Annual Report • Apr 29, 2014
Annual Report
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| I. | THE MANAGEMENT REPORT ON BUSINESS IN 2013 | 2 | |
|---|---|---|---|
| 1. | General information | 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 2013 | 10 | |
| b) | Financial reports of AD Plastik Group with consolidated affiliated companies | ||
| Euro APS and FADP | 13 | ||
| c) | Financial ratios | 14 | |
| d) | Market and expected development of AD Plastik Group | 15 | |
| e) | Personnel | 16 | |
| f) | Environment and Corporate Social Responsibility | 17 | |
| g) | Awards and recognitions | 18 | |
| h) | 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 of AD Plastik Inc. and subsidiaries and Independent Auditor's Report |
||
| b) | Unconsolidated financial statements of AD Plastik Inc. adn Independent Auditor's Report |
IV. PROPOSAL FOR DECISION ON ANNUAL FINANCIAL STATEMENTS ADOPTION
V. PROPOSAL FOR PROFIT DISTRIBUTION DECISION
VI. ADDRESS BOOK
I. MANAGEMENT REPORT ON BUSINESS IN 2013
Annual report of Group AD Plastik Inc.
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 2009-2013 (in HRK)
* Referes 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 4. EBITDA margin of AD Plastik Group since 2009-2013.
Image 6. Capital expenditures (CAPEX) and depreciation of AD Plastik Group since 2009- 2013 (in mil.of HRK)
Dear shareholders,
Business year 2013, which for AD Plastik Group ended with positive results, for the group was primarly characterized by a preparation of high number of development projects, which will be mostly realized in this year. These projects should result in significant revenue growth at the level of the group that is, they should lead to the full loading level in all AD Plastik Group plants in the following five years.
Despite the challenges which we are facing on our major sales markets, AD Plastik Group continued to realize the revenue growth, but with a reduced margin. The main reasons for the profitability decline are the postponement of the start of production of new vehicles, costs of implementation of new projects, decrease of value of the Russian ruble against the Euro.
In the parent company last year the preparations for the project Edison were finished, the installation of new painting line and the additional building for the injection molding plant were completed.
Currently we are in process of capacity increase. In Russia, at the end of 2013 AvtoVaz started with the serial production of vehicles within the project X-52, which will effect significantly on the growth of realization of our subsidiary PHR.
Other subsidiary in Russia, ADP Kaluga recorded a significant revenue growth in the previous year, and it was ensured a high number of new additional deals on the positions of exterior and interior of vehicles. Also, in 2013 ADP Mladenovac achieved a revenue growth and won new additonal nominations from the buyers. All the above mentioned facts point to a positive step forward in business of AD Plastik Group in this year, and especially in the following years.
Respectfully,
Mladen Peroš Chairman of the Management Board
Annual report of Group AD Plastik Inc.
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.
The Supervisory Board has seven members. However, during the reporting year the representative of Works Council was not elected as a member of Supervisory Board, so during the whole 2013, the Supervisory Board had six members, with term of office until:
Mr.Josip Boban, the Chairman, 19.07.2016.
Mr.Nikola Zovko, deputy of Chairman, 19.07.2016.
Mr.Marijo Grgurinović, member, 14.07.2015.
Mr.Dmitrij Leonidovič Drandin, member, 19.10.2015.
Mrs.Nadezhda Anatolyevna Nikitina, member, 19.10.2015.
Mr.Igor Antoljevič Solomatin, member, 14.07.2015.
The Supervisory Board established Appointment Committee, Remuneration Committee and Audit Committee.
The members of Appointment Committee are:
Mr.Nikola Zovko,economist, Chairman Mr.Dmitrij Leonidovič Drandin,economist Mr.Nenad Škomrlj, jurist
Members of Audit Committee are: Mr.Nikola Zovko,economist, Chairman Mr.Nenad Škomrlj,jurist, deputy of Chairman Mr.Anatolij Janovskis, economist Mr.Dmitrij Leonidovič Drandin, economist
Member of Remuneration Committee are: Mrs.Ana Luketin,jurist, Chairman Mr.Dmitrij Leonidovič Drandin,economist Mr.Nikola Zovko, economist
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 31.12.2013 the Board consisted of five members: Mr. Mladen Peroš, Chairman of the Board, Mrs. Katija Klepo, member of the Board for Finance and Accounting, Mr. Ivica Tolić, member of the Board for legal affairs and corporate communications, Mr. Denis Fusek, member of the Board for Business organization, Informatics and Kontrolling, and Mr.Hrvoje Jurišić, as member of the Board for Development. Term of office of all members lasts until 19.07.2016.
The bodies of subsidiaries and affiliated companies are: The Assembly; The Supervisory Board; General Manager. Bodies of subsidiaries and affiliated 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 of plastic parts for the automotive industry. Business activity of AD Plastik in Croatia is the production of plastic parts for vehicle interiors and exteriors. Production in Croatia takes place at locations in Solin, the headquarter and
the development centre of the company, and in Zagreb, Jankomir.
Besides three production sites in Croatia, the company has plants organized as companies, that is legal entities in Slovenia, Serbia, Romania and three of them in Russia (in Togliatti, Kaluga and Luga).
Information on ownership by subsidiaries and affiliated companies is shown in the following image.
Annual report of Group AD Plastik Inc.
e) OWNERSHIP STRUCTRURE
The equity 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 2013
| Number of | Percent of | ||
|---|---|---|---|
| S.n. | Owner | shares | ownership |
| 1 | OAO HOLDING AUTOKOMPONENTI | 1.259.875 | 30,00% |
| HYPO ALPE-ADRIA-BANK D.D./ RAIFFEISEN OBVEZNI MIROVINSKI | |||
| 2 | FOND | 273.462 | 6,51% |
| 3 | ADP-ESOP D.O.O. | 213.098 | 5,07% |
| HYPO ALPE-ADRIA-BANK D.D./ PBZ CROATIA OSIGURANJE OBVEZNI | |||
| 4 | MIROVINSKI FOND | 119.640 | 2,85% |
| ERSTE & STEIERMARKISCHE BANK D.D./ZBIRNI SKRBNIČKI RAČUN ZA | |||
| 5 | STRANU PRAVNU OSOBU | 110.349 | 2,62% |
| 6 | ERSTE & STEIERMARKISCHE BANK D.D./CSC | 87.668 | 2,09% |
| 7 | PBZ D.D./STATE STREET CLIENT ACCOUNT | 76.720 | 1,83% |
| SOCIETE GENERALE-SPLITSKA BANKA D.D./ ERSTE PLAVI OBVEZNI | |||
| 8 | MIROVINSKI FOND | 74.567 | 1,78% |
| 9 | PBZ D.D./SKRBNIČKI ZBIRNI RAČUN KLIJENTA | 72.388 | 1,72% |
| 10 | BOBAN JOSIP | 69.850 | 1,66% |
| 11 | OTHERS | 1.841.967 | 43,86% |
During 2013 the company disposed 2.519 of its own shares for the purpose of rewarding employees of the company for their successful work in 2012.
On 31.12.2013 the company had 37.762 of its own shares, which makes 0,899% 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. In May 2013 AD Plastik Inc. and Interkapital vrijednosni papiri have also signed the Agreement on Market Making.
Image 8. Movement of average daily stock price ADPL-R-A and Crobex since 01.01.2013 – 31.12.2013.
Source: ZSE
The total turnover achieved by share trading of AD Plastik Inc. in 2013 amounted to 91.478.496 HRK, while the turnover for 2012 amounted to 105.338.736 HRK. Out of all shares listed on the Zagreb Stock Exchange, the share ADPL-R-A was ranked seventh by achieved turnover in 2013. In 2013 AD Plastik Inc. won the second prize among domestic companies that have achieved the best Investor Relations. This award is the first such award for the company.
In 2012 the Company paid the dividend in the amount of 8,00 HRK per one share, out of that 4,00 HRK per share was paid in february, and a difference of 4,00 HRK was paid in August.
Announcement of results for the I quarter of 2014: 30.04.2014
The General Assembly of AD Plastik Inc.will be held: on 24.07.2014
Announcement of results for the first half of 2014:on 30.07.2014
Announcement of results for the III quarter and first nine months of 2014: on 30.10.2014
Announcement of results for the IV quarter and twelve months of 2013: on 14.02.2015
Note: Data from financial calendar are subject to change.
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 2013 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:
● Out of seven member of Supervisory Board of the Company, three of them are independent, while the representative of the works council was not appointed.
● Information on all earnings and compensation which a member of the Board receives from the Company are summary published as part of the Annual Report of the Company.
● The Company did not adopt the Statement on the remuneration policy for the Management Board and Supervisory Board
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 2013 was establihsed the Internal Audit Service, whose activities began in 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 2013 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.
In 2013 AD Plastik Group achieved 8,14% of sales revenue growth compared with the same period last year.
The reporting year for AD Plastik Group was marked by a high number of developmental projects. Therefore, the revenue growth in this year is mostly related to the increase of revenues from development and manufacture of tools and to the increase of sales of products on new locations.
The most important reasons for the decrease of profitability in 2013 are:
In order to reduce further impact of exchange rate volatility of Russian Ruble against the EUR at the end of the previous year, we increased the hedging of foreign exchange rate mentioned through forward contracts.
By changing the selling price of products in accordance with exchange rate and the localization of material suppliers we will additionally reduce the foreign exchange risk.
In the Parent company was completed a larger part of activity related to the preparations for the Edison project in Croatia. A serial production of the new Renault "Twingo" is planned in April of this year. The assembly of the new painting line is completed and the trial production began. Expansion work on the injection molding area in Zagreb has also been finalized. Likewise, it is continued the expansion of injection molding capacity for the plants in Zagreb and Solin.
Image 9. New paint shop in Zagreb
We made deals on additional quantities of interior products for vehicles VW, with the planned start of serial production in the third quarter of this year. The expected revenue from this project is higher than 3 milion EUR during its complete duration. Likewise, it was made a deal for exteriors for redesigned vehicle Renault Clio. The expected revenue from this deal is higher than 5 milion EUR during its complete duration.
On the basis of realized investments in Croatia for the project Edison and according to the solution of Ministry of Economy, it is planned to use the reduced rates of income tax (from 20% to 0%), also in 2013.
At the General Assembly in July a decision on dividend payment was made in total amount of 8,00 HRK per share.
In the middle of 2014 it is planned the cessation of production activities. The company will further exist with the minimum number of employees.
In the reporting period compared to 2012 ADP Mladenovac recorded an increase of operating revenue of 46,0% that is 31,6 milion HRK. In the reporting year was achieved a positive financial result.
The industrialization of the new project of headliners for Edison was completed. A start of production is expected in April 2014.
In the reporting year were made deals on production of grab handles with Fiat for the buyer's plants in Italy and Serbia. At the end of 2013 was made a decision on introducing the technology of injection molding on this plant.
Image 10. Fiat 500L
With Renault Group was made a deal for the production of grab handles, and the start of serial production is planned in the third quarter of 2014. The expected revenue from this deal is higher than 4 milion EUR during the complete duration of this project.
The total realized operating revenue in the reporting year amounted to 79,01 milion HRK, and compared to the previous year this represents a nearly eight times growth. The main reason for the growth in operating
revenue is the production throughout the whole business year, a large number of new projects and the start of serial deliveries in the injection molding technology. In the reporting year was realized a negative financial reusult which is a result of development and investment cycle.
In the third quarter in Kaluga started the production in technology of injection molding. Started the production for the technology of blow molding within the project X52 and H79. The production for the technology of sun-visors started in September and the deliveries for the project X52 began.
In the reporting year with Renault Russia was made a deal for production of parts for interior and exterior for H79 Ph 2 (Duster) with the deliveries in 2015. The expected revenue from this deal is higher than 25 milion EUR during the whole duration of this project.
In 2013 operating revenues amounted to 275 milion HRK, which represents a decrease of 6% compared to the previous year. The main reason for this drop is the delay of new project X52, and the cessation of production of older versions of the vehicle.
Image 11. Renault Duster
In the reporting year was realized a negative financial reusult, which is the result of above mentioned reasons and the intensive development and investment cycle.
The activities for the realization of the project X52 were completed and the serial production started. In the following period this project should ensure a stable revenue growth for this plant. The organizational changes are in progress in order to optimize the costs of the company, incurred due to the production volume growth and the acceptance of large number of new projects.
It was made a new deal for the production of interior positions for the vehicle Chevrolet Niva. The start of serial production is planned at the end of 2015. The expected revenue from this deal amounts to about 10 milion EUR during the complete duration of this project.
