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City Service SE Interim / Quarterly Report 2013
5564_rns_2013-05-31_216b2406-b3bb-4308-85a6-c2b1c919bc71.pdf
Interim / Quarterly Report
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May 2013
CITYservice
City Service AB
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited)
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 2
Statements of financial position
| Group | Company | |||
|---|---|---|---|---|
| As of 31 March 2013 | As of 31 December 2012 | As of 31 March 2013 | As of 31 December 2012 | |
| Assets | ||||
| Non-current assets | ||||
| Goodwill | 45,121 | 45,121 | - | - |
| Other intangible assets | 75,185 | 76,580 | 5 | 3 |
| Property, plant and equipment | 86,564 | 88,205 | 646 | 419 |
| Investment property | 367 | 370 | - | - |
| Investments into subsidiaries | - | - | 162,045 | 162,045 |
| Investments into associates | 588 | 588 | - | - |
| Non-current financial assets receivables and prepayments | 3,195 | 2,018 | 395 | 395 |
| Deferred income tax asset | 9,745 | 10,149 | 452 | 452 |
| Total non-current assets | 220,765 | 223,031 | 163,543 | 163,314 |
| Current assets | ||||
| Inventories | 6,288 | 5,119 | 1 | 1 |
| Prepayments | 9,684 | 12,269 | 109 | 174 |
| Trade receivables | 113,044 | 118,015 | 16,843 | 29,158 |
| Receivables from related parties (including loans granted) | 1,088 | 950 | 55,906 | 55,084 |
| Other receivables and current assets | 20,912 | 10,124 | 14,006 | 2,253 |
| Cash and cash equivalents | 30,521 | 32,914 | 87 | 129 |
| Total current assets | 181,537 | 179,391 | 86,952 | 86,799 |
| Total assets | 402,302 | 402,422 | 250,495 | 250,113 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 3
Statements of financial position (cont'd)
| Group | Company | |||
|---|---|---|---|---|
| As of 31 March 2013 | As of 31 December 2012 | As of 31 March 2013 | As of 31 December 2012 | |
| Equity and liabilities | ||||
| Equity attributable to equity holders of the Company | ||||
| Share capital | 31,610 | 31,610 | 31,610 | 31,610 |
| Reserves and share premium | 83,002 | 83,002 | 82,991 | 82,991 |
| Foreign currency translation | (2,825) | (2,179) | - | - |
| Retained earnings (deficit) | 77,955 | 71,259 | 36,227 | 32,949 |
| 189,742 | 183,692 | 150,828 | 147,550 | |
| Non-controlling interests | 2,927 | 2,307 | - | - |
| Total equity | 192,669 | 185,999 | 150,828 | 147,550 |
| Liabilities | ||||
| Non-current liabilities | ||||
| Non-current borrowings | 27,937 | 29,716 | 27,937 | 29,716 |
| Financial lease obligations | 6,547 | 6,255 | 282 | 253 |
| Deferred income tax liabilities | 13,623 | 13,398 | - | - |
| Non-current payables | 4,835 | 4,597 | 418 | 390 |
| Total non-current liabilities | 52,942 | 53,966 | 28,637 | 30,359 |
| Current liabilities | ||||
| Current portion of non-current borrowings | 9,418 | 9,498 | 9,418 | 9,418 |
| Current portion of financial lease obligations | 2,000 | 2,749 | 52 | 62 |
| Short term loans | 22,074 | 18,913 | 37,846 | 34,950 |
| Trade payables | 63,305 | 73,687 | 5,860 | 13,189 |
| Payables to related parties (including loans received) | 14,975 | 12,473 | 15,374 | 11,928 |
| Advances received | 14,794 | 17,936 | 1,709 | 1,691 |
| Other current liabilities | 30,125 | 27,201 | 771 | 966 |
| Total current liabilities | 156,691 | 162,457 | 71,030 | 72,204 |
| Total equity and liabilities | 402,302 | 402,422 | 250,495 | 250,113 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 4
Statements of comprehensive income (for the period 1 January – 31 March)
| Group | Company | |||
|---|---|---|---|---|
| 2013 Q1 | 2012 Q1 | 2013 Q1 | 2012 Q1 | |
| Sales | 159,189 | 145,606 | 22,079 | 28,539 |
| Cost of sales | (128,707) | (116,883) | (16,394) | (21,763) |
| Gross profit (loss) | 30,482 | 28,723 | 5,685 | 6,776 |
| General and administrative expenses | (20,618) | (20,947) | (1,645) | (1,999) |
| Other operating income (expenses) | 521 | 330 | 70 | 1,618 |
| Profit (loss) from operations | 10,385 | 8,106 | 4,110 | 6,395 |
| Income from financial and investment activities, net | (1,479) | 1,885 | (251) | (42) |
| Profit (loss) before tax | 8,906 | 9,991 | 3,859 | 6,353 |
| Income tax | (1,590) | (1,989) | (581) | (1,362) |
| Net profit (loss) | 7,316 | 8,002 | 3,278 | 4,991 |
| Other comprehensive income | ||||
| Exchange differences on translation of foreign operations | (646) | 711 | - | - |
| Total comprehensive income for the year, net of tax | 6,670 | 8,713 | 3,278 | 4,991 |
| Attributable to: | ||||
| The shareholders of the Company | 6,696 | 8,074 | 3,278 | 4,991 |
| Non-controlling interests | 620 | (72) | - | - |
| 7,316 | 8,002 | 3,278 | 4,991 | |
| Total comprehensive income attributable to: | ||||
| The shareholders of the Company | 6,050 | 8,785 | 3,278 | 4,991 |
| Non-controlling interests | 620 | (72) | - | - |
