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Apranga Group Interim / Quarterly Report 2012
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Interim / Quarterly Report
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APRANGA
GROUP
APRANGA APB
Interim Consolidated Financial Statements
For the Three months period ended 31 March 2012
(UNAUDITED)
4 May 2012
Vilnius
APB APRANGA
Company's code 121933274, Kirtimu 51, Vilnius
INFORMATION ABOUT COMPANY
| Name of the company | Apranga APB |
|---|---|
| Legal form | Public limited liability company |
| Date of registration | 1^{st} March 1993 |
| Code of company | 121933274 |
| Share capital | LTL 55 291 960 |
| Registered office | Kirtimu 51, LT-02244 Vilnius, Lithuania |
| Name of Register of Legal Entities | Registru centras VI, Vilnius branch |
| Telephone number | +370 5 239 08 08 |
| Fax number | +370 5 239 08 00 |
| [email protected] | |
| Internet address | http://www.apranga.lt |
| Main activities | Retail trade of apparel |
| Auditor | PricewaterhouseCoopers UAB |
APB APRANGA
Company's code 121933274, Kirtimu 51, Vilnius
TABLE OF CONTENT
PAGE
REVIEW OF ACTIVITY OF THE GROUP COMPANIES 4-6
FINANCIAL STATEMENTS:
STATEMENT OF COMPREHENSIVE INCOME 7
BALANCE SHEET 8
STATEMENTS OF CHANGES IN EQUITY 9
STATEMENTS OF CASH FLOWS 10
EXPLANATORY NOTES TO THE FINANCIAL STATEMENTS 11-13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
REVIEW OF ACTIVITY OF THE GROUP COMPANIES
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
REVIEW OF ACTIVITY OF THE GROUP COMPANIES
The retail turnover (including VAT) of Apranga Group has made LTL 108.2 million in 1st quarter 2012 or 25.4% more than in 2011. The highest growth rates were recorded in Latvia (30.1%), the lowest – in Estonia (19.9%).
High level of retail turnover growth results was determined by the optimal stock resources during sell-off period, a successful new spring-summer collections sales, good performance of new and reconstructed stores, and faster-than-expected growth in consumption in the Baltic States. According to EUROSTAT data, the retail trade in Baltic States increased very significantly from 7% in Lithuania to 13% in Estonia during the 3 months 2012.
The retail turnover of the Group's stores by countries during the 1st quarter 2012 was (LTL thousand, VAT included):
| Country | 3 months 2012 | 3 months 2011 | Change |
|---|---|---|---|
| Lithuania | 70 154 | 56 235 | 24,8% |
| Latvia | 25 871 | 19 881 | 30,1% |
| Estonia | 12 207 | 10 181 | 19,9% |
| Total: | 108 232 | 86 297 | 25,4% |
The retail turnover of the Group's stores by chains during 3 months 2012 was as follows (LTL thousand, VAT included):
| Chain | 3 months 2012 | 3 months 2011 | Change |
|---|---|---|---|
| Economy | 12 839 | 9 301 | 38,0% |
| Youth | 35 654 | 30 828 | 15,7% |
| Business | 12 321 | 7 592 | 62,3% |
| Luxury | 12 781 | 10 371 | 23,2% |
| Zara | 30 176 | 25 025 | 20,6% |
| Outlets | 4 461 | 3 180 | 40,3% |
| Total | 108 232 | 86 297 | 25,4% |
In 1st quarter 2012, the business chain turnover increased mostly –by 62.3%. In the equivalent influenced both consumption growth and the 3-new Massimo Dutti stores opened (the first Massimo Dutti store was opened in August 2011). Also, high turnover growth rates experienced economy chain and outlets (respectively 38.0% and 40.3%).
During the three months 2012 the Group opened 6, reconstructed 3 and closed 1 store. The capital expenditure of the retail chain expansion amounted to LTL 5.3 million (see Note 4 "Investments into non-current assets"). Investments (acquisitions) by segments are disclosed in Note 3 ("Segment information"). The Group is not engaged in activities related to research and experimental development, except to the extent of process improvement. Group uses the latest technology and the latest technology processes that meet environmental standards and help reduce the negative impact on the environment.