In the reporting year compared to the previous year was realized an operating revenue growth of 22% that is 796 milion HRK. The achieved realization of this year is higher than the planned one, as the result of the good sales of the model Dacia Sandero. New models of Dacia are well accepted on the market, so the full capacity of this plant has been achieved also in this year. In the reporting year was paid the correspondent part of the dividend, related to profit of 2012 in the amount of 26,93 milion HRK.
In the reporting year was recorded a decrease of operating revenue of 21% compared to the prevoius year. The achieved sales realization in 2013 is lower than the planned one due to the reduced demand for Ford vehicles in Russia. In the second quarter FADP was nominated for the production of interior parts for the following Nissan vehicles (P32R (the new xtrail) & P32S (the new Qashqai) with the start of serial production at the beginning of 2015.
Image 12. New Renault Twingo
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 2012 and 2013, in which AD Plastik has 50%, that is 40 % of ownership.
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.
Table 2. Profit and loss account of AD Plastik Group with consolidation of belonging ownership share in Euro APS and FADP for 2013 in thousands of HRK
| AD Plastik Group with | AD Plastik Group with | |
|---|---|---|
| Positions | consolidation of belonging | consolidation of belonging |
| part of ownership in | part of ownership in | |
| EURO APS and FADP | EURO APS and FADP | |
| 2012. | 2013. | |
| OPERATING REVENUES | 1.281.207 | 1.369.868 |
| Sales revenue | 1.255.623 | 1.334.867 |
| Other revenues | 25.585 | 35.001 |
| OPERATING EXPENSES | 1.194.870 | 1.289.131 |
| Material expenses | 793.530 | 776.217 |
| Staff costs | 191.548 | 214.224 |
| Amortization | 69.712 | 68.450 |
| Other expenses | 140.081 | 230.241 |
| FINANCIAL REVENUES | 24.240 | 15.749 |
| FINANCIAL EXPENSES | 44.691 | 61.654 |
| TOTAL REVENUE | 1.305.447 | 1.385.618 |
| TOTAL EXPENSES | 1.239.561 | 1.350.785 |
| Profit before taxation | 65.886 | 34.833 |
| Profit tax | 9.869 | 7.181 |
| PROFIT FOR THE PERIOD | 56.017 | 27.652 |
As can be seen from Table 2, operating revenue of AD Plastik Group with consolidated belonging ownership share in Euro APS and FADP recorded an increase in 6,92 % compared to the previous year and in total they amounted to 1,37 billion HRK.
It is important to emphasize that the affiliated companies have no financial liabilities arising from credits to external entities, besides the credits of the owners themselves in these 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 credit liabilities of AD Plastik Group without consolidation of affiliated companies, minus the cash assets on the accounts of affiliated companies, and they amount in total to 372,17 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 2012 and 2013 in thousands of HRK
| AD Plastik Group with | AD Plastik Group | |||
|---|---|---|---|---|
| consolidation of | with consolidation | |||
| belonging part of | of belonging part of | |||
| A/P | Code | Positions | ownership in EURO APS | ownership in EURO |
| and FADP | APS and FADP | |||
| 2012. | 2013. | |||
| A. | Fixed assets | 796.864 | 1.034.911 | |
| B. | Current assets | 543.875 | 522.881 | |
| ASSETS | C. | Prepayment & accrued inc. | 102.496 | 186.394 |
| A+B+C | TOTAL ASSETS | 1.443.234 | 1.744.186 | |
| A. | Capital and Reserves | 708.324 | 793.059 | |
| B. | Long-term liabilities | 201.690 | 285.234 | |
| C. | Provisions | 12.575 | 8.074 | |
| D. | Short-term liabilities | 518.929 | 600.097 | |
| LIABILITIES | E. | Deferred pay. Of costs & future inc. | 1.717 | 57.722 |
| F(A+E) | TOTAL LIABILITIES | 1.443.234 | 1.744.186 |
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 affiliated companies.
From the consolidated statement is evident that EBITDA (Earnings before interest, taxes, depreciation and amortization) in 2013 compared to the 2012 for AD Plastik Group with consolidation of belonging part of ownership in Euro APS and FADP was minimally corrected for 4,9% and it amounts to 148,4 milion HRK, in contrast to 156,05 milion HRK which was the amount in 2012.
Table 4. Financial ratios of AD Plastik Group in 2013 in thousands of HRK
| Ratio | AD Plastik Group with consolidation of belonging part of ownership in EURO APS and FADP |
AD Plastik Group - without consolidation of associated companies |
|---|---|---|
| 2013. | 2013. | |
| Business revenues | 1.369.868 | 781.715 |
| Net profit | 27.652 | 27.652 |
| Assets | 1.744.186 | 1.536.431 |
| Net financial debt (Long-term + short-term liabilities to banks - money - financial assets) |
372.167 | 496.004 |
| Debt-service ratio (Liabilities / Assets) |
50,75% | 50,08% |
| EBIT (earnings before interest and taxes) |
79.952 | 20.424 |
| EBITDA (earnings before interest and taxes, depreciation and amortization) |
148.402 | 70.793 |
| EPS (earnings per share) | 6,58 | 6,6 |
| Price (share price)/Sales (revenue) | 0,35 | 0,61 |
| Price (share price)/EBITDA | 3,02 | 6,30 |
| Net financial debt/EBITDA | 2,51 | 7,01 |
Note: For the calculation of share price we used an average price of ADPL-R-A on the day 31.12.2013
The reporting year was the 6th year in a row in which was recorded a decline in production and sales for most car manufacturers in Western Europe. The levels of sales are the lowest levels achieved in the past 17 years. Despite the attractive commercial actions of traders during the last quarter, the final decrease in sales in 2013 amounted to -1.7%. At the same time, the Russian market recorded a decline of -5.5% in the reporting period regarding the mix of passenger cars and light commercial vehicles. Interesting is the following situation related to the most successful vehicles: those are either the "standard" ones as VW Golf of Ford Fiesta, remaining best sellers through the years, or new models of vehicles which are successful during limited period of time, usually 2 to 3 years before sales decline.
From a commercial point of view, we succeeded in winning key projects for AD Plastik like H79ph2; and headliners and bumpers for Kaluga.
Image 13. Grab handle – development product of AD Plastik
Target customers for an increase in sales should be a key world's car manufacturers:
An interesting fact is winning new grab handles for FCA (Fiat Chrysler Automotive) and for Renault with future deliveries extended to USA and to China.
This was a demonstration that we can develop new opportunities and extend portfolio of products/customers according to our policy from 2012: one product/technology must be sold to minimum 2 different customers and we must have minimum two different products/technologies per customer.
Image 14. Sun-visors – product of AD Plastik
More than ever, targeted products must be products within our existing portfolio of technologies, having high Value Added content, and which with optimized packaging and logistics costs can be delivered to long distance locations (German market is one of our targets)
As example of these products range, we have grab-handles, sun-visors, exterior and interior painted trims and other products for which A2Mac1 database properly used will help us to reinforce our expertise and allow us to get new opportunities.
During year 2014, involvement of all activities to support project management and business acquisition will be the key in getting new profitable business.
People integrated into the system of AD Plastik make a strong and competent whole for automotive industry. AD Plastik Inc. in Croatia has 894 employees. The average age is 42.11 years.
Image 15. Employee education structure on 31.12.2013
The concept of continuous development Instead of the concept of permanent job ensurement, we offer a concept of constant development and continuous training and education, which ensures an employment through the entire period in which people develop along with the company.
In employee education stucture, highly qualified staff makes 30% of all our employees. This is a staff that possesses specific professional knowledge applied in the automotive industry, which supports the concept of the company of improving both production and development components.
The company regularly on an annual basis, measures and evaluates the level of motivation and satisfaction of its employees, and invests in improving indicators of motivation and satisfaction. The rate of voluntary fluctuation is low, and for 2013 amounts to 1,74%.
A collective labor agreement is in force in AD Plastik Inc., which until this year has been signed for a period of one year.
On the plant Solin in June was performed a coordinated inspectional supervision by Environmental inspections, Water management inspection, sanitary inspections, Inspection of pressure vessels, Electric Power inspection, Occupational safety and fire inspections. By coordinated inspectional supervision were not identified violations of regulations.
Also, on the plant Solin at the beginning of Septemner was performed a trial education program on the topic "Strengthening capacities for performance of supervision over cross-border movement of waste" within the twinning project IPA 2009 which is led by the Ministry of Environment and Nature in collaboration with the Environment Agency of the Republic of Austria.
On the plant Zagreb in July was performed an inspectional supervision by Environmental inspection. By inspectional supervision were not identified violations of provisions of the Environmental Protection Act.
Renault has certified the laboratory in Solin for the methods which we apply and gave us the self-agreement valid for 3 years.
This information is important for AD Plastik Group, because there are some methods which we can't use in our laboratory that we send to external laboratory which requires significant financial expenses.
Corporate Social Responsibility of AD Plastik in 2013 was verified by EcoVadis, independent company for verification of corporate social responsibility of suppliers, according to the order of our customer Renault.
On this occasion, AD Plastik is designated as company with confirmed corporate social responsibility.
Image 16. Golden Key – the award for the best croatian exporter to Slovenia for 2012
In 2013 AD Plastik Inc. received the following awards and recognitions:
In the Group`s balance sheet positions relative to December 31st, 2012 the greatest changes were recorded in these positions:
milion HRK) – due to the realization of investments ;
• (AOP 106) Deferred payment of costs and future income (increase of 54,31 milion HRK) – due to accrued, but unbilled income from tools whose manufacture is in process
Results of affiliated companies EAPS Romania and FADP Holding France are included in the Group result under the equity method.
Gross salary paid to the auditor for conducted audit of financial reports in 2013 amounted to 552.797,00 HRK.
Annual report of Group AD Plastik Inc.
