grupo pestana sgps management report financial statements

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GRUPO PESTANA SGPS
MANAGEMENT REPORT
FINANCIAL STATEMENTS
ENGLISH
GRUPO PESTANA SGPS
MANAGEMENT REPORT
INDEX
05- Individual and Consolidated
Management Report
06-Introdution
08-The Fiscal Year 2009 - General Environment
13-The Consolidated Universe of Grupo Pestana, S.G.P.S. in 2009
20-Grupo Pestana - S.G.P.S., S.A.,
Individual Financial Statements
21- Profit Distribution Proposal
- Liabilities to the State and Social Security
22-The Future
23-Relevant Facts already occurred in 2010
- Thanks
24- Financial Statements
25-Balance Sheet
27- Profit and Loss Statement by Nature
28-Profit and Loss Statement by Functions
29- Cash-flows Statements
30- Notes to the Financial
Statements
31- Introduction
-Bases of Presentation and Accounting Principles
33-Exchange Rates Used
33-Taxation
-Average Number of Employees
34-Fixed Assets Movements
34-Group and Associated Companies
36-Guarantees Provided
-Share Capital Breakdown
-Companies Holding more than 20%
of the Share Capital
-Movements in Shareholders Equity
37- Statement of Financial Results
-Statement of Extraordinary Results
38 - Other Relevant Information
40- Consolidated Financial Statements
41- Grupo Pestana SGPS, SA.- Consolidated Balance Sheet
43-Consolidated Profit and Loss Statement by Nature
44-Consolidated Profit and Loss Statement
by Functions
45-Consolidated Cash-flows Statement
46-Notes to the Consolidated
Financial Statements
47- Introduction
48-Basis of Consolidation
-Consolidated Companies
50-Companies Excluded from the Consolidated
-Other Financial Investements
% of Owned Share Greater than 10%
-Average Number of Employees
-Appropriate and Fair Presentation
51- Consolidation Differences
52-Depreciation of Consolidation Differences
-Guarantees Provided
53-Basis of presentation and accounting principles
56-Exchange Rates Used
- Fixed Assets Movements
57-Movements in Adjustments
58-Debts to Third Parties (more than 5 years)
- Debts to Third Parties covered by Real Warrantees
-Sales and Services Rendered by Bussiness
Area and Geographical Market
59- Differences between the Accounting and Tax Results
60-Wages of Board Members
- Revaluation of Tangible Assets
- Tangible Assets Historical Costs
and Revaluations
61- Consolidated Statement of Financial Results
-Consolidated Statement of Extraordinary Results
62-Movements in ProvisionsFinancial Leases
-Financial Leases
63- Report and Opinion
of the Statutory Auditor
65- Auditor Report
Consolidated Financial Statements
67- Auditor Report
Individual Financial Statement
INDIVIDUAL
And Consolidated Management Report
FISCAL YEAR 2009
In the terms of the Law, we have the honor to submit
for your appreciation and approval the Board of
Director’s Report and the individual and consolidated
financial statements for the year ended as at
December 31st 2009.
1. INTRODUCTION
The “Grupo Pestana - SGPS, SA” is the Holding
company that controls the group of companies
owned by Family Pestana. Established in 2003, this
Portuguese Holding recorded its seventh year of
operation. Throughout this period our company has
experienced sustained growth which reflects the
evolution that the Group has had on its activity in
recent years.
GRUPO PESTANA SGPS S.A. MANAGEMENT
06
REPORT FINANCIAL STATEMENTS
The 2009 consolidated financial
statements include the following
companies:
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2. THE FISCAL YEAR 2009
GENERAL ENVIRONMENT
The World Economy had in 2009, as expected,
a bad year. In line with the effects of the economic and financial crisis that began in 2007 and
reached its greatest evidence in September 2008
when it occurs the bankruptcy of a leading Investment Bank, having a global business impact although being American capital, national economies presented, in general, negative results in this
financial year.
cial problem for families, particularly those most
vulnerable. The fight against this social problem is
even more difficult while the high levels of indebtedness in Portuguese society remain. It needs to
have the courage to take measures to invert this
cycle of debt, in order to make the macroeconomic
framework healthier, so this may have positive effects in daily activities of companies and families.
In summary, 2009 was a year with a very difficult
economic environment, which end is not quickly
perspectived, despite some positive signs of economic recovery, stronger in developing economies
(Brazil, China or India) but also, although fainter
and less consolidated, in some of the more developed economies (U.S. and Germany).
Thus, the more developed economies showed
growths of its Gross Domestic Product negative
or very close to zero. In the U.S., Japan and also
in the Euro Zone, none of the more developed
economies escaped from this negative trend in the
growth of national wealth. So, as the end of the
year approached and the actual values of different
indicators were being known, increasing signs of
alarm and great concern were noted.
Perspectives
The European economies, in general, including
all those where the main flows of tourists come
from, faced the rising of unemployment and the
falling of confidence and consumption following
the degradation of the investment and the domestic product.
The year 2010 seems to continue with turbulent
times in the financial sector, with its negative effects that will contaminate the whole economy.
Particularly in Europe but affecting, in general, the
more developed economies, regarding this new
reality, it will be seen the correction of structural
deficits and the adjustment of consumption levels,
public and private.
Especially in the Euro Zone, occurred the deterioration in the competitiveness of economies,
whether by the excessive rise of the Euro, or by
the high indebtedness levels. These values of debt
are even more worrying because they involve the
State, the financial sector, companies and, finally,
the families thus embracing the public and private
sectors in its different aspects.
The crisis combat made through aggressive public policies – some of the key measures adopted
aimed the increase in public investment and support to companies with large employment levels
– and by the Central Banks – by lowering interest rates and taking extraordinary actions such as
granting loans to companies or injecting liquidity
in financial systems – had contributed to mitigate,
in the short term, the drastic effects of the crisis,
but will force even more extraordinary actions to
combat other tensions that excessive indebtedness
will not fail to provoke.
Portuguese economy, naturally as an open economy, also saw its performance deteriorate. The
most negative signal was, however, the significant
growth of unemployment that has increased successively since the last quarter of 2007. The unemployment problem is probably the biggest challenge for public policies in the near future, not
only by its growth trend, but especially by the so-
In the present context, it is forecasted for the current year a two-speed economy. On one hand the
08
developing countries, strongly competitive in the
exports and with great potential domestic markets, which will grow with very satisfactory rates.
On the other hand the more developed economies, including the vast majority of Europe, which
will maintain the climate of stagnation or depression started from the fourth quarter of 2008.
expectation for the sector (WTO - World Tourism
Organization, estimate a long-term average annual growth of +4% per year).
The decrease in 2009 occurred mainly in Europe
and America, where the reductions reached values
between -7% and -8%. In Africa and in Asia-Pacific zone occurred smaller reductions, below -3%.
As a result of this financial crisis is now a consensus that the populations of more developed economies need to change their behavior patterns. It
will be necessary to reduce consumption levels,
increase savings rates, increase productivity levels
and change, reducing the benefits, some of the social protections that have been introduced over the
economical growth years. These measures, naturally, will not be popular or well accepted fact that can
result in a climate of instability and conflict
This result in Europe and America is a corollary of
the reduction occurred in all segments of tourism.
The “Corporate” segment was the most affected
with significant reductions, whether in individual segment or in the market segment of “MICE
- Meetings, Incentives, Congresses and Events”.
To this fact is not strange the timing coincidence
between the corporate budgets completion for
2009 and the broadly talked insolvency of Lehman Brothers in late September 2008. There were
overall cuts in costs that have drastically reduced
spending on travel and budgets for training and
marketing, the main areas of “MICE” segment.
Tourism Sector
The Tourism sector, Grupo Pestana core business,
had a difficult year in 2009. The sector was not
immune to the economic crisis and there was, consequently, a reduction in demand at a global level.
The market originated by Tour Operators also noted
very significant reductions but not uniform for all
destinations or channels. Consequently, the destinations most favored by domestic demand resented less than the ones that depend more from international markets. And, within the international
markets, those destinations more dependent from
English market and with the prices setup in Euro
were the most affected. This is largely explained
by the British pound devaluation against the Euro,
On average, for the first time in recent years, there
was a worldwide decrease in tourism demand
around 5% (estimated by WTTC - World Tavel &
Tourism Council). The trend registered in recent
years was, therefore, interrupted (in the last decade the global tourism grew by an average of +5%
per year), and also contradict the recent long-term
09
which turned tourism travelling much more expensive for the English market, even in situations
where there was no increase in prices in Euro. The
marketing effort of hoteliers and travel agents in
Euro Zone to jointly offer excellent quality/price
deals had not produced the desired effects, particularly in the English market, very influenced by
the exchange rate issue already mentioned.
do not occur only in marketing models. Also in
the information services to potential tourist / customer, either about the destinations and their attractions, or with the reviews of other travelers or
product users, the usage of Internet is becoming
a normal universal practice. We are in the era of
“Social Media” emerging, daily, new sites or new
“blogs” about the various touristic products.
Concerning the channels, the reduction was much
more significant in the traditional channel than in
the online channel. Though the ‘web based’ operators have also noted reductions on demand,
this subgroup had a better performance than the
sector’s average. This trend is explained by the increasing use of Internet in the purchase process,
being Tourism one of products most purchased
on-line.
For the companies, it is imperative to play this
game, developing and giving visibility to their own
Internet sites, establishing partnerships and being
constantly aware of the feedback formed about
their own products.
Thus, the “BRAND” concept acquires increasing
importance in marketing strategy of tourist businesses. The development of a Brand, its reputation and the association with the values that they
want to show to the market, are key factors in a
sustained growth strategy in Tourism. This is why
professionals from large retail and consumption
area have joined the sector in recent times.
As a consequence of these facts - the increasing
importance of Internet and deconsolidation at the
purchase level of the tourism product - the direct
segment recorded results not so lower it would
be expected. Also in Direct Customers there was
a positive development in the electronic channel
through sales made in the Group’s own sites. This
sub-segment was the one that presented the fastest growing and prove the change that has occurred with sales on the Internet on recent years.
Another key activity for Tourism is air transport. In
2009 the companies of this sector reported high
losses related to lower levels of demand. Clearly the economic environment has a direct influence in the more or less spending on vacations
and business trips. Despite these expenses are
not questionable, for an important portion of the
population, travels are not so frequent, periods
are shorter and spending less. On the other hand,
in the air transport sector significant innovations
Related to “web”, the technological advances, the
new partnerships and the emergence of innovative
services have driven the market, intensifying competition. The presence and influence of the “web”
10
have occurred, regulatory measures and changes
in needs, which has caused a true revolution in
the industry. We assist to a consolidation phenomenon, either through the establishment of global
alliances or through the purchase of less competitive companies by other better prepared, and to
strengthening of competition among the major
players.
a first level of competition. Also at this level, considering the efforts put by many countries, or regions, on the creation and growth of new destinations (have emerged in the market new products
and extremely aggressive promotional campaigns,
sponsored by large public investment), the competition has been strongly increased.
For a winning strategy in business organizations it
is, therefore, necessary to correct management of
tourism destinations where their units are located.
The destinations are facing new challenges that
will only be able to win through strategies that
improve the product, acting at the infrastructures
that are essential in order to have a sustainable
quality tourism that raises the level of the service
offered. This is only possible if a culture of Tourism is developed and if there is effectiveness in the
promotion, which involves using the right channels and appropriate instruments to the strategy
that has been established.
Regarding to tourism, the most significant market
change in air transport was the business model
introduced in the past by the so called “Low Cost”
companies. Their growing presence in the market,
and the reaction that other operators need to take
to boost their competitive conditions, have caused
the significant fallen of the average price of air
travel. This result was enhanced by the Open Air
policy that most of the countries followed.
In fact, if in parallel with the growing importance
of the “web” the trend already described for the
deconsolidated purchase of the tourism product
is intensified, tourist do not prefer the “package
solution” and get the freedom to buy the different
components from different players, this causes a
negative reaction of the traditional tour operators
who see part of its market threatened. Often, this
reaction leads to strategies of divestment in some
destinations, where air travel has become more
liberalized and more accessible with the entry of
low-cost airlines, and focusing of operations in
other destinations still more protected and where
those airlines cannot enter or are not present.
While the balance is not restored, these reactions
can significantly shuffling market forces and can
cause reductions in demand because, traditionally,
the great effort to promote the tourist destination
was achieved, even with financial support from
hoteliers and public sector, by tour operators who
have made the divestment decisions.
For that reason, companies face an unfavorable
economic environment that reduces demand and
involve more difficult conditions for the exercise
of its activity and still must respond to significant
changes in business models and to the intensification of competition, either at the Tourism Destinations where they operate or in terms of their
specific activity in each destination.
Accordingly, Tourism is much more competitive,
forcing companies to continuously improve their
levels of efficiency and effectiveness. This requires
better business strategies, which result in more
and better products and services offerings that
bring greater value to customers. That is, increasing productivity levels through enhancing employees’ skills and achieving greater synergies and
economies of scale has become imperative for survival, besides a rule of good management. Hence,
the merger between companies is a certainty in
the short term.
It is also true that distribution channels have experienced significant changes. The traditional Tour
operators have traced a consolidation strategy,
which, in the first stage, consisted in a merger
with other traditional players and, subsequently,
in the acquisition of “Web Based” operators, some
of them with privileged links with airlines, with
concept of low cost or with mixed operating systems. However, the management models of different brands and concepts in the same organization
are not yet mature enough to take combined strategies and at the decision-makers level, with influence in daily activity, different brands or concepts
act individually.
In Portugal the behavior of the tourism sector in
2009 followed the international trends. The tourism demand decreased whatever the indicator
used: 6.4% in overnight stays, 3.1% in number of
guests, 5.4% in hotels occupancy rate, also 5.4%
in air passenger movements, 9.7% in the total income of Hotels and 7.1% in total revenue of the
sector. The results were worse in the main touristic regions (Algarve, Lisbon and Madeira, which
represent 72.1% of overnight stays) and in Azores
than in other regions. Alentejo and the North still
had demand increases, but, as the other regions of
Portugal, the RevPar (revenue per available room)
fallen, which is the main indicator of the potential
In this way, we have seen the growing importance
of tourism destination’s management that are now
11
profitability of hotel companies.
the Leisure sector does not suffer quite significant
instability, it may be expected a year not as bad
as the previous one, because there are even some
countries where the market expects very positive developments in the economic environment
and tourism demand (some of them, like Brazil or
South Africa, with physical presence of the Pestana Group).
Concerning to the demand by nationalities, the
Portuguese tourism suffered mainly by the reduction in the English market (-23%), as a reflex of the
British pound devaluation against the Euro that
occurred during the year, and, to a lesser extent,
the German market (-9%).
We have to mention the increase occurred in the
domestic and Spanish market, proving the thesis
that in situations of economic crisis the proximity
markets react more quickly
In terms of prospects for 2010, there are clear
signs of concern, in large part motivated by the
continuation of the current climate of economic
and financial crisis.
The continuation of the economic crisis, in addition to demand reduction, has another quite
perverse effect, as a result of liquidity scarcity in
financial systems. By this way, many companies
got into difficulties, having, in some cases, uncompleted projects, and, in others, units already
operating and facing great difficulties that have
adopted very aggressive strategies at pricing and
payment terms. The adoption of such strategies
have a negative impact firstly in themselves but
in the end of the day drags the entire industry to
higher levels of difficulty, especially because there
is not an insolvency system that quickly responds
to these situations. Thus, units economically inefficient and insolvent continue operating through
times with very perverse effects for all.
