Annual Report 2015

Transcription

Annual Report 2015

Annual Report 2015
Annual Report
of Merkur trgovina, d.d. for 2015
Let us highlight some facts
about our operations in 2015.
Contents
6
Report of the Chairman of the Management Board
7
Statement of Management’s Responsibility
8
Report of the Supervisory Board
12
Key Strategic Directions of the Company
16
Management Statement
18
Ownership
18
Significant Events at Merkur trgovina, d.d., in 2015
Business Report
22
Risk Management
26
Financial Performance
28
Responsibility
33
Expected Operating Environment in 2016
Financial Report for the 2015 Financial Year
36
Audited Financial Statements of Merkur trgovina, d.d.
40
Notes to the Audited Financial Statements of Merkur trgovina, d.d.
73
Management's Statement
74
Auditor's Report
6
Annual Report of Merkur trgovina, d.d. 2015
Report of the Chairman
of the Management Board
In 2015, we placed great emphasis on consolidating
relations with suppliers and other partners; we
strengthened investments in employees and our
responsibility towards the social and natural environment.
On the one hand, the Slovenian market in which the
Company operates was marked by an improvement in
consumer optimism; however, the volume of investment,
which is also closely linked to the operations of Merkur,
has not yet started to significantly increase. In 2015, Merkur
trgovina mainly focused on sales through its retail centres
both to end customers and businesses; we generated the
majority of revenue through these two channels.
I believe the performance of Merkur trgovina in 2015 was
very successful. In comparison with the previous year,
the Company succeeded in significantly improving its
profitability, thus consolidating its leading position on the
Slovenian market in the category of technical retail.
In 2016, the Company commemorates the 120th
anniversary of the formation of the company from which
Merkur emerged. With the solid foundations established
in 2015, we are entering this anniversary year courageously
and with a refreshed identity. We know Slovenian
customers exceptionally well, and we aim to be a partner
in creating a beautiful home. Even with respect to all
the other stakeholders, we will continue to continuously
improve our operations and ensure further development.
Blaž Pesjak,
Chairman of the Board
7
Statement of Management’s
Responsibility
The Chairman and Members of the Management Board
of Merkur trgovina, d.d. hereby declare that the Annual
Report of Merkur trgovina, d.d. and all of its integral
parts have been compiled and published in accordance
with provisions of the Companies Act and International
Financial Reporting Standards as adopted by the EU.
The Management Board is responsible for the preparation
of the Annual Report of Merkur trgovina, d.d. that gives
a true and fair presentation of the financial position
of the Company and of its financial performance. The
Management Board hereby confirms that the financial
statements have been compiled under the assumption
of a going concern, and that the selected accounting
policies have been applied consistently with disclosure of
any changes thereto.
Blaž Pesjak,
The Management Board of Merkur trgovina, d.d. also
declares that in 2015, at the initiative of the controlling
entity Merkur, d. d. - v stečaju or at the initiative of related
parties, the Company did not take or omit any action
which would result in any damages arising to Merkur
trgovina, d.d.
The Management Board is also responsible for the
adoption of measures to secure the property of Merkur
trgovina, d.d. and prevent and detect fraud and any other
irregularities
Anita Valjavec,
Member of the Board
Marjan Smrekar,
Member of the Board
Employee Director
8
Report of the Supervisory Board
Work of the Supervisory Board
Since early 2015, the composition of the Supervisory Board of Merkur trgovina, d.d. was as follows: Bojan Papič (Chairman),
Marko Ninčević (Deputy Chairman), Klemen Boštjančič and Jure Fišer as shareholder representatives and Ana Hochkraut
and Peter Fratnik as employee representatives. The Supervisory Board's composition did not change in 2015.
In 2015, the Supervisory Board met at six regular and two corresponding sessions. At these sessions it regularly monitored
and supervised the Company's operations and the work of the Company's Management Board, in accordance with its
powers, competences and obligations outlined in the Companies Act and the Company's Memorandum of Association.
In performing its duties, the Supervisory Board considered both the owners' interests as well as the interests of other
stakeholders.
At its sessions in 2015, the Supervisory Board regularly discussed the operating results of Merkur trgovina, d.d. It regularly
monitored the Company's liquidity, solvency and capital adequacy, and consented to the purchase of real estate.
All members of the Supervisory Board actively contributed to its work both through their regular attendance and
discussions at the sessions themselves and through drafting proposals and comments to the materials discussed.
Consideration of the Annual Report
The Supervisory Board addressed the audited Annual Report of Merkur trgovina, d.d. for 2015 at its 12th regular session
held on 25 March 2016. Pursuant to the review of the Annual Report of Merkur trgovina, d.d. for 2015 including the financial
statements and notes thereto, consideration of the Management Board's proposal relating to the appropriation of the
distributable profit and the certified auditor's report, the Supervisory Board approved the audited Annual Report of Merkur
trgovina, d.d for the year 2015.
The Management Board also submitted to all the members of the Supervisory Board its Report on relations with the
affiliated companies of Merkur trgovina, d.d. for 2015, drawn up on the basis of Article 545 of the Companies Act, and the
certified auditor's report on the report, which contained no comments. The Supervisory Board also had no comment to
the statement made by the Management Board in its report on relationships with affiliated companies.
Proposal for the appropriation of the distributable profit
Along with approval of the Annual Report for 2015, the Supervisory Board determined the amount of the distributable
profit of EUR 2,625,540.21, as at 31 December 2015. The Supervisory Board proposed the General Meeting of shareholders
allocate EUR 1,733,074.01 of the distributable profit for 2015 to cover the unregistered capital reduction and to leave EUR
892,466.20 unallocated.
Conclusion
The Supervisory Board members have responsibly and closely monitored the operations of Merkur trgovina, d.d. in 2015. In
our work we were supported by the Company, which allowed us to perform the relevant supervisory function as required
and with the required quality.
The Supervisory Board believes the work of the Management Board and all employees in 2015 was successful.
This report was prepared by the Supervisory Board pursuant to the provisions of Article 282 of the Companies Act.
Naklo, 25 March 2016
Bojan Papič,
Chairman of the Supervisory Board
10
Success grows if nurtured by knowledge,
good will and hard work for long enough.
11
It was in 1896 when Peter Majdič opened his first
hardware store in Celje and named it after the Roman
god of trade.
With enthusiasm, an unwavering will to work and genuine
entrepreneurial spirit he was a pioneer in retail, and soon
thereafter opened a store in Kranj. This inexhaustible spirit
continues to pervade Merkur even today. From it we drew the
strength to get to work and tackle the challenges that we have
worked so hard to overcome in recent years.
Today, as it celebrates its 120th anniversary, Merkur is a Slovenian
retail chain with the longest tradition and the first choice of
Slovenian DIY enthusiasts when improving their homes.
The reason for this lies in the 23 modern and friendly retail
centres, where customers can find advice and products for
construction, renovation and maintenance, entertainment, the
household, the garden and comfortable living. The retail centres
are successfully complemented by a wide network of franchise
partners and the online store.
At Merkur, we believe that every Slovenian can realize their vision
for their home - and we are here to help. Therefore, we attempt
to awaken Slovenians, advise them and motivate the
to get to work. This is the mentality embodied
in the new corporate tagline.
Merkur. Let's get to work!
12
120
years of tradition
Key strategic directions of the Company
Mission
As a competent and competitive company, Merkur trgovina, d.d. offers the best service both in selling
to final customers and to companies.
• We strive to ensure customer satisfaction through providing the best ratio between quality, stock and price,
while also offering the best advice.
• We have a broad range which is appropriate for business-to-business sales.
• Our sales staff are the most competent and customer-oriented.
• We inspire and enrich new lifestyles that appear on the market, and are a strong partner of leading brands and
manufacturers.
• Our retail network is the largest in Slovenia, which allows our suppliers to establish long-term cooperation with us.
• The best service is the key factor of distinguishing us from the competition and our main strategic advantage which we
constantly invest in and thus ensure a positive environment for all stakeholders.
Vision
To be the best provider of products and services in the DIY, appliances and seasonal ranges in Slovenia.
Values
Tradition We continue our 120-year long tradition of operations and thus look to the future with fresh ideas.
Enthusiasm We are passionate, competent and professional, and pursue the Company's goals with a team approach.
Trust We are a conscientious, serious and reliable business partner.
Quality We focus on recognisably good services.
Success We respond to the constant changes in the environment and the market,
while all our employees focus on searching for even better opportunities.
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23
stores with a combined
sales area of 117,774 m2
Shopping centres
Some 23 modern, well-stocked and customer-friendly shopping centres form the backbone of
our sales. As their main advantage, they bring together the concept of successfully selling construction,
renovation and maintenance products alongside products for entertainment, comfort and high-quality
living. Both final and professional customers can benefit from competent sales assistants in every
department, who are always happy to provide assistance and help.
Our shopping centres have two different sales formats:
The MERKUR hybrid type
The MERKURMOJSTER type
brings together a comprehensive offering of products
and services for the home, professional customers
and builders, and supplies both final customers and
companies that purchase through the retail network.
We have 19 of our own retail centres using the Merkur
format, which can be divided into large and medium-size
depending on the size of their sales areas.
brings together an offering of products and services for
professional customers and builders and supplies both
final customers and companies that purchase through the
retail network. We have 4 of our own retail centres using
the Merkur Mojster format.
A further 12 franchisees, who have a total of 15 franchise branches all over Slovenia, also follow the Merkur concept.
46,000
more than
products available at www.merkur.si
On-line
On-line sales supplement and upgrade our retail network of shopping centres. The Merkur Web Centre at www.merkur.si
offers more than 46,000 products.
The Web Centre follows a multi-channel strategy, which focuses on customers and a systematic approach to advertising
regardless of the channel. We aim to allow customers to at any time and from any location easily reach the brand and
obtain all information they need to effectively take the relevant purchasing decision.
Electronic commerce via the special MERKUR PARTNER portal is also supported for B2B customers
at partner.merkur.si.
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900
groups of goods form the backbone
of a diversified sales range
Pillars and categories in Merkur's sales range
DO IT YOURSELF (DIY)
Construction
Workshop
Living
Bathroom
Garden
SEASONAL
Spring and garden
Summer and patio furniture
Autumn and All Saints Day
Christmas and New Year
APPLIANCES
White goods
Acoustics and computer
equipment
Kitchen appliances
Household appliances
120,000
custom-order products
Sales range
Merkur offers a varied sales range. The numerous Slovenian and foreign recognised brands and broad
sales range ensure that the selection and quality of products at Merkur are worthy of our customers'
trust and attention.
Metallurgy products: tin, stainless tin, welding
materials, steel in rods and wire, pipes, tool steel, concrete
steel, reinforced concrete mesh, and ferrous metallurgy.
Construction materials and wood: cement
and lime, bricks and roof tiles, insulation, façade systems,
plasterboard construction elements, products for the
garden and landscaping, wood and products made of
wood, builder's joinery, wall and floor covering.
Technical products: mountings, screws and
adhesion products, chuck equipment, buffing material,
hardware and accessories, measuring equipment, logistics
equipment, hand tools, technical products made of
rubber, personal protection means.
Energy and installations: electricity installations,
lighting, guides and cables, switches, plumbing
installations, sanitary ceramics, ceramic tiles, wellness
equipment, heating, ventilation and air conditioning, and
other installation and electrical materials.
Consumer goods: acoustics and video devices,
small kitchen appliances, white goods, heating elements,
kitchen appliances, computer and office equipment,
telecommunications, gardening and agricultural/forestry
range, other consumer goods.
Chemicals and paper: paint and varnish, decorating
materials, building chemicals, adhesives, construction
chemicals, plastic granules, graphic paper and materials,
packaging materials.
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3
own brands
Own brands
We have supplemented our sales range with our own brands: BIVA, MTECH and MQ. Through
our own brands we aim to bring our offering ever closer to our customers, especially in terms of
construction equipment, equipment for renovating the home, and gardening equipment.
MTECH – Simple but bundles of fun
MTECH is a brand of products needed in the home workshop, in the garden or
in construction: hand tools, workshop equipment and accessories, gardening
equipment and machinery. The products have a modern design, are innovative
and made of high-quality materials. Since they are easy to use they are especially
aimed at "DIY" users.
BIVA – For a more comfortable and beautiful home
BIVA-branded products help us create, enrich and beautify our living environment:
bathroom equipment, kitchen appliances, decorative products, paint, builder's
joinery and flooring, patio furniture and other outdoor living products. Through
its modern materials, attractive colours and designs, and innovation, this brand is
aimed at anyone who enjoys the comfort and aesthetics of their own home.
MQ
MQ is mainly a brand of generic products needed to ensure the primary furnishing
of living spaces. They are exceptionally functional. However, the brand has less
function in terms of differentiation, as the range includes construction tools
and materials, installations, workshop equipment and accessories, gardening
equipment, landscaping equipment, energy sources, and similar. The offering of
MQ products is mainly aimed at rational and price-sensitive - both
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Management Statement
Management system
The Company's Management Board is responsible for drafting and realising the Company's strategic development goals.
In accordance with the two-tier system, the work of the Management Board is supervised by the Supervisory Board. Up to
four members of the Supervisory Board, appointed by the shareholders at the General Meeting, shall represent shareholder
interests. Up to two members of the Supervisory Board shall represent employee interests. By his very function, the
Chairperson of the workers' council shall be a member of the Supervisory Board, in addition to one other member of the
workers' council.
General Meeting
There were two General Meetings in 2015. The first regular General Meeting of Merkur trgovina, d.d. was held on 29
January 2015, while the second General Meeting was held on 15 May 2015.
First General Meeting of shareholders held on 29 January 2015
The General Meeting was attended by 11,368,274 shares or 100% of the shares with voting rights.
The shareholders adopted the following conclusions:
• The audit firm DELOITTE REVIZIJA, d. o. o., Dunajska cesta 165, 1000 Ljubljana was appointed certified auditor of the company MERKUR trgovina, d.d. for the 2014 financial year.
• From the cut-off date of the spin-off (1 October 2013) and for a period on no less than five years, the financial statements of Merkur trgovina, d.d. have and will be prepared in accordance with the Companies Act and the International Financial Reporting Standards.
• Members of the Supervisory Board shall receive attendance fees for attendance at sessions; for each member of the Supervisory Board, the fee amounts to EUR 160 net, or EUR 240 for the Chairman of the Supervisory Board. The fee for a correspondence session is 80% of the regular fee. Notwithstanding the aforementioned, and therefore irrespective of the number of sessions attended, in each financial year, individual members of the Supervisory Board are entitled to receive attendance fees until the total amount of net attendance fees reaches 20% of the basic remuneration for performing the function of a Supervisory Board member in relation to eligible payments on an annual basis.
Members of the Supervisory Board, in addition to attendance fees, also receive basic remuneration for performing their
function of EUR 9,600 gross per individual member. The Chairman of the Supervisory Board is also entitled to an additional
payment of 50% of the basic remuneration for a member of the Supervisory Board, while the Deputy Chairman of the
Supervisory Board is entitled to additional payment in the amount of 10% of the basic remuneration for a member of the
Supervisory Board.
The Supervisory Board members receive this basic remuneration and the remuneration for performing their function in
proportional monthly payments to which they are entitled during their term of office. Each monthly payment is one twelfth of
the annual amounts defined above.
The limitation of the total amount of attendance fees or additional payments to a member of the Supervisory Board shall in no
way affect their obligation to attend all meetings of the Supervisory Board or perform their statutory responsibilities.
Supervisory Board members are entitled to reimbursement of transport costs and travel and accommodation cost incurred
in connection with their work in the Supervisory Board up to the amount specified in the regulations governing the
reimbursement of expenses in connection with work and other income, which are not included in the tax base. Costs for
overnight stays may be refunded only if the distance between the permanent or temporary residence of a member of the
Supervisory Board and the work place is no less than 100 kilometres, provided the member could not return because no public
means of transport was available according to the schedule, or for other objective reasons.
