Management Reports • Apr 29, 2013
Management Reports
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| I. | THE MANAGEMENT REPORT ON BUSINESS IN 2012 | 2 | |
|---|---|---|---|
| 1. | General report | 3 | |
| a) | Financial highlights | 3 | |
| b) | Address to shareholders: Mr. Mladen Peroš, Chairman of the Board | 4 | |
| c) | Managment in AD Plastik Group | 5 | |
| d) | Organizational structure of AD Plastik Group | 6 | |
| e) | Ownership structure | 7 | |
| f) | Information on the share ADPL-R-A | 7 | |
| g) | Declaration on the implementation of corporate governance code | 9 | |
| 2. | Review of operations in 2012 and the development plan of AD Plastik Group | 10 | |
| a) | Business overview in 2012 | 10 | |
| b) | Financial reports with consolidated affiliated companies | 13 | |
| c) | Financial indicators | 14 | |
| d) | Market and expected development of AD Plastik Group | 15 | |
| e) | Future growth drivers | 16 | |
| f) | Commitment to quality | 17 | |
| g) | The most significant changes in the balance sheet positions of AD Plastik Group | ||
| 19 | |||
| II. | STATEMENT OF PERSONS RESPONSIBLE FOR THE PREPARATION OF ANNUAL REPORTS | 20 | |
| III. | AUDITED REPORTS | 21 | |
| a) | Consolidated financial statements AD Plastik d.d., Solin and its subsidiaries | ||
| b) | Unconsolidated financial statements AD Plastik d.d., Solin | ||
| IV. | DECISION PROPOSAL ABOUT ACCEPTANCE OF THE ANNUAL FINANCIAL | ||
| STATEMENTS | 139 | ||
| V. | DECISION PROPOSAL ABOUT USAGE OF NET INCOME | 140 | |
| VI. | ADDRESS BOOK | 141 |
2
Image 1.Sales revenue of AD Plastik Group since 2009- 2012 and average growth rate of revenues (in mil.of HRK)
Image 3. Earnings per share and dividend per share since 2009-2012 (in HRK)
* Refers to the advance dividend
Image 5. Sales revenus of AD Plastik Group per markets
Image 2.Total operating revenues of AD Plastik Group since 2009-2012 and average growth rate of revenues (in mil.of HRK)
Image 6. Capital expenditures (CAPEX) and amortization of AD Plastik Group since 2009- 2012 (in mil.of HRK)
I am extremely honored to address you for the first time as the Chairman of the Board of AD Plastik. After more than 20 years at the forefront of AD Plastik, in July of the previous year mr.Boban stepped down from the position of Chairman of the Board, and on this occasion, the Supervisory Board has entrusted me with managing the company.
We can evaluate AD Plastik Group's business year 2012 as the year focused on further business expansion and increase in revenue, despite the challenges that the current situation in the European auto industry sets before us. Despite unfavorable macroeconomic conditions we successfully launched the production in our new companies, ADP Mladenovac in Serbia and ADP Kaluga in Russia.The process of starting production on these locations contributed to the increase in operating costs, which resulted in reduction of margins at the level of Group.
In the previous year we concluded a significant number of new business ventures for plastic components of exteriors and interiors that are being used in new versions of the vehicles Renault Twingo and Smart within the project Edison (cooperation of Renault and Daimler). We started with the capital investments necessary for the successful realization of this project. According to existing information from the buyer, the start of serial production of the new veichle is expected in the first part of 2014. Project Edison ensures long-term strategic positioning, stability and increase in revenue for AD Plastik in Croatia. For the companies under our ownership in Russia, ZAO PHR Tolyatti and ADP Kaluga, we concluded business ventures for new veichles and buyers (Renault, Nissan, PSA and Mitsubishi). In that way, along with capital investments started, we provided an increase in revenues for the companies, and also an increase in revenues for AD Plastik Group and a good strategic positioning for stable business expansion.
In the following medium-term period, due to the expansion of AD Plastik Group, a significant amount of time we invest in creating an organizational structure, and human resources development which is an important prerequisite to achieve the set goals. In the second half of the year we established the Steering Committees for the companies, that together with Supervisory Boards of subsidiaries, control business and enable the safe development and growth of the Group.
Despite the complex economic situation, I believe that we will welcome the end of the following year with a successfully realized plans and projects which will strengthen our company in the conquered markets, and in the following period provide the further growth and development to get satisfaction of our buyers, shareholders, employees and all business partners.
Respectfully,
Mladen Peroš Chairman of the Management Board
Within parent company act the following bodies: the General Assembly, the Supervisory Board and the Managment Board.
General Assebmly of shareholders of AD Plastik Inc. is consisted of shareholders eligible to vote, by the rule: one share – one vote. There are no shareholders who would have preferred shares.
On 31.12.2012 the Supervisory Board had six members, and they were mr.Josip Boban, the Chairman, mr.Nikola Zovko, deputy of Chairman, mr.Marijo Grgurinović, member, and three members that represent the largest of individual shareholders OAO "Holding Autokomponenti" (mr.Dmitrij Leonidovich Drandin, mrs. Nadezhda Anatolyevna Nikitina and mr.Igor Antoljevich Solomatin). The Supervisory Board established Appointment Committee, Remuneration Committee and Audit Committee.
The members of the Board and its Chairman are appointed and removed by the Supervisory Board. Their term of office lasts up to five years after which they can be reappointed.
On 31.12.2012. the Board consisted of three members: mr. Mladen Peroš, Chairman of the Board, mrs.Katija Klepo, member of the Board for controlling and mr. Ivica Tolić, member of the Board for legal affairs and corporate communications.
The bodies of subsidiaries and associated companies are: The Assembly; The Supervisory Board; General Manager; Executive Bodies of subsidiaries and associated companies are established and act in accordance with the laws of the state in whose territory is the headquarter of company in question, pursuant to the basic laws of these societies.
AD Plastik Inc. is the largest Croatian manufacturer for automotive plastic components. The activity of AD Plastik in Croatia is the production of plastic components for interiors and exteriors of automobiles. The production in Croatia takes place at locations in Solin, the headquarter, and in Zagreb, Jankomir. Apart from production in Croatia, the company has plants organized as companies, with the status of legal person, in Slovenia, Serbia, Romania and three of them in Russia (in Tolyatti, Kaluga and Luga).
Information on ownership by subsidiaries and associated companies are shown in the following image.
The equtity capital of AD Plastik Inc. amounts to 419.958.400,00 HRK, and it is divided in 4.199.584 shares of the nominal value of 100,00 HRK.
The shareholders are legal and natural persons from Croatia and abroad, that realize their interests through General Assembly and Supervisory Board in accordance with the legislation of the Republic of Croatia.
| Table 1.Ownership structure of AD Plastik Inc. on 31.12.2012 | |||
|---|---|---|---|
| -------------------------------------------------------------- | -- | -- | -- |
| OWNER | 31.12.2012. |
|---|---|
| OAO HOLDING AUTOKOMPONENTI | 30,00% |
| HYPO ALPE-ADRIA-BANK D.D./ RAIFFEISEN OBVEZNI MIROVINSKI FOND | 6,13% |
| ADP-ESOP D.O.O. | 5,23% |
| PBZ D.D./ CUSTODY ACCOUNT | 3,78% |
| ERSTE & STEIERMARKISCHE BANK D.D./ CUSTODY ACCOUNT | 2,63% |
| BAKIĆ NENAD | 2,56% |
| BOBAN JOSIP | 1,73% |
| HYPO ALPE-ADRIA-BANK D.D./ RAIFFEISEN DOBROVOLJNI MIROVINSKI FOND | 1,33% |
| ERSTE & STEIERMARKISCHE BANK D.D./CSC | 1,26% |
| ACM POTHVATI D.O.O. | 1,24% |
| OTHER | 44,11% |
During 2012 the company acquired a total of 41,500 of its own shares. In September of 2012, the company disposed 4,962 of its own shares for the purpose of rewarding employees of the company for the successful work of these employees in 2011. On 31.12.2012 the company had 40.281 of its own shares, which makes 0,96 % of the company capital.
Shares are listed on the Official Market of the Zagreb Stock Exchange. Stock ticker is ADPL-R-A. In March 2012 AD Plastik Inc. and Erste Bank have signed the Agreement on Market Making.
Image 8. Movement of average daily stock price ADPL-R-A and Crobex since 01.01.2012. – 28.02.2013.
Source: ZSE
The total turnover achieved by share trading of AD Plastik Inc. in 2012 amounted to 105.338.736,68 HRK, while the turnover for 2011 amounted to 134.818.736,00 HRK. Out of all shares listed on the Zagreb Stock Exchange, the share ADPL-R-A was ranked seventh by achieved turnover in 2012.
In 2012 the Company paid the dividend in the amount of 8,00 HRK per one share, out of that 2,47 HRK per share was paid in february, and a difference of 5,53 HRK was paid in August.
Announcement of results for the I quarter of 2013:
The General Assembly of AD Plastik Inc. will be held:
Announcement of results for the first half of 2013:
Announcement of results for the III quarter and first nine months of 2013:
Announcement of results for the IV quarter and twelve months of 2013: on 14.02.2014.
Stjepan Laća, Corporate Communications Manager, phone: 021/206-401, fax: 021/275-401,
e-mail: [email protected]
Ad Plastik Inc. Solin (hereinafter: the Company) applies the Corporate Governance Code, which was written by the Croatian Agency for Supervision of Financial Services (hereinafter: Hanfa) and the Zagreb Stock Exchange Inc. Zagreb, and it was adopted by the decision of Hanfa on April 26th, 2008 and published in the Official Gazette of the Republic of Croatia no. 46/07, as well as on the website of the Zagreb Stock Exchange (hereinafter: the Code).
In 2012 the Company complied with the provisions of the Code, with certain exceptions, occurred primarily because of the process of coordinating practices of the Company with the rules of the Code.
Deviations from the Code were the following:
● In 2012 Board members and Supervisory Board members have not acquired or disposed shares of the Company, and that is why on websites of the Company and Zagreb Stock Exchange was not necessary to publish such information.
● The Supervisory Board is not composed of independent members.
● Information on all revenues and compensations that a member of the Board receives from the Company were collectively published within the Annual Report of the Company.
Description of certain deviations from the Code and reasons for the stated deviations the Company explains in detail in the answers to the annual questionnaire that makes an integral part of the Code and which has been delivered and published on the websites of the Zagreb Stock Exchange, as well as on the Company's own website.
Internal supervision in the Company is conducted by the Controlling department which informs the Management Board through the report on the conducted monitoring (findings and suggestions of improvement).
Supervision and coordination of Management business reporting on business results include:
● encouraging communication between the functions of the Company, and coordination with the preparation of report and analysis of business results;
● evaluating the overall business efficiency, and proposing guidelines for improvement;
● giving orders and determination of preventive and corrective activities,
● forecasting the impact of external and internal changes in the overall business of the Company.
In 2012 is made a decision on establishing an Internal Audit Service, and its realization is planned during 2013.
The Company has no majority owner. The largest shareholder is the Open joint stock company, OAO "Holding Autokomponenti" from Saint Petersburg, Russian Federation, which owns 1.259.875 shares which represents 30% of the equity capital of the Company.
During 2012 there were no significant changes in the ownership structure. The ownership structure is presented within this Report, under point I.1.e. in the table 1.
Note: Information on the composition of the Board and the Supervisory Board is indicated under point I.1.c. Managment of AD Plastik Group within this Report.
In the year 2012 AD Plastik Group managed to achive 4,75% of sales revenue growth compared with the same period last year. This result should be seen in the light of the situation on automotive market in Europe. The situation is best described by following data from ACEA (European Automobile Manufacturers Association), the number of new car registrations in Europe in the year 2012 dropped to lowest level since the year 1995.
Given the conditions described above net profit of AD Plastik Group in the reporting period was 56,02 million HRK, while in the year 2011 net profit was 64,67 million HRK. The main reasons for the decrease in net profit margin are:
The review of financial results of each company and the most important events of 2012 are presented below.
In 2012 AD Plastik Inc. achieved a net profit of 44,77 million HRK, which represents a reduction of 13,6 % compared to the profit
achieved in 2011. Likewise, in 2012 was recorded a correction of sales revenue of 8,99% compared to the year before.
The largest part of sales revenue AD Plastik Inc. achieved in foreign market, that makes about 97% of entire sales revenue. The most significant export market of parent company is the European Union market, in which were dominating above described circumstances that led to these results.
The most important events in parent company for the year 2012 are:
remaining part of the dividend in amount of HRK 5,53 per share was paid in August.
Image 9. EBITDA margin of AD Plastik Group for the period of 2009-2012.
In the reporting period AD Plastik Novo Mesto recorded a decrease in operating revenue of 3,2% compared to the 2011. Likewise, it was recorded a net profit fall of 0,87 million HRK in 2011 to 0,36 million HRK in 2012. Realized EBITDA (Earnings before interest, taxes, depreciation and amortization, hereinafter: EBITDA) in the observed period amounted to 1,49 million HRK.
ADP Mladenovac entered into register of companies in December of 2011, and its business started in Februar of 2012. In first year in business this company achieved net profit of 17,9 thousands HRK with total operating revenues of 21,22 million HRK. In the observed period, the company achieved EBITDA of 5,53 million HRK.
In the reporting period we bought equipment from M-Prointexa and we have taken over an existing manufacturing of building insulation. After renovating site and installing the necessary equipment, in July started a serial production as well as the deliveries to Fiat. In 2012 ADP Mladenovac Ltd. Successfully applied to the competent authorities of the Republic of
Serbia, to encourage investment and employment, so in the middle of 2012 it was concluded the Agreement on the allocation of funds for direct investments.
Image 10. EBITDA of AD Plastik Group since 2009 until 2012 (in million HRK)
ADP Kaluga was established and started with the production in 2012. After the renovation of rented site and installation of necessary equipment, in the third quarter the company started with serial production and product sales. Total revenues realized in the reporting period amounted to 9,8 million HRK and it was realized a net financial loss of 6,46 million HRK. In the first year of operations EBITDA amounted to 6,2 million HRK. This result is consequence of increased costs associated with starting a business, while the realization of reveneues started only in the third quarter.
Throughout the third quarter we won nominations for injection molded parts of exteriors and components of bumpers for Dacia Duster and Nissan versions of the same vehicle, for the injected positions of the exterior for Mitsubishi Outlander and part of molded positions for PSA. Sales activities are continuing on the basis of further completion and expansion of installed capacities.
ZAO AD Plastik, Kaluga at the end of 2012 resolved the issue of ownership over the site, with an area of 7.547 m2 with
Annual report of Group AD plastik Inc. belonging land, which has been used under a lease contract.
Image 11. Locations of AD Plastik's plants in Russia and the largest manufacturers of automobiles near plants
The growth of new car sales in Russia was mostly reflected in this company and it was achieved revenue growth greater than planned. Compared to the operating revenues from 2011 in the reporting period was recorded an increase in operating revenues of 59,9% and they amounted to 292,4 million HRK. The net profit increased in 47,61% compared to the previous year, and it amounted to 15,72 million HRK. In 2012 EBITDA amounted to 36,91 million HRK.
In the second quarter we won nominations for the new Dacia Logan which will be produced in AvtoVAZ. Initiated the process of preparation of the company for a new project. It was modified the existing production plant layout with the expansion of capacities.
Start of production for this car is planned for the second half of the year 2013 and in full year of production the expected additional revenue should be about 20 million EUR per year.
In early July, the company refinanced the loan through EBRD in rubles (equivalent to 7
million EUR), with this loan company significantly decreased the previous currency risk.
The company Euro APS in 2012 operated in accordance with the business plan, but it was recorded a reduction of operating revenues of 8,6 % in 2012 compared to 2011, and the operating revenues amounted to 652 million HRK. In the same period was achieved a net profit of 58,65 million HRK, and the share belonging to AD Plastik Group is 50%.
In September, the company successfully started the production of parts for the new model Dacia Logan 2, with this model Dacia kept a trend of launching a new model every year, the full effect of the realization of a new vehicle is expected during 2013.
Increase in new automobiles sales in Russia positively reflected on the company FADP, that recorded an increase in оperating revenues of 31,93 % in 2012 compared to the previous year, and the revenues amounted to 444,99 million HRK. Net profit of the company in the reporting period amounted to 0,39 million HRK.
In the year 2012, company achieved full capacity utilization of the facility, and most of the activities were focused on cost optimization and increase of profitability
With the aim of getting a clearer picture of bussines of AD Plastik Group, we prepared abbreviated financial reports of AD Plastik Group with consolidated financial statements of associated companies Euro APS and FADP for 2011 and 2012, in which AD Plastik has 50%, that is 40 % of ownership. We compared these reports to the financial reports of AD Plastik Group without consolidation of associated companies. In these abbreviated financial reports, further in this Report, Euro APS and FADP are consolidated on the basis of the belonging ownership share which AD Plastik Group has in this company.
| AD Plastik Group with | AD Plastik Group with | |||
|---|---|---|---|---|
| consolidation of | consolidation of | |||
| Positions | belonging part of | AD Plastik Group - | belonging part of | AD Plastik Group - |
| ownership in EURO APS | without consolidation | ownership in EURO APS | without consolidation | |
| and FADP | of associated companies | and FADP | of associated companies | |
| 2011. | 2011. | 2012. | 2012. | |
| OPERATING REVENUES | 1.223.160 | 736.416 | 1.281.207 | 781.715 |
| Sales revenues | 1.201.883 | 721.730 | 1.255.623 | 756.035 |
| Other operating revenues | 21.277 | 14.686 | 25.585 | 25.680 |
| OPERATING EXPENSES | 1.132.595 | 684.182 | 1.194.870 | 743.415 |
| Material expenses | 703.527 | 418.860 | 793.530 | 493.991 |
| Staff costs | 178.410 | 123.999 | 191.548 | 134.109 |
| Amortization | 62.730 | 49.482 | 69.712 | 54.136 |
| Other expenses | 187.929 | 91.841 | 140.081 | 61.179 |
| FINANCIAL INCOME | 26.144 | 30.844 | 24.240 | 33.607 |
| FINANCIAL EXPENSES | 41.345 | 40.210 | 44.648 | 41.225 |
| SHARE OF PROFIT FROM ASSOCIATED | ||||
| COMPANIES | 638 | 27.681 | -42 | 29.793 |
| TOTAL REVENUE | 1.249.941 | 794.941 | 1.315.580 | 845.114 |
| TOTAL EXPENSES | 1.173.940 | 724.392 | 1.249.182 | 784.640 |
| Profit before taxation | 76.001 | 70.549 | 65.886 | 60.474 |
| Profit tax | 11.333 | 5.881 | 9.861 | 4.449 |
| PROFIT FOR THE PERIOD | 64.663 | 64.663 | 56.017 | 56.017 |
Table 2. Profit and loss account of AD Plastik Group for 2011 and 2012 and in thousands of HRK
As can be seen from Table 2, business revenues of AD Plastik Group with consolidated belonging ownership share in Euro APS and FADP recorded an increase for 4,75% compared to the previous year and in total they amounted 1,28 billion HRK.
