consolidated annual report of merkur group for the financial year 2010

Transcription

ANNUAL REPORT
OF MERKUR GROUP
FOR THE FINANCIAL
YEAR 2010
Annual Report of Merkur Group 2010
CONSOLIDATED
ANNUAL REPORT
OF MERKUR GROUP
FOR THE FINANCIAL
2
YEAR 2010
CONSOLIDATED
4
BUSSINEESS REPORT
5
Merkur Group
6
Most Significant Events in Merkur Group in 2010
9
Most Significant Events in Merkur Group, d. d., after the 2010 Financial Year
15
Report of the Management Board Chairman
18
Supervisory Board Report
20
Shares and Ownership Structure
23
Social Responsibility
24
Governance and management system
25
Employees
26
Analysis of Business Performance
28
The Development Strategy
31
CONSOLIDATED ACCOUNTING REPORT OF MERKUR GROUP
FOR THE FINANCIAL YEAR 2010
34
Audited Financial Statements of Merkur Group
35
Notes to the Audited Consolidated Financial Statements of Merkur Group
40
Statement of Management Responsibility
114
Auditor’s Report
115
COMPANIES IN MERKUR GROUP
118
POSLOVNOREPORT
POROČILO
BUSINESS
CONTENT
Merkur Group
THE BIG BANG DIVISION
THE MERSTEEL DIVISION
The common denominator of all companies is the offer of top-quality technical products and services.
The company was founded in 1896 and became a successful international Merkur Group with more than 3,500
employees.
We are the leading Slovenian provider of quality products for home, do-it-yourself goods, electro-installation, metal
and construction materials, and technical products for professionals, and we keep developing and strengthening
our Merkur, Mersteel and Big Bang brands on nearby foreign markets. We aim to exceed our customers’ expectations
with a whole range of extra services.
Half of Merkur Group’s sales revenue comes from wholesale, while end users know us best for our modern, wellstocked and user-friendly shopping centers.
Our goal for all companies of Merkur Group is to grow further while not losing touch with our main goal: to create
satisfaction among buyers, business partners and employees.
Merkur Group comprises three divisions:
6
Merkur Division is the largest seller of products for home, garden and
workshops, for end users, companies and craftsmen.
Mersteel Division achieved a dominating market share in the field of
sales and procurement of metal products and steel service centers.
Big Bang Division is a leading specialist for audio, video and computer
equipment, telecommunications, household appliances, music and
games.
THE MERKUR DIVISION
Mersteel, d. o. o.,
Naklo
Merkur, d. d.,
Naklo

Mersteel, d. o. o., Croatia

Mersteel, d. d. o., Serbia

Mersteel Profil, d. o. o., Serbia

Intermerkur, d. o. o., Bosnia and Herzegovina

Merkur Makedonija, d. o. o.

Merkur Ml Handels, GmbH, Germany
(in bankruptcy proceedings since 2 October 2010)

Merkur International Praha, spol. S. r. o., Czech Republic
(in bankruptcy proceedings since 12 May 2011)

Železokrivnica SCT – Merkur, d. o. o., Ljubljana
(in bankruptcy proceedings since 14 March 2011)
Big Bang, d. o. o.,
Ljubljana