| 6,670 | 8,713 | 3,278 | 4,991 | |
| Basic and diluted earnings per share (LTL) | 0.21 | 0.26 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 5
Statements of changes in equity
| Group | Share capital | Share premium | Legal reserve | Foreign currency translation | Other reserves | Retained earnings (deficit) | Total | Non-controlling interest | Total |
|---|---|---|---|---|---|---|---|---|---|
| Balance as of 1 January 2012 | 31,610 | 73,830 | 3,172 | (1,824) | 6,000 | 63,451 | 176,239 | 2,231 | 178,470 |
| Net profit for the year | - | - | - | - | - | 8,074 | 8,074 | (72) | 8,002 |
| Income (expenses) for the year recognised directly in equity | - | - | - | 711 | - | - | 711 | - | 711 |
| Total income and (expense) for the year | - | - | - | 711 | - | 8,074 | 8,785 | (72) | 8,713 |
| Balance as of 31 March 2012 | 31,610 | 73,830 | 3,172 | (1,113) | 6,000 | 71,525 | 185,024 | 2,159 | 187,183 |
| Balance as of 1 January 2013 | 31,610 | 73,830 | 3,172 | (2,179) | 6,000 | 71,259 | 183,692 | 2,307 | 185,999 |
| Net profit for the year | - | - | - | - | - | 6,696 | 6,696 | 620 | 7,316 |
| Income (expenses) for the year recognised directly in equity | - | - | - | (646) | - | - | (646) | - | (646) |
| Total income (expense) for the year | - | - | - | (646) | - | 6,696 | 6,050 | 620 | 6,670 |
| Balance as of 31 March 2013 | 31,610 | 73,830 | 3,172 | (2,825) | 6,000 | 77,955 | 189,742 | 2,927 | 192,669 |
| Company | Share capital | Share premium | Legal reserve | Other reserves | Retained earnings (deficit) | Total | |||
| --- | --- | --- | --- | --- | --- | --- | |||
| Balance as of 1 January 2012 | 31,610 | 73,830 | 3,161 | 6,000 | 33,087 | 147,688 | |||
| Net profit for the year | - | - | - | - | 4,991 | 4,991 | |||
| Balance as of 31 March 2012 | 31,610 | 73,830 | 3,161 | 6,000 | 38,078 | 152,679 | |||
| Balance as of 1 January 2013 | 31,610 | 73,830 | 3,161 | 6,000 | 32,949 | 147,550 | |||
| Net profit for the year | - | - | - | - | 3,278 | 3,278 | |||
| Balance as of 31 March 2013 | 31,610 | 73,830 | 3,161 | 6,000 | 36,227 | 150,828 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 6
Statements of cash flows
| Group | Company | |||
|---|---|---|---|---|
| 2013 Q1 | 2012 Q1 | 2013 Q1 | 2012 Q1 | |
| I. Cash flows from (to) operating activities | ||||
| I.1. Net profit | 7,316 | 8,002 | 3,278 | 4,991 |
| Adjustments for non-cash items: | ||||
| I.2. Income tax expenses | 1,590 | 1,989 | 581 | 1,362 |
| I.3. Depreciation and amortisation | 4,403 | 3,337 | 32 | 163 |
| I.4. Impairment and discounting of accounts receivable | 2,176 | 2,445 | - | (815) |
| I.5. Financial activity, net | 354 | (1,049) | 164 | (17,045) |
| I.6. (Gain) loss on disposal of property, plant and equipment | (21) | (1,058) | - | (13) |
| 15,818 | 13,666 | 4,055 | (11,357) | |
| Changes in working capital: | ||||
| I.7. (Increase) decrease in inventories | (1,169) | (325) | - | 685 |
| I.8. (Increase) decrease in receivables and other current assets | (8,442) | (38,294) | (359) | 31,463 |
| I.9. (Increase) decrease in prepayments | 2,585 | 4,337 | 65 | (20) |
| I.10. Increase (decrease) in trade payables and payables to related parties | (7,642) | 29,274 | (3,883) | 15,127 |
| I.11. Income tax (paid) | (1,371) | (524) | - | (91) |
| I.12. Increase (decrease) in advances received and other current liabilities | (1,159) | (12,219) | (150) | (1,350) |
| Net cash flows from (to) operating activities | (1,380) | (4,085) | (272) | 34,457 |
| II. Cash flows (to) investing activities | ||||
| II.1. (Acquisition) of non-current assets (except investments) | (1,881) | (847) | (260) | 3,884 |
| II.2. (Acquisition) of investments in subsidiaries and associates (net of cash acquired in the Group) | - | - | - | (27,380) |
| II.3. Interest and dividends received | 55 | - | - | 17,131 |
| II.4. Loans granted | - | (40) | - | (30,306) |
| Net cash flows from (to) investing activities | (1,826) | (887) | (260) | (36,671) |
| III. Cash flows (to) from financing activities | ||||
| III.1. (Repayment) proceeds from loans | 1,247 | (1,617) | 888 | 3,507 |
| III.2. (Repayment) of financial lease liabilities | 77 | (2,076) | 19 | (1,111) |
| III.3. Interest (paid) | (511) | (317) | (417) | (235) |
| Net cash flows from (to) financial activities | 813 | (4,010) | 490 | 2,161 |
| IV. Net (decrease) increase in cash and cash equivalents | (2,393) | (8,982) | (42) | (53) |
| V. Cash and cash equivalents at the beginning of the period | 32,914 | 25,050 | 129 | 216 |
| VI. Cash and cash equivalents at the end of the period | 30,521 | 16,068 | 87 | 163 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 7
Notes to the financial statements
1. General Information
AB City Service (hereinafter – “the Company”) is a public limited liability company registered in the Republic of Lithuania on 28 January 1997.