II. STATEMENT OF PERSONS RESPONSIBLE FOR THE PREPARATION OF ANNUAL REPORTS
According to the best of my knowledge:
AD Plastik d.d., Solin and its subsidiaries Consolidated financial statements and Independent Auditor's Report For the year ended 31 December 2013
| 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 | 9-57 |
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") adopted by European union, which give a true and fair view of the financial position and results of operations of AD Plastik d.d., ("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. Matoševa 8 21210 Solin Republic of Croatia
23 April 2014
| 31.12.2013 | 31.12.2012 | ||
|---|---|---|---|
| Notes | |||
| Sales | 6 | 817,591 | 756,035 |
| Other income | 7 | 21,538 ____ |
25,680 ____ |
| Total income | 839,129 ____ |
781,715 ____ |
|
| Increase in the value of work in progress and finished products | 7,195 | (527) | |
| Cost of raw material and supplies | 8 | (377,099) | (387,909) |
| Cost of goods sold | 9 | (32,244) | (43,549) |
| Service costs | 12 | (54,819) | (62,006) |
| Staff costs | 10 | (165,658) | (151,554) |
| Depreciation and amortisation | 11 | (50,370) | (54,136) |
| Other external expenses | 13 | (131,128) | (37,638) |
| Other operating expenses | 14 | (6,487) | (3,993) |
| Provisions for risks and charges | 15 | (7,310) ____ |
(2,103) ____ |
| Total operating expenses | (817,920) ____ |
(743,415) ____ |
|
| Profit from operations | 21,209 ____ |
38,300 ____ |
|
| Financial income | 16 | 24,049 | 33,606 |
| Financial expenses | 17 | (58,560) | (41,225) |
| Equity income | 16 | 41,708 ____ |
29,793 ____ |
| Net profit from financial activities | 7,197 ____ |
22,174 ____ |
|
| Profit before taxation | 28,406 ____ |
60,474 ____ |
|
| Income tax expense | 18 | (754) ____ |
(4,449) ____ |
| Profit for the year | 27,652 ____ |
56,025 ____ |
|
| Other comprehensive income | - ____ |
- ____ |
|
| Total comprehensive income | 27,652 ____ |
56,025 ____ |
|
| Profit attributable to: | |||
| Equity holders of the Company | 27,661 | 56,017 | |
| Non-controlling interests | (9) | 8 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the Company | 27,661 | 56,017 | |
| Non-controlling interests | (9) | 8 | |
| Basic and diluted earnings per share | 19 | 6,64 | 13,47 |
| Notes | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 20 | 121,104 | 60,811 |
| Tangible assets | 21 | 711,217 | 597,798 |
| Investments in associates | 22 | 101,012 | 86,235 |
| Other financial assets | 23 | 54,334 | 70,107 |
| Deferred tax assets | 18 | 1,992 ____ |
2,687 ____ |
| Total non-current assets | 989,659 ____ |
817,638 ____ |
|
| Current assets | |||
| Inventories | 24 | 94,793 | 83,985 |
| Trade receivables | 25 | 148,435 | 185,996 |
| Other receivables | 26 | 62,554 | 78,341 |
| Current financial assets | 27 | 27,144 | 21,959 |
| Cash | 28 | 28,943 | 13,462 |
| Prepaid expenses and accrued income | 29 | 184,903 ____ |
102,495 ____ |
| Total current assets | 546,772 ____ |
486,238 ____ |
|
| TOTAL ASSETS | 1,536,431 ____ |
1,303,876 ____ |
| Notes | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|
| Equity | |||
| Share capital | 30 | 419,958 | 419,958 |
| Reserves | 255,178 | 238,638 | |
| Profit for the year | 27,661 | 56,017 | |
| Non-controlling interests | 9 ____ |
16 ____ |
|
| Total equity | 702,806 ____ |
714,629 ____ |
|
| Long-term provisions | 31 | 2,652 | 2,498 |
| Long-term borrowings | 32 | 255,816 | 201,618 |
| Other non-current liabilities | 32 | 226 ____ |
71 ____ |
| Total non-current liabilities | 258,694 ____ |
204,187 ____ |
|
| Advances received | 33 | 94,660 | 98,539 |
| Trade payables | 34 | 156,085 | 123,784 |
| Short-term borrowings | 35 | 239,963 | 126,712 |
| Other current liabilities | 36 | 20,611 | 25,431 |
| Short-term provisions | 31 | 7,581 | 8,877 |
| Accrued expenses and deferred income | 37 | 56,031 ____ |
1,717 ____ |
| Total current liabilities | 574,931 ____ |
385,060 ____ |
|
| Total liabilities | 833,625 ____ |
589,247 ____ |
|
| TOTAL EQUITY AND LIABILITIES | 1,536,431 ____ |
1,303,876 ____ |
| 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 |
Ex ha c ng e d i f fe re nc e s o n inv tm es e in ts n bs i d iar i su in es he t o r ies tr co un |
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 1 De be 2 0 1 1 t ce a ce m r |
4 1 9, 9 5 8 |
1 8 9, 3 1 7 |
6, 1 4 3 |
( 6 0 ) 7 |
3 7 8 |
( 3 7 8 ) |
8 8, 8 1 1 |
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 |
| f fer for Ex ha d i inv in 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 |
4 1 9, 9 5 8 |
1 8 9, 7 4 5 |
6, 1 4 3 |
( 8, 2 4 6 ) |
4, 2 7 6 |
( 4, 2 7 6 ) |
1 0 7, 0 1 3 |
7 1 4, 6 1 3 |
1 6 |
7 1 4, 6 2 9 |
| C ha in l l ing in tro ter ts ng es no n-c on es |
- | - | - | - | - | - | - | - | 2 | 2 |
| 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 0 ) |
- | ( ) 3, 9 9 1 |
- | - | - | ( 4, 0 3 1 ) |
- | ( 4, 0 3 1 ) |
| D iv i de ds i d n p a |
- | - | - | - | - | - | - | ( 3 3, 6 2 1 ) |
- | ( 3 3, 6 2 1 ) |
| f o Va lua ion ha t o wn s res |
- | - | - | - | 7 8 7 |
( ) 7 8 7 |
- | - | - | - |
| D is i bu ion loy tr t to s em p ee s |
- | - | - | - | ( 3 1 0 ) |
3 1 0 |
3 1 0 |
3 1 0 |
- | 3 1 0 |
| Ac la d inc i h ho l d ing ( No te tax t te cu mu om e w 4, 1 ), |
- | - | - | - | - | - | ( 2, 1 3 5 ) |
( 2, 1 3 5 ) |
- | ( 2, 1 3 5 ) |
| Pr f i for he t t o y ea r |
- | - | - | - | - | - | 2 7, 6 6 1 |
2 7, 6 6 1 |
( ) 9 |
2 7, 6 5 2 |
| Ba lan 3 1 De be 2 0 1 3 t ce a ce m r |
4 1 9, 9 5 8 |
1 8 9, 7 0 5 |
6, 1 4 3 |
( ) 1 2, 2 3 7 |
4, 7 5 3 |
( ) 4, 7 5 3 |
9 9, 2 2 8 |
7 0 2, 7 9 7 |
9 | 7 0 2, 8 0 6 |
| Cash flows from operating activities | ||
|---|---|---|
| 31.12.2013 | 31.12.2012 | |
| Profit for the year | 27,652 | 56,025 |
| Income tax expense | 754 | 4,449 |
| Depreciation and amortisation | 50,370 | 54,136 |
| Net book value of disposed assets | 40,856 | 2,488 |
| Decrease in long-term and short-term provisions | (1,142) | (3,839) ____ |
| Profit from operations before working capital changes | 118,490 ____ |
113,259 ____ |
| Increase in inventories | (10,808) | (10,989) |
| Decrease/(increase) in trade receivables | 37,561 | (30,050) |
| Decrease/(increase) in other receivables | 15,787 | (32,904) |
| Increase in trade payables | 32,301 | 3,154 |
| Decrease in advances received | (3,870) | (22,708) |
| Decrease in other current liabilities | (8,917) | (16,054) |
| Increase/(decrease) in accrued expenses and deferred income | 54,314 | (491) |
| (Increase)/decrease in prepaid expenses | (82,408) ____ |
13,670 ____ |
| Cash generated from operations | 152,450 ____ |
16,887 ____ |
| Sale of own shares | - | (4,773) |
| Investments in subsidiaries | (14,777) | (1,901) |
| Purchases of property, plant and equipment, and intangible assets | (264,938) | (135,853) |
| Investments in Funds | - | 2,800 |
| Proceeds short-term loans | 10,588 ____ |
15,389 ____ |
| Cash used in investing activities | (269,127) ____ |
(124,338) ____ |
| Dividends paid | (33,621) | (33,566) |
| Bonuses | 310 | 524 |
| Paid withholding tax | (2,135) | |
| Received loans | 293,218 | 207,330 |
| Repayments of borrowings | (125,614) ____ |
(89,417) ____ |
| Cash generated from/(used in) financing activities | 132,158 ____ |
84,871 ____ |
| Net cash flow | 15,481 ____ |
(22,580) ____ |
| At 1 January | 13,462 | 36,042 |
| Net cash inflow/(outflow) | 15,481 | (22,580) |
| At 31 December | 28,943 ____ |
13,462 ____ |
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 June 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 July 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 on 4th of August 2011 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.
The liquidation process was completed on 3 July 2013 at the Commercial Court in Split.
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 2013, the number of staff employed was 2,813 (31 December 2012: 2,711).
| 2013. | 2012. | |
|---|---|---|
| AD Plastik d.d. | 894 | 830 |
| ZAO PHR | 704 | 661 |
| AD Plastik d.o.o. | 23 | 29 |
| SG Plastik d.o.o. | - | - |
| ADP d.o.o. Mladenovac | 136 | 75 |
| ZAO ADP Kaluga | 181 | 137 |
| EURO APS | 616 | 652 |
| FADP | 259 | 327 |
| Mandate | ||
|---|---|---|
| Members of the Supervisory Board: | ||
| Josip Boban (Chairman) | From 19 July 2012 | To 19 July 2016 |
| Nikola Zovko (Deputy Chairman) | From 19 July 2012 | To 19 July 2016 |
| Marijo Grgurinović | From 14 July 2011 | To 14 July 2015 |
| Igor Anatoljevič Solomatin | From 14 July 2011 | To 14 July 2015 |
| Drandin Dmitrij Leonidovič | From 19 October 2011 | To 19 October 2015 |
| Nikitina Nadežda Anatoljevna | From 19 October 2011 | To 19 October 2015 |
| Members of the Management Board: | ||
| Mladen Peroš (President) | From 19 July 2012 | To 19 July 2016 |
| Ivica Tolić | From 19 July 2012 | To 19 July 2016 |
|---|---|---|
| Katija Klepo | From 19 July 2012 | To 19 July 2016 |
| Denis Fusek | From 26 September 2013 | To 19 July 2016. |
| Hrvoje Jurišić | From 26 September 2013 | To 19 July 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 adopted by European Union are effective for the current period:
At the date of authorisation of these financial statements the following standards, amendments to existing standards and interpretations were in issue but not yet effective:
Standards and Interpretations in issue not yet adopted (continued)
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 Group 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 Croatian laws and International Financial Reporting Standards adopted by the European Union
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 Croatian laws and International Financial Reporting Standards (IFRSs) adopted by European union; 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 2013, 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 2013, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.637643 (31 December 2012: HRK 7.545624 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 | |
|---|---|---|
| 2013 | 2012 | |
| 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 Company invoiced the entire balance of interest loan receivable from related and subsidiary companies. Based on subsequently received information, it was identified that the interest receivable is subject to withholding tax at the countries of domicile of those companies, and the invoiced interest receivable was reduced by the withholding tax which was recognised as a correction to the retained earnings of the Company.
Given that the correction is not material for the financial statements of the Company, the opening balances were not restated, in accordance with International Accounting Standard 8 'Accounting Policies, Changes in Accounting Estimates and Errors'.
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:
| 2013 | 2012 | |
|---|---|---|
| Russia | 346.659 | 292.648 |
| Slovenia | 220.750 | 232.059 |
| Germany | 106.287 | 102.906 |
| France | 90.753 | 71,506 |
| Other countries | 53.142 ____ |
56.916 ____ |
| 817,591 ____ |
756,035 ____ |
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 2013 | 2012 | |
|---|---|---|
| Foreign sales | 742,886 | 736,662 |
| Domestic sales | 74,705 ____ |
19,373 ____ |
| 817,591 ____ |
756,035 ____ |
| 2013 | 2012 | |
|---|---|---|
| Revenue from the tax return | 4,431 | - |
| Income from the reversal of provisions for unused vacation days | 2,258 | 250 |
| Income from sale of assets | 2,027 | - |
| Income from bonuses provided by suppliers | 1,534 | 2,392 |
| Income from the reversal of provisions for jubilee | 1,421 | 711 |
| Income from consumption of own products, goods and services | 1,116 | 1,155 |
| Income from the reversal of provisions for litigation | 1,100 | - |
| Income from the reversal of provisions for pensions | 780 | - |
| Income from damages collected | 118 | 224 |
| Income from sale of inventories | - | 14,795 |
| Income from the reversal of provisions for bonuses to employees | - | 1,047 |
| Other operating income | 6,753 ____ |
5,106 ____ |
| 21,538 ____ |
25,680 ____ |
| 2013 | 2012 | |
|---|---|---|
| Direct materials | 332,227 | 352,450 |
| Electricity | 19,044 | 14,436 |
| Other expenses | 25,828 ____ |
21,023 ____ |
| 377,099 ____ |
387,909 ____ |
| 2013 | 2012 | |
|---|---|---|
| Cost of goods sold | 18.083 | 41,377 |
| Cost of direct material sold | 6,113 | 384 |
| Cost of spare parts sold | 6,595 | 623 |
| Other costs of goods sold | 1,453 ____ |
1,165 ____ |
| 32.244 ____ |
43,549 ____ |
| 2013 | 2012 | |
|---|---|---|
| Net wages and salaries | 94,616 | 83,541 |
| Taxes and contributions out of salaries | 29,908 | 27,461 |
| Contributions on salaries | 26,528 | 23,107 |
| Other staff costs | 14,606 ____ |
17,445 ____ |
| 165,658 ____ |
151,554 ____ |
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.
