2013 Annual Report

Transcription

2013 Annual Report

The peak of excellence
Annual Report 2013
Žito d.d
Introduction
1 Introduction
1
2
3
4
5
6
4
1 BASIC INFORMATION ABOUT THE COMPANY
AND THE GROUP
5
2013 PERFORMANCE HIGHLIGHTS
6
EVENTS FOLLOWING THE BALANCE SHEET DATE 13
INTRODUCTION BY THE PRESIDENT OF THE MANAGEMENT BOARD
14
REPORT OF THE SUPERVISORY BOARD
15
MANAGEMENT AND GOVERNANCE
20
6.1 Bodies responsible for corporate governance 20
6.2 Corporate governance
24
6.2.1 Statement of compliance with the Corporate
24
Governance Code
6.2.2 F igures under the sixth paragraph of Article 70 of the
Companies Act
28
6.2.3 Information on the functioning of the general
meeting
30
6.3 Statement of management responsibility
2 Management report
7 ABOUT THE ŽITO GROUP
8 SHARES AND OWNERSHIP STRUCTURE
9 OPERATIONAL FRAMEWORK 9.1 Macroeconomic environment in 2013 and
expectations in 2014
9.2 Development strategy
10 RISK MANAGEMENT
10.1 Operational risk
10.2 Financial risk
10.3 Strategic map of risk
11 ANALYSIS OF BUSINESS PERFORMANCE
11.1 Business operations
31
32
33
37
41
41
42
44
46
50
50
52
52
11.2 Equity and liabilities
11.3 Performance indicators and ratios
12 SALES AND MARKETING
12.1 Sales by sales area
12.2 Sales by Sales Pillars
12.3 Sales by Distribution Channels
13 PRODUCT SUPPLY
14INVESTMENTS
15 QUALITY CONTROL SYSTEM
16 PLANS FOR 2014
3 Sustainable development
55
57
60
60
63
67
69
71
72
73
75
76
79
79
17EMPLOYEES
18 SOCIAL ENVIRONMENT
18.1 Public relations
18.2 Social responsibility and sustainable development81
18.3 Sponsorships
83
19 ENVIRONMENTAL PROTECTION
84
4 Financial report
20 FINANCIAL STATEMENTS
21 INFORMATION ABOUT THE COMPANY
22 SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
23 NOTES TO FINANCIAL STATEMENTS
24 AUDITOR’S REPORT
25ADRESSES
86
87
101
102
121
173
176
1
Annual report 2013 / Introduction/
Introduction /44
1INTRODUCTION
1
Annual report 2013 / Introduction / 5
1 1 BASIC INFORMATION ABOUT THE COMPANY
AND THE GROUP
The controlling company of the Žito Group is Žito, prehrambena industrija d.d.
Abbreviated name: Žito d.d.
Registered office:
Šmartinska c. 154, 1529 Ljubljana
tel. št.: (01) 5876 100
faks: (01) 5245 200
e-mail: [email protected]
Website: www.zito.si
Registration number: 5391814
VAT number SI 81177879
Number and date of entry in court register: Srg 98/05123, 30 September 1998
Initial capital: 14.846.937 EUR
Number of shares as of 31 Dec 2013: 355,792 no par-value shares
Listing of shares and ticker symbol: Ljubljana Stock Exchange, official market, ZTOG
President of the Management Board: Other members of the management board: Janez Bojc
Peter Rajačič, Erik Žunič, Sandi Svoljšak
President of the Supervisory Board: Deputy president of the Supervisory Board: Members of the Supervisory Board: Tomi Rumpf
Maja Makovec Brenčič
Adrijan Rožič, Milan Kneževič, Suzana Šimenc, Zenon Marn
Principal lines of business: production of bakery, confectionery and milled products, frozen foods, candy,
chewing gums, chocolate, biscuits, pasta, spices, teas, rice and retail
As well as the controlling company, Žito d.d., the Žito Group (hereinafter also referred to as the Group) consists of affiliated companies
in Slovenia and abroad. The organisation and activity of individual companies in the Žito Group are described in greater detail in
Chapter 7.
1
2 2013 PERFORMANCE HIGHLIGHTS
In 2013, the Žito Group faced challenging economic and market
conditions, as well as a fall in purchasing power in Slovenia. GDP
fell by 1.6 per cent and consumer spending fell by 3.5 per cent.
Negative consumption trends were noticed in most export markets. We generated EUR 110.9 million in net sales revenue, EUR
3.1 million operating profit and EUR 2.2 million net profit.
Compared to 2012, sales revenue declined by 0.3%, operating
profit increased by 50.6 % and net profit by 464.9 %.
If revenue from real property purchase in 2012 is considered,
operating profit in 2013 fell by 42.7% in 2013 in comparison to
2012.
Key performance indicators improved, including return on revenue, capital and assets, added value and EBITDA margin.
In October 2013, Žito d.d. purchased 32,533 own shares at EUR
57.00 per share via its subsidiary Šumi nepremičnine d.o.o., fully
owned by Žito d.d. With 3,046 own shares already owned by the
parent company, the acquired own shares represented 10% of
all issued shares.
By signing an agreement on the sale of shares of Žito d.d. in October 2013, the sale of Žito d.d. began. A sales consortium including Modra zavarovalnica d.d., Slovenska odškodninska družba,
d.d., KD Kapital, finančna družba, d.o.o., KD Skladi, družba za
upravljanje d.o.o. and Adriatic Slovenica, d.d., was formed. The
shareholders of Žito d.d. in this sales consortium own 50.7% of
company's share capital. The sales procedure will be implemented with the assistance of a financial consultant.
1
Key data on the operations of the Žito Group and company Žito d.d. in 2013 and 2012
in EUR
Net sales revenue
Žito Group
Žito d.d.
2013
2012
Index
2013
2012
Index
110.860.622
111.173.210
99,7
103.725.655
103.329.181
100,4
Operating profit before amortisation (EBITDA)
Revenue from revaluation of real property not considered
8.798.88
7.606.499
115,7
7.642.762
7.126.967
107,2
Revenue from revaluation of real property considered*
8.798.88
10.986.164
80,1
7.642.762
10.506.633
72,7
3.128.298
2.077.625
150,6
3.109.142
2.311.035
134,5
3.128.298
5.457.291
57,3
3.109.142
5.690.700
54,6
Net profit for the financial year
2.200.313
389.495
564,9
2.496.344
749.848
332,9
Net earnings of the majority owner
2.200.632
390.801
563,1
-
-
-
Assets
117.520.759
120.486.241
97,5
120.477.458
120.868.445
99,7
Equity capital
70.222.776
69.151.746
101,5
73.958.279
71.506.944
103,4
Financial liabilities
22.115.321
27.252.084
81,2
23.536.312
29.119.843
80,8
Return on sales (ROS)
1,98 %
0,35 %
566,5
2,41 %
0,73 %
331,6
Return on equity (ROE)
3,16 %
0,56 %
562,6
3,43 %
1,05 %
327,7
Return on assets (ROA)
1,85 %
0,32 %
575,8
2,07 %
0,62 %
334,6
34.811.850
32.670.471
106,6
27.456.686
26.134.512
105,1
34.811.850
36.050.136
96,6
27.456.686
29.514.177
93,0
Earnings before interest and taxes (EBIT)
Value added
Added value per employee
31.162
27.695
27.695
34.825
31.859
109,3
31.162
5.457.291
30.560
34.825
35.979
96,8
3.713.831
7.074.842
52,5
3.351.038
6.895.276
48,6
Number of employees as at 31 December
1.137
1.163
97,8
799
811
98,5
Average number of employees based on hours worked
1.117
1.180
94,7
788
820
96,1
Investments
1
The financial statements have been compiled in accordance with the International Financial Reporting Standards. The method of calculating the indicators:
– Return on sales (ROS): net profit for the financial year / net sales revenues
Value added and value added per employee for
the Žito Group in the period 2009-2013
– return on equity (ROE): net profit for the financial year / average value of shareholders’ equity
40.000.000
– return on assets (ROA): net profit for the financial year / average assets
35.000.000
– Added value per employee: (gross operating profit – costs of goods, materials and
services – other operating expenses) / average number of employees based on hours
worked
30.000.000
25.000.000
20.000.000
*In 2012, Žito d. d. changed the accounting policy for investment property from property
valuation by purchase price to the method of valuation by fair value. Due to this, income
from the revaluation of land plots in 2012 amounts to EUR 3,380 thousand.
15.000.000
Indicators (EBIT, EBITDA and added values) for 2012 in the remainder of this Annual Report for 2013 are calculated by not considering the effect of the revaluation of land plots, since this is a
one-time event.
0
Net sales revenues and net sales revenues per employee
for the Žito Group in the period 2009-2013
29.000
120.000.000
100.000.000
93.019
94.215
99.236
27.000
78.389
78.221
26.000
40.000.000
25.000
20.000.000
0
24.000
2009
2010
Net sales revenues
2011
2012
2013
23.000
Net sales revenues per employee
32.000
31.000
30.000
78.389
78.221
93.019
29.000
94.215
28.000
10.000.000
27.000
5.000.000
26.000
2009
2010
2011
2012
2013
25.000
Value added per employee
Value added
EBITDA and share of EBITDA in the gross operating
profit for the Žito Group in the period 2009-2013
12.000.000
9,6 %
10,4 %
12,0 %
7,7 %
10.000.000
8.000.000
80.000.000
60.000.000
28.000
99.236
6,8 %
7,8 %
10,0 %
8,0 %
6.000.000
6,0 %
4.000.000
4,0 %
2.000.000
2,0 %
0
2009
EBITDA
2010
2011
2012
2013
0,0%
share of EBITDA in the gross operating profit
1
Labour costs and share of labour costs in value
added for the Žito Group in the period 2009-2013
25.000.000
72,7 %
20.000.000
68,9 %
70,2 %
70,1 %
10.000.000
5.000.000
0
2009
2010
2011
2012
2013
40 %
70.000.000
76,0 %
60.000.000
74,0 %
50.000.000
72,0 %
40.000.000
70,0 %
30.000.000
66,0 %
20.000.000
10 %
64,0 %
10.000.000
5%
0
Net profit and return on equity for the Žito
Group in the period 2009-2013
4,00 %
3,7 %
3,50 %
2.500.000
2.000.000
3,2 % 3,00 %
2,50 %
2,4 %
2,2 %
1.500.000
2,00 %
1,50 %
1.000.000
1,00 %
500.000
0
0,6 %
2009
Net profit
2010
2011
2012
Return on equity
0,50 %
2013
0,00 %
40 %
38 %
35 %
33 %
35 %
30 %
25 %
20 %
15 %
2009
Equity
3.000.000
39 %
78,0 %
Share of labour value
Labour costs
45 %
80.000.000
75,7 %
30.000.000
15.000.000
Changes in equity, net liabilities and leverage
of the Žito Group in the period 2009-2013
2010
2011
Net liability
2012
2013
0%
Leverage
In 2013, the Žito Group recorded a 0.3% drop in total sales revenues, as well as 5.3% growth in revenue per employee. Due to
an increase in operations, operating profit before amortisation
(EBITDA), as well as return on equity (ROE) and added value, increased. Added value per employee increased by 12.6%. It should
be mentioned here that the indicators related to employees take
into consideration only employees in Žito, whose number has
been decreasing for several years in a row.
1
Important events and activities in the financial year
Fire in the soup additives plant
In January 2013, there was a fire in the soup additives plant at PC
Intes Maribor. The fire destroyed the entire line for soup additives and equipment in the premises.
Awards for quality
Žito Group participated at the 13th expert evaluation of bread
and bakery products in February 2013 under the auspices of the
bakery and milling department of the Chamber of Agricultural
and Food Enterprises. Among 64 reviewed samples from 19
companies participating at this evaluation, Žito Group won 13
golden awards.
All 13 participating Žito's products won gold awards, i.e. Ajdov
kruh z orehi, Stoletni kruh, Zlati hlebec, Srečkov črni kruh, Hribovc, Slovenc, Jelenov kruh, (the latter won a gold award for
the thirteenth time in a row), Domači črni kruh, Gorenc polbeli
and Pastirski črni kruh, cottage cheese burek and spinach burek;
among the pasta type products, the Grande rolled noodles received a gold award.
Decisions from the 19th meeting of
shareholders of Žito d.d. of 10 June 2013
Constitution of reserves and division
of distributable profit for 2012
a. In accordance with the decision of the Management Board,
statutory reserves in the amount of EUR 166,734.18 and
other reserves in the amount of EUR 629,515.49 are created
on 31 December 2012;
b. Distributable profit of Žito d. d. on 31 December 2012 thus
amounted EUR 25,471,393.96;
c. A part of the distributable profit in the amount of EUR
1,054,710.54 is distributed to the shareholders entered in the
share register on the second working day after the general
meeting, with dividends amounting to EUR 2.99 gross per
share. Dividends are paid out to shareholders on 24 October
2013 in a fixed amount;
d. The remainder of the distributable profit in the amount of
EUR 24,416,683.42 is carried forward to the 2013 financial
year as undistributed profit.
1
Discharge of liability for 2012
Žito received seven Best Buy Awards
The Management Board and Supervisory Board were granted
discharge of liability for the financial year 2012.
In the 2013/2014 Best Buy Award research conducted in Slovenia
and Bosnia and Herzegovina, Žito stands out as the leading provider of the best price and quality ratio for numerous products.
Appointment of a certified auditor for
the business year 2013
The audit company UHY Revizija in svetovanje, Vurnikova ulica
2, Ljubljana was named as the certified auditor for the financial
year 2013
Opening of a renovated shop at Ljubljana market
The International Certification Association from Switzerland
(ICERTIAS) conducted an opinion poll in September 2013 about
the best price-quality ratio of food and non-food products and
services in Bosnia and Herzegovina, Croatia and Slovenia. Žito
received seven Best Buy Award medals.
Opening of the freezer plant and new production line
in Maribor
Slovenian consumers believe that Zlato Polje rice, Zlato Polje grains and breakfast cereals, Maestro herbs, Žito rusks and grissini
as well as fresh bakery products are products with the best price-quality ratio among all competitors and producers in the Slovenian market. In the Bosnian as well as Croatian markets (Croatia
for the year 2012/2013), Zlato Polje rice won the Best Buy Award
award under the category »Rice – the best price-quality ratio«,
since it received the highest number of votes from respondents.
A new line for bread and bakery products as well as a freezer
plant for storing semi-baked products with a capacity of 1080
pallet slots was opened at PC Kruh pecivo in Maribor on 21 June
2013.
The other top three products in additional categories in Slovenia
include Šumi Bonboni, and in the salted sticks category, Žito ranked second. In the Best Buy Award 2013/2014 award in Bosnia,
Žito's golden rusk ranked second in the »Rusk« category.
Change of significant stake in company ownership
Sale of financial investment in Mlinotest, change of
ownership of Žito d.d. and change in the number of
own shares
On 20 June 2013 a renewed shop Arkade was opened at Ljubljana central market. The new image and content are the result
of cooperation with the Association of Ecological Grain Processors and the Group of Ecological Fruit Producers. On 22 July 2013, the shareholder Fin Vita d.o.o. shareholder
acquired 17,718 shares in Žito; thus on 30 September 2013 the
company owned 40,838 shares of Žito, 11.48% of all Žito shares.
Šumi nepremičnine d.o.o., completely owned by Žito d.d., on 9 October 2013 sold 597,162 shares of Mlinotest d.d. to Fin Vita d.o.o. at a mar-
1
ket price of EUR 2.531 per share. On the day, Šumi nepremičnine d.o.o.
company acquired 32,533 shares of Žito d.d. company from Fin Vita
d.o.o. at a market price of EUR 57.00 per share, thus obtaining a 9.14%
share in Žito d.d. Žito d.d. therefore has 3,046 own shares, and including 32,533 shares acquired by its affiliate Šumi nepremičnine d.o.o.,
this represents 10% of own shares.
Signing the agreement on the joint sale of Žito d.d. shares
Modra zavarovalnica, d.d., Slovenska odškodninska družba, d.d.,
KD Kapital, finančna družba, d.o.o., KD Skladi, družba za upravljanje d.o.o. and Adriatic Slovenica, d.d., which as shareholders
own 180,401 registered no par value shares of Žito d.d., which is
50.7% of the company's share capital, signed an Agreement on
23 October 2013 on the joint sale of Žito d.d. shares. The signing
parties will implement the sale procedure with the cooperation
of a financial consultant. The entire sale procedure is coordinated by Slovenska odškodninska družba and KD Skladi.
Confirmation of the business plan for 2014
On 11 December 2013, the Supervisory Board of Žito d.d. confirmed the Business Plan of the Žito Group and Žito d.d. for 2014,
according to which the Žito Group plans to generate EUR 113.6
million in revenue, which amounts to 2% growth compared to
2013. Net profit is planned to amount to EUR 2.3 million, and the
EBITDA margin at 7.7%.
1
3 EVENTS FOLLOWING THE BALANCE SHEET DATE
There were no events in the Žito Group following the date of the
balance sheet, which should be revealed.
1
4 INTRODUCTION BY THE PRESIDENT OF THE
MANAGEMENT BOARD
The year 2013 can be evaluated as
successful. In a difficult economic
situation, we managed to achieve
better business results than in 2012.
We are well aware of the fact that
constant adaptation to the market
situation is necessary for success,
and we fulfil this condition, since it
is reflected in the financial indicators
of our operations. In 2013, the Group
generated EUR 111 million in net
Janez Bojc
sales revenue, EUR 3.1 million in operating profit and EUR 2.2 million in net profit. In comparison to 2012, net profit increased by 455%, whereas the level of revenues remained unchanged.
In the domestic market, we generated 84% of total sales revenue, and 16%
on foreign markets, while the key operating indicators improved, including
the return on revenues, capital and assets, added value and EBITDA margin.
progress remains at the appropriate level. This is also proven by numerous
We are proud of the fact that we are becoming a significant player at the
regional level, especially in Austria, Italy, Germany and Croatia, where we
managed to enter the markets with pre-baked breads. Buckwheat bread
and rusks were the international bestsellers in 2013. Regional bestsellers
include Zlato Polje rice types and milling products, Šumi bonbons and Maestro herbs. Other distribution channels were also opened in 2013, especially
in the field of Horeca, and many contracts for representation with important
principles have been signed.
mony with the local environment is very important for us. Therefore, we
Development still remains the driver of progress: new tastes, new products
and new sales approaches differentiate us from our competition as well as
justify and maintain our market positions. Motivated employees and loyal
buyers prove that our orientation and focus on high quality, safety and
awards – quality is proven by gold awards in this professional field – the best
price-quality ratio is proven by the Best Buy award, reflecting the opinion of
our buyers; innovation is proven by the Product of the Year awards, awarded
by an independent expert committee; and the Trusted Brand title proves
that we are trustworthy, since this title is awarded by our loyal buyers.
Innovation in development must be supported with opportunities in production. In 2013, we successfully opened the new line for pre-baked breads
and storage in Maribor, and we supplemented and upgraded our quality
certificates, which rank Žito among the leading companies in food industry.
The key achievements in the previous year also include organisational changes, which resulted in increasing efficiency and achieving greater focus on
increasing profits. The conclusion of our connection with Mlinotest is also
important, since by selling this financial investment, we withdrew from a
takeover that has not been accepted on the local level for many years. Haractively participate in socially responsible projects locally and nationally.
We succeeded in succeeding in many challenges. Therefore, we can be
proud of our achievements. Growth, achieving business goals, seeking new
opportunities, fulfilling the requirements and expectations of consumers
and the dedicated work of our employees form an excellent basis for creating the success of Žito Group in 2014.
Janez Bojc,
President of the Management Board
1
5 REPORT OF THE SUPERVISORY BOARD
Work of the supervisory board in 2013
•
The Supervisory Board in 2013 had the following members: Tomi
Rumpf (president), Maja Makovec Brenčič (deputy president), Adrijan
Rožič, Milan Kneževič, Suzana Šimenc and Zenon Marn (members).
It proposed UHY revizija in svetovanje d.o.o. as the auditor of
the unconsolidated and consolidated business results for 2013,
which was approved by the general assembly.
•
It confirmed the business plans of the Žito Group and Žito d.d.
for 2014
Based on sales data and financial statements, the Supervisory Board
constantly monitored the performance of the Žito Group and its
individual companies throughout the entire year. It paid particular
attention to the implementation of the strategy adopted in 2010,
strategy 2015, which was amended in 2012, and current operations
and investment plans related to the relocation and concentration of
production.
In addition to the issues mentioned above, the Supervisory Board
also discussed a series of other items at its 2011 sessions.
•
It adopted the 2012 annual report of Žito d.d. and the Žito Group,
together with the audit report, the report of the Supervisory
Board's work in 2012 and the joint statement by the Management Board and Supervisory Board of Žito of compliance with
the Corporate Governance Code. It submitted a proposal to the
shareholders for the distribution of distributable profit and proposed that the Management Board and Supervisory Board be
granted discharge of liability for the business year 2012. The proposals were accepted at the general meeting, with the exception of the distribution of distributable profit, as a counter-proposal for higher gross dividends was accepted. It also adopted
a decision that shareholders must be enabled the provision of
information regarding the transfer of property from Žito d.d. to
Šumi nepremičnine d.o.o. in 2012.
The members of the Supervisory Board also decided on the schedule of their work in 2014, confirmed the timetable and determined
the provisional agendas of Supervisory Board sessions.
Activities of the Supervisory Board
The Supervisory Board monitored and supervised the operations of
the Žito Group carefully and responsibly. It performed its role primarily by means of holding sessions. A total of seven regular and two
correspondence sessions were held in 2013. Business operations
were discussed throughout the entire year by means of annual and
interim reports on the performance of Žito d.d. and its subsidiaries.
The annual report for 2013 was also reviewed and approved by the
audit committee.
Two committees function within the Supervisory Board. The audit
commission, which serves as expert support for the Supervisory
Board, was established in the spring of 2009. It comprises three
members – supervisory board members Adrijan Rožič, who is also
the chairman of the commission, Tomi Rumpf and an external member, and Polona Pergar Guzaj, an experienced internal audit specialist
and certified internal auditor (CIA). Following the compilation of the
annual report and prior to related discussions within the supervisory
board, the audit committee reviews the annual report in detail, interviews the auditor and, if necessary, holds talks with those respon-
1
sible for individual processes. It also monitors the appropriateness
of internal controls and risk management within the company. The
commission met seven times in 2013. It reviewed the annual report
and requested that the management provide some additional information and explanations related to the management of working
capital, cost management - especially purchase costs - and the rate
of return from individual buyers and groups of goods. It was also
acquainted with the risk management policy of the Žito Group. The
audit committee recommended that the Management Board take
a more active approach to managing risks related to fluctuations in
purchase prices (primarily of wheat). The committee proposed that
the Supervisory Board confirm the annual reports of the Žito Group
and Žito d. d., the auditor’s report and the report of the Supervisory Board for 2013. It agreed that the Supervisory Board propose
a discharge of liability to the Management and Supervisory Board
of Žito d. d. at the general meeting, and to appoint UHY revizija in
svetovanje, d. o. o., Ljubljana, as the certified auditor for the financial
year 2013.
The human resources committee, comprising all members of the
Supervisory Board and chaired by Suzana Šimenc, was established
in the autumn of 2009. It met once in 2013.
In 2013, the external member of the audit committee, Polona Pergar
Guzaj, received EUR 5,742.43 for her work. There were no other costs
of the Supervisory Board in the financial year in question that are not
disclosed in the annual report.
Assessment of the work of the Management and Supervisory Boards
The work of the Supervisory Board and its committees in 2013 was
performed in accordance with the statutory provisions, the Corporate Governance Code and other recommendations from Ljubljanska borza d.d., the operator of the Ljubljana Stock Exchange.
All members of the Supervisory Board were conscientious and diligent in fulfilling the board’s main mission of maximising the value of
the company, while taking into account its commercial and strategic
objectives and its social responsibility. They regularly attended sessions, were actively involved in the Supervisory Board's work, and
monitored the implementation of adopted decisions. Various opinions were expressed at sessions, which through constructive dialogue led to unanimous conclusions.
All decisions by members of the Supervisory Board were independent of the shareholders and Management Board. No member
excluded himself or herself from deciding on any specific resolutions owing to a conflict of interest.
The diverse composition and high level of expertise of the Supervisory Board contributes to its successful functioning. The members
of the Supervisory Board possess various degrees of knowledge
and skill, covering a wide range of fields in which they remain well-briefed about and make decisions in. Because of the good mutual
cooperation, they were able to make expert decisions in accordance
with their statutory powers.
We assess that the cooperation between the Management Board
and Supervisory Board is good. The presidents of the Management
1
Board and Supervisory Board also maintained regular contact in
periods between sessions. The Management Board's reporting to
the Supervisory Board enabled the latter to carry out its supervisory
role adequately. The Management Board demonstrated the requisite frequency and quality in drawing up reports and in providing
specific details with a bearing on the Žito Group's performance. The
members of the Management Board also presented specific reports
personally at Supervisory Board sessions, providing the necessary
clarifications and reasoning.
The commitment of all members of the Management Board to fulfilling the annual business plan and attaining strategic goals was high,
and the results achieved were satisfactory given the current market
situation.
Review and approval of the annual report of Žito d.d.
and the Žito Group for 2013, with the audit report
The Supervisory Board has reviewed the submitted annual report
for 2013, the report from the auditor UHY revizija in svetovanje and
the report from the audit committee of the Supervisory Board for
the period between 1 January 2013 to 31 December 2013. On the
basis of a review of the audited annual report for 2013, the Supervisory Board has established:
•
that the annual report for 2013 was compiled in accordance with
the Companies Act, the statute and the relevant accounting and
reporting requirements;
•
that the annual report for 2013 contains all the formal and substantial parts of a company’s annual report required by the law
and, consequently, all essential data required for making a decision on its acceptance;
•
that the annual report for 2013 also contains a report on an audit
of the financial statements. It is clear from the auditor's report
that the financial statements are a realistic and fair presentation
of the financial situation, performance and cash flow of the Žito
group and the company Žito d. d. The certified auditor issued a
positive opinion on the report without reservations.
The audited annual report for 2013 and the proposal from the Management Board for the use of distributable profit were discussed by
the Supervisory Board on 22 April 2014.
a) Annual report for 2013 – opinion on the auditor’s report,
verification and approval of the annual report
The audit of the annual report of the Žito Group and company Žito
d.d. for 2013 (hereinafter referred to as: annual report for 2013) was
carried out by UHY revizija in svetovanje d.o.o., Ljubljana. On 10 April
2014, the auditing company issued a positive opinion on the annual
report for 2013.
After reviewing the report, the Supervisory Board established that
the annual report was reviewed by the audit committee and established:
•
that the annual report was compiled clearly and transparently,
that it is a realistic and fair presentation of the assets and liabilities of the company, its financial situation and its performance;
•
that the annual report was compiled within the time limit determined by law and that it contains all the requisite elements in
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accordance with the Companies Act (Official Gazette of the RS,
No. 42/06 with amendments; ZGD-1);
•
•
•
•
that the disclosures in the financial statements are complete
and do not differ from information available to members of the
Supervisory Board;
that the disclosures in the business part of the annual report are
complete and do not differ from information available to members of the Supervisory Board;
that the financial statements are in compliance with generally
accepted accounting standards and follow the accounting guidelines in use;
that the explanations of the financial statements contain all the
information required under the Companies Act, and that they
also contain all the important business events that took place
after the end of the financial year 2013, as well as notes about
the expected development of the company;
•
that the audit committee found no reduction in the independence of the external auditor,
•
that UHY revizija in svetovanje d.o.o. issued on 10 April 2014 an
audit report in which it adequately described the purpose and
scope of auditing and named the auditing standards employed.
UHY revizija in svetovanje d.o.o. gave a positive opinion of the
accounting report, without reservations, confirming that in all
important aspects the financial statements of Žito d.d. Ljubljana
and the Žito Group are a realistic and fair presentation of the
financial situation of Žito d.d. and the Žito Group on 31 December 2013 and its performance and cash flow for the year. In the
audit report, UHY revizija in svetovanje d.o.o. also gave a positive
opinion on the compliance of the business report for the financial year 2013 with the audited financial reports;
•
that the external auditor performed the audit and made an
audit report in accordance with the laws and professional rules
and at the required level, which is why the audit committee has
no remarks regarding this report;
•
that the annual report, together with the auditor's report, was
submitted to the Supervisory Board, which is responsible for its
confirmation.
After reviewing the auditor’s report, the Supervisory Board states in
accordance with the second paragraph of Article 282 of the Companies Act, that it has no remarks regarding the report and agrees with
the conclusions in the report.
In accordance with the second paragraph of Article 282 of the Companies Act, the Supervisory Board states that it confirms the annual
report of Žito d. d. for 2013 and of the Žito Group for 2013 as it was
presented.
b) Proposal for the use of distributable profit
The Supervisory Board was acquainted with a proposal from the
Management Board for the use of distributable profit and the position of the audit commission on the proposal of the Management
Board for profit sharing. The Supervisory Board established that the
distribution of net profit was compliant with the Companies Act,
that the proposal for the use of distributable profit includes all required data and that there are no reasons to challenge the proposed
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decision on the use of distributable profit under the provisions of
the Companies Act..
The Supervisory Board supports the proposal of the Management
Board of Žito d. d., and proposes to the general assembly of the company the use of distributable profit in the following way:
a. Distributable profit of Žito d. d. on 31 December 2013 thus amounted to EUR 25,982,799.34.
b. A part of the distributable profit in the amount of EUR 1,088,724.20
is distributed to the shareholders entered in the share register on the
second working day after the general meeting, with dividends amounting to EUR 3.40 gross per share. Dividends are paid out to shareholders on 24.10.2014 in a fixed amount;
c. The remainder of the distributable profit in the amount of EUR
24,984,075.14 is carried forward to the 2014 financial year as undistributed profit.
The Supervisory Board also proposes to the general assembly
that the Management Board and Supervisory Board be granted
discharge from liability for the financial year 2013.
Tomi Rumpf,
President of the Supervisory Board
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6 MANAGEMENT AND GOVERNANCE
6.1 Bodies responsible for corporate governance
The governance of the parent company Žito d.d. is carried out in
accordance with the Companies Act, the Rules of the Ljubljana Stock
Exchange, and the Company’s articles of association, bylaws and
rules. The Corporate Governance Code also serves as an important
guideline, and its provisions are applied almost in full. The exemptions are stated in the Statement of Compliance with the Corporate
Governance Code, which is an integral part of the annual report.
The Company has a two-tier system of governance: the Company is
managed by the Management Board, while its operations are supervised by the Supervisory Board.
The Management Board, Supervisory Board and general meeting of
shareholders are the bodies responsible for corporate governance.
General meeting of shareholders
The general meeting is the body in which shareholders exercise their
rights regarding corporate matters. It is typically convened by the
management board on an annual basis. It may be convened at its own
initiative, at the request of the Supervisory Board, or at the request of shareholders representing at least 5% of the Company's share capital. When
a request is submitted, the Management Board must also be given arguments and reasoning in favour of convening a general meeting.
The most important matters decided by the shareholders at the ordinary
annual general meeting include the allocation and use of distributable
profit, the discharge of liability to the Management Board and Supervi-
sory Board for their work during the year, and the appointment of the
auditor for the current year. All shareholders or their proxies may attend
the general meeting after confirming their attendance in writing at least
three days prior to the meeting.
The convening of the general meeting and other important matters vital
to holding a general meeting are set out in the Company’s articles of
association, which are published on Žito d.d.'s website. The convening of
a general meeting is announced on the Ljubljana Stock Exchange's SEOnet electronic information system, on the Company's website, and in the
newspaper Finance, at least 30 days prior to the meeting.
Shareholders who hold at least 5% of the Company’s share capital must
be notified in writing of the convening of the general meeting , and must
be given copies of the agenda and the working material.
At the 17th ordinary general meeting, held on 10 June 2013, the shareholders discussed the 2012 Annual Report, and adopted resolutions on the
use of the distributable profit, on the discharge of liability to the Management Board and Supervisory Board and on the appointment of the certified auditor for 2013. All the proposed resolutions were passed and there
were no challenging motions. The resolutions are published on SEOnet
and on Žito d.d.'s website.
Supervisory Board
The Supervisory Board of Žito d.d. comprises six members. Four
members representing the shareholders’ interests are elected by
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the General Assembly; two members representing workers’ interests
are elected by the works council, which then notifies the Management
Board and General Assembly. Members of the Supervisory Board are
appointed for a four-year term, with the possibility of reappointment.
The president of the Supervisory Board draws up the board’s report, in
which the main activities and actions of the Supervisory Board in the past
year are described in detail.
