Annual Report • Apr 29, 2011
Annual Report
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| 1. | General report……………………………………………………………… | 3 | |
|---|---|---|---|
| a) | Address to shareholders: MR. Josip Boban, president of the board AD | ||
| Plastik Inc. ………………………………………… | 3 | ||
| b) c) |
Establishment and development of AD Plastik and subsidiaries Ownership structure …………………………………………… |
4 5 |
|
| d) | Management……………………………………………………………… | 6 | |
| e) | Information on the purchase of own shares …………… |
6 | |
| f) | Information for investors………………………………………… | 6 | |
| g) | Declaration on the implementation of the code of corporate management…………………………………………………………….………… |
7 | |
| 2. | Events during 2010 and business overview …………… |
9 | |
| a) b) |
Business overview in 2010 and key indicators ………………… Market and expected development of the company…………… |
9 10 |
|
| c) | Employees……………………………………………………………………………… | 11 | |
| d) | Environmental protection……………………………………………………… | 12 | |
| 3. | Financial report…………………………………………………… | 14 | |
| a) | AD Plastik d.d and its subsidiaries consolidated financial statement and | ||
| independent Auditor's report ………………………………………… |
15 | ||
| b) | Responsibility for the financial statements……………………….… | 16 | |
| c) | Independent Auditor's report |
17 | |
| d) e) |
Consolidated Statement of Comprehensive Income…………………… Consolidated Statement of Financial Position ………………….……… |
19 20 |
|
| f) | Consolidated Statement of Changes in Shareholders' Equity………… | 22 | |
| g) | Consolidated Statement of Cash Flow…… |
23 | |
| h) | Notes to the consolidated financial statements………………………………. | 24 | |
| i) | AD Plastik d.d unconsolidated financial statement and independent | ||
| Auditor's report ……………………… | 58 | ||
| j) k) |
Responsibility for the financial statements ………………………………… Independent Auditor's report……… |
59 60 |
|
| l) | Unconsolidated Statement of Comprehensive Income ……………………62 | ||
| m) | Unconsolidated Statement of Financial Position…………… | 63 | |
| n) | Unconsolidated Statement of Changes in shareholders' Equity |
65 | |
| o) | Unconsolidated Statement of Cash Flow ……………………………… |
66 | |
| p) | Notes to the unconsolidated financial statements ……………………… | 67 | |
| 4. | Address book………………………………………………………………… 105 |
2
Company AD Plastik Inc. Solin, a joint stock company for the manufacture of parts and accessories for motor vehicles and plastic products was established by a decision of the Constituent Assembly on June 15th , 1994 after the conversion process of social enterprise Auto Parts - Solin, based on the decision on conversion and Resolution of the Croatian Privatization Fund number 01.02/92-06/392 dated on December 06th , 1993.
Reconciliation of general acts of the Company with the Companies Act was carried out on December 18th , 1995 by the decision of the Company's Assembly, and the registration in the Commercial Court was conducted on March 22nd , 1996 under the number Tt-95/5567-2 with value of the share capital to the amount of kuna 223.180.430. Extraordinary Assembly on April 28th , 1997 reached the decision on increasing the share capital of the Company by investment in assets to the value of kuna 23.827.200, so the share capital amounted kuna 246.993.900. By the decision of the General Assembly on April 15th , 2002 the share capital was increased to the amount of kuna 293.970.900 based on a capital injection of the company Prevent. The share capital is divided into 2.939.709 shares of nominal value of kuna 100.00.
By the decision of the Company's General Assembly on June 21st , 2007 the Company amended the Statute of July 08th, 2004 and the decision on the recapitalization was reached. By the decision number Tt-07/2145- 3 dated on September 25th , 2007 the capital increase in cash was registered for the amount of kuna 125. 987.500 (by the payment of OAO Sankt-Petersburg investment company), and a total registered capital amounts kuna 419.958.400 and is divided into 4.199.584 shares of nominal value of kuna 100.00.
A company with foreign investments PHR closed joint stock company was established in April 25th, 1995 and operates in accordance with the Constitution of the Russian Federation and federal law on the "joint stock companies." Headquarters of the Company is in Russia, Samara, Krasnoglinski rayon, village Vintaj. Company's main business activity is manufacturing of plastic parts for automobiles, and the realization is intended for car manufacturers VAZ, Ford and Renault in Russia. Share of AD Plastik Inc. Solin at the end of 2010 amounted 99.9%.
Company ADP Novo Mesto Ltd. Slovenia was established in 1997 and is 100% owned by Ad Plastik Inc. Solin. Company's main business activity is the product assembly and synchronous delivery to the assembly line of the car manufacturer Renault in Novo Mesto.
Closed joint-stock company "ADP Luga" was established by the Contract on establishing of the closed joint stock company ADP LUGA on March 26th , 2008. Share of AD Plastik Inc. Solin is 100%.
Company EURO Auto Plastik Systems s.r.l. Romania was founded on August 20th, 2002 as a limited liability company with its headquarters in Romania, the city of Mioveni, street Uzinei, no. 2A. Company's main business activity is production of vehicle parts, and complete deliveries are realized for Dacia. Owner's share of AD PLASTIK Inc. Solin is 50%.
Company SG Plastik Ltd. Solin, was founded by the founder AD Plastik Inc. Solin and SG Technologies GmbH, Buschfeld, Germany, for market research and intermediation, which is registered in the court registry of the Commercial Court in Split under number Tt-06/1310-4 on June 27th, 2006. The main objective is the development and manufacture of extruded products for the automotive market. Owner's share of AD PLASTIK Inc. Solin is 50.00%
Company FAURECIA ADP HOLDING S.A.S., Nanterre, France, was founded by the founders AD PLASTIK Inc. Solin and company FAURECIA AUTOMOTIVE HOLDINGS S.A.S., France. Owner's share of AD PLASTIK Inc. Solin in the said company is 40%. Company FAURECIA ADP HOLDING S.A.S., France is 100% in the ownership of the company OOO FAURECIA ADP, Luga, Russia, whose main business activity is manufacturing of plastic parts for automobiles for customers in the Russian market.
The share capital of the parent company AD Plastik Inc. amounts kuna 419.958.400, and is divided into 4.199.584 shares with a nominal value of kuna 100.
Shareholders are legal and natural persons from Croatia and abroad, who exercise their rights through the General Assembly and the Supervisory Board in accordance with laws of the Republic of Croatia.
The ownership structure of the Group AD Plastik on December 31st , 2010:
| Shareholder | Number of shares |
% |
|---|---|---|
| OAO Grupe Aerokosmicheskoe Oborudovanie, Sankt Petersburg |
1.259.875 | 30,00% |
| Natural persons, banks, funds | 1.716.323 | 40,86% |
| Prevent Global Inc. | 1.081.770 | 25,76% |
| AD Plastik Inc. Solin | 124.310 | 2,96% |
| AD Plastik ESOP Ltd. | 17.135 | 0,41% |
| Croatian fund for privatization |
171 | 0,01% |
| Total | 4.199.584 | 100,0% |
In accordance with the Companies Act and the Statute of the Company, Company's management structure is consisted of Supervisory Board and Management Board.
These are two separate bodies, and no one can be a member of both Boards.
The Company's Management Board has five members who are responsible for specific areas of business. They meet at least twice a month and reach management decisions.
The Management Board is elected for a term of 5 years, and this session of the Board is mandated until October 01st, 2011.
| Josip Boban | President of the Board |
|---|---|
| Ilija Pokrajac | Member |
| Ivica Tolić | Member |
| Katija Klepo | Member |
| Nenad Marković | Member |
| Borut Meh | President of the Supervisory Board |
|---|---|
| Ivka Bogdan | Member |
| Nijaz Hastor | Member |
| Dimitrij Drandin Leonidovič | Member |
| Valerij Pavlovič Kiseljevič | Member |
| Nikola Zovko | Member |
| Tomislav Dulić | Member |
Meeting of shareholders of the Company is acting in accordance with the Law on companies of the Republic of Croatia the Statute.
During 2010 AD Plastik Inc. did not acquire its own shares. In total there are 124.310 shares in the treasury, which represents 2.96% of total shares.
AD Plastik Inc. issued a total of 4.199.584 ordinary shares to the name, each with a nominal value of kuna 100.
The shares are listed on the official market on the Zagreb Stock Exchange. Mark of the stock is ADPL-R-A. In 2010 the stock price ranged from:
Total turnover in 2010 amounts kuna 39.454.152,80.
In 2010 the Company paid dividend to the amount of kuna 1,5 per one share.
Announcement of results for 2010: April 30th , 2011.
Announcement of results for the first quarter of 2011 (Consolidated report): April 30th , 2011.
General Assembly of AD Plastik, Inc. will take place (orientation): July 15th, 2011.
Announcement of results for the second quarter and first six months in 2011 (Consolidated report): July 30th , 2011.
Announcement of results for the third quarter and first nine months in 2011 (Consolidated report): October 29th, 2011.
Note: these data are subject to change.
Ivica Tolić, member of the Board, Phone: 021/206486, Fax: 021/206489, e-mail: [email protected]
Katija Klepo, member of the Board, Phone: 021/206483, Fax: 021/206489, e-mail: [email protected]
Ad Plastik Inc. Solin (hereinafter: Company) apply the Code of Corporate Management, which was written by the Croatian Agency for Supervision of Financial Services (hereinafter referred to as: Hanfa) and the Zagreb Stock Exchange Inc. Zagreb, and was adopted by the decision of Hanfa on April 26th, 2008 and published in the Official Gazette of the Republic of Croatia no. 46/07, as well as on the website of the Zagreb Stock Exchange (hereinafter referred to as: Code).
With the mentioned Code, from April 01st, 2010 the Company also applies its own Code of corporate management that was adopted at the session of the Supervisory Board on February 20th, 2008, and is published on the website of the Company.
In 2010 the Company complied with the provisions of the Code, with certain exceptions, occurred primarily because of the process of coordinating practices of the Company with the rules of the Code. Deviations from the Code are as follows:
Description of certain deviations from the Code and reasons for the stated discrepancies the Company explains in detail in the answers to the annual questionnaire that is part of the Code and which has been delivered and published on the web sites of the Zagreb Stock Exchange, as well as on the Company's own web site.
In the future the Company plans to comply with the provisions of the Code, taking into account the acceptability of certain provisions of the Code, all in accordance with the legal regulations and distinctive international standards of corporate management.
Internal supervision in the Company is conducted by the Controlling department and informs the Management Board through the report on the conducted monitoring (findings and suggestions of improvement).
Supervision and coordination of Management business reporting on the business results include:
The Company has no majority owner. The largest shareholder is the Open joint stock company, Group ''Aerokosmicheskoe oborudovanie" from Sankt-Petersburg, Russian Federation, which owns 1.259.875 shares which represents 30% of the share capital of the Company. The company Prevent Global Inc. from Slovenj Gradec, Slovenia, owns 1.081.770 shares which represents 25.76% of the share capital of the Company.
Supervisory Board appoints and recalls the Board Members of the Company and its President. In accordance with the Articles of association, Management Board may have from five to seven members. The mandate of the Board members lasts 5 years with the possibility of reappointment. Management Board manages the Company's operations at its own risk, and each member of the Board is authorized to represent the company individually.
Currently the Management Board is composed of five members: President of the Board, Board Member responsible for the development, sale and purchase, Board Member responsible for controlling, accounting and finance, Board member responsible for human resources, legal department, organization and IT and Board member responsible for logistics, quality, and manufacturing and production functions.
In accordance with the Statute of the Company, the Management Board needs to require the consent of the Supervisory Board for misappropriation and/or acquisition of real estates, misappropriation and/or acquisition of shares, i.e. shares in companies, adoption of annual business plan, including the Company's budget.
The Company's Management Board is not authorized to reach the decision on shares issuing. Management Board may decide to acquire its own shares in the manner and under the conditions as prescribed by the Companies Act.
The Supervisory Board consists of seven members (since February 20th, 2008). The mandate of the Supervisory Board members lasts for four years and they may be re-elected, i.e. appointed. Four members are elected by the General Assembly, one member of the Supervisory Board is appointed by the Company's works council, while two members, in accordance with the Statute of the Company, is appointed by the shareholder of the Open joint stock company Group ''Aerokosmicheskoe oborudovanie'' from Saint-Petersburg, Russian Federation.
The Supervisory Board is responsible for the appointment and dismissal of members of the Management Board, and supervision of the management of the Company's business.
Company's General Assembly decides on the amendments to the Statute. Proposal to amend the Statute may be given by the Management Board, Supervisory Board and Company's shareholders who individually or collectively hold shares with a nominal amount greater than 15% of the share capital of the Company.
During 2010 the Company did not purchase their own shares. On December 31st, 2010 the Company had 124.310 own shares, which represents equity in the share capital to the amount of 2.96%.
The main business activity of the Group AD Plastik is production of plastic parts for the automobile industry. In addition, the Company also produces packaging for food industry, household products, etc.
Business audit of Group AD Plastik was done by Deloitte audit company, and complete adjustment in accordance with International accounting standards was done.
Total realized consolidated revenues amount kuna 857 million, from which kuna 857 million represent operating revenues.
Consolidation of financial reports for 2010 was conducted for the following subsidiaries: PHR - Russia, ADP LUGA - Russia and ADP Novo Mesto - Slovenia. Mutual transactions in the balance sheet, profit and loss account and cash flow with subsidiaries have been eliminated in the consolidated financial statements.
Profit after taxation amounts kuna 54.2 million, and is represented in the sources of assets on the item capital and reserves. Consolidated net income includes income of the parent company with subsidiaries to the amount of kuna 20.7 million, profit from PHR Russia to the amount of kuna 16.4 million, profit from AD Plastik Novo Mesto kuna 2.1 million and loss of ADP LUGA to the amount of kuna 0.2 million. On the end of 2010 assets of the Group amounted kuna 1.073 million.
At the end of 2010 in the sources of assets, item Capital and reserves, was larger by kuna 55.6 million, compared to the year 2009. Long-term liabilities were decreased by kuna 28.1 million and short-term liabilities were increased by kuna 15.5 million, compared to the previous year.
On December 31st, 2010 the coefficient of total indebtedness decreased compared to the previous year and now amounts 0.377.
Solvency of the Company is good, and all obligations towards customers, suppliers, employees, government, banks and other counterparties are properly executed.
During 2010 the tax audit was executed. AD Plastik filed a complaint to the first instance decision which was subsequently canceled and the new solution is expected.
All financial indicators during 2010 were improved. We can conclude that the Group has a stable balance with well-balanced coefficients in the balance sheet. Implemented measures for rationalization of the cost of operations have yielded positive results and created good conditions for increased profit in the future.
Financial indicators of the Group AD Plastik in 2010:
| Total liabilities | 0,405 | ||
|---|---|---|---|
| Indebtedness coefficient | Total assets | 0,377 | |
| Capital | |||
| Coefficient of own financing | Total assets | 0,622 | 0,595 |
| Total liabilities | |||
| Coefficient of financing | Capital | 0,606 | 0,681 |
| Net profit | |||
| Coefficient of profitability | Total assets | 0,051 | 0,016 |
| Fixed assets | |||
| Coefficient of financial stability | Capital +Long-term liabilities | 0,865 | 0,813 |
| Liabilities-capital and reserves | |||
| Coefficient of indebtedness on own capital | Capital and reserves | 0,606 | 0,681 |
| Current assets | |||
| Coefficient of solvency | Current liabilities | 1,139 | 1,470 |
Realization plan for 2010 was made on the basis of forecasts of car manufacturers which were conservative as a result of previous years. Since the realization of the plan was much better than the forecasts, the achieved result for 2010 has exceeded all expectations.
Vehicle Program which is most represented in our plans was achieved more than planned by 20% in the parent company. Renault, PSA, Ford and Hella achieved realization that allowed better capacitating of production while achieving better financial results.
