Consolidated Annual Report 2014

Transcription

Cementos Molins, S.A. and
Subsidiaries
Consolidated Financial Statements and
Consolidated Directors’ Report for 2014
Translation of a report originally issued in Spanish
based on our work performed in accordance with the
audit regulations in force in Spain and consolidated
financial statements originally issued in Spanish and
prepared in accordance with the regulatory financial
reporting framework applicable to the Group in Spain
(see Notes 2 and 36). In the event of a discrepancy,
the Spanish-language version prevails.
CONTENTS
Page
Consolidated Balance Sheet as at 31 December 2014 .................................................................................... 4
Consolidated Statement of Profit or Loss for the year ended 31 December 2014 ....................................... 5
Consolidated Statement of Comprehensive Income for the year ended 31 December 2014 ...................... 6
Consolidated Statement of Changes in Equity for the year ended 31 December 2014 ............................... 7
Consolidated Statement of Cash Flows for the year ended 31 December 2014 ........................................... 8
Explanatory Notes to the Consolidated Financial Statements
1.
Group description and activity ...................................................................................................................... 9
2.
Basis of presentation of the consolidated financial statements .................................................................... 9
3.
Accounting policies and measurement bases ............................................................................................ 11
4.
Business combinations ............................................................................................................................... 27
5.
Risk management ...................................................................................................................................... 29
6.
Segment reporting and joint ventures ......................................................................................................... 32
7.
Goodwill on consolidation ........................................................................................................................... 35
8.
Intangible assets ........................................................................................................................................ 35
9.
Property, plant and equipment ................................................................................................................... 38
10.
Investments accounted for using the equity method .................................................................................. 40
11.
Investment property .................................................................................................................................... 41
12.
Non-current financial assets, current financial assets and cash and cash equivalents .............................. 42
13.
Non-current assets classified as held for sale ............................................................................................ 43
14.
Inventories .................................................................................................................................................. 43
15.
Trade and other receivables ....................................................................................................................... 43
16.
Equity of the Parent .................................................................................................................................... 44
17.
Equity of non-controlling interests .............................................................................................................. 47
18.
Dividends and distribution of profit ............................................................................................................. 48
19.
Provisions ................................................................................................................................................... 48
20.
Pension plans ............................................................................................................................................. 49
21.
Bank borrowings......................................................................................................................................... 51
22.
Disclosures on the payment periods to suppliers. Additional Provision Three. “Disclosure obligation”
provided for in Law 15/2010, of 5 July. ....................................................................................................... 53
2
23.
Tax matters ................................................................................................................................................ 54
24.
Guarantee commitments to third parties .................................................................................................... 60
25.
Operating income and expenses ................................................................................................................ 60
26.
Impairment and gains or losses on disposals of assets ............................................................................. 63
27.
Financial loss.............................................................................................................................................. 64
28.
Earnings per share ..................................................................................................................................... 64
29.
Information on greenhouse gas emission allowances ................................................................................ 64
30.
Obligations and contingencies.................................................................................................................... 65
31.
Transactions with related parties ................................................................................................................ 65
32.
Remuneration and other benefits of directors............................................................................................. 67
33.
Detail of investments in companies engaging in similar activities and the performance, as independent
professionals or as employees, of similar activities by the directors and related parties ............................ 68
34.
Information on the environment .................................................................................................................. 72
35.
Events after the reporting period ................................................................................................................ 73
36.
Explanation added for translation to English ............................................................................................. 73
Appendices .......................................................................................................................................................... 74
Consolidated directors' report for 2014 ...................................................................................................... ....78
3
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting
framework applicable to the Group in Spain (see Notes 2 and 36). In the event of a discrepancy, the Spanish-language version prevails.
CEMENTOS MOLINS, S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2014
(Thousands of euros)
ASSETS
Notes
31/12/14
31/12/13 (*)
01/01/13 (*)
Intangible assets
Property, plant and equipment
Investment property
Non-current financial assets
Investments in companies accounted for using the equity method
Goodwill on consolidation
Deferred tax assets
NON-CURRENT ASSETS
8
9
11
12
10
7
23
28.812
585.288
5.090
7.916
283.718
23.922
38.445
973.191
35.857
622.438
2.272
14.738
253.030
24.239
40.420
992.994
36.730
703.636
3.458
3.186
270.859
5.253
42.683
1.065.805
Non-current assets classified as held for sale
Inventories
Trade and other receivables
Current financial assets
Cash and cash equivalents
CURRENT ASSETS
TOTAL ASSETS
13
14
15
12
12
83.058
112.537
22.407
111.222
329.224
1.302.415
2.915
82.467
118.250
50.802
110.695
365.129
1.358.123
3.755
93.229
115.233
103.070
145.319
460.606
1.526.411
EQUITY AND LIABILITIES
Notes
SHAREHOLDERS' EQUITY
Share capital
Reserves of the Parent
Reserves of consolidated companies
Net profit attributable to the Parent
Interim dividend
VALUATION ADJUSTMENTS
EQUITY ATTRIBUTABLE TO THE PARENT
EQUITY OF NON-CONTROLLING INTERESTS
TOTAL EQUITY
16
17
Deferred income
Non-current bank borrowings
Deferred tax liabilities
Provisions
Other non-current liabilities
NON-CURRENT LIABILITIES
21
23
19
21
Current financial payables
Trade payables
Tax payables
Other current liabilities
CURRENT LIABILITIES
TOTAL EQUITY AND LIABILITIES
23
31/12/14
31/12/13 (*)
01/01/13 (*)
723.433
19.835
151.374
531.330
30.811
(9.917)
(121.154)
602.279
113.056
715.335
704.219
19.835
138.399
544.471
10.109
(8.595)
(119.193)
585.026
114.664
699.690
707.907
19.835
134.907
519.376
43.706
(9.917)
(67.818)
640.089
138.062
778.151
10.740
351.625
23.853
11.214
535
397.967
7.872
370.912
31.256
9.954
6.427
426.421
2.862
421.779
45.943
18.154
2.140
490.878
54.201
89.276
21.159
24.477
189.113
1.302.415
122.934
82.116
10.451
16.511
232.012
1.358.123
144.648
84.113
12.792
15.829
257.382
1.526.411
(*) Adjusted information (see Note 3-a)
The accompanying Notes 1 to 36 and Appendices I and II are an integral part of the consolidated balance sheet as at 31 December 2014.
4
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2014
Notes
6 & 25-a
Revenue
Other income
25-b
Procurements
Staff costs
Change in operating allowances
Other operating expenses
In-house work on non-current assets
25-d
Depreciation and amortisation charge
Impairment and gains or losses on disposals of assets
26
Profit from operations
Financial loss
Share of profit (loss) of companies accounted for using the equity method
27
10
Profit before tax
23
Income tax
Net consolidated profit
17
Net profit of non-controlling interests
Net profit for the year attributable to the Parent
28
Earnings per share in euros
2014
2013 (*)
527.667
9.845
539.302
8.800
537.512
548.102
(174.255)
(97.588)
(3.872)
(194.316)
441
(169.714)
(108.016)
(5.428)
(206.899)
692
(469.590)
(489.365)
(46.163)
(10.836)
(51.579)
(3.319)
10.923
3.839
(14.811)
55.572
(17.970)
48.072
51.684
33.941
(14.011)
(13.827)
37.673
20.114
6.862
10.005
30.811
10.109
0,47
0,15
The accompanying Notes 1 to 36 and Appendices I and II are an integral part of the consolidated statement
of profit or loss for the year ended 31 December 2014.
5
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Notes
31/12/14
Of noncontrolling
interests
Of the
Parent
31/12/13 (*)
Of noncontrolling
interests
Of the
Parent
Total
Total
A.- CONSOLIDATED PROFIT FOR THE YEAR
30.811
6.862
37.673
10.109
10.005
20.114
B.- OTHER COMPREHENSIVE INCOME RECOGNISED DIRECTLY IN EQUITY
(1.961)
(8.924)
(10.885)
(51.375)
(28.922)
(80.297)
Items that will not be transferred to profit or loss:
1. Arising from actuarial gains and losses and other adjustments
2. Tax effect
-
Items that may be reclassified subsequently to profit or loss:
4. Arising from revaluation of financial instruments:
a) Available-for-sale financial assets
5. Hedging transactions:
a) Cash flow hedges
b) Tax effect
6. Arising from translation differences
(1.961)
21-a
21-a
16-g
C.- TRANSFERS TO CONSOLIDATED PROFIT OR LOSS
1. Hedging transactions
a) Cash flow hedges
b) Tax effect
CONSOLIDATED TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(8.924)
(10.885)
(51.375)
(28.922)
(80.297)
-
-
-
-
-
-
330
(113)
(2.178)
(8.924)
330
(113)
(11.102)
743
(279)
(51.839)
(28.922)
743
(279)
(80.761)
-
-
-
-
-
-
-
-
-
-
-
-
28.850
(2.062)
26.788
(41.266)
(18.917)
(60.183)
The accompanying Notes 1 to 36 and Appendices I and II are an integral part of the consolidated statement of comprehensive income at 31 December 2014.
6
-
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
capital
Reserves
of the
Parent
Treasury
shares
Other reserves
of consolidated
companies
Other
valuation
adjustments
Translation
differences
Profit for
the year
Final
dividend
Interim
dividend
Noncontrolling
interests
Total
31/12/12 unadjusted
19.835
134.907
(24.474)
543.850
(65.984)
(1.834)
43.706
-
(9.917)
237.688
877.777
Effects of adjustment
01/01/13 adjusted (*)
19.835
134.907
(24.474)
543.850
(65.984)
(1.834)
43.706
-
(9.917)
(99.626)
138.062
(99.626)
778.151
Distribution of profit
Final dividend
2013 interim dividend
Treasury shares
Changes in the scope of consolidation
Other
Comprehensive income
31/12/13 (*)
19.835
3.492
138.399
(3.525)
(27.999)
28.974
121
(475)
572.470
-
464
(1.370)
(43.706)
10.109
10.109
1.323
(1.323)
-
9.917
(8.595)
(8.595)
(4.967)
679
(193)
(18.917)
114.664
(6.290)
(8.595)
(3.525)
800
(668)
(60.183)
699.690
Distribution of profit
Final dividend
2014 interim dividend
Treasury shares
Other
Comprehensive income
31/12/14
19.835
12.975
151.374
(1.599)
(29.598)
(12.122)
79
501
560.928
217
(1.153)
(10.109)
30.811
30.811
661
(661)
-
8.595
(9.917)
(9.917)
468
(14)
(2.062)
113.056
(661)
(9.917)
(1.599)
547
487
26.788
715.335
(51.839)
(117.823)
(2.178)
(120.001)
The accompanying Notes 1 to 36 and Appendices I and II are an integral part of the consolidated statement of changes in equity for the year ended 31 December 2014.
7
CONSOLIDATED STATEMENT OF CASH FLOWS
2014
2013 (*)
Cash flows from operating activities
51.684
Profit from operating activities before tax
Adjustments for items not giving rise to operating cash flows:
Change in period provisions for certain and quantifiable losses
Results of companies accounted for using the equity method
Finance income and costs
Deferred income
In-house work on non-current assets
Cash generated by operating activities (I)
Cash from changes in working capital (II)
Income tax (III)
Net cash flows from operating activities (A) = (I) + (II) + (III)
Cash flows from investing activities
Payments to acquire subsidiaries, net of existing cash items
Change in non-current financial assets
Change in current financial assets
Acquisition / Disposal of intangible assets
Acquisition / Disposal of property, plant and equipment
Finance income received
Dividends received from companies accounted for using the equity method
Net cash flows used in investing activities (B)
Cash flows from financing activities
Change in borrowings
Change in other long-term payables
Payments / Proceeds arising from treasury share transactions
Interest paid
Dividends paid
Net cash flows used in financing activities (C)
Effect of foreign exchange rate changes (D)
46.163
3.872
10.836
(55.572)
14.811
(559)
(441)
70.794
51.579
5.428
3.319
(48.072)
17.970
(640)
(692)
62.833
23.137
(1.867)
(10.057)
(24.172)
83.874
36.794
(15.380)
6.802
28.358
(758)
(24.453)
9.262
46.315
50.146
(11.614)
52.157
(26.215)
(32.719)
8.936
48.438
38.982
(84.205)
(5.820)
(1.599)
(25.623)
(14.545)
(131.792)
(51.903)
(81)
(3.525)
(26.452)
(16.206)
(98.167)
(1.701)
(12.234)
527
Net change in cash and cash equivalents (A + B + C + D)
33.941
(34.624)
Cash and cash equivalents at beginning of year
110.695
145.319
Cash and cash equivalents at end of year
Cash
Cash equivalents
111.222
28.296
82.926
110.695
37.810
72.885
The accompanying Notes 1 to 36 and Appendices I and II are an integral part of the consolidated statement of cash flows
for the year ended 31 December 2014.
8
Translation of consolidated financial statements originally issued in Spanish and prepared in accordance
with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 2 and 36).
In the event of a discrepancy, the Spanish-language version prevails.
Cementos Molins, S.A. and Subsidiaries
Notes to the consolidated financial statements
for the year ended 31 December 2014
1.
Group description and activity
Cementos Molins, Sociedad Anónima (“the Parent”), domiciled in Sant Vicenç dels Horts (Barcelona), at
Carretera Nacional 340, nos. 2 to 38, km. 1,242.300, was incorporated by means of a public deed authorised by
Barcelona Notary Cruz Usatorre Gracia on 9 February 1928.
It is registered in the Barcelona Mercantile Register on sheet B 4224 and its employer identification number is
A08017535.
The Parent was incorporated for an indefinite period, and is therefore in existence for as long as it does not meet
any of the conditions for dissolution set forth in Article 363 of the current Spanish Limited Liability Companies
Law.
Its company object, as established in Article 2 of the bylaws, is:
a)
The formation and operation of cement, lime and plaster plants. The manufacture of all manner of
construction materials. The exploitation of clay, limestone and plaster quarries and deposits, and the
formation and operation of companies to perform activities relating to these products;
b)
Real estate activities;
c)
The acquisition, ownership and disposal of movable property and marketable securities.
The Cementos Molins Group engages mainly in the manufacture and sale of cement and lime, precast concrete
and other building materials, the extraction of aggregates, the preparation of concrete and environmental
activities.
The Group carries on its activities in Spain, Mexico, Argentina, Uruguay, Bolivia, Tunisia, India, Bangladesh and
China.
2.
Basis of presentation of the consolidated financial statements
Accounting standards
The consolidated financial statements for 2014 of the Cementos Molins Group were formally prepared by the
Parent's directors in accordance with International Financial Reporting Standards as adopted by the European
Union (“EU-IFRSs”), in conformity with Regulation (EC) no. 1606/2002 of the European Parliament and of the
Council of 19 July 2002, taking into account all the mandatory accounting principles and rules and measurement
bases, the Spanish Commercial Code, the Spanish Limited Liability Companies Law and all other applicable
Spanish corporate law and, accordingly, they present fairly the Cementos Molins Group’s consolidated equity and
consolidated financial position at 31 December 2014 and the consolidated results of its operations, the changes
in consolidated equity and in the consolidated statement of comprehensive income and the Group’s consolidated
cash flows for the year then ended.
9
The accompanying consolidated financial statements were prepared from the separate accounting records of
Cementos Molins, S.A. and of each of the consolidated companies (detailed in Appendices I and II) so that they
present fairly the consolidated equity, consolidated financial position and consolidated results of the Cementos
Molins Group under EU-IFRSs. However, since the accounting policies and measurement bases used in
preparing the Group's consolidated financial statements for 2014 may differ from those used by certain Group
companies, the required adjustments and reclassifications were made on consolidation to unify the policies and
methods used and to make them compliant with International Financial Reporting Standards.
The accompanying consolidated financial statements of the Cementos Molins Group for 2014 were formally
prepared by the Parent's Board of Directors and will be submitted for approval by the shareholders at the Annual
General Meeting of Cementos Molins, S.A., and it is considered that they will be approved without any changes.
The consolidated financial statements of the Cementos Molins Group for 2013 were approved by the
shareholders at the Annual General Meeting of Cementos Molins held on 30 May 2014.
EU-IFRSs provide for certain alternatives regarding their application. The alternatives applied by the Group in
preparing the accompanying consolidated financial statements for 2014 are detailed in Note 3 'Accounting
Policies and Measurement Bases'.
The accounting policies used to prepare these consolidated financial statements comply with all IFRSs in force at
the date of their presentation.
Basis of consolidation
The Group companies over which effective control is exercised by virtue of ownership of a majority of the voting
power in their representation and decision-making bodies were fully consolidated (see Appendix I).
Investments in joint ventures, which are those which the Group jointly manages with other shareholders, and
investments in associates were accounted for using the equity method (see Appendix II).
Non-controlling interests represent the share attributable to them of the equity and results at 31 December 2014
of the fully consolidated companies, and they are presented under “Equity of Non-Controlling Interests” in the
accompanying consolidated balance sheet and under “Net Profit of Non-Controlling Interests” in the
accompanying consolidated income statement.
The financial statements of foreign companies were translated using the year-end exchange rate method, using
as a general rule the exchange rates prevailing at 31 December of each year for items in the consolidated
balance sheet, except for share capital and reserves, which were translated at the historical exchange rates,
while items in the consolidated statement of profit or loss were translated at the average exchange rates for the
year, recognising any differences under "Equity Attributable to the Parent - Translation Differences" in the
accompanying consolidated balance sheet.
The Cementos Molins Group does not have any investments in companies whose functional currency differs from
the local currency in which their financial statements are presented.
The translation differences included in the changes in non-current assets arose from application of the year-end
exchange rate method in the consolidation of foreign companies and are recognised in consolidated equity under
“Translation Differences”.
All accounts and transactions between consolidated companies were eliminated on consolidation.
The Group used the acquisition method in all cases of business combinations that occurred subsequent to the
date of transition to EU-IFRSs when accounting for these transactions and recognised as goodwill arising from
the combination the difference between the cost of the combination and the net fair value of the acquired
company's identified and recognised assets, liabilities and contingent liabilities.
10
Comparative information
As required by EU-IFRSs, the information relating to 2014 contained in these notes to the consolidated financial
statements is presented, for comparison purposes only, with information relating to 2013. In this connection, the
Group's comparative information was adjusted as follows:
•
The consolidated statement of profit or loss (and its respective breakdowns), the consolidated statement of
comprehensive income and the consolidated statement of cash flows for 2013, for comparison purposes,
with retrospective effect from 1 January 2013, as described in Note 3-a regarding matters arising from the
transition to IFRS 11. The consolidated balance sheet for the year ended 31 December 2013, due to the
retrospective application from 1 January 2013, as described in Note 3-a regarding matters arising from the
transition to IFRS 11.
Currency
These consolidated financial statements are presented in euros since this is the currency of the primary
economic environment in which the Group operates. Transactions denominated in functional currencies other
than the euro are recognised in accordance with the policies described in Note 3.
Responsibility for the information and use of estimates
The information in these consolidated financial statements is the responsibility of the Parent's directors, who have
verified that the various controls established to ensure the quality of the financial and accounting information
prepared by them have operated effectively.
In the Group's accompanying consolidated financial statements judgments and estimates were occasionally
made by management of the Parent and of the consolidated companies in order to quantify certain of the assets,
liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following:
•
The useful life of the property, plant and equipment and intangible assets;
•
The impairment losses on certain assets;
•
The assumptions used in the actuarial calculation of the pension obligations;
•
The provisions for obligations to third parties and contingent liabilities; and
•
The recoverability of tax assets.
Although these judgments and estimates were made on the basis of the best information available at 31
December 2014 on the events analysed, events that take place in the future (economic events, regulatory
changes, etc.) might make it necessary to change these estimates (upwards or downwards) in coming years.
Changes in accounting estimates would be recognised in the consolidated statement of profit or loss or in
consolidated equity, as appropriate.
3.
Accounting policies and measurement bases
The principal accounting policies used in preparing the accompanying consolidated financial statements, in
accordance with International Financial Reporting Standards and the interpretations in force at the time of
preparing these consolidated financial statements, were as follows:
a)
Changes in accounting policies and in disclosures of information effective in 2014
Except as indicated in the point below relating to the application of IFRS 11, Joint Arrangements, the
following standards (IFRSs) and interpretations (IFRICs) came into force in the reporting period that began
on 1 January 2014, although they did not have a material impact or were not applicable to the Group in
these consolidated financial statements:
11
•
IFRS 10, Consolidated Financial Statements. Effective for annual reporting periods beginning on 1
January 2014.
•
IFRS 11, Joint Arrangements. Effective for annual reporting periods beginning on 1 January 2014.
•
IFRS 12, Disclosure of Interests in Other Entities. Effective for annual reporting periods beginning on 1
January 2014.
•
IAS 27 (Revised), Separate Financial Statements. Effective for annual reporting periods beginning on 1
January 2014.
•
IAS 28 (Revised), Investments in Associates and Joint Ventures. Effective for annual reporting periods
beginning on 1 January 2014.
•
Transition guidance: Amendments to IFRSs 10, 11 and 12. Effective for annual reporting periods
beginning on 1 January 2014.
•
Investment entities: Amendments to IFRS 10, IFRS 12 and IAS 27. Effective for annual reporting
periods beginning on 1 January 2014.
•
Amendments to IAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial
Liabilities. Effective for annual reporting periods beginning on 1 January 2014.
•
Amendments to IAS 36, Recoverable Amount Disclosures for Non-Financial Assets. Effective for
annual reporting periods beginning on 1 January 2014.
•
Amendments to IAS 39, Novation of Derivatives and Continuation of Hedge Accounting Effective for
annual reporting periods beginning on 1 January 2014.
These consolidated financial statements were prepared without taking into account the EU-IFRSs,
amendments thereto and interpretations that have been issued but will come into force on or after 1 January
2015, which are detailed below:
•
IFRIC 21, Levies. Effective for the IASB for annual reporting periods beginning on or after 17 June
2014.
•
Hedge accounting part of IFRS 9. Applicable for annual reporting periods beginning on or after 1
January 2018. Not yet adopted by the EU.
•
IFRS 15, Revenue from Contracts with Customers. Applicable for annual reporting periods beginning
on or after 1 January 2017. Not yet adopted by the EU.
•
Improvements to IFRSs, 2010-2012 cycle and 2011-2013 cycle. Applicable for annual reporting periods
beginning on or after 1 July 2014. Not yet adopted by the EU.
•
IAS 19, Defined Benefit Plans: Employee Contributions. Applicable for annual reporting periods
beginning on or after 1 July 2014. Not yet adopted by the EU.
•
Amendments to IAS 16 and IAS 38, Clarification of Acceptable Methods of Depreciation and
Amortisation. Applicable for annual reporting periods beginning on or after 1 January 2016. Not yet
adopted by the EU.
•
Amendments to IFRS 11, Acquisitions of Interests in Joint Operations. The amendments apply to the
acquisition of both the initial interest and additional interests in a joint operation in which the activity of
the joint operation constitutes a business, and also to the formation of a joint operation if an existing
business is contributed to the joint operation. Prospectively applicable for annual reporting periods
beginning on or after 1 January 2016. Not yet adopted by the EU.
•
Improvements to IFRSs, 2012-2014 cycle. Applicable for annual reporting periods beginning on or after
1 January 2016. Not yet adopted by the EU.
12
•
Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture. Applicable for annual reporting periods beginning on or after 1 January
2016. Not yet adopted by the EU.
•
Amendments to IAS 27, Equity Method in Separate Financial Statements. The amendments permit the
use of the equity method in the separate financial statements of an investor. Applicable for annual
reporting periods beginning on or after 1 January 2016. Not yet adopted by the EU.
•
Amendments to IAS 16 and IAS 41: Bearer plants shall be measured at cost rather than at fair value.
Applicable for annual reporting periods beginning on or after 1 January 2016. Not yet adopted by the
EU.
The Group's directors are evaluating the potential impacts arising from the application of these standards,
although it is not expected that, to the extent that they are applicable, they will have a material impact on
future consolidated financial statements.
Matters arising from the transition to IFRS 11
As indicated in Note 2, these consolidated financial statements for the year ended 31 December 2014 are
the first financial statements prepared under the new accounting standards that came into force on 1
January 2014.
In this connection, the fundamental change affecting the consolidated financial statements for the year
ended 31 December 2014 with respect to the prior standard is that arising from the application of IFRS 11
(which superseded IAS 31), which is the elimination of the option of proportionate consolidation for jointly
controlled entities, which have begun to be accounted for using the equity method. This gave rise to the
reclassification of all the net assets of each of the companies that were previously proportionately
consolidated to "Investments in Companies Accounted for Using the Equity Method" in the consolidated
balance sheet. This new standard had a material effect on the Group's consolidated financial statements,
since the option that had been applied for the consolidation of joint ventures, including mainly the Group
companies Corporación Moctezuma and the Surma Group, was the proportionate consolidation of their
financial statements.
Accordingly, the detail of the main impact of the application of IFRS 11 (no impact arose from the
application of IFRS 10) that was calculated at the transition date of 1 January 2013 and at the end of the
reporting period on 31 December 2013, is as follows:
(In thousands of euros)
31/12/2013
Accounting
After application
legislation in
of new IFRSs 10
force at 31/12/13
and 11
Description
Consolidated statement of profit or loss
Revenue
831.897
539.302
Profit from operations
85.333
3.839
Share of profit of companies accounted for using the equity method
11.509
48.072
1.065.628
992.994
490.196
365.129
299.214
320.307
211.905
114.664
Consolidated balance sheet
Non-current assets
Current assets
Net debt (Bank Borrowings - Financial
Assets - "Cash and Cash Equivalents")
Equity of non-controlling interests
13
b)
Intangible assets
Intangible assets are recognised initially at acquisition or production cost. If applicable, they are subsequently
measured at cost less any accumulated amortisation and any accumulated impairment losses.
Intangible assets comprise administrative concessions, licences, trademarks, computer software and quarry
prospecting and preparation expenditure.
There are trademarks (intangible assets) which are considered to have an indefinite useful life and, therefore,
their contributions to profits are deemed not to be limited in time.
Quarry prospecting and preparation assets are measured at the cost incurred and are recognised when the
legal rights to operate the quarry have been granted and once the technical and economic feasibility of each
project has been guaranteed. They are transferred to profit or loss on the basis of the rate of extraction of the
mineral resource in relation to the maximum assessed capacity. Expenses related to the exploration and
assessment of mineral resources prior to ascertaining the technical feasibility and commercial viability thereof
are scantly material with respect to the accompanying consolidated financial statements.
The Group companies amortise their intangible assets by the straight-line method over the following years of
estimated useful life:
Years of estimated useful life
Computer software
Administrative concessions
Other
3 to 6
10 to 20
5 to 10
Emission allowances:
In 2013 Cementos Molins Industrial, S.A.U. received emission allowances equal to 7.1 million tonnes of CO2
for the 2013-2020 period, at a rate of 0.9 million tonnes for each year of the period, in accordance with the
resolution of the Spanish Cabinet of 15 November 2013.
The emission allowances granted at zero cost for each year are recognised at market value on the asset
side of the consolidated balance sheet under “Intangible Assets” with a credit to “Deferred Income”. These
grants are recognised in the consolidated statement of profit or loss under “Other Operating Income” as the
CO2 emissions for which the allowances were granted are made. Also, a provision for contingencies and
charges is recognised to reflect the obligation to return CO2 emission allowances with a charge to “Other
Operating Expenses” in the consolidated statement of profit or loss. The amount of this provision is
determined taking into account that the obligation will be offset through the return of the emission allowances
granted at zero cost to the company or through other emission allowances banked in the consolidated
balance sheet or acquired or generated subsequently.
If, at the balance sheet date, the CO2 emissions made during the production process made it necessary to
purchase emission allowances because actual emissions exceed the emissions corresponding to the
emission allowances held by the Group at that date, the provision for this shortfall would be quantified at the
market value of the emission allowances at the balance sheet date (see Note 29).
c)
Goodwill and business combinations
The obtainment by the Parent of control over a subsidiary constitutes a business combination which will be
accounted for using the acquisition method. In subsequent consolidation processes, the investment-equity
elimination in subsidiaries will generally be performed on the basis of the results of applying the acquisition
method at the date on which control is obtained, as described below.
Business combinations are accounted for by applying the acquisition method, for which the acquisition date
is determined and the cost of the combination is calculated, and the identifiable assets acquired and the
liabilities assumed are measured at their acquisition-date fair value.
14
Goodwill or gains from a bargain purchase arising from a combination are calculated as the difference
between the acquisition-date fair value of the assets acquired and liabilities assumed and the cost of the
business combination at the acquisition date.
The cost of the business combination is the aggregate of:
-
The acquisition-date fair value of the assets acquired, the liabilities assumed and the equity
instruments issued.
-
The fair value of any contingent consideration that depends on future events or on the fulfilment of
certain specified conditions.
The costs incurred to issue equity or debt securities given up in exchange for the items acquired are not
included in the cost of a business combination.
If the business combination is achieved in stages and, therefore, the acquirer already held an equity interest
in the acquiree immediately before the acquisition date (the date on which control is obtained), the goodwill
or gain on a bargain purchase is the difference between:
-
The cost of the business combination, plus the acquisition-date fair value of any equity interest
previously held by the acquirer in the acquiree; and
-
The fair value of the identifiable assets acquired less the fair value of the liabilities assumed,
determined as indicated above.
Any gain or loss resulting from the remeasurement at fair value of the previously held equity interest in the
acquiree on the date control is obtained is recognised in consolidated profit or loss. If the investment in this
investee had previously been measured at fair value, any valuation adjustments not yet recognised in profit
or loss will be transferred to the consolidated statement of profit or loss. Also, the cost of a business
combination is presumed to be the best reference for estimating the acquisition-date fair value of any
previously held equity interest.
Goodwill arising on the acquisition of companies with a functional currency other than the euro is measured
in the functional currency of the acquiree and is translated to euros at the exchange rates prevailing at the
consolidated balance sheet date.
Goodwill is not amortised and is subsequently measured at cost less any impairment losses recognised. An
impairment loss recognised for goodwill must not be reversed in a subsequent period.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items
for which the accounting is incomplete, and the provisional amounts may be adjusted in the period required
to obtain the necessary information. However, the measurement period shall not exceed one year from the
acquisition date. The effects of the adjustments made in that period are recognised retrospectively and
comparative information for prior periods must be changed if necessary.
Subsequent changes in the fair value of the contingent consideration are recognised in profit or loss, unless
the consideration has been classified as equity, in which case subsequent changes in its fair value are not
recognised.
d)
Property, plant and equipment are recognised at acquisition or production cost.
The costs of expansion, modernisation or improvements leading to increased productivity, capacity or
efficiency or to a lengthening of the useful lives of the assets are capitalised.
Group work on property, plant and equipment is determined on the basis of in-house warehouse materials
consumed and labour costs.
15
Borrowing costs directly attributable to the acquisition or production of certain assets are capitalised until the
assets are brought into operating condition, provided that the total value of the asset does not exceed its
realisable value.
Upkeep and maintenance expenses are charged to the consolidated statement of profit or loss for the year in
which they are incurred.
Items in the course of construction are transferred to property, plant and equipment in use once the
installation and start-up period has ended.
The Group companies depreciate their property, plant and equipment on a straight-line basis over the
following years of estimated useful life:
Years of estimated useful life
Buildings
Plant
Machinery
Tools
Furniture
Computer hardware
Transport equipment
e)
33 to 68
8 to 20
8 to 18
3 to 8
10 to 15
4 to 8
8 to 18
Government grants
Non-refundable government grants received are measured at the amount granted. Grants related to income
are taken directly to income. Grants related to assets are recognised in income in proportion to the period
depreciation taken on the assets associated with these grants. In the case of non-depreciable assets, the
grants are recognised in income in the year in which the assets are disposed of, become impaired or are
derecognised.
Emission allowances: see Note 29.
f)
Leases
Finance leases
For finance leases in which the Group companies act as lessee, the cost of the leased assets is presented in
the consolidated balance sheet based on the nature of the leased asset and, simultaneously, a liability for
the same amount is recognised. This amount is the lower of the fair value of the leased asset and the
present value, at the inception of the lease; of the minimum lease payments agreed upon, including the
purchase option, when there is no reasonable doubt that it will be exercised. The minimum lease payments
do not include contingent rent, costs for services and taxes to be paid by and reimbursed to the lessor. The
total finance charges arising under the lease are allocated to the consolidated statement of profit or loss for
the year in which they are incurred using the effective interest method. Contingent rent is recognised as an
expense in the year in which it is incurred.
Leased assets are depreciated, based on their nature, using similar criteria to those applied to the items of
property, plant and equipment that are owned.
Operating leases
In operating leases, the ownership of the leased asset and substantially all the risks and rewards relating to
the leased asset remain with the lessor.
When the consolidated companies act as the lessee, lease costs are recognised in the statement of profit or
loss on an accrual basis.
16
g)
Investment property
“Investment Property” includes assets, mainly land and buildings, held to earn rentals or for long-term capital
appreciation for the Group, rather than for use in production or for administrative purposes.
Property, plant and equipment are initially measured at cost revalued pursuant to the applicable legislation,
and, in the case of buildings, depreciated on a straight-line basis at 3% per annum.
h)
Impairment of property, plant and equipment, intangible assets and goodwill
At each balance sheet date the companies review the carrying amounts of the property, plant and equipment
and intangible assets with finite useful lives to assess whether there is any indication that the assets might
have suffered an impairment loss. If any such indication exists, an estimate of the recoverable amount of
these assets is made to determine the impairment loss incurred. Where the asset analysed does not
generate cash flows that are independent from other assets, the Group estimates the fair value of the cashgenerating unit to which the asset belongs.
Property, plant and equipment and intangible assets with indefinite useful lives not subject to systematic
depreciation or amortisation are tested for impairment at least annually, or where there is an indication that
the asset might have suffered an impairment loss.
The recoverable amount of an asset subject to impairment is the higher of fair value less costs to sell and
value in use. In order to estimate value in use, the future cash flows of the asset analysed (or of the cashgenerating unit to which it belongs, as appropriate) are discounted to their present value using a discount
rate that reflects both the time value of money and the risk specific to the asset. Where the recoverable
amount of an asset is estimated to be less than its carrying amount, the difference is recognised with a
charge to “Impairment Losses” in the consolidated statement of profit or loss. Impairment losses recognised
for an asset are reversed with a credit to this heading when the related recoverable amounts are expected to
increase, thereby increasing the value of the asset up to the limit of the carrying amount that would have
been determined had no impairment loss been recognised, except for goodwill, the impairment losses on
which are not reversible.
The method used to test impairment distinguishes between assets associated with businesses with indefinite
and finite lives. Financial projections with a particular time frame and a perpetual return are used for
businesses with indefinite lives. Projections in accordance with the actual lives of the assets or lines of
business are used for businesses with finite lives. In both cases the projections are based on reasonable and
well-founded assumptions.
Any losses arising from the excess of cost over the recoverable amount of these assets at the consolidated
balance sheet date are allocated to the assets to which they relate (see Notes 7, 8 and 9).
The following discount rates were used to test for impairment:
After tax rates in euros
Spain
7.4%
Discount rate
Tunisia
8.9%
Uruguay
7.8%
Tunisia
14.3%
Uruguay
17.9%
Equivalent rate before tax in local currency
Discount rate
17
In general, the discount rates used are slightly higher than those applied in 2013 due mainly to the increase
in the risk premium in the foreign countries in which the Group operates. In Tunisia, the discount rate used
was 8.9% whereas in 2013 it was 8.1%.
The growth rates used are equivalent nominal rates: the after-tax calculation in euros is tied to the long-term
inflation forecast in the euro zone and the average growth expectations in all the markets in which the Group
operates are estimated at 2%.
Analysis by geographical segment:
In all cases, the key assumptions of these projections refer to:
•
Production volume and sales
•
Selling price and production costs
4-year cash flow projections, plus a perpetual return, were used in all the cases analysed.
Spain
Production volume and sales
In 2014 the cement and concrete markets slowed their decline compared to previous years, although a drop
of around 10% was experienced in Catalonia, the main base of the Group's operations. In Spain, however,
consumption finished the year with 0.4% growth, which seems to indicate the end of a continuous six-year
decline.
In a setting in which we believe the market has now bottomed out, moderate growth in the consumption of
cement, concrete and other related materials is anticipated in 2015. As regards cement -the Company's
main market- we anticipate yearly growth of 5% until 2018.
Selling prices and costs
In 2014 prices made a slight recovery although their impact varied depending on the business analysed
(cement, concrete, aggregates, mortars, etc.). This recovery will foreseeably continue and, in any event, at
medium term, prudent estimates point to increases in line with inflation.
Based on the performance of the key assumptions and of the projections made for the businesses located in
Spain, and in accordance with the estimates and valuations available to the Parent's directors, the value of
the net assets is not in question.
Sensitivity analysis
In general, sensitivity was analysed in accordance with the changes in the main variables of the various
businesses, particularly the sales volumes and prices for both cement and concrete, without observing any
possible impairment in the assets under analysis.
Tunisia
The impairment test was performed for the group of net assets comprising the smallest cash generating unit,
in this case the company SOTACIB, S.A. (located in Feriana, near the border with Algeria), which engages in
the production and sale of white cement and has a production capacity of approximately 700 thousand
tonnes of cement.
The political uncertainty reigning in the country has caused the country risk premiums to worsen.
Nevertheless, the first democratic elections took place at the end of the year with a high turnout and they are
expected to bring some stability to the country.
18
SOTACIB's activity in 2014 remained stable compared to 2013, maintaining the same volumes in terms of
the domestic market, although exports saw a decline.
The subsidies for the cost of consumption of electricity and gas were cut off, which was accompanied by the
authorisation to increase cement prices.
The key assumptions used for the cash flow projections are sales in tonnes in both the domestic and each of
the export markets, selling prices and production costs.
Production volume and sales:
As mentioned, local sales remained stable compared to 2013. However, export sales decreased by 28%.
As regards exports to Libya, the main problem was the political and social instability in the country and, in
the case of Algeria, the introduction of tariffs for the Group's products.
Exports to Europe were reduced by half due to one-off problems that have now been resolved and 2013
levels of exports are expected to be recovered in 2015.
A certain level of recovery is expected of the export markets in the future course of operations. A recovery is
expected in Algeria, although it is not expected that the sales levels reached in 2011 will be recovered. The
recovery forecast in Libya points to sales volumes in line with those attained in 2013. In any event,
production capacity is not expected to be saturated.
Selling price and costs:
As regards prices, in 2014 prices increased considerably both in the domestic and export markets.
In both markets it has been possible to pass on a portion of the price shortfall from prior years.
The Company was adversely affected by the removal of the electricity and gas subsidies, leading costs to
increase in stages of 10% every six months up to a maximum of 70%. The Company envisages making
those changes to its production process required to mitigate the effect of the cost increases.
Prices are expected to increase in the coming years in both the domestic and export markets. The net effect
of the price increase -itself offset by the increase in costs mitigated partially by the investments being carried
out- leads us to a scenario in which we expect to bring margins back to appropriate levels that are within
industry averages.
However, the cash flows generated do not meet the recoverable amount of the net assets of the SOTACIB
S.A. CGU.
The recoverable amount of the SOTACIB S.A. CGU obtained from the analysis of discounted cash flows is
EUR 82.7 million. The value of the net assets comprising this unit is EUR 91.3 million.
The difference between the value of the assets and the value of the discounted cash flows is an impairment
loss of EUR 8.6 million. Accordingly, impairment was recognised on intangible assets, i.e. the value assigned
to the trademark, which had been carried prior to impairment at EUR 9 million.
Sensitivity analysis
We have conducted a sensitivity analysis of the main business assumptions: selling prices in the export
markets, changes in the costs of the main raw materials and production capacity saturation.
The effect of the business variables indicates a shift ranging from -7% to +8% in the recoverable amount of
the assets.
19
Uruguay
An analysis was carried out of the assets relating to Cementos Artigas since it was accounted for using the
equity method, at its fair value at the time of the transaction (see Note 3-k), following a loss of control.
In 2014 a certain slowdown took place in the cement and concrete markets, although margins remained at
highly suitable levels. The estimates available to the company and the projections auger stability and
continuity.
The projections made do not suggest the need for any analysis of the value of the investment accounted for.
i)
Financial instruments
Financial assets
The Group determines the most appropriate classification for each financial asset on acquisition and such
classification is reviewed at the end of each year. Current and non-current financial assets are classified into
the following categories:
•
Held-for-trading financial assets: assets acquired mainly for the purpose of generating a profit as a result
of changes in value.
The assets included in this category are recognised at fair value in the accompanying consolidated
balance sheet, and changes in value are recognised in the accompanying consolidated statement of
profit or loss under “Finance Costs” or “Finance Income”, as appropriate.
•
Loans and receivables: these are recognised initially at fair value in the consolidated balance sheet, and
are subsequently measured at amortised cost using the effective interest rate.
The Group makes the appropriate provisions with a charge to consolidated income for the difference
between the amount of the receivables expected to be recovered and the carrying amount at which they
are recognised.
