Annual Report • Mar 31, 2016
Annual Report
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These financial statements have been translated from the original version in Hellenic. In the event that differences exist between this translation and the original Hellenic language financial statements, the Hellenic language financial statements will prevail over this document.
Commercial Refrigerators 15, A. Metaxa Street GR-145 64 Kifissia Athens – Hellas
.
It is confirmed that the present Annual Financial Statements (pages 3 – 155) are compiled according to the L.3873/2010 and L.3556/2007 and the decision 7/448/29.10.2007 of the Hellenic Capital Market Commission and are the ones approved by the Board of Directors of "Frigoglass S.A.I.C." on the 30th of March 2016.
The present Annual Financial Statements are available on the company's website www.frigoglass.com, where they will remain at the disposal of the investing public for at least 5 years from the date of its publication.
Pages
| A) | Board of Directors Statement | 3 | |
|---|---|---|---|
| B) | Board of Directors Report | 4-59 | |
| C) | Independent Auditors Report | 60-61 | |
| D) | Financial Statements for the period st January to 31 December 2015 1 |
62-153 | |
| E) | Information according to article 10 of Law 3401/2005 (Announcements / Notifications that have been sent to the Daily Official List Announcements) |
154 | |
| F) | Summary Financial Statements for the period 1st January to 31st December 2015 |
155 | |
| responsible: | It is asserted that for the preparation of the Financial Statements the following are | ||
| The Chairman of the Board | The Managing Director | ||
| Haralambos David | Nikolaos Mamoulis | ||
| The Group Chief Financial Officer | The Head of Finance | ||
Emmanouil Fafalios Vasileios Stergiou
According to the Law 3556/2007, we state and we assert that from what we know of:
Kifissia, March 30, 2016
The Chairman of the Board The Managing Director The Vice Chairman
Haralambos David Nikolaos Mamoulis Ioannis Androutsopoulos
Concerning the Annual Financial Statements for the year 1 st January – 31st December 2015 Kifissia, 30th of March 2016
Dear Shareholders,
According to the laws 3873/2010 and 3556/2007 and the executive decisions of the Hellenic Capital Market Commission, we are submitting the present annual report of the Board of Directors referring to the Consolidated and the Parent Company financial data for the fiscal year of 2015 (1st January – 31st December 2015).
Frigoglass (the 'Group') is the leading international producer of Ice-Cold Merchandisers (ICMs) and one of the foremost glass container producers in West Africa and the Middle East. Frigoglass is a strategic partner of the global beverage bottlers it serves. The Group's customer base includes most of the significant bottlers in The Coca-Cola System; a number of Pepsi bottlers; several of the world's leading breweries, including Heineken, Diageo, Carlsberg, SABMiller, Efes and AB InBev; and leading dairy companies, including Nestlé and Danone. Frigoglass has a strong relationship with The Coca-Cola System through a long-term ICM supply arrangement with Coca-Cola HBC AG, one of the largest bottlers of non-alcoholic beverages in the world and the second largest independent bottler in The Coca-Cola System by volume and revenue. Additionally, Frigoglass has strong and long-standing relationships with many of its other key customers, many of which are served through both ICM Operations and Glass Operations. This allows Frigoglass to leverage its customer base across both operating segments. The Group's position as a long-standing partner to these customers and relationship with them across both ICM Operations and Glass Operations gives Frigoglass valuable insight into their strategic business and merchandizing needs.
In the ICM Operations, Frigoglass manufactures and sells commercial refrigeration products, as well as related parts and services. Frigoglass ICMs are strategic merchandizing tools for its customers, serving not only to chill their products, but also as retail space and merchandizing tools that encourage immediate consumption of customer products while enhancing Frigoglass customers' brands. Frigoglass works with its customers to provide high quality, bespoke ICM solutions that address their business needs for their various trade channels. Through this close collaboration, Frigoglass helps its customers to realize their strategic merchandizing plans, from conception and development of new, customized ICMs to offering a full portfolio of after-sale services. Frigoglass also helps its customers to achieve their sustainability goals and reduce their carbon footprint through its innovative, environmentally friendly ICM solutions, which consume substantially less energy than conventional ICMs. In the Glass Operations, Frigoglass manufactures and sells glass bottles and containers of high-quality and specification in an array of shapes, sizes, colors and weights to a variety of customers operating primarily in the soft drinks, beer and spirits industries as well as in the cosmetics and pharmaceutical industries. Frigoglass Glass Operations are more regionally focused, concentrating on sales in West Africa, MENA and South East Asia. In Nigeria, Frigoglass Glass Operations also produce plastic crates and metal crowns, allowing the Group to offer its customers a complete packaging solution for their products.
Frigoglass operates in both emerging and mature markets, which exhibit different beverage consumption, macroeconomic and demographic trends, thus offering diversity and creating a range of growth opportunities for its business. Emerging markets exhibit low ICM penetration levels, combined with favorable long-term macroeconomic and demographic trends. These factors provide substantial growth opportunities for Frigoglass and its customers as a result of increased beverage consumption. Despite a high level of ICM penetration and current challenging economic conditions, demand for Frigoglass products in mature markets is primarily driven by its customers' sustainability initiatives, such as carbon footprint reduction, lower energy consumption and demand for innovative and sophisticated products featuring better product performance, trade channel specific customization and high quality after-sale service offerings.
Frigoglass production facilities are located in nine countries: China, Greece, India, Indonesia, Nigeria, Romania, Russia, South Africa and the U.A.E. In March 2014, the Group discontinued its manufacturing operations at Spartanburg, South Carolina, facility. This follows Frigoglass decision to change its operating model in the United States and focus on commercial activities of sales and marketing, distribution and servicing. The Group continues to serve the requirements of its North America customers from its network of existing manufacturing facilities. Later in the year, the Group also integrated the Turkey-based manufacturing volume into its European flagship plant in Timisoara, Romania. As part of this process, Frigoglass' Silivri-based Turkish manufacturing plant ceased operations. The continued productivity improvements following the implementation of Lean manufacturing principles in our plant in Romania have made available sufficient capacity to absorb the volume from Turkey and meet any potential future demand. To strengthen this strategic geographic positioning and reach more key countries, Frigoglass also has stand-alone sales offices in Germany, Kenya, Norway, Poland, the United States, Turkey and the U.A.E. Frigoglass complements its ICM business with an extensive global network of after-sales service representatives which spans five continents serving beverage companies in approximately 77 countries.
The following table presents the consolidated income statements for fiscal years 2015, 2014 and 2013.
in € 000's
| Consolidated | % Change | % Of Net Trade Sales | ||||||
|---|---|---|---|---|---|---|---|---|
| Year ended | ||||||||
| 31.12.2015 31.12.2014 31.12.2013 | 2015 | 2014 | 2015 | 2014 | 2013 | |||
| Net sales revenue | 453.881 | 487.046 | 522.508 | -6,8% | -6,8% | 100,0% 100,0% 100,0% | ||
| Cost of goods sold | (386.887) | (404.380) | (435.093) | -4,3% | -7,1% | 85,2% | 83,0% | 83,3% |
| Gross profit | 66.994 | 82.666 | 87.415 | -19,0% | -5,4% | 14,8% | 17,0% | 16,7% |
| Administrative expenses | (27.367) | (29.178) | (27.595) | -6,2% | 5,7% | 6,0% | 6,0% | 5,3% |
| Selling, distribution & marketing expenses | (24.301) | (26.969) | (28.704) | -9,9% | -6,0% | 5,4% | 5,5% | 5,5% |
| Research & development expenses | (4.434) | (4.138) | (4.313) | 7,2% | -4,1% | 1,0% | 0,8% | 0,8% |
| Other operating income | 8.145 | 7.206 | 2.488 | 13,0% | 189,6% | 1,8% | 1,5% | 0,5% |
| Other |
101 | 8 | 661 | 0,0% | 0,0% | 0,1% | ||
| Operating Profit / |
19.138 | 29.595 | 29.952 | -35,3% | -1,2% | 4,2% | 6,1% | 5,7% |
| Finance |
(37.253) | (34.716) | (29.686) | 7,3% | 16,9% | 8,2% | 7,1% | 5,7% |
| Profit / |
||||||||
| restructing losses & fire & non recurring | ||||||||
| costs | (18.115) | (5.121) | 266 | 254% | 4,0% | 1,1% | 0,1% | |
| activities | - | (36.000) | (16.999) | 0,0% | 7,4% | 3,3% | ||
| Fire Costs | - | (59) | 0,0% | 0,0% | 0,0% | |||
| Non recurring costs | (16.757) | - | - | 3,7% | 0,0% | 0,0% | ||
| Profit / |
(34.872) | (41.180) | (16.733) | -15,3% | 146,1% | 7,7% | 8,5% | 3,2% |
| Income tax expense | (23.443) | (10.948) | (11.453) | 114,1% | -4,4% | 5,2% | 2,2% | 2,2% |
| Profit / |
||||||||
| expenses | (58.315) | (52.128) | (28.186) | 11,9% | 84,9% | 12,8% | 10,7% | 5,4% |
| Attributable to: | ||||||||
| Non controlling interest | 3.771 | 4.374 | 2.076 | -13,8% | 110,7% | 0,8% | 0,9% | 0,4% |
| Shareholders | (62.086) | (56.502) | (30.262) | 9,9% | 86,7% | 13,7% | 11,6% | 5,8% |
| Depreciation | 33.666 | 33.370 | 33.949 | 0,9% | -1,7% | 7,4% | 6,9% | 6,5% |
| Earnings / |
||||||||
| depreciation, amortization, restructing | ||||||||
| losses & fire costs (EBITDA) | 52.804 | 62.965 | 63.901 | -16,1% | -1,5% | 11,6% | 12,9% | 12,2% |
Net sales revenue decreased by 6.8% to €453.9 million for the year ended December 31, 2015. This decline was mainly driven by lower sales in ICM Operations.
Net sales revenue from ICM Operations decreased by 6.8% to €316.6 million for the year ended December 31, 2015, reflecting lower demand by our customers due to the difficult trading conditions in some of our markets. In East Europe, net sales revenue declined by 17.0% to €113.8 million, mainly due to lower sales in Russia. The challenging macroeconomic environment, high consumer price inflation, declining consumer sentiment and reduced consumer purchasing power in the market continued to put pressure on beverage consumption, leading to cautious investments in Coolers by our customers. In this environment, net sales revenue in Russia declined in double digits. In West Europe, net sales revenue declined by 6.5% to €56.8 million following a lower volume outcome due to the production ramp-up of the new ICOOL range in our Romanian plant, primarily during the first half of the year. Net sales revenue in Asia and Oceania marginally decreased by 1.1% to €63.7 million, mainly reflecting lower sales in China. Net sales revenue in Africa and Middle East increased by 4.0% to €68.5 million, cycling a 6.6% decline in the prior year. Last year's net sales revenue was impacted by a one-month strike of metal union workers in South Africa. Net sales revenue in North America reached €13.9 million, from €11.6 million in the year ended December 31, 2014.
Net sales revenue from Glass Operations decreased by 6.9% to €137.2 million for the year ended December 31, 2015. This decline mainly reflects a more difficult trading environment in Nigeria. The erosion of consumer disposable income due to falling global oil prices, currency pressures and rising inflation adversely affected beverage consumption in Nigeria, primarily in the second half of the year.
Cost of goods sold decreased by 4.3% to €386.9 million for the year ended December 31, 2015, primarily due to the sales reduction, lower raw material prices and productivity improvements in the ICM Operations. Overall, cost of goods sold as a percentage of Group's net sales revenue increased to 85.2% from 83.0% in the year ended December 31, 2014, predominately reflecting volume decline in the Cooler business, resulting in lower fixed costs absorption, as well as a less favourable geographic mix due to the lower contribution of our European business and ICOOL's ramp-up related costs.
Administrative expenses decreased by 6.2% to €27.4 million for the year ended December 31, 2015, primarily reflecting lower employee related expenses. The ratio of administrative expenses to net sales revenue remained unchanged to 6.0% for the year ended December 31, 2015.
Selling, distribution and marketing expenses decreased by 9.9% to €24.3 million for the year ended December 31, 2015. This decrease is primarily attributable to lower employee related expenses, warranty expenses and third party fees. As a percentage of net sales revenue, selling, distribution and marketing expenses decreased to 5.4% from 5.5% in the year ended December 31, 2014.
Research and development expenses increased by 7.2% to €4.4 million for the year ended December 31, 2015, mainly due to higher payroll related expenses. As a percentage of net sales revenue, research and development expenses increased to 1.0% from 0.8% in the year ended December 31, 2014.
Other operating income increased to €8.1 million for the year ended December 31, 2015, from €7.2 million in the year ended December 31, 2014.
Finance costs increased by €2.5 million to €37.3 million for the year ended December 31, 2015, negatively affected by a higher average net debt and foreign currency losses.
Frigoglass incurred provisions of €16.8 million in the year ended December 31, 2015 related to inventory write-offs following the launch of energy efficient coolers over the last couple of years and third-party cost related to Glass business disposal process (please refer to Note 29 for further clarifications).
Income tax expense increased by €12.5 million to €23.4 million for the year ended December 31, 2015, negatively impacted by €8.8 million deferred tax asset write-off.
Net losses attributable to shareholders amounted to €62.1 million for the year ended December 31, 2015, compared to a net loss of €56.5 million the same period last year.
Net sales revenue decreased by 6.8% to €487.0 million for the year ended December 31, 2014. This decline reflects lower sales in ICM Operations.
Net sales revenue from ICM Operations decreased by 14.8% to €339.6 million. This reflects lower investments by our customers following sustained macroeconomic challenges in some our key markets. Net sales revenue in Asia and Oceania declined by 32.0% to €64.4 million. This is mainly driven by lower orders in India, Turkey and Indonesia due to unfavorable market conditions and competitive intensity in some of our countries in the region. Lower sales in India reflect the business interruption caused by the fire incident in our plant early in April. The required repairs to the plant were completed rapidly leading to one production line being up and running by the middle of May, with the second line being commissioned in July. Net sales revenue in Africa and the Middle East declined by 6.6% to €65.8 million, mainly driven by lower sales in South Africa and Kenya. In South Africa, net sales revenue were impacted by a one-month strike of metal union workers in July resulting in a short-term production halt and delays in order deliveries. In East Europe, net sales revenue declined by 11.5% to €137.1 million. This was primarily driven by lower customer orders in Ukraine and Russia following the recent economic and political challenges. In a continuing challenging market environment, net sales revenue in West Europe increased by 8.4% to €60.8 million mainly on higher sales in Germany, Sweden and Greece. Net sales revenue decreased by 48.3% to €11.6 million in North America. This reflects our decision to step out of production operations in South Carolina early in 2014 and focus on higher margin coolers supplied by our network of existing manufacturing facilities.
Net sales revenue from Glass Operations increased by 18.8% to € 147.4 million for the year ended December 31, 2014. This sales growth primarily reflects favorable beverage sector fundamentals in our prime Nigerian market and solid growth in the Jebel Ali business following customer base expansion.
Cost of goods sold decreased by 7.1% to €404.4 million, supported by a favorable customer mix in the Glass business, the savings realized from our US operations restructuring initiatives earlier in the year, as well as favorable raw material prices and sourcing benefits in the Cool business. These factors were partly offset by lower volume of sales and a less favorable product mix effect due to lower sales in Europe. Cost of goods sold were also adversely affected by a less favorable raw material mix in the Jebel Ali glass business compared to last year's positive effect from the extensive use of available low-cost cullet in the production process during the first half of the year and reduced export related grants in our Nigerian Glass business. As a result, cost of goods sold as a percentage of Group's net sales revenue declined to 83.0% from 83.3% for the full year.
Administrative expenses increased by 5.7% to €29.2 million. The ratio of administrative expenses to net sales revenue increased to 6.0% from 5.3% in the year ended December 31, 2013.
Selling, distribution and marketing expenses decreased by 6.0% to €27.0 million. This is primarily attributable to lower employee payroll expenses, warranty related expenses and third party fees. As a percentage of net sales revenue, selling, distribution and marketing expenses remained unchanged at 5.5% in the year ended December 31, 2014.
Research and development expenses decreased by 4.1% to €4.1 million. The decrease is primarily attributable to lower third-party and miscellaneous expenses. As a percentage of net sales revenue, research and development expenses remained unchanged at 0.8% in the year ended December 31, 2014.
Other operating income increased to €7.2 million in the year ended December 31, 2014, from €2.5 million a year earlier. This reflects a €3.4 million insurance reimbursement of the Business Interruption following the Indian fire incident in April (please refer to Note 29 for further clarifications).
Finance costs increased by €5.0 million to €34.7 million, primarily reflecting the timing of the corporate bond issuance (May 2013), the amortization of banking related fees, resulting in a higher effective interest cost, and higher foreign exchange losses mainly due to the sharp devaluation of the Russian ruble.
Frigoglass incurred restructuring costs of € 36.0 million related to the discontinuation of our operations in Turkey and a fire costs after insurance reimbursements for Property Damage of € 0.06m related to the fire incident in India (please refer to Note 27 for further clarifications over restructuring and fire costs).
Income tax expense marginally declined to €11.0 million from €11.5 million in the year ended December 31, 2013.
Net losses attributable to shareholders amounted to € 56.5 million, compared to a net loss of €30.8 million in the year ended December 31, 2013.
The following table presents the consolidated statements of cash flow for fiscal years 2015, 2014 and 2013. in € 000's
| Consolidated | |||||
|---|---|---|---|---|---|
| Year ended | |||||
| 31.12.2015 | 31.12.2014 | 31.12.2013 | |||
| Cash Flow from operating activities Profit / |
(34.872) | (41.180) | (16.733) | ||
| Adjustments for: | |||||
| Depreciation | 33.666 | 33.370 | 33.949 | ||
| Finance costs, net | 37.253 | 34.716 | 29.686 | ||
| Provisions | 18.868 | 26.512 | 13.923 | ||
| (101) | (8) | (661) | |||
| Changes in Working Capital: | - | - | |||
| Decrease / (increase) of inventories | (13.631) | 19.527 | 22.718 | ||
| Decrease / (increase) of trade receivables | 12.242 | 4.382 | (13.131) | ||
| Decrease / (increase) of other receivables | (3.550) | (9.020) | 4.288 | ||
| Decrease / (increase) of other long term receivables | (385) | 600 | 462 | ||
| (Decrease) / increase of trade payables | (8.563) | (8.771) | (24.121) | ||
| (Decrease) / increase of other liabilities (excluding | |||||
| borrowing) | (19.001) | (5.642) | (2.128) | ||
| Less: | |||||
| Income taxes paid | (12.697) | (6.386) | (7.879) | ||
| (a) Net cash generated from operating activities | 9. 229 |
48.100 | 40.373 | ||
| Cash Flow from investing activities | |||||
| Purchase of property, plant and equipment | (32.453) | (23.351) | (18.697) | ||
| Purchase of intangible assets | (4.084) | (5.333) | (6.184) | ||
| Acquisition of subsiadiary's non controlling interest | (3.724) | - | - | ||
| Proceeds from disposal of PPE | 417 | 3.087 | 903 | ||
| (b) Net cash generated from investing activities | (39 .844) |
(25.597) | (23.978) | ||
| Net cash generated from operating and investing | |||||
| activities (a) + (b) | (30.615) | 22.503 | 16.395 | ||
| Cash Flow from financing activities | |||||
| Proceeds from loans | 143.543 | 125.081 | 294.322 | ||
| (84.594) | (116.314) | (304.253) | |||
| Interest paid | (26.764) | (26.251) | (24.377) | ||
| Dividends paid to shareholders | - | (28) | (12) | ||
| Dividends paid to non controlling interest | (647) | (318) | (370) | ||
| - | - | 8.816 | |||
| Proceeds from issue of shares to employees | - | - | 235 | ||
| (c) Net cash generated from financing activities | 31.538 | (17.830) | (25.639) | ||
| Net increase / (decrease) in cash and cash | |||||
| equivalents (a) + (b) + (c) | 923 | 4.673 | (9.244) | ||
| Cash and cash equivalents at the beginning | |||||
| of the year | 68.732 | 59.523 | 76.953 | ||
| Effects of changes in exchange rate | (12.163) | 4.536 | (8.186) | ||
| Cash and cash equivalents at the end of the year | 57.492 | 68.732 | 59.523 |
Net cash from operating activities amounted to €9.2 million, compared to net cash from operating activities of €48.1 million in the year ended December 31, 2014. This decrease is primarily attributable to an increase of €13.6 million in inventory, compared to a decrease of €19.5 million in the year ended December 31, 2014.
Net cash from operating activities amounted to €48.1 million in the year ended December 31, 2014, compared to €40.4 million in the year ended December 31, 2013. This increase is primarily attributable to a decrease of €4.4 million in trade receivables, compared to an increase of €13.1 million in the year ended December 31, 2013. It also reflects a decrease of €8.8 million in trade payables, compared a decrease of €24.1 million in the year ended December 31, 2013.
Net cash used in investing activities amounted to €39.8 million in the year ended December 31, 2015, compared to €25.6 million in the year ended December 31, 2014. This increase mainly reflects the furnace rebuild in Nigeria to increase capacity and improve efficiency. Higher capital expenditure also reflects spending related to furnace maintenance in Dubai in the first quarter of 2015.
Net cash used in investing activities amounted to €25.6 million in the year ended December 31, 2014, compared to €24.0 million in the year ended December 31, 2013.
Net cash from financing activities amounted to €31.5 million in the year ended December 31, 2015, compared to net cash used in financing activities of €17.8 million in the year ended December 31, 2014. This increase is primarily attributable to higher net proceeds from bank loans in the year ended December 31, 2015.
Net cash used in financing activities amounted to €17.8 million in the year ended December 31, 2014, compared to net cash from financing activities of €25.6 million in the year ended December 31, 2013. This decrease is primarily attributable to net proceeds from bank loans of €8.8 million compared to net repayments of €9.9 million in the year ended December 31, 2013.
Net trade working capital as of December 31, 2015 amounted to €118.8 million, compared to €125.3 million as of December 31, 2014. This improvement mainly reflects €13.7 million lower trade receivables.
Net trade working capital as of December 31, 2014 amounted to €125.3 million, compared to €140.4 million as of December 31, 2013. This decline is mainly attributed to a reduction in inventory level by €19.5 million following our continued focus on inventory management and a decrease in trade receivables by €4.4 million due to lower sales in the year.
Capital expenditures amounted to €36.5 million, in the year ended 31 December 2015, of which €32.5 million related to the purchase of property, plant and equipment and €4.1 million related to the purchase of intangible assets, compared to €28.7 million in the year ended December 31, 2014, of which €23.4 million related to the purchase of property, plant and equipment and €5.3 million related to the purchase of intangible assets.
Capital expenditure amounted to €24.9 million in the year ended December 31, 2013, of which €18.7 million related to the purchase of property, plant and equipment and €6.2 million related to the purchase of intangible assets.
Details over Frigoglass principal sources of liquidity, material commitments and financing agreements, as well as material debt instruments and credit facilities are set out on to Note 13 "Non-Current & Current Borrowings".
For Frigoglass critical accounting policies and judgments please refer to Notes 2 and 4.
The parent company's major shareholders and related party transactions are set out on Note 20 "Related Party transactions".
For an overview of the Group's management activities and responsibilities, please refer to section 4 "Corporate Governance Statement" of the Board of Directors Statement.
The Parent Company's Net Sales increased by € 2,2 million and reached the amount of € 24,7 million.
Gross Profit decreased by € 0,13 million and reached the amount of € 0,8 million
Profit Before interest, tax, depreciation, amortization & restructuring (EBITDA) decreased by € 1,6 million and reached the amount of € 1,25 million
Losses after tax increased by € 9,2 million and reached the amount of € 15,4 million
In a difficult market environment, we continue to position our business as the global leader in Cooler innovation for our customers. In 2015, we showcased our new product platforms of ICOOL and SMART. The success of ICOOL is reflected by the placement of 52,000 Coolers by Coca-Cola bottlers in the marketplace, representing more than 20% of their total demand in 2015. The feedback we have received from customers validates the investments we continue to make in the next generation of coolers and service offering. In 2016 we will launch our first proprietary digital device, EvoCool and the industry's breakthrough solution that tackles the long power outages in Africa and other emerging markets. In our Glass business, the successful completion of a furnace rebuild in Nigeria last year, resulted in a capacity upgrade, improved efficiency and enhanced quality. In Dubai, extended furnace maintenance in the first quarter of 2015 and recent investment in a low-cost alternative energy source have considerably improved production costs, driving operating margins significantly higher compared to last year. Despite the volatile trading environment in Nigeria with concerns of potential currency devaluation and inflationary pressures, we are confident in the outlook for the Glass business in 2016 and beyond. Although uncertainty and volatility remains in some of our emerging markets, we expect to return to top-line growth in 2016. This is despite the weak macroeconomic outlook in Russia adversely impacting on our sales this year. On top of the benefits of volume growth to our operating profit margin, we expect the favorable input cost and our ongoing productivity and cost saving measures to also drive an additional margin improvement. The past number of years have been challenging for Frigoglass. Throughout this period, we have continued to transform the business to become increasingly efficient and to drive innovation, enabling us to produce market-leading coolers for our customers. The outlook for both the Cooler and Glass business is attractive and we are confident in our ability to return the business to profitable growth. However, executing on our business plan requires a stable capital structure and an adequate level of financial liquidity. Additionally, we are delighted to have a commitment from our largest shareholder which we believe will provide us with an adequate level of financial liquidity to execute on our growth plan.
Frigoglass and the RCF lenders entered into an agreement to amend and extend the RCFs, which is conditional upon receipt of liquidity financing from its largest shareholder. Frigoglass has agreed to repay and cancel €5 million of indebtedness outstanding under each RCF and has agreed to an amortization schedule that provides for an additional €7 million of repayments for each RCF lenders consisting of a repayment and cancellation of €5 million on 31 October 2016 and €2 million on 31 December 2016. Truad Verwaltungs AG, Frigoglass' largest shareholder committed to provide Frigoglass with a new €30 million term loan facility on substantially similar terms to the amended and extended RCFs. The term loan facility matures on March 31, 2017, and is subject to shareholder approval at the upcoming AGM in April. We anticipate to utilize any amounts drawn under this term loan facility to make a €10 million repayment and cancellation on the RCFs and the remainder will be used for working capital and general corporate purposes
This statement was drawn up in accordance with article 43a, par. 3, section d' of Codified Law 2190/1920 and contains all the information required by the law.
In the framework of its policy of adopting high corporate governance standards, Frigoglass SAIC (hereinafter "the Company" or "Frigoglass") has drafted and adopted its own code of corporate governance by resolution of the Company's Board of Directors, dated 10/12/2014.
The purpose of the Company's Code of Corporate Governance (hereinafter "the Code") is to set out the best practices in corporate governance as implemented by the Company, in the pursuit of transparency in communication with its shareholders and ongoing improvement of the corporate framework for the Company's operations and competitiveness.
Furthermore, the Code is intended to lay down the methods by which the Company will operate and to establish administrative rules and procedures concering the relations between the administration, the Board of Directors, the shareholders of the Company and all other persons associated with and affected by the actions taken by the Company's bodies.
The Code is publicly available on the Company's website http://www.frigoglass.com/corporate-governance
Apart from this Code and the Internal Regulation of Operation, adopted according to article 6, par. 1 of Law 3016/2002, the Company is further applying:
The purpose of applying the Code of Business Conduct and Ethics is, inter alia, to shape a framework for business operations consistent with the principles and rules of morality and transparency, to ensure compliance with international commercial law and the law applicable in the states where the Company is active, to maintain high-level services and products, to improve the Company's profitability, to develop an environmentally friendly operating framework and to safeguard human rights through granting of equal rights and avoiding discriminatory treatment of all parties associated with the Company.
The Code of Business Conduct and Ethics is available on the Company's website at the address http://www.frigoglass.com/corporate-governance
Through the implementation of the Supplier Code, the Company seeks to create a business environment of cooperation with its suppliers governed by the principles of morality, transparency, protection of the environment and respect for human rights and the rules of health and safety. More specifically, the Company focuses on avoiding unfair competition and any involvement in situations of conflict of interest or bribery.
The Company attaches considerable importance to the systems of internal control and risk management.
More specifically, the Company's Board of Directors (hereinafter the "Board") adopts procedures and implements policies which aim at establishing and maintaining systems that optimize the identification, evaluation, monitoring and management of risks that the Company may be facing, the effective management thereof, and contribute to the reliable provision of financial information.
In this framework, the Board carries out periodic reviews and is regularly briefed on the existence of any issues which may have significant financial and business consequences for the Company.
Furthermore, the Company's operational and functional units report to the Chief Executive Officer within a defined timetable and in compliance with specific instructions and guidelines. The general management receives monthly reports on the financial and operational situation from each business area and function. These reports and financial information are based on a standardized process and are discussed at the meetings of the Board of Directors to ensure adequate execution of Board decisions by the management team.
The Board reviews the Company's systems of internal control and risk management on an ongoing basis by:
Furthermore, the Company has in place systems and procedures of internal control and risk management in respect of financial reporting and the preparation of individual and consolidated financial statements.
The above systems and procedures include:
Monthly operational review meetings which include, as necessary, reviews of internal financial reporting issues and financial control monitoring.
Ongoing training and development of financial reporting personnel.
4.4. Information regarding the operating rules of the General Meeting of Shareholders and its basic powers, as well as a description of the shareholders rights and how they can exercise them
The General Meeting of shareholders (the "General Meeting") is convened by the Board, which decides the items to be placed on the agenda, and mandatorily meets at the registered offices of the Company or in the region of another municipality within the prefecture of the Company's registered offices, or another municipality neighbouring the Company's registered offices, at least once in every corporate financial year and within a maximum of six (6) months from the end of the corporate financial year. An Extraordinary General Meeting may be held whenever the Board deems that necessary.
The General Meeting is the Company's most supreme body and may decide on any matter affecting the Company. More specifically, the General Meeting is the only body competent to decide on:
(f) Hearing of the auditors, regarding the audit they have carried out on the Company's books and accounts.
(g) Issuance of a bond convertible into shares or a bond entitling the holder to a share in the Company's profits.
Every shareholder is entitled to attend the General Meeting - whether in person or by proxy - provided that he owns at least one share. Minors, wards of court and legal entities must be represented by their legal representatives. The documents of authorization need not be formal, notarized instruments, provided they are dated and have been signed by the issuing party.
