 of 71
Annual Report 2016
Pursuant to the requirements of the Article 66º of the Code of Commercial Companies, the entity informs that the Statutory Auditor’s charged fees (Chartered Accountant) amounted to 5,904.00 Euros (VAT included), which solely cover the statutory audit services.
11. Authorized disclosure date for issue the financial statements The financial statements for the period ended December 31, 2016 were approved by the Management Board for issue on March 31, 2017.
12. Final note The Management Board expresses a word of recognition to all employees and of gratitude to everyone who in one way or another cooperated with the entity. Special gratitude is hereby expressed to the Sole Fiscal Auditor, trade creditors and banking entities that very much honor us with valuable relationship.
Braga, March 31, 2017
The Board of Directors,
José Gonçalves Teixeira; Executive Chairman
Joaquim Gonçalves Teixeira; Executive Vice-Chairman
Avelino Gonçalves Teixeira; Non-Executive Vice-Chairman
João Martins Negrais de Matos; Executive Member of the Board of Directors
Rodrigo José Crespo de Araújo; Executive Member of the Board of Directors
Eurico António Lopes Soares; Non-Executive Member of the Board of Directors bysteel, s.a.
Page 26 of 71
Annual Report 2016
B)
Annex to the Board of Directors Report
In compliance with the terms and for the effects of the number 5 of article 447th and number 4 of article 448th of the Trading Companies Code (“CSC – Código das Sociedades Comerciais”), approved by Law-decree number 262/86 of September 2, hereby is presented the list of shares regulated by such diplomas:
1. In light of the number 5 of the Article 447th of the Trading Companies Code, as of December 31, 2016 the members of the Board of Directors did not own entity’s shares.
2. The following shareholders, to whom the number 4 of the Article 448th of the Trading Companies Code is applicable, held as of December 31, 2016 at least one tenth of the entity’s share capital: i.
dst engenharia & construção, sgps, s.a. with 100% of the entity’s share capital.
Braga, March 31, 2017 The Board of Directors,
José Gonçalves Teixeira; Executive Chairman
Joaquim Gonçalves Teixeira; Executive Vice-Chairman
Avelino Gonçalves Teixeira; Non-Executive Vice-Chairman
João Martins Negrais de Matos; Executive Member of the Board of Directors
Rodrigo José Crespo de Araújo; Executive Member of the Board of Directors
Eurico António Lopes Soares; Non-Executive Member of the Board of Directors bysteel, s.a.
Page 27 of 71
Annual Report 2016
C)
Corporate Bodies
BOARD OF DIRECTORS Executive Chairman: José Gonçalves Teixeira Executive Vice-Chairman: Joaquim Gonçalves Teixeira Non-Executive Vice-Chairman: Avelino Gonçalves Teixeira Executive Member of the Board of Directors: João Martins Negrais de Matos Executive Member of the Board of Directors: Rodrigo José Crespo de Araújo
GENERAL SHAREHOLDERS’ ASSEMBLY President: Susana Daniela Simões da Silva Braga Secretary: Catarina Mendes Amaro
SUPERVISORY BOARD (SOLE FISCAL AUDITOR) Efective: Joaquim Guimarães, Manuela Malheiro e Mário Guimarães, SROC, represented by Dr. Mário da Cunha Guimarães (ROC n.º 1159). Surrogate: Dr.ª Emilia da Conceição da Rocha Gomes (ROC n.º 1663)
bysteel, s.a.
Page 28 of 71
Annual Report 2016
D)
Individual Financial Information
Individual Balance sheet For the year ended December 31, 2016 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails. Amounts expressed in euros NOTES
DATES 31/12/2016
31/12/2015
ASSETS Non-current assets Tangible fixed assets Intangible fixed assets Other financial investments Deferred tax assets
6 and 7 8 9 21
1.799.804,91 41.709,03 24.861,71 4.299,72 1.870.675,37
2.244.855,09 31.858,14 24.219,86 12.292,28 2.313.225,37
10 11 13 12 14 4
2.685.466,79 17.499.487,59 918.315,98 2.192.603,53 134.913,88 306.161,97 23.736.949,74 25.607.625,11
1.846.111,60 16.465.592,57 856.564,99 1.819.478,70 121.773,67 1.414.599,30 22.524.120,83 24.837.346,20
15 16
1.000.000,00 1.700.000,00 200.000,00 148,36 3.757.304,70 173.945,39 701.358,45 7.532.756,90
1.000.000,00 1.700.000,00 200.000,00 148,36 4.005.956,86 246.380,36 (246.361,11) 6.906.124,47
Liabilities Non-current liabilities Provisions Loans Deferred tax liabilities Other payables
17 7 and 18 21 20
200.282,86 1.378.172,14 33.907,25 1.612.362,25
187.482,46 1.536.838,37 71.529,85 1.795.850,68
Current liabilities Trade creditors Prepayments Taxation payable Loans due within 1 year Other payables Deferrals
19 11 13 7 and 18 20 14
7.133.699,68 65.908,93 242.542,87 3.917.334,86 4.978.640,79 124.378,83 16.462.505,96 18.074.868,21 25.607.625,11
5.575.392,13 10.000,00 266.396,48 2.412.786,74 7.247.033,39 623.762,31 16.135.371,05 17.931.221,73 24.837.346,20
Current assets Stocks Trade debtors Taxation receivable Other receivables Deferrals Cash in hand, at bank and bank term deposits Total assets EQUITY AND LIABILITIES Equity Ordinary share capital Other equity instruments Legal Reserve Other reserves Retained profit Adjustments / other changes in equity Net profit/(loss) for the period Total equity
Total liabilities Total equity and liabilities
Braga, March 31, 2017 the Board of Directors, bysteel, s.a.
the Certified Accountant number 32974, Page 29 of 71
Annual Report 2016
Individual Income Statement For the years ended December 31, 2016 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails. Amounts expressed in euros PERIODS NOTES
Turnover Changes in production stocks and work in progress Cost of sales Other external charges Staff costs Trade debtors impairment (losses/written off) Provisions (incresase/decrease) Other operating income Other operating charges Net operating profit/(loss) before depreciation and amortization, interests and taxes Depreciation, amortization and other amounts written off tangible and intangible fixed assets Net operating profit/(loss) before interets and taxes Income from interests Interest payable and similar charges Net Profit/(loss) before taxes Corporation tax Net Profit/(loss) for the period
Earnings per share
22 10 10 23 24 11 17 25 26 6e 8 27 28
2016
2015
24.090.937,36 512.670,69 (7.738.875,64) (12.204.329,62) (5.088.961,38) (125.934,22) (12.800,40) 2.385.777,91 (302.237,87) 1.516.246,83 (748.358,93) 767.887,90 444,93 (160.683,94) 607.648,89 93.709,56 701.358,45
26.543.043,62 119.413,40 (12.238.345,73) (11.866.917,71) (4.454.848,39) (54.632,36) (59.161,53) 2.868.594,08 (359.676,64) 497.468,74 (786.424,04) (288.955,30) 20.327,82 (161.305,31) (429.932,79) 183.571,68 (246.361,11)
0,70
(0,25)
Braga, March 31, 2017 the Board of Directors,
bysteel, s.a.
the Certified Accountant number 32974,
Page 30 of 71
Annual Report 2016
Individual Statement of Equity Changes in 2016 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails. Amounts expressed in euros Notes
On January 1, 2016 Changes during the year Application of 2015 result Changes in other Equity variations: Investment subsidies Subsidies adjustments to investment Other variations recognized in equity
Other equity instruments
Share capital
Legal Reserve Other Reserves
Retained Earnings
Adjustments / other changes in equity
Net Profit / Loss of the period
Total
1.000.000,00
1.700.000,00
200.000,00
148,36
4.005.956,86
246.380,36
(246.361,11)
6.906.124,47
-
-
-
-
(246.361,11)
-
246.361,11
-
-
-
-
-
(2.291,05) (248.652,16)
(93.464,46) 21.029,49 (72.434,97)
246.361,11 701.358,45 701.358,45
(93.464,46) 21.029,49 (2.291,05) (74.726,02) 701.358,45 701.358,45
1.000.000,00
1.700.000,00
200.000,00
148,36
3.757.304,70
173.945,39
701.358,45
7.532.756,90
Net Profit / Loss for the period Comprehensive income for the year Operations with Shareholders On December 31, 2016
Braga, March 31, 2017 the Board of Directors,
bysteel, s.a.
