J.P. Sá Couto, SA – Financial Statements
Transcript of J.P. Sá Couto, SA – Financial Statements
0 J.P. Sá Couto, SA – Financial Statements
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TABLE OF CONTENTS
Management Report ...................................................................................................................................................................... 1
Financial statements - Balance Sheet as at 31 December 2014 and 2013 15
- Income Statement by Nature for the periods ended 31 December 2014 and 2013 16
- Cash Flow Statement for the periods ended 31 December 2014 and 2013 17
- Statement of Changes in Equity for the periods ended 31 December 2014 and 2013 18
Notes to the Financial Statements 1. Introduction .......................................................................................................................................................................................... 21
2. Accounting standards used in the preparation of the financial statements ..................................................................... 21
3. Summary of significant accounting policies ................................................................................................................................ 25
4. Cash flow – Cash and cash equivalent .......................................................................................................................................... 37
5. Tangible assets ................................................................................................................................................................................... 37
6. Intangible assets .................................................................................................................................................................................. 38
7. Financial Investments......................................................................................................................................................................... 39
8. Deferred tax assets ............................................................................................................................................................................ 41
9. Inventories ............................................................................................................................................................................................ 41
10. Trade debtors ...................................................................................................................................................................................... 42
11. Advances to suppliers ........................................................................................................................................................................ 43
12. State and other public entities ......................................................................................................................................................... 43
13. Other debtors ...................................................................................................................................................................................... 44
14. Deferred expenses ............................................................................................................................................................................. 44
15. Other financial assets ........................................................................................................................................................................ 45
16. Share Capital ........................................................................................................................................................................................ 45
17. Legal reserves ...................................................................................................................................................................................... 45
18. Other reserves .................................................................................................................................................................................... 46
19. Provisions .............................................................................................................................................................................................. 46
20. Borrowings ............................................................................................................................................................................................ 46
21. Trade creditors .................................................................................................................................................................................... 47
22. Advance payments from clients .................................................................................................................................................... 48
23. Other creditors .................................................................................................................................................................................... 48
24. Other financial liabilities .................................................................................................................................................................... 49
25. Sales and services rendered ............................................................................................................................................................ 49
26. Increase / decrease in production ................................................................................................................................................. 49
27. Costs of good sold and materials consumed ............................................................................................................................. 50
28. External supplies and services ........................................................................................................................................................ 50
29. Personnel expenses ........................................................................................................................................................................... 51
30. Other operating income .................................................................................................................................................................... 51
31. Other operating expenses ................................................................................................................................................................ 52
32. Amortisation and depreciation losses / reversals ..................................................................................................................... 52
33. Interest and similar income / similar expenses .......................................................................................................................... 52
34. Income taxes ........................................................................................................................................................................................ 53
35. Dividends and earnings per share .................................................................................................................................................. 54
36. Related parties ..................................................................................................................................................................................... 55
37. Subsequent events ............................................................................................................................................................................. 56
38. Contingencies ...................................................................................................................................................................................... 56
39. Guarantees provided .......................................................................................................................................................................... 57
40. Environmental information ............................................................................................................................................................... 57
41. Legally required information ............................................................................................................................................................ 57
42. Financial statements approval ......................................................................................................................................................... 58
Statutory Audit Report ............................................................................................................................................................ 59
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FINANCIAL YEAR 2014
In compliance with the articles 65 and 66 of the Portuguese Commercial Company Law, we hereby submit for
your consideration the Management Report, Financial Statements and related documents required by law or
regulation concerning J.P. Sá Couto, SA (hereinafter, JP-IK), for the period ended 31 December 2014.
1. BUSINESS REVIEW AND COMPANY POLICY
As forecasted in the previous management report, the instability felt in Venezuela in terms of obtaining loans
and foreign currency for payments abroad, led to a revenue decrease of JP-ik, although smaller than originally
forecasted.
In fact, the difficulties felt by Venezuela (main market of JP-ik in recent years) resulted in the country buying the
equipment that it had until then purchased from JP-ik directly from China (due to financing constraints). JP-ik
managed to maintain its positioning in this market: directly through the supply of services in this country,
through a contract drawn up between YOUTSU (ACE 50 % owned by JP-ik) and a Chinese Company, and
indirectly through the supply of some raw materials to that same Chinese Company. In this way we managed to
ensure that the project continues along the lines initially drawn, without JP-ik having to take on Venezuela’s
country risk.
REVENUE EVOLUTION (MILLION EUROS)
53 62 65 73 69 6497
165
280
222
370356
427
331
0
50
100
150
200
250
300
350
400
450
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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This means that the decrease in revenue of about 96 million euros (-22%) to 331 million euros was essentially
due to the shift from the supply of equipment (hardware) to the provision of services in Venezuela, which is a
route that JP-ik wants to consolidate in other projects.
REVENUE BREAKDOWN BY SEGMENTS AND MARKETS
2010 2011 2012 2013 2014
Distribution 76.881.767 € 90.781.140 € 116.693.613 € 127.404.622 € 123.207.367 €
TSUNAMI 10.094.949 € 6.145.250 € 4.657.871 € 4.941.108 € 2.299.679 €
E-Escolas Project 12.557.080 € - € - € - € - €
Education 122.766.717 € 272.861.406 € 234.971.135 € 294.722.165 € 205.947.889 €
Bolivia - € - € - € - € 44.126.625 €
Venezuela 97.692.692 € 155.066.307 € 154.641.362 € 189.896.774 € 43.943.148 €
Argentina - € 65.383.393 € 21.921.036 € 42.398.051 € 42.879.655 €
Brazil 792 € 245 € 478.507 € 4.081.271 € 23.832.192 €
Panama - € 1.587 € 23.571.328 € 10.521.167 € 16.103.476 €
Peru - € - € - € 281.251 € 7.487.697 €
Uruguay 3.098.685 € 7.856.310 € 12.442.478 € 9.523.502 € 4.994.315 €
Taiwan - € - € - € 2.771.685 € 4.987.443 €
Saudi Arabia - € - € - € 1.144 € 3.500.355 €
Spain - € 20.079 € 3.151.514 € 824.260 € 3.227.641 €
Mexico - € 457.841 € 2.323.863 € 18.870.783 € 1.344.105 €
Zimbabwe - € - € - € 538.905 € 1.272.739 €
South Africa - € - € - € 234.454 € 1.123.001 €
Nigeria 766.939 € 214.256 € 2.268.415 € 1.062.443 € 720.928 €
United Kingdom 51.826 € 77.352 € 1.113.416 € 1.398.172 € 716.469 €
Portugal 242.325 € 447.172 € 158.790 € 86.185 € 617.825 €
Colombia - € - € - € 623.345 € 569.848 €
British Virgin Islands - € - € 64.974 € 1.234.308 € 232.611 €
USA 324.528 € 392.357 € 1.126.104 € 1.113.577 € 206.446 €
Egypt - € - € 60.651 € 2.401.635 € 187.614 €
Sweden 714 € 2.278 € 574.300 € 246.737 € 147.262 €
Angola - € - € 808.967 € 845.781 € 121.535 €
Israel - € 969.225 € 1.327.729 € 59.402 € 109.774 €
Ireland - € 100.623 € 472.469 € 35.454 € 35.489 €
Paraguay 138.261 € 215.213 € 5.910.401 € 1.160.666 € 17.487 €
Hungary 1.765.296 € 970.411 € 2.292 € 2.531 € 7.282 €
The Netherlands - € - € 158.636 € 433.255 € 1.414 €
Costa Rica 305.725 € 864.574 € 178.537 € 52.268 € 1.150 €
Chile - € 364.488 € 593.956 € 470.489 € 1.055 €
Gabon - € - € 506.371 € 1.762.404 € - €
E-Escolinhas Project 18.009.540 € 38.239.844 € - € - € - €
Honduras - € - € - € 466.361 € - €
Other 369.394 € 1.217.851 € 1.115.038 € 1.323.904 € 3.431.309 €
TOTAL 222.300.514 € 369.787.795 € 356.322.618 € 427.067.896 € 331.454.934 €
Considering the above table, which represents a division of the revenue by business area, it becomes evident
the significant decrease recorded in the Venezuela project (it is worth noting that we continue to identify the
Venezuela project as such, even though this project was, in 2014, exclusively materialised through China, and
the amounts presented as income result from the sale of raw materials to the Chinese entity that started
supplying the country directly, as already mentioned).
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Thus, if only in relation to the Venezuela project there was a reduction in the revenue of about 146 million euros
(- 77 %), if we were to exclude this project, the revenue of JP-ik would have had a positive evolution of about 50
million euros (21 %) from 2013 to 2014. Performing the same exercise by removing the Venezuela project only
from the Education business area, we see a greater emphasis in the growth recorded in other geographies
(growth of 57 million euros: about 54 %).
Other aspects to consider:
The Distribution Business Area (without TSUNAMI) suffered a reduction of 3.1 % (-4 million euros in
2013 to 2014): this reduction ends up being positive for the Company in terms of business profitability,
since during 2014 the major supply contracts were renegotiated with the large national retail chains,
decreasing the discount levels granted: this renegotiation was very difficult and we were concerned
that its impact on sales could have been much higher. However, since this particular business was not
being profitable, this measure was required in order to find ways of providing the business with sufficient
means of support. We know that, however, since the greatest impact is going to be felt during 2015,
further revenue reductions are likely to take place, although further renegotiations may occur, always
with the ultimate goal of ensuring a minimum profitability that ensures the business structure. These
renegotiations can encompass the customers, as well as the actual manufacturers, making them see
the importance of increasing the distribution margin that, based on characteristics of the business and
the risks associated to it, has been clearly reduced.
Maintain a very significant level of exports, representing about 63 % of the Company’s total turnover
(69 % in 2013).
Implementing the first phase of the BOLIVIA project, for which a branch was created in 2014 (whose
accounts are integrated in those of JP-ik, contained in this report). It should be noted that this project
resulted from the signing alongside a Bolivian Public Company of a USD 57 million contract (to be
executed in 2014), as a result of the successful award in a public international tender launched by the
Government of Bolivia. This contract was of particular importance, for it resulted in new contractual
additions (in 2014, there was an award for a new additional order of 60,000 computer kits to be delivered
during 2015, and additional orders of 280 thousand computer kits for 2015 in the process of being
awarded); the project is thus likely to achieve the size and scale of the contracts implemented in
Venezuela until 2013. Moreover, Bolivia today presents itself as a country with a stability that promotes
business growth and the implementation of a major Education project by JP-ik, including components
that go beyond the simple sale of equipment (such as those of industrial consulting on the
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implementation of an assembly line, educational training for teachers, the implementation of school
infrastructure with our pop-up school, etc.,).
Expand the international market to an even greater number of countries (some of which already have
a significant expression) that allow us to optimistically envisage the continuity of international business.
Strengthen the network of international partners that, besides ensuring a recurring international sales
revenue, also guarantee our proximity to any major business opportunities that may arise almost
anywhere worldwide. In this way we continue to reinforce the international visibility of JP-ik, by
continuing to invest in new product development and solutions focused on the Educational market,
seeking to address the actual environment of high competitiveness and global turbulence and leverage
off the added value that our project represents to JP-ik and its stakeholders.
SALES in EUR 2011 2012 2013 2014
Domestic market .120.330.451 € 117.883.698 € 5 % 131.619.967 € 12 % . 124.155.726 € - 6 %
Foreign market 249.457.344 € 238.438.921 € 131 % 295.447.928 € 24 % 207.299.208 € - 30 %
TOTAL 369.787.795 € 356.322.618 € 66 % 427.067.896 € 20 % 331.454.934 € - 22 %
Summing up, although JP-ik has recorded a decrease in revenue in the domestic (mainly resulting from the
Distribution business) and international market (mainly resulting from Education business), this reduction was
accompanied not only by a set of internal measures aimed to provide the Company with flexibility to overcome
any periods of greater difficulty (with processes and procedures restructuring to increase efficiency and
effectiveness), but also through an expansion work of its core skills in terms of services that allows the
forecasting of the future in a more optimistic manner, less dependent on equipment sales, thereby increasing
the sustainability levels, with a clear focus on profitability rather than volume.