| 2013 | 2012 | |
|---|---|---|
| Depreciation | 41,205 | 37,918 |
| Amortisation | 9,165 ____ |
16,218 ____ |
| 50,370 ____ |
54,136 ____ |
| 2013 | 2012 | |
|---|---|---|
| Transport | 23,500 | 29,127 |
| Rental costs | 8,318 | 9,139 |
| Regular and preventive maintenance costs - machinery | 7,480 | 6,790 |
| Tool modification costs | 1,837 | 727 |
| Communal fees | 1,682 | 872 |
| Telecommunications and information system costs | 1,627 | 1,858 |
| Water supply | 1,085 | 862 |
| Commissions | 518 | 288 |
| Forwarding and shipping costs | 429 | 903 |
| Other expenses | 8,343 ____ |
11,440 ____ |
| 54,819 ____ |
62,006 ____ |
| 2013 | 2012 | |
|---|---|---|
| Temporary service costs - manufacture of tools | 102,976 | 16,822 |
| Professional service cost | 5,931 | 5,280 |
| Insurance premiums | 3,187 | 1,713 |
| Bank charges | 1,512 | 2,798 |
| Other fees (Supervisory Board) | 1,668 | 397 |
| Communal fees for the use of construction plots | 1,337 | 1,439 |
| Payment operation charges | 960 | 849 |
| Customer complaints | 647 | 327 |
| Cost of goods provided free of charge | 622 | 867 |
| Gifts for employees' children | 385 | 212 |
| Occupational Health and Safety service costs | 302 | 206 |
| Entertainment | 298 | 375 |
| Professional training costs | 266 | 436 |
| Water management fee | 209 | 169 |
| Forest reproduction levies | 149 | 164 |
| Translation service costs | 81 | 215 |
| Other external costs | 10,598 ____ |
5,369 ____ |
| 131,128 ____ |
37,638 ____ |
| 2013 | 2012 | |
|---|---|---|
| Property tax | 1,687 | 1,740 |
| Other expenses | 4,800 ____ |
2,253 ____ |
| 6,487 ____ |
3,993 ____ |
| 2013 | 2012 | |
|---|---|---|
| Vacation accruals | 3,262 | 348 |
| Provisions under actuarial calculations | 2,652 | 1,707 |
| Litigation provisions | 1,100 | 38 |
| Provisions for bonuses - employees | - | 10 |
| Other provisions | 296 ____ |
- ____ |
| 7,310 ____ |
2,103 ____ |
| 2013 | 2012 | |
|---|---|---|
| Income from share of profits in associates | 41,708 | 29,793 |
| Foreign exchange gains | 12,804 | 16,739 |
| Interest income | 10,829 | 14,323 |
| Other finance revenue | 416 ____ |
2,544 ____ |
| 65,757 ____ |
63,399 ____ |
| 2013 | 2012 | |
|---|---|---|
| Foreign exchange losses | 38,620 | 17,143 |
| Interest expense | 19,940 | 16,879 |
| Other finance costs | - ____ |
7,203 ____ |
| 58,560 ____ |
41,225 ____ |
Income tax comprises the following:
| 2013 | 2012 | |
|---|---|---|
| Current tax | 59 | 6,142 |
| Deferred tax | 695 ___ |
(1,693) ___ |
| 754 ___ |
4,449 ___ |
|
| Deferred tax, as presented in the statement of financial position, is as follows: | ||
| 2013 | 2012 |
| 1,992 ___ |
2,687 ___ |
|---|---|
| (695) | 1,693 ___ |
| 2,687 | 994 |
| ___ |
Deferred tax assets arise from the following:
| 2013 | Opening balance |
Credited to statement of comprehensive income |
Closing balance |
|---|---|---|---|
| Temporary differences: | |||
| Provisions for long-service and termination benefits | 2,687 | (695) | 1,992 |
| ___ | ___ | ___ | |
| Balance at 31 December | 2,687 | (695) | 1,992 |
| ___ | ___ | ___ | |
| 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 |
| ___ | ___ | ___ |
Reconciliation of accounting and tax expense for the year:
| 2013 | 2012 | ||
|---|---|---|---|
| Profit before tax | 28,406 ___ |
60,474 ___ |
|
| 70% of entertainment expenses | 162 | 200 | |
| 30 % of the cost of use of private cars | 451 | 419 | |
| Taxable deficits | - | 3 | |
| Fines and penalties | - | 3 | |
| Interest from related-party relationships | 1,032 | 660 | |
| Written-off receivables | 539 | 19 | |
| Provisions | 2,652 | 1,674 | |
| Other taxable revenues | 137 ___ |
77 ___ |
|
| Tax base increasing items | 4,973 ___ |
3,055 ___ |
|
| Dividend income | (26,937) | (27,897) | |
| Subsequent collection of written-off receivables | (2) | (14) | |
| Other non-taxable revenues | (2,201) | (2,234) | |
| Government grants for training and education | (225) ___ |
(246) ___ |
|
| Tax base decreasing items | (29,365) ___ |
(30,391) ___ |
|
| Income tax base before the utilisation of tax losses | 4,014 ___ |
33,138 ___ |
|
| Tax base | 4,014 ___ |
33,138 ___ |
|
| Tax at the weighted average rate | 4,361 | 8,025 | |
| Tax reliefs | (3,607) ___ |
(3,576) ___ |
|
| Current tax liability | 754 ___ |
4,449 ___ |
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 2012 and 2013, having thus met the prerequisites for the utilistation of the tax incentives for 2013.
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.
| 2013 | 2012 | |
|---|---|---|
| Net profit attributable to the Company shareholders | 27,652 | 56,025 |
| Weighted average number of shares | 4,161,822 ___ |
4,159,303 ___ |
| Basic earnings per share (in HRK) | 6,64 ___ |
13,47 ___ |
| Licences | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| Balance at 31 December 2011 | 55 | 3,423 | 117,767 | 121,245 |
| Additions | - | 47 | 35,595 | 35,642 |
| ___ | ____ | ____ | ____ | |
| Balance at 31 December 2012 | 55 | 3,470 | 153,362 | 156,887 |
| ___ | ___ | ___ | ___ | |
| Additions | 4,303 | 84,449 | 88,752 | |
| Disposals and retirements | ____ | ____ | (23,448) ____ |
(23,448) ____ |
| Balance at 31 December 2013 | 55 | 7,773 | 214,363 | 222,191 |
| ____ | ____ | ____ | ____ | |
| Accumulated depreciation | ||||
| 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 |
| ___ | ___ | ___ | ___ | |
| Charge for the year | - | 1,139 | 8,026 | 9,165 |
| Disposals and retirements | - | - | (4,154) | (4,154) |
| ____ | ____ | ____ | ____ | |
| Balance at 31 December 2013 | - | 2,674 | 98,413 | 101,087 |
| ____ | ____ | ____ | ____ | |
| Net book value | ||||
| At 31 December 2013 | 55 | 5,099 | 115,950 | 121,104 |
| ___ | ___ | ___ | ___ | |
| At 31 December 2012 | 55 | 1,935 | 58,821 | 60,811 |
| ___ | ___ | ___ | ___ |
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 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 |
| Additions | 3,660 | 11,977 | 60,255 | 100,294 | - | 176,186 |
| Transfer from assets under development |
- | 624 | 5,836 | (6,460) | - | - |
| Disposals and retirements | - | - | (13,458) | (15,880) | - | (29,338) |
| Balance at 31 December 2013 | 143,636 | 309,742 | 502,607 | 133,704 | 1,549 | 1,091,238 |
| Accumulated depreciation | ||||||
| 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 |
| Charge for the year 2013 | - | 7,418 | 33,787 | - | - | 41,205 |
| Disposals and retirements | - | - | (7,776) | - | - | (7,776) |
| Balance at 31 December 2013 | - | 72,820 | 305,652 | - | 1,549 | 380,021 |
| Net book value | ||||||
| At 31 December 2013 | 143,636 | 236,922 | 196,955 | 133,704 | - | 711,217 |
| At 31 December 2012 | 139,976 | 231,739 | 170,333 | 55,750 | - | 597,798 |
At 31 December 2013, the net book value of tangible assets pledged as collateral with commercial banks amounts to HRK 333,868 ( 31 December 2012: HRK 306.598 thousand, and the balance of short-term and long-term loans secured by those assets is HRK 403.092 thousand (31 December 2012: HRK 266.165).
| Name of associate | Principal activity | Country of Ownership interest in % incorporation and |
Amount of equity investment, HRK'000 |
||||
|---|---|---|---|---|---|---|---|
| business | 2013 | 2012 | 2013 | 2012 | |||
| EURO AUTO PLASTIC SYSTEMS |
Manufacture of other vehicle spare parts and accessories |
Mioveni, Romania | 50.00% | 50.00% | 82,492 | 68,285 | |
| 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% | 18,262 | 17,692 | |
| 101,012 | 86,235 |
| Name of associate | Country of incorporation and business |
Amount of equity investment |
Share in the result for the year 2012 |
Dividends paid | Amount of equity investment |
|---|---|---|---|---|---|
| 31.12.2011 | 31.12.2012 | ||||
| EURO AUTO PLASTIC SYSTEMS |
Mioveni, Rumunjska | 66,778 | 29,399 | (27,892) | 68,285 |
| FAURECIA AD PLASTIK ROMANIA (FAAR) |
Mioveni, Rumunjska | 258 | - | - | 258 |
| FAURECIA ADP HOLDING |
Nanterre, Francuska | 17,298 | 394 | - | 17,692 |
| Total | 84,334 | 29,793 | 27,892 | 86,235 |
| Name of associate | Country of incorporation and business |
Amount of equity investment |
Share in the result for the year 2013 |
Dividends paid | Amount of equity investment |
|---|---|---|---|---|---|
| 31.12.2012 | 31.12.2013 | ||||
| EURO AUTO PLASTIC SYSTEMS |
Mioveni, Romania | 68,285 | 41,137 | (26,930) | 82,492 |
| FAURECIA AD PLASTIK ROMANIA (FAAR) |
Mioveni, Romania | 258 | - | - | 258 |
| FAURECIA ADP HOLDING |
Nanterre, France | 17,692 | 571 | - | 18,262 |
| Total | 86,235 | 41,708 | (26,930) | 101,012 |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Long-term loans to associates | 50,103 | 55,333 |
| Long-term loans to unrelated companies | 14,508 | 17,118 |
| Other financial assets | 64 | 64 |
| Current portion of long-term loan receivables | (10,341) ____ |
(2,408) ____ |
| 54,334 ____ |
70,107 ____ |
Long-term loans to associated companies are given with interest rate of 12.68 to 13.09% (2012: 9.29 to 12.43%), while Long term loans given to third parties with an interest rate of 6.00% (in 2012 : 6.00%).
