CUF - QUÍMICOS INDUSTRIAIS, S.A.
1
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
INDEX
CORPORATE BODIES  ��������������������������������������������������������������������������������������������������������������������������4
MANAGEMENT REPORT  ���������������������������������������������������������������������������������������������������������������������6
CONSOLIDATED FINANCIAL STATEMENTS  ��������������������������������������������������������������������������������������23
NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2014  ���������������������������������������������������31
AUDITOR’S REPORT AND OPINION  ���������������������������������������������������������������������������������������������������76
LEGAL CERTIFICATION OF ACCOUNTS  ���������������������������������������������������������������������������������������������80
2
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
3
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CORPORATE BODIES
GENERAL MEETING
CHAIRMAN OF THE BOARD
Dr. Alexandre Cabral Côrte-Real de Albuquerque
SECRETARY
Dr. Fernando Jorge Gonçalves Guedes de Figueiredo
THE BOARD OF DIRECTORS
CHAIRMAN
Eng.º João Maria Guimarães José de Mello
MEMBERS
Eng.º João Jorge Gonçalves Fernandes Fugas
Dr. André Cabral Côrte-Real de Albuquerque
Dr. Luis Augusto Nesbitt Rebelo da Silva
SOLE AUDITOR
ERNST & YOUNG AUDIT & ASSOCIADOS - SROC, S.A.
ALTERNATE AUDITOR
Dr. Paulo Jorge Luis da Silva
4
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
5
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
MANAGEMENT REPORT
6
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CUF – QUÍMICOS INDUSTRIAIS, S.A.
MANAGEMENT REPORT
INDIVIDUAL AND CONSOLIDATED FOR 2014
To the Shareholders,
According to the Law and the Articles of Association, the Board of Directors hereby submits to the General
Meeting its Management Report and the Financial Statements relating to 2014.
7
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
INDEX
1. MACRO ECONOMIC ENVIRONMENT  ����������������������������������������������������������������������������������9
2. HIGHLIGHTS FOR THE YEAR  �������������������������������������������������������������������������������������������10
3. EVOLUTION OF MAIN INDICATORS  ���������������������������������������������������������������������������������12
4. COMPANIES INCLUDED IN THE CONSOLIDATION  ����������������������������������������������������������������13
5. CUF – QUÍMICOS INDUSTRIAIS, S.A. - ACTIVITIES AND RESULTS  ����������������������������������13
6. ECONOMIC AND FINANCIAL ANALYSIS  ��������������������������������������������������������������������������18
7. SUBSIDIARIES ACTIVITY  �������������������������������������������������������������������������������������������������19
8. OUTLOOK FOR 2015  ��������������������������������������������������������������������������������������������������������21
9. PROPOSAL FOR THE APPROPRIATION OF NET INCOME  �������������������������������������������������21
10. FINAL NOTE   �����������������������������������������������������������������������������������������������������������������22
8
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
1. MACRO ECONOMIC ENVIRONMENT
In 2014 the world economy grew by 3.3% falling behind an
estimated growth figure of 3.7%. This difference between
estimates and effective figures was seen in Europe, the
US and Japan’s economies since 2008, reflecting a loss of
vitality in these developed economies; this performance
stemmed from the financial crisis of that year, which in
turn resulted from older but hidden vulnerabilities. This
link between the financial crisis and the growth crisis
creates a complex pattern, as the short term adjustments
that had to be made may hide a persistent structural
growth crisis that will ultimately create the background
of financial crises - this means that macro adjustments to
respond to the financial crisis may not be a lasting solution
if the stagnating trend in economies, production and
income is not duly dealt with.
The evolution of the world economy did not favour the
recovery of the Portuguese economy, which had to
correct its major imbalances without the help of strong
and consistent demand from external markets – which
is a greater disadvantage in small economies, as they
need external scale to escape the smallness of their own
market, i.e. a market that no longer has the power to
meet citizens expectations or to provide the State with the
revenues it needs to finance public policies; all the more
since the State cannot continue to appeal to indebtedness
to complement its insufficient tax revenues.
In fact, amongst developed economies only the United
States and the United Kingdom managed to outperform
the GDP figures achieved in 2007, whilst the Euro Zone and
Japan still could not. On the other hand, developments
which might have favoured Portugal, such as the drop
in oil prices (which tumbled by 55% in the second half
of 2014) have finally revealed onerous for markets with
which Portugal was straightening its commercial and
financial ties: benefits obtained on the supply side were
diminished since demand decreased.
A relative rebound of the US economy was possible
thanks to an encouraging monetary policy, based on
non conventional measures, such as the purchase of
assets by the Federal Reserve which, in normal economic
times, would have led to higher growth and inflation.
Considering the volume of resources used, the fact that
growth stood at 2.4% and inflation practically did not
change confirms that the US economy did not recover its
9
ANNUAL REPORT 2014
balanced patterns, and that uncertainty and insufficient
demand still linger. Unemployment fell significantly (from
10% in 2009 to 6.5% in 2014), but the participation rate in
relation to active population also fell from the usual 66%
to 62.5%, a figure that had not been observed since the
80’s (when female labour was much smaller).
The factors favouring the US recovery were fiscal easing
(moving from a tight phase to the current neutral one)
and a recovery of the real estate market, which, combined
with decreasing oil prices, contributed to boost available
income, and make internal demand the key growth driver.
The valuation of the US Dollar (nearly 6% in real terms,
but of 25% over the last four years, whilst the Yen fell by
8% and the Euro by 2%) adversely affected exports; on the
other hand, the drop in oil prices led to lower investment
in the energy sector. Inflation remained low, sustained
by falling oil prices and a strong dollar, whilst interest
rate continued at historically ground-levels - waiting for
inflation indications which continue not to be seen.
In the United Kingdom, the evolution of the growth
trend is similar to that of the US - 2.6% in 2014 despite a
decrease in exports to Europe, as demand from the Euro
Zone declined. Inflation remained at the reference value
of 2% also due to the decrease in oil prices. As far as wages
are concerned, the trend continued to be of low growth
pace, thus avoiding any change in the monetary policy of
low interest rates.
In the Euro Zone, growth continued lower than expected,
particularly in France, Italy and Germany, as balance sheet
corrections were not seen through; unemployment is still
high, and expansion prospects are dim, failing to benefit
from the downward trend in oil prices. In Ireland and
Spain, competitiveness gains in costs and a reinforcement
in corporate balance sheets consolidated the economic
rebound. The current account remained positive, as
result of a decrease in imports, competitiveness gains in
peripheral countries and Germany’s continued surpluses.
However, banking recapitalisation and necessary balance
sheet corrections continued to restrain credit. In general,
efforts made to boost growth continued to be hampered
by the fragmentation of financial markets, unemployment
levels, structural rigidity factors and obstacles to the
implementation of fiscal correction measures. It was
against such background that in June the European
Central Bank announced that it would start buying assets,
reducing rates and supplying liquidity; the ECB balance
CUF - QUÍMICOS INDUSTRIAIS, S.A.
sheet expansion goal was fixed at 30%, leading to a
devaluation of the Euro.
In Japan growth was lower than expected - standing at
0.2%, which was due in part to an increase in consumption
tax in April 2014, but also because exports did not benefit
from the devaluation of the Yen. The relocation of
companies abroad and an increase in energy prices due
to the shutting down of nuclear plants led to a decrease
in demand; the decrease in oil prices will probably help
regaining some ground in this field. The central bank
announced strong monetary stimulus in June, expanding
the bank’s balance sheet to 70% of GDP, viewing to boost
demand and create inflationary pressures.
The Chinese economy performed quite differently than
its western counterparts. In the Chinese case, the goals
set forth were the control of financial vulnerabilities and
installed capacity surpluses - a consequence of the rapid
growth of the previous years leading to imbalances in
sectors such as civil construction, naval construction
and renewable energies. Restrictions to credit growth
reflected in the real estate and investment markets,
leading to decreasing demand. In order to prevent these
counterbalancing measures from triggering a sharp fall in
economic activity, the Chinese authorities set in motion a
package of sectorial stimulus, such as infrastructure and
real estate renovation projects, tax exemption measures
for small and medium companies, while reducing bank
reserve requirements, but imposing a reduction in deposit
and loan interest rates. Despite these restrictive measures,
in 2014 the economy grew by 7.4% and inflation rate
remained below the reference value of 3%.
The Portuguese economy, subject to the constraints of
its adjustment programme, continued working towards
readjusting its key indicators, within the boundaries
of internal devaluation. During the first three quarters
of 2014 the economy remained stable, but it started
recovering towards the end of the year, continuing the
slow march started in 2013; it ended the year with a
0.9% growth, which is marginally higher than the average
of the Euro Zone. The current and capital account grew
by 2.6%, and the goods and services account evolved
upwards by 1.6%; the price index dropped by -0.1%.
Internal demand rose by 2.3%, whilst gross fixed capital
formation increased by 2.2%. Private consumption grew
by 2.2% and public consumption fell by -0.5% in relation
to the previous year. Domestic consumption remained
10
ANNUAL REPORT 2014
tightened by the indebtedness of the private sector and
the fiscal consolidation process, although a strong impulse
from buoyant exports allowed maintaining surplus in the
current and capital balance. Notwithstanding, the latent
threat of adjustment processes persists: exports grew by
2.6%, but imports rose by 6.3%, in line with 2013; this
reflects the combined effect of the need to import in order
to export and the recovery of imports following a short
period of self-restraint in demand; however, this normal
evolution should not make us forget that new imbalances
are still possible if the pace of exports is lost, or if imports
are intended for internal consumption, which would not
be helping exports and will hamper internal production.
The main risk which the Portuguese adjustment
programme faced was a milder than expected rebound
of Eurozone and emerging economies, which resulted
in lower than projected foreign trade flows. As the
Portuguese economy is conditional upon its progress in
exports, the maintenance of surplus in the current and
capital account is the key indicator to be followed. In
fact, growth potential is constrained by the combined
effect of deleveraging in the public and private sectors,
demographic developments, limited levels of productive
capital per worker and reduced dynamism of major trade
partners, but it will also be influenced by the events
occurred in the banking sector, which will alter traditional
decision-making circuits.
The Portuguese economy needs added scale to have
growth programmes, but it also needs scale to consolidate
its internal devaluation programme in order to gain
competitive advantages. Finally, the evolution of European
institutions - which must also consolidate at European
scale - is what might best contribute to secure the results
obtained in 2014: these results still do not allow us to
conclude that the 2007-2008 crisis was surmounted, but
they are the results required to participate in European
assistance programmes.
2. HIGHLIGHTS FOR THE YEAR
During the year under review all plants operated at the highest
production levels seen since the Capacity Expansion Plan was
completed.
Amongst the relevant facts with significant impact on
2014 accounts (well below estimated figures), we point
out the following:
CUF - QUÍMICOS INDUSTRIAIS, S.A.
• A sharp fall in benzene prices in the last quarter
of the year had a double impact: on the one hand, an
immediate decrease in the price of finished product, and
on the other hand, the impossibility of reflecting such
figures on the cost of the raw material integrated in the
finished product - given the existence of stock - leading to
a decrease in margins;
• The unexpected shut-down of DOW Europe’s plant
(our main client) during December;
• The elimination of reaction water inventory,
accumulated from previous years; this decision viewed
to optimise operations, given the production levels
achieved,.
As continuously repeated in previous years reports,
conditions prevailing in the domestic energy market
associated with energy prices, continue to be a difficult
factor to control; however, a strict and close supervision of
these production factors combined with an efficient plant
management and negotiations with main suppliers, have
permitted to mitigate the impacts of energy prices.
During the year under review CUF-QI remained focused
on obtaining relevant operational improvements at the
following levels:
• industrial competitiveness;
• search for new production technologies, including
disruptive ones, which saw relevant developments
during the year (patent applications);
• automation and control operations and collection
of information;
• mprovement of maintenance actions, resulting
in increasing average operating availability, reflecting
high reliability levels.
Particular care was also given to SHE (safety, hygiene and
the environment) issues, as defended by the company
throughout its long history, with excellent results as will
be described later in this report.
In line with improving competitiveness goals at the
Estarreja industrial site, CUF and its main client DOW
Europe continued to bank on measures to optimise
operations. During the current year, these activities
moved at slower pace than in previous years; nonetheless,
positive results were recorded on both sides.
Within the scope of the “aniline over the fence” strategy
followed over the past few years, international contacts
11
ANNUAL REPORT 2014
continued and will continue to be made, increasing our
expectations in relation to this strategic line.
CUF - QUÍMICOS INDUSTRIAIS, S.A.
3. EVOLUTION OF MAIN INDICATORS
Unit
2010
2011
2012*
2013
2014
Turnover
M€
233
254
320
329
350
Operating Cash Flow (EBITDA)
M€
22
31
33
34
31
Operating Results (EBIT)
M€
6
12
15
15
13
Operating Results /Sales
%
2,7
4,7
4,6
4,7
3,6
Financial costs
M€
4,1
6,1
6,3
5,1
4,4
Profit before tax
M€
1,6
5,5
9,2
10,5
8,4
Net profit
M€
2
5
6
7
5,5
Cash Flow (NP+Amort.+Provisions)
M€
18
25
25
26
24
Equity**
M€
88
91
100
80
88
Net assets
M€
295
290
310
254
242
Financial liabilities
M€
159
155
139
121
102
%
30
31
32
31
36
Financial liabilities/EBITDA
Number of x
7,2
5
4,2
3,6
3,3
Average no. of employees
nr
343
337
336
336
338
Sales per employee
€th
650
753
954
979
1036
Equity/Assets Ratio
*In 2013 the company restated a number of financial expenses which were formerly recognises as Other Expenses 2012 were thus adjusted accordingly
** In 2013, following Dividend Distribution
* Not including AQP personnel
12
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
4. COMPANIES INCLUDED IN THE CONSOLIDATION
Equity Holding
Consolidation
method
CUF – Químicos Industriais, S.A.
100%
Full consolidation
AQUATRO – Projecto e Engenharia, S.A.
100%
Full consolidation
ELNOSA – Eletroquímica del Noreste, S.A.
100%
Full consolidation
NUTRIQUIM – Produtos Químicos, S.A.
100%
Full consolidation
QUIMIGEST – Sociedade Química de Prestação de Serviços, S.A.
100%
Full consolidation
RENOESTE – Valorização de Recursos Naturais, S.A.
100%
Full consolidation
49,90%
Equity method
Companies
A.Q.P. - Aliada Química de Portugal, Lda
5. CUF – QUÍMICOS INDUSTRIAIS, S.A. - ACTIVITIES
AND RESULTS
5.1. Market activity
A relevant fact occurred in the year was SOLVAY’s decision
to close its chlorine, hypochlorite, soda and hydrochloric
acid plant locate at St. Iria in January 2014.
In 2014 CUF-QI sales and services totalled € 326.134.865,
of which € 323 890 922 concerned sales and € 2.243.943
related to services. In relation to 2013, sales grew by 6.7%.
5.2. Industrial activity
5.1.1 Organic products business area
In line with the previous year, in 2014 all plants of CUF-QI
organic area recorded a relevant performance, achieving
new monthly production records.
In 2014 sales of organic products amounted to € 270.454
.199, i.e. 6.7% more than in the previous year.
In terms of quantity, sales of aniline, MNB, nitric acid and
sulphanilic acid exceeded those of 2013. Aniline sales for
the external market rose by 10%.
5.1.2 Inorganic products business area
Sales of inorganic products totalled € 53.436.723, rising by
7.7% over the previous year.
In terms of quantity, sales of liquid caustic soda, solid caustic
soda, sodium hypochlorite and hydrochloric acid surpassed
those recorded in 2013. Note that the sales of one of the
two last mentioned products exceeded 100.000 tons.
13
ANNUAL REPORT 2014
5.2.1 Production of organic products
Aniline production totalled 180.514 tons, rising by 9% in
relation to 2013.
The MNB unit produced 264.711 tons, growing by 8% over
the previous year.
The nitric acid plant increased its annual production by
15% to 221.470 tons.
The sulphanilic acid plant saw a 8% rise in production
in relation to the previous year, recording a total annual
production of 3.021 tons.
Cyclohexylamine production totalled 653 tons, rising by
33% in relation to 2013.
CUF - QUÍMICOS INDUSTRIAIS, S.A.
In what concerns the production of Cyclohexanol,
improvements made in the last quarter of the year resulted
in four fold rise in production (344 tons) as against the
previous year.
5.2.3 Mining production
At the aniline plant, specific consumption of raw materials
increased gradually as from the beginning of the year. This
rise was caused by higher temperatures in reactors due
to internal incrustations. These problems were solved in
the last quarter of the year, following a shut-down of the
reactors for cleaning.
