BASIS OF PRESENTATION
a) Basis of presentation
These consolidated financial statements have been prepared in accordance with IFRS (International Financial Reporting Standards) issued and effective or issued and early adopted as at the time of preparing these statements (February 2018), as issued by the International Accounting Standards Board and in conformity with International Financial Reporting Standards as adopted by the European Union (“EU”). These consolidated financial statements are presented in thousands of United States dollars (“USD”), except otherwise indicated.
These Consolidated financial statements fairly present the consolidated equity and consolidated financial situation of Ternium as of December 31, 2017, and the consolidated results of its operations, the Changes in the Consolidated Statement of Comprehensive Income, the Changes in Consolidated Net Equity and the Consolidated Cash Flows of Ternium for the year then ended.
Elimination of all material intercompany transactions and balances between the Company and their respective subsidiaries has been made in consolidation.
These consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
Certain comparative amounts have been reclassified to conform to changes in presentation in the current year. These reclassifications do not have a material effect on the Company’s consolidated financial statements.
These consolidated financial statements have been approved for issue by the Board of Directors on February 20, 2018.
Detailed below are the companies whose financial statements have been consolidated and accounted for interest in these consolidated financial statements
|
| | | | | | | | | | | | | |
| | Country of | | | | Percentage of ownership at December 31, |
Company | | Organization | | Main activity | | 2017 | | 2016 | | 2015 |
Ternium S.A. | | Luxembourg | | Holding | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Investments S.à.r.l. | | Luxembourg | | Holding | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Solutions A.G. (1) | | Switzerland | | Services | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Participaçoes S.A. (formerly Ternium Brasil S.A.) (1) | | Brazil | | Holding | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Investments Switzerland AG (1) | | Switzerland | | Holding | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Internacional España S.L.U. (1) | | Spain | | Marketing of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium USA Inc. (1) | | USA | | Manufacturing and selling of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Argentina S.A. (formerly Siderar S.A.I.C.) (2) | | Argentina | | Manufacturing and selling of flat steel products | | 60.94 | % | | 60.94 | % | | 60.94 | % |
Impeco S.A. (3) | | Argentina | | Manufacturing of pipe products | | 60.97 | % | | 60.97 | % | | 60.97 | % |
Prosid Investments S.A. (4) | | Uruguay | | Holding | | 60.94 | % | | 60.94 | % | | 60.94 | % |
Ternium Mexico S.A. de C.V. (5) | | Mexico | | Holding | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Hylsa S.A. de C.V. (6) | | Mexico | | Manufacturing and selling of steel products | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Las Encinas S.A. de C.V. (6) | | Mexico | | Exploration, exploitation and pelletizing of iron ore | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Ferropak Comercial S.A. de C.V. (6) | | Mexico | | Scrap services company | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Galvamet America Corp (6) | | USA | | Manufacturing and selling of insulated panel products | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Transamerica E. & I. Trading Corp. (6) | | USA | | Scrap services company | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Técnica Industrial S.A. de C.V. (6) | | Mexico | | Services | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Acedor, S.A. de C.V. (6) | | Mexico | | Holding | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Galvacer America Inc (7) | | USA | | Distributing company | | — |
| | 88.78 | % | | 88.72 | % |
Ternium Gas México S.A. de C.V. (8) | | Mexico | | Energy services company | | 88.78 | % | | 88.78 | % | | 88.72 | % |
Ternium Internacional Guatemala S.A. (9) | | Guatemala | | Selling of steel products | | 99.98 | % | | 99.98 | % | | 99.98 | % |
Consorcio Minero Benito Juarez Peña Colorada S.A.de C.V. (10) | | Mexico | | Exploration, exploitation and pelletizing of iron ore | | 44.39 | % | | 44.39 | % | | 44.36 | % |
