Auto Estradas do Atlântico Annual Report 2012
Annual Report 2012
The Bord of Directors p. 03
Management Report
// Global Analysis p. 06
Management Report
//Functional Analysis p. 09
Financial Statements p. 28
Notes to the Financial Statements p. 33
Report and Opinion of the Supervisor Boarder p. 65
Statutory Examinationors’ Report p. 67
Auto Estradas do Atlântico, SA p. 2
Annual Report 2012 - The Board of Directors
THE BORD OF DIRECTORS
GENERAL ASSEMBLY
Chairman
José Luís da Cruz Vilaça
Secretary
Tiago Severim de Melo Alves dos Santos
THE BOARD OF DIRECTORS
Chairman
Lena Engenharia e Construções, S.A.
Representada por: Manuel de Sousa Pereira
Members
José Joaquim Cortiço da Costa Braga
MSF Concessões, SGPS, S.A.
Representada por: José Ernesto Cirilo Custódio dos Santos
Luís Rua Geraldes
João Luís Barbosa Pereira de Vasconcelos
Guilherme Barata Pereira Dias de Magalhães
MSF - Sociedade Gestora de Participações Sociais , S.A.
Representada por: Eduardo Galán de Matos Coimbra
Lena Concessões e Serviços, SGPS, S.A.
Representada por: Paulo Jorge de Oliveira Pereira Reis
Auto Estradas do Atlântico, SA p. 3
Annual Report 2012 - The Board of Directors
BOARD OF AUDITORS
Permanent
Chairman
José Vieira dos Reis
Members
Fernando Marques Oliveira
Joaquim Oliveira de Jesus
Alternate Members
Mário José Silva Jerónimo
Pedro Manuel Palma Monteiro Varela
Statuatory Auditor
Deloitte & Associados, SROC S.A.
Representada por: João Luís Falua Costa da Silva
Statuatory Auditor Alternate Member
Duarte Nuno Passos Galhardas
Auto Estradas do Atlântico, SA p. 4
Annual Report 2012
Auto Estradas do Atlântico, SA
Annual Report 2012 - Management Report
2012 MANAGEMENT REPORT
OVERVIEW
To the Shareholders
The fourteenth year of life of our Company was affected by the severe economic recession, the increase in fuel prices and the recurring anathema concerning PPPs which increasingly impacts on our sector.
Toll income fell 9% compared to the sum foreseen in the budget, despite the fact that we had forecast it in a way we considered conservative.
Management implemented in respect of operating costs, with a reduction of 1.2% compared to budg- eted costs, proved insufficient in the light of the dramatic loss of income to enable the Company to make profits for the third consecutive year. Still, EBITDA stood at 40,147,754.1 euros and operating results at 20,532,756.9 euros.
During the year, the Company followed the arbitration proceedings it initiated against the Portuguese State in respect of restoration of the financial balance of the Concession as a result of the works it had to execute on the Torres Vedras North / Bombarral stretch, for which the State was liable, under the se- curity for the Construction Contract held by the former JAE. It should be noted that this stretch of the A8 forms part of the so-called A8 South, acquired on the date of execution of the Western Concession Agreement (21 December 1998).
On 13 April 2012, Auto-Estradas do Atlântico – Concessões Rodoviárias de Portugal, SA gave notice to the Grantor to restore the financial balance of the Concession, following the legislative changes which subjected the stretches and substretches of the former shadow toll ("SCUT") concessions (Costa da Prata and Beira Litoral / Beira Alta) to a system of tolls charged to users. In this notice, on the basis of the facts described therein and the contractual provisions, the Company requested the commencement of negoti- ations, submitting the calculations which led to the sum requested to restore the financial balance of the Concession: €398,400,000 (three hundred and ninety eight million four hundred thousand euros).
InIR (Instituto de Infra-Estruturas Rodoviárias, IP) responded to this request on 2 October 2012, denying the Concession any right to restoration of its financial balance.
As a result of this decision, which the Company cannot accept, the file which will support the request
Auto Estradas do Atlântico, SA p. 6
Annual Report 2012 - Management Report for submission of the dispute to an arbitration court is being prepared.
With regard to operations, the level of quality of service to users was maintained and the efficiency of management procedures was improved, both aspects being recognised in the audit reports drawn up by the certifying entity in the context of the Quality Management System.
It should be highlighted that certification of the Quality Management System concerning the operation and maintenance of the A8 and the A15 under a toll system was recently renewed.
Despite the difficulties inherent in the loss of income, throughout 2012 the Company maintained its policy of renovating the pavement and horizontal signage on the older stretches.
In the financial area, it should be noted that the annual debt service cover ratio (ADSCR) laid down in the Facility Agreement was met.
Within APCAP – Associação Portuguesa das Sociedades Concessionárias de Auto-Estradas ou Pontes com Portagens, the Company continued to participate in the Standing Committees that analyse funda- mental issues for the road industry in their respective subject areas: tolls; safety and the environment; and road telematics.
We may therefore conclude that, with the strong commitment of our shareholders, despite the difficul- ties encountered, the robustness of AEA's project maintains the total confidence of all stakeholders in- volved.
We would like to express a word of praise for the professionalism, commitment and dedication of all our employees, as well as our sincere appreciation for the support and cooperation of the Supervisory Board, the Statutory Auditor and the public and financial entities.
Finally, we would like to express our gratitude for the unflinching confidence of our shareholders.
Proposal for the appropriation of profits
It is proposed that the net losses for the year, amounting to €2,507,052.34 (two million five hundred and seven thousand and fifty two euros and thirty four cents), be transferred to profits (losses) brought forward.
Catefica, 22 February 2013
Auto Estradas do Atlântico, SA p. 7
Annual Report 2012
Auto Estradas do Atlântico
Annual Report 2012 - Management Report
FUNCTIONAL ANALYSIS
A) OPERATION AREA
Traffic and Revenues
The table below shows AEA’s main traffic and revenue indicators for 2012. As may be observed, traffic as a whole fell in AEA’s network, due to several factors related to the deterioration in the Portuguese economy, particularly after the introduction of tolls on the shadow toll motorways of the Lisbon / Opor- to littoral corridor.
Stretches with tolls 2011 2012 ∆ % 2012/2011
A8 (South) - Annual average daily traffic (AADT) 26,599 23,667 -11.02% - Circulation 530 473 -10.78%
A8 (North) - Annual average daily traffic (AADT) 10,610 8,861 -16.49% - Circulation 191 160 -16.26%
A8 (Total) - Annual average daily traffic (AADT) 19,013 16,642 -12.47% - Circulation 720 632 -12.23%
A15 - Annual average daily traffic (AADT) 4,854 3,995 -17.70% - Circulation 71 59 -17.48%
Total network - Annual average daily traffic (AADT) 15,059 13,110 -12.94% - Circulation 792 691 -12.70%
1) AADT (vehicles) - Circulation/km/days
2) Circulation - (Σ vehicles x km x days of operation)/106
3) The lengths of substretches where there is local traffic were taken into account
Income (103 €) 2011 2012 ∆ % 2012/2011
Tolls 59,571.91 53,171.91 -10.74% Assistance to users 13.96 12.14 -13.04% Service areas 2,044.08 2,110.97 3.27% Total 61,629.95 55,295.02 -10.28%
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Annual Report 2012 - Management Report
Circulation in the network under concession fell 12.70% compared to the preceding year. The subsys- tem with the highest losses was the A15 (-17.48%), chiefly as a result of the unfavourable economic environment. The A8 South was the subsystem with the lowest losses, as a result of strong commuter traffic (-10.78%). Traffic on the A8 fell by approximately 12.23%.
AADT in the tolled network under concession stood at 13,110 vehicles/day in 2012, which corresponds to a reduction of 12.94% compared to 2011.
Income fell by 10.28% when compared to the figures achieved in the preceding year. The traffic profile changed, with greater losses in long-distance and heavy vehicles.
Toll rates were increased by 4.36% on 1 January 2012, in accordance with the formula laid down in the Concession Agreement and taking into account the amendment resulting from Joint Decree no. 39/2005 (of 17 February) of the Ministry of Finance and the Ministry of Public Works.
VAT remained unchanged at 23% throughout the year.
The most popular means of payment among our customers was Via Verde (68.9%), followed by cash (16.2%) and bank cards (14.7%).
Means of payment Amount %
Via Verde 36,638,255.95 68.9%
Agreements 36,455,910.43 68.6% Invoices 182,345.52 0.3%
Manual lanes 16,533,652.54 31.1% Cash 8,590,292.07 16.2%
Multibanco 7,828,057.02 14.7% Invoices 85,091.07 0.2% Other 30,212.38 0.1%
Total 53,171,908.49 100.0%
If we analyse this behaviour in respect of means of payment, we note that the Via Verde system in- creased once again in percentage terms compared to the preceding years (61.1% in 2010 and 64.8% in 2011), while manual payment methods lost importance. Accordingly, we continue to witness a strong migration from manual lanes to Via Verde lanes.
Revenues from service areas grew by 3.3% compared to 2011. This increase resulted from application of the minimum rent rule (80% of sales in the economic study submitted in the tender). This variable repre-
Auto Estradas do Atlântico, SA p. 10
Annual Report 2012 - Management Report sented 25.4% of total invoicing from service areas.
Revenues from assistance to customers stood at €12,140, which represents a reduction of 13.0% com- pared to the preceding year.
Accidents
Accidents in the Concessionaire's network fell by 13.6% compared to the preceding year. This reduction from the preceding year is chiefly due to the impact of the worsening of the financial crisis in the course of the year, which led to a marked reduction in driving speeds with a view to reducing fuel consump- tion.
It should be noted that the number of accidents with fatalities and the number of fatal victims increased compared to the preceding year, to 3 and 4, respectively, despite the marked reduction in accidents. No objective causes were found for this, since there were no endogenous factors which would have con- tributed to these accidents. It should be further noticed that 3 of the casualties recorded may be related to sudden illness of the driver.
Activity
During 2012, the Operation Division carried out the following activities, among others:
Upon the entry into operation of the Leiria South Motorway Toll Plaza, it monitored the demolition of the Leiria South Interchange Toll Plaza.
In February 2012, APCER's second monitoring audit took place, and AEA's Quality Manage-
Auto Estradas do Atlântico, SA p. 11
Annual Report 2012 - Management Report
ment System certification, obtained in 2010, was maintained, as a result of the work under- taken in all areas of the Company. During 2012, upon the introduction of the "Road Infra- structure Maintenance" process, the Quality Manual was amended and the monitoring of processes was consolidated. Upon the end of the widening works, the indicators of the Op- eration process (unavailability of the motorway and the ratio of third-party liability claims to circulation) stood once again at figures below the reference figures used as limits.
Training sessions on vertical and horizontal signage and safety equipment were held with the Maintenance teams.
The final stage of the widening works from 2 to 3 lanes on the CRIL / Loures and Loures / Malveira substretches was monitored.
The migration of the service provider in the area of cash transportation and processing, in- cluding cash management in the e-toll equipment, was controlled.
The transfer of the operation of the A21 to Estradas de Portugal, SA was monitored.
Some processes pertaining to the analysis of the behaviour of manual lane and remote toll operators were automated.
The monitoring of and adaptation to the successive amendments to Law no. 25/2006 was ensured.
Participation in the specifications of systems to generate SAF-T files.
B) TECHNICAL DIVISION
Widening works
A8 – CRIL / Loures stretch – widening to 2x3 lanes
The supplementary works concerning the Widening Construction Contract for this stretch, awarded to the MSF/LENA/NOVOPCA/SOMAGUE consortium, were completed.
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Annual Report 2012 - Management Report
Relations with the Grantor
Performance bonds/final acceptance
During the year, the dispute submitted to the arbitration court by AEA against the Grantor proceeded, so that its rights be recognised and enforced concerning the consequences of the default under the ob- ligations to AEA assumed by the Grantor in respect of the performance bonds for the Torres Vedras Sul / Bombarral stretch, which has caused significant losses for the Concessionaire, to an amount already in excess of €2,000,000.