Big Bang, d. o. o., Serbia

Merkur Hrvatska, d. o. o., Croatia

Merkur Nekretnine, d. o. o., Croatia

Merkur International, d. o. o., Serbia

Merkur Čelik, d. o. o., Serbia

Intermerkur – Nova, d. o. o., Bosnia and Herzegovina

Merkur, d. o. o., Montenegro

Perles Merkur Italia, s. r. l., Italy
(in voluntary liquidation proceedings since 24 August 2010)
Mission
We provide satisfaction to our customers by offering them quality products and excellent advice.
Vision
We will become the market leader in Southeast Europe in the sale of products for home, DIY goods, construction,
electro-installation and metal materials and technical products for professional use.
Merkur Group Values
The key values of Merkur Group’s modern and flexible organizational culture are employees’ creativity, loyalty and
enthusiasm. We carry on the 115-year tradition of success by adjusting to changes in the environment, with the ability
to find and exploit market opportunities, and with the desire for constant development.
The Merkur Group is an international group of trade companies. It comprises the Merkur, Mersteel and Big Bang
divisions together with 19 companies in 8 countries, Merkur and Big Bang sales centers, franchise stores, online stores,
and state of the art wholesale warehouses and Mersteel steel service centers.
Merkur Group Companies’ Product Portfolio
Most Significant Events in Merkur Group in 2010
Merkur Group’s versatile product portfolio comprises over 900 product groups with over 150,000 products. Groups of
products are combined in the following strategic programs:
Construction materials and wood: cement and lime, bricks and roofing, insulation materials, drywall systems,
products for the garden, agriculture and forestry, wood and wooden products, doors and windows, wall panels and
flooring.
Tools and hardware: locks, fittings and fasteners, power tools and accessories, grinding materials, tools and
accessories, measuring devices, lifting and handling equipment, hand tools, industrial rubber products, protective
clothing and equipment.
Electro and installation materials: electro-installation materials, lighting equipment, wires and cables, switching
and protection devices, energy-related equipment, plumbing and fittings, tiles, bathroom ceramics and equipment,
wellness program, heating, ventilation and air-conditioning systems, other installation and electro materials.
Consumer goods: audio and video equipment, small household appliances, big household appliances, heating
appliances, kitchen utensils, office supplies and personal computers, telecommunication equipment, gardening
program, agricultural and forestry program, other consumer goods.
Chemical and Paper Products: paint and chemical products, façade systems, industrial chemicals, plastic
granulates, printing paper and materials, packaging materials.
Value Added of Own Private Labels
8
Private labels BIVA, MTECH and MQ, which are managed by the Merkur Division, are gaining importance in the Merkur
Group. BOF is meanwhile a brand of the Big Bang Division. Private labels offer the best quality in their price range.
They are a synonym for products matching the products and brands of established manufacturers in quality, while
having more affordable prices. Private labels are aimed at expanding and upgrading the existing product portfolio.
Our vision is to bring high quality and esthetics closer to all consumers.
EVENTS RELATED TO THE COMPULSORY SETTLEMENT PROCEEDINGS
Decision on the Insolvency of Merkur, d. d.
At its meeting on 16 September the management adopted a decision on the insolvency of Merkur, d. d. Based
on the re-audited annual report for 2009, financial statements from 30 June 2010, and documents produced by
relevant support offices and consultants, the Management Board estimated that Merkur, d. d., met all the criteria for
declaring insolvency as determined in Article 14 of the Financial Operations, Insolvency Proceedings and Compulsory
Dissolution Act, which defines long-term insolvency. The loss in that year and the losses brought forward have
amounted to one half of the share capital and could not be covered with the profits brought forward or the reserves.
The decision on insolvency is part of Merkur’s reorganization plan and presents legal protection of the company’s
assets and the creditors’ receivables.
Decision on the Insolvency of Mersteel, d. o. o.
On 15 September 2010, the management of Mersteel, d. o. o. established that Mersteel, d. o. o. fulfills the criteria for
declaring insolvency as determined in Article 14 of the Financial Operations, Insolvency Proceedings and Compulsory
Dissolution Act which defines long-term insolvency. The loss in that year and the losses brought forward have
exceeded one half of the share capital and could not be covered with the profits brought forward or the reserves.
Management Board of Merkur, d. d., Files the Financial Restructuring Plan in Court
On 26 October 2010 and within the deadline set by the court, Management Board of Merkur, d. d., filed the Financial
Restructuring Plan in court. The Supervisory Board approved the plan in the session held on the same day.
In the last weeks before that, the Management Board of Merkur, d. d., harmonized the Financial Restructuring Plan
with the banks, shareholders, creditors, suppliers and subsidiaries. The Financial Restructuring Plan of Merkur, d. d.,
contains the following key elements:
• A capital injection for Merkur, d. d., in the amount of at least EUR 85 million, which will be performed by converting creditors’ receivables into equity. This means that the creditors’ receivables will be converted into equity of Merkur, d. d. The price per share is EUR 57.5 for ordinary (unsecured) creditors, and EUR 40 per share for creditors with the right to separate settlement (secured).
• The part of receivables of unsecured creditors, which the creditors do not choose to convert, will be evenly paid in the extent of 60% over the next 5 years.
Management Board of Mersteel, d. o. o., Files the Financial Restructuring Plan in Court
According to the deadline set by the court, Mersteel, d. o. o., management filed the Financial Restructuring Plan in
court on 28 October 2010. It proposes the 30% repayment of the receivables to creditors whose receivables are not
secured, in the next 54 months. Creditors with the right to separate settlement whose receivables are secured will get
their receivables paid in full.
Literally since its beginning Mersteel felt he impact of an extreme global drop in the field of metallurgical industry,
and that was also reflected in the business results of the company and the division. These results were also the reason
Mersteel began to implement the recovery plan, which includes the company reorganization, focus on the key
programs, and lowering the operating costs. After establishing the insolvency of parent company Mersteel, d. o. o.,
Naklo, Mersteel management began to compile the documents necessary for launching the process of compulsory
settlement. Just like Merkur, in order to have a fresh start, Mersteel needs fresh financial assets in the amount of at
least EUR 15 million. Mersteel looked for solutions with banks as well as potential new strategic partners that would
enter the ownership structure of Mersteel. The compulsory settlement was proposed for parent company Mersteel,
d. o. o. but not for its subsidiaries.
Metal products: sheet metal, stainless sheet metal, girders and sections, welding and technical materials, steel rods
and bars, wires, pipes, tool steels, reinforcing steel and mats, non-ferrous metal products.
The Court Issues a Decision on Launching Compulsory Settlement Proceedings in Merkur, d. d.
Merkur Gets the Syndicated Loan
On 3 November 2010, the Kranj District Court issued a decision on launching the compulsory settlement proceedings.
The decision meant that we successfully passed a significant milestone in saving Merkur. The presented Financial
Restructuring Plan provides legal protection for all the creditors and even repayment of due debts in a transparent
way. This was also provided by Ladislav Hafner, a receiver appointed by the court, who monitored and approved all the
transactions of Merkur, d. d., throughout the compulsory settlement proceedings. All important documents, including
the Financial Restructuring Plan, are published on the AJPES website under the tab with published decisions and
documents issued in insolvency proceedings. The AJPES website also contains all other notifications related to the
compulsory settlement proceedings.
On 28 December 2010, the Management Board of Merkur, d. d., signed the eagerly awaited approval for a EUR 35
million syndicated loan. The approval of the loan is one of the key elements of the Financial Restructuring Plan.
Merkur should start drawing the loan in the first weeks of 2011, mostly for purchasing goods to provide a quality
range of products in its retail network in 2011. The banks will monitor the drawing of the loan and fulfillment of the
set goals annually until 2016, when the loan will be repaid.
The Court Issues a Decision on Launching Compulsory Settlement Proceedings in Mersteel,
d. o. o.
Agreement on Terminating Employment Agreement with Goran Čelesnik
Merkur Gets Loan for Purchasing New Stock
10
On 11 November 2010, the Management Board of Merkur, d. d., received a proposal from 15 banks, which would give a
EUR 35 million syndicated loan to Merkur in the same month so that it could purchase new stocks and refill the shelves.
On 15 November 2010, the proposal was first discussed by the creditors’ committee, which the court appointed in
the compulsory settlement proceedings. The loan also requires a court’s approval, because Merkur’s Management
Board is not allowed to manage any transactions independently during the compulsory settlement proceedings. In
the Financial Restructuring Plan, the Management Board set the minimum amount of the loan required to revive the
operations at EUR 40 million. After receiving EUR 35 million from the banks, the Management Board would try to get
the remaining EUR 5 from other sources. Getting the syndicated bank loan presented the second step necessary to
successfully conclude the compulsory settlement proceedings in Merkur.
The Supervisory Board Approves the Loan Contract
On 24 November 2010, the Supervisory Board approved the loan contract between Merkur and the banks, under
which Merkur would get a EUR 35 million syndicated loan earmarked solely for purchasing products and covering
costs related to the purchase. In the following days, contracts were signed with all 11 banks participating in the loan.
The banks must follow internal rules upon signing the contract and the appropriate internal bodies must examine it,
so the date when Merkur would receive the funds has not been set yet. The loan is intended for purchasing goods and
providing an appropriate range of products in Merkur’s sales centers also after the New Year season.
Payments to Former Merkur and Mersteel Employees
On 28 December 2010, Merkur and Mersteel paid out severance pay to former employees based on the approval
by receivers Ladislav Hafner and Katarina Benedik. In Merkur, receiver Ladislav Hafner also approved the payment of
compensations, wages and compensations for wages; in Mersteel, receiver Katarina Benedik approved the payment of
severance pay and late payment interest.
After the parliament supported the authentic interpretation of a part of the Financial Operations, Insolvency
Proceedings and Compulsory Dissolution Act in a 57-0 vote at an extraordinary session on 23 December 2010, and
the act was published in issue 106 of the Official Gazette of the Republic of Slovenia on 27 December 2010, receivers
in both companies approved the payment. According to this interpretation, the unpaid severance pay to workers laid
off before the compulsory settlement preferential receivables. Merkur paid EUR 453,000 gross to 50 former employees,
EUR 10,900 of which was spent on compensations, wages and compensations for wages. 65 of former employees of
Mersteel got EUR 335,000 gross in total.
At the extraordinary session on 22 March 2010, the Supervisory Board approved the agreement on consensually
terminating the employment agreement with Management Board member – Director of Commerce Goran
Čelesnik. On 1 April 2010, his tasks were taken over by Mersteel Division director Gregor Krajnik, who was however
not appointed a Management Board member. After that, the management Board of Merkur, d. d., comprised three
members: Bine Kordež, Milan Jelovčan and Marjan Smrekar. On 1 April 2010, Darko Gregorič, the director of Logistics
in Mersteel Division, took over as the director of Mersteel Division.
New Supervisory Board Appointed
At the 21st general meeting on 23 June 2010, all shareholders of Merkur, d. d., unanimously supported the proposal
to appoint a new Supervisory Board, after the members of the existing Supervisory Board tendered their resignations.
Matevž Slapničar, the Risk Management Office Director at Gorenjska Banka, d. d., and Antonija Pirc, the Strategic
Controlling Director at Sava, d. d., were appointed as representatives of the shareholders, with Slapničar becoming
the new Supervisory Board chairman. Ana Hochkraut, the chairwoman of Merkur’s Workers’ Council, was appointed
the workers’ representative in the Supervisory Board.
Former Management Board Chairman’s Term Ends, New Management Board Chairman and
Members Appointed
The new Supervisory Board held its first session immediately after the General Meeting, on 23 June 2010. They
approved the proposal filed by Albin Kordež on consensually terminating his term as the chairman of the
Management Board on 1 July 2010, and appointed Bojan Knuplež, the director of Bing Bang, the new Management
Board chairman for the term from 1 July 2010 to 1 July 2015. On 12 July 2010, the Supervisory Board appointed three
new Management Board members of Merkur, d. d., for the term from 15 July 2010 to 1 July 2015: Blaž Pesjak was in
charge of finance, investments and controlling, Rok Ponikvar of procurements, sales and logistics, and Uroš Zajc of
marketing, product portfolio and development. Marjan Smrekar, the workers’ director, remained a member of the
Management Board.
New Workers’ Representative in the Supervisory Board
At the 3rd regular session of the Workers’ Council, held in Naklo on 22 July 2010, the workers elected a new workers’
representative to the Supervisory Board of Merkur, d. d. All 16 members of the Workers’ Council voted, and they
elected Peter Fratnik with over 50% of all cast votes.
Management Board Chairman Bojan Knuplež Dies
On the evening of Thursday, 23 September 2010, Management Board Chairman of Merkur, d. d., Bojan Knuplež passed
away at his home. The remaining four members of the Management Board kept their full mandate and continued
performing the work necessary to revive Merkur’s operations.
On 5 November 2010, the Kranj District Court issued a decision on launching the compulsory settlement proceedings.
The decision meant that the company successfully passed a significant milestone in saving Mersteel. The presented
Financial Restructuring Plan provided legal protection for all the creditors and even repayment of due debts in a
transparent way. This was also provided by Katarina Benedik, a receiver appointed by the court, who monitored and
approved all the transactions of Mersteel, d. o. o., throughout the compulsory settlement proceedings. All important
documents, including the Financial Restructuring Plan, are published on the AJPES website under the tab with
published decisions and documents issued in insolvency proceedings. The AJPES website also contains all other
notifications related to the compulsory settlement proceedings.
PERSONNEL CHANGES
On 29 September 2010, the Supervisory Board of Merkur, d. d., debated the half-year report and talks with the banks,
and adopted decisions regarding the management of the company after the sudden death of Bojan Knuplež. The
remaining four members of the Management Board kept their full mandate and continued performing the work
necessary to revive Merkur’s operations. The Supervisory Board appointed the Management Board member in
charge of finance, investments and controlling Blaž Pesjak as temporary Chairman of the Management Board. The
Management Board’s priority is drafting the Financial Restructuring Plan.
OTHER EVENTS
Letter of Intent on Collaboration with the Mercator Group
12
On 19 October 2010, Iskratel, d. o. o., H&R, d. d., and GBD, d. d., received payment from the pledged securities in Merkur
owned by Merfin, d.o.o. With this, Merfin’s stake in Merkur, d. d., decreased by 202,729 shares (from 58.26% to 42.81%).
Iskratel, d. o. o., got 99,383 shares or 7.57% of votes in Merkur, d. d. H&R, d. d got 58,600 shares or a 4.46% voting power
in Merkur, d. d. GBD, d. d., got 44,746 shares or a 3.41% voting power in Merkur, d. d. These companies did not hold a
stake in Merkur, d. d, before this transaction.
On 4 November 2010, Ananke Handels und Beteiligungs Gmbh received payment from Merkur’s pledged securities
owned by Merfin, d. o. o. It acquired 328,145 shares or 25% of votes in Merkur, d. d., while Merfin’s stake in Merkur, d. d.,
decreased from 42.81% to 17.81%. Ananke Handels und Beteiligungs Gmbh did not own shares in Merkur, d. d., before
this transaction.
On 24 November 2010, Merfin, d. o. o., decreased its stake in Merkur, d. d., from 17.81% to 11.71%. On the same day ML
Inženiring, d. o. o., decreased its stake in Merkur, d. d., by 9,060 shares (from 0.69% to 0.00%). On 24 November 2010,
Banka Koper, d. d., acquired 89,223 shares or 6.80% of votes in Merkur, d. d. After the transaction, Banka Koper has
165,488 shares or 12.61% of votes in Merkur, d. d.
On 5 May 2010, Merfin, d. o. o., the majority owner of Merkur, d. d., and Mercator, d. d., signed a letter of intent on
including Merkur in the Mercator Group. With this, several procedures were launched, including due diligence in
Merkur. According to plans, the Merkur Division would be excluded from the Merkur Group, and would be owned by
Mercator, d. d. Mercator would preserve the Merkur brand, and merge Merkur and Mercator’s entire technical sales
range under this name.
On 21 December 2010, Salonit Anhovo, d. d., received payment from Merkur’s pledged securities owned by Merfin,
d. o. o. It acquired 38,000 shares or 2.90% of votes in Merkur, d. d., while Merfin’s stake in Merkur, d. d., decreased from
11.71% to 8.81%. Before this transaction, Salonit Anhovo, d. d., did not own shares in Merkur, d. d.
At the end of June 2010, with the banks’ support and after an agreement between Merkur’s owners and the
Management Board, the option in which the Merkur Group preserves its integrity upon acquiring additional financial
resources, proved the best solution for the future of Merkur Group and its business partners. The problems arose
from the lack of liquid assets and consequently a worse supply. The sales in Merkur Group in the first half of 2010
dropped by a third compared to the previous successful years. Big Bang Division continued to operate as usual
even in rough conditions while Merkur and Mersteel divisions could, taking into account the positive signals from
the market, immediately ensure the growth in sales after acquiring the necessary financial resources. Based on the
decision of creditor banks to support Merkur’s integrity and not to sell some of its parts Merfin and Mercator made a
deal to stop all activities related to the strategic integration of Mercator and Merkur on 23 June 2010, because given
the new facts the strategic alliance as foreseen in the letter of intent, was no longer possible.
New Sales Center and Warehouses
Liquidation of Kovinotehna, d. o. o.
Based on the resolution of the founder, the Celje District Court issued a decision on 8 September 2010 on the criteria
for deleting Kovinotehna, d. o. o., from the court register based on a simplified liquidation.
The National Investigation Bureau Investigates Transactions of Merkur’s Former Management
Board
Early in the morning on 2 December 2010, the National Investigation Bureau visited Merkur’s premises in Naklo and
Celje. They were investigating the operations under the previous Management board of Merkur, d. d.
The Management Board of Merkur, d. d., met the representatives of the National Investigation Bureau in a three-hour
meeting and promised them full cooperation. They provided the detectives with information on the company’s
operations during the time when Merkur was managed by the Management Board chaired by Bine Kordež. The
investigation is focusing on business decisions made by the previous Management Board in the final years, especially
decisions related to the company takeover. The National Investigation Bureau detectives finished the search in
Merkur’s offices in Naklo late in the night, carrying with them numerous documents on Merkur’s operations under
Bine Kordež’s management.
Notification on Changes in Significant Interests
On 25 August 2010, Merfin, d. o. o., cut its stake in Merkur, d. d., by 120,145 shares or 9.15% of voting rights (from 67.41%
to 58.26%), while Sava, d. d., increased its stake by the same percentage, from 10.01% to 19.17%.
New Sales Center in Škofja Loka
On 24 March 2010, Merkur opened a new, 14,000m2 sales complex in Škofja Loka. Over 9,000m2 large warehousing
and sales facilities with Merkur’s sales center also hosts EngroTuš’s supermarket, and Gorenjska banka.
Reissued Operating Permit for the Sales Center in Vižmarje
Ministry of the Environment and Spatial Planning decided that the rejection of the operating permit for Merkur’s
sales center in Vižmarje was not justified. The Ministry decided that Merkur, as the investor, was not responsible for
construction waste from the moment this was passed to the appropriate company that was to process it. Based on
this decision, the administrative unit issued on 26 March 2010 an operating permit for the center, which was technically
flawless from the beginning. We reopened the center on 9 April 2010.
Merkur Gets a New Franchise in Idrija
On Tuesday, 6 April 2010, Kolektor Koling opened a 780m2 franchise store MERKUR KOLING in Idrija. From then, people
from Idrija and nearby places can find at one place everything they need to improve their home, garden or home
workshop. The store is open for consumers as well as entrepreneurs and craftsmen.
We’ve Expanded the MERKUR Sales Center in Šibenik
As of Thursday, 15 April 2010, the MERKUR sales center in Šibenik is twice the size it was before. A total of 50 employees
offer 35,000 different products, available in the following departments: kitchen, bathroom, garden, large and small
household appliances, lighting, home equipment, plumbing and heating, electrical department, paint, wood and
wooden products, construction material, screws, hardware and tools.
Merkur Rodovita Opens in Lendava
On 29 May 2010, Semenarna Ljubljana opened a new MERKUR RODOVITA franchise store in Lendava. Now people
from Lendava and nearby places can find at one place everything they need to improve their home, garden or home
workshop. The store is open for consumers as well as entrepreneurs and craftsmen.
Merkur Launches State-of-the-Art Online Store
On 13 December 2010, Merkur joined in the December shopping spirit by opening a new online store at www.merkur.
si. In line with Merkur’s tradition, the store sells everything for home, garden, free time, construction and renovation.
The new online store follows the concept of user-friendly shopping, which is a characteristic of MERKUR sales centers,
which have a carefully planned shopping routes, placed in a contemporary, elegantly designed environment. Instead
of having a carefully designed shopping route, the online store is divided into ten virtual departments: seasonal
products, appliances, household products, accessories, gardens, forests and farming, construction, heating and
cooling, bathroom, workshop, and electronics. This also helps Merkur bring the sales range of its sales centers closer
to the buyers, as the online store also presents a display window. To help users decide, the website also provides
information on current special offers, benefits, and tips for do-it-yourself enthusiasts and home.
Supervisory Board Appoints Temporary Management Board Chairman
Merkur Becomes “Respected Employer of 2009”
At the end of 2009, the MojeDelo.com employment portal carried out an in-depth and professional survey on most
respected employers in 2009, and published the results in January. Over 3,000 job seekers participated in the survey
and by different criteria assessed the reputation that Slovenian companies have on the labor market. Merkur made
it onto this elite list of respected employers and proved that it was a successful and stable company, which was
recognized also by potential job candidates assessing the companies.
EVENTS RELATED TO THE COMPULSORY SETTLEMENT PROCEEDINGS
Our Forklift Operators are the Best!
On Saturday, 17 April 2010, the national championship in forklift driving skills took place at the Celje Logotrans fair.
Robert Jakopič, an employee of Mersteel, was the best among 30 competing forklift operators. We also can’t ignore
the fourth, fifth and sixth places, also achieved by Mersteel’s forklift operators (Jerenko, Dobre, Pelaić).
After signing the eagerly awaited approval for a EUR 35 million syndicated loan in December, Merkur, d. d., received a
green light to start drawing the loan from the bank consortium on 4 February 2011. By the end of April, the company
spent the new money on refilling its stocks in sales centers and warehouses, and on boosting the wholesale segment.
Merkur’s Private Label BIVA Wins Important International Award Wolda
In June 2010, Merkur’s private label BIVA, developed by creative director Aljoša Šenk (an internationally acknowledged
designer with two Red Dot awards) and brand manager Blaž Bezek, received the Wolda “Best of Nation” award for the
logo of high-tech protective coatings BIVA Nan∞. The quality of innovative protective coatings developed in Slovenia
is thus also complimented with internationally acknowledged high-end design of Nan∞ products.
Wolda – Worldwide Logo Design Annual – is an internationally acknowledged award conferred by ICOGRAD (The
international Council of Graphic Design Association – World body for professional communication design), and it
presents the main authority in the field of assessing excellence in design of logos. In addition to this, Aljoša Šenk also
received an acknowledgment for the logo of the THNTNK consultancy firm, which presents one half of the Wolda
awards presented in Slovenia this year.
14
Most Significant Events in Merkur Group, d. d., after the 2010 Financial
Year
Merkur Wins Trusted Brand 2010 Title
On 30 September 2010, Trusted Brand 2010 titles were conferred at Ljubljana’s Union hall. Forty winning companies
took the stage, after readers of Reader’s Digest revealed in an independent survey that these are the brands they trust
and like the most. Merkur received the title in the “Shopping centers for home and garden” category, where it got
a total of 39.1% of all votes. We are also proud that Merkur’s brand was mentioned in the “Paints for home” category,
where we were placed 4th–5th. This reflects our activities in developing our private label, which is resolutely entering
Slovenian consumers’ memory with the BIVA Lestet and BIVA Freska brands.
Merkur’s Private Label BIVA Receives the Second International Award
Merkur’s creativity and dedication to bring the premium quality products closer to average buyers keeps catching
international attention, and Merkur’s private label BIVA received another award in 2010.
After winning the WOLDA international award, which was conferred on the young team of Aljoša Šenk (creative
director) and Blaž Bezek (brand manager) two months ago, the packaging of BIVA Nan∞ products also received the
silver Creativity International Award. The BIVA Nan∞ high-tech protection coatings were the only Slovenian winner of
the 40th Creativity International Awards.
Merkur Draws the Loan
Shareholders at MERKUR’s 22nd General Meeting Support Capital Injection
At the 22nd General Meeting of MERKUR, d. d., which was held on 25 February 2011, the shareholders unanimously
supported a capital injection, which is extremely important for successfully completing the compulsory settlement
proceedings. The capital injection performed by converting the creditors’ receivables is one of the key measures in
Merkur’s financial restructuring. In order for the capital injection to succeed, the creditors must register and convert
into stakes at least EUR 85 million of receivables within a month. At the General meeting, the shareholders adopted
all the resolutions on the agenda with the necessary number of votes. The General Meeting resolutions related to the
capital injection will step into force after the compulsory settlement is approved. The General Meeting, in which 82%
of the shareholders were present, also elected two new Supervisory Board members: Miro Medvešek and Vanja Jeraj
Markoja.
Mersteel Signs the Umbrella Agreement on Financing the Company
Mersteel signed the “Umbrella agreement on financing Mersteel” on 22 February 2011. The agreement defines the
conditions under which Gorenjska banka, Probanka, Nova KBM and Abanka will enter into contracts that will provide
Mersteel with additional financing and rescheduling of secured receivables. Based on the said agreement, Gorenjska
banka will grant a loan in the amount of EUR 3 million, while Probanka, Nova KBM and Abanka Vipa will each enter
a contract with Mersteel on factoring in the greatest possible amount of EUR 2.5 million. Gorenjska banka, Nova
KBM in Abanka Vipa should enter contracts with Mersteel according to which the secured part of receivables will be
rescheduled in line with the agreed conditions. All banks that have signed the agreement are also bound to vote for
the compulsory settlement that includes a 55% repayment of unsecured receivables by the end of 2016.
Amended Financial Restructuring Plan
On 8 March 2011, the court published the amended Financial Restructuring Plan, and issued a decision on permitting
changes to the Financial Restructuring Plan on the same day. The company amended the Financial Restructuring
Plan and offered ordinary creditors more shares for a euro of their receivables than in the original financial
restructuring plan. Every creditors that transferred its receivables onto the debtor, in line with the call on creditors to