At remaining plants, consumption figures stood within
regular limits.
During 2014 the amount of rock salt extracted from
Campina de Cima mine and sold totalled 8,290 tons.
Sales were directed to the road safety sector and the feed
industry, respectively 4,490 tons and 3,800 tons. In 2014
sales fell by 16% over the previous year, mainly due to a
relatively mild winter season - both in terms of cold and
rainfall.
The volume of operation in the mine corresponded
to 6,500 tons ‘run-of-mine’, which entered the mining
processing plant, producing rock salt to be used for road
safety purposes and on the feed industry.
5.2.2 Production of inorganic products
5.2.4 Technical area
During the year under review, total production of gas
chlorine amounted to 99 247 tons, increasing by 13.4% over
2013, distributed as follows: 70 712 tons produced from
NaCl electrolysis and 28 535 tons from HCI electrolysis.
5.2.4.1. SHE (Safety, Health and Environment) area:
However, chlorine production at the Estarreja and
Pontevedra sites, jointly managed from Estarreja, rose by
12.2% over 2013.
Electric power and salt consumption figures stood below
estimates. Liquid salt was not used (i.e. purified brine from
Renoeste), instead only imported vacuum salt and salt
from Renoeste were used.
The recoating of electrodes at AGC was completed in 2014.
Production of hydrochloric acid totalled 197 879 tons,
i.e. 11.9% higher than in 2013. However, due to the shutdown of DOW in December, it was necessary to turn on
the hydrochloric acid synthesis to meet both internal and
market needs.
Production of hypochlorite totalled 104 404 tons, i.e.
36.3% more than in 2013. This performance was possible
thanks to the investment made to reactivate hypochlorite
unit nr. 5, permitting to increase installed capacity from
300 to 500 tons per day.
Finally, a new charging station for hypochlorite was built.
14
ANNUAL REPORT 2014
Safety and Health
Activity developed in the Safety area corresponded to an
investment of € 145 thousand, including the following:
• Drivers certification process - to be continued in
2015 - resulting in the renewal of drivers certifications
and new certifications for 14 additional drivers from
the inorganic production area;
• Improvement in safety conditions in the loading
and unloading of hazardous chemical products;
• Acquisition of emergency, monitoring and
prevention equipment.
Investment was also made in training in subjects relating
to emergency, and occupational safety and health.
No serious accident was recorded this year; only two
labour accidents occurred giving rise to sick leaves.
Environment
Environmental performance was positive. Specific energy
consumption improved.
The LDAR (Leak Detection and Repair Programme according to EN 15446:2008, EPA -453/-95-017 and EPA
21), re-initiated in 2012, was continued in 2014. Results
show a decrease by nearly 25% in this type of emissions
(volatile organic compounds emissions). The continuation
CUF - QUÍMICOS INDUSTRIAIS, S.A.
of the programme will allow tightening the criteria for
priority repairs, which will result in future improvements.
In overall terms, the performance of a high number
of environmental audits and checkings has permitted
continuous improvements in this area.
In 2014 the Company invested € 242 thousand in
technological improvements, in rain and industrial
effluents networks and in continuous emission monitoring
systems.
Quality
CUF-QI quality management policies, organisation and
practices follow a management model called Integrated
Management System (Quality, Environment and Safety);
the system’s key concern is to promote and sustain a
client- and stakeholder-oriented culture.
The Quality, Environment and Safety Policy of the
Integrated Management System is a key tool to promote
continuous improvement at CUF-QI. To this end, the
company implements action plans, particularly focused
on improving management performance and developing
skills.
latter being important at safety level.
Various steps were taken to reduce water consumption
and use the wastewater generated in the process. Some
of these measures were implemented in 2014, other will
be carried out in 2015. The measures taken at the water
demineralisation facility led to a reduction in generated
effluents from 20 000 tons per year to 8,000 tons/year.
5.2.4.3 Maintenance
Stock maintenance and management supported by
Quimigest (the Group’s company devoted to this area)
developed in line with efficiency goals set forth. However,
Quimigest suspended its activity as from 1 January 2015;
CUF-QI is now in charge of all industrial maintenance
activities.
In June 2014 Quimigest dissolved the Mobile Team
allocated to the provision of maintenance services to
industrial equipment and facilities of companies not
belonging to the CUF-QI Group (Estarreja pole) and to the
support of CUF investments in competition with other
companies. The members of the team were incorporated
in the fixed team.
5.2.4.2 Development and Technology Sector
At the Aniline and Derivatives Plant, the main line of
action viewed reducing and stabilising the consumption
of energy and raw materials and consolidate industrial
processes. Other objectives were pursued in 2014 (and will
be continued in 2015) such as improved environmental
protection, sustainability of water resources, contributing
to value creation and innovation.
Studies are under way - funded by the National Strategic
Reference Framework (NSRF) . viewing the development
of a disruptive technology to transform benzene into
aniline in a direct and competitive way.
In what concerns chlor-alkali production, brine and
hydrochloric acid electrolyses continue to be monitored,
particularly in terms of energy consumption and the
evolution of the electrolysers. Presently, a PhD thesis is
being finalised on the ageing of anodes - an important
aspect in brine electrolysis.
Studies were developed which will permit improving
chlorine liquefaction and chlorates decomposition, the
15
ANNUAL REPORT 2014
Measures were taken to develop stock management and
preparation functions and reliability tools (RCM2; MTA;
AP) and improve operational performance in this area.
The project started in 2011 and ended in December 2014,
having achieved all goals set forth.
In relation to the maintenance activity of CUF-QI, the
following is worth pointing out:
◊ total maintenance costs stood 2.5% below
estimates;
◊ the availability of production units decreased by
0.5% in relation to 2013, ending the year with an
average availability of 98.1%. This figure represents
a slight decrease in the average availability of
productive units, particularly in the sulphanilic
acid and MNB plants. However, this figure is still
considerably higher than international benchmarks.
◊ Zero serious accidents involving employees.
◊ Transmission of know-how to junior staff
continued to be made.
In line with 2014, the main goals for 2015 are the
CUF - QUÍMICOS INDUSTRIAIS, S.A.
consolidation of production units’ availabilities, cost cuts
and zero accident rate.
leadership tools which CUF leaders will implement in their
own work context.
5.3. Human resources
•
Development of HR tools
During 2014 in accordance with the company’s strategy
in this field, the human resources department developed
projects in the following areas:
• Internal Communication
Development of a new information system to manage
and assess performance was started in 2014. The system
is already operational and will be used in the 2015
management cycle.
Working sessions were promoted with different areas
viewing the laying down of a plan capable of:
5.3.1 Performance assessment
◊ Reflecting the company’s values and identity;
◊ Contributing to a shared knowledge of what the
company is today and what it seeks to be in the
future;
The annual performance evaluation was carried out
covering all employees, based on the Performance
Management System adopted by the company.
◊ Place the employee, his/her work, experience
and skills at the centre of communication;
5.3.2 Staff (CUF – Químicos Industriais)
◊ Encouraging
informed
committed participation;
In 2014 the number of employees evolved as follows:
and
emotionally
The Internal Communication plan to implement in
2015 includes, amongst other actions, an intranet and
employee portal. These two communication means will
contribute to strengthen cohesion at organisation level,
making information more accessible and ensuring greater
efficacy and efficiency at all levels of the organisation.
Still as communication is concerned, the company carried
out a survey on the organisational climate, aimed at three
different goals:
◊ Know the motivation and satisfaction level of
employees;
◊ Identify strengths and weaknesses in the current
organisational climate;
◊ Define measures to be taken.
This survey was started in June across all companies of
the CUF Group, having achieved an implementation rate
of 96%.
•
Leadership
We initiated the CUF Leaders project conceived jointly
the Faculty of Psychology and Educational Science of the
University of Oporto. This project views the identification,
sharing and development of specific transformational
16
ANNUAL REPORT 2014
a) 4 employees left the company:
- Estarreja
ƒƒ 2 (two) senior staff;
ƒƒ 1 (one) chemical engineer.
- Loulé
ƒƒ (one) operator
b) 11 employees joined the company:
- Estarreja
ƒƒ 9 (nine) industrial chemical engineers *
ƒƒ 1 (one) senior staff;
- Loulé
ƒƒ 1 (one) operator
*Integration within the workforce of young trainees – 4X4 Training
(2013/2014)
Average no. of employees:
Location/Year:
2013
2014
Estarreja
173
179
Lisboa
2
1
Loulé
16
14
Total
191
194
It should be noted that the number of pensioners fell by
10%, corresponding to 29 cases in absolute terms.
CUF - QUÍMICOS INDUSTRIAIS, S.A.
5.3.3 Development of Skills
◊ 5 (nine) PhD Research scholarships
◊ 15 (nineteen) Curricular Training
Training is deemed of the utmost importance at CUF. In
2014 the number of hours devoted to training totalled
nearly 7 000, including:
ISPS- related operational instructions (International Ship
and Port Facility Security Code) - two training actions
were carried out in this field, viewing the following:
raise awareness to mandatory compliance with ISPS
requirements, addressed to the Board of Directors,
Managers and Coordination; provide operational
employees the skills associated with operational
instructions and directing them to the application and
legal obligation of complying with the ISPS.
◊ 4 (four) company trainings
◊ 19 (twelve) IEFP internships
5.4. Control and Industrial Automation Systems
(CIAS)
◊ Continued training in safety;
In 2014 the CIAS department focused on the
implementation of new automation and industrial
control needs, viewing improving the stability, safety and
efficiency of production processes. From a point of view
of continuous improvement, new functionalities were
introduced in the SIAP suite (Integrated Management
Support System), to increase the reliability of the
information available, and achieve productivity and
efficiency gains. It introduced further improvements in
terms of organisation and methods.
◊ IEP for coordinators and employees with specific
functions;
Highlights in the field of industrial automation and control:
• Quality, Safety and Environment – involving all
employees, focused on the following training areas:
◊ Internal Emergency Plan;
◊ Biological hazards;
◊ Fire fighting and evacuation techniques;
◊ Promptness and use of chemical protection
marks and garments
• Implementation of improvements or studies in
other automation projects:
• English: Training in English continued to be
provided viewing improving oral and written skills.
◊ Design and study of an upgrade in the control
system processing capacity, particularly in the
PCA area. This was followed by acquisition,
implementation and commissioning (with no
production losses)
• Giving continuity to a networking culture, CUFQI was present in conferences, seminars, fairs and/or
symposiums, amongst which the following:
◊ Continuous improvements to automation
documentation and respective integration in control
systems, including recovery of documentation from
former projects.
ƒƒ o16th COGEN Portugal Conference;
ƒƒ o9th EuroChlor Conference;
ƒƒ oChemPor 2014 - 12th International Chemical
and Biological Engineering Conference;
ƒƒ oEurachem Workshop .
5.3.4 Traineeships and scholarships
Within the scope of the strategic relationship entered
with schools and universities, the company continued
to promote internships/ and scholarships (43), involving
students and recently graduated students:
17
ANNUAL REPORT 2014
◊ Revision of the study/reengineering and cost
estimate relating to the automation of ammonia
discharge and boilers, viewing full decommissioning
of the old nitric acid building.
• Implementation of automation and control
projects (full configuration of systems, including
hardware, software and control logics) and support to
production:
◊ Revamping of the sodium hypochlorite plant –
design, implementation, commissioning;
◊ Implementation of Automation - Phase III of the
storage park of Gafanha da Nazaré (water for fire-
CUF - QUÍMICOS INDUSTRIAIS, S.A.
fighting, storage of soda, CCTV, etc.);
◊ Increased process optimisation, based on
advanced automation and control techniques,
to improve stability and processes in general at
the aniline and derivatives units, with a view to
achieve greater efficiency at production, energy and
environmental levels.
◊ Continued improvements and implementation of
new control solutions at Innovnano units.
Within the scope of the SIAP suite (Integrated
Production Support System) the most relevant
activities developed in the year were the following:
• Strong focus on the analysis of the quality of information
produced and triggering of actions to improve it;
• Finalisation of SIAP modularisation, introducing
improvements and upgrades in the various sites where the
system is lodged;
• Implementation, with the Information Systems
department, of an interface from SIAP to SAP, concerning
information on laboratory analyses to be expedited;
• Development of new data logistics functionalities for the
loading of tank vehicles, including information signs at waiting
queues;
• The development of SIAP:BATCH and SIAP:LIMS
modules at Innovnano was completed;
• Start-up of the SIAP:White Book project,
concerning technical documentation.
In terms of Organisation and Methods, the following
actions are worth pointing out:
• Upgrade of the technological WikiCUF platform
– an internal knowledge database (inspired on the
Wikipedia website):
• Successful implementation of a 5S project
(Organisation) in the CIAS area.
5.5. Information systems
At technological level, information platforms continued to
be modernised in 2014. In line with 2013 which saw the
upgrade of R/3 - the SAP transactional system, in 2014 the
upgrade was extended to the Business Warehouse and
Portal platforms.
These are always critical works; particularly, at BW level,
18
ANNUAL REPORT 2014
the works were rather complex given the considerable
volume of activated cubes and used queries, which had
to be ensured and renewed; This was all the more critical
since it was carried out when the companies budget was
being prepared, based mainly on BW information.
In 2014 the company also strengthened its analysis of
the breakdown of margin effects, assessing the origin of
deviations at the most elementary level. This thorough
analysis provided an important decision-making tool
serving the different business areas. Budget management
and projection tools were also improved. Work has also
been made on the development of treasury management
and project tools. An assessment was carried out of
processes and tools to identify where improvements
could still be made.
Corporate websites were renovated during the year, both
in terms of image and of optimisation of search engines.
A SAM (Software Asset Management) relating to Microsoft
licences was carried out, revealing a high level of suitability.
Alternatives to Disaster Recovery scenarios continued to
be studied and a proof-of-concept was carried out. The
final decision and subsequent implementation will be
made in 2015.
At upstream level, legal updating and process reformulation
work was carried out to feed the relevant files.
CUF-QI revamping was made at technological and network
level, including active and passive equipment, both at the
head office and on operating sites.
At Innovnano, the implementation of operating processes
and adjustments to existing one underwent at good pace.
6. ECONOMIC AND FINANCIAL ANALYSIS
6.1. Return
In 2014, despite the decrease in sales value in the last two
months of the year due to a non planned shut-down in
December by our main client, operating income totalled €
350 million, i.e. more 6% than in the previous year.
This performance resulted from an increase in sales on
CUF - QUÍMICOS INDUSTRIAIS, S.A.
both the organic and inorganic markets, by 6.7% and 7.7%,
respectively.
7. SUBSIDIARIES ACTIVITY
•
Gross margin stood at 30%, however EBITDA fell in relation
to 2013, due to impairments in inventories, in the amount
of € 2.9 million. This one-off effect was due to a sharp
drop in benzene prices in December 2014/January 2015.
Without this one-off effect, 2014 EBITDA would have
outperformed that of the previous year.
Financial costs continue to have a relevant weight on
the structure of results, although in absolute terms such
importance is falling, mainly thanks to a decrease in debt.
Net profit for the year totalled € 5.5 million.
ELNOSA
ELNOSA sales totalled €29.4 million in 2014, rising by 5.7%
over the previous year.
However, as result of the situation in the sector - as the
price of soda (Elnosa’s main product) is drastically falling
-, margins and results did not follow suit. The company
recorded net losses of - € 20 278, which compares to a net
profit of €142 474 in 2013.
The main reasons for this performance were the following:
1. An increase in amortisation in line with a period
of useful life extended until 2017, following agreement
entered with the relevant authorities concerning the
end of the company’s production activity that year;
6.2. Economic and financial situation
Main indicators:
2014
2013

Net assets (€m)
242
254
(12)
Equity (€m)
88
80
8
Financial liabilities
102
121
(19)
Gearing (%)
36%
31%
5%
Main indicators reflect the following:
• Decrease in net assets via depreciation and
amortisation;
• Increase in equity via net profit and increase in
other equity changes (AICEP);
• Decrease in financial liabilities via repayment of
debt.
The company has a well-balanced financial situation, with
a debt-to-equity ratio of 36% at the end of 2014 (31% in
2013) and an adequate distribution of long, medium and
short term debt.
Financial debt is based on long term financing. The
Financial Liabilities / EBITDA ratio evolved favourably from
3.6 to 3.3, reflecting the company’s capacity to serve its
debt.
2. Increase in provisions for restructuring, for the
same reasons;
3. Lower margins in caustic soda sales;
4. Increase in energy costs.
•
RENOESTE
Crystal salt production in 2014 hovered around 32.600
tons, which is much lower than estimated. This significant
deviation was due to a disruption of brine supply by REN
from mid July to the beginning of December. In 2015 the
supply of brine is guaranteed only up to end of April.