Second General Meeting of shareholders held on 15 May 2015
The General Meeting was attended by 11,368,274 shares or 100% of the shares with voting rights.
The shareholders adopted the following conclusions:
• The General Meeting took note of the written report of the Supervisory Board confirming the 2014 Annual Report. The distributable profit at 31 December 2014 amounts to EUR 1,889,993.73. The distributable profit for 2014 will not be distributed to the shareholders. The entire distributable profit of EUR 1,889,993.73 shall be allocated to cover the unregistered reduction in capital.
The Management Board and the Supervisory Board were granted discharge for the 2014 financial year.
• The audit firm DELOITTE REVIZIJA, d. o. o., Dunajska cesta 165, 1000 Ljubljana was appointed certified auditor of the company MERKUR trgovina, d.d. for the 2015 financial year.
17
Supervisory Board
The Supervisory Board of Merkur trgovina, d.d. met at eight sessions in 2015. At its meetings, the Supervisory Board
discussed the following most important topics:
• The unaudited Annual Report of Merkur trgovina, d.d. for 2014.
• The Business plan of Merkur trgovina, d.d. for 2015.
• Reports on current operations.
• Convening General Meetings and reports thereon.
• Appointing the auditor for the 2015 financial year.
• Consent to purchasing real estate.
• The Business plan of Merkur trgovina, d.d. for 2016.
Composition of the Supervisory Board of Merkur trgovina, d.d.:
Shareholder representatives:
Bojan Papič, Chairman of the Supervisory Board
Marko Ninčević, Deputy Chairman
Klemen Boštjančič, Member
Jure Fišer, Member
Employee representatives:
mag. Ana Hochkraut, Member
Peter Fratnik, Member
The term of office of Supervisory Board members (shareholder representatives) expires on 16 July 2019.
The term of office of Supervisory Board members (employee representatives) expires on 22 June 2018.
Management Board
The Management Board of Merkur trgovina, d.d. met at 52 sessions in 2015. It focused on managing and monitoring the
realisation of the key operating goals in each relevant area.
Management Board of Merkur trgovina, d.d.:
Blaž Pesjak, Chairman of the Management Board (term of office expires on 14 July 2019)
Anita Valjavec, Member of the Management Board (term of office expires on 14 July 2019)
Marjan Smrekar, Member of the Management Board – employee representative (term of office expires on 31 August 2018)
Internal controls relating to financial reporting
From the point of view of proving accounting information complying to the criteria outlined in the International Financial
Reporting Standards, we have established controls aimed at mitigating the risks related to financial reporting.
These accounting controls ensure the:
• authenticity,
• accuracy and
• completeness of financial data.
We ensure the regular professional training of our employees, which enables them to contribute high-quality, correct
and timely accounting data.
18
Ownership
The share capital of Merkur trgovina, d.d. amounting to EUR 11,368,274 is represented by 11,368,274 ordinary
de-materialised no par value shares. Each share represents EUR 1.
An ordinary no par value share is registered to the holder, giving the holder the right to:
• one vote at General Meetings,
• a proportionate amount of share in the profit earmarked for dividend payment,
• a proportionate share of the remaining bankruptcy or liquidation estate in the event of the Company
going bankrupt or being liquidated.
The shares of Merkur trgovina, d.d. are not traded on an organised market.
As at 31 December 2015, MERKUR – trgovina in storitve, d. d. - v stečaju is the 100% owner of Merkur trgovina, d.d.
Significant Events
at Merkur trgovina, d.d. in 2015
On 30 September 2015, MERKUR trgovina, d.d. concluded with Hypo-BA, d.o.o., Ljubljana a contract on the purchase
of real estate for the Hudinja shopping centre in Celje, at Mariborska cesta 162, Celje.
Other major achievements in 2015
Best Buy Award
At the beginning of 2015, in an independent survey, Slovenian customers chose Merkur as the retail chain that offers the
best ratio between the quality and price on the Slovenian market when buying products for the house, home, garden and
yard, awarding Merkur the Best Buy Award.
This award goes hand in hand with our mission: to ensure customer satisfaction through the provision of the best ratio
between quality, stock and price, while also offering the best advice. As the Best Buy Award is well known by Slovenian
consumers, in 2015 we included it in our marketing communication, thereby further strengthening the message that the
best ratio between quality and price remains Merkur's commitment also for the future.
Grand Prize at the 24th SOF
Merkur's advertisements "Grandma" and "Lovers" from the festive campaign "For all hidden and revealed wishes", received
the grand prize for the best TV advertisement at the 24th Slovenian Advertising Festival, held on 26 and 27 March 2015 in
Portorož.
With this campaign, designed by advertising agency Leo Burnett, we reminded customers that during the holidays, they
can find gifts for everyone at Merkur. At the same time, following the successful start of operations of Merkur trgovina, we
refreshed our brand. The campaign, which had already been publicly acclaimed, was thus subject to this top domestic
expert award.
20
One is rarely simply lucky.
Hard work is needed to be successful.
Business Report
22
Risk Management
Efficient risk management is fundamental to safe and profitable business operations and one of the significant factors
determining the Company's business performance.
Management of different risks requires different risk approaches. Business risk to which our Company is exposed are
managed by sectoral services. Through timely identification of risks, we aim to improve achievement of set objectives,
identify any deviations in a timely manner and adopt corrective measures in order to mitigate the potential impact of
adverse events and improve our management of assets available to the Company for its realisation of set goals.
Business risks
Business risks are risks associated with the Company's business and its core activity. Merkur trgovina is a trading company
and as such its business risks arise from changes in consumer purchasing habits mainly as a reflection of their buying
power and from B2B customer trends which are largely dependent on general economic conditions (construction sector,
public procurements and similar). Key indicators are the unemployment rate, the movement of GDP and investment rates
Risk of decline in purchasing power
A halt in unemployment rate growth and increased consumer optimism have
so far failed to be reflected in a significant increase in consumption. Purchasing
habits of Slovenian consumers have altered significantly in recent years towards
more prudent spending which will have a durable impact. From a customer's
point of view, the fact that he can obtain high-quality products at a moderate
price is more important that the fact where he or she can purchase the product
from. Due to the forecast of a gradual improvement in macroeconomic ratios in
the future years, we do not expect any further decline in the purchasing power.
The risk is managed by communicating that we are a trustworthy partner,
offering advice and consultation in addition to a purchase and a complete
range of services for our customers. Merkur trgovina measures its market
potential and regularly monitors customer satisfaction, the number of
complaints, number of visitors to the shopping centres as well as their average
basket of purchases. In addition, we compare prices of products with those of
our competitors and by other similar measures.
MEDIUM
Risk of product range
Operating in a rapidly changing market and a highly competitive environment
requires the constant monitoring of the sales range and prices in order to adapt
to the environment and pursue the Company's sales strategy.
Due to its vast range of products and sales programme, Merkur trgovina is
exposed to a variety of sales and market risks. Rapid response to any potential
changes in market dynamics and competition, and adapting the product
ranges, prices and marketing activities to the new developments is crucial for
efficient risk management.
MEDIUM
Procurement risks
Procurement risks are separated into two major groups, namely:
• supplier risks - a reliable supplier that offers financially acceptable
purchasing conditions;
• the risk of legal requirements and standards in the field of customs,
the environment and technical documentation.
The risk associated with selection of the right supplier to ensure smooth supply
and replenishing of stock levels is managed through our internal process of
supplier selection. As part of the process of choosing a supplier, in addition to
an appropriate sales range and commercial conditions, the logistical aspect is
also crucial - in other words, the reliable and timely supply without errors and
additional finishing.
LOW
BUSINESS REPORT
Supply chain risks
Timely supply of goods to our retail centres is of key importance for the
achievement of our planned objectives and strengthening the brand in the eyes
of consumers. To this end, we have organisationally joined in the supply chain
the previously separate areas of category management, purchasing and logistics.
The risk is mitigated through constant optimisation of the procurement process,
compliance with logistics standards, provision of a safety level of stock and by
trading with only verified suppliers who take great care for the reliability, speed
and quality of their products during the manufacturing process as well
as during their supply.
MEDIUM
Financial risks
Financial risks are the risks that my adversely affect the Company's ability to manage its financial income and
expenses, to preserve the asset's value and to manage its financial assets. Financial risk management is described in
detail in Note 4.6 of the Accounting Report.
Credit risk
Credit risk is the risk that trade receivables and those due from other business
partners resulting from deferred payments will either be paid with delay, will
only be paid partly or will not be paid at all.
The Company follows its established policy of active credit risk management
which involves receivable collateralisation, balance sheet analysis of business
partners, regular monitoring of open receivable positions, limiting exposure
to individual customers through introduction of a system of limits, granting
benefits on advance payments, charging default interest on delayed payments
and an active policy of receivables recovery. This has an important impact
on the quality of receivables, dispersal of exposure and reduction in due and
outstanding receivables.
LOW
Liquidity risk
Liquidity risk is the risk of the Company not having sufficient liquid assets at
any given moment to settle its current liabilities or to maintain normal business
operations.
The Company successfully manages liquidity risk. The Company has entered
into a long-term credit or loan agreement with all creditors and lenders, under
which the liabilities fall due gradually over the next 8 or 11 years. More than
half of the total revenue is generated on sales to individuals were payment is
made in cash or with payment cards, which ensures regular daily inflows and
mitigates liquidity. The Company manages its liquidity risk by following its
adopted active liquidity risk management policy through efficient balancing of
cash inflows and outflows.
LOW
Interest rate risk
The Company's exposure to changes in interest rates mainly derives from
adverse fluctuation of the EURIBOR variable interest rate.
Less than 12 percent of the Company's liabilities are linked to a variable interest
rate and therefore the Company is not significantly exposed to the interest
rate risk.
LOW
Currency risk
Currency risk is the risk of changes in the value of assets due to foreign exchange
rate fluctuations.
Merkur trgovina mainly enters into transactions denominated in the local
currency. The currency exposure of Merkur trgovina arises exclusively from
import transactions which are denominated in USD, which accounts for less
than 3 percent of total procurements made.
LOW
23
24
Operational risk
Operating risks are associated with the implementation and monitoring of business processes and activities and
the consumption and costs incurred during the implementation of the business processes.
Strategic risk
Strategic risk is the risk of the Company not being able to pursue its adopted
strategy, meet and monitor the achievement of its planned objectives and
active response to any deviations from the plan in order to adopt correctional
measures.
Merkur trgovina has established regular reporting channels which help us to
identify any potential deviations from the planned policies. The Management
Board adopts corrective measures that may be necessary to achieve the planned
performance results.
MEDIUM
IT risks
MEDIUM
The risk of failure of central information systems, the risk of insufficient
information technology support to the business processes and the risk of
technological obsolescence of the information technology support.
The risk of failure is mitigated by keeping abreast with the new technology
which is located in a protective IT location.
The Company owns and maintains its own information technology support to
the business processes. Due to a vast number of services provided to customers
and long-standing process development and information support provision,
these processes are rather complex. Merkur's IT system is based on technologies
that are increasingly demanding to maintain. Our strategic goal is to rent
services and replace our own ERP with a standard ERP. Most of the technical
support and IT infrastructure services are already outsourced. In connection
with the ERP, preparation is underway with respect to the processes and the
retail IT system.
Human resource risks
MEDIUM
Provision and retention of key qualified personnel.
The risk is managed through long-term human resource planning, the
identification of key personnel, a sophisticated selection process, and the
oriented and systematic development, education and training of personnel.
Legal risks
LOW
Providing quality legal support to all business processes.
This risk is managed by ensuring the involvement of legal services in all business
processes, by reinforcing the professional competences of staff in the legal
department, and through cooperation with external legal experts.
Risk of accidents
Risk of damage events occurring resulting in an increase in operating costs.
Through active implementation of preventive measures and insurance
coverage, the Company mitigates potential damage events which could put
a major burden on the Company's performance result. Merkur trgovin
has agreed a comprehensive insurance contract with an insurance company.
Non-life insurance contracts are agreed under the "all risk" system, while the
liability limits are set sufficiently high to provide a quality protection of the
performance result against major damage events.
LOW
BUSINESS REPORT
Risks in the renting of business premises
The Company perceives financial constraints of property owners, which impact
the implementation of the relevant investment maintenance of facilities.
Consequently, this leads to the risk of operating in substandard facilities and
operating retail outlets in substandard conditions, and causes the risk of
increased costs of ongoing maintenance.
This risk is mitigated by regularly monitoring the condition of facilities and
the operation thereof. We regularly inform and warn owners or managers
of facilities. In demonstrating the need for investments, we also make use of
external legal expertise and other legal remedies.
HIGH
Risks associated with extending the rental contracts and the
Company's ownership
Since the Company was founded through a spin-off in the repeat compulsory
settlement proceedings of Merkur, d. d., all facilities or retail centres are rented
(with the exception of two owned by the Company). With the confirmation
of the repeat compulsory settlement proceedings against Merkur, d. d.,
Merkur, d. d. - v stečaju became 100% owner of the spun-out company Merkur
trgovina, d.d.. In accordance with the Restructuring plan, this investment is
intended for sale, while the proceeds will be a source to repay the creditors of
the bankruptcy estate.
The conclusion of the current rental agreements was carried out in accordance
with the conditions for waiving the reservation on the assumption of a going
concern by the certified appraiser in the process of the repeat compulsory
settlement against Merkur, d. d.
The restrictions and requirements imposed by the owners of buildings when
renewing the current rental agreements represent a certain risk for the Company
as the tenant. The restrictions perceived by the Company mainly relate to their
situation and the needs of owners, which can lead to early increase or the
creation of new costs.
This risk is managed by beginning negotiations for the renewal of rental
agreements with both main landlords a few years before their expiry.
Negotiations are ongoing and aim to retain the Company's rent after the end of
the current period.
The Company certainly needs a strategic owner in order to develop further. The
current owner Merkur, d. d. - v stečaju performs operations in accordance with
the financial restructuring plan and the applicable bankruptcy law.
HIGH
25
26
Financial performance
In EUR thousand
Item
2015
2014
205.159
208.948
EBITDA (earnings before tax, interest, depreciation and amortisation)
5.009
2.683
Operating profit or loss - EBIT
3.321
720
Profit or loss before tax
3.487
516
Assets at 31 December
82.310
80.321
Equity at 31 December
13.246
9.952
Net sales revenues
Operating revenue
In the financial year ended 31 December 2015, Merkur trgovina, d.d. generated EUR 205 million of sales revenues and
a pre-tax operating profit of EUR 3.5 million. The net profit in 2015 amounted EUR 2.9 million.
Operating revenue
Nearly 99% is a result of sales of goods, while revenues from sales of services of EUR 2.9 million only account for slightly
more than one percent. Nearly three fifths of revenues from sales of goods are generated on sales to individuals, while
slightly less than one third is generated through sales to companies through our shopping centres. The remaining sales are
wholesale sales.
More than one third of all goods sold are generated by the Construction materials, wood and chemistry and Consumer
goods ranges. The Energy and installations range is the range with the highest margins.
Sales structure
by range in 2015
Technical products
14.5%
Energy and
installations
27.7%
Margin share
by range in 2015
Consumer
23.6%
Construction materials,
wood and chemistry
34.1%
Technical products
23.9%
Energy and
installations
30.3%
Consumer
23.4%
Construction materials,
wood and chemistry
22.4%
Other operating revenues amounted EUR 1 million. Slightly more than a third of this amount represents revenue from the
reversal and utilisation of long-term provisions, followed by revenues from the collection of receivables.
BUSINESS REPORT
Operating expenses
The Company's entire operating expenses amounted EUR 55 million in 2015. Of that amount, more than a half relates
to labour costs, less than two fifths are costs of services.
