Big Bang, d.o.o., Ljubljana

Transcription

Annual Report
2011
Big Bang, d.o.o., Ljubljana
2
[Index]
Introduction
6
7
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9
REPORT OF THE MANAGING DIRECTOR
COMPANY MANAGEMENT PROFILE
KEY PERFORMANCE INDICATORS
REVIEW OF MAJOR EVENTS
Business Report
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12
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STRATEGIC FOCUS IN YEAR 2012
Mission
Vision
Key development goals
SALES PROGRAMME AND SERVICES
Product groups
Stores
Sales markets
ECONOMIC CONDITIONS IN 2011
BUSINESS ANALYSIS IN 2011
Sales
Operating expenses
Financial income and expenses
Profit or loss
Assets
Equity and liabilities
PLANS FOR THE FUTURE
EMPLOYEES
Trend of the Number of Employees
The structure of employees at
31 December 2011
Human Resources Strategy
Education of Employees
Health Care and Well-Being
of Our Employees
Remuneration of Employees
Big Bang and Young People
Research and Looking into the Future
26
26
28
28
29
31
RISK MANAGEMENT
Financial Risk Management
Insolvency Risk
Purchasing Risks
Other Risks
STATEMENT IN ACCORDANCE WITH
ARTICLE 545 OF THE COMPANIES ACT
(ZGD-1)
Go to
Introduction
Financial Report
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78
AUDITED FINANCIAL STATEMENTS
Balance sheet
Income Statement
Statement of comprehensive income
Cash flow statement
Statement of changes in equity
Proposal for the appropriation of profit
NOTES TO THE AUDITED FINANCIAL
STATEMENTS
1. The Reporting Company
2. Basis for Compilation
3. Significant Accounting Policies
4. Financial Risk Management
5. Notes and Disclosures to the
Balance Sheet
6. Notes and Disclosures to the
Income Statement
7. Other Notes
8. Significant Business Events after the
Balance Sheet Date
STATEMENT BY THE MANAGEMENT
INDEPENDENT AUDITOR’S REPORT
Go to
Business Report
Go to
Financial Report
PRESENTATION OF THE COMPANY WITH
ITS SUBSIDIARY
3
4
Introduction
5
6
[Introduction]
REPORT OF THE MANAGING
DIRECTOR
services. We offer our customers products and
services at competitive prices, with high quality
advice and a good shopping experience.
The
negative
economic situation
continued
in
2011; in fact, it
grew harsher and
presented difficult
challenges to the
majority of Slovenian
companies. Big Bang
was no exception
and although it
operates locally, it
is also exposed to global factors. There were
two natural disasters – the earthquake in Japan
and the floods in Thailand – that hampered the
uninterrupted supply of products, whereas the
acquisition prices of products were marked
by conditions in the financial markets and the
decline of the euro. The diminishing economic
situation in Slovenia has also undoubtedly
caused changes in consumer habits and a
substantial decrease of all markets in which
Big Bang operates. In the first half of the year,
we were also faced with problems securing
insurance and collecting open claims due to
the difficult situation in Merkur, as the banks
and insurance companies closely followed
the development of the financial structural
adjustment up until the adopted compulsory
settlement.
In addition to ensuring client satisfaction,
another important part is our internal
environment and process management, where
we are constantly striving for improvements. In
2011, we founded the Sales Academy with which
we ensure the regular and frequent training of
our sales personnel. We have continued with
the implementation of category management,
with which we plan to improve our profitability.
The entire Company is working together and
thinking of ways to achieve our goals and by
directing ourselves towards the goal we are
closing the gaps between the current state and
the desired goal.
How are we to implement our vision and
mission in such a demanding environment and
with so many changes taking place? Big Bang
has remained the only specialist retailer for
consumer electronics in the Slovenian market
and has a responsibility and a promise to its loyal
customers to continue to bring innovations and
satisfaction when using various products and
Certainly, we are aware of the fact that another
difficult year is ahead for Big Bang, but we
have many projects planned, which will ensure
our on-going existence and future Company
growth.
The year 2011 placed new challenges in front
of us. We achieved a lot and can feel good
about it. Especially significant is the growth of
quantity in most categories. Unfortunately, we
have not achieved the desired results in sales
value: this is the mission we plan to achieve this
year. We believe we can do it, as Big Bang has a
great deal of knowledge, experience and ideas,
with which we can fulfil our promise to our
customers to always offer something new. In the
past, Big Bang faced many stressful situations
and crises, both internal and external, but
because of us, the employees, who have found
the energy, determination and persistence, Big
Bang always came out as a winner.
Big Bang is always ready for something new.
Aleš Ponikvar
[Introduction]
COMPANY MANAGEMENT PROFILE
Management of Big Bang, d. o. o.
Breda Terglav,
Matija Savnik,
Patrick Vesel,
Sonja Mesar,
Purchasing Manager
Marketing Manager
Logistics Manager
Mateja Štimec,
Samo Turk,
Retail Manager
Financial Manager
(until 31.10.2011)
CFO
(from 1.11.2011 onwards)
Matija Torlak,
Rudolf Hornek,
Product Manager
Product Manager
(until 31.10.2011)
Managing Director & CEO,
Head of Division (until 31.10.2011)
Zoran Memon,
Katja Katarina Zakrajšek,
HR Manager
Andrej Vidmar,
Jure Vidmar,
Organisation and IT Manager
Wholesale Manager
Big Bang, d. o. o. Beograd
Grgor Drozg,
Aleksandra Memon,
Director
(until 31.5.2011)
Director
7
8
[Introduction]
KEY PERFORMANCE INDICATORS
REVIEW OF MAJOR EVENTS
In thousands of euros
Postavka
2008
2009
2010
2011
Budget 2012
146,663
130,686
121,825
114,892
128,512
28,350
24,653
27,657
25,352
27,733
EBIT
2,020
2,064
4,432
2,254
2,602
EBITDA
3,773
4,056
6,420
4,288
4,799
Net earnings
1,787
1,695
-6,009
1,062
1,252
Balance sheet total at 31 December
48,116
46,033
42,031
40,609
42,108
Equity at 31 December
15,831
17,525
7,517
8,579
9,785
13.9
13.9
11.35
8.48
15.55
1.2
1.3
0.92
0.97
821
1,783
1,066
1,083
565
434
449
447
Net sales
Gross earnings
ROE (in %)
Net return on sales (in %)
1.2
Investments in fixed and intangible assets
Kosmati
poslovni
izid in poslovni izid iz poslovanja z
Employees
at 31
December
amortizacijo (EBITDA)
Prihodki iz prodaje in prihodki iz prodaje na zaposlenega
4,684
564
Earnings before interest, depreciation
and amortisation (EBITDA)
Sales revenue and sales revenue per employee
160.000
160,000
20.000
20,000
15.000
15,000
10,000
10.000
25.000
25,000
v tisoč EUR
v tisoč EUR
In
thousands of euros
30.000
30,000
2008
2008
100.000
100,000
80.000
80,000
60.000
60,000
EBITDA
Gross earnings
0
2009
2009
2010
2010
2011
2011
2008
2008
Budget
Načrt
2012
2012
In spite of initially fairly optimistic expectations
Kosmati poslovni izid
EBITDA
and forecasts of economic recovery, the
year 2011 was marked by extremely difficult
economic circumstances. Low economic activity,
numerous bankruptcies of companies, uncertain
circumstances in the labour market, unstable
political conditions, etc. affected the shopping
behaviour of consumers, who (according to
business trend data) remain pessimistic with
New store
In April, we opened a new store in the Qlandia
shopping mall in Krško.
Moving of stores
In March, the store in Novo Mesto was relocated
to the new Qlandia shopping mall. The store in
the Ušće shopping mall in Belgrade was moved
to a more attractive location in the mall, and its
layout was optimized.
In spring, in cooperation with an outside
consultant, we designed the Sales Academy,
which included all of our sales personnel.
The Academy is intended to improve the
understanding and knowledge of consumers
and the shopping process with concrete
examples and sales suggestions, with the aim
of helping sales personnel in establishing
contact with a buyer and offering the buyer
professional advice when shopping.
120.000
120,000
20.000
20,000
0
In 2011, Big Bang also saw many interesting
events, some of which were particularly
significant.
Sales academy
140.000
140,000
40,000
40.000
5.000
5,000
[Introduction]
2009
2009
2010
2010
2011
2011
Budget
Načrt
2012
2012
regard to larger purchases in the future. The result
of the abovementioned
is a 2011
smaller
of sales:
2008
2009
2010
Načrtscope
2012
the income from sales compared to the previous
year was lower by 6%, while gross profit declined
by 8%. In spite of difficult conditions on the market
and problems of the parent company, which also
affected our operations and results, we managed
to achieve both operating profit and net profit in
2011.
Midnight opening
We delighted the fans of the game Call of Duty:
Modern Warfare 3 on its official release date at
the beginning of November with a midnight
opening of one of our stores in BTC Ljubljana,
where they could be among the first to obtain
a copy of the game. The possibility of this early
purchase attracted an extremely large number
of players.
Siddharta
The group Siddharta issued their new album
late November and recorded a video in 3D. In
Big Bang we gave the visitors special 3D glasses
to see the premiere of the video on RTV SLO.
All the fans of Siddharta had the chance to
meet the band members, as they were signing
albums in seven of our stores.
The BEKO and SONY showrooms
In our store in BTC Ljubljana we designed special
showrooms – in the household appliances
department, we presented Beko’s Smart
Solutions, Green Line and New Technology
lines, while in the audio-video department, the
Sony living room presents the visitors solutions
on how to combine various audio-video
devices and what is a must-have in a modern
living room.
Change of management
In the beginning of November, Aleš Ponikvar,
the former Commerce Director , took over the
management of the Company, replacing the
incumbent Managing Director, Breda Terglav,
and Samo Turk, the new CFO , joined the
management of Big Bang.
Exceptional success of the trademark
BEKO
Thanks to Big Bang, Beko’s exclusive distributer
in Slovenia, their entire product range is growing
in presence on the market. In the previous three
years, sales of Beko products have increased, so
that today Beko is an established trademark,
one which the consumers trust, as proven by
its significant market shares of four categories
– refrigerators, freezers, washing machines and
driers.
9
10
Business
Report
11
[Business Report]
STRATEGIC FOCUS IN YEAR 2012
12
Fierce economic circumstances, which
we began to encounter in 2010, were
felt even more intensely in the previous
year. Consumers expanded their savings
measures and postponed purchases to
a greater extent, which was reflected in
the sales of most products of consumer
electronics and household appliances. It is
certain that in 2012 consumers will consider
only the most necessary expenses.
Therefore, we will have to adapt our
extensive development plans to market
conditions and focus on in-house process
optimization and on increasing cost
efficiency. Profit-yielding operations and
positive cash flow will remain our key goals
in 2012.
In 2012, a good understanding of
consumers and their desires will be of
key importance in defining appropriate
promotions and ensuring the satisfaction
of our customers. In this way, we will place
special attention to the understanding
of the shopping process and helping
customers find the products that they
desire and need, and that bring them
satisfaction when used. In cooperation
with our quality trademark products
manufacturers, we wish to offer the
Slovenian market products that will help
consumers enrich their lifestyle. We want
to present our consumers with the trend
of increasing interoperability of products,
where the limits of unilateral applicability
are blurred, and to inform them of the
advantages that using such consumer
products bring to their daily lives.
[Business Report]
SALES PROGRAMME AND SERVICES
Mission
Creating long-term satisfaction of the
consumer, inspiring and enriching new
lifestyles appearing on the market, and in
this way becoming a strong partner to the
leading trademarks and manufacturers.
Vision
In the area of business of consumer
electronics, we will become the first choice
in the market by offering the consumer a
quality shopping experience and all kinds of
services.
Key development goals
Being a provider of quality technological
products in the areas of home, work and
entertainment, we pursue the next goals:
•Be the buyers’ first choice.
•Reach sustainable profit yield and positive
cash flow.
•Be an exemplary and respected employer
who takes care of its employees’
development.
•Strengthen our position in Slovenia and the
region (SE Europe, frontier markets).
•Expand and strengthen the development
and regional partnerships (be the partners’
first choice).
•Implement, target and carefully select
investments for a satisfied customer,
primarily in accordance with the achieved
cash flow.
The products that are available in the sixteen
Big Bang stores and the bigbang.si online
centre help consumers increase the quality
of their work, make their leisure time more
entertaining and their chores faster and more
efficient. Even though such products are not
subsistence goods, the development of new
technologies ensures increasing functionality
and increasingly better experiences.
Being a specialist for consumer electronics,
IT, and large and small household appliances,
we provide the latest technology of famous
trademarks to our customers. Care for quality
and rich selection, and the provision of a high
level of after-sales services have helped us
create the well-known Big Bang trademark.
Our state-of-the-art and well-equipped stores
enable buyers to consult with sales staff who are
regularly informed on any relevant information
or developments. Furthermore, buyers can also
test most products, helping them to make the
right decision.
Besides our basic activity (sales in our shop
locations), an important part of our operations
is also sales through the bigbang.si online
centre, which has been facing quite active
competition on the web. Furthermore, Big
Bang is also engaged in wholesale trading and
sales on foreign markets.
Product groups
TVs and TV
equipment
Mobile
electronics
Computers and
computer equipment
Cameras and
photo equipment
Recorded media
Music instruments
Game consoles
and games
Telecommunications
Large household
appliances
Small household
appliances
13
[Business Report]
ECONOMIC CONDITIONS IN 2011
Stores
A list of stores in Slovenia and Serbia:
Naslov
BIG BANG CITYPARK
ŠMARTINSKA CESTA 152g, 1000 LJUBLJANA
BIG BANG BTC
ŠMARTINSKA CESTA 152, 1000 LJUBLJANA
BIG BANG RUDNIK
JURČKOVA CESTA 228, 1000 LJUBLJANA
BIG BANG MARIBOR - TRŽAŠKA
TRŽAŠKA CESTA 7, 2000 MARIBOR
BIG BANG MARIBOR - EUROPARK
POBREŠKA CESTA 18, 2000 MARIBOR
BIG BANG MARIBOR - TABOR
CESTA PROLETARSKIH BRIGAD 100, 2000 MARIBOR
BIG BANG CELJE
MARIBORSKA CESTA 100, 3000 CELJE
BIG BANG KOPER
ANKARANSKA CESTA 3a, 6000 KOPER
BIG BANG KRANJ
CESTA STANETA ŽAGARJA 71, 4000 KRANJ
BIG BANG NOVO MESTO
OTOŠKA 5, 8000 NOVO MESTO
BIG BANG MURSKA SOBOTA
BTC – NEMČAVCI 1d, 9000 MURSKA SOBOTA
BIG BANG JESENICE
FUŽINSKA CESTA 8, 4270 JESENICE
BIG BANG PTUJ
ORMOŠKA CESTA 15, 2250 PTUJ
BIG BANG SLOVENSKA BISTRICA
ŽOLGARJEVA ULICA 14, 2310 SLOVENSKA BISTRICA
BIG BANG NOVA GORICA
CESTA 25. JUNIJA 1a, 5000 NOVA GORICA
BIG BANG KRŠKO
CESTA KRŠKIH ŽRTEV 141, 8270 KRŠKO
ONLINE CENTRE:
BIGBANG.SI
ŠMARTINSKA CESTA 152, 1000 LJUBLJANA
STORE IN SEBIJA:
UŠĆE
PARTIZANSKE AVIJACIJE 4, 11070 BEOGRAD
Sales markets
14
[Business Report]
Big Bang’s most important market is Slovenia,
representing 90.3% of the Company’s total sales.
