Notes to the consolidated financial statements - Efacec

1 

2 

Index 

Consolidated Financial Statement Documents 

Balance sheet and profi t and loss account 4 

Consolidated statement of changes to shareholders´ funds 6 

Consolidated Cash Flow Statement 8 

Notes to the consolidated fi nancial statements 9 

Individual Financial Statement Documents 

Balance sheet and profi t and loss account 48 

Individual statement of changes to Shareholders`s Funds 50 

Cash fl ow statement 52 

Notes to the Financial Statements 53 

Report and Opinion of the Statutory Auditor 73 

Legal certifi cation of the consolidated and individual fi nancial statements 74 

1 

2008 Consolidated and 

Individual Financial Statments

3 



Non-current assets 

EFACEC Capital, S.G.P.S., S.A. and Subsidiary Companies 

Consolidated balance sheets for years ended 31 December 2008 and 2007 

Assets 

The Accountant Board of Directors 

4 

Amounts in Euro 

Notes 2008 2007 

Tangible fi xed assets 4 108,470,378 70,052,540 

Intangible assets 5 4,214,723 4,874,864 

Goodwill 5 25,714,281 22,110,396 

Financial investments in group and associated companies 6 7,365,885 7,560,600 

Financial investments in other companies 7 534.934 14.483 

Debtors and deferred costs 10 27.000 27.000 

Deferred tax assets 16 10,445,617 4,243,415 

Derivatives 8 0 345.574 

Current assets 

Total non-current 156,772,819 109,228,872 

Assets held for sale 11 931,196 1,242,908 

Stocks 11 60,272,731 47,225,497 

Customers and accrued income 9 279,045,239 218,231,846 

Debtors and deferred costs 10 31,188,354 29,895,248 

Derivatives 8 0 1,062,540 

Other fi nancial investments 12 16,992,032 1,526,260 

Cash and cash equivalents 12 110,526,411 10,213,594 

Shareholders’ Funds 

Shareholders’ Funds and Liabilities 

Total current 498,956,564 309,397,894 

Total assets 655,729,383 418,626,766 

Capital 13 41,641,416 41,641,416 

Reserves for fi nancial instruments 8 -3,732,754 1,244,307 

Reserves and retained earnings 19,924,336 28,486,074 

Consolidated net profi t 24,136,981 17,401,185 

Anticipated dividends 24 -6,034,000 -12,216,000 

Minority Interests 19 3,386,358 2,936,936 

Non-current liabilities 

Total shareholders’ funds 79,322,337 79,493,918 

Provisions 17 8,705,045 7,004,097 

Loans 15 104,504,798 64,340,649 

Suppliers 14 1,051,246 2,598,015 

Creditors and accruals 14 3,958,939 3,477,160 

Deferred tax liabilities 16 5,691,747 6,342,351 

Derivatives 8 2,347,029 0 

Current liabilities 

Total non-current liabilities 126,258,804 83,762,271 

Loans 15 136,195,368 46,819,426 

Shareholders’ loans 27 8,297,644 7,100,000 

Suppliers 14 103,814,476 79,788,610 


Deferred income 18 146,271,233 94,493,036 

Derivatives 8 9,231,548 117,426 

Total current liabilities 450,148,242 255,370,577 

Total shareholders’ funds and liabilities 655,729,383 418,626,766 

The Notes to the Accounts are an integral part of these consolidated balance sheets


Consolidated profit and loss account by nature for the years ended 31 December 2008 and 2007 

5 



Sales and Services Rendered 3 606,216,504 440,323,101 

Cost of Sales and Materials Consumed -291,961,804 -204,802,346 

Change in production 3,024,848 11,771,333 

Third Party Supplies and Services 20 -165,143,963 -135,012,292 

Staff Costs -96,572,275 -79,233,191 

Depreciation 4 -8,372,107 -7,987,343 

Provisions 9, 10, 17 -2,675,685 -1,024,592 

Other Operational Costs -3,112,377 -2,061,532 

Other operating income 3,216,886 3,466,397 

Operating Profi ts 44,620,027 25,439,535 

Financial Costs (net) 21 -14,363,394 -4,865,583 

Losses/Gains in associated companies 6 637,908 1,097,969 

Losses/Gains in other companies 7 -1.965 13.213 

Income tax - deferred 22 4,665,634 -499,589 

Income tax - current 22 -10,833,589 -3,437,482 

Minority Interests - share of profi ts 19 -587.641 -346.878 

Consolidated net profi t 23 24,136,981 17,401,185 

The Notes to the Accounts are an integral part of these consolidated balance sheets 





Consolidated statement of changes to shareholders’ funds as at 31 December 2008 

6 

Notes Share Capital 

Reserves for financial 

instruments 

Balance as at 01.01.2007 

Application of profi t/loss 

41,641,416 1,439,901 

Dividend distribution 24 

Anticipated dividend distribution 24 

Cash fl ows hedging net of taxes 8, 16 -195,593 

Adjustments in associated companies 

Reversal of revaluation reserve 

Exchange rate differences in foreign shareholdings 

6 

Acquisition/Constitution of Subsidiaries 

Other 

31 

Gains / (Losses) recognised in shareholders’ funds 

Net profi t for the fi nancial year 

0 -195,593 

Total gains recognised in 2007 0 -195,593 

Balance as at 31.12.2007 41,641,416 1,244,308 

Balance as at 01.01.2008 

Application of profi t/loss 

41,641,416 1,244,308 


Anticipated dividend distribution 24 

Cash fl ows hedging net of taxes 8, 16 -4,977,062 

Adjustments in associated companies 6 

Revaluation of land 

Reversal of revaluation reserve 

Exchange rate differences in foreign shareholdings 

Acquisition/constitution of subsidiaries 


31 

Gains / (Losses) recognised in shareholders’ funds 0 -4,977,062 


Total gains recognised in 2008 0 -4,977,062 

Balance as at 31.12.2008 41,641,416 -3,732,754 

The Accountant

Attributable to shareholders 

Revaluation reserves 

Reserves and retained 

earnings 

Profit/Loss of the Financial 

Year 

7 

Minority Interests Total Shareholders’ Funds 

21,358,600 -1,516,572 17,075,631 2,626,381 82,625,357 

9,538,535 -9,538,535 0 

-7,537,096 -163,675 -7,700,771 

-12,216,000 -12,216,000 

71,515 

-195,593 

71,515 

-49,611 -49,611 

-226,675 -36,267 -262,942 

169,069 169,069 

-14,810 -674,907 17,401,185 -5,450 -695,168 

-64,421 8,708,467 -29,291,631 -36,324 -20,879,502 

17,401,185 346,878 17,748,063 

-64,421 8,708,467 -11,890,446 310,555 -3,131,438 

21,294,179 7,191,896 5,185,184 2,936,936 79,493,919 

21,294,179 7,191,896 5,185,184 2,936,936 79,493,919 

-8,035,815 8,035,815 0 

-13,221,000 -225,642 -13,446,642 

-6,034,000 -6,034,000 

-4,977,062 

95,287 95,287 

383,683 383,683 

-188,419 -188,419 

-749,948 -100,118 -850,065 

25,556 25,556 

15 -66,542 161,985 95,458 

195,279 -8,757,018 -11,219,185 -138,219 -24,896,204 

24,136,981 587,641 24,724,621 

195,279 -8,757,018 12,917,796 449,422 -171,582 

21,489,458 -1,565,122 18,102,980 3,386,358 79,322,336 

Board of Directors 




Consolidated cash flow statements for the periods ended 31 December 2008 and 2007 

Operational activities 


8 



Received from customers 719,024,496 495,451,141 

Paid to suppliers 496,313,665 322,491,466 

Paid to staff 92,547,808 76,924,353 

Flow generated by operations 130,163,023 96,035,322 

Payment/receipt of corporation tax (4,229,764) (3,171,780) 

Other revenue/payments in respect of operating activity (67,330,516) (81,615,839) 

Investment activities 

Revenues provided by: 

Net infl ow from operational activities [1] 58,602,743 11,247,703 

Financial investments 6,7 0 23,191 

Investment subsidies 17,283 15,346 

Interest and similar income 2,868,141 252,527 

Dividends 6 724,453 818,549 

Payments pertaining to: 

3,609,878 1,109,613 

Financial investments 6,7,12 19,107,261 12,089,839 

Tangible assets 4 35,312,756 8,918,834 

Intangible assets 5 0 0 

54,420,017 21,008,673 

Net outfl ow from investment [2] (50,810,140) (19,899,060) 

Financing activities 


Non-current loans obtained 15 14,378,757 0 

Current loans obtained/granted 15 290,400,608 53,940,765 

Capital increase, supplementary services and issue premiums 28,998 0 

Subsidies and donations 0 0 


304,808,363 53,940,765 

Non-current loans obtained 15 359,259 521,406 


Amortisation of leasing contracts 4 86,277 16,995 

Interest and similar income 21 10,621,393 4,135,429 

Dividends 24 19,480,642 19,916,824 

204,753,086 41,270,425 

Flows generated by fi nancing activities [3] 100,055,277 12,670,340 

Change in cash and cash equivalents [A]-[B]+[C]-[D]+[E]=[1]+[2]+[3] 107,847,881 4,018,983 

Impact of exchange rate differences [A] 9,181,775 299,088 

Impact of change in consolidation perimeter [B] 120,451 356,499 

Cash and cash equivalents in discontinued units [C] 0 0 

Cash and cash equivalents at the beginning of the period [D] 11,739,854 7,663,459 

Cash and cash equivalents at the end of the period [E] 110,526,411 11,739,854

A. General information 

Notes to the consolidated financial statements 

The EFACEC Group’s business activities cover an extensive range of high technology products and services. Diversity in creative 

and engineering capability enables us to offer technical solutions to a wide variety of activities and sectors in both internal and 

external markets.A signifi cant part of our output is in support of operational control tools and management, developed in accordance 

with the most sophisticated consumer requirements. The variety of services and products which we offer include a wide 

range of equipment used in the transport and distribution of electricity, in control and control systems, electric traction, industrial 

electronics, telecommunications, automation and robotics and in engineering projects focused on industrial plants, transport and 

maintenance. 

The Group operates in a highly competitive market, and it is necessary to be alert to the constant developments and changes in 

customer preferences and in new technologies. With this in mind, the Group has adapted its structure to ensure the most appropriate 

solution. In the 90's it assumed a commitment to internationalise and diversify activities that led to the setting up of 

branches and agents across more than 60 countries.Since 2000 the focus has been on analyzing and evaluating the strategies 

followed, developing business areas with greater added value and building up the Group with the adequate competencies for the 

new market and organisational challenges. 

EFACEC Capital, holding company of the EFACEC Group, is a publicly quoted company with its headquarters in Arroteia, parish of 

Leça do Balio, Matosinhos in Portugal. 

B. Summary of main accounting policies 

The main accounting polices used to prepare these consolidated fi nancial statements are described below. These policies have 

been consistently applied over the years unless otherwise stated. 

1 Accounting policies 

1.1 Basis of preparation 

The consolidated fi nancial statements of EFACEC Capital, SGPS, SA were prepared in accordance with International Financial 

Reporting Standards (IFRS), as adopted by the European Union, in force on 01 January 2008. 

The consolidated fi nancial statements were prepared using historical costs with the exception of land, fi nancial assets and liabilities 

(including derivatives) which have been valued in the accounts at their fair value. 

The preparation of the fi nancial statements in accordance with the International Financial Reporting Standards requires the use of 

some important accounting estimates. It also requires that the management entity uses its judgement in the process of applying 

the accounting policies of the company. The area involving the greatest degree of judgement or complexity, or the area where the 

assumptions and estimates are signifi cant for the fi nancial statements, relate to the estimate of goodwill impairment (Note 1.6). 

During this fi nancial year the interpretation IFRIC.11 IFRS.2 was mandatory - Intra group transactions of Own Shares, producing 

no signifi cant impact of company accounting policies. 

At the end of this fi nancial year, the following standards were issued but not mandatory as at 31 December 2008: 

- IFRS 2 Payment based on shares (2008 Update) 

- IFRS 3 Business combinations (2008 Update) 

- IFRS 8 Operating Segments; 

- IAS 1 Presentation of Financial Statements (2007 Update) 

- IAS 23 Cost of Loans Obtained – (2007 Update) 

- IAS 27 Consolidated and Separate Financial Statements (2008 update) 

- IAS 32 Financial instruments: Presentation (2008 Update) 

- IFRIC 13 Customer Retention Programmes; 

- IFRIC 14 The Limit on a Defi ned Benefi t Asset, Minimum Financing Requirements and their Interaction 

- IFRIC 15 Agreements for the construction of real estate 

- IFRIC 16 Hedges of a net investment in a foreign operation 

9 



In view of the fact that applying these standards was not mandatory for the fi nancial year beginning 1 January 2008, the Group 

decided not to adopt them immediately. 

It is estimated however that there would be no signifi cant impact from applying them to the consolidated fi nancial statements of 

the Group for those standards which are applicable to the group. 



the accounting policies of the company. 

1.2 Consolidation 

(a) Subsidiaries 

Subsidiaries are all those entities (including those Entities with Special Purposes) over which the Group has the power of decision 

concerning fi nancial and operational policies, generally where it holds over half of the voting rights. The existence and the impact 

of potential voting rights currently exercisable or convertible is taken into consideration when it is assessed whether the Group 

has control over another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group, and are 

excluded from consolidation from the date on which that control ceases. 

The purchase method is used to account for the acquisition of subsidiaries. The cost of acquisition is measured by the fair value 

of the goods delivered, the instruments of share capital issued, the liabilities incurred or assumed on the date of acquisition, plus 

the directly attributable costs of acquisition. The identifi able assets acquired and the contingent liabilities taken on in a business 

merger are initially measured at their fair value on the date of acquisition, irrespective of the existence of minority interests. The 

excess of the cost of acquisition compared to the fair value of the Group’s share of the identifi able assets acquired is booked as 

goodwill (IFRS 3). If the cost of acquisition was less than the fair value of the net assets of the acquired subsidiary, the difference 

is refl ected directly in the Profi t and Loss Account. 

The transactions, balances and unrealised gains on operations that took place between group companies are eliminated. Unrealised 

losses are also eliminated, except if the transaction shows evidence of impairment relating to a transferred asset. The accounting 

policies of subsidiaries were changed whenever deemed necessary to ensure consistency with the policies used by the Group. 

The amount of Minority Interests is included in Shareholders’ Funds. 

The list of subsidiaries included in the consolidation perimeter is shown in Chapter G, as well as the respective impacts. 

(b) Associates 

Associates are all those entities over which the Group exercises a signifi cant infl uence but where the Group does not have control, 

generally shareholdings having between 20% and 50% of voting rights. Investments in associates are accounted for using the 

equity method and are initially booked at cost. Investment of the Group in associates includes goodwill (from which accumulated 

impairment losses are deducted) that was identifi ed on acquisition (see Note 1.6). 

The share of the Group in gains and losses of its associates after acquisition is refl ected in the Profi t and Loss Account and its share 

of movements in reserves after acquisition is refl ected in reserves and in the accounting value of the investment. When the share 

of the Group in the losses of the associate is equal to or greater than the investment in the associate, including receivables not 

covered by guarantees, the Group does not recognize additional losses, unless they have been caused by bonds or if the Group 

made payments in the name of the associate. 

If the cost of acquisition was less than the fair value of the net assets of the associates acquired, the difference is booked directly 

to Profi t and Loss. 

The goodwill identifi ed on acquisition of associates, less accumulated impairment losses, is shown in a specifi c line in the Balance 

Sheet. 

Unrealised gains on transactions with associates are eliminated when Group shareholdings are increased in associates. Unrealised 

losses are also eliminated, except if the transaction reveals evidence of impairment of a transferred asset. Accounting policies of 

associates are changed whenever necessary, to ensure consistency with the policies used by the Group. 

(c) Joint Ventures 

Interest in jointly controlled entities are booked the proportional consolidation method. The Group adds its share of profi ts/losses, 

assets, liabilities and cash fl ows of joint ventures on a line by line basis with similar items of the Group Consolidated Financial 

Statements. 

The Group recognises the proportion of gains and losses on the sale of Group assets to the Joint Venture that is attributable to 

other partners. It does not recognize its share in the gains or losses of the joint venture that result from the purchase by the Group 

of assets belonging to the joint venture until it sells them to an independent entity. The loss on the transaction is immediately 

recognised if there is evidence of a reduction in the value of the net realisable value of current assets, or of an impairment loss. 

The accounting policies of joint ventures are changed whenever deemed necessary, to ensure consistency with the policies used 

by the Group. 

10

1.3 Reporting by segments 

A business segment is a group of activities and operations involved in the supply of products and services subject to risks and 

benefi ts that are different to other business segments. A geographical segment is involved in supplying products and services 

within a specifi c economic environment that is subject to different risks and benefi ts than those of segments that operate within 

other economic environments. 

1.4 Exchange rate conversion 

(a) Functional currency and for presentation purposes 

The fi gures included in the Financial Statements of each of the Group entities are stated using the currency of the country in 

which the unit operates (“The functional currency”). The consolidated Financial Statements are presented in Euro, this being the 

functional and presentational currency of the Group accounts. 

(b) Transactions and Balances 

Transactions in currencies other than the Euro are converted to the functional currency using the exchange rate at the date of 

the transaction. Exchange gains and losses arising from the payment of transactions and from conversion at the rate on the balance 

sheet date of the assets and liabilities designated in a currency other than the Euro, are recognised in the Profi t and Loss 

Account. 

(c) Group Companies 

The fi nancial results and position of all Group entities (none of which use a currency of a country suffering hyper infl ation) that 

have a functional currency different to that of account presentation are converted to the presentation currency as follows: 

(I) The assets and liabilities of each balance sheet presented are converted at the exchange 

rate in force at the date of the Financial Statements; 

(II) Income and expenses of each Profi t and Loss Account are converted at the average 

exchange rate; and 

(III) The resulting exchange rate differences are shown in Shareholders’ Funds in the line 

Reserves. 

(d) Rates Used to Convert Major Foreign Currencies into Euro 

In Group companies with headquarters abroad, the constant fi gures in the fi nancial statements relating to assets and liabilities, 

and included in the profi t and loss account, were converted into Euro using the following exchange rates: 

For 1 monetary unit – Euro Final rate 2008 Average rate Final rate 2007 

Angola Kwanza AOA 100,99500 108,45275 - 

Argentina Peso ARS 4,80660 4,67176 4,63640 

Brazil Real BRL 3,24360 2,68064 2,59630 

Chile Peso CLP 886,86000 773,10083 - 

China Yuan CNY 10,78580 11,47006 10,75240 

Czech Republic Crown CZK 26,87500 25,00942 26,62800 

Algeria Dinar DZD 98,07515 95,26276 98,24060 

India Rupee INR 67,39500 64,14375 57,85500 

Morocco Dirham MAD 11,22475 11,35199 - 

Macao Pataca MOP 11,10940 11,81416 11,82440 

Malaysia Ringgit MYR 4,80480 4,89848 4,86820 

Mozambique New Metical MZN 35,21000 35,77542 34,81500 

Romania New Leu RON 4,02250 3,70529 - 

Singapore Dollar SGD 2,00400 2,07273 2,11630 

Tunisia Dinar TND 1,82640 1,80700 1,79470 

United States Dollar USD 1,39170 1,47362 1,47210 

Venezuela Bolívar VEF 2,98840 3,16429 (a) 

(a) On 1 January 2008, the Bolivar Fuerte (VEF) was introduced, equivalent to 1000 of the former Bolivar from Venezuela (VEB). 

11 



1.5 Tangible Fixed Assets 

Land and buildings basically correspond to factories and offi ces. Land is shown at fair value, based on periodic evaluations carried 

out at least every three years by external independent assessors. Other tangible fi xed assets are shown at historical cost, less 

depreciation, including all expenditure directly attributable to the acquisition of the assets. 

Subsequent costs are included in the cost already booked for the asset, or recognised as separate assets, as deemed appropriate, 

but only when it is probable that economic benefi ts will accrue to the company and that the cost can be measured reliably. Other 

expenditure for repairs and maintenance are recognised as costs within the period in which they are incurred. 

Increases resulting from revaluations are shown in Reserves in Shareholders’ Funds. Each year, the difference between depreciation 

based on the re-valued amount of the asset taken to profi t and loss in the period, and depreciation based on the original cost 

of the asset, is transferred from fair value Reserves to Retained Profi ts. 

Land is not depreciated. Depreciation on other assets is calculated using the straight line method using the cost value or the revalued 

amount, in order to apportion their cost or re-valued amount over the useful life of the asset down to their residual value, 

as follows: 

Line Years 

Land - 

Buildings and Other Constructions 25 - 50 

Plant and Equipment 8 - 12 

Vehicles 4 - 5 

Tools and Utensils 4 - 8 

Offi ce Equipment 4 - 6 

Depreciation begins in the month following that in which the asset entered service, in accordance with its useful life, as follows. 

Asset residual values and respective useful lives are revised and adjusted, if deemed necessary, at the balance sheet date. If the 

amount booked is greater than the recoverable value of the asset, it is immediately adjusted to its estimated recoverable value 

(Note 1.7). 

Gains and/or losses on disposal or write offs are determined by calculating the difference between the net accounting value of the 

asset, and its disposal or write off value, being in the latter case zero, and included in the Profi t or Loss for the period. 

1.6 Intangible Assets 

(a) Goodwill 

Goodwill represents the difference between the excess of the cost of acquisition and the fair value of identifi able assets and liabilities 

of the subsidiary/associate on the date of acquisition (Note 1.2).It is shown on a separate line in the Balance Sheet. 