The Company controls the largest group of integrated utility service companies in Central and Eastern Europe. The City Service group is the market leader in facility management and integrated utility services in the Baltic States. It provides services in the following cities and regions: in the municipalities of Vilnius, Kaunas, Klaipėda, Šiauliai, Alytus, Utena, Marijampolė, Palanga, Trakai, Širvintos, Radviliškis, Neringa, Varėna, Kazlų Rūda, Vilkaviškis, Šilutė and Pagėgiai in Lithuania; in Poland; in Riga and separate regions in Latvia; in St. Petersburg and Stavropol in the Russian Federation.
1.1. Activities
City Service group provides facility management; maintenance and repair of engineering systems; management and renovation of energy resources; technical and energy audit of buildings; waste management and eco-business; maintenance of elevators; maintenance and cleaning of territories.
The most important buildings segment administered by the City Service group: are residential apartment buildings; commercial buildings; public buildings; industrial buildings. The total area of buildings under the management of the Group is 23,8 million sq. m. at present.
1.2. Share Capital of the Company
The share capital of the Company is LTL 31,610 thousand as of 31 March 2013. It is divided into 31,610 thousand ordinary shares with the nominal value of LTL 1 each. All shares of the Company are paid up.
The Company does not have any other classes of shares than ordinary shares mentioned above, there are no any restrictions of share rights or special control rights for the shareholders settled in the Articles of Association of the Company. No shares of the Company are held by itself or its subsidiaries. No convertible securities, exchangeable securities or securities with warrants are outstanding; likewise, there are no outstanding acquisition rights or undertakings to increase share capital.
On 31 March 2013 all 31,610 thousand ordinary shares of the Company are included into the Official List of NASDAQ OMX Vilnius Stock Exchange (ISIN Code of the shares is LT0000127375). Trading Code of the shares on NASDAQ OMX Vilnius Stock Exchange is CTS1L.
1.3. Shareholders of the Company
On 31 March 2013 the total number of shareholders of the Company was 1952.
Company's shares distribution among shareholders as of 31 March 2013 was the following:
| Number of shares held | Owned percentage of the share capital and votes, % | |
|---|---|---|
| ICOR UAB, legal entity code 300021944, address: Konstitucijos av. 7, Vilnius, Lithuania | 20,205,595 | 63.92 % |
| “East Capital Asset Management” AB, registration no. 556546-8435, address: Kungsgatan 33, Stokholm, Sweeden | 3,167,722 | 10.02 % |
| Genesis Asset Managers, LLP, registration no. OC 306866, address: 21 Grosvenor Place, London, United Kingdom | 1,644,183 | 5.20% |
| Other private and institutional shareholders | 6,592,500 | 20.86 % |
| Total | 31,610,000 | 100 % |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 8
1.4. City Service Group
On 31 March 2013 the City Service AB group consists of City Service AB and the following subsidiaries (hereinafter referred to as „the Group“):
| Company | Country | Share of the stock held by the Group as of 31 March 2013 | Share of the stock held by the Group as of 31 Dec 2012 | Main activities |
|---|---|---|---|---|
| UAB Antakalnio büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Aukštaitijos büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Baltijos büstos priežiūra | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Baltijos liftai | Lithuania | 100% | 100% | Elevator installing & tech. support |
| UAB Baltijos NT valdymas | Lithuania | 100% | 100% | Real estate management |
| UAB Baltijos pastatų valdymas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Dainavos büstas | Lithuania | 100% | 100% | Dormant |
| UAB Danės büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Economus | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Ecoservice | Lithuania | 100% | 100% | Collection and removal of waste |
| UAB Justiniškių büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Jūros büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Kauno centro büstas | Lithuania | 100% | 100% | Dormant |
| UAB Karoliniškių büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Komunalinių įmonių kombinatas | Lithuania | 99.71% | 99.71% | Collection and removal of waste |
| UAB Lazdynų butų ūkis | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Lazdynų büstas | Lithuania | 100% | 100% | Dormant |
| UAB Mano büstas LT | Lithuania | 100% | 100% | Commercial real estate management and building maintenance |
| UAB Mano sauga | Lithuania | 51% | 51% | Security services |
| UAB Namų priežiūros centras | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Naujamiesčio büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Nemuno büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Nemuno büstos priežiūra | Lithuania | 100% | 100% | Dormant |