There are however some signs of recovery in the
market. It is not expected to return to 2007 levels,
but the performance of the segment “Corporate”
will, for sure, be higher than in 2009. This way, if
12
3. THE CONSOLIDATED
UNIVERSE OF GRUPO
PESTANA SGPS, S.A. IN 2009
sadas de Portugal”, under the management of the
Group;
Introduction
In the 2009 operational activity of the Pestana Group
companies, the following investments should be pointed out
n The acquisition of land in Berlin for the construction
of a future hotel unit in this European capital;
n The signing of the concession agreement for “Cidadela” in Cascais with the purpose of installing a
new unit of “Pousadas de Portugal” in that national
monument;
n Opening in March of “Pestana Promenade”, the latest unit of the Pestana group in Madeira, a 4-stars
property with 275 housing units, of which 165 are
operated in the regime of Timesharing;
n The celebration of 25 years of the business area Timeshare Madeira, which operates, under this regime, 935 apartments, having currently a vacation
club that involves more than 25 thousand families
that makes the Pestana Group as one of the top European players in this industry;
n Opening in May of “Pestana Bahia Lodge”, a new
5-stars unit with 93 apartments close to the existing
Pestana Bahia Hotel;
n Opening of the “Pousada de Estói” located in the
Palace of Estói in Algarve with 63 rooms;
n The continuation of the modernization program
in the back-office systems, with the connection to
the central system of the operations in London, Caracas and Buenos Aires and the implementation of
new software that allows document management
throughout the Group in Portugal;
n The opening of the “Pousada de Viseu” located in
the old ”Hospital da Misericórida” with 84 housing
units;
n The opening of the “Pousada do Freixo” located in
the Palace with the same name, with 88 rooms that
quickly became one of the most notorious units in
the city of Porto and in the Portuguese hotels offering;
n The completion of the online integration project
between the “Opera” system and website Pestana,
improving significantly the integrated management
of reserves for all hotel units;
n Continued construction of the future “Pestana Chelsea Bridge”, in London, which opened in February of
the current year;
n The completion of the implementation of “Opera”
system in all “Pousadas de Portugal” units;
n The renewal of the “Pestana Palms,” an intervention
that aimed to modernize this unit in order to adapt it
to the new needs of the nowadays tourist;
n The continuation of the integrated Sustainability
project that aims to implement the best environmental and social practices in all operation Pestana;
n The renewal of the “Pestana Rovuma” located in
Maputo, hotel that marked the beginning of the internationalization of the brand Pestana Hotels & Resorts;
n The continuation of the project “Criamar” – a charity organization which purpose is to support the full
development of institutionalized young people. This
project began in 2008 and had in its second year of
activity a covering of more than two hundred and
fifty young people in nearly a dozen institutions;
n The continuation of the remodeling process of the
“Pousadas de Portugal”, the program to upgrade the
physical structures of the units of the group “Pou-
13
n The sale in December of the property of the former
“Pestana Atalaia”, unit which was closed since the
end of 2008;
n The sale in December of the property of the current
“Pestana Cascais”, with the subsequent signing of a
10-years lease contract for the maintenance of this
unit under the Pestana Group management.
The Group continues to implement its strategy by taking the necessary measures to adapt it to new market
conditions, which are designed to have efficiencies
gains and have more effectiveness in its operations.
These objectives were pursued through a strong
and combined commitment on two of the Brands
currently managed: “Pestana Hotels & Resorts” and
“Pousadas de Portugal”. Our Vision – To grow with
solidness and passion in the five Continents will
continue to guide the activity of the Group. Obviously
the rhythm and mode are conditioned by the economic environment at each moment but we will not
depart from our main goal.
This objective will only be attainable if we are continuously focused on the improvement of efficiency and
service rendered to customers, if we are innovative
and fight against conformism, realizing the changes
that are fundamental and implementing the decisions
taken.
14
Results obtained by
Geographical Areas
TURNOVER
Amounts
in Million Euros
Amount
∆ 2009/2008
Geographical
Area
2009
2008
Madeira
79,2
88,7
-10,7%
Algarve
40,5
45,7
-11,4%
Great Lisboa Porto
52,0
58,1
-10,4%
International 49,4
30,0
+64,6%
Total
221,2
222,5
0,6%
The difficulties that 2009 brought to tourism in Portugal had been reflected, naturally, in the evolution of
turnover in the different areas.
In the different Portuguese geographical areas there
were decreases between -10.4% and -11.4% of total
revenues, which reflects some homogeneity in the
loss of income on all domestic destinations. In contrast, there was a rise in the international area that
almost compensated for that decrease.
The International Area rose as a result of the good
performance of the hotels in Caracas, which operated
the first full year in 2009, and Buenos Aires, in addition to the maintenance of operations in Africa.
The evolution of the results by area is logically attached to the changes in turnover. There was, therefore, decreases in Portugal and rising in international
results.
However, it is necessary to note the resilience of the
Group’s operations, which can provide positive results, in all areas, even with greater difficulties.
15
Results obtained by Business Area
VOLUME DE NEGÓCIOS
Turnover
∆ 2009/08
Business
2009
2008
Hotels
128,6
145,3
-11,5%
Timeshare & Tourist Real Estate
26,6
23,9
+17,3%
Tourist Animation
21,5
20,6
+4,4%
Tourist Distribution & others
44,5
32,7
+36,1%
221,2
222,5
-0,6%
Total
Amounts in Million Euros
In Tourist Animation, Madeira Casino deserves a
special mention because, despite having reduced its
profitability, it was in a minimal basis and continued
to be the Group’s «cash cow».
Either in absolute and relative terms, the greatest
decrease occurred in the most important business
area for the Group – Hotels. Turnover reduced 16.7
million Euros, representing a fall of -11.5% in relation to the previous year. Note that, of course, there
was a decrease in profitability associated with this
business area but, even so, all hotel operations had
positive operating results.
Although the good behavior of turnover, it should
be noted that not all revenue growth results into
greater results. There are sectors, such as tourism
distribution, where the increase in activity has a little
contribution, at least directly, for the cash flow generation. However, given the negative change verified
in the main activity - Hotels - the results obtained
show the good capability of the Company in managing costs and the flexibility of the income statement.
In other business areas there were positive changes
in turnover by the fact of new businesses entries.
It is noteworthy that analyzing comparable operations with the previous year, it would be noted a
reduction in activities of Timeshare and, especially,
on Tourist Real Estate. Clearly, the real estate sector
was the one who suffered the most with the current
macroeconomic and financial environment.
16
Balance Sheet structure of
Grupo Pestana – SGPS, S.A.
Analyzing the Company’s Balance Sheet, it is possible to present the Group’s statement of origins and applications of capital, as follows:
2009
% TOTAL
2008
∆ 08/07
2007
Fixed Assets
625.015
82,4%
592.925
5,4%
539.752
Current Net Assets
87.428
11,5%
59.485
46,9%
56.332
Cash and banks
46.189
6,1%
41.502
11,3%
39.805
758.632
100%
693.912
9,3%
635.889
CAPITAL APPLICATIONS
Total Capital Applications
AMOUNTS IN THOUSAND EUROS
CAPITAL ORIGINS
2009
% TOTAL
2008
∆ 08/07
2007
Shareholder’s Equity
284.310
37,5%
268.417
+5,9%
223.260
Minority Interests
41.617
5,5%
39.369
+5,7%
77.584
Debts to Shareholders
11.512
1,5%
6.148
+87,3%
6.663
337.439
44,5%
313.934
+7,5%
307.507
Total Shareholder’s Equity or Equivalent Provisions for risks and charges
1.085
0,1%
370
+193,2%
408
Medium/long term Debt
330.320
43,5%
237.887
+38,8%
185.722
Total Permanent Capitals
668.844
88,1%
552.191
+21,1%
493.637
Short term Debt
49.795
6,6%
96.811
-40,6%
86.276
Accruals and Deferrals
39.993
5,3%
44.910
-10,9%
55.977
758.632
100%
693.912
9,3%
635.889
Total Capital Origins
AMOUNTS IN THOUSAND EUROS
17
The Capital Applications are focused in Fixed assets,
representing more than 80% of the total. This fact derives from Hotels being the Company’s core business
and, in opposition with the policy followed by other
hotels chains, the Group Pestana opted to be the owner of the units under operation. This option implies,
on one hand, a slower growth in terms of units and
number of beds operated by the Company, but, on
the other hand, turns the Company’s Balance Sheet
stronger giving sustainability to the growth achieved.
some units, would nullify the entire financial liabilities,
even if this decision would not be the most rational
from the financial point of view.
On the Company’s Balance sheet the weight of the permanent capital rose from about 80% to 90% of Total
Assets and the amount of Cash and banks is similar
to the short term debt. Thus, the Group was correctly
prepared to face the current financial crisis and liquidity scarcity. It was towards to this that, together with
its main financial partners, it was possible to complete
three medium and long term operations, over 7 years,
which allowed matching the commitments inherent to
the financial liabilities to the ability to generate cash
flows from operations managed by our SGPS.
It is this policy that allowed the Group to fulfill an objective for 2009: to negotiate with its financial partners
medium and long term loans, despite the problems affecting the financial system. These loans allowed the
replacement of short term debt and new investments
to be financed in line with the respective estimated
payback periods and the capacity to generate funds.
In 2009, investments were concentrated in finalizing
what was already in progress. Thus, we proceeded to
the opening of the following units: “Pestana Promenade”, “Pestana Bahia Lodge”, “Pousada do Freixo”,
“Pousada de Viseu”, “Pousada de Estói” and was nearly completed the “Pestana London” that opened in
February of this year.
Despite tangible assets, representing 85% of total
fixed assets and 70% of total capital applications,
being clearly understated, considering that the older
units are accounted for in Assets with values far below
its fair value, the ratio Total Financial Liabilities / Total
Fixed Assets is 60%, which is a sign of strength of the
Company’s balance sheet.
For 2010, the unit in London, already opened this year,
is the only opening planned. For the future, projects
in the portfolio are: “Pestana Berlin”, “Pestana Miami”
and the “Pousada da Cidadela”, which are investments
with an estimated value per room very competitive
compared with market averages, even if we consider
the significant reduction occurred with the current
economic crisis. They are, therefore, strategic investments for the future profitability of our Group.
The revaluation of tangible assets, using any method
of income (multiples of GOP, multiples of the value per
room or discounted cash flows) or the replacement
value, would lead to substantial capital gains, which
have occurred whenever it was necessary to appraise
these units.
Therefore, the securitization of a portion of the Assets,
namely Fixed Assets, keeping them under the management of the Group, a very common operation among
tourism companies and already tested by the Group in
18
Grupo Pestana – S.G.P.S., S.A.
Cash-flows Statement
2009
∆ 09/08
2008
2007
∆ 08/07
+ Operational profit
30.477,5
-7,9%
33.088,2
36.197,6
-8,6%
+ Depreciations
26.964,9
+0,8%
26.752,0
21.406,8
+24,7%
+ Provisions
2.039,6
+71,2%
1.191,1
1.141,6
+4,3%
Operational cash-flow
59.482,0
-2.5%
61.031,3
58.746,0
+3,9%
Annual cash-flow
64.939,7
+1,7%
63.876,7
61.581,7
+2.1%
Amounts in thousand Euros
The operating cash flow in 2009 was slightly lower
than the one obtained in the previous year and higher than in 2007. This reflects the resistance capability
of business areas of Pestana Group in a year that,
as already mentioned obviously noted, there was a
deep slowdown in touristic activity.
The operating cash flow represented 17.6% (against
19% of the previous year) of Total Equity or Equivalents.
The achievement of these figures in a difficult context such as in 2009, in sectors as hotels, which have
long payback periods and high operating leverages,
reflects the firm’s good ability to generate cash flow
from its operational efficiency.
Finally, the value of EBITDA was nearly 65 million
Euro, higher than in 2008 in 1 million Euro.
19
4. GRUPO PESTANA SGPS, S.A.
INDIVIDUAL FINANCIAL STATEMENTS
liabilities in the total approximate amount of 130 million Euros, 83 million Euros are bank loans and 42 million Euros are cashpooling applications made by group
companies in the holding.
The Company’s individual activity was characterized for
its Group holding function, where can be highlighted
the following operations done during 2009:
n Subscription of 100% capital share of the new company “Pestana Cidadela, S.A.”;
Of the total debt to financial institutions over 93% are
medium and long term operations, and the short-term
debt is less than the amount of cash equivalents.
n Increase of 2.33% in the capital hold at “Salvor, S.A.”;
Almost all of the loans obtained from cashpooling
were passed to other Group companies (42,4 million
Euro of loans received versus 41,2 million Euros of
loans granted).
n Subscription of 1 million Euro of participating units
in the fund “Fundo Imobiliário Brisa”;
n Reimbursement from the associated company Djebel
of a 6 million Euro loan;
The net profit has origin, mostly, in the equity method
registry over the affiliated companies and in dividends
received.
n Grant of a bearing interest loan to “Pestana Inversiones, S.A.” amounting to 17 million Euro;
The negative evolution in net profit comparing with
the previous period is explained by lower operating
performances that the various operations of the Group
registered in 2009.
n Continuation of the policy of integrated treasury
management, in order to achieve greater efficiency
in the usage of financial resources of the Group.
The Company’s individual financial statements present
total assets of 378.957.478,50 Euros and shareholders’
equity of 249.030.810,17 Euros, including a net profit
for the year of 12.476.549,10 Euros. The Company’s
20
5. PROFIT DISTRIBUTION
PROPOSAL
As a consequence of the previously mentioned
facts and considering the Company’s economical
and financial situation, we propose the following
distribution of the 2009 net profit, amounting to
12.476.549,10 Euros:
Legal reserve
€ 634.071,86
Retained earnings
€ 11.842.477,24
6. LIABILITIES TO
THE STATE AND SOCIAL SECURITY
The universe of the consolidated companies has its
situation regularized with the State and with the Social Security.
21
7. THE FUTURE
The year 2010, bearing in mind the negative signals
that still occur in international financial markets and on
the economies of major tourism markets, it is not seen
as the year when the hard times of tourism will end.
aimed to increase competitiveness levels, which can
only be achieved by increasing business efficiency.
Consequently, Pestana Group will continue its strategy,
guiding its activities by the following vectors:
Tourism is a sector clearly with a great future and that,
in the long term, will always have prospects of growth.
And fortunately reside in an activity that while some
decades ago was considered superfluous and luxury,
for that reason disposable on periods of economic
downturn, now has become almost a basic need for
a large part of the world population. However, the
economic slowdown will always lead to travel decisions more thoughtful and less expensive, where the
desired value-for-money is greater. Therefore, as you
would expect, the costumers’ demanding will increase
and competition will intensify among different tourism destinations and among the different players in the
chain of value. The gap between high and low seasons
will tend to increase with the consequences that this
entails for the hotel operation that has no mobility of
its main asset – the hotel unit.
n Continuous improvement of its operational flexibility, eliminating fixed costs as much as possible and
providing the organization with power for rapid response to different challenges and circumstances
that the market will come to offer;
n Commitment with change and innovation, as a mean
of, through new business models and new services
or processes, enhance value creation for the customers, offering them greater satisfaction and, hence,
promoting their loyalty;
n Continue to strengthen links with the different
“stakeholders”, explicitly, by strengthening commercial partnerships with tour operators or airlines and
keeping transparent dialogue with the financial partners;
For us Pestana Group that have the English market
as our primary customer, another factor that will determine the activity, in particular of the units located
in the Euro Zone, will be the evolution of foreign exchange market and the relative value of the Euro
against the U.S. Dollar and British Pound . A depreciation of the Euro, reversing what happened in 2009,
will create more favorable conditions for growth in the
number of tourists.
n Redouble the commitment to their employees in order to allow that altogether we can go through this
phase of social and financial difficulties;
n Do not lose sight of long-term preparing the organization for new challenges and opportunities;
n Strengthen its commitment to the communities
in which is inserted by continuing to develop our
projects of Sustainability, environmental, social and
economic, to enhance the implementation of best
practices not only within the company and but also
in the society surrounding.
