GRUPO ISOLUX CORSÁN, S.A. AND SUBSIDIARIES

Transcription

Audit report, Consolidated Annual Accounts
and Directors’ Report at 31 December 2015
This version of our report is a free translation of the original, which was prepared in Spanish.
All possible care has been taken to ensure that the translation is an accurate representation of
the original. However, in all matters of interpretation of information, views or opinions, the
original language version of our report takes precedence over this translation
INDEPENDENT AUDIT REPORT ON THE CONSOLIDATED ANNUAL ACCOUNTS
To the shareholders of Grupo Isolux Corsán, S.A.:
Report on the Consolidated Annual Accounts
We have audited the accompanying consolidated annual accounts of Grupo Isolux Corsán, S.A. (Parent
Company) and its subsidiaries (the Group), which comprise the consolidated balance sheet at 31
December 2015, the consolidated income statement, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity, the consolidated statement of cash flows and
related notes to the consolidated annual accounts for the year then ended.
Directors' Responsibility for the Consolidated Annual Accounts
The Parent Company´s Directors are responsible for the preparation of these consolidated annual
accounts, so that they present fairly the consolidated equity, financial position and financial
performance of Grupo Isolux Corsán, S.A. and its subsidiaries, in accordance with International
Financial Reporting Standards, as adopted by the European Union, and other provisions of the
financial reporting framework applicable to the Group in Spain and for such internal control as
Directors determine is necessary to enable the preparation of consolidated annual accounts that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated annual accounts based on our audit.
We conducted our audit in accordance with legislation governing the audit practice in Spain. This
legislation requires that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated annual accounts are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated annual accounts. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated annual accounts,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the parent company´s directors´ preparation of the consolidated annual accounts in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the presentation of the consolidated annual
accounts taken as a whole.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España
Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, www.pwc.es
R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ª
Inscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290
1
Opinion
In our opinion, the accompanying consolidated annual accounts present fairly, in all material respects,
the consolidated equity and financial position of Grupo Isolux Corsán, S.A. and its subsidiaries as at
December 31, 2015, and its consolidated results of its operations and its consolidated cash flows for the
year then ended in accordance with International Financial Reporting Standards, as adopted by the
European Union, and other provisions of the financial reporting framework applicable in Spain.
Emphasis of Matter
Without affecting our audit opinion, we draw attention to Notes 2.1) and 3.1.c) to the consolidated
annual accounts, which indicate that at 31 December 2015 the consolidated balance sheet for the
Group present negative working capital (excluding the effect of non-current assets and related
liabilities held-for-sale). Note 3.1.c) also mentions that as part of the Strategic Plan that is expected to
be implemented in the coming months the Management of the Group has prepared projected cash
flows for the coming year that demonstrate its capacity to satisfy its short-term obligations, although
some of the assumptions taken into account may not be under the control of the Group, which
indicates the existence of a significant uncertainty regarding the capacity of the Group to realize its
assets and settle its liabilities in the amounts and the classification under which they are stated in the
accompanying consolidated annual accounts, which have been prepared on a going-concern basis. The
Parent Company's Directors understand that the relevant assumptions taken into account in its
projections will be substantially fulfilled and therefore the use of the going-concern principle, in the
indicated terms and circumstances, is adequate.
Report on Other Legal and Regulatory Requirements
The accompanying consolidated Directors’ Report for 2015 contains the explanations which the Parent
Company´s Directors consider appropriate regarding Grupo Isolux Corsán, S.A. and its subsidiaries´
situation, the development of their business and other matters and does not form an integral part of
the consolidated annual accounts. We have verified that the accounting information contained in the
Directors’ Report is in agreement with that of the consolidated annual accounts for 2015. Our work as
auditors is limited to checking the Directors’ Report in accordance with the scope mentioned in this
paragraph and does not include a review of information other than that obtained from Grupo Isolux
Corsán, S.A. and its subsidiaries´ accounting records.
PricewaterhouseCoopers Auditores, S.L.
Original in Spanish signed by
Fernando Chamosa
9 May 2016
2
Consolidated Annual Accounts at 31 December 2015
and 2015 Directors’ Report
CONSOLIDATED ANNUAL ACCOUNTS OF GRUPO ISOLUX CORSÁN, S.A. AND
SUBSIDIARIES AT 31 DECEMBER 2015
Content of the consolidated annual accounts of Group Isolux Corsán, S.A. and
subsidiaries
Note
1
2
3
4
5
6
7
8
Page
Consolidated balance sheet
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated annual accounts
General information
Summary of significant accounting policies
2.1. Basis of preparation
2.2. Consolidation
2.3. Foreign currency transactions
2.4. Property, plant and equipment
2.5 Investments property
2.6. Intangible assets
2.7. Concessionary assets and other non-current assets assigned to projects
2.8. Interest cost
2.9. Impairment of non-financial assets
2.10. Financial assets
2.11. Derivative financial instruments and hedging activities
2.12. Inventories
2.13. Trade and other receivables
2.14. Cash and cash equivalents
2.15. Share capital
2.16. Deferred income
2.17. Trade and other payables
2.18. Compound financial instruments
2.19. Bank Borrowings and other financial liabilities
2.20. Current and deferred income taxes
2.21. Employee benefits
2.22. Provisions
2.23. Revenue recognition
2.24. Interest income
2.25. Dividend income
2.26. Leases
2.27. Dividend distribution
2.28. Environment
2.29. Operating results
2.30. Non-current assets (or disposal groups) and related liabilities held for sale and discontinued
operations
2.31. Segment reporting
Financial risk management
Critical accounting estimates and judgements
Segment information
Property, plant and equipment
Goodwill and other intangible assets
Concessionary assets and other non-current assets assigned to projects
3
5
6
7
9
10
10
11
11
16
18
19
20
20
21
23
23
24
25
27
27
27
27
28
28
28
29
29
30
31
31
35
35
36
36
36
36
36
37
37
44
47
52
54
56
1
Note
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Page
Investments in associates accounted for the equity method
Financial investments
Derivative financial instruments
Trade and other receivables
Inventories
Cash and cash equivalents and Financial assets at fair value through profit or loss
Non-current assets and related liabilities held for sale and discontinued operations
Share capital, share premium and legal reserve
Cumulative translation differences
Parent company profit/(loss) distribution and non-controlling interest
Trade and other payables
Bank Borrowings and Senior Notes
Deferred income tax
Provisions for other liabilities and charges
Revenue / Sales and Materials consumed and other external costs
Other income and expense
Employee benefit expenses
Operating leases
Net financial results
Income tax
Dividends per share
Commitments, contingencies and guarantees provided
Business combinations
Related-party transactions
Joint Operations
Temporary joint ventures (UTEs) and Consortia
Environment
Events after the reporting period
Auditors’ fees
Appendix I
Appendix II
Appendix III
Appendix IV
Appendix V
60
68
69
72
74
74
75
78
79
79
80
82
85
88
89
89
89
90
91
91
93
93
94
95
97
98
98
98
99
100
103
104
111
112
2
CONSOLIDATED BALANCE SHEET
(Thousand euro)
Note
ASSETS
Non-current assets
Goodwill
Intangible assets
Concessionary assets assigned to projects
Other non-current assets assigned to projects
Deferred income tax assets
6
7.1
7.2
8.1
8.2
9
10
12
21
11
31 December
2015
31 December
2014
75,636
481,178
24,394
41,609
118,245
126,992
10,530
26,500
337,573
-
113,043
479,628
23,458
25,622
126,470
973,807
10,435
111,905
288,523
777
1,242,657
2,153,668
Current assets
Inventories
Financial assets at fair value through profit or loss
13
12
11
14.2
242,961
2,082,661
26
13,491
253,142
1,847,216
2,131
14,675
Cash and cash equivalents
Non-current assets held for sale
14.1
15
169,185
1,327,346
291,272
379,602
3,835,670
2,788,038
5,078,327
4,941,706
Total assets
Notes 1 to 37 and Appendices I to V are an integral part of these consolidated annual accounts.
3
CONSOLIDATED BALANCE SHEET
(Thousand euro)
Note
31 December 31 December
2015
2014
EQUITY
Equity attributable to owners of the parent company
Share capital
Share premium
Legal reserve
Hedging reserve
16.a
16.b
16.c
11
17
Retain earnings
Non-controlling interest
18
92,788
183,914
287,547
(61,582)
(419,661)
18,017
526,237
17,637
(61,717)
(188,895)
52,178
60,474
135,184
371,753
(15,988)
(6,907)
119,196
364,846
1,348,675
185,582
12,227
71,804
39,813
1,271,424
207,672
21,918
43,171
43,206
19,192
62,354
1,677,293
1,649,745
233,963
63,482
2,480,765
26,655
12,376
43,897
276,090
13,297
2,355,487
20,663
15,466
73,559
420,700
172,553
3,281,838
2,927,115
Total liabilities
4,959,131
4,576,860
Total equity and liabilities
5,078,327
4,941,706
Total equity
LIABILITIES
Non-current liabilities
Project finance
Deferred income tax liabilities
Other payables
Current liabilities
Project finance
Current tax liabilities
Liabilities held for sale
20
8.3
11
21
22.1
19
20
8.3
19
11
22.2
15
4
CONSOLIDATED INCOME STATEMENT
(Thousand euro)
Year ended 31 December
Note
Total operating income
Revenue / Sales
Other operating income
Change in inventories
Own work capitalized
Total operating expenses
Materials consumed and other external costs
Depreciation, amortization and impairment losses
23 & 5
24
23
25
6,7 & 8
Change in trade provisions
Other operating expenses
24
Operating results
2015
2014
2,203,668
2,189,203
14,771
(306)
(2,093,782)
(1,363,393)
(348,505)
(41,259)
(24,600)
2,134,187
2,128,103
5,255
514
315
(1,968,392)
(1,233,005)
(334,080)
(41,216)
(44,587)
(316,025)
(315,504)
109,886
165,795
Financial expenses
27
(265,578)
(236,188)
Financial income
Share of profits/ (losses) of investments accounted for the
equity method
27
27
29,086
(236,492)
30,616
(205,572)
9
42,992
26,357
(83,614)
(13,420)
38,461
(19,285)
(45,153)
(32,705)
(10,438)
(9,280)
(55,591)
(41,985)
(51,897)
(38,586)
(3,694)
(3,399)
(55,591)
(41,985)
Profit before income tax
Income tax
28
Results for the year from continuing operations
Results for the year from discontinued operations
15
Results for the year
Attributable to:
Owners of the parent
18
5
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED AT 31
DECEMBER 2015 AND 2014 (Thousand euro)
Note
Profit/(losses) for the year
2015
2014
(55,591)
(41,985)
-
-
-
-
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Items that may be reclassified subsequently to profit or loss:
Share of other comprehensive income of investments accounted for
the equity method
9
(150,227)
(10,321)
Currency translation differences
17
(87,713)
(19,634)
9,097
10,005
Cash flow hedges
Tax effect relating to items that may be reclassified
21
(2,090)
(3,320)
Other comprehensive income for the year, net of tax
(230,933)
(23,270)
Total comprehensive income for the year
(286,524)
(65,255)
(282,527)
(62,357)
Total comprehensive income for the year attributable to:
- Owners of the parent
- Non-controlling interests
(3,997)
(2,898)
Total comprehensive income for the year
(286,524)
(65,255)
Total comprehensive income attributable to owners of the
parent company arising from:
- Continuing operations
(272,082)
(53,111)
(10,445)
(9,246)
(282,527)
(62,357)
- Discontinued operations
6
CONSOLIDATED ANNUAL ACCOUNTS OF GRUPO ISOLUX CORSÁN, S.A. AND SUBSIDIARIES AT 31 DECEMBER 2015
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – YEAR 2015
(Thousand euro)
Attributable to equity owners of the Parent Company
Share
Capital
(Note 16)
Balance at 31 December 2014
Legal
Reserve (Note
16)
Share Premium
(Note 16)
Cumulative
translation
difference
(Note 17)
Hedging
reserve
(Note 11)
Noncontrolling
interests
(Note 18)
Retained
earnings
Total Equity
18,017
526,237
17,637
(61,717)
(188,895)
60,474
(6,907)
364,846
Profit/(loss) for the year
Share of other comprehensive income of
investments accounted for the equity
method (note 9)
-
-
-
-
-
(51,897)
(3,694)
(55,591)
-
-
-
(6,706)
(143,521)
-
-
(150,227)
Net cash flow hedges
-
-
-
6,842
-
-
165
7,007
-
-
-
-
(87,245)
-
(468)
(87,713)
Total other comprehensive income
-
-
-
136
(230,766)
-
(303)
(230,933)
Total comprehensive income
-
-
-
136
(230,766)
(51,897)
(3,997)
(286,524)
Share capital increase
74,771
(342,323)
267,552
-
-
-
-
-
Other movements
-
-
1
(1)
-
45,958
(5,084)
40,874
2014 Profit Distribution (Note 18)
-
-
2,357
-
-
(2,357)
-
-
92,788
183,914
287,547
(61,582)
(419,661)
52,178
(15,988)
119,196
7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – YEAR 2014
(Thousand euro)
Attributable to equity owners of the Parent Company
Share
Capital
(Note 16)
Legal
Hedging
Reserve (Note reserve
16)
(Note 11)
Share Premium
(Note 16)
Cumulative
translation
difference
(Note 17)
Noncontrolling
interests
(Note 18)
Retained
earnings
Total Equity
18,017
526,237
15,280
(47,625)
(179,216)
92,866
(2,311)
423,248
Profit/(loss) for the year
Share of other comprehensive income of
investments accounted for the equity
method (note 9)
-
-
-
-
-
(38,586)
(3,399)
(41,985)
-
-
-
(21,015)
10,694
-
-
(10,321)
Net cash flow hedges
-
-
-
6,923
-
-
(238)
6,685
-
-
-
-
(20,373)
-
739
(19,634)
Total other comprehensive income
-
-
-
(14,092)
(9,679)
-
501
(23,270)
Total comprehensive income
Other movements and additions to
consolidation scope
-
-
-
(14,092)
(9,679)
(38,586)
(2,898)
(65,255)
-
-
-
-
-
8,551
(1,698)
6,853
2013 Profit Distribution (Note 18)
-
-
2,357
-
-
(2,357)
-
-
18,017
526,237
17,637
(61,717)
(188,895)
60,474
(6,907)
364,846
8
CONSOLIDATED ANNUAL ACCOUNTS OF GRUPO ISOLUX CORSÁN, S.A.
AND SUBSIDIARIES AT 31 DECEMBER 2015
2015
CONSOLIDATED STATEMENT OF CASH FLOWS
(Thousand euro)
Notes
Cash flows from operating activities
Results for the year before taxes
Adjustments for:
- Depreciation, amortization and impairment losses
- Change in trade provisions
- Results on property, plant and equipment disposal
- Share of other comprehensive income of investments accounted for the equity method
- Net financial results
Subtotal
Changes in working capital :
- Inventories
- Trade and other receivables
- Financial assets at fair value through profit or loss
- Trade and other payables
Cash generated from operations
- Taxes paid
Net cash generated from operating activities
Cash flows from investing activities
- Net cash variation due to changes in consolidation scope
- Acquisition of tangible and intangible assets net of revenue from property, plant and
equiptment and intangible assets´ disposals
- Acquisition of concessionary assets and non-current assets assigned to projects
- Net change in long-term payables
- Advance to disinvesment to joint business
- Acquisition of investments in associated and joint ventures accounted for the equity
method
- Income from investments in associated and joint ventures accounted for the equity
method
- Interest received and other financial income
Net cash used in investing activities
2.5, 6,7,8 & 15
9 & 15
27 & 15
31
9
Cash flows from Financing activities
- Proceeds from bank borrowings
- Reimbursement of bank borrowings
- Proceeds from project finance
- Reimbursement of project finance
- Other debt instruments
- Interest paid
Net cash generated from/(used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange differences included in net change for the year
Cash and cash equivalents at the end of the year
Cash Flows contributed by discontinued operations
14.1 & 15
14.1 & 15
15
2015
2014
(97,379)
(25,473)
40,992
24,322
2,672
(42,992)
240,834
265,828
41,555
44,587
(25,276)
207,685
268,551
26,924
(94,005)
1,184
(182,905)
(80,353)
(14,837)
(95,190)
(35,819)
(184,308)
(6,882)
117,942
134,011
(11,016)
122,995
-
(6,003)
(14,859)
(17,628)
(25,251)
215,721
(15,804)
(750)
-
-
(25,519)
-
13,648
2,715
178,326
3,879
(48,177)
112,401
(111,356)
22,861
(13,870)
(211,876)
(201,840)
185,606
(856,392)
37,008
(30,956)
840,322
(209,329)
(33,741)
(118,704)
293,976
(3,773)
171,499
(124)
41,077
251,752
1,147
293,976
29
9
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS
(Thousand euro)
1. General information
As of yearend 2015 GRUPO ISOLUX CORSÁN, S.A. (hereinafter, the Company) forms a group (hereinafter,
the Group) comprising the parent company Grupo Isolux Corsán, S.A. and its subsidiaries, joint ventures and
associates. Additionally, the Group participates with other entities or members in joint ventures and temporary
joint operations (hereinafter, Joint Ventures). Appendices I, II, III, IV and V to these notes contain additional
information on the entities included in the consolidation scope. The Group companies hold interests of less
than 20% in other entities over which they have no significant influence. The Group’s main activities and sales
are carried on and made in Spain, Latin America, Asia, Africa and North America.
On 17 December 2004, the Company was incorporated which, following several name changes, is now
named Grupo Isolux Corsán, S.A. The Company is the parent of a group that is continuing the activities of
Grupo Isolux Wat. The latter group gained broad experience in the Spanish market and was engaged mainly
in engineering. At the beginning of 2005 it merged with the Corsán Corviam Group, which was also reputable
and engaged mainly in construction. Grupo Isolux Corsán is the result of the 2005 merger.
Grupo Isolux Corsán, S.A.’s registered office is at Caballero Andante 8, 28021 Madrid. The Company is
registered in the Madrid Mercantile Register, page M-00367466, volume 20,745, sheet 189. The latest
updating of its bylaws is entered in page M-00367466, volume 27.069, sheet 147, inscription Nº169.
For the purposes of preparing the consolidated annual accounts, a group is understood to exist when the
parent company has one or more subsidiaries, which are those entities that the parent company controls
directly or indirectly. The principles applied during the preparation of the Group’s consolidated annual
accounts, together with the consolidation scope, are described in Note 2.2.
Appendix I to these notes set outs the identification details of the subsidiaries included in the consolidation
scope under the full consolidation method.
Appendix II provides the identification details of the associates included in the consolidation under the equity
method.
Appendix III contains the identification details of the joint ventures included in the consolidation scope under
the equity method.
Appendix IV contains the identification details of the joint operations included in the consolidation scope under
the proportionate method.
Furthermore, the parent company and certain subsidiaries are members of temporary joint ventures (UTEs)
and consortia, whose assets, liabilities, income and expenses are recognized using the proportionate method.
Appendix V contains a detail of the temporary joint ventures and consortia of which Group´s companies are
members.
The main consolidation scope changes during 2015 are described below:
•
Main incorporated companies: Inversiones Alicudi, S.L., Inversiones Atoko, S.L., Inversiones Leucade,
S.L., Linhas Laranjal, L.T.D.A, Parkia Canarias, S.L.U., Estacionamientos Granada, S.A.
•
Sale of the companies: Elaborados Metálicos EMESA, S.L., Sociedad Concesionaria Zona 8-A, S.A.,
Tecna del Ecuador, S.A. and the joint venture Pinares del SUR, S.L.
•
Main incorporated companies: Corsán Covián Colombia, S.A.S., Tenedora de Acciones de Líneas de
Transmisión Peruanas, S.A.C., Líneas de Transmisión Peruanas, S.A.C., Icapark I, S.A. Icapark II,
S.A., Isolux Corsán Aparcamientos Activos, S.L.U., Isolux Ingeniería G.K. and Isolux-TVIG HW, LLC.
•
Change of control of Isolux Corsán Aparcamientos, S.A. and its subsidiaries (see Note 31).
10
(Thousand euro)
Grupo Isolux Corsán, S.A. does business in Spain and abroad, mainly consisting of the following activities
(carried on by the Company itself or its subsidiaries):
•
•
•
•
•
•
Engineering studies, industrial assembly and manufacture of the necessary components, integrated
facilities and construction.
Manufacture, sale and representation of electrical, electronic, electromechanical, computer and
industrial products, machinery and equipment.
Rendering of all types of consultancy, audit, inspection, metering, analysis, report, research and
development services; project design, planning, supply, execution and assembly; project and site
management and supervision; tests, trials, commissioning, control and evaluation; repair and
maintenance services in integrated facilities; electrical and electronic facilities, air conditioning and
aeration systems; sanitary fluid and gas systems; elevators and freight elevators; fire protection and
detection systems; hydraulic systems, information systems, mechanical and industrial systems;
communications, energy, environment; and energy lines, substations and power plants.
Integrated construction, repair, conservation and maintenance of all kinds of construction and all kinds
of installation and fitting work.
Purchase, sale, lease and operation by any means of real property or real property rights.
Holding, management and administration of securities and equity interests in any entity.
The Group mainly operates through the following business lines:
•
•
EPC (Engineering, Procurement and Construction), related mainly to the construction and engineering
projects under “turnkey contracts.”
Concessions:
•
Through Isolux Infrastructure the Group holds infrastructure concessions of highways, electricity
infrastructure concessions such as high-voltage transmission lines and substations, and solarphotovoltaic generation plants.
•
Infrastructure concessions of car parks.
These consolidated annual accounts, together with the annual accounts of the parent company, were
prepared by the Board of Directors on 31 March 2016. The Directors will submit these consolidated annual
accounts to the General Shareholders` Meeting for approval. The accounts are expected to be approved
without changes.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated annual accounts are set out
below. These policies have been consistently applied to all the financial years presented in these consolidated
annual accounts.
2.1.
Basis of preparation
The Group’s consolidated annual accounts at 31 December 2015 have been prepared in accordance with
International Financial Reporting Standards (IFRS) adopted for its use by the European Union, approved by
the European Commission Regulations (IFRS-EU) and effective at 31 December 2015. The Group’s firs time
application of IFRS-EU was on 1 January 2006.
The policies described below have been consistently applied to all the financial years presented in these
consolidated annual accounts.
The amounts are expressed in thousands of euro in this document, unless otherwise stated.
The consolidated annual accounts have been prepared on a historical cost basis, except for certain cases
stipulated by IFRS-EU in which assets and liabilities are carried at fair value. The Company has made the
following choices in cases in which IFRS-EU allow for alternative criteria:
•
Measurement of property, plant, investment property and intangible assets at historical cost.
11
(Thousand euro)
The preparation of consolidated annual accounts under IFRS-EU requires the use of certain critical accounting
estimates. It also requires that management exercise judgment in the process of applying the parent
company’s accounting policies. In Note 4 discloses the areas that require a higher level of judgment or entail
greater complexity, and the areas where assumptions and estimates are significant for the preparation of the
consolidated annual accounts.
Standards, amendments and interpretations that came into effect in 2015
a)
Standards, interpretations and amendments effective from January 1, 2015 applied by the Group:
•
IFRIC 21 “Levies”. This interpretation addresses the accounting treatment of taxes imposed by
governments other than income taxes, fines and penalties imposed for violations of the law. The
question is when the entity must recognise a liability for the obligation to pay a levy that is accounted
for according to IAS 37. It also addresses the accounting treatment of a liability for the payment of a
levy when the amount and due date are known.
•
Annual improvements to IFRS, 2011-2013. In December 2013, the IASB published the Annual
Improvements to IFRS for the years 2011-2013. The changes introduced by these Annual
Improvements generally apply to the fiscal years starting on or after 01 January 2015, although they
may be implemented sooner. The changes are as follows:



IFRS 3, “Business combinations”. Exception of the scope for joint ventures.
IFRS 13 "Fair value measurement". Scope of the "portfolio exception" available in IFRS 13.
IAS 40 “Real estate investments": Relationship between IAS 40 and IFRS 3 when a property is
classed as an investment property or owner-occupied property.
The application of the new standards and prior amendments by the Group has not had a significant effect on
the consolidated annual accounts.
b) Standards, amendments and interpretations that are not yet in force but can be early adopted for periods
beginning on or after January 1, 2015 and which have been adopted by the European Union:
•
Annual Improvements to IFRS for the years 2010-2012: In December 2013, the IASB published the
Annual Improvements to IFRS for the 2010-2012 Cycle. The changes introduced by these Annual
Improvements generally apply to the fiscal years starting on or after 1 February 2015, although they






•
IFRS 2, “Share-based payments”: Definition of "condition for irrevocability of the concession".
IFRS 3, “Business combinations”. Recognition of a contingent consideration in a business
combination.
IFRS 8, "Operating segments" Information to be reported on the aggregation of operating
segments and the reconciliation between the assets assigned to the segments reported on and
the entity's assets.
IFRS 13 "Fair value measurement". References to the ability to measure current accounts
receivable and payable at their nominal value when the effect of the discount is not significant.
IAS 16 “Property, plant and equipment" and IAS 38 “Intangible assets”: Proportional reexpression of the cumulative amortisation when using the revaluation model.
IAS 24 “Related party disclosures”: Entities that render services through key management
personnel as related parties.
IAS 19 (Amendment) “Defined benefit schemes, employee contributions”; the IAS 19 (revised in 2011)
distinguishes between employee contributions in relation to the service provided and those
contributions not linked to the service provided. The current modification also distinguishes between
contributions linked to service only in the financial year in which they appear and those linked to
service in more than one financial year. The amendment allows the contributions linked to the service
to be deducted from the accrued benefit during the year during in which the service is rendered, if the
contributions do not vary during this period. Likewise, the contributions linked to service that do vary
during the relevant time period must be extended for the duration of the service provided using the
12
(Thousand euro)
same assignation method as is applied to benefits. This amendment is applicable to financial years
commencing 1 February 2015 and will be applied retrospectively. It may be adopted prior to that date.
•
IFRS 11 (Amendment) “Joint arrangements’ regarding acquisition of an interest in a joint operation”:
The amendments require an investor to apply the principles of business combination accounting when
it acquires an interest in a joint operation that constitutes a ‘business’. The investor must recognize
assets and liabilities at fair value; related costs, as expenses; deferred tax; and residual value, as
goodwill. This Amendment will be applied prospectively for fiscal years starting on or after 1 January
2016, although it may be implemented early.
•
IAS 16 (Amendment) and IAS 41 (Amendment) “Agriculture: Fruit production plants”: Under this
Amendment, fruit production plants are accounted for the same as other property, plant and equipment
but differently than other biological assets. Consequently, the amendments include these types of
plants within the scope of IAS 16 rather than IAS 41. The products grown at these plants still fall within
the scope of IAS 41. These Amendments will apply prospectively to fiscal years starting on or after 1
January 2016 but may be implemented earlier.
•
IAS 16 (Amendment) and IAS 38 (Amendment) “Property, plant and equipment’ and IAS 38, ‘Intangible
assets’ regarding depreciation and amortisation.”: This amendment clarifies that the use of revenuebased methods to calculate the depreciation of an asset is not appropriate because revenue generated
by an activity that includes the use of an asset generally reflects factors other than the consumption of
the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally
presumed to be an inappropriate basis for measuring the consumption of the economic benefits
embodied in an intangible asset. These Amendments will apply prospectively to fiscal years starting on
or after 1 January 2016 but may be implemented earlier.
•
Improvement Project, Cycle 2012-2014: The amendments affect IFRS 5, IFRS 7, IAS 19 and IAS 34
and apply to the fiscal years beginning on or after 1 July 2016, subject to adoption by the EU. The
main changes are as follows:




IFRS 5: "Non-current assets held for sale and discontinued operations": Changes to disposal
methods.
IFRS 7, "Financial instruments: Disclosures”. Continued involvement in administration contracts.
IAS 19, “Employee Benefits”. Determination of the discount rate for post-employment
obligations to employees.
IAS 34, “Interim financial reporting”: Information presented elsewhere in the interim financial
information.
•
IAS 1 (Amendment) "Presentation of financial statements”. The amendments to IAS 1 encourage
companies to use their professional judgement to determine which information should be disclosed on
the financial statements. The amendments clarify that materiality applies to the financial statements as
a whole and that the inclusion of information that is immaterial could diminish the usefulness of the
financial information. In addition, the amendments clarify that entities should use their professional
judgment when determining where and in what order the information is presented on the financial
statements. The amendments to IAS 1 can be applied immediately and will be mandatory for fiscal
years starting on or after 1 January 2016.
•
IAS 27 (Amendment) “Equity method in separate financial statements”: IAS 27 is modified to restore
the option of using the equity method to account for investments in subsidiaries, joint ventures and
associates in the separate financial statements of an entity. It also clarifies the definition of separate
financial statements. An entity that chooses to change to the equity method will apply the amendment
to the fiscal years beginning on or after 1 January 2016 according to IAS 8, "Accounting policies,
changes to accounting estimates and errors". Early implementation is allowed.
The Group is analysing the impact of these new standards on the consolidated annual accounts.
13
(Thousand euro)
c)
•
•
Standards, amendments and interpretations of existing standards that have not been adopted by the
European Union
IFRS 15 “Revenue from contracts with clients”: In May of 2014, the IASB and the FASB issued a joint
standard in relation to the recognition of revenue from contracts with clients. Under this standard,
income is recognised when the client assumes the control over the product or service in question, i.e.,
when the client has the ability to determine how the product or service is used and to generate profits
using it. This IFRS standard includes new guidelines for determining whether income should be
recognised over time or at a particular moment in time. IFRS 15 requires detailed reporting of
recognised income and the income that is expected to be recognised in the future in relation to existing
contracts. It also requires quantitative and qualitative information on the significant judgments used by
management to determine recognised income and the changes to those judgments. This Amendment
will be applied prospectively for fiscal years starting on or after 1 January 2017, although it can be
implemented early.
IFRS 9 “Financial instruments”: Deals with the classification, valuation and recognition of financial
assets and liabilities. The complete version of IFRS 9 replaces most of the guidance in IAS 39. IFRS 9
retains but simplifies the mixed measurement model and establishes three primary measurement
categories for financial assets: amortised cost, fair value through OCI and fair value through P&L. The
basis of classification depends on the entity’s business model and the contractual cash flow
characteristics of the financial asset. Investments in equity instruments are required to be measured at
fair value through profit or loss with the irrevocable option at inception to present changes in fair value
in OCI, unless it is classified as available-for-sale. If so, changes in fair value are presented through
profit or loss. For financial liabilities there were no changes to classification and measurement except
for the recognition of changes in own credit risk in other comprehensive income, for liabilities
designated at fair value, through profit or loss. There is now a new expected credit losses model that
replaces the incurred loss impairment model used in IAS 39. IFRS 9 relaxes the requirements for
hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic
relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same
as the one management actually uses for risk management purposes. Contemporaneous
documentation is still required but is different from that which is currently prepared under IAS 39.
Finally, comprehensive information is required, including reconciliation between the initial and final
amount of the provision for expected credit losses, assumptions and data, and a reconciliation in the
transition between the categories of the original classification under IAS 39 and new classification
categories under IFRS 9.
IFRS 9 will be effective for fiscal years starting on or after 1 January 2018, although it may be
implemented earlier. IFRS will be applied retroactively, although it will not be necessary to re-express
the comparative figures. If the entity chooses to implement IFRS 9 early, all of the requirements must
be met early as well. Entities applying the standard before 1 February 2015 have the option of
implementing the standard in phases.
•
IFRS 10 (Amendment) and IAS 28 (Amendment) “Sale or contribution of assets between an investor
and its associate or joint ventures”: These amendments clarify the accounting treatment of sales and
transfers of assets between an investor and its associates or joint ventures, which depends on whether
or not the non-monetary assets sold or contributed to an associate or joint venture constitute a
"business". These amendments address an inconsistency between IFRS 10 and IAS 28 in the sale or
contribution of assets between an investor and its associate or joint venture.A full gain or loss is
recognised when a transaction involves a business. A partial gain or loss is recognised when a
transaction involves assets that do not constitute a business, even if those assets are in a subsidiary.
The Amendments to IFRS 10 and IAS 28 are prospective and are effective from 1 January 2016.
However, at the end of 2015 the IASB decided to postpone the effective date (without fixing a day), as
a wider revision is planned which can result in the simplification of these transactions accounting
standars as well as the accounting of subsidiaries and joint ventures.
•
IFRS 10 (Amendment), IFRS 12 (Amendment) and IAS 28 (Amendment) “Investment entities: Applying
the consolidation exception": These amendments clarify three aspects regarding the application of the
requirements for investment entities to recognise subsidiaries at fair value rather than consolidate
them. The proposed amendments:
14
(Thousand euro)
•
•
•
Confirm that the exemption from presenting consolidated financial statements continues to apply
to the subsidiaries of an investment entity when they themselves are parent entities.
Clarifies when the dominant investment entity should consolidate a subsidiary that provides
investment-related services rather than recognising the fair value of the subsidiary and
Simplifies the application of the equity method of an entity that is not itself an investment entity
but owns an interest in an associate that is an investor.
This Amendment will apply to fiscal years beginning on or after 1 January 2016, although it can be
implemented early.
•
IFRS 16, "Leases" In January 2016 the IAS published a new standard regarding leases that repeals
IAS 17 "Leases" as a result of the joint project with the FASB. The IASB and the FASB have reached
the same conclusions in many areas related to the recognition of lease agreements, including the
definition of a lease, the general requirement to reflect leases on the balance sheet and the
measurement of lease liabilities. The IASB and the FASB also agreed not to include substantial
changes in the accounting that must be applied by the lessor, and similar requirements established by
the previous rules were maintained. Differences still remain between the IASB and the FASB
according to the recognition and presentation of lease expenses in the income statement and the cash
flow statement.
Under IFRS-IASB, IFRS 16 is mandatory starting on 1 January 2019, although it may be applied earlier
but only simultaneously with the application of IFRS 15 "Revenue from Contracts with Customers".
IFRS 16 has not yet been approved by the EU.
•
IAS 12 (Amendment) "Recognition of deferred tax assets for unrealized losses" This amendment
clarifies how to recognize deferred tax assets relating to investments in debt securities measured at fair
value. The decreases in the carrying amount below the cost of a fixed rate debt instrument measured
at fair value, where the tax base remains at cost, give rise to deductible timing differences. The
estimate of probable future taxable profits may include the recovery of some assets above their
carrying amount if there is sufficient relevant evidence. This may be the case, for example, when an
entity expects to maintain a fixed-rate debt instrument in its portfolio and obtain the contractual cash
flows.
The amendment is effective for years commencing on or after 1 January 2017, although it may be
adopted earlier. As a general rule it will be applied retrospectively. However, at the initial application
date of the amendment, there is an option to recognize the change in equity in the comparative period
against the beginning balance of the reserve for accumulated gains.
•
IAS 7 (Amendment) – "Disclosure Initiative - Amendments to IAS 7" This limited scope amendment
implements an additional disclosure requirement in the financial statements that allows the users of the
financial statements to evaluate changes in the liabilities deriving from financing activities. The
following changes in such liabilities must be disclosed: i) changes in the cash flows from financing; ii)
changes arising from gaining or losing control over subsidiaries or other businesses; iii) the effect of
changes in exchange rates; and v) other changes.
The amendment is effective for years commencing on or after 1 January 2017, although it may be
adopted earlier. No comparative information from prior years is required when an entity applies the
amendment for the first time.
The Group is analizing the impact that these new standars may have on the consolidated annual accounts if
they are adopted.
Going Concern
At 31 December 2015 the Group's working capital is negative by 353 million euro (Note 3.1 c) (excluding the
effect of non current assets and related liabilities held for sale). Current bank borrowings total 234 million euro
(Note 20) and the available amounts in short term facilities of credit decreased from 211 million euro at the
end of 2014 to 91 million euro at 31 December 2015 (Note 20.4). Notwithstanding those circumstances, the
15
(Thousand euro)
Directors of the Parent Company have prepared these consolidated annual accounts on a going concern
basis considering that they do not have any doubts regarding the Group's capacity to generate resources from
its operations, fulfil its short-term debt commitments and stabilize its liquidity position, within the context of the
actions that are being carried out and are pointed out in these annual accounts (Note 3.1.c). Additionally, in
the preparation of these consolidated annual accounts the following mitigating factors have been taken into
account with respect to any possible uncertainty relating to the application of the going concern principle: (i)
the corporate debt refinancing process that achieved in 2015 (Note 20); (ii) the negotiations held with financial
institutions to renew the available financing lines; and (iii) the possibility of executing the asset disinvestment
plan, when that would contribute to the Group's best business interests (Note 3.1 c).
2.2.
Consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls
an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the group. They are deconsolidated from the date on which
control ceases.
When through the acquisition of a subsidiary, the Group acquires a group of assets or net assets that are not
a business, the group cost is allocated between the identifiable assets and liabilities within the group based on
their fair values at the acquisition date.
The Group applies the acquisition method to register business combinations. The consideration transferred for
the acquisition of a subsidiary corresponds to the fair value of the assets transferred and the liabilities incurred
with the previous owners and the equity interests issued by the Group. The above-mentioned consideration
includes the fair value of any asset or liability arising from a contingent consideration agreement. Identifiable
assets acquired and liabilities and contingent liabilities undertaken in a business combination are measured at
fair value on the acquisition date. For each business combination, the Group may recognize any noncontrolling interest in the acquired company at either its fair value or the percentage of such non-controlling
interest in the acquired company’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is re-measured to fair value at the acquisition date through profit
or loss.
Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability
is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income.
Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is
accounted for within equity.
The excess of the aggregate of the consideration transferred, the amount of any non-controlling interest in the
subsidiary acquired and the fair value at the acquisition date of any previous share in the acquired equity over
the fair value of the net identificable assets of the subsidiary acquired is accounted for as goodwill. If the
consideration transferred, the non-controlling interest recognized and the equity share previously hold is lower
than the fair value of the net assets of the subsidiary acquired, the difference is directly recognized in the
income statement.
Intercompany transactions, balances, income and expenses on transactions between Group companies are
eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment
of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
16
(Thousand euro)
Appendix I to these notes set outs the identification details of the subsidiaries included in the consolidation
scope under the full consolidation method.
There are some subsidiaries held by 50% or less that are controlled due to agreements the Group has with
shareholders (see Appendix I).
The subgroups that are formed by Isolux Infrastructure Netherlands, B.V. and subsidiaries, Isolux Corsán
Aparcamientos S.A and subsidiaries (this last one since the date specified in Note 31) where the group holds
a 80.77% and 100% of the shares, respectively, are not considered subsidiaries as the control is not held by
the Group. Agreements established between shareholders result in the investment being considered as a joint
venture (See Appendix III).
Disposal and change of control of subsidiaries
When the group ceases to have control any retained interest in the entity is re-measured to its fair value at the
date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate,
joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income
in respect of that entity are accounted for as if the group had directly disposed of the related assets or
liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified
to profit or loss.
In transactions in which the Group loses control over a business but retains joint control (or moves from joint
control to control), the Group measures the shareholding at fair value when control is lost (both the part
retained and the part lost) and recognises the loss or gain in the income statement.
Changes in the shareholding in subsidiaries without changes in control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity
transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair
value of any consideration paid and the relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in
equity.
Associates
Associates are all entities over which the Group has significant influence but not control, generally
accompanying a shareholding between 20% and 50% of the voting rights. Investments in associates are
accounted for by the equity method and are initially recognized at cost. The Group’s investment in associates
includes goodwill (net of any accumulated impairment loss) identified on acquisition.
If ownership in an associate is reduced, but significant influence is retained, only a proportionate share of
those amounts previously recognized through the overall income statement are reclassified to the income
statement, as appropriate.
The Group’s share on its associates’ post-acquisition profits or losses is recognized in the income statement
and its share of post-acquisition movements in other comprehensive income statement is recognized in the
comprehensive income statement. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its
interest in the associate, including any other unsecured receivables, the Group does not recognize further
losses, unless it has incurred obligations or made payments on behalf of the associate.
At financial information reporting dates, the Group assesses if there is any objective evidence of impairment of
the investment value in the associate. In such case, the Group calculates the amount of impairment as the
difference between the associated recoverable amount and its carrying amount, and recognizes the amount
adjacent to “share of profit/ (loss) of an associate” in the income statement.
17
(Thousand euro)
Gains and losses on transactions between the Group and its associates are recognized in its financial
statements to the extent they correspond to other investors’ share in associates not related to the investor.
Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of associates have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Dilution gains or losses in associates are recognized in the income statement.
Appendix II to these notes set outs the identification details of the associates included in the consolidation
scope under the equity consolidation method (or equity method).
Joint arrangements
The Group applies IFRS 11 to all joint arrangements. Investments in joint arrangements under IFRS 11 are
classified as joint operations or joint ventures depending on the contractual rights and obligations of each
investor. The Group has evaluated the nature of its joint arrangements and has determined that part of them
should be classed as joint ventures while others should be considered joint operations.
Joint ventures are accounted for by the equity method, as are associates. Unrealised gains on transactions
between the Group and its joint businesses are eliminated on the basis of the Group’s ownership percentage
in them. Unrealised losses are also eliminated unless the transaction shows evidence of an impairment of the
transferred asset. The accounting policies of the joint businesses have been modified as necessary to ensure
that they are consistent with the policies adopted by the Group.
Joint operations are consolidated using the proportionate method. The Group combines its shareholdings in
the assets, liabilities, revenues and expenses, as well as cash flows of the jointly controlled company on a line
by line basis together with those items in its accounts that are similar in nature. The Group recognises its
share in the profits or loss deriving from the sale of Group assets to jointly controlled entities in its
consolidated annual accounts in the proportion corresponding to other participants. The Group does not
recognise its share in the profit or loss of a jointly controlled entity deriving from the purchase by the Group of
assets from the jointly controlled entity until the assets are sold to an independent third party. A loss is
recognised immediately on a transaction if it reveals a reduction in the net realisable value of current assets,
or any impairment loss.
Appendix III hereto identifies the details of the joint businesses included in the scope of consolidation using
the full consolidation method.
Appendix IV hereto identifies the details of the joint operations included in the scope of consolidation using the
proportionate consolidation method.
Temporary joint ventures (UTEs)
A temporary joint venture (UTE), as defined by Spanish legislation and similar legislations, is a system in
which entrepreneurs collaborate for a specified, fixed or undetermined period to carry out or to execute a
construction work, service or supply.
The UTE’s balance sheet and income statement items are included in the shareholder’s balance sheet and
income statement on a proportionate basis as these entities are considered joint operations. Transactions
between the UTE and other Group subsidiaries are eliminated.
Appendix V contains details of each UTE consolidated using the proportionate method.
2.3.
Foreign currency transactions
Functional and presentation currency
The items included in the annual accounts of each of the Group companies are measured using the currency
of the principal economic environment in which the company operates (“functional currency”). The
18
(Thousand euro)
consolidated annual accounts are presented in euros, the Company’s functional and presentation currency,
although figures are expressed in thousands of euro for presentation purposes.
Transactions and balances
Transactions in foreign currency are converted to the functional currency using the exchange rates effective at
the transaction dates; at the year-end they are measured at the exchange rate in force at that moment.
Foreign exchange gains and losses resulting from the settlement of transactions and convertion at year-end
exchange rates of monetary assets and liabilities denominated in foreign currency are recognized in the
income statement, except when deferred in equity (other comprehensive income) as qualifying cash flow
hedges or qualifying net investment hedges.
Changes in the fair value of monetary instruments denominated in foreign currency and classified as held for
sale are separated into translation differences resulting from changes in the instrument’s amortized cost and
other changes in the instrument’s carrying amount. The translation differences related to changes in the
amortized cost are recognized in results for the year and other changes in the carrying amount are recognized
in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equity instruments at fair value
through profit or loss are recognized in profit and loss as part of the fair value gain or loss. Translation
differences on non-monetary financial assets such as equity instruments classified as available-for-sale
financial assets are included in other comprehensive income.
Group companies
Results and the financial position of all Group companies (none of which has the currency of a
hyperinflationary economy) whose functional currency differs from the presentation currency are translated
into the presentation currency as follows:
•
•
•
The assets and liabilities on each balance sheet presented are converted at the closing exchange rate
at the balance sheet date;
The income and expenses in each income statement are converted at the average exchange rates
(unless this average is not a reasonable approximation of the cumulative effect of the rates existing at
the transaction dates, in which case income and expenses are converted at the rates on the
transaction dates); and
All resulting exchange differences are recognized as a separate component of equity (other
comprehensive income).
On consolidation, any exchange differences resulting from the translation of a net investment in foreign
companies and loans and other instruments in foreign currency designated as hedges of those investments
are recognized in equity. When sold, such exchange differences are recognized in the income statement as
part of the profit or loss on the sale.
Adjustments to goodwill and fair value arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and converted at the year-end exchange rate, except goodwill arising prior to 1
January 2006. Exchange differences are recognised in other comprehensive income.
2.4.
Property, plant and equipment mainly comprise lands, buildings, plants, offices, technical installations,
machinery and tooling. Property, plant and equipment are recognized at cost less depreciation and cumulative
impairment losses, except for land, which is presented net of impairment losses. Historical cost includes
expenses directly attributable to purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset only when it
is likely that the future economic benefits associated with the asset will flow to the Group and the cost of the
asset can be measured reliably. The carrying amount of a replaced component is written off the accounts. All
19
(Thousand euro)
other repair and maintenance expenses are charged to the income statement in the year in which they are
incurred.
Land is not depreciated. Depreciation of other assets is calculated on a straight-line basis in order to allocate
costs to their residual values over their estimated useful lives, using the following rates:
Rate
Buildings
Plant
Machinery
Tooling
Furnishings
Data-processing equipment
Vehicles
1%- 3%
6 % - 14 %
10 % - 17 %
12,5 % - 33 %
5 % - 16 %
12.5 % - 25 %
8 % - 14 %
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount (Note 2.9).
Profits and losses on the sale of property, plant and equipment are calculated by comparing the proceeds with
the carrying amount and are included in the income statement on the line “Other operating income”. Own work
capitalized is carried at production cost and reflected as income in the income statement.
Assets received through debt collection procedures are measured at the lower of the price related to the
receivable for the corresponding asset, and market price.
2.5.
Investment property
Based on applicable legislation, investment property are valued at acquisition cost, applying the same criteria
as those established for property, plant and equipment elements, regarding capitalization and depreciation, as
stated in Note 2.4.
In line with the presentation and disclosure requirements contained in IAS 40, and unless the Group applies
the cost method to value its investment property, it also determines their fair value periodically, measured as
their value in use. The value in use amount is determined based upon market assumptions made by the
Group.
Depreciation of real-estate investments is recognized annually through the income statement on a useful life
basis.
2.6.
Intangible assets
Goodwill
Goodwill arises from the acquisition of subsidiaries, associates and joint ventures and represents the excess
of the consideration transferred over the Group’s interest in the net fair value of the identifiable net assets
acquired, liabilities and contingent liabilities, and the fair value of the non-controlling interest in the acquired
company.
For the purposes of impairment testing, goodwill acquiring in a business combination is allocated to each cash
generating unit, or group of cash generating units, which are expected to benefit from the combination
synergies. Each unit or group of units to which the goodwill is allocated, represents the lowest level in the
entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the
operating segment level.
20
(Thousand euro)
Impairment losses on goodwill are reviewed at least once a year or more frequently if events or changes in
circumstances indicate a potential impairment loss. Goodwill’s carrying amount is compared with the
recoverable amount, which is the higher of the value in use or the asset’s fair value less sale costs. Any
impairment loss is immediately registered as an expense and cannot be reversed.
Administrative concessions
Administrative concessions are recognized in the amount paid by the Company with respect to assignment or
operating royalties. In certain cases, concessions relate to the administrative authorization granted by
municipal authorities or other public bodies for the construction and subsequent operation of car parks,
highways, electric transmission lines and other assets during the periods specified in the relevant contracts;
assets related to those concessions are classified under the heading “concessionary assets assigned to
projects” (Note 2.7).
Computer software
Software licenses acquired from third parties are capitalized on the basis of the costs incurred to acquire and
prepare the licenses for the use of a specific program. These costs are amortized over the useful life of the
software for a maximum of 5 years.
Costs associated with developing or maintaining computer software programs are recognized as an expense
when incurred. Costs that are directly associated with the production of identifiable and unique software
products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond
one year, are recognized as intangible assets.
Computer program development costs recognized as assets are amortized over the program’s estimated
useful lives (no more than 5 years) on a straight-line basis.
Research and development expenses
Research expenditure is recognized as an expense as incurred. Costs incurred in development projects
(related to the design and testing of new or improved products) are recognized as intangible assets when the
following requirements are met:
•
•
•
•
•
•
Completion of production of the intangible asset so that it becomes available for use or sale is
technically possible;
Management intends to complete the intangible asset in question, for use or sale;
There is capacity to use or sell the intangible asset;
The manner in which the intangible asset will generate probable future economic benefits is
demonstrable;
Adequate technical, financial or other resources are available to complete development in order to use
or sell the intangible asset; and
The outlay attributable to the intangible asset during development can be reliably measured.
Other development expenditure is recognized as an expense when incurred. Development expenses
previously recognized as an expense are not recorded as an asset in a subsequent period. No development
costs are capitalized at 31 December 2015 and 2014.
2.7.
When concessions refer to administrative authorization granted by several public bodies for the construction
and later operation, during the period stated in the corresponding agreements, of car park, highways, electric
transmission lines and other assets, they are treated as established in IFRIC 12 from an accounting
perspective. This applies only when, according to the contractual terms, the Group has authorization to
operate the infrastructure but does not control because:
•
The concession assets are owned by the granting authority in the majority of cases.
21
(Thousand euro)
•
•
•
The granting authority controls or regulates the concession holder’s services and the conditions under
which they must be rendered.
Operated by the concession holder in accordance with the criteria set out in the concession documents
during the stipulated concession term.
At the end of that period, the assets revert to the granting authority and the concession holder no
longer holds any rights in this respect.
In the cases in which concessions are under the IFRIC 12 scope, related assets may be classified as:
•
•
Financial assets: When the granting authority establishes an unconditional right to receive cash or
other financial assets, regardless of public service demand made by users.
Intangible assets: Only in such cases in which contractual arrangements do not set an unconditional
right to receive cash or other financial assets from the granting authority, regardless of public service
demand made by users.
These concessions are mainly funded under the heading of “Project Finance”.
Although additional guarantees may exist during the construction and operational phases, these funding
structures are usually applied to projects that in themselves provide enough support to financial entities
related to the debts incurred. Each of these projects is performed through specific companies by which the
project’s assets are funded on the one hand by promoters contributions, limited to a certain amount, and on
the other hand through long-term debt from third parties. Debt servicing of these loans is mainly supported by
future cash flows generated by the project and by real guarantees on the project’s assets.
Revenue is recognized at the fair value of the service rendered.
Construction services:
The Group recognizes construction services revenue as stated in Note 2.23.
The amounts received or outstanding related to construction services are recognized at their fair value.
Assets are valued based upon the costs directly attributable to the construction, such as studies and projects,
expropriations, service replacement, work execution, work management and administration, plants and
buildings, until they are in operation, as well as the corresponding part of other indirect attributable costs. This
type of costs can be capitalized to the extent that they correspond to the construction period. Likewise, those
financial expenses accrued during the construction period are also capitalized (under the intangible asset
model).
The Group recognizes contractual obligations to the extent related services are incurred. Nonetheless, when
the granting authority has complied with its contractual obligations to a greater extent than those commitments
corresponding to the Group’s concessionary entity, a liability and an increase in the intangible assets will be
recognized for the amount that equalises the obligation rendered by the group to the obligation committed by
the granting authority. This situation mainly occurs when the Group’s concessionary entity has the right to
charge users from the beginning of the concession period and the infrastructure previously existed and will be
improved and/or extended later.
Under the intangible asset model, dismantling, retirement or replacement accruals as well as work relating to
improvements or increases in capacity the associated income of which is included in the concession contract,
are recognized from the beginning of the concession period as part of the fair value of the asset. Financial
discounts of such accruals and the corresponding amortization are recorded in the income statement for the
period.
In addition, provisions related to major repairs are registered in the income statement in a systematic and
accrual basis.
Under the financial asset model, the construction service counterpart is a receivable which also includes a
financial remuneration. It is calculated based upon the project’s expected rate of return in line with its
22
(Thousand euro)
estimated flows, which includes inflation forecasts and tariff reviews in those cases in which they are included
in the contract. Once the construction has finished, the Group re-estimate the fair value of the service
rendered if circumstances have changed or uncertainties that existed during construction have disappeared.
Once the operational phase begins, the receivable is valued at amortized cost and any difference between
actual and expected flows will be recognized in the income statement. Unless the circumstances affecting
concession asset flows significantly change (economical re-balances approved by the granting authority,
contract enhancement, etc.), the rate of return will not be modified. Economic rebalancing is only considered
for calculating the value of a financial asset when the grantor has a vested right to receive cash or other
financial assets.
Financial remuneration in concession financial assets is classified by the Group as operating revenue, since it
is part of the Group’s general activity, which is exercised on a regular basis and generates income
periodically.
When claims against the grantor due to construction overcosts arise, the Group only recognises the related
revenue when negotiations have reached an advanced stage such that is highly probable that the grantor will
accept the claim and the amount of the claim that the grantor will probably accept can be reliably measured.
Maintenance and operational services:
Safeguarding and maintenance costs not representing an increase in an assets useful life or productive
capacity are registered as an expense in the period in which they occur. At the end of the concession period,
the whole investment, net from any amount to be reimbursed by the granting authority, will be covered through
recognition of depreciation. The concessionary entity receives income based on services rendered, either
directly through the users or through the granting authority.
Once the operational phase begins, collections and operational costs are recognized as operating income and
expenses, respectively, in the year. Under the intangible asset model, assets are depreciated on a straightline basis over the concession period, except for highways and car parks, which are depreciated based upon
the demand (traffic volume and expected occupation) during the concession life. At each balance sheet date
the project performance is reviewed to assess if assets will be recovered through operating income generated
over the concession period; otherwise, there would be impairment.
2.8.
Interest cost
Interest costs incurred in the construction of any qualifying assets are capitalized over the period needed to
complete and prepare the asset for the intended use; they have been assessed in accordance with IAS 23.
Other interest costs are expensed.
General and specific borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are those that necessarily require a substantial period of time before they are ready
for their intended use or for sale, are added to the cost of the assets until the assets are substantially ready for
intended use or sale.
Financial income from temporary investments of specific borrowings pending their application in qualifying
assets is deducted from borrowings costs able to be capitalised.
Other borrowing costs are recognised in the income statement in the year in which they are incurred.
2.9.
Impairment of non-financial assets
Assets with an indefinite useful life and goodwill are not amortized/ depreciated and are tested annually for
impairment. Assets subject to amortization/depreciation are tested for impairment provided that an event or
change in circumstances indicates that their carrying amount might not be recoverable. An impairment loss is
recognized in the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher between an asset’s fair value less sale costs and value in use. For the
purposes of assessing impairment, assets are grouped together at the lowest level for which there are
separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill for which
23
(Thousand euro)
impairment losses have been recognized are tested at each balance sheet date in the event that the loss has
reversed.
2.10. Financial assets
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans
and receivables, held to maturity and held for sale. The classification depends on the purpose for which the
financial assets were acquired. Management establishes the classification of financial assets when they are
initially recognized and reviews the classification at each reporting date.
In accordance with IFRS 13 amendment, the Group classifies market-valued financial instruments based on
the lowest of used data that were significant with respect to the instrument whole fair value. In compliance
with this standard, financial instruments must be classified as follows:
1.
2.
3.
Quoted prices in active markets for identical instruments.
Directly (prices) or indirectly (based on prices), observable data for the instrument.
Data not based on market observations.
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired mainly for short-term sale. Derivatives are also categorized as held for
trading unless they are designated as hedges. The assets in this category are included in current assets,
where the intention is to settle them within 12 months; otherwise they are classified as non-current.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for maturities greater than 12 months
after the balance sheet date, which are classified as non-current assets. Loans and receivables are included
in trade and other receivables in the balance sheet (Note 2.13), as well as in concessionary assets assigned
to projects in the case of receivables related to the financial assets model (Note 2.7).
They are also included under the consolidated balance sheet heading “Cash and cash equivalents” (Note
2.14).
Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and
fixed maturities that Group management has the positive intention and ability to hold to maturity. If the Group
sells a non-insignificant amount of its held-to-maturity financial assets, the entire category will be reclassified
as held for sale. Such available-for-sale financial assets are included in non-current assets, except those that
mature within 12 months as from the balance sheet date, which are classified as current assets.
Financial assets held for sale
Financial assets held for sale are non-derivatives assets that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless management intends
to dispose of the investment within 12 months of the balance sheet date.
Recognition of financial assets
Acquisitions and disposals of investments are recognized at the trading date, i.e. the date the Group
undertakes to acquire or sell the asset. Investments are initially recognized at fair value plus transaction costs
for all financial assets not carried at fair value through profit or loss. Financial assets at fair value through profit
or loss are initially carried at fair value and transaction costs are taken to the income statement. Investments
are written off when the rights to receive cash flows from them have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. Available-for-sale financial assets
24
(Thousand euro)
and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and
receivables are carried at amortized cost using the effective interest rate method.
Gains and losses resulting from changes in the fair value of financial assets at fair value through profit or loss
are included in the income statement in the year in which they arise. Dividend income from financial assets at
fair value through profit or loss is recognized in the income statement when the Group’s right to receive
payment is established.
Changes in the fair value of monetary instruments denominated in foreign currency and classified as held for
sale are analyzed by separating the differences in the instrument’s amortized cost and other changes in the
instrument’s carrying amount. Translation differences on monetary instruments are recognized in the income
statement, while translation differences on non-monetary instruments are recognized in equity (other
comprehensive income). Changes in the fair value of monetary and non-monetary instruments classified as
held for sale are recognized in equity (other comprehensive income).
When available-for-sale instruments are sold or impaired, the cumulative fair value adjustments recognized in
equity are taken to the consolidated income statement.
Interest on available-for-sale instruments calculated using the effective interest rate method is recognized in
the income statement item “Net financial results”. Dividends from available-for-sale equity instruments are
recognized in the income statement in “Net financial results” when the Group’s right to receive payment is
established.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not
active (and for unlisted securities), the Group establishes fair value using measurement techniques which
include recent uncontrolled transactions between willing and knowledgeable parties relating to other
instruments that are substantially identical and the analysis of discounted cash flows and option pricing
models, maximizing market input and relying as little as possible on the entity’s specific inputs.
At the balance sheet date, the Group assesses whether there is objective evidence of impairment losses with
respect to a financial asset or group of financial assets. For equity instruments classified as held for sale, in
order to determine whether there is impairment losses it will be necessary to examine whether there is a
significant or protracted below cost decline in the fair value of the securities. If there is any evidence of this
type for available-for-sale financial assets, the cumulative loss determined as the difference between the
acquisition cost and current fair value, less any impairment loss in that financial asset previously recognized in
the income statement, is removed from equity and recognized in the income statement. Impairment losses
recognized in the income statement on equity instruments are not reversed through the income statement.
Impairment testing of receivables is described in Note 2.13.
A financial asset is derecognized when all risks and benefits associated with the asset’s ownership are
substantially transferred. In the case of receivables, this transference takes place when credit and default risks
are transferred.
Financial assets and liabilities are offset and presented by its net value in the balance sheet when there is a
legally enforceable right to offset the recorded amounts, and the Group has the intention to settle or to realize
the asset and settle the liability simultaneously.
2.11. Derivative financial instruments and hedging activities
Derivatives are initially recognized at fair value at the contract date and are subsequently re-measured at fair
value. The method to recognize the resulting gain or loss depends on whether the derivative is designated as
a hedging instrument and, if so, on the nature of the item being hedged. The Group applies hedging
accounting when the hedge is highly efficient, to hedge the fair value of hedged items. The Group may
designate certain derivatives as:
•
Fair value hedges of recognized assets and liabilities (fair value hedge);
25
(Thousand euro)
•
•
Hedges of a specific risk associated with a recognized liability or a highly probable forecast transaction
(cash flow hedge); or
Hedge of a net investment in a foreign operation (net investment hedge).
The Group documents at the inception of the transaction the relationship between hedging instruments and
hedged items, as well as its risk management objective and strategy for undertaking hedging transactions.
The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether or
not the derivatives used in hedge transactions are highly effective in offsetting changes in the fair value or
cash flows of the hedged items.
The fair value of some derivative financial instruments used for hedging purposes is shown in Note 11.
Movements on the hedging reserve are shown in the consolidated statement of changes in equity and
consolidated statement of comprehensive income. The total fair value of hedging derivatives is classified as a
non-current asset or liability if the period to maturity of the hedged item is more than 12 months and as a
current asset or liability if the period to maturity of the hedged item is less than 12 months. Derivatives not
classified as hedges for accounting purposes are classified as current assets or liabilities.
Regarding the amendment in IFRS 13, the Group proceeds to classify financial instruments market valuations
as stated in Note 2.10.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized
in the income statement together with any change in the fair value of the hedged asset or liability that may be
attributable to the risk hedged.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of the
hedged item for which effective interest rate method has been used, is recorded as profit or loss up to its
maturity.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow
hedges is recognized in equity. The gain or loss relating to the ineffective portion is immediately taken to the
income statement.
Amounts accumulated in equity are reclassified to in the income statement in the periods when the hedged