Environment
In compliance with the provisions of Decree-Law no. 146/2006, Strategic Noise Charts were drawn up for substretches of the A8 and A15 (substretches with over 3,000,000 vehicles per year).
A further noise barrier (B8) was installed on branch B of the Frielas Interchange.
Conservation and maintenance
In respect of conservation and maintenance works, the following should be highlighted:
On the basis of the outcome of inspections of the structures in AEA's network carried out in 2011, the market was consulted and a contract for repair/maintenance of the expan- sion joints on the A8 and the A15 was awarded. These works should be completed dur- ing the first quarter of 2013.
We inspected the pavements (deflection, attrition, texture and IRI) along the entire length of the network under concession, including interchanges with the road network. On the basis of the results of this campaign, works to improve the pavement on the A8 and the A15 were executed, including strengthening of the pavement structure, surface treat- ment with cold double-layer bituminous mixture and application of traditional bitumi- nous mixtures on the branches of some interchanges.
Various re-profiling and sealing works on cracks in the pavement and correction of minor local defects were also performed.
The inspection works of the vertical signage gantries and semi-gantries were completed
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Annual Report 2012 - Management Report
and loaded in the corresponding database.
The horizontal signage on the A8 between the Malveira Interchange and the Leiria Inter- change (road axes, acceleration lanes, slowdown lanes and slow traffic lanes) was re- painted.
In the light of the defects detected in the roof of the À-dos-Negros Toll Plaza, a project to repair and strengthen its foundations was prepared. After consulting the market, the corresponding contract was awarded and will start in the first quarter of 2013.
Despite the 2011/2012 Winter not having been very harsh, it was necessary to repair various drainage devices and rebuild some motorway slopes, on both the new and the transferred network.
The Concessionaire continues to pay particular attention to the monitoring of motorway slopes with signs of instability, using appropriate equipment. Accordingly, the agreements executed with an external consultant to monitor these cases remained in effect.
The Agreement for Development of the Structure Management System, executed with Betar in 2008, was extended for a further six-year period, its price having being revised downwards. This agreement provides for the maintenance and updating of the Structure Management System software, inspections of the structures in AEA's network, as well as opinions and reports.
C) INFORMATION SYSTEMS
Applications and databases
In respect of applications, in addition to the current maintenance of all existing applications and data- bases, the following activities should be highlighted:
SiDE and AtlanTIS systems
Automation of the Toll Control module: implementation of automations in the transac- tion treatment and correction processes (transit), executed manually until now.
Updating of tolling software: during 2012, four new versions of the SGMP (Sistema de
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Annual Report 2012 - Management Report
Gestão e Monitorização de Portagens, our Toll Management and Monitoring System) were installed in AEA's network. Accordingly, the necessary developments in the SiDE and AtlanTIS applications were carried out over the year, so as to accommodate the changes made to the tolling software.
Migration of information concerning the A21: upon transfer of the operation of the A21 to EP, an application to extract all the existing back office information concerning the Toll Invoicing, Claims and Accidents modules was developed.
Data warehouse/BI
In order to optimise the times to run the monthly processes that calculate traffic and income, we contin- ued the work done last year and achieved very satisfactory results.
With a view to optimising the back-up of the databases of the data warehouse, Oracle's RMAN tool was installed.
Intranet
Expense management: the entire process of checking and approving communication and fuel expenses is now performed in AEA's portal, with no need for any hard copy support.
Business travel management: a new functionality was developed in AEA's portal, which enables the input of business travel using company vehicles with the corresponding ap- proval flow.
Telematics and toll equipment
In telematics, in addition to current maintenance, the following activities stand out:
installation of a new camera covering the entire width of the motorway, which was in- stalled on pk 5+000 in the North/South direction;
activities related to provisional acceptance of the telematics installed during the widening works of the CRIL-Loures stretch: three pairs of SOSs, two variable messaging boards and two traffic counters.
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Annual Report 2012 - Management Report
In respect of toll equipment, the installation of a redundant Toll Operation Centre (TOC) in Tornada, composed of two work stations, stands out. The activities for provisional acceptance of the Leiria Toll Plaza were carried out.
Networks and systems
With regard to networks and systems, 2012 was marked by the Network Equipment Restructuring Pro- ject. This project resulted from the need to renovate some active network devices (switching and rout- ing) in the Torres Vedras and Tornada Data Centres. A new network architecture was defined to achieve the redundancy missing at some critical points, notably in connections to the Traffic Control Centre and the Toll Operation Centre. This project enabled a significant reduction in the maintenance costs of the entire CISCO component, including the devices existing in each toll plaza.
The activities necessary for provisional acceptance of the entire communication component of the CRIL- Loures widening works, as well as the new Leiria Toll Plaza, were also carried out.
Quality Management System
In the context of AEA's Quality Management System (QMS), the Information Systems Department (ISD) carried out the following activities:
development of new functionality in AEA's portal to respond to the needs identified by the Quality Management area;
maintenance of dashboards with the indicators defined in the processes of the Operation Division (OD) and the ISD;
participation in several internal audits, both as audited and auditor.
Easyway Programme
In the context of the activities of the work group of APCAP's Standing Committee 3, the following activi- ties carried out in 2012 in respect of the Easyway Programme should be highlighted:
due support was given to INIR in the context of the Easyway Programme with regard to
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Annual Report 2012 - Management Report
joint decisions and actions in the European Community to defend Portugal’s interests;
participation in the work group created to analyse the guidelines for implementation of road telematics services.
D) ECONOMIC AND FINANCIAL ANALYSIS
Net results
At year-end, the Concessionaire presented net losses amounting to 2,507 thousand euros, reversing the trend in the last two years, in which it had net profits (3,559 thousand euros in 2010 and 1,284 thou- sand euros in 2011).
The following factors chiefly contributed to reversing this trend:
i) With regard to income, services provided stand out. These, amounting to 55.3 million euros, represent a reduction of approximately 6.3 million euros compared to the pre- ceding year. This reduction was essentially due to traffic registered in the network, ad- versely impacting on the corresponding toll income (6.4 million euros less). In respect of operating costs, an improvement compared to the preceding year, of approximately 2.6 million euros, should be noted, in which staff costs, which fell from 7.1 to 5.9 million euros, and third-party supplies and services, which fell by approximately 1.5 million eu- ros, stand out. This combined behaviour of income and costs led to operating results of 40.1 million euros, which represents approximately 3.4 million euros less than in the preceding year.
ii) Other operating accounts
The sums booked as provisions written back (4.7 million euros) stand out. In fact, the operations made in the reserve account associated with the Major Repair Plan (IFRIC12), which was significantly altered in the light of the revised traffic forecasts, which imply the adoption of new technical solutions for its execution and reformulation of previously programmed repairs, resulted in a significant amount written back. In net terms, the aforementioned operations reduced the balance of this reserve account at year-end by approximately 2.7 million euros.
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Annual Report 2012 - Management Report
In respect of sums written back in imparity from clients (141 thousand euros), these are due to stricter criteria in the method for determining bad debts.
A slight decrease in amortisation and depreciation, by some 219.7 thousand euros, should also be mentioned and results from the significant number of fully amortised or depreciated assets. The behaviour of these accounts also contributed to mitigating the impact on results originated by the levels of traffic.
iii) Financial results – Remunerated liabilities fell by approximately 23 million euros, which resulted in a reduction in financial costs and charges and enabled an improvement in these results compared to 2011, by around 1.6 million euros, despite the negative evo- lution of interest earned stemming from changes to interest rates and a decrease in the amounts invested.
iv) Income tax for the year – In accordance with the tax legislation, the Company calculates its income tax on the basis of its taxable profits and, naturally, takes deferred taxation into account. The sum calculated, amounting to 3,768.9 thousand euros, is chiefly due to deferred tax assets written back, concerning non-recoverable tax losses from prior years (3,625.7 thousand euros), aggravated by the balance of taxes resulting from op- erations in the major repairs reserve account (473.5 thousand euros) and mitigated by deferred taxes for the year (470 thousand euros).
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Annual Report 2012 - Management Report
The following table shows the evolution of the main indicators for 2012 and 2011:
( 10^6 euros) Indicators 2012 2011
Operating Income 56,9 62,9 Toll Income 53,2 59,6 Other Operating Income 3,7 3,3 Operating Costs 16,8 19,4
Third-party supplies end costs 10,6 12,1 Staff costs 5,9 7,1 Other Operating costs 0,3 0,2 Operating cash-flow (EBITDA) 40,1 43,5 EBITDA margin (%) 70,6% 69,1%
Amortisation and depreciation 22,5 22,7 Net imparity losses -0,1 0,2 IFRIC12 (major repairs, net) -2,8 -7,7 Operating profit (loss) (EBIT) 20,5 28,3 EBIT margin (%) 36,1% 45,0%
Financial profits (losses) (19,3) (20,8) Profit (loss) before taxes 1,3 7,4 Income taxes (3,8) (6,2) Net profit (loss) (2,5) 1,3
Asset cover (units) 1,01 1,03 Equity/total assests (units) (a) 0,16 0,14
(a) Considering shareholders' loans as equity, given their nature
The following should be mentioned:
Income from the service area subconcessions, 2,110.9 thousand euros, which evolved positively (3.3%), and sums booked under other income and gains, 1,603.6 thousand euros, chiefly relating to fines and recovery of overdue credits (default by customers – 550 thousand euros) and compensation received from insurance companies for damage caused to the motorway by third parties (969.4 thousand euros), contributed to operating income.
With regard to operating costs by main nature of expense, these fell by approximately 3,031.8 thousand euros (-7.4%), as explained in the table below:
(10^3 Euros)
Operating Costs 2012 2011 Variation % var.
Third-party supplies end services 10.558,1 12.067,5 -1.509,4 -12,5% Staff costs 5.857,3 7.147,9 -1.290,6 -18,1% Depreciation and amortisation 22.490,2 22.709,9 -219,7 -1,0% Allowances for provisions (IFRIC 12) 1.789,8 1.775,8 14,1 0,8% Imparity losses 60,1 222,0 -161,9 -72,9% Other operating costs 335,4 199,7 135,7 67,9% Total 41.091,0 44.122,9 -3.031,8 -6,9%
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Annual Report 2012 - Management Report
For the most significant changes, the following should be noted:
Third-party supplies and services – the behaviour of this heading is explained by the significant reduction in transaction processing costs (293 thousand euros), maintenance and repair costs (721.7 thousand euros) and fees and specialist works (around 767 thousand euros).
With regard to staff costs, the change chiefly relates to the fact that in 2011, as a result of the incentives created by the Company in the context of the e-toll project, there were some mutually agreed termina- tions of employment contracts, which led to a reduction in staff numbers (37 fewer employees), which was accompanied by severance payments (approximately 869 thousand euros).
The reduction in amortisation and depreciation results from the significant number of fixed assets which, from 2011 and throughout 2012, were fully amortised or depreciated.
Assets
Net fixed assets fell by approximately 22,337 thousand euros, as a result of an increase in gross assets by some 287 thousand euros, write-offs amounting to approximately 957.2 thousand euros and depre- ciation and amortisation amounting to approximately 22,490 thousand euros (net of transfers and write -offs).
The evolution of net fixed assets clearly reflects the strong capital expenditure incurred until completion of the entire network under concession in 2002 and its natural reduction in subsequent years.
As to the significant sum (38,699.2 thousand euros) booked under cash and bank deposits, it should be noted that the Finance Agreements oblige the Company to fund both investment and debt service re- serve accounts, which had the following balances as at 31.12.2012:
Bank Debt Service Reserve Account: 9,894,243 euros
EIB Debt Service Reserve Account: 10,410,667 euros
Investment Reserve Account: 13,819,514 euros
Other: 956 euros
The sum booked under other accounts receivable, amounting to 2,402.5 thousand euros, corresponds essentially to sundry debts of various entities, among which the service areas (690.2 thousand euros)
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Annual Report 2012 - Management Report and Estradas de Portugal, SA (623.8 thousand euros) stand out.