It is important to emphasize that the associated companies have no financial
liabilities arising from credits, besides the credits of the owners themselves in this company (that is Faurecia and AD Plastik). Total liabilities arising from credits of AD Plastik Group with belonging part of ownership in Euro APS and FADP are equal to total liabilities of AD Plastik Group without consolidation of associated companies and they amount in total to 328,40 million HRK.
Table 3. Balance sheet of AD Plastik Group with consolidation of financial reports of belonging part of ownership in Euro APS and FADP for 2011 and 2012 in thousands of HRK
| A/P | Code | Positions | AD Plastik Group with consolidation of belonging part of ownership in EURO APS and FADP 2011. |
AD Plastik Group with consolidation of belonging part of ownership in EURO APS and FADP 2012. |
|---|---|---|---|---|
| A. | Fixed assets | 737.731 | 796.864 | |
| B. | Current assets | 535.325 | 543.875 | |
| ASSETS | C. | prepayment & accrued inc. | 116.165 | 102.496 |
| A+B+C | TOTAL ASSETS | 1.389.222 | 1.443.234 | |
| A. | Capital and Reserves | 721.188 | 708.324 | |
| B. | Long-term liabilities | 89.835 | 201.690 | |
| LIABILITIES | C. | Provisions | 16.461 | 12.575 |
| D. | Short-term liabilities | 559.530 | 518.929 | |
| E. | deferred pay. of costs & future inc. | 2.208 | 1.717 | |
| F=∑(A-E) TOTAL LIABILITIES | 1.389.222 | 1.443.234 |
Below we are presenting the calculation of selected financial ratios for AD Plastik Group with consolidation of belonging part of ownership in Euro APS and FADP for AD Plastik Group without consolidation of associated companies.
| AD Plastik Group with | ||
|---|---|---|
| consolidation of | AD Plastik Group - | |
| belonging part of | without consolidation of | |
| Ratio | ownership in EURO APS | associated companies |
| and FADP | ||
| 2012. | 2012. | |
| Business revenues | 1.281.207 | 781.715 |
| Net profit | 56.017 | 56.017 |
| Assets | 1.443.234 | 1.303.876 |
| Net financial debt | ||
| (Long-term +short-term liabilities to | 249.564 | 295.389 |
| banks - money - financial assets) | ||
| Debt-service ratio | ||
| (Liabilities/ Assets) | 50,93% | 46,09% |
| EBIT (earnings before interest and | ||
| taxes) | 86.337 | 38.300 |
| EBITDA (earnings before interest and | ||
| taxes depreciation and amortization) | 156.049 | 92.436 |
| EPS (earnings per share) | 13,3 | 13,3 |
| Price/Sales | 0,35 | 0,57 |
| Price/EBITDA | 2,86 | 4,82 |
| Net financial debt/EBITDA | 1,60 | 3,20 |
Table 4. Financial ratios of AD Plastik Group in 2012 in thousands of HRK
Note: For the calculation of share price we used an average price of ADPL-R-A on the day 31.12.2012
During last 18 months, AD Plastik has won huge content of new business ventures on all markets.
The objective now is to develop future activities based on the following strategy:
manufacturers), increasing our development skills and securing our future business.
For this reasons, in the future it is necessary the further strengthening of:
2012, when amounted to 27.000 vehicles (full capacity);
Image 12.Product of AD Plastik – the front bumper
The global automotive industry demands the highest level of product quality, productivity and competitiveness, and also continious improvements. So the company could achieve these objectives, the majority of automotive manufacturers demand from their suppliers that they are certified according to quality management standard for suppliers in the automotive sector, better known as ISO/TS 16949.
The global automotive industry demands the highest level of product quality, productivity and competitiveness, and also continious improvements. So the company could achieve these objectives the majority of automotive manufacturers demand from their suppliers that they are certified according to quality management standard for suppliers in the automotive sector, better known as ISO/TS 16949.
This certification is issued for a period of three years and it must be confirmed once a year by the IATF (International Automotive Task Force). The plants in Solin and Zagreb are certified according to this standard valid until May 2013. Earlier this year is conducted an audit by independent authorized institution according to this standard and both of the plants will receive a new certification that will be valid for the following three years.
Plants in Tolyatti and Mladenovac also have this certification, while tha plant in Kaluga is in the process of preparation for obtaining this certification.
Image 13. ISO/TS 16949 certification for the AD Plastik plant in Solin
One of the objectives of the quality is taking care of environmental protection for the purpose of permanent reduction of negative environmental impact. Standard ISO 14001:2004 specifies the requests for enviromental managing system and provides a framework that company follows to ensure an effective environmental management system.
Image 14. ISO/TS 16949 certification for the AD Plastik plant in Zagreb
ISO 14001:2004 provides assurance to company management and employees, and to all other stakeholders that in the company an environmental impact of business is being measured in order to prevent environmental pollution.
Both of the AD Plastik plants in Croatia are certified according to this standard. Production plant in Solin is certified until July this year, while the plant in Zagreb is certfied untill July next year. Plants in Tolyatti and Mladenovac also have this certification, while the plant in Kaluga is in the process of preparation for obtaining this certification.
Image 15. ISO 14001:2004 certification for the AD Plastik plant in Solin
| BUREAU VERITAS Contification |
|---|
| Certification Augustud av |
| AD PLASTIK d.d. |
| MATOŠEVA R SOLIN, CROATIA |
| Bureau Ventus certify that the Management System of the above organisation has been audited and found to be in accordance with the requirements of the management system standards detailed below |
| STANDARD |
| ISO 14001:2004 |
| SCOPE OF SUPPLY |
| MANUFACTURING OF PLASTIC PARTS FOR AUTOMOTIVE INDUSTRY AND PACKAGING FOR FOOD INDUSTRY. |
| Chipped Adventure (Figs. 487 30 K.W. 2004) |
| Independent and analysis of the continued of the regarding that Management (suite), the condition of materials and if all RSLS (RSLS) To short the subtle of the confident school cultive (40) (31, 201-472). Further clothodes squeling the cape of the credibate and the applicability of the assumptional points transformant as as for situan' is smallig the equatories |
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Image 16. ISO 14001:2004 certification for the AD Plastik plant in Zagreb
Apart from the ISO certifications above mentioned, AD Plastik has Ford Q1 certification. This program of Ford demands from their suppliers and with it confirms: capable system, continuous improvement, monitoring performances and the most important of all – buyer satisfaction. Our plant in Solin an Tolyatti have the status Q1 for the buyer Ford.
Image 17. Certication Q1 of the buyer Ford
As a recognition for successful business in 2012, AD Plastik Inc. from Solin, is named the best large Croatian company by the Croatian Chamber of Economy (CCE) for 2012.
Image 18. Golden marten, the award of CCE
In order to elevate the existing level of awareness of the responsibility for sustainability to a higher level, AD Plastik decided to create and publicate the Sustainable Business Report for year 2012. That Report is focused on improving communication of AD Plastik with all their stakeholders and it was published on the websites of the company.
In the Group`s balance sheet positions relative to December 31st, 2011 the greatest changes were recorded in these positions:
(AOP 048) Receivables from government and other institutions (an increase of 15,80 mil. HRK) - mostly due to claims for VAT (Value Added Tax) from parent company;
(AOP 049) Other receivables (increase of 16,86 mil. HRK) – due to advance payment to suppliers of tools mainly in parent company;;
Results of associated companies EAPS Romania and FADP Holding France are included in the Group under the equity method.
Gross fee paid to the auditor for conducted audit of financial reports in 2012 amounted to 433.873,00 HRK.
II. According to the best of my knowledge:
Accounting Department Manager Board Member for Finances,
Accounting and Controlling Marica Jakelić Katija Klepo
III. AUDITED REPORTS
III.a AD Plastik d.d., Solin and its subsidiaries Consolidated financial statements and Independent Auditor's Report For the year ended 31 December 2012
| Responsibility for the financial statements | 1 |
|---|---|
| Independent Auditor's Report | 2-3 |
| Consolidated statement of comprehensive income | 4 |
| Consolidated statement of financial position | 5-6 |
| Consolidated statement of changes in shareholders' equity | 7 |
| Consolidated statement of cash flows | 8 |
| Notes to the consolidated financial statements | 9-56 |
Pursuant to the Accounting Act of the Republic of Croatia, the Management is responsible for ensuring that financial statements are prepared for each financial year in accordance with International Financial Reporting Standards ("the IFRSs"), which give a true and fair view of the financial position and results of operations of AD Plastik d.d., Solin ("the Company") and its subsidiaries ("the Group") for that year.
After making appropriate enquiries, the Management has a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, the Management continues to prepare the financial statements on a going-concern basis.
In preparing those financial statements, the responsibilities of the Management Board include ensuring that:
The Management Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company and the Group and must also ensure that the financial statements comply with the Accounting Act. The Management Board is also responsible for safeguarding the assets of the Company and the Group, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Signed on behalf of the Management by:
Mladen Peroš, President of the Management Board
AD Plastik d.d., Solin Matoševa 8 21210 Solin Republic of Croatia
23 April 2013
Deloitte d.o.o. ZagrebTower Radnička cesta 80 10 000 Zagreb Croatia Personal Identification No. (OIB): 11686457780
Tel: +385 (0) 1 2351 900 Fax: +385 (0) 1 2351 999 www.deloitte.com/hr
We have audited the accompanying consolidated financial statements of AD Plastik d.d. Solin ("the Company") and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position at 31 December 2012, and the related consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes to the financial statements.
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal controls relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
The Company is registered at the Commercial Court in Zagreb. Reg. No.: 030022053; - Registered capital paid in: HRK 44,900.00; Management: Branislav Vrtačnik and Paul Trinder; Commercial bank: Zagrebačka banka d.d., Paromlinska 2, 10 000 Zagreb, bank account no. 2360000- 1101896313; FX account no.: 2100312441 SWIFT Code: ZABAHR2X IBAN: HR27 2360 0001 1018 9631 3; Privredna banka Zagreb d.d., Račkoga 6, 10 000 Zagreb, bank account no. 2340009-1110098294; FX account no.: 70010-519758 SWIFT Code: PBZGHR2X IBAN: HR38 2340 0091 1100 9829 4; Raiffeisenbank Austria d.d., Petrinjska 59, 10 000 Zagreb, bank account no. 2484008-1100240905; FX account no.: 2100002537 SWIFT Code: RZBHHR2X IBAN: HR48 2484 0082 1000 0253 7
| 31.12.2012 | 31.12.2011 | ||
|---|---|---|---|
| Notes | |||
| Sales | 6 | 756,035 | 721,730 |
| Other income | 7 | 25,680 ____ |
14,686 ____ |
| Total income | 781,715 ____ |
736,416 ____ |
|
| Increase in the value of work in progress and finished products | (527) | (973) | |
| Cost of raw material and supplies | 8 | (387,909) | (345,680) |
| Cost of goods sold | 9 | (43,549) | (26,273) |
| Service costs | 12 | (62,006) | (47,880) |
| Staff costs | 10 | (151,554) | (142,637) |
| Depreciation and amortisation | 11 | (54,136) | (49,482) |
| Other external expenses | 13 | (37,638) | (62,895) |
| Other operating expenses | 14 | (3,993) | (7,466) |
| Provisions for risks and charges | 15 | (2,103) ____ |
(2,842) ____ |
| Total operating expenses | (743,415) ____ |
(684,182) ____ |
|
| Profit from operations | 38,300 ____ |
52,234 ____ |
|
| Financial income | 16 | 33,606 | 58,525 |
| Financial expenses | 17 | (41,225) | (40,210) |
| Equity income | 16 | 29,793 ____ |
- ____ |
| Net profit from financial activities | 22,174 ____ |
18,315 ____ |
|
| Profit before taxation | 60,474 ____ |
70,549 ____ |
|
| Income tax expense | 18 | (4,449) ____ |
(5,881) ____ |
| Profit for the year | 56,025 ____ |
64,668 ____ |
|
| Other comprehensive income | - ____ |
- ____ |
|
| Total comprehensive income | 56,025 ____ |
64,668 ____ |
|
| Profit attributable to: | |||
| Equity holders of the Company | 56,017 | 64,663 | |
| Non-controlling interests | 8 | 5 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the Company | 56,017 | 64,663 | |
| Non-controlling interests | 8 | 5 |
| Notes | 31.12.2012 | 31.12.2011 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 20 | 60,811 | 41,387 |
| Tangible assets | 21 | 597,798 | 537,993 |
| Investments in associates | 22 | 86,235 | 84,334 |
| Other financial assets | 23 | 70,107 | 75,272 |
| Deferred tax assets | 18 | 2,687 ____ |
994 ____ |
| Total non-current assets | 817,638 ____ |
739,980 ____ |
|
| Current assets | |||
| Inventories | 24 | 83,985 | 72,996 |
| Trade receivables | 25 | 185,996 | 155,946 |
| Other receivables | 26 | 78,341 | 45,435 |
| Current financial assets | 27 | 21,959 | 34,983 |
| Cash | 28 | 13,462 | 36,042 |
| Prepaid expenses and accrued income | 29 | 102,495 ____ |
116,165 ____ |
| Total current assets | 486,238 ____ |
461,567 ____ |
|
| TOTAL ASSETS | 1,303,876 ____ |
1,201,547 ____ |
| Notes | 31.12.2012 | 31.12.2011 | |
|---|---|---|---|
| Equity | |||
| Share capital | 30 | 419,958 | 419,958 |
| Reserves | 238,638 | 218,938 | |
| Profit for the year | 56,017 | 64,663 | |
| Non-controlling interests | 16 ____ |
12 ____ |
|
| Total equity | 714,629 ____ |
703,571 ____ |
|
| Long-term provisions | 31 | 2,498 | 4,829 |
| Long-term borrowings | 32 | 201,618 | 79,842 |
| Other non-current liabilities | 32 | 71 ____ |
69 ____ |
| Total non-current liabilities | 204,187 ____ |
84,740 ____ |
|
| Advances received | 33 | 98,539 | 121,247 |
| Trade payables | 34 | 123,784 | 120,630 |
| Short-term borrowings | 35 | 126,712 | 130,575 |
| Other current liabilities | 36 | 25,431 | 28,191 |
| Short-term provisions | 31 | 8,877 | 10,385 |
| Accrued expenses and deferred income | 37 | 1,717 ____ |
2,208 ____ |
| Total current liabilities | 385,060 ____ |
413,236 ____ |
|
| Total liabilities | 589,247 ____ |
497,976 ____ |
|
| TOTAL EQUITY AND LIABILITIES | 1,303,876 ____ |
1,201,547 ____ |
| S ha re i l ta ca p |
Ca i l ta p res er ve s |
Le l g a res er ve s |
Re se rve s fo r o wn ha s res |
Tr ea su ry ha s res |
Re ine d ta ing ea rn s |
To l ta i ty eq u i bu t tr te a b le to a he i t ty eq u ho l de rs f he t o Co mp an y |
No n l l ing tro co n in te ts res |
To l ta |
|
|---|---|---|---|---|---|---|---|---|---|
| Ba lan 3 De be 2 0 0 t 1 1 ce a ce m r |
9, 9 8 4 1 5 |
8 8 0 1 7, 4 |
6, 0 1 4 |
3 6 0 1 1, |
( 3 6 0 ) 1 1, |
6 4 5, 5 1 |
6 9, 3 9 5 1 |
4 1 |
6 9, 8 0 5 1 |
| C ha in l l ing in tro ter ts ng es no n-c on es |
- | - | - | - | - | - | - | ( ) 3 4 |
( ) 3 4 |
| Ex ha d i f fer inv in for ig tm ts c ng e en ce s o n es en e n bs i d iar ies su |
- | 3, 9 8 9 |
3 | - | - | ( ) 4, 6 5 9 |
( ) 6 6 7 |
- | ( ) 6 6 7 |
| D iv i de ds i d n p a |
- | - | - | - | - | ( 3 0, 6 7 2 ) |
( 3 0, 6 7 2 ) |
- | ( 3 0, 6 7 2 ) |
| Va lua ion f o ha t o wn s res |
- | - | - | 1 1 4 |
( 1 1 4 ) |
- | - | - | - |
| D is i bu ion loy tr t to s em p ee s |
- | 1, 6 0 8 |
- | ( ) 1, 9 6 2 |
1, 9 6 2 |
3 5 4 |
1, 9 6 2 |
- | 1, 9 6 2 |
| Sa le f o ha o wn s res |
- | 2 2 9 |
- | ( 9, 1 3 4 ) |
9, 1 3 4 |
8, 9 0 5 |
9, 1 3 4 |
- | 9, 1 3 4 |
| Pr f i for he t t o y ea r |
- | - | - | - | - | 6 4, 6 6 3 |
6 4, 6 6 3 |
5 | 6 4, 6 6 8 |
| Ba lan 3 1 De be 2 0 1 1 t ce a ce m r |
4 1 9, 9 5 8 |
1 9 3, 3 0 6 |
6, 1 4 3 |
3 7 8 |
( 3 7 8 ) |
8 4, 1 5 2 |
7 0 3, 5 5 9 |
1 2 |
7 0 3, 5 7 1 |
| C ha in l l ing in tro ter ts ng es no n-c on es |
- | - | - | - | - | - | - | ( ) 4 |
( ) 4 |
| Ex ha d i f fer inv in for ig tm ts c ng e en ce s o n es en e n bs i d iar ies su |
- | 4 2 8 |
- | - | - | ( 7, 5 7 6 ) |
( 7, 1 4 8 ) |
- | ( 7, 1 4 8 ) |
| D iv i de ds i d n p a |
- | - | - | - | - | ( ) 3 3, 5 6 6 |
( ) 3 3, 5 6 6 |
- | ( ) 3 3, 5 6 6 |
| Va lua ion f o ha t o wn s res |
- | - | - | ( 3 5 1 ) |
3 5 1 |
- | - | - | - |
| D is i bu ion loy tr t to s em p ee s |
- | - | - | ( 5 2 4 ) |
5 2 4 |
5 2 4 |
5 2 4 |
- | 5 2 4 |
| Sa le f o ha o wn s res |
- | - | - | 4, 7 7 3 |
( ) 4, 7 7 3 |
( ) 4, 7 7 3 |
( ) 4, 7 7 3 |
- | ( ) 4, 7 7 3 |
| Pr f i for he t t o y ea r |
- | - | - | 5 6, 0 1 7 |
5 6, 0 1 7 |
8 | 5 6, 0 2 5 |
||
| Ba lan 3 De be 2 0 2 t 1 1 ce a ce m r |
9, 9 8 4 1 5 |
9 3, 3 1 7 4 |
6, 3 1 4 |
2 6 4, 7 |
( 2 6 ) 4, 7 |
9 8 4, 7 7 |
6 3 7 1 4, 1 |
6 1 |
6 2 9 7 1 4, |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Profit for the year | 56,025 | 64,668 |
| Income tax expense | 4,449 | 5,881 |
| Depreciation and amortisation | 54,136 | 49,482 |
| Gains from sale of assets | 2,488 | 1,322 |
| Impairment allowance on trade receivables | - | 582 |
| Increase in long-term and short-term provisions | (3,839) ____ |
(331) ____ |
| Profit from operations before working capital changes | 113,259 ____ |
121,604 ____ |
| Increase in inventories | (10,989) | (15,530) |
| Increase in trade receivables | (30,050) | (4,133) |
| (Increase)/decrease in other receivables | (32,904) | 4,295 |
| Decrease in trade payables | 3,154 | 27,482 |
| (Increase)/decrease in advances received | (22,708) | 38,833 |
| (Increase)/decrease in other current liabilities | (16,054) | 1,592 |
| (Increase)/decrease in accrued expenses and deferred income | (491) | 503 |
| Increase/(decrease) in prepaid expenses | 13,670 ____ |
(40,616) ____ |
| Cash generated from operations | 16,887 ____ |
134,030 ____ |
| Sale of own shares | (4,773) | 9,134 |
| Investments in subsidiaries | (1,901) | (11,493) |
| Purchases of property, plant and equipment, and intangible assets | (135,853) | (71,197) |
| Investments in Funds | 2,800 | 8,278 |
| Short-term loans | - | (29,267) |
| Long-term loans | - | (49,051) |
| Received short-term loans | 15,389 ____ |
- ____ |
| Cash used in investing activities | (124,338) ____ |
(143,596) ____ |
| Dividends paid | (33,566) | (30,672) |
| Bonuses | 524 | - |
| Loans | 207,330 | 185,115 |
| Repayments of borrowings | (89,417) ____ |
(173,786) ____ |
| Cash generated from/(used in) financing activities | 84,871 ____ |
(19,343) ____ |
| Net cash flow | (22,580) ____ |
(28,909) ____ |
| At 1 January | 36,042 | 64,951 |
| Net cash inflow | (22,580) | (28,909) |
| At 31 December | 13,462 ____ |
36,042 ____ |
The company AD Plastik d.d., Solin, a public limited company for the production of motor vehicle spare parts and accessories and of plastic masses (abbreviated firm: AD PLASTIK d.d.), was established by a decision of the Founding Assembly dated 15 June 1994 following the transformation of the socially-owned entity Autodijelovi – Solin pursuant to the decision on the transformation of ownership and the Decision of the Croatian Privatisation Fund No. 01-02/92-06/392 of 6 December 1993. The Company is the legal successor of the socially-owned entity Autodijelovi and, according to the decision of the Commercial Court in Split No. Fi 6215/94 of 28 June 1994, assumed all of its assets and liabilities as of the date of registration in the court register.
