grupo pestana sgps management report financial statements

Transcription

2008
GRUPO PESTANA SGPS
MANAGEMENT REPORT
FINANCIAL STATEMENTS
ENGLISH
2008
GRUPO PESTANA SGPS
MANAGEMENT REPORT
INDEX
06- Individual and Consolidate
Management Report
07- Introdution
09-The Fiscal Year 2008 - General Enviroment
14-The Consolidated Universe of Grupo Pestana, S.G.P.S. in 2008
21- Grupo Pestana - S.G.P.S., S.A.,
Individual Financial Statements
22- Profit Distribution Proposal
- Liabilities to the State and Social Security
23-The Future
24-Relevant Facts already occurred in 2007
- Thanks
25- Consolidated Balance Sheet
26- Grupo Pestana SGPS, SA.- Consolidated Balance Sheet
28-Consolidated Profit and Loss Statement by Nature
29-Consolidated Profit and Loss Statement
by Functions
30-Consolidated Cash-flows Statement
31- Notes to the Consolidated
Financial Statements
32- Introduction
33-Basis of Consolidation
-Consolidated Companies
35-Companies Excluded from the Consolidated
Financial Statements
-Other Financial Investements
% of Owned Share Greater than 10%
-Average Number of Employees
-Appropriate and Fair Presentation
36-Consolidation Differences
37- Depreciation of Consolidation Differences
-Guarantees Provided
41- Basis of Presentation and Accounting Principles
- Movimento do Activo Imobilizado
42- Exchange Rates Used
-Fixed Assets Movement
39-Movements in Adjustments
43-Debts to Third Parties (more than 5 years)
GRUPO PESTANA SGPS
MANAGEMENT REPORT
- Debts to Third Parties covered by Real Warrantees
-Sales and Services Rendered by Bussiness
Area and Geographical Market
44-Differences between the Accounting and Tax Results
-Wages of Board Menbers
45-Fixed Revaluation of Tangible Assets
46-Consolidated Statement of Financial Results
-Consolidated Statement of Extraordinary Results
47- Movements in ProvisionsFinancial Leases
-Financial Leases
48- FinancialStatements
49-Balance Sheet
51- Profit and Loss Statement by Nature
52- Profit and Loss Statement by Functions
53-Cash-flows Statements
54- Notes to the Financial Statements
55-Introduction
-Comparability with Previous Years
57- Taxation
-Avarage Number of Employees
58-Fixed Asset Movements
59-Group and Associated Companies
60-Debts to Third Parties (more than 5 years)
-Guarantees Provided
-Increase in Share Capital
-Companies Holding More than 20%
of Share Capital
-Movements in Shareholders Equity
61- Statement of Financial Results
-Statement of Extraordinary Results
62 -Other Relevant Information
64- Report and Opinion
of the Statutory Auditor
66- Auditor Report
Consolidated Financial Statements
68- Auditor Report
Individual Financial Statement
GRUPO PESTANA SGPS
MANAGEMENT REPORT
INDIVIDUAL
and Consolidated Management Report
FISCAL YEAR 2008
In the terms of the Law, we have the honor to submit
for your appreciation and approval the Board of
Director’s Report and the individual and consolidated
financial statements for the year ended as at 31
December 2008.
1. INTRODUCTION
The “Grupo Pestana – S.G.P.S., S.A.” completed
in December 2008 its sixth full year of activity
after having been created, under the restructuring
process established for the companies owned by
Pestana family, to be the Holding in Portugal to the
investments of the Group. .
GRUPO PESTANA SGPS
MANAGEMENT REPORT
The 2008 consolidated financial
statements include the following
companies:
Pestana
Management
Pestana
Saúde & Vida
I
I
Hotéis do
Atlântico
Salvor
I
I
Djebel
Rio Prata
I
I
EP
Carvoeiro Golfe
Carvoeiro Golfe
Med
.Imobiliária
I
I
EP
Amoreira
Intervisa Lisboa
Empreend.
Turísticos
Southern
Escapes
I
Mundo
Imaginação
Carlton Palácio
I
Porto Carlton
I
I
Guiatur
I
I
I
Energólica
I
SDM
Argentur
Inversiones
Vistalparque
I
I
Carlton Life
SGPS
I
Grupo Pestana
Pousadas
I
Enatur
Convento do
Carmo
I
Carlton Life
Serviços
Carlton Life
Cuidados e
Apoio
Carlton Life
residências e
Serviços
Natura XXI
I
Rolldown Golf
I
I
I
C
Salvintur
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I
Herdade da
Abrunheira
I
I
Eira da Loba
Pestana
Inversiones
Qta Beloura
Eurogolfe
Soc Agrícola
Arcos
I
EP
I
Costa Brava
I
Cota 40
I
Wildbreak
Aplicações
Múltiplas
ITI
CapeGreen
Troia B3
Euro Atlantic
Airways
Ponta da Cruz
I
I
EP
I
I
Viquingue
Albar
I
M&J Pestana
I
D. João II
C
I
I
Pestana
Investimentos
I
I
I
I
2. THE FISCAL YEAR 2008
GENERAL ENVIROMENT
The World Economy in 2008 had, as had been
expected, a year of great turbulence. Indeed,
the economic and financial crisis that one had
been announced arrived in its fullness, with
particular intensity after September, when a
major Investment Bank, with American capital
and global businesses, filed for bankruptcy.
Thus, the economy, which wasn’t very healthy
mainly in the more developed regions, has increasingly worsened its situation as the year
was ending. In the U.S., Japan and Euro Zone,
none of the more developed economies escaped from the financial turmoil witnessed in
the last four-month period of the year, which
caused a huge slowdown in economic growth
and great concern as the alarm signs became
worse as the year end was closer.
The European economies, in general, including
all those where the main flows of tourists come
from, have been caught by the financial crisis
which was later extended to developing countries especially the BRIC (Brazil, Russia, India and
China) which, initially, supposed that it could
pass them by.
If we remember that the first semester was
dominated by a general increase in the price of
several raw materials, with emphasis on oil, and
also of basic food products – cereals and meat
- we can conclude that we had a very difficult
environment over the whole year.
For this scenario significantly contributed the
oil prices boost, which price had climbed from
57.21 US$ to 93.89 US$ a Brent barrel in 2007,
and reached in 2008, prices close to 150 US$.
The Portuguese economy, which was having a
positive trend, even though modest, also saw
its performance drop down, being estimated
that the annual change of GDP in 2008, while
positive, is close to zero. Another negative signal was the significant slowdown in Investment
that occurred particularly after the last fourmonth of the year. As a result of the deterioration of the whole economic environment, the
unemployment rate beginning to rise in Portugal and throughout Europe. The problem of unemployment is probably the one that will be the
biggest challenge for public policies in the near
future, not only because its trend of growth,
but also, because the social problem it represents for families, including the most unprotected. Finally, it is highlighted that the indebtedness levels were maintained in a higher rank,
either by the government, either by the companies or households, indicating that Portugal and
the Portuguese’s still live above its possibilities,
which may be, in the long term, a big obstacle
to a sustained trend of economic recovery.
Perspectives
The 2009 outlook seems to be even more turbulent. The tensions in the financial sector have
been contaminating the whole economy, affecting companies that until a few months ago were
seen as among the most robust in the world.
The car industry and its entire supporting activi-
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MANAGEMENT REPORT
ties are suffering in chain, and the construction
and real estate sectors, important parts for the
majority of the western economies, have suffered drastic reductions in its activity.
In the present context, it is forecasted for the
current year the maintenance of the world economy recession environment, although the most
optimistic predict the appearance of positive
signs, with some consistency, in the last fourmonth period of the year in some economies.
The fight against the crisis has been guided by
aggressive public policies - public investment
and support to exporting companies or companies which have high levels of employment - are
examples of some of these measures - and by
Central Banks – through the reduction of interest rates and extraordinary measures, such as
direct lending to companies or the massive injection of money to provide liquidity to financial
systems - have had the merit to alleviate the
drastic effects of the crisis, in the short term,
but will require, in the medium term, no less
extraordinary measures to combat tensions, including inflation, which will appear later on.
As a result of this financial crisis is now a consensus that the populations of more developed
economies need to change its behavior patterns. Indeed, or the productivity rate changes
substantially, or it will be impossible to keep
some of the social protections that were introduced in these economies over the years of
economic growth, which, of course, will not be
well accepted and will create an instability and
conflict climate. In the other hand, these economies will have to increase the saving rates and
reduce the consumption levels.
Finally, it is expected, and desirable, in order to
prevent future crisis of similar or greater severity, the opening of a path of sustained reduction
of asymmetries between the economies (and
people’s living standards) of developed countries and the rest of the World.
Tourism Sector
The Tourism sector, Grupo Pestana core business, had in 2008 a good year, yet. However,
the sector was not immune to the economic crisis and there was, consequently, a reduction in
demand at a global level with special intensity
at the end of the year.
This situation is, however, the result of two opposing trends. To the positive trend of the first
half of the year opposed the reduction in demand that, gradually, was reaching various destinations in the second half of the year.
On average, the pace of demand growth was
lower than what had been happening in previous years (between 1995-2006 the world-wide
tourism has grown an average of +5,0% per
year), and also lower than what is foreseen for
the next years (WTO – World Tourism Organization, expects an annual average growth of
+4,0% per year, in the long term).
This growth has not been similar in all segments, though. Indeed, if in the Leisure Tourism
the reductions have been perfectly reasonable
for a climate of economic slowdown, in the corporate segment – Meetings, Incentive, Conference, and Exhibitions (MICE) - has seen drastic
GRUPO PESTANA SGPS
MANAGEMENT REPORT
reductions in demand. For the lesser negative
trend in leisure are not unrelated the socioeconomic changes that occurred in the living
standards of the populations of most advanced
economies: the creation of vacations period,
the enlargement of the retired population, the
information society that arises the people’s curiosity about the world around, are examples of
factors that strongly contribute to turn almost
essential the need of doing holidays. It is clearly
that the economic environment influences the
greater or lesser spending in holidays, but the
need of doing holidays is no longer questioned
for a large part of population in developed
countries. People continue to travel, though
less often, in shorter periods and spending less
money.
To maintain these levels of demand it has also
contributed, significantly, the innovations that
have occurred in this industry. First in the air
transport, where the business model set up by
the “Low Cost” companies, and the reaction
that other operators were forced to take to improve their competitive position, made that the
average price of the air tickets has fallen considerable. In fact, this was done boosted by the
“Open Air” policy that most countries followed.
Also in the distribution channels there have been
significant changes. The traditional tour operators began a strategy of consolidation, which,
in a first stage, consisted in the merger with
other traditional players (at the end of 2006 the
first four players on the European market were
reduced to two through businesses combinations), and, in the second stage, passed by the
acquisition of “Web Based” operators, some of
them with close connections with airlines with
a low cost operating concept or with mixed operating systems.
At the level of “web” operators, technological
advances and partnerships have making the
market changing, intensifying the competition.
This movement occurs not only in marketing
models but also in the development of information services to the potential tourist / client,
whether about destinations and its attractions
or about others travelers opinions or product
users. We are, thus, in the middle of the “Social
Media” age, emerging, daily, new sites on the
Internet and new “blogs” about various tourism
products.
Therefore, companies have to enter in this
game, developing and giving visibility to its
own “sites”, establishing partnerships and be
constantly alert to the opinions that are made
about its own products.
In the Destinations management there is also
an increased competition, because the bet that
many countries, or regions, are doing in the
creation and growth of new tourist destinations. Countries, or regions, until very recently
regarded as non-existent or even ignored in
the tourism sector, have emerged in the market
with new products and very aggressive promotional campaigns supported by massive public
investments. The crisis in industrial sectors has
increased this phenomenon, as the countries
seek alternatives in the tourism sector for its
development plans.
Companies are, thus, facing an unfavorable
economic environment that reduces demand,
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MANAGEMENT REPORT
causing major changes in business models and
intensifying competition.
By this way, the sector became much more
competitive, forcing companies to improve
their efficiency and effectiveness levels. Nowadays, better business strategies are required in
order to engage in more and better products
and services offers at the same cost, providing greater value to the client. In other words,
increasing the productivity levels through employees’ better qualifications, and obtaining
bigger synergies and economies of scale has
become an imperative for the companies’ survival, in addition to the rule of good management. This phenomenon explains, in part, the
market players’ reduction, which being fewer,
are bigger as they agglutinate the smaller or the
more inefficient operators around them, that
don’t keep up the market competitiveness.
For a winning business strategy, it is also necessary a good management of tourist destinations where they are implemented. As already
mentioned, the destinations are facing new
challenges that will only be overcome through
strategies to improve infrastructures that are
essential to the products offered. By this way,
it will be possible to have a quality and sustainable tourism and raise the level of the services
offered. This will only be possible if it is developed a culture of tourism and if there is effectiveness in the promotion, which involves using
the right channels and appropriate instruments
to the strategy that was established.
In order to achieve this goal, it is increasingly
urgent to have a public/private partnership to
manage the different variables of Tourism sup-
ply and demand. Get comparative advantages
against the competition, as the only way to win
this battle, implies a consensus and a concerted
action not only in the institutional promotion of
the Tourist Destination and of the different supply components, but also in other traditional
areas in the scope of the public intervention,
which became central to the quality and international competitiveness of that destination.
This means public policies for territory planning, environment, transportation and its infrastructures, health, public safety, entrance
visas, management of the cultural places and
of the historical and cultural patrimony, creative
management and cross promotion of the tourist destination, among others specific for each
region. Therefore, it is necessary an effective
partnership between with the private economic
agents, which are the main players of this sector. This public/private partnership is crucial not
only for the definition of the destination strategy, but also for its achievement. As such, the
integrated management of a tourist destination
with shared responsibilities between the different sectors of the public policy, and between
these and the private sector, is a key factor to
reach, in the global market, good levels of competitiveness.
In Portugal the performance of the tourism sector in 2008 followed the international trends.
In the main touristic areas, the first half of the
year registered a growth in demand. However,
in the second half of the year the effects of the
financial crisis have gradually arrived. The crisis was firstly felt in the Algarve, which already
had a difficult summer in 2008, and after in the
markets more dependent on the corporate seg-
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MANAGEMENT REPORT
ments, such as the Lisbon area, and, finally, was
spread out to the whole territory. In the Madeira island, which had a very good performance
in the first nine months, it was seen a substantial reduction in demand in the last months of
the year. However, the excellent performance of
the initial three quarters made this year the best
year ever of many hotels.
Nevertheless, the Tourism sector in Portugal continues to suffer from serious structural
problems, which debilitates it in conjunction
with the aggressive international competition.
demand. Also, belonging to the European Union requires respect for anti-dumping and anticompetitive EU laws that has prevented states
from adopting policies to subsidize operators,
airlines or hotels, which other countries have no
problems to put into practice.
Therefore, there are greater challenges for companies, as the Group Pestana, which have the
majority of its operations in the Euro Zone.
For 2009 there are clear signs of concern. Right
away, the continuation of the current economic
and financial crisis, and after the appreciation
trend of the Euro against the British Pound and
the U.S. Dollar.
The continuation of the economic crisis, besides the reduction in demand, has another
perverse effect, which stems from the reduction of liquidity in financial systems. Through
this scarcity, many companies came into difficulties. There was, in some cases, uncompleted
projects and, in others cases, units that were
already operating and have to adopt very aggressive strategies. The adoption of such strategies, particularly when focused, exclusively, in
pricing, first drag their businesses down and
later the entire sector.