•
Held-to-maturity investments: these are financial assets that the Group has the intention and ability to
hold to the date of maturity, and are recognised at amortised cost using the effective interest rate.
•
Factoring transactions: the Group derecognises the financial assets when they expire or when the rights
to the cash flows from the financial asset have been transferred and substantially all the risks and
rewards of ownership of the financial assets have also been transferred, where the Group does not
retain any credit or interest rate risk.
•
Available-for-sale financial assets: these are any assets that do not fall into any of the above four
categories. These investments are carried at year-end fair value in the consolidated balance sheet. In
the case of investments in unlisted companies, fair value is obtained through alternative methods such
as comparison with similar transactions, or by discounting expected cash flows. Changes in fair value
are recognised with a charge or credit to “Valuation Adjustments” in consolidated equity. On disposal of
these investments, the cumulative net valuation adjustments are recognised in full in the consolidated
income statement.
Investments in the share capital of unlisted companies whose fair values cannot be measured reliably
are measured at acquisition cost.
Financial liabilities
Financial liabilities include accounts payable by the Group that have arisen from the purchase of goods
or services in the normal course of the Group's business and those which, not having commercial
substance, cannot be classed as derivative financial instruments.
Accounts payable are initially recognised at the fair value of the consideration received, adjusted by the
directly attributable transaction costs. These liabilities are subsequently measured at amortised cost.
20
Liability derivative financial instruments are recognised at fair value using the same criteria as those
applied to financial assets held for trading described in the preceding section.
The Group derecognises financial liabilities when the obligations giving rise to them cease to exist.
j)
Derivative financial instruments and hedge accounting
The Cementos Molins Group had not identified any embedded derivatives (forward contracts at a fixed price)
at any of the Group companies at 2014 year-end.
The transactions with financial derivatives at year-end relate to:
•
Interest rate hedges on certain borrowings.
•
Foreign currency hedging transactions in Bangladesh for intra-Group commercial transactions with
India.
The Group’s use of financial derivatives is governed by financial risk management policies, which provide
guidelines for their use.
Cementos Molins does not use derivative financial instruments for speculative purposes.
The accounting treatment of hedging transactions with derivative instruments is as follows:
•
Fair value hedges
Changes in the market value of the derivative financial instruments designated as hedges and of the
hedged items are charged or credited to “Financial Loss” in the consolidated income statement.
•
Cash flow hedges
Changes in the market value of these derivative financial instruments are recognised, for the effective
portion, directly in equity, whereas the ineffective portion is recognised in the consolidated income
statement. The amount recognised in equity is not transferred to the consolidated income statement
until the results of the hedges are recognised therein or until the expiry of these transactions.
If hedge accounting is discontinued, the loss or gain accumulated in equity at that date is retained in equity
until the hedged transaction occurs, at which time it will be allocated to profit or loss as an addition to or a
reduction of the results of the transaction. The market value of the various financial instruments relates to
their market price at the end of the reporting period.
k)
Investments in companies accounted for using the equity method
Investments accounted for using the equity method are stated at the value of the share of the net assets of
the investee, increased by the value of the goodwill still existing at the reporting date.
Investments accounted for using the equity method arising from a loss of control are recognised at their fair
value at the time of the transaction and are reviewed annually for any indication of the existence of
impairment as indicated in Note 3-h.
l)
Shares of the Parent
The Parent's treasury shares, which are listed, are recognised at acquisition cost as a deduction from equity.
Gains or losses on the purchase, sale, issue or retirement of the Parent's own equity instruments are
recognised directly in equity.
21
m) Non-current assets and disposal groups classified as held for sale
The Group classifies a non-current asset or disposal group as held for sale when the decision to sell it has
been taken and the sale is expected to occur within twelve months.
These assets or disposal groups are measured at the lower of their carrying amount and fair value less costs
to sell.
Non-current assets classified as held for sale are not depreciated, but rather at the end of each reporting
period the related valuation adjustments are made to ensure that the carrying amount is not higher than fair
value less costs to sell.
Income and expenses arising from non-current assets and disposal groups classified as held for sale which
do not qualify for classification as discontinued operations are recognised under the related heading in the
consolidated statement of profit or loss on the basis of their nature.
When the criteria required for classifying an asset (or disposal group) as held for sale are no longer met, the
asset (or disposal group) is reclassified under the balance sheet headings corresponding to its nature and is
measured at the reclassification date at the lower of its carrying amount prior to its classification as a noncurrent asset held for sale adjusted, if appropriate, by the amortisation and depreciation charge and
impairment losses which would have been recognised had it not been classified as held for sale, and its
recoverable amount. Any difference is recognised in the consolidated statement of profit or loss in
accordance with its nature.
n)
Inventories
Raw materials and supplies are recognised at the lower of acquisition cost and market value. In the most
general case, acquisition cost is calculated by reference to the annual average cost.
Finished goods and work in progress are measured at average cost (materials, labour and direct and indirect
manufacturing expenses).
Obsolete, defective or slow-moving inventories have been reduced to realisable value.
Any losses arising from the excess of cost over the realisable value of the inventories at the balance sheet
date are recognised under "Write-downs" on the liability side of the accompanying consolidated balance
sheet.
o)
Debts
Debts are recognised at nominal value. Debts due to be settled within more than twelve months are
classified as non-current liabilities and those due to be settled within twelve months as current liabilities.
Interest expenses are recognised on a time proportion basis in the year in which they accrue.
In accordance with IAS 32 and IAS 39, debt arrangement expenses are recognised in the accompanying
consolidated balance sheet as a deduction from the related debt and are recognised in the consolidated
statement of profit or loss over the same period as the term of the debt.
p)
Pensions and similar obligations
The pension obligations to the employees at the Spanish companies adhere to the provisions of the
collective agreements in force, which are arranged through occupational pension plans under Law 8/1987,
and are defined contribution plans. The amounts contributed are recognised in full under “Staff Costs Contributions to Pension Plans” in the accompanying consolidated statement of profit or loss.
The defined benefit obligations for Cementos Molins, S.A. are limited to the group of retirees prior to
conversion to defined contribution of the obligation under the collective agreement.
22
Methods applied in the valuations
The amount of the defined retirement benefit obligations was determined using the following techniques:
•
Valuation method: the actuarial valuations were calculated on a projected unit credit basis, which is the
method accepted under EU-IFRSs. The value of the pension obligations is calculated on the basis of the
present value of the benefit obligations and takes into account the number of years of service by employees.
•
Actuarial assumptions employed: unbiased and mutually consistent.
•
The estimated retirement age of each employee is the first at which the employee would be entitled to
retire under the employment and social security legislation in force in each country taking into account, if
any, such labour agreements as might be entered into pursuant to current legislation.
The regular contributions made during the year, made up basically of the ordinary cost and, where
applicable, the risk premium, are recognised with a charge to the consolidated statement of profit or loss for
the year.
At the balance sheet date, the positive difference between the present value of the defined benefit liabilities
and the fair value of the plan assets is recognised as a liability in the consolidated balance sheet. If this
difference is negative, it is recognised as an asset in the consolidated balance sheet only for the portion
relating to the present value of any future economic benefits that could become available through plan
redemptions or reductions in future plan contributions.
Actuarial gains and losses that could arise due to either increases or decreases in the present value of the
defined benefit liabilities, or to changes in the fair value of the plan assets, are recognised directly in equity.
Actuarial gains and losses arise from variances between the estimated and actual performance of actuarial
assumptions or the restatement of established actuarial assumptions.
The causes of these gains and losses include the following:
q)
•
The effect of changes in estimates of the rates of employee turnover, mortality, early retirement and
employee salary increase, and the effect of changes in benefits due to variances in inflation, and
•
The return on the plan assets, excluding the amounts included in net interest.
Provisions and contingent liabilities
1.
Provisions: the Group recognises a provision where it has an obligation to a third party arising from past
events, the settlement of which will give rise to an outflow of economic benefits whose amount and/or
timing are not known with certainty but can be estimated with reasonable reliability.
Provisions are quantified on the basis of the best information available on the event and its
consequences and are reviewed and adjusted at the end of each year. Provisions are used to cater for
the specific risks for which they were originally recognised, and are fully or partially reversed when such
risks cease to exist or are reduced.
The provision for third-party liability includes emission allowances and quarry restoration costs.
The Group's policy for companies which have acquired restoration obligations on the basis of the
applicable legislation in each country in which they operate is to recognise a provision for the
restoration costs incurred in proportion to the percentage of completion of the operation and an
additional provision for restoration costs to be incurred only once the operation has been completed.
In relation to the latter costs, the Group considers as acquisition costs of the assets the related site
restoration costs, to the extent that they must be considered a provision for future costs (IAS 37,
Provisions, Contingent Liabilities and Contingent Assets). Consequently, restoration costs must be
recognised at their discounted amount, provided that the effect of discounting is significant, and must be
amortised over the asset's useful life or pattern of consumption. The provision must be reduced by the
restoration costs actually incurred.
23
Emission allowances: see Note 29.
2.
r)
Contingent liabilities: contingent liabilities are possible obligations that arise from past events and
whose future materialisation and associated loss are estimated to be unlikely. In accordance with EUIFRSs, the Group does not recognise any provision in this connection. However, as required, they are
disclosed.
Termination benefits
Under the legislation prevailing in each case, the Spanish consolidated companies and certain Group
companies located abroad are required to pay termination benefits to employees terminated without just
cause. Therefore, termination benefits that can be reasonably quantified are recognised as an expense in
the year in which the decision to terminate the employment relationship is taken. The accompanying
consolidated financial statements do not include any provision in this connection.
s)
Revenue and expense recognition
Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related goods
and services occurs, regardless of when the resulting monetary or financial flow arises. In accordance with
the principles laid down in the EU-IFRS conceptual framework, the Group recognises revenue when it is
earned together with all the required associated expenses. Sales of goods are recognised when the goods
are delivered and the risks and rewards incidental to ownership have been substantially transferred.
Dividend income from investments in financial assets is recognised when the shareholder’s rights to receive
payment have been established.
Gains and losses arising from the sale or retirement of an asset are determined as the difference between
the carrying amount of the asset and its selling price, which is recognised in the consolidated statement of
profit or loss.
t)
Income tax
The current income tax expense is the amount payable by the Group as a result of income tax settlements
for a given year. Tax credits and other tax benefits, excluding tax withholdings and pre-payments, and tax
loss carryforwards from prior years effectively offset in the current year reduce the current income tax
expense.
The deferred tax expense or income relates to the recognition and derecognition of deferred tax assets and
liabilities. These include temporary differences measured at the amount expected to be payable or
recoverable on differences between the carrying amounts of assets and liabilities and their tax bases, and
tax loss and tax credit carryforwards. These amounts are measured at the tax rates that are expected to
apply in the period when the asset is realised or the liability is settled.
Deferred tax assets are recognised to the extent that it is considered probable that the Group will have
taxable profits in the future against which the deferred tax assets can be utilised.
Also, at consolidated level, any differences between the consolidated carrying amount of an investment in
an investee and the related tax base are also taken into account. In general, such differences arise from the
undistributed profits generated since the date of acquisition of the investee, from tax credits associated with
the investment and, in the case of investees with a functional currency other than the euro, from translation
differences. The deferred tax assets and deferred tax liabilities arising from these differences are
recognised, unless, in the case of taxable temporary differences, the investor is able to control the timing of
the reversal of the temporary difference and, in the case of deductible temporary differences, it is probable
that the temporary difference will reverse in the foreseeable future and it is probable that the Group will
have sufficient future taxable profits.
Deferred tax assets and liabilities arising from transactions charged or credited directly to equity are also
recognised in equity.
24
The deferred tax assets recognised are reassessed at the end of each reporting period and the appropriate
adjustments are made to the extent that there are doubts as to their future recoverability.
The amount of tax credits that are expected to be taken is also recognised (see Note 23).
Cementos Molins, S.A. files consolidated tax returns as provided for in Chapter VII of Title VII of Legislative
Royal Decree 4/2004, of 5 March, approving the Consolidated Spanish Income Tax Law. The companies
forming the group for tax purposes: Cementos Molins, S.A., Cementos Molins Industrial, S.A.U., Cemolins
Internacional, S.L.U., Cemolins Servicios Compartidos, S.L.U., Prefabricaciones y Contratas, S.A.U.,
Promotora Mediterránea-2, S.A., Propamsa, S.A.U. and Monsó-Boneta, S.L. file consolidated tax returns.
Consequently, the consolidated income tax expense includes the benefits arising from the use of tax loss
and tax credit carryforwards that would not have been recognised had the companies that make up the
aforementioned tax group filed individual tax returns.
u)
Earnings per share
Basic earnings per share are calculated by dividing net profit attributable to the Parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing diluted net profit attributable to the Parent by the
weighted average number of ordinary shares outstanding during the year, adjusted by the weighted average
number of effective ordinary shares that would have been outstanding assuming the conversion of all the
potential ordinary shares into ordinary shares of the Parent. For these purposes, it is considered that the
shares are converted at the beginning of the year or at the date of issue of the potential ordinary shares, if
the latter were issued during the current period.
In the case of the Molins Group, the weighted average number of shares is not diluted since there are no
additional equity instruments.
v)
Foreign currency transactions
The Group’s functional currency is the euro. Balances in foreign currencies are translated to euros in two
consecutive phases:
•
Translation of foreign currencies to the subsidiaries' functional currencies, and
•
Translation to euros of balances held in the functional currencies of the subsidiaries whose functional
currency is not the euro.
Transactions in foreign currencies by the consolidated companies are initially recognised in their respective
financial statements at the equivalent value in their functional currencies based on the exchange rates
prevailing at the date of the transaction. Subsequently, for the purposes of presentation in their separate
financial statements, the consolidated companies translate the balances in foreign currencies to their
functional currencies using the exchange rates prevailing at the balance sheet date.
The balances in the financial statements of consolidated companies whose functional currency is not the
euro are translated to euros as follows:
Assets and liabilities are translated by applying the exchange rates prevailing at the balance sheet date.
Income, expenses and cash flows are translated at the average exchange rates for the year.
Equity is translated at the historical exchange rates.
25
The average and closing spot rates used in the translation to euros of the balances in foreign currencies were
as follows:
1 euro
US dollar (USD) (United States)
Argentine peso (Argentina)
Mexican peso (Mexico)
Uruguayan peso (Uruguay)
Boliviano (Bolivia)
Bangladeshi taka
Indian rupee
Tunisian dinar (TND) (Tunisia)
Chinese yuan
31/12/14
31/12/13
Average
Closing
Average
Closing
1.321
10.868
17.651
30.821
9.063
102.539
78.731
2.249
8.148
1.214
10.382
17.890
29.543
8.329
94.639
76.891
2.262
7.536
1.331
7.380
17.099
27.411
103.819
83.738
2.167
8.237
1.379
8.993
18.018
29.498
107.225
85.362
2.266
8.408
The financial balances held in euros by the companies included in the scope of consolidation do not give rise
to exchange differences in the consolidated financial statements.
w) Transactions with related parties
The Group performs all its transactions with related parties on an arm’s length basis. Also, the transfer
prices are adequately supported and, therefore, the Parent’s directors consider that there are no material
risks in this connection that might give rise to significant liabilities in the future.
x)
The environment
The Group companies generally classify the amounts used for the protection and enhancement of the
environment as environmental expenses. However, the amounts relating to items added to fixtures,
machinery and equipment used for this purpose are capitalised.
y)
Consolidated statement of cash flows
The following terms are used in the consolidated statement of cash flows with the meanings specified:
z)
Cash flows: inflows and outflows of cash and equivalent financial assets, which are short-term, highly
liquid investments that are subject to an insignificant risk of changes in value.
Operating activities: the Group's principal revenue-producing activities and other activities that are not
investing or financing activities.
Investing activities: the acquisition and disposal of long-term assets and other investments not included
in cash and cash equivalents.
Financing activities: activities that result in changes in the size and composition of the equity and
borrowings that are not operating activities.
Current/non-current classification
Current assets are assets associated with the normal operating cycle, which in general is considered to be
one year; other assets which are expected to mature, be disposed of or be realised within twelve months
from the end of the reporting period; financial assets held for trading, except for financial derivatives that will
be settled in a period exceeding one year; and cash and cash equivalents. Assets that do not meet these
requirements are classified as non-current assets.
Similarly, current liabilities are liabilities associated with the normal operating cycle, financial liabilities held
for trading, except for financial derivatives that will be settled in a period exceeding one year; and, in general,
all obligations that will mature or be extinguished at short term. All other liabilities are classified as noncurrent liabilities.
26
4.
Business combinations
Corporate transactions at Sotacib Kairouan, S.A. and Sotacib, S.A.
At 31 December 2013, the Group company Cemolins Internacional, S.L. held a total ownership interest of
67.12% in the share capital of the Tunisian company Sotacib Kairouan, S.A., 65% of which was held directly
and the remaining percentage was held through the Tunisian company Sotacib, S.A., in which Cemolins
Internacional, S.L. held a 65% interest.
On 18 April 2014, Sotacib, S.A. sold the 3.3% ownership interest that it held in the share capital of Sotacib
Kairouan, S.A. All these shares were acquired by the Company's shareholders, including Cemolins
Internacional, S.L. Thereafter, the ownership interest held by Cemolins Internacional, S.L. in the share
capital of Sotacib Kairouan, S.A. became direct and increased to 67.19%.
Subsequently, capital was increased at Sotacib, S.A. by TND 35 million, and this amount which was
subscribed and paid in full by Sotacib Kairouan, S.A. in May 2014. Following the capital increase, the
percentage ownership interest held by Cemolins Internacional, S.L. (directly and indirectly through Sotacib
Kairouan, S.A.) in Sotacib, S.A. was set at 65.63%.
"Reserves of Consolidated Companies" and "Equity of Non-Controlling Interests" were adjusted to reflect the
changes in the ownership interest in the subsidiary, and the difference between the amount by which "Equity
of Non-Controlling Interests" was adjusted and the fair value of the consideration received was recognised in
equity under "Reserves of the Parent".
Investment in Bolivia
The Cementos Molins Group has reached an agreement with Votorantim and a local partner, COCECA, to
invest in a new full-scale cement plant in Bolivia. The plant will be located in eastern Bolivia, in the Santa
Cruz department, German Busch province, Puerto Suarez municipality, in the town of Yacuces. It will be
strategically located in an enclave 61 kilometres from the border with Brazil and from ports that access the
Paraguay and Paraná rivers through the "hidrovía". It will also be located 582 kilometres from the city of
Santa Cruz de la Sierra, the company's main market.
Bolivia is a market consuming approximately 3.5 million tonnes of cement and is expected to grow at an
annual rate of 5%. The state of Santa Cruz consumes approximately 30% of the total volume of this demand.
USD 216 million are expected to be invested in the new plant, of which USD 96 million will be contributed by
the shareholders both in cash and in assets and the remaining USD 120 million will be financed with local
borrowings in the local currency. Construction work on the new plant already commenced in 2014.
From a corporate point of view, the project will be structured through two companies: Itacamba Cementos,
S.A., which will address the industrial part, and GB Minerales y Agregados, S.A., which will address the
mining part. The corporate structure in 2014 was as follows:
- On 31 July 2014, Cemolins Internacional, S.L.U. and Votorantim Cimentos EAA Inversiones, S.L.
incorporated the Spanish company Yacuces, S.L. Cemolins Internacional, S.L.U. holds a 49% stake in
the company and Votorantim Cimentos EAA Inversiones, S.L. a 51% stake. Cemolins Internacional,
S.L.U. contributed EUR 6.9 million.
- Also, on 3 September 2014 Yacuces, S.L. acquired 66.67% of the share capital of the Bolivian
company Itacamba Cementos, S.A. for USD 18.6 million and 96% of the Bolivian company GB
Minerales y Agregados, S.A. for BOB 4,800 million.
- In addition, Cemolins Internacional, S.L.U. acquired 2% of GB Minerales y Agregados, S.A. for BOB
100 million.
- On 30 October 2014, capital was increased at Yacuces, S.L., Itacamba Cementos, S.A. and GB
Minerales y Agregados, S.A.
27
o
o
o
Cemolins Internacional, S.L.U. subscribed the capital increase at Yacuces, S.L. in proportion to its
percentage of ownership and paid EUR 8.5 million to subscribe new shares and the related share
premium.
Itacamba Cementos, S.A. increased capital by USD 16 million, which was subscribed by Yacuces,
S.L. in proportion to its percentage ownership interest. This capital increase was carried out with a
view to investing in the construction of the Yacuces cement plant.
In addition, GB Minerales y Agregados, S.A. increased capital by USD 11 million in order to carry
out the investments necessary for the mining operations at the Chachi and Gladys quarries. The
capital increase was subscribed by the shareholders in proportion to their percentage ownership
interests.
At 2014 year-end, the deadlines for capital contribution provided for in the investment schedule were being
met and the shareholders subscribed the aforementioned USD 27 million in full at both Itacamba Cementos,
S.A. and GB Minerales y Agregados, S.A.
The initial consideration settled and the capital contributions made by the Group in this investment totalled
EUR 15,380 thousand, which were paid in full. There are no contingent payment obligations, except the
envisaged future investment plan described above. The goodwill arising on this transaction amounting to
EUR 2,505 thousand is shown in accordance with IAS 28 as a portion of the value of the investment
accounted for using the equity method.
The contribution of this investment accounted for using the equity method to profit for 2014 is detailed in
Note 10. The effect of considering the impact on profit or loss from the beginning of the year would not be
material.
Acquisition of a group of industrial assets
On 15 November 2013, the Group company Cementos Molins Industrial, S.A.U. acquired from Cemex
España Operaciones, S.L. a group of industrial assets located in Sant Feliu de Llobregat corresponding to
the industrial facilities for the production of cement and the rights to operate a quarry. The transaction was
completed by executing in a public deed the agreement initially entered into in June 2013 following receipt of
prior approval from the Spanish National Competition Commission and on fulfilment of the conditions
precedent provided for in the agreement.
The transaction formed part of the divestment process being carried out by the seller in certain of the
markets in which it had operated, which enabled Cementos Molins to integrate the industrial assets into its
own organisation, taking advantage of the synergies that will foreseeably arise in both the sales and the
industrial areas.
The main information on the transaction pursuant to IFRS 3 is provided below:
The total consideration to be paid by the purchaser amounted to EUR 40 million, of which EUR 34 million
plus the related indirect taxes had already been paid to the seller in cash at the transaction date. The other
EUR 6 million will also be paid in cash in November 2015, two years after the transaction closing date. The
present value of the consideration that will be paid in 2015 was estimated at EUR 5,505 thousand applying a
discount rate of 4.4%.
The detail of the fair value of the identifiable net assets acquired determined based on a valuation of the
industrial assets performed by an independent third party and the valuations conducted internally of the other
assets, is as follows (in thousands of euros):
- Land
9,717
- Buildings
3,068
- Machinery and facilities
4,523
- Rights to operate quarries
- Total consideration paid
400
(34,000)
28
- Present value of future payments
(5,505)
- Goodwill
21,797
In relation to goodwill, for tax purposes the acquisition cost was deducted from goodwill up to a maximum
annual limit of one-twentieth of the amount, although temporarily from 2012 to 2014, the limit is onehundredth of the amount, provided that all of the conditions and requirements established in the tax
regulation are met for it to be considered a deductible expense. Specifically, the goodwill arose by virtue of
an acquisition for valuable consideration, it was not acquired from another entity in the group of companies in
accordance with the criteria established in Article 42 of the Commercial Code as worded in Law 16/2007 and
lastly, a restricted reserve was set up for the amount of amortisation for tax purposes taken on the goodwill.
The goodwill arising from the aforementioned acquisition corresponded to the synergies and economies of
scale the Group expects to arise in the sales and industrial areas in the future. Considered as a whole, it is
expected that this acquisition will help increase the Group's presence in the market in which it operates.
These assets were included in the cement cash generating unit (CGU) in the domestic market.
All the costs related to the transaction were recognised in the consolidated statement of profit or loss for
2013.
5.
Risk management
The Cementos Molins Group carries on its activities in various businesses, all related to cement, cement byproducts and building materials, and in highly diverse geographical areas, both in Spain and abroad.
These circumstances give rise to certain risks such as:
•
•
•
•
industry risks, with particular consideration of environment and occupational risk prevention,
operating risks inherent to the market in which the Group operates,
risks arising from the economic environment depending on the country in question, with an impact on
exchange rates,
regulatory risks affected by the various tax and industry regulations.
The Board of Directors and the various committees, the corporate management committees, the various
management committees of each of the business units and the functional committees (earnings, human
resources and prevention, customer risk, etc.) meet on a periodic basis to assess the risks and attempt to
minimise them to the extent possible.
Independently, the internal audit department is responsible for:
•
•
•
reviewing the rules and procedures established and proposing improvements,
analysing, supervising and controlling financial risks,
systematically auditing the companies’ various areas.
The Group’s business activities may be affected by the performance of the business cycles in the areas in which
it operates. However, due to its progressive internationalisation and diversification, the Group can mitigate the
possible impacts of cycle changes.
The Company is exposed to various financial market risks that arise as a result of its ordinary business, of the
borrowings arranged to finance its operations and its investments in companies. The Group’s geographical
diversification helps to partly offset these risks.
Specifically, the main market risks affecting the Group companies are:
1) Foreign currency risk:
Foreign currency risk arises principally due to:
29
(i) the international presence of Cementos Molins, which has investments and businesses in countries with
currencies other than the euro: Mexico, Argentina, Uruguay, Bolivia, Bangladesh, India, China and Tunisia. The
balance sheet risk of these investments is not hedged since it is considered that the earnings performance
thereof amply offsets any possible depreciation of these countries' currencies. Over the last five years, profits
contributed by the foreign subsidiaries have totalled EUR 317 million and negative translation differences have
amounted to EUR 55 million.
The sensitivity of the Group’s consolidated earnings and equity to changes in exchange rates prevailing at 31
December 2014 is as follows:
2014
+10%
Effect on net profit
Effect on equity
(5,31)
(34,40)
-10%
6,49
42,04
(In millions of euros)
2013
+10%
-10%
(5,56)
(30,60)
6,80
37,40
In 2014 the Argentine peso experienced a significant devaluation against the US dollar. Thus, at 2014 year-end,
the exchange rate was ARS 8.551/USD 1 (2013 year-end: ARS 6.521/USD 1).
In view of this situation, and in relation to the analysis of the recoverable amount of the assets based on the
generation of cash flows of one CGU, we carried out a sensitivity analysis of the discounted cash flows based on
a business plan prepared for the CGU which comprises all the assets of the business in Argentina under the
assumption that the Argentine peso will be further devalued on an annual basis at a rate of 30%. The outcome of
this analysis indicated that there would be no risk of impairment of the assets.
(ii) due to borrowings or cash in the currencies of the various countries in which the Group carries on its business
or in which the companies have arranged the borrowings.
In those countries in which borrowings have been arranged, the Group attempts to mitigate, at least partially, any
potential loss in the value of the cash flows generated by the businesses in these currencies (caused by the
depreciation of the related currency against the euro) with savings arising from the decrease in the euro value of
debt denominated in foreign currency. This is the case of the investments in Tunisia (where the Group has
borrowings in local currency that represent 37.31% of the Group’s total gross debt and all of the borrowings
arranged in that country).
For those countries in which the Group holds surplus positions, the company attempts to mitigate (at least
partially) any potential loss in the value of the cash flows generated by the businesses in these currencies
(caused by the depreciation of the related currency against the euro) with gains from holding euro or US dollar
positions which in certain cases are also invested in non-resident accounts overseas in these currencies to avoid
the country risk component. This is the case of Uruguay, where the Group holds cash in US dollars and euros
which represents 47% of the total cash held in the investee.
2) Interest rate risk:
In the first half of 2009, the Group obtained new loans to finance its investments and, therefore, it prepared a
financial risk management policy to hedge, basically, its exposure to interest rates.
The hedging instruments arranged by the Group, floating-to-fixed interest rate swaps, are perfectly aligned with
the hedged items (all bank borrowings), both in terms of nominal amount and repayment terms and accrual of
interest.
19% of gross bank borrowings bear a fixed-interest rate. Of this 19%, 6.47% are arranged through interest rate
swaps and the other 12.94% through financing contracts with an established fixed interest rate.
The impact of the borrowing costs on the Group’s earnings in 2014 and 2013 was as follows:
30
2014
Interest income
Finance costs on debts
Total
(EBITDA + share of profit of companies accounted
for using the equity method)/Finance costs
2013
8.397
23.536
15.139
8.986
25.299
16.313
8,16
6,55
The impact of sensitivity of interest rates is low due to the Group’s consolidated balance sheet and consolidated
statement of profit or loss structure. Therefore, an increase of 100 basis points in the interest rate would give rise
to a reduction in net profit of EUR 2 million.
3) Liquidity risk
At 31 December 2014, the gross bank borrowings maturing in 2015 amounted to EUR 54,201 thousand, which
are lower than available funds, measured as the sum of: a) cash and cash equivalents at 2014 year-end
amounting to EUR 111,222 thousand and current financial assets at 31 December 2014 amounting to EUR
22,407 thousand; b) the annual cash generation envisaged for 2015; c) one long-term deposit of EUR 5,000
thousand maturing in January 2016; and d) the undrawn credit facilities arranged with banks with initial maturities
of more than one year (EUR 125,747 thousand) and those maturing in 2015 (EUR 7,812 thousand).
At 31 December 2013, the gross bank borrowings maturing in 2014 amounted to EUR 122,934 thousand, which
are lower than available funds, measured as the sum of: a) cash and cash equivalents at 2013 year-end
amounting to EUR 110,695 thousand and current financial assets at 31 December 2013 amounting to EUR
50,802 thousand; b) the annual cash generation envisaged for 2014; c) two long-term deposits of EUR 12,042
thousand maturing in January 2015; and d) the undrawn credit facilities arranged with banks with initial maturities
of more than one year (EUR 35,461 thousand) and those maturing in 2014 (EUR 91,761 thousand).
4) Credit risk
The Group's borrowings are arranged with banks with high credit ratings.
With respect to the credit risk of cash and cash equivalent items, the Group mainly places its cash surpluses in
fixed-term investments and current accounts.
As regards the subsidiaries, the management of Cementos Molins, S.A. supervises and monitors the investments
made outside the country of origin of the subsidiary (the policy of which is established by the Board of Directors
of each subsidiary).
Note 21-a "Financial Liabilities” details the hedges arranged by the Group and their fair value.
At 31 December 2014, the Group was not using derivative financial instruments for speculative purposes.
With respect to the credit risk of the Group’s customers, the Group is exposed to delays in collections and
doubtful debts.
The Group pays particular attention to the management of loans granted and the monitoring thereof. This is
regarded as a cornerstone for the Group's growth.
Every customer has a maximum credit limit that it can assume based on external reports, internal assessments
or credit rating agencies.
All Group companies have a Risk Committee in which the credit limits granted and their performance are
analysed. Also, the situation of customers is monitored by the Board of Directors of each company.
31
At 31 December 2014 and 2013, there was no significant unhedged or unguaranteed credit risk concentration.
The allowance for doubtful debts in 2014 amounted to EUR 0.9 million (2013: EUR 3.5 million) (see Note 15).
At 31 December 2014, the balance of past-due amounts for which provisions had not been recorded amounted to
EUR 17.8 million (31 December 2013: EUR 17.9 million) with the following maturity periods:
2014
Millions of euros
11,87
1,77
2,30
1,86
17,80
Less than 30 days
Between 30 and 60 days
Between 60 and 90 days
More than 90 days
Total
% of total
67%
10%
13%
10%
100%
2013
Millions of euros
12,36
1,98
2,01
1,54
17,89
% of total
69%
11%
11%
9%
100%
At 31 December 2014, past-due amounts in Spain totalled EUR 3.9 million. Credit insurance and other
guarantees ensure the collection of 36% of the past-due amounts. The past-due amounts of the foreign
subsidiaries do not give rise to collection risks. The allowance for doubtful debts for 2014 for all foreign
subsidiaries was 0.16% of sales. At 31 December 2013, past-due amounts in Spain totalled EUR 4.2 million.
Credit insurance and other guarantees ensured the collection of 26% of the past-due amounts. The past-due
amounts of the foreign subsidiaries did not give rise to collection risks. The allowance for doubtful debts for 2013
for all foreign subsidiaries was 0.06% of sales.
Note 21-a "Financial Liabilities” details the hedges arranged by the Group and their fair value.
6.
Segment reporting and joint ventures
a. Geographical segments
The Cementos Molins Group has determined that the primary format of its segments is based on geographical
areas, since it considers that the Group's risks and returns are affected predominantly by the fact that it operates
in several countries. As a result, the information relating to business segments is presented on a secondary basis.
The geographical segments identified by the Group are as follows:
Spain, Argentina, Tunisia, China, Mexico, Uruguay, Bolivia and Bangladesh.
The detail, by geographical segment, of certain items in the Group's consolidated statement of profit or loss, in
2014 and 2013 is as follows:
31 December 2014
Spain
Argentina
Geographical location
China
Mexico
Uruguay
Tunisia
Bolivia
Bangladesh
Revenue
187.409
251.136
89.122
Other income
9.421
85
339
Total revenue
196.830
251.221
89.461
Operating expenses
(191.299)
(209.152)
(68.472)
(667)
(21.441)
(10.597)
(15.710)
(111)
Other gains and losses
(578)
61
(8.623)
Profit (Loss) from operations
(16.488)
31.533
(3.344)
(778)
Finance costs
...................................................................................................................................................................
Investments in associates
21
38.350
8.765
303
8.133
Profit before tax
...................................................................................................................................................................
Income tax
...................................................................................................................................................................
Profit of non-controlling interests
...................................................................................................................................................................
Profit after tax
...................................................................................................................................................................
32
Total
527.667
9.845
537.512
(469.590)
(47.859)
(9.140)
10.923
(14.811)
55.572
51.684
(14.011)
(6.862)
30.811
31 December 2013
Spain
Argentina
Tunisia
China
Mexico
Uruguay
Bangladesh
Total
Revenue
164.231
284.620
90.451
539.302
Other income
7.895
177
728
8.800
Total revenue
172.126
284.797
91.179
548.102
Operating expenses
(185.225)
(233.548)
(70.179)
(413)
- (489.365)
(18.133)
(16.415)
(16.961)
(70)
(51.579)
Other gains and losses
(3.813)
462
32
(3.319)
Profit (Loss) from operations
(35.045)
35.296
4.071
(483)
3.839
Finance costs
...................................................................................................................................................................
(17.970)
Investments in associates
(77)
28.792
11.570
7.787
48.072
Profit before tax
...................................................................................................................................................................33.941
Income tax
...................................................................................................................................................................
(13.827)
Profit of non-controlling interests
...................................................................................................................................................................
(10.005)
Profit after tax
...................................................................................................................................................................10.109
The detail by geographical segment of certain items in the consolidated balance sheet at 31 December 2014 and
2013 is as follows:
31 December 2014
Spain
Argentina
Tunisia
China
Mexico Uruguay
Bolivia
Bangladesh
Total
ASSETS
Non-current assets
Current assets
Total consolidated assets
340.949
167.475
508.424
120.882
109.813
230.695
229.844
51.279
281.123
4.914
657
5.571
157.203
157.203
62.233
62.233
16.970
16.970
40.196 973.191
- 329.224
40.196 1.302.415
Total equity
Non-current liabilities
Current liabilities
Total consolidated equity and liabilities
541.068
235.999
103.852
880.919
127.936
19.007
55.954
202.897
(5.790)
140.376
28.673
163.259
(850)
2.585
634
2.369
40.954
40.954
9.682
9.682
1.522
1.522
812 715.335
- 397.967
- 189.113
812 1.302.415
31 December 2013
Spain
Argentina
Tunisia
China
Mexico
Uruguay
Bangladesh
Total
ASSETS
Non-current assets
Current assets
Total consolidated assets
362.922
209.516
572.438
135.747
86.244
221.991
244.919
69.189
314.108
4.355
180
4.535
151.318
151.318
64.508
64.508
29.225
29.225
992.994
365.129
1.358.123
Total equity
Current liabilities
Total consolidated equity and liabilities
528.353
243.238
150.558
922.149
127.043
24.563
46.532
198.138
6.391
156.884
34.897
198.172
(430)
1.736
25
1.331
36.662
36.662
13.379
13.379
(11.708)
(11.708)
699.690
426.421
232.012
1.358.123
Joint ventures
The foreign geographical segments relating to the companies in Tunisia (in which the Group holds ownership
interests of between 65.63% and 67.19%), Argentina (in which the Group holds an ownership interest of 51%)
and China (in which the Group holds an ownership interest of 80%) are fully consolidated.
33
As mentioned in Note 3-a, the entry into force of IFRS 11, Joint Arrangements, on 1 January 2014 entailed the
elimination of the option of proportionate consolidation of joint ventures, which are now accounted for by the
equity method. This change of method entails, at consolidated balance sheet level and with regard to interests in
joint ventures, the elimination of non-controlling interests from consolidated equity along with their contributions to
the other asset and liability items and the emergence of non-current financial assets for the underlying carrying
amount of the various ownership interests at their percentage of ownership. In the consolidated statement of
profit or loss, income is recognised arising from effective interest on investments accounted for using the equity
method, and the contributions of these investees are eliminated from the various headings in the consolidated
statement of profit or loss. The foreign geographical segments accounted for using the equity method are Mexico,
Uruguay, Bangladesh and Bolivia (the last since 2014).
b. Business segments
Basis and methodology for geographical segment reporting
The segment’s total revenue consists of revenue directly attributable to the segment.
Segment assets are those directly related to the segment’s operating activities.
The detail of revenue by the business segments in which the Cementos Molins Group operates is as follows:
Business segment
2014
Cement
Concrete and aggregates
Precast concrete
Tile cement and mortar
Other
Total aggregate revenue
Intra-Group sales
Total
2013
333.739
73.870
62.770
52.138
18.946
541.463
(13.796)
527.667
363.474
73.713
47.433
47.484
20.698
552.802
(13.500)
539.302
The analysis by business segment of the items of property, plant and equipment and intangible assets is as
follows:
Business segment
2014
Cement
Concrete and aggregates
Precast concrete
Tile cement and mortar
Other
Total
521.651
26.160
40.339
15.191
10.759
614.100
34
2013
557.481
32.231
41.501
15.962
11.120
658.295
7.
Goodwill on consolidation
The detail of "Goodwill on Consolidation", by company giving rise to it, is as follows:
2014
Subsidiaries:
Cementos Avellaneda, S.A.
Monsó-Boneta, S.L.
Cementos Molins Industrial, S.L.U.
Total
2013
1.682
443
21.797
23.922
1.999
443
21.797
24.239
The net changes in “Goodwill on Consolidation” in the consolidated balance sheet were as follows:
2014
Beginning balance
Increase arising from new acquisitions
Exchange differences
Impairment
Ending balance
2013
24.239
5.253
(317)
-
21.797
(911)
(1.900)
23.922
24.239
The acquisitions in 2013 relate to goodwill arising on the acquisition of a group of industrial assets located in Sant
Feliu de Llobregat (see Note 4).
Impairment in 2013 related to goodwill at one of the Group companies in Spain engaging in the concrete
business.
8.
Intangible assets
The changes in 2014 and 2013 in the main intangible asset accounts and in the related accumulated amortisation
were as follows:
35
Development expenditure
Cost
Accumulated amortisation
Cost
Impairment
Intellectual property
Cost
Impairment
Goodwill
Cost
Leasehold assignment rights
Cost
Computer software
Cost
Other intangible assets
Cost
Total
Cost
Impairment
Increase
(Decrease) due
Additions
to transfer
Balance as Translation or charge
from another Disposals or Balance as
at 01/01/14 differences for the year
account
reductions at 31/12/14
1.657
2.997
3.181
(175)
151
2.071
5.228
(1.524)
2
(709)
(2.231)
6.289
5.642
8.955
2
8.957
(2.378)
(649)
(3.027)
(288)
(288)
9.085
477
9.911
16
9.927
(826)
(1)
(827)
(8.623)
(8.623)
1.299
1.281
1.299
(18)
1.281
8
8
(8)
(8)
1.960
1.748
7.376
(273)
292
206
(166)
7.435
(5.416)
220
(657)
166
(5.687)
15.567
16.667
15.727
155
8.335
(2.269)
(5.053)
16.895
(160)
(5)
(63)
(228)
35.857
28.812
46.457
(311)
8.780
24
(5.219)
49.731
(10.312)
217
(2.079)
166
(12.008)
(288)
(8.623)
(8.911)
36
Development expenditure
Cost
Cost
Impairment
Intellectual property
Cost
Goodwill
Cost
Leasehold assignment rights
Cost
Computer software
Cost
Other intangible assets
Cost
Total
Cost
Impairment
Increase
(Decrease) due
to transfer
Additions
Balance as Translation or charge from another Disposals or Balance as
account
reductions at 31/12/13
at 01/01/13 differences for the year
584
1.657
1.871
(295)
10
1.595
3.181
(1.287)
30
(267)
(1.524)
6.150
6.289
8.415
540
8.955
(2.265)
(113)
(2.378)
(288)
(288)
10.047
9.085
10.872
(961)
9.911
(825)
(1)
(826)
1.350
1.299
1.350
(51)
1.299
8
8
(8)
(8)
2.658
1.960
12.115
(945)
710
(3.889)
(615)
7.376
(9.457)
681
(1.195)
3.940
615
(5.416)
15.941
15.567
16.058
(190)
9.497
(1.864)
(7.774)
15.727
(117)
(59)
16
(160)
36.730
35.857
50.689
(2.442)
10.757
(4.158)
(8.389)
46.457
(13.959)
711
(1.635)
3.940
631
(10.312)
(288)
(288)
“Other Intangible Assets” includes “Greenhouse Gas Emission Allowances” (see Note 29).