Only those that appear as shareholders in the files of the Company's securities depository body have the right to attend the General Meeting. In order for the shareholder capacity to be proven, a written certificate issued by the depository body shall be provided or this can electronically be verified, if the Company is electronically connected with the files of the depository body. The capacity of a shareholder shall exist at the beginning of the fifth day prior to the meeting and the aforementioned written certificate or the electronic verification must be provided to the Company at least three days prior to the meeting.
The other rights of the shareholders are set out in the Company's articles of assocation and in Codified Law 2190/1920.
The Chairman of the Board, the Chief Executive Officer, the chairmen of each Board Committee, as well as the internal and external auditors of the Company are always available to answer shareholders' questions.
The Board is responsible for dealing with the Company's affairs exclusively in the interests of the Company and its shareholders within the existing regulatory framework. The Board's key responsibilities are:
The Board is appointed by the General Meeting of the Company and at the time of execution of this present consists of 9 members, 8 of which are non-executive and 4 of which are independent. The only executive member is the Chief Executive Officer. The members of the Board serve for a three (3) year term that can be prolonged until the Annual General Meeting to be held following the termination of their term. Their term shall in no case exceed four (4) years.
The experience of the members of the Board encompasses diverse professional backgrounds, representing a high level of business, international and financial knowledge contributing significantly to the successful operation of the Company. The Board is fully balanced as far as the number of independent and non-independent members is concerned.The independent, non-executive members contribute to the Board's decision-making with the provision of impartial opinions and resolutiuons , thus to ensure that the interests of the Company, the shareholders and the employees are protected, whereas the executive member is responsible for ensuring the implementation of the strategies and policies decided by the Board.
The table below lists the members of the Board, the dates of commencement and termination of office for each member, as well as the frequency of attendance of each member in the meetings held in 2015.
| Title | Name | Executive / Non-Executive |
Independan ce |
Office Commenc ement |
Office Terminatio n |
Board Member Attendance |
|---|---|---|---|---|---|---|
| Chairman | Haralambos (Harry) G. David |
Non-Executive | 26/5/2015 | 26/5/2018 | 13/13 | |
| Vice Chairman |
Ioannis (John) Androutsopoulos |
Non-Executive | Independen t |
26/5/2015 | 26/5/2018 | 13/13 |
| Chief | Torsten Tuerling1 | Executive | 26/5/2015 | 12/7/2015 | 6/13 | |
| Executive Officer |
Nicolaos Mamoulis |
Executive | 13/7/2015 | 26/5/2018 | 7/13 | |
| Member | Loucas Komis | Non-Executive | 26/5/2015 | 26/5/2018 | 13/13 | |
| Member | George Leventis | Non-Executive | 26/5/2015 | 26/5/2018 | 11/13 | |
| Member | Doros Constantinou |
Non-Executive | 26/5/2015 | 26/5/2018 | 13/13 | |
| Member | Evangelos Kaloussis |
Non-Executive | Independen t |
26/5/2015 | 26/5/2018 | 12/13 |
| Member | Vassilis Fourlis | Non-Executive | Independen t |
26/5/2015 | 26/5/2018 | 11/13 |
| Member | Alexandra Papalexopoulou2 |
Non-Executive | Independen t |
29/5/2012 | 10/3/2015 | 1/13 |
| Member | Ioannis Kostopoulos |
Non-Executive | Independen t |
11/3/2015 | 26/5/2018 | 10/13 |
According to the Company's Code of Business Conduct and Ethics the members of the Board must avoid any acts or omissions from which they they have, or may have, a direct or indirect interest and which conflict or may possibly conflict with the interests of the Company.
The members of the Board receive remuneration which is approved by the Company's General Meeting, in accordance with the specific provisions of the Articles of Association and the law.
The remuneration of the members of the Board is presented in the annual financial statement (see Note 20).
The Company Secretary is responsible for ensuring a good flow of information between the Board and its committees, as well as between the senior administration and the Board. The Company Secretary ensures the effective organization of the General Meetings and the overall effective communication between the latter and the Board, always ensuring the compliance of the Board with the requirements of the law and the Articles of Association.
Mr. Haralambos (Harry) G. David was elected Chairman of the Board in November 2006. He has been a member of the Board of Frigoglass since 1999.
Graduated with a Business Degree from Providence College USA, in 1987. His career began as a certified investment advisor with Credit Suisse in New York. He then served in several executive positions within Leventis Group Companies in Nigeria and Europe. He is currently holding a position on the Boards of A.G. Leventis (Nigeria) PLC, the Nigerian Bottling Company, Beta Glass (Nigeria) PLC, Ideal Group and Quest Energy.
He is a member of the General Council of the Hellenic Federation of Enterprises (ΣΕΒ), a member of the Organizing Committee of the Athens Classic Marathon and member of the TATE's Africa Acquisitions Committee.
He has finally served as a member on the boards of Alpha Finance, ΔΕΗ (Hellenic Public Power Corporation) and Emporiki Bank (Credit Agricole).
Mr. Ioannis Androutsopoulos was appointed to the Board in July 1996.
His long career in the bottling and manufacturing sectors has included positions as Technical Manager of the Hellenic Bottling Company (1969-1985), General Manager of the Industrial Division of the 3E Company of companies (1986-1994), Chairman of the Board of Directors of Frigorex (1995), member of the Board of Directors of 3E Company (1995) and Managing Director of Frigoglass Company (1996-2001). He holds a degree in Electrical Engineering from Aachen Polytechnic where he also completed additional studies in Economics.
Mr.Loucas Komis was appointed to the Board in July 1996.
Currently, he is also Chairman of the Board of Ideal Group S.A. and of the Board of Hellenic Recovery & Recycling Corporation (HE.R.R.Co) and Vice-Chairman of the Federation of Hellenic Food Industries (SEVT) and Member of the Board of LARGO Ltd. During his career he worked for nine years in the appliance manufacturing sector and has held top management positions with IZOLA S.A. Ιn 1982, he joined the Coca-Cola Hellenic Bottling Company S.A. (CCHBC), where he also served as an Executive Board Member and remains an Advisor to the Chairman since 2001. He holds degrees from Athens University (BSc Physics), the University of Ottawa (MSc Electrical Engineering) and McMaster University, Ontario (MBA).
Mr. George Leventis joined the Board of Frigoglass as a non-executive member in April 2014.
Mr. Leventis is a member of the executive committee of a family office and has previously worked in the fund management business as an equities analyst and more recently in private equity.
He graduated with a degree in Modern History from Oxford University and holds a postgraduate Law degree from City University. He is an Investment Management Certificate holder.
Mr. Doros Constantinou was appointed to the Board in October 2011.
Mr. Constantinou graduated from the University of Piraeus in 1974 and holds a degree in Business Administration. Mr. Constantinou started his career in auditing with PricewaterhouseCoopers, where he worked for ten years. In 1985, Mr. Constantinou joined Hellenic Bottling Company, where he held several senior financial positions. In 1996, he was appointed to the position of Chief Financial Officer and remained in that position until August 2000. He was a key member of the management team that led the merger of Hellenic Bottling Company and Coca-Cola Beverages. In 2001, Mr. Constantinou became Managing Director of Frigoglass until August 2003 when he moved to Coca-Cola Hellenic as Chief Executive Officer until his departure in July 2011. In October 2011, Mr. Constantinou was appointed Executive Director of Frigoglass until May 2012. Additionally, Mr. Constantinou is a member of the board of Dalphon Holdings Limited, a company incorporated in Cyprus.
Mr. Mamoulis joined Frigoglass as Chief Financial Officer in October 2013 and was appointed Chief Executive Officer of Frigoglass in July 2015. He has more than twentyfive years of experience in senior financial positions within different business sectors and a wealth of knowledge in finance and international markets. Before joining Frigoglass, Mr Mamoulis has worked for Coca-Cola Hellenic for twelve years with his last position being that of the Group Financial Controller. Previous to that he also held the Chief Financial Officer position in Lafarge Heracles Group and the Boutaris Group. Mr Mamoulis is a graduate of the Athens University of Economics and Business.
Mr. Evangelos Kaloussis was appointed to the Board in June 2006.
He is Chairman of the Federation of Hellenic Food Industries & Chairman of Τerra Creta SA. He is also Member of the Board of the European Federation of Food & Drink Industry (FoodDrinkEurope) since June 2015. He is member of the Board of Directors of Alpha Bank, of Frigoglass, of IOBE Supporters' Club and of Food Bank.
During his professional career he assumed top management positions at the Nestlé Headquarters in Switzerland, France, Nigeria and South Africa and in Greece as President of Nestle Hellas SA and responsible for SouthEast Europe. He holds a Master's Degree in Electrical Engineering from the Federal Institute of Technology in Lausanne (CH) and in Business Administration from the University of Lausanne as well as a graduate degree from IMD.
Mr. Vassilios Fourlis was appointed to the Board in October 2002.
He is Executive Chairman of Fourlis Holdings SA. He also serves on the Board of Directors of Piraeus Bank SA and of Cement Titan SA. He holds a Master's Degree in Economic Development and Regional Planning from the University of California/Berkeley and a Master's Degree in International Business from Boston University/ Brussels.
Mr. Ioannis Costopoulos is currently working for the company Société d'Etudes Techniques et Economiques S.A. (SETE S.A.), with registered offices in Geneva, Switzerland, specialized in investment strategy and energy.
From 2007 to May, 2015 he served as the Chief Executive Officer of HELLENIC PETROLEUM, a vertical energy group, with presence in 7 countries of South East Europe, operating in the fields of Supply, Refining and Marketing of oil materials, Production and Marketing of Chemicals, Research and Production of Hydrocarbons, Production and Marketing of Solar Power as well as Renewable Sources of Energy and Natural Gas.
From 2007 to 2015, he has served from time to time as Chairman of the Board of EKO and Hellenic Fuels – subsidiaries of ELPE Group – and as a member of Elpedison SpA, subsidiary of solar power production of the Group, in consortium with Edison SpA. He has also been a Board member of the Hellenic Federation of Enterprises (SEV) and the Foundation for Economic & Industrial Research (IOBE).
From 2003, since Petrola Hellas S.A. has been merged with Hellenic Petroleum, to 2006 he has served as an executive member on the Board of Hellenic Petroleum, and was responsible for Development Strategy, Operational Design and International Relations of ELPE Group.
From 2001 to 2003, he was Vice Chairman and CEO of Petrola Hellas S.A., an Athens stock exchange-listed oil refiner.
From 1992 he served in positions of senior management in Greek entities such as: CEO of Diageo – Metaxa (1992-1997), CEO of Johnson & Johnson Hellas S.A. and Regional Director of Johnson & Johnson Central and Eastern Europe (1998 – 2000).
From 1987 to 1992, he has served in the senior management of the international company of management consultant Booz Allen & Hamilton based in London, in the fields of development strategy and business restructuring.
From 1980 to 1982, he worked with Procter & Gamble in Geneva. From 1983 to 1986 he worked in Corporate and Investment Banking with the Chase Manhattan Bank in New York and London.
He holds a BSc Honours in Economics from the University of Southampton, U.K. and a MBA from the University of Chicago, U.S.A.
He is a Board member of Fourlis Holdings S.A. and Frigoglass S.A.I.C., both Athens stock exchange-listed companies.
The Board shall meet at the registered offices of the Company whenever so required by the law or the needs of the Company. The Board held thirteen (13) meetings in 2015.
The items on the agenda of the Board meetings are notified to its members beforehand, enabling all members who are unable to attend to comment on the items to be discussed.
The Board is in quorum and meets validly when half (1/2) of the directors plus one are present or represented, provided that no fewer than three (3) directors are present in person.
Decisions of the Board shall be duly taken by an absolute majority of the directors who are present (in person) and represented, except for occassions where the Articles of Association provide for an increased majority. In case of personal affairs the Board resolves with a secret vote by ballot. Each director has one vote, whereas when he represents an absent director, he has two (2) votes. Exceptionally, in the case of articles 10(3) and 9(2) of the Company's Articles of Association, the decisions of the Board shall be taken unanimously by the members who are present and represented.
The Board must evaluate at regular intervals the effectiveness of the performance of its duties, as well as that of its committees. This procedure is overseen by the Chairman of the Board and the chairman of the relevant committee, and where an improvement is necessary for any reason whatsoever, the taking of relevant measures shall directly be decided.
4.6. Information regarding the composition and operating rules of the other management, administrative or supervisory bodies or committees of the Company
According to article 37 of Law 3693/2008 the Company has established and operates an Audit Committee ("the Audit Committee") which is, inter alia, responsible for monitoring:
The Audit Committee is also responsible for the submission of proposals to the Board regarding any change to the chart of authorities and the organizational chart of the Company.
The members of the Audit Committee have been appointed by the General Meeting of the Company as per the provisions of law 3693/2008 and are the following:
| Chairman: | John Androutsopoulos – Non-executive/ Independent |
|---|---|
| ----------- | --------------------------------------------------- |
Member: Loucas Komis – Non-executive
Member:Doros Constantinou – Non-executive
The above members have substantial past experience in senior financial positions and other comparable experience in corporate activities.
Mr. Androutsopoulos fulfils the requirements provided by law regarding the requisite knowledge of accounting and auditing.
The Audit Committee shall meet whenever this is deemed necessary and in no circumstances less than four times a year. It must also hold at least two meetings attended by the Company's regular auditor, without the presence of the members of the administration.
The Audit Committee meets validly when at least two of its members are present, of whom one must be its Chairman. The Audit Committee held a total of five (5) meetings in 2015. The said meetings were scheduled in such a way so as to coincide with the publication of the Company's financial information.
The Audit Committee considered a wide range of financial reporting and related matters in respect of the 2014 annual financial statements and the 2015 half-year financial information. In this respect the Audit Committee reviewed any significant areas of judgment that materially impacted reported results, key points of disclosure and presentation to ensure the adequacy, clarity and completeness of the financial statements and the financial information, and the content of results announcements prior to their submission to the Board. The Audit Committee also considered reports from PwC on their annual audit of 2014 and their review of the 2015 half year Board of Directors report that forms part of the statutory reporting obligations of the Company.
Moreover, in 2015, the Audit Committee has:
The main duties and obligations of the Internal Audit Department include:
Reporting cases of conflict of interests between members of the Board or managers and the interests of the Company.
Submitting written reports to the Board at least once each quarter on any important findings of the internal audits it has conducted.
The internal auditor acts according to the International Standards for the Professional Practice of Internal Auditing and the policies and procedures of the Company and reports directly to the Audit Committee.
The role of the human resources and remuneration committee ("the Human Resources and Remuneration Committee") is to establish the principles governing the Company's human resources policies which guide management's decision-making and actions.
More specifically, its duties are to:
The Human Resources and Remuneration Committee, which is appointed by the Board, is comprised of the following 3 non-executive Board members:
| Chairman: | Loucas Komis – Non-executive |
|---|---|
| Member: | Haralambos (Harry) G. David – Non-executive |
| Member: | Evaggelos Kaloussis – Non-executive/ Independent |
The Chief Executive Officer and HR Director shall normally attend meetings, except when discussions are conducted concerning matters affecting them personally.
The Human Resources and Remuneration Committee held 3 meetings in 2015.
The duties of the investment commitee ("the Investment Committee") are to recommend to the Board the Company's Corporate Development and Strategy and to evaluate and suggest to the Board new proposals for investments and/or Company expansion according to the defined strategy.
Moreover, the Investment Committee is also responsible for evaluating and suggesting to the Board opportunities for business development and expansion through acquisitions and/ or strategic partnerships.
The Investment Committee, which is appointed by the Board, comprises 4 members, two of whom are non-executive, and is formed as follows:
The Investment Committee held 1 meeting in 2015.
Frigoglass recognizes the importance of the effective and timely communication with shareholders and the wider investment community. The Company maintains an active website www.frigoglass.com which is open to the investment community and to its own shareholders; the site features this Code, as well as a description of the Company's corporate governance, management structure, ownership status and all other information useful or necessary to shareholders and investors. Finally, Frigoglass also communicates with the investment community through its participation in a number of conferences and meetings held in Greece and abroad and the schedule of conference calls.
The financial statements have been prepared in accordance with the going concern basis of accounting. The use of this basis of accounting takes into consideration the Group's current and forecasted financing position.
During the year ended 31 December 2015, the Group reported losses amounting to €58m as a result of the deterioration of its operating results, the recognition of a loss in the amount of €17m relating mainly to a non–recurring impairment charge on its inventories and the impairment of deferred tax assets of €8.9m which were assessed as not recoverable.
As at the year-end date the net assets of the Group were negative by €0.4m.
In May 2013, the Group announced that its subsidiary Frigoglass Finance B.V. (the "Issuer") issued €250m Senior Notes due on 15 May 2018 (the "Notes"), at a fixed coupon of 8.25% per annum and at an issue price of 100%. The issue was finalized on 20 May 2013 and the proceeds from this issue were used to refinance existing Group facilities. In addition, the Issuer also entered into two bilateral revolving credit facilities (the "RCFs"), each in an amount of €25 million, and a three year maturity. The Notes and the RCFs are fully and unconditionally guaranteed on a senior unsecured basis by Frigoglass S.A.I.C. (other than with respect to one of the RCFs), Frigoinvest Holdings B.V. (the direct parent company of the Issuer) and by certain other subsidiaries of the Group (refer to Note 13). The Notes are subject to incurrence covenants while for the RCFs, the Group is required to comply with, among other things, debt service and leverage financial covenants. On 18 March 2014, the Group entered into an amendment to the RCFs to reset the financial covenants to new levels.
As a result of further deterioration in the Group's operating profits, EBITDA fell below the level required by the financial covenants under the RCF. The Group has been in on-going discussions with the lenders under the RCFs, who have provided consecutive waivers of the breaches of certain covenants under the RCFs.
As a result of continued delays in the completion of the transaction with GZI, the Group engaged several advisers and began a comprehensive review of its business and financing arrangements in order to optimize the capital structure of the Group and to ensure that an adequate level of financial liquidity is achieved and maintained.
On 26 February 2016, the Group announced the termination of the acquisition agreement with GZI, due to amended offers made by GZI not reflecting the full value of the Glass business and not being in the best interests of Frigoglass and its stakeholders. The RCFs were due to mature in May 2016. The Group has cash and cash equivalents of €57m. An amount of €30m is subject to local exchange control regulations in Nigeria, however this amount is primarily allocated to the Glass business. Following the termination of the aforementioned disposal of the Glass business, the Group continued discussions with its lenders with respect to the extension of the waivers referred to above as well as an extension of the term of the RCFs to 31 March 2017.
On 31 March 2016, the lenders under the RCFs entered into an agreement with the Issuer pursuant to which they agreed to extend the maturity of the RCFs up to 31 March 2017, to waive all breaches and to make certain other amendments to the terms of the RCFs, subject to certain conditions being met (including the provision of the Term Loan Facility by the majority shareholder). In connection with the amendment and extension of the RCFs, Frigoglass has agreed to repay and cancel €5 million of indebtedness outstanding under each RCF and has agreed to an amortization schedule that provides for an additional €14 million of repayments consisting of a repayment and cancellation of €5 million under each RCF on 31 October 2016 and €2 million under each RCF on 31 December 2016.
In accordance with IFRS the Notes were classified as current liabilities on the assumption that the debt under the RCFs could have technically been accelerated by the lenders and therefore trigger an event of default under the Notes due to the fact that the waivers obtained as at the balance sheet date did not originally cover a period of 12 months after the year end. However, the breaches of covenants under the RCFs have been consecutively waived by the lenders under the RCFs for all the relevant periods and therefore no such default, cross default or cross acceleration has actually occurred under the Notes as a result of such breaches. For the purposes of compliance with IFRS the Notes have been classified within current liabilities, despite the agreement to extend and amend the RCFs until 31 March 2017 (as discussed above).
In addition, on 31 March 2016, our major shareholder committed to provide the Group with a €30m term loan facility (the "Term Loan Facility"), on terms substantially similar to the RCFs. The Term Loan Facility to be provided under the terms of the commitment matures on March 31, 2017. This commitment is conditional upon receipt of the requisite shareholder approval at our AGM which will be convened on or about 22 April 2016.
Management intends to use the proceeds of the Term Loan Facility for general corporate and working capital purposes and to repay and cancel €5 million of indebtedness outstanding under each RCF. The provision of the Term Loan Facility enhances the Group's liquidity position.
At present Greek banks are in the process of undertaking their regular annual review of their respective credit facilities. The Group is confident that all the uncommitted facilities provided by the Greek banks will be extended till March 2017.
Management also intends to continue to work together with its financial advisor and other reputable advisors (including a working capital advisor) to identify and implement various initiatives which will protect the value of the business for all stakeholders while enabling the Group to return its business to profitable growth.
On the basis that the above initiatives are successfully completed as outlined above, the Group's financial footing and ability to continue in operation will be significantly strengthened. The Group's financial forecasts and projections for the next 12 months indicate that the Group would then be able to meet its obligations as they fall due, however, this assessment is sensitive to a number of downside risks as those described in the "Main Risks and Uncertainties" section of the Directors' Report and in note 3 to the Group's financial statements, particularly if such downside risks were to materialize in combination. Therefore, the Group expects that it may still need to seek strategic divestments and carry out other fundraising transactions as necessary to build resilience against, or respond to, downside risks, to capture the opportunity in the Group's portfolio and secure the Group's future.
The Directors recognize that the combination of the circumstances described above represents a material uncertainty which could adversely affect the going concern assumption of the Group.
Nevertheless, the Directors expect that the amendment and extension of the RCFs and the provision of the Term Loan Facility from the major shareholder will receive all of the required approvals and consents as set out above, and the Directors therefore have a reasonable expectation that the Group will be able to successfully navigate the present uncertainties it faces and continue in operation. Accordingly, the financial statements have been prepared on a going concern.
Changes in general economic conditions directly impact consumer confidence and consumer spending, as well as the general business climate and levels of business investment, all of which may directly affect our customers and their demand for our products. Concerns over geopolitical issues, and the availability and cost of financing have contributed to increased volatility and diminished expectations for the economy and global markets going forward. These factors, combined with declining global business, consumer confidence, and rising unemployment, have precipitated an economic slowdown. Continued weakness in consumer confidence and declining income and asset values in many areas, as well as other adverse factors related to the current weak global economic conditions have resulted, and may continue to result, in reduced spending on our customers' products and, thereby, reduced or postponed demand for our products. Despite the fact that our ICMs generate sales growth for our customers, ICMs constitute capital expenditure, and in periods of economic slowdown, our customers may reduce their capital expenditure, including ICM purchases, in their effort to reduce costs. Generalized or localized downturns in our key geographical areas could also have a material adverse effect on the performance of our business.
We derive a significant amount of our revenues from a small number of large multinational customers each year. In the year ended December 31, 2015, our five largest customers accounted for approximately 52% of our net sales revenue in the ICM Operations and approximately 64% of our net sales revenue in the Glass Operations. In 2014, our five largest customers accounted for approximately 51% and 74% of our net sales revenue in our ICM Operations and Glass Operations, respectively. The loss of any large customer, a decline in the volume of sales to these customers or the deterioration of their financial condition could adversely affect our business, results of operations, financial condition and cash flows. In addition, certain of our sales agreements with our customers are renewed on an annual basis. We cannot assure you that we will successfully be able to renew such agreements on a timely basis, or on terms reasonably acceptable to us or at all. Failure to renew or extend our sales agreements with our customers, for any reason, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
As part of our business strategy, we consistently seek to control costs, improve our efficiency and cash flows while maintaining and improving the quality of our products. We are currently implementing several efficiency improvement programs aimed at further enhancing our long term profitability and cash flow generation. These programs include (i) reducing costs by simplifying our product portfolio, (ii) reducing inventory levels, (iii) implementing lean manufacturing processes while reinforcing product quality and (iv) generating value from our recent strategic investments. If the implementation of these programs is not successful and the targeted cost savings and other improvements cannot be realized, our results of operations could be adversely affected. Even if we achieve the expected benefits, they may not be achieved within the anticipated time frame. The cost savings and inventory reductions anticipated are based on estimates and assumptions that are inherently uncertain, although considered reasonable by us, and may be subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond our control.
The raw materials that we use or that are contained in the components and materials that we use have historically been available in adequate supply from multiple suppliers. For certain raw materials, however, there may be temporary shortages due to production delays, transportation or other factors. In such an event, no assurance can be given that we would be able to secure our raw materials from sources other than our current suppliers on terms as favorable as our current terms. Any such shortages, as well as material increases in the cost of any of the principal raw materials that we use, including the cost to transport materials to our production facilities, could have a material adverse effect on our business, financial condition and results of operations. The primary raw materials relevant to our ICM Operations are steel, copper, plastics and aluminium which accounted for approximately 16%, 6%, 6% and 4% of our total costs of raw materials, respectively, for the year ended December 31, 2015.
We generally purchase steel under one-year contracts with prices that are fixed in advance, although in some cases, the contracts may provide for interim indexation adjustments. However, from time to time, we may also purchase steel under multiyear contracts or purchase larger volumes to stock at our warehouses or with our suppliers in order to take advantage of favorable fluctuations in steel prices. When such multi-year contracts are renewed, our steel costs under such contracts will be subject to prevailing global/regional steel prices at the time of renewal, which may be different from historical prices. While we do not generally purchase copper and aluminum directly as raw materials for our products, copper and aluminum are contained in certain components and other materials that we use in our ICM Operations, the prices of which are directly or indirectly related to the prices of copper and aluminum on the London Metal Exchange, which has historically been subject to significant price volatility.
To better manage our exposures to commodity price fluctuations, we hedge some of our commodity exposures to copper and aluminum through commodities derivative financial instruments. To the extent that our hedging is not successful in fixing commodity prices that are favorable in comparison to market prices at the time of purchase, we would experience a negative impact on our profit margins compared to the margins we would have realized if these price commitments were not in place, which may adversely affect our results of operations, financial condition and cash flows in future periods.
Our Glass Operations also require significant amounts of raw materials, particularly soda ash (natural or synthetic), cullet (recycled glass), glass sand and limestone, which respectively accounted for approximately 30%, 11%, 4%, and 3% of our total costs of raw materials for the year-ended December 31, 2015. Any significant increase in the price of the raw materials we use to manufacture glass could have a material negative impact on our business, financial condition and results of operations.
The manufacturing process of our Glass Operations depends on the constant operation of our furnaces due to the long time required for the furnaces to reach the right temperature to melt glass. Consequently, our glass manufacturing plants in Nigeria and UAE (Jebel Ali) depend on a continuous power supply and require a significant amount of electricity, natural gas, fuel oil and other energy sources to operate. Substantial increases in the price of natural gas and other energy sources could have a material adverse impact on our results of operation or financial condition.
Although we are generally able to pass on increased energy costs to our customers through price increases, increased energy costs that cannot be passed on to our customers through price increases impact our operating costs and could have a material adverse impact on our results of operations, financial condition and cash flows. In particular, since our contracts with customers are typically negotiated on an annual basis, we may be prevented from passing on increased costs to customers during the time lag between changes in prices under our contracts with our energy providers and changes in prices under our contracts with our customers.
Our ICM Operations are subject to intense competition from regional competitors in specific markets. We generally compete based on product design, quality of products, product support services, product features, maintenance costs and price. Competition in the ICM market varies in intensity and nature depending on geographical region. Increased levels of competition result in pricing pressures, which can have an adverse impact on our margins and in turn may adversely impact our results of operations, financial condition and cash flows in future periods. In addition to competing with other large, well-established manufacturers in the glass container industry, we also compete with manufacturers of other forms of rigid packaging, principally plastic containers and aluminium cans, on the basis of quality, price, service and consumer preference. We also compete with manufacturers of non-rigid packaging alternatives, including flexible pouches and aseptic cartons. We believe that the use of glass containers for alcoholic and non-alcoholic beverages in emerging markets is primarily subject to costs.
Several large international sellers, including certain of our customers, account for a significant share of the beverage market. The main end-product producers in these markets outweigh the size of their bottling and ICM suppliers, including us. The price competition encouraged by customers has reduced margins and strained financial results in the industry, despite increases in productivity. There can be no assurance that we will not be pressured in the future by our customers to accept further cuts in prices, which could have a material adverse effect on our business, financial condition and results of operations.
We aim to improve the performance, usefulness, design and other physical attributes of our existing products, as well as to develop new products to meet our customers' needs. To remain competitive, we must develop new and innovative products on an ongoing basis. We invest in the research and development of new products, including environmentally friendly and energy-efficient ICM platforms and lightweight glass bottles. As a result, our business is subject to risks associated with developing new products and technologies, including unexpected technical problems. Any of these factors could result in the delay or abandonment of the development of a new technology or product. We cannot guarantee that we will be able to implement new technologies, or that we will be able to launch new products successfully. Our failure to develop successful new products may impact our relationships with our customers and cause existing as well as potential customers to choose to purchase used equipment or competitors' products, rather than invest in new products manufactured by us, which could have a material adverse effect on our business, financial condition and results of operations.
We depend on effective supply and distribution networks to obtain necessary inputs for our production processes and to deliver our products to our customers. Damage or disruption to such supply or distribution capabilities due to weather, natural disaster, fire, loss of water or power supply, terrorism, political instability, military conflict, pandemics, strikes, the financial and/or operational instability of key suppliers, distributors, warehousing and transportation providers or brokers, or other reasons, could impair our ability to manufacture or sell our products. Although the risk of such disruptions is particularly acute in our operations in Africa, MENA and Asia, where distribution infrastructure may be relatively undeveloped, our operations in Europe and North America are also subject to such risks.
With operations worldwide, including in emerging markets, our business and results of operations are subject to various risks inherent in international operations over which we have no control. These risks include:
We are exposed to these risks in all of our operations to some degree, and such exposure could be material to our financial condition and results of operations particularly in emerging markets where the political and legal environment is less stable.
We are subject to extensive applicable governmental regulations, including environmental and licensing regulation, and to increasing pressure to adhere to internationally recognized standards of social and environmental responsibility, which are likely to result in an increase in our costs and liabilities.
Our operations and properties, as well as our products, are subject to extensive international, EU, U.S., national, provincial and local laws, regulations and standards relating to environmental, health and safety protection. These laws, regulations and standards govern, among other things: emissions of air pollutants and greenhouses gases; water supply and use; water discharges; waste management and disposal; noise pollution; natural resources; product safety; workplace health and safety; the generation, storage, handling, treatment and disposal of regulated materials; asbestos management; and the remediation of contaminated land, water and buildings. Furthermore, we may be required by relevant governmental authorities to maintain certain licenses or permits in the jurisdiction in which we operate.