The number of stores by countries was as follows:
| Country | 31 03 2012 | 31 03 2011 | Change |
|---|---|---|---|
| Lithuania | 83 | 75 | 10,7% |
| Latvia | 32 | 31 | 3,2% |
| Estonia | 11 | 10 | 10,0% |
| Total: | 126 | 116 | 8,6% |
The number of stores by chains was as follows:
| Chain | 31 03 2012 | 31 03 2011 | Change |
|---|---|---|---|
| Economy | 12 | 12 | 0,0% |
| Youth | 65 | 60 | 8,3% |
| Business | 15 | 12 | 25,0% |
| Luxury | 16 | 15 | 6,7% |
| Zara | 10 | 10 | 0,0% |
| Outlets | 8 | 7 | 14,3% |
| Total | 126 | 116 | 8,6% |
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
REVIEW OF ACTIVITY OF THE GROUP COMPANIES
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
The total sales area operated by the Group has increased by 3.6% or by 2.3 thousand sq. m. during the period from 31 March 2011 till 31 March 2012. The stores gross area has increased proportionally in all countries – from 2.4% in Latvia till 4.1% in Lithuania.
The total area of stores by countries was as follows (thousand sq. m):
| Country | 31 03 2012 | 31 03 2011 | Change |
|---|---|---|---|
| Lithuania | 42,0 | 40,4 | 4,1% |
| Latvia | 17,9 | 17,5 | 2,4% |
| Estonia | 5,6 | 5,5 | 3,2% |
| Total: | 65,6 | 63,3 | 3,6% |
The Group has earned LTL 5 337 thousand of profit before income tax in three months 2012, while profit before taxes was LTL 1 503 thousand during three months of 2011 (the increase 3.6 times).
EBITDA of the Group was LTL 9 674 thousand during three months 2012, and it was LTL 5 967 thousand in corresponding previous year period (the increase by 62.1%). EBITDA margin has increased from 8.8% to 11.3% during the year. The other return ratios increased accordingly. The liquidity of the Group also strengthened – the current ratio during last twelve month increased to 2.4.
| Main Group Indicators | Q1 2012 | Q1 2011 | Change |
|---|---|---|---|
| Net sales, LTL thousand | 85 835 | 67 895 | 26,4% |
| Net sales in foreign markets, LTL thousand | 30 575 | 24 016 | 27,3% |
| Like-to-like sales | 19,7% | 6,1% | |
| Gross profit, LTL thousand | 37 274 | 29 032 | 28,4% |
| Gross margin | 43,4% | 42,8% | |
| EBT, LTL thousand | 5 337 | 1 503 | 255,1% |
| EBT margin | 6,2% | 2,2% | |
| Net profit (losses), LTL thousand | 4 341 | 1 089 | 298,6% |
| Net margin | 5,1% | 1,6% | |
| EBITDA, LTL thousand | 9 674 | 5 967 | 62,1% |
| EBITDA margin | 11,3% | 8,8% | |
| Return on equity (end of the period) | 3,4% | 1,0% | |
| Return on assets (end of the period) | 2,5% | 0,7% | |
| Net debt to equity* | -4,4% | -0,1% | |
| Current ratio, times | 2,4 | 2,0 | 20,9% |
- (Interest bearing liabilities less cash) / Equity
The operating expenses of the Group totaled LTL 32 193 thousand during 3 months 2012 and increased by 16.4%, comparing to the same period 2011 (while turnovers increased by 25.4% during this period). The finance costs of the Group totaled LTL 16 thousand during 3 months 2012 and decreased 3 times, comparing to the same period 2011. The Group had no finance debts at 31 March 2012 (it was LTL 1.9 million at 31 March 2011).
The level of inventories comparing to that the year before increased from LTL 62.8 million to LTL 74.7 million, or by 19%. That is, a little bit less than the growth of turnovers.
The number of employees during the year till 31 March 2012 in the Group has increased by 138 to 1 375 (11.2%), and increased in Company by 60 to 629 (10.5%).