In this context it matters to create strategies and operating decisions that allow, on one hand, profitable
units even in situations of market recession and, on the
other hand, to create the conditions so that, after the
worst phase, the Group can take advantage of the opportunities that climates post-crisis always offer. All of
this monitoring closely the signals that different markets convey and giving the organization the flexibility
to quickly react to trends detected. In this context, it
becomes essential for the survival of organizations that
business strategies incorporate the necessary measures
22
8. RELEVANT FACTS
ALREADY OCCURRED IN 2010
first semester in this geographical area, but much
more serious was the destruction of property and, in
particular, the loss of lives what this natural disaster
brought to the people of Madeira. The answer given
by the Madeira people and the wave of national and
international solidarity were very important for the
recovery of many areas, which were destroyed and
rebuilt in record time.
Already in 2010 it should be mentioned that last February has taken place the soft opening of the “Pestana
Chelsea Bridge”, the Group’s first unit in a European
capital outside of Portugal.
Also in February 2010, in the 20th day, there were
floods in Madeira Island, where the headquarters
of our company are located and where the Pestana
Group has a substantial part of its business. Logically,
this event has damaged the Group’s operations in the
9. THANKS
Finally, all members of the Board of Directors of Pestana
Group companies wish to express their acknowledged
thanks to all public and private entities that, directly or
indirectly, have supported and worked together with
our Group.
spirit and sense of duty of all the staff working for the
Group Pestana. Their effort and devotion are the reason that turns possible the creation of value of which
Group Pestana is responsible for.
It is particularly gratifying to note with high esteem the
relationship of trust that our customers, suppliers and
other business partners, including financial institutions
and qualified service providers, have honored us.
Funchal, April 30th 2010
We appreciate the support and collaboration of the
other Bodies of the Group companies, members of the
Bureau of the General Assembly and Supervisory Bodies in performing their duties.
The Board of Directors
Dionísio Fernandes Pestana - Chairman
Pietro Luigi Valle - Member
José Alexandre Lebre Theotónio – Member
Finally, we would like to enhance the great professional
23
FINANCIAL
Statements
GRUPO PESTANA, S.G.P.S., S.A.
Balance Sheet as at 31 December 2009
Account code
CEE (a) POC C
I
1
1
2
431
432
433
II
1
1
2
2
3
3
421
422
423
424
425
426
III
1
2
3
4
5
6
6
6
4111
4121+4131
4112
4122+4132
4113+414+415
4123+4133
441/6
447/448
D
I
1
3
36
32
II
II
1
1
2
4
4
5
III
3
IV
E
Year-end
Assets
211
218
252
24
262/6/7/8+221
264
18
12+13+14
11
271
272
2761
GA 2009 DA 2008
NA FIXED ASSETS:
Intangible Assets
Start-up expenses
Research and development costs
Patents, brand names and other rights
63.199,28 27.066,28 36.133,00 0,00 0,00 0,00 451.759,97 374.767,97 76.992,00 514.959,25 401.834,25 113.125,00 Tangible Assets
Buildings and other constructions
0,00 0,00 0,00 Transportation equipment
0,00 0,00 0,00 Tools
0,00 0,00 0,00 Administrative equipment
117.516,49 117.516,49 0,00 0,00 0,00 0,00 5.171,64 5.171,64 0,00 Financial Investments
122.688,13 122.688,13 0,00 Shares in group companies
Loans to group companies
282.932.063,31 138.893,34 282.793.169,97 Shares in associated companies
17.028.659,70 0,00 17.028.659,70 Loans to associated companies
18.877.611,99 0,00 18.877.611,99 Other financial investments
0,00 0,00 0,00 Other loans granted
6.000.000,00 0,00 6.000.000,00 Investments in progress
0,00 0,00 0,00 Advances paid on account of financial
150,25 0,00 150,25 investments
0,00 0,00 0,00 324.838.485,25 138.893,34 324.699.591,91 TOTAL FIXED ASSETS 325.476.132,63 663.415,72 324.812.716,91 CURRENT ASSETS:
Inventories
Raw materials
0,00 0,00 0,00 Goods
0,00 0,00 0,00 0,00 0,00 0,00 Receivables from third parties - long term Group
0,00 0,00 0,00 Other debtors
0,00 0,00 0,00 0,00 0,00 0,00 Receivables from third parties - short term Trade debtors
536.381,02 0,00 536.381,02 Doubtful debts
0,00 0,00 0,00 Group companies
0,00 0,00 0,00 Public entities
263.424,37 0,00 263.424,37 Other debtors
3.615.475,17 0,00 3.615.475,17 Capital subscribed but not paid up
0,00 0,00 0,00 4.415.280,56 0,00 4.415.280,56 Marketable securities and bonds
Other short term applications
41.226.200,00 0,00 41.226.200,00 41.226.200,00 0,00 41.226.200,00 Cash and banks
Bank deposits
7.809.166,73 7.809.166,73 Cash
0,00 0,00 7.809.166,73 7.809.166,73 TOTAL CURRENT ASSETS 53.450.647,29 0,00 53.450.647,29 ACCRUED INCOME AND DEFERRED COSTS: Accrued income
677.296,17 677.296,17 Deferred costs
16.818,13 16.818,13 Deferred taxes asset
0,00 0,00 694.114,30 694.114,30 TOTAL DEPRECIATIONS 524.522,38 TOTAL ADJUSTMENTS 138.893,34 TOTAL ASSETS 379.620.894,22 663.415,72 378.957.478,50 (a) According to the 9th article of the EU’s 4th directive
Abbreviations: G A - Gross Assets | D A - Depreciations and Adjustments | N A - Net Assets
25
NA
45.166,00
0,00
71.401,00
116.567,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
270.072.220,55
58.587,57
10.996.336,22
10.345.000,00
10.837.740,23
0,00
150,25
0,00
302.310.034,82
302.426.601,82
0,00
0,00
0,00
0,00
0,00
0,00
5.583.826,06
0,00
0,00
428.118,82
1.259.515,12
0,00
7.271.460,00
32.736.261,04
32.736.261,04
289.904,22
0,00
289.904,22
40.297.625,26
1.022.832,77
18.332,06
0,00
1.041.164,83
343.765.391,91
Euros
GRUPO PESTANA, S.G.P.S., S.A.
Balance Sheet as at 31 December 2009
Account code
CEE (a) Shareholders’ equity and liabilities
POC A
I
II
III
51
53
54
55
56
IV
1/2
4
571
574 a 579
V
59
2009
SHAREHOLDERS’ EQUITY: Share capital
Supplementary capital
Premiums on issuance of shares
Adjustments to investments in affiliated and associated companies
Revaluation reserves
Reserves
Legal reserves
Other reserves Retained earnings
Sub-total
VI
88
89
Net profit for the year
Anticipated dividends Total shareholders’ equity
B
1
2
3
291
292
293/8
C
252
265
C
1
2
4
6
8
8
8
8
2321
231+12
221
252
234/239
2611
24
262+263+264+265+
+267+268+211
D
273
274
2762
LIABILITIES: Provisions Provision for pensions
Provision for taxes
Other provisions Debts to third parties - long term
Bonds
Security-based loans
Bank loans
Fixed assets suppliers - bills payable
Group companies
Other creditors
Debts to third parties - short term Bond-based loans
Convertible
Bank loans
Trade creditors
Group companies
Other loans
Fixed assets suppliers
Public entities
Other creditors
ACCRUED COSTS AND DEFERRED INCOME: Accrued costs
Deferred income
Deferred taxes liability
Total liabilities
Total shareholders’ equity and liabilities
80.000.000,00
56.000.000,00
33.690.973,24
13.191.896,55
0,00
965.928,14
12.661.276,43
20.863.160,13
217.373.234,49
17.922.022,10
0,00
235.295.256,59
0,00
0,00
0,00
0,00
0,00
37.500.000,00
0,00
0,00
0,00
37.500.000,00
0,00
14.419.060,47
665.055,27
0,00
49.102.092,47
42.433,00
668.039,07
1.546.596,36
66.443.276,64
1.326.858,68
3.200.000,00
0,00
4.526.858,68
108.470.135,32
343.765.391,91
Euros
(a) Em conformidade com o artigo 9o da 4a Directiva da CEE
80.000.000,00 54.500.000,00 33.690.973,24 15.981.809,37 0,00 1.865.928,14 12.661.276,43 37.854.273,89 236.554.261,07 12.476.549,10 0,00 249.030.810,17 0,00 0,00 0,00 0,00 0,00 77.400.000,00 0,00 0,00 0,00 77.400.000,00 0,00 5.644.261,34 58.912,66 0,00 42.361.200,00 0,00 98.806,54 1.301.279,13 49.464.459,67 662.208,66 2.400.000,00 0,00 3.062.208,66 129.926.668,33 378.957.478,50 2008
26
Profit and Loss Statement by nature
for the year-ended 31 December 2009
Account code
CEE (a) POC Year-end
2008
COSTS AND LOSSES
A
Custo das merc. vendidas e das mat. consumidas
2.a)
2.b)
3
3.a)
3.b)
4.a)
4.b)
5
5
5
6
6
7
Goods
0,00 0,00 Raw and subsidiary materials and consumables 0,00 0,00 0,00 External services and supplies from third parties 62
Personnel costs
239.992,19 641+642 Wages
Social Charges:
636.202,25 583.635,34 643+644 Pensions
Others
645/8
0,00 0,00 56.468,26 692.670,51 53.229,43 Depreciations and amortization of tangible 66
and intangible fixed assets 28.409,10 53.248,84 Doubtful debts adjustments
666
0,00 0,00 Provisions 67
0,00 28.409,10 0,00 Doubtful debts adjustments
63
9.003,15 10.537,98 Provisions
65
42.819,92 51.823,07 43.350,08 (A) ....................................
1.012.894,87 Losses in group and associated companies
682
1.040.843,21 58.133,97 683+684 Depreciations and adjustments for financial investments 286.271,06 460.010,43 Interests and similar costs:
(2)
Group Companies
1.051.145,90 2.647.168,09 Others 3.003.239,92 5.381.500,09 2.494.584,43 (C) .....................................
6.394.394,96 61
10
69
8+
11
86
88
13
B
71
1
1
2
3
4
4
4
4
72
(3)
75
73
74
76
77
5
5
6
782
784
(4)
7
(5)
9
2009 79
Extraordinary costs and losses 1.059,00 (E) .....................................
6.395.453,96 Income tax for the year
1.227,25 (G) .....................................
6.396.681,21 Income tax for the year
12.476.549,10 18.873.230,31 PROFITS AND GAINS Sales Goods
0,00 0,00 Products 0,00 0,00 Services rendered 0,00 0,00 0,00 Increase in stocks of finished products and work-in-process 0,00 Self constructed fixed assets
0,00 Supplementary revenue
803.199,27 710.983,62 Grants received to operations
0,00 0,00 Other operational profits and gains
800.000,00 800.000,00 Reversions of depreciations and adjustments 0,00 1.603.199,27 0,00 (B) .....................................
1.603.199,27 Gains in group and associated companies
14.986.214,08 20.595.598,16 Dividends received
0,00 0,00 Gains in marketable securities and other financial aplications: Group Companies
754.207,10 1.898.850,55 Others
0,00 0,00 Other interests and similar gains:
Group Companies
482.621,13 254.128,37 Others
274.215,98 16.497.258,29 253.417,99 (D) .....................................
18.100.457,56 Extraordinary profits and gains
772.772,75 (F) .....................................
18.873.230,31 SUMMARY
Operational profit: Financial profit: Current profit: Profit before income tax: Net profit for the year:
(B)-(A)=
(D-B)-(C-A)=
(D)-(C)=
(F)-(E)=
(F)-(G)=
590.304,40 11.115.758,20 11.706.062,60 12.477.776,35 12.476.549,10 (4)
(1) According to the 24th article of the EU’s 4th directive
(2) 681 + 685 + 686 + 687 + 688
(3) Difference between inventories at the beggining and at the end of the period
27
0,00
237.225,68
636.864,77
53.248,84
53.888,06
981.227,35
5.659.896,92
6.641.124,27
1.800,01
6.642.924,28
3.562,40
6.646.486,68
17.922.022,10
24.568.508,78
0,00
0,00
0,00
1.510.983,62
1.510.983,62
23.001.995,07
24.512.978,69
55.530,09
24.568.508,78
529.756,27
17.342.098,15 17.871.854,42 17.925.584,50 17.922.022,10 of “Finished and intermediary products” (C/33), “By-products and wastage”
(C/34) and “Work-in-process” (C/35), taking in consideration the amount
registered in “Inventories regularization” (C/38)
7812 + 7815 + 7816 + 783
Profit and Loss Statement by functions
for the year-ended 31 December 2009
Year-end
Euros
2009 2008
Sales and services rendered
0,00
0,00
Cost of sales and services rendered
0,00
0,00
Gross margin 0,00
0,00
Other operational profits and gains
2.649.129,00
1.566.513,71
Distribution costs
0,00
0,00
Administrative costs
-9.003,15
-647.402,75
Other operational costs and losses
-1.003.967,62
-398.057,81
Operational profit and loss 1.636.158,23
521.053,15
Net funding costs
-3.003.239,92
-2.672.922,41
Gains/(losses) in group and associated companies
14.131.053,20
20.537.464,19
Gains/(losses) in other investments
-286.271,06
-460.010,43
Unusual Gains/(Losses)
0,00
0,00
Current profit and loss 12.477.700,45
17.925.584,50
-1.151,35
-3.562,40
Current profit and loss after income tax 12.476.549,10
17.922.022,10
Income tax over current profit and loss
Profit and loss from discontinued operations (net of tax)
0,00
0,00
Extraordinary profit and loss
0,00
0,00
Income tax over extraordinary profit and loss
0,00
0,00
Extraordinary profit and loss after income tax 0,00
0,00
0,00
0,00
Changes in accounting policies (net of tax)
Net profit for the year 12.476.549,10
17.922.022,10
Net profit per share 0,78
1,12
COMPUTATION OF NET PROFIT AND LOSS PER SHARE:
Net profit for the year
Net profit allocated to preference shares
Net profit allocated to shares entitled to ordinary dividends
Number of shares entitled to dividends
Net profit per share
28
12.476.549,10
0,00
12.476.549,10
16.000.000,00
0,78
17.922.022,10
0,00
17.922.022,10
16.000.000,00
1,12
Cash-flows Statement
For the year-ended 31 December 2009
Exercício
Método Directo
+
-
OPERATING ACTIVITIES
Cash receipts from trade debtors (a)
Cash paid to trade creditors (b)
Cash paid to employees
Cash-flow from operations
++-
Income taxes received/(paid) (c)
Other receipts/(payments) of operating activities (d)
Cash-flow before extraordinary items
+
-
Cash received related to extraordinary items
Cash payments related to extraordinary items
Net cash-flow from operating activities [1]
INVESTMENT ACTIVITIES
Receipts from:
Financial investments (e)
Tangible assets
Intangible assets
Government grants
Interests and similar profits
Dividends
Payments of:
Financial investments
Tangible assets
Intangible assets
Assets under construction
Net cash-flow from investment activities [2]
FINANCING ACTIVITIES
Receipts from:
Loans obtained
Capital increases, supplementary capital and premiums
Grants and donations
Sales of own shares
Anticipated dividends decrease
Coverage of previous years losses
Payments of:
Loans obtained
Capital amortization of leasing contracts
Interests and similar costs
Dividends
Anticipated dividends increase
Capital reimbursement and supplementary capital
Acquisition of own shares
Other payments of financing activities
Net cash-flow from financing activities [3]
Net Increase in cash and cash equivalents [4]=[1]+[2]+[3]
Exchange rate effect
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
Notes to the Cash-Flow Statement
Cash
Bank deposits - current accounts
Banks - term deposits
Other Financial Aplications until 3 months (Cashpooling)
Bank Overdrafts
Loans from other Group companies (Cashpooling)
Other Cash and cash equivalents
Cash and cash equivalents at Balance Sheet
2009 3.152.890,84
3.036.534,45
-4.813.359,52
-3.358.380,63
-720.521,97
-595.138,62
-2.380.990,65
-916.984,81
97.026,34
-141.077,98
-2.513.517,09
-495.391,40
-4.797.481,40
-1.553.454,19
0,00
0,00
0,00
0,00
-4.797.481,40
6.029.927,87
5.112.889,67
0,00
0,00
0,00
0,00
0,00
0,00
0,00
2.314.396,55
10.268.421,05
16.298.348,92
0,00
-17.472.349,80
-36.587.664,68
-42.433,00
0,00
-24.967,10
-96.262,84
0,00
-17.539.749,90
-150,25
-1.241.400,98
39.900.000,00
8.421.985,05
2.759.004,48
35.000.000,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
42.659.004,48
0,00
-15.515.691,60
-4.369.080,49
0,00
0,00
-5.095.229,03
-5.207.327,78
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
-20.610.920,63
0,00
22.048.083,85
16.009.201,47
3.035.331,04
33.026.165,26
29.990.834,22
49.035.366,73
33.026.165,26
0,00
309.166,73
7.500.000,00
41.226.200,00
0,00
0,00
49.035.366,73
0,00
49.035.366,73
2008
-1.553.454,19
7.427.286,22
-36.684.077,77
-29.256.791,55
43.421.985,05
-9.576.408,27
33.845.576,78
0,00
289.904,22
0,00
32.736.261,04
0,00
-49.102.092,47
-16.075.927,21
49.102.092,47
33.026.165,26
Euros
29
NOTES
to the Financial Statements
as at 31 December 2009
INTRODUCTION
Grupo Pestana, S.G.P.S., S.A is a limited liability company, established in Largo António Nobre nº 1, Funchal, created in 5 December 2002. Its main activity
is the management of financial investments on other
companies.