Structure of costs in 2015
Employee benefit costs 51.3%
Costs of services 37.5%
Costs of materials 5.5%
Depreciation/amortisation 3.1%
Other operating costs 1.6%
Provisions 1.1%
A financing profit of EUR 0.2 million was generated in 2015.
Total assets of MERKUR trgovina, d.d. as at 31 December 2015 amount EUR 82 million.
Assets, equity and debt at 31 December 2015
(in EUR million)
Non-current assets
Current assets
18
13
Equity
27
Non-current liabilities
42
Current liabilities
64
27
28
Responsibility
Responsibility to Employees
In 2015, we followed the strategic direction of the Company in the field of employees. We strived to create a working
environment in which competent, highly motivated, committed employees can develop with a positive attitude to work,
change and with a desire for success. By setting the foundations for the effective training, education and development of
employees, and by upgrading human resources processes while reducing labour costs aiming to preserve the Company's
competitive advantages, we confidently completed the year 2015.
MOVEMENTS IN THE NUMBER OF EMPLOYEES
At 31 December 2015, Merkur trgovina, d.d. employed 1,540 people. Most employees (73.9%) are employed in the retail
network. Compared to 2014, the number of employees decreased by 2.1%.
Merkur trgovina, d.d.
number of employees
at 31 December 2014
number of employees
at 31 December 2015
Index - no. of employees at
31 Dec. 2014/31 Dec. 2015
TOTAL
1,573
1,540
97,9
STRUCTURE OF EMPLOYEES
Gender structure of employees and average age
Female
50.3%
Male
49.7%
The gender structure of employees is balanced.
Although the gender structure of employees is similar
to that in the previous year, it has changed in favour of
women. In December 2015, 50.3% of employees were
women and 49.7% men.
Compared to 2014, the average age of employees has
increased by 0.4 years and thus at 31 December 2015
stands at 44 years.
Structure of employees in terms of employment agreement type
The share of employees employed for an indefinite period at 31 December 2015 amounts to 96.75%, while only 3.25% of
employees are employees employed for a definite period.
Structure of employees in terms
of education level
In accordance with our business
and the fact that most employees
are employed in retail, most (74.5%)
employees have achieved IV and V
levels of education. This is followed
by employees with secondary and
higher education (20.78%), while less
than 5% have a level of education
lower than IV. We employ
14 employees with master's degrees.
0.5
3.4
0.8
35.5
39.0
9.7
10.1
0.9
Level I. Level II. Level III. Level IV. Level V. Level VI. Level VII. Level VIII.
BUSINESS REPORT
EXTERNAL EMPLOYEE FLUCTUATION
In 2015, external fluctuation stood at 9.39%. Compared to 2014, the fluctuation decreased by 4.32%. In 2015,
we hired 121 new employees, mainly in retail and logistics.
EMPLOYEE DEVELOPMENT
In 2015, in the area of employee training and development, we continued to invest in our competitive advantage our employees - and set up strategic training and development guidelines.
In 2015, Merkur spent 14,560 hours on (recorded) training purposes. In 2015, every employee was engaged in training and
education and on average spent 4.3 hours (2.5 hours in 2014) or 12.1 hours (7.6 hours in 2014) per actual participant. The
average number of hours devoted to training and education per employee per day as at 31 December 2015 stood at 9.4
hours (7.5 hours in 2014).
Hours devoted to training and education
2.5
4.3
7.5
12.1
7.5
9.4
Hours 2014
Hours 2015
Involved
in training
Actual
participants
Per employee
In 2015, compared to the previous year, we spent 23.2% more hours on the acquisition of new expertise and enhancing
product knowledge and the most important competences in light of the strategic guidelines.
In 2015, after years of stagnation, we focused on training and education to raise competencies in the management
and execution of the sales process and strengthening team spirit:
• Throughout the year, we conducted a number of group training and individual coaching sessions in the retail network, including sales to businesses, and started laying the foundations for the development of an internal network of trainers. A total of 361 employees were included in this part of training and education, who spent 2,983 hours.
• Key management personnel at all levels were subject to leadership and management training; implementation began in 2015 at the highest level, with 360 hours spent.
• In line with the strengthening of our competitive advantage, product training in 2015 was the largest in terms of the number of participants. 1,473 employees who were educated for a total of 6,354.5 hours were included in the process of product education.
• Employees attended many professional seminars, meetings and conferences, even abroad, on which 1,504.5 hours were spent.
• 1,201.5 hours were spent on training in occupational health and safety and fire safety, while 638.5 hours were spent on other statutory training courses, including courses in logistical machinery.
• 1,518 hours were spent on employee training for dealing with new or changed work processes in key services.
29
30
Percentage of hours of training by fields of training
Product training 44.8%
Retail training 18.3%
Work training 10.7%
External training 10.6%
Workplace safety 8.5%
Legislation 4.5%
Management 2.5%
In 2015, we organised a tour of the high-bay warehouse for students of commerce and presented the contents of the work
of warehouse keepers. In May, we were visited by the students of the Secondary school for economics and business from
Koper, while in September, we were visited by the students of the School for economics and commerce in Kranj. For the
students of the Faculty of Organisational Sciences in Kranj, in December 2015 at the faculty we gave a presentation of the
organisation of HR activities in the company Merkur trgovina, d.d.
WORKPLACE SAFETY AND HEALTH
In 2015, we recorded 20 injuries at work, compared to 2014 when there were 16 fewer accidents at work.
In the context of the health promotion programme, we carried out many activities aiming to promote activities to protect
and improve the health and welfare at the workplace for all employees. Activities were aimed at raising employees'
awareness of the importance of regular exercise, a healthy diet and recommended exercises for the back, which are
exercises the employees can even perform during working hours. Through announcements through our communication
channels we celebrated many days dedicated to raising awareness of practices harmful to health and a healthy lifestyle,
and provided employees with free flu vaccination in December 2015.
At 31 December 2015 we recorded an absence rate of 4.87% due to sickness, compared to 2014 when we recorded a 5.02%
rate of absence. Absence due to sickness includes sick leave of up to and over 30 days, injuries at work and outside the
work up to and over 30 days, and care and accompaniment.
At 31 December 2015, the Company employed 55 people with disabilities, of whom 32 work part-time. The percentage of
people with disabilities as at 31 December 2015, compared to 31 December 2014, was up 0.14%. The total of all people with
disabilities in 2015 was 60 and was 21 fewer than in 2014. Considering the number of employees, the percentage of people
with disabilities decreased by 1.25% compared to 2014.
BRAND AMBASSADORS
The Company is aware of the importance of employee awareness; only then can we be good ambassadors of the
Company. Employees were thus informed of the relevant information at meetings, through news bulletin boards, through
the internal newsletter ("Novice") and via the Intranet. Especially the Intranet is becoming a central communication point
were employees can find a vast range of relevant information.
In 2015, we continued to follow the good practice from previous years and allowed parents of first-graders to make use of
one additional day of paid leave.
BUSINESS REPORT
Corporate Social Responsibility
Through sponsorship activities, donations and through other schemes, Merkur trgovina, d.d. actively contributes to the
welfare of the social environment in which it operates.
Sponsorship of sporting events
Merkur supported the organisation of the Cycling festival in Kranj, which was organised by the Cycling Club Sava Kranj
between 31 July and 2 August 2015. The main race was the 47th Kranj Grand Prix - Filip Majcen Memorial, the most
prestigious and oldest Slovenian classic cycling race. Other races, intended for all categories, including amateur cyclists, also
took place.
We supported the Mammoth route run, which is a sports competition in cross country running for primary school pupils,
which was organised by the Triglav running and ski club.
Donation to the Storks house
At the beginning of the school year we helped the schoolchildren who visit the Storks house leisure centre in Slovenske
Konjice. There, volunteers from the Association of Friends of Youth Slovenske Konjice, which operates under the auspices
of the Slovenian Friends of Youth (ZPMS), prepared a varied programme for schoolchildren throughout the year. The
premises host several creative workshops and other activities, which are free for all children, while primary school pupils are
also welcome in the centre every afternoon, were they can obtain learning assistance and help with homework. Merkur's
donation of EUR 1,000 allowed the Stork house to purchase a stove and an electric radiator, which ensured the smooth
running of activities in the winter.
Give a piece of Christmas
The activities of social responsibility also involve our customers and thus allow them to, in cooperation with Merkur,
themselves make a positive contribution to the local community. In November and December 2015 we thus upgraded
the charitable campaign Give a piece of Christmas, which was first organised in 2014. This time, we gathered the Christmas
decorations that customers no longer need in Merkur shopping centres. Before Christmas, the heads of the shopping
centres donated the decorations thus gathered to local associations and institutions. In total, Merkur's customers gathered
54 boxes of decorations.
Decorating the children's hospitals in Ljubljana and Maribor
In December 2015, Merkur donated festive decorations to the children's hospitals in Ljubljana and Maribor, and erected a
Christmas tree in the common facilities, and thus made the holidays brighter for children who spent their holidays in the
hospital, as well as for the employees. The donation was part of the traditional campaign of Santa abseiling from the roof
of the Children's Hospital, which is organised by Hitradio Centre in collaboration with the Mountain Rescue Association of
Slovenia, which Merkur joined last year. At the main event held on 15 December, many famous actors, singers and athletes
made the holidays brighter for children with their presence.
31
32
Environmental Responsibility
Through investing in the environment we aim to contribute to the welfare of future generations.
Green shopping centre of the future
Merkur's activities in the environmental field were in 2015 focused on the project "Green shopping centre
of the future" in Kranj.
Together with Gorenjske elektrarne, the shopping centre at Primskovo, Kranj, was subjected to a series of projects leading
to energy efficiency and the consumption of renewable energy. This is the first such example of promoting self-sufficiency
and energy efficiency in Slovenia, and which allows savings and the reduction of CO2 emissions.
A solar power plant, which provides 60% self-sufficiency in the form of green energy, is located on the roof of the
shopping centre, while the remaining 40% is provided from nearby hydro-power plants. In Kranj, Merkur is thus powered
exclusively with green electricity. At the same time, the partners Merkur and Gorenjske elektrarne refurbished the centre's
lighting in order to reduce greenhouse gas emissions by 164 tonnes annually.
At the public presentation of the projects carried out in front of the shopping centre, the management boards of both
companies officially opened the first filling station for electric vehicles in front of Merkur shopping centres, which round-off
the green image of the shopping centres. The charging station provides an 80-percent charge for an electric vehicle in half
an hour. Kranj Mayor Boštjan Trilar, State Secretary mag. Klemen Potisek and recognised innovator in the field of electric
mobility Andrej Pečjak from the Metron Institute were also present at the opening of the renovated shopping centre.
Waste management
Merkur trgovina, d.d. generates waste through the Company's core activity:
• warehousing and selling goods,
• packaging, warehousing and dispatching goods,
• ancillary activities (maintenance, arranging).
Waste is generated in the form of waste packaging, waste electronic and electric equipment, batteries, and other waste
materials generated through retail and ancillary activities.
The Company has adopted a Waste management plan, which defines the strategy in this area. Our strategic goals include
ensuring the separate collection of waste in all areas, reducing the quantities of waste generated and selling waste as
secondary materials.
We undertake the following key waste management measures:
• We have concluded agreements with the relevant waste packaging and electronic and electric equipment processors and waste disposal service providers.
• When negotiating with suppliers we include provisions with which suppliers undertake to fulfil requirements relating
to the assembly and composition of packing, including limitations on the content of hazardous substances.
• We have introduced separate waste collection, which is enabled in our offices by introducing waste collection points ensuring the separate collection of paper, organic waste and waste packaging.
• Waste packaging is separately collected according to the relevant types in shopping and distribution centres. We have introduced transport trolleys for cardboard and sacks for plastics (foil, tape and polystyrene).
• With the introduction of our own disposal of cardboard and plastic, we have managed to reduce our carbon footprint (30% fewer transports achieved due to the greater bulk packaging weight achieved).
• By replacing 7 m3 containers for mixed municipal waste with 240-litre containers and through the strict separation
of waste, in 2015, the costs of mixed municipal waste decreased by 17.5%, while the accumulated weight decreased
by 46.2% compared to 2014.
• We continuously sell waste as secondary materials (metals, plastics, cardboard, paper).
• In our shopping centres we have established boxes were customers can leave their spent batteries, luminaries
and waste electric and electronic equipment.
Quantities of waste electric and electronic equipment collected in 2015 (in kilograms)
Large houshold
appliances
Refrigerators
and freezers
Small houshold
appliances
TV screens
Luminaries
Batteries
TOTAL
188,070
110,465
9,898
6,604
5,216
8,118
328,371
BUSINESS REPORT
Expected Operating Environment in 2016
Over the next two years we expect the recovery in economic activity to continue. Forecasts show that in 2016, exports and
(slightly more than this year) private consumption will continue to be key drivers of growth. GDP growth will be slightly
lower mainly due to lower government investments in the transition to the 2014-2020 financial perspective.
In the context of ongoing growth in exports and domestic demand, we expect a gradual acceleration of growth in
private investment. In conjunction with the increase in real estate trade, the improved income situation of households and
revitalisation of housing loans, the decline in housing investment is also expected to stop. Government consumption will
continue to decline in real terms.
The further growth of disposable income, improvement in labour market conditions and favourable consumer confidence
indicators, which are reflected in a greater willingness to buy, will result in stronger growth in private consumption.
In light of these forecasts, the operating environment will continue to be as challenging in 2016 as in 2015. Although
consumer optimism is returning, according to past experiences, this optimism will translate into consumption with
a certain lag. Based on growth projections according to the relevant model, which takes into account the weighted
macroeconomic indicators, in 2016 we expect slight growth in the market of sale to consumers, although some
predictions for the "do it yourself" segment within the retail segment of on-food products still show no growth and remain
quite pessimistic for 2016.
Despite the fact that the projected growth in private consumption is supported by better labour market conditions
and low interest rates, in order to understand what is happening in the industry of technical retail, in addition to
macroeconomic expectations, we also monitor trends in areas that have a strong influence on the movement and
structure of private consumption.
The attitude of households and individuals to saving on the one hand and to spending and investing on the other hand is
the strongest driver of growth in retail sales, especially in the Merkur segment. In Slovenia, a trend of decline in household
investment has been noted since 2008, despite household disposable income being relatively stable.
The decline in household investments has significantly outstripped the reduction in households’ disposable income.
This trend clearly points to the fact that there is a time lag in the overflows of the positive trends outlined by the forecast
macroeconomic data into actual consumption and the sales of retailers.
Anticipated situation in the construction segment
Trends in the field of construction and renovation of residential buildings impact the sale of products in the sales range of
building materials, timber and chemistry, which represents the largest share of Merkur's sales. Statistics of building permits
issued indicate a significant reduction after 2009, as the number of permits issued annually since 2009 only reaches 40%
of the licenses issued before 2009. In 2015, compared with the first nine months of 2014, seven percent more building
permits were issued; however, it will take quite a few years to return to the level before 2009. Thus, the energy renovation
of buildings, which is strongly linked to subsidies from the state, still remains an important driver of sales growth.
Competitive environment
In addition to the macroeconomic situation, the competitive position significantly impacts the achievement of the
planned objectives. Market consolidation has occurred over the last two years in the field of retail in technical goods, which
will continue to escalate in the coming years. In terms of revenue in retail activities in technical goods, Merkur trgovina is
the leading retailer on the Slovenian market. Our closest competitor recorded half of our annual sales. At the same time,
food retailers are strengthening their ranges of technical goods. Compared to its competitors, Merkur has more sales
assistants per 100 m2 of sales surfaces, as it seeks to maintain a competitive advantage also by providing a higher level of
service and advice.
33
34
Računovodsko poročilo
za leto 2015
A
truemojster
master za
finds
the
right
toolorodje.
for every challenge Pravi
vsak
izziv
najde
both
in
the
workshop
and
in
business.
