Annual Report • Apr 29, 2016
Annual Report
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1,025,395
Operating income (in thsd. of HRK)
46,222
Net profit (in thsd. of HRK)
11.20%
EBITDA margin
114,879 EBITDA (in thsd. of HRK)
409,010
Net financial debt
4.51%
• one of the leading companies for the development and production of automotive components in Eastern Europe
Brazil Czech Republic France Germany Italy Mexico Poland Romania Russia Serbia Slovakia Slovenia Spain Turkey United Kingdom United States
Argentina
Uzbekistan
B
C
Strategy
Markets and customers
Sustainability
Quality management
A
In 2015 we've made a significant turnaround in managing AD Plastik and achieved good operating results which confirmed the validity of our chosen direction. We will continue to implement the changes we had started during the last year with a goal to increase competitiveness, efficiency and profitability, and in order to meet the challenges of a very demanding automotive industry market.
Despite a complex and challenging situation in Russia we have increased operating revenues of AD Plastik Group by 14% compared to the same period in 2014, while operating expenses of the Group have increased by only 9%. This increased profitability resulted in the EBITDA margin of 11.2%, which in 2014 amounted to 5.88%. Cash flow optimisation measures have resulted in the reduction of the Company's debt level by 69.4 million kuna and in improved liquidity of our Company.
AD Plastik Group is a multinational company with more than thirty years of experience in the automotive industry, with a vision of becoming the market leader in the manufacture of automobile components in Eastern Europe and expanding our business to new markets. I am sure our knowledge, experience and quality will make this vision a reality. We are continuously improving the development process and quality of our products, in accordance with our designated market requirements, and to the satisfaction of all our stakeholders.
We use various manufacturing technologies and materials such as injection moulding, painting, blow moulding, thermoforming, production of non-woven textiles and extrusion. Our Company manufactures parts for 90 types of vehicles, with some of our most important customers with whom we developed a successful cooperation being: Renault, Nissan, Peugeot, Citroen, Toyota, Ford, Opel, VW, BMW, Dacia, Daimler, VAZ, GM-VAZ, Daewoo, Fiat-Chrysler, Mitsubishi, Alfa Romeo, Maserati and others. We are the largest manufacturer of automobile parts in Croatia and we export 100% of our products. Overall, we employ more than 2,100 workers, with over 1,200 workers just in Croatia.
Automotive industry has undergone many changes in its history, and is still changing today so it could adapt to an increasingly demanding market. That is why AD Plastik is investing significant resources in research and development, which is the foundation for the future of the automotive industry. We have over one hundred engineers in this segment to ensure all innovations and trends are followed and to keep us one step ahead of our competitors. Today we are seeing an increase in use of natural or part-natural recyclable materials, with the automotive industry's imperative shift to creating lighter cars and thus reducing fuel consumption and emissions. This especially applies to electric vehicles which are increasingly present on the automotive market. For example, using lightweight materials with good acoustic characteristics is extremely important for hybrid
"Despite market challenges and a difficult economic environment, we achieved revenue of over one billion kuna which proved the correctness of our chosen business model."
A
vehicles. Our speciality components made from materials with significantly better sound-insulating properties than normal car parts are being installed in the electric Smart car. The automotive industry is increasingly replacing metal with plastic, which is one opportunity we as a Company must seize.
To be an active participant in the automotive supply chain, one of the main preconditions is to meet extremely high quality, environmental protection and sustainable business standards. Sustainable business is a key component of operational and development policy of our Company.
Every day we are improving internal communication within the Company and systematically work on educating our employees because investing in our employees and their expertise is one of the basic requirements for market survival. We consider the Company's reward system as extremely important in order to ensure that everyone's hard work and dedication is properly recognized and reinforced, and that is why we introduced a new system for rewarding our employees late last year.
One of the highest priorities in our business is building partnerships with our customers, which means involving them in all stages of project creation - from the initial development to mass production and sales. AD Plastik Group won several new nominations in the previous year for which additional information is available in this report, and our plans for this year also foresee further growth.
Our strategy is to improve and expand the automotive industry program and become a developmental supplier of strategic technologies and products, as well as achieving greater results and growing organically and through Group acquisitions. Further expansion in existing and new markets, diversification of customers, continued investment in research and development with the aim of developing new technologies and manufacturing products of high added value and further increase in the quality of products - these are our key objectives. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 7STRATEGIC REPORT
Our shares are listed on the regulated Zagreb Stock Exchange market, so we as a Company are committed to continuous risk management and fulfilling our financial obligations.
The main objective for 2016 is attaining further growth of sales revenue, increasing the EBITDA margin to 12% and continued reduction of loan liabilities according to our business plan for 2016. In order to improve profitability and to achieve planned business results for 2016, our key objectives are growth in existing markets, improving efficiency and strengthening our financial stability, as well as opening new business markets and increasing share value to the satisfaction of our shareholders.
Changes we are planning to implement are significant, but with our clear vision they will undoubtedly be successful. This is evident from our past business results, and we are sure to have many successful years ahead of us. AD Plastik is a quality and reliable partner, which is exactly what we plan to further develop in the future.
Marinko Došen President of the Management Board
"AD Plastik employees are our greatest asset, and their knowledge, experience and skills are responsible for survival and success of the Company. Therefore, we find it extremely important that every individual understands the direction we are taking and how we plan to achieve desired objectives."
"We would like to be recognized as the company that keeps its word when it comes to achieving results and to be recognized as a transparent, responsible and promising company on the capital market."
Founding of Jugoplastika - original predecessor of AD Plastik, considered the leader of economic growth through its community involvement and operations at that time. The majority of production was focused on consumer products, but the Company readily reacted, accepted market challenges and started production of plastic car components. Separated plants used new technologies and operated in accordance with revised development perspectives, which eventually caused the migration of the car component production plant from Split to Solin.
During turbulent war times, AD Plastik, as it is known today, successfully separated from Jugoplastika and continued operations under the name Autodijelovi. It was a challenging period in which finding new solutions and possibilities became a necessity. Privatization was also initiated that same year, and the Company officially changed its name to AD Plastik in 1994 and is still operating under that name today.
A successful partnership with the Revoz plant in Slovenia enabled AD Plastik to cooperate with Renault, one of the largest car manufacturers in Europe. To maintain competitiveness and further develop a successful cooperation with Revoz, AD Plastik changed its business strategy and opened a plant in Zagreb which is still active today on two locations. At the same time, AD Plastik founded a company in Russia, based in Samara, and purchased its first plant in Vintai.
Based on Renault's decision on the takeover, modernization and development of the Dacia production line in Pitesti and the expected sales growth of OEM, AD Plastik opened a production site in Romania, which is considered one of the more important strategic decisions in Company's development. The Company was founded as a Joint Venture (JV) with the Portuguese Simoldes Plasticos, which sold 50% of its share to the French Faurecia in 2007. Today, EuroAPS produces almost all interior and exterior vehicle components for Romanian car models and exports products for Renault to other countries where the Renault Group produces similar vehicles.
AD Plastik, together with Faurecia, established a second Joint Venture company in Luga, Russia, under the name FADP. This move strengthened its position in the Russian market. It coincided with the entry of many of the world's biggest car manufacturers to the Russian market, such as Renault, Peugeot, Ford, Nissan and others, most of which initially and naturally turned to AD Plastik as the producer of parts for new models of their vehicles.
Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 9STRATEGIC REPORT New companies and production facilities were established in Serbia and Russia, in accordance with business plans and strategic objectives of AD Plastik. ADP Mladenovac was established in order to achieve a successful cooperation with FIAT, whose plant is located in Kragujevac. The Mladenovac plant is particularly important because it enabled the production of non-woven textiles as raw material for wallpaper thermoforming. The Company's contracted works with Renault, Nissan, Peugeot and Mitsubishi Groups facilitated the opening of its third plant in Kaluga, Russia.
Opening of the newest and most modernly equipped, automated and robotised painting line in Jankomir, Zagreb, with a key role in the Edison project regarding the exterior products for Renault Twingo and Smart vehicles. Technologically advanced equipment installed in the new painting line has greatly contributed to increasing the environmental standards at AD Plastik, which is an important element of the socially responsible management strategy of the Company.
A
AD Plastik Group is a multinational company with more than thirty years of experience in the automotive industry, and eight production sites in four countries. We are the leading company in the development and manufacture of interior and exterior car components in Croatia and one of the leading companies in Eastern Europe.
In addition to the two Croatian plants in Zagreb and Solin, where the Company has its headquarters, AD Plastik Group has plants in Serbia, Russia and Romania. Overall, we employ more than 2,100 workers, with over 1,200 workers just in Croatia.
Thirty years of history saw us grow, develop and overcome a variety of challenges, and gave us the specific maturity that we have today. Looking at our own past enables us to thread safely in the present, because today we can be proud of our continuous business operations based on tradition, knowledge, capacities, exceptional expertise and commitment of every employee. We cooperate with our customers from the early development stages to the finished product, using modern tools and techniques and applying specific professional know-how, skills and experience.
Long-term survival in the demanding automotive industry serves as confirmation of the quality of our business, primarily due to high-quality employees and incessant investments in the development and improvement of technology. Focusing on customer needs, while maintaining high quality and competitiveness of products and services, is a prerequisite for the survival and development of any company.
30
years of experience in the automotive industry
2,100
employees
To be the market leader in the development and production of automotive components in Eastern Europe and to expand our business into new markets.
By creating innovative and creative solutions and constantly improving research and product development, we want to contribute to the quality of the final product and the success of our customers. We meet our objectives by applying the principles of corporate social responsibility and business ethics to the satisfaction and benefit of all our stakeholders - employees, business partners, customers, and our shareholders.
countries
4
8
production sites
Relationships with all of our stakeholders are based on trust, open and honest communication.
Continuous long-term partnerships with all our stakeholders are based on mutual respect.
We strive to meet the highest quality standards across all business segments, including products, work methods or competences of employees performing it.
We use our own ideas and creativity on a daily basis to improve and develop the Company and each segment within it, keeping up with developments and trends in the world market.
The responsibility is ours and is an important prerequisite for Company's development, growth and performance. We express it every day through our relations with each individual, work, partners, stakeholders and our actions aimed at society, nature and the community in which we operate.
Loyalty, productivity and satisfaction highlight the commitment we are trying to encourage together with a conscious business approach. We want our employees to identify with the Company and its values.
We encourage mutual cooperation on all levels and teamwork that is essential for the development and growth of the Company, but also of every individual. Sharing ideas and knowledge, multiculturalism, mutual respect and solidarity are key ideas of our developing togetherness.
AD Plastik Group's strategy involves the expansion and improvement of our automotive industry programmes and becoming a Tier 1 supplier of strategic technologies and products. Creating and managing commercial relations with suppliers and subcontractors to ensure competitive prices of materials, tools, equipment and services is one of our key strategic objectives, as well as achieving greater results organically and through Group acquisitions.
In doing so, we want to diversify customers and markets and improve developmental recognition. Creating conditions for stimulating growth and development through optimal management of human resources to the satisfaction of our employees and all other stakeholders is absolutely necessary. We plan to achieve strategic objectives by continuously increasing production sites efficiency and strengthening our financial stability and optimising the balance sheet structure, while ensuring the maximum return on investment for our investors.
Ultimately, AD Plastik Group's long-term strategy is to improve the satisfaction of shareholders by increasing the share value and paying attractive dividends.
• Kolín
• Cuautitlán
• Kragujevac
• Bursa
• Ellesmere Port
• Detroit
• Asaka
TOYOTA
OPEL
KAMAZ
GM
DAEWOO
RENAULT
UAZ
MITSUBISHI
DAIMLER
JEEP
NISSAN
SMART
VOLKSWAGEN
| ADP Kaluga Kaluga, Russia | |
|---|---|
| • employees 213 • facility area 8 524 m2 |
• employees.................................. 413 • facility area ..................... 24 136 m2
| AD PlastikZagreb II, Croatia | |
|---|---|
| ------------------------------ | -- |
• employees.................................. 152 • facility area .......................7 336 m2
JV
| AD Plastik | |
|---|---|
A
Injection moulding is a technology in which the molten thermoplastic material is injected under pressure into a mould, i.e., pre-made injection moulding tools.
Injection moulding has the following advantages: high productivity, mass production and automation possibilities, minimal additional operations and material loss, precision manufacturing, possibility of injecting on other materials and using various fillers to change material properties. Quality design of tools and products, proper selection of materials and corresponding parameters of the injection process are basic prerequisites for creating a quality product.
| • | Solin, Croatia 40 IMMs50 - 2,300 t |
|
|---|---|---|
| • | Zagreb I, Croatia 11 IMMs 400 - 3,200 t |
|
| • | Zagreb II, Croatia 9 IMMs800 - 2,000 t |
|
| • | Vintai, Russia 9 IMMs400 - 1,600 t |
|
| • | Kaluga, Russia 8 IMMs 100 - 2,700 t |
• 2 IMMs........................................420 t
The process of painting plastic products is done in a totally automated and robotised painting line in Zagreb. Most common products processed using this technology include vehicle bumpers, front covers and fenders. Painting plastic components can be technologically divided into several sections: preparing products for painting which includes cleaning and flame cleaning, painting products with primer, transparent base paint and varnish, drying, control, additional processing and storage, and later on assembly and packaging for delivery to the customer.
• 1 automated painting line
Zagreb I, Croatia
Sites
A
Non-woven textile is a flexible flat product which is fixed mechanically, by needle-punching or with bonding agents. Most commonly used fibres in the production of wallpaper have a fineness of 6 to 17 dtex.
Non-woven textile technology is used at our Vintai, Samara site in Russia and the Mladenovac site in Serbia.
Vintai, Russia
• 1 non-woven textile line
Mladenovac, Serbia
• 3 non-woven textile lines
Thermoforming technology is based on permanent forming of materials at specific temperatures and under specific pressure.
There are two types of the thermoforming process: moulding in a hot or cold tool.
Sites
Vintai, Russia
• 2 headliner production lines 2 carpet production lines 2 trunk shelf production lines 4 water jets
Kaluga, Russia
• 1 headliner production line 1 carpet production line 1 sun visor production line 1 water jet
Mladenovac, Serbia
• 1 headliner production line 1 water jet
A
Extrusion is a manufacturing method which involves continuous processing of plastic materials. This procedure softens starting materials which are then plasticized, homogenised and finally formed into the desired shape or profile. Most commonly used materials in the extrusion process are polypropylene, thermoplastic elastomers, polymers, plastomers, duromers, and elastomers.
Solin, Croatia
A
Extrusion blow moulding can be used to produce a variety of shapes of various dimensions.
Most commonly used materials in the blow moulding process are polyethylene and polypropylene, but polyamide, thermoplastic elastomer (TPE) and thermoplastic vulcanisates (TPV) can also be used.
High density polyethylene (HDPE) is used for the production of air ducts.
Site
Mladenovac, Serbia
• 3 blowers
| Injection moulding |
Painting | Non-woven textile |
Thermoform ing |
Extrusion | Blow moulding |
|
|---|---|---|---|---|---|---|
| Solin Croatia |
40 IMMs 50 - 2,300 t |
4 lines (TPE) 4 IMM (vertical) |
||||
| Zagreb I Croatia |
11 IMMs 400 - 3,200 t |
1 automatic painting line |
||||
| Zagreb II Croatia |
9 IMMs 800 - 2,000 t |
|||||
| Vintai Russia |
9 IMMs 400 - 1,600 t |
1 non-wo ven textile line |
2 headliner lines 2 carpet lines 2 parcel shelf lines 4 water jets |
6 TPE lines 12 IMM (vertical) |
||
| Kaluga Russia |
8 IMMs 100 - 2,700 t |
1 headliners lines 1 carpets line 1 sun visors line 1 water jet |
||||
| Mladenovac Serbia |
2 IMMs 420 t |
3 non-wo ven textile lines |
1 headliners line 1 water jet |
3 blow moulding machine |
Front Fender Protector
A
Logistics is in direct contact with customers on a daily basis and is among the first to learn about their needs and satisfaction levels - information which logistics shares with others within the Company.
Internal logistics is part of the organizational structure of working units in all locations and manages customer orders, logistics flows in specific plants, inventories, production planning and customer deliveries.
Central logistics services are:
Central logistics is primarily tasked with coordinating Internal Logistics, standardising logistics processes and procedures among working units and subsidiaries. It supports Internal logistics in the management of service quality, transportation costs and materials inventory. Central logistics manages the optimisation of logistic flows, packaging in all projects and packaging optimisation in all plants. It manages, supervises and approves EDI communication with all customers for all sites and subsidiaries, orders all materials for the Parent Company and some materials for its subsidiaries.
"I am pleased to have been given the opportunity to collaborate with a broad range of ex-perts and develop my knowledge and skills. The dynamic atmosphere, work challenges and good teamwork have all contributed to my personal and professional development through-out the past two years. I am extremely motivated and happily accept each new challenge."
Goran Bašić Logistics Technician Central logistics
Research and development importance and activities 28
Research and development has a very special role in the automotive industry due to the dynamic market that is constantly seeking advanced products. Car manufacturers can gain an advantage over their competitors, and thus increase sales and profits, by using advance products. The market is continuously introduced to companies that offer new and advanced products and it is extremely important to follow trends and offer customers products that are similar or better. Research and development activities performed by the Company have to be at least as good and intense as those of its competition to ensure growth in the automotive industry market.
In accordance with the stated market requirements, our Company has invested significant resources in research and development, bearing in mind that such activities are the foundation for future growth. The result of our continuous investment in research and development is the fact that today AD Plastik is a reliable and stable partner for nearly all global automobile manufacturers.
The Company has invested in research and development almost 4% of total revenue in 2015, which highlights the importance of said area in the organization. Research and development department of AD Plastik Group employs more than 100 engineers with modern systems and tools at their disposal.
of total revenue invested in Research and development 4%
100
engineers
Computer software is one of the basic research and development tools used for product analysis and creating new solutions. Online databases are an important source of information on innovations and market trends, and our engineers can access global services that provide detailed and reliable information on all products that are installed in cars throughout the world.
Constructors use several different 3D design software solutions, most important of which is CATIA. Numerical analysis software tools are used for simulating product behaviour.
Developing new products is a lengthy process, and in some cases can last several years. Several products are generally developed at the same time and they often do not have a lot of common elements. Monitoring projects and making progress on individual product development stages is an extremely complex process which is why a software solution Enovia is used for its management.
Digitalization of existing products is also considered a standard research and development practice in the automotive industry which is why our engineers use a 3D scanner to scan different models of existing or new products, transfer the images to a digital format and analyse them further using a computer.
A
Catia
NX9 Teamcenter GOM Inspect Moldflow
Enovia PDM/PLM Abaqus/CAE
Automotive industry has undergone many changes in its history, and is still changing today so it could adapt to an increasingly demanding market. Research and development has also changed accordingly by adjusting the organisational structure, cooperation models, activity management, equipment and tools, etc. AD Plastik Group monitors trends in the automotive industry and applies them regularly in its organization.
In 2015, the Company formed an independent organisational unit called Product and Process Research whose employees are engaged in creating new products that are offered to customers as prototypes. These products are in market demand and have to meet certain statutory or quality standards.
Reducing vehicle weight
Low emissions Emissions are a global problem and all major industrial countries adopted specific rules on the limitation of emissions. A large proportion of emissions are combustion products from car engines and that is why the automotive industry is characterised as a major atmosphere polluter. Therefore, the automotive industry is the biggest advocate of zero emissions in its efforts to change said public perception. Cars manufactured in recent years have low emission levels, with the trend quickly gravitating toward zero emissions. Ultimately, our roads will mostly be populated with electric vehicles or fuel cell drive vehicles that will not release harmful gases into the atmosphere.
Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 31STRATEGIC REPORT In order to attain the desired objective it is necessary to reduce the weight of future cars, so even today the priority is set on so-called lightweight materials. Car constructors have been given the priority task of reducing the weight of vehicles, and to improve performance at the same time. Vehicle weight is reduced by decreasing the mass on each component, but it is much more difficult to influence the weight reduction of dynamically loaded components such as engine parts and the chassis. Therefore, a compromise has to be made using specific interior and exterior components where the designers can choose lighter materials to compensate for heavier engines. This is even more noticeable with electric vehicles which use a very heavy set of batteries.
AD Plastik Group is ready to meet new market demands by researching new and lighter materials and developing lighter components. We already offer components made from lightweight materials such as non-woven textile components for interiors and exteriors. Non-woven textiles and respective components are continuously being researched by our engineers since making progress in this segment is one of our major set objectives. We are following all current automotive trends regarding the development of these materials and can offer innovative solutions to our customers.
Special importance in reducing the weight of vehicles is given to components made of composite sandwich panels. Application of these materials in car production has been observed only recently, although they have been used in the production of special vehicles for quite some time. These materials are already being installed in some of the most advanced mass-produced vehicles such as the BMW i8. They are increasingly being used by other vehicle manufacturers, indicating that composite sandwich panels will become a very important material in the future automotive industry. Our experts research these materials for the purpose of manufacturing interior car components, as well as exterior components in the near future. Foam and multilayer materials have great potential for reducing the mass of existing products. Our Company is constantly improving its products with new production techniques and new processes.
There is a growing demand for components with excellent acoustic characteristics to prevent unwanted loudness and noise when using hybrid vehicles, which are sold in ever increasing quantities, in their electronic drive mode. AD Plastik has been installing components in some electric vehicles like the Smart car which have significantly better sound-insulating properties than standard components. Our engineers are investigating the impact materials have on acoustic properties which also includes foam materials with excellent acoustic characteristics for manufacturing car roofs.
Non-woven textiles have excellent insulating properties, as do the sandwich panels made from foam materials for interior roofs that we currently manufacture for the electric Smart car.
"New ideas and creativity combined with experience and knowledge drive career development within the ADP Group, which is extremely important to every young employee. We can con-tribute to the progress and development of the company in the demanding automotive industry market, but primarily contribute to our personal development which is extremely motivating."
Coordinator of Product and Process Research Research and Development In the near future, every car part that ended its life span should be usable as raw material for future production. This will greatly impact environmental protection efforts. Therefore, it is extremely important to substitute existing materials with new recyclable materials, especially natural materials. AD Plastik has recognised the processing of natural "green" materials as an important business element. Many car parts are currently manufactured using a certain percentage of natural materials, which reduces the environmental impact due to the possibility of re-using such materials.
Research and development provides an advantage in a demanding and dynamic auto-mobile market and therefore AD Plastik prioritizes it. Car manufacturers are no longer able to focus their research and development activities on individual car parts, but rather focus on core activities and leave research and development of specific components to suppliers.
Our development guideline is to offer a product to the customers that will provide them with an advantage over the competition through research and development. Such business policies guarantee success and longevity of our company.
The automotive industry in which we operate has very large demands for quality, adherence to high standards of environmental protection and operational sustainability. This is just one of many basic preconditions for participating in the supply chain of leading global car manufacturers.
The Company's headquarters is located in the ecologically sensitive and culturally-historically significant area, which makes our responsibility for the natural and business environments even more pronounced. Continuous responsibility and awareness of the environmental protection and occupational health and safety are the foundation of AD Plastik Group's business policy.
Awareness that our Company has of sustainability is reflected in our commitment to establish the Environmental Management System according to ISO 14001, which we have implemented in some production sites more than 10 years ago.
ADP Mladenovac is the third AD Plastik Group site which has been certified in accordance with OHSAS 18001 - Occupational Health and Safety Management. Mladenovac site obtained the OHSAS 18001 certification in 2015.
The application of these international standards enables us to design business management policies and set objectives while taking into account legal and other binding requirements.
ISO 14001
OHSAS 18001
We regularly monitor and measure environmental impact of all our production sites, and also regularly monitor and supervise health and safety of all our employees. Our plants had not suffered any significant spills of hazardous substances that could have significant negative impacts on the environment, with possible adverse effects on soil, water, air, biodiversity and health. A systematic effort for avoiding accidents is directly linked to internal regulations and operating instructions, and supervision of their implementation is regularly monitored.
Basic raw materials used in manufacturing processes include granulated polypropylene, polyethylene, paints, varnishes and organic solvents. All products have confirmed quality and attributes and are safe, and healthy to use.