We operate in numerous countries where environmental, health and safety laws, regulations and standards and their enforcement are still developing. We expect environmental, health and safety laws and enforcement in both developing and developed countries to become more stringent over time, and we therefore expect our costs to comply with these laws to increase substantially in the future. Increasingly, our stakeholders and the communities in which we operate also expect us to apply stringent, internationally recognized environmental, health and safety benchmarks to our operations in countries with less developed laws and regulations, which could result in significant new obligations and costs for us. A potential failure to manage relationships with local communities, governments and nongovernmental organizations may harm our reputation, as well as our ability to bring projects into production, which could, in turn materially adversely affect our revenues, results of operations and cash flows. In addition, our costs and management time required to comply with standards of social responsibility and sustainability are expected to increase over time.
We operate internationally and generate a significant percentage of our revenue in currencies other than the euro, our reporting currency. As a result, our financial position and results of operations are subject to currency translation risks. We also face transactional currency exchange rate risks if sales generated in one foreign currency are accompanied by costs in another currency. Net currency exposure from sales denominated in non-euro currencies arises to the extent that we do not incur corresponding expenses in the same foreign currencies. Significant fluctuations in exchange rates, particularly in the U.S. dollar, the Nigerian naira, the South African rand, the Indian rupee, the Norwegian krone, the Russian ruble, the Romanian leu and the Chinese yuan against the euro may have an adverse impact on our financial performance. Our subsidiaries with functional currencies other than the euro use natural hedging to limit their exposure to foreign currency risk. Natural currency hedging can be achieved by matching, to the possible maximum extent, revenue and expense cash flows in the same currency in order to limit the impact of currency exchange rate movements. When natural hedging cannot be achieved, we make use of derivatives, mainly in the form of forward foreign currency exchange contracts.
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This includes, among other things, losses that are caused by a lack of controls within internal procedures; violation of internal policies by employees; the disruption or malfunction of IT systems, computer networks and telecommunications systems; mechanical or equipment failures; human error; natural disasters; catastrophic events; or malicious acts by third parties. We are generally exposed to risks related to information technology, since unauthorized access to or misuse of data processed on our IT systems, human errors associated therewith or technological failures of any kind could disrupt our operations, including the manufacturing, design and engineering process. Like any other business with complex manufacturing, research, procurement, sales and marketing, financing and service operations, we are exposed to a variety of operational risks and, if the protection measures put in place prove insufficient, our results of operations and financial conditions could be materially affected.
We are also exposed to the risk of catastrophic events, such as severe weather conditions, floods, natural disasters caused by significant climate changes, fires, earthquakes, pandemics or epidemics, or terrorist and war activities in any of the jurisdictions in which we operate, but especially in emerging markets and geographical areas with less established infrastructure, such as certain areas in South East Asia. Such events may have a negative effect not only on manufacturing capacity in the affected area, but also on retailers, particularly for retailers who sell non-essential goods. The occurrence of such an event could adversely affect our business and operating results. We cannot accurately predict the extent to which such events may affect us, directly or indirectly, in the future. We also cannot assure you that we will be able to obtain or choose to purchase any insurance coverage with respect to occurrences of terrorist acts and any losses that could result from these acts. If there is a prolonged disruption at our properties due to natural disasters, severe weather conditions, terrorist attacks or other catastrophic events, our results of operations and financial condition could be materially adversely affected.
Our growth has placed, and will continue to place, significant demands on our management and operational and financial resources. We have made a number of significant acquisitions since 1996. Future acquisitions will require further integration of the acquired companies' sales and marketing, distribution, manufacturing, engineering, purchasing, finance and administrative organizations. We cannot assure you that we will be able to integrate our recent acquisitions or any future acquisitions successfully, that the acquired companies will operate profitably or that the intended beneficial effect from such acquisitions will be realized.
We offer our ICM customers the option of a warranty or a limited supply of free spare parts with each sale. If a product fails to comply with the warranty, we may be obligated, at our expense, to correct any defect by repairing or replacing the defective product. From time to time, we may also experience voluntary or court ordered product recalls. We dedicate considerable resources in connection with product recalls, which typically include the cost of replacing parts and the labor required to remove and replace any defective part.
In countries where the local currency is, or may become, convertible or transferable only within prescribed limits or for specified purposes, it may be necessary for us to comply with exchange control formalities and to ensure that all relevant permits are obtained before we can repatriate the profits of our subsidiaries in these countries.
The governments of certain of the emerging markets where we operate, including Nigeria, Russia and Romania, have historically intervened in their economies and have occasionally made significant changes in their policies and regulations. Government actions to control inflation in these countries, as well as other policies and regulations, have frequently resulted in increases in interest rates, the application of exchange controls, changes in tax policies, price controls, currency devaluation, capital controls and limitations on imports, among other measures. We may be adversely affected by changes in policies or regulations by the governments in those countries in which we operate that involve or affect certain factors, such as the following: interest rates; monetary policies; foreign exchange controls and restrictions on remittances abroad; variations in foreign exchange rates; inflation and deflation; social instability; price fluctuations; crime and the lack of law enforcement; political instability; the liquidity of domestic financial and capital markets; the impact of the environmental legislation; trade barriers and foreign trade restrictions; tax and social security policies; and other political, social and economic developments that might occur in or affect emerging markets. Such factors could affect our results by causing interruptions to operations, by increasing the costs of operating in those countries or by limiting the ability to repatriate profits from those countries. Financial risks of operating in emerging and developing countries also include risks of liquidity, inflation, devaluation, price volatility, currency convertibility and transferability, country default and austerity measures resulting from significant deficits as well as other factors.
Continued disruptions, uncertainty or volatility in capital and credit markets may limit our access to additional capital that is required to operate our business. Such market conditions may limit our ability to replace, in a timely manner, maturing liabilities and access the capital necessary to grow our business. The more limited availability of credit may also have a negative impact on our financial condition, particularly on the purchasing ability of some of our customers, and may also result in requests for extended payment terms, and result in credit losses, insolvencies and diminished sales channels available to us. Our suppliers may have difficulties obtaining necessary credit, which could jeopardize their ability to provide timely deliveries of raw materials and other essentials to us. The current credit environment may also lead to certain of our local suppliers requesting credit support or otherwise reducing credit, which may have a negative effect on our cash flows and working capital.
Many of our operating companies apply collective bargaining agreements which are controlled by various unions. Part of our total number of employees is unionized and operates under collective bargaining agreements. Upon the expiration of any collective bargaining agreement, our operating companies' inability to negotiate acceptable contracts with trade unions could result in strikes by the affected workers and increased operating costs as a result of higher wages or benefits paid to union members. We have had no work stoppages as a result of conflicts with our workforce or unions.
Through a number of international and local insurers, we have insurance policies relating to certain operating risks, including certain property damage (including certain aspects of business interruption for certain sites), public and product liability, cargo in transit insurance (for certain companies), rolling stock and vehicles insurance (in certain locations), and directors' and officers' liability. While we believe that the types and amounts of insurance coverage we currently maintain are in line with customary practice in our industry and are adequate for the conduct of our business, our insurance does not cover all potential risks associated with our business or for which we may otherwise be liable.
Our success depends to a large extent upon the continued services of our key executives, managers and skilled personnel. We cannot be sure that we will be able to retain our key officers and employees. We could be seriously harmed by the loss of key personnel if it were to occur in the future.
Frigoglass SAIC is incorporated under the laws of Greece and is publicly listed on the Athens Stock Exchange. Our corporate headquarters are located in Greece. Sales in Greece accounted for 2.7% of our revenues for the year ended December 31, 2015. Greece is currently facing a severe economic crisis resulting from significant governmental fiscal deficits and high levels of government borrowing.
The macroeconomic and financial environment in Greece remains fragile. The recent developments relating to the instability of the Greek banking sector and the resulting imposition of capital controls led to the reduction of consumers' disposable income and restriction in the movement of funds. These circumstances may adversely affect the Group's operations in Greece for 2016. During the current period the critical point is the completion of the 1st evaluation of the 3rd Greek adjustment program and the assurance of the smooth disbursement of the remaining instalments, which is expected to lead on to an improvement in the Greek economic environment. Our 2015 revenues for Greece amounted to 2,7% of consolidated net sales revenues and our 2015 non-current assets for the territory amounted to 7% of the consolidated non-current assets. We are continuously monitoring developments in Greece. As at 31 December 2015, cash and cash equivalents of € 4.5 million were subject to capital controls. Furthermore, in Nigeria, the introduction of tight capital controls and the pegging of the local currency Naira to the USD at a rate that may not be reflecting the supply and demand rate for the currency may result in volatility in the local currency. We are continuously monitoring and assessing the situation and we are taking timely actions to secure the smooth operation of our business in this challenging environment and to minimize any adverse impact of a potential currency devaluation on the Group's performance.
The recent events involving Ukraine and Russia have caused a fall in the exchange rate of the Russian ruble against other currencies, adversely affected financial markets, raised inflationary pressures and led the United States and the European Union to adopt specific sanctions against designated Ukrainian and Russian persons and entities. Further negative developments may lead to continued geopolitical instability and civil unrest as well as to a deterioration of macroeconomic conditions. Frigoglass operates in Russia via its subsidiary Frigoglass Eurasia. Although we are not exposed to translation risk as the functional currency of our Russian subsidiary is the euro, we are exposed to transactional risk. Nevertheless, Frigoglass Eurasia applies natural currency hedging by matching, to the possible maximum extent, revenue and expenses in local currency to limit the impact of currency movements. Furthermore, the above events may have an adverse effect on overall consumer demand resulting in a direct impact on the demand for ICMs from the customers of Frigoglass Eurasia.
The Company announced on February 26, 2016 the termination of the agreement with GZI Mauritius Limited (" GZI ") signed on May 21, 2015 regarding the divestment of its Glass business. A condition precedent was not met as GZI did not secure the necessary level of debt financing for the acquisition. Amended offers made by GZI were declined as not reflecting the full value of the Glass business and therefore not being interest of Frigoglass and its stakeholders.
Following the termination of the aforementioned disposal of the Glass business, the Group continued discussions with its lenders with respect to the extension of the waivers referred to above as well as an extension of the term of the RCFs to 31 March 2017.
On 31 March 2016, the lenders under the RCFs entered into an agreement with the Issuer pursuant to which they agreed to extend the maturity of the RCFs up to 31 March 2017, to waive all breaches and to make certain other amendments to the terms of the RCFs, subject to certain conditions being met (including the provision of the Term Loan Facility by the majority shareholder). In connection with the amendment and extension of the RCFs, Frigoglass has agreed to repay and cancel €5 million of indebtedness outstanding under each RCF and has agreed to an amortization schedule that provides for an additional €14 million of repayments consisting of a repayment and cancellation of €5 million under each RCF on 31 October 2016 and €2 million under each RCF on 31 December 2016.
In addition, on 31 March 2016, our major shareholder committed to provide the Group with a €30m term loan facility (the "Term Loan Facility"), on terms substantially similar to the RCFs. The Term Loan Facility to be provided under the terms of the commitment matures on March 31, 2017. This commitment is conditional upon receipt of the requisite shareholder approval at our AGM which will be convened on or about 22 April 2016.
Frigoglass is working with its key stakeholders and a team of highly reputable advisors to determine its next strategic steps, identify initiatives to preserve the value of the business for all stakeholders and achieve an optimal capital structure.
There are no other post-balance events which are likely to affect the financial statements or the operations of the Group and the Parent company apart from the recent events involving Ukraine and Russia and the ones mentioned above.
The most important transactions of the Company with parties related to it, in the sense used in International Accounting Standard 24, are the transactions carried out with its subsidiaries (enterprises related to it in the sense used in article 42e of Codified Law 2190/1920), which are listed in the following table:
in € 000's
31.12.2015
| Sales of Goods Purchases of Goods & Services |
118.751 Coca-Cola HBC AG Group | ||||||
|---|---|---|---|---|---|---|---|
| Consolidated | 735 Coca-Cola HBC AG Group 19.750 Coca-Cola HBC AG Group |
||||||
| Receivables | |||||||
| Parent Company | Sales of Goods & Services |
Purchases of Goods |
Dividends Income |
Receivables | Payables | Loans Payable |
Management Fees Income |
| Frigoglass Romania SRL | 475 | 9.197 | - | 9.575 | 17.506 | - | 3.671 |
| Frigoglass Indonesia PT | 74 | 32 | - | 5.271 | 66 | - | 1.793 |
| Frigoglass South Africa Ltd | 85 | 2 | - | 7.234 | 2 | - | 1.253 |
| Frigoglass Eurasia LLC | 52 | 306 | - | 5.589 | 307 | - | 6.298 |
| Frigoglass (Guangzhou) Ice Cold | |||||||
| Equipment Co. ,Ltd. | 37 | 112 | - | 2.752 | 196 | - | 1.302 |
| Scandinavian Appliances A.S | 5.228 | - | - | 436 | 12 | - | - |
| Frigoglass Iberica SL | - | - | - | 1 | - | - | - |
| Frigoglass Sp Zoo | - | - | - | 12 | 10 | - | - |
| Frigoglass India PVT.Ltd. | - | 1.395 | - | 2.972 | 976 | - | 1.447 |
| Frigoglass Turkey Soğutma Sanayi İç | |||||||
| ve Dış Ticaret Anonim Şirketi | 126 | 104 | - | 31 | 5 | - | - |
| Frigoglass East Africa Ltd. | 8 | 200 | - | 13 | 202 | - | - |
| Frigoglass GmbH | - | 2 | - | 25 | 2 | - | - |
| Frigoglass Nordic | - | - | - | 9 | 23 | - | - |
| Frigoglass Industries (Nig.) Ltd | - | - | - | 16 | - | - | - |
| Beta Glass Plc. | - | - | - | 12 | - | - | - |
| 3P Frigoglass Romania SRL | - | 86 | - | 135 | - | - | 50 |
| Frigoglass Cyprus Limited | 35 | 20 | - | - | 46 | 1.326 | - |
| Frigoglass West Africa Ltd. | 50 | - | - | 147 | 15 | - | - |
| Frigoinvest Holdings B.V. | - | - | - | - | - | 81.458 | - |
| Frigoglass MENA FZE | 78 | - | - | 28 | - | - | - |
| Frigoglass Global Ltd. | - | - | - | 70 | - | - | 70 |
| Frigoglass Jebel Ali FZE | - | - | - | 47 | - | - | - |
| Total | 6.248 | 11.456 | - | 34.375 | 19.368 | 82.784 | 15.884 |
| Coca-Cola HBC AG Group | 13.814 | 489 | - | 1.554 | - | - | - |
| Grand Total | 20.062 | 11.945 | - | 35.929 | 19.368 | 82.784 | 15.884 |
| Consolidated | Parent Company |
|---|---|
| 31.12.2015 | |
| 170 | 170 |
| 3.281 | 2.664 |
Fees of member of Board of Directors Management compensation
Frigoglass operates four Research and Development (R&D) centers and are located in Greece, Romania, India and China. The Research and Development (R&D) centers located in, Romania, India and China work exclusively for the Group R&D center located in Greece
The main objectives of the R&D function are to develop innovative, pioneering cooler solutions for our customers. R&D focuses on developing products along our guiding principles of standardization and simplification, environmentally friendliness and increased differentiation.
The Company's share capital amounts to 15.178.149,60 Euro, divided among 50.593.832 shares with a nominal value of 0,30 Euro each.
All the shares are registered and listed for trading in the Securities Market of the Athens Exchange under "Big Capitalization" category. Each ordinary share entitles the owner to one vote and carries all the rights and obligations set out in law and in the Articles of Association of the Company.
The liability of the shareholders is limited to the nominal value of the shares they hold.
The Company shares may be transferred as provided by the law and the Articles of Association provide no restrictions as regards the transfer of shares.
On 31.12.2015 the following shareholders held more than 5% of the total voting rights of the Company:
None of the Company shares carry any special rights of control.
The Articles of Association make no provision for any limitations on voting rights.
The Company is not aware of any agreements among shareholders entailing limitations on the transfer of shares or limitations on voting rights, nor is there any provision in the Articles of Association providing the possibility of such agreements.
The rules set out in the Articles of Association of the Company on the appointment and replacement of members of the Board of Directors and the amendment of the provisions of the Articles of Association do not differ from those envisaged in Codified Law 2190/20.
According to the provisions of article 6, par. 4 of the Company's Articles of Association, the General Meeting may, by a resolution passed by the extraordinary quorum and majority of article 20 of the Articles of Association, authorise the Board of Directors to increase the share capital by its own decision, pursuant to the provisions of article 13, par. 1, subparagraph (c) of Codified Law 2190/1920 and without prejudice to par. 4 of the same article.
Also, according to the provisions of article 13, par. 13 of Codified Law 2190/1920, by a resolution of the General Meeting passed under an increased quorum and majority in accordance with the provisions of paragraphs 3 and 4 of article 29 and of par. 2 of article 31 of Codified Law 2190/1920, a programme can be established for the offer of shares to the Directors and to company personnel, as well as to personnel of affiliated companies, in the form of stock options, according to the more specific terms of such resolution, a summary of which is subject to the publicity formalities of article 7b of Codified Law 2190/1920. The par value of the shares offered may not exceed, in total, one tenth (1/10) of the paid-up capital on the date of the resolution of the General Meeting. The Board of Directors issues a decision regarding every other related detail which is not otherwise regulated by the General Meeting and, depending on the number of beneficiaries who have exercised their options, the Board of Directors decides on the corresponding increase of the Company's share capital and on the issuing of new shares.
According to the provisions of article 16 of Codified Law 2190/1920, subject to prior approval by the General Meeting, the Company may acquire its own shares, under the responsibility of the Board of Directors, provided that the par value of the shares acquired, including the shares previously acquired and still held by the Company, does not exceed one tenth (1/10) of its paid-up share capital. The resolution of the General Meeting must also set the terms and conditions of the acquisitions, the maximum number of shares that may be acquired, the effective period of the approval granted, which may not exceed 24 months, and, in the case of acquisition for value, the maximum and minimum consideration.
On the 1st of April 2013, FRIGOGLASS' s Board of Directors resolved to increase the share capital of the Company by 75,121 ordinary shares, following the exercise of share options by option holders pursuant to the Company's share option plan. The proceeds from the share capital increase amounted to € 231 thousand.
On the 1st of October 2013, FRIGOGLASS' s Board of Directors resolved to increase the share capital of the Company by 1,459 ordinary shares, following the exercise of share options by option holders pursuant to the Company's share option plan. The proceeds from the share capital increase amounted to € 4 thousand.
The Company has no agreements which are put in force, amended or terminated in the event of a change in the control of the Company following a public offer.
The Company has no significant agreements with members of the Board of Directors or its employees providing for the payment of compensation, especially in the case of resignation or dismissal without good reason or termination of their period of office or employment due to of a public offer.
Yours Faithfully,
THE BOARD OF DIRECTORS
To the Shareholders of Frigoglass S.A.I.C.
We have audited the accompanying separate and consolidated financial statements of Frigoglass S.A.I.C. and its subsidiaries (Group) which comprise the separate and consolidated balance sheet as of 31 December 2015 and the separate and consolidated income statement and statements of comprehensive income, changes in equity and cash flow for the year then ended and a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of these separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these separate and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the separate and consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate and consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the separate and consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate and consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the accompanying separate and consolidated financial statements present fairly in all material respects, the financial position of Frigoglass S.A.I.C. and its subsidiaries (Group) as at 31 December 2015, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.
We draw your attention to note 2.1 to the financial statements, which indicates that the Group incurred a net loss of Euro 58,3 million during the year ended 31 December 2015, and as a result the net assets of the Group became negative. In addition, considering the Group's inability to satisfy certain financial covenants as per the revolving credit facilities with the lenders and the current restrictions in the use of group's cash, the lenders waived such defaults and extended the maturity of their loans to 31st March 2017, on the condition that the Group will generate satisfactory cash flows from its operating activities and will obtain additional funding from its major shareholders. The above mentioned, which are described in detail in note 2.1 to the financial statements, could adversely affect the Group's operating activities and the going concern assumption. Our opinion is not qualified in respect of this matter.
PricewaterhouseCoopers S.A. 268 Kifissias Avenue,152 32 Athens SOEL Reg. No. 113
| Table of Contents | Pages | ||
|---|---|---|---|
| 1. | Balance Sheet | 64 | |
| 2. | Income Statement | 65 | |
| 3. | Income Statement 4th Quarter | 66 | |
| 4. | Statement of Comprehensive Income | 67 | |
| 5. | Statement of Changes in Equity | 68 | |
| 6. | Cash Flow Statement | 70 | |
| 7. | Notes to the financial statements | ||
| (1) | General information | 71 | |
| (2) | Summary of significant accounting policies | 72 | |
| (3) | Financial Risk Management | 99 | |
| (4) | Critical accounting estimates and judgments | 103 | |
| (5) | Segment information | 106 | |
| (6) | Property, plant & equipment | 108 | |
| (7) | Intangible assets | 111 | |
| (8) | Inventories | 114 | |
| (9) | Trade receivables | 114 | |
| (10) | Other receivables | 115 | |
| (11) | Cash & Cash equivalents | 115 | |
| (12) | Other creditors | 116 | |
| (13) | Non - current & current borrowings | 117 | |
| (14) | Investments in subsidiaries | 120 | |
| (15) | Share capital, treasury shares, dividends & share options | 122 | |
| (16) | Other reserves | 125 | |
| (17) | Financial expenses | 127 | |
| (18) | Income Tax | 127 | |
| (19) | Commitments | 130 | |
| (20) | Related party transactions | 131 | |
| (21) | Earnings per share | 133 | |
| (22) | Contingent liabilities | 133 | |
| (23) | Seasonality of Operations | 134 | |
| (24) | Post-balance sheet events | 134 |
| Average number of personnel | 135 |
|---|---|
| Derivative financial instruments | 136 |
| Restatements | 137 |
| Discontinuing operations | 139 |
| Non Recurring Costs & |
140 |
| Provision for other liabilities & charges | 142 |
| Deferred income tax | 143 |
| Retirement benefit obligations | 147 |
| Expenses by nature | 150 |
| Bank deposits analysis | 151 |
| Short & Long term Borrowing analysis | 151 |
| Customer Analysis | 152 |
| Maturity of the undiscounted contractual cash flows | |
| of financial liabilities | 153 |
| Consolidated | Parent Company | |||||
|---|---|---|---|---|---|---|
| Note | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Assets: | ||||||
| Property, Plant & Equipment | 6 | 207.486 | 201.527 | 6.204 | 6.737 | |
| Intangible assets | 7 | 18.495 | 19.152 | 9.294 | 9.079 | |
| Investments in subsidiaries | 14 | - | - | 58.045 | 58.045 | |
| Deferred income tax assets | 31 | 426 | 8.733 | - | 1.310 | |
| Other long term assets | 1.318 | 933 | 150 | 169 | ||
| Total non current assets | 227.725 | 230.345 | 73.693 | 75.340 | ||
| Inventories | 8 | 97.226 | 98.536 | 2.313 | 4.589 | |
| Trade receivables | 9 | 99.038 | 112.724 | 9.479 | 10.354 | |
| Other receivables | 10 | 34.909 | 31.359 | 937 | 1.978 | |
| Income tax advances | 7.746 | 7.631 | 2.530 | 3.074 | ||
| Intergroup receivables | 20 | - | - | 34.375 | 45.004 | |
| Cash & cash equivalents | 11 | 57.492 | 68.732 | 4.564 | 4.046 | |
| Derivative financial instruments | 26 | 571 | 80 | 95 | 4 | |
| Total current assets | 296.982 | 319.062 | 54.293 | 69.049 | ||
| Total assets | 524.707 | 549.407 | 127.986 | 144.389 | ||
| Liabilities: | ||||||
| Long term borrowings | 13 | 12 | 245.227 | - | - | |
| Deferred Income tax liabilities | 31 | 13.599 | 11.172 | - | - | |
| Retirement benefit obligations | 32 | 21.778 | 19.321 | 5.049 | 4.821 | |
| Intergroup bond loan | 13 | - | - | 76.650 | 71.100 | |
| Provisions for other liabilities & charges | 30 | 3.906 | 4.841 | - | - | |
| Deferred income from government grants | 26 | 33 | 26 | 33 | ||
| Total non current liabilities | 39.321 | 280.594 | 81.725 | 75.954 | ||
| Trade payables | 77.440 | 86.003 | 5.429 | 5.562 | ||
| Other payables | 12 | 37.118 | 44.805 | 2.680 | 5.766 | |
| Current income tax liabilities | 8.857 | 10.048 | - | - | ||
| Intergroup payables | 20 | - | - | 19.368 | 27.512 | |
| Intergroup bond loan | 13 | - | - | 6.134 | 1.075 | |
| Short term borrowings | 13 | 362.002 | 57.838 | - | - | |
| Derivative financial instruments | 26 | 393 | 3.144 | - | 400 | |
| Total current liabilities | 485.810 | 201.838 | 33.611 | 40.315 | ||
| Total liabilities | 525.131 | 482.432 | 115.336 | 116.269 | ||
| Equity: | ||||||
| Share capital | 15 | 15.178 | 15.178 | 15.178 | 15.178 | |
| Share premium | 15 | 2.755 | 2.755 | 2.755 | 2.755 | |
| Other reserves | 16 | 13.000 | 15.473 | 16.353 | 16.295 | |
| Retained earnings | (77.894) | (5.227) | (21.636) | (6.108) | ||
| Total Shareholders Equity | (46.961) | 28.179 | 12.650 | 28.120 | ||
| Non controlling interest | 46.537 | 38.796 | - | - | ||
| Total Equity | (424) | 66.975 | 12.650 | 28.120 | ||
| Total Liabilities & Equity | 524.707 | 549.407 | 127.986 | 144.389 |
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| Note | Year ended | Year ended | |||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Net sales revenue | 5 & 23 | 453.881 | 487.046 | 24.714 | 22.495 |
| Cost of goods sold | 33 | (386.887) | (404.380) | (23.870) | (21.519) |
| Gross profit | 66.994 | 82.666 | 844 | 976 | |
| Administrative expenses | 33 | (27.367) | (29.178) | (15.478) | (15.964) |
| Selling, distribution & marketing expenses | 33 | (24.301) | (26.969) | (3.946) | (4.098) |
| Research & development expenses | 33 | (4.434) | (4.138) | (2.038) | (1.965) |
| Other operating income | 20 | 8.145 | 7.206 | 18.449 | 21.011 |
| Other |
101 | 8 | 32 | - | |
| Operating Profit / |
19.138 | 29.595 | (2.137) | (40) | |
| Finance |
17 | (37.253) | (34.716) | (8.051) | (5.553) |
| Profit / |
|||||
| restructing losses & fire & non recurring | |||||
| costs | (18.115) | (5.121) | (10.188) | (5.593) | |
| 29 | - | (36.000) | - | - | |
| Fire Costs | 29 | - | (59) | - | - |
| Non recurring costs | 29 | (16.757) | - | (2.064) | - |
| Profit / |
(34.872) | (41.180) | (12.252) | (5.593) | |
| Income tax expense | 18 | (23.443) | (10.948) | (3.130) | (591) |
| Profit / |
(58.315) | (52.128) | (15.382) | (6.184) | |
| Attributable to: | |||||
| Non controlling interest | 3.771 | 4.374 | - | - | |
| Shareholders | (62.086) | (56.502) | (15.382) | (6.184) | |
| Depreciation | 33 | 33.666 | 33.370 | 3.393 | 2.917 |
| Earnings / |
|||||
| depreciation, amortization, restructing | |||||
| losses & fire costs (EBITDA) | 52.804 | 62.965 | 1.256 | 2.877 | |
| Amounts in € | Amounts in € | ||||
|---|---|---|---|---|---|
| Earnings / |
|||||
| - Basic | 21 | (1,2271) | (1,1168) | (0,3040) | (0,1222) |
| - Diluted | 21 | (1,2271) | (1,1166) | (0,3040) | (0,1222) |
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| Three months ended | Three months ended | ||||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Net Sales Revenue | 89.913 | 127.516 | 5.185 | 5.675 | |
| Cost of goods sold | (77.334) | (104.358) | (5.332) | (5.613) | |
| Gross profit | 12.579 | 23.158 | (147) | 62 | |
| Administrative expenses | (7.245) | (6.859) | (3.439) | (3.287) | |
| Selling, distribution & marketing expenses | (7.161) | (7.993) | (1.446) | (1.560) | |
| Research & development expenses | (1.118) | (1.043) | (358) | (446) | |
| Other operating income | 6.411 | 4.560 | 4.301 | 5.763 | |
| Other |
64 | 57 | 11 | - | |
| Operating Profit / |
3.530 | 11.880 | (1.078) | 532 | |
| Finance |
(13.411) | (10.074) | (2.173) | (1.769) | |
| Profit / |
|||||
| restructing losses & fire & non recurring | |||||
| costs | (9.881) | 1.806 | (3.251) | (1.237) | |
| - | - | - | - | ||
| Fire Costs | - | - | - | - | |
| Non recurring costs | (16.757) | - | (2.064) | - | |
| Profit / |
(26.638) | 1.806 | (5.315) | (1.237) | |
| Income tax expense | (14.297) | (5.857) | (1.927) | 159 | |
| Profit / |
|||||
| expenses | (40.935) | (4.051) | (7.242) | (1.078) | |
| Attributable to: | |||||
| Non controlling interest | 578 | 2.162 | - | - | |
| Shareholders | (41.513) | (6.213) | (7.242) | (1.078) | |
| Depreciation | 9.087 | 8.614 | 846 | 889 | |
| Earnings / |
|||||
| depreciation, amortization & | |||||
| restructuring costs (EBITDA) | 12.617 | 20.494 | (232) | 1.421 |
| Amounts in € | Amounts in € | |||
|---|---|---|---|---|
| Earnings / |
||||
| - Basic | (0,8205) | (0,1228) | (0,1431) | (0,0213) |
| - Diluted | (0,8202) | (0,1228) | (0,1431) | (0,0213) |
| Consolidated | |||||
|---|---|---|---|---|---|
| Year ended | Three months ended | ||||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Profit / |
|||||
| (Income Statement) | (58.315) | (52.128) | (40.935) | (4.051) | |
| Other Compehensive income: | |||||
| Items that will be reclassified to Profit & Loss | |||||
| Currency translation difference | (4.260) | 8.220 | 3.418 | (3.982) | |
| Cash Flow Hedges: | |||||
| - Net changes in fair Value | (211) | (204) | (77) | (42) | |
| - Income tax effect | 21 | 21 | 8 | 5 | |
| - Transfer to net profit | 254 | 139 | 75 | (4) | |
| - Income tax effect | (25) | (14) | (7) | - | |
| Items that will be reclassified to Profit & Loss | (4.221) | 8.162 | 3.417 | (4.023) | |
| Items that will not be reclassified to Profit & Loss | |||||
| Actuarial Gains/ |
(609) | (1.022) | (609) | (1.022) | |
| Income tax effect of actuarial gain/ |
59 | 266 | 59 | 266 | |
| Items that will not be reclassified to Profit & Loss | (550) | (756) | (550) | (756) | |
| Other comprehensive income / |
(4.771) | 7.406 | 2.867 | (4.779) | |
| Total comprehensive income / |
(63.086) | (44.722) | (38.068) | (8.830) | |
| Attributable to: | |||||
| - Non controlling interest | 1.396 | 5.709 | 1.637 | 374 | |
| - Shareholders | (64.482) | (50.431) | (39.705) | (9.204) | |
| (63.086) | (44.722) | (38.068) | (8.830) | ||
| Parent Company | |||||
| Year ended | Three months ended | ||||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Profit / |
|||||
| (Income Statement) | (15.382) | (6.184) | (7.242) | (1.078) | |
| Other Compehensive income: | |||||
| Items that will not be reclassified to Profit & Loss | |||||
| Actuarial Gains/ Income tax effect of actuarial gain/losses |
(205) 59 |
(1.022) 266 |
(205) 59 |
(1.022) 266 |
|
| Other comprehensive income / |
(146) | (756) | (146) | (756) | |
| Total comprehensive income / |
(15.528) | (6.940) | (7.388) | (1.834) | |
| Attributable to: | |||||
| - Non controlling interest | - | - | - | - | |
| - Shareholders | (15.528) | (6.940) | (7.388) | (1.834) |
The notes on pages 71 to 153 are an integral part of the financial statements
(6.940) (15.528) (7.388) (1.834)
| Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| Share Capital |
Share premium |
Other reserves |
Retained earnings |
Total Shareholders Equity |
Non Controlling Interest |
Total Equity |
|
| Balance at 01.01.2014(restated) | 15.178 | 2.755 | 6.717 | 54.455 | 79.105 | 33.405 | 112.510 |
| Profit / |
- | - | - | (56.502) | (56.502) | 4.374 | (52.128) |
| Other Comprehensive income / | |||||||
| - - | 9.592 | (3.521) | 6.071 | 1.335 | 7.406 | ||
| Total comprehensive income / | |||||||
| - - | 9.592 | (60.023) | (50.431) | 5.709 | (44.722) | ||
| Dividends to non controlling interest | - | - | - | - | - | (318) | (318) |
| Share option reserve | - | - | (495) | - | (495) | - | (495) |
| Transfers between reserves | - | - | (341) | 341 | - | - | - |
| Balance at 31.12.2014 | 15.178 | 2.755 | 15.473 | (5.227) | 28.179 | 38.796 | 66.975 |
| Consolidated | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share Capital |
Share premium |
Other reserves |
Retained earnings |
Total Shareholders Equity |
Non Controlling Interest |
Total Equity |
||
| Balance at 01.01.2015 | 15.178 | 2.755 | 15.473 | (5.227) | 28.179 | 38.796 | 66.975 | |
| Profit / |
- | - | - | (62.086) | (62.086) | 3.771 | (58.315) | |
| Other Comprehensive income / | ||||||||
| - - | 1.000 | (3.396) | (2.396) | (2.375) | (4.771) | |||
| Total comprehensive income / | ||||||||
| - - | 1.000 | (65.482) | (64.482) | 1.396 | (63.086) | |||
| Dividends to non controlling interest | - | - | - | - | - | (647) | (647) | |
| Share option reserve | - | - | 58 | - | 58 | - | 58 | |
| Acquisition of subsiadiary's non | ||||||||
| controlling interest | - - | (3.531) | (7.185) | (10.716) | 6.992 | (3.724) | ||
| Balance at 31.12.2015 | 15.178 | 2.755 | 13.000 | (77.894) | (46.961) | 46.537 | (424) |
| Parent Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share Capital |
Share premium |
Other reserves |
Retained earnings |
Total Equity |
||||
| Balance at 01.01.2014(restated) | 15.178 | 2.755 | 17.131 | 491 | 35.555 | |||
| Profit / |
- | - | - | (6.184) | (6.184) | |||
| Other Comprehensive income / | ||||||||
| - | - | - | (756) | (756) | ||||
| Total comprehensive income / | ||||||||
| - | - | - | (6.940) | (6.940) | ||||
| Share option reserve | - | - | (495) | - | (495) | |||
| Transfers between reserves | - | - | (341) | 341 | - | |||
| Balance at 31.12.2014 | 15.178 | 2.755 | 16.295 | (6.108) | 28.120 |
| Parent Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share | Share | Other | Retained | Total | ||||
| Capital | premium | reserves | earnings | Equity | ||||
| Balance at 01.01.2015 | 15.178 | 2.755 | 16.295 | (6.108) | 28.120 | |||
| Profit / Other Comprehensive income / |
- | - | - | (15.382) | (15.382) | |||
| - | - | - | (146) | (146) | ||||
| Total comprehensive income / | ||||||||
| - | - | - | (15.528) | (15.528) | ||||
| Share option reserve | - | - | 58 | - | 58 | |||
| Balance at 31.12.2015 | 15.178 | 2.755 | 16.353 | (21.636) | 12.650 |
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| Note | Year ended | Year ended | |||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Cash Flow from operating activities | |||||
| Profit / |
(34.872) | (41.180) | (12.252) | (5.593) | |
| Adjustments for: | |||||
| Depreciation | 33 | 33.666 | 33.370 | 3.393 | 2.917 |
| Finance costs, net | 17 | 37.253 | 34.716 | 8.051 | 5.553 |
| Provisions | 18.868 | 26.512 | 249 | 59 | |
| equipment & intangible assets | 33 | (101) | (8) | (32) | - |
| Changes in Working Capital: | |||||
| Decrease / (increase) of inventories | (13.631) | 19.527 | 323 | (275) | |
| Decrease / (increase) of trade receivables | 12.242 | 4.382 | 309 | 1.022 | |
| Decrease / (increase) of intergroup receivables | 20 | - | - | 10.629 | (8.222) |
| Decrease / (increase) of other receivables | (3.550) | (9.020) | 1.041 | (1.121) | |
| Decrease / (increase) of other long term | (385) | 600 | 19 | 12 | |
| (Decrease) / increase of trade payables | (8.563) | (8.771) | (133) | (188) | |
| (Decrease) / increase of intergroup payables | 20 | - | - | (8.144) | 6.977 |
| (Decrease) / increase of other liabilities (excluding | |||||
| borrowing) | (19.001) | (5.642) | (3.577) | 704 | |
| Less: | |||||
| Income taxes paid | (12.697) | (6.386) | - | 179 | |
| (a) Net cash generated from operating activities | 9.229 | 48.100 | (124) | 2.024 | |
| Cash Flow from investing activities | |||||
| Purchase of property, plant and equipment | 6 | (32.453) | (23.351) | (401) | (1.265) |
| Purchase of intangible assets | 7 | (4.084) | (5.333) | (2.787) | (3.321) |
| Acquisition of subsiadiary's non controlling | |||||
| interest | (3.724) | - | - | - | |
| Proceeds from disposal of property, plant, | |||||
| equipment and intangible assets | 417 | 3.087 | 187 | 157 | |
| (b) Net cash generated from investing activities | (39.844) | (25.597) | (3.001) | (4.429) | |
| Net cash generated from operating and investing | |||||
| activities (a) + (b) | (30.615) | 22.503 | (3.125) | (2.405) | |
| Cash Flow from financing activities | |||||
| Proceeds from loans | 143.543 | 125.081 | - | - | |
| (84.594) | (116.314) | - | - | ||
| Proceeds from intergroup loans | - | - | 7.715 | 9.975 | |
| - | - | (2.165) | (400) | ||
| Interest paid | (26.764) | (26.251) | (1.907) | (5.159) | |
| Dividends paid to shareholders | - | (28) | - | (28) | |
| Dividends paid to non controlling interest | (647) | (318) | - | - | |
| (c) Net cash generated from financing activities | 31.538 | (17.830) | 3.643 | 4.388 | |
| Net increase / (decrease) in cash and cash | |||||
| equivalents (a) + (b) + (c) | 923 | 4.673 | 518 | 1.983 | |
| Cash and cash equivalents at the beginning | |||||
| of the year | 68.732 | 59.523 | 4.046 | 2.063 | |
| Effects of changes in exchange rate | (12.163) | 4.536 | - | - | |
| Cash and cash equivalents at the end of the year | 57.492 | 68.732 | 4.564 | 4.046 |
These financial statements include the financial statements of the Parent Company FRIGOGLASS S.A.I.C. (the "Company") and the consolidated financial statements of the Company and its subsidiaries (the "Group"). The names of the subsidiaries are presented in Note 14 of the financial statements.