The notes to the financial statements follow the sequential numbering defined in the Portuguese Official Plan of Accounts (POC). Standard notes not included are either not applicable to the Company or
their presentation is not relevant to the reading of the
referred financial statements.
3. BASES OF PRESENTATION
AND ACCOUNTING PRINCIPLES
The accompanying financial statements have been
prepared in a going concern basis from the books
and accounting records of the Company, maintained
in accordance with generally accepted accounting
principles in Portugal (“PGAAP”).
31
The most significant accounting principles used in
the preparation of the accompanying financial statements were as follows:
The dividends received from these investments are
recorded in the profit and loss account for the year
when it is decided and communicated the distribution’s decision.
a) Intangible assets
d) Cash-pooling
Intangible assets include mainly start-up expenses,
which are accounted at acquisition cost and depreciated on a straight-line basis period between 3 to 6
years.
One of the Company’s functions is to manage the
Group’s centralized treasury. Therefore, it registers
in Other short term applications and Other loans obtained the amounts granted and received, respectively, to other Group companies, according to the
cash-pooling contract.
b) Tangible assets
Tangible assets are valued at acquisition cost.
e) Accrual basis
Depreciation is provided on a straight-line basis according to the estimated useful lives between 3 and
7 years.
Costs and revenues are recorded in the year to which
they refer, regardless of when they are paid or received, in accordance with the accrual basis principle. Differences between amounts received and paid
and the corresponding revenue and expenditure are
recorded as accruals and deferrals.
c) Financial investments
Financial investments in subsidiaries and associated
companies, on an individual basis, are recorded using the equity method. Initially, the financial investment is recorded at acquisition cost adjusted according to the proportional shareholder’s equity value,
reported to the acquisition date or the first-time equity method’s adoption date.
f) Assets and liabilities expressed in foreign currencies
Income tax is calculated in accordance with the
applicable legal requirements. Deferred taxes are,
when applicable, recognised in the financial statements in accordance with Portuguese Accounting
Directive nr. 28.
The differences between acquisition cost of subsidiaries and associated companies and the proportional shareholder’s equity fair value on the acquisition
date were registered in Financial Investments - shares
in group companies, when positive, and depreciated
during the current estimated payback period, and in
Shareholders’ equity - adjustments to investments in
affiliated and associated companies, when negative.
g) Taxation
Income tax is calculated in accordance with the
applicable legal requirements. Deferred taxes are,
when applicable, recognised in the financial statements in accordance with Portuguese Accounting
Directive nr. 28.
According to the equity method, the financial investments amounts are annually adjusted through the
proportional share in the net results of participated
companies and registered in the profit and loss account. Additionally, the dividends received are deducted from the respective financial investment asset value.
The remaining financial investments are accounted
for at acquisition cost or, in case of loans to associated companies, at the nominal value. The estimated recovery losses on financial investments are
registered in the caption Adjustments for financial
investments.
32
4. EXCHANGE RATES USED
Assets and liabilities expressed in foreign currencies have been converted into Euro using the following exchange rates:
31|12|2009
United States
Great Britain Pound
1.441
0.888
21|12|2008
1.470
0.796
Euros
6. TAXATION
According with Portuguese tax law, income tax returns
are subject to review and correction by Tax Authorities,
for a period of four years subsequent to their filing (for
Social Security returns is a five years period). Thus, the
Company’s tax returns for the years 2005 to 2009 are
still subject to such review.
shall not have a material effect on the financial statements as at 31 December 2009.
According to article 81º of the Corporate Income Tax
Code (“Código do Imposto sobre o Rendimento das
Pessoas Colectivas”) the Company is subject to a flat
tax rate over a set of expenses, which in the current
period amounts to Euro 1.227,25.
The Board of Directors believes that any corrections
that may arise from a tax review by the Tax Authorities
7. AVERAGE NUMBER
OF EMPLOYEES
During 2008 and 2009, the average number of employees was 3.
33
8. START-UP EXPENSES,
RESEARCH AND DEVELOPMENT
COSTS AND PATENTS,
BRAND NAMES AND OTHER RIGHTS
As at 31 December 2009, this breakdown can be analyzed as follows:
Start up expenses
63.199,28
451.759,97
514.959,25
Euros
10. FIXED ASSETS
MOVEMENTS
During 2009, the movements occurred in fixed assets, as well as in the related accumulated depreciations and adjustments were as follows:
Gross Amounts
Opening Balance Increases Disposals Intangible assets:
Start-up expenses
Tangible assets:
Transportation equipment
Administrative equipment
Financial investments:
Shares in group companies
Shares in associated companies
Loans to associated companies
Other financial investmens
Advances paid on account
of financial investments
Transfers and write-off
63.199,28 -
-
-
426.792,87 24.967,10 -
-
489.992,15 24.967,10 -
-
117.516,49 -
-
-
5.171,64 -
-
-
122.688,13 -
-
-
270.072.220,55 23.747.914,44 (1,00)
(10.888.070,68)
58.587,57 17.000.000,00 -
(29.927,87)
21.287.061,45 20.011,00 (1.024.653,36)
(1.404.807,10)
6.000.000,00 -
-
(6.000.000,00)
5.000.000,00 1.000.000,00 -
-
150,25 -
-
-
302.418.019,82 41.767.925,44 (1.024.654,36)
(18.322.805,65)
303.030.700,10 41.792.892,54 (1.024.654,36)
(18.322.805,65)
Closing
balance
63.199,28
451.759,97
514.959,25
117.516,49
5.171,64
122.688,13
282.932.063,31
17.028.659,70
18.877.611,99
6.000.000,00
150,25
324.838.485,25
325.476.132,63
Euros
Accumulated depreciations and adjustments
Opening balance Intangible assets:
Start-up expenses
Patents, brand names
and other rights
Tangible assets:
Other loans granted
Charge for the
period Disposals 18.033,28 355.391,87 9.033,00 19.376,10 -
-
Transfers and write-off
Closing
balance
-
-
27.066,28
374.767,97
373.425,15 28.409,10 -
-
117.516,49 -
-
-
5.171,64 -
-
-
122.688,13 -
-
-
-
30.908,34 107.985,00 107.985,00 -
-
(107.985,00)
107.985,00 30.908,34 -
-
604.098,28 59.317,44 -
-
401.834,25
117.516,49
5.171,64
122.688,13
138.893,34
138.893,34
663.415,72
Euros
34
16. GROUP AND
ASSOCIATED COMPANIES
As at 31 December 2009, the subsidiaries and associated companies were as follows:
Assets
Equity in 2009 Total income Subsidiaries:
Net profit in
2009
2009
%
3.883.230,88
100,00
72.157.403,23
Amount
M&J Pestana , S A
265.901.886,40
72.157.403,23
46.238.859,16
Hoteis Atlântico, SA
61.276.349,79
11.764.964,78
5.737.382,88
90.668,40
99,92
11.755.552,81
Pestana Saúde e Vida, SA
7.216.235,79
293.135,85
7,65
-102.296,54
100,00
293.135,85
Aplicações Multiplas, SA
13.864.476,26
11.368.366,06
2.700.772,80
1.962.339,13
83,00
9.435.743,83
Salvor-Soc.Inv.Turisticos, SA
178.133.309,80 110.735.362,06
34.075.006,17
8.678.800,86
96,85
107.247.198,16
Pestana Management, SA
11.727.494,38
863.284,02
9.149.021,78
134.502,47
100,00
863.284,02
Pestana Investimentos, SA
10.243.169,40
9.997.696,86
1.248.257,74
830.725,51
100,00
9.997.696,86
Pestana Inversiones,Ltd
32.596.629,00
9.969.584,86
872.237,32
-745.409,50
84,76
8.450.220,13
Em Euros
Assets
Equity in 2009 Total income Associated Companies:
Net profit in
2009
%
2009
Amount
Albar-Soc.Imob.Barlavento, S.A.
2.087.991,85
2.085.188,88
1.652,48
-48.828,62
49,81
Djebel S.G.P.S, S.A.
41.246.565,42
19.128.035,61
3.393.194,30
1.362.292,81
39,50
7.555.574,07
Carlton Palácio -Soc.Const.Exp.Hot 44.494.835,33
9.045.605,58
8.918.015,74
-839.190,74
36,52
3.303.455,16
Guiatur - Empreend.Turísticos da
Guia Cascais,S.A.
3.258.410,00
3.006.143,00
310.688,00
24,91
811.669,93
-233.614,96
1.038.632,58
9.264.396,00
Intervisa, Travel Solutions,S.A.
5.025.905,38
-599.166,34
21.258.607,32
14.556,68
38,99
GP Pousadas, S.A.
61.925.526,00
6.177.013,00
33.480.551,00
-5.123.648,00
1,08
66.711,74
EuroAtlantic Airways S.A.
114.181.888,13
20.060.748,84
43.888.480,48
576.453,96
20,00
4.012.149,77
Em Euros
During 2009, the Company participated in the incorporation of “Pestana Cidadela, S.A.”, holding at the year-end 100%
of its share capital.
Other changes occurred during 2009 in Company’s financial investments portfolio were as follows:
n Increase of 2,33% in the share capital of Salvor S.A;
n The reduction of 15,20% in the capital of Pestana Investments Ltd, is due to the fact of Grupo Pestana SGPS, has
not follow the increase of capital to 11.050ME.
35
32. GUARANTEES PROVIDED
As at 31 December 2009, the Group assumed the following responsibilities with guarantees given to third parties
as follows:
Guarantees Bank guarantees
2009
6.250.000,00
6.250.000,00
Em Euros
36. SHARE CAPITAL
BREAKDOWN
As at 31 December 2009, the Company’s share capital is represented by 80.000.000 shares of Euro 1 each, fully
subscribed and realized.
37. COMPANIES HOLDING
MORE THAN 20%
OF THE SHARE CAPITAL
Pestana Luxemburgo - 26,25%
40. MOVEMENTS IN
SHAREHOLDERS EQUITY
In 2009, the movements in shareholders equity captions were as follows:
51 Share capital
53 Supplementary capital
54 Premiums on issuance of shares
55 Adjustments to investments in affiliated and associated companies
57 Reserves
Legal reserves
Other reserves
59 Retained earning
88 Net profit/(loss) for the year
Pening balance Increases Decreases 80.000.000,00 -
-
56.000.000,00 -
(1.500.000,00)
33.690.973,24 -
-
13.191.896,55 2.789.912,82 -
325.928,14 -
-
12.661.276,43 -
-
20.863.160,13 -
(30.908,34)
17.922.022,10 12.476.549,10 -
234.655.256,59 15.266.461,92 (1.530.908,34)
Net Profit distribution
Closing
balance
-
-
-
-
80.000.000,00
54.500.000,00
33.690.973,24
15.981.809,37
1.540.000,00 -
17.022.022,10 (17.922.022,10)
1.865.928,14
12.661.276,43
37.854.273,89
12.476.549,10
640.000,00 249.030.810,17
Euros
36
45. STATEMENT
OF FINANCIAL RESULTS
The financial results can be analyzed as follows:
Costs and losses Interests paid
Losses in group and associated companies
Financial investments adjustments
Foreign currency exchange losses
Other financial costs
Financial results
Profits and gains Interests received
Gains in group and associated companies
Foreign exchange gains
2009
2008
3.213.152,74 1.040.843,21 286.271,06 58.001,32 783.231,76 5.381.500,09 11.115.758,20 16.497.258,29 5.079.319,32
58.133,97
460.010,43
62.433,20
5.659.896,92
17.342.098,15
23.001.995,07
2009
2008
1.449.055,77 14.986.214,08 61.988,44 16.497.258,29 2.406.396,91
20.595.598,16
23.001.995,07
Euro
46. STATEMENT
OF EXTRAORDINARY RESULTS
The extraordinary results can be analyzed as follows:
Costs and losses 2009
Fines and penalties
Other extraordinary cost and losses
Extraordinary results
Profits and gains 49,88 1.009,12 1.059,00 771.713,75 772.772,75 2009
Gains in fixed assets
Prior year gains
Other extraordinary profits and gains
772.771,75 -
1,00 772.772,75 2008
1.800,01
1.800,01
53.730,07
55.530,08
2008
54.831,58
698,50
55.530,08
Euro
37
48. OTHER RELEVANT
IN FORMATION
LOANS
Short term
Internal loans
External loans
Commercial paper
42.361.000,00 5.794.261,34 -
48.155.261,34 Medium and long term
42.400.000,00
35.000.000,00
77.400.000,00
Euro
The external loans of medium and long term are payable as follows:
Year
2011
2012
2013
2014
2015
2016
2017
2018
2019
Opening Balance
Payment
42,400,000 41,000,000 34,825,000 28,650,000 22,350,000 16,050,000 9,750,000 6,450,000 3,150,000 Closing Balance
1,400,000 6,175,000 6,175,000 6,300,000 6,300,000 6,300,000 3,300,000 3,300,000 3,150,000 41,000,000
34,825,000
28,650,000
22,350,000
16,050,000
9,750,000
6,450,000
3,150,000
Euro
PUBLIC ENTITIES
As at 31 December 2009, the balances with public entities were as follows:
Debtor balances
16.966,13
22.926,78
223.531,46
263.424,37
Social Security
Corporate Income Tax:
Special Advance payment
Personnel Income Tax:
Withholding taxes
Creditor balances
Personnel Income Tax:
Withholding taxes
VAT
Social Security
Corporate Income Tax
Others
68.135,60
29.428,69
1.227,50
15,00
98.806,79
Euro
38
OTHER DEBTORS / CREDITORS
As at 31 December 2009, the other debtors/creditors balances can be analyzed as follows:
Debtors
Personnel
Debtors for Contract-CCV
Others
866,64
1.200.000,00
2.414.608,53
3.615.475,17
1.288.739,13
12.540,00
1.301.279,13
Creditors
Capital subscribed but not paid up
Consultants and advisors
Euro
ACCRUALS AND DEFERRALS
As at 31 December 2009, these captions breakdown can be analyzed as follows:
Interests receivable
Interest receivable
Others
6.435,34
10.382,79
16.818,13
67.667,96
583.844,85
3.460,67
7.235,18
662.208,66
2.400.000,00
Accrued costs
Holiday and holiday pay
Interests payable
Insurance
Others
677.296,17
677.296,17
Deferred costs
Advanced insurances paid
Others
Deferred income
Others - Brand cession
Em Euros
Funchal, April 30 th 2010
Dionísio Fernandes Pestana - President
Pietro Luigi Valle - Vice-President
The Official Accountant Jorge da Silva Figueira
39
CONSOLIDATED
Grupo Pestana, S.G.P.S., S.A.
