Duro Felguera, Sa and Subsidiaries
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DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED MANAGEMENT REPORT FOR THE YEAR ENDED DECEMBER 31, 2017 CONTENTS 3 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 AND MANAGEMENT REPORT FOR 2017 113 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 AND MANAGEMENT REPORT FOR 2017 209 ANNUAL CORPORATE GOVERNANCE REPORT Legal Deposit AS-1044-2012 DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED MANAGEMENT REPORT FOR THE YEAR ENDED DECEMBER 31, 2017 AUDIT REPORT CONSOLIDATED ANUAL ACCOUNTS DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND CONSOLIDATED MANAGEMENT REPORT FOR THE YEAR ENDED DECEMBER 31, 2017 1 Audit Report on the Consolidated Financial Statements 2 Duro Felguera, S.A. and Subsidiaries Consolidated balance sheet Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated statement of cash flow Notes to the consolidated annual accounts Directors’ report Economic and Financial Report 6 Powered by experience Annual Report 2017 7 Economic and Financial Report 8 Powered by experience Annual Report 2017 9 Economic and Financial Report 10 Powered by experience Annual Report 2017 11 Economic and Financial Report CONTENTS OF THE 2017 CONSOLIDATED FINANCIAL STATEMENTS Note Consolidated balance sheet Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements 1 General information 2 Summary of significant accounting policies 2.1 Basis of presentation 2.2 Consolidation 2.3 Current and non-current balances 2.4 Segment information 2.5 Foreign currency translation 2.6 Property, plant and equipment 2.7 Investment properties 2.8 Intangible assets 2.9 Impairment of non-financial assets 2.10 Non-current assets held for sale 2.11 Financial assets 2.12 Derivative financial instruments and hedging activities 2.13 Inventories 2.14 Trade receivables 2.15 Cash and cash equivalents 2.16 Share capital 2.17 Deferred income 2.18 Trade payables 2.19 Borrowings 2.20 Current and deferred income tax 2.21 Employee benefits 2.22 Share-based payments 2.23 Provisions 2.24 Revenue recognition 2.25 Leases 2.26 Distribution of dividends 2.27 Earnings per share 2.28 Environment 3 Financial risk management 3.1 Financial risk factors 3.2 Capital risk management 3.3 Fair value estimation 12 Powered by experience Annual Report 2017 Note 4 Accounting estimates and judgements 5 Segment information 6 Assets and liabilities classified as held for sale 7 Property, plant and equipment 8 Investment properties 9 Intangible assets 10 Investments in associates 11 Financial instruments 12 Trade and other receivables 13 Derivative financial instruments and hedging activities 14 Inventories 15 Cash and cash equivalents 16 Capital and share premium 17 Share-based payments 18 Retained earnings and other reserves 19 Interim dividend 20 Non-controlling interests 21 Deferred income 22 Borrowings 23 Trade and other payables 24 Deferred taxes 25 Employee benefits 26 Provisions for other liabilities and charges 27 Revenue 28 Employee benefits expense 29 Operating expenses 30 Other gains/(losses) net 31 Net finance income/(cost) 32 Income tax expense 33 Earnings per share 34 Dividends per share 35 Cash generated from operations 36 Contingencies 37 Commitments 38 Related party transactions 39 Joint ventures 40 Other information 41 Events after the reporting period 42 Additional note for English translation 13 Economic and Financial Report DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2017 AND 2016 (€ thousand) At 31 de diciembre ASSETS Note 2017 2016 Property, plant and equipment 7 76,697 114,178 Investment properties 8 27,400 32,741 Intangible assets 9 19,174 38,371 Investments in associates 10 20 4,403 Available-for-sale financial assets 11 5,590 6,107 Derivative financial instruments 11-13 - 154 Loans and other receivables 11-12 413 1,442 Deferred tax assets 24 11,032 68,471 NON-CURRENT ASSETS 140,326 265,867 Non-current assets held for sale 6 27,395 - Inventories 14 22,196 28,921 Trade and other receivables 11-12 473,724 608,867 Financial receivables 11 16 14 Derivative financial instruments 11-13 1,052 656 Current tax assets 3,412 6,647 Cash and cash equivalents 11-15 90,579 152,397 CURRENT ASSETS 618,374 797,502 TOTAL ASSETS 758,700 1,063,369 The accompanying notes 1 to 41 are an integral part of these consolidated financial statements. 