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Raw material and supplies on stock | 64,277 | 54,085 |
| Finished products | 17,812 | 11,622 |
| Merchandise | 8,198 | 14,768 |
| Work in progress | 3,688 | 2,000 |
| Predujmovi za zalihe | 818 | 1,007 |
| Dugotrajna imovina namijenjena prodaji | - ____ |
503 ____ |
| 94,793 ____ |
83,985 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign trade receivables | 146,164 | 183,598 |
| Domestic trade receivables | 12,635 | 14,420 |
| Impairment allowance on receivables | (10,364) ____ |
(12,022) ____ |
| 148,435 ____ |
185,996 ____ |
The average credit period on sales is 68 days(2012: 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:
| 31.12.2013 | |
|---|---|
| OAO Avtovaz, Russia | 24,012 |
| Visteon Deutschland, Germany | 21,670 |
| Revoz, Slovenia | 5,371 |
| Peugeot Citroen Automobiles, France | 5,695 |
| Renault SAS , France | 2,594 |
| Other debtors | 99,457 ____ |
| 158,799 ____ |
Movements in the impairment allowance on domestic trade receivables were as follows:
| 31/12/2013 | 31.12.2012 | |
|---|---|---|
| Balance at beginning of the year | 10,241 | 10,245 |
| Amounts collected or eliminated during the year | (1,351) ____ |
(4) ____ |
| Total impairment allowance on domestic trade receivables | 8,890 ____ |
10,241 ____ |
| Balance at beginning of the year | 1,781 | 1,795 |
| Amounts collected or eliminated during the year | (307) ____ |
(14) ____ |
| Total impairment allowance on foreign trade receivables | 1,474 ____ |
1,781 ____ |
| Total impairment allowance | 10,364 ____ |
12,022 ____ |
All receivables provided for are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables:
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| 0 - 1096 days | 524 | 622 |
| Over 1096 days | 9,840 ____ |
11,400 ____ |
| 10,364 ____ |
12,022 ____ |
Ageing analysis of receivables past due but not impaired:
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| 1 - 365 days | 9,619 | 9,238 |
| Over 365 days | 1,354 ____ |
1,644 ____ |
| 10,973 ____ |
10,882 ____ |
Receivables from associated companies
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Interest receivable | 7,845 | 16,574 |
| Trade receivables | 4,072 ____ |
3,919 ____ |
| 11,917 ____ |
20,493 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Prepayments made | 39,618 | 36,450 |
| Receivables from the State and state institutions institutions | 15,447 | 35,062 |
| Due from employees | 597 | 988 |
| Other receivables | 6,892 ____ |
5,841 ____ |
| 62,554 ____ |
78,341 __ |
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.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Short-term loans to subsidiaries | 16,794 | 18,547 |
| Current portion of long-term loan receivables | 10,341 | 2,408 |
| Other short-term loans | - | 1,000 |
| Other deposits | 9 ____ |
4 ____ |
| 27,144 ____ |
21,959 __ |
|
| 28. CASH | ||
| 31.12.2013 | 31.12.2012 | |
| Current account balance | 28,492 | 12,560 |
| Deposits with a term of up to 3 months | 451 ____ |
902 ____ |
| 28,943 ____ |
13,462 ____ |
|
Accrued income in the amount of HRK 171.896 thousand (31 December 2012: HRK 95,861 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.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Other accrued income on tools | 171,896 | 95,861 |
| Prepaid operating expenses | 10,004 | 3,517 |
| Other accrued income | 3,003 ____ |
3,117 ____ |
| 184,903 ____ |
102,495 ____ |
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 ( 31 December 2012: 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 2013 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 | 273,462 | 6.51% | Pension fund |
| d.d./RAIFFEISEN | ||||
| MANDATORY PENSION FUND | ||||
| ADP-ESOP d.o.o. | Zagreb, Croatia | 213,098 | 5.07% | Primary account |
| HYPO ALPE-ADRIA-BANK | Zagreb, Croatia | 119,640 | 2.85% | Custody account |
| D.D./PBZ CROATIA | ||||
| OSIGURANJE OBVEZNI | ||||
| MIROVINSKI FOND | ||||
| ERSTE & SEIERMARKISCHE | Zagreb, Hrvatska | 110,349 | 2.63% | Custody account |
| BANK d.d./ZBIRNI SKRBNIČKI | ||||
| RAČUN ZA STRANU PRAVNU | ||||
| OSOBU | ||||
| ERSTE & STEIERMARKISCHE | Zagreb, Croatia | 87,668 | 2.09% | Custody account |
| BANK D.D. / CSC | ||||
| Total: | 2,064,092 | 49.15% |
| Short-term: | Long-term: | |||
|---|---|---|---|---|
| 31 December 2013 |
31 December 2012 |
31 December 2013 |
31 December 2012 |
|
| Jubilee awards (long-service benefits) | - | - | 1,568 | 1,718 |
| Retirement benefits | - | 1,411 | 1,084 | 780 |
| Legal actions | 3,351 | 3,389 | - | - |
| Tax disputes | 1,105 | 347 | - | - |
| Vacation accrual | 2,158 | 2,258 | - | - |
| Bonuses to employees | - | 400 | - | - |
| Other provisions | 967 ____ |
1,072 ____ |
- ____ |
- ____ |
| 7,581 ____ |
8,877 ____ |
2,652 ____ |
2,498 ____ |
| Jubilee awards |
Retirem ents |
Court disputes |
Taxes | Vacation days |
Bonus | Other | Total | |
|---|---|---|---|---|---|---|---|---|
| Balance 1 January | ||||||||
| 2012 | 1,897 | 3,057 | 3,838 | 0 | 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 |
| Increase/(decrease) | ||||||||
| in provision | (150) __ __ |
(1,107) __ __ |
(38) __ __ |
758 _ _ |
(100) __ __ |
(400) __ __ |
(105) _ _ |
(1,142) __ __ |
| Balance 31 | ||||||||
| December 2013 | 1,568 __ __ |
1,084 __ __ |
3,351 __ __ |
1,105 _ __ |
2,158 __ __ |
- __ __ |
967 _ __ |
10,233 __ __ |
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 5,40% and the rate of fluctuation of 4.00 %.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Long-term borrowings | 366,501 | 251,247 |
| Current portion of long-term borrowings | (110,685) ____ |
(49,629) ____ |
| 255,816 | 201,618 | |
| Other non-current liabilities | 226 ____ |
71 ____ |
| 256,042 ____ |
201,689 ____ |
Long-term borrowings comprise HBOR investment loans and long-term loans from commercial banks with interest rate of 5.10%. AD Plastik d.d. Group 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:
| 2013 | 2012 | |
|---|---|---|
| Balance at 1 January | 201,618 | 79,842 |
| New loans raised | 179,677 | 207,330 |
| Amounts repaid | (125,479) ____ |
(85,554) ____ |
| Total long-term borrowings | 255,816 ____ |
201,618 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign customers | 94,575 | 98,240 |
| Domestic customers | 85 ____ |
299 ____ |
| 94,660 ____ |
98,539 ____ |
Advances received from foreign customers represent cash advanced for ordered tools.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign trade payables | 129,442 | 100,865 |
| Domestic trade payables | 26,643 ____ |
22,919 ____ |
| 156,085 ____ |
123,784 ____ |
| 31/12/2013 | 31.12.2012 | |
|---|---|---|
| Short-term borrowings - principal payable | 127,614 | 75,233 |
| Current portion of long-term borrowings | 110,685 | 49,629 |
| Short-term borrowings - interest payable | 1,664 ____ |
1,850 ____ |
| 239,963 ____ |
126,712 ____ |
Short-term borrowings represent revolving facilities provided by commercial banks with an interest rate of 7.86 percent.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Due to the State and State institutions | 11,060 | 10,631 |
| Amounts due to employees | 8,624 | 8,243 |
| Liabilities arising from the share in results | 28 | 374 |
| Other current liabilities | 899 ____ |
6,183 ____ |
| 20,611 ____ |
25,431 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Accrued tool expences | 54,566 | - |
| Due to the State and State institutions | 372 | 481 |
| Other current liabilities | 1,093 ____ |
1,236 ____ |
| 56,031 ____ |
1,717 ____ |
The Company's gearing ratio, expressed as the ratio of net debt to equity, can be expressed as follows:
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Short-term borrowings | 239,963 | 126,712 |
| Long-term borrowings | 255,816 | 201,618 |
| Cash and cash equivalents | 28,943 ____ |
13,462 ____ |
| Net debt | 466,836 ____ |
314,868 ____ |
| Equity | 702,806 | 714,629 |
| Net debt-to-equity ratio | 66,42% | 44,06% |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Financial assets | ||
| Loans and receivables | 378,032 | 407,576 |
| Financial assets at fair value through profit or loss | - | |
| Cash and cash equivalents | 28,943 | 13,462 |
| Financial liabilities | ||
| Trade payables and other | 260,522 | 237,194 |
| Borrowings | 495,779 | 328,330 |
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 | |||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||
| EUR | 139,524 | 96,152 | 401,300 | 377,852 | (261,776) | (281,700) | |
| RUR | 130,594 | 136,036 | 86,361 | 50,893 | 44,233 | 85,143 | |
| USD | 395 | 331 | 107 | 501 | 288 | (170) | |
| GBP | 47 | 57 | 62 | 35 | (15) | 22 | |
| CHF | - | - | - | 21 | - | (21) | |
| RSD | 7,595 | 4,677 | 3,215 | 189 | 4,380 | (4,488 | |
| RON | 2,555 | - | - | 0 | 2,555 | 0 | |
| JPY | - | - | 4 | 0 | (4) | 0 | |
| 280,710 | 237,253 | 491,049 | 429,491 | (210,339) | (192,238) |
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 2013 and 2012 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 | |||
|---|---|---|---|
| 2013 | 2012 | ||
| Change in exchange differences | (39,987) | (42,512) | |
| RUR impact 2013 |
2012 | ||
| Change in exchange differences | 150 | 319 |
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.
| Up to 1 month |
1 to 3 months |
3 months to 1 year |
1 to 5 years |
Over 5 years |
Total | ||
|---|---|---|---|---|---|---|---|
| 2013 | Average interest rate |
||||||
| Assets | |||||||
| Non-interest bearing | 39,540 | 37,110 | 139,250 | 8,585 | 102,758 | 327,243 | |
| Interest bearing | 11.56% | 74 ___ |
2,293 ___ |
25,675 ___ |
61,980 __ |
3,799 __ |
93,821 ___ |
| 39,614 ___ |
39,403 ___ |
164,925 ___ |
70,565 _ |
106,557 _ |
421,064 ___ |
||
| Liabilities | _ | _ | |||||
| Non-interest bearing | 32,829 | 20,034 | 128,991 | 86,941 | - | 268,795 | |
| Interest bearing | 6.48% | 3,780 ___ |
53,819 ___ |
194,428 ___ |
246,193 _ |
27,417 __ |
525,637 ___ |
| 36,609 ___ |
73,853 ___ |
323,419 ___ |
333,134 _ |
27,417 ________ |
794,432 ___ |
||
| 2012 | |||||||
| Assets | |||||||
| Non-interest bearing | 39,840 | 58,179 | 91,095 | 10,344 | 86,235 | 285,693 | |
| Interest bearing | 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 ___ |
||
| Liabilities | _ | _ | |||||
| Non-interest bearing | 42,420 | 23,463 | 84,229 | 92,124 | - | 242,236 | |
| Interest bearing | 4.53% | 3,221 ___ |
24,255 ___ |
130,431 ___ |
204,721 __ |
- __ |
362,628 ___ |
| 45,641 ___ |
47,718 ___ |
214,660 ___ |
296,845 _ |
- _ |
604,864 ___ |
||
| _ | _ |
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 2013, 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 2014.
For AD Plastik d.d. Solin:
Mladen Peroš President of the Management Board
AD Plastik d.d., Solin Unconsolidated financial statements and Independent Auditor's Report For the year ended 31 December 2013
| 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 unconsolidated financial statements are prepared for each financial year in accordance with International Financial Reporting Standards ("the IFRSs"), as adopted by the European Union, 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 unconsolidated 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:
Mladen Peroš,
President of the Management Board
AD Plastik d.d., Solin
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 unconsolidated statement of financial position at 31 December 2013, and related unconsolidated statement of comprehensive income, unconsolidated statement of changes in equity and unconsolidated 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 unconsolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of unconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
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 | 2013 | 2012 | |
|---|---|---|---|
| Sales | 5 | 525,513 | 507,571 |
| Other income | 6 | 18,356 ____ |
8,888 ____ |
| Total income | 543,869 ____ |
516,459 ____ |
|
| Decrease in the value of work in progress and finished products | 2,996 | (1,262) | |
| Cost of raw material and supplies | 7 | (203,004) | (221,728) |
| Cost of goods sold | 8 | (49,053) | (66,366) |
| Service costs | 9 | (32,521) | (37,380) |
| Staff costs | 10 | (102,774) | (99,252) |
| Depreciation and amortisation | 11 | (30,002) | (37,711) |