Special attention and care is given to proper and useful product labels and ensuring the availability of all necessary information regarding proper handling and use. Disposal of products after the end of the exploitation period is done in accordance with legal provisions. The Group complies with all other regulations and standards related to products. We are aided by our many years of experience, knowledge and skills we have acquired.
Since most of our products are made from plastic materials, we pay special attention to improving the recyclability of plastic vehicle components at the end of their life cycle in full co-operation with our customers. Car manufacturers have developed recycling indicators for vendors that enable life cycle assessments and integration of recycling possibilities from the design stage, customer negotiations, measuring progress and improvements to environmentally friendly design. All our products meet such requirements set by our customers.
Monitoring and measuring environmental impact
Declared quality
Health and safety of end users is considered an integral part of our activities, so each of our products must pass special tests carried out by car manufacturers to ensure that all car components are completely safe for the end customer.
We use direct and indirect energy for powering our production facilities. Consumption of direct energy in the AD Plastik Group means the consumption of gas and fuel oil for heating, diesel fuel for power generators and fuel for motor vehicles from the Group's fleet. Consumption of indirect energy means the consumption of electrical and thermal energy for central heating.
Data on direct and indirect energy consumption varies and is directly related to the production volume. A number of initiatives have been undertaken within the Company in order to use energy more effectively and were proved to be effective in reducing consumption. Undertaken initiatives included turning of lighting and work equipment when leaving workspaces, fitting cooling stations, installation of systems for monitoring peak power and energy consumption, installation of equipment for audio and video conferencing, installing new energy-efficient production equipment, performing energy audits of buildings, replacing diesel forklifts with gas forklifts, dismissing old and procuring new official vehicles with better CO2 emission factors.
Water is provided by the public water supply system and, to a lesser extent, from own sources located at the AD Plastik Zagreb site. Water for technological processes in closed recirculation systems is used for cooling machines/tools, and for water curtains and air humidification when applying paints and varnishes. Reduced water consumption in 2015 is the result of many years of employee training on rational use and quick responses in cases of water supply accidents and failures.
Waste water is divided into domestic waste water, industrial waste water and storm water. Industrial waste water is drained through settling tanks and fat and oil separators into the internal drainage system, while the waste water from paint shops is not drained (recirculation). Waste water drains through the sewer into the public sewerage system and to the urban water purifier, and water drained from the AD Plastik Group plants has no negative impact on biodiversity and associated habitats and is not drained into protected areas.
A
We do not emit substances that deplete the ozone layer from our production processes, and there were no refrigerant emissions from equipment owned by AD Plastik Group in 2015. Direct emissions of greenhouse and other gases due to the consumption of heating energy are measured regularly. We also regularly measure emissions of volatile organic compounds at the discharge outlet of the manufacturing plant paint shop. All air emissions are in accordance with the air protection regulations.
The Group acts responsibly with regard to its business process waste, in full accordance with the law, by-laws and internal procedures. Separate waste collection and proper disposal is an integral part of daily waste management activities of the Company.
Waste is classified and collected in separate containers at the place of origin and is submitted for further disposal to authorised waste collectors. Records are kept on waste disposal in accordance with statutory documents. Weight data on waste delivered for disposal were obtained by weighing during delivery to authorised collectors and used for reporting to competent state authorities.
Creating conditions for stimulating growth and development through optimal management of human resources to the satisfaction of our employees and all other stakeholders is absolutely necessary.
AD Plastik Group employs a total of 2,134 persons, of which 1,203 are employed in Croatia, 186 in Serbia, 742 in Russia and 3 in Slovenia. The largest share of AD Plastik Group employees are in Croatia, most of which are between the ages of 30 and 35, which refers to both women and men.
Trends regarding the number of AD Plastik Group employees represent an indicator of adapting business operations to changes in the Russian market, thus despite increased results we observed a slight drop in the number of employees in the previous period.
Educational structure Given the fact that we are manufacturers of car components, the largest proportion of our employees are direct workers, which affects the educational structure of employees.
| 1, 2, 322% | |
|---|---|
| 4, 5, 6 62% | |
| 7, 8 16% |
The proportion of women in managerial structures varies; there are 30% of women in top management, but the biggest percentage of women is employed in line management with 45%.
A
The goal of this programme is to enable each new employee (either from external or internal sources) to become operational as soon as possible and to gain a better understanding of his role and contribution to the Company's success. In 2015, we launched 120 integration processes just in Croatia.
Series of activities related to employee evaluation with regard to quality and quantity of work were undertaken in 2015. All results were integrated with development plans of individuals, groups and teams. Among these, the following two evaluation models were highlighted:
Employee evaluation (except direct workers) was conducted at the Zagreb production site for the purpose of determining the competency status of workers, identifying talents and defining development plans.
Evaluation of work performance
Evaluation using the 360° method
In the last quarter of 2015 we began to implement a new model of rewarding employees with excellent work results related to main activities of specific departments/sectors in the observed period. During the first round 82 employees were rewarded and a number of additional activities were implemented with regard to their promotion.
AD5 - reward model
The distribution of invested time according to specific knowledge greatly depends on type of activity. What everyone has in common, regardless of the type of activity, is a concern for the health and safety of employees. During 2015, we increased investments in specific customer requirements by 265%, in management skills by 219%, while investments in existing technologies increased by 119%.
For the third year in a row we continue with successful mentoring practices in which experienced and highly competent individuals (mentors) share their expert and managerial skills with highly educated employees who are already working for the Company. Based on the estimated developmental potential, the Company guides their careers and prepares them for more demanding and responsible positions. Thus, the Company uses own employees to ensure competent and motivated professionals and managers for its future development.
In collaboration with mentors we have raised the level of professional competence in 2015 by approx. 60% in key business areas such as technology and operational functions, research and development and commercial operations.
Internal coaches are just like mentors, the leverage of employee development to ensure competitive advantage of AD Plastik in the market. During the year a number of interesting educations are being organized and they are all published once a year in the Catalogue of internal training placed on the Intranet site of the company. Internal coaches are hired from different locations of the Group.
Internal training
Mentoring
Continuing education developing competences A
Regular annual work climate survey has shown that AD Plastik employees are most satisfied with competences of their immediate superiors and colleagues, indicating that the Company has high-quality and competent employees. Necessary actions were initiated in cooperation with management to further increase employee satisfaction, taking into account the needs of employees and the Company.
Satisfaction rating 2004 - 2015
"I'm just happy I got the chance to work in a company where every day is meaningful for my personal and professional development and motivates me to cope with all future challenges."
Ivna Juranić Employment Coordinator Human Resources
AD Plastik is open to summer traineeships that students are required to complete as part of educational programmes. In 2015, 17 students and pupils attended practice in different departments of the Company. Our goal is to take a structured approach to student practice implementation as an excellent source of evaluation and the opportunity to recruit excellent students. Students who receive excellent evaluations by AD Plastik practice leaders are entered into the ADP talent database.
Our experts are often also mentors in preparing seminar and graduation papers so in 2015 a total of seven students prepared their thesis in Solin.
In order to be recognised as a desirable employer for career development, AD Plastik is regularly present at Career days and continues to have good cooperation with universities in the year 2015. In addition to organising regular visits by student organizations, we formalised our cooperation by signing the contract with the Faculty of Electrical Engineering, Mechanical Engineering and Naval Architecture in Split (FESB) and Faculty of Chemical Technology at Split University.
As one of the largest regional employers we are aware of the unemployment problem, support the activities of the Croatian Employment Service and actively participate in Job fairs.
AD Plastik will further implement a series of activities in 2016 aimed at strengthening the commitment of employees and their involvement in the culture and strategy of the Company.
A
With the aim of fully integrating sustainability into our business we created the first Annual Sustainability Report in 2015 in accordance with the Global Reporting Initiative (GRI).
During the regular assessment performed by EcoVadis, agency employed by Renault to conduct the assessment, the Sustainable Business Report of AD Plastik Group has shown significant improvement in the last year, with the biggest progress reported in the environmental protection field.
| Indeks DOP | ||
|---|---|---|
| United Nations Global Compact | ||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP |
A
ISO certificates Quality control Audits
| ISO TS 16949:2009 valid till |
ISO 14001:2004 valid till |
OHSAS 18001:2007 valid till |
|
|---|---|---|---|
| Solin, Croatia | 20. May 2016. | 1. July 2016. | 9. October 2017. |
| Zagreb, Croatia | 22. May 2016. | 1. July 2016. | 9. October 2017. |
| Samara, Russia | 1. April 2017. | 18. October 2017. | |
| Kaluga, Russia | 9. December 2016. | ||
| Mladenovac, Serbia | 1. September 2018. | 15. June 2018. | 20. December 2018. |
| Incoming quality control AD Plastik conducts incoming quality control of raw materials before the start of production, and evaluates suppliers once a year. This includes monitoring supplier performance (accuracy of delivery and quality of supplied materials), based on which supplier audits will be carried out in order to raise the quality of our processes. Suppliers of raw materials also deliver a certificate which guarantees quality, and periodic labo ratory testing (of raw materials) or dimensional measurements are carried out which internally confirm the quality of incoming materials. |
Quality control | ||
| Product quality control | |||
| To ensure that every product meets high quality standards and customer requirements, quali ty control is implemented from the start in all required processes and provides a management system. Its role is particularly important in the preparation of necessary work documentation, harmonization and improvement of processes, conducting audits and resolving complaints. To ensure production quality management system, AD Plastik regularly audits processes and |
|||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP |
products to determine whether they meet set customer criteria and inspects the validity of measuring equipment, i.e., measuring method which guarantees the accuracy of data (MSA). Process audits are planned and implemented on the basis of risk assessment or customer requests, while product audits are conducted annually for each product.
Quality control takes part in the auditing process performed by external customers and certification companies in a way that animates teams within the Company and submits corrective actions according to possible incompatibilities established during the audits.
In the case of comments or official complaints made by the customer, quality control contacts the customer and presents him with an overview of undertaken activities via the portals. It internally manages the group tasked with analysing the com-
plaint, determining its causes and reasons for non-disclosure, and prepares an activity plan based on its findings. Such plan must guarantee that the error will not happen again by applying the methodology prescribed by automotive industry standards.
Quality control department is responsible for creating and updating necessary manufacturing documentation that provides clear criteria for specific quality of products so that workers would get a clear understanding what is a proper (OK), and what is a defective (NOK) product.
In the case of new projects or problem escalation, quality control implements a temporary QW (Quality wall - products are 100% inspected before delivery), analyses results and manages the team that will define corrective measures for guaranteeing the quality of products without the 100% inspection.
Quality control department prepares and sends monthly reports on the PPM results, number of complaints and all indicators on the basis of which we evaluate customers and such reports are then used to continuously introduce changes in order to improve and enhance overall quality. Quality control department created a new plant layout in 2015, performed standardization of jobs and conducted weekly workshops with production workers. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 53STRATEGIC REPORT
"Working in a multinational environment enabled my personal growth and I consider time spent in Russia as an intrinsic part of what I am today. The work that I do today is demanding and requires great commitment, however, everyday dynamic and working in multidisciplinary teams makes this job interesting and motivating."
Ivana Filipović Head of Quality Control Plant Zagreb
A
An audit is a systematic, independent and documented process for obtaining evidence and gaining a fair overview of the quality system in accordance with system norms, customer requirements and internal regulations.
Product audits are used to determine if the product meets all quality requirements for delivery, such as dimensions, functionality, packaging and labelling in accordance with the control plan. An annual internal product audit plan is created for products manufactured in series. The plan is updated during the year in accordance with the condition of the product (changes in the process, possibly dismissal of products, complaints, scrap, tools, ma-chines, people, etc.) Product audit results are recorded on the Product Audit form.
Internal quality system audits
External quality system audits
Internal process audits
External process audits
European market 56 Russian market 57 A
By analysing results achieved by the automotive industry companies in the European market we can conclude that market is currently stabilising, which is visible in the growth of sales results in all countries for the first time after 6 years. The EU has experienced a strong increase in registrations of new passenger cars in 2015 by as much as 9% - biggest jump in 25 years. Most of this growth can be attributed to Spain (+21%) and Italy (+15%) where new vehicle registrations are still well below the numbers seen in the years before the crisis. France, Germany and Great Britain markets are also growing, but at a much lower rate. Registration numbers are expected to grow by approx. 4% in 2016 and 2017. When observing the number of vehicle registrations per 1,000 inhabitants, we can see a great potential for increased demand for new cars in Eastern Europe.
Record automotive industry revenue was achieved by Germany, who is an absolute leader in this market with 64% of stated revenue coming from exports.
Market stabilization
9%
Increased number of new vehicle registrations
VW Group manufactured 3 million vehicles to become the European market leader with a constant growth in all markets in Europe.
PSA gained a 9% increase of its business, but analysts have announced even better results in the coming period based on the popularity of certain Peugeot and Citroen models. This is supported by PSA's investment in additional capacity at Sochaux and Mulhouse plants.
The RSA Group recorded a highest increase of all major OEMs in Europe by 9.2%. Market growth was also influenced by the affiliated company Dacia with an increase of 22.4% and raising its standard of quality and quantity thanks to cooperation with Nissan.
Ford recorded a growth of 7.4% and an even stronger continuation of this positive trend is expected.
FCA Group increased its business by 6%, primarily based on cooperation with Chrysler (Jeep) and the successful launch of the new Jeep Renegade and 500X in the currently most attractive segment - mini SUV.
Car sales in Russia decreased by 50% in three years with the declining sales trend continuing into 2015. Oil prices, GDP, devaluation of the ruble and loss of purchasing power are all causes of declining automotive market and it is expected that the Russian economy will remain in recession during the following year.
All key OEMs in Russia recorded a drop in sales and Renault also recorded a decrease of approx. 40%, while, for example, GM closed two plants in Russia.
Business operations in 2015 Supplier relations Five-year plan
Foreign market
Billion HRK
1
AD Plastik sells the entire production assortment to our customers, OEMs and Tier 1 manufacturers in the automotive industry on the international market. Croatian and Serbian exports are largely related to the EU market, with some exports going to overseas countries. Russian companies from the AD Plastik Group sell their production assortment exclusively on the market of the Russian Federation.
For the first time in its history, AD Plastik Group has sold products in the excess of one billion kuna. Such production volumes secure our place among the major business partners in the automotive component manufacturers market and our position on the list of recognised suppliers when dealing with new or potential customers.
Revenue growth is all the more significant when considering further decline of the Russian automotive market in 2015. EU and Serbian markets achieved increased sales, while the Russian market continued to decline, although significantly slower than in 2014.
The Edison Project had the greatest impact on increased production in the past year, and is certainly a confirmation of AD Plastik abilities and a good platform for the realization of new business opportunities in the future.
During 2015 we began to mass produce new projects under the Renault, PSA and Ford programmes.
The following pages contain a list of our customers.
Revenues, EBITDA
Europe + Serbia list of customers is sorted alphabetically
| FCA | ||
|---|---|---|
| Currently in production: Technologies: Sales market: Nominations won in 2015: |
air ducts, grabhandles, vehicle underbody protection blow moulding and injection moulding Serbia, Italy, Poland air ducts for the Alfa Romeo Giulia air ducts and interior components for the Maserati Levante grabhandles for the North and South America markets |
|
| Ford | ||
| Currently in production: Technologies: Sales market: Nominations won in 2015: |
wheel arch liners, protection under the engine, headliner spoiler components injection moulding Spain, Germany, Romania, Russia wheel arch liners, rear wheel deflectors and B column panels for the new Fiesta wheel arch liners for the S-Max Vignale fifth door water drainage conduits for the S-Max |
STRATEGIC REPORT B |
| Grupo Antolin | ||
| Currently in production: Technologies: Sales market: |
door panels injection moulding, UV welding Slovenia |
CORPORATE GOVERNANCE |
| Hella | ||
| Currently in production: Technologies: Sales market: |
headlamp housings injection moulding, assembly Slovenia |
C |
| PSA | ||
| Products: Technologies: Sales market: |
grabhandles, glass guides, speaker carrier and screens injection moulding and extrusion France, Spain, Czech Republic, Slovakia, Argentina, Brazil, China, Russia |
FINANCIAL STATEMENTS |
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 61 |
| Reydel | |
|---|---|
| Currently in production: Technologies: Sales market: |
instrument panel, steering wheel trim, console knob and handbrake injection moulding, UV welding Slovenia, France |
| RSA | |
| Currently in production: | painted exteriors, injection moulded components, motor fans, headliner coverings, painted and unpainted decorative trims, all exterior spare parts |
| Technologies: | injection moulding, painting, thermoforming headliner (assembly) |
| Sales market: | Slovenia, France, France |
| Nominations won in 2015: | painted decorative trims for limited series vehicles painted decorative trims for vehicle doors |
| VW | |
| Currently in production: Technologies: Sales market: Nominations won in 2015: |
scrapers extrusion Germany Wind shield scrapers for the Touareg |
| Webasto | |
| Currently in production: Technologies: Sales market: |
headliners trims, sunroof parts injection moulding and painting Germany, Slovakia |
| Dacia | ||
|---|---|---|
| Currently in production: Technologies: |
sunvisors and headliner injection moulding, thermoforming |
|
| Sales market: | Romania | |
| Nominations won in 2015: | headliner for the new Duster • vehicle manufacturing sites: |
Romania, Colombia |
Russia list of customers is sorted alphabetically
| AvtoVAZ | ||
|---|---|---|
| Currently in production: Technologies: Sales market: |
headliner, carpet, moulded interior and exterior positions, static seals, air ducts thermoforming, moulding and extrusion Russia |
STRATEGIC REPORT B |
| Ford | ||
| Nominations won in 2015: | headliner for Ford Transit • vehicle manufacturing sites: Russia |
CORPORATE GOVERNANCE |
| GM-VAZ | ||
| Currently in production: Technologies: Sales market: |
headliner, static seals thermoforming and extrusion Russia |
C |
| Nissan | ||
| Currently in production: Technologies: Sales market: |
moulded exterior positions injection moulding Russia |
FINANCIAL STATEMENTS |
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 63 |
| PCMA (Peugeot Citroen Mitsubishi Automotive) | |
|---|---|
| Currently in production: Technologies: Sales market: |
moulded exterior positions injection moulding Russia |
| Renault | |
| Currently in production: Technologies: Sales market: |
headliner, carpets, moulded interior and exterior positions, cargo space shelves thermoforming, injection moulding Russia |
| VAZ | |
| Nominations won in 2015: | grille and speaker carrier for the Logan/Sandero/Duster • vehicle manufacturing sites: Russia |
Due to specificities of automotive industry, and in order to even be considered a part of supply chain, certain standards must be maintained. Just as we need to meet standards set by our customers, our suppliers must also meet required standards that include, for example, the selection of material and equipment suppliers, the selection of service providers and so forth, notwithstanding standards applied during the process of development, primarily in mass production. During selection, suppliers must meet the minimum requirements that relate to the existence and maintenance of due quality management systems governed by ISO 9001 standard, as well as comply with provisions on environmental protection and corporate social responsibility.
The evaluation of suppliers according to criteria related to quality, environmental protection and compliance with the provisions on corporate social responsibility management systems is carried out twice a year. The evaluation of other criteria related to the quality of service providers (criteria for quality and delivery of material) and compliance with automotive industry standards is carried out once a month.
"I received great support and encouragement from not only my superior, but my colleagues with whom I work every day. As a matter of fact, they taught me that the positive outcome of each task depends on responsible approach and, often, open communication between colleagues. I had the opportunity to work with top experts from various fields who have helped me to mature professionally from the first day as an AD Plastik employee."
Mario Barunica Production Technologist Plant Zagreb
Market analysis indicates the need for an increased specialization in developmental technologies, while OEM trends regarding development identify opportunities for expanding into new markets. In the next five-year period, AD Plastik Group plans to achieve the proposed targeted organic growth of at least 6% and further improve due business profitability. Organic growth refers to existing sites and customers, amidst no significant recovery of the Russian market compared to 2015. The current developmental technologies, quality, competitiveness and previous experience of AD Plastik in the development and industrialization of automotive industry production all make strong arguments for achieving these goals.
During 2015 AD Plastik Group began the implementation of 23 new projects whose production will begin on all sites it operates in 2016 or later. These new projects are the result of the quality and competitiveness of services, as well as partnerships formed with our customers. They guarantee the achievement of planned growth and are aimed at existing programmes including Renault, Ford, PSA, VW and new customers Alfa Romeo and Maserati. Attracting new customers was the result of specialization in strategic products and proposed new solutions that increased competitiveness of these products and at the same time made AD Plastik Group a global supplier operating even in remote areas.
Stabilising the business in 2015 created conditions for further expansion and growth of the Group, as well as for financing of potential acquisitions. AD Plastik Group will during 2016 define the development of new markets, with a goal to become the sole or majority owner of potential acquisitions.
One of key goals for period 2016 - 2020 will be a further reduction of Company's indebtedness and due optimization of balance sheet structure. We plan to realize the financing of new acquisitions by combining our own funds with bank borrowings in the ratio of 50-50.
Business risks 68 Financial risks 69 Risk management 70 A
Business activities of AD Plastik Group are, in addition to production located in Croatia, Serbia, the Russian Federation and Romania, based on the export of products to foreign customers, organised on a global level. Political stability at both global and regional level, as well as the stability of countries in which we operate, therefore represent an important factor in our business stability and directly influence Company's results.
Macroeconomic trends on Croatian and Russian market, along with the exchange rate and the price of goods and services in particular, directly affect Company's competitiveness on the global market where we place our products and where we obtain raw materials and intermediate goods. Due to strong presence of Company's product placement on foreign markets, major changes in macroeconomics of countries where production takes place (increasing interest rates, the growth of the exchange rate of the HRK against EUR and RUR, increasing energy prices, the growth of tax burden and the like) could negatively reflect on business performance and the ability to regularly meet obligations.
Business environment risks include political, macroeconomic and social risks on all markets where the Group operates with a direct impact on the business that the Company cannot affect while acting individually.
Political risk refers to all risks associated with a possible political instability in a certain country. Since AD Plastik Group operates in different countries, it has the ability to diversify such risks, what nonetheless largely depends on the type of risk in countries where individual companies operate. Macroeconomic risks affect business activities of every Company, although the strength of such influence primarily depends on the cyclicality of the industry in which the Company operates.
AD Plastik Group operates in a relatively diverse business environment. Since the sale of Group's product range is affected by such macroeconomic variables as private consumption, levels of disposable personal income and trends in the trade of vehicles, the Company must continuously monitor the aforementioned macroeconomic factors. We pay special attention to unfavourable macroeconomic trends on the Russian market.
The production of automotive parts demands a high level of products' quality, and accuracy in keeping delivery deadlines and ordered quantities. Supplier's failure to meet contractual obligations may cause disturbances in the fulfilment of individual company obligations that can result in the loss of customers, and therefore exert negative impact on operating results. A special business focus and responsibility are thus paid to the accuracy in the fulfilment of contractual obligations to customers.
Macroeconomic trends
Risk diversification
A
Interest rate risk Interest rate risk is the risk implying that the value of a financial instrument will fluctu-
ate 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 implies that the interest cost of an instrument will fluctuate over time.
Group's exposure to interest rate risk is low, as it holds no financial instruments at variable rates.
The Group is exposed to credit risk through loans (trade receivables). Since loans are granted to subsidiaries, due credit risk is under the control of the Company. Trade receivables are corrected for the amount of net allowance for bad and doubtful accounts.
Five largest customers of the Group include:
It is the policy of the Group to transact with financially sound companies where there is minimised risk of collection.
Activities performed by the Company and the Group expose them to various financial risks.
Such risks consist of market risks, which include:
Although neither the Company nor the Group implement a formal risk management programme, the AD Plastik Finance Department manages the overall risk management.
Finance Department provides services for various Group activities, coordinates access to domestic and international financial markets, monitors financial risks related to business, and manages such risks through internal reports on risks that analyse the exposure by the degree and magnitude of certain risk. The Company strives to reduce effects of these risks to a minimum.
The obligation to repay borrowings used by the Group, stipulated by contracts that contain a currency clause, is dependent on the trend of the exchange rate of the HRK against EUR or the exchange rate of RUR against EUR, and trends in interest rates.