The average monthly salary in the Group in the 1st quarter 2012 was LTL 2 168, and has increased by 14.5% through the 12 months period.
The price of the Company share during 3 months 2012 increased by 20% from LTL 5.02 per share to LTL 6.04 per share. The maximum share price during the three months period was LTL 6.21 per share, minimum share price - LTL 5.02 per share. In this way, the market capitalization of the Company increased from LTL 278 million at the beginning of the year to LTL 334 million at the end of March 2012. The average price of share during the reporting period was LTL 5.39 per 1 share. The share price during the last 12 months period decreased from LTL 6.70 to LTL 6.04 per share, or 10%.
Page 5 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
REVIEW OF ACTIVITY OF THE GROUP COMPANIES
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
Apranga APB share price during 12 months period from 1st April 2011 to 31st March 2012:
Information about members of the Management board on 31 March 2012:
| Name, Surname | Position | Number of shares owned and part in the share capital | Election date | End of term |
|---|---|---|---|---|
| Darius Juozas Mockus | Chairman of the Board | 981 958 | ||
| 1.78% | 30 04 2010 | 30 04 2014 | ||
| Rimantas Perveneckas | Member of the Board, General Director | 1 000 000 | ||
| 1.81% | 30 04 2010 | 30 04 2014 | ||
| Ilona Simkuniene | Member of the Board, Purchasing Director | 49 573 | ||
| 0.09% | 30 04 2010 | 30 04 2014 | ||
| Ramunas Gaidamavicius | Member of the Board, Development Director | 5 000 | ||
| 0.01% | 30 04 2010 | 30 04 2014 | ||
| Vidas Lazickas | Member of the Board | 32 065 | ||
| 0.06% | 29 04 2011 | 30 04 2014 | ||
| Marijus Strončikas | Member of the Board | 4 365 | ||
| 0.01% | 30 04 2010 | 30 04 2014 |
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
STATEMENT OF COMPREHENSIVE INCOME
| Note | Group | Company | |||
|---|---|---|---|---|---|
| 3 months 2012 | 3 months 2011 | 3 months 2012 | 3 months 2011 | ||
| Revenue | 3 | 85 835 | 67 895 | 40 298 | 33 448 |
| Cost of sales | (48 561) | (38 863) | (26 382) | (22 462) | |
| Gross profit | 37 274 | 29 032 | 13 916 | 10 986 | |
| Operating expenses | (32 193) | (27 653) | (14 776) | (12 871) | |
| Other income | 267 | 192 | 2 119 | 1 673 | |
| Net foreign exchange gain (loss) | 5 | (21) | 4 | 8 | |
| Operating profit (loss) | 5 353 | 1 550 | 1 263 | (204) | |
| Finance costs | 7 | (16) | (47) | (93) | (119) |
| Profit (loss) before income tax | 5 337 | 1 503 | 1 170 | (323) | |
| Income tax expense | (996) | (414) | (260) | 14 | |
| Profit (loss) for the year | 3 | 4 341 | 1 089 | 910 | (309) |
| Other comprehensive income | |||||
| Currency translation difference | (63) | 42 | - | - | |
| TOTAL COMPREHENSIVE INCOME | 4 278 | 1 131 | 910 | (309) | |
| Basic and diluted earnings (losses) per share (in LTL) | 0,08 | 0,02 | 0,02 | (0,01) |
Page 7 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
BALANCE SHEET
| Note | Group | Company | |||
|---|---|---|---|---|---|
| 31 03 | |||||
| 2012 | 31 12 | ||||
| 2011 | 31 03 | ||||
| 2012 | 31 12 | ||||
| 2011 | |||||
| ASSETS | |||||
| Non-current assets | |||||
| Property, plant and equipment | 72 641 | 71 555 | 50 584 | 49 978 | |