As REN failed to implement the expansion of natural
gas storage, Renoeste had to use its best efforts to find
potential partners for the concession. Various contacts
were made but nothing resulted so far.
Net results for the year were negative by -€ 686.399.41
however, the operation generated positive cash-flow.
•
AQP
AQP recorded a favourable performance in 2014,
increasing turnover and results,
19
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
The increase in sales was driven by exports to Spain, which
rose by 45%. At domestic level, sales declined though only
slightly.
Plant operation continued to record excellent levels, with
no incident to report.
The weight of by-products in total sales kept a downward
trend, accounting for 19% of sales.
Highlights in 2014 were the following:
• Sales rose by 9% in relation to 2013, reaching €
4.26 million;
• The share of exports increased, accounting for
35% of total sales;
• The cost of goods sold evolved favourably,
permitting an increase in gross margin.
• Personnel costs increased by 11.6% to € 399.139
as maintenance and operational management teams
had to be reinforced.
• In terms of Health, Safety and Environment, AQP
continued to follow strict practices and participated
actively in all initiatives developed by PACOPAR,
pursuant to the “Responsible Care” programme.
• Operating results grew by 8.6% and net profit
rose by 10.4% to € 974.558,59.
The company has no debt.
•
NUTRIQUIM
Production at Nutriquim’s plant is suspended since May
2012.
The company is planning the dismantling of the industrial
unit; respective estimated costs are already reflected in
the accounts.
In 2014 the company posted losses of € 662.871.
•
AQUATRO
During 2014 the company posted good occupancy rates,
supporting the industrial activity of CUF- Químicos
Industriais at Estarreja and its associates AP - Amoníaco
de Portugal, SGPAMAG and Innovnano.
Within the “Aniline Over the Fence” framework, Aquatro
collaborated in the preparation of updated information,
taking into consideration different installed capacities and
geographies.
20
ANNUAL REPORT 2014
Amongst the projects developed for CUF, we point out the
following:
◊ Project to reopen the old sodium hypochlorite
plant, including the construction of a new loading
ramp; Aquatro was responsible for the general
coordination of engineering activities, market
inquiries for equipment and materials, and
assembly;
◊ Project for the new northern salt dissolutor,
a critical equipment for processing raw-material
for chlorine and soda production; the work made
involved market consultation for the supply and
assembly of equipment. Aquatro played a relevant
role in the selection of coating material and in the
development of engineering for important parts of
the facility. The equipment was commissioned and
successfully started up. Within the scope of the
same project, the company designed the mechanical
reinforcement of the southern salt dissolutor, which
remained in operation.
◊ In what concerns the hydrogen recovery
project, Aquatro intervened as global coordinator
and developed part of the engineering; and, it
prepared the specifications and tenders for civil
construction, mechanical assembly, electricity and
instrumentation, and supply of key equipment. The
commissioning of the compression facility will be
completed, complying with CUF requirements.
Additionally, the company developed activities viewing
the renewal of social equipment at CUF-QI site and
continued working on the project for the pressurisation of
the control rooms of the two production areas.
Activities developed during the year also comprised
the implementation of changes in the aniline and
nitrobenzene loading ramps, changes in the effluents
network, reinforcement of the mechanical integrity of
chlorine tanks, etc.
The work developed for CUF-QI associates included the
coordination of the repair of wharf #22 at the Aveiro
Harbour for SGPAMAG and projects for the assembly of a
hot water circuit and portable skid at Innovnano.
Within the scope of the Erase, ACE, Agrupamento
Complementar, where Aquatro represents CUFQuímicos Industriais, actions were carried out relating to
CUF - QUÍMICOS INDUSTRIAIS, S.A.
environmental mitigation works in the hydraulic ditches
crossing the Estarreja industrial site (to be funded under
the NSRF) Public tenders for the contract works were
carried out at the end of the year; the environmental
impact assessment and licencing by the relevant authority
are now pending.
8. OUTLOOK FOR 2015
Results for the year were negative by -€ 20.390,74.
Prospects for 2015 point to cruising year operations, in so
far as the initially scheduled shutdown for maintenance
purpose was postponed. This adjournment was possible
thanks to the operational improvements achieved, which
should permit keeping a high operating level, above that
of the previous year’s.
As determined by its sole shareholder, Aquatro activity will
be integrated in CUF-QI as from January of the forthcoming
year; accordingly, during the year the company took the
necessary steps to timely comply with this resolution. All
functions of Aquatro will be maintained within CUF-QI
structure, and its employees will also join CUF staff.
As result of the market crisis already referred to in previous
reports and a slowdown in our main geographical market,
i.e. Europe, we are actively seeking new markets to place
our products, as well as defend our position with our
major clients. We are confident that we will achieve these
demanding short, medium and long term goals.
•
QUIMIGEST
During 2014 Quimigest Sociedade Química de Prestação
de Serviços, S.A. provided stock management and
maintenance services to CUF-QI.
In June 2014 Quimigest dissolved the Mobile Team
allocated to the provision of maintenance services to
industrial equipment and facilities of companies not
belonging to the CUF-QI Group (Estarreja pole) and to
the support of CUF investments, competing with other
companies. Members of the mobile team were integrated
in the fixed team.
Measures were taken to develop stock management and
preparation functions and reliability tools (RCM2; MTA;
AP) and improve operational performance of Quimigest.
The project started in 2011 and ended in December 2014,
having achieved all goals set forth.
The company posted net losses for the year in the amount
of -€ 14.440,81, standing slightly below estimates.
In line with the strategic repositioning of the maintenance
function of its sole client (CUF-QI), Quimigest’s operations
were transferred to CUF-QI at the end of the year.
21
ANNUAL REPORT 2014
We are still concerned about energy costs, which adversely
affect the competitiveness of domestic industries.
We will continue to draw attention to these constraints,
but from the operational point of view, we will continue
to seek new ways to optimise such costs by reducing
consumptions.
9. PROPOSAL FOR THE APPROPRIATION OF
NET INCOME
The Board of Directors proposes to appropriate the net
profit for the year in the amount of € 5.490.581,35 as
follows:
€ 274 530,00
Transferred to legal reserve
Transferred to retained earnings
€ 5 216 051,35
CUF - QUÍMICOS INDUSTRIAIS, S.A.
10. FINAL NOTE
At the end of another business year, we would like to
thank our stakeholders, supervising bodies and financial
institutions for their engagement.
Porto Salvo, 30 March 2015
The Board of Directors
João Maria Guimarães José de Mello
João Jorge Gonçalves Fernandes Fugas
André Cabral Corte-Real de Albuquerque
Luís Augusto Nesbitt Rebelo da Silva
22
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CONSOLIDATED FINANCIAL STATEMENTS
23
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
INDEX
CONSOLIDATED BALANCE  ���������������������������������������������������������������������������������������������������������������25
CONSOLIDATED PROFIT AND LOSS STATEMENT BY NATURE  ����������������������������������������������������������26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR 2014  �����������������������������������������������������27
CONSOLIDATED CASH FLOW STATEMENT  ���������������������������������������������������������������������������������������28
24
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CONSOLIDATED BALANCE
HEA DINGS
Assets
N on current assets
Tangible fixed assets
Investment property
Intangible assets
Equity holdings - eq. method Equity
Equity holdings - other methods
Other financial assets
Deferred tax assets
Current assets
Inventories
Trade receivables
Advances to suppliers
State and other public entities
Other Debtors/Shareholders
Other accounts receivable
Deferrals
Cash and cash equivalents
No t e s
6
7
8
9
9
28
10.1
13.1
11
5.2
13.1
12.1
4
Total Assets
Equity and Liabilities
Equity
Share capital
Legal reserves
Other reserves
Retained Earnings
Adjustments to Financial Assets
Other changes in equity
Net Profit/(Loss) for the year
Interesses Minoritários
Total equity
Liabilities
N on current liabilities
Provisions
Loans
Post-employment benefits liabilities
Deferred tax liabilities
Current liabilities
Trade payables
Cash receipts from clients
State and other public entities
Other Creditors/Shareholders
Loans
Other accounts payable
Deferrals
Total Liabilities
Total equity and liabilities
25
ANNUAL REPORT 2014
16.1
16.2
16.2
16.2
13.4
16.3
31-12-2014
31-12-2013
126.921.116
19.533.732
3.209.677
1.103.105
9.228
391
3.750.704
154. 527. 953
139.303.698
19.724.523
2.573.637
1.057.186
9.218
3.853.475
166. 521. 736
29.456.881
31.591.422
398.307
2.253.829
428.584
1.026.282
199.956
22.183.889
87. 539. 149
242. 067. 103
27.857.959
43.005.057
86.222
214.974
910.947
333.165
159.884
15.131.167
87. 699. 375
254. 221. 111
30.500.000
4.297.583
18.518.981
22.989.601
(7.549.683)
13.921.053
5.490.581
30.500.000
3.955.946
18.066.308
16.324.226
(6.520.371)
10.427.379
6.832.738
88. 168. 116
79. 586. 226
14
13.4
15.1
28
2.297.722
93.813.886
5.111.457
7.355.565
108. 578. 630
2.257.993
104.729.475
5.127.129
7.774.479
119. 889. 076
13.2
27.498.009
7.600
551.893
3.895.796
8.375.922
4.829.708
161.428
45. 320. 357
153. 898. 987
242. 067. 103
30.004.729
1.486.026
3.666.215
16.290.318
3.110.527
187.995
54. 745. 809
174. 634. 885
254. 221. 111
11
5.2
13.4
13.3
12.2
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CONSOLIDATED PROFIT AND LOSS STATEMENT BY NATURE
HEADINGS
Notes
31-12-2014
31-12-2013
INCOME AND EXPENSES
Sales and services
Operating subsidies
Gains/losses of subsidiaries, associates and joint undertakings
Change in Production
Own work capitalised
Cost of goods sold
Supplies and Services
Personnel costs
Impairment of inventories
Impairment of receivables
Provisions
Impairment of non depreciable inventories
Other operating income
Other operating costs
18
17
19
10.2
20
10.3
21
15.4
10.4
13.1
14
22
23
Results before Depreciation, Financial Results and Tax
Depreciation and Amortisation
Impairment of depreciable inventories
25
Operating Result
Financial income and gains
Financial costs and losses
26
27
28
Net profit/(loss) for the year
26
ANNUAL REPORT 2014
329.061.386
440.386
(567.402)
44.597
(230.716.544)
(57.369.799)
(11.547.707)
(202.117)
(23.708)
(921.227)
(13.410)
7.570.175
(2.188.126)
31.130.791
33.566.504
(18.420.163)
10
(18.190.441)
-
12.710.638
15.376.063
93.777
(4.419.935)
8.384.479
Profit/(Loss) before tax
Income tax
350.137.940
12.029
486.305
(77.335)
19.043
(243.747.341)
(61.636.821)
(14.146.773)
(2.895.762)
42.334
(39.729)
4.780.901
(1.804.000)
266.368
(5.157.990)
10.484.441
(2.893.898)
(3.651.703)
5.490.581
6.832.738
Le g a l
Re se r v e s
(No t e 1 6 . 2 )
A d j ust m e nt s t o
fi na nci a l a sse t s
(No t e 1 3 . 4 )
Sha r e C a p i t a l
(No t e 1 6 . 1 )
Ot he r Re se r v e s
(No t e 1 6 . 2 )
No t e s
Ot he r cha ng e s i n
e q ui t y
(No t e 1 6 . 2 )
Re t a i ne d
E a r ni ng s
(No t e 1 6 . 2 )
Ne t p r o fi t fo r
t he p e r i o d
(No t e 1 6 . 2 )
5.881.308
To t a l e q ui t y
100.180.655
2.417.913
5.861
57.020
(1.889.505)
4.585.971
2.487.218
(43.874)
7.620.603
45.689.213
-
6.832.738
5.228.585
6.832.738
14.453.341
(8 . 8 9 4 . 4 1 0 )
6.832.738
(35.000.000)
(47.770)
(35.047.770)
18.114.078
-
-
3.661.880
(35.000.000)
(35.000.000)
(294.066)
(5.587.242)
(5.881.308)
79.586.226
30.500.000
-
5.587.242
5.587.242
6.832.738
79.586.226
1
-
-
16.324.226
6.832.738
5.861
57.020
(15.110)
47.770
(47.770)
(47.770)
-
10.427.379
16.324.226
(1.874.395)
4.585.971
2.487.218
5.198.794
3
-
-
(6 . 5 2 0 . 3 7 1 )
10.427.379
2.417.913
(43.874)
2.374.039
4=2+3
-
294.066
294.066
18.066.308
(6 . 5 2 0 . 3 7 1 )
-
5
-
3.955.946
18.066.308
-
6
30.500.000
3.955.946
-
7=1+2+3+5+6
30.500.000
1
205.816
(873.354)
3.176.746
582.100
3.091.309
7
-
-
-
-
-
-
6.491.101
6.491.101
-
(341.637)
(6.491.101)
(6.832.738)
-
-
-
187.104
(12.830)
174.275
-
-
(265.173)
3.176.746
582.100
3.493.674
-
341.637
341.637
22.989.601
(155.958)
(873.354)
(1.029.312)
11
-
13.921.053
(187.104)
639.777
452.673
5.490.581
-
5.490.581
8.581.891
9
5.490.581
12
(7 . 5 4 9 . 6 8 3 )
88.168.116
18.518.981
5.490.582
4.297.583
13=8+9+11+12
30.500.000
-
10=8+9
8
2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR 2014
De scr i p t i o n
P OSITION A T BE GINNING OF 2 0 1 3
C H A NGE S IN TH E P E RIOD
Fist adoption of new accounting standards (Note 2.1)
Change in Accounting Policies
Hedging derivatives
Realisation of the revaluation surplus of tangible and intangible fixed assets
Revaluation surplus of tangible and intangible assets and respective changes
Adjustments for deferred tax
Subsidies
Net hedging gains
Emission Rights
Other changes recognised in equity
NE T P ROFIT/ (LOSS) FOR TH E Y E A R
C OM P RE H E NSIV E RE SU LT
OP E RA TIONS WITH E QU ITY H OLDE RS DU RING TH E Y E A R
Distributions
Transfer of revaluation made
A P P ROP RIA TION OF RE SU LTS
Set up of Legal Reserve
Transfer of results for the year to Retained Earnings
P OSITION A T E ND OF 2 0 1 3
P OSITION A T BE GINNING OF 2 0 1 4
C H A NGE S IN TH E P E RIOD
Revaluation surplus of tangible and intangible assets and respective changes
Adjustments for deferred tax
Hedging derivatives
Subsidies
Emission Rights
Other changes recognised in equity
NE T P ROFIT/ (LOSS) FOR TH E Y E A R
C OM P RE H E NSIV E RE SU LT
OP E RA TIONS WITH E QU ITY H OLDE RS DU RING TH E Y E A R
Distributions
Transfer of revaluation made
A P P ROP RIA TION OF RE SU LTS
Set up of Legal Reserve
Transfer of results for the year to Retained Earnings
P OSITION A T E ND OF 2 0 1 4
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CONSOLIDATED CASH FLOW STATEMENT
No t e s
31- 12- 2014
31- 12- 2013
Operating activities
Cash receipts from clients
418.858.905
391.394.151
Cash paid to suppliers
(350.789.749)
(337.204.523)
Cash paid to personnel
(13.287.085)
(11.264.649)
54.782.071
42.924.979
F lows generated by operations
Income tax received/paid
Other receipts/payments relating to operating activities
N et cash from operating activities (1)
(3.573.667)
(293.993)
(20.403.212)
(19.719.141)
30. 805. 192
22. 911. 844
Investing activities
Cash payments relating to:
Tangible fixed assets
(5.988.695)
(5.683.204)
(5. 988. 695)
(5. 683. 204)
Tangible fixed assets
49.592
516.757
Investment property
-
3.257
Investment subsidies
53.883
11.555
Interest and similar income
90.953
262.774
440.386
384.210
634. 813
1. 178. 553
Cash receipts relating to:
Dividends
N et cash from investing activities (2)
(5. 353. 882)
(4. 504. 651)
79.500.000
49.200.000
9.023.115
52.644.092
88. 523. 115
101. 844. 092
Financing activities
Cash receipts relating to:
Borrowings
Other financing operations
Cash payments relating to:
Borrowings
Interest and similar costs
Dividends
(88.334.123)
(57.219.801)
(4.176.210)
(4.577.351)
-
Other financing operations
N et cash from financing activities (3)
Variation in cash and cash equivalents (1+2+3)
(35.000.000)
(14.411.369)
(32.841.003)
(106. 921. 702)
(129. 638. 155)
(18. 398. 588)
(27. 794. 062)
7. 052. 722
(9. 386. 869)
15.131.167
24.520.167
Foreign exchange effect
Cash and cash equivalents at the beginning of the year
4
Changes in the consolidation perimeter
Cash and cash equivalents at the end of the year
28
ANNUAL REPORT 2014
4
22.183.889
(2.131)
15.131.167
CUF - QUÍMICOS INDUSTRIAIS, S.A.