By decision of the General Shareholders' Assembly dated 21.06.2007, the Statute of the Company of 8 July 2004 was amended and a decision was made to increase the share capital of the Company in cash. Pursuant to the Decision No. Tt-07/2145-3 of 25.09.2007, the increase of the share capital by HRK 125,987,500.00, effected by OAO Saint Petersburg Investment Company was registered, and the total subscribed capital now amounts to HRK 419,958,400.00 and consists of 4,199,584 shares, with a nominal amount of HRK 100.00 each. By the Share Transfer Agreement of 29 June 2009 OAO Spik transferred the shares of the AD Plastik d.d. to OAO Group Aerokosmicheskoe Oborudovanie, St. Petersburg, which transferred those shares to OAO HAK, Sankt Petersburg.
The Company shares were included in the listing of public limited companies on the Official Market of the Zagreb Stock Exchange on 1 October 2010.
The primary activity of the Company comprises manufacture of motor vehicle spare parts and accessories. The registered activities of the Company comprise the following:
1) Closed-end company ADP Luga, established by an Articles of Association of the Closed-end Company ADP LUGA of 26 March 2007.
Subsidary ZAO ADP Luga, Luga has change name and headqueater of the Company at the begining of FY 2012 in ZAP AD Plastik Kaluga, 248016, Skladskaja street 6, Kaluskla oblast, Russion Federation. AD Plastik d.d. has all shares and it is 100% owner.
The Company's registered activities comprise the following:
2) Closed-end foreign investment company PHR (abbreviated firm: ZAO PHR), established on 25 April 1995 and operating under the Constitution of the Russian Federation and the Federal Act on Incorporations. Its registered seat is in Russia, Samara, Krasnoglinski Raion, the village of Vintaj.
The company AD Plastik d.d., Solin, has an equity share of 99.95 percent.
The Company's registered activities comprise the following:
3) ADP Novo Mesto, d.o.o., Slovenia, established in 1997 and fully owned by Ad Plastik d.d., Solin.
The registered activities of the Company comprise the following:
Because of problems in the operations caused by the economic crisis, the business cooperation with the entities of the Sargumi Group was discontinued, and the General Shareholders' of the Company adopted in their meeting of 19 October 2011 a decision to start liquidation proceedings, which was registered at the Commercial Court in Split on 28 November 2011.
1) EURO Auto Plastik Systems s.r.l., Romania, established on 20 August 2002 as a limited liability company with its registered seat in Romania, Mioveni, ul. Uzinei, No. 2A.
The equity share of AD Plastik d.d., Solin, in the company is 50 percent.
The principal activities of the associate are as follows:
The equity share of AD Plastik d.d., Solin, in the associate is 40 percent.
The principal activities of the associate are as follows:
The equity share of AD Plastik d.d., Solin, is 49 percent in share caital of Faurecia AD Plastik Automotive Romania SRL.
The principal activities of the associate are as follows:
An associate is an entity over which the Group has significant influence but which it does not control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Commonly, an equity share from 20 to 50 percent represents an investment in an associate.
In these consolidated financial statements, investments in associates are presented under the equity method.
At 31 December 2012, the number of staff employed was 2,711 (2011: 2,489).
| 2012. | 2011. | |
|---|---|---|
| AD Plastik d.d. | 830 | 872 |
| ZAO ADP Luga | - | 3 |
| ZAO PHR | 661 | 490 |
| AD Plastik d.o.o. | 29 | 41 |
| SG Plastik d.o.o. | - | - |
| ADP d.o.o. Mladenovac | 75 | - |
| ZAO ADP Kaluga | 137 | - |
| EURO APS | 652 | 658 |
| FADP | 327 | 425 |
| Mandate | ||
|---|---|---|
| Members of the Supervisory Board: | ||
| Josip Boban (Chairman) | From 19.07.2012 | To 19.07.2016 |
| Nikola Zovko (Deputy Chairman) | From 19.07.2012 | To 19.07.2016 |
| Marijo Grgurinović | From 14.07.2011 | To 14.07.2015 |
| Igor Anatoljevič Solomatin | From 14.07.2011 | To 14.07.2015 |
| Tomislav Dulić | From 11.09.2008 | To 11.09.2012 |
| Drandin Dmitrij Leonidovič | From 19.10.2011 | To 19.10.2015 |
| Nikitina Nadežda Anatoljevna | From 19.10.2011 | To 19.10.2015 |
| Mladen Peroš (President) | From 19.07.2012 | To 19.07.2016 |
|---|---|---|
| Ivica Tolić | From 19.07.2012 | To 19.07.2016 |
| Katija Klepo | From 19.07.2012 | To 19.07.2016 |
The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current period:
The adoption of the amended and revised Standards and Interpretation has not lead to changes in the Group's accounting policies.
At the date of authorization of these financial statements the following Standards, revisions and Interpretations were in issue but not yet effective:
The Group has elected not to adopt these Standards, revisions and Interpretations in advance of their effective dates and anticipates that the adoption of these standards, revisions and interpretations will have no material impact on the consolidated financial statements in the period of initial application.
Set out below are the principal accounting policies consistently applied in the preparation of the financial statements for the current and prior years.
These financial statements are prepared in accordance with International Financial Reporting Standards and Croatian laws.
The financial statements of the Group have been prepared on the historical cost basis, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and Croatian laws.
The Group maintains its accounting records in the Croatian language, in Croatian Kuna and in accordance with Croatian laws and the accounting principles and practices observed by enterprises in Croatia.
The preparation of financial statements in conformity with International Financial Reporting Standards (IFRSs) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4. These consolidated financial statements have been prepared under the assumption that the Group will continue as a going concern.
The consolidated financial statements of the Group represent aggregate amounts of assets, liabilities, capital and reserves of the Group as of 31 December 2012, and the results of its operations for the year then ended. Some of the financial captions have been reclassified in these financial statements compared to the prior year, as the management is of the opinion that the reclassification provides a better presentation of the financial statements as a whole.
The accounting policies are consistently applied by all the Group entities.
The consolidated financial statements of the Group comprise the consolidated financial statements of the Company and its subsidiaries.
Subsidiaries are entities controlled by the Company. Control is present when the Company is entitled to determine, directly or indirectly, the financial and business policies of the investee so as to derive benefits from its operations. The financial statements of the subsidiaries are included in the Group financial statements on a consolidated basis from the date that control commences until the date that control ceases.
Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
Revenue is measured at the fair value of the consideration received or receivable for products, goods or services sold in the regular course of operations.
Revenues are stated net of value added tax, estimated returns, discounts and rebates. Revenue is recognised when the amount of the revenue can be measured reliably and when future economic benefits are expected to flow into the Group.
Product sales are recognised when the products are delivered to, and accepted by the customer and when the collectability of the receivables is virtually certain.
Income from the manufacture of tools is recognised using the stage-of-completion method to determine the amount of income and costs attributable to a certain period.
Interest income is recognised on a time basis, using the effective interest method. Interest earned on balances with commercial banks (demand and term deposits) is credited to income for the period as it accrues. Interest on trade debtors is recognised as income upon settlement.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are included in profit or loss in the period in which they are incurred.
Transactions in foreign currencies are translated into Croatian kunas at the rates of exchange in effect at the dates of the transactions. Cash, receivables and payables denominated in foreign currencies are retranslated at the rates of exchange in effect at the date of the statement of financial position. Gains and losses arising on translation are included in the statement of comprehensive income for the year. At 31 December 2012, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.545624 (31 December 2011: HRK 7.53042 for 1 EUR).
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognised in the income statement, except where it relates to items recognised directly in equity, in which case it is also recognised in equity. Current tax represents tax expected to be paid on the basis of taxable profit for the year, using the tax rate enacted at the balance sheet date, adjusted by appropriate prior-period items.
Under Croatian tax regulations, group entities are not subject to taxation on a consolidated bases, and tax losses cannot be transferred within group entities. Subsidiaries are subject to taxation in their respective jurisdictions.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates in effect at the balance sheet date.
The measurement of deferred tax liabilities and assets reflects the amount that the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred taxes are not discounted and are classified in the balance sheet as non-current assets and/or non-current liabilities. Deferred tax assets are recognised only to the extent that it is probable that the related tax benefit will be realised. At each balance sheet date, the Company reviews the unrecognised potential tax assets and the carrying amount of the recognised tax assets.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities.
In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over cost.
Tangible fixed assets are recognised initially at cost and subsequently at cost less accumulated depreciation. The initial cost of property, plant and equipment comprises its purchase price, including import duties and nonrefundable sales taxes and any directly attributable costs of bringing an asset to its working condition and location for its intended use. Maintenance and repairs, replacements and improvements of minor importance are expensed as incurred. Where it is obvious that expenses incurred resulted in increase of expected future economic benefits to be derived from the use of an item of tangible or intangible assets in excess of the originally assessed standard performance of the asset, they are added to the carrying amount of the asset. Gains or losses on the retirement or disposal of tangible fixed assets are included in the statement of comprehensive income in the period they occur. Depreciation commences on putting an asset into use. Depreciation is provided so as to write down the cost or revalued amount of an asset over the estimated useful life of the asset using the straight-line method as follows:
| Depreciation rate in | Depreciation rate in | |
|---|---|---|
| 2012 | 2011 | |
| 1. Tangible assets | ||
| Buildings | 1.50-4.00 | 1.50-4.00 |
| Machinery | 7.00-10.00 | 7.00-10.00 |
| Tools, furniture, office and | 10.00-20.00 | 10.00-20.00 |
| laboratory equipment and | ||
| accessories, measuring and | ||
| control instruments | ||
| Vehicles | 20.00 | 20.00 |
| IT equipment | 20.00 | 20.00 |
| Other | 10.00 | 10.00 |
| 2. Intangible assets | 20.00 | 20.00 |
At each reporting date the Gruop reviews the carrying amounts of its tangible and intangible assets to determine whether there is an indication that the assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
An associate is an entity over which the Company has significant influence but which is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. Under this method, the Group's share in the profit or loss of associates is recognised in the income statement from the date of acquisition of significant influence until the date on which significant influence is lost.
Investments are recognised initially at cost and are subsequently adjusted by the changes in the acquirer's share of the net profit of the investee. Where the Group's share of losses in an associate is equal to or higher than the equity investment in the associate, no further losses are recognised, except where the Group has assumed an obligation or committed to make a payment on behalf of the associate.
Inventories of raw material and spare parts are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average cost method. Net realisable value represents the estimated selling price in the ordinary course of business less all variable selling costs.
Cost of work in progress and finished products comprises the cost of raw material and supplies, direct labour and other costs and the portion of overheads directly attributable to work in progress.
Small inventory is written off when put in use.
The cost of product inventories i.e. the production costs is based on direct material used, the cost of which is determined using the weighted average cost method, then direct labour costs, and fixed overheads at the actual level of production which approximates the normal capacities, as well as variable overheads that are based on the actual use of the production capacities. Merchandise on stock is recognised at purchase cost.
Trade debtors and prepayments are carried at nominal amounts less an appropriate allowance for impairment for uncollectible amounts.
Impairment is made whenever there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, the probability of bankruptcy proceedings at the debtor, or default or delinquency in payment are considered objective evidence of impairment. The amount of the impairment loss is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The impairment losses on trade receivables are recognised in the income statement within 'Expenses'.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
Cash comprises account balances with banks, cash in hand, deposits and securities at call or with maturities of less than three months.
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each date of the statement of financial position and adjusted to reflect the current best estimate. Where the effect of discounting is material, the amount of the provision is the present value of the expenditures expected to be required to settle the obligation, determined using the estimated risk free interest rate as the discount rate. Where discounting is used, the reversal of such discounting in each year is recognised as a financial expense and the carrying amount of the provision increases in each year to reflect the passage of time.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the date of the statement of financial position, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
In the normal course of business the Group makes payments, through salary deductions, to mandatory pension funds on behalf of its employees as required by law. All contributions made to the mandatory pension funds are recognised as salary expense when accrued. The Group does not operate any other retirement benefit plan and, consequently, has no other obligations in respect of the retirement benefits for its employees. In addition, the Group is not obliged to provide any other post-employment benefits.
Termination benefits are payable when employment is terminated by the Group before the normal retirement date. The Group recognises its termination benefit obligations in accordance with applicable union agreements.
Benefits falling due more than 12 months after the reporting date are discounted to their present value.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each reporting date. Actual gains and losses are recognised in the period in which they arise.
Past service cost is recognised immediately to the extent that the benefits are already vested. Otherwise, it is amortised on a straight-line basis over certain period until the benefits become vested.
Financial assets and financial liabilities included in the accompanying financial statements consist of cash and cash equivalents, marketable securities, trade and other receivables, trade and other payables, long-term receivables, loans, borrowings and investments. The details of the recognition and measurement of those items are presented in the corresponding policies.
Investments are recognised and derecognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Financial assets available for sale are classified as current assets if the management intends to realise those assets within 12 months from the date of the statement of financial position. Every purchase and sale transaction in recognised on the settlement date. Investments are recognised initially at cost, which represents the fair value of the consideration given, including transaction costs. Available-for-sale investments are subsequently measured at fair value, with no deduction of transaction costs, by reference to their market prices prevailing at the date of the statement of financial position. Investments whose fair values cannot be determined are carried at cost and reviewed for impairment at each reporting date.
The effective interest method is a method of calculating the amortised cost of a financial asset or liability, and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial asset or liability, or, where appropriate, a shorter period.
Financial assets are assessed for indicators of impairment at each date of the statement of financial position. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of a financial asset is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
Contingent liabilities have not been recognised in these financial statements. They are not disclosed unless the possibility of outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but it is disclosed when the inflow of economic benefits becomes probable.
Events after the date of the statement of financial position that provide additional information about the Company's position at that date (adjusting events) are reflected in the financial statements. Post-year-end events that are not adjusting events are disclosed in the notes when material.
In the application of the Group's accounting policies, which are described in Note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results may differ from those estimates.
The estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.
Areas of estimation include, but are not limited to, depreciation periods and residual values of property, plant and equipment, and of intangible assets, value adjustment of inventories, impairment of receivables, and litigation provisions. The key areas of estimation in applying the Company's accounting policies that had a most significant impact on the amounts recognized in the financial statements were as follows:
As described in the Note 3.8, the Group reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. Property, plant and equipment are recognised initially at cost, less accumulated depreciation.
A deferred tax asset is recognized only to the extent that it is probable that the related tax benefit will be realised. In determining the amount of deferred taxes that can be recognised significant judgements are required, which are based on the probable quantification of time and level of future taxable profits, together with the future tax planning strategy.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
The cost of defined benefits is determined using actuarial estimates. Actuarial estimates involve assumptions about discount rates, future salary increases and the mortality or fluctuation rates. Because of the long-term nature of those plans, there is uncertainty surrounding those estimates.
The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance.