| Intangible assets | 516 | 608 | 371 | 445 | |
| Investments in subsidiaries | - | - | 16 101 | 16 101 | |
| Prepayments | 956 | 862 | 346 | 326 | |
| Trade and other receivables | 138 | 151 | 138 | 151 | |
| 74 251 | 73 176 | 67 540 | 67 001 | ||
| Current assets | |||||
| Inventories | 74 664 | 64 034 | 44 099 | 37 035 | |
| Available for sale financial assets | 10 600 | 10 510 | 10 600 | 10 510 | |
| Non-current assets held for sale | 1 118 | 1 118 | 1 118 | 1 118 | |
| Prepayments | 2 161 | 1 831 | 1 464 | 1 349 | |
| Trade and other receivables | 4 891 | 2 440 | 15 675 | 13 393 | |
| Cash and cash equivalents | 5 562 | 8 056 | 2 294 | 3 040 | |
| 98 996 | 87 989 | 75 250 | 66 445 | ||
| TOTAL ASSETS | 3 | 173 247 | 161 165 | 142 790 | 133 446 |
| EQUITY AND LIABILITIES | |||||
| Equity | |||||
| Ordinary shares | 55 292 | 55 292 | 55 292 | 55 292 | |
| Legal reserve | 3 262 | 3 262 | 3 262 | 3 262 | |
| Translation difference | ( 108) | 92 | - | - | |
| Retained earnings | 68 934 | 64 456 | 44 402 | 43 492 | |
| 127 380 | 123 102 | 102 956 | 102 046 | ||
| Non-current liabilities | |||||
| Deferred tax liabilities | 4 193 | 3 763 | 1 570 | 1 335 | |
| Obligations under finance leases | - | - | - | - | |
| Other liabilities | 297 | 392 | 297 | 392 | |
| 4 490 | 4 155 | 1 867 | 1 727 | ||
| Current liabilities | |||||
| Borrowings | 5 | - | 1 178 | 19 038 | 14 053 |
| Obligations under finance leases | - | 3 | - | - | |
| Current income tax liability | 1 465 | 972 | 35 | 79 | |
| Trade and other payables | 39 912 | 31 755 | 18 894 | 15 541 | |
| 41 377 | 33 908 | 37 967 | 29 673 | ||
| Total liabilities | 45 867 | 38 063 | 39 834 | 31 400 | |
| TOTAL EQUITY AND LIABILITIES | 173 247 | 161 165 | 142 790 | 133 446 |
Page 8 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
STATEMENTS OF CHANGES IN EQUITY
| GROUP | Note | Share capital | Legal reserve | Translation reserve | Retained earnings | Total |
|---|---|---|---|---|---|---|
| Balance at 1 January 2011 | 55 292 | 2 912 | ( 385) | 53 950 | 111 769 | |
| Comprehensive income | ||||||
| Profit for the 3 months 2011 | 1 089 | 1 089 | ||||
| Other comprehensive income | ||||||
| Currency translation difference | - | - | 17 | 25 | 42 | |
| Total comprehensive income | - | - | 17 | 1 114 | 1 131 | |
| Balance at 31 March 2011 | 55 292 | 2 912 | ( 368) | 55 064 | 112 900 | |
| Balance at 1 January 2012 | 55 292 | 3 262 | 92 | 64 456 | 123 102 | |
| Comprehensive income | ||||||
| Profit for the 3 months 2012 | - | - | - | 4 341 | 4 341 | |
| Other comprehensive income | ||||||
| Currency translation difference | - | - | ( 200) | 137 | ( 63) | |
| Total comprehensive income | - | - | ( 200) | 4 478 | 4 278 | |
| Balance at 31 March 2012 | 55 292 | 3 262 | ( 108) | 68 934 | 127 380 | |
| COMPANY | Share capital | Legal reserve | Retained earnings | Total | ||
| Balance at 1 January 2011 | 55 292 | 2 912 | 30 953 | 89 157 | ||
| Comprehensive income | ||||||
| Loss for the 3 months 2011 | - | - | ( 309) | ( 309) | ||
| Balance at 31 March 2011 | 55 292 | 2 912 | 30 644 | 88 848 | ||
| Balance at 1 January 2012 | 55 292 | 3 262 | 43 492 | 102 046 | ||
| Comprehensive income | ||||||
| Profit for the 3 months 2012 | - | - | 910 | 910 | ||