Negative aspects of exchange rates related to borrowings are compensated by the fact that we generate the majority of our revenue in one currency (EUR, Russian companies in RUR).
The largest markets on which the Group provides its services and sells its products comprise of the EU market and the market of the Russian Federation.
Group's management determines the prices of its services for each foreign market separately.
Since the Group undertakes certain transactions denominated in foreign currencies, it is exposed to exchange rate fluctuations. The Group is primarily exposed to exchange rate fluctuations of EUR and RUR. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the end of a period.
Foreign sales on the EU market were mainly realised in the euro currency. Sales on the Russian market were realised in the rouble. Most long-term and short-term loans were stipulated by contracts that contain a currency clause, that is they are linked to the euro. Besides euro, the Company is also exposed to the exchange of currencies RUR and RSD.
Ultimate responsibility for liquidity risk management bears 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.
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to meet all obligations. The Group aims to maintain flexibility in funding by keeping the committed credit lines available.
Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 71STRATEGIC REPORT Cash flow forecasting is performed at the operating segment level and is considered for aggregation at the Group level. The Group continuously monitors liquidity to ensure sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities. Such forecasting takes into consideration Group's debt financing plans, covenant compliance and compliance with internal balance sheet ratio targets.
A
Overview of the 10 largest shareholders as of 31 December 2015
Information on the share ADPL-R-A Stock exchange trading calendar Investor relations
Ownership structure
The equity capital of AD Plastik d.d. amounts to HRK 419,958,400, and it is divided in 4,199,584 shares of the nominal value of HRK 100.00. The shareholders are legal and natural persons from the Republic of Croatia that realise their interests through General Assembly and the Supervisory Board in accordance with the legislation of the Republic of Croatia.
The Company has no majority shareholder, the largest shareholder is the Open Joint Stock Company "Holding Autokomponenti" from St. Petersburg, Russia, which owns 1,259,875 shares representing a 30% share of the equity capital of the Company. There were no significant changes in the ownership structure in 2015.
| Owner/account holder | Balance | % |
|---|---|---|
| OAO HOLDING AUTOKOMPONENTI | 1,259,875 | 30.00 |
| HYPO ALPE-ADRIA-BANK d.d. / RAIFFEISEN OMF - B CATEGORY |
269,462 | 6.42 |
| ADP-ESOP d.o.o. | 212,776 | 5.07 |
| HYPO ALPE-ADRIA-BANK d.d. / PBZ CO OMF - B CATEGORY |
119,640 | 2.85 |
| HRVATSKA POŠTANSKA BANKA d.d. / KAPITALNI FOND d.d. |
116,541 | 2.78 |
| SOCIETE GENERALE - SPLITSKA BANKA d.d. / ERSTE PL OMF - B CATEGORY |
115,353 | 2.75 |
| PBZ D.D. | 111,366 | 2.65 |
| ERSTE & STEIERMARKISCHE BANK D.D. | 105,349 | 2.51 |
| SOCIETE GENERALE - SPLITSKA BANKA d.d. / AZ OMF - B CATEGORY |
93,900 | 2.24 |
| ZAGREBAČKA BANKA d.d. | 86,777 | 2.07 |
| TOTAL | 2,491,039 | 59.34 |
No dividend was paid in 2015.
Movement of average daily stock price for ADPL-R-A and Crobex from 1 January 2015 to 31 December 2015
| Month | Date | Financial statements | Supervisory Board and General Assembly |
|---|---|---|---|
| 1 | 28. 01. 2016. | Meeting of the Supervisory Board |
|
| No later than 15. 02. 2016. | Unaudited financial statements of AD Plastik Group for 2015 |
||
| 2 | 22. 02. 2016. | Meeting of the Supervisory Board |
|
| No later than 29. 04. 2016. | Audited and consolidated financial statements of AD Plastik Group for 2015 |
||
| 4 | No later than 29. 04. 2016. | Corporate Governance Code Annual Questionnaire for the company AD Plastik D.d. for 2015 |
|
| No later than 29. 04. 2016. | Management Interim Report of the AD Plastik Group for the first quarter of 2016 |
||
| 5 | 24. i 25. 05. 2016. | Meeting of the Supervisory Board |
|
| 14. 07. 2016. | General Assembly 2016 | ||
| 7 | 14. 07. 2016. | Meeting of the Supervisory Board |
|
| No later than 29. 07. 2016. | Management Interim Report of the AD Plastik Group for the second quarter of 2016 |
||
| 10 | No later than 28. 10. 2016. | Management Interim Report of the AD Plastik Group for the third quarter of 2016 |
|
| 11 | 24. 11. 2016. | Meeting of the Supervisory Board |
All financial statements are published on the website www.zse.hr and www.adplastik.hr.
AD Plastik considers transparency and quality of business reporting through regular and timely disclosures of requested information the basis for maintaining a high level of communication with domestic and foreign investors, as well as with existing and potential investors. The high quality of financial and business communication is an important segment of our Group that consists of taking into account the attitude of the investment community towards companies that show only the highest level of transparency in relation to investors.
AD Plastik continuously strives to further enhance relations with existing and potential investors, while respecting due regulatory requirements. Investor relations policies are based on timely disclosure and communication of truthful, clear and complete information, especially those related to financial results, goals, strategies and development of AD Plastik Group. One of the communication tools that we use, which represents a confirmation of our clear and open communication strategy with the investor public, is the Investor day, which is organised every September in order to provide answers to all questions of interested investors.
AD Plastik shares are listed on the Official Market of the Zagreb Stock Exchange under the stock ticker ADPL-R-A. In March 2012 we have signed the Agreement on Market Making with Erste Bank, and in May 2013 with Interkapital vrijednosni papiri.
Investors day
Erste bank
Interkapital
A
B
Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 81STRATEGIC REPORT
The structure of AD Plastik corporate governance is based on a dual system, which consists of the Management Board and the Supervisory Board. Management and Supervisory Board together with the General Assembly form the three fundamental Company bodies in accordance with Company Statute and Companies Act.
Shareholders that partake in the business of joint stock companies can exercise their rights at the General Assembly. A regular General Assembly held on 23 July 2015 had, according to the Companies Act and the Company Statute, adopted the following decisions:
AD Plastik Supervisory Board consists of seven members.
In accordance with the General Assembly Decision of 23 July 2015, the AD Plastik Supervisory Board re-elected Mario Grgurinović and Igor Solomatin Anatoljevič for a term of four years, with due mandate starting on 23 July 2015.
According to the Companies Act, Works Council has on the meeting held on 2 June 2015 appointed Dolores Čerina as its representative to the Supervisory Board, for a term of four years, with due mandate starting on 2 June 2015.
According to the Company Statute, Open joint stock company "Holding Autokomponenti" reached on 15 October 2015 a decision on the appointment of Dmitrij Leonidovič Drandin and Nadezhda Anatolyevna Nikitina as members of the Supervisory Board for a term of four years, with due mandate starting on 19 October 2015.
In accordance with previously published Calendar, the Supervisory Board held 5 regular meetings in 2015.
General Assembly
Workers' Council
Holding Autokomponenti
Meetings in 2015
President of the Supervisory Board
Josip Boban was born in Split in 1946. He graduated from the Faculty of Mechanical Engineering and Naval Architecture in Zagreb, and began his professional experience as a maths teacher at the Split grammar school "Marko Marulić".
One year after graduation he gained employment in Jugoplastika, as an intern in unit for motor vehicle accessories.
He started his sixteen-year career in Jugoplastika as a technologist for motor vehicle accessories and was afterwards promoted to motor vehicle accessories production manager; automotive industry development and product cooperation manager; director of sector for development, design, construction, production and maintenance of tools; assistant director of automotive industry development; and finally the director of development in the company Autodijelovi.
Following the separation of the company Autodijelovi from the company Jugoplastika in 1991, Josip Boban became the director of the newly established company. Shortly after its foundation, Autodijelovi changed its name to AD Plastik where Boban first acted as general director and was afterwards promoted to the President of the Management Board, the function he kept until his retirement.
He became the President of the AD Plastik Supervisory Board after his retirement.
During his successful career in the automotive industry, Mr. Boban served as the long-time President of the Association of Automotive Parts and Automotive Industry Equipment Manufacturers; as Vice President of the Economic Council at the Croatian Chamber of Economy, where he still acts as an active member; and as the President of the association Cluster of Automotive Parts Manufacturers.
Vice President
Marijo Grgurinović Dmitrij Leonidović Drandin Nadežda Anatoljevna Nikitina Igor Anatoljevič Solomatin Dolores Čerina
Members
Vice President
B
According to the Company Statute, Supervisory Board members may be remunerated for their work in the amount specified by the General Assembly in due decision for the business year in which such remuneration shall be paid, depending on business results and the position of the Company.
In the year 2015, the decision on the payment of remuneration to members of the Supervisory Board was not made.
According to the Decision of regular AD Plastik General Assembly of 18 July 2008, remuneration for Supervisory Board members was set as follows:
The amount of remuneration is determined on the basis of gross average monthly salaries in AD Plastik achieved in the three months prior to the payment of such remuneration.
Remuneration is paid after each meeting of the Supervisory Board.
The aforementioned decision entered into force upon its adoption and shall be applied starting from 1 July 2007.
In accordance with the Companies Act and the Rules of Procedure of the Supervisory Board, AD Plastik established three committees whose activities assist the work of the Supervisory Board by preparing decisions that shall later be taken by the Supervisory Board, and supervising their implementation.
These committees are as follows:
The Audit Board has four members, while the Remuneration Committee and the Appointment Committee each have three members.
At least one member of such committee or board must be a member of the Supervisory Board.
General Assembly Decision
Remuneration amount
Audit Board performs a detailed analysis of financial reports, provides support to the accounting department and supports the establishment of effective internal control in the Company.
To this end, it performs the following activities:
It proposes to the Supervisory Board, in particular, as follows:
It performs the following activities, and in particular:
Nikola Zovko
Chair: Nikola Zovko
Chair: Ana Luketin
Members:
Nikola Zovko
Members: Nenad Škomrlj
Dmitrij Leonidovič Drandin
Dmitrij Leonidovič Drandin
Nenad Škomrlj Dmitrij Leonidovič Drandin Anatolij Janovskis
President of the Management Board
Marinko Došen was born in Rijeka in 1963. He graduated from the Faculty of Engineering in Rijeka and gained the Master of Science degree in Mechanical Engineering. He completed his MBA degree in Petroleum Studies at the Zagreb School of Business in 1993.
He began his career in Croatian petrochemical industry as an intern in the company DINA d.d. (DIOKI d.d.). From 1997 to 2004 he held several managerial and executive positions, including the position of the President of the Management Board in DINA d.d.
Afterwards, he was appointed the chair of the investment company Coca-Cola Bottling Energy Ltd. He managed the construction of several energy projects in Hungary.
From 2007 to 2010 he served as the executive director and management board member of the company Trast d.d., one of the leading logistics companies in the Republic of Croatia.
He later acted as the chief of management board of the company Mirna d.d. Rovinj for two years, where he led the project of company's operational restructuring.
He came to AD Plastik in 2012 and served as the general director of the plant in Togliatti until the appointment as the President of the Management Board.
Board Member for Finance and Accounting
Board Member for Business Organization, Informatics and Controlling
Management Board held 34 sessions in 2015.
B
Management Board members have concluded the so called managerial contracts with AD Plastik, which define the rights and obligations of Management Board members as follows:
In addition, managerial contracts shall include provisions on the following:
The total amount of remuneration paid to Supervisory Board and Management Board members, and Executive Directors, amounted to HRK 11,605,880 in 2015.
AD Plastik Group bases its business activities on good corporate governance practices; and by implementing everyday business practices, strategies, Company policies and internal regulations aims to contribute to transparent and efficient business operation and establish better relations in the environment where it operates. AD Plastik Group has by the Corporate Governance Code defined the rules of business conduct that aim to ensure the avoidance of conflicts of interest and any form of corruption, as well as to assume obligations under international law to respect human rights. Given that AD Plastik shares are listed on the Official Market of the Zagreb Stock Exchange, AD Plastik d.d. applies the Corporate Governance Code issued by Zagreb Stock Exchange. By regularly submit-ting annual surveys published on the official website of the Zagreb Stock Exchange (www.zse.hr) and on the Company's website (www.adplastik.hr), AD Plastik conclusively demonstrates its commitment to adhere to the principles of corporate governance and social responsibility.
In 2015 AD Plastik complied with the provisions of the Code, with the following deviation: the Company did not adopt the Statement on the remuneration policy for the Management Board and Supervisory Board.
Internal control in AD Plastik is conducted by the Controlling and Internal Audit Department. Controlling subsequently informs the Management Board, whereas the Internal Audit department informs the Management Board and the Audit Board about conducted monitoring. Such informing is provided through the report on conducted monitoring. Supervision and coordination of business reporting by the Controlling include encouraging communication between different 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; and forecasting the impact of external and internal changes in the overall business of the Company.
The scope of internal audit activities includes as follows:
Main features of risk management are described in the section Business risks.
By signing the Code of Business Ethics issued by the Croatian Chamber of Commerce, AD Plastik d.d. committed to exhibit responsible and ethical behaviour as a necessary precondition for effective functioning of the market. Defining ethical criteria contributes to more transparent and efficient business operations.
99 Independent Auditor's Report
93 Financial results in 2015
The Supervisory Board have not yet considered and determined the financial statements, but shall give its decision at the meeting scheduled in May.
Company's Management Board presented the Annual Report on business operations for 2015 with focus on the Independent Auditor's Report on the status of the Company AD Plastik d.d. and AD Plastik Group, as well as important events that occurred during the year.
Group's income statements, submitted as part of the Independent Auditor's Report, for the period include due data on the following Companies:
(hereinafter: AD Plastik Group)
In 2015 AD Plastik Group has recorded a total consolidated revenue of more than billion kuna for the first time.
Revenue of more than 1,000,000,000 kuna
C
Business results indicate the accomplishment of goals set by the Management Board in 2015, that is, compared to 2014 there has been a substantial increase in operating revenue of 14% at the level of AD Plastik Group.
AD Plastik d.d. recorded a growth of as much as 25%. Despite aggravating external factors, primarily in the Russian Federation, a modest increase of 9% in operating expenses was recorded.
Last year was marked by rationalization and reorganization of AD Plastik Group business operations, as the basis for creating added value for shareholders. The result of such activities was the restoration of EBITDA margins at levels adequate for the industry in which the Group operates. For the reporting period, the EBITDA margin of 11.20% was recorded, that is EBITDA amounted to 114.9 million kuna.
The increase in revenue, greater efficiency of operations and rationalization of expenses resulted in significant increase of Group's profit after taxation. AD Plastik Group's net profit increased from 4.9 million kuna in 2014 to 46.2 million kuna in 2015.
14%
Growth of operating revenues
9%
Growth of operating expenses
Goals set for business operations in 2015 included increasing AD Plastik Group's profitability, improving overall cost efficiency, higher sales and an increase in capacity utilization in Croatia and Serbia. We are pleased to say that they were achieved. -69.4 mil. HRK
Net profit
Reduction in loan liabilities
46.2 mil. HRK
FINANCIAL STATEMENTS
C
Sales revenue
• AD Plastik Group's increase of revenue on the markets of the EU and Serbia increased by 36.35%, while the EU automotive market reported an increase of approx. 9%.
The markets of the EU and Serbia have in 2015 reported an increase of revenue of 36.35% compared to the year 2014. An increase in sales compared to the previous year was the result of a further increase in utilization of production capacities in Croatia achieved within the project Edison and other projects for customers PSA and Ford in plants Solin and Zagreb in Croatia, as well as in plant Mladenovac in Serbia. In addition, Serbia had, compared to the same period of the previous year, expanded product portfolio and started the delivery of grab handles and blow moulded products to new destinations in Italy and Poland.
• Even though AD Plastik Group reported a decrease of revenue by 20.83% in Russia, the Russian automotive market recorded a decrease of 35.7% in the same period.
Total production and sales realised in Vintai (Samara) and Kaluga factories are intended for Russian market. The decrease of 35.7% on the total automotive market in Russia in 2015 was significantly higher than the decrease of sales in our factories due to smaller decrease in production of makes and models of vehicles by manufacturers with whom we cooperate. To this we must add new projects whose production began this year - Renault Duster Phase 2, new Qashqai and Lada Vesta, which are now not only in demand on the Russian market but also winning nominations for new Ford operations.
Solin, Zagreb, Mladenovac
Vintai (Samara), Kaluga
Associated companies include Romanian company Euro APS, French company FADP Holding France (with a factory in Russia) and Center for research and development of automotive industry. Associated companies did not report major changes in business operations in the last quarter of 2015.
The Romanian company has a full-capacity production. Most of the deliveries were related to serial deliveries made to Dacia factory in Romania, while a smaller part of deliveries were related to sites in Morocco, Algeria, Iran and other markets where models Logan, Sandero and Duster are manufactured.
Sales realised in Russian company decreased in comparison with the same period of the previous year in line with current trends on the Russian market. The main customers are Ford, Nissan and Hyundai.
| ers are Ford, Nissan and Hyundai. For the purpose of achieving a clearer picture of AD Plastik Group business activities, we have prepared an abbreviated consolidated income statement on Group for 2014 and 2015 with the accompanying consolidated income statements of associated companies Euro APS Romania, FADP Russia and Center for research and develop ment of automotive industry in which AD Plastik d.d. has 50%, 40% and 24% owner ship respectively. |
||||
|---|---|---|---|---|
| AD Plastik Group income statement | Positions | 2014 | 2015 | Index |
| With consolidation of belonging own | OPERATING REVENUES | 1,394,929 | 1,468,167 | 105 |
| ership shares in Euro APS, FADP and | Sales revenue | 1,357,826 | 1,442,040 | 106 |
| Center for research and development of | Other sales revenue | 37,103 | 26,127 | 70 |
| automotive industry for 2014 and 2015 in thousands of HRK. |
OPERATING EXPENSES | 1,347,610 | 1,363,038 | 101 |
| Material costs | 825,285 | 851,251 | 103 | |
| Staff costs | 225,203 | 228,812 | 102 | |
| Amortization | 75,761 | 87,267 | 115 | |
| Other costs | 221,361 | 195,707 | 88 | |
| FINANCIAL REVENUE | 33,491 | 120,559 | 360 | |
| FINANCIAL EXPENSES | 69,091 | 167,660 | 243 | |
| TOTAL REVENUE | 1,428,420 | 1,588,726 | 111 | |
| TOTAL EXPENSES | 1,416,203 | 1,530,698 | 108 | |
| Profit before tax | 12,218 | 58,028 | 475 | |
| Associated companies do not have any financial liabilities arising from credits |
Profit tax | 7,301 | 11.806 | 162 |
| to outside subjects, except liabilities | PROFIT OF THE PERIOD | 4,917 | 46,222 | 940 |
| arising from credits obtained from the owner. |
EBITDA | 123,080 | 192,397 | 156 |
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP |
Center for research and development of
Euro APS, FADP Holding,
automotive industry
Solin, April 2016
The financial statements of AD Plastik Group and the company AD Plastik d.d. Solin are prepared in accordance with the International Financial Reporting Standards (IFRS) and the Croatian Law on Accounting.
The consolidated financial statements of AD Plastik Group and the financial statements of the company AD Plastik d.d. for the period from January 1 to December 31, 2015, give a complete and true review of the assets and liabilities, profit and loss, financial position and business activities of the issuers and companies included in the consolidation as a whole.
The management report for the period until December 31, 2015, contains an accurate and true display of the development and results of the business activities of the Company with a description of the most significant risks and uncertainties to which the Company is exposed.
President of the Management Board
Marinko Došen
Member of the Management Board for finance and accounting
Katija Klepo
The Company is registered at the Court Register of the Commercial Court of Split under the Registered Company Number (MBS): 060007090 Company Identification Number (OIB): 48351740621 IBAN: HR04 2340 0091 1101 5371 1, Privredna banka Zagreb d.d., Zagreb
The capital stock in the amount of HRK 419,958,400 was paid in full. AD Plastik issued a total of 4,199,584 of ordinary shares, in nominal amount of HRK 100. President of the Management Board: Marinko Došen Management Board members: Mladen Peroš, Ivica Tolić, Katija Klepo, Denis Fusek, Hrvoje Jurišić President of the Supervisory Board: Josip Boban
Consolidated financial statements together with Independent Auditor's Report for the year ended 31 December 2015
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Consolidated financial statements together with Independent Auditor's Report for the year ended 31 December 2015
Pursuant to the Accounting Act of the Republic of Croatia, the Management Board is responsible for ensuring that financial statements are prepared for each financial year in accordance with International Financial Reporting Standards ("the IFRSs"), as adopted in 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') and its subsidiaries ('the Group') for that period.
After making 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 Board continues to adopt the going concern basis in preparing the financial statements.