Segment revenue analysis by country:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Slovenia | 232,059 | 250,840 |
| Russia | 292,648 | 237,999 |
| Germany | 102,906 | 121,274 |
| France | 71,506 | 83,876 |
| Croatia | 15,600 | 16,478 |
| Romania | 12,968 | 7,534 |
| Other countries | 28,348 ____ |
3,829 ____ |
| 756,035 ____ |
721,830 ____ |
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign sales | 736,662 | 693,492 |
| Domestic sales | 19,373 ____ |
28,238 ____ |
| 756,035 ____ |
721,730 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Income from sale of inventories | 14,795 | - |
| Rental income | 3,861 | 2,478 |
| Income from bonuses provided by suppliers | 2,392 | 2,698 |
| Income from consumption of own products, goods and services | 1,155 | 1,018 |
| Income from recharged service costs | 566 | 1,830 |
| Income from damages collected | 224 | 183 |
| Income from sale of assets | - | 3,493 |
| Income from sale of own shares | - | 2,941 |
| Other operating income | 2,687 ____ |
45 ____ |
| 25,680 ____ |
14,686 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Direct materials | 352,450 | 326,060 |
| Electricity | 14,436 | 14,538 |
| Other expenses | 21,023 ____ |
5,082 ____ |
| 387,909 ____ |
345,680 ____ |
|
| 9. COST OF GOODS SOLD |
||
| 31.12.2012 | 31.12.2011 | |
| Cost of goods sold | 41,377 | 24,082 |
| Cost of spare parts sold | 623 | 528 |
| Cost of direct material sold | 384 | 1,162 |
| Other costs of goods sold | 1,165 ____ |
501 ____ |
| 43,549 ____ |
26,273 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Net wages and salaries | 83.541 | 76,248 |
| Taxes and contributions out of salaries | 27.461 | 26,471 |
| Contributions on salaries | 23.107 | 21,280 |
| Bonuses for employees | - | 1,960 |
| Other staff costs | 17,445 ____ |
16,678 ____ |
| 151,554 ____ |
142,637 ____ |
Other staff costs comprise various supports, transportation costs, per diems, overnight accommodation costs and business travel costs, reimbursement of a portion of costs for the use of personal cars for business purposes and other business related costs.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Depreciation | 37,918 | 32,163 |
| Amortisation | 16,218 ____ |
17,319 ____ |
| 54,136 ____ |
49,482 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Transport | 29,127 | 25,296 |
| Rental costs | 9,139 | 6,106 |
| Regular and preventive maintenance costs - machinery | 6,790 | 3,765 |
| Telecommunications and information system costs | 1,858 | 1,108 |
| Forwarding and shipping costs | 903 | 1,121 |
| Communal fees | 872 | 1,181 |
| Water supply | 862 | 1,037 |
| Tool modification costs | 727 | 987 |
| Commissions | 288 | 2,149 |
| Other expenses | 11,440 ____ |
5,130 ____ |
| 62,006 ____ |
47,880 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Temporary service costs - manufacture of tools | 16,822 | 40,848 |
| Professional service cost | 5,280 | 5,052 |
| Bank charges | 2,798 | 2,409 |
| Insurance premiums | 1.713 | 1,092 |
| Communal fees for the use of construction plots | 1.439 | 1,425 |
| Cost of goods provided free of charge | 867 | 805 |
| Payment operation charges | 849 | 505 |
| Professional training costs | 436 | 512 |
| Other fees (Supervisory Board) | 397 | 607 |
| Entertainment | 375 | 783 |
| Customer complaints | 327 | 198 |
| Translation service costs | 215 | 175 |
| Gifts for employees' children | 212 | 574 |
| Occupational Health and Safety service costs | 206 | 190 |
| Water management fee | 169 | 164 |
| Forest reproduction levies | 164 | 317 |
| Net book value of disposed intangible fixed assets | - | 27 |
| Net book value of disposed intangible fixed assets | - | 26 |
| Other non-material costs | 2.344 | 2,473 |
| Other external costs | 3.025 ____ |
4,713 ____ |
| 37.638 ____ |
62,895 ____ |
Most of other external costs comprise manufacturing of tools for the production of car spare parts per orders of the ultimate car manufacturers and include the cost of the tools, tool modification services, transportation and other handling charges.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Property tax | 1.740 | 1,565 |
| Other expenses | 2,253 ____ |
5,901 ____ |
| 3.993 ____ |
7,466 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Provisions under actuarial calculations | 1,707 | 1,661 |
| Vacation accruals | 348 | 934 |
| Litigation provisions | 38 | 247 |
| Provisions for bonuses - employees | 10 ____ |
- ____ |
| 2,103 ____ |
2,842 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Dividend income | 29,793 | 27,681 |
| Foreign exchange gains | 16,739 | 21,246 |
| Interest income | 14,323 | 6,418 |
| Other finance revenue | 2,544 ____ |
3,180 ____ |
| 63,399 ____ |
58,525 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign exchange losses | 17,143 | 26,060 |
| Interest expense | 16,879 | 9,988 |
| Other finance costs | 7,203 ____ |
4,162 ____ |
| 41,225 ____ |
40,210 ____ |
Income tax comprises the following:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Current tax | 6,142 | 6,104 |
| Deferred tax | (1,693) ___ |
(223) ___ |
| 4,449 ___ |
5,881 ___ |
|
Deferred tax, as presented in the statement of financial position, is as follows:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Balance at 1 January | 994 | 771 |
| Deferred tax assets recognised | 1,693 ___ |
223 ___ |
| Balance at 31 December | 2,687 ___ |
994 ___ |
Deferred tax assets arise from the following:
| 2012 | Opening balance |
Credited / (Charged) to statement of comprehensive income |
Closing balance |
|---|---|---|---|
| Temporary differences: | |||
| Provisions for long-service and termination benefits | 994 | 1,693 | 2,687 |
| ___ | ___ | ___ | |
| Balance at 31 December | 994 | 1,693 | 2,687 |
| ___ | ___ | ___ | |
| 2011 | Opening balance |
Credited / (Charged) to statement of comprehensive income |
Closing balance |
| Temporary differences: | - | ||
| Provisions for long-service and termination benefits | 771 | 223 | 994 |
| ___ | ___ | ___ | |
| Balance at 31 December | 771 | 223 | 994 |
| ___ | ___ | ___ |
The relationship between the accounting profit and tax losses carried forward can be shown as follows:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Group profit | 60,474 ___ |
70,549 ___ |
| 70% of entertainment expenses | 200 | 426 |
| 30 % of the cost of use of private cars | 419 | 378 |
| Taxable deficits | 3 | - |
| Costs of forced collection of taxes and other levies | - | 27 |
| Fines and penalties | 3 | 72 |
| Interest from related-party relationships | 660 | 2 |
| Written-off receivables | 19 | 261 |
| Provisions | 1,674 | 3,105 |
| Other taxable revenues | 77 ___ |
1,962 ___ |
| Tax base increasing items | 3,055 ___ |
6,233 ___ |
| Dividend income | (27,897) | (26,817) |
| Subsequent collection of written-off receivables | (14) | (101) |
| Other operating expenses from prior periods | - | (1,487) |
| Other non-taxable revenues | (2,234) | (39) |
| Government grants for training and education | (246) ___ |
(229) ___ |
| Tax base decreasing items | (30,391) ___ |
(28,673) ___ |
| Income tax base before the utilisation of tax losses brought forward | 33,138 ___ |
48,109 ___ |
| Tax base | 33,138 ___ |
48,109 ___ |
| Tax at the weighted average rate | 8,025 | 9,122 |
| Tax reliefs | (3,576) ___ |
(3,241) ___ |
| Current tax liability | 4,449 ___ |
5,881 ___ |
On 24 October 2012 the Company filed with the Ministry of Economy the Application for Incentive Measures for the investment project "Expansion of Production for the Purpose of Export of Car Industry Products", in accordance with the Act on Investment Promotion and Development of Investment Climate (OG 111/2012 and 28/2013) and the Investment Promotion and Development of Investment Climate (OG 40 of 5 April 2013).
As a result, the Company made investments in fixed assets in November and December 2012, having thus met the prerequisites for the utilistation of the tax incentives for 2012.
The Application meets the requirements set out in the above-mentioned regulations, the required capital investments were made, and the Company uses the tax incentives in its 2012 financial statements on a valid basis.
Basic earnings per share are determined, by dividing the Group's net profit by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares redeemed and held by the Company as treasury shares. There were no circumstances that would give rise to a dilution of the earnings per share reported above.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Net profit attributable to the Company shareholders | 56,025 | 64,668 |
| Weighted average number of shares | 4,159,303 ___ |
4,195,841 ___ |
| Basic earnings per share (in HRK) | 13.47 ___ |
15.41 ___ |
| Licences | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| Balance at 31 December 2010 | 67 | 3,108 | 102,932 | 106,107 |
| Additions | - | 315 | 14,835 | 15,150 |
| Disposals and retirements | (12) | - | - | (12) |
| ___ | ____ | ____ | ____ | |
| Balance at 31 December 2011 | 55 | 3,423 | 117,767 | 121,245 |
| ___ | ___ | ___ | ___ | |
| Additions | - | 47 | 35,595 | 35,642 |
| Disposals and retirements | ____ | - ____ |
- ____ |
- ____ |
| Balance at 31 December 2012 | 55 | 3,470 | 153,362 | 156,887 |
| ____ | ____ | ____ | ____ | |
| Accumulated depreciation | ||||
| Balance at 31 December 2010 | - | 698 | 61,841 | 62,539 |
| Charge for the year | - | 629 | 16,690 | 17,319 |
| ____ | ____ | ____ | ____ | |
| Balance at 31 December 2011 | - | 1,327 | 78,531 | 79,858 |
| ___ | ___ | ___ | ___ | |
| Charge for the year | - | 208 | 16,010 | 16,218 |
| ____ | ____ | ____ | ____ | |
| Balance at 31 December 2012 | - | 1,535 | 94,541 | 96,076 |
| ____ | ____ | ____ | ____ | |
| Net book value | ||||
| At 31 December 2012 | 55 | 1,935 | 58,821 | 60,811 |
| ___ | ___ | ___ | ___ | |
| At 31 December 2011 | 55 | 2,096 | 39,236 | 41,387 |
| ___ | ___ | ___ | ___ |
Projects comprise investments in the development of new products that are expected to generate revenue in future periods. Consequently, the costs are amortised over the period in which the related economic benefits flow into the Group.
| Land | Buildings | Plant and equipment |
Assets under construction |
Other | Total | |
|---|---|---|---|---|---|---|
| Cost | ||||||
| Balance at 31 December 2010 | 134,620 | 260,837 | 391,288 | 3,796 | 3,622 | 794,163 |
| Additions | 759 | 22,194 | 15,776 | 17,055 | 263 | 56,047 |
| Transfer from assets under development |
- | 1,663 | 2,486 | (4,249) | 100 | - |
| Disposals and retirements | - | - | (1,310) | - | - | (1,310) |
| Balance at 31 December 2011 | 135,379 | 284,694 | 408,240 | 16,602 | 3,985 | 848,900 |
| Additions | 1,291 | 11,251 | 35,540 | 52,129 | - | 100,211 |
| Transfer from assets under development |
3,306 | 1,196 | 8,232 | (12,981) | 247 | - |
| Disposals and retirements | - | - | (2,038) | - | (2,683) | (4,721) |
| Balance at 31 December 2012 | 139,976 | 297,141 | 449,974 | 55,750 | 1,549 | 944,390 |
| Accumulated depreciation | ||||||
| Balance at 31 December 2010 | - | 54,861 | 223,297 | - | 586 | 278,744 |
| Charge for the year 2011 | - | 4,319 | 27,167 | - | 677 | 32,163 |
| Balance at 31 December 2011 | - | 59,180 | 250,464 | - | 1,263 | 310,907 |
| Charge for the year 2012 | - | 6,222 | 31,410 | - | 286 | 37,918 |
| Disposals and retirements | - | - | (2,233) | - | - | (2,233) |
| Balance at 31 December 2012 | - | 65,402 | 279,641 | - | 1,549 | 346,592 |
| Net book value | ||||||
| At 31 December 2012 | 139,976 | 231,739 | 170,333 | 55,750 | - | 597,798 |
| At 31 December 2011 | 135,379 | 225,514 | 157,776 | 16,602 | 2,722 | 537,993 |
At 31 December 2012, the net book value of tangible assets pledged as collateral with commercial banks amounts to HRK 306,598 thousand, and the balance of short-term and long-term loans secured by those assets is HRK 266,165 thousand.
| Name of associate | Principal activity | Country of incorporation and |
Ownership interest in % | Amount of equity investment, HRK'000 |
||
|---|---|---|---|---|---|---|
| business | 2012 | 2011 | 2012 | 2011 | ||
| EURO AUTO PLASTIC SYSTEMS |
Manufacture of other vehicle spare parts and accessories |
Mioveni, Romania | 50.00% | 50.00% | 68,285 | 66,778 |
| FAURECIA AD PLASTIK ROMANIA (FAAR) |
Manufacture of other vehicle spare parts and accessories |
Mioveni, Romania | 49.00% | 49.00% | 258 | 258 |
| FAURECIA ADP HOLDING |
Manufacture of other vehicle spare parts and accessories |
Nanterre, France | 40.00% | 40.00% | 17,692 | 17,298 |
| 86,235 | 84,334 |
| Name of associate | Country of incorporation and business |
Amount of equity investment 31.12.2011 |
Share in the result for the year 2012 |
Dividends paid | Amount of equity investment 31.12.2012 |
|---|---|---|---|---|---|
| EURO AUTO PLASTIC SYSTEMS FAURECIA AD PLASTIK ROMANIA |
Mioveni, Romania | 66,778 | 29,399 | (27,892) | 68,285 |
| (FAAR) FAURECIA ADP |
Mioveni, Romania | 258 | - | 258 | |
| HOLDING | Nanterre, France | 17,298 | 394 | - | 17,692 |
| 84,334 | 29,793 | 27,892 | 86,235 |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Long-term loans to associates | 55,333 | 53,309 |
| Long-term loans to unrelated companies | 17,118 | 24,738 |
| Other financial assets | 64 | 64 |
| Current portion of long-term loan receivables | (2,408) ____ |
(2,839) ____ |
| 70,107 ____ |
75,272 ____ |
A long-term investment loan with a variable interest and maturity in 2014 was granted to an associate. Loan has been secured with adequate collaterals.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Raw material and supplies on stock | 54,085 | 39,899 |
| Merchandise | 14,768 | 19,473 |
| Finished products | 11,622 | 11,093 |
| Work in progress | 2,000 | 2,531 |
| Predujmovi za zalihe | 1,007 | - |
| Dugotrajna imovina namijenjena prodaji | 503 ____ |
- ____ |
| 83,985 ____ |
72,996 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign trade receivables | 183,598 | 152,959 |
| Domestic trade receivables | 14,420 | 15,027 |
| Impairment allowance on receivables | (12,022) ____ |
(12,040) ____ |
| 185,996 ____ |
155,946 ____ |
The average credit period on sales is 78 days. The Company has provided for all for all receivables handed over to the courts for collection, regardless of the past due period, as well as for all receivables that are past due and assessed as doubtful of collection.
The Company seeks and obtains from its domestic customers debentures as collaterals in the amount of the receivables.
Set out below is an analysis of major trade receivables:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Revoz, Slovenia | 43,566 | 56,234 |
| Visteon Deutschland, Germany | 17,989 | 31,061 |
| OAO Avtovaz, Russia | 56,507 | 30,181 |
| Peugeot Citroen Automobiles, France | 5,338 | 5,689 |
| Renault SAS , France | 6,498 | 5,802 |
| Other debtors | 68,120 ____ |
39,019 ____ |
| 198,018 ____ |
167,986 ____ |
Movements in the impairment allowance on domestic trade receivables were as follows:
| 31/12/2012 | 31.12.2011 | |
|---|---|---|
| Balance at beginning of the year | 10,245 | 9,719 |
| Additionally impaired during the year | - | 598 |
| Amounts collected or eliminated during the year | (4) ____ |
(72) ____ |
| Total impairment allowance on domestic trade receivables | 10,241 ____ |
10,245 ____ |
| Balance at beginning of the year | 1,795 | 1,739 |
| Additionally impaired during the year | - | 200 |
| Amounts collected or eliminated during the year | (14) ____ |
(144) ____ |
| Total impairment allowance on foreign trade receivables | 1,781 ____ |
1,795 ____ |
| Total impairment allowance | 12,022 ____ |
12,040 ____ |
All receivables provided for are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables:
| 31.12.2012 | 31.12.2011 |
|---|---|
| 622 | 640 |
| 11,400 | 11,400 ____ |
| 12,022 | 12,040 ____ |
| _ _ |
Ageing analysis of receivables past due but not impaired:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| 1 - 365 days | 9,238 | 6,625 |
| Over 365 days | 1,644 ____ |
1,856 ____ |
| 10,882 ____ |
8,481 ____ |
Receivables from associated companies
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Interest receivable | 16,574 | 6,911 |
| Trade receivables | 3,919 ____ |
4,549 ____ |
| 20,493 ____ |
11,460 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Prepayments made | 36,450 | 22,845 |
| Receivables from the State and state institutions institutions | 35,062 | 19,266 |
| Due from employees | 988 | 736 |
| Other receivables | 5,841 ____ |
2,588 ____ |
| 78,341 ____ |
45,435 __ |
Amounts due from the State and state institutions comprise receivables from the State Budged in respect of VAT refund, refunds from the Croatian Health Insurance Fund and similar.