Decline in standards and reduced demand caused the program to the outside of the car industry not to realize the planned implementation. The management of this program sets measures with the aim of resolving the positioning of these programs in future development.
In 2010 in EAPS in Romania the above planning results were achieved. Positioning and good sales of Dacia cars on the market has resulted in demand for new lines of vehicles. For such a good result, special emphasis must be placed on the Duster program and the production of spare parts for other markets.
On the Russian market situation has improved compared to 2009. All car manufacturers have increased their announced orders that were used in preparing the plan for 2010. Such a positive change resulted with the fact that the achieved result was beyond all expectations.
Global strategic objectives of AD Plastik are not substantially changed from the previous year.
In the framework of the program Renault Croatia projects were successfully realized, especially in the exterior part, which convinced Renault in the reactivity of ADP and the ability of project management in complex conditions. This was the basis for the nomination of ADP and direct collaboration with RSA on the project X44ph2 (interiors in collaboration with Visteon).
In Romania, ADP was nominated by Renault/Dacia for the independent development of the roof lining X52 with the modification and transfer of blinds manufacturing X90, all for production site EAPS (start of production in 2012).
Joint commercial-development performance of ADP and Faurecia in front of RSA provided stable future of this site in the following period.
In Russia, in the frame of the program Renault-Avtoframos ADP was nominated for the independent development and localization of interior production in PHR, by which ADP created a basis for the production of interior modules, technologies of thermo-shaping and injection molding, providing prerequisites for mastering production of new vehicle X52, and further production expansion (production starts in 2011).
Also, in the program Nissan Russia in 2010, ADP expanded the number of products, and customers in the Russian market by the nomination for the project LB1A (start of production in 2012).
For the same project, but in cooperation with Faurecia, ADP has been nominated for the localization of production in the PHR for wallpapers, side trims in the luggage compartment and the trunk lid trim (start of production in 2012).
It is important to stress that ADP in collaboration with the French company Sealynx was nominated for the development of a new vehicle sealing module VAZ 2190. Besides, in the Russian market ADP was also nominated for joint programs Avtovaza (Renault) and Peugoet.
In mid 2010 in program FIAT-Serbia began sales and development activities in preparing, submitting and explaining the bid for a new Fiat car in Serbia (Idea, Multipla, Musa), project 330. Activities are still in progress. Nominations are expected in the first half of 2011.
People integrated into the system of AD PLASTIK make a strong and competent unit for the automotive industry, who, in addition to professional knowledge and skills, possess the required personality traits.
AD Plastik Inc. in Croatia has 875 employees. The average age is 40 years.
The Company and all its employees are oriented towards the customer and the market in general, not forgetting at the same corporate interests of other interested parties.
Furthermore, instead of the insurance concept for permanent job the concept of continuous development is being offered, as well as permanent training and education, which provide employment for all the time through which people develop along with the company.
We are giving up from the concept of treating human resources as a cost. We consider human resources as the most valuable assets of the company, and invest in them as in any other property.
As a company which along the manufacturing segment sees its progress also in developmental activities, 21% of our employees are highly educated staff who possess specific expertise applicable in the automotive industry, and they are particularly developmentally oriented, ethical, hardworking, creative and communicative.
Therefore, the primary responsibility of the Company is to ensure continuous training of personnel with the aim of monitoring the dynamic and technological development and increasing the satisfaction of all employees.
Thus, during 2010 the management had education at the topics of financial management and control over the operations.
Professional staff development programs was realized through approximately 20 themes customized for business areas, with special emphasis on the themes "How to work with key customers (Key account management) - PSA" and "Lean Management". Along with technical and professional training, they also worked on raising the level of knowledge of foreign languages and computer literacy. As a holder of the certificate of quality management ISO/TS and certificate for environmental protection ISO 14001, we continuously work to raise awareness of employees on the role of individual worker to the total result of the Company.
The aim is to increase knowledge sharing among workers, and in 2010 the share of internal training in the overall educational process was 43%.
The Company regularly, on an annual basis, measures and assesses the degree of motivation and satisfaction of its workers. Significant resources are invested for improving indicators of motivation and satisfaction, according to the measurement results. Therefore, the rate of voluntary fluctuations is low, and for 2010 the monthly average is 0.15%.
The company has developed system of recognition, evaluation and rewarding of improvements. Since we work in a competitive environment that is fast developing in technology, this development can be traced, and sometimes anticipated in a way that we include more employees in the process of improvement, not just those whose technical and technological improvement is a direct job.
The Company has social peace and respect for the social partners. The Company has provided all the conditions for the operation of the Workers' Council and Management Board regularly cooperates with the council within the law. Cooperation with trade unions is productive, especially in terms of collective bargaining and the implementation and monitoring of the implementation of the Collective Agreement.
Total quality management and sustainable development represent basic business principles of the Company. Conservation and prevention of environmental pollution, in order to permanently reduce the negative environmental impact of our products, activities and services is an ongoing process and obligation of every employee.
During 2010 there was no supervision by the environmental inspection.
Ensuring working conditions without danger to health and safety of employees, among other measures, is conducted continuously through the training in the field of occupational safety and fire protection.
a) AD Plastik d.d., Solin and its subsidiaries Consolidated financial statements and Independent Auditor's Report For the year ended 31 December 2010
expressed in thousands of kunas)
| 31/12/2010 | 31/12/2009 (as restated) |
||
|---|---|---|---|
| Notes | |||
| Sales Other income |
6 7 |
696,952 105,325 |
597,178 15,936 |
| Total income | ____ 802,277 |
____ 613,114 |
|
| Decrease/(Increase) in the value of work in progress and finished products |
____ (2,020) |
____ 6,309 |
|
| Cost of raw material and supplies | 8 | 320,854 | 241,594 |
| Cost of goods sold | 9 | 65,171 | 65,434 |
| Service costs | 12 | 59,859 | 58,441 |
| Staff costs | 10 | 134,634 | 125,200 |
| Depreciation and amortisation Other external charges |
11 13 |
55,208 37,463 |
51,882 42,008 |
| Other operating expenses | 14 | 77,700 | - |
| Provisions for risks and charges | 15 | 15,545 | - |
| Total operating expenses | ____ 764,414 |
____ 590,868 |
|
| Profit from operations | ____ 37,863 |
____ 22,246 |
|
| Finance revenue | 16 | ____ 55,087 |
____ 41,316 |
| Finance cost | 17 | (48,453) | (59,274) |
| Share in the profit of an associate | 16 | 15,146 ____ |
11,825 ____ |
| Profit / (loss) from financing activities | 21,780 | (6,133) | |
| Profit before taxation | ____ 59,643 |
____ 16,113 |
|
| Income tax expense | 18 | ____ 5,402 |
____ - |
| Profit for the year | ____ 54,241 |
____ 16,113 |
|
| Other comprehensive income | ____ 1,697 |
____ - |
|
| Total comprehensive income | ____ 55,938 |
____ 16,113 |
|
| Profit attributable to: | ____ | ____ | |
| Equity holders of the Company | 54,225 | 16,268 | |
| Non-controlling interests | 16 | (155) | |
| Total comprehensive income attributable to: | |||
| Equity holders of the Company | 55,922 | 16,268 | |
| Non-controlling interests | 16 | (155) |
expressed in thousands of kunas)
| 31/12/2009 (as |
|||
|---|---|---|---|
| ASSETS | Notes | 31/12/2010 | restated) |
| Non-current assets | |||
| Intangible assets | 20 | 43,568 | 59,379 |
| Tangible assets | 21 | 515,419 | 512,536 |
| Investments in subsidiaries | 22 | 72,841 | 27,262 |
| Other financial assets | 23 | 28,628 | 64 |
| Deferred tax assets | 18 | 771 ____ |
- ____ |
| Total non-current assets | 661,227 | 599,241 | |
| Current assets | |||
| Inventories | 25 | 57,466 | 57,308 |
| Trade receivables | 26 | 152,395 | 172,461 |
| Other receivables | 27 | 49,714 | 60,225 |
| Current financial assets | 28 | 11,587 | 24,035 |
| Cash | 29 | 64,951 | 58,445 |
| Prepaid expenses and accrued income | 24 | 75,549 ____ |
58,542 ___ |
| Total current assets | 411,622 ____ |
431,016 ____ |
|
| TOTAL ASSETS | 1,072,889 ____ |
1,030,257 ____ |
| (as | |||
|---|---|---|---|
| 31/12/2010 | restated) | ||
| Notes | |||
| Equity | |||
| Share capital | 30 | 419,958 | 419,958 |
| Reserves | 193,657 | 175,732 | |
| Profit for the year | 54,225 | 16,269 | |
| Non-controlling interests | 25 _ _ |
768 | |
| Total equity | 667,865 _ _ |
612,727 | |
| Long-term provisions | 31 | 3,332 | - |
| Long-term loans | 32 | 92,831 | 124,239 |
| Other non-current liabilities | 32 | 74 _ _ |
68 |
| Total non-current liabilities | 96,237 _ _ |
124,307 | |
| Advances received | 34 | 82,414 | 55,424 |
| Trade payables | 35 | 93,148 | 102,903 |
| Short-term loans | 36 | 106,257 | 116,592 |
| Other current liabilities | 37 | 13,050 | 16,943 |
| Short-term provisions | 32 | 12,213 | - |
| Accrued expenses and deferred income | 33 | 1,705 _ _ |
1,361 |
| Total current liabilities | 308,787 _ _ |
293,223 | |
| Total liabilities | 405,024 _ _ |
417,530 | |
| TOTAL EQUITY AND LIABILITIES | 1,072,889 _ _ |
1,030,257 |
| Total equity | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Reserves | Retaine d |
attributable to the equity |
Non controllin |
||||||
| Share | Capital | Legal | for own | Own | earning | holders of the | g | ||
| capital | reserves | reserves | shares | shares | s | Company | interests | Total | |
| Balance at 31 December 2008 | 419,958 | 220,080 | 5,042 | 8,995 | (8,995) | (34,341) | 610,739 | 390 | 611,129 |
| Transfer to Capital Reserves covering prior year losses |
- | (2,748) | (3) | - | - | 2,751 | - | - | - |
| Changes in non-controlling interests | - | - | - | - | - | - | - | 533 | 533 |
| Purchase of treasury shares Exchange differences on investments in foreign |
- | (2,202) | - | 2,768 | (2,768) | (566) | (2,768) | - | (2,768) |
| subsidiaries | - | (20,123) | - | - | - | 8,319 | (11,804) | (11,804) | |
| Profit for the year | - | - | - | - | - | 16,269 | 16,269 | (155) | 16,114 |
| Balance at 31 December 2009, before | |||||||||
| corrections | 419,958 | 195,007 | 5,039 | 11,763 | (11,763) | (7,568) | 612,436 | 768 | 613,204 |
| Correction of the result for the current year (see Note 5) |
- | - | - | - | - | (477) | (477) | - | (477) |
| Balance at 31 December 2009 - as |
|||||||||
| restated | 419,958 | 195,007 | 5,039 | 11,763 | (11,763) | (8,045) | 611,959 | 768 | 612,727 |
| Transfer of the prior-year profit | - | - | 1,001 | - | - | (1,001) | - | - | - |
| Changes in non-controlling interests Exchange differences on investments in foreign |
- | - | - | - | - | - | - | (759) | (759) |
| subsidiaries | - | 5,466 | - | - | - | - | 5,466 | - | 5,466 |
| Dividends paid | - | - | - | - | - | (6,103) | (6,103) | (6,103) | |
| Revaluation of fixed assets | - | 1,696 | - | - | - | - | 1,696 | - | 1,696 |
| Valuation of treasury shares | - | - | - | 194 | (194) | - | - | - | - |
| Dividends paid to employees | - | - | - | (597) | 597 | 597 | 597 | - | 597 |
| Profit for the year | - | - | - | - | - | 54,225 | 54,225 | 16 | 54,241 |
| Balance at 31 December 2010 | 419,958 | 202,169 | 6,040 | 11,360 | (11,360) | 39,673 | 667,840 | 25 | 667,865 |
thousands of kunas)
| Cash flows from operating activities | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Profit for the year | 54,241 | 16,113 |
| Income tax | 5,402 | - |
| Deferred taxes | (771) | - |
| Depreciation and amortization charge | 55,208 | 51,882 |
| Gains from sale of tangible assets | 61,022 | 1,554 |
| Impairment for trade receivables | 1,016 | 175 |
| Provisions | 15,560 | - |
| Profit/(loss) from operations before working capital changes | 191,678 | 69,724 |
| Decrease in inventories | (158) | 18,317 |
| Decrease/(increase) in trade receivables | 19,110 | (61,321) |
| Decrease in receivable from the state | (5,402) | 3,294 |
| (Increase)/decrease in other receivable | 10,511 | 4,535 |
| Decrease in trade payables | (9,755) | 1,023 |
| Increase in liabilities for advances received | 26,990 | (823) |
| Decrease in other short term payables | 2,738 | 53,093 |
| Decrease in accrued expenses and deferred income | 344 | (434) |
| Increase in prepaid expenses | (17,007) | 9,384 |
| Cash flows provided from operating activities | 219,049 | 96,792 |
| Treasury shares acquired | - | (2,768) |
| Increase in investments in associates | (45,579) | (3,424) |
| Increase in tangible and intrangible assets | (102,405) | (21,601) |
| Increase in investment funds | (11,078) | - |
| Decrease in short term loans | 23,526 | (34,312) |
| Decrease/(increase) in long term loans | (28,564) | 23,933 |
| Cash flows from investing activities | (164,100) | (38,172) |
| Dividends paid | (6,103) | - |
| Bonuses paid to employees | (597) | - |
| Increase in short term borrowings | (11,719) | 43,393 |
| Decrease in long term borrowings | (30,024) | (56,715) |
| Cash flows from financing activities | (48,443) | (13,322) |
| Net cash flows for the year | 6,506 | 45,298 |
| Cash and cash equivalents at 1 January | 58,445 | 13,147 |
| Net cash flows for the year | 6,506 | 45,298 |
| Cash and cash equivalents at 31 December | 64,951 | 58,445 |
expressed in thousands of kunas)
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 sociallyowned 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 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 125,987,500.00, effected by OAO Saint Petersburg Investment Company was registered, and the total subscribed capital now amounts to HRK 419,958,400.00 and consists of 4,199,584 shares, with a nominal amount of HRK 100.00 each. By the agreement on transfer of shares from 29 June 2009 OAO Spik transferred shares of the Company to OAO Group Aerokosmicheskoe Oborudovanie from St. Petersburg.
The Company shares were included in the listing of public limited companies on the Official Market of the Zagreb Stock Exchange on 1 October 2010.
-
1) The closed-end company ADP Luga, established by an Articles of Association of the Closed-end Company ADP LUGA of 26 March 2007. The registered seat of ADP LUGA is at the address Lenjingradska oblast, Luga, Boljšaja Zarečnaja 1a. 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:
2) The closed-end foreign investment company PHR (abbreviated firm: ZAO PHR), established on 25 April 1995 and operating under the Constitution of the Russian Federation and the Federal Act on Incorporations. Its registered seat is in Russia, Samara, Krasnoglinski Raion, the village of Vintaj.
The company AD Plastik d.d., Solin, has an equity share of 99.90 percent.
The subsidiary's registered activities comprise the following:
3) The company ADP Novo Mesto, d.o.o., Slovenia, established in 1997 and fully owned by Ad Plastik d.d., Solin.
The registered activities of the subsidiary comprise the following:
1) The company EURO Auto Plastik Systems s.r.l., Romania, established on 20 August 2002 as a limited liability company with its registered seat in Romania, Mioveni, ul. Uzinei, No. 2A.