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 their (njegovu) compliance with the Croatian Accounting Act. The Management 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 101STRATEGIC REPORT
Signed on behalf of the Management Board:
Marinko Došen
Marinko Došen President of the Management Board
AD Plastik d.d. Matoševa 8 21210 Solin Republic of Croatia
23 April 2016
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Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 103STRATEGIC REPORT
| Notes | 2015 | 2014 | |
|---|---|---|---|
| Sales | 6 | 1,002,363 | 869,553 |
| Other income | 7 | 23,032 | 27,924 |
| Total income |
____ 1,025,395 |
____ 897,477 |
|
| (Decrease)/Increase in the value of work in progress and finished products |
(593) | ____ 4.893 |
|
| Cost of raw material and supplies | 8 | (482,238) | (434,918) |
| Cost of goods sold | 9 | (52,627) | (36,227) |
| Service costs | 12 | (72,702) | (66,209) |
| Staff costs |
10 | (187,560) | (182,196) |
| Depreciation and amortisation | 11 | (73,198) | (58,990) |
| Other external expenses | 13 | (90,373) | (116,976) |
| Other operating expenses | 14 | (18,870) | (9,496) |
| Provisions for risks and charges | 15 | (5,553) | (3,420) |
| Total operating expenses |
____ (983,714) |
____ (903,539) |
|
| Profit from operations |
41,681 | (6,062) | |
| Financial income | 16 | 121,454 | 41,403 |
| Financial expenses | 17 | (153,231) | (63,179) |
| Share in the profit of associates | 18 | 36,458 | 32,899 |
| Profit from financing activities |
4,681 | 11,123 | |
| Profit before taxation |
____ 46,362 |
____ 5,061 |
|
| Income tax expense | 19 | ____ (140) |
____ (144) |
| Profit for the year |
____ 46,222 |
____ 4,917 |
Consolidated statement of comprehensive income (continued) For the year ended 31 December 2015 (All amounts are expressed in thousands of kunas)
| Items that may be included subsequently in profit or loss: |
2015. | 2014. | ||
|---|---|---|---|---|
| Exchange differences on translation of a foreign operation, net |
____ (7,415) |
____ (99,062) |
||
| Items that will not be included subsequently in profit or loss |
||||
| Change in the revaluation reserve of non-current assets, net |
(18,963) | 42,500 | ||
| Total other comprehensive loss, net of tax |
20 | (26,378) | (56,562) | |
| Total comprehensive income / (loss) for the year |
19,844 | (51,645) | ||
| Profit attributable to: |
||||
| Equity holders of the Company | 46,225 | 4,930 | ||
| Non-controlling interests | (3) | (13) | ||
| Total comprehensive income/(loss) attributable to: |
STRATEGIC REPORT | |||
| Equity holders of the Company | 19,858 | (51,626) | ||
| Non-controlling interests | (14) | (19) | ||
| Basic and diluted earnings per share (in kunas and lipas) | 21 | 11.09 | 1.18 | B |
| The accompanying accounting policies and notes form an integral part of these consolidated financial statements. | CORPORATE GOVERNANCE | |||
| C | ||||
| FINANCIAL STATEMENTS | ||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 105 |
| Notes | 31.12.2015. | 31.12.2014. (re stated) |
1.1.2014. (restated) |
|
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets |
||||
| Intangible assets | 22 | 125,980 | 126,747 | 95,714 |
| Goodwill | 40 | 7,612 | 8,908 | 13,495 |
| Property, plant and equipment | 23 | 695,404 | 746,047 | 725,491 |
| Investments in associates | 24 | 86,508 | 92,666 | 101,012 |
| Other financial assets | 25 | 46,085 | 52,626 | 54,334 |
| Long-term receivables | 14,176 | 8,459 | - | |
| Deferred tax assets | 19 | 22,399 | 15,568 | - |
| Total non-current assets |
____ 998,164 |
1,051,021 | ____ 990,046 |
|
| Current assets |
____ | ____ | ||
| Inventories | 26 | 97,786 | 94,315 | 94,793 |
| Trade receivables | 27 | 143,744 | 207,409 | 148,435 |
| Other receivables | 28 | 34,209 | 48,528 | 62,554 |
| Current financial assets | 29 | 6,116 | 15,539 | 27,144 |
| Cash | 30 | 12,384 | 7,806 | 28,943 |
| Prepaid expenses and accrued income | 31 | 45,190 | 85,289 | 184,903 |
| Total current assets |
____ 339,429 |
458,886 | ____ 546,772 |
|
| TOTAL ASSETS |
____ 1,337,593 |
1,509,907 | ____ 1,536,818 |
| Bilješka | 31.12.2015. | 31.12.2014. (re stated) |
1.1.2014. (restated) |
||
|---|---|---|---|---|---|
| Equity | |||||
| Share capital | 32 | 419,958 | 419,958 | 419,958 | |
| Reserves | 142,277 | 169,200 | 223,890 | ||
| Retained earnings | 14,500 | 12,398 | 31,288 | ||
| Profit for the year | 46,225 | 4,930 | 27,661 | ||
| Non-controlling interests | (4) | (7) | 9 | ||
| Total equity |
____ 622,956 |
606.479 | ____ 702,806 |
||
| Long-term provisions | 33 | ____ 3,483 |
1,990 | ____ 2,652 |
|
| Long-term borrowings | 34 | 262,592 | 212,344 | 255,816 | |
| Other non-current liabilities | 34 | 28,488 | 26,239 | 226 | |
| Deferred tax liabilities | 19 | - | - | 387 | |
| Total non-current liabilities |
____ 294,563 |
240,573 | ____ 259,081 |
STRATEGIC REPORT | |
| Advances received | 35 | 23,613 | 57,224 | 94,660 | |
| Trade payables | 36 | 180,511 | 270,425 | 156,085 | |
| Short-term borrowings | 37 | 163,100 | 285,343 | 239,963 | B |
| Other current liabilities | 38 | 26,623 | 28,587 | 20,611 | |
| Short-term provisions | 33 | 8,607 | 7,606 | 7,581 | |
| Accrued expenses and deferred income | 39 | 17,620 | 13,670 | 56,031 | |
| Total current liabilities |
420,074 | 662,855 | 574,931 | ||
| Total liabilities |
____ 714,637 |
____ 903,428 |
____ 834,012 |
||
| TOTAL EQUITY AND LIABILITIES |
____ 1,337,593 |
____ 1,509,907 |
____ 1,536,818 |
CORPORATE GOVERNANCE | |
| The accompanying accounting policies and notes form an integral part of these consolidated financial statements. | C FINANCIAL STATEMENTS |
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| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 107 |
| Share capital |
reserves Capital |
Legal reserves |
General reserves |
Revaluation reserve (arisen on privatisation) |
Reserve from revaluation of tangible and intangible fixed assets |
Reserve from revaluation of liabilities long-term receivables / |
Reserves for own shares |
Treasury shares |
Retained earnings |
attributable to the equity Total equity holders of the parent |
Non-con trolling interests |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 31 Decem ber 2013 |
419,958 | 183,509 | 6,143 | 24,051 | 8,490 | 1,696 | - | 4,753 | (4,753) | 58,949 | 702,796 | 9 | 702,805 |
| Changes in non-con trolling interests |
- | - | - | - | - | - | - | - | - | - | - | (3) | (3) |
| Exchange differences | - | 4 | (3) | (37) | - | - | (82,580) | - | - | (4,030) | (86,646) | - | (86,646) |
| Dividends paid | - | - | - | - | - | - | - | - | - | (33,343) | (33,343) | - | (33,343) |
| Allocation of a part of 2013 profit |
- | - | - | 9,177 | - | - | - | - | - | (9,177) | - | - | - |
| Correction of equity in vestment |
- | - | - | (8,542) | - | - | - | - | - | - | (8,542) | - | (8,542) |
| Valuation of own shares |
- | - | - | - | - | - | - | (1,808) | 1,808 | - | - | - | - |
| Revaluation | - | - | - | - | 50,171 | - | - | - | - | 50,171 | - | 50,171 | |
| Sale of own shares | - | - | - | 1,273 | - | - | - | - | - | - | 1,273 | - | 1,273 |
| Profit for the year | - | - | - | - | - | - | - | - | - | 4,930 | 4,930 | (13) | 4,917 |
| Balance at 31 Decem ber 2014 |
419,958 | 183,513 | 6,140 | 25,922 | 8,490 | 51,867 | (82.580) | 2,945 | (2,945) | 17,329 | 630,639 | (7) | 630,632 |
| Correction of prior pe riod |
- | - | - | - | - | (7,671) | (16,482) | - | - | - | (24,153) | - | (24,153) |
| Correction of the net profit for the year |
- | - | - | - | - | - | - | - | - | (1,957) | (1,957) | - | (1,957) |
| Balance at 31 Decem ber 2014 (restated) |
419,958 | 183,513 | 6,140 | 25,922 | 8,490 | 44,196 | (99,062) | 2,945 | (2,945) | 15,372 | 604,529 | (7) | 604,522 |
| For the year ended 31 December 2015 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share capital |
reserves Capital |
Legal reserves |
reserves General |
Revaluation reserve (arisen on privatisation) |
Reserve from revaluation of tangible and intangible fixed assets |
Reserve from revaluation of receivables / liabilities long-term |
Reserves for own shares |
Treasury shares |
Retained earnings |
Total equity attributable to the equity holders of the parent |
Non-con trolling interests |
Total | |
| ber 2014 (as restated) Balance at 31 Decem |
419,958 | 183,513 | 6,140 | 25,922 | 8,490 | 44,196 | (99,062) | 2,945 | (2.945) | 15,372 | 604,529 | (7) | 604,522 |
| controlling interests Changes in non |
- | - | - | - | - | - | - | - | - | - | - | 6 | 6 |
| Exchange differ ences |
- | (31) | (1) | - | - | (12,059) | (7,415) | 1 | (1) | (9,502) | (29,008) | - | (29,008) |
| Dividends paid | - | - | - | (56) | - | - | - | - | - | - | (56) | - | (56) |
| Valuation of own shares |
- | - | - | - | - | - | - | 162 | (162) | - | - | - | - |
| Revaluation | - | - | - | - | - | (6,904) | - | - | - | 8,630 | 1,726 | - | 1,726 |
| Purchase of own (treasury) shares |
- | - | - | (456) | - | - | - | - | - | - | (456) | - | (456) |
| Profit for the year | - | - | - | - | - | - | - | - | - | 46,225 | 46,225 | (3) | 46,222 |
| Balance at 31 Decem ber 2015 |
419,958 | 183,482 | 6,139 | 25,410 | 8,490 | 25,233 | (106,477) | 3,108 | (3.108) | 60,725 | 622,960 | (4) | 622,956 |
| Correction of equity in 2014 in the amount of HRK 24,153 thousand relates to the subsequently determined fair value of the net assets whose acquisition is described in Note 40. The changes in the shareholders' equity of the Group also include the correction of HRK 1,957 thousand to the 2014 result with respect to balances recognised by subsidiaries subsequent to the publication of the 2014 audits report issued for the Group. The balance comprises value adjustment of receivables at ADP Mladenovac (HRK 567 thousand) and the recognition of differences arisen from the reconciliation of the tax records of ADP Kaluga with the Russian tax authorities (HRK 1,390 thousand). Since the total amount of the correction is not material for the Group, the figures disclosed for 2014 were not restated. |
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| FINANCIAL STATEMENTS | C | CORPORATE GOVERNANCE | B | STRATEGIC REPORT | A |
For the year ended 31 December 2015 (All amounts are expressed in thousands of kunas)
| Cash flows from operating activities |
2015 | 2014 |
|---|---|---|
| Profit for the year Income tax expense Depreciation and amortisation Net book value of retired assets Value adjustment of investments in associates Increase/(decrease) in long-term and short-term provisions Share in the profit of associates |
____ 46,222 140 73,198 64,957 - 2,494 (35,781) |
____ 4,917 144 58,990 12,303 258 (637) (32,899) |
| Profit from operations before working capital changes |
____ 151,230 |
____ 43,076 |
| (Increase)/decrease in inventories Decrease/(increase) in short-term and long-term receivables Decrease in other receivables (Decrease)/increase in trade payables Decrease of advances received (Decrease)/Increase in other short-term and long-term liabilities Decrease in accrued expenses and deferred income Decrease in accrued income and prepaid expenses |
(3,471) 47,183 14,319 (89,914) (33,611) (154) 3,950 40,099 |
478 (201,232) 14,026 114,340 (37,436) 7,964 (42,361) 99,614 |
| Cash generated from operations |
129,631 | 1,531 |
| (Purchase)/sale of own shares Dividends from associates Increase/(decrease) in deposits Decrease of short-term and long-term borrowings Purchases of property, plant and equipment Purchases of intangible assets Investments in associates |
(456) 41,963 6,836 9,128 (84,021) (26,428) 24 |
1,273 40,987 (9,130) 22,443 (25,475) (44,282) - |
| Cash used in investing activities |
(53,002) | (14,184) |
| Dividends paid Proceeds from received short-term and long-term borrowings Repayments of short-term and long-term borrowings |
(56) 116,906 (188,901) |
(33,343) 151,889 (123,968) |
| Cash used in financing activities |
(72,051) | (5,422) |
| Net cash increase/(decrease) of cash and cash equivalents |
4,578 | (21,137) |
| Cash and cash equivalents at beginning of the year |
7,806 | 28,943 |
| Cash and cash equivalents at end of the year |
12,384 | 7,806 |
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 a legal successor of the sociallyowned 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 by a contribution 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, effected by OAO Saint Petersburg Investment Company was registered, and the total subscribed capital now amounts to HRK 419,958,400 and consists of 4,199,584 shares, with a nominal amount of HRK 100,00 each. Under 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 111STRATEGIC REPORT
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:
In early 2012 ZAO ADP Luga, Luga, changed both its official name and registered seat to ZAO AD Plastik, 248016, Skladskaja ulica 6, Kaluška oblast, Russian Federation. Ad Plastik d.d. Solin, holds all the Company's shares and is the sole owner of the Company.
The company's registered activities comprise the following:
C
On 6 July 2015 the company was renamed to public limited company AO AD Plastik (abbreviated firm: AO ADP).
The company's registered activities comprise the following:
The registered activities of the Company comprise the following:
FINANCIAL STATEMENTS
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, in the associate is 24 percent.
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 2015, the number of staff employed was 2,913 (31 December 2014: 3,139).
| 2015. | 2014. | |
|---|---|---|
| AD Plastik d.d. | 1.203 | 1.283 |
| AO AD Plastik/ZAO PHR |
529 | 706 |
| AD Plastik d.o.o. Novo Mesto |
3 | 3 |
| ADP d.o.o. Mladenovac |
186 | 172 |
| ZAO AD Plastik Kaluga |
213 | 189 |
| EURO Auto Plastik Systems | 610 | 593 |
| FADP Holding |
169 | 193 |
| Centar za istraživanje i razvoj | - | - |
| 1.5. | Management and corporate governance | |||
|---|---|---|---|---|
| Mandate | ||||
| Members of the Supervisory Board: |
||||
| Josip Boban (President) Nikola Zovko (Vice President) Dolores Čerina Marijo Grgurinović Solomatin Igor Anatoljevič Drandin Dmitrij Leonidovič Nikitina Nadežda Anatoljevna |
From 19 July 2012 From 19 July 2012 From 02 June 2015 From 23 July 2015 From 23 July.2015 From 19 October 2015 From 19 October 2015 |
to 19 July 2016 to 19 July 2016 to 02 June 2019 to 23 July 2019 to 23 July 2019 to 19 October 2019 to 19 October 2019 |
||
| The members of the Company's |
Management Board are as follows: |
|||
| Marinko Došen (President) Ivica Tolić Katija Klepo Mladen Peroš Denis Fusek Hrvoje Jurišić |
From 06 February 2015 From 19 July 2012 From 19 July 2012 From 06 February 2015 From 26 September 2013 From 26 September 2013 |
to 19 July 2016 to 19 July 2016 to 19 July 2016 to 19 July 2016 to 19 July 2016 to 19 July 2016 |
The following amendments to the existing standards and new interpretation issued by the International Accounting Standards Board (IASB) and adopted by the EU are effective for current financial period:
The adoption of the amended and revised Standards and Interpretations has not lead to any material changes in the Company's financial statements.
At the date of authorisation of these financial statements the following standards, amendments to the existing standards and interpretations issued by IASB and adopted by the EU were in issue but not yet effective:
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FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued) For the year ended 31 December 2015
Amendments to the existing standards issued by IASB and adopted by the European Union, but not yet effective (continued):
At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board ('IASB') except from the following standards, amendments to the existing standards and interpretations, which were not endorsed for use in EU as at 23 April 2016 (the effective dates stated below are for IFRS in full):
The Management Board anticipates the adoption of these standards and interpretations in the financial statements of the Company in the periods in which they become effective, but without any material impact on the financial statements in the period of initial application.
Set out below are the principal accounting policies consistently applied in the preparation of the financial statements for the current and prior years.
These financial statements are prepared in accordance with the Accounting Act of the Republic of Croatia and International Financial Reporting Standards ('IFRS') effective on 23rd April, 2016 in 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 the financial statements in accordance with the Accounting Act of the Republic of Croatia and International Financial Reporting Standards ('IFRSs') 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 119STRATEGIC REPORT
The consolidated financial statements of the Group represent aggregate amounts of assets, liabilities, capital and reserves of the Group as of 31 December 2015, 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. Parent has control over the subsidiary if, based on its control, is exposed to variable returns and has the capability to influence the variable returns of the subsidiary.
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. The Group recognises revenue when the amount of the revenue can be measured reliably and when it is probable that future economic benefits will flow into the Group.
Product sales are recognized when the products are delivered to, and accepted by the customer and when the significant risks and rewards associated with the ownership of a product are transferred to the customer.
Accrued revenues are matched with contracts that are specifically concluded for developing an asset, or a group of assets, closely linked and interdependent on the design, technology and function, or their final use or application. The Group is required to recognize revenue according to the stage of completion of a contractual performance. Pursuant to IAS 11, when the outcome of a production contract can be estimated reliably, the revenue and costs associated with the contract should be recognized according to the stage of completion of the contractual performance at the date of the statement of financial position.
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 as it accrues.
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.
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FINANCIAL STATEMENTS
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 2015, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.635047 (31 December 2014: HRK 7.661471 for 1 EUR).
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognised in the statement of comprehensive income, 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 rates enacted at the date of the statement of financial position, adjusted by appropriate prior-period tax liabilities.
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 rate expected to apply to taxable profit in the period in which the liability is expected to be settled or the asset realised, based on the tax rates in effect at the date of the statement of financial position.
The measurement of deferred tax liabilities and assets reflects the amount that the Group expects, at the date of the statement of financial position, to recover or settle the carrying amounts of its assets and liabilities.
Deferred tax assets and liabilities are not discounted and are classified in the statement of financial position 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 date of the statement of financial position, the Group reviews the unrecognised potential deferred tax assets and the carrying amount of the recognised deferred tax assets. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 121STRATEGIC REPORT
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 Group 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.
Notes to the consolidated financial statements (continued) For the year ended 31 December 2015 (All amounts are expressed in thousands of kunas)
Property, plant and equipment as well as intangible assets are recognised at purchase cost and subsequently reduced by accumulated depreciation/amortisation. The purchase cost comprises the purchase price, import duties and non-refundable sales taxes (on property, plant and equipment) and any directly attributable costs of bringing an asset to its working condition and location for its intended use, such as employee remuneration, professional fees directly arising from putting an asset into its working condition, test costs (for intangible assets), as well as all other costs directly attributable to brining an asset to a condition 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 an increase of expected future economic benefits to be derived from the use of an item of property, plant and equipment 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 property, plant and equipment or intangible assets are included in the statement of comprehensive income in the period in which 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 other than land, property, plant and equipment and intangible assets under development over the estimated useful life of the asset using the straight-line method as follows:
| Depreciation rates in 2015 | Depreciation rates in 2014 | |
|---|---|---|
| Tangible and intangible assets |
||
| Buildings | 1,50 | 1,50 |
| Machinery | 7.00 | 7.00 |
| Tools, furniture, office and laboratory equipment and accessories, measuring and control instruments |
10.00 | 10.00 |
| Vehicles | 20.00 | 20.00 |
| IT equipment | 20.00 | 20.00 |
| Others | 10.00 | 10.00 |
| Projects | 20.00 | 20.00 |
Goodwill represents the excess of the cost of acquisition over the Group's share of the fair values of the identifiable net assets of the subsidiary at the acquisition date. Goodwill is presented as an intangible asset.
Goodwill is tested for impairment anually or more often if the events and circumstances that indicate potential impairment occur. Goodwill is measured as cost of acquisition less accumulated losses due to impairment. Losses that ocurred due to impairment of goodwill are not reversed. Gains and losses from sale of the subsidiary include net book value of goodwill which relates to sold subsidiary.
For the purpose of impairment test, goodwill is allocated to those individual cash generating units for which it is reasonable to expect that the benefit of goodwill will occur.
At each reporting date the Group reviews the carrying amounts of its property, plant and equipment as well as of its intangible assets to determine whether there is an indication that the assets have suffered an impairment loss. 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 Group estimates the recoverable amount of the cashgenerating 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 and an ownership interest from 20 to 50 percent, but no control over the entity. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but it is not control or joint control over those policies.
The results of operations 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 statement of comprehensive income 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 123STRATEGIC REPORT
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.
Management determines the level of impairment allowance for doubtful receivables based on a specific review of the recoverability of amounts owed by strategic customers of the ADP Group and of the overall ageing of other current receivables. 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 have 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 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. Actuarial gains and losses are recognised in the period in which they arise. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 125STRATEGIC REPORT
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 and included in the statement of comprehensive income.
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.
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FINANCIAL STATEMENTS
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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 127STRATEGIC REPORT
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
A part of the Group companies have elected the revaluation method as a method of subsequent measurement. When the carrying amount of such assets increases on revaluation, the increase is recognized in other comprehensive income and accumulated within equity as a revaluation reserve. Revaluation is performed with sufficient regularity to ensure that the carrying amount does not differ materially from the one that would be measured at fair value at the date of the statement of financial position. On derecognition of such an asset (as a result of retirement or disposal), the revaluation reserve accumulated in equity relating to that asset can be transferred directly to retained earnings.
The Group may have a monetary item as an amount receivable from, or payable to a foreign entity. An item neither planned to be settled nor likely to arise in the foreseeable future is essentially part of the entity's net investment in a foreign operation and accounted for in accordance with IAS 21. The Group recognizes foreign exchange differences arising from monetary items that are part of the net foreign investment initially in other comprehensive income and accumulates them under a separate component of equity - revaluation reserves.
On disposal of a net investment in a foreign operation, the entire balance of exchange differences is transferred from equity to profit or loss (as a reclassification adjustment).
Contingent liabilities are not recognised in financial statements. They are disclosed only when the possibility of outflow of resources embodying economic benefits is certain. 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 Group'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.
Group keeps records and publishes business results for its basic business segments. Segments divided according to geographical position are the basis for segment reporting. Certain financial information for each geographical position are presented in Note 5.
Group presents its revenue according to geographical position, but it does not keep records information about non-current assets and revenue from external buyers generated in those areas.
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 management estimation in applying the Group'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 for unused tax losses 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 2015, deferred tax assets on available tax differences were recognised. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 129STRATEGIC REPORT
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.
Notes to the consolidated financial statements (continued) For the year ended 31 December 2015 (All amounts are expressed in thousands of kunas)
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:
| 2015 | 2014 | |
|---|---|---|
| Slovenia | 307,814 | 301,571 |
| Russia | 255,129 | 320,777 |
| France | 159,719 | 111,101 |
| Germany | 114,510 | 91,897 |
| Other countries | 165,191 | 44,207 |
| 1,002,363 | 869,553 |
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 2015 | 2014 | |
|---|---|---|
| Foreign sales | 972,189 | 794,580 |
| Domestic sales | 30,174 | 74,973 |
| 1,002,363 | 869,553 |
| 2015 | 2014 | |
|---|---|---|
| Income from consumption of own products and services | 1,773 | 1,377 |
| Income from bonuses provided by suppliers | 1,447 | 2,222 |
| Income from reversal of provisions for long-service benefits | 1,302 | 1,568 |
| Income from reversal of retirement benefit provisions | 688 | 1,084 |
| Income from reversal of unused vacation provisions | 141 | - |
| Income from sale of assets | 297 | 5,487 |
| Income from damages collected | 15 | 789 |
| Other operating income | 17,369 | 15,397 |
| 23,032 | 27,924 |
| Cost of direct and auxiliary materials | 429,985 | 394,632 |
|---|---|---|
| Electricity | 19,441 | 18,332 |
| Other raw material and supplies | 32,812 | 21,954 |
| ____ 482,238 |
____ 434,918 |
| 23,032 | 27,924 | |||
|---|---|---|---|---|
| Other operating income consist mostly of compensations for damages, overstock and other extraordinary in come. |
STRATEGIC REPORT | |||
| 8. | Cost of raw material and supplies | |||
| 2015 | 2014 | B | ||
| Cost of direct and auxiliary materials Electricity Other raw material and supplies |
429,985 19,441 32,812 |
394,632 18,332 21,954 |
||
| ____ 482,238 |
____ 434,918 |
|||
| 9. | Cost of goods sold | CORPORATE GOVERNANCE | ||
| 2015 | 2014 | |||
| Cost of goods and spare parts sold Cost of direct material sold Cost of goods sold Other costs of goods sold |
27,601 18,338 6,661 27 |
5,994 3,388 21,789 5,056 |
C | |
| ____ 52,627 |
____ 36,227 |
FINANCIAL STATEMENTS | ||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 131 |
| 2015 | 2014 |
|---|---|
| Net wages and salaries 104,781 |
101,837 |
| Taxes and contributions out of salaries 36,571 |
32,582 |
| Contributions on salaries 28,508 |
29,188 |
| Other staff costs 17,700 |
18,589 |
| ____ 187,560 |
____ 182,196 |
Other staff costs comprise per diems, overnight accommodation costs and business travel costs, costs of commutation and reimbursement of other business related costs.