| UAB Pagėgių savivaldybės komunalinis ūkis | Lithuania | 66% | 66% | Dormant |
| UAB Pašilaičių büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Pempininkų büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Radviliškio büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Skolos LT | Lithuania | 100% | 100% | Debt collection services |
| UAB Specialus autotransportas | Lithuania | 100% | 100% | Collection and removal of waste |
| UAB Šiaulių büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Šiaulių liftas | Lithuania | 100% | 100% | Elevator installing & tech. support |
| UAB Šilutės büstas | Lithuania | 99.84% | 99.84% | Administration of dwelling-houses |
| UAB Tvar.com | Lithuania | 100% | 100% | Collection and removal of waste |
| UAB Vėtrungės büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Vilkpėdės büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Vilniaus turgus | Lithuania | 100% | - | Dormant |
| UAB Vingio büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Viršuliškių büstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| UAB Žaidas | Lithuania | 99.33% | 99.33% | Administration of dwelling-houses |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 9
| UAB Žardės būstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
|---|---|---|---|---|
| UAB Žirmūnų būstas | Lithuania | 100% | 100% | Administration of dwelling-houses |
| SIA Riga City Service | Latvia | 100% | 100% | Administration of dwelling-houses |
| City Service Poland Sp .z.o.o | Poland | 100% | 100% | Dormant |
| INTERBUD MAX SP. Z.O.O | Poland, Krakow | 100% | 100% | Dormant |
| Zespół Zarządców Nieruchomości WAM Sp. z o.o. | Poland | 100% | 100% | Administration of dwelling-houses |
| ТОВ Київ Сіті Сервіс | Ukraine | 100% | 100% | Administration of dwelling-houses |
| OAO Сити Сервис / OAO City service | Russia, St. Petersburg | 100% | 100% | Administration of dwelling-houses |
| ЗАО Сити Сервис / ZAO City service | Russia, St. Petersburg | 100% | 100% | Administration of dwelling-houses |
| OAO Специализи-рованное ремонтно-наладочное управление | Russia, St. Petersburg | 100% | 100% | Construction and engineering |
| ООО Жилкомсервис № 3 Фрунзенского района | Russia, St. Petersburg | 80% | 80% | Administration of dwelling-houses |
| ООО «Чистый дом» | Russia, St. Petersburg | 100% | 100% | Maintenance and cleaning of territories |
| ООО «Управляющая компания -1» | Russia, Stavropol | 76% | 76% | Administration of dwelling-houses |
| ООО «ПРОМИНТЕР - управление проектами» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Управляющая компания -2» | Russia, Stavropol | 76% | 76% | Administration of dwelling-houses |
| ООО «Управляющая компания -3» | Russia, Stavropol | 76% | 76% | Administration of dwelling-houses |
| ООО «Управляющая компания -4» | Russia, Stavropol | 76% | 76% | Administration of dwelling-houses |
| ООО «Управляющая компания -5» | Russia, Stavropol | 76% | 76% | Administration of dwelling-houses |
| ООО «УК -5» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Управляющая компания -6» (legal entity code 2635085674) | Russia, Stavropol | 76% | 76% | Administration of dwelling-houses |
| ООО «Управляющая компания -6» (legal entity code 2635105070) | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Жилищная Управляющая компания № 6» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Объединенная управляющая компания – 7» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Обслуживающая управляющая компания-7» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Управляющая компания – 8» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
| ООО «Управляющая компания – 10» | Russia, Stavropol | 100% | 100% | Administration of dwelling-houses |
The Group's and the Company's investment in an associate as of 31 March 2013 included an investment in Marijampolės butų ūkis UAB (34% of the share capital).
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 10
1.5. Company's Board
As of 31 March 2013, the Board of the Company comprises of the following persons:
| Name and surname | Position | Start of term | End of term* |
|---|---|---|---|
| Andrius Janukonis | Board Chairman | October 6, 2009 | April 30, 2017 |
| Gintautas Jaugielavičius | Board Member | October 6, 2009 | April 30, 2017 |
| Darius Leščinskas | Board Member | October 6, 2009 | April 30, 2017 |
| Žilvinas Lapinskas | Board Member | April 30, 2010 | April 30, 2017 |
- The board members of the Company have been elected for the new term in the General Meeting of Shareholders held on 30th April, 2013.
They do not control any shares of the Company.
Andrius Janukonis
Andrius Janukonis (born in 1971) is the Chairman of the Board of AB City Service (since 2009). He holds a Master's degree in Law. He works as a consultant for ICOR UAB and is the chairman of the board of the company (since 2004).