| Balance at 31 March 2012 | 55 292 | 3 262 | 44 402 | 102 956 |
Page 9 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
STATEMENTS OF CASH FLOW
| Note | Group | Company | |||
|---|---|---|---|---|---|
| 3 months 2012 | 3 months 2011 | 3 months 2012 | 3 months 2011 | ||
| OPERATING ACTIVITIES | |||||
| Profit (loss) before income taxes | 3 | 5 337 | 1 503 | 1 170 | ( 322) |
| Adjustments for: | |||||
| Depreciation and amortization | 4 321 | 4 417 | 2 180 | 2 177 | |
| Change in allowances for slow-moving inventories | (1 234) | ( 427) | ( 65) | ( 96) | |
| Gain on disposal of property, plant and equipment | ( 4) | ( 21) | ( 4) | ( 21) | |
| Write-off of property, plant and equipment | 27 | 2 | 27 | - | |
| Interest expenses, net of interest income | ( 135) | 37 | ( 61) | 92 | |
| 8 312 | 5 511 | 3 247 | 1 830 | ||
| Changes in operating assets and liabilities: | |||||
| Decrease (increase) in inventories | (9 396) | (10 425) | (6 999) | (6 043) | |
| Decrease (increase) in receivables | (1 862) | 29 | ( 80) | (2 557) | |
| Unrealized foreign exchange loss (gain) | ( 63) | 42 | - | ( 9) | |
| Increase (decrease) in payables | 8 062 | 7 400 | 3 124 | 6 676 | |
| Cash generated from operations | 5 053 | 2 557 | ( 708) | ( 103) | |
| Income taxes paid | ( 73) | ( 13) | ( 83) | ( 11) | |
| Interest paid | 5 | ( 16) | ( 47) | ( 93) | ( 119) |
| Net cash from operating activities | 4 964 | 2 497 | ( 884) | ( 233) | |
| INVESTING ACTIVITIES | |||||
| Interest received | 151 | 10 | 153 | 27 | |
| Loans granted | (26 000) | (8 000) | (29 746) | (12 026) | |
| Loans repayments received | 25 000 | 8 000 | 27 422 | 12 040 | |
| Purchases of property, plant and equipment and intangible assets | 3, 4 | (6 241) | (2 447) | (3 424) | (1 949) |
| Proceeds on disposal of property, plant and equipment | 3, 4 | 903 | 53 | 689 | 347 |
| Purchases of available-for-sale financial assets | ( 90) | - | ( 90) | - | |
| Investment in subsidiaries | - | - | 148 | - | |
| Net cash used in investing activities | (6 277) | (2 384) | (4 848) | (1 561) | |
| FINANCING ACTIVITIES | |||||
| Proceeds from borrowings | - | - | 26 601 | 12 675 | |
| Repayments of borrowings | - | (2 271) | (20 438) | (11 590) | |
| Repayments of obligations under finance leases | ( 3) | ( 2) | - | - | |
| Net cash from financing activities | ( 3) | (2 273) | 6 163 | 1 085 | |
| NET INCREASE (DECREASE) IN CASH AND BANK OVERDRAFTS | (1 316) | (2 160) | 431 | ( 709) | |
| CASH AND BANK OVERDRAFTS: | |||||
| AT THE BEGINNING OF THE PERIOD | 6 878 | 60 | 1 863 | (2 739) | |
| AT THE END OF THE PERIOD | 5 562 | (2 100) | 2 294 | (3 448) |
Page 10 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
NOTES TO INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
NOTES TO INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
1. General information
APB Apranga, (hereinafter "the Company"), was incorporated and commenced its operations in March 1993. The Company's main office is situated in Kirtimu 51, Vilnius, Lithuania. The Company has legal form of public limited liability company under the Law on Companies of Republic of Lithuania. The principal activity of the Company and its subsidiaries (hereinafter "the Group") is retail trade of apparel.