Consolidated Balance Sheet
Assets
FIXED ASSETS:
Intangible Assets:
431 Start-up expenses
432 Research and development costs
433 Patents, brand names and other rights
434 Key money premiums
441/6 Intangible assets in progress
449 Advances paid on account of intangible assets
Consolidation differences
Tangible Assets:
421 Land and natural resources
422 Buildings and other constructions
423 Basic equipment
424 Transportation equipment
425 Tools
426 Administrative equipment
427 Containers
429 Other fixed assets
441/6 Fixed assets under construction
449 Advances paid on account of tangible assets
Financial Investments:
4111 Shares in group companies
4121+4131 Loans to group companies
4112 Shares in associated companies
4122+4132 Loans to associated companies
4113 Shares in participated companies
4133 Loans to participated companies
4113+414+415 Other financial investments
4123+4133 Other loans granted
441/6 Investments in progress
447 Advances paid on account of financial investments
CURRENT ASSETS:
Inventories:
36 Raw and subsidiary materials and consumables
35 Work-in-process
34 By-products and wastage
33 Finished and intermediary products
32 Goods
37 Advances paid on account of goods in transit
Receivables from third parties - long term:
211 Trade debtors
212 Trade debtors - bills receivable
218 Doubtful debts
24 Public entities
253+254 Other associated companies
251+255 Shareholders
2619 Advances to fixed assets suppliers
268 Other debtors
Receivables from third parties - short term:
211 Trade debtors
212 Trade debtors - bills receivable
218 Doubtful debts
253+254 Other associeted companies
229 Advances to suppliers
2619 Advances to fixed assets suppliers
24 Public entities
262+266+267+268+221 Other debtors
264 Capital subscribed but not paid up
Marketable securities and bonds:
1512 Shares in associated companies
1522 Bonds and other titles in associated companies
1513+1523+153/9 Other marketable securities
18 Other short term applications
Cash and banks:
12+13+14 Bank deposits
11 Cash
Accruals and deferrals:
271 Accrued income
272 Deferred costs
275 Deferred taxes asset
Total Depreciations
Total Adjustments
Total Assets
2009 Gross Assets
Depreciations and Ajustam. 2008 Net assets 3.481.272,83
3.027.029,60
454.243,23
14.947,90
14.947,90
0,00
20.526.034,46
8.881.007,31
11.645.027,15
1.938.447,07
826.155,46
1.112.291,61
4.250.000,00
0,00
4.250.000,00
0,00
0,00
0,00
57.268.964,99
36.213.049,73
21.055.915,26
87.479.667,25
48.962.190,00
38.517.477,25
75.152.693,03
0,00
75.152.693,03
458.040.365,82
154.532.624,65
303.507.741,17
195.661.552,04
101.455.686,69
94.205.865,35
2.974.485,49
2.434.081,64
540.403,85
740.913,92
541.040,99
199.872,93
16.469.228,82
14.110.675,07
2.358.553,75
0,00
0,00
0,00
765.953,29
139.056,73
626.896,56
50.091.233,88
0,00
50.091.233,88
321.131,51
0,00
321.131,51
800.217.557,80
273.213.165,77
527.004.392,03
0,00
0,00
0,00
0,00
0,00
0,00
17.368.533,17
0,00
17.368.533,17
0,00
0,00
0,00
2.435.968,66
0,00
2.435.968,66
29.503.536,80
0,00
29.503.536,80
5.194.603,33
9.113,10
5.185.490,23
0,00
0,00
0,00
0,00
0,00
0,00
5.000.000,00
0,00
5.000.000,00
59.502.641,96
9.113,10
59.493.528,86
1.602.542,30
0,00
1.602.542,30
24.762.211,08
0,00
24.762.211,08
0,00
0,00
0,00
9.893.016,14
0,00
9.893.016,14
1.626.222,23
128.822,75
1.497.399,48
0,00
0,00
0,00
37.883.991,75
128.822,75
37.755.169,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
2.287.076,74
0,00
2.287.076,74
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
2.287.076,74
0,00
2.287.076,74
30.813.224,43
382.237,84
30.430.986,59
16.753,60
0,00
16.753,60
5.990.772,15
5.979.330,10
11.442,05
1.455.765,97
0,00
1.455.765,97
1.396.672,32
0,00
1.396.672,32
108.596,23
0,00
108.596,23
6.634.012,00
0,00
6.634.012,00
7.411.979,92
0,00
7.411.979,92
31.522.995,86
381.952,32
31.141.043,54
0,00
0,00
0,00
85.350.772,48
6.743.520,26
78.607.252,22
0,00
0,00
0,00
0,00
0,00
0,00
1.622.508,68
0,00
1.622.508,68
121.030,07
5.313,66
115.716,41
1.743.538,75
5.313,66
1.738.225,09
42.961.911,49
42.961.911,49
1.488.935,02
1.488.935,02
44.450.846,51
44.450.846,51
1.570.991,48
1.570.991,48
5.734.909,73
5.734.909,73
4.727.623,44
4.727.623,44
12.033.524,65
12.033.524,65
322.184.468,87
6.877.656,67
1.130.949.617,89
329.062.125,54
801.887.492,35
Net assets
425.060,42
3.600,00
11.666.714,02
1.222.216,65
4.377.216,41
0,00
26.073.597,32
43.768.404,82
61.492.177,61
277.839.867,44
83.000.391,35
685.208,89
198.341,43
2.405.491,10
0,00
510.540,48
80.300.790,81
514.100,69
506.946.909,80
0,00
0,00
13.524.154,72
6.000.000,00
7.270.834,71
2.983.819,99
10.591.084,61
0,00
1.840.183,61
0,00
42.210.077,64
1.929.111,78
17.899.442,66
0,00
10.225.586,21
3.069.771,19
0,00
33.123.911,84
0,00
0,00
0,00
0,00
2.049.206,74
0,00
0,00
0,00
2.049.206,74
34.528.663,64
0,00
845.472,86
4.146.320,39
4.794,79
409.812,31
7.466.706,93
10.520.569,54
11.017.568,69
602.195,61
69.542.104,76
0,00
0,00
1.440.164,72
8.810.377,06
10.250.541,78
30.522.711,04
728.661,62
31.251.372,66
2.068.995,25
8.640.057,21
4.777.216,05
15.486.268,51
754.628.798,55
Euro
41
Consolidated Balance Sheet
SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY:
51 Share capital
52 Own shares:
521 Par value
522 Premiums and discounts
53 Supplementary capital
54 Premiums on issuance of shares
55 Adjustments to investments in affiliated and associated companies
56 Revaluation reserves
Conversion differences
Reserves:
571 Legal reserves
572 Statutory reserves
573 Contractual reserves
574 to 579 Other reserves
59 Retained earnings
Sub total
88 Net profit for the year
89 Anticipated dividends
Total Shareholders’ equity
Minority Interests
LIABILITIES:
Provisions:
291 Provision for pensions
292 Provision for taxes
293/8 Other provisions
Debts to third parties - long term:
231+12 Bank loans
2612 Fixed assets suppliers - bills payable
239 Other loans
2611 Fixed assets suppliers
2613 Fixed assets suppliers - Leasing
24 Public entities
265+268 Other creditors
Debts to third parties - short term:
Bonds:
2321 Convertible
2322 Non convertible
233 Other titled loans
231+12 Bank loans
269 Advances received on account of sales
221 Trade creditors
228 Trade creditors - outstanding invoices
222 Trade creditors - bills payable
2612 Fixed assets suppliers - bills payable
253+254 Other associated companies
219 Advances from trade debtors
239 Other loans
2611 Fixed assets suppliers
2613 Fixed assets suppliers - Leasing
24 Public entities
262+263+264+265+267+268+211 Other creditors
Accruals and deferrals:
273 Accrued costs
274 Deferred income
276 Deferred taxes liability
Total liabilities
Total Shareholders’ equity, Minority interests and Liabilities.
2009 80.000.000,00
0,00
0,00
54.500.000,00
33.690.973,24
-658.896,33
0,00
27.593.066,84
-7.157.450,64
1.865.928,12
0,00
0,00
18.686.949,23
63.131.809,94
271.652.380,40
6.610.292,92
0,00
278.262.673,32
47.663.710,10
7.964,00
72.753,32
1.003.983,83
1.084.701,15
303.640.196,49
0,00
9.590.586,64
13.622.970,90
0,00
13.057.324,64
0,00
0,00
339.911.078,67
0,00
0,00
0,00
44.688.317,07
0,00
12.295.567,54
36.482,78
0,00
0,00
127.715,89
376.988,37
1.921.324,98
575.056,18
1.570.012,52
1.723.164,61
3.536.349,08
16.087.090,70
82.938.069,72
18.191.304,75
13.033.207,26
20.802.747,38
52.027.259,39
475.961.108,93
801.887.492,35
2008
80.000.000,00
0,00
0,00
56.000.000,00
33.690.973,24
-1.815.077,14
-175.665,12
26.856.154,68
-1.452.626,68
965.928,14
0,00
0,00
18.686.949,23
41.247.830,28
254.004.466,63
14.412.104,96
0,00
268.416.571,59
39.368.825,38
7.832,47
50.698,80
311.534,93
370.066,20
214.169.035,13
0,00
5.774.519,54
12.653.162,19
0,00
11.065.026,83
0,00
0,00
243.661.743,69
0,00
0,00
0,00
95.272.377,30
0,00
16.017.548,33
41.587,66
0,00
0,00
0,00
373.396,97
11.154.853,08
239.484,94
4.880.633,75
1.299.250,27
3.842.182,13
9.293.780,98
142.415.095,41
20.325.361,80
18.051.108,33
22.020.026,15
60.396.496,28
446.843.401,58
754.628.798,55
Euro
42
Consolidated Income Statement By Natures
for the year-ended 31 december 2009
COSTS AND LOSSES
2009
2008
15.378.310,32
1.632.262,90
20.467.711,79
35.846.022,11
30.681.799,15
69.846.129,54
49.200.721,27
50.892.596,45
41.548,46
93.749,26
13.774.285,68
63.016.555,41
13.840.322,95
26.964.887,92
26.751.990,42
1.349.198,88
1.111.227,61
690.403,12
29.004.489,92
79.906,82
6.815.963,32
5.779.786,32
1.014.703,35
7.830.666,67
1.188.085,28
205.543.863,65
6.201.186,91
8.373.109,12
Depreciations and adjust. for financial invest. 683+684) Interests and similar costs:
0,00
438,48
Group Companies
24.414,31
13.623,15
Losses on Group Companies
23.385.378,04
29.610.979,26
24.037.347,49
Others (681+685+686+687+688)
235.154.842,91
(C) 3.646.996,36
69 Extraordinary costs and losses
238.801.839,27
(E) 2.264.799,05
86 Income tax for the year
241.066.638,32
(G) 5.509.911,86
Profit attributable to minority interests
6.610.292,92
88 Net profit for the year
61 Cost of goods sold and materials consumed:
Goods
Raw and subsidiary materials and consumables
62 External services and supplies from third parties
64 Personnel costs:
Wages (641+642)
Social charges:
Pensions (643+644)
Others (645/8)
Depreciations and amortizations of fixed assets (662+663)
Adjustments (666+667)
67 Provisions
63 Taxes
65 Other operational costs and losses
(A)
PROFITS AND GAINS
79 Extraordinary profits and gains
SUMMARY
Operational profit: (B)-(A)=
Financial loss: (D-B)-(C-A)=
Current profit: (D)-(C)=
Profit before income tax: (F)-(E)=
Consolidated profit for the year including
minority interests (F)-(G)=
69.827.214,06
64.826.668,66
27.943.124,85
6.967.871,60
201.878.941,22
32.424.518,24
234.303.459,46
6.109.252,70
240.412.712,16
1.468.336,99
241.881.049,15
1.218.437,39
14.412.104,96
253.186.843,10
2009
71 Sales:
Goods
Products
72 Services rendered
Increase in stocks of finished products and work-in-process
75 Self constructed fixed assets
73 Supplementary revenue
74 Operational grants
76 Other operational profits and gains
77 Reversions of depreciations and adjustments
(B)
782Gains in group and associated companies:
Group companies
Other companies
784Dividends received
Gains in marketable securities and other financial aplications:
Group companies
Others (7812+7815+78162+783)
Other interests and similar gains:
Group companies
Others (7811+7813+7814+7818+785/788)
32.314.062,05
9.507.139,16
2.895.201,23
257.511.591,50
2008
5.006.375,35
3.751.002,32
208.766.329,14
221.168.669,53
213.745.050,30
309.907,66
88.657,96
6.532.466,40
4.998.141,00
281.207,03
420.497,62
127,73
800.008,20
7.640.293,95
14.454.095,11
4.289.411,91
236.021.330,26
358.932,04
2.855.668,13
695.097,06
0,00
3.337.437,01
1.679.205,31
132.820,61
652.803,38
172.464,35
266.349,34
3.364.035,14
8.060.786,21
8.135.754,07
244.082.116,47
9.104.726,63
253.186.843,10
(F) 30.477.466,61
-21.550.193,05
8.927.273,56
14.385.003,83
12.120.204,78
222.502.427,97
111.665,27
1.844.951,31
10.508.058,73
234.967.103,28
13.589.780,23
248.556.883,51
8.954.707,99
257.511.591,50
33.088.162,06
-18.834.738,01
14.253.424,05
17.098.879,34
15.630.542,35
Euro
43
Consolidated Income Statement by Functions
for yhe Year-ended 31 December 2009
2009 2008
221.168.669,53
222.502.427,97
-147.455.483,79
-141.690.191,50
Gross margin 73.713.185,74
80.812.236,47
Sales and services rendered
Cost of sales and services rendered
Other operational profits and gains
23.957.387,36
21.419.383,30
Distribution costs
-5.751.183,73
-7.185.677,11
Administrative costs
-23.332.706,21
-25.059.947,76
Other operational costs and losses
-32.651.486,28
-34.052.377,55
Operational profit 35.935.196,88
35.933.617,35
Net Funding costs
-20.021.342,90
-15.901.593,42
Gains/(Losses) in group and associated companies
-2.356.767,82
-3.585.947,97
Gains/(Losses) in other investments
827.917,67
652.803,38
Unusual gains/(losses)
0,00
0,00
Current profit and loss 14.385.003,83
17.098.879,34
-2.264.799,05
-1.468.336,99
Current profit and loss after income tax 12.120.204,78
15.630.542,35
Income tax over current profit and loss
Extraordinary result
Income tax over extraordinary result
0,00
0,00
Loss attributable to minority interests
-5.509.911,86
-1.218.437,39
Net profit for the year 6.610.292,92
14.412.104,96
0,00
0,00
Net profit per share 0,083
0,180
Euro
44
Consolidated Statement Of Cash Flows
for yhe Year-ended 31 December 2009
2009 OPERATING ACTIVITIES
Cash receipts from trade debtors
Cash paid to trade creditors
Cash paid to employees
2008
252.601.317,95
-145.930.073,67
-60.796.197,77
259.041.005,48
-126.363.976,78
-63.676.373,77
Operating activities 45.875.046,51
820.010,23
-12.210.925,88
69.000.654,93
-5.893.333,00
-4.774.729,53
Cash-flow before extraordinary items 34.484.130,86
-799.265,54
-73.932,02
58.332.592,40
0,00
0,00
Net cash-flow from operating activities 33.610.933,30
INVESTMENT ACTIVITIES
Receipts from:
15.602.901,61
Tangible assets
910.724,70
Intangible assets
0,00
Government grants
1.235,64
Interests and similar profits
354.249,38
Dividends
0,00
Other receipts from investment activities
5.725,35
.....