the Certified Accountant number 32974,
Page 31 of 71
Annual Report 2016
Individual Statement of Equity Changes in 2015 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails. Amounts expressed in euros Notes
On January 1, 2015 Changes during the year Application of 2014 result Changes in other Equity variations: Investment subsidies Subsidies adjustments Adjustments for deferred taxes
Other equity instruments
Share capital
Legal Reserve Other Reserves
Retained Earnings
Adjustments / other changes in equity
Net Profit / Loss of the period
Total
1.000.000,00
1.700.000,00
200.000,00
148,36
3.891.303,04
(0,23)
297.648,36
7.089.099,53
-
-
-
-
297.648,36
-
(297.648,36)
-
-
-
-
-
(179.009,16) (3.985,38) 114.653,82
317.910,44 (71.529,85) 246.380,59
(297.648,36) (246.361,11) (246.361,11)
138.901,28 (71.529,85) (3.985,38) 63.386,05 (246.361,11) (246.361,11)
1.000.000,00
1.700.000,00
200.000,00
148,36
4.005.956,86
246.380,36
(246.361,11)
6.906.124,47
Net Profit / Loss for the period Comprehensive income for the year Operations with Shareholders On December 31, 2015
Braga, March 31, 2017 the Board of Directors,
bysteel, s.a.
the Certified Accountant number 32974,
Page 32 of 71
Annual Report 2016
Individual Cash Flows Statement For the years ended December 31, 2016 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails. Description
Notes
Amounts expressed in euros PERIODS 2016
2015
Operating activities - direct method Received from trade debtors Payments to trade creditors Payments to and on behalf of employees Cash flow from operations Corporate Tax payments/receivables Operating cash flow (1)
23.861.945,78
25.644.646,34
(18.903.873,33)
(25.973.175,89)
(4.981.913,83)
(4.396.053,52)
(23.841,38)
(4.724.583,07)
93.091,50
(123.036,25)
69.250,12
(4.847.619,32)
(334.669,23)
(228.132,87)
-
(6.600,00)
Investment activities Payments for: Tangible fixed assets Intangible assets Financial investments
(641,85)
(3.309,75)
(335.311,08)
(238.042,62)
17.892,96
-
Revenues from: Tangible fixed assets Loans Interests Investment cash flow (2)
420.000,00
-
74.869,45
42.336,46
512.762,41
42.336,46
177.451,33
(195.706,16)
2.487.503,46
6.560.774,95
2.487.503,46
6.560.774,95
Financing activities Revenues from: Loans obtained
Payments for: Loans granted Interests
Financing cash flow (3)
(Decrease)/ Increase in cash in the year (1) + (2) + (3)
(3.668.719,43)
-
(146.422,81)
(161.305,31)
(3.815.142,24)
(161.305,31)
(1.327.638,78)
6.399.469,64
(1.080.937,33)
1.356.144,16
cash and cash equivalents at the begining of the period
4
1.414.599,30
58.455,14
cash and cash equivalents at the end of the period
4
333.661,97
1.414.599,30
Braga, March 31, 2017 the Board of Directors,
bysteel, s.a.
the Certified Accountant number 32974,
Page 33 of 71
Annual Report 2016
Annex at December 31, 2016 Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.
1.
Entity Identification
Company designation: bysteel, s.a. Headquarters: Rua de Pitancinhos – Palmeira - Braga Incorporation date: January 1, 2008 Tax identification number: 508 384 788 C.A.E.: - Other specialized activities, diverse construction, NE Activity: Construction and Engineering Ultimate parent company: dst-sgps, s.a. Ultimate parent company headquarters: Rua de Pitancinhos – Palmeira - Braga
These financial statements are the entity's individual financial statements. All the amounts presented in these notes are expressed in Euros, unless otherwise stated.
2.
Accounting referential for the financial statements preparation
2.1.
Accounting Normalization System (“SNC – Sistema de Normalização Contabilística”)
The financial statements herewith were prepared according with all standards of SNC, approved by the law-decree nº158/2009, of 13th July, republished by the law-decree nº 98/2015, of 2nd of June which includes the Accounting and Financial Reporting Standards (NCRF) adapted by the Accounting Normalization Committee (CNC) based on the International Financial Reporting Standards (IFRS) settled by the Accounting Standards Board (IASB) and adopted by the European Union (EU). According to n.2 of the article 9 of the law-decree 158/20019, edited by the law-decree nº 98/2015 of 2nd of July which widen the concept of entities and for the effect of the application of SNC the entity is considered a medium size company and is still applies the NCRF.
bysteel, s.a.
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Annual Report 2016
In order to ensure the proper and true expression of the financial position and the entity’s performance, were used the standards that integrate the SNC, referred to above, in all aspects pertaining to the recognition, measurement and disclosure. However, where the SNC do not respond to particular aspects of transactions or situations are complementarily applied in the following order, the International Accounting Standards, as adopted pursuant to Regulation (EC) number 1606/2002 of the European Parliament and Council of July 19, the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the IASB, and respective SIC-IFRIC interpretations. Complying with the regulation that become effective on the 1st o January of 2016, we relive that the most significant impact on the financial statements of the entity that occurred in “Deferred tax liabilities” (Liabilities) and in “Other payables” (Liabilities), resulting in a raise in the adjustments/other changes in equity and a decrease in Other current liabilities in the amount of 71,529.85 euros, by virtue of the recognition, with prospective effects, of “Subsidies adjustments”, provided by the framework note for account “593 – allowance”.
3.
Main accounting policies
The main accounting policies used for the preparation of the financial statements are stated below. 3.1. Presentation basis In preparing the financial statements taken as based on the following assumption:
3.1.1. Continuity assumption Under the continuity assumption, the entity has evaluated the information available and its future expectations, taking into account the entity's ability to continue with your business. Of the evaluation resulted that the business is able to proceed assuming its continuity.
3.1.2. Accruals assumption (or economic periodization) The entity records its income and expenses in accordance with the rules of the increase, by which income and expenses are recognized as they are generated, regardless of when they are received or paid. The differences between the amounts received and paid and the corresponding income and expenses are recognized under "Deferrals" or "Other payables or other receivables." bysteel, s.a.
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3.1.3. Consistency of presentation The items presentation and classification in the financial statements are consistent from one period to another.
3.1.4. Materiality and aggregation The materiality depends on the size and nature of the error or omission, sober in the circumstances that surround it. It is considered that the omissions or incorrect statements are materially relevant items if they can, individually or collectively, influence the economic decisions taken by users of financial statements. An item that is not materially relevant to justify its separate presentation on the face of the financial statements can however be relevant material to be presented separately in the notes to this annex.
3.1.5. Compensation The assets and liabilities, income and costs are reported separately in the respective items of the balance sheet and the income statement, so that no assets were compensated for any liability or any expense for any income, both vice-versa. Gains and losses arising from a group of similar transactions are reported on a net basis, ie, gains and losses from exchange rate differences and gains or losses arising on financial instruments held for trading. These gains and losses are reported separately if they are materially relevant
3.1.6. Comparative Information The accounting policies and measurement bases adopted at December 31, 2016 are comparable with those used in preparing the financial statements for December 31, 2015, with the exception of Deferred tax liabilities and Other payables, in so far as reflect the adjustments described in Note 2. The comparability of the information between periods is continuously improvement object in order to be increasingly an instrument of help to users allowing them to take economic decisions and assessing the trends in financial information for forecasting purposes.
bysteel, s.a.
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3.2. Recognition and measurement policies used in the preparation of financial statements
3.2.1.
Transactions in foreign currency
The entity’s financial statements are presented in euros; the euro is the functional and presentation currency. The transactions in foreign currency (currency other than the functional currency of the entity) are recognized at exchange rates of the dates of the transactions. At each reporting date, the carrying amounts of monetary items denominated in foreign currency are updated at the exchange rates that date. The carrying amounts of non-monetary items are recognized at fair value denominated in a foreign currency are updated to the exchange rates of the dates on which the respective fair values were determined. The carrying amounts of non-monetary items are recognized at historical cost, denominated in a foreign currency are not upgraded. Positive or negative exchange differences driven out from differences between the exchange rates in force at the transaction dates and at the dates of collection, payment or of balance sheet are recognized as income and/or expenses in the period’s income statement as foreign exchange gains and/or losses.