The appreciation of Euro against other currencies, especially the British Pound and U.S. Dollar, make the tourist destinations of the Euro
Zone more expensive compared to its competitors, increasing, by this way, the reduction in
GRUPO PESTANA SGPS
MANAGEMENT REPORT
2. THE CONSOLIDATED UNIVERSE
OF GRUPO PESTANA SGPS IN 2008
Introduction
In the operational activity of the Group companies, the following investments should be pointed
out in relation to 2008:
n The end of the first construction phase, structure, of the future “Pestana Chelsea Bridge”, in
London and the launch of the second phase
expected to be finished before the end of the
current year;
n Opening in March of the “Pestana Porto Santo”, which meant the arrival of Group Pestana
to the second island of the Madeira archipelago, with a 5 stars unit and 275 rooms, more
than half are suites;
n The large renewal of the “Pestana D. João II”, in
Algarve, which reopened in May after a closure
of about seven months;
n Opening in May of the “Pestana Caracas”, a
new 5-star unit that quickly became one of the
most wanted in Venezuelan Capital;
n Renewal of the Madeira Casino, an intervention
that aimed to modernize this animation structure of reference in Madeira Island, which was
only possible because the concession extension,
as it was done for other concessions in Portugal;
n Opening of the “Pestana São Tome”, the first
5-star hotel and the newest and most modern
unit of São Tome e Principe archipelago;
n Renewal of the “Pestana Bazaruto”, 5-star unit
located in the pearl of the Indian Ocean;
n Acquisition of a majority stake in the management company of Alto Golf, allowing Pestana
customers of the Alvor hotels to use a golf course right on the hotel door;
n The continuation of the construction works of
the future hotel “Pestana Promenade” in Funchal, with expected opening in the beginning
of 2009;
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MANAGEMENT REPORT
n The remodeling of three “Pousadas” – Viana do
Castelo, Sagres and Sousel, following the general effort to up-grade these physical structures
under Group’s management.
n The continuation of construction works in the
new “Pousada” of Viseu and “Palácio do Freixo” in
Oporto, which are expected to open to the public
during 2009, together with the “Pousada de Estói”, which works are being managed by ENATUR;
n The continuation of the modernization program of back-office systems, with connection
to the operations central system in São Tomé
and Cabo Verde and the launch of new software that allows the centralization of the payroll
and administrative tasks of Human Resources;
n The launch of the new integrated platform of
reserves for all units of the Group in Portugal,
with the integration to front-office system;
n The completion of the new CRM project with
the modernization of this important management tool;
n The launch of the integrated project of sustainability which seeks to implement the best environmental and social practices throughout the
Pestana operation’s;
support the full development of young institutionalised. This project had in 2008 its first year
of activity and had already worked with more
than a hundred and a half of young people and
almost ten institutions;
n The acquisition in December 2008 of a company that owns three buildings in Miami, with
the objective of opening a hotel with about 100
rooms in their joint space.
Therefore, the Group continued to implement its
strategy, which consisted mainly in organic growth, although having made some acquisitions
focusing on the two brands under Group’s management: “Pestana Hotels & Resorts” and “Pousadas de Portugal.” This strategy aims to turn the
Group Pestana into a worldwide player even more
competitive in a highly global and aggressive environment, fulfilling our Vision – Growing with
passion and strength in the five continents.
This objective will only be achieved if we are able
to consolidate our business and expand it in a sustainable way. In doing so, we will be constantly
focused on improving the efficiency and the services provided to customers, we will be innovative
n The completion of the project “Criamar” - Institution of Social Solidarity whose purpose is to
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Results obtained by Geographical Areas
TURNOVER
Amounts
in Million Euros
Amount
∆ 2008/2007
Geographical
Area
2008
2007
Madeira
88,7
83,3
+6,5%
Algarve
45,7
52,3
-12,6%
Gr. Lisboa Porto
58,1
63,4
-8,4%
Internacional
30,0
11,7
+156,4%
222,5
210,7
+5,6%
The difficulties that 2008 encompassed are reflected
on the evolution of the results. Thus, if the Madeira
Island, as result of an excellent year to Tourism
in the first nine months of the year, managed to
increase its profitability comparing to 2007, and
obtained its best year ever, other regions had their
performances reduced. International area also had
an increase in GOP (GOP - Gross Operating Profit),
which is due to the good performance in Buenos
Aires and Cabo Verde, and also due to activity
increase because of the Hotel in Caracas, which
from the beginning showed very positive results.
It is also important to point out the resilience of
the Group’s operations, which achieve very positive
results in spite of great difficulties caused by the
economic and financial crisis.
first time in the recent years increased its weight
in the total profitability of the Group, comparing
with the previous year. The reversal of this trend
is not unrelated with the effort to invest in this
geographic area, which included the refurbishment
of two of the most important and oldest units:
“Pestana Carlton” and “Pestana Casino Park.”
Another positive aspect that is important to highlight
is the fact that in absolute terms, the reductions
in turnover are rather higher than in the GOP. This
fact, which is not easily achievable in sectors with
very rigid cost structures (predominance of fixed
costs), is demonstrative of the Group’s effort to
make more flexible its Profit and Loss making it
more adapted to market fluctuations.
In consequence of these results, the most matured
area of the group – Madeira Island – had for the
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Results by Business Area
TURNOVER
∆ 2008/2007
Amount
Business
2008
2007
Hotels
145,3
137,8
5,4%
Timeshare & Tourist Real Estate
23,9
36,4
-34,3%
Tourist Animation
20,6
20,8
-1,0%
Tourist Distribution & others
32,7
15,7
108,3%
222,5
210,7
+5,6%
Amounts in Million Euros
Whether in absolute or relative terms, it is
verified that the major increases occurred in
the Group’s most important business - Hotels more 7,5 million Euros in turnover and more 3,2
million Euros in GOP, which represents a growth
of 8% in relation to the previous year. It is also
important to point out that the analysis to these
growths in the Hotels business shows a “Flow
Through” of 43%, demonstrating, therefore, a
good costs’ management.
Thus, it is clear that the real estate sector was the
one that most suffered with the macroeconomic
and financial crisis that occurred in 2008 and is
expected to continue in 2009.
We also stress that the increase in turnover
does not imply higher results. There are sectors,
such as tourism distribution, where increases in
activity have little contribution, at least directly,
for cash flow generation.
With the exception of Timeshare and, especially,
the Tourist Real Estate, all other business areas
do not present significant negative changes.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Balance Sheet structure of Grupo
Pestana – S.G.P.S., S.A.
Analyzing the Company’s Balance Sheet, it is possible to present the Group’s statement of origins and applications of capital, as follows:
2008
% TOTAL
2007
∆ 08/07
Fixed Assets
592.925
85,4%
539.752
+9,9%
Current Net Assets
59.485
8,6%
56.332
+5,6%
Cash and banks
41.502
6,0%
39.805
+4,3%
693.912
100,0%
635.889
+9,1%
CAPITAL APPLICATIONS
Total Aplicações de Capital
Capital Origins
2008
% TOTAL
2007
Shareholder’s Equity
268.417
38,7%
223.260
Minority Interests
39.369
5,7%
77.584
6.148
0,9%
6.663
313.934
45,2%
307.507
370
0,1%
408
Medium/long term Debt
237.887
34,3%
185.722
Total Permanent Capitals
552.191
79,6%
493.637
Short term Debt
96.811
13,9%
86.276
Accruals and Deferrals
44.910
6,5%
55.977
T
otal Capital Origins
693.912
100,0%
635.889
Debts to Shareholders
Shareholder’s Equity or Equivalent
Provisions for risks and charges
GRUPO PESTANA SGPS
MANAGEMENT REPORT
∆ 08/07
+2,1%
+11,9%
+ 9,1%
The Capital Applications continue focused
mainly in Fixed assets, representing more
than 85% of the total. This fact derives from
Hotels be the Company’s “core business” and,
in opposition with the policy followed in the
last years by other hotels chains, the Group’s
option of being the owner of the units under
operation. This option implies, on one hand, a
slower growth in terms of units and number
of beds operated by the Company, but, on
the other hand, turns the Company’s Balance
Sheet stronger giving sustainability to the
growth achieved.
The Balance Sheet strength can also be
evaluated by the Total debt/Total fixed assets
ratio, which is 56,4%, in spite of fixed assets
being clearly understated, considering that the
older units are accounted for by an amount
lower than the its fair value.
The valuation of fixed assets, by any market
method (GOP multiples, multiples of the
room value or discounted cash flows), or by
the replacement value method, would lead
to substantial capital gains that have always
been verified when it was necessary to make
an assessment to these units.
Therefore, the securitization of part of the
assets, mainly the fixed assets, keeping them
under the Group’s management, a very
common operation in tourism companies and
already tested in the past in some Group units,
would allow covering completely the debt
liabilities.
assets and the cash and banks is about 40%
of the short term debt. Therefore, the Group
is prepared to face the current financial crisis
and liquidity scarcity, as had overcome other
crisis that occurred in the last 37 years of the
existence of the Group, which are typical in the
Tourism sector.
In 2008 the Group completed an intensive
investment phase, either by opening new units
or by the end of the remodeling process of the
main hotel units. Indeed, the investment in the
last year was around 80 million Euros, being
predicted that will fall to about 20% of this
amount in the current year. Just as an example,
in 2008 were being built two new units in
Madeira island, meanwhile concluded (Porto
Santo and Promenade), and was also finished
the renewal of two major hotels (Casino Park
and Carlton) and of Casino Madeira, in addition
to the payment of the financial contribution
that allowed the renewal of the Gambling
concession in Funchal area. Therefore, there
was an investment that exceeded the 35 million
Euros while in 2009 the investment planned,
including the renewal of the “Pestana Palms,”
will have a maximum cost of 1 million Euros.
Any investments in progress, of which the main
are “Pestana London” and the “Pousadas” of
Viseu and Freixo, in Oporto, have assured their
medium and long term financing needs.
In the company’s balance sheet the weight
of permanent capital is about 80% of total
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Grupo Pestana – S.G.P.S., S.A.
Cash-flows Statement
2008
2007
Var. 08/07
2006
Var. 07/06
+ Operational profit
33.088,2
36.197,6
-8,6%
22.645,0
+59,9%
+ Depreciations
26.752,0
21.406,8
+24,7%
21.843,8
-2,0%
1.191,1
1.141,6
+4,3%
246,6
363,9%
Operational cash-flow
61.031,3
58.746,0
+3,9%
44.735,4
+31,3%
Annual cash-flow
51.946,7
49.134,5
+5,7%
+ Provisions
The 2008 Operational cash-flow was slightly
higher to the one obtained in 2007 and over
35% higher than the one obtained in 2006. This
figure reflects the good performance achieved
by the several business areas of Group Pestana
in a year that, as already referred, had a second
semester with a significant decrease in demand,
and there were sectors, as Tourist real estate,
where the effects of the financial crisis were
already strongly felt. This figure represents
about 19% of the total shareholder’s equity
or equivalents, curiously the same profitability
registered in 2007. The achievement of these
positive results, in a hard context and where
the Group’s organic growth was yet significant,
in business areas like Hotels, which have long
pay-back periods, reveals the Company’s good
capacity to generate cash-flows, mainly in those
divisions where the businesses are more matured
and, therefore, the operational efficiency is more
proficient.
Conversely, the total Annual cash-flow was
higher than the one obtained in 2008 (the higher
amount obtained till this year), and represented
about 3,27 times the amount of interests and
similar expenses (Net interests) for the year.
These amounts reflect the Grupo Pestana
S.G.P.S., S.A. solid financial structure since its
inception and are the outcome of a careful debt
management that we aim to leave far below the
Group maximum indebtedness capacity.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
4. GRUPO PESTANA S.G.P.S., S.A.
INDIVIDUAL FINANCIAL STATEMENTS
The Company’s individual activity was
characterized for its Group holding function,
where can be highlighted the following
operations done during 2008:
approximate amount of 108 million Euros, 51
million Euros are bank loans and 49 million Euros
are cashpooling applications made by group
companies in the holding.
nIncrease up to 100% the share capital in M&J
Pestana, S.A.;
The net profit for the year was mainly due to
the application of equity method to investments
in affiliated companies, enhanced by goodwill
depreciations, of acquisitions carried out in
the past, and by interests charges related with
the financing of these acquisitions. The great
evolution of the net profit for the year derives
from the good operational performance showed
in 2008 by the different business units.
nEnlargement in 2,11% the share capital in
SALVOR, S.A.;
nEnlargement in 0,08% the share capital in GP
Pousadas, S.A.;
nFollow-on the centralized treasury management
policy, in order increase efficiency in the cash
management within the Group.
The Company’s individual financial statements
present total assets of 343.765.391,91 Euros and
shareholders’ equity of 235.295.256,59 Euros,
including a net profit for the year of 17.922.022,10
Euros. From the Company’s liabilities in the total
GRUPO PESTANA SGPS
MANAGEMENT REPORT
5. PROFIT
DISTRIBUTION PROPOSAL
As a consequence of the previously mentioned
facts and considering the Company’s economical
and financial situation, we propose the following
distribution of the 2008 net profit, amounting to
17.922.022,10 Euros:
Legal reserve Retained earnings
€900.000,00
€17.022.022,10
6. LIABILITIES TO THE STATE
AND SOCIAL SECURITY
The universe of the consolidated companies has its
situation regularized with the State and with the
Social Security.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
7. THE FUTURE
The year of 2009, because the negative signals
that hang over the economies of major tourism
markets, is foreseen as a difficult year.
The level of difficulty will, mostly, take place in the
low seasons. The different players of the sector
value chain are with defensive strategies and, thus,
less willing to take risks. This involves reducing
operations in times of greater uncertainty on the
demand side. In addition, the corporate market,
very dependent of the companies’ budgets, that at
this stage is natural that are restrictive, will have a
slowdown during the year. Also leisure destinations
of the Euro Zone, where prevail the products Sun
and Beach and also the Nature, might suffer a
increased reductions of an important market as
the English if the Euro continues the appreciation
against other currencies.
We have, therefore, a negative outlook throughout
the all year and for all tourism segments. As a
response, it is important outlining strategies that
allow, first, to overcome the crisis minimizing its
effects, and, second, to create conditions so that,
after the worst phase, the Group is able to grab
the good opportunities that the post-crisis periods
usually offer. Consequently, it becomes even more
important that business strategies incorporate
the necessary measures to increase the levels of
competitiveness, which can only be achieved by
improving business efficiency.
The Group Pestana will continue its strategy,
conducting its business by the following guidelines:
nContinue to improve operational flexibility,
sharply reducing fixed costs and giving to the
organization resources for quick responses to
the different situations and challenges that the
market will offer;
nContinue to invest in change and innovation,
as a way of, through new business models and
new services or processes, increase creation of
value to its customers, providing them greater
satisfaction and, thereby, collect their loyalty;
nIncrease the relation with the different
“stakeholders”,
including
strengthening
partnerships throughout the value chain of
the sector, with tour operators or airlines and
increasing the transparent dialogue with its
financing partners;
nRedouble the attention to the market, without
losing long term vision – that means, an
economy of war that allows to survive the crisis
(the financial resilience is crucial) but, also, to
prepare the Organization for new challenges
and opportunities of the “post-crisis” period;
nReinforcing its commitment to its more
than six thousand employees, promoting an
environment that allows everyone to overcome
this time of difficulty with the hard work that
will be needed but, also, with the awareness
that everyone is making all efforts to do the
right things, and, together, we can prepare a
better future;
nIncrease the support of the activities in the
pillars of Sustainability (environmental, social
and economical), assuming the commitment
and promoting the implementation of best
practices not only within the company but also
in society in which it belongs.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
8. RELEVANT FACTS
ALREADY OCCURRED
IN 2009
Of the facts that have already occurred in 2009,
the “Pestana Promenade” soft opening, in last
February, deserves a special mention.