subscribe and pay new shares by paying in an in-kind contribution, received one share with the share capital of EUR
1 for every EUR 53.00 of converted ordinary receivables. The price for creditors with secured receivables remained the
same at EUR 40.00 per share.
Prizes and Awards
Blaž Pesjak Appointed Chairman of the Management Board Until the End of the Term
On 31 March 2011, the Management board of Merkur, d. d., signed an umbrella agreement with the consortium
of banks on rescheduling the loan that was envisaged in the company’s Financial Restructuring Plan. Under the
agreement, which is a key element for the success of the compulsory settlement, the interest rate will stand at
1% throughout the year 2011, and will be in accordance with the Financial Restructuring Plan later. The umbrella
agreement on rescheduling the loan also determines that none of the secured principals, which are included in the
rescheduling, will be due before 31 March 2016. After that, the principals will be due every three months until the year
2019. After the compulsory settlement is approved, annexes to the contract will be signed with the banks. Successful
compulsory settlement proceedings now require subscribed capital injection in the amount of at least EUR 85 million,
and the vote on compulsory settlement.
At a late afternoon session on 9 June, the Supervisory Board of Merkur, d. d., unanimously appointed Blaž Pesjak as
the Chairman of the Merkur, d. d., Management Board until the end of the term. The Management Board of Merkur, d.
d., justified the trust bestowed on its members, and the temporary appointment of the Management Board chairman
was revoked and Blaž Pesjak was appointed Chairman of the Management Board for the remaining part of the term
until 30 June 2015. Uroš Zajc and Rok Ponikvar remain Management Board members. On 29 September 2010, the
Supervisory Board appointed Blaž Pesjak as temporary Chairman of the Management Board, whose term started
on 30 September 2010 and would finish when a new Supervisory Board chairman was appointed or on 30 June
2015. When this decision was taken, the composition of the Management Board was uncertain due to the sudden
death of the former Managament Board Chairman Bojan Knuplež. After the appointment, Merkur’s Management
Board reached the agreements necessary to continue the company’s operations in the compulsory settlement
proceedings, and at the same time adopted measures regarding the company’s operations and drew guidelines for
restructuring the company and group’s operations. The compulsory settlement procedure in Merkur, d. d., is thus
in the final stages, as on 26 May 2011, the Kranj District Court also called on the creditors to vote on approving the
compulsory settlement in Merkur, d. d. The creditors must send the voting ballots to the Kranj District Court within
one month of the call.
Conversion of Receivables Successfully Completed, According to Merkur’s Information
According to the information of Merkur, d. d., enough creditors sent statements on converging the receivables to the
court by the deadline (8 April 2011), and at least EUR 85 million were provided for the capital injection. In line with
the Financial Restructuring Plan, another important step was made towards successfully completing the compulsory
settlement proceedings launched on 3 November 2010 with a decision by the Kranj District Court.
OTHER EVENTS
Decision on the Endorsed Compulsory Settlement of Mersteel, d. o. o. and the Start of
Voting in Merkur, d. d.
16
On 27 July 2011, the Kranj District Court issued a decision on adopted compulsory settlement in Mersteel, d. o. o. By 3
May 2011, when the vote was closed, the compulsory settlement received support by a sufficient number of creditors
(92.8 %). The conclusion of the compulsory settlement also includes the 55% repayment of creditors in 5 years (11% a
year) whereby the first part will be covered in two years. The decision became final on 17 June 2011. On 26 May 2011,
the Kranj District Court also called on the creditors to vote on approving the compulsory settlement in Merkur, d. d.
The creditors sent the voting ballots to the Kranj District Court within one months of the call.
The MERKUR Brand among si.Brand’s TOP 50 Brands in 2010
At the end of January 2011, the si.Brand Consumer Association for classifying and defining product and service brands
published the latest si.Brand TOP 50 list for 2010. Slovenian consumers selected 50 best Slovenian product and service
brands in 2010, and Merkur was ranked 14th. By making it among the si.Brand TOP 50 brands in 2010, Merkur got the
right to use the si.Brand 2011 logo for a year.
Merkur’s Sales Range Now Only Available in Medium-Sized and Large Sales Centers
Decision on Approving the Compulsory Settlement at Merkur, d. d.
On 15 July 2011, the Kranj District Court issued a decision on adopted compulsory settlement in Merkur, d. d., which
was launched on 3 November last year. By 26 June 2011, when the vote was closed, the compulsory settlement
received support by a sufficient number of creditors (95.35%). The decision became final on 11 August 2011.
PERSONNEL CHANGES
Supervisory Board Member Miro Medvešek Resigns
Miro Medvešek, Supervisory Board member elected in February, resigned from the post on 25 March 2011 due to
conflict of interest.
In order to optimize the operations, and fulfill the reorganization plan and Financial Restructuring Plan, MERKUR, d. d.,
closed three smaller sales centers around Slovenia: Merkur Mojster Kranj Primskovo was closed at the end of February
2011, and Merkur Mojster Ljubljana Bežigrad and Merkur Mojster Ljubljana Jama were closed at the end of March 2011.
As of April, the improved and more user-friendly sales range is only available in the existing medium-sized and large
Merkur sales centers. Having only two sizes of sales centers (medium-sized with 3,000–4,000m2 and large with 6,000–
7,500m2) makes them easier to manage, and makes the Merkur brand more visible and user friendly. All employees
from sales centers that were closed have kept their jobs. They were relocated to other sales centers or posts in the
Sales, and the vicinity of their homes was taken into account. All three buildings were owned by Merkur, and selling
them will help reduce Merkur’s debt. Merkur’s sales center in Celje was the first to have its surface optimized. The
entire sales center was moved to the ground floor, and its surface was reduced from 10,260m2 to 6,100m2, which
already proved to be a good business decision.
Umbrella Agreement on Rescheduling the Loan
The year 2010 was doubtlessly the hardest in the 115-year history of the company. In the 1990s, Merkur set the right
strategy of expanding from a wholesale company to a wholesaler and retailer, and unlike its rivals, it has constantly
grown since then. It expanded its sales network throughout Slovenia, a large part of Croatia, and is also present in
Bosnia and Herzegovina, Macedonia and Serbia. However, rapid growth in revenue also resulted in new costs and
investments in new, increasingly larger sales centers, which turned out to be too expensive after the breakout of the
economic crisis, especially from the aspect of financing cost. When the Management Board decided to carry out a
management buyout in 2007 and started transferring the financial burden of the buyout onto Merkur, d. d., and its
subsidiaries in the following years, the burden was too heavy and the company had to declare insolvency pursuant to
the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act.
Our team thoroughly analyzed the reasons for the company’s problems and found out that Merkur’s financial crisis
was above all caused by an outflow of over EUR 180 million, which were rerouted through HTC DVA, d. o. o., to Merfin,
d. o. o., which carried out the MBO. In addition to this, the resources were flowing out of the company through
different transaction with shares and real estate, derivative financial instruments, and through issuing sureties and
guarantees for the acquiring company.
The second set of problems resulted from the wrong business model with extremely high costs, above all the
overheads. A review of Merkur, in which the consultancy firm Roland Berger made an international comparison of
the operations, revealed that Merkur sells too few products per a square meter of sales facilities, and that the cost
of selling them was significantly too high. Added value per employee was thus significantly lower than at our rivals,
and this was reflected in the profitability of the operations. Company’s business processes were not in line with good
business practice in trade and resulted in extra, mostly cost burdens for the company.
18
The third set of problems was caused by the environment and is mostly linked with the global economic crisis. In
sales, the crisis caused a drop in investment demand, and later general illiquidity in business. Both had a significant
impact on Merkur’s performance, because the companies’ sales dropped and a large share of realized transactions
was never paid. In sales in the retail sector changes arose in the size and structure of the consumption. The average
amount per purchase spent in our stores dropped, and the structure of the average purchase changed from more
expensive to cheaper products.
The Management Board chaired by late Mr. Knuplež prepared a plan for comprehensive restructuring of Merkur, d. d.,
and its subsidiaries. The program presented the basis for the company’s Financial Restructuring Plan, which has been
actively implemented since it was filed on 26 October 2010. In 2010, we managed to provide basic conditions for
the company’s survival and prevented its bankruptcy. Contrary to expectations, we managed to fill the shelves with
products before the New Year shopping season through cost optimization and collection measures, showing to our
creditors that a turnaround in operations is possible.
We carried out the operational and financial restructuring during the compulsory settlement proceedings, and
successfully concluded the process on 11 August. We are still successfully meeting the goals from the program, and
since March our cash flow has been positive. The sales are constantly increasing and the company’s role in the market
is strengthening, so we remain the leading seller of technical products in Slovenia. Will Merkur succeed again? We
believe it will, after all, we have been here for 115 years.
Blaž Pesjak,
Chairman of the Management Board
Report of the Management Board Chairman
Dear shareholders!
In the first half of 2010, the Supervisory Board of Merkur, d. d., comprised: Marta Bertoncelj (the Chairwoman), Jakob
Piskernik (Deputy Chairman), and Branko Dernovšek (member – workers’ representative).
At the 21st General Meeting on 23 June 2010, where all shareholders of Merkur, d. d., were present, all three
Supervisory Board members stepped down and a new Supervisory Board was elected for a four-year term. The new
Supervisory Board comprises Matevž Slapničar (Chairman) and Antonija Pirc (Deputy Chairwoman) as shareholders’
representatives, and Ana Hochkraut as workers’ representative.
At the General Meeting on 23 June 2010, shareholders also adopted changes to the Articles of Association, increasing
the number of Supervisory Board members from three to six. At the 3rd session of the Workers’ Council, which was
held in Naklo on 22 July, its members elected Peter Fink as the second workers’ representative in the Supervisory
Board.
At the company’s General Meeting held on 25 February 2011, Vanja Markoja Jeraj and Miro Medvešek were appointed
to the remaining two posts in the Supervisory Board as shareholders’ representatives. On 25 March 2011, Miro
Medvešek resigned due to conflict of interest.
Work of the Supervisory Board
In 2010, the Supervisory Board met in 19 (16+3) regular sessions, in which it discussed regular reports on the
operations on Merkur, d. d., and Merkur Group, and other current topics and important issues.
At their 20th regular session on 10 May 2010, the Supervisory Board members listed in the first paragraph adopted
the Annual Report of Merkur, d. d., for 2009, and the Consolidated Annual Report of Merkur Group for 2009.
20
At our first session on 23 June 2010, members of the new Supervisory Board were acquainted with the resignation
of the Chairman of the Merkur, d. d., Management Board Bine Kordež, and appointed Bojan Knuplež as the new
Chairman of the Management Board for the term from 1 July 2010 to 1 July 2015. The company is presented by
the Chairman of the Management Board, and represented by two members of the Management Board, or a
Management Board member and a procurator. The Management Board can issue one or more procurations. The
Supervisory Board approves the appointment or recall of procurators.
At the seventh regular session on 29 September 2010, the Supervisory Board was informed that the term of Chairman
of the Management Board Bojan Knuplež was terminated on 24 September 2010 due to death. The Supervisory
Board appointed member of the Management Board Blaž Pesjak as the Chairman of the Management Board.
At its sessions in 2010, the Supervisory Board spent the most time on issues related to the operations and their
restructuring in the parent company and the group.
The majority of time was spent on preparing and monitoring the compulsory settlement proceedings, and related
harmonization with all the stakeholders. The Financial Restructuring Plan, which was prepared as part of the
compulsory settlement proceedings, which were launched on 3 November 2010, is being implemented and all the
necessary procedures in the compulsory settlement proceedings are running according the deadlines set by the law.
The Kranj District Court issued a decision finalizing the compulsory settlement on 11 August 2011.
Alongside the compulsory settlement proceedings, the company also drafted a five-year plan and program of
measures for meeting the targets, which was discussed by the Supervisory Board.
The Supervisory Board discussed several other issues related to the company and group’s current operations at its
sessions.
All Supervisory Board members actively contributed to the board’s work by regularly attending the sessions and
participating in the discussions, as well as by preparing proposals and comments on the discussed issues.
Examination of the Consolidated Annual Report
On 22 September 2011, the company’s Management Board presented to the Supervisory Board the 2010
Consolidated Annual Report of Merkur Group together with the auditor’s opinion. In the auditor’s opinion, the
consolidated financial statements present a true and fair picture of the financial position of Merkur Group on 31
December 2010 and its financial performance and cash flows for the ended year in accordance with the International
Financial Reporting Standards as adopted by the European Union.
At the 22nd regular session on 29 September 2011, the Supervisory Board discussed the audited Consolidated Annual
Report of Merkur, d. d., for the year 2010. The auditing company Deloitte Revizija, d. o. o., issued a positive opinion to
the Consolidated Annual Report on 20 September 2011.
The Supervisory Board had no comments regarding the audit report by Deloitte Revizija, d. o. o. After carefully
examining the audited Consolidated Annual Report of Merkur Group for the year 2010, the Supervisory Board did not
have any comments regarding the report, and confirmed it unanimously at its session on 29 August 2011.
At the second regular session on 7 July 2010, members of the Supervisory Board were informed about the company’s
performance in the first six months of 2010. They were informed about the notification on withdrawal of the
audit report, which director of the auditing company KPMG, d. o. o., Marjan Mahnič sent to the Chairman of the
Management Board Bojan Knuplež on 1 July 2010. Based on the withdrawal, a new audit of the 2009 operations and
the drafting of the third annual report were launched.
The Supervisory Board prepared this report for the General Meeting of shareholders in line with Article 282 of the
Companies Act.
At the third regular session on 12 July 2010, we appointed Blaž Pesjak, Rok Ponikvar and Uroš Zajc as members of the
Merkur, d. d., Management Board for the term from 15 July 2010 to 1 July 2015. Marjan Smrekar, the workers’ director,
remained a member of the Management Board.
Last year, the company’s excessive debt and tougher economic situation vitally impacted the performance and
results, and the situation required that the company declared insolvency and launched compulsory settlement
proceedings. Considering the significantly changed conditions in which Merkur, d. d., is operating, the company
actively started implementing short-term measures and activities, and preparing a long-term business plan and
strategic guidelines for the company’s operational and financial reorganization.
The fourth regular session on 15 July 2010 was carried out by correspondence. At this session we adopted the
resignation of Milan Jelovčan, who prematurely terminated his term as a member of the Management Board on 15
July 2010.
At the fifth regular session on 12 August 2010, members of the Supervisory Board were informed about the
company’s performance in July 2010.
At the sixth regular session on 20 September 2010, the Supervisory Board was acquainted with the audited annual
report and issued a positive opinion. The Supervisory Board verified the Annual Report of Merkur, d. d., for 2009,
and the Consolidated Annual Report of the Merkur Group for 2009, issued on 30 August 2010. At the same time, the
Supervisory Board also revoked its decision from the session held on 10 May 2010, with which it verified the Annual
Report of Merkur, d. d., for 2009, and the Consolidated Annual Report of the Merkur Group for 2009, which were
issued on 30 April 2010.
Conclusion
The Supervisory Board would like to thank the Management Board and all the employees for their contribution and
effort in these difficult conditions. In the coming times we will have to face numerous big challenges, and we believe
that with joint forces we can successfully overcome them and fulfill the planned goals.
Naklo, 29 September 2011
Matevž Slapničar,
Chairman of the Supervisory Board
Supervisory Board Report
22
Big Bang Division
The Merkur Division comprises eight companies in five countries. The wide network of sales centers provides
recognizability. The network comprises 27 centers in Slovenia, 6 in Croatia, 3 in Serbia, and 1 in Bosnia and
Herzegovina and Macedonia. Their main advantage lies in the fact that they combine the concept of successful sales
of products for construction, renovation and maintenance, for entertainment, comfort and quality of life all in one
place. This sales concept is also observed by 18 franchise stores of Merkur in Slovenia, one in Bosnia and Herzegovina,
and the online store at www.merkur.si.
The Big Bang division comprises parent company Big Bang, d. o. o., Ljubljana, and subsidiary Big Bang, d. o. o.
Beograd. Big Bang is the largest provider of audio, video and computer products in Slovenia, with 16 stores and
the bigbang.si online store. Its market shares range between 30% and 60%. In addition to the leading position in
the said segments, the company is also among the largest providers of small and major household appliances,
telecommunication equipment, game consoles, games and recorded media. Big Bang expanded its operations to
Serbia, where it opened a store in Belgrade’s Ušče shopping mall in 2009.
The Merkur Division supplies companies through three sales channels. Wholesale buyers can purchase goods at the
sales centers, where they can view and try out the products, and immediately take them over personally. The majority
of goods are sold to the companies by wholesale agents directly from central warehouses or through transit. The
third channel is the MERKURPARTNER website, designed for wholesale business partners in Slovenia.
Big Bang stores offer a wide range of products, and provide its buyers with cutting edge technology of established
brands. High quality, a rich range of products and a high level of after-sale services helped Big Bang become a
recognized brand. In our stores, buyers can consult with sales persons, who routinely learn about new products, and
they can also test the majority of products to make sure they have made the right choice before making a purchase.
The most loyal buyers enjoy the benefits of Merkur’s loyalty card. At the end of 2010, the number of active loyalty
card users stood at about 500,000. Similar cards are used in Croatia, Bosnia and Herzegovina, and Serbia.
In addition to the company’s main activity, selling products in stores, sale through the bigbang.si online store, which
is facing tough competition, is also important. Big Bang is also a wholesaler, and a seller in foreign markets.
The year 2010 was especially tough for Merkur. The audit of financial statements for 2009 and the first half of 2010
revealed insolvency, so we decided to restructure Merkur under court’s protection through compulsory settlement
proceedings. In September, we officially declared insolvency and started drafting a Financial Restructuring Plan.
We also started implementing operational restructuring measures prepared in collaboration with the consultancy
company Roland Berger. On 26 October we filed all the required documents at the Kranj District Court, and on 3
November 2010 the compulsory settlement proceedings were officially launched.
The company was founded in 1991 as wholesaler Bofex, d. o. o. After 15 years of fast growth, the company took the
leading position, and on 1 January 2008, the company changed its name to Big Bang, d. o. o. to reconcile it with the
brand name. The company got a completely new corporate image, a new slogan – “Always something new” – and
started developing its private label BOF.
Urgent operational and financial restructuring measures and measures for increasing trust through the compulsory
settlement proceedings helped us gain liquidity and solvency of Merkur, d. d. The only strategy that we have
followed in the past 12 months was the strategy of survival, which is still in full swing and is supported by appropriate
documents. In May 2011, we recorded positive operating result and profit for the first time since the crisis began.
Shares and Ownership Structure
Merkur’s financial weakness remains the obstacle preventing the company from fully moving from the strategy of
survival to a growth strategy. A lot of work and effort will be necessary to eliminate risks from the environment and
the balance sheet. After the adopted compulsory settlement, Merkur’s capital adequacy will not be optimal, and it
will be necessary to consider a capital injection in the company together with the development plans.
Until 6 March 2008, the share of Merkur, d. d., was a prime market share at the Ljubljana Stock Exchange with the
symbol MER. Prime market shares only include shares of the most successful Slovenian joint-stock companies. At the
18th regular General Meeting on 17 January 2008, the shareholders of Merkur, d. d., voted on delisting the shares of
Merkur, d. d., with the symbol MER. The decision was adopted with 99.99% of the votes present or represented at the
meeting.
Information on Merkur’s Shares
The Mersteel Division
The Mersteel Division is the leading seller of metal products and steel service center provider in southeastern Europe.
The Mersteel Division comprises nine companies in seven countries. We supply buyers with over 30,000 metal
products. Their quality, reasonable prices, and meeting buyers’ special needs and requests are our guiding principles
in creating a versatile range of products sold through a wide sales network.
In addition to wholesale, Mersteel is also developing a wide range of completion services. At buyers’ request, we
recast the metal products to the desired size in our steel service centers. We also provide the services of cutting tool
steels, girders, bars, rods pipes, and tubes, CNC machining of tool steels, cutting cold and hot rolled strips, and cutting
hot-rolled metal sheet.
Mersteel Profil is a Serbian company specialized in producing pipes, tubes and other metal products. In addition to
producing pipes and tubes, which present the majority of its production capacity, Mersteel Profil also produces cold
formed window sections, girders for dry construction, steel rods, metal doorframes and other products, and provides
cutting services.
The Mersteel Division started operating on 1 July 2008, when Mersteel, d. o. o., with the headquarters in Naklo, was
established. The company experienced a major turnaround in 2010, when Darko Gregoriè took over as the division’s
director on 1 April, and started introducing measures for the company’s reorganization. Due to the impairment of
investments into subsidiaries, the holding company had to call on the shareholders to provide a capital injection,
however the shareholders were unable to do so; the compulsory settlement proceedings were launched against
Mersteel, d. o. o. in November.
We have adopted a number of measures for improving the operations, which included laying off redundant workers
and cost cutting, and above all efficient management of resources tied up in inventory and receivables. We have
focused on profitable groups of goods and buyers who settle their liabilities on time. We began negotiations
with creditor banks on financing working capital, which were however not concluded by the end of 2010. We are
optimistic regarding the outcome of these negotiations.
The 2010 results thus reflect a painful end of a period of unlimited financing, and the beginning of a more
independent and successful path for Mersteel, d. o. o.
The shares give the shareholder the right to:
• one vote at the General Meeting,
• proportional dividends paid out of profit, and
• proportional share of the remaining assets if the company goes bankrupt or is liquidated.
All shares are freely transferable, ordinary, and bring the same dividend. Merkur, d. d., does not have preferred shares
with fixed dividends. Every shareholder has the right to dividends, and to sell or transfer the shares to another person.
Key Information on Merkur’s Shares
Information
No. of shares*
No. of shareholders
* 131,258 of these are treasury shares
31. 12. 2010
1.312.585
17
31. 12. 2009
1.312.585
7
Indeks
100,0
242,9
The Merkur Division
Responsibility towards People and the Environment
Own Shares
Proportionally to our performance, we support groups or individuals who need our help.
Merkur, d. d., owns 131,258 treasury shares, which presents 10% of all shares.
By using contemporary construction methods and carefully planning the logistics paths, Merkur avoids needless impact
on the environment. We pay attention to selling environmentally-friendly products. We were among the first to join the
Energija Si project. We have undertaken to promote energy-efficient products, and educate customers and employees on
the importance and ways of conserving energy.
24
No. No.
Name
of shareholders
1.
Ananke Handels und Beteiligungs GmbH
1
2.
Sava, d. d.
1
3.
Banka Koper d. d.
1
4.
Merkur,d. d.
1
5.
Merfin d. o. o.
1
6.
Iskratel, d. o. o.
1
7.
Perutnina Ptuj d. d.
1
8.
H & R d. d.
1
9.
GBD d. d.
1
10.
Salonit Anhovo, d. d.
1
11.
Sam d. o. o. Domžale
1
12.
CP Murska Sobota d. d.
1
13.
Grafist d. o. o.
1
14.
Mura -VGP d. d.
1
15.
TAP d. o. o.
1
16.
P.G.M. inženiring d. o. o.
1
17.
ML inženiring d. o. o.
1
TOTAL
17
All shares
Number %
328,145
25.00
251,566
19.17
147,298
11.22
131,258
10.00
115,646
8.81
99,383
7.57
64,198
4.89
58,600
4.46
44,746
3.41
38,000
2.90
8,268
0.63
8,000
0.61
7,166
0.55
4,000
0.30
3,554
0.27
2,756
0.21
1
0.00
1,312,585
100.00
We are also a co-founder of ZEOS, d. o. o., the first and the largest Slovenian non-profit organization for waste electric and
electronic equipment management. We were among the first Slovenian companies to introduce the option to return
waste electric or electronic equipment free of charge upon purchasing new.
We have an in-house Ecology Office, which brings together related environmental issues. This gives us transparent
overview and control over implementing environmental programs, and provides a more detailed definition of
responsibility and faster adjustments to legal requirements. In our offices, we are especially careful about waste batteries,
chemicals, oils, and office supplies, especially cartridges, glue, detergents, and paper.
Governance and management system
Merkur Group and its three divisions are managed by the holding company, Merkur, d. d. The Management Board of
the Merkur, d. d., holding company is responsible for planning and realizing the strategic goals for all companies.
The Supervisory Board monitors the management board’s operations in line with the rules of the two-tier management
structure. Up to four members of the Supervisory Board represent the interests of shareholders. They are elected by
shareholders at a General Meeting. Up to two members of the Supervisory Board represent the interests of employees.
By design this post is taken by the president of the Worker’s Council who may be joined by one of the members of
the Worker’s Council.
Management Board of Merkur, d. d., until 30 June 2010:
Shares Owned by Management or Supervisory Board Members on 31 December 2010
On 31 December 2010 no old or new management or supervisory board members owned shares of Merkur, d. d.
Social Responsibility
Responsibility for Correct Business Decisions
We carefully upgrade business and commercial processes in the Merkur Group. We use modern information
technologies to provide good oversight over business events and fast access to important business information, and
for high-quality risk management.
We have introduced the tested operational standards of the parent company throughout the Merkur Group. We
control the subsidiaries through monthly financial reports, annual external audits, and regular monitoring of their
financial operations, receivables and stocks.
In the times of difficult economic conditions, our main goal is to ensure stable operations and build foundations for
new growth once the global economy picks up.
Bine Kordež, president of the Management Board – the general director
Goran Čelesnik, member of the Management Board – the director of commerce (until 22 March 2010)
Milan Jelovčan, member of the Management Board – director of organization and IT (until 15 July 2010)
Marjan Smrekar, workers’ director
The Management Board of Merkur, d. d. since 1 July 2010 (the term until 1 July 2015):