Žito d.d.’s Supervisory Board is convened at least six times annually, or
more frequently if necessary. The convening of meetings and working
methods of the Supervisory Board are set out in the Company’s articles
of association and rules of procedure of the Supervisory Board. A total of
seven regular and two correspondence sessions were held in 2013.
Two committees function within the Supervisory Board. The audit committee comprises three members, two from the Supervisory Board and
one external member. Every year, prior to the discussion of the annual
report, the audit committee, which provides expert support to the
Supervisory Board, reviews the annual report and holds talks with the
auditor and those responsible for individual processes, as required. It also
monitors the appropriateness of internal controls and risk management
within the company. The human resources committee was established
in autumn 2009, and comprises all members of the Supervisory Board.
Supervisory Board members receive fixed attendance fees, and are also
entitled to profit-sharing.
.SUPER VISORY BOARD:
Tomi Rumpf, President of the Supervisory Board
Born in 1968. He is a Doctor of Veterinary Medicine. Upon entering his
term of office, he was the director of Lipica Stud Farm and Lipica Turizem d.o.o. He currently works as the director of Perutnina Ptuj S, Srbac in
Bosnia and Herzegovina.
dr. Maja Makovec Brenčič, Member
Born in 1969. Dr. Maja Makovec Brenčič is a professor of international business at the Faculty of Economics in Ljubljana. She was appointed as the
Vice Chancellor of the University of Ljubljana for the area of knowledge
transfer.
Adrijan Rožič, Member
Born in 1960. An economics graduate, employed at Kapitalska družba
d.d. as a capital investment manager.
Milan Kneževič, Member
Retired, born in 1938. He obtained his university education at the Biotechnical Faculty in Ljubljana and at the Faculty of Economics in Maribor.
Before retiring, he held the position of President of the Management
Board of Deželna Banka Slovenija bank for 15 years.
Suzana Šimenc, Member (workers' representative)
Born in 1969; she holds a Master's Degree in public administration and
food technology. She has been employed at Žito since 1988 as a sales
segment manager for public consumers.
Zenon Marn, Member (workers' representative)
He is 67 years of age and graduated as a food technology engineer. He
has been employed at Žito since 1975, and is the head of the Šmartinska
work unit.
The term of office of three Supervisory Board members (Tomi Rumpf,
Suzana Šimenc and Zenon Marn) expires in July 2014; the four-year term of
office of Maja Makovec Brenčič ends in July 2015; Milan Kneževič's term of
office ends in July 2016 and Adrijan Rožič's term of office ends in July 2017.
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Company management
MANAGEMENT BOARD:
The Management Board, which is appointed by the Supervisory Board, is
responsible for the management of Žito d.d. It is appointed for a five-year
term, with the possibility of unlimited reappointment. The Management
Board comprises four members. The President of the Management
Board started his 5-year mandate on 14 July 2012. The other three members of the Management Board started theirs on 17 May 2010.
The Management Board manages Žito d. d. to the benefit of the Company, and is independent and liable for its actions, although key business
decisions are made solely with the agreement of the Supervisory Board.
The Supervisory Board is informed of operations and significant events
regularly and in good time. The Management Board’s positions on the
strategic objectives of the Žito Group are coordinated with the Supervisory Board. In addition to any decision on an increase in the Company’s
share capital, the articles of association also specify that the Management
Board must obtain the Supervisory Board’s consent for any transactions
exceeding 10% of the share capital.
Remuneration, reimbursements and other benefits for members of the
Management Board are set out in agreements concluded between the
Supervisory Board and individual members of the Management Board.
The rules determining the variable part of the salary for the Management
Board are adopted by the Supervisory Board, which also determines
bonuses for members of the Management Board. The remuneration
system at Žito does not include remuneration in the form of stock options, shares or derivative financial instruments on shares. All remuneration, reimbursements and other benefits paid to members of the Management Board in 2013 are presented in the Accounting section in the
notes on related party transactions.
Janez Bojc
Peter Rajačič
Erik Žunič
Sandi Svoljšak
Janez Bojc, President of the Management Board
An economics graduate, born in 1962. His career spans from the
insurance industry, to banking, energy, trade and finally the food
industry. He was the co-founder of Kmečka družba za upravljanje investicijskih skladov d.d., and for a longer period also the
deputy director of KD Group; he also performed other functions within KD Group. Since 2008, he has been president of the
management board of KD Kapital d.o.o.; since 2012 he has been
the president of the bakery association at GZS and amember
of the International Association of Plant Bakeries (AIBI) and the
European Millers Association (EFMA).
Peter Rajačič, Member of the Management Board responsible for
marketing and logistics
Born in Brežice in 1963. He graduated from the Faculty of Economics, University of Ljubljana. He began his career at Astra ZT, and
worked at Droga Kolinska prior to joining Žito.
mag. Erik Žunič, Member of the Management Board responsible for
accounting, finance and IT
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Born in Ljubljana in 1967. He graduated and completed his master’s
degree at the Faculty of Economics, University of Ljubljana. He
obtained his professional experience as an auditor at one of the
four international investment giants and from working for Microsoft and the KD Group.
Sandi Svoljšak, Member of the Management Board responsible for
production and tehnical matters
Born in Ljubljana in 1960. He graduated from the Faculty of Chemistry, University of Ljubljana, and began his career at Papirnica Goričane d.o.o. He has been employed at Žito d.d. since 1996.
The heads of profit centres, managers of support services and
directors of affiliated companies who are directly accountable
to Žito d. d.’s Management Board provide professional support
to the Board. The coordination and harmonisation activities
among the profit centres and business processes take place at
weekly or monthly meetings. The Management Board meets
formally once a week, and more frequently if required. The
success of individual activities is promoted through quarterly
business conferences, and we search for answers to key strategic
challenges in the future of Žito at a developmental conference
that is held once a year.
The marketing and sales departments also organise numerous
other meetings and workshops, such as the Strategic Days where marketing, together with development, sales and production, defines the key strategic activities for a selected brand
- annual meetings and quarterly reviews with distributors in
foreign markets, and quarterly meetings with the operational
management of key customers in Slovenia.
Governance in the Group
The Žito Group comprises the controlling company Žito d.d. and
eight subsidiaries in Slovenia and abroad. All subsidiaries are
fully owned by the controlling company, except Žito Maloprodaja d.o.o., where the 0.45% stake held by minority shareholders
does not affect the uniform governance of the Group.
Uniform rules of governance, organisation and operations apply
to all companies. As the controlling company, Žito d. d. sets out
the strategies and operational objectives for all Group companies and monitors the implementation of plans. All expert services are centralised at the parent company Žito d.d., except the
technology-development service, where employees are responsible for the same business functions as the controlling company,
Žito d. d., according to the principle of functional management.
System of internal controls
Quality accounting information is one of the foundations for
taking responsible business decisions. The Management Board is
responsible for ensuring accounting information. This is accomplished by upholding accounting standards, through relevant
accounting guidelines, by applying a standardised accounting
policy at the Žito Group level, by preparing timely and relevant
data, reports and analyses, and through the regular annual
supervision of the accounting process in auditing procedures.
Risks are managed using internal controls, i.e. various strategies
and procedures implemented at different levels. This ensures the
efficiency and success of operations, the reliability of financial
reporting and compliance with valid legislation and regulations.
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Financial controls are closely linked to IT controls, which ensure
limits, and control access to the network, data and applications,
as well as the completeness and accuracy of data collection and
processing.
The financial control department prepares regular periodic
reports on individual business functions, providing users useful
information for business decisions. Particular attention is given
to sales figures, added value created, the productivity of production units and the financial statements. The financial statements
are monitored by individual cost centres, which are combined
into work units before being combined into product pillars.
Organisational units are divided into cost centres and profit centres of responsibility. Expert administrative services and other
support processes represent the former, while production and
retail units make up the profit centres.
External audit
External auditing is conducted by a certified audit firm, which,
in addition to the regular annual audit, also submits expert warnings and instructions to improve the internal control system
and the management of all types of risk.
The external audit for the Žito Group for 2013 was performed
by the audit agency Uhy Revizija in svetovanje, d. o. o., Vurnikova ulica 2, Ljubljana, which audits the financial statements
and annual reports in cooperation with the Žito Group. The cost
of auditing the financial statements for the Žito Group for 2013
amounted to EUR 45,500. There were no other costs regarding
audit agencies in 2013
6.2 Corporate governance
6.2.1. Statement of compliance with
the Corporate Governance Code
The Management Board and Supervisory Board of Žito d.d.
hereby declare that in 2013 they abided by the provisions of the
Corporate Governance Code, amendments to which were adopted on 8 December 2009, except for the provisions stated below.
The Corporate Governance Code is publicly accessible on the
website of the Ljubljana Stock Exchange at http://www.ljse.si.
Chapter: CORPORATE GOVERNANCE FRAMEWORK
Code provision 1: The key objective of a public limited company
engaged in a revenue generating business is to maximise the
company’s value. This, as well as the company’s other objectives
pursued in the course of business, such as the long-term creation of value for shareholders and the social and environmental
aspects that ensure the sustainable development of its business,
is stated in the company's articles of association.
The Company's bodies constantly act in accordance with the key
objective, i.e. the maximisation of the Company’s value for its customers, consumers, employees and owners. The Company's general
objectives are specified in the medium-term and annual plans,
while the strategic objectives can be found on the Company’s website and in annual reports.
Code provision 2: The Management Board and Supervisory
Board work together to draw up and adopt the corporate gover-
1
nance policy, which sets out the key corporate governance strategies, taking into account the company's established long-term
objectives. All stakeholders are briefed on the corporate governance policy through disclosures on the company's website.
Code provision 2.1: In drawing up the corporate governance
policy, the Management Board cooperates with the Supervisory Board, whereby it takes into account the company's development needs and its specificities, such as its size and area of
business. The Supervisory Board participates by drawing up its
own activities schedule for each financial year and by defining
the issues to be dealt with. These include the required frequency
and form of communication with the Management Board, the
role of the Supervisory Board in the assessment of risk management systems, and the procedure for drawing up general
meeting resolutions, particularly the proposed appointments
of Supervisory Board members. In drawing up the corporate
governance policy, the Management Board and Supervisory
Board may make reference to other public documents.
Code provision 2.2: The corporate governance policy is adopted
for a specific future period and is updated as frequently as necessary to ensure its constant compliance with actual corporate
governance strategies. It includes the date of the last update,
and is accessible on the company's website.
Žito d.d. has not drafted a corporate governance policy document.
The Management Board manages the Company in accordance with
valid legislation, the Corporate Governance Code and the values
adopted by the Group as a whole.
Chapter: RELATIONS WITH SHAREHOLDERS
Code provision 4.2: The company encourages all major shareholders, institutional investors and the state, in particular, to publicly disclose their investment policy with respect to the stake
they hold in the company concerned, i.e. their voting policy,
the type and frequency of their engagement in the company's
governance and the dynamics of their communication with the
respective company's management or supervisory bodies. The
company is considered to have called its shareholders to make
such a disclosure pursuant to this recommendation if the convening of the general meeting includes the respective invitation.
The Company's aim is for major shareholders to disclose their
investment policy, but leaves this decision to shareholders.
Chapter: SUPERVISORY BOARD
Code provision 6.2: At least half of the Supervisory Board members should be independent with respect to electoral proposals
drafted by the Supervisory Board. Supervisory Board members
are deemed to be independent if they work and take decisions
independently. Members are not deemed independent if they
have close economic ties with the company, its Management
Board or major shareholders. An independent member must
inform the Supervisory Board of any fact that afffects his/her fulfilment of the independence criteria. The obligation to appoint
independent members applies to both shareholders and works
councils.
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The Company's Supervisory Board comprises three independent
members and three members, who, either due to economic ties with
major shareholders in one case, or economic ties with the company
Žito d.d. in the two other cases (workers' representatives), are not
independent.
Code provision 6.3: When the Supervisory Board is established,
the term of office of new members begins, and upon the appointment of special Supervisory Board committees, the president
of the Supervisory Board ensures that newcomers receive an
efficient introduction to the work of the board, whereby the
Management Board provides organisational support. Upon,
or immediately after its establishment, the Supervisory Board
makes firm commitments with respect to its activities related
to establishing and implementing key corporate governance
instruments.
The Supervisory Board draws up its position regarding the governance of the Company in the light of established strategies and
business plans.
Code provision 9: The Supervisory Board assesses its own composition at least once a year, taking into account potential conflicts of interest, the functioning of individual members and
the Supervisory Board as a whole and its cooperation with the
Management Board. In its assessment, the Supervisory Board
also assesses the work of Supervisory Board committees.
The Supervisory Board provides an assessment of its own work and
its cooperation with the Management Board in the annual report
of the Supervisory Board, but does not address individual members
of the Supervisory Board. Potential disagreements and dilemmas
regarding the appropriateness of an individual member's activities
are resolved as they occur. Likewise, the Supervisory Board does not
explicitly assess the contribution of self-assessment to changes in
the functioning of the Supervisory Board, as it constantly strives to
improve the fulfilment of its mission, i.e. to ensure responsible supervision and the monitoring of decision making in the interests of the
company Žito d. d.
Chapter: AUDIT AND SYSTEM OF INTERNAL CONTROLS
Code provision 19: The company establishes an efficient system
of internal controls, which fosters quality risk management. In
cooperation with the audit committee, the company ensures substantive, periodic and impartial professional control of
the working of the system of internal controls tailored to the
company's business and scope of operations.
Code provision 19.2: The audit committee offers professional
support to the Supervisory Board in approving the annual internal audit plan, and ensures the continuous monitoring of risk
management.
Code provision 19.3: The company ensures that reports and findings from the internal audit department are available to members of the audit committee and the auditor of the company's
financial statements.
1
The establishment and supervision of the system of internal control
is the responsibility of several expert services in the Žito Group,
which has proved to date to be a sufficiently effective practice.
Systematic internal control is conducted at the companies of the
Žito Group that do business in Slovenia by means of a standardised
accounting policy, a standardised controlling system, and
information technology solutions. Subsidiaries operating in the
rest of the world are monitored via their regular monthly reports.
In 2014, Žito d. d. will improve oversight of risk management
processes through the internal revision function.
Chapter: TRANSPARENCY OF OPERATIONS
Code provision 20.2: The company's management is responsible
for drawing up and implementing a corporate communication
strategy that prevents situations that foster insider securities trading (abuse of inside information). The company's management
adopts a corporate communication rulebook.
The Company has not adopted a document governing the rules of
corporate communication with investors and the public. The basic
requirements of public relations are laid down by law and stock
exchange rules. Persons responsible for communication with the
public work directly with the Management Board, thus enabling
supervision of the flow of price-sensitive information.
Code provision 20.3: The company lays down rules on restrictions on trade in the company’s shares, stipulating trading restrictions, temporal restrictions on trading (closed trading windows)
and on ordering members of the company's bodies, as well as
related persons, legal entities and other persons with access to
inside information to disclose transactions in the company's shares and the shares of related companies.
Restrictions and reporting on trading in the Company's shares by persons with
access to inside information are governed by the Securities Market Agency's
decision on special rules for reporting on inside information and investment
recommendations. The Company has informed all persons with access to
inside information with the decision and reporting obligations. These persons
are recorded on a special list, while the management of inside information is
also set out in employment contracts and other legal and internal regulations.
Code provision 21.3: The company makes public announcements not only in Slovenian, but in a language of international
finance, in which it also draws up its annual report.
The Company's annual report is translated into English. Other
public announcements are published only in Slovenian due to the
low proportion of foreign shareholders. Interested potential investors can obtain information on operations in the annual reports,
on the Company's website or by directly contacting Company representatives.
Code provision 22.7: The company discloses the gross and net
remuneration of each member of the Management Board and
Supervisory Board. Such a disclosure is clear and comprehensible to an average investor, and in addition to content required
by staute includes: an explanation of how the choice of performance criteria contributes to the company's long-term interests;
an explanation of the methods applied to determine whether
the performance criteria have been met; precise information
on the deferment periods with regards to variable components
of remuneration; information on the policy regarding termination payments, including the criteria conditioning termination
payments and the amounts of termination payments; informa-
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tion with regards to vesting periods for share-based remuneration; information on the policy regarding the retention of shares after vesting; and
information on the composition of peer groups that have been studied
with respect to their remuneration policies in the course of setting up a
remuneration policy in the company concerned.
The Company published the earnings for each member of the Management
Board and Supervisory Board separately. Given that this information is of a
personal nature, we believe that more detailed disclosure of the aforementioned information, which is the subject of individual employment contracts, is
unnecessary.
The Corporate Governance Code is available on the website of the Ljubljana Stock Exchange at http://www.ljse.si.
The Company will continue to comply with the recommendations of
the code in the future. If it appears that the Company is unable to meet
by any of the obligations under the Code, the Management Board and
Supervisory Board will draw up a substantiated explanation.
issued in dematerialised form and provide their holders with the right to
take part in the management of the Company, the right to receive dividends and the right to an appropriate portion of residual assets following
liquidation or bankruptcy.
Restrictions on the transfer of shares
All shares in the Company are freely transferable.
Significant direct and indirect ownership of Žito d.d.'s securities
There are five significant holders of Žito d.d. securities, i.e. having a qualifying holding, as defined by the Mergers and Acquisitions Act (a holding
of more than 5%): Modra zavarovalnica d.d., Slovenska odškodninska
družba d.d., Šumi nepremičnine d.o.o. (own shares), KD kapital d.o.o., KD
Galileo, vzajemni sklad. Information on the number of shares and ownership stakes as at 31 December 2013 can be found in the section Shares
and ownership structure.
Holders of securities providing special controlling rights
6.2.2. Figures under the sixth paragraph of Article 70 of the Companies Act
The Company has issued no securities that would provide special control
rights.
As a company obliged to apply the act governing mergers and acquisitions in accordance with the sixth paragraph of Article 70 of the Companies Act, Žito d.d. submits figures for the final day of the financial year and
all the requisite notes.
Employee share scheme
Structure of capital
The Company’s share capital is divided into 355,792 ordinary transferable
registered no-par-value shares. All shares are of the same class. They are
The Company has no employee share scheme.
Restrictions related to voting rights
There are no restrictions on voting rights.
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Agreements between shareholders that could result in a
restriction on the transfer of shares or voting rights
The Company is not aware of any agreements between shareholders
that could result in the restriction of the transfer of shares or voting rights.
Company rules
• on the appointment and replacement of
management or supervisory body members
Management Board members are appointed by the Supervisory Board. Management
Board members are appointed for a five-year term with the possibility of reappointment.
Supervisory Board members undertake to select Management Board members responsibly and prudently. The Supervisory Board determines the candidate selection criteria
and finds suitable candidates. If it has appropriate and suitable candidates at its disposal, it
appoints the Management Board immediately at its session, or it may decide on a private
or public tender for applications prior to appointment. In accordance with the Companies
Act, the Supervisory Board may reappoint the Management Board up to one year prior to
the end of its term of office. If the general meeting passes a vote of no confidence in the
Management Board, the Supervisory Board must express its position on the dismissal of
individual Management Board members immediately after the meeting. The aforementioned notwithstanding, the Supervisory Board may dismiss the Management Board at
its own discretion for reasons prescribed by law. The Supervisory Board may appoint its
individual members as deputies to replace a missing or unavailable Management Board
member for a maximum of one year. Reappointment or extension of the term of office is
permitted only if the entire term of office lasts no longer than one year. The Supervisory
Board is obliged to inform the Management Board of its findings and opinions immediately when the latter inadequately exercises its powers, and to stipulate the earliest possible
deadline for the Management Board to rectify the identified deficiencies. If the Management Board fails to achieve the expected results by the stipulated deadline, the Supervisory Board makes a decision to dismiss the Management Board members.
The Supervisory Board comprises six members, of which four are elected by the Company’s
general meeting by a majority vote of the shareholders in attendance, while the remaining two are elected by the works council. Supervisory Board members are appointed for a
four-year term, and may be reappointed after their term of office expires. A resolution for
the early dismissal of Supervisory Board members representing the shareholders must be
passed with a three-quarters majority of the votes in attendance at the general meeting,
while the conditions for dismissing the workers’ representatives on the Supervisory Board
are determined by the works council in its general bylaw.
• on amendments to the articles of association
The general meeting decides on amendments to the articles of association with a three-quarters majority of the represented share capital.
Authorisations of the members of the management, particularly
with regard to issuing and purchasing own shares
The authorisations of members of the management are defined in the
section Management and governance. The Management Board has no
special authorisations related to the issue or purchase of own shares.
Material agreements that take effect, change or terminate on the basis of
a change in control of the Company as a result of a public takeover bid
The Company is not aware of any such agreements.
Agreements between the Company and the members of its management or
supervisory bodies or employees that foresee compensation should such persons, due to a bid as stipulated by the act governing mergers and acquisitions,
resign, be dismissed without cause, or have their employment terminated
In the event of resignation, the Management Board is not entitled
to termination benefits, while the Management Board is entitled to
1
termination benefits if a member is dismissed or his/her employment
contract is terminated without cause.
6.2.3 Information on the functioning
of the general meeting
This information is found in the section Management and governance,
under the item ‘Bodies responsible for corporate governance’.
Janez Bojc,
President of the Management Board
Tomi Rumpf,
President of the Supervisory Board
1
6.3 Statement of management responsibility
The Management Board is responsible for compiling the annual
report to present a true and fair picture of the Company's financial position.
In accordance with Article 60a of the Companies Act, the members of the Management Board and Supervisory Board of Žito
d.d., Ljubljana hereby declare that the annual report of the Žito
Group and Žito d.d. for 2013, including the governance statement, were compiled and published in accordance with the
Companies Act, the Financial Instruments Market Act and the
International Financial Reporting Standards.
In accordance with Article 110 of the Financial Instruments Market Act, the Management Board of Žito d.d., comprising the
president Janez Bojc and the other members, Peter Rajačič, Erik
Žunič and Sandi Svoljšak, hereby declare that to the best of their
knowledge:
•
the accounts of the Žito Group and Žito d.d. for 2013 were
compiled in accordance with the International Financial
Reporting Standards, and present a true and fair picture of
the assets and liabilities, the financial position and the profit
President of the Management
Board
Janez Bojc
Member of the Management
Board
mag. Erik Žunič
or loss of Žito d.d. and the other entities included in the consolidation as a whole;
•
the management report of the Žito Group and Žito d.d.
includes a fair review of the development and performance
of the Company’s business and its financial position, including a description of the principal risks to which the Company and any other entities included in the consolidation as
a whole are exposed.
The Management Board also declares that the financial statements of the Žito Group and Žito d.d. were prepared under the
presumption of a continuation of operations, that the selected
accounting guidelines were strictly applied and that eventual
changes to the latter were disclosed.
Moreover, the Management Board is responsible for undertaking measures to prevent and discover fraud and irregularities
and to ensure the maintenance of the value of the property of
Žito Group and Žito d.d.
Board
Peter Rajačič
Board
Sandi Svoljšak
2
Annual report 2013 / Management report 32
2MANAGEMENT
REPORT
2
Annual report 2013 / Management report/ 33
7 ABOUT THE ŽITO GROUP
The Žito Group was organised as follows as at 31 December 2013:
Šumi bonbon d.o.o.,
Ljubljana
100 %
Žito
Maloprodaja d.o.o.,
Ljubljana
Žito d.d.
99,55 %
Intes Storitve d.o.o.,
Maribor
Žito
nepremičnine d.o.o.,
Ljubljana
100 %
100 %
Žito d.o.o.,
Beograd, Srbija
Žito PI d.o.o.e.l.,
Skopje, Makedonija
100 %
100 %
Šumi
nepremičnine d.o.o.,
Ljubljana
100 %
LD Žito d.o.o.,
Zagreb, Hrvaška
100 %
2
Management and activities by company in the Žito Group
President of the Management
Board/Director
Core production activities or products
Žito d.d.
Janez Bojc
Milling, baking, pastries, frozen foods, pasta, chocolate, sponge
cakes, teas, herbs, spices, and rice, as well as the sale of goods for
bakers and confectioners.
Intes Storitve d.o.o.
Mirjana Radić,
pekarstvo
Deputy Brigita Hočevar
Baking
bonboni in žvečilni gumi
Šumi bonboni d.o.o.
Miha Skubic
Sweets and chewing gum
Žito Maloprodaja d.o.o.
Peter Rajačič
Retail sales
Company
Žito, d. d.
Šumi bonboni, d. o. o.
Žito, d. d. is the controlling company of the Žito Group, established in 1947. In 1998, it was transformed into a public limited
liability company. Following the mergers of several subsidiaries
in 2006 and 2007, the Company has generated the majority of
the Žito Group's revenue. With the exception of Šumi Bonboni
d.o.o., which produces sweets and chewing gum, and Intes Storitve, which produces certain bakery products, all other production activities of the Žito Group are concentrated in the controlling company.
Production at Šumi has enjoyed a long history, dating back to
1876 with the production of sweets and pastries, which was later
expanded to include chewing gum. Over time, Žito Šumi d.o.o.
was established. Following the relocation of production from
Ljubljana to Krško in May 2008, its production activities were
transferred to the newly established Šumi Bonboni d.o.o.
In 2013, Žito d.d. generated EUR 103.7 million in sales revenue, or 0.4% more than in 2012. Net profit was EUR 2.5 million, 232.9% higher than in 2012. The company's capital on 31
December 2013 amounted to EUR 74.0 million. The Company
had 799 employees at the end of 2013, which is 12 fewer than at
the beginning of the year.
Šumi Bonboni d.o.o. sells its products to two customers, Žito d.d.
and Hitschler GmbH in Germany. In 2013, the company generated EUR 10.5 million in sales revenue, which is 8% less than
in 2012. It also achieved EUR 45 thousand net profit, whereas in
2012 net profit amounted to EUR 55 thousand. The Company
had 120 employees at the end of 2013, which is 3 fewer than at
the beginning of the year.
2
Intes Storitve, d. o. o.
Intes Storitve d.o.o.’s core activity is the production of poticas and
certain bakery products. It also provides services for other companies in the group, such as the packaging and commissioning of products, maintenance and similar.
The company has held the status of a disabled workers' company
since 1996, and functions in accordance with the Vocational Rehabilitation and Employment of Disabled Persons Act. The company
generated sales revenue of EUR 4.0 million in 2013, which is 0.8 %
more than in the previous year. The company had 137 employees at
the end of 2013, which is 9 fewer than at the beginning of the year.
2
Žito Maloprodaja, d. o. o.
ABC Agrohit d.o.o. was renamed Žito Maloprodaja d.o.o. in mid2010. In September of the same year, the retail sales activity,
including employees, was transferred to the Company from Žito
d.d. The company had 34 retail sales units at the end of the year.
In 2013, it generated EUR 7.8 million in revenue, which is 2.3 %
less than in 2012, and with a loss of EUR 71 thousand. In the previous year, it recorded a profit of EUR 291 thousand. The company had 81 employees at the end of 2013, which is 2 fewer than
at the beginning of the year.
Šumi Nepremičnine, d. o. o., and
Žito Nepremičnine, d. o. o.
The operations of Šumi Nepremičnine d.o.o. are linked solely
to the letting of properties. Real property was rented by Šumi
bonbon d.o.o. and Žito d.d. At the end of 2012, the property in
Ljubljana – Šmartinska were transferred to Šumi nepremičnine
d.o.o., which also charges rent for that property. At the end of
2012, financial investments in Mlinotest and Mlinopek were
transferred to Šumi nepremičnine d.o.o. The financial investment in Mlinotest was sold in 2013.
Žito Nepremičnine d.o.o. is currently dormant.
LD Žito, d. o. o., Zagreb, Žito, d. o. o.,
Beograd and Žito, PI d. o. o. e. l., Skopje
Until 2010, the companies were responsible for distribution in
local markets. In 2010, the distribution function was transferred
to a third-party distributor. Therefore, the activities of subsidiaries are limited to the collection of receivables and coordination
between the distributor, the parent company and customers. At
the end of 2013, these companies had no employees.
2
8 SHARES AND OWNERSHIP
ZTOG share price 1 to 12 2013 regarding the
SBITO trend (ind. 1 Jan 2013 = 100)
On the last trading day of the year, Žito's share price was EUR
66.30, which is EUR 8.29 or 14.29% higher than at the beginning
of the year. The Slovenian blue chip index in the same period
gained 3.17% value.
EUR 3.43 million turnover was made by trading with Žito shares
in 2013, which comprises 1.15% of the turnover on the Ljubljana
Stock Exchange securities market. 58,561 shares were traded,
whereby 32,533 shares were traded in a block trade and 26,028
shares in 522 ordinary trades.
2.000
1.800
1.600
1.200
1.000
100
800
30
600
400
10
0
Promet v 000 EUR
1.400
50
Share trading on the official market
The official ZTOG share price in 2013 was between EUR 48.70
and 72.00 per share. The lowest value was in October and the
highest in mid-December.
80
70
110
Tečajaj v EUR
The share capital of Žito d.d., totalling EUR 14,846,937.07, is divided into 355,792 no-par-value shares. Shares are listed on the
official market of the Ljubljana Stock Exchange, with the ticker
symbol ZTOG. All shares are of the same class: ordinary, freely
transferable no-par-value shares. All shares, with the exception
of treasury shares, carry one vote at the general meeting. Žito
shares may be traded freely via brokerage houses and banks
that are members of the Ljubljana Stock Exchange.
200
jan
feb
mar
apr
maj
jun
jul
avg
sep
okt
nov dec
0
ZTOG
Source: Ljubljanska borza vrednostnih papirjev d.d.
ZTOG share price and turnover in the organised securities
market from 1 to 12 2013 / Turnover in 1000 EUR
130
120
110
100
90
80
jan
feb
mar
apr
maj
jun
ZTOG
jul
avg
sep
SBITOP
Source: Ljubljanska borza vrednostnih papirjev d.d
okt
nov
dec
2
Dividend policy
Žito follows a policy of stable growth in dividends, which are
paid once a year. The general meeting, which is typically convened at the end of May or in June, takes a decision on the proposed dividend amount. Dividends are then paid in October. Under
the resolution of 10 June 2013, a gross dividend of EUR 2.99 per
share was paid out for 2013, or EUR 0.21 less than in 2011.
Figures regarding the value of and earnings
per share (on a consolidated basis)
The book value per share amounted to EUR 219.28 on 31 December 2013, a 11.87% increase compared to the situation on 31
December 2012, while profit per share reached EUR 6.37.
2013
2012
2011
2010
2009
6,37
1,11
4,31
7,22
6,20
219,28
196,02
197,41
195,59
193,73
P/E ratio on the last day
10,4
52,4
19,7
12,9
12,9
P/B ratio on the last day
0,30
0,30
0,43
0,48
0,41
Official share price on the last day (in EUR)
66,30
58,01
85,00
93,10
79,90
Highest share price (in EUR)
72,00
85,00
113,00
102,00
94,50
Lowest share price (in EUR)
48,70
50,00
74,02
82,00
68,00
2,99
3,20
4,30
4,20
3,05
1.054.711
1.128.787
1.516.808
1.481.533
1.075.875
14,29
-31,75
-8,70
16,52
-10,07
5,64
4,57
4,06
4,77
3,39
Total return per share (in EUR)
19,93
-27,18
-4,64
21,29
-6,68
Market capitalisation (in EUR)
23.589.010
20.639.494
30.242.320
33.124.235
28.427.781
35.579
3.046
3.046
3.046
3.046
No. of issued shares on the last day
355.792
355.792
355.792
355.792
355.792
No. of shareholders on the last day
10.438
10.563
10.793
11.151
11.449
Net earnings per share (in EUR)
Book value of 1 share on the last day (in EUR)
Paid gross dividend per share (in EUR)
Total paid dividends (in EUR)
Return per share (in EUR)
Dividend yield (in EUR)
Number of treasury shares
2
Explanation of calculations:
• Net earnings per share is the net profit of the majority owner in the period in question divided by the weighted average number of outstanding ordinary shares held
by the majority shareholders.
• The book value of one share is the ratio of the equity of the majority owners at the
end of the period and the number of outstanding ordinary shares held by the majority owner at the end of the period.
• The P/E ratio (Price-Earnings Ratio) is the ratio of the market price of one share on
the final day of the period in question to the net earnings per share of the majority
owner.
• The P/B (Price-To-Book Ratio) ratio is the ratio of the price of one share on the final
day of the period in question to the book value of the share.
• Return per share is the ratio of the market price of one share on the final day of
the period in question to the corresponding price on the final day of the previous
period.
• The dividend yield is the ratio of the gross dividend value to the share price on the
ex-dividend date.
• Total return per share is the sum of the return per share and the dividend return.