Foreign prepayments comprise prepayments made for purchases of production equipment and tools.
| 31.12.2012 | 31.12.2011 |
|---|---|
| 18,547 | 14,977 |
| 2,408 | 2,839 |
| 1,000 | 6,790 |
| - | 2,800 |
| 4 | 7,577 ____ |
| 21,959 ____ |
34,983 __ |
| ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Current account balance | 12,560 | 7,512 |
| Deposits with a term of up to 3 months | 902 ____ |
28,530 ____ |
| 13,462 ____ |
36,042 ____ |
Accrued income in the amount of HRK 95,861 thousand (2011: HRK 110,035 thousand) represent amounts relating to the manufacture of tools for a known customer. Income from the manufacture of tools is recognised using the stage-of-completion method to determine the amount of income and costs attributable to a certain period.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Other accrued income on tools | 95,861 | 110,035 |
| Other accrued income | 3,117 | 3,214 |
| Prepaid operating expenses | 3,517 ____ |
2,916 ____ |
| 102,495 ____ |
116,165 ____ |
Subscribed capital amounts to HRK 419,958 thousand and consists of 4,199,580 shares, with a nominal value of HRK 100.00 per share (2011: HRK 419,958 thousand, 4,199,580 shares, with a nominal value of HRK 100 each). The shareholders with over 2 percent of the shares at 31 December 2012 were as follows:
| Number of | Ownership | |||
|---|---|---|---|---|
| Shareholder | Headquarters | shares | in % | Type of account |
| OAO Holding Autokomponenti | Saint Petersburg, Russia | 1,259,875 | 30.00% | Primary account |
| HYPO ALPE-ADRIA-BANK | Zagreb, Croatia | 257,362 | 6.13% | Pension fund |
| d.d./RAIFFEISEN | ||||
| MANDATORY PENSION FUND | ||||
| ADP-ESOP d.o.o. | Zagreb, Croatia | 219,312 | 5.23% | Primary account |
| PBZ d.d. | Zagreb, Croatia | 158,812 | 3.78% | Custody account |
| ERSTE & SEIERMARKISCHE | Zagreb, Hrvatska | 110,349 | 2.63% | Custody account |
| BANK d.d. | ||||
| Bakić Nenad Total: |
Zagreb, Croatia | 107.498 2,113,648 |
2,56% 50.33% |
Primary account |
| Short-term: | Long-term: | |||
|---|---|---|---|---|
| 31 December 2012 |
31 December 2011 |
31 December 2012 |
31 December 2011 |
|
| Jubilee awards (long-service benefits) | - | - | 1,718 | 1,897 |
| Retirement benefits | 1,411 | 1,050 | 780 | 2,007 |
| Legal actions | 3,389 | 3,838 | - | - |
| Tax disputes | 347 | - | - | - |
| Vacation accrual | 2,258 | 2,508 | - | 925 |
| Bonuses to employees | 400 | 1,960 | - | - |
| Other provisions | 1,072 ____ |
1,029 ____ |
- ____ |
- ____ |
| 8,877 ____ |
10,385 ____ |
2,498 ____ |
4,829 ____ |
| Jubilee awards |
Retirem ents |
Court disputes |
Taxes | Vacation days |
Bonus | Other | Total | |
|---|---|---|---|---|---|---|---|---|
| Balance 1 January | ||||||||
| 2012 | 1.897 | 3.057 | 3.838 | - | 3.433 | 1.960 | 1.029 | 15.214 |
| Increase/(decrease) | ||||||||
| in provision | (179) __ |
(866) __ |
(449) __ |
347 | (1.175) ___ |
(1.560) __ |
43 | (3.839) __ |
| Balance 31 | __ | __ | __ | _ | __ | __ | ||
| December 2012 | 1.718 __ __ |
2.191 __ __ |
3.389 __ __ |
347 __ |
2.258 ___ _ |
400 __ __ |
1.072 __ |
11.375 __ __ |
According to the Collective Agreement, the Company has the obligation to pay long-service (jubilee awards), retirement and other benefits to employees. The Company operates a defined benefit plan for qualifying employees. Retirement and long-service benefits are defined in the Union Agreement. No other post-retirement benefits are provided.
Long-service benefits are paid for full years of service in the month of the current year in which the service is determined as completed.
The present value of defined benefit obligations and the related current and past service cost have been determined using the Projected Credit Unit method.
Key assumptions used in calculating the required provisions are the discount rate of 4.58% and the rate of fluctuation of 4.68 %.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Long-term borrowings | 251,247 | 113,989 |
| Current portion of long-term borrowings | (49,629) ____ |
(34,147) ____ |
| 201,618 | 79,842 | |
| Other non-current liabilities | 71 ____ |
69 ____ |
| 201,689 ____ |
79,911 ____ |
Long-term borrowings comprise HBOR investment loans and long-term loans from commercial banks with interest rate of 4.53%. AD Plastik d.d. services regularly all of its obligations under those borrowings, in line with the terms and conditions of the underlying loan agreements.
Movements in long-term borrowigs during the year:
| 2012 | 2011 | |
|---|---|---|
| Balance at 1 January | 79,842 | 123,170 |
| New loans raised Amounts repaid |
207,330 (85,554) ____ |
20,000 (63,328) ____ |
| Total long-term borrowings | 201,618 ____ |
79,842 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign customers | 98,240 | 120,254 |
| Domestic customers | 299 ____ |
993 ____ |
| 98,539 ____ |
121,247 ____ |
Advances received from foreign customers represent cash advanced for ordered tools.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign trade payables | 100,865 | 103,612 |
| Domestic trade payables | 22,919 ____ |
17,018 ____ |
| 123,784 ____ |
120,630 ____ |
| 31/12/2012 | 31.12.2011 | |
|---|---|---|
| Short-term borrowings - principal payable | 75,233 | 94,858 |
| Current portion of long-term borrowings | 49,629 | 34,147 |
| Short-term borrowings - interest payable | 1,850 | 1,568 |
| Other short-term financial liabilities | - ____ |
2 ____ |
| 126,712 ____ |
130,575 ____ |
Short-term borrowings represent revolving facilities provided by commercial banks with an interest rate of 4.53%.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Due to the State and State institutions | 10,631 | 24,366 |
| Amounts due to employees | 8,243 | 3,163 |
| Dividends payable | 374 | 658 |
| Other current liabilities | 6,183 ____ |
4 ____ |
| 25,431 ____ |
28,191 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Due to the State and State institutions | 481 | 972 |
| Other current liabilities | 1,236 ____ |
1,236 ____ |
| 1,717 ____ |
2,208 ____ |
The Company's gearing ratio, expressed as the ratio of net debt to equity, can be expressed as follows:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Short-term borrowings | 126,712 | 130,575 |
| Long-term borrowings | 201,618 | 79,842 |
| Cash and cash equivalents | 13,462 ____ |
36,042 ____ |
| Net debt | 314,868 ____ |
174,375 ____ |
| Equity | 714,629 | 703,571 |
| Net debt-to-equity ratio | 44.06% | 24.78% |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Financial assets | ||
| Loans and receivables | 407,576 | 331,421 |
| Financial assets at fair value through profit or loss | - | 10,300 |
| Cash and cash equivalents | 13,462 | 36,042 |
| Financial liabilities | ||
| Trade payables | 237,194 | 245,771 |
| Borrowings | 328,330 | 210,417 |
At the reporting date there are no significant concentrations of credit risk for loans and receivables designated at fair value through the statement of comprehensive income. Receivables and liabilities toward Governmnet are not included in stated amounts.
The Treasury function of the Group provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.
The Company seeks to minimise the effects of these risks. The Group uses hedging instruments to hedge its exposure to currency risk on a part of the borrowings.
The largest markets on which the Group provides its services and sells its products comprise the EU market and the market of the Russian Federation. The management determines the prices of its products separately for domestic and foreign markets by reference to the market prices.
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates relative to the interest rate, which applies to the financial instrument. Interest rate cash flow risk is the risk that the interest cost of an instrument will fluctuate over time. The interest rate risk exposure is low, as there are no financial instruments at variable rates.
The Group is exposed to credit risk through loans and trade receivables. Loans are granted to its subsidiaries and as such credit risk is under the control of the Company. Trade receivables are presented net of allowance for bad and doubtful accounts.
The five largest customers of the Company are Revoz, Slovenia; Visteon, Germany; OAO Avtovaz, Russia; Peugeot Citroen Automobiles, France and Renault, France. Revenues generated by the sales to these business partners represent 87 percent of the total sales.
It is the policy of the Group to transact with financially sound companies where there is no risk of collection.
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The carrying amounts of the Group's foreign-currency denominated monetary assets and monetary liabilities at the reporting date are provided in the table below using exchange rates of the Croatian National Bank:
| Assets Liabilities |
Net position | |||||||
|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||
| EUR | 18,710 | 166,588 | 50,255 | 258,740 | (31,545) | (92,152) | ||
| RUR | 727,536 | 68,287 | 271,332 | 443 | 456,204 | 67,844 | ||
| USD | 58 | 337 | 84 | 307 | (26) | 30 | ||
| GBP | 6 | 13 | 4 | 21 | 2 | (8) | ||
| CHF | - | - | 3 | 17 | (3) | (17) | ||
| RSD | 70,321 | - | 2,834 | 67,487 | - | |||
| 816,631 | 235,225 | 324,512 | 259,528 | 492,119 | (24,303) |
The Group is mainly exposed to the countries using EUR and RUR as their currency. The following table details the Company's sensitivity to a 2-percent decrease of the Croatian kuna in 2012 and 2011 against the stated currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end. A negative number below indicates a decrease in profit and and a positive number below indicates an increase in profit where the Croatian kuna changes against the relevant currency for the percentage specified above.
| EUR impact | |||
|---|---|---|---|
| 2012 | 2011 | ||
| Change in exchange differences | (4,761) | (1,837) | |
| RUR impact 2012 |
2011 | ||
| Change in exchange differences | 1,711 | 245 |
Ultimate responsibility for liquidity risk management rests with the Management Board. The Group manages its liquidity using banking facilities (overdrafts) and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Group's remaining contractual maturity for its non-derivative financial assets and liabilities. The tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities based on the earliest date on which the Group can require payment i.e. can be required to pay.
| Average | month | months | 1 year | years | years | |
|---|---|---|---|---|---|---|
| interest | ||||||
| 39.840 | 58.179 | 91.095 | 10.344 | 86.235 | 285.693 | |
| 9.95% | 7.836 | 13.721 | 28.125 | 102.065 | 6.505 | 158.252 ___ |
| 47.676 | 71.900 | 119.220 | 112.409 | 92.740 | 443.945 ___ |
|
| 42.420 | 23.463 | 84.229 | 92.124 | - | 242.236 | |
| 4.53% | 3.221 | 24.255 | 130.431 | 204.721 | - | 362.628 ___ |
| 45.641 ___ |
47.718 ___ |
214.660 ___ |
296.845 __ |
- __ |
604.864 ___ |
|
| 79.769 | 89.141 | 35.237 | 11.423 | 84.334 | 299.904 | |
| 8.73% | 6.538 | 2.501 | 36.380 | 83.132 | 14.205 | 142.756 ___ |
| 86.307 | 91.642 | 71.617 | 94.555 | 98.539 | 442.660 ___ |
|
| 29.608 | 80.046 | 13.404 | 108.191 | - | 231.249 | |
| 4.30% | 20.689 | 8.244 | 111.196 | 80.940 | 5.870 | 226.939 ___ |
| 50.297 ___ |
88.290 ___ |
124.600 ___ |
189.131 __ |
5.870 __ |
458.188 ___ |
|
| rate | _ _ _ _ _ _ |
_ _ _ _ _ _ |
_ _ _ _ _ _ |
_ _ _ ________ _ _ _ |
_ _ _ ________ _ _ _ |
Financial instruments held to maturity in the ordinary course of business are carried at the lower of cost and net amount less repaid portion.
The fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction, except in the event of a forced sale or liquidation. The fair value of a financial instrument is its quoted market price, or the amount obtained using the discounted cash flow method.
At 31 December 2012, the carrying amounts of cash, receivables, short-term liabilities, accrued expenses, short-term borrowings and other financial instruments approximate their fair values due to the short-term maturity of these financial instruments.
These financial statements were approved by the Management Board of AD Plastik d.d. and authorised for issue on 23 April 2013.
For AD Plastik d.d. Solin:
Mladen Peroš President of the Management Board
III.b AD Plastik d.d., Solin Unconsolidated financial statements and Independent Auditor's Report For the year ended 31 December 2012
| Responsibility for the financial statements | 1 |
|---|---|
| Independent Auditor's Report | 2-3 |
| Unconsolidated statement of comprehensive income | 4 |
| Unconsolidated statement of financial position | 5-6 |
| Unconsolidated statement of changes in shareholders' equity | 7 |
| Unconsolidated statement of cash flows | 8 |
| Notes to the unconsolidated financial statements | 9-56 |
Pursuant to the Accounting Act of the Republic of Croatia, the Management is responsible for ensuring that financial statements are prepared for each financial year in accordance with International Financial Reporting Standards ("the IFRSs"), which give a true and fair view of the financial position and results of operations of AD Plastik d.d., Solin (the "Company") for that year.
The Company has also prepared its consolidated financial statements in accordance with International Financial Reporting Standards.After making appropriate enquiries, the Management has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Management continues to prepare the financial statements on a going-concern basis.
In preparing those financial statements, the responsibilities of the Management Board of the Company include ensuring that:
The Management Board of the Company is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company and must also ensure that the financial statements comply with the Accounting Act. The Management is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Signed on behalf of the Management by:
AD Plastik d.d., Solin Matoševa 8 21210 Solin Republic of Croatia
23 April 2013
Deloitte d.o.o. ZagrebTower Radnička cesta 80 10 000 Zagreb Croatia Personal Identification No. (OIB): 11686457780
Tel: +385 (0) 1 2351 900 Fax: +385 (0) 1 2351 999 www.deloitte.com/hr
We have audited the accompanying unconsolidated financial statements of AD Plastik d.d. Solin ( "the Company"), which comprise the statement of financial position at 31 December 2012, and the related statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal controls relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
The Company is registered at the Commercial Court in Zagreb: Reg. No.: 030022053; - Registered capital paid in: HRK 44,900.00; Management: Branislav Vrtačnik and Paul Trinder; Commercial bank: Zagrebačka banka d.d., Paromlinska 2, 10 000 Zagreb, bank account no. 2360000- 1101896313; FX account no.: 2100312441 SWIFT Code: ZABAHR2X IBAN: HR27 2360 0001 1018 9631 3; Privredna banka Zagreb d.d., Račkoga 6, 10 000 Zagreb, bank account no. 2340009-1110098294; FX account no.: 70010-519758 SWIFT Code: PBZGHR2X IBAN: HR38 2340 0091 1100 9829 4; Raiffeisenbank Austria d.d., Petrinjska 59, 10 000 Zagreb, bank account no. 2484008-1100240905; FX account no.: 2100002537 SWIFT Code: RZBHHR2X IBAN: HR48 2484 0082 1000 0253 7
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
| Notes | 31.12.2012 | 31.12.2011 | |
|---|---|---|---|
| Sales | 5 | 507,571 | 557,692 |
| Other income | 6 | 8,888 ____ |
11,008 ____ |
| Total income | 516,459 ____ |
568,700 ____ |
|
| Decrease in the value of work in progress and finished products | (1,262) | 1,625 | |
| Cost of raw material and supplies | 7 | (221,728) | (263,554) |
| Cost of goods sold | 8 | (66,366) | (26,270) |
| Service costs | 9 | (37,380) | (40,362) |
| Staff costs | 10 | (99,252) | (106,797) |
| Depreciation and amortisation | 11 | (37,711) | (39,625) |
| Other operating expenses | 12 | (34,019) | (63,380) |
| Provisions for risks and charges | 13 | (1,449) ____ |
(737) ____ |
| Total operating expenses | (499,167) ____ |
(539,100) ____ |
|
| Profit from operations | 17,292 ____ |
29,600 ____ |
|
| Finance revenue | 14 | 50,877 | 61,472 |
| Finance cost | 15 | (22,955) ____ |
(36,215) ____ |
| Profit from financing activities | 27,922 ____ |
25,257 ____ |
|
| Profit before taxation | 45,214 ____ |
54,857 ____ |
|
| Income tax expense | 16 | (447) ____ |
(3,021) ____ |
| Profit for the year | 44,767 ____ |
51,836 ____ |
|
| Other comprehensive income | - | - | |
| Total comprehensive income | 44,767 ____ |
51,836 ____ |
| Notes | 31.12.2012 | 31.12.2011 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 18 | 38,716 | 36,409 |
| Tangible assets | 19 | 426,153 | 425,254 |
| Investments in subsidiaries and associates | 20 | 139,676 | 127,259 |
| Other financial assets | 21 | 89,230 | 128,182 |
| Deferred tax assets | 16 | 441 ____ |
888 ____ |
| Total non-current assets | 694,216 ____ |
717,992 ____ |
|
| Current assets | |||
| Inventories | 22 | 30,973 | 34,962 |
| Trade receivables | 23 | 183,243 | 122,953 |
| Other receivables | 24 | 57,637 | 49,698 |
| Current financial assets | 25 | 38,633 | 37,713 |
| Cash and cash equivalents | 26 | 7,255 | 29,719 |
| Prepaid expenses and accrued income | 27 | 102,145 ____ |
116,103 ____ |
| Total current assets | 419,886 ____ |
391,148 ____ |
|
| TOTAL ASSETS | 1,114,102 ____ |
1,109,140 ____ |
| Notes | 31.12.2012 | 31.12.2011 | |
|---|---|---|---|
| Equity | |||
| Share capital | 28 | 419,958 | 419,958 |
| Reserves | 214,084 | 200,063 | |
| Profit for the year | 44,767 ____ |
51,836 ____ |
|
| Total equity | 678,809 ____ |
671,857 ____ |
|
| Long-term provisions | 29 | 2,201 | 3,388 |
| Long-term borrowings | 30 | 110,180 ____ |
79,842 ____ |
| Total non-current liabilities | 112,381 ____ |
83,230 ____ |
|
| Advances received | 31 | 103,843 | 109,718 |
| Trade payables | 32 | 76,351 | 84,720 |
| Short-term borrowings | 33 | 124,975 | 125,336 |
| Other current liabilities | 34 | 8,629 | 22,715 |
| Short-term provisions | 29 | 7,458 | 9,356 |
| Accrued expenses and deferred income | 35 | 1,656 ____ |
2,208 ____ |
| Total current liabilities | 322,912 ____ |
354,053 ____ |
|
| Total liabilities | 435,293 ____ |
437,283 ____ |
|
| TOTAL EQUITY AND LIABILITIES | 1,114,102 ____ |
1,109,140 ____ |
| S ha i l ta re ca p |
Ca i l ta p re se rv es |
Le l g a re se rv es |
Re fo se rv es r ha ow n s re s |
Tr ea su ry ha s re s |
Re ine d ta ing ea rn s |
To l ta |
|
|---|---|---|---|---|---|---|---|
| Ba lan 3 1 De be 2 0 1 0 - t ce a ce m r d ta te as re s |
4 1 9, 9 5 8 |
1 9 1, 4 2 4 |
6, 1 2 9 |
1 1, 3 6 0 |
( 1 1, 3 6 0 ) |
2 2, 0 8 6 |
6 3 9, 5 9 7 |
| D iv i de ds i d n p a f o Va lua ion t o wn ha s res |
- - |
- - |
- - |
- 1 1 4 |
- ( 1 1 4 ) |
( ) 3 0, 6 7 2 - |
( ) 3 0, 6 7 2 - |
| D is i bu ion loy tr t to s em p ee s |
- | 1, 6 0 8 |
- | ( 1, 9 6 2 ) |
1, 9 6 2 |
3 5 4 |
1, 9 6 2 |
| Sa le f o ha o wn s res |
- | 2 2 9 |
- | ( 9, 1 3 4 ) |
9, 1 3 4 |
8, 9 0 5 |
9, 1 3 4 |
| Pr f i fo he t t o r y ea r |
- | - | - | - | - | 5 1, 8 3 6 |
5 1, 8 3 6 |
| Ba lan 3 1 De be 2 0 1 1 t ce a ce m r |
4 1 9, 9 5 8 |
1 9 3, 2 6 1 |
6, 1 2 9 |
3 7 8 |
( 3 7 8 ) |
5 2, 5 0 9 |
6 7 1, 8 5 7 |
| D iv i de ds i d n p a |
- | - | - | - | - | ( 3 3, 5 6 6 ) |
( 3 3. 5 6 6 ) |
| Va lua ion f o ha t o wn s res |
- | - | - | ( 3 5 1 ) |
3 5 1 |
- | - |
| D is i bu ion loy tr t to s em p ee s |
- | - | - | ( 5 2 4 ) |
5 2 4 |
5 2 4 |
5 2 4 |
| Pu ha f o ha rc se o wn s res |
- | - | - | 4. 7 7 3 |
( 4, 7 7 3 ) |
( 4, 7 7 3 ) |
( 4, 7 7 3 ) |
| Pr f i fo he t t o r y ea r |
- | - | - | - | - | 4 4, 7 6 7 |
4 4, 7 6 7 |
| Ba lan 3 1 De be 2 0 1 2 t ce a ce m r |
4 1 9, 9 5 8 |
1 9 3, 2 6 1 |
6, 1 2 9 |
4. 2 7 6 |
( 4, 2 7 6 ) |
5 9, 4 6 1 |
6 7 8, 8 0 9 |
| Cash flows from operating activities | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Profit for the year | 44,767 | 51,836 |
| Income tax expense | 447 | 3,021 |
| Depreciation and amortisation | 37,710 | 39,651 |
| (Gains) / loss from sale of assets | (195) | 515 |
| Impairment allowance on trade receivables | - | 582 |
| Interest expense | 9,545 | 9,433 |
| Interest income | (13,248) | (11,521) |
| Increase in long-term and short-term provisions | (3,085) ____ |
2,519 ____ |
| Profit from operations before working capital changes | 75,941 ____ |
96,036 ____ |
| Decrease in inventories | 3,989 | 2,203 |
| (Increase) / decrease in trade receivables | (60,290) | 25,848 |
| Increase in amounts due from the state | (3,376) | (1,493) |
| Decrease / (increase) in other receivables | 4,330 | (10,793) |
| (Decrease) / increase in trade payables | (8,369) | 18,393 |
| (Decrease) / increase in advances received | (5,875) | 29,288 |
| (Decrease) / increase in other current liabilities | (13,707) | 21,396 |
| (Decrease) / increase in accrued expenses and deferred income | (552) | 503 |
| Decrease / (increase) in prepaid expenses | 13,958 | (40,576) |
| Income tax paid | - | (1,170) |
| Payments made under a tax decision | - | (4,731) |
| Interest paid | (9,924) | (8,994) |
| Cash generated (used in)/from operations | (3,875) ____ |
125,910 ____ |
| Investments in subsidiaries | (12,417) | (19) |
| Interest received | 4,355 | 11,521 |
| Purchases of property, plant and equipment, and intangible assets | (40,721) | (20,240) |
| Investments in Funds | 2,800 | (8,278) |
| Short-term loans | 2,073 | (6,990) |
| Long-term loans | 33,159 ____ |
(65,574) ____ |
| Cash used in investing activities | (10,751) ____ |
(89,580) ____ |
| Purchase of own shares | (4,773) | - |
| Bonuses to employees | 524 | - |
| Dividends paid | (33,566) | (30,672) |
| Proceeds from borrowings | 248,620 | 139,229 |
| Repayment of borrowings | (218,643) | (173,786) |
| Cash used in financing activities | (7,838) ____ |
(65,229) ____ |
| Net cash flow for the year | (22,464) ____ |
(28,899) ____ |
| At 1 January | 29,719 | 58,618 |
| Net cash inflow | (22,464) | (28,899) |
| At 31 December | 7,255 ____ |
29,719 ____ |
The company AD Plastik d.d., Solin, a public limited company for the production of motor vehicle spare parts and accessories and of plastic masses (abbreviated firm: AD PLASTIK d.d.), was established by a decision of the Founding Assembly dated 15 June 1994 following the transformation of the socially-owned entity Autodijelovi – Solin pursuant to the decision on the transformation of ownership and the Decision of the Croatian Privatisation Fund No. 01-02/92-06/392 of 6 December 1993. The Company is the legal successor of the socially-owned entity Autodijelovi and, according to the decision of the Commercial Court in Split No. Fi 6215/94 of 28 June 1994, assumed all of its assets and liabilities at the date of registration in the court register. By decision of the General Shareholders' Assembly dated 21/06/2007, the Statute of the Company of 8 July 2004 was amended and a decision was made to increase the share capital of the Company in cash. Pursuant to the Decision No. Tt-07/2145-3 of 25/09/2007, the increase of the share capital by HRK 125,987,500.00, effected by OAO Saint Petersburg Investment Company (Sankt-Peterburške investicijske kompanije, OAO SPIK) was registered, and the total subscribed capital now amounts to HRK 419,958,400.00 and consists of 4,199,584 shares, with a nominal amount of HRK 100.00 each. By the Share Transfer Agreement of 29 June 2009 OAO Spik transferred the shares of the AD Plastik d.d. to OAO Group Aerokosmicheskoe Oborudovanie, St. Petersburg, which transferred those shares to OAO HAK, Sankt Petersburg.