Goodwill is subject to impairment tests on an annual basis, and is shown at cost, less accumulated impairment losses. Gains or 

losses resulting from the sale of an entity include the value of its respective goodwill. 

Goodwill is allocated to cash fl ow generating units (UGC) for carrying our impairment tests (Note 1.7). The amount recoverable 

from a UGC is calculated based on calculations of useful value. These calculations use cash fl ow projections based on fi nancial 

budgets approved by the management entity, covering a period of at least 4 years. 

The management entity works out the budgeted gross margin based on prior performance and its expectations for market development. 

The average weighted growth rate used is consistent with the forecasts included in sector reports. The discount rates used 

are before tax, and refl ect the specifi c risks related to the relevant sectors. 

b) Software 

The acquisition cost of software licences is capitalised and includes all costs incurred for its acquisition and those required to put 

the available software into use. These costs are depreciated over the estimated useful life (not exceeding 5 years). 

Costs related to the development or maintenance of the software are recognised as costs of the period in which they are incurred. 

Costs directly associated with the production of identifi able and unique software controlled by the Group, and which is probably 

going to generate future economic benefi ts that are superior to costs involved beyond one year, are recognised as intangible assets. 

Direct costs include staff costs to develop the software and a share of relevant fi xed costs. 

Software development costs recognised as assets are amortised over its estimated useful life (not exceeding 5 years). 

12

c) Research and development costs 

Expenditure on research is recognised as a cost in the period it is incurred. Costs related to development projects (concerning the 

design and test of new products or improvements to existing products) are recognised as intangible assets when it is probable that 

the project will be a success, taking into account its technical and commercial viability and the costs that can be reliably measured. 

Other development expenditure is recognised as a cost of the period in which it is incurred. Development costs previously recognised 

as a cost are not recognised as an asset in subsequent periods. Development costs with a fi nite useful life that have been 

capitalised, are amortised from the beginning of commercial production of the product on a straight line bases over the period of 

expected benefi t, not exceeding fi ve years. 

1.7 Asset impairment 

Assets that do not have a defi ned useful life are not subject to amortisation, but are the object of annual impairment tests. Assets 

subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the value at which 

they were booked may not be recoverable. An impairment loss is recognised by the amount by which the booked value of the 

asset exceeds its recoverable value. The recoverable value is the highest of the fair value of the asset, less expenses required for 

sale, and its use value. To carry out impairment tests, assets are grouped together at the lowest level at which cash fl ows can be 

identifi ed separately (cash fl ow generating units, Note 1.6). 

1.8 Financial investments 

Financial investments in group companies excluded from consolidation (Chapter G) and other shareholdings are shown at acquisition 

cost. 

Financial investments in associated companies are valued using the Equity Method, as described in Note 1.2 (b). 

The Group checks at each balance sheet date whether there is objective evidence as to impairment of any investment. If there 

is such proof, the accumulated loss, calculated as the difference between the balance sheet value and the current fair value, is 

recognised in the profi t and loss account of the period in which the impairment occurred (Note 1.7). 

1.9 Stocks 

Stocks are presented at the lowest value between cost and net realisable value. The cost is calculated using the standard cost 

(which does not vary signifi cantly from actual production cost). 

The cost of fi nished products and manufacturing work in progress includes raw material costs, direct labour, other direct costs and 

manufacturing overheads (based on normal production capacity). The costs of loans obtained are excluded. 

Net realisable value is equal to the estimated selling price under normal business conditions, less variable selling costs. The cost 

of stocks includes the transfer from shareholders’ funds of any loss or gain classifi ed as cash fl ow hedging related to the purchase 

of raw materials. 

1.10 Recognition of income and costs relating to contracts over several years 

Profi t on contracts which continue for more than one year are accounted for in accordance with the percentage of work completed 

by reference to partial delivery, segment identifi cation, assessment procedures or other means which allow reliable estimation of 

costs for completion of the work or the invoices which are to be sent to the customer. When it is not possible to estimate profi ts 

and the costs with reasonable reliability, then they are recognised only when the product is delivered to the customer, applying the 

completed work criteria. In this case, the costs incurred until delivery are recorded in Stocks – Products and work in progress. 

Costs of contracts include raw materials and direct materials, direct labour and also allocated indirect costs, distributed as specifi ed 

in the contract. Sales and administration expenses are charged as costs as they occur. Provisions are set up for any foreseen losses 

on completing a contract within the period in which they are determined, and are immediately refl ected in the results. Changes to 

contracts or estimates and forecast costs and/or profi ts and margins, arising from renegotiating of the conditions with customers 

or from internal productivity, are recognised in the results from the period in which they occur and taking into account the stages 

of completion. 

When there are materials which have not yet been used on the job or the installation, there will be a balance on the account “Products 

and work in progress”.If this relates to receivables from customers not yet invoiced, the resulting margin is not recognised. When 

the opposite situation occurs and the amount invoiced to the customer is greater than the level of work completed, a deferred 

liability is set up representing a liability to a customer for the work still to be completed. 

13 



1.11 Accounts receivable from customers and other debtors 

Accounts receivable from customers and other debtors are initially recognised at their nominal or fair value, when different, less 

any impairment loss. The provision for receivable accounts impairment is set up when there is objective evidence that the Group 

will not receive the entire amount outstanding, as per the original conditions established for the debt. The amount of the provision 

is the difference between the amount presented and the estimated present value of future cash fl ows, discounted at the effective 

interest rate. The amount of the provision is recognised in the profi t and loss account. 

1.12 Cash and cash equivalents 

The line “Cash and cash equivalents” includes cash, bank deposits, other short-term high liquidity investments and with initial 

maturities up to three months. Bank overdrafts are shown in the Balance Sheet under current liabilities in the line Loans. 

1.13 Share capital 

Ordinary shares are shown in shareholders’ funds. 

The incremental costs directly attributable to the issue of new shares or options are shown in shareholders’ funds as a reduction, 

net of taxes, of increases in share capital. The incremental costs directly attributable to the issue of new shares or options or the 

acquisition of a new business are included in the cost of acquisition as part of the purchase price. 

1.14 Loans obtained 

Loans are initially recognised at their nominal value or fair value, whenever different, less any impairment loss. Later they are 

shown at their amortised cost; any difference between receipts (net of transaction costs) and the amortised value is recognised in 

the profi t and loss account throughout the loan period, using the effective rate method. 

Loans are shown in current liabilities, unless the Group has an unconditional right to defer payment of the liability until at least 12 

months after the balance sheet date. 

1.15 Income tax and deferred taxes 

EFACEC Capital, S.G.P.S. opted for taxation based on consolidated profi ts as from 1993, currently covered by the “Special Rules 

for Taxation of Groups of Companies”. All Group companies whose headquarters are located in Portugal and are subject to the 

Portuguese Corporate Income Tax (IRC), and where the direct and indirect share holding is greater than 90%, have been included 

in the tax consolidation in accordance with the applicable legislation. The consolidated tax charge is determined on the basis of the 

arithmetic sum of taxable profi ts and losses as derived from individual companies’ tax returns. 

Deferred taxes are generally recognised using the liability method concerning temporary differences arising from the tax base 

of assets and liabilities and their respective values in the consolidated fi nancial statements. However, if the deferred tax arises 

through the initial recognition of an asset or liability in a transaction that is not a business concentration that at the date of the 

transaction did not affect either the accounting or fi scal result, it is not booked. Deferred taxes are determined by fi scal taxes (and 

laws) in force or substantially in force at the balance sheet date and which are expected to be applicable in the period when the 

deferred tax asset or the payment of the deferred tax liability takes place. The tax rate that has been used to determine deferred 

taxes is that in force according to current legislation – 26.5% including local municipal tax. 

Deferred tax assets are recognised to the extent that it is probable that future taxable profi ts will be available to make use of the 

timing difference. 

Deferred taxes on timing differences arising from investments in affi liates and associates are recognised, except when the Group 

is able to control the haphazard nature of the reversal of the timing difference and when it is probable that the timing difference 

does not revert in the foreseeable future. 

Deferred taxes are classifi ed as Current or Non-Current, according to the presentation of the amounts in the balance sheet to which 

they relate, or to whether the respective timing differences are reverted in the short or medium/long-term. 

1.16 Provisions 

Provisions are booked when the Group has a legal or constructive obligation and that, as a result of past events, it is probable 

that an outfl ow of resources will be necessary to pay an obligation, and a reliable estimate of the amount of the obligation can be 

made. 

When there is a number of similar obligations, the probability of generating an outfl ow is worked out together. The provision is 

booked even when the probability of an outfl ow, relating to an element included in the same class of obligations, may be reduced. 

14

1.17 Recognition of income 

Income covers the fair value of the sale of goods and services, net of taxes and commercial discounts and after elimination of 

internal sales. 

a) Sales 

The income recognised, in the case of multi-year contracts, in which the percentage of completion method is used, is in accordance 

with the policy defi ned for the recognition of income and costs related to multi-year contracts (Note 1.10). 

The sale of other goods is recognised when the products are delivered to and accepted by the customer, and when payment of the 

related receivable accounts is reasonably assured. 

b) Service Rendering 

The rendering of services is recognised in the accounting period in which they are rendered, with reference to the phase of completion 

of the transaction at the balance sheet date. 

1.18 Leases 

Leases are classifi ed as operational leases if a signifi cant part of the inherent risks and benefi ts at the time the lease is taken on 

is retained by the lessor. Payments made for operational leases are booked in the profi t and loss account on settlement. 

Leases of tangible fi xed assets where the Group holds substantially all the risks and benefi ts associated with the asset are classifi 

ed as fi nancial leases. Financial leases are capitalised at the beginning of the lease for the lower of the fair value of the asset 

leased and the present value of the minimum payments of the lease. Each payment made is split between the capital sum due 

and the fi nancial costs, in order to obtain a constant rate on the debt outstanding. Lease obligations net of fi nancial charges are 

shown in Other Creditors. The interest is booked to fi nancial costs in the lease period to a constant periodic interest rate on the 

remaining debt of each period. Tangible fi xed assets acquired through fi nancial leases are depreciated over the lesser of the useful 

life of the asset or the lease period. 

1.19 Dividend distribution 

Dividend distribution to shareholders are recognised as a liability in the Group fi nancial statements in the period in which the 

dividends are approved in the Shareholders’ General Meeting. 

1.20 Subsidies 

Subsidies received are booked at their fair value when a reasonable level of comfort exists that the subsidy will be received and 

the Group will comply with its obligations. 

Subsidies relating to the purchase of tangible fi xed assets are included in non-current Liabilities as deferred subsidies and are 

credited to the Profi t and Loss Account in proportion to the useful life of the corresponding assets. 

1.21 Discontinued operations 

A discontinued operation is a component of an entity that was either written off or was classifi ed for sale or liquidation and: (a) 

represents a signifi cant line of business or geographical area of operation; (b) is part of the restructuring of an area of business 

or geographical area of operations; or (c) is a subsidiary acquired for sale. 

15 



2. Financial risk management 

2.1 Factors of financial risk 

The Group operates internationally and thus has exposure to the market, in particular to changes in interest rates, exchange rates 

and the price of raw materials.Thus Group activities are exposed to a variety of fi nancial risks: market risk (including exchange 

rate risk, fair value risk relating to interest rates and price risk), liquidity risk and cash fl ow risk associated with interest rates. 

The Group has no signifi cant concentrations of credit risk. Various fi nancial instruments are used to minimise the potential adverse 

effects on the fi nancial performance of the Group. However, the Group only uses such fi nancial instruments to cover risks arising 

from its business and activities (“hedging purposes”). 

a) Exchange rate risk 

The Group operates internationally, and as a result, is exposed to exchange rates risks. This risk arises from commercial transactions, 

recognition of assets and liabilities and net investments in external operations. 

The Group has signifi cant Sales and Service Rendering in countries outside the Euro zone, namely in US Dollars (USD). Group 

companies have carefully managed exchange risk cover, considering the operational margins in their business.Exchange risk cover 

is made from the proposal date in some cases or from the order date, until cash payment is received. In this way, not only are the 

majority of balance sheet assets and liability values covered but also future sales linked with proposals (considering an acceptable 

level of success) and orders. Accordingly cover can be for several years depending on how long the project or installations take, 

refl ecting the possible period over several years which the work of Group companies can take place. 

b) Liquidity risk 

The management of liquidity risk implies maintaining a suffi cient level of cash and bank deposits, the viability of fl oating debt 

through adequate credit facilities, and skill in liquidating market positions. In line with the business needs, the Group Treasury 

aims at maintaining the fl exibility of the fl oating debt, keeping credit lines available. 

c) Cash fl ow risks and fair value related to interest rates 

Since the Group does not have assets that earn signifi cant amounts of interest, profi ts and cash fl ows are relatively independent 

of changes to market interest rates. 

Interest rate risks of the Group come from long-term loans. Loans with variable rates of interest expose the Group to cash fl ow 

risks related to interest rates. 

The Group manages interest rate cash fl ow risks associated to the interest rate by transforming variable interest rates into swaps 

with fi xed interest rates or by establishing caps over the variable rate. In these transactions, the Group agrees to exchange with 

other parties at specifi ed intervals (mainly half-yearly), the difference between amounts at contracted fi xed interest rate and 

amounts at a variable interest rate. 

2.2 Accounting for financial instruments – derivatives and hedging 

Derivatives are initially recognised at fair value and subsequently readjusted to their fair value. The method for recognising changes 

in fair value depends on whether the derivative is defi ned as a hedge instrument and if so, the nature of the asset/liability to be 

covered. The group arranges certain derivatives as: (1) fair value cover of recognised assets and liabilities or of commitments (fair 

value cover); (2) cover of highly probable forecast transactions (cash fl ow hedging). 

For each transaction, the Group prepares documentation to justify the relationship between the hedge instruments and the related 

assets/liabilities covered, as well as the objective of risk management and the strategy for taking out cover. The Group also documents 

its evaluation, both at the start of the cover and on a continuous basis, as to whether the derivatives used for cover effectively 

compensate for fl uctuations in fair value or in the cash fl ows of the items covered. 

The fair value of derivatives used to take out cover is disclosed in note 8, as well as the movements that took place in Shareholders’ 

Funds. 

a) Fair value hedging 

Changes in the fair value of derivatives that are arranged and qualifi ed for fair value hedging are recognised in the profi t and 

loss account, together with changes to the fair value of the assets and liabilities covered (in the covered position) attributable to 

covered risk. 

16

) Cash fl ow hedging 

The effective part of the change in fair value of derivatives that are arranged and qualifi ed for cash fl ow hedging is recognised in 

shareholders’ funds. The gain or loss related to the ineffective part is immediately recognised in the profi t and loss account. 

As pertains cover strategies that use options, in accordance with IAS 39 and complying with the effi ciency test, the strategy value 

is split into the intrinsic value and the time value. 

The cumulative amounts in shareholders’ funds are reclassifi ed to profi t and loss in the same period in which the item covered 

generates gains and losses (for instance, when the covered sales forecast occurs). However, when the covered forecast transaction 

results in the recognition of a non-fi nancial asset (for example, stocks) or non-fi nancial liability, the previously deferred gains and 

losses in shareholders’ funds are transferred and included in the initial measurement of that asset or liability. 

When a hedge instrument expires or is sold, or when a hedging does not comply with the accounting and qualifi cation criteria, any 

cumulative gain or loss existing at that moment in shareholders’ funds, remains in shareholders’ funds and is recognised when 

the forecast transaction is fi nally refl ected in the profi t and loss account. When the expected occurrence of a forecast transaction 

is no longer highly probable, the cumulative gains or losses refl ected in shareholders’ funds are immediately transferred to profi t 

and loss. 

c) Non-qualifi ed derivatives for hedging purposes 

Certain derivatives do not comply with hedging accounting and qualifi cation criteria. Changes in fair value of these derivatives are 

immediately recognised in the profi t and loss account. 

2.3 Estimates of fair value 

The fair value of fi nancial instruments available on the current market (for instance publicly negotiated derivatives, negotiable 

instruments available for sale) is determined on the basis of quoted market prices at balance sheet date. The quoted market price 

used for fi nancial assets of the Group is the price received by shareholders on the current market; the quoted market price for 

fi nancial liabilities is the price paid on the current market. 

The fair value of fi nancial instruments not traded on the current market (for instance unquoted derivatives) is determined using 

enhancement techniques. The Group uses a variety of methods and reaches its conclusions based on market conditions at each 

balance sheet date. Quoted market prices or negotiation quotas for similar instruments are used for long-term debts. Other techniques, 

such as estimates of discounted cash fl ows, are used to determine the fair value of other fi nancial instruments. The fair 

value of interest rate swaps is calculated based on the present value of estimated future cash fl ows. The fair value of interest rate 

futures contracts is determined using market exchange rates at the balance sheet date. 

The nominal value less estimated credit adjustments of receivable and payable accounts is assumed to be close to their fair value. 

The fair value of fi nancial liabilities is estimated by updating future contractual cash fl ows at the current market interest rate available 

for similar fi nancial instruments. 

17 



C. Segment Information 

3. Reporting by activity segment 

Information by segments is presented for the geographical segments and businesses of the Group. The income, assets and liabilities 

of each segment correspond to those that are directly attributable to them as well as those that can be attributed on a 

reasonable basis. 

Business segment 

A business segment is a separately identifi able part of the Group, committed to supplying a specifi c product or service, and that 

is subject to different risks and opportunities than those of other business segments. 

As at 31 December 2008, the Group was organized on a worldwide basis into the following business segments: 

- SEN – Energy Solutions; 

- EES – Engineering, Environment and Services; 

- STL – Transport and Logistics; 

The information also includes a heading entitled “Various”, which groups together assets relating to corporate centres and investments 

in non-core Group business activities. 

Geographical segment 

A geographical segment is an individual area of the Group committed to providing products or services within a specifi c economic 

zone, and that is subject to different risks and opportunities than those of other economic zones. 

In addition to Portugal, the relevant geographic segments are those in countries or regions which the company has chosen as 

Efacec markets: 

- Spain - Latin America 

- Central Europe - United States 

- Maghreb - India 

- Southern Africa 

3.1 Information by business segment 

3.1.1 Turnover 

The split of turnover amongst the main activity areas on 31 December 2008 and 2007 was as follows: 

31.12.2008 

Energy 

Engineering, Environment 

and Services 

18 

Transport and 

Logistics 

Various Total 

Gross sales by segment 256,961,526 271,727,908 109,635,637 1,301,926 639,626,997 

Sales between segments 8,346,645 7,965,033 17,098,815 0 33,410,492 

Consolidated sales 248,614,881 263,762,875 92,536,822 1,301,926 606,216,504 

31 December 2007 

Gross sales by segment 192,111,063 191,893,051 84,511,060 876,431 469,391,605 

Sales between segments 7,732,517 6,313,672 15,022,315 0 29,068,504 

Consolidated sales 184,378,546 185,579,380 69,488,745 876,431 440,323,101 

3.1.2 Profit/Loss 

Profi t and Losses by business segment for the years ended 31 December 2008 and 31 December 2007 were as follows:

31.12.2008 

Energy 


and Services 

19 

Transport and 

Logistics 

Various Total 

Operating profi ts 25,331,386 12,844,472 4,840,335 1,603,836 44,620,028 

Net fi nancial costs (Note 21) -8,690,000 -1,458,574 -1,115,974 -3,098,846 -14,363,394 

Losses/Gains in associates and other 50,385 505,861 -1,965 81,663 635,943 

Earnings before taxes 16,691,770 11,891,758 3,722,396 -1,413,347 30,892,577 

Income Tax -2,978,646 -3,040,417 -410,527 261,635 -6,167,954 

Minority Interests 0 0 0 -587,641 -587,641 

Net profi t for the period 13,713,125 8,851,341 3,311,869 -1,739,354 24,136,981 


Operating profi ts 13,587,774 5,027,018 3,034,272 3,790,470 25,439,535 

Net fi nancial costs (Note 21) -2,311,304 -367,764 -283,364 -1,903,152 -4,865,583 

Losses/Gains in associates and other 94,251 729,509 98,029 189,394 1,111,182 

Earnings before taxes 11,370,722 5,388,763 2,848,937 2,076,712 21,685,135 

Income Tax -2,411,462 -1,379,710 380,037 -525,936 -3,937,072 

Minority Interests 0 0 0 -346,878 -346,878 

Net profi t for the period 8,959,260 4,009,053 3,228,974 1,203,897 17,401,185 

The transfers and transactions between segments take place under normal commercial terms and under conditions applicable to 

independent third parties. 

3.1.3 Other Information 

31.12.2008 

Energy 


and Services 

Transport and 

Logistics 

Various Total 

Assets 199,682,306 259,229,316 91,850,878 104,966,883 655,729,383 

Liabilities 142,531,169 215,878,015 66,181,948 151,815,915 576,407,047 

Investments (Note 4 and 5) 17,645,479 28,064,026 896,892 3,548,210 50,154,607 


Assets 155,696,138 147,954,859 71,441,982 43,533,788 418,626,766 

Liabilities 106,760,696 119,161,029 47,547,070 65,664,054 339,132,848 

Investments (Note 4 and 5) 14,362,545 11,879,651 1,326,734 3,691,191 31,260,120 

Segment assets mainly include tangible fi xed assets, intangible assets, stocks, derivatives for hedging of commercial transactions, 

accounts receivable and cash. Segment liabilities correspond to operational liabilities (including derivatives for commercial transactions 

hedging). Investments include additions to tangible and intangible fi xed assets, including goodwill (Note 4). 