• Market capitalisation is the multiple of the number of shares and the market price of
one share on the final day of the period in question.
• Paid gross dividend per share: paid gross dividend per share is the gross value of the
dividend per share for the previous year paid in the year in question.
Ownership structure of the Žito, d.d. company
31. 12. 2013
Number of
shares
Equity
stake (%)
2012
Stake in
voting rights
in %
Change,
percentage points
Equity stake (%)
MODRA ZAVAROVALNICA, d.d.
53.268
15,0
16,6
15,0
0,0
SLOVENSKA ODŠKODNINSKA DRUŽBA, d.d.
43.636
12,3
13,6
12,3
0,0
KD KAPITAL d.o.o.
31.740
8,9
9,9
8,9
0,0
KD GALILEO
18.235
5,1
5,7
5,1
0,0
KD DIVIDENDNI, DELNIŠKI
16.186
4,5
5,1
5,9
-1,3
KD RASTKO, DELNIŠKI
12.220
3,4
3,8
3,3
0,1
ZVEZA BANK CELOVEC
7.495
2,1
2,3
1,4
0,7
TOWRA S.A. – SPF
5.414
1,5
1,7
1,5
0,0
ERSTE GROUP BANK AG, WIEN
4.712
1,3
1,5
1,1
0,2
BOJC JANEZ
4.617
1,3
1,4
1,3
0,0
122.690
34,5
38,3
43,3
-8,9
35.579
10,0
0,9
9,1
355.792
100,0
100,0
0,0
Slovenia
335.684
94,3
95,1
-1,0
Abroad
20.108
5,7
4,9
1,0
OTHER OWNERS
TREASURY SHARES
TOTAL
100,0
Country breakdown
2
55.5% of a total of 355.792 shares are owned by the ten largest
shareholders. The number of treasury shares in 2013 increased to
10.0% of the total issue of shares. Management Board members
owned 5.0% of all issued shares at the end of the year; Supervisory Board members did not own any shares.
On 31 December 2013, the company had 10,438 shareholders.
The number of shareholders in one year reduced by 1.18%.
2
9 OPERATIONAL FRAMEWORK
9.1 Macroeconomic environment in 2013 and expectations in 2014
Short-term indicators show that the global economy improved
in the second half of 2013, while the situation in the Euro zone
and Slovenia started improving in the final quarter of the year.
The increase in industrial production of processing activities
in November 2013 amounted 1.9% and was the highest in the
period following March 2010. Despite this fact, Germany as the
largest European economy achieved 0.5% growth, which was
affected by local consumption and exports due to the continuing recession in some European and other countries. 1.7 per cent
growth is expected in Germany this year. According to the latest
predictions of the European Commission, economies will strengthen in all European countries, as well as those which are more
vulnerable; however, growth rates will vary in most countries.
The long-term consequences of the financial crisis cannot be eliminated overnight; the restoration of the economy will be fragile
and gradual, and therefore, the expected growth rates are quite
modest. 1.2% growth is expected in the Euro zone in 2014, and
1.8% growth in 2015.
Positive economic activity indicators for Slovenia are shown in
the continuing export growth. According to the predictions of
the European Commission, GDP for Slovenia remains negative,
by 1.6% in 2013 and 0.1% in 2014. The first assessments of the
national statistical office show that GDP fell by 1.1%, which was
influenced by the positive economic activity in the last quarter
of the year. Added value in processing activities increased in
the final quarter of 2013 by 2.1% after eight succesive drops. A
change at the annual level is expected in 2015, when the economy will expand by 1.3%. The key reason for the slow recovery
lies in delays in banking sector rehabilitation, the further credits
of companies and continuedconsolidation of public finance,
which will limit domestic demand. Measures to boost the economy and systematic restructuring of companies with promising
business programmes are necessary.
Private spending in 2013 was negative by 3.5% and in 2014 it
still lags behind by 2%. The reduction in public spending in 2013
was estimated at -2.7% and in 2014 -1.6%. Slovenian exporters
faces better predictions, mostly due to the improvement of the
situation in global markets, and will stimulate economic activity. 2.9% growth in exports is estimated for 2013, and in 2014
this would increase to 3.8%. In 2014, exports should increase by
4.5%. Unemployment will remain high (around 11%). Similarly to
other countries in the Euro zone, inflation in Slovenia in 2013 fell
to 0.8%. This was mostly influenced by changes in taxation (increase in VAT, excise duties, other taxes). The situation in the labour
market is still worsening. In eleven months in 2013, the average
number of the active labour force reduced by 2.5% compared to
the same period in 2012. Insolvency is still increasing: 2.4-times
more legal entities with 7-times greater debt were indebted in
comparison with 2008.
The predictions for South East Europe are more promising. Negative growth (-0.7%) is predicted for Croatia, a new EU member,
2
only for 2013. In the following years, growth will gradually increase and stand at 1.2% growth in 2015. Expectations in other former Yugoslavian countries are even more optimistic, since Serbia
will increase its 1.7% growth to 2% in 2015. In Montenegro, GDP
growth is predicted to be 2% in 2013 and 3% in 2015; in Macedonia, this year's growth will be 2% and 2.8% in 2015.
9.2 Development strategy
In November 2010, the Žito Group adopted the development
strategy for the period from 2011 to 2015. The economic and
market situation has drastically changed since before the crisis,
when the strategy was prepared, as did prices of key raw materials, which is why at the end of 2012, the Management Board
prepared, and the Supervisory Board approved, amendments to
the Žito Group’s strategy until 2015.
By the end of a five-year period, the Žito Group wishes to be one
of the leading manufacturers of food products in Slovenia. The
key guidelines of strategy implementation are: rationalisation of
assets, cost-effectiveness, and market consolidation and growth.
fewer brands in the future, but all brands will hold the first or
second position in the Slovenian market.
When amending the strategy, we paid special attention to activities, which we divided into:
-
central (baking, milling),
-
key (milling products, frozen programme, pasta, spices, rice, teas) and
-
non-strategic (sweets, chocolate).
The key goals of the strategy are to achieve revenue growth
again and to improve the profitability of the Žito Group by 2015.
We plan further development with potential takeovers in central
and key activities, and continue to seek new business solutions
in non-strategic activities.
In 2015, the operating revenue of the Žito Group will amount to
at least EUR 115.2 million, and compared to 2012, they will increase by 3.5%. Growth will be achieved by organising the portfolio
of products into key pillars – Bread, Contemporary Kitchen, Confectionery and Milling; focusing on the key pillars will also bring
about a change in market position. Thus Žito expects to manage
EBITDA is to rise to EUR 11.3 million by the end of the five-year
period, thus representing 9.8% of revenue. To achieve the planned EBITDA margin, the Žito Group will work intensively on
reducing the share of costs in revenues until 2015. The latter will
be achieved by reducing the complexity of the organisation and
portfolio, the concentration and automation of the production
2
process, and the optimisation of purchasing. Added value per
employee will be increased and raised closer to the level of the
most successful companies in the EU.
Within its revenue, the Žito Group plans to considerably increase
its export share. By 2015, the export share will represent more
than one fifth of all revenue. Regarding foreign markets, Žito will
concentrate on the markets of South East Europe, mainly on the
markets in Croatia, Bosnia and Herzegovina, and Kosovo. They
offer the most opportunities for an aggressive approach through distributors, connections with local manufacturers in production and development, acquisitions and connections with
international dealers entering the markets of the region.
2
10 RISK MANAGEMENT
Efficient risk management and swift responses to market conditions are indispensable for the company to successfully compete
on global markets. Even when risks cannot be completely eliminated, efficient risk management may help reduce their consequences to an acceptable level.
The Žito Group performs risk management through the centralised implementation of the development of the methodology of
risk management, and the assessment and classification of individual risks in the Control Department, while individual risk management is the responsibility of individual profit centres or business
functions. Risk management is the responsibility of organisational
units, the regular activities of which are substantively connected
primarily with a certain kind of risk. Business risks are managed
in a decentralised manner, financial risks in a centralised manner.
The process of risk management begins with a recognition of the
causes of risks, an estimation of opportunities and threats, and
of their consequences and the possibilities of taking action. The
detected risks are assessed with the scale of their impact on the
result and of the probability estimate that the impact will occur.
Exposure to individual risks is evaluated with additional criteria,
which enables the preparation of proposals and implementation
of measures for risk management.
The risks to which the Žito Group is exposed were redefined and,
considering the potential extent of damage and possibility of its
occurrence, a strategic map of risks was prepared.
Risk area
Description of risk
Method of management
Exposure
1.1. Realisation of development
strategy
probability and ability to realise
medium-term goals, connected with
external and internal factors
an efficient and transparent business planning system,
timely and relevant information for decision making,
a system of management by objectives, and suitable
human resources development
1.2 Food law
risk of tightening the law in the field
of food and of regulations for packaging labelling
monitoring proposed law amendments and keeping
packaging inventories as low as possible in order to
carry out changes within the transitional periods
1.3 Material procurement
possibility of interrupted
(irregular, unsuitable) deliveries or
uncompetitive prices
analysing risks of individual suppliers, establishing
partner relationships with suppliers, seeking alternative
materials and suppliers, adjusting the scale of purchases
to market conditions
Significant
1.4 Sales
risk of weakened competitiveness in
individual markets
preparation and implementation of marketing strategy,
good relationships with strategic customers, seeking
new customers and channels
Significant
Moderate
Minor
2
Risk area
Description of risk
Exposure
1.5 Customer supply
increase of fuel prices, risk of unsuitable deliveries or non-deliveries
operational planning of distances, analysis of contract
carriers and adoption of suitable measures in the case
of improper business cooperation
Moderate
1.6 Production
unplanned shutdowns, interruptions
or errors in production
operation in accordance with quality management
standards, business interruption insurance, regular preventive maintenance and measurements, anticipated
measures in case of emergency
Moderate
1.7 Product suitability
risk of manufacturing and selling
products that are unsuitable, of poor
quality and harmful to health
a built-in system of internal controls, performance
according to the HACCP system, swift and appropriate
response to complaints
Moderate
1.8 Introduction of new products
risk of not achieving the planned
income upon the introduction of
new products
suitable preparation of business plans and project
implementation, tight cooperation of key business
processes (sales, marketing, development, production)
Moderate
1.9 Employees
risk of losing key personnel, lack of
competent personnel
systematic work with key personnel, human resources
development, internal transfer of knowledge,
measuring organisational culture and climate
Minor
1.10 Occupational health and safety
danger of accidents or injuries in the
workplace
verification of technological procedures, education of
employees
Minor
1.11 Information resources
possibility of interruptions
to business processes due to
interruptions in the field of
information resources
regular maintenance and restoration of software and
hardware, independent security checks and anticipated
measures to eliminate interruptions
1.12 Loss of property
danger of property being alienated
or destroyed
prepared assessments of endangerment and a
protection plan, suitable insurance policies
Minor
1.13 Environment
danger of incidents with harmful
effects on the environment
preventive exercises and internal procedures prescribed
for incidents
Minor
Moderate
2
10.1 Operational risks
Operational risks include risks connected with the ability to
ensure short-term and long-term operating revenues, manage
business processes and maintain the value of assets.
Realisation of development strategy
The realisation of the development strategy refers to the probability of realising, and the ability to realise, medium-term goals.
The risks are connected with exterior factors, such as seller's
and buyer's markets, and with internal factors, such as the ability to adapt to changed conditions, the recognition and utilisation of market opportunities, and to internal process management. Risks are reduced by the formation and implementation
of short-term measures: an efficient and transparent system of
business planning, timely and reliable relevant information for
decision making, a system of management by objectives, reduction of operating costs and elimination of unnecessary activities,
and suitable human resources development.
Food law
Compared to the rest of the world, EU food policy is very restrictive. The legislation on genetically modified organisms includes high standards and demands for the safety of foodstuffs.
The Žito Group does not produce genetically modified food. A
regulation on the provision of food information to consumers
is being prepared which and will contain significant changes in
the field of food labelling, and regulations on authorised and
unauthorised nutrition and health claims are being adopted in
Europe. The risk is managed by monitoring the proposed legal
amendments and keeping the packaging inventory as low as
possible to carry out changes within the transitional periods.
Raw material procurement
We have recently witnessed great changes in the purchase market of raw material; prices have been inflating, speculative trading has been on the increase, and the availability of raw materials for individual manufacturers has become questionable. The
risk of fluctuating strategic raw material prices has also been
rising, and is assessed as high, as prices have become increasingly dependent on political and economic conditions, in addition
to weather..
2
Strategic raw materials
Impact on pre-tax profit or
loss in 2013
wheat
44 %
sugar
9%
rice
7%
durum semolina
4%
rock candy syrup
3%
cocoa butter
2%
cocoa solids
2%
Total
70 %
Explanatory note: Calculation of the potential impact of a change in the purchase prices of strategic raw material of +/10 % on profit or loss before taxation
The Group attempts to manage risks in this field by continuously
monitoring developments in the markets of key raw materials,
by monitoring the prices of strategic suppliers, by agreeing on
fixed prices and by making major purchases in global commodity markets. Relationships with suppliers are based on competitiveness, but the Group is still trying to establish long-term
partner relationships with them, which also ensures a suitable
quality of raw materials and their timely delivery.
The risk of a change in supply prices relates primarily to the
threat of a rise in the supply prices of materials and services that
the Group is unable to transfer to its customers by raising sales
prices because of conditions in the market. Sales contracts with
customers clearly define the timing of price increases, and the
Žito Group has been attempting to utilise its size and assert its
negotiating power to a greater extent. In the event of a forecast
increase in supply prices as a result of developments in world
markets or weather conditions, the Group makes a short-term
increase in its inventories of the raw material in question, insofar
as this is physically feasible and economically justified. Due to
the unpredictable changes since the outbreak of the economic
and financial crisis, the Group has mostly substituted long-term
raw material purchases with short-term ones, thus making them
regular.
Sales
Sales risks relate to competitiveness when selling products and
services in individual markets and comprise the risk of suitable
marketing strategy (brands, price and quality competitiveness
of products, packaging etc.), the risk of the increased bargaining
power of large dealers and commercial networks, and the risk of
an increased market share among foreign discount dealers. The
risks are reduced by the quality preparation and implementation of a marketing strategy based on a detailed product, customer and seller's market analysis. We nurture good relationships
with strategic customers and intensively seek new customers
and sales channels. An important distribution channel is our
own retailing, which was shifted to the independent Žito maloprodaja d.o.o. company in 2010. In the future, we wish to open
additional retail units and thus reduce our dependence on large
dealers
Customer supply
With almost no exceptions, the Žito Group uses road transport,
which is mainly influenced by oil prices. The transport of Žito
2
products to customers is generally carried out by contractual
partners, and their contracts include the possibility of changes
in transport prices upon changes in oil prices. Logistic risks are
mitigated by the optimisation of travel routes, which reduces the
number of kilometres travelled. Considering the complexity of
distribution and the nature of the products (they need to be delivered quickly and, depending on the type of product, transported in three temperature regimes), non-delivery management is
an important area. It is managed by operational planning and
tight cooperation between individual business processes (sales–
marketing–production). These processes are under our control.
The number of non-deliveries in 2013 was in accordance with set
objectives, as was their value.
Production
Production risks refer to interruptions to production processes.
We manage these risks by means of our operational organisation, applying the ISO 9001:2008 quality management standard.
By upgrading the system, the Group has also taken into account readiness guidelines for extraordinary circumstances, which
facilitate continuous production in the event of specific events.
A plan has been prepared for all such foreseen risks. Within the
scope of production risks, special care is devoted to the functioning of key equipment, infrastructure (uninterrupted supply
from energy sources), and to the availability of production capabilities. Production risk is higher in line production, and is managed by the competence of employees and regular production
line maintenance.
Product suitability
In our line of business, the production of quality and safe product
is particularly important, as they directly influence the health and
well-being of people. We operate according to the HACCP food
safety system. The food safety management system is a preventive system based on risk analysis. This enables the timely implementation of measures and controls to ensure fewer potentially
harmful products in the market.
Introduction of new products
Development risks also include risks connected with achieving
the planned profitability upon the introduction of new products.
The risks are reduced by the suitable preparation of business
plans, including market research and the anticipated strategy of
introducing new products to the market, and in the implementation phase by a systematic and project approach, with regular
monitoring of the achievement of goals, and defining corrective
actions in cases of deviations.
Employees
Risks arising from human resources relate to the availability of
suitable personnel. A continuous increase in competitiveness
in buyer's markets, as well as the current economic crisis dictate a reduction of costs for employees and labour costs, which
tightens the conditions for social dialogue. Thus greater attention has been paid to suitable and timely information provision, responses to questions and obscurities emerging among
2
employees regarding redundancies, creating a healthy working
environment, and the problem of quality workers and experts
leaving. Special attention is paid to key personnel by monitoring
their education and development, by increasing their responsibilities in the workplace, and by encouraging them to take over
new assignments and allocating them to new workplaces.
Occupational health and safety
The risk of workplace injuries is mitigated by the regular training of employees, primarily regarding occupational safety
when using protective equipment and by investments in new
equipment and upgrades.
Information resources
Information resources are individual information services and
applications. Risks are associated with providing a standardised
and compatible information system, with providing the continuous transfer of information and with maintenance and the
appropriate security of information. These risks are managed by
planning measures for specific types of disruptions in the functioning of the information system, a prescribed process for allocating user access and rights, an appropriate server and communication structure, the introduction of contemporary safety
solutions, contractually-governed relations with outsourcers,
and by the periodic maintenance and upgrading of software and
hardware
Loss of property
The risk of loss of property refers to property risk management.
This includes e.g. the possibilities of fires, burglaries, machine
breakdowns and production failures. The Žito Group transfers
key property risks to insurance companies, thus reducing its
exposure to them.
Environment
The production activity of Žito is among those activities that are
less burdening for the environment. The Žito Groups strives to
achieve high ecological standards of operation, such as consistent waste separation and the use of environmentally friendly
materials. In 2013, no event harmful to the environment occcured.
2
10.2 Financial Risks
In accordance with the International Financial Reporting Standards (IFRS), financial instruments are divided into market risks
(interest rate risk and foreign exchange risk), credit risks and
liquidity risks. Financial risks are monitored and managed by the
Finance Department, while credit risk is monitored thoroughly
Risk area
by the Recovery Department, which reviews customers’ credit
ratings, monitors the repayment of debts, and, if necessary, proposes limits on sales to specific customers. The chapter 'Goals
and policies of risk management' in the accounting section specifies financial risks and their influence on Žito’s performance.
Description of risk
Exposure
Credit risk
risk of customers' non-payment
restricting maximum exposure to individual
customers, active receivables management,
calculation of credit ratings
Significant
Foreign exchange risk
possibility of loss due to unfavourable
exchange rate fluctuations
open position management, monitoring of
financial markets, protection with the use of
suitable financial instruments
Moderate
Interest rate risk
possibility of loss due to unfavourable
exchange rate fluctuations
monitoring exchange rate fluctuations,
negotiations with credit institutions
Moderate
Liquidity risk
possibility of lack of liquid assets for servicing business and financial liabilities
agreeing on lines of credit and planning cash
flows in advance
Moderate
10.3 Strategic map of risks
The greatest attention is required by the risks highlighted in red
according to the ratio between the probability of their occurrence and damage. The risks highlighted in yellow do not require
as much attention, and the least dangerous risks are highlighted
in green.
2
Extent of damage
Type of risk
Criterion
Minor
Up to EUR
50,000
Moderate
Probability
Significant
EUR
EUR
50,000–
250,000-
250,000
500,000
Very significant
Above EUR
500,000
High
Above 20%
Medium
Low
Between 10
Between 5
and 20%
and 10%
Very low
Below 5%
1 Business risks
1.1 Realisation of development
strategy
1.2 Food law
1.3 Material procurement
1.4 Sales
1.5 Customer supply
1.6 Production
1.7 Product suitability
1.8 Introduction of new products
1.9 Employees
1.10 Occupational health and safety
1.11 Information resources
1.12 Loss of property
1.13 Environment
2 Financial risks
2.1 Credit risks
2.2 Foreign exchange risks
2.3 Interest rate risks
2.4 Liquidity risks
In 2013, procurement risks saw the greatest increase, as they already
had in 2012. Conditions in raw material markets remain very unpredictable, and prices of individual raw materials are reaching record
levels. Due to speculative trading, natural disasters, a food crisis and
social unrest provoked by high food prices and lack of raw material
availability, raw materials have become the most important competitive advantage of companies in the global economy.
2
11 ANALYSIS OF BUSINESS PERFORMANCE
11.1 Business operations
The audited consolidated annual financial statements were compiled in accordance with the International Financial Reporting
Standards (IFRS).
in thousand EUR
Žito Group
Žito d.d.
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
116.098
111.778
115.716
111.173
110.861
108.219
105.338
106.432
103.329
103.726
993
-1.313
147
-768
-139
1.956
-856
304
-704
-244
1.483
1.175
1.404
4.662
1.881
818
756
951
4.069
1.090
Gross operating profit
118.575
111.639
117.267
115.067
112.602
110.992
105.237
107.686
106.694
104.571
Costs of goods, materials and services
76.491
70.605
81.418
77.236
76.493
75.807
71.049
78.710
75.675
76.088
Labour costs
28.869
28.387
25.482
24.742
24.396
22.192
22.277
19.384
18.584
18.508
Write-offs
7.619
6.796
6.526
5.851
7.288
8.231
6.014
5.936
5.090
5.840
- amortisation
6.543
6.315
6.029
5.529
5.671
5.694
5.348
5.364
4.816
4.534
700
579
820
1.780
1.298
670
410
679
1.655
1.026
EBITDA
11.438
11.588
9.050
7.606
8.799
9.786
10.834
8.340
7.127
4.263
Operating profit or loss
4.895
5.273
3.021
5.457
3.128
4.092
5.486
2.976
5.691
3.109
113
155
147
267
675
397
443
361
434
827
Financial expenses
1.386
2.769
1.252
4.785
994
1.556
2.728
1.258
4.799
894
Net financial outcome
-1.272
-2.614
-1.104
-4.518
-319
-1.159
-2.285
-897
-4.364
-68
Pre-tax profit or loss
3.623
2.658
1.917
940
2.809
2.933
3.201
2.079
1.326
3.042
925
539
0
279
331
855
539
0
279
284
Deferred taxes
-1.040
426
-398
-271
-278
-138
-123
-412
-297
-261
Net profit or loss
1.659
2.546
1.519
389
2.200
1.940
2.540
1.667
750
2.496
Net profit or loss of majority shareholder
2.187
2.546
1.519
391
2.201
-
-
-
-
-
Net sales revenue
Change in the value of inventories
Other operating revenue
Other operating expenses
Financial revenue
Tax on profit
2
The Žito Group generated net sales revenue of EUR 110,861 thousand, which
is 0.3% less than in 2012; 84 % of total sales revenue was generated in the
domestic market, while 16% was generated in foreign markets. A detailed
overview of sales results by individual programmes and markets is given in
the Marketing section.
Capitalised own products and other operating revenues amounted to EUR
1,881 thousand. Other operating revenues were significantly lower than in
2013, since EUR 3,380 thousand referred to the revaluation of real property at
Ljubljana – Šmartinska. Other operating revenues mainly relate to compensation received for damages, gains on the sale of property, plant and equipment,
and the reversal of provisions for severance pay and subsidies drawn.
The operating expenses of the Žito Group totalled EUR 109,474 thousand,
which is 0.1% less than in 2012. The ratio of operating costs to gross operating
revenue was 97.2%, or 1.9 percentage points higher than in 2012. Most significant among operating expenses are the costs of goods, materials and services, which account for 67.9%. Labour costs accounted for 21.7%, depreciation
and other write-offs 6.5%, and other operating expenses 1.2%.
Žito Group – share of costs in gross operating profit
100 %
90 %
80 %
5,6 %
5,1 %
6,5 %
21,7 %
21,5 %
21,7 %
20,0 %
21,2 %
18,0 %
69,4 %
67,1 %
67,9 %
68,6 %
68,3 %
67,5 %
73,1 %
2010
2011
2012
2013
6,4 %
6,1 %
24,3 %
25,4 %
22,7 %
21,3 %
64,5 %
63,2 %
64,4 %
2009
70 %
60 %
Žito d.d. – share of costs in gross operating profit
100 %
90 %
80 %
5,5 %
5,6 %
7,4 %
5,7 %
20,0 %
21,2 %
18,0 %
17,4 %
17,7 %
22,7 %
21,3 %
20,0 %
21,2 %
18,0 %
68,3 %
67,5 %
73,1 %
70,9 %
72,8 %
64,4 %
68,6 %
68,3 %
67,5 %
73,1 %
2009
2010
2011
2012
2013
4,8 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0%
Costs of goods, material and services
Labour costs
Write - offs
The costs of goods, materials and services in the Žito Group amounted to EUR 76,493 thousand, 1.0% lower than in 2012. The costs of
goods and materials rose by 0.6%, and costs of services were lower
by 1.7%. Costs of legal and consulting services, rents, hired workers,
insurances and municipal services increased the most. We were
most successful in reducing marketing costs.
Labour costs amounted to EUR 24.742 thousand and were 1.4%
lower. The total number of employees was reduced by 26 or 2.2%,
taking the Žito Group's workforce to 1,137 at the end of the year.
50 %
40 %
30 %
20 %
10 %
0%
Costs of goods, material and services
Labour costs
Write - offs
Write-offs at the Žito Group level amounted to EUR 7,288 thousand,
were 24.5% lower than in the previous year. EUR 5,671 thousand
refer to amortisation, which increased by 2.6%.
Other operating expenses are mostly provisions for lawsuits and
contributions for construction land in the amount of EUR 1,298 thousand.
2
Consolidated earnings before interest, taxation, depreciation and
amortisation amounted to vEUR 8,799 thousand, which is 15.7% higher than in 2012 (other operating revenue from the revaluation of
real property at Ljubljana – the Šmartinska location in the amount of
EUR 3,380 thousand are not considered in the calculation for 2012).
Such EBITDA represents a 7.8 per cent share of gross earnings and is
1.0% higher than in 2012.
Consolidated EBIT amounted to EUR 3,128 thousand, 50.5% more
than in 2012 (other operating revenue from the revaluation of real
property at Ljubljana – Šmartinska location in the amount of EUR
3,380 thousand are not considered in the calculation for 2012).
Žito Group – EBIT, profite before taxation and net profit or loss
6.000
4.000
2.000
0
2009
Financial expenses amount to EUR 994 thousand and are substantially lower than in 2011. The reason is the revaluation of the financial
investments in Mlinotest and Mlinopek at the end of 2012.
Pre-tax profit amounted to EUR 2,809 thousand, which is three times
higher than in 2012. Net tax return amounted to EUR -647 thousand.
It refers to to the abolition of deferred taxes (mainly to the utilisation
of tax losses) and to tax on profit.
In 2013, Žito Gropu created EUR 2,200 thousand net profit, or 464.9%
more than in 2012. After the sale of minority stakes in Žito Šumi d.o.o.
and Šumi bonbon d.o.o., the share of minority owners is minor and
the profit of the majority shareholder is almost the same as the
Group's profit.
The Company generated a net profit of EUR 2,496 thousand in 2013,
which is 232.9% more than in 2012.
2010
Profit of loss
2011
Profit before taxation
2012
2013
Net profit or loss
Žito d.d. – EBIT, profite before taxation and net profit or loss
6.000
4.000
2.000
0
2009
Profit of loss
2010
2011
Profit before taxation
2012
2013
Net profit or loss
2
11.2 Equity and liabilities
The balance sheet total of the Žito Group amounted to EUR 117,521 thousand on 31 December 2013, which was 2.5% less than at the
end of the previous year.
in thousand EUR
Assets
Long-term assets
Žito Group
31 Dec 2013
in %
Žito d.d.
31 Dec 2012
in %
31 Dec 2013
in %
31 Dec 2012
in %
65.782
56
70.834
59
62.310
52
64.018
53
57.289
49
60.055
50
41.464
34
43.440
36
Other long-term assets
8.493
7
10.780
9
20.846
17
20.578
17
Short-term assets
51.715
44
49.627
41
58.167
48
56.844
47
Inventories
15.791
13
18.159
15
13.628
11
16.147
13
Operating receivables
29.593
25
29.380
24
32.518
27
32.768
27
6.331
5
2.089
2
12.021
10
7.929
7
23
0
25
0
1
0
6
0
117.521
100
120.486
100
120.477
100
120.868
100
Fixed assets
Other short-term assets
Deferred costs and accrued revenues
Assets
Fixed assets representing 56.0% of assets in the structure declined by 7.1% compared to the previous year. Current assets represented 44.0% of assets and were 4.2% higher. Among the latter,
inventories recorded the sharpest decline, of 13.0% or EUR 2,368
thousand. The key reason for the reduction of inventories is the
fall in the prices of grains after the 2013 harvest. Assets intended
for sale, cash assets and operating receivables increased by 0.7%.
2
in thousand EUR
Liabilities
Žito Group
31 Dec 2013
in %
Žito d.d.
31 Dec 2012
in %
31 Dec 2013
in %
31 Dec 2012
in %
Equity
70,223
60
69,152
57
73,958
61
71,507
59
Provisions
5,220
4
5,854
5
2,544
2
2,919
2
Liabilities
39,452
34
44,008
37
41,538
34
45,093
37
Long-term liabilities
2,160
2
8,900
7
2,160
2
8,900
7
Short-term liabilities
37,292
32
35,108
29
39,378
33
36,193
30
Financial liabilities
22,115
19
27,252
23
23,536
20
29,120
24
Operating liabilities
17,336
15
16,756
14
18,001
15
15,973
13
2,626
2
1,472
1
2,437
2
1,350
1
117,521
100
120,486
100
120,477
100
120,868
100
– by maturities:
– by content:
Accrued costs and deferred revenues
Liabilities
In the structure of equity and liabilities, capital represented
59.8%, which was 2.4% more than at the end of 2012. Provisions
represented 4.4% of the balance sheet total and fell 10.9% in one
year. Non-current and current liabilities stood at EUR 39,452
thousand, down 10.4% compared to the previous year. Financial
liabilities of EUR 22,115 thousand comprise the majority. In comparison with the previous year, they fell by EUR 5,137 thousand
or 18.8%. Operating liabilities amounted to EUR 17,336 thousand
and were 3.5% higher than at the end of the previous year.
2
11.3 Kazalniki uspešnosti poslovanja
Kazalniki uspešnosti poslovanja
Skupina Žito
Žito d.d.
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
EBITDA margin
9,6 %
10,4 %
7,7 %
6,8 %
7,8 %
8,8 %
10,3 %
7,7 %
6,7 %
4,1 %
return on sales (ROS)
1,4 %
2,28 %
1,31 %
0,35 %
1,98 %
1,8 %
2,4 %
1,6 %
0,7 %
2,4 %
return on equity (ROE)
2,4 %
3,70 %
2,19 %
0,56 %
3,16 %
2,8 %
3,6 %
2,3 %
1,0 %
3,4 %
return on assets (ROA)
1,3 %
2,14 %
1,28 %
0,32 %
1,85 %
1,5 %
2,1 %
1,4 %
0,6 %
2,1 %
added value (AV) in EUR million
41,9
40,5
35,0
32,7
34,8
34,5
33,8
28,3
26,0
27,5
AV per employee in EUR thousand
28,3
28,3
28,2
27,7
31,2
31,2
33,1
32,6
31,7
34,8
labour costs as a proportion of AV
68,9 %
70,2 %
72,7 %
75,7 %
70,1 %
64,3 %
66,0 %
68,5 %
71,5 %
67,4 %
106,3
82,2
77,3
89,8
82,8
102,5
79,4
75,5
87,7
78,8
days sales outstanding
70,4
76,3
81,9
91,3
93,3
81,7
89,9
100,8
113,0
113,7
days payables outstanding
57,4
57,4
53,5
59,5
65,3
53,7
56,4
53,2
60,6
70,0
Profitability indicators
working capital management indicators
days inventory outstanding
Explanation of calculation:
• days inventory outstanding: average inventories * 365/(production costs of sold products + purchase value of goods)
• days sales outstanding: average trade receivables * 365/operating revenue
• days payables outstanding: average trade payables * 365/costs of materials, goods and services
In 2013, performance indicators were generally better than in 2012
and better than planned. Return on sales (ROS), return on equity
(ROE) and return on assets (ROA) stood at 1.98%, 3.16% and 1.85%,
respectively.
year, when it amounted to EUR 32,670 thousand. Added value per
employee amounted to EUR 31,162, which is 12.6% more than in
2012. The share of labour costs in value added decreased by 5.7%
to 70.1%.