This is followed by EU markets representing
9.2% of its total sales, and other markets (0.5%).
Slovenia
EU countries
Other foreign markets
Ostali tuji trgi
Države EU
Below one percent growth of gross domestic
product, a higher level of unemployment
at the end of the year in comparison to the
previous year (increase by 2.5% to 112,754),
the lowest level of year-end bonuses paid
in the last six years (IMAD) and a drop in real
income in retail stores (except for fuels) at the
end of the year by 5.5% compared to the year
before (SORS) are merely some of the more
important macroeconomic indicators, which
show 2011 to be as demanding and severe as
the previous year. This was seen throughout the
year in subjective consumer mood indicators,
measured by the DMS marketing monitor, which
have mainly continued and in certain cases
even experienced lower values than in the year
before. Therefore, the spring recession surveys
in 2011 from the viewpoint of consumers were
higher by 5% compared to the autumn survey
from 2010, thus reaching 73%. Similarly, the
level of the fall survey in 2011 was achieved,
which amounted to 72%. At the same time in
2011, there was a strengthening of the level of
negative expectations; increasing numbers of
people experienced the problem of reduced
purchasing power as a consequence of the
recession, so that the purchases of consumers
became even more planned and careful than
the year before. The fall survey in 2011 showed
the highest level of planned and deliberate
shopping so far, 70% of the surveyed, which is
3% more than compared to the year before and
10% more than in the first year of the survey, i.e.
in the spring of 2009. The prudent and reserved
shopping style – also as a consequence of a lack
of visible technological progress and extreme
external events – is consequently also mirrored
in the market of consumer and household
electronics. Specifically, compared to the
previous year in most sales categories, the trend
of reduction continued both in the quantity of
sales as in average sales value (GFK panel of
technical stores). Encouraging levels of growth
were only achieved in the category of tablet
computers. Nevertheless, it is still encouraging
that the value of the consumer trust indicator
(SORS) in December 2011 improved both in
comparison to the previous month (by 6%),
as well as compared to the year before (by
7%), which was greatly supported by more
optimistic forecasts of consumers regarding
the possibility for savings in the future.
Slovenija
15
[Business Report]
[Business Report]
BUSINESS ANALYSIS IN 2011
Operating expenses
In 2011, the activity of Big Bang was also
marked by harsh economic conditions and
problems of the parent company. Nevertheless,
with great financial discipline, by following our
key goals and key development goals, striving
towards our vision and following our mission,
we successfully concluded the business year.
90
90
Sales per employee
260
150
150
100
100
50
50
0
2007
2007
146,663
140.000
140,000
130,640
120,361
120.000
120,000
121,825
256
216
200
200
PRIHODKI
OD PRODAJE
Sales revenue
160.000
160,000
280
2008
2008
2009
2009
2010
2010
share in sales in %
301
300
300
250
250
80
80
delež v prodaji v %
v tisoč EUR
350
350
tisoč EUR of euros
In vthousands
100
100
PRODAJA NA ZAPOSLENEGA
Sales
70
70
60
60
50
50
78.8
80.7
Cost of sales
81.1
40
40
2011
2011
60.000
60,000
20
20
10
10
2007
2007
2008
2008
2009
2009
20,000
20.000
0
2010
2010
2011
2011
In 2010, we had witnessed a drop in sales
income; similarly in 2011, it dropped by 6%.
The income from retail sales was lower, in
comparison to the previous year by 12%, while
we achieved 24% growth in wholesale.
2010
2010
The average sales growth rate per employee
amounted to 5% in the last five years. The
absolute sales value per employee dropped by
8.5% compared to the previous year. The drop
is above all a reflection of the smaller scope
of sales and in part also of the increase of the
number of employees, which was greater by 3%.
2011
2011
Stroški prodajanja
Drugi poslovni odhodki
In 2011, operating expenses amounted to
€112.8 million and were by 4.2% lower than the
year before. The share of operating expenses
in sales totalled 98.2% in 2011, representing a
1.5% decrease compared to the previous year.
Within the last five years, the share of operating
expenses in sales was been between 96% and 98%.
40,000
40.000
2009
2009
General administration costs
Other operating expenses
Nabavna vrednost prodanega blaga
Stroški splošnih dejavnosti
2008
2008
Selling expenses
77.9
30
30
114,892
80,000
80.000
2007
2007
77.3
0
100.000
100,000
16
Deleži poslovnih
v prodaji
Shares odhodkov
of operating expenses
In the operating expenses structure, the biggest
percentage is taken by the costs of sales, which
has been around 79% of sales on the average
within the last five years. In 2011, it was by 5%
lower than in 2010, while the product sales
revenue was by 6% lower in the same period.
The selling expenses are the next among the
operating expenses considering the volume.
Within the last five years, they amounted to
16.4% of sales on the average. Compared
to 2010, the selling expenses decreased by
2.8% in 2011. The same holds for the general
management costs, which on the average
represent 2% of sales within the last five years.
Other operating costs were by 156% higher
compared to 2010. This is a result of major writeoffs of property, plant and equipment as well
as operating receivables, most of which refer to
write-offs of receivables due from the parent
company in accordance with the confirmed
compulsory settlement.
17
[Business Report]
Financial income and expenses
Item
Financial income
Financial expenses
Net financial result
2007
2008
2009
2010
2011
270
340
271
591
83
65
148
187
276
123
Compared to the year before, financial income
decreased by 53% and is composed of as
follows: interest income totalling €74 thousand,
other financial income at €197 thousand and
net income from currency differences in the
amount of €5 thousand.
2008
2009
2010
2011
276
Operating profit or loss
2,473
2,020
2,064
4,432
2,254
3,242
888
Net financial result
187
276
123
-2,651
-612
-2,651
-612
-
-
-
-8,500
-289
2,660
2,296
2,187
-6,718
1,353
Profit or loss
v tisoč EUR
18
Earnings before tax
Assets
As at 31 December 2011, the balance sheet
total was €40,609 thousand, which is 3% less
than at the end of 2010. Long-term assets
decreased due to decreased intangible assets
and property, plant and equipment, and also
due to lower deferred tax, while long-term
operating receivables increased. Short-term
assets decreased, since the inventory and
receivables for the assessed tax decreased
more than the loans, operating receivables and
cash increased.
2011
2011
12,447
2010
2010
13,720
2009
2009
12,680
26,163
28,311
4,432
2,473 2,436
2,000
2.000
-2,000
-2.000
Other expenses
retail channel. The Company generated €1,353
thousand of net earnings before tax. The
effective tax rate was 21%.
6,000
6.000
0
2007
Financial expenses were also lower compared
to 2010 (by 73%). The reason lies in last year’s
4,000
4.000
Earnings before tax structure
Item
high impairments of long-term loans given,
which was an outstanding business event.
A majority part of financial expenses (€882
thousand) refers to interest expenses, which
have increased due to the payments of surety
liabilities for the loans to the parent company.
In 2011, Big Bang’s operating profit or loss
of €2,254 thousand was lower than in 2010,
resulting from a minor volume of sales in the
[Business Report]
2,020 1,787 2,064
1,695
2,254
1,062
2007
2008
2009
2008
2008
-4,000
-4.000
2011
Short-term assets
11,816
36,300
Net profit or loss
2010
Long-term assets
33,364
2007
2007
10,104
31,365
0
-6,000
-6.000
-8,000
-8.000
0
10,000
10.000
20,000
20.000
-6,009
30,000
30.000
Assets In thousands of euros
40,000
40.000
50,000
50.000
Sredstva v tisoč EUR
Poslovni izid iz poslovanja
Čisti poslovni izid
Dolgoročna sredstva
Kratkoročna sredstva
19
[Business Report]
PLANS FOR THE FUTURE
Equity and liabilities
20
Compared to 2010, Big Bang’s equity increased
by €1,062 thousand. The increase is entirely due
to higher realised net earnings in 2011.
term liabilities were slightly higher than in
2010. Operating and other liabilities decreased,
but liabilities from loans increased, where the
short-term part of long-term loans is disclosed,
as aforementioned.
Long-term liabilities decreased due to the
reduction of provisions for sureties given for
loans of the parent company, which were
entirely drawn. The Company took long-term
loans to pay the sureties, and repaid a part of
the loans during the year. The part of loans
with maturity in the following year is disclosed
among short-term liabilities. In 2011, short-
2011
2011
8,579
25,598
7,517
2010
2010
Compared to 2010, the equity financing rate
increased by 23%, amounting to 26.8%. This
means that 26.8% of Company’s liabilities were
financed with equity sources.
We will renovate the personnel strategy of
financial reward system with the purpose
of positive motivation of employees at
all workplaces and to ensure the greatest
engagement of employees possible. We will
continue with appropriate forms of education,
which give the employees the knowledge
they need, so that they can do their work with
confidence and quality.
We will continue to optimize logistic processes
and costs, and implement IT support in
different processes in the Company, from sales
to business and end users, after sales services,
communication with partners and buyers, etc.
We will focus our communication activities
to consumer support in finding the right
solutions for themselves and education on
new technologies and important information,
which are required when making shopping
decisions. We will organize our stores in such
a way that the visitors will feel comfortable in
them, acquaint them with innovations and
find the right products they need in the wide
selection available.
8,943
Equity
28,022
497
2008
2008
The optimization of processes within the
Company will help us increase our work
efficiency; at the same time, we will need to
increase cost efficiency to achieve our key goals,
which is profitable operations and positive cash
flow.
6,433
25,571
17,525
2009
2009
[Business Report]
Short-term liabilities
Long-term liabilities
15,831
31,737
548
2007
2007
14,044
26,840
00
10,000
10.000
20,000
20.000
585
30,000
30.000
40,000
40.000
in thousands
euros
Obveznosti doLiabilities
virov sredstev
v tisočofEUR
Kapital
Kratkoročne obveznosti
50,000
50.000
Dolgoročne obveznosti
21
[Business Report]
EMPLOYEES
In 2011, the number of Big Bang employees
increased slightly. Their number in support
services dropped, while retail units received
new co-workers due to the opening of a new
branch (Big Bang Krško) and an increased
number of employees at points of sale in order
to boost sales effectiveness in the last quarter
of 2011.
The trend of increasing number of employees
stopped already during in 2009; in fact, the
number even decreased due to the closing of
unproductive stores. For the first time since
2008, a slightly increased number of employees
was recorded in 2011.
[Business Report]
The structure of employees at
31 December 2011
More than a half of employees have the 5th level
of education. In comparison with the previous
year, the number of Big Bang employees with
the 4th level of education or lower decreased,
while the number of those with the 5th level or
higher increased.
I. st
1st level
0.45%
2nd level
4.01%
II. st.
III. st.
31.12.2011
31.12.2010
22
26
363
345
Marketing
12
Wholesale
Management
Retail
Product management
Purchasing department
Logistics
Big Bang d.o.o.
22
3rd level
0.89%
IV. 4th
st. level
30.96%
V. st.
5th level
50.56%
4
VI. 6th
st. level
4.90%
6
8
VII. st.
7th level
7.50%
22
24
8th level
0.45%
3
4
VIII. st.
9th level
0.22%
21
24
449
435
IX. st.
600
600
Human Resources Strategy
500
500
400
400
300
300
200
200
100
00
2001 2002
2001 2002 2003 2004
2003 2004 2005 2006
2005 2006 2007 2008
2007 2008 2009 2010
2009 2010 2011
2011
The HR sector of Big Bang conducted the human
resources strategic conference in the first
quarter of 2011 in cooperation with an external
advisory company. The purpose of which was to
set up a human resources strategy and priorities
for the HR sector for the year to come.
In 2011, we began the following HR projects:
• Setup of the Competence System in
cooperation with the external advisor,
• Execution of the annual development talks,
• Setup of the first individual success indicators
and completion of the reward system in
accordance with it,
• Setup and execution of the
Big Bang Sales Academy,
• Execution of the management school for
two groups of managers (36 participants),
• Employee satisfaction poll via the
SIOK research,
• Introduction of an internal e-newsletter.
All activities of the HR sector are focused on
strengthening the trademark of Big Bang
as a popular employer and on the greater
satisfaction of the employees.
23
[Business Report]
Education of Employees
In 2011, we nearly doubled our investments
into education, compared to the previous year.
Apart from the topics we focused on in the
previous years (merchandise knowledge, safety
at work, team work) in 2011 we focused on two
larger projects in the area of education:
•Internally, we developed a program and
carried out two modules of the Big Bang
Sales Academy for all retail personnel.
The program was developed internally
by selected trainers in cooperation with
an external consultant. The execution of
the academy itself was entirely internally
organized. The first module of the Sales
Academy was also carried out in the
subsidiary in Serbia and the second module
will take place there in 2012;
•In cooperation with an external consultant,
we began the Management School intended
for all managers of the Company Big Bang.
Training took place in five modules.
Higher management staff also regularly meets
at educational meetings, which last over a
period of several days, with key emphasis
on team work and communication. We
offer promising individuals the possibility
of financing their studies at higher levels of
education. Technical assistants regularly attend
professional meetings to become acquainted
with the trends and changes in their line of
work.
Health Care and Well-Being
of Our Employees
24
In 2011, the periodic training for safety at
work and fire safety was organized for all
employees from the business management (73
employees). At the same time, we carried out
periodic training for safety at work at the retail
stores of the Company. Apart from trainings,
the external provider carried out a periodic
inspection of branches and made sure that the
employees work in safe and healthy conditions.
A revision of the fire safety order took place in
four branches.
In 2011, we also prepared for those workers
who operate fork-lifts, training for driving and
operating with forklifts.