Finally, a word concerning deferred tax assets, in which 5,773.1 thousand euros is booked, which repre- sents a reduction of approximately 4,160.7 thousand euros compared to 2011, of which 3,625.7 thou- sand euros concerns deferred taxes from 2006 to 2009 that the Company no longer expects to be able to recover.
Shareholders' equity and liability
The net losses for the year – 2,507.1 thousand euros – caused equity to worsen from minus 50,884.3 thousand euros on 31.12.11 to minus 53,394.3 thousand euros on 31.12.12.
At year-end, liabilities stood at 435,829.2 thousand euros, of which 405,436.1 thousand euros (93.1%) corresponds to remunerated liabilities, which evolved during the year as follows:
(10^3 Euros) On Movements in On Remunerated Debt 31/12/2011 2012 31/12/2012 E.I.B.– Facility 150.947,6 (12.857,0) 138.090,6
Commercial Banks Facility 102.452,7 (17.555,4) 84.897,3
Subordinated Debt 47.500,0 - 47.500,0
Stand-by Facility 24.147,2 4.181,6 28.328,8
Total Bank Debt 325.047,6 (26.230,9) 298.816,7
Shareholders' Loans 101.728,3 3.496,4 105.224,7
Shareholders 101.728,3 3.496,4 105.224,7
Other * 1.652,2 (257,5) 1.394,7
Total 428.428,1 (22.992,0) 405.436,1 * Concerns toll equipment acquired under a leasing agreement
In the above table, short-term bank loans are as follows:
EIB Facility: 12,825.5 thousand euros;
Commercial Banks: 18,365.6 thousand euros.
The following should be noted in respect of the facilities evidenced in the table above:
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Annual Report 2012 - Management Report
- The Stand-by Facility will mature in December 2019, and its limit may go up to 46.2 million euros, in order to:
i) support financial costs resulting from the extension in question;
ii) accommodate any excess Subordinated Debt used; iii) provide for unexpected fluctuations in the interest rate (EURIBOR);
- Subordinated Debt will mature on 31 December 2018.
The current scheme of – irrevocable and unconditional – shareholders' guarantees created in the context of the current Stand-by Facility is maintained, as well as their increase up to the maximum revised amount of the facility, i.e. 46.2 million euros.
In the terms of the Equity Subscription Agreement, interest capitalised under shareholders’ loans during the year totalled 3,496.4 thousand euros.
Of the 6,070.9 thousand euros booked under other accounts payable, the following headings stand out: suppliers of fixed assets, amounting to 3,089.8 thousand euros; creditors for accrued costs (1,684.5 thousand euros), in which accrued technical costs (subcontracts and specialist works – 994.8 thousand euros) stand out; staff costs (678.7 thousand euros), almost entirely related to holiday pay and holiday allowances concerning 2012 and payable in 2013; and the adjustments resulting from joint operations payable to Brisal (617.4 thousand euros).
The sum booked under deferrals, totalling 6,113.3 thousand euros and broken down into current and non-current, chiefly concerns the balance of sums received in the context of subconcession of the Torres Vedras, Óbidos, Rio Maior and Nazaré service areas.
Capital Expenditure
Capital expenditure reached 287 thousand euros in 2012 and was almost entirely directed towards toll equipment and support to operations.
This sum is broken down as follows:
Nature 10^3 euros Toll equipment 115.3 Other equipment to support operations 100.3 Capex on current tangible fixed assets 71.4 Total 287.0
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Annual Report 2012 - Management Report
It should be noted that the widening of the CRIL / Loures stretch was carried out on behalf of the State and, accordingly, the sum spent does not appear in the above table.
E) HUMAN RESOURCES AND ADMINISTRATIVE AREA
A. Human resource management
At the end of 2012, AEA's permanent staff stood at 185 employees, 1 employee more than in 2011 (transfer from GEIRA).
Evolution of Staff
2010 2011 2012 Men 144 126 126 Women 77 58 59
Total on 31 Dec. 221 184 185
Average staff 228 201 184
The overall structure of AEA’s human re- sources remained similar to that in the pre- ceding year.
Education
2010 2011 2012 Basic 3 1 1 2nd cycle 7 4 4 3rd cycle 73 60 58 Secondary 106 93 93 Higher 32 26 29 Total 221 184 185
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Annual Report 2012 - Management Report
Age Structure
2010 2011 2012 25 – 34 69 47 34 35 – 44 111 99 108 45 – 54 34 32 37
+ 55 7 6 6 Total 221 184 185
Average age 39.0 39.7 40.7
Turnover
The overall turnover ratio of 0.27 chiefly re- 2010 2011 2012 flects the virtual absence of admissions and Admissions 2 2 1 resignations. The admission that occurred re- Resignations 20 39 0 sults from the transfer of a toll operator from Admission ratio 0.88 0.99 0.54 GEIRA to AEA, in the context of prolonged Resignation ratio 8.77 19.31 0.00 sickness leave and who, accordingly, could not be included in the non-remunerated leave
scheme applying to GEIRA's employees work- Overall ratio 4.82 10.15 0.27 ing in Estradas de Portugal.
Absenteeism
Long-term absenteeism fell significantly in 2010 2011 2012 2012 compared to 2011, with the resulting
Short-term absenteeism impact on the overall absenteeism rate, which 1.9% 1.6% 1.5% Rate fell from 5% to 3.6%. This reduction results Long-term absenteeism from a substantial decrease in long-term leave 3.5% 3.4% 2.0% Rate (longer than 1 month).
Remunerated absenteeism 0.7% 0.6% 0.6% rate Non-remunerated absenteeism 4.7% 4.43% 3.0% rate
Overall absenteeism 5.4% 5.0% 3.6% rate
Auto Estradas do Atlântico, SA p. 24
Annual Report 2012 - Management Report
Labour relations
The Collective Labour Agreement entered into by and between AEA and GEIRA and Setaccop – Sindicato da Construção, Obras Públicas e Serviços Afins (the Construction, Public Works and Related Services Un- ion) was negotiated and revised once again, executed and sent to the Ministry of Labour and Social Se- curity for deposit and publication.
Automated Lane Toll Operators
The creation of a new professional category, and its corresponding career and framework, called Auto- mated Toll Lane Operator, was negotiated with Setaccop – Sindicato da Construção, Obras Públicas e Serviços Afins, in the context of the Joint Committee foreseen in the Collective Labour Agreement. This new category consolidates the e-toll collection model in HR terms and will be applied from 1 January 2013 to all employees selected to operate e-tolls.
Professional training
In 2012, a total of 3,407 hours of training, involving 71 trainees, were given.
Among training sessions completed or in progress, we would like to highlight the English learning pro- gramme for operators of the Traffic Control Centre and the Toll Operation Centre, which was extended to staff of the Customers and Tolls area and involved 43 trainees and approximately 3,000 hours of training, between classroom and online training.
Health and safety at work
Maintaining its standards well above the minimum required under the law in respect of occupational medicine, 190 medical consultations (including ECGs) were held, including regular consultations, con- sultations following return from medical leave and pursuant to indications by occupational health doc- tors. 172 sets of laboratory tests were also performed.
In the context of curative medicine, 97 general practice consultations were held. Also in the context of health, and with particular regard to prevention, anti-flu vaccines were supplied and/or administered to 112 employees.
Auto Estradas do Atlântico, SA p. 25
Annual Report 2012 - Management Report
B. Administrative management
In respect of the procurement of goods and services for the Company, as well as the management of agreements entrusted to this area, we would like to highlight the following:
Vehicles
As at 31 December 2012, Auto-Estradas do Atlântico’s fleet was composed of 44 vehicles, 43 under operational leases and one owned by the Company (a heavy vehicle allocated to the AMC’s maintenance area). During 2012, 22 fleet vehicles were returned, and 15 fleet vehicles were received.
Correspondence
In 2012, 10,455 letters/packages were received by Auto-Estradas do Atlântico and 16,417 letters/ packages were sent.
Accounting records
During the year, 1,582 invoices/credit advices/debit advices, representing approximately 57% of all docu- ments of this nature received by Auto-Estradas do Atlântico, were processed by the Administrative Area for verification and approval.
Auto Estradas do Atlântico, SA p. 26
Annual Report 2012
Auto Estradas do Atlântico
Annual Report 2012 - Financial Statements
BALANCE SHEETS AS OF DECEMBER 31, 2012 AND 2011
(Amounts expressed in Euros)
(Translated from the Portuguese original – Note 27)
ASSETS Notes 31.12.2012 31.12.2011
NON-CURRENT ASSETS Tangible fixed assets 7 15.200.452 17.801.021 Intangible assets 8 314.569.800 334.306.418 Deferred tax assets 10 5.773.120 9.933.824 Total non-current assets 335.543.372 362.041.263
CURRENT ASSETS Trade receivables 13 3.584.325 2.789.281 State and other public entities 14 1.838.202 971.248 Other receivables 11 2.402.472 1.923.736 Deferrals 12 343.359 358.803 Cash and bank deposits 4 38.699.178 40.685.220 Total current assets 46.867.536 46.728.288 Total assets 382.410.908 408.769.551
SHAREHOLDERS` EQUITY AND LIABILITIES
SHAREHOLDERS` EQUITY Share capital 15 55.000.000 55.000.000 Legal reserve 15 82.302 82.302 Other reserves 17.408 17.408 Accumulated losses (105.994.294) (107.277.923) Other changes in shareholders' capital 15 7.376 10.286 (50.887.208) (52.167.927)
Net profit/(loss) for the year (2.507.052) 1.283.629
Total shareholders' equity (53.394.260) (50.884.298)
LIABILITIES NON-CURRENT LIABILITIES: Provisions 16 11.181.972 14.480.176 Loans 9, 18 373.994.321 398.184.367 Deferred tax liabilities 10 916.976 1.375.464 Deferrals 12 5.239.381 - Total non-current liabilities 391.332.650 414.040.007
CURRENT LIABILITIES: Provisions 16 562.516 - Suppliers 3.131.762 3.577.357 State and other public entities 14 2.391.562 1.834.362 Loans 9, 18 31.441.823 30.243.777 Other payables 19 6.070.922 6.664.610 Deferrals 12 873.933 3.293.736 Total current liabilities 44.472.518 45.613.842 Total liabilities 435.805.168 459.653.850
Total shareholders' equity and liabilities 382.410.908 408.769.551
The accompanying notes form an integral part of the balance sheet as of December 31, 2012.
Auto Estradas do Atlântico, SA p. 28
Annual Report 2012 - Financial Statements
STATEMENTS OF PROFIT AND LOSS BY NATURE
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(Amounts expressed in Euros)
(Translated from the Portuguese original – Note 27)
EARNINGS AND LOSSES Notes 31.12.2012 31.12.2011
Sales and services rendered 20 55.295.010 61.629.955 Revenue associated with construction services - 611.406 Supplies and services 21 (10.558.092) (12.067.489) Payroll expenses 22 (5.857.295) (7.147.924) Impairment in accounts receivable 13 80.635 (183.543) Provisions (increase/reduction) 16 2.794.610 7.692.078 Expenses associated with construction services - (611.406) Other operating income 24 1.603.554 1.263.689 Other operating expenses 25 (335.423) (199.721)
Net profit before depreciation, financial exprenses and taxes 43.022.999 50.987.045
Amortization and depreciation 7 and 8 (22.490.241) (22.709.927)
Operating profit (before income taxes) 20.532.758 28.277.118
Financial income 23 679.558 743.958 Financial expenses 23 (19.950.481) (21.581.075)
Net profit before tax 1.261.835 7.440.001
Corporate income tax for the year 10 (3.768.887) (6.156.372) Net profit/(loss) for the year (2.507.052) 1.283.629
Net income per share 26 (0,23) 0,12
The accompanying notes form an integral part of the statement of profit and loss by nature for the year ended December 31, 2012.