The Company shares were included in the listing of public limited companies on the Official Market of the Zagreb Stock Exchange on 1 October 2010.
The primary activity of the Company comprises manufacture of motor vehicle spare parts and accessories. The registered activities of the Company comprise the following:
providing advice, guidance and operational assistance to legal entities;
designing of accounting systems, materials accounting software, budgeting control procedures;
At 31 December 2012, the number of staff employed was 830 (2011: 872).
| Mandate | ||
|---|---|---|
| Members of the Supervisory Board: | ||
| Josip Boban (Chairman) | From 19.07.2012 | To 19.07.2016 |
| Nikola Zovko (Deputy Chairman) | From 19.07.2012 | To 19.07.2016 |
| Marijo Grgurinović | From 14.07.2011 | To 14.07.2015 |
| Igor Anatoljevič Solomatin | From 14.07.2011 | To 14.07.2015 |
| Tomislav Dulić | From 11.09.2008 | To 11.09.2012 |
| Drandin Dmitrij Leonidovič | From 19.10.2011 | To 19.10.2015 |
| Nikitina Nadežda Anatoljevna | From 19.10.2011 | To 19.10.2015 |
| Mladen Peroš (President) | From 19.07.2012 | To 19.07.2016 |
|---|---|---|
| Ivica Tolić | From 19.07.2012 | To 19.07.2016 |
| Katija Klepo | From 19.07.2012 | To 19.07.2016 |
The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current period:
The adoption of the amended and revised Standards and Interpretations has not lead to any changes in the Company's accounting policies.
At the date of authorization of these financial statements the following Standards, revisions and Interpretations were in issue but not yet effective:
The Company has elected not to adopt these Standards, revisions and Interpretations in advance of their effective dates and anticipates that the adoption of these standards, revisions and interpretations will have no material impact on the financial statements of the Company in the period of initial application.
Set out below are the principal accounting policies consistently applied in the preparation of the financial statements for the current and prior years.
These financial statements are prepared in accordance with International Financial Reporting Standards and Croatian laws.
The financial statements of the Company have been prepared on the historical cost basis, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and Croatian laws.
The Company maintains its accounting records in the Croatian language, in Croatian Kuna and in accordance with Croatian laws and the accounting principles and practices observed by enterprises in Croatia.
The preparation of financial statements in conformity with International Financial Reporting Standards (IFRSs) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
The financial statements of the Company represent aggregate amounts of assets, liabilities, capital and reserves of the Company as of 31 December 2012, and the results of operations for the year then ended. Consolidated financial statements AD Plastik d.d. and subsidiaries for the year ended 31 December 2012 have been issued on 23rd April 2013.
The Company also prepares its consolidated financial statements in accordance with International Financial Reporting Standards, which include the financial statements of the Company as the parent and the financial statements of the subsidiaries controlled by the Company. In these financial statements, investments in entities controlled by the Company or in which the Company has significant influence are carried at cost less impairment if any. For a full understanding of the financial positions of the Company and its subsidiaries as a group, and the results of their operations and their cash flows for the year, users are advised to read the consolidated financial statements of the Group AD Plastik d.d. ("the Group"). Details of the investments are presented in Note 20.
Revenue is measured at the fair value of the consideration received or receivable for products, goods or services sold in the regular course of operations.
Revenues are stated net of value added tax, estimated returns, discounts and rebates. Revenue is recognised when the amount of the revenue can be measured reliably and when future economic benefits are expected to flow into the Company.
Product sales are recognised when the products are delivered to, and accepted by the customer and when the collectability of the receivables is virtually certain.
Income from the manufacture of tools is recognised using the stage-of-completion method to determine the amount of income and costs attributable to a certain period.
Interest income is recognised on a time basis, using the effective interest method. Interest earned on balances with commercial banks (demand and term deposits) is credited to income for the period as it accrues. Interest on trade debtors is recognised as income upon settlement.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are included in profit or loss in the period in which they are incurred.
Transactions in foreign currencies are translated into Croatian kunas at the rates of exchange in effect at the dates of the transactions. Cash, receivables and payables denominated in foreign currencies are retranslated at the rates of exchange in effect at the date of the statement of financial position. Gains and losses arising on translation are included in the statement of comprehensive income for the year. At 31 December 2012, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.545624 (31 December 2011: HRK 7.53042 for EUR 1).
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognised in the income statement, except where it relates to items recognised directly in equity, in which case it is also recognised in equity. Current tax represents tax expected to be paid on the basis of taxable profit for the year, using the tax rate enacted at the balance sheet date, adjusted by appropriate prior-period items.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates in effect at the balance sheet date.
The measurement of deferred tax liabilities and assets reflects the amount that the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred taxes are not discounted and are classified in the balance sheet as non-current assets and/or non-current liabilities. Deferred tax assets are recognised only to the extent that it is probable that the related tax benefit will be realised. At each balance sheet date, the Company reviews the unrecognised potential tax assets and the carrying amount of the recognised tax assets.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities.
In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over cost.
Tangible fixed assets are recognised initially at cost and subsequently at cost less accumulated depreciation. The initial cost of property, plant and equipment comprises its purchase price, including import duties and nonrefundable sales taxes and any directly attributable costs of bringing an asset to its working condition and location for its intended use. Maintenance and repairs, replacements and improvements of minor importance are expensed as incurred. Where it is obvious that expenses incurred resulted in increase of expected future economic benefits to be derived from the use of an item of tangible or intangible assets in excess of the originally assessed standard performance of the asset, they are added to the carrying amount of the asset. Gains or losses on the retirement or disposal of tangible fixed assets are included in the statement of comprehensive income in the period they occur. Depreciation commences on putting an asset into use. Depreciation is provided so as to write down the cost or revalued amount of an asset over the estimated useful life of the asset using the straight-line method as follows:
| Depreciation rates in 2012 | Depreciation rates in 2011 | |
|---|---|---|
| 3. Tangible assets | ||
| Buildings | 1.50 | 1.50 |
| Machinery | 7.00 | 7.00 |
| Tools, furniture, office and laboratory equipment and accessories, measuring and control instruments Vehicles |
10.00 20.00 |
10.00 20.00 |
| IT equipment | 20.00 | 20.00 |
| Other | 10.00 | 10.00 |
| 4. Intangible assets | 20.00 | 20.00 |
At each reporting date the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is an indication that the assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
An associate is an entity over which the Company has significant influence but which is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity cost of accounting.
Inventories of raw material and spare parts are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average cost method. Net realisable value represents the estimated selling price in the ordinary course of business less all variable selling costs.
Cost of work in progress and finished products comprises the cost of raw material and supplies, direct labour and other costs and the portion of overheads directly attributable to work in progress.
Small inventory is written off when put in use.
The cost of product inventories i.e. the production costs is based on direct material used, the cost of which is determined using the weighted average cost method, then direct labour costs, and fixed overheads at the actual level of production which approximates the normal capacities, as well as variable overheads that are based on the actual use of the production capacities.
Merchandise on stock is recognised at purchase cost.
Trade debtors and prepayments are carried at nominal amounts less an appropriate allowance for impairment for uncollectible amounts.
Impairment is made whenever there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, the probability of bankruptcy proceedings at the debtor, or default or delinquency in payment are considered objective evidence of impairment. The amount of the impairment loss is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The impairment losses on trade receivables are recognised in the income statement within 'Expenses'.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
Cash comprises account balances with banks, cash in hand, deposits and securities at call or with maturities of less than three months.
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of discounting is material, the amount of the provision is the present value of the expenditures expected to be required to settle the obligation, determined using the estimated risk free interest rate as the discount rate. Where discounting is used, the reversal of such discounting in each year is recognised as a financial expense and the carrying amount of the provision increases in each year to reflect the passage of time.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the date of the statement of financial position, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
In the normal course of business the Company makes payments, through salary deductions,to mandatory pension funds on behalf of its employees as required by law. All contributions made to the mandatory pension funds are recorded as salary expense when incurred. The Company does not have any other retirement benefit plan and, consequently, has no other obligations in respect of the retirement benefits for its employees. In addition, the Company is not obliged to provide any other post-employment benefits.
Termination benefits are payable when employment is terminated by the Company before the normal retirement date. The Company recognises its termination benefit obligations in accordance with the applicable Union Agreement.
Benefits falling due more than 12 months after the reporting date are discounted to their present value.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each reporting date. Actual gains and losses are recognised in the period in which they arise.
Past service cost is recognised immediately to the extent that the benefits are already vested. Otherwise, it is amortised on a straight-line basis over certain period until the benefits become vested.
Financial assets and financial liabilities included in the accompanying financial statements consist of cash and cash equivalents, marketable securities, trade and other receivables, trade and other payables, long-term receivables, loans, borrowings and investments. The details of the recognition and measurement of those items are presented in the corresponding policies.
Investments are recognised and derecognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Financial assets available for sale are classified as current assets if the management intends to realise those assets within 12 months from the date of the statement of financial position. Every purchase and sale transaction in recognised on the settlement date. Investments are recognised initially at cost, which represents the fair value of the consideration given, including transaction costs. Available-for-sale investments are subsequently measured at market value, with no deduction of transaction costs, by reference to their market prices prevailing at the date of the statement of financial position. Investments whose fair values cannot be determined are carried at cost and reviewed for impairment at each reporting date.
The effective interest method is a method of calculating the amortised cost of a financial asset or liability, and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial asset or liability, or, where appropriate, a shorter period.
Financial assets are assessed for indicators of impairment at each date of the statement of financial position. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of a financial asset is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
Contingent liabilities have not been recognised in these financial statements. They are not disclosed unless the possibility of outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but it is disclosed when the inflow of economic benefits becomes probable.
Events after the date of the statement of financial position that provide additional information about the Company's position at that date (adjusting events) are reflected in the financial statements. Post-year-end events that are not adjusting events are disclosed in the notes when material.
In the application of the Company's accounting policies, which are described in Note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results may differ from those estimates.
The estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.
Areas of estimation include, but are not limited to, depreciation periods and residual values of property, plant and equipment, and of intangible assets, value adjustment of inventories, impairment of receivables, and litigation provisions. The key areas of estimation in applying the Company's accounting policies that had a most significant impact on the amounts recognized in the financial statements were as follows:
As described in the Note 3.7, the Company reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. Property, plant and equipment are recognised initially at cost, less accumulated depreciation.
A deferred tax asset is recognized only to the extent that it is probable that the related tax benefit will be realised. In determining the amount of deferred taxes that can be recognised significant judgements are required, which are based on the probable quantification of time and level of future taxable profits, together with the future tax planning strategy. In 2012, deferred tax assets on available tax differences were recognised.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
The cost of defined benefits is determined using actuarial estimates. Actuarial estimates involve assumptions about discount rates, future salary increases and the mortality or fluctuation rates. Because of the long-term nature of those plans, there is uncertainty surrounding those estimates.
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 491,971 538,265 |
|---|
| 15,600 19,427 _ _ |
| 507,571 557,692 _ _ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Income from bonuses provided by suppliers | 2,392 | 2,698 |
| Income from consumption of own products, goods and services | 1,155 | 1,018 |
| Income from sale of Property, pland and equipment | 997 | 3,751 |
| Income from damages collected | 224 | 183 |
| Income from sale of own shares | - | 2,941 |
| Other operating income | 4,120 ____ |
417 ____ |
| 8,888 ____ |
11,008 ____ |
Other business income in major part relate to reversal of accrual for bonuses to employees in the amount HRK 1,047 thousand (2011: HRK zero), jubilee awards in the amount HRK 711 thousand (2011: HRK 39 thousand), retirement benefits in the amount HRK 476 thousand (2011: HRK zero) and vacation days in the amount HRK 250 thousand (2011: HRK 655 thousand).