Bojan Knuplež, president of the Management Board – the general director (until 24 September 2010)
Blaž Pesjak, president of the Management Board (since 29 September 2010)
Blaž Pesjak, member of the Management Board, director of finance, investments and controlling (17 July 2010–28
September 2010)
Rok Ponikvar, member of the Management Board, director of procurement, sales and logistics (since 15 July 2010)
Uroš Zajc, member of the Management Board, director of marketing, sales portfolio and development (since 15 July 2010)
Marjan Smrekar, member of the Management Board – workers’ director (until 31 August 2013)
The Management Board’s term ends on 1 July 2015.
The Supervisory Board of Merkur, d. d. until 22 June 2010:
Shareholders’ representatives:
Marta Bertoncelj – the president
Jakob Piskernik – the vice-president
Employees’ representative:
Branko Dernovšek
The Supervisory Board of Merkur, d. d. since 23 June 2010 (the term until 23 June 2014):
Ownership Structure on 31 December 2010
Matevž Slapničar, president of the Supervisory Board
Antonija Pirc, vice-president
Miro Medvešek, member (25 February 2011–25 March 2011)
Vanja Jeraj Markoja, member (25 February 2011–24 February 2015)
Educational structure of Merkur Group employees on 31 December 2010
In spite the lower number of employees the educational structure remains the same as in the previous years. By
carrying out internal training we retained the skill level of employees and also focused on work safety. In addition,
employees were able to spend affordable holidays in our own vacation facilities.
37.6
40.0
32.9
35.0
The Supervisory Board’s term ends on 23 June 2014.
30.0
Employees
25.0
20.0
In 2010 the number of Merkur Group employees dropped by more that 10% on average due to lower sales and
consequently too many employees. This is why all companies of Merkur Group had to systematically reduce the
number of employees.
In autumn of 2010 Mersteel, d. o. o., carried out the program of discharging surplus employees; we began preparing
the program in Merkur, d. d. as well. We also carried out various “soft” methods of reducing employee numbers,
namely by consensual termination and termination of employment with the right to compensation from the
Employment Service of Slovenia. All surplus employees were granted the right to a severance pay in accordance with
the law and the collective contract of Merkur, d. d.
We were aware of the sensitive nature of the issue of lowering the number of employees, and put extra effort into
communication with employees, especially through joint workers’ council and the unions.
26
Employees of Merkur Group by Companies
Number
Company
31. 12. 2010 31. 12. 2009
MERKUR GROUP
3,783
4,829
MERKUR DIVISION
2,918
3,686
Merkur, d. d. 2142
2675
Merkur Hrvatska, d. o. o.
380
517
Merkur International Beograd, d. o. o.
291
339
Intermerkur Nova, d. o. o., Sarajevo
101
139
Perles Merkur Italia, s.r. l.
3
8
Merkur, d. o. o., Cetinje
1
8
MERSTEEL DIVISION
384
671
Mersteel, d. o. o., Naklo
128
309
Mersteel, d. o. o., Hrvaška
32
78
Mersteel, d. o. o., Beograd
70
98
Mersteel Profil, d o o, Beograd
85
96
Mersteel, d. o. o., Sarajevo
34
39
Merkur Makedonija, d o o, Skopje
33
43
Merkur MI Handels, GmbH
0
5
Merkur International Praha spol. S.r.o.
2
3
BIG BANG DIVISION
481
472
Big Bang, d. o. o., Ljubljana
435
434
Big Bang, d. o. o., Beograd
46
38
Index
78.3
79.2
80.1
73.5
85.8
72.7
37.5
12.5
57.2
41.4
41.0
71.4
88.5
87.2
76.7
0.0
66.7
101.9
100.2
121.1
Employees by hours worked
2010
2009 Index
4,187.5
4,672.5
89.6
3,225.6
3,493.8
92.3
2,376.6
2.579.7
92.1
458.0
495.1
92.5
262.0
264.0
99.2
118.0
140.0
84.3
5.0
9.0
55.6
6.0
6.0
100.0
514.3
691.7
74.4
232.0
319.3
72.7
48.4
83.8
57.8
66.0
105.6
62.5
89.0
97.0
91.8
36.0
35.0
102.9
36.7
43.0
85.4
3.6
4.0
90.0
2.6
4.0
65.0
447.6
487.0
91.9
408.1
451.0
90.5
39.5
36.0
109.6
15.0
8.9
10.0
5.0
0
4.2
11.1
3.7
0.8
I. 0.6
II. Merkur Group
III. IV. V. VI. VII. VIII. 0.1
IX.
Employees’ representatives:
Ana Hochkraut, member
Peter Fratnik, member (22 July 2010–31 May 2014)
Analysis
of Business Performance
Analysis of Business Performance
Other operating revenue comprises mostly revenue from recovered receivables, gains from the sale of property
and capital assets, and reversal of long-term provisions. In 2010, operating revenue was 258.5% higher than the year
before.
11 Business
BusinessPerformance
Performance of
of Merkur
Merkur Group
Group
Gross Profit/Loss
92% of gross profit/loss is comprised of the difference in price, which dropped by 25% compared to 2009. Other gross
profit is revenue from services, which was 9.5% lower compared to 2009.
Overviewofofthe
theMost
Most
Important
Financial
Indicators
the Consolidated
Business
Overview
Important
Financial
Indicators
from from
the Consolidated
Business
Results ofResults
Merkur of
Merkur Group
Group
In thousand EUR
2010
1
2009
2
Index
3=1/2
600,163
587,798
12,365
879,962
875,179
4,783
68.2
67.2
258.5
-657,801
-451,985
-208,025
-893,099
-698,569
-201,036
73.7
64.7
103.5
-157,821
-7,981
-49,326
-76,631
-18,740
-687
-4,457
-50,204
-171,561
-9,468
-59,581
-80,531
-17,408
-525
-4,047
-29,475
92.0
84.3
82.8
95.2
107.7
130.7
110.1
170.3
GROSS SALES INCOME
135,814
176,610
76.9
PROFIT/LOSS FROM PRINCIPAL ACTIVITIES
-22,007
5,049
-435.9
OPERATING PROFIT/LOSS
-59,846
-19,643
304.7
-113,842
-131,982
86.3
-23,727
0
-
-197,416
-152,015
129.9
-1,206
-1,915
63,0
-198,622
-153,929
129.0
-198,621
-153,881
129.1
-1
-48
1.2
OPERATING INCOME
Sales Revenue
Other Operating Revenue
OPERATING COSTS
Costs
Operational costs
Costs by nature
Cost of materials
Cost of services
Labor costs
Amortization and depreciation
Long-term provisions
Other operating costs
Other operating expenses
28
NET FINANCIAL INCOME/EXPENSES
Other Expenses
PROFIT/LOSS BEFORE TAXES
Income tax expense
PROFIT/LOSS FOR THE FINANCIAL TERM
Profit or loss assigned to the owners of the controlling
company
Profit or loss assigned to the non-controlling stake
Operating Costs
Primary Costs
Primary costs dropped by 8% compared to 2009. Almost a half of primary costs are labor costs, which only
dropped by 4.8% despite a significant cut in the number of employees, which is the result of severance pay and
compensations for workers whose contracts were terminated. Costs of long-term provisions increased, mostly as the
result of issued guarantees and severance pay.
Other Operating Expenses
Other operating expenses in 2010 were 170.3% higher than in 2009. The largest item among other operating
expenses are impairments and write-offs of receivables from customers in the amount of EUR 29,326 thousand, and
write-downs of inventories to the recoverable amount in the amount of EUR 7,351 thousand.
Operating Profit/Loss and Profit/Loss from Ordinary Activities
In 2010, the Group generated an operating loss in the amount of EUR 59,846 thousand, and a loss from ordinary
activities in the amount of EUR 22,007 thousand. The reasons lie in a significant drop in the sales, which could not be
offset even by high decrease in expenses.
Financial Revenue and Expenses
One of the major items in extremely high financial expenses is the impairment, i.e. revaluation of the loan given to
HTC DVA, d. o. o., in the amount of EUR 42,134 thousand. Together with revaluation of other given loans, the amount
was EUR 70,399 thousand. Interest expenses in the amount of EUR 38,521 thousand, and impairment of available-forsale financial assets in the amount of EUR 10,619 thousand also had a major impact.
Interest income in the amount of EUR 13,483 thousand and dividend income in the amount of EUR 3,463 thousand
stand out among financial revenue.
Other Expenses
The individual item other expenses comprises one-off expenses in 2010 from provisions for given guarantees and
mortgages, and lawsuits in the amount of EUR 23,727 thousand.
Profit/Loss for the Financial Year
The loss generated in the financial year amounted to EUR 198,622 thousand.
Operating Revenue
Operating Revenue
Sales Revenue
Merkur Group generated EUR 587,798 thousand in sales revenue in 2010, which is 32.8% less than the year before. The
sales
revenue
generated in foreign markets stood at 21.1% of total sales revenue, and was 0.4% lower than in 2009.
Sales
Revenue
Sales
revenue
from
retail, which
presents
67.9%
of all salesinrevenue,
was 25% lower
thanwhich
the year
Merkur Group
generated
EUR
587,798
thousand
sales revenue
in 2010,
is before,
32.8%and
lessfrom
than the
wholesale
53.8%
lower
than
in
2009.
One
of
the
major
reasons
for
this
was
the
global
economic
crisis,
which
has a and
year before. The sales revenue generated in foreign markets stood at 21.1% of total sales revenue,
strong
impact
on the
consumption
of durable
goods,
which
present
thepresents
largest share
of ourofsales
program,
while was
was 0.4%
lower
than
in 2009. Sales
revenue
from
retail,
which
67.9%
all sales
revenue,
other
reasons
lie
in
the
consumption
of
metal
products
and
poorer
operating
conditions,
and
the
loss
of
trust
25% lower than the year before, and from wholesale 53.8% lower than in 2009. One of the majorfrom
reasons
our
for partners.
this was the global economic crisis, which has a strong impact on the consumption of durable goods,
which
present
theincreased
largest share
of our
other reasons
liecenter
in theinconsumption
of in
metal
Our
retail
capacities
in the first
halfsales
of 2010program,
– in Marchwhile
we opened
a new sales
Škofja Loka, and
products
and
poorer
operating
conditions,
and
the
loss
of
trust
from
our
partners.
April we reopened the sales center in Vižmarje. In the second half of the year we started optimizing the sales network
and standardizing the sales centers.
30
Item
2 Assets, Equity and Debts of Merkur Group
2 Assets, Equity and Debts of Merkur Group
Due to the market conditions in 2010 the Group’s cash flow from operations dropped by 56% compared to the year
before. All of the positive cash flow from operations and investing activities was used to pay interests on loans and
repay the loans.
Overview of Significant Data from Merkur Group’s Consolidated Balance Sheet
31 December
2010
In thousand EUR
31 December
2009
Property, plant, equipment and intangible assets
418,420
486,478
86.0
Financial assets, investment property and other noncurrent assets
210,876
230,118
91.6
Total noncurrent assets
629,296
716,596
87.8
Inventories
83,565
150,774
55.4
Current financial assets and cash
11,592
7,030
164.9
Current trade and other receivables and other assets
43,140
219,425
19.7
Total current assets
138,296
377,229
36.7
TOTAL ASSETS
767,592
1,093,825
70.2
Total equity of partners in controlling company
-93,402
115,356
-
15
16
98.1
Total equity
-93,387
115,371
-
Total noncurrent liabilities
224,729
296,901
75.7
Current financial liabilities
449,350
402,932
111.5
Current trade and other liabilities
Total current liabilities
186,900
636,250
278,620
681,553
67.1
93.4
Total liabilities
860,979
978,454
88.0
TOTAL EQUITY AND LIABILITIES
767,592
1,093,825
70.2
Item
Non-controlling interest
30
1
2
Index
3=1/2
Total Assets
Merkur
Total Group’s
Assetstotal assets on 31 December 2010 amounted to EUR 767,592 thousand, which is EUR 326,233 thousand
or 29.8% less than at the end of 2009. The major reason for the decrease in the group’s total assets in 2010 lies in
the
impairment
of total
financial
assets,
given, receivables
customers
and write-downs
of inventories
to the
Merkur
Group's
assets
onloans
31 December
2010from
amounted
to EUR
767,592 thousand,
which
is EUR
recoverable
amount, which
also resulted
in significantly
equity
of the
group.
Merkur
total equity
on 31
326,233 thousand
or 29.8%
less than
at the endlower
of 2009.
The
major
reason
forGroup’s
the decrease
in the
December
2010assets
was negative
in lies
the amount
of EUR 93,387ofthousand.
group's total
in 2010
in the impairment
financial assets, loans given, receivables from
customers
and
write-downs
of
inventories
to
the
recoverable
amount,
which
resulted
in significantly
After the decision on compulsory settlement in parent company Merkur,
d. d., Naklo,
andalso
subsidiary
Mersteel,
d. o. o.,
lower equity of the group. Merkur Group’s total equity on 31 December 2010 was negative in the amount
Naklo, is made final, the group’s equity will be again positive due to an increase from a write-off of liabilities towards
of EUR 93,387 thousand.
ordinary creditors. This will also improve the financing structure by increasing the share of long-term sources. Noncurrent trade and financial liabilities will present 83% of all liabilities. More information on the effect of an approved
After the decision on compulsory settlement in parent company Merkur, d. d., Naklo, and subsidiary
compulsory
on Merkur
Group’s
balance
sheet isequity
given under
9 Business
Events after
Sheet from
Date a
Mersteel, d.settlement
o. o., Naklo,
is made
final,
the group’s
will be
again positive
duethe
to Balance
an increase
in
Merkur
Group’s
Consolidated
Accounting
Report.
write-off of liabilities towards ordinary creditors. This will also improve the financing structure by
increasing the share of long-term sources. Non-current trade and financial liabilities will present 83% of
3
Merkur
Group’s
Cash
all liabilities.
More
information
on the effect of an approved compulsory settlement on Merkur Group’s
3 Merkur
Group’s
Cash
Flow Flow
balance sheet is given under 9 Business Events after the Balance Sheet Date in Merkur Group’s
In thousand EUR
Consolidated Accounting Report.
Item
2009
Index
-198,621
188,417
66,518
-153,929
179,328
115,371
129.0
105.1
57.7
2,786
-7,152
-
Net cash flow from operating activities
59,099
133,618
44.2
CASH FLOW FROM INVESTING ACTIVITIES
Net cash flow from investing activities
11,649
-129,245
CASH FLOW FROM FINANCING ACTIVITIES
Net cash flow from financing activities
-61,836
-7,400
CASH FLOW FROM OPERATING ACTIVITIES
Return/payment of income tax
The development strategy is aimed towards expanding our offer of high quality products and services in order to
provide customer satisfaction. Our goal is establishing Merkur group as a successful international corporation with
recognized brands of technical goods.
The key values of Merkur Group’s modern and flexible organizational culture are employees’ creativity, loyalty and
enthusiasm. By adapting to the changes in the environment, discovering and exploiting market opportunities, and
being driven to constant development we’ve been able to uphold the 115-year old tradition of successful business
operations. Our goal is to become the number one seller of home products, DIY products, construction, electrical
and technical, and professional technical equipment in Southeast Europe.
Merkur Group’s range of products comprises high quality products of established brands by Slovenian and foreign
manufacturers. Whichever market we operate in, we aim to connect local and global suppliers with consumers and
business customers. We’re expanding our range of products by developing our own quality product brands BIVA,
MTECH, MQ and BOF.
We’ll achieve our goals by finishing the reorganization in terms of operations and content as planned, and by starting
and concluding the said operational and content reorganization throughout the entire group. We wish to create
conditions for strengthening Merkur Group’s position in the region, and increasing its total revenue to EUR 800
million. We will achieve this by enforcing the following strategies: expansion, adapting to marketing trends, future
positioning of Merkur, changing and unifying the format of sales centers.
The Expansion Strategy
1.Expanding to new markets:
• Analyze the purchasing power of the bigger cities in the region.
• Invest in new sales premises.
• Invest in the sales program.
• Expand the franchise network in Bosnia and Herzegovina, and Serbia.
2.Increasing our presence in capital cities and bigger economic centers
• Invest in up to two sales centers in Zagreb.
• Invest in a sales center in Belgrade.
• Invest in a sales center in Niš or Novi Sad.
• Invest in a sales center in Ljubljana.
3.Carry the B2B operations over to other markets of the region
• Additional human resources in subsidiaries.
• Identify the appropriate sales programs.
• Increase sales.
Adapting to Market Trends
2010
Profit/loss for the financial year
Adjustments for non-cash items in profit or loss
Change in net working capital and provisions
The Development Strategy
Due to the market conditions in 2010 the Group's cash flow from operations dropped by 56% compared to
the year before. All of the positive cash flow from operations and investing activities was used to pay
- 32
-
The future positioning of Merkur is defined by the following assumptions:
a) Customers need solutions: instead of comfort, nice atmosphere and a wide range of products, the customers of the sales centers look for ecologically sound and sustainable solutions and services.
b)Split demand: Customers want high quality product brands by established manufacturers at sensible prices on one hand and cheaper own brand products on the other.
c) Market segments: the biggest growth is expected in the “renovations” market.
d)Converged sales channels: bring together the ranges of specialized stores and DIY sellers, FMCG sellers enter the technical sector, internet is growing increasingly important as a sales and communications channel (multichannel retailing).
e) Sales premises: further growth of total sales premise surfaces and average size of DIY centers.
f) Prices: continue to push the prices down. Customers expect the best price.
g)Consolidation: further consolidation of DIY sellers. The principle formats will gain from consolidation.
h)Concept as the key factor to success: the concept will present the key competitive advantage. Having just the lowest prices will no longer suffice.
Overview of Significant Data from Merkur Group’s Consolidated Balance Sheet
The Future Positioning of Merkur
32
HORNBACH
BAUHAUS
B2C
B2B
PRAKTIKER
Hobby, DIY/standard users
Sales to companyes – B2B entrance
MERKUR
OBI
BAUMAX
MERKUR
Functionalities and products
presentation
Design and solution
presentation
Merkur must get closer to professionals and the DIY customers. The company’s presentation must feature a greater
emphasis on the design and presentation of solutions. This is especially important in the DIY segment. The key to
increasing traffic and frequency of the sales centers is a live green (gardening) program.
Sales to consumers – B2C entrance
Drive through
Hybrid Merkur Sales Centers – interior and the paths for customers
Dr
ive
th
ro
ug
h
Target customers
Companies/professionals
Hybrid Merkur Sales Centers – exterior:
Entrance B2B
Changing and Unifying the Format of Sales Centers
Retail is Merkur’s main activity; 75% of sales are carried out through the sales centers (both B2B and B2C sales). Thus
the sales center format is one of the key components of the company strategy as it defines its operations in the
long run. In July 2010 Merkur’s sales network comprised 32 sales centers (SC) in Slovenia, 8 in Croatia, 1 in Bosnia
and Herzegovina, 3 in Serbia, and 1 sales center in Macedonia. The surface area of the sales centers was extremely
heterogeneous as was the graphic design and the building type.
Hybrid Model of Sales Centers We decided to standardize the image of sales centers and thus simplify the product
range management and provide a uniform shopping experience for our customers. Taking into account the global
trends that were aimed towards combining sales centers for consumers and sales centers for businesses in the last
decade, and also analyzing consumer habits and following our competition at home as well as abroad, we decided
on a hybrid model of sales centers combining the MERKURDOM and MERKURMOJSTER sales center types. The
new guidelines also include the classic DIY and the more consumer-oriented sales centers (so called soft DIY) that
also market items for home and garden, which also fits in with the future format of Merkur’s sales centers. The format
is also adapted to the future investment projects that strive for lower investment costs for a square meter of surface
because it does not include building garages on the ground floors of sales centers.
Sales Center Size Looking at the existing centers and available surfaces we decided to close all centers smaller than
3,000m2. We grouped the mid-sized sales centers for the 3,000–4,500 m2 format, this size is suitable for towns and
mid-sized cities, while the larger centers were grouped in the 6,000–7,500 m2 format, which we think is suitable for
bigger cities. On the basis of the existing surfaces we made a plan of downsizing or growing sales centers so that we
can use them as one of the two selected formats.
Entrance B2C
As part of the new format and center standardization plan we already downsized the SC Merkur Hudinja center
and expanded the surface of the SC Merkur Primskovo in the first half of 2011. In the second half of 2011 we plan to
renovate or combine the centers in Nova Gorica (combine the centers), and in Novo Mesto, downsize the SC Merkur
Murska Sobota and expand the product range in SC Merkur Rudnik (adding the construction and the professional
range). In the future we plan to renovate the remaining centers, and invest in a new center in Koper at the Semedela
location (and consequently close three existing centers: SC Koper, SC Izola, SC Lucija). We also feel that in the future,
the model of classic lease should be used for new centers, because due to the simultaneous financial rehabilitation
the investments in new centers will not be possible. We plan to use the same model when expanding our operations
in Croatian, Bosnian, and Serbian markets.
All derived data (totals, differences, ratios and indices) have been calculated from a value in euros and not in thousands of euros.
All derived
data (totals, differences, ratios and indices) have been calculated from a value in
euros and not in thousands of euros.
Balance Sheet of Merkur Group on 31 December 2010
Balance Sheet of Merkur Group on 31 December 2010
CONSOLIDATED
ACCOUNTING REPORT
OF MERKUR GROUP
FOR THE FINANCIAL
YEAR 2010
34
Note
31 Dec. 2010
31 Dec. 2009
Corrected
31 Dec. 2008
Corrected
5.1
5.2
5.3
416,048
2,372
47,793
483,263
3,215
28,842
435,987
9,425
17,250
5.4
5.5
5.6
5.7
5.8
5.22
0
132,044
12,286
18,457
296
0
629,296
0
184,792
1,477
8,981
110
5,914
716,596
390
197,689
2,621
0
258
6.598
670,218
5.9
5.10
5.11
83,565
0
528
494
42,118
11,592
150,774
4,351
42,673
3,281
173,471
2,679
208,803
5,126
98,907
340
240,888
5,705
Total short-term assets
138,296
377,229
559,770
TOTAL ASSETS
767,592
1,093,825
1,229,988
54,773
0
55,044
-53,159
-214,670
84,025
-19,415
-93,402
15
-93,387
54,773
0
56,074
-53,159
-17,078
86,391
-11,644
115,356
16
115,371
54,773
76,701
68,920
-53,159
47,222
105,402
-6,953
292,906
64
292,970
47,870
142,155
0
40
34,663
224,729
445,133
4,217
119,735
146,228
17,632
3.798
9.509
296.901
398.910
4.023
135,248
143,216
15,785
71
11,590
305,910
357,319
634
178,236
2
7,864
798
636,250
860,979
275.593
3
1.625
1.399
681.553
978.454
266,235
3,011
0
3,909
631,108
937,018
767,592
1.093.825
1,229,988
Item
Property, Plant and Equipment
Intangible Assets
Investment Property
Long-term Financial Investments in Associated
Companies
Long-term financial investments
Loans Given
Long-term assets classified for sale
Other long-term receivables
Deferred tax assets
Total long-term assets
Inventories
Short-term financial investments
Loans Given
Current tax receivable
Trade Receivables and Other Assets
Cash and Cash Equivalents
Issued capital
Capital reserves
Revenue reserves
Treasury shares (as a deduction)
Retained earnings/losses
Fair value reserve
Translation reserves
Total equity
Loans Taken
Liabilities from finance lease
Deferred tax liabilities
Other non-current liabilities
Provisions
Total non-current liabilities
Loans Taken
Trade and other payables, including derivative
financial instruments
Current tax liabilities
Debts classified in the group for sale
Provisions
Total liabilities
5.12
5.13
5.14
5.15
5.16
5.22
5.17
5.18
5.19
5.16
5.20
5.21
5.18
accounting
notes
explanations
integral
part
of financial
statements
andshould
shouldbeberead
read accordingly.
The The
accounting
notes
and and
explanations
areare
an an
integral
part
of financial
statements
and
accordingly.
40
In thousand EUR
Cash Flow Statement of Merkur Group for the period between 1 January 2010 and 31
December 2010
Income
Statement
of
Merkur
Group
for the
between
1
2010
and
Income
Statement
of
MerkurGroup
Group
the Period
Period
between
1 January
January
2010
and 31
31
Income
Statement
of Merkur
for for
the Period
between
1 January
2010 and 31
December
2010
December
2010
December 2010
36
Note
Note
6.1
6.1
6.2
6.2
6.3
6.3
6.3
6.3
6.4
6.4
6.5
6.5
6.5
6.5
6.6
6.6
6.7
6.7
2010
2010
587,798
587,798
-451,985
-451,985
135,814
135,814
12,365
12,365
-118,604
-118,604
-39,217
-39,217
-50,204
-50,204
-59,846
-59,846
18,695
18,695
-132,537
-132,537
-113,842
-113,842
In thousand EUR
In thousand EUR
2009
2009
Corrected
Corrected
875,179
875,179
-698,569
-698,569
176,610
176,610
4,783
4,783
-125,273
-125,273
-46,288
-46,288
-29,475
-29,475
-19,643
-19,643
38,054
38,054
-170,036
-170,036
-131,982
-131,982
0
0
-23,727
-23,727
-197,416
-197,416
-1,206
-1,206
-198,622
-198,622
-390
-390
0
0
-152,015
-152,015
-1,915
-1,915
-153,929
-153,929
-198,621
-198,621
-1
-1
-153,881
-153,881
-48
-48
The The
accounting
notes
andand
explanations
areare
an integral
part
of of
financial
statements
read
accounting
notes
explanations
integral
part
financial
statementsand
andshould
shouldbe
read accordingly.
The accounting
notes
and explanations
are an an
integral
part
of financial
statements
and
should
beberead
accordingly.
accordingly.
Statement
Statement of
of Other
Other Comprehensive
Comprehensive Income
Income of
of Merkur
Merkur Group
Group for
for the
the Period
Period between
between 1
1
January
January 2010
2010 and
and 31
31 December
December 2010
2010
Statement of Other Comprehensive Income of Merkur Group for the Period between 1 January 2010 and
31 December 2010
Item
Item
Net profit or loss for the accounting period
Net profit or loss for the accounting period
Other comprehensive income in the financial year
Other comprehensive income in the financial year
Changes in the Fair Value of Property
Changes in the Fair Value of Available-for-Sale
Changes in the Fair Value of Available-for-Sale
Financial Assets
Financial Assets
Eliminated/changed value of derived financial
Eliminated/changed value of derived financial
instruments for cash flow hedging
instruments for cash flow hedging
Disposal of available-for-sale financial assets
Disposal of available-for-sale financial assets
Effect of eliminating deferred tax assets and liabilities
Effect of eliminating deferred tax assets and liabilities
Foreign Exchange Differences from Translations
Foreign Exchange Differences from Translations
Related to Foreign Subsidiaries
Related to Foreign Subsidiaries
Total other comprehensive income in the
Total other comprehensive income in the
accounting period
accounting period
Total comprehensive income for the financial year
Total comprehensive income for the financial year
Of which goes to:
Of which goes to:
- owners of the controlling company
- owners of the controlling company
- non-controlling stake
- non-controlling stake
Note
Note
2010
2010
-198,622
-198,622
In thousand EUR
In thousand EUR
2009
2009
Corrected
Corrected
-153,929
-153,929
7.1
7.1
718
718
39,798
39,798
7.2
7.2
-19,363
-19,363
-48,097
-48,097
7.3
7.3
3,513
3,513
12,765
12,765
185
185
-8,882
-8,882
-1,980
-1,980
7.4
7.4
-7,770
-7,770
-4,693
-4,693
-10,136
-10,136
-208,758
-208,758
-23,670
-23,670
-177,599
-177,599
-208,758
-208,758
0
0
-177,551
-177,551
-48
-48
The The
accounting
notes
andand
explanations
areare
an integral
part
of of
financial
statements
read
accounting
notes
explanations
integral
part
financial
statementsand
andshould
shouldbe
read accordingly.
The accounting
notes
and explanations
are an an
integral
part
of financial
statements
and
should
beberead
accordingly.
accordingly.
41
41
In thousand EUR
Item
2010
2009
Corrected
-198,621
188,417
18,348
38,353
-2,941
28,148
63,183
42,374
1,398
-153,929
179,328
17,408
21,335
-234
525
103,301
33,278
1,933
-1,653
1,206
-133
1,915
66,518
104,777
59,858
-96,176
-1,941
115,371
58,768
50,965
10,622
-4,984
56,313
2,786
59,099
140,770
-7,152
133,618
13,480
3,463
12,005
0
324
6,386
37,215
-6,070
-110
-135
-11,181
-43,728
12,859
3,303
58,581
20
131
153,876
27,886
-81,933
-997
-11,976
-70,351
-220,643
11,649
-129,245
224,730
-253,794
-32,772
493,703
-463,534
-37,569
-61,836
-7,400
8,913
2,679
11,592
-3,026
5,705
2,679
CASH FLOW FROM OPERATING ACTIVITIES
Profit/loss for the financial year
Adjustments for:
Amortization of property, plant and equipment
Impairment of Assets
Profit from disposal of property, plant and equipment, and investment property
Provisions expense
Investment expenditure
Financial expenses
Foreign exchange losses
Increase of long term provisions
Income for taxes
Change in net working capital and provisions
Decrease in trade and other receivables
Decrease in inventories
Increase/decrease in trade and other payables
Decrease in accruals and provisions
Cash flow from operating activities
Return/payment of income tax
Net cash flow from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Received interest
Dividends received
Proceeds from sale of property, plant and equipment
Proceeds from the sale of intangible assets
Proceeds from sale of investment property
Proceeds from paid loans
Proceeds from sale of investments
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investment property
Acquisition of financial investments
Given loans
Net cash flow used in investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from loans taken
Costs of repaying taken loans
Interest paid
Net cash flow used in financing activities
INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the financial term
Cash and cash equivalents at the end of the financial term
The accounting notes and explanations are an integral part of financial statements and should be read
The accounting notes and explanations are an integral part of financial statements and should be read accordingly.
accordingly.
42
Item
Item
SALES REVENUE
SALES REVENUE
Cost of sold items and manufacturing costs
Cost of sold items and manufacturing costs
GROSS PROFIT
GROSS PROFIT
Distribution expenses
Administrative expenses
Financial Income
Financial Income
Financial Expenses
Financial Expenses
NET FINANCIAL EXPENSES
STAKE IN PROFIT/LOSS OF ASSOCIATED
STAKE IN PROFIT/LOSS OF ASSOCIATED
COMPANIES
COMPANIES
Other Expenses
Other Expenses
Income Tax
Income Tax
PROFIT/LOSS FOR THE ACCOUNTING PERIOD