Auto Estradas do Atlântico, SA p. 29
Annual Report 2012 - Financial Statements
- -
(2.910)
(10.134)
1.283.629 1.283.629
Total
(2.507.052)
(52.157.793) (50.884.298) (53.394.260)
- -
Net
3.558.986 3.558.986 1.283.629 1.283.629
(3.558.986) (1.283.629) (2.507.052) (2.507.052)
2012.
profit / (loss) profit
31,
- - - -
7.376 7.376
20.420 20.420 10.286
(2.910)
(10.134)
Other Other
capital
changes in changes
shareholders'
- - - -
3.558.986 1.283.629
losses
(110.836.909) (107.277.923) (105.994.294)
Accumulated Accumulated
Note 27) Note
–
------
17.408 17.408 17.408 17.408
Other Other
reserves
------
82.302 82.302 82.302 82.302
Legal
reserve
(Amounts expressed in Euros) in expressed (Amounts
------
(Translated from the Portuguese original original Portuguese the from (Translated
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY SHAREHOLDERS' IN CHANGES OF STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 AND 2012 31, DECEMBER ENDED YEARS THE FOR
55.000.000 55.000.000 55.000.000 55.000.000
Share
capital
15 15 15 15 15
Notes
The accompanying notes form an integral part of the statement of changes in shareholders' equity for the year ended December December ended year the for equity shareholders' in changes of statement the of part integral an form notes accompanying The
Transfer to accumulated losses to accumulated Transfer losses to accumulated Transfer
Amortization of subsidy Amortization of subsidy Amortization
year: the in occurred Changes year the for profit Net year: the in occurred Changes year the for Net loss
Appropriation of 2010 results: 2010 of Appropriation results: 2011 of Appropriation
Balance at 31 December 2010 at 31 December Balance 2011 at 31 December Balance 2012 at 31 December Balance
Auto Estradas do Atlântico, SA p. 30
Annual Report 2012 - Financial Statements
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(Amounts expressed in Euros)
(Translated from the Portuguese original – Note 27)
Notes 31.12.2012 31.12.2011
OPERATING ACTIVITIES: Received from clients 70.473.633 75.701.282 Paid to suppliers (14.109.117) (13.001.162) Paid to employees (5.082.976) (5.242.444) Net cash from operations 51.281.540 57.457.675 Income tax received/(paid) 112.317 (180.360) Other payments relating to operating activities (9.542.691) (10.204.363) Net cash provided by operating activities (1) 41.851.166 47.072.952
INVESTING ACTIVITIES: Receipts relating to: Interest and similar income 715.760 722.504
Payments relating to: Intangible and tangible fixed assets (2.104.016) (5.910.257) Net cash used by investing activities (2) (1.388.256) (5.187.753)
FINANCING ACTIVITIES: Receipts relating to: Other financial income 109 501 109 501 Payments relating to: Loans (30.222.340) (29.229.697) Interest and similar expenses (9.676.699) (11.254.665) Bank guarantees comissions (1.863.339) (2.033.259) Other financial expenses (370.035) (220.192) Expenses with lease contracts (316.648) 225.142 (42.449.061) (42.512.671) Net cash used by financing activities (3) (42.448.951) (42.512.169)
Variation in reserve accounts (4) 4 (827.750) 1.486.640 Variation of cash and cash equivalents (5) = (1) + (2) + (3) + (4) (1.158.292) (2.113.610) Cash and cash equivalents at the beginning of the year 4 5.732.090 7.845.700 Cash and cash equivalents at the end of the year 4 4.573.798 5.732.090
The accompanying notes form an integral part of the statement of cash flows for the year ended December 31, 2012.
Auto Estradas do Atlântico, SA p. 31
Annual Report 2012
Auto Estradas do Atlântico, SA
Annual Report 2012 - Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS AS OF 31 DECEMBER 2012
(Amounts expressed in Euroas—Translation of Notes originally issued in Portuguese—Note 27)
1. INTRODUCTORY NOTE
Auto-Estradas do Atlântico – Concessões Rodoviárias de Portugal, S.A. (”the Company” or “the Concessionaire”) was founded on 4 November 1998, has its head office in Torres Vedras and its corporate object consists on the conception, construction, financing, operation and maintenance of motorways and other roads in western Portugal. In accordance with its articles of association the Company will exist during the period of its concession.
The bases of the Company’s concession for the stretches of motorway and related roads in west- ern Portugal were approved by Decree-Law 393-A/98 of 4 December and the Company signed a concession contract with the Portuguese State on December 21, 1998. The concession is in force from midnight, December 21, 1998 to midnight, December 21, 2028 and establishes the form and conditions for early expiry of the contract, as well as the guarantees that remain in force af- terwards.
On the beginning date of the contract the stretches of motorway and related equipment and installations, among others, as well as personnel and guarantees relating to the stretches already constructed were transferred to the Company. For such transfer the Company paid 88,536,627 Euros (Note 8).
On October 9, 2001 the A8 motorway stretch between Caldas da Rainha and Marinha Grande (East) and the whole A15 motorway – Caldas da Rainha/Santarém began operating. The last stretch of motorway (Marinha Grande (East)/Leiria) began operating on March 28, 2002, thus been completed all the stretches included in the concession (Note 8).
Powers to monitor the Company’s compliance with the obligations arising from the concession contract have been given to the Ministry of Finance in the financial area and to the Ministry of Equipment, Planning and Administration of the Territory in the remaining areas.
These financial statements were approved by the Board of Directors meeting held on 25 February 2013.
It is the Board of Directors understandig that these financial statements present a true and fair
Auto Estradas do Atlântico, SA p. 33
Annual Report 2012 - Notes to the Financial Statements view of the financial position of the Company and the results of its operations, its changes in shareholders’ equity and its cash flows.
2. ACCOUNTING REFERENCE FOR THE PREPARATION OF FINANCIAL STATE- MENTS
The accompanying financial statements have been prepared in compliance with the provisions in force in Portugal, in accordance with Decree-Law 158/2009 of 13 July, and the conceptual struc- ture, accounting and financial reporting standards (Normas Contabilísticas e de Relato Financeiro - “NCRF”) and related interpretation standards (“IS”) consigned, respectively, in Notices 15652/2009, 15655/2009 and 15653/2009 of 27 August 2009, which together make up the Por- tuguese Accounting Standards System (“Sistema de Normalização Contabilística” or “SNC”). The- se standards and interpretations are hereinafter referred to generally as “NCRF”.
The SNC establishes that whenever the NCRF do not cover the needs of users in terms of the ac- counting treatment of certain situations, they must use the IFRS as endorsed by the European Union and, subsequently, other IFRS not adopted by the European Union.
In this respect, in the case of the concession of public services in general and in the case of the Company in particular, the interpretation of the International Accounting Standards Board – (“IASB”) relating to this matter, included in IFRIC 12 – Public Service Concession Con- tracts, is deemed applicable (“IFRIC 12”).
3. BASES OF PRESENTATION
The principal accounting policies used in the preparation of the financial statements are as follows:
3.1. Bases of presentation
The financial statements were prepared on a going concern basis as from the Company’s accounting records, in accordance with the principles defined in the NCRF, completed by International Financial Reporting Standards.
3.2. Reversible tangible fixed assets
In accordance with the current concession contract, assets directly related to the conceded
Auto Estradas do Atlântico, SA p. 34
Annual Report 2012 - Notes to the Financial Statements
activity revert, with no compensation, to the State at the end of the concession contract. These assets are subject to the public domain regime and relate to the activity, being freely managed, within this scope, but not to what concerns private legal commerce.
Revertible tangible fixed assets are originally recorded at construction or acquisition cost, including expenses attributable during the construction period.
Revertible tangible fixed assets are depreciated using the straight-line method over its esti- mated useful life, as follows, limited by the period of concession contract:
Years of Useful life
Buildings and other constructions 10 - 28 Transport equipment 4 Tools and utensils 4 - 8 Administrative equipment 3 – 10
Costs of maintenance and repair (subsequent expenditure) that are not likely to generate future economic benefits are recorded as expenses in the period they are incurred.
The gain (or loss) on disposal or write-off of a plant and equipment is determined as the difference between the amount received in the transaction and the net accounting value of the asset and is recognized in the period in which the sale occurs.
3.3. Non-reversible tangible fixed assets
Non-reversible tangible fixed assets are recorded at acquisition cost including expenses at- tributable to their acquisition.
Depreciations are recognised on a straight-line basis over an estimated useful life, as in the case of revertible tangible fixed assets.
3.4. Intangible assets
Intangible assets include costs incurred with specific projects of future economic value, and are recorded at cost less accumulated amortization and impairment losses.
Auto Estradas do Atlântico, SA p. 35
Annual Report 2012 - Notes to the Financial Statements
Amortizations are recognised on a straight-line basis during their estimated useful lifes.
In particular, concerning the concession right, that corresponds to amounts paid to the grantor, plus expenses incurred directly with the infrastructure construction, its amortization is made until the end of the concession contract.
3.5. Impairment of non-current assets
Impairment assessments are made as of the balance sheet date and whenever an event or change in circumstances is identified that indicates that the book value of an asset may not be recovered. Where such indications exist, the Company determines the recoverable value of the asset, so as to determine the possible extent of the impairment loss. In situations in which the individual asset does not generate cash flows independently of other assets, the estimated recoverable value is determined for the smaller cash generating unit to which the asset belongs.
The recoverable amount is the highest between (i) the fair value less costs to sell and (ii) the value in use of the asset. In determining value in use, the estimated future cash flows are discounted using a pre-tax discount rate that reflect market expectations as to the time value of money and the asset specific risks or cash-generating unit for which estimates of future cash flows have not been adjusted.
Whenever the book value of an asset exceeds its recoverable amount, an impairment loss is recognised. The impairment loss is immediately booked in the statement of profit and loss.
Impairment losses recognised in prior years are reversed when there is evidence that such losses no longer exist or have decreased. Impairment losses are reversed through the state- ment of profit and loss. However, impairment losses are reversed only up to the amount that would have been recognised (net of amortization and depreciation) if the impairment loss had not been recorded in previous years.
3.6. Leases
Lease contracts are classified as: (i) financial leases, if through them, substantially all the risks and benefits relating to their ownership are transferred; and (ii) operational leases, if through them, substantially all the risks and benefits relating to their ownership are not transferred.
Auto Estradas do Atlântico, SA p. 36
Annual Report 2012 - Notes to the Financial Statements
Classification of financial and operational leases is made based on the substance and not on the form of the contract.
Fixed assets acquired under financial lease contracts and the corresponding liabilities are rec- ognised in accordance with the financial method, booking the tangible fixed assets, its accu- mulated depreciation and the liabilities pending settlement being recognized in accordance with the contractual financial plan. In addition, interest included in the lease installments and depreciation of the tangible fixed assets are recognized as costs in the statement of profit and loss for the period to which they relate.
In the case of leases considered as operational, the lease installements are recognized as costs in the statement of profit and loss on a straight-line basis over the period of the lease contract.
Contingent lease installments are recognised as losses in the period that they occurred.
3.7. Subsidies
State subsidies are recognized at their fair value when there is reasonable certainty that they will be received and the Company will comply with the conditions required for their conces- sion.
Investment subsidies relating to the acquisition of tangible fixed assets are considered as equity and amortized on a consistent basis with the depreciation of the respective assets acquired.
3.8. Provisions, contingent liabilities and assets
Provisions are recognised when, and only when, the Company has a legal or implicit obliga- tion resulting from a past event, under which it is probable that an outflow of resources to resolve the obligation will occur, and the amount of the obligation can be reasonably esti- mated.
The recognised provision is the best estimate of the present value, at each balance sheet date, of the needed resources to resolve the obligation. Such estimate is determined consid- ering the risks and uncertainties related with the obligation.