Peña Colorada Servicios S.A. de C.V. (10) | | Mexico | | Services | | 44.39 | % | | 44.39 | % | | 44.36 | % |
Exiros B.V. (10) | | Netherlands | | Procurement and trading services | | 50.00 | % | | 50.00 | % | | 50.00 | % |
Servicios Integrales Nova de Monterrey S.A. de C.V. (11) | | Mexico | | Medical and Social Services | | 66.14 | % | | 66.14 | % | | 66.09 | % |
Ternium Internacional Nicaragua S.A. | | Nicaragua | | Manufacturing and selling of steel products | | 99.38 | % | | 99.38 | % | | 99.38 | % |
Ternium Internacional Honduras S.A. de C.V. | | Honduras | | Manufacturing and selling of steel products | | 99.18 | % | | 99.18 | % | | 99.18 | % |
Ternium Internacional El Salvador S.A. de C.V. | | El Salvador | | Manufacturing and selling of steel products | | 99.92 | % | | 99.92 | % | | 99.91 | % |
Ternium Internacional Costa Rica S.A. | | Costa Rica | | Manufacturing and selling of steel products | | 99.98 | % | | 99.98 | % | | 99.98 | % |
Ternium Colombia S.A.S. (formerly Ferrasa S.A.S.) (12) | | Colombia | | Manufacturing and selling of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium del Cauca S.A.S. (formerly Perfilamos del Cauca S.A.S.) (12) | | Colombia | | Manufacturing and selling of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Siderúrgica de Caldas S.A.S. (formerly Siderúrgica de Caldas S.A.S.) (12) | | Colombia | | Manufacturing and selling of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Tenigal S. de R.L. de C.V. (13) | | Mexico | | Manufacturing and selling of steel products | | 51.00 | % | | 51.00 | % | | 51.00 | % |
Ternium Internacional S.A. (14) | | Uruguay | | Holding and marketing of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
|
| | | | | | | | | | | | | |
| | Country of | | | | Percentage of ownership at December 31, |
Company | | Organization | | Main activity | | 2017 | | 2016 | | 2015 |
| | | | | | | | | | |
Ternium Treasury Services S.A. (14) | | Uruguay | | Financial Services | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Internationaal B.V. (15) | | Netherlands | | Marketing of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium International Inc. (15) | | Panama | | Marketing of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Procurement S.A. (16) | | Uruguay | | Procurement services | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Technology & Engineering Services S.A. (16) | | Uruguay | | Engineering and other services | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium International USA Corporation (17) | | USA | | Marketing of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Internacional de Colombia S.A.S. (18) | | Colombia | | Marketing of steel products | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Ternium Ingeniería y Servicios de México S.A. de C.V. | | Mexico | | Engineering and other services | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Soluciones Integrales de Gestión S.A. (19) | | Argentina | | Other services | | 100.00 | % | | 100.00 | % | | 100.00 | % |
Procesadora de Materiales Industriales S.A. (20) | | Colombia | | Scrap services company | | — |
| | — |
| | 100.00 | % |
Ferropak Servicios S.A. de C.V. (21) | | Mexico | | Services | | — |
| | — |
| | 88.72 | % |
Corporativo Grupo Imsa S.A. de C.V. (21) | | Mexico | | Services | | — |
| | — |
| | 88.72 | % |
Ternium International Ecuador S.A. (22) | | Ecuador | | Marketing of steel products | | — |
| | — |
| | 100.00 | % |
Ternium Staal B.V. (23) | | Netherlands | | Holding and marketing of steel products | | 100.00 |
| | — |
| | — |
|
Ternium Brasil Ltda. (23) | | Brazil | | Manufacturing and selling of steel products | | 100.00 |
| | — |
| | — |
|
Ecosteel Gestao de Efuentes Industriais S.A. (23) | | Brazil | | Other services | | 100.00 |
| | — |
| | — |
|
Ecosteel Gestao de Águas Industriais S.A. (23) | | Brazil | | Other services | | 100.00 |
| | — |
| | — |
|
Ternium del Atlántico S.A.S (24) | | Colombia | | Manufacturing and selling of steel products | | 100.00 |
| | — |
| | — |
|
(1) Indirectly through Ternium Investments S.à.r.l. Total voting rights held: 100.00%.
(2) During the fourth quarter of 2017, Siderar S.A.I.C. changed its business name to Ternium Argentina S.A. Indirectly through Ternium Internacional España S.L.U. Total voting rights held: 60.94%.