PROFIT/LOSS FOR THE ACCOUNTING PERIOD
Net profit or loss assigned to the owners of the
Net profit or loss assigned to the owners of the
controlling company
controlling company
Net profit or loss assigned to the non-controlling stake
Net profit or loss assigned to the non-controlling stake
Cash Flow Statement of Merkur Group for the period between 1 January 2010 and 31 December 2010
Statement of Changes in Equity of Merkur Group for the period between 1 January 2010 and 31
Statement
of Changes
Statement
in Equity
of of
Changes
Merkur in
Group
Equity
forofthe
Merkur
period
Group
between
for the
1 January
period between
2010 and131
January
December
20102010
and 31 December 2010
December
2010
Item
Share
capital
Item
Legal
reserves
Balance on 31 December 2009
Balance on 31 December
54,773 2009 2,828
Comprehensive income forComprehensive
the
income for the
financial year
financial year
Net profit or loss for the accounting
period
period
-
Reserves for
Reserves Reserves for
Reserves
Reserve
Other
Reserve
Other the fair for the fair
Interest
the fair for the fair
s for reserves value of
value of
value
rate of
s for reserves
value of
Share
Legal Own own
Retained fromland Own
financial
land
swapand Translation
own
from
and Retained
financial
shares
capitalearnings
reserves
Sharesshares
earnings
earningsbuildings
Shares earnings
assets
reserve
buildings
reserves
assets
53,159
54,773
872,828
-53,15953,159
-17,078
-
- -
-
-
-
Other comprehensive income
Other
in the
comprehensive income in the
financial year
financial year
- -
-
-
-
Total comprehensive income
Total
in comprehensive
the
income in the
accounting period
accounting period
0
0
0 0
0
0
0
-198,621
-
87 -53,159
51,250
-17,078
37,952
-2,811
51,250
-11,644
37,952
In thousand EUR
TOTAL EQUITY
TOTAL EQUITY
Interest
OF
OF
CONTROLLING
NONNONrate
CONTROLLING
COMPANY
Translation
CONTROLLING
TOTAL CONTROLLING
swap
COMPANY
reserve
OWNERS
reserves
STAKE
OWNERS
EQUITY
STAKE
-2,811115,356 -11,644
16115,356
115,371
16
115,371
-
-1-198,621
-198,622
-1 -198,622
-
--
-198,621 -
- -
--
-
-
9,931-
-15,108
-
2,811
9,931
-15,108
-7,770
2,811 -10,136 -7,770
- -10,136
-10,136
-
-198,621
0
0
9,9310
-198,621
-15,108
2,811
9,931
-15,108
-7,770
2,811-208,758 -7,770
0-208,758
-208,758
0 -208,758
-
-198,621
-
TOTAL
EQUITY
In thousand EUR
-10,136
Transactions with owners Transactions with owners
Purchase of own shares
Purchase of own shares-
-
- -
-
-3,812
-
-
-
-
-3,812
-
--
- -
--
- -3,812
-
- -3,812
-3,812
-
-3,812
Sale of own shares
Sale of own shares
-
- -
-
-3,812
-
-
-
3,812
-
--
- -
--
-
3,812
-
-
3,812
3,812
-
3,812
-
--
1,030 -
- -
--
-
0
-
-
0 0
-
0
87 -53,159
61,181
-214,670
22,844
61,181
0
-19,415
22,844
15 -93,403
-93,387
15
-93,387
-
Covering the total loss from the
financial year by the decisionfinancial
of the year by the decision of the
management board
management board
-1,030
- -
54,773 2010 1,798
53,159
54,773
-1,030
-
-
-1,030
871,798
-53,15953,159
-214,670
Theitems
items
of other
comprehensive
Theincome
itemsare
income
of shown
otherare
comprehensive
shown
in the
income
netthe
worth
are
minus
shown
theindeferred
the net worth
taxes.minus the deferred taxes.
The
of other
comprehensive
in
the
net worth
minus
deferred
taxes.
38
0 -93,403 -19,415
The accounting
explanations
are
ananintegral
part
ofof
financial
should
be be
read
accordingly.
accounting notes
notesand
andThe
explanations
accounting
are
notes
integral
and explanations
part
financial
are statements
anstatements
integral and
part
and
of should
financial
statements
read
accordingly.
and should be read accordingly.
Statement of Changes in Equity of Merkur Group for the period between 1 January 2009 and 31
December
2009
Statement
of Changes inStatement
Equity of Merkur
of Changes
Group
in for
Equity
the of
period
Merkur
between
Group1for
January
the period
2009between
and 31 December
1 January2009
2009 and 31 December 2009
In thousand EUR
Capital
reserve
Legal
reserve
Other
Reserves reserves
Share
Legal
Own
for own Capital
from
capital
shares reserve
earnings reserve
Shares
Reserves
Reserves
Reserves
Reserves
TOTAL EQUITY
for the
Other
fair for the fair
Interest
Interest
OF
for the fair for the fair
Reserves reserves
value of
value of
rate value of
CONTROLLING
rate
value
of
Retained
for own landfrom
and
Own
financial
Retained
swap land
Translation
swap
and
financial COMPANY
earnings
shares buildings
earnings Shares
assets
earnings
reservebuildings
reserves assets OWNERS
reserve
In thousand EUR
TOTAL EQUITY
OF
NON-CONTROLLING
CONTROLLING
Translation
TOTAL
COMPANY
reserves
STAKE
EQUITY
OWNERS
Item
Share
Item
capital
– amended*
– 54,773
amended* 76,701
6,330
Comprehensive income for the
financial year
Net profit or loss for the
accounting period
Comprehensive income for the
financial year
Net profit or loss for the
accounting
- period -
- -
- -
--
-153.881 -
--
Other comprehensive income in
the financial year
Other comprehensive income in
the financial
year -
- -
- -
--
34 -
31,759
-
-50,917
-
0 0
0 0
00
-153,847 0
31,759
0
-4,521-
90,566 -
-9,344-
-
- 90,566
-
-
-
-
0-
-
-
0
--
-
- -1,019
-
-
-
-
0-
-
-
0
51,250
-11,644 37,952
115,356
-2,811
Total comprehensive income in Total comprehensive income in
the accounting period
the accounting
0
period
0
0
54,773
53,159
76,701
9,430
-53,159
6,330
47,222
53,159
19,491
9,430 -53,159
88,869 47,222
-2,959
Transactions with owners
Transactions with owners
financial year by the decision of
the management board
financial year by the decision of
the management
-76,701
board -4,521
- - -76,701
-9,344
Distribution of retained earnings
according to the resolution of
General Meeting
Distribution of retained earnings
according to the resolution of
General- Meeting 1,019
- -
- -
1,019-
-1,019 -
Balance
54,773 on 31 December
0
2,828
2009
54,773
53,159
087
-53,159
2,828
-17,078
53,159
TOTAL
EQUITY
292,907
-2,959
-6,951 64
292,971
292,907
64
292,971
-
-153,881-
- -48
-153,929
-153,881
-48
-153,929
34 148
31,759-4,693-50,917
-23,670
148
-
-23,670
-23,670
-
-23,670
-50,917
0 -153,847 148
31,759-4,693-50,917
-177,551
148
-4,693 -48
-177,599
-177,551
-48
-177,599
0
-
0
0
-
0
115,371
115,356
16
115,371
43
19,491-6,951 88,869
NONCONTROLLING
STAKE
43
-
-153.881
-
-
51,250
87 -53,159
37,952-17,078
-2,811
The items of other comprehensive
Theincome
items of
are
other
shown
comprehensive
in the net worth
income
minus
arethe
shown
deferred
in the
taxes.
net worth minus the deferred taxes.
The items of other comprehensive income are shown in the net worth minus the deferred taxes.
-
-
The accounting notes and explanations are an integral part of financial statements and should be read accordingly.
notes
andequity
explanations
The
accounting
integral
notes and
partexplanations
ofare
financial
statements
areinan
integral
and
should
of in
financial
bethe
read
accordingly.
statements and should be read accordingly.
*The
Theaccounting
amendments
to the
items
forare
31 an
December
2008
explained
chapter
3.6part
Errors
previous
financial years.
* The amendments to the equity*items
The amendments
for 31 December
to the2008
equity
areitems
explained
for 31inDecember
chapter 3.6
2008
Errors
are in
explained
the previous
in chapter
financial
3.6years.
Errors in the previous financial years.
-4,693
-11,644 16
Notes to the Audited Consolidated Financial Statements of Merkur Group
3. 2
1
The financial statements have been prepared in accordance with the IFRS as adopted by the EU. The accounting and
reporting rules of the IFRS and the Companies Act were observed in the process.
Merkur, trgovina in storitve, d. d. (hereinafter referred to as the Company) is registered in Slovenia at the following
address: The consolidated financial statements for the year ended on 31 December 2010 include the parent company,
its subsidiaries and associated companies (hereinafter referred to as the Group). A better overview of the group
is provided in item 4.25 Composition of the Merkur Group. The consolidated financial statements and the annual
report have been prepared in accordance with the international Financial Reporting Standards as adopted by the EU
(hereinafter referred to as IFRS) and the Companies Act (ZGD-1). The financial year coincides with the calendar year.
The Merkur Group is an international group of trade companies, and their main business is wholesale and retail of
technical products, metallurgical products and audio, video and computer items. It comprises the Merkur, Mersteel
and Big Bang divisions together with 19 companies in 8 countries, Merkur and Big Bang sales centers, franchise stores,
online stores, and state of the art wholesale warehouses and Mersteel steel service centers.
The Management Board confirmed the consolidated financial statements on 19 September 2011.
2
40
Controlling the Group
MERFIN, Holding Company, d. o. o., registered at Verovškova ulica 55, 1000 Ljubljana, Slovenia, lost its control over
Merkur, d. d. in 2010; Merkur, d. d., is the parent company of the companies in the Merkur Group. The ownership
share of MERFIN, d. o. o., dropped to 8.81% (9.79% voting rights) according to the balance on 31 December 2010. On
31 December 2009 MERFIN, d. o. o., had a 67.50% ownership or 75% of voting rights. MERFIN still held a 68.60% stake
in MERKUR on 30 June 2010, it however lost its influence on decisions as the new Management Board of Merkur, d.
d., took over on 1 July 2010. In the second half of 2010 the creditors of MERFIN, d. o. o., were selling the seized shares
of Merkur, d. d., this is why the ownership changed significantly compared to the last day of 2009 (see item Shares
and the ownership structure in the Business report), but none of the owners have a controlling share. Bankruptcy
proceedings were launched against MERFIN, d. o. o., Ljubljana, on 3 June 2011.
New Standards and Notes that Have Not yet Stepped into Force
In preparing the financial statements for 2010 the standards and notes that have not been in force yet on 31
December 2010 or their use was not mandatory in 2010 were not applied.
• IAS 24 Related Party Disclosure – simplifies the demands for the disclosure of companies related to the government, and explains the definitions of related parties (applies for financial years starting on 1 January 2011 or later).
• IAS 32 Financial Instruments: Presentation – calculates the issuing of shareholders’ rights (applies for financial years starting on 1 February 2010 or later).
• IFRS 1 First Time Adoption of International Financial Reporting Standards – additional exemptions for the first adoption (applies for financial years starting on 1 July 2010 or later).
• IFRIC 14 and IAS 19: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction – advance payment of the minimum funding requirements (applies for financial years starting on 1 January 2011 or later).
• IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (applies for financial years starting on 1 July 2010 or later).
The Group estimates that changes to these standards, corrections and notes will not significantly affect the financial
statements in the initial stages of their use.
The IFRS adopted by the EU are currently not significantly different from those adopted by the International
Accounting Standards Committee, except for the following standards and notes that have not yet been approved on
31 December 2010:
• IFRS 9 Financial Instruments (applies for financial years starting on 1 January 2013 or later).
• IFRS 7 Financial Instruments: Disclosures – the transfer of financial assets (applies for financial years starting on 1 July 2011 or later).
• Changes to standards and notes: IFRS Amendments (2010) – the amendments to IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34, IFRIC 13, mainly to clear the inconsistencies and explanations (most of the changes apply to financial years starting on 1 January 2011 or later).
3
The Grounds for Compiling Financial Statements
The Group estimates that the adoption of these standards, changes and notes will not significantly affect the financial
statements in the initial stages of their use.
3.1
The Going Concern Assumption
However, accounting the risk protection related to the financial assets and liabilities portfolio remains unregulated as
the EC has not adopted it yet.
The financial statements of the group are prepared on the assumption that the company in question is functioning
without the threat of liquidation for the foreseeable future, which means that the assets are gained and sold and that
the payables are covered on conditions of standard operations. Financial statements do not include the adjustments
that would be necessary if the going concern assumption was not true, except in including the noncurrent
receivables and payables of deterred taxes. These were eliminated entirely, and that is explained in item 5.22 Deferred
taxes.
On 16 September the Management Board of Merkur, d. d., established that the controlling company is insolvent
and must therefore observe the regulations of the Financial Operations, Insolvency Proceedings and Compulsory
Dissolution Act (hereinafter referred to as ZFPPIPP). The Management Board also notified the Supervisory Board.
In accordance with the ZFPPIPP, since the day when the insolvency was established, the Company settled its due
obligations according to the said act. Merkur, d. d., filed a bankruptcy petition on 30 September 2010, which included
a financial restructuring plan (FRP). The court issued a decision to launch the compulsory settlement and appointed
the Official Receiver. The process of the compulsory settlement of the controlling company is described in the
Accounting Report of Merkur, d. d. in item 9 Business Events after the Balance Sheet Date; the insolvency procedures
of all other companies of the Merkur Group are described in the Consolidated Accounting Report of Merkur Group in
item 9 Business Events after the Balance Sheet Date.
According to Article 40 of the ZFPPIPP the regulations of the act are used after compulsory settlement is confirmed
and final, and until the debtor does not pay all its creditors for whom the compulsory settlement is in action. In
accordance with the confirmed compulsory settlement the scheduled deadline for paying liabilities to the creditors
is 31 December 2015. In the event that the controlling company Merkur, d. d., fails to fulfill the obligations of the
compulsory settlement plan the ability of the Company to continue its activities as a going concern will become
uncertain.
The Group estimates that using the accounting of the risk protection related to the financial assets and liabilities
in accordance with the obligations of IAS 39: Financial Instruments: recognition and measurement, would not
significantly affect the financial statements of the company if used on the date of the balance.
3. 3
The Grounds for Measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following items
that are measured at fair value:
• Property,
• Investment property,
• Financial assets available for sale,
• Derivative financial instruments.
The methods used to measure fair value are described in notes related to these assets, namely:
• 4.4 Property
• 4.6 Investment Properties
• 4.7 Financial assets
• 4.3 Financial instruments
The reporting company
Declaration of Compliance
corrected by restating the
corrected by restating the
presented previous period,
presented previous period,
below.
below.
Functional and Presentation Currency
of assets,
of assets,
2008. The
2008. The
The Effect of Correcting an Error (A) on Merkur Group's Balance Sheet:
The Effect of Correcting an Error (A) on Merkur Group's Balance Sheet:
The Effect of Correcting an Error (A) on Merkur Group’s Balance Sheet:
In thousand EUR
In thousand EUR
These consolidated financial statements are presented in euro (EUR), which is the Company’s functional currency. All
financial information presented in EUR has been rounded to the nearest thousand. All derived data (totals, differences,
ratios and indices) have been calculated from a value in euros and not in thousands of euros.
3. 5
Use of Estimates and Judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported values of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
The estimates and assumptions are regularly revised. Changes to accounting estimates are recognized in the period
in which the estimate is revised.
Important assessments of uncertainty and critical judgment that the management discussed in the process
of preparing the accounting policies and that affect the values in the financial statements mostly apply to the
classification of leases, valuations of property and financial assets, impairments of given loans and receivables from
customers, and provisions.
3. 6
Errors from the Previous Periods
The Group corrects the errors from previous periods retrospectively in accordance with IAS 8 in the first financial
statements approved for publication following the discovery of errors. The errors are corrected by:
• restating the comparative amounts for the prior period(s) presented in which the error occurred;
• restating the opening balances of assets, liabilities and equity for the earliest prior period presented, if the error occurred before the earliest prior period presented.
42
In 2010, the Group corrected errors from previous periods that resulted from reclassification of leases, from classifying
long-term assets as for sale, and from reclassifying revenue and expenses related to trade receivables.
A)
Reclassifying the Leases
The Group conducts its operations on property it owns, as well as in sales centers that are under operating or finance
lease. A review of the received documents revealed that some of the operating leases for certain sales centers in
Slovenia should be reclassified as finance leases, because under contractual provisions the Group has the obligation
towards the lessor to purchase the property after the lease period expires.
The error correction affects the balance sheet of the Group and also the profit and loss statement because property
is depreciated based on the same depreciation rates as apply for this Group of assets according to accounting policies
of the Group, this is why the depreciation cost increased, as did the interest cost while the cost of leases dropped.
Because correcting the error in the year it occurred would not be sensible and cost-efficient, the error is corrected by
restating the opening balance of assets, debts and liabilities, and equity for the first presented previous period, i.e. 31
December 2008. The errors from the previous terms are explained below.
debts and liabilities, and equity for the first
debts and liabilities, and equity for the first
errors from the previous terms are explained
errors from the previous terms are explained
Asset/equity item
Asset/equity item
Property, plant and equipment
Liabilities from finance lease – long-term
Retained net earnings
Asset/equity item
Asset/equity item
Liabilities from finance lease – current
Liabilities from finance lease – current
31 Dec. 2008
31 Dec.
2008
corrected
corrected
435,987
435,987
143,216
143,216
102,116
102,116
31 Dec. 2008
31previously
Dec. 2008
previously
published
published
302,822
302,822
11,298
11,298
100,869
100,869
The difference
Thebecause
difference
of
because(A)
of
correction
correction (A)
133,165
133,165
131,918
131,918
1,247
1,247
31 Dec. 2009
31 Dec.
2009
corrected
corrected
483,263
483,263
-10,573
-10,573
146,228
146,228
4,023
4,023
31 Dec. 2009
31previously
Dec. 2009
previously
published
published
351,687
351,687
-12,462
-12,462
19,411
19,411
1,152
1,152
In thousand EUR
In thousand EUR
The difference
Thebecause
difference
of
because
of
correction (A)
correction (A)
131,577
131,577
1,889
1,889
126,817
126,817
2,871
2,871
B) Classifying Long-Term Assets for Sale
Long-Term
Assets
for Sale
B)B) Classifying
Classifying
Long-Term
Assets
for Sale
The
Group
classifies
a
long-term
asset
as
for sale,
if its
book
value
will be settled
with
abysale
and
not by
The
Groupclassifies
classifies a a
long-term
asset
as foras
sale,
its book
value
will value
be settled
a sale and
nota
use.and
Suchnot
The
Group
long-term
asset
forif sale,
if its
book
will with
be settled
with
sale
by
use.
Such
situation
already
arose
in
2009,
when
tougher
economic
situation
made
it
clear
that
the
situation
arosealready
in 2009, when
economic
it clear that
the properties
Croatia
use.
Suchalready
situation
arosetougher
in 2009,
when situation
toughermade
economic
situation
made acquired
it clear inthat
the
properties acquired in Croatia and Serbia would no be used for the planned construction of sales centers,
and Serbia
would noinbeCroatia
used forand
the Serbia
plannedwould
construction
salesfor
centers,
and activities
for selling of
thesales
properties
properties
acquired
no be of
used
the planned
construction
centers,
and activities for selling the properties and companies owning them or holding the right to their use (in
and
companies
owning
them
or
holding
the
right
to
their
use
(in
Serbia)
were
launched.
and activities for selling the properties and companies owning them or holding the right to their use (in
Serbia) were launched.
Serbia) were launched.
The correction of the error affects the balance sheet of the Group, as well as the profit and loss statement, as
The
correction
of were
the recognized.
error affects the balance sheet of the Group, as well as the profit and loss
impairment
losses
The correction of the error affects the balance sheet of the Group, as well as the profit and loss
statement, as impairment losses were recognized.
statement, as impairment losses were recognized.
The
Effect
Correcting
Error
Merkur
Group’s
Balance
Sheet:
The
Effect
of of
Correcting
anan
Error
(B)(B)
onon
Merkur
Group's
Balance
Sheet:
31 Dec. 2009
corrected
31 Dec. 2009
previously
published
In thousand EUR
The difference
because of
correction (B)
184,792
194,948
-10,156
Loans given
1,477
4,925
-3,448
8,981
0
8,981
Item
Financial assets
Loans given
42,673
43,187
-515
Trade receivables and other assets
173,471
173,613
-142
-17,078
-10,573
48
-6,506
-11,644
-11,705
61
Loans taken
398,910
399,369
-460
1,625
0
1,625
48
Reclassification of Expenses and Revenue in Connection to Trade Receivables
In its profit and loss statement for 2010, the Group recognized the expenses of impairments and write-offs
of trade receivables as other operating expenses, and the income from collected receivables as other
operating income. For better data comparison the Group also reclassified the said categories from
financial expenses to operating expenses, and from financial income to operating income respectively in
the 2009 profit and loss statement. The reclassification does not affect the net profit or loss from the
period, which is also shown in the profit and loss statement of Merkur Group for 2009.
The affect of error correction (A+B) and reclassification of expenses and income in connection with trade
receivables on the profit and loss statement of Merkur Group for 2009:
In thousand EUR
The difference
because of the
Previously
The difference reclassification of
2009
published
because of
expenses and
3. 4
opening balance
opening balance
i.e. 31 December
i.e. 31 December
173,471
173,613
-142
-17,078
-10,573
-6,506
-11,644
-11,705
61
Loans taken
398,910
399,369
-460
1,625
0
1,625
Reclassification of Expenses and Revenue in Connection to Trade Receivables
Reclassification
of Expenses
and
in Connection
to Trade
Receivables
In
its profit and loss statement
for 2010,
theRevenue
Group recognized
the expenses
of impairments
and write-offs of trade
receivables as other operating expenses, and the income from collected receivables as other operating income. For
In its profit
and loss statement
for 2010,
the Group
thefinancial
expenses
of impairments
write-offs
better
data comparison
the Group also
reclassified
the saidrecognized
categories from
expenses
to operatingand
expenses,
of
trade
receivables
as
other
operating
expenses,
and
the
income
from
collected
receivables
as other
and from financial income to operating income respectively in the 2009 profit and loss statement. The reclassification
operating
income.
For
better
data
comparison
the
Group
also
reclassified
the
said
categories
does not affect the net profit or loss from the period, which is also shown in the profit and loss statement of Merkur from
financial expenses to operating expenses, and from financial income to operating income respectively in
Group for 2009.
the 2009 profit and loss statement. The reclassification does not affect the net profit or loss from the
period, which is also shown in the profit and loss statement of Merkur Group for 2009.
The affect of error correction (A+B) and reclassification of expenses and income in connection with trade
The affect of
correction
(A+B)
and reclassification
of expenses
receivables
onerror
the profit
and loss
statement
of Merkur Group
for 2009: and income in connection with trade
receivables on the profit and loss statement of Merkur Group for 2009:
Item
Previously
The difference
published
because of
2009 correction (A+B)
SALES REVENUE
875,179
875,179
0
0
Cost of sold items
-698,569
-698,569
0
0
GROSS PROFIT
176,610
176,610
0
0
4,783
-125,273
-17,408
-8,607
-46,288
-29,475
2,704
-129,265
-15,820
-14,187
-46,288
-15,204
0
3,992
-1,588
5,580
0
-6,505
2,079
0
0
0
0
-7,766
-19,643
-11,443
-2,513
-5,687
Financial income
Financial expenses
- of which interests
38,054
-170,036
-36,628
40,132
-174,452
-33,278
0
-3,350
-3,350
-2,079
7,766
0
Shares in the losses of associated
companies
-131,982
-134,320
-3,350
5,687
-390
-390
0
0
-152,015
-146,153
-5,862
0
-1,915
-1,915
0
0
-153,929
-148,068
-5,862
0
Other operating revenue
- of which property depreciation
- of which leases for sales centers
44
2009
Corrected
In thousand EUR
The difference
because of the
reclassification of
expenses and
income
Income tax
PROFIT/LOSS FOR THE
ACCOUNTING PERIOD
49
4
Significant Accounting Policies
The Group applied the same accounting policies in all periods presented in the attached consolidated financial
statements.
The financial statements of companies in the Group are prepared on the same reporting date, and the following
basic accounting assumptions were applied: going concern, accrual basis, and consistency of presentation.
4.1
Basis for Consolidation
Subsidiaries
Subsidiaries are the companies controlled by the Group. Control is present if the Group has the possibility to decide
on the company’s financial and business policies in order to gain benefits from its operations. When estimating the
Group’s influence, the existence and impact of potential voting rights that can be exercised or exchanged are taken
into account. Financial statements of subsidiaries are included in consolidated financial statements from the date
when the Group acquires control to the date when it loses the control.
When consolidating the results, the full consolidation method is applied. Internal transactions within the Group are
excluded, which means that receivables and liabilities, and revenue and expenditure between the companies in
the Group, and unrealized profit or loss resulting from internal transactions, are not included. Unrealized losses are
excluded in the same way as unrealized profits, under the condition that there is no evidence of impairment. The
“uncontrolled share”, which is defined as the share in the company that is not owned by the controlling company, is
presented separately in equity and profit or loss.
Associated Companies
Associated companies are those companies in which the Group has significant influence, but not control over
their financial and business policies. Associated companies are accounted for by using the equity method. The
consolidated financial statements include the Group’s share in the profit or loss of an associated company, accounted
for by using the equity method from the date on which the company acquired significant influence in the associated
company to the date when it lost significant influence. When the Group’s share of loss exceeds the book value of its
financial investment in the associated company, the book value of that investment is reduced to nil, unless the Group
has an obligation to settle liabilities on behalf of the associated company.
4.2
Foreign Currency Translation
Foreign Currency Transactions
Transactions in foreign currency are translated to the respective functional currency of the Group at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated
to the functional currency at the ECB exchange date at that date. The foreign currency gain or loss is the difference
between amortized cost in the functional currency at the beginning of the period, adjusted for the effective interests
and payments during the period, and the amortized cost in foreign currency translated at the ECB exchange rate at
the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair
value are translated into the functional currency at the exchange rate at the date when the fair value was determined.
Foreign currency losses or gains are recognized in profit or loss, except for differences arising on retranslation of
available-for-sale equity instruments, or a non-financial liability designated as cash flow hedges, which are recognized
directly in equity.
Financial Statements of Foreign Subsidiaries
Assets and liabilities of foreign subsidiaries, which comprise monetary items, are translated to euro at the reference
ECB exchange rate at the reporting date; assets, for which their fair value was determined, are translated at the
exchange rate at the date the fair value was determined; assets and liabilities that comprise non-monetary items
are translated at the exchange rate at the date the transaction was carried out. Revenue and expenses of foreign
subsidiaries are translated to euro at the average ECB exchange rate in 2010. Foreign exchange gains or losses are
recognized directly in equity, in foreign exchange reserves. Since the transition to IFRS on 1 January 2004, these gains
or losses have been recognized in comprehensive income – the foreign currency translation reserve. When a foreign
company is sold (partly or completely), the foreign exchanges gains or losses are recognized in the profit and loss
statement as part of profit or loss from sales. Foreign exchange gains or losses from investments in foreign companies
made before 1 January 2004 are recognized as part of the investment.
Financial Instruments
Non-Derivative Financial Instruments
Initial Measurement
The Group’s non-derivative financial instruments comprise: investments in equity of associated companies, availablefor-sale financial assets, loans given and taken, and receivables and liabilities.