This means that the Company's policy for the coming years will be to continue strengthening the integrated
services component in projects implemented at an international level, with the ultimate goal of increasing the
profitability generated by the business. This policy of focusing on profitability will also be followed in the
Distribution market, even if this means a downward adjustment of the revenue (which we will seek to mitigate
with a product portfolio that is much richer, diversified and capable of producing higher added value, not only
for the Company but also if not mainly - for the customer). We will continue to guide our actions with the
objective of increasing the perceived level of our value proposition, seeking to attract new customers, but
above all to create lock-in mechanisms that increase the loyalty levels of customers and current partners, which
continue to be the most valuable assets of JP-ik.
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It is through the success of our customers and partners that we want to continue to maintain our success!
Note also that, after years of investigation associated with the case known as "VAT Carousel" (Case No 11/02.1
TELSB), the trial finally took place between 23rd September 2013 and 19th February 2014, and the outcome
thereof (in March 2014) confirmed the inevitable: acquittal requested by the public prosecution itself, an
unmistakable sign that the entire proceedings were unfounded. JP-ik suffered significant financial and image
losses in the defence process, mainly due to the bad publicity that it had received over the past few years. We
only wish to give a word of thanks to all those who believed in JP-ik and remained at our side. They have been
and will be an integral part of our success.
2. INVESTMENT
During 2014, total investment stood at 1.9 million euros, and the main investments were related to:
Completion of projects started in 2012 and 2013: improvement and rehabilitation of the Perafita
facilities and restructuring of the Company’s Information systems. In these two items the total
investment allocated for the 2014 financial year was of about 549 thousand euros and 384 thousand
euros, respectively.
An advance regarding the acquisition of a plot of land with 8,000 m2 located behind the headquarters
of JP-ik, which will be used for the purposes of building a car park for the employees and a separate area
for loading and unloading. Of the global price of 330,000 euros, 150,000 euros have already been paid
(the remaining 180,000 euros will be paid at the time of the deed).
Preparation of a preliminary study for transformation of the land in front of JP-ik into an industrial area
with the construction of warehouses, including a feasibility and investor prospecting study. Investment
of about 300 million euros, with a view to profiting from the land held by the Company (which was
acquired in previous years for the construction of the new facilities of JP-ik, a project since then
abandoned).
Acquisition of basic equipment, office and transport, in a total of 293 thousand euros.
In terms of intangible assets, in 2014 JP-ik completed the challenging project initiated in 2012 to improve
processes, spearheaded in two distinct areas: the design of a Supply Chain Management system capable of
meeting the requirements of an increasingly international market and the reengineering of computer systems
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and processes, with the adoption of a new ERP (even though the above projects were initiated in 2012, with
2013 being the year in which part thereof entered in production, some components were completed in 2014).
3. EXPENSES AND INCOME
Through the evolution of the activity of JP-ik, in particular with the strengthening of the services component in
the international projects implemented during 2014, it was possible to see an increase in the gross margin of
1.9 p.p. (from 6.8 % in 2013 to 8.7 % in 2014). This evolution turned out to be one of the defining factors for the
year. Apart from being an embodiment of the defined strategy it also allowed the accommodation of the
recorded decrease of 96 million euros in revenue. In fact, even with this substantial reduction, JP-ik released a
margin in 2014 of 29 million euros, up 24 thousand euros to that registered in 2013.
Also noteworthy was the financial performance obtained by YOUTSU (joint venture held 50 % by JP-ik), which
in 2014 amounted to 3.432 thousand euros (in 2013: 4.121 thousand euros), recorded in the income statement
under the caption ‘Gains / losses in subsidiaries, associates and joint ventures’, and in the balance sheet under
the caption ‘Financial Investments - equity method’. It should be noted that in 2014 YOUTSU only had in its
results 1.5 million euros relating to the service agreement signed with the Chinese Company, of a total
contracted amount of 36 million USD.
In terms of External Supplies and Services (which had an overall increase of about 1.8 million euros), we highlight
as major contributions:
- Subcontracts increase due to maintenance and support of equipment delivered under the Panama
and Peru projects (reaching a total of 1.2 million euros compared to 4 thousand euros in 2013);
-Increase on transport of goods of about 1 million euros, mainly due to the Bolivia project.
Regarding personnel expenses, the registered decrease (about 656,000 euros) resulted from the continuation
of our human resources optimisation strategy given the resources freed by the business and the need for
adjustment due to the planned reduction in turnover for 2014. Therefore, apart from some specific outputs,
adjustments were also made in terms of variable remuneration, as well as a reduction in the Directors’
remuneration.
It is worth highlighting the reversal of inventory impairments in the amount of 1 million euros, resulting from the
sale of material for a higher amount than that estimated to be possible in 2013.
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As a result of the above, and despite the very negative impact of the financial exchange rate differences (total
net unfavourable difference of about 6 million euros), EBITDA1 showed a favourable growth of 58 %, reaching
almost 30 million euros and representing 6.2 % of the turnover, as can be seen in the table below:
2012 2013 var. 2014 var.
Revenue 356.322.618 427.067.896 20 % 331.454.934 - 22 %
Gross Margin 24.222.191 28.976.637 20 % 29.000.780 0 %
EBITDA 1 18.173.853 12.589.766 - 31 % 19.907.826 58 %
EBT (Earnings Before Taxes) 14.655.510 9.055.159 - 38 % 9.832.664 9 %
Net Profit 10.317.819 6.736.001 - 35 % 7.268.349 8 %
Net Cash Flow 2 10.875.601 9.406.460 - 14 % 7.563.720 - 20 %
_____________________________________________
1 Given by Profit before depreciation, financial expenses and taxes less Provisions (increases/reductions). 2 Given by Net Profit less Amortisation and depreciation expenses, Provisions, Inventories impairment and Trade debtors impairment,
We continue to see that, against a backdrop of domestic and international financial and economic crises, the
economic performance of JP-ik and notwithstanding the reduction in turnover registered in 2014, continues
to be very favourable. The Company continues to pursue a successful path, guided by the demand of the
healthier markets and the offer of differentiating and aggregated solutions that bring added value to the final
customer, which enables it to continue to be distinguished in the domestic and international scene and
deserving of the confidence of all its stakeholders.
4. RISKS AND UNCERTAINTIES
The Company’s activity is exposed to a variety of financial risks: market risk (including interest rate and
exchange rate risk), credit risk, liquidity risk, and capital risk.
In this context, it implemented an integrated risk management program, which sought to minimise the potential
adverse effects of these risks on the financial performance of the Company, through specific coverage policies.
Given that exchange risk can produce the most potentially adverse effects, through the Company’s
international presence, JP-ik opted for a natural hedging of this risk, by using USD throughout the entire
international business – purchases, sales, debt and all other related transactions are denominated in USD. In
this way, although in accounting terms significant exchange rate variations may occur, since the actual currency
flows are all performed in USD, no actual losses or gains occur, assuming the continuity of operations.
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Another risk to which JP-ik is particularly attentive is credit risk. In this regard, in the domestic market the
Company has contracted a credit insurance policy, and on international sales, in addition to this instrument, JP-
ik also insures itself through letters of credit or similar mechanisms.
5. RELEVANT FACTS OCCURRED AFTER YEAR END
JP-IUSA, a joint venture formed in early 2015 by JP Sá Couto, SGPS S.A. and the Mexican group IUSA took part
in April 2015, in a public tender for the distribution of 960 thousand tablets to the Secretary of Public Education
of Mexico (a deal that exceeds 100 million USD). The devices are intended for fifth grade public school students
in 15 Mexican states.
The Secretary for Public Education of Mexico (SEP) announced JP-IUSA as the winning entity of the public
tender for the delivery of the one thousand educational tablets to students in the fifth grade during the following
school year of 2015-2016.
We believe this will be the first of several large-scale projects that we may implement in Mexico. The choice of
JP-IUSA reflects the quality of the solutions we have developed for Education, but also the strength of our
strategic partnerships.
With a presence in Mexico since 2010 and 120 thousand educational devices delivered to date, the partnership
with the IUSA Group and this new public project reinforces the growth of JP-ik in the country.
There are no facts or events that occurred after year’s end that require adjustments and/or disclosure in the
Company’s Financial Statements.
6. OUTLOOK
Seeking to ensure the sustainability and future growth of JP-ik, in 2015 we will continue to consider as priorities
the following actions defined in 2014:
Education Segment:
- Continue the development of new educational products, considering the touchscreen technology;
new versions of products already developed in 2014 (Tablets and Detachables) will be created, to
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deal with the latest technological developments. In 2014 we have already started the marketing of
some of these devices.
- Reinforce and consolidate the services area in the field of Education, namely in the field of
classroom infrastructure and pedagogical training.
- Increase the number of projects and sales in several countries. The main projects foreseen for
2015 will be those of Bolivia and Mexico, although the latter will not be executed directly by JP-ik, but
through the Mexican subsidiary of the JP Group. There are also good prospects for South Africa in
addition to the traditional markets of South America.
- Increase the focus on the first global brand of educational equipment for private use created in
2014 by JP-ik ("Mymaga"). After the first pilot projects carried out in Germany, France and the United
Kingdom still in 2014, for 2015 the prospects are to broaden the project to other European
countries.
Distribution Segment:
- The year of 2015 will primarily be one of process optimisation and profitability increase, as opposed
to sales increase.
- Extend the portfolio of official Distribution of main market brands, seeking to create a product mix
that will enable an increase of the margin and at the same time strengthen the position of one of the
largest and best national distributors.
- Offer traditional Distribution customers a set of complementary services and solutions to
business, enabling actions of cross-selling with other Group companies and allowing the
improvement of the value proposition that JP-ik has to offer the market.
7. DEBTS TO TAX ADMINISTRATION AND SOCIAL SECURITY
In compliance with all due legal dispositions, we hereby state that as at 31st December 2014 there were no
overdue debts to the State or to the Social Security and that the Company punctually pays all taxes and
contributions to which it is bound.
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8. HUMAN RESOURCES AND SOCIAL SERVICES
The average number of workers in JP-ik during 2014 was 243 employees (2013: 254).
The Company employs a young team of highly qualified staff who stand out for their great flexibility, ability to
operate in an efficient and coordinated fashion, and strict customer orientation.
Within the sphere of the training policy, in 2014 we continued with the development of specific occupational
valuation programs, reinforcing the technical, personal and social development component of some positions,
as well as the aptitude for the use of new technologies as a way of increasing productivity and the quality of the
products and services offered by our Company.
9. OTHER INFORMATION
Own shares [art. 66, no. 5 – d) of the Portuguese Commercial Company Law]
The Company has not acquired or alienated its own shares during the 2014 financial year, nor does it own any
such shares as at 31st December 2014.
10. FINAL REFERENCES
The Board of Directors wishes to thank all those that collaborated with the Company in 2014, namely the
following:
- The Official Entities and Financial Institutions with whom we work, for their provided support and the
confidence shown;
- Our clients and suppliers, for their preference, with our best wishes that they may maintain a long-
lasting relationship with our Company;
- The Statutory Auditor, External Auditors and to all the consultants who have assisted us, for their
assistance and expertise;
- All our staff, for their dedication, competence, and understanding.
- To all the shareholders, especially to J. P. Sá Couto SGPS S.A. for the support in achieving the goals
and for continuing to believe in the project.
12 J.P. Sá Couto, SA – Financial Statements
11. PROPOSED APPROPRIATION OF PROFITS
As for the positive Net Profit of 7.268.349,11 euros, we propose the following application:
Free Reserves 6.768.349,11 €
Distribution of Dividends 500.000,00 €
Furthermore, we propose the attribution to the Company’s employees as a participation in its net profit, of the
amount of 500.000,00 euros. This amount was recognised as an expense in 2014’s financial statements.