We have regularly sent employees to periodic
health inspections in accordance with the
health risk assessment and new employees to
preliminary health inspections prior to taking
up their posts.
In 2011, a revision of the risk assessment
statement was planned, but was not done,
because the legislation regarding safety at work
and fire safety changed; therefore, the revision
will take place in 2012.
In 2011, the Company employed five
disabled workers. Procedures also began for
the attainment of rights from the disability
insurance for two other employees.
[Business Report]
Remuneration of Employees
In 2011, we enhanced the basic reward system
with a system of individual success indicators,
with which we enabled the employees with
good results far greater rewards. As in previous
years, in 2011 we acknowledged the top five
retail salespersons and five top managers and,
for the first time, we rewarded the top worker
of our subsidiary Big Bang Belgrade.
Big Bang and Young People
In 2011, we again actively cooperated with
schools in all regions by enabling student
placement in our stores. We also still offer
company scholarships to some perspective
students.
Research and Looking into the Future
In 2011, we carried out the SIOK (Slovenian
Organisational
Climate)
research
in
cooperation with the company AT Adria. The
results revealed key advantages and sources
of possible dissatisfaction of employees. In
accordance with the findings, we reorganized
the work of the HR sector, focusing it on raising
employee satisfaction in the future; therefore,
the year 2012 will be oriented to renewing
the remuneration system, determining roles
and processes, and renewing the career
development system.
In 2011, only one injury at work took place.
At Big Bang, we provide for safety at work
and healthcare together with the help of a
professionally trained external provider, Vago,
d.o.o.
25
[Business Report]
RISK MANAGEMENT
Financial Risk Management
Regarding financial risk management, we
follow the adopted financial policy, which
includes the fundamental elements for efficient
and systematic financial risk management.
The following are the goals of an active risk
management process:
•Reaching stability of operations and
decreasing exposure to individual risks to an
acceptable level,
•Increasing
the
market
value,
its
competitiveness and credit rating,
•Higher predictability of cash flows and
profits,
•Lower tax liabilities, and
•Decreased effects of extreme loss events.
risk, foreign currency risk, inflation risk, and
liquidity risk,
•Insolvency risk, which covers the short-term
and long-term insolvency risks.
Credit Risk
Credit risk exposure depends on individual
buyers and the economic conditions in the
buyers’ countries of origin.
At Big Bang, we have formed an active credit risk
management policy, which includes continuous
monitoring of outstanding receivables, a
system of limits to restrict the exposure to an
individual buyer, default interest, receivables
insurance and a receivables recovery policy.
This system covers all buyers. We are aware that
an overly strict credit risk management policy
could decrease the Company’s competitiveness,
resulting in a loss of a certain amount of
customers and consequently income.
As in 2010, levels in interest rates were low in
2011. In the first half of the year, we witnessed
the growth of EURIBOR, which however slightly
dropped in the second half. Due to intensified
situation on financial markets, interest rates
are not expected to increase. In contrast,
the exposure to interest rate risk has been
decreasing on account of regular monthly
repayments of the existing loans. Management
thus assesses the interest rate risk exposure in
2011 as moderate.
Market Risk
Market risk is a risk that changes in market
prices, such as exchange rates, interest rates
and equity instruments, may affect the revenue
or the value of financial instruments. The aim
of market risk management is to manage and
control the exposure to market risks within
reasonable limits and simultaneous profit
optimization.
Interest rate risk
2.00
2,00
1.80
1,80
1.60
1,60
1.40
1,40
1.20
1,20
1.00
1,00
0.80
0,80
0.60
0,60
0.40
0,40
0.20
0,20
0,000
r
be
r
be
r
m
ce
De
er
b
to
m
ve
No
Oc
be
3M EURIBOR
em
pt
6M EURIBOR
Se
t
s
gu
Av
ly
Ju
ne
ay
Ju
M
il
ch
ar
r
Ap
M
ry
ua
br
Fe
ry
In order to limit the exposure to the
aforementioned risk, we use a well-conceived
and formalized credit rating system that
comprises the following:
•Insurance of possible future receivables
upon signing the contract, and verifying the
new and existing buyers’ credit rating,
•Determining the range and maximum limit
for loyal and known buyers considering the
assessed credit rating, extent of turnover and
previous payment discipline, depending on
the amount and quality of insurance,
•Determining the limit for new buyers
considering the assessed credit rating and
insurance,
•Detailed trade receivable recovery procedure
Interest rate risk is a risk that the value of
a financial instrument may change due to
market interest rates fluctuation. In 2011, Big
Bang raised two long-term loans, both tied to
the EURIBOR variable interest rate risk, thus its
operation is exposed to interest rate risk.
Big Bang generates a majority of sales revenue
in the retail segment. Besides cash payments,
other payment instruments (cards, consumer
loans) enable us to receive practically the entire
revenue from this segment of sales immediately
or in a few days after products have been sold.
In the wholesale segment, we consistently
implement the indicated measures for risk
hedging; therefore, the Management believes
the credit risk exposure to be moderate.
a
nu
Financial risks are evaluated within the
framework of the following groups:
•Credit risk, which comprises all risks where
the business partners’ (buyers’) failure to
fulfil their contractual liabilities decreases
the Company’s economic benefits,
•Market risk, which includes the interest rate
(including the court recovery of debts).
Ja
26
In terms of business risk management, we
monitor the current conditions on all global
markets. Obtaining and managing the finances
needed for undisturbed operations and
investments remains difficult, so we pay special
attention to financial risks due to our global
presence. The economic crisis has brought
about new reporting methods; the focus is not
in numbers anymore but in different scenarios
and analyses, whereas risks are becoming a fact
and their management needs to be introduced
to all spheres of our operations.
[Business Report]
27
[Business Report]
Currency risk
Currency risk is a risk that the Company’s
economic benefits may change as a result of
changed rate of an individual currency.
The Company assesses that the currency risk
is not present, as the share of foreign currency
transactions compared to the overall operations
is negligible.
Insolvency Risk
28
Insolvency risk is the risk that the Company will
encounter problems in obtaining the finances
needed to fulfil its financial liabilities. The
Company has managed the indicated risk with
active liquidity management in order to prevent
the events of non-reconciled cash inflows and
outflows. This comprises the following:
•The system of limits determining the
minimum finances and high-liquid assets a
company must always have available,
•The credit risk management policy ensuring
payment of receivables as planned,
•Continuous cash flow planning and
monitoring, and
•Credit line with banks enabling borrowing
withdrawal with regard to the current needs.
Easier management and balancing of the
current liquidity also enables constant inflow
from retail buyers.
The management assesses that the insolvency
risk exposure is constant and low with regard
to the indicated protection measures and the
current situation.
Inflation risk
Since the Merkur Group uses the policy of
transferring increased purchase prices to the
selling prices, and since the non-EU states,
where our subsidiary is located, are making
strong and successful attempts to limit and
decrease inflation, the Management of the
Company assesses that the inflation exposure
risk is constant and low.
Purchasing Risks
Price risks
Changes in purchase prices represent a
strategic, business and financial risk. On the
one side, there is a risk that the prices of certain
goods, which we have in stock, may decrease
on the market. The adaptation to the changed
market conditions incurs stock revaluation
costs. Furthermore, if a supplier increases a
certain price, it may lead to a problem of noncompetitiveness and consequently a drop in
sales.
The reduction instrument for risks related to the
movement of prices is the purchase contract,
which determines certain limitations. Another
important instrument for the management of
this risk is stock regulation in respect to the level
of risk for individual type or group of goods.
The movement of purchase prices represents
high risk to a trading company. Exposure to this
risk at Big Bang, however, is moderate.
Inventory risk
Bad inventory (dead or slow-moving stock,
goods with expired shelf life, etc.) causes longer
time deposits and requires sales at discounted
[Business Report]
sale prices, as well as write-offs, thus affecting
the Company’s operating result.
We manage this type of risk by constantly
monitoring such stock, using defined criteria
and by taking prompt measures, whereby we
include our suppliers in the solutions as regards
the bad inventory. The instrument for managing
such risk is also the purchase contract.
Bad inventory can have a major effect on
the Company’s operations, yet it does not
represent a high risk to us, as the percentage
of bad inventory is very low and we have an
impairment formed for it.
Delivery risk
This is a risk that a supplier may fail to deliver
goods within the agreed period, which in
particular represents a risk for merchandise in
offer. A consequence of untimely delivery is
failure to reach the planned effect of the offer
and a loss of the Company’s goodwill. Untimely
issues of merchandise are also an opportunity
cost, as they may result in low stock of goods,
thus a loss of sales opportunities.
An instrument for managing this type of risk is
the purchase contract, in which damages are
determined, primarily for the case of untimely
issue of goods in offer, and damages for
untimely deliveries of goods not in offer.
Untimely deliveries represent a moderate
risk, which slightly decreases with stock
optimization.
Goods or accompanying documentation risk
Big Bang trades in a wide range of products,
which must comply with numerous legal
requirements. There is a risk that a certain
product may not entirely comply with the
requirements, thus resulting in consequences,
such as prohibition of sale by supervisory
bodies, costs of procedures and high penalties,
which have a direct negative impact on the
operating result. To limit this type of risk, we
follow the current legislation and keep our
employees at the sales department informed
of it.
The impact on operations is moderate, and the
probability of occurrence is low.
Other Risks
Logistics risk
At Big Bang, the logistics activity represents
certain risks for the Company’s operations,
which is particularly reflected in resource
management
(human,
spatial,
time,
technological, information, data resources, etc.)
and cost management.
We decrease the possibility of risks by:
•Being organized – cooperation and codeciding of the logistics department with
other fields of the Company on all levels
(strategic, tactical, operative),
•Managing standards – development and
use of own standards and their transfer to
external partners,
•Being technologically equipped – use of
new technologies,
•Having information support – introduction
of a better information system,
•Managing costs – reduction and control in
all processes and sources,
•Planning – easier and better resource
management.
29
30
[Business Report]
In terms of logistics, we carry out these activities
internally, i.e. through our own development
and changes of processes, by introducing new
operating standards and renewed operations,
and externally, i.e. through activities and
cooperation on all levels of operations in the
Company and the sales logistics with external
partners. For these purposes we are:
•Preparing logistic processes renewal,
•Introducing processes of purchasing, sales,
after-sales, reverse and distribution logistics,
•Preparing a new purchase contract with a
logistics annex,
•Preparing new data and packing standards,
•Preparing a manual for suppliers with
corresponding damages for disrespecting
delivery dates,
•Cooperating and managing quality systems.
Insurance
The insurance policy is used to provide
appropriate security of property in case
of different unpredictable loss events. We
have concluded contracts for the following
insurance types:
•fire insurance,
•earthquake insurance,
•general liability insurance,
•cargo insurance for international transport,
•burglary insurance,
•auto insurance,
•accident insurance,
•receivables insurance.
[Business Report]
STATEMENT IN ACCORDANCE WITH ARTICLE 545 OF THE
COMPANIES ACT (ZGD-1)
The Managing Director of the Company BIG BANG d.o.o. Ljubljana hereby declares that in 2011 there
was no action taken or abandoned on the initiative of the managing company or its related companies
that would represent a deprivation for the Company BIG BANG d.o.o. Ljubljana.
Aleš Ponikvar
Managing Director
We have been actively changing the role of the
logistics from a support function into that of an
important supporting player and development
partner as a very important link of the supply
chain. Logistics as a function has a significant
impact on the excellence of the supply chain
and on the Company’s competitiveness. It will
continue affecting the buyers’ satisfaction,
operating excellence, and it will also allow us
manage our working capital more economically
as well as use our operating assets more
efficiently.
Considering all the indicated measures and
activities, we assess the logistics risks to be low.
31
32
Financial
report
33
[Financial report]
AUDITED FINANCIAL STATEMENTS
Income Statement
Item
Balance sheet
Item
[Financial report]
Note
TOTAL ASSETS
Long-term assets
Net sales
Note
6.1
Cost of sales
2011
2010
114,892
121,825
-89,540
-94,168
31.12.2011
31.12.2010
40,609
42,031
Gross profit from sales
25,352
27,657
12,447
13,720
Selling expenses
6.2
-20,208
-20,794
General administration costs
6.2
-2,498
-2,570
Intangible assets
5.1
356
541
Property, plant and equipment
5.2
6,239
7,291
Revaluation operating costs
6.3
-507
-199
Other operating costs
6.3
-17
-8
Other operating revenue
6.4
131
347
2,254
4,432
Long-term financial investments in subsidiaries
5.3
4,989
4,989
Long-term loans
5.4
4
8
Long-term operating receivables
5.5
258
-
Deferred tax assets
5.6
600
891
Short-term assets
28,163
28,311
Inventories
5.7
17,028
17,835
Short-term loans
5.4
96
5
-
380
Assessed tax receivables
Short-term operating receivables
5.8
8,737
8,644
Cash
5.9
2,303
1,447
40,609
42,031
8,579
7,517
TOTAL LIABILITIES
Equity
5.10
Share capital
4,204
4,204
Capital surplus
2,892
4,620
Profit reserves
420
420
-
4,280
1,062
-6,009
32,030
34,514
349
8,855
349
8,855
6,084
88
Retained net profit or loss
Net profit or loss for the period
Liabilities
Provisions and long-term accrued expenses
and deferred revenues
Provisions
5.12
Long-term liabilities
Long-term financial liabilities
5.11
Short-term liabilities
6,084
88
25,597
25,571
Short-term financial liabilities
5.11
1,917
108
Short-term operating liabilities
5.13
23,677
25,463
3
-
Assessed tax liabilities
34
Financial income
6.5
276
591
Financial expenses
6.5
-888
-3,242
-612
-2,651
Net financial income/expenses
OTHER EXPENSES
6.6
Net pre-tax earnings
Income tax
6.7
-289
-8,500
1,353
-6,718
-291
710
1,062
-6,009
The accompanying notes are an integral part of these financial statements and should be read
in conjunction with them.
Statement of comprehensive income
Item
2011
2010
1,062
-6,009
-
-
1,062
-6,009
Other comprehensive income for the period
Total comprehensive income for the period
The accompanying notes are an integral part of these financial statements and should be read
in conjunction with them.