Frigoglass S.A.I.C. and its subsidiaries are engaged in the manufacturing, trade and distribution of commercial refrigeration units and packaging materials for the beverage industry. The Group has manufacturing plants and sales offices in Europe, Asia, Africa and America.
The Company is a limited liability company incorporated and based in Kifissia, Attica.
The Company's' shares are listed on the Athens Stock Exchange.
The address of its registered office is:
15, A. Metaxa Street GR 145 64, Kifissia Athens, Hellas
The company's web page is: www.frigoglass.com
The financial statements have been approved by the Board of Directors on 30 March 2016 and are subject to the approval of the shareholders General Assembly.
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
These financial statements have been prepared by management in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union, and International Financial Reporting Standards issued by the IASB.
The financial statements have been prepared in accordance with the going concern basis of accounting. The use of this basis of accounting takes into consideration the Group's current and forecasted financing position.
During the year ended 31 December 2015, the Group reported losses amounting to €58m as a result of the deterioration of its operating results, the recognition of a loss in the amount of €17m relating mainly to a non–recurring impairment charge on its inventories and the impairment of deferred tax assets of €8.9m which were assessed as not recoverable.
As at the year-end date the net assets of the Group were negative by €0.4m.
In May 2013, the Group announced that its subsidiary Frigoglass Finance B.V. (the "Issuer") issued €250m Senior Notes due on 15 May 2018 (the "Notes"), at a fixed coupon of 8.25% per annum and at an issue price of 100%. The issue was finalized on 20 May 2013 and the proceeds from this issue were used to refinance existing Group facilities. In addition, the Issuer also entered into two bilateral revolving credit facilities (the "RCFs"), each in an amount of €25 million, and a three year maturity. The Notes and the RCFs are fully and unconditionally guaranteed on a senior unsecured basis by Frigoglass S.A.I.C. (other than with respect to one of the RCFs), Frigoinvest Holdings B.V. (the direct parent company of the Issuer) and by certain other subsidiaries of the Group (refer to Note 13). The Notes are subject to incurrence covenants while for the RCFs, the Group is required to comply with, among other things, debt service and leverage financial covenants. On 18 March 2014, the Group entered into an amendment to the RCFs to reset the financial covenants to new levels.
As a result of further deterioration in the Group's operating profits, EBITDA fell below the level required by the financial covenants under the RCF. The Group has been in on-going discussions with the lenders under the RCFs, who have provided consecutive waivers of the breaches of certain covenants under the RCFs.
As a result of continued delays in the completion of the transaction with GZI, the Group engaged several advisers and began a comprehensive review of its business and financing arrangements in order to optimize the capital structure of the Group and to ensure that an adequate level of financial liquidity is achieved and maintained.
On 26 February 2016, the Group announced the termination of the acquisition agreement with GZI, due to amended offers made by GZI not reflecting the full value of the Glass business and not being in the best interests of Frigoglass and its stakeholders. The RCFs were due to mature in May 2016. The Group has cash and cash equivalents of €57m. An amount of €30m is subject to local exchange control regulations in Nigeria, however this amount is primarily allocated to the Glass business. Following the termination of the aforementioned disposal of the Glass business, the Group continued discussions with its lenders with respect to the extension of the waivers referred to above as well as an extension of the term of the RCFs to 31 March 2017.
On 31 March 2016, the lenders under the RCFs entered into an agreement with the Issuer pursuant to which they agreed to extend the maturity of the RCFs up to 31 March 2017, to waive all breaches and to make certain other amendments to the terms of the RCFs, subject to certain conditions being met (including the provision of the Term Loan Facility by the majority shareholder). In connection with the amendment and extension of the RCFs, Frigoglass has agreed to repay and cancel €5 million of indebtedness outstanding under each RCF and has agreed to an amortization schedule that provides for an additional €14 million of repayments consisting of a repayment and cancellation of €5 million under each RCF on 31 October 2016 and €2 million under each RCF on 31 December 2016.
In accordance with IFRS the Notes were classified as current liabilities on the assumption that the debt under the RCFs could have technically been accelerated by the lenders and therefore trigger an event of default under the Notes due to the fact that the waivers obtained as at the balance sheet date did not originally cover a period of 12 months after the year end. However, the breaches of covenants under the RCFs have been consecutively waived by the lenders under the RCFs for all the relevant periods and therefore no such default, cross default or cross acceleration has actually occurred under the Notes as a result of such breaches. For the purposes of compliance with IFRS the Notes have been classified within current liabilities, despite the agreement to extend and amend the RCFs until 31 March 2017 (as discussed above).
In addition, on 31 March 2016, our major shareholder committed to provide the Group with a €30m term loan facility (the "Term Loan Facility"), on terms substantially similar to the RCFs. The Term Loan Facility to be provided under the terms of the commitment matures on March 31, 2017. This commitment is conditional upon receipt of the requisite shareholder approval at our AGM which will be convened on or about 22 April 2016.
Management intends to use the proceeds of the Term Loan Facility for general corporate and working capital purposes and to repay and cancel €5 million of indebtedness outstanding under each RCF. The provision of the Term Loan Facility enhances the Group's liquidity position.
At present Greek banks are in the process of undertaking their regular annual review of their respective credit facilities. The Group is confident that all the uncommitted facilities provided by the Greek banks will be extended till March 2017.
Management also intends to continue to work together with its financial advisor and other reputable advisors (including a working capital advisor) to identify and implement various initiatives which will protect the value of the business for all stakeholders while enabling the Group to return its business to profitable growth.
On the basis that the above initiatives are successfully completed as outlined above, the Group's financial footing and ability to continue in operation will be significantly strengthened. The Group's financial forecasts and projections for the next 12 months indicate that the Group would then be able to meet its obligations as they fall due, however, this assessment is sensitive to a number of downside risks as those described in the "Main Risks and Uncertainties" section of the Directors' Report and in note 3 to the Group's financial statements, particularly if such downside risks were to materialize in combination. Therefore, the Group expects that it may still need to seek strategic divestments and carry out other fundraising transactions as necessary to build resilience against, or respond to, downside risks, to capture the opportunity in the Group's portfolio and secure the Group's future.
The Directors recognize that the combination of the circumstances described above represents a material uncertainty which could adversely affect the going concern assumption of the Group.
Nevertheless, the Directors expect that the amendment and extension of the RCFs and the provision of the Term Loan Facility from the major shareholder will receive all of the required approvals and consents as set out above, and the Directors therefore have a reasonable expectation that the Group will be able to successfully navigate the present uncertainties it faces and continue in operation. Accordingly, the financial statements have been prepared on a going concern.
The macroeconomic and financial environment in Greece remains fragile. The recent developments relating to the instability of the Greek banking sector and the resulting imposition of capital controls led to the reduction of consumers' disposable income and restriction in the movement of funds. These circumstances may adversely affect the Group's operations in Greece for 2016. During the current period the critical point is the completion of the 1st evaluation of the 3rd Greek adjustment program and the assurance of the smooth disbursement of the remaining instalments, which is expected to lead on to an improvement in the Greek economic environment. Our 2015 revenues for Greece amounted to 2,7% of consolidated net sales revenues and our 2015 non-current assets for the territory amounted to 7% of the consolidated non-current assets. We are continuously monitoring developments in Greece. As at 31 December 2015, cash and cash equivalents of € 4.5 million were subject to capital controls. Furthermore, in Nigeria, the introduction of tight capital controls and the pegging of the local currency Naira to the USD at a rate that may not be reflecting the supply and demand rate for the currency may result in volatility in the local currency. We are continuously monitoring and assessing the situation and we are taking timely actions to secure the smooth operation of our business in this challenging environment and to minimize any adverse impact of a potential currency devaluation on the Group's performance.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the 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.
Differences that may exist between the figures of the financial statement and those of the notes are due to rounding. Wherever it was necessary, the comparative figures have been reclassified in order to be comparable with the current year's presentation.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair values of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus any costs directly attributable to the acquisition. The acquired identifiable assets, liabilities and contingent liabilities are measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.
The excess of the cost of acquisition over the Group's share of the fair value of the net assets of the subsidiary acquired is recorded as goodwill. Note 2.6.1 describes the accounting treatment of goodwill. Whenever the cost of the acquisition is less than the fair value of the Group's share of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless there is evidence of impairment. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Group applies a policy of treating transactions with non-controlling interests as transactions with equity owners of the group. For purchases from minority interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is deducted from equity.
When the group ceases to have control any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
The Company accounts for investments in subsidiaries in its separate financial statements at historic cost less impairment losses.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the managing director and his executive committee that makes strategic decisions.
Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity ("the functional currency").
The consolidated financial statements are presented in Euros, which is the Company's functional and presentation currency.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates, of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement.
The results and financial position of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
Goodwill and other fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing rate at the balance sheet date. Exchange differences arising are recognized in other comprehensive income.
Buildings comprise mainly factories and offices. All property, plant and equipment are stated at historic cost less accumulated depreciation and any impairment losses, except for land which is shown at cost less any impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the tangible assets. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to write off the cost of each asset to its residual value over its estimated useful life as follows:
| Buildings | up to 40 years |
|---|---|
| Vehicles | up to 6 years |
| Glass Furnaces | 7 years |
| Glass Moulds | 2 years |
| Machinery | up to 15 years |
| Furniture & Fixtures | up to 6 years |
The cost of subsequent expenditures is depreciated during the estimated useful life of the asset and costs for major periodic renovations are depreciated to the date of the next scheduled renovation. When an item of plant and machinery comprises major components with different useful lives, the components are accounted for as separate items of plant and machinery.
The tangible assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
In the case where an asset's carrying amount is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference (impairment loss) is recorded as expense in the income statement.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.
Gains and losses on disposals are determined by the difference between the sales proceeds and the carrying amount of the asset. These gains or losses are included in the income statement.
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquire and the acquisition-date fair value of any previous equity interest in the acquire over the fair value of the identifiable net assets acquired. If the total of consideration transferred, noncontrolling interest recognised and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. At each balance sheet date the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of goodwill is fully recoverable.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is performed on the cash-generating units that are expected to benefit from the acquisition from which goodwill was derived.
Loss from impairment is recognised if the carrying amount exceeds the recoverable amount. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Research expenditure is recognised as an expense as incurred.
Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the project will be successful, considering its commercial and technological feasibility, and also the costs can be measured reliably. Other development expenditures are recognised as an expense in the income statement as incurred. Development costs that have a finite useful life and that have been capitalised, are amortised from the commencement of their production on a straight line basis over the period of its useful life, not exceeding 5 years.
Capitalised software licenses are carried at acquisition cost less accumulated amortisation, less any accumulated impairment.
Computer software development costs which are assets controlled by the entity and from which the entity expects to derive future economic benefits are capitalised.
These costs may be acquired externally or generated internally when they are directly attributable to the development of the computer software.
Computer software licences & development costs are amortised using the straight-line method over their useful lives, not exceeding a period of 5 years.
Computer software maintenance costs are recognised as expenses in the income statement as they incur
Patents, trademarks, licenses and other intangible assets are shown at historical cost less accumulated amortization and less any accumulated impairment.
Costs that meet the asset recognition criteria are controlled by the entity and from which the entity expects to derive future economic benefits are capitalised.
These costs may be acquired externally or generated internally.
These intangible assets have a definite useful life, and their cost is amortized using the straight-line method over their useful lives not exceeding a period of 15 years.
Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually and whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised as an expense immediately, for the amount by which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
The Group classifies its financial assets in the following categories: at fair value through profit and loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date.
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets.
The Group and the Company did not own any financial assets, including derivatives held for trading during the periods presented in these financial statements. These financial assets when they occur are recorded at fair value through the income statement.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date, which are classified as non-current assets. Receivables are classified as 'trade and other receivables' or cash and cash equivalents in the balance sheet (Note 2.11 and Note 2.12).
The Group did not have any receivables from loan contracts during the periods presented in these financial statements.
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Available-for-sale financial assets are carried at fair value with any change in the fair value recognised in equity.
The Group did not own any financial assets that can be characterised as available-for-sale financial assets during the periods presented in these financial statements.
(d) Investments in subsidiaries
Equity investments in subsidiaries are measured at cost less impairment losses in the separate financial statements of the parent. Impairment losses are recognised in the income statement.
The Group and Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. Impairment testing of trade receivables is described in Note 2.11.
(f) Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of any
derivative instruments are recognised immediately in the income statement within 'other gains/(losses) – net'. The Group's policy is not to enter into derivatives contracts as hedging instruments.
The Group has entered into certain derivative contracts for the purpose of hedging activities. Derivatives associated with hedging activities are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting fair value gain or loss depends on the nature of the item being hedged. The Group has designated derivatives as hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (i.e. cash flow hedges).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged item, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within 'other gains/ (losses) – net'.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the income statement within 'finance costs'. The gain or loss relating to the ineffective portion is recognised in the income statement within 'other gains/ (losses) – net'.
However, when the forecast transaction that is hedged results in the recognition of a nonfinancial asset (for example, inventory or fixed assets), the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in cost of goods sold in the case of inventory or in depreciation in the case of fixed assets.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within 'other gains/ (losses) – net'.
Leases where the lessor retains a significant portion of the risks and rewards of ownership are classified as operating leases. Payments made under operating leases (net of any incentives received by the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
Leases of property, plant and equipment where a Group entity has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased assets and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance lease liability outstanding.
The corresponding rental obligations, net of finance charges, are included in liabilities as other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment, acquired under finance leases are depreciated over the shorter of the asset's useful life and the lease term.
When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return.
Assets leased out under operating leases are included within tangible assets in the balance sheet. They are depreciated over their expected useful lives, which are defined on the basis of similar tangible assets owned by the Group. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.
Inventories are recorded at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less any applicable selling expenses.
The cost of finished goods and work in progress is measured on a weighted average bases and comprises raw materials, direct labour cost and other related production overheads.
Appropriate allowance is made for excessive, obsolete and slow moving items. Writedowns to net realisable value and inventory losses are expensed in the period in which the write-downs or losses occur.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group entity will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganisation, and default or delinquency in payments (more than 120 days overdue) are considered indicators that the trade receivable is impaired.
The amount of the provision is the difference between the asset's carrying amount and the recoverable amount.
The recoverable amount, if the receivable is more than 1 year is equal to the present value of expected cash flow, discounted at the market rate of interest applicable to similar borrowers. The amount of the provision is recognised as an expense in the income statement.
Subsequent recoveries of amounts previously written off are credited against 'selling and marketing costs' in the income statement.
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term, highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the balance sheet.
Borrowings are recognised initially at fair value, as the proceeds received, net of any transaction cost incurred. Borrowings are subsequently recorded at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group entity has an unconditional right to defer settlement for at least 12 months after the balance sheet date.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company's subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
The deferred income tax that arises from initial recognition of an asset or liability in a transaction other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit nor loss, is not accounted for.
Deferred tax assets are recognised to the extent that future taxable profit, against which the temporary differences can be utilised, is probable.
Deferred tax liabilities are provided for taxable temporary differences arising on investments in subsidiaries, except for when the Group is able to control the reversal of the temporary difference, thus it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income taxation is determined using tax rates that have been enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled. Deferred tax is charged or credited in the income statement, unless it relates to items credited or charged directly to equity, in which case the deferred tax is also recorded in equity.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Group entities operate various pension and retirement schemes in accordance with the local conditions and practices in the countries they operate. These schemes include both funded and unfunded schemes. The funded schemes are funded through payments to insurance companies or trustee-administered funds, as determined by periodic actuarial calculations. The Group's employees participate in both defined benefit and defined contribution plans.
A defined benefit plan is a pension or voluntary redundancy plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
The liability regarding defined benefit pension or voluntary redundancy plans, including certain unfunded termination indemnity benefits plans, is measured as the present value of the defined benefit obligation at the balance sheet date minus the fair value of plan assets (when the program is funded), together with adjustments for actuarial gains/losses and past service cost. The defined benefit obligation is calculated at periodic intervals not exceeding two years, by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by the estimated future cash outflows using interest rates applicable to high quality corporate bonds or government securities with terms to maturity approximating the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and amendments to pension plans are charged or credited to equity in other comprehensive income during the assessment period by external actuaries.
Past service cost is recognised as expense on a constant basis during the average period until the contributions are vested. To the extent that these contributions have been vested directly after the amendments or the establishment of a defined benefit plan, the company directly records the past service cost.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity that is either publicly or privately administered. Once the contributions have been paid, the Group has no further legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The regular contributions are recorded as net periodic expenses for the year in which they are due, and as such are included in staff costs.
Termination benefits are payable whenever an employee's employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits.
The Group recognises termination benefits when it is demonstrably committed either to terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
The Company and the Group recognizes a liability for bonuses that are expected to be settled within 12 months and based on amounts expected to be paid upon the settlement of the liability.
The Company operates a share option scheme for its senior executives. Options are allocated to executives depending on their performance, employment period in the company, and their positions' responsibilities. The options are subject to a two-year service vesting period after granting and may be exercised during a period of ten years from the date of award.
The fair value of the employee services received in exchange for the grant of the options is recognized as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
Provisions are recognised when a) a Group entity has a present legal or constructive obligation as a result of past events, b) it is probable that an outflow of resources will be required to settle the obligation, c) and of the amount can be reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments and are recognised in the period during which the Group entity is legally or constructively bound to pay the respective amounts. Provisions are not recognised for future operating losses related to the Group's ongoing activities.
When there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
In the case that a Group entity expects a provision to be reimbursed from a third party, for example under an insurance contract, the reimbursement is recognised as a separate asset provided that the reimbursement is virtually certain.
The Group entity recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of settling the obligations under the contract.
Provisions are measured at the present value of the expenditures that, according to the management's best estimations, are expected in order to settle the current obligation at the balance sheet data (note 4.1 & 3.1). The discounting rate used for the calculation of the present value reflects current market assessments of the time value of money and the risks specific to the obligation.
The provisions for restructuring costs include fines related to the premature ending of lease agreements, personnel redundancies as well as provisions for restructuring activities that have been approved and communicated by Management. These costs are recognised when the Group has a present legal or constructive obligation. Personnel redundancies are expensed only when an agreement with the personnel representatives is in place or when employees have been informed in advance for their redundancy.
Revenue comprises the fair value for the sale of goods and services net of value-added tax, rebates and discounts, and after eliminating sales within the Group in the consolidated financial statements. Rebates and discounts are recognised in the financial year they relate to.
Revenue is recognised as follows:
Revenue from the sale of goods is recognised when the significant risks and rewards of owning the goods are transferred to the buyer, (usually upon delivery and customer acceptance) and the collectability of the related receivable is reasonably assured.
Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.
Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.
Dividend income (whether relating to interim dividends or final dividends) is recognised when the right to receive payment is established.
Dividends are recorded in the financial statements, as a liability, in the period in which they are approved by the Annual Shareholder Meeting.
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Group entity will comply with anticipated conditions.
Government grants relating to costs are deferred and recognized in the income statement over the period corresponding to the costs they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in long-term liabilities as deferred income and are credited to the income statement on a straight-line basis over the expected lives of the related assets.
General and specific 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 recognised in profit or loss in the period in which they are incurred.
Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning during the current financial year and subsequent years that have no significant impact in the Group's financial position or performance.
This interpretation sets out the accounting for an obligation to pay a levy imposed by government that is not income tax. The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy (one of the criteria for the recognition of a liability according to IAS 37) is the activity described in the relevant legislation that triggers the payment of the levy. The interpretation could result in recognition of a liability later than today, particularly in connection with levies that are triggered by circumstances on a specific date.
The amendments set out below describe the key changes to three IFRSs following the publication of the results of the IASB's 2011-13 cycle of the annual improvements project.
This amendment clarifies that IFRS 3 does not apply to the accounting for the formation of any joint arrangement under IFRS 11 in the financial statements of the joint arrangement itself.
The amendment clarifies that the portfolio exception in IFRS 13 applies to all contracts (including non-financial contracts) within the scope of IAS 39/IFRS 9.
IFRS 9 replaces the guidance in IAS 39 which deals with the classification and measurement of financial assets and financial liabilities and it also includes an expected credit losses model that replaces the incurred loss impairment model used today. IFRS 9 establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in IAS 39. The Group is currently investigating the impact of IFRS 9 on its financial statements. The Group cannot currently early adopt IFRS 9 as it has not yet been endorsed by the EU.
IFRS 15 has been issued in May 2014. The objective of the standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. It contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognised. The underlying principle is that an entity will recognise revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The Group is currently investigating the impact of IFRS 15 on its financial statements. The standard has not yet been endorsed by the EU.
IFRS 16 has been issued in January 2016 and supersedes IAS 17. The objective of the standard is to ensure the lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. The Group is currently investigating the impact of IFRS 16 on its financial statements. The standard has not yet been endorsed by the EU.
These narrow scope amendments apply to contributions from employees or third parties to defined benefit plans and simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary.
This amendment requires an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a 'business'.
This amendment clarifies that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate and it also clarifies that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset.
These amendments change the financial reporting for bearer plants, such as grape vines and fruit trees. The bearer plants should be accounted for in the same way as selfconstructed items of property, plant and equipment. Consequently, the amendments include them within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants will remain within the scope of IAS 41.
This amendment allows entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements and clarifies the definition of separate financial statements.
These amendments clarify guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.
These amendments clarify the accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value. The amendments have not yet been endorsed by the EU.
These amendments require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendments have not yet been endorsed by the EU.
The amendments set out below describe the key changes to certain IFRSs following the publication of the results of the IASB's 2010-12 cycle of the annual improvements project.
The amendment clarifies the definition of a 'vesting condition' and separately defines 'performance condition' and 'service condition'.
The amendment clarifies that an obligation to pay contingent consideration which meets the definition of a financial instrument is classified as a financial liability or as equity, on the basis of the definitions in IAS 32 "Financial instruments: Presentation". It also clarifies that all non-equity contingent consideration, both financial and nonfinancial, is measured at fair value through profit or loss.
The amendment requires disclosure of the judgements made by management in aggregating operating segments.
The amendment clarifies that the standard does not remove the ability to measure short-term receivables and payables at invoice amounts in cases where the impact of not discounting is immaterial.
