Notes to the Financial Statements - Efacec

A. General Information
Notes to the Financial Statements
The activity of EFACEC Capital, S.G.P.S, 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 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 its registered Offi ce at Arroteia, parish of
Leça do Balio, Matosinhos in Portugal.
B. Summary of main accounting policies used
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.
1.1 Basis of Preparation
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 just value.
For the fi rst time in 2007, the International Financial reporting Standard IFRS 7 was used, which is compulsory for fi nancial years
after 1 January 2007.
During the period, the following Standards became mandatory:
- IFRIC 7- Restatement approach as specifi ed in IAS 29;
- IFRIC 8- Scope of IFRS 2;
- IFRIC 9 – Embedded Derivatives;
- IFRIC 10 – Interim Financial Reporting and Imparity.
The adoption of these standards did not have any signifi cant impact on the accounting policies of the company.
At the end of the year, the following standards were issued which were not mandatory as at 31 December 2007:
- IAS 23 – Cost of Borrowings – 2007 update;
- IFRS 8 – Operational Segments
- IFRIC 13 – Customer Retention Programmes;
- IFRIC 11 – Own Shares Transactions
- IFRIC 12 – Concessionary Contracts
In view of the fact that applying these standards was not mandatory for the year beginning 1 January 2007, 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 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.
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2007 Consolidated and
Individual Financial Statments