9. THANKS
To conclude, the members of the Board of Directors
of Grupo Pestana - S.G.P.S., S.A., as well as its
colleagues who carry out administration functions
in other Group companies, would like to express
their deepest thanks to all the public and private
entities that, directly and indirectly, have supported
and worked with our Group.
To our clients, suppliers and other business partners,
namely financial institutions and other professional
services providers, our recognition for all the trust
showed in the development of our Group.
The Board of Directors would like to emphasize
the support and cooperation that the General
Shareholders Meeting Chairman and the
Supervisory Board Members showed in fulfilling
their duties.
Finally, we would like to enhance the great
professional spirit and sense of duty of all the
staff working for the Group Pestana. Its effort
and devotion are the reason that turns possible
the creation of value for which Group Pestana is
responsible.
Funchal, 9 April 2009
The board of directors
Dionísio Fernandes Pestana - Chairman
Pietro Luigi Valle - Member
José Alexandre Lebre Theotónio – Member
GRUPO PESTANA SGPS
MANAGEMENT REPORT
CONSOLIDATED
Balance Sheet
Grupo Pestana, S.G.P.S., S.A.
Consolidated Balance Sheet
as at 31 December 2008
Assets
2008 Gross Assets
FIXED ASSETS: Intangible Assets: 431 Start-up expenses
432 Research and development costs
433 Patents. brand names and other rights
434 Key money premiums
441/6 Intangible assets in progress
449 Advances paid on account of intangible assets
Consolidation differences
Tangible Assets: 421 Land and natural resources
422 Buildings and other constructions
423 Basic equipment
424 Transportation equipment
425 Tools
426 Administrative equipment
427 Containers
429 Other fixed assets
441/6 Fixed assets under construction
449 Advances paid on account of tangible assets
Financial Investments:
4111 Shares in group companies
4121+4131 Loans to group companies
4112 Shares in associated companies
4122+4132 Loans to associated companies
4113 Shares in participated companies
4133 Loans to participated companies 4113+414+415 Other financial investments
4123+4133 Other loans granted
441/6 Investments in progress
447 Advances paid on account of financial investments
CURRENT ASSETS:
Inventories: 36 Raw and subsidiary materials and consumables
35 Work-in-process
34 By-products and wastage
33 Finished and intermediary products
32 Goods
37 Advances paid on account of goods in transit
Receivables from third parties - long term:
211 Trade debtors
212 Trade debtors - bills receivable
218 Doubtful debts
24 Public entities
253+254 Other associated companies
251+255 Shareholders
2619 Advances to fixed assets suppliers
268 Other debtors
Receivables from third parties - short term: 211 Trade debtors
212 Trade debtors - bills receivable
218 Doubtful debts
253+254 Other associeted companies
229 Advances to suppliers
2619 Advances to fixed assets suppliers
24 Public entities
262+266+267+268+221 Other debtors
264 Capital subscribed but not paid up
Marketable securities and bonds:
1512 Shares in associated companies
1522 Bonds and other titles in associated companies
1513+1523+153/9 Other marketable securities
18 Other short term applications
Cash and banks: 12+13+14 Bank deposits
11 Cash
ACCRUALS AND DEFERRALS:
271 Accrued income
272 Deferred costs
275 Deferred taxes asset
Depreciations
And Adjustments
3.712.019,35
14.947,90
19.499.223,49
1.801.346,81
4.377.216,41
0,00
56.876.307,68
86.281.061,64
61.492.177,61
426.549.393,16
178.302.055,49
3.195.255,24
708.654,10
16.110.809,04
0,00
601.801,96
80.300.790,81
514.100,69
767.775.038,10
0,00
0,00
13.524.154,72
6.000.000,00
7.270.834,71
2.983.819,99
10.595.641,16
0,00
1.840.183,61
0,00
42.214.634,19
1.929.111,78
24.383.815,32
0,00
10.225.586,21
3.221.939,84
0,00
39.760.453,15
0,00
0,00
0,00
0,00
2.049.206,74
0,00
0,00
0,00
2.049.206,74
35.532.656,21
0,00
6.391.529,99
4.146.320,39
4.794,79
409.812,31
7.466.706,93
10.520.569,54
11.429.433,84
602.195,61
76.504.019,61
0,00
0,00
1.440.164,72
8.815.690,72
10.255.855,44
3.286.958,93
11.347,90
7.832.509,47
579.130,16
0,00
0,00
30.802.710,36
42.512.656,82
0,00
148.709.525,72
95.301.664,14
2.510.046,35
510.312,67
13.705.317,94
0,00
91.261,48
0,00
0,00
260.828.128,30
0,00
0,00
0,00
0,00
0,00
0,00
4.556,55
0,00
0,00
0,00
4.556,55
0,00
6.484.372,66
0,00
0,00
152.168,65
0,00
6.636.541,31
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
1.003.992,57
0,00
5.546.057,13
0,00
0,00
0,00
0,00
0,00
411.865,15
0,00
6.961.914,85
0,00
0,00
0,00
5.313,66
5.313,66
1.929.111,78
17.899.442,66
0,00
10.225.586,21
3.069.771,19
0,00
33.123.911,84
0,00
0,00
0,00
0,00
2.049.206,74
0,00
0,00
0,00
2.049.206,74
34.528.663,64
0,00
845.472,86
4.146.320,39
4.794,79
409.812,31
7.466.706,93
10.520.569,54
11.017.568,69
602.195,61
69.542.104,76
0,00
0,00
1.440.164,72
8.810.377,06
10.250.541,78
30.522.711,04
728.661,62
31.251.372,66
2.068.995,25
8.640.057,21
4.777.216,05
2.068.995,25
8.640.057,21
4.777.216,05
Total Adjustments Total Assets
0,00
0,00
13.524.154,72
6.000.000,00
7.270.834,71
2.983.819,99
10.591.084,61
0,00
1.840.183,61
0,00
42.210.077,64
30.522.711,04
728.661,62
31.251.372,66
Total Depreciations 61.492.177,61
277.839.867,44
83.000.391,35
685.208,89
198.341,43
2.405.491,10
0,00
510.540,48
80.300.790,81
514.100,69
506.946.909,80
1.071.577.910,04
15.486.268,51
768.268,48
33.052,89
12.007.210,96
1.524.340,90
4.341.801,39
0,00
32.204.585,94 50.879.260,56
57.784.212,68
234.746.159,55
60.177.433,78
967.889,36
170.851,99
2.340.638,90
0,00
662.876,20
82.001.477,26
805.385,19 439.656.924,91 0,00
0,00
10.511.911,26
9.175.000,00
2.462.648,48
2.983.819,99
22.983.637,04
0,00
1.099.227,36
0,00 49.216.244,13 1.798.025,13
17.566.034,22
0,00
6.536.754,83
2.406.710,60
3.357.533,75 31.665.058,53 0,00
0,00
0,00
0,00
2.051.803,32
0,00
0,00
0,00 2.051.803,32 29.353.220,72
0,00
573.462,56
4.146.320,39
3.312.450,59
1.889.749,80
6.877.780,24
8.938.973,60
8.595.244,79
0,00 63.687.202,69 0,00
0,00
1.249.847,38
5.626.544,89 6.876.392,27 31.371.534,42
1.557.029,77 32.928.564,19 1.881.957,01
6.813.684,45
5.765.915,98 14.461.557,44
303.345.341,67
13.603.769,82
316.949.111,49
754.628.798,55
691.423.008,04
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Net Assets
425.060,42
3.600,00
11.666.714,02
1.222.216,65
4.377.216,41
0,00
26.073.597,32
43.768.404,82
15.486.268,51
2007 Net Assets
Consolidated Balance Sheet
SHAREHOLDERS’ EQUITY AND LIABILITIES 2008 SHAREHOLDERS’ EQUITY: 80.000.000,00
51 Share capital
52 Own shares: 521 Par value
0,00
522 Premiums and discounts
0,00
53 Supplementary capital
56.000.000,00
33.690.973,24
54 Premiums on issuance of shares
55 Adjustments to investments in affiliated and associated companies
-1.815.077,14
-175.665,12
56 Revaluation reserves
26.856.154,68
-1.452.626,68
Conversion differences
Reserves: 571 Legal reserves
965.928,14
572 Statutory reserves
0,00
573 Contractual reserves
0,00
574 to 579 Other reserves
18.686.949,23
59 Retained earnings
41.247.830,28
Sub total 254.004.466,63
88 Net profit/(loss) for the year
14.412.104,96
89 Anticipated dividends
0,00
Total Shareholders’ equity 268.416.571,59
Minority Interests
39.368.825,38
LIABILITIES: Provisions: 7.832,47
291 Provision for pensions
292 Provision for taxes
50.698,80
311.534,93
293/8 Other provisions
370.066,20
Debts to third parties - long term: 231+12 Bank loans
214.169.035,13
0,00
2612 Fixed assets suppliers - bills payable
5.774.519,54
12.653.162,19
239 Other loans
2611 Fixed assets suppliers
0,00
2613 Fixed assets suppliers - Leasing
11.065.026,83
24 Public entities
0,00
265+268 Other creditors
0,00
243.661.743,69
Debts to third parties - short term: Bonds:
2321 Convertible
0,00
2322 Non convertible
0,00
233 Other titled loans
0,00
231+12 Bank loans
95.272.377,30
269 Advances received on account of sales
0,00
221 Trade creditors
16.017.548,33
41.587,66
228 Trade creditors - outstanding invoices
222 Trade creditors - bills payable
0,00
2612 Fixed assets suppliers - bills payable
0,00
253+254 Other associated companies
0,00
373.396,97
219 Advances from trade debtors
11.154.853,08
239 Other loans
239.484,94
2611 Fixed assets suppliers
4.880.633,75
2613 Fixed assets suppliers - Leasing
1.299.250,27
3.842.182,13
24 Public entities
262+263+264+265+267+268+211 Other creditors
9.293.780,98
142.415.095,41
Accruals and deferrals: 20.325.361,80
273 Accrued costs
274 Deferred income
18.051.108,33
276 Deferred taxes liability
22.020.026,15
60.396.496,28
Total liabilities 446.843.401,58
Total Shareholders’ equity. Minority interests and Liabilities 754.628.798,55
2007 80.000.000,00 0,00
0,00
21.000.000,00
33.716.655,44
-829.663,76
0,00
28.535.809,89
-1.206.073,24 325.931,50
0,00
0,00
18.686.949,23
27.997.396,61 208.227.005,67
15.032.697,89
0,00 223.259.703,56 77.583.719,59 8.382,86
93.409,40
306.233,38 408.025,64
150.425.531,05
0,00
6.644.225,19
29.979.126,84
0,00
5.316.962,76
0,00
0,00 192.365.845,84 0,00
0,00
0,00
85.730.682,36
0,00
15.728.197,13
24.201,93
0,00
0,00
0,00
18.962,22
641.515,07
474.593,43
8.639.868,80
72.004,85
5.032.389,49
11.004.658,46 127.367.073,74 18.976.517,60
25.184.883,84
26.277.238,23 70.438.639,67
390.579.584,89
691.423.008,04
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Consolidated Income
Statement by Natures
for the year-ended 31 December 2008
COSTS AND LOSSES
2008 2007
61 Cost of goods sold and materials consumed: Goods
1.632.262,90
963.499,66
Raw and subsidiary materials and consumables
30.681.799,15
32.314.062,05
27.544.081,82
28.507.581,48 62 External services and supplies from third parties 69.827.214,06
67.387.826,70 64 Personnel costs:
Wages (641+642)
50.892.596,45
48.846.273,37
Social charges:
Pensions (643+644)
93.749,26
100.656,00
Others (645/8)
13.840.322,95
64.826.668,66
13.915.413,28
62.862.342,65 Amortizações Imobilizado Corpóreo e Incorpóreo (662+663) 26.751.990,42
21.406.752,72 Adjustments (666+667)
1.111.227,61
952.953,78
Provisions
79.906,82
27.943.124,85
188.689,09
22.548.395,59
Taxes
5.779.786,32
5.984.442,74
Other operational costs and losses
1.188.085,28
6.967.871,60
2.089.245,18
8.073.687,92 A) 201.878.941,22
189.379.834,34 Depreciations and adjustments for financial investments (683+684)
8.373.109,12
5.030.942,29
Interests and similar costs:
Group Companies
438,48
0,00
Losses on Group Companies
13.623,15
162.337,86
Others (681+685+686+687+688)
24.037.347,49
32.424.518,24
17.353.232,90
22.546.513,05 C) 234.303.459,46
211.926.347,39 Extraordinary costs and losses 6.109.252,70
1.076.558,81 E) 86 Income tax for the year G)
Profit attributable to minority interests
88 Net profit/(loss) for the year 240.412.712,16
1.468.336,99
241.881.049,15
1.218.437,39
14.412.104,96
213.002.906,20 4.247.364,16 217.250.270,36 6.522.476,69 15.032.697,89 257.511.591,50
238.805.444,94
PROFITS AND GAINS
2008 2007
71 Sales: Goods
Products
5.006.375,35
3.085.187,43
3.751.002,32
5.201.542,29 72 Services rendered 213.745.050,30
222.502.427,97
202.391.785,72
210.678.515,44 Increase in stocks of finished products and work-in-process
111.665,27
266.962,30 75 Self constructed fixed assets 1.844.951,31
7.841.527,73 73 Supplementary revenue 4.998.141,00
5.300.282,71
74 Operational grants 420.497,62
231.416,71
76 Other operational profits and gains 800.008,20
13.483,02
77 Reversions of depreciations and adjustments 4.289.411,91
10.508.058,73
1.245.202,88
6.790.385,32 B)
234.967.103,28
225.577.390,79 782 Gains in group and associated companies: Group companies
2.855.668,13
2.717.191,34
Gains in marketable securities
and other financial aplications: Group companies
Others (7812+7815+78162+783)
Outros Juros e Proveitos Similares: Relativos a Empresas Associadas
Outros (7811+7813+7814+7818+785/788)
79 Extraordinary profits and gains D) F) 1.679.205,31
1.565.643,80
652.803,38
465.076,64 266.349,34
323.942,15
8.135.754,07
13.589.780,23
4.243.924,12
248.556.883,51
8.954.707,99
257.511.591,50
SUMMARY Operational profit/(loss): (B)-(A)=
33.088.162,06
Financial profit/(loss): (D-B)-(C-A)=
-18.834.738,01
Current profit/(loss): (D)-(C)=
14.253.424,05
Profit/(Loss) before income tax: (F)-(E)=
17.098.879,34
Consolidated profit/(loss) for the year including
minority interests (F)-(G)=
15.630.542,35
9.315.778,05 234.893.168,84 3.912.276,10 238.805.444,94 36.197.556,45
-13.230.735,00
22.966.821,45
25.802.538,74
21.555.174,58
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Consolidated Income
Statement by Natures
2008 2007 Sales and services rendered
222.502.427,97
210.678.515,44
Cost of sales and services rendered
-141.690.191,50
-132.885.976,67 80.812.236,47
77.792.538,77 Other operational profits and gains
21.419.383,30
18.811.151,45
Distribution costs
-7.185.677,11
-8.577.149,77
Administrative costs
-25.059.947,76
-25.368.312,31
Other operational costs and losses
-34.052.377,55
-23.624.954,40 35.933.617,35
39.033.273,74 Net Funding costs
-15.901.593,42
-13.109.308,78
Gains/(Losses) in group and associated companies
-3.585.947,97
-586.502,86
Gains/(Losses) in other investments
652.803,38
465.076,64
Unusual gains/(losses)
0,00
0,00 17.098.879,34
25.802.538,74 -1.468.336,99
-4.247.364,16 15.630.542,35
21.555.174,58 Gross margin Operational profit Current profit and loss Income tax over current profit and loss
Current profit and loss after income tax Extraordinary profit and loss
0,00
0,00
Income tax over extraordinary profit and loss
0,00
0,00
Profit attributable to minority interests
-1.218.437,39
-6.522.476,69
Net profit/(loss) for the year 14.412.104,96
15.032.697,89
Net profit/(loss) per share 0,180
0,188
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Consolidated Statement
of Cash Flows
2008 OPERATING ACTIVITIES Cash receipts from trade debtors
259.041.005,48
Cash paid to trade creditors
-126.363.976,78
Cash paid to employees
-63.676.373,77
OPERATING ACTIVITIES
69.000.654,93
Income taxes received/(paid)
-5.893.333,00
Other receipts/(payments) of operating activities
-4.774.729,53
Cash-flow before extraordinary items
58.332.592,40
Cash received related to extraordinary items
0,00
Cash payments related to extraordinary items
0,00
Net cash-flow from operating activities
58.332.592,40
INVESTMENT ACTIVITIES
Receipts from:
Financial investments
25.476.393,05
Tangible assets 950.824,59
Intangible assets
0,00
Government grants
3.886.006,13
Interests and similar profits
4.174.390,24
Dividends 423.720,00
Other receipts from investment activities
82.619,00
.....