Tako v delavnici kot pri poslu.
Financial Report
for the 2015 Financial Year
36
Audited financial statements of Merkur trgovina, d.d.
All the data derived (totals, differences, ratios and indices) are calculated from values expressed in the euro rather than thousand euro..
Statement of financial position at 31 December 2015
In EUR thousand
Notes
31 December
2015
31 December
2014
Intangible assets
3.1
8
24
Property, plant and equipment
3.2
17,338
11,649
Loans issued
3.3
188
271
-
164
312
274
17,846
12,383
36,942
37,772
-
12
Item
Other long-term receivables
Deferred tax assets
3.4
Total non-current assets
Inventories
3.5
Short-term financial investments
Loans issued
3.6
85
103
Operating receivables and other assets
3.7
18,427
19,152
Cash and cash equivalents
3.8
9,010
10,898
Total short-term assets
64,464
67,938
TOTAL ASSETS
82,310
80,321
Capital issued
11,368
11,368
Unregistered reduction in capital
-1,733
-3,623
Legal reserves
250
105
Statutory reserves
237
99
Retained earnings
2,626
1,890
-
1,356
2,626
534
498
112
- Profit brought forward
- Net profit for the year
Revaluation surplus
Total capital
3.9
13,246
9,952
Borrowings
3.10
25,167
22,781
Short-term financial lease liabilities
3.11
427
742
Provisions
3.12
1,680
1,888
27,274
25,411
Total long-term liabilities
Financial liabilities
3.13
1,050
1,224
Financial lease liabilities
3.11
418
391
Trade and other payables
3.14
39,440
42,326
434
597
448
419
Total short-term liabilities
41,790
44,958
Total liabilities
69,064
70,369
TOTAL EQUITY AND LIABILITIES
82,310
80,321
Tax liabilities
Provisions
3.12
The accounting policies and notes form an integral part of these financial statements and should be read in conjunction with them.
FINANCIAL REPORT
Income statement for the period 1 January 2015 to 31 December 2015
Item
In EUR thousand
Notes
2015
2014
4.1
205,159
208,948
Cost of goods sold and production costs
-146,743
-153,332
GROSS PROFIT FROM SALES
58,416
55,616
NET SALES REVENUE
Other operating revenue
4.2
994
681
Selling cost
4.3
-39,940
-39,232
Cost of general activities
4.3
-15,156
-14,876
Other operating expenses
4.4
-993
-1,469
3,321
720
OPERATING PROFIT OR LOSS
Financial income
4.5
690
534
Financial expenses
4.5
-523
-738
167
-204
3,487
516
-616
-199
38
274
2,909
592
NET FINANCIAL INCOME/EXPENSE
PROFIT OR LOSS BEFORE TAX
Income tax
4.7
Deferred tax
PROFIT OR LOSS FOR THE YEAR
Statement of comprehensive income
for the period from 1 January 2015 to 31 December 2015
Item
In EUR thousand
Notes
Net profit or loss for the period
Other comprehensive income that will not be reclassified
to profit or loss
Revaluation surplus - actuarial gains
Other comprehensive income for the period
3.9
2015
2014
2,909
592
386
112
386
112
3,295
704
37
38
Cash flow statement for the period from 1 January 2015 to 31 December 2015
In EUR thousand
Item
2015
2014
PROFIT OR LOSS FOR THE PERIOD BEFORE TAXATION
3,487
516
1,688
1,964
-71
-56
Investment income (expense)
-236
-425
Financial income (expense)
346
626
Change in provisions and other accrued and deferred items
-208
281
Impairment of assets
346
1,099
Other effects recognised in equity and/or profit or loss
385
146
Exchange rate differences
-117
-53
2,133
3,582
Operating receivables increase / decrease
512
-1,204
Inventories increase / decrease
529
-3,326
-2,595
4,294
28
6
-780
-
-2,305
-230
CASH FLOWS FROM OPERATING ACTIVITIES
3,315
3,868
Disbursements for acquisition of property, plant and equipment
-7,166
-77
Cash receipts from loans issued
120
142
Interest received
232
231
-6,814
296
2,500
-38
Disbursements from current borrowings
-1
-
Receipts for financial lease - non-current
116
-
Disbursements for financial lease - current
- 04
-399
Interest paid
-600
-422
CASH FLOWS FROM FINANCING ACTIVITIES
1,611
-859
CASH FLOWS IN THE ACCOUNTING PERIOD
-1,888
3,305
Opening balance of cash
10,898
7,593
Closing balance of cash
9,010
10,898
Adjustments for:
Amortisation and depreciation expense
Gains on disposal of property, plant and equipment
PROFIT OR LOSS ADJUSTMENTS
Operating liabilities increase / decrease
Accrued and deferred items increase / decrease
Tax asset / liability increase / decrease
MOVEMENTS IN WORKING CAPITAL
CASH FLOWS FROM INVESTING ACTIVITIES
Receipts / Disbursements in connection with non-current borrowings
The accounting policies and notes form an integral part of these financial statements and should be read in conjunction with them
FINANCIAL REPORT
Statement of changes in equity of Merkur trgovina, d.d.
for the period from 1 January 2015 to 31 December 2015
TOTAL CAPITAL
Revaluation
surplus - actuarial
gains
Capital surplus
Equity as at
31 December 2013
11,368
-3,623
75
71
0
1,356
0
9,248
Other comprehensive
income for the period
-
-
-
-
-
-
112
112
Net profit or loss for the
year
-
-
-
-
592
-
-
592
Total comprehensive
0
0
0
0
592
0
112
704
-
-
30
28
-58
-
-
0
11,368
-3,623
105
99
534
1,356
112
9,952
Other comprehensive
-
-
-
-
-
-
386
386
Net profit or loss for the
year
-
-
-
-
2,909
-
-
2,909
Total comprehensive
0
0
0
0
2,909
0
386
3,295
Transfer of the current
year's profit to retained
earnings from previous
years
0
0
0
0
-534
534
0
0
Allocation of retained
earnings from previous
years - covering the
unregistered capital
according to the General
Meeting's resolution
-
1,890
-
-
-
-1,890
-
0
Net profit appropriation formation of legal reserves
-
-
145
138
-283
-
-
0
11,368
-1,733
250
237
2,626
0
498
13,246
Legal reserves
Item
Share capital
(Retained)
earnings/
accumulated loss
brought forward
(Retained) Net
profit/loss for the
year
Statutory reserves
In EUR thousand
Transactions with
owners
Net profit appropriation formation of legal reserves
Equity as at
31 December 2014
Transactions with
owners
Equity as at
31 December 2015
Items in the statement of comprehensive income are presented in net values reduced by deferred tax.
39
40
Notes to the Audited Financial Statements
of Merkur trgovina, d.d.
1The reporting entity
Merkur trgovina, d.d. (hereinafter: the Company) is a public limited company domiciled in Slovenia. Its registered address is
Cesta na Okroglo 7, 4202 Naklo.
The financial statements of the Company are prepared for the financial year ended 31 December 2015.
The Company's financial statements and its Annual Report are compiled in accordance with International Financial
Standards as adopted by the EU (hereinafter; IFRS as adopted by EU) and in compliance with the Companies Act. The
financial year of the Company covers the same period as the calendar year.
Name and registered seat of the controlling company
The Company is a subsidiary of Merkur, trgovina in storitve d.d. v stečaju, with its registered address at Cesta na Okroglo
7, 4202 Naklo, Slovenia. As at 31 December 2015, Merkur, d. d. - v stečaju is the holder of a 100% interest in the Company's
equity. Merkur, trgovina in storitve, d. d. - v stečaju, does not prepare consolidated financial statements.
The financial statements of Merkur trgovina, d.d. are prepared on a going concern basis assuming that assets are obtained
and sold and liabilities settled in conditions of normal operations.
2Basis of preparation
2.1 Declaration of conformity
The financial statements have been compiled in accordance with the International Financial Reporting Standards (IFRS) as
adopted by the European Union, including accounting and reporting requirements of IFRS and the Companies Act.
Standards and interpretations that are currently effective
In the period under review, the following amendments to the existing standards issued by the International Accounting
Standards Board (IASB) were applicable as adopted by the EU:
• Amendments to a number of standards "IFRS Improvements over the period 2011 to 2013", according to the annual IFRS improvement project encompassing IFRS 3, IFRS 13 and IAS 40, which is aimed primarily at elimination of discrepancies and clarification of wording. The amended standards were adopted by the EU on 18 December 2014 and are effective for periods beginning on or after 1 January 2015.
• IFRIC 21 “Levies”, adopted by the EU on 13 June 2014 and are effective for annual periods beginning on
or after 17 June 2014.
The adoption of these amendments to the existing standards led to no changes in the accounting policies of the
Company.
Standards and representations issued by IASC and adopted by the EU that have not entered into force yet
On the date of the approval of these financial statements, the following standards, amendments and interpretations were
issued that the EU approved but did not yet enter into force:
• Amendments to IFRS 11 “Joint Arrangements” - Accounting for Acquisition of Interests in Jointly Controlled Entities, adopted by the EU on 24 November 2015 (effective for annual periods beginning on or after 1 January 2016).
• Amendments to IAS 1 “Presentation of financial statements” - Disclosure Initiative. adopted by the EU
on 18 December 2015 (effective for annual periods beginning on or after 1 January 2016).
• Amendments to IAS 16 "Property, Plant and Equipment" and IAS 38 "Intangible Assets" - Clarification of Acceptable Methods of Depreciation and Amortisation, adopted by the EU on 2 December 2015 (effective for annual periods beginning on or after 1 January 2016).
• Amendments to IAS 16 "Property, Plant and Equipment" and IAS 41 "Agriculture" - Agriculture: Bearer Plants,
adopted by the EU on 23 November 2015 (effective for annual periods beginning on or after 1 January 2016).
• Amendments to IAS 19 “Employee Benefits” - Defined Benefit Plans: Employee contributions were adopted by the EU on 17 December 2014 and effective for annual periods beginning on or after 1 February 2015.
• Amendments to IAS 27 “Separate financial statements” - Equity Method used in the separate financial statements, adopted by the EU on 18 December 2015 (effective for annual periods beginning on or after 1 January 2016).
• Amendments to a number of standards “IFRS Improvements over the period 2010 to 2012”, according to the annual IFRS improvement project encompassing IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38, which is aimed primarily
FINANCIAL REPORT
at elimination of discrepancies and clarification of wording. The amended standards were adopted by the EU
on 17 December 2014 and are effective for periods beginning on or after 1 February 2015.
• Amendments to a number of standards "IFRS Improvements over the period 2012 to 2014", according to the annual IFRS improvement project encompassing IFRS 5, IFRS 7, IFRS 19 and IAS 34, which is aimed primarily at elimination of discrepancies and clarification of wording. The amended standards were adopted by the EU on 15 December 2015 and are effective for periods beginning on or after 1 January 2016.
The Company estimates that the adoption of these standards, amendments and interpretations will not have a significant
impact on the Company’s financial statements during the period of initial application.
Standards and interpretations issued by IASB but which have not yet been adopted by the EU
Currently, the IFRS as adopted by the European Union do not considerably differ from those adopted by the International
Accounting Standards Board (IASB) with the exception of the following standards and amendments to the existing
standards which were not confirmed for use on 25 February 2016:
• IFRS 9 “Financial instruments” (effective for annual periods beginning on or after 1 January 2018).
• IFRS 14 "Legal deferral of payment of invoices" (effective for annual periods beginning on or after 1 January 2016) The European Commission has decided not to begin the validation process for this interim standard and it will wait
for the final version to be issued.
• IFRS 15 “Revenue from Contracts with Customers” including subsequent amendments (effective for annual periods beginning on or after 1 January 2018).
• IFRS 16 “Leases” (effective for annual periods beginning on or after 1 January 2019).
• Amendments to IFRS 10 “Consolidated financial statements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 28 “Investments in Associates and Joint Ventures” - Investment Entities: exemption from consolidation (effective for annual periods beginning on or after 1 January 2016).
• Amendments to IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in Associates
and Joint Ventures - Sale or Contribution of Assets between and Investor and its Associate or Joint Venture, including subsequent amendments (the date of entry into effect has been deferred until the completion of the research project into the equity method).
• Amendments to IAS 12 "Income Taxes" - Recognition of deferred tax assets arising from unrealised losses (effective for annual periods beginning on or after 1 January 2017).
The Company estimates that the adoption of these standards, amendments and interpretations will not have a significant
impact on the Company’s financial statements during the period of initial application.
At the same time, the accounting for the hedging of risks associated with the portfolio of financial assets and liabilities, the
principles of which the EU has not yet adopted, still remains unregulated. The Company has assessed that the accounting
of risk hedging in connection with the portfolio of financial assets and liabilities in accordance with the requirements of
IAS 39: "Financial Instruments: Recognition and Measurement” would not have a significant impact on the consolidated
financial statements of the Company, if applied as at the reporting date.
2.2 Functional and reporting currency
The financial statements are presented in euro, which is the Company's functional currency. All financial information
presented in euro has been rounded to the nearest thousand, which may have resulted in minor discrepancies.
2.3 Conversion of foreign currencies
Transactions and balances in foreign currencies are translated to the respective functional currencies at the bank's
reference exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies
at the reporting date are translated to the functional currency at the prevailing exchange rate of the European Central Bank
(ECB) at that date. Foreign exchange rate gains and losses are differences between the asset's amortised cost denominated
in the functional currency at the beginning of the period, adjusted by the effective interest and payments made during
the period, and amortised cost in foreign currency translated at the reference exchange rate of ECB prevailing at the
period-end. Non-monetary assets and liabilities denominated in foreign currencies measured at fair value are translated
into the functional currency at the reference exchange rate of ECB at the date when the fair value was determined.
2.4 Property, plant and equipment
The items of property, plant and equipment are tangible assets used in the performance of activities to generate revenue
from the sale of goods and services and for their use for administrative purposes. The items of plant and equipment are
valued at cost less any potential impairment losses, while property is measured under the revaluation model.
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Recognition and measurement
An item of property, plant and equipment is initially measured at cost, which comprises its purchase price, import duties
and non-refundable purchase taxes, as well as directly attributable costs to bringing the asset to the condition necessary
for its intended use. The cost of an asset which requires a prolonged period before it is made available for its intended use,
includes also borrowing costs (interest) accrued until the asset is made ready for its use.
Additional or agreed investments in the assets and in the improvement of assets obtained under financial or operating
lease, are recognised within the items of property plant and equipment or their relevant parts.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be
measured reliably. Expenditure on repairs and maintenance of property, plant and equipment to restore or maintain the
asset's value on the basis of originally assessed standard of performance of the assets are reported as maintenance costs in
the profit or loss in the period when they are incurred.
Subsequent measurement of property, plant and equipment
After initial recognition, the items of plant and equipment are recognised under the cost model reduced by any potential
impairment losses (more information is presented in Note "Impairment"), whereas property is recognised under the
revaluation model based on fair values reduced by subsequent accumulated depreciation and accumulated
impairment losses.
An increase in the carrying amount of an asset due to its revaluation is recognised in other comprehensive income as a
revaluation reserve in equity unless it reverses a revaluation increase of the same property recognised in profit or loss, in
which case the increase is recognised in profit or loss. if an asset's carrying amount is decreased as a result of revaluation,
the decrease is recognised as a reduction in revaluation reserve in the other comprehensive income if the revaluation
amount of a certain property was previously recognised in equity, and the remaining amount of decrease is recognised
directly in profit or loss.
Fair value of property measured under the revaluation model
Fair value of property is based on the assessed market value. Market value is the estimated amount for which a property
should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after
proper marketing wherein the parties had each acted knowledgeably, prudently, and independently.