3.2.2.
Tangible fixed assets
Tangible fixed assets are recognized at acquisition cost, net of related depreciation and any impairment losses. The acquisition cost includes all expenditure directly attributable to the acquisition of such assets and to their availability in local and operational conditions required. Subsequent charges are included in the acquisition cost of the asset or recognized as separate assets, as appropriate, when it is probable that future economic benefits will flow to the entity through its use and its cost can be reliably measured. Tangible assets in progress, fixed assets still under construction or completion, are accounted for at acquisition cost deducted of eventual impairment losses. The depreciation of these assets starts at the moment that they are available for use. Depreciation are calculated from the straight-line method, applied annually under duodecimal attribution since the date the assets are ready for use and in the required conditions in terms of quality and technical, to operate according to intended by the entity, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. The estimated useful lives is determined taking into account the expected use of the asset by the entity, the natural wear expected, the subjection to technical obsolescence and salvage value attributable. bysteel, s.a.
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Provided that the entity does not have a reliable estimate of the residual value of its assets it was considered null value for depreciation of tangible fixed assets purposes. Whenever there is evidence that a significant change occurred in the useful life or in the residual amount of an asset, its depreciation is reviewed on a prospective basis in order to reflect such new expectations. The average annual depreciation rates and the useful lives were considered as follows: Useful live
Annual Rate (%)
3 a 10
10 a 33.33
Transport equipment
2a4
25 a 50
Office equipment
3a8
12,5 a 33.33
8
12.50
Basic equipment
Other tangible fixed assets
The depreciation method and useful lives of the various assets are reviewed annually. The effect of any changes to these estimates will be recognized prospectively in the income statement. Repairs and maintenance expenses that do not increase the useful life of the assets and do not results in significant improvements in the elements of tangible fixed assets are recognized as an expense in the period in which they are incurred. The major repairs relating to the replacement of equipment are recorded in tangible fixed assets and depreciated at rates corresponding to the residual life of the respective assets. The gains or losses resulting from the write-off or sale of tangible fixed assets are determined by the difference between the amount received from the sale and the assets' carrying amount and are recognized in the income statement as "Other operating income" or "Other operating charges", respectively.
3.2.3.
Intangible assets
Intangible assets are accounted for at acquisition cost deducted from amortizations and any accumulated impairment losses. Intangible assets only are recognized if it is probable that they will produce future economic benefits to the entity and if they are controllable and can be reliably measured.
bysteel, s.a.
Page 38 of 71
Annual Report 2016
Most intangible assets consist of software and are amortized in accordance with the straight-line method with duodecimal attribution since the date the assets are ready for use, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. No residual value is considered. The average annual depreciation rates and the useful lives were considered as follows:
Software Industrial property
Useful live
Annual Rate (%)
3
33,33
3 a 10
10 a 33.33
The gains or losses resulting from the write-off or sale of intangible fixed assets are determined by the difference between the sale price and the assets' carrying amount and are recognized in the income statement as "Other operating income" or "Other operating charges", respectively.
a)
Other financial investments
The entity uses the cost model in relation to investments in other entities in which the equity or proportional consolidation methods are not mandatory and in which it is unable to reliably determine their fair value, namely investments in companies with securities out of a regulated market. According to the cost model investments are initially recognized at acquisition cost, which includes transaction costs, and subsequently its value is decreased by eventual impairment losses. The entity uses the fair value model in financial investments in companies listed on a regulated market, whose fair value can be obtained and reliably determined.
3.2.4. Inventories Goods, raw materials, subsidiary and consumable materials are valued at the lower of their average acquisition cost and net realizable value (estimated sales price net of costs to be incurred for their disposal), using the FIFO as cost formula. The finished and semi-finished products, by-products and products and work in progress are valued at production cost or net realizable value (if this is lower). The production costs include the cost of raw materials, direct labor and manufacturing overheads.
bysteel, s.a.
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If the net realizable value is lower, in particular due to the decrease in the market price, deterioration or obsolescence, rising of finishing or necessary costs to perform the sale, or of the recoverable value by using the conversion into finished products whose market price has been reduced, it is justified the recognition of impairments in the periods that the adjustment needs are found, using replacement cost as a reference. The reversal of impairment losses recognized in prior periods is recorded when there is evidence that impairment losses are no longer justified or decreased, being expressed in the income statement as "Impairment of inventory net of reversals". However, the reversal is only done up to the amount of the accumulated impairment losses. The expenses related to inventory sold are recorded in the same reporting period in which revenue is recognized.
3.2.5.
Leases
The classification as operating or financial leases depends on the respective contract’s substance and not on its form. Lease contracts are classified as finance leases, if through them are substantially transferred all the risks and rewards of ownership of the asset leased or otherwise as operating leases. Financial leases Tangible fixed assets acquired through financial lease contracts and their correspondent liabilities are recognized in accordance with the provisions of NCRF 9 - Leases. According to this method the cost of the asset is recorded as tangible fixed asset, the correspondent responsibility is accounted for as a liability and the financial charges included in the rent and the depreciations of the leased assets are recognized as expenses in the income statement in the period to which they relate. Operating leases In leases considered operational, the rents payable are recognized as expense in the income statement over the period of the lease and in accordance with the obligations inherent to these.
3.2.6.
Contingent assets and liabilities
Contingent assets are possible assets arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity’s control. If it is probable the existence of future economic benefits, the entity does not recognize this contingent asset in its financial statements but promotes its disclosure.
bysteel, s.a.
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Contingent liabilities are defined as: (i) possible obligations arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity’s control; or (ii) current obligations arising from past events that are not recognized because it is unlikely that resources flows affecting economic benefits are required to offset the obligation or because the amount of the obligation cannot be measured with enough reliability. Contingent liabilities are not recognized in the entity's financial statements but are disclosed unless the possibility of a funds outflow affecting future economic benefits is remote, in which case they are not even disclosed.
3.2.7.
Provisions
Provisions are recognized in accordance with the effectively required amounts to cover estimated losses, are revised at each balance sheet date and are adjusted to reflect the best estimate at that date. Provisions are recognized if and only if the entity has a present liability (legal or constructive) resulting from a past event and if it is probable that for the resolution of such obligation a resources outflow occurs and that the amount of the obligation can be reasonably estimated. Provisions for future operating losses are not recognized.
3.2.8.
Employee benefits
Short-term benefits The employees’ short-term benefits include wages, salaries, Social Security contributions, food allowances, holidays and Christmas subsidies and any other retribution eventually decided by the Board of Directors. Obligations resulting from short-term benefits are accounted for as expenses in the period in which the employee has provided services on an undiscounted basis against a liability that is extinguished with the payment. According to applicable labor legislation, the right to vacation and holiday allowance for the period, for this match the calendar year expires on 31 December of each year, being paid only during the following period, the corresponding expenses are recognized as short-term benefits and treated in accordance with the mentioned above. The benefits resulting from the employment’s cessation, either by unilateral decision of the entity, or by mutual agreement, are recognized as an expense in the period in which they occurred.
bysteel, s.a.
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Long-term benefits The long-term benefits include a health insurance that covers all employees.
3.2.9.
Financial assets and liabilities
The financial assets and liabilities are accounted for in accordance with the following criterions:
Trade debtors and other receivables Trade debtors and other receivables balances are accounted for at their nominal value and disclosed in the balance sheet, deducted from any accumulated impairment losses, recognized under “Impairment on trade receivables net of reversals�, so as to reflect their net realizable value. These items when current do not include interest because they would be immaterial for the impact of discounting. At the end of each reporting period trade debtors balances are analyzed in order to assess whether there is any objective evidence that they are not recoverable. Impairment losses are recognized after events that indicate, objectively and in a quantifiable manner, that all or part of the balance will not be received. For this purpose, the entity takes into consideration market information that demonstrates that the trade debtor is in breach of its responsibilities, as well as historical information of overdue and not received balances. Objective evidence of impairment for a portfolio of receivables could include past experience of collecting payments, an increase in the number of delayed payments in, as well as changes in national or local economic conditions that correlate with default on receivables. The impairment loss is recognized as an expense in the income statement. Whenever defined / agreed with a client the settlement of respective debt into several installments, the dst group opted to value this same debt at amortized cost, satisfying all the conditions set out in IAS 27, namely that: - have a defined maturity; - returns to the holder are fixed amount, variable interest rate during the instrument life, with a typical index for financial market (Euribor) and plus a spread (5%); - does not contain any contractual clause that may result to the holder in loss of par value and accrued interest (excluding the typical cases of credit risk). Thus the difference between the nominal value and the initial fair value is recognized in the income statement over the period specified, using the effective interest method. bysteel, s.a.