Payments of:
-38.912.356,34
Tangible assets -71.810.896,43
Intangible assets
-431.923,10
Other payments of investment activities
-2.042.449,05
..... Net cash-flow from investment activities
-78.203.671,91
FINANCING ACTIVITIES Receipts from:
Loans obtained
73.095.883,53
Capital increases. supplementary capital and premiums
1.115.755,68
Grants and donations
102.473,00
Sales of own shares
0,00
Coverage of previous years losses
0,00
Other receipts from financing activities
737.937,34
.....
0,00
Payments of:
Loans obtained
-34.321.192,29
Capital amortization of leasing contracts
-2.066.068,37
Interests and similar costs
-18.944.350,63
Dividends -4.310.535,00
Capital reimbursement and supplementary capital
0,00
Acquisition of own shares
0,00
Other payments of financing activities
-1.282.602,90
.....
0,00
Net cash-flow from financing activities
14.127.300,36
Net increase/(decrease) in cash and cash equivalents
-5.743.779,15
Cash of new consolidated companies
0,00
Exchange rate effect
565.335,15
Cash and cash equivalents at the beginning of the period
36.890.668,16
Cash and cash equivalents at the end of the period
31.712.224,16
NOTES TO THE CASH-FLOW STATEMENT
Cash
Bank deposits - current accounts
Other deposits until 3 months
Other financial aplications until 3 months
Bank overdrafts
Other Cash and cash equivalents
Cash and cash equivalents at Balance Sheet
2008 728.661,62
37.959.588,10
1.373.500,00
1.440.164,72
(9.789.690,28)
31.712.224,16
9.789.690,28
41.501.914,44
2007 232.111.451,02
-120.937.727,17
-61.407.240,82 49.766.483,02 -3.862.593,55
6.265.610,05 52.169.499,52
0,00
0,00 52.169.499,52 23.302.638,02
2.440.882,52
0,00
4.799.180,20
5.325.974,62
584.145,44
397.402,15
-21.171.759,87
-66.889.335,61
-1.087.078,20
-1.721.150,59 -54.019.101,32 61.573.310,49
2.046.336,94
0,00
0,00
0,00
0,00
0,00
-48.714.555,37
-1.279.480,53
-18.240.989,91
-4.586.088,95
0,00
0,00
-324,35
0,00 -9.201.791,68 -11.051.393,47 0,00
8.349,00 47.933.712,63
36.890.668,16 2007 1.557.029,77
36.998.079,31
0,00
1.249.847,38
(2.914.288,30) 36.890.668,16 2.914.288,30 39.804.956,46
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
N
O
T
E
S
to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
GRUPO PESTANA, S.G.P.S., S.A.
Introduction
Group Pestana comprises Grupo Pestana, S.G.P.S.,
S.A. (Grupo Pestana SGPS or Company) and
subsidiary companies (see Note 1), being Tourism
its main activity.
The Company began the preparation
consolidated financial statements in 2003.
Hotel Pestana Carlton Madeira
Pestana Miramar Pestana Village Pestana Palms Pestana Atlantic Gardens Pestana Casino Park Hotel Pestana Bay Pestana Atalaia Pestana Grand Madeira Magic Casino da Madeira Centro Intern. Neg. Madeira Pestana Porto Santo Pestana Promenade a) Pestana Palace Pestana Porto Pestana Atlantic Gardens Pestana Sintra Golf Pestana Beloura Golf Resort
of
Location
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Madeira
Lisboa
Porto
Cascais
Sintra
Sintra
As at 31 December 2008, the Group Pestana
includes 30 hotels (2 under construction), 5 golf
courses, 1 casino, 1 thematic park, 41 lodginghouses, 1 travel agency and the management
entity of Madeira’s International Business Center.
Hotel Pestana Alvor Praia Pestana Alvor Park Pestana Delfim Pestana Dom João II
Pestana Alvor Atlantico Pestana Levante Pestana Porches Praia Pestana Viking Pestana Gramacho Golf Resort Pestana Vale da Pinta Golf Resort Pestana Silves Golfe Resort
Pestana Alto Golfe Resort
Pousadas de Portugal (Rede) Pestana Convento Carmo Pestana Trópico Pestana Kruger Lodge Pestana Buenos Aires
Pestana Caracas Pestana Londres b) Location
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Algarve
Portugal
Brasil
Cabo Verde
Africa Sul
Argentina
Venezuela
Reino Unido
a) = Inauguration in the first semester of 2009
b) = Inauguration in the second semester of 2009
Besides the traditional hotel management activity, the Group also explores resorts in the periodic
tenancy system (timeshare), tourist real estate
activity, tourist distribution and entertainment.
The notes to the financial statements follow the
sequential numbering defined in the Portuguese Official Plan of Accounts (POC). Standard notes not included are either not applicable to the
Company or their presentation is not relevant to
the reading of the referred financial statements.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Basis for consolidation
The consolidated financial statements have been
prepared in accordance with the accounting
principles generally accepted in Portugal and with
the consolidation rules defined in POC, with the
changes introduced by the Decree-law 238/91, of
2 July, and with the accounting directives from
“Comissão de Normalização Contabilística” (CNC).
1. CONSOLIDATED COMPANIES
The companies included in the consolidated financial statements, their registered office, consolidation
method and proportion of capital held, as at 31 December 2008, are as follows:
Companys’ name / Registered Office
%
Capital held
% of
control
Grupo Pestana, S.G.P.S., S.A. Holding Holding Largo António Nobre, 1 -Funchal Pestana Investimentos -Projectos Industriais e Serviços S.A. 100,00% 100,00% Largo António Nobre, 1 -Funchal M. & J. Pestana -Sociedade de Turismo da Madeira, S.A. 100,00% 100,00% Largo António Nobre, 1 -Funchal ITI -Sociedade de Investimentos Turísticos na Ilha da Madeira, S.A. 100,00% 100,00% Rua Imperatriz D. Amélia, 55 -Funchal Hotéis Atlântico -Sociedade Imobiliária e de Gestão de Hotéis, S.A. 99,92% 99,92% Largo António Nobre, 1 -Funchal Ponta da Cruz -Sociedade Imobiliária e de Gestão de Hotéis, S.A. 51,65% 51,65% Largo António Nobre, 1 -Funchal Rio de Prata -Consultadoria e Participações, S.A. 99,90% 99,98% Largo António Nobre, 1 -Funchal CapeGreen -Consultadoria Económica e Participações, S.A. 54,88% 54,28% Largo António Nobre, 1 -Funchal Energólica -Produção de Energia Eléctrica, S.A. 63,00% 63,00% Largo António Nobre, 1 -Funchal Pestana Saúde e Vida, S.A. 100,00% 100,00% Largo António Nobre, 1 -Funchal Carlton Life, S.G.P.S., S.A. 65,00% 65,00% Av Visconde de Valmor, 66 -4o -Lisboa Carlton Life – Serviços de Consultoria, S.A. 65,00% 100,00% Av Visconde de Valmor, 66 -4o -Lisboa Carlton Life – Cuidados de Apoio, S.A. 65,00% 100,00% Av Visconde Valmor, 66 -4o -Lisboa
Carlton Life Residências e Serv. 65,00% 100,00% Av Visconde de Valmor, 66 -4o -Lisboa Pestana Management
100,00%
100,00%
Largo António Nobre, 1 - Funchal
Mundo da Imaginação
78,34%
77,50%
Largo António Nobre, 1 - Funchal
Aplicações Múltiplas - Sociedade de Aplicações Financeiras, S.A.
83,00%
83,00%
Rau Jau, 54 - Lisboa
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Consolidation
Method
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
Full
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
%
Capital held
% of
control
Consolidation
Method
Grupo Pestana Pousadas - Investimentos Turísticos, S.A.
59,88%
59,88%
Full
Rua Jau, 54, freguesia de Alcântara, Lisboa
Carlton Palácio - Sociedade de Construção e Exploração Hoteleiras, S.A.
89,21%
100,00%
Full
Rua Tierno Galvan, Torre 3–6º - sala 601 - Lisboa
Porto Carlton - Sociedade de Construção e Exploração Hoteleira, S.A.
49,80%
60,00%
Full
Praça da Ribeira, nº1, 4050-513 Porto
Guiatur - Empreendimentos Turísticos da Guia Cascais, S.A.
87,22%
99,98%
Full
Av. Manuel Júlio Carvalho e Costa, 115 - Cascais
Quinta da Beloura Golfe, S.A.
79,02%
87,81%
Full
Rua das Sesmarias, nº 3, Quinta da Beloura, Sintra
Salvor, Sociedade de Investimento Hoteleiro, S.A.
94,52%
94,52%
Full
R. Rodrigo da Fonseca, 77 - 5º - Lisboa
Carvoeiro Golfe, S.A.
94,52%
100,00%
Full
Ald. Turístico do Gramacho, Lt4 - Carvoeiro
Amoreira - Aldeamento Turístico, Lda
94,52%
100,00%
Full
R. da Hortinha, 13 - 2A - Portimão
Eurogolfe, S.A.
94,52%
100,00%
Full
Costa Brava, Construções, Lda
94,52%
100,00%
Full
Vale de Currais - Carvoeiro
Sociedade Imobiliária Troia B3, S.A.
75,61%
80,00%
Full
R. da Prata, 10 - Lisboa
Sociedade de Investimento Hoteleiro D. João II, S.A.
94,52%
100,00%
Full
Praia Srª da Rocha, Alporchinhos - Porches - Lagoa
Viquingue, Sociedade Turística, S.A.
94,52%
100,00%
Full
Praia Srª da Rocha, Alporchinhos - Porches - Lagoa
Sociedade Agrícola dos Arcos, Lda
75,61%
80,00%
Full
R. do Municipio Lt H 2ºA - Leiria
Soc. Invest. Imob. Eira da Loba Lda.
89,79%
95,00%
Full
São Pedro e Poço dos Pardais - Lagoa
Carvoeiro Golfe Soc Mediação Imob Lda.
94,52%
100,00%
Full
Rolldown Golfe, Lda.
51,04%
54,00%
Full
Rua da Hortinha, 13, 2º A, 8500-593 Portimão
Natura XXI, Lda.
94,52%
100,00%
Full
Apartado 1011, 8401-908- Carvoeiro
Empreendimentos Turísticos, Lda
54,88%
100,00%
Full
Cidade da Praia - Ilha de Santiago - Cabo Verde
Argentur Inversiones Turisticas S.A.
99,96%
100,00%
Full
Buenos Aires - Argentina
Cota Quarenta, S.A.
99,99%
99,99%
Full
Largo António Nobre 1 – Funchal
SDM- Sociedade Desenvolvimento da Madeira, S.A.
15,00%
70,00%
Full
Rua da Mouraria 9, 1º andar, 9000-047 Funchal
Convento do Carmo, S.A.
44,91%
75,00%
Full
Rua do Carmo, s/n Pelourinho, 40301-330 Salvador
Wild Break 29 (PTY), Lda
56,24%
50,00%
Full
Malelane 1320 - South Africa
Southern Escapes Travel And Tourism (PTY), Lda.
56,24%
50,00%
Full
1 Hettie Street Cyrildene - 2198 Johannesburg
Pestana Inversiones, S.L.
99,96%
99,96%
Full
Pradillo, 5 Bajo Ext. dcha. -28002 Madrid Inversiones VistalParque, S.A.
46,41%
76,44%
Full
Primera Avenida Urbanización Santa Eduvigis-1071 Caracas
Herdade da Abrunheira, SA
66,67%
66,67%
Full
Heradade Abrunheira, Freguesia Urra-Portalegre
Enatur - Empresa Nacional de Turismo, S.A.
29,34%
49,00%
Equity Method
Avenida Santa Joana Princesa , nº 10, 1700 Lisboa
Albar - Sociedade Imobiliária do Barlavento, S.A.
49,81%
49,81%
Equity Method
Rua Tierno Galvan, Torre 3, sala 602, Amoreiras, 1070-274 Lisboa
EuroAtlantic Airways, Transportes Aéreos S.A.
20,00%
20,00%
Equity Method
Rua das Sesmarias, 3 Quinta da Beloura 2710-692 Sintra
Intervisa-Viagens e Turismo, S.A.
38,99%
38,99%
Equity Method
Av. Fontes Pereira de Melo, nº6-1050-121 Lisboa
GRUPO PESTANA SGPS
MANAGEMENT REPORT
2. COMPANIES EXCLUDED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS
Djebel S.G.P.S, S.A.
Largo António Nobre, 1, Funchal
%
Capital held
% of
control
Consolidation
Method
39,50%
39,50%
Equity Method
The share capital held in Djebel is booked at the acquisition cost, as the last share capital acquired of 20%
is available for sale.
6. OTHER FINANCIAL INVESTMENTS
(% OF OWNED SHARES GREATER THAN 10%)
Salvintur, Sociedade de Investimentos Turísticos, S.A. Rua Jau, 54 -Lisboa
%
Capital held
Shareholders’
Equity
Last year net
profit
17,96%
2.180.219,94
-566.938,38
7. AVERAGE NUMBER OF EMPLOYEES
During 2007 and 2008, the average number of employees in the consolidated companies was 3.624 and 3.432,
respectively.
8. APPROPRIATE AND FAIR PRESENTATION
In order to allow the appropriate and fair
presentation of the consolidated financial
statements, all income and expenses related
to Timeshare transactions in units managed by
the consolidated companies are not deferred
throughout the period of the related contract but
fully recognized in the profit and loss for the year
in which they occur.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
8. APPROPRIATE AND FAIR PRESENTATION
The impact of this procedure in the consolidated financial statements can be analyzed as follows:
Description 2008 Inventories Deferred costs
Sub-Total -2.595.757,95
-42.124.229,54
-2.813.468,41
-36.612.493,46
-44.719.987,49
-39.425.961,87
66.292.913,49
3.596.279,93
13.171.853,09
849.828,10
50.214.673,03
3.037.281,81
10.018.912,55
17.025.589,43
83.910.874,60
80.296.456,82
-149.608.580,74
20.977.718,65
-143.034.293,26
23.311.874,56
-128.630.862,09
-119.722.418,69
6.574.287,48
10.524.492,36
6.574.287,48
10.524.492,36
-217.710,46
5.511.736,08
-2.334.155,91
18.137,85
-229.115,09
5.690.097,47
1.139.289,74
886.938,43
2.978.007,55
7.487.210,55
Net results
Retained earnings Minority interests
Sub-Total Deferred income Deferred tax liabilities
Sub-Total Services rendered Sub-Total Cost of goods sold Supplies and services from third parties
Deferred tax assets
Minority interests
2007 Sub-Total Euros
The increase of the deferred income is explained by the huge success of the timesharing products sales.