| 2015 | 2014 | |
|---|---|---|
| Depreciation (Note 23) | ____ 54,489 |
____ 46,877 |
| Amortisation (Note 22) | 18,709 | 12,113 |
| ____ 73,198 |
____ 58,990 |
| 2015 | 2014 | |
|---|---|---|
| Transport | ____ 25,329 |
____ 23,911 |
| Know-how costs | 10,693 | 51 |
| Rental costs | 9,966 | 8,099 |
| Current and preventive maintenance of machinery | 5,847 | 3,236 |
| Municipal utility fees | 3,293 | 1,631 |
| Tool modification costs | 2,115 | 1,219 |
| Telecommunication and information system costs | 1,365 | 1,958 |
| Water supply | 1,261 | 1,090 |
| Forwarding and shipping costs | 551 | 672 |
| Other service costs | 12,282 | 24,342 |
| ____ 72,702 |
____ 66,209 |
| 2015 | 2014 | ||
|---|---|---|---|
| Temporary service costs - tools |
46,569 | 83,572 | |
| Professional service cost | 6,277 | 5,436 | |
| Customer complaints | 3,953 | 841 | |
| Net book value of disposed property, plant and equipment | 2,842 | 3,919 | |
| Insurance premiums | 2,165 | 3,024 | |
| Bank charges | 2,118 | 2,126 | |
| Payment operation charges | 1,902 | 1,457 | |
| Communal fees for the use of construction plots | 1,706 | 1,588 | |
| Cost of goods provided free of charge | 920 | 762 | |
| Entertainment and hospitality | 733 | 701 | STRATEGIC REPORT |
| Other fees (Supervisory Board) | 716 | 483 | |
| Professional training and literature | 638 | 618 | |
| Occupational Health and Safety service costs | 572 | 526 | |
| Other external expenses | 19,262 | 11,923 | B |
| 90,373 | 116,976 | ||
| Property tax | 2015 208 |
2014 1,472 |
CORPORATE GOVERNANCE |
| Other operating expenses | 18,662 ____ |
8,024 ____ |
|
| 18,870 | 9,496 | ||
| Other operating expenses consist mostly of damages paid, shortfalls and other extraordinary expenses. | C FINANCIAL STATEMENTS |
||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 133 |
| 2015 | 2014 | |
|---|---|---|
| Property tax Other operating expenses |
208 18,662 |
1,472 8,024 |
| ____ 18,870 |
____ 9,496 |
| 2015 | 2014 | |
|---|---|---|
| Provisions under actuarial calculations | ____ 3,483 |
____ 1,990 |
| Litigation provisions | 1,710 | 370 |
| Vacation accruals | - | 1,039 |
| Other provisions for risks and charges | 360 | 21 |
| ____ 5,553 |
____ 3,420 |
| ____ 121,454 |
____ |
|---|---|
| Other financial income 38 |
1,562 |
| Interest income 9,675 |
9,301 |
| ____ Foreign exchange gains 111,741 |
____ 30,540 |
| 2015 | 2014 |
| 2015 | 2014 | |
|---|---|---|
| Foreign exchange losses | ____ 123,634 |
____ 35,405 |
| Interest expense | 29,597 | 25,762 |
| Other financial expenses | - | 2,012 |
| ____ | ____ | |
| 153,231 | 63,179 |
| 2015 | 2014 | |
|---|---|---|
| Share in the profit of associates recognised as income |
47,392 | 40,227 |
| Share in the loss of associates recognised as an expense | (10,934) | (7,328) |
| 36,458 | 32,899 |
Income tax comprises the following:
| 2015 | 2014 | |
|---|---|---|
| Deferred tax Current tax |
___ 299 (439) |
___ (132) (12) |
| ___ (140) |
___ (144) |
Deferred tax, as presented in the statement of financial position, is as follows:
| 2015 | 2014 | ||
|---|---|---|---|
| Balance at 1 January Recognised deferred tax assets |
___ 15,568 6,831 |
___ (397) 15,955 |
STRATEGIC REPORT |
| Balance at 31 December |
___ 22,399 |
___ 15,568 |
|
| B | |||
| CORPORATE GOVERNANCE | |||
| C | |||
| FINANCIAL STATEMENTS | |||
| Your needs. Our drive. | |||
| ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 135 |
Deferred tax assets arise from the following:
| 2015. | Opening balance |
Charged to the state ment of comprehen sive income |
Closing bal ance |
|---|---|---|---|
| Temporary differences: | ___ | ___ | ___ |
| Provisions for long-service and termination benefits | 3,806 | 237 | 4,043 |
| Reserves from translation of foreign currencies, net | 24,766 | 1,854 | 26,619 |
| Movements in reserves on revaluation of property, plant and equipment and intangible fixed assets |
(13,004) | 4,741 | (8,263) |
| Balance at 31 December |
___ 15,568 |
___ 6,831 |
___ 22,399 |
| 2014. | Opening balance |
Credited to the state ment of comprehen sive income |
Closing bal ance |
| Temporary differences: | ___ | ___ | ___ |
| Provisions for long-service and termination benefits | 1,992 | 1,814 | 3,806 |
| Reserves from translation of foreign currencies, net | - | 24,766 | 24,766 |
| Movements in reserves on revaluation of tangible and intangible fixed assets |
(2,379) | (10,625) | (13,004) |
| Balance at 31 December |
___ (387) |
___ 15,955 |
___ 15,568 |
Reconciliation between the accounting and tax results is shown as follows:
| 2015 | 2014 | |
|---|---|---|
| Accounting profit before tax |
46,362 | 5,061 |
| Effect of tax base increasing items Effect of tax base decreasing items |
___ 6,330 (2,425) |
___ 7,554 (2,946) |
| Tax base |
___ 50,267 |
___ 9,669 |
| Tax at the weighted average rate Tax reliefs |
___ 5,322 (4,883) |
___ 2,663 (2,651) |
| Income tax expense |
___ 439 |
___ 12 |
| On 24 October 2012 the parent 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 Prod ucts", 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 40/2013). |
STRATEGIC REPORT | |||
|---|---|---|---|---|
| As a result, the parent company made investments in fixed assets in 2015, having thus met the prerequisites for the utilization of the tax incentives for 2015. |
B | |||
| The Tax Administration performed at the parent company a supervisory audit of the calculation, recognition, filing and payment of the value-added tax and corporate income tax in the period from 1 January to 31 Decem ber 2013. The audit was carried out at the business premises of the taxpayer and the Office for Large Taxpayers of the Tax Administration of the Republic of Croatia in the period from 27 October 2014 to 19 June 2015. |
||||
| On 19 June 2015, a 'no-objection' tax audit findings report was issued. | ||||
| 20. | Other comprehensive income | CORPORATE GOVERNANCE | ||
| 31.12.2015. | 31.12.2014. | |||
| Balance at beginning of the year |
___ (56,562) |
___ - |
C | |
| Exchange differences on translation of a foreign operation | ___ (9,269) |
___ (123,828) |
||
| Movements in reserves on revaluation of tangible and intangible fixed assets |
(23,704) | 53,125 | ||
| Income tax on exchange rate losses from translation of a foreign op eration and changes in the revaluation reserve |
6,594 | 14,141 | FINANCIAL STATEMENTS | |
| Balance at end of year |
(82.940) | (56,562) | ||
| Your needs. Our drive. | ||||
| ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 137 |
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 Group as treasury shares. The basic earnings per share equal the diluted earnings per share, as there are currently no share options that would potentially increase the number of issued shares.
| 2015 | 2014 | |
|---|---|---|
| Net profit attributable to the shareholders of the Group |
___ 46,222 |
___ 4,917 |
| Weighted average number of shares | 4,168 | 4,168 |
| Basic and diluted earnings per share (in kunas and lipas) |
___ 11.09 |
___ 1.18 |
| Licence | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| Balance at 31 December 2013 |
55 | 7,773 | 188,973 | 196,801 |
| Additions | - | 19 | 44,263 | 44,282 |
| Disposals and retirements | - | - | (1,136) | (1,136) |
| Balance at 31 December 2014 |
___ 55 |
___ 7,792 |
___ 232,100 |
___ 239,947 |
| Additions | - | 650 | 25,778 | 26,428 |
| Disposals and retirements | - | - | (8,499) | (8,499) |
| Balance at 31 December 2015 |
55 | 8,442 | 249,379 | 257,876 |
| ___ | ___ | ___ | ___ | |
| Accumulated amortisation |
||||
| Balance at 31 December 2013 |
___ - |
2,674 | 98,413 | 101,087 |
| Charge for the year | - | 1,610 | 10,503 | 12,113 |
| Disposals and retirements | - | - | - | - |
| Balance at 31 December 2014 |
___ - |
___ 4,284 |
___ 108,916 |
___ 113,200 |
| Charge for the year | ___ - |
___ 950 |
___ 17,759 |
___ 18,709 |
| Disposals and retirements | - | - | (13) | (13) |
| Balance at 31 December 2015 |
___ - _ |
____ 5,234 |
____ 126,662 |
____ 131,896 |
| ___ _ |
____ | ____ | ____ | |
| Net book value |
||||
| At 31 December 2015 |
55 | 3,208 | 122,717 | 125,980 |
| ___ | ___ | ___ | ___ |
| Land | Buildings | Plant and equipment |
Assets under construction |
Others | Total | |
|---|---|---|---|---|---|---|
| Cost | ||||||
| Balance at 31 December 2013 |
143,636 | 309,742 | 502,607 | 133,704 | 1,549 | 1,091,238 |
| Additions | - | 150 | - | 90,261 | 2,463 | 92,874 |
| Transfer from assets under development |
- | 4,468 | 126,173 | (130,641) | - | - |
| Disposals and retirements | (1,244) | (9,589) | (6,929) | - | - | (17,762) |
| Balance at 31 December 2014 |
142,392 | 304,771 | 621,851 | 93,324 | 4,012 | 1,166,350 |
| Additions | - | - | 31,852 | 27,130 | 1,335 | 60,317 |
| Transfer from assets under development |
- | 37,416 | 45,574 | (82,990) | - | - |
| Disposals and retirements | (1,259) | (11,076) | (61,468) | (3,392) | (147) | (77,342) |
| Balance at 31 December 2015 |
141,133 | 331,111 | 637,809 | 34,072 | 5,200 | 1,149,325 |
| Accumulated depreciation |
||||||
| Balance at 31 December 2013 |
- | 72,820 | 305,652 | - | 1,549 | 380,021 |
| Charge for the year 2014 | - | 5,848 | 39,934 | - | 1,095 | 46,877 |
| Disposals and retirements | - | - | (6,595) | - | - | (6,595) |
| Balance at 31 December 2014 |
- | 78,668 | 338,991 | - | 2,644 | 420,303 |
| Charge for the year 2015 | - | 4,139 | 50,072 | - | 278 | 54,489 |
| Disposals and retirements | - | - | (20,871) | - | - | (20,871) |
| Balance at 31 December 2015 |
- | 82,807 | 368,192 | - | 2,922 | 453,921 |
| Net book value |
||||||
| At 31 December 2015 |
141,133 | 248,304 | 269,617 | 34,072 | 2,278 | 695,404 |
| At 31 December 2014 |
142,392 | 226,103 | 282,860 | 93,324 | 1,368 | 746,047 |
At 31 December 2015, the net book value of tangible assets pledged as collateral with commercial banks amounts to HRK 360,948 (31 December 2014: HRK 392,904 thousand), and the outstanding balance of short-term and long-term borrowings secured by those assets is HRK 374,740 thousand (31 December 2014: HRK 352,110 thousand).
| ration and business 2015 2014 2015 2014 Manufacture of other Mioveni, EURO AUTO PLAS 50,00% 50,00% 86,481 81,732 motor vehicle spare TIC SYSTEMS Romania parts and accessories Manufacture of other Nanterre, FAURECIA ADP 40,00% 40,00% - 10,934 motor vehicle spare HOLDING France parts and accessories CENTAR ZA ISTRAŽIVANJE I Automotive industry Zagreb, 24,00 % - 27 - RAZVOJ AUTOMO research and devel Croatia BILSKE INDUS opment TRIJE STRATEGIC REPORT 86,508 92,666 Amount of New Amount of Country of Share in Name of associ equity investments equity incorporation the result for Dividends paid ate investment made during investment and business the year 2014 31.12.2013. the period 31.12.2014. Mioveni, EURO AUTO PLAS 82,492 40,227 - (40,987) 81,732 B TIC SYSTEMS Romania Nanterre, FAURECIA ADP 18,262 (7,328) - - 10,934 HOLDING France CORPORATE GOVERNANCE Total 100,754 32,899 - (40,987) 92,666 Amount of New Amount of Country of Share in Name of associ equity investments equity incorporation the result for Dividends paid ate investment made during investment and business the year 2015 31.12.2014. the period 31.12.2015. Mioveni, EURO AUTO PLAS 81,732 46,712 - 41,963 86,481 TIC SYSTEMS Romania C Nanterre, FAURECIA ADP 10,934 (10,934) - - - HOLDING France CENTAR ZA ISTRAŽIVANJE I Zagreb, FINANCIAL STATEMENTS - 3 24 - 27 RAZVOJ Croatia AUTOMOBILSKE INDUSTRIJE Total 92,666 35,781 24 41,963 86,508 Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP |
Name of associate | Principal activity | Country of incorpo | Ownership interest in % | Amount of equity investment, HRK'000 |
|
|---|---|---|---|---|---|---|
| 141 | ||||||
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Long-term loans to associates | ____ 37,735 |
____ 44,156 |
| Long-term loans to unrelated companies | 9,788 | 11,543 |
| Other financial assets | 62 | 64 |
| Current portion of long-term loan receivables | (1,500) | (3,137) |
| ____ 46,085 |
____ 52,626 |
Long-term loans have been provided to associated companies at an interest rate of 20.16 percent (2014: 12.79% – 20.34 %) and mature in 2017, whereas long-term loans to third parties have been provided at an interest rate of 6.00 percent (2014: 6.00 %), with the ultimate maturity in 2021.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Raw material and supplies on stock | ____ 65,039 |
____ 67,176 |
| Finished products | 18,576 | 18,787 |
| Merchandise on stock | 9,907 | 1,705 |
| Work in progress | 4,264 | 6,647 |
| ____ 97,786 |
____ 94,315 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign trade receivables | ____ 140,470 |
____ 206,143 |
| Domestic trade receivables |
6,662 | 9,835 |
| Impairment allowance on receivables | (3,388) | (8,569) |
| ____ 143,744 |
____ 207,409 |
The average credit period on sales is 69 days (2014: 72 days). The Group 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 Group seeks and obtains from its domestic customers debentures as collateral for receivables, which are issued in the amount of the receivables.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Revoz, Slovenia | 30,061 | 57,883 |
| OAO Avtovaz, Russia | 18,489 | 31,784 |
| Reydel Automotive France, France | 15,570 | 36,586 |
| Grupo Antolin, Czech Republic | 8,754 | 21,487 |
| FCA Melfi, Italy | 7,015 | 2,040 |
| Peugeot Citroen SA, France | 6,668 | 5,524 |
| EURO APS, Romania | 4,883 | 3,961 |
| Hella Saturnus, Slovenia | 6,160 | 6,779 |
| Renault, France | 6,063 | 2,130 |
| Smart Brabus GmbH, Germany | 4,228 | - |
| Ford Espana, Spain | 3,553 | 4,490 |
| Mandeks, Croatia | 2,281 | - |
| United Automobile Group, Russia | 2,187 | 2,646 |
| Ford Werke, Germany | 2,069 | 3,544 |
| FCA Poland S.A., Poland | 1,864 | - |
| Plastic Components and Modules, Italy | 1,681 | - |
| GM-Avtovaz, Russia | 1,470 | 1,858 |
| Nissan, Russia | 1,456 | 286 |
| Other debtors | 22,680 | 34,980 |
| Less: impairment allowance on trade receivables | (3,388) | (8,569) |
| 143,744 | 207,409 | |
Movements in the impairment allowance on doubtful trade receivables are presented as follows:
| 2015 | 2014 | |
|---|---|---|
| Balance at beginning of the year | ____ 7,417 |
____ 8,890 |
| Amounts collected or written-off during the year | (4,056) | (1,473) |
| Total impairment allowance on domestic trade receivables |
____ 3,361 |
____ 7,417 |
| Balance at beginning of the year | 1,152 | 1,271 |
| Amounts collected or written-off during the year | (1,125) | (119) |
| Total impairment allowance on foreign trade receivables |
____ 27 |
____ 1.152 |
| Total impairment allowance |
3,388 | 8,569 |
All receivables provided against are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Over 365 days | ____ 3,388 |
____ 8,569 |
| ____ 3,388 |
____ 8,569 |
Ageing analysis of receivables past due but not impaired:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| 0 – 365 days |
____ 19,430 |
____ 8,126 |
| Over 365 days | - | 1,254 |
| ____ 19,430 |
____ 9,380 |
Receivables from associated companies:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Trade receivables | 4,883 | 3,961 |
| 4,883 | 3,961 |
| Receivables from the State and state institutions institutions | 10,182 | 18,097 |
|---|---|---|
| Due from employees | 382 | 482 |
| Other receivables | 4,487 | 5,759 |
| ____ 34,209 |
____ 48,528 |
| Receivables from the State and state institutions institutions Due from employees Other receivables |
10,182 382 4,487 |
18,097 482 5,759 |
STRATEGIC REPORT | |
|---|---|---|---|---|
| ____ 34,209 |
____ 48,528 |
|||
| Amounts due from the State and state institutions comprise receivables from the State Budget in respect of VAT refund, refunds from the Croatian Health Insurance Fund and similar. Prepayments made comprise mainly prepayments for purchases of production equipment and tools. |
B | |||
| 29. | Current financial assets | |||
| 31.12.2015. | 31.12.2014. | |||
| ans Short-term loans Current portion of given long-term loans Deposits |
____ 2,259 1,500 2,357 |
__ 3,209 3,137 9,193 |
CORPORATE GOVERNANCE | |
| ____ | __ | |||
| Short-term loans to unrelated companies represent a loan given to Autocentar-Merkur d.d., Zagreb, with an in terest rate of 7.2 percent, which is due in the last quarter of 2016. |
6,116 | 15,539 | C | |
| Deposits relate to a of AO ADP/ZAO PHR for a term of six months and with an interest rate of 9.22 percent. | FINANCIAL STATEMENTS | |||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 145 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Current account balance | ____ 12,384 |
____ 7,806 |
| ____ 12,384 |
____ 7,806 |
Accrued income in the amount of HRK 31,739 thousand (31 December 2014: HRK 64,248 thousand) relates to the value of investment made in 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.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Other accrued income on tools | ____ 31,739 |
____ 64,248 |
| Prepaid expenses | 7,280 | 14,444 |
| Other accrued income | 6,171 | 6,597 |
| ____ 45,190 |
____ 85,289 |
Subscribed capital amounts to HRK 419,958 thousand and consists of 4,199,584 shares, with a nominal value of HRK 100.00 per share (2014: HRK 419,958 thousand; 4,199,584 shares, with a nominal value of HRK 100,00 each).
Shareholders holding over 2 percent of the shares at 31 December 2015 were as follows:
| Shareholder | Headquarters | Number of shares |
Ownership in % |
Type of account |
|
|---|---|---|---|---|---|
| OAO HOLDING AUTOKOMPONENTI | Saint Petersburg, Russia | 1,259,875 | 30.00% | Primary account |
|
| HYPO ALPE-ADRIA-BANK d.d. / RAIFFEISEN B-CATE GORY MANDATORY PENSION FUND |
Zagreb, Croatia | 269,462 | 6.42% | Pension fund |
|
| ADP-ESOP d.o.o. | Zagreb, Croatia | 212,776 | 5.07% | Primary account |
|
| HYPO ALPE-ADRIA-BANK d.d. / PBZ CROATIA OSIG URANJE B-CATEGORY MANDATORY PENSION FUND |
Zagreb, Croatia | 119,640 | 2.85% | Custody account |
|
| HRVATSKA POŠTANSKA BANKA D.D./ KAPITALNI FOND d.d. |
Zagreb, Croatia | 116,541 | 2.78% | Custody account |
STRATEGIC REPORT |
| SOCIETE GENERALE-SPLITSKA BANKA d.d. / ERSTE PLAVI B-CATEGORY MANDATORY PENSION FUND |
Split, Croatia | 115,353 | 2.75% | Pension fund |
|
| PBZ d.d. | Zagreb, Croatia | 111,366 | 2.65% | Custody account |
B |
| ERSTE & STEIERMARKISCHE BANK d.d. | Zagreb, Croatia | 105,349 | 2.51% | Custody account |
|
| SOCIETE GENERALE-SPLITSKA BANKA d.d. / AZ B CATEGORY MANDATORY PENSION FUND |
Split, Croatia | 93,900 | 2.24% | Pension fund |
|
| ZAGREBAČKA BANKA d.d. | Zagreb, Croatia | 86,777 | 2.07% | Custody account |
CORPORATE GOVERNANCE |
| Other shareholders | - | 1,708,545 | 40.66% | - | |
| Total: | 4,199,584 | 100.00% | |||
| C | |||||
| FINANCIAL STATEMENTS | |||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 147 |
| Short-term | Long-term | |||
|---|---|---|---|---|
| 31 December 2015 |
31 December 2014 |
31 December 2015 |
31 December 2014 |
|
| Jubilee awards (long-service benefits) | - | - | 1,759 | 1,302 |
| Retirement/termination benefits | - | - | 1,724 | 688 |
| Legal actions | 5,430 | 3,720 | - | - |
| Provisions for taxes | - | 51 | - | - |
| Vacation accrual | 2,631 | 3,197 | - | - |
| Other provisions | 546 | 638 | - | - |
| 8,607 | 7,606 | 3,483 | 1,990 |
Movement in provisions is presented as follows:
| Jubilee awards (long service benefits) |
Termina tion and retire ment benefits |
Legal actions |
Provi sions for taxes |
Vacation accrual |
Other provi sions |
Total | |
|---|---|---|---|---|---|---|---|
| At 1 January 2014 |
1,568 | 1,084 | 3,351 | 1,105 | 2,158 | 967 | 10,233 |
| Increase/(de crease) of provi sions |
(266) | (396) | 369 | (1,054) | 1,039 | (329) | (637) |
| At 31 December 2014 |
1,302 | 688 | 3,720 | 51 | 3,197 | 638 | 9,596 |
| Increase/(de crease) of provi sions |
457 | 1,036 | 1,710 | (51) | (566) | (92) | 2,494 |
| At 31 December 2015 |
___ 1,759 _ |
___ 1,724 _ |
___ 5,430 _ |
__ - |
___ 2,631 _ |
__ 546 |
___ 12,090 _ |
According to the Union Agreement, the Company has the obligation to pay long-service (jubilee awards), retirement and other benefits to its 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 3.65% and the rate of fluctuation of 3.96%. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 149STRATEGIC REPORT
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Long-term borrowings | ___ 340,517 |
____ 301,471 |
| Current portion of long-term borrowings (Note 37) | (77,925) | (89,127) |
| ___ 262,592 |
____ 212,344 |
|
| Long-term borrowings for purchase of machinery | 28,488 | 26,239 |
| ___ 291,080 |
____ 238,583 |
Long-term borrowings are mainly those realized through programs of HBOR and are used to finance capital investments and development projects. Instruments of collateral provided for the for long-term loans include mortgage on real estate and/or equipment and payment instruments. The existing long-term loans are ultimately repayable in the period 31 March 2016 – 31 December 2021.
In 2015, the weighted average interest rate on the long-term loans in 2015 was 4.40 percent.
The Group regularly meets all its obligations arising from the loans and observes all the conditions specified in the underlying contracts.
Movements in long-term borrowings during the year:
| 2015 | 2014 | |
|---|---|---|
| Balance at 1 January |
____ 212,344 |
____ 255,816 |
| New loans raised | 116,906 | 80,496 |
| Amounts repaid | (66,658) | (123,968) |
| Balance at 31 December |
____ 262,592 |
____ 212,344 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign customers | ____ 16,441 |
____ 57,224 |
| Domestic customers | 7,172 | - |
| ____ 23,613 |
____ 57,224 |
Advances received from foreign customers represent cash advanced from known customers for ordered tools.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign trade payables | ____ 99,987 |
____ 219,295 |
| Domestic trade payables | 80,524 | 51,130 |
| ____ 180,511 |
____ 270,425 |
Average payment period for trade payables during 2015 equaled to 95 days (2014: 85 days).
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Short-term loans - principal payable |
____ 84,108 |
____ 194,548 |
| Current portion of long-term borrowings (Note 34) | 77,925 | 89,127 |
| Short-term borrowings - interest payable |
1,067 | 1,668 |
| ____ 163,100 |
____ 285,343 |
| Short-term loans - principal payable |
____ 84,108 |
____ 194,548 |
STRATEGIC REPORT | |
|---|---|---|---|---|
| Current portion of long-term borrowings (Note 34) | 77,925 | 89,127 | ||
| Short-term borrowings - interest payable |
1,067 ____ |
1,668 ____ |
||
| 163,100 | 285,343 | |||
| The short-term borrowings were used to finance development projects and for working capital purposes. Instru ments of collateral provided for the short-term borrowings are payment instruments. The largest portion of the total short-term borrowings consists of revolving facilities and approved overdrafts on current accounts with the limits renewable on an annual basis. |
B | |||
| The short-term borrowings represent loans provided by commercial banks, with an average interest rate of 5.49 percent. |
||||
| 38. | Other current liabilities | CORPORATE GOVERNANCE | ||
| 31.12.2015. | 31.12.2014. | |||
| Due to the State and State institutions | ____ 15,042 |
____ 11,618 |
||
| Amounts due to employees | 9,899 | 10,174 | ||
| Liabilities in respect of the share in the result | 28 | - | C | |
| Other current liabilities | 1,654 | 6,796 | ||
| ____ 26,623 |
____ 28,588 |
|||
| FINANCIAL STATEMENTS | ||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 151 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Accrued tool expenses | ____ 15,400 |
____ 13,075 |
| Due to the State and State institutions | 29 | 256 |
| Other current liabilities | 2,191 | 339 |
| ____ 17,620 |
____ 13,670 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Goodwill | ____ 7,612 |
____ 8,908 |
| ____ 7,612 |
____ 8,908 |
Recognised goodwill relates to the difference between the net assets of KZA and the value paid for the purchase of KZA by ZAO AD Plastik Kaluga.
