Notes to the consolidated financial statements - Efacec

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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 2008 Consolidated and Individual Financial Statments
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
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Page 5 and 6: Non-current assets EFACEC Capital,
Page 7 and 8: EFACEC Capital, S.G.P.S., S.A. and
Page 9 and 10: EFACEC Capital, S.G.P.S., S.A. and
Page 11: In view of the fact that applying t
Page 15 and 16: 1.11 Accounts receivable from custo
Page 17 and 18: 2. Financial risk management 2.1 Fa
Page 19 and 20: C. Segment Information 3. Reporting
Page 21 and 22: D. Notes to the Balance Sheets as a
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Page 31 and 32: Companies and has period of 5 years
Page 33 and 34: At variable rates 32 31.12.2008 31.
Page 35 and 36: The amount shown as a reduction in
Page 37 and 38: 24. Dividends per share The dividen
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Page 43 and 44: G. List of companies consolidated 3
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Page 49 and 50: Efacec Capital, SGPS, S.A. Consolid
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Page 53 and 54: A. General information Notes to the
Page 55 and 56: in the profi t and loss account of
Page 57 and 58: 1.16 Subsidies Subsidies received a
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9. Stocks The company features no s
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The fair value of current and non-c
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Revaluation Options Total As at 1 d
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19. Income Tax The reconciliation o
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2008 2007 Current transactions Grou
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To the Shareholders, Report and Opi
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Notes to the consolidated financial statements - Efacec

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