The decrease in deferred taxes is the result of a reduction occurred in the Portuguese the tax rate.
10. CONSOLIDATION DIFFERENCES
a) Included in Shareholders’ Equity
The balances presented in this caption arise from the
first financial statements’ consolidation procedure
and represent the difference between the acquisition
cost and its shareholders’ equity proportional value
as at 1 January 2003. The referred amount includes
the net profits and reserves of affiliated companies,
accumulated until the date of the first financial
statements consolidation procedure. In some cases,
with the implementation of the new consolidated
system, these amounts were recalculated. The
recalculation impact didn’t affect the equity, as the
matching part was retained earnings and reserves.
This account also includes differences identified
during the intra-group balances reconciliation, the
impact of these differences are immaterial in the
consolidated financial statements.
As at 31 December 2008, this caption can be analyzed as follows:
Company
2008 2007 Financial investments
26.846.642,01
28.786.126,26
Balances and transactions reconciliation
9.512,67
-250.316,37
Exchange rate conversion
Total
-1.452.626,68
-1.206.073,24
25.403.528,00
27.329.736,65
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
10. CONSOLIDATION DIFFERENCES
b) Included in Intangible Assets
This caption balance as at 31 December 2008 includes the differences between the acquisition cost and
the proportional value of the shareholders’ equity of the subsidiaries at the acquisition date, for acquisitions
after 1 January 2003 (after first consolidation), and can be presented as follows (net of accumulated
depreciations):
Company
M&J Pestana Hoteis Atlantico Energólica Carlton Palacio Porto Carlton Quinta Beloura Guiatur Viquingue Enatur Eira da Loba Soc. Agricola dos Arcos Natura XXI. Lda.
Empreend. Turisticos Argentur Inversiones Vistalparque Total 2008
Years
18.144.504,61
0,00
0,00
1.717.626,46
34.759,36
698.199,63
115.211,38
681.144,47
1.534.952,64
290.924,95 457.353,59
759.205,01
693.115,10
395.261,57
551.338,55
10
5
5
10
5
6
5
8
10
8
8
8
8
6
5
2007
Years
22.819.197,95 21.682,46 0,00 2.003.897,42 69.518,73 872.749,54 230.422,75 1.021.716,70 1.918.690,79 382.049,97 546.429,52 0,00
1.039.672,68 589.384,23 689.173,19 26.073.597,32
10
5
5
10
5
6
5
8
10
8
8
0
8
6
5
32.204.585,94
Euros
17. DEPRECIATION OF THE
CONSOLIDATION DIFFERENCES
The consolidation differences are depreciated over the estimated investments’ payback period that, in some
cases, can exceed the five years term (see Note 10).
22. GUARANTEES PROVIDED
As at 31 December 2008, the Group has assumed responsibilities with guarantees given to third parties as follows:
Mortgages Mortgages over hotels buildings Mortgages over lands 2008
2007
107.094.818,18
56.501.077,37
107.094.818,18
16.989.181,00
163.595.895,55
124.083.999,18
Guarantees
2008
2007
Surety bonds and Liabilities coverage Bank guarantees
Loans pledges 34.898.896,86
53.116.485,37
2.195,00
19.358.859,55
45.880.627,83
2.195,00
88.017.577,23
65.241.682,38
Euros
The increase in mortgages and guarantees is mainly related to the hotel “Pestana Caracas” and its related
debt, expressed in Bolivares Fuertes (Venezuela).
GRUPO PESTANA SGPS
MANAGEMENT REPORT
23. BASIS OF PRESENTATION
AND ACCOUNTING PRINCIPLES
Basis of Presentation
The accompanying consolidated financial statements have been prepared in a going concern
basis and based on the accounting books and
records of the companies included in the consolidation (see Note 1), maintained in accordance
with generally accepted accounting principles
in Portugal (“PGAAP”).
Consolidation Principles
The consolidation of the subsidiaries stated
on Note 1 was prepared according to the full
consolidation method. The transactions and relevant balances between the companies were
eliminated in the consolidation process. The
amount related to third parties participation
in subsidiaries’ capital is stated in the caption
Minority interests. The goodwill was accounted
for in intangible assets (consolidation differences) and depreciated over the estimated period
for the investment payback period. The remaining consolidation differences, resulting from
the difference between the acquisition cost
and its shareholders’ equity proportional value,
were accounted for in Shareholders’ equity of
the consolidated balance sheet.
Financial investments in associated companies
referred in Note 1, are recorded in the consolidated balance sheet by its acquisition value or,
if lower, by the estimated net realizable value.
This amount is adjusted by the equity method
usage.
Financial investments corresponding to less
than 20% of capital held are registered at acquisition cost or, if lower, at the estimated net
realizable value.
Main Accounting Principles
The following is a summary of the most significant accounting principles followed in the
preparation of the accompanying consolidated
financial statements:
a) Intangible Assets
The patents, brand names and other rights relates to the amount paid for the “Pousadas de
Portugal” concession and is being depreciated
by the correspondent concession period.
The consolidation differences are depreciated
over the investments’ estimated payback period.
The remaining intangible assets are accounted
for at acquisition cost and depreciated on a
straight line basis over a 6 years period.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
b) Tangible Assets
d) Financial Investments
Tangible assets acquired until 31 December
1997 are accounted at revaluated cost according to official decree-laws (see Note 41) based
upon price-adjustment factors. The remaining
tangible assets are valued at acquisition cost.
Financial investments in associated companies
are accounted for at its acquisition cost or, if
lower, at the estimated net realizable value. This
amount is adjusted by the equity method.
Depreciation is provided on a straight-line basis
according to the following estimated useful lives:
Years
Buildings and other constructions Basic equipment
Hotel furniture Clothes and Towels
Dishes, Glasses and Cutlery
Decoration
Other
Transportation equipment
Bus vehicles
Car vehicles Tools
Administrative equipment
Other tangible assets
40
16
4-10
6-8
8
14-20
7
4
8-10
4-8
4-8
Financial investments corresponding to participations less than 20% of the companies capital
are registered at acquisition cost or, if lower, at
the estimated net realizable value.
e) Inventories
Goods, raw and subsidiary materials and consumables are valued at the acquisition cost,
which is lower than the market value (being the
cost generally determined on the basis of the
average purchase cost). Finished, semi-finished
products and work in process are valued at production cost, which includes direct costs and
expenditures. This valuation does not exceed
the market value.
Adjustments to stocks correspond to the difference between the cost value and the respective inventory net realizable value.
c) Financial leases
Financial leases are recorded in the financial
statements as tangible assets at their equivalent capital value and are depreciated over their
useful lives (see Note 23.b). The corresponding
liability is recorded as a creditor balance and the
interest element of the lease rental is charged
against profit and loss account over the primary
lease period.
f) Adjustment for doubtful debts
When the estimated recovering value of trade
debtors’ balances is less than the accounted value, the estimated loss is covered with an adjustment for doubtful debts.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
g) Marketable securities and bonds
Marketable securities and bonds are stated at the
lower of cost or market value.
h) Accrual basis
Costs and revenues are recorded during the year
to which they refer regardless of when they are
paid or received, in accordance with the accrual
basis principle. Differences between amounts received and paid and the corresponding revenue
and expenditure are recorded under accruals and
deferrals.
i) Timeshare income and expenses
All income and expenses related to Timeshare
transactions in units managed by Grupo Pestana
SGPS are not deferred throughout the period of
the related contract but fully recognized in the
profit and loss for the year in which they occur.
j) Governmental grants
The non refundable subsidies received to finance
the acquisition of tangible assets are accounted
for as deferred income and registered in the profit
and loss account proportionally to its depreciation
charge.
l)Assets and liabilities expressed in foreign currencies
All assets and liabilities expressed in foreign currency have been converted into Euros using the
exchange rate ruling on the balance sheet date
and published by Banco de Portugal.
Favorable and unfavorable exchange rate differences are recorded in the profit and loss account
for the year in which they arise.
m) Deferred taxes
Deferred taxes relates to temporary differences
between the carrying value of assets and liabilities
and the corresponding amounts for tax purposes.
Deferred taxes assets and liabilities are calculated,
and annually revalued, using the tax rates that are
expected to be in force at the time of reversion of
the respective temporary differences.
A deferred taxes asset is registered only when there are reasonable expectations of sufficient future
taxable profits. At the balance sheet date is made
a revaluation of the temporary differences underlying deferred taxes asset, in order to register or
adjust it according to current expectations.
n) Financial statements expressed in foreign currencies
The financial statements of Group and associated companies expressed in foreign currency
were converted into Euros using the respective
exchange rate ruling on at year end. The profit
and loss accounts were converted into Euro at
the average exchange rate of the year. The equity
accounts were converted into Euros at historical
exchange rates.
Exchange rate differences have been included in
Shareholders’ equity in the caption Conversion
differences.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
24. EXCHANGE RATES USED
Euros
Assets and liabilities expressed in foreign currencies have been converted into Euro using the following
exchange rates:
31|12|08
United States Dollar
South African Rand
Great Britain Pound
Mozambique Metical (1.000.000)
Cape Verde Escudo
Argentine Peso
Brazilian Real
Bolivar Fuerte
1.3917
13.0667
0.9525
35.224.2000
110.265
4.8736
3.2436
3.0371
31|12|07
1.3193
9.2124
0.6733
34.470.0000
110.2650
4.0474
2.8118
-
27. FIXED ASSETS MOVEMENTS
During 2008, the movements occurred in fixed assets, as well as in the related accumulated depreciations
and adjustments, were as follows:
GROSS AMOUNTS
Opening Transfers and Closing
Balance Increases Disposals write-off Balance
Intangible assets: Start-up expenses
5.969.824,64 195.678,67 - (2.453.483,96)
3.712.019,35
Research and development costs
200.282,90
258.573,43 -
(443.908,43)
14.947,90
Patents, brand names and other rights
19.182.734,82 316.488,67 -
-
19.499.223,49
Key money premiums
1.904.255,26 150.000,00 -
(252.908,45)
1.801.346,81
Intangible asstes in progress
4.341.801,39 108.340,41 -
(72.925,39)
4.377.216,41
Advances paid on account of intangible fixed assets
-
-
-
-
54.955.818,74 1.920.488,94 -
-
56.876.307,68
86.554.717,75 2.949.570,12 - (3.223.226,23)
86.281.061,64
Tangible assets: Land and natural resources
57.784.212,68 4.071.057,86 (1.450.077,78)
1.086.984,85 61.492.177,61
Buildings and other constructions
368.019.539,08 16.495.324,05 (985.318,26) 43.019.848,29 426.549.393,16
Basic equipment
148.132.645,49 14.184.740,97 (839.893,96) 16.824.562,99 178.302.055,49
2.930.529,03 339.182,19 (31.080,98)
(43.375,00)
3.195.255,24
Tools
637.558,35 70.943,66 (416,65)
568,74 708.654,10
14.285.343,85 648.839,08 (18.298,31)
1.194.924,42 16.110.809,04
Containers
-
-
-
-
Other fixed assets
730.868,60 -
-
(129.066,64)
601.801,96
Fixed assets under construction
82.001.477,26 52.742.821,22 - (54.443.507,67)
80.300.790,81
Advances paid on account of tangible fixed assets
805.385,19 504.790,63 -
(796.075,13)
514.100,69
675.327.559,53 89.057.699,66 (3.325.085,94) 6.714.864,85 767.775.038,10
Financial investments:
Shares in group companies
-
-
-
-
Loans to group companies
-
-
-
-
Shares in associated companies
10.511.911,26 55.519,27 -
2.956.724,19 13.524.154,72
Loans to associated companies
9.175.000,00 -
- (3.175.000,00)
6.000.000,00
Shares in participated companies
2.462.648,48 990.992,00 -
3.817.194,23 7.270.834,71
Loans to participated companies
2.983.819,99 -
-
(15.000,00)
2.968.819,99
Other financial investmens
23.933.054,10 273.656,75 (2.395.130,20) (11.215.939,49)
10.595.641,16
Other loans granted
-
-
-
-
Investments in progress
1.099.227,36 1.540.033,36 (799.077,11)
-
1.840.183,61
Advances paid on account of financial investments
-
-
-
-
50.165.661,19 2.860.201,38 (3.194.207,31) (7.632.021,07)
42.199.634,19
812.047.938,47 94.867.471,16 (6.519.293,25) (4.140.382,45) 896.255.733,93
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Opening
Balance Accumulated depreciations and adjustments
Charge for
Retirement
Closing
the period Disposals Balance
Intangible assets:
Start-up expenses
Research and development costs
Patents. brand names and other rights
Key money premiums
5.201.556,16
487.094,22
(2.401.691,45)
167.230,01
3.600,00
(159.482,11)
11.347,90
7.175.523,86
656.985,61
-
7.832.509,47
379.914,36
199.215,80
-
579.130,16
-
-
-
-
22.751.232,80
8.051.477,56
-
30.802.710,36
35.675.457,19
9.398.373,19
(2.561.173,56)
42.512.656,82
Intangible asstes in progress
3.286.958,93
Tangible assets:
Land and natural resources
-
-
-
-
133.273.379,53
15.930.543,71
(494.397,52)
148.709.525,72
Basic equipment
87.955.211,71
8.657.232,96
(1.310.780,53)
95.301.664,14
1.962.639,67
595.015,60
(47.608,92)
2.510.046,35
466.706,36
44.025,99
(419,68)
510.312,67
11.944.704,95
1.800.538,06
(39.925,07)
13.705.317,94
Tools
Containers
-
-
-
-
67.992,40
23.269,08
-
91.261,48
235.670.634,62
27.050.625,40
(1.893.131,72)
260.828.128,30
Other fixed assets
Other financial investments
949.417,06
170.418,55
(1.115.279,06)
949.417,06
272.295.508,87
170.418,55
36.619.417,14
(1.115.279,06)
(5.569.584,34)
4.556,55
4.556,55
303.345.341,67
Euros
32. MOVEMENTS IN ADJUSTMENTS
During 2008, the movements occurred in adjustments can be analyzed as follows:
Opening
Balance Inventories:
Goods
Products and work in progress
Receivables from third parties - Short term:
Trade debtors - third companies
Doubtfull debts - third companies
Other debtors - thrid companies
Charge for the
Period Transfers Retirements 0,00
6.484.372,66
6.484.372,66
152.168,65
0,00
152.168,65
0,00
0,00
0,00
0,00
0,00
0,00
4.373.045,72
5.435.355,52
411.865,15
10.220.266,39
0,00
110.701,61
0,00
110.701,61
0,00
0,00
0,00
0,00
-3.369.053,15
0,00
0,00
-3.369.053,15
Closing
Balance
152.168,65
6.484.372,66
6.636.541,31 1.003.992,57
5.546.057,13
411.865,15
6.961.914,85
Financial Investments
Other financial investments
0,00
5.313,66
0,00
0,00
5.313,66
0,00
5.313,66
0,00
0,00
5.313,66
Euros
The adjustment for receivables from trade-debtors was reduced in 2008, being registered as an
extraordinary cost. The value cancelled this year
was provided for in the past. This value was the
result from exchange rates differences verified in
the time-sharing contracts’ throughout the last
25 year period, however, the exact amount to be
reduced was only accurately calculated with the
implementation of a new software platform to
oversee such contractual conditions.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
33. DEBTS TO THIRD PARTIES (MORE THAN 5 YEARS)
As at 31 December 2008, there was the following debts payable beyond the next 5 years:
2008
Debts to credit institutions
2007
54.596.418
74.685.158
Euros
34. DEBTS TO THIRD PARTIES COVERED
BY REAL WARRANTIES
As at 31 December 2008, there were debts to third parties amounting to Euros 163.595.895,55, covered
by mortgages over some of the Group’s hotels (see Note 22).