Pursuant to International Financial Reporting Standard 3 "Business Combinations", the Group has at 31 December 2013 recognized the business combination at provisional amounts because the fair values of identifiable assets, liabilities and contingent liabilities of the acquiree could be determined only provisionally. The Group acquired the control of the acquiree at 31 December 2013 and has completed the recognition of the business combination within 12 months of the acquisition. Due to that, the value of goodwill has been adjusted in the statement of financial position at December 31, 2013.
Goodwill trend in a year can be presented as follow:
| 2015 | 2014 | |
|---|---|---|
| At 1 January |
___ 8,908 |
__ 13,495 |
| FX differences | _ (1,296) |
__ (4,587) |
| At 31 December |
___ 7,612 |
__ 8,908 |
The total remuneration provided to the members of the Supervisory Board, the Management Board and executive directors in 2015 amounts to HRK 15,576 thousand (2014: HRK 14.350 thousand).
The Group's gearing ratio, expressed as the ratio of net debt to equity, is as follows:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Short-term borrowings | 163,100 | 285,343 |
| Long-term borrowings | 262,592 | 212,344 |
| Cash and cash equivalents | (12,384) | (7,806) |
| Net debt |
413,308 | 489,881 |
| Equity | 622,956 | 606,478 |
| Net debt-to-equity ratio |
66.35% | 80.77% |
| Net debt-to-equity ratio |
66.35% | 80.77% | |
|---|---|---|---|
| 42.2 | Categories of financial instruments | ||
| 31.12.2015. | 31.12.2014. | ||
| Financial assets |
|||
| Loans and receivables | 320,656 | 407,130 | |
| Cash and cash equivalents | 12,384 | 7,806 | |
| Financial liabilities |
|||
| Trade and other payables | 215,705 | 344,619 | |
| Borrowings | 425,692 | 497,687 | |
| At the reporting date there are no significant concentrations of credit risk for loans and receivables des ignated at fair value through the statement of comprehensive income. Excluded from the balance are amounts receivable from and payable to the state. |
|||
| 42.3 | Financial risk management objectives | ||
| 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 its exposure to currency risk on a part of the borrowings. |
effects of these risks. The Group uses hedging instruments to hedge | ||
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 six largest customers of the Group are Revoz, Slovenia; OAO Avtovaz, Russia; Reydel Automotive France; Grupo Antolin, Czech Republic; Hella Saturnus, Slovenia; and Peugeot Citroen Automobiles, France. Revenues generated by the sales to these business partners make up over 80 percent of the total sales. In 2015 the Company generated 62.20% percent of its sales from its major customer, Renault and its subsidiaries (2014: 64.52%).
It is the policy of the Company to transact with financially sound companies where the risk of default is minimised.
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.
| As at 31 |
Assets | Liabilities | Net FX |
position | ||
|---|---|---|---|---|---|---|
| December | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| EUR | 131,250 | 185,189 | 587,527 | 509,896 | (456,277) | (324,707) |
| RUR | 90,612 | 103,993 | 57,868 | 43,696 | 32,744 | 60,297 |
| RSD | 3,744 | 24,496 | - | 2,290 | 3,744 | 22,206 |
| USD | 356 | 649 | 1,029 | 792 | (673) | (143) |
| GBP | 3 | - | 239 | 157 | (236) | (157) |
| CHF | - | - | - | - | - | - |
| JPY | - | - | - | - | - | - |
| 225,965 | 314,327 | 646,663 | 556,831 | (420,698) | (242,504) | |
| Croatian kuna against the euro and a 10 percent change of the Croatian kuna against the Russian rouble | ||||||
| specified above. | in 2015 and 2014. The sensitivity analysis includes only outstanding foreign currency denominated mon etary items and their translation at the year-end. A negative figure below indicates a decrease in profit and a positive figure where the Croatian kuna changes against the relevant currency for the percentage |
Russian rouble (RUR). The following table details the Group's sensitivity to a 2 percent change of the | ||||
| EUR 2015 |
impact 2014 |
|||||
| Change in exchange differences (2%) | +/- 9.119 |
+/- | 4.445 | |||
| RUR | impact | |||||
| 2015 | 2014 | |||||
| Change in exchange differences (10%) | +/- 3.275 |
+/- | 6.166 |
| EUR | impact | |
|---|---|---|
| 2015 | 2014 | |
| Change in exchange differences (2%) | +/- 9.119 |
+/- 4.445 |
| RUR | impact | |
|---|---|---|
| 2015 | 2014 | |
| Change in exchange differences (10%) | +/- 3.275 |
+/- 6.166 |
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 | ||
|---|---|---|---|---|---|---|---|
| 2015 | Weighted average interest rate |
||||||
| Assets | |||||||
| Non-interest bearing |
65,184 | 74,935 | 41,952 | - | 86,508 | 268,579 | |
| Interest bearing | 9.48% | 41 | - | 4,887 | 65,435 | 1,709 | 72,072 |
| 65,225 | 74,935 | 46,839 | 65,435 | 88,217 | 340,651 | ||
| Liabilities | ___ | ___ | ___ | ___ | ___ | ___ | |
| Non-interest bearing |
4.62% | 84,468 | 81,151 | 46,535 | 3,551 | - | 215,705 |
| Interest bearing | 3,693 | 25,960 | 145,108 | 280,770 | 37,022 | 492,553 | |
| 88,161 | 107,111 | 191,643 | 284,321 | 37,022 | 708,258 | ||
| 2014 | |||||||
| Assets | |||||||
| Non-interest bearing |
21,293 | 41,741 | 191,071 | - | 92,666 | 346,741 | |
| Interest bearing | 11.56% | 225 | 11,780 | 9,471 | 51,871 | 2,368 | 75,715 |
| 21,518 | 53,521 | 200,542 | 51,871 | 95,034 | 422,486 | ||
| Liabilities | ___ | ___ | ___ | ___ | ___ | ___ | |
| Non-interest bearing |
38,726 | 19,713 | 237,927 | 48,253 | - | 344,619 | |
| Interest bearing | 6.48% | 5,557 | 52,697 | 248,139 | 201,674 | 44,861 | 552,928 |
| 44,283 | 72,410 | 486,066 | 249,927 | 44,861 | 897,547 |
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 the price quoted on a stock exchange or arrived at using the discounted cash flow method.
At 31 December 2015, the carrying amounts of cash, receivables, short-term liabilities, accrued expenses, short-term borrowings and other financial instruments approximate their fair values due to the shortterm maturity of these assets and liabilities.
An Extraordinary Meeting of the Shareholders of the parent company was held on 6 April 2016, at which a decision was adopted to distributed a dividend of HRK 4 per share out of the Company's retained (undistributed) earnings and other reserves from 2014. The dividends will be paid on 22 April 2016. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 157STRATEGIC REPORT
Based on the Management's estimate, the Group had no material contingent liabilities at 31 December 2015 which would require to be disclosed in the notes to the financial statements.
As at 31 December 2015 there were no material legal actions with a potential negative outcome for the Group other than those reflected in these financial statements.
These financial statements were approved by the Management Board of AD Plastik d.d. and authorised for issue on 23 April 2016.
For AD Plastik d.d., Solin:
Marinko Došen President of the Management Board
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Unconsolidated financial statements together with Independent Auditor's Report for the year ended 31 December 2015
Pursuant to the Accounting Act of the Republic of Croatia, the Management Board is responsible for ensuring that financial statements are prepared for each financial year in accordance with International Financial Reporting Standards ("the IFRSs"), as adopted in 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 period.
After making enquiries, the Management Board has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Management Board continues to adopt the going concern basis in preparing the financial statements.
In preparing those financial statements, the Management Board is responsible for:
The Management is responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time, the financial position of the Company and their compliance with the Croatian 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 159STRATEGIC REPORT
Signed on behalf of the Management Board by:
Marinko Došen President of the Management Board
AD Plastik d.d. Matoševa 8 21210 Solin Republic of Croatia
23 April 2016
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Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 161STRATEGIC REPORT
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| Notes | 2015 | 2014 | |
|---|---|---|---|
| Sales | 6 | 753,704 | 598,399 |
| Other income | 7 | 14,325 | 16,296 |
| Total income |
____ 768,029 |
____ 614,695 |
|
| (Decrease) / increase in the value of work in progress and | ____ | ||
| finished products | (3,256) | 3,573 | |
| Cost of raw material and supplies | 8 | (365,394) | (270,684) |
| Cost of goods sold | 9 | (56,203) | (53,247) |
| Service costs | 10 | (55,908) | (44,176) |
| Staff costs | 11 | (133,677) | (112,557) |
| Depreciation and amortisation | 12 | (42,878) | (33,301) |
| Other operating expenses | 13 | (76,394) | (82,418) |
| Provisions for risks and charges | 14 | (5,194) | (3,399) |
| Impairment of non-current financial assets | 15 | (30,220) | (36,777) |
| Total operating expenses |
____ (769,124) |
____ (632,986) |
|
| Profit from operations |
____ (1,095) |
____ (18,291) |
|
| Financial income | 16 | ____ 65,388 |
____ 64,007 |
| Financial expenses | 17 | (32,041) | (32,848) |
| Financial income |
____ 33,347 |
____ 31,159 |
|
| Profit before taxation |
____ 32,252 |
____ 12,868 |
|
| Income tax expense | 18 | ____ 299 |
____ (144) |
| Profit for the year |
____ 32,551 |
____ 12,724 |
|
| Items that may be included subsequently in profit or loss: |
____ | ____ | |
| Exchange differences on translation of a foreign operation, net |
19 | ____ (12,273) |
____ (32,707) |
| Total comprehensive income / (loss) for the year |
20,278 | (19,983) | |
| Earnings per share | ____ | ____ | |
| Basic and diluted earnings per share (in kunas and lipas) | 20 | 7,81 | 3,05 |
At 31 December 2015 (All amounts are expressed in thousands of kunas)
| Notes | 31.12.2015 | 31.12.2014 | |
|---|---|---|---|
| ASSETS | |||
| Non-current assets |
|||
| Intangible assets | 21 | 99,186 | 95,025 |
| Property, plant and equipment | 22 | 511,442 | 518,082 |
| Investments in subsidiaries and associates | 23 | 66,155 | 96,352 |
| Other financial assets | 24 | 121,108 | 135,830 |
| Long-term receivables | 25 | 212,619 | 193,060 |
| Deferred tax assets | 18 | 11,968 | 8,575 |
| Total non-current assets |
____ 1,022,478 |
____ 1,046,924 |
|
| Current assets |
_ _ |
||
| Inventories | 26 | 50,539 | 56,882 |
| Trade receivables | 27 | 117,553 | 175,094 |
| Other receivables | 28 | 24,716 | 33,978 |
| Current financial assets | 29 | 17,569 | 18,856 |
| Cash and cash equivalents | 30 | 3,414 | 1,801 |
| Prepaid expenses and accrued income | 31 | 36,922 | 62,507 |
| Total current assets |
____ 250,713 |
____ 349,118 |
|
| TOTAL ASSETS |
____ 1,273,191 |
____ 1,396,042 |
|
| The accompanying accounting policies and notes form an integral part of these unconsolidated financial statements. | |||
At 31 December 2015 (All amounts are expressed in thousands of kunas)
| Notes | 31.12.2015. | 31.12.2014. | |
|---|---|---|---|
| Equity | |||
| Share capital | 32 | 419,958 | 419,958 |
| Reserves | 192,463 | 192,627 | |
| Profit for the year | 32,551 | 12,724 | |
| Total capital employed |
____ 644,972 |
____ 625,309 |
|
| Long-term provisions | 33 | ____ 3,483 |
____ 1,990 |
| Long-term borrowings | 34 | 265,343 | 201,208 |
| Total non-current liabilities |
____ 268,826 |
____ 203,198 |
|
| Advances received | 35 | ____ 10,805 |
____ 55,988 |
| Trade payables | 36 | 163,556 | 223,828 |
| Short-term borrowings | 37 | 147,381 | 258,000 |
| Other current liabilities | 38 | 14,302 | 12,525 |
| Short-term provisions | 33 | 8,062 | 6,917 |
| Accrued expenses and deferred income | 39 | 15,287 | 10,277 |
| Total current liabilities |
____ 359,393 |
____ 567,535 |
|
| Total liabilities |
____ 628,219 |
____ 770,733 |
|
| TOTAL EQUITY AND LIABILITIES |
____ 1,273,191 |
____ 1,396,042 |
| Unconsolidated statement of changes in shareholders' equity For the year ended 31 December 2015 |
(All amounts are expressed in thousands of kunas) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Share capital | Capital reserves |
Legal reserve | General reserves |
Revaluation reserve (arisen on privatisation) |
Reserve from revaluation of non-current tangible assets |
Reserve from revaluation of non-current receivables |
Reserves for own shares |
Treasury shares |
Retained earnings |
Total | ||
| December 2013 - Balance at 31 as restated |
419,958 | 183,076 | 6,129 | 15,472 | 8,490 | 1,696 | - | 4,753 | (4,753) | 42,520 | 677,341 | |
| Dividends paid | - | - | - | - | - | - | - | - | - | (33,343) | (33,343) | |
| part of 2013 profit Allocation of a |
- | - | - | 9,177 | - | - | - | - | - | (9,177) | - | |
| Valuation of own shares |
- | - | - | - | - | - | - | (1,808) | 1,808 | - | - | |
| Sale of own shares | - | - | - | 1,273 | - | - | - | - | - | - | 1,273 | |
| Profit for the year | - | - | - | - | - | - | - | - | - | 12,724 | 12,724 | |
| Comprehensive loss for the year |
- | - | - | - | - | - | (32,686) | - | - | - | (32,686) | |
| December 2014 Balance at 31 |
419,958 | 183,076 | 6,129 | 25,922 | 8,490 | 1,696 | (32,686) | 2,945 | (2,945) | 12,724 | 625,309 | |
| 165 | FINANCIAL STATEMENTS | C | CORPORATE GOVERNANCE | B | STRATEGIC REPORT | A | ||||||
Unconsolidated statement of changes in shareholders' equity (continued) For the year ended 31 December 2015 (All amounts are expressed in thousands of kunas)
| Share capital | Capital reserves |
Legal reserve | General reserves |
Revaluation reserve (arisen on privatisation) |
Reserve from revaluation of non-current tangible assets |
Reserve from revaluation of non-current receivables |
Reserves for own shares |
Treasury shares |
Retained earnings |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 2014 Balance at 31 |
419,958 | 183,076 | 6,129 | 25,922 | 8,490 | 1,696 | (32,686) | 2,945 | (2,945) | 12,724 | 625,309 |
| Correction of reserves general |
- | - | - | (56) | - | - | - | - | - | - | (56) |
| Allocation of a part of 2014 profit |
- | - | - | - | - | - | - | - | - | - | - |
| Valuation of own shares |
- | - | - | - | - | - | - | 162 | (162) | - | - |
| own (treasury) Purchase of shares |
- | - | - | (456) | - | - | - | - | - | - | (456) |
| Profit for the year |
- | - | - | - | - | - | - | - | - | 32,551 | 32,551 |
| Comprehensive loss for the year |
- | - | - | - | - | - | (12,376) | - | - | - | (12,376) |
| December 2015 Balance at 31 |
419,958 | 183,076 | 6,129 | 25,410 | 8,490 | 1,696 | (45,062) | 3,107 | (3,107) | 45,275 | 644,972 |
For the year ended 31 December 2015 (All amounts are expressed in thousands of kunas)
| Cash flows from operating activities |
2015. | 2014. | |
|---|---|---|---|
| Profit for the year |
____ 32,551 |
____ 12,724 |
|
| Adjusted by: Income tax expense |
(299) | 144 | |
| Depreciation and amortisation | 42,878 | 33,301 | |
| Value adjustment of investments in subsidiaries and associates | 30,220 | 37,113 | |
| Net book value of retired property, plant and equipment | 6,698 | 333 | |
| Net book value of retired intangible assets |
5,338 | - | |
| Interest expense | 23,534 | 20,692 | |
| Interest income | (14,368) | (14,307) | |
| Increase in long-term and short-term provisions | 2,638 | 746 | |
| Profit from operations before working capital changes |
____ 129,190 |
____ 90,746 |
|
| Decrease/(increase) in inventories | ____ 6,343 |
____ (19,531) |
STRATEGIC REPORT |
| Decrease/(increase) in current and non-current trade receivables | 34,216 | (128,063) | |
| Decrease in other receivables | 10,651 | 26,057 | |
| (Decrease)/increase in trade payables | (60,272) | 116,133 | |
| Decrease of advances received | (45,183) | (21,530) | B |
| Increase/(decrease) in other current liabilities | 2,131 | (35) | |
| Increase/(decrease) in accrued expenses and deferred income | 5,010 | (8,056) | |
| Decrease in accrued income and prepaid expenses | 25,585 | 56,596 | |
| Interest paid | (23,944) | (20,657) | |
| Cash flows from operating activities |
83,727 | 91,660 | CORPORATE GOVERNANCE |
| New investments in subsidiaries and associates | (23) | - | |
| Interest received | 1,275 | 5,788 | |
| Purchases of property, plant and equipment | (28,462) | (43,056) | |
| Purchases of intangible assets | (23,973) | (44,283) | |
| Long-term loans | - | (37,936) | C |
| Proceeds from given long-term and short-term loans | 16,437 | - | |
| Increase in deposits | (428) | - | |
| Cash used in investing activities |
(35,174) | (119,487) | |
| FINANCIAL STATEMENTS | |||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 167 |
| Cash flows from financing activities |
2015. | 2014. |
|---|---|---|
| (Purchase)/sale of treasury shares | (456) | 1,273 |
| Dividends paid | - | (33,343) |
| Proceeds from long-term borrowings | 116,906 | 75,941 |
| Proceeds from short-term borrowings | 63,631 | 136,656 |
| Repayment of short-term borrowings | (174,250) | (85,981) |
| Repayment of long-term borrowings | (52,771) | (79,449) |
| Cash (used in)/generated from financing activities |
(46,940) | 15,097 |
| Increase/(decrease) in cash and cash equivalents, net |
1,613 | (12,730) |
| Cash and cash equivalents at the beginning of the year |
1,801 | 14,531 |
| Cash and cash equivalents at the end of the year |
3,414 | 1,801 |
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 September 2007, the increase of the share capital by HRK 125,987,500., 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 and consists of 4,199,584 shares, with a nominal amount of HRK 100,00 each. Under 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 169STRATEGIC REPORT
The Company have been included in the listing of public limited companies on the Official Market of the Zagreb Stock Exchange since 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:
At 31 December 2015, the number of staff employed was 1,203 (31 December 2014: 1,283).
| Mandate | ||
|---|---|---|
| Members of the Supervisory Board: |
||
| Josip Boban (President) | From 19.07.2012 | to 19.07. 2016 |
| Nikola Zovko (Vice President) | From 19.07.2012 | to 19.07. 2016 |
| Dolores Čerina | From 02.06.2015 | to 02.06.2019 |
| Marijo Grgurinović | From 23.07.2015 | to 23.07.2019 |
| Solomatin Igor Anatoljevič | From 23.07.2015 | to 23.07.2019 |
| Drandin Dmitrij Leonidovič | From 19.10.2015 | to 19.10.2019 |
| Nikitina Nadežda Anatoljevna | From 19.10.2015 | to 19.10.2019 |
| The members of the Company's Management Board are |
as follows: |
|
| Marinko Došen (President) | From 06.02.2015 | to 19.07.2016 |
| Ivica Tolić | From 19.07.2012 | to 19.07.2016 |
| Katija Klepo | From 19.07.2012 | to 19.07.2016 |
| Mladen Peroš | From 06.02.2015 | to 19.07.2016 |
| Denis Fusek | From 26.09.2013 | to 19.07.2016 |
| Hrvoje Jurišić | From 26.09.2013 | to 19.07.2016 |
The following amendments to the existing standards and new interpretation issued by the International Accounting Standards Board (IASB) and adopted by the EU are effective for current financial period:
The adoption of the amended and revised Standards and Interpretations has not lead to any material changes in the Company's financial statements.
At the date of authorisation of these financial statements the following standards, amendments to the existing standards and interpretations issued by IASB and adopted by the EU were in issue but not yet effective:
Amendments to the existing standards issued by IASB and adopted by the European Union, but not yet effective (continued)
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At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board ('IASB') except from the following standards, amendments to the existing standards and interpretations, which were not endorsed for use in EU as at 23 April 2016 (the effective dates stated below are for IFRS in full):
The Management Board anticipates the adoption of these standards and interpretations in the financial statements of the Company in the periods in which they become effective, but without any material impact on the financial statements in the period of initial application.
FINANCIAL STATEMENTS
Set out below are the principal accounting policies consistently applied in the preparation of the financial statements for the current and prior years.
The financial statements are prepared in accordance with the Accounting Act of the Republic of Croatia and International Financial Reporting Standards ('IFRS') adopted by the European Union.
The Company maintains its accounting records in the Croatian language, in Croatian Kuna and in accordance with Croatian laws and the accounting principles observed by enterprises in Croatia.
The preparation of the financial statements in accordance with the Accounting Act of the Republic of Croatia and International Financial Reporting Standards ('IFRSs') 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 2015, and the results of operations for the year then ended. The consolidated financial statements AD Plastik d.d. and its subsidiaries for the year ended 31 December 2015 were issued on 23 April 2016.
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 of 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. Details of the investments in subsidiaries and associates are presented in Note 23.
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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. The Company recognises revenue when the amount of the revenue can be measured reliably and when it is probable that future economic benefits will flow into the Company.
Product sales are recognized when the products are delivered to, and accepted by the customer and when the significant risks and rewards associated with the ownership of a product are transferred to the customer.
Accrued revenues are matched with contracts that are specifically concluded for developing an asset, or a group of assets, closely linked and interdependent on the design, technology and function, or their final use or application. The Company is required to recognize revenue according to the stage of completion of a contractual performance. Pursuant to IAS 11, when the outcome of a production contract can be estimated reliably, the revenue and costs associated with the contract should be recognized according to the stage of completion of the contractual performance at the date of the statement of financial position. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 175STRATEGIC REPORT
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 receivables 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 the assets are substantially ready for their intended use or sale.
Investment income earned on a 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.
FINANCIAL STATEMENTS
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 2015, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7,635047 (31 December 2014: HRK 7,661471 for EUR 1).
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognised in the statement of comprehensive income, 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 rates enacted at the date of the statement of financial position, adjusted by appropriate prior-period tax liabilities.
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 rate expected to apply to taxable profit in the period in which the liability is expected to be settled or the asset realised, based on the tax rates in effect at the date of the statement of financial position.
The measurement of deferred tax liabilities and assets reflects the amount that the Company expects, at the date of the statement of financial position, to recover or settle the carrying amounts of its assets and liabilities.
Deferred tax assets and liabilities are not discounted and are classified in the statement of financial position 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 date of the statement of financial position, 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.