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Advances to trade creditors These balances are stated at their cost less impairment losses, whenever applicable. Trade creditors and other payables Debts to suppliers or other third parties are accounted for at nominal value as they do not bear interest and the effect of discounting is immaterial. Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration.
Advances from customers The Advances from customers are stated at nominal value. Discounted bills The entity writes-off financial assets from its financial statements only when it substantially transfers all the risks and benefits inherent to the ownership of such assets to a third party. If the entity substantially retains the risks and benefits inherent to the ownership of those assets, it continues recognizing them in its financial statements as liabilities related to obtained loans correspondent to the monetary counter-entry for the transferred assets.
State and others public entities The balance assets and liabilities under this heading are established on the basis of existing legislation. With regard to assets was not recognized any impairment by if it considers that this is not applicable given the specific nature of the relationship. Loans and other non-current payables Loans and other non-current payables are accounted for at cost as liabilities, net of transaction costs that are directly attributable to the issuance of these liabilities, being expressed in the balance in current or non-current liabilities depending on their maturity occurs within or more than one year, respectively. Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration.
bysteel, s.a.
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Annual Report 2016
The interest and other costs incurred in financings are calculated according to the effective interest rate and recognized in the income statement for the period in accordance with the increase presupposition. The “non-asset-related financial charges” are recognised as expenses of the period being registered in the income statement under “Interest payable and similar charges”. Cash and cash equivalents The cash and bank deposits balance includes cash, bank deposits and other short-term investments that can be immediately mobilized without significant risk of value fluctuations.
Financial liabilities and equity instruments Financial liabilities and equity instruments are classified according to the substance of the contractual transaction, regardless of their legal form. A financial instrument is classified as a financial liability when there is a contractual obligation to their settlement to be effected by delivering cash or another financial asset. Financial liabilities are initially recorded at cost, net of transaction costs incurred. An equity instrument is classified as such when there is not a contractual obligation to their settlement to be effected by delivering cash or another financial asset, evidences a residual interest in the assets of an entity after deducting all of its liabilities. Costs directly attributable to issue of equity instruments are recognized in equity as a deduction of issue. Amounts paid or received for purchases and sales of equity instruments are recognized in equity, net of transaction costs.
3.2.10.
Revenue
Revenue comprehends income associated with sales and services rendered. Revenue is recognized on sales when the buyer takes the risks and benefits inherent to the ownership of the goods sold and as what concerns to services revenue is recognized in the income statement when such services are rendered, taking into consideration the proportion of services rendered in the period and the total services agreed. Revenue is not recognized when it is related to situations of uncertainty of acceptance or payment of those services.
bysteel, s.a.
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Annual Report 2016
Whereas invoiced services are higher than the services rendered, the difference is recorded as income to be recognized and is accounted for in the income statement at the time such services are rendered and the correspondent expenses are incurred.
3.2.11.
Construction contracts
The entity recognizes the construction works’ results contract per contract in accordance with the completion percentage method, which is understood to be as the relationship between the expenses incurred on each work at a determined date and the sum of those expenses with the expenses estimated to be incurred for its completion. The differences between the amounts resulting from the application of the completion percentage method with the estimated income and invoiced amounts are accounted for as non-invoiced production or advanced invoicing, which are included within as "Other receivables - Receivables from accrued income " (Asset) or "Deferred - Income to recognize" (Liability). Changes in work from the amount of revenue settled in the correspondent contract are recognized in the period’s results when it is probable that the customer accepts the revenue amount arising from the variation and that this can be reliably measured. Claims for costs reimbursement not included in the contract price are included in the contract’s revenue when negotiations are at such an advanced stage that it is probable that the customer accepts the complaint and that it is possible to measure it reliably. When it is probable that the construction contract’s total expenses exceed the income defined therein, the expected loss is immediately recognized in the period’s income statement.
3.2.12.
Subsidies and Government assistance
Government subsidies are recognized at their fair value when there is sure to be received and that the entity will comply with the conditions of the grant. Operational subsidies are intended to cover expenses incurred and recorded, particularly with the development of vocational training actions, and they are recognized as income as the expenses are incurred, regardless of the time of receipt of the grant. The outright grants, to finance tangible and intangible assets are recognized in equity and recognized in the income statement in proportion to the respective depreciation and amortization of subsidized assets.
bysteel, s.a.
Page 45 of 71
Annual Report 2016
The non-refundable subsidies for financing research and development projects are recognized in the balance sheet under "Adjustments / Other changes in equity", net of the associated tax amount (as set out in the note to the account "593 subsidies "), by the amount of the incentive corresponding to investment subsidies. In liabilities, it is recognized under "Other payables" (account 28 - "Income to be recognized"), by the amount corresponding to operating subsidies (income related subsidies).
3.2.13.
Impairment of assets
At each reporting date, and whenever are disclosed an event or changes in circumstances indicating that the asset’s recorded amount may not be recoverable an impairment of assets evaluation is assessed. Whenever the amount by which the asset is recorded is higher than its recoverable amount, is recognized as an impairment loss recorded in the income statement as "'Impairment of investments depreciables/amortizables net of reversals� or as "Impairment on trade receivables net of reversals", if it respects the non-depreciable assets. The recoverable amount is the higher of the net selling price and value in use. The net selling price is the amount obtainable from the sale of the asset in a transaction between independent entities, less the costs directly attributable to the sale. The value in use is the present value of estimated future cash flows that are expected to arise from the continued use of the asset and from its sale at the end of its useful life. The recoverable amount is estimated for each asset individually or, if not possible, to the unit generating cash flows to which the asset belongs. After the recognition of an impairment loss, the expense related to the amortization/depreciation of the asset is adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if any) on a systematic basis over the useful life remaining. Whenever events or changes in circumstances indicate that the carrying amount of an asset is recorded can not be retrieved, it made a new assessment of impairment. Reversal of impairment losses recognized in previous years is registered when it is concluded that previously recognized impairment losses no longer exist or have decreased. A reversal of an impairment loss is recognized in the income statement under aforementioned. The reversal of the impairment loss is made up to the amount that would be recognized (net of amortization or depreciation) if the impairment loss had not been recorded in previous periods.
bysteel, s.a.
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3.2.14.
Income tax
The entity is included in the special group taxation regime (RETGS), reason why the period’s income tax is accounted for as an offset to “Shareholders” and not to “State and other public entities”. In RETGS taxable profit of the group is calculated by the dominant society, through the sum of the taxable income and tax losses in periodic statements of each individual companies within the group, correcting the profits distributed among the members of the group who is included in taxable income individual The expense relating to period’s income tax corresponds to the sum of current and deferred taxes. Current income tax is based on the entity’s taxable profits in accordance with the enforceable tax regulations, whilst deferred taxes result from temporary differences between accounting and tax assets and liabilities. The taxable profit is different from the accounting result, provided that it excludes expenses and revenues that are taxable or deductible in other periods. The taxable profit also excludes expenses and revenues that will never be taxed or deducted. The entity shall record deferred taxes related to temporary differences between the carrying amount of assets and liabilities and the corresponding tax base as provided in NCRF 25 - Deferred income taxes, whenever it is probable that future taxable profits will be generated against which the differences temporary and can be used based on the standard rate of corporation tax to the balance sheet date. Deferred taxes assets and liabilities are calculated and annually evaluated based under the tax rates in force or announced to be in force at the time of the expected reversal of temporary differences. The deferred tax assets are recognized only when there is a reasonable expectation of future taxable profits to be deducted from such assets, or in situations where there are taxable temporary differences to offset the deductible temporary differences in the period of its reversal. At each reporting date a review of those deferred tax assets is carried out and such are adjusted in accordance with the expectations concerning their future use. Current and deferred taxes are accounted for in the income statement except when are related to items directly recognized as equity. In these cases, the correspondent deferred taxes are also recognized as equity. In accordance with current legislation, tax returns may be subject to revisions and possible corrections by the Tax and Customs Authority for a period of four years (five years for Social Security), except where there have been tax losses, or inspections, complaints or impeachment, in which cases, depending on the circumstances, the terms are extended or suspended. Accordingly, corrections can be made for the years 2013 and subsequent years, although it is not expected that any significant corrections will have a significant effect on these financial statements. bysteel, s.a.