The company AD Plastik d.d., Solin, has an equity share of 50 percent.
The principal activities of the associate are as follows:
2) The company SG Plastik d.o.o., Solin, was established by AD Plastik d.d. Solin, and SG Technologies GmbH, Buschfeld, Germany, for market research and mediation services, as registered in the court register of the Commercial Court in Split under the number Tt-06/1310-4, on 27 June 2006. The company AD Plastik d.d., Solin, has an equity share of 50 percent.
The registered activities of the associate comprise the following:
3) The company FADP Holding, Nanterre, established on 30 April 2010 by Faurecia Automotive Holding S.A.S., Nanterre, France, and AD Plastik d.d. Solin, Croatia.
The company AD Plastik d.d., Solin, has an equity share of 40 percent.
The principal activities of the associate are as follows:
4) The company Faurecia AD Plastik Automotive Romania SRL, Mioveni, established on 26 November 2003 by Faurecia Automotive Holding S.A.S., Nanterre, France, and AD Plastik d.d. Solin, Croatia.
The company AD Plastik d.d., Solin, has an equity share of 49 percent.
The principal activities of the associate are as follows:
An associate is an entity over which the Company 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 2010, the number of staff employed was 2,375 (2009: 2,120).
| 2010 | 2009 | |
|---|---|---|
| Ad Plastik d.d. | 875 | 924 |
| ZAO ADP Luga | 3 | 135 |
| ZAO PHR | 536 | 300 |
| AD Plastik d.o.o. | 36 | 39 |
| Euro APS | 734 | 722 |
|---|---|---|
| FADP Holding | 191 | - |
| Mandate | ||
|---|---|---|
| Members of the Supervisory Board: | ||
| Borut Meh (Chairman) | From 03/10/2008 | To 03/10/2012 |
| Nijaz Hastor | From 16/07/2009 | To 16/07/2013 |
| Nikola Zovko | From 18/07/2008 | To 18/07/2012 |
| Tomislav Dulić | From 11/09/2008 | To 11/09/2012 |
| Ivka Bogdan | From 20/07/2010 | To 20/07/2014 |
| Drandin Dmitrij Leonidovič | From 19/10/2007 | To 19/10/2011 |
| Valerij Pavlovič Kiseljevič | From 19/10/2007 | To 19/10/2011 |
| Marin Milišić | From 16/07/2009 | To 05/05/2010 (resigned) |
Members of the Management Board:
| Josip Boban (President) | From 01/10/2006 | To 01/10/2011 |
|---|---|---|
| Ilija Pokrajac | From 01/10/2006 | To 01/10/2011 |
| Ivica Tolić | From 01/10/2006 | To 01/10/2011 |
| Katija Klepo | From 20/02/2008 | To 01/10/2011 |
| Nenad Marković | From 30/05/2008 | To 01/10/2011 |
2010
The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) are effective in the current period:
The amendments and revisions to the existing standards and interpretations and the interpretations and standards effective in the current year did not have a significant impact on the financial statements of the Group.
At the date of authorization of these financial statements the following Standards, revisions and Interpretations were in issue but not yet effective:
The Group has elected not to adopt these Standards, revisions and Interpretations in advance of their effective dates and anticipates that their adoption will have no material impact on the financial statements of the Group in the period of initial application.
Set out below are the principal accounting policies consistently applied in the preparation of the financial statements for the current and prior years.
These financial statements are prepared in accordance with International Financial Reporting Standards and Croatian laws.
The financial statements of the Group have been prepared on the historical cost basis, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and Croatian laws.
The Group maintains its accounting records in the Croatian language, in Croatian Kuna and in accordance with Croatian laws and the accounting principles and practices observed by enterprises in Croatia.
The preparation of financial statements in conformity with International Financial Reporting Standards (IFRSs) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4. These consolidated financial statements have been prepared under the assumption that the Group will continue as a going concern.
The consolidated financial statements of the Group represent aggregate amounts of assets, liabilities, capital and reserves of the Group as of 31 December 2010, and the results of its operations for the year then ended. Some of the financial captions have been reclassified in these financial statements compared to the prior year, as the management is of the opinion that the reclassification provides a better presentation of the financial statements as a whole.
The accounting policies are consistently applied by all the Group entities.
The consolidated financial statements of the Group comprise the consolidated financial statements of the Company and its subsidiaries.
Subsidiaries are entities controlled by the Company. Control is present when the Company is entitled to determine, directly or indirectly, the financial and business policies of the investee so as to derive benefits from its operations. The financial statements of the subsidiaries are included in the Group financial statements on a consolidated basis from the date that control commences until the date that control ceases.
Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
Revenue is measured at the fair value of the consideration received or receivable for products, goods or services sold in the regular course of operations.
Revenues are stated net of value added tax, estimated returns, discounts and rebates. Revenue is recognised when the amount of the revenue can be measured reliably and when future economic benefits are expected to flow into the Group.
Product sales are recognised when the products are delivered to, and accepted by the customer and when the collectability of the receivables is virtually certain.
Income from the manufacture of tools for a known customer
Interest income is recognised on a time basis, using the effective interest method. Interest earned on balances with commercial banks (demand and term deposits) is credited to income for the period as it accrues. Interest on trade debtors is recognised as income upon settlement.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are included in profit or loss in the period in which they are incurred.
Transactions in foreign currencies are translated into Croatian kunas at the rates of exchange in effect at the dates of the transactions. Cash, receivables and payables denominated in foreign currencies are retranslated at the rates of exchange in effect at the date of the statement of financial position. Gains and losses arising on translation are included in the statement of comprehensive income for the year. At 31 December 2010, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.385173 (31 December 2009: HRK 7.306199 for EUR 1).
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognised in the income statement, except where it relates to items recognised directly in equity, in which case it is also recognised in equity. Current tax represents tax expected to be paid on the basis of taxable profit for the year, using the tax rate enacted at the balance sheet date, adjusted by appropriate priorperiod items.
Under Croatian tax regulations, group entities are not subject to taxation on a consolidated bases, and tax losses cannot be transferred within group entities. Subsidiaries are subject to taxation in their respective jurisdictions.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates in effect at the balance sheet date.
The measurement of deferred tax liabilities and assets reflects the amount that the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred taxes are not discounted and are classified in the balance sheet as non-current assets and/or noncurrent liabilities. Deferred tax assets are recognised only to the extent that it is probable that the related tax benefit will be realised. At each balance sheet date, the Company reviews the unrecognised potential tax assets and the carrying amount of the recognised tax assets.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities.
In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over cost.
Tangible fixed assets are recognised initially at cost and subsequently at cost less accumulated depreciation. The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable sales taxes and any directly attributable costs of bringing an asset to its working condition and location for its intended use. Maintenance and repairs, replacements and improvements of minor importance are expensed as incurred. Where it is obvious that expenses incurred resulted in increase of expected future economic benefits to be derived from the use of an item of tangible or intangible assets in excess of the originally assessed standard performance of the asset, they are added to the carrying amount of the asset. Gains or losses on the retirement or disposal of tangible fixed assets are included in the statement of comprehensive income in the period they occur. Depreciation commences on putting an asset into use. Depreciation is provided so as to write down the cost or revalued amount of an asset over the estimated useful life of the asset using the straight-line method as follows:
| Depreciation rate (in %) | Depreciation rate (in %) | |
|---|---|---|
| 2010 | 2009 | |
| 1. Tangible assets | ||
| Buildings | 1.50-4.00 | 1.50-4.00 |
| Machinery | 7.00-10.00 | 7.00-10.00 |
| Tools, furniture, office and | 10,00-20,00 | 10,00-20,00 |
| laboratory equipment and | ||
| accessories, measuring and | ||
| control instruments | ||
| Vehicles | 20.00 | 20.00 |
| IT equipment | 20.00 | 20.00 |
| Other | 10.00 | 10.00 |
| 2. Intangible assets | 20.00 | 20.00 |
At each reporting date the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is an indication that the assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
An associate is an entity over which the Company has significant influence but which is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting. Under this method, the Company's share in the profit or loss of associates is recognised in the income statement from the date of acquisition of significant influence until the date on which significant influence is lost.
Investments are recognised initially at cost and are subsequently adjusted by the changes in the acquirer's share of the net profit of the investee. Where the Company'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 Company' has assumed an obligation or committed to make a payment on behalf of the associate.
Inventories of raw material and spare parts are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average cost method. Net realisable value represents the estimated selling price in the ordinary course of business less all variable selling costs.
Cost of work in progress and finished products comprises the cost of raw material and supplies, direct labour and other costs and the portion of overheads directly attributable to work in progress.
Small inventory is written off when put in use.
The cost of product inventories i.e. the production costs is based on direct material used, the cost of which is determined using the weighted average cost method, then direct labour costs, and fixed overheads at the actual level of production which approximates the normal capacities, as well as variable overheads that are based on the actual use of the production capacities. Merchandise on stock is recognised at purchase cost.
Trade debtors and prepayments are carried at nominal amounts less an appropriate allowance for impairment for uncollectible amounts.
Impairment is made whenever there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, the probability of bankruptcy proceedings at the debtor, or default or delinquency in payment are considered objective evidence of impairment. The amount of the impairment loss is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The impairment losses on trade receivables are recognised in the income statement within 'Expenses'.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
Cash comprises account balances with banks, cash in hand, deposits and securities at call or with maturities of less than three months.
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of discounting is material, the amount of the provision is the present value of the expenditures expected to be required to settle the obligation, determined using the estimated risk free interest rate as the discount rate. Where discounting is used, the reversal of such discounting in each year is recognised as a financial expense and the carrying amount of the provision increases in each year to reflect the passage of time.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the date of the statement of financial position, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
In the normal course of business the Company makes payments, through salary deductions, to mandatory pension funds on behalf of its employees as required by law. All contributions made to the mandatory pension funds are 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 applicable union agreements.
Benefits falling due more than 12 months after the reporting date are discounted to their present value.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each reporting date. Actual gains and losses are recognised in the period in which they arise.
Past service cost is recognised immediately to the extent that the benefits are already vested. Otherwise, it is amortised on a straight-line basis over certain period until the benefits become vested
Financial assets and financial liabilities included in the accompanying financial statements consist of cash and cash equivalents, marketable securities, trade and other receivables, trade and other payables, long-term receivables, loans, borrowings and investments. The details of the recognition and measurement of those items are presented in the corresponding policies.
Investments are recognised and derecognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Financial assets available for sale are classified as current assets if the management intends to realise those assets within 12 months from the date of the statement of financial position. Every purchase and sale transaction in recognised on the settlement date. Investments are recognised initially at cost, which represents the fair value of the consideration given, including transaction costs. Available-for-sale investments are subsequently measured at fair value, with no deduction of transaction costs, by reference to their market prices prevailing at the date of the statement of financial position. Investments whose fair values cannot be determined are carried at cost and reviewed for impairment at each reporting date.
The effective interest method is a method of calculating the amortised cost of a financial asset or liability, and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial asset or liability, or, where appropriate, a shorter period.
Financial assets are assessed for indicators of impairment at each date of the statement of financial position. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of a financial asset is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
Contingent liabilities have not been recognised in these financial statements. They are not disclosed unless the possibility of outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but it is disclosed when the inflow of economic benefits becomes probable.
Events after the date of the statement of financial position that provide additional information about the Company's position at that date (adjusting events) are reflected in the financial statements. Post-year-end events that are not adjusting events are disclosed in the notes when material.
In the application of the Company's accounting policies, which are described in Note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results may differ from those estimates.
The estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.
Areas of estimation include, but are not limited to, depreciation periods and residual values of property, plant and equipment, and of intangible assets, value adjustment of inventories, impairment of receivables, and litigation provisions. The key areas of estimation in applying the Company's accounting policies that had a most significant impact on the amounts recognized in the financial statements were as follows:
As described in the Note 3.8, 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. Property, plant and equipment have not been revalued i.e. their carrying amounts correspond with their cost less accumulated depreciation, and the management is satisfied that the market value of the property, plant and equipment is significantly higher than the amounts recognised in the accompanying financial statements.
A deferred tax asset is recognized only to the extent that it is probable that the related tax benefit will be realised. In determining the amount of deferred taxes that can be recognised significant judgements are required, which are based on the probable quantification of time and level of future taxable profits, together with the future tax planning strategy. In 2009, deferred tax assets on available tax differences were recognised.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
The cost of defined benefits is determined using actuarial estimates. Actuarial estimates involve assumptions about discount rates, future salary increases and the mortality or fluctuation rates. Because of the long-term nature of those plans, there is uncertainty surrounding those estimates.
During 2010 t he Company thoroughly reviewed the reported items of tangible assets and found that the construction in progress was overstated at 31 December 2009 for the total amount of HRK 477 thousand. By the same amount the Company restated 2009 financial statements by decreasing tangible assets and increasing expenses.
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Foreign sales | 676,098 | 573,630 |
| Domestic sales | 20,854 ____ |
23,548 ____ |
| 696,952 ____ |
597,178 ____ |
Business segments are defined according to internal reports about components of the Group. Management Board as decision-making, body regularly reviews reports to allocate resources to segments and evaluate the success of their business.
Segment revenue analysis by country:
| Country | 2010 | 2009 |
|---|---|---|
| Slovenia | 237,991 | 168,839 |
| Russia | 168,721 | 127,743 |
| Germany | 159,231 | 167,847 |
| France | 87,077 | 87,179 |
| Croatia | 20,853 | 23,548 |
| Romania | 9,375 | 16,655 |
| Spain | 5,115 | 354 |
| Turkey | 3,110 | 1,965 |
| Slovakia | 2,146 | 2,272 |
| Brazil | 1,520 | 172 |
| Austria | 479 | 31 |
| Czech Republic | 437 | 249 |
| Belgium | 364 | 215 |
| Kazakhstan | 325 | 109 |
| Italy | 146 | - |
| Bosnia and Herzegovina | 59 | - |
| Hungary | 3 | - |
| TOTAL | 696,952 | 597,178 |
| 105,325 _ _ |
15,936 | |
|---|---|---|
| Other operating income | 3,666 _ _ |
2,172 |
| Rental income | 69 | 127 |
| Income from damages | 504 | - |
| Income from co-financing | 600 | 794 |
| Income upon execution of distress | 167 | 612 |
| Credit notes - early cash payment discount | - | 1,718 |
| Prior-period income | 1,330 | 3,347 |
| Income from consumption of own products, goods and services | 1,858 | 1,322 |
| Income from bonuses provided by suppliers | 4,786 | 4,290 |
| Income from recharged service costs | 4,794 | - |
| Income from sale of inventories | 19,559 | - |
| Income from sale of assets | 67,992 | 1,554 |
Other income mainly comprise income from the sale of the building, land and inventories of the Russian subsidiary ADP Luga to the associated company OOO Faurecia that continued the production at those facilities.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Direct materials | 294,130 | 217,832 |
| Electricity | 19,760 | 17,234 |
| Other expenses | 6,964 _ _ |
6,528 |
| 320,854 _ _ |
241,594 |
| 65,171 _ _ |
65,434 | |
|---|---|---|
| Other costs of goods sold | 897 _ _ |
913 |
| Cost of spare parts sold | 2,093 | 193 |
| Cost of direct material sold | 2,193 | 1,494 |
| Cost of goods sold | 59,988 | 62,834 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Net wages and salaries | 73,606 | 68,491 |
| Taxes and contributions out of salaries | 27,431 | 28,538 |
| Contributions on salaries | 20,585 | 17,123 |
| Other staff costs | 13,012 _ _ |
11,048 |
| 134,634 _ _ |
125,200 |
Costs reimbursed to employees include per diems, overnight accommodation and business travel costs, a portion of costs for the use of personal cars for business purposes and other business related costs.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Depreciation (Note 20) | 36,109 | 31,666 |
| Amortisation (Note 19) | 19,099 _ _ |
20,216 |
| 55,208 _ _ |
51,882 |
| Transport | 28,621 | 25,220 |
|---|---|---|
| Rental costs | 6,862 | 8,186 |
| Regular and preventive maintenance costs - machinery | 5,360 | 7,146 |
| Commissions | 2,829 | 3,000 |
| Tool modification costs | 2,016 | 377 |
| Forwarding and shipping costs | 1,396 | 1,433 |
| Telecommunications | 1,275 | 1,365 |
| Communal fees | 1,155 | 1,240 |
| Water supply | 1,031 | 1,100 |
| Annual Year Report of Group AD Plastik | 2010 2010 | ||
|---|---|---|---|
| Other expenses | 9,314 _ _ |
9,374 | |
| 59,859 _ _ |
58,441 | ||
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Temporary service costs - tools | 10,842 | 19,995 |
| Net book value of disposed intangible fixed assets | 3,675 | 7,384 |
| Professional service cost | 2,865 | 1,290 |
| Bank charges | 2,282 | 1,191 |
| Insurance premiums | 1,686 | 1,612 |
| Communal fees for the use of construction plots | 1,425 | 1,408 |
| Cost of goods provided free of charge | 1,309 | 1,018 |
| Customer complaints | 1,220 | 1,087 |
| Net book value of disposed intangible fixed assets | 1,199 | 1,087 |
| Payment operation charges | 546 | 844 |
| Forest reproduction levies | 362 | 383 |
| Entertainment | 350 | 294 |
| Occupational Health and Safety service costs | 312 | 253 |
| Professional training costs | 273 | 371 |
| Other fees (Supervisory Board) | 284 | 224 |
| Gifts for employees' children | 227 | 268 |
| Water management fee | 216 | 218 |
| Translation service costs | 181 | 197 |
| Other non-material costs | 1,757 | 1,299 |
| Other expenses | 6,452 _ _ |
1,585 |
| 37,463 _ _ |
42,008 |
Most of other external costs comprise manufacturing of tools for the production of car spare parts per orders of the ultimate car manufacturers and include the cost of the tools, tool modification services, transportation and other handling charges.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Selling expenses | 54,887 | - |
| Sale of inventories | 19,055 | - |
| Other expenses | 3,758 _ _ |
- |
| 77,700 _ _ |
- |
Other operating expenses comprise mainly the expenses incurred in the sale of the building, land and inventories of ADP Luga, Russia (see Note 7).