In 2013, the Žito Group generated added value in the amount of
EUR 34,812 thousand, which is 6.6% more than in the previous
The effective management of working capital has become particularly important in the difficult economic conditions. The Žito
2
Group has taken numerous measures to improve the management of inventories and receivables, which is also reflected in the
indicators. The Group's days inventory outstanding stood at 82.8
days; in a period of one year the fixed term reduced by 7 days. The
financial crisis is also reflected in the stock of receivables. Days
sales outstanding rose from 91.3 to 93.3 days. Some of the Group's
customers faced liquidity problems, while the payment terms of
some major customers were extended. Days payable outstanding
grew to 65.3 days.
Ratios
Žito Group
Žito d.d.
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
Self-financing ratio
55,9 %
59,8 %
57,0 %
57,4 %
59,8 %
57,5 %
61,6 %
58,9 %
59,2 %
61,4 %
Debt ratio
31,5 %
24,8 %
30,0 %
28,3 %
24,0 %
32,3 %
26,8 %
31,1 %
28,9 %
24,1 %
Leverage
40,3 %
35,3 %
38,6 %
38,2 %
32,7 %
39,8 %
35,8 %
38,8 %
38,2 %
33,4 %
Current ratio
1,31
1,38
1,26
1,41
1,39
1,43
1,50
1,36
1,57
1,48
Quick ratio
0,76
0,90
0,79
0,90
0,97
0,95
1,11
0,94
1,12
1,13
3,76
5,57
2,96
2,17
3,49
3,04
5,80
2,92
2,37
3,82
32,6 %
38,8 %
-5,3 %
-39,0 %
0,0 %
28,7 %
34,0 %
-7,8 %
34,4 %
0,0 %
Financing indicator
Solvency indicators
Credit worthiness indicator
Interest coverage ratio
Cash flow ratio
Cash flows in operations/short-term liabilities
Explanation of calculation:
• Self-financing ratio: capital and reserves/liabilities
• Debt ratio: financial liabilities/(financial liabilities + capital)
• Leverage: net liabilities/(capital+ net liabilities)
Net liabilities: financial liabilities + operating liabilities – cash
• Current ratio: current assets/current liabilities
• Quick ratio: (current assets –inventories/current liabilities)
• Interest coverage ratio: EBIT/interest expenses
2
Less indebtedness and improved operations are the factors that
had most influence on the financing indicators. In total, liabilities decreased by 10.4% in 2013. Financial liabilities decreased
by 18.8%, while operating liabilities increased by 3.5%. In terms
of maturity, the share of current liabilities is decreasing, while
the share of long-term liabilities is increasing. The self-financing
ratio increased to 59.8%. The debt ratio decreased to 24.0%. The
leverage indicator decreased from 38.2 to 32.7%.
The Žito Group is capable of regularly settling its liabilities, as
confirmed by its liquidity ratios. The current ratio of 1.39 indicates that the immediate liquidation of all current assets (assuming
all current assets are fully liquid) would more than cover all current liabilities. The quick ratio of 0.97 indicates that the immediate liquidation of all liquid assets and receivables would cover
all current liabilities, 53.5% of which are liabilities to banks.
The interest coverage ratio indicates to what extent EBIT can fall
without jeopardising the repayment of interest. A higher indicator is more favourable for creditors. The Žito Group generated
enough operating profit to settle its interest expenses. This indicator improved in 2013 compared with 2012, i.e. it amounted to
3.49.
2
12 SALES AND MARKETING
12.1 Sales by sales area
Explanatory note: data on sales in Chapter 12 include invoiced
realisation from product sales, but exclude additional discounts,
super rebates and cash discounts, retail sales of merchandise and
revenues from service sales; therefore, the data in this chapter differ
from the data in the accounting section.
In 2013, the Žito Group generated product sales of EUR 110.5 million, which is 0.4% less than in 2012. Growth in sales was achieved in exports and the EU market. On the domestic market, Žito
Group sold EUR 92.3 million products, or EUR 0.9 million less
than in 2012. The value of sales in the domestic market thus dropped by 1%.
Žito Group sales per market in EUR thousand
in thousand EUR
Year 2013
Year 2012
Ind/2012
Slovenia
92.327
93.246
99,0
Exports
18.141
17.632
102,9
SE Evropa
6.572
7.058
93,1
Hitschler
4.899
5.459
89,7
EU
5.662
3.810
148,6
East and OCT*
1.008
1.306
77,2
110.468
110.878
99,6
TOTAL
*OCT = Overseas Countries and Territories
Share of sales revenues per markets in 2013
South-Eastern
Evrope 6 %
Slovenia
84 %
Export
16 %
Hitschler 4 %
EU 5 %
East and OCT* 1 %
The Žito group generated 84% of total sales revenue in the
domestic market, while 16% of revenue was generated in foreign markets. In total sales, the share of exports compared to 2012
grew by 0.5%. The highest share was in sales in SE European
markets, followed by the EU market, with a 5.1% share in sales,
and Hitschler territory with 4.4%. The remaining lesser part of
export sales were accounted for by the East (Russia and Ukraine)
and overseas countries (USA, Canada, and Israel).
2
Slovenia
•
consumers more frequently move from renowned brands to
retailer’s brands,
Deteriorating economic conditions also affected
the performance of the Žito Group.
•
consumers actively monitor promotion activities and purchase products with reduced prices,
•
consumers change locations of purchase by shopping more
in discount stores,
•
consumers go to smaller shops in order to avoid buying
unnecessary things,
•
consumers make fewer purchases per month,
•
consumers buy only basic food and avoid buying »luxury«
products.
Economic trends worsened in 2013, especially in the last quarter
of the year, when the decline in retail sales was the biggest in
the past ten years, and was mostly reflected in food retail sales
shops. According to SORS, real turnover in retail trade in food,
beverages and tobacco compared to 2012 decreased by 4%. The
year 2013 was additionally marked by the high prices of some
raw materials and a further decrease in sales at merchandisers,
where a reduction was noted for the fifth consecutive year, and
the increase in sales in discount stores.
In addition to the deteriorating economic situation, the following
external factors had a negative impact on the sales volume of
the Žito Group in Slovenia:
•
further strengthening and expansion of discount chains,
•
transformation of the strategies of existing retailers,
•
fall in purchasing power and higher unemployment.
Limited consumer purchasing power, the reduction of the average value of the purchase basket and purchases in 2013 additionally impacted the modified consumption of final buyers.
Consumers are increasingly feeling the impact of the economic
downturn and as a result pay more attention to prices.
Prudence and caution regarding purchases are reflected in the
following actions:
In the Slovenian market, the Žito Group generated sales revenue
of EUR 92.3 million, which is EUR 0.9 million or 1% less than in
2012. The drop in sales was recorded in most groups of goods,
with some exceptions. In baking, we faced a drop in sales among
traditional retailers and consumers who are buying cheaper products.
A lot of energy and attention was directed at the fieldwork and
training of our sales staff. With the help of our customers, we
were able to reduce the amount of unsold goods. Increased cooperation by sales team with other sectors within the company
and the focus of the sales team on external environment was
observed, based on more visits, intensive work with service personnel and the adjustment of activities to the final consumer of
each key account. The focus of our entire sales team in Slovenia
was set to each individual goal.
In 2013, we decided to focus on strengthening our brands according to their individual strategies. We were also actively seeking
2
new sales channels and at the same time including production surpluses in the retail brand segment.
New organisational structure of the Žito
Group in the Slovenian market
We partially changed the organisation of our sales team at the end
of 2013, since we divided the joint department of public users and
the Horeca into two departments, which now operate independently, but still homogenously and cooperatively. This organisation enables both departments to focus on their buyers, since they are 100%
engaged in their respective fields, i.e. through managerial functions
as well as sales teams in the field. In December 2013, we added a
new department of agents which will enable the realisation of set
goals with principals, for which agent contracts were signed in 2013.
South-Eastern Europe
SE Europe remains the most important export area of Žito Group,
since we market our most significant brands there: Zlato Polje, Šumi,
Krex and others. Worse economic situation, worse macroeconomic
indicators, worse financial discipline and strong increase in the sale
of retail brands impacted the drop of sales in this region. This mostly
affected product groups such as rice, rusks and sweets, categories
where traders intensively develop retail brands, which are intensively increasing in these markets.
Hitschler
Hitschler expected that in 2012 no new increase in sales would occur
in 2013. Despite the initial prediction that the quantities from 2012
would not decline, in spring 2013 they decline by approx. 1900 tons.
The main reduction was in mixed packaging for an important buyer
for low-price orders, regarding which price negotiations continued
into the second half of the year. Negotiations were successfully concluded and the result was a major order for 70 tons of new products
from the soft fruit chewy candy group. The order was realised at
the end of December. Soft fruit chewy candy is a new product in
Hitschler's programme, which is quite well accepted and sales of
which will increase in 2014.
European Union
The market of the European Union (excluding Hitschler GmbH)
is our second most important export market which achieved
considerable growth in 2013. The largest increase was noted in
bread and bakery products, as well as durable bakery products
(rusks). Despite strong competition in these markets, we are
succeeding in the frozen bread segment so-called pre-baked
products. Along with successful sales in 2013, we managed to
conclude some important agreements with buyers, which will
enable growth in 2014. Sweets remain an important segment in
this area.
Eastern Europe and Northern America
In North America we noted an increase in the sale of durable
bakery products and confectionery. In Eastern Europe, there was
a large decrease due to the loss of an important buyer in the
sweets segment..
2
12.2 Sales by Sales Pillars
Deleži stebrov v prodaji skupine Žito v letu 2013
Sales of the Žito Group by pillars, in thousand EUR
+2 %
44.611
2012
45.293
2013
BREAD PILLAR 41 %
+2 %
CONTEMPORARY
KITCHEN 26 %
28.080
28.556
-4 %
24.014
CONFECTIONERY 21 %
23.069
-6 %
14.331
MILLING 12 %
BREAD PILLAR
In terms of the scope of realisation, the Bread pillar still accounts
for the largest share of Žito Group sales, and increased by 2%
compared to 2012. The largest decrease was noted in the Milling
pillar, which took a 12% share of total sales in 2013, while the
Contemporary Kitchen pillar saw 2% growth in comparison with
2012. Sales in the onfectionery pillar in 2013 fell by 4%.
SCONTEMPORARY CONFECTIONERY
KITCHEN
13.496
MILLING
Bread pillar
Sales by product groups in the Bread pillar in 2013
Bread and bakery products 70 %
Pastries 11 %
Durable bakery products15 %
Confectionery 2 %
Sandwiches 2 %
2
The year 2013 was quite important for the Bread pillar. We launched
our pre-baked products in international markets and kept the leading
position in Slovenia. In 2013, we received 12 golden medals for quality
from GZS; consumers gave the Best Buy Award to our fresh bakery programme, i.e. for the best price/quality ratio.
Our goal in 2013 was to spread information about our best-selling breads, Jelen, Hribovc and Stoletni. This goal was achieved with intensive
television and mailing communication about their key advantages and
the connection with the Žito cover brand. We also successfully sold the
buckwheat bread Ajdov kruh z orehi and the new Jelen wholegrain.
When developing this kind of bread, we considered modern food trends
that favour the consumption of wholegrain products rich in fibres; with
a selected and carefully implemented technological procedure we ensured long-term freshness – a feature that is appreciated by consumers of
all types of Jelen bread.
The sale of pre-baked products and fine bakery products is on the rise,
since consumers can get warm and fresh bread and bakery products;
the smell of baked bread in the shop attracts people to purchase these
products. Frozen semi-baked products enable sales in foreign markets,
where we are especially interesting due to the originality of our products.
We dedicated many developmental activities to this. We also prepared
the Pizza štručka, Ječmenova štručka and a series of rustic bread rolls
with an attractive cracked crust image.
Baked products are mostly connected with holidays, which every year
present a challenge where we can excel. The carnival season was traditionally characterised by our doughnuts. Slovenians ate more than 4 million
doughnuts in that season. Fresh baked doughnuts attracted buyers to
go to temporary bakeries in large shopping centres and key sales locati-
ons in Slovenia. Valentine's Day and Gregorjevo feature hearts and birds.
Easter and Christmas abounded with poticas, where we added our coconut potica, cherry cake and rolled nut cakes under our Žito brand. Such
a fresh portfolio offered products for many Slovenian Christmas tables.
The Kranjski burek, which attracted great interest and recognition due to
the interesting combination of cottage cheese, sauerkraut and sausage,
was also an important part of our development and activities in 2013. We
also added two triangular pizzas to the fast-food range, which successfully refreshed the offer in this popular segment.
We are very proud of taking the lead in toast bread, which together with
bakery products and sandwiches is also included in Žito's corporate
image. New spelt toast was added to the range of standard tastes, since
its specific taste and balanced composition quickly acquired a circle of
loyal buyers.
We continued our activities involving tastings, campaigns and other
softer tools for sales promotion. Special attention was devoted to activities at sales locations, where the fight for buyers is most intensive. Our
joint promotion department in Žito Group is working intensively on
improving the efficiency of activities at sales locations. With this approach, we preserve the presence of our promotion agents at sales locations, thus increasing the recognition and presence of our breads in comparison with the in-store bakeries of large retail chains.
Emphasis was also given to special projects at certain retailers, such as
‘The Supplier Introduces Itself', 'Buy Slovenia', 'Slovenian Basket' and similar. We are continuing activities to educate sellers in fresh bakery departments at all large retail partners. Our sales presentation programme has
been additionally upgraded with a motivation programme.
2
In 2013, we faced the challenge of the Croatian producer Mlinar coming
to Slovenia, which established a chain of 15 stores in quite a short period,
thus offering bread, bakery products and confectionery. Due to exceptional price conditions, they managed to enter some retail chains and
other services providers like Petrol, where they wanted to destabilise
the market, especially the sale of burek and bakery products. Žito's reply
showed results at the end of the year, and with an aggressive approach
through our product portfolio, quality, professionalism and exceptional
service, we slowly turned the trends in our direction.
Contemporary Kitchen pillar
Sales by product groups in the Contemporary
Kitchen pillar in 2013
Tea 22 %
Herbs 15 %
Pasta17 %
Rice 15 %
Frozen and refrigerated foods 13 %
Milling products 15 %
Cereals 3 %
Zlato polje and Maestro were the also the main brands used at the Cooking Academy managed by Andrej Murko the winner of the famous Slovenian TV show (»Gostilna išče šefa«) in 2012.
Various cooking workshops were organised in spring and autumn, which
were very popular. We cooperated on the new TV show (»Gostilna išče
šefa«), where we cooperated with the Tuš company and implemented
communication activities at our sales locations.
Teas 1001 Cvet also gained an advantage in comparison with their competition. Due to the cold winter, which was exceptionally successful for
our Nordic team which we sponsor, our teas were also successful. After
the successful renovation of the packaging, we also modernised communications ways, and surprised the market with unusual new tastes
and a special New Year limited edition, thus putting the brand on the
throne among teas in Slovenia. Some herbal teas were wrapped in bags
for Horeca and we can now,enter them in this sales area, too.
The frozen foods image was adapted to the corporate image of Žito, and
we also added wholegrain dumplings. Consumers gave these the Product of the Year 2014 award.
Pasta also received an award from GZS, with the gold award for quality
going to rolled soup noodles. We also followed modern food trends by
developing attractive wholegrain spelt noodles, thus offering a wholegrain product to numerous fans of this type of grain. We also refreshed
the assortment of »durum« pasta with a new form of pasta.
2
Confectionary pillar
Sales by product groups in the Confectionery pillar in 2013
Chocolate 31 %
Sweets and chewing gum 52 %
Pastries 9 %
Cookies2 %
Products for baking 6%
2013 was quite a demanding year for the confectionery segment. The pressure of discounts and competition remained strong, so our position in the
sweets, chocolate and pastry sales segments even worsened.
In the case of chocolate we focused on dark, cooking and rice chocolate,
where we have a strong position and where the competition is less aggressive than in the case of hazeltnut and dairy products and chocolate with
extras. Cooking chocolate was available in 400 g packaging; the Chef series
was once againfeatures with the Gorenjka doll; in spring we refreshed the
entire spring line. In the dark chocolate segment, we expanded the success
of our dark chocolate by lowering the share of cocoa and cranberry as well
as mint; the New Year limited edition included chocolate with smarties and
special packaging that was designed by a design student; mini chocolates
were added to the boxes of chocolates. In the case of pastry, we also launced chocolate slices, and a tasty jaffa cake, which was quite positively welcomed by consumers. We also refreshed our line of rolled cakes with three
new tastes. A prize game was organised for hazelnut chocolate fans, which
helped us increase sales in this segment. Rice chocolate fans entered the
prize lottery for a trip to Bali.
In the sweets segment, the achievement of goals in the markets of former
Yugoslavia is most demanding, since we have still not managed to take the
desired position in the market. Despite intensive development in the soft
sweets segment, we were not able to compensate for the drop in sales of
the traditionally strong segments of hard and caramel sweets. Prize games
and campaigns slightly slowed the fall in sales, but did not stop it.
We were very successful in developing chewing bonbons – we developed a new oily chewing candy for a foreign partner which received good
responses from consumers. In development, we followed the trend of
developing functional sweets. In the Herba chewing bonbons line, we
added cranberry flavour with added extract of popular acai berries.
Milling pillar
Sales by product groups in the Milling pillar in 2013
Flour 81 %
Feeding stuff and grains 14 %
Additives and mixtures 4 %
Yeast 1 %
2
As much as 80% of Žito Group sales in the Milling pillar is accounted
for by flour, because it includes flour for everyday consumption and
the repro products programme, i.e. the sale to bakeries and major
flour consumers.The Milling pillar in 2013 saw a fall in sales, especially due to the opening of a flour providers market and great price
aggressiveness from Hungary, Serbia, Romania and Bulgaria.
We planned sales campaigns for the segment of flours for wider
consumption in 2013 in an effort to preserve our market share and
growth in quantities; however, this succeeded only partially. Acti-
vities in the flour category focused on sales locations, where we
noted a slight fall in demand and an increase in sales of flour retail
brands. The fall in purchasing power was also reflected in this, normally untouchable category of products, where loyalty to brands
has been quite solid.
In the reproduction programme, we were forced to reduce the difference in prices due to exceptional price pressure from the competition, which resulted in reduced sales revenue.
12.3 Sales by Distribution Channels
In comparison with 2012, Žito Group saw an increase in sales in
some major retail chains in 2013, especially in the sales of products to discount chains and public users, as well as the Horeca
segment. Retailers or retail companies comprise the most important sales channels for the Žito Group in Slovenia, accounting for
a good three quarters of sales. In terms of sales value, Horeca
and public users, repro products and our own retail sales follow.
Žito Group sales realisation in the domestic market by distribution channels
-1 %
68.698
2012
2013
67.850
+7 %
11.342
12.153
-6 %
-9 %
3.141
Retailersi
Horeca and
public consumption
10.061
9.450
2.873
Retail sale
Repro products
2
Retailers
Žito's retail sales
We sold EUR 68 million worth of products in retail chains in 2013,
or 1% less than in 2012. The sales structure in large retail chains in 2013 recorded a drop in sales mostly at large sales sites,
since sales in smaller shops increased. The largest drop in sales
in retail chains was the consequence of the outflow of buyers to
the discount shops segment as well as to sales locations of independent retailers. In the case of major key buyers and the major
part of merchandise, we noted an increase in value sales, while
quantities were at the same level as in 2012 or slightly increasing. This is mostly the result of price pressure and greater sales
during special offers. This is because consumers are increasingly
more rational when purchasing, and actively search for discounts and choose retail brands increasingly more often.
In 2013, Žito's retail sales noted a decrease in sales and continued to
lose its share in the total sales of Žito. Our own retailing is an important generator of liquid assets, an appropriate channel for selling
goods of secondary quality and important for building the overall
image of the company..
Horeca and public consumption
We also noted that, as in 2012, the penetration of competitors through retailers like Lidl, Spar and Hofer, is relatively simple and fast,
since they produce brand products and flour as repro products
for them. In 2013, we also noticed that smaller bakeries are cutting
production and that certain bakeries are planning to terminate it
or take a different approach to offering bakery products. Financial
discipline also worsened in 2013, which is most intensively reflected
in minor purchases of repro products and materials. By monitoring
receivables and preventing additional losses of income due to insolvency, we are trying to minimise this effect and preserve our role
as a supplier for purchasers who have most difficulties with making
payments.
Both sales segments show an opportunity for additional growth
and expansion, so we divided the Horeca sales channel and public
consumption into two independent departments, with the goal of
focusing the sales team and managing each individual sales channel.
Both departments have four focused agents each, as well as heads.
Sales in both segments remained stable in 2013 and progressed in
accordance with expectations. Compared to last year, we recorded
a 7% increase. We expect further growth in both segments, mostly
due to the accession of the wide assortment of products of our principals, who will be actively included in sales in the first quarter of
2014.
Repro products
The year 2013 was quite turbulent for repro products, since there
were some exceptional pressures on prices, mostly after the publication of the purchase prices of the most important material, wheat.
The market responded quite aggressively to lower purchase prices,
which was mostly noted at large buyers of repro products, which
more often used providers from Eastern Europe, Croatia and Serbia.
2
13 PRODUCT SUPPLY
The product supply chain includes purchasing, production, storage and transport processes. These are closely interconnected
and their basic purpose is to meet needs and provide high-quality
price-competitive products. Supply processes are being integrated and optimised, thereby strengthening their association with
other functions. Responsiveness to market needs is being constantly optimised and costs reduced.
The initial process in the supply chain is the purchase of raw materials, packaging and other goods. Supply must be on time and
in accordance with the quality requirements applicable in the
company. The management of purchase costs and their constant
optimisation are becoming increasingly important. We are developing a strategy of partnerships with suppliers, and also inform
key suppliers on our development directions.
We operate in an increasingly competitive environment, with the
result that the costs of material have the greatest effect on our
market position. This is why operations in purchasing in 2013 were
intensively oriented to the rationalisation of costs, simplification
of processes and optimal planning.
Considering the global situation in purchase markets, where there
is quite a lot of speculative trading, we opted for an optimal strategy of purchasing strategic materials. We follow the markets and
stock exchanges and also focus on strategic partnerships with
suppliers. Due to unpredictable markets in materials, the changing prices of stock exchange materials and currency movements,
purchase activities were focused on reducing purchase risks. We
were unable to completely avoid price increases, even though we
have a risk protection strategy in place. Negative impacts were
noted in the field of various materials: cocoa, fats, dairy and meat
products.
We continued negotiations with local grain producers, and during
harvest purchased more than 30% of our annual demand. When
selecting contractual partners, we continue to cooperate with
suppliers who are able to support the developmental process; at
the same time we followed the process of buyer-oriented improvements, since buyers demand healthy, quality and safe food.
Suppliers are selected and evaluated on the basis of selected criteria. We also periodically assess suppliers.
The principles of quality, flexibility and responsiveness are observed in the field of the storage and distribution of products. On
a daily basis, we supply approximately 2,800 sites, on a monthly basis 3,500 and on an annual basis 4,800. This is performed
by contracted carriers who travel approximately 475,000 km per
month. Due to their nature, products must be distributed quickly,
and are transported in three temperature regimes (normal, refrigerated and deep-frozen). The refrigerated regime is used for the
warehousing and distribution of pastries, fresh dough and similar products, while the deep-frozen programme demands special
conditions during warehousing and transportation to customers
at no higher than -18℃. Specialised vehicles (road tankers) are leased for the transportation of unpackaged flour. All vehicles are
fitted for the transportation of foodstuffs, and we work in compliance with HACCP standards, which are regularly supervised.
Durable products are warehoused in two distribution centres, in
Ljubljana and Maribor (DC Maribor was closed in 2013), while fresh
products are delivered directly from bakeries.
2
The prices of road tolls and other services increased in 2013. Increased costs were compensated for by shortening routes and reducing the number of kilometers. On highway routes, we increased
the prices of transport by 5%. Because of the optimisation of distances, the average monthly number of kilometres travelled has
been constantly falling for several years and in 2013 was below
the previous year by 7.3%, or 454,841 km. We continued to reduce
the number of non-deliveries, increase productivity in warehouses and centralise dispatch. The costs of transport increased in the
Milling Pillar due to the closure of the mill in Ljubljana, since all
shipments are sent from Maribor.
Our main goal depends on merging supplies of durable products
and fresh products. We were also active in centralising the supply
of sandwiches and pastries in central Slovenia. We terminated the
separate supply of frozen products and the supply of pastries and
sandwiches in the Gorenjska region; we combined three routes
in the Štajerska region and reduced the costs of movement in
central Slovenia. Direct sales will be retained for the Natura and
Bio programmes. With Mercator, we set up a new ordering sysem
for fresh products and made agreements with Tuš regarding the
supply of pre-baked products in the central warehouse.
Our goal in logistics in 2013 was to reduce all costs, especially to
reduce the costs of transport, and at the same time to improve
services for buyers. We succeeded in achieving this goal by implementing numerous projects.
2
14 INVESTMENTS
We successfully concluded the investment in PC Bread and the
bakery in Maribor. We invested in modernising the line for producing pastries, automated bread and pastry freezing in the freezing
tunnel, and continued and automated the packaging of frozen
bread and pastries.
By increasing the capacities of fresh and semi-baked frozen products production, we started an investment in a warehouse and
distribution centre for frozen products at the same location (-20°C)
of 1080 pallet slots. The investment was successfully concluded in
the middle of the year. In this way, we ensured maximum supervision of the quality of products, from production to delivery to
final buyers, and of planning optimal inventories. This investment
will help us to increase our export capacities of frozen bread and
pastries.
We also invested in packaging toast and rusks. The new equipment
enables the packaging of whole sliced loaves, as well as halves.
Packaging bags can be closed by clips that enable opening and
closing of the bag after use. The automatisatoin of slicing and
packaging toast, and with the change in packaging technology,
we took a large step towards increasing the competitiveness of
packed sliced breads in the domestic market and enabling entry
to foreign markets.
In 2013, we successfully concluded the centralisation process of
milling production at the Intes Maribor location by moving and
modernising the equipment for packaging flour and additives.
We also invested in the modernisation of production equipment
at various locations.
Some investment was dedicated to renovating production premises and to following the high demands of the International Food
Standard and HACCP standards, as well as to increasing energy
efficiency.
Company/value in EUR
2013
2012
Indeks
3.351.038
6.895.276
49
317.835
155.590
204
3.633
9.614
38
Žito Maloprodaja d.o.o.
26.728
12.150
220
Šumi nepremičnine d.o.o.
14.597
2.212
660
3.713.831
7.074.842
52
Žito d.d.
Šumi bonboni d.o.o.
Intes Storitve d.o.o.
Total
Investments of Žito Group in 2009 2013 period In EUR million
8
in EUR milion
The investment plan in 2013 was adapted to this period of crisis
and the lower consumption of food products. EUR 3.7 million was
intended for investments in 2013. We implemented key investments dedicated to improving the quality of products and increasing productivity.
6
4
2
0
2009
2010
2011
2012
2013
2
15 QUALITY CONTROL SYSTEM
In 2013, we continued to expand the scope of certification
according to the IFS standard, version 6, for the Vič and Ribnica
bakeries. This standard encompasses the demands of a significant buyer. We maintain 9 IFS certificates at the highest demand
level, as well as the ISO 9001 quality system management standard. In autumn, we had several unannounced quality management controls regarding food safety. Our results were excellent,
and we further strengthened our position as a reliable partner.
In the field of special buyer demands, we maintained the HALAL
and KOSHER certificates, as well as the BIO certificate. The scope
of all three certificates was expanded with new products in 2013.
We invested a lot of energy in training employees who work
in contact with foods, in order to improve our system. We also
intensified the supervision at entry of materials and packaging,
as well as our demands to suppliers. The management system
incorporated all novelties in the field of food safety management, new risks and legal demands, as well as analysis procedures. By further globalising our purchase market, the number of
incidents is also increasing. We had to recall two products from
the market.
We also intensified our complaint management system in the
field and exceeded the set goals in this area; in purchasing, we
noted an increase in complaints regarding quality, which is confirmed by the efficiency of our entry control procedures.
2
16 PLANS FOR 2014
On 11 December 2013, the Supervisory Board of the Žito Group
approved the Business Plan of the Žito Group and Žito d.d. for
2014, according to which the Žito Group plans to generate more
sales and profit. Net profit of EUR 2.3 million is planned. Earnings
before interest, taxes, depreciation and amortisation (EBITDA)
will amount to EUR 8.7 million, and the share of EBITDA in revenues will amount to 7.7%. Added value per employee will be EUR
28.8 thousand.
Total planned growth in sales for the next year amounts to
1.8%, with the domestic market remaining at the 2013 level, and
growth is planned in foreign markets. Sales growth will be the
highest in the Confectionery pillar, amounting to 3.6%, and from
0.7% to 1.9 % in the other pillars. Higher sales are also expected
in our own retail sales, where some new shops are planned to
open.
Material costs and the original costs of goods used will amount
to EUR 57.1 million, which is 1.9% more than in 2013. The increase
in these costs is most affected by the high prices of cocoa, dairy
products, fats, herbs and packaging. The markets of Žito’s most
important raw materials have stabilised in recent months, but
prices remain very high.
The planned wheat price in 2014 is slightly lower than the average purchase price in 2013. Planned sugar prices and prices of
materials are somewhat lower than average purchase prices in
2013.
EUR 5.4 million will be intended for investments. The largest
investment will be for the setup of a freezing channel with continued freezing and automated packaging in the Vrhnika bakery.
We are not planning any disinvestments that will significantly
impact profit or loss in 2014.
Our primary tasks in 2014 remain sales growth and strengthening the power of our own brands which, alongside further consolidation of production and rationalisation of resources, will
have important effects in the form of higher profitability.
The Žito Group will regulate insecure conditions in the market of
raw materials with numerous measures, including new purchasing paths and optimising ordering from suppliers.
3
Annual report 2013/ Sustainable development 75
3 SUSTAINABLE DEVELOPMENT
3
Annual report 2013 / Sustainable development / 76
17 EMPLOYEES
The Žito Group had 1,137 employees as at 31 December 2013.
The number decreased by 26 or 2.2% compared to the end of
2012. The proportion of temporary employees was 2.6%; all
others are permanently employed.
The Žito Group employed 14 new employees in 2013, while the
employment of 40 employees terminated. Some departures
were the result of retirement, while others were the result of the
reorganisation and centralisation of business processes.
Number of employees by individual company in the Žito Group as at 31 December 2013
company
31 Dec 2013
31 Dec 2012
Difference
Index
Žito, d. d.
799
811
-12
98,5
137
146
-9
93,8
120
123
-3
97,6
81
83
-2
97,6
1.137
1.163
-26
97,8
TOTAL
One of the more important tasks of the HR department is to optimise the occupancy of work positions, which is also managed by
providing for the internal mobility of employees. This also creates career opportunities for individuals in the Group. Potential
redundancies resulting from the rationalisation of work processes are resolved in a manner causing the least harm to employees and with natural wastage due to retirement. Conversely, we
have occasionally noted a deficit in certain types of profile on
the labour market. Bakers, food engineering assistants, forklift
operators in cold storage, and maintenance workers are among
the most sought-after personnel.
During annual vacations and holidays, students worked part-time via student employment services. Workers were also
occasionally employed via employment agencies, due to the
frequent fluctuations in orders in the market. We employed an
average of 61 of these types of worker per day, who performed
ten thousand hours of work per month.
The average age of employees is 45.5 years. The Group employs
52% women and 48% men.
3
Structure of employees by level of
education on 31 December 2013
Education
Higher and postgraduate 13%
General secondary 21%
Vocational 41%
Elementary or incompleted
elementary 25%
Most employees work in production, which is also reflected in
the educational structure: two thirds of workers have vocational
or lower education. Compared to the previous year, the educational structure did not change noticeably.
Employee benefits
As a benefit, all of our employees receive additional collective
accident insurance, and those who are permanently employed
also receive supplementary pension insurance.
We have holiday facilities at four locations, which can be used by
our employees and retired employees.
In Žito, we are aware that the challenges of the modern age
and global competition can only be faced with the assistance of
competent and qualified workers and by providing continuity in
key positions. Therefore, more and more resources are invested
in knowledge and the development of all employees. The largest portion of this was spent on fees for professional seminars
for key personnel and for training on occupational safety.
In 2014, more funding and effort will be put into the development of human resources. By developing skills in the field
of management and communication, we wish to contribute
to a better working environment, to productive relationships,
to encourage more teamwork among employees and to make
them more goal-oriented, responsible and motivated to achieve
common objectives.