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The taxes are not paid, relating to the current period or the previous are recognized as a liability at the amount that is estimated to be paid based on the rates and tax laws applicable to the balance sheet date. However, if the amounts already paid in respect of such periods exceed the amounts due, are recognized as assets to the extent of the excess. Current tax is also conditioned by the adjustments, positive or negative, which are to be recognized in the period for current tax of previous periods.
3.3. Judgments and estimates (assumptions and uncertainties) The preparation of financial statements in conformity with NCRF standards requires the consideration of certain accounting estimates and assumptions that affect the reported assets and liabilities or revenues and expenses amounts. When necessary, all estimates and assumptions considered by the Board of Directors were made based under its best knowledge of events and transactions in progress at the date of the approval of the financial statements. Changes to these estimates, which occur after the date of the financial statements, will be recognized in the income statement prospectively.
3.4. Main assumptions concerning the future The financial statements were prepared on a going concern basis from the books and accounting records of the entity.
4.
Cash flow
The cash flow statement is prepared in accordance with the direct method, disclosing receipts and cash payments by operating, investing and financing activities
The cash and bank deposits present the following composition: 31.12.2016 Cash i n hand Cash at bank Total cash in hand, at bank and term deposits
4.107,57 302.054,40 306.161,97
31.12.2015 1.277,52 1.413.321,78 1.414.599,30
There are no amounts of cash and cash equivalents unavailable for use.
bysteel, s.a.
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Annual Report 2016
5.
Related parties
a)
Information concerning the parent company
The following legal entity is the owner of more than 20% of the entity’s share capital:
dst engenharia & construção, sgps, s.a.
Participation 100%
As of December 31, 2016 and 2015, the main balances between the entity, shareholders, group companies, associates and related companies are the following: Companies
Group companies bysteel , uk domingos da sil va teixei ra - angol a, s.a. domingos da sil va teixei ra - imobil iária, s.a. domingos da sil va teixei ra, s.a. dst - sgps, s.a. dst center, s.a. dte, i nstalações especiais, s.a. i nnovation point - i nvestigação e desenvol vimento, s.a. i nvesthome - construção e imobili ária, s.a. tconcrete, s.a. v partner, s.a.
Associated companies aquapor s ervi ços, s .a. steelgreen, s.a.
bysteel, s.a.
31.12.2016
31.12.2015
1.311.007,54 9.754.580,60 (42.010,84) (247.995,93) (121.336,86) (39.786,67) (3.075,00) 45,09
932.738,53 9.637.686,61 (33,65) 20.770,59 (1.566.277,99) (49.313,70) (709,80) (1.121,76) (55.608,78) 10.184,40 -
10.611.427,93
8.928.314,45
(619,65)
(619,65)
(619,65) 10.610.808,28
(619,65) 8.927.694,80
Page 49 of 71
Annual Report 2016 During 2016 period, the main transactions between the entity, shareholders, group companies, associates and related companies are the following: 2016 Companies
Group companies parque eóli co do alto da vaca, lda. domingos da silva teixeira - angola, s.a. domingos da silva teixeira, s.a. dst - sgps, s.a. dst center, s.a. dst solar, s.a. dte, instalações especiais, s.a. innovation point - investigação e desenvol vimento, s.a. tconcrete, s.a.
Associated companies steelgreen, s.a.
bysteel, s.a.
Interest payable and similar charges
Other external charges
1.430.516,12 369.919,89 2.829.286,95 16.944,70 -
(16.233,55) (6.205,21) (77,36)
(267.737,00) (225.170,90) (326.410,78) (350,00) (107.949,31) (5.918,86) -
- 116.061,04 - 1.105.481,15 23.192,24 444,93 8.625,40 -
(43.440,86) -
4.646.667,66
(22.516,12)
(933.536,85)
444,93 1.253.359,83
(43.440,86)
4.646.667,66
(2.386,14) (2.386,14) (24.902,26)
(18.242,52) (18.242,52) (951.779,37)
444,93 1.253.359,83
(43.440,86)
Turnover
Income from interests
Other operating income
Purchases and acquisitions
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During 2015 period, the main transactions between the entity, shareholders, group companies, associates and related companies are the following: 2015 Companies
Group companies bysteel , UK domingos da si lva tei xeira - angola, s.a. domingos da si lva tei xeira, s.a. dst - sgps, s.a. dst - wi nd, s .a. dst center, s .a. dte, i ns talações especiai s, s.a. innovati on point - inves tigação e desenvol vimento, s.a. investhome - construção e imobil iária, s .a.
Associated companies steel green, s.a.
bysteel, s.a.
Other operating income
Interest payable Other losses and similar and expenses charges
Purchases and acquisitions
Other external charges
Income from interests
2.149.924,44 1.876.681,32 228.615,83 655.636,30 -
(77.622,81) (2.158.871,72) (9.791,29) (211.622,43) (86.966,55) -
(20.138.864,25) (489.213,05) (58.281,61) (114.559,25) (42.344,43) (192.964,00)
3.547.620,17 2.135.474,14 15.364,16 12.676,94 553,00 -
(21.434,87) (1.981,80) (40.701,12) -
(849,99) -
4.910.857,89
(2.544.874,80)
(21.036.226,59)
3.560.297,11 2.151.391,30
(64.117,79)
(849,99)
240,70 240,70 4.911.098,59
(5.530,74) (5.530,74) (2.550.405,54)
(675,78) (675,78) (21.036.902,37)
3.560.297,11 2.151.391,30
(64.117,79)
(849,99)
Turnover
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Annual Report 2016
b)
Remuneration of Corporate Bodies
The Corporate Bodies’ remuneration in the exercise of their duties in the periods of 2016 and 2015 was as follows:
2016
2015
Board of di rectors 108.036,10 Audi tors 5.904,00 113.940,10
6.
71.989,36 5.904,00 77.893,36
Tangible fixed assets
Information relating to the carrying amounts of tangible fixed assets with reference to 2016 period may be analyzed as follows: Description 1 2 3 4 5
Initi al gross book val ue Initi al accumul ated depreci ati ons Initi al accumul ated impai rment losses Initi al net carryi ng amount (4 = 1 - 2 - 3) Movements of the period:(5 = 5.1 - 5.2 + 5.3 + 5.4)
5.1
Total additions New acquisi ti ons Total disposals Depreciations Sal es Reversals of impai rment losses Trans ferences of TFA under construction Trans ferences of/for fi nancial assets avail abl e for sale Other transferences Final net book value (6 = 4 + 5)
5.2
5.3 5.4 5.5 5.6 6
Buildings and other structures
Basic equipment
Transport equipment
Administrative equipment
Others
TFA under construction
Total
888,54 888,54 -
7.642.688,66 5.684.598,21 1.958.090,45
629.662,15 537.649,81 92.012,34
615.932,61 476.981,28 138.951,33
68.668,68 68.161,31 507,37
55.293,60 55.293,60
9.013.134,24 6.768.279,15 2.244.855,09
-
(491.601,40) 86.667,33 86.667,33 578.268,73 577.053,45 1.215,28 -
145.050,23 207.965,55 207.965,55 62.915,32 62.915,32 -
(51.356,29) 19.820,79 19.820,79 71.177,08 71.177,08 -
(169,12) 178,85 178,85 347,97 347,97 -
(46.973,60) 520,00 520,00 -
(445.050,18) 315.152,52 315.152,52 712.709,10 711.493,82 1.215,28 -
-
1.466.489,05
237.062,57
87.595,04
338,25
(47.493,60) 8.320,00
(47.493,60) 1.799.804,91
Information relating to the carrying amounts of tangible fixed assets with reference to 2015 period may be analyzed as follows: Description 1 2 3 4 5
Initial gross book val ue Initial accumul ated depreci ations Initial accumul ated impairment l os ses Initial net carryi ng amount (4 = 1 - 2 - 3) Movements of the period:(5 = 5.1 - 5.2 + 5.3 + 5.4)
5.1
Total additions New acqui si tions Total disposals Depreciati ons Reversals of impairment l oss es Transferences of TFA under constructi on Transferences of/for financial ass ets avail able for sale Other transferences Final net book val ue (6 = 4 + 5)
5.2 5.3 5.3 5.5 5.6 6
bysteel, s.a.