Both standards are amended to clarify how the gross carrying amount and the accumulated depreciation are treated where an entity uses the revaluation model.
The standard is amended to include, as a related party, an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity.
The amendments set out below describe the key changes to four IFRSs.
The amendment adds specific guidance to help management determine whether the terms of an arrangement to service a financial asset which has been transferred constitute continuing involvement and clarifies that the additional disclosure required by the amendments to IFRS 7, 'Disclosure – Offsetting financial assets and financial liabilities' is not specifically required for all interim periods, unless required by IAS 34.
The amendment clarifies that, when determining the discount rate for postemployment benefit obligations, it is the currency that the liabilities are denominated in that is important, and not the country where they arise.
IAS 34 "Interim financial reporting"
The amendment clarifies what is meant by the reference in the standard to 'information disclosed elsewhere in the interim financial report'.
The Group's activities expose it to a variety of financial risks: market risk (price risk and currency risk), credit risk, liquidity risk and cash flow interest rate risk.
The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of Directors. Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
The Group Treasury does not perform speculative transactions or transactions that are not related to the Group's operations.
The Group's overall risk management program focuses on the natural hedging of monetary items in order to minimize the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance.
The Company's and the Group's monetary items consist mainly of deposits with banks, bank overdrafts, trade accounts receivable and payable, loans to and from subsidiaries, equity investments, dividends payable and leases obligations.
In addition the Group and the Company entered into derivative financial instruments contracts designated as cash flow hedging in order to hedge certain risks.
The Group/Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, Nigerian Naira, South African Rand, Indian Rupee, Norwegian Crone, Swedish Crone and the Russian rouble, Chinese Yuan.
Entities in the Group use natural heading, transacted with the Group Treasury, to hedge their exposure to foreign currency risk in connection with the presentation currency.
The Group has certain investments in subsidiaries that operate in foreign countries, whose net positions are exposed to foreign exchange risk during the consolidation of their financial statements to the Group's financial statements. The Group is not substantially exposed to this type of risk since most of its subsidiaries use Euro as their functional currency with the exception of the subsidiaries in Nigeria, Romania, Indonesia, Kenya, Poland and China.
if the Euro had weakened by 5% against the US dollar, the Nigerian, the United Arab Emirates dirham, the Romanian, the Chinese, the Indian, and the South African currencies with all other variables held constant,
post-tax profit for the year would have been
Euro 859 thousand higher (2013: Euro 535 thousand).
Equity would have been
Euro 8,050 thousand higher (2013: Euro 8,559 thousand).
if the Euro had strengthened by 5% against the US dollar, the Nigerian, the United Arab Emirates dirham, the Romanian, the Chinese, the Indian, and the South African currencies with all other variables held constant,
post-tax profit for the year would have been
Euro 1.148 thousand higher (2014: Euro 859 thousand).
Equity would have been
Euro 6.234 thousand higher (2014: Euro 8.050 thousand).
The Group is not exposed to risks from changes in the prices of equity securities since it does not own securities that can be characterised either as available for sale assets or financial assets recorded at fair value in the financial statements.
The Group is exposed to changes in the prices of raw materials. This risk is offset by increased productivity, by increased sales volume resulting in fixed cost allocation over greater production volume, as well as by absorption of the change in cost into the final price of the product.
In addition, at the second quarter of 2009 the Group has entered into commodities derivatives financial instruments in order to hedge its exposure from changes in the prices of raw materials for purchases that will take place in 2010 and onwards.
Credit risk arises from cash and cash equivalents as well as credit exposures to customers, including outstanding receivables and committed transactions.
For banks and financial institutions, only independently rated parties with high quality credit credentials are accepted.
For customers, the Group/Company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. Trade accounts receivable consist mainly of a large, widespread customer base. All Group companies monitor the financial position of their debtors on an ongoing basis.
Where necessary, credit guarantee insurance cover is purchased. The granting of credit is controlled by credit limits and application of certain terms. Appropriate provision for impairment losses is made for specific credit risks. At the year-end management considered that there was no material credit risk exposure that had not already been covered by credit guarantee insurance or a doubtful debt provision. The Group and the Company do not use derivative financial products.
The Group and the Company have a significant concentration of credit risk exposures regarding cash and cash equivalent balance and revenues from the sale of products and merchandise.
No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties.
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities and the ability to close out adverse market positions.
Due to the dynamic nature of the underlying businesses, Group treasury aims at maintaining flexibility in funding by maintaining committed (exclusive) credit lines.
The Group manages liquidity risk by proper management of working capital and cash flows. It monitors forecasted cash flows and ensures that adequate banking facilities and reserve borrowing facilities are maintained. The Group has sufficient undrawn call/demand borrowing facilities that could be utilised to fund any potential shortfall in cash resources.
The Group's/Company's income and operating cash flows are substantially independent of changes in market interest rates since the Group does not hold any interest bearing assets other than short-term time deposits.
Exposure to interest rate risk on liabilities is limited to cash flow risk from changes in floating rates.
The Group continuously reviews interest rate trends and the tenure of financing needs. Consequently, all short, medium and long term borrowings are entered into at floating rates with re-evaluation dates in less than 6 months.
The Group's objectives when managing capital are to safeguard the group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or raise debt.
The nominal value less impairment provision of trade receivables is assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.
The fair value of investments in subsidiaries is test for impairment when indications exist that these investments may be impaired. The fair value is determined by using discounted cash flow techniques and makes assumptions that are based on market conditions existing at each balance sheet date.
Other than trade receivables, cash and cash equivalents, and investments in subsidiaries the Group does not have any other financial assets that subject to fair value estimation.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under current circumstances.
The Group makes estimates and assumptions concerning the future. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year concern income tax.
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required by the Group Management in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. If the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax.
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.6.1. of the annual financial statements. The recoverable amounts of cash-generating units have been determined based on value-inuse calculations. These calculations require the use of estimates (see Note 7).
The Group's investments in subsidiaries are tested for impairment when indications exist that its carrying value may not be recoverable. The recoverable amount of the investments in subsidiaries is determined on a value in use basis, which requires the use of assumptions as is further described in note 14.
The Group assesses on an annual basis, the useful lives of its property, plant and equipment and intangible assets. These estimates take into account the relevant operational facts and circumstances, the future plans of Management and the market conditions that exist as at the date of the assessment.
The provision for doubtful debts has been based on the outstanding balances of specific debtors after taking into account their ageing and the agreed credit terms. This process has excluded receivables from subsidiaries as Management is of the view that these receivables are not likely to require an impairment provision. The analysis of the provision is presented in note 9. Further information with respect to customer receivables is presented in note 34.
The present value of the retirement benefit obligations depend on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the relevant obligation comprises the discount rate, the expected return on plan assets, the rate of compensation increase, the rate of inflation and future estimated pension increases. Any changes in these assumptions will impact the carrying amount of the retirement benefit obligations. The Group determines the amount of the retirement benefit obligations using suitably qualified independent actuaries at each year-end's balance sheet date (refer to Note 30 for detailed information).
There are no areas that Management required to make critical judgements in applying accounting policies.
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. The operating segment information presented below is based on the information that the chief operating decision makers ( the Managing Director and his Operating Committee) use to assess the performance of the Group's operating segments.
The Managing Director and the Operating Committee receive on a monthly basis detailed reports of Sales, Income Statement, Balance Sheet and Cash flow for every business sector in order to evaluate the performance of the business segments.
Taking into account the above, the categorization of the Group's operations in business segments is the following:
The consolidated Balance Sheet and the Income Statement per business segment are presented below:
| Year ended | Year ended | ||||||
|---|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | ||||||
| ICM | Glass | Total | ICM | Glass | Total | ||
| Net sales revenue | 316.632 | 137.249 | 453.881 | 339.635 | 147.411 | 487.046 | |
| Operating Profit / |
5.754 | 13.384 | 19.138 | 11.623 | 17.972 | 29.595 | |
| Finance Profit / |
(37.769) | 516 | (37.253) | (31.656) | (3.060) | (34.716) | |
| restructing losses & fire & non recurring costs |
(32.015) | 13.900 | (18.115) | (20.033) | 14.912 | (5.121) | |
| Gains / activities Fire Costs Non recurring costs |
- - (16.757) |
- - - |
- - (16.757) |
(36.000) (59) - |
- - - |
(36.000) (59) - |
|
| Profit / |
(48.772) | 13.900 | (34.872) | (56.092) | 14.912 | (41.180) | |
| Income tax expense | (14.092) | (9.351) | (23.443) | (3.899) | (7.049) | (10.948) | |
| Profit / |
(62.864) | 4.549 | (58.315) | (59.991) | 7.863 | (52.128) | |
| Profit / attributable to the shareholders of the company |
(62.830) | 744 | (62.086) | (60.244) | 3.742 | (56.502) | |
| Depreciation | 15.380 | 18.286 | 33.666 | 17.632 | 15.738 | 33.370 | |
| Earnings / tax, depreciation, amortization, restructing losses & fire costs (EBITDA) |
21.134 | 31.670 | 52.804 | 29.255 | 33.710 | 62.965 | |
| Impairment of trade debtors | 1.414 | 93 | 1.507 | 1.040 - |
(201) | 839 | |
| Impairment of inventory (Note 29) | 15.867 | 667 | 16.534 | 953 | (26) | 927 |
| There are no sales between the two segments. | Y-o-Y % | ||
|---|---|---|---|
| 31.12.2015 vs 31.12.2014 | |||
| ICM | Glass | Total | |
| Net sales revenue | -6,8% | -6,9% | -6,8% |
| Operating Profit / |
-50,5% | -25,5% | -35,3% |
| Earnings / |
-27,8% | -6,1% | -16,1% |
restructing losses & fire costs (EBITDA)
Notes to the Financial
| Year ended | Year ended | |||||
|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | |||||
| ICM | Glass | Total | ICM | Glass | Total | |
| Total assets | 310.598 | 214.109 | 524.707 | 357.949 | 191.458 | 549.407 |
| Total liabilities | 396.518 | 128.613 | 525.131 | 390.629 | 91.803 | 482.432 |
| Capital expenditure | 13.644 | 22.893 | 36.537 | 12.472 | 16.212 | 28.684 |
| Note 6&7 |
Segment liabilities are measured in the same way as in the financial statements.
These liabilities are allocated based on the operations of the segment.
The group's borrowings and derivative financial instruments are not considered to be segment liabilities and they are managed by the treasury function.
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| Year ended | ||||||
| 31.12.2015 | 31.12.2014 | 31.12.2013 | 31.12.2012 | |||
| Total Sales | ||||||
| East Europe | 113.759 | 137.071 | 154.864 | 155.293 | ||
| West Europe | 59.063 | 63.191 | 58.339 | 75.668 | ||
| Africa / Middle East | 189.798 | 197.838 | 177.502 | 216.284 | ||
| Asia/Oceania | 77.361 | 77.102 | 109.440 | 114.658 | ||
| America | 13.900 | 11.844 | 22.363 | 19.347 | ||
| Consolidated | 453.881 | 487.046 | 522.508 | 581.250 | ||
| ICM Operations | ||||||
| East Europe | 113.759 | 137.071 | 154.864 | 155.077 | ||
| West Europe | 56.801 | 60.760 | 56.063 | 75.183 | ||
| Africa / Middle East | 68.446 | 65.799 | 70.414 | 102.669 | ||
| Asia/Oceania | 63.737 | 64.437 | 94.722 | 106.566 | ||
| America | 13.889 | 11.568 | 22.363 | 19.347 | ||
| Total | 316.632 | 339.635 | 398.426 | 458.842 | ||
| Glass Operations | ||||||
| East Europe | - | - | - | 216 | ||
| West Europe | 2.262 | 2.431 | 2.276 | 485 | ||
| Africa / Middle East | 121.352 | 132.039 | 107.088 | 113.615 | ||
| Asia/Oceania | 13.624 | 12.665 | 14.718 | 8.092 | ||
| America | 11 | 276 | - | - | ||
| Total | 137.249 | 147.411 | 124.082 | 122.408 |
We derive a significant amount of our revenues from a small number of large multinational customers each year. In the year ended December 31, 2015, our five largest customers accounted for approximately 52% of our net sales revenue in the ICM Operations and approximately 64% of our net sales revenue in the Glass Operations. In 2014, our five largest customers accounted for approximately 51% and 74% of our net sales revenue in our ICM Operations and Glass Operations, respectively.
| Consolidated | ||||
|---|---|---|---|---|
| Capital expenditure per geographical area | Year ended | |||
| ICM Operations | 31.12.2015 31.12.2014 |
|||
| East Europe | 5.254 | 5.137 | ||
| West Europe | 3.365 | 4.505 | ||
| Africa / Middle East | 982 | 333 | ||
| Asia/Oceania | 4.033 | 2.384 | ||
| America | 10 | 113 | ||
| Total | 13.644 | 12.472 | ||
| Glass Operations | ||||
| Africa / Middle East | 22.893 | 16.212 | ||
| Total | 22.893 | 16.212 |
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Opening balance at 01.01.2015 | 9.998 | 88.844 | 327.541 | 6.737 | 12.937 | 446.057 |
| Additions | - | 1.196 | 25.281 | 874 | 811 | 28.162 |
| Construction in progress & advances | - | 2.023 | 2.075 | - | 193 | 4.291 |
| Disposals | - | (23) | (13.644) | (369) | (266) | (14.302) |
| Transfer to / from & reclassification | - | 409 | (414) | - | 5 | - |
| Exchange differences | (104) | 1.734 | 2.888 | (184) | 49 | 4.383 |
| Closing balance at 31.12.2015 | 9.894 | 94.183 | 343.727 | 7.058 | 13.729 | 468.591 |
| Accumulated Depreciation | ||||||
| Opening balance at 01.01.2015 | - | 35.115 | 193.618 | 4.954 | 10.843 | 244.530 |
| Additions | - | 3.330 | 24.468 | 672 | 773 | 29.243 |
| Disposals | - | (23) | (13.361) | (345) | (257) | (13.986) |
| Transfer to / from & reclassification | - | 191 | (191) | - | - | - |
| Exchange differences | - | 595 | 818 | (131) | 36 | 1.318 |
| Closing balance at 31.12.2015 | - | 39.208 | 205.352 | 5.150 | 11.395 | 261.105 |
| Net book value at 31.12.2015 | 9.894 | 54.975 | 138.375 | 1.908 | 2.334 | 207.486 |
Construction in progress is always capitalised until the end of the forthcoming year. The amount of € 8,077 th. as at 31.12.2014 has been transferred to assets and the current year's contruction in progress equal to € 4,291 th. is expected to be capitalized until 31.12.2016.
| Consolidated | ||||||||
|---|---|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |||
| Cost | ||||||||
| Opening balance at 01.01.2014 | 9.668 | 90.095 | 327.723 | 6.005 | 14.222 | 447.713 | ||
| Additions | 1.014 | 866 | 11.845 | 784 | 765 | 15.274 | ||
| Construction in progress & advances | - | 23 | 7.986 | - | 68 | 8.077 | ||
| Disposals | (1.125) | (1.567) | (27.837) | (399) | (1.922) | (32.850) | ||
| Transfer to / from & reclassification | - | 276 | (362) | 89 | (3) | - | ||
| Impairment charge due to fire | - | (861) | (788) | - | (26) | (1.675) | ||
| Impairment charge arising on | ||||||||
| restructuring | - | (4.200) | (4.000) | - | - | (8.200) | ||
| Exchange differences | 441 | 4.212 | 12.974 | 258 | (167) | 17.718 | ||
| Closing balance as at 31.12.2014 | 9.998 | 88.844 | 327.541 | 6.737 | 12.937 | 446.057 | ||
| Accumulated Depreciation | ||||||||
| Opening balance at 01.01.2014 | - | 31.584 | 194.561 | 4.593 | 11.698 | 242.436 | ||
| Additions | - | 2.486 | 23.783 | 556 | 757 | 27.582 | ||
| Disposals | - | (458) | (27.469) | (365) | (1.525) | (29.817) | ||
| Transfer to / from & reclassification | - | 124 | (124) | - | - | - | ||
| Impairment charge due to fire | - | (73) | (447) | - | (21) | (541) | ||
| Exchange differences | - | 1.452 | 3.314 | 170 | (66) | 4.870 | ||
| Closing balance as at 31.12.2014 | - | 35.115 | 193.618 | 4.954 | 10.843 | 244.530 | ||
| Net book value at 31.12.2014 | 9.998 | 53.729 | 133.923 | 1.783 | 2.094 | 201.527 |
There are no pledged assets for the Group as at 31.12.2015 and 31.12.2014.
The Impairment charge arising on restructuring as at 31.12.2014 is related to the subsiadiary Frigoglass Turkey Soğutma Sanayi İç ve Dış Ticaret Anonim Şirketi in Istanbul, Turkey (Note 29).
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Opening balance at 01.01.2015 | 303 | 8.992 | 16.504 | 297 | 2.468 | 28.564 |
| Additions | - | - | 240 | - | 128 | 368 |
| Construction in progress & advances | - | 33 | - | - | - | 33 |
| Disposals | - | (43) | (2.639) | (37) | (5) | (2.724) |
| Transfer to / from & reclassification | - | 34 | (34) | - | - | - |
| Closing balance at 31.12.2015 | 303 | 9.016 | 14.071 | 260 | 2.591 | 26.241 |
| Accumulated Depreciation | ||||||
| Opening balance at 01.01.2015 | - | 4.388 | 14.896 | 274 | 2.269 | 21.827 |
| Additions | - | 402 | 283 | 8 | 86 | 779 |
| Disposals | - | (22) | (2.507) | (37) | (3) | (2.569) |
| Closing balance at 31.12.2015 | - | 4.768 | 12.672 | 245 | 2.352 | 20.037 |
| Net book value at 31.12.2015 | 303 | 4.248 | 1.399 | 15 | 239 | 6.204 |
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Opening balance at 01.01.2014 | 303 | 8.988 | 15.860 | 289 | 2.348 | 27.788 |
| Additions | - | 4 | 253 | 8 | 120 | 385 |
| Construction in progress & advances | - | - | 880 | - | - | 880 |
| Disposals | - | - | (489) | - | - | (489) |
| Closing balance as at 31.12.2014 | 303 | 8.992 | 16.504 | 297 | 2.468 | 28.564 |
| Accumulated Depreciation | ||||||
| Opening balance at 01.01.2014 | - | 3.976 | 14.969 | 262 | 2.178 | 21.385 |
| Additions | - | 412 | 259 | 12 | 91 | 774 |
| Disposals | - | - | (332) | - | - | (332) |
| Closing balance as at 31.12.2014 | - | 4.388 | 14.896 | 274 | 2.269 | 21.827 |
| Net book value at 31.12.2014 | 303 | 4.604 | 1.608 | 23 | 199 | 6.737 |
There are no pledged assets for the Parent Company as at 31.12.2015 and 31.12.2014.
The Parent Company has proceeded to test for impairment its manufacturing operations in Hellas as at 31.12.2015. The recoverable amount of this operation is determined by calculating its value in use that is based on cash flow projections derived from the operation's financial budgets that have been approved by management and which cover a five year forecast period.
Following the completion of the value in use calculation, the Parent Company's management concluded that no impairment is necessary as at 31 December 2015.
| Consolidated | |||||
|---|---|---|---|---|---|
| Goodwill | Development costs |
Patterns & trade marks |
Software & other intangible assets |
Total | |
| Cost | |||||
| Opening balance at 01.01.2015 | 1.514 | 27.393 | 226 | 23.615 | 52.748 |
| Additions | - | 840 | - | 1.543 | 2.383 |
| Construction in progress & advances | - | 1.697 | - | 4 | 1.701 |
| Exchange differences | - | 145 | (10) | 148 | 283 |
| Closing balance at 31.12.2015 | 1.514 | 30.075 | 216 | 25.310 | 57.115 |
| Accumulated Depreciation | |||||
| Opening balance at 01.01.2015 | - | 18.492 | 165 | 14.939 | 33.596 |
| Additions | - | 2.153 | 33 | 2.679 | 4.865 |
| Exchange differences | - | 68 | (8) | 99 | 159 |
| Closing balance at 31.12.2015 | - | 20.713 | 190 | 17.717 | 38.620 |
| Net book value at 31.12.2015 | 1.514 | 9.362 | 26 | 7.593 | 18.495 |
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. At each balance sheet date the Group performs an analysis to assess whether the carrying amount of goodwill is recoverable. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is performed on the cashgenerating units that are expected to benefit from the acquisition from which goodwill was derived.
The existing goodwill € 1,514 th., which resulted from the business combination of Frigoglass Jebel Ali FZCO (Dubai), has been allocated to cash generating units related to the Group's operations in Dubai for the respective subsidiary.
The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations are based on cash flow projections, prepared as at 31 December 2015, which require the use of estimates approved by Management and covering a five year period.
The key assumptions used for the Value-in-use calculation are as follows: Discount rate (pre-tax): 11.2 %, Gross margins: 2.5%-4% , Perpetuity growth rate: 2%
As at 31 December 2015, if any of the assumptions used were 10% lower or higher, the Group would not need to reduce the carrying value of goodwill.
Additions, constructions in progress of Software and advances of other intangible assets during 2014 specifically concern the execution of the strategic priority projects which are inventory management, product optimization project and lean manufacturing project.
Construction in progress is always capitalised until the end of the forthcoming year. The amount of € 2,046 th. as at 31.12.2014 has been transferred to assets and the current year's contruction in progress equal to € 1,701 th. is expected to be capitalized until 31.12.2016.
| Consolidated | |||||
|---|---|---|---|---|---|
| Goodwill | Development costs |
Patterns & trade marks |
Software & other intangible assets |
Total | |
| Cost | |||||
| Opening balance at 01.01.2014 | 17.941 | 27.498 | 9.309 | 21.309 | 76.057 |
| Additions | - | 1.100 | - | 2.187 | 3.287 |
| Construction in progress & advances | - | 1.532 | - | 514 | 2.046 |
| Disposals | - | - | - | (679) | (679) |
| Impairment charge arising on restructuring | (16.427) | (3.120) | (9.070) | - | (28.617) |
| Exchange differences | - | 383 | (13) | 284 | 654 |
| Closing balance as at 31.12.2014 | 1.514 | 27.393 | 226 | 23.615 | 52.748 |
| Accumulated Depreciation | |||||
| Opening balance at 01.01.2014 | - | 19.094 | 3.766 | 13.435 | 36.295 |
| Additions | - | 2.442 | 640 | 1.994 | 5.076 |
| Disposals | - | - | (633) | (633) | |
| Impairment charge arising on restructuring | - | (3.120) | (4.233) | - | (7.353) |
| Exchange differences | - | 76 | (8) | 143 | 211 |
| Closing balance as at 31.12.2014 | - | 18.492 | 165 | 14.939 | 33.596 |
| Net book value at 31.12.2014 | 1.514 | 8.901 | 61 | 8.676 | 19.152 |
The impairment charge as at 31.12.2014 is related to the plant discontinuation of Frigoglass Turkey Soğutma Sanayi İç ve Dış Ticaret Anonim Şirketi in Istanbul, Turkey (Note 29).
| Parent Company | |||||
|---|---|---|---|---|---|
| Development costs |
Patterns & trade marks |
Software & other intangible assets |
Total | ||
| Cost | |||||
| Opening balance at 01.01.2015 | 16.896 | 35 | 15.230 | 32.161 | |
| Additions | 222 | - | 808 | 1.030 | |
| Construction in progress & advances | 1.755 | - | 2 | 1.757 | |
| Closing balance at 31.12.2015 | 18.873 | 35 | 16.040 | 34.948 | |
| Accumulated Depreciation | |||||
| Opening balance at 01.01.2015 | 12.846 | 35 | 10.201 | 23.082 | |
| Additions | 1.147 | - | 1.425 | 2.572 | |
| Closing balance at 31.12.2015 | 13.993 | 35 | 11.626 | 25.654 | |
| Net book value at 31.12.2015 | 4.880 | - | 4.414 | 9.294 |
Construction in progress and advances is always capitalised until the end of the forthcoming year. The amount of € 1,375 th. as at 31.12.2014 has been transferred to assets and the current year's contruction in progress ant the current advances in construction equal to € 1,757 th. is expected to be capitalized until 31.12.2016.
Additions, constructions in progress and advances of other intangible assets during 2014 specifically concern the execution of the strategic priority projects which are inventory management, product optimization project and lean manufacturing project.
| Parent Company | ||||
|---|---|---|---|---|
| Development costs |
Patterns & trade marks |
Software & other intangible assets |
Total | |
| Cost | ||||
| Opening balance at 01.01.2014 | 15.521 | 35 | 13.284 | 28.840 |
| Additions | - | - | 1.946 | 1.946 |
| Construction in progress & advances | 1.375 | - | - | 1.375 |
| Closing balance as at 31.12.2014 | 16.896 | 35 | 15.230 | 32.161 |
| Accumulated Depreciation | ||||
| Opening balance at 01.01.2014 | 11.841 | 35 | 8.969 | 20.845 |
| Additions | 1.005 | - | 1.232 | 2.237 |
| Closing balance as at 31.12.2014 | 12.846 | 35 | 10.201 | 23.082 |
| Net book value at 31.12.2014 | 4.050 | - | 5.029 | 9.079 |
| Consolidated | Parent Company | ||
|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| 64.880 | 64.344 | 4.091 | 3.448 |
| 2.102 | 2.479 | 222 | 206 |
| 50.657 | 37.185 | 757 | 1.739 |
| (20.413) | (5.472) | (2.757) | (804) |
| 97.226 | 98.536 | 2.313 | 4.589 |
| Analysis of Provisions : | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Opening Balance at 01/01 | 5.472 | 10.735 | 804 | 792 |
| Additions during the year | 2.143 | 1.472 | 210 | 200 |
| Product Rationalization Costs (Note 29) | 14.110 | - | 2.064 | - |
| Unused amounts reversed | (317) | (850) | - | - |
| Total Charges to the Income Statement | 15.936 | 622 | 2.274 | 200 |
| Realised during the year | (1.275) | (6.210) | (321) | (188) |
| Transfer to / from & reclassification | 459 | - | - | - |
| Exchange differences | (179) | 325 | - | - |
| Closing Balance at 31/12 | 20.413 | 5.472 | 2.757 | 804 |
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Trade receivables | 102.590 | 114.832 | 11.260 | 11.569 | |
| Less: Provisions ( Note 35 ) | (3.552) | (2.108) | (1.781) | (1.215) | |
| 99.038 | 112.724 | 9.479 | 10.354 |
The fair value of trade debtors closely approximates their carrying value. The Group and the Company have a significant concentration of credit risk with specific customers which comprise large international groups like Coca - Cola HBC, other Coca - Cola bottlers, Diageo - Guinness, Heineken , Efes Group.
The Group does not require its customers to provide any pledges or collaterals given the high calibre and international reputation of its customer portfolio.
Management does not expect any losses from non performance of trade receivables, other than provides for as at 31.12.2015.
| Analysis of provisions for trade receivables: | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Opening balance at 01/01 | 2.108 | 1.335 | 1.215 | 278 |
| Additions during the year | 1.495 | 1.097 | 924 | 937 |
| Unused amounts reversed | (7) | (272) | - | - |
| Total charges to income statement | 1.488 | 825 | 924 | 937 |
| Realized during the year | (53) | (82) | (358) | - |
| Exchange differences | 9 | 30 | - | - |
| Closing Balance | 3.552 | 2.108 | 1.781 | 1.215 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| V.A.T receivable | 9.857 | 8.887 | 280 | 971 |
| Grants for exports receivable | 11.222 | 10.335 | - | - |
| Insurance claims | 1.781 | 4.574 | 164 | 714 |
| Prepaid expenses | 1.927 | 1.528 | 178 | 164 |
| Other taxes receivable | 3.459 | 2.793 | - | - |
| Advances to employees | 956 | 798 | 51 | 31 |
| Other receivables | 5.707 | 2.444 | 264 | 98 |
| Total | 34.909 | 31.359 | 937 | 1.978 |
Grants for Exports are granted by the Nigerian Government on exports of goods produced in the country and are recognized at fair value. Management does not expect any losses from the non recoverability of these grants.
The V.A.T receivable is fully recoverable through the operating activity of the Group and the Company.
Other receivables comprise various prepayments, government grants and accrued income not invoiced.