Perafita, Matosinhos, 15th May 2015
The Board of Directors,
JORGE MANUEL F. M. SÁ COUTO JOÃO PAULO F. M. SÁ COUTO
(CHAIRMAN) (VICE-CHAIRMAN)
13 J.P. Sá Couto, SA – Financial Statements
ANNEXES REFERRING
PORTUGUESE COMMERCIAL COMPANY LAW
ARTICLE 447 OF THE PORTUGUESE COMMERCIAL COMPANY LAW
Shares held by members of the Governing Bodies and respective transactions:
BOARD OF DIRECTORS
OPENING
BALANCE
01/01/14
ACQUISITIONS DISPOSALS
CLOSING
BALANCE
31/12/14
QTY. DATE QTY. AVERAGE
VALUE DATE QTY.
AVERAGE
VALUE QTY.
Jorge Manuel F. M. Sá Couto 6.000 - - - - 6.000
João Paulo F. M. Sá Couto 12.100 - - - - 12.100
ARTICLE 448 OF THE PORTUGUESE COMMERCIAL COMPANY LAW
Annex referred to in article 448 of the Portuguese Commercial Company Law
SHAREHOLDERS OF JP-ik No. SHARES HELD ON 31/12/2014
J.P. SÁ COUTO SGPS, S.A. 2.475.000
SHAREHOLDERS OF J.P. SÁ COUTO, SGPS, S.A. No. SHARES HELD ON 31/12/2014
Jorge Manuel F. M. Sá Couto 4.999.775
João Paulo F. M. Sá Couto 4.999.775
The Board of Directors,
JORGE MANUEL F. M. SÁ COUTO
(CHAIRMAN)
JOÃO PAULO F. M. SÁ COUTO
(VICE CHAIRMAN)
14 J.P. Sá Couto, SA – Financial Statements
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JP SÁ COUTO, SA
BALANCE SHEET AS AT 31 DECEMBER 2014 AND 2013 (Amounts in EUR)
ASSETS Notes 31.12.2014 31.12.2013
Non-current assets:
Tangible assets 5. 7.086.374 6.260.122
Intangible assets 6. 1.129.323 1.068.972
Financial investments - equity method 7. 3.432.288 4.121.255
Financial investments - other methods 7. 35.251 34.625
Deferred tax assets 8. 285.577 407.714
Other debtors 13. 443.100 272.751
Total non-current assets 12.411.913 12.165.441
Current assets:
Inventories 9. 65.376.591 32.277.537
Trade debtors 10. 76.112.963 98.543.083
Advances to suppliers 11. 1.083.777 1.248.090
State and other public entities 12. 1.655.819 1.385.626
Other debtors 13. 7.750.561 7.343.308
Deferred expenses 14. 250.063 245.049
Other financial assets 15. 250.000 250.000
Cash and cash equivalents 4. 9.340.065 13.393.112
Total current assets 161.819.840 154.685.806
TOTAL ASSETS 174.231.753 166.851.247
EQUITY AND LIABILITIES 31.12.2014 31.12.2013
EQUITY:
Share capital 16. 2.500.000 2.500.000
Legal reserves 17. 500.000 500.000
Other reserves 18. 25.091.033 22.426.901
Net profit 7.268.349 6.736.001
Total Equity 35.359.382 32.162.902
LIABILITIES
Non-current liabilities:
Provisions 19. 977.201 1.352.433
Borrowings 20. 2.400.336 3.704.243
Total non-current liabilities 3.377.536 5.056.676
Current liabilities:
Trade creditors 21. 67.852.680 67.012.493
Advance payments from clients 22. 289.781 251.306
State and other public entities 12. 3.650.325 4.307.347
Borrowings 20. 57.239.652 34.763.977
Other current creditors 23. 6.462.397 23.201.903
Other financial liabilities 24. - 94.644
Total current liabilities 135.494.835 129.631.670
TOTAL LIABILITIES 138.872.371 134.688.346
TOTAL EQUITY AND LIABILITIES 174.231.753 166.851.247
THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
The Chartered Accountant, The Board of Directors,
Pedro Lopes Jorge Sá Couto
T.O.C. No. 68609 João Paulo Sá Couto
16 J.P. Sá Couto, SA – Financial Statements
JP SÁ COUTO, SA
INCOME STATEMENT BY NATURE
FOR THE PERIODS ENDED 31 DECEMBER 2014 AND 2013
(AMOUNTS IN EUR)
Notes 31.12.2014 31.12.2013
Sales and services rendered 25.;36, 331.454.934 427.067.896
Gains/losses in subsidiaries, associates and join ventures 7. 3.432.288 4.121.255
Increase / (decrease) in production 26. 5.174.332 6.570.352
Cost of goods sold and materials consumed 27. (307.628.486) (404.661.610)
External supplies and services 28. (10.173.634) (8.339.883)
Personnel expenses 29. (7.086.429) (7.742.925)
Inventory impairments (losses /reversals) 9. 1.052.347 (1.177.212)
Receivables impairments (losses /reversals) 10.; 13. (701.044) (409,573)
Provisions (increases / decreases) 19. 375.232 (291.833)
Other operating income 30.; 24. 10.599.874 7,041.580
Other operating expenses 31. (6.216.355) (9.880.114)
Earnings before depreciation, interest and taxes 20.283.058 12.297.933
Amortisation and depreciation (losses / reversals) 32. (1.021.905) (791.841)
Operating income (before financing costs and taxes) 19.261.153 11.506.092
Interest and similar income 33. 2.203.791 8.722.030
Interest and similar expenses 33. (11.632.280) (11.172.962)
Earnings before taxes 9.832.664 9.055.159
Income taxes 34. (2.442.177) (2.314.741)
Deferred taxes 34. (122.137) (4.417)
Profit for the year 7.268.349 6.736.001
Basic earnings per share 35. 2.91 2.69
THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
The Chartered Accountant, The Board of Directors,
Pedro Lopes Jorge Sá Couto
T.O.C. No. 68609 João Paulo Sá Couto
17 J.P. Sá Couto, SA – Financial Statements
JP SÁ COUTO, S. A.
CASH FLOW STATEMENT
FOR THE PERIODS ENDED 31 DECEMBER 2014 AND 2013
(Amounts EUR)
Notes 31.12.2014 31.12.2013
Operating Activities
Receipts from trade debtors 420.500.634 415.492.736
Payments to trade creditors (375.524.521) (380.465.605)
Payments to personnel (6.762.903) (7.493.251)
Net cash flow from operations 38.213.210 27.533.879
Payment/receipt of income taxes (448.246) (2.936.976)
Other receipts/payments 5.362.745 (6.817.459)
4.914.499 (9.754.435)
Cash Flow from Operating Activities (1) 43.127.708 17.779.444
Investment Activities
Payments regarding:
Tangible fixed assets (1.364.050) (1.883.067)
Intangible assets (273.494) (447.380)
Financial investments - (2.115)
(1.637.544) (2.332.561)
Receipts from:
Tangible fixed assets 40.996 -
Interest and similar income 229.016 222.820
Dividends 4.121.693 5,597.051
4.391.705 5.819.872
Cash Flow from Investment Activities (2) 2.754.161 3.487.310
Financing Activities
Receipts from:
Borrowings 334.182.860 252.924.320
334.182.860 252.924.320
Payments regarding:
Borrowings (368.270.547) (255.381.877)
Interest and similar expenses (6.305.269) (5.501.688)
Dividends (4.100.000) (5.006.300)
Other financing operations (4.720.072) -
(383.395.887) (265.889.865)
Cash Flows from Financing Activities (3) (49.213.027) (12.965.545)
Net decrease/increase in cash and cash equivalents (1+2+3) 4. (3.331.158) 8.301.209
Foreign exchange rate effect (721.889) -
Cash and cash equivalents at the beginning of the year 4. 13.393.112 5.091.903
Cash and cash equivalents at end of the year 4. 9.340.065 13.393.112
THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
The Chartered Accountant, The Board of Directors,
Pedro Lopes Jorge Sá Couto
T.O.C. No. 68609 João Paulo Sá Couto
18 J.P. Sá Couto, SA – Financial Statements
JP SÁ COUTO, SA
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED DECEMBER 31, 2014 (Amounts in EUR)
Notes Share capital Legal reserves Other reserves Net Profit Total Equity
BALANCE AS AT 1ST JANUARY 2014 (1) 2.500.000 500.000 22.426.901 6.736.001 32.162.902
Changes in the period - - 6.736.001 (6.736.001) -
Appropriation of profits
Other changes in equity - - 28.131 - 28.131
(2) 2.500.000 500.000 29.191.033 - 32.191.033
Net profit for the period (3) 7.268.349 7.268.349
Comprehensive income (4=2+3) 7.268.349 7.268.349
Operations with shareholders
Dividends Distribution 18. - - (4.100.000) - (4.100.000)
(5) - - (4.100.000) 7.268.349 (4.100.000)
BALANCE AS AT 31ST DECEMBER 2014 (1+2+3+5) 2.500.000 500.000 25.091.033 7.268.349 35.359.382
The Chartered Accountant,
The Board of Directors,
Pedro Lopes Jorge Sá Couto
T.O.C. No. 68609 João Paulo Sá Couto
19 J.P. Sá Couto, SA – Financial Statements
JP SÁ COUTO, SA
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2013 (Amounts shown in EUR)
The Chartered Accountant,
The Board of Directors,
Pedro Lopes Jorge Sá Couto
T.O.C. No. 68609 João Paulo Sá Couto
Notes Share capital Legal reserves Other reserves Net income for the period Total Equity
BALANCE AS AT 1ST JANUARY 2013 (1) 2.500.000 500.000 17.109.082 10.317.819 30.426.901
Changes in the period
Appropriation of profits - - 10.317.819 (10.317.819) -
(2) 2.500.000 500.000 27.426.901 - 30.426.901
Net profit for the period (3) 6.736.001 6.736.001
Comprehensive income (4=2+3) 6.736.001 6.736.001
Operations with shareholders
Dividends Distribution 18 - - (5.000.000) - (5.000.000)
(5) - - (5.000.000) 6.736.001 (5.000.000)
BALANCE AS AT 31ST DECEMBER 2013 (1+2+3+5) 2.500.000 500.000 22.426.901 6.736.001 32.162.902
The Board of Directors,
20 J.P. Sá Couto, SA – Financial Statements
21 J.P. Sá Couto, SA – Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31ST DECEMBER 2014 AND 2013
1. INTRODUCTION
J.P. Sá Couto, SA (hereinafter, JP-ik) has its headquarters at Rua da Guarda, 675, Perafita, Matosinhos. The
Company was incorporated by public deed on 3rd March 1989 as a private limited Company, and was converted
into public limited liability Company in 2004. 99 % of the Company is owned by J. P. Sá Couto, SGPS, S.A.,
headquartered in the same building.
The Company’s main activity is the manufacturing of computers and the distribution of informatics
components, which accounts for 100 % of the revenue.
On 14th April 2014, JP Sá Couto, SA – Bolivia Branch, a Company with its headquarters in La Paz, Bolivia, was
incorporated.
It is the opinion of the Board of Directors that these Financial Statements reflect truthfully and accurately the
operations of JP-ik, as well as its position and financial performance and associated cash flows.
2. ACCOUNTING STANDARDS IN THE PREPARATION OF THE FINANCIAL
STATEMENTS
A) BASIS OF PREPARATION
In 2014 the financial statements of JP-ik were prepared according to the Portuguese Local GAAP - Accounting
Normalisation System (SNC), which comprises the Accounting and Financial Reporting Standards (NCRF),
adapted by the Commission of Accounting Standards (CNC) from the International Financial Reporting
Standards (IFRS -formerly known as International Accounting Standards) issued by the International
Accounting Standards Board (IASB) and adopted by the European Union (EU).