Depreciation, depreciation method and assets' useful lives
Depreciation of the items of property plant and equipment begins on the first day of the month following the month
when the assets are made available for their use. The items of PPE are depreciated according to the straight-line method
in the period of their estimated expected functional life periods of individual assets. Depreciation expense is recognised in
the profit or loss. The assets' useful lives, which are checked at the end of each financial year, are as follows:
Useful life
Office buildings, stores and warehouses
40 years
Intermediate depots and other facilities
30 years
Landscaping and rail tracks
25 years
Warehouses, containers, greenhouses
10 years
Warehousing equipment
Between 5 and 20 years
Technical equipment, devices used during the
working process and machinery
Store, office and other equipment
Low value assets in excess of EUR 500
Computer and telecommunications equipment
5 years
Land, advances and assets under construction or those being acquired are not depreciated.
Assets obtained under financial lease are depreciated over their estimated useful lives using the annual depreciation rates
applied to the assets owned by the Company. When there is an uncertainty concerning transfer of title after the expiry of
lease period, the assets are depreciated over the shorter of their useful life or the lease period.
FINANCIAL REPORT
Impairment
An asset is impaired when its carrying amount exceeds its recoverable amount. The Company assesses at each reporting
date whether there are any indications of the assets' impairment. If any such indication exists, then the asset’s recoverable
amount is estimated.
When the amount of impairment cannot be assessed for each individual asset, the assessment is made based
on the cash-generating unit to which the asset belongs.
The recoverable amount of an item of property, plant and equipment is considered the higher of the fair value reduced
by the costs of sale or the value in use. The value in use is determined by discounting the expected future cash flows to
the net present value by applying a discount rate (before tax) that reflects the current market estimate of the time value of
money and any risk related to an individual asset.
When the recoverable amount of an asset or cash-generating unit is lower than its carrying amount, the latter is reduced
to the asset's recoverable amount. Impairment losses are recognised in the profit or loss unless the asset is measured under
the revaluation model in which case the impairment loss is recognised as a reduction in the revaluation reserve.
When an asset's recoverable amount increases, its carrying amount or that of the cash-generating unit is increased up
to the recoverable amount that may not exceed the asset's original carrying amount prior to the asset's impairment.
Impairment reversal is recognised in the profit or loss unless the asset is measured under the revaluation model in which
case reversal impairment is recognised as an increase in the revaluation reserve in equity.
Derecognition of property, plant and equipment
When an asset measured under the revaluation model is derecognised due to its disposal or discontinued use, the
revaluation reserve as an equity component is decreased and transferred directly to retained net profit, with the remaining
difference between the asset's sales value and the carrying amount recognised in the profit or loss. The total amount of
the difference between the sales and the carrying amount of the assets measured at cost is recognised in the profit or loss
upon their derecognition.
2.5 Intangible assets
An intangible asset is an identifiable non-monetary asset usually without physical substance such as acquisitions of
software applications, and long-term patents and licences.
The costs of research and development, trademarks and similar items are not recognised as an item of intangible assets
but rather as costs or operating expenses of the period in which they were incurred.
Intangible assets are disclosed at cost less any accumulated amortisation and accumulated impairment losses (see
accounting policy "Impairment").
All intangible assets of the Company have finite useful lives. The items of intangible assets are amortised according to the
straight-line method in the period of their estimated expected functional life periods of individual assets. When useful
lives of intangible assets are not specified, the amortisation expense is recognised in the profit or loss. Amortisation of an
intangible asset begins on the first day of the following month after the assets has been made available for its use. The
estimated useful lives are as follows:
Intangible assets
Software applications
Long-term licences
Useful life
5 years
acquired under the contractors
Derecognition of intangible assets
The items of intangible assets are derecognised upon disposal or when no economic benefits are expected to flow to
the entity from their use or subsequent disposal. Gains and losses resulting from the asset's derecognition present the
difference between the potential selling and carrying amount of the asset. They are recognised in the profit or loss upon
the asset's derecognition.
2.6 Financial assets
In the statement of financial position, the Company reports financial assets, loans and receivables. Classification depends
on the nature of the financial asset and its purpose and is made on initial recognition of financial assets. Financial assets are
recognised on the trading date.
On initial recognition, financial assets are measured at fair value. Transaction costs directly attributable to the acquisition or
issue of a financial instrument increase the asset's fair value.
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Effective interest rate
The effective interest rate means reporting of a debt financial instrument at amortised costs and the systematic allocation
of interest income or expense over the entire duration of the instrument. The effective interest rate is the rate that exactly
discounts the estimated future flow of cash receipts or disbursements (inclusive of the costs of credit approval, premiums
and discounts and similar) through the expected life of the debt financial instrument to the net carrying amount of the
financial instrument upon its initial recognition
The Company does not apply the effective interest rate; instead, the costs of credit approval are allocated on a straight-line
basis to the costs over the expected repayment period of borrowings. The Management has assessed that the abovedescribed method provides a sufficient approximation of the effective interest rate and for this reason in continuation, the
expression effective interest rate is used.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed and determinable payments that are not quoted or
traded on an active market.
They are initially recognised at amounts recorded in the relevant documents under the assumption that they will be
collected. After initial measurement they are disclosed at amortised cost using the effective interest method less any
impairment losses.
Interest income is recognised under the effective interest rate method with exception of short-term assets were the effect
would be insignificant.
Impairment of financial assets
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of that asset and the effect can be measured reliably.
The following are considered objective evidence of financial assets' impairment:
• debtor's financial difficulties
• default on contractual provisions or failure to settle debtor's debts (delays)
• restructuring
• indications that a debtor will become bankrupt and
• loss of an active market for securities as a result of the debtor's financial difficulties.
With respect to certain groups of financial assets such as trade receivables, impairment of a financial asset is assessed
separately for individual assets and group of assets. Individual assessment is made for each significant receivable of
whether there are any indications of its impairment. When there are no indications of impairment of individual receivables,
the receivable is classified into a group of receivables and impaired at the rate that reflects historical losses of the
group with similar credit risks. percentage of group impairments reflects in addition to historical losses, also changes in
macroeconomic conditions and other active factors.
Receivables of smaller values are assessed as a group of receivables with similar credit risk characteristics. These groups are
created based on similar credit risks and receivables' maturity structure. When making group impairment assessment, the
Company considers past experience regarding likely default (non-settlement), period of recovery, and the amount of losses
incurred adjusted by the management's assessment of whether due to current economic and credit conditions the actual
losses may in fact be higher or lower than those assumed based on the past experience.
Impairment losses on all financial assets other that available-for-sale financial assets, are recognised in the revaluation
surplus. When it is assessed that recovery or repayment of a receivable or a loan is no longer likely (usually after the
bankruptcy/liquidation proceedings have been completed or when statute barred), the receivables and loans are
derecognised from accounting records.
Subsequent recovery of receivables and loans in respect of which an impairment was recognised previously is recognised
in the profit or loss as other operating revenue.
When there are indications that impairment is no longer needed on financial assets at amortised cost which were
impaired in the past and these factors can be linked directly to an event occurring after the impairment was recognised,
the previously recognised impairment loss is derecognised through profit or loss up to the amortised amount of the
financial assets if the impairment was not recognised.
Derecognition of financial assets
Financial assets are derecognised if and only if the Company has no contractual obligations relating to cash flows or when
all risks and benefits of ownership of the financial assets are transferred to a third party.
Upon derecognition, total amount of the difference between the carrying amount and the sales value of the asset are
reported in the profit or loss.
FINANCIAL REPORT
2.7Inventories
Inventory measurements
Inventories are measured at the lower of initial cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Consumption of inventories during the accounting period is accounted for using the weighted average cost method.
The cost of inventories comprises the purchase price, customs duty and other levies (other than those that the Company
will be refunded in future from tax authorities), cost of transportation, loading and reloading and other costs directly
attributable to the acquisition of merchandise or materials. The purchase price is reduced by trade discounts, rebates
received and similar items.
The carrying amount of inventories sold is recognised as an expense of the period in which the relevant revenue was
accounted for.
Net realisable value of inventories
Write-off and partial write-off of damaged, expired or unusable inventories is made regularly during the financial year or
at the physical stock count when these write-offs are recognised for individual inventory items. Inventory impairment
is recognised at least annually or more often if necessary, in terms of inventory groups of goods taking into account
the inventory turnover ratio. At the end of each financial year the group impairment rates are checked and if necessary
adjusted in view of changed market conditions.
2.8 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash in transit, and bank deposits repayable on demand. The overdraft
facility on its transaction account is not considered cash or cash equivalents but rather a financial liability.
2.9Capital
Total equity of the Company is its liability to owners which falls due if the Company ceases to operate. It is determined
by the amounts invested by owners and the amounts generated in the course of operation that belong to the owners.
Equity is decreased by operating losses and payments made to the owners, and by the purchase of treasury shares. Total
equity consists of share capital, capital surplus, profit reserves, retained earnings, fair value reserve and treasury shares as a
deductible item.
2.10Liabilities
Financial liabilities are measured at amortised cost using the effective interest rate.
Operating liabilities
Liabilities are disclosed at amortised cost using the effective interest method. Short-term operating liabilities are not
discounted at the reporting date.
On initial recognition, operating liabilities are measured at amounts arising from the relevant documents which evidence
the receipt of a product or service, the work performed or costs accrued, expenses or a share in profit or loss.
Effective interest rate
The effective interest rate means reporting of a debt financial instrument at amortised costs and the systematic allocation
of interest income or expense over the entire duration of the instrument. The effective interest rate is the rate that exactly
discounts the estimated future flow of cash receipts or disbursements (inclusive of the costs of credit approval, premiums
and discounts and similar) through the expected life of the debt financial instrument to the net carrying amount of the
financial instrument upon its initial recognition
The Company does not apply the effective interest rate; instead, the costs of credit approval are allocated on a straight-line
basis to the costs over the expected repayment period of borrowings. The Management has assessed that the abovedescribed method provides a sufficient approximation of the effective interest rate and for this reason in continuation, the
expression effective interest rate is used.
Derecognition
A liability is derecognised when and only when the liability is settled, cancelled or statute barred. The difference between
the carrying amount of a financial liability and the amount of settlement received is derecognised through profit or loss.
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2.11Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Since
the time value of money is significant, the amount of provisions equals the present value of expenditure which is expected
to be required for the settlement of the obligation.
The amounts recognised as provisions are the best estimate of the expenditure required to settle obligations at the
balance sheet date, while taking into account all of the risks and uncertainties relating to an individual obligation. When
provisions are measured as an assessed cash flows required for the settlement of a present obligation, the carrying amount
is recognised as the present value of cash flows if the time value of money is significant.
When the Company expects that a part of entire obligation for which provisions were set aside will be settled by a third
party, it recognises a receivable but only when the settlement is certain and the amount of settlement can be measured
reliably.
Provisions for retirement grants and jubilee awards
Pursuant to the legislation, collective agreement and internal rules, the Company is liable to pay to its employees
anniversary bonuses and termination benefits upon retirement. For these purposes the Company sets aside relevant
amount of provisions. The Company has no other pension obligations. Due to the amendment of IAS 19 and subsequent
changes in the measurement and recognition of provisions for termination benefits and jubilee awards, actuarial gains and
losses are recognised in the other comprehensive income.
Provisions for government subsidies
The Company reports provisions for exempt contributions for employment of excess quota of disabled employees.
Provisions are used to partially cover the costs of the salaries of these disabled employees.
Current employee benefits
Current employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. The obligations are reported at the amount expected to be payable within 12 months of the period-end id
the Company has present legal or constructive obligation for employee benefits based on past work performed by an
employee and the obligation can be measured reliably (e.g. obligation for unutilised annual leave).
2.12Leases
Lease classification
Financial lease is a lease were the lessor bears majority of the risks and awards relating to the ownership of the asset. All
other leases are operating leases. Assets obtained under operating lease agreements are not recognised in the statement
of financial position.
FINANCE LEASE
On inception of lease, a finance lease is recognised in the statement of financial position as an asset and liability in the
amount equal to the lower of the fair value of leased assets or the present value of the minimum lease payments. Both
values are determined at the inception of the lease. Subsequent to initial recognition, the asset is recognised in accordance
with the accounting policies applicable to leased assets.
OPERATING LEASE
Payments made under operating leases are recognised in the profit or loss on a straight-line basis over the entire period of
the lease.
2.13 Income tax
Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date,
and any adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the financial position liability method providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The
amount of deferred tax bases on the expected way of settling the carrying amount of assets and liabilities, using tax rates
enacted at the reporting date or tax rates applicable in the period during which the tax asset or liability is expected to be
derecognised.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the deferred tax assets can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
FINANCIAL REPORT
2.14Revenue
Revenue from the sale of goods
Sales revenue from the sale of goods and products is recognised at fair value of consideration received or the relevant
amount of a receivable, less refunds, discounts, rebates for future sales and quantity discounts. Revenues are recognised
when the buyer assumes all significant risks and benefits connected to the asset’s ownership, and it is certain that
compensation and related costs will be repaid or there is a possibility of returning products, and when the group ceases to
make decisions about sold products.
Customer loyalty programme
The Company issues loyalty cards to its customers - Merkur's loyalty card. By using the Merkur loyalty card, purchases made
in all Merkur stores and shopping centres are added up bringing additional benefits to all Merkur loyalty card holders. At
the end of each accounting period, which is three months, the Merkur loyalty card holders receive a discount voucher
which may be used in the next purchase. Depending on the total amount of purchases made during the individual period,
Merkur loyalty card holders may collect a credit equal to between 2 and 5% of the total value of purchases made. Revenue
from customer loyalty programmes are allocated at the estimated fair value considering the expected redemption and the
actual redeemable date.
Revenues from the sale of services
Revenues from services rendered are recognised in profit or loss in proportion to the stage of completion of the
transaction at the reporting date. The stage of completion is assessed based on the review of work performed.
Rental income and financial lease
Rental income is recognised as revenue on a straight-line basis over the entire lease period.
Other operating revenue is revenue earned on disposal of property, plant and equipment and investment property, as an
excess of their sales value over their carrying amount and revenue from revaluation of investment property to fair value
and revenue from settlement of receivables including revenue from reversal of receivable impairment.
2.15Expenses
Operating expenses
According to their function, operating expenses are classified as costs of goods sold, selling expenses, general and
administrative expenses and other operating expenses not categorised as costs.
COSTS OF GOODS AND SERVICES SOLD
The declining levels of inventories of merchandise as a result of their sale is accounted for using the weighted average cost
prices. Cost of goods sold is reduced also by subsequently received rebates and quantity discounts approved by suppliers.
SELLING COSTS INCLUDING DEPRECIATION AND AMORTISATION
Selling costs inclusive of amortisation and depreciation comprise all costs incurred that can be contributed to the sale of
products and services. As these costs are not held in inventories they are recognised as operating expenses of the period
in which they were incurred.
COST OF GENERAL AND ADMINISTRATIVE ACTIVITIES INCLUSIVE OF AMORTISATION AND DEPRECIATION
These comprise all the costs incurred in relation to the procurement, administrative and ancillary services. They are
recognised as operating expenses of the period in which they were incurred.
COSTS BY NATURE
Costs of materials and services is measured at selling prices, stated in invoices and other documents, decreased for
discounts, granted at the time of sale or subsequently also for early payments.
Depreciation and amortisation are accounted for individually using depreciation rates that reflect useful life of individual
items of property, plant and equipment and intangible assets.
Employee benefit costs include gross amounts of salaries of employees based on collective agreement and individual
employment contracts, contributions and taxes charged against the employer, supplementary pension insurance and
other costs of labour such as pay for annual leave, transport and meal allowance and similar costs).
Other operating expenses are incurred as a result of impairment or write-off of assets and as losses from disposal of
property, plant and equipment and investment property.
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2.16 Financial income and expense
Financial income
Financial income comprises interest income on funds invested and operating receivables, dividend income, foreign
exchange gains and gains on the disposal of available-for-sale financial assets.
Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is
recognised in profit or loss on the date that the Company's right to receive payment is established, which in the case of
quoted securities is the ex-dividend date.
Financial expenses
Financial expenses comprise interest expense on borrowings, losses due to impairment and write-down of financial
assets and losses on hedging instruments that are recognised in profit or loss. All borrowing costs are recognised in profit
or loss using the effective interest method, except those that are attributable to property, plant and equipment under
construction. Foreign exchange rate gains and losses are recognised in the net amounts. Financial expenses are recognised
upon statements of accounts, irrespective of actual payments associated with them.
2.17 The use of estimates and judgements
The financial statements are prepared on the basis of estimates and judgements made by the management and which
impact the application of accounting policies as well as the reported amounts of assets, liabilities, revenue and expenses.
These estimates and judgements are checked regularly at least at the end of the financial year.
The fundamental assumptions of future events and assessment of risks as at the reporting period-end that may have a
significant impact of the carrying amounts of assets and liabilities in the next financial year are presented below.
USEFUL LIFE PERIOD OF BUILDINGS AND EQUIPMENT
The Company checks useful life periods of buildings and equipment at the end of each financial year and no changes in
these assumptions have been made in 2015.
FAIR VALUE OF PROPERTY
Property is measured at fair value determined by the valuation performed by a certified appraisal of property. Methods
and assumptions used in the valuation process are disclosed in relation to individual groups of property.
The Management believe that the valuation methods and assumptions used are appropriate and sufficient for assessment
of fair value of property.
2.18 Cash flow statement
The cash flow statement is prepared using the indirect method (Format II). Cash and cash equivalents reported in the cash
flow statement comprise cash in hand, cash on transaction accounts and deposits at banks with maturity of up to three
months.
FINANCIAL REPORT
3Notes to the balance sheet
3.1 Intangible assets
Groups of intangible assets
Item
In EUR thousand
31 December 2015
31 December 2014
Intangible assets
8
24
Software licences
8
24
Movements in intangible assets of Merkur trgovina, d.d. in 2015 and 2014
Item
In EUR thousand
Intangible assetsa
Cost at 1 January 2014
Additions
Write-off and disposals
Cost at 31 December 2014
Additions
3,970
1
-331
3,640
-447
3,192
Accumulated amortisation at 1 January 2014
3,890
Additions
Accumulated amortisation at 31 December 2014
Additions
57
-331
3,616
16
-447
3,185
Carrying amount at 1 January 2014
80
Carrying amount at 31 December 2014
24
8
The intangible assets are not pledged as security for liabilities. Furthermore, the Company has no commitments for acquisition
of intangible assets.
49
3.2 Property, plant and equipment
Nepremičnine, naprave in oprema po vrstah
In EUR thousand
Item
31 December 2015
31 December 2014
17,338
11,649
8,535
1,968
982
51
- Buildings
7,554
1,917
Plant, machinery and equipment
3,005
3,801
5
-
5,793
5,880
Land and buildings
- Land
Property, plant and equipment being acquired
Property, plant and equipment under finance lease
Movements in property, plant and equipment of Merkur trgovina, d.d. in 2015 and 2014
Item
Buildings
Other plant and
equipment
FA under
construction
Property, plant and
equipment under
finance lease
Property, plant and
equipment
In EUR thousand
Land
50
Cost at 1 January 2014
51
6,612
34,955
36
7,775
49,430
Additions
-
-
154
-
-
154
Transfer within assets
-
-
120
-
-120
0
-
-
-3,131
-36
-
-3,167
51
6,612
32,099
0
7,655
46,417
930
6,115
224
5
143
7,416
-
-14
-3,480
-
-
-3,495
982
12,712
28,842
5
7,798
50,339
Accumulated amortisation at 1 January 2014
0
4,253
30,075
0
1,591
35,919
-
442
1,227
-
237
1,906
Transfer within assets
-
-
53
-
-53
0
-
-
-3,058
-
-
-3,058
0
4,695
28,297
0
1,775
34,768
-
478
964
-
230
1,672
-
-14
-3,425
-
-
-3.439
0
5,159
25,837
0
2,005
33.001
Carrying amount at 1 January 2014
51
2,359
4,881
36
6,184
13.511
51
1,917
3,801
0
5,880
11.649
7.554
3,005
5
5,793
17,338
17.338
Additions
Carrying amount at 31 December 2015 982
FINANCIAL REPORT
Significant movements in property, plant and equipment of Merkur trgovina, d.d. in 2015
In 2015, the Company invested EUR 7,416 thousand in property, plant and equipment. The majority relates to the purchase
of real estate in the amount of EUR 7,010 thousand, the purchase of logistical equipment in the amount of EUR 165
thousand and the purchase of cars in the amount of EUR 143 thousand.
The decrease in property, plant and equipment in 2015 in the amount of EUR 55 thousand relates primarily to the sale of
cars in the amount of EUR 30 thousand and the sale and write-offs of other equipment in the amount of EUR 22 thousand.
The Company leases the shopping centre Bršljin Novo mesto under a finance lease; the contract was concluded in 2002.
The carrying amount at 31 December 2015 amounts to EUR 5,527 thousand.
In addition, a total of 16 cars are also held under finance lease; their cumulative carrying amount equals EUR 266 thousand
as at 31 December 2015.
Reservation of title
Under financial lease, the lessor holds ownerships title to the leased item until the expiration of the lease contract. Total
financial lease liabilities are reported in Note 3.11 Long-term and short-term financial lease liabilities.
Fair value of property measured under the revaluation model
As an item of fixed assets, property is measured under the revaluation model. The value of property was assessed by a
certified appraiser as at 30 September 2013 in accordance with the International Valuation Standards. The fair value of the
shopping centre was determined using the direct return capitalisation method, whereas land was assessed using the
market comparison method.
3.3 Loans issued
Groups of long-term loans granted
Item
In EUR thousand
31 December 2015
31 December 2014
Loans issued
188
271
Loans to others
188
264
-
7
Loans to related companies
Loans to others mainly relate to housing loans, which were approved to employees in accordance with the internal
regulations of Merkur – trgovina in storitve, d.d. before 2011 and were transferred to Merkur trgovina, d.d. in line with
the Financial Restructuring Plan of Merkur – trgovina in storitve, d.d. In 2015, the average interest rate on loans to others
amounted to 1.25%.
Long-term loans collateralisation
In EUR thousand
Item
31 December 2015
31 December 2014
Total
188
271
41
53
134
209
- Insurance companie
40
66
- Guarantor
95
144
No collateral
12
9
Mortgage
Other collateral
Maturity of long-term loans issued
Item
In EUR thousand
31 December 2015
31 December 2014
188
271
Maturity from 1 to 2 years
77
96
81
128
Maturity more than 5 years
30
47
Loans issued
51
52
3.4 Deferred tax assets
Deferred tax assets of Merkur trgovina, d.d.
Item
In EUR thousand
31 December 2015
31 December 2014
Net receivables
312
274
Financial assets
157
158
Provisions
83
51
Other items
72
65
3.5 Inventories
Groups of inventories
Item
In EUR thousand
31 December 2015
31 December 2014
36,942
37,772
Material
18
42
Work in progress
41
20
Products and merchandise
36,883
37,709
- goods kept in warehouses
6,622
6,164
29,783
31,022
478
524
Inventories
- goods kept in stores
- goods in transit
Surpluses or deficits identified during the stocktaking
Item
In EUR thousand
31 December 2015
31 December 2014
Merchandise - net
119
81
Surplus
335
372
Deficit
-216
-291
Movement of inventory allowances due to their adjustment to the recoverable amount in 2015 and 2014.
In EUR thousand
Item
31 December 2015
31 December 2014
1,613
780
Formation of allowance
335
1,023
Reversal of inventory impairment
-34
-168
Inventory write-off
-317
-23
1,597
1,613
Balance at 1 January
Balance at 31 December
FINANCIAL REPORT
3.6 Short-term granted loans
Groups of short-term loans granted to employees
Item
In EUR thousand
31 December 2015
31 December 2014
Short-term granted loans
85
103
Loans to others
85
103
Loans to others represent the current portion of housing loans to employees.
Short-term loans collateralisation
In EUR thousand
Item
31 December 2015
31 December 2014
Total
85
103
8
14
Other collateral
77
89
- Insurance companies
28
36
- Guarantor
49
53
Mortgage
3.7 Operating receivables and other assets
Short-term operating receivables and other assets
Item
In EUR thousand
31 December 2015
31 December 2014
18,427
19,152
651
687
15,229
14,936
1,560
1,586
Operating receivables due from others
391
1,204
Deferred costs and accrued revenue
596
739
Operating receivables and other assets
Inventory advances
Trade receivables
Operating receivables due from related parties
Movements in receivable impairments and receivables maturity are presented in Note 4.6 Financial risks
3.8 Cash and cash equivalents
Item
In EUR thousand
31 December 2015
31 December 2014
9,010
10,898
Cash on hand
254
250
Cash on accounts at banks
217
360
8,539
10,289
Demand deposits
No overdraft facilities have been agreed with the banks.
53
54
3.9 Share capital and reserves
Share capital of Merkur trgovina, d.d. amounting to EUR 11,368 thousand is represented by 11,368,274 ordinary
de-materialised no par value shares. The share capital is fully paid.
An ordinary no par value share is registered to the holder, giving the holder the right to:
• one vote at General Meetings
• proportionate amount of share in the profit earmarked for dividend payment
• proportionate share of the remaining bankruptcy or liquidation estate in the event of the Company going bankrupt
or being liquidated.
Approved capital
The Management Board is authorised to, with Supervisory Board's approval, up to five years from the Company's entry
in the court register, increase the Company's share capital by up to 50% of the share capital at the time of the Company's
registration.
The unregistered reduction in capital at 31 December 2015 amounting to EUR -1,733 thousand presents an increase in
the protected value of property.
Upon the spin-off, the unregistered decrease in capital amounted EUR -3,623 thousand and presented an increase in the
protected value of property. Pursuant to final Decision of the District Court in Kranj Ref. No. 2797/2013 of 3 November 2014,
on confirmation of repeated compulsory settlement and its attachments (hereinafter the Decision), Merkur trgovina, d.d. is
required to assume new borrowings as a consequence of the transfer of liabilities up to the amount of the protected value
of collateral in accordance with Article 221.t.2 of the ZFPPIPP. Pursuant to the aforementioned Article, the protected value
of collateral is deemed the collateral value determined in a final decision on receivable testing, increased by 20 percent.
Pursuant to Article 221.o of the ZFPPIPP, newly collateralised receivables must be completely transferred to a new spin-off
company since the assets that are subject to the collateral will also be transferred to the spin-off company.
Regarding certain assets and liabilities, the Financial Restructuring Plan of Merkur, d. d. (in its role as the transferring
company) considers the transfer of liabilities to the spin-off company Merkur trgovina, d.d. in the amount that is equal
to the value of collateral (assessed value of property pledged as collateral), rather than the equal amount increased by
20 percent since collateral relates to inventories of merchandise. The basis for the described method is the legal opinion
obtained prior to drafting the financial restructuring plan. In accordance with the financial restructuring plan, the share
capital of the spin-off company Merkur trgovina, d.d. is the difference between assets and liabilities of the spin-off
company, recognised at the assumed amount in the financial statements, which were audited by the relevant auditor as
an Appendix to the Financial restructuring plan. The Memorandum of Association of Merkur trgovina, d.d. was also an
attachment to the latter since the value of share capital was pre-determined.
Pursuant to the final decision, the aforementioned documents were approved and in addition, Merkur trgovina, d.d was
ordered to assume liabilities equal to 20 percent of the margin on the collateral which were not taken into account in the
financial statement preparation as at the spin-off date. In accordance with the Financial restructuring plan, the amount
of liabilities transferred to the new spin-off company Merkur trgovina, d.d. is understated by 20% of the value of certain
assessed assets or EUR 3,623 thousand. As a result of this transfer, the Company reports EUR 36 thousand of additional
interest per annum, while the principal is repayable under the same terms and conditions as those applied to the initial
borrowings of the spin-off company. There are no additional risks associated with these borrowings. Due to the sequence
of documents and Decision on the one hand and the fact that from the accounting point of view the spin-off company
operated retroactively from 1 October 2013 on the other, it was impossible to change the share capital amount. Neither
the Companies Act nor International Financial Reporting Standards or Interpretations address the described event and
consequently the difference was recognised as an unregistered reduction in capital to maintain the link with the actual
substance of the event.
The General Meeting of shareholders on 15 May 2015 decided that the entire distributable profit for 2014, which amounted
to EUR 1,890 thousand, would be allocated to cover the unregistered reduction in capital. Thus the unregistered decrease
in capital, which amounted EUR -3,623 thousand upon the spin-off, fell to EUR -1,733 thousand.
FINANCIAL REPORT
Profit reserves amount to EUR 487 thousand and are comprised of EUR 250 thousand of legal reserves and EUR 237
thousand of statutory reserves. Statutory reserves are created from 5% of the net profit remaining after the settlement
of potential losses, formation of legal reserves and formation of treasury shares reserves, until the amount of statutory
reserves equals maximum 20% of the share capital.
Revaluation surplus amounting to EUR 498 thousand resulted from the revaluation surplus due to the actuarial
adjustment in provisions for termination benefits on retirement, determined on the basis of re-measurement of net
liabilities as at 31 December 2015. The figure was up to EUR 385 thousand in 2015.
Retained net profit
At 31 December 2015, the Company records retained net earnings of EUR 2,626 thousand as the current profit for the year.
Appropriation of the net profit generated in 2015
Pursuant to the Companies Act (ZGD-1) and the Memorandum of Association of Merkur trgovina, d.d., the net profit of 2015
amounting to EUR 2,909 thousand is appropriated for formation of legal and statutory reserves amounting to total EUR 283
thousand. Appropriation of the remaining amount of total distributable profit of EUR 2,626 thousand will be decided by
the General Meeting of shareholders.
Identification of distributable profit
Item
In EUR thousand
2015
2014
2,909
592
2. RETAINED EARNINGS
0
1,356
a) Transfer of unappropriated retained earnings
0
1,356
3. INCREASE IN PROFIT RESERVES
283
58
a) Formation of legal reserves
145
30
b) Formation of statutory reserves
138
28
4. DISTRIBUTABLE PROFIT at 31 December
2,626
1,890
The remaining amount of unappropriated profit of 2015
2,626
1,890
1. NET PROFIT FOR THE YEAR
Proposal for appropriation of distributable profit for 2015
The General Meeting of shareholders will decide on the appropriation of the distributable profit for 2015 amounting to
EUR 2,626 thousand as proposed by the Management and the Supervisory Boards.
The Management and the Supervisory Boards of Merkur trgovina, d.d. will propose the General Meeting of shareholders
to appropriate EUR 1,733 thousand of the distributable profit for 2015 to cover the unregistered reduction in capital and to
leave EUR 893 thousand unappropriated.
3.10 Non-current borrowings
Groups of non-current borrowings
Item
Non-current borrowings
Bank borrowings
Borrowings from others
In EUR thousand
31 December 2015
31 December 2014
25,167
22,781
4,944
2,557
20,224
20,224
At 31 December 2015, the Company recorded EUR 2,386 thousand of long-term loans collateralised by real estate collateral
and EUR 22,781 thousand of long-term loans secured with pledges of movable property.
55
56
Movements in non-current borrowings of Merkur trgovina, d.d. in 2015 and 2014
Item
In EUR thousand
Bank borrowings
Borrowings from others
Balance at 31 December 2014
2,557
20,224
New loans
2,500
-
-114
-
4,944
20,224
Short-term part of long-term borrowings
Maturity of non-current borrowings
Item
In EUR thousand
31 December 2015
31 December 2014
25,167
22,781
2,619
-
7,857
6,834
Maturity more than 5 years
14,691
15,947
Borrowings
3.11 Long-term and short-term financial lease liabilities
The Company has obtained sixteen cars and one item of property (shopping centre), which is used for the performance of its activity, under
financial lease arrangements. With payment of the last financial lease instalment, which is due at the end of 2017, the property tile will be
transferred to the Company. Finance lease liabilities are collateralised with legal title to the leased asset.