Buildings and other structures
Basic equipment
Transport equipment
Administrative equipment
Others
TFA under construction
Total
888,54 888,54 -
7.527.376,33 5.020.094,78 2.507.281,55
519.066,01 514.368,10 4.697,91
598.416,00 417.468,65 180.947,35
66.701,08 66.024,58 676,50
-
8.712.447,96 6.018.844,65 2.693.603,31
-
(565.877,22) 98.626,21 98.626,21 664.503,43 664.503,43 -
19.510,01 42.791,72 42.791,72 23.281,71 23.281,71 -
(42.531,02) 16.981,61 16.981,61 59.512,63 59.512,63 -
84.856,41 86.993,14 86.993,14 2.136,73 2.136,73 -
55.293,60 67.675,92 67.675,92 -
(448.748,22) 313.068,60 313.068,60 749.434,50 749.434,50 -
-
1.941.404,33
24.207,92
138.416,33
85.532,91
(12.382,32) 55.293,60
(12.382,32) 2.244.855,09
Page 52 of 71
Annual Report 2016
In the periods of 2016 and 2015, the “Costs and reversals of depreciation and amortization� had the following composition: 2016
Description
Tangibl e fixed assets Intangibl e ass ets
Depreciation and amortization costs
2015
Reversals of depreciation and amortization
Total
Depreciation and amortization costs
Reversals of depreciation and amortization
Total
(711.493,82)
-
(711.493,82)
(749.434,50)
-
(36.865,11)
-
(36.865,11)
(36.989,54)
-
(749.434,50) (36.989,54)
(748.358,93)
-
(748.358,93)
(786.424,04)
-
(786.424,04)
Tangible fixed assets are recognized in accordance with the accounting policy described in Note 3 above. The net tangible fixed assets are in their entirety affects to the only activity of the entity and there are no assets held by third parties. In the period were not recorded any impairment losses, due to be convinced of the Administration that the recoverable amount of the asset exceeds its carrying amount.
7.
Leases
The information concerning leases as of December 31, 2016 is as follows: Financial Leases Description
1 Initial gross book value 2 Accumulated amortizations / depreciations 4 Final net book value (4 = 1 - 2 - 3) 5 Total future minimum lease payments at balance sheet date: (5 = 5.1+5.2+5.3) 5.1 Up to one year 5.2 From one to five years
Tangible fixed assets 208.757,27 39.701,38 169.055,89 175.896,72 47.724,58 128.172,14
Total
208.757,27 39.701,38 169.055,89 175.896,72 47.724,58 128.172,14
The information concerning leases as of December 31, 2015 is as follows: Financial Leases Description
1 Initial gross book value 2 Accumulated amortizations / depreciations 4 Final net book value (4 = 1 - 2 - 3) 5 Total future minimum lease payments at balance sheet date: (5 = 5.1+5.2+5.3) 5.1 Up to one year 5.2 From one to five years
bysteel, s.a.
Tangible fixed assets 42.791,72 8.935,68 33.856,04 36.731,82 9.615,69 27.116,13
Total
42.791,72 8.935,68 33.856,04 36.731,82 9.615,69 27.116,13
Page 53 of 71
Annual Report 2016
8.
Intangible assets
Information related to the carrying amount of intangible assets with reference to the 2016 period may be analyzed as follows:
Description
Software
Industrial Property
With fi ni te useful economi c li fe: 4 Initial gross book value 266.729,15 19.385,00 5 Ini tial accumulated amortization 245.805,75 8.450,26 6 Ini tial accumulated i mpai rment losses 7 Initial net carryi ng amount (7 = 4 - 5 - 6) 20.923,40 10.934,74 8 Movements of the period:(8 = 8.1 - 8.2) 15.557,73 (5.706,84) 8.1 Total additions 8.2 Total disposals 31.158,27 5.706,84 Amortizations 31.158,27 5.706,84 8.3 Reversal s of impairment los ses 8.4 Transferences of Intangible assets under constructi-on Transferences of/for fi nanci al assets 8.5 avai labl e for s ale 8.6 Other trans ferences 46.716,00 Fi nal net book val ue (9 = 7 + 8) 9 36.481,13 5.227,90
Total
286.114,15 254.256,01 31.858,14 9.850,89 36.865,11 36.865,11 46.716,00 41.709,03
Information related to the carrying amount of intangible assets with reference to the 2015 period may be analyzed as follows:
Description
Wi th fi nite us eful economic life: 4 Initial gross book value 5 Initial accumul ated amortization 6 Initial accumul ated i mpairment los ses 7 Initial net carryi ng amount (7 = 4 - 5 - 6) 8 Movements of the peri od:(8 = 8.1 - 8.2) 8.1 Total additions New acquisi ti ons 8.2 Total disposals Amortizations 9 Fi nal net book value (9 = 7 + 8)
bysteel, s.a.
Software
260.129,15 214.523,04 45.606,11 (24.682,71) 6.600,00 6.600,00 31.282,71 31.282,71 20.923,40
Industrial Property
19.385,00 2.743,43 16.641,57 (5.706,83) 5.706,83 5.706,83 10.934,74
Total
279.514,15 217.266,47 62.247,68 (30.389,54) 6.600,00 6.600,00 36.989,54 36.989,54 31.858,14
Page 54 of 71
Annual Report 2016
9.
Other financial investments
Variations in “Other financial investments” in reference to the 2016 period are as follows: Other financial investments Other methods: Initi al gross book value Initi al net carrying amount Movements of the peri od: Other acqui siti ons Final net book val ue
Total 24.219,86 24.219,86 641,85 641,85 24.861,71
24.219,86 24.219,86 641,85 641,85 24.861,71
Variations in “Other financial investments” in reference to the 2015 period are as follows: Other financial investments Other methods: Ini tial gros s book value Ini tial net carryi ng amount Movements of the peri od: Other acquisi tions Fi nal net book val ue
Total 20.910,11 20.910,11 3.309,75 3.309,75 24.219,86
20.910,11 20.910,11 3.309,75 3.309,75 24.219,86
10. Inventories As of December 31, 2016 and 2015, inventories’ balance was as follows:
Description
31.12.2015
-
48,33
Raw, subs idi ary and consumable materi al s
1.306.676,07
979.943,24
Products and work i n progress
1.378.790,72
866.120,03
2.685.466,79
1.846.111,60
Goods
bysteel, s.a.
31.12.2016
Page 55 of 71
Annual Report 2016
During 2016 period, the “Changes in production stocks and work in progress” was as follows: Products and work in progress
Description 1 2 3 4
Closing stocks Stocks reclassification and regularizati on Opening stock Changes in stocks (4 = 1 + 2 - 3)
Total
1.378.790,72 1.378.790,72 866.120,03 866.120,03 512.670,69 512.670,69
During 2015 period, the “Changes in production stocks and work in progress” was as follows: Products and work in progress
Description 1 2 3 4
Closing stocks Stocks reclassification and regularization Opening stock Changes in stocks (4 = 1 + 2 - 3)
866.120,03 746.706,63 119.413,40
Total
866.120,03 746.706,63 119.413,40
The movements occurred in the “Cost of goods sold” balance in 2016 was as follows: Description 1 2 3 4 5
Opening stocks Purchas es Stocks reclassificati on and regul arization Cl osi ng stoks Cost of goods sol d (5 = 1+ 2 + 3
Goods
Raw, subsidiary and consumable materials
48,33 86,61 134,94
979.943,24 8.065.473,53 1.306.676,07 7.738.740,70
Total 979.991,57 8.065.560,14 1.306.676,07 7.738.875,64
The movements occurred in the “Cost of goods sold” balance in 2015 was as follows: Description 1 2 3 4 5
bysteel, s.a.