The preparation of financial statements in compliance with the NCRF requires the use of estimates,
assumptions and critical judgments in the process of determining the accounting policies to be adopted by JP-
ik, with significant impact in the carrying amount of assets and liabilities, as well as the income and expenses for
the reporting period.
22 J.P. Sá Couto, SA – Financial Statements
Although these estimates are based on the best experience of the Board of Directors and on their best
expectations in relation to current and future events and actions, the current and future results may differ from
these estimates.
B) GOING CONCERN ASSUMPTION
These financial statements have been prepared under the assumption that the Company will continue its
activities for the foreseeable future, and they are based on the accounting books and records of the Company
which are kept in accordance with the accounting normalisation system standards.
C) ACCRUAL BASIS
The Company records its income and expenses in the period to which they relate, whereby revenue and profit
are recognised as they are generated, regardless of when they are received or paid. The amounts received and
paid and the corresponding revenues and costs are recorded under the caption ‘Other debtors / creditors’ and
‘Deferrals’ (Note 13, 14 and 23).
D) CLASSIFICATION OF NON-CURRENT ASSETS AND LIABILITIES
Assets and liabilities due in more than one year from the balance sheet date are classified as non-current assets
and liabilities, respectively. Additionally, due to their nature, the assets and liabilities arising on deferred tax and
the provisions are classified as non-current assets and liabilities.
E) CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities, where the outflow of funds affecting the future economic benefits is deemed only
possible, are not recognised in the financial statements, and are disclosed in the notes to the Financial
Statements, unless the probability of a outflow of funds affecting future economic benefits is remote, in which
case they are not subject to disclosure.
Contingent assets are not recorded in the financial statements, but are disclosed in the notes to the Financial
Statements when future economic benefits are probable.
F) FINANCIAL LIABILITIES
Financial liabilities are classified in accordance with the contractual substance regardless of the legal form they
assume.
23 J.P. Sá Couto, SA – Financial Statements
G) SUBSEQUENT EVENTS
Events occurring after the balance sheet date that provide additional information about conditions that existed
at that time are reflected in the financial statements.
Events occurring after the balance sheet date that provide information on the conditions that occurred after
the balance sheet date, if material, are disclosed in the notes to the financial statements.
H) DEROGATION OF SNC STANDARDS
During the period to which these financial statements refer, there were no exceptional cases requiring the
derogation of any provision under the SNC.
I) VALUE JUDGEMENTS
The fair value of financial instruments traded in the active markets is determined based on listed market prices
at the balance sheet date.
The nominal value of trade and other receivables, adjusted by any impairment losses, and the nominal value of
any trade and other payables is estimated to be close to their fair value.
J) MAIN ASSUMPTIONS CONCERNING THE FUTURE
Estimates and judgments are continually evaluated and based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
In the determination of its accounting records and evaluation of its assets and revenues, the Company makes
use of estimates and assumptions relating to events whose effects will only be fully known in future financial
years. To a large extent it has been established that the values recorded were confirmed in the future. All
variations that may arise will be recorded in the periods in which their final effects are determined.
The value of financial investments subject to impairment tests conducted at the end of the year, is affected by
the implementation of the assumptions used in these same tests.
K) RISK MANAGEMENT
The Company’s activity is exposed to a variety of financial risks: market risk (including interest rate and
exchange rate risk), credit risk, liquidity risk, and capital risk.
The Company has a risk management program, which focuses its analysis on the financial market seeking to
minimise the potential adverse effects of these risks on the financial performance of the Company.
24 J.P. Sá Couto, SA – Financial Statements
Risk management is conducted by the Financial Department, based on policies approved by the Board of
Directors. The Board of Directors provides principles for risk management as a whole and policies covering
specific areas, such as exchange risk, interest rate risk, credit risk and that of investing surplus liquidity.
MARKET RISK / INTEREST RATE RISK / EXCHANGE RATE RISK
The Board of Directors of JP-ik has considered in recent years using instruments of risk coverage in respect of
the variation in interest rate, and has contracted swaps for this purpose, as described in the Note 24. All interest
bearing debt generates interests at a variable rate. Loans issued with variable rates expose the Company to
cash flow risk associated with the interest rate.
In its operational activities, JP-ik uses the US dollar (USD) for large volume purchases and sales. The hedging
made is natural (through loans and overnight deposits in USD) sporadically using foreign exchange swaps. On
31st December 2014 and 2013, there was no open position in such instruments.
CREDIT RISK
Credit risk results essentially from customer balances receivable. Credit risk is assessed by the Company's
Financial Management, taking into account the history of commercial relations, its financial position, as well as
other information that can be obtained through the business network of JP-ik. The credit limits set are regularly
analysed and revised, if necessary. All credits are insured through a credit insurance institution, COSEC in 2014
and CREDIT y Caución SA - PORTUGAL BRANCH in 2015. Credit risk is not considered to be significant.
LIQUIDITY RISK
The hedging of liquidity risk, defined as the ability to meet the commitments assumed, is achieved, essentially,
through the availability at a central level of a set of immediately available credit facilities. These facilities provide
JP-ik with the ability to liquidate positions within a very short period, giving it the necessary flexibility to conduct
its activity.
Liquidity risk management implies maintaining sufficient value in cash and bank deposits, the viability of floating
debt consolidation through an adequate amount of credit facilities and the capacity to liquidate market
positions. The management of treasury requirements is done based on annual planning, which is revised
quarterly and adjusted daily. Related with the dynamics of the underlying business, the Treasury of the
Company intends to maintain the flexibility of the floating debt, by maintaining the credit facilities available.
25 J.P. Sá Couto, SA – Financial Statements
CAPITAL RISK
The primary aim of the Board of Directors is to ensure the continuity of operations, while providing adequate
remuneration for the shareholders and the corresponding benefits to other stakeholders of the Company. To
achieve this goal it is essential that there is a careful management of the capital employed in the business,
seeking to ensure an optimal structure thereof, thereby achieving the necessary reduction in its cost. In order
to maintain or adjust the capital structure considered appropriate, the Board may propose to the General
Shareholders Meeting the measures deemed necessary.
JP-ik seeks to maintain a level of equity appropriate to the characteristics of the main business and to ensure
continuity and expansion. The balance of capital structure is monitored based on the gearing ratio (defined as:
net interest bearing debt / (net interest bearing debt + equity)).
31.12.2014 31.12.2013
GEARING RATIO 0,59 0,44
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of the financial statements are described below.
These policies have been consistently applied to all periods presented, unless otherwise indicated.
3.1. INVESTMENTS
IN ASSOCIATES AND JOINT VENTURES
Associates are all entities in which JP-ik has significant influence but not management control. In legal terms
this influence normally occurs in companies where the shareholding is between 20 % and 50 % of the voting
rights. Investments in associated companies are accounted using the equity method.
The Company’s share of post-acquisition profit or loss is recognised in the income statement and its share of
the post-acquisition movements in other comprehensive income is recognised in other comprehensive
income with a corresponding adjustment to the carrying amount of the investment. When the Company's
share in the losses of the Associate equals or exceeds its interest, the Company does not recognise the further
losses, unless it has incurred in obligations or made payments on behalf of the associate.
26 J.P. Sá Couto, SA – Financial Statements
In the event that any severe long-term restrictions occur that significantly impair the capacity to transfer funds
to the holding Company or in the case that the investments are acquired and held solely for the purpose of sale
in the near future, the cost method is applied.
Youtsu, ACE is considered an incorporated joint venture, constituted in 2007, and held in equal shares by JP-ik
and “Prológica – Sistemas Informáticos, S.A.”. The amount corresponding to the share of the profits allocated
to JP-ik, is recorded under the caption ‘Financial Investments - equity method’, and joint ventures are valued
using the equity method.
OTHER INVESTMENTS
“Other investments” include all investments where the Company owns less than 20 % of the voting rights.
These investments are measured at fair value, and the subsequent changes in fair value are recorded as gains
or losses income. If the fair value cannot be measured accurately the participation will be measured at cost,
which in this case it will be subject to impairment tests. Any impairment losses that may be recorded are not
reversible.
3.2. FUNCTIONAL AND PRESENTATION CURRENCY
The financial statements of JP-ik are presented in euros. Euro is the company’s functional and presentation
currency.
Transactions in foreign currency are converted to the functional currency using the prevailing exchange rates
on the transaction dates.
The exchange rate gains and losses resulting from the payments/receipts of the transactions as well as the
exchange rate conversion on the balance sheet date of the monetary assets and liabilities denominated in
foreign currency, are recognised in the income statement under the caption ‘Interest and similar income’ /
‘Interest and similar expenses’, if related to borrowings, or under ‘Other operating income / Other operating
expenses’, for all other balances/transactions.
3.3. TANGIBLE ASSETS
Tangible assets are recorded at acquisition cost net of depreciation and accumulated impairment losses.
27 J.P. Sá Couto, SA – Financial Statements
Depreciation is calculated once the assets are in use, using the straight-line method in accordance with the
useful life for each group of assets.
The depreciation rates used correspond to the following estimated useful lives:
ASSET CLASS YEARS OF USEFUL LIFE
Buildings and other Structures 5 to 20
Basic Equipment 4 to 8
Transportation Equipment 4 to 8
Tools and Utensils 3 to 7
Office Equipment 2 to 10
Other tangible fixed assets 1 to 4
Maintenance and repair expenses that do not increase the useful life of these assets are considered as expense
in the period in which they occur.
Tangible assets in progress represent assets still under construction and are recorded at cost of acquisition
less any impairment losses.
These assets are depreciated from the moment when the underlying assets have been completed or are in a
state of use.
Gains or losses resulting from the sale or disposal of tangible assets are determined by the difference between
the selling price and the net book value on the date of sale/disposal, and are recorded in the income statement
in ‘Other operating income’ or ‘Other operating expenses’ , depending on whether these are gains or losses.
3.4. INTANGIBLE ASSETS
Intangible assets are recorded at acquisition cost, net of depreciation and accumulated impairment losses.
These assets are only recognised if it is deemed probable that there will be future economic benefits from these
for the Company, if they are controlled by the Company and their value can reasonably be measured.
Development expenses are capitalised when the Company demonstrates its ability to complete its
development and starts trading or using it, and for which it is probable that the asset created will generate future
28 J.P. Sá Couto, SA – Financial Statements
economic benefits. The development expenses that do not meet these criteria are recorded as expenses in
the financial year in which they incurred.
Internal costs associated with maintaining and developing software are recorded as expenses in the income
statement when incurred, except in those situations where these expenses are directly related to projects
which will probably generate economic benefits for the Company. In these situations these costs are capitalised
as intangible assets.
Depreciation is calculated, after the goods are in use, using the straight-line method, in accordance with the
period of estimated useful life, which is generally 3 years.
The depreciation rates used correspond to the following estimated useful lives:
ASSET CLASS YEARS OF USEFUL LIFE
Software 3
Industrial property and other rights 3
Where these assets are related to brands and patents without a defined useful life, no depreciation is calculated,
and their value is subject to impairment testing on an annual basis.
3.5. ASSET IMPAIRMENT
Whenever the determined recoverable amount is less than the book value of assets, JP-ik assesses whether
the loss situation is of a permanent and final nature, and if so it records the corresponding impairment loss. In
cases where the loss is not considered permanent and final, a disclosure is made of the reasons supporting that
conclusion.
The recoverable amount is the fair value of the asset less sales costs or its value in use, whichever is higher. For
the determination of impairment, assets are allocated at the lowest level for which there are separately
identifiable cash flows (cash-generating units).
Non-financial assets for which there have been recognised impairment losses are evaluated on each reporting
date, on the possible reversal of impairment losses. When it is not necessary to record or reverse impairment,
29 J.P. Sá Couto, SA – Financial Statements
amortisation and depreciation of the assets are recalculated prospectively in accordance with the recoverable
amount.