14 Powered by experience Annual Report 2017 DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2017 AND 2016 (€ thousand) At 31 de diciembre EQUITY AND LIABILITIES Note 2017 2016 Share capital 16 80,000 80,000 Accumulated exchange differences (10,603) (11,286) Retained earnings and other reserves 18 (220,436) 48,786 EQUITY ATTRIBUTABLE TO SHAREHOLDERS (151,039) 117,500 Non-controlling interests 20 (13,807) 3,671 EQUITY (164,846) 121,171 DEFERRED INCOME 21 6,631 6,929 Borrowings 11-22 74,256 271,927 Derivative financial instruments 11-13 - 995 Deferred tax liabilities 24 13,751 12,206 Employee benefits 25 1,437 1,553 Provisions for other liabilities and charges 26 1,956 6,005 NON-CURRENT LIABILITIES 91,400 292,686 Liabilities associated with non-current assets held for sale 6 20,861 - Borrowings 11-22 268,393 98,718 Derivative financial instruments 11-13 2 6,312 Trade and other payables 11-23 418,168 401,009 Current tax liabilities 2,229 6,512 Employee benefits 25 7,742 8,665 Provisions for other liabilities and charges 26 108,120 121,367 CURRENT LIABILITIES 825,515 642,583 TOTAL EQUITY AND LIABILITIES 758,700 1,063,369 The accompanying notes 1 to 41 are an integral part of these consolidated financial statements. 15 Economic and Financial Report DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016 (€ thousand) Year ended December 31 Note 2017 2016 Revenue 27 624,126 709,124 Changes in inventories of finished goods and work in progress 2,720 (917) Cost of sales (444,161) (462,667) Gross profit 182,685 245,540 Employee benefits expense 28 (121,428) (130,266) Amortisation and depreciation 7-8-9 (10,264) (8,573) Operating expenses 29 (109,255) (115,324) Other gains/(losses) net 30 (136,535) 10,061 Operating profit/(loss) (194,797) 1,438 Net finance income/(cost) 31 (19,950) (19,346) Impairment of financial instruments (3,376) (194) Share of loss/(profit) of associates 10 - 52 Profit/(loss) before tax (218,123) (18,050) Income tax expense 32 (53,095) (1,088) Profit/(loss) for the year from continuing operations (271,218) (19,138) Attributable to: Shareholders of the company (254,496) (18,197) Non-controlling interests 20 (16,722) (941) (271,218) (19,138) Earnings/(loss) per share for the year from continuing operations attributable to shareholders of the company (€ per share) - Basic and diluted 33 (1.77) (0.13) The accompanying notes 1 to 41 are an integral part of these consolidated financial statements. 16 Powered by experience Annual Report 2017 DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016 (€ thousand) Year ended December 31 Note 2017 2016 Profit/(loss) for the year (271.218) (19.138) Other comprehensive income Items that will not be reclassified to profit or loss Other comprehensive income not to be reclassified to profit - (387) or loss Income tax relating to items that will not be reclassified - - Items that may be reclassified to profit or loss Changes in the fair value available-for-sale financial assets (381) 1,765 Cash flow hedges 6,668 (510) Currency translation differences (9,932) 4,357 Income tax relating to items that may be reclassified to profit 24 (5,982) (962) or loss Other comprehensive income for the year, net of tax (9,627) 4,263 Total comprehensive income for the year (280,845) (14,875) Attributable to: - Shareholders of the company (264,679) (14,430) - Non-controlling interests (16,166) (445) (280,845) (14,875) Total comprehensive income for the year attributable to shareholders of the company from • Continuing operations (264,679) (14,430) The accompanying notes 1 to 41 are an integral part of these consolidated financial statements. 17 Economic and Financial Report 18 DURO FELGUERA, S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2017 AND 2016 (€ thousand) Equity attributable to owners of the parent Legal reserve, Valuation other reser- Treasury Profit/(loss) adjust- Share Non-controlling Note Capital ves and retai- shares attributed to ments and Total equity premium interests ned earnings the parent translation (1) differences Balance at 1 January 2016 80,000 - 231,902 (87,719) (68,889) (20,210) 5,011 140,095 Profit for the year - - - - (18,197) - (941) (19,138) Other comprehensive income - - - - - 3,767 496 4,263 Total comprehensive income - - - - (18,197) 3,767 (445) (14,875) Distribution of dividends - - - - - - (6) (6) Other transactions with equity holders or owners - - (1,148) - - - - (1,148) Transfers between equity items - - (68,889) - 68,889 - - - Other changes - - (2,006) - - - (889) (2,895) Balance at 31 December 2016 80,000 - 159,859 (87,719) (18,197) (16,443) 3,671 121,171 Balance at 1 January 2017 80,000 - 159,859 (87,719) (18,197) (16,443) 3,671 121,171 Profit for the year - - - - (254,496) - (16,722) (271,218) Other comprehensive income - - - - - (10,183) 556 (9,627) Total comprehensive income - - - - (254,496) (10,183) (16,166) (280,845) Distribution of dividends - - - - - - (1,072) (1,072) Other transactions with equity holders or owners - - - - - - - - Transfers between equity items - - (18,197) - 18,197 - - - Other changes - - (3,860) - - - (240) (4,100) Balance at 31 December 2017 80,000 - 137,802 (87,719) (254,496) (26,626) (13,807) (164,846) (1) For the purposes of this statement, “Reserves” includes the following equity items on the consolidated balance sheet: Reserves and interim dividend The accompanying notes 1 to 41 are an integral part of these consolidated financial statements.