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Direct materials | 111,978 | 137,148 |
| Indirect materials | 78,567 | 93,010 |
| Electricity | 11,281 | 12,163 |
| Direct packaging | 8,351 | 10,349 |
| Preventive maintenance of machinery | 1,859 | 2,014 |
| Gas for heating in the production process | 1,631 | 1,732 |
| Other materials | 1,099 | 1,239 |
| Regular maintenance of machinery | 643 | 818 |
| Other expenses | 6,319 ____ |
5,081 ____ |
| 221,728 ____ |
263,554 ____ |
Cost of goods sold in the amount of HRK 66,366 thousand (2011: HRK 26,270 thousand) relate in major part on purchase cost of tools, equipment and material for start up of new production and projects in subsidaries.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Re-export costs | 55,194 | 23,132 |
| Cost of direct material sold | 4,384 | 1,162 |
| Cost of merchandise | 4,410 | 946 |
| Cost of spare parts sold | 1,213 | 528 |
| Other costs of goods sold | 1,165 ____ |
502 ____ |
| 66,366 ____ |
26,270 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Transport | 19,545 | 20,496 |
| Rental costs | 5,227 | 5,184 |
| Regular and preventive maintenance costs - machinery | 3,735 | 3,849 |
| Regular and preventive maintenance costs - buildings | 945 | 587 |
| Telecommunications and information systems | 917 | 937 |
| Communal fees | 867 | 992 |
| Water supply | 862 | 950 |
| Forwarding and shipping costs | 736 | 893 |
| Tool modification costs | 532 | 987 |
| Commissions | 288 | 2,149 |
| Other expenses | 3,726 ____ |
3,338 ____ |
| 37,380 ____ |
40,362 ____ |
|
| 10. STAFF COSTS |
||
| 31.12.2012 | 31.12.2011 | |
| Net wages and salaries | 51,892 | 54,258 |
| Taxes and contributions out of salaries | 21,622 | 22,607 |
| Contributions on salaries | 12,973 | 13,564 |
| Provision for bonuses | 11 | 1,960 |
| Other staff costs | 12,754 ____ |
14,408 ____ |
| 99,252 ____ |
106,797 ____ |
Other staff costs comprise per diems, overnight accommodation costs and business travel costs, reimbursement of a transporation costs to work and other business related costs.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Depreciation | 22,484 | 22,727 |
| Amortisation | 15,227 ____ |
16,898 ____ |
| 37,711 ____ |
39,625 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Temporary service costs - tools | 16,822 | 40,848 |
| Professional service cost | 4,484 | 4,850 |
| Other non-material costs | 2,344 | 2,473 |
| Bank charges | 1,780 | 1,750 |
| Communal fees for the use of construction plots | 1,439 | 1,425 |
| Insurance premiums | 1,086 | 1,092 |
| Cost of goods provided free of charge | 867 | 805 |
| Payment operation charges | 849 | 505 |
| Other fees (Supervisory Board) | 397 | 607 |
| Professional training costs | 289 | 287 |
| Entertainment | 288 | 595 |
| Customer complaints | 225 | 198 |
| Translation service costs | 215 | 175 |
| Gifts for employees' children | 212 | 574 |
| Occupational Health and Safety service costs | 173 | 190 |
| Water management fee | 169 | 164 |
| Forest reproduction levies | 164 | 317 |
| Other expenses | 2,216 ____ |
6,525 ____ |
| 34,019 ____ |
63,380 ____ |
Most of other external costs comprise manufacturing of tools for the production of car spare parts per orders of the ultimate car manufacturers and include the cost of the tools, tool modification services, transportation and other handling charges.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Provisions under actuarial calculations | 1,411 | 1,145 |
| Vacation accruals | - | (655) |
| Litigation provisions | 38 ____ |
247 ____ |
| 1,449 ____ |
737 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Dividend income | 27,897 | 26,817 |
| Interest income | 13,248 | 11,521 |
| Foreign exchange gains | 7,188 | 20,131 |
| Other finance revenue | 2,544 ____ |
3,003 ____ |
| 50,877 ____ |
61,472 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Interest expense | 9,545 | 9,433 |
| Foreign exchange losses | 6,207 | 22,851 |
| Other finance costs | 7,203 ____ |
3,931 ____ |
| 22,955 ____ |
36,215 ____ |
Other finance costs relates to forward agreements which have been signed for the purpose of the protection of the change in exchange rate of RUB.
Income tax comprises the following:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Current tax | - | 3,242 |
| Deferred tax | 447 ___ |
(221) ___ |
| 447 ___ |
3,021 ___ |
Deferred tax, as presented in the Statement of financial position, is as follows:
| 31/12/2012 | 31/12/2011 | |
|---|---|---|
| Balance at 1 January | 888 | 667 |
| Deferred tax assets recognised | (447) ___ |
221 ___ |
| Balance at 31 December | 441 ___ |
888 ___ |
Deferred tax assets arise from the following:
| 2012 | Opening balance |
Credited / (Charged) to statement of comprehensive income |
Closing balance |
|---|---|---|---|
| Temporary differences: | - | ||
| Provisions for long-service and termination benefits | 888 | (447) | 441 |
| ___ | ___ | ___ | |
| Balance at 31 December | 888 | (447) | 441 |
| ___ | ___ | ___ | |
| 2011 | Opening balance |
Credited / (Charged) to statement of comprehensive income |
Closing balance |
| Temporary differences: | - | ||
| Provisions for long-service and termination benefits | 667 | 221 | 888 |
| ___ | ___ | ___ | |
| Balance at 31 December | 667 | 221 | 888 |
| ___ | ___ | ___ |
The relationship between the accounting profit and tax losses carried forward can be shown as follows:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Profit for the year | 45,214 ___ |
54,857 ___ |
| 70% of entertainment expenses | 200 | 426 |
| 30 % of the cost of use of private cars | 419 | 378 |
| Taxable deficits | 3 | - |
| Costs of forced collection of taxes and other levies | - | 27 |
| Fines and penalties | 3 | 72 |
| Interest from related-party relationships | 660 | 2 |
| Written-off receivables | 19 | 261 |
| Provisions | 1,674 | 3,105 |
| Other taxable revenues | 77 ___ |
1,962 ___ |
| Tax base increasing items (PD Return Form) | 3,055 ___ |
6,233 ___ |
| Dividend income | (27,897) | (26,817) |
| Subsequent collection of written-off receivables | (14) | (101) |
| Other operating expenses from prior periods | - | (1,487) |
| Other non-taxable revenues | (2,234) | (39) |
| Government grants for training and education | (246) ___ |
(229) ___ |
| Tax base decreasing items (PD Return Form) | (30,391) ___ |
(28,673) ___ |
| Income tax base before the utilisation of tax losses brought forward Tax losses brought forward |
17,878 - ___ |
32,417 - ___ |
| Tax base | 17,878 ___ |
32,417 ___ |
| Tax at the rate of 20% | 3,576 | 6,483 |
| Tax reliefs | (3,576) ___ |
(3,241) ___ |
| Current tax liability | - ___ |
3,242 ___ |
The income tax rate effective in the Republic of Croatia for the years 2012 and 2011 was 20%.
On 24 October 2012 the Company filed with the Ministry of Economy the Application for Incentive Measures for the investment project "Expansion of Production for the Purpose of Export of Car Industry Products", in accordance with the Act on Investment Promotion and Development of Investment Climate (OG 111/2012 and 28/2013) and the Investment Promotion and Development of Investment Climate (OG 40 of 5 April 2013).
As a result, the Company made investments in fixed assets in November and December 2012, having thus met the prerequisites for the utilistation of the tax incentives for 2012.
The Application meets the requirements set out in the above-mentioned regulations, the required capital investments were made, and the Company uses the tax incentives in its 2012 financial statements on a valid basis.
There is no formal procedure in Croatia for determining the final taxes upon filing the corporate income and valueadded tax returns. However, tax returns are subject to inspection by the Tax Authorities at any time over the next three years from the end of the year for which the tax returns have been filed.
Deferred tax assets recognised arise on the temporary differences in provisions for retirement and long-service benefits.
Basic earnings per share are determined, by dividing the Company's net profit by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares redeemed and held by the Company as treasury shares. There were no circumstances that would give rise to a dilution of the earnings per share reported above.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Net profit attributable to the Company shareholders | 44,767 | 51,836 |
| Weighted average number of shares | 4,159,303 ___ |
4,195,841 ___ |
| Basic earnings per share (in HRK) | 10.76 ___ |
12.35 ___ |
| Licences | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| Balance at 31 December 2010 | 67 | 758 | 100,845 | 101,670 |
| Additions | - | 315 | 11,961 | 12,276 |
| Disposals and retirements | (12) | - | - | (12) |
| Balance at 31 December 2011 | 55 ___ |
1,073 ___ |
112,806 ___ |
113,934 ___ |
| Additions | - | 47 | 17,487 | 17,534 |
| Disposals and retirements | - ____ |
- ____ |
- ____ |
- ____ |
| Balance at 31 December 2012 | 55 ____ |
1,120 ____ |
130,293 ____ |
131,468 ____ |
| Accumulated amortisation | ||||
| Balance at 31 December 2010 | - | 423 | 60,178 | 60,601 |
| Charge for the year | - | 234 | 16,664 | 16,898 |
| Disposals and retirements | - | - | 26 | 26 |
| Balance at 31 December 2011 | - ___ |
657 ___ |
76,868 ___ |
77,525 ___ |
| Charge for the year | - ____ |
208 ____ |
15,019 ____ |
15,227 ____ |
| Balance at 31 December 2012 | - ____ |
865 ____ |
91,887 ____ |
92,752 ____ |
| Net book value | ||||
| At 31 December 2012 | 55 ___ |
255 ___ |
38,406 ___ |
38,716 ___ |
| At 31 December 2011 | 55 ___ |
416 ___ |
35,938 ___ |
36,409 ___ |
Projects comprise investments in the development of new products that are expected to generate revenue in future periods. Consequently, the costs are amortised over the period in which the related economic benefits flow into the Company.
| Land | Buildings | Plant and equipment |
Assets under construction |
Other | Total | |
|---|---|---|---|---|---|---|
| Cost | ||||||
| Balance at 31 December 2010 | 134,620 | 225,027 | 308,417 | 723 | 2,215 | 671,002 |
| Additions Transfer from assets under development |
759 - |
- 1,663 |
- 2,486 |
7,205 (4,249) |
- 100 |
7,964 - |
| Disposals and retirements | - | - | (1,310) | - | - | (1,310) |
| Balance at 31 December 2011 | 135,379 | 226,690 | 309,593 | 3,679 | 2,315 | 677,656 |
| Additions | 1,291 | - | - | 21,896 | - | 23,187 |
| Transfer from assets under development |
3,306 | 1,196 | 8,232 | (12,981) | 247 | - |
| Disposals and retirements | - | - | (2,038) | - | - | (2,038) |
| Balance at 31 December 2012 | 139,976 | 227,886 | 315,787 | 12,594 | 2,562 | 698,805 |
| Accumulated depreciation Balance at 31 December 2010 |
- | 54,564 | 175,445 | - | 473 | 230,482 |
| Charge for the year | - | 3,390 | 18,765 | - | 572 | 22,727 |
| Disposals and retirements | - | - | (807) | - | - | (807) |
| Balance at 31 December 2011 | - | 57,954 | 193,403 | - | 1,045 | 252,402 |
| Charge for the year | - | 3,405 | 18,849 | - | 230 | 22,484 |
| Disposals and retirements | - | - | (2,234) | - | - | (2,234) |
| Balance at 31 December 2012 | - | 61,359 | 210,018 | - | 1,275 | 272,652 |
| Net book value | ||||||
| At 31 December 2012 | 139,976 | 166,527 | 105,769 | 12,594 | 1,287 | 426,153 |
| At 31 December 2011 | 135,379 | 168,736 | 116,190 | 3,679 | 1,270 | 425,254 |
At 31 December 2012, the net book value of tangible assets pledged as collateral with commercial banks amounts to HRK 292,292 thousand, and the balance of short-term and long-term loans secured by those assets is HRK 235,155 thousand.
| Name of subsidiary | Principal activity | Country of incorporation and business |
Ownership interest in % | Amount of equity investment, HRK'000 |
||
|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |||
| AD PLASTIK d.o.o. | Manufacture of other vehicle spare parts and accessories Manufacture of other |
Novo Mesto, Slovenia |
100.00% | 100.00% | 204 | 204 |
| ZAO PHR | vehicle spare parts and accessories Manufacture of other |
Samara, Russian Federation |
99.95% | 99.95% | 13,465 | 13,465 |
| ZAO AD Plastik Kaluga |
vehicle spare parts and accessories Business and other |
Kaluga, Russian Federation |
100.00% | 100.00% | 61,012 | 61,012 |
| SG PLASTIK d.o.o. in liquidation |
management consultancy Manufacture of other vehicle spare parts and |
Solin, Republic of Croatia |
100.00% | 100.00% | 250 | 250 |
| ADP d.o.o. | accessories | Mladenovac, Serbia | 100.00% | 100.00% | 12,434 | 17 |
| 87,365 | 74,948 |
Subsidary ZAO ADP Luga has change name and headquater at the beginning of FY 2012 in ZAO AD Plastik Kaluga, Kaluga.
| Name of associate Principal activity |
Country of incorporation and |
Ownership interest in % | Amount of equity investment, HRK'000 |
|||
|---|---|---|---|---|---|---|
| business | 2012 | 2011 | 2012 | 2011 | ||
| EURO AUTO PLASTIC SYSTEMS FAURECIA AD PLASTIK ROMANIA |
Manufacture of other vehicle spare parts and accessories Manufacture of other vehicle spare parts and |
Mioveni, Romania | 50.00% | 50.00% | 21,755 | 21,755 |
| (FAAR) | accessories Manufacture of other |
Mioveni, Romania | 49.00% | 49.00% | 330 | 336 |
| FAURECIA ADP HOLDING |
vehicle spare parts and accessories |
Nanterre, France | 40.00% | 40.00% | 30,220 | 30,220 |
| 52,311 | 52,311 | |||||
| Total investments in subsidiaries and associates | 139,676 | 127,259 |
Set out below is a summary of financial information about the subsidiaries:
| 31.12.2012 | 31.12.2011 |
|---|---|
| 71,261 | 68,539 |
| 67,958 | 65,598 |
| 3,303 | 2,941 ____ |
| 100.00% ____ |
100.00% ____ |
| ____ |
| ZAO PHR, Samara, Russian Federation | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Total assets | 214,513 | 156,203 |
| Total liabilities | 178,093 | 128,453 |
| Net assets | 36,420 ____ |
27,750 ____ |
| Share in the net assets of the associate | 99.95% ____ |
99.95% ____ |
| ZAO AD Plastik Kaluga, Kaluga, Russian Federation | 31.12.2012 | 31.12.2011 |
| Total assets | 84,367 | 44,898 |
| Total liabilities | 46,216 ____ |
1,845 ____ |
| Net assets | 38,151 ____ |
43,053 ____ |
| Share in the net assets of the associate | 100.00% | 100.00% |
| SG PLASTIK d.o.o. in liquidation , Solin, Croatia | 31.12.2012 | 31.12.2011 |
| Total assets | 515 | 512 |
| Total liabilities | 5 ____ |
1 ____ |
| Net assets | 510 ____ |
511 ____ |
| Share in the net assets of the associate | 100.00% | 100.00% |
| ADP d.o.o, Mladenovac, Serbia | 31.12.2012 | 31.12.2011 |
| Total assets | 64,809 | 15,587 |
| Total liabilities | 51,073 ____ |
15,601 ____ |
| Net assets | 13,736 ____ |
(14) ____ |
| Share in the net assets of the associate | 100.00% ____ |
100.00% ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Long-term loans to associates | 55,333 | 53,309 |
| Long-term loans to subsidiaries | 22,508 | 53,478 |
| Long-term loans to unrelated companies | 17,118 | 24,739 |
| Other financial assets | 64 | 64 |
| Current portion of long-term loan receivables | (5,793) ____ |
(3,408) ____ |
| 89,230 ____ |
128,182 ____ |
Long-term loans to subsidiaries and associates comprise long-term investment loans which bear interest at a rate of 7.0% - 12.4% on loans with a currency protection clause, repayable over five years.
| 31/12/2012 | 31/12/2011 | |
|---|---|---|
| Raw material and supplies on stock | 15,430 | 18,049 |
| Finished products | 8,177 | 8,850 |
| Spare parts | 5,025 | 5,646 |
| Work in progress | 1,745 | 2,333 |
| Small items and packaging | 3 | 4 |
| Merchandise | 593 ____ |
80 ____ |
| 30,973 ____ |
34,962 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign trade receivables | 181,045 | 119,966 |
| Domestic trade receivables | 14,220 | 15,027 |
| Impairment allowance on receivables | (12,022) ____ |
(12,040) ____ |
| 183,243 ____ |
122,953 ____ |
The average credit period on sales is 98 days. The Company has provided for all for all sued debtors, regardless of the past due period, as well as for all receivables that are past due and assessed as doubtful of collection.
The Company seeks and obtains from its domestic customers debentures as collaterals in the amount of the receivables.
Set out below is an analysis of major trade receivables:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Visteon Deutschland, Germany | 17,989 | 30,358 |
| Revoz, Slovenia | 5,819 | 24,535 |
| Hella Saturnus Slovenia | 4,692 | 5,703 |
| Euro Auto Plastic Systems, Romania | 3,919 | 4,549 |
| Ford, Germany | 2,471 | 3,225 |
| Belje, Croatia | 1,204 | 1,291 |
| Peugeot Citroen Automobiles, France | 994 | 1,017 |
| Mecaplast, France | 876 | 2,041 |
| Zvijezda; Croatia | 632 | 815 |
| Other debtors | 156,669 ____ |
61,459 ____ |
| 195,265 ____ |
134,993 ____ |
Other debtors in the amount HRK 156,669 thousand (2011: HRK 61,459 thousand) relates to receivables from subsidaries in the amount HRK 118,731 thousand (2011: HRK 52,131 thousand) which relates to delivered tools, equipment, material and services.
Movements in the impairment allowance on domestic trade receivables were as follows:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Balance at beginning of the year | 10,245 | 9,719 |
| Additionally impaired during the year | - | 598 |
| Amounts collected or eliminated during the year | (4) ____ |
(72) ____ |
| Total impairment allowance on domestic trade receivables | 10,241 ____ |
10,245 ____ |
| Balance at beginning of the year | 1,795 | 1,739 |
| Additionally impaired during the year | - | 200 |
| Amounts collected or eliminated during the year | (14) ____ |
(144) ____ |
| Total impairment allowance on foreign trade receivables | 1,781 ____ |
1,795 ____ |
| Total impairment allowance | 12,022 ____ |
12,040 ____ |
All receivables provided against are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| 0 - 1096 days | 622 | 640 |
| Over 1096 days | 11,400 ____ |
11,400 ____ |
| 12,022 ____ |
12,040 ____ |
Ageing analysis of receivables past due but not impaired:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| 1 - 365 days | 65,346 | 24,880 |
| Over 365 days | 12,430 ____ |
1,892 ____ |
| 77,776 ____ |
26,772 ____ |
In aging structure of due receivables above 365 days in the amount HRK 12,430 thousand majority relates to receivables from companies in which AD Plastik d.d. has majority share and control over collection of receivables.