35
[Financial report]
Cash flow statement
Item
2011
2010
Net pre-tax profit or loss
1,353
-6,718
Adjustments for:
3,234
13,236
Depreciation and amortisation
2,034
1,988
Revaluation operating income
-85
-314
Revaluation operating expenses
463
219
[Financial report]
Statement of changes in equity
Item
Cash flow from operating activities
Expenditure for the provisions of given sureties, guarantees and
lawsuits
Investment income
Investment expenses
Financing expenses
Changes in net operating short-term assets and provisions
Changes in operating and other receivables
Changes in inventories
Changes in operating and other receivables
Changes in accruals and provisions
Net operating cash flow
Paid/returned corporate income tax
7
8,500
-73
-101
0
2,703
888
241
61
2,053
-111
8,471
807
-3,851
-622
-2,549
-13
-18
4,648
8,571
-1,276
-369
Share
capital
Capital
surplus
Legal
reserves
Net profit
for the year
Retained
net profit
TOTAL
EQUITY
4,204
8,620
420
1,695
2,586
17,525
Balance at 1 January 2010
Profit or loss for the period
-
-
-
-6,009
-
-6,009
Comprehensive income for the period
-
-
-
-6,009
-
-6,009
Transactions with owners recorded in equity
-
Return of paid surplus
-
-4,000
-
-
-
-4,000
Transfer of the net profit from previous year to retained
profit
-
-
-
-1,695
1,695
0
Offsetting the net loss for the year following the
Management resolution
-
-1,728
-
6,009
-4,280
0
Total transactions with owners recorded in equity
-
-5,728
-
4,314
-2,586
-4,000
Balance at 31 December 2010
4,204
2,892
420
0
0
7,517
4,204
2,892
420
-
-
7,517
Profit or loss for the period
-
-
-
1,062
-
1,062
Comprehensive income for the period
-
-
-
1,062
-
1,062
4,204
2,892
420
1,062
-
8,579
Cash flow from investing activities
Proceeds from investing activities
303
1,781
Interest received
74
101
Proceeds from sale of property, plant and equipment
18
18
211
1,662
-1,258
-5,001
Expenses for acquisition of property, plant and equipment
-740
-1,551
Expenses for acquisition of intangible assets
-219
-158
-
-580
Expenses for loans
-298
-2,712
Net cash flow from investing activities
-955
-3,220
-
73
Proceeds from returned loans
Expenses for investing activities
Expenses for acquisition of investments in subsidiaries
Proposal for the appropriation of profit
The profit for appropriation for 2011 consists of the following:
Net profit or loss for 2011
1,062
Net profit from previous periods
PROFIT FOR APPROPRIATION FOR THE FINANCIAL YEAR
1,062
The Management proposes that the profit for appropriation for 2011 be left entirely undistributed.
Cash flow from financing activities
Proceeds from investing activities
Proceeds from increase in short-term financial investments
-
73
-1,561
-4,328
Expenses for interest pair
-783
-241
Expenses for payment of long-term financial liabilities
-778
-87
Expenses for investing activities
Expenses for return of equity
Net cash flow from investing activities
Cash for the period
-
-4,000
-1,561
-4,255
855
727
Opening balance of cash and cash equivalents
1,447
720
Closing balance of cash and cash equivalents
2,302
1,447
36
37
[Financial report]
NOTES TO THE AUDITED FINANCIAL STATEMENTS
1. The Reporting Company
Big Bang, d.o.o., (hereinafter “Company”) has
its registered address at Šmartinska cesta
152, 1000 Ljubljana, Slovenia. The Company
compiles consolidated financial statements
and its Annual Report in accordance with the
International Financial Reporting Standards
(hereinafter “IFRS”) as adopted by the European
Union and in accordance with the Companies
Act. The business year equals the calendar year.
The Company and the registered office of
the managing company
The Company is an affiliate of the company
Merkur, trgovina in storitve, d.d., with its
registered office at Cesta na Okroglo 7, 4202
Naklo, Slovenia. Merkur, d.d., is the sole owner of
the Company’s equity. The managing company
compiles consolidated financial statements
and prepares the consolidated Annual Report
for the companies of the Merkur Group.
The Company does not compile its consolidated
financial statements in accordance with Article
56 of the Companies Act.
2. Basis for Compilation
2.1 Statement of Compliance
38
The financial statements have been prepared
in accordance with the IFRS promulgated
by the International Accounting Standards
Board (hereinafter “IASB”), as adopted by the
European Union.
The management of the Company confirmed
the financial statements on 5 March 2012.
2.2 Basis for Preparation
The financial statements have been prepared
on a historical cost basis and the going concern.
2.3 Functional and Presentation Currency
The financial statements of the Company are
presented in euros (€), which is the Company’s
functional currency. All accounting data
presented in euros is rounded to one thousand
units. The rounding may result in slight
differences in summation.
2.4 Use of Estimates and Judgments
The preparation of the financial statements in
accordance with IFRS requires management
to make certain estimates, judgments and
assumptions which impact the use of the
accounting policies and the disclosure of
the values of assets, liabilities, revenue and
expenses. The actual results may deviate from
these estimates.
The estimates and assumptions must be
continuously
verified.
Adjustments
of
accounting estimates are recognised for the
period in which an estimate is adjusted, and for
all the future years affected by the adjustment.
The data about relevant estimates of uncertainty
and critical judgments, which were prepared by
the Management Board during the accounting
policies implementation process, and which
most affect the amounts in the financial
statements, are indicated in the notes under:
•Property, plant and equipment,
•Financial assets and liabilities,
•Inventory, and
•Provisions. [Financial report]
3. Significant Accounting Policies
The Company has consistently applied the
accounting policies set out below for all periods
presented in the enclosed financial statements.
3.1 Foreign Currency
Foreign currency transactions
Transactions expressed in a foreign currency
are translated into the functional currency of
the Company at the prevailing exchange rate
on the date of the transaction. Monetary assets
and liabilities in foreign currency are translated
at the exchange rate of the functional
currency prevailing on the balance sheet date.
Positive or negative currency differences are
differences between the amortised cost in the
functional currency at the beginning of the
period, adjusted for the amount of effective
interest and payments in the period, and the
amortised cost in a foreign currency translated
at the exchange rate at the end of the period.
Currency differences are recognised in the
income statement.
3.2 Financial Instruments
3.2.1 Non-Derivative Financial Instruments
Non-derivative financial instruments of the
Company include investments in equity,
operating and other receivables, cash and cash
equivalents, loans, as well as operating and
other liabilities.
Initially, the Company recognises loans,
receivables and deposits on the day of their
occurrence. The other financial assets are initially
recognised on the date of exchange or when
the Company becomes a subject of contractual
provisions regarding the instrument.
The Company derecognises a financial asset
when the contractual rights for cash flows from
this asset terminate or when the Company
transfers the rights for contractual cash flows
from the financial asset based on a transaction
in which all risks and benefits attaching to the
ownership of the financial asset are transferred.
Any share in a transferred financial asset created
or transferred by the Company is recognised as
an individual asset or liability.
Financial assets and liabilities are offset, and the
net amount is presented in the balance sheet
if and only if the Company has a legal right to
either settle the net sum or cash in an asset and
at the same time settle its liability.
Investments in subsidiaries
Investments in subsidiaries are accounted
for at the cost in the financial statements
of the Company. Upon obtaining them, the
investments are not revalued due to currency
differences (in the case of investments in
companies abroad) or due to an increased
value of a corresponding part of the Company’s
capital in which the Company has such an
investment. In justified cases, their value must
be impaired, provided that reasons for it exist
(see the accounting policy “Impairment of
Assets”).
Loans
Loans are financial assets with determined
or determinable payments and are initially
recognised at the fair value at the effective
interest method. Following their initial
recognition, they are stated at the amortised
cost, where any possible differences between
the original and amortised cost are stated in
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40
[Financial report]
the income statement in the loan repayment
period. The effective interest rate method is
used.
Operating receivables
On initial recognition, operating receivables
are stated in amounts from corresponding
documents, with the assumption that they will
be repaid. Receivables are usually measured
at their amortised cost at the effective interest
method. Short-term receivables are not
discounted at the balance sheet date.
Cash and cash equivalents
Cash comprises cash in bank and in hand.
Cash equivalents are short-term, quickly
realisable deposits immediately transferrable
into amounts of cash and with insignificant
currency risk.
Automatic debt on the current account is not
cash but a short-term financial liability.
Equity
The total equity of the Company is its liability
to the owners, which falls due if the Company
goes out of business. It is determined with the
amounts invested by the owners, and with
amounts that appeared during operations
and that belong to the owners. It is decreased
by the operating loss, treasury shares and
withdrawals (payments). The total equity
comprises the share capital, capital surplus
(meaning subsequent payments of capital),
profit reserves and retained earnings (from
previous years and the current year).
Financial liabilities
On initial recognition, financial liabilities are
stated at the fair value without any decrease
by the relevant costs of transaction. After
initial recognition, borrowings are stated at the
amortised cost, where any possible differences
between the original and the amortised cost
are stated in the income statement in the
borrowing repayment period. The effective
interest method is used.
Operating liabilities
Liabilities are generally measured at the
amortised cost at the effective interest
method. Short-term operating liabilities are not
discounted at the balance sheet date.
On initial recognition, operating liabilities are
valued with amounts from corresponding
documents on their occurrence, which prove a
receipt of a product or service or a performed
work or accounted cost, expense or share in the
profit or loss for operating liabilities.
3.2.2 Derivative Financial Instruments
The Company does not use any derivative
financial instruments.
3.3 Property, Plant and Equipment
Measurement upon recognition
Property, plant and equipment are stated at
their cost less the depreciation adjustment
and accumulated impairment loss (see the
accounting policy “Impairment of Assets”).
On initial recognition, property, plant and
equipment are measured at the cost that
comprises the purchase price, including import
duties and non-refundable purchase taxes,
and any directly attributable costs of bringing
the asset to working condition for its intended
[Financial report]
use. The cost also comprises the borrowing
costs (interest) related to the construction
of immovable property until it is in working
condition.
Additional or agreed-upon investments in
assets and in improvements of assets, which the
Company has in finance or operating lease, are
stated among property, plant and equipment
or their parts.
Subsequent expenditure
Expenditure incurred to replace a component
of an item of property, plant and equipment
is recognised in the carrying amount of such
asset, if it is likely that it will increase the future
economic benefit embodied in the item of
property, plant and equipment and that the
fair value can be reliably assessed. Based on the
originally assessed level of asset efficiency and
useful life, repairs or maintenance of property,
plant and equipment for renewing or keeping
the future economic benefit are stated in the
income statement as maintenance expenditure
when incurred.
Beginning of depreciation, depreciation
method and useful lives
Property, plant and equipment start being
depreciated on the first day of the month
following the month when it is made
available for use. Depreciation is recognised
in the income statement with the straight-line
depreciation method, considering the useful
life of each individual item of property, plant
and equipment. The estimated useful lives of
assets for the current and comparable period
are as follows:
•Buildings – 33.33 years,
•Investments in leased premises – 10 years,
•Plant and equipment – 2 to 10 years,
•Furniture – 5 years,
•Computer equipment – 2 years, and
•Means of transport – 5 years.
Land, advances for property, plant and
equipment, plant and equipment in
construction or in the process of obtaining and
works of art are not depreciated.
Depreciation methods, useful lives and the
residual values are reassessed on the reporting
date and adjusted if necessary. In 2011, they
did not change. Leased assets are depreciated
considering the duration of lease and their
useful life.
Derecognition
Property,
plant and
equipment
are
derecognised upon their disposal or when no
future economic benefit is expected from their
use or disposal. Profit or losses arising from the
derecognition of property, plant and equipment
are established as the difference between the
possible net returns upon disposals and their
carrying amount. They are stated in the income
statement upon their derecognition.
3.4 Intangible Assets
Intangible assets are non-monetary assets
without physical existence, such as purchases
of a trademark and software as well as longterm patents and licenses.
In-house costs of research and development,
colophons, lists of consumers and items similar
in content are not recognised as an intangible
asset but are immediately treated as costs
or operating expenses in the period when
incurred.
41
[Financial report]
Intangible assets are recognised at their
cost less the accumulated amortisation and
accumulated impairment losses (see the
accounting policy “Impairment of Assets”).
Amortisation
Amortisation is recognised in the income
statement under the straight-line amortisation
method considering the useful lives of
intangible assets unless the useful lives are not
determined. Amortisation of intangible assets
begins when an asset is ready for its use. This
method most accurately reflects the expected
pattern of the use of future economic benefits
embodied in the asset. The estimated useful
life for the current and comparable period for
software, licenses and other rights is two years.
The amortisation methods, useful lives and
the residual values are reassessed by at least
the end of each business year and adjusted if
necessary. In 2011, they did not change.
Derecognition
Intangible assets are derecognised upon their
disposal or when no future economic benefit
is expected from their use or disposal. Profit
or losses arising from the derecognition of
an intangible asset are established as the
difference between the possible net returns
upon disposals and the carrying amount of the
asset. They are stated in the income statement
upon derecognition of the asset.
3.5
42
Impairment of Assets
Financial assets
On the reporting date, any financial asset that
is not recognised at the fair value through the
profit or loss is assessed as to whether there
exists objective evidence that demonstrates
the impairment of the asset. A financial asset
is considered impaired if there is objective
evidence demonstrating that upon initial
recognition of such asset one or more events,
which can be reliably measured, has brought
to a decrease in the expected future cash flows
relating to this asset.
Objective evidence on the impairment
of financial assets can be the following:
non-fulfilment or violation by the debtor;
restructuring of an amount owed by others to
the Company if the Company agrees to it; signs
that the debtor will go bankrupt; and decreased
solvency of lessees.
When assessing the total impairment, the
Company uses the past development of the
probability of non-fulfilment, the time of
recovery and the amount of the loss incurred,
which is adjusted for the assessment of the
Management Board regarding whether the
actual losses due to the current economic and
loan conditions can be higher or lower than the
losses as envisaged by the past development.
The impairment loss related to a financial asset
carried at the amortised cost is calculated as
the difference between the carrying amount
of an asset and the expected future cash flows
discounted at the original effective interest
rate. Losses are recognised in the income
statement and stated in the allowance account.
In this way, a part of the impaired asset is still
recognised in the settlement of discount. When
the amount of the impairment loss decreases
due to subsequent events, the decrease of the
impairment loss is derecognised through the
income statement.
[Financial report]
Impairment of operating receivables
When objective evidence of the impairment of
receivables exists, the loss is measured as the
difference between the carrying amount of the
receivable and the expected recoverable value,
and it is recognised in the income statement.
Receivables that are believed to be partially
or entirely uncollectible should be recorded
as doubtful receivables, or as disputable if a
dispute has developed in connection with
them.
In case of large receivables, receivables in
connection with which a collection proceeding
has been initiated at court, and receivables
in the process of compulsory settlement
or in liquidation procedure, recovery is
assessed individually considering the current
operations and credit rating or suitable
insurance supporting the expectations that
the receivables are realistically existing and
collectible.