Gintautas Jaugielavičius
Gintautas Jaugielavičius (born in 1971) is a Member of the Board of AB City Service (since 2005). He holds a Bachelor's degree in Economics. At present, he works as a consultant for ICOR UAB and is a member of the board of the company (since 2004).
Darius Leščinskas
Darius Leščinskas (born in 1968) is a Member of the Board of AB City Service (since 2009). He holds a Master's degree in Law. At present, he works as a consultant for ICOR UAB and is a member of the board of the company (since 2004).
Žilvinas Lapinskas
Refer described below (note 1.6).
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 11
1.6. Company's Management
As of 31 March 2013 and as of date of submission of this report, the key managers of the Company and of the Group are as follows:
| Name and surname | Position within the Company | Start of employment |
|---|---|---|
| Žilvinas Lapinskas | General Manager, the Board member | March 1999 |
| Jonas Janukėnas | Financial and Administrative Director | May 2007 |
| Vytautas Turonis | Executive Manager for Lithuania | May 2004 |
| Tomas Augutavičius | Chairman of the Board of City Service group in Russia | June 2006 |
| Edvinas Paulauskas | Commercial Director | February 2005 |
They do not control any shares of the Company.
Žilvinas Lapinskas
Žilvinas Lapinskas (born in 1976) is the General Manager of AB City Service (since 2004). He completed business administration studies. He started working in the Company in 1999 and worked as the Commercial Manager (1999 – 2002) and the Facilities Management Department Head (2002 – 2004).
At present, the main task of the General Manager is to head the Group and take charge of planning and coordination of important development projects in Russia, Poland, as well as other markets in Eastern and Western Europe.
Jonas Janukėnas
Jonas Janukėnas (born in 1976) is the Financial and Administrative Manager of AB City Service (since 2007). Since 2012, Mr Janukėnas is also the Chairman of the Board at Mano būstas LT UAB. He holds a Master's degree in Business Administration. Prior to coming to work at the Company, he worked as the Financial Manager of UAB Litesko (2001 – 2007) and Senior Auditor and Risk Management Consultant at the Vilnius division of Andersen (1998 – 2001).
The Finance and Administrative Manager Jonas Janukėnas is responsible for the management of financial resources of the Group and for supervision of the administrative staff, IT projects implementation and Lean 6 Sigma project.
Vytautas Turonis
Vytautas Turonis (born 1972 m.) is the General Manager at Mano būstas LT UAB and works as the Executive Manager for Lithuania at City Service AB. He holds a Bachelor's degree in International Business. Previously he worked as the Marketing Manager of UAB Specialus Autotransportas (2003 – 2004). He started to work in the Company as the Market Development Department Manager (2004 – 2008).
Vytautas Turonis is responsible for the Group's activities throughout Lithuania.
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 12
1.6. Company's Management (cont'd)
Tomas Augutavičius
Tomas Augutavičius (born 1973 m.) is the Chairman of the Board of City Service group in Russia (since 2009). He holds a Bachelor degree in technology. He started working in the Company as Head of Kaunas Department (2006 - 2009).
The Chairman of the Board of City Service group in Russia Tomas Augutavičius is responsible for activities of companies operating in Russia.
Edvinas Paulauskas
Edvinas Paulauskas (born in 1976) is the Executive Manager at Mano büstas LT UAB and the Commercial Manager at City Service AB. He holds a Bachelor's degree in Environment Engineering. Edvinas Paulauskas started working in the Company in 2005 and worked as the Project Manager (2005-2006) and Executive Manager (2006-2008).
Edvinas Paulauskas is responsible for the facility management projects of commercial and public establishments and for lift maintenance and renovation.
1.7. Activity and Segment Information
Information on main activity segments:
| 2013 Q1 | 2012 Q1 | |||
|---|---|---|---|---|
| Buildings' administration | Buildings' administration | |||
| Resale of utility services | Administration services | Resale of utility services | Administration services | |
| Revenue: Company | - | 22,079 | - | 28,539 |
| Revenue: Group | 42,684 | 116,505 | 49,021 | 96,585 |
Information on main geographical segments for the Group:
| 2013 Q1 | 2012 Q1 | |||||
|---|---|---|---|---|---|---|
| Poland | Baltic states | CIS States | Poland | Baltic states | CIS States | |
| Revenue | 24,410 | 71,721 | 63,058 | - | 61,126 | 84,480 |
| Profit from operations | 2,383 | 7,738 | 264 | - | 6,878 | 1,228 |
| Net profit (loss) | 783* | 6,349 | 184 | - | 6,429 | 1,573 |
*Includes LTL 1,044 thousand foreign currency exchange loss.