At 31 March 2012 the Group consisted of the Company and the following 100% owned subsidiaries:
| Name | Country | Headquarters | Principal activity |
|---|---|---|---|
| UAB Apranga LT | Lithuania | Kirtimu 51, Vilnius | Retail trade of apparel |
| UAB Apranga BPB LT | Lithuania | Kirtimu 51, Vilnius | Retail trade of apparel |
| UAB Apranga PLT | Lithuania | Kirtimu 51, Vilnius | Retail trade of apparel |
| UAB Apranga SLT | Lithuania | Kirtimu 51, Vilnius | Retail trade of apparel |
| UAB Apranga MLT | Lithuania | Kirtimu 51, Vilnius | Retail trade of apparel |
| SIA Apranga | Latvia | Elizabetes 51, Riga | Retail trade of apparel |
| SIA Apranga LV | Latvia | Elizabetes 51, Riga | Retail trade of apparel |
| SIA Apranga BPB LV | Latvia | Elizabetes 51, Riga | Retail trade of apparel |
| SIA Apranga PLV | Latvia | Elizabetes 51, Riga | Retail trade of apparel |
| SIA Apranga SLV | Latvia | Terbatas 30, Riga | Retail trade of apparel |
| SIA Apranga MLV | Latvia | Terbatas 30, Riga | Retail trade of apparel |
| OU Apranga¹ | Estonia | Pärnu mnt 10/Väike-Karja 12 Tallinn | Retail trade of apparel |
| OU Apranga Estonia | Estonia | Pärnu mnt 10/Väike-Karja 12 Tallinn | Retail trade of apparel |
| OU Apranga BEE | Estonia | Pärnu mnt 10/Väike-Karja 12 Tallinn | Retail trade of apparel |
| OU Apranga PB Trade | Estonia | Pärnu mnt 10/Väike-Karja 12 Tallinn | Retail trade of apparel |
| OU Apranga ST Retail | Estonia | Pärnu mnt 10/Väike-Karja 12 Tallinn | Retail trade of apparel |
¹ 100 % jointly with OU Apranga Estonia
All 55 291 960 ordinary shares of nominal value LTL 1 each (ISIN code LT0000102337) that comprise Company's share capital are listed on Baltic equity list of NASDAQ OMX Vilnius Stock Exchange.
At 20 April 2012 the Company had 3 424 shareholders. Company's shareholders which owned or had under management more than 5% of share capital were:
| Shareholder | Enterprise code | Address | Number of shares | % of total ownership |
|---|---|---|---|---|
| UAB MG Baltic Investment | 123249022 | Jasinskio 16B, Vilnius, Lithuania | 29 677 397 | 53,7% |
| Swedbank AS (Estonia) clients | 10060701 | Liivalaia 8 Tallinn, Estonia | 7 904 001 | 14,3% |
| UAB Minvista | 110685692 | Jasinskio 16, Vilnius, Lithuania | 4 025 719 | 7,3% |
| Swedish clients SEB | 5020329081SE | Sergels Torg 2, Stockholm, Sweden | 2 934 686 | 5,3% |
The ultimate parent company whose financial statements are available for public use is UAB Koncernas MG Baltic. The ultimate controlling individual of the Group is Mr. D. J. Mockus.
2. Basis of preparation and summary of main accounting policies
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU.
The principle accounting policies applied in the preparation of Interim financial statements are the same to those applied in preparation of the Annual financial statements.
The applicable rates used for the balance sheet preparation were as follows:
| Currency | 31 03 2012 | 31 12 2011 | 31 03 2011 | |
|---|---|---|---|---|
| 1 EUR | = | 3.4528 LTL | 3.4528 LTL | 3.4528 LTL |
| 1 LVL | = | 4.9297 LTL | 4.9421 LTL | 4.8679 LTL |
Page 11 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
NOTES TO INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
3. Segment information
Management has determined the operating segments based on the reports reviewed by the General Director and other 6 Directors (responsible for managing, marketing, human resources, purchases, development and finance) that are used to make strategic decisions.
All financial information, including the measure of profit and total assets, is analyzed on a country basis.