Auto Estradas do Atlântico, SA p. 37
Annual Report 2012 - Notes to the Financial Statements
In particular, provisions are recognised to ensure the contractual obligation to maintain or restore infrastructure to a specified service level based on the upcoming related plans to re- paving.
The present obligations resulting from onerous contracts are recognised and measured as provisions. There is an onerous contract when the Company is part of an agreement, where costs that cannot be avoided exceed the economic benefits obtained with it.
At each balance sheet date, provisions are reviewed and adjusted to reflect the best estimate as of that date.
Contingent liabilities are not recognised in the financial statements, being disclosed whenev- er the possibility of an outflow of resources covering economic benefits is not remote. Con- tingent assets are not recognized in the financial statements, being disclosed when it is probable that an future economic inflow will occur.
3.9. Financial assets and liabilities
Financial assets and liabilities are recognised when the Company becomes part of a contrac- tual relationship.
Financial assets and liabilities at cost or at amortized cost
The financial assets and liabilities are measured at cost or at amortized cost less impairment losses when:
- The maturity is defined;
- They have a fix or determinate repayment; and
- Do not constitute or incorporate a financial instrument.
The amortized cost is the amount at which a financial asset or financial liability is measured at initial recognition, less principal repayments and plus or minus a cumulative amortization, using the effective interest method, of any difference between the original amount and the amount at maturity. The effective interest rate is the rate that discounts the estimated cash flows in the financial instrument booked net carrying amount.
Auto Estradas do Atlântico, SA p. 38
Annual Report 2012 - Notes to the Financial Statements
The assets and liabilities at cost or at amortized cost losses include:
- Trade receivables;
- Other receivables;
- Suppliers;
- Other payables;
- Loans.
Cash and cash equivalents
The caption “Cash and cash equivalents” includes cash, bank deposits, term deposits and other treasury applications which mature in less than three months and can be demanded immediately with insignificant risk of change in its amount.
Impairment of financial assets
Financial assets classified in the category "at cost or amortized cost" are tested for impair- ment at each reporting date. Such financial assets are impaired when there is objective evi- dence that, as a result of one or more events after initial recognition, their estimated future cash flows are affected negatively.
For financial assets measured at amortized cost, the impairment loss recognised correspond to the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the respective original effective interest rate.
For financial assets measured at cost, the impairment loss recognised corresponds to the difference between the asset's carrying amount and the best estimate of the fair value of the asset.
Impairment losses are recognized in the statement of profit and loss in the period in which they are determined.
Subsequently, if the amount of the impairment loss decreases and such a reduction can be objectively related to an event that took place after the recognition of loss, it must be re- versed by results. The reversal shall be effected within the limits of the amount that would be recognized (amortized cost) if the loss had not been initially registered. Reversal of im-
Auto Estradas do Atlântico, SA p. 39
Annual Report 2012 - Notes to the Financial Statements
pairment losses are recognized in the statement of profit and loss.
Derecognition of financial assets and liabilities
The Company derecognizes financial assets only when the contractual rights to receive the cash flows expire, or when the financial assets and the risks and rewards of its ownership are transferred to other entity. The Company derecognizes the financial assets transferred when the transfer of control occurs, even if some significant risks and rewards were not transfered.
The Company derecognizes financial liabilities only when the corresponding obligation speci- fied in the contract is either discharged, cancelled or expires.
3.10. Revenue and accrual basis
Revenue from services rendered is recognized in the statement of profit and loss based on the stage of completion of the services as of the date of the balance sheet.
For construction contracts where the outcome can be estimated reliably, revenue and costs are recognized by reference to the stage of completion of the contract at the end of the re- porting period. The stage of completion is measured based on the stage of realization of the construction work in the infrastructure. When the outcome of a construction contract can- not be reliably estimated, revenue is recognized to the extent of contract costs incurred that are probable to be recovered. Contracts costs are recognized as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total con- tract revenue, the expected loss is recognized as an expense immediately.
Interest and financial income are recognized on an accrual basis in accordance with the ap- plicable effective interest rate.
Costs and income are recognized in the period to which they relate, independently of the date they are paid or received. Costs and income, for which the actual amount is not known, are estimated.
Costs and income applicable to the current period, for which the costs and income will only be paid or received in future periods, as well as costs and income which have already oc- curred, but correspond to future periods and will be allocated to the results of each of those
Auto Estradas do Atlântico, SA p. 40
Annual Report 2012 - Notes to the Financial Statements
periods by the corresponding amounts, are recorded as assets or liabilities.
3.11. Income tax
Income tax for the period is calculated based on the Company’s taxable results, considering deferred tax.
Current income tax for the period is calculated based on the taxable results (which differ from the accounting results) of the Company in accordance with the tax rules in force.
Deferred taxes correspond to the temporary differences between the amounts of assets and liabilities for accounting and for tax purposes, as well as those resulting from tax benefits obtained and temporary differences between the tax and accounting results.
Deferred tax assets and liabilities are calculated and periodically assessed using the tax rates expected to be in force on the date the temporary differences reverse.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recorded only when there is reasonable expectation of sufficient future taxable income to use them. Temporary differences underlying deferred tax assets are reviewed at each reporting date in order to recognise or adjust them based on the current expectation of their future recovery.
3.12. Financing costs
Loans related costs are recognised in the statement of profit and loss for the period to which they relate.
Financing costs directly related to assets that take a substantial period of time to be complet- ed (including intangible and tangible fixed assets), are capitalised as part of the asset’s cost.
3.13. Critical judgements/estimates in applying the accounting standards
Preparing the financial statements involves making judgements, estimates and assumptions that can affect the value of assets and liabilities, as well as of earnings and losses.
Auto Estradas do Atlântico, SA p. 41
Annual Report 2012 - Notes to the Financial Statements
These estimates are based on the best knowledge available at the time and on the actions planned. Changes in the facts and circumstances can result in a prospective revision of such estimates, and so the actual future results of such transactions can differ from such esti- mates.
The main judgements and estimates made by the Board of Directors when preparing the financial statements were as follows:
- Impairment of non-current assets
The determination of impairment losses can be triggered by several events, including events outside the Company’s influence, such as future financing availability, cost of capi- tal or any other internal or external changes. The identification of the impairment indica- tors and the determination of the assets’ recoverable amounts imply a high degree of judgement by the Board of Directors to what concerns identifying and evaluating those indicators, such as expected cash flows, applicable discount rates, useful lifes and trans- actions’ amounts.
- Useful life of tangible fixed assets
The useful life of an asset is the period during which the Company expects that asset to be available for use and should be revised at the end of each reporting period. The deter- mination of useful lifes, the depreciation method and the estimated losses arising due to the replacement of equipment’s before the end of the useful life justified by technologic obsolescence or other reasons, is essential to determine the value of depreciation to rec- ognize on the statement of profit and losses for the year. These parameters are defined according to the best management’s estimate, for the referred assets.
- Recognition of deferred tax assets
Deferred tax assets are recorded only when there is reasonable expectation of sufficient future taxable income to use the temporary differences, or when deferred tax liabilities whose reversion would be expected to be used in the same period exist. The assessment of deferred tax assets is done by the Board of Directors at each reporting period, consid- ering future performance expected.
Auto Estradas do Atlântico, SA p. 42
Annual Report 2012 - Notes to the Financial Statements
- Provisions
Provisions, in particular the ones related with a contractual obligation in maintaining or replacing the infrastructure at a specific level, have programmed plans of intervention. The moment and cost of those estimated interventions incorporate a level of uncertainty. The change on considered assumptions and the occurrence of certain events may lead to sig- nificant adjustments in the provision.
3.14. Subsequent events
Events that occur after the balance sheet date that provide additional information on condi- tions that existed as of that date (“adjustable events”) are reflected in the financial state- ments. Events that occur after the balance sheet date that provide information on conditions that exist after that date (“non-adjustable events”), if material, are disclosed in the notes to the financial statements.
4. CASH FLOWS
The caption “Cash and cash equivalents” includes cash, bank deposits immediately available and other short-term debt equivalents.
As of December 31, 2012 and 2011, this caption was made up as follows:
31-12-2012 31-12-2011
Cash 372.825 374.325 Bank deposits 4.200.973 5.357.765 4.573.798 5.732.090
Reserve accounts Current deposits 272.337 6.200 Term deposits 33.853.043 34.949.930 34.125.380 34.956.130 38.699.178 40.688.220 Cash and bank deposits
Bank deposits bear interests at normal market rates for similar operations.
Bank deposits related to reserve accounts are required under the financial contracts terms, which establish that sufficient funds must be kept in bank deposits to cover the next debt service maturity
Auto Estradas do Atlântico, SA p. 43
Annual Report 2012 - Notes to the Financial Statements
(Note 18) and other investment obligations and bear interests at normal market values.
These reserve accounts, include the following amounts:
31-12-2012 31-12-2011 Demand dep. Term deposits Total Demand dep. Term deposits Total
Reserve for debt service - comercial banks - 9.894.243 9.894.243 154 10.286.560 10.286.714 Reserve for debt service - EIB 167 10.410.500 10.410.667 159 10.885.370 10.885.529
Reserve for investment 271.214 13.548.300 13.819.514 4.933 13.775.000 13.779.933 Others 956 - 956 954 - 954
272.337 33.853.043 34.125.380 6.200 34.946.930 34.953.130
5. ACCOUNTING POLICIES, CHANGES IN ESTIMATES AND ERRORS
During the year ended December 31, 2012 there were no changes in accounting policies and esti- mates, in relation to those used in the preparation of the financial information for 2011, present- ed for comparative purposes, nor were significant errors identified related to previous years.
6. RELATED PARTIES
Related parts identification
As of December 31, 2012 and 2011, the Company’s fully subscribed and paid up capital was made up of 11,000,000 shares with nominal value of 5 Euros each, held by Auto-Estradas do Oeste, S.A. and Via Oeste, SGPS, S.A., with 50% each.