36. SALES AND SERVICES RENDERED
BY BUSINESS AREA AND GEOGRAPHICAL MARKETS
Description Sales
Internal market
External market Total (n)
Goods
1.401.230,59 312.346,02 1.713.576,61
Allotments
1.333.512,91 5.710.288,15 7.043.801,06
2.734.743,50 6.022.634,17 8.757.377,67
Services Rendered
Hotels
Mercado interno
Mercado externo Total (n)
108.851.883,72 54.292.006,87 163.143.890,59
Golf
3.970.497,02 6.860.148,00 10.830.645,02
Construction
4.455.857,37 10.873.072,36 15.328.929,73
Casino
11.688.707,50 881.254,92 12.569.962,42
Others
10.701.818,77 1.169.803,77 11.871.622,54
139.668.764,38 74.076.285,92 213.745.050,30
142.403.507,88 80.098.920,09 222.502.427,97
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
38. DIFFERENCES BETWEEN
THE ACCOUNTING AND TAX RESULTS
As a result of the fixed assets revaluations (see
Notes 41 and 42), the depreciation from future
years are increased comparing to the acquisition
cost. According to the Portuguese tax law, 40%
of this raise is not accepted as cost for fiscal purposes. The different tax systems of each Group
company were also considered for the computation of the respective deferred taxes.
can be deducted to tax profits generated in a
six years period from its occurrence. As at 31
December 2008, the Group companies had tax
losses carry forward that generate deferred tax
assets of Euros 4.777.216,05.
Deferred taxes concerning timeshare are the result of the adjustment referred in Note 8.
According to Portuguese tax law, tax losses
Total Description
2008 Movements in Profit
and Losses Statements
2007 2008 2007
I Income tax for the year 1 Fixed assets revaluation
2 Fiscal reserve Investment
3 Depreciation rates effect
4 Timesharing
5 Tax losses carryforward
1.468.337
-1.923.056
0
0
-2.334.156
988.700
4.247.364
-196.019
0
0
1.139.289
-906.458
1.468.337
-1.923.056
0
0
-2.334.156
988.700
4.247.364
-196.019
0
-274.891
1.139.289
-906.458
IIDefered tax
III Income tax (I-II)
-3.268.512
4.736.849
-238.079
4.485.443
-3.268.512
4.736.849
-238.079
4.485.443
Euros
Description
5 Taxes losses carryforward Defered tax assets 1 Fixed assets revaluation 2 Fiscal reserve Investment 3 Depreciation rates effect 4 Timesharing Defered tax liabilities Total
2008 2007
4.777.216
5.765.916
4.777.216
1.042.307
0 0 5.765.916
2.965.364
0
0
20.977.719
23.311.875
22.020.026
26.277.238
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
39. WAGES OF BOARD MEMBERS
The wages of Group Pestana board members were as follows:
2008
2007
419.184
Board of Directors 150.864
Euros
41. REVALUATION OF TANGIBLE ASSETS
In previous years the Group has revaluated its tangible assets according to applicable legislation, namely:
n
Decree-Law 126/77, of 2 April
n
Decree-Law 219/82, of 2 June
n
Decree-Law 49/91, of 25 January
n
Decree-Law 264/92, of 24 November
n
Decree-Law 31/98, of 11 February
42. TANGIBLE ASSETS HISTORICAL
COSTS AND REVALUATIONS
The breakdown of tangible assets historical costs, and the corresponding revaluations, net of accumulated
depreciations, as at 31 December 2008, can be analyzed as follows (according to the amounts presented in
the individual financial statements of each company):
Historical Cost (a)
revaluation (a) (b) Revaluate Book-Value
(a)
Land and natural resources 18.287.768,57
15.673.290,13
33.961.058,70
89.203.429,52
25.151.563,46
114.354.992,98
Basic equipment
27.536.530,30
425.590,24
27.962.120,54
266.499,65
0,00
266.499,65
35.926,15
0,00
35.926,15
483.041,53
10.596,58
493.638,11
1.635.362,41
0,00
1.635.362,41
137.448.558,13
41.261.040,41
178.709.598,54
Tangible Assets:
Tools
Administrative equipment Other fixed assets (a) Net amounts
(b) Include the successive revaluations
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Euros
44. CONSOLIDATED STATEMENT
OF FINANCIAL RESULTS
Costs and Losses
YEAR-END
31|12|2008 YEAR-END
31|12|2007
Profits and Gains
31|12|2008 31|12|2007
Interests paid
17.614.449,79 13.403.885,79
Interests received
2.732.790,00
2.426.076,41
Losses from financial investments 0,00
0,00
Income from financial investment
2.855.668,13
2.717.191,34
Depreciation of investments
4.556,55
165.862,00
Income from investments
8.251,30
11.720,96
in fixed assets
in fixed assets
Losses in associated companies
43.412,55
162.337,86
Gains associated companies
765.960,35
768.259,84
Adjustments in financial investments
8.368.552,57
4.865.080,29
Gains in other group companies
913.244,96
797.383,96
Exchange rate losses
4.651.715,46
1.842.086,62
Exchange rate gains
6.188.896,97
2.354.519,74
Cash discounts granted
9.723,14
8.348,42
Cash discounts obtained
79.944,38
84.675,44
Losses on sale of short
0,00
0,00
Gains on sale of short
342,60
3.008,53
term applications
term applications
Other financial costs
1.732.108,18
2.098.912,07
Reversions and other
44.681,54
152.941,83
financial gains
Financial results
-18.834.738,01 -13.230.735,00
13.589.780,23
9.315.778,05
13.589.780,23
9.315.778,05
Euros
45. CONSOLIDATED STATEMENT
OF EXTRAORDINARY RESULTS
Costs and Losses
YEAR-END
YEAR-END
31|12|2008 31|12|2007 Donations 307.022,30
203.459,18 Taxes returned back by the State Bad debts 443,27
180.684,21 Losses on inventories 15.578,78
Losses on fixed assets Fines and penalties Increase of depreciation Prior year losses 31|12|2008 31|12|2007
0,00 0,00
Bad debts recovered 2.982,00
16.882,00
57.399,36 Gains on inventories 7.916,78
23.700,03
536.818,44
200.185,80 Gains in fixed assets
6.435.248,53
1.695.657,31
33.521,18
38.146,43 Gains from contractual penalties 201.625,25
26.925,87
0,00 0,00 Gains from reductions of provisions
275.780,37
341.294,89
121.068,17
85.888,29 Prior year gains 862.179,52
269.090,95
1.168.975,54
1.538.725,05
8.954.707,99
3.912.276,10
Other extraordinary costs and losses 5.094.800,56
310.795,54
Extraordinary results Profits and Gains
2.845.455,29
8.954.707,99
Other extraordinary profits
and gains 2.835.717,29
3.912.276,10
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
46. MOVEMENTS IN PROVISIONS
Opening
Balance Increase Caption Provisions for pensions Decrease Closing
Balance
8.382,86
0,00
550,39
7.832,47
Provisions for taxes 93.409,40
0,00
42.710,60
50.698,80
Provisions for judicial processes
59.639,55
14.549,70
26.000,00
48.189,25
Warranty provisions 21.383,77
0,00
1.747,12
19.636,65
Other provisions
TOTAL 225.210,06
48.111,82
29.612,85
243.709,03
408.025,64
62.661,52
100.620,96
370.066,20
Euros
47. FINANCIAL LEASES
As at 31 December 2008, the Group had accounted for the following amounts as financial leases:
Caption
Acquisition cost
(+)
Financial Investment in Buildings
8.005.765,07
Land and natural resources
- Accumulated
Payable to third parties
depreciations Short term Medium / Long
(-)
term
1.115.279,06
- 410.381,37
-
3.918.102,99
- Total
debts
(n)
4.328.484,36
-
7.012.664,04
1.937.709,53
71.442,48 5.240.625,00
5.312.067,48
Basic equipment
6.991.945,43
4.379.474,72
375.029,79 315.237,66
690.267,45
652.399,31
382.482,54
108.989,40 235.352,38
344.341,78
- - Transportation equipment
Tools
Other fixed assets
2.740,00
516.403,78
1.680.796,39
24.862.714,02
1.027,52
486.062,98
- 8.302.036,35
-
26.686,83 12.816,97
306.720,40 1.342.891,83
1.649.612,23
39.503,80
1.299.250,27 11.065.026,83
12.364.277,10
Euros
Funchal, 9 April 2009
José Alexandre Lebre Theotónio – Memberl
The official accountant
Jorge da Silva Figueira
GRUPO PESTANA SGPS
MANAGEMENT REPORT
FINANCIAL
Statements
Balance Sheet as at 31 December 2008
Account code
CEE (a) Year-end
Assets
POC GA
2008 D A
2007
NA
NA
C FIXED ASSETS:
I Intangible Assets
1
431Start-up expenses
63.199,28 18.033,28 45.166,00 1
432Research and development costs
0,00 0,00 0,00 2
433Patents, brand names and other rights
426.792,87 355.391,87 71.401,00 489.992,15 373.425,15 116.567,00 II Tangible Assets
1
422Buildings and other constructions
0,00 0,00 0,00 2
424Transportation equipment
117.516,49 117.516,49 0,00 3
425Tools
0,00 0,00 0,00 3
426Administrative equipment
5.171,64 5.171,64 0,00 122.688,13 122.688,13 0,00 III Financial Investments
1
4111Shares in group companies
270.072.220,55 0,00 270.072.220,55 2
4121+4131Loans to group companies
58.587,57 0,00 58.587,57 3
4112Shares in associated companies
21.287.061,45 0,00 21.287.061,45 4
4122+4132Loans to associated companies
6.000.000,00 0,00 6.000.000,00 5
4113+414+415Other financial investments
5.000.000,00 107.985,00 4.892.015,00 6
4123+4133Other loans granted
0,00 0,00 0,00 6
441/6Investments in progress
150,25 0,00 150,25 6
447/448Advances paid on account of financial investments
0,00 0,00 0,00 302.418.019,82 107.985,00 302.310.034,82 303.030.700,10 604.098,28 302.426.601,82 Total fixed assets
D CURRENT ASSETS:
IInventories
II
Receivables from third parties -long
term Public entities
0,00 0,00 0.00 0,00
0,00
44.174,00
44.174,00
0,00
29.378,99
0,00
0,00
29.378,99
216.287.187,26
1.359.927,87
17.346.760,21
9.175.000,00
5.008.480,91
0,00
0,00
0,00
249.177.356,25
249.250.909,24
0,00
0,00 0,00 0,00 0,00
Other debtors
0,00 0,00 0,00 1.200.000,00
0,00 0,00 0,00 1.200.000,00
II Receivables from third parties -short term
1
211Trade debtors
5.583.826,06 0,00 5.583.826,06 826.089,43
1
218Doubtful debts
0,00 0,00 0,00 0,00
2
252Group companies
0,00 0,00 0,00 0,00 4
24Public entities
428.118,82 0,00 428.118,82 202.989,33
4
262/6/7/8+221Other debtors
1.259.515,12 0,00 1.259.515,12 87.427,10 5
264Capital subscribed but not paid up
0,00 0,00 0,00 0,00
7.271.460,00 0,00 7.271.460,00 1.116.505,86
III Marketable securities and bonds
3 1513+1523+153/9Other marketable securities
0,00 0,00 0,00 0,00
3
18Other short term applications
32.736.261,04 0,00 32.736.261,04 29.822.848,47
32.736.261,04 0.00 32.736.261,04 29.822.848.47
IV Cash and banks
12+13+14Bank deposits
289.904,22 289.904,22 167.985,75
11Cash
0,00 0,00 0,00
289.904,22 289.904,22 167.985,75
40.297.625,26 0,00 40.297.625,26 31.107.340,08
Total current assets
E ACCRUED INCOME AND DEFERRED COSTS:
271Accrued income
1.022.832,77 1.022.832,77 749.207,48
272Deferred costs
18.332,06 18.332,06 16.941,68
2761Deferred taxes asset
0,00 0,00 0,00
1.041.164,83 1.041.164,83 766.149,16
496.113,28 Total depreciations
107.985,00 Total adjustments
344.369.490,19 604.098,28 343.765.391,91 282.324.398,48
Total assets
(a) According to the 9th article of the EU’s 4th directive Abbreviations: G A - Gross Assets | D A - Depreciations and Adjustments | N A - Net Assets
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Euros
Balance Sheet as at 31 December 2008
Account code
CEE (a) A Shareholders’ equity and liabilities Year-end
POC 2008 2007
SHAREHOLDERS’
EQUITY:
I
51
Share capital
80.000.000,00 80.000.000,00
521
Own Shares -Par value
0,00 0,00
522
Own Shares -Premiums and discounts
0,00 0,00
53
Supplementary capital
56.000.000,00 21.000.000,00
II
54
Premiums on issuance of shares
33.742.337,64 33.716.655,44
III
55
Adjustments to investments in affiliated and associated companies
13.140.532,15 12.965.447,82
56
Revaluation reserves
0,00 0,00
IV
Reserves
1/2
571
Legal reserves
965.928,14 325.928,14
3
572
Statutory reserves
0,00 0,00
4
573
Contractual reserves
0,00 0,00
4
12.661.276,43 12.661.276,43
574 a 579
Other reserves
V
59
Retained earnings
Sub-total
88 Net profit/(loss) for the year
89 Anticipated dividends
8.800.115,96
169.469.423,79
17.922.022,10 12.703.044,17
0,00 0,00
235.295.256,59 182.172.467,96
VI 20.863.160,13 217.373.234,49 LIABILITIES: Provisions
B
Total shareholders’ equity
1
291 Provision for pensions
0,00 0,00
2
292 Provision for taxes
0,00 0,00
3
293/8 Other provisions
0,00 0,00
0,00 0,00
parties -long term
Debts to third
C
Bonds
Security-based loans
0,00 0,00
36.250.000,00 37.500.000,00
Fixed assets suppliers -bills payable
0,00 0,00
252
Group companies
0,00 0,00
265
Other creditors
0,00 1.488.727,18
36.250.000,00 38.988.727,18
Bank loans
C
1
parties -short term
Debts to third
Bond-based loans
2321
Convertible
0,00 0,00
2
231+12
Bank loans
15.669.060,47 5.997.075,42
4
221
Trade creditors
665.055,27 109.846,24
6
252
Group companies
8
8
8
234/239
Other loans
2611
Fixed assets suppliers
24
Public entities
8
262+263+264+265+
Other creditors
+267+268+211 D 0,00 0,00
49.102.092,47 53.471.172,96
42.433,00 0,00
668.039,07 113.244,53
1.546.596,36 209.049,67
67.693.276,64 59.900.388,82
ACCRUED COSTS
AND DEFERRED INCOME:
273
Accrued costs
1.326.858,68 1.262.814,52
274
Deferred income
3.200.000,00 0,00
2762
Deferred taxes liability
0,00 0,00
4.526.858,68 1.262.814,52
Total liabilities
108.470.135,32 100.151.930,52
Total shareholders’ equity and liabilities
343.765.391,91 282.324.398,48
(a) According to the 9th article of the EU’s 4th directive.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Euros
INCOME STATEMENT BY NATURE
For the year-ended December 31st 2007
Account
code
CEE (a) A
POC
Euros
Year-end
2008 2007
COSTS AND LOSSES
2.a) 61 Cost of goods sold and materials consumed
Goods
0,00 0,00 Raw and subsidiary materials and consumables
0,00 0,00 0,00 0,00 External services and supplies from third parties
2.b) 62 237.225,68 344.500,77 Personnel costs
3 Wages
583.635,34 318.279,00 3.a) 641+642
Social Charges:
3.b) Pensions
643+644
0,00 0,00 Others
645/8
53.229,43 636.864,77 55.073,01 373.352,01 Depreciations and amortization
66
53.248,84 164.607,96
4.a)
of tangible and intangible
4.b)
666
0,00 0,00 Doubtful debts adjustments
67
0,00 53.248,84 0,00 164.607,96 5
Provisions
5
63
10.537,98 15.352,50 Taxes
5
65
43.350,08 53.888,06 15.000,00 30.352,50 Other operational costs and losses
981.227,35 912.813,24 (A) .....................................