3.6. FINANCIAL ASSETS
The Board of Directors determines the classification of its financial assets, on the date of initial recognition in
accordance with NCRF 27 - Financial instruments.
Financial assets can be measured:
(a) At cost or amortised cost less any impairment loss; or
(b) At fair value with changes in fair value recognised in the income statement.
The Company classifies and measures at cost or amortised cost, the financial assets: i) that in terms of time are
on sight or have a defined maturity; ii) with fixed return, fixed interest rate or variable interest rate corresponding
to a market index; iii) that have no contractual clause that may result in the loss of the nominal value and
accumulated interest.
For assets carried at amortised cost, the interest received to be recognised in each period is determined
according to the effective interest rate method, which corresponds to the rate that exactly discounts
estimated future cash receipts over the expected life of the financial instrument.
The financial assets that constitute granted loans, receivables (such as trade debtors, other debtors, etc.) and
equity instruments, as well as any associated derivative contracts which are not traded on an active market or
whose fair value cannot be determined accurately, are recorded at cost or amortised cost.
The Company classifies and measures at fair value the financial assets that do not comply with the conditions
to be measured at cost or amortised cost, as described above. Financial assets which constitute equity
instruments quoted on the active market, derivative contracts and financial assets held for sale are measured
at fair value. Fair value variations are recorded in the income statement under the captions ‘Other operating
income / expenses’, except those related to derivative financial instruments that qualify as cash flow hedging.
30 J.P. Sá Couto, SA – Financial Statements
On each financial reporting date, the Company evaluates the existence of value loss indicators for the financial
assets that are not measured at fair value through profit and loss. Should there any objective evidence of
impairment exist, JP-ik recognizes an impairment loss in the income statement.
The financial assets are derecognised when the rights to the cash flows generated by these investments expire
or are transferred, as well as all risks and benefits associated with their possession.
Loans granted and receivables
Loans granted and other receivables are non-derivative financial assets with fixed or determinable payments
that are not listed in an active market. These assets are created when the Company provides money, goods or
services directly to a debtor. These are included under current assets, except when their maturities exceed 12
months over the balance sheet date, in which case they will be classified as non-current.
3.7. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are initially recorded at fair value on the transaction date, and subsequently
valued at market value - "mark-to-market". The Company holds exclusively negotiation derivative financial
instruments, whose gains or losses in fair value are recorded in the income statement.
3.8. INCOME TAX
JP-ik is subject to Corporate Income Tax (IRC) at a rate of 23 % on an assessment basis. To the IRC collection
amount assessed, Municipal surcharge is added, levied on the recorded taxable profit of 1.5 %, as well as State
surcharge rate of 3 % on the profit of more than 1.5 million euros up to 7.5 million euros and 5 % on the profit in
excess of 7.5 million euros, and also the specific taxation on charges at the rates provided in the article 88 of
the Corporate Income Tax Code. In the calculation of income taxes, to which is applied the mentioned tax rate,
the amounts that are not accepted for tax purposes are added and deducted from the accounting result. This
difference, between accounting and taxable income, can be of temporary or permanent nature.
In accordance with the current legislation, tax declarations are subject to review and correction by the tax
authorities during a period of four years (10 years for Social Security, until 2000, and five years from 2001
onwards), except where tax losses have been reported, or there are ongoing inspections, complaints or
31 J.P. Sá Couto, SA – Financial Statements
appeals, cases in which, depending on the circumstances, the deadlines are extended or suspended. Therefore,
tax returns for the years 2011 to 2014 are still subject to review.
JP-ik records deferred taxes, corresponding to temporary differences between the carrying amount of assets
and liabilities and the corresponding tax basis, as defined by NCRF25 - Deferred taxes. In 2014, the rate used
for the calculation of deferred tax was the effective tax rate.
3.9. INVENTORIES
Consumer goods and raw materials are stated at acquisition cost or net realisable value, if lower than the
weighted average cost through the costing method of outputs. The inventories are reduced to their net
realisable value in cases where the value of these goods is less than the lowest of the average acquisition or
realisable costs.
The intermediate and finished products, the sub-products and work in progress are stated at the lower of
production cost (including the cost of the raw materials incorporated, labour and manufacturing overheads) or
net realisable value. In cases where the net realisable value is lower than the cost, impairment losses are
recognised. The allocation of fixed production overheads is based on the standard capacity of the facilities.
The reversal of prior period adjustments is recorded when there are indications that the adjustments are no
longer justified or have decreased, and are stated in the income statement under the caption ‘Inventory
impairments (losses/reversals)’. However, this reversal is limited to the amount of the accumulated amount of
impairment losses recognised.
The expenses relating to inventories sold are recorded in the same reporting period in which the revenue is
recognised.
The Company uses the permanent inventory system, in accordance with the provisions of article 12(1) of
Decree 158/2009 of 13th July.
32 J.P. Sá Couto, SA – Financial Statements
3.10. TRADE DEBTORS AND OTHER RECEIVABLES
The amounts under ‘Trade debtors’ and ‘Other receivables’ are not subject to interest and are stated at their
nominal value reduced by any impairment losses, recognised under ‘Receivables impairments (losses /
reversals)’, so that they reflect their net realisable value.
3.11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, bank deposits, and other short term investments of high
liquidity with maturities of up to three months. Bank overdrafts are stated as a current liability under the caption
‘Borrowings’.
3.12. FINANCIAL LIABILITIES
The Board of Directors determines the classification of its financial liabilities on the date of initial recognition in
accordance with NCRF 27 - Financial instruments.
The financial liabilities may be classified/measured as:
(a) At cost or amortised cost; or
(b) At fair value, with changes in fair value recognised in the income statement
JP-ik classifies and measures the cost or amortised cost, financial liabilities: i) that are on sight or have a defined
maturity; ii) with fixed return, fixed interest rate or variable interest rate corresponding to a market index; and iii)
that have no contractual clause which may result in a change to the responsibility for the payment of the
nominal value and accumulated interest.
For liabilities carried at amortised cost, the interest expense to be recognised in each period is determined
according to the effective interest rate method, which corresponds to the rate that exactly discounts the
estimated future cash payments, over the expected life of the financial instrument.
33 J.P. Sá Couto, SA – Financial Statements
Financial liabilities that constitute obtained loans, payables (such as suppliers, other creditors, etc.) and equity
instruments, as well as any associated derivative contracts which are not traded on active markets or whose
fair value cannot be determined accurately, are recorded at cost or at amortised cost.
Financial liabilities (or parts of financial liabilities) are derecognised only when they are extinguished, i.e. when
the obligation established in the contract is settled, cancelled or expires.
3.13. SHARE CAPITAL
Ordinary shares are classified as equity when paid-up.
3.14. PROVISIONS
The Company periodically analyses any obligations that may arise from past events and that should be the
object of recognition or disclosure. The subjectivity inherent to the determination of the probability and the
amount of internal resources necessary to liquidate the obligations may lead to significant adjustments, due to
either the variance in the assumptions used, or to the future recognition of provisions formerly disclosed as
contingent liabilities.
3.15. TRADE CREDITORS AND OTHER PAYABLES
Trade creditors and other payables do not bear interest, and are recorded at their nominal value, which is
considered equivalent to their fair value.
3.16. BORROWINGS
Loans are recorded as liabilities at their nominal value net of commissions related to their issuance. The financial
charges ascertained according to the effective interest rate are recorded in the income statement on an
accrual basis.
34 J.P. Sá Couto, SA – Financial Statements
Loans are classified as current liabilities, unless the Company has the unconditional right to defer the
settlement of the liabilities for more than 12 months after the reporting date.
3.17. LEASES
Leasing contracts are classified as financial leases if through them all the risks and rewards inherent to the
ownership of the assets under lease are substantially transferred and as operating leases if through them all the
risks and rewards inherent to ownership of the assets under lease are not substantially transferred.
The classification of leases, as financial or operational, is done based on economic substance and not on the
form of the contract.
Tangible assets acquired under financial lease contracts as well as the corresponding liabilities are accounted
for using the financial method, recognising the tangible fixed asset, corresponding accumulated depreciation,
as defined in policy 3.3 above, and the outstanding payments, in accordance with the contractual financial plan.
Additionally, the interest included in the value of the rentals and the depreciation of fixed tangible assets are
recognised as expenses in the income statement in the period to which they relate.
In operating lease contracts, rent due is recognised as an expense in the income statement on a linear basis
during the term of the lease agreement.
3.18. REVENUE AND ACCRUAL BASIS
Revenue comprises the fair value of the consideration received or receivable for the sales and services
rendered under the normal activity of the Company. Revenue is recognized net of the Value-Added Tax (VAT),
rebates and discounts.
Revenue is recognized when it can be reasonably measurable, it is probable that the Company will obtain future
economic benefits, and the specific criteria described below are met. Revenue is not considered as reasonably
measurable until all the contingencies related to a sale are substantially resolved. The Company bases its
estimates on historic results, considering the type of customer, the nature of the transaction and the specific
details of each agreement.
35 J.P. Sá Couto, SA – Financial Statements
The interest received is recognised as an accrual, taking into account the amount owed and the effective rate
during the period to maturity.
Transactions in currencies other than the euro are converted into the functional currency using the exchange
rate on the date of the transactions. The foreign exchange gains and losses resulting from the payment of
transactions as well as from the exchange rate conversion at the balance sheet date of the monetary assets
and liabilities denominated in foreign currency, are recognised in the income statement, as financial expenses
if related to loans, and as operating profits or losses, for all other balances/transactions.
i) Exchange rates considered
Exchange rates used to convert balances expressed in foreign currency as at 31st December 2014 and 2013,
were as follows:
2014 2013
YEAR END
AVERAGE
FOR THE
YEAR
YEAR END
AVERAGE
FOR THE
YEAR
US Dollar (USD) USD 1,2141 1,3286 1,3791 1,3281
Pounds Sterling GBP 0,7789 0,8063 0,8337 0,8493
Source: Bloomberg
Dividends are recognised when there is a right to receive them.
3.19. MAIN ESTIMATES AND JUDGEMENTS
In the preparation of the financial statements in accordance with the NCRF, the Board of Directors uses
estimates and assumptions that affect the application of policies and reported amounts. Estimates and
judgments are continuously assessed and based on the experience of past events and other factors, including
expectations regarding future events considered likely given the circumstances in which the estimates are
based or the result of information or experience gained.
Estimates were determined based on the best information available at the date of the preparation of the
financial statements. Nevertheless, there may be situations in subsequent periods which, due to not being
foreseeable at this date, have not been considered in those estimates. Changes to these estimates that may
occur after the date of the financial statements will be recognised in income statement, prospectively.
36 J.P. Sá Couto, SA – Financial Statements
RELEVANT ACCOUNTING ESTIMATES
Provisions
JP-ik periodically analyses any obligations resulting from past events and that must be the object of recognition
or disclosure.
The subjectivity inherent to the determination of the probability and the amount of internal resources
necessary for the liquidation of the obligations may lead to significant adjustments, due to either the variance
in the assumptions used or to the future recognition of provisions previously disclosed as contingent liabilities.
Tangible assets, intangible assets and investment properties
Determining the useful lives of the assets, as well as the depreciation method to be applied, is essential to
determine the amount of depreciation to recognise in the income statement for each year.
These two parameters are defined in accordance with the best judgement of the Board of Directors for assets
and businesses in question, also taking into consideration the practices adopted for companies in the sector
internationally.
Impairment
The determination of possible impairment losses can be triggered by the occurrence of various events, many
of which are outside the sphere of influence of JP-ik, such as: availability of future loans, the cost of capital, as
well as any other changes, whether internal or external, to JP-ik.