An item of property, plant and equipment (hereinafter: PPE) is initially recorded at cost, which comprises its purchase
price, import duties and non-refundable purchase taxes, and any costs necessary to bring the asset to working
condition for its intended use. The cost also comprises borrowings costs (interest) related to the construction of an
item of property, plant and equipment until the item is brought into use.
Non-derivative financial instruments are recognized at their fair value, plus any costs directly attributable to the
transaction on the date they are incurred, or on the day the Group becomes a party to the contractual terms of the
instrument. The Group derecognizes a financial instrument when all contractual rights to receive cash flows expire,
or when it transfers the contractual rights to receive cash flows from a non-derivative financial instrument with a
transaction transferring all the risks and benefits of owning the financial asset. Any share in the transferred financial
asset, which the Group makes or transfers, is recognized as individual asset or liability. Non-derivative financial assets
and liabilities are offset, and the net amount is reported in the balance sheet when, and only when the Group has the
legally enforceable right to set off the recognized amounts and there is an intention to settle on the net basis, or to
realize the asset and settle the liability simultaneously.
Subsequent or agreed investments and improvements made to assets held under finance or operating lease are
recognized as property, plant and equipment, or their part.
Subsequent Costs
Accounting for financial revenue and expense is described under item 4.22: Financial Revenue and Expense.
Costs of replacing a part on an item of PPE are recognized in the book value of the asset, if it is probable that the
company will enjoy economic benefits from the part of the asset in the future, and if the cost can be measured
reliably. Subsequent expenditures on repairs and maintenance of PPE, the purpose of which is the restoration or
maintenance of future economic benefits, are, on the basis of the originally estimated rate of efficiency and the useful
life of the asset, recognized as maintenance costs in the financial statements and as expenditure in the period when
they are incurred.
Derivative Financial Instruments
Revaluation of Property, Plant and Equipment
The Group holds derivative financial instruments in order to hedge its interest rate risk exposure, and holds options
for purchasing shares.
After initial recognition as an asset, an item of property, plant and equipment is carried under the cost model,
except for property that is carried under the revaluation model, which is based on the fair value less any subsequent
depreciation and accumulated impairment losses. Revaluation is performed every five years or less. The Group
revaluated its real estate on 31 December 2009. It also checked the values at the end of 2010, and carried out
revaluation on 31 December 2010 where necessary.
After the initial recognition, non-derivative financial instruments are measured as described below under individual
categories of financial instruments.
Derivatives are recognized initially at their fair value and attributable transaction costs are recognized in profit or loss
when incurred. Subsequently, derivatives are measured at their fair value, and changes therein are accounted for as
described below. Interest rate risk management is successful if it remains between 80% and 125%.
46
4.4
Determining Fair Value
The fair value of interest rate swaps is based on broker quotes. Adequacy of these quotes is tested by using
discounted net cash flow analysis based on the terms of each contract, and using market interest rates for similar
instruments at the valuation date.
Cash Flow Hedges
For a derivative designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially
recognized at fair value as a component of other comprehensive income, and is disclosed as hedge reserve, which
is an item of equity. The amount recognized in equity is excluded and included in profit or loss in the same period
in which the hedged cash flow affected profit or loss, and is recorded under the same item as the hedged item
in the profit and loss statement. Any ineffective portion of changes in the fair value of the derivative is recognized
directly in profit or loss. The Group discontinues hedge accounting, if the hedging instrument no longer meets the
criteria for hedge accounting, or the hedging instrument is sold, terminated or exercised, or if the Group revokes the
hedge designation. The cumulative gain or loss recognized in other comprehensive income remains presented in the
hedging reserve as long as the forecast transaction does not affect profit or loss.
Since the controlling company is in compulsory settlement proceedings, hedge accounting was discontinued in
accordance with contract provisions, and the Group recognized the cumulative effect in the profit and loss statement
for 2010.
If an asset’s book value is increased as a result of revaluation, the increase is recognized in other comprehensive
income as revaluation reserve under equity. Any decrease is recognized in other comprehensive income as a
decrease in the revaluation reserve if the amount related to certain property was recognized as surplus under equity
before, while the remaining loss is recognized directly in the profit or loss.
Determining Fair Value of Real Estate Carried Under Revaluation Model
The fair value of property is based on the market value. The market value of a property is the estimated amount for
which a property could be exchanged on the date of valuation between knowledgeable, willing parties in an arm’s
length transaction.
Derecognizing Property, Plant and Equipment
When an asset is derecognized (disposed of or withdrawn from use), the revaluation reserve included in equity is
transferred directly to retained earnings.
Depreciation, Depreciation Methods, and Useful Lives
Depreciation of PPE items begins on the first day of the month following the month when they are available for use.
Depreciation is calculated on a straight-line basis over the estimated useful lives of each item of property, plant and
equipment, and is recognized in the profit and loss statement. The estimated useful lives of assets are as follows:
4.3
Useful life
40 years
30 years
25 years
10 years
5–20 years
6–16 years
4–10 years
4 years
3–5 years
Land, advances for PPE, PPE under construction or in process of acquisition, and art works are not depreciated.
4.5
Impairment of Intangible Assets
Impairment of goodwill, intangible assets with undetermined useful lives, and intangible assets not yet in use, is
carried out if their recoverable amount is lower than their book value on the reporting date.
Derecognizing Intangible Assets
An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use
or disposal. The gain or loss upon derecognizing an intangible asset is the difference between any net disposal
proceeds and book value of the asset. It is recognized in profit or loss when derecognition occurs.
4.6
Investment Property
Investment properties are properties which the Group holds either to earn rental income, or for capital appreciation,
or for both.
Intangible Assets
Goodwill
All business combinations are accounted for using the purchase method. Any difference between the cost of the
business combination and the acquirer’s interest in the net fair value of the identified assets, liabilities and contingent
liabilities is recognized as goodwill or negative goodwill.
An investment property is initially measured at its cost, comprising the purchase price and transaction costs. These
costs include legal fees, property transfer taxes, and other transaction related costs.
Goodwill is given at cost minus any accumulated impairment loss. Goodwill is allocated to cash-generating units
and is not amortized but is tested for impairment annually. In respect of associated companies, the book value of
goodwill is included in the book value of the investment in the associated company.
If it needs to be determined whether an asset is an investment property or property, the asset is deemed investment
property if over 80% of its total value is used for renting out.
Negative goodwill that arises upon acquisition is recognized directly in profit or loss.
Measurement Subsequent to Initial Recognition
Other Intangible Assets
48
Initial Measurement
Assets that are recognized as intangible assets include non-cash intangible assets such as software, and long-term
patents and licenses.
Cost of internal research and development, brands and similar items are not recognized as intangible assets, but are
immediately recognized as cost or operating expenses in the period when they are incurred.
Intangible assets are carried at cost, less any amortization, and any accumulated impairment loss (see accounting
policy Impairment of Assets).
Amortization
Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, and is
recognized in the profit and loss statement. Amortization of intangible assets begins when the asset is available for
use. Estimated useful lives are as follows:
Type of intangible assets
Software Long-term licenses
Useful life
5 years
According to contract
Subsequent to initial recognition, investment property is measured at fair value. Fair value of the property reflects
the market conditions on the balance sheet day. The Group revaluated the investment properties on 31 December
2010. The valuation of fair values of investment properties is performed by an authorized appraiser and in line with
the prescribed methodology. Gains or losses arising from a change in the fair value of investment property are
recognized in profit or loss for the period in which they arise.
An external independent appraiser valuates the Group’s investment portfolio. The fair value of a property is based on
the market value, which is the estimated amount for which a property could be exchanged on the date of valuation
between knowledgeable, willing parties in an arm’s length transaction.
In case it is impossible to determine current prices in an active market, the valuations are prepared by considering the
aggregate of the estimated cash flows expected to be received from renting out the property. A yield that reflects
the specific risks inherent in the net cash flows is then applied to the net annual cash flows to arrive at the property
valuation.
Derecognizing Investment Property
An investment property is derecognized on disposal or when the investment property is permanently withdrawn
from use and no future economic benefits are expected from its disposal. The gain or loss on disposal should be
calculated as the difference between the net disposal proceeds and the book value of the asset and should be
recognized in profit or loss.
Type of property, plant and equipment
Business premises, shops, warehouses
Auxiliary warehouses and other facilities
External surfaces and rail tracks
Warehouse tents, containers, greenhouses
Warehouse equipment
Technological equipment, work devices, and machines
Shop, office and other equipment
Small tools above EUR 500
Computer and telecommunications equipment
Financial Assets
Impairment of Assets
Available-for-Sale Financial Assets
An asset is impaired when its book value exceeds its recoverable amount.
The majority of Group’s financial assets are classified as available for sale. Initially, financial assets and liabilities should
be measured at fair value on the date of acquisition. Subsequently, they should be measured at fair value, which is
based on the market value. The fair value of financial instruments that are quoted in an active market is their uniform
bid price at the balance sheet date; the fair value of financial instruments that are not quoted in an active market is
the weighted average price of securities from the transactions in the period, or a value based on a valuation model.
Changes in fair value are recognized directly in other comprehensive income.
At each balance sheet date, all assets are reviewed to look for any indication that an asset may be impaired. If there is
an indication that an asset may be impaired, then the company must calculate the asset’s recoverable amount.
When the asset is derecognized, the cumulative gain or loss is recognized in profit or loss. Impairment losses and
foreign exchange gains or losses on available-for-sale financial assets are recognized in profit or loss.
The recoverable amount of goodwill, intangible assets with undetermined useful lives, and intangible assets not yet
in use, are valuated every year at the reporting date.
On disposal of financial assets, the Group uses the weighted average price method.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing
parties in an arm’s length transaction.
When determining the fair value, the Group follows the following hierarchy:
• The first level presents quoted market prices in an active market on 31 December (unadjusted) for assets or liabilities of the same class;
• Level two measurements use market based inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
• The third level presents inputs on assets and liabilities that are not based on observable market data.
The Group uses the stock market prices as a basis for the fair value of financial assets. If the financial instrument is not
listed, or the market is deemed inactive, the company determines the fair value of the financial instrument by using
inputs from levels two and three.
50
4.10
4.8
Loans Given
Loans given are initially measured at their fair value, and subsequently at amortized cost. Any differences between
the fair value and amortized cost are recorded in the profit and loss statement over the period of the loan repayment.
The effective interest method is applied.e.
4.9
Long-term Assets/Debts Classified as for Sale
Long-term assets and groups are classified as for sale if their book value will be recovered mostly through sale
and not further use. These criteria are met only when the sale is very likely and the long-term asset is available for
immediate sale in its present state. The asset must also be actively marketed, and activities must be in place to
achieve a price that corresponds to its present fair value. The sale should be concluded within a year of classifying an
asset as for sale, unless special circumstances arise, in which case the period available for concluding the sale can be
prolonged.
Long-term assets (and groups) classified as for sale are measured at the lower of their book or fair value less costs of
sale.
Debts included in the group classified as for sale are presented separately from other debts in the balance sheet.
The recoverable amount is the asset’s fair value less costs to sell, or its value in use, depending on which is higher.
If the asset’s book value must be decreased, impairment loss is recognized in profit or loss for the period, unless it can
be offset against revaluation reserve from past revaluations of the same asset.
Financial Assets (Including Receivables)
A financial asset is impaired, and impairment losses are recognized, if there is objective evidence that as a result of
one or more events that occurred after the initial recognition of the asset the estimated cash flow from the asset has
decreased, and this can be reliably measured.
Objective evidence on impairment of assets can be: debtor’s failure to fulfill obligations or breach of contract;
restructuring of the amount that debtors owe to the Group in agreement with the Group; indications that the debtor
will go bankrupt; the disappearance of active market for the security.
In case of equity securities, the objective evidence on the impairment includes a significant and prolonged drop of
the fair value below the purchase price.
Impairment of Receivables and Loans Given
The Group can assess the evidence of impairment individually or collectively. All significant receivables are assessed
individually for specific impairment. If it is assessed that the book value of receivables exceeds their fair value, i.e. the
recoverable amount, the receivables are impaired. If it is assumed that the receivables will not be settled by the set
date of payment or in their full amount, they are deemed doubtful. If court proceedings have been launched, they
are deemed disputed.
Receivables of smaller values are assessed for impairment collectively, by grouping together receivables with similar
risk characteristics. Receivables are grouped together by maturity. When assessing collective impairment, the Group
uses past trends of the probability of default, time required to collect the receivables and the losses incurred, adjusted
for management’s assessment as to whether the actual losses are likely to be higher or lower than suggested by
historical trends considering current economic and credit conditions.
Considering experience from the previous years and the difficult economic situation in 2010, the Management
Board assessed that the possibility to recover the receivables has decreased significantly and decided to amend the
accounting estimate regarding the recoverable amount. The receivables are adjusted by 100% of their book value
if their maturity has expired by over 180 days. Receivables for which a collection procedure has been launched in
court, and receivables in compulsory settlement proceedings, are adjusted by 100%. Until 2009, receivables have
been impaired by different percentages by groups or based on individual assessments and supported by bad
debt insurance. Previous assessments on recoverability of receivables are explained in more detail under 1.13 of the
Accounting Report for 2009.
The Group evaluates evidence about the impairment of loans individually for each significant loan.
An impairment loss of a financial asset measured at amortized cost is calculated as the difference between its book
value and the estimated future cash flows discounted at the original effective interest rate. Losses are recognized
in profit or loss as revaluation of receivables. Part of the impaired asset thus continues to be recognized through
the unwinding of the discount. When a subsequent event results in a decrease of impairment loss, the decrease in
impairment loss is reversed through profit or loss.
4.7
Net Realizable Value of Inventories
The Group assesses evidence on impairment of available-for-sale financial assets for each financial asset individually.
The cost of inventories may not be recoverable if the inventories are damaged, or have become wholly or partially
obsolete, or if their selling prices have dropped. The cost of inventories may also not be recoverable if the estimated
costs of completing or selling them have increased. The practice of writing inventories down below cost to net
realizable value is consistent with the view that assets should not be carried in excess of amounts expected to be
realized from their sale or use. The amount of any write-down of inventories to net realizable value and all inventory
related losses are recognized as an expense in the period in which write-down or losses occur.
If the impairment in the fair value of an available-for-sale financial asset was recognized directly as revaluation
surplus and there is objective evidence that the asset was long-term impaired, the impairment loss is recognized as a
financial expense in the profit and loss statement.
Objective evidence of impairment of an investment for a listed company is a prolonged or significant decrease of
the financial investment’s fair value below its book value. A prolonged decrease is a decrease of over 9 months, and a
significant decrease means that the fair value dropped under the book value by 40% or more.
Non-Financial Assets
At each reporting date, the Group reviews the book value of significant non-financial assets, except for deferred tax
assets, to determine whether there is any indication of impairment. If such indication exists, the asset’s recoverable
amount is estimated.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less
costs to sell. The asset’s value in use is estimated by discounting the estimated future cash flows to their present
value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows of other assets or groups of assets (the cash-generating unit).
52
Write-offs or partial write-offs of damaged, expired or unserviceable inventories are performed regularly during
the year or during the inventory by individual items. Based on a detailed review of the inventories through the
criteria of the turnover and age in 2010, the Management Board estimated that the realizable value of slow-selling
inventories is extremely low, and decided to amend the estimated realizable value of inventories, based on which
a flat-rate correction was carried out in the amount of 100% of the book value of articles with zero turnover and
inventories over one year old at the balance sheet date. Until 2009, lower criteria were used in estimating the
inventories’ realizable value and the inventories were impaired by 5–80% of their book value, depending on the type
of the product. Previous estimations on inventories’ realizable value are explained in more detail under 1.12 of the
Accounting Report for 2009.
4.12
Trade Receivables and Other Assets
Measuring the Receivables
The impairment of an asset or a cash-generating unit is recognized if its book value exceeds its recoverable amount.
Impairment is recognized in the profit and loss statement. Impairment losses recognized in respect of a cashgenerating unit are allocated first to reduce the book value of any goodwill allocated to the unit, and then to reduce
the book values of the other assets in the unit (group of units) on a pro rata basis.
At initial recognition, trade receivables are measured at amounts evident from the relevant documents under the
assumption that the amounts owed will also be collected. As a rule, trade and other receivables are measured at
amortized cost calculated under the effective interest method. Current trade receivables are not discounted at the
balance sheet date.
4.11
Impairment of Trade Receivables
Inventories
Measurement of Inventories
If there is objective evidence of an impairment of receivables, the loss is measured as the difference between the
book value and the expected recoverable amount of receivables.
Inventories must be stated at the lower of historical cost and net realizable value. Net realizable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and selling.
Impairment of receivables is described in more detail under 4.9 Impairment of Assets
The Group determines the cost of inventories by using the weighted average cost method.
Writing off receivables requires appropriate supporting documents: rejection of statement of balances of receivables,
court decision, conclusion of compulsory settlement, conclusion of bankruptcy, and other appropriate documents.
The cost of purchase of inventories comprises the purchase price, import duties and other taxes (other than those
subsequently recoverable from the tax authorities), and transport, handling and other costs directly attributable to
the acquisition of goods or materials. Trade discounts, rebates and other similar items are deducted in determining
the cost of purchase.
4.13
When inventories are sold, their book value is recognized as an expense in the period in which the related revenue
was accounted for.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and in the bank, and demand deposits.Automatic bank overdrafts
are not cash but a short-term financial liability. Automatic bank overdrafts are not cash but a short-term financial
liability.
Automatic bank overdrafts are not cash but a short-term financial liability.
4.14
Equity
Total equity of the Group is the total of its liabilities to owners that fall due if the enterprise discontinues its operations.
It is defined by the amounts invested by owners and the amounts generated during operations that belong to
owners, and reduced by loss from operations, repurchased treasury shares, and withdrawals (payouts). Total equity
includes share capital, capital reserves, revenue reserves, retained earnings, fair value reserves, and treasury shares as a
deductible item.
Impairment of Available-for-Sale Financial Assets
Repurchase of Share Capital (Treasury Shares)
Provisions for State Subsidies
When own shares or stakes recognized as part of the share capital are repurchased, the amount paid, which includes
directly attributable costs and is net of any tax effects, is recognized as a deduction from equity. Repurchased
shares or stakes are classified as treasury shares and are deducted from total equity. When treasury shares are sold or
reissued, the amount received is recognized as an increase in share capital, and the resulting surplus or deficit on the
transaction is transferred to retained earnings or capital reserves.
The Group carries provisions from retained subsidies for employing a surplus quota of disabled persons. The Group
uses the provisions for improving working conditions for disabled persons.
Dividends are recognized as the liability towards shareholders in the financial statements in the period in which the
shareholders’ meeting adopted a resolution on paying dividends.
4.15
Loans Taken
Loans taken are initially recognized at fair value, which is not reduced by attributable transaction costs. Subsequent to
initial recognition, loans are stated at amortized cost, and any difference between historical cost and amortized cost is
recognized in the profit and loss statement over the period of the loan on an effective interest basis.
4.16
Trade and Other Payables
As a rule, trade and other payables are measured at amortized cost calculated under the effective interest method.
Current trade payables are not discounted at the balance sheet date.
Trade and other payables are initially recognized at amounts evident from the relevant documents, which show the
receipt of a product or a service, performed work or charged cost, or expense, or a share in profit or loss.
4.17
54
Provisions
Provisions are recognized when a present legal or constructive obligation has arisen as a result of a past event, and it
is probable that settling the obligation will require an outflow of resources embodying economic benefits. The effect
of the time value of money is material, so the amount of a provision equals the present value of the expenditures
expected to be required to settle the obligation.
Provisions for Severance Pay and Anniversary Bonuses
In accordance with the legal requirements and the collective agreement, the Group must pay anniversary bonuses
and severance pay upon retirement to employees, for which long-term provisions have been set aside. There are no
other liabilities in respect of pension and retirement plans.
Provisions for Lawsuits and Other Possible Obligations
The Group has provisions for lawsuits against it. Annually, the Group reviews the need for setting aside provisions
based on the situation in the dispute and expected outcome.
The Group also has provisions set aside for other obligations, for which there is a probability of settlement in the
future, i.e. for issued sureties, mortgages and tax liabilities.
Obligations for short-term employee income are measured on an undiscounted basis and are recognized as
expenses as the work in question is performed. A liability is recognized for the amount expected to be paid within
twelve months after the period expires if the Group has a present legal or constructive obligation to make this
payment for a past service provided by the employee and the obligation can be reliably measured (e.g. obligation
for a unspent annual leave).
4.18
Leases
Types of Leases
Leases where Group assumes all the significant risks and benefits arising from ownership are classified as finance
leases. Other leases are classified as operating leases. Leased assets are not recognized in the Group’s balance sheet.
Finance leases
Initially, finance leases are recognized as assets and liabilities in the balance sheets at amounts equal to the fair
value of the leased asset or, if lower, the present value of the minimum sum of lease payments, each determined
at the inception of the lease. Subsequent to initial recognition, the asset is accounted for in compliance with the
accounting policies applied to such an asset.
Operating leases
Payments made under operating leases are recognized as expense on a straight-line basis over the term of the lease.
4.19
Income Tax
Income tax comprises current and deferred tax. Income tax is recognized as expense in the profit and loss
statement, except to the extent that it refers to items recognized directly in comprehensive income, in which case it
is recognized in equity.
Current tax payable is the tax expected to be paid on the taxable income for the financial year, using tax rates
applicable at the balance sheet date, and any adjustment to tax payable related to previous periods.
Deferred tax is recognized using the balance sheet liability method, based on temporary differences between the
book values and tax bases for individual assets and liabilities. The amount of deferred tax is based on the expected
manner of realization or settlement of the book value of assets and liabilities, using tax rates applicable at the
balance sheet date, or tax rates in the period in which elimination of deferred tax assets or liabilities is expected.
A deferred tax asset is recognized to the extent that it is probable that taxable profits will be available against which
it can be utilized in the future. Deferred tax assets are reduced to the extent that it is no longer probable that it will
be possible to utilize the benefit of that deferred tax asset.
Dividends
Short-Term Employee Income
Revenue
Revenue from Selling Goods and Products
Sales revenue from sale of goods and products is recognized at the fair value of the consideration received or
receivable, less returns, and trade and quantity discounts. Revenue is recognized when the significant risks and
rewards of ownership have been transferred to the buyer, there is certainty about the recovery of the consideration
and the associated costs, or possible return of goods and products, and when the amount of revenue can be
measured reliably.
The Customer Loyalty System
Some companies in the Group (in the Merkur division) issue loyalty cards to their buyers. The card is used to record
every purchase in sales centers or franchise stores, which brings extra benefits to card holders. Every three months