Long-term and short-term financial lease liabilities
Item
In EUR thousand
31 December 2015
31 December 2014
Long-term financial lease liabilities
427
742
418
391
Total
845
1,133
Maturity of financial lease liabilities
Maturity of financial lease liabilities
In EUR thousand
31 December 2015
31 December 2014
Up to one year
418
391
From one to five years
427
742
Total
845
1,133
All financial lease liabilities of Merkur trgovina, d.d. are denominated in the euro and agreed at a variable interest
rate comprised of the EURIBOR and a margin of between 1.50% and 6.39%.
FINANCIAL REPORT
3.12 Long-term and short-term provisions
Groups of long-term provisions
Item:
In EUR thousand
31 December 2015
31 December 2014
Long-term provisions
1,680
1,888
1,680
1,888
Movements in long-term provisions of Merkur trgovina, d.d. in 2015 and 2014
In EUR thousand
Provisions for
retirement grants
and jubilee awards
Other provisions
Long-term
provisions
1,607
0
1,607
Additional formation during the year
466
68
534
Utilised during the year
-185
-
-185
-
-68
-68
1,888
0
1,888
Additional formation during the year
308
-
308
Utilised during the year
-516
-
-516
1,680
-
1,680
Item
Reversal of provisions
Provisions for termination benefits and jubilee awards are set aside using the following assumptions:
• Growth of average wages in the Republic of Slovenia is assumed to be 0.5% annually, and growth of wages in the Company is assumed at 0.01% annually, which represents the estimated long-term growth of wages.
• The calculation of liabilities from severance payments is tied to the years of pensionable service of each individual employee.
• The annual discount rate applied is 4.0%.
• Mortality tables for Slovenia 2005-2007.
The Company set aside additional provisions for severance payments to redundant workforce primarily due to the
restructuring of the sales to corporates and potential business processes rationalisation in other sectors in order to ensure
improved business efficiency, optimisation of the working process and cost efficiency; this includes rationalisation of
employee benefit costs.
Groups of short-term provisions
Item:
In EUR thousand
31 December 2015
31 December 2014
Short-term provisions
448
419
Provisions for annual leave entitlement not utilised
448
419
Short-term provisions include amounts set aside for liabilities to employees for annual leave entitlement not utilised.
57
58
3.13 Financial liabilities
Groups of short-term financial liabilities
Item:
In EUR thousand
31 December 2015
31 December 2014
1,050
1,224
Short-term financial liabilities to others
937
1,224
Short-term loans from banks
113
-
Total amount of short-term financial liabilities to others refers to sold but so far not redeemed gift cards and vouchers
which are neither interest-bearing nor collateralised. The amount of EUR 113 thousand represents the short-term portion
of the loan provided by Gorenjska banka, which is collateralised by a real estate lien.
3.14 Trade and other payables
Short-term trade and other liabilities
Item
In EUR thousand
31 December 2015
31 December 2014
39,440
42,326
459
411
28,327
31,845
Operating liabilities to group companies
4,329
3,860
Operating liabilities to others
6,325
6,211
- Liabilities for salaries
2,097
2,006
- Payables to the state institutions
1,808
2,424
- Interest payable
97
304
- Liabilities for assignment of receivables
23
1
- Accrued costs
2,237
1,090
- Other liabilities
62
386
Trade and other payables
Short-term operating liabilities from advances
Supplier payables
FINANCIAL REPORT
4Notes to the income statement
4.1 Net sales revenues
Net sales revenues
Item
In EUR thousand
2015
2014
Net sales revenues by categories
205,159
208,948
Revenues from the sale of goods and products
202,258
205,561
2,647
2,629
254
758
Revenues from the sale of services
Rental income
Of the revenue of EUR 205,159 thousand (2014: 208,948) generated by Merkur trgovina, d.d. EUR 177,560 thousand (2014:
175,543) was earned in retail, of that EUR 117,726 thousand (2014: 117,879) was earned on sales to final consumers, and
EUR 59,834 thousand (2014: 57,663) was earned on sales to wholesale customers in retail. The remaining revenue from
wholesale and exports amounts to EUR 27,599 thousand (2014: 33,405). Of the total of EUR 87,433 thousand (2014: 91,068)
of revenue generated on wholesale sales, EUR 12,956 thousand (2014: 14,531) of revenue was generated with the 20 largest
customers.
Revenue from the sale of goods has been reduced by discounts granted to customers, holders of Merkur loyalty cards.
In total, EUR 864 thousand was granted to customers as discounts on account of purchases made by Merkur loyalty card
holders (2014: EUR 942 thousand), accounting for 0.7% of total retail sales to natural entities in the year under review. On
account of credits to holders of Merkur loyalty cards relating to purchases made in the last quarter of 2015 and who will
be able to claim these discounts until the end of April 2016, the Company deferred revenue in the estimated amount of
redeemable credits amounting to EUR 248 thousand (2014: EUR 255 thousand).
Rental income is earned from lease of parts of property which are leased as the entire location such as shopping centres
and the shops within the centres.
4.2 Other operating revenue
In EUR thousand
Item
2015
2014
994
681
Financial revenue from receivables
295
181
88
58
161
109
Revenue from utilisation and reversal of long-term provisions
350
68
Reversal of inventory impairments
34
168
Revenue from disputed receivables - recovered
25
25
Revenue from government grants
42
72
Gains on disposal of property, plant and equipment
59
60
4.3 Costs by nature
Costs by nature
Item
In EUR thousand
2015
2014
55,096
54,108
3,009
3,106
1,673
1,747
- Costs of fuel
812
841
- Other costs of materials
524
518
20,675
20,055
- Costs of deliveries to customers and other transportation costs
3,558
3,723
- Costs of rent
7,412
5,978
- Costs of investment and regular maintenance
2,070
2,838
- Costs of advertising, promotion and trade fairs
2,155
2,111
- Costs of banking and insurance services
1,745
1,605
- Costs of utility services and water charges
794
817
2,941
2,983
28,242
28,214
19,949
19,969
- Pension and other insurance costs
3,229
3,370
- Costs of meal and travel allowance
3,442
3,483
- Other labour costs
1,623
1,392
Depreciation and amortisation costs
1,688
1,964
1,672
1,906
16
57
Long-term provisions
592
510
Other operating costs
889
259
Costs by nature
Costs of materials consumed
- Electricity used
Costs of services
- Cost of other services
Employee benefits
- Payroll costs
- Depreciation of property, plant and equipment
- Amortisation of intangible assets
4.4 Other operating expenses
In EUR thousand
Item
2015
2014
993
1,469
Trade receivables impairment and write-off
627
424
Inventory write-off to their net realisable value
335
1,023
Write-off and loss from disposal of property, plant and equipment
17
2
14
20
FINANCIAL REPORT
4.5 Financial income and expense
Financial income
Item
In EUR thousand
2015
2014
Financial income
690
534
Interest income
234
425
Exchange rate gains
199
88
13
7
244
15
- Financial revenue from recovery of interest receivable
-
-
- Reversal of debt impairments
3
1
241
14
Reversal of interest receivable impairment
Other financial income, of which:
- Other financial income
Financial expenses
Item
In EUR thousand
2015
2014
Financial expenses
523
738
Interest expense
331
432
Interest receivable impairment and write-off
28
201
Exchange rate losses
81
34
Impairment of loans
1
-
81
71
Other financial expenses
4.6 Financial risks
Due to uncertainties and constant changes in the financial environment, active financial risk management is an integral
part of the overall strategy of Merkur trgovina as it impacts the Company's competitive position, cost control, anticipated
cash flows, supplier confidence, the profit and thus also the Company's market value. The Company mostly focusses on
credit and liquidity risk management and, to a lesser extent, also on interest rate and currency risks.
Credit risk
Credit risk is the risk that trade receivables and those due from other business partners resulting from deferred payments
will either be paid with delay, will only be paid partly or will not be paid at all.
The Company follows its established policy of active credit risk management which involves receivable collateralisation,
balance sheet analysis of business partners, regular monitoring of open receivable positions, limiting exposure to individual
customers through introduction of a system of limits, granting benefits on advance payments, charging default interest on
delayed payments and active policy of receivables recovery.
The Company's credit risk exposure arises on the sale of goods and services based on agreed deferred payment with
entities in the wholesale or in shopping centres. In accordance with the adopted accounting policy, the Company
recognises bad debt allowance if risk of non-payment is identified.
The primary credit rating risk classification in the Company is static and is revised at least annually on compilation of
financial statements while depending on the customer's size and current events and circumstances, the revision may be
carried our more often. In addition, and depending on the importance of individual business partners, an additional risk
assessment may be obtained, including recommendation regarding the set limit, from an independent, external provider.
Secondary credit risk classification of customers is based on current liquidity position, which is updated daily through
monitoring of transaction account blockades and current outstanding amount of receivables compared
to the approved limit.
61
62
Credit risk arises above all in relation to sale and is partly transferred to an insurance company were trade receivables
are insured. The insurance cover limit is determined using pre-set criteria were business partners are mostly insured
automatically; were the criteria set is fulfilled only partly, or in cases of significant limits, insurance policy is agreed
additionally in communication with the insurance company. Failure to fulfil criteria means that credit exposure is not
hedged. Automatic approval of limits is checked regularly at least at the end of the financial year, whereas potential
transaction account blockades and receivable maturity are monitored daily. Sales to a customer are suspended when
one of the following conditions are met: the set limit is exceeded, receivables maturity in excess of 30 days, blockade of
a customer's transaction account or another external information indicating that a debtor is facing significant financial
difficulties. Any deviations from these conditions may only be approved by the Management Board in accordance with
their financial and trade authorisations. The impact of receivable hedging is increased customer dispersion, faster and
more efficient receivable recovery and thus lower share of due and outstanding receivables as well as reduced bad debt
allowances.
As at 31 December 2015, 84% of short-term trade receivables are insured with the insurance company, collateralised with
mortgages or the option of immediate offsetting of receivables and liabilities exists.
Liquidity risk
Liquidity risk is the risk of the Company not having sufficient liquid assets at any given moment to settle its current liabilities
or to maintain normal business operations.
The Company successfully manages liquidity risk. More than half of the total revenue is generated on sales to individuals
were payment is made in cash or with payment cards, which ensures regular daily inflows and mitigates liquidity. The
Company manages its liquidity risk by following its adopted active liquidity risk management policy through efficient
balancing of cash inflows and outflows. The liquidity risk management policy comprises:
• precisely defined cash flow management process; identification of known, expected and potential cash outflows
on the one hand and ensuring the Company has sufficient cash flows on the other (trade receivable recovery, creating good quality receivables with fast turnover and similar), by closely monitoring any major fluctuations to speed-up
the response time,
• monitoring changes in the environment that may impact the Company's liquidity needs,
• high dispersal of external sources of funds,
• high dispersal of liabilities maturity,
• credit risk management policy that ensures highly reliable forecast of cash flows,
• sales to final customers as this facilitates current liquidity management and balancing,
• efficient cost control at all levels.
Interest rate risk
The Company's exposure to changes in interest rates mainly derives from adverse fluctuation of the EURIBOR variable
interest rate. The Company is not significantly exposed to the currency risk mainly due to the fact that only a small part of
its liabilities are linked to a variable interest rate (the EURIBOR).
Pursuant to the Financial restructuring plan of repeated compulsory settlement of Merkur - trgovina in storitve, d.d.
instigated in early 2014, the Company signed a long-term debt restructuring programme for all financial liabilities due to
debtors, which were transferred to Merkur trgovina. These borrowings are all agreed at a fixed rate of interest of 1%.
Thus only 12% of the Company's liabilities are linked to a variable interest rate and therefore the Company is not
significantly exposed to the interest rate risk.
Currency risk
Currency risk is the risk of changes in the value of assets due to foreign exchange rate fluctuations.
Currency exposure of Merkur trgovina arises exclusively from import transactions which are denominated in US$. Currency
risk arises as the risk of appreciation in foreign currency over the time from the transaction being agreed to the actual
payment, as this would result in a significant increase in the price of imported goods or, in the event of a major change in
the exchange rate, result in the agreed transaction becoming uneconomic. Since the Company is restricted in the use of
internal methods of hedging currency risk, in the event of major purchases in foreign currency, the Company opts for one
of the external currency risk hedging methods available.
Merkur trgovina mostly deals in the euro and therefore its exposure to currency risk has been assessed as low.
FINANCIAL REPORT
Credit risk
The following table shows the Company's maximum exposure to credit risk in 2015 and 2014, were the concentration is
expressed in percentage of exposure to 10 largest business partners.
The Company's maximum exposure to credit risk in 2015 and 2014
Net 31 December
2015
Gross 31
December 2015
Adjustments 31
December 2015
Concentration*
31 December
2015
Net 31 December
2014
Gross 31
December 2014
Adjustments 31
December 2014
Concentration*
31 December
2014
In EUR thousand
272
319
47
48%
375
439
65
48%
17,440
39,816
22,376
19%
17,210
39,943
22,733
21%
- of which due from related
parties
1,560
22,523
20,962
100%
1,586
22,615
21,028
100%
Receivables due from others
987
1,049
62
73%
2,107
2,613
506
46%
Cash equivalents redeemable
on demand
8,539
8,539
0
100%
10,289
10,289
0
100%
27,239
49,724
22,485
29,980
53,284
23,304
Item
Loans issued
Trade receivables
Total
*concentration relates to the Company's exposure to the 10 largest customers/borrowers
Hedged credit risk
At 31 December 2015, EUR 13,428 thousand of trade receivables are insured with the insurance company, collateralised with
mortgages or the option of immediate offsetting of receivables and liabilities exists.
Trade receivables
Receivable allowances are recognised based on historical data of due and outstanding receivables and disputed
receivables as follows:
• individually in respect of 25 largest customers,
• bad debt allowance of total amount of receivables is recognised for receivables due and outstanding
in excess of 180 days and
• bad debt allowance of total amount is also recognised for disputed receivables; however, if there is objective evidence
of repayment or if the receivable is hedged, the allowance may be reduced accordingly.
Maturity of trade receivables of Merkur trgovina, d.d. in 2015 and 2014
In EUR thousand
Gross value 31
December 2015
Impairment 31
December 2015
Gross value 31
December 2014
Impairment 31
December 2014
11,966
-
11,565
58
3,021
1
3,184
36
Due and outstanding 31 - 180 days
896
109
2,522
313
194
145
2,294
2,132
More than 12 months
23,739
22,121
20,378
20,194
Total
39,816
22,376
39,943
22,733
Item
Not matured
63
64
Maturity of receivables due from others of Merkur trgovina, d.d. in 2015 and 2014
In EUR thousand
Gross value 31
December 2015
Impairment 31
December 2015
Gross value 31
December 2014
Impairment 31
December 2014
751
-
1,887
0
12
-
71
0
12
1
21
0
5
5
12
0
269
56
622
506
1,049
62
2,613
506
Item
Not matured
More than 12 months
Total
Customer classification by risk groups regarding potential for their insolvency
Share of
partners at 31
December 2015
Share of
receivables at 31
December 2014
Share of
partners at 31
December 2014
Share of
partners at 31
December 2014
Above-average risk
24%
32%
30%
35%
Average risk
41%
21%
38%
21%
Below-average risk
35%
47%
32%
44%
100%
100%
100%
100%
Share of receivables at 31 Dec 2015
Total
Classification to individual risk groups is based on the credit rating of individual customers.