item affects results (for instance, when the forecast sale that is hedged takes place). The gain or loss relating
to the effective portion of interest rate swaps hedging variable-rate borrowings is recognized in the income
statement item “Net financial results”. The gain or loss relating to the effective portion of forward foreign
currency contracts hedging sales is recognized in the income statement item “Revenue/Sales” and the ones
hedging purchases is recognized in “Materials consumed and other external costs”.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and it is recognized
when the forecast transaction is ultimately recognized in the income statement. When a forecast transaction is
no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred
to the income statement item “Net financial results”.
Net investment hedge
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in equity.
The gain or loss relating to the ineffective portion is immediately recognized in the income statement. Gains
and losses accumulated in equity are included in the income statement when the foreign operation is disposed
of.
26
(Thousand euro)
Derivative financial instruments at fair value through profit or loss
Certain derivatives do not qualify for hedge accounting and are recognized at fair value through profit or loss.
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are
immediately recognized in the income statement item.
2.12. Inventories
Raw materials and finished products are carried at the lower between the acquisition or production cost, using
the weighted average cost method, or the net realizable value (the lowest).
Finished products and work in progress items costs include design costs, raw materials, direct work force,
other direct costs and general manufacturing costs (based on a normal capacity of production facilities).
Changes in prices of such inventories referred to variable indexes are recorded against inventories value.
Buildings under construction and other structures are measured based on direct execution costs, also
including financing costs incurred during the development phase and structural costs attributable to the
projects. These items are classified as short- or long-term cycle depending on whether the period to
completion is less or more than twelve months.
Obsolete, defective or slow-moving products are written down to their net realizable value.
Net realizable value is the selling price estimated during ordinary business course, less applicable sale
variable costs.
2.13. Trade and other receivables
Trade receivables are amounts due from customers related to goods sold or services rendered in the ordinary
course of business. If the receivables are expected to be collected in a year or less (or in the operation cycle if
longer), they are classified as current assets. Otherwise, they are recorded as non-current assets.
Trade receivables are initially recognized at fair value and are subsequently measured at amortized cost using
the effective interest rate method, less provision for impairment. A provision for impairment of trade
receivables is established when there is objective evidence that the Group will not be able to collect all
amounts due in accordance with the original terms of the receivables. The existence of significant financial
difficulties on the part of the debtor, the probability that the debtor will become bankrupt or undertake a
financial restructuring, and late payment or default are considered to be indicators of the impairment of a
receivable. The amount of the provision is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the effective interest rate. The asset’s carrying amount is
written down as the provision is applied and the loss is recognized in the income statement. When a
receivable is uncollectable, the provision for receivables is adjusted accordingly. Subsequent recoveries of
receivables written off are recognized in the income statement for the year in which the recovery takes place.
2.14. Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits in banks and other short-term highly liquid
investments with original maturities of three months or less. Bank overdrafts are shown within bank
borrowings in current liabilities on the balance sheet.
2.15. Share capital
Share capital consists entirely of ordinary shares classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Where any Group company purchases the Parent company’s equity share capital (treasury shares), the
consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from
27
(Thousand euro)
equity attributable to the Parent company’s equity owners until the shares are redeemed, reissued or sold.
When these shares are sold or subsequently reissued, any amount received, net of any incremental cost on
the transaction which is directly attributable and the corresponding income tax effects, and is included in
equity attributable to the parent Company’s equity owners.
2.16. Deferred income
a)
Official grants
According to IFRS-EU, official grants are booked when there is a reasonable assurance of compliance with all
the conditions related to their enjoyment and that they will be received. Grants and aids given to the Group are
subject to several conditions. Expectations on compliance with requirements to get the above-mentioned
grants are continually assessed, considering that they will be fulfilled without the Group having to restore
them. Thus, grants are recognized at 31 December 2015 and 2014 (Note 19).
The Group has several grants to fund its investments. Due to the varied characteristics of each grant received,
judgement is used to determine their amount in those cases in which the aids refer to non-interest-bearing
loans. In these situations, implicit interests are computed by using the effective market rate to calculate a
loan’s fair value. The difference between the nominal amount and the fair value of loans is considered as
deferred income and is registered in the income statement in line with what is being financed. If the noninterest-bearing loan is allocated to an asset acquisition, the deferred income is registered as profit / (loss) for
the year, during the useful life of that asset. Otherwise, if the non-interest-bearing loan is related to an
operating cost, the deferred income is recognized in the income statement at the time that the expense is
incurred.
b)
Non-interest-bearing loans granted by official entities
Non-interest-bearing loans received by the Group are registered at present value (calculated applying the
effective market interest rate). The difference at the initial date between the nominal value of the loan and its
present value is booked as follows: when the funding is allocated to an asset acquisition, the above-mentioned
difference is considered as deferred income and is registered on the income statement during the period in
which such financial assets are amortized.
c)
Deductions
Tax revenue corresponding to deductions or allowances in the income tax amount pending of application, from
investments in property, plant and equipment, is registered in the consolidated income statement in the same
period in which the property, plant and equipment that gave rise to them is depreciated, because they are
specific aids subject to certain conditions and aimed at encouraging investment in renewable energies.
2.17. Trade and other payables
Trade payables are initially recognized at fair value and are subsequently measured at amortized cost using
the effective interest rate method.
Payables are classified as current liabilities if payments mature is less than a year. Otherwise, they are
classified as non-current liabilities.
2.18. Compound financial instruments
The liability component of a compound financial instrument is recognised initially at the fair value of a similar
liability that does not have an equity conversion option. The equity component is recognised initially at the
difference between the fair value of the compound financial instrument as a whole and the fair value of the
liability component. Any directly attributable transaction costs are allocated to the liability and equity
components in proportion to their initial carrying amounts.
28
(Thousand euro)
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. Estimated cash flows are re-estimated at each closing date
and changes in the amortised costs using the original effective interest rate are recognised against profit and
loss. The equity component of a compound financial instrument is not re-measured subsequent to initial
recognition except on conversion or expiry.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the end of the reporting period.
2.19. Bank Borrowings and other financial liabilities
Bank borrowings are initially carried at fair value net of transaction costs. They are subsequently measured at
amortized cost. Any differences between the funds obtained (net of necessary costs) and their repayment
value are recognized in the income statement over the life of the debt applying the effective interest rate
method.
Bank borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement for at least 12 months as from the balance sheet date.
Interest and other costs incurred to obtain bank loans are taken to the income statement for the year on an
accrual basis.
Commissions paid on the arrangement of credit lines are recognised as debt transaction costs provided that it
is probable that part or all the line will be used. In this case, the commissions are deferred until the line is
utilised. Insofar as it is not probable that all or part of the credit line will be used, the commission is capitalised
as an advance payment for liquidity services and is amortised over the period during which the facility is
available.
Other financial liabilities mandatorily convertible into equity instruments on a specific date or in a specific time
period are initially recognised at fair value, net of transaction costs, and are subsequently measured at
amortised cost, using the original effective interest rate and adjusting the carrying amount through profit or
loss due to changes in estimated future debt repayment flows.
An exchange of debt instruments between a debtor and creditor, provided that the instruments have
substantially different conditions, will be recognized as the settlement of the original financial liability and the
recognition of a new financial liability. Similarly, a substantial modification of the current conditions governing a
financial liability or a portion thereof (regardless of whether or not it is attributable to financial difficulties
affecting the debtor) is recognised as a settlement of the original financial liability and a new financial liability is
recognised.
In order to apply the previous paragraph, the Group considers that the conditions will be deemed to be
substantially different if the present value of discounted cash flows under the new conditions, including any fee
paid net of any fee received, and applying the original effective interest rate to the discount differs by at least
10% from the present discounted value of the cash flows that still remain with respect to the original financial
liability. When a debt instrument exchange or a modification of it, it is recorded as an elimination, the costs
and commissions incurred will be recognised as part of the results deriving from the extinguishment. If the
exchange or modification mentioned above is not recognised as an extinguishment, the costs and
commissions will be adjusted by the carrying value of the liability and amortised over the remaining life of the
modified liability.
2.20. Current and deferred income taxes
Tax expense for the year comprises current and deferred tax. Tax is recognized in the income statement
except to the extent it relates to items recognized directly in equity. In this case, tax is also recognized in
equity.
The current tax charge is calculated based on the tax laws approved or about to be approved at the balance
sheet date in the countries where the Group’s companies operate and generate results subject to tax.
29
(Thousand euro)
Management assesses regularly the positions taken in relation to tax returns with respect to situations where
tax law is subject to interpretation, and establishes, where appropriate, the necessary provisions on the basis
of the amounts that it is expected to pay to the tax authorities.
Deferred income tax is calculated, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated annual accounts. However, if the
deferred taxes arise from the initial recognition of a liability or an asset on a transaction other than a business
combination that at the time of the transaction has no effect on the tax gain or loss, they are not accounted for.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted
by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or
the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be offset.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except where the timing of the reversal of the temporary differences is controlled by the Group and
it is likely that the temporary difference will not reverse in a foreseeable future.
Deferred tax assets and liabilities are offset if, and only if, there is a legally recognized right to offset current
tax assets against current tax liabilities and when the deferred tax assets and deferred tax liabilities derive
from income tax levied by the same taxing authority on the same taxable entity or person or different taxable
entities or persons which intend to settle current tax assets and liabilities on a net basis.
2.21. Employee benefits
Pension and retirement obligations
For the purposes of their accounting treatment, defined contribution plans under which the Group’s obligation
consists solely of contributing an annual amount must be differentiated from defined benefit plans under which
employees are entitled to a specific benefit on the accrual of their pensions.
Defined contribution plans
A defined contribution plan is a pension plan under which the Group pays fixed contributions to a fund and has
no legal or constructive obligation to make additional contributions if the fund has insufficient assets to pay to
all the employees the benefits related to the services rendered in the current year and in prior years.
Contributions accrued in respect of defined contribution plans are expensed annually.
Defined benefit plans
A defined benefit plan is a pension plan that is not a defined contribution plan. A defined benefit plan usually
defines the amount of the benefit that will be received by an employee at the time of retirement, normally on
the basis of one or more factors such as age, years of service and remuneration.
The liability recognized in the balance sheet with respect to defined benefit pension plans is the present value
of the defined benefit obligation at the balance sheet date less the fair value of the plan assets and any
unrecognized past service costs. The defined benefit obligation is calculated annually by independent
actuaries in accordance with the projected unit credit method. The present value of the obligation is
determined by discounting the estimated future cash flows at interest rates on government Senior Notes
denominated in the currency in which the benefits will be paid and maturities similar to those of the relevant
obligations.
At 31 December 2015 and 2014 the Group does not have this type of defined contribution or defined benefit
plans.
30
(Thousand euro)
Termination benefits
Termination benefits are payable as a result of the Group’s decision to terminate employment before the
normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these
benefits. The Group recognizes these benefits when it has demonstrably undertaken to terminate current
employees’ employment in accordance with a formal detailed plan that cannot be withdrawn, or to provide
severance indemnities as a result of an offer made to encourage voluntary redundancy. Benefits that will not
be paid within 12 months of the balance sheet date are discounted to their present value.
Profit-sharing and bonus plans
The Group recognizes a liability and an expense for bonuses and profit-sharing based on a formula that takes
into consideration the profit attributable to the Company’s equity owners after certain adjustments. The Group
recognizes a provision when contractually obliged or when there is a past practice that has created a
constructive obligation.
2.22. Provisions
The Group recognizes a provision when: it has a present legal or constructive obligation as a result of past
events; it is likely that an outflow of resources will be required to settle the obligation; and the amount has
been reliably estimated. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are carried at the present value of forecast payments that are expected to be required to settle the
obligation, using a rate before taxes that reflects the current market assessment of the time value of money
and the specific risks of the obligation. The increase in the provision due to passage of time is recognized as
interest expense.
Provisions for project completion and loss-making construction contracts are explained in Note 2.23.
Dismantling accruals
Based on technical studies performed, the Group has estimated the present dismantling cost of technical
installations recognized under the heading of assets assigned to projects. This estimation has been
capitalized as higher asset value and depreciated over its useful life, which in most cases is similar to lease
contracts subscribed for the lands in which the installations have been installed.
In addition, the Group has capitalized the present value of the estimated dismantling and retirement costs of
the plants at the end of their useful life.
Concessionary assets dismantling, retirement and major maintenance provisions are detailed in Note 2.7.
2.23. Revenue recognition
Revenue / Sales include the fair value of payments received or receivable for the sale of goods and services
in the ordinary course of the Group’s activities. Sales are presented net of value added tax, returns, rebates
and discounts, and after eliminating sales within the Group.
The Group recognizes revenue when the amount may be reliably estimated, it is likely that the future
economic benefits will flow to the entity and the specific conditions are fulfilled for each of the Group’s
activities, as described below. A reliable calculation of the amount of revenue is not deemed possible until all
sale-related contingencies have been resolved. The Group’s estimates are based on historical results, taking
into consideration customer type, transaction type and specific terms of each arrangement.
The methods used to recognize revenue in each of the Group’s business activities are described below:
31
(Thousand euro)
Construction business
When the results of a construction contract may be reliably estimated, ordinary revenue and associated costs
of the contract are recognized as such in the income statement, based on the percentage of completion of the
activity performed under the contract at the balance sheet date. When a project is expected to generate a
loss, the necessary provisions are recorded to cover the entire loss during preparation of the updated budget.
Percentage of completion is generally determined by examining work executed. This method may be used
since all contracts generally include:
•
•
•
A definition of each project unit that must be executed to complete the whole project;
A measurement of each of these project units; and
The price at which each unit is certified.
In order to put this method into practice, at the end of each month a measurement of completed units is
obtained for each project. The resulting total is the amount of construction work executed at the contractual
price, which is recognized as project revenue from inception. The difference with respect to the corresponding
figure a month earlier is production for the month, which is the amount recognized as revenue.
The cost of executing a project is recognised on an accrual basis, recognising the expenses actually incurred
to perform the units of work as expenses (including unaccrued expenses and those for which no supplier
invoices have been received from the supplier, in which case a liability will be recognised for the invoices to be
received). In case that the proyects are cancelled when the returnable positions must be determinated, the
Direction fix the best stimations base on experts reports, their legal experts and other relevant information.
The application of this revenue recognition method is combined with the preparation of a budget made for
each construction contract by project unit. This budget is used as a key management tool in order to maintain
detailed monitoring, project unit by project unit, of fluctuations between actual and budgeted figures.
In such exceptional cases, when it is not possible to estimate the margin for the entire contract, the total costs
incurred are recognized and sales that are reasonably assured with respect to the completed work are
recognized as contract revenue, subject to the limit of the total contract costs. In the event that they are
cancelled, recoverable positions are determined by management based on the best estimates of third-party
appraisals, the analyses provided by legal advisors and other relevant available information.
During the execution of construction work, unforeseen events not envisaged in the primary contract may occur
that increase the volume of work to be executed. These changes to the initial contract require the customer’s
technical approval and subsequent financial approval. This approval permits, from that moment, the issue and
collection of certificates for this additional work. Revenue from the additional work is not recognized until the
customer’s approval is reasonably assured; costs incurred in this work are, however, recognized when
incurred, irrespective of the degree of approval obtained from the customer.
In the event that the amount of work actually executed in a project exceeds the amount certified at the year
end, the difference between the two amounts is reflected in the consolidated balance sheet item “Trade and
other receivables”. When the amount of work actually executed in a project is lower than the amount of the
certificates issued, the difference is recognized in the consolidated balance sheet item “Trade and other
payables”.
Estimated project close-out costs are provisioned and deferred over the execution period. These costs are
recognized proportionally on the basis of estimated costs as a proportion of executed work. Costs incurred
from project completion to definitive settlement are charged to the provision recorded and the remaining
balance is recognized in the item “Provisions for other liabilities and charges” in current liabilities in the
consolidated balance sheet.
In the case of construction contracts at the year end that are expected to make a loss, the estimated loss is
recognised when it is unlikely to be offset by additional revenue.
32
(Thousand euro)
When claims against the client due to construction overcosts arise, the Group only recognises the related
revenue when negotiations have reached an advanced stage in which it is highly probable that the client will
accept the claim and claim´s amount that the client will probably accept can be reliably measured.
Late-payment interest arising from delays in the collection of certificates from public administrations is
recognized when it is likely that the interest will actually be collected and the amount may be reliably
measured. These interests are included in the financial income item of the income statement.
Costs relating to the tendering of bids for construction contracts are taken to the income statement when
incurred, when the success of the bid is not probable or is not known at the date the costs are incurred. Bid
tendering costs are included in the cost of the contract when the success of the bid is probable or is known, or
when it is certain that the costs will be reimbursed or included in contract revenue.
Engineering business
Engineering project revenue is recognized on a percentage-of-completion basis, based on direct costs
incurred in relation to total estimated costs.
The methods described for the construction business, as regards the recognition of revenue for additional
work, recognition of estimated future losses by recording provisions, accounting treatment of any timing
differences between revenue recognition for accounting purposes and the certificates issued to customers,
recognition of late-payment interest, treatment of costs related to bids submitted and treatment of claims
submitted to customers are also applied to the engineering business.
Concessions and services business
The Group has concessions to operate electricity infrastructure, car parks, toll roads, and others (Note 2.7).
The services business consists mainly of environmental services, such as wastewater treatment, and
maintenance services for industrial infrastructure and related areas.
Under concession and management contracts for services, revenue and expenditure is recognized on an
accrual basis, irrespective of when the related monetary or financial flows take place. The accounting
treatment of the main activities is described below.
Multiple element contracts
Concessions for public services are contracts between a private operator and the Government or a different
public body, in which the latter party grants to the private operator the right to provide public services such as
the supply of water or electricity, or the operation of roads, airports or prisons. Control over the asset is
retained by the public sector, but the private operator assumes responsibility for building the asset and for
operating and maintaining the infrastructure. Depending on the contract terms, concessions are treated as
intangible assets (when the predominant element is that the concession holder has the right to receive fees
directly from users or the level of future flows are not assured by the granting authority) or as financial assets
(when the granting authority guarantees a level of future cash flows).
The Group offers certain agreements under which it builds an infrastructure in exchange for a concession to
operate it for a specified period. When such contracts contain multiple elements, the amount of revenue
recognized is defined as the fair value for each phase of the contract. Revenue from infrastructure
construction and engineering is recognized as described in the preceding paragraphs. Revenue from an
intangible asset operation is recognized on an accrual basis as operating revenue. When a financial asset has
been recognized, revenue is treated as a principal repayment with an interest income component. The
characteristics of the Group’s main activities are described below:
33
(Thousand euro)
Toll roads/electricity transmission lines
In most cases, the principle of risk and business venture on the part of the concession holder coexists with the
principle of assurance of the concession's economic and financial equilibrium on the part of the Government.
Revenue is recognized at fair value during the construction phase. When the granting authority directly
provides or guarantees a level of revenue for the concession holder, the asset is included in receivables.
When the concession holder has the right to receive fees from users or revenues are not guaranteed, an
intangible asset is recognized. In such cases, the Group recognizes revenue on an accrual basis and the
intangible asset is depreciated over the concession term using a straight-line method, except for some toll
roads infrastructures concessions in which the depreciation is recognized based in the traffic forecast for the
concession.
Car parks
Car park business may be divided into:
•
Car parks for local residents:
This business involves the construction of car parks whose spaces are sold directly to the end customer.
The sale and related costs are not recognized until the parking space has been handed over, which
usually coincides with the execution of the public deed of sale. Additionally, in order to recognize the sale
and costs, construction of the car park must have been completed and the license for the use of the car
park must have been delivered. Commitments formalized in car park sale contracts pending handover are
recorded as advanced receivables in the amounts obtained on account of the parking space. Capitalized
costs are included in inventories and measured as described in the relevant section.
•
On-street car parks:
This is a public service rendered to local authorities, which mainly concerns the management of public
parking and the collection of the fees charged by municipalities for these services. The revenues are
usually the hourly parking fees paid or the price paid for the public service by the council and is
recognized when the relevant amounts fall due for payment. In the case of concessions, the amount paid
to obtain the concession is recognized in the income statement over the concession period. Capitalized
costs are included as intangible assets or financial assets, depending on the characteristics of the
contract. Depreciation is charged on a straight-line basis during the concession term and begins when the
asset is available for use.
•
Off-street car parks:
In this case, revenues arise from the use of parking spaces owned by the company or held under an
administrative concession. Off-street car park revenues are recorded when the hourly parking rate is paid
and, in the case of season ticket holders, on an accrual basis.
Revenues from mixed car parks (off-street and for local residents) are recognized as described in the
preceding paragraph, in the case of the off-street spaces. As regards spaces for local residents, the amounts
received for spaces handed over are recorded in liabilities and taken to the income statement on a straightline basis over the relevant concession periods, provided the distributable costs may not be reasonably
segregated. During the accounting period in which the revenues are recognized, the necessary provisions are
posted to cover costs to be incurred following handover. These provisions are calculated using the best
estimates of costs to be incurred and may only be reduced as a result of a payment made in relation to the
costs provisioned or a reduction in the risk. Once the risk has disappeared or the payments have been made,
the surplus provision is reversed. Capitalized costs are recognized as intangible assets.
Electric energy sales
Electricity sales carried out by solar-photovoltaic plants in accordance with the sector regulations, as
described below, are usually registered based upon the actual production. In the case of solar-photovoltaic
plants in Spain, a complement due to investment costs (based on a standard per technology) and a
complement related to operation compensation are additionally accounted for. Sales for the period include the
estimate about provided energy which is pending to be invoiced at the year end.
34
(Thousand euro)
Up until 2013 solar-photovoltaic plants in Spain operated and received compensation based on Royal Decree
661/2007 (25 May), which regulates the production of energy under the special system, or based on Royal
Decree 1578/2008 (26 September) on compensation for the generation of electricity using solar-photovoltaic
technologies after the deadline for maintaining compensation in accordance with Royal Decree 661/2007 (25
May). In both cases the compensation was based on the right to receive a regulated rate for up to 30 years.
During the period in which the aforementioned Royal Decrees were in force certain legislative changes were
made that did not modify the essence of the compensation system, but did introduce limits and variables that
changed the income to be received.
Upon the publication of Royal Decree-Law 9/2003 (12 July 2013), which adopts urgent measures to guarantee
the financial stability of the electrical system, solar-photovoltaic plants and other renewable-source electricity
generation technologies, may also receive during the regulatory useful life specific compensation consisting of
an amount per unit of installed capacity that covers, when appropriate, the investment costs for each typical
solar-photovoltaic plant that cannot be recovered through the sale of energy on the market, in addition to the
compensation for the sale of energy at market values, and the former is called compensation for the
investment. There is also an amount that covers, if appropriate, the difference between operating costs and
market share revenue which is called compensation for operations
To calculate the compensation for the investment and compensation for operations for a typical plan the
standard revenues from the sale of energy produced at market prices, the standard operating costs necessary
to carry out the activity and the standard value of the initial investment are taken into consideration. The
standard values will be set in a Ministerial Order published by the Ministry of Industry, Energy and Tourism for
each of the various solar-photovoltaic plants which may be segmented by technology, capacity, age, etc.
The compensation for the investment and, if appropriate, compensation for operation will allow the cost of
plants to be covered such that they may compete on equal level with other technologies and may obtain a
reasonable profit, which will be set based on the average yield of 10-year Spanish Government Senior Notes
plus a spread. Both the spread that is set and certain compensation parameters that will be established in the
Ministerial Order may be changed every six years.
The new regulation took effect on 13 July 2013, although certain developments were published in 2014. One
of these was Royal Decree 413/2014 of 6 June which regulates the production of electricity using renewable
energy sources, co-generation and waste. Another was Order IET/1045/2014 of 16 June which approved the
remuneration parameters for standard facilities applicable to certain electricity production plants using
renewable energy, co-generation and waste and established the parameters to be considered for calculating
the specific remuneration to which each facility is entitled as well as the different standards by plant type.
Based on the regulatory changes, impairment tests are conducted on the Cash Generating Units (CGU) of the
photovoltaic solar power plant.
2.24. Interest Income
Interest income is recognised using the effective interest method. When a loan and receivable is impaired, the
Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument, and continues unwinding the discount as
interest income. Interest income on impaired loan and receivables is recognised using the original effective
interest rate.
2.25. Dividend Income
Dividend income is recognised when the right to receive payment is established.
35
(Thousand euro)
2.26. Leases
When a Group company is the lessee – Finance lease
The Group leases certain property, plant and equipment. Property, plant and equipment leases where the
Group has substantially all the risks and rewards of ownership are classed as finance leases. Finance leases
are capitalized at the lease’s inception at the lower between the fair value of the leased property and the
present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on
the outstanding debt. The corresponding rental obligations, net of finance charges, are included in other longterm payables. The interest element of the finance cost is charged to the income statement over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under finance lease is depreciated over the shorter of the
useful life of the asset or the lease term.
When a Group company is the lessee – Operating lease
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from
the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
When a Group company is the lessor
When assets are leased under finance lease, the present value of lease payments is recognized as a financial
account receivable. The difference between the gross receivable and the present value of that amount is
recognized as a financial return on capital.
Lease revenues are recognized during the lease period in accordance with the net investment method, which
reflects a constant periodic rate of return.
Assets leased to third parties under operating lease contracts are included in tangible fixed assets on the
balance sheet. Income from leases is recognized on a straight-line basis during the lease term.
2.27. Dividend distribution
Dividend distribution to the Parent Company’s equity holders is recognized as a liability in the Group’s
consolidated annual accounts in the year in which the dividends are approved by the parent Company’s equity
holders.
2.28. Environment
The consolidated Group has no environmental liabilities, costs, assets, provisions or contingencies that could
be significant in relation to its equity, financial situation and results. No specific breakdowns are therefore
included in these notes to the consolidated annual accounts relating to environmental issues.
2.29. Operating results
The income statement caption Operating results includes the results of the Group companies’ ordinary
activities, excluding financial results (see Note 27) and shares on results of companies consolidated under the
Equity method and under discontinuing operations.
2.30. Non-current assets (or disposable groups) and related liabilities held for sale and discontinued
operations
Non-current assets and associated liabilities (or disposable groups of assets) are classified as assets held for
sale and liabilities associated with non-current assets held for sale when their value will be recovered mainly
through their sale, provided that the sale is considered to be highly probable and the asset is available for
36
(Thousand euro)
immediate sale in its current state. These assets are measured at the lower of the carrying value and fair
value less selling costs.
Discontinued operations represent components of the Group that will be sold or otherwise disposed of, or are
classified as held for sale. These components consist of operations and cash flows that may be clearly
distinguished from the rest of the Group from both an operating and financial information point of view and
they represent lines of business or geographic areas that may be considered to be separate from the rest.
2.31. Segment reporting
Operative segments are consistently disclosed with internal information, which is presented to the highest
decision-making unit. This unit is responsible for operative segments resources allocation and for these
segments’ performance assessment. Management Committee has been designed as the highest decisionmaking unit (Note 5).
The Management Committee has established operating segments based on the financial information that the
Board of Directors reviewed and used in making strategic decisions.
The accounting policies of these segments are the same that are applies and described in these consolidated
financial statements.
3.
Financial risk management
3.1.
Financial risk factors
Group’s activities are exposed to a variety of financial risks: market risk (including foreign exchange risk, fair
value interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management
program focuses on financial markets uncertainty and seeks to minimize potential adverse effects on the
Group’s financial performance. The Group uses derivative financial instruments to hedge certain risks.
Risk management is performed by the Group’s Central Treasury Department in accordance with policies
approved by the Board of Directors. This department identifies, evaluates and hedges financial risks in close
association with the Group’s operating units. The Board provides written policies for overall risk management
and for specific areas such as foreign exchange risk, interest rate risk, liquidity risk, use of derivatives and
non-derivatives, and investment of cash surpluses.
a)
Market risk
a.1)
Foreign exchange risk
The Group has international operations and is therefore exposed to foreign exchange risk during currency
transactions, relating particularly to the US Dollar (USD), Brazilian Real, Mexican Peso and Indian Rupee, as
well as to other currencies. Foreign exchange risk arises from future commercial transactions, recognized
assets and liabilities and net investments in foreign operations.
Management has implemented a policy that requires the Group companies to manage foreign exchange risk
with respect to their functional currency. The Group companies are obliged to hedge all foreign exchange risk
through the Central Treasury Department. Foreign exchange risks arising from future commercial transactions
and recognized assets and liabilities are hedged by means of forward contracts traded through the Group’s
Treasury Department. Foreign exchange risk arises when future commercial transactions or recognized
assets and liabilities are denominated in a currency other than the company’s functional currency.
The Group’s Treasury Department has a policy of hedging net forecast flows deriving from forecast
transactions in currencies other than the functional currency of the Group company that effects the
transaction. At 31 December 2015 and 2014 there were foreign current call-put transactions related to
companies located in Spain, USA, Asia and Latin America (See Note 11).
37
(Thousand euro)
The Group’s transactions are generally completed in each country’s functional currency, although transactions
are often effected in a different currency (mainly in Spain, India, and Latin America), particularly in US Dollars
and Euro. At 31 December 2015, had the functional currency of each country with transactions in US Dollars
depreciated/appreciated by 10% against the US Dollar, without any change in the remaining variables, the
consolidated result after tax for 2015 would have been 19,339 thousand euro lower/higher (2014: 17,850
thousand euro lower/higher), mainly due to the effects of the increase/decrease in US dollars liability/asset
positions. Equity would have changed by the same amounts (effects calculated excluding the impact of fair
value changes in the derivative financial instruments contracted).
The Group has a number of investments in foreign operations whose net assets are exposed to foreign
exchange risk. These investments are located basically in Netherlands, Latin America (Brazil and Mexico),
USA and India. In general, the Group ensures that operations in each country are financed by bank
borrowings in the functional currency of that country so that foreign exchange risk only affects the capital
investment. Where the investment is partially or fully financed by bank borrowings, the Group ensures that the
loans are obtained in the correspondent functional currency. When no financing is used, the Group does not
contract hedges, except in certain cases in which short-term forecast flows relating dividends from the
subsidiary are hedged. Set out below is a breakdown of the main foreign currency exposures affecting capital
investments (measured considering net assets from foreing consolidated subsidiaries, and investment in joint
ventures included in Note 9):
Brazilian Real (*)
Mexican Peso (*)
Indian Rupee
US Dollar (*)
Other currencies (*)
Total
2015
526,640
237,853
396,261
427,679
244,528
1,832,961
2014
504,124
255,927
339,983
457,571
184,310
1,741,915
(*) Excluding the value of goodwill at each date, as mentioned in Note 7.1.
a.2)
Price risk
The Group is not exposed to equity instrument price risk since it has no significant investments. The Group is
partially exposed to market price risk in respect of raw materials, relating basically to metals and oil, which
affect the price of supplies of equipment and materials manufactured in the projects executed by the Group.
Generally, these effects are efficiently passed on in selling prices by all similar contractors operating in the
same sector. The Group reduces and mitigates price risk by means of policies implemented by management,
consisting basically of a reduction or increase in the rate of placements and the selection of currencies and
countries of origin, as well as by ensuring the production or acquisition of certain raw materials at a closed
price.
a.3)
Cash flow and fair value interest rate risk
Interest rate risk must be analyzed in relation to the two types of financing obtained by the Group:
•
Project finance
As explained in Note 8, the Group participates in a number of investment projects under “Project finance”
arrangements in which, among other aspects, repayments are secured only by cash flows from the respective
projects; there may be, in some cases and during the construction phase, additional guarantees. In such
cases, financing mainly comprises long-term, variable-rate instruments. The interest rates applicable depend
on the country in which the project is located and on the currency in which the financing is issued. Financing
issued at variable rates exposes the Group to cash flow interest rate risk. The Group uses interest rate swaps
to convert long-term financing totally or partially to fixed interest rates. Additionally, under certain project
finance contracts the company that obtains the financing undertakes vis-à-vis the granting banks to contract
the above-mentioned derivative financial instruments.
Exposure to variable interest rate risk at each year end is analyzed below:
38
(Thousand euro)
2015
Euribor Rate
Project Finance
Cash and cash equivalents interest-bearing
Net position
Portion hedged with derivative financial instruments
2014
158,997
(442)
158,555
71%
Euribor Rate
Project Finance
Net position
162,312
(201)
162,111
69%
Other rates (*)
76,544
(2,475)
74,069
0%
Other rates (*)
81,773
(4,365)
77,408
0%
Total
235,541
(2,917)
232,624
48%
Total
244,085
(4,566)
239,519
47%
(*) Includes project finance related to non-current assets held for sale (Note 15)
The Group analyses its exposure to interest rate risk in a dynamic manner. A simulation is performed in which
the Group calculates the effect on results of a specific change in the interest rate. In each simulation, the
same interest rate fluctuation is used for all currencies and reference rates. Scenarios are only simulated for
liabilities representing the most relevant interest-bearing positions. Based on the simulations performed, the
impact on results after tax of an increase/decrease of 100 basis points in the interest rate would have been a
reduction/increase of 888 thousand euro (2014: 672 thousand euro), mainly due to a rise/reduction in interest
expense on variable-rate loans; equity would have changed by the same amounts (effects calculated without
considering the impact of fair value changes in the derivative financial instruments contracted).
•
Bank Borrowings
The Group’s interest-rate risk arises mainly from long-term bank borrowings. Bank borrowings issued at
variable rates expose the Group to cash flow interest rate risk. Fixed-interest bank borrowings and Senior
Notes expose the Group to fair value interest rate risk. A large part of the Group’s bank borrowings are
obtained at variable rates, the main reference rate being the Euribor. The Group policies consist in the use of
interest rate swaps to convert long-term financing to fixed interest rates.
Exposure to variable interest rate risk at each year end is analyzed below:
Euribor Rate
2015
Other rates
Total
Bank Borrowings
499,135
188,304
687,439
(70,767)
(95,501)
(166,268)
Net position
428,368
54%
92,803
0%
521,171
39%
Euribor Rate
2014
Other rates
Total
Bank Borrowings
447,445
226,843
674,288
(88,645)
(183,726)
(272,371)
Net position
358,800
101%
43,117
0%
401,917
67%
39
(Thousand euro)
The Group analyses exposure to interest rate risk in a dynamic manner. A number of scenarios are simulated
taking into consideration refinancing, renewal of current positions, alternative financing, existence of variablerate investments (in this sense, very short-term interest-bearing placements are treated as being exposed to
variable interest rates) and existing hedges. Through these scenarios, the Group calculates the effect on