Fully amortised intangible assets in 2014 amounted to EUR 11,241 thousand (2013: EUR 10,500 thousand).
37
9.
The changes in 2014 and 2013 in the property, plant and equipment accounts and in the related accumulated
depreciation were as follows:
Balance as at
01/01/14
Translation
differences
Land and buildings
177.111
Cost
223.722
(3.161)
Accumulated depreciation
(45.287)
1.028
Impairment
(1.324)
Plant and machinery
374.150
Cost
685.833
(20.329)
(310.971)
8.691
Impairment
(712)
Other fixtures, tools and furniture
51.869
Cost
110.210
(1.851)
(58.341)
326
Other items of property, plant and equipment
1.287
Cost
23.213
(402)
(21.926)
245
Property, plant and equipment in the course
of construction
18.021
Cost
18.021
(1.246)
Total
622.438
Cost
1.060.999
(26.989)
(436.525)
10.290
Impairment
(2.036)
-
38
Additions
or charge
for the year
Increase
(Decrease) due
to transfer
from another Disposals or
account
reductions
4.019
(3.636)
-
(6.792)
2.682
-
(6)
-
6.453
(33.912)
(1.602)
21.660
(2.748)
-
(4.077)
4.504
161
2.134
(4.906)
2.764
190
(1.489)
827
714
(1.630)
(474)
462
(732)
525
12.518
(17.730)
(330)
25.838
(44.084)
(1.602)
(572)
586
-
(6.634)
5.856
161
Balance as
at 31/12/14
171.245
217.782
(45.213)
(1.324)
352.951
689.540
(334.436)
(2.153)
49.864
111.768
(61.904)
(5)
22.319
(22.324)
11.233
11.233
585.288
1.052.642
(463.877)
(3.477)
Balance as at
01/01/13
Land and buildings
178.322
Cost
224.875
(45.702)
Impairment
(851)
Plant and machinery
451.022
Cost
763.849
(312.707)
Impairment
(120)
Other fixtures, tools and furniture
58.766
Cost
115.021
(56.255)
Other items of property, plant and equipment
2.168
Cost
27.531
(25.363)
Property, plant and equipment in the course of construction 13.358
Cost
13.358
Total
703.636
Cost
1.144.634
(440.027)
Impairment
(970)
Translation
differences
Increase
(Decrease) due
Additions or
to transfer
charge for the from another Disposals or
year
account
reductions
(16.946)
4.453
16.190
(5.285)
(473)
(263)
1.148
-
(134)
99
-
(85.853)
37.213
-
5.949
(36.931)
(592)
3.435
(1.669)
-
(1.547)
3.123
-
(6.050)
978
1.969
(5.294)
1.593
192
(2.323)
2.038
(1.490)
938
3.419
(2.434)
188
98
(6.435)
4.835
(3.360)
11.641
(3.224)
(394)
(113.699)
43.582
-
39.168
(49.944)
(1.065)
1.729
(231)
-
(10.833)
10.095
-
Balance as
at 31/12/13
177.111
223.722
(45.287)
(1.324)
374.150
685.833
(310.971)
(712)
51.869
110.210
(58.341)
1.287
23.213
(21.926)
18.021
18.021
622.438
1.060.999
(436.525)
(2.036)
At 2014 year-end, "Land and Buildings" included EUR 50,432 thousand relating to land (2013 year-end: EUR
50,251 thousand).
"Additions" to property, plant and equipment in 2014 includes most notably the expansion of the lime plant,
roofing at the pre-homogenisation hall and completion of the transfer of the crusher at the plant in Olavarria,
Argentina and a new palletising and delivery line at the plant in Kairouan, Tunisia.
"Additions" to property, plant and equipment in 2013 related to the acquisition of a group of industrial assets
located in Sant Feliu de Llobregat and the investments made for the improvement and maintenance of the
production facilities.
There were no consolidated capitalised borrowing costs in 2014 (2013: EUR 0.3 million).
Capitalised borrowing costs are calculated on the basis of the actual cost of the loans used to finance
investments in progress, the scheduled construction period of which exceeds one year. The average interest rate
in 2013 for the loans used to finance investments in progress was 6.84%.
Fully depreciated items of property, plant and equipment in 2014 amounted to EUR 173,010 thousand (2013:
EUR 165,105 thousand).
In 2014 certain assets amounting to EUR 1,602 thousand relating to the cement activity were written down since
they were no longer in use.
The detail, by subgroup, of the translation differences included in property, plant and equipment for 2014 and
2013 is as follows:
39
2014
Cementos Avellaneda, S.A. (Argentina)
Precon Linyi (China)
Sotacib (Tunisia)
Total
2013
(17.449)
325
425
(16.699)
(46.301)
(47)
(23.769)
(70.117)
The Group takes out insurance policies to cover the possible risks to which its property, plant and equipment are
subject. At the end of 2014 and 2013 the inventories were fully insured against these risks.
10.
Investments accounted for using the equity method
The gross changes in 2014 and 2013 in “Investments Accounted for Using the Equity Method" in the
consolidated balance sheet were as follows:
2014
Beginning
balance
Escofet Group (Spain and Mexico)
Promsa Group (Spain)
Portcemen (Spain)
Vescem (Spain)
Moctezuma Group (Mexico)
Cementos Artigas Group (Uruguay)
Surma Group (Bangladesh)
Yacuces Group (Bolivia)
Total
3.553
3.511
1.037
58
151.137
64.508
29.226
253.030
Profit (Loss)
for the year
177
(101)
116
(12)
38.303
8.765
7.932
392
55.572
Dividends
Translation
differences
(33.319)
(11.647)
(1.349)
(46.315)
Acquisitions
1.082
607
4.532
1.217
7.438
Impairment
15.380
15.380
Disposals
(490)
(490)
(733)
(733)
2013
(145)
(19)
(164)
Ending
balance
3.730
2.187
1.153
46
157.203
62.233
40.196
16.970
283.718
Beginning
balance
Escofet (Spain)
Promsa Group (Spain)
Portcemen (Spain)
Vescem (Spain)
Moctezuma Group (Mexico)
Cementos Artigas Group (Uruguay)
Total
Other changes
3.614
4.917
1.140
58
165.061
73.651
22.418
270.859
Profit (Loss)
for the year
Dividends
(61)
156
(103)
28.758
11.570
7.752
48.072
Translation
differences
(250)
(35.119)
(13.069)
(48.438)
(7.107)
(7.644)
(970)
(15.721)
Disposals
(1.312)
(1.312)
Other changes
(456)
26
(430)
Ending
balance
3.553
3.511
1.037
58
151.137
64.508
29.226
253.030
The only companies accounted for using the equity method that are officially listed are Lafarge Surma Cement
Ltd. and Corporación Moctezuma S.A.B. de C.V.
The effective percentage ownership of the companies accounted for using the equity method described above is
included in Appendix II.
The main aggregates of these associates of the Group are as follows:
40
31/12/14
Moctezuma
Group
(Mexico)
Cementos
Artigas Group Surma Group
(Uruguay)
(Bangladesh)
Yacuces
Group
(Bolivia)
Other
companies
Non-current assets
Current assets
Non-current financial liabilities
Current liabilities
Current financial liabilities
366.766
230.836
99.194
(65.451)
(332)
(58.542)
(452)
61.119
43.664
10.300
(6.597)
(19.270)
(128)
142.991
68.455
19.592
(20.660)
(1.405)
(54.368)
(16.714)
45.657
21.550
18.770
(29.189)
-
13.999
13.655
3.251
(3.897)
(2.146)
(6.385)
(772)
Revenue
Finance income
Finance costs
Income tax
Profit for the year
529.029
(28.600)
3.099
(1.350)
(45.576)
114.929
88.230
(5.757)
2.859
(226)
(2.854)
17.916
112.962
(6.050)
588
(2.755)
(7.275)
27.097
6.913
(63)
272
(12)
(78)
1.096
21.757
(865)
136
(116)
23
347
31/12/13
Moctezuma
Group
(Mexico)
Cementos
Artigas Group Surma Group
(Uruguay)
(Bangladesh)
Other
companies
Non-current assets
Current assets
Non-current financial liabilities
Current liabilities
Current financial liabilities
372.921
197.624
48.832
(70.537)
(642)
(44.540)
(587)
56.069
55.153
22.368
(7.333)
(18.661)
(76)
128.241
49.241
11.262
(15.533)
(4.635)
(62.265)
(29.573)
11.922
16.519
6.899
(3.666)
(1.806)
(6.625)
(371)
Revenue
Finance income
Finance costs
Income tax
Profit (Loss) for the year
468.727
(29.134)
4.281
(3.451)
(39.655)
85.904
104.299
(6.580)
2.949
(453)
(3.004)
24.507
109.136
(5.973)
21
(7.217)
(6.451)
24.456
22.040
(846)
127
(308)
53
(18)
The foregoing aggregates relate to the separate financial statements of the individual companies and do not
include the consolidation adjustments, except for those relating to the acquisition of control of the Cementos
Artigas group, which took place in 2010.
11.
Investment property
The net balances of investment property at 31 December 2014 and 2013 were as follows:
41
Balance at
31/12/14
Land
Buildings
Total
Balance at
31/12/13
3.460
1.630
5.090
2.177
95
2.272
“Investment Property” in the consolidated balance sheet includes the value of land, buildings and other structures
held either to earn rentals or for capital appreciation.
These assets are measured as indicated in the note on “Property, Plant and Equipment”.
No disposals of these properties are planned for the short term.
12.
Non-current financial assets, current financial assets and cash and cash equivalents
The changes in 2014 and 2013 in "Non-Current Financial Assets" and "Current Financial Assets" on the asset
side of the accompanying consolidated balance sheet and in the related impairment losses were as follows:
a)
Non-current financial assets
2014
Other entities:
Cost
Impairment losses
Fixed-income securities
Other non-current financial assets
Total
Beginning
balance
Translation
differences
201
652
(451)
5
14.532
14.738
(19)
(19)
Increases
5
(14)
6.636
6.627
Ending
balance
Decreases
(11)
(13.419)
(13.430)
181
646
(465)
5
7.730
7.916
2013
Other entities:
Cost
Impairment losses
Fixed-income securities
Other non-current financial assets
Total
Beginning
balance
Translation
differences
438
889
(451)
5
2.743
3.186
(28)
(34)
(62)
Increases
30
1.408
28.313
29.751
Decreases
(239)
(1.408)
(16.490)
(18.137)
Ending
balance
201
652
(451)
5
14.532
14.738
The ending balance includes mainly one term deposit at a bank, which matures in 2016 and contains a
clause that permits early repayment.
b)
42
Current financial assets comprise mainly four term deposits made by the Spanish subsidiaries at three
banks, which mature in July 2015 and contain a clause that permits quarterly repayment.
c)
At 31 December 2014, the balance of cash was EUR 28,296 thousand, while that of cash equivalents
amounted to EUR 82,926 thousand. The latter relates mainly to deposits maturing within three months.
45.29% of the cash and cash equivalents relate to the Spanish companies, 41.45% to the subsidiary in
Argentina and the remainder to the companies in Tunisia and China. Of the total, 40.96% is in Argentine
pesos, 32.51% in euros, 13.40% in US dollars and, lastly, 13.12% in Tunisian dinars.
At 31 December 2013, the balance of cash was EUR 37,810 thousand, while that of cash equivalents
amounted to EUR 72,885 thousand. The latter related to deposits maturing within three months. 50.46% of
the cash and cash equivalents related to the Spanish companies, 27.30% to the subsidiary in Argentina and
the remainder to the companies in China and Tunisia. Of the total, 28.34% was in euros, 27.30% in
Argentine pesos, 22.18% in Tunisian dinars and 22.12% in US dollars.
13.
Non-current assets classified as held for sale
At 31 December 2013, "Non-Current Assets Classified as Held for Sale" included various premises of the
subsidiary Prefabricaciones y Contratas, S.A.U. amounting to EUR 2,915 thousand. In 2014 one of the premises
was sold for EUR 102 thousand, which gave rise to a loss of EUR 7 thousand.
This Group company still intends to sell these premises, although, given the situation of the real estate market, it
is considered unlikely that they will be sold at short term. Therefore, these assets were reclassified to "Investment
Property" in the accompanying consolidated balance sheet.
14.
Inventories
The detail of inventories at 31 December 2014 and 2013 is as follows:
2014
Raw materials and other supplies
Fuel
Spare parts
Finished goods and work in progress
Other
Total
26.146
9.102
19.013
26.031
2.766
83.058
2013
23.740
6.384
19.578
30.088
2.677
82.467
There are no material amounts of inventories whose acquisition cost was lower than their net realisable value, or
inventory sale and purchase commitments of a significant amount.
The Group takes out insurance policies to cover the possible risks to which its inventories are subject. At the end
of 2014 and 2013 the inventories were fully insured against these risks.
15.
Trade and other receivables
The detail of “Trade and Other Receivables” under current assets in the accompanying consolidated balance
sheet as at 31 December 2014 and 2013 is as follows:
43
2014
Trade receivables for sales and services
Current tax assets
Receivable from companies accounted for using the equity method
Other receivables
Allowance for doubtful debts
Total
114.769
10.616
4.821
(17.669)
112.537
2013
111.651
20.788
5.277
(19.466)
118.250
The changes in “Allowance for Doubtful Debts” were as follows:
2014
Balance at 1 January
Charge for the year and additions
Reductions
Translation differences
Balance at 31 December
16.
(19.466)
(892)
2.592
97
(17.669)
2013
(17.023)
(3.536)
1.133
(40)
(19.466)
Equity of the Parent
a)
Share capital
At 31 December 2014, the share capital of Cementos Molins, S.A. consisted of 66,115,670 fully subscribed
and paid bearer shares of EUR 0.30 par value each.
At 31 December 2014, the shareholders of the Parent owning 10% or more of the share capital were as
follows: Noumea, S.A. (32.086%), Cartera de Inversiones C.M., S.A. (24.015%), Inversora Pedralbes, S.A.
(16.880%) and Otinix, S.A. (15.999%).
All of Cementos Molins, S.A.'s shares are listed on the Barcelona Stock Exchange.
b)
Legal reserve
Under the Spanish Limited Liability Companies Law, 10% of net profit for each year must be transferred to the
legal reserve until the balance of this reserve reaches at least 20% of the share capital. The legal reserve,
amounting to EUR 3,967 thousand, can be used to increase capital provided that the remaining reserve
balance does not fall below 10% of the increased share capital amount. Otherwise, until the legal reserve
exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are
not available for this purpose.
c)
Share premium
The balance of the “Share Premium” account of the Parent arose as a result of the capital increases carried
out at Cementos Molins, S.A. between 31 July 1950 and 30 December 1968.
The Spanish Limited Liability Companies Law expressly permits the use of the “Share Premium” account
balance to increase capital and does not establish any specific restrictions as to its use.
44
d)
Restrictions on the distribution of dividends
At 31 December 2014, there were no restrictions on the distribution of dividends by the Parent.
e)
Treasury shares of the Parent
At the beginning of 2014 the subsidiary Cementos Molins Industrial, S.A.U. held 2,448,502 shares of the
Parent, which accounted for 3.7% of the share capital. In 2014 215,683 additional shares were purchased for
EUR 1.61 million and 1,793 shares were sold for EUR 13 thousand. At 31 December 2014, Cementos Molins
Industrial, S.A.U. held a total of 2,662,392 of the Parent’s shares representing 4% of the share capital, for a
total cost of EUR 29.6 million.
In 2013 465,784 shares were purchased for EUR 3.5 million.
All of the impacts on the Group arising from the sales of treasury shares were recognised directly in equity
pursuant to IAS 32.
At the Annual General Meeting of 26 May 2010, a resolution was adopted whereby the Board of Directors of
Cementos Molins, S.A. and its subsidiaries were authorised and empowered for a five-year period to acquire,
by any legally admissible means, shares in Cementos Molins, S.A. within the limits and with the requirements
listed below:
f)
-
The par value of all the shares acquired does not exceed at any time 10% of the share capital.
-
The total of the shares acquired does not take equity to below the amount of the share capital plus the
reserves restricted by law or the bylaws.
-
The shares acquired are paid in full.
-
The shares are acquired at a minimum price of their par value and a maximum price of their market price
on the Stock Exchange at the time of acquisition.
Consolidated reserves
The detail at 31 December 2014 and 2013, by company, of “Consolidated Reserves” in the consolidated
balance sheet, after taking into account the effect of consolidation adjustments, is as follows:
2014
Cementos Molins Industrial, S.A.
Escofet Group
Promotora Mediterránea-2, S.A.
Prefabricaciones y Contratas, S.A.
Propamsa, S.A.
Portcemen, S.A.
Holding companies
Cementos Avellaneda, S.A. Group (Argentina)
Cementos Artigas, S.A. (Uruguay)
Corporación Moctezuma Group (Mexico)
Sotacib Group (Tunisia)
Subtotal
Treasury shares
Total
45
52.112
1.670
50.656
5.646
(1.002)
13.607
312.986
101.046
7.955
32.472
(7.325)
(8.895)
560.928
(29.598)
531.330
2013
58.562
1.730
65.694
15.632
(485)
14.232
296.945
91.970
9.454
38.800
(14.969)
(5.095)
572.470
(27.999)
544.471
g)
The detail of translation differences at 31 December 2014 and 2013 is as follows:
2014
Total
h)
2013
(59.836)
(7.038)
(29.848)
34
258
(24.790)
1.219
(120.001)
(49.931)
(7.645)
(30.930)
(4.292)
(83)
(24.942)
(117.823)
Contribution to consolidated profit
The individual contributions to consolidated profit at 31 December 2014 and 2013, after consolidation
adjustments and the calculation of non-controlling interests, are as follows:
2014
Cementos Molins, S.A.
Holding companies and other
Promotora Mediterránea-2, S.A. Group
Propamsa, S.A.
Portcemen, S.A.
Escofet Group
Total net profit of the Group
2013
(8.027)
(5.923)
(7.909)
(4.783)
361
116
176
(1.547)
(677)
12.219
8.765
38.330
303
8.133
(8.726)
30.811
(7.739)
(6.141)
(7.020)
(15.037)
(625)
(103)
(61)
(9.986)
(517)
13.024
11.570
28.792
7.787
(3.835)
10.109
The profits attributable to non-controlling interests amounted to EUR 6,862 thousand in 2014 (2013: EUR
10,005 thousand).
i)
Capital risk management
The Group maintains degrees of leverage in line with its growth, solvency and profitability objectives. In this
regard, one of the most significant ratios used in managing capital risk is financial leverage.
The data relating to the financial leverage ratio at 2014 and 2013 year-end are as follows:
46
2014
Financial liabilities
Long-term deposits
Net financial debt
Total equity
Net debt/equity
17.
405.827
(5.000)
(22.407)
(111.222)
267.198
715.335
37,35%
2013
493.846
(12.042)
(50.802)
(110.695)
320.307
699.690
45,78%
Equity of non-controlling interests
The balance of “Equity of Non-Controlling Interests” in the consolidated balance sheet reflects the underlying
carrying amount of the non-controlling shareholders' investment in the consolidated companies. In addition, the
balances shown in the consolidated statement of profit or loss represent the share of the non-controlling
shareholders in the profit for the year.
The detail of “Equity of Non-Controlling Interests” in the consolidated balance sheet at the end of 2014 and 2013
is as follows:
2014
Promotora Mediterránea-2, S.A. Group (Spain)
Sotacib (Tunisia)
Total
1.357
74.507
36.621
571
113.056
2013
1.766
71.980
40.263
655
114.664
The changes in “Equity of Non-Controlling Interests” in 2014 and 2013 are summarised as follows:
2014
2013
Beginning balance
114.664
138.062
Profit for the year
Capital increases
Dividends paid to non-controlling interests
Transfers and other
Ending balance
6.862
(8.924)
(14)
468
113.056
10.005
(4.967)
(28.922)
(193)
679
114.664
47
18.
Dividends and distribution of profit
In 2014 the Parent paid the following dividends:
•
On 9 January 2014, an interim dividend of EUR 0.06 gross per share was paid out of 2013 profit. The
amount paid totalled EUR 3,967 thousand.
•
On 11 June 2014, a final dividend of EUR 0.01 gross per share was paid out of 2013 profit, giving rise to
a total payment of EUR 661 thousand.
•
Also on 11 June 2014, an interim dividend of EUR 0.07 gross per share was paid out of 2014 profit. The
total payment made in this case amounted to EUR 4,628 thousand.
•
In November the Company resolved to pay an additional interim dividend of EUR 0.08 gross per share
on 10 December 2014. The amount paid totalled EUR 5,289 thousand.
A final dividend for 2014 of EUR 0.01 per share will be submitted for approval by the shareholders at the Annual
General Meeting.
The resolutions of the shareholders at the Annual General Meeting were adopted on 30 May 2014 whilst those of
the Parent’s Board of Directors were adopted on 28 November 2014.
The provisional liquidity statements prepared in accordance with legal requirements, evidencing the existence of
sufficient earnings and liquidity for the distribution of the interim dividends, are as follows:
Unused
balance
Net profit
30-04-2014
31-10-2014
7.605
18.544
20.374
19.936
The distribution of the Parent's profit for 2014 proposed by its directors is as follows:
Thousands of euros
19.
2014
Distributable profit (individual):
Profit for the year
17.089
Distribution:
Dividends
To voluntary reserves
10.579
6.510
Provisions
The changes, by item, in "Provisions" in 2014 and 2013 were as follows:
48
Balance as at
01/01/14
Greenhouse gas emission allowances
Reversion reserve for quarry restoration and environmental measures
Employee benefit obligations
Other
Total
5.045
4.290
475
144
9.954
Charge for
the year and
additions
5.427
457
504
869
7.257
Reductions
(5.045)
(241)
(526)
(5.812)
Translation
differences
Balance as at
31/12/14
(205)
21
(184)
5.427
4.301
473
1.013
11.214
Balance as at
01/01/13
Greenhouse gas emission allowances
Reversion reserve for quarry restoration and environmental measures
Penalty imposed by the Argentine National Antitrust Commission
Employee benefit obligations
Other
Total
20.
8.097
4.105
5.332
476
144
18.154
Charge for
the year
and additions
5.045
630
5.675
Reductions
(8.097)
(39)
(5.332)
(1)
(13.469)
Translation
differences
Balance as at
31/12/13
(406)
(406)
5.045
4.290
0
475
144
9.954
Pension plans
In 1990 Cementos Molins, S.A. set up two pension plans pursuant to Law 8/1987 and Royal Decree 1307/1988,
one for current employees and another for retired employees.
The plan for current employees is a defined contribution plan for the combined workforces of Cementos Molins,
S.A., Cementos Molins Industrial, S.A.U., Cemolins Servicios Compartidos, S.L.U. and Cemolins Internacional,
S.L.U., to which EUR 118 thousand, EUR 284 thousand, EUR 41 thousand and EUR 51 thousand, respectively,
were contributed in 2014. These contributions were recognised under “Staff Costs” in the accompanying
consolidated statement of profit or loss. In 2013 the amounts contributed were EUR 162 thousand at Cementos
Molins, S.A., EUR 299 thousand at Cementos Molins Industrial, S.A.U. and EUR 53 thousand at Cemolins
Internacional, S.L.U.
The pension plan for retired employees is a defined benefit plan and is limited to the group of pensioners who
retired before the obligation in the collective agreement became a defined contribution pension plan. The Parent
has an obligation to make the annual contributions needed to secure the benefits with a certain solvency margin.
In 2014 no contributions needed to be made, whereas in 2013, on the basis of actuarial calculations made, it
contributed EUR 6 thousand to cover the benefits; at 31 December 2014, no commitment had been made to an
additional contribution if there are no further changes to the expectations of the plan.
The Parent participates in the management of the plan through its participation in the Control Committee.
There are no specific risks associated with the plan beyond the negative performance of the investments, which
is mitigated mainly by the pension plan's solvency margin.
The actuarial financial assumptions used in 2014 to quantify the actuarial liability and the mathematical provisions
in accordance with the applicable legislation on pension plans and funds were as follows:
•
Discount rate: 3.95%
•
Annual pension increase rate: 2%
•
Mortality tables: PERM/F-2000C.
The total number of participants and beneficiaries in the defined contribution and defined benefit plans in 2014
was 357 (2013: 359). The assets funding the obligations amounted to EUR 10,031 thousand in 2014 (2013: EUR
49
10,345 thousand). At 31 December 2014, 81% of the assets comprised fixed-income investments, 16%
comprised variable-income investments and the remaining 3% comprised investments in monetary assets. At 31
December 2013, 80% of the assets comprised fixed-income investments, 16% comprised variable-income
investments and 4% comprised investments in monetary assets.
In 2006 the Spanish companies set up an employee benefit system aimed at improving the employee benefits of
the Group companies' executives. The contributions are determined on an annual basis and, therefore, at any
time and as established in the related regulations, the directors may unilaterally suspend or cancel the
contributions. The contributions made in 2014 amounted to EUR 273 thousand (2013: EUR 325 thousand).
Cementos Avellaneda set up individual defined contribution plans for executive personnel, the effect of which on
the consolidated statement of profit or loss was EUR 96 thousand (2013: 115 thousand).
The changes in the present value of the defined benefit plan obligations of Cementos Molins in 2014 and 2013
were as follows:
2014
2013
Present value of benefit obligations at 1 January
Service cost
Past service cost
Interest cost relating to provisions
Payment of plan benefits
Changes due to exchange rate
Actuarial gains
Actuarial losses
Cancellation of the plan
777
30
(75)
(24)
-
869
33
(79)
(46)
-
Present value of benefit obligations at 31 December
708
777
The changes in the fair value of the plan assets in 2014 and 2013 were as follows:
2013
2013
Fair value of plan assets at 1 January
Expected return
Payments due to obligations
Rebates
Employer contributions
Changes due to exchange rate
Return on plan assets
813
31
(74)
18
826
31
(79)
6
29
Fair value of plan assets at 31 December
788
813
The estimated weighted average term of the obligations of Cementos Molins' defined benefit plan is expected to
be less than 20 years.
The contributions to the pension plans in 2015 are expected to be similar to those made in 2014.
50
21.
Bank borrowings
The information relating to current and non-current non-trade payables is as follows:
a)
Non-current
The detail of the balance of non-current borrowings at the end of 2014 and 2013 and of the related maturities
each year is as follows:
Bank borrowings
Spanish companies
Sotacib (Tunisia)
Total
Balance as Balance as
at 31/12/13 at 31/12/14
216.658
154.254
370.912
214.435
137.190
351.625
2016
83.442
14.385
97.827
2017
79.067
15.829
94.896
2018
Subsequent
years
2019
27.256
16.765
44.021
8.259
16.850
25.109
16.411
73.361
89.772
The detail of these non-current borrowings at 31 December 2013 is as follows:
Bank borrowings
Spanish companies
Sotacib (Tunisia)
Total
Balance as
at 31/12/13
216.658
154.254
370.912
2016
2015
56.329
18.088
74.417
58.850
20.259
79.109
2017
49.722
20.724
70.446
2018
27.381
20.920
48.301
Subsequent
years
24.376
74.263
98.639
Spanish companies
On 19 December 2007, the Group entered into a long-term loan agreement for EUR 70 million to finance a
portion of the acquisition of Sotacib (Tunisia). On 30 June 2008, an agreement was reached to increase the
loan by EUR 50 million, bringing the new amount of the loan to EUR 120 million. The term of this loan runs
from the date of the agreement to 30 June 2014, and will foreseeably be repaid in eight instalments of EUR
15 million each, with a grace period of 30 months. The aforementioned loan includes interest tied to Euribor
plus a market spread.
On 15 April 2011, the aforementioned loan was renewed, a new maturity date of 30 June 2016 was
established and the principal repayment schedule was changed.
On 30 November 2012, this loan was amended and a new maturity date of 30 June 2018 was established.
The principal repayment schedule was changed with three repayments of EUR 5 million, four repayments of
EUR 6.25 million, one repayment of EUR 7.5 million, two repayments of EUR 10 million and one repayment
of EUR 12.5 million to be repaid on a six-monthly basis. At 31 December 2014, the outstanding balance of
this loan amounted to EUR 58.75 million.
In relation to this loan, as mentioned in Note 5, in the first half of 2009 the Group entered into two floating-tofixed interest rate swaps amounting to EUR 60 million to partially hedge exposure to interest rate risk. These
51
hedges, which have the same repayment terms as the related loan, were renewed in order to bring them into
line with the new repayment schedule.
The negative fair value of the derivative hedging instruments is presented as non-current bank borrowings
and is reported by the banks with which the loans were arranged. At 31 December 2014, the negative fair
value amounted to EUR 1,497 thousand (31 December 2013: EUR 1,622 thousand).
These hedges are classified as cash flow hedges with changes in fair value recognised in equity. The transfer
of fair value to income is performed on a time proportion basis to the extent that the hedged item, the bank
borrowings, has an impact on the Group's consolidated profit.
The consideration of the credit risk in the valuation of the hedging instruments held by the Group at 31
December 2014 and 2013 would not have a material effect on the fair value thereof.
In 2009 three additional loan agreements were entered into in order to finance the new clinker production line
at Cementos Molins Industrial, S.A.U. In April and June 2009 two of these loan agreements were entered into
for EUR 15 million and EUR 10 million, respectively, maturing in December 2017 and 2014. In 2014 EUR 5.5
million were repaid.
Also, on 11 May 2009 the Group arranged a loan from the European Investment Bank (EIB) for EUR 60
million, which had been drawn down in full at 31 December 2009. The loan has a grace period of four years
and runs from the date of the agreement to December 2021. At 31 December 2014, the outstanding balance
of this loan amounted to EUR 52.5 million.
In connection with this loan from the EIB, the Group entered into financial counter-guarantee agreements with
two banks acting as guarantors of the transaction.
These guarantees and the financing facility agreement mentioned above are subject to the Group’s fulfilment
of certain reporting obligations and financial ratios which, at 31 December 2014, were all being met.
The loan from the EIB, which matures between 2014 and 2021, bears interest at a fixed rate of between
2.91% and 3.51%, respectively, plus a market spread.
In January 2010 a loan of EUR 25 million was arranged with a bank in order to finance the purchase of
11.61% of Cementos Avellaneda, S.A. (Argentina) and Cementos Artigas, S.A. (Uruguay), and in July 2010 a
loan of EUR 20 million was arranged with a bank in order to finance the payment of the last tranche of the
capital increase of Sotacib Kairouan, S.A. In January 2013 the two aforementioned loans were renegotiated
and a single loan of EUR 40 million was arranged, which matures in January 2017. At 31 December 2014, the
outstanding balance of this loan amounted to EUR 33 million.
EUR 69.2 million drawn down against credit facilities arranged with various banks maturing in 2016 and 2017
are also included.
On 30 July 2013, a loan was arranged with a bank amounting to EUR 25 million to be repaid over five years
in order to finance a portion of the acquisition of a group of industrial assets from Cemex España Operacions,
S.L. located in Sant Feliu de Llobregat. The loan was drawn down on 15 November 2013. In 2014 EUR 5
million were repaid.
In 2014 the average interest rate on the borrowings of the Spanish companies was 3.25%.
Financing agreement entered into by a pool of local banks in order to finance the expansion of Sotacib's
facilities in Feriana. This loan was granted in the local currency (Tunisian dinar), without recourse to the
company’s shareholders, and bears interest tied to the local TMM indicator plus a spread of 2.25%. This loan
was secured with the group of assets that formed part of the construction project for the second white cement
production line. The equivalent euro value of the total loan amount at 2014 year-end was EUR 53 million,
which had been drawn down in full. The loan was arranged in 2008 and subsequently amended in 2009 and
consists of various tranches of financing. The principal amount has a three-year grace period and will be
repaid in seven annual instalments. In 2011 negotiations began with all the banks in the pool to obtain an
52
additional grace period for both the interest and the principal. As a result of these negotiations an additional
grace period was obtained and the interest borne over this period was capitalised. At 2014 year-end EUR
35.7 million of the amount drawn down were included under "Non-Current Bank Borrowings”.
A financing agreement was also entered into with a pool of local banks in order to finance the construction of
a grey cement plant in Kairouan. This loan was also granted in the local currency (Tunisian dinar), without
recourse to the company’s shareholders, and bears interest tied to the local TMM indicator plus a spread of
2.25%. This loan was secured with the group of assets that formed part of the plant construction project. The
equivalent euro value of the total loan amount at 2014 year-end was EUR 125.9 million, against which EUR
123.4 million had been drawn down. The remainder will foreseeably be drawn down in 2015. The loan was
arranged at the beginning of 2009. The principal amount has a three-year grace period and will be repaid in
nine annual instalments. At 2014 year-end EUR 100.3 million of the amount drawn down were included under
"Non-Current Bank Borrowings”.
b)
Current
The detail, by groups of companies, of the various account balances at 31 December 2014 and 2013 is as
follows:
Spanish
companies
2014 borrowings
2013 borrowings
Cementos
Avellaneda, S.A.
38.937
104.228
1.024
2.077
Sotacib
(Tunisia)
14.241
16.629
Total
54.201
122.934
The main amounts relate to the current borrowings of the Spanish companies and the Sotacib group
companies.
Spanish companies
The amount indicated in the table relates to the portion payable at short-term of the non-current borrowings
detailed in Note 21-a) and the balances drawn down against credit facilities.
At the date of preparation of these consolidated financial statements, all the obligations acquired with banks
arising from this financing agreement were being met without exception.
The main amount of the current borrowings in Tunisia relates to the portion payable at short-term of the noncurrent borrowings detailed in Note 21-a) and the amounts drawn down against the non-current loan to fund
Kairouan, due to the functioning of the system used to draw down loans in Tunisia.
22.
Disclosures on the payment periods to suppliers. Additional Provision Three. “Disclosure obligation”
provided for in Law 15/2010, of 5 July.
The disclosures relating to the payment periods to suppliers of the Spanish companies included in the scope of
consolidation ("the Companies") for 2014 and 2013 were as follows:
53
Amounts paid and payable at year-end
2014
2013
Amount
%
Amount
31.193
24%
58.259
97.788
76%
60.682
128.981
100%
118.941
Within the maximum payment period
Remainder
Total payments made in the year
Weighted average period of late payment (in days)
65
Payments at year-end not made in the maximum payment period
22.899
%
51%
49%
100%
51
57%
17.459
49%
In both years this balance relates to suppliers that because of their nature are trade creditors for the supply of
goods and services and, therefore, it includes the figures relating to “Trade Payables” under "Current Liabilities"
in the consolidated balance sheet.
However, the Group has reverse factoring agreements with most of its suppliers. This financial tool allows
suppliers to obtain cash without using their own resources, since the credit facilities are provided by the
Cementos Molins Group. The terms and conditions of this financing are more favourable than those generally
offered by the market. In accordance with the Group's management information, these balances are discounted
by its suppliers in a shorter period than that established by the aforementioned Law.
Law 11/2013, on measures to support entrepreneurs, stimulate growth and create employment, amending Law
3/2004, of 29 December, on combating late payment in commercial transactions, entered into force on 26 July
2013. These amendments established that the maximum period for payments to suppliers would be 30 days from
29 July 2013 onwards, unless there is a contract between the parties increasing this period to a maximum of 60
days. Until 31 July 2013 the period applicable to companies was 60 days.
23.
Tax matters
In view of the Cementos Molins Group's presence in various tax jurisdictions, the Group companies file income
tax returns in accordance with the tax regulations applicable in each country.
a) In Spain
Most of the companies that are resident in Spain file consolidated income tax returns. Under this regime, the
companies in the tax group calculate the Group's taxable profit or loss and tax charge on an aggregate basis and
share it out among themselves, as established by the Spanish Accounting and Audit Institute.
Cementos Molins, S.A. has been the parent of consolidated tax group 70/97 since 1997. The companies
composing this group are all of those in which the Company has a direct or indirect ownership interest of more
than 75%. The companies composing the aforementioned tax group in 2014 were as follows:
Parent:
Subsidiaries:
Cementos Molins Industrial, S.A.U.
Cemolins Internacional, S.L.U.
Prefabricaciones y Contratas, S.A.U.
Promotora Mediterránea.2, S.A.
Propamsa, S.A.U.
Monsó-Boneta, S.L.
54
Cemolins Servicios Compartidos, S.L.
The other companies resident in Spain that do not form part of the tax group file individual tax returns.
The Spanish companies that file consolidated tax returns apply the standard tax rate of 30%. The companies that
do not form part of the tax group are taxed at the standard tax rate of 30%, or 25% if they are considered to be
small companies for tax purposes due to their revenue.
b) In other countries.
The fully consolidated foreign subsidiaries and the foreign subsidiaries accounted for using the equity method
calculate the income tax expense and the tax charges for the various taxes applicable to them in conformity with
the legislation of, and at the tax rates in force in, their respective countries.
The income tax rate is not the same in all countries. It varies according to the nationality of the foreign
subsidiaries and to the circumstances in each particular case for tax purposes.
The detail of the various tax rates is as follows:
Country
Argentina
Uruguay
Mexico
Bangladesh
Tunisia
China
%
35.0
25.0
30.0
27.5
25.0
25.0
Years open for review by the tax authorities
At 2014 year-end Cementos Molins, S.A. had 2010 and subsequent years open for review by the tax authorities
for income tax and 2011 and subsequent years for all the other taxes applicable to it. Similarly, most of its
subsidiaries have the last four years open for review by the tax authorities for all the taxes applicable to them.
In the rest of the countries in which the Group has a significant presence, the years open for review by the tax
authorities are as follows:
In Argentina, the statue-of-limitations period for domestic taxes is six years. At Cementos Avellaneda the last fullscope tax audit was conducted for the 2008-2009 period, from which no adjustment arose. Accordingly, the
periods that were not statute-barred at 2014 year-end run from 2010 to 2013.
In Uruguay, the statute-of-limitations period is five years and may be extended to ten years in the event that
failure to submit tax returns or tax fraud is proven. The periods that are not statute-barred at Cementos Artigas
run from 2010 to 2013 since the company was audited for the Uruguayan tax on income from industry and
commerce (IRAE) and wealth tax for the years from 2007 to 2009, and no contingencies arose therefrom.
In Mexico 2007 to 2013 are open for review.
In January 2014 the Tunisian company SOTACIB was informed by the tax authorities of the commencement of
an audit of the applicable taxes for all the open periods. Specifically, the main taxes that were audited were
income tax for 2006-2012 and VAT for 2005-2012. This audit was completed in October and gave rise most
notably to an increase in the tax losses relating to 2012, thereby generating tax loss carryforwards amounting to
EUR 340 thousand which can be offset for an indefinite period of time.
In Bangladesh 2007 to 2013 are open for review.
The criteria that the tax authorities adopt could give rise to contingent liabilities for which no provision has been
recognised in the accompanying consolidated financial statements. However, Group management considers that
55
the effect of this difference in criteria would not be material with respect to the consolidated financial statements
as at 31 December 2014.
Reconciliation of the accounting profit to the taxable profit
The reconciliation of the consolidated accounting profit to the income tax expense recognised in the consolidated
statement of profit or loss for 2014 and 2013 is as follows, in thousands of euros:
2014
Accounting profit before tax
Result of companies accounted for using the equity method
Consolidation adjustments
Adjusted accounting profit before tax
Impact of the tax rate on the adjusted accounting profit
Impact of permanent differences at individual companies
Tax credits and tax relief
Other adjustments
Impact of offset of tax losses
2013
51.684
(55.572)
55
(3.834)
13.140
4
(51)
919
-
33.941
(48.072)
(1.040)
(15.171)
13.851
37
(58)
(3)
14.011
13.827
Total income tax expense recognised in profit or loss
"Other Adjustments" includes the impact of the staggered reduction in tax rates -from 30% to 25%- for Spanish
companies.