Auto Estradas do Atlântico, SA p. 44
Annual Report 2012 - Notes to the Financial Statements
Balances and transactions
Balances as of December 31, 2012 and transactions occured during the year then ended with group and related parties were as follows:
Balances at 31-12-2012 Transactions at 31-12-2012
Other Other Acquisiti- Pavement Supplies
accounts accounts ons of repair and servi- Financial Entity Loans payable receivable fixed ces Payroll expenses Suppliers (Notes 9, 18) (Note 19) (Note 11) assets (Note 21) expenses (Note 23)
Lena Engenharia e Constru- ções, S.A. 794.663 - - - - 432.000 828.697 - -
Lena Concessões e Serviços, S.A. 43.598 - - - - - 5.409 176.280 - MSF, Concessões, SGPS, S.A. 27.913 - 2.500 - - - - 30.000 - MSF-SGPS, S.A. 27.913 - 2.500 - - - - 30.000 -
Brisa - Auto-Estradas de Portugal, S.A. - - 60.030 80.109 - - - 232.501 - Brisa - O & M, S.A. 653.039 - 423 - - - 1.584.181 - - Brisa Inovação e Tecnologia,
S.A. 178.859 1.394.729 270.237 - 156.837 - 1.100.340 - 79.077 Brisa Eng. E Gestão, S.A. 76.030 ------Brisal, S.A. - - 617.414 ------Via Verde, S.A. 32.603 - 76.069 3.901 - - 1.540.102 - - Viamarca, S.A. 130.040 - 37.516 - - - 292.371 - -
MSF, Engenharia, S.A. (Alarg: CRIL/Loures) - - 2.252.646 26.654 - - - - -
LMNS Atlantico S.A. (Alarg. Loures/Malv) 147.657 - 436.440 242.740 - - - - -
Via Oeste, SGPS - 52.612.363 ------1.748.201
Autoestrada do Oeste, S.A. - 52.612.363 ------1.748.201
Total 2.112.315 106.619.456 3.755.775 353.404 156.837 432.000 5.351.100 468.781 3.575.479
Auto Estradas do Atlântico, SA p. 45
Annual Report 2012 - Notes to the Financial Statements
Balances as of December 31, 2011 and transactions occurred during the year then ended with group and related parties were as follows:
Balances at 31-12-2011 Transactions at 31-12-2011
Other ac- Other Aacquisiti- Supplies counts accounts ons of and servi- Financial Entity Loans payable receivable fixed as- ces Payroll expenses Suppliers (Notes 9, 18) (Note 19) (Note 11) sets (Note 21) expenses (Note 23)
Lena Engenharia e Constru- ções, S.A. 1.073.991 - 30.500 - - 1.250.732 168.000 - MSF, Concessões, SGPS - - 60.000 - - - 60.000 -
Brisa - Auto-Estradas de Portugal, S.A. 239.895 - 3.972 66.829 - 44.882 228.000 -
Brisa - O & M, S.A. 632.897 - (91.705) - - 1.422.193 - -
Brisa Inovação e Tecnologia, S.A. 176.021 1.652.166 368.023 - 1.469.251 2.708.044 - 91.104 Brisa Eng. E Gestão, S.A. 130.646 - 168.776 - - 582.066 - - Brisal, S.A. - - 514.831 - - - - -
Via Verde, S.A. (60.234) - 147.331 1.883 - 2.009.379 - - Viamarca, S.A. 40.082 - 25.872 - - 262.387 - - MSF, Engenharia, S.A. (Alarg: CRIL/Loures) - - 2.790.764 209.223 - - - - LMNS Atlantico S.A. (Alarg. Loures/Malv) 147.657 - 436.440 172.801 649.374 - - -
Via Oeste, SGPS - 50.864.162 - - - - - 1.483.398
Autoestrada do Oeste, S.A. - 50.864.162 - - - - - 1.483.398 Total 2.380.955 103.380.490 4.454.804 450.735 2.118.625 8.279.682 456.000 3.057.900
Remuneration of executive bodies
The remuneration of executive bodies in the years ended December 31, 2012 and 2011 were as follows:
31-12-2012 31-12-2011
Board of Directors 420.000 420.000 Supervisory board 36.400 36.939 Chairman of the Shareholders's General Meeting 2.000 2.008
458.400 458.947
7. TANGIBLE FIXED ASSETS
Tangible fixed assets are divided between reversible and non-reversible, based on whether or not they revert to the State at the end of the concession, without compensation.
Auto Estradas do Atlântico, SA p. 46
Annual Report 2012 - Notes to the Financial Statements
In accordance with the current concession contract, assets directly related to the conceded activity
revert, with no compensation, to the State at the end of the concession contract. These assets are subject to the public domain regime and relate to the activity, being freely managed, within this scope, but not to what concerns private legal commerce.
The changes in reversible tangible fixed assets during the years ended December 31, 2012 and 2011 were as follows:
2012 Beginning Ending Captions balance Additions Decreases balance Reversible tangible fixed assets Gross assets Buildings and other constructions 17.393.010 - (167) 17.392.843 Basic equipment 24.077.707 284.283 (842.250) 23.519.740 Transport equipment 66.160 - - 66.160 Administrative equipment 1.312.041 1.508 (65.787) 1.247.762 Other tangible assets 384.656 - (6.358) 378.298 Total 43.233.574 285.791 (914.562) 42.604.803
Accumulated depreciation Buildings and other constructions 8.700.889 768.616 (165) 9.469.340 Basic equipment 15.203.360 1.870.835 (709.354) 16.364.841 Transport equipment 66.160 - - 66.160 Administrative equipment 1.205.155 41.073 (64.834) 1.181.394 Other tangible assets 331.345 18.281 (6.222) 343.404 Total 25.506.909 2.698.805 (780.575) 27.425.139 Net reversible tangible fixed assets 17.726.665 15.179.664
2011
Beginning Transfers/ Ending reclassificati- Captions balance Additions Decreases ons balance Reversible tangible fixed assets Gross assets Buildings and other constructi- ons 17.337.567 35.562 - 19.881 17.393.010 Basic equipment 19.880.460 1.494.635 - 2.702.612 24.077.707 Transport equipment 66.160 - - - 66.160 Administrative equipment 1.324.414 22.118 (34.491) - 1.312.041 Other tangible assets 380.506 4.150 - - 384.656
Total 38.989.107 1.556.465 (34.491) 2.722.493 43.233.574
Accumulated depreciation Buildings and other constructi- ons 7.913.990 774.941 - 11.958 8.700.889 Basic equipment 13.142.116 2.061.631 - (387) 15.203.360 Transport equipment 66.160 - - - 66.160 Administrative equipment 1.189.681 49.965 (34.491) - 1.205.155 Other tangible assets 312.584 18.761 - - 331.345 Total 22.624.531 2.905.298 (34.491) 11.571 25.506.909 Net reversible tangible fixed assets 16.364.576 17.726.665
Auto Estradas do Atlântico, SA p. 47
Annual Report 2012 - Notes to the Financial Statements
The basic equipment reversible as of December 31, 2012 and 2011 was composed of the follow- ing items at acquisition cost:
2012 2011
Signalling and safety equipment 8.048.470 7.948.132 Telecommunications equipment 1.743.744 2.554.899 Electrical installations and lighting 947.650 960.925
Toll equipment 8.198.960 8.032.835 Operations support equipment 2.826.012 2.826.012 Accessory works and other infrastructures 1.754.904 1.754.904
23.519.740 24.077.707
The changes in non-reversible tangible fixed assets during the years ended December 31, 2012 and 2011 were as follows:
2012
Beginning Ending
Captions balance Additions Decreases balance Non-reversible tangible fixed assets Gross assets: Buildings and other constructions 1.206.899 1.250 (42.662) 1.165.487 Administrative equipment 64.903 - - 64.903
Total 1.271.802 1.250 (42.662) 1.230.390
Accumulated depreciation:
Buildings and other constructions 1.152.127 49.805 (42.662) 1.159.270 Administrative equipment 45.319 5.013 - 50.332
Total 1.197.446 54.818 (42.662) 1.209.602 Net non-reversible tangible fixed assets 74.356 20.788
2011 Beginning Transfers/ Ending Captions balance Additions Decreases reclassifications balance Non-reversible tangible fixed assets Gross assets: Buildings and other constructions 19.881 - - (19.881) - Administrative equipment 1.271.681 9.119 (74.288) 387 1.206.899 Other tangible assets 64.635 268 - - 64.903
Total 1.356.197 9.387 (74.288) (19.494) 1.271.802
Accumulated depreciation: Buildings and other constructions 10.136 1.822 - (11.958) - Administrative equipment 1.165.121 60.907 (74.288) 387 1.152.127 Other tangible assets 40.038 5.281 - - 45.319
Total 1.215.295 68.010 (74.288) (11.571) 1.197.446 Net non-reversible tangible fixed assets 140.902 74.356
Auto Estradas do Atlântico, SA p. 48
Annual Report 2012 - Notes to the Financial Statements
8. INTANGIBLE ASSETS
The changes in intangible assets during the years ended December 31, 2012 and 2011 were as follows:
2012 Beginning Ending Captions balance Additions balance Intangible assets Gross assets: Computer software 795.776 - 795.776 Contractual right 528.882.678 - 528.882.678 Total 529.678.454 - 529.678.454 Intangible assets in progress 440.866 - 440.866 Total 530.119.320 - 530.119.320
Accumulated amortization: Computer software 795.776 - 795.776 Contractual right 195.017.126 19.736.618 214.753.744 Total 195.812.902 19.736.618 215.549.520 Net intangible assets 334.306.418 314.569.800
2011 Beginning Ending Captions balance Additions Decreases Reclassifications balance Intangible assets Gross assets: Computer software 795.776 - - - 795.776 Contractual right 498.925.821 - - 29.956.857 528.882.678 Total 499.721.597 - - 29.956.857 529.678.454 Intangible assets in progress 33.067.013 672.073 (638.363) (32.659.857) 440.866 Total 532.788.610 672.073 (638.363) (2.703.000) 530.119.320
Accumulated amortization: Computer software 795.776 - - - 795.776 Contractual right 175.280.508 19.736.618 - - 195.017.126 Total 176.076.284 19.736.618 - - 195.812.902 Net intangible assets 356.712.326 334.306.418
As explained in the Introductory Note, when the concession started, a group of motorway stretch- es, equipment and installations relating to the stretches already built were transferred to the Com- pany, to which the amount of 88,536,627 Euros was attributed, and are referred to as initial in- frastructure and are part of the contractual right.
Auto Estradas do Atlântico, SA p. 49
Annual Report 2012 - Notes to the Financial Statements
As of December 31, 2012 and 2011, the gross value of the intangible assets related to the con- tractual right were as follows:
2012 2011
Floors and respective equipment 236.043.946 236.043.946 Bridges and tunnels 171.436.784 171.436.784 Initial infraestructure (Note 1) 88.536.627 88.536.627 Accessory works and other infrastructures 15.117.721 15.117.721 Telecommunications equipment 3.853.765 3.853.765 Electrical installations and lighting 3.241.306 3.241.306
Signalling equipment 10.652.529 10.652.529 Total 528.882.678 528.882.678
Intangible assets in progress as of December 31, 2012 and 2011 are related with investments regarding the expansion of Malveira/Torres Vedras Sul.
9. FINANCIAL LEASINGS
As of December 31, 2012 and 2011, the Company had the following assets under financial leas- es:
31-12-2012 31-12-2011 Accumulated Cost depreciation Net value Net value
Operations support equipment 2.471.100 1.796.870 674.230 1.033.603
As of December 31, 2012 the Company’s liabilities of financial leases instalments not yet due, amounted to 1,394,729 Euros (Notes 6 and18), and are payable as follows:
2013 250.809 2014 264.149 2015 278.198 2016 and subsquent years 601.573 1.394.729
10. CORPORATE INCOME TAX
The Company is subject to Corporate Income Tax at the rate of 25%. This rate can be increased up to Municipal Surcharge a maximum of 1.5% of taxable income regarding Municipal Surcharge. Additionally, since 1 January 2010, the Company is also subject to a State Surcharge of 2,5% to all taxable income over 2,000 thousand Euros, in accordance with article 87-A of the Portuguese Corporate Income Tax Code.
Auto Estradas do Atlântico, SA p. 50
Annual Report 2012 - Notes to the Financial Statements
For 2012, the normal rate of income tax can vary between 26.5% and 31.5%, depending on the amount of taxable profit (TP), on which the following rates apply:
- Corporate Income Tax rate: 25% on TP;
- Municipal Surcharge: 1,5% on TP;
- State Surcharge: 3% on TP if 1.5M€ < TP <= 10M€ or 5% on TP if TP > 10M€
During 2013, the State Surcharge was changed as follows:
- 3% on TP if 1.5M€ < TP <= 7.5M€ or 5% on TP if TP > 7.5M€
From 2014 onwards, the TP that exceeds 2M€ will be subject to a State Surcharge of 2.5%, as mentioned above.
In accordance with article 88 of the Portuguese Corporate Income Tax Code, the Company is also subject to autonomous taxation of certain expenses at the rates mentioned therein.
In accordance with the applicable Portuguese legislation, income tax returns are subject to review and correction by the tax authorities for a period of four years (five years for social security) except where there are tax losses, tax benefits have been granted or there is litigation in progress where, depending on the circumstances, the period can be extended or suspended. Accordingly, the Company’s tax returns for the years 2009 to 2012 are still subject to review. The Company’s Board of Directors believes that possible corrections arising from inspections by the tax authorities of those tax returns will not have a significant impact on the financial statements as of December 31, 2012.
The timeliness of tax losses recorded in tax periods beginning on or after January 2012 increased from four to five tax years (this period is four years for tax losses for 2010 and 2011, and six years for previous periods).