results of a specific change in the interest rate. In each simulation, the same interest rate fluctuation is used
for all currencies. Scenarios are only simulated for liabilities that represent the most relevant interest-bearing
positions. Based on the simulations conducted, the impact on after-tax results of an increase/decrease of 100
basis points interest rate would decrease/increase in 729 thousand euro (2014: 1,640 thousand euro), mainly
due to higher/lower interest expense on variable rate loans; equity would have changed in the same amount
(effects calculated not considering the impact of changes in fair value of financial derivatives contracts).
b)
Credit risk
The Group manages credit risk in relation to the following groups of financial assets:
•
•
Derivative financial instruments (see Note 11) and balances included under Cash and cash equivalents
and financial assets at fair value through profit or loss (see Note 14).
Balances related to trade and other receivables (see Note 12).
Derivative financial instruments and bank transactions included in cash and cash equivalents and financial
assets at fair value through profit or loss are contracted with reputable financial institutions that obtain high
credit ratings.
According to trade and other receivables (54.20% and 56.27% at 31 December 2015 and 2014, respectively)
relate to transactions with national and international public institutions and the Group therefore considers that
credit risk is under tight control. A significant part of the receivables from private companies relate to
companies with high credit ratings and there is no default history with respect to the Group. A follow-up is
performed on a periodically basis of the overall position in trade and other receivables and also an individual
analysis of the most significant exposures.
c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed credit facilities and the ability to close out
market positions. Due to the dynamic nature of the underlying businesses, Group Treasury aims to maintain
flexibility in funding by keeping committed credit lines available.
Regarding to the Group’s project financing arrangements (“Project finance”), as explained in Note 8,
repayments are secured only by cash flows from the respective projects. In such cases, the Group hedges
liquidity risk by ensuring that financing is long term and structured on the basis of the forecast cash flows for
each project. Accordingly, 74.51% of financing assigned to projects recognized at 31 December 2015 (2014:
93.98%) falls due after more than 1 year. There is any financing recognized at 31 December 2015 (2014:
17.23%) falls due after more than 4 years.
As regards the Group’s liquidity position, management monitors the Group’s forecast liquidity based on
expected cash flows.
The following table contains a breakdown of the Group’s financial liabilities that will be settled in the net
amount, grouped together by maturity date based on the period from the balance sheet date to the maturity
date stipulated in each contract. The amounts shown in the table relate to undiscounted cash flows stipulated
in the contract. Balances payable in less than 12 months reflect the relevant carrying amounts as the effect of
discounting is not significant.
40
(Thousand euro)
Less than 1 year
Between 1 and
2 years
Between 2 and
5 years
More than 5
years
At 31 December 2015
Derivative financial instruments*
Trade and other payables**
Accrued unmatured interest
233,963
12,376
1,695,506
90,871
109,040
7,584
10,416
80,238
387,610
192,760
852,025
26,413
Total
2,032,716
207,278
580,370
878,438
At 31 December 2014
Trade and other payables**
276,090
15,466
1,873,182
101,482
90,958
7,888
14,654
88,268
309,618
7,098
205,506
870,848
10
31,351
Total
2,266,220
201,768
522,222
902,209
*Excluding derivative financial instruments linked to project finance.
**Does not include deferred income, interim invoicing or advances received on contracts. It also does not include any other accounts payable
that do not involve liquidity risks.
Liquidity risk is managed on an overall, centralized basis by the Group Treasury Department. This includes
both managing cash from the Group’s recurring transactions (analysis and follow-up of debt maturities,
collections, renewal and contracting loans, management of available credit lines, and temporary investment of
cash surpluses) and managing the funds necessary to undertake planned investments.
Although the Group recognizes negative working capital totalling 353 million euro at 31 December 2015
(excluding the effect of non-current assets and related liabilities held for sale), the Directors of the Parent
Company consider that the liquidity risk is adequately managed based on the cash flow forecasts that the
Group prepares.
Such forecasts main objective in the short-term; a) strength the liquidity position of the working capital, thereby
helping to ease recurrent cash tensions that currently exist in the Group's business sector and b) adapt the
Group's financial structure to the current market conditions, as well as to the cash generation capacity of each
of the Group's business units. Among other measures currently under analysis, which include the feasibility of
redefining the current business structure in order to guarantee that each business unit indebtness that is in
line with its capacity to generate operating cash, as well as the establishment of an asset disinvestment
process, provided that it may be executed in a manner that contributes to the Group's best business interests
As of the preparation date of these annual accounts, a Strategic Plan is being prepared, designed and
communicated to the main parties involved in the process.
In order to provide more transparency and to strength the reliability of the cash flow estimates (which are the
basis on which the aforementioned projections are prepared), the Group has facilitated the continuous
detailed review of its projected information to an external advisor in this area, and which commenced during
the second half of 2015. It is worthmentioning that during the year the aforementioned review, has
experienced a general achievement of the objectives established in the different forecast prepared by the
Management.
Set out below are the most relevant assumptions defined by Group Management to preparing the
aforementioned forecasts, which fulfilment involves factors that may not be under the control of the Group and
therefore generate a certain level of uncertainty regarding materialization:
•
As previously mentioned, forecasts take into consideration the working capital of a substantial part of
the bank borrowings that fall due in the short-term, particularly the credit facilities. The perception of
financial agents regarding the outlook for the Group's business sector has deteriorated during the
second half of 2015 due to external factors. This environment also gives rise to limited access to
capital markets, which is shown in the decline in the market prices for the debt instrument issued by the
Group. In order to attain its objectives, the Group expects to continue to have the confidence of
financial institutions in order to renew, or replace, a significant part of the existing credit lines, which
41
(Thousand euro)
primarily consist of ordinary credit facilities, confirming facilities, factoring facilities, and bank
guarantees.
•
The Group's business structure may be redefined, as was mentioned previously, together with the debt
level to attribute to each business unit. This restructuring requires the prior acceptance by at least a
relevant part of financial creditors in line with the previously comments. The Group therefore considers
that the confidence shown by financial creditors with respect to the solvency of its project is a key
aspect of the success of these proposals within the framework of the ordinary negotiations currently in
progress with those financial creditors.
•
Finally, Group Management is considering the possibility of making significant disinvestments in 2016
in order to reduce its corporate financial debt, to the extent that such transactions may be executed in a
manner that contributes to the Group's best business interests. The businesses that may be sold
include the concessions, particularly those that Management expects may be assumed soon by the
Group as a result of the completion of the break up with the joint business which parent company is
Isolux Infrastructure Netherlands, B.V. (Notes 9 and 15). Although a significant part of those
businesses are located in Brazil, which is currently undergoing serious political and economic
difficulties that could negatively affect both the disinvestment period and the volume of liquidity to be
obtained as a result of such a disinvestment and, possibly, the decision to execute the disinvestment,
Group Management considers that those circumstances have been properly evaluated when preparing
the forecasts and, therefore, will not significantly affect the plans currently being executed.
Taking into account these cash flow projections for 2016, which form part of the Strategic Plan currently being
developed, the Directors consider that the Group will be in an adequate situation to allow it to fulfil its shortterm obligations. Accordingly, these consolidated annual accounts have been prepared on a going concern
basis
3.2.
Capital risk management
The Group’s capital management objectives consist of protecting its capacity to do business as a going
concern in order to obtain a return for shareholders and profits for other holders of equity instruments, as well
as to maintain an optimal capital structure and reduce cost of capital.
In order to maintain or adjust the capital structure, the Group could adjust the amount of dividends payable to
shareholders, reimburse capital to shareholders, issue new shares or sell shares to reduce debt.
The Group monitors capital based on the leverage ratio, in line with industry practices. This ratio is calculated
as net debt divided by total capital (excluding the position assigned to projects). Net debt is calculated as total
bank borrowings and Senior Notes (including current position in trade and other payables, as reflected in the
consolidated accounts) less cash and cash equivalents and financial assets at fair value through profit or loss.
Capital is calculated as equity, as reflected in the consolidated accounts, plus net debt.
Leverage ratios at 31 December 2015 and 2014 are shown below:
Bank Borrowings and Senior Notes (see Note 21) and Trade and other payables –
Current (see Note 20)
Less: financial assets at fair value through profit or loss (see Note 14.2)
Less: cash and cash equivalents (see Note 14.1)
Net debt
Equity (including non-controlling interest, excluding hedge reserves and cumulative
translation differences)
Total capital
Leverage ratio (Net debt / Total capital)
2015
2014
4,063,403
(13,491)
(169,185)
3,880,727
3,903,001
(14,675)
(291,272)
3,597,054
600,439
4,481,166
86.6%
615,458
4,212,512
85.4%
42
(Thousand euro)
3.3.
Fair value estimation
Financial instruments included at Level 1:
The fair value of financial instruments traded in active markets (such as publicly traded derivatives and heldfor-trading and available-for-sale investments) is based on quoted market prices at the balance sheet date.
The market price used for financial assets is the current bid price.
Financial instruments included at Level 2:
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. The Group uses a variety of methods and makes assumptions that are based on market
conditions existing at each balance sheet date. Market prices or brokers’ prices are used for long-term
payables. Other techniques, such as the estimated discounted cash flow method, are used to determine fair
value for the remaining financial instruments. The fair value of interest-rate swaps is calculated as the present
value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined
using forward exchange market rates at the balance sheet date. The methods are classified in accordance
with IFRS 13 (see Note 2.10). If one or more of the significant inputs are not based on observable market
data, the financial instrument is included in Level 3.
The following table presents an analysis of the financial instruments that are measured at fair value, classified
by measurement method. The various levels have been defined as follows:
▪ Listed prices (not adjusted) on active markets for identical assets and liabilities (Level 1).
▪ Directly (prices) or indirectly (deriving from prices) (Level 2) observable information relating to the asset or
liability, other than the listed prices included in Level 1.
▪ Information regarding the asset or liability that is not based on observable market data (non-observable
data) (Level 3).
The following table presents the Group's assets and liabilities that are measured at fair value at 31 December
2015:
Level 1
Level 2
Level 3
Total
Derivative financial instruments - assets
-
26
-
26
Derivative financial instruments - liabilities
-
(24,603)
(44,195)
(68,798)
Total
-
(24,577)
(44,195)
(68,772)
During the year there were no reclassifications among indicated Tiers.
The following table presents the Group's assets and liabilities that are measured at fair value at 31 December
2014:
Level 1
Level 2
Level 3
Total
Derivative financial instruments - assets
-
2,908
-
2,908
Derivative financial instruments - liabilities
-
(37,384)
(34,194)
(71,578)
Total
-
(34,476)
(34,194)
(68,670)
The valuation techniques used to define fair values are as follows:
a) Swaps: The exchange by two market participants of a series of cash flows, according to the terms of each
contract, during a period of time. The value of this type of instrument is calculated by discounting the cash
flows in the currency as for the contract. Likewise, day computation models are implemented in accordance to
the base.
43
(Thousand euro)
b) Interest Rate Swaps (IRS): Variable interest rates are calculated based upon the curve of the
corresponding currency and deriving the implicit rates on each of the reference dates as for the contract.
c) Futures on the exchange rate between currencies or variable income assets: fair value is calculated based
on the differential between the price contracted at the beginning of the operation and expected value of the
asset on maturity, being an accepted practice in the market.
d) The fair value of the option on the Corpfin Capital contract and other entities (Note 11) included in Level 3 is
calculated using models based on estimated future cash flows discounts using observable market value.
Changes in fair value generated during the year are recognised in the income statement.
e) Options on a basket of underlined securities: The prices of the options are obtained from estimates of
scenarios based on the probability of their occurrence. In this context, the most common methodology is the
Montecarlo method, which is based on the premise that the value of an option is the average of the values
obtained under different random scenarios adjusted to reflect the statistical distribution of the underlying
securities. The number of scenarios must be high and never less than 50,000 simulations. To perform the
valuation of these assets, the Montecarlo simulation method is employed for the valuation of the underlying
securities and the Payoff in each scenario is applied to deduce the corresponding price.
f) It is assumed that the carrying value less the provision for impairment of accounts receivable and payable
approximates their fair value.
g) The fair value of financial liabilities for financial reporting purposes is estimated by discounting future
contractual cash flows at the current market interest rate that is available to the Group for similar financial
instruments.
4.
Critical accounting estimates and judgements
The preparation of consolidated annual accounts under IFRS-EU requires that management makes
estimations and assumptions that could affect the accounting policies adopted and the amounts of assets,
liabilities, revenue, expenses and related breakdowns. The estimates and assumptions made are continuously
evaluated and are based on past experience or other facts that are deemed to be reasonable under the
circumstances, at the balance sheet date, the result of which is the basis from which to judge the carrying
amount of the assets and liabilities that cannot be immediately determined in any other manner. Actual results
could differ from estimated ones.
Certain accounting estimates are considered to be significant if the amount of the estimates and assumptions
is material and if the impact of the estimates and assumptions on the financial position or operating results is
material. Group management’s main estimates are explained below.
4.1.
Critical accounting estimates and judgments
The Group makes estimates and judgments concerning the future. The resulting accounting estimates will, by
definition, rarely matches the related actual results. The estimates and judgments that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year
are discussed below.
Business combinations or net-asset group acquisitions
IFRS-EU requires, at the acquisition date of a subsidiary, an analysis of whether the acquired element can be
considered as a business or as a net-asset group not complying with the business definition, as stated in IFRS
3 “Business combinations” (Note 2.2).
When the Group acquires shares in an entity not considered as a business but as a net-asset group, the cost
is allocated to identifiable individual assets and liabilities, based on their fair value at the acquisition date. Netasset group cost may include any element related to share-based payments. In these cases, the difference
between the fair value of the acquired assets and the amount payable in cash is directly registered in equity.
44
(Thousand euro)
When the Group acquires shares in an entity considered as a business, the business combination cost is
allocated to identifiable assets, liabilities and contingent liabilities in the acquired company, at the acquisition
date. These assets and liabilities are initially valued at fair value. If a part of the combination cost depends on
future events, the amount of such adjustment is included in the combination cost, to the extent it is probable
and can be reliably measured.
The excess of business combination cost over the acquirer’s shareholding in the acquired net assets at fair
value is registered as goodwill.
During 2015 and 2014, the Group completed acquisitions and changes of control over groups of net assets
and businesses (Note 31). Based on management judgement, the acquisition cost of these businesses has
been booked in line with the terms included in the sale-purchase agreements.
Estimated impairment of goodwill and other non financial assets
The Group, on an annually basis, tests for impairment goodwill, and if any impairment indicators are identified
tests other non-financial assets, in accordance with the accounting policy in Note 2.9. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of estimates and sensitivity analyses are performed on the most relevant variables
included in the estimates, paying particular attention to situations in which potential impairment indicators may
be identified (see Note 7.1 and 8.2).
Income tax
The Group is subject to income taxes in numerous jurisdictions. A significant level of judgment is required to
determine the worldwide provision for income tax. There are many transactions and calculations with respect
to which the ultimate calculation of the tax is uncertain in the ordinary course of business. The Group
recognizes liabilities for anticipated tax matters based on estimates as to whether additional taxes will be
necessary. When the final tax result differs from the amounts which were initially recognized, such differences
will have an effect on income tax and the provisions for deferred taxes in the year in which they are deemed to
arise. In such sense, there are no significant aspects subject to estimates that could have a material impact on
the Group’s position.
Recovery of deferred tax assets
The recoverability of deferred tax assets (Note 21) is assessed at the moment these arise, and subsequently
each balance sheet date, based upon forecast results included in the Group’s business plan. In particular, the
Group considers the synergies arising from tax consolidation, as well as future tax benefits based upon the
above-mentioned business plan.
Fair value of derivatives or other financial instruments
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. The Group exercises judgment to select a variety of methods and to make assumptions based
mainly on market conditions at the balance sheet date. The Group has used discount cash flow analyses for a
number of available-for-sale financial assets not traded in active markets.
Revenue recognition
The Group recognizes revenue from construction and engineering activities on a percentage-of-completion
basis. Percentage of completion is calculated as costs incurred under the contract as a percentage of
estimated total contract costs. This revenue recognition method is only used when the result of the contract
may be reliably estimated and the contract is likely to generate profits. If the result of the contract cannot be
reliably estimated, revenue is recognized as costs are recovered. When a contract’s costs are likely to exceed
the contract’s revenue, the loss is immediately expensed. When applying the percentage-of-completion
method, the Group makes significant estimates in relation to total costs necessary to perform the contract.
These estimates are reviewed and evaluated periodically to verify whether a loss has been generated and
whether the percentage-of-completion method may continue to be applied, or to re-estimate the forecast
45
(Thousand euro)
project profit. During the project, the Group also estimates likely contingencies relating to the increase in the
total estimated cost and adjusts revenue recognized accordingly. The Group’s historical data indicates that its
estimates are adequate and reasonable in relation to the above-mentioned aspects.
Concession contracts
Based upon available information and all relevant terms included in the concession contracts, the Group
performs a detailed analysis to determine if such arrangements are within the scope of IFRIC 12. The main
aspects to be considered in this analysis are as follows:
a) If the granting authority controls or regulates the use of the infrastructure by the concessionaire, to whom it
must render the associated services and at what price.
b) If the granting authority has any residual share of the infrastructure at the end of the concession period.
Based on these terms and on the available information for each contract, the Group determines the
accounting model to be applied:
Intangible asset model: the Group applies this model when the concessionaire has the right to receive toll
collections (or any other type of payment) from users, as a consideration for infrastructure funding and
construction, or when the granting authority remunerates the concessionaire based on the degree of
infrastructure utilization. In both cases, the amounts to be paid to the concessionaire are not guaranteed.
Financial asset model: the Group applies this model when the concessionaire has an unconditional
contractual right to receive payments from the granting authority, regardless of the degree of infrastructure
utilization.
Mixed model: when the concessionaire is partially paid both by users (depending on the infrastructure use)
and by the granting authority (based on an unconditional contractual right to receive payments).
Once the accounting model has been defined, there are key estimations / assumptions used by Management,
such as:
•
•
•
•
Traffic forecasts to calculate intangible assets depreciation (road concessions).
Maintenance accrual: estimates of future CAPEX value, based on each business plan used by
Management.
The construction margin expected by Management, used to measure intangible / financial assets at
fair value.
When determining the financial asset value in accordance with electric transmission line contracts
and their legal interpretations, the concessionaire Management estimates granting the authority to
compensate them for the infrastructure residual value at the end of the concession period.
Useful lives of property, plant and equipment and intangible assets
Group management determines estimated useful lives and related depreciation charges for its property, plant
and equipment and its intangible assets. This estimate is based on the period during which the non-current
assets will generate economic benefits based on updated business plans. At each closing date, the Group
reviews the useful lives of non-current assets. If the estimates differ from previous estimates, the effect of the
change is recognized prospectively as from the year in which the change takes place.
For those intangible assets related to motorway administrative concessions that are depreciated in a
systematic way based on the traffic and revenues expected in accordance with updated business plans,
Group’s management annually updates traffic estimates made for such concessions.
Likewise, in case circumstances imply worse conditions based on business plans, impairment tests will be
carried out.
46
(Thousand euro)
Warranty claims
The Group generally offers 24 or 36 month warranties on its projects and services (up to 60 months, in special
cases). Management estimates the related provision for future warranty claims based on historical warranty
claim information, as well as recent trends that might suggest that past cost information may differ from future
claims. As in the case of revenue recognition, the Group’s historical data indicates that its estimates are
adequate in this respect.
Receivables and financial assets
The Group makes estimates relating to the collectability of balances owned by customers in projects in which
disputes have arisen or litigation is in progress due to disagreement with the work executed or the failure to
fulfil contractual clauses linked to the return on the assets handed over to customers. The Group also makes
estimates to assess the recoverability of available-for-sale financial assets, based mainly on the financial
health and near-term business prospects of the investee company.
Provisions
Provisions are recognized when it is probable that a present obligation arising from past events will result in an
outflow of funds and the amount of the obligation may be reliably estimated. Significant estimates are required
in order to comply with IFRS-UE. Group management makes estimates of the likelihood of the contingencies
and the amount of the liability to be settled in the future, evaluating all relevant information and facts.
Joint agreements and control
When applying IFRS 10 and IFRS 11 on investments, the Group makes accounting estimates and judgments
when determining the existence of joint agreements or control and when differentiating between joint business
and joint operations.
5.
Segment information
As described in Note 1, of the consolidated financial statements and based on the information reviewed by the
Management Committee, the Group develops its activity mainly through 2 operating segments, as described
below:
•
•
EPC
Concessions
“Other Corporate and Consolidated Adjustments” includes corporate overheads and non-core business such
as the operation of a biodiesel plant and Real Estate business.
The “EPC” segment obtains its revenues mainly from the rendering of construction services, whereas the
“Concessions” segment, mainly related to concessions of highways, concessions of transmission lines, solar
photovoltaic energy plants (all of them included in subgroup Isolux Infraestructures) and concession of car
parks (included in subgroup Isolux Corsán Aparcamientos), ears its revenues by renderind the related service
according to the relevant concession agreement.
Revenues generated between segments mainly arise from construction services rendered by “EPC” to the rest
of the Group’s segments. These transactions are carried out under market conditions and are analysed by the
Management Committee. Note 28 include relevant information on about the volume of these transactions.
The effects of business combination (including transactions that imply changes of control) are considered by
the Group as part of corporate segment.
In addition, the Management Committee performs detailed analysis concerning the main geographical areas in
which the Group operats; these are principally Spain, Latin America (mainly Mexico, Brazil and Argentina),
Asia (mainly India), and others (mainly activities carried out in the USA and African countries, such as Angola
or Algeria).
47
(Thousand euro)
Since 2014 the Group applies the IFRS 11 of the Group consolidated financial statements, the most
noteworthy of which is IFRS 11 due to its significant impact over consolidated information. This impact has
basically come from the application of the consolidation by the equity method instead of the proportionate
consolidation method until 2013, in relation to the subgroups headed by Isolux Infraestructure Netherlands,
B.V. and Isolux corsán Aparcamientos, S.A. (see Note 9), which represents a significant part of the
concession business. In order to measure its business performance, the Group Management uses financial
information which still considers the application of the proportionate consolidation method; on the basis it gives
more detailed and precise information for a better understanding of the concession segment development.
The tables below include the column “Consolidation method adjustments” with the purpose of reconcile
segment information with the data included in the balance sheet and the consolidated income statement.
The performance of operating segments is assessed by the Management Committee based on the evaluation
of each segment’s operating result. Financial income and expenses are analysed at the level of each
individual segment to assess their net impact on the line item “Net financial result”. A detailed analysis is
carried out by the Treasury Department, which manages the Group cash position. Income tax is analysed at a
Group level by the Management Committee, and for this reason, income taxes are not allocated to each
individual segment.
The information by segments related to the income statement submitted to the Management Committee for
the segments to be reported for the fiscal year ended 31 December 2015 is as follows:
2015
EPC
Other, Corporate
and Consolidation
Adjustments
Concessions
Consolidation
method
adjustments
(IFRS 11)
Sub-total
Total
Revenue from external
customers
2,160,888
870,332
24,392
3,055,612
(866,409)
2,189,203
Segment´s ordinary revenue
2,160,888
870,332
24,392
3,055,612
(866,409)
2,189,203
Other operating income and
-
-
-
-
-
-
15,786
26,012
(1,320)
40,478
(26,013)
14,465
2,176,674
896,344
23,072
3,096,090
(892,422)
2,203,668
(1,954,781)
(418,925)
(69,221)
(2,442,927)
415,004
(2,027,923)
221,893
477,419
(46,149)
653,163
(477,418)
175,745
(29,264)
(96,632)
(16,505)
(142,401)
101,142
(41,259)
(8,245)
49
(16,404)
(24,600)
-
(24,600)
Operating result
184,384
380,836
(79,058)
486,162
(376,276)
109,886
Share of profit / (losses) of
investments accounted for the
equity method
(47,340)
(293,118)
(174,082)
(514,540)
278,048
(236,492)
Gross operating results
(EBITDA) (*)
Depreciation, amortization and
impairment losses
Variation in trade provisions
Income tax
Results for the year from
continuing operations
discontinued operations
-
-
-
-
42,992
42,992
137,044
87,718
(253,140)
(28,378)
(55,236)
(83,614)
-
-
(15,902)
(15,902)
54,363
38,461
137,044
87,718
(269,042)
(44,280)
(873)
(45,153)
-
-
(10,438)
(10,438)
-
(10,438)
137,044
87,718
(279,480)
(54,718)
(873)
(55,591)
-
-
(51,897)
(51,897)
-
(51,897)
- Non-controlling interest
-
-
(2,821)
(2,821)
(873)
(3,694)
Attibutable to:
(*) EBITDA is the profit for the year from continuing operations before income taxes, participation in the earnings of
companies carried by the equity method, net financial result, variation in trade provisions, amortization and impairment
losses.
48
(Thousand euro)
The information by segments related to the income statement submitted to the Management Committee for
the segments to be reported for the fiscal year ended 31 December 2014 is as follows:
2014
EPC
Other, Corporate
and Consolidation
Adjustments
Concessions
Consolidation
method
adjustments
(IFRS 11)
Subtotal
Total
Revenue from external
customers
2,096,689
656,597
26,985
2,780,271
(652,168)
2,128,103
Segment´s ordinary revenue
2,096,689
656,597
26,985
2,780,271
(652,168)
2,128,103
Other operating income and
315
-
-
315
-
315
Gross operating results
(EBITDA) (*)
Depreciation, amortization and
impairment losses
16,025
-
425
16,450
(10,681)
5,769
2,113,029
656,597
27,410
2,797,036
(662,849)
2,134,187
(1,834,054)
(285,013)
(57,735)
(2,176,802)
294,213
(1,882,589)
278,975
371,584
(30,325)
620,234
(368,636)
251,598
(18,504)
(86,703)
(27,317)
(132,524)
91,308
(41,216)
Variation in trade provisions
(20,563)
99
(24,123)
(44,587)
-
(44,587)
Operating result
239,908
284,980
(81,765)
443,123
(277,328)
165,795
Share of profit / (losses) of
investments accounted for the
equity method
(13,430)
(263,893)
(170,957)
(448,280)
242,708
(205,572)
Income tax
continuing operations
discontinued operations
-
-
-
-
26,357
26,357
226,478
21,087
(252,722)
(5,157)
(8,263)
(13,420)
-
-
(31,122)
(31,122)
11,837
(19,285)
226,478
21,087
(283,844)
(36,279)
3,574
(32,705)
-
-
(9,280)
(9,280)
-
(9,280)
226,478
21,087
(293,124)
(45,559)
3,574
(41,985)
-
-
-
(38,586)
-
(38,586)
- Non-controlling interest
-
-
-
(6,973)
3,574
(3,399)
Attibutable to:
(*) EBITDA is the profit for the year from continuing operations before income taxes, participation in the earnings of
companies carried by the equity method, net financial result, variation in trade provisions, amortization and impairment
losses.
Ordinary revenues from external customers are measured consistently with those applied in the income
statement.
In fiscal years 2015 and 2014, no consolidation adjustments are included in the "Other, Corporate and
Consolidation Adjustments". Therefore, the financial information included in this column refers only to
transactions included in the "Others" and "Corporate" segments.
The information by segments related to the balance sheet submitted to the Management Committee for the
segments to be reported for the fiscal year ended 31 December 2015 is as follows:
49
(Thousand euro)
EPC
Concessions
2015
ASSETS
Goodwill
Intangible assets
Investment property
Concessionary assets assigned to
projects
Other non-current assets assigned
to projects
Investments in associates
accounted for the equity method
Non-current assets
Inventories
Financial assets at fair value
through profit or loss
Current assets
TOTAL ASSETS
LIABILITIES
Bank borrowings and Senior Notes
Project finance
Provisions for other liabilities and
charges
Other payables
Project finance
charges
Current liabilities
TOTAL LIABILITIES
Non-controlling interests
Other, Corporate
and
Consolidation
adjustments
Subtotal
Consolidation
method
adjustments
(IFRS 11)
Total
44,549
481,178
15,483
-
179
32,889
2,324
30,908
8,911
-
75,636
514,067
24,394
2,324
(32,889)
(2,324)
75,636
481,178
24,394
-
-
3,717,788
5,532
3,723,320
(3,681,711)
41,609
-
1,345,285
118,211
1,463,496
(1,345,251)
118,245
1,119
14,409
111,099
667,837
116,328
3,130,726
26
43,061
78,606
5,220,132
26,340
183,809
6,878
9,411
2,061
225,619
400,653
104,942
(929,234)
-
10,530
59,531
415,324
6,288,622
247,610
2,385,301
6,904
126,992
(33,031)
(77,751)
(5,045,965)
(4,649)
(302,640)
(6,878)
126,992
10,530
26,500
337,573
1,242,657
242,961
2,082,661
26
11,543
151,243
3,409,866
4,077,703
48,539
283,296
548,862
5,768,994
1,949
10,929
380,608
(430,806)
(30,153)
62,031
445,468
380,608
3,527,922
9,816,544
(48,540)
(276,283)
946,738
307,748
(4,738,217)
13,491
169,185
1,327,346
3,835,670
5,078,327
15,385
30,549
(990)
3,156,646
118,460
220,734
1,334,280
124,541
11,445
39,105
1,348,675
3,281,187
129,905
290,388
(3,095,605)
(117,678)
(218,584)
1,348,675
185,582
12,227
71,804
72,018
6,902
124,854
108,640
2,872,297
22,334
12,376
110,048
598,458
4,203,356
990
183,247
509,533
(5,310)
24,099
(49,171)
3,059
1,463,259
124,333
34,202
(445,384)
3,831
-
132,895
608,419
5,791,469
233,963
217,449
2,936,446
20,855
36,475
(93,082)
(589,227)
(4,114,176)
(153,967)
(455,681)
5,800
(24,099)
39,813
19,192
1,677,293
233,963
63,482
2,480,765
26,655
12,376
43,352
3,058,999
3,183,853
6,537
124,473
837,032
5,040,388
139,241
545
166,881
(115,592)
1,347,667
(36,321)
168,370
166,881
3,780,439
9,571,908
109,457
(124,473)
253,819
(498,601)
(4,612,777)
(125,445)
43,897
420,700
3,281,838
4,959,131
(15,988)
(*) At the end of Decembre 2015, the balances related to the joint venture Isolux Infrastructure have been
classified as non-current assets and related liabilities held for sale (see Notes 9 and 15). The Management is
analyzing the information of the joint venture before the reclassification was made and it is included in
"Consolidation method adjustments". This adjustment are necessary in order to allow the reconciliation of
segment information with the data included in the balance sheet .
50
(Thousand euro)
The information by segments related to the balance sheet submitted to the Management Committee for the
segments to be reported for the fiscal year ended 31 December 2014 is as follows:
EPC
Other, Corporate
and
Consolidation
adjustments
Concessions
2014
ASSETS
Goodwill
Intangible assets
Investment property
Concessionary assets assigned to
projects
Other non-current assets assigned
to projects
Investments in associates
accounted for the equity method
Non-current assets
Inventories
Financial assets at fair value
through profit or loss
Current assets
TOTAL ASSETS
LIABILITIES
Project finance
charges
Other payables
Project finance
charges
Current liabilities
TOTAL LIABILITIES
Consolidation
method
adjustments
(IFRS 11)
Subtotal
Total
81,394
479,628
13,988
-
245
32,883
106
3,548,499
31,404
9,364
-
113,043
512,511
23,458
3,548,499
(32,883)
(3,522,877)
113,043
479,628
23,458
25,622
-
1,337,191
126,470
1,463,661
(1,337,191)
126,470
-
-
-
-
973,807
973,807
1,107
37,694
86,128
20
699,959
134,505
2,651,258
1,648
15,955
112,934
5,047,813
25,416
311,739
-
9,328
15,768
201,872
757
394,963
100,709
(774,288)
483
10,435
69,417
400,934
777
6,142,735
260,630
2,188,709
2,131
42,488
(112,411)
(3,989,067)
(7,488)
(341,493)
-
10,435
111,905
288,523
777
2,153,668
253,142
1,847,216
2,131
11,443
236,341
3,035,195
3,735,154
24,819
314,114
676,088
5,723,901
3,232
41,348
379,602
(248,914)
146,049
39,494
591,803
379,602
3,462,369
9,605,104
(24,819)
(300,531)
(674,331)
(4,663,398)
14,675
291,272
379,602
2,788,038
4,941,706
63,710
3,635
20,875
6,963
2,941,273
135,246
202,957
1,200,751
143,234
16,892
15,759
1,271,424
3,084,507
155,773
239,591
(2,876,835)
(133,855)
(196,420)
1,271,424
207,672
21,918
43,171
65,838
2,933
156,991
94,108
2,505,403
17,525
12,069
30,386
526,810
3,843,635
990
366,585
556,201
(85)
16,178
(36,987)
48,904
1,388,553
180,992
12,656
(294,192)
3,138
3,397
59,237
578,647
5,389,179
276,090
379,241
2,767,412
20,578
31,644
(16,031)
(516,293)
(3,739,434)
(365,944)
(411,925)
85
(16,178)
43,206
62,354
1,649,745
276,090
13,297
2,355,487
20,663
15,466
73,208
2,702,313
2,859,304
5,853
3,018
942,887
4,786,522
145,689
351
172,553
78,895
1,467,448
(31,465)
76,577
172,553
3,724,095
9,113,274
120,077
(3,018)
(796,980)
(4,536,414)
(126,984)
73,559
172,553
2,927,115
4,576,860
(6,907)
The consolidation adjustments included in the column "Others, Corporate and Consolidation Adjustments" at
31 December 2015 and 2014 totalled 1,616 million euro and 1,612 million euro, respectively, and mostly
affected the headings titled "Trade and other accounts receivable" and "Trade and other accounts payable",
both current and non-current.
The additions to non-current assets in 2015 in the amount of 10,182 thousand euro refers to the EPC segment
(2014: 14,251 thousand euro) to the Concessions segment in the amount of 27,599 thousand euro (2014:
16,224 thousand euro) and to the Others segment in the amount of 4,928 thousand euro (2014: 3,377
thousand euro).
Total assets and liabilities amounts presented to Management Committee are measured consistently with
those applied in the consolidated annual accounts. These assets and liabilities are assigned based on
segment activities and physical asset location.
51
(Thousand euro)
The parent company is registered in Spain, but as mentioned above, the Group also operates abroad.
Information by geographical segment considering the geographical origin of each customer at 31 December
2015 and 2014 is presented below:
2015
Revenue/ sales
2014
Revenue/ sales
Spain
Latin America
444,216
Spain
1,630,853
Latin America
536,315
1,496,663
Asia
Other
586,324
Asia
394,219
Other
404,634
Consolidation
method
adjustments
(IFRS 11)
Subtotal
3,055,612
(866,409)
2,189,203
Consolidation
method
adjustments
(IFRS 11)
Subtotal
342,659
Total
2,780,271
Total
(652,168)
2,128,103
During 2015 the Group carried out transactions with a single customer representing more than 10% of the
Group revenue. These revenues correspond to the EPC segment and in Latin America. During 2014 no
transactions carried out with a single customer which represents more than 10% of the Group revenue.
Management believes that this situation is punctual with no concentration risk.
6. Property, plant and equipment
Set out below is a breakdown of property, plant and equipment showing its movement below:
2015
Land and
buildings
Plant
machinery and
tooling
Furnishings
Vehicles
Data
processing
equipment
PPE in
progress
Other PPE
Total
Cost
1 January
Additions
Disposals
Trasnsfers
Translation differences effects
31 December
75,435
212
(21,702)
492
54,437
128,971
7,265
(29,002)
42
(234)
107,042
9,791
450
(882)
(351)
9,008
12,074
771
(1,035)
(313)
11,497
13,649
662
(1,186)
428
13,553
744
217
(11)
(42)
(76)
832
3,785
561
(1,293)
11
3,064
244,449
10,138
(55,111)
(43)
199,433
Accumulated depreciation
and impairment losses
1 January
Depreciation
Disposals
Transfers
Impairment
31 December
(8,095)
(633)
13,332
(17,841)
18
(93)
(13,312)
(93,255)
(7,882)
19,392
(201)
319
(81,627)
(6,059)
(589)
578
173
(5,897)
(8,398)
(1,197)
780
207
(8,608)
(11,696)
(923)
966
(401)
(12,054)
-
(3,903)
(382)
486
1,459
41
(2,299)
(131,406)
(11,606)
35,534
(17,841)
1,276
246
(123,797)
41,125
25,415
3,111
2,889
1,499
832
765
75,636
Net book value
52
(Thousand euro)
2014
Land and
buildings
Plant
machinery and
tooling
Furnishings
Vehicles
Data
processing
equipment
PPE in
progress
Other PPE
Total
Cost
1 January
Additions
Disposals
Trasnsfers
31 December
72,926
3,063
(84)
(1,001)
531
75,435
134,420
8,123
(15,410)
325
1,513
128,971
9,415
381
(110)
105
9,791
13,169
1,291
(2,434)
48
12,074
10,917
572
(432)
1,917
675
13,649
541
36
(56)
206
17
744
4,588
624
(1,468)
41
3,785
245,976
14,090
(19,994)
1,447
2,930
244,449
and impairment losses
1 January
Depreciation
Disposals
Transfers
Impairment
31 December
(6,308)
(675)
25
590
(99)
(1,628)
(8,095)
(85,006)
(13,001)
5,884
(471)
(661)
(93,255)
(5,526)
(565)
83
(10)
(41)
(6,059)
(9,266)
(1,486)
2,390
(47)
11
(8,398)
(8,813)
(1,174)
383
(1,528)
(564)
(11,696)
-
(4,409)
(809)
1,359
9
(53)
(3,903)
(119,328)
(17,710)
10,124
(1,457)
(1,407)
(1,628)
(131,406)
Net book value
67,340
35,716
3,732
3,676
1,953
744
(118)
113,043
During 2015 the disposals are mainly due to the exit of Elaborados Metálicos Emesa, S.L. from the
consolidation´s scope.
In 2015 land and buildings relating to the plant in Coiros (Galicia) were impaired by the amount of 17,841
thousand euro, in accordance with the recoverable value.
Property, plant and equipment include at 31 December 2015 vehicles, machinery and other assets totalling
182 thousand euro (2014: 435 thousand euro) being acquired under finance leases, as analyzed below:
Capitalized finance lease cost
Net carrying amount
2015
2014
919
(737)
1,123
(688)
182
435
At the end of 2015 there are not bank borrowings secured by land and buildings (2014: 24,516 thousand
euro). The balance of secured debt amounts in 2014 is 3,655 thousand euro.
At 31 December 2015, the Group has property, plant and equipment located abroad for a total cost of 63,897
thousand euro (2014: 63,498 thousand euro) and accumulated depreciation of 40,285 thousand euro (2014:
36,131 thousand euro).
The income statement includes rental costs of 70,058 thousand euro (2014: 101,950 thousand euro), relating
to rented property, plant and equipment.
At 31 December 2015, fully-amortized assets with a carrying amount of 42,517 thousand euro are still in use
(2014: 46,358 thousand euro).
The consolidated Group has taken out a number of insurance policies to cover risks relating to property, plant
and equipment. The coverage provided by these policies is considered to be sufficient.
53
(Thousand euro)
7.
Goodwill and other intangible assets
7.1.
Goodwill
Set out below is an analysis of goodwill, the only intangible asset with an indefinite useful life, showing its
movement below:
2015
2014
Beginning of the year
Additions
Impairment losses
479,628
1,550
-
477,117
2,511
-
End of the year
481,178
479,628
During 2015 and 2014 no impairment losses have been identified.
Goodwill and intangible assets with indefinite useful lives have been assigned to the Group’s cash-generating
units (CGUs) based on the country concerned and the business segment.
Set out below is a summary by CGU (or CGU group) of goodwill assignment:
CGU
2015
2014
Construction
Engineering – México
Engineering – Brazil
Engineering – Argentina and other
Engineering – Spain and other
154,578
24,510
54,735
16,189
231,166
154,578
24,510
54,735
14,639
231,166
Total
481,178
479,628
The amount recoverable from CGUs is determined based on value-in-use calculations using cash flow
projections before taxes in accordance with the financial budgets approved by Management covering five
years in which the cash flows are estimated for the entire life of the projects. Cash flows relating to periods
after these five years are projected using the estimated residual growth rates indicated below. The growth rate
does not exceed the average growth rate over the long term for the business in which the CGU operates.
Cash flows are discounted using a rate based on the weighted average cost of capital for each of the CGU's.
The most relevant key assumptions employed to calculate value-in-use are set out below:
Operating
result (*)
Residual growth
rate
Discount rate
2015
2014
2015
2014
2015
2014
54,380
24,188
6,559
20,177
122,926
98,927
13,364
6,194
9,201
96,398
1%
2%
3%
2%
1%
1%
2%
2%
2%
1.7%
11.21%
9.96%
12.16%
17.12%
17.03%
11.50%
10.50%
14.50%
13.80%
17.40%
CGU
Construction
Engineering – México
Engineering – Brazil
Engineering – Argentina and other
Engineering – Spain and other
(*) Results included in operating result column refer to the forecast for the following year.
These assumptions have been used to analyze each CGU in the business segment. Group´s management
believes that changes in assumptions that may be considered as possible and may cause that the CGUs
value carrying amount to exceed its recoverable amount are not reasonably possible.
54
(Thousand euro)
Management calculated the budgeted gross margin based on past performance and market expectations.
Weighted average growth rates are in line with the forecasts contained in industry reports. Discount rates
applied are before taxes and reflect specific risks related to the relevant business segments.
Additionally, for each goodwill balance the Group performs sensitivity analyses, particularly in relation to
discount rates (increased by amounts ranging between 17% and 21%), operating results (decreased
according to expectations and covering potential risks), and residual growth rate (using lower anticipated
inflation rates) in order to determine whether possible changes in key assumptions generate impacts on the
recoverability of the carrying value of goodwill. The values that emerged as a result of these sensitivity
analyses are higher than the book value of the goodwill.
7.2.
Other intangible assets
A breakdown of 2015 and 2014 movement is as follows:
2015
Cost
1 January
Additions
Disposals
Transfers