3.2 Information by geographical segment 

Sales and Services Rendered are split based on the region in which the customer is located. In the case of Assets and realized 

Investment, the criteria is based on the location of Efacec local structures. 



D. Notes to the Balance Sheets as at 31 December 2008 and 31 December 2007 

4. Tangible fixed assets 

4.1 Movements that took place in the period 

Financial Year 2008 

Land and buildings 

Vehicles and equipment 

20 

Office equipment Other Total 

Opening balance 40,309,919 15,326,608 1,662,787 12,753,227 70,052,540 

Exchange rate differences -20,209 -161,088 -14,199 860,079 664,583 

Entries to consolidation perimeter 0 262 5,868 0 6,130 

Exits from the consolidation perimeter 0 0 0 0 0 

Revaluation 463,392 -163,017 -735 -175 299,464 

Increases 3,727,908 23,311,703 1,109,082 17,440,460 45,589,154 

Decreases 0 -169,507 -112 -89,685 -259,304 

Depreciation charges -2,297,711 -4,338,805 -807,786 -212,781 -7,657,083 

Adjustments 3,859,321 6,466,085 280,883 -10,831,395 -225,106 

Closing balance 46,042,621 40,272,241 2,235,787 19,919,729 108,470,378 

Cost or fair value 108,650,571 109,747,491 24,702,109 26,484,033 269,584,205 

Cumulative depreciation -62,607,950 -69,475,250 -22,466,323 -6,564,304 -161,113,827 

Net value 46,042,621 40,272,241 2,235,787 19,919,729 108,470,378 


Opening balance 41,244,338 14,229,064 2,140,615 3,146,464 60,760,481 

Exchange rate differences -100,730 20,953 -6,499 -167,419 -253,695 

Entries to consolidation perimeter 5,569 832,161 34,838 0 872,568 

Exits from the consolidation perimeter 0 0 0 0 0 

Revaluation -46,262 -5,473 -62 -528 -52,325 

Increases 1,412,018 3,787,236 676,391 11,092,956 16,968,601 

Decreases -239,230 -155,009 -11,723 -42,320 -448,282 

Depreciation charges -2,285,793 -3,973,102 -1,276,205 -312,352 -7,847,452 

Adjustments 320,009 590,777 105,430 -963,574 52,642 

Closing balance 40,309,919 15,326,608 1,662,787 12,753,227 70,052,540 

Cost or fair value 101,182,843 91,022,921 24,554,481 19,521,500 236,281,746 

Cumulative depreciation -60,872,925 -75,696,314 -22,891,694 -6,768,273 -166,229,206 

Net value 40,309,919 15,326,608 1,662,787 12,753,227 70,052,540 

From the increase in tangible fi xed assets highlight goes to the investments in Spain that amounted to 17.558 thousand euro, 

of which 16.480 pertain to the implementation of 2 photovoltaic stations. Investments in the United States represented 12.880 

thousand euro, pertaining mainly to the start of the construction of a transformer factory. In Portugal, the power transformer production 

line started in 2006 was concluded still with an investment of approximately 6.000 thousand Euro. 

Depreciations are net of recognised investment subsidies within the period, totalling 336.610 Euro. 

4.2 Revaluations 

Buildings and other tangible fi xed assets of the Group were re-valued on 1 January 2004, using the monetary revaluation coeffi 

cients as part of the transition to IFRS (IFRS 1). 

The land included in the company assets is booked as fair value. The value of the lands was subject to update on 31 December 

2008 based on an evaluation carried out by independent external consultants resulting in an enhancement of around 488 thousand 

Euro whose compensation was recognised in shareholder's fund following the deduction of the respective deferred tax.

If tangible assets were shown at historical cost, the values in the balance sheet would be: 

4.3 Leased tangible assets 

31.12.2008 31.12.2007 

Cost 170,11,810 132,499,495 

Cumulative depreciation -92,607,923 -86,545,405 

Net Value 77,503,887 45,954,090 

The line Tangible Assets includes the following amounts for leased assets: 

31.12.2008 31.12.2007 

Financial leases 1,418,149 195,712 

Cumulative depreciation -57,486 -44,944 

Net value 1,360,663 150,768 

The responsibilities relating to these contracts are refl ected in Liabilities in the line Suppliers and Other Creditors (Note 14). 

4.4 Guarantees 

No pledges or guarantees exist on any assets. 

5. Intangible assets and goodwill 



Goodwill R&D Other Total 

Opening balance 22,110,396 659,124 4,179,740 26,985,260 

Exchange rate differences -116,859 0 -159 -117,018 

Entries to consolidation perimeter 0 0 23 23 

Exits from the consolidation perimeter 0 0 0 0 

Revaluation 0 0 0 0 

Increases 3,720,744 418,682 426,030 4,565,455 

Decreases 0 0 0 0 

Depreciation of the period 0 -405,145 -646,489 -1,051,634 

Adjustments 0 158,846 -611,929 -453,083 

Closing balance 25,714,280 1,322,685 2,892,038 29,929,004 


Opening balance 9,730,101 992,933 3,229,273 13,952,307 

Exchange rate differences 0 0 0 0 



Revaluation 0 0 0 0 

Increases 12,380,295 82,786 1,828,438 14,291,519 

Decreases 0 0 0 0 

Depreciation of the period 0 -382,537 -833,887 -1,216,424 

Adjustments 0 1,942 -44,084 -42,142 

Closing balance 22,110,396 695,124 4,179,740 26,985,260 

5.2 Goodwill 

The breakdown of goodwill by subsidiary/associate company is as follows: 

21 



22 

31.12.2008 31.12.2007 

ATM - Assistência Total em Manutenção, SA 4,577,159 4,577,159 

Grupo TECH M5 3,549,415 3,549,415 

Engimais 1,971,508 1,971,508 

O&M Serviços, S.A. 207,628 207,628 

ENT - Empresa Nacional de Telecomunicações, SA (a) 204,736 204,736 

BCI - BRISA Conservação de Infra-estruturas, SA 124,211 124,211 

Águas da Figueira, SA 54,791 54,791 

Bauen Efacec, SA 33,454 33,454 

Efacec Moçambique, Lda. 697,116 697,116 

Efacec Energy Service, Ltda. 585,579 585,579 

Advanced Control Systems, Inc. 10,104,798 10,104,798 

Aura de Guijo de Coria, SL 1,325,943 0 

Aura de Agudo, SL 880,628 0 

Efacec Power Transformers Inc. 635,832 0 

Total 25,714,281 22,110,396 

(a) In 2006, a merger of the net assets of this subsidiary into EFACEC – Sistemas Electrónicos S.A took place. 

The variation noted in 2008 in the goodwill of Advanced Control Systems, Inc., acquired at the end of 2007 was the result of the 

readjustment of the value of shareholder's funds at purchase date resulting from the recalculation of current assets. The impairment 

tests carried out prove that the increase in goodwill value is not prejudicial to its recovery through future cash-fl ows. 

The variation noted in Efacec Energy Service, Ltda. results from the interest rate update of the Brazilian Real, the currency in which 

goodwill was recognised. 

The other variations pertain to the acquisitions in 2008 of the total share capital of the Aura de Agudo, SL and Aura de Guijo de 

Coria, SL, both with headquarters in Spain. In each case, the values booked are equal to the difference between the cost of acquisition, 

already paid or payment to be expected in a short-term, compared to the accounting value of assets and liabilities. In the 

above cases, there were no corrections to the related accounting values. Efacec Power Transformers, Inc. is a new company in the 

United States where costs with the creation of the company were booked as consolidation difference. 

Impairment tests were carried out to most companies justifying the goodwill value, based on the projections of the discounted 

future cash-fl ows having occurred no sort of value loss. In said tests the following assumptions were taken into account 

Indicators 

WACC 9.30% 

OT 5 years 3.53% 

Spreads 2.43% 

OT 10 years 4.39% 

risk premium 5.00% 

In tests carried out to companies located in countries considered of risk, the risk premium registered an average of 3%-increase. 

5.3 Corporate concentrations 

Aura de Agudo, SL and Aura de Guijo de Coria, SL 

Acquisition 

In July 2008, the Group acquired from private partners 2 companies with headquarters in Toledo, Spain, designated Aura de 

Agudo, SL and Aura de Guijo de Coria, SL. 

The acquired net assets and goodwill were as follows:

Aura de Agudo Aura de Guijo de Coria, SL 

Acquisition value 800,000 1,200,00 

Direct costs pertaining to acquisition 84,628 129,943 

Total acquisition value 884,628 1,326,943 

Fair value of acquired assets 4,000 4,000 

Goodwill 880,628 1,325,943 

The goodwill is attributed to the profi tability expected from the acquired business. In both companies the business falls into the 

area of Power Generation, on photovoltaic plants where no value loss is expected. 

Acquired assets and liabilities were as follows: 


Cash and cash equivalents 2,828 3,007 

Intangible assets 1,172 993 

Acquired net assets 4,000 4,000 

As at 31 December 2008, the amounts yet to be paid pertaining to the acquisitions were 125,000 Euro for Aura de Agudo and 

187,500 Euro for Aura de Guijo de Coria, values included in the line Other Creditors (Note 14). 

Effects of entry into consolidation perimeter in the Net Profit and Balance Sheet 

Following the acquisition by Efacec, these companies carried out important investments in the construction of photovoltaic plants 

whose effects will come into action as of 2009 through the sale of energy to a distributor. 

The acquisition effects of Aura de Agudo and of Aura de Guijo de Coria in the consolidated accounts are as follows: 

23 


Investments 6,593,024 9,886,596 

Total income 0 0 

Net profi t 

Assets and liabilities 

-3,211 -4,349 

Assets of the subsidiary as at 31.12.2008 7,659,103 12,804,278 

Goodwill 880,628 1,325,943 

Effect on consolidated Assets as at 31.12.2008 8,539,731 12,804,278 

Liabilities of the subsidiary as at 31.12.2008 1,647,244 2,469,753 

Effect on the consolidated net Assets 6,892,487 10,334,524 

6. Investments in group and associated companies 

This line refl ects the value of investments made in associated companies, adjusted at the balance sheet date using the equity 

method. It includes the value of subsidiary companies, when for justifi able reasons; they are excluded from the consolidation 

(Note 31.2), in which case they are valued at acquisition cost. The line shows the value of shareholdings at the date of the Balance 

Sheet and the value of supplementary capital and loans granted to the entities concerned (Note 27). The movements during the 

year were as follows: 



24 

31.12.2008 31.12.2007 

Opening balance 7,560,600 7,290,641 

Increase in shareholding 50,000 75,222 

Decrease in shareholdings 0 0 

Quota in Associate Profi t 629,591 1,086,098 

Other Movements in Equity of Associates -889,627 -725,389 

Exchange Rate Differences 15,321 -89,395 

Impairment Losses in Associates 0 0 

Loans granted 0 -76,577 

Closing Balance 7,365,885 7,560,600 

The amount booked in Increase in shareholdings refers to the participation in Efacec Maroc, a subsidiary set up at the end of 2008 

and not included in the consolidation for this fi nancial year (Note 31.2). 

The quota in profi t of associated companies refers mainly to S2M – Sociedade de Manutenção de Metropolitanos, SA (442.876 

Euro) and to EID – Empresa de Investigação e Desenvolvimento de Electrónica, SA (268.546 Euro). 

The line “Other movements in equity” includes 689.300 Euro for dividends distributed by the associate company S2M. On the other 

hand, as mentioned ahead, the integration method of Godrej Efacec (India) was changed in this same Note, so the shareholding 

value in said company totalling 269.920 Euro in December 2007, is no longer included in this line. 

Acquisition differences concerning shareholdings in O&M Services and in Águas da Figueira are shown in the line Goodwill (Note 

5.2). 

The shareholdings of the Group in the main associated companies, none of which are quoted on stock exchanges, are as follows: 

31.12.2008 Shareholding 

Investment 

Headquarters 

Assets 

Shareholders’ 

Funds 

Total Income 

Net Profit % Amount 

EID - Emp. Invest. e Desenv. Electrónica, S.A. Lisbon 24,923,419 10,903,557 21,017,306 1,074,186 25,0 2,725,889 

Águas da Figueira, S.A. Fig. da Foz 69,231,059 2,404,814 11,478,554 -934,418 20.0 480,963 

S2M - Soc. de Manut. de Metropolitanos, S.A. Matosinhos 4,531,300 1,730,942 8.080.485 1.107.190 40.0 692,377 

O&M Serviços S.A. Mortágua 7,028,925 997,035 12,249,073 136,667 40.0 398,814 

SESCO EFACEC Sdn. Bhd. Malaysia 5,925,641 3,789,241 2,754,112 143,139 35.2 1,333,813 

Liaoyang EFACEC Electrical Equip. Co (a) (b) China 28,043,444 2,146,955 n.a. n.a. 36.3 778,915 

31 December 2007 Shareholding 

Investment 

Headquarters 

Assets 

Shareholders’ 

Funds 

Total Income 

Net Profit % Amount 

EID - Emp. Invest. e Desenv. Electrónica, S.A. Lisbon 31,279,177 9,825,135 20,515,621 844,837 25.0 2,456,284 

Águas da Figueira, S.A. Fig. da Foz 71,313,031 2,805,354 11,650,341 -136,223 20.0 561,071 

S2M - Soc. de Manut. de Metropolitanos, S.A. Matosinhos 5,414,111 2,347,001 7,919,534 1,723,249 40.0 938,800 

O&M Serviços S.A. Mortágua 7,731,346 899,199 10,278,148 64,109 40.0 359,680 

Godrej EFACEC Automation & Robotics, Ltd. India 954,406 539,840 2,607,130 185,426 50.0 269,920 

SESCO EFACEC Sdn. Bhd. Malaysia 5,824,264 3,569,776 3,758,229 268,400 35.2 1,256,561 

Liaoyang EFACEC Electrical Equip. Co (a) (b) China 28,130,554 2,153,624 n.a. n.a. 36.3 781,335 

(a) Up to 31 December 2004, the equity method was not considered for use for this associate company given the low probability of 

transfer of funds, and for which an impairment loss of 2,259,554 Euro was booked, given that future cash fl ow projections indicate 

an overall loss. In 2004, 13.7% of the share capital of the company was acquired, so that the group held a total of around 36.28%, 

and the Equity Method was used. This acquisition generated goodwill of 200,000 Euro, which was entirely depreciated in 2004. 

(b) Since up to date accounts were not available, the numbers for this company refer to those as at 30 November 2006, with exchange 

rates being updated as at date of fi nancial statements.

(c) As at 31 December 2007, the Group owned 50% of Efacec Moçambique and consolidated using the equity method. In 2008 

the proportional method was applied as it was considered that the line to line global consolidation of assets/liabilities and of profi t 

components refl ects in a better way the interests of Efacec in this joint-venture. 

7. Financial investments in other companies 

The breakdown of this line is as follows: 

31.12.2008 31.12.2007 

Shareholding % Shareholding Shareholding % Shareholding 

Parts of share capital 

Portugal Space, S.A. (a) 325,000 16.25% 325,000 16.25% 

MARL Energia - Central Fotovoltáica, SA 163,158 10.00% 0 

Others 19,416 19,416 

507,574 344,416 

Financing Loans 359,259 0 

Total investment 866,833 344,416 

Impairment (a) -331,898 -329,933 

Net investment 534,934 14,483 

(a) In view of the fi nancial situation of this holding, an impairment loss was booked in the year for the value of the shareholding 

(325,000 Euro), as well as for the loan granted in the line “Debtors and Deferred Costs” (156,271 Euro). 

8. Derivatives 

In relation to fi nancial risk management described in Note 2, the evaluation of fi nancial instruments as at 31 December 2008 and 

31 December 2007 was as follows: 

Exchange rate risk 

Exchange rate risk hedging is done through options, of which at the balance sheet date 67 million USD and 500 million GBP were 

active in the Group, on which an upward adjustment of -1,306,067 Euro was made to refl ect fair value. 

Interest rate risk 

As at 31 December 2008, EFACEC featured a portfolio of interest rate derivatives totalling 87 million Euro for BEI loans and 

Commercial paper (Note 15), whose market valuation was negative by 2,347,029 Euro. 

“Commodity” price (copper) 

At the end of the year, the Group had options for copper price hedging on 3,750 tons required for consumption in 2009 and 2010, 

the market valuation of which was negative by the sum of 7,925,481 Euro. 

The impact of these valuations as at 31 December 2008 and 2007 can be summarised as follows: 

31.12.2008 31.12.2007 

Assets Liabilities Assets Liabilities 

Exchange rate option - Cash fl ow hedging 0 1,306,067 1,062,540 0 

Financing options - Cash fl ow hedging 0 2,347,029 345,574 0 

Copper options - Cash fl ow hedging 0 7,925,481 0 117,426 

Total 0 11,578,577 1,408,114 117,426 

* Non-current 0 2,347,029 345,574 0 

*Current 0 9,231,548 1,062,540 117,426 

The hedging instruments are booked in equity or directly in profi t, as described in Note 2.2. 

The movement in the line Financial Instruments Reserves was the result of the change in fair value between the various reporting 

periods, less the related deferred tax assets/liabilities (note 16). 

25 



9. Customers and accrued income 

The breakdown of this line as at 31 December 2008 and 31 December 2007 was as follows: 

26 

31.12.2008 31.12.2007 

Customers - Current 176,939,488 150,185,865 

Customers - Related parties (Note 27) 519,229 1,053,310 

Customers - Bills Receivable 118,875 429,115 

Customers - Doubtful Debts 10,036,035 8,351,376 

Accrued income - multi-year contracts (Note 29 89,828,258 57,936,793 

277,441,885 217,956,459 

Provision for customer accounts impairment -9,203,255 -8,422,008 

Accounts Receivable from Customers - Net 268,238,630 209,534,451 

Accrued Income - not covered by IFRS 7 10,806,608 8,697,395 

Total 279,045,239 218,231,846 

* Non-current 0 0 

*Current 279,045,239 218,231,846 

The fair value of receivables is the same as its accounting value. There is no concentration of credit risk pertaining to the accounts 

receivable from customers and other debtors as the Group has a high number of world-wide customers. As at 31 December 2008 

and 2007 the accounts receivable from customers, including Profi t Increase in multi-year contracts, presented the following seniority 

structure, bearing in mind the maturity of open balances: 

31.12.2008 31.12.2007 

Balances not due 

Balances due 

170,872,447 151,884,915 

Up to 90 days 62,564,236 25,617,407 

From 90 to 360 days 28,229,627 20,438,745 

Over 360 days 15,775,576 20,015,392 

277,441,885 217,956,459 

Impairment -9,203,255 -8,422,008 

Net Debtors Balance 268,238,630 209,534,451 

During 2008, the Group booked 802,171 Euro for impairment adjustments on customer receivables while reversal of provisions 

totalled 26,978 Euro in the same period. It is the company’s belief that the impairment losses estimated on accounts receivable 

are properly refl ected in the accounts and refl ect the real risk of loss. In spite of the fact that other sums exist with signifi cant 

delays in payment, provisions were not taken for these, since situations of impairment were not found to exist. The amounts in 

Income Accruals included in this line relate to income for ongoing projects and work in progress, for which the stage of completion 

is greater than that of invoicing (Note 1.10 and 29). 

10. Other debtors and deferred costs 


31.12.2008 31.12.2007 

Other Debtors 19,868,948 12,534,520 

- Impairment losses -405,670 -405,670 

Accounts receivable from other Debtors - net 19,463,278 12,128,850 

Accounts receivable from related parties 1,226,88 1,178,637 

State and other public entities 7,966,776 14,247,200 

Deferred costs 2,559,012 2,367,561 

Total 31,215,954 29,922,248 

*Non-current 27,000 27,000 

*Current 31,188,954 29,895,248

The lines included in the active balances with State and other Public Entities as at 31 December 2008 and 31 December 2007 

registered the following breakdown: 

31.12.2008 31.12.2007 

Income Tax 0 1,849,185 

Value added tax to recover 6,039,066 12,398,015 

Other taxes to recover 1,927,710 0 

27 

7,966,776 14,247,200 

The legislation change that occurred in 2007 concerning Value Added Tax in relation to construction contracts had a signifi cant 

impact on some Group companies. This change means the continuous existence of VAT credit balances with the State of substantial 

amounts, which are periodically subject to recovery processes. The line Other Debtors is made up of balances with entities of 

various kinds, which overall are considered acceptable taking into account the operational activities of the Group. 

11. Stocks 

31.12.2008 31.12.2007 

Raw materials 20,605,179 12,850,082 

Merchandise 2,816,071 1,484,131 

Work in progress 30,918,869 26,281,915 

Finished goods 5,932,612 6,609,368 

60,272,731 47,225,497 

The line Work in Progress includes work relating to multi-year contracts (Note 1.10 and 29). 

Buildings held for sale by the real estate company GEMP for the amount of 931,196 Euro (1,242,908 Euro at the end of 2007) 

were shown in the line Assets Held for Sale. 

12. Monetary instruments 

31.12.2008 31.12.2007 

Cash and cash equivalents 

Cash and Sight Deposits 17,249,589 10,213,594 

Time Deposits 58,936,577 0 

Short-term cash investments 34,340,246 1,526,260 

Other Financial Investments 

110,526,411 11,739,854 

Captive deposits 16,992,032 0 

13. Share Capital 

The authorised capital is made up of 41,641,416 ordinary registered shares each having a par value of 1 Euro, and is entirely paid 

up. The company does not hold any own shares. 