Occupational health and safety
A high level of sick leave is a problem for the company, both in
terms of providing wage compensation to absent employees
and replacing absentees. Therefore, we stress the need for a safe
working environment and health protection. We regularly identify factors that cause illnesses, such as poor working conditions
– ergonomics, environmental concerns, occupational safety,
etc. For all positions and technologies, we monitor the risk of
accidents and injury to health, which are periodically assessed
and maintained at an acceptable level by means of appropriate
protective measures.
3
In 2013, average sick leave (excluding maternity leave) was 5.7%
and remained at the same level as in 2012.
Comparison of sick leave in 2009–2013
7%
6%
5%
4%
2,5 %
3,2 %
2,3 %
2,7 %
2,7 %
3,3 %
3,7 %
3,1 %
3,0 %
3,0 %
2009
2010
2011
2012
2013
3%
2%
1%
0%
Sick leave costs for the company
Sick leave costs for the ZZZS
Due to the nature of the Group's operations, we have a relatively
high number of disabled employees. The Žito Group employed
138 disabled persons at the end of 2013, which is 12.1% of employees. The proportion of disabled persons increased by one percentage point compared to 2012. Most cases of disability arise
due to allergies to ingredients in production. The Group ensures
that disabled persons are able to continue to work in their positions, and we respect the limitations set out in the medical advice
they receive. We provide for the re-qualification of employees
who are no longer able to do their job. Through extensive occupational safety programmes, the appropriate technical capacities and work organisation, we try to operate as preventively as
possible to reduce the occurrence of disabling events.
3
18 SOCIAL ENVIRONMENT
18.1 Public relations
Communication is a process which is necessary for the existence
of both companies and an individuals. It is an essential part of the
life of any organisation, which enables the transfer of information,
resolves and eliminates disagreements, co-designs the organisational culture and contributes to competitive advantages. Communication has long ceased to be only a matter of exchanging
information on a subject, but rather a comprehensive building of
relationships between individuals.
The Žito Group also works on building relationships with all stakeholders. In 2013, one of the main activities involved comprehensive communication with employees, the media, suppliers,
partners, owners and those who were indirectly or directly connected with all segments of our operations.
Relations with employees
The main communication tool in relations with the employees
is our internal newsletter »Drobtinice«, whch was issued three
times in 2013 in a printed version and twice in an electronic version. This newsletter combines key corporate information related to the operations of Žito Group, events that we participate
in connection with our brands, product novelties, news from HR,
current information regarding the economic situation and our
industry, as well as an entertainment section.
We continued to inform our employees via other internal channels: regular meetings and staff meetings, info boards and the
intranet. These channels are intended for notifying employees
on constant changes and novelties within current operations.
In order to strengthen genuine interpersonal relations, we also
introduced birthday congratulations, where the President of the
Management Board of Žito Group congratulates employees by
giving them a Gorenjka chocolate. The Management Board also
issued personal gratitude notes attached to payslips at the end
of the year.
Two events characterised the year 2013 regarding relations with
employees. The first was corporate in nature. In February 2013,
the members of the Management Board of Žito Gropu held meetings with employees. They visited all seven Žito's profit centres
and presented the strategy, operations and plans for the Žito
Group. Employees were also able to ask questions about operations, and members answered them on-site. The other important event was a picnic with employees. The picnic took place
instead of the traditional New Year’s party, which was cancelled
due to cost cutting. In May 2013, we once again revived Žito's
sport games and team building;1150 employees were invited
and participation was higher than 50% despite the rain.
We also continued our internal competition for all employees at
bakeries, i.e. for the best idea for new breads and pastries. The
best ideas were rewarded and realised.
3
Relations with the media
The media constitute one of the most important stakeholders,
since they are the bridge between our company and our target
audience. In 2013, we strove to proactively and constantly provide all information to the media. We notified them about our
operations, product novelties, important milestones etc. At the
end of 2013, we organised a breakfast with journalists, where
the President of the Management Board and other members
as well as the marketing director talked about operations in the
current year. They presented the current economic situation and
its impact on Žito Group's operations, as well as future plans and
trends in the food industry.
We were one of the main players in the food-processing industry, mostly from the aspect of material purchases (wheat, sugar,
corn, cocoa) and the promotion of products of domestic origin.
The year 2013 was also characterised by effective crisis communication management in cases of contracts with employees via
agencies and in the case of the fires on the soup ball frying line
in PC Bread and bakery in Maribor. As one of the key players in
reporting, we took on a proactive role in communication and
notified the public via the media on all adopted measures.
We regularly updated our online media centre, which was also
translated into English as part of the renovated corporate website. The website now contains all important information about
the Žito Group.
Relations with investors, shareholders
and business partners
Along with key communication activities with employees and
the media, we also maintained regular communication with
investors, shareholders and other business partners.
We organised a festive event at the opening of our new production line and cooling plant at PC Bread and bakery for business
partners and the media; for business partners and the local
community, we organised a meeting celebrating the successful
reduction of the noise caused in Melj by a Žito mill.
We continue to have successful relations with investors and shareholders by notifying them about all business data via the SEOnet and the independent »Shareholders« section on our website.
Public relations (about products)
Regardless of how good and innovative our products are, they
will not sell without good marketing activities. These can have
the best effect if they are supported with regular communication activities, which are used to notify the media and other target groups. Within these activities implemented in 2013, we are
especially proud of our new website for Žito Group's brands and
our active communication with (potential) consumers via online
social media (Facebook). Via our website, Facebook and press
releases, we regularly informed the public on our new products
and put great emphasis on the Best Buy award, as well as the
other 13 awards for the best qualiy of bread, bakery products
3
and pasta made in traditional evaluation of the bakery industry
at the Chamber of Commerce and Industry in Slovenia.
Because we wish to continue to raise consumer awareness about
the importance of healthy food and the the advantages of fresh
meals for families, we continued to promote a healthy lifestyle
with the Zlato polje Cooking Academy project (cooking workshops with renowned chefs). We also renovated Žito's shop in
Ljubljana (Plečnikove Arkade) in order to promote a healthy lifestyle and encourage buyers to buy locally produced food, since
the shop offers products from Slovenian eco-farms. The project
has become an example of best practice in successful cooperation between farms, producers and shops.
The partnership with the TV show »Gostilna išče šefa« where
competitors cooked with Žito's products was also excellent promotion.
Visits to the production plant of Gorenjka chocolate in Lesce were
also popular, since the visitors included representatives of various media as well as pupils from schools and kindergartens. We
cooperated with Gorenjka on the organisation of the traditional
Chocolate Festival in Radovljica. The only real Slovenian chocolage also received special attention internationally, winning the
Gold Quill for the project »Sweet Messages by Gorenjka«, which
was designed to celebrate the 90th anniversary of Gorenjka.
Relations with consumers
Sales success depends on many factors, the most important factor being a satisfied consumer. If the consumer is satisfied, they
will spread the word about great products, thus preserving current and obtaining new customers. In performing all these activities, we did not forget our buyers, with whom we were establishing and maintaining relationships with individual brands
in Žito’s portfolio via promotions of different products, prize
competitions and communication on social networking sites.
We regularly informed them (via the media and website) about
recalls of products. We introduced Žito's portal on modern guidelines in nutrition, because we are well aware that consumers
seeking information mostly on the internet (www.okuspodobrem.si). Twice a month, we also send news (»Dobro«) with useful advice for nutrition to more than 30,000 users.
18.2 Social responsibility and sustainable development
Žito Group is committed to social responsibility and sustainable
development in the environment in accordance with responsible
operations. The key pillars of our social responsibility are
sponsoring sport and cultural events with a touch of national
significance; humanitarian activities concerning socially
endangered families and children in need; ensuring sustainable
3
development of the local environment in which we operate; and
an ecologically friendly relationship towards the environment.
in Maribor, so that they had a month of healthy meals, since the
school promotes healthy nutrition.
Our primary humanitarian and donor commitment in 2013
was, and will continue to be, helping children and families in
socially challenged environments. In cooperation with the
Slovenian Association of Friends of Youth (ZPM), we donated
doughnuts to 10,000 children from socially deprived families.
We also helped ZPM Moste-Polje at the 2nd Chocolate Festival in
Radovljica by implementing the project “Punčka za botre” (Doll
for Godfathers). We invited socially responsible companies and
institutions to buy the Gorenjka doll – a mascot designed by Miki
Muster 33 years ago. In this way, each company donated EUR
1000 to the “Botrstva” fund; the total contribution was EUR 6000.
During the December holidays, Žito and its 30 shops all over
Slovenia joined the charitable campaign “Kruh za prjatlja”
(Bread for a Friend), where buyers were able to add some money
to buy bread for those who cannot afford it. This campaign
was upgraded with the traditional queen of holiday tables in
Slovenia – potica.
At the humanitarian event “Največja Lions sladica”, which was
organised for the fourth year in a row in cooperation with
Gorenjka and Cockta by the members of the Lions Club Forum
Ljubljana, we collected funds that were then dedicated to the
Blind and Partially Sighted Youth in Ljubljana. They purchased
so-called small rooms for children, which the blind and partially
sighted require to adapt to the environment.
Within the scope of the humanitarian project “Podari nasmeh”
organised by the Krog institute and dedicated to helping and
supporting the rehabilitation of children from Bosnia and
Herzegovina, we enabled an unforgettable experience in the
chocolate plant for 20 children who visited Gorenjka. They
visited the production plant and made their own chocolates; we
also enabled sufficient stock of chocolate for their entire stay in
Slovenia.
Furthermore, we donated 500 kilograms of wholegrain Jelenov
kruh bread to children of the Rozman Stane Elementary School
We also did not forget about children who are often deprived
of sweets at that time. We donated half a million Šumi bonbons
to children in institutions, which received most votes during
the donation competition. The donation was taken over at the
traditional Christmas event in Ljubljana.
With various donations we also supported cultural (Jasa
Association), sport (women’s handball team Ajdovščina) and
humanitarian associations (Lions Club Ljubljana Rožnik, Sonček
Association).
Throughout the year, we supported 14 social organisations,
including Banko Hrane, Karitas Ljubljana and Maribor, Rdeči
križ Ljubljana and Maribor, MDD Mehamet, Vincencijevo zvezo
dobrote, ZPM Ljubljana Moste, Zavod Malči Beličeve, Zavod
za usposabljanje Janez Levec, OŠ Toneta Čufarja Jesenice, OŠ
Jakoba Aljaža Kranj, Društvo prostovoljcev Ljubljana and Center
za usposabljanje, delo in varstvo Dolfke Boštjančič.
3
18.3Sponsorships
We support many events, including the Chocolate Festival,
Slovenian Marketing Conference, Portorož Business Conference,
Sempl and Ljubljana Festival. Last year, we dedicated our funds
to IV Založba (police union) and the Slovenian Association of
Small Shareholders.
The Žito Group has been supporting athletes and sport events
for many years, since they are an important inspiration for
younger generations on how to live a healthy life. With our 1001
cvet brand we supported the successful Slovenian Nordic team
as well as other clubs:
-
GT Team Rider,
-
Olimpija Hockey Club,
-
Rog Cycling Association,
-
Stand-up paddle surfer Manca Notar,
-
OK Planica,
-
Krka NM Women’s Handball Club
-
Slovenia’s Chess Association.
The Group was also presented with sponsorship activities at the
most important sport events, such as the ‘Zlata lisica’ Ski World
Cup competition and each year’s final of the Ski Jumping World
Cup in Planica.
3
19 ENVIRONMENTAL PROTECTION
We implemented an expanded energy consumption review at all
locations of the Žito Group.On the basis of this review, we will
implement activities to increase energy efficiency, i.e. reduce the
consumption of all energy, as well as increase the exploitation of
excess energy or heat in production processes. In 2013, we stopped using oil for heating purposes and changed to natural gas
at some locations. We will continue this process in 2014.
Despite the increases in the prices of municipal services, we
managed to decrease this item in 2013. Improved separation of
waste also contributed to this, along with cost management. We
introduced two fractions that are excluded at the source of origin. We supervise the distribution of waste to our ECO section
and reject inappropriately separated waste. Improved separation
of waste is also the consequence of the additional training of
services providers and cooperation with providers of waste transport services.
We rationalise our transport channels every year. We use various
solutions, combine transport routes and terminate irrational supplies.
In 2013, we will persist in keeping short purchase chains, where
is deemed possible. These chains will be shortened in the case of
Slovenian grain producers, as well as ordered bio production of
grains. In this way, we respond to the demands of consumers and
at the same time reduce loads on the environment due to shorter
transportation and stimulating domestic bio production.
Via the Association of Ecological Grain Processors, co-established
by Žito, i.e. for the needs of own production of bio products, we
will ensure 100% supply with bio grains. Due to increasing dome-
stic sales of bio products and exports of bio products, in cooperation with consulting services, we are concluding new contracts
with Slovenian farmers for approx. 100 hectares of land. We have
concluded a contract for Slovenian ecological kamut and biological porridge. Based on ordered bio production we stimulated
some dormant farmers, who have started planting biological grains.
4
Annual report 2013 / Financial report 86
4 FINANCIAL REPORT
4
Annual report 2013 / Financial report / 87
20 FINANCIAL STATEMENTS
20.1 Consolidated financial statements of the Žito Group
Consolidated income statement of the Žito Group
Item
1. Net sales revenue
Explanations
2013
2012
23.2
110.860.622
111.173.210
-138.883
-768.418
42.318
32.325
2. Change in value of inventories of goods and work in progress
3. Capitalised own products and services
4. Other operating revenues (including revaluation operating revenues)
23.3
1.838.281
4.629.700
5. Costs of goods, materials and services
23.4
-76.492.733
-77.236.485
6. Labour costs
23.5
-24.395.873
-24.741.575
7. Write-offs
23.6
-7.287.679
-5.851.270
8. Other operating expenses
23.7
-1.297.756
-1.780.195
9. Financial revenue from shares
23.8
216.929
47.863
10. Financial revenues from loans granted
23.9
21.640
9.604
11. Financial revenues from operating receivables
23.9
498.411
210.009
12. Financial expenses from impairments and write-offs of investments
23.10
0
-3.526.787
13. Financial expenses from financial liabilities
23.11
-896.672
-955.943
14. Financial expenses from operating liabilities
15. Profit or loss
16. Tax on profit
23.11
23.12
-159.372
2.809.234
-330.546
-302.367
939.669
-278.995
17. Deferred taxes
23.13
-278.375
-271.178
2.200.313
389.495
2.200.631
-318
390.801
-1.306
6,37
1,11
18. Net profit/loss
Attributable to:
Net profit of the Žito Group appertaining to ordinary shareholders
Net profit of the Žito Group appertaining to minority shareholders
Net earnings per share (EPS)
Basic
The accounting policies and notes are constituent parts of the consolidated financial statements.
4
Consolidated statement of comprehensive income of the Žito Group
Item
2013
Net profit for the accounting period
2012
2.200.313
389.495
Revaluation of available-for-sale investments
119.192
267.982
Deferred tax
-33.644
-48.237
87.858
248.411
85.548
219.745
2.310
28.666
2.288.171
637.906
Attributable to majority interests
2.288.489
639.212
Attributable to minority interests
-318
Revaluation of available-for-sale investments, net amount
Foreign currency translation reserve
Other components of comprehensive income
Total comprehensive income
-1.306
Consolidated balance sheet of the Žito Group
Item
Explanations
ASSETS
31. 12. 2013
31. 12. 2012
65.782.738
70.834.350
189.494
258.896
189.169
258.567
325
329
57.289.398
60.054.563
1. Land and buildings
39.052.289
40.214.497
2. Equipment
17.469.413
16.044.228
4. Property, plant and equipment under acquisition
372.364
3.563.683
5. Advances for property, plant and equipment
395.332
232.155
A. LONG–TERM ASSETS
I. Intangible assets, and non-current deferred costs and accrued revenues
23.16
1. Long-term property rights
5. Other non-current deferred costs and accrued revenues
II. Tangible fixed assets
23.17
III. Investment property
23.18
6.409.113
6.761.568
IV. Long-term financial investments
23.20
1.449.944
3.025.535
1.430.192
2.996.135
1. Investments in other undertakings
4
Item
Explanations
2. Long-term loans
V. Long-term operating receivables
23.20
2. Long-term trade receivables
3. Long-term operating receivables from others
VI. Deferred tax receivables
23.13
B. CURRENT ASSETS
19.752
29.400
66.878
59.698
0
0
66.878
59.698
377.910
674.090
51.714.664
49.627.366
I. Assets (disposal groups) available for sale
23.21
930.383
723.012
II. Inventories
23.22
15.791.483
18.158.688
10.147.409
12.376.726
396.094
306.552
5.157.178
5.420.935
90.802
54.475
28.730
47.200
28.730
47.200
1. Materials
2. Work in progress
3. Products and merchandise
4. Advances for inventories
III. Short-term financial investments
23.20
2. Short-term loans to others
IV. Short–term operating receivables
23.23
2. Short-term trade receivables
3. Short-term operating receivables due from others
V. Cash and cash equivalents
23.24
C. SHORT-TERM DEFERRED COSTS AND ACCRUED REVENUES
TOTAL ASSETS
29.592.701
29.379.852
28.383.731
28.051.003
1.208.969
1.328.849
5.371.367
1.318.614
23.356
24.526
117.520.759
120.486.241
70.222.776
69.151.746
14.846.937
14.846.937
23.949.827
23.949.827
LIABILITIES
A. CAPITAL
I. Called-up capital
23.25
II. Capital reserves
III. Profit reserves
10.049.472
8.192.780
IV. Own shares held in treasury (as a deduction item)
-2.326.437
-472.056
V. Profit or loss brought forward and net profit for the financial year
23.919.490
22.936.000
-223.490
-309.038
VI. Revaluation surplus
23.26
4
Item
Explanations
VII. Minority interest capital
6.977
7.295
5.220.092
5.854.284
1. Provisions for pensions and similar liabilities
1.637.720
3.335.886
2. Other provisions
3.582.372
2.518.398
2.159.773
8.899.773
2.158.333
8.898.333
2.158.333
8.898.333
B. PROVISIONS AND NON-CURRENT ACCRUED COSTS AND DEFERRED REVENUES
C. LONG-TERM LIABILITIES
23.27
23.28
I. Long–term financial liabilities
2. Long-term financial liabilities to banks
II. Long-term operating liabilities
1.440
1.440
5. Long-term operating liabilities
1.440
1.440
37.291.961
35.107.989
19.956.988
18.353.751
19.954.500
18.351.263
2.488
2.488
17.334.973
16.754.238
14.214.751
13.163.018
73.610
719.145
3.046.612
2.872.075
D. SHORT-TERM LIABILITIES
II. Short-term financial liabilities
23.28
2. Short-term financial liabilities to banks
4. Other short-term financial liabilities
III. Short-term operating liabilities
23.29
2. Short-term trade payables
4. Short-term operating advance payables
5. Other short-term operating liabilities
E. SHORT-TERM ACCRUED COSTS AND DEFERRED REVENUES
23.30
TOTAL AND LIABILITIES
2.626.156
1.472.448
117.520.759
120.486.241
4
Consolidated statement of cash flows
Item
2013
2012
2.809.234
939.669
Net financing costs
658.103
898.476
Gain/loss on the disposal of fixed assets
-44.323
-106.503
5.983.357
5.369.265
Adjustment to value of intangible assets
125.287
214.644
Adjustment of investment value
100.920
3.526.787
Strengthening investment property
161.085
-3.379.665
9.793.663
7.462.673
-623.081
937.691
Increase in inventories
2.367.204
1.093.938
Increase in operating liabilities and accrued costs and deferred revenues
2.065.556
1.572.870
Increase in provisions
1.263.132
-372.676
14.866.474
10.694.496
-241.538
0
-820.728
-956.988
13.804.207
9.737.508
Acquisitions of new property, plant and equipment, and investments
-3.813.060
-6.799.324
Receipts from sale of property, plant and equipment, and investment
336.838
663.890
Acquisitions of intangible assets
-55.885
-101.337
Interest received
21.640
0
Outflow for the acquisition of financial investments
-2.500
0
1.598.710
0
Cash flow from operating activities
Total pre-tax profit or loss
Adjustments for:
Adjustment to value of property, plant and equipment
Profit from ordinary operations before changes in working capital
Increase in receivables and deferred costs and accrued revenues
Interest paid
Corporate income tax paid
Net cash flow from ordinary operations
Cash flow from investing activities
Inflow from disposal of financial investments
4
Item
2013
2012
216.929
47.863
-1.697.327
-6.188.908
Receipts from short-term loans
11.525.500
20.400.000
Repayments of short-term loans
-16.662.263
-22.349.515
0
0
Dividends received from available-for-sale investments
Net cash flow from investing activities
Cash flow from financing activities
Receipts from long-term loans
Repayments of long-term loans
Outflows for purchase of treasury shares
Dividends paid out to majority shareholders
Net cash flow from financing activities
Net cash flow
Cash and cash equivalents as at 1 January
Closing balance of cash and cash equivalents
0
-761.667
-1.854.381
0
-1.062.983
-1.085.808
-8.054.127
-3.796.990
4.052.754
-248.390
1.318.614
1.567.004
5.371.368
1.318.614
4
Consolidated statement of changes in equity of the Žito Group
In EUR
Balance as of 31 Dec 2012
Share
capital
Capital
reserves
Profit
reserves
Own shares
held in
treasury
Revaluation surplus
Retained
earnings
Majority
stake
Minority
stake
Total
equity
14,846,937
23,949,827
8,192,780
-472,056
-309,038
22,936,000
69,144,450
7,295
69,151,745
1,691,951
1,691,951
24,627,951
70,836,401
7,295
70,843,696
2,200,632
2,200,632
-318
2,200,314
85,548
0
87,858
85,548
2,200,632
2,288,490
Retroactive adjustments
Balance as of 1 Jan 2013
14,846,937
23,949,827
8,192,780
-472,056
-309,038
Net profit or loss for
the financial year
Other comprehensive
income
Total comprehensive
income for the year
2,310
0
0
2,310
Purchase of treasury shares
0
-1,854,381
Reserves for treasury shares
1,854,381
Dividends to shareholders
(Note 23.15)
1,691,951
87,858
-318
2,288,172
-1,854,381
-1,854,381
-1,854,381
0
0
-1,054,711
-1,054,711
-1,054,711
Balance as at 31 Dec 2013
14,846,937
23,949,827
10,049,471
-2,326,437
-223,490
23,919,491
70,215,799
6,977
70,222,776
As of 31 Dec 2011
14,846,937
23,949,827
8,164,115
-472,056
-528,783
23,138,424
69,098,464
8,601
69,107,065
535,562
535,562
23,673,986
69,634,026
8,601
69,642,627
390,801
390,801
-1,306
389,495
219,745
0
248,410
390,801
639,211
-1,128,787
-1,128,787
22,936,000
69,144,450
Change of the accounting
policy on 1 Jan 2012
14,846,937
23,949,827
8,164,115
-472,056
-528,783
Net profit or loss for
the financial year
Other comprehensive
income
Total comprehensive
income for the year
28,665
0
0
28,665
0
219,745
14,846,937
23,949,827
8,192,780
-472,056
-309,038
535,562
248,410
-1,306
637,905
-1,128,787
7,295
69,151,745
4
20.2 Financial statements of Žito d.d.
Income statement of Žito d.d.
Item
Explanations
2013
2012
23.2
103.725.655
103.329.181
-244.422
-703.578
42.318
32.325
2. Change in value of inventories of goods and work in progress
3. Capitalised own products and services
4. Other operating revenues (including revaluation operating revenues)
23.3
1.047.696
4.036.376
23.4
-76.088.178
-75.674.524
6. Labour costs
23.5
-18.507.773
-18.584.168
7. Write-offs
23.6
-5.839.771
-5.089.970
8. Other operating expenses
23.7
-1.026.382
-1.654.942
9. Financial revenue from shares
23.8
200.196
47.863
23.9
167.549
180.234
11. Financial revenues from operating receivables
23.9
451.331
206.386
12. Financial expenses from impairments and write-offs of investments
23.10
0
-3.526.787
23.11
-813.887
-974.600
14. Financial expenses from operating liabilities
23.11
-72.758
-297.495
3.041.572
1.326.300
15. Profit or loss
16. Tax on profit
23.12
-284.217
-278.995
17. Deferred taxes
23.13
-261.011
-297.457
2.496.343
749.848
18. Net profit/loss
The accounting policies and notes are constituent parts of the financial statements
4
Statement of comprehensive income of Žito d.d.
Item
2013
2012
2.496.344
749.848
Revaluation of available-for-sale investments
119.192
267.982
Deferred tax
-33.644
-48.237
85.548
219.745
85.548
219.745
2.581.892
969.593
31 Dec 2013
31 Dec 2012
62,310,117
64,018,179
Net profit for the accounting period
Revaluation of available-for-sale investments, net amount
Other components of comprehensive income
Total comprehensive income
Balance sheet of Žito d.d.
Item
Explanations
ASSETS
A. LONG–TERM ASSETS
I. Intangible assets, and non-current deferred costs and accrued revenues
23.16
189,169
258,567
189,169
258,567
41,464,429
43,439,988
25,249,534
25,944,006
2. Production plant and machinery
13,470,689
11,451,424
2,208,150
2,310,902
4. Property, plant and equipment under acquisition
353,414
3,559,799
5. Advances for property, plant and equipment
182,642
173,857
23.18
2,535,940
2,768,505
17,861,595
17,019,849
1. Investments in undertakings in the group
23.19
16,880,201
16,075,201
2. Investments in other undertakings
23.20
961,642
915,248
3. Long-term loans
23.20
19,752
29,400
1. Long-term property rights
23.17
3. Other plant and equipment
4
Item
V. Long-term operating receivables
Explanations
23.20
3. Long-term operating receivables from others
23.13
B. CURRENT ASSETS
62,083
55,836
62,083
55,836
196,901
475,434
58,166,717
56,844,408
I. Assets (disposal groups) available for sale
23.21
876,329
668,958
II. Inventories
23.22
13,628,308
16,147,389
8,843,392
11,107,733
1. Materials
2. Work in progress
135,520
111,873
4,569,364
4,878,769
80,032
49,014
6,621,294
6,345,240
2. Short-term loans
6,621,294
6,345,240
a) Short-term loans to group companies
6,592,564
6,298,040
28,730
47,200
32,518,020
32,767,578
3,416,441
3,993,873
28,212,070
27,785,426
3. Products and merchandise
4. Advances for inventories
23.20
b) Short-term loans to others
IV. Short-term operating receivables
23.23
1. Short-term operating receivables from group companies
2. Short-term trade receivables
3. Short-term operating receivables due from others
V. Cash and cash equivalents
23.24
TOTAL ASSETS
889,509
988,279
4,522,766
915,243
624
5,858
120,477,459
120,868,445
73,958,279
71,506,944
14,846,937
14,846,937
23,949,827
23,949,827
9,874,262
8,019,881
-472,057
-472,057
LIABILITIES
A. CAPITAL
I. Called–up capital
23.25
23.26
4
Item
Explanations
25,982,800
25,471,394
-223,490
-309,038
2,544,441
2,918,737
1. Provisions for pensions and similar liabilities
1,189,248
2,565,168
2. Other provisions
1,355,193
353,569
2,159,774
8,899,774
2,158,333
8,898,333
2,158,333
8,898,333
II. Long-term operating liabilities
1,440
1,440
5. Long-term operating liabilities
1,440
1,440
39,377,900
36,192,776
21,377,979
20,221,510
1,420,991
1,867,759
19,954,500
18,351,263
2,488
2,488
17,999,920
15,971,265
3,090,763
1,865,640
12,474,116
11,745,499
43,439
94,044
2,391,603
2,266,083
2,437,065
1,350,214
120,477,459
120,868,445
VI. Revaluation surplus
B. PROVISIONS AND NON-CURRENT ACCRUED COSTS AND DEFERRED REVENUES
C. LONG-TERM LIABILITIES
23.27
23.28
I. Long–term financial liabilities
2. Long-term financial liabilities to banks
23.28
1. Short-term financial liabilities to group companies
2. Short-term financial liabilities to banks
4. Other short-term financial liabilities
23.29
1. Short-term operating liabilities to companies in the group
2. Short-term trade payables
4. Short-term operating advance payables
5. Other short-term operating liabilities
D. CURRENT ACCRUED COSTS AND DEFERRED REVENUES
TOTAL LIABILITIES
The accounting policies and notes are constituent parts of the financial statements.
23.30
4
Statement of cash flows of Žito d.d.
Item
2013
2012
3,041,686
1,326,300
Net financing costs
446,142
746,502
-44,153
-106,318
5,034,085
4,653,073
125,287
214,644
0
0
3,526,787
-3,379,665
8,603,046
6,981,323
-1,163,746
-153,961
Change in inventories
2,519,082
991,013
Increase in operating liabilities and accrued costs and deferred revenues
2,914,836
2,682,485
658,075
70,653
13,531,293
10,571,513
Interest paid
-241,538
-976,178
Corporate income tax paid
-838,234
0
12,451,521
9,595,335
Acquisitions of new property, plant and equipment, and investments
-3,621,217
-6,625,785
Receipts from sale of property, plant and equipment, and investment
296,921
663,590
Acquisitions of intangible assets
-55,890
-101,337
Interest received
134,707
171,795
-354,125
-1,000
Receipts from loans granted
564,426
227,780
Dividends received from available-for-sale investments
200,196
47,863
-2,834,981
-5,617,094
Total pre-tax profit or loss
Adjustments for:
Adjustment to value of property, plant and equipment
Adjustment to value of intangible assets
Adjustment of investment value
Strengthening investment property
Profit from ordinary operations before changes in working capital
Increase in receivables and deferred costs and accrued revenues
Increase in provisions
Net cash flow from ordinary operations
Cash flow from investing activities
Expenditures for loans granted
Net cash flow from investing activities
4
Item
2013
2012
Receipts from short-term loans
11,716,229
20,400,000
Repayments of short-term loans
-16,662,263
-22,349,515
Receipts from long-term loans
0
0
Repayments of long-term loans
0
-761,667
Dividends paid out to majority shareholders
-1,062,983
-1,085,806
Net cash flow from financing activities
-6,009,017
-3,796,988
3,607,522
181,253
915,243
733,990
4,522,765
915,243
Cash flow from financing activities
Net cash flow
Cash and cash equivalents as at 1 January
Closing balance of cash and cash equivalents
4
Izkaz gibanja kapitala Žito d.d.
In EUR
Share capital
Capital
reserves
Profit
reserves
Own shares
held in
treasury
Revaluation
surplus
Retained
earnings
Total equity
14,846,937
23,949,827
8,019,880
-472,056
-309,038
25,471,394
71,506,945
924,153
924,153
14,846,937
23,949,827
8,019,880
-472,056
-309,038
26,395,547
72,431,097
0
0
0
0
0
-1,054,711
-1,054,711
-1,054,711
-1,054,711
2,496,343
2,581,891
2,496,343
2,496,343
Retroactive adjustments
Changes in equity – owner transactions
Dividends to shareholders (Note 23.15)
Total comprehensive income for the reporting period
0
0
0
0
85,548
Net profit or loss for the financial year
85,548
Change of surplus from revaluation of financial investments
Changes in capital
0
0
Constitution of reserves for own shares and
stakes from other capital components
1,854,381
0
0
1,854,381
85,548
-1,854,381
0
-1,854,381
0
14,846,937
23,949,827
9,874,261
-472,056
-223,490
25,982,799
73,958,278
As of 31 Dec 2011
14,846,937
23,949,827
8,019,880
-472,056
-528,783
25,314,772
71,130,578
535,562
535,562
14,846,937
23,949,827
8,019,880
-472,056
-528,783
25,850,334
71,666,139
749,847
749,847
Change of the accounting policy on 1 Jan 2012
Net profit or loss for the financial year
Other comprehensive income
Total comprehensive income for the year
219,745
0
0
0
0
219,745
14,846,937
23,949,827
8,019,880
-472,056
-309,038
219,745
749,847
969,592
-1,128,787
-1,128,787
25,471,394
71,506,944
4
21 INFORMATION ABOUT THE COMPANY
The consolidated financial statements for the Žito Group and
Žito d.d. for the year ending on 31 December 2013 were approved by the company's management on 7 April 2014.
Žito d.d. is a public limited liability company founded in the
Republic of Slovenia. The company’s shares are listed on the official market of the Ljubljana Stock Exchange.
The Žito Group’s primary lines of business are:
• bakery
• pastries and desserts
• frozen foods
• milling
• sponge cakes
• biscuits
• pasta
• sweets and chewing gum
• production of teas, rice and spices
• whole- and retail sale.