The reconciliation of consolidated accounting profit to the taxable profit for income tax purposes is as follows, in
thousands of euros:
2014
51.684
Adjusted consolidated accounting profit before tax
Eliminations
- Result of companies accounted for using the equity method
(55.572)
Increases
Permanent differences:
- At individual companies
- Consolidation adjustments
Temporary differences:
Arising in the year
Arising in prior years
Arising in the year
Offset of prior years' tax losses
Taxable profit
56
Decreases
784
116
47
61
737
55
19.751
1.231
1.237
3.455
18.514
(2.224)
3.873
737
-
(737)
3.873
16.329
2013
Accounting profit for the year before tax
Eliminations
- Result of companies accounted for using the equity method
33.941
(48.072)
Increases
Permanent differences:
Temporary differences:
Arising in the year
Arising in the year
Offset of prior years' tax losses
Taxable profit
Decreases
579
-
2
1.040
577
(1.040)
10.464
5.075
2.065
1.463
8.399
3.612
8.014
-
8.014
(8)
5.424
The temporary differences of the individual companies arise from the non-deductibility of 30% of the depreciation
and amortisation charge, the impairment of the financial assets of the companies resident in Spain and
recognition of inventory write-downs, allowances for doubtful debts and the adjustment of the depreciation and
amortisation charge at the Argentine subsidiary.
The temporary differences arising on consolidation comprise the reversal of the revaluation of the assets of the
Argentine company Cementos Avellaneda, a result of the obtainment of control in 2010.
Temporary differences
Temporary differences arise as a result of the difference between the tax bases of the assets and liabilities and
their carrying amounts. Deductible temporary differences, tax credits and tax relief and tax loss carryforwards
give rise to deferred tax assets in the consolidated financial statements, whereas taxable temporary differences
give rise to deferred tax liabilities in the consolidated financial statements. The changes in deferred tax assets
and liabilities arising from temporary differences recognised at 31 December 2014 and 2013 are shown in the
tables below:
2014
Provisions for pension plans
Goodwill
Tax loss carryforwards
Tax credit carryforwards
Sundry provisions and other
Total deferred tax assets
2013
1.223
5.313
27.914
2.808
1.187
38.445
2014
Revaluation of assets due to the
obtainment of control
Sundry provisions and other
Total deferred tax liabilities
1.161
7.045
27.791
2.835
1.588
40.420
2013
15.590
5.352
2.911
23.853
19.636
5.965
5.655
31.256
At 31 December 2014 and 2013, the balance of “Deferred Tax Assets" included mainly the tax credit
carryforwards, tax loss carryforwards of Group companies and the impairment of goodwill.
57
"Goodwill" includes the impairment of goodwill at the Tunisian investee SOTACIB.
"Tax Loss Carryforwards" increased due to the recognition by the Tunisian company SOTACIB of losses for 2014
and 2012, the latter arising as a result of the tax audit in the year.
"Deferred Tax Liabilities" at 31 December 2014 and 2013 related mainly to the Argentine company and consisted
of accelerated depreciation and amortisation of assets, and the tax effect of the obtainment of control over the
company.
It should be noted in this connection that the Spanish companies, based on the gradual reduction of the income
tax rate provided for in the new Income Tax Law that will come into force in 2015, calculated their deferred taxes
at 25% rather than 30%, since it was estimated that they will be reversed in 2016 and subsequent years. The net
impact thereof was an expense of EUR 2,041 thousand.
Tax loss carryforwards
The tax loss carryforwards in Spain at 31 December 2014 relating to the Spanish Group companies amounted to
EUR 155,640 thousand, EUR 154,604 thousand of which relate to the consolidated tax group. Pursuant to the tax
legislation applicable in Spain, tax losses must be offset within 18 years from the year in which they are incurred.
However, starting in 2015 the new Income Tax Law will come into force which, as regards the offset of tax loss
carryforwards, eliminates the last year for offset and changes the offsettable amount, specifically establishing that
tax losses can be offset with profits for the following tax periods up to a limit of 70% of the taxable profit.
The detail of the tax losses of the Spanish consolidated Group at 31 December 2014 is as follows:
Year earned
2010
2011
2012
2013
2014
TOTAL
Amount
earned
9.098
43.459
48.054
32.670
21.323
154.604
The consolidated financial statements as at 31 December 2014 include a deferred tax asset of EUR 27,914
thousand relating to tax loss carryforwards, of which EUR 22,301 thousand belong to the consolidated tax group
and EUR 5,613 thousand to the Tunisian companies.
At 31 December 2014 the Group had unrecognised tax loss carryforwards amounting to EUR 16,608 thousand.
The Parent of the tax group uses conservative criteria to recognise deferred tax assets for tax loss and tax credit
carryforwards based on the best estimate of its future earnings, of the last year for offsetting tax losses and of the
last year for using tax credits.
Tax credits
The Group recognised tax assets for the tax credits which, based on the best estimate of its future earnings, are
expected to be realised.
At 2014 year-end, the Group recognised tax credit carryforwards amounting to EUR 2,808 thousand in the
financial statements, which were earned by the Spanish consolidated tax group. These tax credits were
calculated pursuant to Chapters II and IV of Title VI of the Spanish Income Tax Law and relate mainly to the
elimination of double taxation, investments in assets used for the protection of the environment, research and
development and technological innovation expenditure and donations. The aforementioned tax credits must be
used within 15 years from the date on which they are earned, except for those earned as a result of expenditure
58
on research and development activities, which expire after 18 years, and as a result of double taxation, which
expire after ten years.
The detail of the tax credits earned by the consolidated tax group is as follows:
Last year for
Amount
deduction
Year earned
Tax credits earned in 2010
30
117
333
142
2017
2020
2025
2028
105
91
454
384
2018
2021
2026
2029
1
56
848
422
2019
2022
2027
2030
75
79
217
258
2020
2023
2028
2031
193
168
112
2024
2029
2032
Total
4.085
At 31 December 2014 the Group had unrecognised tax credit carryforwards amounting to EUR 1,277 thousand.
Tax receivables and payables
The balances of tax receivables and payables shown in the consolidated balance sheet as at 31 December 2014
and 2013 are as follows:
59
2014
2013
Tax receivables
Short-term:
VAT refundable
Other receivables
Total
6.754
3.862
10.616
15.775
5.013
20.788
(454)
(1.596)
(5.095)
(6.417)
(7.597)
(21.159)
(251)
(1.577)
(5.137)
(135)
(3.351)
(10.451)
Tax payables
Short-term:
VAT payable
Personal income tax withholdings payable
Accrued social security taxes payable
Income tax payable
Other payables
Total
24.
Guarantee commitments to third parties
At 31 December 2014, in addition to those disclosed in Note 21, the Group had received guarantees from banks
and insurance companies which were provided to third parties amounting to EUR 31,898 thousand (31
December 2013: EUR 32,021 thousand). These guarantees were provided to government agencies to guarantee
the restoration of natural areas affected by quarry operations, as required by current legislation, and to cover the
third-party liability of the various businesses.
25.
Operating income and expenses
a)
Sales
Following is a detail of revenue by company in 2014 and 2013. The amounts are shown following the
elimination of intra-Group transactions.
2014
Promotora Mediterránea-2, S.A. Group
Propamsa, S.A.
Sotacib Group
Total
b)
60.246
38.513
62.648
26.002
251.136
89.122
527.667
2013
57.891
35.404
47.385
23.551
284.620
90.451
539.302
Procurements
The detail of “Procurements” in the consolidated statement of profit or loss for 2014 and 2013 is as follows:
60
2014
Cost of goods held for resale used:
Purchases
Changes in inventories
Total
Cost of raw materials and other consumables
used:
Purchases
Work performed by other companies
Changes in inventories
Total
Total procurements
c)
2013
8.877
2.726
11.603
8.291
(5.205)
3.086
135.985
37.039
(10.372)
162.652
174.255
138.288
28.566
(226)
166.628
169.714
Employees
The average number of employees at the Group companies in 2014 and 2013 was as follows:
Women
Propamsa, S.A.
Other Spanish companies
Cementos Avellaneda, S.A. Group
Sotacib (Tunisia)
Total
14
15
26
29
46
16
2
44
35
227
Men
18
156
11
177
452
99
7
661
525
2.106
Total
2014
32
171
37
206
498
115
9
705
560
2.333
Total
2013
60
189
275
582
115
9
707
553
2.490
At the companies located in Spain, pursuant to the Spanish Law on the Social Integration of Disabled
Persons, the average number of disabled employees in 2014 was 14. In 2013 this number was 16.
In July 2013 the workers' representatives of Promotora Mediterránea-2, S.A. were notified of the
commencement of negotiations for the implementation of a collective redundancy procedure, which was
essential to guarantee the company's sustainability. The procedure was agreed upon and applied between
July and October, affecting 59 workers, who represented 21% of the workforce.
The final number of employees at the Group companies in 2014 and 2013 was as follows:
61
Women
Propamsa, S.A.
Other Spanish companies
Cementos Avellaneda, S.A. Group
Sotacib (Tunisia)
Total
13
14
26
29
45
16
2
43
35
223
Men
Total
2014
18
155
11
173
424
98
7
677
546
2.109
Total
2013
31
169
37
202
469
114
9
720
581
2.332
58
178
227
567
113
9
702
538
2.392
The figure considered for Group companies is the final total headcount. The figure considered for jointly
controlled entities is the result of multiplying the final headcount by the Group's percentage of control over
these companies.
d)
Other operating expenses
The detail of “Other Operating Expenses” in 2014 and 2013 is as follows:
2014
Leases and royalties
Repair and upkeep expenses
Professional services
9.619
20.717
22.101
8.349
6.936
Transport
48.063
51.230
Utilities
67.330
66.200
Other current operating expenses
Taxes other than income tax
e)
2013
8.341
5.365
4.929
17.292
19.003
Other
18.859
26.881
Total
194.316
206.899
Leases
Operating leases
The detail of the operating lease payments recognised as an expense in 2014 and 2013 is as follows:
62
2014
Minimum operating lease payments recognised in income for the year
2013
8.046
8.498
At 31 December 2014 and 2013, the Group had outstanding obligations for future minimum lease payments
under non-cancellable operating leases falling due as follows:
2014
Within one year
Between one and five years
After five years
2013
7.575
5.585
6.173
7.651
5.317
5.334
The assets corresponding to the lease obligations assumed relate basically to land and buildings. The
average term of the leases varies considerably, since the facilities to be used for carrying on the activity of
concrete manufacturing and the extraction and treatment of aggregates stand mainly on leased land. These
activities are carried on at the various manufacturing plants of the Group’s subsidiaries.
f)
Fees paid to auditors
The fees for financial audit services provided to the various companies composing the Cementos Molins and
subsidiaries Group in 2014 and 2013 were as follows:
2014
Auditors
Deloitte
Deloitte
Deloitte
Price Waterhouse Coopers
Hoda Vasi Chowdhury & Co.
KPMG Tunisie and Deloitte
Total
Country
Audit
Spain
Mexico
Argentina
Uruguay
Bangladesh
Tunisia
2013
Other services
240
467
25
86
26
111
955
2
11
7
0
15
35
Audit
Other services
239
455
28
37
20
88
867
The aforementioned figures relate to the full amount of the fees, although they were recognised in the
consolidated statement of profit or loss taking into account the accounting method.
EUR 25 thousand of "Other Services" related to tax services in 2014.
26.
The detail of the impairment and gains or losses on disposals of assets in 2014 and 2013 is as follows:
63
44
27
9
5
11
96
Losses
Impairment and gains or losses on disposal or derecognition of property, plant and equipment
Impairment and gains or losses on disposal or derecognition of intangible assets
Impairment of goodwill
Total
2014
Gains
(2.010)
(8.623)
(490)
(11.123)
Net loss
287
287
2013
Gains
Net loss
Losses
(1.723)
(8.623)
(490)
(10.836)
(2.374)
(288)
(1.900)
(4.562)
1.243
1.243
(1.131)
(288)
(1.900)
(3.319)
The amount of the loss included under "Impairment and Gains or Losses on Disposal or Derecognition of
Intangible Assets" in 2014 relates to the impairment loss recognised on the intangible asset with an indefinite
useful life (trademark) of the SOTACIB S.A. CGU (see Note 3-h).
The amount of the impairment of goodwill in 2014 and 2013 relates to the goodwill of the Group's Spanish
segment.
27.
Financial loss
The detail of the financial loss incurred in 2014 and 2013 is as follows:
2014
Finance income:
Income from equity investments
Other interest income
Other finance income
Exchange gains
Total finance income
Finance costs:
Borrowing costs
Other finance costs
Impairment of financial instruments
Exchange losses
Total finance costs
Total financial loss
28.
2013
8.397
506
5.314
14.217
8.986
296
3.257
12.539
(23.536)
(2.002)
486
(3.976)
(29.028)
(14.811)
(25.299)
(529)
(1.112)
(3.569)
(30.509)
(17.970)
Earnings per share
The calculation of basic and diluted earnings per share in 2014 and 2013 is as follows:
2014
Net profit attributable to the Parent (thousands of euros)
Weighted average number of ordinary shares
Basic and diluted earnings per share (euros)
29.
2013
30.811
10.109
66.115.670
66.115.670
0,47
0,15
Information on greenhouse gas emission allowances
In its resolution of 15 November 2013, the Spanish Cabinet established the final allocation of greenhouse gas
emission allowances relating to Phase III of the trading scheme (period 2013-2020). The emission allowances
granted at zero cost to Cementos Molins Industrial, S.A.U. under Law 1/2005, of 9 March, governing the
64
greenhouse gas emission allowance trading scheme, amounted to 7.1 million tonnes of CO2. 933,058 allowances
with a value of EUR 4.4 million were allocated for 2014.
954,999 allowances with a value of EUR 5.4 million were used in 2014. The allowances used were recognised
under “Other Current Operating Expenses”, with a credit to “Provisions for Contingencies and Charges”. Also,
EUR 5.4 million were deducted from “Deferred Income” and credited to “Other Income”.
In addition, in December 2014 Cementos Molins Industrial purchased 509,342 emission allowances acquired for
investments in projects in developing countries (CERs) at an average unit price of EUR 0.15. These CERs were
exchanged before the Union registry operated by the European Commission for emission allowances (EUAs)
received under the National Allocation Plan, the market price of which at the exchange date was EUR 7.24. This
gave rise to an increase in value of EUR 3.5 million, which was recognised in "Deferred Income" under "NonCurrent Liabilities" in the consolidated balance sheet.
962,781 allowances with a value of EUR 5 million were used in 2013.
Also, on 19 April 2013 Cementos Molins Industrial was notified of the resolution of the Climate Change Office, of
the Spanish Ministry of Agriculture, Food and Environmental Affairs, regarding its emission allowance as a new
member for the period 2008-2012, relating to the new production line which came into operation in 2010 in the
Vicenç dels Horts factory, for which it was allocated 459,320 additional allowances for 2012.
30.
Obligations and contingencies
a) Obligations
The Group commenced the projects for the construction of a second production line at the plant in Apazapan
(Mexico) for USD 190 million, of which a total of USD 25.2 million were committed at 2014 year-end.
Also, the Group, through its investee Yacuces, S.L., commenced construction of a cement plant in Bolivia with a
budget of USD 216 million, of which USD 46.19 million were committed at 31 December 2014.
The Group had no significant investment obligations at 31 December 2013.
b) Contingencies
On 22 December 2014, the Spanish National Markets and Competition Commission (CNMC) initiated
administrative disciplinary proceeding S/DC/0525/14 due to alleged conduct prohibited by Article 1 of Competition
Law 15/2007 against the subsidiaries Cementos Molins Industrial, S.A.U. and Promotora Mediterránea-2, S.A.
The initiation of this proceeding does not prejudge the final result of the investigation. The proceeding is at a very
early stage and no list of alleged infringements or resolution proposal has yet been prepared. Accordingly, the
specific object of the proceeding is not known.
31.
Transactions with related parties
a)
Commercial transactions
As provided for in Ministry of Economy and Competitiveness Order 461/2013, of 20 March, and Ministry of
Economy and Finance Order EHA/3050/2004, of 15 September, the directors did not carry out any relatedparty transactions with CEMENTOS MOLINS, S.A. or with the companies in its consolidated Group.
b)
Situations involving direct or indirect conflict with Cementos Molins, S.A.’s business interest.
There are no situations involving a direct or indirect conflict of the directors or persons related to them with
Cementos Molins, S.A.'s business interest.
65
c)
Existence and identity of directors who are also directors of companies holding significant
ownership interests in Cementos Molins, S.A.
Pursuant to the provisions of Ministerial Order ECC/461/2013, of 20 March:
a)
The individuals indicated below are members of the Board of Directors of the following companies which
hold a significant ownership interest in Cementos Molins, S.A.:
Casimiro Molins Ribot is the Chairman of the Board of Directors of INVERSORA PEDRALBES, S.A. and
OTINIX, S.A.
Joaquín Mª Molins López-Rodó is a director of INVERSORA PEDRALBES, S.A. and OTINIX, S.A.
Juan Molins Amat and Joaquim Molins Amat are directors of NOUMEA, S.A.
b)
d)
None of the other members of the Board of Directors are directors of any company which holds a
significant ownership interest in Cementos Molins, S.A.
Existence and identity of directors who are directors or executives of other companies belonging to
the Cementos Molins, S.A. Group.
a)
The individuals indicated below are members of the Board of Directors or executives of the following
companies belonging to the Cementos Molins, S.A. Group:
Juan Molins Amat is:
- Chairman of (i) Cemolins Internacional, S.L.U., (ii) Cementos Avellaneda, S.A., (iii) Minus
Inversora, S.A., (iv) Sotacib, S.A. and (v) Sotacib-Kairouan, S.A.
- Deputy chairman of Cementos Artigas, S.A.
- Director of Corporación Moctezuma, S.A.B. de C.V.
Miguel del Campo Rodríguez is a director of Sotacib S.A. and Sotacib-Kairouan, S.A.
None of the other members of the Board of Directors are directors or executives of any company belonging
to the Cementos Molins, S.A. Group.
e)
Remuneration of executives
The remuneration of the Parent's key executives in all connections totalled EUR 3,076 thousand in 2014
(2013: EUR 3,210 thousand).
f)
Related party transactions and balances
Transactions between the Parent and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in these notes to the consolidated financial statements. Transactions
between the Parent and its subsidiaries are disclosed in the separate financial statements.
There are no related party balances other than those disclosed in this note to the consolidated financial
statements, apart from third party transactions which were not eliminated on consolidation, since they were
accounted for using the equity method, and which are detailed as follows:
66
Related party transactions
2014
Sales of materials
Other revenue
Rendering of services
Purchases of materials
Services received
Financial profit
2013
1.792
1.314
106
(876)
(1.929)
39
Related party balances
3.057
1.703
432
(906)
(1.541)
46
2014
Loans to companies
Loans from companies
Trade receivables
Trade payables
32.
2013
1.254
(98)
2.810
(424)
1.236
(83)
3.903
(376)
Remuneration and other benefits of directors
In 2014 the remuneration earned by the members of the Parent's Board of Directors as a whole amounted to
EUR 1,120 thousand, of which EUR 461 thousand related to the salary earned by the CEO. The detail of the rest
of the remuneration is as follows:
Remuneration of the Board of Directors in 2014
Article 20 of the Board Regulations
Attendance
fees
Casimiro Molins Ribot
Juan Molins Amat (CEO)
Joaquín Mª Molins López-Rodó
Cartera de Inversiones CM, S.A.
Miguel del Campo Rodríguez
Joaquim Molins Amat
Noumea, S.A.
Emilio Gutiérrez Fernández de Liencres
Inversora Pedralbes, S.A.
Foro Familiar Molins, S.L.
Eusebio Díaz-Morera Puig-Sureda
Francisco Javier Fernández Bescós
TOTAL
8
8
14
12
32
13
11
15
13
15
11
7
160
Directors' fees
30
30
30
30
30
30
30
30
30
30
30
30
360
Committee
members'
Pension plans and
life insurance
14
14
14
14
14
14
14
14
14
126
13
13
In 2013 the remuneration earned by the members of the Parent's Board of Directors as a whole amounted to
EUR 1,157 thousand, of which EUR 499 thousand related to the salary earned by the CEO. The detail of the rest
of the remuneration was as follows:
67
Remuneration of the Board of Directors in 2013
Article 20 of the Board Regulations
Attendance
fees
Juan Molins Amat (CEO)
Joaquim Molins Amat
Noumea, S.A.
TOTAL
33.
10
10
13
11
34
13
13
13
14
11
10
7
159
Directors' fees
Committee
members'
30
30
30
30
30
30
30
30
30
30
30
30
360
Pension plans and
life insurance
14
14
14
14
14
14
14
14
14
126
13
13
Detail of investments in companies engaging in similar activities and the performance, as independent
professionals or as employees, of similar activities by the directors and related parties
Pursuant to Article 25 of the Bylaws, following is a detail of the companies engaging in an activity that is identical,
similar or complementary to the activity that constitutes the company object of Cementos Molins, S.A., in which
the members of the Board of Directors own direct or indirect equity interests, and of the functions, if any, that they
discharge thereat according to the information provided to the Company:
Activity
Ownership
interest
Functions
Holding company
0.01%
Chairman
Otinix, S.A.
Holding company
0.0034%
Chairman
Cemolins Internacional, S.L.U.
Holding company
-
Chairman
Minus Inversora, S.A.
Holding company
-
Chairman
Noumea, S.A.
Holding company
10.73%
Director
Molins Consellers, S.L.
Holding company
-
Sole director
Noumea, S.A.
Holding company
4.51%
Director
Holding company
11.37%
Director
Otinix, S.A.
Holding company
7.34%
Director
Otinix, S.A.
Holding company
39.60%
-
Owner
Investee
Juan Molins Amat
Joaquín Molins Amat
Pursuant to Article 25 of the Bylaws, following is a detail of the companies engaging in an activity that is identical,
similar or complementary to the activity that constitutes the company object of Cementos Molins, S.A., in which
persons related to the Board of Directors own direct or indirect equity interests, pursuant to Article 231 of the
Spanish Limited Liability Companies Law, and of the functions, if any, that they discharge thereat according to
the information provided to the Company:
68
Owner
Related to:
Investee
Activity
Ownership
interest
Functions
Noumea, S.A.
Holding company
6.06%
Chairman
Pablo Molins Amat
Mª Gloria Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Cristina Molins Joly
Pablo Molins Amat
Noumea, S.A.
Holding company
0.05%
---
Pablo Molins Joly
Pablo Molins Amat
Noumea, S.A.
Holding company
0.05%
---
Noumea, S.A.
Holding company
10.73%
Director
Noumea, S.A.
Holding company
4.51%
Director
Noumea, S.A.
Holding company
9.74%
Director
Noumea, S.A.
Holding company
9.55%
Director
Noumea, S.A.
Holding company
10.43%
Director
Noumea, S.A.
Holding company
6.61%
Director
Noumea, S.A.
Holding company
9.95%
Director
Noumea, S.A.
Holding company
7.60%
Director
Noumea, S.A.
Holding company
10.03%
Director
Pablo Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Pablo Molins Amat
Joaquim Molins Amat
Juan Molins Amat
Pablo Molins Amat
Isabel Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Pablo Molins Amat
Carmen Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Pablo Molins Amat
Santiago Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Pablo Molins Amat
Jorge Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Pablo Molins Amat
José I. Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Pablo Molins Amat
Javier Molins Amat
Juan Molins Amat
Joaquim Molins Amat
Mª Eulalia Molins Amat
Pablo Molins Amat
69
Juan Molins Amat
Joaquim Molins Amat
Juan Molins Monteys
Juan Molins Amat
Noumea, S.A.
Holding company
0.02%
---
Esperanza Molins Monteys
Juan Molins Amat
Noumea, S.A.
Holding company
0.02%
---
Oriol Molins Monteys
Juan Molins Amat
Noumea, S.A.
Holding company
0.02%
---
Blanca Molins Monteys
Juan Molins Amat
Noumea, S.A.
Holding company
0.02%
---
Noumea, S.A.
Holding company
10.45%
Director
Juan Molins Amat
Pablo Molins Amat
Joaquim Molins Amat
Joaquín Molins Vila
Joaquim Molins Amat
Noumea, S.A.
Holding company
0.22%
---
Ana Gloria Molins Vila
Joaquim Molins Amat
Noumea, S.A.
Holding company
0.22%
---
Nicolás Molins Vila
Joaquim Molins Amat
Noumea, S.A.
Holding company
0.04%
---
Montserrat Molins Vila
Joaquim Molins Amat
Noumea, S.A.
Holding company
0.22%
---
Inversora
Pedralbes, S.A.
Holding company
16.98%
Deputy chair
Otinix, S.A.
Holding company
16.31%
Deputy chair
Inversora
Pedralbes, S.A.
Holding company
11.37%
Director
Otinix, S.A.
Holding company
7.36%
Director
Inversora
Pedralbes, S.A.
Holding company
11.37%
Director
Otinix, S.A.
Holding company
7.34%
Director
Inversora
Pedralbes, S.A.
Holding company
11.37%
Director
Otinix, S.A.
Holding company
7.35%
Director
Ana Mª Molins López-Rodó
Mª Dolores López Rodó
Mª Teresa Molins López-Rodó
70
Inversora
Pedralbes, S.A.
Holding company
11.37%
Director
Otinix, S.A.
Holding company
7.34%
Director
Inversora
Pedralbes, S.A.
Holding company
11.37%
Director
Otinix, S.A.
Holding company
7.37%
Director
Inversora
Pedralbes, S.A.
Holding company
2.64%
-----------
Otinix, S.A.
Holding company
1.63%
-----------
Inversora
Pedralbes, S.A.
Holding company
2.64%
-----------
Otinix, S.A.
Holding company
1.63%
-----------
Inversora
Pedralbes, S.A.
Holding company
2.64%
-----------
Otinix, S.A.
Holding company
1.63%
-----------
Inversora
Pedralbes, S.A.
Holding company
2.64%
Director
Otinix, S.A.
Holding company
1.63%
Director
Inversora
Pedralbes, S.A.
Holding company
0.01%
Chairman
Otinix, S.A.
Holding company
0.0034%
Chairman
Inversora
Pedralbes, S.A.
Holding company
9.79%
-----------
Laureano Molins López-Rodó
Mª Regina Molins López-Rodó
Silvia Molins Domingo
Javier Molins Domingo
Beatriz Molins Domingo
Casimiro Molins Domingo
Otinix, S.A.
71
Joaquim Mª Molins Gil
Cartera de
Inversiones CM,
S.A.
Holding company
50.01%
Deputy
chairman
Juana Gil Santos
Cartera de
Inversiones CM,
S.A.
Holding company
Beneficial
owner
Chairman
Marta Molins Gil
Cartera de
Inversiones CM,
S.A.
Holding company
49.99%
---
Detail of the ownership interests in CEMENTOS MOLINS, S.A.
a)
Pursuant to Article 540 of the Spanish Limited Liability Companies Law, following is a detail of the
equity interests held by the members of the Board of Directors in Cementos Molins, S.A.:
Owner
Juan Molins Amat
Joaquín Molins Amat
Noumea, S.A.
34.
Number of shares
41,350
47,921
15,878,000
1,000
70
11,160,000
1,000
21,213,595
377
0
500
24,910
0.063%
0.072%
24.015%
0.002%
0.000%
16.880%
0.002%
32.086%
0.001%
0%
0.001%
0.038%
Nominal value
12,405
14,376.30
4,763,400
300
21
3,348,000
300
6,364,079
113
0
150
7,473
Date of
acquisition
Various
Various
Various
12/11/04
Various
Various
11/11/04
Various
Various
02/08/12
29/07/09
Date of last
notification to the
CNMV
25/01/13
18/12/12
21/12/12
15/04/08
17/04/12
17/04/12
17/04/12
20/12/07
01/08/08
31/05/12
03/08/12
29/07/09
Information on the environment
The Group companies have been carrying out a series of activities to prevent, minimise or repair damage to the
environment, which entailed certain investments and expenses which are detailed below.
The main cumulative investments, by company, in fixtures, machinery and equipment added to non-current
assets and aimed at protecting and enhancing the environment, and the related cost and accumulated
depreciation are as follows:
72
2013
2014
Propamsa, S.A.
Sotacib (Tunisia)
22.766
8.097
588
1.806
5.466
387
39.110
8.369
5.272
312
1.075
2.363
50
17.441
22.054
8.956
588
1.806
6.238
269
39.911
7.231
5.735
282
999
2.307
24
16.578
By company, the main expenses incurred with the aim of protecting and enhancing the environment were as
follows:
2014
2013
Ordinary
Ordinary
expenses
expenses
Company
Propamsa, S.A.
426
135
5
157
723
466
89
7
191
753
The foregoing expense items consisted of: waste disposal, water, air and noise measurements, forest
repopulation activities, studies and audits.
35.
Events after the reporting period
No significant events that might have a material impact on the Group's equity have taken place since the end of
2014.
36.
Explanation added for translation to English
These consolidated financial statements are presented on the basis of the regulatory financial reporting
framework applicable to the Group in Spain (see Note 2). Certain accounting practices applied by the Group that
conform with that regulatory framework may not conform with other generally accepted accounting principles and
rules.
73
APPENDIX I
Group companies:
Percentage of ownership interest
Company name/Registered office
(A) CEMENTOS MOLINS INDUSTRIAL, S.A.U.
CN-340, km. 1242,300, nº 2-38
08620 - Sant Vicenç dels Horts (Barcelona)
(A) PROMOTORA MEDITERRÁNEA-2, S.A.
CN-340, km. 1242,300, nº 2-38
(A) PREFABRICACIONES Y CONTRATAS, S.A.U.
Espronceda, 38, local 3
28003 - Madrid
(A) PROPAMSA, S.A.U.
CN-340, km. 1242,300, nº 2-38
(A) CEMOLINS INTERNACIONAL, S.L.U.
CN-340, km. 1242,300, nº 2-38
(J) CEMOLINS SERVICIOS COMPARTIDOS, S.L.U.
CN-340, km. 1242,300, nº 2-38
(J) CEMOL CORPORATION, B.V.
Naritaweg, 165
1043 BW Amsterdam (Netherlands)
(A) MINUS INVERSORA, S.A.
Reconquista, 336, 3º H
1335- Buenos Aires (Argentina)
(A) CEMENTOS AVELLANEDA, S.A.
Defensa, 113, 6º
1065 - Buenos Aires (Argentina)
(F) SOCIÉTÉ TUNISO ANDALOUSE DE CIMENT BLANC
Share
capital
Other
Total
Net profit shareholders' shareholders'
Dividends
(loss)
equity
equity
Line of
business
Direct
Indirect
Total
Cement
100
-
100
56.247
(7.339)
82.368
131.276
Concrete and
aggregates
98,94
-
98,94
36.148
(5.122)
61.592
92.618
Precast concrete
100
-
100
56.577
(1.608)
6.072
61.041
Construction
materials
100
-
100
469
361
17.514
18.344
Holding company
100
-
100
30.468
32.271
223.996
286.735
Services
100
-
100
537
14
(2)
549
Holding company
-
100
100
16.032
256
3.377
19.665
Holding company
4
96
100
524
6.439
22.078
29.041
Cement
-
51
51
2.890
27.704
94.218
124.812
Cement
-
65,63
65,63
53.492
(5.149)
(14.366)
33.978
Cement
-
67,19
67,19
79.576
772
(3.328)
77.020
Services
-
65,63
65,63
88
(317)
325
97
Concrete
-
50,46
50,46
400
(135)
(21)
244
Aggregates
-
79,17
79,17
72
3
1.203
1.278
Precast concrete
-
80
80
4.327
(511)
(722)
3.093
570
46.315
"Sotacib"
Immeuble Alyssa
Angle rue du Lac Tanganyika et le pasage du
Lac Neusie
Les Berges du Lac, 1053 -Tunisia
(F) SOTACIB KAIROUAN
6 Rue IBN - Hazm
Cite Jardins Le Belvédère
1002 - Tunisia
(F) SOCIÉTÉ DES SILOS SOTACIB- SSS
6 Rue IBN - Hazm
Cite Jardins Le Belvédère
1002 - Tunisia
(J) PROMSA DEL BERGUEDÀ, S.L.
CN-340, km. 1242,300, nº 2-38
(J) MONSO-BONETA, S.L.
Pallars, 15
25620 - Tremp (Lleida)
(J) PRECON (LINYI) CONSTRUCTION CO., LTD
Yihe Road, Economic developing District of Linyi
Shandong Province (China)
The above data were provided by the respective companies and their equity position is as shown in their financial
statements at 31 December 2014.
The dividends relate to the dividends received by the various companies.
The above companies belong to the Group through ownership of the majority of the voting power. They were fully
consolidated.
The financial statements of these companies were audited by:
A= Deloitte
F = KPMG
J = Unaudited financial statements (not subject to statutory audit)
74
APPENDIX II
Associates and jointly controlled entities:
(A) FRESIT, B.V.
Johannes Vermeerplein, 11
1071 - DV Amsterdam (Netherlands)
(G) CEMENTOS ARTIGAS, S.A.
María Orticohea 4704
Montevideo (Uruguay)
(G) COLINA JUSTA, S.A.
Rambla República de Chile, 4511
(G) FRESH MARKETS, S.A.
(G) EROMAR, S.A.
(G) MONDELLO, S.A.
(C) CORPORACIÓN MOCTEZUMA, S.A.B. de C.V.
Monte Elbruz, 134 PH - Colonia Lomas de Chapultepec
Deleg. Miguel Hidalgo
11000 - Mexico City
(C) CEMENTOS PORTLAND MOCTEZUMA, S.A. de C.V.
Carretera Tezoyuca - Tepetzingo, km. 1,9
Municipio Emiliano Zapata
62765 - Estado de Morelos (Mexico)
(C) CEMENTOS MOCTEZUMA, S.A. de C.V.
11000 - Mexico City
(C) LATINOAMERICANA DE CONCRETOS, S.A de C.V.
11000 - Mexico City
(C) INMOBILIARIA LACOSA S.A. de C.V.
11000 - Mexico City
(C) LATINOAMERICANA DE AGREGADOS Y
Other
Total
Dividends
(loss)
equity
equity
Share
capital
Line of business
Direct
Indirect
Total
Holding company
-
50
50
6.795
(56)
178.563
185.302
Cement
-
49
49
32.984
21.953
6.689
61.626
Services
-
49
49
8
(2)
(6)
(0,07)
Services
-
49
49
17
90
431
538
Cement
-
49
49
1.302
(127)
(413)
762
Services
-
49
49
1.246
(99)
(75)
1.072
Holding company
-
33,33
33,33
33.956
113.449
326.442
473.847
Services
-
33,33
33,33
(595)
699
(755)
(651)
Cement
-
33,33
33,33
63.276
108.667
202.309
374.252
Concrete
-
33,33
33,33
1.023
(1.773)
2.925
2.175
Real estate
-
33,33
33,33
2.799
248
3.755
6.802
Aggregates
-
33,33
33,33
611
82
2.741
3.434
Services
-
33,33
33,33
472
506
(30)
948
Services
-
33,33
33,33
768
497
(19)
1.246
Concrete
-
20,00
20,00
876
(43)
264
1.097
Concrete
-
18,33
18,33
817
(284)
594
1.127
Concrete
-
20,00
20,00
559
273
1.190
2.023
Aggregates
-
17,00
17,00
292
40
67
400
CONCRETOS, S.A. de C.V.
11000 - Mexico City
(C) LATINOAMERICANA DE COMERCIO, S.A. de C.V.
(C) LACOSA CONCRETOS, S.A. de C.V.
(C) LATINOAMERICANA DE CONCRETOS DE SAN LUIS,
S.A. de C.V.
Prolongación Avenida San Antonio, 705
Colonia Lomas de Becerra
01280 - Mexico City
(C) CONCRETOS MOCTEZUMA DE TORREON, S.A. de
C.V.
11000 - Mexico City
(C) CONCRETOS MOCTEZUMA DE XALAPA, S.A. de
C.V.
Calle B, Isla B, Bodega 7
Balcones de Xalapa
91194 - Xalapa Veracruz
(C) MAQUINARIA Y CANTERAS DEL CENTRO. S.A. de
C.V.
Avda.Molier, 328, nº 328, Dpto. 602
Colonia Los Morales Sección Palmas
11540 - Mexico City
75
Other
Total
Dividends
(loss)
equity
equity
Share
capital
Line of business
Direct
Indirect
Total
Concrete
-
33,33
33,33
6
(372)
(152)
(518)
Cement
-
33,33
33,33
180
(28)
2.554
2.705
Concrete
-
28,33
28,33
1.647
(260)
156
1.543
Concrete
-
17,00
17,00
6
(203)
(510)
(708)
Services
-
33,33
33,33
3
3.394
Services
-
33,33
33,33
3
13
(1)
15
-
16,67
16,67
6
(1.017)
(1.117)
(2.128)
Precast concrete
-
36,48
36,48
1.602
408
8.157
10.167
Pavements
-
36,48
36,48
450
(288)
-
162
Precast concrete
-
18,24
18,24
416
111
(104)
423
Services
33,33
-
33,33
3.736
349
(625)
3.460
Services
-
49,47
49,47
7
11
568
586
Aggregates
-
49,47
49,47
300
15
86
401
Services
-
49,47
49,47
6
(47)
271
230
Services
-
49,47
49,47
2.000
(184)
(372)
1.444
Concrete
-
48,48
48,48
45
Services
-
25
25
200
(31)
15
184
Holding company
-
50
50
28.636
2.810
50.460
81.906
Cement
-
29,45
29,45
122.716
29.795
(16.201)
136.311
-
29,45
29,45
5.350
10.815
(13.232)
2.932
Services
-
21,79
21,79
7
(1)
(16)
(10)
Transport
-
22,97
22,97
338
(85)
(271)
(18)
Holding company
-
49
49
6.894
184
24.492
31.570
Cement
-
32,67
32,67
14.693
943
12.819
28.455
Services
-
49,04
49,04
9.435
50
-
9.486
(C) CONCRETOS MOCTEZUMA DE DURANGO, S.A. de
C.V.
11000 - Mexico City
(C) PROYECTOS TERRA MOCTEZUMA, S.A. DE C.V.
Av. Insurgentes 33 - Colonia Moctezuma
Jiutepec - Morelos
62550 - Mexico City
(C) CONCRETOS MOCTEZUMA DEL PACÍFICO, S.A. de
C.V.
11000 - Mexico City
(C) CONCRETOS MOCTEZUMA DE JALISCO, S.A. de
11000 - Mexico City
(C) CEMOC SERVICIOS ESPECIALIZADOS, S.A. de C.V.
11000 - Mexico City
(C) COMERCIALIZADORA TEZUMA, S.A. DE C.V.
11000 - Mexico City
(C) CYM INFRAESTRUCTURA , S.A.P.I. DE C.V.
11000 - Mexico City
(B) ESCOFET 1886, S.A.
c/ Montserrat, 162
08760 – Martorell
(J) ESCOFET PAVIMENT, S.L.
c/ Montserrat, 162
08760 – Martorell
(H) ESCOFET PRETECNO, S.A. DE C.V.
Carretera Federal Libre Cancún Chetumal km. 328
Cancún Puerto Morelos, Quintana Roo, 77580 - Mexico
(J) PORTCEMEN, S.A.
Moll Contradic Sud, s/n – Port Autònom Barcelona
08039 – Barcelona
(J) MONTASPRE SERVEIS AMBIENTALS, S.L.
Barri La Garriga, s/n
17481 – Sant Julià de Ramis (Girona)
(J) PROMOTORA DE FORMIGONS, S.A.
Carretera de la Comella, 11
AD 500 – Andorra la Vella
(J) TÈCNIQUES AMBIENTALS DE MUNTANYA, S.L
Zona Industrial Sant Marc -P.S Sant Marc, Nau 4
17520 - Puigcerdà (Girona)
(J) PRONATUR ENERGY 2011, S.L.
CN-340, km. 1242,300, nº 2-38
(J) PROMSA TRADING L.L.C.
B-Ring Road, Al Handassa Street
Old Public Works Building – 7th floor
P.O. Box: 177, Doha - Qatar
(J) VESCEM-LID, S.L.
c/ València, 245, 3r 5ª
08009- Barcelona
(A) SURMA HOLDING, B.V.
Herengracht, 458
1017 CA - Amsterdam (Netherlands)
(D) LAFARGE SURMA CEMENT LTD
65 Gulshan Avenue, Gulshan -1
Dhaka 1212 (Bangladesh)
(E) LAFARGE UMIAM MINING PRIVATE LTD
Hotel Polo Tower, Polo Ground Oakland Road
Shillong 793001, Meghalaya (India)
(E) LUM MAWSHUN MINERALS PRIVATE LTD
Hotel Polo Tower, Polo Ground Oakland Road
Shillong 793001, Meghalaya (India)
(F) SOCIÉTÉ TUNISIENNE DE TRANSPORT EN VRAC-
-
3.397
Infrastructure
-
-
45
Mining
STTV
22, Avenue Taieb Mhri
1240 - Feriana Kasserine (Tunisia)
(J) YACUCES, S.L.
Carretera Fuencarral-Alcobendas, Km. 3.800
28108 - Alcobendas (Madrid)
(G) ITACAMBA CEMENTO, S.A.
Av. Brasil, entre Segundo y Tercer Anillo
Parque Industrial Liviano, Santa Cruz de la Sierra (Bolivia)
(I) GB MINERALES Y AGREGADOS, S.A.