Payments of:
-49.064.598,17
Tangible assets
-60.146.912,93
Intangible assets
-981.790,35
Other payments of investment activities
-327.145,11
.....
Net cash-flow from investment activities -93.645.609,88
FINANCING ACTIVITIES
Receipts from:
Loans obtained
122.678.214,05
Capital increases, supplementary capital and premiums
5.383.405,00
Grants and donations
2.391.652,36
Sales of own shares
0,00
Coverage of previous years losses
0,00
Other receipts from financing activities
580.845,82
.....
0,00
Payments of:
Loans obtained
-28.998.549,93
Capital amortization of leasing contracts
-1.551.814,44
Interests and similar costs
-20.352.131,54
Dividends
-3.825.031,00
Capital reimbursement and supplementary capital
0,00
Acquisition of own shares
0,00
Other payments of financing activities
-2.433.023,16
.....
0,00
Net cash-flow from financing activities 73.873.567,16
Net increase/(decrease) in cash and cash equivalents
13.838.890,58
Cash of new consolidated companies
0,00
Exchange rate effect
-1.115.279,06
Cash and cash equivalents at the beginning of the period
31.712.224,16
44.435.835,68
58.332.592,40
Income taxes received/(paid
Other payments of operating activities
Cash received related to extraordinary items
Cash payments related to extraordinary items
Notes to the Cash-Flow Statement
Cash
Bank deposits - current accounts
Other deposits until 3 months
Other financial aplications until 3 months
Bank overdrafts
Other Cash and cash equivalents
2009 1.488.935,02
37.200.136,58
7.500.000,00
0,00
(1.753.235,92)
Cash and cash equivalents at the end of the period 44.435.835,68
1.753.235,92
Cash and cash equivalents at Balance Sheet 46.189.071,60
25.476.393,05
950.824,59
0,00
3.886.006,13
4.174.390,24
423.720,00
82.619,00
-38.912.356,34
-71.810.896,43
-431.923,10
-2.042.449,05
-78.203.671,91
73.095.883,53
1.115.755,68
102.473,00
0,00
0,00
737.937,34
0,00
-34.321.192,29
-2.066.068,37
-18.944.350,63
-4.310.535,00
0,00
0,00
-1.282.602,90
0,00
14.127.300,36
-5.743.779,15
0,00
565.335,15
36.890.668,16
31.712.224,16
2008 728.661,62
37.959.588,10
1.373.500,00
1.440.164,72
(9.789.690,28)
31.712.224,16
9.789.690,28
41.501.914,44
Euro
45
NOTES
to the Consolidated Financial Statements
Notes to the Consolidated
Introduction
As at 31 December 2009, the Group Pestana includes
30 hotels (4 under construction), 5 golf courses,
1 casino, 1 thematic park, 45 lodging-houses, 1 travel
agency and the management entity of Madeira’s International Business Center.
Group Pestana comprises Grupo Pestana, S.G.P.S.,
S.A. (Grupo Pestana SGPS or Company) and subsidiary
companies (see Note 1), being Tourism its main activity.
The Company began the preparation of consolidated
financial statements in 2003.
Hotel Location
Hotel Pestana Carlton Madeira
Pestana Miramar
Pestana Village
Pestana Palms
Pestana Atlantic Gardens
Pestana Casino Park Hotel
Pestana Bay
Pestana Atalaia c)
Pestana Grand
Madeira Magic
Casino da Madeira
Centro Intern. Neg. Madeira
Pestana Porto Santo Pestana Promenade
Pestana Palace
Pestana Porto
Pestana Atlantic Gardens
Pestana Sintra Golf
Pestana Beloura Golf Resort
Pousadas de Portugal (Rede)
Pestana Cidadela b)
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Lisboa
Porto
Cascais
Sintra
Sintra
Portugal
Cascais
Pestana Alvor Praia
Pestana Alvor Park
Pestana Delfim
Pestana Dom João II
Pestana Alvor Atlantico
Pestana Levante
Pestana Porches Praia
Pestana Viking
Pestana Gramacho Golf Resort
Pestana Vale da Pinta Golf Resort
Pestana Silves Golfe Resort
Pestana Alto Golfe Resort
Pestana Convento Carmo
Pestana Trópico
Pestana Kruger Lodge
Pestana Buenos Aires
Pestana Caracas Pestana Londres a)
Pestana Miami b)
Pestana Montevideu b)
Pestana Berlim b)
Location
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Brasil
Cabo Verde
Africa Sul
Argentina
Venezuela
Reino Unido
USA
Uruguai
Alemanha
a) = Inauguration on first semester of 2010
b) = In Construction
c) = Sold at the end of 2009
Besides the traditional hotel management activity, the
Group also explores resorts in Timeshare system, tourist
real estate activity, tourist distribution and entertainment.
Plan of Accounts (POC). Standard notes not included
are either not applicable to the Company or their presentation is not relevant to the reading of the referred
consolidated financial statements.
The notes to the financial statements follow the sequential numbering defined in the Portuguese Official
47
Basis for consolidation
the Decree-law 238/91, of 2 July, and with the accounting directives from “Comissão de Normalização
Contabilística” (CNC).
The consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in Portugal and with the consolidation
rules defined in POC, with the changes introduced by
1. CONSOLIDATED
COMPANIES
The companies included in the consolidated financial statements, their registered office, consolidation method and
proportion of capital held, as at 31 December 2009, are as follows:
Companys’ name / Registered Office
%
Capital held
% of
control
Consolidation
Method
Grupo Pestana, S.G.P.S., S.A. Holding Holding Full
Largo António Nobre, 1 -Funchal Pestana Investimentos - Projectos Industriais e Serviços S.A.
100.00%
100.00%
Full
Largo António Nobre, 1 - Funchal
M. & J. Pestana - Sociedade de Turismo da Madeira, S.A.
100.00%
100.00%
Full
ITI - Sociedade de Investimentos Turísticos na Ilha da Madeira, S.A.
100.00%
100.00%
Full
Rua Imperatriz D. Amélia, 55 - Funchal
Hotéis Atlântico - Sociedade Imobiliária e de Gestão de Hotéis, S.A.
99.92%
99.92%
Full
Ponta da Cruz - Sociedade Imobiliária e de Gestão de Hotéis, S.A.
51.65%
51.65%
Full
Rio de Prata - Consultadoria e Participações, S.A.
99.90%
99.98%
Full
CapeGreen - Consultadoria Económica e Participações, S.A.
54.88%
54.28%
Full
Energólica - Produção de Energia Eléctrica, S.A.
63.00%
63.00%
Full
Pestana Saúde e Vida, S.A.
100.00%
100.00%
Full
Carlton Life, S.G.P.S., S.A.
65.00%
65.00%
Full
Av Visconde Valmor, 66 - 4º - Lisboa
Carlton Life – Serviços de Consultoria, S.A.
65.00%
100.00%
Full
Carlton Life – Cuidados de Apoio, S.A.
65.00%
100.00%
Full
Carlton Life- Residências e Serviços, S.A.
65.00%
100.00%
Full
Pestana Management, S.A.
100.00%
100.00%
Full
Mundo da Imaginação, S.A.
78.34%
77.50%
Full
Aplicações Múltiplas - Sociedade de Aplicações Financeiras, S.A.
83.00%
83.00%
Full
48
%
Capital held
% of
control
Consolidation
Method
Rau Jau, 54 - Lisboa
Grupo Pestana Pousadas - Investimentos Turísticos, S.A.
59.88%
59.88%
Full
Rua Jau, 54, freguesia de Alcântara, Lisboa
Carlton Palácio - Sociedade de Construção e Exploração Hoteleiras, S.A.
89.21%
100.00%
Full
Rua Tierno Galvan, Torre 3–6º - sala 601 - Lisboa
Porto Carlton - Sociedade de Construção e Exploração Hoteleira, S.A.
49.80%
60.00%
Full
Praça da Ribeira, nº1, 4050-513 Porto
Pestana Cidadela- Investimentos Turisticos, S.A.
100.00%
100.00%
Full
Av. Júlio Carvalho Costa, 115 - Cascais
Quinta da Beloura Golfe, S.A.
79.02%
87.81%
Full
Rua das Sesmarias, nº 3, Quinta da Beloura, Sintra
Salvor, Sociedade de Investimento Hoteleiro, S.A.
94.52%
94.52%
Full
R. Rodrigo da Fonseca, 77 - 5º - Lisboa
Carvoeiro Golfe, S.A.
94.52%
100.00%
Full
Ald. Turístico do Gramacho, Lt4 - Carvoeiro
Amoreira - Aldeamento Turístico, Lda
94.52%
100.00%
Full
R. da Hortinha, 13 - 2A - Portimão
Eurogolfe, S.A.
94.52%
100.00%
Full
Sociedade Imobiliária Troia B3, S.A.
75.61%
80.00%
Full
R. da Prata, 10 - Lisboa
Sociedade de Investimento Hoteleiro D. João II, S.A.
94.52%
100.00%
Full
Praia Srª da Rocha, Alporchinhos - Porches - Lagoa
Viquingue, Sociedade Turística, S.A.
94.52%
100.00%
Full
Praia Srª da Rocha, Alporchinhos - Porches - Lagoa
Soc. Invest. Imob. Eira da Loba Lda
89.79%
95.00%
Full
São Pedro e Poço dos Pardais - Lagoa
Carvoeiro Golfe Soc Mediação Imob Lda
94.52%
100.00%
Full
Rolldown Golfe, Lda
51.04%
54.00%
Full
Rua da Hortinha, 13, 2º A, 8500-593 Portimão
Natura XXI, Lda
94.52%
100.00%
Full
Apartado 1011, 8401-908- Carvoeiro
Empreendimentos Turísticos, Lda
54.88%
100.00%
Full
Cidade da Praia - Ilha de Santiago - Cabo Verde
Argentur Inversiones Turisticas S.A.
99.96%
100.00%
Full
Buenos Aires - Argentina
Cota Quarenta, S.A.
99.99%
99.99%
Full
Largo António Nobre 1 – Funchal
SDM- Sociedade Desenvolvimento da Madeira, S.A.
15.00%
70.00%
Full
Rua da Mouraria 9, 1º andar, 9000-047 Funchal
Convento do Carmo, S.A.
44.91%
75.00%
Full
Rua do Carmo, s/n Pelourinho, 40301-330 Salvador
Wild Break 29 (PTY), Lda
56.24%
50.00%
Full
Malelane 1320 - South Africa
Southern Escapes Travel And Tourism (PTY), Lda
56.24%
50.00%
Full
1 Hettie Street Cyrildene - 2198 Johannesburg
Pestana Inversiones, S.L.
99.96%
99.96%
Full
Pradillo, 5 Bajo Ext. dcha. -28002 Madrid Inversiones VistalParque, S.A.
46.41%
76.44%
Full
Primera Avenida Urbanización Santa Eduvigis-1071 Caracas
Herdade da Abrunheira, S.A.
66.67%
66.67%
Full
Heradade Abrunheira, Freguesia Urra-Portalegre
Surinor, S.A.
84.76%
100.00%
Full
Rua 25 Maio, nº 455-Piso 2 - Montevideo
Pestana Miami, LLC
59.95%
60.00%
Full
701 Brickell Ave STE 3000 - Miami FL 33131
Enatur - Empresa Nacional de Turismo, S.A.
29.34%
49.00%
Equity Method
Avenida Santa Joana Princesa , nº 10, 1700 Lisboa
Albar - Sociedade Imobiliária do Barlavento, S.A.
49.81%
49.81%
Equity Method
Rua Tierno Galvan, Torre 3, sala 602, Amoreiras, 1070-274 Lisboa
EuroAtlantic Airways, Transportes Aéreos S.A.
20.00%
20.00%
Equity Method
Rua das Sesmarias, 3 Quinta da Beloura 2710-692 Sintra
Intervisa-Viagens e Turismo, S.A.
38.99%
38.99%
Equity Method
Av. Fontes Pereira de Melo, nº6-1050-121 Lisboa
49
2. COMPANIES EXCLUDED
FROM THE CONSOLIDATED
Djebel S.G.P.S, S.A.
Largo António Nobre, 1, Funchal
%
Capital held
%
control
Consolidation
method
39,50%
39,50%
Acquisition Cost
The share capital held in Djebel is booked at the acquisition cost, as the last share capital acquired of 20% is available
for sale.
6. OTHER FINANCIAL
INVESTMENTS (% OF OWNED
SHARES GREATER THAN 10%)
Salvintur, Sociedade de Investimentos Turísticos, S.A. Rua Jau, 54 -Lisboa
%
Capital held
Shareholders’
Equity
Last year net
profit
17,96%
8.013.130,10
477.723,65
7. AVERAGE
NUMBER OF EMPLOYEES
During 2009 and 2008, the average number of employees in the companies included in consolidation was 3.337 and
3.624, respectively.
8. APPROPRIATE
AND FAIR PRESENTATION
In order to allow the appropriate and fair presentation of the consolidated financial statements, all
income and expenses related to Timeshare transactions in units managed by the consolidated companies are not deferred throughout the period of the
related contract but fully recognized in the profit
and loss for the year in which they occur.
The impact of this procedure in the consolidated financial statements can be analyzed as follows:
50
8. APPROPRIATE
AND FAIR PRESENTATION
Description
2009
Inventories
Deferred costs
Sub-Total
Net results
Retained earnings
Minority interests
Sub-Total
Deferred income
Deferred tax liabilities
Sub-Total
Services rendered
Sub-Total
Cost of goods sold
Supplies and services from third parties
Deferred tax assets
Minority interests
Sub-Total
-6.509.050,42
-45.999.724,70
-52.508.775,12
65.962.885,93
-1.860.360,82
15.117.705,25
721.431,17
79.941.661,52
-132.450.436,64
0,00
-132.450.436,64
2.827.271,28
2.827.271,28
1.268.584,41
3.875.495,16
-463.361,66
6.914,19
4.687.632,10
2008
-2.595.757,95
-42.124.229,54
-44.719.987,49
66.292.913,49
3.596.279,93
13.171.853,09
849.828,10
83.910.874,60
-149.608.580,74
20.977.718,65
-128.630.862,09
6.574.287,48
6.574.287,48
-217.710,46
5.511.736,08
-2.334.155,91
18.137,85
2.978.007,55
Euro
The increase of the deferred income is explained by the huge success of the timesharing products sales. The decrease
in deferred taxes is the result of a reduction occurred in the Portuguese the tax rate.