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Provisions under actuarial calculations | 3,332 | - |
| Provisions for tax disputes | 5,320 | |
| Vacation accruals | 3,163 | - |
| Litigation provisions | 3,730 _ _ |
- |
| 15,545 _ _ |
- |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Interest income | 4,846 | 5,312 |
| Foreign exchange gains | 48,428 | 36,004 |
| Dividend income | 15,146 | 11,825 |
| Other finance revenue | 1,813 _ _ |
- |
| 70,233 _ _ |
53,141 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Interest expense | 11,134 | 15,235 |
| Foreign exchange losses | 36,414 | 44,039 |
| Other finance cost | 905 _ _ |
- |
| 48,453 _ _ |
59,274 |
Income tax comprises the following:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Current tax | 6,069 | - |
| Deferred tax | (667) ___ |
- ___ |
| 5,402 ___ |
- ___ |
The Company is entitled to tax incentive measures, which it utilised in 2010 in accordance with the Act on the Promotion of Investments.
The Ministry of Economy, Labour and Entrepreneurship issued on 28 October 2008 a certificate certifying that the Company, as the Applicant, meets the terms and conditions specified in the Act on the Promotion of Investments (Official Gazette No. 138/06) and is awarded the status of the incentive measure beneficiary.
Under the Investment Project reported in the period of the incentive measure beneficiary status (2008 – 2010), the Company invested into the construction of production facilities, purchases of new Renault part production equipment, opened new jobs and provided advanced training to its employee under the Advanced Training Programme that is a part of the Investment Project.
The reported deferred tax assets arised from temporary differences in the provisions for severance payments and jubilee awards.
Basic earnings per share are determined, by dividing the Company's net profit by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares redeemed and held by the Company as treasury shares. There were no circumstances that would give rise to a dilution of the earnings per share reported above.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Net profit attributable to the Company shareholders | 54,225 | 16,268 |
| Weighted average number of shares | 4,075,805 ___ |
4,069,087 ___ |
| Basic earnings per share (in HRK) | 13.30 ___ |
4.00 ___ |
| Licences | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| Balance at 31 December 2008 | 67 | 393 | 101,181 | 101,641 |
| Additions | - | 2,350 | 6,212 | 8,562 |
| Disposals and retirements | ___ | ___ _ |
(7,384) ____ |
(7,384) ___ _ |
| Balance at 31 December 2009 | 67 __ |
2,743 __ |
100,009 ___ |
102,819 __ |
| Additions | _ - |
_ 365 |
6,598 | _ 6,963 |
| Disposals and retirements | - ___ |
- ___ |
(3,675) ____ |
(3,675) ___ |
| Balance at 31 December 2010 | 67 _ |
3,108 _ |
102,932 ___ |
106,107 _ |
| Accumulated depreciation | __ | __ | _ | __ |
| Balance at 31 December 2008 | - | 393 | 22,831 | 23,224 |
| Charge for the year | - ___ _ |
- ___ _ |
20,216 ____ |
20,216 ___ _ |
| Balance at 31 December 2009 | _ |
393 _ |
43,037 ___ |
43,440 _ |
| Charge for the year | - ___ _ |
305 ___ _ |
18,794 ____ |
19,099 ___ _ |
| Balance at 31 December 2010 | __ __ |
698 __ __ |
61,841 ___ _ |
62,539 __ __ |
| Net book value | ||||
| At 31 December 2010 | 67 _ |
2,410 _ |
41,091 ___ |
43,568 _ |
| At 31 December 2009 | 67 _ |
2,350 _ |
56,952 ___ |
59,379 _ |
Projects comprise investments in the development of new products that are expected to generate revenue in future periods. Consequently, the costs are amortised over the period in which the related economic benefits flow into the Company.
| Land | Buildings | Plant and equipment |
Assets under construc tion |
Other | Total | |
|---|---|---|---|---|---|---|
| Cost Balance at 31 December |
||||||
| 2008 | 83,785 | 186,267 | 346,369 | 104,263 | 136 | 720,820 |
| Additions Transfer from assets under |
- | 18,350 | - | 23,840 | - | 42,190 |
| development | 40,818 | 40,515 | 33,655 | (115,292) | 304 | - |
| Disposals and retirements | - | (452) | (7,387) | - | - | (7,839) |
| Balance at 31 December 2009 |
124,603 | 244,680 | 372,637 | 12,811 | 440 | 755,171 |
| Additions Transfer from assets under |
2,017 | 28,988 | 10,873 | 53,071 | 1,390 | 96,339 |
| development | 8,573 | 33,230 | 18,485 | (62,086) | 1,798 | - |
| Disposals and retirements | (573) | (46,061) | (10,707) | - | (6) | (57,347) |
| Balance at 31 December 2010 |
134,620 | 260,837 | 391,288 | 3,796 | 3,622 | 794,163 |
| Accumulated depreciation |
||||||
| Balance at 31 December 2008 |
- | 48,856 | 161,977 | - | 136 | 210,969 |
| Charge for the year 2009 Balance at 31 December |
- | 2,765 | 28,689 | - | 212 | 31,666 |
| 2009 | - | 51,621 | 190,666 | - | 348 | 242,635 |
| Charge for the year 2010 Balance at 31 December |
- | 3,240 | 32,631 | - | 238 | 36,109 |
| 2010 | - | 54,861 | 223,297 | - | 586 | 278,744 |
| Net book value | ||||||
| At 31 December 2010 | 134,620 | 205,976 | 167,991 | 3,796 | 3,036 | 515,419 |
| At 31 December 2009 | 124,603 | 193,059 | 181,971 | 12,811 | 92 | 512,536 |
In 2010, the company ZAO ADP Luga, Russia sold its land and building to the company OOO Faurecia, owned by FADP Holding.
At 31 December 2010, the net book value of tangible assets pledged as collateral with commercial banks amounts to HRK 255,668, and the balance of short-term and long-term loans secured by those assets is HRK 197,930.
| Name of associate |
Principal activity | Country of incorporation |
Ownership interest in % |
Amount of equity investment, HRK'000 |
||
|---|---|---|---|---|---|---|
| and business | 2010 | 2009 | 2010 | 2009 | ||
| EURO AUTO PLASTIC SYSTEMS |
Manufacture of other vehicle spare parts and accessories |
Mioveni, Romania |
50.00% | 50.00% | 50,786 | 26,279 |
| FAURECIA AD PLASTIK |
Manufacture of other vehicle spare parts and |
Mioveni, | ||||
| ROMANIA (FAAR) | accessories Business and other |
Romania | 49.00% | 49.00% | 258 | 123 |
| SG PLASTIK d.o.o. |
management consultancy Manufacture of other vehicle spare |
Solin, Republic of Croatia |
50.00% | 50.00% | 240 | 860 |
| FAURECIA ADP HOLDING |
parts and accessories |
Nanterre, France |
40.00% | - | 21,557 | - |
| 72,841 | 27,262 |
| Name of associate |
Country of incorporation and business |
Amount of equity investment |
Additional investments in 2010 |
Share in the result for the year |
Amount of equity investment |
|---|---|---|---|---|---|
| 31/12/2009 | 31/12/2010 | ||||
| EURO AUTO | |||||
| PLASTIC SYSTEMS | Mioveni, Romania | 26,279 | - | 24,507 | 50,786 |
| FAURECIA AD | |||||
| PLASTIK ROMANIA | |||||
| (FAAR) | Mioveni, Romania | 123 | 213 | (78) | 258 |
| Solin, Republic of | |||||
| SG PLASTIK d.o.o. | Croatia | 860 | - | (620) | 240 |
| FAURECIA ADP | |||||
| HOLDING | Nanterre, France | - | 30,220 | (8,663) | 21,557 |
| 27,262 | 30,433 | 15,146 | 72,841 |
31/12/2010 31/12/2009
| Current portion of long-term loan receivables | (432) _ 28,628 _ |
(21,958) _ 64 _ |
|---|---|---|
| Other financial assets | 64 | 64 |
| Long-term loans to unrelated companies | 432 | 21,958 |
| Long-term loans to associates | 28,564 | - |
A long-term investment loan with a variable interest and maturity in 2014 was granted to an associate.
Accrued income in the amount of HRK 69,250 thousand (2009: HRK 54,069 thousand) represent amounts relating to the manufacture of tools for a known customer. Income from the manufacture of tools is recognised using the stage-of-completion method to determine the amount of income and costs attributable to a certain period.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Other accrued income on tools | 69,250 | 54,069 |
| Other accrued income | 3,400 | 1,633 |
| Prepaid operating expenses | 2,877 ____ |
2,840 ____ |
| 75,527 ____ |
58,542 ____ |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Raw material and supplies on stock | 42,629 | 45,387 |
| Work in progress | 2,806 | 2,610 |
| Finished products | 8,624 | 7,953 |
| Merchandise | 3,407 _ _ |
1,358 |
| 57,466 _ _ |
57,308 |
| _ _ | |
|---|---|
| (10,501) | |
| 141,491 | 148,377 |
| 17,117 | 23,761 |
| (11,458) |
The average credit period on sales is 75 days. The Company has provided for all for all sued debtors, regardless of the past due period, as well as for all receivables that are past due and assessed as doubtful of collection.
The Company seeks and obtains from its domestic customers debentures as collaterals in the amount of the receivables.
Set out below is an analysis of major trade receivables:
| 152,395 _ _ |
172,461 | |
|---|---|---|
| Other debtors | 36,692 _ _ |
61,336 |
| Renault S.A.S. | 5,297 | 14,404 |
| Peugeot Citroen Automobiles, France | 5,931 | 2,486 |
| OAO Avtovaz, Russia | 23,790 | 14,644 |
| Visteon Deutschland, Germany | 31,575 | 34,521 |
| Revoz, Slovenia | 49,110 | 45,070 |
Movements in the impairment allowance on domestic trade receivables were as follows:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Balance at beginning of the year | 9,115 | 8,662 |
| Additionally impaired during the year | 697 | 812 |
| Amounts collected or eliminated during the year | (93) ____ |
(359) ____ |
| Total impairment allowance on domestic trade receivables | 9,719 ____ |
9,115 ____ |
| Balance at beginning of the year | 1,386 | 664 |
| Additionally impaired during the year | 1,074 | - |
| Amounts collected or eliminated during the year | (721) ____ |
(278) ____ |
| Total impairment allowance on foreign trade receivables | 1,739 ____ |
1,386 ____ |
| Total impairment allowance | 11,458 | 10,501 44 |
2010 2010
__________ __________
All receivables provided against are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| 0 - 731 days | 125 | 765 |
| 732 - 1096 days | 1,751 | 107 |
| 1097 - 1827 days | 751 | 3,265 |
| Over 1827 days | 8,831 _ _ |
6,364 |
| 11,458 _ _ |
10,501 | |
| Ageing analysis of receivables past due but not impaired | ||
| 31/12/2010 | 31/12/2009 | |
| 1 - 365 days | 7,750 | 17,442 |
| Over 365 days | 1,636 _ _ |
8,887 |
| 9,386 _ _ |
26,329 | |
| Receivables from associated companies Trade receivables Interest receivable |
31/12/2010 ____ |
31/12/2009 3,033 10,824 2,211 - ____ |
| 5,244 ____ |
10,824 ____ |
|
| 27. OTHER RECEIVABLES | ||
| 31/12/2010 | 31/12/2009 | |
| Receivables from the State and state institutions institutions | 24,370 | 30,247 |
| Prepayments made | 20,588 | 26,384 |
| Amounts due from employees and owners | 932 | 815 |
| Other receivables | 3,824 _ _ |
2,779 |
| 49,714 ____ |
60,225 __ |
Amounts due from the State and state institutions comprise receivables from the State Budged in respect of VAT refund, refunds from the Croatian Health Insurance Fund and similar.
Foreign prepayments comprise prepayments made for purchases of production equipment and tools.
| 2,000 77 _ _ |
|---|
| - |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Current account balance | 9,562 | 13,147 |
| Deposits with a term of up to 3 months | 55,389 _ _ |
45,298 |
| 64,951 _ _ |
58,445 |
Subscribed capital amounts to HRK 419,958 thousand and consists of 4,199,580 shares, with a nominal value of HRK 100.00 per share (2009: HRK 419,958 thousand, 4,199,580 shares, with a nominal value of HRK 100 each).
The shareholders with over 2 percent of the shares at 31 December 2010 were as follows:
| Number | Ownership | ||
|---|---|---|---|
| Headquarters | of shares | in % | Type of account |
| Saint Petersburg, Russia | 1,259,875 | 30.00% | Primary account |
| Slovenj Gradec, Slovenia | 1,081,770 | 25.76% | Primary account |
| Zagreb, Croatia | 134,108 | 3.19% | Custody account |
| Zagreb, Croatia | 127,652 | 3.04% | Primary account |
| Solin, Croatia | 123,779 | 2.95% | Treasury shares |
Out of 123,779 treasury shares, 25,571 are kept off the balance sheet, as they were acquired without a consideration. The fair value of these treasury shares at 31 December 2010 amounted to HRK 2,958 thousand.