The fair value of other receivables closely approximates their carrying value.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Cash on hand | 60 | 68 | 3 | 2 |
| Short term bank deposits | 57.432 | 68.664 | 4.561 | 4.044 |
| Total | 57.492 | 68.732 | 4.564 | 4.046 |
Short term bank deposits equal to € 29.5 m at banks in Nigeria in foreign currency Naira are subject to capital controls. The effective interest rate on short term bank deposits for December 2015 is 0.27% (December 2014: 2.28% )
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Taxes and duties payable | 3.967 | 4.080 | 459 | 476 |
| VAT payable | 257 | 2.176 | - | - |
| Social security insurance | 1.052 | 1.239 | 487 | 508 |
| Dividends payable to company' s shareholders | 3 | 3 | 3 | 3 |
| Customers' advances | 1.168 | 1.637 | 26 | 20 |
| Other taxes payable | 1.345 | 1.053 | - | - |
| Accrued discounts on sales | 5.966 | 3.553 | 355 | 376 |
| Accrued fees & costs payable to third parties | 5.850 | 7.184 | 639 | 925 |
| Accrued payroll expenses | 4.272 | 4.339 | 419 | 1.578 |
| Other accrued expenses | 4.235 | 6.202 | 49 | 55 |
| Expenses for restructuring activities | 1.662 | 4.857 | - | - |
| Accrual for warranty expenses | 1.709 | 1.926 | 10 | 12 |
| Other payables | 5.632 | 6.556 | 233 | 1.813 |
| Total | 37.118 | 44.805 | 2.680 | 5.766 |
The fair value of other creditors closely approximates their carrying value.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Bank loans | 12 | 534 | - | - |
| Intergroup Bond Loan | - | - | 76.650 | 71.100 |
| Bond Loan | - | 244.693 | - | - |
| Total non current borrowings | 12 | 245.227 | 76.650 | 71.100 |
| Consolidated | Parent Company | |||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Bank overdrafts | 2.709 | 6.880 | - | - |
| Bank loans | 112.682 | 49.092 | - | - |
| Intergroup Bond Loan | - | - | 6.134 | 1.075 |
| Bond Loan | 246.095 | |||
| Finance Lease liabilities | 516 | 1.866 | - | - |
Total current borrowings 362.002 57.838 1.075 6.134
Total borrowings 362.014 303.065 82.784 72.175
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Between 1 & 2 years | 12 | 534 | - | - |
| Between 2 & 5 years | - | 244.693 | 76.650 | 71.100 |
| Over 5 years | - | - | - | - |
| Total | 12 | 245.227 | 76.650 | 71.100 |
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
|---|---|---|---|
| 8,98% | 8,98% | 9,13% | 9,13% |
| 8,98% | 8,92% | - | - |
| 8,19% | 5,59% | - | - |
| 5,88% | 5,41% | - | - |
| Total borrowings | 362.014 | 303.065 | 82.784 | 72.175 |
|---|---|---|---|---|
| Cash & cash equivalents | (57.492) | (68.732) | (4.564) | (4.046) |
| Net debt (A) |
304.522 | 234.333 | 78.220 | 68.129 |
| Total equity (B) | (424) | 66.975 | 12.650 | 28.120 |
| Total capital (C) = (A) + (B) | 304.098 | 301.308 | 90.870 | 96.249 |
| Net debt / Total capital (A) / (C) | 100,1% | 77,8% | 86,1% | 70,8% |
| Consolidated | Parent Company | ||
|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Consolidated | Parent Company | ||
|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
The foreign Currency exposure of borrowings is as follows:
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | |||||
| Current borrowings |
Non current borrowings |
Total | Current borrowings |
Non current borrowings |
Total | |
| - EURO | 331.153 | - | 331.153 | 34.849 | 245.209 | 280.058 |
| - USD | 25.076 | - | 25.076 | 15.403 | - | 15.403 |
| - AED | 44 | 12 | 56 | 3.882 | 18 | 3.900 |
| - CNY | - | - | - | 3.238 | - | 3.238 |
| - INR | 2.709 | - | 2.709 | - | - | - |
| - NAIRA | 2.907 | - | 2.907 | - | - | - |
| - RON | 113 | - | 113 | 466 | - | 466 |
| Total | 362.002 | 12 | 362.014 | 57.838 | 245.227 | 303.065 |
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | |||||
| Current borrowings |
Non current borrowings |
Total | Current borrowings |
Non current borrowings |
Total | |
| - EURO | 6.134 | 76.650 | 82.784 | 1.075 | 71.100 | 72.175 |
| Total | 6.134 | 76.650 | 82.784 | 1.075 | 71.100 | 72.175 |
The Group's principal sources of liquidity are cash flow generated from operating activities, local overdraft facilities, short- and long-term local bank borrowing facilities, Notes, two bilateral revolving credit facilities and other forms of indebtedness.
In May 2013, the Company announced that its subsidiary Frigoglass Finance B.V. issued € 250,000,000 Senior Notes due on May 15, 2018 (the "Notes"), at a fixed coupon of 8.25% per annum and at an issue price of 100%. The issue was finalized on May 20, 2013. The proceeds from the issue were used to refinance existing Group facilities and pay the fees and expenses related to the offering and sale of the Notes.
In addition, Frigoglass Finance B.V. has signed two bilateral credit revolving facilities of a total amount of €50 million with a three year maturity.
Both the Notes and the credit revolving facilities are fully and unconditionally guaranteed on a senior unsecured basis by Frigoglass S.A.I.C., Frigoinvest Holdings B.V. (the direct parent company of the Issuer) and by the following subsidiaries of Frigoinvest Holdings B.V.: Beta Glass Plc, Frigoglass Eurasia LLC, PT Frigoglass Indonesia, Frigoglass Industries (Nigeria) Ltd, Frigoglass Jebel Ali FZCO, Frigoglass North America Ltd. Co., Frigoglass Turkey Soğutma Sanayi İç ve Dıs Ticaret A.Ş., Frigoglass South Africa Ltd and Frigoglass Romania SRL.
The fair value of current and non-current borrowings closely approximates their carrying value.
With the exception of the Notes, the Group borrows at floating interest rates, which are renegotiated in periods shorter than six months. With regards to the Notes, despite the fact that were issued at a fixed annual coupon of 8.25%, at the balance sheet date their market return is close to the the fixed annual interest coupon.
There are no pledged assets for the Group as at 31.12.2015 and 31.12.2014. There are no pledged assets for the Parent Company as at 31.12.2015 and 31.12.2014.
The Notes are subject to restrictive covenants while for the revolving credit facilities, the Group is required to comply with financial covenants relating to its solvency, profitability and liquidity as described below:
At the year end date the Group was in breach of its financial covenants in relation to its revolving credit facilities.
After the year end date the banks have given their written consent (waiver) to suspend the application of financial covenants in relation to revolving credit facilities of the Group until March 31, 2017, provided that the Group will obtain sufficient cash flows from operating activities and additional funding from its main shareholders (Note 2.1).
In accordance with IFRS the Notes were classified as current liabilities on the assumption that the debt under the RCFs could have technically been accelerated by the lenders and therefore trigger an event of default under the Notes due to the fact that the waivers obtained as at the balance sheet date did not originally cover a period of 12 months after the year end. However, the breaches of covenants under the RCFs have been consecutively waived by the lenders under the RCFs for all the relevant periods and therefore no such default, cross default or cross acceleration has actually occurred under the Notes as a result of such breaches. For the purposes of compliance with IFRS the Notes have been classified within current liabilities, despite the agreement to extend and amend the RCFs until 31 March 2017
(as discussed above).
| Parent Company | ||
|---|---|---|
| 31.12.2015 | 31.12.2014 | |
| Net book value |
Net book value |
|
| Frigoinvest Holdings B.V (The Netherlands) | 58.045 | 58.045 |
| 58.045 | 58.045 |
In its separate financial statements, the Parent Company accounts for investments in subsidiaries at historic cost less any impairment losses.
The Group performed impairment test for its investments in subsidiaries and no impairment loss identified.
The subsidiaries of the Group, the country of incorporation and their shareholding status as at 31.12.2015 are described below:
| Country of | Consolidation | % | |
|---|---|---|---|
| Company name & business segment | incorporation | method | Shareholding |
| ICM Operations | |||
| Frigoglass S.A.I.C. | Hellas | Parent Company | |
| SC. Frigoglass Romania SRL | Romania | Full | 100% |
| PT Frigoglass Indonesia | Indonesia | Full | 99,98% |
| Frigoglass South Africa Ltd | South Africa | Full | 100% |
| Frigoglass Eurasia LLC | Russia | Full | 100% |
| Frigoglass (Guangzhou) Ice Cold | |||
| Equipment Co. ,Ltd. | China | Full | 100% |
| Scandinavian Appliances A.S | Norway | Full | 100% |
| Frigoglass Ltd. | Ireland | Full | 100% |
| Frigoglass Iberica SL | Spain | Full | 100% |
| Frigoglass Sp zo.o | Poland | Full | 100% |
| Frigoglass India PVT.Ltd. | India | Full | 100% |
| Frigoglass Turkey Soğutma Sanayi | |||
| İç ve Dış Ticaret Anonim Şirketi | Turkey | Full | 99,60% |
| Frigoglass North America Ltd. Co | USA | Full | 100% |
| Frigoglass Philippines Inc. | Philippines | Full | 100% |
| Frigoglass East Africa Ltd. | Kenya | Full | 100% |
| Frigoglass GmbH | Germany | Full | 100% |
| Frigoglass Nordic AS | Norway | Full | 100% |
| Frigoglass Industries (NIG) Ltd | Nigeria | Full | 76,03% |
| Frigoglass West Africa Ltd. | Nigeria | Full | 76,03% |
| Frigoglass Cyprus Limited | Cyprus | Full | 100% |
| Norcool Holding A.S | Norway | Full | 100% |
| Frigoinvest Holdings B.V | The Netherlands | Full | 100% |
| Frigoglass Finance B.V | The Netherlands | Full | 100% |
| Frigoglass MENA FZE | Dubai | Full | 100% |
| 3P Frigoglass Romania SRL | Romania | Full | 100% |
| Glass Operations | |||
| Frigoglass Global Limited | Cyprus | Full | 100% |
| Frigoglass Jebel Ali FZCO | Dubai | Full | 100% |
| Beta Glass Plc. | Nigeria | Full | 55,21% |
| Frigoglass Industries (NIG.) Ltd | Nigeria | Full | 76,03% |
All subsidiary undertakings are included in the consolidation. The Parent Company does not have any shareholdings in the preference shares of subsidiary undertakings included in the Group.
In May 2015 the Group acquired the remaining 20% of Frigoglass Jebel Ali FZE for the amount of € 3,724 million and as at 31.12.2015 owns 100% of the share capital of Frigoglass Jebel Ali FZE and reported a loss Euro 10,7 millions in equity.
Below are the financial summarised information of the Group's subsidiaries that non controlling interest have interest in:
| Frigoglass Industries ( Nigeria ) Ltd. | 2015 | 2014 |
|---|---|---|
| Total assets | 98.861 | 101.804 |
| Total liabilities | 50.707 | 56.803 |
| Total equity | 48.154 | 45.001 |
| Net sales revenue | 42.610 | 54.527 |
| Profit / |
5.528 | 6.299 |
| Non controlling interest - % | 23,97% | 23,97% |
| Profit / |
||
| minority interest | 1.325 | 1.510 |
| Dividends to non controlling interest | - | 88 |
| Net cash generated from investing activities | (462) | (3.679) |
| Net cash generated from operating activities | 4.108 | 5.331 |
| Net cash generated from financing activities | (13.314) | (10.942) |
| Beta Glass Plc. | 2015 | 2014 |
|---|---|---|
| Total assets | 169.591 | 145.267 |
| Total liabilities | 87.724 | 66.892 |
| Total equity | 81.867 | 78.375 |
| Net sales revenue | 74.766 | 80.079 |
| Profit / |
9.444 | 11.488 |
| Non controlling interest - % | 44,79% | 44,79% |
| Profit / |
||
| minority interest | 4.230 | 5.145 |
| Dividends to non controlling interest | 647 | 230 |
| Net cash generated from investing activities | (19.618) | (9.197) |
| Net cash generated from operating activities | 8.536 | 13.527 |
| Net cash generated from financing activities | 18.255 | (1.438) |
| Frigoglass Jebel Ali FZE | 2015 | 2014 |
|---|---|---|
| Total assets | 67.780 | |
| Total liabilities | 83.363 | |
| Total equity | (15.583) | |
| Net sales revenue | 37.612 | |
| Profit / |
(10.564) | |
| Non controlling interest - % | 20,00% | |
| Profit / |
(2.113) | |
| Dividends to non controlling interest | - | |
| Net cash generated from investing activities | (2.630) | |
| Net cash generated from operating activities | (2.361) | |
| Net cash generated from financing activities | 12.191 |
In May 2015 the Group acquired the remaining 20% of Frigoglass Jebel Ali FZE for the amount of € 3,724 million and as at 31.12.2015 owns 100% of the share capital of Frigoglass Jebel Ali FZE and reported a loss Euro 10,7 millions in equity.
The share capital of the company comprises of 50,593,832 fully paid up ordinary shares of € 0.30 each.
The share premium accounts represents the difference between the issue of shares (in cash) and their par value.
| Number of shares |
Share capital -000' Euro |
Share premium -000' Euro |
|
|---|---|---|---|
| Balance at 01.01.2014 | 50.593.832 | 15.178 | 2.755 |
| Balance at 31.12.2014 | 50.593.832 | 15.178 | 2.755 |
| Balance at 01.01.2015 | 50.593.832 | 15.178 | 2.755 |
| Balance at 31.12.2015 | 50.593.832 | 15.178 | 2.755 |
Dividends are recorded in the financial statements, as a liability, in the period in which they are approved by the Shareholders Meeting.
i) The Annual General Assembly of June 8, 2007 approved a share option plan with beneficiaries executive members of the Company's BoD, employees of the Company and employees of the Company's affiliates in replacement of the previous Phantom option plan.
According to the above General Assembly resolution, a maximum of 428,870 share options were approved, each corresponding to one (1) ordinary share of the Company.
ii) The Annual General Assembly of June 5, 2009 approved a share option plan with beneficiaries executive members of the Company's BoD, employees of the Company and employees of the Company's affiliates.
According to the above General Assembly resolution, a maximum of 500,000 share options were approved, each corresponding to one (1) ordinary share of the Company.
iii) The Annual General Assembly of May 14, 2010 approved a share option plan with beneficiaries executive members of the Company's BoD, employees of the Company and employees of the Company's affiliates.
According to the above General Assembly resolution, a maximum of 600,000 share options were approved, each corresponding to one (1) ordinary share of the Company.
iv) On 14.12.2011 Frigoglass Board of Directors resolved to adjust of the approved share options price for option holders pursuant to the Company's share option plan, following the decision of the Annual General Meeting at 31.05.2011 to modify the company's share capital.
According to the aforementioned decision, the Board of Directors also decided the increase of the stock option rights by 25%, in line with the bonus share issue of one new share for every four existing shares.
v) The Annual General Assembly of May 29, 2012 approved a share option plan with beneficiaries executive members of the Company's BoD, employees of the Company and employees of the Company's affiliates.
According to the above General Assembly resolution, a maximum of 600,000 share options were approved, each corresponding to one (1) ordinary share of the Company.
vi) The Annual General Assembly of May 27, 2014 approved a share option plan with beneficiaries executive members of the Company's BoD, employees of the Company and employees of the Company's affiliates.
According to the above General Assembly resolution, a maximum of 600,000 share options were approved, each corresponding to one (1) ordinary share of the Company.
| Program of options | Start of exercise period |
Expiry date |
Number of options issued |
Number of options exercised/ cancelled |
Number of outstanding options |
|---|---|---|---|---|---|
| Program approved by BoD on 02.08.2007 | |||||
| Exercise price at 13.15 Euro per share | 08.06.2007 | 17.12.2016 | 34.589 | 34.589 | - |
| Exercise price at 13.15 Euro per share | 01.01.2008 | 17.12.2016 | 34.589 | 24.875 | 9.714 |
| Exercise price at 13.15 Euro per share | 01.01.2009 | 17.12.2016 | 34.586 | 22.736 | 11.850 |
| Total | 103.764 | 82.200 | 21.564 | ||
| Program approved by BoD on 14.05.2008 | |||||
| Exercise price at 15.83 Euro per share | 14.05.2008 | 17.12.2017 | 33.083 | 18.750 | 14.333 |
| Exercise price at 15.83 Euro per share | 14.05.2009 | 17.12.2017 | 33.083 | 18.750 | 14.333 |
| Exercise price at 15.83 Euro per share | 14.05.2010 | 17.12.2017 | 33.088 | 18.753 | 14.335 |
| Σύνολο | 99.253 | 56.253 | 43.000 | ||
| Program approved by BoD on 19.06.2009 | |||||
| Exercise price at 3.07 Euro per share | 19.06.2009 | 31.12.2018 | 204.673 | 144.886 | 59.787 |
| Exercise price at 3.07 Euro per share | 01.01.2010 | 31.12.2018 | 204.673 | 144.907 | 59.765 |
| Exercise price at 3.07 Euro per share | 01.01.2011 | 31.12.2018 | 204.671 | 141.701 | 62.970 |
| Σύνολο | 614.016 | 431.495 | 182.522 | ||
| Program approved by BoD on 11.12.2009 | |||||
| Exercise price at 3.07 Euro per share | 11.12.2009 | 31.12.2018 | 3.541 | - | 3.541 |
| Exercise price at 3.07 Euro per share | 01.01.2010 | 31.12.2018 | 3.541 | - | 3.541 |
| Exercise price at 3.07 Euro per share | 01.01.2011 | 31.12.2018 | 3.543 | - | 3.543 |
| Σύνολο | 10.625 | - | 10.625 | ||
| Program approved by BoD on 17.11.2010 | |||||
| Exercise price at 5.54 Euro per share | 17.11.2010 | 31.12.2019 | 74.699 | 43.905 | 30.794 |
| Exercise price at 5.54 Euro per share | 01.01.2011 | 31.12.2019 | 74.729 | 38.961 | 35.768 |
| Exercise price at 5.54 Euro per share | 01.01.2012 | 31.12.2019 | 74.735 | 32.755 | 41.980 |
| Σύνολο | 224.163 | 115.620 | 108.543 | ||
| Program approved by BoD on 03.01.2011 | |||||
| Exercise price at 5.54 Euro per share | 03.01.2011 | 31.12.2020 | 80.326 | 44.143 | 36.184 |
| Exercise price at 5.54 Euro per share | 03.01.2012 | 31.12.2020 | 80.354 | 36.781 | 43.573 |
| Exercise price at 5.54 Euro per share | 03.01.2013 | 31.12.2020 | 80.364 | 36.784 | 43.580 |
| Σύνολο | 241.044 | 117.708 | 123.336 | ||
| Program approved by BoD on 15.06.2012 | |||||
| Exercise price at 3.55 Euro per share | 01.12.2013 | 31.12.2022 | 10.000 | - | 10.000 |
| Exercise price at 3.55 Euro per share | 01.12.2014 | 31.12.2022 | 10.000 | - | 10.000 |
| Exercise price at 3.55 Euro per share | 01.12.2015 | 31.12.2022 | 10.000 | - | 10.000 |
| Total | 30.000 | - | 30.000 |
| Program of options | Start of exercise period |
Expiry date |
Number of options issued |
Number of options exercised/ cancelled |
Number of outstanding options |
|---|---|---|---|---|---|
| Program approved by BoD on 10.12.2012 | |||||
| Exercise price at 5.54 Euro per share | 10.12.2012 | 31.12.2021 | 79.707 | 16.732 | 62.975 |
| Exercise price at 5.54 Euro per share | 01.01.2013 | 31.12.2021 | 79.720 | 16.736 | 62.984 |
| Exercise price at 5.54 Euro per share | 01.01.2014 | 31.12.2021 | 79.743 | 21.186 | 58.557 |
| Total | 239.170 | 54.654 | 184.516 | ||
| Program approved by BoD on 23.10.2013 | |||||
| Exercise price at 5.59 Euro per share | 01.12.2013 | 31.12.2022 | 90.503 | 2.500 | 88.003 |
| Exercise price at 5.59 Euro per share | 01.12.2014 | 31.12.2022 | 90.503 | 8.000 | 82.503 |
| Exercise price at 5.59 Euro per share | 01.12.2015 | 31.12.2022 | 90.494 | 8.000 | 82.494 |
| Total | 271.500 | 18.500 | 253.000 | ||
| Program approved by BoD on 27.06.2014 | |||||
| Exercise price at 3.79 Euro per share | 01.12.2014 | 31.12.2023 | 99.499 | - | 99.499 |
| Exercise price at 3.79 Euro per share | 01.12.2015 | 31.12.2023 | 99.499 | - | 99.499 |
| Exercise price at 3.79 Euro per share | 01.12.2016 | 31.12.2023 | 99.502 | - | 99.502 |
| Total | 298.500 | - | 298.500 | ||
| Program approved by BoD on 12.05.2015 | |||||
| Exercise price at 1.90 Euro per share | 01.12.2015 | 31.12.2024 | 99.998 | - | 99.998 |
| Exercise price at 1.90 Euro per share | 01.12.2016 | 31.12.2024 | 99.998 | - | 99.998 |
| Exercise price at 1.90 Euro per share | 01.12.2017 | 31.12.2024 | 100.004 | - | 100.004 |
| Total | 300.000 | - | 300.000 | ||
| Program approved by BoD on 04.11.2015 | |||||
| Exercise price at 2.21 Euro per share | 01.12.2015 | 31.12.2024 | 6.667 | - | 6.667 |
| Exercise price at 2.21 Euro per share | 01.12.2016 | 31.12.2024 | 6.667 | - | 6.667 |
| Exercise price at 2.21 Euro per share | 01.12.2017 | 31.12.2024 | 6.666 | - | 6.666 |
| Total | 20.000 | - | 20.000 | ||
| Grand Total | 2.452.034 | 876.429 | 1.575.605 |
On 5.11.2014 Frigoglass Board of Directors resolved to cancel 488.861 share options for personnel that are not employees of the company anymore.
The weighted average fair value of the new options granted during the year was determined using the Black-Scholes valuation model and amounted to Euro 0.11 per option.
| Program approved by BoD on: | 27.05.2015 | 04.11.2015 | ||
|---|---|---|---|---|
| The key assumptions used in the valuation | Weighted average share price | 1,90 € | 2,21 € | |
| model are the following: | Volatility | 13,97% | 13,88% | |
| Dividend yield | 0,0% | 0,0% | ||
| Discount rate | 0,73% | 0,11% |
| Consolidated | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Statutory reserves |
Share option reserve |
Extraordinary reserves |
Cash flow hedge reserve |
Tax free reserves |
Currency translation reserve |
Total | ||||
| Balance at 01.01.2014 | 4.177 | 1.104 | 9.389 | 19 | 6.833 | (14.805) | 6.717 | |||
| Additions for the year Expiration / Cancellation of |
- | - | - | (183) | - | - | (183) | |||
| share option reserve | - | (495) | - | - | - | - | (495) | |||
| Transfer from/ Net profit |
- | - | - | 125 | - | - | 125 | |||
| Transfer from/ |
||||||||||
| Retained Earnings Exchange differences |
- | - | (341) 176 |
- | - | 9.474 | (341) 9.650 |
|||
| Balance at 31.12.2014 | 4.177 | 609 | 9.224 | (39) | 6.833 | (5.331) | 15.473 |
| Balance at 01.01.2015 | 4.177 | 609 | 9.224 | (39) | 6.833 | (5.331) | 15.473 |
|---|---|---|---|---|---|---|---|
| Additions for the year | - | 58 | - | (190) | - | - | (132) |
| Transfer from/ Acquisition of subsiadiary's non |
- | - | - | 229 | - | - | 229 |
| controlling interest | - | - | - | - | - | (3.531) | (3.531) |
| Exchange differences | - | - | (319) | - | - | 1.280 | 961 |
| Balance at 31.12.2015 | 4.177 | 667 | 8.905 | - | 6.833 | (7.582) | 13.000 |
| Parent Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Statutory reserves |
Share option reserve |
Extraordina ry reserves |
Tax free reserves |
Total | ||||
| Balance at 01.01.2014 | 4.019 | 1.104 | 5.175 | 6.833 | 17.131 | |||
| Expiration / Cancellation of share option reserve |
- | (495) | - | - | (495) | |||
| Transfer from/ |
||||||||
| Retained Earnings | - | - | (341) | - | (341) | |||
| Balance at 31.12.2014 | 4.019 | 609 | 4.834 | 6.833 | 16.295 | |||
| Balance at 01.01.2015 | 4.019 | 609 | 4.834 | 6.833 | 16.295 | |||
| Additions for the period | - | 58 | - | - | 58 | |||
| Balance at 31.12.2015 | 4.019 | 667 | 4.834 | 6.833 | 16.353 |
A statutory reserve is created under the provisions of Hellenic law (Law 2190/20) according to which, an amount of at least 5% of the profit (after tax) for the year must be transferred to this reserve until it reaches one third of the paid up share capital. The statutory reserve can not be distributed to the shareholders of the Company except for the case of liquidation.
The share option reserve refers to a share option program with beneficiaries the Company's BoD executive members and employees and is analyzed in Note 15 of the financial statements.
The Company has created tax free reserves, taking advances off various Hellenic Taxation laws, during the years, in order to achieve tax deductions, either
a) by postponing the tax liability till the reserves are distributed to the shareholders, or
b) by eliminating any future income tax payment by issuing new shares for the shareholders of the company.
Should the reserves be distributed to the shareholders as dividends, the distributed profits will be taxed with the rate that will be in effect at the time of the profits distributions.
No provision has been created in regard to the possible income tax liability in the case of such a future distribution of the reserves the shareholders of the company as such liabilities are recognized simultaneously with the dividends distribution.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Interest expense | 28.731 | 26.281 | 6.979 | 5.492 |
| Interest income | (822) | (959) | (10) | (18) |
| Net interest expense / |
27.909 | 25.322 | 6.969 | 5.474 |
| Exchange loss / (gain) & | ||||
| Other Financial Costs | (4.604) | 457 | 78 | (1.034) |
| Loss / |
||||
| instruments | 13.948 | 8.937 | 1.004 | 1.113 |
| Net finance cost / |
37.253 | 34.716 | 8.051 | 5.553 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Corporate tax | 9.806 | 9.730 | 1.761 | 385 |
| Prior years Corporate tax | 1.701 | 684 | - | - |
| Write off οf Deferred Tax Assets of | ||||
| 31.12.2014 | 8.826 | - | 1.369 | - |
| Deferred tax | 3.110 | 534 | - | 206 |
| Total | 23.443 | 10.948 | 3.130 | 591 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Profit / |
(34.872) | (41.180) | (12.252) | (5.593) |
| Tax calculated at the nominal tax rates | (5.055) | (9.308) | (3.553) | (1.454) |
| Tax Effects of: | ||||
| Adjustment in respect of prior years | 1.701 | 684 | - | - |
| Income not subject to tax | (59) | (276) | (59) | - |
| Expenses not deductible for tax purposes | 1.736 | 1.594 | 1.026 | 394 |
| Tax losses for which no deferred income tax | ||||
| asset was recognized | 14.533 | 17.780 | 2.586 | 1.177 |
| Write off οf Deferred Tax Assets of | ||||
| 31.12.2014 | 8.826 | - | 1.369 | - |
| Other taxes | 1.761 | 474 | 1.761 | 474 |
| Tax Expense | 23.443 | 10.948 | 3.130 | 591 |
The Group writen off deferred tax assets of 31.12.2014 ( € 8,826 ) because the future taxable profits within the next years, most probably, will not be adequate to cover the current accumulated tax losses.
The Group did not recognize deferred tax assets for accumulated tax losses Euro 107 million.
The income tax rates in the countries where the Group operates are between 0% and 38.3%.
Some of non deductible expenses, tax losses for which no deferred income tax asset was recognised and, the different tax rates in the countries that the Group operates, create an effective tax rate for the Group. (Hellenic taxation rate is 29%)
For the financial years 2011 to 2014, all Hellenic Societe Anonyme and Limited Liability Companies that are required to prepare audited statutory financial statements must in addition obtain an "Annual Tax Certificate" as provided for by paragraph 5 of Article 82 of L.2238/1994 for the financial years 2011-2013 and the Article 65A of L.4174/2013 for the financial years 2014-2015. This "Annual Tax Certificate" must be issued by the same statutory auditor or audit firm that issues the audit opinion on the statutory financial statements.
Upon completion of the tax audit, the statutory auditor or audit firm must issue a "Tax Compliance Report" which will subsequently be submitted electronically to the Ministry of Finance.
The Parent Company has not been audited by tax authorities for the 2010 financial year.
For the Parent Company, the "Tax Compliance Report" for the financial years 2011 - 2014 has been issued with no substantial adjustments with respect to the tax expense and corresponding tax provision as reflected in the annual financial statements of 2011 - 2014.
For the 2015 financial year, the tax audit is being performed by the Company's independent auditors according to the requirements of Article 65A of Law 4174/2013. The Company's management does not expect that additional tax liabilities will arise, in excess of those disclosed in the financial statements, upon the completion of the tax audit. For the unaudited tax years, the possibility exists that additional taxes and penalties may arise at the time when the tax years are audited and finalized.
The tax returns of the Parent Company and the Group's subsidiaries have not been assessed by the tax authorities for different periods. ( see the table below)
Until the tax audit assessment for the companies described in the table above are finalized, the tax liability can not be reliably measured for those years. The Group provides additional tax in relation to the outcome of such tax assessments, to the extent that a liability is probable and estimable.
As from 2015, applicable in Greece new tax rates 29%. For the year 2014, the rate used for the calculation of corporate and deferred taxes was 26%.
Note: For some countries the tax audit is not obligated and is taken place under specific requirements.
| Company | Country | Unaudited tax years |
Line of Business |
|---|---|---|---|
| Frigoglass S.A.I.C. - Parent Company | Hellas | 2010 & 2015 | Ice Cold Merchandisers |
| SC. Frigoglass Romania SRL | Romania | 2010-2015 | Ice Cold Merchandisers |
| PT Frigoglass Indonesia | Indonesia | 2012-2015 | Ice Cold Merchandisers |
| Frigoglass South Africa Ltd | S. Africa | 2006-2015 | Ice Cold Merchandisers |
| Frigoglass Eurasia LLC | Russia | 2014-2015 | Ice Cold Merchandisers |
| Frigoglass (Guangzhou) Ice Cold Equipment Co. ,Ltd. |
China | 2015 | Ice Cold Merchandisers |
| Frigoglass Ltd. | Ireland | 2002-2015 | Sales Office |
| Frigoglass Iberica SL | Spain | 2004-2015 | Sales Office |
| Frigoglass Sp zo.o | Poland | 2011-2015 | Sales Office |
| Frigoglass India PVT.Ltd. | India | 2012-2015 | Ice Cold Merchandisers |
| Frigoglass Turkey Soğutma Sanayi İç ve Dış Ticaret Anonim Şirketi |
Turkey | 2011-2015 | Sales Office |
| Frigoglass North America Ltd. Co | USA | 2008-2015 | Sales Office |
| Frigoglass Philippines Inc. | Philippines | 2012-2015 | Sales Office |
| Frigoglass Jebel Ali FZE | Dubai | - | Glass Operation |
| Frigoglass MENA FZE | Dubai | - | Sales Office |
| Beta Glass Plc. | Nigeria | 2014-2015 | Glass Operation |
| Frigoglass Industries (NIG.) Ltd | Nigeria | 2014-2015 | Crowns, Plastics, ICMs |
| Frigoglass West Africa Limited | Nigeria | 2015 | Ice Cold Merchandisers |
| 3P Frigoglass Romania SRL | Romania | 2009-2015 | Plastics |
| Frigoglass East Africa Ltd. | Kenya | 2014-2015 | Sales Office |
| Frigoglass GmbΗ | Germany | 2011-2015 | Sales Office |
| Scandinavian Appliances A.S | Norway | 2015 | Sales Office |
| Frigoglass Nordic AS | Norway | 2015 | Sales Office |
| Norcool Holding A.S | Norway | 2015 | Holding Company |
| Frigoglass Cyprus Limited | Cyprus | 2011-2015 | Holding Company |
| Frigoglass Global Limited | Cyprus | 2015 | Holding Company |
| Frigoinvest Holdings B.V | Netherlands | 2008-2015 | Holding Company |
| Frigoglass Finance B.V | Netherlands | 2013-2015 | Financial Services |
The capital commitments contracted for but not yet incurred at the balance sheet date 31.12.2015 for the Group amounted to € 235 thousands (31.12.2014: € 177 thousands) mainly for purchases of machinery. There are no capital commitments for the Parent Company for the years ended 31.12.2015 and 31.12.2014.