Opening stocks Purchas es Stocks reclassi fication and regularization Closi ng stoks Cost of goods sol d (5 = 1+ 2 + 3 - 4)
Goods 48,33 32.374,97 48,33 32.374,97
Raw, subsidiary and consumable
Total
880.113,21 880.161,54 12.305.800,79 12.338.175,76 979.943,24 979.991,57 12.205.970,76 12.238.345,73
Page 56 of 71
Annual Report 2016
11. Trade debtors As of December 31, 2016 and 2015, the balance of “Trade debtors” was as follows:
Description
31.12.2016
31.12.2015
Trade debtors - current accounts
16.839.152,04
15.824.576,59
Trade debtors - bills of exchange
-
36.847,72
Trade debtors - with guarantee
660.335,55
604.168,26
Trade debtors - doubtful accounts
187.763,73
61.829,51
17.687.251,32
16.527.422,08
(187.763,73)
(61.829,51)
17.499.487,59
16.465.592,57
Accumulated impairment losses
As of December 31, 2016 and 2015, the balance of trade debtors’ doubtful debts was as follows: 31.12.2016
Litigation claims Delayed receivables
31.12.2015
110.640,07
-
77.123,66
61.829,51
187.763,73
61.829,51
As of December 31, 2016 and 2015, the balance of prepayments was as follows:
Description
Other markets Intra-community
31.12.2016
31.12.2015
65.908,93 -
10.000,00
65.908,93
10.000,00
In the periods of 2016 and 2015, the “Impairment losses” in receivable accounts balance was as follows:
Description
Trade debtors
bysteel, s.a.
Impairment losses
(125.934,22) (125.934,22)
2016 Reversals of impairment losses
Total
-
(125.934,22) (125.934,22)
Impairment losses
(54.632,36) (54.632,36)
2015 Reversals of impairment losses
Total
-
(54.632,36) (54.632,36)
Page 57 of 71
Annual Report 2016
12. Other receivables As of December 31, 2016 and 2015, the balance of “Other receivables” was as follows:
Description
31.12.2016
31.12.2015
Debtors for income accruals Interests Works in progress
14.893,60
19.642,92
986.979,57
663.617,32
Services
632.641,04
451.606,50
Others
386.442,23
113.303,50
2.020.956,44
1.248.170,24
Prepayments
4.108,56
25.903,05
Shareholders
103.187,57
57.709,37
Other debtors
64.350,96
487.696,04
2.192.603,53
1.819.478,70
In the shareholders’ balance is accounted for an asset correspondent to the income tax amount receivable to the shareholder in accordance with the Special Group Taxation Regime in which bysteel, s.a. is included.
13. State and other entities As of December 31, 2016 and 2015, the “State and other entities’” balance was as follows:
Description
31.12.2016
31.12.2015
Assets Value added tax
478.946,41
716.175,59
Others
439.369,57
140.389,40
918.315,98
856.564,99
-
2.006,84
Liabilities Corporate tax Income tax withholding Social Security contributions Others
bysteel, s.a.
58.835,73
50.488,65
125.342,86
108.560,21
58.364,28
105.340,78
242.542,87
266.396,48
Page 58 of 71
Annual Report 2016
14. Deferrals As of December 31, 2016 and 2015, the deferrals’ balance was as follows:
Description
31.12.2016
31.12.2015
Deferred costs Future services already invoi ced
27.627,13
14.435,47
Insurance
13.398,40
14.818,78
Rents
60.253,05
60.223,13
Interes t payable
33.367,63
17.988,95
-
2.270,86
267,67
12.036,48
134.913,88
121.773,67
124.378,83
623.762,31
124.378,83
623.762,31
Bank charges Other costs
Deferred income Construction contracts
15. Ordinary share capital The entity's share capital remained unchanged in the period, consisting of 200,000 shares, registered and nominative, with a nominal value of one euro. The share capital is totally realized.
16. Other equity instruments As other equity instruments is accounted for additional paid-in capital transferred by dst engenharia & construção, sgps, s.a., worth 1,700,000 euros, do not bear interest ,which the Board of Directors considers not qualifying as a liability. The return of additional paid-in capital depends on the resolution of the shareholders and can not be performed if the equity drops below the sum of the capital and legal reserves.
bysteel, s.a.
Page 59 of 71
Annual Report 2016
17. Provisions As of December 31, 2016 and 2015, the “Provisions” balance was as follows:
Description
31.12.2016
31.12.2015
Provisions for guarantees to trade debtors Other provisions
200.282,86
187.482,46
200.282,86
187.482,46
The increase / decrease in the “Provisions” balance during the 2016 and 2015 periods, were as follows: 2016 Description Other provisi ons
Reinforcement
2015
Reversal
Final Balance
Reinforcement
Reversal
Final Balance
(18.245,74)
5.445,34 (12.800,40)
(64.918,49)
5.756,96 (59.161,53)
(18.245,74)
5.445,34 (12.800,40)
(64.918,49)
5.756,96 (59.161,53)
18. Loans obtained As of December 31, 2016 and 2015, the balance of “Loans obtained” was as follows:
Description
31.12.2016
31.12.2015
Non-current liabilities Long term loans
-
259.722,24
128.172,14
27.116,13
1.250.000,00
1.250.000,00
1.378.172,14
1.536.838,37
Short-term l oans
2.291.625,75
1.612.814,32
Revol ving credit
1.577.984,53
790.356,73
Fi nancial l eases
47.724,58
9.615,69
3.917.334,86
2.412.786,74
Fi nancial l eases Commercial paper Current liabilities
bysteel, s.a.
Page 60 of 71
Annual Report 2016
19. Trade creditors As of December 31, 2016 and 2015, the balance of “Trade creditors” was as follows:
Description
31.12.2016
31.12.2015
6.068.484,62
4.180.528,17
Trade credi tors - bil ls of exchange
436.319,69
715.303,47
Trade credi tors - invoices in conference
208.327,19
222.460,76
Trade credi tors
Trade credi tors - with guarantee
420.568,18
457.099,73
7.133.699,68
5.575.392,13
20. Other payables As of December 31, 2016 and 2015, the balance of “Other payables” was as follows:
Description
31.12.2016
31.12.2015
Non-current liabilities 33.907,25
-
33.907,25
-
242.011,89
219.618,72
36.179,23
56.473,54
Insurances
27.781,00
27.789,70
Staff costs
470.110,65
405.236,72
Subsidies adjustments Current liabilities Staff costs Investment trade creditors Creditors for costs acrruals
Interests General and administrative expenses Other costs accruals Subsidies adjustments Factori ng Confirming Others
bysteel, s.a.
463,01
29.642,74
1.147.766,52
656.049,35
183.510,59
4.029,10
1.829.631,77-
1.122.747,61-
16.593,11
-
70.078,55
724.494,08
2.535.705,38
3.011.747,65
248.440,86
2.111.951,79
4.978.640,79
7.247.033,39
Page 61 of 71
Annual Report 2016
21. Deferred tax assets and liabilities The changes in the balance of “Deferred tax assets and liabilities”, with reference to the 2016 period was as follows: 01.01.2016 Balance Tax Deferred tax assets Trade debtors impairments
54.632,36 54.632,36
Variation Balance Tax
12.292,28 12.292,28
Non-current Current
(35.522,49) (35.522,49)
31.12.2016 Balance Tax
(7.992,56) (7.992,56)
19.109,87 19.109,87
12.292,28 -
Deferred tax liabilities Investment subsidy
340.618,33 340.618,33
4.299,72 -
71.529,85 71.529,85
Non-current Current
4.299,72 4.299,72
(340.618,33) (340.618,33)
(71.529,85) (71.529,85)
-
-
71.529,85 -
-
The changes in the balance of “Deferred tax assets and liabilities”, with reference to the 2015 period was as follows: 01.01.2015 Balance Tax Deferred tax assets Trade debtors impairments Depreciated cost
127,70 127,70
Non-current Current
28,73 28,73
Variation Balance Tax
31.12.2015 Balance Tax
54.632,36 (127,70) 54.504,66
54.632,36 54.632,36
12.292,28 (28,73) 12.263,55
28,73 -
Deferred tax liabilities Investment subsi dy
-
Non-current Current
-
12.292,28 12.292,28 12.292,28 -
340.618,33 340.618,33
71.529,85 71.529,85
340.618,33 340.618,33
-
71.529,85 71.529,85 71.529,85 -
22. Sales and services rendered In the periods of 2016 and 2015, the balance of “Sales and services rendered” was as follows: 2016 Description
Goods sales
National market
Foreign market
2015 Total
25.003,38
141.986,05
166.989,43
Products sales
1.039.393,22
1.586.872,41
2.626.265,63
Services
3.687.012,97 17.610.669,33
21.297.682,30
4.751.409,57 19.339.527,79
24.090.937,36
bysteel, s.a.