14. Suppliers, other creditors and accruals 

The breakdown of this line is as follows: 

28 

31.12.2008 31.12.2007 

Suppliers - Current account 88,246,600 72,418,135 

Suppliers - related parties (Note 27) 2,965,770 2,101,381 

Suppliers - bills payable 0 0 

Suppliers,invoices received and being checked 12,003,948 5,269,094 

103,216,319 79,788,610 

Fixed asset suppliers, Current account 1,649,404 2,598,015 

Total 104,865,722 82,386,625 

Non-current 1,051,246 2,598,015 

Current 103,814,476 79,788,610 

31.12.2008 31.12.2007 

State and other public entities 5,562,533 6,700,951 

Other creditors - related parties 1,141,357 879,818 

Other creditors - various 21,640,286 11,015,417 

Accruals: 21,952,737 11,933,052 

Accruals - costs for work in progress 8,322,483 524,837 

Accruals - remuneration to pay 9,908,650 8,542,833 

Accruals - interest to pay 578,082 1,029,176 

Accruals - insurance to pay 217,713 320,852 

Accruals - royalties to pay 154,729 119,776 

Accruals - other 2,771,080 1,395,578 

Total 50,296,912 30,529,238 

*Non-current 3,958,939 3,477,160 

*Current 46,337,973 27,052,078 

The non-current part of Other Creditors includes the amount of 3,669,818 Euro corresponding to the discounted value of future 

payments in dollars within the scope of the acquisition of Advanced Control Systems, Inc. On 31 December 2008 the respective 

update was carried out resulting in a time effect of 297,603 Euro, and an unfavourable interest rate effect of 184,176 Euro, both 

booked under fi nancial cost for the year. 

The current amount due to Suppliers, for raw-materials and other services, is almost entirely due within 90 days, which refl ects 

the normal conditions negotiated with the company’s suppliers. As pertains Suppliers of fi xed assets, the value of 1,019,395 refers 

to a leasing contract for equipment which will be written off on a monthly basis across an 8-year period. 

31.12.2008 31.12.2007 

Suppliers 

Suppliers to pay - Current 

To be paid within 90 days 103,202,647 79,778,480 

To be paid in over 90 days 13,672 10,130 

Suppliers balance 103,216,319 79,788,610 

31.12.2008 31.12.2007 

Fixed Assets Suppliers 

Suppliers to pay - Non-current 

To be paid within 90 days 630,009 2,598,015 

To be paid in over 90 days 1,019,395 0 

Fixed assets suppliers balance 1,649,404 2,598,015 

The credit balances with State and Other Public Entities as at 31 December 2008 and 31 December 2007 were made up as follows:

31.12.2008 31.12.2007 

Income Tax 1,659,590 0 

Value added tax - to pay 0 2,931,110 

Social security contributions 2,566,419 2,249,188 

Personal income tax 1,336,524 1,167,584 

Others 0 353,068 

29 

5,562,533 6,700,951 

In 2008, debt and credit balances with the State were compensated between Assets and Liabilities, respecting the equivalent 

natures of the taxes. For comparison purposes, if the compensation was not carried out, the VAT to be paid would be 3,129,968 

Euro 

15. Debt to Credit Institutions 

As at 31 December 2008 and 31 December 2007, loans and bank overdrafts, their average annual interest rates and other conditions 

were as follows: 

31.12.2008 31.12.2007 

Non-current 

Bank loans 22,802,328 22,500,000 

Commercial paper 77,500,00 40,000,000 

Reimbursable Subsidies 3,409,542 1,840,649 

Other loans 2,792,928 0 

Current 

104,504,798 64,340,649 

Bank overdrafts 34,631,407 15,533,256 

Bank loans 13,404,339 7,594,589 


Reimbursable Subsidies 659,622 389,280 

Other loans 0 3,302,301 

136,195,368 46,819,426 

Total loans 240,700,165 111,160,075 

Bank financing 

The Group has a long-term loan from 16 November 2004 with the European Investment Bank that as at 31 December 2008, registered 

a value of 22,500,000 Euro, of which 4,500,000 Euro booked in current liabilities. The loan features half-yearly interest rates 

indexed to Euribor rate, plus a maximum spread of 0.13%. The fi rst capital amortisation was on 15 June 2008 and the others will 

be made on a yearly basis until 2013. 

Commercial paper 

On 8 July 2005, a Commercial Paper programme was agreed with a bank trade union, involving fi ve banks, up to a maximum value 

of 40,000,000 Euro. The programme has a contract period of 5 years with a requirement in excess of one year. The companies 

included in the Programme can issue Commercial Paper by direct placement or by auction. The issues underway are due on 12 

January 2009. In November 2006, a second Commercial Paper programme was also agreed with the Santander Totta Bank to a 

maximum value of 7,500,000 Euro. The programme has a contract period of 5 years with annual renewals. EFACEC Capital can 

issue Commercial Paper by direct placement. The current issue falls due on 13 July 2009. In November 2007, a Commercial Paper 

Programme was also agreed with the Fortis Bank S.A. to a maximum value of 12,500,000 Euro. The programme has a contract 

period of 5 years, which can be extended for periods of time to be agreed between the parties. The current issue falls due on 13 

November 2009. In April 2008, a Commercial Paper Programme was also agreed with the Santander Totta Bank to a maximum 

value of 20,000,000 Euro. This programme has a contract period of 3 years, and its reimbursement is made through half-yearly 

and consecutive amortisations to the value of 5,000,000 Euro, as of the 2nd year of the Programme. The current issue falls due on 

15 October 2009. In June 2008, a Commercial Paper Programme was also agreed with the Caixa Geral de Depósitos to a maximum 

value of 30,000,000 Euro. This programme has a contract period of 3 years with one year exemption period and the reimbursement 

is carried out through half-yearly amortisations to the value of 7,500,000 €. There are two simultaneous issues, one of 10,000,000 

€ which falls due on 21 April 2009 and another to the value of 20.000.000 € which falls due on 2 February 2009. In August 2008 a 

Commercial paper programme was agreed upon with BPI to a maximum value of 15,000,000 Euro. The programme has a contract 

period of 6 months without renewal. The current issue falls due on 30 January 2009. In September 2008, a Commercial Paper 

Programme was also agreed with BARCLAYS to a maximum value of 10,000,000 Euro. This programme comprises Efacec Group 



Companies and has period of 5 years with yearly renewals. Efacec Capital SGPS, SA carried out an issue for the total Programme 

that falls due on 8 April 2009. In October 2008 a Commercial Paper Programme was agreed upon with the Espírito Santo Bank to 

a maximum value of 30,000,000 Euro. This programme comprises Efacec Group Companies and has period of 5 years with yearly 

renewals. Efacec Capital SGPS, SA carried out an issue for the total Programme that falls due on 5 May 2009. 

Reimbursable subsidies 

These arise from contracts for investment projects fi nanced by European Union and Portuguese funds under the POE scheme. As at 

31 December 2008, this line included 4,069,163 Euro received from AICEP – Agência para o Investimento e Comércio Externo de 

Portugal, by the subsidiary Efacec Energia between 2005 and 2008, pertaining to the three investment contracts. The reimbursement 

plans are half-yearly and go until 2015. The due part is less than a year away to the value of 659,622 Euro. 

Bank overdrafts 

Bank overdrafts involve the use of current credit accounts according to limits and conditions previously negotiated with fi nancial 

institutions and without defi ned reimbursement periods, although they are assumed to be of short duration. The average rate of 

these credits is indexed to Euribor plus an average spread of 0.96%. 

Other loans 

The line Other Non-Current Loans refers to a fi nancing operation celebrated with the Santander Totta Bank within the scope of the 

MAIS Programme, for investment projects carried out by the company which can be assigned community funds. 

Debt Maturity 

The maturity dates of the loans as at 31 December 2008 are as follows: 

Non-current5 

Denomination of Loans 

< 1 year 1-5 years > 5 years Total 

Bank loans 0 20,802,328 0 20,802,328 

Commercial paper 0 77,500,000 0 77,500,00 

Reimbursable Subsidies 0 3,321,094 88,448 3,409,542 

Other loans 0 2,792,928 0 2,792,928 

Total 

Current 

0 104,416,350 88,448 104,504,798 

Bank loans 34,631,407 0 0 34,631,407 

Commercial paper 13,404,339 0 0 13,404,339 

Bank overdrafts 87,500,00 0 0 87,500,00 

Reimbursable Subsidies 659,622 0 0 659,622 

Other loans 0 0 0 0 

136,195,368 0 0 136,195,368 

Total loans 136,195,368 104,416,350 88,448 240,700,165 

The accounting value of Group loans is denominated in the following currencies: 

31.12.2008 31.12.2007 

Euro 229,264,998 105,532,281 

US Dollar 8,172,888 3,906,325 

New Metical 2,961,343 1,398,791 

Argentinian Peso 300,937 322,679 

30 

240,700,166 111,160,075 

Debt contracted by Group companies based in Portugal is wholly denominated in Euro. The other fi gures relate to fi nancing contracted 

locally by international companies. 

Effective interest rates 

The effective interest rates as at the balance sheet date were as follows:

31.12.2008 31.12.2007 


EUR 4.53% 4.91% 

USD 1.94% 13.23% 

MZN 15.05% 16.25% 

ARS 20.20% 13.94% 


EUR 5.45% 4.74% 

Medium/Long-Term Loans 

EUR 3.50% 4.92% 

USD 4.59% 

Reimbursable Subsidies 

EUR 3.67% 4.62% 

The above currencies correspond to those in which loans are denominated, and can vary from time to time from the indices used (in 

the case of the USD, in 2007). 

The fair value of current and non-current Debt to Credit Institutions is close to the balance sheet value due to the fact that the 

contracted interest rate is the same as the market rate, given the fi nancing conditions in those countries in which Efacec operates. 


During 2008, the net cash outfl ow of interest was 6,210 thousand Euro (Note 21). 

Due to the growth of the Group and accrued fi nancing needs, the gross fi nancial debt as at 31 December 2008 totalled 240,700 

thousand Euro. On the other hand, interest rates tended to rise until the end of the third quarter. As at 31 December 2008, the 

overall rate of global EFACEC fi nancing increased to 5.17%% (compared to 4.81% in 2007), involving several currencies, countries 

and fi nancing methods. Statistically, as at 31 December 2008, this rate meant an annual gross cost of 12,437 thousand Euro. On 

the assumption that the value of debt as of that date will continue, the sensitivity to changes in interest rates can be calculated 

as follows: 

Tx Final Annual Cost Impact 

As at December 2008 EUR 

Reference fi gures (Base: 31.Dec.2008) 

Sensitivity 

5.17% 12,437,164 

-If fi nal rate increases 1% 6.17% 14,844,166 2,407,002 

-If fi nal rate decreases 1% 4.17% 10,030,163 -2,407,002 

As at December 2007 EUR 

Reference fi gures (Base: 31.Dec.2008) 

Sensitivity 

4.81% 5,341,447 

-If fi nal rate increases 1% 5.81% 6,453,037 1,111,590 

-If fi nal rate decreases 1% 3.81% 4,229,857 -1,111,590 

If there were a worsening of the overall average rate of the Euro in 1%, the annual interest cost would be 14,844 thousand Euro. If 

on the other hand there were a relief in overall interest rates of 1%, the annual interest rate cost would be 10,030 thousand Euro. 

The gross impact would be +/- 2,407 thousand Euro (+/- 1,112 thousand Euro in 2007). As pertains to the other currencies used 

in Group company fi nancing, the values are not too relevant: for debt values at Balance date, the sensitivity to variations of the 

USD was +/- 54 thousand Euro, and in the case of the Metical (Mozambique) it was +/- 29 thousand Euro. The Group manages 

the interest rate risk through derivatives contracted on its medium and long-term fi nancing, thus enabling the impact of interest 

changes to be mitigated (Note 2.1, 2.2 and 8). 

Unused Credit Lines 

The Group also has the following credit lines that have not yet been used: 

31 



At variable rates 

32 

31.12.2008 31.12.2007 

Due within one year 13,876,047 35,109,890 

Due over one year 0 12,500,000 

13,876,047 47,609,890 

The credit lines due up to one year are automatically renewed on an annual basis. 

The amount presented in 2007 due over 1 year referred to a Commercial Paper Programme agreed upon at the end of the year, 

whose issues effectively occurred in 2008. 

16. Deferred taxes 

The deferred tax assets and liabilities are as follows: 

31.12.2008 31.12.2007 

Deferred tax assets: 

Deferred tax assets recoverable after 12 months 10,445,617 4,243,415 

Deferred tax assets recoverable within 12 months 0 0 

Deferred tax liabilities: 

10,445,617 4,243,415 

Deferred tax liabilities recoverable after 12 months 5,691,747 6,342,351 

Deferred tax liabilities recoverable within 12 months 0 0 

5,691,747 6,342,351 

4,753,80 -2,098,936 

Deferred tax assets 

Deferred tax assets were split as follows: 

Impairment 

losses 

invest- 

Impairment 

losses 

works 

Impairment 

losses 

receivables/other 

Tax losses Options 

Adjust. 

IFRS 

Other Total 

As at 01.01.2007 564,025 519,934 2,296,580 42,607 53,963 48,124 1,634,031 5,159,264 

Carried to profi t and loss -295 -90,852 189,111 -40,608 144,534 5,728 -1,067,994 -860,376 

Entries to consolidation perim- 0 0 0 0 0 125,086 0 125,086 

Exchange rate differences 0 0 0 0 0 -13,179 0 -13,179 

Carried to equity 0 0 0 0 -167,379 0 0 -167,379 

Exits from the consolidation 0 0 0 0 0 0 0 0 

Other variations -41,411 -130,175 171,389 0 0 -13,452 13,649 0 

As at 31.12.2007 522,319 298,907 2,657,080 1,999 31,118 152,307 579,686 4,243,415 

Carried to profi t and loss 0 238,500 -20,113 423,494 1,536,523 -2,209 2,026,802 4,202,997 

Entries to consolidation perim- 0 0 0 0 0 0 7,469 7,469 

Exchange rate differences 0 0 0 59,408 0 -154 -810 58,444 

Carried to equity 0 0 0 0 1,500,682 0 0 1,500,682 

Exits from the consolidation 0 0 0 0 0 0 0 0 

Other variations 0 0 0 585,763 0 -149,779 -3,374 432,610 

As at 31.12.2008 522,319 537,407 2,636,967 1,070,663 3,068,323 165 2,609,773 10,445,617 

The deferred tax assets for impairment losses will be carried to profi t and loss proportionately to the use of the related provisions. 

The deferred tax assets concerning impairment losses for investments are for shareholdings in Liaoyang EFACEC Electric Equipment 

Co Ltd (Note 6) and in Portugal Space (Note 7). The deferred tax asset for tax losses refers mainly to the subsidiary Advanced 

Control Systems, a company acquired by the Group in 2007. Deferred tax assets on tax losses are recognised depending on the 

probability of taking advantage of the related tax benefi t through future taxable profi ts. The line "Others" includes deferred tax 

assets pertaining to the tax benefi ts for research and development (within the scope of SIFIDE) carried on to the value of 2,114 

thousand Euro.

Deferred tax liabilities 

The line Deferred Tax Liabilities is made up as follows: 

Revaluation (Note 1.5) Options (Note 8) Other Total 

As at 01.01.2007 5,558,475 578,987 831,016 6,968,478 

Carried to profi t and loss -204,693 59,673 -215,767 -360,786 


Exchange rate differences 0 0 0 0 

Carried to equity 0 -265,340 0 -265,340 


As at 31.12.2007 5,353,781 373,320 615,249 6,342,351 

Carried to profi t and loss -208,737 -79,320 -174,580 -462,637 

Entries to consolidation perimeter 0 0 6,530 6,530 

Exchange rate differences 0 0 -733 -733 

Carried to equity 104,200 -294,000 0 -189,800 


Other variations 0 0 -3,963 -3,963 

As at 31.12.2008 5,249,244 0 442,503 5,691,747 

The amount for revaluation of tangible assets refers to a free revaluation done in 2005, and is carried to profi t and loss through 

annual depreciation; the amount booked to shareholders’ funds refers to the line “Land” that was subject to revaluation at the end 

of 2008 (Note 4.2), entering the respective deferred tax liabilities. 

The line "Others" relates mainly to deferred tax liabilities concerning ATM and BCI maintenance contracts totalling 440,669 Euro. 

17. Provisions for risks and charges 

Pensions 

Financial shareholdings 

33 

Other risks and 

charges 

As at 01.01.2007 

Carried to profi t and loss: 

534,003 661,018 5,838,348 7,033,369 

- Additional provisions 123,581 0 3,045,028 3,168,609 

- Reversal of provisions -59,324 0 -2,469,667 -2,528,991 

Variations in the consolidation perimeter 0 -661,018 0 -661,018 

Exchange rate differences 0 0 -7,871 -7,871 

As at 31.12.2007 598,260 0 6,405,837 7,004,097 


- Additional provisions 96,534 0 3,167,288 3,263,821 

- Reversal of provisions -63,764 0 -1,376,719 -1,440,483 

Variations in the consolidation perimeter 0 0 24,531 24,531 

Exchange rate differences 0 0 -7,648 -7,648 

Other variations 0 0 -139,274 -139,274 

As at 31.12.2008 631,030 0 8,074,015 8,705,045 

There is no environmental contingent liability. 

Other risks and charges 

This line includes mainly provisions for amounts to receive from insurance companies, penalties, repairs and negative variances 

on works in progress. The additional provisions of the period mainly relate to variances on work projects in the subsidiaries Efacec 

Energia and Efacec Ambiente. 

These amounts relate to situations which are being constantly analysed by the management of the various companies as to 

EFACEC’s responsibility to customers, and where an unfavourable outcome seems likely during the accounting period. 

Over the last few fi nancial years, the Group has incurred costs of after sales service and maintenance. These costs have been 

analysed, and if they are signifi cant, have been subject to provisions being set up for future losses.In this way the future potential 

commitments of the Group are appropriately presented. 

Total 



The amount shown as a reduction in provisions corresponds to the amount reversed out of the provision account as the related 

costs are recognised, or when the situation for which the provisions was set up, no longer exists. 

18. Deferred income 

31.12.2008 31.12.2007 

Investment subsidies 2,356,446 1,722,010 

Deferred invoicing 142,318,420 91,199,315 

Other 1,596,367 1,571,711 

34 

146,271,233 94,493,036 

The timetable of invoicing to customers is not strictly tied to the degree of completion of the related orders. The line Deferred 

Invoicing thus includes invoices issued but not yet recognized in terms of the stage of completion of the orders (Notes 1.10 and 

29). 

19. Minority Interests 

As at 31 December 2008 and 31 December 2007, the breakdown of minority interests was as follows: 

Min. Int.% 31.12.2008 31.12.2007 

Efacec Serviços de Manutenção e Assistência, S.A. 19.9 1,971,068 1,732,184 

Efacec Investimentos e Concessões SGPS, S.A. 25.0 70,630 75,301 

Efacec International Financing SGPS, S.A. 45.0 578,215 571,874 

Bauen Efacec, S.A. 23.3 392,381 279,311 

Efacec Energy Service, Lda. 33.3 378,187 238,409 

Efacec Contracting Central Europe Gmbh 15.0 -47,238 0 

SVEP 8.0 30,609 27,522 

Other 12,596 12,335 

3,386,358 2,936,936 

E. Notes to the Profit and Loss Account by nature for the years ended 31 December 

2008 and 31 December 2007 

20. Third Party Supplies and Services 

During the years ended 31 December 2008 and 31 December 2007, the main third party supplies and services were as follows: 

31.12.2008 31.12.2007 

Subcontracts 65,852,448 64,376,875 

Specialised work 33,792,963 25,291,042 

Goods transport 12,726,385 8,065,182 

Travel expenses and Accommodation 11,294,161 8,698,572 

Leasing and rentals 7,189,205 4,912,026 

Repairs and maintenance 4,452,308 3,841,323 

Tools and utensils for quick rescue 3,248,937 2,498,360 

Fuel 3,037,604 1,435,690 

Insurance 2,940,851 2,457,174 

Advertising and publicity 2,183,621 1,964,027 

Communications 2,173,558 1,769,132 

Electricity 2,158,399 1,223,658 

Fees 1,937,651 1,058,324 

Cleaning, Hygiene and Comfort 1,004,880 971,171 

Other supplies and services 11,150,992 6,449,736 

165,143,963 135,012,292 

Given the business activity of the group, there are no variances that merit special comment. Some signifi cant increase in percentage 

refl ects and accompany the Group's business growth.

21. Financial costs - net 

22. Income Tax 

31.12.2008 31.12.2007 

Interest payable: 

Bank loans (Note 15) 6,622,123 4,291,270 

35 

6,622,337 4,291,270 

Net foreign exchange gains /losses 

Gains/losses of fair value on fi nancial instruments: 

Transfer from Shareholders’ funds (Note 8): 

6,381,337 -57,834 

Foreign exchange options: Cash fl ow hedging 680,293 344,278 


14,363,394 4,865,583 

31.12.2008 31.12.2007 

Current tax 10,367,592 3,540,141 

Deferred tax (note 16) -4,665,634 499,589 

Tax estimate 5,701,958 4,039,730 

Tax from previous years 465,996 -102,658 

The reconciliation of consolidated corporation tax is as follows: 

23. Profit per share 

6,167,954 3,937,072 

31,12,2008 31,12,2007 

Profi ts before Tax 30,892,576 21,685,135 

Tax rate 26.50% 26.50% 

Tax at rate of 26.5% 8,186,533 5,746,561 

Tax rate difference of foreign subsidiaries 

Permanent differences 

1,331,414 -32,127 

Costs not accepted fi scally 814,865 462,051 

Income not subject to tax 

Impairment losses of customers 

-425,632 141,842 

Consolidation adjustments -166,842 -287,816 

Deducted R&D tax credit not deferred in 2007 -1,945,473 -1,924,250 

R&D tax credit to carry -2,113,991 0 

Other 21,084 -66,530 

Income tax for the period 5,701,958 4,039,730 

Effective tax rate 18.46% 18.63% 

Basic 

The basic profi t per share is calculated by dividing shareholders’ profi t by the average weighted number of ordinary shares issued 

during the year, excluding possible own shares acquired by the company (Note 13). 