Individual adjustment is also formed for large
receivables (above €10,000), which are not in
court proceedings, yet doubt of their collection
exists.
The Company promptly carries out the used
methodology and consequently the adequacy
of the risk assessment and calculations of
possible losses in cases when a buyer fails to
settle a payment, while it makes a calculation
of possible losses twice a year.
For final write-offs of receivables, suitable
documents are needed as evidence: rejection
of receivable state confirmation, court rulings,
compulsory settlement orders, bankruptcy
procedure orders and other appropriate
documents.
Non-financial assets
At each reporting date, the Company checks
the residual carrying amount of its non-financial
assets, excluding the deferred tax assets, in
order to establish whether there are signs of
impairment. If such signs exist, the recoverable
amount of the asset is assessed. Inventories are
not subject to impairment according to IAS 36.
The recoverable amount of an asset or cash
generating unit is its value of use or fair value
less selling costs, whichever is higher. When
determining the asset’s value of use, the
expected future cash flows are discounted
to their current value using the pre-tax
discounting rate, which reflects the current
market estimate of the time value of money
and the risk applicable to this asset. To test the
impairment, the assets that cannot be tested
individually are classified into the smallest
possible group of assets, which generate cash
flows from further use, and which are primarily
independent of the receipts of the residual
assets or groups of assets (cash generating
unit).
Impairment of an asset or cash generating unit
is recognised when its carrying amount exceeds
its recoverable amount. A cash generating unit
is the smallest group of assets that generate
financial inflows that are to a large degree
independent of financial inflows from other
assets or groups of assets. The impairment
is recognised in the income statement. The
impairment loss recognised is reclassified
proportionate to the carrying amount of each
asset in the unit.
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[Financial report]
3.6 Inventories
44
Inventory valuation
Inventory is valued at the historical cost or
net realisable value, whichever is lower. The
net realisable value is the estimated selling
price reached during the regular operation
less the estimated costs of completion and the
estimated selling costs.
The Company uses the FIFO method (costing
method) for inventory valuation.
The cost of inventories comprises the purchase
price, customs duty and other charges
(excluding those that will be later refunded to
the Company by tax authorities), transportation
costs, handling costs, and other costs
attributable directly to obtained merchandise
or material. Commercial discounts, other
discounts and similar items are subtracted
during the establishment of the cost.
When inventory is sold, its carrying amount is
recognised as an expense of the period in which
the corresponding income was accounted for.
Net realisable value of inventories
The value of inventories is not replaceable if
inventories are damaged, entirely or partially
obsolete, or if their selling prices decrease. The
value of inventories is also not replaceable if the
estimated costs of completion or the estimated
sales related costs increase. Partial inventory
write-off below its historical cost or expenses
to the net realisable value is in accordance with
the standpoint that assets cannot be carried
in higher amounts than the expected value
during their sale or use. The amount of every
partial write-down of inventories with the net
realisable value and all losses of inventories is
recognised as an expense in the period when a
partial write-down or loss incurs.
Write-downs and partial write-downs of
damaged, dead or useless inventory are carried
out on a regular basis throughout the year or
during the inventory by individual items. At
year end, the net realisable value of inventories
is inspected by similar types of goods. Flatrate inventory write-downs are made ranging
between 10% and 50% of the carrying amount
of inventories. The criteria for write-down are
the age of inventory and inventory turnover.
3.7 Provisions
Provisions are recognised if the Company has a
current legal or indirect obligation as result of a
past event, and if there is a probability that the
offset for this obligation will require an outflow
of factors, which enable economic benefits.
Since the effect of the time value of money is
substantial, the amount of provision equals the
current value of expenses, which are expected
to be needed to offset the obligation.
Provisions for termination and jubilee benefits
In accordance with legal regulations and
the collective agreement, the Company is
obliged to pay jubilee benefits to employees
and termination benefits on their old-age
retirement, for which it has formed long-term
provisions. No other pension obligations exist.
Provisions are formed in the value of the
estimated future payments for old-age
retirement termination and jubilee benefits.
They are discounted on the balance sheet date
using the book reserve method based on the
actuarial calculation or estimate.
[Financial report]
3.8
Income Tax
Income tax for the year comprises current and
deferred tax. Income tax is recognised in the
income statement as an expense, except in the
part where it refers to the items recognised
directly in equity, and it is therefore recognised
in equity.
Current tax is tax that will be paid from the
taxable profit for the year using tax rates
established on the balance sheet date and the
possible adjustment of tax liabilities related to
the previous business years.
To record deferred tax, the method of liabilities
on the balance sheet is used based on
temporary differences between the carrying
and tax amounts of individual assets and
liabilities. The deferred tax amount is based on
the expected recovery method or settlement of
the carrying amount of assets effective on the
balance sheet date, or tax rates in the period in
which the write-down of receivable or deferred
tax liability is expected.
Deferred tax asset is recognised only to the
extent that it is probable that future taxable
profit will be available against which the
deferred asset can be utilized in the future.
Deferred tax assets are recorded by the amount
for which it is no longer likely that the tax relief
connected with the asset will be claimable.
3.9 Revenue
Revenue from the sale of goods and products
Revenue from the sale of goods and products
is recognised at the fair value of the received
repayment or related receivable, less the returns,
rebates for further sale and quantity discounts.
Revenue is recorded when a buyer assumes all
relevant types of risk and benefits connected
with the ownership of an asset, when there
is certainty regarding the repayment of an
allowance and related costs or the possibility of
returning goods and products, and when the
amount of revenue can be reliably assessed.
Revenue from services rendered
Revenue from services rendered is recognised
in the income statement when the service has
been rendered.
Other operating revenue
Other operating revenue includes revenue from
the disposal of property, plant and equipment
in the form of the surplus of their selling value
over their carrying amount. It also represents
revenue from realised receivables, including
the reversal of impairment of receivables and
revenue from write-offs of liabilities.
Finance income
Financial income comprises interest income
from investments and operating receivables,
exchange rate gains, and income from the
disposal of available-for-sale financial assets.
Interest income is recognised in the income
statement when incurred using the effective
interest rate method.
45
[Financial report]
3.10 Expenses
46
Operating expenses
Operating expenses are classified as the cost
of sold quantities, selling cost, general cost
(administrative and purchasing) and other
operating expenses that are not a cost.
Cost of sold quantities
The use of merchandise inventories for
sold quantities is derecognised using the
FIFO method. The cost of sold quantities of
merchandise is directly decreased by the
received rebates and super rebates by suppliers.
Rebates are partially accrued in the cost of
inventories.
Selling cost (with amortisation)
Selling costs (with amortisation) include all
costs incurred connected with the sale of
operating effects. Since these costs are not in
inventories, they are entirely recognised among
the operating expenses in the same accounting
period when incurred.
General cost (with amortisation)
General costs (with amortisation) comprise
all costs incurred in connection with the
purchase function and administration with
auxiliary activities. These costs are also entirely
recognised among operating expenses in the
same accounting period when incurred.
Costs by primary types
Costs of material and services are costs indicated
in supplier invoices and other documents less
discounts during the sale or later.
Depreciation/amortisation
is
recognised
individually by stages considering the shortest
time of use of an individual tangible or
intangible asset.
Labour costs are the gross amounts of salaries
charged under the collective agreement
and individual employment contracts,
contributions and charges directly debited to
the employer, voluntary pension insurance
and other labour costs (holiday allowance,
commuting allowance, meal allowance, etc.).
Other operating expenses appears in
connection with the impairment or write-off of
assets and with the disposal of property, plant
and equipment as result of sales loss.
Finance expenses
Finance expenses comprise interest costs on
borrowing, impairment losses on financial
assets and write-downs of financial assets
recognised through the income statement.
Borrowing costs are recognised in the income
statement using the effective interest rate
method. Exchange rate profit and loss are
recognised in the net amount. Financial
expenses are recognised regardless of the
payments related with them.
Other expenses
Other expenses refer to the items, which are a
result of outstanding, i.e. unique events, and
are not related with the regular operation of
the Company.
[Financial report]
3.11 Lease
Types of lease
A lease, for which the Company assumes all
relevant types of risk and benefits related to the
ownership of an asset, is treated as a financial
lease. Others are treated as operating leases.
Finance lease
At the inception of a lease, a finance lease is
recognised in the balance sheet as an asset and
liability in the amounts equal to the lower of
the fair value of the leased asset or the present
value of the minimum lease payments, whereby
both values are determined upon the inception
of the lease. Subsequent to initial recognition,
an asset is accounted for in accordance with the
accounting policies applicable for such assets.
Operating lease
With an operating lease, a lease is recognised
as an expense under the straight-line method
throughout the duration of the lease.
3.12 New standards and interpretations
that have not yet become effective
Many new standards, amendments to standards
and interpretations for the period ended on 31
December 2011, had not yet become effective
and were not applied during the preparation of
the financial statements. The adoption of the
following standards will not significantly affect
the Company’s financial statements.
IFRS 9 “Financial Instruments”, issued by the
IASB on 12 November, 2009. On September
28, 2010, the IASB issued a revised IFRS 9,
which includes new requirements as regards
accounting for financial liabilities, and
transferred requirements for derecognition
of financial assets and liabilities from IAS
39. The standard uses a unified approach
for determining whether a financial asset is
stated at the amortised cost or fair value, and
therefore subrogates a number of different
rules from IAS 39. The IFRS 9 approach is based
on the method used by an entity to manage
financial instruments (its business model) and
features of contractual cash flows of financial
assets. Furthermore, the new standard requires
the use of a unified impairment method, and
therefore subrogates numerous impairment
methods in IAS 39. The new requirements
about the accounting for financial liabilities
eliminate the problem of inconsistency in the
income statement, which are a result of the
issuer’s decisions to measure his/her debts at
the fair value. The IASB has decided to keep the
existing measurement of the amortised cost for
most liabilities, and to limit the amendments
to those necessary for the elimination of the
own loan problem. In accordance with the new
requirements, an entity that decides to measure
liabilities at the fair value will present the part
of the fair value, which is a consequence of
changes in entity’s own credit risk, in the other
comprehensive profit in the income statement
and not in the profit or loss.
IFRS 10 “Consolidated Financial Statements”,
issued by the IASB on 12 May 2011. IFRS 10
replaces the consolidation requirements in
SIC-12 Consolidation—Special Purpose Entities
and IAS 27 Consolidated and Separate Financial
Statements and combines them into a single
consolidation model, based on the principle of
control irrespective of the nature of an investee
(i.e. whether such entity is controlled with voting
rights of investors or with other agreements, as
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[Financial report]
it is common for special purpose entities). IFRS
10 defines control based on whether an investor
has 1) power over an investee; 2) exposure or
rights to variable returns; and 3) ability to use
power over an investee to affect its amount of
variable returns.
IFRS 11 “Joint Arrangements”, issued by
the IASB on 12 May 2011. IFRS 11 establishes
principles for the financial reporting by parties
to a joint arrangement. IFRS 11 supersedes IAS
31 Interests in Joint Ventures. The proportionate
consolidation method of accounting for jointly
controlled entities has been eliminated.
The mere distinction as to whether a joint
arrangement is a joint operation or a joint
venture is no longer the key factor. Joint
operation is a joint arrangement whereby the
parties that have joint control have the rights
to the assets and obligations for the liabilities.
Joint venture is a joint arrangement whereby
the parties that have joint control of the
arrangements have rights to the net assets of
the arrangement.
IFRS 12 “Disclosure of Interests in Other
Entities”, issued by the IASB on 12 May 2011.
IFRS 12 requires extensive disclosures of
consolidated as well as unconsolidated entities
in an entity’s interest. IFRS 12 requires extensive
disclosures to help users understand the basis of
control, any kind of limitations to consolidated
assets and liabilities, risks associated with
entity’s interest in unconsolidated structured
entities, and the involvement of non-controlling
owners of equity in the activity of consolidated
entities.
IFRS 13 “Fair Value Measurement”, issued by
the IASB on 12 May 2011. IFRS 13 defines fair
value, establishes a framework for measuring
fair value and sets out related disclosure
requirements. MSRP 13 does not amend the
requirements as to which items should be
measured or disclosed at fair value.
Amendments to IFRS 1 “First-time Adoption
of International Financial Reporting
Standards” – Limited exclusion of comparable
disclosures under IFRS 7 for first-time adopters
of IFRSs, published by the IASB on 28 January
2010. This amendment exempts the first-time
adopters of IFRSs of additional disclosures
introduced in March 2009 with the document
“Enhancing financial instruments disclosures”
(Amendments to IFRS 7).
Amendments to IFRS 1 “First-time Adoption
of International Financial Reporting
Standards” – Severe Hyperinflation and
Removal of Fixed Dates for First-Time Adopters,
issued by the IASB on 20 December 2010.
The first amendment replaces references to a
fixed date of “1 January 2004” with “the date
of transition for IFRSs”, thus eliminating the
need for companies adopting IFRSs for the first
time to restate derecognition transactions that
occurred before the date of transition to IFRSs.
The second amendment provides guidance
on how an entity should resume presenting
financial statements in accordance with IFRSs
after a period when the entity was unable
to comply with IFRSs because its functional
currency was subject to severe hyperinflation.
Amendments to IFRS 7 “Financial
Instruments: Disclosures” – Transfers of
financial assets issued by the IASB on 7
October 2010. The aim of these amendments
is to improve the quality of information about
[Financial report]
financial assets that were “transferred”, yet are
still recognised by an entity at least partially, as
they do not meet the criteria for derecognition;
and about financial assets no longer recognised
by an entity, as they meet the criteria for
derecognition, yet are still somehow connected
with them.
Instruments: Disclosures” – Offsetting
Financial Assets and Financial Liabilities,
issued by the IASB on 16 December 2011. The
amendments require disclosure of information
about all recognised financial instruments
that are set off in accordance with paragraph
42 of IAS 32. These amendments also require
disclosure of information about recognised
financial instruments that are subject to an
enforceable master netting arrangement or
“similar arrangement”, irrespective of whether
they are set-off in accordance with IAS 32.
Instruments” and IFRS 7 “Financial
Instruments: Disclosures” – The mandatory
effective date and transition disclosures,
issued by the IASB on 16 December 2011. The
amendments move the mandatory effective
date from 1 January 2013 to 1 January 2015. The
restatement of comparative period financial
statements upon initial application of the
classification and measurement requirements
of IFRS 9 is no longer required. This was
originally a domain of entities who decided
to use IFRS 9 prior to 2012. Instead, additional
disclosures of transitions will be required to
help investors understand the effect of the
initial application of IASB 9 on the classification
and measurement of financial instruments.