Losses in group and associated companies
6
682
58.133,97 1.058.550,45 Depreciations and adjustments for financial
6
683+684
460.010,43 488.773,80 investments
7
(2)
Interests and similar costs:
Group Companies
2.647.168,09 1.792.167,82 Others
2.494.584,43 5.659.896,92 2.529.092,00 5.868.584,07 (C) .....................................
6.641.124,27 6.781.397,31 69 1.800,01 1.753,63 10 Extraordinary costs and losses
6.642.924,28 6.783.150,94 (E) .....................................
8 + 11
86
3.562,40 4.018,92
Income tax for the year
6.646.486,68 6.787.169,86 (G) .....................................
13
88
17.922.022,10 12.703.044,17
Net profit/(loss) for the year
24.568.508,78 19.490.214,03 B PROFITS AND GAINS
1
71 Sales
0,00 0,00 Goods
0,00 0,00 Products
1
72 0,00 0,00 0,00 0,00 Services rendered
Increase in stocks of finished products
(3) 0,00 and work-in-process
Self constructed fixed assets
3
75 0,00 Supplementary revenue
4
73 710.983,62 723.659,77 Grants received to operations
4
74 0,00 0,00 Other operational profits and gains
4
76 800.000,00 0,00 Reversions of depreciations and adjustments
4
77 0,00 1.510.983,62 0,00 (B) .....................................
1.510.983,62 Gains in group and associated companies
5
782
20.595.598,16 16.596.847,05 Dividends received
5
784
0,00 4.487,14 Gains in marketable securities and other
6
(4)
financial aplications:
Group Companies
1.898.850,55 1.337.475,96 Others
0,00 0,00 Other interests and similar gains:
7
(5)
Group Companies
254.128,37 240.236,01 Others
253.417,99 23.001.995,07 320.408,04 (D) .....................................
24.512.978,69 Extraordinary profits and gains
9
79
55.530,09 (F) .....................................
24.568.508,78 2
SUMMARY
Operational profit/(loss): Current profit/(loss): Current profit/(loss): Profit/(loss) before income tax:
Profit/(loss) before income tax:
(B)-(A)=
(D-B)-(C-A)=
(D)-(C)=
(F)-(E)=
(F)-(G)=
(1) According to the 24th article of the EU’s 4th directive
(2) 681 + 685 + 686 + 687 + 688
(3) Difference between inventories at the beggining and at the end of the period
of “Finished and intermediary products” (C/33), “By-products and wastage”
529.756,27 17.342.098,15 17.871.854,42 17.925.584,50 17.922.022,10 0,00 0,00 723.659,77 723.659,77 18.499.454,20 19.223.113,97 267.100,06
19.490.214,03
-189.153,47
12.630.870,13 12.441.716,66 12.707.063,09 12.703.044,17 (C/34) and “Work-in-process” (C/35), taking in consideration the amount
registered in “Inventories regularization” (C/38)
(4) 7812 + 7815 + 7816 + 783
GRUPO PESTANA SGPS
MANAGEMENT REPORT
INCOME STATEMENT BY FUNCTIONS
For the year-ended 31 December 2008
Year-end
Euros
2008 2007 Sales and services rendered
0,00
0,00
Cost of sales and services rendered
0,00
0,00 0,00 0,00
Gross margin Other operational profits and gains
1.566.513,71
1.309.414,24 Distribution costs
0,00 0,00 Administrative costs
-647.402,75
-388.704,51 Other operational costs and losses
-398.057,81
-524.108,73 521.053,15
396.601,00 Net Funding costs
-2.672.922,41
-2.529.092,00 Gains/(Losses) in group and associated companies 20.537.464,19
15.323.840,75 Gains/(Losses) in other investments
-460.010,43
-484.286,66 0,00 0,00 17.925.584,50
12.707.063,09 Operational profit Unusual gains/(losses)
Current profit and loss Income tax over current profit and loss
Current profit and loss after income tax -4.018,92
17.922.022,10
12.703.044,17
Extraordinary profit and loss
0,00 0,00 Income tax over extraordinary profit and loss
0,00 0,00 Profit attributable to minority interests 0,00 0,00 0,00 0,00
0,00 0,00 Net profit/(loss) for the year Changes in accounting policies (net of tax) -3.562,40
Net profit/(loss) for the year 17.922.022,10
12.703.044,17
Net profit/(loss) per share 1,12
0,79
COMPUTATION OF NET PROFIT AND LOSS PER SHARE:
Net profit/(loss) for the year
Net profit/(loss) allocated to preference shares
Net profit/(loss) allocated to shares entitled to ordinary dividends
Number of shares entitled to dividends
Net profit/(loss) per share
17.922.022,10
0,00
17.922.022,10
16.000.000,00
1,12
GRUPO PESTANA SGPS
MANAGEMENT REPORT
12.703.044,17
0,00
12.703.044,17
16.000.000,00
0,79
STATEMENT OF CASH-FLOWS
For the year-ended 31 December 2008
Year-end
Direct Method
+
-
OPERATING ACTIVITIES
Cash receipts from trade debtors (a)
Cash paid to trade creditors (b)
Cash paid to employees
Cash-flow from operations
2008 ++-
Income taxes received/(paid) (c)
Other receipts/(payments) of operating activities (d)
Cash-flow before extraordinary items +
-
Cash received related to extraordinary items
Cash payments related to extraordinary items
Net cash-flow from operating activities [1] 3.036.534,45
2.245.644,34
-3.358.380,63
-1.124.441,97
-595.138,62
-372.139,71
-916.984,81
749.062,66
-141.077,98
-114.046,99
-495.391,40
123.894,29
-1.553.454,19
758.909,96
0,00 0,00 0,00 0,00 -1.553.454,19
2007
758.909,96
INVESTMENT ACTIVITIES
Receipts from:
Financial investments (e)
Tangible assets
Intangible assets
Government grants
Interests and similar profits
Dividends
5.112.889,67
10.639.444,68
0,00
0,00
0,00
0,00
0,00
0,00
2.314.396,55
0,00
0,00
7.427.286,22
0,00
Payments of:
-36.587.664,68
-9.525.063,24
0,00
0,00
Tangible assets
-96.262,84
-18.730,96
Intangible assets
-150,25
-36.684.077,77
0,00
Assets under construction
-29.256.791,55
Net cash-flow from investment activities [2] 10.639.444,68
-9.543.794,20
1.095.650,48
FINANCING ACTIVITIES
Receipts from:
Loans obtained
Capital increases, supplementary capital and premiums
Grants and donations
Sales of own shares
Anticipated dividends decrease
Coverage of previous years losses
8.421.985,05
10.421.428,96
35.000.000,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,00
43.421.985,05
0,00
10.421.428,96
Payments of:
-4.369.080,49
-3.464.440,23
Loans obtained
0,00
0,00
Capital amortization of leasing contracts
-5.207.327,78
-4.115.264,27
Interests and similar costs
0,00
0,00
Dividends
0,00
0,00
Anticipated dividends increase
0,00
-473.978,02
Capital reimbursement and supplementary capital
0,00
0,00
Acquisition of own shares
0,00
0,00
Other payments of financing activities
-9.576.408,27
0,00
-8.053.682,52
33.845.576,78
2.367.746,44
Net cash-flow from financing activities [3] 3.035.331,04
4.222.306,88
Net Increase/(Decrease) in cash and cash equivalents [4]=[1]+[2]+[3]
0,00
Exchange rate effect
29.990.834,22
25.768.527,34
Cash and cash equivalents at the beginning of the period
33.026.165,26
29.990.834,22
Notes to the Cash-Flow Statement
Cash
Bank deposits - current accounts
Other Deposits until 3 months
Other Financial Aplications until 3 months (Cashpooling)
Bank Overdrafts
Loans from other Group companies (Cashpooling)
Cash and cash equivalents at the end of the period Other Cash and cash equivalents Cash and cash equivalents at Balance Sheet
0,00
289.904,22
0,00
32.736.261,04
0,00
-49.102.092,47
-16.075.927,21
49.102.092,47
33.026.165,26
0,00
167.985,75
0,00
29.822.848,47
0,00
-53.471.172,96
-23.480.338,74
53.471.172,96
29.990.834,22
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
N
O
T
E
to the Financial Statements
INTRODUCTION
Grupo Pestana, S.G.P.S., S.A is a limited liability
company, established in Largo António Nobre
nº 1, Funchal, created in 5 December 2002. Its
main activity is the management of financial
investments on other companies.
The notes to the financial statements follow the
sequential numbering defined in the Portuguese
Official Plan of Accounts (POC). Standard notes
not included are either not applicable to the
Company or their presentation is not relevant to
the reading of the referred financial statements.
3. BASES DE PRESENTATION AND ACCOUNTING PRINCIPLES
The accompanying financial statements have
been prepared in a going concern basis from the
books and accounting records of the Company,
maintained in accordance with generally accepted
accounting principles in Portugal (“PGAAP”).
The most significant accounting principles used
in the preparation of the accompanying financial
statements were as follows:
a) Intangible assets
Intangible assets include mainly start-up expenses, which are accounted at acquisition cost and
depreciated on a straight-line basis period between 3 to 6 years.
b) Tangible assets
Tangible assets are valued at acquisition cost.
Depreciation is provided on a straight-line basis
according to the estimated useful lives between
3 and 7 years.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
c) Financial investments
Financial investments in subsidiaries and associated companies, on an individual basis, are recorded using the equity method. Initially, the financial investment is recorded at acquisition cost
adjusted according to the proportional shareholder’s equity value, reported to the acquisition date
or the first-time equity method’s adoption date.
d) Cash-pooling
One of the Company’s functions is to manage the
Group’s centralized treasury. Therefore, it registers
in Other short term applications and Other loans
obtained the amounts granted and received, respectively, to other Group companies, according
to the cash-pooling contract.
e) Accrual basis
The differences between acquisition cost of subsidiaries and associated companies and the proportional shareholder’s equity fair value on the
acquisition date were registered in Financial Investments - shares in group companies, when
positive, and depreciated during the current estimated payback period, and in Shareholders’ equity - adjustments to investments in affiliated and
associated companies, when negative.
Costs and revenues are recorded in the year to
which they refer, regardless of when they are paid
or received, in accordance with the accrual basis
principle. Differences between amounts received
and paid and the corresponding revenue and expenditure are recorded as accruals and deferrals.
According to the equity method, the financial investments amounts are annually adjusted through
the proportional share in the net results of participated companies and registered in the profit and
loss account. Additionally, the dividends received
are deducted from the respective financial investment asset value.
All assets and liabilities expressed in foreign currency have been converted into Euro using the exchange rate ruling on the balance sheet date and
published by Banco de Portugal.
The remaining financial investments are accounted for at acquisition cost or, in case of loans to
associated companies, at the nominal value. The
estimated recovery losses on financial investments are registered in the caption Adjustments
for financial investments.
f) Assets and liabilities expressed
in foreign currencies
g) Taxation
Income tax is calculated in accordance with the
applicable legal requirements. Deferred taxes are,
when applicable, recognised in the financial statements in accordance with Portuguese Accounting
Directive nr. 28.
The dividends received from these investments
are recorded in the profit and loss account for the
year when it is decided and communicated the
distribution’s decision.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
6. TAXATION
7. AVERAGE NUMBER
According with Portuguese tax law, income tax
returns are subject to review and correction by Tax
Authorities, for a period of four years subsequent
to their filing (for Social Security returns is a ten
years period until 2000 and five years period
for returns after 2001). Thus, the Company’s tax
returns for the years 2005 to 2008 are still subject
to such review.
OF EMPLOYEES
During 2007 and 2008, the average number of
employees was 3.
The Board of Directors believes that any
corrections that may arise from a tax review by the
Tax Authorities shall not have a material effect on
the financial statements as at 31 December 2008
and 2007.
According t o article 81º of the Corporate Income
Tax Code (“Código do Imposto sobre o Rendimento
das Pessoas Colectivas”) the Company is subject to
a flat tax rate over a set of expenses, which in the
current period amounts to Euro 3.562,40.
GRUPO PESTANA SGPS
MANAGEMENT REPORT
During 2008, the movements occurred in fixed assets, as well as in the related accumulated depreciations and
adjustments were as follows:
GROSS AMOUNTS
Opening Balance
Increases Disposals Intangible assets: Start-up expenses
Patents, brand names and other rights
Tangible assets: Transportation equipment
Loans to group companies
Shares in associated companies
Loans to associated companies
Other financial investmens
Advances paid on account
of financial investments
Tranfers and write-off
Closing
Balance
8.999,28 384.730,03 393.729,31 54.200,00 42.062,84 96.262,84 -
-
-
-
-
-
63.199,28
426.792,87
489.992,15
117.516,48 5.171,64 122,688.12 -
-
-
-
-
-
-
-
-
117.516,48
5.171,64
122,688.12
216.287.187,26 1.359.927,87 17.346.760,21 9.175.000,00 5.100.000,00 56.224.947,75 322.159,70 2.853.941,53 -
-
(2.789.914,46)
-
(3.462.140,29)
-
-
350.000,00 (1.623.500,00)
4.548.500,00 (3.175.000,00)
(100.000,00)
270.072.220,55
58.587,57
21.287.061,45
6.000.000,00
5.000.000,00
-
249.268.875,34 249.785.292,77 150,25 59.401.199,23 59.497.462,07 -
(6.252.054,75)
(6.252.054,75)
-
-
-
150,25
302.418.019,82
303.030.700,09
Euros
Intangible assets: Start-up expenses
Patents, brand names
and other rights
Tangible assets: Transportation equipment
Other loans granted
ACCUMULATED DEPRECIATIONS AND ADJUSTMENTS
Opening Balance
Charge for
the period Retirements
disposals Regularizations
Tranfers and write-off
Closing
Balance
8.999,28 340.556,03 9.034,00
14.835,84 -
-
-
-
-
-
18.033,28
355.391,87
349.555,31 23.869,84 -
-
-
373.425,15
88.137,49 5.171,64 93.309,13 29.379,00 -
29.379,00 -
-
- -
-
-
-
-
117.516,49
5.171,64
122.688,13
-
91.519,09 91.519,09 534.383,53 -
16.465,91 16.465,91 69.714,75 -
-
-
-
-
-
-
-
107.985,00
107.985,00
604.098,28
-
-
-
-
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
16. GROUP AND ASSOCIATED COMPANIES
As at 31 December 2008, the subsidiaries and associated companies were as follows:
Subsidiaries
M&J Pestana . S A
Hoteis Atlântico. SA
Assets Equity
in 2008
Total
income Net profit in
em 2008
%
2008
278.513.879,77
76.604.118,41
55.893.978,49
8.489.624,65
100,00
138.109.693,61
37.203.202,85
11.238.698,67
7.057.464,57
1.241.256,06
99,92
11.229.410,49
Amount
Pestana Saúde e Vida. SA
7.132.909,05
395.432,39
380.480,64
-37.545,66
100,00
745.432,39
Aplicações Multiplas. SA
11.874.259,97
9.406.026,93
482.991,10
61.646,50
83,00
7.926.002,36
Salvor-Soc. Inv. Turisticos. SA
160.183.112,49
99.367.403,72
31.285.977,35
2.743.032,04
94,52
91.030.172,80
Pestana Management. SA
13.401.909,03
728.781,55
9.901.086,48
87.519,89
100,00
728.781,55
Pestana Investimentos. SA
12.660.635,98
11.271.910,15
5.843.966,67
5.324.771,64
100,00
11.271.910,15
Pestana Inversiones.Ltd
11.016.896,99
9.034.720,20
140.056,66
-13.621,53
99,96
9.030.817,20
Euros
Assets Associated companies
Albar-Soc. Imob. Barlavento. SA
Equity
in 2008
2.136.823,14
2.134.017,50
Total
income Net profit in
em 2008
3.354,26
-27.246,30
%
2008
Amount
49,81
1.589.664,07
Djebel S.G.P.S. SA
40.223.044,11
17.765.742,80
339.697,51
-606.929,44
39,50
8.826.103,50
Carlton Palácio -Soc. Const. Exp. Hot
27.953.802,68
9.845.546,32
13.014.245,44
-19.091,05
36,52
4.852.792,70
Guiatur - Empreend. Turísticos.S.A.