card holders receive a discount coupon, which they can use upon their next purchase. Depending on the total value
of all purchases made in the three months, card holders receive a credit in the extent of 2–5% of the total value of
purchases. Revenue from rewarding loyal customers is deferred based on the fair value of the awards and the awards
expected to be redeemed, until the awards are actually redeemed.
Revenue from Services Rendered
Revenue from services rendered is recognized in the profit and loss statement in proportion to the stage of
completion of the transaction at the reporting date. The stage of completion is estimated by reviewing the
performed work.
Rental Income and Finance Leases
56
Administrative expenses (including depreciation)
General and administrative expenses (including depreciation) include costs related to purchases and administration,
including auxiliary activities. They are recognized in their total amount as operating expenses in the period in which
they were incurred.
Costs by Nature
Cost of materials and cost of services are amounts stated in the suppliers’ invoices and other documents, less
discounts granted upon the sale or subsequently, also due to an early payment.
Depreciation/amortization is calculated per unit at rates taking into account the shortest useful life of an item of a
tangible or intangible asset.
Labor costs include gross wages and salaries under the collective agreement and the individual employment
contracts, contributions and taxes paid by the employer, voluntary additional pension insurance, other labor costs
(holiday allowance, transport allowance, meals allowance, etc.).
Other operating expenses arise in connection with impairment losses or write-downs and upon disposal of property,
plant and equipment, and investment property due to loss on disposal.
Other expenses are included in the presentation of the profit and loss statement due to significant one-off expenses,
which however did not impact the profit or loss.
4.22
Financial Income and Expenses
Financial Income
Financial income comprises interest income from investments and trade receivables, foreign exchange gains,
dividend income, and gains on the disposal of available-for-sale financial assets.
Rental income from investment property is recognized as revenue on a straight-line basis over the term of the lease.
Payments made under finance lease are recognized as revenue on a straight-line basis over the term of the lease.
Interest income is recognized in profit or loss as it accrues using the effective interest method. Dividend income is
recognized in profit or loss on the date that the shareholder’s right to receive payment is realized, which in the case of
listed securities is the ex-dividend date.
Financial Expenses
Other operating revenue includes income arising upon disposal of property, plant and equipment, and investment
property as a surplus of their sales value over their book value, and from revaluation of investment property to fair
value, and revenue from recovered receivables (including reversal of impairment loss from receivables).
Financial expenses comprise borrowing costs, unwinding of the discount on provisions, impairment losses and writeoffs related to financial assets, and losses on hedging instruments that are recognized in profit or loss. All borrowing
costs are recognized in profit or loss using the effective interest method, unless they are attributed to property,
plant and equipment under construction. Foreign exchange gains and losses are reported on a net basis. Financial
expenses are recognized when accounted for, irrespective of related payments.
4.21
Expenses
Operating Expenses
Operating expenses are classified according to their function as cost of goods sold, selling cost, general and
administrative expenses (administration and purchases), and other operating expenses that are not classified as costs.
Cost of goods sold
The reposting of cost of inventories of merchandise to cost of goods sold is made on the basis of the weighted
average price method. The cost of goods sold is directly decreased by rebates and super-rebates that are
subsequently granted by the suppliers. Rebates are partly included in the cost of goods sold.
Selling cost (including depreciation)
Selling cost (including depreciation) includes all costs related to the sale of products and services. Since these
costs are no longer held in inventories, they are recognized in their total amount under operating expenses in the
accounting period in which they were incurred.
4.20
The cash flow statement has been prepared using the indirect method and based on data from the balance sheet as
on 31 December 2009 and 31 December 2010, and data from the profit and loss statement for 2009. Cash and cash
equivalents in the cash flow statement present cash on hand and in bank accounts, and bank deposits with original
maturity of up to three months.
4.24 Financial Risk Management
In relation to exposure to business risks, the Merkur Group follows the current situation in world markets. The
unsuccessful management buyout and the economic crisis had the most significant negative impact on the
operations, and the most negative consequence was losing the trust of our partners – especially banks and suppliers
– liabilities towards which were increased to the extent that we were unable to repay them fully in the originally
agreed deadlines. For this reason, we pay special attention to financial, especially credit and liquidity risks.
With the beginning of economic crisis new reporting methods have come to the forefront, which focus not only on
numbers but also different scenarios and analyses, while risk has become a fact we must be aware of, monitor and
manage. In managing financial risks we follow the adopted financial policy, which includes guidelines for efficient
and systematic financial risk management. The aims of active risk management are:
• Achieving stability of operations and reducing the exposure to individual risks to an acceptable level,
• Increasing the market value of the Merkur Group, its competitiveness and credit rating,
• Having more predictable cash flows and profit,
• Reducing tax liabilities, and
• Reducing the impact of extremely harmful events.
58
Merkur Group estimates financial risks by the following groups:
• Credit risks include the risk that customers or other business partners might fail to settle their liabilities to the company thus reducing the company’s economic benefits;
• Market risks include the interest rate risk, foreign currency risk, inflation risk, liquidity risk, and risk of changes in the market prices of securities;
• Insolvency risk is the risk of short-term and long-term inability to settle the liabilities on time.
In the Notes to Financial Statements, risks are also quantified.
Credit risk
The exposure of Merkur Group to credit risk depends on partners and economic situations in their countries of origin.
Merkur Group has adopted a policy of active credit risk management, which comprises regular monitoring of
outstanding receivables, limiting exposure to individual customers through cap system, offering incentives for early
settlements, charging penalty interest, bad debt insurance, and a policy of collecting receivables.
Because of the increased volatility of the global market, the Group has been implementing risk management
measures even more dynamically and consistently than in the past in order to reduce the impact of extraordinary
and unpredictable harmful events. Smaller customers have also been monitored more intensively. Partners that were
granted loans are also subject to credit risk monitoring. If there is risk of default, we make allowances for doubtful
debts.
At the beginning of September, we transferred the finance responsibility processes from the financial to the
commercial department, thus improving the awareness on the importance of credit risk management in the
company, and updated the main measures for efficiently managing the credit risk, which are:
• Any future receivables must be insured already upon concluding the contract, and the credit rating of new and existing customers is evaluated by the credit rating office. Collateral can be in the form of a mortgage, securities, a bank guarantee or a letter of credit for customers with high risk.
• A special team monitors receivables of individual debtors. The team also coordinates the operations’ dynamics in advance and examines the adequacy of risk exposure, and based on this increases or decreases the cap in collaboration with the credit rating office.
• A cap is set for regular customers based on estimated turnover (depending on the credit rating and acquired collateral).
• A procedure for collecting receivables (including through court) from customers is in place.
Credit rating is static and is performed based on financial statements, depending on the size of the partner and
the developments. In addition, depending on the partner’s importance, the Group also uses independent risk
assessments and recommendations on the cap amount by an external, independent provider, information on current
financial soundness, and for Slovenian entities also daily information on blocked bank accounts and ten-year history
of transactions with Merkur, d. d., together with the activities of partners’ founders, owners and representatives and
their involvement in critical procedures.
The management of Merkur Group believes that despite these risk management measures the exposure to risks
remains high, especially due to high impairments, and that the trend is not changing.
Market Risk
The market risk is the risk that changes in market prices, such as those of foreign exchange rates, interest rates, or
equity, will affect the revenue of Merkur Group or value of its financial instruments. Market risk management is aimed
at managing and controlling exposure to market risks within reasonable limits while at the same time optimizing the
profit.
Merkur Group used derivatives to minimize the fluctuations in profit or loss due to market risks, however they were
discontinued when the compulsory settlement proceedings were launched.
Interest Rate Risk
The interest rate risk is a risk that the value of the financial instrument might fluctuate due to changes in market
interest rates. Two thirds of loans of Merkur Group are indexed with the EURIBOR variable interest rate, so the Group’s
operations are exposed to interest rate risk.
As the recession started, the EURIBOR rate became very unpredictable. After record high levels at the end of 2008, the
reference level dropped to a record low level in the first half of 2009 and continued to drop slowly until the end of the
first quarter of 2010, when it started growing again. As the market interest rates were decreasing, margins and bank
costs were increasing, so the borrowing costs did not actually drop. On the other hand, we should not expect the
margins to decrease now that the reference interest rate started increasing again.
To avoid risks caused by the extreme volatility of interest rates, the Group adjusts the asset related interest rates to the
interests from liabilities. The Group also decided to hedge interest rate risk with derivative financial instruments based
on the financial institutions’ forecasts on medium-term changes in interest rates.
In 2010, Merkur Group also hedged interest rate risks with interest rate swaps, which it applied to one fifth of the
exposure to interest rate risks, however, the instrument was no longer valid once the compulsory settlement
proceedings were launched.
The share of loans indexed with the variable interest rate, and the trend of reference interest rates shifting from
the record high levels indicate increased interest rate risk in Merkur Group. However, in line with the Financial
Restructuring Plan and as part of the compulsory settlement proceedings, Merkur, d. d., and Mersteel, d. o. o., will
sign loan rescheduling contracts for the major part of their loans, which will bring a fixed interest rate, and return the
interest rate risks within reasonable limits. The Management Board estimates that the exposure to interest rate risk in
2010 was moderate.
Currency Risk
Currency risk is a risk that the economic benefits of the company will decrease as a result of changes in the foreign
currency exchange rates.
We defined the most significant currency pairs, which are classified by geographical location, the size our foreign
companies and the origin of supplies. The pairs are EUR/HRK, EUR/RSD and EUR/USD. We determined the pairs taking
into account the level of transaction and translation exposure in the financial year. In addition to potential exposure,
coefficients of variation are also used to measure the level of currency risk for more important currency pairs.
In all markets, we try to curb the currency risk by integrating the exchange rate in the difference in price, with natural
hedging, i.e. balancing sale and procurement, by better matching of outflows and inflows, and, if possible, by taking
out loans in the local currency.
In 2010, Merkur Group continued to hedge interest rate risks with the EUR/CHF cross-currency swap, which it
concluded in December 2007. To mitigate the expected loss, Merkur prolonged the instrument until March 2015 at
the end of 2009. The instrument was discontinued once the compulsory settlement proceedings were launched.
The Management Board assesses the currency risk related to transactions in major currency pairs as moderate. Taking
into account the increase of the share of transactions in Merkur Group’s entire operations, we also assess the exposure
to currency risk in entire Merkur Group as moderate, and the trend as unchanging.
4.23 Cash Flow Statement
Merkur Group has equity shares in its portfolio. The most significant risk regarding equity shares is a decrease in
their market price, which changes according to supply and demand, which are based on the market participants’
expectations regarding the companies’ future.
The market value of a security mostly depends on the issuer and its operations and other activities (for example
mergers or restructuring). Market conditions can also be largely affected by changes in the legislation, especially
regarding money and capital markets regulation, international operations and taxes.
An investment into securities should be impaired, when there is objective evidence indicating that one or more
events resulted in a decrease of estimated future cash flows from the investment. The evidence must be measurable,
and in case of investments in equity securities the evidence can be significant or prolonged drop of the fair value
below the cost.
In relation to this risk, Merkur Group’s exposure is the highest in relation to its investments in shares of Gorenjska
banka, Sava, and Perutnina Ptuj.
Based on the above facts, the Management Board assesses that the exposure to the risk of changes in market prices
of securities is unchanging and considerable.
Based on the re-audited annual report for 2009, financial statements from 30 June 2010, and documents produced by
relevant support offices and consultants, the Management Board of Merkur, d. d. and the management of Mersteel,
d. o. o., estimated in September 2010 that both companies met all the criteria for declaring insolvency as determined
in Article 14 of the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act. The decision
on insolvency was included in Merkur and Mersteel’s reorganization plan and presented legal protection of the
companies’ assets and the creditors’ receivables.
On 3 November 2010, the Kranj District Court issued a decision on launching compulsory settlement proceedings in
Merkur, d. d., and two days later it issued the decision on launching compulsory settlement proceedings in Mersteel,
d. o. o. Both cases of compulsory settlement are managed in line with the provided Financial Restructuring Plans.
After the decision on compulsory settlement, which is a necessary but not sufficient condition for decreasing
the insolvency risk, is made final, we will have to regain trust of our customers, suppliers and banks with
successful operations, payments made in time, and well-stocked stores. This will be a long process and only strict
implementation of the plan will revive the operations and relieve the solvency crisis.
Based on the listed hedge measures and the current situation, the management of Merkur Group estimates that the
exposure to insolvency risk is high, and the trend is currently unchanging.
Inflation Risk
Merkur Group has a policy of transferring the increase in purchase prices to the sale prices, and strong and successful
efforts to curb and decrease inflation have been observed in non-EU countries in which the Group’s subsidiaries are
operating, so the Management Board assesses that the exposure to inflation risk is constant and low.
Risk exposure in 2010
Insolvency Risk
The constant inflow of retail payments makes risk management easier.
The Group is subject to international economic trends, which was the reason why it shortened the currency
deadlines for suppliers due to decreased liquidity in the market as soon as the economic activity slowed down. The
crisis was also reflected in smaller supply of loans and banks’ demand to increase collaterals, and in higher margins for
new loans.
In the middle of the year, after new supervisory and management boards were appointed, we started talks on
financial restructuring with creditors and suppliers. The first step in the process was signing an agreement on mutual
relations with the major creditor banks, in which we agreed on a grace period on the repayment of the principle
until 30 September 2010, after which the consortium of banks would make a decision on the options and means of
financial restructuring based on a presentation of Merkur and Mersteel’s reorganization and revitalization prepared by
the Management Board with the support of the strategic consultancy firm Roland Berger.
high
trend
interest rate
S
trend
S
foreign currency
moderate
moderate
trend
MARKET
changes in prices of securities
considerable
trend
inflation
Due to lower inflows, we adopted several measures as the crisis started:
• Postponement of non-urgent investments,
• Redefinition of strategic decisions that required funding, and
• Stricter implementation of internal regulations in planning and collecting receivables from major customers.
Nevertheless, despite the listed measures, the Group’s solvency deteriorated, above all due to excessive liabilities
arising from unsuccessfully performed MBO in 2010, to the point where we were unable to fully settle our liabilities
towards banks and suppliers within originally agreed deadlines. This also resulted in one of most problematic
consequences of difficult operating conditions – the loss of trust from our partners (above all credit insurance
companies, banks and suppliers).
credit
CREDIT
FINANCIAL
60
The insolvency risk is a risk that the company may have difficulties in obtaining sufficient funds to settle its financial
obligations. The Group managed this risk with an active policy of liquidity management. The aim was to eliminate
discrepancies between cash inflows and outflows. The policy comprised:
• A system of caps determining the lowest amount of cash and highly liquid assets available to the Group at all times,
• Centralized management of cash transactions to provide liquidity and solvency,
• Dispersed external financial sources,
• Dispersed maturity dates for liabilities,
• Credit risk management policy ensuring regular settlement of receivables,
• Credit lines available at the banks enabling the Group to draw loans when needed,
• The option of activating short-term investments.
Merkur Group
low
trend
INSOLVENCY
insolvency
high
trend
KEY:
Risk exposure
low
change
moderate
trend
considerable
increasing
high
none
unchanging
–
decreasing
S
Risk exposure is the product of the effect
risk has on operations and the probability
and frequency of risk arising.
Risk of Changes in Market Prices of Securities
4.25 Composition of the Merkur Group
Changes
in the
the
Composition
of Merkur
Merkur
Group
Changes
in the
Composition
of
Merkur
Group
Changes
in
Composition
of
Group
On 31 December 2010, Merkur Group comprised 19 companies: the parent company Merkur, d. d., 17 subsidiaries and
one associated company. Financial statements of subsidiaries are included in Merkur Group’s consolidated financial
statements under full consolidation method, and financial statements of associated companies are included in
consolidated financial statements under the equity method.
In 2010,
no
major
changes occurred
ininthe
composition
of Merkur
Group.
Two companies
received capital
injections:
Changes
in
the
Composition
of Merkur
Group
In 2010,
2010,
no
major
changes
occurred
the
composition
of Merkur
Merkur
Group.
Two companies
companies
received
capital
In
no
major
changes
occurred
in the
composition
of
Group.
Two
received
capital
Perles
Merkur
Italia,
s.
r.
l.,
through
an
in-kind
contribution
(trade
receivables),
and
Big
Bang,
d.
o.
o.,
Beograd
and
thed.
injections:
Perles
Merkur
Italia,
s.
r.
l.,
through
an
in-kind
contribution
(trade
receivables),
and
Big
Bang,
injections:
Perles
Merkur
Italia,
s. r. l.,
through
an
in-kindofcontribution
(trade
receivables),
and
Big Bang,
d.
In
2010,
no
major
changes
occurred
in
the
composition
Merkur
Group.
Two
companies
received
capital
share
acquired
from
minority
owner
Merkur,
d.
o.
o.,
Cetinje.
o. o.,
o., Beograd
Beograd and
and the
the share
share acquired
acquired from
from minority
minority owner
owner Merkur,
Merkur, d.
d. o.
o. o.,
o., Cetinje.
Cetinje.
o.
injections: Perles Merkur Italia, s. r. l., through an in-kind contribution (trade receivables), and Big Bang, d.
62
Ownership
stake since
Subsidiaries and associated companies
Country
MERKUR DIVISION
- Merkur Hrvatska Zagreb, d. o. o.
- Merkur Nekretnine Zagreb, d. o.o.
- Merkur International Beograd, d. o. o.
- Intermerkur Nova, d. o. o., Sarajevo
- Perles Merkur Italia, s.r.l.
- Kovinotehna, d. o. o., Celje
- Merkur Čelik, d.o.o., Beograd
- Merkur, d. o. o., Cetinje
Croatia
Croatia
Serbia
Bosnia and Herzegovina
Italy
Slovenia
Serbia
Montenegro
MERSTEEL DIVISION
- Mersteel, d. o. o., Naklo
- Mersteel, d. o. o., Beograd
- Mersteel Profil doo, Beograd
- Mersteel, d. o. o., Croatia
- Mersteel, d. o. o., Sarajevo
- Merkur Makedonija, doo, Skopje
- Merkur – MI Handels, GmbH
- Merkur International Praha spol. S.r.o.
- Ţelezokrivnica SCT – Merkur, d. o. o.,
Ljubljana
BIG BANG DIVISION
- Big Bang, d. o. o., Ljubljana
- Big Bang, d. o. o. Beograd
1994
2000
1994
2008
1994
1999
2007
2008
Ownership
share in %
31 Dec. 2010
Ownership
share in %
31 Dec. 2009
100
100
100
100
100
0
100
100
100
100
100
100
100
100
100
76
Slovenia
Serbia
Serbia
Croatia
Bosnia and Herzegovina
Macedonia
Germany
Czech Republic
2008
2008
2008
2008
1998
1994
1994
1994
100
100
100
100
100
99.27
100
100
100
100
100
100
100
99.27
100
100
Slovenia
2006
45
45
Slovenia
Serbia
1999
2005
100
100
100
100
KOVINOTEHNA, d. o. o., CELJE (the company was deleted from the court register on 30 September 2010
•based
KOVINOTEHNA,
d. o. o., CELJE (the company was deleted from the court register on 30 September 2010 based on the founder's decision on simplified liquidation)
on the founder’s decision on simplified liquidation)
since22October
October2010)
2010)
•MERKUR
MERKURMI
MIHANDELS,
HANDELS, GmbH
GmbH (in bankruptcy proceedings since
• PERLES MERKUR ITALIA, s.r.l. (in voluntary liquidation proceedings since 24 August 2010)
PERLES MERKUR ITALIA, s.r.l. (in voluntary liquidation proceedings since 24 August 2010)
• MERKUR INTERNATIONAL PRAHA, spol. S. r. o. (in bankruptcy proceedings since12 May 2011)
INTERNATIONAL
PRAHA,
S.bankruptcy
r. o. (in bankruptcy
proceedings
since12
May 2011)
•MERKUR
ŽELEZOKRIVNICA
SCT- MERKUR,
d. spol.
o. o. (in
proceedings
since 14 March
2011)
ŢELEZOKRIVNICA SCT- MERKUR, d. o. o. (in bankruptcy proceedings since 14 March 2011)
Capital Injections in Subsidiaries in 2010
In thousand EUR
In thousand EUR
Date
Date
29 June 2010
29 June 2010
Date
Capital
Capital
injection
injection
amount
Capital
amount
injection
130
130
amount
29 June 2010
130
(capital
injection
Big Bang,
d. o. o.,provided
Beogradby Merkur, d. d., Naklo)
Big Bang, d. o. o., Beograd
(capital injection provided by Big Bang, d. o. o., Several times
Ljubljana)
in year 2010
Big
Bang, d. o. o., Beograd
Ljubljana)
in year 2010
Ljubljana)
in year 2010
580
580
580
580
580
580
Company name
Company name
Perles Merkur Italia, s.r.l.
Perles
Merkur
Italia, s.r.l.
Company
name
(capital injection provided by Merkur, d. d., Naklo)
(capital
injection
provided
Perles Merkur
Italia,
s.r.l. by Merkur, d. d., Naklo)
In thousand
EUR
In-kind
In-kind
contribution
contribution
In-kind
130
130
Payment
contribution
Payment
Payment
130
Purchase
of of
Additional
Stakes
from
MinorityOwners
Ownersinin
in
Subsidiaries
in 2010
2010
Purchase
AdditionalStakes
Stakes from
from Minority
Subsidiaries
in 2010
Purchase
of
Additional
Minority
Owners
Subsidiaries
in
In thousand EUR
In thousand EUR
Payment for
Payment for
In thousand
EUR
Purchased
acquired
Purchased
acquired
for
equity Payment
stake
equity
stake
Purchased
acquired
equity
stake
Purchase of Additional Stakes from Minority Owners in Subsidiaries in 2010
Company name
Company name
Merkur, d. o. o., Cetinje
Merkur,
d. o.
o., Cetinje
Company
name
(purchased by Merkur, d. d.,
Naklo) d. o. o., Cetinje
Merkur,
Naklo)
Naklo)
Date
Date
date of purchase
date of purchase
Date
Company
Company
equity on day
equity on day
of Company
purchase
of purchase
equity on day
of purchase
Acquired
Acquired
stake
stake
Acquired
stake
25 March
2010
date
of purchase
25 March 2010
-138
-138
24,00
24,00
-33
-33
53
53
25 March 2010
-138
24,00
-33
53
Subsidiaries and
and Associated
Associated Companies
Companies not
not Included
Included in
in Consolidation
Consolidation in
in 2010
2010
Subsidiaries
Subsidiaries and Associated Companies not Included in Consolidation in 2010
Subsidiaries and Associated Companies not Included in Consolidation
in 2010 stake
Ownership
– Chemo Zagreb d. o. o., Zagreb
–Subsidiaries
Chemo Zagreb
o. o., Zagreb
andd.associated
companies
– Chemo Split d. o. o., Split
–– Chemo
Split
d.
o.
o.,
Split
Chemo
Zagreb
d.
o.
o.,
Zagreb
– Kemo Niš d. o. o., Niš
–– Kemo
d. o.
NišSplit
ChemoNiš
Split
d. o.,
o. o.,
Country
Country
Croatia
Croatia
Country
Croatia
Croatia
Croatia
Serbia
Serbia
Croatia
– Kemo Niš d. o. o., Niš
Serbia
Ownership stake
Ownership
in %
Ownership
in %
stake since Ownership
31 Dec.stake
2010
stake since
31 Dec. 2010
Ownership
in
%
1991
100
1991
100
stake since
31 Dec. 2010
1991
100
1991
100
1991
100
1991
30
1991
30
1991
100
1991
30
Ownership
Ownership
stake in %
stake in %
31Ownership
Dec. 2009
31 Dec. 2009
stake in
%
100
100
31 Dec. 2009
100
100
100
30
30
100
30
Subsidiaries and
and the
the associated
associated company
company of
of Sava
Sava Trade,
Trade, d.
d. d.,
d., Ljubljana,
Ljubljana, which
which was
was merged
merged by
by
Subsidiaries
acquisition
in
2007,
were
in
liquidation
and
bankruptcy
proceedings,
which
were
however
not
concluded
acquisition
in and
2007,the
were
in liquidation
and bankruptcy
proceedings,
were which
however
notmerged
concluded
Subsidiaries
associated
company
d. which
d., which
Ljubljana,
was
in
2010.
The net
net
value
of
financial
investments
is Sava
nil, d.
because
they
were
already
impaired
in the
the in
past.
Subsidiaries
and
the associated
company
of SavaofTrade,
d.,Trade,
Ljubljana,
was
merged
by acquisition
2007, by
in
2010.
The
value
of
financial
investments
is
nil,
because
they
were
already
impaired
in
past.
acquisition
in
2007,
were
in
liquidation
and
bankruptcy
proceedings,
which
were
however
not
concluded
were in liquidation and bankruptcy proceedings, which were however not concluded in 2010. The net value of
in 2010. The net value of financial investments is nil, because they were already impaired in the past.
financial investments is nil, because they were already impaired in the past.
Partial Return
Return of
of Subsequent
Subsequent Payments
Payments from
from Subsidiary
Subsidiary Big
Big Bang,
Bang, d.
d. o.
o. o.
o.
Partial
Partial
Return
of of
Subsequent
Payments
fromSubsidiary
Subsidiary
Bang,
d.o.o.the
o. parent company received
Based
on
the
decision
of the
the only
only
partner, Merkur,
Merkur,
d. d.,
d., of
of Big
21Big
January
2010
Partial
Return
Subsequent
Payments
from
Bang,
d. 2010
o.
Based
on
the
decision
of
partner,
d.
21
January
the parent
company received
partial return
return of
of subsequent
subsequent equity
equity payments
payments to
to subsidiary
subsidiary Big
Big Bang,
Bang, d.
d. o.
o. o.,
o., the
the amount
amount of
of EUR
EUR 4,000
4,000
aa
partial
Based
on
the
decision
of
the
only
partner,
Merkur,
d.
d.,
of
21
January
2010
the
parent
company
received
a partial
Based
on the decision of the only partner, Merkur, d. d., of 21 January 2010 the parent company
received
thousand.
thousand.
returnreturn
of subsequent
equity payments
to subsidiary
Bang, d. o.Big
o., the
amount
EUR
4,000
thousand.
a partial
of subsequent
equity payments
to Big
subsidiary
Bang,
d. o.ofo.,
the
amount
of EUR 4,000
thousand.
70
70
70
The
Listof
ofCompanies
Companies that
Merkur
Group
together
with Merkur,
d. d., and
Shares on
The
List
thatComprise
Comprise
Merkur
Group
together
with Merkur,
d.Ownership
d., and Ownership
31 December
2010 and 31
December
Shares
on 31 December
2010
and 312009
December 2009
o. o., Beograd and the share acquired from minority owner Merkur, d. o. o., Cetinje.
Capital
Injections
Subsidiaries in
in 2010
Capital
Injections
in in
Subsidiaries
2010
Capital
Injections
in
Subsidiaries
in 2010
Significant Changes
Changes in
in Property,
Property, Plant
Plant and
and Equipment
Equipment in
in 2010
2010
Significant
5
5
Notes to the Balance Sheet
Notes to
to the
the Balance
Balance Sheet
Sheet
Notes
5.1
5.1 Property,
Property, Plant
Plant and
and Equipment
Equipment
5.1
Merkur
Group’s
Property,
Equipment
by Type
Merkur
Group’s
Property,
PlantPlant
and and
Equipment
by Type
Type
Merkur
Group’s
Property,
Plant
and
Equipment
by
In thousand
thousand EUR
EUR
In
Item
Item
Property, Plant
Plant and
and Equipment
Equipment
Property,
Land
and
buildings
Land and buildings
land
-- land
buildings
-- buildings
Plant and
and equipment
equipment
Plant
Property,
plant
and equipment
equipment under
under construction
construction or
or in
in acquisition
acquisition
Property, plant and
31 December
December 2010
2010
31
31 December
December 2009
2009
31
416,048
416,048
368,227
368,227
157,085
157,085
211,141
211,141
483,263
483,263
407,648
407,648
174,908
174,908