31 December
Administrative
Concessions
Computer
software and
other
Total
16,805
(4,493)
6,498
18,810
43,803
4,972
(548)
(49)
48,178
60,608
4,972
(5,041)
6,498
(49)
66,988
Disposals
Transfers
31 December
(3,266)
(426)
(3,692)
(33,884)
(5,624)
539
67
(38,902)
(37,150)
(6,050)
539
67
(42,594)
Net book value
15,118
9,276
24,394
Accumulated amortizacion and impairment losses
1 January
Amortization
55
(Thousand euro)
2014
Cost
1 January
Additions
Disposals
Transfers
31 December
Administrative
Concessions
Computer
software and
other
Total
16,869
16
(80)
16,805
40,734
3,522
(473)
20
43,803
57,603
3,538
(473)
(80)
20
60,608
1 January
Amortization
Disposals
Transfers
31 December
(2,416)
(437)
(413)
(3,266)
(28,460)
(5,887)
369
119
(25)
(33,884)
(30,876)
(6,324)
369
(294)
(25)
(37,150)
Net book value
13,539
9,919
23,458
Accumulated amortizacion and impairment
losses
Administrative concessions captions include costs related to the construction and/or operation of various
assets (water treatment and waste management plants, and other concessions) for which the Group has
obtained the concession to operate the assets for a certain period. At the end of the concession period, the
asset will entirely revert to the granting authority. The Group will depreciate capitalized asset over the
concession term.
The item Computer software reflects the ownership and right of use of computer software acquired from third
parties. The balance of computer software does not include amounts related to software developed in-house.
At 31 December 2015, fully-amortized computer software with a carrying amount of 27,039 thousand euro is
still in use (2014: 20,733 thousand euro).
Bank borrowings are secured by other intangible assets valued at 6,734 thousand euro (2014: 11,317
thousand euro). The balance of secured debt amounts to 500 thousand euro (2014: 798 thousand euro).
8.
The consolidation scope includes investment in companies equity incorporated to engage single project. The
project companies are usually financed by means of project finance.
The basis of the agreement between the company and the bank is the assignment of cash flows generated by
the project to service the debt and interest (including an exclusion or quantified allowance for all other assets),
in such a way that investment payback for the bank will generally take place solely through the project cash
flows. Additional guarantees could be settled in some cases during construction phase. Any other borrowings
are subordinated to the Project finance until it is fully repaid. These are financing arrangements which are
applied to specific business projects.
56
(Thousand euro)
8.1.
Concessionary assets assigned to projects
In view of the projects’ characteristics a large part of the concessionary assets assigned to projects are related
to intangible and financial concessionaire assets (see accounting treatment in Notes 2.6, 2.7 and 2.23).
2015
2014
30,209
27,560
(1,665)
(13,310)
(1,066)
41,728
14,360
16,198
(243,690)
593
243,557
(1,306)
497
30,209
1 January
Amortization
Business combination effects (Note 31)
Transfers from non-current assets held for sale
Disposals
Transfers
31 December
(4,587)
(755)
5,223
(119)
(3,893)
(3,668)
38,835
(35,853)
(8)
(4,587)
Net book value
41,609
25,622
Cost
1 January
Additions
Transfer from non-current assets held for sale
Disposals
Transfers
31 December
The disposals of 2015 correspond to the exit from the consolidation scope of Sociedad Concesionaria Zona 8A, S.A.
At 31 December 2015, concessionary assets assigned to projects located abroad amount to 41,609 thousand
euro (2014: 15,538 thousand euro).
During 2015, 5,074 thousand euro have been capitalized (2014: 159 thousand euro).
According to Note 2.7 of the accounting policies the Group classifies its concessionary assets into two groups:
intangible nature and financial nature. At 31 December 2015 and 2014 all the concessionary assets are
intangible.
The projects included in this heading basically refer to the following under the concession type model:
•
Concession agreement involving the 220 kV transmission project between Moyabamba-Iquitos and
the associated substations signed with the Ministry of Energy and Mining in Peru through the
company Lineas de Transmision Peruanas S.A.C. The forecasted investment for the project is 735
million US dollars and the concession term is 30 years once the operation the line enters into
commercial operation.
•
Concession agreement involving the 230 kV transmission project through the company “Linhas de
Laranjal Transmissora de Energia LTDA.”, consisting of the 105 km line connecting these substations
in Jurupari and Laranjal do Jari C3. The contract was signed with the National Electricity Agency
("Agencia Nacional de Energia Electrica" - ANEEL). The forecasted investment for the project is 191
million Brazilian real and the concession term is 30 years.
Control of most concession assets reverts to the grantor at the end of the concession period although there is
usually an option to renew concessions at the time they expire.
57
(Thousand euro)
8.2.
Other assets allocated to projects
There are other non-current assets assigned to projects (non-concession assets not included within the scope
IFRIC12), whose detail is presented below:
2015
2014
Cost
1 January
Additions
Business Combination effects (Note 31)
Transfer from non-current assets held for sale (Note 15)
Disposals
Transfers
31 December
236,054
39
(2)
236,091
236,386
26
(27,267)
29,057
(1,871)
(277)
236,054
1 January
Amortization
Business Combination effects (Note 31)
Disposals
Transfer from non-current assets held for sale (Note 15)
Transfers
31 December
(109,584)
(5,007)
(4)
(3,251)
(117,846)
(101,338)
(8,626)
4,672
641
(5,105)
172
(109,584)
118,245
126,470
Net book value
At 31 December 2015 this heading included 117 million euro in net value (2014: 126 million euro) relating to
two biodiesel production plants (located in Ferrol and Castellón) that are managed through the subsidiary
Infinita Renovables,S.A. These plants started operations in 2009. On 24 January 2014 the Official State
Gazette published the final list of the assignments of biodiesel production amounts for the calculation of
mandatory biofuel targets and Infinita Renovables, S.A. was given 900,000 tonnes per year for the coming two
years, which is the maximum capacity of the Company's plants. On 2013 the Company signed an industrial
lease agreement that entered into force during the first semester of 2014 and under which the Company will
lease the operation of the two plants for five years, renewable for a further five, in exchange for a fixed annual
price, plus a variable price based on the tonnes sold by the third party, plus a share in the profits that party
obtains. The recoverable value of these assets is calculated based on a business plan that reflects
management's best estimates taking into consideration a series of assumptions. The most important is the
entry into force and term of the industrial lease agreement and the production volume traded, together with the
gross margin obtained by exploitations of plants.
Within the balance of the heading, during 2015 and 2014 there were no elements assigned to projects in the
abroad.
During the year 2015 and 2014, financial expenses have not been capitalized.
58
(Thousand euro)
8.3.
Project finance
The maturity date according the contracts are presented below:
2015
Non-current
Maturities
per year
Current
2017
2018
2019
2020
2021
Subsequent
years
Subtotal
Total
63,482
129,286
-
56,296
-
-
-
185,582
249,064
2014
Non-current
Maturities
per year
Current
2016
2017
2018
2019
2020
Subsequent
years
Subtotal
Total
13,297
45,875
123,159
572
34,560
588
2,918
207,672
220,969
At 31 December 2015 debts totalling 90,068 thousand euro (2014: 58,657 thousand euro) are denominated in
foreign currencies (mainly United States Dollars).
The Group has been granted a loan with a nominal amount of 202 million euro (senior loan), of which 155
million euro approximately are outstanding as of 31 December 2015 (2014: 155 million euro), to finance the
construction and operation obligations relating to the biodiesel production plants. This loan was granted by
Banco Santander and has corporate guarantees. On 27 December 2013 the loan agreement was novated,
establishing an interest rate of Euribor plus a spread ranging between 3.75% and 4.25% based on a series of
parameters and extending its maturity to 2017. On 29 December 2015 a waiver was obtained with respect to
the compliance of the ratios associated with the loan in 2015 as well as the postponement of the
reimbursement fee of December 2015.
Current maturities in 2015 include 30 million US dollars relating to the bridge loan for the "Molloco"
hydroelectric plant in Peru. In March 2016 the credit agreement has been renewed and the principal amount
due date has been extended to March 2018.
Project financing may require, as common guaranty, the pledge of shares of the developter company as
collateral provided by shareholders, collection rights grant or limitations to the availability of project assets,
although there may be certain additional surety mainly during the construction period and up until the projects
enter into operation.
Every funding is referenced to different market rates (principally Euribor) and these are revised over periods
not exceeding 6 months. As a result, fair value of both current and non-current funding amounts approximate
to their carrying amounts.
59
(Thousand euro)
9.
Set out below is an analysis of investments in associates accounted fot the equity method showing its
movement below:
Opening balance 1 January
Cash flow hedging reserves
Other changes with impacts on reserves
Additions and other movements
Transfers to non-current assets held for sale (Note 15)
Profit/(loss) of entities accounted for the equity method
Closing balance 31 December
31/12/2015
973,807
(143,521)
(6,706)
42,335
12,805
(794,720)
42,992
126,992
31/12/2014
827,820
119,768
10,694
(21,015)
8,525
1,658
26,357
973,807
The investments are mainly related to the joint businesses of Isolux Infrastructure Netherlands, B.V. (IIN) and
subsidiaries (during 2014 and parcially in 2015 when the investment is transferred to non-current assests
held to sale, see Note 15) and Isolux Corsán Aparcamientos, S.A. and subsidiaries (added in 2014, see Note
31). During 2015 the investment in IIN has been transferred to non-current assets held for sale, the
investment´s analisys is carried out below.
The Group’s interests in its joint ventures consolidated through the equity method, all of which are unlisted,
are analyzed below:
2015
Name
Isolux Infrastructure Netherlands, B.V.
and subsidiaries
Isolux Corsán Aparcamientos, S.A. and
subsidiaries
Country of
incorporation
Activity
Consolidation
method
Share
Holland
(1)
Equity Method
80.77%
Spain
(2)
Equity Method
100.00%
2014
Name
and subsidiaries
Isolux Corsán Aparcamientos, S.A. and
subsidiaries
Country of
incorporation
Activity
Consolidation
method
Share
Holland
(1)
Equity Method
80.77%
Spain
(2)
Equity Method
100.00%
(1)
IIN and subsidiaries operate primarily in the following lines of business (see note 15):
•
•
•
Highway infrastructure concessions.
High voltage transmission line concessions
Operation of photovoltaic solar power plants
(2)
Isolux Corsán Aparcamientos, S.A. and subsidiaries operate the car park concession business (see
Note 31).
Note 5 on financial reporting by segment include relevant financial information regarding these investments,
for each of the periods presented.
There are no contingencies relating to associates and joint ventures except for those mentioned in Note 30.
60
(Thousand euro)
9.1.
Isolux Infrastructure Netherlands, B.V. summary financial information
Notwithstanding the Group ownership interest of 80.77%, Isolux Infrastructure Netherlands B.V. and its
subsidiaries, this investment is considered a joint venture considering that key business decisions on the
relevant activities need to be taken jointly by the parties. This situation is the result of the experience of
reserved matter in the shareholding agreement that require approvals through special majorities, in both
Board of Directors and Shareholder’s meetings, including amongst other, some matters that give participating
rights to the partners such as budget and business plan approvals, acquisition and disposal of operational
assets, changes of dividend policy, appointment and retribution of key management and withdrawing of
financial facilities.
The main assets in which IIN participates in are:
Business
H
Initiation
2008
Integration
Method
FC
Situation
O
2010
PC
C/O
2009
PC
O
2009
PC
O
2009
2006
2008
2007
FC
FC
PC
FC
C/O
O
O
O
2014
FC
C
Brazil
25
45
45
19
35 years
since
COD
30
2002
FC
O
Brazil
30
2008
FC
O
Brazil
30
2008
FC
O
30
30
30
2007
2007
2011
PC
PC
FC
O
O
C
Name
NH1: Panipat – Jalandhar
Share
61%(1)
Country
India
H
NH2 Varanasi – Aurangabad
50%(2)
India
H
NH6 Gujarat-Maharastra Border
– Surat – Hazira Port
50%(2)
India
H
NH8 Kishangarh – Ajmer –
Beawar
50%(2)
India
H
H
H
H
Viabahia BR 116 - BR 324
Saltillo – Monterrey
Perote – Banderilla
Madrid – Ocaña A4
92.16%
100%
50%
51%
Brazil
Mexico
Mexico
Spain
H
Indiana I-69
51%
US
TL
CPTE – Cachoeira Paulista
100%
96.89%
Concessi
on period
/Duration
22 (*)
36 (*)
25 (*)
25 (*)
TL
LXTE – Xingu
TL
LMTE – Macapá
TL
TL
TL
50%
33%
100%
Brazil
Brazil
Brazil
100%
Brazil
30
2013
FC
C
TL
IENNE – Interligação
JTE – Jaurú
LTTE- Taubaté
LITE – Itacaiunas (ParáTocatins)
WETT
50%
USA
2008
PC
O
TL
Uttar Pradesh
100%
India
2011
FC
C
PS
Grupo T-Solar Global
88%
Several
Unlimited
35 years
since
COD
Unlimited
2008
FC
C/O
TL
97.16%
(*)This includes the estimated increase in the concession periods due to deferrals and other reasons set out in the contract
clauses.
(1) Includes 10% stake in NH1 from Isolux Corsán.
(2) Interest affected by operation with Morgan Stanley described afterwards.
FC: Full consolidation method
PC: Proportional consolidation method
H: Highway
TL: Transmission Lines
PS: Photovoltaic Solar
C: Under construction
O: In operation
61
(Thousand euro)
The information presented below refers to the figures at 100% and then converted to euros (without including
the items held for sale from the businesses of Transmission Lines and Photovoltaic Solar), and also includes
the reconciliation with the information considered for consolidation purposes by the Group. Therefore, it takes
into account the effects of including the Group's participation and the adjustments arising from the
consolidation process. The investment at 31 December 2015 it is clasiffified as non current assets held for
sale (note 15).
31/12/2015
31/12/2014
ASSETS
Non current assets
Concessionary assets and other non-current assets assigned to
projects
Investments in associates and joint ventures
Other non-current assets
4,148,374
3,932,833
261,138
299,505
81,979
192,920
4,491,491
4,425,258
Current assets
Concessionary assets and other non-current assets assigned to
projects
73,698
112,112
271,537
306,161
Other current assets
197,976
212,005
543,211
630,278
5,034,702
5,055,536
2,853,562
2,712,703
579,345
763,952
3,432,907
3,476,655
Project finance
145,627
340,359
Trade and other current liabilities
752,840
448,504
898,467
788,863
4,331,374
4,265,518
(142,625)
133,431
560,703
656,587
Effects of applying Group share and consolidation adjustments
234,017
201,454
Total net assets at 80.77%
794,720
858,041
Total assets
LIABILITIES
Project finance
Trade and other non current liabilities
Current liabilities
Total liabilities
Total net assets
As described in note 2.7, the Group classifies its concession assets as intangible or financial assets. At 31
December 2015, the net carrying value of these assets (considering the part of the investments in joint
business consolidated by equity method) totalled 2,068 million euro (31 December 2014: 1,903 million euro)
and 1,804 million euro (31 December 2014: 1,747 million euro), respectively. In line with accounting practices
and in compliance with IFRIC 12 in relation to such contracts, accounts receivable are recorded using the
financial asset model. Non-current accounts receivable are recognised at amortised cost.
62
(Thousand euro)
There were no significant changes in 2015 in relation to concession assets.
Other assets assigned to projects mainly include photovoltaic solar power plants (through T-Solar Global
Group), and power transmission lines in the United States (through the WETT concessionaire), with a net
book value (considering the share of the investments in joint businesses consolidated by the equity method) of
1,530 million euro (31 December 2014: 1,552 million euro). Based on the regulatory changes described in
Note 2.23, and considering the Ministerial Order defining the remuneration parameters passed in 2014, the
Group updated the impairment tests performed the year before on the CGUs related to solar plants located in
Spain. The results of the tests did not reveal the need to record any impairment, considering the recoverable
amount of the assets related to this business.
The Group estimated that the regulatory changes would reduce its capacity to attend to future bank debt
payments relating to photovoltaic facilities in Spain, therefore once the regulation was approved in 2014, the
Group began a refinancing process of the debt of its Spanish subsidiaries in order to suit the relevant
payments to the new remunerative scenario. The process was successfully concluded in 2015.
Accounts payable and other non-current and current liabilities include (either consolidated or carried by the
Company using the equity method):
•
Convertible debts into ordinary shares of IIN as a result of the agreement with Public Sector Pension
Investment Board (hereinafter PSP). On June 29, 2012, the Company and certain of its subsidiaries
entered into the Investment Agreement with PSP to enter into the company IIN, the latter received two
convertible loans from its shareholders. PSP has provided a convertible loan available to Isolux
Infrastrucutre in the amount of 313 million US dollar. Group Isolux Corsán Concesiones, S.A. has
provided a convertrible loan available to Isolux Infrastructure, Netherlands, B.V. in the amount of 63
million US dollar. Both loans beared interest at 12.5%, payable half-year. The loans would have been
converted in 2017 upon the release of 2016 year-end financial statement. During the year 2015, part of
the liquidation of the joint arrangement described below, the partners agreed that these convertible
loans would not accrue any interest starting on 1 January 2015. Furthermore, based on the original
contractual terms, the extinguishment of the joint arrangement implies the non convertability of the loan
and will be due at the time the extinguishment takes place. The carrying amount is recognized fully as
a liability on the accompanying balance sheet in an amount of 380 million euro (2014: 345 million
euro).
•
Preferred shares issued by the company that acts as a holding for several highway concessions in
India that were underwritten by Morgan Stanley Infrastructure Partner (hereinafter MSIP). On 18 March
2011, the Group signed an agreement with MSIP for an infrastructure investment fund to enable the
latter to act as a strategic partner in the development of the motorway concession business in India. At
31 December 2015, MSIP had made several investments in ICC Sandpiper, which in turn made
investments in the concession holders. These preferred shares are classified as a liability, considering
that the conversion ratio is variable and they can be converted into shares after an initial five-year
period (or sooner if certain events occur such as a breach of certain obligations included in the
Agreement between the parties and other events such as a public offering of the SPV's shares or a
change of control). These investments, classified as liabilities on the balance sheet and totalling 101
million euro (2014: 76 million euro), give MSIP 24% of the voting rights ICC Sandpiper and
approximately 83% of the economic rights, a position that will be adjusted in the future. Once the
investment is complete and the shares have been converted, each partner will hold 50% of the
economic and political rights.
63
(Thousand euro)
The investment in associates and joint venture section of the balance sheet includes these main proyects:
2015
Denomination
NH2
NH6
NH8
Perote-Banderilla
IENNE
JTE
WETT
Concessional assets and
other assets assigned to
projects
159,578
305,939
178,846
435,458
143,112
103,120
587,669
Project finance
88,119
232,383
134,997
412,365
40,590
46,662
352,346
Revenue /
Sales
44,675
72,615
17,796
18,512
18,145
16,704
81,220
Cash and cash
equivalents and assets at
fair value through
profit/loss
63,916
1,711
3,294
4,342
501
4,219
11,620
Revenue /
Sales
34,890
18,162
2,541
17,565
17,943
(2,300)
74,968
Cash and cash
equivalents and assets at
fair value through
profit/loss
42,509
3,888
315
4,981
368
2,604
1,290
2014
Denomination
NH2
NH6
NH8
Perote-Banderilla
IENNE
JTE
WETT
Concessional assets and
other assets assigned to
projects
137,830
210,367
145,663
416,178
165,110
79,008
492,995
Project finance
62,897
173,426
108,433
366,477
51,234
38,717
293,345
The results of these projects are shown under companies carried by the equity method on the income
statement detailed below.
31/12/2015
31/12/2014
1,091,065
881,695
Revenue / Sales
1,084,094
6,971
870,135
11,560
(711,803)
(580,929)
(503,695)
(22,678)
(87,675)
(97,755)
(415,612)
(26,513)
(89,889)
(48,915)
Operating results
Share of profits/ (losses) of investments accounted for
the equity method
379,262
300,766
(305,240)
(266,465)
30,566
8,553
104,588
42,854
Income tax
(67,129)
(25,894)
37,459
16,960
Attributable to:
– Owners of the parent company
– Non-controlling interest
Effects of applying Group share and consolidation
adjustments
Total net result at 80.77%
36,715
21,139
744
(4,179)
(873)
7,672
35,842
28,811
64
(Thousand euro)
In relation to this joint business, there are no specific restrictions on the payment of dividends, other than the
statutory ones.
As mentioned in Note 30.b), in the ordinary course of business, and as is common among engineering and
construction companies, when Group companies act as sponsors during the construction phase of certain
concession projects, the Group provides guarantees to certain companies that are part of the Isolux
Infrastructure joint business in the amount of 104 million euro (2014: 171 million euro).
On 31 March 2015 the partners in the joint arrangement IIN agreed to separate, the primary aspects of their
agreement are as follows:
•
The partners agreed to engage an independent expert to determine the interest held by each partner
after the conversion of the aforementioned loan, as well as the resolution of other matters set out in the
original agreement concluded in 2012 (all for the purposes of appraising the businesses within the
framework of the separation from the joint arrangement), and to establish a step plan to be followed for
implementing the separation of the joint arrangement (including the process of obtaining the relevant
authorizations from the grantors, financing entities, regulatory authorities and other relevant parties).
•
The appraisal of the businesses prepared by an independent third-party was considered for the
purposes of the asset separation process.
•
The agreement stipulates that the Group will retain those companies whose businesses are related to
the operation of photovoltaicpower-generation plants and the concessions type agreement of highvoltage transmission lines (except the 50% interest held in the company owning the concession
agreement concerning the WETT high-voltage transmission line, which has been attributed to PSP in
accordance with an agreement reached by the parties during that separation process), whereas PSP
will retain the interest in the companies relating to the motorway infrastructure concessions (and the
aforementioned interest in WETT). The difference between the appraisal of the businesses retained by
each of the partners and the total value based on the interest held by each one of them will be settled in
cash.
As a result of the work performed by the aforementioned independent expert, the conclusion reached in
September that, after the separation of the joint business, PSP would have to pay the Group a total of
approximately 303 million US dollars, adjusted by the transfers between the businesses that took place in
2015 that will be established after the end of the separation process. The Group has received an advance
payment from IIN totalling 105 US dollars and another advance payment from several entities totalling 132
million US dollars through factoring of the amount pending to be received.
Due to the fact that at 31 December 2015 not all of the authorizations required to complete the process had
been obtained, at that date the Group maintained its investment in IIN although it was classified as a noncurrent asset held for sale (together with the rest of the assets and liabilities associated with this transaction)
(Note 15), meeting the requirements established by IFRS 5.
Subsequent to the extinguishment, the Group will become the owner of the following concession assets:
65
(Thousand euro)
Business
TL
Name
Share
100%
96.89%
Concessi
on period
/Duration
30
Initiation
2002
Integration
Method
FC
Situation
O
Brazil
30
2008
FC
O
Brazil
30
2008
FC
O
Country
Brazil
TL
LXTE – Xingu
TL
LMTE – Macapá
TL
TL
TL
JTE – Jaurú
LTTE- Taubaté
50%
33%
100%
Brazil
Brazil
Brazil
30
30
30
2007
2007
2011
PC
PC
FC
O
O
C
100%
Brazil
30
2013
FC
C
TL
Uttar Pradesh
100%
India
2011
FC
C
PS
88%
Several
FC
C/O
TL
97.16%
35 years
since
COD
Unlimited
2008
FC: Full consolidation method
TL: Transmission Lines
C: Under construction
O: In operation
66
(Thousand euro)
9.2. Summarised financial information for Isolux Corsán Aparcamientos, S.A.
The information below refers to the figures at 100%, which is the Group's interest in the share capital of Isolux
Corsán Aparcamientos, S.A.
31 December
2015
31 December
2014
ASSETS
Non-current assets
Concessional assets and other assets assigned to projects
310,699
296,244
Other non-current assets
143,518
132,345
454,217
428,589
12,374
13,558
32,146
14,701
Current assets
44,520
28,259
498,737
456,848
84,909
50,292
232,707
203,666
317,616
253,958
Projects finance
40,647
70,818
Trade and other current liabilities
13,482
14,677
54,129
85,495
371,745
339,453
-
1,629
126,992
115,766
Total assets
LIABILITIES
Projects finance
Trade and other non-current liabilities
Current liabilities
Total liabilities
Total net assets
Accounts payable and other non-current liabilities include debt with a carrying value of approximately 63
million euro (2014: 48 million euro) related to the transaction described in Note 31. This loan bears an annual
interest rate of 8.75%, 4.25% of which must be capitalised as part of the debt while the remaining 4.50% may
be paid in cash or capitalized as part of the debt, at the borrower's discretion. This debt matures on June 30,
2020. However, it may be repaid in advance under certain conditions.
Project financing includes the liabilities corresponding to Hixam Gestión de Aparcamientos I, SL. and Hixam
Gestión de Aparcamientos II, S.L. approximately 67 and 29 million euro respectively which maturity date are
2022 and 2016 respectively. In December a waiver was obtained with respect to compliance with ratios
associated with the loan for the year 2015. The subgroup is in the middle of a debt restructuring process that it
expects to conclude during the first half of the year.
As mentioned in Note 30.b), the Group has provided guarantees totalling 70 million euro (2014: 70 million
euro) for certain project finance debts of certain companies that are part of the Isolux Corsán Aparcamientos
joint venture. In addition, at 31 December 2015 there are no other commitments on the part of the Group in
relation to this investment.
67
(Thousand euro)
31 December
2015
31 December
2014
40,517
7,835
Revenue / Sales
20,735
19,782
6,772
1,063
(21,087)
(8,082)
(66)
(3,178)
(8,205)
(9,638)
(54)
(1,259)
(2,527)
(4,242)
Operating results
19,430
(247)
(8,861)
(2,795)
10,569
(3,042)
Income tax
(3,406)
455
7,163
(2,587)
7,150
(2,454)
13
(133)
Attributable to:
– Owners of the parent company
– Non-controlling interest
Other operating income includes the effects of the business combinations resulting from the new year entry
into the scope of the sub-group, as well as the effect deriving from the settlement in favour of the sub group of
certain arbitration concluded during the year 2015.
10.
Financial Investments
Set out below is an analysis of financial investments assets showing its movement below:
Opening balance
Additions
Disposals
Closing balance
Less non-current portion
Current portion
2015
10,435
95
2014
10,446
-
-
(11)
10,530
(10,530)
-
10,435
(10,435)
-
For measurement purposes, financial investments are classified as available-for-sale financial assets (See
Note 2.10).
For non-controlling interest investments in unlisted companies in which the Group does not have significant
influence because these are residual investments in companies with no significant size within the Group, and
given the impossibility of applying measurement methods to the investments, they are presented at acquisition
cost, net of impairment disclosed in the financial information of the respective companies. This caption does
not include investments in debt instruments.
Financial investments are all denominated in euro. Maximum exposure to credit risk at the reporting date is
the carrying amount of the assets classified as financial investments.
68
(Thousand euro)
11.
Derivative financial instruments are analyzed below at 31 December 2015 and 2014:
2015
Assets
2014
Liabilities
Assets
Liabilities
Interest rate swaps-cash flow hedges
Interest rate swaps-held for trading
Currency forward contracts-cash flow
hedges
Currency forward contracts- held for
trading
26
(161)
-
(38)
Total
26
(24,603)
2,908
(37,384)
-
(10,733)
(1,494)
-
(15,916)
(2,151)
-
-
777
(3,851)
Less non-current portion:
Interest rate swaps –cash flow hedges
Interest rate swaps –held for trading
Currency forward contracts – cash flow
hedges
Currency forward contracts – held for
trading
Current portion
-
(10,733)
(1,494)
-
(19,314)
(2,151)
-
(12,215)
2,908
(15,881)
-
-
-
-
-
(12,227)
777
(21,918)
26
(12,376)
2,131
(15,466)
Derivatives held for trading are classified as current assets or liabilities. The total fair value of a hedging
derivative is classified as a non-current asset or liability if the period to maturity of the hedged item is more
than 12 months and as a current asset or liability if the period to maturity of the hedged item is less than 12
months.
The ineffective net portion of cash flow and fair value hedges recognized as revenue in the income statement
totals 695 thousand euro (2014: loss 2,205 thousand euro) (see Note 27).
The maximum credit risk exposure at the reporting date is the fair value of the derivative financial instruments
carried in the balance sheet.
Financial instrument balances under this caption are classified in Group 2 for the purpose of information
sources used to determine its fair value in compliance with IFRS 7 (See Note 2.10).
Foreign currency forward contracts
It is expected that high likely future transactions hedged, denominated in foreign currency, take place on
different dates, mainly within the next 12 months. Profit and loss recognized in the hedging reserve in equity
with respect to foreign currency forwards at 31 December 2015 are recognized in the period or periods during
which the hedged transaction affects the income statement. This normally takes place within 12 months of the
balance sheet date unless the gain or loss had been included in the initial purchase value of fixed assets, in
which case such recognition occurs during asset’s life (between five and ten years).
Main currency forward contracts characteristics at 31 December 2015 are shown below:
Project name or associate
Transaction
Forward Isolux Ingeniería
Sale
Sale
Forward Isolux México
Purchase
Purchase
(*) Effective at 31 December 2015
(**) QAR: Qatari Royal; MXN: Mexican Peso; KWD: Kuwaití Dinar.
Currency (**)
Final maturity
QAR
KWD
MXN
MXN
28/01/2016
28/01/2016
29/04/2016
29/01/2016
Notional
value (*)
(73,937)
(4,570)
429,875
202,952
69
(Thousand euro)
Main currency forward contracts characteristics at 31 December 2014 are shown below:
Project name or associate
Transaction
Currency (**)
Sale
MXN
Sale
QAR
Purchase
USD
Sale
KWD
Purchase
USD
Sale
USD
Forward Isolux Uzbekistán
Purchase
USD
Forward Isolux Uzbekistán
Sale
USD
Purchase
MXN
Forward Isolux Grupo Isolux Corsán
Purchase
USD
(*) Effective at 31 December 2014
(**) USD: US Dollar; QAR: Qatari Royal; MXN: Mexican Peso; KWD: Kuwaiti Dinar
Final maturity
15/01/2015
14/01/2015
31/12/2015
02/03/2015
01/03/2016
30/01/2015
13/01/2015
13/01/2015
31/07/2017
18/02/2020
Notional
value (*)
(6,862)
(74,083)
170
(12,259)
29,600
(58,059)
24,000
(20,358)
698,828
60,000
Although all the contracts in force at 31 December 2015 and 2014 were obtained for hedging purposes, due to
the Group’s contracting and designation criteria applicable at the contract dates, some of the contracts did not
qualify for hedge accounting under IFRS-EU.
Profits and losses recorded in the hedging reserve within the Equity (net of tax effect and non-controlling
interests) resulting from cash flow hedge at 31 December 2015 amount to (8,725) thousand euro (2014:
(10,211) thousand euro) and will be transferred to the income statement on an ongoing basis until the contract
is settled.
Interest rate swaps
The notional value of interest rate swaps (including the effect of inversions in joint ventures and assets held for
sale) outstanding at 31 December 2015 amounted to 898,058 thousand euro (2014: 1,112,044 thousand
euro).
At 31 December 2015, fixed interest rates ranged between 1.55% and 5.55% (2014: 1.72% and 5.55%) for
those operations in which interest rate is variable linked to Euribor. In the case of the derivative linked to the
TIIE rate (variable rate used for two projects in Mexico), the contracted fixed interest rate 8.20% (2014:
8.20%). During 2015 operations linked to Libor were cancelled.
At 31 December 2015 profit and loss from interest rate swaps recorded in equity through a hedging reserve
(net of the tax effect and non-controlling interests and including the effect of investments and assets held for
sale) amounts to (52,857) thousand euro (2014: (51,506) thousand euro). They will be transferred to the
income statement until bank loans are paid off. Settlement of these derivatives generated a loss of 12,296
thousand euro (2014: loss 14,815 thousand euro).
70
(Thousand euro)
Set out below is an analysis of the main interest rate swaps in force at 31 December 2015 (including contracts
related to joint ventures and non-current assets held for sale):
Name
GRUPO ISOLUX
HIXAM I
HIXAM II
INFINITA RENOVABLES
CIUDAD DE LA JUSTICIA
CIUDAD DE LA JUSTICIA
Infra Netherlands PEROTE XALAPA
Infra Netherlands CONCESIONARIA A4
NG Bank syndicated loan
BBVA syndicated loan (**)
La Caixa syndicated loan (**)
Santander syndicated loan (**)
Banesto syndicated loan (**)
Bankia syndicated loan (**)
Loan Raggio di Puglia (**)
Contract date
Final maturity
04/07/2013
05/02/2007
13/01/2010
30/12/2013
14/10/2014
14/10/2014
13/02/2008
01/08/2008
22/12/2008
15/07/2008
18/06/2009
04/01/2009
31/12/2010
18/03/2010
25/01/2012
29/12/2017
29/12/2022
23/12/2025
30/12/2017
15/10/2029
15/10/2029
14/02/2022
16/06/2025
31/12/2026
31/12/2027
18/06/2021
04/12/2023
20/12/2023
23/04/2026
29/06/2029
Notional
Fixed
Currency
value
interest
(thousand)
rate
270,754
EUR
1.72%
52,918
EUR
4.36%
24,032
EUR
4.35%
108,360
EUR
2.53%
3,660
EUR
1.55%
1,162
EUR
1.55%
1,148,374
MXN
8.20%
44,005
EUR
5.55%
27,088
EUR
3.96%
321,361
EUR
4.54%
7,627
EUR
4.09%
4,445
EUR
4.00%
20,642
EUR
3.53%
1,426
EUR
3.65%
10,578
EUR
2.73%
Variable
interest
rate
(charged)
Euribor
Euribor
Euribor
Euribor
Euribor
Euribor
TIIE (*)
Euribor
Euribor
Euribor
Euribor
Euribor
Euribor
Euribor
Euribor
(*) Mexican long-term reference interest rate
(**) Corresponding to Grupo T- Solar Global
Set out below is an analysis of the main interest rate swaps in force at 31 December 2014 (including contracts
related to joint ventures and non-current assets held for sale):
Name
GRUPO ISOLUX
GRUPO ISOLUX
GRUPO ISOLUX
HIXAM I
HIXAM II
Sociedad Concesionaria ZONA 8A
INFINITA RENOVABLES
Infra Netherlands PEROTE XALAPA
Infra Netherlands CONCESIONARIA A4
NG Bank syndicated loan
BBVA syndicated loan (**)
La Caixa syndicated loan (**)
Santander syndicated loan (**)
Banesto syndicated loan (**)
Bankia syndicated loan (**)
Loan Raggio di Puglia (**)
Contract date
Final maturity
10/09/2010
04/07/2013
16/05/2011
05/02/2007
13/01/2010
19/05/2008
30/12/2013
13/02/2008
01/08/2008
22/12/2008
15/07/2008
18/06/2009
04/01/2009
31/12/2010
18/03/2010
25/01/2012
29/06/2015
29/12/2017
16/05/2015
29/12/2022
23/12/2025
20/05/2024
30/12/2017
14/02/2022
16/06/2025
31/12/2026
31/12/2027
18/06/2021
04/12/2023
20/12/2023
23/04/2026
29/06/2029
Variable
Notional
Fixed
interest
Currency
value
interest
rate
(thousand)
rate
(charged)
85,441
Eur
2.03%
Euribor
319,436
Eur
1.72%
Euribor
45,000
Eur
3.05%
Euribor
55,133
Eur
4.36%
Euribor
25,996
Eur
4.35%
Euribor
5,697
Eur
4.82%
Euribor
117,390
Eur
2.53%
Euribor
1,410,810
Mxn
8.20%
TIIE (*)
45,264
Eur
5.55%
Euribor
28,678
Eur
3.96%
Euribor
336,607
Eur
5.09%
Euribor
8,003
Eur
4.09%
Euribor
4,681
Eur
4.00%
Euribor
22,041
Eur
3.69%
Euribor
1,497
Eur
3.65%
Euribor
11,179
Eur
2.73%
Euribor
(*) Mexican long-term reference interest rate
(**) Corresponding to Grupo T- Solar Global
Purchase options and sale of shares
During October 2011, an agreement was signed between the Group and Corpfin Capital Advisors, S.A. and
other funds, whereby Grupo T-Solar Global, S.A. (GTSG) shares received by these Companies (equivalent to
11.66% of the capital of GTSG) are subject to a put option and call option by which the Group would have the
obligation (under the put option) or on the contrary would have the right (under the call option) to acquire such
shares under certain conditions (which defer between both options). The options are exercitable between April
30 and May 31, 2016 for the put option, even though there are situations related to liquidity events that could
lead to an early exercise, and between 1 January 2014 and 28 February 2016 in the case of the call option, at
71
(Thousand euro)
an agreed price of 75.6 million euros (which can vary according to the date of exercise and other conditions).
These options have been valued at fair value, and the related liabilities are included within the caption “Other
payables” in current liabilities.
12.
Set out below is an analysis of trade and other receivables:
Non-current
Loans to companies accounted for the equity method
Trade receivables for sales and services
Other receivables
31/12/2015
31/12/2014
16,342
10,158
87,661
20,284
3,960
26,500
111,905
Current
Trade receivables for sales and services
Trade receivables-work completed pending certification
Less:Provision for impairment of receivables
665,594
907,444
(32,702)
539,497
859,299
(10,372)
Trade receivables – Net
Receivables from companies under EM
Sundry debtors
Public entities
In advance-payments to suppliers
Other receivables
1,540,336
76,113
63,524
140,235
172,467
89,986
2,082,661
1,388,424
93,535
13,864
141,701
147,239
62,453
1,847,216
There is no significant effect on the fair values of trade and other receivables due to its recognition at
amortized cost, since nominal values are deemed to approximate fair values.
At 31 December 2015, the heading of "trade receivables for sales and services" includes customer
withholdings in the amount of 106,957 thousand euro (2014: 82,742 thousand euro).
At 31 December 2015 232,490 thousand euro have been deducted (2014: 183,443 thousand euro),
corresponding to German method contracts loans and other invoiced ceded to third parties prior to maturity.
These assets have been written off the balance as it has been considered they meet the conditions
established by IAS 39 on derecognition of financial assets.
At 31 December 2015 “Trade receivables for sales and services” caption includes bills discounted at banks for
a total of 46,139 thousand euro (2014: 28,169 thousand euro).
The Group has recognized a loss of 1,355 thousand euros due to the impairment of trade receivables during
the fiscal year ended 31 December 2015 (2014: loss 2,013 thousand euros).
At 31 December 2015 the Group has recognized a provsion of 32,702 thousand euro (2014: 10,372 thousand
euro) due to the impairment of trade receiveables. The majority of the provision refers to past due amounts,
being the rest of the overdue estimated not to be impaired. Periodically the Group analyses the posible
existence of impairment of trade receivable. In this sense, in order to mitigate credit risk, the Group has
established measures both previoulsy the engagement of new contracts and during the execution of work, to
flag the existence of any risk associated to the collectability of the amouns receivable. Such measures,
amongst others, comprise solvency study, credit ratings, considering as well the geopolitical risks, project type
and class of client (public or private).
The matured debt at 31 December 2015 represents 11.3 % of the trade receivables - net (2014: 10.4%), 38.5
% of which was less than 180 days old (2014: 61.9%). At 31 December 2015, 49 % of matured debt referred
to public sector clients (2014: 73.3%).
72
(Thousand euro)
At 31 December 2015, unimpaired matured debt outstanding amount due by 180 days totalled 68,620
thousand euro (2014: 55,588 thousand euro) of which 64.5% (2014: 49.3%) refers to outstanding amount due
by public sector entities.
Change in the provision for impairment of trade receivables is as follows:
2015
2014
Opening balance
Appropriations
Applications
Transfers
10,372
1,355
(2,201)
23,176
36,125
2,013
(27,766)
-
Closing balance
32,702
10,372
The remaining accounts included in receivables contain no assets that are impaired.
The maximum exposure to credit risk at the reporting date is the fair value of each category of receivables
referred to above. It is not Group policy to contract insurance for receivables hedging.
The balance of trade receivables for sales and services includes the following amounts denominated in
currencies other than the euro:
US Dollar
Qatar Riyal
kuwaití Dinar
Brazilian Real
Argentinean Peso
Mexican Peso
Algerian Dinar
Indian Rupee
Chilean Peso
Bolivarian Peso
Other currencies
31/12/2015
110,334
18,081
23,347
20,816
117,459
12,807
14,672
52,247
2,627
16,927
63,183
31/12/2014
75,185
16,235
5,390
19,987
63,758
4,377
27,516
39,376
3,416
1,959
46,290
452,500
303,489
Costs incurred and recognized gains (less recognized losses) on all contracts in force at the balance sheet
date amounted to 8,930 million euro (2014: 7,802 million euro) and 795 million euro (2014: 578 million euro),
respectively.
73
(Thousand euro)
13.
Inventories
A breakdown of inventories is set out in the following table:
Real Estate developments in progress
Raw materials and finished products
Capitalized project costs
31/12/2015
31/12/2014
104,942
47,707
90,312
100,085
69,137
83,920
242,961
253,142
Set out below is a breakdown of Real Estate developments in progress by cycle:
Real Estate developments in progress, short cycle
Real Estate developments in progress, long cycle
31/12/2015
31/12/2014
104,942
100,085
104,942
100,085
At 31 December 2015 and 2014 there are no commitments to sell real estate developments in progress (other
than those held for sale). In this respect, during 2015 and 2014 the Group has not received advance payments
related to real estate developments.
During 2015, capitalized interest amounted to 50 thousand euro (2014: 384 thousand euro), relating to interest
accrued during the construction of developments and arising on direct financing received to build the
properties.
During 2015 assets were not received through payment in kind (2014: 1,440 thousand euro).
In 2015, no impairment was recognised for the real estate development projects underway (2014: not
recorded). Market value of the properties is based on independent expert reports.
14.
Cash and cash equivalents and financial assets at fair value through profit or loss
14.1
Set out below is a breakdown of cash and cash equivalents:
Cash and banks
Short-term bank deposits and other
31/12/2015
31/12/2014
145,617
23,568
263,622
27,650
169,185
291,272
This caption includes cash (cash in hand and short-term bank deposits) and cash equivalents (i.e., short-term
highly liquid investments easily convertible into specific cash amounts within a maximum of three months, or
with no restriction and no availability penalty if higher, and whose value is not subject to significant change
risks).
Of the total figure for cash and cash equivalents, temporary joint ventures contributed 49,417 thousand euro
Cash and cash equivalents include balances in currencies other than euro totalling 97,977 thousand euro
74
(Thousand euro)
The main currencies held as cash are as follows:
US Dollar
Argentinean Peso
Argelian Dinar
Boliviano
Bangladesh Taka
Brazilian Real
Mexican Peso
Omani Rial
CFA Franc
Peruvian Nuevo Sol
Uzbequistan Sum
Others
Total
2015
2014
36,586
8,190
10,404
1,620
2,710
4,595
175
5,275
8,621
4,074
2,606
13,121
97,977
61,171
44,222
22,660
2,702
8,425
5,559
3,875
8,844
7,886
3,318
2,966
26,132
197,760
For the purposes of the cash flow statement, the treasury balance includes the balance in the caption cash
and cash equivalents.
14.2
Set out below is a breakdown of financial assets at fair value through profit or loss:
Short -term bank deposits and others
31/12/2015
31/12/2014
13,491
14,675
13,491
14,675
In this heading mainly records current deposits in credit institutions.
15. Non-current assets and related liabilities held for sale and discontinued operations
Non-current assets and related liabilities held for sale
Before 2015 the Group formally approved the start of the process to sell its property operations, as well as
certain operating assets located in Latin America and therefore decided to classify the assets and liabilities
relating to these operations as held-for-sale.
The real estate and other operating assets located in Latin America, which are classified as held for sale, have
been classified as such for more than twelve months but they have not been sold due to circumstances that,
at the time of classification, were either improbable or beyond the Group's control. However, the Group
remains firmly committed to the plan to sell these assets. They are being actively marketed and formal offers
have been received. The Group therefore believes that there is a very good chance that they will be sold in the
near future. In some cases, sales agreements have been signed and are pending authorisation from the
supervisory bodies or finalisation of the sales process.
As explained in Note 9, in 2015 the partners of the joint arrangement IIN decided to extinguish the agreement
and in exchange of the investment in the joint arrangement the Group will receive control over certain
businesses identified in that note. This investment is therefore included under the heading Non-current assets
held-for-sale at 31 December 2015.
At the date of preparation of these consolidated annual accounts considering the relevant authorizations, the
joint arrangement had not yet been received. Although, given the fact that the limited authorizations that have
yet to be received are of little importance, Group Management considers that this process will be completed
shortly. Once the authorizations are obtained the change in control will be effective in accordance with IFRS 3.
Management's preliminary estimates resulting from the change in control is an increase in the consolidated
75
(Thousand euro)
group's assets, liabilities and equity totalling approximately 2,143 million euro, 1,834 million euro and 309
million euro, respectively. Furthermore, at the same date the items that at 31 December 2015 were recognized
under the headings Cumulative Translation and Hedging reserves with respect to the investment in IIN will be
recycled to 2016 results. The aforementioned figures are provisional and are subject to adjustments that could