(3) Since the fourth quarter of 2017, indirectly through Ternium Argentina S.A. and Soluciones Integrales S.A Total voting rights held 100.00%. Before that, indirectly through Ternium Argentina S.A. and Ternium Internacional S.A.
(4) Since the fourth quarter 2017, indirectly through Ternium Argentina S.A. and Ternium Procurement S.A. Total voting rights held 100.00%. Before that indirectly through Ternium Argentina S.A. and Ternium Internacional S.A.
(5) Since the fourth quarter 2017, indirectly through Ternium Argentina S.A. and Ternium Internacional España S.L.U. Total voting rights held 100.00%. Before that indirectly through Ternium Argentina S.A., Ternium Internacional S.A. and Ternium Internacional España S.L.U.
(6) Indirectly through Ternium Mexico S.A. de C.V. Total voting rights held: 100.00%.
(7) This company dissolved as of December 11, 2017.
(8) Indirectly through Ternium Mexico S.A. de C.V. and Tenigal S. de R.L. de C.V. Total voting rights held: 100.00%.
(9) Indirectly through Ternium Internacional España S.L.U. Total voting rights held: 100.00%.
(10) Total voting rights held: 50.00%.
(11) Indirectly through Ternium Mexico S.A. de C.V. Total voting rights held: 74.50%.
(12) Indirectly through Ternium Internacional España S.L.U.. Total voting rights held: 100.00%. See note 2 (b).
(13) Indirectly through Ternium Internacional España S.L.U. Total voting rights held: 51.00%.
(14) Indirectly through Ternium Investments Switzerland AG. Total voting rights held: 100.00%.
(15) Since the third quarter 2017, indirectly through Ternium Investments S.à.r.l. Total voting rights held 100.00%. Before that, indirectly through Ternium Investments Switzerland AG.
(16) Since the third quarter of 2017, indirectly through Ternium Internacional España S.L.U. Total voting rights held 100.00%. Before that, indirectly through Ternium Investments Switzerland AG.
(17) Since the fourth quarter 2017, indirectly through Ternium Investments S.à.r.l. Total voting rights held: 100.00%. Before that, indirectly through Ternium Internacional S.A.
(18) Indirectly through Ternium Internacional S.A. Total voting rights held 100.00%.
(19) Since the third quarter of 2017, indirectly through Ternium Investments Sà.r.l and Ternium Internacional España S.L.U. Total voting rights held 100.00%. Before that indirectly throgh Ternium Investments S.à.r.l and Technology and Engineering Services S.A.
(20) This company was dissolved as of December 6, 2016.
(21) Merged with Hylsa S.A. de C.V. during the fourth quarter of 2016.
(22) This company was dissolved as of September 27, 2016.
(23) Indirectly through Ternium Investments S.à.r.l. Total voting right held: 100.00%.
(24) Indirectly through Ternium Internacional España S.L.U. Total voting rights held: 100.00%.
The most important non-controlling interest is related to the investment in Ternium Argentina S.A., which is a company listed in the Buenos Aires Stock Exchange. Ternium Argentina S.A. stated in its annual accounts as of and for the year ended December 31, 2017, that revenues amounted to USD 2,301 million (2016: USD 1,892 million), net profit from continuing operations to USD 337 million (2016: USD 251 million), total assets to USD 2,820 million (2016: USD 2,415 million), total liabilities to USD 874 million (2016: USD 607 million) and shareholders’ equity to USD 1,945 million (2016: USD 1,807 million). All the information related to this investment could be found in the Buenos Aires Stock Exchange webpage.
b) Acquisition of non-controlling interest in Ternium Colombia S.A.S. (formerly Ferrasa S.A.S.)
On January 20, 2015, Ternium entered into an agreement to acquire the remaining 46% interest in Ternium Colombia for a total consideration of USD 74.0 million. The Ternium Colombia transaction closed on April 7, 2015 and it was accounted for as an acquisition of non-controlling interest resulting in a decrease of equity attributable to the owners of the parent company amounting to USD 29.6 million. In addition, on January 20, 2015, Ternium sold its 54% interest in Ferrasa Panamá S.A. for a total consideration of USD 2.0 million, with no significant impact in these consolidated financial statements.