31/12/2010 31/12/2009
| Short-term: | Long-term: | |||
|---|---|---|---|---|
| At 31 December 2010 |
At 31 December 2009 |
At 31 December 2010 |
At 31 December 2009 |
|
| Jubilee awards (long-service benefits) | - | - | 1,936 | - |
| Termination benefits | - | - | 1,396 | - |
| Legal actions | 3,730 | - | - | - |
| Tax disputes | 5,320 | |||
| Vacation accrual | 3,163 ____ |
- ____ |
- ____ |
- ____ |
| 12,213 ____ |
- ____ |
3,332 ____ |
- ____ |
According to the Union Agreement, the Company has the obligation to pay long-service (jubilee awards), retirement and other benefits to employees. The Company operates a defined benefit plan for qualifying employees. Retirement and long-service benefits are defined in the Union Agreement. No other postretirement 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 6.21% and the rate of fluctuation of 1.07%.
| 32. NON-CURRENT LIABILITIES | |||
|---|---|---|---|
| -- | -- | -- | ----------------------------- |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Long-term borrowings | 123,170 | 153,194 |
| Current portion of long-term borrowings | (30,339) _ _ |
(28,955) |
| 92,831 | 124,239 | |
| Other non-current liabilities | 74 _ _ |
68 |
| 92,905 _ _ |
124,307 |
2010 2010
Long-term borrowings comprise HBOR investment loans and bear interest at a rate of 4 percent, as well as long-term loans from commercial banks with interest rates ranging from 3.16 to 6 percent. AD Plastik d.d. services regularly all of its obligations under those borrowings, in line with the terms and conditions of the underlying loan agreements.
Movements in long-term borrowigs during the year:
| 2010 | 2009 | |
|---|---|---|
| Balance at 1 January | 153,194 | 212,101 |
| New loans raised Amounts repaid |
- (30,024) |
- (31,907) |
| Long-term loans refinanced using short-term loans | - _ _ |
(27,000) |
| Total long-term borrowings | 123,170 _ _ |
153,194 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Due to the State and State institutions | 593 | 709 |
| Amounts due to employees | 56 | - |
| Other current liabilities | 1,056 ____ |
652 ____ |
| 1,705 ____ |
1,361 ____ |
| 82,414 _ _ |
55,424 | |
|---|---|---|
| Foreign customers | 79,933 _ _ |
55,424 |
| Domestic customers | 2,481 | - |
| 93,148 ____ |
102,903 ____ |
|
|---|---|---|
| Foreign trade payables | 76,407 _ _ |
77,578 |
| Domestic trade payables | 16,741 | 25,325 |
31/12/2010 31/12/2009
31/12/2010 31/12/2009
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Short-term loans - principal payable | 75,000 | 84,118 |
| Short-term loans - interest payable | 916 | 2,073 |
| Current portion of long-term borrowings | 30,339 | 28,955 |
| Other current financial liabilities | 2 _ _ |
1,446 |
| 106,257 _ _ |
116,592 |
Short-term loans represent revolving facilities provided by commercial banks and short-term HBOR loans for export and import preparation, with the interest rate of 5 percent.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Due to the State and State institutions | 6,097 | 4,207 |
| Amounts due to employees | 6,553 | 8,354 |
| Dividends payable | 16 | 368 |
| Other current liabilities | 258 _ _ |
4,014 |
| 12,924 _ _ |
16,943 |
The Company's gearing ratio, expressed as the ratio of net debt to equity, can be expressed as follows:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Short-term borrowings | 106,257 | 116,592 |
| Long-term borrowings | 92,831 | 124,239 |
| Cash and cash equivalents | 64,951 ____ |
58,445 ____ |
| Net debt | 134,137 ____ |
182,386 ____ |
| Equity Net debt-to-equity ratio |
667,865 20.08% |
612,727 29.77% |
49
2010 2010
31/12/2010 31/12/2009
| Financial assets | ||
|---|---|---|
| Loans and receivables | 176,210 | 185,736 |
| Financial assets at fair value through profit or loss | 11,154 | - |
| Cash and cash equivalents | 64,951 | 58,445 |
| Financial liabilities | ||
| Trade payables | 93,148 | 102,903 |
| Borrowings | 199,088 | 240,831 |
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.
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 Group 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 Group seeks to minimise the effects of these risks. The Group does not enter into, or trade in financial instruments, including derivative financial instruments, for speculative purposes.
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 the subsidiaries of the Company and as such credit risk is under the control of the Company. Trade receivables are presented net of allowance for bad and doubtful accounts.
The five largest customers of the Group are Revoz, Slovenia; Renault, France; Visteon, Germany, Peugeot Citroen Automobiles, France; and OAO Avtovaz, Russia. Revenues generated by the sales to these business partners make up 75% and 68% of the total sales in 2010 and 2009, respectively.
It is the policy of the Group to transact with financially sound companies where there is no risk of collection.
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. The carrying amounts of the Group's foreign-currency denominated monetary assets and monetary liabilities at the reporting date are provided in the table below using exchange rates of the Croatian National Bank:
| Assets | Liabilities | Net currency position | ||||
|---|---|---|---|---|---|---|
| 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |
| EUR | 201,526 | 207,047 | 234,776 | 268,895 | (33,250) | (61,848) |
| RUR | 67,726 | 64,213 | 27,028 | 20,792 | 40,698 | 43,421 |
| USD | 645 | 354 | 1,406 | (761) | 354 | |
| GBP | 9 | 7 | 9 | (7) | ||
| CHF | _ | _ | 20 __ |
__ | (20) ______ |
- _ |
| _ | _ | |||||
| 269,906 __ |
271,614 _ _ |
263,230 __ |
289,874 __ |
6,676 __ |
(18,080) _ _ |
Foreign currency sensitivity analysis
The Group is mainly exposed to the countries using euro as their currency. The following table details the Group's sensitivity to a 2-percent decrease of the Croatian kuna in 2010 and 2009 against the euro. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end. A positive number below indicates an increase in profit where the Croatian kuna changes against the relevant currency for the percentage specified above.
| EUR impact | ||
|---|---|---|
| 2010 | 2009 | |
| Change in exchange differences | 814 | 864 |
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 | ||
|---|---|---|---|---|---|---|---|
| 2010 | Average interest rate |
||||||
| Assets | |||||||
| Non-interest bearing |
131,502 | 80,066 | 533 | - | - | 212,101 | |
| Interest bearing |
11% | 11,155 ___ |
774 ___ |
2,864 ___ |
39,021 ___ |
- ___ |
53,814 ___ |
| 142,657 ___ |
80,840 ___ |
3,397 ___ |
39,021 ___ |
- ___ |
265,915 ___ |
||
| Liabilities | |||||||
| Non-interest bearing |
59,880 | 39,836 | - | - | - | 99,716 | |
| Interest bearing |
4.7 % | 3,917 _ |
2,764 ___ |
82,468 ___ |
84,824 __ |
17,100 __ |
191,073 __ |
63,797 _ |
42,600 ___ |
82,468 ___ |
_ 84,824 ___ |
_ 17,100 ___ |
_ 290,789 ___ |
||
| Difference | 78,860 ___ |
38,240 ___ |
(79,071) ___ |
(45,803) ___ |
(17,100) ___ |
(24,874) ___ |
|
| 2009 | |||||||
| Assets | |||||||
| Non-interest bearing |
133,809 | 85,554 | 719 | - | - | 220,082 | |
| Interest bearing |
9% | 2,077 ___ |
377 ___ |
23,154 ___ |
- ___ |
- ___ |
25,608 ___ |
| 135,866 ___ |
85,931 ___ |
23,873 ___ |
- ___ |
- ___ |
245,690 ___ |
||
| Liabilities | |||||||
| Non-interest bearing |
71,728 | 39,528 | - | - | - | 82,274 | |
| Interest bearing |
6% | 3,206 _ |
7,646 ___ |
114,577 ___ |
107,848 __ |
35,438 __ |
268,598 __ |
| __ 74,934 _ |
47,174 ___ |
114,577 ___ |
107,848 _ |
35,438 _ |
350,872 _ |
||
| Difference | 60,952 _ |
38,757 ___ |
(90,704) ___ |
_ (107,848) ___ |
_ (35,438) ___ |
_ (134,281) ___ |
Financial instruments held to maturity in the ordinary course of business are carried at the lower of cost and net amount less repaid portion.
The fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction, except in the event of a forced sale or liquidation. The fair value of a financial instrument is its quoted market price, or the amount obtained using the discounted cash flow method.
At 31 December 2010, the carrying amounts of cash, receivables, short-term liabilities, accrued expenses, short-term borrowings and other financial instruments approximate their fair values due to the short-term maturity of these financial instruments.
These financial statements were approved by the Management Board of AD Plastik d.d. and authorised for issue on 30 March 2011.
For AD Plastik d.d., Solin:
Josip Boban President of the Managing Board
i) AD Plastik d.d., Solin Unconsolidated financial statements and Independent Auditor's Report For the year ended 31 December 2010
expressed in thousands of Kunas)
| 31/12/2010 | 31/12/2009 (as |
||
|---|---|---|---|
| Notes | restated) | ||
| Sales | 6 | 541,305 | 496,716 |
| Other income | 7 | 20,568 ____ |
14,129 ____ |
| Total income | 561,873 ____ |
510,845 ____ |
|
| Decrease/(Increase) in the value of work in progress and | |||
| finished products | (1,925) | 6,343 | |
| Cost of raw material and supplies | 8 | 274,840 | 223,647 |
| Cost of goods sold | 9 | 23,389 | 30,905 |
| Service costs | 12 | 46,545 | 44,374 |
| Staff costs | 10 | 106,002 | 101,715 |
| Depreciation and amortisation | 11 | 41,073 | 45,488 |
| Other operating expenses | 13 | 39,787 | 38,801 |
| Provisions for risks and charges | 14 | 10,225 ____ |
- ____ |
| Total operating expenses | 539,936 ____ |
491,273 ____ |
|
| Profit from operations | 21,937 ____ |
19,572 ____ |
|
| Finance revenue | 15 | 34,660 | 29,124 |
| Finance cost | 16 | 35,820 ____ |
38,095 ____ |
| Profit / (loss) from financing activities | (1,160) ____ |
(8,971) ____ |
|
| Profit before taxation | 20,777 ____ |
10,601 ____ |
|
| Income tax expense | 17 | 34 ____ |
____ |
| Profit for the year | 20,743 ____ |
10,601 ____ |
|
| Other comprehensive income | 1,696 | - | |
| Total comprehensive income | 22,439 ____ |
10,601 ____ |
expressed in thousands of kunas)
| 31/12/2010 | 31/12/2009 (as restated) |
01/01/2009 (as restated) |
||
|---|---|---|---|---|
| ASSETS | Note s |
|||
| Non-current assets | ||||
| Intangible assets | 19 | 41,069 | 54,660 | 68,228 |
| Tangible assets | 20 | 440,520 | 414,535 | 432,908 |
| Investments in subsidiaries and associates | 21 | 127,240 | 93,018 | 69,503 |
| Other financial assets | 22 | 66,016 | 44,423 | 67,876 |
| Deferred tax assets | 17 | 667 ____ |
____ | ____ |
| Total non-current assets | 675,512 ____ |
606,636 ____ |
638,515 ____ |
|
| Current assets | ||||
| Inventories | 24 | 37,165 | 37,297 | 49,709 |
| Trade receivables | 25 | 149,383 | 196,482 | 158,507 |
| Other receivables | 26 | 37,412 | 31,164 | 38,590 |
| Current financial assets | 27 | 19,037 | 41,616 | 69,288 |
| Cash and bank balances | 28 | 58,618 | 50,771 | 39,501 |
| Prepaid expenses | 23 | 75,527 ____ |
58,540 ____ |
40,224 ____ |
| Total current assets | 377,142 ____ |
415,870 ____ |
395,819 ____ |
|
| TOTAL ASSETS | 1,052,654 ____ |
1,022,506 ____ |
1,034,334 ____ |
| 31/12/2009 | 01/01/2009 | |||
|---|---|---|---|---|
| Notes | 31/12/2010 | (as restated) | (as restated) | |
| Equity | ||||
| Share capital | 30 | 419,958 | 419,958 | 419,958 |
| Reserves | 207,597 | 200,806 | 240,804 | |
| Profit / (loss) for the year | 20,743 ____ |
10,601 ____ |
(37,230) ____ |
|
| Total equity | 648,298 ____ |
631,365 ____ |
623,532 ____ |
|
| Long-term provisions | 30 | 3,332 | ||
| Long-term loans | 31 | 92,831 ____ |
124,239 ____ |
212,101 ____ |
| Total non-current liabilities | 96,163 ____ |
124,239 ____ |
212,101 ____ |
|
| Advances received | 33 | 80,430 | 55,658 | 27,458 |
| Trade payables | 34 | 66,327 | 82,274 | 85,830 |
| Short-term loans | 35 | 143,223 | 116,673 | 59,155 |
| Other current liabilities | 36 | 9,615 | 10,947 | 24,976 |
| Short-term provisions | 30 | 6,893 | - | - |
| Accrued expenses and deferred income | 32 | 1,705 ____ |
1,350 ____ |
1,282 ____ |
| Total current liabilities | 308,193 ____ |
266,902 ____ |
198,701 ____ |
|
| Total liabilities | 404,356 ____ |
391,141 ____ |
410,802 ____ |
|
| TOTAL EQUITY AND LIABILITIES | 1,052,654 ____ |
1,022,506 ____ |
1,034,334 ____ |
n) Unconsolidated Statement of Changes in Shareholders' Equity (all amounts are
expressed in thousands of kunas)
| Share capital |
Capital reserves |
Legal reserves |
Treasury shares reserves |
Treasury shares |
Retained earnings |
Total | |
|---|---|---|---|---|---|---|---|
| Balance at 31 December 2008 Change in accounting policy (see Note 5) |
419,958 | 194,081 | 4,984 | 8,995 | (8,995) | (2,182) | 616,841 |
| Balance at 31 December 2008 – as restated Transfer to Capital Reserves covering prior |
- 419,958 |
- 194,081 |
- 4,984 |
- 8,995 |
- (8,995) |
6,691 4,509 |
6,691 623,532 |
| year losses Acquisition of Treasury |
- | (2,748) | - | - | - | 2,748 | - |
| shares | - | (2,202) | - | 2,768 | (2,768) | (566) | (2,768) |
| Current year net profit Balance at 31 December 2009 – originaly |
- | - | - | - | - | 22,903 | 22,903 |
| reported Change in accounting policy and correction of accounting error (see Note 5) |
419,958 - |
189,131 - |
4,984 - |
11,763 - |
(11,763) - |
29,594 (12,302) |
643,667 (12,302) |
| Balance at 31 December 2009 – as restated Transfer of distributable |
419,958 | 189,131 | 4,984 | 11,763 | (11,763) | 17,292 | 631,365 |
| profits to legal reserves | - | - | 1,145 | - | - | (1,145) | - |
| Dividend paid | - | - | - | - | - | (6,103) | (6,103) |
| Revaluation of assets | - | 1,696 | - | - | - | - | 1,696 |
| Treasury shares revaluation Bonuses to employees |
- | - | - | 194 | (194) | - | - |
| settled by Treasury Shares | - | - | - | (597) | 597 | 597 | 597 |
| Profit for the year Balance at |
- | - | - | - | - | 20,743 | 20,743 |
| 31 December 2010 | 419,958 | 190,827 | 6,129 | 11,360 | (11,360) | 31,384 | 648,298 |
| thousands of kunas) |
||
|---|---|---|
| Cash flows from operating activities | 31/12/2010 | 31/12/2009 |
| Profit for the year | 20,743 | 10,601 |
| Income tax | 34 | - |
| Deferred taxes | (667) | - |
| Depreciation and amortization charge | 41,073 | 45,488 |
| Gains from sale of tangible assets | 6,689 | 1,146 |
| Impairment for trade receivables | 957 | 10,501 |
| Interest expense | 11,475 | 15,194 |
| Interest income | (10,119) | (8,559) |
| Provisions | 10,225 | (14,029) |
| Profit/(loss) from operations before working capital changes | 80,410 | _ _ 60,342 |
| Decrease in inventories | 132 | _ _ 12,412 |
| Decrease/(increase) in trade receivables | 46,142 | (48,476) |
| Decrease in receivable from the state | 6,399 | 815 |
| (Increase)/decrease in other receivable | (12,647) | 6,611 |
| Decrease intrade payables | (15,947) | (3,556) |
| Increase in liabilities for advances received | 24,772 | 28,200 |
| Decrease in other short term payables | (585) | (1,450) |
| Decrease in accrued expenses and deferred income | 355 | 68 |
| Increase in prepaid expenses | (16,987) | (18,316) |
| Interest paid | (12,256) | (13,744) |
| Cash flows provided from operating activities | 99,788 | _ _ 22,906 |
| Treasury shares acquired | - | _ _ (2,768) |
| Increase in investments in subsidiarie and associates | (34,222) | (23,038) |
| Interest collected | 10,119 | 8,559 |
| Increase in tangible and intrangible assets | (58,459) | (15,170) |
| Increase in investment funds | (11,078) | - |
| Decrease in short term loans | 33,657 | 27,672 |
| Decrease/(increase) in long term loans | (21,593) | 23,453 |
| Cash flows from investing activities | (81,576) | _ _ 18,708 |
| Dividends paid | (6,103) | _ _ - |
| Bonuses paid to employees | 597 | - |
| Increase in short term borrowings | 44,342 | 30,518 |
| Decrease in short term borrowings | (19,177) | - |
| Decrease in long term borrowings | (30,024) | (60,862) |
| Cash flows from financing activities | (10,365) | _ _ (30,344) |
| Net cash flows for the year | 7,847 | _ _ 11,270 |
| Cash and cash equivalents at 1 January | 50,771 | _ _ 39,501 |
| Net cash flows for the year | 7,847 | 11,270 |
| Cash and cash equivalents at 31 December | 58,618 | 50,771 |
The accompanying accounting policies and notes form an integral part of these financial statements. The accompanying accounting policies and notes form an integral part of these financial statements. expressed in thousands of kunas)
The company AD Plastik d.d., Solin, (the Company) is a public limited company, involved in the production of motor vehicle spare parts and accessories and of plastic masses in the automotive industry (abbreviated firm: AD PLASTIK d.d.). The company 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 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 entry in the court register.