The identification of the impairment indicators, the future cash flow estimate and the determination of the fair
value of assets imply a higher degree of judgement from the Board of Directors regarding the identification and
assessment of the different impairment indicators, expected cash flows, applicable discount rates, useful lives
and residual values.
Deferred Tax Assets
Deferred tax assets are recognised only when it is probable that sufficient tax profits will be generated to utilize
the temporary difference. Deferred tax assets are reviewed annually and reduced whenever their future use
ceases to be likely.
37 J.P. Sá Couto, SA – Financial Statements
The determination of deferred taxes is based on the tax rates (and laws) enacted or substantively enacted as
at the balance sheet date and that are expected to apply in the period of the realisation of deferred tax assets
or the liquidation of liabilities arising on deferred taxes.
The nominal tax rate considered for the purposes of measuring deferred taxes was the effective tax rate.
4. CASH FLOW - CASH AND CASH EQUIVALENTS
As at 31st December 2014 and 2013 the balances under this caption were as follows:
31.12.2014 31.12.2013
Cash at hand 33.573 98.623
Demand bank deposits 1.222.214 3.048.506
Term bank deposits 8.084.279 10.245.984
Total 9.340.065 13.393.112
5. TANGIBLE ASSETS
The changes occurred in tangible fixed assets and accumulated depreciation, in the periods of 2014 and 2013
were the following:
31.12.2014
Land and
natural
resources
Buildings
and other
structures
Basic
equipment
Transportation
equipment
Office
Equipment
Other
tangible
assets
Assets in
progress
Total
Tangible
assets
COST:
Balance as at 1st January 2014 2.972.418 1.400.884 1.633.103 616.955 1.387.461 153.748 1.704.265 9.868.836
Acquisitions 330.000 12.425 82.714 113.941 97.096 28.239 849.234 1.513.649
Disposals - - (450) (66.712) - - - (67.162)
Adjustments, transf. and write-offs - 1.615.360 - (27.500) (8.658) (7.313) (1.615.360) (43.471)
Balance as at 31st December 2014 3.302.418 3.028.669 1.715.367 636.685 1.475.899 174.674 938.140 11.271.853
ACCUMULATED DEPRECIATION
AND IMPAIRMENT LOSSES:
Balance as at 1st January 2014 - (505.394) (1.442.887) (258.556) (1.286.444) (115.432) - (3.608.714)
Depreciation expense - (302.867) (123.214) (99.512) (110.993) (18.432) - (655.018)
Disposals - - 450 58.987 - - - 59.437
Adjustments, transf. and write-offs - - (13) 14.446 1.511 2.872 - 18.816
Balance as at 31st December 2014 - (808.261) (1.565.664) (284.636) (1.395.926) (130.992) - (4.185.479)
Net Value as at 31st December 2014 3.302.418 2.220.409 149.703 352.049 79.973 43.682 938.140 7.086.374
38 J.P. Sá Couto, SA – Financial Statements
31.12.2013
Land and
natural
resources
Buildings
and other
structures
Basic
equipment
Transportation
equipment
Office
Equipment
Other
tangible
assets
Assets in
progress
Total
Tangible
assets
COST:
Balance as at 1st January 2013 2.972.418 1.311.735 1.534.723 619.180 1.253.691 95.751 - 7.787.497
Acquisitions - 89.149 98.381 82.913 133.770 48.319 1.587.488 2.040.020
Disposals - - - (85.137) - - - (85.137)
Adjustments, transf. and write-offs - - - - - 9.679 116.777 126.456
Balance as at 31st December 2013 2.972.418 1.400.884 1.633.103 616.955 1.387.461 153.748 1.704.265 9.868.836
ACCUMULATED DEPRECIATION
AND IMPAIRMENT LOSSES:
Balance as at 1st January 2013 - (367.534) (1.285.785) (180.742) (1.156.365) (75.476) - (3.065.902)
Depreciation expense - (137.860) (157.102) (105.311) (130.080) (39.956) - (570.308)
Disposals - - - 27.497 - - - 27.497
Balance as at 31st December 2013 - (505.394) (1.442.887) (258.556) (1.286.444) (115.432) - (3.608.714)
Net Value as at 31st December 2013 2.972.418 895.490 190.217 358.399 101.017 38.316 1.704.265 6.260.122
The amount under the caption “Assets in progress” at 31st December 2014 is related to the completion of
construction works and the acquisition of land and projects in Gabon (634.370 euros) for the construction of a
production plant, and the preliminary study for the allocation of plots in the industrial area of Perafita (300.000
euros).
Total depreciation of tangible assets during the period amounted to 655.018 euros (570.308 euros in 2013).
6. INTANGIBLE ASSETS
During the periods ended 31st December 2014 and 2013, the changes in intangible assets and their
depreciation, were as follows:
31.12.2014 Software Industrial
Property
Other
intangible
assets
Intangible
assets in
progress
Total Intangible
assets
COST:
Balance as at 1st January 2014 874.346 50.000 76.960 343.989 1.345.295
Acquisitions 42.370 - - 384.868 427.238
Adjustments, transf. and write-offs 608.857 - - (608.857) -
Balance as at 31st December 2014 1.525.573 50.000 76.960 120.000 1.772.533
ACCUMULATED AMORTISATION
AND IMPAIRMENT LOSSES:
Balance as at 1st January 2014 (196.184) (3.179) (76.960) - (276.323)
Depreciation expense (363.419) (3.468) - - (366.887)
Disposals - - - - -
Adjustments, transf. and write-offs - - - - -
Balance as at 31st December 2014 (559.603) (6.647) (76.960) - (643.210)
Net Value as at 31st December 2014 965.970 43.353 - 120.000 1.129.323
39 J.P. Sá Couto, SA – Financial Statements
31.12.2013 Software Industrial
Property
Other
intangible
assets
Intangible
assets in
progress
Total Intangible
assets
COST:
Balance as at 1st January 2013 4.846 - 76.960 755.393 837.199
Acquisitions 43.053 50.000 - 415.043 508.096
Adjustments, transf. and write-offs 826.447 - - (826.447) -
Balance as at 31st December 2013 874.346 50.000 76.960 343.989 1.345.295
ACCUMULATED AMORTISATION
AND IMPAIRMENT LOSSES:
Balance as at 1st January 2013 (1.346) - (53.443) - (54.790)
Depreciation expense (194.838) (3.179) (23.516) - (221.533)
Balance as at 31st December 2013 (196.184) (3.179) (76.960) - (276.323)
Net Value as at 31st December 2013 678.162 46.821 - 343.989 1.068.972
Intangible assets are mostly related to the investment made in the new ERP system implemented during 2013
and 2014.
The caption “Intangible assets in progress" concerns the design and development of the product - Storage and
charging Cart for tablets and laptops (120.000 euros) to complete during 2015.
Amortisation of intangible assets amounting to 366.887 euros (221.533 euros in 2013) is included in the caption
‘Amortisation and depreciation losses /reversals’.
7. FINANCIAL INVESTMENTS
EQUITY METHOD
The amount of 3.432.288 euros under the caption: ‘Financial Investments - equity method’ corresponds to the
JP-ik’s share in 2014 results of the joint venture Youtsu, ACE, in which the Company holds 50% of shares and
voting rights.
Transactions between Youtsu and JP-ik were performed within the arm’s length principle.
40 J.P. Sá Couto, SA – Financial Statements
During the period ended 31st December 2014 the changes in the value of financial investments were as follows:
31st December 2014 Opening
balance
Dividends
received
Gain attributable
to the Company Total
FINANCIAL INVESTMENTS - EQUITY METHOD
In Joint Ventures
Youtsu - ACE 4.121.255 (4.121.255) 3.432.288 3.432.288
Total 4.121.255 (4.121.255) 3.432.288 3.432.288
Gains relating to the Equity Method were recorded in the income statement under the caption ‘Gains / losses
in subsidiaries, associates and joint ventures’.
There were no acquisitions or disposals of shares in the period:
YOUTSU, ACE
31.12.2014 31.12.2013
Net Profit for the period 6.864.576 8.242.511
% of ownership 50 % 50 %
Financial investments - Equity Method 3.432.288 4.121.255
The financial information used for the application of the equity method corresponds to that included in the
financial statements presented by Youtsu, ACE for the periods ended 31st December 2014 and 2013.
OTHER METHODS
The caption ‘Financial investments – other methods’ includes investments in the companies identified below,
in which the Company has no significant control.
31st December 2014 Opening
balance
Acquisition of
Shares Total
FINANCIAL INVESTMENTS - OTHER METHODS
AMB3E 10.000 - 10.000
SPGM 5.010 - 5.010
NORGARANTE 17.500 - 17.500
AEP 2.100 - 2.100
Contributions to FCT 15 626 641
Total 34.625 626 35.251
41 J.P. Sá Couto, SA – Financial Statements
8. DEFERRED TAX ASSETS
The changes occurred in deferred tax assets, in the periods ended 31st December 2014 and 2013, in
accordance with the temporary differences that generated them, were as follows:
INCREASES DECREASES
Balance as at
1st January
2014
Net
profit Equity
Net
profit Equity
Balance as at
31st December
2014
DEFERRED TAX ASSETS
Intangible Assets R&D Expenses 2.533 - - (2.533) - -
Impairment losses on trade receivables - 11.961 - - - 11.961
Provision for product guarantees 378.681 - - (105.065) - 273.616
Losses on financial instruments 26.501 - - (26.501) - -
407.714 11.961 - (134.099) - 285.577
INCREASES DECREASES
Balance as at
1st January
2013
Net
Profit Equity
Net
profit Equity
Balance as at
31st December
2013
DEFERRED TAX ASSETS
Intangible Assets R&D Expenses 5.473 - - (2.940) - 2.533
Provision for product guarantees 320.864 57.818 - - - 378.681
Losses on financial instruments 85.795 - - (59.295) - 26.501
412.132 57.818 - (62.235) - 407.714
9. INVENTORIES
As at 31st December 2014 and 2013, the detail of Inventories was as follows:
31.12.2014 31.12.2013
Merchandise 41.380.448 16.176.360
Raw materials 14.848.709 13.180.422
Finished goods 12.318.055 7.143.723
68.547.212 36.500.505
Inventories adjustments (3.170.621) (4.222.968)
65.376.591 32.277.537
The increase of the total value of inventory results from the impact of the Branch in Bolivia, which amounts to
27.137.549 euros.
42 J.P. Sá Couto, SA – Financial Statements
During the period ended as at 31st December 2014, movements in Inventories Adjustments were the
following:
ADJUSTMENTS 31.12.2014 TOTAL
GOODS
RAW
MATERIALS
FINISHED
PRODUCTS
Balance as at 1st January 2014 1.539.040 2.301.769 382.159 4.222.968
Increase 135.501 690.856 427.532 1.253.888
Reversal (911.957) (1.261.409) (132.869) (2.306.235)
Balance as at 31st December 2014 762.584 1.731.216 676.822 3.170.621
10. TRADE DEBTORS
As at 31st December 2014 and 2013, the amounts stated under ‘Trade debtors’ had the following composition:
TRADE DEBTORS 31.12.2014 31.12.2013
Current accounts receivable 76.112.963 98.543,083
Doubtful accounts receivables 2.833.595 2.511.312
78.946.558
101.054.396
Accumulated impairment losses (2.833.595) (2.511.312)
76.112.963 98.543.083
Of the total amount of 76.112.963 (98.543.083 euros in 2013), 3.604.429 euros (18.107.729 euros in 2013)
were subject to factoring contract with recourse. The corresponding advance is recorded under the caption
‘Other creditors’ – (Note 23) and 8.694.261 euros (without value in 2013) were the object of factoring contract
without recourse. The latter contract was in 2015 converted into a contract with recourse.
