5. - Secil

NOTES ON CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2008.
(Amounts presented in Euro unless otherwise
stated)
SECIL GROUP (“Group”) comprises Secil –
Companhia Geral de Cal e Cimento, S.A.
(“Secil”) and its subsidiaries. Secil was incorporated
on 27 June 1918, and has as its
main object the production and trade of
cement produced in its Outão plant, Setúbal,
and has several depots throughout Portugal.
Head Office:
Outão, Setubal
Share Capital:
Euros 264 600 000
N.I.P.C.:
500 243 599
Secil is the main company of a Group operating
in Portugal, Tunisia, Spain, Angola,
France, Lebanon and Cape Verde. Its core
business covers cement production,
through its subsidiaries, in its plants in
Outão, Maceira, Pataias (Portugal), Gabés
(Tunisia), Lobito (Angola) and Sibline (Lebanon),
premixed concrete production and
trade, aggregates, quarrying, through its
Sub-Holding company Secil Betões e
Inertes, SGPS, S.A., incorporated on 29
March 2000.
These consolidated financial statements
were approved by the Board of Directors
on 5 March, 2009.
The board members, who sign this
report, declare that, according to their knowledge,
the information herein contained
was prepared in accordance with applicable
Accounting Standards, giving a true view
of assets and liabilities, financial position
and results of companies included in the
Group consolidated financial statements.
1. SUMMARY OF MAIN ACCOUNTING
POLICIES
The main accounting policies applied in the
preparation of the consolidated financial
statements are set out below.
5. Notes of the Consolidated
Financial Statements
1.1. BASIS OF PRESENTATION
In 2007, the board of directors decided to
reformulate the presentation of the Group’s
financial information, anticipating the gradual
implementation of the New Portuguese
Accounting System (“SNC” Sistema de
Normalização Contabilística) aimed at the
following: (i) Compliance with legal and
accounting rules and standards of Portugal’s
official plan of accounts; (ii) Presentation of
accurate financial information aligned with
internationally accepted accounting standards
and disclosure requirements, as required
by the “SNC”.
1.2. BASIS OF PREPARATION
The Group’s consolidated financial statements
were prepared in accordance with
generally accepted accounting principles
in Portugal, adapted with the application
of certain International Financial Reporting
Standards, namely, goodwill depreciation,
actuarial gains and losses on defined
benefit plans and derivative financial instruments,
laid out in IFRS 3, IAS 19 and
IAS 39, respectively.
In 2005, with effect from January 1,
2004, the Group ceased the periodic amortisation
of goodwill. Only impairment losses
on goodwill are registered in the
income statement.
In 2006 the Group changed its accounting
policy related to the recognition of
actuarial gains and losses, applying IAS
19, published by the IASB on December
16, 2004 and approved by Regulation
1910/2005 of the European Commission
on November 8, 2005, which introduced
an option to recognise actuarial gains and
losses of defined benefit plans directly
through equity.
These consolidated financial statements
were prepared on a going concern
basis, from accounting records of companies
included in the consolidation scope
herein (Note 43) and based on historical
cost, except for CO 2 emission allowances
and financial instruments which are
measured and reported at fair value (Notes
16 and 32).
The preparation of the financial statements
requires the use of estimates and relevant
judgements when implementing the Group’s
accounting policies. Significant estimates
and assumptions involving a higher degree
of judgment or complexity are disclosed in
Note 3.
1.3. BASIS OF CONSOLIDATION
1.3.1. SUBSIDIARIES
Subsidiaries are all entities over which the
Group has the power to determine their
financial and operating policies, generally
considered to exist where the Group holds,
directly or indirectly more than 50% of voting
rights. The existence and the effect of potential
voting rights, whether exercisable or
convertible are considered when the Group
assesses its control. Subsidiaries are fully
consolidated from the date on which control
is transferred to the Group and are excluded
from consolidation from the date on
which control ceases.
The shareholders’ equity and net profit of
these companies that are attributable to
third parties are presented separately in the
consolidated balance sheet and consolidated
income statement under the caption
“Minority interests”. Companies included in
the consolidated financial statements are
disclosed in Note 43.
The acquisition of subsidiaries is accounted
for on the purchase method. The cost of
an acquisition is measured by the fair value
of the identifiable assets, equity instruments
issued and liabilities incurred or assumed at
the date of the transaction, plus costs
directly attributable to the acquisition.
Identifiable assets and liabilities and contingent
liabilities acquired in a business combination
are measured initially at their fair
value on acquisition date, irrespective of the
existence of any minority interest. The
excess of the acquisition cost over the fair
value of the Group’s share of the identifiable
net assets acquired is recorded as
Goodwill, as shown in Note 15.
When the Group acquires the control of
an associate, and commences with the