29
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
30
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2014
31
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CUF - QUÍMICOS INDUSTRIAIS, S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2014
(Amounts in thousand Euros)
CONSOLIDATED NOTES
(Amounts in thousand Euros, except when specifically provided otherwise)
This Document contains disclosures as required by the Accounting and Financial Reporting Standards (NCRF) comprised in the Accounting Standardisation System (ASS), relating to 2014.
x
32
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
INDEX
1. THE COMPANY  �����������������������������������������������������������������������������������������������������������������������������34
2. BASES OF PREPARATION OF THE FINANCIAL STATEMENTS  �������������������������������������������������������34
3. MAIN ACCOUNTING POLICIES  �����������������������������������������������������������������������������������������������������34
4. CASH FLOWS  ��������������������������������������������������������������������������������������������������������������������������������50
5. RELATED PARTIES  �����������������������������������������������������������������������������������������������������������������������50
6. TANGIBLE FIXED ASSETS  �������������������������������������������������������������������������������������������������������������52
7. INVESTMENT PROPERTY  �������������������������������������������������������������������������������������������������������������53
8. INTANGIBLE ASSETS  ��������������������������������������������������������������������������������������������������������������������54
9. EQUITY HOLDINGS  �����������������������������������������������������������������������������������������������������������������������55
10. INVENTORIES  �����������������������������������������������������������������������������������������������������������������������������56
11. STATE AND OTHER PUBLIC ENTITIES  �����������������������������������������������������������������������������������������57
12. DEFERRALS  �������������������������������������������������������������������������������������������������������������������������������58
13. FINANCIAL INSTRUMENTS  ��������������������������������������������������������������������������������������������������������58
14. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS  �����������������������������������������61
15. EMPLOYEES BENEFITS  ��������������������������������������������������������������������������������������������������������������62
16. OTHER EQUITY INSTRUMENTS  ���������������������������������������������������������������������������������������������������64
18. REVENUE  �����������������������������������������������������������������������������������������������������������������������������������66
19. GAINS/LOSSES OF SUBSIDIARIES, ASSOCIATES AND BUSINESS COMBINATIONS  ���������������������67
20. OWN WORK CAPITALISED  ����������������������������������������������������������������������������������������������������������67
21. SUPPLIES AND SERVICES  ����������������������������������������������������������������������������������������������������������68
22. OTHER OPERATING INCOME  �������������������������������������������������������������������������������������������������������69
23. OTHER OPERATING COSTS  ���������������������������������������������������������������������������������������������������������70
24. EFFECTS OF CHANGES IN EXCHANGE RATES  ����������������������������������������������������������������������������70
25. EXPENSES/REVERSAL OF DEPRECIATION AND AMORTISATION  ������������������������������������������������70
26. FINANCIAL INCOME ANG GAINS  �������������������������������������������������������������������������������������������������71
27. FINANCIAL COSTS AND LOSSES  �������������������������������������������������������������������������������������������������71
28. INCOME TAX  �������������������������������������������������������������������������������������������������������������������������������71
29. TOTAL LIABILITIES  ���������������������������������������������������������������������������������������������������������������������72
30. SUBSEQUENT EVENTS  ���������������������������������������������������������������������������������������������������������������74
33
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
1. THE COMPANY
Group CUF – Químicos Industriais (“Group”) - made up of CUF – Químicos Industriais, S.A. (formerly Quimigal – Química de Portugal, S.A.
- the new corporate name was registered on 28 April 2006). CUF - Químicos Industriais, S.A. has its head-office and plant in Estarreja.
The Company was incorporated on 30 December 1977 and its corporate object is the industrial production and marketing of organic
and inorganic chemical products.
The parent company CUF - Companhia União Fabril SGPS, S.A. has its head-office in Lisbon.
2. BASES OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements were prepared according to the Accounting Standardisation System (ASS) as approved by Decree-law 158/2009
of 13 July.
3. MAIN ACCOUNTING POLICIES
3.1 Measurement bases used in the preparation of the financial statements:
The financial statements were prepared on the ongoing concern and accrual basis of accounting, consistency of presentation, materiality
and aggregation, offsetting and comparative information.
Based on provisions in the NCFR, the accounting policies followed by the Company were as follows:
(a) Tangible Fixed Assets
Tangible fixed assets refer to assets used in production, rendering of services or for administrative purpose.
The Group adopted the deemed cost in the measurement of tangible fixed assets as of 1 January 2009 (date of transition to the NCRF),
pursuant to the exemption provided in NCFR 3 - First time adoption of NCFR. The Group adopted as deemed cost the amount recorded
in the former financial statements prepared according to the former accounting standards (POC), which included revaluation reserves
carried out pursuant to various decree-laws that took into account currency devaluation coefficients.
Except for the Land that is not depreciable, depreciation of Tangible Fixed Assets is provided over their estimated useful lives and
assessed for impairment whenever there is an indication that the asset may be impaired. Depreciation is determined on a twelfth basis
as from the moment the assets become available for their intended use, in accordance with the straight-line method.. Depreciation
rates used are as follows:
Buildings and other constructions
2014
2013
2.00 - 33.33
2.00 - 33.33
Basic equipment
5.00 - 50.00
5.00 - 50.00
Transport equipment
6.25 - 25.00
6.25 - 25.00
Administrative equipment
5.88 - 50.00
5.88 - 50.00
Other tangible fixed assets
12.5 - 20.00
12.5 - 20.00
Depreciation cost is recognised in the profit and loss statement under caption Expenses / Reversals of Depreciation and Amortisation.
Costs with the dismantling and removal of property from tangible fixed assets and the cost of restoring the sites where these are
located, which is an obligation incurred when the goods are purchased or for having been used during a certain period for purposes
34
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
other than the production of inventories, are part of the cost of the corresponding tangible fixed asset and are depreciated in the year
of useful life of the assets they concern.
Current maintenance and repair costs are recognised as expenses in the period they occur.
Costs with replacements and major repairs are capitalised whenever they extend the useful life of the fixed asset and are depreciated
in the remaining period of the said asset useful life or in its own useful life, if lower.
Any loss or gain arising on de-recognition of a tangible asset (calculated as the difference between the net disposal proceeds minus sale
costs and the carrying amount) is included in the profit and loss account for the year the asset is de-recognised.
Tangible fixed assets in progress concern goods which are still under construction or development and are measured at acquisition cost,
and they can only be depreciated when they will become available for use.
At the end of each year the company assesses any possible impairment in assets, which if any, will be recognised in the profit and loss
statement for the year.
(b) Investment Property
The Group adopted deemed cost in the measurement of tangible fixed assets referring to 1 January 2009 (transition to the NCRF), under
the terms of the exemption provided in NCRF 3 – First Adoption of the NCRF.
Deemed cost resulted from an assessment made as of the said date by independent and qualified auditors. Subsequently, the Group
adopted the cost model in the measurement of investment property.
Depreciation is determined on a twelfth basis as from the moment the assets become available for their intended use, in accordance
with the straight-line method.. Depreciation rates used are as follows:
Buildings and other constructions
2014
2013
5.00 - 10.00
5.00 - 10.00
(c) Intangible Assets
Intangible assets acquired separately are measured at cost on the date of the initial recognition.
The cost of internally generated intangible assets, excluding development costs in certain circumstances, are recognised as expenses
when incurred.
Following initial recognition, intangible assets are recorded at cost minus cumulative depreciation and amortisation and impairment
losses.
The useful lives of intangible assets are finite or indefinite. Intangible assets with indefinite life are not amortised but tested annually for
impairment, whether or not there is evidence that they are impaired. Intangible assets with finite useful lives are amortised over their
estimated useful lives and assessed for impairment whenever there is an indication that the asset may be impaired. Amortisation of
Intangible Assets is recorded in the Income Statement by Nature in line "Gains/Reversal of Depreciation and Amortisation”.
Depreciation is determined on a twelfth basis using the straight-line method. Depreciation rates used are as follows:
35
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
2014
2013
Development projects
20.00 - 33.33
20.00 - 33.33
Industrial property
20.00 - 33.33
20.00 - 33.33
Other intangible fixed assets
20.00 - 33.33
20.00 - 33.33
Any loss or gain arising on de-recognition of a tangible asset (calculated as the difference between the net disposal proceeds minus sale
costs and the carrying amount) is included in the profit and loss account for the year the asset is de-recognised.
Some of the specific characteristics relating to each type of intangible asset are as follows:
(c.1) Development projects
Research costs are recognised as expenses in the period they occur.
Development costs of an individual project are recognised as intangible assets when the Group can show:
•
•
•
•
•
The technical feasibility of completing the intangible asset so that will be available for use or sale
its intention to complete the intangible asset and use or sell it;
how the intangible asset will generate probable future economic benefits;
the availability of adequate resources to complete the development of the intangible asset;
its ability to measure reliably the expenditure attributable to the intangible asset during its development.
(c.2) Emission rights
CO2 licences attributed to the Group pursuant to the National Allocation Plan for CO2 Emissions Allowances are recognised according to
NCRF 26 , i.e. under Intangible Assets through Other Changes in Equity - Subsidies and Donations, for their market value as of allocation
date.
Purchased allowances are recognised as Intangible Assets through the corresponding accounts payable or liquid funds.
Based on FIFO criteria, for its CO2 emissions the Group recognises a depreciation and amortisation cost through Cumulative Depreciation
of Intangible Assets and, simultaneously transfers to Other Income and Gains, through Subsidies and Donations, an amount equivalent
to the share of corresponding allowance.
Whenever the Group produces CO2 emissions without holding respective allowances, a provision is recognised under the terms of NCRF
21 – Provisions, Contingent Liabilities and Contingent Assets for the amount corresponding to the best price estimate for obtaining it,
added of the estimated penalties incurred for CO2 emissions without allowance.
The sale of allowance rights gives rise to gains or losses determined between the carrying amount and respective acquisition cost, being
recorded under Other Income or Gains - Income and Gains on Non Financial Investments or other Expenses or Losses - Expenses and
Losses on Non Financial Investments, respectively.
Since there is an active market for emission rights, these are reassessed at market value at the end of each period, resulting in the
adjustment of the Equity caption - Subsidies and Donations or Income whether the allowances are allocated or purchased, respectively.
36
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
(d) Equity Holdings – Equity method
The following associates are measured according to the equity method:
At acquisition date, the difference between the cost of the acquisition over the Group's share of net fair value of the acquired entity's
identifiable assets, liabilities and contingent liabilities was recorded in accordance with NCRF 14 - Business Combinations. Hence:
• Associated goodwill was included in the recorded amount of the investment. However, the depreciation of this Goodwill is not
permitted and therefore it is not included when determining the results arising from subsidiaries and associates;
• The excess of the Group's share of net fair value of the acquired entity's identifiable assets, liabilities and contingent liabilities
over the cost of the acquisition was not included in the recorded amount of the investment and was included as income in the profit
and loss statement for the period of the acquisition.
Subsequently, at acquisition date, the recorded amount of the investments:
• was increased or decreased to recognise the Company's share of the profits or losses of the associates after the date of
acquisition;
• was reduced by the distributions received;
• was increased or decreased to reflect through Equity, alterations in the Group's proportionate interest in the associates arising
from changes in the latter's equity that have not been included in the income statement. These changes include, amongst other
situations, those resulting from the reassessment of tangible fixed assets and currency translation differences.
The following provisions relating to the application of this method were also complied with:
• The financial statements of subsidiaries and associates were already prepared or were adjusted off the books in order to reflect
the Group's accounting policies before they can be used for determining the effects of the equity method;
• The financial statements of associates used to determine the effects of the equity method refer to the same date of those of
the Group or, if different, they do not differ more than three months in relation to the Group's;
• Results from «ascending» and «descending» transactions are recognised only insofar as they correspond to the interests of
other investors in the associate not related to the investor.
• When the value of an investment is reduced to zero, additional losses are taken into account by recognising a liability whenever
the Company incurs into legal or constructive obligations. If the subsidiaries and associates subsequently report profits, the Group
will resume recognising its share of those profits only after the its share of the profits equals the share of losses not previously
recognised.
(e) Equity Holdings – other methods
The Group uses the cost model in relation to financial investments in non listed companies in which the equity method does not apply.
According to the cost model, equity holdings are initially recognised at acquisition cost, which includes transaction costs, subsequently
deducted of impairment losses, if any.
37
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
(f) Income Tax
(f.1) Deferred tax assets and liabilities
Deferred tax assets and liabilities result from determining the temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts in the Group's financial statements.
Deferred tax assets reflect:
• Deductible temporary differences to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences can be utilised;
• Unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences can be utilised.
Deferred tax liabilities reflect taxable temporary differences.
The Group does not recognise deferred tax relating to temporary differences associated to investments in associates and joint ventures
as it considers that the following conditions are simultaneously met:
•
•
The Group is capable of controlling the timing of the reversal of the temporary difference;
It is probable that the temporary difference will not reverse in the near future.
The measurement of deferred tax assets and liabilities:
• is made at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on
tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date.
• reflects the tax consequences that would follow from the manner in which the Group expects, at the balance sheet date, to
recover or settle the carrying amount of its assets and liabilities.
(f.2) Income tax for the year
Income Tax for the Year comprises current and deferred tax for the year.
Current tax is calculated based on the accounting results adjusted according to the laws to which each of the companies included in the
consolidation is subject.
Income tax of the parent company and subsidiaries in which it holds, directly or indirectly, at least 90% of respective share capital and
simultaneously have their head-office in Portugal is determined according to the special group taxation regime at the rate of 23% added
of Municipal Surcharge at the maximum rate of 1.5% on taxable income, resulting in a total tax rate of 24.5%.
Income tax relating to remaining companies included in the consolidation is calculated based on the tax rates in force in the countries
of respective head-offices:
Country
2014 Tax
2013 Tax
Income tax
Portugal
23,0%
25,0%
Municipal surcharge
Portugal
1,5%
1,5%
Spain
30,0%
30,0%
Income tax
38
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
In accordance with current legislation in the various jurisdictions where the companies included in the consolidation develop their
business, tax returns are subject to review and correction by the tax authorities during a period of four years to five years, except where
there are tax losses, tax benefits have been granted or inspections, claims or appeals are in progress, in which case, depending on the
circumstances, the period can be extended or suspended.
The Board of Directors believes that any possible corrections resulting from revisions/inspections of these tax returns will not have a
significant effect on the consolidated financial statements.
(g) Inventories
The assessment of inventories and respective costing methods are as follows:
Valuation
Valuation methods
Goods
Acquisition cost (*)
Average cost
Raw materials, subsidiary materials and consum.
Acquisition cost (*)
Average cost
Finished and semi finished products
Production cost (*)
Average cost
Work in progress
Production cost (*)
Average cost
(*) Or net realizable value, whichever the lower
The cost of inventories includes:
•
•
average production cost of the raw materials incorporated;
purchase costs (acquisition price and transport costs)
Where the realisable net value is lower than the purchase or translation price, the value of inventories is reduced by recognising an
impairment loss, which is reversed when the reasons that originated it ceased to exist.
To this end, the realisable net value is the estimated selling price in the ordinary course of business minus any cost to complete and to
sell the goods. Estimates take into account changes relating to events occurred following the end of the period insofar as such events
confirm existing conditions at the end of the period.
(h) Other financial assets
Financial assets are recognised when the companies included in the consolidation become a party to the contractual relationship.
Financial assets not included in the preceding sub-paragraphs and which are not valued at fair value are valued at cost, net of impairment
losses when applicable.
At the end of the year, the Group assesses the impairment of these assets. Whenever an objective evidence of impairment existed, the
Group recognised an impairment loss in the statement of comprehensive income.
The objective evidence that a financial asset or group of assets was impaired took into account observable data that drew attention to
the following loss events:
39
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
• Significant financial difficulty of the debtor;
• Contractual breach, such as the non payment or non compliance with the payment of interest or repayment of the debt;
• Companies included in the consolidation, due to economic or legal reasons relating to the debtor's financial difficulties, offered
concessions to the debtor, that otherwise would not be considered.
• The debtor is likely to become bankrupt or subject to any other financial reorganisation;
• Observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial
assets since the initial recognition of those assets.