By the 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 125,987,500.00, effected by OAO Saint Petersburg Investment Company ("OAO SPIK") was registered, and the total subscribed capital now amounts to HRK 419,958,400.00 and consists of 4,199,584 shares, with a nominal amount of HRK 100.00 each. By the agreement on transfer of shares from 29 June 2009 OAO Spik transferred shares of the Company to OAO Group Aerokosmicheskoe Oborudovanie from St. Petersburg
The Company shares were included in the listing of public limited companies on the Official Market of the Zagreb Stock Exchange on 1 October 2010.
The primary activity of the Company comprises manufacture of motor vehicle spare parts and accessories. The registered activities of the Company comprise the following:
At 31 December 2010, the number of staff employed by the Company was 875 (2009: 924).
| Mandate | ||
|---|---|---|
| Members of the Supervisory Board: | ||
| Borut Meh (Chairman) | From 03/10/2008 | To 03/10/2012 |
| Nijaz Hastor | From 16/07/2009 | To 16/07/2013 |
| Nikola Zovko | From 18/07/2008 | To 18/07/2012 |
| Tomislav Dulić | From 11/09/2008 | To 11/09/2012 |
| Ivka Bogdan | From 20/07/2010 | To 20/07/2014 |
| Drandin Dmitrij Leonidovič | From 19/10/2007 | To 19/10/2011 |
| Valerij Pavlovič Kiseljevič | From 19/10/2007 | To 19/10/2011 |
| Marin Milišić | From 16/07/2009 | To 05/05/2010 (resigned) |
| Members of the Management Board: | ||
| Josip Boban (President) | From 01/10/2006 | To 01/10/2011 |
| Ilija Pokrajac | From 01/10/2006 | To 01/10/2011 |
| Ivica Tolić | From 01/10/2006 | To 01/10/2011 |
| Katija Klepo | From 20/02/2008 | To 01/10/2011 |
| Nenad Marković | From 30/05/2008 | To 01/10/2011 |
The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) are effective in the current period:
The amendments and revisions to the existing standards and interpretations and the interpretations and standards effective in the current year did not have a significant impact on the financial statements of the Company.
At the date of authorization of these financial statements the following Standards, revisions and Interpretations were in issue but not yet effective:
The Company has elected not to adopt these Standards, revisions and Interpretations in advance of their effective dates and anticipates that their adoption will have no material impact on the financial statements of the Company in the period of initial application.
Set out below are the principal accounting policies consistently applied in the preparation of the financial statements for the current and prior years.
These financial statements are prepared in accordance with International Financial Reporting Standards and Croatian laws.
The financial statements of the Company have been prepared on the historical cost basis, in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and Croatian laws.
The Company maintains its accounting records in the Croatian language, in Croatian Kuna and in accordance with Croatian laws and the accounting principles and practices observed by enterprises in Croatia.
The preparation of financial statements in conformity with International Financial Reporting Standards (IFRSs) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
The financial statements of the Company represent aggregate amounts of assets, liabilities, capital and reserves of the Company as of 31 December 2010, and the results of 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 Company also prepares its consolidated financial statements in accordance with International Financial Reporting Standards, which include the financial statements of the Company as the parent and the financial statements of the subsidiaries controlled by the Company. In these financial statements, investments in entities controlled by the Company or in which the Company has significant influence are carried at cost less impairment if any. For a full understanding of the financial positions of the Company and its subsidiaries as a group, and the results of their operations and their cash flows for the year, users are advised to read the consolidated financial statements of the Group AD Plastik d.d. Details of the investments are presented in Note 21.
Revenue is measured at the fair value of the consideration received or receivable for products, goods or services sold in the regular course of the Company's operations.
Revenues are stated net of value added tax, estimated returns, discounts and rebates. Revenue is recognised when the amount of the revenue can be measured reliably and when future economic benefits are expected to flow into the Company.
Product sales are recognised when the products are delivered to, and accepted by the customer and when the collectability of the receivables is virtually certain.
Income from the manufacture of tools is recognised using the stage-of-completion method to determine the amount of income and costs attributable to a certain period.
Interest income is recognised on a time basis, using the effective interest method. Interest earned on balances with commercial banks (demand and term deposits) is credited to income for the period as it accrues. Interest on trade debtors is recognised as income upon settlement.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are included in profit or loss in the period in which they are incurred.
Transactions in foreign currencies are translated into Croatian kunas at the rates of exchange in effect at the dates of the transactions. Cash, receivables and payables denominated in foreign currencies are retranslated at the rates of exchange in effect at the date of the statement of financial position. Gains and losses arising on translation are included in the statement of comprehensive income for the year. At 31 December 2010, the official exchange rate of the Croatian kuna against 1 euro (EUR) was HRK 7.385173 (31 December 2009: HRK 7.306199 for EUR 1).
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax is recognised in the income statement, except where it relates to items recognised directly in equity, in which case it is also recognised in equity. Current tax represents tax expected to be paid on the basis of taxable profit for the year, using the tax rate enacted at the balance sheet date, adjusted by appropriate priorperiod items.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates in effect at the balance sheet date.
The measurement of deferred tax liabilities and assets reflects the amount that the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred taxes are not discounted and are classified in the balance sheet as non-current assets and/or noncurrent liabilities. Deferred tax assets are recognised only to the extent that it is probable that the related tax benefit will be realised. At each balance sheet date, the Company reviews the unrecognised potential tax assets and the carrying amount of the recognised tax assets.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities.
In the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over cost.
Tangible fixed assets are recognised initially at cost and subsequently at cost less accumulated depreciation. The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable sales taxes and any directly attributable costs of bringing an asset to its working condition and location for its intended use. Maintenance and repairs, replacements and improvements of minor importance are expensed as incurred. Where it is obvious that expenses incurred resulted in increase of expected future economic benefits to be derived from the use of an item of tangible or intangible assets in excess of the originally assessed standard performance of the asset, they are added to the carrying amount of the asset. Gains or losses on the retirement or disposal of tangible fixed assets are included in the statement of comprehensive income in the period they occur. Depreciation commences on putting an asset into use. Depreciation is provided so as to write down the cost or revalued amount of an asset over the estimated useful life of the asset using the straight-line method as follows:
| Depreciation rate (in %) 2010 |
Depreciation rate (in %) 2009 |
|
|---|---|---|
| 1. Tangible 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 |
| Other | 10.00 | 10.00 |
| 2. Intangible assets |
20.00 | 20.00 |
At each reporting date the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is an indication that the assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
An associate is an entity over which the Company has significant influence but which is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity cost of accounting.
Inventories of raw material and spare parts are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average cost method. Net realisable value represents the estimated selling price in the ordinary course of business less all variable selling costs.
Cost of work in progress and finished products comprises the cost of raw material and supplies, direct labour and other costs and the portion of overheads directly attributable to work in progress.
Small inventory is written off when put in use.
The cost of product inventories i.e. the production costs is based on direct material used, the cost of which is determined using the weighted average cost method, then direct labour costs, and fixed overheads at the actual level of production which approximates the normal capacities, as well as variable overheads that are based on the actual use of the production capacities.
Merchandise inventory is recognised at purchased cost.
Trade debtors and prepayments are carried at nominal amounts less an appropriate allowance for impairment for uncollectible amounts.
Impairment is made whenever there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, the probability of bankruptcy proceedings at the debtor, or default or delinquency in payment are considered objective evidence of impairment. The amount of the impairment loss is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The impairment losses on trade receivables are recognised in the income statement within 'Expenses'.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
Cash comprises account balances with banks, cash in hand, deposits and securities at call or with maturities of less than three months.
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable (i.e. more likely than not) that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of discounting is material, the amount of the provision is the present value of the expenditures expected to be required to settle the obligation, determined using the estimated risk free interest rate as the discount rate. Where discounting is used, the reversal of such discounting in each year is recognised as a financial expense and the carrying amount of the provision increases in each year to reflect the passage of time.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the date of the statement of financial position, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
In the normal course of business the Company makes payments, through salary deductions to mandatory pension funds on behalf of its employees as required by law. All contributions made to the mandatory pension funds are 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 applicable union agreements.
Benefits falling due more than 12 months after the reporting date are discounted to their present value.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each reporting date. Actual gains and losses are recognised in the period in which they arise.
Past service cost is recognised immediately to the extent that the benefits are already vested. Otherwise, it is amortised on a straight-line basis over the average period until the benefits become vested
Financial assets and financial liabilities included in the accompanying financial statements consist of cash and cash equivalents, marketable securities, trade and other receivables, trade and other payables, long-term receivables, loans, borrowings and investments. The details of the recognition and measurement of those items are presented in the corresponding policies.
Investments are recognised and derecognised on a trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Financial assets available for sale are classified as current assets if the management intends to realise those assets within 12 months from the date of the statement of financial position. Every purchase and sale transaction in recognised on the settlement date. Investments are recognised initially at cost, which represents the fair value of the consideration given, including transaction costs. Available-for-sale investments are subsequently measured at fair value, with no deduction of transaction costs, by reference to their market prices prevailing at the date of the statement of financial position. Investments whose fair values cannot be determined are carried at cost and reviewed for impairment at each reporting date.
The effective interest method is a method of calculating the amortised cost of a financial asset or liability, and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial asset or liability, or, where appropriate, a shorter period.
Financial assets are assessed for indicators of impairment at each date of the statement of financial position. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of a financial asset is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account.
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
Contingent liabilities have not been recognised in these financial statements. They are not disclosed unless the possibility of outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but it is disclosed when the inflow of economic benefits becomes probable.
Events after the date of the statement of financial position that provide additional information about the Company's position at that date (adjusting events) are reflected in the financial statements. Post-year-end events that are not adjusting events are disclosed in the notes when material.
In the application of the Company's accounting policies, which are described in Note 3, the directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on past experience and other factors that are considered to be relevant. Actual results may differ from those estimates.
The estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.
Areas of estimation include, but are not limited to, depreciation periods and residual values of property, plant and equipment, and of intangible assets, value adjustment of inventories, impairment of receivables, and litigation provisions. The key areas of estimation in applying the Company's accounting policies that had a most significant impact on the amounts recognized in the financial statements were as follows:
As described in the Note 3.8, the 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. Property, plant and equipment have not been revalued i.e. their carrying amounts correspond with their cost less accumulated depreciation, and the management is satisfied that the market value of the property, plant and equipment is significantly higher than the amounts recognised in the accompanying financial statements.
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 judgments 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 2009, deferred tax assets on available tax differences were recognised.
Management provides for doubtful receivables based on a review of the overall ageing of all receivables and a specific review of significant individual amounts receivable. The allowance for amounts doubtful of collection is charged to the statement of comprehensive income for the year.
The cost of defined benefits is determined using actuarial estimates. Actuarial estimates involve assumptions about discount rates, future salary increases and the mortality or fluctuation rates. Because of the long-term nature of those plans, there is uncertainty surrounding those estimates.
The Company has in 2010 changed its accounting policy for investments in associates. Up to 2010, investments in associates were accounted for using the equity method of accounting and from 2010, the Company adopted the cost method in these financial statements. In accordance with the requirements of International Accounting Standard 8 - Accounting Policies, Changes in Accounting Estimates and Accounting Errors the Company has retrospectively applied the new policy and have made the following changes to the financial statements of previous years.
For the effects of applying the old accounting policy up to 31 December 2008 the Company restated retained earnings and investments in associates by increasing them for HRK 6,691 thousand.
The financial statements for the year ended 31 December 2009 were restated by decreasing financial revenue and investments in associates for a total of HRK 11,825 thousand.
Furthermore, during 2010 the Company has thoroughly reviewed the reported items of tangible assets and found that the construction in progress was overstated at 31 December 2009 for the total amount of HRK 477 thousand. By the same amount the Company restated 2009 financial statements by decreasing tangible assets and increasing expenses.