The segment information provided to the Directors for the reportable segments for the 3 months 2012 is as follows:
| 3 months 2012 | Lithuania | Latvia | Estonia | Total | Inter-company eliminations | Total in consolidated financial statements |
|---|---|---|---|---|---|---|
| Total segment revenue | 61 559 | 21 234 | 10 393 | 93 186 | - | |
| Inter-segment revenue | (6 299) | (581) | (471) | (7 351) | - | |
| Revenue from external customers | 55 260 | 20 653 | 9 922 | 85 835 | - | 85 835 |
| Gross margin | 42,5% | 44,0% | 47,6% | 43,4% | 43,4% | |
| Profit (loss) for the year | 2 726 | 995 | 620 | 4 341 | - | 4 341 |
| Total assets | 154 900 | 33 468 | 16 393 | 204 761 | (31 514) | 173 247 |
| Additions to non-current assets (other than financial instruments and prepayments for leases) | 4 066 | 1 276 | 209 | 5 551 | (213) | 5 338 |
| 3 months 2011 | Lithuania | Latvia | Estonia | Total | Inter-company eliminations | Total in consolidated financial statements |
| --- | --- | --- | --- | --- | --- | --- |
| Total segment revenue | 50 341 | 16 546 | 8 565 | 75 452 | - | |
| Inter-segment revenue | (6 462) | (791) | (304) | (7 557) | - | |
| Revenue from external customers | 43 879 | 15 755 | 8 261 | 67 895 | - | 67 895 |
| Gross margin | 41,9% | 43,8% | 44,6% | 42,7% | 42,7% | |
| Profit for the year | 720 | 197 | 172 | 1 089 | - | 1 089 |
| Total assets | 134 908 | 31 964 | 17 498 | 184 370 | (32 870) | 151 500 |
| Additions to non-current assets (other than financial instruments and prepayments for leases) | 1 850 | 594 | 3 | 2 447 | 2 447 |
4. Investments into non-current assets
Investments into development and reconstruction of retail network amounted to LTL 5.3 million in 3 months 2012. The Company's investments into retail network have reached LTL 2.7 million, daughter companies - LTL 2.6 million.
5. Borrowings
In November 2011, the Company and SEB bank have signed the amendment to agreement which modified the previous contract on the credit line. According to it, the Group was provided a credit line of LTL 60 000 thousand in order to finance the working capital, issuing guarantees and opening letters of credit. The credit line expires on 30 November 2012, the interests are paid for the amount used and the interest rate is calculated as 1-night VILIBOR plus margin. There is fixed interest rate set for amount used for the issuance of guarantees and letters of credit.
In July 2011, the Company and NORDEA bank have signed the amendment to agreement which modified the previous contract on the guarantees' limit. According to it, the Group was provided a credit line of EUR 5 000 thousand in order to finance the working capital and issuing guarantees. The credit line expires on 30 June 2013. For the drawdown amount of LTL portion of the credit line a floating interest rate calculated as the 1-week VILIBOR
Page 12 of 13
APB APRANGA, company's code 121933274, Kirtimu 51, Vilnius
NOTES TO INTERIM CONSOLIDATED AND COMPANY'S FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2012
(all tabular amounts are in LTL thousands unless otherwise stated)
plus margin is being paid, and for the drawdown amount of EUR portion of the credit line a floating interest rate calculated as the EONIA plus margin is being paid. There is fixed interest rate set for amount used for the issuance of guarantees.
6. Guarantees and letters of credit
As of 31 March 2012 guarantees issued by the credit institutions on behalf of the Company to secure the obligations of its subsidiaries to their suppliers totaled LTL 26 846 thousand (31 December 2011: LTL 24 774 thousand). The letters of credit and guarantees provided to suppliers by the credit institutions on behalf of the Group as of 31 March 2012 amounted to LTL 35 302 thousand (31 December 2011: LTL 32 388 thousand).
As of 31 March 2012 the Company's guarantees issued to secure the obligations of its subsidiaries to their suppliers totaled LTL 1 177 thousand (31 December 2011: LTL 1 278 thousand).
7. Events after the reporting period
The Annual shareholders meeting of APB Apranga held on 27 April 2012 has resolved to pay LTL 20 458 thousand in dividends, and to pay LTL 720 thousand as annual bonuses. The meeting also elected Daiva Paulavičienė as the independent member of the audit committee till the end of term of current audit committee.
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