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 13
Main activity indicators for the Group:
| 2013 Q1 | 2012 Q1 | Change (%) | |
|---|---|---|---|
| Area of multi-flat apartment buildings under administration (million square meters) | 20.5 | 15.6 | 31.4% |
| Area of public. commercial building and a typical properties under administration (million square meters) | 3.3 | 3.1 | 6.5% |
| Number of employees | 3,889 | 3,478 | 11.8% |
| Sales for the period* | 159,189 | 145,606 | 9.3% |
| Sales (main activity)* | 116,505 | 96,585 | 20.6% |
| Gross margin* | 26.2% | 29.7% | (12%) |
| EBITDA margin* | 12.7% | 11.8% | 7.1% |
| EBIT margin* | 8.9% | 8.4% | 6.2% |
| Net margin* | 6.3% | 8.3% | (24.2%) |
| Number of shares (thousand) | 31,610 | 31,610 | 0% |
| Return on equity | 3.9% | 4.7% | (17.8%) |
| Return on assets | 1.8% | 2.2% | (17.4%) |
| Financial Net Debt to equity** | 15% | 5% | 200.1% |
- Calculated by reducing sales for the resale of utility services.
** Interest bearing debt (net of cash balance) to Shareholders' equity.
2. Accounting Policies
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.
3. Goodwill
| Group | |
|---|---|
| Cost: | |
| Balance as of 1 January 2012 | 69,362 |
| Additions | 4,436 |
| Disposals | (9,248) |
| Balance as of 31 December 2012 | 64,550 |
| Balance as of 31 March 2013 | 64,550 |
| Impairment: | |
| Balance as of 1 January 2012 | 290 |
| Impairment for the year | 19,139 |
| Balance as of 31 December 2012 | 19,429 |
| Impairment for the year | - |
| Balance as of 31 March 2013 | 19,429 |
| Net book value as of 31 March 2013 | 45,121 |
| Net book value as of 31 December 2012 | 45,121 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 14
3. Goodwill (cont'd)
Investments and other changes during the first three months of the year 2013
On 22 February 2013 UAB SKT Environmental Services Klaipėda, code 110734883, after the reorganization was incorporated into UAB Specialus Autotransportas.
On 14 March 2013 the Company through a subsidiary acquired 100% shares of UAB Vilniaus turgus, code 303005920. The value of the acquisition – LTL 68 thousand.
4. Other Intangible Assets
Movement of other intangible assets in 2013 and 2012 is presented below:
| Group | Company | |
|---|---|---|
| Cost: | ||
| Balance as of 1 January 2012 | 86,810 | 1,671 |
| Additions arising from acquisitions of subsidiaries | 12,562 | - |
| Additions | 311 | 45 |
| Disposals of subsidiaries | (12,472) | - |
| Disposals | (8) | (2) |
| Retirements | (189) | - |
| Reorganisation effect | - | (1,699) |
| Balance as of 31 December 2012 | 87,014 | 15 |
| Additions | 9 | 3 |
| Disposals | (5) | - |
| Exchange differences | (347) | - |
| Retirements | (5) | - |
| Balance as of 31 March 2013 | 86,666 | 18 |
| Accumulated amortisation: | ||
| Balance as of 1 January 2012 | 8,118 | 485 |
| Charge for the year | 3,402 | 18 |
| Disposals | - | (1) |
| Disposals of subsidiaries | (987) | - |
| Retirements | (99) | - |
| Reorganisation effect | - | (490) |
| Balance as of 31 December 2012 | 10,434 | 12 |
| Charge for the year | 1,134 | 1 |
| Disposals | (2) | - |
| Exchange differences | (84) | - |
| Retirements | (1) | - |
| Balance as of 31 March 2013 | 11,481 | 13 |
| Net book value as of 31 March 2013 | 75,185 | 5 |
| Net book value as of 31 December 2012 | 76,580 | 3 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 15
5. Property, Plant and Equipment
Movement of property, plant and equipment in 2013 and 2012 is presented below:
| Group | Buildings | Vehicles | Other property, plant and equipment | Construction in progress | Total |
|---|---|---|---|---|---|
| Cost: | |||||
| Balance as of 1 January 2012 | 24,705 | 28,329 | 15,459 | 48 | 68,541 |
| Additions arising from acquisitions of subsidiaries | 15,902 | 1,530 | 20,896 | 280 | 38,607 |
| Additions | 281 | 3,347 | 4,142 | - | 7,770 |
| Disposals | - | (1,944) | (1,069) | - | (3,013) |
| Exchange differences | - | 119 | 34 | 2 | 155 |
| Retirements | - | (1,530) | (3,028) | (1) | (4,559) |
| Balance as of 31 December 2012 | 40,888 | 29,851 | 36,433 | 329 | 107,502 |
| Additions | 58 | 1,756 | 635 | 20 | 2,468 |
| Disposals | - | (219) | (32) | - | (251) |
| Exchange differences | (381) | (34) | (319) | - | (733) |
| Retirements | - | (153) | (124) | - | (277) |
| Balance as of 31 March 2013 | 40,565 | 31,201 | 36,593 | 349 | 108,708 |
| Accumulated depreciation: | |||||
| Balance as of 1 January 2012 | 3,514 | 8,296 | 3,980 | - | 15,790 |
| Charge for the year | 1,120 | 4,249 | 4,338 | - | 9,707 |
| Disposals | - | (1,645) | (890) | - | (2,535) |
| Exchange differences | - | 43 | 17 | - | 60 |
| Retirements | - | (1,124) | (2,602) | - | (3,726) |