Receivables from related companies
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Trade receivables | 118,731 | 51,729 |
| Interest receivable | - ____ |
402 ____ |
| 118,731 ____ |
52,131 ____ |
Company has transferred part of related party receivables in FY 2013 in long term loan with maturity date of 7 years and interest rate 7%.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign prepayments made | 24,945 | 15,099 |
| Due from the state | 20,300 | 16,926 |
| Domestic prepayments made | 11,505 | 7,746 |
| Amounts due from employees | 887 ____ |
9,927 ____ |
| 57,637 ____ |
49,698 __ |
Amounts due from the State and state institutions comprise receivables from the State Budged in respect of VAT refund, refunds from the Croatian Health Insurance Fund and similar. Domestic and foreign prepayments comprise prepayments made for purchases of production equipment and tools.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Short-term loans to associates | 18,547 | 14,977 |
| Short-term loans to subsidaries | 13,288 | 7,505 |
| Current portion of long-term loan receivables | 5,793 | 6,790 |
| Other short-term loan | 1,000 | 3,408 |
| Other deposits | 5 | 2,800 |
| Short-term loans to funds | - | 2,161 |
| Transit guarantee deposit funds | - ____ |
72 ____ |
| 38,633 ____ |
37,713 __ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign account balance | 6,268 | 583 |
| Deposits with a term of up to 3 months | 902 | 28,530 |
| Current account balance | 74 | 587 |
| Cash in hand | 11 ____ |
19 ____ |
| 7,255 ____ |
29,719 ____ |
Accrued income in the amount of HRK 95,861 thousand (2011: HRK 110,035 thousand) relates to the manufacture of tools for a known customer. Income from the manufacture of tools is recognised using the stage-of-completion method to determine the amount of income and costs attributable to a certain period.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Other accrued income on tools | 95,861 | 110,035 |
| Other accrued income | 3,117 | 3,214 |
| Prepaid operating expenses | 3,167 ____ |
2,854 ____ |
| 102,145 ____ |
116,103 ____ |
Subscribed capital amounts to HRK 419,958 thousand and consists of 4,199,580 shares, with a nominal value of HRK 100.00 per share (2011: HRK 419,958 thousand, 4,199,580 shares, with a nominal value of HRK 100 each). The shareholders with over 2 percent of the shares at 31 December 2012 were as follows:
| Number of | Ownership in | Type of | ||
|---|---|---|---|---|
| Shareholder | Headquarters | shares | % | account |
| Saint Petersburg, | Primary | |||
| OAO Holding | Russia | 1,259,875 | 30.00% | account |
| HYPO ALPE-ADRIA-BANK d.d./ | ||||
| RAIFFEISEN MANDATORY PENSION | Zagreb, Croatia | 257,362 | 6.13% | Pension fund |
| FUND | ||||
| ADP-ESOP d.o.o. | Zagreb, Croatia | 219,752 | 5.23% | Primary |
| account | ||||
| PBZ d.d. | Zagreb, Croatia | 158,812 | 3.78% | Custody |
| account | ||||
| ERSTE & STEIERMARKISCHE BANK | 110,349 | 2.63% | Custody | |
| d.d. | Zagreb, Croatia | account | ||
| BAKIĆ NENAD | Zagreb, Croatia | 107,498 | 2.56% | Primary |
| account | ||||
| Total: | 2,113,648 |
| Short-term: | Long-term: | |||
|---|---|---|---|---|
| 31 December 2012 |
31 December 2011 |
31 December 2012 |
31 December 2011 |
|
| Jubilee awards (long-service benefits) | - | - | 1,421 | 1,897 |
| Termination benefits | 1,411 | 1,050 | 780 | 1,491 |
| Legal actions | 3,389 | 3,838 | - | - |
| Vacation accrual | 2,258 | 2,508 | - | - |
| Bonuses to employees | 400 ____ |
1,960 ____ |
- ____ |
- ____ |
| 7,458 ____ |
9,356 ____ |
2,201 ____ |
3,388 ____ |
| Jubilee awards (long service benefits) |
Termination benefits |
Legal actions |
Vacation accrual |
Bonuses | Total | |
|---|---|---|---|---|---|---|
| Balance at 1 January | ||||||
| 2012 | 1,897 | 2,541 | 3,838 | 2,508 | 1,960 | 12,744 |
| Increase/(decrease) in | ||||||
| provisions | (476) ____ |
(350) ____ |
(449) ____ |
(250) ____ |
(1,560) ____ |
(3,085) ____ |
| Balance at 31 December | ||||||
| 2012 | 1,421 ____ |
2,191 ____ |
3,389 ____ |
2,258 ____ |
400 ____ |
9,659 ____ |
According to the Union Agreement, the Company has the obligation to pay long-service (jubilee awards), retirement and other benefits to employees. The Company operates a defined benefit plan for qualifying employees. Retirement and long-service benefits are defined in the Union Agreement. No other post-retirement benefits are provided.
Long-service benefits are paid for full years of service in the month of the current year in which the service is determined as completed.
The present value of defined benefit obligations and the related current and past service cost have been determined using the Projected Credit Unit method.
Key assumptions used in calculating the required provisions are the discount rate of 4.58% and the rate of fluctuation of 4.68%.
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Long-term borrowings | 159,809 ____ |
113,988 ____ |
| 159,809 | 113,988 | |
| Current portion of long-term borrowings | (49,629) ____ |
(34,146) ____ |
| Total long-term borrowings | 110.180 ____ |
79,842 ____ |
Long-term borrowings comprise HBOR investment loans as well as long-term loans from commercial banks with average interest rate of 4.53%. AD Plastik d.d. services regularly all of its obligations under those borrowings, in line with the terms and conditions of the underlying loan agreements.
Movements in long-term borrowings during the year:
| 2012 | 2011 | |
|---|---|---|
| Balance at 1 January | 79,842 | 123,170 |
| New loans raised | 174,523 | 20,000 |
| Amounts repaid | (144,185) ____ |
(63,328) ____ |
| Total long-term borrowings | 110,180 ____ |
79,842 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign customers | 103,544 | 108,725 |
| Domestic customers | 299 ____ |
993 ____ |
| 103,843 ____ |
109,718 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Foreign trade payables | 53,432 | 67,702 |
| Domestic trade payables | 22,919 ____ |
17,018 ____ |
| 76,351 ____ |
84,720 ____ |
|
| 33. SHORT-TERM BORROWINGS | ||
| 31.12.2012 | 31.12.2011 | |
| Short-term borrowings - principal payable | 71,639 | 89,621 |
| Current portion of long-term borrowings | 49,629 | 34,147 |
| Short-term borrowings - interest payable | 1,794 | 1,568 |
| Other short-term financial liabilities | 1,913 ____ |
- ____ |
| 124,975 ____ |
125,336 ____ |
Short-term loans represent loans provided by commercial banks with the average interest rate of 4.53%.
| 2012 | 2011 | |
|---|---|---|
| Balance at 1 January | 125,336 | 143,223 |
| New loans raised | 74,097 | 118,229 |
| Amounts repaid | (74,458) ____ |
(136,116) ____ |
| Total short term loans | 124,975 ____ |
125,336 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Due to the State and State institutions | 3,300 | 17,596 |
| Amounts due to employees | 5,289 | 5,080 |
| Other current liabilities | 40 ____ |
39 ____ |
| 8,629 ____ |
22,715 ____ |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Due to the State and State institutions | 481 | 972 |
| Other current liabilities | 1,175 ____ |
1,236 ____ |
| 1,656 ____ |
2,208 ____ |
The transactions carried out with related companies are summarized below:
| Trade receivables and payables | Receivables | Liabilities | ||
|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |
| AD PLASTIK d.o.o. , Slovenia | 23,845 | 17,366 | 83 | 8 |
| ZAO PHR, Russia | 73,070 | 34,765 | 206 | 212 |
| ZAO ADP KALUGA , Russia | 17,847 | - | - | - |
| ADP d.o.o., Serbia | 3,969 ____ |
- _ _ ____ |
- | - |
| 118,731 ____ |
52,131 _ _ ____ |
289 | 220 | |
| Trading transactions | ||||
| Income | Expenses | |||
| Operating income and expenses | 2012 | 2011 | 2012 | 2011 |
| AD PLASTIK d.o.o. , Slovenia | 145,475 | 157,589 | - | 202 |
| ZAO PHR, Russia | 73,892 | 49,967 | 9,252 | 2,590 |
| ZAO ADP KALUGA , Russia | 18,078 | - | 121 | - |
| SG PLASTIK d.o.o.in liquidation, Croatia | - | 4 | - | - |
| ADP d.o.o. Serbia | 3,961 ____ |
- _ _ ____ |
1,598 | - |
| 241,406 ____ |
207,560 _ _ ____ |
10,971 | 2,792 |
| Income | Expenses | |||
|---|---|---|---|---|
| Financial income and expenses | 2012 | 2011 | 2012 | 2011 |
| ZAO PHR, Russia | 3,151 | 15,967 | 121 | 3,522 |
| ZAO ADP KALUGA , Russia | 742 | 4,975 | 1,034 | 4,480 |
| AD PLASTIK d.o.o. , Slovenia | 407 | 461 | 670 | 282 |
| ADP d.o.o. Serbia | 37 ____ |
- ____ |
- ____ |
- ____ |
| 4,337 ____ |
21,403 ____ |
1,825 ____ |
8,284 ____ |
|
| Directors' and executives' remuneration | 31.12.2012 | 31.12.2011 | ||
| Salaries | 9,844 ____ |
9,142 ____ |
|---|---|---|
| 9,844 ____ |
9,142 ____ |
The Company's gearing ratio, expressed as the ratio of net debt to equity, can be expressed as follows:
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Short-term borrowings | 124,975 | 125,336 |
| Long-term borrowings | 110,810 | 79,842 |
| Cash and cash equivalents | 7,255 | 29,719 |
| Net debt | _ 228,530 _ |
_ 175,459 _ |
| Equity Net debt-to-equity ratio |
678,809 33.67% |
671,857 26.12% |
| 31.12.2012 | 31.12.2011 | |
|---|---|---|
| Financial assets | 495,374 | 478,597 |
| Investments in subsidiaries and associates | 139,676 | 127,259 |
| Loans | 89,230 | 128,182 |
| Trade receivables | 183,243 | 122,953 |
| Other receivables | 75,970 | 60,185 |
| Financial assets at fair value through profit or loss (statement of comprehensive | - | 10,300 |
| income) | ||
| Cash | 7,255 | 29,718 |
| Financial liabilities | 420,677 | 404,735 |
| Loans | 235,155 | 205,178 |
| Trade payables | 185,522 | 199,557 |
At the reporting date there are no significant concentrations of credit risk for loans and receivables designated at fair value through the statement of comprehensive income. Receivables and liabilities toward Governmnet are not included in stated amounts.
Company's Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company seeks to minimise the effects of these risks. The Company does not enter into, or trade in financial instruments, including derivative financial instruments, for speculative purposes.
The largest markets on which the Company provides its services and sells its products comprise the EU market and the market of the Russian Federation. The management determines the prices of its products separately for domestic and foreign markets by reference to the market prices.
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates relative to the interest rate, which applies to the financial instrument. Interest rate cash flow risk is the risk that the interest cost of an instrument will fluctuate over time. The interest rate risk exposure is low, as there are no financial instruments at variable rates.
The Company is exposed to credit risk through loans and trade receivables. Loans are granted to its subsidiaries and as such credit risk is under the control of the Company. Trade receivables are presented net of allowance for bad and doubtful accounts.
The eight largest customers of the Company are AD Plastik Slovenia, Visteon Germany, Hella Saturnus Slovenia, ZAO PHR Russia, Revoz Slovenia, ZAO AD Plastik Kaluga Russia, Ford Motor Germany and EURO APS Romania. Revenues generated by the sales to these business partners represent 91.90 percent of the total sales.
It is the policy of the Company to transact with financially sound companies where there is minimized risk of collection.
The Company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The carrying amounts of the Company's foreign-currency denominated monetary assets and monetary liabilities at the reporting date are provided in the table below using exchange rates of the Croatian National Bank:
| At 31 December | Assets Liabilities Net position |
|||||
|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| EUR | 29,907 | 207,968 | 39,215 | 219,139 | (9,308) | (11,171) |
| RUR | 513,880 | 83,105 | 18,059 | 32,412 | 495,821 | 50,693 |
| USD | 58 | 337 | 84 | 307 | (26) | 30 |
| GBP | 6 | 13 | 4 | 21 | 2 | (8) |
| CHF | - | - | 3 | 17 | (3) | (17) |
| _ 543,851 _ |
_ 291,423 _ |
_ 57,365 _ |
_ 251,896 _ |
_ 486,486 _ |
_ 39,527 __ |
|
The Company is mainly exposed to the countries using EUR and RUR as their currency. The following table details the Company's sensitivity to a 2-percent decrease of the Croatian kuna in 2012 and 2011 against the stated currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end. A negative number below indicates a decrease in profit and a positive number below indicates an increase in profit where the Croatian kuna changes against the relevant currency for the percentage specified above.
| EUR impact | ||
|---|---|---|
| 2012 | 2011 | |
| Change in exchange differences | (1,405) | (223) |
| RUR impact 2012 |
2011 | |
| Change in exchange differences | 1,860 | 183 |
Ultimate responsibility for liquidity risk management rests with the Management Board. The Company manages its liquidity using banking facilities (overdrafts) and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial assets and liabilities. The tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities based on the earliest date on which the Company can require payment i.e. can be required to pay.
| Up to 1 month |
1 to 3 months |
3 months to 1 year |
1 to 5 years |
Over 5 years |
Total | ||
|---|---|---|---|---|---|---|---|
| 2012 | Average interest rate |
||||||
| Assets | |||||||
| Non-interest | |||||||
| bearing | 27,281 | 25,906 | 174,648 | - | 139,676 | 367,511 | |
| Interest bearing | 9.95% | 1,007 ___ |
2,787 ___ |
42,672 ___ |
104,896 __ |
6,505 __ |
157,867 ___ |
| 28,288 ___ |
28,693 ___ |
217,320 ___ |
104,896 _ |
146,181 _ |
525,378 ___ |
||
| Liabilities | _ | _ | |||||
| Non-interest | |||||||
| bearing | 23,318 | 8,515 | 61,526 | 92,123 | - | 185,482 | |
| Interest bearing | 4.53% | 3,215 ___ |
18,277 ___ |
107,741 ___ |
110,810 __ |
- __ |
240,043 ___ |
| 26,533 ___ |
26,792 ___ |
169,267 ___ |
202,933 ________ |
- ________ |
425,525 ___ |
||
| 2011 | Average interest rate |
||||||
| Assets | |||||||
| Non-interest | |||||||
| bearing | 76,987 | 83,876 | 24,580 | - | 127,259 | 312,702 | |
| Interest bearing | 8.73% | 7,180 ___ |
8,410 ___ |
54,805 ___ |
124,281 _ |
21,312 _ |
215,988 ___ |
| 84,167 ___ |
92,286 ___ |
79,385 ___ |
124,281 __ |
148,571 __ |
528,690 ___ |
||
| Liabilities | _ | _ | |||||
| Non-interest | |||||||
| bearing | 29,608 | 59,730 | 13,404 | 96,662 | - | 199,404 | |
| Interest bearing | 4.3% | 22,257 ___ |
8,244 ___ |
102,390 ___ |
80,940 __ |
5,870 __ |
219,701 ___ |
| 51,865 ___ |
67,974 ___ |
115,794 ___ |
177,602 ________ |
5,870 ________ |
419,105 ___ |
Financial instruments held to maturity in the ordinary course of business are carried at the lower of cost and net amount less repaid portion.
The fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction, except in the event of a forced sale or liquidation. The fair value of a financial instrument is its quoted market price, or the amount obtained using the discounted cash flow method.
At 31 December 2012, the carrying amounts of cash, receivables, short-term liabilities, accrued expenses, shortterm borrowings and other financial instruments approximate their fair values due to the short-term maturity of these financial instruments.
These financial statements were approved by the Management Board of AD Plastik d.d. and authorised for issue on 23 April 2013.
For AD Plastik d.d. Solin:
Mladen Peroš President of the Management Board
Pursuant to clause 300 d. Companies Act and clause 29 of AD PLASTIK`s Inc., Solin, Statue, the Supervisory Board of AD PLASTIK dd Solin, OIB: 48351740621, on 28/05/2013. year brings
DECISION About acceptance of the Annual financial statements of AD PLASTIK Inc. and consolidated annual financial statements of the Group AD PLASTIK for 2012. Year
I. Acceptance of the Annual Report of Ad PLASTIK Inc. for 2012. year as follows:
| 1. Balance with the sum of assets and liabilities of | kn 1,114,101,233.00 |
|---|---|
| 2. Second Profit and loss data: | |
| -Total revenues | kn 567,335,838.00 |
| - Total expenditure | kn 522,121,080.00 |
| - Profit before taxation of | kn 45,214,758.00 |
| - Income tax | kn 447,430.00 |
| - Profit for the year | kn 44,767,328.00 |
| 3. Statement of Cash Flows for 2012. year | |
| with data on the Net decrease in cash and | |
| cash equivalents of | kn 5,165,910.00 |
| 4. Notes to Financial Statements |
II. Acceptance of the Consolidated Financial Statements of Group AD PLASTIK for 2012. year as follows:
| 1. Balance with the sum of assets and liabilities of | kn 1,303,875,873.00 |
|---|---|
| 2. Profit and loss data: | |
| - Total revenues of | kn 845,114,356.00 |
| - Total expenditure | kn 784,639,909.00 |
| - Profit before taxation of | kn 60,474,447.00 |
| - Income tax | kn 4,449,212,00 |
| - Profit for the year | kn 56,025.235.00 |
| - Minority interest income | kn 7,839.00 |
| - Net income Group | kn 56,017,396.00 |
| 3. Statement of Cash Flows for 2012. year | |
| with data on the Net decrease in cash and | |
| cash equivalents of | kn 5,047,458.00 |
Supervisory Board President
Pursuant to clause 275. Part 1, point 2 Companies Act and clause 33 of AD Plastik Inc, Solin, Statute, Supervisory Board of AD Plastik Solin on day __.07.2013. brings:
Net income of AD Plastik, Solin from year 2012., after tax, is 44,767,327.69 kuna and is being used on following:
General assembly President
Management Board Parent company MLADEN PEROŠ, Chairman of the Management Board Matoševa 8, 21210 Solin, Croatia Phone +385 21 20 65 00, Fax. + 385 21 20 64 95 e-mail: [email protected]
KATIJA KLEPO, Board Member responisble for finance, accounting and controlling Matoševa 8, 21210 Solin, Croatia Phone +385 21 20 64 88, Fax. + 385 21 20 64 89 e-mail: [email protected]
IVICA TOLIĆ, Board Member responisble for legal affairs and corporate communications Matoševa 8, 21210 Solin, Croatia Phone +385 21 20 64 88, Fax. + 385 21 20 64 89 e-mail: [email protected]
Subsidiaries abroad ZAO PHR 443057 SAMARA Krasnoglinski rajon Zas. Vintai RUSSIAN FEDERATION Phone +7 846 978 1234, Fax. + 7 846 978 1231 e-mail: [email protected]
AD PLASTIK Ltd. Belokranjska 4, 8000 Novo Mesto, REPUBLIC OF SLOVENIA Phone +386 7 337 9820, Fax. + 386 7 337 9821 e-mail: [email protected]
EURO APS s.r.l. 115400 Mioveni, Judetul Arges, Strada Uzinei 2A, ROMANIA Phone +40 755 016 858 e-mail: [email protected]
Skladskaja 6, Kaluška ob. Kaluga RUSSIAN FEDERATION Phone: + 7 1372 218 10 e-mail: [email protected]
Rue Heinnape 2 Nanterre FRANCE Phone: +33 1 72 36 73 07 e-mail: [email protected]
Ulica Kralja Petra I 334, SERBIA Phone: +381 11 8230 969 e-mail: [email protected]
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