arise in the final calculations once the change in control is completed.
Set out below is a breakdown of the non current assets and liabilities held for sale of 2015 and 2014:
Non-current assets
Property, plant and equipment (Note 6)
Intangible assets (Note 7.2)
Investment property
Concessionary assets assigned to projects and other non-current assets
assigned to projects (Notes 8.1 & 8.2)
Investments in associates accounted for the equity method (Note 9)
Long-term credits and deferred tax assets
Deferred tax assets
Current assets
Inventories
Total assets
Bank borrowings
Project finance
Other payables and deferred tax liabilities
Current liabilities
Bank borrowings
Project finance
Total liabilities
31/12/2015
44,671
14,295
31/12/2014
44,939
1
14,413
91,799
858,912
31,307
5,033
1,046,017
81,410
5,605
5,400
7,275
159,043
158,130
120,885
2,314
281,329
1,327,346
168,255
49,600
2,704
220,559
379,602
50,070
92,525
2,667
8,277
153,539
38,104
100,385
2,459
9,095
150,043
4,767
5,920
256,454
20
267,161
420,700
6,318
12,168
4,004
20
22,510
172,553
In order to compare the carrying value of the assets against their fair value, the Group has estimated fair value
using appraisals prepared from independent experts in the case of the real estate activity in Spain, all of them
included in the Official Register of Bank of Spain. The appraisals have been issued accordig to different
valuation methods, such as residual dynamic method, cost method and comparative method, and have been
updated during the year 2015. The fair value of the businesses and other assets to be received as part of the
agreement signed by the partners with respect to the investment in IIN has been estimated by Group
Management and reviewed by independent experts.
Equity in the consolidated balance sheet at 31 December 2015 includes 280 million euro (2014: 7.1 million
euro) in accumulated differences on exchange that are related to non-current assets and liabilities held-forsale, 261 million euro belong to the investment in IIN. In hedging reserves there are 43 million euro related to
non-current assets and liabilities held for sale from IIN investment (2014: no credit).
Bank borrowings are secured by land and buildings valued at 17,580 thousand euro (2014: 17,880 thousand
euro). The secured debt balance amount to 2,679 thousand euro (2014: 3,579 thousand euro) under the
mortgage loans´ framework.
76
(Thousand euro)
Inventories and investment properties include real estate developments totalling 97 million euro securing
financing received at 31 December 2015 (2014: 109 million euro). The balance of the secured debt amounted
to 36 million euro (2014: 38 million euro).
The heading "Trade and other payables" includes the advance payments received with respect to the
separation agreement of the partners of Isolux Infrastructure. On 31 March 2015 the first advance payment
from PSP in the amount of 105 million US dollar (approximately 97.8 million euro at the exchange rate as of
the date of receipt) was received based the signed contracts. On 5 September 2015 based on the conclusions
of the independent expert with respect to the transaction described in Note 9.1 resulting in a balance of 303
million US dollar receivable by the Group, from which the advance of 105 million US dollar payment must be
discounted, therefore pending approximately 198 million US dollar to be received after the separation process
and all adjustments arising from the transfer between the businesses will be completed. On 9 October 2015
the Group signed an advance collection agreement of 132 million euro with several financial entities, subject
to the definitive completion of the disinvestment operation. Based on the special nature of this agreement, it is
classified by the Group as "Other debt" under the heading "Trade and other payables".
Discontinued operations
Before 2015, the Group classified the property operation as discontinued activity in Spain.
Set out below is a breakdown of the results for the year from discontinued operations for 2015 and 2014:
2015
2014
Sales revenue
(2,817)
5,581
1,014
(9,412)
(2,087)
267
(2,354)
(4,653)
3,745
89
(8,487)
(4,206)
(339)
(3,867)
Operating profit/(loss)
(4,904)
(8,859)
Share of investments accounted for the equity method (Note 9)
(4,342)
(4,519)
(2,113)
(1,081)
(13,765)
(12,053)
Profit before tax
Income tax (Note 28)
3,327
2,773
(10,438)
(9,280)
Attributable to:
Owners of the parent Company
7
(10,445)
(34)
(9,246)
(10,438)
(9,280)
Cash flows generated by discontinued operations unit in 2015 and 2014 are analysed below:
Cash flows from financing activities
2015
(2,367)
654
1,589
2014
(3,031)
1,803
1,257
(124)
29
77
(Thousand euro)
16.
a)
Share capital, share premium and legal reserve
Share capital
At 31 December 2015, as the result of the operation described below, the parent company’s share capital
consists of 360,340,024 ordinary shares (2014: 90,085,006 shares) divided in 270,255,018 ordinary shares
class A with a par value of 0.01 euro each and 90,085,006 ordinary shares class B with a par value of 1 euro
(2014: there were just one type of shares of 0.20 euro). The shares are fully paid up in a total amount of
92,788 thousand euro (2014: 18,017 thousand euro). There are no restrictions on the transfer of the shares.
The following companies hold interests in the parent company’s share capital:
2015
2014
No. of shares
% Interest
No. of
shares
% Interest
Construction Investment Sarl
Inversiones Corporativas S.A.
Hiscan Patrimonio, S.A.U.
Cartera Perseidas, S.L.
Charanne B.V.
187,458,248
42,293,356
85,769,792
36,087,008
8,731,620
52.023%
11.737%
23.802%
10.015%
2.423%
46,864,562
10,573,339
21,442,448
9,021,752
2,182,905
52.023%
11.737%
23.802%
10.015%
2.423%
Total
360,340,024
100.000%
90,085,006
100.000%
On 15 January 2015, the Group's shareholders, at the General Shareholders Meeting, approved a capital
increase in the amount of 342,323 thousand euro to be charged to the Share Premium by increasing the par
value of the existing shares 4 euro each. It was also agreed to split the Company's shares, reclassifying them
as Class A shares (par value of 0.01 euro each) with one voting right per share and Class B shares (par value
of 1 euro each) with 100 voting rights per share. As a result, the share capital was reduced by 267,552
thousand euro. The share capital reduction was intended for creating a restricted reserve fund for the Class A
shares that will only be available under the same conditions as required for the share capital reduction.
Following these changes, the share capital is 92,788 thousand euro.
Finally, in the same meetings the shareholders agreed to modify the representation system of the Class A and
Class B shares by transforming the physical certificates into account entries.
b)
Share premium
At December 31 2015 this reserve is unrestricted and amounts to 183,914 thousand euro (2014: 526,237
thousand euro).
c)
Legal reserve and other unavailable reserves
Appropriations to the legal reserve are made in compliance with Article 274 of the Spanish Capital Companies
Act, which stipulates that 10% of the profits for each year must be transferred to this reserve until it represents
at least 20% of share capital. At 31 December 2015 and 2014 this reserve amounts to 3,493 thousand euro.
At December 2014 this reserve was fully constituted due to the capital increases carried out later, in the
following years a part of the benefit will supply the reserve.
The legal reserve is not available for distribution. If it is used to offset losses in the event of no other reserves
being available, it must be restablished with future profits.
In addition, this reserve includes the reserve resulting from the application of the parent company of Article
273,4 of the Spanish Capital Companies Act “In any event, a restricted reserve equivalent to the goodwill
appearing on the asset side of the balance sheet must be allocated and a portion of profits representing at
least 5% of that goodwill must be allocated to this reserve. If there were no profits or profits were insufficient,
freely available reserves should be used”. This reserve amounts to 16,501 thousand euro at 31 December
2015 (2014: 14,144 thousand euro).
78
(Thousand euro)
17.
A breakdown by company/subgroup of cumulative translation differences is set out below:
Subsidiary or subgroup
2015
2014
Isolux de México S.A. de CV
Grupo Isolux Corsán – Branches
Carreteras Centrales Argentina, S,A.
Isolux Corsán Energías Renovables, S.A.
Isolux Proyectos e Instalaciones, Ltda.
Isolux Corsán do Brasil, S.A.
Isolux Corsán India
Tecna Estudios y Proyectos de Ingeniería, S.A. and subsidiaries
Azul de Cortes, S.A. de C.V.
Isolux Corsán Argentina, S.A.
Corsán Corvián Construcción, S.A. – Branches
Isolux Ingeniería, S.A.- Branches
Isolux Mozambique LDA.
Isolux Infrastructure Netherlands, B.V. and subsidiaries
Lineas De Transmision Peruanas, SAC
Others
(34,762)
(33,623)
(3,302)
(17,336)
1,450
14,134
8,891
(903)
13,468
(4,477)
(16,797)
(75,066)
1,576
(261,427)
(4,704)
(6,783)
(2,255)
(34,903)
(358)
(6,380)
(3,998)
8,208
3,413
(2,235)
8,708
(4,472)
(8,946)
(30,921)
1,533
(117,907)
168
1,450
Total
(419,661)
(188,895)
18.
Parent company profit/(loss) distribution and non-controlling interest
The proposal for the distribution of the parent company’s 2015 results that will be submitted to the Annual
General Shareholders Meeting and as well as the approved 2014 result distribution (on 30 June 2015) are set
out below:
Available for distribution
2015
2014
(128,495) (140,373)
Distribution
Prior-year losses
Reserve for unavailable goodwill (Spanish Capital Companies Act, art.273,4)
(130,852) (142,730)
2,357
2,357
(128,495) (140,373)
79
(Thousand euro)
Change in non-controlling interests during 2015 is set out below:
Grupo Tecna
Grupo Isolux Corsan Concesiones, S.A.
Interisolux Torrejón Viv. Joven, S.L.
Julitex, S.L.
Interisolux Alcorcón Viv. Joven, S.L.
Agua Limpa Paulista, S.A.
Infinita Renovables, S.A.
Luxeol, S.L.
Total
Opening
balance
5,850
18,705
12
(424)
502
1,639
(33,195)
4
Share of
profit/losses
694
(24)
31
(124)
(4,256)
(15)
(6,907)
(3,694)
-
Change in
shareholding
and others
(109)
(5,035)
(12)
9
(11)
(395)
165
1
Closing
balance
6,435
13,670
(439)
522
1,120
(37,286)
(10)
-
(5,387)
(15,988)
-
Change in
shareholding
and others
1,147
33
(13)
31
(679)
Closing
balance
5,850
18,705
12
(424)
502
1,639
(33,195)
-
(1,554)
(162)
-
4
-
(1,197)
(6,907)
Dividends
Change in non-controlling interests during 2014 is set out below:
Grupo Tecna
Grupo Isolux Corsan Concesiones, S.A.
Interisolux Torrejón Viv. Joven, S.L.
Julitex, S.L.
Interisolux Alcorcón Viv. Joven, S.L.
Agua Limpa Paulista, S.A.
Aparcamiento Gomez Ulla, S.L.
Aparc. Nuevo Hospital de Burgos
Luxeol, S.L.
Total
19.
Opening
balance
4,001
17,184
12
(396)
498
1,989
(27,324)
1,580
143
2
Share of
profit/losses
702
1,521
(61)
17
(381)
(5,192)
(26)
19
2
(2,311)
(3,399)
Dividends
Set out below is a breakdown of trade and other payables at 31 December 2015 and 2014:
31/12/2015
31/12/2014
Deferred income-Official grants
Accounts payable in associates and Joint Ventures
Other payables
7,908
11,284
8,625
1,573
52,156
Total
19,192
62,354
1,306,947
430,156
577,764
1,122
45,462
119,314
2,480,765
1,412,575
411,402
342,565
16,015
75,840
97,090
2,355,487
Non-current
Current
Trade payables
Trade bills payable
Advances received on contracted work
Accounts payable in associates and Joint Ventures
Social security and other taxes
Other payables
Total
Nominal values are deemed to approximate fair values.
The heading "Trade bills payable" mainly includes confirming facilities, trade bills and other commercial
documents issued to suppliers as part of the Group's ordinary business operations.
80
(Thousand euro)
The balance in this heading at 31 December 2015 includes 23,108 thousand euro which, at the date of
preparation of these accounts, a new payment schedule is being negotiated with the related entities.
In January 2016, within the framework of Article 161 of Brazilian Law 11.105/2005, the applications for the
“Plan de Recuperaçao Extrajudicial” were filed, affecting the branches of Isolux Ingenieria, S.A and Corsan
Corviam Construccion, S.A. in Brazil, as well as the subsidiary companies Isolux Projetos e Instalações Ltda.
and Isolux Projetos, Investimentos e Participações Ltda. were filed. This plan has been delayed (not yet
ratified by the courts), and is currently in the allegations phase. This process is established by Brazilian
legislation and allows companies to restructure their debt in an ordered manner and to continue with their
business once that situation has been overcome.
Additionally, it is worth mentioned that in Isolux Ingenieria, S.A. branch in Uruguay, as a result of the early
termination of two ongoing projects, the treasury tensions have increased, forcing Management to open the
way for the renegotiation of the outstanding balances and schedules payment with the
suppliers/subcontractors. While a high proportion of these negotiations are being successfully concluded, due
to disagreements over a claimed amount of 170 thousand US dollars, incorrectly based on Group view, on 17
March 2016 the request for arrangement agreement with the creditors has been declared under Uruguay´s
regulatory framework. Group management is working on presenting the appeal against the court decision as
well as on transferring sufficient funding to address this situation as soon as possible, as a consequence, no
equity negative impacts are expected.
Information on deferred payments to suppliers. Third additional provision of the “Duty of information
disclosure” Spanish Law 15/2010, of 5 July.
The information required by Additional Provision Three of Law 15/2010 (5 July), prepared in accordance with
the ICAC Resolution dated 29 January 2016 on the information to be included in the notes to the annual
accounts with respect to the average payment period for suppliers in commercial transactions is set out below.
In accordance with the regime provided for in Law 15/2010, the deferral period allowed and applicable to Grupo
Isolux Corsan´s spanish companies is 60 days in the case of supplier and subcontractors of work contracts or
other trade operations. These terms are applicable to contracts signed after July 7, 2010.
The duty of disclosure refers only to the trade payables included in the current liabilities under the heading
"Trade and other payables” of the consolidated balance sheet. Thus creditors or suppliers that do not meet this
condition, such as suppliers of fixed assets or creditors through leasing, are outside the scope of this law.
The Resolution indicates that the calculation only includes companies located in Spain, with the understanding
that the payment terms are subject to Spanish legislation, that are consolidated using the full or proportional
method once all reciprocal credits and debits are eliminated. The calculation of the average payment period is
calculated taking into account the supplier invoice date and the payment date (as is mentioned below, in
cases in which payment is made through confirming facilities the date on the relevant documentation is used).
The Group generally applies the payment management system the confirming facilities through financial entities
under the terms of contracts with their suppliers and/or subcontractors. The Group recognizes and pays
suppliers financial expenses implicit in these agreements reached with the Group.
Average payment period to suppliers
Payment ratio
Pending payments ratio
Total year payments
Total pending payments
31 December 2015
Days
108
89
175
Thousand euro
448,348
122,593
Pursuant to the above-mentioned, Group policy about payment to suppliers responds to agreements reached
to those suppliers and takes into account market conditions, considering works volume and supplies resulting
81
(Thousand euro)
from contracts entered by the Group with different Public Administrations as well as the usual collection period
in the business sectors in which the Group operates.
20.
At 31 December 2015 and 2014, bank borrowings and senior notes are as indicated below
31/12/2015
31/12/2014
832,722
330,914
22,901
161,909
229
829,458
221,483
18,663
201,492
328
1,348,675
1,271,424
11,760
46,139
6,746
69,475
93
99,750
11,760
28,910
88,742
57,931
90
88,657
Non-current
Senior Notes
Syndicated loans
Credit lines
Other borrowings
Finance lease liabilities
Current
Senior Notes
Advanced credit debts
Syndicated loans
Credit lines
Other loans
Total bank borrowings
233,963
276,090
1,582,638
1,547,514
Except for the senior notes, all borrowings bear interest at Euribor rates and contracted rates are reviewed
after periods which do not generally exceed six months. The fair values of current and non-current bank
borrowings therefore approximate their carrying amounts.
At 31 December 2015 and 2014, non-current bank borrowings mature as indicated below:
2015
2014
Between 1
and 5 years
More than
5 years
Senior Notes
Syndicated loans
Credit lines
Other loans
330,914
22,901
142,665
170
832,722
19,244
59
832,722
330,914
22,901
161,909
229
Total
496,650
852,025
1,348,675
Concept
Between 1
Total and 5 years
More than
5 years
Total
221,483
18,663
160,169
261
829,458
41,323
67
829,458
221,483
18,663
201,492
328
400,576
870,848
1,271,424
Finance lease liabilities amounts have been discounted to their present value. Future financial charges on
finance leases amount 33 thousand euro (2014: 48 thousand euro).
82
(Thousand euro)
20.1) Syndicated loans
On 12 June 2015 the Group concluded an agreement with several financial institutions regarding the
modification and amendment of the terms of several syndicated loans that the Group had up until that date. The
new debt facility includes 5 debt tranches with maturity dates that run between 2017 and 2020. The interest rate
has been established at Euribor plus a spread ranging between 2.80% and 4.25% per year based on the value
of certain ratios. At the end of 2015 the outstanding nominal balance was 332.2 million euro.
This loan is subject to a compliance ratio agreement, which is normal for this type of transaction. At 31
December 2015, Company management understands that full compliance has been obtained with all ratio
relating to this agreement.
In June 2011 the Group concluded an agreement for a loan in the nominal amount of 59,500 thousand euro
with syndicated banks whose agent entity is EBN Banco de Negocios, S.A. to be used to finance Group
projects. In February 2014 the Group reached a novation agreement under which the initial due date of June
2014 was changed to a final due date in June 2017 with half-yearly repayments and the interest rate was
established at Euribor plus a spread of between 3.25% and 4% per year (previously Euribor 3.5% per year)
based on the value of certain ratios. At the year-end the outstanding nominal balance was 12.8 million euro
(2014: 19 million euro).
This loan is subject to a compliance ratio agreement, in line with this type of transaction. At December 31,
2015 Company management understands that the Group is in compliance with ratio relating to this
agreement.
20.2) Other borrowings
The following debts are included under this caption:
On 15 February 2012, the Group entered into a new agreement with Corporación Andina de Fomento to
obtain a loan with a nominal value of 50 millions US dollar, to finance Group activities; at the year end, the
outstanding balance amounts to 37 millions US dollar (2014: 47 millions US dollar). The loan bears interest at
the six-monthly Libor rate plus 5.5% per annum, in six-month periods. The final maturity of this loan is
February 13, 2022 with 16 semi-annual installments starting on August 2014. In 2015 a series of novation
agreements were signed with respect to the original contract, in order to defer the payment of several
instalments and to partially modify the ratios.
This loan is subject to a compliance ratio agreement, in line with this type of transaction. At 31 December
2015 Company management understands that the Group is in compliance with ratio relation to this
agreement.
On 14 March 2013, the Group concluded a new agreement with Inter-American Development Bank, to grant a
loan with a nominal value of 100 million US dollar whose main purpose is the financing of the Group's
activities and at the year-end it presents an outstanding balance of 82 million US dollar (2014: 100 million US
dollar). This loan bears interest at 6-month Libor plus a spread of 4.38% per year, every six months. This loan
matures on 15 February 2020, with 10 half-yearly installments starting on 15 February 2015.
agreement.
On 25 April 2013, the Group concluded a new agreement with Corporación Andina de Fomento, to grant a
loan with a nominal value of 50 million US dollar whose main purpose is the financing of the Group's activities
and at the year-end it presents an outstanding balance of 44 million US dollar (2014: 50 million US dollar).
This loan bears interest at 6-month Libor plus a spread of 5.5% per year, every six months. This loan finally
matures on 25 April 2023, with 16 half-yearly installments starting on 25 October 2015. In 2015 a series of
novation agreements were concluded with respect to the original contract, in order to defer the payment of
several instalments and to partially modify the ratios.
83
(Thousand euro)
agreement.
On 4 December 2014 an agreement was concluded with ING Bank NV branch in Spain, for a loan and a line
of credit for a nominal amount of 30 million euro in order to cover corporate financing. Interest for the loan is
quarterly payable at the Euribor plus a spread of between 2.75% and 3.25%. At the year-end the outstanding
balance was 30 million euro (2014: 20 million euro). This loan is for a term of 2 years after the signing date.
agreement.
On 16 June 2015 an agreement was signed with Natixis, S.A., branch in Spain, for a loan for a nominal
amount of 20 million euro. The interest rate has been established at Euribor plus a spread ranging between
2.80% and 3.25% per year based on the value of certain ratios. At the year-end the outstanding balance was
20 million euro. This loan falls due in June 2017.
agreement.
20.3) Credit lines
The Group has contracted multiple credit lines that are generally recognised as short-term balances since
maturities are usually annual, although the agreements include automatic renewal clauses. Amounts due after
one year are classified as non-current balances. These credit lines are linked to EURIBOR rate with spreads
between 2% and 5%.
20.4) Other information
The carrying amount of the Group’s borrowings is denominated in the following currencies:
Non-current
Euro
Other currencies
Current
Euro
Other currencies
Total bank borrowings
2015
2014
1,191,622
157,053
1,108,888
162,536
1,348,675
1,271,424
173,508
60,455
201,857
74,233
233,963
276,090
1,582,638
1,547,514
At 31 December 2015, the Group has available short-term facilities through credit lines, factoring and other
financing facilities amounting 90,610 thousand euro (2014: 211,012 thousand euro).
Nominal values are deemed to approximate fair values.
84
(Thousand euro)
20.5) Senior notes
During 2014 the Group issued (through its subsidiary Group Isolux Corsán Finance B.V.) 850 million euro of
senior unsecured notes with a fixed rate of 6.625%. These notes mature on April 15, 2021. The Original Notes
were issued on March 15, 2014 for an amount of 600 million euro, and the Additional Notes on June 26, 2014
for an amount of 250 million euro, all together “the Notes”. The Notes are jointly and severally guaranteed by
Group Isolux Corsán, S.A. and certain group subsidiaries. At 31 December 2015 the listed price of these
senior notes was 23.49% (2014: 87.21%).
The Group assumed a series of compliance obligations with respect to the senior notes, as is usual in this
type of transaction. At 31 December 2015 Management understands that none of those obligations have failed
to be met.
21.
Deferred income tax
The gross movement of deferred income tax is shown below:
2015
Deferred tax
Deferred tax
assets
liabilities
2014
Deferred tax
Deferred tax
assets
liabilities
1 January
Charge to income statement (Note 28)
Tax charged to equity
Exit from consolidation scope
Effect of tax rate change in Spain in income
statement
Effect of tax rate change in Spain in equity
288,523
53,234
(3,816)
(368)
43,171
29,371
(384)
(354)
256,204
79,523
(1,600)
-
24,179
22,896
141
-
-
-
(44,010)
(1,594)
(3,962)
(83)
31 December
337,573
71,804
288,523
43,171
Deferred tax assets at each year end are as follow:
Tax losses
Tax credits pending application
Temporary differences
2015
2014
129,240
17,955
190,378
106,507
18,911
163,105
337,573
288,523
85
(Thousand euro)
Change during 2015 and 2014 in deferred tax assets and liabilities is as follows:
Deferred tax assets
Reversals
Appropriations
Other
movements
Total
At 1 January 2014
Charged to income statement
Charged to equity
Effect of tax rate change in Spain in income statement
(11,851)
(1,636)
-
91,374
36
-
(44,010)
(1,594)
256,204
79,523
(1,600)
(44,010)
(1,594)
At 31 December 2014
Charged to equity
(15,165)
(3,093)
-
68,399
(723)
-
(368)
288,523
53,234
(3,816)
(368)
At 31 December 2015
337,573
Deferred tax liabilities
Reversals Appropriations
At 1 January 2014
Charged to equity
Effect of tax rate change in Spain in income statement
At 31 December 2014
Charged to equity
Other
movements
Total
(10,154)
-
33,050
141
-
(3,962)
(83)
24,179
22,896
141
(3,962)
(83)
(7,491)
-
36,862
(384)
-
(354)
43,171
29,371
(384)
(354)
At 31 December 2015
71,804
Deferred tax assets / (liabilities) charged to equity during the year are as follows:
2015
2014
(3,432)
(1,125)
(3,432)
(1,125)
Fair value reserves in equity:
Reserve for hedging transactions
86
(Thousand euro)
Deferred tax assets and liabilities arising from temporary differences are analysed below:
2015
2014
Deferred tax assets
Arising from provisions
Arising from non-current assets
Arising from financial derivatives measurement
Arising from deductible financial expense (Royal Decree-Law 12/2012)
Arising from other items
45,444
3,074
4,413
108,695
28,752
49,653
3,682
8,229
72,404
29,137
Total
190,378
163,105
Arising from financial derivatives measurement
Arising from non-current assets
Arising from trade and other receivables
(19,676)
(52,128)
(504)
(15,659)
(27,008)
Total
(71,804)
(43,171)
At 31 December 2015 the Group has recognized tax credits with respect to tax losses from some subsidiaries
in the amounts detailed below:
Generation
Spain
Brazil
Argentina
Other
countries
Total
2009
2010
2011
2012
2013
2014
2015
1,779
9,152
9,074
31,194
20,853
21,613
5,071
50
3,945
6,519
3,473
-
1,584
492
1,655
12,786
1,779
10,736
14,145
31,194
21,395
9,073
40,918
93,665
15,585
3,473
16,517
129,240
Tax credits for losses carried forward in Argentina expire in 5 years time since the date of creation. In Spain
due to the law amendment detailed below, the application of the tax credits becomes unlimited. In Brazil the
compensation period is unlimited.
Deferred tax assets for tax credits in respect of tax losses available for offset and tax-loss carryforwards are
recognized insofar as the existence of the relevant tax benefit through future taxable profits is likely. Most tax
loss carryforwards relate to companies that are part of the consolidated tax group in Spain. Management has
performed an analysis to determine the amount of credits to be activated, considering that it is likely that tax
revenues will be generated in the future to offset these tax loss carryforwards (along with other net tax assets
related to the tax group). Among other things, management's analysis took the following aspects into account:
generation of future tax revenues according to the business plans of the member companies of the tax group,
the existence of past tax losses that are not expected to be repeated in the future (e.g., related to the
impairment of certain assets), the reorganisation measures implemented to adapt the structure to the current
business volume in Spain, and the implementation of tax optimisation measures to offset the inefficiencies that
have arisen in recent years as a result of the rapid international expansion of the Group's operations and the
changes in Spanish tax laws.
A new Corporate Tax Law 27/2014 was enacted on 28 November, introducing a gradual reduction in the
general tax rates from 30% in 2014 to 25% in 2016, the elimination of the time limit on offsetting tax losses
and limits on the deductibility of losses associated with the assets. The impact of this policy change on the tax
expense shown on the income statement amounted to a loss of 40,048 thousand euro (Note 28), while the
effect on equity items amounted to 1,511 thousand euro. Also on the same date, laws 26/2014 and 28/2014
87
(Thousand euro)
were passed on Personal Income Tax and Value Added Tax, respectively. These laws did not have a
significant impact on the Group's financial statements as of the closing date.
22.
22.1.
Provisions for other liabilities and charges – Non-current
Provisions for
project completion
Provisions for
litigation and
other
Decommising
provisions
Total
Balance at 1 January 2014
Reversals /Applications
Appropriations
13,748
(2,303)
842
30,084
(17,721)
16,238
2,219
99
46,051
(20,024)
17,179
Reversals /Applications
Appropriations
12,287
(587)
1,854
28,601
(5,383)
624
2,318
99
43,206
(5,970)
2,577
13,554
23,842
2,417
39,813
Provisions for project completion and guarantees
The balance in this account relates to projects that are completed or substantially completed and consists of
the Group’s estimate of probable costs to be incurred prior to final acceptance by the customer. Additional
customer claims not subject to objective quantification at consolidated annual accounts preparation date could
arise, although Management understands no significant loss over provisioned amounts will arise.
Provisions for litigation and other
This balance relates to provisions set up to cover other liabilities and charges related or not related to
litigation, including tax or other contingencies for which the Group considered a provision should be posted. In
the opinion of the directors and legal counsel, the lawsuits in question are not likely to generate significant
losses above the amounts provisioned.
Decommissioning provisions
Based upon technical studies, the Group has estimated the current cost of decommissioning central solar
installations as well as biodiesel plants that have assets assigned to projects, booking these estimates as a
higher asset value and amortizing it over its useful life, which in most cases is similar to the useful life of the
lease agreements of the land where the solar plants and the biodiesel plants are located.
22.2.
Provisions for other liabilities and charges – Current
The balances included in this item, totalling 43,897 thousand euro (2014: 73,559 thousand euro), related to
the Construction Division and the Engineering Division and mainly consist of provisions for project completion
costs and other items. “Change in trade provisions” in the income statement registers net allocations made to
provisions for other liabilities and current expenses.
88
(Thousand euro)
23.
Revenue / Sales and Materials consumed and other external costs
Sales information by activity and market is included in segment information note (see Note 5).
The account “Materials consumed and other external costs” during 2015 and 2014 is analyzed below:
Raw materials and other supplies
Change in inventories – no real estate
Other external costs
Total
24.
2015
2014
510,303
15,038
838,052
620,248
(14,875)
627,632
1,363,393
1,233,005
Other income and expense
Other operating income and expense are analyzed below:
2015
2014
445
14,326
14,771
2,049
3,206
5,255
70,058
200,200
2,928
42,839
316,025
101,950
186,214
(12,909)
40,249
315,504
Operating grants
Other operating revenue
Total
Other operating expense
Operating leases
Other external services
Net impairment of accounts receivables
Taxes
Total
“Net impairment of accounts receivable” includes 2,928 thousand euro related to impairment of trade
receivables (2014: 12,909 thousand euro) and other amounts (Note 12).
25.
Wages and salaries
Social Security contributions and other social charges
2015
2014
285,981
62,524
266,689
67,391
348,505
334,080
“Wages and salaries” include termination indemnities amounting 10,348 thousand euro (2014: 10,916
thousand euro).
The Group’s average workforce is analyzed below:
Category
2015
2014
Graduates
Administrative staff
Workers
2,427
809
2,333
2,008
1,030
2,936
5,569
5,974
Additionally, the average number of employees by the proportionately-consolidated companies has been 318
(2014: 356 employees).
89
(Thousand euro)
At 31 December 2015, personnel distribution by gender is as follows:
Category
Board Directors
Senior managers
Managers
Graduates
Workers
Men
Women
Total
13
5
167
1,847
367
1,972
4,371
11
418
185
105
719
13
5
178
2,265
552
2,077
5,090
Men
Women
Total
14
6
364
1,761
538
2,133
4,816
22
413
216
137
788
14
6
386
2,174
754
2,270
5,604
At 31 December 2014, personnel distribution by gender is as follows:
Category
Board Directors
Senior managers
Managers
Graduates
Workers
Additionally, the proportionately-consolidated companies had 317 employees at the year end (2014: 374
employees).
The average number of disabled persons (disability equal or higher than 33%) employed during 2015 and
2014 by Group companies, are classified in the following categories:
Category
Graduates and administrative staff
Workers
26.
2015
2014
11
7
18
15
8
23
Operating leases
Future minimum lease instalments under non-cancellable operating leases are analyzed below:
2015
2014
Less than 1 year
Between 1 and 5 years
More than 5 years
18,214
12,765
29
30,298
18,060
147
Total
31,008
48,505
The expense recognized in the income statement during 2015 in relation to operating leases totals 70,058
thousand euro (2014: 101,950 thousand euro).
The Group leases the building in which its headquarters are located from a third party. The lease agreement
has a 12-year term as from lease inception (15 March 2007), although the Group may exercise a purchase
option as from year five, in which case the parties must previously agree on the terms of the transaction. Since
at lease inception and at the preparation date of these consolidated annual accounts, the purchase option is
not likely to be exercised the operation has been classified as an operating lease. All payments due
throughout the original 12-year term are included in the above table.
90
(Thousand euro)
27.
Net financial results at 31 December 2015 and 2014 are detailed below:
2015
2014
Interest expense and other financial expense
Net losses on foreign currency transactions
263,185
2,393
236,188
-
Financial expenses
265,578
236,188
29,086
-
28,566
2,050
Interest income and other financial income
Net gains on foreign currency transactions
Financial income
Net financial result – Expense
29,086
30,616
236,492
205,572
During 2014 the chapter interest expense and other financial expense included 9.9 million euro related to the
payment in advance of certain bank borrowing (Note 20) and 2.5 million euro of corresponding ineffectiveness
of related derivatives.
28.
Income tax
Group Isolux Corsán, S.A. is the parent Company of Tax Group 102/01, therefore it is authorized to file
consolidated statement in Spain for all the companies included within the Tax Group.
The expenses for income tax include:
2015
2014
Current income tax
Deferred tax (Note 21)
(14,598)
(23,863)
35,864
(16,579)
Total expense for income tax
(38,461)
19,285
The Group’s income tax differs from the theoretical amount that would have been obtained if the tax rate
applicable to the consolidated companies’ profits had been used as follows:
Continued operations:
2015
2014
Profit / loss before income taxes
(83,614)
(13,420)
Tax calculated at the rate applicable to the parent company’s profits
Effect on equity method consolidation
Effect on tax payable of non-tax deductible expenses
Effect of different tax rates abroad and other differences in foreign operations
Effect of tax rate change in Spain (Note 21)
Other
(23,411)
(9,938)
7,879
(2,953)
(10,038)
(4,026)
(7,907)
5,400
(4,171)
40,048
(10,059)
Tax expense
(38,461)
19,285
91
(Thousand euro)
Discontinued operations:
2015
2014
(13,765)
(12,053)
Tax calculated at the rate applicable to the parent company’s profits
Effect on tax payable of non-tax deductible expenses and other
(3,854)
527
(3,616)
843
Tax expense
(3,327)
(2,773)
Profit / loss before taxes
The effective tax rate, for continuing and discontinued operations, in 2015 has been (42.9%) (2014: (64.8%)).
This rate differs from the rate applicable to the parent company (28% in 2015 and 30% in 2014) mainly due to
the net effect of non-deductible expenses as well as different tax rates abroad that may be higher or lower
than the rate applicable in Spain with the effect of not including the share of profits / (losses) of investments
accounted for the equity method and the effect of changes in tax rates in Spain in 2014.
On 1 July 2010, inspection activities on Income Tax for the period 2005-2008 were initiated in Grupo Isolux
Corsán, S.A., as the parent company of the tax group. Likewise, several group companies were subject to a
general inspection of Value Added Tax (2006-2008), Personal Income Tax (2006-2008), Annual Statement of
Operations (2005-2008) and Intra-Community Business Operations Statement (2005-2008). As a result of the
above-mentioned inspections, in 2012 corporate income tax assessments were raised for the periods
inspected. Some of the assessment were contested by Grupo Isolux Corsán, mainly in connection with export
deductions, transactions abroad, non-deductible expenses and other deductions applied to property
restatements amounting to approximately 33.7 million euro, all relating to subsidiaries of the Tax Group.
On 31 August 2012, an economic-administrative claim was filed against those assessments at the Central Tax
and Treasury Court, who on 21 January 2015 notified the dismissal of the claim. On 18 March 2015 the Group
submitted an appeal to be filed before the Supreme Court.
In the opinion of the Parent company's management and tax advisors, there are sound grounds for defending
the Group's position and these proceedings are not expected to have a significant impact on the Group's
financial situation. Consequently, the Group has not recognized any provision in relation to the previous
situation.
The Group has provided mortgages on certain properties to secure the appeals against the aforementioned
contested tax assessments as well as for other claims made by the tax authorities. The net carrying value of
the properties subject to mortgages totals 66 million euro (2014: 66 million euro), 30 million euro belong to
assests held for sale (Note 15).
In December 2015 the Italian tax authorities completed their inspection and issued an administrative
settlement in the amount of 12.6 million euro plus penalties and interest, relating to a VAT verification
procedure against the branch of Isolux Ingeniería, S.A. The Company's management and tax advisors
consider that reasonable arguments of substance to attain the dismissal of this case exits and no significant
impact on the Group's assets is considered to be existing. The Group has not therefore recognized any
provision relating to that situation.
On 4 February 2016, Grupo Isolux Corsán, S.A., as the parent of the tax group, received notice of the
beginning of an inspection of corporate income tax for the period 2009/2010 Several companies of the Isolux
Corsán Group are also undergoing general tax inspections of value added tax (2009-2010) and personal
income tax (2011-2013). These inspections had not yet been completed at the date of preparation of these
consolidated annual accounts. As a result of actions that may be undertaken by the tax authorities in
connection with the years open to inspection, contingent tax liabilities could arise that cannot be objectively
quantified. Nonetheless, the Parent Company’s Directors consider that any liabilities arising with respect to
this inspection would not give rise to significant amounts in excess of the provisions.
In addition to the periods mentioned, the main Group companies are open to inspection for the following taxes
and periods:
92
(Thousand euro)
Tax
Fiscal years
Corporate Income Tax
Value Added Tax
Personal Income Tax
Other taxes
2009 to 2014
2009 to 2015
2011 to 2015
Last 4 years
As a result, among other things, of the different interpretations to tax legislation lends itself, additional liabilities
may be raised in the event of a tax inspection. The directors of the parent company consider, however, that
any additional liability that might be raised would not significantly affect these consolidated annual accounts.
29.
Dividends per share
No dividends have been distributed in 2014, nor proposed in 2015.
30.
Commitments, contingencies and guarantees provided
30.a) Commitments
Non-current assets purchase commitments
No significant commitments have been made to purchase non-current assets at the balance sheet date, other
than those required in the ordinary course of business.
Operating lease commitments
The Group leases a number of premises, offices and other property, plant and equipment under noncancellable operating leases. These leases contain variable terms, phase-related clauses and renewal rights.
The lease expenditure charged to the income statement during the year and information on future minimum
instalments is set out in Note 26.
30.b) Contingencies and guarantees provided
The Group has contingent liabilities in respect of bank guarantees and other guarantees provided in the
ordinary course of business. In accordance with its general terms of engagement, the Group is required to
provide technical guarantees in connection with the execution of projects. These guarantees may be provided
in cash or in the form of bank guarantees and must remain in effect for a specified period.
In the ordinary course of business, as is common practice in companies engaged in engineering and
construction activities, the Group furnished guarantees to third parties totalling 2,367 million euro (2014: 1,929
million euro) for the proper performance of contracts.
In addition, in the ordinary course of business and as is common practice wit the sector, wherte the Group
companies act as sponosrs during the construction phase of certain concession projects, the Group has
provided guarantees to certain project companies that form part of the subgroup IIN, for a total amount of 104
million euro (2014: 171 million euro). In addition, the Group have provided certain guarantees to Isolux Corsan
Aparcamientos, S.A. for a total amount of 70 million euro (2014: 70 million euro).
With respect to such guarantees, no additional significant liabilities are expected, other than those provided
for, as stated in Note 22.
Under the agreements reached with PSP in the business combination performed on 2012, the Group has
executed a series of guarantees in relation to certain losses sustained or incurred by IIN and subsidiaries as a
consequence, among other things of the fulfilment of concession project construction budgets, legal
proceedings, environmental aspects, tax contingencies or certain breaches of the EPCs agreed prior to the
shareholders' agreement signed in 2012. Additional liabilities could arise in the future as a result of significant
93
(Thousand euro)
departures relating to these commitments. These guarantees were cancelled upon the definitive conclusion of
the agreement concluded between the partners to terminate the joint arrangement (Note 9.1).
31.
Business combinations
During 2015 any business combination has taking place.
During 2014 the following business combinations took place:
a)
Isolux Corsán Aparcamientos, S.A. and subsidiaries
During July 2014 the Group signed an agreement with several investments funds acting in a coordinated
manner through Oak Hill Advisors, under which the investment funds undertook to invest in the form of senior
loans for up to a total of 100 million euro. These loans will be used to make new investments in the Group’s
car park business which is included in the subgroup of which Isolux Corsán Aparcamientos, S.A. is the parent.
At 31 December 2014 loans received amounted to 50 million euro. The remaining 50 million euro loans will be
withdrawed only once the initial 50 million euro investment is completed. At 31 December 2015 63 million
euro are disbursed. The purpose of this agreement is to group existing assets together with new assets and
subsequently after some time during which business is expected to improve, the intention is to sell the car
park business on a whole. The selling is expected to take place between October 1, 2019 and June 3, 2020.
The agreement between the parties provides how the funds will be distributed on the basis of the spelling
price obtained. Distribution of the funds to each one of the party will be variable depending on the selling price
obtained.
The agreements signed between the parties mean that although the new investors do not have an ownership
interest in the companies, key business decisions have to be taken jointly by the parties. Therefore Isolux
Corsán Aparcamientos, S.A. and its subsidiaries is considered to be a joint venture. This operation has been
recognised as a change of control with the application therefore of the accounting policies described in Note
2.2 Key business decision include amongst other, budget and business plan approvals, acquisition and
disposal of investment, dividend distribution, and of financial facilities withdrawing. In order to allocate the
acquisition cost, the estimated fair value of the assets, has been calculated on the basis of the future cash
flow discount method. As a result of this change of control, there are no significant impacts on the
consolidated income statement. In the consolidated cash flow statement, according to requirement of IAS 7,
the effect of scoping out of the consolidation perimeter is shown under the heading “Net cash variation due to
change in consolidation scope” within cash flow from investing activities, even though it is a non cash
transaction.
The following table summarises payments and provisional fair values of the assets acquired and liabilities
assumed at the acquisition date:
Non-current assets assigned to projects
Other non current assets
Non current bank borrowings
Other non current liabilities
Other current liabilities
Taxes payable
Total identifiable assets acquired and liabilities assumed
Non-Controlling interests
Total net assets
Thousand euro
6,003
259,257
12,406
12,097
(117,362)
(37,993)
(5,431)
(7,650)
121,327
(1,559)
119,768
The balance sheet at 31 December 2014 and 2015 and the income statement for 2015 and the period
between the change of control and 31 December 2014 are disclosed in Note 9 for the Isolux Corsán
Aparcamientos, S.A. subgroup.
94
(Thousand euro)
32.
Related-party transactions
Transactions with related parties during 2015 and 2014 form part of the Group’s ordinary course of business.
These transactions are described below:
a)
Transactions with the Company’s main shareholders
a.1)
Transactions with CAIXABANK
The Group only carries out banking activities with Caixabank. Set out below are the amounts and nature of
banking operations contracted at 31 December 2015 and 2014:
2015
Granted
Long-term loans –
Syndicated
Project finance
Mortgage loans
Bank guarantees
furnished
Factoring
Other loans
2014
Disposed
Granted
Disposed
61,136
61,136
55,058
55,058
67,942
57,593
75,997
65,516
98
98
327
327
182,000
167,820
171,264
171,264
15,000
15,000
-
-
-
-
3,600
3,600
In addition, the Group has numerous bank accounts in the ordinary course of business with Caixabank.The
Group manages a portion of its cash position by contracting financial assets through Caixabank. Income
statement for the period includes costs and income related to the transactions described above, which have
been performed under market conditions.
The Group has also contracted interest rate swaps with Caixabank to hedge the future changes in of the
Euribor, for a notional amount of 100,039 thousand euro (2014: 114,661 thousand euro), related to the
syndicated loan and specific project finance.
b)
Transactions with the Company’s Board of directors and management