| Balance as of 31 December 2012 | 4,634 | 9,819 | 4,843 | - | 19,296 |
| Charge for the year | 637 | 1,193 | 1,439 | - | 3,269 |
| Disposals | - | (208) | (31) | - | (238) |
| Exchange differences | 18 | 38 | 27 | - | 83 |
| Retirements | - | (155) | (112) | - | (266) |
| Balance as of 31 March 2013 | 5,289 | 10,688 | 6,167 | - | 22,143 |
| Net book value as of 31 March 2013 | 35,276 | 20,513 | 30,426 | 349 | 86,564 |
| Net book value as of 31 December 2012 | 36,254 | 20,032 | 31,590 | 329 | 88,205 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 16
6. Borrowings
Borrowings of the Group and the Company as of 31 March 2013 and 31 December 2012 were as follows:
| Creditor | Currency of the loan | Amount of the loan (in currency of the loan) | Final repayment date | Group | Company | ||
|---|---|---|---|---|---|---|---|
| Balance as of 31 March 2013 (in LTL) | Balance as of 31 December 2012 (in LTL) | Balance as of 31 March 2013 (in LTL) | Balance as of 31 December 2012 (in LTL) | ||||
| Current loans | |||||||
| Swedbank, AB (overdraft) | EUR | 1,448 | 17.08.2013 | 5,000 | 5,000 | 5,000 | 5,000 |
| Swedbank, AB (overdraft) | LTL | 5,000 | 17.08.2013 | 3,371 | 83 | 3,371 | 83 |
| Swedbank, AB | EUR | 3,700 | 10.06.2013 | 12,775 | 12,775 | 12,775 | 12,775 |
| DNB bank, AB (UAB Ecoservice) | EUR | 435 | 29.11.2013 | 928 | 928 | - | - |
| AS UniCredit Bank (UAB Tvar.com) | LTL | 350 | 15.02.2013 | - | 127 | - | - |
| Group Account (eliminated in the consolidated group accounts)* | Unspecified | Unspecified | Unspecified | - | - | 16,700 | 17,092 |
| Current loan balance | 22,074 | 18,913 | 37,846 | 34,950 | |||
| Non-current loans | |||||||
| Swedbank, AB | EUR | 10,486 | 09.08.2015 | 16,638 | 18,417 | 16,638 | 18,417 |
| Swedbank, AB | EUR | 6,000 | 10.12.2017 | 20,717 | 20,717 | 20,717 | 20,717 |
| AS UniCredit Bank (UAB Tvar.com) | EUR | 309 | 15.01.2013 | - | 80 | - | - |
| Less: current portion of non-current borrowings | (9,418) | (9,498) | (9,418) | (9,418) | |||
| Non-current loan balance | 27,937 | 29,716 | 27,937 | 29,716 |
- Based overdraft facility agreement signed on 25 August 2008 with the Company, its subsidiaries operating in Lithuania and with Swedbank, AB, the Group can utilise net cash balances of the Company and its subsidiaries operating in Lithuania as intergroup borrowings.
For the loans and overdraft facility the Company and its subsidiaries have pledged to the bank real estate and bank accounts of the Company and its subsidiaries in Lithuania. Certain shares of Group companies, receivables from the main clients for the amount of 5 million LTL and City Service brand are pledged to Swedbank AB as well.
7. Cost of Sales
| Group | Company | |||
|---|---|---|---|---|
| 2013 I Q | 2012 I Q | 2013 I Q | 2012 I Q | |
| Services of subcontractors and materials used | 99,798 | 95,748 | 16,284 | 19,773 |
| Wages and salaries and social security | 24,383 | 17,983 | 109 | 1,988 |
| Cost of goods sold | 829 | 533 | 1 | 2 |
| Depreciation | 2,463 | 1,498 | - | - |
| Other | 1,234 | 1,121 | - | - |
| Total cost of sales | 128,707 | 116,883 | 16,394 | 21,763 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 17
8. General and Administrative Expenses
| Group | Company | |||
|---|---|---|---|---|
| 2013 I Q | 2012 I Q | 2013 I Q | 2012 I Q | |
| Wages and salaries and social security | 9,837 | 10,166 | 718 | 1,139 |
| Allowance for and write-off of receivables | 2,176 | 2,445 | - | (815) |
| Depreciation and amortisation | 1,941 | 1,839 | 32 | 164 |
| Rent of premises and other assets | 671 | 738 | 72 | 143 |
| Commissions for collection of payments | 659 | 1,237 | 10 | 205 |
| Consulting and similar expenses | 590 | 813 | 304 | 392 |
| Utilities | 468 | 459 | 174 | 120 |
| Fuel expenses | 423 | 397 | 27 | 24 |
| Computer software maintenance | 384 | 277 | 4 | 19 |
| Advertising | 277 | 196 | 63 | 71 |
| Transportation | 262 | 292 | 16 | 12 |
| Insurance | 260 | 190 | 16 | 25 |
| Communication expenses | 257 | 303 | 24 | 42 |
| Business trips and training | 207 | 210 | 107 | 81 |
| Taxes other than income tax | 159 | 91 | 5 | 12 |
| Bank payments | 132 | 132 | 2 | 3 |
| Representational costs | 124 | 121 | 34 | 64 |
| Charity and support | 13 | 198 | - | 123 |
| Other | 1,778 | 843 | 37 | 175 |
| Total general and administrative expenses | 20,618 | 20,947 | 1,645 | 1,999 |
9. Other Operating Income (expenses), net
| Group | Company | |||
|---|---|---|---|---|
| 2013 I Q | 2012 I Q | 2013 I Q | 2012 I Q | |
| Income from rent, net | 56 | 48 | 120 | 3,477 |
| Gain (loss) on disposal of property, plant and equipment | 21 | 1,058 | - | (1,806) |
| Fines and penalties, net | 466 | 738 | - | - |
| Other income (expenses), net | (22) | (1,514) | (50) | (53) |