Av. Brasil Calle 1 nº S/N Zona: Este
Santa Cruz de la Sierra (Bolivia)
76
The above data were provided by the companies and their equity position is as shown in their financial statements at 31
December 2014. The data relating to Corporación Moctezuma, S.A.B. de C.V. are consolidated in the Mexican Group.
These companies were accounted for using the equity method (see Note 2).
The foregoing figures were translated to euros at the year-end exchange rates of their respective currencies.
Corporación Moctezuma, S.A.B. de C.V. is listed on the Mexican stock exchange. Lafarge Surma Cement Ltd is listed on
the Dhaka and Chittagong stock exchanges.
The financial statements of these companies were audited by:
A = Deloitte, S.L.
B = Gassó y Cia. Auditors
C = Galaz, Yamazaki, Ruiz Urquija, S.L. (Deloitte)
D = Hoda Vasi Chowdhury & Co (Deloitte)
E = Deloitte Haskins and Sells
F = KPMG
G = PricewaterhouseCoopers
H = Mancera S.C. (Ernst & Young)
I = R & B Auditores
J = Unaudited financial statements (not subject to statutory audit)
77
Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish-language
version prevails.
2014 CONSOLIDATED DIRECTORS’ REPORT
CONSOLIDATED ECONOMIC REPORT
The Cementos Molins Group's core business is the manufacture and marketing of cement,
concrete, mortars, aggregates and precast concrete products, and it has production facilities in
Spain, Argentina, Uruguay, Mexico, Bolivia, India, Bangladesh, Tunisia and China.
In general terms, the Molins Group performed well in 2014 with respect to prior years due to the
improvement observed in the results of the Spanish companies, which, although they showed a
loss, indicated a return to profit from operations, and the sound performance of the foreign
businesses, in spite of the fact that the performance of exchange rates had a negative impact
on the Group's consolidated financial statements.
Consolidated revenue fell 2.2% on 2013, achieving a total of EUR 527.7 million. Domestic
companies increased their income by 14.1%, bolstered by a greater volume of activity in the
export of clinker and an improvement in the precast concrete industry, whereas the revenue of
the international companies fell on aggregate by 9.3%, affected by the adverse impact of
exchange rates in Argentina.
Profit from operations reached EUR 10.9 million, EUR 7.1 million more than in 2013 due to
the general improvement in the domestic companies. In terms of the International Group, profit
from operations was EUR 27.4 million, EUR 11 million down on that recognised in 2013 due to
the EUR 8.6 million impairment loss recognised at year-end on the assets of Sotacib (Tunisia)
and decrease in the Argentinean subsidiary's contribution.
Profit from companies accounted for using the equity stood at EUR 55.6 million, up 15.6%
on 2013. The Group uses this method to consolidate the result of the businesses in Mexico
(Corporación Moctezuma), Uruguay (Cementos Artigas), Bangladesh (Surma Cement) and
Bolivia (Itacamba Cementos).
Consolidated net profit was EUR 30.8 million, representing a threefold increase on net profit
for 2013. Group domestic companies continued to report net losses, although a 40.6%
improvement was observed compared with 2013, whereas international companies reported a
net profit of EUR 58.5 million, up 3.1% on 2013. If we exclude the impairment in relation to
Sotacib's assets, the improvement observed in the international companies would be of around
13%.
Thousand of euros
Year
2010
2011
2012
2013
2014
65.485
24.300
43.706
10.109
30.811
Spanish companies
-21.226
-19.041
-24.642
-46.628
-27.675
Foreign companies
86.711
43.341
68.348
56.738
58.486
13.223
11.240
11.240
9.256
10.579
Consolidated net profit
Dividends for the year
The Group’s consolidated net borrowings fell by EUR 53 million to EUR 267 million.
Investments included most notably the commencement of the construction of a second 3,000
tonne/day clinker production line at the Apazapan plant in Mexico, which will double the plant's
current capacity. The forecast investment is USD 190 million and it is expected to come into
operation in 2017. As a result of this expansion, Corporación Moctezuma will have two
production lines in operation at each of its three plants: Tepetzingo, Cerritos and Apazapan.
78
On 31 July 2014, the Cementos Molins Group entered into an agreement with the Brazilian
company Votorantim for the incorporation of Yacuces, S.L., a joint venture for the start-up of a
project in Bolivia, whereby on 3 September 2014, Yacuces, S.L. purchased 66.7% of the
Bolivian company Itacamba Cemento, S.A. The purchase price for the ownership interest was
USD 18.6 million.
By means of this transaction the Molins Group gained a foothold in the Bolivian market through
Itacamba Cemento which currently operates a cement grinding facility in the Germán Busch
province and has commenced the construction of an integral cement factory with a production
capacity of 2,000 tonnes/clinker per day. The forecast investment is USD 216 million and it is
expected to come into operation in 2017.
Consolidated equity was EUR 715 million, up EUR 15.6 million on 2013.
MANAGEMENT INFORMATION
The Consolidated Financial Statements of the Cementos Molins Group were affected by the
entry into force on 1 January 2014 of new international accounting standards, more specifically,
IFRS 11, Joint Arrangements, which eliminates the option of proportionate consolidation for joint
ventures, and, accordingly, the ownership interests held in Corporación Moctezuma (Mexico)
and Surma Cement (Bangladesh) over which management and control is shared with another
shareholder, are now accounted for using the equity method.
However, for internal monitoring and management purposes the Group applies a
proportionality criteria in the method for consolidation of its investees, i.e., the final
percentage of ownership held in each and every investee.
The following aggregates are provided with the aim of facilitating the monitoring of Group
performance:
Thousands of euros
2010
2011
2012
2013
2014
617.947
607.909
649.914
613.988
635.310
Spanish companies
278.603
216.256
176.932
170.065
192.959
Foreign companies
339.343
391.653
472.983
443.923
442.351
182.737
98.837
117.985
107.014
127.434
Spanish companies
15.765
-565
-21.897
-12.469
6.076
Foreign companies
166.972
99.402
139.882
119.483
121.358
Revenue
EBITDA
Consolidation of the companies in proportion to final percentage of ownership
79
Contribution to Revenue, EBITDA and Net Profit for 2014:
Revenue
Thousands of euros
EBITDA
Dec. 2014
Dec. 2013
SPANISH COMPANIES
192.959
170.065
Cementos Avellaneda (Argentina); 51%
Cementos Artigas (Uruguay); 49%
Corporación Moctezuma (Mexico); 33.33%
Surma Cement (Bangladesh); 29.45%
Sotacib (Tunisia); 65.63%
Sotacib Kairouan (Tunisia), 6.7.19%
Other companies
INTERNATIONAL COMPANIES
127.612
43.233
176.325
33.267
24.044
35.269
2.600
442.351
TOTAL GROUP
635.310
Dec. 2014
Net profit (loss)
Dec. 2013
Dec. 2014
Dec. 2013
6.076
(12.469)
(27.675)
(46.628)
144.570
51.107
156.227
32.141
25.514
34.365
443.923
21.453
11.702
61.836
12.521
1.345
12.726
(226)
121.358
26.119
15.480
51.239
12.966
2.082
11.946
(350)
119.483
12.219
8.765
38.303
7.932
(9.221)
494
(5)
58.486
13.024
11.570
28.758
7.753
(4.238)
402
(532)
56.738
613.988
127.434
107.014
30.811
10.109
Consolidation of the companies in proportion to final % of ownership.
Applying a proportionality criteria, Group Revenue amounted to EUR 635.3 million, up 3.5% on
2013. In Spain, the improved clinker exports in Cementos Molins Industrial and the increased
activity in the precast concrete industry, resulted in a 13.5% increase in revenue to EUR 193
million. In terms of the international Companies, the good performance in Mexico was offset by
the drop in sales in Argentina and a slump in the Uruguayan market.
On aggregate in 2014 the Group companies sold a combined volume of 12.9 million tonnes of
Portland cement and clinker, 5.2% more than in 2013, due mainly to the increase in the volume
sold in Mexico and exports of clinker from Spain.
A total of 3 million cubic meters of concrete were sold, down slightly on that recognised in 2013
due to the worsening in the performance in the Uruguayan and Argentinean markets.
Sales volumes recognised in the aggregates lines of business were in line with 2013, with the
increases in volumes achieved in Spain being offset by a decrease in Uruguay. Also, the
Group's precast concrete sales of EUR 62.7 million were up 32% on 2013, due mainly to the
impact of railway and civil engineering products.
EBITDA (defined as profit from operations before the depreciation and amortisation charge,
impairment losses and gains and losses on disposals of non-current asset) reached EUR 127.4
million up 19.1% on 2013; an improvement founded on the Spanish companies that indicate a
return to positive aggregate EBITDA levels, reversing the negative situation in prior years. The
results of the adjustments made to the manufacturing structures and cost-saving policies in prior
years were beginning to materialise in a market which is currently at an all-time low.
The international business contributed EBITDA of EUR 121.3 million, a 1.6% improvement on
2013. Despite the substantial increase in Mexico, EBITDA suffered as a result of the reduction
in the contribution of the Argentinean company and the slump in the Uruguayan market.
Net profit was EUR 30.8 million, an increase of EUR 20.7 million with respect to that obtained
in 2013.
At 31 December 2014, the Group's net borrowings amounted to EUR 194 million, a reduction
of EUR 60.8 million on 2013.
80
Research, development and innovation
The common denominator among the Molins Group companies was their focus on the R&D+i
policy as means of equipping themselves with the appropriate tools to set themselves apart and
be competitive in the face of the challenges posed by the various markets in the respective
countries.
In this context, the Spanish companies focused on improving and optimising the manufacturing
processes in concrete production, increasing the performance of the various concretes and
innovating and expanding the catalogue of products in the adhesive and precast cement area,
as well as providing customers with advice and assistance in the form of specific projects and
products tailored to meet their requirements.
Hence, Cementos Molins Industrial is in the process of developing a new calcium aluminate
clinker kiln, having completed the theoretical study and initiated pilot plant trials with satisfactory
results. PROMSA continued to improve the performance of the various concretes addressing
the specific needs of the works. PRECON concluded the alternative design projects for recycled
concrete sleepers and a new precast conduit for cables also made of recycled concrete. Also
work continued on the execution of the pre-design project of sleepers for dynamic transitions for
high-speed and goods rail tracks. PROPAMSA expanded its pavement lines with new products,
epoxy resin in adhesives for ceramics and concrete had achieved substantial improvements in
workability.
In Argentina, Cementos Avellaneda developed high-strength concretes, and Cementos Artigas,
in Uruguay, developed a water resistant adhesive cement.
Corporación Moctezuma in Mexico installed a concrete laboratory at the Tepetzingo cement
plant in order to assess the behaviour of the cement produced at the three plants and optimise
design.
In Bangladesh, Surma Cement made progress with the optimisation of its manufacturing
system, achieving substantial increases in the clinker production output.
Product quality and certification
The quality policy adopted by the Group companies consisted of maintaining and increasing the
certifications endorsing the quality of our products and processes to customers, as well as
maintaining and improving the performance of the products we offer the market.
Cementos Molins Industrial renewed its EC Seal and voluntary AENOR N certifications for all
the cements produced, as well as the AENOR's ISO 9001 Quality Management System
certification. PROMSA renewed its aggregates and mortars EC Seals at all its production plants.
PROPAMSA, achieved new certifications from the CSTB (French Scientific and Technical
Centre for Building) for both the adhesive and single-layer cement lines of products. PRECON
underwent a successful audit at the plants already holding the EC seal, renewed the ISO 9001
Quality Management System certification which includes all of its plants and performed the
follow-up of the Integrated Management System for Quality and the Environment (SIG) by
means of the corresponding annual internal and external audits.
Of note in the international area, was the work performed by Cementos Avellaneda and
Cementos Artigas in the field of technical services and quality, mainly, in the relation to the
dosing of concrete railway sleepers. With regard to cement, aggregates and concrete, they also
81
participated in the areas of regulation and dissemination and worked with the committees of the
Argentinean Portland Cement Institute (ICPA) on the preparation of a Concrete Paving Manual.
Corporación Moctezuma's Tepetzingo factory renewed all of its certificates: ISO 9001:2008,
OHSAS 18001:2007, ISO 14001:2004 (AENOR), product certification under ONNCCE
standards (Mexican National Agency for Standardisation and Certification of Construction and
Building Construction) for the cements being manufactured and laboratory accreditation from
the EMA (Mexican Accreditation Entity). The Cerritos plant implemented the ISO 9001:2008based management system and obtained product certification under ONNCCE standards for the
cements currently being manufactured. The Apazapan facilities maintained the product
certification under ONNCCE standards for the cements currently being manufactured. In terms
of the concrete division, ten of the plants hold ISO 9001:2008 certification and efforts were
made to implement this Quality Management System in the 24 plants in regions outside the
metropolitan area.
The environment
In 2015 the Group companies continued to implement policies which comprise our commitment
to environmental protection. Noteworthy in this regard is the Corporate Social Responsibility
project initiated by Cementos Molins Group with the professional advice of Institut Cerdà.
Noteworthy at Cementos Molins Industrial was the audit to renew the certification of the
environmental management system under the UNE-ISO 14001:2004 standard, the adaptation of
the environmental authorisation to the requirements pursuant to the new Directive on industrial
emissions (DIE) and the obtainment of approval to assess the energy recovery of shredded
scrap tyres. The Sustainability Committee meetings were continued as a channel of
communication between local councils, Autonomous Community Governments and resident
associations. PROMSA retained the certification under the ISO 14001 standard which applies to
the main manufacturing plants and the head offices. PRECON renewed the Environmental
Management System certificate pursuant to the ISO 14001 standard for the Venta de Baños,
Alcázar de San Juan and Vilanoviña plants.
In Argentina, Cementos Avellaneda continued with the development of alternative fuels as a
fundamental part of the company's environment policy. In relation to the projects associated with
the Clean Development Mechanism (CDM), the verification process of the project for the
substitution of fossil fuels with peanut shell biomass at San Luis plant (Argentina) was
completed. Furthermore, environmental management systems under the ISO 14001:2004
standard continued to be implemented and maintained. Events were organised with institutions
associated with climate change: in cooperation with the Argentinean Institute for Corporate
Social Responsibility (IARSE) the company adhered to the national campaign for the purpose of
preparing an action which is simple, specific and easy to apply.
Cementos Artigas, in Uruguay, maintained, audited and certified the environmental
management systems under the ISO 14001:2004 standard at the cement and concrete plants.
In relation to the projects associated with the Clean Development Mechanism (CDM), it should
be noted that the second verification process of the project for the substitution of fossil fuels with
rice hull biomass at the Minas plant by TÜV Rheinland continued. In relation to the use of
alternative fuels, in 2014 trials continued into the use of alternative fuels generated from local
industry waste.
In Mexico, Corporación Moctezuma also took many actions. At the Tepetzingo plant the Clean
Industry Environmental Diagnostic Report for the period from 2014-2016 was ACCEPTED. At
the Cerritos plant it should be noted that the Federal Prosecutor's Office for Environmental
Protection (PROFEPA) issued the approved Clean Industry Certificate to the Cementos
Moctezuma CRT Planta. At Apazapan the most noteworthy event of an environmental nature
was the Clean Industry certification process which is granted by PROFEPA.
82
Surma Cement, Bangladesh, obtained certification under the ISO 14001:2004 standard. Also a
pilot study project was launched to reduce the noise made by the conveyor belt which transports
raw material from our quarry in India to the plant located in Bangladesh. 1,000 trees of various
species were planted along the boundary road to enhance the environment in the surrounding
communities. The company located in India, LUMPL, was awarded first prize by the DirectorateGeneral of Mines and Safety (DGMS) and the Indian Bureau of Mines (IBM) both in the mining
safety event and the environment and conservation competition held in 2014. This was the third
consecutive year in which these prizes were awarded to the company.
Human Resources
Total number of employees per company at 31 December
2010
2011
2012
2013
2014
68
66
61
58
31
CEMENTOS MOLINS INDUSTRIAL
231
215
196
178
169
PROMSA GROUP
436
397
314
236
220
PRECON
715
644
448
567
469
PROPAMSA
137
130
120
113
114
0
0
0
0
37
15
14
13
13
13
1.602
1.466
1.152
1.165
1.053
656
700
713
702
720
212
224
259
249
239
1.133
1.140
1.187
1.148
1.105
482
475
487
519
519
581
CEMENTOS MOLINS, S.A.
CEMOLINS SERVICIOS COMPARTIDOS
OTHER
SPANISH COMPANIES
CEMENTOS AVELLANEDA
CEMENTOS ARTIGAS
CORPORACION MOCTEZUMA
SURMA
488
493
538
538
ITACAMBA CEMENTOS
0
0
0
0
68
PRECON LINYI
0
0
0
0
30
FOREIGN COMPANIES
2.971
3.032
3.184
3.156
3.262
TOTAL GROUP
4.573
4.498
4.336
4.321
4.315
SOTACIB GROUP
The number of employees relates in full to the headcount of each company.
At the end of December 2014, the headcount of the Cementos Molins Group was 4,315
employees, six less than the headcount at 31 December 2013.
The headcount of the international companies increased 3.4% to 3,262 employees due to the
incorporation of employees as a result of the start-up of activities in China and the acquisition of
Itacamba Cementos in Bolivia. Also noteworthy was the decrease of 43 employees in Mexico
and the increase of 43 employee in Tunisia.
On aggregate the headcount of the Spanish companies decreased by 112 employees (9.6%)
basically due to the effect of the decrease of 98 employees at PRECON, representing a 17%
decrease in this company's headcount.
Noteworthy was the incorporation of a Group administrative services company, Cemolins
Servicios Compartidos, made up of employees from the various Group companies in Spain.
As regards labour relations, no incidents arose in Spain although it should be noted that we are
in the final phase of the restructuring process initiated a few years earlier. Also at 31 December
83
the collective agreement of Cementos Molins Industrial expired and new negotiations will
commence shortly.
In March 2014 PRECON filed a collective redundancy procedure to adapt the workplaces
suffering fluctuations in work load. The collective procedure was entered into with the
agreement of the workers' representatives in relation to the entire headcount of the plants. In the
end only three workplaces were affected.
At the investees, the trend remained the same with the exception of Tunisia where negotiations,
characteristic of the process currently being experienced in this country, never end.
Our investee in Bangladesh carried out its first ever employee satisfaction survey and an action
plan to implement measures aimed at resolving the main demands expressed by the
employees.
We also underline that our investee Corporación Moctezuma was awarded the Great Place to
Work (GPTW) certificate, as one of the 100 best companies to work for in Mexico.
As in previous years, in relation to personnel training activities, mention must be made of those
carried out at PROMSA which included 96% of the workforce.
In relation to the reserve quota of the workforce for employees with disabilities, which in Spain
affects companies with more than 50 employees, 16 job positions were occupied. In addition
services amounting to more than EUR 120 thousand were contracted to special employment
centres.
Our involvement in projects to promote development and progress in the environments in which
our factories are located was sustained and in many cases increased in 2014.
In Mexico the anti-doping procedure, which includes both the protocol for the detection of
stimulant consumption and the measurement of alcohol intake, was reviewed, unified between
plants and updated in line with the actions under the "health and welfare" programme.
Mention should also be made of the activities complementary to the foregoing: communityorientated health fairs at the Apazapan, Cerritos and Tepetzingo plants; including vaccination
campaigns; anti-addiction workshops; a potential-blood-donor database; training days,
vaccination campaigns in community schools; as well as campaigns to promote physical activity
among the elderly in the aforementioned communities.
In addition, the concrete divisions of the three plants ran preventive health campaigns which
included flu vaccination.
In Argentina activities were carried out in relation to the dissemination of the company's
environmental management system which involved training and opening the plants up to the socalled stakeholders or interested parties: guided tours of the neighbouring schools to
commemorate World Environment Day, the Kitchen Garden Project in Represa del Carmen
(San Luis) and Palaeontology in Olavarría, etc.
In Uruguay the programme of visits to the cement and concrete plants by groups of college and
university students continued as a means of disseminating knowledge of the certified
management systems. Coinciding with World Environment Day, the Minas plant organised an
ecological cinema workshop for plant workers' children and the Sayago plant held an open day
to enable plant workers' children to visit and see the plant processes in action and enjoy
recreational activities.
In Bangladesh various initiatives were carried out in order to improve relations with employees
in the recruitment, training and organisational development processes. For the first time the
Company organised a campus at CUET, Chitagong's main engineering university and took part
in a campus organised by BDjobs, the main employee recruitment portal in Bangladesh.
84
Occupational risk prevention
Throughout 2014 each of the Group companies took the actions defined in their individual
preventive action plans. Overall accident figures were similar to those in 2013.
Although the accident rates of the international companies had improved, the Spanish
companies did not follow the trend achieved in recent years.
It is noteworthy that three of the Group companies reached the end of 2014 with no accidents
resulting in the loss of working days on the part of their employees. This indicates that a zero
accident rate is possible and that maintaining the organisation's commitment and encouraging
improvements to the safety systems will enable us to reverse this situation in the coming year.
For this purpose, plans and objectives were reinforced with new training and communication
activities, safety observations and inspections and reinforcement of healthy practices. These
actions will help those entities that have already achieved a zero accident rate to maintain it and
help the rest to continue reducing the number of occupational accidents suffered.
Frequency indexes
SPANISH COMPANIES
FOREIGN COMPANIES
TOTAL GROUP
2010
2011
2012
2013
2014
14,9
14,6
10,9
8,0
14,6
9,2
8,5
7,9
8,7
7,6
10,2
9,6
8,4
8,6
8,9
The Frequency Index shows the number of accidents with loss of working days per million hours worked (including own
employees and subcontractors).
DIRECTORS' REPORT BY GEOGRAPHIC SEGMENT
SPAIN
Economic recovery is becoming a reality if we consider the 1.4% growth observed in the
Spanish economy in 2014, which would be the first annual upturn in gross domestic product
(GDP) following six years without growth. The data published by Spain's National Statistics
Institute would confirm that the worst of the crisis is behind us and modest recovery has begun.
On this occasion, domestic consumption rather than exports has been the main driving force
behind this recovery. The recovery in public confidence is observed by the increase in domestic
demand and consumption following the downward trend in recent years.
The rate of year-on-year growth in the Spanish economy was 2% in the fourth quarter, up 0.4%
on the third quarter. This implies that the upturn in the economy, which began at the end of
2013, has gained momentum in recent months enabling growth of around 2% to be achieved,
the traditional minimum threshold for the creation of net employment in Spain.
85
The result of this five-year crisis in the performance of the GDP in Spain has been, inter alia, to
increase the unemployment rate to 23.7%, with almost 5.5 million people unemployed despite
the slight improvement in recent months.
In 2014 inflation in Spain was -1%; the first time in 50 years that inflation at year end was
negative, mainly due to cheaper fuel prices.
Cement consumption increased by 0.4% in 2014, representing the first annual increase since
2007. Despite this, cement consumption rates remained at all-time lows with a consumption
volume of 10.78 million tonnes, according to Oficemen, which was well below the consumption
of 56 million tonnes reported seven years ago. In this period the cement industry suffered a
drastic fall of 80%.
In Catalonia, the main area of Spanish Group's operations, cement consumption saw a
cumulative 10.7% decrease in 2014, to stand at 1.3 million tonnes, although the market began
to show signs of stability in the last quarter of the year. Cement consumption in Catalonia has
declined continuously since 2007, when it totalled 8 million tonnes, with the clinker and cement
export activities acting as a lifeline for the Industry.
Cementos Molins Industrial, S.A.U.
Cementos Molins Industrial, S.A.U.'s activity is based on the manufacture and sale of both
Portland and calcium aluminate cement. Its production plant is located in Sant Vicenç dels Horts
(Barcelona).
The slump in the Catalonian market further enhanced the orientation toward foreign markets
where it was intended to sell the entire unabsorbed surplus production from the domestic
market, with the result that figures for clinker exports reached an all-time high. At the same time
significant efforts continued to be made to reduce costs, seeking higher profitability and
business efficiency and increasing our competitiveness for greater access to international
markets without forgetting the domestic market, where, in the same way as in the last two years,
our own sales outperformed cement market sales in Catalonia.
Taking the year as a whole, Portland cement production was 14.7% down on that in 2013,
however, sales of clinker for export were up 15.4%. The outlook for 2015 is an increase in
supply of cement in the domestic market and foreign market consumption is expected to remain
stable (thanks to the envisaged increase in clinker production).
In 2014, revenue was EUR 71.2 million, representing a 5.6% increase year-on-year. It is
noteworthy that for the first time billings in the export market (EUR 37.5 million) exceeded those
in the domestic market (EUR 33,7 million) as a result of the substantial increase in clinker sales.
The variable product margins stabilised with respect to 2013. Prices remained in line with those
at 2013 year-end as a result of strong competition in the domestic market, while, despite the
slump in export prices (USD/t), prices in the foreign market benefited from the depreciation of
the euro, in particular in the last quarter of the year, to achieve final selling prices that were on
average slightly higher than those in 2013. With respect to costs we continued to achieve an
overall improvement; in particular mention should be made of the maintenance of a stable
electricity cost in recent years (despite upward pressures on prices due to the reduction in the
fourth quarter of 2014 in the interruptibility service compensation) and above all due to the
improvements in production performance and electricity consumption achieved by the cement
mills, increased productivity and improved heat consumption achieved by smelting furnaces and
maintenance of high fuel thermal substitution rates (28.3%). We also continued with the policy
seeking cost efficiency in the maintenance of our facilities, maintaining the cost reduction
achieved in this connection.
Consequently, our financial statements present an increase in EBITDA of 41.4% on the prior
year to EUR 10.4 million.
86
Investment in 2014 totalled EUR 0.75 million, and included most notably the replacement of the
X-Ray Fluorescence (XRF) equipment in the robotics laboratory, the installation of a second
dispenser for alternative fuel feed, an additional combustion gas cooling system prior to entering
the furnace filter and a new carbon burner in one of the calcium aluminate cement furnaces.
Thousands of euros
CMI, S.A.
2010
2011
2012
2013
2014
Sales
91.729
75.298
64.240
67.446
71.224
EBITDA
19.172
12.913
6.000
7.362
10.386
Promotora MediterráneaMediterránea-2, S.A. (PROMSA)
PROMSA manufactures and markets concrete, aggregates and mortar and has a pavement
application division and an environmental division, which engages in the recycling and recovery
of waste and manufacture of alternative fuels. The company carries on its business at its 37
facilities in Catalonia.
In 2014 the decrease in the Catalonian concrete market slowed as compared to prior years, with
a decrease of around 10%. The market appeared to bottom out in the second half of the year,
stabilising at its all-time low. Everything points towards 2014 being the industry's last bad year
and a period of recovery is expected to follow enabling modest growth, although this will depend
on the structural imbalances in the industry.
As in recent years, the Industry continued to progress with its restructuring process as supply
continues to exceed market requirements. In this context PROMSA continued with its policy to
actively reduce costs which led to the closure of certain production plants located in nonstrategic markets.
However, in 2014 PROMSA's business activities recovered in relation to 2013, maintaining an
active presence in the most relevant works in the market, in particular the works in relation to
the Sagrera high-speed train station (AVE) in Barcelona, the BEST container terminal in the port
of Barcelona and MANGO'S logistics centre in Lliçà del Vallés.
The PROMSA Group’s revenue totalled EUR 38.6 million in 2014, up 4.8% on 2013. The Group
had negative EBITDA of EUR 1.5 million in 2014, an improvement of EUR 7.4 million. The
recovery of prices and margins, as well as the reduction in fixed costs and overheads were the
main reasons for the improvement in results.
Investment in 2014 related mainly to the maintenance and improvement of environmental
conditions and safety conditions at the Company's facilities.
Throughout 2014 work on establishing our products was intensified with the active participation
of our technicians in conferences at universities and professional associations. Noteworthy was
the presentation of HALF® (light, self-compacting concrete with fibres) at the REHABEND 2014
Congress and at the Col legi d´Enginyers de Camins de Barcelona (College of Civil Road
Engineers of Barcelona).
Thousands of euros
PROMSA
Sales
EBITDA
2010
2011
2012
2013
2014
87.703
69.493
49.631
36.921
38.685
929
-3.618
-9.788
-8.946
-1.504
Consolidation of PROMSA Group companies in proportion to final percentage of ownership.
87
Prefabricaciones y Contratas, S.A.U. (PRECON)
PRECON's activity focuses on the customised design, production and sale of a wide range of
precast concrete products for general building construction, public works and railway lines. The
company centres its production on its eight plants located throughout Spain.
In 2014 the company's revenue amounted to EUR 62.8 million, up 32% on 2013, with uneven
performance by business line as a result of the performance in the construction industry.
Building construction in PRECON dropped 7% following a peak in 2013 due to the works for
IKEA in Alfafar (Valencia). Despite the ongoing impact of the economic crisis on this business
line, the company managed to consolidate its sales as a result of its policy of strengthening ties
with and/or attracting private customers initiated in 2012. Building construction includes most
notably the construction of Mango's new Logistics Centre in Lliçà d’ Amunt (Barcelona), the
works on the new office building for the Inditex - Pull & Bear Group in Narón (A Coruña), the
completion of the new logistics centre for the Inditex - Zara and Massimo Dutti Group in
Cabanillas del Campo (Guadalajara) and of the new IKEA store in Alfafar (Valencia), the cover
for the entrance to the Sagrera Station in Barcelona, the construction of an industrial building for
Tavil-Indebe in San Jaume de Llierca (Gerona) and the precast structure and façade for
Mercabarna's car park (Barcelona), the extension to Pasaia (Guipúzcoa) fish market , the
warehouse and various precast buildings for Iberdrola, as well as the construction or extension
of industrial warehouses in Vigo (Pontevedra), Tudela (Navarra) and Olivares (Seville).
Civil engineering sales increased by 13% with respect to 2013 due to the recovery in the
execution volume of public works in 2014, although within the general context of the measures
adopted to contain the budget deficit. The emblematic works include most notably the bridges
on the Unquera - Pendueles section of the A-8 motorway (Asturias), on the section of the la
Plata A-66 motorway between Benavente and Zamora, on the A-54 motorway for the section
from the Palas link road - Guntín link road (Lugo), on Corridor CG-2.2 Sarria - Monforte Treito II
(Lugo), on the La Encina - Torrelavega (Cantabria) section of the A-8 motorway and on the SE40 motorway for the section from the SE 649 Almensilla - Espartina (Seville) link road, as well
as the works for the Autovía A-15 Medinaceli - Radona (Soria) section of the A-15 motorway, for
the LO-20 motorway Recajo link road (La Rioja), for the Llevant MA-19 motorway at Molinar
(Palma de Mallorca), the viaducts of the AVE for the stretch from Orihuela - Colada de la Buena
Vida (Murcia), the viaduct over the river Arlanzón on the Villalbilla de Burgos and
Quintanadueñas section of the BU-30 Burgos bypass and the covers for Sabadell's
underground tunnel (Barcelona).
PRECON's railway product business increased by 171% with respect to 2013 due to the
strong boost in the call for tenders and award by ADIF of high-speed train network projects,
Mediterranean Corridor projects as well as the other railway lines with mixed gauge sleepers.
2014 was characterised by sales prices remaining at low levels. Offset of this effect was
possible due to improvements in processes and procurements, and the decrease in staff costs,
as a result of the temporary collective redundancy procedure applied in 2014, the gradual
implementation of measures to enhance work flexibility and sporadic workforce adjustments,
which contributed positively giving rise to an increase in operating margins.
As a result, EBITDA was EUR 2.1 million in 2014, following three years of negative EBITDA
values.
The important positive impact of the reduction in provisions for doubtful trade receivables is
noteworthy, due to the risk control measures implemented by the company, which resulted in
the recognition of an allowance for impairment of trade receivables of EUR 0.1 million in 2014,
compared to EUR 2.3 million 2013.
Investment in property, plant and equipment and intangible assets amounted to EUR 1.5 million
in 2014. They were earmarked mainly for improving the production capacity of the factories,
improving occupation risk prevention and product quality as well as R&D+i projects.
88
Thousands of euros
PRECON
Sales
2010
2011
2012
2013
2014
87.142
63.624
48.949
47.433
62.770
2.990
-3.236
-11.621
-5.661
2.082
EBITDA
Propamsa, S.A.U.
PROPAMSA is the Cementos Molins Group company specialising in the manufacture and sale
of industrial mortar through three main product lines: mortars or adhesive cement, single-layer
mortar and special mortars.
PROPAMSA business activities are centred on meeting the needs of the construction industry
dedicated both to new construction and restoration: ceramic installation, cladding of façades
and interiors, thermal and acoustic insulation of exteriors, sealing systems, floor levelling, repair
and strengthening of concrete structures and special mortar for anchorage and mountings.
To serve Spanish market customers PROPAMSA has five plants located in Barcelona,
Guadalajara, Seville, Pontevedra and Valencia, which produce the material distributed by the
distribution channels, the most noteworthy due to its importance being that for construction
material warehouses. It also has two distribution channels of its own, in Palma de Mallorca and
Vizcaya, which complete its rollout in the domestic market.
Since 2013 PROPAMSA serves customers in Southern France, being present in the Languedoc
- Roussillon region, and since September 2014 it is also present in Northern Portugal to serve
customers in that area.
In 2014 the Spanish market experienced a slight improvement, but continued to be one of the
markets with the lowest figures. New construction saw the completion of 45,000 housing units
and some improvement was observed in the restoration line. From the third quarter the upturn in
activity was more evident particularly in in the small works and renovations market.
PROPAMSA continued its commercial policy to seek value through differentiation with new
products and customer services, while maintaining its quality positioning. PROPAMSA's
participation in the Spanish market was maintained mainly due to strong support provided to
distributors with the technical and commercial management defending our products through onsite solutions and advice.
In the French market the commercial plan continued to be developed, resulting in an increase in
our market share and consolidation of customers, while commercial actions in other EU member
states were maintained with good results, especially in Portugal.
In terms of exports, PROPAMSA was present in North and Central African markets. It should be
noted that the volume of sales outside Spain represented 5% of the Company's total sales.
In the area of product promotion and presentation, the company made presentations at various
technical colleges, schools of architecture and associations. With regard to trade fairs, the
company participated in Cevisama, International Ceramics Trade Fair in Valencia and the
Swimming Pool Trade Fair, in addition to other trade fairs for professionals in the construction
industry at local level.
In accordance with the policy to promote the use of our products, more than 150 formative
events were held, which were attended by around 3,000 users and customers.
Investment in 2014 centred on enhanced processes aimed at reducing costs. Noteworthy in this
connection was the system for dustless addition of cement in the mixer at the Guadassuar plant.
89
As a result of the change in trend, which reached its turning point in the fourth quarter of 2013,
sales grew by 10% in 2014 to EUR 26.3 million. The aforementioned sales and the improved
mix of products sold led to a substantial improvement in results in 2014 achieving EBITDA of
EUR 1.1 million.
Thousands of euros
PROPAMSA
Sales
EBITDA
2010
2011
2012
2013
2014
34.056
30.031
25.203
23.949
26.336
2.773
1.883
782
154
1.098
ARGENTINA
Production stagnated in the Argentine economy in 2014 against a backdrop of high real inflation
and deterioration of the remaining macroeconomic variables.
In January 2014 a substantial adjustment was made to the exchange rate and was
subsequently followed by a policy for gradual management of the devaluation rate, resulting in a
year-on-year devaluation in the Argentine peso of 31% against the US dollar. The exchange
rate adjustment was accompanied by an increase in interest rates which appeared to indicate
the initiation of a stabilisation programme, however, events in recent months and the continuous
increase in public spending to all-time highs, resulted in even higher inflation rates, which offset
the improvement in competiveness achieved by the exchange rate adjustment. This was
particularly challenging for the export industry which was also hampered by the fall in the price
of commodities.
The most significant issue in 2014 was the ruling by the US Supreme Court, whereby the appeal
filed by the Argentinian state was not taken into consideration in the claim for payment of the
sovereign debt holdouts. As a result, and in an attempt to avoid triggering the Rights Upon
Future Offers (RUFO) clause that would benefit the holdout creditors, it defaulted on its debt
payment, which further exacerbated the economic cycle, with greater volatility in financial
markets and increased the prospect of devaluation.
Beyond the particular factors which affected specific sectors, activity was affected by domestic
demand, mainly to do the drop in real wages and the tightening of credit conditions.
From an external demand standpoint, the downturn in activity in Brazil, and to a lesser extent
China's slowdown, had an impact on business activities. In terms of supply, import restrictions
affected the production volumes of many industries.
According to data published by the Argentine National Institute of Statistics and Censuses
(INDEC), the provisional increase in GDP was a cumulative figure of 0.4% between January
and September 2014, with a change of around -0.8% with respect to 2013. In 2014 this figure is
expected to indicate a decrease in GDP of around 2% compared to 2013.
In relation to the construction industry, the official index, the Synthetic Indicator of Construction
Activity (ISAC), indicates that the construction industry as a whole accumulated a decrease of
1.2% over the first nine months of 2014 with respect to the same period in 2013.
In 2014 the internal wholesale price index (IPIM) grew by 28.3% compared to 2013, while the
official consumer price index (CPI) prepared by INDEC rose by 23.9%.
90
Cementos Avellaneda, S.A. is an Argentine company that manufactures and sells Portland
cement, mortar, lime, adhesive cement and concrete. It has two cement plants, one in
Olavarría, located in the province of Buenos Aires, and the other at 80 km from the city of San
Luis, in the centre of the country in the province of the same name. It also has six operational
concrete plants, all located in the province of Buenos Aires, in an area called Greater Buenos
Aires, surrounding the Federal Capital. Cementos Molins owns 51% of its shares and the other
shareholder is the Brazilian cement company Votorantim.
The Argentine cement market achieved sales of 11.3 million tonnes in 2014, representing a
decrease of 3.5% on the all-time high in 2013. Per capita consumption in 2014 fell 5.3%
compared to 2013, to 267 kg, per inhabitant.
Also, the estimated market for concrete based on the bulk shipping of cement to the concrete
works in the area of the Autonomous City of Buenos Aires and Greater Buenos Aires, saw a
year-on-year decrease of 13.8% to reach a volume of 2.8 million cubic metres.
In relation to commercial management, it should be noted that 2014 saw the sixth consecutive
year of growth in market share, the company having been the provider of the most important
road works executed in 2014.
Profits decreased with respect to 2013. EBITDA was EUR 41.2 million, representing a 19.6%
decrease with respect to 2013, mainly due to the decrease in sales volume, the fall in the
average exchange rate for the Argentine peso against the euro of approximately 32% compared
to 2013 and the increased operating expenses of the new quarry.
Investment in 2014 centred basically on growth, most notably on the extension of the lime plant,
the roof of the blending bed and completion of the Krupp crusher's relocation to a site nearer to
the quarry under operation, which also enhances stone carriage efficiency for improved
exploitation of the quarry.
Thousands of euros
C. AVELLANEDA
2010
2011
2012
2013
2014
144.907
179.004
195.107
163.738
184.414
91.446
115.387
130.076
112.371
125.041
189.233
233.864
259.052
284.620
251.132
EBITDA
52.096
49.334
60.029
51.284
41.215
Net profit
29.601
27.420
33.635
30.690
26.466
Assets
Shareholders' equity
Sales
URUGUAY
According to private sources, it is estimated that in 2014 GDP will grow by 3.2% within the
framework of a widespread slowdown at industry level and in a more adverse external
environment.
According to the information published by the Uruguayan Central Bank, construction GDP
reported a decrease of around 3.2% in the third quarter of 2014 with respect to the same period
in 2013. According to private sources, estimates indicate that the year-on-year decrease could
reach 4.3% in 2014.
91
The consumer price index (CPI) rose by 8.3% in 2014, while the wholesale price index (IPPN)
increased by 10.6%.
At 31 December 2014, the Uruguayan peso exchange rate had depreciated by 12% to UYP
24.3/USD 1 compared to 31 December 2013.
Cementos Artigas, S.A.
Cementos Artigas, S.A. is a company based in Uruguay. It has a clinker manufacturing plant in
Minas, a mill in Sayago and eight concrete production plants, and centres its activity on the
production and sale of Portland cement, mortar, concrete and aggregates. Cementos Molins
owns 49% of its shares and the majority shareholder is the Brazilian cement company
Votorantim.
The cement market in Uruguay reached 820 thousand tonnes in 2014, down around 3.8% on
2013, while the concrete market suffered a 1.2% decrease to 604 thousand cubic metres, as a
result of the completion of the construction work on the Conchillas pulp mill.
Overall cement dispatches were in line with 2013 while concrete dispatches decreased 15.9%
largely influenced by the completion of the Montes del Plata project in Conchillas.
Measured profits decreased with respect to 2013. EBITDA was EUR 23.9 million, indicating a
24.4% decrease compared to 2013, largely due to the decrease in volume of clinker sales and
to the market share lost in the cement mixing business.
Investment in 2014 focused mainly on growth, most notably on the performance of the last
phase of the facilities for the use of sawdust as biomass, the start of the installation of a new
mortar plant and the replacement of the drive rim and pinion at the company's sole cement
grinding facility.