All significant financial assets were assessed separately for impairment purposes. Remaining financial assets were assessed based on
similar credit risk characteristics.
Some of the specific characteristics relating to each type of Financial Asset are as follows:
(h.1) Shareholders
Loans to shareholders do not accrue interest or involve any type of interest, therefore they are stated at respective nominal value, minus
any impairment loss where applicable, determined based on the criteria provided in sub-paragraph h)
(h.2) Clients
Accounts receivable are initially measured according to measuring criteria for Sales and Services described in sub-paragraph q) and
subsequently measured at amortised cost minus impairment.
Impairment is determined based on the criteria defined in sub-paragraph h).
(h.3) Advances to suppliers
These balances are recorded at respective cost minus impairment losses, where applicable, determined based on the criteria established
in sub-paragraph h).
(h.4) Other Trade Receivables
Other trade receivables are measured as follows:
•
•
•
Personnel - at cost minus impairment;
Receivables for accrued income - at cost;
Other receivables - cost minus impairment.
In both cases, impairment is determined based on the criteria defined in sub-paragraph h).
(h.5) Cash and cash equivalents
Amounts in this caption include cash, bank deposits which mature in less than three months and can be demanded immediately with
insignificant risk of change in amount.
40
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
These balances are measured as follows:
•
•
•
Cash - at cost;
Deposits with no specific maturity - at cost;
Other deposits with defined maturity - at amortised cost, determined based on effective interest rate method.
For the purposes of the cash flow statement, caption “Cash and cash equivalents” also includes bank overdrafts, reflected in the balance
sheet in the caption “Other loans”.
(i) State and Other Public Entities
Balances and liabilities in this caption are measured based on the law in force.
In what concerns assets, no impairment was recognised as it was deemed not applicable given the specific nature of the relationship.
(j) Deferred assets and liabilities
This caption includes transactions and other events the full recognition of which in the income statement for the period is not adequate,
but that should be recognised in future results.
(l) Equity captions
(l.1) Legal Reserves
According to article 295 of the CC, at least 5% of annual net profit must be appropriated to a legal reserve until the reserve equals at
least 20% of share capital.
This reserve is not available for distribution except upon liquidation of the company, but can be used to absorb losses once the other
reserves have been exhausted, or to increase capital (art. 296 of the CC).
(l.2) Other reserves
This caption includes revaluation reserves made under the terms of the former GAAP and those made on transition date, net of
corresponding deferred tax, which are recorded in caption Revaluation Surpluses as the company adopted the considered cost method
on the date of conversion to the AAS.
Revaluation reserves made pursuant to the relevant laws, according to such laws, are only available to increase the share capital or cover
losses incurred up to the date to which the revaluation refers, and only after realised (for respective use or sale).
They also include reserves resulting from the revaluation made on transition date, which are only available following realisation (for
respective use or sale).
(l.3) Retained earnings
This caption includes earnings available for distribution to shareholders and gains deriving from increase in the fair value of financial
instruments, financial investments and investment property which, according to paragraph 2 of article 32 of the CC, will only be available
for distribution when the respective underlying elements or rights will be sold, exercised, extinguished or settled.
41
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
(l.4) Adjustments to financial assets
This caption includes adjustments to fair value of financial assets such as derivatives used to manage interest rate, exchange rate or
commodity risks already contracted or having a high probability of being transacted in the future which, according to paragraph 2 of
article 32 of the CC, will only be available for distribution when the respective underlying elements or rights will be sold, exercised,
extinguished or settled.
It also includes adjustments deriving from the application of the equity method, namely the allocation of the changes in the equity of
subsidiaries and associates and non appropriated profit.
(l.5) Other changes in equity
(l.5.1) Investment subsidies
This caption includes non repayable subsidies, net of deferred tax, relating to tangible and intangible fixed assets.
Subsidies are only recognised when there is reasonable certainty that they will be received and that the Group will comply with the
conditions required for them to be granted.
Subsequently to the initial recognition, this caption is reduced:
• in what concerns subsidies relating to depreciable tangible fixed assets and intangible assets with a definite useful life, by their
allocation, on a systematic basis, to income during the periods necessary to offset the subsidies with related expenses.
• in what concerns non depreciable and intangible assets with an indefinite useful life, by their allocation to income in the
periods in which it is necessary to offset any impairment loss concerning such assets.
These subsidies will not be available for distribution until they are allocated to income during the periods required to: (i) balance the
subsidies with related expenses which they are intended to offset, i.e. depreciation and amortisation and/or (ii) any impairment loss
recognised in relation to such assets.
(l.5.2) Emission rights
These reserves, corresponding to Emission Rights given and recognised as provided in sub-paragraph c.4) above are transferred to Other
income and gains as the corresponding CO2 emissions are made by the group companies.
According to sub-paragraph 2 of article 32 of the CC, these reserves will only be available for distribution when the underlying rights will
be sold, exercised, extinguished or liquidated.
(m) Provisions
This account reflects a present (legal or constructive) obligation arising from past events, the settlement of which is expected to result
in an outflow of resources embodying economic benefits, and a reliable estimate can be made of that obligation.
Provisions are measured at the best estimate of the expenditure required to settle the present obligation at balance sheet date.
Whenever the time value of money is significant, the amount of a provision is the present value of the expenditure expected to be
required to settle the obligation, using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the obligation and which does not reflect risks in relation to which estimated future cash flows have been adjusted.
42
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
(n) Liabilities for post-employment benefits and personnel expenses
Personnel expenses are recognised when the service is provided by employees, irrespective of respective payment date.
Some of the specific characteristics relating to each benefit are as follows:
(n.1) Post-employment benefits
The Group holds the following post-employment benefit plans:
Type
Name of plan
Company
Addressees
Location
CUF Quimicos
Retirement pension plans
Defined benefit - complementary pension for old age,
disability and survival
Former and current
employees from ex-CUF
Portugal
CUF Quimicos
Medical benefits
Defined benefit - medical benefits without provided fund
Former and current
employees from ex-CUF
Portugal
Pursuant to the Social Benefits Regulations in force at the Group, a number of employees of the permanent staff who are entitled, upon
retirement, to health care benefits and monetary complements to pensions for old age, disability, early retirement or survival. These
contributions are determined according to the number of years of service and the wage scale in force at the company that originally
employed them.
In the Defined Benefits Plan, recognition and measurement of liabilities are made according to NCFR 28 - Employment Benefits.
Under these terms, the cost of providing the benefits is determined:
•
•
•
Separately for each plan;
Using the projected credit unit method;
Based on actuarial assumptions in force in Portugal.
The cost of past services of current employees is recognised: (i) immediately, as concerns the share already due, and (ii) on a straight-line
basis over the remaining period of service, as concerns the share not yet due.
(n.2) Holiday Pay and Holiday Bonus
According to the law in force, employees are entitled to holiday pay and holiday bonus in the following year to which the service is
provided. Hence, the company recognised in the profit and loss statement for the year an amount payable in the following year, which
is recorded in caption "Other Accounts Payable".
(o) Financial liabilities
Financial liabilities are recognised when the companies included in the consolidation become a party to the contractual relationship.
43
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
(o.1) Borrowings
Loans covered by variable interest rate hedges are recorded at amortised cost determined based on the effective interest rate.
According to this method, loans are initially recognised as liabilities at the amount received, net of issuing costs, which corresponds
to the respective fair value at that date. Subsequently, loans are measured according to the amortized cost method, which includes all
financial expenses calculated according to the effective interest rate method.
Other loans are measured at cost, and recognised as liabilities at their nominal value.
(o.2) Suppliers
Accounts payable to suppliers are measured at cost.
(o.3) Shareholders
Shareholders loans do not accrue interest or involve any type of interest, therefore they are stated at respective nominal value, minus
any impairment loss where applicable, determined based on the criteria provided in sub-paragraph i)
(p) Effect of changes in exchange rates
Foreign currency transactions are translated into euro at the date of transaction.
Balances due at the end of the period are translated at closing rate and the difference is recognised in the income statement.
(q) Sales and services
Sales and rendered services are measured at the fair value of the consideration received or receivable, minus the amounts relating to
trade discount for multiple purchase/orders.
Where the selling price of products/services includes an identifiable amount of subsequent services, such amount is deferred and
recognised as revenue in the period in which the service is provided.
Although revenue is only recognised when it is probable that any future economic benefit associated with the item of revenue will flow
to the company, when there is doubt as to the recoverability of an amount already recognised as revenue, the irrecoverable amount,
or the amount unlikely to be recovered, will be recognised as impairment and not as an adjustment to the revenue amount initially
recognised.
The recognition of sales and rendered services is subject to specific features, amongst which the following:
(q.1) Sales
Revenue arising from the sale of goods should be recognised when all of the following criteria have been satisfied:
• the seller has transferred to the buyer the significant risks and rewards of ownership;
• the seller retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the seller, and
• the costs incurred or to be incurred in respect to the transaction can be measured reliably.
44
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
(q.2) Rendered Services
Revenue arising from rendered services is recognised when the result of the transaction can be reliably estimated, which occurs when
all of the following criteria are met:
•
•
•
The amount of revenue can be measured reliably;
It is likely that the economic benefits associated to the transactions will flow to the Group;
the costs incurred, or to be incurred, in respect of the transaction can be measured reliably;
The stage of completion is determined based on the proportion of the costs incurred so far on total estimated costs of the rendering of
the services (relating to rendered services or services to be rendered).
When the outcome of a contract cannot be estimated reliably, the Group recognises it according to the null profit method. According
to this method, total costs incurred are recognised as expenses for the period combined with equivalent revenues, and no profit is
recognised.
Gradual payments and cash receipts from clients are not taken into account for determining the completion percentage, not even
according to the null profit method.
(r) Operating subsidies
This caption recognizes non repayable subsidies not related to assets and only when there is reasonable certainty that the Group will
comply with the conditions required for them to be granted.
(s) Interest and similar expenses
Loan costs are recognised in the income statement for the period to which they relate and include:
•
•
Interest paid determined based on the effective interest rate method;
interest of interest rate hedging instruments (swaps);
costs incurred on loans obtained directly to finance the acquisition, construction or production of tangible fixed assets are capitalised
as part of the cost of the assets. Such costs are capitalised as from the beginning of the preparation for construction or development
of the assets and end upon termination of the production or construction of the asset or when the project in question is suspended.
(t) Hedging instruments
Hedging instrument is an instrument whose fair value or cash flows are expected to offset changes in the fair value or cash flows of a
designated hedged item, attributable to the hedged risk,
In the absence of detailed directives in NCRF 27 - Financial Instruments on how to test and substantiate the effectiveness of the hedging,
companies included in the consolidation follow provisions in IAS 39 - Financial instruments.
Changes in the fair value of derivative instruments of fixed interest rate risk or commodity price risk as well as changes in the fair value
of the asset or liability subject to such risk are recognised in the income statement in caption "Increase/Decrease at fair value".
45
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
Changes in the fair value of derivative instruments of floating interest rate risk, foreign exchange risk, commodity price risk resulting
from firm commitment or highly probable transaction are recognised in equity under caption "adjustments to financial assets" as
concerns their effective part and in the income statement in caption "Increase/decrease at fair value" as concerns their ineffective part.
Hedge accounting is discontinued when the hedging instrument matures, is sold or exercised, or when the hedging relationship ceases
to comply with the requirements NCRF 27 - Financial Instruments, under the terms specified in of IAS 39 - financial instruments.
The effective part of the hedging instruments is included in the balance sheet under "Borrowings".
(u) Contingent assets and liabilities
A contingent asset is a possible asset arising from past events the existence of which will depend on whether some uncertain future
event will occur which are not entirely under company's control and therefore are not recognised. However, they are disclosed when a
future inflow is likely to occur.
A Contingent Liability is:
• A possible obligation arising from past events the existence of which will depend on whether some uncertain future event
occurs which are not entirely under the company's control;.
or
•
A present obligation as a result of past events but which is not recognized as:
- an outflow of resources is not likely to be required to settle the obligation; or
- the amount of the obligation cannot be reasonably quantified;
Contingent liabilities are not recognised. However, they are disclosed when there is a probability of future outflows which is not remote.
(v) Subsequent events
Events that occur after the balance sheet date that provide additional information on conditions that existed as of the balance sheet
date are reflected in the consolidated financial statements. Events that occur after the balance sheet date that provide information on
conditions that exist after the balance sheet date, if relevant, are disclosed in the notes to the consolidated financial statements.
3.2. - Consolidation bases
The corporate universe of the Group is made up of the subsidiaries listed in Note 5.
Joint ventures are included in the financial statements according to the proportional consolidation method, combining, line by line, the
share in each item of assets, liabilities, income and gains and expenses and losses of the jointly controlled ventures with the similar
items of the Groups financial statements.
In compliance with provisions in article 6 of Decree-law 158/2009, of 15 July which approved the ASS, the entity prepares consolidated
accounts of the Group composed by itself and all the subsidiaries in which:
In compliance with provisions in article 6 of Decree-law 158/2009, of 15 July which approved the ASS, the entity prepares consolidated
accounts of the Group composed by itself and all the subsidiaries in which:
46
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
•
Irrespective of the capital ownership, one of the following occurs:
◊ It can exercise or effectively exercises a controlling influence;
◊ it governs the business policies of both companies as though they constituted a single entity;
•
As holder of share capital:
◊ It holds the majority of voting rights, except if it is proven that such rights do not confer control;
◊ It has the power to appoint or remove the majority of the members of the governing body of the other entity with powers to
govern the financial and operating policies of such entity;
◊ It exercises a controlling influence over the other entity, by virtue of a contract entered with such entity or any other clause in
the said entity's memorandum of association;
◊ It holds at least 20% of the voting rights and the majority of the members of the governing body of the other entity with the
powers to govern the financial and operating policies of such entity who have held office during the year to which the consolidated
financial statements refer, or in the preceding year until the moment these are prepared, were exclusively appointed as result of
the exercise of its voting rights;
◊ It holds, alone or by virtue of an agreement with other capital holders of the other entity, the majority of the voting rights of
the holders of this entity's share capital.
The existence and the effect of the potential voting rights that are currently exercisable or convertible are considered when assessing
whether an entity exercises significant influence.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control and continue to be
consolidated until the date when such control ceases.
Accounting policies followed by the subsidiaries and joint ventures for preparing their separate financial statements were altered,
where necessary, to ensure consistency with the policies adopted by the Group.
The purchase method is used for accounting business combinations. The cost of an acquisition is measured at the fair value of the
delivered assets, capital instruments issued and liabilities incurred or assumed on the acquisition date plus costs directly attributed to
the acquisition.
The excess of the acquisition cost over the share of the Group in the fair value of the identifiable assets, liabilities and contingent
liabilities purchase is recognised as Goodwill.
If the acquisition cost is lower than the said fair value, the difference is recognised directly in the income statement for the year it is
determined, after reassessing the identification process and measuring of the fair value of the liabilities and contingent liabilities.
In the consolidation process, transactions, balances and non realised gains in intra-group transactions and dividend distributed amongst
group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of loss through the
impairment of the assets being transferred.
Provisions in NCRF 25 - Income Tax were applied for temporary differences arising from the elimination of results deriving from intragroup transactions.
Equity and net profit of subsidiaries which are held by other than the Group are recorded in the Minority Interests captions of the Balance
Sheet (separately under equity) and in the consolidated income statement, respectively. On the date of each business combination, the
amounts attributable to minorities are determined using the shareholding percentage held by them at the fair value of the identifiable
net assets and contingent liabilities acquired.
47
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
Where losses attributed to minority shareholders exceed the minority interest in shareholders’ equity of the subsidiary, the Group
absorbs such excess and any additional losses, except where the minority shareholders are required to and can cover such losses. Where
the subsidiary subsequently reports profits, the Group appropriates them up to the amount of the losses absorbed by the Group.
3.3 - Main judgements and estimates used in the preparation of the financial statements
In the preparation of the consolidated financial statements according to the ASS, the Board of Directors of the Group uses judgements,
estimates and assumptions which affect the application of policies and reported amounts.
Estimates and judgements are continually evaluated based on the historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these
estimates and assumptions, namely in what concerns the impact of the costs and income that will actually occur.
The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities are discussed below.
(a) Useful life of tangible and intangible fixed assets
The useful life of an asset is the estimated period of during which an asset subject to depreciation is judged to be productive in a
business and should be reviewed at least at the end of each economic year.
The amortisation/depreciation method applicable and estimated losses arising from replacing the equipment before the end of their
useful life, due to technology obsolescence, is crucial to determine the effective life of an asset.
These parameters are defined according to the management's best estimate for the assets and businesses concerned, considering the
practices adopted by companies in the sector where the Company operates.
