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Retrospective restatement of the 2016 and 2017 financial statements | 12 Months Ended
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Dec. 31, 2018
Disclosure of Retrospective Restatement of Financial Statements [Abstract] |
Retrospective restatement of the 2016 and 2017 financial statements |
24) | Retrospective restatement of the 2016 and 2017 financial statements.
During 2018, the Company identified certain misstatements in the financial statements as of and for the years ended December 31, 2017 and 2016. The Company has restated the balances and results for these periods as presented in the report in accordance with the guidance of IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors. These involuntary errors were specifically that significant information related to transactions was not available to the accounting staff in regards to some non-routine transactions. This lack of timely, accurate information lead to incorrect accounting treatments and misstatements to the financial statements. These errors relate to the recording of advances made to related parties and the accrual of related interest income. For this reason, the accrued interest and the related income tax effect of certain loans granted to related parties were not previously recognized in the Company’s financial statements. The interest to be recognized through the restatement is as follows:
Company name | Balance as of December 31st, 2016 | 2016 Recognized Interest | 2017 Recognized Interest
Perfiles Comerciales Sigosa, S.A. de C.V. | $ 705,064 | $ 24,632 | $ 60,383
Proyectos Comerciales el Ninzi, S.A. de C.V. | 1,571,048 | 1,467 | 124,873
Industrias CH, S.A.B. de C.V. | 88,433 | 5,783 | 12,797
Total interest income |  | 31,882 | 198,053
Corresponding income tax |  | (10,353) | (24,949)
Additional profit recognized in the financial statements |  | $ 21,529 | $ 173,104
Earnings per share before correction |  | $ 5.93 | $ 3.49
Earnings per share after correction |  | $ 5.97 | $ 3.84
There were additional errors identified in the presentation of accounts and loans receivable with related parties in the 2016 and 2017 financial statements. These errors relate to the classification of certain balances as short-term assets which are long-term assets. There were additional corrections related to the reclassification of certain accounts payable to loans payable. The balances of related parties that were corrected through reclassification from the short-term assets to the long-term asset (after recording the interest described above) were:
| 2016 | 2017
Non current assets |  |
Accounts receivable: |  |
Industrias CH, S.A.B. de C.V. | 648,239 | 648,281
Total | 648,239 | 648,281
Long-term loans: |  |
Industrias CH, S.A.B. de C.V. | 88,433 | 530,281
Perfiles Comerciales Sigosa, S.A. de C.V. | 705,064 | 806,397
Proyectos Comerciales el Ninzi, S.A. de C.V. | 1,571,048 | 1,695,921
Total | 2,364,545 | 3,032,599
Current liabilities |  |
Accounts payable (Adjustment): |  |
Industrias CH, S.A.B. de C.V. | (204,917) | (205,902)
Perfiles Comerciales Sigosa, S.A. de C.V. | (2,122) | (2,096)
Tuberías Procarsa, S.A de C.V | (3,943) | (3,866)
Accounts payable other |  | (51)
Total | (210,982) | (211,915)
Loans (Adjustment): |  |
Industrias CH, S.A.B. de C.V. | (998) |