b.1)
Information required by articles 229 to 231 of Spanish Company Act
Parent company´s directors have nothing to report pursuant to Articles 229 to 231 of Spanish Companies Act,
in relation to the obligation to be loyal, to avoid conflicts of interest and to refrain from competing with the
Company, except for the following offices and functions held and performed, and shareholdings owned with
respect to all Group companies at 31 December 2015:
•
Mr. Luis Delso Heras is a Board director of Ghesa, Ingeniería y Tenología, S.A., Cable Submarino de
Canarias, S.A., T-Solar Global, S.A.U (Chairman), Grupo T-Solar Global, S.A. (Chairman), Grupo
Isolux Corsán Concesiones, S.A. (Chairman), and Isolux Infrastructure Netherlands B.V.
His son, Mr. Alvaro Delso Ramírez del Molino, Director of Finance of Grupo Isolux Corsán, S.A.;
member of the Board of Directors of Corsán-Corviam Construcción, S.A.; and Isolux Ingeniería, S.A.
His daughter, Mrs Carmela Delso Ramírez del Molino, is a member of the Board of Directors of TSolar Global Operating Assets, S.L.
•
Mr. José Gomis Cañete is a Board member of Grupo Isolux Corsán Concesiones, S.A. (ViceChairman), Grupo T-Solar Global, S.A., and Isolux Infrastructure Netherlands, B. V.
His son, Mr. Alvaro Gomis Fernández, is a member of the Board of Directors of T-Solar Global
Operating Assets, S.L.
95
(Thousand euro)
•
Mr. Antonio Portela Álvarez is a Board director of Desarrollo de Concesiones y Servicios, Sercón,
S.A.(Chairman) , Isolux Corsan Aparcamientos, S.L (Chaiman), Grupo T-Solar Global, S.A., CorsánCorviam Construcción, S.A. (Chairman), Isolux Ingeniería, S.A. (Chairman), Grupo Isolux Corsán
Concesiones, S.A., and Isolux Infrastructure Netherlands, B. V.
Additionally, Mr Antonio Portela Alvarez holds shares in Infinita Renovables, S.A. (indirect interest of
less than 10% through other companies).
•
D. Francisco Francisco Moure Bourio is a Board director (Secretary) of PGP de Energía, S.A.
•
Hiscan Patrimonio, S.A.U., is a Board Member of Autovía del Camino, S.A.; Concessia, Cartera y
Gestión de Infraestructuras, S.L..; and it has a shareholding in Autovía del Camino, S.A.
•
Inversiones Corporativas Digitales, S.A. is a Board Member of Concessia, Cartera y Gestión de
Infraestructuras, S.A.”
The inclusion of the above information in the notes to the consolidated annual accounts of Grupo Isolux
Corsán, S.A. is the result of a detailed analysis of the information received from all the members of the Board
of Directors of Grupo Isolux Corsán, S.A., based on a teleological interpretation of Articles 229 to 231 of
Spanish Companies Act.
b.2)
Board of directors and Senior management of Grupo Isolux Corsán, S.A. benefits
Wages and salaries (including indemnities)
Per diems for attendance at Board meetings
2015
2014
7,414
962
5,667
660
8,376
6,327
In 2015 the heading wages and salaries includes severance payments totalling 1,366 thousand euro (2014:
none).
b.3)
Loans granted to Board of Directors
At 31 December 2015 there is any loan granted by the Group to members of the Board of Directors (2014: 5.4
million euro).
c)
Transactions with companies consolidated under the equity method
Transactions and balances with associates and joint ventures at 31 December 2015 and 2014 are analyzed
below:
Debtor
balances
Isolux Infrastructure subgroup
Isolux Corsán Aparcamientos subgroup
Creditor
balances
2015
Revenue /
Sales
Costs /
Purchases
228,130
125,045
3,360
222,882
-
-
21
2,785
96
(Thousand euro)
Debtor
balances
Isolux Infrastructure subgroup
Isolux Corsán Aparcamientos subgroup
Pinares del Sur, S.L.
Creditor
balances
180,990
206
17,588
-
2014
Revenue /
Sales
Costs /
Purchases
777
858
-
290,670
6,188
-
Transactions mentioned above were made under market conditions.
In the normal course of business activities, and as usual between the companies engaged in engineering and
construction activities, the Group has provided guarantees to joint ventures for a total amount of 120 million
euro (2014: 123 million euro) included within the amount disclosed in Note 30.b).
33.
Joint Operations
The Group has interests in the joint operations disclosed in Appendix IV. The amounts set out below
represented the Group’s share, based on its interest in the joint ventures, on assets, liabilities, revenue and
results of joint operations consolidated through the proportional method (see Note 2.2). These amounts are
included in the consolidated balance sheet and consolidated income statement:
Assets:
Non-current assets
Current assets
Liabilities:
Current liabilities
Net assets
Income
Expenses
Profit after tax
2015
2014
22,624
49,492
17,878
54,685
72,116
72,563
25,125
39,387
23,548
43,838
64,512
67,386
7,604
5,177
72,009
(64,924)
45,632
(49,921)
7,085
(4,289)
There are no contingent liabilities relating to the Group’s interests in las joint operations or contingent liabilities
recognized by the joint operations themselves.
97
(Thousand euro)
34.
Temporary joint ventures (UTEs) and consortia
The Group has interests in the UTEs disclosed in Appendix V. The amounts set out below represent the
Group’s share, based on its interests in the UTEs, of assets, liabilities, revenue and results. These amounts
are included in the consolidated balance sheet and consolidated income statement:
Assets:
Non-current assets
Current assets
Liabilities:
Current liabilities
Net assets
Revenue
Expenses
Profit after taxes
2015
2014
3,280
876,415
1,467
794,368
879,695
795,835
144
786,874
148
730,104
787,018
730,252
92,677
65,583
1,082,219
(989,542)
613,570
(547,987)
92,677
65,583
In addition, at 31 December 2015 and 2014 the Group holds shares in several consortia. The following
amounts have been recorded in the consolidated balance sheet and consolidated income statement:
Assets:
Non-current assets
Current assets
Liabilities:
Current liabilities
Net assets
Revenue
Expenses
Profit after taxes
2015
2014
15,056
353,440
7,988
340,577
368,496
348,565
2,864
334,129
2,603
374,358
336,993
376,961
31,503
(28,396)
178,282
(146,779)
199,682
(228,078)
31,503
(28,396)
There are no contingent liabilities relating to the Group’s interests in UTEs / Consortia, or contingent liabilities
recognized by the UTEs / Consortia themselves.
35.
Environment
The Group has taken the necessary measures to protect and improve the environment and to minimize
environmental impact, if applicable, in compliance with current environmental legislation. Consequently, no
provision for environmental liabilities and charges has been deemed necessary and there are no
contingencies relating to environmental protection and improvement.
36.
Events after the reporting period
After the reporting period, no significant subsequent event exist that could impact these consolidated annual
accounts.
98
(Thousand euro)
37.
Auditors’ fees
The fees accrued by PricewaterhouseCoopers Auditors, S.L. for audit services rendered during 2015 amount
to 1,143 thousand euro (2014: 1,091 thousand euro).
Fees accrued by PricewaterhouseCoopers Auditores, S.L. for other services rendered during 2015 amount to
829 thousand euro (2014: 864 thousand euro). Fees accrued by other companies operating under the
PricewaterhouseCoopers brand for audits and other services rendered in Spain during 2015 amount to 338
thousand euro (2014: 356 thousand euro).
Fees accrued by other companies operating under the PricewaterhouseCoopers brand for audits and other
services rendered abroad during 2015 amount to 822 thousand euro and 195 thousand euro respectively
(2014: 790 thousand euro and 143 thousand euro respectively).
The fees accrued by other auditors for audit services rendered and other services during 2015 amount to 260
thousand euro and 534 thousand euro respectively (2014: 150 thousand euros and 301 thousand euro
respectively).
99
Appendix I
Subsidiaries included in the Consolidation Scope
Company name
Address
% of interest
Isolux Ingeniería, S.A.
Watsegur, S.A.
GIC Fábricas, S.A.
Eólica Isolcor, S.L.
Luxeol, S.L.
Desarrollos de Ingenieria Iguarán S.A.
Isolux Eólica, S.A
Isolux Corsán, LLC
Isolux Corsan Construction, LLC
Isowat Mozambique, Lda.
Isolux Maroc, S.A.
Agua Limpa Paulista, S.A
Isolux Corsán Polonia Sp Zoo
Isolux Corsan Puerto Rico, LLC
Energia Huasteca, S.A. de C.V.
Construcciones e Instalaciones del Noreste S.A. de C.V
Isolmex, SA de CV
Tecna Estudios y Proyectos de Ingeniería, S.A.
Tecna Proyectos y Operaciones, S.A.
Latintecna, S.A.
Madrid
Madrid
Madrid
Madrid
Madrid
Aviles
Madrid
Houston
Canada
Maputo
Casablanca
Sao Paulo
Warsaw
Puerto Rico
México DF
México DF
México DF
Buenos Aires
Madrid
Lima
Sta.Cruz de la
Sierra
Mexico DF
Rio de Janeiro
Quito
Caracas
Al Khobar
Luanda
Bogota
Madrid
Madrid
Rio de Janeiro
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
100.00%
100.00%
100.00%
100.00%
70.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
40.00%
100.00%
100.00%
100.00%
100.00%
100.00%
75.00%
74.99%
74.97%
Grupo Isolux Corsán, S.A.
Isolux Corsán, LLC
Tecna Estudios y Proyectos S.A.
Tecna Proy. y Operaciones, S.A.
67.49%
74.99%
71.24%
74.99%
74.96%
36.75%
74.99%
74.99%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
97. 76%
100.00%
Tecna Proy. y Operaciones , S.A.
Isolux Wat Ingeniería, S.L.
Powertec Española, S.A.
Isolux Corsán Servicios, S.A.
Isolux Corsán Servicios S.A.
Global Vambru, S.L.U.
Tecna Bolivia, S.A.
Tecninct Proyectos e Ingeniería S.A. de C.V.
Tecna Brasil Ltda.
Medianito del Ecuador, S.A.
Ven Tecna, S.A.
Tecna Arabia
TPYC Angola, S.A.
Tecna Ingeniería y Construcciones, S.A.S.
Powertec Española, S.A.
Powertec Proyectos e Obras Ltda.
Isolux Corsán Servicios S.A.
Ambulux, S.L.
Aguas de Gata, S.L.
Grupo Isolux Corsán Concesiones, S.A.
Desarrollo de Concesiones y Servicios Sercon, S.A.
Shareholder
Consolidation
Method
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
Activity
Auditor
Engineering
Engineering
Engineering
Engineering
Concessions
Engineering
Engineering
Engineering
Construction
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Construction
Engineering
Engineering
Engineering
Engineering
Engineering
PwC
PwC
PwC
Unaudited
Unaudited
Unaudited
Unaudited
PwC
Unaudited
Unaudited
PwC
PwC
Unaudited
Unaudited
Unaudited
PwC
Unaudited
PwC
PwC
Other
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Engineering
Concessions
Services
PwC
PwC
E&Y
Other
Unaudited
Other
Deloitte
Unaudited
Unaudited
Unaudited
Unaudited
PwC
Unaudited
Unaudited
Unaudited
PwC
Unaudited
100
Appendix I
Company name
Instalaciones y Montajes La Grela, S.A.
Corsan-Corviam Construcción, S.A.
Extremeña de Infraestructura, S.A.
Inversiones Blumen, S.L.U.
Tenedora de Acciones de Generadora Electrica
Molloco, SAC
Generadora Electrica Molloco, SAC
Corsanmex, S.A. de C.V
Isolux Corsán Cyprus Limited
Isolux Corsán Panamá, S.A.
Isolux de México, S.A. de C.V.
Isolbaja, S.A. de C.V.
Constructora Presa El Purgatorio SPU, S.A. de C.V.
Isolux Corsán Argentina S.A.R.L.
Isolux Corsán Argelie, SARL
Isolux Corsán do Brasil S.A.
Isolux Projectos, Investimentos e Participações LTDA
Isolux Projectos e Instalaçoes, LTDA.
Isolux Corsán India Engineering & Constuction Private
LTD.
Corsan Corviam Asia Projects
Infrainter Infraestructuras Internacionales, SA
Isolux Corsán Inmobiliaria, S.A.
Valdelrío, S.L.
Electrónica Control de Motores, S.A.
Julitex, S.L.
El Sitio de la Herrería, S.L.
Interisolux Torrejón Vivienda Joven, S.L. (*)
Interisolux Alcorcón Vivienda Joven, S.L.
Olmosa, S.L.
Isolux Corsán Global Assets, S.L. (1)
Las Cabezadas de Aranjuez, S.L.
Unidad Mater. Avanz. Ibérica, S.A.
Azul de Cortes, B.V.
Azul de Cortes, S. de R.L, de C.V.
Bendía, S.A.
EDIFISA, S.A.
Corvisa, productos asfálticos y aplicaciones, S.L.
Address
% of interest
A Coruña
Madrid
Madrid
Madrid
100.00%
100.00%
100.00%
100.00%
Corsán Corviam Construcción, S.A.
Peru
Peru
Mexico DF
Nicosia
Ciudad de Panamá
Mexico DF
Mexico DF
Mexico DF
Buenos Aires
Algeria
Rio de Janeiro
Sao Paulo
100.00%
75.00%
100.00%
100.00%
100.00%
100.00%
98.00%
98.00%
100.00%
100.00%
100.00%
100.00%
Rio de Janeiro
100.00%
Inversiones Blumen, S.L.U.
Corsán-Corviam Construcción, S.A.
Isolux Projectos, Investimentos e Participações
LTDA
Haryana
Uzbekistan
Ecuador
Madrid
Madrid
Madrid
Las Palmas
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Orense
Vigo
Amsterdam
Mexico DF
Madrid
Madrid
Madrid
100.00%
100.00%
99.95%
100.00%
100.00%
100.00%
80.00%
100.00%
100.00%
80.00%
100.00%
100.00%
100.00%
100.00%
80.70%
100.00%
100.00%
100.00%
96.00%
100.00%
Shareholder
Azul de Cortes BV
Consolidation
Method
FC
FC
FC
FC
FC
Activity
Auditor
Engineering
Construction
Construction
Construction
Construction
Unaudited
PwC
Unaudited
Unaudited
Unaudited
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Construction
Unaudited
Unaudited
Unaudited
Unaudited
PwC
Unaudited
Unaudited
PwC
PwC
Unaudited
Unaudited
FC
Construction
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
Construction
Construction
Real-estate
Real-estate
Real-estate
Real-estate
Real-estate
Real-estate
Real-estate
Real-estate
Real-estate
Real-estate
Engineering
Energía Renovable
Real-estate
Real-estate
Engineering
Real-estate
Construction
Unaudited
PwC
Unaudited
Unaudited
PwC
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
PwC
Unaudited
PwC
Unaudited
Unaudited
PwC
101
Appendix I
Company name
Powertec Catalunya, S.A.U.
Powertec Sistemas Energéticos, S.A.U.
Acta – Actividades Eléctricas Asociadas, S.A.
Isolux Corsan Gulf LLC
Isolux Corsán Energías Renovables, S.A.
Isolux Corsán Arabia Saudí, LLC
Parque Eólico Loma Blanca II, S.A.
Parque Eólico Loma Blanca I, S.A.
Parque Eólico Loma Blanca III, S.A.
Grupo Isolux Corsan Finance, B.V.
Corsan Corviam Colombia, SAS
Tenedora De Acciones De Lineas De Transmision
Peruanas, SAC
Lineas De Transmision Peruanas, SAC
Isolux Ingenieria, GK
Isolux Ingenieria, Ltd
Isolux Corsan RDC, SARL (*)
Linhas de Laranjal Trans. Energia, Ltda (*)
(*)
(1)
FC:
Address
% of interest
Madrid
Madrid
Lisboa
Oman
Buenos Aires
Riyadh
Buenos Aires
Argentina
Argentina
Amsterdam
Colombia
100.00%
100.00%
100.00%
70.00%
100.00%
99.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Corsan-Corviam Construcción, S.A.
Peru
100.00%
Isolux Ingeniería S.A.
Tenedora De Acciones De Lineas De Transmision
Peruanas, SAC
Isolux Projetos e Instalaçoes, LTDA.
Peru
Japan
Ruanda
Congo
Brazil
100.00%
100.00%
100.00%
100.00%
100.00%
Shareholder
Consolidation
Method
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
FC
Activity
Auditor
Engineering
Engineering
Engineering
Engineering
Concessions
Construction
Engineering
Engineering
Engineering
Other
Construction
Engineering
Unaudited
Unaudited
Other
Unaudited
KPMG
Unaudited
PwC
PwC
PwC
PwC
Unaudited
FC
Engineering
Unaudited
Unaudited
FC
FC
FC
FC
Engineering
Engineering
Engineering
Engineering
Unaudited
Unaudited
Unaudited
Unaudited
Companies acquired or incorporated during the year and/or additional investment in companies already included in the consolidation scope in the previous year. The incorporation of these
companies in the scope did not generate additional sales this year.
Company name changed during the year (before Cost Wright SL)
Full consolidation method.
102
Appendix II
Associates included in the consolidation scope
Company name
Gestión de Partícipes de Bioreciclaje, S.L.
Autopista Madrid Toledo Concesionaria, S.A.
Proyectos Inmobiliarios Residenciales, S.L.
Albali Señalización, S.A.
Ferrocarriles Interurbanos, SA de CV
Adress
Cadiz
Madrid
Madrid
Madrid
Mexico
% of
interest
33.33%
25.50%
25.60%
7.50%
20.88%
Share holder
Isolux Ingeniería S.A.
Consolidation
method
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Real-estate
Engineering
Construction
Other
Other
Unaudited
Other
Unaudited
EC: Equity consolidation method.
103
Appendix III
Joint ventures included in the consolidation scope
Company name
Address
% of interest
Shareholder
Isolux Corsán Aparcamientos, S.A.
Aparcamientos IC Talavera II, S.L.
Aparcamientos IC Segovia II, S.L.
Aparcamientos IC Ruiz de Alda S.A.
Explotaciones Las Madrigueras, S.L.
Aparcamientos IC Zaragoza Torrero, S.L.
Isolux Corsán Aparcamientos Madrid, S.A.
I.C. Plaza de Benalmádena Canarias
Aparcamiento Nuevo Hospital de Burgos, S.L.
Hixam Gestión de Aparcamientos, S.L.U.
Aparcamientos IC Gomez Ulla, S.L.
Ceutí de Aparcamientos y Serv., S.A.
Aparcamientos IC Zaragoza, S.L.
Aparcamientos IC Talavera, S.L.
Aparcamientos Islas Canarias, S.L.
Gestión de Concesiones, S.A.
Aparcamientos IC Toledanos, S.L.
Aparcamientos Segovia, S.L.
Hixam Gestión de Aparcamientos II, S.L.
Aparcamientos IC Toledanos II, S.L.
Aparcamientos IC Ponzano, S.L.
Aparcamientos IC Hospital de Murcia, S.L.
Aparcamientos IC Chiclana, S.L.
Aparcamientos IC Córdoba, S.L.
Aparcamientos IC Valladolid, S.L.
Parking Pio XII, S.L.
Aparcamientos IC Sarrión
Emiso Cádiz S.A.
Aparcamientos Los Bandos Salamanca, S.L
IC Aparcamientos activos, S.L.
Inversiones Pallas, S.L.
Compañía Concesionaria Baracaldo Parking
Juzgados, S.A.
Icapark I, S.A.
Icapark II, S.A.
Madrid
Madrid
Madrid
Madrid
Tenerife
Madrid
Madrid
Las Palmas
Madrid
Madrid
Madrid
Ceuta
Madrid
Madrid
Las Palmas
La Línea
Madrid
Segovia
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Palencia
Madrid
Cadiz
Madrid
Madrid
Madrid
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
70.00%
100.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
50.98%
50.00%
70.00%
100.00%
100.00%
Hixam Gestión de Aparcamientos II, S.L.U.
ICAPARK II, S.A.
Isolux Corsan Aparcamientos Activos, S.L.U
Madrid
100.00%
Isolux Corsan Aparcamientos Activos, S.L.U.
Madrid
Madrid
100.00%
100.00%
Isolux Corsan Aparcamientos, S.A.
ICAPARK I, S.A.
Consolidation
Method
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
PwC
Unaudited
Unaudited
PwC
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
PwC
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
PwC
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Other
Unaudited
Unaudited
PwC
Unaudited
Unaudited
EC
EC
Concessions
Concessions
PwC
PwC
104
Appendix III
Company name
Inversiones Estromboli, S.L.U.
Inversiones Filicudi, S.L.U
Inversiones Koronis, S.L.U
Inversiones Hildas, S.L.
Estacionamientos Granada, S.A. (*)
Inversiones Alicudi, S.L. (*)
Inversiones Atoko, S.L. (*)
Inversiones Leucade, S.L. (*)
Parkia Canarias, S.L.U. (*)
Isolux Corsán Concesiones, S.A.
Conc. Aut. Monterrey-Saltillo, S.A. de C.V.
Sociedad Concesionaria Autovía A-4 Madrid
S.A.
Isolux Corsán Concesiones de
Infraestructuras, S.L.U.
Linhas de Xingu Transmissora de Energía
Ltda. (*)
Linhas de Macapa Transmissora de Energía
Ltda. (*)
Isolux Energia e Participações S.A.
Vias Administración y Logística, S.A. de C.V.
Isolux Corsán Mexicana de Infraestructuras,
S.L.U.
Isolux Corsán Concesiones de México, S.A. de
C.V.
Isolux Corsán Brasileña de Infraestructuras,
S.L.U.
Cachoeira Paulista T. Energia S.A.
Jauru Transmissora de Energía S.A.
Concesionaria Autopista Perote - Xalapa S.A.
de C.V.
Soma-Isolux NH One Tollway Private Limited
Inteligacão Eletrica Norte e Nordeste, S.A.
Viabahia Concessionaria de Rodovias, S.A. (*)
Soma Isolux Surat Hazira Tollway Private
Limited
Soma Isolux Kishangarh-Beawar Tollway
Private Limited
Wind Energy Transmission Texas, LLC.
Iccenlux Corp.
Consolidation
Method
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
PwC
EC
EC
Concessions
Concessions
PwC
PwC
78.96%
Isolux Corsán Mexicana de Infraestructuras, S.L.U.
Isolux Corsán Concesiones de Infraestructuras,
S.L.U.
EC
Concessions
PwC
Rio de Janeiro
76.51%
EC
Concessions
PwC
Rio de Janeiro
76.72%
EC
Concessions
PwC
Rio de Janeiro
Mexico DF
Madrid
78.96%
78.96%
78.96%
EC
EC
EC
Concessions
Concessions
Concessions
PwC
PwC
Unaudited
Mexico DF
78.96%
Isolux Energy Investments, SLUV
Isolux Corsán Mexicana de Infraestructuras, S.L.U.
S.L.U.
EC
Concessions
Unaudited
Madrid
78.96%
EC
Concessions
Unaudited
Rio de Janeiro
Rio Janeiro
Mexico DF
78.96%
26.32%
39.48%
S.L.U.
EC
EC
EC
Concessions
Concessions
Concessions
PwC
KPMG
PwC
Haryana
Sao Paulo
Sao Paulo
Haryana
48.17%
39.48%
72.78%
39.48%
Isolux Corsan NH1 Cyprus Limited
Isolux Corsán Participaçöes na Viabahía Ltda
EC
EC
EC
EC
Concessions
Concessions
Concessions
Concessions
Other
E&Y
E&Y
Other
Haryana
39.48%
EC
Concessions
Other
Austin
Delaware
19.74%
78.96%
Wett Holdings LLC
EC
EC
Concessions
Concessions
E&Y
E&Y
Address
% of interest
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
78.96%
Mexico DF
Madrid
78.96%
38.49%
Madrid
Shareholder
105
Appendix III
Consolidation
Method
EC
EC
Activity
Auditor
Concessions
Concessions
PwC
Other
EC
EC
EC
Concessions
Concessions
Concessions
Other
E&Y
Unaudited
EC
Concessions
Unaudited
39.48%
Indus Concessions India Private Limited
EC
Concessions
Other
Nicosia
Haryana
78.96%
78.96%
EC
EC
Concessions
Concessions
Other
Unaudited
Linhas de Taubaté Transmissora de Energía
Ltda.
ICC Sandpiper, B.V.
Rio de Janeiro
78.96%
Isolux Corsan Power Concessions India Private
Limited
EC
Concessions
PwC
Amsterdam
78.96%
EC
Concessions
E&Y
South East U.P. Power Transmission
Company Limited
Plena Operação e Manutenção de
Transmissoras de Energia Ltda
Operadora Autopista Perote - Xalapa, S.A. de
C.V.
Isolux Infra. Netherlands (Suc. España)
Linhas de Itacaiunas Trasmissora de Energia
LTDA
Isolux Corsán Participaçöes de Infraestrutura
Ltda
Isolux Corsán Participaçöes na Viabahía Ltda
ICCI USA Holding, LLC
Uttar Pradesh
78.96%
Isolux Corsan Concessions Infraestructure Holland,
B.V.
Mainpuri Power Transmission Private Limited
EC
Concessions
Other
Rio de Janeiro
78.96%
EC
Concessions
Unaudited
Mexico DF
39.48%
Isolux Corsán Concesiones, SA
EC
Concessions
PwC
Amsterdam
Spain
Brazil
78.96%
78.96%
78.96%
EC
EC
EC
Concessions
Concessions
Concessions
PwC
PwC
PwC
Spain
Sao Paulo
78.96%
78.96%
Isolux Corsán Concesiones, SA
Isolux Corsán Brasileña de Infraestructuras, S.L.
EC
EC
Concessions
Concessions
Unaudited
Unaudited
Sao Paulo
USA
78.96%
78.96%
EC
EC
Concessions
Concessions
Unaudited
Unaudited
USA
USA
USA
Vancouver
Madrid
Lima
78.96%
40.27%
40.27%
78.96%
69.76%
35.58%
Isolux Corsán Participaçöes de Infraestrutura Ltda
S.L.U.
ICCI USA Holding, LLC
ICCI Indiana Holding, LLC
I-69 Investment Partners, LLC
Grupo T-Solar Global, S.A.
EC
EC
EC
EC
EC
EC
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Somerset
Somerset
BDO
Unaudited
PwC
PwC
Company name
Address
% of interest
Indus Concessions India Private Limited
Isolux Corsan NH1 Cyprus Limited
Haryana
Nicosia
78.96%
78.96%
Isolux Corsan Concessions Cyprus Limited
Wett Holdings LLC
Isolux Corsan Power Concessions India
Private Limited
Isolux Corsan Concessions Infraestructures
Holland BV
Soma Isolux Varanasi Aurangabad Tollway
Private Limited
Isolux Corsan Energy Cyprus Limited
Mainpuri Power Transmission Private Limited
Nicosia
Delaware
Haryana
78.96%
39.48%
78.96%
Isolux Corsán Concessions Cyprus Limited
S.L.U.
ICC Sandpiper, B.V.
Iccenlux Corp.
Isolux Corsan Energy Cyprus Limited
La Haya
78.96%
Haryana
ICCI Indiana Holding, LLC
I-69 Investment Partners, LLC
I-69 Development Partners, LLC
ICCON Transmission Inc
Gts Majes, S.A.C.
Shareholder
106
Appendix III
Company name
ARRL (Mauritius) Limited
Astonfield Solar Rajasthan (Private) Limited
T Solar Cyprus Limited
T-Solar Global Operating Assets, S.L.
Tuin Zonne Origen, S.L.U.
Global Surya, S.L.U.
TZ Almodóvar del Río, S.L.U.
Ortosolar Promotor de Energías Renovables,
S.L.U.
Global Elefantina, S.L.U.
Tuin Zonne Solar, S.L.U.
T-Solar Autónoma S.L.U.
TZ Morón 2, S.L.U.
Ortosol Energía 1, S.L.U.
Pentasolar, S.L.U.
Pentasolar Talayuela 1, S.L.U.
Pentasolar Talayuela 2, S.L.U.
Pentasolar Madrigal 1, S.L.U.
Pentasolar Madrigal 2, S.L.U.
TZ Morita, S.L.U.
TZ Morita 1, S.L.U.
TZ Morita 2, S.L.U.
TZ Morita 3, S.L.U.
TZ Morita 4, S.L.U.
TZ Morita 5, S.L.U.
TZ Morita 6, S.L.U.
TZ Morita 7, S.L.U.
TZ Castillo de Alcolea, S.L.U.
TZ Castillo de Alcolea 1, S.L.U.
Address
% of interest
Shareholder
Bombay
New Delhi
Madrid
Madrid
Madrid
Madrid
Madrid
34.88%
34.88%
69.76%
35.58%
35.58%
35.58%
35.58%
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
35.58%
69.76%
35.58%
35.58%
69.76%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
Pentasolar, S.L.U.
Pentasolar, S.L.U.
Pentasolar, S.L.U.
Pentasolar, S.L.U.
TZ Morita, S.L.U.
TZ Morita, S.L.U.
TZ Morita, S.L.U.
TZ Morita, S.L.U.
TZ Morita, S.L.U.
TZ Morita, S.L.U.
TZ Morita, S.L.U.
Consolidation
Method
EC
EC
EC
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Mazars
Other
Unaudited
PwC
PwC
PwC
PwC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
PwC
Unaudited
PwC
PwC
Unaudited
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
107
Appendix III
Company name
TZ Archidona I , S.L.U.
Tuin Zonne Archidona 1, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza 1, S.L.U.
TZ Buenavista, S.L.U.
TZ Buenavista 1, S.L.U.
TZ Alcolea Lancha, S.L.U.
TZ Alcolea Lancha 1, S.L.U.
Tuin Zonne Veguilla, S.L. (*)
TZ Veguilla 1, S.L.U.
Tuin Zonne Los Mochuelos, S.L.U.
Address
% of interest
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
69.76%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
Shareholder
TZ Archidona I, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza, S.L.U.
TZ La Poza, S.L.U.
Tuin Zonne Veguilla, S.L.
Consolidation
Method
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
Unaudited
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
108
Appendix III
Company name
TZ Los Mochuelos 1, S.L.U.
Pensolar Pozohondo, S.L.U.
Pensolar Pozohondo 1, S.L.U.
Pensolar Pozocañada, S.L.U.
Pensolar Pozocañada 1, S.L.U.
Granadasolar E. Renovables, S.L.U.
Granadasolar Sigüenza 1, S.L.U.
Granadasolar Sigüenza 2, S.L.U.
Aspa Energías Renovables, S.L.U.
TZ La Seca 1, S.L.U.
TZ La Seca 2, S.L.U.
Tuin Zonne Medina, S.L.U.
Tuin Zonne Medina 1, S.L.U.
TZ El Carpio, S.L.U.
Elduayen Fotovoltaica, S.L.U.
P.S. Huerto Son Falconer, S.L.U.
Borealis Solar, S.L.U.
European Sun Park Arnedo, S.L.U.
Windmill Fotovoltaica, S.L.U.
Windmill Energie Alicante 1.2, S.L.U.
Yeguas Altas, S.L.U.
Address
% of interest
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
Shareholder
Tuin Zonne Medina, S.L.U
Consolidation
Method
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
109
Appendix III
Company name
Huerto Albercones, S.L.U.
Huerto Las Pesetas, S.L.U.
Huerto Cortillas, S.L.U.
Huerto Paniza, S.L.U.
Huerto Montera, S.L.U.
Parque Solar Saelices, S.L
Gts Repartición, S.A.C
Raggio di Puglia 2 S.R.L.
Astonfield Solar Gujarat (Private) Limited
Grupo T-Solar Global USA, INC
Grupo T-Solar Global USA, LLC
Solar Power Ventures, LLC (USA)
Sol Orchard Imperial 1, LLC
GTS Puerto Rico LLC
Solaner Puerto Rico One, LLC
GTS Puerto Rico Two LLC (USA)
Solaner Puerto Rico Two LLC (Puerto Rico)
Grupo T-Solar Australia Pty Ltd
GTS El Centro Equity Holdings
GTS El Centro Managing Member, LLC
Gts El centro Project Holdings, LLC
GTS Japan Co, Ltd.
Shizen Kankyo Systems Kabushiki Kaisha
Solar Farm Cunderin Pty Ltd.
Solar Farm Jurien Bay Pty Ltd.
Solar Farm Kellerberrin Pty Ltd.
Solar Farm Moora Pty Ltd.
Solar Farm Southerb Cross Pty Ltd.
Alqlunia 5, S.A.
Landscape Corsán, S.L.
Address
% of interest
Madrid
Madrid
Madrid
Madrid
Madrid
Madrid
Lima
Roma
New Delhi
Delaware
Delaware
Delaware
Delaware
Delaware
Puerto Rico
Delaware
Puerto Rico
Perth
California
California
California
Tokio
Tokio
Perth
Perth
Perth
Perth
Perth
Toledo
Madrid
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
35.58%
34.88%
69.76%
69.76%
41.86%
69.76%
69.76%
34.88%
69.76%
34.88%
69.76%
69.76%
69.76%
69.76%
69.76%
69.76%
48.83%
48.83%
48.83%
48.83%
48.83%
50.00%
50.00%
Shareholder
Grupo T-Solar Global USA, LLC
Gts El centro Project Holdings, LLC
GTS Puerto Rico LLC
GTS Puerto Rico LLC
GTS El Centro Managing Member, LLC
Grupo T-Solar Global USA, inc
GTS El Centro Equity Holdings
GTS Japan Co, Ltd.
Consolidation
Method
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
EC
Activity
Auditor
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Concessions
Real-estate
Real-estate
PwC
PwC
PwC
PwC
PwC
PwC
PwC
PwC
Other
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Other
Unaudited
(*)
Companies acquired or incorporated during the year and/or additional investment in companies already included in the consolidation scope in the previous year. The incorporation of theses
companies in the scope of consolidation did not generate additional sales this year.
EC:
Equity consolidation method.
110
Appendix IV
Joint Operations included in the Scope of Consolidation
Company name
Lineas de Comahue Cuyo, S.A.
Indra Isolux de México S.A de C.V.
Constructora Autopista Perote Xalapa S.A. de C.V.
Eclesur, S.A.
Líneas Mesopotámicas S.A.
Líneas del Norte S.A.
Ciudad de la Justicia de Córdoba S.A.
Empresa Concesionaria Líneas Eléctricas del Sur,
S.A.
Partícipes de Biorreciclaje, S.L.
Bioreciclajes de Cádiz S.A.
Isonor Transmission S.A.C.
Caravelli Cotaruse Transmisora de Energía S.A.C.
Carreteras Centrales de Argentina, S.A.
Societat Superficiaria Preventius Zona Franca, S.A.
Isolux TVIG HW, LLC (*)
Consorcio Puente Bio Bio
Consorcio Puente Maule
Consorcio Linea 3
Engala Africa (PTY) LTD
Address
Buenos Aires
Mexico DF
Mexico DF
Buenos Aires
Buenos Aires
Buenos Aires
Sevilla
Buenos Aires
Madrid
Cadiz
Lima
Lima
Buenos Aires
Barcelona
USA
Chile
Chile
Chile
South Africa
% of
interest
33.34%
50.00%
50.00%
50.00%
33.33%
33.33%
48.75%
44.25%
33.33%
32.66%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
33.33%
50.00%
Shareholder
Corsán Corviam Construcción S.A.
Isolux Corsan Servicios, S.A.
Partícipes de Biorreciclaje, S.L.
Isonor Transmisión S.A.C.
Corsan Corviam Construccion, S.A.
Corsan Corviam construcción, S.A.
Isolux Corsan LLC
Consolidation
Method
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
PC
Activity
Auditor
Engineering
Construction
Construction
Concessions
Engineering
Engineering
Construction
PwC
Unaudited
PwC
Unaudited
PwC
PwC
Unaudited
Unaudited
Engineering
Concessions
Concessions
Concessions
Concessions
Construction
Construction
Engineering
Concessions
Concessions
Concessions
Engineering
Other
Other
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
(*)
Companies acquired or incorporated during the year and/or additional investment in companies already included in the consolidation scope in the previous year. The incorporation of theses
companies in the scope of consolidation did not generate additional sales this year.
PC:
Proportional consolidation method.
111
GROUP ISOLUX CORSÁN, S.A. AND SUBSIDIARIES AT 31 DECEMBER 2015
Appendix V
Temporary Joint Ventures (UTEs) and Consortia participated by companies included in the
Consolidation Scope
Joint ventures’ name
% of interest
% of interest
ABASTMENTO MELILLA
50.00%
UTE MONUM.HISTORICO
60.00%
UTE CBC
33.34%
UTE DCS R.TURBIO C&S
50.00%
UTE JUCAR VINALOPO
33.33%
UTE AVE PORTO-MIAMAN
75.00%
FFCC EL PORTAL UTE
70.00%
SANEA.CASTRILLON UTE
55.00%
UTE RSU BARBATE
100.00%
C.HIDROGENO PUERTOLL
50.00%
UTE EDAR LA LINEA
50.00%
TOLOSA-HERNIALDE UTE
90.00%
UTE A357 DES CARTAMA
60.00%
UTE RMS AER.SANTIAGO
50.00%
A-312 VTE LINARES
50.00%
UTE CEUTA APARCAM.
50.00%
UTE-AT MADRID TOLEDO
36.00%
UTE CHUAC
50.00%
A-316 DESDOB MARTOS
FFCC OSUNA
AGUADULCE
50.00%
CONSERV.CIUDAD REAL
50.00%
50.00%
UTE ISOLUX PUERTOLL.
50.00%
EMERG.QUIEBRAJANO
50.00%
ACONDIC.LOS RODEOS
70.00%
ABAST.OCCID.ASTURIAS
80.00%
CARCEL DE MENDOZA
50.00%
ABASTECIMIENTO OVIED
100.00%
90.00%
UTE ACCESO CORUÑA
50.00%
COMISARIA TARRAGONA
MERCADO DE
TARRAGONA
M-501 PANTANOS
50.00%
UTE PALENCIA
50.00%
UTE COIN CASAPALMA
50.00%
MEJORAS TENERIFE SUR
50.00%
HOSPITAL DE BURGOS
10.00%
UTE HOSPITAL DEL SUR
40.00%
UTE ABASTEC.LERIDA
70.00%
UTE AER.TENERIFE SUR
50.00%
UTE AITREN.SUPLIDOS
20.00%
UTE PUERTO MIÑO
85.00%
UTE HOSPITAL MILITAR
57.00%
EDIF.MUTUA MADRILEÑA
50.00%
LINEA AVE CAMPOMANES
50.00%
UTE TELECONTR.EDARES
60.00%
UTE HOSPITAL MILITAR
43.00%
U.T.E. EDISON
50.00%
UTE L5 HORTA
40.00%
UTE COMPOST.ARAZURI
50.00%
AUTOV.CONCENTAI.MURO
50.00%
UTE VICOTEL
50.00%
INTERC.ARCO TRIUNFO
65.00%
ELORRIO-ATXONDO UTE
65.00%
SAN.Y ABAST.CHICLANA
50.00%
HOSPITAL DE PARANA
50.00%
UTE U 11 SAN LAZARO
70.00%
UTE EDAR LAGARES
25.00%
HOSP.PARAPLEJ.TOLEDO
50.00%
UTE EDAR LAGARES
25.00%
UTE PRESA SANTOLEA
50.00%
UTE TENIENTE RUIZ
50.00%
UTE PARAPL.TOLEDO IN
30.00%
UTE PLISAN
50.00%
UTE AVE TRINIDAD
33.34%
UTE PARAMO BAJO
55.00%
UTE PZA SUR DELICIAS
50.00%
SALAVE UTE CONSTRUC.
25.00%
UTE MACEIRAS REDONDE
50.00%
UTE TUNEL CORNO
70.00%
ABASTECIMIEN.OROPESA
70.00%
UTE EDAR MALPARTIDA
99.99%
AUTOV IV CENTENARIO
70.00%
ZIZURKIL-ANDOAIN UTE
18.50%
VIA PRAT LLOBREGAT
25.00%
UTE SECOM
36.78%
UTE ABAST.OROPESA
30.00%
UTE NEA SUR
25.00%
99.90%
112
Appendix V
% of interest
% of interest
UTE ARITZETA
50.00%
FO NEA SUR - INSTAL.
25.00%
BALAZOTE UTE
75.00%
CONSERV.CTRAS.MA-OE
70.00%
UTE REDES BCN
50.00%
UTE ELECTRICAS MOGAN
50.00%
UTE PRESA HORNACHUEL
50.00%
INTERC.CHOELE CHOEL
50.00%
UTE CABREIROS
70.00%
GASEODUCTO HOSPITAL
50.00%
LOMA LA LATA - OFF
75.00%
UTE TUNELES DE MOGAN
33.33%
REGADIO DURATON UTE
50.00%
VERTEDERO SEGOVIA
50.00%
UTE 3 EDAR SESEÑA
49.50%
AVE URZAIZ-SOUTOMAIO
50.00%
UTE DEP.SESEÑA BOROX
UTE REGADIOS
BALAZOTE
49.50%
UTE CATENAR. DURANGO
50.00%
25.00%
UTE OAMI ALICANTE
33.33%
CTRA.LEÓN CEMBRANOS
65.00%
UTE EDAR NERJA-CONS.
50.00%
UTE REGADÍO DURATON
50.00%
UTE EDAR NERJA,ING.
50.00%
UTE PTO.RICO-MOGAN
30.00%
UTE OLMEDO ZAMORA
40.00%
NUEV.APOY T.BARC UTE
75.00%
SALAVE UTE MANTENED.
25.00%
RIO TURBIO SUC.GRUPO
9.00%
UTE RED ENTRE RIOS-C
20.00%
UTE EDAR TOMELLOSO
90.00%
UTE RED ENTRE RIOS-I
20.00%
UTE RIO TURBIO OFF
91.00%
CIE.CICLO ENARSA OFF
50.00%
RIO TURBIO SUC.INGEN
91.00%
UTE EDAR SALAMANCA
65.00%
CERCANIAS PINTO UTE
40.00%
UTE MTTO.POLIC.VASCA
50.00%
UTE ARCO TRIUNFO
35.00%
UTE CAP LA MINA
55.00%
UTE ACCESO T-SUR BCN
25.00%
UTE AYTO.MORALEJA
60.00%
UTE IDAM MONCOFA
40.00%
TUNEL CORNO IZDA.
70.00%
UTE IDAM MONCOFA C-C
5.00%
CONSER.CTRAS.EXTREMA
50.00%
ACTUAC.MEDIAMBIE.AVE
33.34%
UTE MESAVE
40.00%
UTE LAVACOLLA AER.SA
55.00%
ET PUERTO MADRYN
50.00%
QATAR GTC 144B 2006
100.00%
UTE AYTO. JARAIZ
100.00%
UTE PLANTA ALGAR
99.00%
UTE ISOLUX ARIAS
60.00%
UTE REMODELAC.L3 TMB
40.00%
AMPLIACION EDAR LEON
75.00%
AUT A4 TRAMO MADR R4
50.00%
63 VIV.EN HOSPITALET
65.00%
AUTOVÍA ARANDA
70.00%
UTE AVE VAR.PAJARES
50.00%
UTE FUENTE DE PIEDRA
70.00%
REH.FABRICA TABACOS
70.00%
UTE CORIA-MORALEJA
60.00%
UTE SUBESTAC.PAJARES
50.00%
UTE AP7 MAÇANET
55.00%
UTE PRESA ALMUDEVAR
30.00%
UTE AVELE INFRA.TRAN
28.00%
VIAL CONEXION S-20
50.00%
UTE AVELE 2 INFRA.TR
28.00%
UTE CORREDOR 3 HILOS
22.00%
BLOQ.OBSTETRICO HOSP
20.00%
TRAVIESAS UTE BURGOS
50.00%
UTE INECAT
39.25%
BOMBEO BOLUETA-CONS.
37.50%
UTE VIA SAGRERA
50.00%
BOMBEO BOLUETA -ING.
22.50%
SEDE ADMIN.HOSPITAL
LOS BANDOSSALAMANCA
57.00%
EDIF.CIUDAD JUSTICIA
65.00%
98.78%
COLECTORES BOADILLA
50.00%
UTE ENLACE MEIRAS
50.00%
COLECTORES BOADILLA
50.00%
CENTRAL ENARSA - ON
50.00%
UTE ISAC ENTRE RIOS
33.35%
ACCESOS SOTO RIBERA
60.00%
LOMA LATA ON (Argen)
75.00%
113
Appendix V
% of interest
% of interest
UTE CAJA DUERO
50.00%
UTE DAROCA SEGUR.WAT
80.00%
REH.CUARTEL TTE.RUIZ
42.50%
UTE DAROCA SEGUR.ING
20.00%
3M APARCAM. CEUTA
42.50%
33.35%
UTE DCS LOMA LA LATA
50.00%
ISAC ENTRE RIOS IISA
EDAR PALOMARESCONST
UTE CAJA DUERO (50%)
50.00%
EDAR PALOMARES -ING.
50.00%
UTE ELECTR.PARAPLEJ.
99.00%
TRAVIESAS-UTE MERIDA
50.00%
UTE ENARSA OFF
50.00%
TRAVIESAS-UTE MURCIA
50.00%
UTE EDAR LA CHINA
50.00%
EDAR TOMELLOSO-0011
50.00%
CSIC EN LA CARTUJA
70.00%
EDAR TOMELLOSO-0044
50.00%
UTE ARQUITECTURA L-5
43.50%
EDAR VALDEPEÑAS-0011
50.00%
AMP.HOSP.GUADALAJARA
50.00%
EDAR VALDEPEÑAS-0044
50.00%
HOSPITALIZACION
60.00%
UTE EXPL.VIELHA-0011
50.00%
UTE PLTA.COMPRESORA
50.00%
UTE EXPL.VIELHA-0044
50.00%
UTE SEDE HOSP.MILIT.
43.00%
UTE ABLANEDA
50.00%
UTE CSIC LA CARTUJA
30.00%
ETAP ABLANEDA 0044
50.00%
UTE HOSPITALIZACION
40.00%
UTE GRIERSON
50.00%
EUBA-IURRETA UTE
RONDA POCOMACOCORUÑ
50.00%
CARCEL DE AGOTE
50.00%
80.00%
MTTO. C.P.CEUTA-0011
70.00%
UTE LOECHES
50.00%
UTE MTTO.CP.CEUTA-30
10.00%
C.PENITENCIAR.CEUTA
70.00%
UTE MTTO.CP.CEUTA-44
20.00%
AZUCARERA PRAVIA UTE
60.00%
UTE 3 HILOS MURCIA
50.00%
UTE MTTO.EDIF.XUNTA
70.00%
UTE SLURRY SOC. 0011
10.00%
UTE AVE PINAR II
64.29%
UTE SLURRY SOC. 0013
90.00%
FACULT.MEDICINA CTCS
50.00%
UTE GALERIA LANGOSTE
50.00%
RAMBLA ALBOX
70.00%
CONSTR.SUBEST.LINEAS
50.00%
UTE EL.PARAPLE.SERV.
1.00%
UTE BENIDORM:SUPLIDO
49.00%
UTE TUNEL BIELSA-INS
18.00%
SUPLIDOS UTE HOSPITA
40.00%
PRESA GUADALMELLATO
60.00%
UTE FLUMEN MODE
50.00%
UTE TUNEL BIELSA-22%
LOS BANDOSSALAMANCA
22.00%
UTE EMPALME MANACOR
30.00%
30.00%
UTE LIN.9 METRO BCN
20.00%
UTE TUNEL BIELSA-C&S
10.00%
UTE INTERCAM.SAGRERA
25.00%
UTE GERONA I
50.00%
UTE AERP.CIUDAD REAL
65.00%
LAV PINOS PUENTE-GR
80.00%
UTE JARDINES GERENA
50.00%
UTE C.PENITENC.CEUTA
10.00%
UTE EL MANCHON SUPL.
50.00%
UTE PENITENC.CEUTA
20.00%
UTE ATEWICC 3 SUPLID
33.34%
UTE AVICO - TTE.
33.34%
UTE MUNICIPIOS COSTE
20.00%
HOSP.GR.DE LAFERRERE
40.00%
UTE ARRIBES ABADENGO
50.00%
BALSA DE VICARIO
70.00%
UTE RSU SAN ROQUE
100.00%
UTE ZONA VERDE
60.00%
50.00%
114
Appendix V
Joint ventures´ name
Isolux Soma and Unitech JV
ICI –Soma Maharashtra CJV
C&C ICI Mep Services J.V.
Isolux - Man J.V. Uttar Pradesh
I.C.I. - C&C J.V. Uttar Pradesh
I.C.I. – C&C J.V. Mainpuri
I.C.I. - C&C J.V. Varanasi
I.C.I. C&C Transmission JV
I.C.I. C&C Execution JV
I.C.I & SOMA-ENTERPRISES LIMITED
Constructor Minuano
Consorcio Constructor Viabahia
Consorcio Constructor Puente Chilina
Consorcio Isolux-Tradeco-Tampa Tank
Isolux Ingenieria Sterling & Wilson Consortium
I.Ingenieria Sterlin & Wilson Consortium
Consorcio de los Cuatro Rios Cuenca
CCC Proj&sadbhav Rngin JV
Consorcio Medes-Isolux
Consorcio Paranaiba
Consorcio Grupo Isolux Corsán Engevix
Consorcio Araguaia – Isolux Corsán
Consorcio Grupo Isolux Corsán – Linha 15 Metro
Consorcio Grupo Isolux Corsán – Linha 17 Metro
Consorcio Grupo Isolux Corsán
Consorcio Const. Engevix Isolux Paranaiba
KAS Corsan Corviam, J.V.
CJV ICI & C&C (*)
% of interest
49.50%
50.00%
50.00%
99.99%
60.00%
100.00%
60.00%
60.00%
60.00%
50.00%
50.00%
70.00%
30.00%
44.50%
51.00%
70.00%
57.47%
60.00%
50.00%
50.00%
80.00%
99.00%
100.00%
100.00%
100.00%
50.00%
60.00%
74.00%
(*) Entities acquired or created during the year and/or additional stakes acquired in companies already included in the
scope of consolidation the previous year. The inclusion of these companies in the scope of consolidation did not
generate additional sales this year.
115
GRUPO ISOLUX CORSAN, S.A. AND SUBSIDIARIES
DIRECTOR´S REPORT 2015
1.
ENTITY’S POSITION
1.1. ORGANIZATIONAL STRUCTURE
At 31 December 2014, Grupo Isolux Corsán, S.A. (hereinafter, the Company) forms a group (hereinafter, the
Group) comprising the parent company Grupo Isolux Corsán, S.A. and its subsidiaries, joint ventures and
associates. In addition, the Group participates with other entities or members temporary joint ventures. Group
companies also hold interests of less than 20% in other entities over which they have no significant influence.
The Group develops its main activities in Spain, Latin America, Asia, Africa and North America.
Isolux, S.A., was founded in 1933 with a focus on energy transmission and generation. In 1991, Isolux, S.A.
merged with Wat, S.A., a company established in 1954 with a focus on engineering projects. The resulting
company, Isolux Wat, S.A., was specialized in a range of support and design services for projects and was
awarded its first highway concession, which was located in Spain. In 2000, Isolux Wat, S.A. was awarded its
first electric power transmission line, which was located in Brazil.
In 2005, Isolux Wat, S.A. expanded its presence both domestically and internationally through the acquisition
of Corsán Corviam, S.A., a leading Spanish construction company which was the result of the merger in 2000
of Corsán Empresa Constructora, S.A. (incorporated in 1928) and Corviam, S.A. (incorporated in 1962). The
resulting entity, Grupo Isolux Corsán, S.A., was the then largest non-listed engineering and construction group
in Spain in terms of revenue. Since our establishment, we have operated in the infrastructure and industrial
activities, energy and construction, and concessions businesses.
The Group mainly operates through the following business lines:
•
EPC (Engineering, Procurement and Construction), related mainly to the construction and engineering
projects under “turnkey contracts”, in the following businesses. Energy, Infrastructure and Transmission
& Distribution.
•
Concessions: the Group holds infrastructure concessions including motorways, high-voltage
transmission lines, solar-photovoltaic energy plants and car parks.
On 31 March 2015 the partners in the joint arrangement IIN agreed to separate, the primary aspects of their
agreement are as follows:
•
The partners agreed to engage an independent expert to determine the interest held by each partner
after the conversion of the aforementioned loan, as well as the resolution of other matters set out in the
original agreement concluded in 2012 (all for the purposes of appraising the businesses within the
framework of the separation from the joint arrangement), and to establish a step plan to be followed for
implementing the separation of the joint arrangement (including the process of obtaining the relevant
authorizations from the grantors, financing entities, regulatory authorities and other relevant parties).
•
The appraisal of the businesses prepared by an independent third-party was considered for the
purposes of the asset separation process.
•
The agreement stipulates that the Group will retain those companies whose businesses are related to
the operation of photovoltaicpower-generation plants and the concessions type agreement of highvoltage transmission lines (except the 50% interest held in the company owning the concession
agreement concerning the WETT high-voltage transmission line, which has been attributed to PSP in
accordance with an agreement reached by the parties during that separation process), whereas PSP
will retain the interest in the companies relating to the motorway infrastructure concessions (and the
aforementioned interest in WETT). The difference between the appraisal of the businesses retained by
each of the partners and the total value based on the interest held by each one of them will be settled in
cash.
As a result of the work performed by the aforementioned independent expert, the conclusion reached in
September that, after the separation of the joint business, PSP would have to pay the Group a total of
approximately 303 million US dollars, adjusted by the transfers between the businesses that took place in
2015 that will be established after the end of the separation process. The Group has received an advance
payment from IIN totalling 105 US dollars and another advance payment from several entities totalling 132
million US dollars through factoring of the amount pending to be received.
1
Due to the fact that at 31 December 2015 not all of the authorizations required to complete the process had
been obtained, at that date the Group maintained its investment in IIN although it was classified as a noncurrent asset held for sale (together with the rest of the assets and liabilities associated with this transaction)
(Note 15), meeting the requirements established by IFRS 5.
Subsequent to the extinguishment, the Group will become the owner of the following concession assets:
Business
TL
Name
Share
100%
96.89%
Concessi
on period
/Duration
30
Initiati
on
2002
Integration
Method
FC
Situation
O
Brazil
30
2008
FC
O
Brazil
30
2008
FC
O
Country
Brazil
TL
LXTE – Xingu
TL
LMTE – Macapá
TL
TL
TL
JTE – Jaurú
LTTE- Taubaté
50%
33%
100%
Brazil
Brazil
Brazil
30
30
30
2007
2007
2011
PC
PC
FC
O
O
C
100%
Brazil
30
2013
FC
C
TL
Uttar Pradesh
100%
India
2011
FC
C
PS
88%
Several
2008
FC
C/O
TL
97.16%
35 years
since
COD
Unlimited
FC: Full Consolidation method
TL: Transmission lines
C: Construction
O: Operation
1.2. OPERATION
The Group is organized in the following business areas:
A.
EPC
The EPC business is present in over 38 countries across the world and develops the following activities:
•
•
•
B.
T&D (Transmission and distribution): The Group provides the installation and maintenance of T&D
infrastructures (including high-voltage transmission lines and substations), a wide range of services,
including electrical, mechanical and special installations, railway electrification and signage, deployment
and maintenance of electrical and telecommunications networks, electromechanical installations for
airports and shipping, security and control systems, and industrial services and maintenance.
Energy: construction of thermal power generation plants (coal, liquid fuel and gas primarily), renewable
energies (solar photovoltaic and wind), oil&gas (focus mainly on upstream and midstream EPC projects,
both onshore and offshore).
Infrastructures: construction of roads, highways, railways, non-residential building and any type of civil
works (waste water treatment infrastructures, etc.)
CONCESSIONS
Our concessions division is organized in two separate sub-groups:
•
•
Isolux Infrastructure Netherlands, B.V.: this company through a number of project companies maintains
and operates three types of assets: (i) transmission lines, (ii) toll roads and (iii) solar photovoltaic
generation assets.
Isolux Aparcamientos: this company operates over 28,884 car park spaces in Spain.
2
C.
OTHER ASSETS AND CORPORATE
In addition to the corporate and headquarters costs, we include here other assets that are considered as noncore activities for the Group (i.e. Biodiesel plants, real estate and other assets which are held for sale, etc.).
Grupo Isolux Corsán is a leading EPC international contractor, with a strong market position. According to
ENR, we are the 10th largest international contractor in the power sector, 7th in the Latin America/Caribbean
area and 41st EPC contractor globally. We have maintained similar rankings in the previous years.
Our strategy is based on the following:
Expand our EPC activities and selectively enter new markets.
We intend to consolidate the current footprint of our EPC business, as well as to selectively enter new
markets, and to develop our business in growth areas such as energy. We intend to leverage our presence in
countries where we already operate and use our knowledge of local markets and potential synergies to
expand our operations in those countries and to expand to neighboring countries. We see opportunities in
markets with high GDP growth rates and strong demand for infrastructure, subject to the presence of a stable
legal framework and clients with strong credit standing. We prioritize U.S. dollar and euro denominated
contracts and advance payment practices. We also see opportunities in markets where there is a need to
expand current infrastructure or for the revitalization of obsolete facilities. In particular, we see the energy
sector as a key area of growth and intend to leverage our in house capabilities and experience in energy
generation and renewable energies.
Increase operational efficiency and financial flexibility.
We are committed to maintaining a sound capital structure and a strong liquidity position. We intend to
increase our financial flexibility through the sale of concession or other assets on an opportunistic basis, when
we deem market conditions to be appropriate. We also intend to access the global capital markets, as
appropriate and subject to market conditions.
EVOLUTION AND BUSINESS RESULTS
The accounting policies adopted in the preparation of the consolidated financial statements are consistent with
those applied in the preparation of the consolidated annual accounts for the financial year ended 31
December 2015, except for the application the new standards described below.
1.3. CHANGES IN ACCOUNTING POLICIES
In 2015 the Group applied the following new accounting principles (standards, amendments and
interpretations) that enter into force for all years starting on or after 1 January 2015:
•
IFRIC 21 “Levies”. This interpretation addresses the accounting treatment of taxes imposed by
governments other than income taxes, fines and penalties imposed for violations of the law. The
question is when the entity must recognise a liability for the obligation to pay a levy that is accounted
for according to IAS 37. It also addresses the accounting treatment of a liability for the payment of a
levy when the amount and due date are known.
•
Annual improvements to IFRS, 2011-2013. In December 2013, the IASB published the Annual
Improvements to IFRS for the years 2011-2013. The changes introduced by these Annual
Improvements generally apply to the fiscal years starting on or after 1 January 2015, although they