The Group leases buildings and vehicles under operating leases. Total future lease payments under operating leases are as follows:
| Consolidated | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31.12.2015 | ||||||||
| Buildings | Vehicles | Total | Buildings | Vehicles | Total | |||
| Within 1 year | 1.200 | 569 | 1.769 | 656 | 1.095 | 1.751 | ||
| Between 1 to 5 years | 2.465 | 674 | 3.139 | 923 | 2.694 | 3.617 | ||
| Over 5 years | - | - | - | - | 1.909 | 1.909 | ||
| Total | 3.665 | 1.243 | 4.908 | 1.579 | 5.698 | 7.277 |
| Parent Company | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | |||||||
| Buildings | Vehicles | Total | Buildings | Vehicles | Total | |||
| Within 1 year | 266 | 371 | 637 | 307 | 405 | 712 | ||
| Between 1 to 5 years | 1.062 | 265 | 1.327 | 354 | 712 | 1.066 | ||
| Total | 1.328 | 636 | 1.964 | 661 | 1.117 | 1.778 |
Note 20 - Related party transactions (based on IAS 24 & Article 42e of L 2190/20)
Truad Verwaltungs A.G is the main shareholder of Frigoglass S.A.I.C with a 44,41% shareholding. Truad Verwaltungs A.G. has also a 23.2% stake in Coca-Cola HBC AG share capital.
The Coca-Cola HBC AG is a non alcoholic beverage company. Apart from the common share capital involvement of Truad Verwaltungs A.G. at 23.2% with Coca-Cola HBC AG, Frigoglass is the major shareholder in Frigoglass Industries Limited based on Nigeria, with shareholding of 76.03%, where Coca-Cola HBC AG also owns a 23.9% equity interest.
Based on a contract that has been renewed until 31.12.2018 the Coca-Cola HBC AG purchases ICM's from the Frigoglass Group at yearly negotiated prices.
Frigoglass Industries Nigeria is party to an agreement with A.G. Leventis Nigeria plc for the lease of office space in Lagos, Nigeria.
A.G. Leventis Nigeria plc is the holding company for the Leventis Group Companies and is controlled through Truad Verwaltungs AG. The lease agreement is renewed annually.
The investments in subsidiaries are reported to Note 14.
The related party transactions are in an arms length basis and are based on a global transfer pricing documentation
a) The amounts of related party transactions were:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Sales | 118.751 | 113.976 | 13.814 | 10.835 |
| Purchases | 735 | 413 | 489 | 175 |
| Receivables / |
19.750 | 19.151 | 1.554 | 2.095 |
b) The intercompany transactions and balances of the Parent company with the Group's subsidiaries were:
| Parent Company | |||
|---|---|---|---|
| 31.12.2015 | 31.12.2014 | ||
| Sales of goods | 4.347 | 4.114 | |
| Sales of services | 1.901 | 1.415 | |
| Purchases of goods / expenses | 11.456 | 11.849 | |
| Interest expense | 6.978 | 5.443 | |
| Receivables | 34.375 | 45.004 | |
| Payables | 19.368 | 27.512 | |
| Loans Payables (note 13) | 82.784 | 72.175 |
The above transactions are executed at arm's length.
c) Other operating income ( transactions of the Parent company with the Group's subsidiaries )
| Parent Company | ||
|---|---|---|
| 31.12.2015 | 31.12.2014 | |
| Income from subsidiaries: Management Fees & Royalties on Sales | 15.884 | 20.081 |
| Income from subsidiaries: Commission on sales | 913 | 20 |
| Other operating income from Third Parties | 1.652 | 910 |
| Total other operating income | 18.449 | 21.011 |
The majority portion of other operating income refers to management services charged to the Group's subsidiaries.
For 2014, other operating income of the Group and the Company includes an amount of € 3,357 th. and € 733 th. respectively, and is the insurance income that the Group and the Parent Company received for the business interruption of the operations in India due to the fire (Note 27).
d) The fees to members of the Board of Directors and Management compensation include wages, stock option, indemnities and other employee benefits and the amounts are:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Fees for Board of Directors | 170 | 170 | 170 | 170 |
| Management compensation | 3.281 | 2.926 | 2.664 | 2.411 |
Basic and Diluted earnings per share are calculated by dividing the profit attributable to shareholders, by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the company (treasury shares).
The diluted earnings per share are calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares: share options. For the share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issue of ordinary shares for no consideration. No adjustment is made to net profit (numerator).
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| in 000's Euro | Year ended | Year ended | ||
| (apart from per share earning and number of shares) | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Profit / |
||||
| of the Company | (62.086) | (56.502) | (15.382) | (6.184) |
| Weighted average number of ordinary shares for the | ||||
| purposes of basic earnings per share | 50.593.832 | 50.593.832 | 50.593.832 | 50.593.832 |
| Weighted average number of ordinary shares for the purpose | ||||
| of diluted earnings per share | 50.595.403 | 50.602.656 | 50.595.403 | 50.602.656 |
| Basic earnings / |
(1,2271) | (1,1168) | (0,3040) | (0,1222) |
| Diluted earnings / |
(1,2271) | (1,1166) | (0,3040) | (0,1222) |
The Parent company has contingent liabilities in respect of bank guarantees on behalf of its subsidiaries arising from the ordinary course of business as follows:
The Parent Company's bank guarantees on behalf of its subsidiaries were:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Guarantees | 485.380 | 502.422 | 90.571 | 110.222 |
As shown in Note 13 the issue of the Notes and the revolving credit facilities are fully and unconditionally guaranteed on a senior unsecured basis.
The parent company has given warranties for financial support of certain subsidiaries.
The tax returns for the Parent Company and for the Group subsidiaries have not been assessed by the tax authorities for different periods. (see Note 18). In addition the Group's subsidiaries receive additional claims from various tax authorities from time to time, which Management assesses and takes legal action as required. The management of the Group believes that no significant additional taxes other than those recognized in the financial statements will be assessed. Finally, the Group has significant litigations relating to compensation for land on which the factory of some subsidiaries is situated. Management believes that even if the subsidiaries pay those compensations requested, the relevant amounts will be capitalised.
There are no other pending litigations, legal proceedings, or claims which are likely to affect the financial statements or the operations of the Group and the Parent company.
| Consolidated | ||||||||
|---|---|---|---|---|---|---|---|---|
| Quarter | 2012 | 2013 | 2014 | 2015 | ||||
| Q1 | 159.117 | 27% | 140.619 | 27% | 124.247 | 26% | 120.004 | 26% |
| Q2 | 179.088 | 31% | 172.378 | 33% | 145.916 | 30% | 145.156 | 32% |
| Q3 | 100.689 | 17% | 82.674 | 16% | 89.367 | 18% | 98.808 | 22% |
| Q4 | 142.356 | 24% | 126.837 | 24% | 127.516 | 26% | 89.913 | 20% |
| Total Year | 581.250 | 100% | 522.508 | 100% | 487.046 | 100% | 453.881 | 100% |
As shown above the Group's operations exhibit seasonality and therefore interim period sales should not be used for forecasting annual sales. Consequently the level of the working capital required for certain months of the year may vary.
The Company announced on February 26, 2016 the termination of the agreement with GZI Mauritius Limited (" GZI ") signed on May 21, 2015 regarding the divestment of its Glass business. A condition precedent was not met as GZI did not secure the necessary level of debt financing for the acquisition. Amended offers made by GZI were declined as not reflecting the full value of the Glass business and therefore not being interest of Frigoglass and its stakeholders.
Following the termination of the aforementioned disposal of the Glass business, the Group continued discussions with its lenders with respect to the extension of the waivers referred to above as well as an extension of the term of the RCFs to 31 March 2017.
On 31 March 2016, prior to the extension of the existing waivers, the lenders under the RCFs entered into an agreement with the Issuer pursuant to which they agreed to extend the maturity of the RCFs up to 31 March 2017, to waiver all events of default and to make certain other amendments to the terms of the RCFs, subject to certain conditions being met (including the provision of the Term Loan Facility by the majority shareholder). In connection with the amendment and extension of the RCFs, Frigoglass has agreed to repay and cancel €5 million of indebtedness outstanding under each RCF and has agreed to an amortization schedule that provides for an additional €14 million of repayments consisting of a repayment and cancellation of €5 million under each RCF on 31 October 2016 and €2 million under each RCF on 31 December 2016.
In addition, on 31 March 2016, our major shareholder committed to provide the Group with a €30m term loan facility (the "Term Loan Facility"), on terms substantially similar to the RCFs. The Term Loan Facility to be provided under the terms of the commitment matures on March 31, 2017. This commitment is conditional upon receipt of the requisite shareholder approval at our AGM which will be convened on or about 22 April 2016.
There are no other post-balance events which are likely to affect the financial statements or the operations of the Group and the Parent company apart from the recent events involving Ukraine and Russia and the ones mentioned above.
The average number of personnel per operation for the Group & for the Parent company are listed below:
| Consolidated | ||
|---|---|---|
| Operations | 31.12.2015 | 31.12.2014 |
| ICM Operations | 3.689 | 3.815 |
| Glass Operations | 1.591 | 1.596 |
| Total | 5.280 | 5.411 |
| Parent Company | ||
| 31.12.2015 | 31.12.2014 | |
| Average number of personnel | 223 | 215 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Wages & Salaries | 64.238 | 64.135 | 10.452 | 11.252 |
| Social Contribution | 6.509 | 6.400 | 2.096 | 2.215 |
| Total Payroll (Note 31) | 70.747 | 70.535 | 12.548 | 13.467 |
| Pension plan (defined contribution) | 1.776 | 1.776 | 819 | 819 |
| Retirement Benefit (defined benefit) (Note 32) Provision for Stock Option Plan |
3.471 58 |
3.493 (495) |
319 58 |
351 (495) |
| Total | 76.052 | 75.309 | 13.744 | 14.142 |
| Consolidated | Parent Company | |||||||
|---|---|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |||||
| Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |
| Held for trading Forward foreign exchange contracts |
571 | 393 | 80 | 3.100 | 95 | - | 4 | 400 |
| Cash flow hedges | ||||||||
| Commodity forward contracts | - | - | - | 44 | - | - | - | - |
| Current portion of | ||||||||
| financial derivatives | ||||||||
| instruments | 571 | 393 | 80 | 3.144 | 95 | - | 4 | 400 |
Trading derivatives are classified as a current asset or liability. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months.
For 2015, there was no ineffective portion arising from cash flow hedges.
Gains and losses relating to the effective portion of the hedge are recognized in the hedging reserve in the Statement of Comprehensive Income. Subsequently these amounts are recognized in the income statement in the period or periods during which the hedged forecast transaction affects the income statement unless the gain or loss is included in the initial amount recognized for the purchase of inventory or fixed assets. These amounts are ultimately recognized in cost of goods sold in case of inventory or in depreciation in the case of fixed assets.
In terms of an amendment to IFRS 7, for 2015, the Company and the Group must disclose the basis of determining the fair value of financial instruments that are presented in the Balance Sheet. The only financial instruments at fair value presented in the balance sheet are the derivative financial instruments that are detailed in the tables above. These derivative financial instruments are measured in terms of the "Level 2" fair value hierarchy, that is described in IFRS 7. The "Level 2" fair value hierarchy refers to fair value measurements that are based on inputs that are directly or indirectly observed in an active market.
Αn internal audit of the Group's Cool operation subsidiary in South Africa has revealed an overstatement of earnings after tax in the financial years prior to 2013. This was the result of intentional misstatement at local senior management level, leading to the restatement of prior years' balance sheets with a cumulative effect on Frigoglass group's equity of €7.4 million as of 31 December 2014.
Frigoglass finance and internal audit teams are in the process of completing a comprehensive review of this issue, working closely with its external auditors and legal advisors. Previous management has been dismissed and a new senior management team has been appointed in the South African operations. Frigoglass has completed a review of its operations and has not identified any other inappropriate accounting practices.
The accounting records affected by the accounting misstatement relate to Receivables, Inventory and Trade Payables. The Group has completed its assessment for the 2014 and 2013 financial years and has confirmed that the misstatement is related to years prior to 2013.
The final audit report in South Africa until 31 December 2014 confirmed that the misstatement is related to the year 2012.
In order to rectify this intentional accounting misstatement, in accordance with International Financial Reporting Standards (IAS 8) and with reference to the years presented in these financial statements, the Group has restated its balance sheets for the years ended 31 December 2013 and 31 December 2012. The restatement has no impact on the income statement, basic and diluted earnings per share and the cash flow statements for the years ended 31 December 2013 and 31 December 2014 as the restatement relates to years prior to 2013.
The impact of the restatement on the affected balance sheet items is presented below:
| Consolidated | ||||
|---|---|---|---|---|
| Year ended 31.12.2012 | ||||
| Published | Restatement | Restated Balance | ||
| Deferred tax asset | 11.804 | 1.479 | 13.283 | |
| Inventory | 145.454 | (876) | 144.578 | |
| Trade receivables | 108.453 | (5.838) | 102.615 | |
| Other receivables (V.A.T.) | 27.487 | (1.122) | 26.365 | |
| Impact on total assets | (6.357) | |||
| Trade payables | 116.664 | 2.909 | 119.573 | |
| Impact on total liabilities | 2.909 | |||
| Retained earnings | 94.234 | (9.266) | 84.968 | |
| Other reserves (Currency translation reserve) | 14.903 | - | 14.903 | |
| Impact on total equity | (9.266) |
| Consolidated | ||||
|---|---|---|---|---|
| Year ended 31.12.2013 | ||||
| Published | Restatement | Restated Balance | ||
| Deferred tax asset | 7.756 | 1.134 | 8.890 | |
| Inventory | 118.736 | (673) | 118.063 | |
| Trade receivables | 121.584 | (4.478) | 117.106 | |
| Other receivables (V.A.T.) | 23.199 | (860) | 22.339 | |
| Impact on total assets | (4.877) | |||
| Trade payables | 92.543 | 2.231 | 94.774 | |
| Impact on total liabilities | 2.231 | |||
| Retained earnings | 63.721 | (9.266) | 54.455 | |
| Other reserves (Currency translation reserve) | 4.559 | 2.158 | 6.717 | |
| Impact on total equity | (7.108) | |||
| Analysis of cumulative impact on Equity | Consolidated |
|---|---|
| Year ended 31.12.2014 | |
| Impact on total equity - 31 December 2013 | (7.108) |
| Current year's currency translation impact | -269 |
| Impact on total equity | (7.377) |
The Company announced on February 26, 2016 the termination of the agreement with GZI Mauritius Limited (" GZI ") signed on May 21, 2015 regarding the divestment of its Glass business. A condition precedent was not met as GZI did not secure the necessary level of debt financing for the acquisition. Amended offers made by GZI were declined as not reflecting the full value of the Glass business and therefore not being interest of Frigoglass and its stakeholders.
Based on the previous status of the transaction, Management had concluded that the pronouncements of IFRS 5 were applicable for the condensed interim financial statements and the Glass operations had been presented as non-current asset held for sale for the period ended 30.06.2015 and 30.09.2015.
The Glass business continues to perform well and remains a valuable asset for Frigoglass, despite challenging trading conditions in Nigeria.
During 2015, the Glass business delivered on its business plan and successfully completed a furnace rebuild in Nigeria, enhancing its efficiency and capacity. The Dubai based glass business significantly improved its cost base and consequently, its operating margin.
Frigoglass is working with its key stakeholders and a team of highly reputable advisors to determine its next strategic steps, identify initiatives to preserve the value of the business for all stakeholders and achieve an optimal capital structure.
| Consolidated | |
|---|---|
| 31.12.2015 | |
| Product Rationalization Costs | (14.110) |
| (2.647) | |
| Non recurring costs | (16.757) |
Frigoglass continued to rationalise its product range in 2015, focusing on the production and sale of high quality goods, high cost efficiency and enhancing customer value.
The result of this process is the gradual phase out of old models and the launch of the new cooler generation, ICOOL. The Group and the Parent Company proceeded with the write-off of obsolete finished goods and related raw materials. As a result, the Group and the Parent Company incurred losses for rationalizing its product range.
For the Group and the Parent Company, these expenses comprise impairment of inventory amounting to € 14,1 mil. and € 2.1 mil. respectively, classified as provisions for slow moving and obsolete stock.
The Company announced on 22 May 2015 that it has entered into an agreement to sell its Glass operations, which comprise the glass operations of Beta Glass Plc. in Nigeria and Frigoglass Jebel Ali FZCO in Dubai as well as the complementary plastic crates and metal crowns operations of Frigoglass Industries (Nig.) Ltd in Nigeria, a discrete and separate operating segment of the Group.
The decision to dispose of these operations was taken at the Board of Directors meeting held on 20 May 2015.
The amount of € 2.6 million relates to third party fees for financial and legal services for the disposal of Glass Operations
The Company announced on February 26, 2016 the termination of the agreement with GZI Mauritius Limited (" GZI ") signed on May 21, 2015 regarding the divestment of its Glass business. A condition precedent was not met as GZI did not secure the necessary level of debt financing for the acquisition. Amended offers made by GZI were declined as not reflecting the full value of the Glass business and therefore not being interest of Frigoglass and its stakeholders.
Note 29 -
| Consolidated | |
|---|---|
| 31.12.2014 | |
| Fire Incident in India | |
| Fixed assets write off | (1.645) |
| Inventories write off | (5.867) |
| Expenses due to business interruption | (1.405) |
| less: insurance claims received | 8.858 |
| Fire Costs | (59) |
On April 9, 2014, Frigoglass announced a fire incident that occurred on April 6, at the Group's Ice-Cold Merchandiser manufacturing facility in the Gurgaon region of India. The fire has primarily caused damage to the facility's warehouses and to a lesser extent affected the production area.
The Group maintains insurance policies, with first class global insurance companies, which cover both Property Damage and Business Interruption.
Below is the analysis of the fire related costs. Frigoglass has received the bulk of the insurance claims related to Property Damage by July 4, 2014, while the final amount of compensation for the business interruption was received in July 2015.
Other operating income of the Group and the Company for 2014 includes an amount of € 3,357 th. and € 733 th. respectively, and is the insurance income that the Group and the Parent Company received for the business interruption of the operations in India due to the fire.
| Goodwill write off | (16.427) |
|---|---|
| Patterns & trade marks write off | (4.837) |
| Impairment of buildings and machinery | (8.200) |
| Impairment of inventories | (3.200) |
| Indemnities and other restructuring costs | (3.336) |
| (36.000) |
On July 18, 2014 Frigoglass announced the integration of its Turkey-based manufacturing volume into its European plant in Timisoara, Romania. Frigoglass' Silivri-based Turkish manufacturing plant has ceased operations by the end of 2014. The commercial and customer service activities in Turkey have been seamlessly continued during the integration period and beyond.
This integration process will also enable the effective consolidation of Frigoglass' product range in Europe towards an innovative modular platform covering all existing applications. This will reduce complexity, drive cost efficiency through scale and safeguard excellent quality. On top of this, Frigoglass will maintain its innovation commitment and invest in additional Product Development resources in Romania. Based on this, we will enhance customer responsiveness and create value through innovative cooler solutions for customers.
As a result the Group's the results have been negatively affected for 2014 by € 36 mil.
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Provisions for warranties | 2.796 | 3.711 | - | - | |
| Other provisions | 1.110 | 1.130 | - | - | |
| Total provision for other liabilities and charges | 3.906 | 4.841 | - | - |
| Provisions for Warranties | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Opening balance | 3.711 | 3.664 | - | |
| Additional provision for the year | 480 | 1.497 | - | - - |
| Unused amounts reversed | (645) | (950) | - | - |
| Charged to income statement | (165) | 547 | - | - |
| Utilized during the year | (407) | (230) | - | - |
| Reclassification of accounts | (385) | (473) | - | - |
| Exchange difference | 42 | 203 | - | - |
| Closing balance | 2.796 | 3.711 | - |
As at 31 December 2015 the total provision is consistent with the Group's warranty policy and assumes that no extraordinary quality control issues will arise on the basis that no such indicators exist as at the date of approval of these financial statements.
| Other Provisions | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Opening balance | 1.130 | 1.121 | - | - |
| Additional provision for the year | 47 | 165 | - | - |
| Unused amounts reversed | - | (200) | - | - |
| Charged to income statement | 47 | (35) | - | - |
| Utilized during the year | (150) | (306) | - | - |
| Reclassification of accounts | - | 254 | - | - |
| Exchange difference | 83 | 96 | - | - |
| Closing balance | 1.110 | 1.130 | - | - |
The category "Other provisions" includes mainly : provisions for taxes on sales and provisions for recycling costs.
| Total provisions for other liabilities & charges | 3.906 4.841 - - |
|---|---|
| -------------------------------------------------- | -------------------------- |
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| Provisions & Liabilities |
Tax losses carried forward |
Impairment of Assets |
Pensions & employee benefit plan |
Other | Total | |
| Deferred tax asset | ||||||
| Opening balance at 01.01.2015 | 2.761 | 6.724 | - | 5.034 | 3 | 14.522 |
| Charged to income statement | (1.074) | (6.992) | - | (886) | 84 | (8.868) |
| Charged to equity | - | - | - | 60 | (5) | 55 |
| Exchange differences | (42) | 271 | - | (93) | 4 | 140 |
| Closing balance at 31.12.2015 | 1.645 | 3 | - | 4.115 | 86 | 5.849 |
| Accelerated tax depreciation |
Fair value gains |
Asset revaluation |
Income tax at preferential rates |
Other | Total | |
|---|---|---|---|---|---|---|
| Deferred Tax Liabilities | ||||||
| Opening balance at 01.01.2015 | 16.891 | - | - | - | 70 | 16.961 |
| Charged to income statement | 3.098 | - | - | - | (30) | 3.068 |
| Exchange differences | (1.002) | - | - | - | (5) | (1.007) |
| Closing balance at 31.12.2015 | 18.987 | - | - | - | 35 | 19.022 |
| Net deferred income tax asset / (liability) | (13.173) |
|---|---|
| Closing balance at: | Consolidated | |
|---|---|---|
| 31.12.2015 | 31.12.2014 | |
| Deferred tax assets | 426 | 8.733 |
| Deferred tax liabilities | 13.599 | 11.172 |
| Net deferred income tax asset / (liability) | (13.173) | (2.439) |
Net deferred income tax asset / (liability)
| Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| Provisions & Liabilities |
Tax losses carried forward |
Impairment of Assets |
Pensions & employee benefit plan |
Other | Total | ||
| Deferred Tax Asset | |||||||
| Opening balance at 01.01.2014 | 2.938 | 8.892 | - | 3.878 | (263) | 15.445 | |
| Charged to income statement | (335) | (2.616) | - | 718 | 259 | (1.974) | |
| Charged to equity | - | - | - | 266 | 7 | 273 | |
| Exchange differences | 158 | 448 | - | 172 | - | 778 | |
| Closing balance as at 31.12.2014 | 2.761 | 6.724 | - | 5.034 | 3 | 14.522 |
| Accelerated tax depreciation |
Fair value gains |
Asset revaluation |
Income tax at preferential rates |
Other | Total | |
|---|---|---|---|---|---|---|
| Deferred Tax Liabilities | ||||||
| Opening balance at 01.01.2014 | 17.879 | - | - | - | 108 | 17.987 |
| Charged to income statement | (1.400) | - | - | - | (40) | (1.440) |
| Exchange differences | 412 | - | - | - | 2 | 414 |
| Closing balance as at 31.12.2014 | 16.891 | - | - | - | 70 | 16.961 |
| Net deferred income tax asset / (liability) | (2.439) | |
|---|---|---|
| Closing balance at: | Consolidated | |
| 31.12.2014 | 31.12.2013 | |
| Deferred tax assets | 8.733 | 8.890 |
| Deferred tax liabilities | 11.172 | 11.432 |
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against tax liabilities and when the deferred income taxes relate to the same fiscal authority. The majority portion of deferred tax asset / liability is to be recovered after more than 12 months. The Group recognised a deferred tax asset with respect to tax lossed carried forward only to the extend that it believes can be utilised in the immediate future.
(2.439) (2.542)
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| Provisions & liabilities |
Tax losses carry forward |
Impairment of assets |
Pensions & employee benefit plan |
Other | Total | |
| Deferred tax asset | ||||||
| Opening balance at 01.01.2015 | 247 | 360 | - | 1.253 | - | 1.860 |
| Charged to income statement | (247) | (360) | - | (1.313) | - | (1.920) |
| Charged to equity | - | - | - | 60 | - | 60 |
| Closing balance at 31.12.2015 | - | - | - | - | - | - |
| Accelerated tax depreciation |
Fair value gains |
Asset revaluation |
Income tax at preferential rates |
Other | Total | |
|---|---|---|---|---|---|---|
| Deferred tax liabilities | ||||||
| Opening balance at 01.01.2015 | 550 | - | - | - | - | 550 |
| Charged to income statement | (550) | - | - | - | - | (550) |
| Closing balance at 31.12.2015 | - | - | - | - | - | - |
| Net deferred income tax asset / (liability) | - | |
|---|---|---|
| Closing balance at: | Parent Company | |
| 31.12.2015 | 31.12.2014 | |
| Deferred tax assets | - 1.310 |
|
| Deferred tax liabilities | - - |
|
| Net deferred income tax asset / (liability) | - 1.310 |
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| Provisions & liabilities |
Tax losses carry forward |
Impairment of assets |
Pensions & employee benefit plan |
Other | Total | |
| Deferred Tax Asset | ||||||
| Opening balance at 01.01.2014 | 676 | 360 | - | 934 | - | 1.970 |
| Charged to income statement | (429) | - | - | 53 | - | (376) |
| Charged to equity | - | - | - | 266 | - | 266 |
| Closing balance as at 31.12.2014 | 247 | 360 | - | 1.253 | - | 1.860 |
| Accelerated tax depreciation |
Fair value gains |
Asset revaluation |
Income tax at preferential rates |
Other | Total | |
|---|---|---|---|---|---|---|
| Deferred tax liabilities | ||||||
| Opening balance at 01.01.2014 | 720 | - | - | - | - | 720 |
| Charged to income statement | (170) | - | - | - | - | (170) |
| Closing balance as at 31.12.2014 | 550 | - | - | - | - | 550 |
| Net deferred income tax asset / (liability) | 1.310 |
|---|---|
| Closing balance at: | Parent Company | |
|---|---|---|
| 31.12.2014 | 31.12.2013 | |
| Deferred tax assets | 1.310 | 1.250 |
| Deferred tax liabilities | - | - |
| Net deferred income tax asset / (liability) | 1.310 | 1.250 |
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against tax liabilities and when the deferred income taxes relate to the same fiscal authority. The majority portion of deferred tax asset / liability is to be recovered after more than 12 months. The Company recognised a deferred tax asset with respect to tax lossed carried forward only to the extend that it believes can be utilised in the immediate future.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Retirement benefit | 21.778 | 19.321 | 5.049 | 4.821 |
| Total retirement benefit obligations | 21.778 | 19.321 | 5.049 | 4.821 |
The movement of the retirement benefit obligation during the year is as follows:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Opening balance | 19.321 | 15.750 | 4.821 | 3.597 |
| Additional provision for the year | 3.592 | 3.493 | 440 | 351 |
| Unused amounts reversed | (121) | - | (121) | - |
| Charged to income statement | 3.471 | 3.493 | 319 | 351 |
| Utilized during the year | (631) | (2.048) | (296) | (149) |
| Recognized actuarial |
609 | 1.022 | 205 | 1.022 |
| Exchange differences | (992) | 1.104 | - | - |
| Closing balance | 21.778 | 19.321 | 5.049 | 4.821 |
| The amounts recognized in the balance sheet | Consolidated | Parent Company | ||
|---|---|---|---|---|
| are as follows: | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 |
| Present value of obligations | 21.778 | 19.321 | 5.049 | 4.821 |
| Fair value of plan assets | - | - | - | - |
| Total | 21.778 | 19.321 | 5.049 | 4.821 |
| Unrecognized past service cost | - | - | - | - |
| Net liability in the balance sheet | 21.778 | 19.321 | 5.049 | 4.821 |
| The amounts recognized in the income statement | Consolidated | Parent Company | |||
|---|---|---|---|---|---|
| are determined as follows: | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Current service cost | 2.150 | 2.206 | 217 | 256 | |
| Interest cost | 767 | 600 | 102 | 95 | |
| Regular P&L charge | 2.917 | 2.806 | 319 | 351 | |
| Recognized past service cost | - | - | - | - | |
| Additional Cost of extra benefits | 554 | 687 | - | - | |
| Total P&L charge | 3.471 | 3.493 | 319 | 351 |
| Movement in the net liability recognized in the | Consolidated | Parent Company | |||
|---|---|---|---|---|---|
| Balance sheet | 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Net liability in BS at the beginning of the year | 19.3 21 | 15.750 | 4.821 | 3.597 | |
| Benefits paid directly | (631) | (2.048) | (296) | (149) | |
| Total expenses recognized in the income statement | 3. 471 | 3.493 | 319 | 351 | |
| Recognized actuarial |
609 | 1.022 | 205 | 1.022 | |
| Exchange difference | (992) | 1.104 | - | - | |
| Net liability in BS at the closing of the year | 21.778 | 19.321 | 5.049 | 4.821 |
| Main assumptions used: | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Discount rate | 9,94% | 10,13% | 2,00% | 2,06% |
| Rate of compensation increase | 9,47% | 9,39% | 2,00% | 2,00% |
| Average future working life | 11,14 | 11,27 | 17,21 | 17,90 |
The components of recognized actuarial
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Change in financial assumptions | 609 | 1.022 | 205 | 1.022 |
| Due to experience | - | - | - | - |
| Recognized actuarial |
609 | 1.022 | 205 | 1.022 |
The major defined benefit plans that the Group operates are those in Greece and Nigeria. The plans refer to statutory regulations applied by the local law.
The liabilities arising from such obligations are valuated by independent firm of actuaries. The last actuarial valuations were undertaken in December 2015.
In mid-November 2012, in Greece, law 4093 was voted that reduced the level of the statutory indemnities of non-daily paid employees. Early in 2013, the Parent Company decided to adjust its indemnity policy in order to reflect the key amendments introduced by law 4093/12.
According to the Parent Company's policy, the indemnity offered to all employees at retirement is the same as the amount of indemnity offered in case of dismissal of a salaried employee, without period of notice. The retirement indemnity offered by Frigoglass before amendment was equal up to a maximum of 24 monthly pensionable salaries, with no maximum salary cap.