(b) Deferred tax assets
Deferred tax assets are recognised for all recoverable losses to the extent that it is probable that taxable profit will be available against
which the losses can be utilised.
Given the current crisis background and the impact it can have on future results, management judgement is required to determine the
amount of deferred tax assets that can be recognised taking into account:
•
•
Probable date and amount of future tax profits; and
Strategies for future tax planning.
(c) Provisions for tax
The Group, based on the opinion of its tax consultants and taking into account recognised liabilities, believes that any possible revision
of such tax returns will not result in significant corrections of the consolidated financial statements that may require any provision for
tax.
(d) Fair value of financial instruments
When the fair value of financial assets and liabilities at the date of the consolidated balance sheet cannot be determined on active
48
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
markets, it will be determined based on valuation techniques including discounted cash flows and other adequate techniques under the
circumstances. The inputs for these techniques will be withdrawn, where possible, from market variables, but if not possible, a certain
degree of judgement will be required to determine the fair value, including considerations on the liquidity risk, credit risk and volatility.
(e) Post-employment benefits
Evaluation of the liabilities for retirement and healthcare benefits of employees is made annually, based on actuarial valuations made
by independent experts, based on actuarial assumptions associated to economic and demographic indicators. All indicators used are
specific to the countries where the benefits are attributed and include, among others:
Wage growth rate, Fund income rate and technical interest rate;
Mortality tables available for Portugal;
Future salary and pension increases based on expected future inflation rates for Portugal.
Changes in these assumptions may have a significant impact on liabilities.
(f) Development costs
Development costs are capitalised according to the accounting policy described in Note 3. Initial capitalisation of costs is based on
management’s judgement that technological and economical feasibility is confirmed, usually when a product development project has
reached a defined milestone according to an established project management model. In determining the amounts to be capitalised the
Board of Directors makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and
the expected period of benefits.
(g) Impairment in accounts receivable
The credit risk of accounts receivable is assessed at each reporting date, taking into account historical information on the debtor and
respective risk profile as referred to in paragraph 3.1.
Accounts receivable are adjusted by the assessment made to estimated collection risks existing at balance sheet date, which may differ
from the effective risk to incur in the future.
(h) Provisions
The recognition of provisions includes determining the probability of future outflows and its reliable measurement
These factors are often dependent on future events which are not always under the Group's control, hence they may lead to significant
adjustments in the future, via change in the assumptions used or the future recognition of provisions previously recorded as contingent
liabilities.
(i) Provisions dismantling and restoring sites
Provisions for dismantling and removal of goods from the tangible fixed asset and for restoring the site depend on assumptions and
estimates that make them sensitive to:
•
•
•
Expected cost to be incurred;
Foreseeable date for the occurrence of the costs;
Discount rate used in the discount of expected outflows.
49
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
4. CASH FLOWS
Caption Cash and Cash Equivalents in the Cash Flow Statement is made up as follows:
31-12-2014
32.126
14.988
13.651.763
3.116.179
8.500.000
12.000.000
22.183.889
15.131.167
Cash
Demand deposits
Other bank deposits
31-12-2013
5. RELATED PARTIES
5.1 – Group Entities
The Company is 100% held by CUF – Companhia União Fabril SGPS, S.A., which in turn is 100% held by CUF – Consultadoria e Serviços,
S.A.
CUF – Consultadoria e Serviços, S.A. also discloses consolidated financial statements.
The companies included in the consolidation, their head offices and the proportion of capital held in them at 31 December 2014 and
2013 are as follows:
Effective control 2014 Effective control 2013
Location
% held
CUF - Químicos Industriais, S.A. ("CUF Químicos") and subsidiaries:
Estarreja
100,0%
100,0%
Renoeste - Valorização de Recursos Naturais, S.A. ("Renoeste")
Estarreja
100,0%
100,0%
100,0%
Pontevedra
100,0%
100,0%
100,0%
Nutriquim - Produtos Químicos, S.A. ("Nutriquim")
Barreiro
100,0%
100,0%
100,0%
Quimigest - Soc. Química de Prestação de Serviços, S.A. ("Quimigest")
Estarreja
100,0%
100,0%
100,0%
Aquatro - Projectos e Engenharia, S.A. ("Aquatro")
Barreiro
100,0%
100,0%
100,0%
Subsidiaries
Electroquímica del Noroeste, S.A. ("Elnosa")
100,0%
These subsidiaries were fully consolidated according to the criteria described in Note 3.
Associates
AQP - Aliada Quimica Portugal, Lda ("AQP")
Location
% held
2014
2013
Lisbon
49,9%
49,9%
49,9%
5.2 – Transactions with related parties:
Transactions with related parties occurred in the years ended 31 December 2014 and 2013 were as follows:
50
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
2014
Companies
-
CUF SGPS, SA
21.108
493.749
AQP Aliada Quimica Portugal
Other income
Services purchased
Sales and services
-
8.175
AP Amoniaco de Portugal
-
22.026.565
CUF Consultoria Serviços
-
2.829.492
4.592
Innovnano
SGPAMAG, S.A.
178.014
-
-
13.846
1.460.231
109.309
512.187
26.337.397
295.498
2013
Companies
-
CUF SGPS, SA
AQP Aliada Quimica Portugal
413.393
AP Amoniaco de Portugal
144.881
450.211
SGPAMAG, S.A.
-
11.375.295
-
2.748.937
2.520
Innovnano
-
-
-
CUF Consultoria Serviços
Other income
Services purchased
Sales and services
174.020
-
-
27.019
1.338.880
96.698
587.813
15.913.322
270.719
As of 31 December 2014 and 2013, balances with these entities were made up as follows:
31-12-2014
Companies
Assets
Liabilities
Clients (Note
13.1)
Other debtors
(Note 13.1)
Advances to
suppliers
272.268
-
-
CUF - Consultadoria e Serviços, S.A.
Shareholders
428.584
Suppliers
(Nota 13.2)
Other creditors
Shareholders
59.830
-
3.244.296
651.500
-
-
-
-
8.654
-
40.043
-
-
-
-
-
-
2.450.941
-
-
-
INNOVNANO – Materiais Avançados, S.A.
100.207
-
SGPAMAG, S.A.
285.639
105.107
3.149.098
105.107
CUF SGPS, SA
AQP Aliada Quimica Portugal
AP - Amoníaco de Portugal, S.A.
310.000
-
1.744.369
-
-
-
-
-
-
-
-
-
-
310.000
428.584
-
1.815.754
3.895.796
31-12-2013
Liabilities
Assets
Companies
Clients (Note
13.1)
-
CUF SGPS, SA
Shareholders
Suppliers
(Nota 13.2)
Other creditors
Shareholders
-
-
-
-
-
10.398
-
-
-
-
-
-
2.810.858
-
-
-
106.078
-
-
CUF - Consultadoria e Serviços, S.A.
910.947
83.401
-
-
-
889.634
-
-
-
3.943.297
-
-
INNOVNANO – Materiais Avançados, S.A.
SGPAMAG, S.A.
51
Advances to
suppliers
53.326
AQP Aliada Quimica Portugal
AP - Amoníaco de Portugal, S.A.
Other debtors
(Note 13.1)
ANNUAL REPORT 2014
910.947
637.167
-
-
5.774
482.362
1.125.303
3.655.817
-
-
-
-
3.666.215
CUF - QUÍMICOS INDUSTRIAIS, S.A.
6. TANGIBLE FIXED ASSETS
The gross recorded amount and any cumulative depreciation and impairment losses and the reconciliation of the recorded amount
for the beginning and end of the period, separately showing increases, revaluations, disposals, assets held for sale, amortisation,
impairment losses and respective reversals and other changes, are specified in the following table:
Land and natural
resources
Buildings and
other
constructions
Basic equipment
Transport
equipment
Administrative
equipment
Other fixed
assets
Investments in
progress
Subtotal
Total tangible
assets
Cost:
1.028.614
33.104.166
259.768.550
1.538.178
2.678.308
744.622
298.862.438
1.927.689
300.790.126
Increases
36.904
424.304
3.528.581
1.169
40.279
873.304
4.904.540
1.931.430
6.835.970
Transfers
-
342.925
1.269.553
-
567
3.751
1.616.795
(1.619.366)
(2.571)
Disposals
-
-
-
(35.139)
(35.139)
01 January 2013
Write-offs
-
1.065.518
31 December 2013
33.871.395
264.566.684
(729.443)
809.904
2.719.154
1.621.676
(729.443)
304.654.331
-
(729.443)
2.204.613
306.858.944
Increases
89.484
106.746
1.924.573
19.500
22.405
40.493
2.203.200
3.377.684
5.580.884
Transfers
-
206.460
1.712.072
37.658
19.005
20.241
1.995.436
(2.100.160)
(104.724)
Disposals
-
-
-
(13.951)
-
-
(13.951)
-
Write-offs
-
-
(7.739)
-
(523)
-
(8.262)
-
(8.262)
Transfers
-
-
-
-
(7.000)
(74.124)
(81.124)
-
(81.124)
2.753.040
1.608.286
308.749.630
1.155.002
31 December 2014
Land and natural
resources
34.184.601
Buildings and
other
constructions
268.195.590
Basic equipment
853.111
Transport
equipment
Administrative
equipment
Other fixed
assets
Subtotal
3.482.137
Investments in
progress
(13.951)
312.231.767
Total tangible
assets
Amortization and Impairment:
-
21.688.239
123.742.715
1.296.615
2.497.102
354.513
149.579.184
-
149.579.184
Amortisation (Note 25)
-
1.259.657
16.422.388
53.444
80.435
880.299
18.696.224
-
18.696.224
Write-offs
-
(720.162)
-
(720.162)
-
(720.162)
01 January 2013
-
-
629.897
2.577.537
1.234.812
167.555.246
-
167.555.246
41.657
52.205
66.062
17.854.919
-
17.854.919
(13.951)
-
-
(13.951)
-
(13.951)
-
(4.439)
-
(4.439)
(7.000)
(74.124)
(81.124)
-
(81.124)
2.622.219
1.226.750
185.310.651
-
185.310.651
-
22.947.896
140.165.103
Amortisation (Note 25)
-
1.295.728
16.399.268
Disposals
-
-
-
Write-offs
-
-
(3.916)
-
(523)
Transfers
-
-
-
-
31 December 2013
31 December 2014
-
24.243.624
156.560.455
-
657.602
Net carrying amount:
31 December 2014
1.155.002
9.940.977
111.635.135
195.508
130.821
381.536
123.438.979
3.482.137
126.921.116
31 December 2013
1.065.518
10.923.499
124.401.581
180.007
141.616
386.864
137.099.085
2.204.613
139.303.698
01 January 2013
1.028.614
11.415.927
136.025.835
241.563
181.206
390.108
149.283.253
1.927.689
151.210.942
As shown in table above, depreciation for the period totalled EUR 17 854 thousand (2013: EUR 18 696 thousand) and cumulative
depreciation at the end of the period totalled EUR 185 311 thousand (2013: EUR 167 555 thousand).
52
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
7. INVESTMENT PROPERTY
Investment property is property held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or
both. Therefore, an investment property generates cash flows largely independent from the other assets held by the entity, which are
whether occupied by Group companies or held for use in the production or supply of goods or services, or determined as for short-term
sale in the ordinary course of business.
As described in paragraph 3.1-b), the Company adopts the cost model to evaluate its investment property.
The gross recorded amount and any cumulative depreciation and impairment losses and the reconciliation of the recorded amount
for the beginning and end of the period, separately showing increases, revaluations, disposals, assets held for sale, amortisation,
impairment losses and respective reversals and other changes, are specified in the following table:
Land and natural resources
Buildings and other
constructions
Total Investment property
Cost:
01 January 2013
18.879.042
2.481.839
21.360.881
Disposals
-
-
-
Write-offs
(38.002)
-
(38.002)
31 December 2013
18.841.040
Disposals
2.481.839
(102.468)
31 December 2014
18.738.572
Land and natural resources
2.481.839
Buildings and other
constructions
21.322.879
(102.468)
21.220.411
Total Investment property
Amortization and Impairment:
01 January 2013
Depreciation (Note 25)
31 December 2013
Depreciation (Note 25)
31 December 2014
1.509.352
-
1.509.352
-
89.003
89.003
-
1.598.356
1.598.356
-
88.323
88.323
-
1.686.679
1.686.679
Net carrying amount:
31 December 2014
18.738.572
795.160
19.533.732
31 December 2013
18.841.040
883.483
19.724.523
01 January 2013
18.879.042
972.487
19.851.529
As shown in table above, depreciation for the period totalled EUR 88 thousand (2013: EUR 89 thousand) and cumulative depreciation
at the end of the period totalled EUR 1.687 thousand (2013: EUR 1.598 thousand).
53
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
8. INTANGIBLE ASSETS
The gross recorded amount and any cumulative amortisation and the reconciliation of the recorded amount for the beginning and end
of the period, separately showing increases, disposals, assets held for sale, amortisation, impairment losses and other changes, are
shown in the following table:
Development
projects
Industrial
property
Software
Emission
Rights
Subtotal
Investments in
progress
Total intangible
assets
Cost:
01 January 2013
1.705.192
538.890
-
-
Emission Rights granted
-
-
-
Acquisitions
-
10.176
19.532
Transfers
-
41.500
3.350
590.565
22.882
31 December 2013
1.705.192
Acquisitions
Use of emission rights
Changes in fair value
2.643.623
105.668
-
29.708
(63.389)
44.850
(42.279)
4.962.262
-
2.349.750
2.643.623
(33.681)
2.571
4.962.263
-
-
2.356
-
2.356
-
-
(118.773)
(118.773)
-
(118.773)
-
-
1.005.880
1.005.880
-
1.005.880
-
-
104.724
-
104.724
5.956.450
-
5.956.450
1.812.272
Development
projects
590.565
-
2.643.623
104.724
31 December 2014
-
2.244.081
2.356
-
Transfers
2.643.623
-
22.882
Industrial
property
Software
3.530.730
Emission
Rights
Subtotal
Investments in
progress
Total intangible
assets
Amortization and Impairment:
-
95
156.405
183.619
-
183.619
1.705.192
526.933
95
156.405
2.388.625
-
2.388.625
26.770
25.227
1.144
423.780
476.921
-
476.921
-
-
-
(118.773)
(118.773)
-
(118.773)
1.239
461.411
Amortisation (Note 25)
31 December 2013
-
Amortisation (Note 25)
Write-offs
31 December 2014
2.205.007
2.205.007
27.119
1.705.192
01 January 2013
1.731.962
499.815
552.160
-
-
2.746.773
-
2.746.773
Net carrying amount:
38.405
21.643
3.069.319
3.209.677
-
3.209.677
31 December 2013
(1)
63.632
22.787
2.487.218
2.573.637
-
2.573.637
01 January 2013
(1)
39.075
-
80.309
31 December 2014
-
39.074
105.668
144.743
As shown in table above, depreciation for the period totalled EUR 477 thousand (2013: EUR 184 thousand) and cumulative depreciation
at the end of the period totalled EUR 2 747 thousand (2013: EUR 2 389 thousand).
54
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
9. EQUITY HOLDINGS
The Group’s equity holdings at 31 December 2014 and 2013 are made up as follows:
31-12-2014
31-12-2013
Equity method
Investments in associates (Note 9.1)
1.103.105
1.057.186
1.103.105
1.057.186
31-12-2014
31-12-2013
Other methods
Investment in other companies
Non listed shares (Note 9.2)
9.228
9.218
9.228
9.218
9.1– Investment in associates:
Associated companies consolidated according to the equity method, their head offices and the proportion of capital held in them are
as follows:
Financial information at 31 December 2014
Net profit
Share capital
31-12-2014
%
31-12-2013
Equity method
AQP
2.118.609
486.305
ECODEAL
49,90
1.103.105
23
1.057.186
-
Changes occurred during the year in subsidiaries measured by the equity method are as follows:
Balance at 01 January
2014
AQP
1.057.186
Balance at 01 January
2013
AQP
1.001.011
55
ANNUAL REPORT 2014
Net profit (Note 19)
486.305
Net profit (Note 19)
440.386
Dividend distribution
(440.386)
Dividend distribution
(384.210)
Balance at 31
December 2014
1.103.105
Balance at 31
December 2013
1.057.186
CUF - QUÍMICOS INDUSTRIAIS, S.A.
9.2 – Equity Holdings – other methods
31-12-2014
Erase - Emp. Regeneração de Águas e Solos de Estarreja
31-12-2013
9.228
9.228
Other
13.400
13.400
22.628
22.628
Amortization and provisions for losses in securities and other applications
(13.400)
(13.410)
9.228
9.218
10. INVENTORIES
10.1 – Inventories
The total amount of inventories and the amount recorded under adequate classifications are as follows:
31-12-2014
Goods
31-12-2013
29.576
134.374
Raw materials, subsidiary materials and consum.