Tuberías Procarsa, S.A de C.V | 3,943 | 3,866
Pytsa Industrial, S.A. de C.V. | (437) | (50)
Total | 2,508 | 3,816
Transfer of current liabilities: |  |
Accounts receivable | (329,134) | (329,521)
Loans | (2,443,294) | (2,913,325)
Recorded interest | (31,882) | (229,935)
The changes to the financial statements resulting from such changes were as follows: Consolidated Balance Sheet
| 2016 | 2017
| Previously presented | Modified | Previously presented | Modified
Assets |  |  |  |
Current assets: |  |  |  |
Related parties receivables | 506,235 | 177,101 | 530,985 | 201,464
Loans to related parties | 2,443,294 |  | 2,913,325 |
Total current assets | 23,007,128 | 20,234,700 | 26,109,102 | 22,866,256
Non-current related parties receivables |  | 648,239 |  | 648,281
Non-current loans to related parties |  | 2,364,545 |  | 3,032,599
Total assets | 41,639,372 | 41,879,728 | 45,538,497 | 45,976,531
Liabilities and equity |  |  |  |
Current liabilities: |  |  |  |
Related parties payable | 7,867 | 218,849 | 39,761 | 251,676
Loans from related parties | 1,012,667 | 1,010,159 | 984,623 | 980,807
Income tax | 44,324 | 54,677 | 18,828 | 53,930
Total current liabilities | 5,518,990 | 5,737,817 | 7,236,668 | 7,480,069
Total liabilities | 8,429,228 | 8,648,055 | 11,415,594 | 11,658,995
Equity: |  |  |  |
Retained earnings | 19,053,138 | 19,074,667 | 20,774,810 | 20,969,443
Total controlling interest | 33,315,330 | 33,336,859 | 34,231,475 | 34,426,108
Total equity | 33,210,144 | 33,231,673 | 34,122,903 | 34,317,536
Total liabilities and equity | 41,639,372 | 41,879,728 | 45,538,497 | 45,976,531
Consolidated Comprehensive Income Statement
| 2016 | 2017
| Previously presented | Modified | Previously presented | Modified
Interest income | 108,151 | 140,033 | 54,238 | 252,291
Income before income taxes | 5,269,252 | 5,301,134 | 2,819,387 | 3,017,440
Income taxes | - 926,041 | - 936,394 | - 1,097,860 | - 1,122,809
Net profit for the year | 4,343,211 | 4,364,740 | 1,721,527 | 1,894,631
Comprehensive income for the year | 7,150,508 | 7,172,037 | 1,191,622 | 1,364,726
Net income attributable to: |  |  |  |
Controlling interest | 2,884,834 | 2,906,363 | 1,721,672 | 1,894,776
Net income for the year | 4,343,211 | 4,364,740 | 1,721,527 | 1,894,631
Comprehensive income attributable to: |  |  |  |
Controlling interest | 5,803,840 | 5,825,369 | 1,195,008 | 1,368,112
Comprehensive income net for the year | 7,150,508 | 7,172,037 | 1,191,622 | 1,364,726
Income per share (controling interest) |  |  |  |
(Mexican pesos) | $ 5.93 | $ 5.97 | $ 3.49 | $ 3.84
Consolidated Statements of Changes in Equity Changes in these financial statements may be seen in the Consolidated Statements of Changes in Equity of the year page 5. Consolidated Statements of Cash Flows
| 2016 | 2017
| Previously presented | Modified | Previously presented | Modified
Net income of the year | 4,343,211 | 4,364,740 | 1,721,527 | 1,894,631
Adjustments: |  |  |  |
Interest income from investing activities | - 108,151 | - 140,033 | - 54,238 | - 252,291
Income tax | 926,041 | 936,394 | 1,097,860 | 1,122,809
(increase) Related parties receivable | - 55,863 | - 172,322 | - 453,754 | - 41,311
Net cash flows provided by operating activities | 5,822,213 | 5,705,754 | 2,771,912 | 3,184,355
Investing activities: |  |  |  |
loans granted to related parties |  | - 2,277,256 |  | - 412,443