Property, plant and equipment as well as intangible assets are recognised at purchase cost and subsequently reduced by accumulated depreciation/amortisation. The purchase cost comprises the purchase price, import duties and non-refundable sales taxes (for tangible assets) and any directly attributable costs of bringing an asset to its working condition and location for its intended use, such as employee remuneration, professional fees directly arising from putting an asset into its working condition, test costs (for intangible assets), as well as all other costs directly attributable to brining an asset to a condition 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 an increase of expected future economic benefits to be derived from the use of an item of property, plant and equipment 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 property, plant and equipment or intangible assets are included in the statement of comprehensive income in the period in which 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 other than land, property, plant and equipment and intangible assets under development over the estimated useful life of the asset using the straight-line method as follows:
| of property, plant and equipment or intangible assets are included in the statement of comprehensive income in the period in which 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 other than land, property, plant and equipment and intangible assets under development over the estimated useful life of the asset using the straight-line method as follows: |
STRATEGIC REPORT | ||
|---|---|---|---|
| Depreciation rates in 2015 | Depreciation rates in 2014 | B | |
| Property, plant and equipment, and intangible assets |
|||
| Buildings | 1,50 | 1,50 | |
| Machinery | 7,00 | 7,00 | |
| Tools, furniture, office and laboratory equipment and accessories, measuring and control instruments |
10,00 | 10,00 | CORPORATE GOVERNANCE |
| Vehicles | 20,00 | 20,00 | |
| IT equipment | 20,00 | 20,00 | |
| Others | 10,00 | 10,00 | C |
| Projects | 20,00 | 20,00 | |
| FINANCIAL STATEMENTS | |||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 177 |
At each reporting date the Company reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is an indication that the assets have suffered an impairment loss. 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 cashgenerating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, The Company's assets are also allocated to individual cash-generating units or, it this is not possible, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
A subsidiary is an entity over which the Company has effective control over financial and operating policy decisions of the Company. The results, assets and liabilities of subsidiaries are incorporated in these financial statements using the equity method of accounting.
An associate is an entity over which the Company has significant influence and an ownership interest from 20 to 50 percent, but no control over the entity. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but it is not control or joint control over those policies. The results of operations of associates are incorporated in these financial statements using the equity method 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.
Small inventory is written off when put in use.
The cost of product inventories, i.e. the production price 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 estimated irrecoverable amounts.
Impairment is made whenever there is objective evidence that the Company will not be able to collect all amounts due according to the originally agreed terms. 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.
Management determines the level of impairment allowance for doubtful receivables based on a specific review of the recoverability of amounts owed by strategic customers of the ADP Group and of the overall ageing of other current receivables. 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 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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 179STRATEGIC REPORT
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 recognised as salary expense when accrued. 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. Actuarial 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 accounting policies.
Investments are recognized and derecognized 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. They are initially measured at fair value, net of transaction costs, except for those financial assets classified as at fair value through profit or loss in the statement of comprehensive income.
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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 181STRATEGIC REPORT
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.
An entity may have a monetary item as an amount receivable from, or payable to a foreign entity. An item neither planned to be settled nor likely to arise in the foreseeable future is essentially part of the entity's net investment in a foreign operation and accounted for in accordance with IAS 21. The Company recognizes foreign exchange differences arising from monetary items that are part of the net foreign investment initially in other comprehensive income and accumulates under a separate component of equity - revaluation reserves.
On disposal of a net investment in a foreign operation, the entire balance of exchange differences is transferred from equity to profit or loss.
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-yearend events that are not adjusting events are disclosed in the notes when material.
Company keeps records and publishes business results for its basic business segments. Segments divided according to geographical position are the basis for segment reporting. Certain financial information for each geographical position are presented in Note 5. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 183STRATEGIC REPORT
Company presents its revenue according to geographical position, but it does not keep records information about non-current assets and revenue from external buyers generated in those areas.
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 judgement is required, which are based on the probable quantification of time and level of future taxable profits, together with the future tax planning strategy. In 2015, deferred tax assets were recognised in respect of available tax differences.
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.
Segment revenue analysis by country:
| 2015. | 2014. | |
|---|---|---|
| Slovenia | 432,542 | 269,934 |
| France | 106,456 | 56,606 |
| Germany | 52,304 | 121,469 |
| Russia | 21,430 | 80,149 |
| Italy | 20,601 | 2,943 |
| Spain | 15,239 | 7,404 |
| Romania | 12,537 | 12,147 |
| Czech Republic | 8,590 | 26,524 |
| Others | 84,005 | 21,223 |
| 753,704 | 598,399 |
| 2015. | 2014. | |
|---|---|---|
| Foreign sales | 747,747 | 588,846 |
| Domestic sales | 5,957 | 9,553 |
| 753,704 | 598,399 |
| Czech Republic | 8,590 | 26,524 | STRATEGIC REPORT | |
|---|---|---|---|---|
| Others | 84,005 | 21,223 | ||
| 753,704 | 598,399 | |||
| 6. | Sales | |||
| 2015. | 2014. | B | ||
| Foreign sales Domestic sales |
747,747 5,957 |
588,846 9,553 |
||
| 753,704 | 598,399 | |||
| 7. | Other income | CORPORATE GOVERNANCE | ||
| 2015. | 2014. | |||
| Income from co-financing Income from consumption of own products, goods and services Income from bonuses provided by suppliers |
3,774 1,773 1,447 |
1,095 1,377 2,222 |
C | |
| Income from reversal of provisions for long-service benefits | 1,302 | 1,568 | ||
| Income from reversal of retirement benefit provisions Income from reversal of unused vacation days accruals, net Income from damages collected |
688 567 15 |
1,084 - 622 |
FINANCIAL STATEMENTS | |
| Other operating income | 4,759 | 8,328 | ||
| 14,325 | 16,296 | |||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 185 |
| 2015. | 2014. | |
|---|---|---|
| Direct materials | 153,782 | 133,091 |
| Indirect materials | 167,753 | 107,312 |
| Electricity | 14,182 | 13,699 |
| Direct packaging | 12,479 | 10,216 |
| Preventive maintenance of machinery | 2,630 | 1,817 |
| Gas for heating in the production process | 1,655 | 1,604 |
| Other materials | 1,442 | 1,191 |
| Regular maintenance of machinery | 975 | 1,115 |
| Other raw material and supplies | 10,496 | 639 |
| ____ 365,394 |
____ 270,684 |
Cost of goods sold in the amount of HRK 56,203 thousand (2014: HRK 53,247 thousand) relate mainly to the purchase cost of tools, equipment and intermediary products for the start-up of new production and projects in subsidiaries.
| 2015. | 2014. | |
|---|---|---|
| Cost of merchandise | 31,871 | 15,182 |
| Cost of materials sold | 16,916 | 15,214 |
| Re-export costs | 6,661 | 21,789 |
| Cost of spare parts sold | 728 | 982 |
| Other costs of goods sold | 27 | 80 |
| ____ 56,203 |
____ 53,247 |
| 2015. | 2014. | |
|---|---|---|
| Transport | 29,722 | 26,306 |
| Rental costs |
8,236 | 5,963 |
| Current maintenance and servicing costs - machinery and tools |
3,741 | 3,041 |
| Know-how costs | 3,187 | 51 |
| Tool modification costs | 2,115 | 1,219 |
| Regular and preventive maintenance costs - buildings |
1,108 | 849 |
| Communal fees | 1,012 | 1,000 |
| Telecommunication and information system costs | 938 | 1,104 |
| Water supply | 871 | 678 |
| Forwarding and shipping costs | 135 | 575 |
| Other service costs | 4,843 | 3,390 |
| 55,908 | 44,176 |
| Water supply | 871 | 678 | STRATEGIC REPORT | |
|---|---|---|---|---|
| Forwarding and shipping costs | 135 | 575 | ||
| Other service costs | 4,843 | 3,390 | ||
| 55,908 | 44,176 | |||
| 11. | Staff costs | B | ||
| 2015. | 2014. | |||
| Net wages and salaries | 71,720 | 58,763 | ||
| Taxes and contributions out of salaries | 29,883 | 24,484 | ||
| Contributions on salaries | 17,930 | 14,691 | ||
| Other staff costs | 14,144 | 14,619 | ||
| ____ 133,677 |
____ 112,557 |
CORPORATE GOVERNANCE | ||
| Other staff costs comprise per diems, overnight accommodation costs and business travel costs, costs of commutation and reimbursement of other business related costs. |
C | |||
| 12. | Depreciation and amortisation | |||
| 2015. | 2014. | |||
| Depreciation (Note 22) | ____ 28,404 |
____ 25,225 |
||
| Amortisation (Note 21) | 14,474 | 8,076 | ||
| ____ 42,878 |
____ 33,301 |
|||
| FINANCIAL STATEMENTS | ||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 187 |
| 2015. | 2014. | |
|---|---|---|
| Depreciation (Note 22) | ____ 28,404 |
____ 25,225 |
| Amortisation (Note 21) | 14,474 | 8,076 |
| ____ 42,878 |
____ 33,301 |
| 2015. | 2014. | |
|---|---|---|
| Temporary and occasional service costs - tools |
41,672 | 55,217 |
| Professional service cost | 6,295 | 4,038 |
| Other non-material costs | 5,323 | 3,492 |
| Customer complaints | 3,518 | 841 |
| Bank and payment operation charges | 2,787 | 2,502 |
| Net book value of tangible and intangible fixed assets | 2,555 | 3,919 |
| Insurance premiums | 1,834 | 1,537 |
| Communal fees for the use of construction plots | 1,561 | 1,526 |
| Cost of goods provided free of charge | 920 | 762 |
| Professional training costs | 531 | 360 |
| Entertainment and hospitality | 524 | 552 |
| Measuring equipment and laboratory tests | 518 | 317 |
| Support to employees and their families | 233 | 124 |
| Forest reproduction levies | 209 | 169 |
| Water management fee | 171 | 161 |
| Gifts, donations and sponsorships of up to 2 % of prior-period revenue | 150 | 235 |
| Other expenses | 7,593 | 6,666 |
| 76,394 | 82,418 |
| 2015. | 2014. | |
|---|---|---|
| Provisions for long-service and retirement benefits | 3,483 | 1,990 |
| Litigation provision (net) | 1,711 | 370 |
| Vacation accruals, net | - | 1,039 |
| ____ 5,194 |
____ 3,399 |
The Company, based on impairment indicators, recognised impairment of its investment in FADP in the amount of HRK 30,220 thousand (2014: HRK 36,777 thousand in respect of ADP Kaluga) based on the related discounted cash flows of the financial assets. As a result, the carrying amount of the investment in FADP Holding amounts to nil.
| ____ 65,388 |
____ 64,007 |
|
|---|---|---|
| Other financial income | 1 | 729 |
| Foreign exchange gains | 9,050 | 7,973 |
| Interest income | 14,368 | 14,307 |
| Dividend income | ____ 41,969 |
____ 40,998 |
| 2015. | 2014. |
| Other financial income | 1 | 729 | ||
|---|---|---|---|---|
| ____ 65,388 |
____ 64,007 |
|||
| The dividends consist mainly of dividends received from associate EURO APS, Romania, in the amount of HRK 41,963 thousand (2014: HRK 40,987 thousand). |
STRATEGIC REPORT | |||
| 17. | Finance costs | B | ||
| 2015. | 2014. | |||
| Interest expense Foreign exchange losses Other financial expenses |
_ 23,534 8,507 - _ |
_ 20,692 11,773 383 _ |
CORPORATE GOVERNANCE | |
| 32,041 | 32,848 | C | ||
| FINANCIAL STATEMENTS | ||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 189 |
Income tax comprises the following:
| 2015. | 2014. | |
|---|---|---|
| Deferred tax Current tax |
___ 299 - |
___ (132) (12) |
| ___ 299 |
___ (144) |
Deferred tax, as presented in the statement of financial position, is as follows:
| 2015. | 2014. | |
|---|---|---|
| Balance at 1 January | ___ 8,575 |
___ 530 |
| Deferred tax assets recognised | 3,393 | 8,045 |
| Balance at 31 December |
___ 11,968 |
___ 8,575 |
Deferred tax assets arise from the following:
| 2015. | Opening balance |
Credited / (charged) to statement of comprehensive income |
Closing balance |
|---|---|---|---|
| Temporary differences: | ___ | ___ | ___ |
| Provisions for long-service and termination benefits | 398 | 299 | 697 |
| Reserves from translation of foreign currencies, net | 8,177 | 3,068 | 11,245 |
| Reclassification adjustment in respect of gains on translation of a foreign operation |
- | 26 | 26 |
| Balance at 31 December |
___ 8,575 |
___ 3,393 |
___ 11,968 |
| 2014. | Opening balance |
Credited / (charged) to statement of comprehensive |
Closing balance |
| income | |||
|---|---|---|---|
| Temporary differences: | ___ | ___ | ___ |
| Provisions for long-service and termination benefits | 530 | (132) | 398 |
| Reserves from translation of foreign currencies, net | - | 8,177 | 8,177 |
| Balance at 31 December |
___ 530 |
___ 8,045 |
___ 8,575 |
Reconciliation between the accounting and tax results is shown as follows:
| 2015. | 2014. | |
|---|---|---|
| Accounting profit before tax |
32,252 | 12,868 |
| Effect of tax base increasing items Effect of tax base decreasing items |
___ 36,552 (44,394) |
___ 44,331 (43,944) |
| Tax base |
___ 24,410 |
___ 13,255 |
| Tax at the rate of 20% Tax reliefs |
___ 4,882 (4,882) |
___ 2,651 (2,639) |
| Income tax expense | ___ - |
___ 12 |
The income tax rate effective in the Republic of Croatia for the years 2015 and 2014 was 20 percent.
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 40/2013).
As a result, the Company made investments in fixed assets in 2015, having thus met the prerequisites for the utilization of the tax incentives for 2015.
The Tax Administration performed a supervisory audit of the calculation, recognition, filing and payment of the value-added tax and corporate income tax in the period from 1 January to 31 December 2013. The audit was carried out at the business premises of the taxpayer and the Office for Large Taxpayers of the Tax Administration in the period from 27 October 2014 to 19 June 2015. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 191STRATEGIC REPORT
On 19 June 2015, a 'no-objection' tax audit findings report was issued.
Pursuant to the tax regulations, the tax authorities may at any time inspect the Company's books and records within three years subsequent to the year in which the tax liability is reported and may impose additional tax assessments and penalties. The Company's management is not aware of any circumstances which may give rise to a potential material liability in this respect.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Balance at beginning of the year | ___ (32,686) |
___ - |
| Exchange differences on translation of a foreign operation | ___ (15,341) |
___ (40,884) |
| Income tax on exchange rate losses from translation of a foreign operation |
3,068 | 8,177 |
| Exchange differences on translation of a foreign operation, net | ___ (12,273) |
___ (32,707) |
| Reclassification adjustment for (losses)/gains fromm translation of a foreign operation recognised in profit or loss |
(103) | 21 |
| Balance at end of year |
___ (45,062) |
___ (32,686) |
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. The basic earnings per share equal the diluted earnings per share, as there are currently no share options that would potentially increase the number of issued shares.
| 2015. | 2014. | |
|---|---|---|
| Net profit attributable to the shareholders (in HRK'000) Weighted average number of shares |
___ 32,551 4,167,822 |
___ 12,724 4,167,822 |
| Basic and diluted earnings per share (in kunas and lipas) |
___ 7,81 |
___ 3,05 |
| Licences | Software | Projects | Total | ||
|---|---|---|---|---|---|
| Cost | |||||
| Balance at 31 December 2013 |
55 | 5,424 | 126,753 | 132,232 | |
| Additions | - | 19 | 44,264 | 44,283 | |
| Balance at 31 December 2014 |
55 | 5,443 | 171,017 | 176,515 | |
| Additions | ___ - |
___ 205 |
___ 23,768 |
___ 23,973 |
|
| Disposals and retirements | (5,351) | (5,351) | |||
| Balance at 31 December 2015 |
___ 55 _ |
____ 5,648 |
____ 189,434 |
____ 195,137 |
|
| Accumulated amortisation |
___ _ |
____ | ____ | ____ | STRATEGIC REPORT |
| Balance at 31 December 2013 |
___ - |
1,802 | 71,612 | 73,414 | |
| Charge for the year (Note 12) |
- | 1,610 | 6,466 | 8,076 | |
| Balance at 31 December 2014 |
- | 3,412 | 78,078 | 81,490 | |
| Charge for the year (Note 12) | ___ - |
___ 888 |
___ 13,586 |
___ 14,474 |
B |
| Disposals and retirements | (13) | (13) | |||
| Balance at 31 December 2015 |
___ - _ |
____ 4,300 |
____ 91,651 |
____ 95,977 |
|
| Net book value |
___ _ |
____ | ____ | ____ | CORPORATE GOVERNANCE |
| At 31 December 2015 |
55 | 1,348 | 97,783 | 99,186 | |
| At 31 December 2014 |
___ 55 |
___ 2,031 |
___ 92,939 |
___ 95,025 |
|
| Projects comprise investments in the development of new products that are expected to generate economic benefits in future periods. Consequently, the costs are amortised over the period in which the related economic benefits flow into the Company. |
C FINANCIAL STATEMENTS |
||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 193 |
| Land | Buildings | Plant and equipment |
Assests under construction |
Others | Total | |
|---|---|---|---|---|---|---|
| Cost | ||||||
| Balance at 31 December 2013 |
139,976 | 228,350 | 320,302 | 98,670 | 1,915 | 789,213 |
| Additions | - | 150 | - | 42,423 | 483 | 43,056 |
| Transfer from assets under development |
- | - | 77,422 | (77,422) | - | - |
| Disposals and retirements | - | - | (6,929) | - | - | (6,929) |
| Balance at 31 December 2014 |
139,976 | 228,500 | 390,795 | 63,671 | 2,398 | 825,340 |
| Additions | - | - | - | 27,130 | 1,332 | 28,462 |
| Transfer from assets under development |
- | 37,416 | 45,574 | (82,990) | - | - |
| Disposals and retirements | - | - | (26,886) | - | - | (26,886) |
| Balance at 31 December 2015 |
139,976 | 265,916 | 409,483 | 7,811 | 3,730 | 826,916 |
| Accumulated depreciation |
||||||
| Balance at 31 December 2013 |
- | 64,778 | 222,726 | - | 1,124 | 288,628 |
| Charge for the year (Note 12) | - | 3,426 | 21,632 | - | 167 | 25,225 |
| Disposals and retirements | - | - | (6,595) | - | - | (6,595) |
| Balance at 31 December 2014 |
- | 68,204 | 237,763 | - | 1,291 | 307,258 |
| Charge for the year (Note 12) | - | 3,938 | 24,239 | - | 227 | 28,404 |
| Disposals and retirements | - | - | (20,188) | - | - | (20,188) |
| Balance at 31 December 2015 |
- | 72,142 | 241,814 | - | 1,518 | 315,474 |
| Net book value |
||||||
| At 31 7December 2015 |
139,976 | 193,774 | 167,669 | 7,811 | 2,212 | 511,442 |
| At 31 December 2013 |
139,976 | 160,296 | 153,032 | 63,671 | 1,107 | 518,082 |
At 31 December 2015 the estimated value of land and buildings pledged as collateral with commercial banks amounts to HRK 340,166 thousand (31 December 2014: HRK 362,504 thousand), and the balance of short-term and long-term borrowings covered by the collateral amounts to HRK 340,347 thousand (31 December 2014: HRK 303,989 thousand).
| Name of subsidiary | Principal activity | Country of incorporation and |
Ownership interest in % | Amount of equity investment, in HRK'000 |
|||
|---|---|---|---|---|---|---|---|
| business | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |||
| ZAO AD Plastik Kaluga |
Manufacture of other vehicle spare parts and accessories |
Kaluga, Russian Federation |
100.00% | 100.00% | 24,236 | 24,236 | |
| ADP d.o.o. | Manufacture of other vehicle spare parts and accessories |
Mladenovac, Serbia |
100.00% | 100.00% | 15,013 | 15,014 | |
| AO ADP / ZAO PHR | Manufacture of other vehicle spare parts and accessories |
Samara, Russian Federation |
99.95% | 99.95% | 5,069 | 5,069 | |
| AD PLASTIK d.o.o. | Manufacture of other vehicle spare parts and accessories |
Novo Mesto, Slovenia |
100.00% | 100.00% | 58 | 58 | |
| 44,376 | 44,377 |
Set out below are details of the Group's material subsidiaries at the end of the reporting period:
| AD PLASTIK d.o.o. | Manufacture of other vehicle spare parts and accessories |
Novo Mesto, Slovenia |
100.00% | 100.00% | 58 | 58 | STRATEGIC REPORT |
|---|---|---|---|---|---|---|---|
| 44,376 | 44,377 | ||||||
| In 2015 ZAO PHR, Russia, was renamed to AO ADP, Russia. Further information about subsidiaries partly owned by the Company, but in which the Company holds a significant non-controlling interest is set out in the following table: |
B | ||||||
| Country of | Ownership interest in % | Amount of equity investment, HRK'000 |
|||||
| Name of associate | Principal activity | incorporation and business |
31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| EURO AUTO PLASTIC SYSTEMS |
Manufacture of other vehicle spare parts and accessories |
Mioveni, Romania |
50.00% | 50.00% | 21,755 | 21,755 | CORPORATE GOVERNANCE |
| FAURECIA ADP HOLDING |
Manufacture of other vehicle spare parts and accessories |
Nanterre, France | 40.00% | 40.00% | - | 30,220 | |
| CENTAR ZA ISTRAŽIVANJE I RAZVOJ AUTOMOBILSKE INDUSTRIJE d.o.o. |
Automotive industry research and development |
Zagreb, Croatia | 24.00% | - | 24 | - | C |
| 21,779 | 51,975 | ||||||
| Total investments |
in subsidiaries and |
associates | 66,155 | 96,352 | |||
| Centar za istraživanje i razvoj automobilske industrije d.o.o., Croatia, established in 2015, is engaged in the research and development in the automotive industry. All the associates referred to above are presented in the accompanying consolidated financial statements using the equity method. |
FINANCIAL STATEMENTS | ||||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 195 |
Set out below is a summary of financial information about the subsidiaries:
| AD PLASTIK d.o.o., Novo Mesto, Slovenia |
31.12.2015. | 31.12.2014. |
|---|---|---|
| Total assets | 11,203 | 19,510 |
| Total liabilities | (8,107) | (15,386) |
| Net assets | 3,096 | 4,124 |
| Share in the net assets of the subsidiary |
100.00% | 100.00% |
| AO ADP / ZAO PHR, Samara, Russian Federation |
31.12.2015. | 31.12.2014. |
| Total assets | 153,062 | 193,918 |
| Total liabilities | (189,757) | (214,422) |
| Net assets | (36,695) | (20,504) |
| Share in the net assets of the subsidiary |
99.95% | 99.95% |
| ZAO AD Plastik Kaluga, Kaluga, Russian Federation |
31.12.2015. | 31.12.2014. |
| Total assets | 118,351 | 177,839 |
| Total liabilities | (137,670) | (159,239) |
| Net assets | (19,319) | 18,600 |
| Share in the net assets of a subsidiary |
100.00% | 100.00% |
| ADP d.o.o, Mladenovac, Serbia |
31.12.2015. | 31.12.2014. |
| Total assets | 85,383 | 90,260 |
| Total liabilities | (79,098) | (84,457) |
| Net assets | 6,285 | 5,803 |
| Share in the net assets of a subsidiary |
100.00% | 100.00% |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Long-term loans to subsidiaries | ____ 75,024 |
____ 83,204 |
| Long-term loans to associates | 37,734 | 44,156 |
| Long-term loans to unrelated companies | 9,788 | 11,543 |
| Other financial assets | 62 | 64 |
| Current portion of long-term loan receivables | (1,500) | (3,137) |
| ____ 121,108 |
____ 135,830 |
Long-term investment loans were granted to the subsidiaries and associates which mature in a period of four years and bear interest at a rate from 6.0 % to 22.34 %.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| AO ADP, Russia | 127,598 | 118,141 |
| ADP Kaluga, Russia | 70,845 | 66,460 |
| FADP Holding, Russia | 14,176 | 8,459 |
| 212,619 | 193,060 |
| 25. | Long-term receivables | 31.12.2015. | 31.12.2014. | STRATEGIC REPORT |
|---|---|---|---|---|
| AO ADP, Russia ADP Kaluga, Russia |
127,598 70,845 |
118,141 66,460 |
||
| FADP Holding, Russia | 14,176 | 8,459 | B | |
| 212,619 | 193,060 | |||
| The Company has concluded with its subsidiaries contracts on deferred payment of the receivables which fall due in 2017; hence, they are classified as non-current. |
CORPORATE GOVERNANCE | |||
| 26. | Inventories | |||
| 31.12.2015. | 31.12.2014. | |||
| Raw material and supplies on stock | ____ 29,068 |
____ 34,101 |
||
| Finished products | 9,812 | 11,473 | C | |
| Spare parts | 6,007 | 5,861 | ||
| Work in progress | 3,416 | 5,012 | ||
| Merchandise on stock | 2,224 | 431 | ||
| Small items and packaging | 12 | 4 | ||
| ____ 50,539 |
____ 56,882 |
|||
| FINANCIAL STATEMENTS | ||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 197 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign trade receivables | ____ 114,279 |
____ 173,828 |
| Domestic trade receivables | 6,662 | 9,835 |
| Impairment allowance on receivables | (3,388) | (8,569) |
| ____ 117,553 |
____ 175,094 |
The average credit period on sales is 79 days (2014: 85 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 collateral for receivables, which are issued in the amount of the receivables.