The composition of the Žito Group is as follows:
Subsidiary
Country
Equity stake
Intes Storitve d.o.o., Maribor
Slovenia
100.00%
Šumi Bonboni d.o.o., Ljubljana
Slovenia
100.00%
Žito maloprodaja d.o.o., Ljubljana
Slovenia
99.55%
Žito Nepremičnine d.o.o., Ljubljana
Slovenia
100.00%
Šumi Nepremičnine d.o.o., Ljubljana
Slovenia
100.00%
Croatia
100.00%
Serbia
100.00%
Macedonia
100.00%
LD Žito d.o.o., Zagreb
Žito Beograd d.o.o., Belgrade
Žito PI d.o.o.e.l., Skopje
4
22 SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Statement of compliance
Changes to accounting policies
The financial statements were prepared in accordance with the
International Financial Reporting Standards (IFRS) adopted by
the International Accounting Standards Board (IASB) and European Union and the interpretations issued by the International
Financial Reporting Interpretations Committee (IFRIC).
Companies in the Žito Group on 31 December 2013 adjusted
the values of inventories which were on stock for more than 360
days. These are assumed to be of lower quality and/or partially
obsolete; therefore, there is less probability of using them in production. The adjustment of value of inventories in 2013 in Žito
d.d. amounted to EUR 190,665.10 and to EUR 242,367.87 in the
Žito Group.
At the balance sheet date, according to the endorsement process in the EU, there are no differences in the accounting policies
of Žito d.d. and the Žito Group and between the International
Financial Reporting Standards (IFRS) and International Financial
Reporting Standards (IFRS) used as adopted by the EU.
The Company and the Group did not prematurely apply any
new standard, as the use of the revised standards was not required in 2013.
Žito d.d. partially modified the valuation of investment property,
so that investment property owned by Žito d.d. and used by Žito
Group are valued at purchase value, reduced by the calculated
amortisation. Investment property not used by the group is
valued at fair value, which is measured on the basis of market
value on the date of the balance sheet.
Standards and interpretations not yet in effect
Basis of preparation
The financial statements were prepared on a historical cost
basis, except for available-for-sale assets and derivatives, which
are disclosed at their fair value.
The accounting policies used are identical to those used in previous years, with the exception of the newly adopted standards
and interpretations which entered into force on 01.01.2013 and
are given below. Compliance with the new standards and interpretations did not affect the financial position and operations of
the Žito Group or Žito d.d. during the period in question.
The new standards and interpretations stated below are not yet
in effect and were not considered in the preparation of financial
statements as of 31 Dec 2013.
IFRS 10 Consolidated financial statements and
IAS 27 (2011) Separate financial statements
(Applies to annual accounting periods that commence on 1
January 2014; prior application is only possible in the case of
the prior application of IFRS 11, IFRS 12, IAS 27 (2011) and IAS
28 (2011)). The standard is used retrospectively if there are any
changes in the findings regarding operations.
4
For the execution of the control analysis, IFRS 10 predicts a unified model for all types of companies, including those which are
currently considered as special-purpose companies in the scope
of SOP-12. IFRS 10 introduces new requirements regarding the
assessment of control and they differ from the existing requirements determined by IAS 27 (2008). According to the new model,
the investor controls the recipient of the financial investment, if:
•
they are exposed or entitled to variable returns from involvement or the company in which they invest,
•
they have the option to affect the return in question on the
basis of their control of the company in which they invest or
of the recipient of the financial investment;
•
there is a connection between power and return.
The modified standard also includes disclosure requirements
and requirements regarding the preparation of consolidated
financial statements (requirements are transferred from IAS 27
(2008)).
The Group predicts that the new standard will not affect financial statements, because the assessment of the Group’s control
of the current recipients of investments in accordance with the
new standard will not affect preliminary findings regarding such
control.
IFRS 11 – Joint Agreements
January 2014. It is used retrospectively and is subject to transitional provisions. Prior application is possible only in the case of
the prior application of IFRS 10, IFRS 12, IAS 27 (2011) and IAS 28
(2011)).
IFRS 11, Joint Agreements, substitutes IAS 31, Interests in joint
ventures. IFRS does not introduce substantial changes to the
comprehensive definition of the arrangement, which is the
subject of joint control, but does change the definition of control and, subsequently, joint control due to IFRS 10.
The new standard defines two types of arrangement, each of
which has its own accounting model:
•
Joint activity is a joint agreement whereby customers who
control it together are entitled to assets and carry liabilities
associated with the arrangement.
•
A joint venture is a joint arrangement whereby customers
who control it together are entitled to net arrangement
assets.
IFRS has successfully relieved the provisions of IAS 31 (Jointly
Controlled Entities) from cases where the holder of the joint
agreement is separated from the other, and this separation has
proved to be effective in some cases. These arrangements are
to be handled similarly to jointly controlled assets/operations
according to IAS 31 and are now called joint activities. In addition, the IAS 31 terminates the optional choice between the
equity method and proportional consolidation. From now on,
4
the equity method is to be used in consolidated financial statements.
The Group/Company predicts that the new standard will not
affect financial statements, since it has no joint arrangements.
IFRS 12 – Disclosure of Shareholdings in Other Companies
January 2014. It is used retrospectively and is subject to transitional provisions. Earlier application is permitted).
IFRS 12 requires additional disclosures regarding important estimates and assumptions associated with determining types of
shares in companies or arrangements, shares in subsidiary companies, in joint arrangements and in associated companies, as
well as in unconsolidated structured companies.
The group/Company predicts that the new standard will not
substantially affect financial statements.
ments relating to the preparation of consolidated financial statements, which have been incorporated into IFRS 10, Consolidated
Financial Statements.
The Company predicts that IAS 27 (2011) will not significantly
affect financial statements, because accounting policies remain
unchanged.
IAS 28 (2011) – Investments in
Associates and Joint Ventures
January 2014. It is used retrospectively. Prior application is possible only in the case of the prior application of IFRS 10, IFRS 11,
IFRS 12 and IAS 27 (2011)).
Amendments to IAS 28 (2008) include:
•
Associates and joint ventures held for sale: IFRS 5, Non-current Assets Held for Sale and Discontinued Operations
applies to an investment, or a portion of an investment, in an
associate or a joint venture that meets the criteria to be classified as held for sale. For any retained portion of the investment that has not been classified as held for sale, the equity
method is applied until the disposal of the portion held for
sale. After disposal, any retained interest is accounted for
using the equity method if the retained interest continues
to be an associate or a joint venture.
•
Changes in interests held in associates and joint ventures:
previously, IAS 28 (2008) and IAS 31 specified that the cessation of significant influence or joint control triggered the
IAS 27 (2011) – Separate Financial Statements
January 2014; prior application is possible only in the case of the
prior application of IFRS 10, IFRS 11, IFRS 12 and IAS 28 (2011).
IAS 27 (2011) carries forward the existing accounting and disclosure requirements of IAS 27 (2008) for separate financial statements, with some minor clarifications. Moreover, the existing
requirements of IAS 28 (2008) and IAS 31 for separate financial
statements have been incorporated into IAS 27 (2011). The standard no longer addresses the principle of control and require-
4
remeasurement of any retained stake in all cases, even if
significant influence was succeeded by joint control. IAS 28
(2011) now requires that the retained interest in the investment is not remeasured that in such scenarios.
The Company predicts that this amendment will not significantly affect its financial statements. In 2012, the Group’s financial
statements included the impairment of the investment in the
subsidiary Mlinopek d. d. to the assessed fair value (along with
the transfer of ownership to its subsidiary, Šumi Nepremičnine
d.o.o).
Amendment to IAS 32 – Offsetting Financial
Assets and Financial Liabilities
January 2014. It is used retrospectively. Earlier application is
permitted; however, additional disclosures are required by
Amendments to IFRS 7: Disclosures – Offsetting Financial Assets
and Financial Liabilities).
The amendments do not introduce new rules on offsetting
financial assets and liabilities, but clarify the offsetting criteria
to address inconsistencies in their application. The amendments
clarify that an entity currently has a legally enforceable right to
offset if that right is:
•
not contingent on a future event; and
•
enforceable both in the normal course of business and in the
event of rhe default, insolvency or bankruptcy of the entity
and all counterparties.
The company predicts that the amendment will not significantly
affect its financial statements, since it does not conduct offsetting of financial assets and financial liabilities and does not enter
into netting agreements.
Basic policies
The financial statements were compiled on a historical cost
basis, other than assets measured at fair value through profit or
loss, and available-for-sale assets measured at fair value.
The financial statements are presented in euros.
Significant accounting estimates
Compiling financial statements requires the management to
make specific estimates and assumptions affecting the carrying
amount of the company’s assets and liabilities and the disclosure
of contingent liabilities as at the balance sheet date, and of the
income and expense amounts during the period ending on the
balance sheet date.
The management’s estimates include the following items: the
amortisation/depreciation period and residual value of property,
plant and equipment, and of intangible assets, adjustments to
the value of inventories and doubtful receivables and litigious
claims. Future developments and their effect cannot be determined with certainty. For this very reason, it is necessary to use
judgments when making accounting estimates, as the estimates
change with regard to new developments, experience and additional information, and as a result of a change in the business
4
environment in which the company operates. The actual results
may differ from these estimates.
through the onset or non-occurrence of events in the uncertain
future, a factor the Companies in the Group cannot control.
The principal estimates and assumptions as of the balance sheet
date relating to future performance that could cause materially
significant revisions in the carrying amount of assets and liabilities in the next financial year are cited below.
The management of each company regularly undertakes reviews to establish whether a probable outflow of funds enabling
economic benefits is possible. If such settlement becomes probable, the contingent liability is reclassified with a provision formed for it in the financial statements at the moment the degree
of probability changes.
Deferred tax receivables
Deferred tax assets are recognised for all unutilised tax losses
that are likely to be offset against future taxable earnings. The
recognition of deferred tax assets requires significant estimates
by the management with regard to the amount of future taxable
earnings and future tax planning strategy.
Provisions and contingent liabilities
Significant management judgements
In applying the accounting policies, in addition to providing an
estimate of what has the most impact on the values in the financial statements, the management also make a judgement regarding the values of property, plant and equipment and intangible
assets.
The companies in the Group treat liabilities that have undetermined values and times of origin on the basis of a management
estimate of the values and times of origin and the likelihood that
an outflow of funds would be required to settle legal and indirect liabilities.
In the judgement of the Group and the Company, no factors
indicate a need to impair intangible assets/property or plant and
equipment.
A provision is recognised when companies have a present obligation as a result of past events and its settlement will thus likely
require the outflow of economic factors, as well as when a reliable estimate of its amount is possible.
The consolidated financial statements comprise the financial
statements of Žito d.d. and its subsidiaries as at 31 December
for each year. The financial statements of the subsidiaries are
compiled for the same financial year as the financial statements
of the parent company, using standardised accounting policies.
If there are any inconsistencies in the accounting policies, the
appropriate adjustments are made in the consolidated financial
statements.
Contingent liabilities are not recognised in the financial statements, because their actual existence will be confirmed only
Basis of consolidation
4
All mutual positions and transactions, including unrealised gains
deriving from mutual positions and transactions, are excluded
in full.
Consolidation begins for all subsidiaries on the day control is
transferred to the Žito Group; conversely, the consolidation of
a particular subsidiary ceases when control of the subsidiary
is transferred from the Žito Group. Should the Žito Group lose
control of a subsidiary during the year, the consolidated financial statements include the subsidiary’s results until the day that
control of the subsidiary is relinquished.
The minority interest represents the proportion of profit or loss
and net assets that isnot attributable to the Žito Group, and is
disclosed separately in the income statement and segregated
from the equity of the majority owners in the item capital and
reserves in the consolidated balance sheet. The acquisition of a
minority interest is accounted for, in line with the entity approach, whereby the difference between the consideration and
the carrying amount of net assets acquired is recognised as an
equity transaction.
TranslationConversion? of foreign currencies
The consolidated financial statements are presented in euros
(EUR), which is the functional and presentation currency used by
the parent company and its subsidiaries in Slovenia. Transactions
in foreign currency are initially recognised in the functional currency, and are recognised at the exchange rate on the day of the
transaction. Monetary assets and liabilities in foreign currency
are calculated at the exchange rate of the functional currency on
the respective balance sheet date. All differences arising in the
calculation of foreign currencies are recognised through profit
or loss. Non-monetary assets and liabilities recognised at historical cost in foreign currency are calculated at the exchange rate
as on the day of the transaction. Non-monetary assets and liabilities measured at fair value in foreign currency are calculated at
the exchange rate when the fair value was determined.
Positive and negative foreign exchange differences are recognised in the income statement in a net amount for the same types
of item, unless separate disclosure is relevant.
The functional currencies of the foreign subsidiaries are:
•
the Croatian kuna for LD Žito d.o.o., Zagreb, Croatia
•
the convertible Serbian dinar for Žito d.o.o., Belgrade, Serbia,
and
•
the Macedonian denar for Žito PI d.o.o.e.l., Skopje,
Macedonia.
The financial statements of the aforementioned subsidiaries are
calculated into the presentation currency of the consolidated
financial statements on the reporting date. The exchange rate
on the reporting date is used for the balance sheet, while an average exchange rate over the entire financial year is used for the
income statement.
4
Foreign exchange differences arising from the translation of the
functional currency into the presentation currency are recognised directly in the statement of comprehensive income.
Land, buildings and equipment
Land is valued at original cost, minus any impairment. Buildings
and equipment are valued at original cost, minus the accumulated
depreciation and any impairment.
The original cost of an item of property, plant and equipment includes its purchase price, import duties and non-refundable purchase
levies, and all costs of making the asset fit for use, particularly delivery and installation costs. The original cost of an item of property,
plant or equipment constructed or produced at the Company comprises the costs incurred by construction or production, and the indirectly attributable costs of construction or production.
The original cost of an item of property, plant and equipment is
apportioned among its parts if they are materially significant in
terms of value, and have different useful lives and/or patterns of use
relative to the total original cost. The rules for apportioning non-current assets into parts are based on the definition of parts of non-current assets with different useful lives and/or patterns of use.
Subsequent expenditures in relation to property, plant and
equipment adds to its original cost if it is a matter of replacement
and/or it is likely that the future economic benefits will be higher
than originally estimated. The useful life is reassessed at this point. In
the event of subsequent expenditure on fully depreciated property,
plant and equipment, the asset is recognised as a new asset with a
new useful life. All other subsequent expenditure on property, plant
and equipment is recognised as an expense when incurred.
The Group charges depreciation on a straight-line basis, in accordance with the estimated useful life, as follows:
Buildings:
Plant and equipment:
from 1.5% to 7%
from 8.0% to 33.3%
Items of property, plant and equipment under acquisition are recognised at original cost and are depreciated when they are fit for use.
Property, plant and equipment are revalued for impairment loss
when their carrying amount exceeds their recoverable amount. The
recoverable amount is fair value minus selling costs, or the value in
use. The estimation of value in use comprises the estimation of the
future receipts and expenditure from the continuing use of the asset
and its final disposal cash, discounted at an appropriate (pre-tax) rate
that reflects current market assessments of the time value of money
and the risk specific to the asset. For an asset where the future cash
flow depends on other assets in the particular cash-generating unit,
the value in use is calculated on the basis of the future cash flow of
that cash-generating unit. Losses arising on the basis of impairment
are recognised as operating expenses.
The de-recognition of land, buildings or equipment is effected when
the asset is sold, or when economic benefits are no longer expected
to accrue from the further use of the asset in question. Gains and
losses from the de-recognition of an asset are included in profit or
loss in the year when the asset in question is segregated or disposed
of. Gains and losses from segregation or disposal are determined as
4
the difference between the selling price and the carrying amount of
the asset.
with it. Gains and losses from de-recognition are recognised in
profit or loss in the year in which they arise.
The residual value, useful life and depreciation method of individual
assets are reviewed annually, and modified where necessary.
Intangible assets
Borrowing costs
Stroški izposojanja so pripoznani v razdobju, na katerega se
nanašajo.
Investment property
Investment properties are measured at fair value, which is measured based on the market value at the balance sheet date.
An independent external appraiser with appropriately recognised qualifications and recent experience in allocating and classifying investment properties similar to the one in question evaluates the Group’s investment portfolio each year.
If current prices in the active market cannot be determined,
the value of the investment property is then determined with
the help of the assessed value of leasing the property. Revenue
from a lease is included in the total value of the investment on
the basis of the assessed value of leasing it. When actual leasing deviates from the assessed value of leasing, this requires
the implementation of appropriate adjustments to actual rental
prices.
The de-recognition of investment property is effected in the
event of sale, or when the investment property is decommissioned and no future economic benefits will accrue in connection
Neopredmetena sredstva, pridobljena posamezno, so pripoznana po nabavni vrednosti, medtem ko se neopredmetena
sredstva, pridobljena na podlagi poslovnih združitev, pripoznajo
po pošteni vrednosti na dan prevzema. Po začetem pripoznavanju se uporablja model nabavne vrednosti. Družba izkazuje neopredmetena sredstva z določljivimi dobami koristnosti. Obračunana amortizacija neopredmetenega sredstva je pripoznana v
izkazu poslovnega izida.
The amortisation rate is 20%.
Intangible assets generated within the Company, other than
development costs, are not capitalised. Costs represent an
expense in the period in which they occur.
Intangible assets are reviewed annually for impairment on an
individual basis. The useful life of an individual intangible asset
is assessed once a year, and adjusted as necessary.
Gains and losses from segregation or disposal are determined as
the difference between the selling price and the carrying amount of the asset. They are recognised as a gain or loss when the
intangible asset is segregated or disposed of.
Research and development costs
Research costs are deemed expenses in the period, and are not
recognised as an intangible asset. Development costs are reco-
4
gnised on the balance sheet as an intangible asset when economic benefits can be reasonably expected to flow in connection
with an individual project. The original cost model is applied
after the initial recognition of the development costs. The useful
life is determined on the basis of the expected income that will
flow in future years as a result of the capitalised project.
Recoverable amount of non-current assets
On the reporting date, it is assessed whether any factors indicate
that non-current assets require impairment. If there is anindication of impairment, a formal estimate of the recoverable amount of the assets in question is drawn up. Should the carrying
amount exceed the recoverable amount, the value of the asset
is impaired to the recoverable amount of the asset or cash-generating unit in question. The recoverable amount is the greater of
the fair value minus the selling costs of the asset or cash-generating unit in question, or the value in use. The value in use is
determined by discounting expected future cash flows to the
net present value, using a (pre-tax) discount rate that reflects
the current market assessment of the time value of money and
the risk specific to the asset. For an asset where the future cash
flows depend on other assets in the particular cash-generating
unit, value in use is calculated on the basis of the future cash
flow of that cash-generating unit. Losses arising on the basis of
impairment are recognised as revaluation operating expenses.
Investments
The company classifies investments into the following categories: financial assets at fair value through profit or loss, held-to-
-maturity investments, available-for-sale investments, and loans
and receivables. Classification depends on the purpose of acquisition.
Recognition of financial assets
The company initially recognises all investments at original cost,
including the purchasing costs directly associated with purchase, other than investments in the fair value through the profit
or loss category. Investments in the fair value through the profit
or loss category are recognised at fair value (direct purchasing
costs are not included in the original cost
Financial assets at fair value through profit or loss
These comprise assets held for trading, derivatives (other than
those for hedge accounting), and other financial assets classified
in this category under IAS 39. They are disclosed at fair value on
the respective reporting date. Gains and losses on investments
in fair value through the profit or loss category are recognised
directly in profit or loss.
The fair value of investments actively traded on regulated markets is determined in the amount of the published bid price in
the stock exchange listing at the close of trading on the balance
sheet date. For investments where the market price is not published on financial markets, the fair value is determined on the
basis of a similar instrument, or on the basis of a valuation model
in which the input data derive primarily from a functioning market.
4
The purchase and sale of individual investments included in the
financial assets at fair value through the profit or loss category
are recognised on the trading date, i.e. the day when the Company undertook to purchase or sell the asset in question.
Held-to-maturity investments
The company recognises non-derivative financial assets with
fixed or determinable payments and a specific maturity as held-to-maturity investments if there is a positive intention and the
ability to hold the investment to maturity. Investments that the
company holds for an indeterminate time are not included in
this category.
Investments recognised as held-to-maturity investments are
valued at amortised cost on the reporting date, using the effective interest method. The amortised cost is calculated by allocating the premium or discount at acquisition over the entire
period until maturity. All gains and losses on investments valued
at amortised cost are recognised in profit or loss (disposal, impairment or effects of amortisation of the discount/premium).
Investments categorised as held-to-maturity are recognised on
the settlement date
Available-for-sale investments
After initial recognition, all investments that the company categorises as available-for-sale investments are measured at fair
value, or at original cost should it be impossible to reliably determine the fair value.
Gains and losses on available-for-sale investments are recognised in the statement of comprehensive income as a net unrealised capital gain or loss from available-for-sale investments until
the investment is sold or otherwise disposed of. The exceptions
are impairment losses and increases or decreases in foreign
exchange differences, which arise in items such as debt securities.
The purchase and sale of individual investments included in the
category of available-for-sale investments are recognised on the
trading date, i.e. the day when the company undertook to purchase or sell the asset in question.
Investments in subsidiaries and joint ventures
The company values investments in subsidiaries at original cost
minus any impairment. The company values investments in joint
ventures at original cost.
Naložbe v odvisne družbe in skupne podvige
Družba vrednoti naložbe v odvisne družbe po nabavni vrednosti, zmanjšani za oslabitev. Naložbe v skupne podvige družba
vrednoti po nabavni vrednosti.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments not traded on a regulated market which
the company has no intention of selling in the short term after
acquisition. This category includes loans and receivables that
the company acquires, and loans and receivables originating in
4
the company. Loans and receivables are measured at amortised
cost, using the effective interest method. Investments categorised as loans and receivables are recognised on the settlement
date.
Impairment of available-for-sale financial assets
Inventories of materials
valued according to the FIFO method
Work in progress and
inventories of finished
products
valued according to direct costs of
materials and labour, including a
portion of general production costs on
the basis of normal production
The company verifies, at a minimum on the balance sheet date,
whether financial assets or groups of financial assets show an
indication of impairment.
The net realisable value is the estimated selling price in the ordinary course of business, minus the estimated costs of completion and estimated selling costs.
Available-for-sale financial assets are subject to impairment
when there is objective evidence that the company will be unable to recover the original cost of the financial asset. In addition
to the qualitative measurement of impairment, a materially
significant or persistent decline in the fair value of the financial
asset below its original cost is deemed to be objective evidence.
The company considers a materially significant decline to have
occurred when the fair value of a financial asset has fallen more
than 40% from its weighted average purchase price. The company considers a persistent decline in the fair value of a financial
asset to have occurred when the fair value of a financial asset has
been below its weighted average purchase price for a period of
more than nine months.
Value adjustment of inventories
Inventories
Inventories are valued at purchase value or net realisable value.
The value of inventories includes the original cost and other
costs in bringing the inventories to their present location and
condition.
Inventories on stock for more than 360 days are considered to be
of worse quality and/or partially out of date; therefore it is less
likely that they will be used in production. Value adjustments are
made at the end of year. The final write-off of inventories is confirmed by the management board.
Considering experience from previous years, the management
board determined the percentage of adjustment by considering the number of days of goods in stock, where the amounts of inventories write-offs are calculated as expenses and
appropriate inventories' value adjustments. Adjustment stakes
lie between 50 and 100%; the exception are spare parts, which
are annually adjusted in the amount of 12.5% of their purchase
value, which is the average amortisation rate for the fixed assets
for which spare parts were purchased.
Operating and other receivables
Operating receivables are recognised at issued invoiced value,
minus any adjustments to value.
4
The company and Group create a general adjustment to receivables in accordance with the following criteria:
Maturity of receivables
Percentage
up to 3 months
3%
from 3 to 6 months
40 %
from 6 to 9 months
70 %
from 9 to 12 months
95 %
over 12 months
100 %
Adjustments to the value of receivables from Group companies
are created individually with respect to the assessed recoverability of the receivable (e.g. negative equity, assessment of future
operations, etc.).
Adjustments to the value of receivables from associates are created by applying the following percentage to unpaid overdue
receivables:
• Receivables overdue from 180 and 270 days: 3%
•
Receivables overdue from 270 and 360 days: 40%
•
70% on receivables more than 360 days overdue or on the
basis of individual assessment.
The company and the Group exclude from the general adjustment the value of unpaid past due receivables from those customers for which it assesses that there is no doubt regarding the
recoverability of the said receivables. This involves only a handful of our top Slovenian customers.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, freely available
balances in bank accounts, and short-term deposits with a maturity of up to 3 months, where the risk of a change in fair value is
minimal.
Share capital
The company’s share capital comprises subscribed shares. The
directly attributable additional costs of issuing new shares, net
of any tax effects, are presented as a deduction from equity.
Should the Company acquire shares in the controlling company
from another company, the consideration paid is disclosed in the
item of own shares held in the treasury until the day when these
shares are reissued, sold or retired. The consideration paid for
treasury shares includes directly attributable transaction costs,
net of any tax effects. Upon the subsequent sale or reissue of
these shares, all the effects of the sale or reissue are included in
equity.
Borrowings received
All borrowings received are initially recognised at fair value,
minus the acquisition costs of the loan in question. After initial
recognition, loans are measured at amortised cost using the
effective interest method through profit or loss. Acquisition costs
and any discounts or premiums during acquisition are taken into
consideration. Gains or losses in the elimination of such liabilities
are recognised in profit or loss.
4
Provisions
The Company recognises provisions when there is a present
obligation (legal or indirect) as a result of a past event, and it
is likely that in the settlement of the obligation there will be an
outflow of resources yielding economic benefits, and a reliable
estimate can be made of the obligation. The amount recognised
as a provision is the best estimate of the expenditure required
to settle the existing obligation on the respective balance sheet
date. When the time value of money is also materially significant, provisions are determined on the basis of discounted cash
flows using a (pre-tax) discount rate that reflects the time value
of money and, where appropriate, also incorporates any risk in
the particular liability. If provisions are determined on the basis
of discounted cash flows, increases in the net present value are
recognised through the year as financial expenses.
Where it is expected that all or part of the expenditure necessary
to settle provisions will be refunded by other parties, the refund
is recognised as a separate asset, but only if it is almost certain
to be received. In this event, the provisioning costs are disclosed
net of the expected refund.
Employee benefits
Employee benefits include wages and other benefits in accordance with the collective agreement. Contributions to the state
pension fund, social security insurance, health insurance and
unemployment insurance are recognised as current costs in the
period. The company recognises any future costs on the basis
of the collective agreement in connection with employees.
The aforementioned costs are recalculated on the basis of an
actuarial method and are recognised throughout the period of
employment to which the collective agreement relates.
Financial and operational leasing
Financial leasing is recognised when the vast majority of the
risks and rewards of the subject of the lease are transferred to
the company. Financial leasing is recognised in the balance
sheet as an asset and as a debt in an amount that at the inception of the lease is equal to the fair value of the leased asset or
the present value of the minimum lease payments, whichever is
the lower. The lease payments are apportioned between financial expenses and the reduction of the outstanding debt. The
financial expenses must be allocated to periods during the lease
term, giving an effective interest rate for outstanding debt for
each period. The financial expenses are recognised directly in
profit or loss.
Assets subject to finance leasing are depreciated over their estimated useful life, or over the finance lease term, whichever is the
shorter.
Operational leasing is leasing in which the lessor retains the vast
majority of the risks and rewards associated with ownership of
the particular subject of the lease. The Group recognises lease
payments in profit or loss as an expense on a straight-line basis
over the whole lease term.
4
Trade payables and other liabilitiesi
•
Rental income
Rental income from investment property is recognised on a
straight-line basis over the term of the individual lease agreement.
•
Government grants
Government grants are recognised at fair value, but not until
there is reasonable assurance that the company will receive
the grant and that it will satisfy the conditions associated
with the grant. Government grants are recognised strictly
as revenue in the periods in which the costs that they are
intended to cover arise. If the government grant relates to
a specific asset, it is recognised as deferred income that the
company recognises in profit or loss in the period of the
expected useful life of the asset in equal annual instalments.
Operating liabilities are disclosed at historical cost. Bookkeeping
documents are the basis for their recognition.
Revenue
A revenue is recognised if it is likely that economic benefits will
accrue and can be reliably measured. The following criteria must
be met:
•
Revenues from the sale of products
Revenues are recognised when significant risks and rewards
associated with ownership of the goods have been transferred to the purchaser; the revenue can be reliably measured;
it is likely that economic benefits will accrue to the undertaking; and the costs incurred in connection with the transactions can be reliably measured. Revenues are recognised in
the contractually determined or agreed amounts, minus any
trade discounts and volume rebates allowed by the entity.
•
Revenues from the sale of services
Revenues from services rendered are recognised when the
services have been rendered and there is no uncertainty as
to settlement.
•
Interest
Interest income is accounted for and recognised using the
effective interest method.
•
Dividends
Dividends are recognised when the company acquires the
right to payment.
Taxes
•
Tax on profit
A liability or asset for current taxes for current or past periods is measured in the amount that the Company expects
will be paid to, or recovered from, the tax authorities. Liabilities and assets for current taxes are measured on the basis
of the tax rates (and tax regulations) applicable as at the
balance sheet date.
•
Deferred taxes
Deferred corporate income tax assets and liabilities are
accounted for using the balance sheet liability method. Only
deferred assets and liabilities arising from temporary differences are recognised.
4
A deferred tax asset is also recognised for unutilised tax losses and unutilised tax credits brought forward to the next
period if it is likely that taxable earnings against which the
unutilised tax losses and unutilised tax credits can be offset
will be available in the future.
The company forms deferred tax receivables from the impairment of receivables if it assesses they will be recognised
based on tax regulations within a reasonable period.
Deferred tax assets are reviewed on the balance sheet date
and are impaired for the portion of the asset for which it can
no longer be expected that appropriate taxable earnings
against which the unutilised tax loss can be offset will be
available in the future.
Deferred tax liabilities and assets are measured on the basis
of the tax rates expected to apply when the asset is realised
or the liability paid. Tax rates (and tax regulations) applicable
as at the balance sheet date are taken into consideration in
this regard.
Deferred taxes are recognised directly in the statement of
comprehensive income, provided that the taxes relate to
items recognised directly in the statement of comprehensive income.
The company shows an offset of deferred tax assets and liabilities in its financial statements.
De-recognition of financial instruments
A financial asset is eliminated from statements when the risks
and benefits associated with the financial instrument and control of the contractual rights attached to the financial instrument
have been transferred. A financial liability is eliminated from statements when it has been repaid, has terminated or has become
statute-barred.
Cash flow statement
The Group and company compile the statement of cash flows
using the indirect method by adjusting net profit or loss for
the effects of non-monetary transactions for all revenues and
expenses and for accrued costs that will result in receipts or outflows in future operations, and for revenue and expense items
linked to cash flows from investing and financing activities.
4
Eliminations and adjustments in consolidation
Income satement
Item
- Revenue from services sold
- Revenue from products sold
Eliminations
and adjustments
15,976,029
4,760,020
11,216,008
15,976,029
- Purchase value of goods sold
1,522,716
- Costs of materials
9,704,703
- Costs of services
4,748,610
7. Write-offs
206,226
- Amortisation
93,908
- Operating expenses from revaluation of intangible long-term assets and tangible fixed assets
112,318
166,054
- Financial revenue from loans made to companies in the group
166,054
166,054
- Financial expenses from loans received from companies in the group
166,054
18. Profit or loss
206,226
17. Deferred taxes
35,058
18. Net profit/loss
171,168
4
Balance sheet of the Žito Group
ASSETS
A. LONG-TERM ASSETS
Eliminations and
adjustments
18,941,334
-8,355,842
-8,391,426
- Land
1,112,366
- Buildings
7,279,060
2. Equipment
35,584
8,597,652
18,734,582
1. Investments in undertakings in the group
18,734,582
- Shares and stakes in companies in group
18,734,582
B. CURRENT ASSETS
2. Short-term loans
- Short-term loans to companies in the group
-35,058
14,676,590
8,013,555
-8,013,555
-8,013,555
IV. Short-term operating receivables
6,663,035
- Short-term operating receivables from group companies
6,655,772
- Short-term trade receivables
TOTAL ASSETS
7,263
-12,434
33,605,490
LIABILITIES
A. EQUITY
16,950,819
I. Called-up capital
8,673,679
7,820,955
282,515
4
ASSETS
Eliminations and
adjustments
1,854,381
-1,673,734
VII. Minority interest capital
-6,977
16,666,703
- Short-term financial liabilities to group companies
- Short-term operating liabilities to group companies
E. SHORT-TERM ACCRUED COSTS AND DEFERRED REVENUES
TOTAL LIABILITIES
8,013,555
8,013,555
8,653,147
8,653,147
-12,031
33,605,490
4
23 NOTES TO FINANCIAL STATEMENTS
23.1 Reporting by business segment of the Žito Group
Since the accounts include the financial statements and accompanying notes of the Group and the company, only the Group's operating segments are disclosed.