10. CONSOLIDATION
DIFFERENCES
Included in Shareholders’ Equity
The balances presented in this caption arise from the
first financial statements’ consolidation procedure
and represent the difference between the acquisition
cost and its shareholders’ equity proportional value
as at 1 January 2003. The referred amount includes
the net profits and reserves of affiliated companies,
accumulated until the date of the first financial statements consolidation procedure. This account also includes differences identified during the intra-group
balances reconciliation, the impact of these differences
are immaterial in the consolidated financial statements.
As at 31 December 2009, this caption can be analyzed as follows:
Company
2009 2008 Financial investments
27.519.103,03
26.846.642,01
Balances and transactions reconciliation
73.963,81
Exchange rate conversion
Total
9.512,67
-7.157.450,64
-1.452.626,68
20.435.616,20
25.403.528,00
Euro
51
Included in Intangible Assets
This caption balance as at 31 December 2009 includes
the differences between the acquisition cost and the
proportional value of the shareholders’ equity of the
subsidiaries at the acquisition date, for acquisitions
Company
M&J Pestana
Hoteis Atlantico
Capegreen
Energólica
Carlton Palacio
Porto Carlton
Quinta Beloura
Guiatur
Viquingue
Enatur
Eira da Loba
Soc. Agricola dos Arcos
Natura XXI, Lda.
Empreendimentos Turisticos
Argentur
Inversiones Vistalparque
after 1 January 2003 (after first consolidation),
and can be presented as follows (net of accumulated
depreciations):
2009
Years
2008
14.729.227,58
10
18.144.504,61
0,00
5
0,00
451.525,32
5
0,00
0,00
5
0,00
1.431.355,40
10
1.717.626,46
0,00
5
34.759,36
745.222,71
6
698.199,63
0,00
5
115.211,38
340.572,02
8
681.144,47
1.151.214,48
10
1.534.952,64
226.572,53
8
290.924,95
368.277,70
8
457.353,59
650.747,15
8
759.205,01
346.557,56
8
693.115,10
201.138,90
6
395.261,57
413.503,91
5
551.338,55
21.055.915,26
32.204.585,94
Total Euro
17. DEPRECIATION
OF THE CONSOLIDATION DIFFERENCES
The consolidation differences are depreciated over the estimated investments’ payback period that, in some cases,
can exceed the five years term (see Note 10).
22. GUARANTEES PROVIDED
As at 31 December 2009, the Group has assumed responsibilities with guarantees given to third parties as follows:
Mortages
2009
Mortgages over hotels buildings
Mortgages over lands
141.173.179,24
38.782.426,06
107.094.818,18
56.501.077,37
179.955.605,30
163.595.895,55
2009
2008
Guaranteed
Surety bonds and Liabilities coverage
Bank guarantees
Loans pledges
2008
29.350.125,49
45.849.564,96
2.195,00
34.898.896,86
52.716.485,37
2.195,00
75.201.885,45
87.617.577,23
Euro
The increase in mortgages and guarantees is mainly related to the hotel “Pestana Caracas” and its related debt,
expressed in Bolivares Fuertes (Venezuela).
52
23. BASIS OF PRESENTATION
AND ACCOUNTING PRINCIPLES
Basis of Presentation
a) Intangible Assets
The accompanying consolidated financial statements have been prepared in a going concern basis and based on the accounting books and records
of the companies included in the consolidation (see
Note 1), maintained in accordance with generally accepted accounting principles in Portugal (“PGAAP”).
The patents, brand names and other rights relates
to the amount paid for the “Pousadas de Portugal”
concession and is being depreciated by the correspondent concession period.
The consolidation differences are depreciated over
the investments’ estimated payback period.
Consolidation Principles
The remaining intangible assets are accounted for at
acquisition cost and depreciated on a straight line
basis over a 6 years period.
The consolidation of the subsidiaries stated on Note
1 was prepared according to the full consolidation
method. The transactions and relevant balances between the companies were eliminated in the consolidation process. The amount related to third parties
participation in subsidiaries’ capital is stated in the
caption Minority interests. The goodwill was accounted for in intangible assets (consolidation differences) and depreciated over the estimated period
for the investment payback period. The remaining
consolidation differences, resulting from the difference between the acquisition cost and its shareholders’ equity proportional value, were accounted for
in Shareholders’ equity of the consolidated balance
sheet.
b) Tangible Assets
Tangible assets acquired until 31 December 1997 are
accounted at revaluated cost according to official
decree-laws (see Note 41) based upon price-adjustment factors. The remaining tangible assets are valued at acquisition cost.
Depreciation is provided on a straight-line basis according to the following estimated useful lives:
Financial investments in associated companies referred in Note 1, are recorded in the consolidated
balance sheet by its acquisition value or, if lower, by
the estimated net realizable value. This amount is
adjusted by the equity method usage.
40
Basic equipment
Financial investments corresponding to less than
20% of capital held are registered at acquisition cost
or, if lower, at the estimated net realizable value.
Hotel furniture
Clothes and Towels
4-10
Dishes, Glasses and Cutlery
6-8
Decoration
Other
16
8
14-20
Main Accounting Principles
The following is a summary of the most significant
accounting principles followed in the preparation
of the accompanying consolidated financial statements:
Years
53
Bus vehicles
7
Car vehicles
4
Tools
8-10
4-8
Other tangible assets
4-8
cludes direct costs and expenditures. This valuation
does not exceed the market value.
c) Financial leases
Financial leases are recorded in the financial statements as tangible assets at their equivalent capital
value and are depreciated over their useful lives (see
Note 23.b). The corresponding liability is recorded
as a creditor balance and the interest element of
the lease rental is charged against profit and loss
account over the primary lease period.
Adjustments to stocks correspond to the difference
between the cost value and the respective inventory net realizable value.
f) Adjustment for doubtful debts
When the estimated recovering value of trade debtors’ balances is less than the accounted value, the
estimated loss is covered with an adjustment for
doubtful debts.
d Financial Investments
Financial investments in associated companies are
accounted for at its acquisition cost or, if lower, at
the estimated net realizable value. This amount is
adjusted by the equity method.
g) Marketable securities and bonds
Marketable securities and bonds are stated at the
lower of cost or market value.
Financial investments corresponding to participations less than 20% of the companies capital are
registered at acquisition cost or, if lower, at the estimated net realizable value.
h) Accrual basis
Costs and revenues are recorded during the year to
which they refer regardless of when they are paid
or received, in accordance with the accrual basis
principle. Differences between amounts received
and paid and the corresponding revenue and expenditure are recorded under accruals and deferrals.
e) Inventories
Goods, raw and subsidiary materials and consumables are valued at the acquisition cost, which is lower than the market value (being the cost generally
determined on the basis of the average purchase
cost). Finished, semi-finished products and work
in process are valued at production cost, which in-
54
Deferred taxes assets and liabilities are calculated,
and annually revalued, using the tax rates that are
expected to be in force at the time of reversion of
the respective temporary differences.
i) Timeshare income and expenses
All income and expenses related to Timeshare
transactions in units managed by Grupo Pestana
SGPS are not deferred throughout the period of the
related contract but fully recognized in the profit
and loss for the year in which they occur.
A deferred taxes asset is registered only when there
are reasonable expectations of sufficient future taxable profits. At the balance sheet date is made a
revaluation of the temporary differences underlying
deferred taxes asset, in order to register or adjust it
according to current expectations.
j) Governmental grants
The non refundable subsidies received to finance
the acquisition of tangible assets are accounted
for as deferred income and registered in the profit
and loss account proportionally to its depreciation
charge.
n) Financial statements expressed in
foreign currencies
The financial statements of Group and associated
companies expressed in foreign currency were converted into Euros using the respective exchange
rate ruling on at year end. The profit and loss accounts were converted into Euro at the average exchange rate of the year. The equity accounts were
converted into Euros at historical exchange rates.
l) Assets and liabilities expressed in foreign
currencies
All assets and liabilities expressed in foreign currency have been converted into Euros using the exchange rate ruling on the balance sheet date and
published by Banco de Portugal.
Favorable and unfavorable exchange rate differences are recorded in the profit and loss account for
the year in which they arise.
Exchange rate differences, resulting from the conversion into Euros of associated companies’ financial statements issued in foreign currencies, have
been included in Shareholders’ equity in the caption Conversion differences.
m) Deferred taxes
Deferred taxes relates to temporary differences between the carrying value of assets and liabilities
and the corresponding amounts for tax purposes.
55
24. EXCHANGE RATES USED
EURO
Assets and liabilities expressed in foreign currencies have been converted into Euro using the following exchange
rates:
United States Dollar
South African Rand
Great Britain Pound
Mozambique Metical
Cape Verde Escudo
Argentine Peso
Brazilian Real
Bolivar Fuerte
Uruguayan Peso
31|12|09
1.4406
10.666
0.8881
44.1500
110.265
5.4695
2.5113
6.1946
28.1637
31|12|08
1.3917
13.0667
0.9525
35.2242
110.2650
4.8736
3.2436
3.0371
33.9575
27. FIXED ASSETS
MOVEMENTS
During 2009, the movements occurred in fixed assets, as well as in the related accumulated depreciations and
adjustments, were as follows:
GROSS AMOUNTS
Opening Balance Increases Disposals Intangible assets:
Start-up expenses
Key money premiums
Intangible asstes in progress
Transfers and write-off Closing
Balance
3.712.019,37 -
6.334,42 -
(237.080,96)
14.947,90 -
-
-
-
3.481.272,83
14.947,90
19.499.223,49 -
426.810,97 -
600.000,00 20.526.034,46
1.801.346,81 -
137.100,26 -
-
1.938.447,07
4.377.216,41 -
-
-
(127.216,41)
4.250.000,00
Advances paid on account of intangible fixed assets
-
-
-
-
-
-
56.876.307,68 -
392.657,31 -
-
57.268.964,99
86.281.061,66 -
962.902,96 -
235.702,63 87.479.667,25
Tangible assets:
Land and natural resources
Basic equipment
Tools
Containers
Other fixed assets
Fixed assets under construction
Advances paid on account of tangible fixed assets
Shares in associated companies
Loans to associated companies
Shares in participated companies
Loans to participated companies
Other financial investmens
Other loans granted
Investments in progress
Advances paid on account of financial investments
61.492.177,61 -
6.061.888,53 (12.818,80)
7.611.445,69 75.152.693,03
426.549.393,14 -
6.174.255,46 (205.016,23)
25.521.733,45 458.040.365,82
178.302.055,49 -
11.231.007,40 (908.533,68)
7.037.022,83 195.661.552,04
3.195.255,24 -
10.100,04 (17.359,07)
(213.510,72)
2.974.485,49
708.654,10 -
7.190,32 (36.885,27)
61.954,77 740.913,92
16.110.809,04 -
1.007.194,71 (490,00)
(648.284,93)
16.469.228,82
-
-
-
-
-
-
601.801,96 -
-
-
164.151,33 765.953,29
80.300.790,81 -
2.812.617,62 -
(33.022.174,55)
50.091.233,88
514.100,69 -
-
-
(192.969,18)
767.775.038,08 -
27.304.254,08 (1.181.103,05)
6.319.368,69 321.131,51
800.217.557,80
-
-
-
-
-
-
-
-
-
-
-
-
13.524.154,72 -
(1.354.639,45)
(1.024.653,36)
6.223.671,26 17.368.533,17
6.000.000,00 -
-
-
(6.000.000,00)
-
7.270.834,71 -
-
-
(4.834.866,05)
2.435.968,66
2.983.819,99 -
26.519.716,81 -
-
29.503.536,80
10.595.641,16 -
2.090.019,09 (7.584.332,06)
93.275,14 5.194.603,33
-
-
-
-
-
-
1.840.183,61 -
-
-
(1.840.183,61)
-
-
-
5.000.000,00 -
-
5.000.000,00
42.214.634,19 -
32.255.096,45 (8.608.985,42)
(6.358.103,26)
59.502.641,96
896.270.733,93 -
60.522.253,49 (9.790.088,47)
196.968,06 947.199.867,01
Euro
56
Accumulated depreciations and adjustments
Opening
Balance Intangible assets:
Start-up expenses
Patents. brand names and other rights
Key money premiums
Intangible asstes in progress
Tangible assets:
Basic equipment
Tools
Containers
Other fixed assets
Other financial investments
Charge for
the period Retirement
Disposals Closing
Balance
3.286.958,93 203.085,31 (463.014,64)
11.347,90 3.600,00 -
3.027.029,60
14.947,90
7.832.509,47 1.048.497,84 -
8.881.007,31
579.130,16 247.025,30 -
826.155,46
-
-
-
-
30.802.710,36 5.410.339,37 -
36.213.049,73
42.512.656,82 6.912.547,82 (463.014,64)
48.962.190,00
-
-
-
-
148.709.525,72 7.084.917,96 (1.261.819,03)
154.532.624,65
95.301.664,14 9.429.680,08 (3.275.657,53)
101.455.686,69
2.510.046,35 179.587,40 (255.552,11)
2.434.081,64
510.312,67 33.705,88 (2.977,56)
541.040,99
13.705.317,94 511.133,38 (105.776,25)
14.110.675,07
-
-
-
-
91.261,48 47.795,25 -
139.056,73
260.828.128,30 17.286.819,95 (4.901.782,48)
273.213.165,77
-
-
-
-
4.556,55 4.556,55 -
9.113,10
4.556,55 4.556,55 -
9.113,10
303.345.341,67 24.203.924,32 (5.364.797,12)
322.184.468,87
Euro
32. MOVEMENTS
IN ADJUSTMENTS
During 2009, the movements occurred in adjustments can be analyzed as follows:
Inventories:
Goods
Products and work in progress
Receivables from third parties - Short term:
Trade debtors - third companies
Doubtfull debts - third companies
Other debtors - thrid companies
Financial Investments
Other financial investments
Opening
Balance Charge for the
Period Transfers Retirements 152.168,65
0,00
0,00
-23.345,90
6.484.372,66
0,00
0,00
-6.484.372,66
6.636.541,31
0,00
0,00
-6.507.718,56
1.003.992,57
0,00
0,00
-621.754,73
5.546.057,13
433.272,97
0,00
0,00
411.865,15
0,00
0,00
-29.912,83
6.961.914,85
433.272,97
0,00
-651.667,56
5.313,66
0,00
0,00
0,00
5.313,66
0,00
0,00
0,00
Closing
Balance
128.822,75
0,00
128.822,75
382.237,84
5.979.330,10
381.952,32
6.743.520,26
5.313,66
5.313,66
Em Euros
The adjustment for receivables from trade-debtors
was reduced in 2009, being registered as an
extraordinary cost. The value cancelled this year was
provided for in the past. This value was the result
from exchange rates differences verified in the time-
sharing contracts’ throughout the last 25 year period,
however, the exact amount to be reduced was only
accurately calculated with the implementation of a
new software platform that allowed to confirm with
accuracy the contractual conditions.
57
33. DEBTS TO THIRD
PARTIES (MORE THAN 5 YEARS)
As at 31 December 2009, there was the following
debts payable beyond the next 5 years:
2009
Debts to credit institutions
110.456.370
2008
54.596.418
Euro
34. DEBTS TO THIRD PARTIES
COVERED BY REAL WARRANTIES
As at 31 December 2009, there were debts to third
parties amounting to Euros 201.803.661,07, covered
by mortgages over some of the Group’s hotels (see
Note 22).