Sales represent amounts receivable (excluding excise and similar duties) for goods sold and services rendered.
| 541,305 _ _ |
496,716 | |
|---|---|---|
| Foreign sales | 520,452 _ _ |
473,168 |
| Domestic sales | 20,853 | 23,548 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Income from sale of assets | 9,506 | 1,554 |
| Income from bonuses provided by suppliers | 4,786 | 4,290 |
| Income from consumption of own products, goods and services | 1,858 | 1,322 |
| Prior-period income | 1,330 | 3,347 |
| Credit notes - cash discount | - | 1,718 |
| Income upon execution of distress | 167 | 612 |
| Income from co-financing | 600 | 794 |
| Income from damages | 504 | - |
| Rental income | 69 | 127 |
| Other operating income | 1,748 _ _ |
365 |
| 20,568 _ _ |
14,129 |
| 274,840 _ _ |
223,647 | |
|---|---|---|
| Other expenses | 6,964 _ _ |
6,528 |
| Gas for heating in the production process | 2,099 | 1,493 |
| Regular maintenance of machinery | 1,208 | 1,289 |
| Preventive maintenance of machinery | 2,075 | 2,060 |
| Other materials | 2,067 | 2,297 |
| Direct packaging | 10,147 | 9,973 |
| Energy | 13,350 | 13,874 |
| Indirect materials | 92,913 | 49,707 |
| Direct materials | 145,753 | 136,898 |
31/12/2010 31/12/2009
31/12/2010 31/12/2009
Cost of goods sold in the amount of HRK 23,388 thousand (2009: HRK 30,905 thousand) represents the cost of merchandise on stock sold to third parties.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Re-export costs | 16,246 | 26,573 |
| Cost of merchandise | 1,960 | 1,732 |
| Cost of direct material sold | 2,193 | 1,494 |
| Cost of spare parts sold | 2,093 | 193 |
| Other costs of goods sold | 897 _ _ |
913 |
| 23,389 _ _ |
30,905 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Wages and salaries | 55,794 | 54,400 |
| Contributions and personal income taxes from salaries | 23,248 | 22,667 |
| Contributions charged on salaries | 13,948 | 13,600 |
| Reimbursement of costs to employees | 13,012 _ _ |
11,048 |
| 106,002 _ _ |
101,715 |
Reimbursement of costs to employees comprises per diems, overnight accommodation costs and business travel costs, reimbursement of a portion of costs for the use of personal cars for business purposes and other business related costs.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Depreciation (Note 20) | 22,442 | 25,708 |
| Amortisation (Note 21) | 18,631 _ _ |
19,780 |
| 41,073 _ _ |
45,488 |
| Transport | 23,855 | 22,406 |
|---|---|---|
| Rental costs | 5,341 | 5,719 |
| Regular and preventive maintenance costs - machinery | 4,409 | 3,851 |
| Commissions | 2,829 | 3,000 |
| Tool modification costs | 2,016 | 377 |
| Telecommunications | 1,158 | 1,326 |
| Communal fees | 1,145 | 1,240 |
| Forwarding and shipping costs | 1,162 | 1,168 |
| Water supply | 967 | 1,079 |
| Regular and preventive maintenance costs - buildings | 608 | 1,032 |
| Other expenses | 3,055 _ _ |
3,176 |
| 46,545 _ _ |
44,374 |
31/12/2010 31/12/2009
| 39,787 _ _ |
38,801 | |
|---|---|---|
| Other external charges | 6,647 _ _ |
6,616 |
| Professional training costs | 140 | 188 |
| Occupational Health and Safety service costs | 223 | 190 |
| Translation service costs | 181 | 197 |
| Water management fee | 216 | 218 |
| Other fees (Supervisory Board) | 284 | 224 |
| Gifts for employees' children | 227 | 268 |
| Entertainment | 270 | 226 |
| Forest reproduction levies | 362 | 383 |
| Payment operation charges | 546 | 844 |
| Bank charges | 1,559 | 815 |
| Net book value of disposed intangible fixed assets | 1,924 | |
| Net book value of disposed tangible fixed assets | 6,619 | 1,087 |
| Cost of goods provided free of charge | 1,309 | 1,018 |
| Customer complaints | 1,220 | 1,087 |
| Professional service cost | 2,350 | 1,126 |
| Other non-material costs | 1,757 | 1,299 |
| Communal fees for the use of construction plots | 1,425 | 1,408 |
| Insurance premiums | 1,686 | 1,612 |
| Temporary service costs - tools | 10,842 | 19,995 |
Most of other external costs comprise manufacturing of tools for the production of car spare parts per orders of the ultimate car manufacturers and include the cost of the tools, tool modification services, transportation and other handling charges.
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| 34,660 _ _ |
29,124 |
|---|---|
| 1,813 | |
| 22,728 | 20,565 |
| 10,119 | 8,559 |
| _ _ |
| 31/12/2010 | 31/12/2009 |
|---|---|
| 35,820 _ _ |
38,095 | |
|---|---|---|
| Other finance costs | 905 _ _ |
- |
| Foreign exchange losses | 23,440 | 22,901 |
| Interest expense | 11,475 | 15,194 |
Income tax comprises the following:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Current tax | 701 | - |
| Deferred tax | (667) ___ |
- ___ |
| 34 ___ |
- ___ |
The relationship between the accounting profit and tax losses carried forward can be shown as follows:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Profit for the year | 20,777 ___ |
22,903 ___ |
| 70% of entertainment expenses | 198 | 163 |
| 30 % of expenses for the use of personal cars for business purposes | 445 | 490 |
| Taxable deficits | 16 | 23 |
| Fines and penalties | 77 | 70 |
| Interest from related-party relationships | - | 1,412 |
| Written-off receivables | 1,163 | 3,098 |
| Provisions | 3,954 | - |
| Other revenues | 1,696 | - |
| Tax base increasing items (PD Return Form) | ___ 7,549 |
___ 5,256 |
| Dividend income | - | 11,825 |
| Subsequent collection of written-off receivables | 241 | - |
| Government grants for training and education | 123 ___ |
114 ___ |
| Tax base decreasing items (PD Return Form) | 364 ___ |
11,939 ___ |
| Taxable income before tax losses | 27,962 | 16,220 |
| Tax losses | (4,605) ___ |
(16,220) ___ |
| Taxable income for the year | 23,357 ___ |
- ___ |
| Income tax 20% | 4,671 | - |
| Tax incentives | (3,970) ___ |
- ___ |
| Current income tax | 701 ___ |
- ___ |
Movements in tax losses could be shown as follows:
| 2010 | 2009 | |
|---|---|---|
| Balance at 1 January | 4,605 | 20,825 |
| Utilisation of tax losses | (4,605) ___ |
(16,220) ___ |
| Balance at 31 December | - ___ |
4,605 ___ |
The income tax rate effective in the Republic of Croatia for the years 2010 and 2009 was 20%.
The Company is entitled to tax incentive measures, which it utilised in 2010 in accordance with the Act on the Promotion of Investments.
The Ministry of Economy, Labour and Entrepreneurship issued on 28 October 2008 a certificate certifying that the Company, as the Applicant, meets the terms and conditions specified in the Act on the Promotion of Investments (Official Gazette No. 138/06) and is awarded the status of the incentive measure beneficiary.
Under the Investment Project reported in the period of the incentive measure beneficiary status (2008 – 2010), the Company invested into the construction of production facilities, purchases of new Renault part production equipment, opened new jobs and provided advanced training to its employee under the Advanced Training Programme that is a part of the Investment Project..
In Croatia there is no formal procedure for verifying finite amount of taxes when filing tax returns for income tax and VAT. However, the tax liability is subject to review by the relevant tax authorities at any time during the three years after the year in which tax returns were filed.
The reported deferred tax assets arised from temporary differences in the provisions for severance payments and jubilee awards.
Basic earnings per share are determined, by dividing the Company's net profit by the weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary shares redeemed and held by the Company as treasury shares.
| 31.12.2010 | 31.12.2009 | |
|---|---|---|
| Net profit attributable to the | ||
| shareholders (in HRK'000) | 20,743 | 10,601 |
| Weighted average number of shares |
4,075,805 ___ |
4,069,087 ___ |
| Basic earnings per share (in HRK) |
5,09 ___ |
2,61 ___ |
| Licenses | Software | Projects | Total | |
|---|---|---|---|---|
| Cost | ||||
| Balance at 31 December 2008 | 67 | 393 | 89,958 | 90,418 |
| Additions | - ____ |
- ____ |
6,212 ____ |
6,212 ____ |
| Balance at 31 December 2009 | 67 ___ |
393 ___ |
96,170 ___ |
96,630 ___ |
| Additions | - | 365 | 6,598 | 6,963 |
| Disposals and retirements | - ____ |
- ____ |
(1,923) ____ |
(1,923) ____ |
| Balance at 31 December 2010 | 67 ___ |
758 ____ |
100,845 ___ |
101,670 ____ |
| Accumulated amortisation | _ | _ | ||
| Balance at 31 December 2008 | - | 393 | 21,797 | 22,190 |
| Charge for the year | - ____ |
- ____ |
19,780 ____ |
19,780 ____ |
| Balance at 31 December 2009 | ___ | 393 ___ |
41,577 ___ |
41,970 ___ |
| Charge for the year | - ____ |
30 ____ |
18,601 ____ |
18,631 ____ |
| Balance at 31 December 2010 | ___ _ |
423 ____ |
60,178 ___ _ |
60,601 ____ |
| Net book value | ||||
| At 31 December 2010 | 67 ___ _ |
335 ____ |
40,667 ___ _ |
41,069 ____ |
| At 31 December 2009 | 67 ___ |
- ___ |
54,593 ___ |
54,660 ___ |
Projects relate to investments in developing new products which generate revenue in future periods. Accordingly, costs incurred are amortised over a period of achieving economic benefits for the Company
| Assets | ||||||
|---|---|---|---|---|---|---|
| Plant and | under | |||||
| Cost | Land | Buildings | equipment | construction | Other | Total |
| Balance at 31 December | ||||||
| 2008 | ||||||
| Additions | 83,785 | 186,088 | 308,734 | 52,375 | 333 | 631,315 |
| Transfer from assets under | - | - | - | 8,481 | - | 8,481 |
| development | 40,245 | 11,820 | 5,040 | (57,212) | 107 | - |
| Disposals and retirements | - | (1) | (7,375) | - | - | (7,376) |
| Balance at 31 December | ||||||
| 2009 | 124,030 | 197,907 | 306,399 | 3,644 | 440 | 632,420 |
| Additions | 2,017 | - | - | 51,176 | - | 53,193 |
| Transfer from assets under | ||||||
| development | 8,573 | 27,120 | 16,626 | (54,097) | 1,778 | - |
| Disposals and retirements | - | - | (14,608) | - | (3) | (14,611) |
| Balance at 31 December | ||||||
| 2010 | 134,620 | 225,027 | 308,417 | 723 | 2,215 | 671,002 |
| Accumulated depreciation | ||||||
| Balance at 31 December | ||||||
| 2008 | - | 48,676 | 149,418 | - | 313 | 198,407 |
| Charge for the year | - | 2,912 | 22,761 | - | 35 | 25,708 |
| Disposals and retirements | - | - | 6,230 | - | - | (6,230) |
| Balance at 31 December | ||||||
| 2009 | - | 51,588 | 165,949 | - | 348 | 217,885 |
| Charge for the year | - | 2,976 | 19,338 | - | 128 | 22,442 |
| Disposals and retirements | - | - | (9,842) | - | (3) | 9,845 |
| Balance at 31 December | ||||||
| 2010 | - | 54,564 | 175,445 | - | 473 | 230,482 |
| Net book value | ||||||
| At 31 December 2010 | 134,620 | 170,463 | 132,972 | 723 | 1,742 | 440,520 |
| At 31 December 2009 | 124,030 | 146,319 | 140,450 | 3,644 | 92 | 414,535 |
The net book value of land and buildings pledged as collateral with commercial banks as at 31 December 2010 amounts to HRK 255,668 thousand, and the balance of short-term and long-term loans secured by those assets as od the same date was HRK 197,930 thousand.
| Name of subsidiary |
Principal activity | Country of incorporation |
Ownership interest in % |
Amount of equity investment, HRK'000 |
||
|---|---|---|---|---|---|---|
| and business | 2010 | 2009 | 2010 | 2009 | ||
| AD PLASTIK d.o.o. |
Manufacture of other vehicle spare parts and accessories Manufacture of other vehicle spare |
Novo Mesto, Slovenia |
100.00% | 100.00% | 204 | 204 |
| ZAO PHR | parts and accessories Manufacture of other vehicle spare |
Samara, Russian Federation |
99.90% | 89.79% | 13,462 | 9,673 |
| ZAO ADP LUGA | parts and accessories |
Luga, Russian Federation |
100.00% | 100.00% | 61,013 | 61,013 |
| 74,679 | 70,890 | |||||
| Name of associate |
Principal activity | Country of incorporation |
Ownership interest in % |
Amount of equity investment, HRK'000 |
||
| and business | 2010 | 2009 | 2010 | 2009 | ||
| EURO AUTO PLASTIC SYSTEMS FAURECIA AD |
Manufacture of other vehicle spare parts and accessories Manufacture of other vehicle spare |
Mioveni, Romania |
50.00% | 50.00% | 21,755 | 21,755 |
| PLASTIK ROMANIA (FAAR) |
parts and accessories Business and other |
Mioveni, Romania |
49.00% | 49.00% | 336 | 123 |
| SG PLASTIK d.o.o. |
management consultancy Manufacture of other vehicle spare |
Solin, Republic of Croatia |
50.00% | 50.00% | 250 | 250 |
| FAURECIA ADP HOLDING |
parts and accessories |
Nanterre, France |
40.00% | - | 30,220 | - |
| 52,561 | 22,128 | |||||
| Total investments in subsidiaries and associates | 127,240 | 93,018 |
Set out below is a summary of financial information about the subsidiaries:
| 31/12/2010 | 31/12/2009 |
|---|---|
| 61,325 | 57,315 |
| 59,306 | 57,381 |
Annual Year Report of Group AD Plastik 2010 Net assets 2,019 (66) __________ __________ Share in the net assets of the subsidiary __________ 100.00% __________ 100.00%
| ZAO PHR, Samara, Russian Federation | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Total assets | 126,810 | 98,386 |
| Total liabilities | 98,129 | 90,809 |
| Net assets | 28,681 ____ |
7,577 ___ _ |
| Share in the net assets of the subsidiary | 99.90% ____ |
89.79% ___ _ |
| ZAO ADP LUGA, Luga, Russian Federation | 31/12/2010 | 31/12/2009 |
| Total assets | 48,924 | 84,128 |
| Total liabilities | 487 | 44,513 |
| Net assets | 48,437 ____ |
39,615 ____ |
| Share in the net assets of the subsidiary | 100.00% ____ |
100.00% _ ___ |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Long-term loans to subsidiaries | 44.839 | 48.534 |
| Long-term loans to associates | 28.564 | - |
| Long-term loans to unrelated companies | 432 | 21.958 |
| Other financial assets | 64 | 64 |
| Short term portion of long term loans | (7.883) ____ |
(26.133) ____ |
| 66.016 ____ |
44.423 ____ |
Long-term loans to subsidiaries and associates comprise long-term investment loans which bear interest at a rate of 11 percent and mature from four up to eight years.
Prepaid expenses in the amount of HRK 69,250 thousand (2009: HRK 54,069 thousand) represents amounts in respect of the manufacture of tools for a particular 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.
| 31/12/2010 | 31/12/2009 |
|---|---|
| 69,250 | 54,069 |
| 3,400 | 1,631 |
| 2,877 ____ |
2,840 ____ |
| 75,527 ____ |
58,540 ____ |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Raw material and supplies on stock | 21,218 | 20,629 |
| Spare parts | 6,309 | 8,705 |
| Small items and packaging | 12 | 24 |
| Work in progress | 2,430 | 1,792 |
| Finished products | 7,184 | 5,902 |
| Merchandise | 12 _ _ |
245 |
| 37,165 _ _ |
37,297 |
| 149,383 _ _ |
196,482 | |
|---|---|---|
| Impairment allowance on receivables | (11,458) _ _ |
(10,501) |
| Foreign trade receivables | 143,724 | 183,222 |
| Domestic trade receivables | 17,117 | 23,761 |
The average credit period on sales is 75 days. The Company has provided for all for all sued debtors, regardless of the past due period, as well as for all receivables that are past due and assessed as doubtful of collection.
The Company seeks and obtains from its domestic customers debentures as collaterals in the amount of the receivables.