9.356.262,32
3.569.098,45
4.391.683,00
595.420,34
24,91
1.024.653,36
da Guia Cascais
Intervisa. Travel Solutions.SA
5.750.004,87
336.652,85
28.167.127,28
297.029,43
38,99
72.775,95
GP Pousadas. S.A.
54.577.163,00
11.300.660,00
36.931.022,00
-2.647.787,00
1,08
247.829,33
EuroAtlantic Airways S.A.
89.000.772,64
23.366.212,70
91.714.172,79
12.727.406,31
20,00
4.673.242,54
Euros
During 2008, the Company increased its financial
investment in M. & J. Pestana, S.A., holding at
year-end 100% of its share capital.
This increased was done at the shareholders’
equity fair value of M. & J. Pestana, adjusted by
the timeshare rights, which consists in recognizing
in shareholders’ equity the total revenue and
respective costs of sales, instead of deferring
them through the period of the contract.
Consequently, it was decided to maintain this
fair value in the financial investments caption
and, therefore, no goodwill exists regarding this
subsidiary.
After this acquisition it was recalculated, using
the same method, the M. & J. Pestana total
investment fair value (100%), having reached
into the conclusion that it matches with the value
registered in the accounts of Grupo Pestana,
S.G.P.S., S.A..
n Increase of 0,08% in the share capital of GP
Pousadas S.A..
Other changes occurred during 2008 in Company’s
financial investments portfolio were as follows:
n Increase of 3,10% in the share capital of Salvor
S.A;
GRUPO PESTANA SGPS
MANAGEMENT REPORT
32. GUARANTEES PROVIDED
As at 31 December 2008, the Group assumed the following responsibilities with guarantees given to
third parties as follows:
Guarantees
2008
Surety Bonds and Liabilities coverage
927.351
Bank guarantees
10.400.000
11.327.351
Euros
36. SHARE CAPITAL BREAKDOWN
As at 31 December 2008, the Company’s share capital is represented by 80.000.000 shares of Euro 1 each,
fully subscribed and realized.
37. COMPANIES HOLDING
MORE THAN 20% OF THE SHARE CAPITAL
Pestana Luxemburgo - 26,25%
40. MOVEMENTS IN SHAREHOLDERS EQUITY
In 2008, the movements in shareholders equity captions were as follows:
Net Profit Pening balance Increases Decreases distribution
51 Share capital
80.000.000,00 -
-
-
53 Supplementary capital
21.000.000,00 35.000.000,00 -
-
54 Premiums on issuance of shares
33.716.655,44 -
(25.682,20)
-
55 Adjustments to investments in affiliated
12.965.447,82 226.448,73 -
-
and associated companies
57 Reserves
-
Legal reserves
325.928,14 -
-
-
Other reserves
12.661.276,43 -
-
-
59 Retained earning
8.800.115,96 -
-
12.063.044,17 88 Net profit/(loss) for the year
12.703.044,17 17.922.022,10 -
(12.703.044,17)
182.172.467,96 53.148.470,83 (25.682,20) (640.00,00) Closing
balance
80.000.000,00
56.000.000,00
33.690.973,24
13.191.896,55
325.928,14
12.661.276,43
20.863.160,13
17.922.022,10
234.655.256,59
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
45. STATEMENT OF FINANCIAL RESULTS
The financial results can be analyzed as follows:
Costs and losses 2008
Interests paid
Losses in group and associated companies
Financial investments adjustments
2007
5.079.319,32 4.252.728,19
58.133,97 1.058.550,45
460.010,43 Other financial costs
Financial results 62.433,20 5.659.896,92 17.342.098,15 23.001.995,07 Profits and gains 2008
Interests received
Gains in group and associated companies
68.531,63 5.868.584,07
12.630.870,13
18.499.454,20
2007
2.406.396,91 1.764.665,50
20.595.598,16 16.596.847,05
-
4.487,14
-
23.001.995,07
133.454,51
18.499.454,20
Income from financial investments
Other financial gains
488.773,80 Euros
46. STATEMENT OF EXTRAORDINARY RESULTS
The extraordinary results can be analyzed as follows:
Costs and losses 2008
Prior year losses
2007
-
1.579,32
Other extraordinary cost and losses
Extraordinary results 1.800,01 1.800,01 53.730,07 55.530,08 174,31
1.753,63
265.346,43
267.100,06
Profits and gains Gains in fixed assets
Prior year gains
Other extraordinary profits and gains
2008
2007
266.400,00
700,00
0,06
267.100,06
-
54.831,58 698,50 55.530,08 Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
48. OTHER RELEVANT INFORMATION:
LOANS
Short term
49.102.092,47 14.397.407,06 -
63.499.499,53 Internal loans
External loans
Commercial paper
Medium and long term
6.250.000,00
30.000.000,00
36.250.000,00
Euros
The external loans of medium and long term are payable as follows:
Year
Opening Balance
2010
2011
2012
2013
6.250.000 5.000.000 3.750.000 1.875.000 Payment
Closing Balance
1.250.000 5.000.000
1.250.000 3.750.000
1.875.000 1.875.000
1.875.000 Euros
PUBLIC ENTITIES
As at 31 December 2008, the balances with public entities were as follows:
DEBTOR BALANCES
Social Security
85.083,47
Corporate Income Tax:
Special Advance payment
16.402,98
Corporate income tax to be recovered 324.101,93
Personnel Income Tax:
Withholding taxes 2.530,44 428.118,28
CREDITOR BALANCES: Personnel Income Tax: Withholding taxes 104.302,01
VAT 558.148,06
Social Security 5.584,00
Others 5,00
668.039,07
Euros
GRUPO PESTANA SGPS
MANAGEMENT REPORT
OTHER DEBTORS / CREDITORS
As at 31 December 2008, the other debtors/creditors balances can be analyzed as follows:
DEBTORS
Debtors for Contract-CCV Others CREDITORS
Capital subscribed but not paid up
Consultants and advisors Personnel
1.200.000,00
59.515,12
1.259.515,12
27.226,71
1.488.717,18
30.652,47
1.546.596,36
Euros
ACCRUALS AND DEFERRALS
As at 31 December 2008, these captions breakdown can be analyzed as follows:
ACCRUED INCOME
Interests receivable 841.207,84
Others
DEFERRED COSTS 181.624,93
1.022.832,77
Advanced insurances paid 18.332,06
Holiday and holiday pay
Interests payable
Insurance
3.731,17
Others
7.233,24
ACCRUED COSTS
67.426,07
1.248.468,20
DEFERRED INCOME
Others - Brand cession
1.326.858,68
3.200.000,00
Euros
José Alexandre Lebre Theotónio – Memberl
The official accoun tant
Jorge da Silva Figueira
GRUPO PESTANA SGPS
MANAGEMENT REPORT
REPORT
and Opinion of the Satutory Auditor
TO THE SHAREHOLDERS
OF GRUPO PESTANA S.G.P.S., S.A.
In accordance with the applicable legislation and the
Company’s by-law, we herewith present the report on
our supervisory activity over the Board of Directors of
Grupo Pestana – S.G.P.S., S.A. for the year ended 31
December, 2008.
With the frequence considered adequate, in general,
we have accompanied the company’s evolution through
information supplied by the Board of Directors and the
Financial Department and verifing the recording of
most significant transactions, validated with respective
supporting documentation. Our supervisory role
comprised the verification of patrimonial values and
was complemented by obtaining information and
explanations on the important transactions and on
the company’s business development perspectives,
dully informed by the Company’s services and Board
of Directors.
The Board of Director’s Report, due to the quality
and synthesized information contained regarding the
company’s activity in 2008, deserves cared reading by
the shareholders.
the supervisory activity preformed, directed exclusively
to the Board of Directors as usually.
In conclusion, we believe that the mentioned
documents, read together, permit a reasonable
comprehension of the financial position – individual
and consolidated – of Grupo Pestana – S.G.P.S., S.A. as
of December 31st 2008 and satisfy legal and statutory
requirements.
As result, the Statutory Auditor believes:
1º The shareholders should approve Board of Directors
annual report and both individual and consolidated
financial statements – disclosed by the Board of
Directors.
2º
The
shareholders
should
result distribution proposed by
Directors.
approve
the
the Board of
We verified the adequacy of financial statements –
individual and consolidated – reported as of December
31st, 2008, subject to our approval by the Board of
Directors and its consistency with the Board of Directors’
report, as well as the adequate disclose of accounting
policies and criteria used, which we consider lead to an
appropriate evaluation of the Company’s and Group’s
patrimony.
Funchal, April 22nd 2009
As it was our duty, as statutory auditor’s, we have issued
today the Auditor’s Report on the company’s financial
statements – individual and consolidated. Likewise and
in the same quality, we have issued today our report on
Represented by:
Manuel António Neves da Silva (ROC 625)
The Statutory Auditor
Neves da Silva, Pão Alvo, Maria J. Pimenta
e Velosa Ferreira, SROC
GRUPO PESTANA SGPS
MANAGEMENT REPORT
AUDITOR’ REPORT
Consolidated Financial Statements
INTRODUCTION
1. We have examined the financial statements
of Grupo Pestana – S.G.P.S., S.A. which
comprise: the Balance Sheet as at December
31st, 2008 (showing total assets of Euros
343.765.392 and shareholders’ equity of
Euros 235.295.257, including a profit of
Euros 17.922.022), the Statements of Income
by nature and by function and the Cash Flow
Statement for the year then ended and the
corresponding Notes to the accounts.
RESPONSABILITIES
2.The Company’s Board of Directors is
responsible for the preparation of financial
statements that present a true and fair
view of the company’s financial position,
results of its operations and cash flows, as
well the adoption of adequate accounting
policies and criteria and the maintenance of
appropriate system of internal control.
3.Our responsibility is to issue a professional
and independent opinion based on our work
over such financial statements.
application and their disclosure, taking
into consideration the circumstances;
n Verifying the applicability of the going
concern concept;
n Verifying the adequacy of the overall
presentation of the financial statements.
5.An audit also includes verifying that the
financial information included in the Board
of Directors’ Report is consistent with the
financial statements.
6.We believe that our audit provides a
reasonable basis for expressing our opinion.
OPINION
7. In our opinion, the referred financial
statements, present fairly, in all material
respects, the financial position of Grupo
Pestana – S.G.P.S., S.A. as of December
31st, 2008 and the results of its operations,
its cash flows for the year then ended, in
conformity with the accounting principles
generally accepted in Portugal.
SCOPE
4. Our audit was performed in accordance with
the Auditing Standards (“Normas Técnicas e
as Directrizes de Revisão/Auditoria”) issued
by the Portuguese Institute of Statutory
Auditors (“Ordem dos Revisores Oficiais
de Contas”), which require the audit to be
planned and performed with the objective
of obtaining reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes:
n Verifying, on a sample basis, evidence
supporting the amounts and disclosures
in the financial statements and assessing
the significant estimates, based on
judgments and criteria defined by
the Board of Directors, used in their
preparation;
and Velosa Ferreira, SROC
Represented by:
n Assessing
the
adequacy
of
the
accounting policies used, their uniform
GRUPO PESTANA SGPS
MANAGEMENT REPORT
AUDITOR’ REPORT
Individual Financial Statement
INTRODUCTION
1. We have examined the consolidated financial
statements of Grupo Pestana – S.G.P.S., S.A.
which comprise: the Consolidated Balance
Sheet as at December 31st, 2008 (showing
total assets of Euros 754.628.799 and
shareholders’ equity of Euros 268.416.572,
including a profit of Euros 14.412.105), the
Consolidated Statements of Income by nature
and by function and the Consolidated Cash
Flow Statement for the year then ended and
the corresponding Notes to the accounts.
RESPONSABILITIES
2. The Company’s Board of Directors is responsible
for the preparation of consolidated financial
statements that present a true and fair view
of the financial position of the companies
included in the consolidation, results of its’
operations and consolidated cash flows, as
well the adoption of adequate accounting
policies and criteria and the maintenance of
appropriate system of internal control.
3. Our responsibility is to issue a professional and
independent opinion based on our work over
such financial statements.
SCOPE
4. Our audit was performed in accordance with
the Auditing Standards (“Normas Técnicas e
as Directrizes de Revisão/Auditoria”) issued by
the Portuguese Institute of Statutory Auditors
(“Ordem dos Revisores Oficiais de Contas”),
which require the audit to be planned and
performed with the objective of obtaining
reasonable assurance about whether the
consolidated financial statements are free of
material misstatement. An audit includes:
n Verifying that the financial statements
of the companies included in the
consolidation have been appropriately
audited and, for the significant case where
that did not happen, verifying, on a sample
basis, evidence supporting the amounts
and disclosures in the financial statements
and assessing the significant estimates,
based on judgments and criteria defined
by the Board of Directors, used in their
preparation;
n Verifying the consolidation operations;
n Assessing the adequacy of the accounting
policies used and disclosed, taking into
consideration the circumstances;
n Verifying the applicability of the going
concern concept;
n Verifying the adequacy of the overall
presentation of the consolidated financial
statements.
5. An audit also includes verifying that the
financial information included in the Board
of Directors’ Report is consistent with the
financial statements.
6. We believe that our audit provides a reasonable
basis for expressing our opinion.
OPINION
7. In our opinion, the referred consolidated
financial statements, present fairly, in all
material respects, the consolidated financial
position of Grupo Pestana – S.G.P.S., S.A. as
of December 31st, 2008 and the consolidated
results of its operations, its consolidated cash
flows for the year then ended, in conformity
with the accounting principles generally
accepted in Portugal.
and Velosa Ferreira, SROC
Represented by:
GRUPO PESTANA SGPS
MANAGEMENT REPORT
Largo António Nobre
9004-531 Funchal, Madeira
www.pestana.com

grupo pestana sgps management report financial statements

Transcription

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