31.12.2008 31.12.2007 

Profi t attributable to shareholders 24,136,981 17,401,185 

Average weighted number of ordinary shares issued 41,641,416 41,641,416 

Basic profi t per share (euro per share) 0.58 0.42 

Diluted 

The diluted profi t per share is calculated adjusting the average weighted number of shares in circulation by including the impact 

of the conversion of all potentially diluting ordinary shares. In view of the fact that there are neither options nor any convertible 

obligation on shares, the diluted profi t per share is equal to the basic profi t per share. 



24. Dividends per share 

The dividend distribution of Efacec Capital SGPS, for 2008 and 2007, including anticipated distributions of profi t was as follows: 

Dividends paid 

36 

31.12.2008 31.12.2007 

Pertaining to fi nancial year 2006 7,537,096 

Pertaining to fi nancial year 2007 13,221,000 12,216,00 


Total 19,255,000 19,753,096 


Dividends per share (euro per share) 0.46 0.47 

The amount of dividends for minorities was 225,642 Euro (163,674 Euro in 2007), of which 218,842 Euro pertain to the subsidiary 

Efacec Serviços de Manutenção e Assistência, SA and 6,800 Euro were paid by SVEP – Segurança e Vigilância Electrónica de 

Pessoas, Lda.

F. Other notes 

25. Contingencies 

The Group has contingent liabilities for bank guarantees and other contingencies related to its business. It is not believed that any 

signifi cant liabilities will arise from the contingent liabilities. 

37 

31.12.2008 31.12.2007 

Bank bills and other discounted securities 59,212 289,697 

Guarantees and performance bonds 377,143,814 217,140,025 

377,203,026 217,429,722 

Bank guarantees are nearly totally connected to projects and orders in which the Group is involved and the customers feature as 

benefi ciaries. The solid increase noted refl ects the growth of the commercial portfolio with special focus on the South American 

countries. 

26. Commitments 

26.1 Commitments for investments 

No materially relevant commitments made by the Group exist to acquire tangible or intangible fi xed assets. 

26.2 Commitments for operational leases, where the Group is lessee 

The Group leases a number of vehicles through irrevocable leasing contracts. The contracts have various lease periods, readjustment 

clauses and renewal rights. At the date of the Balance Sheet, the Group continued to have Long-Term Rental contracts 

(“renting”) considered as operational leases, for which future rental payments due totalled 4,010,182 Euro, with the following 

maturity dates: 

31.12.2008 31.12.2007 

Within 1 year 1,662,906 1,580,054 

Between 1 and 5 years 2,246,624 2,322,998 

Over 5 years 0 0 

27. Related party transactions/balances 

3,909,530 3,903,052 

The scope of this note concerns the disclosure of transactions that took place during the period under consideration, and debit and 

credit balances between the Efacec Group and entities which can be considered as related parties, taking into consideration the 

decision making infl uence involved. Related parties are understood as Associated companies, Shareholders and Board Directors. 

Transactions and balances between Group companies which were eliminated on consolidation, are not disclosed. 

Those entities which have a over 20% of qualifi ed shareholding in the Group are: 

- Efacec Sistemas de Gestão, S.A 49.2% 

- Grupo José de Mello 25.4% 

- Grupo Têxtil Manuel Gonçalves 25.4% 



27.1 Transactions in 2008 and 2007 

31.12.2008 31.12.2007 

Financial transactions 

Associated companies 

Supplementary services 0 71,871 

Loans granted 0 35,871 

Loans received 0 0 

Dividends received 

Shareholders 

725,105 818,685 

Loans granted 0 -1,070,000 

Loans received 1,195,000 7,100,000 


Other entities 

19,255,000 19,753,096 

Loans granted 0 -108,073 


Dividends paid 225,642 163,674 

Current transactions 


-17,560,537 -10,927,755 

Operational income and gains 1,851,448 2,127,887 

Operational costs and losses 323,902 383 

Financial income and gains 89,551 80,976 

Financial costs and losses 0 0 

Shareholders 

Operational income and gains 1,235,545 227,574 

Operational costs and losses 10,546,860 10,393,092 

Financial income and gains 0 0 

Financial costs and losses 358,558 52,079 

38 

-8,052,777 -8,009,117 

The commercial conditions under which these transactions and services took place were under the same conditions for independent 

third parties. 

Received dividends refer essentially to the associate company S2M – Sociedade de Manutenção de Metropolitanos, SA (689,300 Euro 

in 2008 and 818,685 Euro in 2007). Efacec Sistemas de Gestão, in addition to being the main shareholder, also includes the Efacec 

Group shared services unit, which means that it has the role of a service provider to all Group companies. 

Therefore, the Group presents operational costs to the value of 10,546,860 Euro (in 2007 these services represented 10,392,994 

Euro). 

The value of Loans made and received also refers to Efacec Sistemas de Gestão, S.A.

27.2 Final balances resulting from commercial transactions 

31.12.2008 31.12.2007 

Debts owed by related parties 


Loans granted 901,765 901,765 

Customers and income accruals (note 9) 494,586 1,008,932 

Others debtors and deferred costs (note 10) 

Shareholders 

695,563 633,265 

Loans granted 0 0 

Customers and income accruals (note 9) 24,643 44,379 



357,522 545,372 

Loans granted 0 0 

Others debtors and deferred costs (note 10) 173,803 0 

Debt to related parties 


2,647,882 3,133,712 


Suppliers (note 14) 235,059 383 

Other Creditors (note 14) 0 44,536 

Shareholders 


Suppliers (note 14) 2,640,711 2,100,998 

Other creditors (note 14) 


1,018,678 835,282 


Other creditors (note 14) 122,678 0 

39 

12,402,127 10,081,199 

Loans to associated companies refer to Águas da Figueira, SA. Pertaining to obtained loans, on 31 December 2008 the Group featured 

a loan of 8,295,000 Euro of its main shareholder EFACEC Sistemas de Gestão, S.A. Debt to shareholders refers essentially to Efacec 

Sistemas de Gestão, SA., both in the line Suppliers and in Other Creditors and it pertains to agreed shared services with said entity. 

27.3 Detail by entity of balances with related parties 

The amounts of Group assets and liabilities, which refer to related parties, can be broken down into the following entities: 



31.12.2008 31.12.2007 


Águas da Figueira - Loans 901,765 901,765 

Águas da Figueira - Current 558,862 775,559 

O&M Serviços - Current 398,604 458,636 

S2M – Soc. Metropolitan Maintenance - Current 90,110 225,261 

Liaoyang Efacec Electrical Equipment - Current 4,805,449 4,807,949 

Other -319,187 -1,379 

6,435,602 7,167,791 

Impairment -4,668,748 -4,668,748 

Shareholders 

1,766,854 2,499,043 

Efacec Sistemas de Gestão - Loans -8,295,000 -7,100,000 

Efacec Sistemas de Gestão - Current -2,987,994 -2,068,796 

Têxtil Manuel Gonçalves - Current 22,153 3,131 

Other -311,384 -280,864 


-11,572,225 -9,446,529 

Various 51,126 0 

The impairment booked relates to the debt owed by Liaoyang Efacec Electrical Equipment. 

27.4 Commitments and contingencies 

There are no purchase commitments or contingent liabilities pertaining to related parties. 

27.5 Remuneration of the Board of Directors 

40 

51,126 0 

31.12.2008 31.12.2007 

Remunerations 2,770,446 1,906,063 

Life insurances / Pension Plans 156,354 88,060 

Allowances 5,646 25,838 

28. Interests in joint ventures 

2,932,446 2,019,961 

The Group has various shareholdings in joint ventures, ACE's (Note 31), which mainly supply services to the Engineering, 

Maintenance, Environment and Transport areas. The following amounts represent the shares of the Group of the assets and liabilities, 

sales and profi ts/losses of the joint ventures and are included in the fi nancial statements: 

In 2008, strong growth in earnings and in current assets and liabilities turnover was registered, resulting in the participation 

of Efacec in 2 large projects for the construction of electric plants in Brazil which are being developed by MABE Construção e 

Administração de Projetos, Ltda., the entity in which the Group holds a 26.5% share. 

31.12.2008 31.12.2007 

Assets 

Non-current assets 60,813 74,747 

Current assets 66,528,914 4,223,759 

66,538,914 4,298,506 

Liabilities 

Non-current liabilities 119,037 120,356 

Current liabilities 62,675,494 3,664,247 

62,794,531 3,784,603 

Shareholders’ Funds 3,795,195 513,903 

Income 59,768,718 7,894,728 

Costs 55,499,784 7,737,153 

Profi t after tax 4,268,934 157,575

There are no contingent liabilities for the shareholdings of the Group in ACEs (joint ventures),likewise, the joint ventures do not 

have contingent liabilities. 

29. Multi-year contracts 

Amounts relating to multi-year contracts for the year ended 31 December 2008 were as follows: 

41 

Notes 31.12.2008 31.12.2007 

Income recognised in the period (closed and open contracts) 29.1 441,284,778 277,156,087 

Multi-Year Contracts still open as at 31 Dec. 2008 

Accumulated costs incurred to date (a) 1,079,477,534 744,245,214 

Margins recognised to date (a) 200,609,995 140,897,511 

Inventory in progress 29.2 9,590,454 8,096,899 

Income accruals 29.2 89,828,258 57,936,793 

Deferred income 29.2 130,362,696 51,423,942 

a) Non consolidated values, including those for previous fi nancial years for multi-year contracts still open as at 31.12.08. 

29.1 The reconciliation of the amount shown in the line Income recognised in the year concerning multi-year contracts closed or 

still open with the total of sales and services rendered, can be shown as follows: 

31.12.2008 31.12.2007 

Income recognised concerning multi-year contracts (note 1.10) 411,284,778 277,156,087 

Income relating to standard manufactured products 63,084,398 46,340,012 

Income relating to maintenance and assistance services 88,599,156 70,673,766 

Other income 43,248,172 46,153,236 

Total consolidated sales and services 606,216,504 440,323,101 

29.2 Multi-year contracts for stocks relate to costs incurred, which has not yet been used in a construction work or installation, 

and thus the margin resulting thereof has not been recognised yet. 

The accrued income represents situations in which the stage of invoicing is less than the stage of completion of the project involved, 

so an increase is made to recognize the respective margin. This situation involves a debit to the customer for the work/ 

installation already carried out (Note 9 – Accrued Income). When the opposite situation occurs, when the level of invoicing is 

greater than that of completion, there is deferred income, which represent a credit of the customer in relation to the project being 

worked on (Note 18 – Deferred Invoicing), the value of which will only be recognised in future years. 



G. List of companies consolidated 

30. Consolidation perimeter 

30.1 Companies included in consolidation 

Companies included in the consolidation, their registered offi ces, the shareholding held by EFACEC Capital SGPS, directly or indirectly, 

and the method of consolidation are as follows: 

Portuguese companies 

Company name Headquarters % Control Consol. Method 

Efacec Capital, SGPS, S.A. Matosinhos H INT 

Efacec Investimentos e Concessões, SGPS, S.A. (a) Oeiras 75,0 INT 

Efacec International Financing, SGPS, S.A. (b) Matosinhos 55.0 INT 

Efacec Energia, Máquinas e Equipamentos Eléctricos, S.A. (c) Matosinhos 100.0 INT 

Efacec Engenharia, S.A. Maia 100.0 INT 

Efacec Ambiente, S.A. Maia 100.0 INT 

Efacec Serviços de Manutenção e Assistência, S.A. Matosinhos 80.11 INT 

ATM – Assistência Total em Manutenção, S.A. Barreiro 100.0 INT 

BCI – BRISA Conservação de Infra-estruturas, S.A. Cascais 100.0 INT 

Efacec Sistemas de Electrónica, S.A. (d) Maia 100.0 INT 

Efacec Automação e Robótica, S.A. Maia 100.0 INT 

Efacec Marketing Internacional, S.A. Maia 100,0 INT 

GEMP – Empreendimentos Imobiliários, S.A. Matosinhos 100.0 INT 

Empovar, S.A. Matosinhos 100.0 INT 

SVEP – Segurança e Vigilância Electrónica de Pessoas, Lda. Oeiras 92.0 INT 

S2M – Sociedade de Manutenção de Metropolitanos (Install. Fixas), S.A. Matosinhos 40.0 MEP 

O&M Serviços – Operação e Manutenção Industrial, S.A. Mortágua 40.0 MEP 

EID – Empresa de Investigação e Desenvolvimento de Electrónica, S.A. Lisbon 25.0 MEP 

Águas da Figueira, S.A. (e) Figueira da Foz 20.0 MEP 

SMA - Serv. Manut. Centrais Termoeléctricas, ACE Oeiras 100.0 PRO 

SPORTSER - Serv. Manut. Electromecânica, ACE Oeiras 90.0 PRO 

OMAP - Operação e Manut. do Sector de Adubos, ACE Oeiras 90.0 PRO 

SMIQ - Serv. Manut. da Indústria Química, ACE Oeiras 60.0 PRO 

ASIQUIM - Assist. e Serviços p/ Indústria Química, ACE Estarreja 50.0 PRO 

Etarlima - Tratamento de Efl uentes, ACE Viana do Castelo 50.0 PRO 

Ecobarcelos - Tratamento de Efl uentes, ACE Barcelos 49.0 PRO 

Siemens, Setal, Dégremont e Efacec - Serv. Manut., ACE Amadora 33.0 PRO 

Siemens e Efacec, ACE Amadora 5.0 PRO 

MCT - Manut. em Centrais Térmicas ACE Oeiras 90.0 PRO 

Etarlis, ACE Leiria 50.0 PRO 

Efacec Omnistal, ACE Maia 50.0 PRO 

EME2 - Engenharia, Manutenção e Serviços, ACE Lisbon 40.0 PRO 

42

Foreign companies 


Southern Africa 

Efacec Angola, Lda. Luanda / Angola 100.0 INT 

Efacec Moçambique, Lda. 

Latin America 

Maputo / Mozambique 100.0 INT 

Efacec do Brasil, Lda. S.Paulo / Brazil 100.0 INT 

BAUEN Efacec, S.A. Córdoba / Argentina 76.67 INT 

BAUEN Efacec Chile, S.A. Santiago / Chile 96.92 INT 

Efacec Energy Service, Ltda. Recife / Brazil 66.67 INT 

MABE Construção e Administração de Projectos, Ltda. Fortaleza / Brazil 26.50 PRO 

Comercializadora de Equipos y Materiales MABE Limitada 

Spain 

Santiago / Chile 26.50 PRO 

Efacec Sistemas España, SL Madrid / Spain 100.0 INT 

Aura de Guijo de Coria, SL Toledo / Spain 100.0 INT 

Aura de Agudo, SL Toledo / Spain 100.0 INT 

Efacec Ikusi UTE 

United States 

Tenerife / Spain 50.00 PRO 

Efacec Florida, Inc. Atlanta / USA 100.0 INT 

Efacec Power Transformers Inc. Atlanta / USA 100.0 INT 

Advanced Control Systems, Inc. 

Europe 

Atlanta / USA 99.56 INT 

Efacec Praha, s.r.o. Prague / Czech Republic 100.0 INT 

Efacec Central Europe Limited, SRL Bucharest, Romania 100.0 INT 

Efacec Contracting Central Europe GmbH 

India 

Vienna / Austria 85.00 INT 

C&S Efacec MV India Pvt. Ltd. New Delhi / India 50.00 PRO 

Efacec C&S MV Components Pvt. Ltd. New Delhi / India 70.00 INT 

GODREJ Efacec Automation and Robotics, Ltd. 

Maghreb 

Mumbai / India 50.00 PRO 

Efacec Algérie, EURL 

The Rest of the World 

Algiers / Algeria 100.0 INT 

Efacec Singapore Pte Ltd Singapore 100.0 INT 

Efacec Asia-Pacifi c, Ltd. Macao 100.0 INT 

Efacec Malaysia Sdn.Bhd. (f) Kuching / Malaysia 61.00 INT 

SESCO Efacec Sdn.Bhd. (g) Kuching / Malaysia 35.20 MEP 

LEEEC - Liaoyang Efacec Electrical Equipment Co. Ltd. Ltd. Liaoyang / China 36.28 MEP 

Efacec Sistemas Venezuela, CA Caracas, Venezuela 65.00 INT 

Caption: 

INT – Integral Method of consolidation; 

MEP – Equity Method of consolidation; 

PRO – Proportional Method of consolidation; 

(a) This company was set up with the purpose of managing social holdings as an indirect way of carrying out economic activities 

and could also render administrative and management services as defi ned by law, namely the follow-up of concessions. The remaining 

25% of this company is owned by Caixa Investimentos – Sociedade de Investimentos, S.A. 

(b) This company was set up in 1999 in a partnership between Efacec and IPE, whose goal was to manage certain shareholdings 

in the Far East. As at 31 December 2007, it held 60% of EFACEC Malaysia SDN.BHD which in turn owned 23% of Sesco EFACEC, 

a company also based in Malaysia. With the disappearance of IPE, the shareholding of this entity is currently split between AICEP 

Capital with 40% and the Portuguese General Treasury Department with 5%. 

(c) In 2008, there was a reorganisation of the companies of the Energy business area through a merger by incorporating assets 

of the former companies EFACEC DT, Transformadores de Distribuição de Energia, SA and EFACEC AMT, Aparelhagem de Média 

Tensão, SA into EFACEC Energia, Máquinas e Equipamentos Eléctricos, SA. 

(d) In 2008, this company merged the former companies TECH M5 Capital, SGPS, SA and TECH M5 Tecnologia into Operadores 

de Redes, SA. 

(e) This company’s purpose is to use concessionary rights to store, treat and distribute water for public consumption, as well as 

collection and disposal of effl uents in the Figueira da Foz municipality. 

43 



(f) This company is held by the group through EFACEC International Financing, S.G.P.S., S.A., which holds 60% and by EFACEC 

Capital, S.G.P.S., S.A., which holds 1%. Since EFACEC Capital, S.G.P.S., S.A. owns 55% of EFACEC International Financing, 

S.G.P.S., S.A., control is therefore exercised over EFACEC Malaysia; 

(g) 12.2% of this company is held directly by Efacec Energia.The remaining shareholding is held indirectly through the direct 

shareholding in Efacec International Financing SGPS, which has control of Efacec Malaysia, which in its turn holds 23% of Sesco 

Efacec. 

30.2 Companies excluded from consolidation 

Company name Headquarters % Control 

Reason for 

Exclusion 

Vestiparque, Lda. Oeiras 67.0 (A) 

Efacec Maroc, SARLAU Maroc 100.00 (B) 

(A) This company was set up on 30 August 2007 in partnership with Mota-Engil as part of the winning consortium of the second 

phase of the tender offer for the construction and operation of wind farms. It has not developed any activity yet and it is entered in 

Financial Investments at acquisition cost. 

(B) This company was set up in the 4th quarter of 2008 and is now in installation phase. It has not started activity and is entered as 

Financial Investments at acquisition cost. 

30.3 Changes to the consolidation perimeter 

In 2008, the Complementary Group of Companies “ASMI – Alverca, Serviços de Manutenção de Instalações Electromecânicas ACE" 

, was settled and removed from the consolidation perimeter, since the contract which led to its constitution terminated. Still in 

2008, the company MAP Consultoria e Gestão, Lda. was also settled. 

These changes did not have any signifi cant impact on the accounts, which might affect their comparability with the previous 

year. 

On the other hand, the entry of various entities set up or acquired during 2008 were registered. These are already included in Note 

31.1, and are identifi ed in the following table: 


Efacec Power Transformers Inc. Atlanta / USA 100.0 INT 

Efacec Central Europe Limited, SRL Bucharest, Romania 100.0 INT 

Efacec Contracting Central Europe GmbH Vienna / Austria 85.00 INT 

C&S Efacec MV India Pvt. Ltd. New Delhi / India 50.00 PRO 

Efacec C&S MV Components Pvt. Ltd New Delhi / India 70.00 INT 

Aura de Guijo de Coria, SL Toledo / Spain 100.0 INT 

Aura de Agudo, SL Toledo / Spain 100.0 INT 

MABE Construção e Administração de Projectos, Ltda. Fortaleza / Brazil 26.50 PRO 

Comercializadora de Equipos y Materiales MABE Limitada Santiago / Chile 26.50 PRO 

Etarlis, ACE Leiria 50.00 PRO 

Efacec Omnistal, ACE Maia 50.00 PRO 

EME2 - Engenharia, Manutenção e Serviços, ACE Lisbon 40.00 PRO 

The impact of the entry of these new activities led to relevant effects to the 2008 accounts. The following table features the 

amounts with which they contributed toward the main lines in the Profi t and Loss Account and in the Balance Sheet, and the values 

that would appear in the fi nancial statements if their entry had not occurred. 