National market 42.367,35
Foreign market
Total
447.245,45
489.612,80
643.451,03 10.132.216,64
10.775.667,67
9.653.503,49
5.624.259,66
15.277.763,15
10.339.321,87 16.203.721,75
26.543.043,62
Page 62 of 71
Annual Report 2016
23. Other external charges In the periods of 2016 and 2015, this balance was as follows:
Description
Subcontractors Electri city Fuel s
2016
6.166.148,48 139.417,92 120.041,07
Office stati oneries Rents and rentals
5.958,16
2.439,68 287.455,11
44.050,94
26.432,76
1.711.368,33
1.263.594,24
2.021,10
5.372,06
Repres entati on expenses
33.357,93
21.061,51
Insurance
254.533,15
173.360,86
Transport of goods
800.259,12
258.246,34
Travel and accommodation
485.401,51
500.986,27
47.714,79
144.062,76
2.359,40
125,00
224.628,36
262.299,94
1.317,50
1.156,09
Cl eani ng and hygi ene
18.789,66
19.179,67
Securi ty
64.028,87
42.807,32
1.773.739,50
2.107.341,27
Software l icenses
77.162,90
54.404,65
Tol ls
48.967,00
64.781,52
Others
43.562,21
78.915,16
12.204.329,62
11.866.917,71
Communi cation
Fees Legal expenses Maintenance and repairs Advertisi ng and promoti on
Speci al ised labour
24.
6.269.138,22 137.418,59 146.338,69
139.501,72
Water and other fl ui ds Tools
2015
Employees benefits, number of employees and staff costs
24.1. Number of employees
Board Members Empl oyees
bysteel, s.a.
2016
2015
7 166 173
7 177 184
Page 63 of 71
Annual Report 2016
24.2. Staff costs In the periods of 2016 and 2015, this balance was as follows:
Description
Board of di rectors remmunerations Salari es
2016
2015
108.036,10
71.989,36
3.815.024,91
3.381.484,33
4.733,51
9.544,47
1.028.398,96
849.079,23
Working and profes sional il lness insurance
67.016,89
79.934,96
Social acti on costs
13.499,25
16.165,22
Trai ni ng
16.765,15
24.164,01
Health and l ife insurance
15.504,92
54.693,63
Other staff costs
19.981,69
(32.206,82)
5.088.961,38
4.454.848,39
Compensations Social charges
25. Other operating income In the periods of 2016 and 2015, this balance was as follows:
Description
2016
2015
1.288.047,51
1.750.092,61
Sale of non-financi al investments
16.892,96
2.391,69
Exchange gains
19.617,77
258.015,45
Cash discounts
45.176,61
48.875,26
-
308,31
Overestimated tax provisi on
62.328,70
-
Investment subsidi es
93.464,46
795.596,29
Insurance claims
13.966,35
-
846.283,55
13.314,47
2.385.777,91
2.868.594,08
Other operating income
Pri or years adjustments
Other extraordinary income
bysteel, s.a.
Page 64 of 71
Annual Report 2016
26. Other operating charges In the periods of 2016 and 2015, this balance was as follows: Description Taxes and charges Cash dis counts Sale of non-fi nancial i nvestments Pri or years adjustments Contributi ons Exchange losses Bank guarantees cos ts
8.838,86
9.628,38
0,45
1.178,14
215,28
-
-
852,79
2.052,00
2.040,00 176.201,18
39.113,82
96.789,06
6.823,32
9.063,82
21.637,10
14.261,72
Fi nes and penal ties Banking services
2015
122.516,82
Factori ng costs Confirming costs
2016
-
580,15
98.685,32
48.949,52
2.354,90
131,88
302.237,87
359.676,64
Other losses and expenses
27. Interest and other similar revenues In the periods of 2016 and 2015, this balance was as follows: Description
Contractual i nterests and i nterests for delayed recei vables Current loans interest Other financi al income
bysteel, s.a.
2016
2015
-
401,09
444,93
19.642,92
-
283,81
444,93
20.327,82
Page 65 of 71
Annual Report 2016
28. Interest and other similar expenses In the periods of 2016 and 2015, this balance was as follows: Description
2016
Bank loans interest Factoring interest Lease interest
115.313,63
130.269,43
546,60
1.896,93
1.267,58
405,40
-
285,36
Confi rming interest Penalty interests and i nterests for delayed payments Other l oans i nterest
2015
115,28
47,34
43.440,85
28.400,85
160.683,94
161.305,31
29. Commitments related to obtained guarantees As of December 31, 2016 and 2015 the entity had bank guarantees to replace bidders’ bails amounting to 8,250,448.46 Euros and 4,108,760.02 Euros, as follows: National
2016
Euros SANTANDER
20.496,10
267.795,60
BCP
17.928,83
424.847,23
BPI
861.000,56
1.005.084,49
96.933,19
497.553,03
2.725.676,11
1.302.588,98
Novo Banco CGD BPN BANCO POPULAR Banco BIC TOTAL
bysteel, s.a.
2015
139.367,43
-
4.389.046,24 -
94.170,10 516.720,59
8.250.448,46
4.108.760,02
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30. Events after the balance sheet date Between the reporting date of the Financial Statements (December 31, 2016) and the clearance date for its disclosure (March 31, 2017), there were no material facts warranting disclosures or changes to the Financial Statements for the period.
31. Disclosures required by law The Management Board reports that the entity has no debts to the State in arrears in accordance with Law-decree number 534/80 of November 7. Pursuant the requirements of the Article 210 of the Contributory Code, published by the Law number 110/2009 of September 16, the Management Board informs that the situation of the entity with respect to Social Security is regularized within the legally stipulated deadlines. Pursuant to the requirements of the Article 66º of the Code of Commercial Companies, the entity informs that the Statutory Auditor’s charged fees (Chartered Accountant) amounted to 5,904.00 Euros (VAT included), which solely cover the statutory audit services. During the period ended December 31, 2016, the entity incurred in research and development (“R&D”) expanses amounting 135,661.74 euros considered eligible for the use of the Tax Incentive System in Business Research and Development (“SIFIDE II”), pursuant to article 6 of Law no. 40/2005, in the wording given by Law No. 162/2014, whereby the Tax Incentives Certification Commission for Business R&D awarded to the entity a tax credit amount of 111,920.94 euros. As in the 2015 taxation period, the entity and the companies’ group taxed under the Special Taxation Regime of Companies’ Groups (“RETGS”) in which it is inserted, did not obtain a sufficient Corporate Income Tax (IRC) collection to deduct that tax credit, the amount of 76,749.42 euros will be used by the entity in the 2016 taxation period. In 2016, the entity also incurred R&D expenses that could be eligible for the use of SIFIDE II. In this sense, the entity is preparing a candidacy to address the Tax Incentives Certifying Committee for Business R&D, to obtain a declaration proving that the activities carried out effectively correspond to R&D activities. If such request is granted by the competent authorities, the entity will be able to benefit from a corporate income tax (IRC) deduction, whose value amounts to 221,231.82 euros. In accordance with the provisions of the number 1 and 2 of the Investment Tax Code (CFI), the entity established an amount of tax benefit related to the Investment Support Tax Regime (RFAI) for 2016 of 22,206.47 euros, corresponding to 25% Of the year's eligible investments (€ 88,825.87). bysteel, s.a.
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Annual Report 2016
32. Clearance date to financial statements disclosure The financial statements for the period ended December 31, 2016 were approved by the Board of Directors and authorized to disclosure on March 31, 2017.
Braga, March 31, 2017
The Board of Directors,
The Certified Accountant number 32974,
José Gonçalves Teixeira; Executive Chairman
João Pedro Martins Ferreira Félix da Costa
Joaquim Gonçalves Teixeira; Executive Vice-Chairman
Avelino Gonçalves Teixeira; Non-Executive Vice-Chairman
João Martins Negrais de Matos; Executive Member of the Board of Directors
Rodrigo José Crespo de Araújo; Executive Member of the Board of Directors
Eurico António Lopes Soares; Non-Executive Member of the Board of Directors
bysteel, s.a.
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Annual Report 2016
E)
Legal Certification of Accounts
bysteel, s.a.
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Annual Report 2016
bysteel, s.a.
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Annual Report 2016
F)
Report and Opinion of the Sole Fiscal Auditor
bysteel, s.a.
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