An operating segment is a constituent component of the Group that
engages in business activities from which it may earn revenues and
incur expenses relating to transactions with other constituent components of the same group.
The results of the operating segments are regularly reviewed by the
Group's management staff, so that decisions can be made on the
basis of those reviews regarding the resources that must be allocated to a specific segment and so that assessments can be made of
the Group's performance.
Owing to the lack of transparency caused by the sheer volume of
data and the sensitivity thereof, the Group discloses data only at the
macro level in the annual report. In compiling and presenting financial statements, the Group uses the following business segments:
•
Bread
•
Contemporary Kitchen
•
Confectionery
•
Milling
•
Other
The “Bread” Segment: the highest share in revenues in the bread
segment comes from breads and pastry, followed by bakery products such as toast and rusks; other products in this group are
pastries, sandwiches and confectionery.
The “Contemporary Kitchen” Segment: The Contemporary
Kitchen pillar is the most varied segment, as it comprises teas and
products used for cooking. Teas account for the highest proportion
(20%), followed by equal proportions of pasta, frozen foods, rice
and spices. Groats, grains, breakfast cereals and the bio-programme
account for nearly one fifth of sales.
The “Confectionery” Segment: This segment includes sweets
and chewing gum, chocolate, sponge cakes and rolls, pastries and
homemade biscuits.
The “Milling” Segment: This is the most homogeneous segment.
It includes flour, which accounts for the majority of sales, feed and
grain, additives and mixtures, and yeast.
Additional data regarding the geographical areas of the Žito Group
and Žito d. d. are presented within the scope of section 23.2. The
revenues shown in the presentation of geographical areas are based
on the geographical locations of customers.
Methodology: Direct expenses and revenues are determined by
segments, general expenses (leadership and management) and
other revenues, closely related to the business activities of the
above-mentioned segments, are disclosed under section Other.
4
Business segments for 2013
Sales Revenues
Sales Revenues - by segments
TOTAL
Other revenues
BREAD
CONTEMPORARY
CUISINE
CONFECTIONERY
MILLING
RETAIL SALES
47,554,954
28,688,049
26,640,498
14,517,492
7,846,188
OTHER
1,589,471
TOTAL
Elimination
entries and
Adjustments
Consolidation
126,836,651
-15,976,029
110,860,622
3,360,761
3,003,267
1,345,040
14,109,877
0
725,355
22,544,301
-22,544,301
0
50,915,715
31,691,316
27,985,537
28,627,370
7,846,188
2,314,826
149,380,951
-38,520,329
110,860,622
54,287
-228,284
-7,649
42,177
0
-138,883
-0
587
464,259
789,481
140,510
68,673
21,387
393,809
1,878,118
2,482
-138,883
51,434,260
32,252,512
28,117,398
28,738,220
7,867,575
2,709,222
151,120,186
-38,517,847
1,880,600
1,861,918
1,788,965
5,287,354
1,068,031
5,334,873
15,276,328
-1,522,716
13,753,612
1
08
38,365
0
0
0
38,366
-38,366
0
9,877,536
11,594,508
12,081,346
15,064,810
191,485
669,347
49,479,032
-9,704,703
39,774,329
7,582,942
1,771,281
543,922
5,315,281
0
0
15,213,426
-15,213,426
0
10,847,285
3,596,088
3,140,302
2,233,952
981,929
6,908,180
27,707,736
-4,742,944
22,964,792
3,320,066
1,594,240
589,513
1,438,572
0
350,117
7,292,508
-7,292,508
0
Write-offs
2,697,671
947,576
1,295,796
777,217
13,919
1,298,140
7,030,319
257,360
7,287,679
Labour costs
9,010,781
2,795,047
3,837,982
870,309
1,418,224
6,463,530
24,395,873
0
24,395,873
TOTAL
Costs and expenditures (without general
expenditures):
Cost of goods purchased
Cost of goods purchased - by segments
Cost of materials
Cost of materials - by segments
Cost of services
Cost of services - by segments
Other costs
TOTAL (without general expenses)
Operating profit (without allocation of
general expenses)
-64,814
160,254
33,798
62,294
29,144
9,807
1,001,791
1,297,089
668
1,297,756
45,358,454
24,121,504
26,876,874
26,797,317
7,950,237
16,626,291
147,730,677
-38,256,636
109,474,041
6,075,806
8,131,008
1,241,524
1,940,903
-82,662
3,389,510
-261,212
3,128,298
-13,917,069
Financial revenue
674,938
Financial expenses
994,002
Deferred taxes and taxes for the current period
608,921
Net profit
2,200,313
4
BREAD
CONTEMPORARY
CUISINE
CONFECTIONERY
45,755,038
29,270,498
Sales Revenues - by segments
3,315,776
TOTAL
49,070,814
38,201
Business segments for 2012
Sales Revenues
TOTAL
Elimination
entries and
Adjustments
Consolidation
1,182,979
126,947,162
-15,773,952
111,173,210
0
637,368
21,349,965
-21,349,965
0
8,027,375
1,820,347
148,297,126
-37,123,916
111,173,210
0
-5,05
-768,419
1
-768,418
MILLING
RETAIL
SALES
OTHER
28,727,206
13,984,066
8,027,375
3,131,553
1,331,835
12,933,433
32,402,052
30,059,041
26,917,499
-314,480
-18,417
-468,673
0
Other revenues
TOTAL
502,769
158,483
184,923
28,498
18,992
4,397,877
5,291,541
-629,516
4,662,025
49,611,784
32,246,054
30,225,546
26,477,323
8,046,367
6,213,174
152,820,249
-37,753,433
115,066,816
1,496,091
2,340,540
5,957,849
481,881
5,552,893
-17,898
15,811,356
-1,404,202
14,407,154
Costs and expenditures (without general expenditures):
Cost of goods purchased
Cost of goods purchased - by segments
Cost of materials
Cost of materials - by segments
Cost of services
Cost of services - by segments
3,436
9
45,234
0
0
0
48,679
-48,679
0
9,685,403
11,346,303
13,179,297
14,443,760
171,478
709,964
49,536,206
-10,078,276
39,457,930
7,479,587
1,907,943
509,243
4,429,859
0
0
14,326,633
-14,326,633
0
11,108,538
3,707,460
2,949,929
2,005,863
1,073,282
6,721,782
27,566,854
-4,195,454
23,371,400
3,254,721
1,759,574
703,152
930,007
0
327,2
6,974,654
-6,974,654
0
Write-offs
2,510,384
959,499
1,143,371
608,927
25,048
745,979
5,993,207
-141,937
5,851,270
Labour costs
9,268,956
2,970,479
4,187,034
1,108,062
1,579,349
6,256,508
25,370,387
-628,812
24,741,575
Other costs
137,161
50,095
69,644
113,152
13,953
1,394,833
1,778,837
1,358
1,780,195
44,944,277
25,041,902
28,744,752
24,121,511
8,416,003
16,138,368
147,406,812
-37,797,287
109,609,524
4,667,507
7,204,153
1,480,794
2,355,812
-369,636
126,947,162
5,413,437
43,854
5,457,291
TOTAL (without general expenses)
Operating profit (without allocation of general expenses)
Financial revenue
Financial expenses
Deferred taxes and taxes for the current period
Net profit
267,476
4,785,097
550,173
389,495
4
23.2 Net sales revenue
Net sales revenue – Žito Group
In EUR
2013
2012
Domestic market
92,654,061
93,330,764
Foreign markets
18,206,561
17,842,446
12,225,103
9,349,464
5,981,458
8,492,982
110,860,622
111,173,210
1. Sales revenue in the EU market
2. Sales revenue in other foreign markets
TOTAL
In 2013, Žito Group generated 84% of its total sales revenue in
the domestic market, of which EUR 109,780,666 came from the
sale of products, goods and materials, and EUR 1,079,956 from
the sale of services, including rental income of EUR 576,001.
Net sales revenue – Žito d.d.
In EUR
2013
2012
Domestic market
90,489,033
91,008,940
Foreign markets
13,236,622
12,320,241
0
0
7,261,430
3,827,260
3. Sales revenue in other foreign markets
5,975,193
8,492,981
103,725,655
103,329,181
TOTAL
In 2013, the Group generated 87% of its total sales revenue in the
domestic market, of which EUR 101,689,205 came from the sale
of products, goods and materials, and EUR 2,036,449 from the
sale of services, including rental income of EUR 1,269,292.
4
23.3 Other operating revenue
Other operating revenue – Žito Group
In EUR
2013
2012
749,473
88,025
44,323
381,751
Compensation received from insurers
707,740
75,700
187,635
3,240,825
Reversal of short-term accrued and deferred costs and revenue
145,857
568,069
3,251
275,328
1,838,281
4,629,700
2013
2012
124,462
29,767
44,153
381,566
702,154
31,636
40,995
3,478,488
Reversal of short-term accrued and deferred costs and revenue
135,931
114,919
TOTAL
1,047,697
4,036,376
Government grants
Recovery of written-off receivables
TOTAL
Other operating revenue – Žito d.d.
In EUR
Government grants
Compensation received from insurers
Government grants comprise export subsidies and non-repayable funds for co-financing capital expenditure.
4
23.4 Costs of goods, materials and services
Costs of goods, materials and services – Žito Group
In EUR
2013
2012
Original cost of goods and materials sold, and cost of materials used
53,527,941
53,865,085
Costs of services, of which:
22,964,792
23,371,400
1. Transportation costs
5,793,809
5,868,516
2. Advertising and similar costs
8,145,335
8,625,634
3. Current maintenance costs
1,368,094
1,377,675
4. Costs of production services
2,319,436
2,259,474
5. Rents
1,080,506
1,016,526
6. Employee-related costs
309,307
351,122
7. Costs of banking services and insurance costs
670,492
673,124
8. Costs of cleaning and municipal services
637,431
626,594
9. Costs of other services
2,640,382
2,572,736
TOTAL
76,492,733
77,236,485
2013
2012
Original cost of goods and materials sold, and cost of materials used
51,503,257
51,348,523
Costs of services, of which:
24,584,921
24,326,001
1. Transportation costs
5,789,073
5,865,134
2. Advertising and similar costs
8,148,410
8,635,682
3. Current maintenance costs
1,177,361
1,154,745
4. Costs of production services
3,664,005
3,590,928
5. Rents
1,337,588
708,316
6. Employee-related costs
280,734
312,977
7. Costs of banking services and insurance costs
600,992
602,313
8. Costs of cleaning and municipal services
512,099
482,138
9. Costs of other services
3,074,659
2,973,768
TOTAL
76,088,177
75,674,524
Costs of goods, materials and services – Žito d.d.
In EUR
4
23.5 Labour costs
Labour costs – Žito Group
In EUR
2013
2012
17,041,944
17,344,445
Pension insurance costs
1,793,907
1,881,109
Other social security insurance costs
1,266,005
1,164,884
Other labour costs:
4,294,016
4,351,138
Meals
1,565,083
1,397,867
Transportation to work
1,157,688
1,249,574
Annual leave allowance
1,049,248
936,796
Provisions for business reasons, provisions for severance pay and jubilee awards
113,073
690,610
Other labour costs
408,923
76,291
24,395,872
24,741,575
2013
2012
13,029,556
13,212,811
1,354,265
1,394,968
969,638
995,833
3,154,315
2,980,555
1,122,486
982,863
Transportation to work
843,000
880,746
Annual leave allowance
733,068
644,722
86,017
415,299
369,743
56,925
18,507,773
18,584,167
Costs of wages and salaries
TOTAL
Labour costs – Žito d.d.
In EUR
Costs of wages and salaries
Pension insurance costs
Other social security insurance costs
Other labour costs:
Meals
Provisions for business reasons, provisions for severance pay and jubilee awards
Other labour costs
TOTAL
4
23.6 Amortisation and write-offs
Amortisation and write-offs – Žito Group
In EUR
2013
2012
5,670,590
5,528,874
5,545,303
5,314,230
125,287
214,644
738,188
55,045
248,033
55,045
490,156
0
Operating expenses from the revaluation of operating current assets:
878,901
267,352
revaluation of receivables
349,824
17,739
529,077
249,613
7,287,679
5,851,270
2013
2012
4,533,620
4,815,933
4,408,333
4,601,289
125,287
214,644
625,752
51,784
247,915
51,784
377,838
0
Operating expenses from the revaluation of operating current assets:
680,399
222,253
revaluation of receivables
240,552
590
439,847
221,663
5,839,772
5,089,970
Amortisation:
property plant and equipment and investment property
intangible assets
Operating expenses from the revaluation of intangible assets and property, plant and equipment:
property, plant and equipment (write-offs of assets and losses on sales)
tangible fixed assets (impairment)
revaluation of inventories
TOTAL
Amortisation and write-offs – Žito d.d.
In EUR
Amortisation:
property plant and equipment and investment property
intangible assets
Operating expenses from the revaluation of intangible assets and property, plant and equipment:
property, plant and equipment (write-offs of assets and losses on sales)
tangible fixed assets (impairment)
revaluation of inventories
TOTAL
4
23.7 Other operating expenses
Other operating expenses – Žito Group
In EUR
2013
2012
439,507
421,751
Donations
22,464
11,500
Damages
12,252
6,388
823,533
1,340,556
1,297,756
1,780,195
2013
2012
197,740
339,926
Donations
22,464
4,500
Damages
11,200
2,638
Charge for building land
TOTAL
Other operating revenues – Žito d.d.
In EUR
Charge for building land
TOTAL
794,978
1,307,878
1,026,382
1,654,942
4
23.8 Financial revenue from shares
Financial revenues from participating
interests – Žito Group
In EUR
Dividends from other investments
2013
2012
197,005
47,863
Gains on the disposal of investments classified as available-for-sale
19,924
TOTAL
216,929
47,863
2013
2012
180,272
47,863
Gains on the disposal of investments classified as available-for-sale
19,924
0
TOTAL
200,196
47,863
Financial revenues from participating
interests – Žito d.d.
In EUR
Dividends from other investments
4
23.9 Financial revenues from operating receivables
Financial revenues from loans and operating receivables – Žito Group
In EUR
2013
2012
21,640
9,604
21,640
9,604
a) Financial revenues from loans
Interest to other entities
Total
b) Financial revenues from operating receivables
498,411
210,009
Total
498,411
210,009
Total (a + b)
520,051
219,613
2013
2012
147,919
171,037
19,631
9,197
Total
167,549
180,234
Financial revenues from loans and operating receivables – Žito d.d.
In EUR
a) Financial revenues from loans
Interest to entities in the group
b) Financial revenues from operating receivables
451,331
206,386
Total
451,331
206,386
Total (a + b)
618,880
386,620
4
23.1 Financial expenses from impairments and write-offs of investments
Financial expenses from impairments and write-offs of investments – Žito Group
V EUR
2013
2012
Revaluation financial expenses from financial investments finančni odhodki pri finančnih nalož-
0
3,526,787
Skupaj
0
3,526,787
2013
2012
Revaluation financial expenses from financial investments
0
3,526,787
Total
0
3,526,787
a) Financial expenses from impairments and write-offs of investments
Financial expenses from impairments and write-offs of investments – Žito Group
in EUR
a) FInancial expenses from impairments and write-offs of investments
4
23.11 Financial expenses from financial and operating liabilities
Financial expenses from financial and operating liabilities – Žito Group
In EUR
2013
2012
787,419
955,943
109,253
896,672
0
955,943
68,750
296,659
Exchange rate differences
90,622
5,709
Total
159,372
302,367
1,056,044
1,258,310
2013
2012
18,135
29,531
787,419
945,069
a) Financial expenses from financial liabilities
Interest on banks loans
Expenses due to disposal of financial investments
Total
b) Financial expenses from operating liabilities
Total (a + b)
Financial expenses from financial and operating liabilities – Žito d.d.
In EUR
a) Financial expenses from financial liabilities
Interest to entities in the group
Interest on banks loans
Expenses due to disposal of financial investments
Total
8,333
813,887
974,600
52,665
295,619
b) Financial expenses from operating liabilities
4
Exchange rate differences
20,093
1,877
72,758
297,495
886,645
1,272,095
2013
2012
Tax in current year
-330,546
-278,995
Deferred tax liabilities/receivables
-278,375
-271,178
-608,921
-550,173
2013
2012
2,809,234
939,669
-477,570
-169,140
-306,467
-289,972
Non-deductible expenses
-146,436
-451,582
28,092
18,794
299,985
390,961
Total
Total (a + b)
23.12 Income tax
Income tax for the current year – Žito Group
Tax expenses disclosed in the income statement, in EUR
Income tax expenses reported in profit and loss
Income tax for the current year – Žito Group
Reconciliation of actual and calculated tax expenses, taking
into account the effective tax rate, in EUR
Pre-tax profit according to the IFRS
Corporate income tax, taking into account prescribed tax rate (2013: 17%, 2012: 18%)
Effect of the changed tax rate
Tax relief utilised in current period
Other
Total income tax expenses
Effective tax rate
The retained unutilised tax losses as at 31 December 2013 amounted to EUR 2,106,544.87
-6,524
-49,233
-608,921
-550,173
22%
59%
4
Corporate income tax for the current year – Žito d.d.
Tax expenses disclosed in the income statement, in EUR
2013
2012
Tax in current year
-284,217
-278,995
Deferred tax liabilities/receivables
-261,011
-297,457
-545,228
-576,452
2013
2012
3,041,573
1,326,300
-517,067
-238,734
-291,427
-323,983
Non-deductible expenses
-113,519
-400,510
30,416
26,526
Tax relief utilised in current period
207,834
348,198
Other
138,535
12,051
Total income tax expenses
-545,228
-576,452
18%
43%
Income tax expenses reported in profit and loss
Corporate income tax for the current year – Žito d.d.
Reconciliation of actual and calculated tax expenses, taking into account the effective tax
rate, in EUR
Pre-tax profit according to the IFRS
Corporate income tax, taking into account prescribed tax rate (2013: 17%, 2012: 18%)
Effect of the changed tax rate
Effective tax rate
4
23.13 Deferred corporate income tax
Deferred corporate income tax – Žito Group
31 Dec 2013
In EUR
Deferred tax
receivables
Deferred tax
liabilities
31 Dec 2012
Deferred tax
receivables
Tax losses brought forward
49,076
100,598
Non-current financial investments at fair value
66,753
84,275
Provisions and non-current accrued costs and deferred
revenue
Fixed assets
Deferred tax
liabilities
2013
Effect on profit or loss
Effect on
capital
4,448
33,644
3,648
227,023
485,569
-317,882
35,058
35,058
377,910
674,090
Deferred tax liabilities
Deferred tax recognised in profit or loss
-278,375
Deferred income tax in revaluation of capital
33,644
Deferred corporate income tax – Žito d.d.
31 Dec 2013
In EUR
Deferred tax
receivables
Deferred tax
liabilities
31 Dec 2012
Deferred tax
receivables
Deferred tax
liabilities
2013
Effect on profit or loss
Effect on
capital
Tax losses brought forward (merger)
Non-current financial investments at fair value
66,753
84,275
130,148
391,159
196,901
475,434
33,644
Provisions and non-current accrued costs and deferred
-261,011
Deferred tax liabilities
Deferred tax recognised in profit or loss
Deferred income tax in revaluation of capital
-261,011
33,644
4
23.14 Net earnings per share (EPS)
In EUR
Net profit of the Žito Group appertaining to ordinary shareholders
Weighted average number of ordinary shares for basic net earnings per share
2013
2012
2,200,631
390,801
345,259
352,746
6.37
1.11
Net earnings per share (EPS)
23.15 Dividends paid and proposed
In EUR
Declared and paid during the year
Dividends on ordinary shares (total annual dividend)
Dividend per share
Proposed for approval at the annual general meeting
The number of shares for dividends
Dividend per share
2013
2012
Payment for 2012
Payment for 2011
1,054,711
1,128,787
2.99
3.2
Payment for 2013
Payment for 2013
320,213
352,746
3.4
1
The dividend proposed by the Management Board for distributable profit for 2013 was EUR 3.40 per share.
4
23.16 Intangible assets and long-term deferred costs and accrued revenues
Intangible assets and non-current deferred costs and accrued revenues – Žito Group
In EUR
Purchase value on 1 Jan 2013
Long-term property rights
Assets in acquisition
Other non-current deferred
costs and accrued
revenues
Total
2,115,955
0
2,695
2,118,650
New acquisitions
35,889
55,889
0
91,779
Disposals and reductions
59,596
35,889
0
95,485
Purchase value on 31 Dec 2013
2,092,249
20,000
2,695
2,114,944
Adjustment to value on 1 Jan 2013
1,857,388
0
2,366
1,859,754
Amortisation in current year
125,288
0
0
125,288
59,596
0
3
59,599
1,923,080
0
2,369
1,925,449
Carrying amount as at 1 Jan 2013
258,567
0
329
258,896
Carrying amount as at 31 Dec 2013
169,168
20,000
326
189,494
Adjustment to value as at 31 Dec 2013
2,119,948
2,736
2,122,684
New acquisitions
101,337
0
101,337
105,330
41
105,371
2,115,955
2,695
2,118,650
1,748,074
214,644
2,366
0
1,750,440
214,644
-105,330
0
-105,330
1,857,388
2,366
1,859,754
371,874
370
372,244
258,567
329
258,896
Adjustment to value as at 1 Jan 2012
4
Intangible assets and non-current deferred costs and accrued revenues – Žito d.d.
Long-term property rights
Assets in acquisition
Other non-current deferred
costs and accrued
revenues
Total
2,090,917
0
0
2,090,917
New acquisitions
35,889
55,889
0
91,779
59,596
35,889
0
95,485
2,067,212
20,000
0
2,087,212
1,832,350
0
0
1,832,350
125,288
0
0
125,288
59,596
0
0
59,596
1,898,042
0
0
1,898,042
258,567
0
0
258,567
169,169
20,000
0
189,169
In EUR
2,094,910
0
2,094,910
New acquisitions
101,337
0
101,337
105,330
0
105,330
2,090,917
0
2,090,917
1,723,037
214,643
0
0
1,723,037
214,643
-105,330
0
-105,330
1,832,350
0
1,832,350
371,873
0
371,873
258,567
0
258,567
4
23.17 Tangible fixed assets
Property, plant and equipment – Žito Group
In EUR
Acquisitions and increases
Disposals
Transfer among assets
Land
Buildings
Production
plant and other
equipment
Property, plant and
equipment under
acquisition
Total
8,323,727
72,447,923
91,122,542
3,795,838
175,690,031
31,547
108,193
5,614,650
-3,028,142
2,726,249
405
115,042
2,479,352
0
2,594,799
32,293
0
0
0
32,293
8,322,576
72,441,075
94,257,840
767,696
175,789,187
0
0
40,557,154
75,078,313
0
115,635,467
0
1,174,633
4,138,741
0
5,313,374
Disposals
0
20,425
2,428,627
0
2,449,051
0
41,711,362
76,788,427
0
118,499,789
0
8,323,727
31,890,769
16,044,229
3,795,838
60,054,564
8,322,576
30,729,712
17,469,413
767,696
57,289,398
4
In EUR
Transfer among assets*
Land
Buildings
Production
plant and other
equipment
Property, plant and
equipment under
acquisition
Total
9,119,978
74,550,674
93,282,315
1,333,628
178,286,595
-710,638
-3,959,589
379,445
0
-4,290,782
8,409,340
70,591,085
93,661,760
1,333,628
173,995,813
0
2,434,752
2,096,681
2,462,209
6,993,642
85,613
577,914
4,635,717
0
5,299,244
-182
0
-182
Disposals
Adjustment for foreign exchange differences
8,323,727
72,447,923
91,122,542
3,795,837
175,690,029
0
42,249,638
75,392,077
0
117,641,715
0
-2,550,737
0
-2,550,737
0
39,698,901
75,392,077
0
115,090,978
0
1,173,421
4,241,181
0
5,414,602
Disposals
0
315,168
4,554,945
0
4,870,113
0
40,557,154
75,078,313
0
115,635,467
8,409,340
30,892,184
18,269,683
1,333,628
58,904,835
8,323,727
31,890,769
16,044,229
3,795,837
60,054,562
0
*Changes in the accounting principle as of 1 Jan 2012 and the transfer of a group of fixed assets reflect the changing value in fixed assets as of 1 Jan 2012.
A mortgage is registered under application nos. 335, 344 and
814 in the cadastral community of Bežigrad and under application nos. 2369, 3206, 3318 and 1119 in the cadastral community of Tezno. The outstanding amount of the mortgage on
31 December 2013 is EUR 1,100,000. Under entry no. 617 in the
cadastral municipality of Hraše, a mortgage has been entered,
the outstanding amount of which is EUR 4,900,000, and under
entry nos. 2363 in the cadastral municipality of Bežigrad and
under entry no. 680 in the cadastral municipality of Tezno, a
mortgage has been entered, the outstanding amount of which
equals EUR 2,898,333. The total amount of mortgaged loans is
EUR 8,898,333. The carrying amount of licensed property as of
31 December 2013 amounted to EUR 9,167,375.
4
Plant, property and equipment – Žito d.d.
Land
Buildings
Production
plant
Other
equipment
Property, plant
and equipment
under acquisition
Total
5,232,595
45,358,257
74,693,213
10,843,823
3,733,656
139,861,544
-745
79,307
4,815,735
664,713
-3,197,601
2,361,409
405
115,042
1,412,855
1,058,733
0
2,587,035
5,231,444
45,322,522
78,096,092
10,449,803
536,055
139,635,917
0
24,646,845
63,241,790
8,532,919
0
96,421,554
0
678,011
2,777,088
736,241
0
4,191,340
Disposals
0
20,425
1,393,473
1,027,508
0
2,441,405
0
25,304,431
64,625,405
8,241,652
0
98,171,489
5,232,595
20,711,412
11,451,423
2,310,904
3,733,656
43,439,990
5,231,444
20,018,091
13,470,688
2,208,150
536,055
41,464,429
Land
Buildings
Production
plant
Other
equipment
Property, plant
and equipment
under acquisition
Total
8,007,612
61,493,331
77,118,817
11,219,639
1,103,398
158,942,797
Transfer among assets
-710,638
-3,959,589
7,296,974
57,533,742
77,118,817
11,219,639
1,103,398
154,272,570
2,376,930
1,114,882
636,327
2,630,258
6,758,397
2,064,379
14,552,415
3,540,486
1,012,143
0
21,169,423
5,232,595
45,358,257
74,693,213
10,843,823
3,733,656
139,861,544
Adjustment to value as at 31 Dec
0
36,930,745
63,904,804
8,712,673
0
109,548,222
0
-2,550,737
0
-2,550,737
0
34,380,008
0
106,997,485
In EUR
Disposals
In EUR
Disposals
-4,670,227
63,904,804
8,712,673
4
0
1,064,486
2,842,031
795,142
0
4,701,659
Disposals
0
10,797,650
3,505,045
974,896
0
15,277,591
0
24,646,844
63,241,790
8,532,919
0
96,421,553
7,296,974
23,153,734
13,214,013
2,506,966
1,103,398
47,275,085
5,232,595
20,711,413
11,451,423
2,310,904
3,733,656
43,439,991
* Changes in the accounting principle as of 1 Jan 2012 and the transfer of a group of fixed assets reflect the changing value in fixed assets as of 1 Jan 2012.
A mortgage is registered under application nos. 335, 344 and
814 in the cadastral community of Bežigrad and under application nos. 2369, 3206, 3318 and 1119 in the cadastral community of Tezno. The outstanding amount of the mortgage on
31 December 2013 is EUR 1,100,000. Under entry no. 617 in the
cadastral municipality of Hraše, a mortgage has been entered,
the outstanding amount of which is EUR 4,900,000, and under
entry nos. 2363 in the cadastral municipality of Bežigrad and
under entry no. 680 in the cadastral municipality of Tezno, a
mortgage has been entered, the outstanding amount of which
equals EUR 2,898,333. The total amount of mortgaged loans is
EUR 8,898,333. The carrying amount of licensed property as of
31 December 2013 amounted to EUR 9,167,375.
23.18 Investment property
Investment property – Žito Group
Investment property at fair value
State on 1 Jan
2013
2012
6,761,568
3,429,428
5,286
Increases - acquisitions
Decreases - disposals
Decreases - impairments
208,545
112,318
0
-32,292
3,379,665
15,233
0
State on 1 Dec
6,409,113
6,761,568
Requalification
-36,878
4
Investment property – Žito d.d.
Investment property at fair value
State on 1 Jan
2013
2012
2,768,505
5,638,201
0
Requalification
-36,878
Decreases - disposals
Decreases - impairments
12,858
208,545
3,379,665
6,249,361
0
State on 1 Dec
2,535,940
2,768,505
23.19 Investments in subsidiaries
The companies below are part of the Group, and are included
in the consolidation. The equity holding is calculated from the
point of view of Žito d. d.
Company name
Equity stake
Share of votes
Equity
Profit or loss
99.55%
99.55%
1,564,175
-70,907
100%
100%
253,199
14,063
Šumi bonboni d.o.o., Ljubljana
100%
100%
-846,446
45,332
Šumi nepremičnine d.o.o., Ljubljana
100%
100%
14,266,131
-34,679
Žito nepremičnine d.o.o., Ljubljana
100%
100%
8,897
-129
LD Žito Zagreb d.o.o., Ljubljana
100%
100%
-1,917,960
-79,333
Žito d.o.o., Belgrade
Žito PI d.o.o.e.l., Skopje
100%
100%
100%
100%
-118,228
5,549
0
768
Investments in subsidiaries were not impaired, as the Group
assesses that there are no indications of impairment.
4
23.20Financial assets
Financial assets – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
1,430,192
2,996,135
1,356,736
2,897,542
73,456
98,593
19,752
29,400
19,752
29,400
1. Long-term financial investments, excluding loans
0
0
Other shares and participating interests
0
0
28,730
47,200
28,730
47,200
1,478,674
3,072,735
1,356,736
2,897,542
73,456
98,593
Loans granted
48,482
76,600
1,478,674
3,072,735
Other shares and stakes
Other long-term financial investments
2. Long-term loans
Long-term loans to others
2. Short-term loans
Short-term loans to others
Total investments
TOTAL
4
Financial assets – Žito d.d.
In EUR
Shares and stakes in companies in the group
Other shares and stakes
Other long-term financial investments
31 Dec 2013
31 Dec 2012
16,880,201
16,075,201
961,642
915,248
888,186
816,655
73,456
98,593
2. Long-term loans
19,752
29,400
Long-term loans to others
19,752
29,400
0
0
Other shares and participating interests
0
0
6,621,294
6,345,240
6,592,564
6,298,040
28,730
47,200
24,482,890
23,365,089
16,880,201
16,075,201
888,186
816,655
73,456
98,593
Loans granted
6,641,046
6,374,640
TOTAL
24,482,890
23,365,089
2. Short-term loans
Short-term loans to undertakings in the group
Short-term loans to others
Total investments
Investments in undertakings in the group at original cost
4
Available-for-sale financial investments – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
Unquoted equity shares
573,404
136,393
Quoted shares
783,332
2,761,149
TOTAL
1,356,736
2,897,542
31 Dec 2013
31 Dec 2012
16,985,055
16,211,594
783,332
2,761,149
17,768,387
18,972,743
Available-for-sale financial investments – Žito d.d.
In EUR
Unquoted shares (including those of subsidiaries)
Quoted shares
TOTAL
Available-for-sale financial investments comprise investments in
ordinary shares; therefore, they have no determinate maturity or
interest rate. Available-for-sale financial investments measured at
fair value total EUR 783 thousand. Šumi nepremičnine d.o.o. company sold all its shares in Mlinotest d.d. in 2013.
4
Held-to-maturity investments – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
Bonds
73,456
98,593
TOTAL
73,456
98,593
In EUR
31 Dec 2013
31 Dec 2012
Bonds
73,456
98,593
TOTAL
73,456
98,593
31 Dec 2013
31 Dec 2012
Land
100,100
151,620
Buildings
821,972
562,988
8,311
8,404
930,383
723,012
31 Dec 2013
31 Dec 2012
97,124
770,894
8,311
148,644
511,910
8,404
876,329
668,958
Held-to-maturity investments – Žito d.d.
23.21 Assets held for sale
Carrying amount of assets held for sale – Žito Group
In EUR
Equipment
TOTAL
Carrying amount of assets held for sale – Žito d.d.