44

2008 

Impact of Entries on 

Perimeters 

45 

2008 

Adjusted by entries 

In the profi t and loss account 

Sales and Services Rendered 606,216,504 52,512,664 553,703,841 440,323,101 

Net Profi t 

In the Balance Sheet 

24,136,981 3,388,290 20,748,690 17,401,185 

Total Assets 655,729,383 91,067,670 564,661,713 418,626,766 

Fixed Assets 138,399,382 28,745,595 109,653,787 97,037,800 

Cash and cash equivalents 110,526,411 44,072,491 66,453,921 10,213,594 

Total Liabilities 576,407,046 87,808,797 488,598,249 339,132,848 

Shareholders’ Funds 79,322,337 3,258,873 76,063,464 79,493,918 

Leça do Balio, 27 March 2009 

Accountant responsible for Consolidation 

Mr. José Carlos Eiras Pinto de Oliveira 

The Board of Directors 

Mr. Francisco de la Fuente Sánchez - Chairman 

Mr. Luís Filipe da Conceição Pereira - Vice-Chairman 

Ms. Maria do Rosário Mayoral Robles Machado Simões Ventura - Board Member 

Mr. Alberto de Freitas Martins - Board Member 

Mr. Alberto Joaquim Milheira Barbosa - Board Member 

Mr. Artur Fuchs - Board Member 

Prof. Daniel Bessa Fernandes Coelho - Board Member 

Prof. António do Prado Nogueira Leite - Board Member 

Prof. João Afonso Ramalho Sopas Pereira Bento - Board Member 

Mr. José Manuel Gonçalves de Morais Cabral Board Member 

Mr. Luís Miguel Nogueira Freire Cortes Martins - Board Member 

2007 



47 


Individual Financial Statements

Non-current assets 

Efacec Capital, SGPS, S.A. 

Balance Sheets as at 31 December 2008 and 2007 

Assets 

The Chartered Accountant Board of Directors 

48 



Tangible fi xed assets 3 25,760,092 22,490,611 

Intangible assets 0 4,229 

Investments in group and associated companies 5 145,555,675 124,446,805 

Financial investments in other companies 5 533,934 11,517 

Debtors and deferred costs 8 462,598 27,000 

Deferred tax assets 15 1,221,721 598,579 

Derivatives 6 0 345,574 

Current assets 

Total non-current 173,534,020 147,924,316 

Customers and accrued income 7 266,381 261,594 

Debtors and deferred costs 8 50,832,360 23,475,987 

Other fi nancial investments 6,236,577 0 

Cash and cash equivalents 10 52,903,339 113,267 

Shareholders’ Funds 

Shareholders’ Funds and Liabilities 

Total current 110,238,657 23,850,849 

Total assets 283,772,677 171,775,165 

Capital 11 41,641,416 41,641,416 

Reserves for fi nancial instruments -1,725,066 253,997 

Reserves and retained earnings 21,661,471 19,633,473 

Net Profi t 20,080,238 26,776,666 

Anticipated dividends -6,034,000 -12,216,000 

Non-current liabilities 

Total shareholders’ funds 75,624,059 76,089,552 

Provisions 16 1,669,627 1,661,837 

Loans 12 81,500,000 48,500,000 

Deferred tax liabilities 15 3,531,672 3,513,491 

Derivatives 6 2,347,029 0 

Current liabilities 

Total non-current liabilities 89,048,327 53,675,328 

Loans 12 105,986,688 18,156,341 

Shareholders’ loans 23 8,295,000 7,100,000 

Suppliers 13 1,166,195 422,942 


Total current liabilities 119,100,290 42,010,284 

Total shareholders’ funds and liabilities 283,772,677 171,775,165 

The notes to the accounts are an integral part of these consolidated balance sheets


Consolidated profit and loss account by nature for the years ended 31 December 2008 and 2007 

49 



Sales and Services Rendered 7,361,333 4,950,012 

Third Party Supplies and Services 17 -3,014,597 -1,568,872 

Staff Costs -2,751,546 -1,261,790 

Depreciation -846,595 -871,768 

Provisions 16 0 -37,359 

Other Operational Costs -190,244 -259,854 

Other operating income 1,763,032 1,418,860 

Operating Profi ts 2,321,384 2,369,229 

Financial Costs (net) 18 -3,066,172 -1,936,699 

Losses/Gains in associated companies 18 20,695,444 26,469,663 

Losses/Gains in other companies 0 5,429 

Income Tax 19 129,582 -130,956 

Net Profi t 20 20,080,238 26,776,666 

The notes to the accounts are an integral part of these consolidated balance sheets 




The Chartered Accountant 


Statement of changes to Shareholder's Funds as at 31 December 2008 

50 

Notes Share Capital 

Reserves for Financial 

Instruments 

Balance as at 1 de January de 2007 41,641,416 -34,725 

Reinforcement of reserves through application of profi t 


Cash fl ows hedging, net of taxes 


6 288,721 

Gains / (Losses) recognised directly in shareholders’ funds 


Anticipated dividends 

288,721 

Total gains recognised in 2007 288,721 

Balance as at 31 de December de 2007 41,641,416 253,996 

Balance as at 1 de January de 2008 41,641,416 253,996 

Reinforcement of reserves through application of profi t 


Cash fl ows hedging, net of taxes 

Revaluation of land 


6 -1,979,062 

Gains / (Losses) recognised directly in shareholders’ funds 


Anticipated dividends 

0 -1,979,062 

Total gains recognised in 2008 0 -1,979,062 

Balance as at 31.12.2008 41,641,416 -1,725,066

Merger Reserve Other Reserves Retained Profits Total Shareholders’ Funds 

4,026,949 9,152,090 13,991,531 68,777,261 

407,404 -407,404 0 

-7,537,096 -7,537,096 

288,721 

0 

0 407,404 -7,944,500 -7,248,375 

26,776,666 26,776,666 

-12,216,000 -12,216,000 

0 407,404 6,616,166 7,312,291 

4,026,949 9,559,494 20,607,697 76,089,552 

4,026,949 9,559,494 20,607,697 76,089,552 

7,386,697 -7,386,697 0 

-13,221,000 -13,221,000 

-1,979,062 

425,110 425,110 

263,222 263,222 

0 8,075,028 -20,607,697 -14,511,731 

20,080,238 20,080,238 

-6,034,000 -6,034,000 

0 8,075,028 -6,561,459 -465,493 

4,026,949 17,634,522 14,046,238 75,624,059 

51 

Board of Directors 



Operational activities 


Cash Flow Statements for the periods ended 31 December 2008 and 2007 


52 



Paid to suppliers 6,059,316 2,989,939 

Paid to staff 2,267,964 1,765,972 

Flow generated by operations (8,327,281) (4,755,911) 

Payment/receipt of corporation tax (795,103) 1,227,864 

Other revenue/payments in respect of operating activity 9,313,304 10,272,430 

Investment activities 


Net infl ow from operational activities [1] 190,920 6,744,383 

Financial investments 5 250,000 509,277 

Interest and similar income 1,522,288 422,767 

Dividends 18 20,695,176 26,469,663 


22,467,464 27,401,707 

Financial investments 5 27,440,456 2,261,966 

Tangible assets 3 1,918,913 1,182,846 

29,359,369 3,444,812 

Net outfl ow from investment [2] (6,891,905) 23,956,894 

Financing activities 


Non-current loans obtained 12 10,000,000 0 


Sale of own shares 0 0 


438,711,898 102,865,595 

Non-current loans obtained 12 359,259 0 


Amortisation of leasing contracts 0 0 

Interest and similar income 6,841,571 3,390,806 

Dividends 21 19,255,000 19,753,150 

379,220,840 133,485,406 

Flows generated by fi nancing activities [3] 59,491,058 (30,619,811) 

Change in cash and cash equivalents [C]-[B]+[A]=[1]+[2]+[3] 52,790,072 81,467 

Merger impact [A] 0 0 

Cash and cash equivalents at the beginning of the period [B] 113,267 31,800 

Cash and cash equivalents at the end of the period [C] 52,903,339 113,267

A. General information 

Notes to the Financial Statements 

The activity of EFACEC Capital, SGPS, SA, as a holding company, cannot be studied separately from the group that it leads through 

the management of its subsidiary and associated companies, and the businesses run by each of them. The diversity in terms of 

production and engineering competencies has left its mark on the management of this company and is demonstrated by the range 

of shareholdings held. The variety of services and products include a wide range of equipment used in electricity transport and 

distribution, in remote control systems, ventilation, electric traction, industrial electronics, telecommunications, automation and 

robotics and in engineering projects focused on industrial plant and maintenance. 

The company, and the group it represents operate in a highly competitive market, and it is necessary to be alert to the constant 

developments and changes in customer preferences and in new technologies. With this in mind, the company has adapted its 

structure to ensure the most appropriate solution. During the last few years, in which there has been a focus on internationalising 

and diversifying activities that has seen branches and agents set up across more than 30 countries, it has carried out projects 

and studies with the aim of strengthening and consolidating its position, and rethinking its development strategy for the entire 

group. 

Efacec Capital, Holding company of the Efacec Group is a public liability company with headquarters at Arroteia, parish of Leça do 

Balio, Matosinhos in Portugal. 

The following Notes support and complement the Company's individual fi nancial statements. 

B. Summary of main accounting policies 

The main accounting polices used to prepare these fi nancial statements are described below. These policies have been consistently 

applied over the years unless otherwise stated. 

1.1 Basis of preparation 

The fi nancial statements were prepared using historical costs with the exception of land, fi nancial assets and liabilities (including 

derivatives) which have been valued in the accounts at their fair value. 

During this fi nancial year the interpretation IFRIC.11 IFRS.2 was mandatory - Intra group transactions of Own Shares, producing 

no signifi cant impact of company accounting policies. 

At the end of this fi nancial year, the following standards were issued but not mandatory as at 31 December 2008: 

- IFRS 2 Payment based on shares (2008 Update) 

- IFRS 3 Business combinations (2008 Update) 

- IFRS 8 Operating Segments; 

- IAS 1 Presentation of Financial Statements (2007 Update) 

- IAS 23 Cost of Loans Obtained – (2007 Update) 

- IAS 27 Consolidated and Separate Financial Statements (2008 update) 

- IAS 32 Financial instruments: Presentation (2008 Update) 

- IFRIC 13 Customer Retention Programmes; 

- IFRIC 14 The Limit on a Defi ned Benefi t Asset, Minimum Financing Requirements and their Interaction 

- IFRIC 15 Contracts for the construction of buildings 

- IFRIC 16 Hedges of a net investment in a foreign operation 

In view of the fact that applying these standards was not mandatory for the year beginning 1 January 2008, the company decided 

not to adopt them immediately. 

It is estimated however that there would be no signifi cant impact from applying them to the fi nancial statements of the company. 



the accounting policies of the company. 

53 



1.2 Tangible Fixed Assets 

separate, as deemed appropriate, only when it is likely that economic benefi ts fl ow to the company and the cost can be reliably 

measured. Other expenditure for repairs and maintenance are recognised as costs within the period in which they are incurred. 

Increases resulting from revaluations are shown in Reserves in Shareholders’ Funds. Each year, the difference between depreciation 

based on the re-valued amount of the asset taken to profi t and loss in the period, and depreciation based on the original cost 

of the asset, is transferred from fair value Reserves to Retained Profi ts. 

Land is not depreciated. Depreciation on other assets is calculated using the straight line method using the cost value or the revalued 

amount, in order to apportion their cost or re-valued amount over the useful life of the asset down to their residual value, 

as follows: 

Depreciation begins in the month following that in which the asset entered service, in accordance with its useful life, as follows: 

Line Years 

Land - 

Buildings and Other Constructions 25 - 50 

Plant and Equipment 8 - 12 

Vehicles 4 - 5 

Tools and Utensils 4 - 8 

Offi ce Equipment 4 - 6 

Asset residual values and respective useful lives are revised and adjusted, if deemed necessary, at the balance sheet date. 

If the amount booked is greater than the recoverable value of the asset, it is immediately adjusted to its estimated recoverable 

value (Note 1.4). 

Gains and/or losses on disposal or write offs are determined by calculating the difference between the net accounting value of the 

asset, and its disposal or write off value, being in the latter case zero, and included in the Profi t or Loss for the period. 

1.3 Intangible Assets 

a) Software 

The acquisition cost of software licences is capitalised and includes all costs incurred for its acquisition and those required to put 

the available software into use. These costs are depreciated over the estimated useful life (not exceeding 5 years). 

Costs related to the development or maintenance of the software are recognised as costs of the period in which they are incurred. 

Costs directly associated with the production of identifi able and unique software controlled by the company, and which is probably 

going to generate future economic benefi ts that are superior to costs involved beyond one year, are recognised as intangible assets. 

Direct costs include staff costs to develop the software and a share of relevant fi xed costs. 

Software development costs recognised as assets are amortised over its estimated useful life (not exceeding 5 years). 

1.4 Asset impairment 

Assets that do not have a defi ned useful life are not subject to amortisation, but are the object of annual impairment tests. Assets 

subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the value at which 

they were booked may not be recoverable. An impairment loss is recognised by the amount by which the booked value of the 

asset exceeds its recoverable value. The recoverable value is the highest of the fair value of the asset, less expenses required for 

sale, and its use value. To carry out impairment tests, assets are grouped together at the lowest level at which cash fl ows can be 

identifi ed separately (cash fl ow generating units or UGCs). 

The amount recoverable from a UGC is calculated based on calculations of useful value. These calculations use cash fl ow projections 

based on fi nancial budgets approved by the management entity, covering a period of at least 5 years. 

Assumptions have been used for the analysis of each UGC of the business segment. The management entity works out the budgeted 

gross margin based on prior performance and its expectations for market development. The average weighted growth rate 

used is consistent with the forecasts included in sector reports. The discount rates used are before tax, and refl ect the specifi c 

risks related to the relevant sectors. 

1.5 Financial investments 

Financial investments in group, associate and other companies are shown at acquisition cost. 

The Group checks at each balance sheet date whether there is objective evidence of impairment of any investment. If there is such 

proof, the accumulated loss, calculated as the difference between the balance sheet value and the current fair value, is recognised 

54

in the profi t and loss account of the period in which the impairment occurred (Note 1.4). 

The company only recognises income to the extent that it receives distributions from cumulative net profi ts of the shareholding 

held, following the date of its acquisition. Distributions received in excess from these profi ts are considered as a recovery of the 

investment, and as such are booked as a reduction in the cost of the investment. 

1.6 Stocks 

Stocks are presented at the lowest value between cost and net realisable value. The cost is calculated using the standard cost 

(which does not vary signifi cantly from actual production cost). 

The cost of fi nished products and manufacturing work in progress includes raw material costs, direct labour, other direct costs and 

manufacturing overheads (based on normal production capacity). The costs of loans obtained are excluded. 

Net realisable value is equal to the estimated selling price under normal business conditions, less variable selling costs. The cost 

of stocks includes the transfer from shareholders’ funds of any loss or gain classifi ed as cash fl ow hedging related to the purchase 

of raw materials. 

1.7 Recognition of income and costs in contracts over several years 

Profi t on contracts which continue for more than one year are accounted for in accordance with the percentage of work completed 

by reference to partial delivery, segment identifi cation, assessment procedures or other means which allow reliable estimation of 

costs for completion of the work or the invoices which are to be sent to the customer. When it is not possible to estimate profi ts 

and the costs with reasonable reliability, then they are recognised only when the product is delivered to the customer, applying the 

completed work criteria. In this case, the costs incurred until delivery are recorded in Stocks – Products and work in progress. 

Costs of contracts include raw materials and direct materials, direct labour and also allocated indirect costs, distributed as specifi 

ed in the contract. Sales and administration expenses are charged as costs as they occur. Provisions are set up for any foreseen 

losses on completing a contract within the period in which they are determined, and are immediately refl ected in the results. 

Changes to contracts or estimates and forecast costs and/or profi ts and margins, arising from renegotiating of the conditions with 

customers or from internal productivity, are recognised in the results from the period in which they occur and taking into account 

the stages of completion. 

When there are materials which have not yet been used on the job or the installation, there will be a balance on the account 

“Products and work in progress”.If this relates to receivables from customers not yet invoiced, the resulting margin is not recognised. 

When the opposite situation occurs and the amount invoiced to the customer is greater than the level of work completed, 

a deferred liability is set up representing a liability to a customer for the work still to be completed. 

1.8 Accounts receivable from customers and other debtors 

Accounts receivable from customers and other debtors are initially recognised at their nominal or fair value, when different, less 

any impairment loss. The provision for debtor impairment is set up when there is objective evidence that the Group will not receive 

the entire amount outstanding, as per the original conditions established for the debt. The amount of the provision is the difference 

between the amount presented and the estimated present value of future cash fl ows, discounted at the effective interest rate. The 

amount of the provision is recognised in the profi t and loss account. 

1.9 Cash and cash equivalents 

The line Cash and cash equivalents includes cash, bank deposits, other short-term high liquidity investments and with initial maturities 

up to three months. Bank overdrafts are shown in the Balance Sheet under current liabilities in the line Loans. 

1.10 Share capital 

Ordinary shares are shown in shareholders’ funds. 

The incremental costs directly attributable to the issue of new shares or options are shown in shareholders’ funds as a reduction, 

net of taxes, of cash from increases in share capital. The incremental costs directly attributable to the issue of new shares or options 

or the acquisition of a new business are included in the cost of acquisition as part of the purchase price. 

55 



1.11 Loans Obtained 

Loans are initially recognised at their nominal value or fair value, whenever different, less any impairment loss. Loans are subsequently 

presented at amortised cost. Any difference between receipts (net of transaction costs) and the amortized value is recognised 

in the profi t and loss account throughout the loan period, using the effective rate method. 

Loans are shown in current liabilities, unless the company has an unconditional right to defer payment of the liability until at least 

12 months after the balance sheet date. 

1.12 Income tax and deferred taxes 

EFACEC Capital, SGPS opted for taxation based on consolidated profi ts as from 1993, currently covered by the “Special Rules for 

Taxation of Groups of Companies”, (Article 36 of the Corporate Income Tax Code - CIRC). All Group companies whose headquarters 

are located in Portugal and are subject to the Portuguese Corporate Income Tax (IRC), and where the direct and indirect 

share holding is greater than 90%, have been included in the tax consolidation in accordance with the applicable legislation. The 

consolidated tax charge is determined on the basis of the arithmetic sum of taxable profi ts and losses as derived from individual 

companies’ tax returns. 

Deferred taxes are generally recognised using the liability method concerning temporary differences arising from the carrying 

amounts of assets and liabilities for consolidated fi nancial reporting purposes and amounts used for income tax purposes. However, 

if the deferred tax arises through the initial recognition of an asset or liability in a transaction that is not a business concentration 

that at the date of the transaction did not affect either the accounting or fi scal result, it is not booked. Deferred taxes are determined 

by fi scal taxes (and laws) in force or substantially in force at the balance sheet date and which are expected to be applicable 

in the period when the deferred tax asset or the payment of the deferred tax liability takes place. 

The tax rate that has been used to determine deferred taxes is that of current legislation - 25%, plus the maximum local tax possible 

- 1.5% of taxable profi t. 

Deferred tax assets are recognised to the extent that it is probable that future taxable profi ts will be available to make use of the 

timing difference. 

Deferred taxes on timing differences arising from investments in subsidiaries and associates are recognised, except when the 

Group is able to control the haphazard nature of the reversal of the timing difference and when it is probable that the timing difference 

does not revert in the foreseeable future. 

1.13 Provisions 

Provisions are booked when the company has a legal or constructive obligation when, as a result of past events, it is probable 

that an outfl ow of resources will be necessary to pay an obligation, and a reliable estimate of the amount of the obligation can be 

made. 

When there is a number of similar obligations, the probability of generating an outfl ow is worked out together. The provision is 

booked even when the probability of an outfl ow, relating to an element included in the same class of obligations, may be reduced. 

1.14 Recognition of income 

Income covers the fair value of the sale of goods and services, net of taxes and commercial discounts and after elimination of 

internal sales. 

Services rendered 

The rendering of services is recognised in the accounting period in which they are rendered, with reference to the phase of completion 

of the transaction at the balance sheet date. 

1.15 Leases 

Leases are classifi ed as operational leases if a signifi cant part of the inherent risks and benefi ts at the time the lease is taken on is 

retained by the lessor. Payments made for operational leases are booked in the profi t and loss account on settlement. 

Leases of tangible fi xed assets where the Group holds substantially all the risks and benefi ts associated with the asset are classifi ed 

as fi nancial leases. Financial leases are capitalised at the beginning of the lease for the lower of the fair value of the asset leased 

and the present value of the minimum payments of the lease. Each payment made is split between the capital sum due and the 

fi nancial costs, in order to obtain a constant rate on the debt outstanding. Lease obligations net of fi nancial charges are shown in 

Other Creditors. The interest is booked to fi nancial costs in the lease period to a constant periodic interest rate on the remaining 

debt of each period. Tangible fi xed assets acquired through fi nancial leases are depreciated over the lesser of the useful life of the 

asset or the lease period. 

56

1.16 Subsidies 

Subsidies received are booked at their fair value when a reasonable level of comfort exists that the subsidy will be received and 

the Group will comply with its obligations. 

Subsidies relating to the purchase of tangible fi xed assets are included in non-current Liabilities as deferred subsidies and are 

credited to the Profi t and Loss Account in proportion to the useful life of the corresponding assets. 

1.17 Dividend distribution 

Dividend distribution to shareholders are recognised as a liability in the company’s fi nancial statements in the period in which the 

dividends are approved in the Shareholders’ General Meeting. 

