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Retrospective restatement of the 2016 and 2017 financial statements
 12 Months Ended
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