IFRS 3, “Business combinations”. Exclusion of joint ventures from the scope.
IFRS 13 "Fair value measurement". Scope of the "portfolio exception" available in IFRS 13.
IAS 40 “Real estate investments": Relationship between IAS 40 and IFRS 3 when a property is
classed as an investment property or owner-occupied property.
3
The application by the Group of the new legislation and previous amendement has not had a significant effect
on the consolidated financial statements.
1.4. CHANGES IN CONSOLIDATION SCOPE
•
•
Main incorporated companies: Inversiones Alicudi, S.L., Inversiones Atoko, S.L., Inversiones
Leucade, S.L., Linhas Laranjal, L.T.D.A, Parkia Canarias, S.L.U., Estacionamientos Granada, S.A.
Sale of the companies: Elaborados Metálicos EMESA, S.L., Sociedad Concesionaria Zona 8-A, S.A.,
Tecna del Ecuador, S.A. y del negocio conjunto Pinares del SUR, S.L.
According to 2014, the main consolidation scope difference in 2015 is the change of control of Isolux Corsán
Aparcamientos, S.A. y subsidiarias.
Discontinued operations and assets and liabilities held for sale
Before 2015, the Group approved the beginning of a sale process for the following activities and started to
classify these assests and liabilities as held for sale in the consolidated balance sheet.
•
Real estate business in Spain, which comprises Isolux Corsán Inmobiliaria, S.A. and its subsidiaries,
as well as certain real estate assets that are owned by Grupo Isolux Corsán, S.A., Corsán Corviam
Construcción, S.A. and Isolux Ingeniería, S.A. (the “Real Estate business”);
•
Água Limpa Paulista, S.A. (“Água Limpa”)
•
Isolux Corsán Energías Renovables, S.A. (“ICERSA”).
As a result of this decision, all the assets related to the abovementioned activities have been classified under
the heading “Non-current assets held for sale” in our consolidated balance sheet as of 31 December, 2014
and have measured them at the lower of (a) their book value and (b) their fair value less cost to sell. The book
value of the liabilities related to such assets has been classified under the heading “Long-term liabilities
related to assets held for sale.”
The real estate and other operating assets located in Latin America, which are classified as held for sale, have
been classified as such for more than twelve months but they have not been sold due to circumstances that,
at the time of classification, were either improbable or beyond the Group's control. However, the Group
remains firmly committed to the plan to sell these assets. They are being actively marketed and formal offers
have been received. The Group therefore believes that there is a very good chance that they will be sold in the
near future. In some cases, sales agreements have been signed and are pending authorisation from the
supervisory bodies or finalisation of the sales process.
Additionally, the real estate business activity qualifies as discontinued activity as required by IFRS 5.
Therefore, the results of operations of real estate activity in the consolidated income statement have been
classified under “Results for the year from discontinues operations” during the years 2015 and 2014.
The results of operations for the year 2015 and 2014 in Agua Limpia and ICERSA have not been classified as
discontinued operations because this assets does not meet the requirements for such classification.
As explained in Note 9, in 2015 the partners of the joint arrangement IIN decided to extinguish the agreement
and in exchange of the investment in the joint arrangement the Group will receive control over certain
businesses identified in that note. This investment is therefore included under the heading Non-current assets
held-for-sale at 31 December 2015.
At the date of preparation of these consolidated annual accounts considering the relevant authorizations, the
joint arrangement had not yet been received. Although, given the fact that the limited authorizations that have
yet to be received are of little importance, Group Management considers that this process will be completed
shortly. Once the authorizations are obtained the change in control will be effective in accordance with IFRS 3.
Management's preliminary estimates resulting from the change in control is an increase in the consolidated
group's assets, liabilities and equity totalling approximately 2,143 million euro, 1,834 million euro and 309
million euro, respectively. Furthermore, at the same date the items that at 31 December 2015 were recognized
4
under the headings Cumulative Translation and Hedging reserves with respect to the investment in IIN will be
recycled to 2016 results. The aforementioned figures are provisional and are subject to adjustments that could
arise in the final calculations once the change in control is completed.
This heading in the balance sheet at 31 December 2015 and 2014 breaks down as follows:
Non-current assets
Property, plant and equipment (Note 6)
Intangible assets (Note 7.2)
Investment property
Concessionary assets assigned to projects and other non-current assets
assigned to projects (Notes 8.1 & 8.2)
Investments in associates accounted for the equity method (Note 9)
Long-term credits and deferred tax assets
Deferred tax assets
Current assets
Inventories
Total assets
Bank borrowings
Project finance
Other payables and deferred tax liabilities
Current liabilities
Bank borrowings
Project finance
Total liabilities
31/12/2015
44,671
14,295
31/12/2014
44,939
1
14,413
91,799
858,912
31,307
5,033
1,046,017
81,410
5,605
5,400
7,275
159,043
158,130
120,885
2,314
281,329
1,327,346
168,255
49,600
2,704
220,559
379,602
50,070
92,525
2,667
8,277
153,539
38,104
100,385
2,459
9,095
150,043
4,767
5,920
256,454
20
267,161
420,700
6,318
12,168
4,004
20
22,510
172,553
In order to compare the carrying value of the assets against their fair value, the Group has estimated fair value
using appraisals prepared from independent experts in the case of the real estate activity in Spain, all of them
included in the Official Register of Bank of Spain. The appraisals have been issued accordig to different
valuation methods, such as residual dynamic method, cost method and comparative method, and have been
updated during the year 2015. The fair value of the businesses and other assets to be received as part of the
agreement signed by the partners with respect to the investment in IIN has been estimated by Group
Management and reviewed by independent experts.
Equity in the consolidated balance sheet at 31 December 2015 includes 280 million euro (2014: 7.1 million
euro) in accumulated differences on exchange that are related to non-current assets and liabilities held-forsale, 261 million euro belong to the investment in IIN. In hedging reserves there are 43 million euro related to
non-current assets and liabilities held for sale from IIN investment (2014: no credit).
Bank borrowings are secured by land and buildings valued at 17,580 thousand euro (2014: 17,880 thousand
euro). The secured debt balance amount to 2,679 thousand euro (2014: 3,579 thousand euro).
Inventories and investment properties include real estate developments totalling 97 million euro securing
financing received at 31 December 2015 (2014: 109 million euro). The balance of the secured debt amounted
to 36 million euro (2014: 38 million euro).
The heading "Trade and other payables" includes the advance payments received with respect to the
separation agreement of the partners of Isolux Infrastructure. On 31 March 2015 the first advance payment
from PSP in the amount of 105 million US dollar (approximately 97.8 million euro at the exchange rate as of
the date of receipt) was received based the signed contracts. On 5 September 2015 based on the conclusions
of the independent expert with respect to the transaction described in Note 9.1 resulting in a balance of 303
million US dollar receivable by the Group, from which the advance of 105 million US dollar payment must be
5
discounted, therefore pending approximately 198 million US dollar to be received after the separation process
and all adjustments arising from the transfer between the businesses will be completed. On 9 October 2015
the Group signed an advance collection agreement of 132 million euro with several financial entities, subject
to the definitive completion of the disinvestment operation. Based on the special nature of this agreement, it is
classified by the Group as "Other debt" under the heading "Trade and other payables".
Discontinued operations
Before 2015, the Group classified the property operation as discontinued activity in Spain.
Set out below is a breakdown of the results for the year from discontinuing operations for 2015 and 2014:
2015
2014
Sales revenue
(2,817)
5,581
1,014
(9,412)
(2,087)
267
(2,354)
(4,653)
3,745
89
(8,487)
(4,206)
(339)
(3,867)
Operating profit/(loss)
(4,904)
(8,859)
Share of investments accounted for the equity method (Note 9)
(4,342)
(4,519)
(2,113)
(1,081)
(13,765)
(12,053)
Profit before tax
Income tax (Note 28)
3,327
2,773
(10,438)
(9,280)
Attributable to:
Owners of the parent Company
7
(10,445)
(34)
(9,246)
(10,438)
(9,280)
Cash flows generated by discontinuing operations unit in 2015 and 2014 are analysed below:
Cash flows from Financing activities
2015
(2,367)
654
1,589
(124)
2014
(3,031)
1,803
1,257
29
6
1.5. MAIN FIGURES
Financial Data
-
Revenue of 2,189 million euro, increase of 2.9% compared to previous period.
EBITDA (*) of 176 million euro, decrease of 30.2% compared to previous period
(€ million)
Year 2015
Year 2014
Var %
Consolidated Income Statement
Revenue
2,189
2,128
2.9%
EBITDA
176
252
(30.2%)
Operating result
110
166
(33.7%)
Net result
(56)
(42)
(33.3%)
31.12.15
31.12.14
Var %
5,078
4,942
2.8%
119
365
(67.4%)
(€ million)
Consolidated Balance Sheet
Total Assets
Shareholder's equity
(*)EBITDA are the results for the year from continuing operations before Net financial results, Share of profit /
(loss) of investments accounted for the equity method, Change in trade provisions, Income tax, and
Depreciation, amortization and impairment losses.
Key indicatos by segment are as follows:
(€ Million)
Key indicators by
segment
Sales
Year 2015 Year 2014
EBITDA
Var %
Year 2015 Year 2014
EBITDA margin
Var %
Year 2015 Year 2014
2,161
2,097
3.1%
222
279
(20.4)%
10.3%
13.3%
870
657
32.4%
477
371
28.6%
54.8%
56.5%
24
27
n.a.
(46)
(30)
n.a.
n.a.
n.a.
Subtotal
3,055
2,780
9.9%
653
620
5.3%
21.4%
22.3%
Consolidation method
adjustments
(866)
(652)
n.a.
(477)
(369)
n.a.
n.a.
n.a.
Total consolidated
2,189
2,128
2.9%
176
252
(30.2)%
8.0%
11.8%
EPC
Concessions
Other, Corporate and
Consolidation
Adjustments
Operational data:
EPC business
In the year 2015, 85.2% of our EPC revenue came from international markets outside Spain.
The backlog of our EPC business amounted to 6,817 million euro as of December 2015.
7
Concessions
The following table details some operational data of our concessions portfolio:
Projects already in operations
Year 2015
3,637
Year 2014
3,637
Toll roads – (Km)
1,609
1,477
Solar PV – (MW)
254
254
28,884
26,103
Transmission lines – (Km)
Car parks – (Spaces)
Considering the effects of the separation from IIN and the consequent control change described in section 1.4,
the WETT transmission lines (605 km) and all roadway concessions (1609 km) will cease to be under the
Group's control.
1.6. Consolidated income statement
(€ million)
Year 2015
Year 2014
Var %
2,204
2,134
3.3%
(2,053)
(1,927)
6.5%
(41)
(41)
0%
110
166
(33.7)%
(237)
(206)
150%
43
26
-
(84)
(14)
-
39
(19)
-
Result for the year from continuing operations
(45)
(33)
-
Result for the year from discontinued operations
(11)
(9)
-
(56)
(42)
-
Operating income
Operating expenses
Operating results
Share of profit/(losses) of investments accounted for the equity
method
Net result before tax
Income tax
Operating results
Operating result as a percentage of operating income increased from 7.8% in the year 2014 to 5.0% in 2015,
due mainly to the negative impact of the macroeconomic situation in some of our primary markets such as
Brazil, there have been cancellations of significant contracts that gave rise to a negative impact on operating
income.
The decline in profits before taxes in 2015 compared to 2014 is due to the negative impact on operating profits
and also to the decline in financial income as a result of the increase in financial expense arising on
guarantees and factoring arrangements. The impact was partially offset by the improvement in the results
obtained by Isolux Infrastructure (which are shown under interests in the profits of equity-consolidated
companies).
8
1.7.
Segment results
EPC
EPC sales increased by 3.0% in 2015 compared with 2014, primarily due to the effect of changes in exchange
rates (positive impact by the Indian rupee, the US dollar and the Argentinean peso, partially offset by the
devaluation of the Brazilian real. The main projects that were completed during the year relate to roadway
projects in India, Armenia and Senegal and the solar energy plant in Honduras.
The negative development of EBITDA is highly impacted by the cancellation of significant projects in Brazil
and Chile.
Concessions
The income from the concession segment increased by 32.4% in 2015 compared with last year, due to the
annualized impact of the launch of the transmission assets in 2014 as well as the entry of several roadways in
India into operation. The income from the parking facility business also showed a significant increase due to
the entry of new assets into the scope of consolidation as a result of the agreement reached with an investor
in 2014.
The evolution of EBITDA during the year in absolute terms shows a notable increase, primarily in the
transmission line business, whose increase is due to the positive adjustment made to the financial model as a
result of the better inflation assumptions and the entry into operation of two roadways in India.
Other, corporate and consolidation adjustments
This segment also includes revenue and EBITDA generated by:
•
•
Biodiesel business Infinita.
Wind farm Loma Blanca.This asset is held for sale.
It also recognizes the operating cost of central services that have increased primarily due to the structural
expenses deriving from the opening of new markets/countries.
1.8.
Consolidated balance sheet
(Million €)
31.12.15
31.12.14
Var (%)
76
113
(32.7)%
Intangible assets and Goodwill
506
503
0.6%
160
152
5.3%
127
974
(87.0)%
337
289
16.6%
Other long term assets
37
123
(69.9)%
Total non-current assets
1,243
2,154
(42.3)%
243
253
(4.0)%
2,083
1,847
12.8%
-
2
n.a.
13
15
(13.3)%
Long term assets assigned to projects
Investments in associates accounted for the equity
method
Inventories
Trade and other accounts receivable
Financial assets at fair value through profit and loss
9
169
291
(41.9)%
1,327
380
249.2%
Total current assets
3,835
2,788
37.6%
Total assets
5,078
4,942
2.8%
Investments in associates accounted for the equity method as of 31 December, 2015 includes both Isolux
Infrastructure Netherlands, B.V, the holding company for the majority of our concessions, as well as our car
parks business. The decrease compared with the previous year is due to the investment in Isolux
Infrastructure Netherlands, B.V. being reclassified as an Asset held-for-sale.
Trade and other receivables: At 31 December 2015 the 12.8% increase compared with the end of last year
is due to the effect of a slowdown in the average collection period, as well as the amount withheld to secure
projects that were completed during the year.
Non-current assets held for sale: The increase is due to the inclusion of the assets relating to the
investment in Isolux Infrastructure Netherlands, B.V. which was reclassified to this heading at the end of the
year.
(Million €)
31.12.15
31.12.14
Var (%)
Share capital and reserves
135
372
(63.7)%
(16)
(7)
128.6%
119
365
(67.4)%
Shareholders' equity
Bank borrowings and senior notes
1,349
1,271
6.1%
Project finance
186
208
(10.6)%
Provisions for other assets and expenses
40
43
(7.0)%
72
43
67.4%
Other non current liabilities
31
85
(63.5)%
1,678
1,650
1.7%
Bank borrowings and senior notes
234
276
(15.2)%
Project finance
63
13
384.6%
2,481
2,355
5.4%
Provisions for other assets and expenses
44
74
(40.5)%
Other current liabilities
38
36
5.6%
421
173
n.a.
Total current liabilities
3,281
2,927
12.1%
Total equity and liabilities
5,078
4,942
3%
Total non-current liabilities
Liabilities and other payables
Bank borrowings: At 31 December 2015 bank borrowings increased as a result of the effect of the exchange
rate applicable to loans denominated in US dollars.
Project Finance: The increase during the year mainly relates to the Moyobamba Hydroelectric Plant in Peru
for a total of 30 million US dollars.
Liabilities and other payables: The 5.4% increase compared with the end of 2014 is mainly due to the
advance payments received with respect to the closing of Isolux Infra.
10
1.9.
Consolidated cash flow statements
(€ Million)
Year 2015
Year 2014
Profit/(loss) for the period before taxes
(97)
(25)
Adjustments for non-cash items
265
269
Changes in working capital
(248)
(110)
Taxes paid
(15)
(11)
(95)
123
-
(6)
Acquisition of concessionary assets and non-current assets assigned to projects
(40)
(34)
Other capital expenditure, net
215
(12)
3
4
178
(48)
Income/(reimbursement) of corporate debt, net
1
(671)
Income/(reimbursement) of project finance, net
9
6
(212)
(209)
-
840
(202)
(34)
Net cash generated from/(used in) operating activities
Changes in consolidation perimeter, net
Interest received and other finance income
Net cash generated from/(used in) investing activities
Interest paid
Proceeds from issuance of Senior Notes
Net cash generated from/(used in) financing activities
Our net cash generated in operating activities is (95) million euro in the year ended 31 December 2015. We
had net results for the period of negative by 97 million euro, which, after adjusting for non-cash items, changes
in working capital and taxes paid, amounted to 2 million euro, mainly due to the cancellations of projects in
Latin America.
The net cash generated on investing activities totalled 178 million euro during 2015, primarily due to the
positive effect of the early payments relating to the process of closing the Isolux Infrastructure joint
arrangement with the partner PSP. There have been cash outflows relating to investments made during the
year that were partially offset by interest received. The net change in cash due to changes in the scope of
consolidation relates to the non-monetary effect arising on the exit of the concession business led by Isolux
Infrastructure Netherlands, B.V. from the scope of consolidation.
Cash generated by financing activities is (202) million euro at 31 December 2015, primarily due to the
payment of 212 million euro in interest, which was partially offset by the net income from project finance
facilities.
11
1.10. Key financial and non-financial indicators
The main operational and financial indicators for the years ended December 31, 2015 and 2014 include:
(€ Million)
Year 2015
Year 2014
Corporate net debt
1,413
1,256
12.5%
Portfolio
6,817
7,107
(4.1)%
20.78%
16%
-
New contracts
2,453
3,344
(26.6)%
EPC Income
2,161
2,097
3.1%
“Book to bill” ratio
1.41x
1.59x
(11.3)%
Portfolio for concessions
Var (%)
1.11. Environmental and staff issues
a)
Environment
Our operations generally require us to obtain authorizations, permits and environmental licenses in the
different countries where we operate.
Isolux Corsán has the Corporate Environmental Management System which applies in all business areas and
in all countries in which it operates. The aim is to prevent contamination with the utmost respect and care for
the natural environment. In its Environmental Policy Group is committed to:
•
•
•
•
•
•
Develop and implement activities in environmental management systems in accordance with the
principles established in the international standard ISO 14001.
Establish and monitor compliance with environmental objectives and targets consistent with tis policy.
Ensure that these objectives and targets help to increase good behavior and effectiveness of
environmental management system.
Implement practices aimed at preventing and reducing pollution, minimizing the most significant
environmental impacts.
Comply with applicable environmental legislation and other requirements subscribed by the
company.
Periodically review this policy to maintain its alignment with the vision and strategic objectives of the
Management.
According to this methodology, Isolux Corsán identifies the environmental aspects associated with their
activity and objectively evaluates them by applying a standard for all business areas and all countries scale. A
degree of affection is obtained for every environmental intervention to determine the need for controls and
measures to eliminate or minimize their impact on the environment.
We are not aware of any material environmental issues that may affect the Group’s utilization of our tangible
fixed assets.
b)
Personnel
The composition of the average workforce employed in the Group was as follows:
Category
2015
2014
Graduates
Staff
Workers
2,427
809
2,333
5,569
2,008
1,030
2,936
5,974
12
Additionally, the average number of employees during the year by the companies included in the consolidation
by the proportional method has been 318 employees (2014: 356 employess).
The gender distribution at the end of the fiscal year ended 31 December, 2015 and 2014 of the Group staff
was as follows:
2015
Category
Men
Women
2014
Total
Men
Women
Total
Board Directors
13
-
13
14
-
14
Senior managers
5
-
5
6
-
6
Managers
167
11
178
364
22
386
Graduates
1,847
418
2,265
1,761
413
2,174
367
185
552
538
216
754
1,972
105
2,077
2,133
137
2,270
4,371
719
5,090
4,816
788
5,604
Workers
The average number of disabled persons (disability equal or higher than 33%) employed during 2015 and
2014 by Group companies, are classified in the following categories:
Category
Graduates and administrative staff
Workers
2.
2015
2014
11
7
18
15
8
23
LIQUIDITY AND CAPITAL RESOURCES
2.1. Liquidity
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of
its business operations, including working capital needs, capital expenditures, debt service obligations, other
commitments, contractual obligations and acquisitions.
Our primary sources of liquidity across our businesses are provided by our cash flows from operating activities
and our financing activities.
In the case of our EPC business, our primary sources of liquidity are provided by cash flows from our EPC
business and from our non-project debt including Bank borrowings and the Senior Notes. The primary liquidity
requirements of our EPC business are debt service obligations on our existing and future non-project debt and
costs and expenses related to operation of the business.
In the case of our Concessions business, the primary source of liquidity for each company in the Concessions
division is the cash flow generated by the relevant project and the project debt of such project company. The
primary liquidity requirements of each project company are capital expenditures and debt service obligations
on existing and future project debt.We finance the construction of our concession-type projects by means of
project debt at the project company level and equity contributions from us, our partner PSP and, in certain
cases, other co-investors.
Additionally, during the year 2014 the Group issued senior notes with a nominal value of 850 million euro,
which pay a fixed rate and mature on April 15, 2021.
As of December 31, 2015 we had 738 million euro of bank borrowings, 845 million euro of senior notes and
249 million euro of project debt in our balance sheet.
13
Group’s maturities greater than one year of borrowings are:
(€ Million)
Between 1 and 5
years
More than 5
years
Total
331
23
143
497
186
833
19
852
-
833
331
23
162
1,349
186
Senior notes
Syndicated loans
Credit facilities
Other borrowings
Total bank borrowings and senior notes
Project debt
Current maturities of borrowings correspond to:
(€ Million)
Borrowings and senior notes
Project finance
Total current bank borrowings
234
63
297
The position of short-term liquidity assets correspond to:
(€ Million)
Total position
169
13
182
Additionaly, at year end, Isolux Infrastructure and Isolux Aparcamientos, our main business segment
concessions, consolidated by the equity method had the following balances:
Project debt
Cash and cash
equivalents
Financial assets at fair
value through profit or
loss
Isolux Infrastructure
3,000
272
32
Isolux Aparcamiento
126
12
-
3,126
284
32
(€ Million)
Total
2.2. Capital resources
Our strategy includes strengthening the capital structure of the group, for which it was raised during the year
2014, to conduct a public offering of shares. The purpose was to reduce the Group’s level of debt.
This process has been postponed until the right market conditions are met and so far, alternatives to reduce
the leverage of the Group are been studied. These options include corporate operations either asset sales or
new partners.
14
2.3. Analysis of contractual operations and off balance sheet
The following table details the Group’s commitments with third parties at 31 December, 2015 and 2014
(millions euro):
At December 31, 2015
Trade and other payables **
Total
Trade and other payables **
Total
Less than 1 year
Between 1 and
2 years
Between 2 and
5 years
More than 5
years
234
12
1,696
91
2,033
109
8
10
80
207
388
192
580
852
26
878
276
16
1,873
101
2,266
91
8
15
88
202
310
7
205
522
871
31
902
*Does not include associated derivative financing projects
**Distributable income, billing account and advances received for work contracts and any other accounts
payable non-refundable and that does not generate liquidity risk are not included.
The detail of borrowings and senior notes, current and non-current, at 31 December 2015 is the following
(million euro):
Senior notes
Loans
Factoring
Credit facilities
Total
Current
Non-current
12
106
46
69
233
833
493
23
1,349
The following table shows the breakdown of debt commitments Project Group at 31 December, 2015 (million
euro):
Project Finance
Less than 1 year
Between 1 and
2 years
Between 2 and
5 years
More than 5
years
63
129
57
-
There are no other off-balance sheet obligations in addition to those described in the notes of the consolidated
financial statements that are recurrent in our business (guarantees provided, litigation, arbitration proceedings
or other regulatory measures).
15
3.
MAIN REGULATORY RISKS
3.1. Operational risks
a)
Regulatory risks
We are subject to changes in regulations.
We must comply with specific regulations relating to our EPC and Concessions divisions as well as general
regulations in the various jurisdictions where we operate (such as those related to accounting, employment,
data protection and taxation). As in all highly regulated sectors, any deregulation or regulatory changes in the
EPC or concession sectors could adversely affect our business, financial condition and results of operations.
In the case of significant regulatory changes (including tax amendments) affecting the concessionaires in
which we hold a stake, there may in certain circumstances be a right to adjust the terms of a concession or to
negotiate changes with the competent administration in order to reestablish the economic and financial
balance between the parties. We cannot guarantee that an adjustment, however, will be possible in all cases,
that any such adjustment would be satisfactory for the concessionaires or that it would be carried out in a
reasonable time period. If these adjustments are not possible, do not provide sufficiently greater income or are
delayed, our business, results of operations and financial condition may be materially adversely affected.
Our operations in solar photovoltaic generation and continued growth depend on regional, national
and international policies supporting renewable energies, including the availability of state incentives
and approved premiums for renewable power.
The development and profitability of renewable energies are dependent, in significant part, on national and
international political support. In particular, the European Union and its Member States, including Spain and
Italy, have been pursuing policies of active support for renewable energies for several years. In countries
where no feed-in tariff regime exists or is being contemplated, we are required to sell electricity under power
purchase agreements with governments or utilities. The prices under such agreements are freely negotiated
and are often linked to current market prices for electricity, which may be substantially lower than the feed-in
tariffs established under regulatory frameworks in Spain or elsewhere. In addition, while certain regulatory
frameworks establish feed-in tariffs for periods of up to 30 years, power purchase agreements typically have
substantially shorter durations and we can give no assurance that we will be able to enter into new power
purchase agreements or renew our existing power purchase agreements when they expire. Any changes in
tariff regimes or our inability to enter into power purchase agreements on favorable terms or at all, could
significantly reduce a relevant project’s economic viability and may have a material adverse effect on our
business, results of operations and financial condition.
Regulatory changes may have an adverse effect on our electricity operations.
Regulatory changes related to our electricity operations may have an adverse effect on our electric power
generation and transmission operations and ultimately our results of operations and financial condition. In
particular, on January 27, 2012, the Spanish Council of Ministers approved a new regulation (the
“Moratorium”), temporarily suspending further renewable energy generation capacity. The Moratorium, so long
as it remains in effect, therefore removes incentives for growing our electricity operations and introduces
uncertainty with regard to the development of new facilities, as the suspension period is open-ended and may
extend indefinitely.
On 28 December, 2012, a law aimed at reducing the deficit within Spain’s heavily-subsidized electricity
production industry and ensuring the sustainability of Spain’s energy supply through the imposition of certain
tax measures was published in the Spanish Official Gazette (the “Energy Tax Law”). The Energy Tax Law,
which became effective as of January 1, 2013, provides for, among other things, a direct tax on energy
generators equal to 7% of the total annual revenue of each energy generation facility.
Moreover, Royal Decree Law 2/2013 of February 1 introduced some measures that affect the remuneration to
be received by energy generators under the special regime (the “Additional Measures”):
•
Special regime facilities which elect selling its electricity output to the pool will receive an equivalent
premium equal to zero; and
•
The amendment of the methodologies for reviewing the remuneration linked to the general Consumer
Price Index (as the remuneration received by special regime generators). From January 1, 2013 that
16
index was replaced by the Consumer Price Index at constant tax rates, excluding unprocessed foods
and energy products.
Regulatory changes such as the Moratorium, the Energy Tax Law and the Additional Measures may have a
material adverse effect on our business, results of operations and financial condition.
Furthermore, the Spanish government has initiated a reform of the electricity sector (the “Energy Reform”) with
the aim of guaranteeing the sector’s financial stability. The first step of such reform was implemented by
means of the Royal Decree Law 9/2013, of July 13, 2013 (the “RDL 9/2013”). In late 2013, Law 24/2013, of
December 26, on the electricity sector was approved (containing, among others, the principles set out in RDL
9/2013 in respect of the remuneration of renewable energy generators). As with previous regulations (i.e.,
RDL 14/2010, the Moratorium, the Energy Tax Law or the Additional Measures), the purpose of the Energy
Reform is to resolve the unsustainability of the electricity tariff deficit.
On June 11, 2014 a new regulation on renewable energy electricity generation activity was passed by means
of Royal Decree 413/2014, which regulates electricity generation activity using renewable energy sources,
cogeneration, and waste (the “RD 413/2014”). Additionally, on June 16, 2014, the Ministerial Order
IET/1045/2014 (the “MO IET/1045/2014”) was passed, approving the remuneration parameters based on
standardized costs and revenues for certain electricity production facilities using renewable energy sources,
cogeneration and waste. The new regulations establish a new remuneration system for facilities producing
electricity from renewable energy sources, cogeneration and waste, which replaces the former remuneration
regime and has had an adverse impact on our electricity operations in Spain. Compliance with new
regulations relating to electricity generation activity may have a material adverse effect on our business,
results of operations and financial condition.
b)
Operational risks:
We depend on a limited number of suppliers for materials and components and various outside
contractors to construct, operate and maintain our projects.
If we are not able to obtain the necessary materials and components for our EPC or concession-type projects
that meet our quality, quantity and cost standards on time, our capacity to construct or develop a project could
be interrupted and our production costs could be increased. We may not be able to identify new suppliers or
approve their products for use in our projects in a timely manner and on commercially reasonable terms.
Materials and components from new suppliers may also be less suitable for our technology and result in lower
efficiency that may materially adversely affect our business, results of operations and financial condition.
We frequently subcontract certain works in our EPC and concession-type projects to third parties. We
therefore depend on the capacities of these third parties to complete the construction of certain parts of the
works of our projects according to the quality standards, price and deadline to which we have agreed. Most of
our construction and operating agreements with third-party contractors contain fixed deadlines and prices. If
these contracts are breached, the guarantees that may have been given may be insufficient to cover the
losses we suffer and our business, results of operations and financial condition may be materially adversely
affected.
We are exposed to fluctuations in the price and problems with the supply of raw materials.
The primary raw materials we use in our projects are steel, stainless steel, stone and sand aggregate, cement,
reinforcing bars, iron and copper. Our raw materials suppliers vary in each market in which we operate due to
the market-specific requirements of our projects. Although we include raw material cost estimates in our
tender estimates, raw material costs are subject to price fluctuations. In addition, the supply of essential raw
materials may be delayed or interrupted due to factors beyond our control, including the implementation of
import restrictions, which could result in project delays and increased costs if alternative suppliers are unable
to provide replacement raw materials at competitive prices or at all. Moreover, we may be unable to pass on
any or all of the increased raw material costs to our customers. Such price fluctuations or supply interruptions
could have a material adverse effect on our business, financial condition and results of operations.
Our operations require us to obtain licenses, authorizations and permits for both our EPC and our
concession-type projects, which may entail a long and complex process. Any failure to obtain or
renew such approvals, licenses and permits or comply with the terms of such approvals, licenses and
permits may have a material adverse effect on our business, results of operations and financial
condition.
We are required to obtain various environmental, development and labor-related approvals in connection with
our operations in the countries in which we operate. Although we have obtained the majority, but not all, of the
licenses, authorizations and permits required for carrying out the construction works in both our EPC and our
17
concession-type projects that are in the development phase, we cannot ensure that this will be the case in the
future. We may be unable to obtain all licenses, authorizations and permits required for the projects we are
planning. Procedures for obtaining authorizations vary from country to country and requests may be rejected
by the relevant authorities for many reasons, or they may be approved, but with significant delays. The
process of obtaining permits can be further delayed or hindered by changes in national or other legislation or
regulation or by opposition from communities in the areas affected by a project. Moreover, certain operating or
construction permits that have been issued to us could be contested.
We may be subject to claims made against us by customers, suppliers, subcontractors or other third
parties, and other litigation and legal proceedings.
Our EPC and concession-type projects involve complex design and engineering, procurement of supplies to
be manufactured specifically for the project, and management of the project’s construction management. We
may encounter difficulties in engineering, equipment delivery, scheduling changes and other factors, some of
which are beyond our control and may affect our ability to complete the project in accordance with the original
delivery schedule or to meet the contractual performance obligations. In addition, we rely on third-party
partners, equipment manufacturers and subcontractors to assist us with the completion of our contracts. As
such, claims involving customers, partners, suppliers, subcontractors and third parties may be brought against
us, and by us, in connection with our project contracts. Claims brought against us could include back charges
for alleged defective or incomplete work, breaches of warranty and/or late completion of the project and claims
for canceled projects and involve actual damages, as well as contractually agreed upon liquidated sums.
Claims brought by us against customers could include claims for additional costs incurred in excess of current
contract provisions arising out of project delays and changes in the previously agreed scope of work. Claims
between us and our suppliers, subcontractors and vendors include claims like any of those described above.
These project claims, if not resolved through negotiation, are often subject to lengthy and expensive litigation
or arbitration proceedings. Charges associated with claims may materially adversely affect our business,
results of operations and financial condition. As of 31 December, 2015, our recorded provisions for “litigation
and other” were 23.8 million euro.
c)
Concentration of customers
During 2015 the Group carried out transactions with a single customer representing more than 10% of the
Group revenue. These revenues correspond to the EPC segment and in Latin America. During 2014 no
transactions carried out with a single customer which represents more than 10% of the Group revenue.
Management believes that this situation is punctual with no concentration risk.
4.
FINANCIAL RISK
Group’s activities are exposed to a variety of financial risks: market risk (including foreign exchange risk, fair
value interest rate risk and price risk), credit risk and liquidity risk.
4.1. Market risk
a.1) Exchange rate risk
The Group has international operations and is therefore exposed to foreign exchange risk during currency
transactions, relating particularly to the US Dollar (USD), Brazilian Real, Mexican Peso and Indian Rupee, as
well as to other currencies. Foreign exchange risk arises from future commercial transactions, recognized
assets and liabilities and net investments in foreign operations. The Group hedges net forecast flows deriving
from forecast transactions in currencies other than the functional currency of the Group companies that affect
the transaction.
Management has established a policy requiring Group entities to manage their risk of exchange rate of foreign
currency against the functional currency. The companies are required to cover the entire exchange rate risk to
which they are exposed with the Central Department of Treasury. To manage exchange rate risk that arises
from future comercial transactions and recognized assets and liabilities, the Group companies use forward
contracts, transacted through Group Treasury Department.
The Group management policy of the Group Treasury Department is to cover the expected net flows
originated in transactions in other than the functional currency of the Group’s company that makes the
transaction. At 31 December 2015 and 2014 there were only sales-purchases of foreign currency by
transactions realized by companies located in Spain, USA, Asia and Latin America.
18
The Group’s operations are generally performed in the functional currency of each country, although
transactions performed in other currency are common (in Spain, India and Latin America principally),
especially in US dollar and Euro. If at December 31, 2015 the functional currency of each country with
operations in US dollars had depreciated/appreciated 10% against the US dollar keeping the other variables
constant, consolidated profit after tax would have been 19,339 thousand euro lower/higher (2014: 17,850
thousand euro lower/higher), mainly as a result of the effects of revaluation/devaluation of the active or
passive positions in US dollars; equity would have varied in the same magnitudes (calculated excluding the
effect of theimpact of changes in fair value of derivative financial instruments).
The Group has various investments in foreign operations, whose net assets are exposed to risk of foreign
currency translation. Such operations are concentrated mainly in Netherlands and Latin America (Brazil and
Mexico), USA and India. Overall the Group policy is that the operations in each country are financed by debt
taken in the functional currency of each country, so that risk affects only to the part corresponding to the
investment capital. If investment is financed partly or wholly with borrowings to credit institutions, the Group’s
policy is to take loans denominated in the functional currency. In the absence of funding, the Group’s policy is
not to make coverage, except in certain cases where expected cash flows in short term by delivering
dividends of the subisidiary are covered. The main exposures in foreign currenty as a result of capital
investments measured from the net assets of foreign companies included in the consolidated balance and the
joint ventures.
Brazilian real (*)
Mexican peso (*)
Indian rupee
US Dollar (*)
Other currency (*)
Total
2015
527
238
396
428
244
1,833
(*) Value of goodwill existing at each date not included.
a.2) Price risk
The Group is not exposed to equity instrument price risk since it has no significant investments. The Group is
partially exposed to market price risk in respect of raw materials, relating basically to metals and oil, which
affect the price of supplies of equipment and materials manufactured in the projects executed by the Group.
Generally, these effects are efficiently passed on in selling prices by all similar contractors operating in the
same sector. The Group reduces and mitigates price risk by means of policies implemented by management,
consisting basically of a reduction or increase in the rate of placements and the selection of currencies and
countries of origin, as well as by ensuring the production or acquisition of certain raw materials at a closed
price.
a.3) Cash flow and fair value interest rate risk
Interest rate risk must be analysed in relation to the two types of financing obtained by the Group:
•
Project finance
The Group participates in a number of investment projects under “Project finance” arrangements in which,
among other aspects, repayments are secured only by cash flows from the respective projects; there may be,
in some cases and during the construction phase, additional guarantees. In such cases, financing mainly
comprises long-term, variable-rate instruments. The interest rates applicable depend on the country in which
the project is located and on the currency in which the financing is issued. Financing issued at variable rates
exposes the Group to cash flow interest rate risk. The Group uses interest rate swaps to convert long-term
financing totally or partially to fixed interest rates.
Additionally, under certain project finance contracts the company that obtains the financing undertakes vis-àvis the granting banks to contract the above-mentioned derivative financial instruments.
19
The risk exposure to variable interest rate at year-end 2015 is as follows:
(€ Million)
Referenced Euribor
Other
references (*)
Total
159
159
71%
77
(3)
74
0%
236
(3)
233
48%
Bank Borrowings
Cash and cash equivalents interet-bearing
Net position
(*) Includes project finance related to assets held for sale.
The Group analyzes its exposure to interest rate risk dynamically. A simulation through which the Group
estimates the effect on the outcome of a given interest rate change is made. For each simulation, the same
variation in the interest rate for all currencies and references is used. The scenarios are performed only for
liabilities that represent the most relevant interest-bearing positions. Based on the simulations performed, the
impact on profit after tax increase / decrease of 100 basis points in the interest rate would mean a decrease /
increase of 888 thousand euro (2014: 672 thousand euro), mainly due to higher / lower interest expense on
variable rate loans; equity would have varied in the same magnitudes (calculated excluding the effect of
impact of changes in fair value of derivative financial instruments).
•
Bank Borrowings
The Group’s interest-rate risk arises mainly from long-term borrowings. Borrowings and Senior Notes issued
at variable rates expose the Group to cash flow interest rate risk. Fixed-interest borrowings expose the Group
to fair value interest rate risk. A large part of the Group’s borrowings are obtained at variable rates, the main
reference rate being the Euribor. The Group policies consist in the use of interest rate swaps to convert longterm financing to fix interest rates.
The variable rate risk exposure at each period is as follows:
(€ Million)
Referenced Euribor
Bank Borrowings
Other
references
Total
499
(71)
188
(95)
687
(166)
Net position
428
93
521
54%
0%
39%
The Group analyses exposure to interest rate risk in a dynamic manner. A number of scenarios are simulated
taking into consideration refinancing, renewal of current positions, alternative financing, existence of variablerate investments (in this sense, very short-term interest-bearing placements are treated as being exposed to
variable interest rates) and existing hedges. Base don these scenarios, the Group calculates the effect on the
outcome of a given interest rate change. For each simulation, the same variation in the interest rate for all
currencies is used. The scenarios are performed only for liabilities that represent the most relevant interestbearing positions. Based on the simulations performed, the impact on profit after tax of an increase / decrease
of 100 basis points in the interest rate would mean a decrease / increase of 729 thousand euro (2014: 1,640
thousand euro), mainly due to higher / lower interest expense on variable rate loans; equity would have varied
in the same magnitudes (calculated excluding the effect of impact of changes in fair value of derivative
financial instruments).
20
4.2. Credit risk
The Group manages credit risk in relation to the following groups of financial assets:
•
Derivative financial instruments and balances included under Cash and cash equivalents and financial
assets at fair value through profit or loss.
•
Balances related to trade and other receivables.
Derivative financial instruments and bank transactions included in cash and cash equivalents and financial
assets at fair value through profit or loss are contracted with reputable financial institutions that obtain high
credit ratings.
In relation to the assessment of credit risk in respect of derivative financial instruments and bank transactions
included in cash and cash equivalents and financial assets at fair value through profit or loss, Group
management applies the following procedures:
•
Credit Default Swap (CDS). When CDSs quoted in the market exist, credit risk is quantified on the basis
of the market quotation. The CDS is the additional premium that an investor is prepared to pay to cover a
credit position. The quantification of the risk is therefore equal to this premium.
•
Credit Spread on issues of bonds. When quoted bonds on various financial markets exist, the
quantification of the credit risk can be obtained as the differential between the internal rate of return (yield)
on the bonds and the risk free rate.
•
Comparable. If it is not possible to obtain the quantification of the risk by applying the above two
methodologies, the use of comparable is generally accepted, that is, companies or bonds issued by
companies in the same sector are used as a reference.
In connection with the balances of trade and other receivables, a high proportion of them (54.20% and 56.27%
at 31 December 2015 and 2014, respectively) are related to operations with national and international public
entities, which the Group believes that the credit risk is very limited. In relation to private sector clients, a
significant portion of the balances are related to companies with high credit ratings and with which there is no
history of default. Global position of customers and receivables is periodically monitored as well as an
individual analysis of the most significant exposures.
4.3. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of comited credit facilities and the ability to close out
market positions. Given the dynamic nature of the underlying business, the Group’s Treasury Department
aims to maintain flexibility in funding by the availability of committed credit lines.
It is noteworthy that, in relation to various investment projects (“Project finance”) in which the Company
participates, they are characterized by the fact that the repayment of the financing arranged is mainly
guaranteed by the cash flow of the respective projects. In theses cases, the Group’s policy to cover the
liquidity risks state that these loans are taken long-term and structured on the basis of expected cash flows for
each of the projects. In implementing this policy, the 74.51% of the funding allocated to projects taken at 31
December 2015 (2014: 93.98%) has a maturity greater than one year, there is any funding taken at 31
December 2015 (2014: 17.23%) is longer than 4 years maturity.
Regarding the rest of the Group’s liquidity position, the Management monitors the forecast liquidity reserve of
the Group based on expected cash flows.
The liquidity risk management is carried out jointly and centrally by Group’s Treasury. This management
includes both treasury management of Group’s recurrent operative (analysis and monitoring of debt maturities
and credit collection, renewal and contracting of credit facilities, management of available credit lines,
temporary placement of surplus cash) as the management of necessary funds to undertake planned
investments.
Although the Group recognizes negative working capital totalling 353 million euro at 31 December 2015
(excluding the effect of non-current assets and related liabilities held for sale), the Directors of the Parent
21
Company consider that the liquidity risk is adequately managed based on the cash flow forecasts that the
Group prepares.
Such forecasts main objective in the short-term; a) strength the liquidity position of the working capital, thereby
helping to ease recurrent cash tensions that currently exist in the Group's business sector and b) adapt the
Group's financial structure to the current market conditions, as well as to the cash generation capacity of each
of the Group's business units. Among other measures currently under analysis, which include the feasibility of
redefining the current business structure in order to guarantee that each business unit indebtness that is in
line with its capacity to generate operating cash, as well as the establishment of an asset disinvestment
process, provided that it may be executed in a manner that contributes to the Group's best business interests
As of the preparation date of these annual accounts, a Strategic Plan is being prepared, designed and
communicated to the main parties involved in the process.
In order to provide more transparency and to strength the reliability of the cash flow estimates (which are the
basis on which the aforementioned projections are prepared), the Group has facilitated the continuous
detailed review of its projected information to an external advisor in this area, and which commenced during
the second half of 2015. It is worthmentioning that during the year the aforementioned review, has
experienced a general achievement of the objectives established in the different forecast prepared by the
Management.
Set out below are the most relevant assumptions defined by Group Management to preparing the
aforementioned forecasts, which fulfilment involves factors that may not be under the control of the Group and
therefore generate a certain level of uncertainty regarding materialization:
•
As previously mentioned, forecasts take into consideration the working capital of a substantial part of
the bank borrowings that fall due in the short-term, particularly the credit facilities. The perception of
financial agents regarding the outlook for the Group's business sector has deteriorated during the
second half of 2015 due to external factors. This environment also gives rise to limited access to
capital markets, which is shown in the decline in the market prices for the debt instrument issued by the
Group. In order to attain its objectives, the Group expects to continue to have the confidence of
financial institutions in order to renew, or replace, a significant part of the existing credit lines, which
primarily consist of ordinary credit facilities, confirming facilities, factoring facilities, and bank
guarantees.
•
The Group's business structure may be redefined, as was mentioned previously, together with the debt
level to attribute to each business unit. This restructuring requires the prior acceptance by at least a
relevant part of financial creditors in line with the previously comments. The Group therefore considers
that the confidence shown by financial creditors with respect to the solvency of its project is a key
aspect of the success of these proposals within the framework of the ordinary negotiations currently in
progress with those financial creditors.
•
Finally, Group Management is considering the possibility of making significant disinvestments in 2016
in order to reduce its corporate financial debt, to the extent that such transactions may be executed in a
manner that contributes to the Group's best business interests. The businesses that may be sold
include the concessions, particularly those that Management expects may be assumed soon by the
Group as a result of the completion of the break up with the joint business which parent company is
Isolux Infrastructure Netherlands, B.V. (Notes 9 and 15). Although a significant part of those
businesses are located in Brazil, which is currently undergoing serious political and economic
difficulties that could negatively affect both the disinvestment period and the volume of liquidity to be
obtained as a result of such a disinvestment and, possibly, the decision to execute the disinvestment,
Group Management considers that those circumstances have been properly evaluated when preparing
the forecasts and, therefore, will not significantly affect the plans currently being executed.
Taking into account these cash flow projections for 2016, which form part of the Strategic Plan currently being
developed, the Directors consider that the Group will be in an adequate situation to allow it to fulfil its shortterm obligations. Accordingly, these consolidated annual accounts have been prepared on a going concern
basis
22
4.4. Capital risk management
The Group’s objectives regarding managing capital are to safeguard the ability to continue as a going concern
to seek a return for shareholders and benefits to other holders of equity instruments and to maintain an
optimar capital structure to reduce the cost thereof.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends payable to
shareholders, repay capital to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors capital in accordance with the leverage ratio, in line with the industry practice. This index
is calculated as net debt divided by total capital (excluding the projects’ position assigned). Net debt is
calculated as total debt with credit institutions, the current positon of trade and other payables, as shownin the
consolidated accounts, less cash and cash equivalents and financial assets at fair value through profit or loss.
The capital is calculated as equity, as shown in the consolidated accounts, plus net debt.
The leverage ratios at 31 December 2015 and 2014 are as follows:
(€ Million)
Bank Borrowings and senior notes and Trade and other payables - current
Less: Financial assets at fair value through profit or loss
Less: Cash and cash equivalents
Net debt
Equity (including Non-controlling interests, excluding hedging reserves and
cumulative translation differences)
Total Capital
Leverage ratio (Net debt / Total capital)
5.
2015
4,063
(13)
(169)
3,881
2014
3,903
(15)
(291)
3,597
600
4,481
86.6%
615
4,212
85.4%
Expected Business Trends
Ej. 2015
Ej. 2014
Var (%)
EPC Income
1,413
1,256
12.5%
Portfolio
6,817
7,107
(4.1)%
(€ Million)
20.78%
16%
-
New contracts
2,453
3,344
(26.6)%
EPC Portfolio
2,161
2,097
3.1%
“Book to bill” ratio
1.41x
1.59x
(11.3)%
Portfolio for concessions
At 31December 2015 our portfolio of EPC, which gives visibility to revenues in the coming years, was 6.8 bn
euro. New contracting during the year amounted to 2.5 bn euro, an increase of 27% over the previous year, of
which about 90% are international projects.
Portfolio of work for our concession division represents only 18% of the total. Our EPC division has reduced
reliance on concession division significantly since at 31 December 2010 the concessions portfolio represented
26% of the total.
Concessions
Key metrics
Transmission lines (Km)
Toll roads (Km)
Solar PV (MW)
Car parks (Spaces)
Year 2015
3,637
Year 2014
3,637
1,609
1,477
254
254
28,884
26,103
23
Considering the effects of the separation from IIN and the consequent control change described in section 1.4,
the WETT transmission lines (605 km) and all roadway concessions (1,609 km) will cease to be under the
Group's control.
6.
Information on Research and Development (R&D) Activities
The Group is particularly committed to dedicating the necessary resources to be up-to-date with the latest
technological developments in our sector. Research, initial design, testing of new products and services, etc.,
as well as specific innovation initiatives involving these products, regardless of whether or not they are
attributed to projects, are carried out in general by the employees of the Group’s different departments within
the framework of varying national government aid program.
7.
Acquisition and disposal of treasury shares
There has been no acquisition or disposal of treasury shares during the period.
8.
Subsequent events
There have been no significant events after the reporting date that could have a significant impact on the
consolidated financial statements.
24
PREPARATION OF THE CONSOLIDATED ANNUAL ACCOUNTS 2015
The Board of Directors of the trading Company “Grupo Isolux Corsán, S.A. at its meeting on 31 March, 2016,
and in compliance with the requirements of Article 253 of the Law of Capital Companies and of Article 37 of
the Commercial Code, procedes to formulate the Consolidated Financial Statements (Consolidated Balance
Sheet, Consolidated Income Statement, Global Consolidated Income Statement, Consolidated Statement of
Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Financial
Statements) and the Director’s Report, referring to the year ended at 31 December 2015, and on the terms set
out in the accompanying documents and preceding this writing.
Signatories:
Mr. Luis Delso Heras
Chairman
Mr. José Gomis Cañete
VP (Representing Construction Investments,
Sarl.)
Mr. Javier Gómez-Navarro Navarrete
Member
Mr. Serafín González Morcillo
Member
Mr. Francisco Moure Bourio
Member
Mr. Ángel Serrano Martínez – Estéllez
Member
Mr. Jordi Casas Bedós
Member (Representing Sercapgu, S.L.).
Mr. Jorge Mercader Miró
Member (Representing Hiscan Patrimonio S.A.U.)
Mr. José María de Torres Zabala
Member (Representing Cartera Perseidas, S.L.)
Mr. Lorenzo José Martínez Márquez
Member (Representing Inversiones Corporativas,
S.A.)
Mr. Francesc Bellavista Auladell
Member (Representing Inversiones Corporativas
Digitales, S.L.U.)
Mr. José Luis Ros Maorad
Member
D. Antonio Portela Álvarez
CEO
D. Juan Francisco Falcón Ravelo
Non-voting secretary

GRUPO ISOLUX CORSÁN, S.A. AND SUBSIDIARIES

Transcription

Similar documents

My first and last (at least for a while) 24 Hours in the Old Pueblo b

Untitled

Flyer ESCI Conference Poland 2015

review of financial results

COMPANY PRESENTATION

Come and see the restoration of the Ghent Altarpiece!

Introduction to European Standards and Euro Codes

printed version in PDF.

Teleplan Annual Report 2007 from website

1-7 August 2016 ITINERARY