Amendments to IAS 1 “Presentation of
Financial Statements” – Presentation of Items
of Other Comprehensive Income, issued by the
IASB on 16 June 2011. The amendments require
the entities that prepare financial statements
in accordance with IFRS to group items
contained in other comprehensive income,
which can be reclassified to profit or loss, in
the income statement. The amendments also
retain the option to present profit or loss and
other comprehensive income in either a single
continuous statement or in two separate but
consecutive statements.
Amendments to IAS 12 “Income Taxes” –
Deferred Tax: Recovery of Underlying Assets,
issued by the IASB on 20 December 2010. IAS
12 requires an entity to measure the deferred
tax relating to an asset depending on whether
the entity expects to recover the carrying
amount of the asset through use or sale. It can
be difficult and subjective to assess whether
recovery will be through use or through sale
when the asset is measured using the fair
value model in IAS 40 Investment Property. The
amendment provides a practical solution to the
problem by introducing a presumption that
recovery of the carrying amount will, normally,
be through sale.
Amendments to IAS 19 “Employee Benefits”
– Improvements to the accounting for postemployment benefits, issued by the IASB on 16
June 2011. The amendments make important
improvements by: (1) eliminating an option
to defer the recognition of gains and losses,
known as the ‘corridor method’, improving
comparability and faithfulness of presentation;
(2) streamlining the presentation of changes in
assets and liabilities arising from defined benefit
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[Financial report]
plans, including requiring remeasurements to
be presented in other comprehensive income
(OCI), thereby separating those changes from
changes that many perceive to be the result of
an entity’s day-to-day operations; (3) enhancing
the disclosure requirements for defined benefit
plans, providing better information about the
characteristics of defined benefit plans and
the risks that entities are exposed to through
participation in those plans.
Amendments to IAS 24 “Related Party
Disclosures”
–
Simplified
disclosure
requirements for government-related entities
and clarification of the definition of a related
party, issued by the IASB on 4 November
2009. Amendments enable partial exemption
for government-related entities. Prior to
the introduction of these amendments, if
a government controlled or significantly
influenced an entity, the entity was required
to disclose information about all transactions
with other entities controlled, or significantly
influenced by the same government. The
revised standard still requires disclosures that
are important to users of financial statements
but eliminates requirements to disclose
information that is costly to gather and of less
value to users. The IASB has also simplified the
definition and removed inconsistencies.
IAS 27 “Separate Financial Statements”
(amended in 2011), issued by the IASB on 12
May 2011. Requirements regarding separate
financial statements have remained unchanged
and are included in the amendment to IAS 27.
Other parts of IAS 27 have been replaced by
IFRS 10.
[Financial report]
IAS 28 “Investments in Associates and Joint
Ventures” (amended in 2011), issued by the
IASB on 12 May 2011. IAS 28 has been amended
accordingly, based on the issue of IFRS 10, IFRS
11 and IFRS 12.
Amendments to IAS 32 “Financial
Instruments: Presentation” – Classification
of rights issues, issued by the IASB on October
8, 2009. This amendment concerns the
classification of rights issues (rights, options
or warrants) denominated in a foreign
currency, which differs from the issuer’s
functional currency. Such rights issued were
previously classified as derivative liabilities. The
amendment states that if certain conditions
are fulfilled, such rights should be classified as
equity regardless of the currency in which the
exercise price is denominated.
recognition in cases in which free interpretation
was previously allowed. The most significant
amendments include new or amended
requirements regarding: (i) accounting policy
changes in the year of adoption of IFRSs; (ii)
revaluation basis as deemed cost; (iii) use of
deemed cost for operations subject to rate
regulation; (iv) transitional requirements for
contingent consideration from a business
combination that occurred before the effective
date of the revised IFRS 3; (v) measurement
of non-controlling interests; (vi) un-replaced
and voluntary replaced share-based payment
awards; (vii) clarification of disclosures required
by IFRS 7; (viii) classification of statement of
changes in equity; (ix) transitional requirements
for consequential amendments as a result of
IAS 27; (x) events and transactions significant
for IAS 34; (xi) fair value of award credit.
Amendments to IAS 32 “Financial
Instruments: Presentation” – Offsetting
Financial Assets and Financial Liabilities,
issued by the IASB on 16 December 2011.
The amendments clarify the use of rules for
offsetting and are focused on four main areas:
(a) the meaning of “currently has a legally
enforceable right of set-off”; (b) application of
simultaneous realisation and settlement; (c)
offsetting sums of collateral; and (d) the unit of
account to which the offsetting criteria should
be applied.
Amendments to IFRIC 14 “IAS 19 –
The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their
Interaction” – Prepayments of a minimum
funding requirement, issued by the IASB on 26
November 2009. Without the amendments, in
some circumstances entities were not permitted
to recognise some voluntary prepayments for
minimum funding contributions as assets. The
amendments correct this problem.
Amendments to various standards and
interpretations “Improvements to IFRSs
(2010)”, issued by the IASB on 6 May 2010
under the process of annual improvements to
IFRSs (IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS
34 and IFRIC 13), The amendments provide
clarifications for requirements of the accounting
IFRIC 19 “Extinguishing Financial Liabilities
with Equity Instruments”, issued by the IASB
on 26 November 2009. This interpretation
explains IFRS requirements in cases in which
an entity reaches a new arrangement on the
provisions and conditions of financial liability
with a creditor, and the creditor agrees to
accept shares or some other entity’s equity
instruments to extinguish all or part of the
financial liability.
IFRIC 20 “Stripping Costs in the Production
Phase of a Surface Mine”, issued by the
IASB on 19 October 2011. This interpretation
requires the costs of “stripping activity” to be
accounted for as an addition to an existing
asset or its improvement, and that this
component must be depreciated or amortised
over the expected useful life of the identified
core body that becomes more accessible as a
result of the stripping activity (using the units
of production method unless another method
is more appropriate).
4. Financial Risk Management
In terms of financial risk management, the
Group follows the adopted financial policy that
includes the fundamental elements for efficient
and systematic financial risk management.
A more detailed overview and activities for
assessment and management of each type of
risk is indicated in the Business Report in the
section “Risk Management”.
Accounting policies related to risk management
are formed in order to determine and analyse
the risk we face, based on which suitable
restrictions and controls are determined
and risks are monitored. Risk management
policies and systems are regularly inspected,
and information from the environment has a
dynamic and proactive effect on the current
decisions regarding the Company operations
under the changed circumstances.
4.1. Credit Risk
Credit risk is a risk that a party to a contract on
financial instrument may not fulfil its liabilities,
thus incurring financial loss to the Company.
51
[Financial report]
Credit risk is directly linked to the commercial
risk and represents a threat that trade
receivables and receivables due from other
business partners will be repaid with a delay or
will not be repaid at all.
In order to limit the credit risk exposure, we
use the GVIN formalized business information
system. To better know our partners, we use
the soft part of information, which includes
the current operations as well as the history of
their operations with us and the activities of
the founders, owners and representatives of
these entities in relation to their involvement in
critical processes.
We manage credit risk exposure through the
buyers’ credit rating and the active collection of
receivables.
The Company management assesses that due
to the indicated measures for risk hedging
and the fact that the Company generates
most revenues in the retail sector, where cash
payment prevails, the exposure to credit risk is
moderate.
[Financial report]
Age structure of matured trade receivables, which were not impaired
Item
31.12.2011
31.12.2010
Past due 0–30 days
710
2,114
119
710
102
39
48
84
980
2,947
More than one year
Total
All the items are impaired individually in the Company.
Exposure of trade receivables to the credit risk, by geographic region
Item
31.12.2011
31.12.2010
Domestic
6,726
6,864
Euro zone
618
411
84
40
Former Yugoslavia
Maximum credit risk exposure
Item
31.12.2011
31.12.2010
4,989
4,989
Investments in affiliates
Loans
Other countries
Total
13
7,524
7,360
Other receivables
1,470
1,284
Item
2,303
1,447
Non past due
16,386
15,093
Credit risk exposure for the items, which are not past due or impaired
Item
Gross amount
31. 12. 2010
Impairment
31. 12. 2010
6,287
-
4,414
-
710
0
2,114
-
4
718
9
106
4
190
151
More than one year
Total
4,989
100
13
6,544
4,414
Item
959
911
934
850
8,185
919
8,370
1,009
Changes in value adjustments as result of impairment of trade receivables
Other receivables
1,470
1,284
Balance at 1 January
2,303
1,447
Final write-off
15,406
12,146
Total
Impairment
31. 12. 2011
123
4,989
Trade receivables
Gross amount
31. 12. 2011
31.12.2010
Loans
31.12.2011
Investments in affiliates
Allowances in year
Reversal of impairment
Balance at 31 December
Credit risk exposure for the items, which are past due and are not impaired
Item
31.12.2011
31.12.2010
1,009
1,484
-219
-351
189
169
-60
-293
919
1,009
31.12.2011
31.12.2010
Trade receivables
980
2,947
Total
980
2,947
52
45
7,360
Aging of trade receivables
100
Trade receivables
Total
96
7,524
At 31 December 2011, total allowances for
receivables amounted to €919 thousand (2010:
€1,009 thousand). In 2011, the Company made
an allowance for receivables due from the parent
company in accordance with the compulsory
settlement of €176 thousand, which were finally
written off after the compulsory settlement was
confirmed. In total, €219 thousand of receivables
were finally written off, allowances of €189
thousand were made for receivables, and €60
thousand of impairments were reversed.
53
[Financial report]
Securities for trade receivables (in gross amounts, excluding adjustments of receivables)
Item
31.12.2011
31.12.2010
Secured receivables
1,312
1,108
Unsecured receivables
6,874
7,262
Total
8,185
8,370
Trade receivables are secured with Slovenian
and foreign insurance companies. Other credit
exposure items are not secured.
Interest rate risk
In 2011, Big Bang raised two long-term loans,
both of which are tied to the EURIBOR variable
interest rate; therefore, the operations are
exposed to interest risk.
Fair value sensitivity analysis for instruments
with fixed interest rate
The Company does not account for financial
assets with fixed interest rates at fair value
through the income statement; therefore, the
change of interest rates at the reporting date
would not affect the net profit or loss.
As in 2010, levels in interest rates were low in
2011. In the first half of the year, we witnessed
the growth of EURIBOR, which however slightly
dropped in the second half. Due to intensified
situation on financial markets, interest rates
are not expected to increase. In contrast,
the exposure to interest rate risk has been
decreasing on account of regular monthly
repayments of the existing loans. Management
thus assesses the interest rate risk exposure in
2011 as moderate.
Cash flow sensitivity analysis for instruments
with variable interest rate
On the reporting date, a change of interest rates
by 100 basis points would increase (decrease)
the equity and profit or loss by €20 thousand.
The analysis presumes all other variables
to remain unchanged. The analysis was not
carried out for 2010, since the Company did
not dispose of any financial instruments with
variable interest rates.
31.12.2011
Carrying amount
31.12.2011
Fair value
31.12.2010
Carrying amount
31.12.2010
Fair value
4,989
4,989
4,989
4,989
100
100
13
13
Operating receivables and other assets
8,994
8,994
8,644
8,644
2,303
2,303
1,447
1,447
-7,839
-7,839
-
-
-162
-162
-196
-196
Trade payables and other liabilities
-23,677
-23,677
-25,463
-25,463
Total
-15,292
-15,292
-10,565
-10,565
Loans
Bank loans with variable interest rate
Finance lease liabilities
54
attempts to limit and decrease inflation, the
management of the Company assesses that the
inflation exposure risk is low.
4.5. Insolvency Risk
Insolvency risk is the risk that the Company will
encounter problems in obtaining the finances
needed to fulfil its financial liabilities.
The Company has managed the indicated risk
with active liquidity management in order
to prevent the events of non-reconciled cash
inflows and outflows. Easier management and
balancing of the current liquidity also enables
constant inflow from retail buyers.
Sensitivity analysis
The Company generally uses the euro for its
transactions, and therefore a change in the U.S.
dollar would not have an important influence
on the Company’s equity or profit or loss.
The management assesses that the insolvency
risk exposure is low with regard to the indicated
protection measures and the current situation.
4.4. Inflation Risk
Since the Merkur Group uses the policy of
transferring increased purchase prices to the
selling prices, and since the non-EU states,
including the state in which our subsidiary
is located, are making strong and successful
The following tables present the contractual
maturities of financial liabilities, including the
estimated payments of interest and without
the influence of arrangements regarding offset.
Contractual maturities of non-derivative financial liabilities in 2011
Item
Carrying
amount
Contractual
cash flows
6 months
or less
6–12 months
1–2 years
2–5 years
100
108
103
0
1
4
7,541
7,541
7,283
64
64
129
Non-derivative financial assets
Loans
Fair value
Investments in subsidiaries
The fair value of financial assets and liabilities
does not deviate significantly from the carrying
amount. The only exception is investment
in affiliate, where the fair value cannot be
determined, since the Company is not listed on
the stock exchange.
Investment in affiliate is valued at the cost
model. The Company has no other investments;
therefore it does not disclose valuation levels.
4.3. Currency Risk
4.2. Market Risk
Item
[Financial report]
Trade receivables
Receivables due from others
1,453
1,453
1,453
-
-
-
2,303
2,303
2,303
-
-
-
11,397
11,405
11,142
65
65
132
-7,839
-8,670
-908
-1,290
-2,489
-3,982
-162
-171
-66
-40
-57
-8
-19,811
-19,811
-27
-
-
-
Total non-derivative financial assets
Non-derivative financial liabilities
Collateralized loans
Trade payables
-3,866
-3,866
-
-
-
-
Total non-derivative financial liabilities
Liabilities to others
-31,678
-32,517
-1,001
-1,330
-2,546
-3,990
Net as at 31 December 2011
-20,281
-21,112
10,142
-1,266
-2,481
-3,858
55
[Financial report]
Contractual maturities of non-derivative financial liabilities in 2010
Item
Carrying
amount
Contractual
cash flows
6 months
or less
6–12 months
1–2 years
2–5 years
Changes in intangible assets
Item
13
13
3
2
2
6
Cost
-
3,085
-2,318
767
-
767
Initial carrying amount
767
-
767
Additions
158
-
158
Amortisation
-384
-
-384
541
-
541
3,243
-
3,243
-2,702
-
-2,702
541
-
541
7,370
7,370
-
-
-
Receivables due from others
1,274
1,274
1,274
-
-
-
Carrying amount
1,447
1,447
1,447
-
-
-
Year 2010
10,104
10,104
10,094
2
2
6
Non-derivative financial liabilities
Liabilities to others
196
205
57
57
73
17
-21,449
-21,449
-21,449
-
-
-
Final carrying amount
-4,014
-4,014
-4,014
-
-
-
Total non-derivative financial liabilities
-25,267
-25,258
-25,405
57
73
17
Net as at 31 December 2011
-15,163
-15,153
-15,312
60
75
23
Cost
Accumulated amortisation
Carrying amount
5. Notes and Disclosures to the Balance
Sheet
For better transparency, the balance sheet
is published in a short format. Detailed
Year 2011
classification of individual items, and data and
information that are disclosed, are presented in
hereunder.