| Other operating expenses | 12 | (96,804) | (34,019) |
| Provisions for risks and charges | 13 | (5,910) | (1,449) ____ |
| Total operating expenses | ___ (517,072) ____ |
(499,167) ____ |
|
| Profit from operations | 26,797 ____ |
17,292 ____ |
|
| Finance revenue | 14 | 50,333 | 50,877 |
| Finance cost | 15 | (34,700) ____ |
(22,955) ____ |
| Profit from financing activities | 15,633 | 27,922 ____ |
|
| Profit before taxation | _ 42,430 _ |
45,214 ____ |
|
| Income tax expense | 16 | 90 | (447) ____ |
| Profit for the year | _ 42,520 _ |
44,767 ____ |
|
| Other comprehensive income | - | - | |
| Total comprehensive income | 42,520 ____ |
44,767 ____ |
|
| Total comprehensive income per share | 10.22 | 10.76 |
| Notes | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 18 | 58,818 | 38,716 |
| Tangible assets | 19 | 500,585 | 426,153 |
| Investments in subsidiaries and associates | 20 | 142,006 | 139,676 |
| Other financial assets | 21 | 97,892 | 89,230 |
| Deferred tax assets | 16 | 531 ____ |
441 ____ |
| Total non-current assets | 799,832 ____ |
694,216 ____ |
|
| Current assets | |||
| Inventories | 22 | 37,351 | 30,973 |
| Trade receivables | 23 | 211,782 | 183,243 |
| Other receivables | 24 | 48,080 | 57,637 |
| Current financial assets | 25 | 87,908 | 38,633 |
| Cash and cash equivalents | 26 | 14,531 | 7,255 |
| Prepaid expenses and accrued income | 27 | 119,103 ____ |
102,145 ____ |
| Total current assets | 518,755 ____ |
419,886 ____ |
|
| TOTAL ASSETS | 1,318,587 ____ |
1,114,102 ____ |
| Notes | 31.12.2013 | 31.12.2012 | |
|---|---|---|---|
| Equity | |||
| Share capital | 28 | 419,958 | 419,958 |
| Reserves | 156,870 | 154,623 | |
| Retained earnings | 66,535 | 59,461 | |
| Profit for the year | 42,520 ____ |
44,767 ____ |
|
| Total equity | 685,883 ____ |
678,809 ____ |
|
| Long-term provisions | 29 | 2,652 | 2,201 |
| Long-term borrowings | 30 | 204,716 ____ |
110,180 ____ |
| Total non-current liabilities | 207,368 ____ |
112,381 ____ |
|
| Advances received | 31 | 77,518 | 103,843 |
| Trade payables | 32 | 107,695 | 76,351 |
| Short-term borrowings | 33 | 207,325 | 124,975 |
| Other current liabilities | 34 | 8,956 | 8,629 |
| Short-term provisions | 29 | 5,509 | 7,458 |
| Accrued expenses and deferred income | 35 | 18,333 ____ |
1,656 ____ |
| Total current liabilities | 425,336 ____ |
322,912 ____ |
|
| Total liabilities | 632,704 ____ |
435,293 ____ |
|
| TOTAL EQUITY AND LIABILITIES | 1,318,587 ____ |
1,114,102 ____ |
| 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 1 - t ce a ce m r d ta te as re s |
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 Va lua ion f o t o wn |
- | - | - | - | - | ( ) 3 3, 5 6 6 |
( ) 3 3, 5 6 6 |
| S ha res D is i bu ion loy in tr t to s em p ee s |
- | - | - | ( 3 5 1 ) |
3 5 1 |
- | - |
| ha s res |
- | - | - | ( 5 2 4 ) |
5 2 4 |
5 2 4 |
5 2 4 |
| Sa f o le ha o wn s res |
- | - | - | 4, 7 7 3 |
( 4, 7 7 3 ) |
( 4, 7 7 3 ) |
( 4, 7 7 3 ) |
| f fo Pr i he t t o r ea r y |
- | - | - | - | - | 4 4, 7 6 7 |
4 4, 7 6 7 |
| Ba lan 3 De be 2 0 2 t 1 1 ce a ce m r |
9, 9 8 4 1 5 |
9 3, 2 6 1 1 |
6, 2 9 1 |
2 6 4, 7 |
( 2 6 ) 4, 7 |
9, 6 5 4 1 |
6 8, 8 0 9 7 |
| D iv i de ds i d n p a |
- | - | - | - | - | ( 3 3, 6 2 1 ) |
( 3 3, 6 2 1 ) |
| Va lua ion f o ha t o wn s res D is i bu ion loy in tr t to s em p ee s |
- | - | - | 7 8 7 |
( 7 8 7 ) |
- | - |
| ha s res Co ion f w i h ho l d ing ( No t t tax te rre c o |
- | - | - | ( ) 3 1 0 |
3 1 0 |
3 1 0 |
3 1 0 |
| 4. 1. ) |
- | - | - | - | - | ( 2, 1 3 5 ) |
( 2, 1 3 5 ) |
| Pr f i fo he t t o r y ea r |
- | - | - | - | - | 4 2, 5 2 0 |
4 2, 5 2 0 |
| Ba lan 3 1 De be 2 0 1 3 t ce a ce m r |
4 1 9, 9 5 8 |
1 9 3, 2 6 1 |
6, 1 2 9 |
4, 7 5 3 |
( 4, 7 5 3 ) |
6 6, 5 3 5 |
6 8 5, 8 8 3 |
| Cash flows from operating activities | 31.12.2013 | 31.12.2012 |
|---|---|---|
| Profit for the year | 42,520 | 44,767 |
| Adjusted: | ||
| Income tax expense | (90) | 447 |
| Depreciation and amortisation of plant, equipment and intangible assets | 30,002 | 37,711 |
| Net book value of disposed assets | 29,531 | (196) |
| Interest expense | 13,546 | 9,545 |
| Interest income | (14,408) | (13,248) |
| Increase in long-term and short-term provisions | (1,498) ____ |
(3,085) ____ |
| Profit from operations before working capital changes | 99,603 ____ |
75,941 ____ |
| (Increase)/decrease in inventories | (6,378 | 3,989 |
| Increase in trade receivables | (28,539) | (60,290) |
| Decrease in other receivables | 2,064 | 954 |
| Increase/(decrease) in trade payables | 31,344 | (8,369) |
| Decrease in advances received | (26,325) | (5,875) |
| Decrease in other current liabilities | (2,024) | (13,707) |
| Increase (decrease) in accrued expenses and deferred income | 16,677 | (552) |
| Decrease / (increase) in prepaid expenses | (16,958) | 13,958 |
| Interest paid | 13,330 | (9,924) |
| Cash generated (used in)/from operations | 56,134 ____ |
(3,875) ____ |
| Investments in subsidiaries | (2,330) | (12,417) |
| Interest received | 21,901 | 4,355 |
| Purchases of property, plant and equipment, and intangible assets | (154,067) | (40,721) |
| Investments in Funds | - | 2,800 |
| (Repaid)/received short term loans, net | (4,455) | 2,073 |
| (Repaid)/received long term loans, net | (53,482) ____ |
33,159 ____ |
| Cash used in investing activities | (192,433) ____ |
(10,751) ____ |
| Purchase of own shares | - | (4,773) |
| Bonuses to employees | 310 | 524 |
| Dividends paid | (33,621) | (33,566) |
| Proceeds from borrowings | 287,844 | 248,620 |
| Repayment of borrowings | (110,958) | (218,643) |
| Cash in flow from /( used in) financing activities | 143,575 143,575 ____ |
(7,838) ____ |
| Net cash flow for the year | 7,276 ____ |
(22,464) ____ |
| At 1 January | 7,255 | 29,719 |
| Net cash inflow/(outflow) | 7,276 | (22,464) |
| At 31 December | 14,531 ____ |
7,255 ____ |
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 2013, the number of staff employed was 894 ( 31 December 2012: 830).
| Mandate | |||
|---|---|---|---|
| Members of the Supervisory Board: | |||
| Josip Boban (Chairman) | From 19 July 2012 | To 19 July 2016 | |
| Nikola Zovko (Deputy Chairman) | From 19 July 2012 | To 19 July 2016 | |
| Marijo Grgurinović | From July 2011 | To 14 July 2015 | |
| Igor Anatoljevič Solomatin | From 14 July 2011 | To 14 July 2015 | |
| Drandin Dmitrij Leonidovič | From 19 October 2011 | To 19 October 2015 | |
| Nikitina Nadežda Anatoljevna | From 19 October 2011 | To 19 October 2015 | |
| Members of the Management Board: | |||
| Mladen Peroš (President) | From 19 July 2012 | To 19 July 2016 | |
| Ivica Tolić | From 19 July 2012 | To 19 July 2016 | |
| Katija Klepo | From 19 July 2012 | To 19 July 2016 | |
| Denis Fusek | Od 26 September 2013 | Do 19 September 2016 | |
| Hrvoje Jurišić | Od 26 September 2013 | Do 19 September 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 (IFRIC) that are adopted by Europen union are effective for the current period:
The adoption of these amendments to existing standards, revisions and interpretations has not led to any changes in accounting policies.
At the date of authorisation of these financial statements the following standards, amendments to existing standards and interpretations were in issue and adopted in Europen Union, but not yet effective:
Standards and Interpretations issued not yet adopted (continued):
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 that were adopted by Europen Union and Croatian laws.
The preparation of the financial statements in accordance with the Accounting Act of the Republic of Croatia and International Financial Reporting Standards ('IFRSs') that are adopted in Europen Union, requires from management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on the information available as at the date of preparation of the financial statements, and actual results could differ from those estimates.
The financial statements of the Company represent aggregate amounts of assets, liabilities, capital and reserves of the Company as of 31 December 2013, 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 2013 have been issued on 23rd April 2014.
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 2013, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.637643 (31 December 2012: HRK 7.545624 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 2013 | Depreciation rates in 2012 | |
|---|---|---|
| 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.
In these financial statements investments in associates companies are shown 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 2013, 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.
The Company invoiced the entire balance of interest loan receivable from related and subsidiary companies. Based on subsequently received information, it was identified that the interest receivable is subject to withholding tax at the countries of domicile of those companies, and the invoiced interest receivable was reduced by the withholding tax which was recognised as a correction to the retained earnings of the Company.
Given that the correction is not material for the financial statements of the Company, the opening balances were not restated, in accordance with International Accounting Standard 8 'Accounting Policies, Changes in Accounting Estimates and Errors'.
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 2013 | 2012 | |
|---|---|---|
| Foreign sales | 511,523 | 491,971 |
| Domestic sales | 13,990 ____ |
15,600 ____ |
| 525,513 ____ |
507,571 ____ |
| 2013 | 2012 | |
|---|---|---|
| Income from refunds under the tax decision | 4,431 | - |
| Income from reversal of vacation accruals for unused vacation days | 2,258 | 250 |
| Income from sale of Property | 2,098 | 997 |
| Income from bonuses provided by suppliers | 1,534 | 2,392 |
| Income from reversal of provisions for long-service benefits | 1,421 | 711 |
| Income from consumption of own products, goods and services | 1,116 | 1,155 |
| Income from reversal of litigation provision | 1,100 | - |
| Income from reversal of retirement benefit provisions | 780 | - |
| Income from reversal of provisions for bonuses to employees | - | 1,047 |
| Income from damages collected | 118 | 224 |
| Other operating income | 3,500 ____ |
2,112 ____ |
| 18,356 ____ |
8,888 ____ |
| 2013 | 2012 | |
|---|---|---|
| Direct materials | 95,598 | 111,978 |
| Indirect materials | 77,831 | 78,567 |
| Electricity | 10,914 | 11,281 |
| Direct packaging | 8,879 | 8,351 |
| Preventive maintenance of machinery | 1,527 | 1,859 |
| Gas for heating in the production process | 1,413 | 1,631 |
| Other materials | 835 | 1,099 |
| Regular maintenance of machinery | 511 | 643 |
| Other expenses | 5,496 ____ |
6,319 ____ |
| 203,004 ____ |
221,728 ____ |
Cost of goods sold in the amount of HRK 49.053 thousand (2012: HRK 66,366 thousand) relate in major part on purchase cost of tools, equipment and material for start up of new production and projects in subsidaries.
| 2013 | 2012 | |
|---|---|---|
| Re-export costs | 35,909 | 55,194 |
| Cost of direct material sold | 6,113 | 4,384 |
| Cost of merchandise | 5,297 | 4,410 |
| Cost of spare parts sold | 1,298 | 1,213 |
| Other costs of goods sold | 436 ____ |
1,165 ____ |
| 49,053 ____ |
66,366 ____ |
| 2013 | 2012 | |
|---|---|---|
| Transport | 15,973 | 19,545 |
| Rental costs | 5,457 | 5,227 |
| Regular and preventive maintenance costs - machinery | 3,115 | 3,735 |
| Regular and preventive maintenance costs - buildings | 656 | 945 |
| Telecommunications and information systems | 990 | 917 |
| Communal fees | 638 | 867 |
| Water supply | 900 | 862 |
| Forwarding and shipping costs | 339 | 736 |
| Tool modification costs | 503 | 532 |
| Commissions | 111 | 288 |
| Other expenses | 3,839 ____ |
3,726 ____ |
| 32,521 ____ |
37,380 ____ |
| 2013. | 2012. | |
|---|---|---|
| Net wages and salaries | 54,269 | 51,892 |
| Taxes and contributions out of salaries | 22,612 | 21,622 |
| Contributions on salaries | 13,567 | 12,973 |
| Provision for bonuses | - | 11 |
| Other staff costs | 12,326 ____ |
12,754 ____ |
| 102,774 ____ |
99,252 ____ |
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.