Set out below is an analysis of major trade receivables:
| 149,383 | 196,482 |
|---|---|
| 11,522 _ _ |
50,441 |
| 1,080 | 1,578 |
| 1,325 | 1,337 |
| 2,212 | - |
| 2,219 | 4,077 |
| 2,389 | 3,450 |
| 2,506 | 8,035 |
| 2,527 | 3,667 |
| 4,641 | 3,137 |
| 6,913 | 6,212 |
| 31,575 | 34,521 |
| 32,002 | 28,302 |
| 48,472 | 51,725 |
| _ _ |
Movements in the impairment allowance on domestic trade receivables were as follows:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Balance at beginning of the year | 9,115 | 8,662 |
| Additionally impaired during the year | 697 | 812 |
| Amounts collected or eliminated during the year | (93) | (359) _ _ |
| Total impairment allowance on domestic trade receivables | 9,719 | 9,115 _ _ |
| Balance at beginning of the year | 1,386 | 1,664 |
| Additionally impaired during the year | 1,074 | - |
| Amounts collected or eliminated during the year | (721) | (278) _ _ |
| Total impairment allowance on foreign trade receivables | 1,739 | 1,386 _ _ |
| Total impairment allowance | 11,458 | 10,501 _ _ |
All receivables provided against are under litigation or included in bankruptcy estate. Ageing analysis of impaired receivables:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| 0 - 731 days | 125 | 765 |
| 732 - 1096 days | 1,751 | 107 |
| 1097 - 1827 days | 751 | 3,265 |
| Over 1827 days | 8,831 _ _ |
6,364 |
| 11,458 _ _ |
10,501 |
Ageing analysis of receivables past due but not impaired
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| 1 - 365 days | 26,683 | 66,136 |
| Over 365 days | 4,700 | 11,387 _ _ |
| 31,383 | 77,523 _ _ |
Total trade receivables include receivables from subsidiaries as follows:
| 31/12/2010 | 31/12/2009 |
|---|---|
| 80,475 | 103,685 |
| - | 448 ____ |
| 80,475 | 104,133 ____ |
| _ _ |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Domestic prepayments made | 5,004 | 4,773 |
| Foreign prepayments made | 15,583 | 3,457 |
| Due from the state | 15,433 | 21,832 |
| Amounts due from employees | 930 | 815 |
| Other receivables | 462 | 287 _ _ |
| 37,412 ____ |
31,164 __ |
Amounts due from the State and state institutions comprise receivables from the State Budged in respect of VAT refund, refunds from the Croatian Health Insurance Fund and similar.
Foreign prepayments comprise prepayments made for purchases of production equipment and tools.
| 19,037 ____ |
41,616 __ |
|
|---|---|---|
| Short term portion of long term loans | 7.883 ____ |
26.133 __ |
| Other deposits | 4 | 4 |
| Transit guarantee deposit funds | 72 | 72 |
| Other short-term loans | - | 2,000 |
| Short-term loans to subsidiaries | - | 13,407 |
| Short-term investments in investment funds | 11,078 | - |
2010
| 58,618 _ _ |
50,771 | |
|---|---|---|
| Deposits with a term of up to 3 months | 55,389 _ _ |
45,298 |
| Cash in hand | 6 | 23 |
| Transitory account | - | 32 |
| Foreign account balance | 3,002 | 4,177 |
| Current account balance | 221 | 1,241 |
Subscribed capital amounts to HRK 419,958 thousand and consits of 4,199,580 shares, with a nominal value of HRK 100.00 per share (2009: HRK 419,958 thousand, 4,199,580 shares, with a nominal value of HRK 100 each).
The shareholders with over 2 percent of the shares at 31 December 2010 were as follows:
| Number | Ownership | ||
|---|---|---|---|
| Headquarters | of shares | in % | Type of account |
| Saint Petersburg, Russia | 1,259,875 | 30.00% | Primary account |
| Slovenj Gradec, Slovenia | 1,081,770 | 25.76% | Primary account |
| Zagreb, Croatia | 134,108 | 3.19% | Custody account |
| Zagreb, Croatia | 127,652 | 3.04% | Primary account |
| Solin, Croatia | 123,779 | 2.95% | Treasury shares |
Out of 123.779 treasury shares, 25.571 are kept off the balance sheet as they were acquired without compensation. Fair value of these treasury shares at 31 December 2010 amounted to HRK 2,958 thousand.
| Short-term: | Long-term: | |||
|---|---|---|---|---|
| At 31 December 2010 |
At 31 December 2009 |
At 31 December 2010 |
At 31 December 2009 |
|
| Jubilee awards (long-service benefits) | - | - | 1,936 | - |
| Termination benefits | - | - | 1,396 | - |
| Legal actions | 3,730 | - | - | - |
| Vacation accrual | 3,163 ____ |
- ____ |
- ____ |
- ____ |
| 6,893 ____ |
____ | 3,332 ____ |
____ |
According to the Union Agreement, the Company has the obligation to pay long-service (jubilee awards), retirement and other benefits to employees. There are no other compensations to the employees after retirement.
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 necessary provisions are discount rate of 6.21% and the rate of fluctuation of 1.07%.
| Long-term borrowings | 123,170 _ _ |
153,194 |
|---|---|---|
| 123,170 | 153,194 | |
| Current portion of long-term borrowings | (30,339) _ _ |
(28,955) |
| Total long-term borrowings | 92,831 _ _ |
124,239 |
31/12/2010 31/12/2009
Long-term borrowings comprise investment loans from Croatian bank for reconstruction and development ("the HBOR") which bear interest rate of 4 percent, as well as long-term loans from commercial banks with interest rates ranging from 3.16 to 6 percent. AD Plastik d.d. services regularly all of its obligations under those borrowings, in line with the terms and conditions of the underlying loan agreements.
Movements in long-term borrowings during the year:
| 2010 | 2009 | |
|---|---|---|
| Balance at 1 January | 153,194 | 212,101 |
| New loans raised Amounts repaid |
- (30,024) |
- (31,907) |
| Long-term loans refinanced using short-term loans | _ _ | (27,000) |
| Total long-term borrowings | 123,170 _ _ |
153,194 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Due to the State and State institutions | 593 | 709 |
| Amounts due to employees | 56 | - |
| Other current liabilities | 1,056 ____ |
641 ____ |
| 1,705 ____ |
1,350 ____ |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Domestic customers | 2,481 | - |
| Foreign customers | 77,949 _ _ |
55,658 |
| 80,430 _ _ |
55,658 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Domestic trade payables | 16,741 | 25,325 |
| Foreign trade payables | 49,586 _ _ |
56,949 |
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Short-term loans - principal payable | 111,621 | 84,118 |
| Short-term loans - interest payable | 1,261 | 2,073 |
| Current portion of long-term borrowings | 30,339 | 28,955 |
| Other short-term financial liabilities | 2 _ _ |
1,527 |
| 143,223 _ _ |
116,673 |
Short-term loans represent revolving facilities provided by commercial banks and short-term HBOR loans for export and import preparation, with the interest rate of 5 percent.
66,327 82,274 __________ __________
| 12 _ _ |
856 |
|---|---|
| 5,227 | 7,090 |
| 4,376 | 3,001 |
| Receivables | Liabilities | |||
|---|---|---|---|---|
| Trade receivables and liabilities | 2010 | 2009 | 2010 | 2009 |
| AD PLASTIK d.o.o. , Slovenia | 48,472 | 51,725 | 14 | 83 |
| ZAO PHR, Russia | 76,841 | 76,683 | 289 | 654 |
| ZAO ADP LUGA , Russia | - | 38,066 | 36,966 _ _ _ _ |
253 |
| 125,313 | 166,474 | 37,269 _ _ _ _ |
990 |
| Revenue | Expenses | |||
|---|---|---|---|---|
| Operating income and expenses | 2010 | 2009 | 2010 | 2009 |
| AD PLASTIK d.o.o. , Slovenia | 156,820 | 142,030 | 94 | 185 |
| ZAO PHR, Russia | 25,192 | 16,497 | 2,534 | 2,494 |
| ZAO ADP LUGA , Russia | 13,688 _ _ _ _ |
21,844 | 929 | 674 |
| 195,700 _ _ _ _ |
180,371 | 3,557 | 3,353 | |
| Revenue | Expenses | |||
| Financial income and expenses | 2010 | 2009 | 2010 | 2009 |
| AD PLASTIK d.o.o. , Slovenia | 1,300 | 799 | 609 | 1,176 |
| ZAO PHR, Russia | 7,225 | 3,726 | 1,581 | 1,909 |
| ZAO ADP LUGA , Russia | 4,880 _ _ _ _ |
1,749 | 3,383 | 883 |
| 13,405 | 6,274 | 5,573 | 3,968 |
The Company's gearing ratio, expressed as the ratio of net debt to equity:
| 31/12/2010 | 31/12/2009 | |
|---|---|---|
| Short-term borrowings | 143,223 | 116,673 |
| Long-term borrowings | 92,831 | 124,239 |
| Cash and cash equivalents | 58,618 | 50,771 |
| Net debt | _ 177,436 _ |
_ 190,141 _ |
| Equity Net debt-to-equity ratio |
648,348 27.37% |
631,365 30.12% |
2010
| 127,240 | 93,018 |
|---|---|
| 73,899 | 70,556 |
| 149,383 | 196,482 |
| 22,055 | 9,408 |
| 11,078 | - |
| 58,617 | 50,771 |
| 236,054 | 240,912 |
| 66,331 | 83,165 |
| 85,669 | 63,604 |
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.
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.
2010
The Company is exposed to credit risk through loans and trade receivables. Loans are granted to its subsidiaries and as such credit risk is under the control of the Company. Trade receivables are presented net of allowance for bad and doubtful accounts.
The five largest customers of the Company are AD Plastik, Slovenia, Visteon Germany, Hella Saturnus Slovenia, Revoz Slovenia and Ford Motor Germany. Revenues generated by the sales to these business partners makes 74% and 68% of total sales in 2010 and 2009, respectively.
It is the policy of the Company to transact with financially sound companies where there is no risk of collection.
The Company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. The carrying amounts of the Company's foreign-currency denominated monetary assets and monetary liabilities at the reporting date are provided in the table below using exchange rates of the Croatian National Bank:
| As at 31 December | Assets | Liabilities | Net position | |||
|---|---|---|---|---|---|---|
| 2010. | 2009. | 2010. | 2009. | 2010. | 2009. | |
| EUR | 270,178 | 320,587 | 224,246 | 264,268 | 45,932 | 56,319 |
| RUR | 28,619 | - | 36,971 | - | (8,352) | - |
| USD | 645 | 354 | 1,406 | 1,290 | (761) | (936) |
| GBP | 9 | - | - | 7 | 9 | (7) |
| CHF | - | - | 20 | - | (20) | - |
| _ | _ | __ | __ |
_ |
__ |
|
| 299,451 __ |
320,941 __ |
262,643 ___ |
265,565 _ |
36,808 ______ |
55,376 ______ |
|
| _ | __ | ___ |
The Company is mainly exposed to the countries using euro as their currency. The following table details the Company's sensitivity to a 2-percent change of the Croatian kuna in 2010 and 2009 against the EUR. The sensitivity analysis includes only outstanding monetary items denominated in foreign currencies and their conversion at the end of the period. A positive number below indicates an increase in profit where the Croatian kuna strengthens against the relevant currency for the percentage specified above.
| EUR impact | ||
|---|---|---|
| 2010 | 2009 | |
| Positive exchange rate difference | 918 | 1,126 |
In the opinion of the management, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk.
Ultimate responsibility for liquidity risk management rests with the Management Board. The Company manages its liquidity using banking facilities (overdrafts) and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial assets and liabilities. The tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities based on the earliest date on which the Company can require payment i.e. can be required to pay.
| Up to 1 month |
1 to 3 months |
3 months to 1 year |
1 to 5 years |
Over 5 years |
Total | |
|---|---|---|---|---|---|---|
| 2010 Interes t rate |
||||||
| Assets | ||||||
| Non-interest bearing | 127,306 | 69,210 | 11,485 | - | - | 208,001 |
| Interest bearing 11% |
- ___ __ |
3,817 _ |
23,451 ___ |
76,690 ___ |
11,357 _ _ |
115,315 |
| 127,306 ___ __ |
73,027 | 34,936 ___ |
76,690 ___ |
11,357 _ _ |
323,316 | |
| Liabilities | _ | |||||
| Non-interest bearing | 40,527 | 31,030 | - | - | - | 71,557 |
| Interest bearing 4.7 % |
3,917 _ |
27,875 ______ |
98,585 __ |
84,735 _ |
17,026 _ |
232,138 _ |
44,444 _ __ |
___ 58,905 _ |
_ 98,585 ___ |
84,735 _ |
17,026 _ ___ |
__ 303,695 |
|
| Diff. | 82,862 ___ __ |
14,122 _ |
(63,649) ___ |
(8,045) ___ |
(5,669) _ _ |
19,621 |
| 2009 | ||||||
| Assets | ||||||
| Non-interest bearing | 175,766 | 68,738 | 2,749 | - | - | 247,253 |
| Interest bearing 9% |
4,302 ___ __ |
6,153 _ |
33,843 ___ |
42,966 ___ |
18,016 _ _ |
105,280 |
| 180,068 ___ __ |
74,891 _ |
36,592 ___ |
42,966 ___ |
18,016 _ _ |
352,533 | |
| Liabilities | ||||||
| Non-interest bearing | 49,102 | 33,172 | - | - | - | 82,274 |
| 6% Interest bearing |
3,206 _ |
7,646 ______ |
114,460 __ |
107,848 _ |
35,438 _ |
268,598 _ |
52,308 _______ |
40,818 |
114,460 ________ |
107,848 _______ |
35,438 _______ |
350,872 _______ |
|
| Diff. | 127,760 ___ __ |
34,073 _ |
(77,868) ___ |
(64,882) ___ |
(17,432) _ _ |
1,651 |
Financial instruments held to maturity in the ordinary course of business are carried at the lower of cost and net amount less repaid portion.
The fair value represents the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction, except in the event of a forced sale or liquidation. The fair value of a financial instrument is its quoted market price, or the amount obtained using the discounted cash flow method.
At 31 December 2010, the carrying amounts of cash, receivables, short-term liabilities, accrued expenses, short-term borrowings and other financial instruments approximate their fair values due to the short-term maturity of these financial instruments.
These financial statements were approved by the Management Board of AD Plastik d.d. and authorised for issue on 30 March 2011.
For AD Plastik d.d., Solin:
Josip Boban President of the Management Board
JOSIP BOBAN, President of the Management Board Matoševa 8, 21210 Solin, Croatia Tel. +385 21 20 65 00, Fax. + 385 21 20 64 95 E-mail: [email protected]
ILIJA POKRAJAC, Board member Matoševa 8, 21210 Solin, Croatia Tel. +385 21 20 64 88, Fax. + 385 21 20 64 89 E-mail: [email protected]
IVICA TOLIĆ, Board member for human resources, law, organization and informatics Matoševa 8, 21210 Solin, Croatia Tel. +385 21 20 64 88, Fax. + 385 21 20 64 89 E-mail: [email protected]
KATIJA KLEPO, Board member Matoševa 8, 21210 Solin, Croatia Tel. +385 21 20 64 88, Fax. + 385 21 20 64 89 E-mail: [email protected]
NENAD MARKOVIĆ, Board member Matoševa 8, 21210 Solin, Croatia Tel. +385 21 20 64 88, Fax. + 385 21 20 64 89 E-mail: [email protected]
443057 SAMARA Krasnoglinski rajon Zas. Vintai Russian Federation Tel. +7 846 978 1234, Fax. + 7 846 978 1231 E-mail: [email protected]
Belokranjska 4, 8000 Novo Mesto, Republic of Slovenia Tel. +386 7 337 9820, Fax. + 386 7 337 9821 E-mail: [email protected]
115400 Mioveni, Judetul Arges, Strada Uzinei 2A, Romania
Tel. +40 755 016 858 E-mail: [email protected]
188230 LUGA Lenjingradska oblast Ul. Bolshaya Zarechnaya 1A RUSKA FEDERACIJA Tel. + 7 1372 218 10 Mob. +385 91 200 99 17 E-mail: [email protected]
Rue Heinnape 2 Nanterre FRANCUSKA Tel. +33 1 72 36 73 07 E-mail: [email protected]
Matoševa 8, 21210 Solin, Croatia Tel. +385 21 206 640, Fax. + 385 21 20 64 89 E-mail: [email protected]
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