16.057.540
12.881.755
Finished and semi finished products
13.369.765
14.829.151
Products and work in progress
29.456.881
12.679
27.857.959
The amounts of inventories recognised as expenses for the period are as follows:
10.2 – Work in progress
Finished and semi finished
products
Balance at 01 January 2013
15.507.849
Products and work in
progress
Total
21.704
Adjustments
(120.321)
-
Increase/decrease for the year
(558.377)
(9.025)
15.529.553
(120.321)
(567.402)
Balance at 31 December 2013
14.829.151
12.679
14.841.830
Balance at 01 January 2014
14.829.151
12.679
14.841.830
Adjustments
Impairment
Increase/decrease for the year
Balance at 31 December 2014
56
ANNUAL REPORT 2014
633.784
-
633.784
(2.028.515)
-
(2.028.515)
(64.656)
13.369.765
(12.679)
-
(77.335)
14.130.711
CUF - QUÍMICOS INDUSTRIAIS, S.A.
10.3 – Cost of goods sold
Raw-materials, subsidiaries &
consumables
Goods
Balance at 01 January 2013
Purchases
Balance at 31 December 2013
601.962
13.556.883
14.158.846
15.651.430
213.922.397
229.573.827
(134.374)
16.119.018
Balance at 01 January 2014
Purchases
Impairments
(12.881.755)
(13.016.129)
230.716.544
214.597.526
134.374
12.881.755
13.016.129
28.191.328
219.579.387
247.770.715
(867.247)
(867.247)
-
Correction of inventories
Balance at 31 December 2014
Total
(29.576)
28.296.126
(85.141)
(85.141)
(16.057.540)
(16.087.116)
243.747.341
215.451.215
10.4 – Impairment of Inventories
The amount of adjustments and reversals of inventories recognised as expenses for the period and as decrease in expenses for the
period are as follows:
2014
2013
(867.247)
(289.430)
Impairment losses
Raw materials, subsidiary materials and consum.
Finished and semi finished products
(2.028.515)
-
Reversal of impairment losses:
Finished and semi finished products
(2.895.762)
87.314
(202.117)
The fall in benzene prices in the last quarter of 2014 and beginning of 2015 led to impairments in benzene and MNB finished and
intermediate products with significant impact. This change driven by market prices affect stock levels, since the likelihood of offsetting
this fall is uncertain.
11. STATE AND OTHER PUBLIC ENTITIES
At 31 December 2014 and 2013 this caption was made up as follows:
31-12-2014
31-12-2013
Balances receivable
VAT
2.253.829
214.974
2.253.829
214.974
Other taxes
Balances payable
Special and tax payments on account
Income tax withheld
-
12.935
130.951
165.938
VAT
202.914
1.082.087
Payments to Social Security
218.028
225.066
551.893
1.486.026
57
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
12. DEFERRALS
12.1 – Expenses to recognise
At 31 December 2014 and 2013 recognisable expenses are made up as follows:
31-12-2013
31-12-2014
Expenses to recognise
Insurance
119.143
Other
103.752
80.813
56.132
199.956
159.884
12.2 – Income to recognise
At 31 December 2014 and 2013 recognisable income is made up as follows:
31-12-2013
31-12-2014
Income to recognise
Surface Rights
161.428
Investments in progress
174.143
-
13.852
161.428
187.995
13. FINANCIAL INSTRUMENTS
Measurement bases and other accounting policies used in the accounting of financial statements that are relevant for an understanding
of the financial statements are described in the sub-paragraphs of paragraph 3.1.
13.1– Clients and other accounts receivable
Financial assets with recognised impairment losses, specifying separately for each category i) the carrying amount resulting from the
measuring at cost or at amortised cost, and ii) cumulative impairment, are as follows:
31-12-2014
Cost
Cumulative
impairment
31-12-2013
Book value
Cumulative
impairment
Cost
Book value
Clients
26.294.650
-
26.294.650
37.751.804
-
37.751.804
Clients - securities receivable
Clients c/a
2.147.674
-
2.147.674
1.309.956
-
1.309.956
Group clients and other related parties (Note 5.2)
3.149.098
-
3.149.098
3.943.297
-
3.943.297
Doubtful receivables
3.023.570
(3.023.570)
34.614.991
(3.023.570)
31.591.422
3.013.479
(3.013.479)
46.018.537
(3.013.479)
43.005.057
Other accounts receivable
Other accounts receivable c/a
4.881.044
Other doubtful receivables
(2.038.770)
Personnel
2.264
Accounts receivable for accrued income
220.514
3.065.052
58
ANNUAL REPORT 2014
(2.038.770)
(2.038.770)
4.881.044
328.993
(4.077.540)
2.038.770
2.264
4.172
220.514
1.026.282
2.371.935
(2.038.770)
(2.038.770)
328.993
4.172
333.165
CUF - QUÍMICOS INDUSTRIAIS, S.A.
The amount of impairment losses recognised for each class of financial assets is as shown in the following tables:
31-12-2014
Opening balance
Impairment (P&L)
Reversal (P&L)
Use
Closing Balance
Financial assets measured at cost minus impairment;
Clients
General clients
(3.013.479)
(25.710)
(52.424)
68.044
(3.023.570)
(25.710)
(52.424)
68.044
(5.062.340)
Other accounts receivable - current
Other accounts receivable c/a
(2.038.770)
(5.052.250)
31-12-2013
Opening balance
(2.038.770)
Impairment (P&L)
Reversal (P&L)
Use
Closing Balance
Financial assets measured at cost minus impairment;
Clients
General clients
(3.092.273)
(32.707)
102.501
8.999
(3.013.479)
(2.038.770)
-
(2.800.000)
-
2.800.000
-
-
(2.038.770)
(7.931.043)
(32.707)
2.902.501
8.999
Other accounts receivable - current
Other accounts receivable c/a
Shareholders - current
-
(5.052.250)
13.2 – Accounts payable
As at 31 December 2014 and 2013, caption Accounts Payable is made up as follows:
31-12-2014
31-12-2013
Trade payables
23.299.500
22.280.115
Suppliers - securities payable
Trade payables c/a
1.250.563
1.100.710
Suppliers of the Group (Note 5.2)
1.815.754
1.125.303
Invoices expected or being checked
1.132.192
5.498.601
27.498.009
30.004.729
13.3 – Other accounts payable
As at 31 December 2014 and 2013, caption Accounts Payable is made up as follows:
31-12-2014
Suppliers of investment a/c
31-12-2013
1.330.497
1.248.111
5.977
4.442
Increase for holiday pay and holiday bonus
941.859
1.120.294
Other increase
811.460
677.288
Personnel
Accounts payable for accrued expenses
Other Receivables and Trade Payables
59
ANNUAL REPORT 2014
1.739.916
60.392
4.829.708
3.110.527
CUF - QUÍMICOS INDUSTRIAIS, S.A.
13.4 – Borrowings
Caption borrowings as of 31 December 2014 and 2013 is made up as follows:
31-12-2014
Financing entity
6.000.000
Bank loans at cost
1.000.000
92.997.415
-
-
1.375.922
Other AICEP loans
12.349.123
-
-
Other AICEP loans
-
-
2.916.058
40.137
93.813.886
98.124.061
-
985.000
816.471
8.375.922
Non current
Current
Non current
Current
Bank loans at cost
Secured accounts
31-12-2013
16.290.318
6.605.414
104.729.475
Bank loans measured at amortised cost and respective terms and conditions are as shown in the following table:
Maturity
31-12-2014
31-12-2013
Loans payable
Non current
Bank loans
EIB
30-12-2022
39.990.000
42.870.000
BES+CGD
30-12-2022
43.322.500
46.442.500
BES Floating interest rate swaps
30-12-2022
4.844.195
4.408.419
CBI Floating interest rate swaps
30-12-2022
4.840.719
4.403.141
92.997.415
98.124.061
Floating interest rate swaps
Current
Bank loans
EIB
30-12-2022
2.880.000
5.670.000
BES+CGD
30-12-2022
3.120.000
6.142.500
BIC
05-09-2014
-
536.623
6.000.000
12.349.123
98.997.415
110.473.184
The amounts resulting from changes in the fair value of hedging instruments recognised in equity during the period, to hedge the
interest rate risk of the loans contracted for the Capacity Expansion Plan are as follows:
31-12-2012
Changes in fair
value
31-12-2013
Changes in fair
value
31-12-2014
Adjustments to financial assets and liabilities
Change in assets
Equity holdings
-
43.874
43.874
-
43.874
Change in liabilities
Derivatives with effective hedging
Floating interest rate swaps
60
ANNUAL REPORT 2014
8.894.410
(2.417.913)
6.476.497
1.029.312
7.505.809
8.894.410
(2.374.039)
6.520.371
1.029.312
7.549.683
CUF - QUÍMICOS INDUSTRIAIS, S.A.
14. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The accounting policies followed to recognise Provisions, Contingent Liabilities and Contingent Assets are described in the following
sub-paragraphs of paragraph 3.1.
14.1 - Provisions
The change occurred in provisions, according to provision, is as follows:
Other provisions
1.359.461
01 January 2013
TOTAL
1.359.461
Used in the year
(22.695)
(22.695)
Increases for the year
921.227
921.227
31 December 2013
2.257.993
2.257.993
01 January 2014
2.257.993
2.257.993
Reversals in the year (Note 29.1 + PL)
(871.169)
Increases for the year
910.897
910.897
2.297.722
2.297.722
31 December 2014
(871.169)
The Group has another provision in the amount of €800 thousand relating to subsidiary Elnosa, which has its facilities located on a land
subject to a concession agreement for a 50-year period, ending in 2018. At the end of the concession, Elnosa will have to clean and
decontaminate the land before returning it, having set up the said provision to this end.
For the same reason, i.e. end of the concession in 2018, Elnosa decided to set up a provision to face restructuring costs, in the amount
of 499 thousand Euros, to be allocated on a straight-line basis to each of the remaining years.
As far as Nutriquim is concerned, taking into consideration the company's restructuring plan, a provision was also set up, in the amount
of € 1.150 thousand in 2013; part of this provision was used in 2014 to face personnel costs, and was further increased for the same
purposes, by € 778 thousand.
CUF Químicos (former Quimigal – Química de Portugal) was sentenced in a lawsuit, though the compensation amount payable is not yet
known; as result, for conservative reasons, the company decided to set up a provision in 2013 for the total amount of the lawsuit, i.e. €
4 million. The company has appealed against the decision, and the provision was adjusted accordingly to € 1.500 thousand.
61
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
15. EMPLOYEES BENEFITS
15.1 - Employees benefits
The reconciliation between opening and closing balances of the current value of these obligations is shown in the following table:
Post- employment benefits
Defined retirement benefit plan Medical benefit plan (no
(no fund set up)
Fund set up)
Interest expenses
172.920
-
10.719
-
Cost of current service
Benefits paid
(511.842)
Actuarial (gains) / losses
(504.893)
Interest expenses
172.920
10.719
(113.983)
(625.825)
22.183
(482.710)
5.127.129
786.000
4.341.129
Liability for defined benefits at 31 December 2013
6.052.024
877.800
5.174.224
Liability for defined benefits at 01 January 2013
Total
143.335
Cost of current service
143.335
525
Benefits paid
525
(505.112)
Actuarial (gains) / losses
Liability for defined benefits at 31 December 2014
(133.625)
(638.737)
433.979
45.226
479.205
4.413.856
697.601
5.111.457
15.2 - Post-employment benefits
The Group's accounting policy concerning the recognition of actuarial gains and losses relating to post-employment benefits pursuant
to Defined Benefit Plans is described in sub-paragraph o.1) of paragraph 3.1.
Name of plan
Company
Type
Addressees
Location
CUF Quimicos
Retirement pension plans
Defined benefit - complementary pension for old age,
disability and survival
Former and current
employees from ex-CUF
Portugal
CUF Quimicos
Medical benefits
Defined benefit - medical benefits without provided fund
Former and current
employees from ex-CUF
Portugal
CUF - Químicos has commitments with some employees to complement the retirement pensions for old age, disability and survival.
These actuarial valuations were carried out using two methods:
(a) Projected Unit Credit method and the following assumptions and technical bases in 2014 and 2013:
31-12-2014
31-12-2013
Salary growth rate for Social Security Security
2,0%
3,0%
Salary growth rate
2,0%
3,0%
Rate of return of the fund
3,5%
5,0%
Pension growth rate
0,0%
0,0%
Technical rate (life rents)
3,5%
5,0%
Revaluation of salaries for Social Security
1,0%
2,0%
Mortality table
TV 88/90
TV 88/90
Disability table
EKV80
EKV80
62
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
CUF – Químicos has to complement the retirement pensions of its former and current employees coming from former CUF and only
these with whom it assumed such obligation.
Although it did not set up any fund or insurance to cover these liabilities, the Company set up a specific provision which is updated based
on an actuarial study carried out by a specialised independent company. According to the valuation report prepared by PensõesGere
– S.G.F.P., S.A., the current value of liabilities for past services and retirement pensions at the date of the balance sheet is estimated at
EUR 4.414 thousand; the liability for post-employment benefits was adjusted accordingly.
15.3 - Healthcare benefits
Pursuant to an agreement entered with Hospital CUF, CUF Químicos has the responsibility to pay in-patient, out-patient and surgery
expenses, as well as the share part of medicines not paid by Social Security (only medicines covered by Social Security) of its former and
current employees from ex-CUF (and only those) with whom it assumed this responsibility.
This Company has not set up any fund or insurance to cover this responsibility, however it did set up a provision for the purpose, which
is adjusted according to an actuarial valuation carried out by a specialized and independent company. According to the valuation report
presented by the company, the current amount of the liabilities with past services of CUF Químicos with healthcare as of 31 December
2014 at €698 thousand (2013: €786 thousand), recorded under item “Liabilities for post-employment benefits".
15.4 - Personnel expenses
Personnel expenses were as follows:
2014
2013
Remuneration of the members of governing bodies
1.062.485
558.166
Wages
8.152.894
8.078.944
589.904
(320.704)
Retirement benefits
Retirement pension plans
Indemnities
1.020.351
40.902
Wage expenses
2.236.793
2.085.802
Occupational insurance
107.851
94.190
Social security expenses
854.477
806.793
Other personnel expenses
During 2014 and 2013, the average number of employees totalled 338 and 336, respectively.
63
ANNUAL REPORT 2014
122.019
203.615
14.146.773
11.547.707
CUF - QUÍMICOS INDUSTRIAIS, S.A.
16. OTHER EQUITY INSTRUMENTS
16.1 – Capital
The Company’s capital at 31 December 2014 and 2013 was made up of 6.100.000 fully subscribed and paid up shares of five Euro each,
100% held by CUF - Companhia União Fabril, SGPS, S.A.
16.2 - Reserves and Results
This caption is made up as follows:
Legal reserves
Balance at 01 January 2014
Remaining of the appropriation of Results
3.955.946
341.637
Other reserves
18.066.308
-
16.324.226
6.491.101
Result for the year
-
Revaluation surplus of tangible and intangible assets and respective changes
-
(187.104)
187.104
Adjustments for deferred tax
-
639.777
(12.829)
Balance at 31 December 2014
4.297.583
Legal reserves
Balance at 01 January 2013
3.661.880
Set up of Legal Reserve
294.066
-
Results brought
forward
18.518.981
Other reserves
18.114.078
-
-
22.989.601
Results brought
forward
45.689.213
-
Income distribution
-
-
(35.000.000)
Remaining of the appropriation of Results
-
-
5.587.242
Result for the year
-
-
-
Other
-
(47.770)
47.770
Balance at 31 December 2013
3.955.946
18.066.308
16.324.226
Net Profit/(Loss) for
the year
6.832.738
(6.832.738)
5.490.581
5.490.581
Net Profit/(Loss) for
the year
5.881.308
(5.881.308)
6.832.738
6.832.738
16.3 - Other changes in equity
This caption is made up as follows:
Subsidies (Note 17)
Emission Rights
Other
31-12-2014
31-12-2013
11.484.148
8.599.274
2.378.722
1.828.105
58.183
13.921.053
64
ANNUAL REPORT 2014
10.427.379
CUF - QUÍMICOS INDUSTRIAIS, S.A.