31.12.2014 31.12.2013
TRADE DEBTORS
OTHER
CLIENTS
RELATED
PARTIES (Note
36)
TOTAL
OTHER
CLIENTS
RELATED
PARTIES (Note
36)
TOTAL
Current acc. receivable 73.628.856 2.484.107 76.112.963 61.209.287 37.333.796 98.543.083
Doubtful acc. receivable 2.833.595 - 2.833.595 2.511.312 - 2.511.312
76.462.451 2.484.107 78.946.558 63.720.600 37.333.796 101.054.396
43 J.P. Sá Couto, SA – Financial Statements
During the periods ended 31st December 2014 and 2013, movements in receivables’ accumulated impairment
losses were as follows:
Impairment losses 31.12.2014 31.12.2013
Balance as at 1st January 2.511.312 2.101.740
Increase 596.666 650.877
Decrease (274.383) (241.305)
Adjustments - -
Balance as at 31st December 2.833.595 2.511.312
11. ADVANCES TO SUPPLIERS
The balance under this caption, in the amount of 1.083.777 euros (1.248.090 euros in 2013), comprises the
advances made to suppliers regarding orders to be fulfilled.
12. STATE AND OTHER PUBLIC ENTITIES
On 31st December 2014 and 2013, the caption ‘State and other public entities’ included the following assets
and liabilities:
31.12.2014 31.12.2013
ASSETS LIABILITIES ASSETS LIABILITIES
Corporate income taxes (IRC) - 134.890 1.385.626 136.689
Value added tax (VAT) - 3.276.761 - 3.828.533
Tax credit - Bolivia Branch 1.655.819 - - -
Taxes withheld to third parties - 125.465 - 218.886
Social Security - 113.208 - 123.239
1.655.819 3.650.325 1.385.626 4.307.347
44 J.P. Sá Couto, SA – Financial Statements
13. OTHER DEBTORS
AS at 31st December 2014 and 2013, the caption ‘Other debtors’ was as follows:
31.12.2014 31.12.2013
NON-CURRENT CURRENT NON-CURRENT CURRENT
Credit facility Loan - MGBO - 4.714.784 - -
Vendor funds - 1.215.298 - 3.785.230
Stock discounts and rebates - 952.289 - 1.471.763
Rappel to be obtained - 611.732 - 1.518.432
Bolivia Branch - Other debtors - 382.597 - -
Other debtors - 141.782 - 282.334
Personnel - 70.893 - 169.877
Other receivables due to accrued income - 39.946 - 115.672
Securities and collaterals provided 443.100 - 272.751 -
443.100 8.129.322 272.751 7.343.308
Accumulated impairment losses - (378.761) - -
Other debtors 443.100 7.750.561 272.751 7.343.308
Impairment losses 31.12.2014 31.12.2013
Balance as at 1st January - -
Increase 378.761 -
Balance as at 31st December 378.761 -
The amount on 31st December 2014 of the item “Credit facility loan – MGBO” is related to the credit facility
agreement between JP-ik and the Bolivian Company “MGBO – Tecnologia”, which has no fixed repayment date
and does not accrue interest.
The constitution of impairment losses refers to the line item "Vendor funds”.
14. DEFERRED EXPENSES
At 31st December 2014 and 2013 the balances of the item “Deferred expenses” were as follows:
31.12.2014 31.12.2013
DEFERRALS - ASSETS
Insurance fees 105.278 86.140
Other 74.777 94.620
Rents deferred expenses 39.486 26.926
Confirming Interest 30.521 37.363
250.063 245.049
45 J.P. Sá Couto, SA – Financial Statements
15. OTHER FINANCIAL ASSETS
This caption includes, essentially, bonds and other applications that do not have a listed market price in an active
market and whose fair value cannot be reliably measured. These investments are measured at the cost of
acquisition less any accumulated impairment losses.
31.12.2014 31.12.2013
Balance as at 1st January 250.000 250.000
Balance as at 31st December 250.000 250.000
On 31st December 2014 and 2013, this item included bonds in BPN (150.000 euros) and other investments in
CGD (100.000 euros - Caixa Seguro Capital Mais).
16. SHARE CAPITAL
On 31st December 2014 the Company’s capital, fully subscribed and paid-up, was composed of 2.500.000
shares with the nominal value of 1 euro each.
J.P. Sá Couto, SGPS, S.A. is the holder of 99 % of the capital, which corresponds to 2.475.000 euros.
17. LEGAL RESERVES
The Portuguese commercial legislation stipulates that a minimum of 5 % of the annual profit is to be transferred
to the legal reserve until its balance constitutes at least 20 % of the share capital. This reserve is not
distributable, except in the event of the Company being liquidated, but may be used to absorb losses after all
other reserves have been exhausted or incorporated into the share capital.
The legal reserves are fully constituted.
46 J.P. Sá Couto, SA – Financial Statements
18. OTHER RESERVES
These reserves are constituted in accordance with the articles of association and by proposal of the Board of
Directors, which is subject to approval in a General Assembly.
The variation in this caption is due to the appropriation of 2013 profits and the ensuing dividends distribution of
4.100.000 euros in 2014.
19. PROVISIONS
The movements in the accumulated provisions occurred during the periods ended 31st December 2014 and
2013, were as follows:
31.12.2014 31.12.2013
Balance as at 1st January 1.352.433 1.060.599
Increases in the period 33.669 1.335.050
Decreases in the period (408.901) (1.043.216)
Balance as at 31st December 977.201 1.352.433
The reduction in the provision of product guarantees to customers’ results from the criterion followed based
on historical cost already incurred with the assistance of machines in guarantee, assuming that this cost is linear
during the guarantee’s lifetime.
20. BORROWINGS
At 31st December 2014 and 2013 the balances under this caption were as follows:
31.12.2014 31.12.2013
CURRENT NON-CURRENT TOTAL CURRENT NON-CURRENT TOTAL
Bank loans 57.073.915 2.071..888 59.145.803 29.126.023 3.259.649 32.385.671
Overdrafts 10.000 - 10.000 5.464.375 - 5.464.375
Financial leases 35.737 88.448 124.185 53.579 84.594 138.174
Other loans (Note 36) 120.000 240.000 360.000 120.000 360.000 480.000
Total debt 57.239.652 2.400.336 59.639.988 34.763.977 3.704.243 38.468.220
47 J.P. Sá Couto, SA – Financial Statements
Loans are recorded as liabilities at the nominal value received, and are stated in the balance sheet in current or
non-current liabilities, depending on whether their maturity occurs at less or more than one year, respectively.
Their derecognition only occurs when the obligations arising out of the contracts cease, in particular where their
liquidation, cancellation or expiry has taken place.
Other loans item concerns the loan between AT Informática – Assistência Técnica Informática, Lda. and JP-ik,
which accrues interest at a rate corresponding to the simple arithmetical average of the three-month EURIBOR
rates, plus a spread of 3,875 %, with maturity in October 2017.
In exchange for the loans for major projects (Venezuela, Bolivia, Brazil) there is a generic pledge over the
inventories acquired for the same, as well as, over the Magalhães brand.
Non-current loans are repayable in accordance with the following repayment terms:
31.12.2014 31.12.2013
1 to 5 years 2.400.336 3.704.243
More than 5 years - -
Total 2.400.336 3.704.243
On 31st December 2014, the Company used the following types of goods acquired under financial lease
agreements:
31.12.2014
ASSETS ACQUIRED THROUGH
FINANCIAL LEASING
ACQUISITION
COST
ACCUMULATED
DEPRECIATION
CARRYING
AMOUNT
Basic equipment 19.915 19.915 -
Transportation equipment 356.912 140.342 216.570
Total 376.827 160.257 216.570
The Company’s Borrowings are denominated in the following currencies:
31.12.2014 31.12.2013
EUR 9.713.288 € 19.064.308 €
USD 49.926.700 € 19.403.912 €
59.639.988 € 38.468.220 €
48 J.P. Sá Couto, SA – Financial Statements
21. TRADE CREDITORS
At 31st December 2014 and 2013, the amount under the caption ‘Trade Creditors’ was as follows:
31.12.2014 31.12.2013
GENERAL
SUPPLIERS
GROUP / RELATED
PARTIES
(Note 36)
TOTAL
GENERAL
SUPPLIERS
GROUP / RELATED
PARTIES
(Note 36)
TOTAL
Current accounts
payable 67.213.028 639.652 67.852.680 66.654.660 357.833 67.012.493
67.213.028 639.652 67.852.680 66.654.660 357.833 67.012.493
22. ADVANCE PAYMENTS FROM CLIENTS
In this item the advances are registered the advances made by customers regarding sales to be made.
23. OTHER CREDITORS
On 31st December 2014 and 2013, the amount under the caption ‘Other creditors’ had the following
composition:
31.12.2014 31.12.2013
CURRENT CURRENT
Factoring with recourse 3.604.429 18.107.729
Accrued staff costs 741.711 756.452
Accrued interest 568.102 406.071
Personnel 502.337 506.622
Funds to be conceded to clients 433.893 857.851
Other Creditors due to additional Expenses 370.512 2.472.988
Other accounts payable 173.001 -
Insurance payable 68.413 94.191
Total 6.642.397 23.201.903
49 J.P. Sá Couto, SA – Financial Statements
24. OTHER FINANCIAL LIABILITIES
As at 31st December 2014, the amount under ‘Other financial liabilities’ had the following composition:
The fair value of swap transactions corresponds to the "mark-to-market" value determined by the respective
bank based on the contractual conditions. The contract swap interest rate matured in April 2014.
The adjustments in fair value are recorded under the caption ‘Other operating income / expenses’ in the income
statement (Note 30).
25. SALES AND SERVICES RENDERED
Sales and services rendered in the periods of 2014 and 2013 were as follows:
31.12.2014 31.12.2013
DOMESTIC
MARKET
FOREIGN
MARKET TOTAL
DOMESTIC
MARKET
FOREIGN
MARKET TOTAL
Sales 140.412.058 190.923.843 331.335.901 131.522.754 295.418.515 426,941,269
Services rendered 65.442 53.591 119.033 97.214 29.413 126,627
140.477.500 190.977.434 331.454.934 131.619.967 295.447.928 427,067,896
26. INCREASE / DECREASE IN PRODUCTION
The demonstration of the variation in production for the periods ended 31st December 2014 and 2013 was as
follows:
FINISHED PRODUCTS AND WORK IN
PROGRESS: 31.12.2014
31.12.2013
Balance as at 1st January 7.143.723 573.371
Adjustments - -
Balance on 31st December (Note 9) 12.318.055 7.143.723
Increase / decrease in production 5.174.332 6.570.352
Reference Value: Maturity
Fair value on
31.12.2014
Fair value on
31.12.2013
Interest rate swap € 1.500.000 08-04-2014 - (94.644)
- (94.644)
50 J.P. Sá Couto, SA – Financial Statements
27. COST OF GOODS SOLD AND MATERIALS CONSUMED
The cost of goods sold and materials consumed for the periods ended on 31st December 2014 and 2013 was
as follows:
2014 2013
RAW
MATERIALS,
SUBSIDIARIES
AND
CONSUMABLES
GOODS
TOTAL
RAW
MATERIALS,
SUBSIDIARIES
AND
CONSUMABLES
GOODS
TOTAL
Balance as at 1st January 13.180.422 16.176.360 29.356.782 33.469.329 12.892.386 46.361.716
Adjustments - - - - (21.661) (21.661)
Purchases 82.304.511 252.196.351 334.500.862 21.442.435 366.235.902 387.678.337
Balance on 31 December 14.848.709 41.380.449 56.229.158 13.180.422 16.176.360 29.356.782
Cost of Goods Sold and
Materials Consumed (80.636.224) (226.992.262) (307.628.486) (41.731.342) (362.930.268) (404.661.610)
28. EXTERNAL SUPPLIES AND SERVICES
The distribution of supplies and external services in the periods ended 31st December 2014 and 2013, was as
follows:
31.12.2014 31.12.2013
Transportation of goods 2.744.935 1.776.495
Specialised services 2.514.490 2.529.750
Subcontracts 1.287.476 89.684
Travel and accommodation 789.099 720.352
Insurance 504.834 645.890
Rents and leases 453.189 431.140
Advertising and marketing 443.931 617.636
Service Fees 226.105 342.538
Communication 216.509 194.997
Materials 208.690 177.108
Representation expenses 206.873 192.363
Banking services 190.012 240.053
Maintenance and repairs 122.023 102.765
Energy and fluids 110.306 130.754
Litigation and notary services 48.118 4.488
Cleaning, hygiene and comfort 35.926 27.818
Other 71.118 116.050
10.173.634 8.339.883
The significant variation of the item transports of goods results from the projects with Bolivia and with Brazil.