| 2013 | 2012 | |
|---|---|---|
| Depreciation | 22,539 | 22,484 |
| Amortisation | 7,463 ____ |
15,227 ____ |
| 30,002 ____ |
37,711 ____ |
| 2013 | 2012 | |
|---|---|---|
| Temporary service costs - tools | 75,092 | 16,822 |
| Professional service cost | 5,739 | 4,484 |
| Net book value of disposed intangible fixed assets | 4,293 | 13 |
| Other non-material costs | 1,895 | 2,344 |
| Communal fees for the use of construction plots | 1,337 | 1,439 |
| Insurance premiums | 1,456 | 1,086 |
| Bank charges | 820 | 1,780 |
| Cost of goods provided free of charge | 622 | 867 |
| Payment operation charges | 822 | 849 |
| Other fees (Supervisory Board) | 268 | 397 |
| Professional training costs | 266 | 289 |
| Entertainment | 233 | 288 |
| Customer complaints | 647 | 225 |
| Translation service costs | 81 | 215 |
| Gifts for employees' children | 218 | 212 |
| Occupational Health and Safety service costs | 115 | 173 |
| Water management fee | 209 | 169 |
| Forest reproduction levies | 149 | 164 |
| Other expenses | 2,542 ____ |
2,216 ____ |
| 96,804 ____ |
34,019 ____ |
| 2013 | 2012 | |
|---|---|---|
| Provisions for retirement benefits and jubilee awards | 2,652 | 1,411 |
| Vacation accruals | 2,158 | - |
| Litigation provisions | 1,100 ____ |
38 ____ |
| 5,910 ____ |
1,449 ____ |
| 2013 | 2012 | |
|---|---|---|
| Dividend income | 26,937 | 27,897 |
| Interest income | 14,408 | 13,248 |
| Foreign exchange gains | 8,988 | 7,188 |
| Other finance revenue | - ____ |
2,544 ____ |
| 50,333 ____ |
50,877 ____ |
| 2013 | 2012 | |
|---|---|---|
| Interest expense | 13,546 | 9,545 |
| Foreign exchange losses | 21,154 | 6,207 |
| Other finance costs | - ____ |
7,203 ____ |
| 34,700 ____ |
22,955 ____ |
Income tax comprises the following:
| 2013 | 2012 | |
|---|---|---|
| Current tax | - | - |
| Deferred tax | (90) ___ |
447 ___ |
| (90) ___ |
447 ___ |
Deferred tax, as presented in the Statement of financial position, is as follows:
| 31/12/2013 | 31/12/2012 | |
|---|---|---|
| Balance at 1 January | 441 | 888 |
| Recognised/ (Reversal) deferred tax assets | 90 ___ |
(447) ___ |
| Balance at 31 December | 531 ___ |
441 ___ |
Deferred tax assets arise from the following:
| 2013 | Opening balance |
Credited / (Charged) to statement of comprehensive income |
Closing balance |
|---|---|---|---|
| Temporary differences: | - | ||
| Provisions for long-service and termination benefits | 441 | 90 | 531 |
| ___ | ___ | ___ | |
| Balance at 31 December | 441 | 90 | 531 |
| ___ | ___ | ___ | |
| 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 |
| ___ | ___ | ___ |
The relationship between the accounting profit and tax losses carried forward can be shown as follows:
| 2013 | 2012 | |
|---|---|---|
| Profit for the year | 42,430 ___ |
45,214 ___ |
| 70% of entertainment expenses | 162 | 200 |
| 30 % of the cost of use of private cars | 451 | 419 |
| Taxable deficits | - | 3 |
| Costs of forced collection of taxes and other levies | - | 3 |
| Interest from related-party relationships | 1,032 | 660 |
| Written-off receivables | 539 | 19 |
| Provisions | 2,652 | 1.674 |
| The increase in profit for other income | 13 ___ |
77 ___ |
| Tax base increasing items (PD Return Form) | 4,972 ___ |
3,055 ___ |
| Dividend income | (26,937) | (27,897) |
| Subsequent collection of written-off receivables | (2) | (14) |
| Other non-taxable revenues | (2,201) | (2,234) |
| Government grants for training and education | (225) ___ |
(246) ___ |
| Tax base decreasing items (PD Return Form) | (29,365) ___ |
(30,391) ___ |
| Income tax base before the utilisation of tax losses brought forward Tax losses brought forward |
18,037 - ___ |
17,878 - ___ |
| Tax base | 18,037 ___ |
17,878 ___ |
| Tax at the rate of 20% | 3,607 | 3,576 |
| Tax reliefs | (3,607) ___ |
(3,576) ___ |
| Current tax liability | - ___ |
- ___ |
The income tax rate effective in the Republic of Croatia for the years 2013 and 2012 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 2013, having thus met the prerequisites for the utilistation of the tax incentives for 2013.
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
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.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Net profit attributable to the Company shareholders | 42,520 | 44,767 |
| Weighted average number of shares | 4,161,822 ___ |
4,159,303 ___ |
| Average weighted earnings per share (in HRK) | 10.22 ___ |
10.76 ___ |
| Licences | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| 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 ___ |
| Additions | 4,303 | 34,248 | 38,551 | |
| Disposals and retirements | ____ | ____ | (15,140) ____ |
(15,140) ____ |
| Balance at 31 December 2013 | 55 ____ |
5,423 ____ |
149,401 ____ |
154,879 ____ |
| Accumulated amortisation | ||||
| Balance at 31 December 2011 | - | 657 | 76,868 | 77,525 |
| Charge for the year | - | 208 | 15,019 | 15,227 |
| Disposals and retirements | - | - | - | - |
| Balance at 31 December 2012 | ___ | 865 ___ |
91,887 ___ |
92,752 ___ |
| Charge for the year | 938 | 6,525 | 7,463 | |
| Disposals and retirements | - | - | (4,154) | (4,154) |
| Balance at 31 December 2013 | ____ | 1,803 ____ |
94,258 ____ |
96,061 ____ |
| Net book value | ||||
| At 31 December 2013 | 55 ___ |
3,620 ___ |
55,143 ___ |
58,818 ___ |
| At 31 December 2012 | 55 ___ |
255 ___ |
38,406 ___ |
38,716 ___ |
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 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 |
| Additions | - | 462 | 13,098 | 101,956 | - | 115,516 |
| Transfer from assets under development |
- | - | - | - | - | - |
| Disposals and retirements | - | - | (10,177) | (15,880) | (647) | (26,704) |
| Balance at 31 December 2013 | 139,976 | 228,348 | 318,708 | 98,670 | 1,915 | 787,617 |
| Accumulated depreciation | ||||||
| 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 |
| Charge for the year | - | 3,418 | 18,889 | - | 232 | 22,539 |
| Disposals and retirements | - | (7,776) | - | (383) | (8,159) | |
| Balance at 31 December 2013 | - | 64,777 | 221,131 | - | 1,124 | 287,032 |
| Net book value | ||||||
| At 31 December 2013 | 139,976 | 163,571 | 97,577 | 98,670 | 791 | 500,585 |
| At 31 December 2012 | 139,976 | 166,527 | 105,769 | 12,594 | 1,287 | 426,153 |
The net book value of land and buildings pledged as collateral with commercial banks in the amount of HRK 303,468 thousand (31 December 2012: HRK 292,292 thousand), and the balance of short-term and long-term borrowings covered by the collateral which amounts to HRK 319,408 thousand (2012: HRK 235,155 thousand).
| Name of subsidiary | Principal activity | Country of incorporation and business |
Ownership interest in % | Amount of equity investment |
||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |||
| 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% | - | 250 |
| ADP d.o.o. | accessories | Mladenovac, Serbia | 100,00% | 100,00% | 15,014 | 12,434 |
| 89,695 | 87,365 |
SG Plastik d.o.o., in liquidation, was liquidated in July 2013.
On 9 January 2013 the Company increased the capital of ADP d.o.o. by HRK 2,580 thousand, by contributing items.
| Name of associate | Country of Ownership interest in % Principal activity incorporation and |
Amount of equity investment |
||||
|---|---|---|---|---|---|---|
| business | 2013 | 2012 | 2013 | 2012 | ||
| 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) FAURECIA ADP |
accessories Manufacture of other vehicle spare parts and |
Mioveni, Romania | 49,00% | 49.00% | 336 | 336 |
| HOLDING | accessories | Nanterre, France | 40,00% | 40.00% | 30.220 | 30.220 |
| 52.311 | 52.311 | |||||
| Total investments in subsidiaries and associates | 142.006 | 139,676 |
Set out below is a summary of financial information about the subsidiaries:
| AD PLASTIK d.o.o., Novo Mesto, Slovenia | 31.12.2013 | 31.12.2012 |
|---|---|---|
| Total assets | 48,323 | 71,261 |
| Total liabilities | 44,901 | 67,958 |
| Net assets | 3,422 ____ |
3,303 ____ |
| Share in the net assets of the associate | 100,00% ____ |
100,00% ____ |
| ZAO PHR, Samara, Russian Federation | 31.12.2013 | 31.12.2012 |
|---|---|---|
| Total assets | 240,991 | 214,513 |
| Total liabilities | 218,628 | 178,093 |
| Net assets | 22,363 ____ |
36,420 ____ |
| Share in the net assets of the associate | 99,95% ____ |
99,95% ____ |
| ZAO AD Plastik Kaluga, Kaluga, Russian Federation | 31.12.2013 | 31.12.2012 |
| Total assets | 173,655 | 84,367 |
| Total liabilities | 151,147 | 46,216 ____ |
| Net assets | 22,508 ____ |
38,151 ____ |
| Share in the net assets of the associate | 100,00% | 100,00% |
The Company has prepared a discounted cash flow for the company AD Plastik OAO Kaluga and it was confirmed that there were no indications of impairment of investment.
| SG PLASTIK d.o.o. in liquidation , Solin, Croatia | 31.12.2013 | 31.12.2012 |
|---|---|---|
| Total assets | - | 515 |
| Total liabilities | - | 5 ____ |
| Net assets | - ____ |
510 ____ |
| Share in the net assets of the associate In July 2013 company SG Plastik Ltd. in liquidation was liquidated. |
- | 100.00% |
| ADP d.o.o, Mladenovac, Serbia | 31.12.2013 | 31.12.2012 |
| Total assets | 78,444 | 64,809 |
| Total liabilities | 64,849 | 51,073 ____ |
| Net assets | 13,595 ____ |
13,736 ____ |
| Share in the net assets of the associate | 100,00% | 100.00% |
__________ __________
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Long-term loans to subsidiaries | 78,039 | 22,508 |
| Long-term loans to associates | 50,103 | 55,333 |
| Long-term loans to unrelated companies | 14,507 | 17,118 |
| Other financial assets | 63 | 64 |
| Current portion of long-term loan receivables | (44,820) ____ |
(5,793) ____ |
| 97,892 ____ |
89,230 ____ |
Long-term loans to subsidiaries and associates comprise long-term investment loans which bear interest at a rate of 6.0% - 13.09% on loans, repayable over five years.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Raw material and supplies on stock | 19,254 | 15,430 |
| Finished products | 11,064 | 8,177 |
| Spare parts | 4,603 | 5,025 |
| Work in progress | 1,854 | 1,745 |
| Small items and packaging | 1 | 3 |
| Merchandise | 575 ____ |
593 ____ |
| 37,351 ____ |
30,973 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign trade receivables | 209,511 | 181,045 |
| Domestic trade receivables | 12,635 | 14,220 |
| Impairment allowance on receivables | (10,364) ____ |
(12,022) ____ |
| 211,782 ____ |
183,243 ____ |
The average credit period on sales is 77 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:
| 31.12.2013 | |
|---|---|
| Visteon Deutschland, Germany | 21,670 |
| Peugeot Citroen Automobiles, Francuska | 5,695 |
| Revoz, Slovenia | 5,371 |
| Hella Saturnus Slovenia | 4,945 |
| Euro Auto Plastic Systems, Romania | 4,072 |
| Webasto, Germany | 2,746 |
| Renault, France | 2,594 |
| Nexe Gradnja, Hrvatska | 2,572 |
| Ford Werke, Njemačka | 1,955 |
| Other debtors | 170,526 ____ |
| 222,146 ____ |
Other debtors in the amount HRK 170,526 thousand relates to receivables from subsidaries in the amount HRK 143,905 thousand which relates to delivered tools, equipment, material and services.
Movements in the impairment allowance on domestic trade receivables were as follows:
| 31.12.2013 | 31.12.2012 |
|---|---|
| 10,241 | 10,245 |
| - | - |
| (1,351) | (4) ____ |
| 8,890 ____ |
10,241 ____ |
| 1,781 | 1,795 |
| - | - |
| (307) ____ |
(14) ____ |
| 1,474 ____ |
1,781 ____ |
| 10,364 ____ |
12,022 ____ |
| ____ |
All receivables provided against are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables:
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| 0 - 1096 days | 524 | 622 |
| Over 1096 days | 9,840 ____ |
11,400 ____ |
| 10,364 ____ |
12,022 ____ |
Ageing analysis of receivables past due but not impaired:
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| 1 - 365 days | 102,174 | 65,346 |
| Over 365 days | 41,482 ____ |
12,430 ____ |
| 143,656 ____ |
77,776 ____ |
In aging structure of due receivables above 365 days in the amount HRK 41,482 thousand majority relates to receivables from companies in which AD Plastik d.d. has majority share and control over collection of receivables; in the amount of HRK 30,128 thousand and control over collection of receivables.
Receivables from related companies
| 31.12.2013 | 31.12.2012 |
|---|---|
| 142,701 | 118,731 |
| 1,204 | - ____ |
| 143,905 | 118,731 ____ |
| _ _ |
Company has transferred part of related party receivables in FY 2013 in long term loan with maturity date of 6 years and interest rate 7%.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign prepayments made | 32,181 | 24,945 |
| Due from the state | 7,362 | 20,300 |
| Domestic prepayments made | 7,437 | 11,505 |
| Amounts due from employees | 537 | 887 |
| Other receivables | 563 ____ |
- ____ |
| 48,080 ____ |
57,637 __ |
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.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Current portion of long-term loan receivables | 44,820 | 5,793 |
| Short-term loans to subsidaries | 26,285 | 13,288 |
| Short-term loans to associates | 16,794 | 18,547 |
| Other short-term loan | - | 1,000 |
| Other deposits | 9 ____ |
5 ____ |
| 87,908 ____ |
38,633 __ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign account balance | 14,346 | 6,268 |
| Current account balance | 164 | 74 |
| Cash in hand | 21 | 11 |
| Deposits with a term of up to 3 months | - ____ |
902 ____ |
| 14,531 ____ |
7,255 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Other accrued income on tools | 108,296 | 95,861 |
| Prepaid operating expenses | 7,804 | 3,167 |
| Other accrued income | 3,003 ____ |
3,117 ____ |
| 119,103 ____ |
102,145 ____ |
Accrued income in the amount of HRK 108,296 thousand (31 December 2012: HRK 95,861 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.