5.1 Intangible Assets
Intangible assets by types
Item
31.12.2011
31.12.2010
Intangible assets
356
541
Property rights (trademarks, rights and licenses)
325
541
31
-
Intangible assets being acquired
56
Total
-
7,370
Trade payables
Intangible assets being
acquired
3,085
Trade receivables
Property rights and software
-2,318
Accumulated amortisation
Total non-derivative financial assets
Non-derivative financial assets
Loans
[Financial report]
541
-
541
Additions
188
31
219
Amortisation
-404
-
-404
325
31
356
In 2011, our BOF trademark was entirely amortised;
therefore, the entire value of intangible assets
covers only the rights for the use of software.
In 2011, intangible assets reduced by 40%, entirely
as result of amortisation (the trademark is also
amortised due to its time determination of use).
5.2 Property, Plant and Equipment
Item
31.12.2011
31.12.2010
Property, plant and equipment
6,239
7,291
Land and buildings
4,519
5,405
Plant, machinery and equipment
1,720
1,886
57
[Financial report]
Changes in property, plant and equipment
Item
Property and
buildings
Plant, machines and
equipment
Fixed assets in acquisition
Total
Cost
9,639
5,595
3
15,236
Accumulated depreciation
-4,340
-3,575
-
-7,915
Carrying amount
5,298
2,020
3
7,321
5,298
2,020
3
7,321
Additions
1,043
584
-3
1,624
-937
-667
-
-1,604
Disposals and write-offs
0
-51
-
-51
5,405
1,885
0
7,291
Year 2010
Depreciation
[Financial report]
5.3 Long-Term Financial Investments in Subsidiaries
Item
31.12.2010
4,989
4,989
4,989
4,989
Long-term financial investments entirely refer to
the investment in the subsidiary Big Bang, d. o. o.,
Belgrade, and did not change in 2011.
5.4 Long-Term and Short-Term Loans
Item
Long-term loans
Long-term loans to companies
Value adjustment of long-term loans to companies
31.12.2011
31.12.2011
31.12.2010
4
8
2,703
2,703
-2,703
-2,703
4
8
Cost
10,682
5,386
-
16,068
Long-term loans to others
Accumulated depreciation
-5,277
-3,500
-
-8,777
Short-term loans
96
5
7,291
Short-term loans to companies
95
3
Value adjustment of short-term loans to companies
-
-3
Short-term loans to others
1
5
Carrying amount
5,405
1,885
-
Year 2011
Additions
5,405
1,885
-
7,291
335
512
-
847
Depreciation
-978
-652
-
-1,630
Disposals and write-offs
-243
-25
-
-268
4,519
1,720
-
6,239
In 2011, the Company purchased property,
plant and equipment in the amount of €847
thousand. The accounted depreciation included
in operating costs was €1,630 thousand in 2011
(2010: €1,604 thousand).
The Company has no mortgages/pledges on
own property.
Carrying amounts of property, plant and equipment obtained through finance lease
Item
31.12.2010
Property
277
286
Equipment
175
166
Total
453
452
58
Short-term loans to companies comprise the
short-term part of the long-term loan to the
subsidiary Big Bang d.o.o., Belgrade.
Long-term loans to companies include the loans
to Jezapo Holdings Ltd. (€1,400 thousand), HTC
DVA, d.o.o. (€573 thousand) and Merfin, d.o.o.
(€730 thousand). We have made complete
value adjustments for all these loans.
31.12.2011
In 2011, the Company obtained new equipment
through finance lease in the amount of €84
thousand.
Loans to others include loans to employees.
Such loans bear interest at the annual interest
rate equalling the recognised interest rate
effective during the contract conclusion, which
was between 2% and 3% in 2011. The maximum
loan repayment period is four years. Short-term
loans to others comprise the short-term part of
long-term loans to employees.
The acquisition refers to the purchase of
Company vehicles.
59
[Financial report]
Changes in loans
Item
Short-term loans
Long-term loans
Gross amount
[Financial report]
Security of loans
Item
31.12.2011
31.12.2010
Long-term loans
4
8
4
8
1,665
3
No security
-3
-
Short-term loans
96
5
1,662
3
No security
96
5
1,662
3
Loans
-
5,367
Attributed interest
-
41
Short-term maturity of long-term loans
5
-5
-1,662
-2,695
58
-
-58
-2,703
5
8
Adjustment
Carrying amount
Year 2010
Opening carrying amount
Repayments
Final write-off
Value adjustments for the period
Closing carrying amount
Gross value
8
2,711
Value adjustment
-3
-2,703
Carrying amount
5
8
Year 2011
5.5 Long-Term Operating Receivables
Item
31.12.2011
31.12.2010
Long-term operating receivables
258
-
Long-term operating receivables due from related companies
258
-
Long-term operating receivables refer to
receivables due from the parent company
Merkur d.d. after the compulsory settlement.
5.6 Deferred Tax Assets
Changes in temporary differences between the accounting gains and tax profit in 2011
Item
Opening balance for the
period
Recognised in income
statement
Year-end closing balance
Opening carrying amount
5
8
Loans
-
298
Receivables
-17
9
-8
-32
-
-32
-75
8
-67
Short-term maturity of long-term loans
96
-96
Inventory
Repayments
-5
-206
Provisions
3
-
Tax loss
-767
274
-493
96
4
Total
-891
291
-600
Final write-off
Closing carrying amount
60
In 2011, short-term loans decreased by €5
thousand, entirely as result of repayments. The
increase is a matter of reclassifying the shortterm maturity of long-term loans. In 2011, a
value adjustment of €3 thousand was made
for the loan to Slovensko nacionalno društvo
frankofonskega poslovnega foruma, which
represents the final write-off of this loan.
In 2011, long-term loans increased by €298
thousand as result of new loans (€295 thousand
of which is a loan to our subsidiary in Belgrade).
The decrease in the amount of €206 thousand
is a result of early repayment of long-term
loans, €200 thousand of which refers to the
repayment of the loan to our subsidiary, and
the remaining €96 thousand to the short-term
maturity of long-term loan.
Long-term deferred tax assets are calculated
based on temporary differences in the method
of liabilities from the balance sheet using a 20%
tax rate.
In the tax report for 2011, the Company
utilized deferred tax assets associated with
the provisions in the amount of €9 thousand,
impairment of receivables of €9 thousand,
and with the tax loss from the previous
period totalling €274 thousand. Moreover,
the Company newly recognised temporary
differences for deferred tax from provisions in
the amount of €1 thousand. At 31 December
2011, the balance of deferred tax assets was
€600 thousand. The Company therefore
recognised €291 thousand of temporary
differences in the income statement.
At 31 December 2011, the tax loss carryforward
was €2,645 thousand, and refers to the
established (and carried forward) tax loss from
2010.
61
[Financial report]
5.7 Inventory
5.10 Equity
Item
31.12.2011
31.12.2010
17,028
17,835
3
-
Products and merchandise
17,181
17,990
- merchandise in warehouses
4,764
3,245
12,416
14,569
Inventory
Material
- merchandise in stores
- merchandise in transit
Adjustments
Inventory includes merchandise in stores and
their respective warehouses, and merchandise
in stock in wholesale and customs warehouses.
At 31 December 2011, the balance of inventory
of merchandise was by 4.5% lower as compared
-
176
-156
-156
to the end of 2010.
The surplus and deficits in inventory established
during the year are recognised to the debit of
the cost of goods.
31.12.2011
31.12.2010
8,737
8,644
17
10
Short-term operating receivables and other assets
Advances for inventory
Short-term trade receivables
6,214
6,611
Short-term operating receivables due from subsidiaries
1,052
750
Short-term operating receivables due from others and deferred
expenses and accrued revenues
1,453
1,274
At 31 December 2011, the Company disclosed
operating receivables of €8,737 thousand,
exceeding those from 2010 by 1%.
A total of 21% trade receivables is secured.
5.9 Cash and Cash Equivalents
Item
Cash on hand
Redeemable deposit
Cash on accounts
62
The balance of cash at the end of 2011 was by
1.59 times higher as compared to the end of
2010.
Share capital
The Company’s share capital is entered at the
Ljubljana Local Court in the amount of €4,204
thousand, and did not change in 31 December
2011; the sole owner of the equity was Merkur,
d.d., Naklo.
Reserves
Company reserves are capital surplus
(subsequent payments of equity) and legal
reserves.
31.12.2011
31.12.2010
2,303
1,447
412
204
1,700
1,130
191
113
At 31 December 2011, capital surplus amounted
to €2,892 thousand. In 2011, their value did
not change. The total value of capital surplus
represents subsequent payments of equity
based on the Memorandum of Association.
Legal reserves, which amounted to €420
thousand on 31 December 2011, did not
change during the year.
Retained earnings
At 31 December 2011, retained earnings totalled
€1,062 thousand, and entirely represent the
profit of the year.
5.11 Financial Liabilities
Item
5.8 Short-Term Operating Receivables
Item
[Financial report]
31.12.2011
31.12.2010
Financial liabilities
8,001
196
Long-term financial liabilities
6,084
88
Bank loans
6,021
-
Finance lease
63
88
Short-term financial liabilities
1,917
108
Short-term part of bank loans
1,819
-
98
108
Short-term part of finance lease
Financial liabilities comprise long-term liabilities
to banks for loans and to lessors for finance lease
of business premises and equipment (vehicles).
The average maturity of finance lease liabilities
for vehicles is three years, and five years for bank
loans. Short-term financial liabilities comprise
the short-term part of financial lease for vehicles
and business premises, and of bank loans, which
fall due next year.
The interest rate for finance lease is tied to a
12-month EURIBOR, except for one, where it is
tied to a 3-month EURIBOR. The interest rate
for long-term loans is tied to a 3-month and
6-month EURIBOR and was between 5.29% and
5.49% at 31 December 2011.
Maturity of financial liabilities
Bank loans fall due in
31.12.2011
31.12.2010
Not more than one year
1,818
-
More than a year and not more than five years
6,021
-
Total
7,839
-
63
[Financial report]
Liabilities for assets in finance lease fall due in
31.12.2011
31.12.2010
Not more than one year
98
108
More than a year and not more than five years
63
88
161
196
Total
[Financial report]
5.13 Short-Term Operating Liabilities
Item
Short-term operating liabilities
Short-term operating liabilities based on advances
Short-term trade payables
5.12 Provisions
Item
31.12.2011
31.12.2010
Long-term provisions
349
8,855
Provisions for termination bonuses
349
355
-
8,500
Provisions for sureties given
Short-term operating liabilities to related companies
Short-term operating liabilities to others
Item
Provisions for termination
bonuses
Provisions for sureties given
Total
374
-
374
Provisions formed during the year
-
8,500
8,500
Provisions utilized during the year
-19
-
-19
355
8,500
8,855
0
355
8,500
8,855
Provisions formed during the year
7
-
7
Provisions utilized during the year
-13
-8,500
-8,513
349
0
349
64
Provisions for termination and jubilee bonuses
are formed for the estimated liabilities of
termination bonus payments for old-age
retirement, and jubilee bonuses on the balance
sheet date, discounted to the current value. The
liability was formed for the expected payments
and is based on actuarial estimate, which
included the following assumptions:
•Discount rate of 4.2%,
•Currently effective amounts of termination
and jubilee bonuses, determined in the
Company’s internal acts, or as laid down by
regulations,
•Actual turnover of employees by age groups,
•Mortality tables of the Slovenian population
between 2005-2007, and
•Growth of salaries as result of inflation
adjustment in 2.5% and due to career
promotion in the amount of 2%.
In 2011, the Company entirely utilized the
provision for sureties given to the managing
company in the amount of €8,500 thousand.
31.12.2010
23,677
25,463
331
373
19,784
21,374
27
75
3,535
3,641
- liabilities for unpaid salaries
715
609
- liabilities for interest
105
-
1,894
2,146
821
886
- liabilities to state institutions
- other liabilities
Changes in provisions
31.12.2011
At 31 December 2011, short-term operating
liabilities were by 7% lower than in the year
before. Trade payables represent 84%, while
liabilities to related companies account for only
0.1% of the total short-term operating liabilities.
Short-term liabilities to others include liabilities
for unpaid salaries, interest, liabilities to state
institutions, and other liabilities, among which
is also short-term deferred revenue (€358
thousand) and accrued costs and expenses
(€417 thousand). Short-term operating
liabilities to state institutions also comprise VAT
liabilities, which amounted to €1,746 thousand
(2010: €2,039 thousand).
5.14 Contingent Liabilities and Assets
Contingent liabilities
Item
31.12.2011
31.12.2010
Contingent liabilities
13,353
14,620
Guarantees, of which to:
13,353
14,620
- Group companies
13,253
14,470
- Other companies
100
150
Contingent liabilities of the Company refer to
sureties given to banks for the loans taken by
the parent company in the amount of €13,253
thousand and customs guarantee of €100
thousand.
65
[Financial report]
Sureties given to banks for loans raised by the parent company
Recipient of surety
Principal
31.12.2010
Repayments in
2011
Other securities
Attribution of
interest
Maximum
contingent liability
NLB*
9,670
3,468
3,000
29
6,231
NKBM
35,000
27,978
-
-
7,022
Total
44,670
31,446
3,000
29
13,253
*A loan of €3,000 thousand is, besides our surety, also pledged with an immovable property. The related company Mersteel, d.o.o., which is also
in the process of compulsory composition, guarantees for all loans as a joint and several surety.
On 9 February 2011, an Agreement about the
settlement method of two past due loans of
the parent company, for which the Company
is the surety, was signed with Nova Ljubljanska
Banka, d. d. (hereinafter “NLB”). In accordance
with the Agreement, the parent company will
return 60% of the principal within the financial
plan of restructuring (the first instalment was
settled on 31 December 2011), and 40% of the
principal was approved by NLB to the Company
on 30 September 2011 as a long-term loan in the
amount of €2,784 thousand, which was used to
repay the principal and interest. Moreover, the
Company settled the principal and interest of
€400 thousand by 30 September 2011.