Structure of the trade receivables:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Revoz, Slovenia | 27,918 | 57,883 |
| Reydel Automotive France, France | 15,570 | 40,180 |
| Grupo Antolin, Czech Republic | 8,754 | 21,487 |
| Peugeot Citroen SA, France | 6,668 | 5,524 |
| Hella Saturnus Slovenia | 6,160 | 6,779 |
| Renault, France | 6,010 | 2,130 |
| FCA Melfi, Italy | 5,976 | 2,040 |
| EURO APS, Romania | 4,880 | 3,961 |
| Smart Brabus, Germany | 4,228 | - |
| Ford Espana, Spain | 3,553 | 4,490 |
| Mandeks, Croatia | 2,281 | - |
| Ford Werke, Germany | 2,069 | 3,544 |
| FCA Poland, Poland | 1,864 | - |
| Plastic Components and Modules, Italy | 1,681 | - |
| FCA Italy, Italy | 1,085 | 341 |
| Automobile Dacia, Romania | 808 | 448 |
| Daimler AG, Germany | 779 | 1,483 |
| Peugeot Citroen ES, Spain | 658 | 1,788 |
| Other debtors | 19,999 | 31,586 |
| Less: impairment allowance on trade receivables | (3,388) | (8,569) |
| 117,553 | 175,094 |
In 2015 Visteon Deutschland was acquired by Reydel AutoAutomotive France.
The total balance of other debtors in the amount of HRK 19,999 thousand (31 December 2014: HRK 31,586 thousand) includes balances owed by subsidiaries in the total amount of HRK 11,244 thousand (31 December 2014: HRK 16,190 thousand) for delivered tools, equipment, intermediate products, services and interest.
Movements in the impairment allowance on doubtful trade receivables can be presented as follows:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Balance at beginning of the year | ____ 7,417 |
____ 7,417 |
| Amounts collected or written-off during the year | (4,056) ____ |
- ____ |
| Total impairment allowance on domestic trade receivables |
3,361 | 7,417 |
| Balance at beginning of the year | 1,152 | 1,271 |
| Amounts collected or written-off during the year | (1,125) | (119) |
| Total impairment allowance on foreign trade receivables |
____ 27 |
____ 1,152 |
| Total impairment allowance |
3,388 | 8,569 |
| All receivables provided against are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables is as follows: |
||
| 31.12.2015. | 31.12.2014. | |
| 0 - 365 days |
____ - |
____ - |
| Over 365 days | 3,388 | 8,569 |
| ____ 3,388 |
____ 8,569 |
|
| Ageing analysis of receivables past due but not impaired can be presented as follows: | ||
| 31.12.2015. | 31.12.2014. | |
| 0 - 365 days |
____ 48,665 |
____ 102,636 |
| Over 365 days | 9,502 | 106,907 |
| ____ 58,167 |
____ 209,543 |
|
| Receivables past due beyond 365 days which were not impaired amount to HRK 9,502 thousand (31 December 2014: HRK 106,907 thousand), with the major part in the amount of HRK 8,545 thousand (31 December 2014: HRK 105,175 thousand) comprising receivables from companies in which AD Plastik d.d. has a majority share and control over the collection of the receivables. |
||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| 0 - 365 days |
____ - |
____ - |
| Over 365 days | 3,388 | 8,569 |
| ____ 3,388 |
____ 8,569 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| 0 - 365 days |
____ 48,665 |
____ 102,636 |
| Over 365 days | 9,502 | 106,907 |
| ____ 58,167 |
____ 209,543 |
Receivables from related companies:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Trade receivables | 7,958 | 14,362 |
| Interest receivable | 3,286 | 1,828 |
| 11,244 | 16,190 |
In 2015 the Company converted portions of receivables from its subsidiaries into long-term receivables due in 2017.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign prepayments made | ____ 18,132 |
____ 20,404 |
| Receivables from the State and state institutions institutions | 5,254 | 9,297 |
| Domestic prepayments made | 1,026 | 3,883 |
| Amounts due from employees | 302 | 414 |
| Other receivables | 2 | - |
| ____ 24,716 |
____ 33,978 |
Amounts due from the State and state institutions comprise receivables from the State Budget in respect of VAT refund, refunds from the Croatian Health Insurance Fund and similar. Domestic and foreign prepayments comprise mainly prepayments made for purchases of production equipment and tools.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Short-term loans to subsidiaries | ____ 13,369 |
__ 13,415 |
| Other short-term loans | 2,259 | 2,291 |
| Current portion of long-term loan receivables | 1,500 | 3,137 |
| Other deposits | 441 | 13 |
| ____ 17,569 |
__ 18,856 |
Short-term loans to subsidiaries represent loans with an average interest rate of 7 percent.
Other short-term loans to unrelated companies represent a loan given to Autocentar-Merkur d.d., Zagreb, with an interest rate of 7.2 percent, which is due in the last quarter of 2016.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign account balance | ____ 2,862 |
____ 1,256 |
| Current account balance | 547 | 527 |
| Cash in hand | 5 | 18 |
| ____ 3,414 |
____ 1,801 |
| 31.12.2015. | 31.12.2014. | ||
|---|---|---|---|
| Accrued income on tools | ____ 26,020 |
____ 44,183 |
|
| Prepaid operating expenses | 6,617 | 12,561 | |
| Other accrued income | 4,285 | 5,763 | STRATEGIC REPORT |
| ____ 36,922 |
____ 62,507 |
||
| Accrued income in the amount of HRK 26,020 thousand (31 December 2014: HRK 44,183 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. |
B CORPORATE GOVERNANCE |
||
| C | |||
| FINANCIAL STATEMENTS | |||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 201 |
Subscribed capital amounts to HRK 419,958 thousand and consists of 4,199,584 shares, with a nominal value of HRK 100,00 per share (2014: HRK 419,958 thousand, comprising 4,199,584 shares, with a nominal value of HRK 100 each).
Shareholders with over 2 percent of the shares at 31 December 2015 were as follows:
| Shareholder | Headquarters | Number of shares |
Ownership in % |
Type of account |
|---|---|---|---|---|
| OAO HOLDING AUTOKOMPONENTI | Saint Petersburg, Russia | 1,259,875 | 30.00% | Primary account |
| HYPO ALPE-ADRIA-BANK D.D. / RAIFFEISEN MANDATORY PENSION FUND |
Zagreb, Croatia | 269,462 | 6.42% | Pension fund |
| ADP-ESOP d.o.o. | Zagreb, Croatia | 212,776 | 5.07% | Primary account |
| HYPO ALPE-ADRIA-BANK D.D. / PBZ CROATIA OSIGURANJE MANDATORY PENSION FUND |
Zagreb, Croatia | 119,640 | 2.85% | Pension fund |
| HRVATSKA POŠTANSKA BANKA D.D./ KAPITALNI FOND D.D. |
Zagreb, Croatia | 116,541 | 2.78% | Pension fund |
| SOCIETE GENERALE-SPLITSKA BANKA D.D. / ERSTE PLAVI MANDATORY PENSION FUND |
Split, Croatia / Zagreb, Croatia |
115,353 | 2.75% | Pension fund |
| PBZ D.D. / STATE STREET CLIENT | Zagreb, Croatia | 111,366 | 2.65% | Custody account |
| ERSTE & STEIERMAERKISCHE BANK d.d. / JOINT CUSTODY ACCOUNT FOR A FOREIGN LEGAL PERSON |
Zagreb, Croatia | 105,349 | 2.51% | Custody account |
| SOCIETE GENERALE-SPLITSKA BANKA D.D. / AZ B CATEGORY MANDATORY PENSION FUND |
Split, Croatia / Zagreb, Croatia |
93,900 | 2.24% | Pension fund |
| ZAGREBAČKA BANKA D.D./STATE STREET BANK AND TRUST COMPANY, BOSTON |
Zagreb, Croatia / Boston, USA |
86,777 | 2.07% | Custody account |
| OTHER SHAREHOLDERS | 1,708,545 | 40.66% | ||
| Total | 4,199,584 | 100% |
| Short-term | Long-term | |||
|---|---|---|---|---|
| 31 December 2015 |
31 December 2014 |
31 December 2015 |
31 December 2014 |
|
| Legal actions | 5,431 | 3,720 | - | - |
| Vacation accrual | 2,631 | 3,197 | - | - |
| Jubilee awards (long-service benefits) |
- | - | 1,759 | 1,302 |
| Retirement/termination benefits | - | - | 1,724 | 688 |
| 8,062 | 6,917 | 3,483 | 1,990 |
| Jubilee awards |
Retirement /termination benefits |
Legal actions |
Vacation accrual |
Total | ||
|---|---|---|---|---|---|---|
| Balance at 1 January 2015 |
1,302 | 688 | 3,720 | 3,197 | 8,907 | |
| Increase/(decrease) in provisions | 457 | 1,037 | 1,711 | (567) | 2,638 | |
| Balance at 31 December 2015 |
1,759 | 1,725 | 5,431 | 2,630 | 11,545 | |
| Defined benefit plan 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 3.65% and the rate of fluctuation of 3.96%. |
||||||
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Long-term borrowings |
___ 304,249 |
____ 280,520 |
| Long-term loans for purchased machinery | 19,263 | 15,870 |
| ___ 323,512 |
____ 296,390 |
|
| Current portion of long-term borrowings | (58,169) | (95,182) |
| Total long-term borrowings |
___ 265,343 |
____ 201,208 |
Long-term borrowings are mainly those realized through programs of HBOR and are used to finance capital investments and development projects. Instruments of collateral provided for the for long-term loans include mortgage on real estate and/or equipment and payment instruments. All the long-term loans are repayable on a quarterly basis and are ultimately repayable in the period 31 March 2015 – 31 December 2021.
In 2015, the weighted average interest rate on the long-term loans was 3.66 percent.
The Company regularly meets all its obligations arising from the loans and observes all the conditions specified in the underlying contracts.
Movements in the long-term borrowings during the year were as follows:
| 2015. | 2014. | |
|---|---|---|
| Balance at 1 January | ____ 201,208 |
____ 204,716 |
| New loans raised | 116,906 | 75,941 |
| Amounts repaid | (52,771) | (79,449) |
| Total long-term borrowings |
____ 265,343 |
____ 201,208 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign customers | ____ 10,378 |
____ 55,988 |
| Domestic customers | 427 | - |
| ____ 10,805 |
____ 55,988 |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Foreign trade payables | ____ 118,534 |
____ 172,698 |
| Domestic trade payables | 45,022 | 51,130 |
| ____ 163,556 |
____ 223,828 |
Average number of payment to suppliers in 2015 was 103 (in 2014: 101) days
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Short-term borrowings – principal payable |
____ 87,955 |
____ 160,006 |
| Current portion of long-term borrowings | 58,169 | 95,182 |
| Short-term borrowings – interest payable |
1,257 | 1,668 |
| Other short-term financial liabilities | - | 1,144 |
| ____ 147,381 |
____ 258,000 |
| Short-term borrowings – principal payable |
____ 87,955 |
____ 160,006 |
|
|---|---|---|---|
| Current portion of long-term borrowings | 58,169 | 95,182 | |
| Short-term borrowings – interest payable |
1,257 | 1,668 | |
| Other short-term financial liabilities | - | 1,144 | STRATEGIC REPORT |
| ____ 147,381 |
____ 258,000 |
||
| B | |||
| The short-term borrowings were used to finance development projects and for working capital purposes. Instruments of collateral provided for the short-term borrowings are payment instruments. Of the total balance of the short-term borrowings, 40 percent represent revolving facilities and approved overdrafts on current accounts with the limits renewable on an annual basis. |
CORPORATE GOVERNANCE | ||
| In 2015, the weighted average interest rate on the short-term loans was 5.45 percent. | |||
| The Company fulfils all its obligations under the loans regularly. | |||
| 2015. | 2014. | ||
| Balance at 1 January | ____ 258,000 |
____ 207,325 |
C |
| New loans raised | 63,631 | 136,656 | |
| Amounts repaid | (174,250) | (85,981) | |
| Balance at 31 December |
____ 147,381 |
____ 258,000 |
|
| FINANCIAL STATEMENTS | |||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 205 |
| ____ 14,302 |
____ 12,525 |
|
|---|---|---|
| Other current liabilities | 39 | 38 |
| Due to the State and State institutions | 6,218 | 4,516 |
| Amounts due to employees | ____ 8,045 |
____ 7,971 |
| 31.12.2015. | 31.12.2014. |
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Accrued tool expenses | ____ 14,611 |
____ 6,511 |
| Input VAT on prepayments made | 29 | 256 |
| Other current liabilities | 647 | 3,510 |
| ____ 15,287 |
____ 10,277 |
Transactions with related companies were as follows:
| Receivables | Liabilities | |||
|---|---|---|---|---|
| 31.12.2015. | 31.12.2014. | 31.12.2015. | 31.12.2014. | |
| AO ADP, Rusija / ZAO PHR, Rusija |
127,598 | 126,516 | 5,468 | 9,206 |
| AO ADP, Russia / ZAO PHR, Russia | 70,845 | 66,460 | 545 | 1,774 |
| ZAO ADP KALUGA, Russia | 14,176 | 8,459 | - | - |
| FADP Holding, France | 11,244 | 7,783 | 4,440 | 5,028 |
| ADP d.o.o. Mladenovac, Serbia | 4,880 | 3,961 | - | - |
| EURO APS, Romania | 9 | 32 | 1,695 | 2,538 |
| AD Plastik d.o.o., Slovenia | 3 | - | 8 | - |
| 228,755 | 213,211 | 12,156 | 18,546 |
| FADP Holding, France | 11,244 | 7,783 | 4,440 | 5,028 | |
|---|---|---|---|---|---|
| ADP d.o.o. Mladenovac, Serbia | 4,880 | 3,961 | - | - | |
| EURO APS, Romania | 9 | 32 | 1,695 | 2,538 | |
| AD Plastik d.o.o., Slovenia | 3 | - | 8 | - | STRATEGIC REPORT |
| 228,755 | 213,211 | 12,156 | 18,546 | ||
| B | |||||
| Trading transactions |
Income | Expenses | |||
| Operating income and expenses | 2015. | 2014. | 2015. | 2014. | CORPORATE GOVERNANCE |
| AO ADP, Russia / ZAO PHR, Russia | 35,496 | 48,362 | 9,399 | 16,421 | |
| ZAO ADP KALUGA, Russia | 16,832 | 34,599 | 5,490 | 7,783 | |
| ADP d.o.o. Mladenovac, Serbia | 13,727 | 6,684 | 5,717 | 1,438 | |
| EURO APS, Romania | 11,001 | 49,587 | - | 108 | |
| FADP Holding, France AD Plastik d.o.o., Slovenia |
9,169 | 8,372 | - | - | |
| Centar za istraživanje i razvoj, Croatia | 234 | - | - | - | C |
| AO ADP, Russia / ZAO PHR, Russia | 2 | - | 1 | - | |
| 86,461 | 147,604 | 20,607 | 25,750 | ||
| FINANCIAL STATEMENTS | |||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 207 |
| Income | Expenses | |||
|---|---|---|---|---|
| Finance income and finance costs |
2015. | 2014. | 2015. | 2014. |
| EURO APS, Romania | 41,963 | 40,987 | - | - |
| FADP Holding, France | 8,199 | 7,912 | - | - |
| ZAO ADP KALUGA, Russia | 2,349 | 2,393 | - | - |
| AO ADP, Russia / ZAO PHR, Russia | 1,600 | 1,636 | - | - |
| ADP d.o.o. Mladenovac, Serbia | 1,461 | 1,469 | - | - |
| AD Plastik d.o.o., Slovenia | - | - | 87 | 335 |
| 55,572 | 54,397 | 87 | 335 |
The total remuneration provided to the members of the Supervisory Board, the Management Board and executive directors in 2015 amounts to HRK 11,605 thousand (2014: HRK 10,948 thousand).
The Company's gearing ratio, expressed as the ratio of net debt to equity, is expressed as follows:
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Short-term borrowings | 147,381 | 258,000 |
| Long-term borrowings | 265,343 | 201,208 |
| Cash and cash equivalents | (3,414) | (1,801) |
| Net debt |
409,310 | 457,407 |
| Equity | 644,972 | 625,309 |
| Net debt-to-equity ratio |
63.46% | 73.15% |
Equity consists of share capital, reserves and retained profit.
| 31.12.2015. | 31.12.2014. | |
|---|---|---|
| Financial assets |
345,261 | 452,632 |
| Investments in subsidiaries and associates | 66,155 | 96,352 |
| Loans | 121,108 | 135,830 |
| Trade receivables | 117,553 | 175,094 |
| Other receivables | 37,031 | 43,555 |
| Cash and cash equivalents | 3,414 | 1,801 |
| Financial liabilities |
595,169 | 747,033 |
| Loans | 412,724 | 459,208 |
| Trade and other payables | 182,445 | 287,825 |
Other receivables include the balances from the following line items in the statement of financial position: 'Other receivables' and 'Current financial assets', less amounts receivable from the State.
Trade and other payables include the balances from the following line items in the statement of financial position: 'Trade payables', 'Advances received' and 'Other current liabilities', less amounts owed to the State.
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.
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. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 209STRATEGIC REPORT
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 in respect of given loans and trade receivables. Loans have been granted to a subsidiary and an associate of the Company, and as such the credit risk is under the control of the Company. Trade receivables are presented net of allowance for bad and doubtful accounts.
The largest six customers of the Company are as follows: Revoz, Slovenia; Hella Saturnus, Slovenia; Reydel, Germany; Peugeot Citroen, France; Grupo Antolin, Germany; and Ford Motor Werke, Germany. Operating income generated from the sales made to the business partners represents over 90 percent of the total operating income. In 2015 the Company generated 55.67 percent of its sales from its major customer, Renault and its subsidiaries (2014: 48.64 %).
It is the policy of the Company to transact with financially sound companies where the risk of default is minimised.
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 the middle exchange rates of the Croatian National Bank:
| At 31 December |
Property | insurance | Liabilities | Net FX position |
|||
|---|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||
| EUR | 502,570 | 433,926 | 277,557 | 449,900 | 225,013 | (15,974) | |
| RUR | 84,086 | 91,319 | 215 | 1 | 83,871 | 91,318 | |
| USD | 8,476 | 649 | 463 | 792 | 8,013 | (143) | |
| RSD | 3,744 | 3,744 | - | - | 3,744 | 3,744 | |
| GBP | 3 | 1 | 239 | 157 | (236) | (156) | |
| 598,879 | 529,639 | 278,474 | 450,850 | 320,405 | 78,789 |
| RSD | 3,744 | 3,744 | - | - | 3,744 | 3,744 | ||
|---|---|---|---|---|---|---|---|---|
| GBP | 3 | 1 | 239 | 157 | (236) | (156) | ||
| 598,879 | 529,639 | 278,474 | 450,850 | 320,405 | 78,789 | STRATEGIC REPORT | ||
| Foreign currency sensitivity analysis | B | |||||||
| currencies by the percentages specified above. | The Company is mainly exposed to the risk of changes in the exchange rates for the euro (EUR) and the Russian rouble (RUR). The following table details the Company's sensitivity to a 2-percent change of the Croatian kuna against the euro and a 10-percent change of the Croatian kuna against the Russian rouble in 2015 and 2014. The sensitivity analysis includes only outstanding foreign-currency denominated monetary items and their translation at the year-end. A negative figure below indicates a decrease in profit, and a positive figure an increase in profit where the Croatian kuna changes against the relevant |
CORPORATE GOVERNANCE | ||||||
| EUR | impact | |||||||
| 2015 | 2014 | |||||||
| Change in exchange differences (2 %) | +/- 4,519 |
+/- | 354 | C | ||||
| RUR impact |
||||||||
| 2015 | 2014 | |||||||
| Change in exchange differences (10 %) | +/- 8,607 |
+/- | 9,143 | FINANCIAL STATEMENTS | ||||
| Your needs. Our drive. | ANNUAL REPORT 2015 OF AD PLASTIK GROUP | 211 |
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 its 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 and 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 | ||
|---|---|---|---|---|---|---|---|
| 2015 | Weighted average interest rate |
||||||
| Assets | |||||||
| Non-interest bearing | 39,063 | 55,777 | 41,952 | - | 66,217 | 203,009 | |
| Interest bearing | 9.48% | 937 | 1,792 | 24,389 | 128,273 | 6,237 | 161,628 |
| --------------- 40,000 |
--------------- 57,569 |
--------------- 66,341 |
--------------- 128,273 |
--------------- 72,454 |
------------------- 364,637 ----- |
||
| Liabilities | ___ | ___ | ___ | ___ | ___ | ___ -- |
|
| Non-interest bearing | 74,594 | 68,635 | 35,665 | 3,551 | - | 182,445 --------------- |
|
| Interest bearing | 4.34% | 3,510 | 22,632 | 134,692 | 264,258 | 37,022 | 462,114 ---------------- |
| --------------- 78,104 |
--------------- 91,267 |
--------------- 170,357 |
--------------- 267,809 |
--------------- 37,022 |
--------------- 644,559 |
||
| 2014 | Weighted average interest rate |
||||||
| Assets | |||||||
| Non-interest bearing | 12,070 | 17,848 | 169,898 | - | 96,352 | 296,168 | |
| Interest bearing | 8.82% | 370 | 2,587 | 17,677 | 136,415 | 6,615 | 163,664 |
| ___ 12,440 |
___ 20,435 |
___ 187,575 |
___ 136,415 |
___ 102,967 |
___ 459,832 |
||
| Liabilities | ___ | ___ | ___ | ___ | ___ | ___ | |
| Non-interest bearing | 24,840 | 15,184 | 199,548 | 48,253 | - | 287,825 | |
| Interest bearing | 4.52% | 4,484 | 48,162 | 244,676 | 139,029 | 42,153 | 478,504 |
| ___ 29,324 |
___ 63,346 |
___ 444,224 |
___ 187,282 |
___ 42,153 |
___ 766,329 |
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 the price quoted on a stock exchange or arrived at using the discounted cash flow method.
At 31 December 2015, the carrying amounts of cash, receivables, short-term liabilities, accrued expenses, short-term borrowings and other financial instruments match their fair values.
An Extraordinary Meeting of Shareholders was held on 6 April 2016, at which a decision was adopted to distributed a dividend of HRK 4 per share out of the retained (undistributed) earnings and other reserves from 2014. The dividends will be paid on 22 April 2016. Your needs. Our drive. ANNUAL REPORT 2015 OF AD PLASTIK GROUP 213STRATEGIC REPORT
Based on the Management's estimate, the Company had no material contingent liabilities at 31 December 2015 which would require to be disclosed in the notes to the financial statements.
As at 31 December 2015 there were no material legal actions outstanding against the Company other than those reflected in these financial statements.
These financial statements were approved by the Management Board of AD Plastik d.d. and authorised for issue on 23 April 2016.
For AD Plastik d.d., Solin:
Marinko Došen President of the Management Board
SOLIN, APRIL 2016 WWW.ADPLASTIK.HR
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