Thousands of euros
C. ARTIGAS
2010
2011
2012
2013
2014
Assets
64.151
85.007
90.437
80.964
77.658
52.525
71.141
73.630
62.534
58.573
Sales
64.038
85.977
97.423
104.299
88.230
EBITDA
17.949
22.647
26.237
31.595
23.881
Net profit
15.947
19.829
18.041
26.999
20.134
MEXICO
In the midst of a weak economy and still suffering the impact of the new taxes implemented in
the tax reform, Mexico yet again saw a year of limited growth despite the structural reforms.
Private investment showed little movement, reflecting the slow adjustment to the tax reforms; in
turn, consumption and investment remained low throughout 2014. The delay in the approval of
secondary legislation to the energy and telecommunications reforms postponed the entry of
foreign direct investment in productive investments and, for that matter, greater economic
growth.
92
Exports increased in the automotive industry, although fuel sales (main export commodity) fell
due to the drop in production, in addition to the fall international crude oil prices in the fourth
quarter of 2014.
In relation to public spending, despite the announcement of the National Infrastructure Plan
2014-2018, important tender processes are yet to be called and their implementation will take
several months and, consequently, their impact will not be seen until the end of 2015.
The uncertainty generated by social developments and public security issues in Mexico during
the year also affected economic activity.
In this context, it is estimated that in 2014 GDP will grow by 2.2% with inflation closing at 4.1%.
In June the construction industry halted the negative trend followed since the end of 2012,
reporting positive figures in the second half of year and 2% growth is estimated in this industry.
The Mexican peso reached its lowest point in 30 months on 2 December, sparking its free fall
due to breaking the 14 currency units per dollar barrier. The currency, together with the rest of
the exchange market, continued to make losses as a result of further speculation in relation to
the US Federal Reserve System (FED), monetary policy announcements by the European
Central Bank and the Bank of Mexico, and the decrease in crude oil prices.
Corporación Moctezuma S.A.B. de C.V.
Located in Mexico, the company engages in the production and sale of cement, concrete and
mortar. Cementos Molins owns 33% of its shares and control is shared with the Italian cement
company Buzzi Unicem.
Company revenue increased by 12.9% to EUR 529 million, while EBITDA amounted to EUR
188 million, up 22.2% on 2013, giving rise to net profit of EUR 115 million up 33.9% on 2013.
In 2014 the Cement business line was characterised by the complicated ongoing scenario in
the industry in the first half of the year due to public-spending polices and the tax reform,
together with the social and political unrest in Mexico which reduced purchasing power and
eroded consumer confidence. Towards the second half of the year, signs of recovery were seen
in some of the macroeconomic indicators and this recovery was reflected, albeit still very slow,
in industries such as the construction industry which permitted an improvement in our results
with respect to 2013.
As regards prices, annualised inflation at 2014 year-end was 4% although given the strong
competition in our market cement and concrete prices could not be increased to this level.
Due to the adverse economic situation, since 2012 the Company has adopted a series of
measures aimed at reducing cost structure and optimising working capital. The company also
strengthened its customer relations with a commitment to long-term cooperation and launched a
new image for its cement sacks. In addition, a significant investment was made in the petcoke
warehouse in Veracruz, in operation since September 2014 and which supports the logistics of
the operations in south east Mexico.
The Concrete business line in 2014 saw the continuation of the restructuring process initiated in
2013 to streamline our geographical presence by focusing on the most strategic locations with
the plants that add the greatest value to operations.
Steps are taken continuously to improve products. The quality area was restructured, placing
greater emphasis on preventive actions such as raw material analysis, with the resulting
improvement in our product. The company is also implementing new production processes
aimed at improving our aggregates.
In 2014 in the central plant located in Mexico City, a building was inaugurated which houses a
new quality laboratory equipped with cutting-edge equipment.
In 2014 we supplied works of great importance in terms of the country's development, including
most notably: the Guadalajara bypass, the Project Ethylene XXI petrochemical facility,
extension to the port of Veracruz, the Altamira port in the state of Tamaulipas, modernisation of
93
the Manzanillo port in the state of Colima, and the construction of a series of emblematic
skyscrapers on Avenida Paseo de la Reforma in Mexico City.
As regards investment, in the cement area mention should be made of the start of construction
work on the second line at the Apazapan plant, which will make it possible to double the plant's
current output, for an estimated investment of USD 190 million. When completed, we will have
two production lines at each of the three plants.
Other noteworthy investments included the completion of the petcoke warehouse in Veracruz,
the construction of a limestone screening facility and the acquisition of land for access to
Apazapan's clay quarry and other land in Tepetzingo.
Noteworthy in the concrete business line was the acquisition of land in Naucalpan, the
acquisition of 20 concrete mixers, the acquisition of machinery and civil engineering work for the
La Plancha aggregates plant and an aggregates production line in Apazapan.
In relation to the company CyM Infraestructura, for the construction of the Project Guadalajara
Beltway motorway, supply remained slow due to difficulties in the release of sections, transport
syndicates and aggregate availability. The second half of the year saw the renegotiation of the
supply agreement which, together with the envisaged upturn in activity, will permit an
improvement in results.
Thousands of euros
MOCTEZUMA
C. MOCTEZUMA
2010
2011
2012
2013
2014
Assets
676.336
649.656
618.168
570.477
597.534
557.057
536.648
498.041
455.706
473.847
Sales
428.148
471.640
535.466
468.727
529.029
EBITDA
154.524
163.307
193.699
153.834
188.001
85.268
93.799
120.934
85.918
114.985
Net profit
BANGLADESH
2014 was a general election year in 2014. Long-awaited elections were held which, contrary to
predictions, were conducted without incident. As a result, in general terms the economy
performed well with exceptional growth in certain industries such as the construction materials
industry.
Bangladesh continues to be the world's second largest manufacturer for the textile industry and
80% of exports are associated with this industry.
GDP grew by 6.2%, in line with the last three years. Construction industry GDP, however, grew
by 8.6%, up six decimal points on 2013.
Inflation was 7.4%, down on the 10.6% recorded in 2012, but in line with that in 2013.
Central bank reserves exceeded USD 22 billion at the end of August, representing more than
six months of the country's total imports, thanks in part to the continued increase in currency
remittances from overseas workers.
Bangladeshi taka/US dollar exchange rate was stable although it appreciated against the euro
due partially to the strength of the USD dollar against the EUR. In this connection 2014 closed
with a rate of 94.6 EUR/BDT compared to 107.2 EUR/BDT for 2013.
94
Lafarge Surma Cement Limited
Based in Bangladesh, Surma Cement engages in the manufacture and sale of cement. The
factory is located in Bangladesh and the limestone quarry in India, connected by a conveyor
belt. Cementos Molins and Lafarge jointly own 60% of the share capital, while the rest is owned
almost entirely by local shareholders. The company is listed on the Dhaka and Chittagong stock
exchanges.
The cement market grew by 17.3% compared to 2013. Economic stability combined with the
fact that there were numerous episodes of instability in 2013 resulted in a year of double-digit
market growth and the growth in all the cement-consuming segments. The strong market growth
was followed aggressively by the main local mills such as Shah, Bashundara, Seven Circle and
Crown, some of which also made investments to increase the capacity of their facilities thereby
enhancing their ability to capture the market growth. On the other hand, the main mutlinational
companies were unable to follow the rhythm of growth shown by the market. Surma Cement
managed to position itself between local mills and the large multinationals.
Sales grew by 3.5% compared to 2013. The investment in marketing and communication
bolstering the brand image, specific trade marketing activities such as promotions both at
distributor and retailer level, and the dedication of the sales force contributed in part to this
growth.
However, all these improvements were also possible thanks to the outstanding performance of
our production facilities, which broke the annual production records achieved in both the cement
and clinker business lines since their start-up.
The priority to continue following the market growth in terms of volume put a lot of pressure on
prices which remained stable and even decreased slightly. This gave rise to a modest 3.3%
decrease in EBITDA to EUR 42.7 million although this was thanks, inter alia, to the reduction in
net borrowings, which implied a reduction the financial burden. This decrease was offset at net
profit level which amounted to EUR 27.5 million, up 12.1% on 2013.
Thousands of euros
SURMA CEMENT
2010
2011
2012
2013
2014
194.441
189.484
176.041
177.452
211.287
37.914
69.812
76.272
99.690
136.311
Sales
61.421
58.485
100.694
109.136
112.962
EBITDA
-6.075
3.679
32.730
44.144
42.695
-18.177
-18.939
5.607
24.524
27.500
Assets
Net profit/loss
TUNISIA
The political situation in Tunisia in 2014 was characterised by the constitution creation process.
On 26 January 2014, the constitution was signed, marking the culmination of a process of
political consensus which will enable it to establish rights and obligations within a democratic
political framework. This historic milestone in a nation of Islamic influence will determine the
countries near future.
Legislative elections were held on 26 October, resulting in the democratic handover as a result
of a political rotation in the Tunisian Government.
95
In November and December presidential elections were held with the election of a new
president of the Republic. To some extent, this interim political situation may condition the
country's economic development. Inflation was around 5% at the end of 2014 and
unemployment remained at 15%.
GDP grew by 2.3% while grey cement demand stagnated.
Given the structural deficits suffered by Tunisia in terms of energy and external accounts, the
Government decided to implement a new energy (thermal and electricity) pricing policy aimed at
passing on the changes in costs since January 2014 to the price. This political decision
provoked uneven increases in our production costs in our two companies in Tunisia.
Société Tuniso Andalouse de Ciment Blanc "SOTACIB"
The Cementos Molins Group has operated in Tunisia since 2007 through SOTACIB which has a
factory located in the city of Feriana, close to the border with Algeria, which engages in the
production and sale of white cement.
SOTACIB is a company of around 350 employees that sells its products in the region (Tunisia,
Algeria and Libya) and also exports to Europe and the rest of Africa.
The political decision taken to progressively increase electricity and gas prices gave rise to
increases in production costs. The Ferina plant does not have fuel grinding facilities thus giving
rise to the need to continue consuming gas until the related investment is made. This process of
investment definition and provider selection was carried out in 2014. The project will be fulfilled
this year and is expected to come into operation by the end of 2015.
Selling prices in the domestic market continued to be controlled by the Ministry of Trade and the
high proportion of the company's activity earmarked for export should also be taken into
consideration, despite the political turmoil and security problems experienced in Libya and the
decline in the French market in 2014. Our sales fell in Algeria due to strong competition from a
local manufacturer, further exacerbated by the customs duty levied on imports of white cement.
These circumstances led the company to recognise EBITDA of EUR 2.2 million, down 33.6%
compared to 2013.
Lastly, the TND 35 million capital increase performed at Sotacib in 2014 is noteworthy.
Thousands of euros
SOTACIB
2010
2011
2012
2013
2014
107.990
99.696
101.570
86.021
83.078
39.798
29.987
32.954
23.826
34.280
Sales
35.586
31.156
33.238
39.001
35.958
5.554
1.115
3.181
3.252
2.159
-3.106
-7.847
-163
-5.942
-4.875
Assets
EBITDA
Net profit/loss
SOTACIB KAIROUAN
SOTACIB Kairouan has a grey cement factory in the municipality of Jebel Rouissat (Kairouan,
Tunisia) that has been in operation since the beginning of 2012. The factory has 170
employees.
96
The application of the new electricity tariff represented a highly substantial increase in the
company's costs. To counterbalance this, the government approved the deregulation of cement
selling price setting for the Tunisian market from 1 July 2014 onwards.
As a result EBITDA reached EUR 18.9 million, representing an increase of 6.4% compared to
2013.
Mention should be made of the strong competition from the various manufacturers in the second
half of the year given the surplus output in relation to demand, as well as the start-up of the
Carthage Cement plants and the extension at Ciments de Bizerte.
This surplus output should enable an increase in Tunisia's volume of exports to the adjacent
markets of Algeria and Libya.
Noteworthy at our plant was the start-up of the new palletising and baling system enabling us to
improve our dispatch service and to offer packaging in line with our customers' needs.
Thousands of euros
SOTACIB KAIROUAN
Assets
Sales
EBITDA
Net profit/loss
2011
2012
2013
2014
209.088
220.938
208.557
198.234
90.187
84.728
76.542
77.087
0
36.506
51.199
52.673
-1.390
13.542
17.798
18.940
-538
380
481
776
CHINA
China is the world's leading exporter and holds the greatest foreign reserve assets in the world.
The global recession in 2009 stalled China's previously continuous rate of growth and
demonstrated the limitations of basically export-focused growth. As a result of the global
economic downturn and the fall in trade, China's growth slowed to 7.6% in 2013, its lowest level
since the 1990s. Growth was expected to remain stable around 7.5% in 2014 thanks to strong
internal demand.
To boost the economy, the Chinese Government approved tax exemptions and invested in
infrastructure. In 2013 a new free trade area was created east of Shanghai, where the activities
of foreign companies were authorised albeit under certain restrictions. Borrowing regulations
were removed although interest rates are still being set by the state.
At the end of 2013 the Communist Party Central Committee (PCC) announced its programme of
reforms until 2020 which contemplates political advances such as the closure of centres of
forced labour; giving greater independence to Courts of Justice at local level; an easing of the
single child policy; the "hukou" reform governing citizens' mobility and access to public services;
the reform of access to landed property to facilitate farmers cession of agricultural land;
deregulation of interest rates and progressive acceptance of financial operations; and the reform
of state-owned companies
The highly diversified Chinese economy is dominated by the manufacturing and agricultural
industries. The manufacturing and construction industries account for almost half of China's
GDP. China has been one of the favourite destinations for the transfer of global manufacturing
units due to its low labour cost, although this on the rise. The economic crisis basically
coincided with the development of a competitive manufacturing industry focused on exports.
97
More than half of China's exports are made by companies with foreign capital. The state
industry still contributed approximately 40% of GDP.
Estimated inflation for 2014 remained stable at 2.4%, in line with prior years. As regards the
currency, a marked appreciation of almost 22% of the Renminbi against the euro was seen,
partially as a result of the devaluation of the euro against the US dollar.
PRECON (Linyi) CONSTRUCTION Co. Ltd.
Precon (Linyi) Construction Co. Ltd. was incorporated in mid-2011 in the People's Republic of
China (PRC) and began the process of obtaining land and the construction of its first precast
concrete products manufacturing plant for the construction industry.
The company is owned by PRECON (Spain), which holds 80%, and the other 20% is held by
Spanish shareholders established in China, ISH.
The facilities are located in Linyi, in Shandong Province. Linyi has a population of around 11
million and the province close to 100 million. It is located on the Beijing-Shanghai axis, almost
equidistant (600 km) between the two cities and around 100 km from the eastern seaboard.
At the beginning of 2014 the company was completing the initial phase of its plant, adapting the
precast concrete products plant to climatic conditions and extending the industrial building in
Feralla by around 600 square metres.
Concurrently, a more active market survey was initiated. It was concluded that precast concrete
products were largely underdeveloped in China and that this offered an attractive solution with
obvious advantages. Many contacts were made and work meetings have been held with
engineering, construction and industrial companies to study potential projects.
However, given the innovative nature of the precast concrete systems it is envisaged that their
uptake by the market will be slow and complicated.
In May a preliminary agreement was reached with the first customer, consisting of the first
phase of a large project for two buildings with a total of around 18,000 square metres. In July
the agreement was signed for a present value of around EUR 2 million. In accordance with the
agreement, the established advance will be paid and production work will commence once it
has been formally approved by the related authorities.
The technical authorities concerned are very interested in monitoring the works, supervising our
solutions. At the end of 2014 approval of specific innovative aspects with which local technicians
were unfamiliar was still pending in order to finalise the project.
BOLIVIA
The Bolivian economy is focused mainly on the extraction and export of raw materials. In recent
years, average GDP growth was 4.7%, achieving a fiscal surplus (for the first time since 1940)
and a current account surplus due mainly to policies for the nationalisation of natural resources
(hydrocarbons and minerals) and other industries such as telecommunications and energy,
which enabled an important increase in government revenue and, therefore, important public
spending (four times higher in 2010 than prior to 2006). A slight increase in private investment
was also achieved.
Inflation at 2014 year-end was 5.2% and the year-end exchange rate was BOB 6.9/USD.
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Itacamba Cemento, S.A.
Itacamba Cemento, S.A. is a company based in Bolivia. Its registered office is in located in
Santa Cruz de la Sierra, and its company object is to supply Bolivia's largest cement
consumption market.
It has a cement mill in Puerto Suarez, on the border with Brazil, 580 km from Santa Cruz.
Cementos Molins owns 49% of the shares of Yacuces, S.L. (majority shareholder of Itacamba
Cementos) and the majority shareholder is the Brazilian cement company Votorantim.
The Bolivian cement market amounted to 3.5 million tonnes in 2014, up 8.7% on 2013. It should
be noted that the market in the Santa Cruz region represents approximately a third of Bolivia's
total market.
Overall cement dispatches were in line with those in 2013, since they are limited by the mill's
output of 200 thousand tonnes per year. Economic results indicated sales of EUR 14.8 million
and EBITDA amounted to EUR 2.4 million.
In 2014 preliminary investment commenced in the YACUCES project, which consisted of the
construction of a full-scale plant with a gas-fuelled clinker kiln with an output of 2,000
tonnes/day, which will have its own electricity power plant. Operations are expected to
commence in 2017.
Outlook for the Group
At Spanish level a slight recovery is envisaged in results in a market we consider has bottomed
out and will slowly begin to recover from its all-time lows.
At international level, positive results are expected to be maintained in those markets and
business activities in which we operate. The changes in exchange rates will ultimately affect
performance and profit.
Average payment period to suppliers
At 2014 year-end the Group recognised trade payables to suppliers of goods and services
within the established maximum payment period to suppliers of 65 days.
The various Group companies continued to make efforts to adapt the payment periods to their
suppliers and align them with the collection periods from its customers, principally in the precast
and concrete business lines, to the period established by current legislation, which is 30 days,
unless otherwise agreed by the parties, who may extend the payment period to a maximum of
60 days.
However, the Group offers reverse factoring agreements to most of its suppliers. This financial
tool allows suppliers to obtain cash without using their own resources, since the credit facilities
are provided by the Molins Group under more favourable terms and conditions than those
generally offered by the market. In accordance with the Group's management information, these
balances are discounted by its suppliers in a shorter period than that established by the
aforementioned legislation.
Events after the reporting period
No further significant events that might have a material impact on the Group's equity have taken
place since 31 December 2014.
99
Main business risks
The Cementos Molins Group carries on its activities in various businesses, all related to cement,
cement by-products and construction materials, and in highly diverse geographical areas, both
in Spain and abroad.
These circumstances give rise to certain risks such as:
-
industry risks, with particular consideration of environment and occupational risk
prevention,
operating risks inherent to the market in which the Group operates,
risks arising from country-specific economic backdrops, affected by exchange rates,
regulatory risks affected by the various tax, industry and environmental regulations.
This consolidated directors’ report indicates the impacts, if any, of these risks on 2014 earnings.
Treasury
Treasury share transactions
At the beginning of 2014 Cementos Molins Industrial, S.A.U. held 2,448,502 shares of the
Parent. 215,683 additional treasury shares were purchased in 2014 for EUR 1.6 million and
1,793 shares were sold for EUR 13 thousand.
Capital
Capital structure
Cementos Molins' share capital amounts to nineteen million eight hundred and thirty-four
thousand seven hundred and one euros (EUR 19,834,701), represented by 66,115,670 ordinary
shares of a single series, of thirty eurocents (EUR 0.30) par value each. The share capital has
been fully subscribed and paid.
The most recent modification was made on 30 June 2005.
Restrictions on the transferability of the shares
There are no restrictions on the transferability of the shares.
Significant direct
direct and indirect ownership interests
Owner
% of ownership
Shares
Noumea, S.A.
Cartera de Inversiones C.M., S.A.
Otinix, S.A.
21,213,595
15,878,000
11,160,000
10,578,175
Restrictions on voting rights
There are no restrictions on voting rights.
100
32.086%
24.015%
16.880%
15.999%
Par
value (euros)
6,364,079
4,763,400
3,348,000
3,173,453
%
Shareholder agreements
On 20 January 2011, the Group notified the Spanish National Securities Market Commission
(CNMV) of the “Vote and Share Syndication Agreement" entered into on 15 January 2011 by
the syndicated shareholders of Cementos Molins, S.A., which supersedes the previous
agreement entered into on 15 December 2003. A copy of the full agreement entered into is
attached hereto. This Agreement was filed at the Barcelona Mercantile Registry with entry no.
272.
The significant shareholders involved in the agreement and their respective ownership interest
therein is as follows:
Parties involved in shareholder
agreement
Cartera de Inversiones C.M., S.A.
% of share capital
affected
24.015
Noumea, S.A.
23.358
16.880
Otinix, S.A.
15.999
Rules governing the appointment and replacement of
members of the Board of Directors and the amendment of the
Company’s bylaws
The shareholders at the Annual General Meeting or, where appropriate, the Board of Directors
shall have the power to designate the members of the Board of Directors in conformity with the
Spanish Limited Liability Companies Law and the bylaws.
The directors need not be shareholders. To cover vacancies arising during the period of
appointment of directors, the Board of Directors may designate those persons to occupy such
vacancies until the following General Meeting.
The Board of Directors currently has twelve members. Directors are appointed by the shareholders
at the General Meeting for a maximum of four years, although they may be re-elected on an
indefinite basis for periods of up to four years each, except for the directors considered to be
independent, who shall not remain in their position as independent directors for a continuous period
of more than twelve years.
The proposals to appoint or re-elect directors that are submitted to the shareholders at the General
Meeting by the Board of Directors, and the appointments through co-optation, shall be approved by
the Board of Directors
(i)
(ii)
upon the proposal of the Nomination and Remuneration Committee in the case of
independent directors, or
following a report of the Nomination and Remuneration Committee in the case of the
other directors.
Pursuant to Article 529. decies.5 of the Spanish Limited Liability Companies Law, proposals must
be accompanied by a supporting report from the board that assesses the competence, experience
and merits of the proposed candidates, which will be attached to the minutes of the shareholders’
meeting or the board meeting.
At all times, the shareholders at the General Meeting may resolve to remove the directors when
deemed appropriate for the interests of the Company. Persons declared incompatible to the extent
of and in accordance with the conditions established in the Law regarding incompatibilities, and any
other that amends or expands on it, are prohibited from occupying positions at the Company and,
as the case may be, discharging them.
101
The directors shall cease to sit on the Board when the period for which they were appointed
elapses, and in all other cases provided for by law, the bylaws or the Board regulations.
Any amendment to the bylaws must be resolved by the shareholders at the General Meeting and
shall meet the requirements of the Spanish Limited Liability Companies Law.
Powers of the
the members of the Board of Directors
Article 24 of the bylaws states that the Board of Directors, which must act as a collective body in
representation of the Company, may undertake and carry out any and all actions included in the
company object and exercise such powers that are not expressly reserved by law or by the
bylaws for the shareholders at the General Meeting. The same article states that the
presentation of accounts and balances to the General Meeting or the powers granted by the
shareholders to the Board of Directors may not be delegated, unless expressly authorised by
the former. Nor may the powers indicated in Article 249 bis of Spanish Limited Liability
Companies Law be delegated.
Of the members of the Board of Directors, only the Chief Executive Officer has been conferred
powers to act individually, on the basis of the powers listed at the time of his appointment.
Significant agreements that may be amended or terminated in
the event of a change in control
The Company has entered into and deposited four shareholders agreements at the CNMV for
public knowledge.
The first, relating to the subsidiary Fresit, B.V. (the Netherlands) entered into on 15 May 2009
by Cementos Molins, S.A. and Cemolins Internacional, S.L.U., of the one part, and Buzzi
Unicem, SpA and Buzzi Unicem Internacional, S.à.r.l., of the other part.
The second, relating to Cementos Avellaneda, S.A. (Argentina), entered into on 18 December
2012, by Cementos Molins, S.A., Cemolins Internacional, S.L.U. and Minus Inversora, S.A., of
the one part, and the Votorantim Group, of the other part.
The third, relating to Cementos Artigas, S.A. (Uruguay), entered into on 18 December 2012, by
Cementos Molins, S.A. and Cemolins Internacional, S.L.U., of the one part, and the Votorantim
Group, of the other part.
The fourth, relating to Yacuces, S.L. and its subsidiaries in Bolivia, entered into on 31 July 2014,
by Cementos Molins, S.A. and Cemolins Internacional, S.L.U., of the one part, and Votorantim
Cimentos EAA Inversiones, S.L.U. and Votorantim Cimentos, S.A., of the other part.
The four agreements envisage that the change of control by either of the parties grants the
other party a pre-emption right on the ownership interest held by the party which modifies its
control of the companies governed by the agreement.
Agreements between the Company, the directors, executives
or employees that provide for termination benefits upon
termination of the relationship with the Company as the result
of a takeover bid
Three agreements entered into by the Company and three executives envisage a termination
benefit equal to 45 days’ salary (based on the gross annual remuneration) per year of service,
up to a maximum of 42 months’ monetary remuneration at the date of termination, as provided
for in Article 10.3-d of Royal Decree 1382/1985, i.e. in the event of succession of the Company
102
or a significant change in the ownership thereof that results in a renewal of its governing bodies
or the substance and approach of its main business.
Annual Corporate
Corporate Governance Report
The Annual Corporate Governance Report is attached as an Appendix to this 2014
Consolidated Directors' Report of the Cementos Molins Group and is an integral part hereof.
103
APPENDIX I
ANNUAL CORPORATE GOVERNANCE REPORT
FOR LISTED COMPANIES
ISSUER'S PARTICULARS
REPORTING DATE OF YEAR IN QUESTION
EMPLOYER IDENTIFICATION NUMBER
31/12/14
A-08017535
COMPANY NAME
CEMENTOS MOLINS, S.A.
REGISTERED OFFICE
CTRA. NAL. 340, NUMS 2 AL 38, KM. 1242,3 (SANT VICENÇ DELS HORTS)
BARCELONA
MODEL ANNUAL CORPORATE GOVERNANCE REPORT
FOR LISTED COMPANIES
A OWNERSHIP STRUCTURE
A.1 Fill in the following table on the company's share capital:
Date of last
change
Share capital (EUR)
30/06/05
Number of
voting rights
Number of shares
19,834,701.00
66,115,670
66,115,670
Indicate whether there are different classes of shares carrying different rights:
Yes
No ⌧
A.2 List the direct and indirect holders of significant ownership interests in the company at year-end, excluding
directors:
Name or company name of shareholder
Number
of direct
voting rights
JOAQUIN Mª MOLINS GIL
OTINIX, S.A.
Name or company name of holder
of indirect ownership interest
JOAQUIN Mª MOLINS GIL
Number
of indirect
voting rights
% of total
voting
rights
0
15,878,000
24.02%
10,578,175
0
16.00%
Through: name or company name of direct
holder of ownership interest
Number
of indirect
voting rights
CARTERA DE INVERSIONES C.M., S.A.
15,878,000
Detail the most significant changes in the shareholder structure during the year:
A.3 Fill in the following tables on the members of the company's Board of Directors who own voting shares in
the company:
Name or company name of director
MIGUEL DEL CAMPO RODRIGUEZ
Number
of direct
voting rights
Number
of indirect
voting rights
% of total
voting
rights
1,000
0
0.00%
CASIMIRO MOLINS RIBOT
41,350
0
0.06%
JUAN MOLINS AMAT
47,921
0
0.07%
500
0
0.00%
70
0
0.00%
24,910
0
0.04%
1,000
0
0.00%
FRANCISCO JAVIER FERÁNDEZ BESCÓS
JOAQUIM MOLINS AMAT
JOAQUIN Mª MOLINS LOPEZ-RODO
EMILIO GUTIERREZ FERNANDEZ DE LIENCRES
INVERSORA PEDRALBES, S.A.
11,160,000
0
16.88%
15,878,000
0
24.02%
NOUMEA, S.A.
21,213,595
0
32.09%
0
0.00%
FORO FAMILIAR MOLINS, S.L.
% of total voting power held by the Board of Directors
377
73.17%
2
Fill in the following tables on the members of the company's Board of Directors who hold rights over shares
in the company:
A.4 Indicate, as appropriate, any relationships of a family, commercial, contractual or corporate nature existing
between the holders of significant ownership interests, insofar as they are known to the company, unless they
have scant relevance or arise from the ordinary course of business:
A.5 Indicate, as appropriate, any relationships of a commercial, contractual or corporate nature existing between
the holders of significant ownership interests and the company and/or the group, unless they have scant
relevance or arise from the ordinary course of business:
A.6 Indicate whether the company has been notified of any shareholders agreements that affect it in accordance
with Arts. 530 and 531 of the Spanish Limited Liability Companies Law. If so, provide a brief description and
list the shareholders that are party to the agreement:
Yes ⌧
No Parties involved in the shareholders agreement
NOUMEA, S.A.
OTINIX, S.A.
Percentage of share capital affected: 80.25%
Brief description of the agreement:
Vote and share syndication agreement
Indicate whether the company is aware of any concerted action among its shareholders. If so, provide a brief
description:
Yes ⌧
No Percentage of share capital affected: 80.25%
Brief description of the concerted action:
Vote and share syndication agreement
Participants in concerted action
NOUMEA, S.A.
OTINIX, S.A.
Expressly indicate any amendment to or termination of such agreements or concerted action during the year:
No
3
A.7 Indicate, stating the name thereof, if applicable, whether any natural or legal person exercises, or can
exercise, control over the company, in accordance with Article 4 of the Securities Market Law. If so, provide a
description:
Yes No ⌧
Observations
A.8 Fill in the following tables on the company's treasury shares:
At year-end:
Number of direct shares
Number of indirect shares (*)
0
Total % of share capital
2,671,102
4.04%
(*) Through:
Name or company name of holder of direct ownership interest
Number of direct shares
CEMENTOS MOLINS INDUSTRIAL, S.A.U.
2,671,102
2,671,102
Total:
Give details of any significant changes during the year, in accordance with Royal Decree 1362/07:
Notification date
Total direct
shares acquired
16/05/13
Total indirect
shares acquired
0
Total % of share capital
224,393
0.34%
A.9 Give details of the conditions and time period of the current authorisation from the shareholders at the
General Meeting for the Board of Directors to acquire or transfer treasury shares.
The shareholders at the General Meeting of 26 May 2010 adopted the following resolution, being item SIX on the agenda:
To authorise and empower the Board of Directors of Cementos Molins, S.A. and those companies of which CEMENTOS MOLINS, S.A.
is the Parent to acquire, as permitted by law, the shares of CEMENTOS MOLINS, S.A. within the limits and with the following
requirements:
a) The par value of the shares acquired, in addition to those already held by CEMENTOS MOLINS, S.A. and its subsidiaries, may not
at any time exceed 10% of the total share capital.
b) The acquisition, including the shares that the company may have acquired previously and held in its portfolio, must not cause
equity to be less than share capital plus the legal or restricted bylaw reserves.
c) The acquired shares must be fully paid.
d) Acquisitions for valuable consideration must be performed at a minimum price of the par value applicable of the shares and a
maximum price of the quoted price at the date of acquisition, and with express compliance with the other legal requirements.
e) This authorisation is established for a period of five years, as of the date hereof, 26 May 2010, without prejudice to the situations
provided for under the Law, such as unrestricted acquisition.
A.10 Indicate any legal or bylaw restrictions on the exercise of voting rights and any legal restrictions on the
acquisition or transfer of ownership interests in the share capital. Indicate whether there are any legal
restrictions on the exercise of voting power:
Yes No ⌧
4
A.11 Indicate whether the shareholders at the General Meeting have resolved to take measures to neutralise a
takeover bid pursuant to Law 6/2007.
Yes No ⌧
Explain any measures approved and the situations in which the restrictions would be inoperative:
A.12 Indicate whether the company has issued any securities not traded on an EU-regulated market.
Yes No ⌧
Explain any measures approved and the situations in which the restrictions would be inoperative:
BGENERAL MEETINGS
B.1
Indicate whether quorums for convening the general meeting differ from the system of minimum quorums
established in the Spanish Limited Liability Companies Law (LSC). If so, give details.
Yes B.2
No ⌧
Indicate and, if applicable, describe any differences between the rules established in the Spanish Limited
Liability Companies Law (LSC) for adopting resolutions and the company's rules.
Yes No ⌧
Describe the differences with respect to the rules established in the LSC.
B.3
Indicate the rules governing amendments of the company’s bylaws. In particular, notify of the majorities
foreseen for the amendment of the bylaws, and, where appropriate, the rules provided for the protection of
the rights of the shareholders in the amendment of the bylaws.
This is a power reserved for the General Meeting pursuant to Article 160 (c) of the Spanish Limited Liability Companies Law and Article
3 of the General Meeting Regulations.
In accordance with Article 201 of the Spanish Limited Liability Companies Law, Article 16 of the bylaws and Article 9 of the General
Meeting Regulations, the quorum required in the General Meeting for the amendment of the bylaws must feature shareholders holding
one half of the subscribed voting shares on first call. On second call, shareholders holding at least 25% of the subscribed voting shares
shall be present in person or by proxy. However, where shareholders holding less than 50% of the subscribed voting shares are
present in person or by proxy, the resolutions relating to the amendment of bylaws may only be validly adopted with the affirmative
vote of two-thirds of the share capital present in person or by proxy at the Meeting.
B.4
Indicate the data on attendance at the General Meetings held in the year and in the prior year to which this
report refers:
Attendance data
Date of General
Meeting
% attendance in
person
% attendance by
proxy
% remote voting
Total
Electronic voting
Other
14/06/13
81.58%
6.26%
0.00%
0.00%
87.84%
30/05/14
81.58%
6.29%
0.00%
0.00%
87.65%
5
B.5
Indicate whether the bylaws contain any restrictions with respect to a minimum number of shares required
to attend General Meetings.
Yes B.6
No ⌧
Indicate whether it has been resolved that certain decisions involving a fundamental corporate change
(subsidiarisation, purchase and sale of key operating assets, transactions the effect of which is equal to the
liquidation of the Company, etc.) should be submitted to the shareholders at the General Meeting for
approval, even when not expressly required under company law.
Yes ⌧
B.7
No Indicate the URL and the means for accessing on the Company's website the corporate governance
information and other information on the General Meetings which should be made available to shareholders
on the Company's website.
The Company URL is www.cemolins.es. On the homepage, click on the "Information for Shareholders and Investors" section on the left
side of the page. In the submenu to the right, a green banner drops down where the Corporate Governance Report appears in pdf
format. Information relating to the General Meetings can be found in the submenu to the left in the "General Meetings" section.
C MANAGEMENT STRUCTURE OF THE COMPANY
C.1 Board of Directors
C.1.1. The maximum and minimum number of directors as per the bylaws:
Maximum number of directors
16
Minimum number of directors
6
C.1.2 Fill in the following table with the directors' particulars:
Name orcompany
nameof director
CASIMIRO MOLINS
RIBOT
JUAN MOLINS
AMAT
Representative
Position on
the Board
Date of first
appointment
Date of last
appointment
--
CHAIRMAN
15/11/45
30/05/14
--
DEPUTY CHAIRMAN
AND CHIEF
EXECUTIVE
OFFICER
19/06/67
31/05/12
SECOND DEPUTY
CHAIRMAN
26/06/96
30/05/14
CARTERA DE
JOAQUIN Mª
INVERSIONES C.M., S.A. MOLINS GIL
NOUMEA, S.A.
PABLO
MOLINS AMAT
DIRECTOR
21/06/02
31/05/12
FORO FAMILIAR
MOLINS, S.L.
ROSER
DIRECTOR
RÀFOLS VIVES
28/06/07
31/05/12
MIGUEL DEL
CAMPO RODRÍGUEZ
--
21/05/02
30/05/14
DIRECTOR
Appointment
procedure
ANNUAL GENERAL
MEETING
RESOLUTION
ANNUAL GENERAL
MEETING
RESOLUTION
ANNUAL GENERAL
MEETING
RESOLUTION
ANNUAL GENERAL
MEETING
RESOLUTION
ANNUAL GENERAL
MEETING
RESOLUTION
ANNUAL GENERAL
MEETING
RESOLUTION
6
Name or company
name of director
Representative
Position on
the Board
Date of first
appointment
Date of last
appointment
Appointment
procedure
FRANCISCO JAVIER
FERNÁNDEZ
BESCÓS
DIRECTOR
31/05/12
31/05/12
ANNUAL GENERAL
MEETING
RESOLUTION
JOAQUIM MOLINS
AMAT
DIRECTOR
15/06/01
30/05/14
ANNUAL GENERAL
MEETING
RESOLUTION
JOAQUÍN Mª
MOLINS
LÓPEZ-RODÓ
DIRECTOR
29/07/09
30/05/14
ANNUAL GENERAL
MEETING
RESOLUTION
EMILIO GUTIÉRREZ
FERNÁNDEZ DE
LIENCRES
DIRECTOR
21/06/02
31/05/12
ANNUAL GENERAL
MEETING
RESOLUTION
EUSEBIO DIAZ-MORERA
PUIG-SUREDA
DIRECTOR
31/05/12
31/05/12
ANNUAL GENERAL
MEETING
RESOLUTION
DIRECTOR
26/06/96
30/05/14
ANNUAL GENERAL
MEETING
RESOLUTION
INVERSORA
PEDRALBES, S.A.
ANA Mª
MOLINS
LÓPEZ-RODÓ
12
Total number of directors
Indicate any removals of directors during the year:
C.1.3 Fill in the following tables on the members of the Board and their status:
EXECUTIVE DIRECTORS
Name or company
name of director
Committee reporting
appointment
Position per company
organisation chart
NOMINATION AND REMUNERATION
CHIEF EXECUTIVE OFFICER
COMMITTEE
JUAN MOLINS AMAT
1
Total number of executive directors
8.33%
Total % of Board
NON-EXECUTIVE PROPRIETARY DIRECTORS
Name or company
name of director
CARTERA DE INVERSIONES C.M.,
S.A.
FRANCISCO JAVIER
FERNÁNDEZ BESCOS
JOAQUIM MOLINS AMAT
JOAQUÍN Mª MOLINS LÓPEZRODÓ
EMILIO GUTIÉRREZ
FERNÁNDEZ DE LIENCRES
Committee proposing
appointment
COMMITTEE
COMMITTEE
COMMITTEE
COMMITTEE
COMMITTEE
COMMITTEE
COMMITTEE
Name or company name of significant
shareholder represented or proposing
appointment
NOUMEA, S.A.
7
Name or company name
of director
Committee proposing
appointment
Name or company name of significant
shareholder represented or proposing
appointment
NOUMEA, S.A.
COMMITTEE
COMMITTEE
NOUMEA, S.A.
Total number of proprietary directors
9
75.00%
Total % of Board
INDEPENDENT NON-EXECUTIVE DIRECTORS
EUSEBIO DIAZ-MORERA PUIG-SUREDA
Profile
GRADUATE IN ECONOMICS AND MASTER'S DEGREE FROM IESE. EXTENSIVE KNOWLEDGE OF THE
FINANCIAL SECTOR. PROPOSED BY THE NOMINATION AND REMUNERATION COMMITTEE
MIGUEL DEL CAMPO RODRÍGUEZ
Profile
ECONOMIST WITH EXTENSIVE KNOWLEDGE IN THE CEMENT INDUSTRY. PROPOSED BY THE
NOMINATION AND REMUNERATION COMMITTEE
Total number of independent directors
2
16.67%
Total % of Board
Indicate whether any director classified as independent receives from the company or the group any payment
or benefits other than directors' remuneration, or having business dealings with the company or any group
company or who have held such dealings in the preceding year on their own account or as a significant
shareholder, director or senior executive of a company that has or has had such dealings.
No
Where applicable, a reasoned declaration from the board shall be included giving the reasons why it
considers that the director in question may discharge his/her functions as an independent director.
OTHER NON-EXECUTIVE DIRECTORS
Give details of the reasons why they cannot be considered proprietary or independent directors and of their
relationship links with the company and its executives or shareholders.
Indicate any changes in the status of each director that may have occurred during the year:
8
C.1.4
Fill in the following table with the information relating to the number of female directors in the last four
years, and the classification thereof:
Number of female directors
2014
Executive
0
2012
0
%, by type of director, of total directors
2011
0
2014
0
0.00%
2013
2012
2011
0.00%
0.00%
0.00%
33.33%
0.00%
Proprietary
2
2
3
3
22.22%
22.22%
33.33%
Independent
0
0
0
0
0.00%
0.00%
0.00%
Non-executive
0
0
0
0
0.00%
0.00%
0.00%
0.00%
25.00%
25.00%
Total
C.1.5
2013
2
2
3
3
16.67%
16.67%
Explain any measures, where applicable, that have been taken to try to include in the Board of
Directors a certain number of women to achieve a balanced presence of women and men.