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 (31 December 2012: 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 2013 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 | 273,462 | 6,51% | Pension fund |
| FUND | ||||
| Primary | ||||
| ADP-ESOP d.o.o. | Zagreb, Croatia | 213,098 | 5,07% | account |
| HYPO ALPE-ADRIA-BANK D.D./PBZ | ||||
| CROATIA OSIGURANJE | Zagreb, Croatia | 119,640 | 2,85% | Pension fund |
| MANDATORY PENSION FUND | ||||
| ERSTE & STEIERMARKISCHE BANK | ||||
| d.d./ JOINT CUSTODY ACCOUNT | Zagreb, Croatia | 110,349 | 2,63% | Custody |
| FOR A FOREIGN LEGAL PERSON | account | |||
| ERSTE & STEIERMARKISCHE BANK | Custody | |||
| D.D./CSC | Zagreb, Croatia | 87,668 | 2,09% | account |
| Total: | 2,064,092 | 49,15% |
| Short-term: | Long-term: | |||
|---|---|---|---|---|
| 31 December 2013 |
31 December 2012 |
31 December 2013 |
31 December 2012 |
|
| Jubilee awards (long-service benefits) | - | - | 1,568 | 1,421 |
| Termination benefits | - | 1,411 | 1,084 | 780 |
| Legal actions | 3,351 | 3,389 | - | - |
| Vacation accrual | 2,158 | 2,258 | - | - |
| Bonuses to employees | - ____ |
400 ____ |
- ____ |
- ____ |
| 5,509 ____ |
7,458 ____ |
2,652 ____ |
2,201 ____ |
| Jubilee awards (long service benefits) |
Termination benefits |
Legal actions |
Vacation accrual |
Bonuses | Total | |
|---|---|---|---|---|---|---|
| Balance at 1 January | ||||||
| 2013 | 1,421 | 2,191 | 3,389 | 2,258 | 400 | 9,659 |
| Increase/(decrease) in | ||||||
| provisions | 147 ____ |
(1,107) ____ |
(38) ____ |
(100) ____ |
(400) ____ |
(1,498) ____ |
| Balance at 31 December | ||||||
| 2013 | 1,568 ____ |
1,084 ____ |
3,351 ____ |
2,158 ____ |
- ____ |
8,161 ____ |
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 5.40% and the rate of fluctuation of 4.00%.
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Long-term borrowings | 279,099 ____ |
159,809 ____ |
| 279,099 | 159,809 | |
| Current portion of long-term borrowings | (74,383) ____ |
(49,629) ____ |
| Total long-term borrowings | 204,716 ____ |
110,180 ____ |
Long-term borrowings comprise HBOR investment loans as well as long-term loans from commercial banks with average interest rate of 3.93%. 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:
| 2013 | 2012 | |
|---|---|---|
| Balance at 1 January | 110,180 | 79,842 |
| New loans raised | 179,677 | 174,523 |
| Amounts repaid | (85,141) ____ |
(144,185) ____ |
| Total long-term borrowings | 204,716 ____ |
110,180 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign customers | 77,433 | 103,544 |
| Domestic customers | 85 | 299 _ _ |
| 77,518 | 103,843 _ _ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Foreign trade payables | 81,052 | 53,432 |
| Domestic trade payables | 26,643 ____ |
22,919 ____ |
| 107,695 ____ |
76,351 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Short-term borrowings - principal payable | 130,208 | 71,639 |
| Current portion of long-term borrowings | 74,383 | 49,629 |
| Short-term borrowings - interest payable | 1,664 | 1,794 |
| Other short-term financial liabilities | 1,070 ____ |
1,913 ____ |
| 207,325 ____ |
124,975 ____ |
Short-term loans represent loans provided by commercial banks with the average interest rate of 5.22%.
| 2013 | 2012 | |
|---|---|---|
| Balance at 1 January | 124.975 | 125,336 |
| New loans raised | 108.167 | 74,097 |
| Amounts repaid | (25.817) ____ |
(74,458) ____ |
| Total short term loans | 207.325 ____ |
124,975 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Amounts due to employees | 5,630 | 5,289 |
| Due to the State and State institutions | 3,286 | 3,300 |
| Other current liabilities | 40 ____ |
40 ____ |
| 8,956 ____ |
8,629 ____ |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Accrued tool expenses | 16,909 | - |
| Due to the State and State institutions | 372 | 481 |
| Other current liabilities | 1,052 ____ |
1,175 ____ |
| 18,333 ____ |
1,656 ____ |
The transactions carried out with related companies are summarized below:
| Trade receivables and payables | Receivables | Liabilities | ||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |
| AD PLASTIK d.o.o. , Slovenia | 13,444 | 23,845 | 41 | 83 |
| ZAO PHR, Russia | 91,380 | 73,070 | 4,933 | 206 |
| ZAO ADP KALUGA , Russia | 37,870 | 17,847 | 1,440 | - |
| ADP d.o.o., Serbia | 1,211 ____ |
3,969 _ _ ____ |
799 | - |
| 143,905 ____ |
118,731 _ _ ____ |
7,213 | 289 | |
| Trading transactions | ||||
| Income | Expenses | |||
| Operating income and expenses | 2013 | 2012 | 2013 | 2012 |
| AD PLASTIK d.o.o. , Slovenia | 103,750 | 145,475 | 799 | - |
| ZAO PHR, Russia | 63,395 | 73,892 | 11,843 | 9,252 |
| ZAO ADP KALUGA , Russia | 32,935 | 18,078 | 2,317 | 121 |
| ADP d.o.o. Serbia | 6,478 ____ |
3,961 _ _ ____ |
985 | 1,598 |
| 206,558 ____ |
241,406 _ _ ____ |
15,944 | 10,971 |
| Income | Expenses | |||
|---|---|---|---|---|
| Financial income and expenses | 2013 | 2012 | 2013 | 2012 |
| ZAO PHR, Russia | 2,743 | 3,151 | 96 | 121 |
| ZAO ADP KALUGA , Russia | 2,732 | 742 | 3,984 | 1,034 |
| AD PLASTIK d.o.o. , Slovenia | 441 | 407 | 940 | 670 |
| ADP d.o.o. Serbia | 698 ____ |
37 ____ |
55 ____ |
- ____ |
| 6,614 ____ |
4,337 ____ |
5,075 ____ |
1,825 ____ |
|
| Directors' and executives' remuneration | 31.12.2013 | 31.12.2012 | ||
| Salaries | 10,457 ____ |
9,844 ____ |
|---|---|---|
| 10,457 ____ |
9,844 ____ |
The Company's gearing ratio, expressed as the ratio of net debt to equity, can be expressed as follows:
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Short-term borrowings | 207,325 | 124,975 |
| Long-term borrowings | 204,716 | 110,810 |
| Cash and cash equivalents | (14,531) ____ |
(7,255) ____ |
| Net debt | 397,510 ____ |
228,530 ____ |
| Equity | 685,883 | 678,809 |
| Net debt-to-equity ratio | 57.96% | 33.67% |
| 31.12.2013 | 31.12.2012 | |
|---|---|---|
| Financial assets | 594,838 | 495,374 |
| Investments in subsidiaries and associates | 142,006 | 139,676 |
| Loans | 97,893 | 89,230 |
| Trade receivables | 211,782 | 183,243 |
| Other receivables | 128,626 | 75,970 |
| Financial assets at fair value through profit or loss (statement of comprehensive | - | - |
| income) | ||
| Cash | 14,531 | 7,255 |
| Financial liabilities | 602,924 | 420,677 |
| Loans | 412,041 | 235,155 |
| Trade payables | 190,883 | 185,522 |
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 | ||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| 307,319 | 225,472 | 337,426 | 294,467 | (30,107) | (68,995) | |
| 117,304 | 96,388 | 1 | 3,387 | 117,303 | 93,001 | |
| 395 | 331 | 410 | 501 | (15) | (170) | |
| 47 | 57 | 62 | 35 | (15) | 22 | |
| - | - | - | 21 | - | (21) | |
| 2,555 | - | - | - | 2,555 | - | |
| - | - | 4 | - | (4) | - | |
| 427,620 | 322,248 | 337,903 | 298,411 | 89,717 | ___ 23,837 __ |
|
| ___ | ___ | ___ _ _ __ |
___ | _ _ ____ |
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 2013 and 2012 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 | ||
|---|---|---|
| 2013 | 2012 | |
| Change in exchange differences | (660) | (1,405) |
| RUR impact | ||
| 2013 | 2012 | |
| Change in exchange differences | 2,346 | 2 |
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 | ||
|---|---|---|---|---|---|---|---|
| 2013 | Average interest rate |
||||||
| Assets | |||||||
| Non-interest | |||||||
| bearing | 25,580 | 35,910 | 206,126 | - | 142,006 | 409,622 | |
| Interest bearing | 8,98% | 74 | 8,806 | 65,361 | 148,979 | 19,233 | 242,453 |
| 25,654 ___ |
44,716 ___ |
271,487 ___ |
148,979 __ |
161,239 __ |
652,076 ___ |
||
| Liabilities | _ | _ | |||||
| Non-interest | |||||||
| bearing | 23,616 | 15,965 | 79,363 | 71,268 | - | 190,212 | |
| Interest bearing | 4,53% | 3,602 ___ |
47,892 ___ |
165,128 ___ |
185,269 __ |
40,828 __ |
442,719 ___ |
| ___ | ___ | ___ | ________ |
________ |
632,931 ___ |
||
| 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 ___ |
||
| _ | _ |
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 2013, 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 2014.
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 28/05/2014. year brings
About acceptance of the Annual financial statements of AD PLASTIK Inc. and consolidated annual financial statements of the Group AD PLASTIK for 2013. Year
| I. | Acceptance of the Annual Report of AD PLASTIK Inc. for 2013. year as follows: | |
|---|---|---|
| 1. Balance with the sum of assets and liabilities of | kn 1,318,586,716 | |
| 2. Second Profit and loss data: | ||
| -Total revenues | kn 594,202,102 | |
| - Total expenditure | kn 551,772,580 | |
| - Profit before taxation of | kn 42,429,522 | |
| - Income tax | kn -90,202 |
|
| - Profit for the year | kn 42,519,724 | |
| 3. Statement of Cash Flows for 2013. year | ||
| with data on the Net decrease in cash and | ||
| cash equivalents of | kn 8,177,458 | |
| 4. Notes to Financial Statements | ||
| II. | Acceptance of the Consolidated Financial Statements of Group AD PLASTIK for 2013. year as follows: | |
| 1. Balance with the sum of assets and liabilities of | kn 1,536,431,037 | |
| 2. Profit and loss data: | ||
| - Total revenues of | kn 904,886,798 | |
| - Total expenditure | kn 876,480,595 | |
| - Profit before taxation of | kn 28,406,203 | |
| - Income tax | kn 754,102 | |
| - Profit for the year | kn 27,652,101 | |
| - Minority interest income | kn -7,867 | |
| - Net income Group | kn 27,660,899 | |
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 24.07.2014. brings:
Net income of AD Plastik, Solin from year 2013., after tax, is 42,519,724 kuna and is being used on following:
1. Dividend payout 33,342,576 kn
2. Other reserves 9,177,148 kn
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 and accounting 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]
DENIS FUSEK, Board Member responisble for business organization, informatics and controlling Matoševa 8, 21210 Solin, Croatia Phone +385 21 20 64 88, Fax. + 385 21 20 64 89 e-mail: [email protected]
HRVOJE JURIŠIĆ, Board Member responisble for development 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]
Annual report of Group AD Plastik
EURO APS s.r.l. 115400 Mioveni, Judetul Arges, Strada Uzinei 2A, ROMANIA Phone +40 755 016 858 e-mail: [email protected]
ZAO ADP Kaluga, Skladskaya 6, Kaluzhskaya oblast Kaluga RUSSIAN FEDERATION Phone + 7 1372 218 10 Mob. +385 91 200 99 17 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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