2. Financial risk management 

2.1 Factors of financial risk 

The Group operates internationally and thus has exposure to the market, in particular to changes in interest rates, exchange rates 

and the price of raw materials.Thus Group activities are exposed to a variety of fi nancial risks: market risk (including exchange 

rate risk, fair value risk relating to interest rates and price risk), liquidity risk and cash fl ow risk associated with interest rates. 

The Group has no signifi cant concentrations of credit risk. Various fi nancial instruments are used to minimise the potential adverse 

effects on the fi nancial performance of the Group. However, the Group only uses such fi nancial instruments to cover risks arising 

from its business and activities (“hedging purposes”). 

Exchange rate risk 

The Group operates internationally, and as a result, is exposed to exchange rates risks. This risk arises from commercial transactions, 

recognition of assets and liabilities and net investments in external operations. 

The Group has signifi cant Sales and Service Rendering in countries outside the Euro zone, namely in US Dollars (USD). Group 

companies are required to carefully manage exchange risk cover, considering the operational margins in their business.Exchange 

risk cover is made from the proposal date in some cases or from the order date, until cash payment is received. In this way, not 

only are the majority of balance sheet assets and liability values covered but also future sales linked with proposals (considering 

an acceptable level of success) and orders. Accordingly cover can be for several years depending on how long the project or installations 

take, refl ecting the possible period over several years which the work of Group companies can take place. 

Liquidity risk 

The management of liquidity risk implies maintaining a suffi cient level of cash and bank deposits, the viability of fl oating debt 

through adequate credit facilities, and skill in liquidating market positions. In line with the business needs, the Group Treasury 

aims at maintaining the fl exibility of the fl oating debt, keeping credit lines available. 

Cash fl ow risks and fair value related to interest rates 

Since the Group does not have assets that earn signifi cant amounts of interest, profi ts and cash fl ows are relatively independent 

of changes to market interest rates. 

Interest rate risks of the Group come from long-term loans. Loans with variable rates of interest expose the Group to cash fl ow 

risks related to interest rates. 

The Group manages interest rate cash fl ow risks associated to the interest rate by transforming variable interest rates into swaps 

with fi xed interest rates or by establishing caps over the variable rate. In these transactions, the Group agrees to exchange with 

other parties at specifi ed intervals (mainly half-yearly), the difference between amounts at contracted fi xed interest rate and 

amounts at a variable interest rate. 

57 



2.2 Accounting for financial instruments – derivatives and hedging 

Derivatives are initially recognised at fair value and subsequently readjusted to their fair value. The method for recognising changes 

in fair value depends on whether the derivative is defi ned as a hedge instrument and if so, the nature of the asset/liability to 

be covered. The group arranges certain derivatives as: (1) fair value cover of recognised assets and liabilities or of commitments 

(fair value cover); (2) cover of highly probable forecast transactions (cash fl ow hedging). 

For each transaction, the Group prepares documentation to justify the relationship between the hedge instruments and the related 

assets/liabilities covered, as well as the objective of risk management and the strategy for taking out cover. The Group also 

documents its evaluation, both at the start of the cover and on a continuous basis, as to whether the derivatives used for cover 

effectively compensate for fl uctuations in fair value or in the cash fl ows of the items covered. 

The fair value of derivatives used to take out cover is disclosed in note 6, as well as the movements that took place in Shareholders’ 

Funds. 

a) Fair value hedging 

Changes in the fair value of derivatives that are arranged and qualifi ed for fair value hedging are recognised in the profi t and 

loss account, together with changes to the fair value of the assets and liabilities covered (in the covered position) attributable to 

covered risk. 

b) Cash fl ow hedging 

The effective part of the change in fair value of derivatives that are arranged and qualifi ed for cash fl ow hedging is recognised in 

shareholders’ funds. The gain or loss related to the ineffective part is immediately recognised in the profi t and loss account. 

As pertains cover strategies that use options, in accordance with IAS 39 and complying with the effi ciency test, the strategy value 

is split into the intrinsic value and the time value. 

In accordance with the treatment referred above, the intrinsic value should be presented in shareholders’ funds (assuming the 

strategy is effi cient), while the temporal value should be booked to the profi t and loss account. 

The cumulative amounts in shareholders’ funds are reclassifi ed to profi t and loss in the same period in which the item covered 

generates gains and losses (for instance, when the covered sales forecast occurs). However, when the covered forecast transaction 

results in the recognition of a non-fi nancial asset (for example, stocks) or non-fi nancial liability, the previously deferred gains and 

losses in shareholders’ funds are transferred and included in the initial measurement of that asset or liability. 

When a hedge instrument expires or is sold, or when a hedging does not comply with the accounting and qualifi cation criteria, any 

cumulative gain or loss existing at that moment in shareholders’ funds, remains in shareholders’ funds and is recognised when 

the forecast transaction is fi nally refl ected in the profi t and loss account. When the expected occurrence of a forecast transaction 

is no longer highly probable, the cumulative gains or losses refl ected in shareholders’ funds are immediately transferred to profi t 

and loss. 

c) Non-qualifi ed derivatives for hedging purposes 

Certain derivatives do not comply with hedging accounting and qualifi cation criteria. Changes in fair value of these derivatives are 

immediately recognised in the profi t and loss account. 

2.3 Estimates of fair value 

The fair value of fi nancial instruments available on the current market (for instance publicly negotiated derivatives, negotiable 

instruments available for sale) is determined on the basis of quoted market prices at balance sheet date. The quoted market price 

used for fi nancial assets of the Group is the price received by shareholders on the current market; the quoted market price for 

fi nancial liabilities is the price paid on the current market. 

The fair value of fi nancial instruments not traded on the current market (for instance unquoted derivatives) is determined using 

enhancement techniques. The Group uses a variety of methods and reaches its conclusions based on market conditions at each 

balance sheet date. Quoted market prices or negotiation quotas for similar instruments are used for long-term debts. Other techniques, 

such as estimates of discounted cash fl ows, are used to determine the fair value of other fi nancial instruments. The fair 

value of interest rate swaps is calculated based on the present value of estimated future cash fl ows. The fair value of interest rate 

futures contracts is determined using market exchange rates at the balance sheet date. 

The nominal value less estimated credit adjustments of receivable and payable accounts is assumed to be close to their fair value. 

The fair value of fi nancial liabilities is estimated by updating future contractual cash fl ows at the current market interest rate available 

for similar fi nancial instruments. 

58

C. Notes on the Balance Sheets as at 31 December 2008 and 2007 

3. Tangible fixed assets 



Land and buildings 

Vehicles and equipment 

59 

Office equipment Other Total 

Opening balance 20,542,974 200 26,694 1,920,742 22,490,612 

Merger 0 0 0 0 0 

Revaluation 572,900 0 0 0 572,900 

Accrual 2,269,291 0 12,738 1,256,918 3,538,947 

Decreases 0 0 0 0 0 

Depreciation charges -830,903 -200 -15,492 0 -846,595 

Adjustments 1,875,462 46,233 776 -1,918,243 4,228 

Closing balance 24,429,724 46,233 24,716 1,259,417 25,760,092 

2008. December 

Cost or fair value 61,290,670 303,020 957,712 1,295,941 63,847,343 

Cumulative depreciation -36,860,946 -256,787 -932,995 -36,523 -38,087,251 

Net value 24,429,724 46,233 24,717 1,259,418 25,760,092 


Opening balance 21,387,051 1,531 42,932 1,605 21,433,119 

Merger 0 0 0 0 0 

Revaluation 0 0 0 0 0 

Accrual 0 0 4,371 1,920,742 1,925,113 

Decreases 0 0 0 0 0 

Depreciation charges -844,077 -1,330 -22,214 0 -867,621 

Adjustments 0 0 1,605 -1,605 0 

Closing balance 20,542,974 201 26,694 1,920,742 22,490,611 

2007, December 

Cost or fair value 56,573,017 258,390 944,198 1,961,494 59,737,099 

Cumulative depreciation -36,030,043 -258,189 -917,503 -40,752 -37,246,487 

Net value 20,542,974 201 26,694 1,920,742 22,490,612 

3.2 Revaluations 

Buildings and other tangible fi xed assets of the Group were re-valued on 1 January 2004, using the monetary revaluation coeffi 

cients as part of the transition to IFRS (IFRS 1). The land included in the company assets is booked as fair value. The value of 

the land was subject to update on 31 December 2008, based on an evaluation carried out by independent external consultants 

resulting in an enhancement of around 421 thousand Euro, whose compensation was recognised in equity less the respective 

deferred tax. 

If tangible assets were shown at historical cost, the values in the balance sheet would be: 


31.12.2008 31.12.2007 

Acquisition value 20,891,129 17,353,785 

Cumulative depreciation 10,799,118 10,145,458 

Historic net value 10,092,011 7,208,327 

No pledges or guarantees exist on any assets. 



4. Intangible assets 

As at 31 December 2008 there were no Intangible Assets. 

5. Financial Investments 

5.1. Investments in group and associated companies 

This line includes the value of the shareholdings involved and loans granted. The movements during the year were as follows: 

60 

31.12.2008 31.12.2007 

Opening balance 124,446,805 129,965,394 

Share in profi t 0 0 

Increase in shareholding 2,870,870 1,269,165 

Decrease in shareholdings -250,000 0 

Other equity movements 0 992,801 

Impairment loss 0 0 

Loans granted 0 -7,280,555 

Supplementary services 18,488,000 -500,000 

Closing balance 145,555,675 124,446,805 

The acquisition of fi nancial holdings refers essentially to the acquisition of subsidiary capital: Aura de Agudo (884,628 Euro), 

Aura de Guijo de Coria (1,329,943 Euro), Efacec Central Europe (244,137 Euro) and C&S EFACEC MV Índia (376,763 Euro). The 

shareholdings of the company in the main group and associated companies, none of which are quoted on stock exchanges, were 

as follows: 

31.12.2008 31.12.2007 

Value % Holding Cap. Propr. Value % Holding Cap. Propr. 

Group companies 

Efacec Energia, Máq. Equip. Elect. S.A. 34,882,194 100.0% 52,506,403 34,882,194 100.0% 41,652,659 

Efacec Engenharia, S.A. 7,481,968 100.0% 18,856,650 7,481,968 100.0% 11,817,985 

Efacec Ambiente 1,246,995 100.0% 8,105,582 1,246,996 100.0% 7,830,747 

Efacec Serviços Manutenção Assistênca, S,A. 2,849,772 38.0% 8,427,993 2,849,772 38.0% 7,498,994 

Efacec Sistemas de Electrónica, S.A. 8,203,618 100.0% 21,187,713 8,203,618 100.0% 20,970,724 

Efacec Automação e Robótica, S.A. 6,572,918 100.0% 6,104,570 6,572,918 100.0% 4,336,310 

Efacec Investimentos e Concessões, SGPS, S.A. 1,350,000 75.0% 910,575 1,350,000 75.0% 849,152 

Efacec International Financing, SGPS 419,738 55.0% 732,067 419,738 55.0% 736,335 

Efacec Marketing Internacional, S.A. 3,307,628 100.0% 756,924 3,307,628 100.0% 1,827,662 

Gemp - Emprendim. Imobiliários, S.A. 142,157 100.0% 775,027 142,157 100.0% 810,859 

Empovar, S.A. 15,844,886 100.0% 4,210,845 15,844,886 100.0% 4,695,752 

Tech M5 Capital, SGPS 250,000 49.7% 1,438,875 

Efacec Angola, Lda. 1,269,165 98.3% 1,534,321 1,269,165 80.0% 539,540 

Efacec Moçambique, Lda. 5,649 2.4% 1,347,475 0 49.0% -1,697,601 

Efacec do Brasil, Lda. 521,813 3.9% 2,472,801 521,813 3.9% 3,089,311 

BAUEN Efacec, S.A. 679,797 76.6% 1,970,333 679,796 76.6% 1,197,045 

Efacec Praha, s.r.o. 263,223 100.0% 731,654 263,223 100.0% 979,817 

Efacec Malaysia SDN. BHD. (a) 12,097 1.0% 675,273 12,097 1.0% 658,736 

Efacec Sist. Venezuela, C.A. 88,721 65.0% 2,732 88,721 65.0% 2,583 

Efacec Central Europe Limited, SRL 244,137 100.0% 227,186 

Aura de Agudo, SL 884,628 100.0% 789 

Aura de Guijo de Coria, SL 1,329,943 100.0% -349 

C&S Efacec MV India Pvt. Ltd. 376,763 50.0% 441,452 

Efacec Contracting Central Europe GmbH 29,750 85.0% -315,518 


88,007,560 85,386,690 

EID - Emp. Invest. Desenvolv. Elect.,S.A. 2,319,737 25.0% 10,903,557 2,319,737 25.0% 9,825,135 

O&M Serviços – Operação e Manutenção Industrial, 

S.A. 

10,000 2.0% 997,035 10,000 2.0% 899,199 

Liaoyang EFACEC Elect. Equip. Corp. (b) 812,428 36.3% 2,146,955 812,428 36.3% 2,153,624 

3,142,165 3,142,165 

Total Inv. in Group and Assoc. companies 91,149,725 88,528,855

a) The last accounts available were as at December 2007. 

b) The last accounts available were as at November 2006. 

The values shown correspond to the cost of acquisition of the holdings, except in those cases where an impairment loss had been 

recorded, presented in the following table: 

Acquisition Cost Impairment Net Value 

Liaoyang EFACEC Elect. Equip. Corp. 2,458,442 -1,646,014 812,428 

Efacec Moçambique, Lda. 123,827 -118,178 5,649 

EFACEC Angola, Lda. 1,370,545 -101,380 1,269,165 

3,952,814 -1,865,571 2,087,242 

This line also includes benefi ts and fi nancing loans to the following subsidiaries and associated companies: 

Supplementary Services 

61 

31.12. 2008 31.12. 2007 

Efacec Energia, Máquinas e Equipamentos Eléctricos, S.A. 28,000,000 14,000,000 

Efacec Engenharia, S.A. 3,000,000 1,000,000 

Efacec Ambiente, S.A. 5,000,000 4,000,000 

Efacec Sistemas de Electrónica, S.A. 3,900,000 3,900,000 

Efacec Automação e Robótica, S.A. 2,000,000 600,000 

GEMP – Empreendimentos Imobiliários, S.A. 600,000 600,000 

Efacec Moçambique, Lda. 88,000 0 

Financing Loans 

42,588,000 24,100,000 

Empovar, S.A. 1,997,596 1,997,596 

Efacec Serviços de Manutenção e Assistência, S.A. 8,038,315 8,038,315 

Efacec Automação e Robótica, S.A. 0 0 

Efacec Investimentos e Concessões, SGPS, S.A. 1,319,420 1,319,420 

Efacec Angola, Lda. 350,171 350,171 

Efacec Moçambique, Lda. 112,448 112,448 

11,817,950 11,817,950 

Total Loans 54,405,950 35,917,950 

5.1 Financial investments in other companies 

This line includes the value of the shareholdings in Other companies and loans granted. The movements during the year were as 

follows: 

31.12.2008 31.12.2007 

Opening balance 11,517 15,365 

Increase in share capital 0 0 

Acquisition of investments 163,158 0 

Disposal of investment 0 -3,848 

Financing Loans 359,259 0 

Other 0 0 

Closing balance 533,934 11,517 

The movements within the period refer to the acquisition of a position in the share capital of MARL Energia - Central Fotovoltaica, 

SA and to the concession of a loan to the same company. 

6. Derivatives 

In relation to fi nancial risk management described in Note 2, the evaluation of fi nancial instruments as at 31 December 2008 and 

2007 was as follows: 


As at 31 December 2008, Efacec featured a portfolio of interest rate derivatives totalling 87 million Euro for BEI loans and Commercial paper (Note 

12), whose market valuation was negative by 2,347,029 Euro. 



62 

31.12.2008 31.12.2007 

Assets Liabilities Assets Liabilities 

Financing options - cash fl ow hedging 0 2,347,029 345,574 0 

Total 0 2,347,029 345,574 0 

Non-current 0 2,347,029 345,574 0 

Current 0 0 0 0 

The hedging option contracts were booked in Shareholders’ Funds as described in Note 2.2. The movement in the line Financial 

Instruments Reserves was the result of the change in fair value between the various reporting periods, less the related deferred 

tax assets/liabilities (note 15). 

7. Customers and accrued income 

31.12.2008 31.12.2007 

Customers - Current 34,407 22,224 

Customers - Related parties (Note 23) 0 239,371 

Accrued Income - multi-year contracts 0 0 

34,407 261,594 

Provision for customer accounts impairment 0 0 

Accounts Receivable from Customers - Net 34,407 261,594 

Accrued Income - not covered by IFRS 7 231,974 0 

Total 266,381 261,594 

Non-current 0 0 

Current 266,381 261,594 

8. Other debtors and deferred costs 


31.12.2008 31.12.2007 

Other Debtors 327,559 665,565 

- Impairment Losses -249,399 -249,399 

Accounts receivable from other Debtors - net 78,160 416,166 

Accounts receivable from related parties (Note 23) 51,136,467 21,396,294 

Other debtors - Financial assets IFRS7 51,214,627 21,812,461 

Other Debtors - not covered by IFRS7 26,242 28,257 

State and other public entities 46,219 1,649,928 

Deferred costs 7,870 12,342 

Total 51,294,958 23,502,987 

Non-current 462,598 27,000 

Current 50,832,360 23,475,987 

All third party non-current debts are due within fi ve years of the balance sheet date. 

As at 31 December 2008 and 2007, the values to receive from Other Debtors featured the following seniority analysis based on 

due dates for payment on balances outstanding: 

31.12.2008 31.12.2007 

Balances not due 

Balances due 

50,808,957 21,812,460 

Up to 90 days 0 0 

From 90 to 360 days 0 0 

Over 360 days 405,670 405,670 

Other debtors - fi nancial assets IFRS 7 51,214,627 22,218,130 

Impairment -405,670 -405,670 

Net balance of other debtors - IFRS7 50,808,958 21,812,460

9. Stocks 

The company features no stocks. 

10. Cash and cash equivalents 

11. Share Capital 

Cash and cash equivalents 31.12.2008 31.12.2007 

Cash and Sight Deposits 203,340 113,267 

Time Deposits 52,700,000 0 

Short-term cash investments 0 0 

52,903,339 113,267 

Other fi nancial investments 31.12.2008 31.12.2007 

Captive deposits 6,236,577 0 

The authorised capital is made up of 41,641,416 ordinary registered shares each having a par value of 1 Euro, and is entirely paid 

up. The company does not hold any own shares. 

12. Debt to Credit Institutions 

As at 31 December 2008 and 31 December 2007, loans and bank overdrafts, their average annual interest rates and other conditions 

were as follows: 

31.12.2008 31.12.2007 

Non-current 

Bank loans 18,000,000 22,500,000 


Current 

81,500,000 48,500,000 

Bank loans 4,500,000 4,500,000 


Bank current accounts 13,986,688 6,156,341 

105,986,688 18,156,341 

Total loans 187,486,688 66,656,341 

Bank financing 

Efacec Capital has a long-term loan from 16 November 2004 with the European Investment Bank that as at 31 December 2008, 

registered a value of 22,500,000 Euro, of which 4,500,000 Euro booked in current liabilities. The loan features half-yearly interest 

rates indexed to Euribor rate, plus a maximum spread of 0.13%. The fi rst capital amortisation was on 15 June 2008 and the others 

will be made on a yearly basis until 2013. 


On 8 July 2005, a Commercial Paper programme was agreed with a bank trade union, involving fi ve banks, up to a maximum 

value of 40,000,000 Euro. The programme has a contract period of 5 years with a requirement in excess of one year. The companies 

included in the Programme can issue Commercial Paper by direct placement or by auction. Efacec Capital made an issue of 

26,000,000 Euro which falls due on 12 January 2009. 

In November 2006, a Commercial Paper programme was agreed with the Santander Totta Bank to a maximum value of 7,500,000 

Euro. The programme has a contract period of 5 years with annual renewals. EFACEC Capital can issue Commercial Paper by direct 

placement. The current issues fall due on 13 de July de 2009. 

In November 2007, a Commercial Paper programme was agreed with the Fortis Bank to a maximum value of 12,500,000 Euro. 

The programme has a contract period of 5 years, which can be extended for periods of time to be agreed between the parties. The 

current issues fall due on 13 de November de 2009. 

63 



In April 2008, a Commercial Paper programme was agreed with the Santander Totta Bank to a maximum value of 20,000,000 

Euro. This programme has a contract period of 3 years, and its reimbursement is made through half-yearly and consecutive amortisations 

to the value of 5,000,000 Euro, as of the 2nd year of the Programme. The current issues fall due on 15 de October de 

2009. 

In June 2008, a Commercial Paper programme was agreed with Caixa Geral de Depósitos to a maximum value of 30,000,000 Euro. 

This programme has a contract period of 3 years with one year exemption period and the reimbursement is carried out through 

half-yearly amortisations to the value of 7,500,000 €. There are two simultaneous issues, one to the value of 10,000,000 € which 

falls due on 21 April 2009 and the other to the value of 20,000,000 € which falls due on 2 February 2009. 

In August 2008, a Commercial Paper programme was agreed with the BPI Bank to a maximum value of 15,000,000 Euro. The 

programme has a contract period of 6 months without renewal. The current issues fall due on 30 January 2009. 

In September 2008, a Commercial Paper programme was agreed with BARCLAYS to a maximum value of 10,000,000 Euro. This 

programme comprises Efacec Group Companies and has period of 5 years with yearly renewals. Efacec Capital carried out an issue 

for the total Programme that falls due on 8 de April de 2009. 