Detail of measures
No specific measures have been taken to this end. The purpose of the majority shareholders is that the persons appointed as
directors must fulfil the legal and bylaw requirements inherent to the position, have acknowledged prestige and possess the
professional expertise and experience required to discharge their functions, without any type of discrimination in terms of the
gender of the persons nominated for appointment.
C.1.6. Explain any measures agreed upon by the nomination committee, where applicable, to ensure that
the selection process does not suffer from any implicit bias against women candidates and that
women with the target profile are deliberately sought and included as potential candidates.
Detail of measures
The Nomination and Remuneration Committee has not established any specific measures to deliberately seek the presence of
women among the potential candidates for the position of director, although the selection processes evidently do not suffer in
any way from any implicit bias against the selection of female directors.
When, in spite of any measures which, if appropriate, might have been adopted, there are few or no
female directors explain the reasons justifying the situation:
Explanation of the reasons
There are currently two female directors, for no specific reason other than that indicated above.
C.1.7
Explain the form of representation on the board of the shareholders holding a significant ownership.
The managing bodies of the shareholders holding a significant ownership interest participating in the concerted action
agreement described in section A.6 (Inversora Pedralbes, S.A., Otinix, S.A., Cartera de Inversiones C.M., S.A. and Noumea,
S.A.), propose, by mutual agreement, the nomination of 8 of the 9 proprietary directors and the significant shareholder
Noumea, S.A., also proposes the nomination of Foro Familiar Molins, S.L.
C.1.8
Explain the reasons for the appointment of any proprietary directors at the request of shareholders
controlling less than 5% of the share capital:
9
Indicate any rejection of a formal request for a place on the Board from shareholders whose
ownership interest is equal to or greater than that of others whose nomination of proprietary directors
was accepted. Explain the reasons for the rejection.
Yes No ⌧
C.1.9. Indicate whether any directors resigned from office before the expiration of their term of office,
whether and in what manner the director explained the reasons for resignation to the Board and, in
the event that resignation was tendered in writing to the Board in full, detail below the reasons given
by the director.
C.1.10 Indicate what powers, if any, have been delegated to the chief executive officer(s):
Name or company name of director:
JUAN MOLINS AMAT
Brief description:
The chief executive officer may, individually, exercise all the powers required for the smooth running of the company’s
business in accordance with the resolutions of the Board of Directors meeting of 31 March 2005.
C.1.11 Identify, as appropriate, the Board members who hold office as directors or executives at other
companies forming part of the listed company's group:
Name or company
name of director
Name of Group entity
Position
JUAN MOLINS AMAT
SOTACIB-KAIROUAN, S.A.
CHAIRMAN
JUAN MOLINS AMAT
CEMENTOS ARTIGAS, S.A.
DEPUTY CHAIRMAN
JUAN MOLINS AMAT
CEMENTOS AVELLANEDA, S.A.
CHAIRMAN
JUAN MOLINS AMAT
MINUS INVERSORA, S.A.
CHAIRMAN
JUAN MOLINS AMAT
SOCIETE TUNISO-ANDALOUSE
DE CIMENT BLANC SOCIETÉ
ANONYME SOTACIB, S.A.
CHAIRMAN
JUAN MOLINS AMAT
CEMOLINS INTERNACIONAL, S.L.U.
CHAIRMAN
JUAN MOLINS AMAT
CORPORACIÓN MOCTEZUMA, S.A.
DE C.V.
DIRECTOR
MIGUEL DEL CAMPO
RODRÍGUEZ
SOTACIB-KAIROUAN, S.A.
MIGUEL DEL CAMPO
RODRÍGUEZ
SOCIETE TUNISO-ANDALOUSE DE
CIMENT BLANC SOCIETÉ
ANONYME SOTACIB, S.A.
DIRECTOR
DIRECTOR
C.1.12 Give details, as appropriate, of any directors of the company who are members of the boards of
directors of other non-group companies that are listed on official securities markets, as disclosed to
the company:
Name or company
name of director
CARTERA DE INVERSIONES C.M.,
S.A.
Company name of
listed company
COMPAÑÍA GENERAL DE
INVERSIONES, S.A. SIMCAV
Position
DIRECTOR
10
C.1.13 Give details, where appropriate, of any rules established by the Company with respect to the number
of boards to which its directors may belong:
Yes No ⌧
C.1.14 Indicate the general policies and strategies of the company reserved for approval by the Board in
plenary session:
Yes
Investment and financing policy
X
The definition of the structure of the corporate group
X
Corporate governance policy
X
Corporate social responsibility policy
X
The strategic or business plan and the annual management and budget targets
X
Remuneration and evaluation of senior executive performance
X
Risk control and management, and the periodic monitoring of internal information and control
systems
X
Dividend policy, as well as the policies and limits applying to treasury shares
x
No
C.1.15 Indicate the total remuneration of the board of directors:
1,106
Remuneration of the board of directors (thousands of euros)
Amount of total remuneration relating to the cumulative rights of directors in terms of pensions
(thousands of euros)
13
1,119
Total remuneration of the board of directors (thousands of euros)
C.1.16 Identify the senior executives who are not executive directors and indicate the total remuneration paid
to them during the year:
Name or company name
CARLOS MARTINEZ FERRER
SALVADOR FERNANDEZ CAPO
ANGEL CERCOS CASALE
CARLOS RAICH CABARROCAS
HIGINI MANUEL ALFAGEME CARRERA
Position
CORPORATE GENERAL MANAGER
GENERAL MANAGER - OPERATIONS
GENERAL MANAGER - CEMENTOS MOLINS INDUSTRIAL,
S.A.U.
GENERAL MANAGER - PROMOTORA MEDITERRANEA2,
S.A.
GENERAL MANAGER - PREFABRICACIONES Y
CONTRATAS, S.A.U.
JAUME MESTRES MARTIN DE LOS SANTOS
GENERAL MANAGER - PROPAMSA, S.A.U.
FRANCISCO JAVIER MOLINS AMAT
MANAGER FOR ARGENTINE AND URUGUAYAN INVESTEES
RAMON TARGARONA PUJADAS
DEVELOPMENT MANAGER
SANTIAGO CALVO JIMÉNEZ
CORPORATE TECHNICAL MANAGER
CARLOS MARÍN CASCUDO
HUMAN RESOURCES MANAGER
JORGE MOLINS AMAT
MANAGER- CORPORATE LEGAL SERVICES
MARCOS CELA REY
FINANCIAL MANAGER
GABRIEL IGLESIAS SANTONJA
MANAGER- ORGANISATION AND SYSTEMS
ANTONIO MARTÍN DEL RÍO
GENERAL MANAGER – CEMOLINS SERVICIOS
COMPARTIDOS, S.L.U.
XAVIER ESCUDÉ TORRENTE
MANAGER- MANAGEMENT CONTROL
SERGIO MARTÍNEZ PIE
INTERNAL AUDITOR
11
3,076
Total remuneration of senior executives (thousands of euros)
C.1.17 Indicate, as appropriate, which members of the Board are, in turn, members of the Boards of Directors of
companies that hold significant ownership interests and/or Group companies:
Company name of
significant shareholder
Position
OTINIX, S.A.
CHAIRMAN
JOAQUÍN Mª MOLINS LÓPEZ-RODÓ
OTINIX, S.A.
DIRECTOR
Give details, as appropriate, of any material relationships, other than those envisaged under the
preceding heading, of the members of the Board of Directors with significant shareholders and/or at
group companies:
C.1.18 Indicate the amendments, if any, to the Board Regulations during the year:
Yes No ⌧
C.1.19 Indicate the procedures for the appointment, re-election, evaluation and removal of directors. Give details
of the competent bodies, the formalities to be fulfilled and the criteria to be used in each of the
procedures.
The shareholders at the General Meeting or, where appropriate, the Board of Directors shall have the power to designate the
members of the Board in conformity with the Spanish Public Limited Liability Companies Law and with the bylaws.
To hold a directorship it is not necessary to be a shareholder, except in the case of an appointment through co-optation to cover
vacancies arising during the period of appointment of directors, in which case the Board may designate those persons from among
the shareholders to occupy such vacancies until the following Annual General Meeting.
The Board of Directors currently has twelve members. Directors are appointed by the Annual General Meeting for a maximum of 5
years, although they may be re-appointed on an indefinite basis for periods of up to five years each term, except for the directors
considered to be independent, who shall not remain in their position as independent directors for a continuous period of more than
12 years.
The proposal for the appointment or re-election of directors which the Board submits to the General Meeting, as well as provisional
appointments by the method of co-optation, shall be approved by the Board of Directors:
(i) On the proposal of the Remuneration and Nomination Committee, in the case of independent directors.
(ii) Subject to a report from the Nomination Committee in all other cases.
According with the article 529 of the Law of Capital Companies, the proposal should include an explanatory report from the Board of
Directors that evaluate the competence, experience, and the merits of the proposed candidate that will join the minutes of the
General Meeting or the Board of Directors.
At all times, the Annual General Meeting may resolve the removal of the directors when deemed appropriate for the interests of the
company.Persons declared incompatible to the extent of and in accordance with the conditions established in the Law regarding
conflicts of interest, and any other that amends or broadens it, are prohibited from holding positions in the Company and, as the
case may be, discharging them.
Directors shall cease to sit on the Board when the period for which they were appointed elapses, and in all other cases provided for
by law, the bylaws or the Board regulations.
As stipulated in Article 11 of the Board Regulations, the Board of Directors in plenary session shall evaluate once a year:
a) The quality and efficiency of the Board's operation;
b) On the basis of a report submitted by the Remuneration and Nomination Committee, the performance of the Chairman of the
Board and the company's chief executive;
c) The performance of its committees on the basis of the reports furnished by them.
According with the article 529 of the Law of Capital Companies, the Board of Directors should propose an action plan to correct the
detected deficiencies. The result of the evaluation will be recorded in the minute of the General meeting or will be incorporated to it
as an appendix.
12
C.1.20 Indicate whether the Board of Directors has carried out an evaluation of its activity during the year:
Yes ⌧
No If so, describe to what extent the self-assessment has given rise to important changes in its internal
organisation and on the procedures applicable to its activities:
Description of the amendments
The annual self-assessment did not give rise to any important changes in the internal organisation of or the procedures applicable
to the Board.
C.1.21 Indicate the cases in which the directors must resign.
1. Pursuant to Article 15 of the Board Regulations, proprietary directors should resign when the shareholders they represent dispose
of their ownership interest in its entirety. If such shareholders reduce their stakes, thereby losing some of their entitlement to
proprietary directors, the latter's number should be reduced accordingly.
2. The Board of Directors shall not propose the removal of independent directors before the expiry of their tenure as mandated by the
bylaws, except where just cause is found by the Board of Directors, based on a proposal from the Remuneration and Nomination
Committee. In particular, just cause will be presumed to exist when a director is in breach of his or her fiduciary duties or comes
under one of the disqualifying grounds enumerated in section III.5 (Definitions) of the Unified Good Governance Code for Listed
Companies.
3. The removal of independents may also be proposed when a takeover bid, merger or similar corporate operation produces
changes in the company's capital structure, in order to meet the proportionality criterion set out by the company.
4. Directors are obliged to inform the Board of any circumstance that could harm the company's name or reputation, tendering their
resignation as the case may be, with particular mention of any criminal charges brought against them and the progress of any
subsequent trial. When a director is sued or tried for any of the offences stated in Article 213 of the Spanish Limited Liability
Companies Law the Board should examine the matter and, in view of the particular circumstances, decide whether or not he/she
should be called on to resign. The Board shall also disclose all such determinations, giving a reasoned account thereof, in the Annual
Corporate Governance Report.
C.1.22 State whether the chairman of the Board of Directors also performs the functions of the company's chief
executive. If so, describe the measures taken to limit the risks of power being concentrated in the hands
of one person:
Yes No ⌧
Indicate and, if applicable, explain whether rules have been established to enable one of the independent
directors to convene a Board meeting or add items to the agenda, to coordinate and give voice to the
concerns of non-executive directors and lead the Board's evaluation of the Chairman.
Yes No ⌧
C.1.23 Are qualified majorities, other than statutory majorities, required for any type of decision?:
Yes No ⌧
If so, describe the differences.
13
C.1.24 Explain whether there are any specific requirements, apart from those relating to directors, to be
appointed chairman.
Yes No ⌧
C.1.25 State whether the chairman has a casting vote:
Yes ⌧
No Matters on which there is a casting vote
Article 26 of the bylaws and Articles 10 and 21 of the Board Regulations provide that the Chairman of the Board of Directors shall
have the casting vote in the event of a tied vote, except in the case of the permanent delegation of powers.
C.1.26 Indicate whether the bylaws or the Board Regulations set any age limit for directors:
Yes No ⌧
C.1.27 Indicate whether the bylaws or Board Regulations set a limited term of office for independent directors,
other than that established in the legislation:
Yes ⌧
No Maximum term of office (years)
12
C.1.28 Indicate whether the bylaws or the Board of Directors' Regulations establish specific rules for appointing
proxies to vote at Board meetings, how they are granted and, in particular, the maximum number of
proxies that a single director may hold and whether it is obligatory to appoint proxies to a director of the
same type. If so, provide a brief description of the rules.
Article 10.2 of the Board Regulations provides that directors may appoint any other director as his/her proxy for the Board meeting
without limiting the number of proxies that each director may hold.
Article 26 of the bylaws states that proxies shall be granted in a letter to the Chairman.
As a consequence of the new article 529 of the Law of Capital Companies, the rules of the Directors state that the non-executive
directors only could delegate their representation to another non-executive director.
C.1.29 Indicate how many Board of Directors meetings were held during the year. Also indicate any occasions on
which the Board held meetings in which the Chairman was not present: The calculation of attendance
shall include proxies granted with specific instructions:
Number of Board meetings
Number of Board meetings without chairman's attendance
12
0
14
Indicate how many meetings of the various Board committees were held during the year:
Committee
No. of meetings
AUDIT COMMITTEE
6
9
C.1.30 Indicate the number of Board meetings held during the year that were not attended by all the directors.
The calculation of absences shall include proxies granted without specific instructions.
133
Directors' attendance
92.36%
Attendance as % of the total votes during the year
C.1.31 Indicate whether the separate and consolidated financial statements submitted for approval by the Board
are certified previously:
Yes No ⌧
Indicate, as appropriate, the person(s) who certified the company's separate and consolidated financial
statements for authorisation for issue by the Board:
C.1.32 Explain the mechanisms, if any, established by the Board of Directors to prevent qualified auditors' reports
on the separate and consolidated financial statements prepared by it from being submitted at the General
Meeting.
The Audit Committee shall support the Board of Directors in relation to its surveillance duties through the periodic review of the
economic and financial information preparation process, the company’s internal controls and the independence of the company’s
external auditor.
In performing its functions, the Audit Committee must evaluate the need to adapt the financial statements prepared by the Board of
Directors on the basis of the notes or qualifications outlined by the company's auditors and, accordingly, make a proposal to the
Board of Directors so that it can make an informed decision. If it is not possible to adapt the financial statements in order to avoid a
qualified auditors’ report, the Chairman of the Audit Committee and the company’s auditors shall give a clear account to the
shareholders of the notes or qualifications.
C.1.33 Is the Board secretary a director?
Yes No ⌧
C.1.34 Explain the procedure for appointing and removing the secretary of the Board and indicate whether the
appointment and removal are subject to a report of the Nomination Committee and are approved by the
Board in plenary session.
Procedure for appointment and removal
Pursuant to Article 23.5 of the Board Regulations, the appointment and removal of the Secretary shall be subject to a report of the
Nomination Committee and approved by the Board in plenary session.
15
Yes
Does the Nomination Committee report on the appointment?
X
Does the Nomination Committee report on the removal?
X
Does the Board in plenary session approve the appointment?
X
Does the Board in plenary session approve the removal?
X
No
Is the secretary of the Board particularly entrusted with ensuring compliance with good governance
recommendations?
Yes ⌧
No Observations
Pursuant to Article 23 of the Board Regulations, the secretary shall safeguard the formal and material legality of the Board's
actions and shall ensure that the governance procedures and rules are complied with and reviewed regularly. In particular, the
secretary of the Board shall ensure that the Board's actions adhere to the spirit and letter of laws and their implementing
regulations, including those issued by regulatory bodies: comply with the Company bylaws and the regulations of the General
Meeting, the Board of Directors and others; and are informed by those good governance recommendations of the Unified Code
that the company has subscribed to.
C.1.35 Indicate the mechanisms, if any, established by the Company to preserve the independence of the
auditors, of financial analysts, investment banks and of rating agencies.
Article 27.8.1 of the Board of Directors Regulations stipulates that the Audit Committee is responsible, inter alia, for monitoring the
independence of the external auditors, to which end:
o
Propose to the Board the selection, appointment, re-election and replacement of the external auditors, as well as the terms and
conditions of their engagement;
o
Receive regular information from the external auditors on the progress and findings of the audit plan, and check that senior
management is acting on its recommendations.
o
Ensure the independence of the external auditors and, for such purpose:
(i)
Establish the required relations with the external auditors in order to receive information on any matters that might
jeopardise the auditors' independence and any other matters related to the financial audit process and to receive
information and communicate with the auditors as provided in financial audit legislation and technical auditing standards. In
any event, each year the auditors will be required to furnish written confirmation of their independence with respect to the
entity or entities related directly or indirectly to the company, as well as the information on any manner of additional
services provided to the aforementioned entities by the auditors, or by any legal persons o entities related thereto, in
accordance with the Audit Law.
(ii)
Issue annually, prior to the issue of the auditors' report, a report expressing an opinion on the independence of the
auditors. The aforementioned report should express an opinion on the additional services referred to in the preceding point.
(iii)
The company should notify any change of auditors to the CNMV as a significant event, accompanied by a statement of any
disagreements arising with the outgoing auditors and the reasons for the same;
(iv)
The Committee should ensure that the company and the auditors adhere to current regulations on the provision of nonaudit services, the limits on the concentration of the auditors' business and, in general, other requirements designed to
safeguard auditors' independence;
(v)
The Committee should investigate the issues giving rise to the resignation of any external auditors.
(vi)
Prevail on the Group's auditors to take on the audit of the Group companies.
C.1.36 Indicate whether the Company changed its external auditors during the year. If so, specify the outgoing
and incoming auditors.
Yes No ⌧
16
In the event of any disagreement with the outgoing auditors, specify the substance thereof:
C.1.37 Indicate whether the audit firm performs other non-audit work for the Company and/or its Group, and if so,
state the amount of fees received for such work and the percentage they represent of the fees billed to
the Company and/or its Group:
Yes ⌧
No Company
Amount of other non-audit work (thousands of euros)
Amount of other non-audit work/total amount billed by audit firm (as a %)
Group
Total
0
20
20
0.00%
3.04%
2.6%
C.1.38 Indicate whether the auditors' report for the previous year included any reservations or qualifications. If
so, specify the reasons given by the chairman of the Audit Committee to explain the content and scope of
the reservations or qualifications.
Yes No ⌧
C.1.39 Indicate the number of years that the current audit firm has been uninterruptedly auditing the financial
statements of the company and/or the group. Also indicate the number of years audited by the current
audit firm as a percentage of the total number of years during which the financial statements have been
audited:
Company
Number of uninterrupted years
Number of years audited by current audit firm/number of years the Company has been
audited (as a %)
Group
13
13
50.00%
50.00%
C.1.40 Indicate whether there is a procedure for directors to be able to receive outside advisory services, and if
so, give details:
Yes ⌧
No Details of the procedure
Article 18 of the Board Regulations establishes in relation to the directors’ right to receive advisory services and information that:
1.-The directors shall have access to all the Company’s services and may, with the broadest powers, obtain the information and
advisory services they need on any aspect relating to the Company, provided that it is required for the discharge of their duties. The
right to information extends to the subsidiaries, whether domestic of foreign, and shall be channelled through the Chairman, the
Chief Executive Officer, the General Manager or the Secretary of the Board, who shall meet the requests of the director, providing
him or her with the information directly, offering the appropriate liaisons or making the necessary arrangements to fulfil his or her
request.
2.-The Company provides new directors with the information required to best acquaint them with the workings of the Company and
its corporate governance rules. The Company also offers refresher programmes when circumstances so advise.
Also, as stipulated in Article 25.2 c) of the Board Regulations, the Audit Committee and the Remuneration and Nomination
Committee may engage external advisors when they feel this is necessary for the discharge of their duties.
17
C.1.41 Indicate whether there is a procedure for the directors to be able to receive the necessary information to
prepare for meetings of the managing bodies sufficiently in advance, and if so, give details:
Yes ⌧
No Details of the procedure
Article 21.5 of the Board Regulations stipulates that the Chairman of the Board of Directors, as the person responsible for the proper
functioning of the Board of Directors, is obliged to ensure that directors are supplied with sufficient information in advance of Board
meetings.
C.1.42 Indicate whether the company has established rules obliging directors to report and, if applicable, resign,
in situations which could harm the company's good name and reputation and if so, give details:
Yes ⌧
No Explain the rules
Article 15.6 of the Board Regulations stipulates that directors are obliged to inform the Board of any circumstance that could harm
the Company's name or reputation, tendering their resignation as the case may be, with particular mention of any criminal charges
brought against them and the progress of any subsequent trial.
When a director is sued or tried for any of the offences stated in Article 213 of the Spanish Limited Liability Companies Law the
Board should examine the matter and, in view of the particular circumstances, decide whether or not he/she should be called on to
resign. The Board shall also disclose all such determinations, giving a reasoned account thereof, in the Annual Corporate
Governance Report.
C.1.43 Indicate whether any of the directors have informed the company of any indictments or the
commencement of oral proceedings against him/her for any of the offences specified in Article 213 of the
Spanish Public Limited Liability Companies Law:
Yes No ⌧
Indicate whether the Board of Directors has examined the matter. If so, give reasons for the decision
taken for the continuation or otherwise of the director in his/her position or, where applicable, detail the
actions undertaken, or intended to be undertaken, by the Board of Directors at the date of this report.
C.1.44 Give details of the significant agreements entered into by the Company which take effect, are amended or
terminated in the event of a change of control of the Company following a takeover bid and the effects
thereof.
The company has entered into and deposited three shareholders agreements at the Spanish National Securities Market Commission
for public knowledge.
The first, relating to the subsidiary Fresit, B.V. entered into on 15 May 2009 by Cementos Molins, S.A. and Cemolins Internacional,
S.L.U., of the one part, and Buzzi Unicem, SpA and Buzzi Unicem Internacional, S.à.r.l., of the other part.
The second, relating to Cementos Avellaneda, S.A. (Argentina) entered into on 18 December 2012, by Cementos Molins, S.A.,
Semolina International, S.L.U. and Minus Inversora, S.A., of the one part, and the Votorantim Group, of the other part.
The third, relating to Cementos Artigas, S.A. (Uruguay) entered into on 18 December 2012, by Cementos Molins, S.A. and Cemolins
Internacional, S.L.U. of the one part, and the Votorantim Group, of the other part.
18
The fourth, entered into on 31 July 2014 by CementosMolins S.A. and CemolinsInternacional S.L.U., of the one part, and
VotorantimCeimentos EAA Inversiones, S.L.U. and VotorantimCimentos, S.A., of the other part, related to Yacuces, S.L. and its
subsidiaries in Bolivia.
All four agreements provide that change of control of either of the parties grants the other party a pre-emption right on the ownership
interest held by the party whose control changes of the companies that are the subject-matter of the agreement.
C.1.45 Identify in aggregate terms and indicate in detail, the agreements between the Company and its directors,
executives or employees which provide for termination benefits, guarantee or golden parachute clauses
upon resignation or dismissal without justification or upon termination of the employment relationship as a
result of a takeover bid or other kinds of transactions.
Number of beneficiaries: 4
Type of beneficiary:
Chief executive officer and general managers
Description of resolution:
Three agreements entered into by the Company and three directors provide for termination benefits equivalent to 45 days’
salary (based on the gross annual remuneration) per year of service, up to a maximum of 42 months’ monetary
remuneration at the date of termination in the event of unjustified dismissal, as provided for in Article 10.3-d of Royal
Decree 1382/1985, i.e. in the event of succession of the company or a significant change in the ownership thereof that
results in a renewal of its governing bodies or the substance and approach of its main business.
Also, on 31 December 2014, one agreement entered into by the Company and a director provide for termination benefits
equivalent to 45 days' salary (based on the gross annual remuneration) per year of service, up to a maximum of 42
months’ monetary remuneration at the date of termination in the event of unjustified dismissal.
Indicate whether these contracts have to be disclosed to and/or approved by the bodies of the company
or of its group:
Board of Directors
General Meeting
Yes
No
Body authorising the clauses
Yes
Is the General Meeting informed of the clauses?
No
X
C.2 Committees of the Board of Directors
C.2.1 Give details of all the committees of the Board of Directors, their members and the proportion of
proprietary and independent directors that form them:
AUDIT COMMITTEE
Name
Position
Type of director
MIGUEL DEL CAMPO RODRÍGUEZ
CHAIRMAN
INDEPENDENT DIRECTOR
EUSEBIO DIAZ-MORERA PUIG-SUREDA
MEMBER
INDEPENDENT DIRECTOR
MEMBER
PROPRIETARY
NOUMEA, S.A.
MEMBER
PROPRIETARY
19
% of executive directors
0.00%
% of proprietary directors
50.00%
% of independent directors
50.00%
% of non-executive directors
0.00%
Name
Position
Type of director
EMILIO GUTIÉRREZ FERNÁNDEZ DE LIENCRES
CHAIRMAN
PROPRIETARY
MEMBER
PROPRIETARY
MEMBER
PROPRIETARY
Name
Position
Type of director
JOAQUIM MOLINS AMAT
MEMBER
PROPRIETARY
JOAQUÍN Mª MOLINS LÓPEZ-RODÓ
MEMBER
PROPRIETARY
% of executive directors
0.00%
% of proprietary directors
100.00%
% of independent directors
0.00%
% of non-executive directors
0.00%
C.2.2 Fill in the following table with the information relating to the number of female directors sitting on the Board
of Directors' committees in the last four years:
Number of female directors
2014
Number
2013
%
Number
2012
%
Number
2011
%
Number
%
AUDIT COMMITTEE
1
25.00%
1
25.00%
1
25.00%
1
25.00%
NOMINATION AND
REMUNERATION
COMMITTEE
1
20.00%
1
20.00%
1
20.00%
1
20.00%
C.2.3 Indicate whether the Audit Committee is charged with the following duties:
Yes
Overseeing the preparation and integrity of the financial information of the Company and, if applicable, of
the group, and for checking compliance with legal provisions, the accurate demarcation of the scope of
consolidation and the correct application of accounting standards.
X
Reviewing internal control and risk management systems on a periodic basis so that the main risks
are properly identified, managed and disclosed.
X
Monitoring the independence and effectiveness of the internal audit function; proposing the
selection, appointment, re-appointment and removal of the head of internal audit; proposing the
internal audit department's budget and receiving periodic information on its activities; and checking
that senior management acts on the findings and recommendations of its reports.
X
Establish and monitor a mechanism whereby employees can report, in a confidential or, if appropriate,
anonymous manner, any potentially significant irregularities within the Company, particularly of a
financial and accounting nature.
X
Submitting proposals to the Board for the selection, appointment, re-appointment and removal of the
external auditors and the terms and conditions of the engagement.
X
Receiving regular information from the external auditors on the progress and findings of the audit
plan, and checking that senior management is acting on their recommendations.
X
Ensuring the independence of the external auditors.
X
No
20
C.2.4 Describe the rules relating to the organisation and functioning of the Board committees, as well as the
responsibilities attributed to each of them.
Name of committee
AUDIT COMMITTEE
Brief description
Article 27 of the Board Regulations stipulates that:
27.1. The Audit Committee shall be composed of at least three and a maximum of five non-executive directors, i.e., directors who do
not have executive functions in the Company. The members of the Committee and its Chairman are appointed by the Board of
Directors. The Board shall also appoint a Secretary who is not a member of the Committee, a function which must be discharged
specifically by the Secretary or Deputy Secretary of the Company's Board of Directors.
27.2. The members of the Audit Committee, particularly its chairman, are appointed having regard to their knowledge and background
in audit matters.
27.3. The term of office of directors is two years, although they may be reappointed for successive periods of the same duration. The
Chairman shall be replaced every four years, although he/she may be re-elected after one year has elapsed from his/her removal.
However, the Board of Directors may resolve at any time to remove any member of the Committee when deemed appropriate.
27.4. The Audit Committee provides support to the Board of Directors in relation to its oversight duties through the periodic review of
the economic and financial information preparation process, of the company’s internal controls and the independence of the company’s
external auditors.
27.5 The Audit Committee shall meet, as convened by the Chairman or at the request of two of its members as needed and, at least
twice a year.
27.6. Any member of the company’s management team or any of its employees summoned to attend the Committee’s meetings shall
be obliged to do so and to provide his or her cooperation and access to the information available to them and the Committee may
require them to appear without the presence of any other director. The Committee may also request the auditors’ attendance at the
meetings.
27.7. Cementos Molins, S.A. has an internal audit function, under the supervision of the Audit Committee, to ensure the proper
operation of reporting and internal control systems. The head of internal audit presents an annual work programme to the Audit
Committee; reports to it directly on any incidents arising during its implementation; and submits an activities report annually.
Additionally, Article 27.8 of the Board Regulations, available on the Company's website, www.cemolins.es, details the duties of the
Audit Committee in relation to the external auditor, the financial statements, the internal audit, the financial information, the Board of
Directors, the information systems and internal control and the risk control and management policy.
Lastly, the provisions of the Board Regulations related to the Audit Committee’s operation shall be applicable to it to the extent possible
given its nature and functions.
Name of committee
Brief description
Article 29 of the Board Regulations describes this committee and, in summary, stipulates that:
1. The Nomination and Remuneration Committee shall be composed of at least three non-executive directors, i.e., directors who do not
have executive responsibilities at the Company. The members of the Committee and its Chairman are appointed by the Board of
Directors. The Board shall also appoint a Secretary who is not a member of the Committee, a function which must be discharged
specifically by the Secretary or Deputy Secretary of the company's Board of Directors.
2. The term of office of directors is two years, although they may be reappointed for successive periods of the same duration. However,
the Board of Directors, at all times, may resolve to remove any member of the Committee when deemed appropriate.
3. The responsibility of this Committee is to inform and advise the Board of Directors in their decisions relating to their area of
competence, through reports and proposals on:
a) The remuneration policy for directors and senior executives.
b) Oversee compliance with the remuneration policy set by the Company.
c) Propose the remuneration payable to the Chief Executive Officer and the General Manager.
d) The system of appointing directors, the appointment and re-election, of directors and the members of the Board committees.
e) The proposals of the Chief Executive Officer of appointments and removals of senior executives and members of the Board of
Directors of the Company’s subsidiaries;
f) Monitor fulfilment of the Company’s internal codes of conduct and corporate governance rules.
g) Examine or organise as the Committee deems fit the succession of the Chairman and the chief executive and, if applicable, submit
proposals to the Board in order to ensure a smooth and well-planned handover.
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h) Report to the Board on gender diversity issues.
4. The Nomination and Remuneration Committee shall meet whenever the Board or its Chairman requests that a report be issued or a
proposal be adopted and, in any case, whenever it is deemed necessary for the proper performance of its functions. In any case, the
Committee shall meet once a year to prepare the information on the remuneration payable to the Directors that the Board of Directors
must approve and include as part of its annual public documents.
5. The provisions of the Board Regulations related to the Nomination and Remuneration Committee’s operation shall be applicable to it
to the extent possible given its nature and functions.
C.2.5 Indicate, as appropriate, whether there are any regulations for the Board committees; if so, indicate where
they can be consulted and whether any amendments have been made during the year. Also indicate
whether any annual report on the activities of each committee has been prepared voluntarily.
Name of committee
AUDIT COMMITTEE
Brief description
The regulation of the Audit Committee is set out in Article 27 of the Board Regulations. It is registered at the Mercantile Registry of
Barcelona and can be consulted on the Company’s website (www.cemolins.es).
The Audit Committee prepared an annual activities report which served as the basis for the Board of Director’s evaluation of the
Committees’ performance in 2014.
Name of committee
Brief description
The regulation of the Nomination and Remuneration Committee is set out in Article 29 of the Board Regulations. They are registered at
the Mercantile Registry of Barcelona and can be consulted on the Company’s website (www.cemolins.es).
The Remuneration and Nomination Committee prepared an annual activities report which served as the basis for the Board of
Director’s evaluation of the Committees' performance in 2014.
C.2.6 Indicate whether the composition of the Executive Committee reflects the participation of the various
directors on the Board according to their status:
Yes No ⌧
If “no” explain the composition of the executive committee
Cementos Molins, S.A. does not have an Executive Committee.
D RELATED-PARTY AND INTRA-GROUP TRANSACTIONS
D.1 Identify the competent body and explain the procedure for approval of any related-party and intra-group
transactions.
Competent authority for approval of related-party transactions
Board of Directors.
Procedure for approval of related-party transactions
Pursuant to Article 5 of the Board Regulations, the Board in plenary session reserves the approval of the related-party transactions
subject to a favourable report of the Audit Committee; the directors involved may neither exercise nor delegate their votes, and must
withdraw from the meeting room while the Board deliberates and votes.
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Explain whether approval of related-party transactions has been delegated and, if so, indicate the body or
persons to which or to whom it has been delegated.
The approval of related-party transactions has not been delegated.
D.2. Give details of transactions that are material with regard to the amount thereof or the matter involved between
the Company or Group companies and the significant shareholders of the Company:
D3. Give details of the transactions that are material with regard to the amount thereof or the matter involved
between the Company or Group companies and the directors or executives of the Company:
D.4 Give details of material transactions by the Company with other entities of the same Group, where such
transactions are not eliminated in the process of preparing the consolidated financial statements and from the
standpoint of their subject-matter or terms and conditions are not part of the company's ordinary business:
In any event, details will be provided on any intra-group transactions performed with entities resident in
countries or jurisdictions considered to be tax havens:
D.5 Give details of the amount of the transactions performed with other related parties.
(In thousands of euros).
D.6 Give details of the mechanisms in place for detecting, identifying and resolving any potential conflicts of
interest between the company and/or its Group and its directors, executives or significant shareholders.
In relation to conflicts of interest, Article 17.2 of the Board Regulations stipulates that:
Directors shall notify the Board of Directors of any situation that may entail a direct or indirect conflict with the company's interests. In the
event of a conflict of interest, the directors concerned shall refrain from participating in the transaction to which the conflict refers. In all
cases, such situations shall be disclosed in the annual corporate governance report.
According to the article 229.3 of the Law of Capital Companies, the directors should communicate to the Board of Directors any situation
of direct or indirect conflict of interests between them and the company.
D.7 Is more than one Group company listed in Spain?
Yes No ⌧
Indicate the listed subsidiaries in Spain:
Listed subsidiary company
Indicate if the areas of activity and the business relationship between them and the rest of the group
companies, have been appropriately described:
Define the eventual business relationship between the parent company and the listed subsidiary company, and those with
the rest of the group.
Identify the expected mechanisms to solve the eventual conflicts of interest between the listed
subsidiary and the rest of the group.
Mechanisms to solve the eventual conflicts of interest
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E RISK CONTROL AND MANAGEMENT SYSTEMS
E.1 Explain the scope of the Company's risk management system.
The Cementos Molins Group in Spain engages mainly in the production, sale and distribution of cement, concrete, aggregates, mortar,
special cement and precast concrete products, and is significantly influenced by the performance of the construction industry and the
public works sector which may affect its results, as well as by other factors that affect the normal course of its business activities and the
achievement of its objectives.
The Cementos Molins Group has investments in Argentina, Uruguay, Bolivia, Mexico, Bangladesh, India, Tunisia and China. This implies
the incorporation of the regulatory frameworks, markets and financial environments in the Company's transactions. These circumstances
evidence the need to manage risks, and devise mechanisms in order to evaluate, treat and minimise them.
In order to identify the risks in each of the countries and companies in which the Group operates, the Internal Audit Department designs
a risk map for the purpose of identifying all the risk elements in each of the businesses. This map is then validated and reviewed by the
General Management of each of the Group companies. Lastly, it is submitted to the Audit Committee.
Responsibility for the direct control function and management actions in relation to the identified risks lies with those in charge of the
business processes and the Strategy Committees and Boards of Directors of each of the companies. In addition the companies receive
support in their mission to control and manage risks from the various areas of corporate management.
Based on the nature of the risk, a series management committees exist to analyse, supervise and implement the measures for the
mitigation thereof.
Lastly, the various committees and senior management report regularly to the Board of Directors of each company in relation to the main
risk factors and the measures adopted for their control and management.
E.2 Identify the Company's bodies in charge of preparing and executing the risk management system.
Name of committee or body: Audit Committee
The main function of the Audit and Control Committee is to support the Board of Directors in relation to its oversight duties through the
periodic review of the process of preparing the economic and financial information, its internal controls and the independence of the
external auditor.
The organisation has an Internal Audit Department for the supervision of the risk management and internal control systems. This body
reports to the Corporate Management.
Name of committee or body: Other committees
The other committees set up by the Cementos Molins Group for the control of specific risks are the Commercial Risks Committees.
The senior management of each of the operations is involved in the management and supervision of the risks specific to the both the
commercial and industrial operations of each of the businesses.
In addition, the Corporate Finance Department analyses and manages financial risk, foreign currency risk, interest rate risk, risk in
relation to industrial assets and risk related to possible environmental impacts. In general this department intervenes directly in relation to
the risks of those companies over which the Group holds direct ownership and control, and provides supervision and advisory services in
those companies jointly managed with other shareholders.
It should also be noted that the Group has specific commercial, industrial, internal audit, legal, financial, tax and human resource
functions in the business units of each of its foreign operations which, in coordination with the business and the Corporate
Managements, are responsible for compliance with the applicable legislation in each case.
E.3 Give details of the main risks that might affect the achievement of the business objectives.
In general the main risk is the performance of the economies in each of the countries in which the Company operates. The future
performance of these companies basically depends on the performance of the construction markets in terms of both building construction
and civil engineering work, which are the Company's main sources of business.
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The proper operation of the industrial assets and ensuring the supply of the main raw materials are a key business element.
The political and social stability, combined with the regulatory levels of the public authorities, are further key elements that may affect the
normal course of the Company's business activities.
Lastly, it should be noted that the Group's degree of internationalisation also gives rise to a certain degree of exposure to the evolution of
the main macroeconomic variables of each country and, accordingly, the exchange rate, inflation and the interest rate play a fundamental
role in terms of the Company's ability to achieve its objectives.
E.4 Identify whether the entity has a risk tolerance level.
The Company does not establish specific risks levels in the day-to-day management of its operations, but manages each risk individually
for the purpose of minimising their possible negative impact.
E.5 Give details of any risks that arose during the year.
The economic situation in Spain and the slowness of the economic recovery, especially in the building industry.
Rise of the regulated costs in Tunisia, tariff difficulties in the international commerce and economic and politic turmoil had a negative
impact on exports.
Exposure to currency fluctuations in those countries where the Group operates, in particular, the depreciation of the currencies in
Argentina and Uruguay and its negative impact on the exchange differences in our consolidated balance sheet.
E.6 Explain the response and monitoring plans for the entity's main risks.
The Group monitors its main risk through the functional departments involved (business and corporate) and the various Committees and
Boards set up.
Technical Committee, Management Committee and Board of Directors meetings are held on a monthly basis in each of the businesses.
The corporate technical, management control, financial and legal departments provide daily supervision and hold regular meetings for
both the Spanish companies and the foreign investees.
Meetings to review the business activities and potential incidents or risks are held each week and immediate action is taken.
F SYSTEMS OF INTERNAL CONTROL AND RISK MANAGEMENT IN CONNECTION WITH
FINANCIAL REPORTING (ICFR)
Describe the mechanisms comprising the risk control and management systems as they affect the entity’s
internal control over financial reporting (ICFR).
F.1 The entity’s control environment
Provide information, indicating salient features, on at least:
F.1.1. Bodies and/or functions responsible for: (i) the existence and maintenance of a suitable, effective
ICFR; (ii) its implementation; and (iii) its oversight.
The Board of Directors of Cementos Molins is responsible (pursuant to Article 5.n of its Regulations) for the implementation and
monitoring of a suitable, effective system of internal control over financial reporting that ensures the completeness and reliability
of financial information.
The Board of Directors delegates oversight of the design and effectiveness of internal control to the Audit Committee.
Article 27 of the Board Regulations specifies that the duties of the Audit Committee in connection with financial reporting are,
inter alia:
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- Oversee the preparation, reporting and integrity of the financial information, checking compliance with legal provisions, the
accurate demarcation of the scope of consolidation and the correct application of accounting standards.
- Understand the processes used to prepare the financial statements and to obtain reasonable assurance that the supporting
reporting systems are reliable.
- Review internal control and risk management systems on a regular basis so that the main risks are properly identified,
managed and disclosed.
Cementos Molins S.A. has an internal audit department, reporting to the Audit Committee, whose remit is to ensure that the
systems of internal control and financial reporting function correctly, to assess the effectiveness of ICFR and to report regularly
on any weaknesses identified in the course of its work and the time frame set for the proposed adaptation or corrective action.