Net cash flows (used) provided by investing activities | - 3,165,639 | - 5,442,895 | 2,705,919 | 3,118,362
Financing activities: |  |  |  |
Loans granted to related parties | - 2,393,715 |  |  |
Net cash flows (used) provided by financing activities | - 1,495,630 | 898,085 |  |
The modifications for errors in the register of interests in receivables, in the presentation and reclassification of accounts receivable and payable from related parties are presented below:
|  | ADJUSTMENTS |  | M O D I F I C A T I O N / P R E S E N T A T I O N |
| Balance with no modifications as of 31/12/2016 | 2016 Interests | Accounts payable Transaction | Adjustment | Long term accounts receivable taxes | Long term loans payable | Loans payable | Total adjustment | Balance as of 31/12/2016
Accounts receivable: |  |  |  |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 475,395 | 5,783 | 204,917 | -38,854 | -648,239 |  | 998 | -475,395 | 0
Pytsa Industrial de México, S.A. de C.V. |  |  |  |  |  |  | 437 | 437 | 437
Other accounts receivable by operation | 30,840 |  |  |  |  |  |  |  | 30,840
| 506,235 |  |  |  |  |  |  |  |
Loans: |  |  |  |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 49,579 |  |  | 38,854 |  | -88,433 |  | -49,579 | 0
Proyectos Comerciales el Ninzi, S.A. de C.V. | 1,715,405 | 1,467 |  |  |  | -1,571,048 |  | -1,569,581 | 145,824
Perfiles Comerciales Sigosa, S.A. de C.V. | 678,310 | 24,632 | 2,122 |  |  | -705,064 |  | -678,310 | 0
| 2,443,294 |  |  |  |  |  |  |  |
Total | 2,949,529 | 31,882 | 207,039 | 0 | -648,239 | -2,364,545 | 1,435 | -2,772,428 | 177,101
| Modified balance for presentation as of 31/12/2016 | 2017 Interest | Loan | Difference from changes | Transactions of the year | Adjusted balance 31/12/2017
Accounts receivable: |  |  |  |  |  |
Pytsa Industrial de México, S.A. de C.V. | 437 |  |  |  | -387 | 50
Proyectos Comerciales el Ninzi, S.A. de C.V. | 145,824 |  |  |  |  | 145,824
Other accounts receivable by operation | 30,840 |  |  |  | 24,750 | 55,590
| 177,101 | 0 | 0 | 0 | 24,363 | 201,464
Long term accounts receivable: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 648,239 |  |  |  | 42 | 648,281
| 648,239 |  |  |  | 42 | 648,281
Long term loans payable: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 88,433 | 12,797 | 412,443 | 16,608 |  | 530,281
Perfiles Comerciales Sigosa, S.A. de C.V. | 705,064 | 60,383 |  | 40,950 |  | 806,397
Proyectos Comerciales el Ninzi, S.A. de C.V. | 1,571,048 | 124,873 |  |  |  | 1,695,921
Total | 2,364,545 | 198,053 | 412,443 | 57,558 | 0 | 3,032,599
| Adjusted balance 31/12/2017 | Interest | VAT on invoiced interest | Loans | Difference from changes | Payments | Transactions of the year | Adjusted balance 31/12/2018
Accounts receivable: |  |  |  |  |  |  |  |
Pytsa Industrial de México, S.A. de C.V. | 50 |  |  |  |  |  | -50 |
Proyectos Comerciales el Ninzi, S.A. de C.V. | 145,824 |  |  |  |  | -145,824 |  |
Other accounts receivable by operation | 55,590 |  |  |  |  |  | -39,859 | 15,731
| 201,464 |  |  |  |  | -145,824 | -39,909 | 15,731
Short term loans: |  |  |  |  |  |  |  |
Compañía Laminadora Vista Hermosa, S.A. de C.V. |  | 915 |  | 182,256 |  |  |  | 183,171
Compañía Manufacturera de Tubos, S.A. de C.V. |  | 1,039 |  | 43,433 |  |  |  | 44,472
Operadora Compañia Mexicana de Tubos SA |  | 885 |  | 37,347 |  |  |  | 38,232