Additionally, the deduction of tax losses is limited to 75% of taxable income, and this rule applies to deductions from taxable periods beginning on or after January 1, 2012, regardless of the tax periods where they have been generated.
Auto Estradas do Atlântico, SA p. 51
Annual Report 2012 - Notes to the Financial Statements
As of December 31, 2012 tax losses available to be carried forward amounted to 31,043,940 Eu- ros, which mature as follows:
2012 11.825.018
2013 7.374.652 2014 7.311.821 2015 2.651.748
2017 1.880.701
31.043.940
Deferred taxes
Income tax for the years ended December 31, 2012 and 2011, have been adjusted to reflect the effect of deferred taxes. Deferred tax assets are only recognised if there is reasonable expectation that they will be recovered by decreasing future taxable profits.
The detail of deferred tax assets and liabilities as of December 31, 2012 and 2011, in accordance with the respective temporary differences was as follows:
Deferred tax assets Deferred tax liabilities 2012 2011 2012 2011
Tax losses carried forward (a) 1.345.829 4.501.309 - - Provision for repaving 3.363.779 3.837.247 - - Transition adjustments for NCRF 1.063.512 1.595.268 916.976 1.375.464 5.773.120 9.933.824 916.976 1.375.464
(a) As of December 31, 2012, the Company estimated that the amount that can be recovered in the future amounts to 5,383,314 Euros.
a) Changes in deferred tax assets:
31-12-2012 31-12-2011
Beginning balance 9.933.824 16.509.749
Provision for repaving (473.468) (2.430.880) Derecognition of tax losses carried forward (3.625.655) (3.613.289) Tax losses carried forward 470.175 - Transition adjustments to NCRF (531.756) (531.756) Ending balance 5.773.120 9.933.824
Auto Estradas do Atlântico, SA p. 52
Annual Report 2012 - Notes to the Financial Statements
b) Changes in deferred tax liabilities:
31-12-2012 31-12-2011
Beginning balance 1.375.464 1.833.952
(458.488) (458.488) Transition adjustments to NCRF Ending balance 916.976 1.375.464
c) Reconciliation of the tax rate:
31-12-2012 31-12-2011
Income before tax 1.261.835 7.440.001 Nominal tax rate (Tax adjustments until 12,500 €) 12,5% Nominal tax rate (Tax adjustments exceeding 12,500 €) 25,0% 26,5% Expected tax 315.459 1.969.850
Permanent differences: Quotes (29.847) (28.949) Other situations, net (124.351) (135) (154.198) (29.084) Nominal tax rate 25,0% 26,5% (38.550) (7.707)
Income tax adjustments (i) 66.671 38.569 Non-recoverable tax losses 3.625.655 3.617.847 Effect of the change in the State Surcharge tax rate (200.348) 535.813 Income tax for the year 3.768.887 6.154.372
Current income tax (Note 14) 66.671 38.935 Deferred income tax 3.702.216 6.117.437 3.768.887 6.156.372
(i) This amount corresponds to the portion of corporate income tax resulting from the autono- mous taxation of passenger vehicles.
11. OTHER RECEIVABLES
As of December 31, 2012 and 2011 this caption was made up as follows:
31-12-2012 31-12-2011
Employees 5.819 12.844 Accrued income (i) 690.247 601.576 Estradas de Portugal, S.A. 623.772 198.864 Other debtors 822.933 842.941 Joint operation: Brisa - Auto-estradas de Portugal, S.A. 80.109 66.829 LusoLisboa - Auto-estradas da Grande Lisboa, S.A. 59.416 73.787 EP - Estradas de Portugal, S.A. 120.176 126.895
2.402.472 1.923.736
Auto Estradas do Atlântico, SA p. 53
Annual Report 2012 - Notes to the Financial Statements
(i) These balances are mainly related, to rents owed by Motorway Service Areas.
The amount relating to EP - Estradas de Portugal, S.A. mainly corresponds mainly to an amount due relating to the part subsidy of that entity regarding the widen of the Cril-Loures stretch.
Other debtors as of December 31, 2012 and 2011, includes balances with related parties of 353,404 Euros and 450,735 Euros, respectively (Note 6).
The amount related to Joint operation corresponds to revenue collected by other concessionaires.
12. DEFERRALS
Deferred assets as of December 31, 2012 and 2011 were made up as follows:
31-12-2012 31-12-2011
Insurance 268.791 263.093 Other deferrals 74.568 95.710 343.359 358.803
As of December 31, 2012 and 2011, current and non-current deferred liabilities correspond main- ly to rents received from the Motorway Service Areas, which were paid in advance.
It is worth noting that, during December 2012, the Company entered into amendments to the contracts of exploration of the Motorway Service Areas of Nazaré and Rio Maior, with BP Portugal - Comércio de Combustíveis e Lubrificantes, S.A. ("BP") changing the conditions originally estab- lished. Under these amendments the Company invoiced BP, during 2012, 1,000,000 Euros related to the Motorway Service Area of Rio Maior, concerning fixed annuities for the next 10 years of exploration and 2,140,000 Euros related to the Motorway Service Area of Nazaré regarding the next 5 years. As of 31 December 2012 these amounts are deferred, and properly segregated be- tween current and non-current. Of that amount, as of December 31, 2012, 1,060,000 Euros were not yet received (Note 13).
Auto Estradas do Atlântico, SA p. 54
Annual Report 2012 - Notes to the Financial Statements
13. TRADE RECEIVABLES
The main captions of trade receivables, as of December 31, 2012 and 2011, were:
31-12-2012 31-12-2011
Tolls 4.567.045 4.865.656 Customer assistance 49.506 78.280 Service areas (a) 1.104.842 61.343
Other (4.063) (2.358) 5.717.330 5.002.921 Impairments (2.133.005) (2.213.640) 3.584.325 2.789.281
(a) As of December 31, 2012, this amount includes 1,060,000 Euros to be received from BP (Note 12).
The impairments are related to accounts receivable from clients and their changes during the years ended December 31, 2012 and 2011 were as follows:
Adjustment for doubtful accounts receivable
31-12-2012 31-12-2011
Beginning balance 2.213.640 2.229.035 Decrease (140.763) (237.416)
Increase 60.128 222.021 Ending balance 2.133.005 2.213.640
14. STATE AND OTHER PUBLIC ENTITIES
As of December 31, 2012 and 2011, these captions comprised:
31-12-2012 31-12-2011 Assets:
Corporate Income Tax (a) 1.838.202 971.248
Liabilities: Value Added Tax (VAT) 2.216.962 1.651.012 Personal Income Tax 71.270 75.979 Social Security contributions 103.330 107.371 2.391.562 1.834.362
Auto Estradas do Atlântico, SA p. 55
Annual Report 2012 - Notes to the Financial Statements
(a) As of December 31, 2012 and 2011, this caption is made up as follows:
31-12-2012 31-12-2011
Withholding income tax 1.252.873 428.183
Income tax advance payments 652.000 582.000 Current income tax for the year (Note 10) (66.671) (38.935) 1.838.202 971.248
15. CAPITAL AND RESERVES
Capital: As of December 31, 2012 the Company’s fully subscribed and paid up capital was made up of 11,000,000 shares with nominal value of 5 Euros each.
The capital was owned by Auto-Estradas do Oeste, S.A. and Via-Oeste, SGPS, S.A. with 50% of share capital each.
Legal reserve: Portuguese legislation establishes that at least 5% of annual net profit must be ap- propriated to a legal reserve until the reserve equals the statutory minimum requirement of 20% of share capital. This reserve is not available for distribution, except in the case of liquidation of the Company, but may be capitalised or used to absorb losses once other reserves and retained earnings have been exhausted.
Appropriation of results for 2010: In accordance with a decision of the Shareholders’ General Meeting held on March 31, 2011 the net loss of 2010 was transferred to accumulated losses.
Appropriation of results for 2011: In accordance with a decision of the Shareholders’ General Meeting held on March 31, 2012 the net profit 2011 was transferred to accumulated losses.
Other changes in equity: The caption other changes in equity consists of government subsidies, which in accordance with the new standards, became recognized in shareholders’ equity.
Because of the nature of the Company’s operations as a concessionaire of motorways, it has been presenting net losses, in line with its approved business plan. Mechanisms are provided for in the concession contract to maintain the Company’s financial stability so as to ensure continuity of its operations.
Auto Estradas do Atlântico, SA p. 56
Annual Report 2012 - Notes to the Financial Statements
16. PROVISIONS
The recorded provision reflects the Company’s contractual obligation of maintaining and replac- ing the infrastructure at a certain level of service specified in the Concession Contract through repaving works.
This provision is recognized over the period that the referred interventions occur, through an op- erational loss, based on the present value of the estimated expense to incur at each moment.
The changes in provisions during the years ended December 31, 2012 and 2011 were as follows:
31-12-2012 31-12-2011 Current Non-current Non-current
Beginning balance - 14.480.176 21.614.231 Transfers 1.051.215 (1.051.215) - Utilization (413.505) - - Reversals (1.035.835) (3.548.624) (9.467.854) Increases 960.641 1.301.635 2.333.800 Ending balance 562.516 11.181.972 14.480.176
In 2012, due to traffic reduction, a trend that is predicted to continue in the near future, the pro- jections for investment related to these interventions have been revised, supported by the under- standing of technical consultants, which resulted in the reversal of the provision previously ac- counted for.
The provision is subject to financial update in each reporting date, through a financial loss, being the discount rate equal to the contracted financing rate.
Increases have two components, one relating to the cost of the works and others relating to the financial adjustment:
31-12-2012 31-12-2011
Provision for cost of works 1.789.849 1.775.778 Financial adjustments (Note 23) 472.427 558.022 2.262.276 2.333.800
Auto Estradas do Atlântico, SA p. 57
Annual Report 2012 - Notes to the Financial Statements
17. GUARANTEES GIVEN
As of December 31, 2012 and 2011, the Company had responsibilities under guarantees given in favour of the Portuguese Government, amounting to 5,216,233 Euros and 5,025,534 Euros, re- spectively.
18. LOANS
As of December 31, 2012 and 2011, the Company loans were made up as follows:
31-12-2012 31-12-2011 Current Non-current Total Current Non-current Total Bank loans Capital
EIB (a) 12.825.453 125.265.110 138.090.563 12.406.468 138.541.115 150.947.583
Commercial Banks (b) 18.365.561 66.531.730 84.897.291 17.600.193 84.852.544 102.452.737 Subordinated debt (c) - 47.500.000 47.500.000 - 47.500.000 47.500.000 Stand-by (d) - 28.328.834 28.328.834 - 24.147.334 24.147.334 31.191.014 267.625.674 298.816.688 30.006.661 295.040.993 325.047.654
Leasing contracts (Notes 6 and 9) 250.809 1.143.920 1.394.729 237.116 1.415.050 1.652.166 Shareholders' loan (e) Capital - 69.113.562 69.113.562 - 69.113.561 69.113.561 Interests - 36.111.165 36.111.165 - 32.614.763 32.614.763 - 105.224.727 105.224.727 - 101.728.324 101.728.324 TOTAL 31.441.823 373.994.321 405.436.144 30.243.777 398.184.367 428.428.144
(a) The loan from the European Investment Bank (EIB – Facility Agreement) comprises three parts, which bear interests at the annual rates of 4.94%, 5.07% and 2.361%, respectively. The loan is repayable as follows:
2013 12.825.453
2014 13.746.870 2015 14.240.680 2016 14.749.454 2017 15.302.122 2018 15.869.754 2019 16.475.295 2020 17.103.780 2021 17.777.155 125.265.110 138.090.563
Auto Estradas do Atlântico, SA p. 58
Annual Report 2012 - Notes to the Financial Statements
As of December 31, 2012 and 2011, the Company’s shareholders requested the presentation of bank guarantees given in favour of the EIB, amounting to 138,541,115 Euros and 151,361,220 Euros, respectively.