Changes in issuing rights are as follows:
31-12-2014
-
2.487.218
Balance at 1 January
Granted (Note 8)
-
Used (Notes 22 and 29.1)
2.643.623
(423.780)
Fair value (Note 29.1)
1.005.880
Balance at 31 December
3.069.318
Deferred taxation (Note 28)
(156.405)
2.487.218
(690.597)
Net balance at 31 December, Net
31-12-2013
(659.113)
1.828.105
2.378.722
17. GOVERNMENT SUBSIDIES
The accounting policies followed to recognise government subsidies, including the methods followed to present them in the financial
statements are described in the following sub-paragraphs of paragraph 3.1:
The nature and amount of the government subsidies recognised in the financial statements are as follows:
Recognised in equity:
2014
Gross value
2013
Deferred taxes
Net value
Gross value
Deferred taxes
Net value
5.228.585
11.699.691
(3.100.417)
8.599.274
7.113.720
(1.885.135)
Received in the year
4.431.754
(997.145)
3.434.609
6.204.456
(1.644.181)
4.560.275
Transferred to results (Note 22)
(1.313.191)
(1.313.191)
(1.607.124)
425.888
(1.181.236)
Opening balance
Adjustment
14.818.255
Closing Balance
Attributable to the Group (Note 16.3)
763.456
763.456
(3.334.106)
11.484.148
(11.360)
11.699.691
3.011
(3.100.417)
(8.350)
8.599.274
8.599.274
11.484.148
Recognised in income for the year:
2014
Investment subsidy (Note 22)
Operating subsidies
1.313.191
12.029
1.325.219
2013
1.607.124
1.607.124
In 2012, 2013 and 2014 AICEP granted CUF QI an achievement award within the scope of the Investment Contract in force, recognised
as Non Refundable Subsidy granted pursuant to the Capacity Expansion Project.
The Group did not benefit directly from any other Government aid.
65
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
18. REVENUE
The accounting policies followed to recognise revenue, including the methods followed to determine the ending phase of transactions
involving the rendering of services are described in paragraph 3.1-q).
As of 31 December 2014 and 2013, item Sales and Services is broken down as follows:
2013
2014
Sale of Goods
Goods
14.107.820
15.756.223
335.413.180
311.580.460
Sub-products, waste and residues
147.125
201.707
Return of sales
(192.740)
(35.913)
(1.347.641)
(643.064)
Finished and semi finished products
Discounts and reductions to sales
348.127.743
326.859.412
2.211.364
2.257.985
Rendered services
Services
Discounts and reductions
(201.167)
(56.011)
2.010.197
2.201.974
350.137.940
329.061.386
Sales and services broken down by significant geographical market are as follows:
2014
Portugal
Sale of Goods
Rendered services
Europe
199.092.170
147.210.992
1.865.070
145.128
200.957.239
147.356.120
America
Asia
Africa
176.721
1.432.130
176.721
215.731
1.432.130
Total
215.731
348.127.743
2.010.197
350.137.940
2013
Portugal
Sale of Goods
Rendered services
212.448.644
112.465.603
2.194.057
7.917
214.642.701
112.473.520
America
Asia
Africa
Europe
470.028
470.028
1.475.136
1.475.136
Total
-
326.859.412
-
2.201.974
-
329.061.386
Gross margin is as shown in the following table:
2014
2013
Sale
348.127.743
326.859.412
Cost of goods sold (Note 10.3)
(243.747.341)
(230.716.544)
104.380.402
96.142.868
66
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
19. GAINS/LOSSES OF SUBSIDIARIES, ASSOCIATES AND BUSINESS COMBINATIONS
At 31 December 2014 and 2013, this caption was made up as follows:
2014
2013
Income and gains Subs. & Associates Joint undertakings
Application of the Equity Method (note 9.1)
486.305
440.386
486.305
440.386
20. OWN WORK CAPITALISED
At 31 December 2014 and 2013, this caption was made up as follows:
2014
2013
Own work capitalised:
Intangible assets (Note 8)
67
ANNUAL REPORT 2014
19.043
44.597
19.043
44.597
CUF - QUÍMICOS INDUSTRIAIS, S.A.
21. SUPPLIES AND SERVICES
At 31 December 2014 and 2013, this caption was made up as follows:
2014
2013
Sub-contracts
Specialised services
Specialised works
7.160.423
Advertising costs
6.959.237
26.491
24.452
302.059
316.702
Fees
84.651
95.719
Other fees
50.047
43.952
5.108.499
6.398.924
Tools and utensils
41.377
82.147
Books ant technical documentation
54.539
74.134
104.967
31.545
Promotional items
22.389
44.037
Other
30.986
76.520
26.790.266
23.852.606
6.424.019
5.597.424
Surveillance and Safety
Maintenance and repairs
Material
Stationery
Energy and fluids
Electricity
Fuel
Water
Gas
Other fluids
36.059
37.864
307.698
316.649
39.058
65.923
441.227
335.765
Travelling, accommodation and transport
Travelling and accommodation
Transport of personnel
Transport of goods
-
1.589
13.325.438
12.372.515
2.440.409
2.252.160
Sundry services
Rents and rentals
Communication
Insurance
Legal services
69.866
65.656
1.620.108
1.772.860
6.557
6.522
Representation fees
120.937
52.293
Cleaning, Hygiene and comfort
279.077
284.629
Other
112.349
184.669
(3.362.674)
(3.976.697)
Consolidation corrections
61.636.821
68
ANNUAL REPORT 2014
57.369.799
CUF - QUÍMICOS INDUSTRIAIS, S.A.
22. OTHER OPERATING INCOME
At 31 December 2014 and 2013, this caption was made up as follows:
2014
2013
Supplementary income
Equipment rental
Other
1.108.650
1.040.705
667.794
1.040.738
Prompt payment discounts obtained
34
176
Recovery of receivables
11.632
36.562
Gains on inventories
99.556
73.342
409.895
445.209
423.780
156.405
Gains on fixed assets
Disposals
Income and Gains on Non Financial Investments
Gains on emission rights
Use of rights (Note 16.3)
Other
7.706
-
Other
Corrections relating to previous years
Excess of estimated tax
Appropriation of investment subsidies (Note 17)
3.001
296.574
124.786
121.232
1.313.191
1.607.124
Contractual benefits penalties
-
500.000
Indemnities of insurable events
-
478.758
Tax refund
Operating exchange differences (Note 24)
Other, non specified
-
10.138
30.839
35.734
580.040
1.727.479
4.780.901
7.570.175
Other Gains stemming from emission allowances concern the FP Carbon subsidy for the reduction of CO2 emissions at CUF-QI in the
amount of € 424 thousand .
In relation to caption Other (non specified) the most relevant amount refers to the existing agreement for the supply of hydrogen, in
the amount of € 498 thousand.
69
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
23. OTHER OPERATING COSTS
At 31 December 2014 and 2013, this caption was made up as follows:
2013
2014
Tax
318.962
Prompt payment discounts obtained
Losses on inventories
437.597
9.266
6.232
1.061.692
1.080.106
Expenses and losses in remaining financial investments
Other
-
523
Expenses and Losses on Non Financial Investments
Expenses with investment property
Other
22.809
-
-
5
Other
Corrections relating to previous years
Donations
Contributions
Samples and offers of inventories
Insufficiency of estimated tax
Operating exchange differences (Note 24)
1.139
104.002
14.823
17.730
122.895
104.387
2.024
-
23.050
153.629
123.678
131.068
Penalties and fines
34.058
5.604
Other financial expenses and lossea
69.604
147.242
1.804.000
2.188.126
24. EFFECTS OF CHANGES IN EXCHANGE RATES
The amount of foreign exchange differences recognised in the income statement is shown in the following table:
2014
2013
Exchange gains included in:
Other operating income
Other operating exchange differences (Note 22)
30.839
35.734
30.839
35.734
Exchange losses included in:
Other operating costs
Other operating exchange differences (Note 23)
123.678
131.068
123.678
131.068
No changes have occurred in the operating currency or in relation to the parent company or any of its foreign businesses.
25. EXPENSES/REVERSAL OF DEPRECIATION AND AMORTISATION
At 31 December 2014 and 2013, this caption was made up as follows:
2014
2013
Depreciation and Amortisation expenses
Investment property (Note 7)
Tangible fixed assets (Note 6)
Intangible assets (Note 8)
70
ANNUAL REPORT 2014
88.323
89.003
17.854.919
17.917.818
476.921
183.619
18.420.163
18.190.441
CUF - QUÍMICOS INDUSTRIAIS, S.A.
26. FINANCIAL INCOME ANG GAINS
At 31 December 2014 and 2013, this caption was made up as follows:
2014
2013
Interest earned
on deposits
78.315
Other similar income
204.430
15.461
61.938
93.777
266.368
27. FINANCIAL COSTS AND LOSSES
At 31 December 2014 and 2013, this caption was made up as follows:
2013
2014
Interest paid
on loans obtained
Other
3.521.886
5.149.380
1.001
-
Other financing expenses and losses
Other
897.049
8.611
4.419.935
5.157.990
28. INCOME TAX
Expenses (income) for current taxes are as follows:
2014
2013
Current tax
Corporate Income Tax for the year
3.234.705
3.624.345
3.234.705
3.624.345
(340.807)
27.358
Deferred tax
Originated and subject to reversal for temporary differences
(340.807)
2.893.898
27.358
3.651.703
Deferred and current income tax on the items debited or credited to equity are shown in the following table:
2014
2013
Deferred tax
Recognised in revaluation reserves
Recognised in other reserves
Net gains on net investments in foreign operations
Subsidies
71
ANNUAL REPORT 2014
3.328.570
3.959.618
2.290
42.184
(2.179.106)
(2.335.064)
4.024.704
3.759.531
5.176.459
5.426.270
CUF - QUÍMICOS INDUSTRIAIS, S.A.
The amounts of deferred tax assets and liabilities recognised in the balance sheet for each period shown according to each type of
temporary difference and concerning each type of non used tax losses and credit for non used taxes are as follows:
Balance sheet items
31-12-2014
Profit and loss items
31-12-2013
Other equity items
31-12-2014
31-12-2013
(833)
-
-
2013
2014
Deferred tax assets
Temporary differences:
Transition adjustments to ASS
R&D expenses
-
833
(833)
Other
Post employment benefits - medical benefits
156.960
208.290
(51.330)
(24.327)
-
-
Post employment benefits - pensions
993.118
1.150.399
(157.281)
(220.770)
-
-
Provisions not considered for tax purposes
421.520
158.889
262.632
100.657
-
-
(67.850)
-
-
Impairment of non depreciable investments
Changes in fair value
-
-
-
2.179.106
2.335.064
-
3.750.704
3.853.475
53.187
Balance sheet items
31-12-2014
(213.123)
Profit and loss items
31-12-2013
(871.764)
(871.764)
Other equity items
2013
2014
(155.958)
(155.958)
31-12-2014
31-12-2013
Deferred tax liabilities
Temporary differences:
Transition adjustments to ASS
2.290
42.184
(39.894)
(5.861)
Revaluation of investment property
Re-assessment of tangible fixed assets
3.328.570
3.959.618
-
(15.110)
(631.048)
(15.110)
Investment subsidies
3.334.108
3.100.419
-
1.215.282
233.689
1.215.282
690.597
659.113
-
659.113
31.484
659.113
13.145
(13.145)
7.774.479
(53.039)
CO2 licence subsidy
Other
7.355.565
(7.059)
1.846.365
-
(365.875)
(5.861)
1.853.424
29. TOTAL LIABILITIES
29.1 - Environmental matters - Greenhouse gas emissions
Measures to deal with climatic changes have major significance in terms of the environmental policy, with obvious implications in the
near future. As such, an important set of policies and measure has been set up, based on significant interaction with economic agents,
in a true spirit of shared responsibility.
In this context, it is worth noting the European Emissions Trading Scheme (EETS), created by Directive 2003/87/CE of the European
Parliament and Council dated 13 October 2003, amended by Directive 2004/101/CE, of the European Parliament and Council of 27
October 2004, which was the first instrument created at European level to regulate and control greenhouse gas (GHG) emissions.
More recently, within the framework of the climate and energy package, the Parliament and Council issued Directive 2009/29/CE
dated 23 April 2009, which amends Directive 2003/87/CE, of the European Parliament and the Council dated 13 October 2003, to
improve and extend the European emissions trading scheme «new EETS directive», which establishes the legal framework as from 2013.
Subsequently, Decree-law 252/2012 of 26 November transposed the said directive 2009/29/CE into national law, introducing the new
EETS framework in Portugal.
72
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
In the first two periods of the EETS, specifically 2005-2007 and 2008-2012, underlying rules consisted mainly of the free allocation
of emission allowances (EA), the obligation to monitor, verify and communication emissions and the return of allowances in the
corresponding amount. The free allocation was made through national plans PNALE I and PNALE II, both approved by the European
Commission.
According to the latest directive, as rom 2013 rules change considerably, introducing a wider range of gases and sectors, a total amount
of allowances that is determined at EU level and an allocation made through tenders. Allowances remain marginally free, based on
benchmarks defined at community level.
Summing up, allowances will be free, based on benchmarks. This free allocation will correspond initially to 80% of the amount determined
according to the harmonised method, and will decrease annually in equivalent amounts, down to 30% by 2020, until reaching 0% - i.e.
no free allowance - in 2027. This methodology was established by Decision 2011/278/UE of 27 April 2011 issued by the European
Commission, which set forth the transitory rules applicable to the harmonised allocation of free emission allowances, under the terms
of article 10-A of Directive 2003/87/CE of the European Parliament and the Council dated 13 October 2003.
Finally, national plans for the allocation of emission allowances for the 2013-2020 period are replaced by a list of facilities covered by
the EEST and respective allowances awarded for free - the «NIMs List» -, prepared based on data provided for the purposes by eligible
facilities, under the terms of Decision 2011/278/UE of the Commission, dated 27 April 2011.
Within this framework, the following allowances per year were allocated to CUF Químicos Industrias, totalling 546,203 for the 20132020 period.
2014
2013
Allowances
72.799
71.534
2015
70.255
2016
2019
2017
68.962
67.656
65.001
2020
63.660
Total
546.203
Changes in CO2 ton relating to greenhouse gas emission allowances during the year were as follows:
Opening balance
Allowance
Used
(Note
14.1)
Used
(Note
22)
Fair value (Note
16.3)
Reversal
Closing Balance
Balance at 1 January 2011
Ton
-
Value
(40.800)
546.203
2.643.623
-
(32.315)
-
-
513.888
22.695
(156.405)
18.105
-
2.487.218
Balance at 1 January 2014
Ton
Value
73
513.888
-
-
(47.821)
-
2.487.218
-
-
(423.780)
-
ANNUAL REPORT 2014
1.005.880
466.067
3.069.318
CUF - QUÍMICOS INDUSTRIAIS, S.A.
29.2 – Bank guarantees
As of 31 December 2014 and 2013, the Company had liabilities for guarantees given, as follows:
Entities
2014
2013
Value
Value
Agencia de Inovação
-
40.137
Aveiro Customs
-
299.279
Leixões Customs
EIB
374.279
75.000
45.013.500
50.967.000
Municipal Council of Loulé
74.282
74.282
General Directorate for Energy and Geology
14.964
14.964
IAPMEI-Instituto de Apoio às pequenas e Médias Empresas
1.651.354
2.380.368
47.128.379
53.851.030
The amount of € 45.013.500 corresponds to the guarantee associated to EIB loan.
The amount of € 1.651.354 corresponds to guarantees required by the IAPMEI deriving from an investment subsidy granted by this
entity to the Group.
The amount of € 74.282 corresponds to the guarantee required by the Municipal Council of Loulé concerning infrastructures for the real
estate development located in Betunes, subject to Licence nr. 2/2002.
29.3 - Operating leases — as lessee:
Operating leases in which the Group is lessee concern vehicles and premises. These leases do not have purchase option clauses.
The total amount of minimum future lease payments for non-cancellable operating leases is as follows:
2014
Up to 1 year
1.932.019
Over 1 year and up to 5 years
More than 5 years
2013
1.932.019
7.728.078
7.728.078
23.184.234
25.116.253
32.844.331
34.776.350
30. SUBSEQUENT EVENTS
These financial statements were approved for issuing by the Board of Directors.
No events have occurred since 31 December 2014 to the said date that are not already adjusted and/or disclosed in the financial
statements.
The Board of Directors
74
ANNUAL REPORT 2014
The Official Accountant
CUF - QUÍMICOS INDUSTRIAIS, S.A.
75
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
AUDITOR’S REPORT AND OPINION
76
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
77
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
78
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
79
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
LEGAL CERTIFICATION OF ACCOUNTS
80
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
81
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
82
ANNUAL REPORT 2014
CUF - QUÍMICOS INDUSTRIAIS, S.A.
83
ANNUAL REPORT 2014