The Audit Committee members are kept apprised of all regulatory changes that may arise in this connection.
The senior executives of Cementos Molins, S.A. are responsible, under the supervision of the Audit Committee, for designing,
implementing and ensuring the functioning of an appropriate internal control system, as specified in Cementos Molins'
organisational model for the systems of control over financial reporting .
Thus, the duty of internal control over financial reporting is discharged at the level of general corporate management of
Cementos Molins, S.A. and thereafter at the functional divisions (administration, finance, human resources, legal services and
information systems), who are responsible for designing and implementing the internal control systems.
Internal control over financial reporting is centralised at corporate management, which ensures that it is maintained and that all
the documentation relating to the procedures and controls in place from time to time is updated and also to notify the Group's
various companies and organisational areas of the approval of policies and procedures of internal control over financial reporting.
The documentation and regulations relating to ICFR are notified. The Company has established the corporate intranet as the
means of dissemination and communication.
F.1.2. Indicate the following, if in place, particularly in connection with the process of preparing financial
reporting:
•
The departments and/or mechanisms in charge of: (i) the design and review of the organisational structure; (ii)
defining clear lines of responsibility and authority, with an appropriate distribution of tasks and functions; and (iii)
ensuring procedures are in place to communicate this structure effectively throughout the entity:
The corporate management officers ensure that tasks and responsibilities are adequately distributed and assigned for the
process of preparing financial information, establishing and, where appropriate, proposing to the corporate management officers
and human resources management the design and structure required to carry them out.
Human resources management, together with the other functional management divisions, is responsible for disseminating and
notifying the organisational structure and any possible changes therein, including those relating to the financial reporting process.
• Code of conduct, approving body, dissemination and instruction, principles and values covered (stating whether it
makes specific reference to record keeping and financial reporting), body in charge of investigating breaches and
proposing corrective or disciplinary action:
At the proposal of the Audit Committee, on 28 February 2012 the Board of Directors approved the Code of Conduct of the
Cementos Molins Group, the contents of which have been notified and disseminated to all the Group's employees.
Oversight for compliance therewith is the remit of the Steering Committee, made up of the corporate human resources manager
and the corporate legal services manager. The Audit Committee is entrusted with its review and periodic update.
Section 8 of the Code of Conduct, "The business environment of the Cementos Molins Group/Company", makes express
reference to the recognition of the transactions, indicating that our accounting systems, controls and audits will be appropriate,
guaranteeing the reliability, truthfulness and accuracy of our accounts, records and reports. Similarly, it is stated that the
economic and financial reporting of the Cementos Molins Group will reflect fairly its economic, financial and equity position, in
accordance with generally accepted accounting principles and applicable International Financial Reporting Standards.
Also notable in this connection are Cementos Molins' Internal Rules of Conduct vis-à-vis the Securities Market, established in a
resolution passed by the Board of Directors on 29 July 2004 and reviewed by a Board Resolution adopted on 28 February 2012.
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Both sets of regulations are available on the Company's website at www.cemolins.es.
• ‘Whistle-blowing’ channel, for reporting any irregularities of a financial or accounting nature, as well as breaches of
the code of conduct and irregular activities within the organisation to the Audit Committee, stating, as applicable,
whether such reports are confidential:
Since 23 April 2009, the Cementos Molins Group has a reporting channel available for all employees of the Spanish companies
in the Group, whereby they can inform Cementos Molins confidentially of any potentially significant irregularities, particularly
those of a financial and accounting nature, of internal control over fraud that, to the best of their knowledge and belief, constitute
inappropriate conduct or action. In addition, at its meeting on 23 February 2012 the Audit Committee established new procedure
regulations for this type of reporting.
Employees may use the procedure for notifying potentially significant irregularities by sending a letter addressed to the Secretary
of the Audit Committee of Cementos Molins. The Audit Committee is informed of any notification in this connection.
• Training and periodic refresher courses for personnel involved in preparing and reviewing financial information or
evaluating the system of ICFR, which address, at least, accounting rules, auditing, internal control and risk
management.
Human resources management and administration and finance management check that the updating procedures for the
accounting and financial tasks are appropriate when this is called for due to legislative and regulatory changes, including
changes in the international accounting standards, that affect the preparation of the Group's financial statements.
The various functional divisions also receive information on a regular basis from external advisers and the Company's external
auditors on regulatory changes or interpretations of standards that may affect the preparation of the Group's financial
information, for which fluid communication with the latter is established in order to be informed of and to interpret and adapt to
such standards. Internal dissemination within the Group to the areas that might be affected is also ensured.
F.2 Assessment of reporting risks
Provide information on, at least:
F.2.1. The main features of the risk identification process, including risks of error or fraud, as regards:
• Whether the process exists and is documented.
Cementos Molins has a model of internal control over financial reporting that provides reasonable assurance that the following
objectives are met:
- Reliability of financial reporting.
- Compliance with the applicable legislation and standards.
- Risk assessment and control activities.
Based on the foregoing, Cementos Molins has defined the key processes for the preparation of its financial information and has
drawn up the related map, containing:
- Purchases and payables.
- Income and receivables.
- Cash and financial items.
- Investments and non-current assets.
- Human resources.
- Inventories.
- Accounting close and consolidation.
- Taxes.
- Information systems.
- Impairment of assets.
All the related processes are formally documented. The documentation generated in connection with these procedures includes
detailed descriptions of transactions performed and those relating to the preparation of financial information from commencement
until their recognition in the accounting records.
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The basic elements for each process are the activities flowcharts, the associated risks in each case and the control activities that
mitigate them. The result is a risk and controls matrix for each process that enables the control objectives of Cementos Molins to
be complied with in the case of all relevant financial information.
• Whether the process covers all financial reporting objectives (existence and occurrence; completeness; valuation;
presentation, disclosure and comparability; and rights and obligations), is updated and how frequently.
With a view to defining the sphere of application of ICFR at Group level, the following factors were borne in mind:
- At Spanish investees that are over 50% controlled the procedures of the key processes in place are defined on the basis of
quantitative and qualitative materiality, establishing a risk matrix and the controls associated with each process in order to
safeguard the reliability of the resulting financial information.
- In the case of the international companies the necessary control mechanisms to enable the consolidation process to ensure in
a reasonable manner the reliability of the information and the processes generating it. Thus, the various companies' internal audit
departments review the procedures and processes taking into account the risk criteria. The external auditors also identify and
inform Cementos Molins of any control weaknesses observed in the course of their work. On the basis of the conclusions drawn,
which are reported to the internal audit department of Cementos Molins, the companies improve the procedures in place. Internal
audit reviews these processes in situ in the context of its annual audit and risk map schedule.
On the basis of the foregoing, the risks and processes to be documented that have a potentially material impact on the financial
information have been identified and, in Cementos Molins' risk identification process, are covered by the following financial
reporting objectives:
- Existence and occurrence: transactions, facts and other events reflected in the financial information exist in reality and were
recorded in due time.
- Completeness: The information reflects all the transactions, facts and other events in which the entity is the affected party.
- Valuation: transactions, facts and other events are recognised and measured in accordance with the applicable standards.
- Presentation, disclosure and comparability: transactions, facts and other events are classified, presented and disclosed in the
financial information in accordance with the applicable standards.
- Rights and obligations: the financial information reflects, at the corresponding date, the rights and obligations through the
related assets and liabilities, in accordance with the applicable standards.
The controls associated with the aforementioned processes are reviewed by the internal audit department at least every four
years and, on the basis of the conclusions reached, if necessary, the Company updates the existing procedures in conjunction
with the corporate management department.
• Whether a specific process is in place to define the scope of consolidation, taking into account, inter alia, the
possible existence of complex corporate structures and special purpose entities or vehicles.
The scope of consolidation of Cementos Molins is defined on a monthly basis by corporate administration management, based
on the information available in its files and in accordance with international accounting standards and is confirmed on a halfyearly basis by the external auditors. Any significant change in the scope of consolidation is notified to the Audit Committee.
• Whether the process addresses other types of risk (operational, technological, financial, legal, reputational,
environmental, etc.) insofar as they may affect the financial statements.
In identifying risks, those arising from external factors that can or could have a material effect on the business and the Group's
financial reporting are also assessed, namely:
- Safeguarding of assets.
- Possibility of fraud.
- Environmental legislation.
- Specific market situations (legal and regulatory changes).
- Estimates, lawsuits and provisions.
• Indicate the entity's governing body that oversees the process.
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The Molins Group's system of internal control over financial reporting is overseen by the Audit Committee and the purpose
thereof is to ensure the reliability of significant financial information.
F.3 Control activities
Provide information, indicating salient features, if available, on, at least:
F.3.1. Procedures for reviewing and authorising financial information and the description of ICFR to be
disclosed to the securities markets, indicating the corresponding lines of responsibility, as well as
documentation describing the flows of activities and controls (including those addressing the risk of
fraud) for the various types of transactions that may materially affect the financial statements, including
procedures for the accounting close procedure and for the separate review of critical judgements,
estimates, evaluations and projections.
The Molins Group furnishes the securities market with financial information on a quarterly basis. The information is prepared by
administrative management reporting to general corporate management.
In the process of preparing the financial information to be published, administrative management carries out certain control
activities to check its reliability. Additionally, the management control department, also reporting to general corporate
management, oversees the information prepared. The guidelines for preparing and reviewing the information are based on the
internal control "Statutory reporting manual" .
The CEO, general corporate management and general operations management analyse the information to be published
provisionally, approving it prior to sending it to the Audit Committee, which oversees the financial information submitted. Lastly,
the Audit Committee informs the Board of Directors of its conclusions on the information submitted, so that once it has been
approved by the Board, it may be published in the securities market.
For the half-yearly and annual reporting, the Audit Committee and the Board of Directors also have available the information
prepared by the Group's external auditors on the results of their work.
In the case of the report on the description of ICFR, the same procedure as that described in this section is followed prior to its
publication in the securities market.
F.3.2. Internal control policies and procedures for IT systems (including access security, control of changes,
system operation, continuity and separation of duties) giving support to key company processes
involved in the preparation and publication of financial information.
Management of organisation and systems of Cementos Molins, S.A., reporting to general corporate management, is responsible
for the information systems and telecommunications of Cementos Molins, S.A. and its Spanish subsidiaries. Its functions include
defining, implementing and monitoring compliance with the security policies and standards, as well as the business continuity plan
of the various applications and infrastructure that support it.
The control model addresses all the applications, infrastructure for support and access, communication systems and the physical
locations in all cases, placing particular emphasis on processes that are relevant for business continuity on a normal basis, directly
or indirectly related to financial information.
The control model defined at Cementos Molins, S.A. comprises the following processes:
• Physical security of the data processing centres.
• Logical security of applications.
• Project management. Implementation, development and evolutive advances.
• Operations management.
• Service provider management.
• Infrastructure and communications.
• Back-up and recovery systems.
• User management.
These processes are supported by a series of documented automatic and manual steps, standards, procedures and security rules,
which define, inter alia, the control activities required to address the risks to which the following spheres of information systems
management are exposed.
• Information systems environment.
o Organisational charts and descriptions of the duties of the employees involved in the information systems.
o Systems map.
o Telecommunications network map.
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• Applications change management.
o Management of requests for new developments, improvements and changes.
o Requests registration, analysis and approvals circuit.
o Development and implementation of new systems.
o Bringing into service of such applications, their validation and completion.
o Documentation and training.
• Operations and use of systems.
o Management of operating activities.
o Management of back-up systems.
o Incidents management.
o Contingency and recovery plans.
o Service provider management.
• User training and information.
o User information systems.
o Ongoing training procedures.
• Physical and logical security.
o Management of security activities.
o Physical security of control rooms.
o Logical security of access to systems.
o Security in data transfers in public networks.
In compliance with the legislation in force, Cementos Molins defined the role of Information Security. This role is responsible for
protecting the Company's information systems, in order to achieve and maintain the required security standards. In order to ensure
that these standards are defined correctly an internal procedure, compliant with the legislative requirements, is in place that defines
the standards and also the security requirements to be implemented.
The control model envisages various reviews that help to keep the security systems updated at acceptable and functional levels
for Cementos Molins, S.A.
F.3.3. Internal control policies and procedures for overseeing the management of outsourced activities to third
parties and of the appraisal, calculation or valuation services commissioned from independent experts,
when these may materially affect the financial statements:
CementosMolins does not outsource to third parties, either fully or partially, any phase of its process of preparing financial
statements.
In the event of hiring outside advisers for accounting, legal, tax or employment-related issues, to handle a specific matter, the
results thereof are overseen by the persons in charge of each functional area in order to ratify the reasonableness of the
conclusions drawn.
F.4 Reporting and communication
Provide information, indicating the salient features, if available, on at least:
F.4.1. Whether there is a specific role in charge of defining and maintaining accounting policies (accounting
policies area or department) and resolving doubts or disputes over their interpretation, communicating
on a regular basis with the team in charge of operations at the organisation. The role is also
responsible for updating the accounting policies manual and disseminating it to the Company's
operating units.
Corporate administration management is responsible for applying the Group's accounting policies. This management also
encompasses the corporate accounting department, whose remit includes:
- Defining and updating the Group's accounting policies.
- Keeping track of international accounting standards and their effects on the Group's financial statements.
- Analysing whether the accounting treatment of the transactions of the consolidated Group and its individual companies is
appropriate.
- Informing and addressing any queries on the application of the accounting standards that could be raised at the Group
companies or at the request of functional areas.
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In cases where the accounting rules are complex and require a more detailed technical analysis for their interpretation,
administrative management contacts the Group's external auditors in order to establish a position thereon.
The Group has an Accounting and Tax Policies Manual. The manual is revised whenever an accounting and/or tax amendment
is made and communicated to those in charge and those responsible for the preparation of the financial reporting.
F.4.2. Mechanisms in standard format for the capture and preparation of financial information, which are
applied and used in all units within the company or Group, and support its main financial statements
and accompanying notes as well as disclosures concerning ICFR.
Cementos Molins has implemented a single computer tool to meet the accounting needs of its Spanish companies and a
computer tool for the consolidation process. The information of the Spanish companies is uploaded onto the consolidation tool
with standardised criteria and formats that comply with the Molins Group's accounting policies. With respect to the Group's
international companies a single applicable reporting model has been established, standardised in compliance with the Group's
accounting policies and is included in the consolidation tool, once the integrity of the information has been checked using internal
controls.
The computer consolidation tool centralises in a single system the separate financial statements of the subsidiaries making up
the Group, as well as the consolidated financial statements and the main disclosures required for the preparation of the
consolidated financial statements.
F.5 Oversight of system operation
Provide information, stating the main features, on at least:
F.5.1. ICFR monitoring activities performed by the Audit Committee, including an indication of whether the
entity has an internal audit department whose competencies include supporting the Audit Committee in
its role of monitoring the internal control system, including ICFR. Also describe the scope of the ICFR
assessment conducted in the year and the procedure for the person in charge to communicate the
findings. State also whether the company has an action plan specifying corrective measures and
whether it has taken stock of the potential impact on its financial information:
The internal audit department notifies the Audit Committee of the correct functioning of ICFR and is responsible for reviewing the
controls in place, reporting any potential weaknesses identified, the steps to be taken to mitigate them and for monitoring the
implementation of such steps. As part of the regular ICFR review process, in 2014 the risks and controls associated with the
procedures on taxes and inventories were reviewed.
In verifying the ICFR and in ensuring the quality of financial reporting the Audit Committee focused its activity on overseeing the
preparation of the separate and consolidated financial statements, as well as the accompanying information thereto, the
consolidation process and the scope of consolidation and all the periodic information (half-yearly and quarterly) that must be
reported to the markets. In its work it is supported by the internal audit department and the Company's external auditors, with
whom meetings are held periodically.
Action plans envisaging corrective steps are established, in conjunction with internal audit and corporate management, in the
event of detecting any weaknesses in the quality of the information or in the internal systems of control over financial reporting.
F.5.2. Indicate whether there is a discussion procedure whereby the financial auditors (pursuant to TAS), the
internal audit department and other experts can report any significant internal control weaknesses
encountered during their review of the financial statements or other reviews they have been engaged
to perform to the company’s senior executives and its Audit Committee or Board of Directors. State
also whether the entity has an action plan to correct or mitigate the weaknesses identified.
The internal audit department reports at least on a half-yearly basis to the senior executives and to the Audit Committee on any
significant weaknesses in internal control that have been identified during the review of the audits performed and the ICFR
reviews.
The external audit has access to the executives and the Audit Committee, assisting to, at least, three Audit Committees per year,
with the intention to inform about the conclusions of the financial statements review and the internal control weaknesses
detected.
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F.6 Other relevant information
Not applicable.
F.7 External auditors' report
Indicate:
F.7.1. Whether the ICFR information reported to the markets has been reviewed by the external auditors. If
"yes", the related report should be included in the corresponding report as an Appendix. If "no", give
reasons.
The external auditors reviewed Cementos Molins' ICFR information that was reported to the markets for 2014. The scope of the
auditors' review procedures was set in accordance with the Draft Guidance and specimen auditors' report relating to the
information on the system of internal control over the financial information of listed entities dated 15 July 2013.
The Draft Guidance includes the aspects included in this connection in CNMV Circular 5/2013 which came into force on 25 June
2013.
G DEGREE OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS
Indicate the Company's degree of compliance with the recommendations of the Unified Good Governance
Code.
If a recommendation is not followed or only partially followed, a detailed explanation of the reasons should be
provided in such a way that the shareholders, investors and the market in general have sufficient information
to evaluate the Company's performance. Explanations of a general nature are not accepted.
1.
The bylaws of listed companies should not place an upper limit on the votes that can be cast by a single
shareholder, or impose other obstacles to the takeover of the company by means of share purchases on the
market.
See sections: A.10, B.1, B.2, C.1.23 and C.1.24.
Followed ⌧
2.
Explain When a parent and a subsidiary are listed companies, both should provide detailed disclosure on:
a)
The type of activity they engage in and any business dealings between them, as well as between the
listed subsidiary and other Group companies;
b)
The mechanisms in place to resolve possible conflicts of interest.
See sections: D.4 and D.7
Followed Partially followed Explain Not applicable ⌧
32
3.
Even when not expressly required under company law, any decisions involving a fundamental corporate
change should be submitted to the General Meeting for approval. In particular:
a)
The transformation of listed companies into holding companies through the process of
subsidiarisation, i.e. reallocating core activities to subsidiaries that were previously carried out
by the originating company, even though the latter retains full control of the former;
b)
Any acquisition or disposal of key operating assets that would effectively alter the company's
object;
c)
Operations that effectively add up to the company's liquidation.
See section: B.6
Followed ⌧
4.
Partially followed Detailed proposals of the resolutions to be adopted at the General Meeting, including the information stated in
Recommendation 27, should be made available at the same time as the publication of the Meeting notice.
Followed ⌧
5.
a)
The appointment or ratification of directors, with separate voting on each candidate;
b)
Amendments to the bylaws, with votes taken on all articles or groups of articles that are
materially different.
Partially followed Explain Companies should allow votes to be divided, so financial intermediaries acting as nominees on behalf of
different clients can issue their votes according to the latters' instructions.
Followed ⌧
7.
Explain Separate votes should be taken at the General Meeting on materially separate items, so shareholders can
express their preferences in each case. This rule shall apply in particular to:
Followed ⌧
6.
Explain Explain The Board of Directors should perform its duties with unity of purpose and independent judgement, according
all shareholders the same treatment. It should be guided at all times by the company's best interest and, as
such, strive to maximise its value over time.
It should likewise ensure that the company abides by the laws and regulations in its dealings with
stakeholders; fulfils its obligations and contracts in good faith; respects the customs and good practices of the
industries and territories where it does business; and upholds any additional social responsibility principles it
has subscribed to voluntarily.
33
Followed ⌧
8.
Partially followed Explain The Board should fulfil the core components of its mission of approving the company's strategy and
authorising the organisational resources to carry it forward, and of ensuring that management meets the
objectives set while pursuing the company's interests and object. As such, the Board in plenary session
should reserve the right to approve:
a) The company's general policies and strategies, and in particular:
i)
The strategic or business plan, management targets and annual budgets;
ii)
Investment and financing policy;
iii)
Design of the structure of the corporate group;
iv)
Corporate governance policy;
v)
Corporate social responsibility policy;
vi)
Remuneration and evaluation of senior executives;
vii) Risk control and management, and the periodic monitoring of internal information and control
systems;
viii) Dividend policy, as well as the policies and limits applying to treasury shares.
See sections: C.1.14, C.1.16 and E.2
b) The following decisions:
i)
At the proposal of the company's chief executive, the appointment and removal of senior
executives and provisions relating to termination benefits.
ii)
Directors' remuneration and, in the case of executive directors, the additional consideration for
their management duties and other contract conditions.
iii)
The financial information that all listed companies must periodically disclose.
iv)
Investments or operations considered strategic by virtue of their amount or special characteristics,
unless their approval corresponds to the General Meeting;
v)
The creation or acquisition of ownership interests in special purpose vehicles or entities resident in
jurisdictions considered to be tax havens, and any other transactions or operations of a
comparable nature whose complexity might impair the transparency of the group.
34
c) Transactions which the company conducts with directors, significant shareholders, shareholders
with Board representation or other persons related thereto (“related party transactions”).
However, Board authorisation shall not be required for related party transactions that simultaneously meet
the following three conditions:
1. They are governed by standard form agreements applied on an across-the-board basis to a large number
of clients;
2. They are performed at market rates, generally set by the person supplying the goods or services;
3. Their amount is no more than 1% of the company's annual revenue.
It is advisable that related party transactions should only be approved on the basis of a favourable report
from the Audit Committee or some other committee charged with the same function; and that the directors
involved should neither exercise nor delegate their votes, and should withdraw from the meeting room while
the Board deliberates and votes.
Ideally, the above powers should not be delegated with the exception of those mentioned in b) and c), which
may be delegated to the Executive Committee in urgent cases and later ratified by the Board in plenary
session.
See sections: D.1 and D.6
Followed Partially followed ⌧
Explain The evaluation of senior executives’ performance is conducted by the Nomination and Remuneration Committee.
The policy on the appointment and removal of senior executives is as follows:
The Board, at the proposal of the Chief Executive Officer, on the basis of a report from the Nomination and Remuneration Committee,
approves the appointment and removal of members of the Board of Directors of its subsidiaries.
The directors’ remuneration is proposed by the Remuneration and Nomination Committee, agreed upon by the Board of Directors and
approved by the shareholders at the General Meeting. The remuneration of the executive director and the other conditions to be included
in his contract are proposed by the Remuneration and Nomination Committee and ratified by the Board of Directors.
9.
In the interests of maximum effectiveness and participation, the Board of Directors should ideally comprise no
fewer than five and no more than fifteen members.
See section: C.1.2
Followed ⌧
Explain 10. Non-executive, proprietary and independent directors should occupy an ample majority of Board places, while
the number of executive directors should be the minimum number required, bearing in mind the complexity of
the corporate group and the ownership interests held by the executive directors.
See sections: A.3 and C.1.3.
Followed ⌧
Partially followed Explain 11. Among non-executive directors, the relation between proprietary and independent members should match the
proportion of the capital represented on the Board by proprietary directors to the remainder of the company's
capital.
This proportional criterion can be relaxed so the weight of proprietary directors is greater than would
strictly correspond to the total percentage of capital they represent:
35
1º In large cap companies where few or no equity stakes attain the legal threshold for significant
shareholdings, despite the existence of shareholders with considerable investments in absolute
terms.
2º In companies with multiple shareholders represented on the Board but not otherwise related.
See sections: A.2, A.3 and C.1.3
Followed ⌧
Explain 12. The number of independent directors should represent at least one third of all Board members.
See section: C.1.3
Followed Explain ⌧
Currently, there is no group within the company's shareholder structure other than that which currently holds a large majority with
sufficient capability to appoint directors. Therefore, nine of the directors are proprietary directors, one director is an executive director and
the other two are independent directors.
13. The nature of each director should be explained by the Board to the shareholders at the General Meeting,
who will appoint or ratify his or her appointment. Such determination should subsequently be confirmed or
reviewed in each year's Annual Corporate Governance Report, after verification by the Nomination
Committee. The report should also disclose the reasons for the appointment of proprietary directors at the
request of shareholders controlling less than 5% of capital and explain any rejection of a formal request for a
Board place from shareholders whose ownership interest is equal to or greater than that of others applying
successfully for a proprietary directorship.
See sections: C.1.3 and C.1.8
Followed ⌧
Partially followed Explain 14. When the number of women directors is few or non-existent, the nomination committee will take steps to
correct this situation:
a) The process of filling Board vacancies has no implicit bias against women candidates;
b) The company makes a conscious effort to include women with the target profile among the candidates for
Board places.
See sections: C.1.2, C.1.4, C.1.5, C.1.6, C.2.2 and C.2.4.
Followed ⌧
Partially followed Explain Not applicable 36
15. The Chairman, as the person responsible for the proper operation of the Board of Directors, should ensure
that directors are supplied with sufficient information in advance of Board meetings, and work to procure a
good level of debate and the active involvement of all members, safeguarding their rights to freely express
and adopt positions; he or she should organise and coordinate regular evaluations of the Board and, where
appropriate, the company's chief executive.
See sections: C.1.19 and C.1. 41
Followed ⌧
Partially followed Explain 16. When a company's Chairman is also its chief executive, an independent director should be empowered to
request the calling of Board meetings or the inclusion of new business on the agenda; to coordinate and give
voice to the concerns of non-executive directors; and to manage the Board's evaluation of the Chairman.
See section: C.1.22
17. The Secretary should take care to ensure that the Board's actions:
a) Adhere to the spirit and letter of laws and their implementing regulations, including those issued
by regulatory bodies;
b) Comply with the company bylaws and the regulations of the General Meeting, the Board of
Directors and others;
c) Are informed by those good governance recommendations of the Unified Code that the company
has subscribed to.
In order to safeguard the independence, impartiality and professionalism of the Secretary, his or her
appointment and removal should be proposed by the Nomination Committee and approved by the Board in
plenary session; the relevant appointment and removal procedures being stipulated in the Board Regulations.
See section: C.1.34
Followed ⌧
Partially followed Explain 18. The Board should meet with the necessary frequency to properly perform its functions, in accordance with a
calendar and agenda set at the beginning of the year, to which each director may propose the addition of
other items.
See section: C.1.29
Followed ⌧
Partially followed Explain 19. Directors' absences should be kept to the bare minimum and quantified in the Annual Corporate Governance
Report. When directors have no choice but to delegate their vote, they should do so with instructions.
See sections: C.1.28, C.1.29 and C.1.30
Followed ⌧
Partially followed Explain 37
20. When directors or the Secretary express concerns about a proposal or, in the case of directors, about the
company's performance, and such concerns are not resolved at the meeting, the person expressing them can
request that they be recorded in the minutes.
Followed ⌧
Partially followed Explain Not applicable 21. The Board in plenary session should evaluate the following points on a yearly basis:
a) The quality and efficiency of the Board's operation;
b) On the basis of a report submitted by the Nomination Committee, the performance of the Chairman
of the Board and the company's chief executive;
c) The performance of its committees on the basis of the reports furnished by them.
Followed ⌧
Partially followed Explain 22. All directors should be able to exercise their right to receive any additional information they require on matters
within the Board's competence. Unless the bylaws or Board Regulations indicate otherwise, such requests
should be addressed to the Chairman or Secretary.
See section: C.1.41
Followed ⌧
Explain 23. All directors should be entitled to call on the company for the advice and guidance they need to carry out their
duties. The company should provide suitable channels for the exercise of this right, extending in special
circumstances to external assistance at the company's expense.
See section: C.1.40
Followed ⌧
Explain 24. Companies should organise induction programmes for new directors to acquaint them rapidly and sufficiently
with the workings of the company and its corporate governance rules. Directors should also be offered
refresher programmes when circumstances so advise.
Followed ⌧
Partially followed Explain 25. Companies should require their directors to devote sufficient time and effort to perform their duties effectively,
and, as such:
a) Directors should apprise the Nomination Committee of any other professional obligations, in case
they might detract from the necessary dedication;
38
b) Companies should lay down rules about the number of directorships their Board members can
hold.
See sections: C.1.12, C.1.13 and C.1.17
Followed Partially followed ⌧
Explain Cementos Molins, S.A. does not lay down rules about the number of directorships its Board members can hold.
26. The proposal for the appointment or re-election of directors which the Board submits to the General Meeting,
as well as provisional appointments by the method of co-optation, should be approved by the Board:
a) On the proposal of the Nomination Committee, in the case of independent directors.
b) Subject to a report from the Nomination Committee in all other cases.
See section: C.1.3
Followed ⌧
Partially followed Explain 27. Companies should post the following director particulars on their websites, and keep them permanently
updated:
a) Professional experience and background;
b) Directorships held at other companies, listed or otherwise;
c) An indication of the director's classification as executive, proprietary or independent; in the case
of proprietary directors, stating the shareholder they represent or have links with.
d) The date of their first and subsequent appointments as a company director, and;
e) Shares held in the company and any options thereon.
Followed ⌧
Partially followed Explain 28. Proprietary directors should resign when the shareholders they represent dispose of their ownership interest
in its entirety. If such shareholders reduce their stakes, thereby losing some of their entitlement to proprietary
directors, the latter's number should be reduced accordingly.
See sections: A.2, A.3 and C.1.2
Followed ⌧
Partially followed Explain 39
29. The Board of Directors should not propose the removal of independent directors before the expiry of their
tenure as mandated by the bylaws, except where just cause is found by the Board, based on a proposal from
the Nomination Committee. In particular, just cause will be presumed when a director is in breach of his or
her fiduciary duties or comes under one of the grounds which result in the loss of his or her position as an
independent director in accordance with the provisions of Order ECC/461/2013.
The removal of independents may also be proposed when a takeover bid, merger or similar corporate
operation produces changes in the company's capital structure, in order to meet the proportionality
criterion set out in Recommendation 11.
See sections: C.1.2, C.1.9, C.1.19 and C.1.27
Followed ⌧
Explain 30. Companies should establish rules obliging directors to inform the Board of any circumstance that might harm
the organisation's name or reputation, tendering their resignation as the case may be, with particular mention
of any criminal charges brought against them and the progress of any subsequent trial.
In this connection if a director is sued or tried for any of the offences set out in Article 213 of the
Spanish Limited Liability Companies Law, the Board will examine the case forthwith and, in view of
the specific circumstances, decide whether or not the director should continue in his position. The
Board should also disclose all such determinations in the Annual Corporate Governance Report.
Followed ⌧
Partially followed Explain 31. All directors should express clear opposition when they feel a proposal submitted for the Board's approval
might damage the corporate interest. In particular, independents and other directors unaffected by the conflict
of interest should challenge any decision that could go against the interests of shareholders lacking Board
representation.
When the Board makes material or reiterated decisions about which a director has expressed serious
reservations, then he/she must draw the pertinent conclusions. Directors resigning for such causes
should set out their reasons in the letter referred to in the next recommendation.
The terms of this Recommendation should also apply to the Secretary of the Board, director or
otherwise.
Followed ⌧
Partially followed Explain Not applicable 32. Directors who give up their place before their tenure expires, through resignation or otherwise, should state
their reasons in a letter to be sent to all members of the Board. Irrespective of whether such resignation is
filed as a significant event, the motive for the same must be explained in the Annual Corporate Governance
Report.
See section: C.1.9
40
33. Remuneration comprising the delivery of shares in the company or other companies in the group, share
options or other share-based instruments, payments linked to the company's performance or membership of
welfare schemes should be confined to executive directors.
The delivery of shares is excluded from this limitation when directors are obliged to retain them until
the end of their tenure.
Followed ⌧
Followed Partially followed Explain Not applicable 34. External directors' remuneration should sufficiently compensate them for the dedication, abilities and
responsibilities that the post entails, but should not be so high as to compromise their independence.
Followed ⌧
Explain Not applicable 35. In the case of remuneration linked to company earnings, deductions should be computed for any
qualifications stated in the external auditors’ report entailing a decrease in such earnings.
Followed Explain Not applicable ⌧
36. In the case of variable remuneration, remuneration policies should include technical safeguards to ensure
they reflect the professional performance of the recipients and not simply the general progress of the markets
or the company's industry or circumstances of this kind.
37. When the company has an Executive or Delegated Committee (“Executive Committee”), the breakdown of its
members by director category should be similar to that of the Board itself. The Secretary of the Board should
also act as secretary to the Executive Committee.
38. The Board should be kept fully informed of the business transacted and resolutions adopted by the Executive
Committee. To this end, all Board members should receive a copy of the Committee's minutes.
39. In addition to the Audit Committee mandatory under the Securities Market Law, the Board of Directors should
form a committee, or two separate committees, of Nomination and Remuneration.
The rules governing the composition and operation of the Audit Committee and the Nomination and
Remuneration Committee or Committees should be set forth in the Board regulations, and include
the following:
a) The Board of Directors should appoint the members of such Committees having regard to the
knowledge, aptitudes and experience of its directors and remit of each Committee and shall
discuss their proposals and reports. The Committees should report the business transacted and
account for the work performed at the first plenary session of the Board following each Committee
meeting;
41
b) These Committees should be formed exclusively of non-executive directors and have a minimum
of three members. Executive directors or senior executives may also attend meetings at the
Committee's invitation.
c) Committees should be chaired by an independent director.
d) They may engage external advisors, when they feel this is necessary for the discharge of their
duties.
e) Meetings should be recorded in minutes and a copy sent to all Board members.
Followed Partially followed⌧
Explain
Except for section e) the minutes of the Committees are at the disposal of the directors on request.
40. The job of overseeing compliance with internal codes of conduct and corporate governance rules should be
entrusted to the Audit Committee, the Nomination Committee or, as the case may be, separate Compliance
or Corporate Governance Committees.
Followed ⌧
Explain 41. All members of the Audit Committee, particularly its chairman, should be appointed with regard to their
knowledge and background in accounting, auditing and risk management matters.
Followed ⌧
Explain 42. Listed companies should have an internal audit function, under the supervision of the Audit Committee, to
ensure the proper operation of reporting and internal control systems.
See section: C.2.3
Followed ⌧
Explain 43. The head of internal audit should present an annual work programme to the Audit Committee; report to it
directly on any incidents arising during its implementation; and submit an activities report at the end of each
year.
Followed ⌧
Partially followed
Explain
44. The control and risk management policy should specify at least:
42
a) The different types of risk (operational, technological, financial, legal, reputational, etc.) the
company is exposed to, with the inclusion under financial or economic risks of contingent
liabilities and other off-balance-sheet risks;
b) The determination of the risk level the company sees as acceptable;
c) Measures in place to mitigate the impact of identified risks, should they occur;
d) The internal reporting and control systems to be used to control and manage the above risks,
including contingent liabilities and off-balance-sheet risks.
See section: E
Followed ⌧
Partially followed
Explain
45. The Audit Committee's role should be:
1º With respect to internal control and reporting systems:
a) That the main risks identified, if any, as a result of the monitoring the effectiveness of the
company's internal control and internal audit are properly management and disclosed.
b) Monitoring the independence and effectiveness of the internal audit function; proposing the
selection, appointment, re-appointment and removal of the head of internal audit; proposing the
internal audit department's budget and receiving periodic information on its activities; and
checking that senior management acts on the findings and recommendations of its reports.
c) Establishing and monitoring a mechanism whereby employees can report, in a confidential or, if
appropriate, anonymous manner, any potentially significant irregularities within the company,
particularly of a financial and accounting nature.
2º In relation to external audit:
a) Receive regular information from the external auditors on the progress and findings of the audit
plan, and check that senior management is acting on its recommendations.
b) Monitor the independence of the external auditors, to which end:
i) The company should notify any change of auditors to the CNMV as a significant event,
accompanied by a statement of any disagreements arising with the outgoing auditors and the
reasons therefor.
iii)
The Committee should investigate the issues giving rise to the resignation of any external
auditors.
See sections: C.1.36, C.2.3, C.2.4 and E.2
Followed ⌧
Partially followed
Explain
46. The Audit Committee may call on any company employee or executive to be present at its meeting, even
ordering their presence without another senior executive.
43
Followed ⌧
Explain 47. The Audit Committee should prepare information on the following points from Recommendation 8 for input to
Board decision-making:
a) The financial information that all listed companies must periodically disclose. The Committee
should ensure that interim statements are drawn up under the same accounting principles as the
annual statements and, to this end, may ask the external auditor to conduct a limited review.
b) The creation or acquisition of ownership interests in special purpose vehicles or entities resident
in jurisdictions considered to be tax havens, and any other transactions or operations of a
comparable nature whose complexity might impair the transparency of the group.
c) Related party transactions, except where their scrutiny has been entrusted to some other
oversight and control committee.
Followed ⌧
Partially followed
Explain
48. The Board of Directors should seek to present the financial statements to the General Meeting without
reservations or qualifications for any matters in the auditors' report. Should such reservations or qualifications
exist, both the Chairman of the Audit Committee and the auditors should give a clear account to the
shareholders of the related matters and scope limitations.
See section: C.1.38
Followed ⌧
Partially followed
Explain
49. The majority of Nomination Committee members - or Nomination and Remuneration Committee members as
the case may be - should be independent directors.
See section: C.2.1
Followed Explain⌧
Not applicable
The company does not have independent directors on this Committee.
50. The Nomination Committee should have the following functions in addition to those stated in earlier
Recommendations:
a) Evaluate the skills, knowledge and experience required of the Board, define the roles and
capabilities required of the candidates to fill each vacancy, and decide the time and dedication
necessary for them to properly perform their duties.
44
b) Examine or organise as the Committee deems fit the succession of the Chairman and the chief
executive and, if applicable, submit proposals to the Board in order to ensure a smooth and wellplanned handover.
c) Report on the senior executive appointments and removals which the chief executive proposes to
the Board.
d) Report to the Board on the gender diversity issues discussed in Recommendation 14 of this Code.
See section: C.2.4
Followed
⌧
Partially followed
Explain
Not applicable
51. The Nomination Committee should consult with the company's Chairman and chief executive, especially on
matters relating to executive directors.
Any Board member may suggest directorship candidates to the Nomination Committee for its
consideration.
Followed ⌧
Partially followed
Explain
Not applicable
52. The Remuneration Committee should have the following functions in addition to those stated in earlier
Recommendations:
a) Make proposals to the Board of Directors regarding the following:
i) The remuneration policy for directors and senior executives;
ii) The individual remuneration and other contractual conditions of executive directors.
iii) The standard conditions for senior executive employment contracts.
b) Oversee compliance with the remuneration policy set by the company.
See section: C.2.4
Followed ⌧
Partially followed
Explain
Not applicable
53. The Remuneration Committee should consult with the company's Chairman and chief executive, especially
on matters relating to executive directors and senior executives.
Followed ⌧
Explain
Not applicable
45
H OTHER INFORMATION OF INTEREST
1. If there is any salient feature of corporate governance at the entity or the group entities that has not been
dealt with in the other sections herein, and which it is necessary to include in order to provide the most
complete and reasoned information on corporate governance structure and practices at the entity or its
group, provide a brief description.
2. This section can include any other information, clarification or qualification relating to the previous sections
of the report, provided that it is material and not repetitive. In particular, indicate whether the company is
subject to any legislation other than the Spanish legislation on corporate governance, and if so, include
the information that it is required to provide, where such information differs from that required in this report.
3. The Company may also indicate whether it has voluntarily adhered to any other codes of ethical principles
or good practice of an international, industry-specific or other nature. If so, state the code in question and
the date of adherence thereto.
Section C.1.3 indicates that the non-executive proprietary directors Casimiro Molins Ribot, Joaquín Mª Molins López-Rodó and
Inversora Pedralbes, S.A. were appointed at the proposal of the significant shareholder Inversora Pedralbes, S.A. when they were
actually jointly proposed for appointment by the significant shareholders Inversora Pedralbes, S.A. and Otinix, S.A.
In addition, it is indicated that the non-executive proprietary directors Francisco Javier FernándezBescós, Emilio Gutiérrez
Fernández de Liencres and Noumea, S.A. were appointed at the proposal of the significant shareholder Cartera de Inversiones C.M.,
S.A. when they were actually jointly proposed for appointment by a concerted action among the significant shareholders
InversoraPedralbes, S.A., Otinix, S.A., Cartera de Inversiones C.M., S.A. and Noumea, S.A.
Section C.1.17 indicates that Casimiro Molins Ribot is the chairman of the significant shareholder (and director) Inversora Pedralbes,
S.A., that Juan Molins Amat and Joaquim Molins Amat are directors of the significant shareholder (and director) Noumea, S.A. and
that Joaquín Mª Molins López-Rodó is director of the significant shareholder (and director) Inversora Pedralbes, S.A.
This Annual Corporate Governance Report was approved by the company's Board of Directors at its meeting held
on 26/02/15.
Indicate whether any directors voted against or abstained in relation to the approval of this Report.
Yes No ⌧
46

Consolidated Annual Report 2014

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