(b) The “Term Loan Facility”, obtained from a group of banks, bears interests at the six month Euribor rate plus 1.5% and is repayable in accordance with the following plan:
2013 18.365.561
2014 18.568.262 2015 18.917.611 2016 19.273.286
2017 9.772.571 66.531.730 84.897.291
(c) As of December 31, 2012, the subordinated loan from Banco BPI, S.A. and Caixa – Banco de Investimento, S.A., bears interests at the six month Euribor rate plus 5%. This loan should be paid by December 31, 2018.
(d) As of 31 December 2012, the “Stand-by Facility” loan, obtained from banks group led by Banco BPI, S.A. and Caixa – Banco de Investimento, S.A., bears interest at the one month Eu- ribor rate plus 2.5%. This loan matures on December 18, 2019.
(e) The Shareholders' loans were granted in equal parts by each of the shareholders. Balances as of December 31, 2012 and 2011 amounted to 69,113,562 Euros in both years, plus 36,111,165 Euros and 32,614,763 Euros respectively, corresponding to interests at a 12 months Euribor interest rate, plus 1.5%. The Company's expectation is that the reimburse- ment of such amounts will occur in the long term.
Some of those loans required the maintenance of sufficient funds on bank deposits to cover the next service debt maturity and other investment obligations (Note 4).
Auto Estradas do Atlântico, SA p. 59
Annual Report 2012 - Notes to the Financial Statements
19. OTHER PAYABLES
Other payables as of December 31, 2012 and 2011, were made up as follows:
31-12-2012 31-12-2011
Employees 678.700 664.606 Investment suppliers 3.089.809 3.672.962 Accrued expenses: Accrued interests 2.392 1.950 Other accrued financial expenses 72.956 86.728
Other accrued administrative expenses 114.888 135.629 Other accrued tecnichal expenses 994.836 1.175.502 Other accrued expenses 499.413 412.402 1.684.485 1.812.211 Joint operation - Brisal-Auto-estradas do Litoral, S.A. 617.414 514.831 Other creditors 514 - 6.070.922 6.664.610
During the years ended of December 31, 2012 and 2011, other payables include balances with related parties amounting to 3,755,775 Euros and 4,454,804 Euros, respectively (Note 6).
20. SERVICES RENDERED
Services rendered for the years ended December 31, 2012 and 2011, were made up as follows:
31-12-2012 31-12-2011
Tolls 53.284.636 59.671.189 Service areas 2.110.965 2.044.084 Customer assistance 12.136 13.958 Discounts (112.727) (99.276)
55.295.010 61.629.955
Auto Estradas do Atlântico, SA p. 60
Annual Report 2012 - Notes to the Financial Statements
21. SUPPLIES AND SERVICES
The detail of supplies and services for the years ended on December 31, 2012 and 2011 was as follows:
31-12-2012 31-12-2011
Subcontracts 5.756.733 6.139.616 Specialized services 3.080.411 4.164.058 Materials 51.380 59.234
Energy and fluids 717.060 745.580 Travel expenses 13.363 26.345 Other services 939.145 932.656 10.558.092 12.067.489
Supplies and services include transactions with related parties, during the years ended December 31, 2012 and 2011, of 5,351,100 Euros and 8,279,682 Euros, respectively (Note 6).
22. PAYROLL EXPENSES
The caption of “Payroll expenses” during the years ended 31 December 2011 and 2010, was as follows:
31-12-2012 31-12-2011
Remuneration of executive bodies (Note 6) 458.400 458.947
Staff remuneration 4.217.228 4.448.970 Compensations - 869.389 Social security charges 949.263 988.465 Work accidents insurance 26.425 25.317 Social expenses 122.346 128.953
Other payroll expenses 83.633 227.883
5.857.295 7.147.924
During the years ended December 31, 2012 and 2011, the average number of personnel was 184 and 201, respectively.
Auto Estradas do Atlântico, SA p. 61
Annual Report 2012 - Notes to the Financial Statements
23. NET FINANCIAL EXPENSES
Financial expenses for the years ended December 31, 2012 and 2011 were made up as follows:
31-12-2012 31-12-2011 Financial interests
Loan interests 13.347.107 15.274.126 Shareholders' loans interests 3.496.403 2.966.796 Other interests 80.266 91.171
Sub-total 16.923.776 18.332.093 Financial adjustments with IFRIC 12 provision (Note 16) 472.427 558.022 Expenses with loan contracts 2.554.247 2.690.958 Other financial expenses 31 2
19.950.481 21.581.075
Financial expenses include transactions with related parties, during the years ended December 31, 2012 and 2011, of 3,575,479 Euros and 3,057,900 Euros, respectively (Note 6).
In the periods ending in 31 of December of 2012 and 2011, the interest rates and other similar income include essentially, interests from demand deposits and term deposits amounting to 679,486 Euros and 743,916 Euros, respectively.
24. OTHER OPERATING INCOME
As of December 31, 2012 and 2011, the caption of Other operating income was made as follows:
2012 2011
Supplementary tolls (penalties, maximum rates) 550.032 508.649
Accidents' compensations 969.393 658.766 Payments from EP 2.911 10.133 Others 81.218 86.141 1.603.554 1.263.689
Auto Estradas do Atlântico, SA p. 62
Annual Report 2012 - Notes to the Financial Statements
25. OTHER OPERATING COSTS
As of December 31, 2012 and 2011, the caption of Other operating costs was made by as fol- lows:
31-12-2012 31-12-2011
Disposals and write-offs 118.035 - SIEV charges 55.466 104.286 Quotes 59.359 65.449 Accidents' compensations 84.512 26.421 Others 18.051 3.565 335.423 199.721
26. EARNINGS PER SHARE
The basis of earnings per share of the years ending in December 31, 2012 and 2011 were as follow:
31-12-2012 31-12-2011
Net profit/(loss) for the year (2.507.052) 1.283.629
Number of shares in circulation 11.000.000 11.000.000
Net profit/(loss) per share (0,23) 0,12
During the years ending December 31, 2012 and 2011 there are no dilution effects, thus diluted earn- ings per share are equal to basic earnings per share.
27. NOTE ADDED FOR TRANSLATION
These financial statements are a translation of financial statements originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails.
Auto Estradas do Atlântico, SA p. 63
Annual Report 2012
Auto Estradas do Atlântico, SA
Annual Report 2012 - Report and Opinion of the Supervisor Boarder
REPORT AND OPINION OF THE SUPERVISOR BOARDER
To the Shareholders,
1. In the terms of the law and the articles of association, the Supervisory Board is responsible for preparing an an- nual report on its inspection activities and issuing an opinion on the financial statements of Auto Estradas do At- lântico – Concessões Rodoviárias de Portugal, S.A. (AEA), concerning the financial year ending 31 December 2012.
2. The Management Report submitted by the Board of Directors clearly outlines the macro, economic and industry framework in which AEA carries out its business, as well as the developments in its human and material resources and its financial and economic condition concerning the financial year ending 31 December 2012.
3. The financial statements and accounting system that support the same in general comply with the Portuguese Accounting Standards System (“SNC”) and give a fair view of the financial condition of AEA as at 31 December 2012, as well as the results of its operations in the financial year ending on the aforementioned date.
4. The Supervisory Board was also made aware of the Legal Certification of Accounts concerning the year in ques- tion, issued by the Statutory Auditor.
5. In the light of what has been expounded above, the Supervisory Board is of the opinion that the
Shareholders’ Meeting:
a) Should approve the financial statements for the 2012 financial year, as submitted by the Board of Directors; b) Should approve the proposal for appropriation of profits submitted by the Board of Directors.
6. Finally, the Supervisory Board wishes to thank the Board of Directors and the Company’s Services for all the coop- eration given in the performance of its duties.
Lisbon, 5 March 2013
The Supervisory Board
José Vieira dos Reis, Chairman
Fernando Marques Oliveira, Member
Joaquim Oliveira de Jesus, Member
Auto Estradas do Atlântico, SA p. 65
Annual Report 2012
Auto Estradas do Atlântico, SA
Annual Report 2012 - Statutory Examinationors’ Report
STATUTORY EXAMINATIONORS’ REPORT
(Translation of a report originally issued in Portuguese - Note 27)
Introduction
1. We have examined the accompanying financial statements of Auto-Estradas do Atlântico – Concessões Rodoviárias de Portugal, S.A. (“the Company”), which comprise the balance sheet as of 31 December 2012, that presents a total of 382,410,908 Euros and negative sharehold- ers’ equity of 53,394,260 Euros, including a net loss of 2,507,052 Euros, the statements of profit and loss by nature, changes in shareholders’ equity and cash flows for the year then ended and the corresponding notes.
Responsibilities
2. The preparation of financial statements that present a true and fair view of the financial posi- tion of the Company, the results of its operations, the changes in its shareholders’ equity and its cash flows, as well as the adoption of adequate accounting principles and criteria and the maintenance of an appropriate internal control system are the responsibility of the Company’s Board of Directors. Our responsibility is to express a professional and independent opinion on those financial statements based on our examination.
Scope
3. Our examination was performed in accordance with the auditing standards (“Normas Téc- nicas e as Directrizes de Revisão/Auditoria”) issued by the Portuguese Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas”), which require that the examination be planned and performed with the objective of obtaining reasonable assurance about whether the financial statements are free of material misstatements. The examination in- cluded verifying, on a sample basis, evidence supporting the amounts and disclosures in the financial statements and assessing the estimates, based on judgements and criteria defined by the Board of Directors, used in their preparation. The examination also included assessing the adequacy of the accounting principles used and their disclosure, taking into consideration the circumstances, verifying the applicability of the going concern concept and assessing the adequacy of the overall presentation of the financial statements. Our examination also included verifying that the financial information contained in the Board of Directors’ report is in accordance with the
Auto Estradas do Atlântico, SA p. 67
Annual Report 2012 - Statutory Auditor’s Report
financial statements. We believe that our examination provides a reasonable basis for express- ing our opinion.
Opinion
4. In our opinion, the financial statements referred to in paragraph 1 above, present fairly, in all material respects, the financial position of Auto-Estradas do Atlântico – Concessões Rodo- viárias de Portugal, S.A. as of 31 December, 2012 and the results of its operations, the chang- es in its shareholders’ equity and its cash flows for the year then ended, in accordance with generally accepted accounting principles in Portugal.
Emphasis
5. As of December 31, 2012, the Company’s shareholders’ equity is negative by 53,394,260 Eu- ros, which determines the application of Articles 35 and 171 of the Commercial Companies Code (“Código das Sociedades Comerciais”). As explained in Note 15 to the financial state- ments, the concession contract establishes financial support mechanisms for the Company, to the extent necessary to ensure the continuity of its operations and financing agreements re- quire the maintenance of deposits sufficient to cover debt service (Note 4). Consequently, the continuity of the Company’s operations, the realisation of its assets (which include deferred tax assets of, approximately, 5,773,000 Euros) and the settlement of its liabilities, depend on the future success of its operations and on the financial support to be rendered in the terms of the referred concession contract.
Report on legal requirements
6. It is also our opinion that the financial information included in the Board of Directors’ report is consistent with the financial statements of the year.
Lisbon, 4 March 2013
Deloitte & Associados, SROC S.A.
Represented by Carlos Alberto Ferreira da Cruz
Auto Estradas do Atlântico, SA p. 68
Annual Report 2012
TECHNICAL SUPPORT
Property
Auto-Estradas do Atlântico
Concessões Rodoviárias de Portugal, S.A.
Catefica - Apartado 327
2560 - 587 Torres Vedras
Portugal
Tel.: +351 261 318 500
Fax.: +351 261 318 501 www.aeatlantico.pt
E-mail: [email protected]
Edition
AEA - Gabinete de Comunicação e Imagem
August 2013
Public Trade Company — Share Capital 55.000.000 euros
Registered at Conservatória do registo Comercial de Torres Vedras,
Whith nº 3830
Fiscal nº 504 290 592
Auto Estradas do Atlântico, SA p. 69