In EUR
Land
Buildings
Equipment
TOTAL
4
Both Žito d.d. and Žito Group class assets that are not required in
their business processes and that they therefore intend to sell as
assets held for sale. They include land and buildings in Postojna,
Metlika, Lovrenc, Ruše, Poljčane, and other minor buildings and
equipment. The Company advertises all the assets via estate
agents.
23.22 Inventories
Inventories – Žito Group
In EUR
Materials
Work in progress
Products and merchandise
Advances for inventories
TOTAL
The Group wrote off inventories of products and
merchandise in the amount of EUR 286 thousand in 2013
due to obsolescence, compared with EUR 249 thousand
31 Dec 2013
31 Dec 2012
10,147,409
12,376,726
396,094
306,552
5,157,178
5,420,935
90,802
54,475
15,791,483
18,158,688
in the previous year. Due to new standards, the company
adjusted the value of obsolete inventories (not older than
360 days), which amounted to EUR 242 thousand.
Inventories – Žito d.d.
In EUR
Materials
Work in progress
Products and merchandise
Advances for inventories
TOTAL
The company wrote off inventories of products and merchandise in the
amount of EUR 249 thousand in 2013 due to obsolescence, compared
with EUR 221 thousand in the previous year. Inventories were written off
during the year. No inventories have been pledged as collateral. At the-
31 Dec 2013
31 Dec 2012
8,843,392
11,107,733
135,520
111,873
4,569,364
4,878,769
80,032
49,014
13,628,308
16,147,389
end of 2013, due to new standards, the company adjusted the value of
obsolete inventories (not older than 360 days), which amounted to EUR
191 thousand.
4
23.23 Short-term operating receivables
Operating receivables – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
25,287,950
25,999,491
Short-term receivables due from foreign customers
3,095,782
2,051,512
Short-term receivables from others
1,208,969
1,328,849
TOTAL
29,592,701
29,379,852
31 Dec 2013
31 Dec 2012
28,009,804
28,901,086
3,618,706
2,878,212
889,509
988,279
32,518,019
32,767,577
Short-term receivables due from domestic customers
The Group disclosed expenses in the amount of EUR 350 thousand from the creation of value adjustments to receivables, compared with expenses of EUR 18 thousand in the previous year.
Operating receivables – Žito d.d.
In EUR
Short-term receivables due from domestic customers
Short-term receivables due from foreign customers
Short-term receivables from others
TOTAL
The company disclosed expenses in the amount of EUR 240
thousand from the creation of adjustments to the value of trade
receivables, compared with expenses of EUR 0.5 thousand in the
previous year.
Trade receivables are non-interest bearing. Short-term operating receivables due from Group companies at the end of the
year reached EUR 3,416 thousand. Trade receivables in the amount of EUR 4,198 thousand are insured by property mortgage.
4
Change in the value adjustments of trade receivables
Žito Group
Žito d.d.
2013
2012
2013
2012
5,814,865
6,363,687
7,485,403
7,698,312
Increase
749,325
434,087
701,388
416,428
Reversal
-450,216
-655,677
-450,216
-302,104
Write-offs
-585,823
-327,233
-585,823
-327,233
State on 31 Dec
5,528,151
5,814,865
7,150,752
7,485,403
State on 1 Jan
Age structure of trade receivables (in unadjusted amounts) – Žito Group
In EUR
Total
Undue
Up to 30 days
30-60 days
60-90 days
90-120 days
More than 120
2013
33,907,823
19,090,875
4,656,200
307,302
51,086
63,110
9,739,250
2012
33,520,463
19,664,597
4,959,271
1,557,959
1,320,956
544,951
5,472,730
Age profile of trade receivables (in unadjusted amounts) – Žito d.d.
In EUR
Total
Undue
Up to 30 days
30-60 days
60-90 days
90-120 days
More than 120
2013
38,712,509
20,239,297
4,662,506
487,922
197,145
178,811
12,946,828
2012
38,422,472
22,616,199
4,854,689
1,575,326
1,323,741
544,951
7,507,567
Žito d. d. and the Žito Group perform a value adjustment of trade
receivables of the largest customers based on individual assessments. In 2013, Žito d. d. and the Žito Group did not perform
new value adjustments of receivables under this item, as management assesses that these trade receivables will be paid in full.
4
23.24 Cash and cash equivalents
Cash and cash equivalents – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
5,371,367
1,318,614
5,371,367
1,318,614
31 Dec 2013
31 Dec 2012
4,522,766
915,243
4,522,766
915,243
31 Dec 2013
31 Dec 2012
Issued share capital (ordinary shares)
14,846,937
14,846,937
Issued share capital (ordinary shares)
Number in 2013
Number in 2012
355,792
355,792
0
0
355,792
355,792
2013
2012
As at 31 Dec (in EUR)
2,326,437
472,056
Number as at 31 Dec
35,579
3,046
Cash in transaction accounts at banks and cash in hand
TOTAL
Cash and cash equivalents – Žito d.d.
In EUR
Cash in transaction accounts at banks and cash in hand
TOTAL
23.25 Called-up capital
Called-up capital, in EUR
As at 1 Jan
Issued
As at 31 Dec
Own shares held in treasury
32,533 of 35,579 treasury shares are owned by Šumi nepremičnine d.o.o.
4
23.26
Profit reserves
Profit reserves – Žito Group
Legal reserves
Reserves for
treasury shares
Treasury shares as
deductible
Statutory
reserves
Reserves for
currency differences
Other reserves
from profit
Total
On 1 Jan 2013
Formation of other reserves
from profit on the basis of
the decision of MB and SB
Currency differences
4,427,790
472,056
-472,056
166,734
172,900
2,953,299
7,720,723
0
1,854,381
-1,854,381
0
0
0
0
On 31 Dec 2013
4,427,790
In EUR
2,310
2,326,437
-2,326,437
166,734
2,310
175,210
2,953,299
7,723,034
Profit reserves – Žito d.d.
In EUR
On 1 Jan 2013
Formation of other reserves from profit on
the basis of the decision of MB and SB
Currency differences
On 31 Dec 2013
Legal reserves
Reserves for
treasury shares
Treasury shares as
deductible
Statutory
reserves
Other reserves
from profit
Total
4.427.790
472.056
-472.056
166.734
2.953.299
7.547.823
0
1.854.381
0
0
0
1.854.381
4.427.790
2.326.437
-472.056
166.734
2.953.299
0
9.402.204
The legal reserves have been created in accordance with the
Companies Act, and may be used to cover losses under certain
conditions. Legal reserves may not be distributed.
Own shares held in treasury have been created in accordance
with the Companies Act, and may not be distributed.
The foreign currency conversion reserve, which is for foreign
exchange differences arising from the conversion of the functional currency into the presentation currency, is recognised directly in equity until the moment that the subsidiary is sold, when
the foreign exchange differences are transferred to profit or loss.
Legal reserves may not be distributed.
The company Žito d.d. generated EUR 2,496 thousand net profit
in 2013.
Žito d.d.’s distributable profit as at 31 Dec 2013 in the amount of
EUR 25,983 thousand comprises the net profit for the current
financial year in the amount of EUR 2,496 thousand and retained
earnings in the amount of EUR 23,487 thousand.
4
23.27 Provisions and non-current accrued costs and deferred revenue
Provisions and non-current accrued costs and deferred revenues – Žito Group
Provisions for pensions and
similar liabilities
Other provisions and accrued
costs and revenues
Total
3,335,886
2,518,398
5,854,284
Newly created provisions
135,939
1,806,466
1,942,405
67,834
742,492
810,326
1,766,271
0
1,766,271
1,637,721
3,582,372
5,220,093
In EUR
Utilised
Reversal
Other provisions and non-current accrued costs and deferred revenues – Žito Group
In EUR
2013
2012
Government grants for co-financing capital expenditure
2,421,850
1,893,826
Government grants for waived contributions for disabled workers’ company
1,160,522
624,572
3,582,372
2,518,398
TOTAL
Provisions and non-current accrued costs and deferred revenues – Žito d.d.
In EUR
Provisions for pensions and
similar liabilities
Other provisions and
accrued costs and revenues
Total
2,565,168
353,569
2,918,737
Newly created provisions
99,423
1,126,086
1,225,508
Utilised
48,557
124,462
173,019
1,426,785
0
1,426,785
1,189,248
1,355,193
2,544,441
Reversal
4
Retirement and anniversary bonus provision
Anniversary bonus and retirement provisions are provided to employees in
accordance with Slovenian legislation. Employees who have been employed at
least five years with an employer are entitled on retirement to the payment of
a retirement bonus of two average monthly salaries in the Republic of Slovenia
for the previous three months, or two average monthly salaries for the previous
three months if this is more beneficial to the employee, i.e. in a single amount.
Employees are also entitled to anniversary bonuses for every ten years of work
with their last employer, i.e. in accordance with the law or collective agreement
(EUR 460 for 10 years, EUR 689 for 20 years, EUR 919 for 30 years and EUR 919 for
40 years).
Žito Group and Žito d.d. acquired the first actuarial calculations of provisions for
retirement and anniversary bonuses in 2013. In accordance with the new IAS 19
standard (Employee benefits), Žito eliminated actuarial profits via equity (retained profits from previous years). The Group used this standard retrospectively in
the current year by considering the standard's transitional provisions.
The model anticipates real growth in salaries in the company by 0.00% per year,
real growth in gross salaries in the Republic of Slovenia by 0.73% per year and
real growth of the three-month average of gross salaries in the Republic of Slovenia by 0.75% per year.
Other actuarial assumptions considered in the formation of provisions on 31 December 2013:
Mortality tables
SLO 00-02
Fluctuation
(basic)
Inflation
Interest rate
movements
6.00% p.a.
3.00% p.a.
ECB Euro
area AAA
The basic employee fluctuation is 6% per year. Fluctuation reduces by age of employees:
•
6.00% for employees to 35 years,
•
4.00% for employees older than 45 years,
•
2.00% for employees to 55 years,
•
0.50% for employees older than 55 years.
Technical IR
for discount
factor
Curve
IR + 5.00%
Future
growth of
salaries in
the RS
Future real growth
of salaries in the
company
3.76%
0.00% p.a.
4
Žito Group
Provisions for anniversary
bonuses
Provisions for retirement
bonus
Total
670,034
2,127,960
2,797,994
Payments in 2013
66,402
23,631
90,033
Costs of regular work
24,364
55,606
79,971
Costs of interests
12,947
43,021
55,968
141,129
1,065,051
1,206,180
499,815
1,137,905
1,637,720
Provisions for anniversary
bonuses
Provisions for retirement
bonus
Total
479,846
1,624,242
2,104,088
Payments in 2013
43,651
14,557
58,208
Costs of regular work
17,709
39,529
57,238
9,312
32,873
42,185
95,268
860,786
956,055
367,947
821,301
1,189,248
Actuarial profit/loss
Žito d.d.
Costs of interests
Actuarial profit/loss
On 1 January 2013, the company requalified the calculated annual leave and excessive hours from long-term provisions to short-term accrued expenses and deferred revenues. In Žito d.d., this amount was EUR 461 thousand; in the Žito Group the amount was EUR 538 thousand.
4
23.28 Non-current and current financial liabilities
Financial liabilities – Žito Group
Long-term
In EUR
Current
Total
31 Dec 2013
31 Dec 2012
31 Dec 2013
31 Dec 2012
31 Dec 2013
31 Dec 2012
2,158,333
8,898,333
19,954,500
18,351,263
22,112,833
27,249,596
0
0
2,488
2,488
2,488
2,488
2,158,333
8,898,333
19,956,988
18,353,751
22,115,321
27,252,084
Financial liabilities to banks
Other financial liabilities
Total
Loan maturities – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
Up to 1 year
19,956,988
18,353,751
1 to 2 years
740,000
7,480,000
2 to 5 years
1,418,333
1,418,333
Total
22,115,321
27,252,084
Loan currencies – Žito Group
31 Dec 2013 (denomination)
Total
Relative breakdown by currency, in %
Total
EUR
Total (in EUR)
22,112,833
22,112,833
2,488
2,488
22,115,321
22,115,321
100.00
100.00
EUR
Total (in EUR)
27,249,596
27,249,596
2,488
2,488
27,252,084
27,252,084
100.00
100
4
Financial liabilities – Žito d.d.
Long-term
In EUR
Current
Total
31 Dec 2013
31 Dec 2012
31 Dec 2013
31 Dec 2012
31 Dec 2013
31 Dec 2012
2,158,333
8,898,333
19,954,500
18,351,263
22,112,833
27,249,596
0
0
1,420,991
1,867,759
1,420,991
1,867,759
0
0
2,488
2,488
2,488
2,488
2,158,333
8,898,333
21,377,979
20,221,510
23,536,313
29,119,843
Financial
liabilities to
banks
Financial
liabilities to
undertakings in
the group
Other financial
liabilities
Total
Loan maturities – Žito d.d.
In EUR
31 Dec 2013
31 Dec 2012
Up to 1 year
21,377,979
20,221,510
1 to 2 years
740,000
7,480,000
2 to 5 years
1,418,333
1,418,333
Total
23,536,313
29,119,843
Loan currencies – Žito d.d.
Financial liabilities to undertakings in the group
Total
EUR
Total (in EUR)
22,112,833
22,112,833
1,420,991
1,420,991
2,488
2,488
23,536,313
23,536,313
100.00
100.00
4
Financial liabilities to undertakings in the group
Total
The loans have been secured with blank bills of exchange and
mortgages on the company's real estate. The mortgage insu-
EUR
Total (in EUR)
27,249,596
27,249,596
1,867,759
1,867,759
2,488
2,488
29,119,843
29,119,843
100.00
100
rance on received loans is disclosed under fixed assets (section
23.17).
23.29 Short-term operating liabilities
Operating liabilities – Žito Group
In EUR
Current trade payables to domestic suppliers
Current trade payables to foreign suppliers
Short-term operating advance payables
31 Dec 2013
31 Dec 2012
10,442,986
9,698,021
3,771,765
3,464,997
73,610
719,145
Other short-term operating liabilities
3,046,612
2,872,075
Total
17,334,973
16,754,238
31 Dec 2013
31 Dec 2012
Current trade payables to suppliers in the group
3,090,763
1,865,640
Current trade payables to domestic suppliers
9,277,883
8,781,294
Current trade payables to foreign suppliers
3,196,233
2,964,205
43,439
94,044
Other short-term operating liabilities
2,391,603
2,266,083
Total
17,999,921
15,971,266
Operating liabilities – Žito d.d.
In EUR
Short-term operating advance payables
4
23.30 Accrued costs and deferred revenues
Accrued costs and deferred revenues – Žito Group
In EUR
31 Dec 2013
31 Dec 2012
2,596,674
1,451,731
29,482
20,717
2,626,156
1,472,448
31 Dec 2013
31 Dec 2012
2,407,584
1,329,497
29,482
20,717
2,437,065
1,350,214
31 Dec 2013
31 Dec 2012
Commodities reserves
4,739,872
4,381,213
Foreign fixed assets
1,221,183
1,221,183
Mortgages
8,898,333
14,100,596
Claims
3,143,983
3,143,983
TOTAL
18,003,372
22,846,975
Accrued costs
Short-term deferred revenues
Total
Accrued costs and deferred revenues – Žito d.d.
In EUR
Accrued costs
Short-term deferred revenues
Total
23.30 Legal disputes and other potential obligations
Žito Group
In EUR
4
Žito d.d.
In EUR
31 Dec 2013
31 Dec 2012
Commodities reserves
4,739,872
4,381,213
Foreign fixed assets
1,221,183
1,221,183
Mortgages
8,898,333
14,100,596
Claims
3,143,983
3,143,983
TOTAL
18,003,372
22,846,975
None of the arising liabilities fulfil the conditions for recognition under balance sheet items; therefore, Žito d. d. and the Žito Group
do not expect any material consequences.
Claims
Operational leasing
Provisions for contingent claims (or short-term accruals and
deferrals under this heading) are formed on the basis of an
assessment of their probable occurrence and following consultation with law professionals. The maturity dates of the liabilities
cannot be determined.
The costs of leasing for Žito d.d. were EUR 1,390,063 in 2013,
and for the Žito Group EUR 1,080,492. Planned costs for 2014 are
assessed to be identical to that of 2013, assuming that the contractual values do not change. Lease contracts are concluded for
indefinite periods and cover the leasing of work clothing, business spaces and fixed assets.
The total amount of claims against companies in the Žito Group
is EUR 2,955 thousand.
The total amount of claims against Žito d.d. is EUR 2,955 thousand.
The Management Board of Žito d.d., on the basis of legal opinions, has assessed that EUR 1,680 thousand in provisions for claims (shown under short-term accruals and deferrals, state as at
31 Dec 2012 – EUR 1,270 thousand) will be formed.
4
23.32 Related party transactions
Compensation of the Management Board, Supervisory Board and employees on individual contracts
In EUR
2013
2012
604,125
486,596
Total compensation of employees on individual contracts
1,934,183
1,859,438
Total compensation of members of the Supervisory Board
81,400
86,421
Total compensation of members of the Management Board
Total
compensation
of members
of the
Management
Board
Fixed earnings
Reimbursement of costs
Benefits
Other
Awards
Total
Janez Bojc
167,687
2,067
0
909
25,327
195,991
Erik Žunič
112,200
163
2,863
909
19,956
136,091
Sandi Svoljšak
111,599
74
2,299
909
19,956
134,837
Rajačič Peter
112,200
532
3,610
909
19,956
137,207
Total compensation of members of the Supervisory Board
Meeting fees in EUR
Tomi Rumf
17,723
Adrijan Rožič
12,557
Maja Makovec Brenčič
13,530
Kneževič Milan
12,530
Zenon Marn
12,530
Suzana Šimenc
12,530
Total
81,400
4
Management Board equity stakes
Management Board equity stakes
Number of shares
Ownership share
Janez Bojc
8,785
2.47%
Erik Žunič
4,599
1.29%
Sandi Svoljšak
2,811
0.79%
Peter Rajačič
1,588
0.45%
The stated shares owned by Janez Bojc also include the number of Žito d.d.'s shares in Jacobo d.o.o., which is fully owned by Janez Bojc.
The company did not grant loans to members of the Management Board.
Žito d.d. transactions with Group entities
Interest on loans to controlled companies
2013
2012
0
0
TRANSACTIONS IN THE PERIOD, IN EUR
Žito Šumi d.o.o., Ljubljana
0
0
101,609
118,169
46,310
52,868
147,919
171,037
2013
2012
14,752
25,579
94
119
Total
Interest on loans from controlled companies
Total
3,289
3,833
18,136
29,531
4
Interest on current trade receivables from controlled companies
2013
2012
33,308
24,522
8,657
3,591
Total
41,965
28,113
Interest on current trade receivables due to controlled companies
2013
2012
24
8
20
260
2,298
1,420
Total
2,342
1,688
Revenue from the sale of products and merchandise to controlled companies
2013
2012
575,106
628,262
3,314,326
483,414
389,506
3,612,387
4,517,693
4,485,307
2013
2012
311,510
362,683
240,531
219,288
475,824
477,361
12,000
12,000
1,039,866
1,071,331
Total
Revenue for services rendered to controlled companies
Total
4
Expenses for services rendered by controlled companies
2013
2012
2,782,954
2,845,333
5,250
30,720
10,353
15,177
568,293
32,000
3,366,850
2,923,230
2013
2012
901,661
599,982
293
0
5,495,374
5,770,540
6,397,328
6,370,522
2013
2012
406,974
313,611
1,917,843
1,917,843
Žito Beograd d.o.o., Beograd
100,153
100,153
Žito maloprodaja d.o.o, Ljubljana
587,232
550,794
1,660,846
2,084,731
700,434
202,507
5,373,482
5,169,639
2013
2012
1,917,843
1,917,843
Total
Cost of products and materials sold to the controlling company
Total
Outstanding operating receivables of the controlling company
BALANCE AS AT 31 DEC In EUR
Total
Adjustments to the receivables of the controlling company
4
Žito Beograd d.o.o., Belgrade
100,153
100,153
2,017,996
2,017,996
2013
2012
1,778,280
1,109,984
813,676
509,846
371,414
239,392
123,522
3,200
3,086,892
1,862,423
2013
2012
2,279,247
2,322,562
4,360,282
4,003,591
6,639,529
6,326,154
2013
2012
1,125,290
1,570,179
290,020
290,260
8,024
9,008
1,423,333
1,869,447
2013
2012
0
300
Total
0
300
Total
Outstanding operating liabilities of the non-controlling company
BALANCE AS AT 31 DEC V EUR
Total
Loans granted by the controlling company
Total
Loans received by the controlling company (including interest)
Žito nepremičnine d.o.o, Ljubljana
Total
Sale and transfer of fixed assets to the controlling company
4
23.33 Risk management policies and objectives
Financial risk management policies and objectives
Rapid changes in the environment mean that the system for
managing financial risks has become one of the most important
factors in success. The timely recognition of risks that could lead
to the impairment of assets or deterioration in the financial position and market position of Žito d. d. is thus of key importance. In
order to make its financial operations more efficient, in 2004 the
Group began consolidating financial operations in the areas of
financing, relationships with banks, insurance, and receivables
management. The Žito Group constantly strives to maintain stable operations, and to reduce individual risks to an acceptable
level.
The primary financial instruments recognised in the financial
statements of the Company and the Group comprise cash and
cash equivalents, operating receivables and other receivables,
trade payables and other operating liabilities, financial invest-
ments, and borrowings. The basic purpose of borrowing is
to acquire the requisite financial assets for the operations of the
company and the Group.
In line with the adopted policy, the company and the Group did
not trade derivatives in the 2013 and 2012 financial years. The
Group and company likewise do not use financial instruments to
hedge against fluctuations in raw material prices.
The most significant types of risk associated with the financial
instruments of the company and the Group are interest-rate risk,
liquidity risk, currency risk and credit risk. The senior management regularly reviews and approves the policies for controlling
the individual types of risk described below.
RISK MANAGEMENT
At the company and the Group we are aware that, in order to
maintain continuity of operations, a business must always have
sufficient equity at its disposal, as this provides a safety cushion
for unforeseen changes in the value of assets and debts.
Both the company and the Group monitor changes in equity by
using a financial leverage indicator calculated as the ratio of net
liabilities to the sum of total liabilities and total equity. For the
company and the Group, net liabilities comprise borrowings,
trade payables and other liabilities, minus the amount of cash.
4
Žito Group
In EUR
31 Dec 2013
31 Dec 2012
Borrowings and loans
22,116,762
27,252,084
Trade payables and other liabilities
19,961,129
18,226,686
Minus cash and short-term deposits
5,371,367
1,318,614
Net liabilities
36,706,524
44,160,156
Equity
70,222,776
69,151,746
Equity and net liabilities
106,929,300
113,311,902
34%
39%
In EUR
31.12.2013
31.12.2012
Borrowings and loans
23,536,313
29,119,843
Trade payables and other liabilities
20,436,986
17,321,479
Minus cash and short-term deposits
4,522,766
915,243
Net liabilities
39,450,532
45,526,079
Equity
73,958,279
71,506,944
Equity and net liabilities
113,408,810
117,033,023
35%
39%
Financial leverage indicator
Žito d.d.
Financial leverage indicator
Žito d.d. and the Žito Group also have the following insurance
policies:
•
fire insurance,
•
theft insurance,
•
general liability insurance,
•
manufacturer liability insurance,
•
insurance against damage to assets and inventories,
•
vehicle insurance and
•
insurance claims.
4
MARKET RISK (INTEREST AND CURRENCY RISK)
Interest-rate risk is the risk of an adverse impact on the performance of the company and the Group from a change in market interest rates. The interest rate structures of balance-sheet
asset and liability items are not matched, as the Žito Group holds
more borrowings than interest-bearing investments. In the case
of borrowings, the Group’s exposure to interest-rate risk is represented by an adverse movement (rise) in the Euribor.
The Group estimates that the risk of a change in interest rates for
Žito d. d. is moderate. The Management Board maintains regular
contact with financial institutions, and monitors developments
in international financial markets, thereby monitoring the expected movement of interest rates, exchange rates and ratios.
Increase/decrease in basic interest rate points
2013
2012
Euribor
50
113.989
94.661
Euribor
-50
-113.989
-94.661
LIQUIDITY RISK
Liquidity risk is the risk associated with a shortage of available
financial resources and the consequent inability on the part of
the Group to settle its liabilities by the agreed deadlines. The
Group assesses its risk of inability to pay as low, thanks to its
effective cash management and good access to the requisite
financial resources. The Group plans for and monitors liquidity
on a daily, monthly and annual basis. Among the most important measures for ensuring good liquidity are the maintenance
of a sound financial structure and the prudent management of
receivables and liabilities, and the creation of appropriate liquidity reserves. The Company and the Group manage liquidity risk
by monitoring liquid assets and liabilities, and the cash flow from
operating activities. A short-term deficit is addressed by raising
short-term loans at domestic banks, while short-term surpluses
are placed in bank deposits. Moreover, a large portion of client
payments are relatively predictable and stable.
4
Maturity breakdown of the Žito Group’s financial liabilities on 31 Dec 2013 and 31 Dec 2012 based on
undiscounted contractual payments
On demand
Up to 3
months
3 to 12 months
1 to 5 years
Over 5 years
Total (in EUR)
Loans and borrowing
0
6,463,742
14,082,809
2,200,313
0
22,746,864
Other financial and operating liabilities
0
3,120,222
Trade payables
0
14,214,751
Total
0
23,798,715
14,082,809
2,201,753
0
40,083,277
On demand
Up to 3
months
3 to 12 months
1 to 5 years
Over 5 years
Total (in EUR)
Loans and borrowing
0
9,136,898
9,805,389
9,556,810
0
28,499,097
0
3,591,220
0
1,440
0
3,592,660
Trade payables
0
13,163,018
0
0
0
13,163,018
Total
0
25,680,337
9,427,652
8,899,773
0
45,254,775
Year 2013
Year 2012
1,440
3,121,662
14,214,751
Maturity breakdown of Žito d.d.’s liabilities on 31 Dec 2013 and 31 Dec 2012 based on undiscounted contractual
payments
On demand
Up to 3
months
3 to 12 months
1 to 5 years
Loans and borrowing
0
7,898,553
14,082,809
0
2,435,042
Trade payables
0
15,564,879
Total
0
25,898,473
14,082,809
2,201,753
1,440
42,184,475
On demand
Up to 3
months
3 to 12 months
1 to 5 years
Over 5 years
Total (in EUR)
Loans and borrowing
0
11,013,295
9,805,389
9,556,810
0
30,375,494
0
2,360,127
0
1,440
0
2,361,567
Trade payables
0
13,611,139
0
0
0
13,611,139
Total
0
26,984,561
9,805,389
9,558,250
0
46,348,200
Year 2013
Year 2012
Over 5 years
Total (in EUR)
2,200,313
0
24,181,674
1,440
1,440
2,437,922
15,564,879
4
CREDIT RISK
Credit risk relates to a default in mutual obligations by business
partners, and is greatest in transactions with foreign business
partners. The Group mitigates this risk by signing annual contracts with its largest customers containing elements for securing
receivables, and by reducing the level of receivables using chain
and monthly compensation. It also mitigates risks through regular contact with business partners, and by reviewing their credit
ratings and limiting exposure to individual business partners
when necessary.
In the domestic market, the Group also monitors all actual trade
receivables and regularly monitors their age structure, and if
required, also actively negotiates regarding the settlement of
matured receivables. The Group especially monitors actual receivables from SMEs, where the risk of default is higher than for
major customers.
In foreign markets, the markets of SE Europe in particular, the Žito
Group is highly exposed to credit risk. Its receivables from customers in this export region are secured with bank guarantees, or are
subject to a limit. Where possible, agreements are also reached for
payment in advance. A portion of the receivables are insured. The
company and the Group assess credit risk as manageable, since
the receivables management procedures are well-established.
Thanks to regular reviews of due receivables, the exposure of the
company and the Group to credit risk is low.
In relation to other financial assets, such as cash, bank deposits
and available-for-sale financial assets, the exposure of the company and the Group to credit risk comes primarily from the risk of
default by the other party to the contract, the maximum exposure
being the book value of the financial instruments in question.
23.34 Fair value of financial instruments
The majority of investments classified in the group for sale are disclosed at their original values in the financial statements, except for
investments in the shares of Zavarovalnica Triglav, which are shown
at their fair value; receivables and loans are shown based on their
paid values. Market values are used to calculate the fair value of available-for-sale financial assets.
The Group assesses that no significant differences exist between
the fair values and book values of financial instruments that are not
shown at their fair value.
Given that the majority of receivables, liabilities and loans are short
term, the fair value of these financial instruments does not differ
significantly from the book value.
The fair value of cash, current assets and borrowings is calculated on
the basis of the discounting of expected future cash flow to market
prices.
4
Fair value hierarchy
The following hierarchy was applied when recognising and
disclosing the fair value of financial instruments through a valuation technique:
3. Category: other techniques for determining fair value on the
basis of assumptions with a significant impact on fair value
that are directly or indirectly in line with currently observable market transactions with the same instrument.
1. Category: determination of fair value on the basis of a quoted price on an active market,
2. Category: other techniques for determining fair value on the
basis of assumptions with a significant impact on fair value
that are directly or indirectly in line with currently observable market transactions with the same instrument,
Assets measured at fair value, in EUR
Available-for-sale financial assets
Equity securities
1. Category
2. Category
3. Category
31 Dec 2013
783,332
0
0
31 Dec 2012
680,262
0
0
23.35 Events following the balance sheet date
No other events after the balance sheet date 31 December 2013
occurred that could have a material impact on the company's
financial statements or that would require disclosure in the
Notes to the financial statements.
4
24 AUDITOR'S REPORT
4
4
25 ADRESSES
Žito, d. d., prehrambena industrija
Management:
Šmartinska cesta 154
1529 Ljubljana
Slovenija
Telephone: (01) 5876 100
Fax: (01) 5404 175
President of the Management Board:
Janez Bojc
telefon: (01) 5876 240
e-mail: [email protected]
Member of the Management Board responsible for marketing
and logistics:
Web page: www.zito.si
Peter Rajačič
telefon: (01) 5876 249
Member of the Management Board responsible for accounting,
finance and IT:
Erik Žunič
telefon: (01) 5876 240
Member of the Management Board responsible for production
and technical matters:
Sandi Svoljšak
telefon: (01) 5876 240
4
Directors and heads of departments:
Sales (Slovenia):
Finance, Accounting and Controlling:
Dominik Grbec
Brigita Hočevar Krejan
Telephone: (01) 5876 133
Telephone: (01) 5876 195
E-mail: [email protected]
Export Sales:
Information Technology:
Karmen Pangos
Matjaž Kurent
Telephone: (01) 5876 179
Telephone: (01) 5876 119
Marketing:
Development:
Marja Feldin
Mateja Modic
Telephone: (01) 5876 125
Telephone: (01) 5876 190
Procurement:
Quality System:
Marta Zrimšek
Jelka Podbevšek Rozman
Telephone: (01) 5876 180
Telephone: (01) 5876 143
Legal and General Affairs:
Logistics:
Zdravko Sančanin
Gregor Bižal
Telephone: (01) 5876 296
Telephone: (01) 5876 104
E-mail [email protected]
E-mail [email protected]
4
Profit Centres
PC Intes
PC Pekarna Vrhnika
PC Žito Gorenjka
Meljska cesta 19
Idrijska 21
Rožna dolina 8
2000 Maribor
1360 Vrhnika
4248 Lesce
Telephone: (02) 2506 953
Telephone: (01) 7558 910
Telephone: (04) 5353 200
Fax: (02) 2506 941
Fax: (01) 7553 851
Fax (04) 5353 272
PC Dolenjske pekarne
PC Kruh pecivo
Ločna 2
Jožice Flander 2
PC Gradišče
8000 Novo mesto
2000 Maribor
Gradišče pri Materiji 51
Telephone: (07) 3930 742
Telephone: (02) 4503 200
6243 Obrov
Fax: (07) 3930 775
Fax: (02) 4503 203
Telephone: (05) 6890 400
Fax: (05) 6890 430
Retail Sales
Šumi nepremičnine, d. o. o.
Šmartinska 154
Jožice Flander 2
Šmartinska 154
Šmartinska 154
1000 Ljubljana
2000 Maribor
1000 Ljubljana
1000 Ljubljana
Telephone: (01) 5876 100
Telephone: (01) 5876 100
Telephone: (01) 5876 100
Telephone: (01) 5876 100
Fax: (01) 5404 175
Fax: (01) 5404 175
Fax: (01) 5404 175
Fax: (01) 5404 175

2013 Annual Report

Transcription

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