The retirement indemnity offered by the Parent Company after amendment is equal up to a maximum of 12 monthly pensionable salaries, with no maximum salary cap, and for employees who had more than 16 years of service upon the law 4093/12 publication (i.e. on 12.11.12), up to a maximum of additional 12 salaries, capped at € 2.000. The impact of the indemnity amendment on the accounting figures was measured on 01.01.13.
The decrease in the actuarial liability from the above plan amendment is equal to € 649 th. and following IAS19 Revised, it is termed a negative Past Service Cost
A quantative sensitivity analysis for significant assumptions as at 31.12.2015 is shown below:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Discount rate 0,5% higher | (546) | (507) | (414) | (395) |
| Discount rate 0,5% lower | 600 | 558 | 459 | 439 |
| Voluntary withdrawal rates were decreased by 50% | 81 | 166 | 20 | 19 |
In the following 12 months no significant cash outflows are expected to be done.
The expenses of the Group and Parent company are analyzed below:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Raw materials, consumables, energy & maintenance | 256.213 | 276.888 | 14.662 | 13.403 |
| Wages & Salaries (Note 25) | 70.747 | 70.535 | 12.548 | 13.467 |
| Transportation expenses | 19.413 | 23.954 | 897 | 680 |
| Employee benefits, personel expenses | 9.740 | 9.934 | 2.150 | 1.845 |
| Travel expenses | 5.174 | 5.503 | 1.306 | 1.468 |
| Provision for staff leaving indemnities | 2.379 | 2.572 | 508 | 785 |
| Audit & third party fees | 12.989 | 11.503 | 2.916 | 2.316 |
| Rent, insurance, leasing payments and security expenses | 9.665 | 8.476 | 1.070 | 1.121 |
| Provisions for trade debtors, inventories, warranties and | ||||
| free of charge goods | 10.107 | 8.197 | 1.036 | 1.235 |
| Promotion and after sales expenses | 8.638 | 9.228 | 2.741 | 3.067 |
| Telecommunications, subscriptions and office supply | ||||
| expenses | 1.569 | 1.660 | 295 | 296 |
| Other expenses | 4.186 | 4.538 | 1.752 | 1.441 |
| Provision for stock options (Note 15 & 16) | 58 | (495) | 58 | (495) |
| Depreciation | 33.666 | 33.370 | 3.393 | 2.917 |
| Government grant income for exports ( Note 10 ) | (1.555) | (1.198) | - | - |
| Total | 442.989 | 464.665 | 45.332 | 43.546 |
| Cost of goods sold | 386.887 | 404.380 | 23.870 | 21.519 |
|---|---|---|---|---|
| Administration expenses | 27.367 | 29.178 | 15.478 | 15.964 |
| Selling, distribution & marketing expenses | 24.301 | 26.969 | 3.946 | 4.098 |
| Research & development expenses | 4.434 | 4.138 | 2.038 | 1.965 |
| Total | 442.989 | 464.665 | 45.332 | 43.546 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Cost of goods sold | 27.497 | 26.669 | 389 | 213 |
| Administration expenses | 3.279 | 3.381 | 1.312 | 1.176 |
| Selling, distribution & marketing expenses | 221 | 737 | 74 | 73 |
| Research & development expenses | 2.669 | 2.583 | 1.618 | 1.455 |
| Total | 33.666 | 33.370 | 3.393 | 2.917 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Profit / |
101 | 8 | 32 | - |
| Other |
- | - | - | - |
| Total | 101 | 8 | 32 | - |
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| A2 | Citibank | 6.438 | 19.676 | 8 | 7 |
| BB- | I.B.T.C ( Stanbic ) | 29.329 | 15.167 | - | - |
| Aa3 | HSBC | 6.892 | 13.848 | 3.262 | 3.596 |
| Baa1 | China Merchand Bank ( CMB ) | 1.297 | 3.876 | - | - |
| Aa1 | TD Bank | - | 2.220 | - | - |
| Ba1 | First National Bank (S.Africa) | 1.483 | 1.995 | - | - |
| Caa2 | Alpha Bank | 1.242 | 1.398 | 86 | 17 |
| Ba2 | Sberbank | 26 | |||
| Baa3 | Union Bank of Nigeria PLC | - | 971 | - | - |
| Caa3 | Eurobank Ergasias | 4.639 | 446 | 1.194 | 370 |
| BBB+ | D n B Nor Bank (Norway) | 1.117 | 439 | - | - |
| A3 | ING Group | 272 | 566 | - | - |
| Ba2 | Millennium | 5 | - | ||
| N/A | Other Banks | 4.692 | 8.062 | 11 | 54 |
| Total | 57.432 | 68.664 | 4.561 | 4.044 |
| Bank Credit Rating (S&P, Fitch, Moody's rating) | Consolidated | Parent Company | ||||
|---|---|---|---|---|---|---|
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |||
| N/A | Bond loan | 246.095 | 244.693 | 82.784 | 72.175 | |
| A2 | Citibank | 23.427 | 9.675 | - | - | |
| BB- | I.B.T.C ( Stanbic ) | 2.905 | - | - | - | |
| Aa3 | HSBC | 40.529 | 21.456 | - | - | |
| Caa2 | Alpha Bank | 12.572 | 6.033 | - | - | |
| Ba2 | Sberbank | 12.000 | - | - | - | |
| Caa3 | Eurobank Ergasias | 23.970 | 17.385 | - | - | |
| A3 | ING Group | 235 | 1.347 | - | - | |
| Ba2 | Millennium | 281 | 1.367 | - | - | |
| N/A | Other Banks | - | 1.109 | - | - | |
| Total | 362.014 | 303.065 | 82.784 | 72.175 |
The Group has available sufficient credit facilities and is also able to obtain new facilities to cover both operational requirements as well as any strategic expansion initiatives.
| FRIGOGLASS | |
|---|---|
| Customer Credit Rating (S&P rating) | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.12.2015 31.12.2014 | 31.12.2015 31.12.2014 | |||
| CCH Group (BBB+) | 19.750 | 19.151 | 1.554 | 2.095 |
| Other Coca-Cola bottlers (N/A) | 18.513 | 17.215 | 5.566 | 5.178 |
| Diageo Group / Guinness (Α-) | 3.728 | 3.945 | 5 | 5 |
| Heineken Group (BBB+) | 3.431 | 5.942 | 828 | 1.051 |
| Other (N/A) | 57.168 | 68.579 | 3.307 | 3.240 |
| Total | 102.590 | 114.832 | 11.260 | 11.569 |
Sales to key customers are made based on an annual planning that has been agreed with the customer.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 31.12.2014 | 31.12.2015 31.12.2014 | |||
| 00 - 30 days | 43.657 | 61.255 | 2.014 | 2.379 |
| 31 - 60 days | 17.272 | 18.168 | 347 | 690 |
| 61 - 90 days | 9.360 | 12.173 | 133 | 166 |
| 91 - 120 days | 6.939 | 3.586 | 910 | 725 |
| 121 - 150 days | 8.204 | 1.247 | 121 | - |
| 151 - 180 days | 1.003 | 1.822 | - | - |
| > 180 days | 16.155 | 16.581 | 7.735 | 7.609 |
| Total | 102.590 | 114.832 | 11.260 | 11.569 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.12.2015 31.12.2014 | 31.12.2015 31.12.2014 | |||
| Not yet Overdue | 67.416 | 81.155 | 5.164 | 5.138 |
| Overdue 00 - 30 days | 13.943 | 16.585 | 96 | 820 |
| Overdue 31 - 60 days | 5.049 | 4.167 | 36 | 8 |
| Overdue 61 - 90 days | 2.239 | 2.278 | 37 | 11 |
| Overdue 91 - 120 days | 1.512 | 812 | 18 | 9 |
| Overdue 121 - 150 days | 3.026 | 999 | 51 | 18 |
| Overdue 151 - 180 days | 332 | 1.187 | 5.858 | - |
| Overdue > 180 days | 9.073 | 7.649 | - | 5.565 |
| Total | 102.590 | 114.832 | 11.260 | 11.569 |
| Less: Provisions | (3.552) | (2.108) | (1.781) | (1.215) |
| Net trade debtors | 99.038 | 112.724 | 9.479 | 10.354 |
The customers of Frigoglass comprise large international groups like Coca - Cola HBCAG, Coca - Cola Amatil, Coca Cola India, other Coca - Cola bottlers, Diageo - Guinness, Heineken , Efes Group. The Group does not require its customers to provide any pledges or collaterals given the high calibre and international reputation of its customer portfolio.
The provisions for trade debtors are mainly related to the overdue balances over 180 days.
The remaining amount overdue more than 180 days that has not been provided for, relates to countries where there is political instability. However as it concerns large international customer groups, management believes that it will be recoverable and no additional provision is required.
| Less than 1 | Between 1 | Between 2 | Over 5 | |
|---|---|---|---|---|
| year | & 2 years | & 5 years | years | |
| Consolidated 31.12.2015 | ||||
| Trade creditors | 77.440 | 0 | 0 | 0 |
| Other creditors | 37.118 | 0 | 0 | 0 |
| Loans | 372.645 | 13 | 0 | 0 |
| Consolidated 31.12.2014 | ||||
| Trade creditors | 86.003 | 0 | 0 | 0 |
| Other creditors | 44.805 | 0 | 0 | 0 |
| Loans | 59.403 | 582 | 310.613 | 0 |
| Parent Company 31.12.2015 | ||||
| Trade creditors | 5.429 | 0 | 0 | 0 |
| Other creditors | 2.680 | 0 | 0 | 0 |
| Loans | 6.414 | 0 | 97.644 | 0 |
| Parent Company 31.12.2014 | ||||
| Trade creditors | 5.562 | 0 | 0 | 0 |
| Other creditors | 5.766 | 0 | 0 | 0 |
| Loans | 1.124 | 0 | 90.574 | 0 |
www.frigoglass.com
| 23/12/2015 | Frigoglass statement on Glass Operations |
|---|---|
| 10/11/2015 | Results for the Third Quarter ended 30 September 2015 |
| 5/11/2015 | Frigoglass schedules third quarter 2015 results and conference call on Tuesday, 10 November 2015 |
| 4/9/2015 | Frigoglass appoints new Group Finance and IS Director |
| 6/8/2015 | Results for the Second Quarter ended 30 June 2015 |
| 27/7/2015 | Frigoglass schedules second quarter 2015 results and conference call on Thursday, 6 August 2015 |
| 13/7/2015 | Appointment of CEO |
| 16/6/2015 | Announcement of change in voting rights according to Law 3556/2007 |
| 9/6/2015 | Frigoglass announces CEO succession |
| 3/6/2015 | Constitution of the BoD into a body |
| 27/5/2015 | Frigoglass announces resolutions of the Annual General Meeting of shareholders held on 26 May 2015 |
| 22/5/2015 | Frigoglass announces first quarter results ended 31 March 2015 |
| 22/5/2015 | Frigoglass announces agreement for divestment of its Glass Operations |
| 19/5/2015 | Announcement |
| 8/5/2015 | Announcement of change in voting rights according to Law 3556/2007 |
| 7/5/2015 | Frigoglass schedules first quarter 2015 results and conference call on Friday, 22 May 2015 |
| 6/5/2015 | Frigoglass announces 2015 Financial Calendar (Correct Repetition) |
| 30/4/2015 | Frigoglass: Invitation to 2015 Annual General Meeting |
| 21/4/2015 | Announcement of change in voting rights according to Law 3556 |
| 13/3/2015 | Election of new member of the BoD |
| 12/3/2015 | Results for the Fourth Quarter ended 31 December 2014 |
| 11/3/2015 | Frigoglass announces 2015 Financial Calendar |
| 11/2/2015 | Financial update on South African Business |
| 11/2/2015 | Frigoglass schedules fourth quarter 2014 results and conference call on Thursday, 12 March 2015 |
Supervising Authority: Ministry of Development (Department for Limited companies) Company's Web Address: www.frigoglass.com Auditor's Name: Board of Directors: Chairman - non executive member: H. David Auditors Firm: Vice Chairman - non executive member & Independent: Ι. Androutsopoulos Report of the auditors: Managing Director - executive member : N. Mamoulis Member - non-executive: L. Komis Member - non-executive : G. Leventis Member - non-executive : D. Constantinou Member - non-executive & Independent : E. Kalousis Member - non-executive & Independent : V. Fourlis Member - non-executive & Independent : J. Costopoulos
| (in € 000's ) Consolidated Parent Company (in € 000's ) Consolidated Parent Company 31.12.2015 31.12.2014 31.12.2015 31.12.2014 Year ended Year ended 31.12.2015 31.12.2014 31.12.2015 31.12.2014 Assets: Net sales revenue 453.881 487.046 24.714 22.495 Property, Plant & Equipment 207.486 201.527 6.204 6.737 Cost of goods sold (386.887) (404.380) (23.870) (21.519) Intangible assets 18.495 19.152 9.294 9.079 Gross profit 66.994 82.666 844 976 Investments in subsidiaries - - 58.045 58.045 Administrative expenses (27.367) (29.178) (15.478) (15.964) Deferred income tax assets 426 8.733 - 1.310 Selling, distribution & marketing expenses (24.301) (26.969) (3.946) (4.098) Other long term assets 1.318 933 150 169 Research & development expenses (4.434) (4.138) (2.038) (1.965) Total non current assets 227.725 230.345 73.693 75.340 Other operating income 8.145 7.206 18.449 21.011 Inventories 97.226 98.536 2.313 4.589 Other 101 8 32 - Trade receivables 99.038 112.724 9.479 10.354 Operating Profit / 19.138 29.595 (2.137) (40) Other receivables 34.909 31.359 937 1.978 Finance (37.253) (34.716) (8.051) (5.553) Income tax advances 7.746 7.631 2.530 3.074 Profit / (5.121) (10.188) (5.593) Intergroup receivables - - 34.375 45.004 - (36.000) - - Cash & cash equivalents 57.492 68.732 4.564 4.046 Fire Costs - (59) - - Derivative financial instruments 571 80 95 4 Non recurring costs (16.757) - (2.064) - Total current assets 296.982 319.062 54.293 69.049 Profit / (34.872) (41.180) (12.252) (5.593) Total assets 524.707 549.407 127.986 144.389 Income tax expense (23.443) (10.948) (3.130) (591) Profit / (58.315) (52.128) (15.382) (6.184) Attributable to: Non controlling interest 3.771 4.374 - - Shareholders (62.086) (56.502) (15.382) (6.184) Liabilities: Depreciation 33.666 33.370 3.393 2.917 Long term borrowings 12 245.227 - - EBITDA 52.804 62.965 1.256 2.877 Deferred Income tax liabilities 13.599 11.172 - - Retirement benefit obligations 21.778 19.321 5.049 4.821 Intergroup bond loan - - 76.650 71.100 Earnings / Provisions for other liabilities & charges 3.906 4.841 - - - Basic (1,2271) (1,1168) (0,3040) (0,1222) Deferred income from government grants 26 33 26 33 - Diluted (1,2271) (1,1166) (0,3040) (0,1222) Total non current liabilities 39.321 280.594 81.725 75.954 Trade payables 77.440 86.003 5.429 5.562 Other payables 37.118 44.805 2.680 5.766 CONDENSED STATEMENT OF COMPREHENSIVE INCOME Current income tax liabilities 8.857 10.048 - - Currency translation difference (4.260) 8.220 - Intergroup payables - - 19.368 27.512 Cash flow hedges 39 (58) - - Intergroup bond loan - - 6.134 1.075 Actuarial Gains/ (550) (756) (146) (756) Short term borrowings 362.002 57.838 - - Other Comprehensive income / (4.771) 7.406 (146) (756) Derivative financial instruments 393 3.144 - 400 Total current liabilities 485.810 201.838 33.611 40.315 Total Comprehensive income / (63.086) (44.722) (15.528) (6.940) Total liabilities 525.131 482.432 115.336 116.269 Attributable to: Non controlling interest 1.396 5.709 - - Shareholders (64.482) (50.431) (15.528) (6.940) Equity: Share capital 15.178 15.178 15.178 15.178 Share premium 2.755 2.755 2.755 2.755 Treasury shares - - - - ADDITIONAL INFORMATION Other reserves 15.473 13.000 16.353 16.295 1. The main accounting principles as of the balance sheet of 31.12.2015 have been applied. Retained earnings (77.894) (5.227) (21.636) (6.108) 2. The group companies that are included in the consolidated financial statements with their respective locations as well as the Total Shareholders Equity (46.961) 28.179 12.650 28.120 Non controlling interest 46.537 38.796 - - percentage of ownership are presented in Note 14 of the financial statements. Total Equity 66.975 (424) 12.650 28.120 3. Capital expenditure as at 31.12.2015 amounted to € 36.5 mil. for the Group (31.12.2014: € 28.7 mil. ) Total Liabilities & Equity 524.707 549.407 127.986 144.389 and to € 3.2 mil. for the Parent Company (31.12.2014: € 4.6 mil.). 4. There are no pledged assets for the Parent Company and the Group. |
BALANCE SHEET | INCOME STATEMENT | ||||
|---|---|---|---|---|---|---|
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| Year ended | Year ended | |||
| 31.12.2015 | 31.12.2014 | 31.12.2015 | 31.12.2014 | |
| Profit / |
(58.315) | (52.128) | (15.382) | (6.184) |
| Attributable to: | ||||
| Non controlling interest Shareholders |
3.771 (62.086) |
4.374 (56.502) |
- (15.382) |
- (6.184) |
| CONDENSED STATEMENT OF COMPREHENSIVE INCOME | ||||
| Non controlling interest | 1.396 | 5.709 | - | - |
| Shareholders | (64.482) | (50.431) | (15.528) | (6.940) |
| CONDENSED STATEMENT OF CHANGES IN EQUITY | Consolidated | Company | |||||
|---|---|---|---|---|---|---|---|
| (in € 000's ) | Consolidated | Parent Company | 31.12.2015 5.280 |
223 | |||
| 31.12.2015 31.12.2014 31.12.2015 31.12.2014 | 31.12.2014 5.411 |
215 | |||||
| Opening Balance 01.01.2015 & 2014 | 112.510 66.975 | 28.120 | 35.555 | 7. The amounts of income and expenses and outstanding balances of receivables and payables of the Company to and from its | |||
| Total Comprehensive income / |
(63.086) | (15.528) (44.722) | (6.940) | related parties (according to the provisions of IAS 24) were as follows: | |||
| Dividends to non controlling interest | (647) | (318) | - | - | 31.12.2015 | ||
| Shares issued to employees exercising share options | - | - | - | - | Consolidated | Parent | |
| Acquisition of subsiadiary's non controlling interest | (3.724) | Company | |||||
| Share option reserve | 58 | (495) | 58 | (495) | |||
| - | - | - | - | a) Income | 118.751 | 20.062 | |
| Closing Balance 31.12.2015 & 2014 | (424) | 66.975 | 12.650 | 28.120 | b) Purchases & Expenses | 735 | 11.945 |
| ADDITIONAL INFORMATION | ||||||
|---|---|---|---|---|---|---|
| 1. The main accounting principles as of the balance sheet of 31.12.2015 have been applied. | ||||||
| 2. The group companies that are included in the consolidated financial statements with their respective locations as well as the | ||||||
| percentage of ownership are presented in Note 14 of the financial statements. | ||||||
| 3. Capital expenditure as at 31.12.2015 amounted to € 36.5 mil. for the Group (31.12.2014: € 28.7 mil. ) | ||||||
| and to € 3.2 mil. for the Parent Company (31.12.2014: € 4.6 mil.). | ||||||
| 4. There are no pledged assets for the Parent Company and the Group. | ||||||
| 5. There are no litigation matters which have a material impact on the financial position or operation of the Company and the | ||||||
| Group. | ||||||
| 6. The average number of employees for the year is: | Parent | |||||
| Consolidated | Company | |||||
| Consolidated | Parent Company | |||||
| 31.12.2015 31.12.2014 31.12.2015 31.12.2014 | 31.12.2014 | 5.411 | 215 | |||
| 7. The amounts of income and expenses and outstanding balances of receivables and payables of the Company to and from its | ||||||
| related parties (according to the provisions of IAS 24) were as follows: | ||||||
| 31.12.2015 | ||||||
| c) Interest Expense | 6.978 - | |||||
| d) Receivables | 19.750 | 35.929 | ||||
| e) Payables & Loans | 102.152 - | |||||
| f) Transactions & Fees of members of Management | 2.834 3.451 | |||||
| Consolidated | Parent Company | & Board of Directors | ||||
| Year ended | Year ended | g) Receivables from management & BoD members | - | - | ||
| 31.12.2015 | 31.12.2014 31.12.2015 31.12.2014 | h) Payables to management & BoD members | - | - | ||
| 8. The Group's and the Parent Company's provisions are analyzed below: | ||
|---|---|---|
| CASH FLOW STATEMENT | e) Payables & Loans | 102.152 - | |||||||
|---|---|---|---|---|---|---|---|---|---|
| f) Transactions & Fees of members of Management | 2.834 3.451 | ||||||||
| (in € 000's ) | Consolidated | Parent Company | & Board of Directors | ||||||
| Year ended | Year ended | g) Receivables from management & BoD members | - | - | |||||
| 31.12.2015 | 31.12.2014 31.12.2015 31.12.2014 | h) Payables to management & BoD members | - | - | |||||
| Cash Flow from operating activities | |||||||||
| Profit / |
(34.872) | (41.180) (12.252) | (5.593) | ||||||
| Adjustments for: | 8. The Group's and the Parent Company's provisions are analyzed below: | ||||||||
| Depreciation Finance costs, net |
33.666 37.253 |
33.370 34.716 |
3.393 8.051 |
2.917 5.553 |
Consolidated | 31.12.2015 31.12.2014 | Parent Company 31.12.2015 |
31.12.2014 | |
| Provisions | 18.868 | 26.512 | 249 | 59 | a) Provisions for litigation matters | - | - | - | - |
| (101) | (32) (8) | - | b) Provisions for warrantie s |
2.796 | 3.711 | - | - | ||
| Changes in Working Capital: | c) Other Provisions | 1.110 | 1.130 | - | - | ||||
| Decrease / (increase) of inventories | (13.631) | 323 19.527 | (275) | Total | 3.906 | 4.841 | - | - | |
| Decrease / (increase) of trade receivables | 12.242 | 4.382 | 309 | 1.022 | |||||
| Decrease / (increase) of intergroup receivables | - | - | 10.629 | (8.222) | The category 0ther provisions includes mainly provisions for taxes on sales and provisions for recycling costs. | ||||
| Decrease / (increase) of other receivables | (3.550) | (9.020) | 1.041 | (1.121) | |||||
| Decrease / (increase) of other long term receivables | (385) | 600 | 19 | 12 | 9. Group companies that are included in the consolidated financial statements with the respective information regarding the | ||||
| (Decrease) / increase of trade payables (Decrease) / increase of intergroup payables |
(8.563) - |
(8.771) - |
(133) (8.144) |
(188) 6.977 |
fiscal years unaudited by the tax authorities are presented in detail in Note 18 of the financial statements. The Group provides | ||||
| additional tax in relation to the outcome of such tax assessments, to the extent that a liability is probable and estimable. | |||||||||
| (Decrease) / increase of other liabilities (excluding borrowing) | (19.001) | (3.577) (5.642) | 704 | ||||||
| Less: | |||||||||
| Income taxes paid | (12.697) | - (6.386) | 179 | 10.The Company announced on February 26, 2016 the termination of the agreement with GZI Mauritius Limited (" GZI ") signed | |||||
| 48.100 9.229 | (124) | 2.024 | on May 21, 2015 regarding the divestment of its Glass business. Refer to Note 28 of the financial statements for more analysis. | ||||||
| (a) Net cash generated from operating activities | |||||||||
| Cash Flow from investing activities | |||||||||
| Purchase of property, plant and equipment | (32.453) | (23.351) | (401) | (1.265) | |||||
| Purchase of intangible assets | (5.333) (4.084) | (2.787) | (3.321) | ||||||
| Acquisition of subsiadiary's non controlling interest | - (3.724) | - - | |||||||
| Proceeds from disposal of property, plant, equipment and intangible assets | 3.087 417 | 187 | 157 | ||||||
| (b) Net cash generated from investing activities | (39.844) | (25.597) | (3.001) | (4.429) | |||||
| Net cash generated from operating and investing activities (a) + (b) Cash Flow from financing activities |
(30.615) | 22.503 | (3.125) | (2.405) | |||||
| - 125.081 | - | Kifissia, | March 30, 2016 | ||||||
| Proceeds from loans |
143.543 | (84.594) (116.314) | - | - | |||||
| Proceeds from intergroup loans | - | - | 7.715 | 9.975 | THE CHAIRMAN | THE MANAGING DIRECTOR | |||
| - | - | (2.165) | (400) | HARALAMBOS DAVID | NIKOLAOS MAMOULIS | ||||
| Interest paid | (26.764) | (26.251) | (1.907) | (5.159) | |||||
| Dividends paid to shareholders | - | (28) | - | (28) | |||||
| Dividends paid to non controlling interest | (647) | (318) | - | - | |||||
| (c) Net cash generated from financing activities | 31.538 | (17.830) | 3.643 | 4.388 | THE GROUP CHIEF FINANCIAL OFFICER EMMANOUIL FAFALIOS |
THE HEAD OF FINANCE | |||
| Net increase / (decrease) in cash and cash equivalents (a) + (b) + (c) | 923 | 4.673 | 518 | 1.983 | VASILEIOS STERGIOU | ||||
| Cash and cash equivalents at the beginning | 68.732 | 59.523 | 4.046 | 2.063 | |||||
| Effects of changes in exchange rate | (12.163) 4.536 |
- - 155 |
|||||||
| Cash and cash equivalents at the end of the year | 68.732 57.492 | 4.564 | 4.046 |
| Depreciation | 33.666 | 33.370 | 3.393 | 2.917 | Consolidated | Parent Company | |||
|---|---|---|---|---|---|---|---|---|---|
| Finance costs, net | 37.253 | 34.716 | 8.051 | 5.553 | 31.12.2015 31.12.2014 | 31.12.2015 | 31.12.2014 | ||
| Provisions | 18.868 | 26.512 | 249 | 59 | a) Provisions for litigation matters | - | - | - | - |
| (101) | (32) (8) | - | b) Provisions for warrantie s |
2.796 | 3.711 | - | - | ||
| Changes in Working Capital: | c) Other Provisions | 1.110 | 1.130 | - | - | ||||
| Decrease / (increase) of inventories | (13.631) | 323 19.527 | (275) | Total | 3.906 | 4.841 | - | - | |
| Decrease / (increase) of trade receivables | 12.242 | 4.382 | 309 | 1.022 | |||||
| Decrease / (increase) of intergroup receivables | - | - | 10.629 | (8.222) | The category 0ther provisions includes mainly provisions for taxes on sales and provisions for recycling costs. | ||||
| Decrease / (increase) of other receivables | (3.550) | (9.020) | 1.041 | (1.121) | |||||
| Decrease / (increase) of other long term receivables | (385) | 600 | 19 | 12 | 9. Group companies that are included in the consolidated financial statements with the respective information regarding the | ||||
| (Decrease) / increase of trade payables | (8.563) | (8.771) | (133) | (188) | fiscal years unaudited by the tax authorities are presented in detail in Note 18 of the financial statements. The Group provides | ||||
| (Decrease) / increase of intergroup payables | - | - | (8.144) | 6.977 | additional tax in relation to the outcome of such tax assessments, to the extent that a liability is probable and estimable. | ||||
| (Decrease) / increase of other liabilities (excluding borrowing) | (19.001) | (3.577) (5.642) | 704 | ||||||
| Less: | |||||||||
| Income taxes paid | (12.697) | - (6.386) | 179 | 10.The Company announced on February 26, 2016 the termination of the agreement with GZI Mauritius Limited (" GZI ") signed | |||||
| on May 21, 2015 regarding the divestment of its Glass business. Refer to Note 28 of the financial statements for more analysis. | |||||||||
| (a) Net cash generated from operating activities | 48.100 9.229 | (124) | 2.024 | ||||||
| Cash Flow from investing activities Purchase of property, plant and equipment |
(32.453) | (23.351) | (401) | (1.265) | |||||
| Purchase of intangible assets | (5.333) (4.084) | (2.787) | (3.321) | ||||||
| Acquisition of subsiadiary's non controlling interest | - (3.724) | - - | |||||||
| Proceeds from disposal of property, plant, equipment and intangible assets | 3.087 417 | 187 | 157 | ||||||
| (b) Net cash generated from investing activities | (39.844) | (25.597) | (3.001) | (4.429) | |||||
| Net cash generated from operating and investing activities (a) + (b) | (30.615) | 22.503 | (3.125) | (2.405) | |||||
| Cash Flow from financing activities | |||||||||
| Proceeds from loans | - 125.081 | - | Kifissia, | March 30, 2016 | |||||
| 143.543 | (84.594) (116.314) | - | - | ||||||
| Proceeds from intergroup loans | - | - | 7.715 | 9.975 | THE CHAIRMAN | THE MANAGING DIRECTOR | |||
| - - |
(2.165) | (400) | HARALAMBOS DAVID | NIKOLAOS MAMOULIS | |||||
| Interest paid | (26.764) (26.251) |
(1.907) | (5.159) | ||||||
| Dividends paid to shareholders | - (28) |
- | (28) | ||||||
| Dividends paid to non controlling interest | (647) | (318) | - | - | |||||
| (c) Net cash generated from financing activities | 31.538 | (17.830) | 3.643 | 4.388 | THE GROUP CHIEF FINANCIAL OFFICER | THE HEAD OF FINANCE | |||
| EMMANOUIL FAFALIOS | VASILEIOS STERGIOU | ||||||||
| Net increase / (decrease) in cash and cash equivalents (a) + (b) + (c) | 923 | 4.673 | 518 | 1.983 | |||||
| Cash and cash equivalents at the beginning | 68.732 | 59.523 | 4.046 | 2.063 | |||||
| Effects of changes in exchange rate | (12.163) | 4.536 | - - 155 |
||||||
| Cash and cash equivalents at the end of the year | 68.732 57.492 | 4.564 | 4.046 |
COMMERCIAL REFRIGERATORS
G.E.MI: 1351401000
The following information aims to provide a broad overview of the financial position and results of FRIGOGLASS S.A.I.C. and its subsidiaries. We advise the reader, before entering into any investment or any other transaction with the company, to visit the company's site where the financial statements and notes according to IFRS are published together with the independent auditor's report where appropriate.
(In terms of the article 135 of the Law 2190/20, for the companies publishing annual financial statements in accordance with IAS/IFRS)
Date of Approval of the Financial Statements :
D.Marinou SOEL Reg. No 17681 PricewaterhouseCoopers
Unqualified Opinion - Emphasis of Matter
March 30, 2016
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