36. SALES AND SERVICES
RENDERED BY BUSINESS AREA
AND GEOGRAPHICAL MARKETS
Description Sales
Internal market
External market Total (n)
Goods
1.333.581,37 216.691,00 1.550.272,37
Allotments
8.135.619,02 2.716.449,00 10.852.068,02
9.469.200,39 2.933.140,00 12.402.340,39
Mercado interno
Mercado externo Services Rendered
Total (n)
Hotels
136.140.759,12 33.289.833,88 169.430.593,00
Golf
3.653.749,58 6.794.012,00 10.447.761,58
Construction
150.892,00 2.866.954,00 3.017.846,00
Casino
12.321.757,76 928.482,92 13.250.240,68
Others
10.708.104,90 1.911.782,98 12.619.887,88
162.975.263,36 45.791.065,78 208.766.329,14
172.444.463,75 48.724.205,78 221.168.669,53
Euro
58
38. DIFFERENCES
BETWEEN THE ACCOUNTING
AND TAX RESULTS
As a result of the fixed assets revaluations (see Notes
41 and 42), the depreciation of future years are increased comparing to the acquisition cost. According
to the Portuguese tax law, 40% of this raise is not
accepted as cost for fiscal purposes. The different tax
systems of each Group company were also considered
for the computation of the respective deferred taxes.
from its occurrence. As at 31 December 2009, the
Group companies had tax losses carried forward that
generate deferred tax assets of Euros 4.727.623.
Deferred taxes concerning timeshare are the result of
the adjustment referred to in Note 8.
The table below details the financial statements impact resulting from the register of deferred taxes:
According to Portuguese tax law, tax losses can be
deducted to tax profits generated in a six years period
Total
Description
I Income tax for the year
1 Fixed assets revaluation
2 Fiscal reserve Investment
3 Depreciation rates effect
4 Timesharing
5 Tax losses carryforward
IIDefered tax
III Income tax (I-II)
2009 2008
2.264.799
-363.599
0
0
-853.680
49.593
-1.167.686
3.432.485
Movements in Profit
and Losses Statements
2009 2008
2.264.799
-363.599
0
0
-853.680
49.593
-1.167.686
3.432.485
1.468.337
-1.923.056
0
0
-2.334.156
988.700
-3.268.512
4.736.849
1.468.337
-1.923.056
0
0
-2.334.156
988.700
-3.268.512
4.736.849
Euro
Description
5 Taxes losses carryforward
Defered tax assets
1 Fixed assets revaluation
2 Fiscal reserve Investment
3 Depreciation rates effect
4 Timesharing
Defered tax liabilities
Total
2009 4.727.623
4.727.623
678.709
0
0
20.124.039
20.802.747
2008
4.777.216
4.777.216
1.042.307
0
0
20.977.719
22.020.026
Euro
59
39. WAGES OF
BOARD MEMBERS
The wages of Group Pestana board members were as follows:
Board of Directors
2009
2008
243.131
419.184
Euro
41. REVALUATION
OF TANGIBLE ASSETS
In previous years the Group has revaluated its tangible assets according to applicable legislation, namely:
n
n
n
n
n
Decree-Law 126/77, of 2 April
Decree-Law 219/82, of 2 June
Decree-Law 49/91, of 25 January
Decree-Law 264/92, of 24 November
Decree-Law 31/98, of 11 February
41. TANGIBLE ASSETS
HISTORICAL COSTS
AND REVALUATIONS
The breakdown of tangible assets historical costs, and the corresponding revaluations, net of accumulated
depreciations, as at 31 December 2009, can be analyzed as follows (according to the amounts presented in the
individual financial statements of each company):
Historical Cost (a)
Tangible Assets:
Basic equipment
Tools
Other fixed assets
(a) Net amounts
25.061.262,98
115.858.283,21
29.322.136,80
291.283,79
55.221,44
470.496,26
2.003.449,28
173.062.133,76
16.761.483,79
83.730.178,79
25.905.658,69
39.941,24
11.105,44
272.165,90
0,00
126.720.533,85
Revaluate Book-Value
(a)
41.822.746,77
199.588.462,00
55.227.795,49
331.225,03
66.326,88
742.662,16
2.003.449,28
299.782.667,61
Euro
(b) Include the successive revaluations
revaluation (a) (b) 60
44. CONSOLIDATED
STATEMENT OF FINANCIAL RESULTS
Year-end
Costs and Losses
31|12|2009 Interests paid
17.149.289,63
Losses from financial
investments
0,00
4.556,55
24.414,31
6.196.630,36
3.018.461,47
14.785,03
0,00
3.202.841,91
-21.550.193,05
8.060.786,21
Depreciation of investments
in fixed assets
Losses in associated
companies
Adjustments in financial
investments
Exchange rate losses
Cash discounts granted
Losses on sale of short
term applications
Other financial costs
Financial results
Year-end
31|12|2008
Profits and Gains
17.614.449,79
Interests received
Income from financial
investment
0,00
4.556,55
Gains associated companies
43.412,55
Ganhos de Participações de
apital Relativos a Associadas
8.368.552,57
Gains in other group
companies
4.651.715,46
Exchange rate gains
9.723,14
Cash discounts obtained
0,00
Gains on sale of short
term applications
1.732.108,18
Reversions and other
financial gains
-18.834.738,01
13.589.780,23
31|12|2009 1.005.072,59
1.054.029,10
14.677,68
2.031.045,04
1.306.391,97
2.576.563,29
65.612,27
21,65
7.372,62
8.060.786,21
31|12|2008
2.732.790,00
2.855.668,13
8.251,30
765.960,35
913.244,96
6.188.896,97
79.944,38
342,60
44.681,54
13.589.780,23
Euro
45. CONSOLIDATED
STATEMENT OF
EXTRAORDINARY RESULTS
Year-end
Costs and Losses
Donations
Bad debts
Losses on inventories
Losses on fixed assets
Fines and penalties
Increase of depreciation
Prior year losses
Other extraordinary costs
and lossess
Extraordinary results
31|12|2009 413.816,11
679.671,64
24.769,08
254.336,18
104.718,64
0,00
321.476,76
1.848.207,95
5.457.730,27
9.104.726,63
Year-end
31|12|2008
Profits and Gains
307.022,30
Taxes returned back by the State
443,27
Bad debts recovered
15.578,78
Gains on inventories
536.818,44
Gains in fixed assetss
33.521,18
Gains from contractual penalties
0,00
Gains from reductions of provisions
121.068,17
Prior year gains
Other extraordinary profits
and gains
5.094.800,56
2.845.455,29
31|12|2009 0,00
0,00
11.270,64
6.191.748,20
645.906,90
270.860,28
280.895,93
1.704.044,68
9.104.726,63
8.954.707,99
31|12|2008
0,00
2.982,00
7.916,78
6.435.248,53
201.625,25
275.780,37
862.179,52
1.168.975,54
8.954.707,99
Euro
61
46. MOVEMENTS
IN PROVISIONS
Opening
Balance Increase Caption Provisions for pensions
Provisions for taxes
Provisions for judicial processes
Warranty provisions
Other provisions
TOTAL
7.832,47
50.698,80
48.189,25
19.636,65
243.709,03
370.066,20
131,53
30.259,79
82.758,80
66.849,64
1.018.852,53
1.198.852,29
Decrease Closing
Balance
0,00
8.205,27
39.854,63
0,00
436.157,44
484.217,34
7.964,00
72.753,32
91.093,42
86.486,29
826.404,12
1.084.701,15
Euro
47. FINANCIAL LEASES
As at 31 December 2009, the Group has accounted the following amounts as financial leases:
Acquisition cost
(+)
Caption
Financial Investment in Buildings
Basic equipment
Tools
Other fixed assets
Accumulated
Payable to third parties
depreciations Short term Medium / Long
(-)
term
Total
debts
(n)
-
-
-
-
1.259.375,00 503.906,25 58.679,14 1.200.695,86 1.259.375,00
13.730.576,07 2.247.467,25 710.308,17 7.163.295,02 7.873.603,19
13.948.524,46 5.392.680,91 661.453,89 4.607.425,78 5.268.879,67
476.614,41 206.190,73 67.289,41 85.907,98 153.197,39
88.600,75 20.118,59 68.429,00 -
68.429,00
867.673,46 679.881,30 151.341,00 -
151.341,00
-
-
-
-
6.293,00 629,00 5.664,00 -
5.664,00
30.377.657,15 9.050.874,03
1.723.164,61 13.057.324,64 14.780.489,25
Euro
50. TAXES
Taxes
2009
Income Taxes
Gaming tax
Indirect taxes - VAT
Remuneration charges
2008
2.264.799,05
1.808.967,03
243.395,45
9.940.706,97
1.468.336,99
2.040.105,99
88.992,87
10.752.507,73
14.257.868,50
14.349.943,58
Euro
Funchal, April 30 th 2010
Dionísio Fernandes Pestana - Chairman
Pietro Luigi Valle - Member
The Official accountant Jorge da Silva Figueira
62
REPORT
and Opinion of the Satutory Auditor
TO THE SHAREHOLDERS
OF GRUPO PESTANA – S.G.P.S., S.A.
In conclusion, we believe that the mentioned documents,
read together, permit a reasonable comprehension of the
financial position – individual and consolidated – of Grupo
Pestana – S.G.P.S., S.A. as of December 31st 2009 and
satisfy legal and statutory requirements.
In accordance with the applicable legislation and the
Company’s by-law, we herewith present the report on our supervisory activity over the Board of Directors of Grupo Pestana – S.G.P.S., S.A. for the year ended 31st December, 2009.
With the frequency considered adequate, in general, we
have accompanied the company’s evolution through information supplied by the Board of Directors and the Financial
Department and verifying the recording of most significant
transactions, validated with respective supporting documentation. Our supervisory role comprised the verification
of patrimonial values and was complemented by obtaining
information and explanations on the important transactions
and on the company’s business development perspectives,
dully informed by the Company’s services and Board of Directors.
As result, the Statutory Auditor believes:
1º The shareholders should approve Board of Directors annual report and both individual and consolidated
financial statements – disclosed by the Board of Directors.
2º The shareholders should approve the result distribution
proposed by the Board of Directors.
Funchal, May 17th 2010
The Board of Director’s Report, due to the quality and synthesized information contained regarding the
company’s activity in 2009, deserves cared reading by the
shareholders.
The Statutory Auditor
Neves da Silva, Pão Alvo, Maria J. Pimenta
and Velosa Ferreira, SROC
We verified the adequacy of financial statements – individual
and consolidated – reported as of December
31st, 2009, subject to our approval by the Board of Directors and its consistency with the Board of Directors’ report,
as well as the adequate disclose of accounting policies and
criteria used, which we consider lead to an appropriate evaluation of the Company’s and Group’s patrimony.
Represented by:
Manuel António Neves da Silva (ROC 625)
As it was our duty, as statutory auditor’s, we have issued
today the Auditor’s Report on the company’s financial statements – individual and consolidated.
64
AUDITOR’ REPORT
Consolidated Financial Statements
statements and assessing the significant estimates, based on judgments and criteria defined by the Board of Directors, used in their
preparation;
INTRODUCTION
1. We have examined the consolidated financial
statements of GRUPO PESTANA – S.G.P.S., S.A.
which comprise: the Consolidated Balance Sheet
as at December 31st, 2009 (showing total assets
of Euros 801.887.492 and shareholders’ equity
of Euros 278.262.673, including a profit of Euros 6.610.293), the Consolidated Statements of
Income by nature and by function and the Consolidated Cash Flow Statement for the year then
ended and the corresponding Notes to the accounts.
n verifying the consolidation operations;
n assessing the adequacy of the accounting policies used and disclosed, taking into consideration the circumstances;
n verifying the applicability of the going concern concept;
n verifying the adequacy of the overall presentation of the consolidated financial statements.
RESPONSABILITIES
5. An audit also includes verifying that the financial
information included in the Board of Directors’
Report is consistent with the financial statements.
2.The Company’s Board of Directors is responsible for the preparation of consolidated financial
statements that present a true and fair view of
the financial position of the companies included
in the consolidation, results of its’ operations and
consolidated cash flows, as well the adoption of
adequate accounting policies and criteria and the
maintenance of appropriate system of internal
control.
6. We believe that our audit provides a reasonable
basis for expressing our opinion.
OPINION
7. In our opinion, the referred consolidated financial
statements, present fairly, in all material respects,
the consolidated financial position of GRUPO
PESTANA – S.G.P.S., S.A. as of December 31st,
2009 and the consolidated results of its operations, its consolidated cash flows for the year
then ended, in conformity with the accounting
principles generally accepted in Portugal.
3.Our responsibility is to issue a professional and independent opinion based on our work over such
financial statements.
SCOPE
4. Our audit was performed in accordance with the
Auditing Standards (“Normas Técnicas e as Directrizes de Revisão/Auditoria”) issued by the Portuguese Institute of Statutory Auditors (“Ordem dos
Revisores Oficiais de Contas”), which require the
audit to be planned and performed with the objective of obtaining reasonable assurance about
whether the consolidated financial statements
are free of material misstatement. An audit includes:
n verifying that the financial statements of the
companies included in the consolidation have
been appropriately audited and, for the significant case where that did not happen, verifying, on a sample basis, evidence supporting
the amounts and disclosures in the financial
Represented by:
66
AUDITOR’ REPORT
Individual Financial Statement
INTRODUCTION
n verifying the applicability of the going concern
concept;
1. We have examined the financial statements of
GRUPO PESTANA – S.G.P.S., S.A. which comprise: the Balance Sheet as at December 31st, 2009
(showing total assets of Euros 378.957.479 and
shareholders’ equity of Euros 249.030.810, including a profit of Euros 12.476.549), the Statements
of Income by nature and by function and the Cash
Flow Statement for the year then ended and the
corresponding Notes to the accounts.
n verifying the adequacy of the overall presentation of the financial statements.
5. An audit also includes verifying that the financial
information included in the Board of Directors’ Report is consistent with the financial statements.
6. We believe that our audit provides a reasonable
basis for expressing our opinion.
RESPONSABILITIES
OPINION
2.The Company’s Board of Directors is responsible
for the preparation of financial statements that
present a true and fair view of the company’s financial position, results of its operations and cash
flows, as well the adoption of adequate accounting policies and criteria and the maintenance of
appropriate system of internal control.
7. In our opinion, the referred financial statements,
present fairly, in all material respects, the financial
position of GRUPO PESTANA – S.G.P.S., S.A. as
of December 31st, 2009 and the results of its operations, its cash flows for the year then ended, in
conformity with the accounting principles generally accepted in Portugal.
3. Our responsibility is to issue a professional and independent opinion based on our work over such
financial statements.
SCOPE
4. Our audit was performed in accordance with the
Auditing Standards (“Normas Técnicas e as Directrizes de Revisão/Auditoria”) issued by the Portuguese Institute of Statutory Auditors (“Ordem dos
Revisores Oficiais de Contas”), which require the
audit to be planned and performed with the objective of obtaining reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes:
Represented by:
n verifying, on a sample basis, evidence supporting the amounts and disclosures in the financial statements and assessing the significant
estimates, based on judgments and criteria defined by the Board of Directors, used in their
preparation;
n assessing the adequacy of the accounting policies used, their uniform application and their
disclosure, taking into consideration the circumstances;
68
Largo António Nobre
9004-531 Funchal, Madeira
www.pestana.com

grupo pestana sgps management report financial statements

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