Movements in bad debt allowance due to trade receivable impairment
of Merkur trgovina, d.d. in 2015 and 2014
Item
In EUR thousand
2015
2014
23,239
22,881
-1,162
-75
Impairments
655
625
- impairment of operating receivables
627
424
28
201
Impairment reversal
-308
-188
- Reversal of operating receivable impairment
295
-181
- Reversal of interest receivable impairment
-13
-7
Allowances transfer within assets
14
-
22,438
23,239
Final write-off
- impairment of interest receivable
FINANCIAL REPORT
Movements in bad debt allowance due to loans issued impairment
of Merkur trgovina, d.d. in 2015 and 2014
In EUR thousand
Item
2015
2014
65
62
Final write-off
-2
-
Impairments
1
-
Impairment reversal
-3
-1
Allowances transfer within assets
-14
3
47
65
Liquidity risk
Below is an illustration of the contractually agreed maturity of financial assets and liabilities including assessed interest
without the effect of offsetting agreements.
Contractual maturity of non-derivative financial assets and liabilities of Merkur trgovina, d.d. in 2015
Carrying
amount
Contractual
cash flows
6 months or
less
6-12 months
1-2 years
2-5 years
More than
5 years
In EUR thousand
-
-
-
-
-
-
-
272
282
45
44
70
92
30
15,880
15,880
15,880
-
-
-
-
2,548
2,548
2,548
-
-
-
-
8,539
8,539
8,539
-
-
-
-
27,239
27,248
27,012
44
70
92
30
-26,218
-28,088
-1,096
-274
-2,923
-8,586
-15,209
-845
-866
-214
-214
-374
-64
-
Supplier payables
-28,327
-28,327
-28,327
-
-
-
-
Liabilities to others
-11,114
-11,114
-11,114
-
-
-
-
Total non-derivative financial liabilities
-66,503
67,528
-40,536
-274
-2,923
-8,586
-15,209
Net at 31 December 2015
-39,264
-40,280
-13,524
-230
-2,853
-8,494
-15,179
Item
Non-derivative financial assets
Long-term investments
Loans issued
Trade receivables
Total non-derivative financial assets
Non-derivative financial liabilities
Borrowings
The table is based on undiscounted cash flows in accordance with contractual terms and conditions including interest
rates that govern settlement of liabilities or redemption of assets.
65
Contractual maturity of non-derivative financial assets and liabilities of Merkur trgovina, d.d. in 2014
Contractual
cash flows
6 months or
less
6-12 months
1-2 years
2-5 years
More than
5 years
In EUR thousand
Carrying
amount
66
12
12
12
-
-
-
-
375
404
64
56
94
140
50
15,623
15,623
15,623
-
-
-
-
3,693
3,693
3,693
-
-
-
-
10,289
-
-
-
-
-
-
Total non-derivative financial assets
29,992
19,732
19,392
56
94
140
50
-24,005
-25,628
-1,338
-114
-228
-4,972
-18,976
-1,133
-1,153
-201
-201
-403
-348
-
Supplier payables
-31,845
-31,845
-31,845
-
-
-
-
Liabilities to others
-10,482
-10,482
-10,482
-
-
-
-
Total non-derivative financial liabilities
-67,464
-69,108
-43,866
-315
-631
-5,320
-18,976
Net at 31 December 2014
-37,472
-49,376
-24,474
-259
-537
-5,180
-18,926
Neto na dan 31. 12. 2014
-37.472
-49.376
-24.474
-259
-537
-5.180
-18.926
Item
Non-derivative financial assets
Long-term investments
Loans issued
Trade receivables
Non-derivative financial liabilities
Borrowings
The table is based on undiscounted cash flows in accordance with contractual terms and conditions including interest
rates that govern settlement of liabilities or redemption of assets.
Currency risk
The Company's exposure to currency risk in 2015 (nominal amounts)
Thousand units
Item
EUR
USD
Trade receivables
16,834
619
Borrowings
-26,218
-
-845
-
-32,812
152
-43,040
771
Assets and liabilities at 31 December 2015
Supplier payables
Currency exposure of the statement of financial position items
FINANCIAL REPORT
The Company's exposure to currency risk in 2014 (nominal amounts)
Thousand units
Item
EUR
USD
16,745
486
-24,005
-
-1,133
-
-35,734
28
-44,127
514
Assets and liabilities at 31 December 2014
Trade receivables
Borrowings
Supplier payables
Currency exposure of the statement of financial position items
Sensitivity analysis
Merkur trgovina mostly deals in the euro and therefore its exposure to currency risk has been assessed as insignificant.
10-percent appreciation in euro against the following currencies as at 31 December would increase (decrease) profit or loss
by the amounts stated below, providing all other variables (in particular interest rates) remain constant.
In EUR thousand
Item
31 December 2015
31 December 2014
USD
-70
-52
Total impact on profit or loss
-70
-52
Interest rate risk
Characteristics of interest rates on interest-bearing financial instruments of Merkur trgovina, d.d.
In EUR thousand
Carrying amount
2015
Carrying amount
2014
-23,718
-24,005
-
-
-23,718
-24,005
Instruments with variable rate of interest
-3,073
-758
272
375
-3,345
-1,133
Item
Instruments with fixed rate of interest
Financial assets
Financial assets
Sensitivity analysis of fair value of financial instruments of Merkur trgovina, d.d.
Since the Company's financial assets at fixed rate of interest are not reported at fair value through profit or loss, a change in
interest rates as at the reporting date would have no impact on the profit or loss.
A change in variable interest rates of financial instruments by 100 base points would either increase or decrease capital and
profit or loss by the following amounts. The 2014 sensitivity analysis was made using the same assumptions, were all other
variables (in particular foreign exchange rates) remain constant.
67
68
In EUR thousand
Impact on profit or loss
+100 b.p.
-100 b.p.
Instruments with variable rate of interest at 31 December 2015
-33
33
Cash flow sensitivity (net)
-33
33
Instruments with variable rate of interest at 31 December 2014
-11
11
Cash flow sensitivity (net)
-11
11
Fair value
Assessed fair value of assets and liabilities and their carrying amounts reported in the statement of financial position:
In EUR thousand
Item
Deposits at banks
Loans issued
Trade receivables
Supplier payables
Carrying amount
value
31 December 2015
Carrying amount
Fair value
value
31 December 2015 31 December 2014
Fair value
31 December 2014
17,338
17,338
11,649
11,649
0
0
12
12
273
273
374
374
17,440
17,440
17,210
17,210
987
987
2,107
2,107
9,010
9,010
10,898
10,898
-26,217
-26,217
-24,005
-24,005
-845
-845
-1,133
-1,133
-32,656
-32,656
-35,705
-35,705
In terms of their fair value determination, all the assets and liabilities fall into level 3 fair value hierarchy. Level 3 category
means that all values are based on valuation models were input data is not based on market prices.
FINANCIAL REPORT
4.7 Income tax
Income tax
Item
In EUR thousand
31 December 2015
31 December 2014
Income tax payable
-616
-199
Deferred tax assets
38
274
-578
76
Total tax recognised in profit or loss
Effective tax rate of Merkur trgovina, d.d.
In EUR thousand
Item
2015
2014
Profit or loss before tax
3,487
516
Expense not recognised for tax purposes
1,244
1,383
Tax-exempt revenue
-269
-125
Other adjustments in the tax base
-539
-185
Tax relief
-300
-421
Tax base
3,623
1,169
616
199
Income tax
Tax payable comprises current amounts of corporate income tax and deferred tax. Income tax expense is recognised in
profit or loss except to the extent that it relates to items recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date,
and any adjustment to tax payable in respect of previous financial years.
Deferred tax is recognised using the financial position liability method providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The
amount of deferred tax is based on the expected way of settling the carrying amount of assets and liabilities, using tax
rates enacted at the reporting date or tax rates applicable in the period during which the tax asset or liability is expected to
be derecognised.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the deferred tax assets can be utilised.
In 2015 deferred tax assets were recognised on account of the following:
• Differences between amortisation and depreciation for business and tax purposes,
• Formation of receivable allowances and
• Provisions formation.
69
5Other notes
5.1 Related parties
The Company classifies its related parties into three separate groups:
• Controlling company,
• Related companies and
• Members of the Management and Supervisory Boards and the employees with individual contracts of employment.
The controlling company Merkur, d. d. – v stečaju; related companies are all other entities in any kind of equity relationship
with the controlling company. Business transactions between the Company and its controlling entity are mostly the
consequence of a recourse relating to settlement of receivables and liabilities that arose over the period from the date of
the accounting spin-off effected on 1 October 2013 until the legal and formal business spin-off of the healthy business
core (Merkur trgovina, d.d.) after the confirmation of the repeated compulsory settlement on 13 November 2014.
Business transactions between the Company and its related companies mainly refer to purchases and sales of
merchandise, products and services. As related parties, the companies transacted pursuant to the relevant sales
agreements concluded. In such transactions, market prices of merchandise, products and services were consistently
applied.
Transactions of Merkur trgovina, d.d. with related companies
Liabilities
Interest
charged
Interest
received
Receivables
In EUR thousand
Services used
Services
rendered
Purchases of
goods
Item
Sales of goods
70
2015
Total due by Merkur trgovina,
d.d. to its controlling entity
-
-
26
-
-
-
1,411
-
d.d. to its related parties
687
16,901
402
328
4
3
150
4,327
d.d. to its controlling entity
-
-
-
801
-
-
1,412
-
d.d. to its related parties
1,478
20,107
782
530
186
63
175
3,860
2014
FINANCIAL REPORT
Transactions of Merkur trgovina, d.d. with members of the Management and Supervisory Boards and
with employees with individual contracts of employment
At 31 December 2015, no members of the Management Board of Merkur trgovina, d.d., their close family members, and no
members of the Supervisory Board owned shares in Merkur trgovina, d.d.
Gross remuneration
In EUR thousand
Recipient
Number
of members
Blaž Pesjak
(12 months)
149
10
160
80
Anita Valjavec
(12 months)
90
3
93
50
Marjan Smrekar
(12 months)
57
4
61
35
3
296
18
314
165
Bojan Papič
(12 months)
-
20
20
15
Marko Ninčević
(12 months)
-
14
14
11
Klemen Boštjančič
(12 months)
-
14
14
10
Jure Fišer
(12 months)
-
14
14
10
Ana Hochkraut
(12 months)
-
13
13
10
Peter Fratnik
(12 months)
-
13
13
10
6
0
89
89
65
Employees on individual contracts
of employment
67
2,373
298
2,672
1,666
Total
76
2,669
406
3,074
1,896
Management Board of Merkur trgovina, d.d.
Supervisory Board of Merkur trgovina, d.d.
Fixed
remuneration
Other
remuneration
Total gross
remuneration
Total net
remuneration
Although the members of the Supervisory Board were appointed by the creditor committees (shareholder representatives)
and the workers' council (employee representatives) in 2014, they had received no remuneration as at 31 December 2014.
Remuneration for the 2014 period was paid in 2015 and is also included in the table above.
Merkur trgovina, d.d. has no receivables or liabilities due to related natural persons.
5.2 Transactions of Merkur trgovina, d.d. with the controlling company Merkur, d. d. – v stečaju in
accordance with Article 545 of the Companies Act (ZGD-1)
In 2015, at the initiative of the controlling entity Merkur, d. d. - v stečaju or at the initiative of related parties, the Company
did not take or omit any action which would result in any damages arising to Merkur trgovina, d.d.
5.3 Indication of legal actions in which Merkur trgovina, d.d. is the defendant
Merkur trgovina, d.d., Naklo is the defendant in two major cases (were the value at dispute exceeds EUR 100 thousand).
Based on the response to the action filed, the Management Board believes the likelihood of a negative outcome for
Merkur trgovina, d.d. is low, and as such the Company has not recognised any provisions in this respect.
5.4 Guarantee for Merkur nepremičnine, d.d.
In the past (in 2010), Merkur, trgovina in storitve, d. d., took out a syndicated loan collateralised with mortgages, the transfer
of receivables pursuant to payment card agreements and bills of exchange.
The financial restructuring plan envisaged the company Merkur trgovina, d.d. continuing the company's trading activities,
while the company Merkur nepremičnine, d.d. was to manage the real estate.
In accordance with the spin-off, the syndicated loan was transferred to the spun-out company Merkur nepremičnine, d.d.,
since the real estate provided as collateral were also transferred to Merkur nepremičnine, d.d. Retail activities, and thus
also payment card transactions, are carried out by Merkur trgovina, d.d. Even after the spin-off, the collateral for the loan
remains unchanged. Most (two thirds) of this loan has been converted into equity of Merkur nepremičnine, d.d. by the
crediting banks.
71
72
5.5 Overview of the audit costs of Merkur trgovina, d.d.
The Company is subject to audit according to Article 57 of the Companies Act (ZGD-1). Deloitte revizija, d.o.o. was engaged
to audit the financial statements and annual report for the 2015 financial year. The contractual amount is EUR 16,800.
6Subsequent events
There were no subsequent events which impacted the financial statements or would require additional disclosure in the
Annual Report.
FINANCIAL REPORT
Management's Statement
With this statement we affirm our responsibility for the preparation and fair presentation of these financial statements
and the notes thereto in accordance with the applicable legislation and the International Financial Reporting Standards, as
adopted by the EU Slovene accounting standards. This responsibility includes:
• keeping the books of account,
• designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error,
• selecting and applying appropriate accounting policies, and
• making accounting estimates that are reasonable in the circumstances.
According to all information available to it, the Management Board affirms that the relevant accounting policies were
consistently applied in drafting the financial statements, that accounting estimates have been made in accordance with
the principle of prudence and good management, and that the financial statements give a true and fair view in all material
respects of the financial position of Merkur trgovina, d.d. and of its financial performance for 2015.
The Management Board has taken all relevant measures aimed at securing the funds and other assets.
The Chairman and Members of the Management Board of Merkur trgovina, d.d. are familiar with the contents of the
Annual Report of Merkur trgovina, d.d. We agree with the Annual Report and confirm this with our signatures below.
Naklo, 25 February 2016
Blaž Pesjak,
Anita Valjavec,
Member of the Board
Marjan Smrekar,
Member of the Board
Employee Director
73
74
Auditor's Report
FINANCIAL REPORT
75
A lot of hard work is needed
before the first drop of success appears.
Company Profile
MERKUR trgovina, d.d.
Cesta na Okroglo 7, 4202 Naklo
Entry in the companies’ register: Kranj District Court - registration no. 2014/49217
Share capital: EUR 11,368,274
Company number: 6723128000
Tax number: SI76138437
Basic activity classification: G/47.520
Tel: +386 (0)4 258 80 00
Fax: +386 (0)4 258 88 05
E-mail: [email protected]
Website: www.merkur.si
Transaction accounts:
Gorenjska banka, d. d., Kranj: SI56 0700 0000 2337 596 NLB, d. d., Ljubljana: SI56 0292 8026 1147 951
Abanka Vipa, d. d., Ljubljana: SI56 0510 0801 3934 915 Management Board of Merkur trgovina, d.d.:
Blaž Pesjak, Chairman of the Board
Anita Valjavec, Member of the Board
Marjan Smrekar, Member of the Board – employee representative
Supervisory Board of Merkur trgovina, d.d.:
Shareholder representatives:
Bojan Papič, Chairman of the Supervisory Board
Marko Ninčević, Deputy Chairman
Klemen Boštjančič, Member
Jure Fišer, Member
Employee representatives:
mag. Ana Hochkraut, Member
Peter Fratnik, Member
Annual Report of Merkur trgovina, d.d. for 2015
Issued by Merkur trgovina, d.d., Cesta na Okroglo 7, 4202 Naklo
Concept BPCS; arnoldvuga+
Design and pre-press Merkur trgovina, d.d., Marketing
Text Merkur trgovina, d.d.
Photos Matevž Paternoster, Tomo Jeseničnik
June 2016
www.merkur.si

Annual Report 2015

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