|  | 2,839 | 0 | 263,036 | 0 | 0 | 0 | 265,875
Long term accounts receivable: |  |  |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 648,281 |  |  |  |  |  |  | 648,281
| 648,281 | 0 | 0 | 0 | 0 | 0 |  | 648,281
Long term loans payable: |  |  |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 530,281 | 22,953 | 2,714 | 214,028 | 1,732 | -41,430 |  | 730,278
Perfiles Comerciales Sigosa, S.A. de C.V. | 806,397 | 65,664 |  |  | 3,945 | -296,959 |  | 579,047
Proyectos Comerciales el Ninzi, S.A. de C.V. | 1,695,921 | 136,022 |  |  |  | -1,455,153 |  | 376,790
Total | 3,032,599 | 224,639 | 2,714 | 214,028 | 5,677 | -1,793,542 | 0 | 1,686,115
| Balance with no modifications as of 31/12/2016 | Transfer of accounts receivable for presentation | Transfer of loans payable for presentation | Modified balances for presentation 31/12/216 |  |
Accounts payable: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. |  | 204,917 |  | 204,917 |  |
Tuberías Procarsa, S.A. de C.V. |  |  | 3,943 | 3,943 |  |
Perfiles Comerciales Sigosa, S.A. de C.V. |  | 2,122 |  | 2,122 |  |
Other accounts payable by operation | 7,867 |  |  | 7,867 |  |
Total | 7,867 | 207,039 | 3,943 | 218,849 |  |
Loans: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 221,628 | 998 |  | 222,626 |  |
Tuberías Procarsa, S.A. de C.V. | 622,061 |  | -3,943 | 618,118 |  |
Procarsa Tube and Pipe Co. | 62,303 |  |  | 62,303 |  |
Pytsa Industrial de México, S.A. de C.V. | 106,675 | 437 |  | 107,112 |  |
Total | 1,012,667 | 1,435 | -3,943 | 1,010,159 |  |
| Modified balances for presentation 31/12/216 | Transactions of the year | Interest | Difference in changes | Adjusted balance 31/12/2017 |
Accounts payable: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 204,917 | 985 |  |  | 205,902 |
Tuberías Procarsa, S.A. de C.V. | 3,943 | -77 |  |  | 3,866 |
Perfiles Comerciales Sigosa, S.A. de C.V. | 2,122 | -26 |  |  | 2,096 |
Other accounts payable by operation | 7,867 | 31,945 |  |  | 39,812 |
Total | 218,849 | 32,827 | 0 | 0 | 251,676 |
Loans: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 222,626 |  | 4,194 |  | 226,820 |
Tuberías Procarsa, S.A. de C.V. | 618,118 |  | 1,449 | -27,778 | 591,789 |
Procarsa Tube and Pipe Co. | 62,303 |  | 146 | -2,801 | 59,648 |
Pytsa Industrial de México, S.A. de C.V. | 107,112 |  | 251 | -4,813 | 102,550 |
Total | 1,010,159 | 0 | 6,040 | -35,392 | 980,807 |
| Adjusted balance 31/12/2017 | Transactions of the year | Interest | Difference from changes | Payment | Adjusted balance 31/12/2018
Accounts payable: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 205,902 | -23 |  |  |  | 205,879
Tuberías Procarsa, S.A. de C.V. | 3,866 | -1,924 |  |  |  | 1,942
Perfiles Comerciales Sigosa, S.A. de C.V. | 2,096 | -2,096 |  |  |  |
Other accounts payable by operation | 39,812 | 86,958 |  |  |  | 126,770
Total | 251,676 | 82,915 | 0 | 0 | 0 | 334,591
Loans: |  |  |  |  |  |
Industrias CH, S.A.B. de C.V. | 226,820 |  | 5,570 |  | -232,390 | 0
Tuberías Procarsa, S.A. de C.V. | 591,789 |  | 1,321 | -2,363 | -590,747 | 0
Procarsa Tube and Pipe Co. | 59,648 |  | 132 | -370 | -59,410 | 0
Pytsa Industrial de México, S.A. de C.V. | 102,550 |  |  | -2,029 | -100,521 | 0
Total | 980,807 | 0 | 7,023 | -4,762 | -983,068 | 0

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