| Total other operating activity | 521 | 330 | 70 | 1,618 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 18
10. Finance Income and (expenses), net
| Group | Company | |||
|---|---|---|---|---|
| 2013 I Q | 2012 I Q | 2013 I Q | 2012 I Q | |
| Interest income | 155 | 193 | 483 | 326 |
| Foreign currency exchange gain | 221 | 1,563 | 2 | - |
| Other financial income | 30 | 804 | - | - |
| Total finance income | 406 | 2,560 | 485 | 326 |
| Interest (expenses) | (511) | (317) | (647) | (356) |
| Foreign currency exchange loss | (1,192) | (148) | (89) | (3) |
| Other financial (expenses) | (182) | (210) | - | (9) |
| Total finance (expenses) | (1,885) | (675) | (736) | (368) |
| Financial activity, net | (1,479) | 1,885 | (251) | (42) |
11. Related Party Transactions
The parties are considered related when one party has the possibility to control the other one or have significant influence over the other party in making financial and operating decisions. The related parties of the Group and the Company and considered the following:
- Global energy consulting OU (Estonia)– the ultimate shareholder of the Company since 2013;
- UAB ICOR - the shareholder of the Company;
- Subsidiaries of UAB ICOR (same ultimate controlling shareholder);
- Subsidiaries of AB City Service (for the list of the subsidiaries, see also Note 1);
- Mr. Ž. Lapinskas, J. Janukénas, V. Turonis (Management of the Company);
Transactions with related parties include sales and purchases of goods and services in the ordinary course of business, and acquisitions and disposals of property, plant and equipment. Property, plant and equipment to related parties during the first three months of 2013 was sold for the net book value.
The sales price for the intercompany subsidiary purchase and sale transactions are established by the management and shareholders of the UAB ICOR and/or Global energy consulting OU and AB City Service considering the results of independent valuations, if any, undertaken for the purposes of the transfer pricing regulations – which may not always be at their fair value.
There are no guarantees or pledges given or received in respect of the related party payables and receivables. Related party receivables and payables are expected to be settled in cash or set-off against payables / receivables to / from a respective related party.
2013 I Q
| Group | Purchases | Sales | Receivables and prepayments | Loans granted | Payables (long and short-term) |
|---|---|---|---|---|---|
| UAB ICOR | 685 | 7 | - | - | 13,410 |
| Subsidiaries of UAB ICOR: | |||||
| AB Axis Industries | 708 | 856 | 66 | - | 1,283 |
| Other subsidiaries of UAB ICOR | 248 | 666 | 1,028 | - | 207 |
| Total | 1,641 | 1,529 | 1,094 | - | 14,900 |
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]
Consolidated and parent company's interim financial statements for the three months of 2013 (unaudited), thousand Litas
Page 19
12. Subsequent Events
On 10th April the Company concluded the contract with the financial advisor Porta Finance regarding the consultations and search of potential acquirers for 100% of Ecoservice UAB shares. Ecoservice UAB with the subsidiaries supplies waste management and other environmental services in Vilnius, Klaipėda cities and in more than ten other municipalities of Lithuania.
On 11th of April the new subsidiary Sinsta UAB, legal entity code 303039285, was established. The establishment is related to the further development of the cleaning services provided by the Group.
On 30th of April the Ordinary General Meeting of the Shareholders of the Company has been held. The shareholders have distributed the Company's profit of the year 2012 and have elected the Board the Audit Committee of the Company for the new term. Shareholders also approved Ernst & Young Baltic UAB, company code 110878442, for the performance of the audit of the Company's and the Company's set of consolidated financial statements for the year 2013 and for the evaluation of the Company's consolidated annual report. The meeting has also established the payment conditions for the audit services and approved the new redaction of the Articles of Association of the Company.
On 17th of May the share capital of Mano sauga UAB, legal entity code 302628213, was increased by additional contributions from the shareholders. At the date of issue of these financial statements the share capital of Mano sauga UAB amounts to LTL 1,300 thousand and the Group controls 99.26 % shares of the company. Mano sauga UAB provides security services in Lithuania.
AB City Service
Company code 123905633,
Adress: Smolensko st. 12, Vilnius, Lithuania
www.cityservice.lt
[email protected]