In October 2008, a Commercial Paper programme was agreed with the Banco Espírito Santo to a maximum value of 30,000,000 

Euro. This programme comprises Efacec Group Companies and has period of 5 years with yearly renewals. Efacec Capital carried 

out an issue for the total Programme that falls due on 05 May 2009. 


Bank overdrafts involve the use of current credit accounts according to limits and conditions previously negotiated with fi nancial 

institutions and without defi ned reimbursement periods, although they are assumed to be of short duration. The average rate of 

these credits is indexed to Euribor plus an average spread of 0.96%. 

Debt Maturity 

The maturity dates of the loans as at 31 December 2008 are as follows: 

< 1 year 1-5 years > 5 years Total 

Non-current 

Bank loans 18,000,000 18,000,000 


Bond loans 0 0 

Reimbursable Subsidies 0 

Other loans 0 

0 81,500,000 0 81,500,000 

Current 

Bank overdrafts 13,986,688 13,986,688 

Bank loans 4,500,000 4,500,000 


Bond loans 0 

Bank current accounts 0 

Reimbursable Subsidies 

Other loans 

0 

105,986,688 0 0 105,986,688 

Total loans 105,986,688 81,500,000 0 187,486,688 

Denomination of Loans 

The Company loans are all in Euro. 

Effective interest rates 

The effective interest rates as at the balance sheet date were as follows: 

64 

31.12.2008 31.12.2007 

Euro Euro 

Bank overdrafts 4.53% 4.91% 

Commercial paper 5.43% 4.74% 

Bank loans 3.50% 4.92%

The fair value of current and non-current bank loans is close to that of the balance sheet, in view of the fact that the contracted 

interest rate is the same as that of the market. 


During 2008, the net cash outfl ow of interest was 6,423 thousand Euro (Note 18). 

Due to the growth of Efacec Capital and accrued fi nancing needs, the gross fi nancial debt as at 31 December 2008 totalled 

187,487 thousand Euro. On the other hand, interest rates tended to rise until the end of the third quarter. As at 31 December 

2008, the overall average rate of fi nancing of Efacec Capital was 5.131%. 

Statistically, as at 31 December 2008, this rate meant an annual gross cost of 9,620 thousand Euro. On the assumption that the 

value of loans as of that date will continue, the sensitivity to changes in interest rates can be calculated as follows: 

December 2008 Final Rate Annual Cost Impact 

Reference fi gures (base 31 Dec.2008) 

Sensitivity 

5.13% 9,620,131 

If fi nal rate increases 1% 6.13% 11,494,998 1,874,867 

If fi nal rate decreases 1% 4.13% 7,745,265 -1,874,867 

December 2007 Final Rate Annual Cost Impact 

Reference fi gures (base 31 Dec.2007) 

Sensitivity 

4.81% 3,587,829 

If fi nal rate increases 1% 5.81% 4,333,739 745,910 

If fi nal rate decreases 1% 3.81% 2,841,919 -745,910 

If there were a worsening of the overall average rate of 1%, the annual interest cost would be 11,495 thousand Euro. If on the 

other hand there were a relief in overall interest rates of 1%, the annual interest rate cost would be 7,745 thousand Euro. The 

gross impact would be +/- 1,875 thousand Euro. 

Efacec Capital manages the interest rate risk through derivatives contracted on its medium and long-term fi nancing, thus enabling 

the impact of interest changes to be mitigated (Note 6). 

Unused Credit Lines 

The Company also has the following credit lines that have not yet been used: 

31.12.2008 31.12.2007 

At variable rates 

Due within one year 4,031,124 15,155,000 

Due after 1 year 0 12,500,000 

4,031,124 27,655,000 

The credit lines due up to one year are annually automatically renewed for working capital. 

13. Suppliers, creditors and accruals 

Suppliers 31.12.2008 31.12.2007 

Suppliers - Current account 133,907 10,331 

Suppliers - related parties (Note 23) 1,034,361 0 

Suppliers - bills payable 0 0 

Suppliers,invoices received and being checked -2,148 0 

1,166,121 10,331 

Fixed Assets Suppliers 74 412,611 

Total 1,166,195 422,942 


Current 1,166,195 422,942 

65 



Other Creditors 31.12.2008 31.12.2007 

Other creditors - various 356,433 53,545 

Other creditors: related parties 1,744,948 15,450,546 

Other debtors - Financial assets IFRS7 2,101,381 15,504,091 

Other various creditors not covered by IFRS7 245,736 0 

State and other public entities 914,434 281,294 

Cost Accruals: 390,856 545,616 

Cost Accruals - costs for work in progress 4,641 0 

Cost Accruals - remuneration to pay 218,248 148,476 

Cost Accruals - interest to pay 0 394,384 

Cost Accruals - insurance to pay 0 181 

Cost Accruals - other 167,968 2,576 

Total 3,652,407 16,331,001 


Current 3,652,407 16,331,001 

The current amount due to Suppliers, whether for services or fi xed assets, is almost entirely due within 90 days, which refl ects the 

normal conditions negotiated with the Company’s Suppliers. 

14. Deferred income 

There is no Deferred Income. 

15. Deferred taxes 

Deferred tax assets and liabilities are set off against each other if the company has a legally executable right to set off current 

tax assets against current tax liabilities, and when the deferred taxes concern the same tax authority. End of year values were as 

follows: 

2008 2007 

Deferred tax assets 

Deferred tax assets recoverable after 12 months 1,221,721 598,579 

Deferred tax assets recoverable within 12 months 0 0 

Deferred tax liabilities 

1,221,721 598,579 

Deferred tax liabilities recoverable after 12 months 3,531,672 3,513,491 

Deferred tax liabilities recoverable within 12 months 0 0 

3,531,672 3,513,491 

Total -2,309,951 -2,914,912 

The movements on deferred tax assets and liabilities during the year were as follows: 

Impairment 

Losses Inv. Fin. 

Impairment Losses 

Customers/Other 

66 

Options Adjust. IFRS Other Total 

As at 1 de January de 2007 564,025 0 15,447 27,432 606,904 

Carried to profi t and loss -294 0 -1,877 6,366 4,195 

Carried to equity 0 0 -12,520 -12,520 

Other variations -41,412 41,412 0 

As at 31 de December de 2007 522,319 41,412 0 1,050 33,798 598,579 

Carried to profi t and loss 0 0 0 -885 2,064 1,179 

Carried to equity 0 0 621,963 0 0 621,963 

Other variations 0 0 0 0 0 0 

As at 31,12,2008 522,319 41,412 621,963 165 35,862 1,221,721 

Deferred tax assets for provisions will be written off proportionately to the use of the related provisions. 

Deferred tax assets for provisions on investments correspond to shareholdings in Liaoyang Efacec Electric Equipment Corp. Ltd. 

and Portugal Space, SA. 

Deferred tax booked in shareholders’ funds during the period concerns hedging operations for fi nancing (Note 6).

Revaluation Options Total 

As at 1 de January de 2007 3,461,021 3,461,021 

Carried to profi t and loss -39,107 -39,107 

Carried to equity 91,577 91,577 

As at 31 de December de 2007 3,421,914 91,577 3,513,491 

Carried to profi t and loss -38,033 0 -38,033 

Carried to equity 147,790 -91,577 56,213 

As at 31.12.2008 3,531,672 0 3,531,672 

The deferred tax liabilities booked in Shareholders’ Equity relate to the update of the tax base for land and its revaluation to fair 

value in this fi nancial year. 

All deferred tax assets booked are based on a 26.5%- tax rate. 

16. Provisions for risks and charges 

67 

Pensions 

Financial Shareholdings 

Total 

As at 01.01.2007 


103,515 1,534,297 1,637,812 

Additional provisions 24,025 0 24,025 

Reversal of provisions 0 0 0 

As at 31.12.2007 127,540 1,534,297 1,661,837 


Additional provisions 7,790 0 7,790 

Reversal of provisions 0 0 0 

As at 31.12.2008 135,330 1,534,297 1,669,627 

This provision for fi nancial investment relates to fi nancial shareholdings that have impairment losses (Efacec Angola and Efacec 

Moçambique), the investment value of which is wholly provisioned. 

There is no environmental contingent liability. 



D. Notes to the Profit and Loss Account for the years ended 31 December 2008 and 2007 

17. Third Party Supplies and Services 

68 

2008 2007 

Subcontracts 0 0 

Specialised work 1,819,592 497,931 

Advertising and publicity 655,680 509,007 

Travel expenses and Accommodation 205,192 144,211 

Leasing and rentals 112,186 83,011 

Fees 29,591 8,527 

Fuel 26,381 19,146 

Expenses and representation 24,582 53,248 

Other supplies and services 141,392 253,791 

3,014,597 1,568,872 

The most representative line is that of specialised work, whose progress in 2008 is related to the high number of projects underway 

connected to the organization and internationalisation of the Group that the company heads 

18. Financial Results 

18.1 Financial Costs - Net 

2008 2007 

Supported interest rates 6,423,212 3,587,936 

Obtained interest rates 3,385,127 1,660,236 

Net interest rates 3,038,085 1,927,700 

Net foreign exchange gains /losses -356 -348 


Losses/Gains in group and associated companies 

3,066,172 1,936,699 

2008 2007 

Dividends received 20,695,444 26,469,663 

Other 0 0 

The dividends received by the company were as follows: 


20,695,444 26,469,663 

2008 2007 

Efacec Sistemas de Electrónica, S.A. 3,355,654 13,500,000 

Efacec Energy, Mach. 15,484,000 5,300,000 

Efacec Ambiente, S.A. 0 3,360,000 

Efacec Ambiente, S.A. 0 3,092,000 

Tech M5 Capital, SGPS, SA (a) 0 905,037 

Efacec Serv. Manutenção e Assistência, SA 418,000 312,626 

Efacec Marketing Internacional, S.A. 1,436,000 0 

O&M Serviços, S.A. 1,790 0 

20,695,444 26,469,663 

b) Merger in 2006 with Efacec – Sistemas Electrónica, SA

19. Income Tax 

The reconciliation of the tax rate is as follows: 

20. Profit per share 

2008 2007 

Current tax 85,914 -220,588 

Deferred tax (note 15) 39,212 43,302 

Tax charge for the period 125,126 -177,286 

Tax from previous years 4,456 46,331 

129,582 -130,956 

2008 2007 

Profi t before tax 19,950,656 26,907,621 

Theoretical rate 26.5% 26.5% 

Theoretical tax 

Permanent differences 

5,286,924 7,130,520 

Dividends received -5,484,293 -7,014,461 

Costs not accepted fi scally 13,314 89,265 

Other 58,929 -28,038 

Tax charge for the period -125,126 177,286 

Effective rate -0.6% 0.7% 

Basic 

The basic profi t per share is calculated by dividing shareholders’ profi t by the average weighted number of ordinary shares issued 

during the year, excluding ordinary shares acquired by the company and held as own shares. 

2008 2007 

Profi t attributable to shareholders 20,080,238 26,776,666 


Basic profi t per share (€ per share) 0.48 0.64 

Diluted 

The diluted profi t per share is calculated adjusting the average weighted number of shares in circulation by including the impact 

of the conversion of all potentially diluting ordinary shares. In view of the fact that there are no options or convertible obligations 

on shares, the diluted profi t per share is equal to the basic profi t per share. 

21. Dividends per share 

The dividend distribution of Efacec Capital SGPS, for 2008 and 2007, including anticipated distributions of profi t was as follows: 

69 

2008 2007 



Pertaining to fi nancial year 2007 13,221,000 12,216,000 


Total 19,255,000 19,753,096 


Dividends per share (€ per share) 0.46 0.47 



E. Other Notes 

22. Contingencies 


The company has contingent liabilities for bank guarantees and others, and other contingencies connected with its business. It is 

not believed that any signifi cant liabilities will arise from the contingent liabilities. 

22.1 Commitments 

70 

2008 2007 

Bank Guarantees 93,810,566 36,135,702 

Investment commitments 

There are no commitments assumed by the company to acquire tangible or intangible fi xed assets. 

Commitments for operational leases – where the Group is lessee 

The company leases a number of vehicles through irrevocable leasing contracts. The contracts have various lease periods, readjustment 

clauses and renewal rights. At the date of the balance sheet, the company continued to have Long-Term Rental contracts 

(“Renting”) considered as operational leases, for which future rental payments due totalled 176,714 Euro, with the following maturity 

dates: 

23. Transactions with related parties 

2008 2007 

Within 1 year 66,343 74,801 

Between 1 and 5 years 110,371 124,997 

Over 5 years 0 0 

176,714 199,798 

Those entities which have a qualifi ed shareholding in the group are: 

Efacec Sistemas de Gestão, S.A. 49.20% 

Têxtil Manuel Gonçalves, S.A. 25.40% 

José de Mello - SGPS, S.A. 25.40% 

The following transactions took place with related parties (Group companies, Associates and Directors): 

23.1 Transactions in 2008 and 2007 

2008 2007 

Financial transactions 


Loans granted 24,674,954 14,393,837 




20,693,654 26,469,663 


Shareholders 

1,790 0 


8,471,036 31,549,665 

%

2008 2007 

Current transactions 


Operatinonal income and gains 8,573,926 6,239,808 

Operational costs and losses 253,998 399,109 

Financial income and gains 3,085,694 1,653,563 

Financial costs and losses 

Shareholders 

77,428 981,718 

Operatinonal income and gains 450,406 30,000 

Operational costs and losses 356,774 350,963 

Financial costs and losses 358,558 52,079 

11,063,268 6,139,503 

The commercial conditions under which these transactions and services took place were under the same conditions for independent 

third parties. 

23.2 Final balances resulting from commercial transactions 

2008 2007 

Debts owed by related parties 


Loans granted 41,997,890 17,479,207 

Customers and income accruals (note 7) 0 205,589 


Shareholders 

9,055,925 3,581,181 

Customers and income accruals (note 7) 0 33,781 



59,941 313,195 

Others debtors and deferred costs (note 8) 22,711 22,711 

51,136,467 21,635,665 

2008 2007 

Debt to related parties 



Suppliers (Note 13) 603,980 0 


Shareholders 

473,568 3,016,873 


Suppliers (Note 13) 430,381 0 



194,879 101,625 

Other creditors (note 13) 11,576 11,576 

11,074,310 22,550,545 

71 



23.2 Detail by Entity of Balances with Related Parties 

2008 2007 

Group companies: 

Efacec Sistemas de Electrónica, SA 14,307,573 11,755,832 

Aura de Guijo de Coria, SL 9,008,930 0 

Aura de Agudo, SL 6,011,070 0 

Efacec Marketing Internacional, SA 4,059,963 -627,070 

Efacec - Energia, Máquinas e Equip. Eléctrico, SA 3,839,207 1,131,430 

Efacec Automação e Robótica, SA 3,200,394 -168,290 

Efacec Engenharia,SA 1,890,434 -4,218,454 

Efacec - Serviços de Manutenção e Assistência, SA 1,441,414 3,408,685 

Efacec Sistemas de Electrónica, SA 1,193,230 0 

Efacec Contracting Central Europe GmbH 725,000 0 

Efacec Angola, Lda. 435,598 450,359 

Efacec Ambiente, SA 337,590 -5,738,947 

Tech M5 Capital, SGPS 0 -1,186,000 

Other 2,460,948 1,121,089 

Shareholders: 

48,911,341 5,928,633 

Efacec Sistemas de Gestão - Loans -8,295,000 -7,100,000 

Efacec Sistemas de Gestão - Current -565,319 245,351 

Other entities: 

-8,860,319 -6,854,649 

Portugal Space, S.A. 156,271 156,271 


167,407 167,407 

Impairment -156,271 -156,271 

23.4 Commitments and contingencies 

There are no purchase commitments or contingent liabilities pertaining to related parties. 

23.5 Remuneration of the Board of Directors 

Leça do Balio, 27 March 2009 

The Chartered Accountant 

Ms. Ana Paula Baltar Castro Ferreira 

The Board of Directors 

72 

11,136 11,136 

2008 2007 

Remunerations 1,458,704 667,103 

Life insurances / Pension Plans 5,646 28,700 

Allowances 50,159 0 

1,514,509 695,803 

Mr. Francisco de la Fuente Sánchez - Chairman 

Mr. Luís Filipe da Conceição Pereira - Vice-Chairman 

Mr. Alberto Joaquim Milheira Barbosa - Board Member 

Mr. Alberto de Freitas Martins - Board Member 

MR. Artur Fuchs - Board Member 

Ms. Maria do Rosário Mayoral Robles Machado Simões Ventura - Board Member 

Prof. António do Prado Nogueira Leite - Board Member 

Prof. Daniel Bessa Fernandes Coelho - Board Member 

Prof. João Afonso Ramalho Sopas Pereira Bento - Board Member 

Mr. José Manuel Gonçalves de Morais Cabral - Board Member 

Mr. Luís Miguel Nogueira Freire Cortes Martins - Board Member

To the Shareholders, 

Report and Opinion of the Supervisory Board 

1. In accordance with the law and the mandate conferred upon us, we herewith submit on our report and opinion on the Board 

of Directors’ Report and the Consolidated and Individual Financial Statements of EFACEC Capital, S.G.P.S., S.A., presented by the 

Board of Directors for the year ended 31st December 2008; 

2. The Report and the Consolidated and Individual Financial Statements show clearly what happened during the fi nancial year and 

from its contents it can be inferred the reality of the company inclusively its perspectives for the future in accordance with clause 

66 of the Code of the Commercial Companies; 

3. We did not record any situation that did not respect the applicable statutes or legal rules; 

4. We analysed the Legal Certifi cation of the Consolidated and Individual Statements with which we agree and appended hereto. 

On these terms we are of the opinion that the General Shareholders Meeting approves: 

Porto, 31st March 2009 

a) The Report and the Consolidated and Individual Financial Statements for the year ended 31st December 2008; 

b) The proposal for profi t appropriation, as stated in the Annual Report. 

The Supervisory Board 

Mr. Luís Valente de Oliveira 

Chairman 

Ms. Maria Leonor Aires 

Board 

Mr. Luís Black Freire d’Andrade 

Board 

73 



Introduction 

Report of Statutory Auditors 

1. We have audited the consolidated and individual fi nancial statements of EFACEC Capital, SGPS, S.A., comprising the consolidated 

and individual balance sheet as at 31 December 2008, (which shows total assets of Euros 655,729,383 and Euros 283,772,677, 

respectively, a total consolidated equity of Euros 79,322,337 including total minority interests of Euros 3,386,358, an individual 

equity of Euros 75,624,059, and a net consolidated profi t of Euros 24,136,981 and a net individual profi t of Euros 20,080,238), 

the consolidated statements of income by nature, the consolidated statement of changes in equity and the consolidated cash 

fl ow statement for the year then ended and the corresponding notes to the accounts. 

Responsibilities 

2. It is the responsibility of the Company’s Management to prepare the Directors’ Report and Consolidated and Individual Financial 

Statements that present fairly, in all material respects, the fi nancial position of the company and its subsidiaries, the consolidated 

and individual changes in equity, the consolidated and individual result of their operations, and their consolidated and individual 

cash fl ows, as well as to adopt appropriate accounting policies and criteria and to maintain adequate systems of internal 

accounting controls. 

3. Our responsibility is to express an independent and professional opinion on these consolidated and individual fi nancial statements 

based on our examination. 

Scope 

4. Except as discussed in the paragraph 7 below, we conducted our examination in accordance with the Standards and Technical 

Recommendations approved by the Institute of Statutory Auditors which require that we plan and perform the examination to 

obtain reasonable assurance about whether the consolidated and individual fi nancial statements are free of material misstatement. 

Accordingly, our examination included: (i) verifi cation that the subsidiary´s fi nancial statements have been examined 

and for the cases where such an examination was not carried out, verifi cation, on a test basis, of the evidence supporting the 

amounts and disclosures in the consolidated fi nancial statements, and assessing the reasonableness of the estimates, based on 

the judgments and criteria of Management used in the preparation of the consolidated and individual fi nancial statements; (ii) 

verifi cation of the consolidation operations and, when applicable, the utilization of the equity method; (iii) assessing the appropriateness 

and consistency of the accounting principles used and their disclosure, as applicable; (iv) assessing the applicability 

of the going concern basis of accounting; and (v) evaluating the overall presentation of the consolidated and individual fi nancial 

statements. 

5. Our audit also covered the verifi cation that the consolidated and individual fi nancial information included in the management 

report is in agreement with the consolidated and individual fi nancial statements. 

6. We believe that our examination provides a reasonable basis for our opinion. 

Qualifi cation 

7. The fi nancial statements of the subsidiary, Efacec Brasil, have not been integrated for consolidation purpose, as no fi nancial 

information was available at year end. As a result, we cannot determine the effect on Consolidated Financial Statements as at 

31 December 2008. 

Opinion 

8. In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary, if the scope 

limitations referred to in paragraph nº 7 above had not existed, the consolidated and individual fi nancial statements referred to 

above, present fairly in all material respects, the consolidated and individual fi nancial position of EFACEC Capital, SGPS, S.A as 

at 31 December 2008, the consolidated and individual results of their operations and their cash fl ows for the year then ended 

in accordance with International Financial Reporting Standards as adopted by the EU. 

Porto, 3 April 2009 

PricewaterhouseCoopers & Associados, S.R.O.C., Lda. 

Represented by: 

António Joaquim Brochado Correia, R.O.C. 

74

Notes to the consolidated financial statements - Efacec

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