51 J.P. Sá Couto, SA – Financial Statements
29. PERSONNEL EXPENSES
The allocation of personnel expenses for the periods ended 31st December 2014 and 2013 was as follows:
31.12.2014 31.12.2013
Remuneration of the governing bodies 320.350 456.050
Personnel remuneration 4.721.895 5.042.485
Bonuses 500.000 500.000
Charges on remunerations 1.058.597 1.152.459
Insurance 24.174 28.398
Other personnel expenses 461.413 563.532
7.086.429 7.742.925
The average number of employees of the Company for the period of 2014 was 243 and of 254 for the period of
2013.
30. OTHER OPERATING INCOME
The other operating income, for the periods ended 31st December 2014 and 2013, was as follows:
31.12.2014 31.12.2013
Exchange rate gains 6.976.097 4.461.178
Operating expenses recovery 1.896.895 1.293.723
Excess Tax Estimate 503.345 478.380
Gains on Financial Instruments 94.644 188.947
Additional income 89.095 141.963
Other 1.039.797 477.390
10.599.874 7.041.580
The significant variation in foreign exchange differences is due to the evolution of the dollar in 2014 when
compared to 2013.
52 J.P. Sá Couto, SA – Financial Statements
31. OTHER OPERATING EXPENSES
The other operating expenses in the periods ended 31st December 2014 and 2013 were as follows:
31.12.2014 31.12.2013
Tax on transactions - Bolivia Branch 1.053.951 -
Exchange rate losses 1.013.919 5.478.849
Inventory losses 897.690 1.289.318
Offers and samples 124.732 285.194
Donations 342.721 261.080
Losses on financial instruments 50.788 185.237
Other 2.732.554 2.380.437
6.216.355 9.880.114
The item of Losses on inventories includes an 849.023 euros write-off for obsolete informatics material.
The significant variation in foreign exchange differences is due to the evolution of the dollar in 2014 when
compared to 2013.
32. AMORTISATION AND DEPRECIATION LOSSES / REVERSALS
In the periods ended 31st December 2014 and 2013, amortisation and depreciation expenses were as follows:
31.12.2014 31.12.2013
Tangible assets 655.018 570.308
Intangible assets 366.887 221.533
1.021.905 791.841
33. INTEREST AND SIMILAR INCOME / EXPENSES
Interest and similar income /expenses, for the periods of 2014 and 2013, had the following composition:
INTEREST AND SIMILAR INCOME 31.12.2014 31.12.2013
Exchange rate gains 2.015.292 6.927.802
Interest and financial costs recovery 188.499 1.794.228
2.203.791 8.722.030
INTEREST AND SIMILAR EXPENSES
Interest 5.239.161 5.829.556
Exchange rate losses 6.393.119 5.343.406
11.632.280 11.172.962
(9.428.489) (2.450.933)
53 J.P. Sá Couto, SA – Financial Statements
The significant variation in foreign exchange differences is due to the evolution of the dollar in 2014 compared
to 2013.
34. INCOME TAXES
The breakdown of the amount of tax for the period recognised in the financial statements is as follows:
31.12.2014 31.12.2013
Current taxes (2.442.177) (2.314.741)
Deferred taxes (122.137) (4.417)
Income taxes for the period (2.564.314) (2.319.159)
Income taxes (2.564.314) (2.319.159)
The tax rates as at the balance sheet date for the periods ended 31st December 2014 and 2013 were the
following:
INCOME TAX 31.12.2014
Tax rate 23 %
Municipal surcharge 1.50 %
State tax
Over € 1.5 million to € 7.5 million 3 %
Over € 7.5 million to € 35 million 5 %
More than € 35 million 7 %
CURRENT TAX FOR THE PERIOD 31.12.2013
Tax rate 25 %
Municipal surcharge 1.50 %
State tax
Over € 1.5 million to € 7.5 million 3 %
More than € 7.5 million 5 %
The applicable tax rate for the year ended 31st December 2014 was 23 % (25 % for 2013), plus 1.5 % municipal
surcharge and 3 % state tax on the profit in excess of 1.5 million euros up to 7.5 million euros and 5 % on the
profit exceeding 7.5 million euros.
54 J.P. Sá Couto, SA – Financial Statements
The reconciliation of the theoretical and the effective tax rate is as follows:
31.12.2014 31.12.2013
PROFIT BEFORE TAXES 9.832.664 9.055.159
Nominal Tax rate 23 % 25 %
EXPECTABLE INCOME TAX 2.261.513 2.263.790
Tax Difference – Bolivia Branch 19.568 -
TAX EFFECT PRODUCED BY:
Tax benefits (22.600) (320.898)
Tax benefits - previous years (115.769) (64.060)
Other specific taxations 77.419 60.215
Municipal surcharge 129.162 130.624
State tax 235.541 240.414
Permanent Differences (38.666) -
Other 18.146 9.074
INCOME TAX FOR THE PERIOD 2.564.314 2.319.159
EFFECTIVE TAX RATE 26,08 % 25,61 %
35. DIVIDENDS AND EARNINGS PER SHARE
Earnings per share for the periods ended 31st December 2014 and 2013 were calculated taking into account
the following amounts:
NET PROFIT: 31.12.2014 31.12.2013
Net profit considered to calculate basic earnings per share:
Net profit 7.268.349 6.736.001
Effect of the potential shares:
Interest related to convertible bonds (net of tax) - -
Net profit considered to calculate diluted earnings per share 7.268.349 6.736.001
NUMBER OF SHARES:
Weighted average number of shares used to calculate basic earnings per share 2.500.000 2.500.000
Effect of potential ordinary shares from convertible bonds - -
Weighted average number of shares used to calculated diluted earnings per share 2.500.000 2.500.000
Basic earnings per share 2.91 2.69
Diluted earnings per share 2.91 2.69
During the periods ended 31st December 2014 and 2013 there were no changes to the number of shares.
55 J.P. Sá Couto, SA – Financial Statements
36. RELATED PARTIES
Transactions and balances between the Company and related parties on 31st December 2014 and 2013 are
shown in the table below:
TRANSACTIONS:
SALES AND SERVICES RENDERED 31.12.2014 31.12.2013
ALGAPLUS 86 -
AT INFORMÁTICA 98.246 13.891
YOUTSU 454.584 191.225.668
JP SÁ COUTO ANGOLA 77.080 896.294
João Paulo Sá Couto 1.136 5.153
Jorge Manuel Sá Couto 21.750 1.998
652.882 192.143.006
PURCHASES AND SERVICE ACQUISITIONS 31.12.2014 31.12.2013
JP SÁ COUTO SGPS 317.133 457.072
AMG 1.395.158 -
IMOTSU 472.464 500.977
AT INFORMÁTICA 1.719.913 3.320.944
YOUTSU 41.473 -
3.946.141 4.278.993
INTEREST ON LOANS OBTAINED 31.12.2014 31.12.2013
AT INFORMÁTICA 16.244 21.568
16.244 21.568
BALANCES:
TRADE DEBTORS 31.12.2014 31.12.2013
AT INFORMÁTICA 298.195 231.975
AMG 108 -
JPMW 515.303 -
YOUTSU 151.153 35.793.454
AMPLITUDE NET 38.827 -
JP SÁ COUTO ANGOLA 1.482.375 1.299.894
João Paulo Sá Couto 1.363 6.159
Jorge Manuel Sá Couto 21.574 2.314
2.508.899 37.333.796
TRADE CREDITORS 31.12.2014 31.12.2013
JP SÁ COUTO SGPS 284.826 9.533
IMOTSU 24.045 4.062
AT INFORMÁTICA 81.008 344.239
YOUTSU 23.721 -
AMG 226.053 -
639.652 357.833
56 J.P. Sá Couto, SA – Financial Statements
LOANS OBTAINED 31.12.2014 31.12.2013
AT INFORMÁTICA 360.000 480.,000
360.000 480.000
The terms or conditions applied between the Company and related parties are substantially identical to those
that would be contracted, accepted and applied between independent entities in comparable transactions.
The remunerations to the Governing Bodies were the following:
31.12.2014 31.12.2013
BOARD OF DIRECTORS REMUNERATION 334.540 734.338
Fixed 312.500 590.481
Variable 22.040 143.858
STATUTORY AUDITOR’S REMUNERATION 19.200 16.200
37. SUBSEQUENT EVENTS
After the reporting date, and until the preparation of this report, there were no facts likely to change the
situation disclosed in the accounts for the purposes of the provisions article 66, no. 5 – b) of the Portuguese
Commercial Company Law.
38. CONTINGENCIES
All proceedings that where lodged against JP-ik have already been archived or subject to acquittal, most
notably (due to the exposure in the press) the acquittal requested by the Portuguese Public Prosecutor’s office
and granted by the judges in the case known as “VAT Carrousel”
57 J.P. Sá Couto, SA – Financial Statements
39. GUARANTEES PROVIDED
The Bank guarantees provided by the Company as at 31st December 2014 were the following:
Bank Beneficiary Currency Amount Income
BBPI MICROSOFT EUR 500.000 06/03/2015
Santander DA IIEE ALGECIRAS EUR 109.596 03/09/2017
Santander C CEIBAL APOYO EDUCACION USD 90.125 10/10/2015
Santander C CEIBAL APOYO EDUCACION USD 182.000 22/12/2015
Total Guarantees provided in EUR 609.596 EUR
Total Guarantees provided in USD 272.125 USD
40. ENVIRONMENTAL INFORMATION
The Company adopts the necessary measures concerning the environmental area, in order to comply with
current legislation.
The Board of Directors of JP-ik does not foresee any risks related to environmental protection and
improvement, and JP-ik has not incurred in any infringements concerning this matter during the 2014 financial
year.
41. LEGALLY REQUIRED INFORMATION
The Board of Directors reports that the Company does not have any overdue debts to the State under Decree-
Law 534/80 of 7th November.
In compliance with the provisions of Decree-Law no. 411/91 of 17 October, the Board of Directors reports that
the Company has paid all its Social Security contributions within the legally stipulated time-limits.
For the purposes of article 55, no. 5 – d) of the Portuguese Commercial Company Law, during the period of
2014, the Company did not trade its own shares, and does not own any of its own shares as at 31st December
2014.
58 J.P. Sá Couto, SA – Financial Statements
No authorisations were granted under Article 397 of the Portuguese Commercial Company Law, therefore
there is nothing to declare for the purposes of article 66, no 2 – e) of the Portuguese Commercial Company
Law.
42. FINANCIAL STATEMENTS APPROVAL
These Financial Statements were approved by the Board of Directors on the 14th of May 2015.
There were no relevant changes in the conditions as at the balance sheet date.
Subsequent to 31st December 2014 and to date, there have been no material events that may materially affect
the financial position and the future results of the Company.
The Board of Directors,
JORGE MANUEL F. M. SÁ COUTO JOÃO PAULO F. M. SÁ COUTO
(CHAIRMAN) (VICE-CHAIRMAN)
The Chartered Accountant
PEDRO ABREU CRUZ LOPES
(TOC NO. 68609)
59 J.P. Sá Couto, SA – Financial Statements
60 J.P. Sá Couto, SA – Financial Statements
61 J.P. Sá Couto, SA – Financial Statements