On 31 March 2011, an Agreement about the
method of partial fulfilment of the surety
liability, which the Company as the surety has
for a loan to Merkur, d.d., totalling €35,000
thousand was signed with Nova KBM, d.d. On 31
March 2011, the receivable of Nova KBM, d.d.,
under the mentioned loan contract amounts
to only €13,300 thousand of the principal. In
accordance with the Agreement, the Company
repaid a part of its surety liability (40% of the
principal), i.e. the principal and interest in the
amount of €5,642 thousand with the approved
loan of Nova KBM, d. d. Within the plan of
financial restructuring, the other 60% of the
principal will be repaid by Mersteel, d.o.o. and
the parent company, which already settled the
first instalment on 31 December 2011.
Contingent assets
[Financial report]
6. Notes and Disclosures to the Income Statement
6.1. Net Sales
Item
Slovenia
2011
Slovenia
2010
Foreign
market
2011
Foreign
market
2010
Total Company
2011
Total Company
2010
Net sales
103,720
116,803
11,172
5,022
114,892
121,825
101,585
114,570
10,016
3,939
111,601
118,509
2,135
2,233
1,156
1,083
3,290
3,316
Revenue from the sales of merchandise
Revenue from the sales of services
6.2. Costs by Primary Types
Item
2011
2010
22,706
23,364
955
911
10,836
11,410
Labour costs
8,035
8,364
Amortisation/depreciation costs
Costs by primary types
Costs of material used
Costs of services
2,034
1,987
Long-term provisions
7
-
840
692
In 2011, costs decreased by 3% compared to
the year before as result of decreased costs of
services. All other types of costs increased in
the same period.
Costs of material used by types
31.12.2011
31.12.2010
2011
2010
Contingent assets
6,163
-
Costs of material used
955
911
Recourse
6,163
-
Electricity costs
482
449
Fuel costs
Item
66
Contingent assets refer to recourse to related
companies Merkur d.d. and Mersteel d.o.o.
for payments of surety liabilities. Recourse
to the Company Merkur d.d. is expressed in
the amount that corresponds to the plan of
financial restructuring. We called the company
Mersteel d.o.o. as a joint and several surety to
compensate the pro rata part of our payments
in accordance with the Code of Obligations.
Item
175
159
Costs of office material
57
59
Other costs of material
241
244
67
[Financial report]
Costs of services by types
Item
Costs of services
Costs of transportation to buyers and other costs of transportation
Advertisement, propaganda, and participation at fairs
2011
[Financial report]
6.3. Revaluation and Other Operating Expenses
2010
Item
2011
2010
Revaluation operating expenses
507
199
256
45
49
-
202
154
10,836
11,410
312
302
2,547
2,913
Write-downs in property, plant and equipment to the recoverable amount
Lease for assets
4,309
4,339
Write-downs and adjustments of inventory to the realisable value
Maintenance costs
1,270
1,232
Impairments and write-downs in operating receivables
282
316
83
125
Reimbursement of labour related costs to employees
108
124
Costs of credit card sales, payment transactions, bank services, and customs duties
676
826
Insurance premiums
135
95
16
30
Costs of telecommunication and postal services
Costs of public utility services, water rates and sewage costs
Hospitality
Costs of education
Costs of other services
33
18
1,064
1,091
Labour costs by types
Item
2011
2010
Labour costs
8,035
8,364
Payroll
Revaluation operating expenses in 2011
increased by 154% compared to 2010, primarily
due to write-downs of property, plant and
equipment as result of the removal of branch
office and return of leased business premises.
Write-downs to the realisable value refer to
the adjustments of inventories associated with
damaged, deteriorated or destroyed goods.
Impairment or loss related to operating
receivables in the total amount of €202
thousand is the result of an impairment of
receivables on account of a doubt about their
realisation. Impairments of €190 thousand
refer to receivables due from the parent
company, which were impaired and written off
in accordance with the confirmed compulsory
settlement.
Item
2011
2010
5,818
6,005
Pension insurance costs
590
603
17
8
Cost of other insurances
424
438
17
8
Holiday allowance
317
318
Commuting allowance
414
410
Meal allowance
444
451
27
139
Other costs
Item
2011
2010
Amortisation/depreciation costs
2,034
1,992
Depreciation of property, plant and equipment
1,630
1,607
- depreciation of investments in property – buildings
978
869
- depreciation of equipment and small tools
652
738
Amortisation of intangible assets
404
384
2010
840
692
Contribution for building land use
190
196
WEEE fee
576
350
74
146
68
Item
2011
2010
131
347
7
12
Income from recognised receivables
95
290
Other operating income
30
45
Other operating income
Other operating income decreased by 62%
compared to the same period of 2010. 72% of
all the Company’s operating income represents
income from realised receivables. Other
operating income of the Company includes
received damages, refunds of overpaid fees
and charges, and cent rounding, etc.
2011
Profit from the sale of property, plant and equipment
Amortisation/depreciation costs by types
Item
6.4. Other Operating Income
69
[Financial report]
6.5. Financial Revenue and Expenses
6.6. Other Expenses
Financial Revenue
Item
Financial revenue
Interest revenue
2011
2010
277
595
74
224
Net exchange rate gains
6
8
Other financial revenue
197
363
In 2011, the Company’s financial revenue
was €318 thousand below the result in the
previous year, of which the largest amount was
represented by allowances for sureties given to
related companies.
Financial Expenses
Item
2011
2010
Financial expenses
889
3,246
Interest expenses
888
481
Net expenses from exchange rates
1
5
Impairment loss – loans
-
2,760
70
In 2011, financial expenses significantly
decreased, primarily as a result of their
abnormally high amount in 2010 due to
impairments of loans to companies that were
in financial problems.
Financial expenses for interest in the amount of
€888 thousand refer to paid interest recognised
under the concluded loan contracts (including
finance lease), and interest for overdraft
utilization. Compared to 2010, these increased
as result of taking long-term borrowings to
repay a part of the surety liabilities for the
parent company’s loans. The interest rate for
[Financial report]
finance lease is tied to a 12-month EURIBOR,
except for one, where it is tied to a 3-month
EURIBOR. Interest rates in concluded loan
contracts and overdrafts were between 5.9%
and 6.8%. The interest rate for long-term loans
is tied to a 3-month and 6-month EURIBOR and
was between 5.29% and 5.49% at 31 December
2011.
Net expenses from exchange rates totalling €1
thousand refer especially to negative exchange
rates in respect of the USD.
Other expenses of €289 thousand refer to
under-recognised provisions for sureties given
to the managing company, which were formed
in 2010 in the amount of €8,500 thousand (see
also Note 5.13. Contingent Liabilities).
6.7. Corporate Income Tax
Liability for corporate income tax is established
based on the Corporate Income Tax Act
(ZDDPO-2), effective as of 1 January 2007.
Corporate income tax
Item
2011
2010
Deferred tax expense/revenue
-291
710
Total tax expense in income statement
-291
710
Effective tax rate
Item
2011
2010
Earnings before tax
1.353
-6.718
Tax rate
20%
20%
Expected income tax at 20% tax rate
271
-1.344
Expenses not recognised for tax purposes
Tax base I
Change of tax base
Tax base II
Tax relief
Tax loss offsetting
122
2.879
1.475
-3.839
46
5
1.522
-3.834
-153
-
-1.369
-
Tax base III
-
-
Tax loss
-
-3.834
Income tax
-
-
At 31 December, the tax loss that was not
carried forward amounts to €2,645 thousand,
and refers to the established (and not carried
forward) tax loss from 2010.
71
[Financial report]
[Financial report]
7. Other Notes
7.1 Transactions with Related Entities
The Company has three groups of related
entities: the management staff and the parent
and subsidiary company.
The management staff comprises the Managing
Director and the Procurator.
Gross receipts of the Management and employees under individual contracts
Recipient
Number of
members
Fixed part of
receipts
Variable part
of receipts
Other receipts
Total gross
receipts
Total net
receipts
1
2
3
5
6=2 do 5
7
Breda Terglav
1
80
-
53
134
66
Aleš Ponikvar
1
45
Gross structure
Employees under
individual contracts
9
88
-
2
90
75%
0%
25%
100%
285
-
31
315
Other receipts comprise holiday allowance,
benefits in respect of managerial insurance,
company car allowance, and meal and
commuting allowance.
144
Shares of the company Merkur, d.d., owned by
related natural persons at 31 December 2011
At 31 December 2011, no related natural
persons owned any of the shares of Merkur, d.d.
Company’s transactions with related entities in 2011
Item
Sale of merchandise
Purchase of merchandise
Purchase of property and other assets
Service rendering
Used services
Charged interest
Received interest
Receivables
Liabilities
Loans
Sureties given
Merkur, d. d.
7,204
72
-
4
161
0
198
1,226
27
-
13,253
Parent company
7,204
72
-
4
161
0
198
1,226
27
-
13,253
Big Bang, d. o. o., Belgrade
117
-
-
23
-
-
-
84
-
95
-
Total subsidiaries
117
-
-
23
-
-
-
84
-
95
-
7,321
72
-
27
161
0
198
1,310
27
95
13,253
Sale of merchandise
Purchase of merchandise
Purchase of property and other assets
Service rendering
Used services
Charged interest
Received interest
Receivables
Liabilities
Loans
Sureties given
Merkur, d. d.
8,100
3,194
259
114
467
0
436
715
75
-
44,670
Parent company
8,100
3,194
259
114
467
0
436
715
75
-
44,670
Total
Company’s transactions with related entities in 2010
Item
Big Bang, d. o. o., Beograd
30
-
-
21
-
-
2
35
-
-
-
Total subsidiaries
30
-
-
21
-
-
2
35
-
-
-
-
-
-
-
-
-
29
-
-
700
-
Merfin, d. o. o.
Total other related companies
Total
72
-
-
-
-
-
-
29
-
-
700
-
8,130
3,194
259
135
467
0
467
750
75
700
44,670
73
[Financial report]
STATEMENT BY THE MANAGEMENT
7.2 Subsidiary
Big Bang, d. o. o., Beograd
Item
Country
Ownership share
from year
2010
Serbia
2005
100%
4,989
-679
2011
Serbia
2005
100%
4,989
-532
The subsidiary in Belgrade finished the year
2011 with a loss of €532 thousand, which is 22%
lower than the year before. The main reason is
a relatively high fixed operating cost (rent and
related costs), not particularly high market
demand due to the economic situation, and
negative currency differences. By reducing the
surface area of the store at the end of the year
and consequently lowering costs, we plan to
generate a positive operating result. We have
already received the first positive results after
the reduced surface area of the store.
Ownership share Investment value at
in %
the year-end
Profit or loss of the
Company
7.3 Audit Fees
Pursuant to Article 57 of the Companies Act
(ZGD-1), the Company must be audited. For
2010, the Company concluded a contract for
auditing financial statements and annual report
for the 2011 business year with the company
Deloitte revizija, d.o.o., in the amount of €16
thousand. The Annual Report was confirmed
on 23 March 2012.
8. Significant Business Events after the Balance Sheet Date
74
[Financial report]
On 16 February 2012, the Management of the
Company welcomed a new member, Tadej
Jurkovič, to the position of Sales Director.
His task will be to take over the sales sector,
managing sales in all channels.
There were no other events that would
significantly affect the financial statements or
require additional disclosures to the annual
report.
The Company’s management hereby confirms the financial statements of the company Big Bang, d.o.o.,
for the year ended 31 December 2011.
The management confirms consistent use of appropriate accounting policies and that accounting
estimates were made following the principles of prudence and good management and that the Annual
Report presents a true and fair view of the Company’s financial position and the results of its operations
for the year 2011.
The management is also responsible for appropriate accounting, adoption of suitable measures to
secure the property and other assets, and it confirms that the financial statements together with the
notes are in accordance with the relevant legislation and the IFRS as endorsed by the EU.
The Company’s management is familiar with the content of the parts of the Annual Report of Big Bang,
d.o.o., for the year 2011 and therefore also with the entire Annual Report of Big Bang, d.o.o., for 2011. The
Company management agrees with them and confirms them with signature.
Ljubljana, 5 March 2012Aleš Ponikvar
Head of Division
In the first quarter of 2012, we moved our
central warehouse from Ljubljana to Celje. This
was the first step of our logistics strategy, which
includes our own logistics centre to ensure
supply to customers and our own retain units via
our own logistics system. The new warehouse is
entirely equipped in terms of infrastructure and
started operating on 20 February 2012.
75
[Financial report]
INDEPENDENT AUDITOR’S REPORT
76
77
PRESENTATION OF THE COMPANY WITH ITS SUBSIDIARY
Identity card
78
Identity card of subsidiary
Name of company: Big Bang, trgovina in storitve, d. o. o.
Short name:
Registered office:
Web address:
Phone number:
Fax number:
E-mail:
Identification number:
Registration number:
Principal activity:
Entry in the register of companies:
Share capital:
Transaction accounts:
Business premises in m2:
Big Bang, d. o. o.
Šmartinska cesta 152, 1000 Ljubljana, Slovenia
www.bigbang.si
(01) 309 3700
(01) 309 3760
[email protected]
SI18224326
5464943
G/47.430: Retail trade in electrical household
appliances, TV and Radio
District Court in Ljubljana, input number 1/11417/00
€4,204,400
NLB, d. d.: 02923-0254441325
SKB, d. d.: 03171-1007727196
Own: 402 m2
Name of company:
Registered office:
Phone number:
Fax number:
E-mail:
Identification number:
Registration number:
Principal activity:
Entry in the register of companies:
Share capital:
Owner:
Director:
Big Bang, d. o. o., Belgrade
Partizanske avijacije 4, 11070 Belgrade
+381 (0)1 122 00 640
+381 (0)1 122 00 641
[email protected]
103974613
20065630
51430 Retail trade in electrical household appliances,
TV and Radio
Input number BD 84785/2005
€4,988,754
100% owner of company’s capital is Big Bang, d. o. o.,
Šmartinska cesta 152, 1000 Ljubljana
Aleksandra Memon
Rented: 37,821 m2
Owner: 100% owner of Company’s capital is Merkur, d. d.,
Cesta na Okroglo 7, 4202 Naklo
Managing director: Aleš Ponikvar
79
Big Bang, d.o.o., Šmartinska 152, SI - 1000 Ljubljana, Slovenia,
Tel.: + 386 (0)1 309 37 01, www.bigbang.si

Big Bang, d.o.o., Ljubljana

Transcription

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