232,739
232,739
35,215
35,215
12,607
12,607
42,736
42,736
32,880
32,880
Changes
in Property,
and Equipment
in Merkur
Group
in 2009
and 2010
Changes
in Property,
Property,
PlantPlant
and Equipment
Equipment
(PPE)(PPE)
in Merkur
Merkur
Group
in 2009
2009
and 2010
2010
Changes
in
Plant
and
(PPE)
in
Group
in
and
64
Item
Item
Cost on
on 1
1 January
January 2009
2009
Cost
Acquisitions
Acquisitions
Transfers between
between assets
assets
Transfers
Transfers from
from investment
investment properties
properties
Transfers
Transfers from
from intangible
intangible assets
assets
Transfers
Revaluation recognized
recognized in
in equity
equity
Revaluation
recognized in
in profit/loss
profit/loss –
–
Revaluation
impairment
impairment
Disposal –
– write-offs
write-offs
Disposal
Foreign exchange
exchange differences
differences
Foreign
Cost
on
12
December
2009
Cost on 12 December 2009
Cost on
on 1
1 January
January 2010
2010
Cost
Segregations 2010
2010
Segregations
Acquisitions
Acquisitions
Transfers between
between assets
assets
Transfers
Transfer
to
investment
property
Transfer to investment property
Transfers to
to intangible
intangible assets
assets
Transfers
Transfers from
from intangible
intangible assets
assets
Transfers
Transfers to
to long-term
long-term assets
assets classified
classified for
for
Transfers
sale
sale
recognized in
in equity
equity
Revaluation
recognized in
in profit/loss
profit/loss –
–
Revaluation
impairment
impairment
Disposal –
– write-offs
write-offs
Disposal
Foreign exchange
differences
Foreign
Cost on
on 31
31 December
December 2010
2010
Cost
Revaluation on
on 1
1 January
January 2009
2009
Revaluation
Amortization
Amortization
recognized in
in equity
equity
Revaluation
recognized in
in profit/loss
profit/loss –
–
Revaluation
impairment
impairment
Disposal –
– write-offs
write-offs
Disposal
Foreign exchange
differences
Foreign
Revaluation on
on 31
31 December
December 2009
2009
Revaluation
Revaluation on
on 1
1 January
January 2010
2010
Revaluation
Amortization/depreciation
Amortization/depreciation
Transfers between
between assets
assets
Transfers
Transfers to
to investment
investment property
property
Transfers
Transfers to
to intangible
intangible assets
assets
Transfers
Transfers from
from intangible
intangible assets
assets
Transfers
recognized in
in profit/loss
profit/loss –
–
Revaluation
impairment
impairment
Disposal –
– write-offs
write-offs
Disposal
Foreign exchange
differences
Foreign
Revaluation on
on 31
31 December
December 2010
2010
Revaluation
Carrying amount
amount on
on 1
1 January
January 2009
2009
Carrying
Carrying amount
amount on
on 31
31 December
December 2009
2009
Carrying
Carrying amount
amount on
on 31
31 December
December 2010
2010
Carrying
PPE under
under
PPE
construction
construction
29,937
29,937
31,338
31,338
-894
-894
--3,499
3,499
In thousand
thousand EUR
EUR
In
Property,
plant
Property, plant
and equipment
equipment
and
550,447
550,447
81,933
81,933
-209
209
28
28
63,576
63,576
Land
Land
149,406
149,406
16,169
16,169
---20,490
20,490
Buildings
Buildings
278,557
278,557
26,262
26,262
894
894
209
209
22
22
39,587
39,587
Other plant
plant and
and
Other
equipment
equipment
92,547
92,547
8,163
8,163
--6
6
--
-583
-583
-8,685
-8,685
-1,890
-1,890
174,908
174,908
174,908
174,908
-173
-173
307
307
29
29
-10,206
-10,206
---
-227
-227
-14,840
-14,840
-1,658
-1,658
328,807
328,807
328,807
328,807
-1,564
1,564
131
131
-20,362
-20,362
-200
200
--4,132
-4,132
-464
-464
96,120
96,120
96,120
96,120
-787
787
1,034
1,034
--22
-22
18
18
--30,774
-30,774
-240
-240
32,867
32,867
32,867
32,867
-3,403
3,403
-1,193
-1,193
----
-810
-810
-58,430
-58,430
-4,251
-4,251
632,702
632,702
632,702
632,702
-173
-173
6,061
6,061
--30,568
-30,568
-22
-22
218
218
-718
718
---
---
-7,672
-7,672
--
-7,672
-7,672
718
718
-3,235
-3,235
-1,597
-1,597
-3,666
-3,666
157,085
157,085
-1,859
-1,859
-1,331
-1,331
-3,102
-3,102
304,047
304,047
--5,128
-5,128
-1,147
-1,147
91,662
91,662
-383
-383
-14,248
-14,248
-180
-180
12,594
12,594
-5,477
-5,477
-22,304
-22,304
-8,095
-8,095
565,389
565,389
0
0
-----0
0
65,285
65,285
8,327
8,327
23,778
23,778
49,175
49,175
8,092
8,092
--
0
0
---
114,460
114,460
16,419
16,419
23,778
23,778
0
0
------
-50
-50
-1,188
-1,188
-84
-84
96,067
96,067
96,067
96,067
10,085
10,085
--11,797
-11,797
-20
20
--3,823
-3,823
-59
-59
53,384
53,384
---12
-12
-12
-12
-50
-50
-5,012
-5,012
-156
-156
149,439
149,439
---0
0
-282
-282
-894
-894
-293
-293
92,906
92,906
--4,443
-4,443
-175
-175
56,447
56,447
----12
-12
-282
-282
-5,337
-5,337
-468
-468
149,340
149,340
149,406
149,406
174,908
174,908
157,085
157,085
213,272
213,272
232,739
232,739
211,141
211,141
53,384
53,384
7,686
7,686
-4
-4
--2
-2
--
43,372
43,372
42,736
42,736
35,215
35,215
-12
-12
------
149,439
149,439
17,771
17,771
-4
-4
-11,797
-11,797
-2
-2
20
20
29,937
29,937
32,880
32,880
12,607
12,607
435,987
435,987
483,263
483,263
416,048
416,048
71
71
The biggest drops in property, plant and equipment in 2010;
1,597
Land
sale
1,597
Land
• Land
salesale
1,597
437
Building
sale
437
Building
sale
• Building sale
437
686
Sale
and
destruction
of plant
plant
and equipment
equipment
• Sale
andand
destruction
of plant
and equipment
686
686
Sale
destruction
of
and
• Sale
of current
investments
13,167
Sale
of current
current
investments
13,167
Sale
of
investments
13,167
• Write-off
of
current
investments
1,080
1,080
Write-off
of
current
investments
1,080
Write-off of current investments
TOTAL
16,967
TOTAL
16,967
TOTAL
16,967
The Group checked fair values of properties and performed their revaluation on 31 December 2010. For property,
The for
Group
checked
fair
values of
of
properties
and
performed
their
revaluation
on 31
31
December
2010.
For
whichchecked
the Groupfair
established
that
its fair value
exceeds
its booktheir
value,
the revaluation
in the
amount of2010.
EUR 718
The
Group
values
properties
and
performed
revaluation
on
December
For
property,
for which
which
the Group
Group
established
thatcases,
its fair
fair
value
exceeds
itsexceeds
book value,
value,
the
revaluation
ininthe
the
property,
for
the
established
that
its
value
its
book
revaluation
thousand
was recognized
in equity.
In opposite
where
theexceeds
book value
the fairthe
value
establishedin
a
amount
of
EUR
718
thousand
was
recognized
in
equity.
In
opposite
cases,
where
the
book
value
exceeds
amount
of EUR
thousand
was
recognized
in equity.
In opposite
cases,inwhere
the
book value exceeds
valuation,
the 718
impairment
in the
amount
of EUR 5,195
thousand
was recognized
profit or
loss.
the fair
fair value
value established
established in
in a
a valuation,
valuation, the
the impairment
impairment in
in the
the amount
amount of
of EUR
EUR 5,195
5,195 thousand
thousand was
was
the
The
calculated
depreciation
included
in
Merkur
Group’s
operating
costs
amounted
to
EUR
17,771
thousand
for
2010,
recognized
in
profit
or
loss.
recognized in profit or loss.
and EUR 16,419 thousand for 2009 respectively.
The calculated
calculated depreciation
depreciation included
included in
in Merkur
Merkur Group's
Group's operating
operating costs
costs amounted
amounted to EUR
EUR 17,771
17,771
The
On 31 December
2008, the group corrected
the error related
to reclassifying leases
for certain salestocenters.
Note 3.6
thousand for
for 2010,
2010, and
and EUR
EUR 16,419
16,419 thousand
thousand for
for 2009
2009 respectively.
respectively.
thousand
(Errors from the Previous Terms) provides more information on the issue.
On 31
31 December
December 2008,
2008, the
the group
group corrected
corrected the
the error
error related
related to
to reclassifying
reclassifying leases
leases for
for certain
certain sales
sales
On
centers.
Note
3.6
(Errors
from
the
Previous
Terms)
provides
more
information
on
the
issue.
centers. Note 3.6 (Errors from the Previous Terms) provides more information on the issue.
Property
and Equipment
Equipment
Merkur
Group
Acquired
through
Financial
LeaseLease
Property
and Equipment
Merkur
Group
Acquired
through
Financial
Property
and
Merkur
Group
Acquired
through
Financial
Lease
Item
Item
Total
Total
Property
Property
Equipment
Equipment
31 December
December
31
2010
2010
31 December
December
31
2009
2009
In thousand
thousand EUR
EUR
In
31
December
31 December
2008
2008
151,219
151,219
150,886
150,886
333
333
153,908
153,908
153,474
153,474
434
434
146,152
146,152
145,984
145,984
168
168
The The
Group
holds
14
sales
centers
in Slovenia,
Slovenia,
Croatia,
Serbia,
andHerzegovina
Bosnia and
and
Herzegovina
under
The
Group
holds
sales
centers
in
Croatia,
and
Bosnia
Herzegovina
Group
holds14
14 sales
centers
in Slovenia,
Croatia, Serbia,
andSerbia,
Bosnia and
under
finance lease.under
Their
finance
lease.
Their
book
value
on
31
December
2010
amounted
to
EUR
150,886
thousand.
The
Group
finance
Their
book value
onamounted
31 December
to EUR
150,886
thousand.
The Group
booklease.
value on
31 December
2010
to EUR 2010
150,886amounted
thousand. The
Group
also holds
cars and forklifts
under
also finance
holds cars
cars
and forklifts
forklifts under
under finance
finance lease.
lease.
also
holds
lease.and
book
valueof
property under
owned
by theby
31 December
2010 was EUR2010
157,301
thousand.
The The
book
value
ofof property
property
undermortgages
mortgages
owned
byGroup
the on
Group
on 31
31 December
December
2010
was
EUR
The
book
value
under
mortgages
owned
the
Group
on
was
EUR
157,301
thousand.
157,301 thousand.
5.2 5.2Intangible
Intangible
Assets
Intangible
Assets
5.2
Assets
Merkur Group’s
Group’s Intangible
Intangible Assets
Assets by
by Type
Type
Merkur
Merkur Group’s Intangible Assets by Type
In thousand
thousand EUR
EUR
In
Item
Item
Intangible assets
assets
Intangible
Property
rights
(software licenses)
licenses)
Property rights (software
31 December
December 2010
2010
31
2,372
2,372
2,372
2,372
31 December
December 2009
2009
31
3,215
3,215
3,215
3,215
72
72
5
In 2010
2010 Merkur
Merkur Group’s
Group’s investments
investments in
in property,
property, plant
plant and
and equipment
equipment reached
reached EUR
EUR 6,197
6,197 thousand,
thousand,
In
which
were
allocated
as
follows:
which were allocated as follows:
Significant Changes in Property, Plant and Equipment in 2010
Purchase of
of land
land
307
Purchase
307
In 2010 Merkur Group’s investments in property, plant and equipment reached EUR 6,197 thousand, which were
Bringing facilities
facilities into
into use
use
1,564
Bringing
1,564
allocated
as follows:
Plant
and
equipment
purchase
788
Plant and
equipment purchase 788
• Purchase
of land
307
Current
investments:
buildings
and
3,538
Current
investments:
• Bringing
facilities
into use buildings and 1,564
3,538
equipment
equipment
TOTAL
6,197
• Plant
and
equipment
purchase
788
TOTAL
6,197
• Current investments: buildings and equipment
3,538
The biggest
biggest
drops in
in property,
property, plant
plant and
and equipment
equipment in
in 2010;
2010;6,197
TOTALdrops
The
In 2009, goodwill was impaired in the amount of EUR 6,141 thousand related to the acquisition of
Mersteel Profil d. o. o., Beograd in May 2008. Goodwill was tested on the level of a cash-generating unit.
It was established that the book value of the cash-generating unit and the goodwill exceeded the
recoverable amount, so the goodwill was fully impaired.
5.3 Investment Properties
In thousand EUR
Merkur Group’s Investment Properties by Type
66
Item
Cost on 1 January 2009
Acquisitions
Transfer from property, plant and equipment
Disposals and write-offs
Foreign exchange differences
Property rights
and software
8,059
997
-28
-80
-19
8,929
Goodwill
6,141
6,141
Intangible assets
14,200
997
-28
-80
-19
15,070
Cost on 1 January 2010
Acquisitions
Transfer to property, plant and equipment
8,929
409
-218
22
-35
-84
9,023
6,141
6,141
15,070
409
-218
22
-35
-84
15,164
Revaluation on 1 January 2009
Amortization
Revaluation
Revaluation on 31 December 2009
4,775
989
-50
5,715
0
6,141
6,141
4,775
989
6,141
-50
11,855
Amortization
5,715
968
-20
2
-12
6,651
6,141
6,141
11,855
968
-20
2
-12
12,792
Book value on 1 January 2009
Book value on 31 December 2009
Book value on 31 December 2010
3,284
3,215
2,372
6,141
0
0
9,425
3,215
2,372
Intangible assets owned by the Group on 31 December 2010 comprise property rights from the use of
patents,
licenses
theby
BOF
brand,on
and
software in
thecomprise
amountproperty
of EURrights
2,372from
thousand
(31patents,
December
Intangible
assetsand
owned
the Group
31 December
2010
the use of
licenses
2009:
3,215
thousand).
andEUR
the BOF
brand,
and software in the amount of EUR 2,372 thousand (31 December 2009: EUR 3,215 thousand).
In 2009,goodwill
goodwill was
in the
of EUR of
6,141
thousand
to the acquisition
Mersteel
Profil d. o.
In 2009,
wasimpaired
impaired
in amount
the amount
EUR
6,141related
thousand
related toofthe
acquisition
ofo.,
Beograd
in
May
2008.
Goodwill
was
tested
on
the
level
of
a
cash-generating
unit.
It
was
established
that
the
book
value
Mersteel Profil d. o. o., Beograd in May 2008. Goodwill was tested on the level of a cash-generating unit.
of theestablished
cash-generating
the goodwill
the recoverable amount,
so the
wasexceeded
fully impaired.
It was
thatunit
theand
book
value ofexceeded
the cash-generating
unit and
thegoodwill
goodwill
the
recoverable amount, so the goodwill was fully impaired.
Investment Property
Land
Buildings
Item
31 December 2010
31 December 2009
47,793
26,871
20,922
28,842
16,586
12,256
Investment Property
Land
Buildings
The investment property leased by the Group generates a constant rental income throughout the lease
The investment
the Group
generatesproperty
a constantamounted
rental income
throughout
the lease in
period.
period.
The rentalproperty
incomeleased
from by
lease
of investment
to EUR
474 thousand
2010,The
from leaseinof2009.
investment property amounted to EUR 474 thousand in 2010, and EUR 279 thousand in
andrental
EURincome
279 thousand
2009.
73
Changes in Merkur Group’s Investment Properties in 2009 and 2010
Changes in Merkur Group’s Investment Properties in 2009 and 2010
In thousand EUR
Item
Land
Buildings
Investment
property
Value on 1 January 2009
Acquisitions
9,692
6,992
-
7,559
4,984
-209
17,250
11,976
-209
Disposals
Value on 31 December 2009
-97
16,586
-78
12,256
-175
28,842
Acquisitions
Adjustment to fair value
Disposals
103
10,206
-25
135
-34
8,565
-
135
70
18,770
-25
Value on 31 December 2010
26,871
20,922
47,793
The Group checked fair values of investment properties and performed their revaluation on 31 December
TheThe
Group
values of investment
properties
and performed
their
revaluation
on 31 December
2010.value
The
2010.
netchecked
effect fair
of revaluation
was EUR
70 thousand
(income
from
the adjustment
to the fair
effect
of thousand,
revaluation was
70 thousand
from the adjustment
to the fair
value
was345
EURthousand).
415 thousand,
wasnet
EUR
415
andEUR
expenses
from(income
the adjustment
to the fair value
were
EUR
and expenses from the adjustment to the fair value were EUR 345 thousand).
The value of investment properties under mortgage stood at EUR 36,592 thousand on 31 December
The value of investment properties under mortgage stood at EUR 36,592 thousand on 31 December 2010. A
2010. A mortgage for a bank loan to HTC DVA, d. o. o., Ljubljana amounts to EUR 11,631 thousand.
mortgage
for a bank loan
to HTC DVA,
d. o. o., HTC
Ljubljana
amounts
to EUR
11,631 thousand.
Launch ofon
bankruptcy
Launch
of bankruptcy
proceedings
against
DVA,
d. o. o.,
Ljubljana
was announced
4 November
proceedings
against
HTC
DVA,
d.
o.
o.,
Ljubljana
was
announced
on
4
November
2010,
so
there
is
a
possibility
thathas
the
2010, so there is a possibility that the bank will cash in the property to repay the loan, so the Group
cash in theinproperty
to repay
the loan,
so the Group
has set aside provisions in the amount of the property’s
set bank
asidewill
provisions
the amount
of the
property's
book value.
book value.
5.4 Long-term Financial Investments in Associated Companies
Item
In thousand EUR
In thousand EUR
31 December 2010
31 December 2009
47,793
26,871
20,922
28,842
16,586
12,256
The investment property leased by the Group generates a constant rental income throughout the lease
period. The rental income from lease of investment property amounted to EUR 474 thousand in 2010,
and EUR 279 thousand in 2009.
Long-term Financial Investments in Associated Companies
In thousand EUR
Companies
Investments in the stakes in associated
companies:
Ţelezokrivnica SCT – Merkur, d. o. o.,
Ljubljana, Slovenia
Kemo Niš d. o. o., Niš, Serbia
73
Ownership
stake since
2006
1991
Ownership Investment
stake in %
value
31 Dec.
31 Dec.
2010
2010
45
30
-
Ownership
stake in %
31 Dec.
2009
Investment
value
31 Dec.
2009
45
30
-
Kemo Niš d. o. o., Niš, Serbia, is an associated company in the process of liquidation that was not yet
completed in 2010. Associated company Ţelezokrivnica SCT – Merkur, d. o. o., Ljubljana has been in
bankruptcy proceedings since 14 March 2011.
Changes
in intangible
assets
in Merkur
Group
in 2009
2010
Changes
in intangible
assets
(IA)(IA)
in Merkur
Group
in 2009
andand
2010
was EUR
415 thousand,
and expenses
fromDVA,
the adjustment
to the fairamounts
value were
EUR 11,631
345 thousand).
2010.
A mortgage
for a bank
loan to HTC
d. o. o., Ljubljana
to EUR
thousand.
Launch of bankruptcy proceedings against HTC DVA, d. o. o., Ljubljana was announced on 4 November
The value
of investment
properties
mortgage
at EURto36,592
thousand
onthe
31 Group
December
2010,
so there
is a possibility
that theunder
bank will
cash instood
the property
repay the
loan, so
has
2010.
A mortgage
a bank
loanof to
DVA, d.
o. o.,
Ljubljana amounts to EUR 11,631 thousand.
set
aside
provisions for
in the
amount
theHTC
property's
book
value.
Launch of bankruptcy proceedings against HTC DVA, d. o. o., Ljubljana was announced on 4 November
2010, so there is a possibility that the bank will cash in the property to repay the loan, so the Group has
provisions
Long-term
Financial
in Associated
set 5.4
aside
in the
amountInvestments
of theinproperty's
book
value.Companies
5.4
Long-term
Financial
Investments
Associated
Companies
Item
31 December 2010
31 December 2009
132,044
128,650
3,393
184,792
172,999
11,794
Available-for-sale financial assets
Deposits and collateral
Changes in Available-for-sale Financial Assets of Merkur Group in 2009 and 2010
In thousand EUR
In thousand EUR
Ownership Investment Ownership Investment
EUR
stake in %
value stake inIn
%thousandvalue
Ownership
31 Dec.
31 Dec.
31 Dec.
31 Dec.
Companies
stake since Ownership
2010 Investment
2010 Ownership
2009 Investment
2009
stake in %
value stake in %
value
Investments in the stakes in associated
Ownership
31 Dec.
31 Dec.
31 Dec.
31 Dec.
companies:
Companies
stake since
2010
2010
2009
2009
Ljubljana,
Slovenia
2006
45
45
Investments
in the stakes in associated
Kemo
Niš d. o. o., Niš, Serbia
1991
30
30
companies:
Ljubljana,
45 was not yetKemo
Niš Slovenia
d. o. o., Niš, Serbia, is an associated 2006
company in the45process of liquidation
that
Kemo
NišNiš
d.
o.2010.
Serbia
1991
completed
ind.
Associated
SCT –of30
Merkur,
d.that
o. - o.,
has been
Kemo
o.o.,o.,Niš,
Niš,
Serbia, is ancompany
associated Ţelezokrivnica
company
in the process
liquidation
wasLjubljana
not yet 30
completed
in in-
bankruptcy
proceedings
since
14 March SCT
2011.
2010. Associated
company
Železokrivnica
– Merkur, d. o. o., Ljubljana has been in bankruptcy proceedings since
Kemo
Niš d.2011.
o. o., Niš, Serbia, is an associated company in the process of liquidation that was not yet
14 March
Changes
in Merkur
Group’s
Investments
in Associated
Companies
2009 and
completed
in 2010.
Associated
company
Ţelezokrivnica
SCT –inMerkur,
d.2010
o. o., Ljubljana has been in
bankruptcy proceedings since 14 March 2011.
In thousand EUR
Changes in Merkur Group’s Investments in Associated Companies in 2009 and 2010
68
Item
Long-term
investments
Changes
in Merkur Group’s Investments in Associated Companies
in 2009
and 2010in associated companies
In thousand EUR
Net value on 1 January 2009
390
Attribution of loss
-390
Item
Long-term investments in associated companies
Net value on 31 December 2009
0
390
0
Attribution of loss
-390
0
0
74
5.5 Long-term Financial Investments
5.5 Long-term Financial Investments
74
Merkur Group’s Long-term Financial Investments by Type
Merkur Group’s Long-term Financial Investments by Type
Item
In thousand EUR
31 December 2010
31 December 2009
132,044
128,650
3,393
184,792
172,999
11,794
Item
Acquisitions
Reclassification of financial assets during the year
Change of fair value in other comprehensive income
Impairment loss through profit/loss
Reversal of impairment
195,016
70,351
-10,156
-48,097
-25,763
-8,085
123
-391
172,999
Acquisitions
10,739
-19,363
-25,106
-10,619
128,650
The Group assessed the fair value of available-for-sale financial assets on 31 December 2010. The
valuation
showed
thatthe
the
value
of important investments
below
their book
and theshowed
value of
The Group
assessed
fairfair
value
of available-for-sale
financial assetsison
31 December
2010.value,
The valuation
investments
was
impaired
to
their
fair
value.
The
effect
of
the
impairment
in
the
amount
of
EUR
19,363
that the fair value of important investments is below their book value, and the value of investments was impaired
thousand
was
recognized
in
the
other
comprehensive
income
statement
as
a
reduction
of
reserve
for fair
to their fair value. The effect of the impairment in the amount of EUR 19,363 thousand was recognized in the other
value. A large part of the change recognized in the other comprehensive income comes from the
comprehensive income statement as a reduction of reserve for fair value. A large part of the change recognized in
investment in the shares of Gorenjska banka, d. d., Kranj in the amount of EUR 19,390 thousand.
the other comprehensive income comes from the investment in the shares of Gorenjska banka, d. d., Kranj in the
amount of EUR 19,390 thousand.
The value of financial assets for which the Group had not previously recognized the reserves for fair
value,
was impaired
theGroup
profithad
or not
losspreviously
for EURrecognized
10,619 thousand.
The value
of financialand
assetsburdened
for which the
the reservesAforgreater
fair value,part
wasof this
amount
comes
from impairment
of loss
thefor
investment
in the shares
of part
Sava,
d. d.,
in the
amount
impaired
and burdened
the profit or
EUR 10,619 thousand.
A greater
of this
amount
comes
from of EUR
8,959
thousand.
impairment
of the investment in the shares of Sava, d. d., in the amount of EUR 8,959 thousand.
December2010,
2010, the
value
of the
investment
in thein
shares
of Gorenjska
banka, d. d.banka,
was EURd.1,550
per share,
On On
31 31
December
thefair
fair
value
of the
investment
the shares
of Gorenjska
d. was
EUR
and
that
corresponds
to
the
value
according
to
the
valuation
model.
In
addition,
an
agreement
has
been
reached
1,550 per share, and that corresponds to the value according to the valuation model. In addition, an
between has
Merkur
andreached
Sava, d. d.,between
based onMerkur
which the
companies
sellwhich
the joint
stake in Gorenjska
agreement
been
and
Sava, d.undertake
d., basedtoon
the57.9%
companies
undertake
banka
(Sava
owns
152,110
shares
corresponds
to (Sava
a 45.90%owns
equity152,110
stake). shares which corresponds to a
to sell
the
joint
57.9%
stake
inwhich
Gorenjska
banka
45.90%
stake).
In 2010equity
the Group
decided to use the valuation model to measure the fair value of financial investment in the shares
of Sava, d. d., Kranj, which is listed on the stock exchange, instead of the official market price on 31 December 2010,
In 2010
thethe
Group
decided
to use
the valuation
model
the fair value
of the
financial
investment
because
market
price does
not reflect
the true value
of to
themeasure
financial investment
due to
low market
liquidity.in
the shares of Sava, d. d., Kranj, which is listed on the stock exchange, instead of the official market price
For the purposes of financial reporting the recognized price of Sava, d. d., Kranj shares was EUR 175 per share (the
on 31 December 2010, because the market price does not reflect the true value of the financial
official market value on 31 December 2010 was EUR 89.50 per share).
investment due to the low market liquidity. For the purposes of financial reporting the recognized price of
Sava, d. d., Kranj shares was EUR 175 per share (the official market value on 31 December 2010 was
EUR 89.50 per share).
The Group’s Most Significant Financial Investments on 31 December 2010:
The Group’s Most Significant Financial Investments on 31 December 2010:
In thousand EUR
Item
Acquisitions
Reclassification of financial assets during the year
195,016
70,351
-10,156
-48,097
-25,763
-8,085
123
-391
172,999
Acquisitions
10,739
-19,363
-25,106
Investment
Gorenjska banka Kranj
Perutnina Ptuj d. d.
In thousand EUR
Corrected
Investment
investment
revaluation
value
Number of shares
on 31 Dec. 2010
Stake in %
on 31 Dec. 2010
Investment
cost
43,089
13.00
44,313
22,475
75
1,434,485
24.26
25,821
-
-
Cimos Koper
500,000
3.00
7,789
-
-4,375
Sava d. d. Kranj
134,923
6.72
32,571
-
-8,959
The financial investments in the equity of Perutnina, d. d., Ptuj, in which the Group has a 24.26% stake,
and of Kopitarna, d. d., Sevnica, in which the company has a 24.20% stake, are classified as availablefor-sale investments. The Group does not influence the operations or decision making in these two
companies, and because of the mentioned uncertainty about ownership the investment in Perutnina Ptuj
is not treated as an investment in an associated company, and there is an ongoing dispute about the
repurchase right, which is described further on.
The Group and Perutnina Ptuj, d. d. entered a “Protocol on mutual assistance – a mutual agreement” on
the repurchase rights for their shares. Perutnina owns 64,198 MER shares valued at EUR 26,000
Long-term
Financial
Investments
in Associated
CompaniesCompanies
5.4 Long-term
Financial
Investments
in Associated
The Group and Perutnina Ptuj, d. d. entered a “Protocol on mutual assistance – a mutual agreement” on the
repurchase rights for their shares. Perutnina owns 64,198 MER shares valued at EUR 26,000 thousand and Merkur owns
1,434,485 PPTG shares valued at EUR 25,821 thousand. Based on the protocol the repurchase rights must be exercised
simultaneously by entering a contract on the double purchase and sale of shares. If one of the parties demands it,
the other is obliged to realize the option immediately. The PPTG shares are further burdened with the ban on the
right to dispose of shares.
On 18 July 2010, Perutnina Ptuja sent a note to Merkur, d. d., about its intentions of realizing the option contract for
switching Perutnina Ptuj shares with Merkur shares. The Merkur management dismissed this based on the legal
opinion that the said contract might be contrary to law and therefore void as, based on it, Merkur would gain own
shares in conflict with the legal restrictions.
Disposal of Available-for-Sale Financial Assets in 2010
70
In 2010 the Group disposed of the following available-for-sale financial assets:
• 51,577 shares of Sava, d. d., Kranj (SAVA shares) in three transactions at average price of EUR 221.23 per share; the total value of transactions was EUR 11,410 thousand. The book value of the shares was EUR 12,273 thousand, so the sale generated a loss of EUR 863 thousand.
• 26,748 shares of NLB, d. d., Ljubljana at EUR 225 per share; the total value of the transaction was EUR 6,018 thousand. The sale generated a loss of EUR 67 thousand.
• 11,000 shares of Gradis skupina G d. d., Ljubljana (GRSR shares) at EUR 40.00 per share; the total value of the transaction was EUR 440 thousand. The sale was carried out by the book value of the shares.
• 64,940 shares of Zavarovalnica Triglav, d. d., Ljubljana (ZTVG shares) at EUR 78.70 per share; the total value of the transaction was EUR 5,111 thousand. The Company acquired the shares in 2009 priced at EUR 73.30 per share. Based on the note from Viator & Vektor, d. d., on exercising the option, the purchase agreement was signed on 13 September 2010.
• 22,576 shares of ETI, d. d., Izlake (ETIG shares) at EUR 57.06 per share; the total value of the transaction was EUR 1,288 thousand. The company had a Contract on relationship regulation for these shares which regulated the sale of shares at EUR 53.30 per share. On 16 August 2010 a contract was signed with Gorenje, d. d., Velenje on the sale of shares, by which the option contract was executed.
On 31 December 2010 the following securities of the Group were pledged:
• 43,000 shares of Gorenjska banka, Kranj, book value at EUR 66,650 thousand,
• 1,434,485 shares of Perutnina Ptuj, book value at EUR 25,821 thousand,
• 130,000 shares of Maksima Invest Ljubljana, book value at EUR 384 thousand, and
• 133,547 shares of Sava, d. d., Kranj, book value at EUR 23,371 thousand.
Additional Burdens on Securities with the Ban on the Right to Dispose
• 1,434,485 shares of Perutnina Ptuj,
•
3,000 shares of Gorenjska banka Kranj – already pledged, and
• 63,500 shares of Sava, d. d., Kranj – already pledged.
Changes in Merkur Group’s Deposits and Collaterals in 2009 and 2010
More on this is explained in item 8.2. Lawsuits against Merkur Group.
In thousand EUR
Deposit provided
Item
Gross value on 1 January 2009
Item
Increase
Gross
value on 1 January 2009
Increase
Item
Gross value
value
on 131differences
December
2009
Foreign
exchange
Gross
on
January
2009
2,673
Deposit
provided
In thousand
EUR
9,119
2,673
3
9,119
Deposit provided
11,794
3
2,673
Acquisitions
Gross
value on 31 December 2009
Increase
Foreign
differences
Foreign exchange
Acquisitions
Decrease
Gross value
on 31differences
December 2009
Foreign
exchange
Gross
value
on
31
December 2010
Decrease
Acquisitions
454
11,794
9,119
-8
3
454
-8,847
11,794
-8
3,393
-8,847
454
Net value
onon
1 January
2009 2010
Gross
value
31differences
December
Foreign
exchange
Net
value
on
31
December
2009
Decrease
Net
value on 1 January 2009
Net
value
on
31
December
2010
Gross
value
December
2010
Net
value
on on
31 31
December
2009
2,673
3,393
-8
11,794
-8,847
2,673
3,393
3,393
11,794
31January
December
Net annual
value oninterest
1
The
rate2009
for2010
long-term deposits is EURIBOR + 0.4–1.6% markup.
NetThe
value
on
31
December
annual interest rate for2009
long-term deposits is EURIBOR + 0.4–1.6% markup.
The annual interest rate for long-term deposits is EURIBOR + 0.4–1.6% markup.
5.6
Loans Given
The annual interest rate for long-term deposits is EURIBOR + 0.4–1.6% markup.
Loans
Given
5.6 5.6 Loans
Given
Long-term Loans Given by Merkur Group by Type
5.6 Long-term
LoansLoans
GivenGiven by Merkur Group by Type
Long-term Loans Given by Merkur Group by Type
Item
Loans given
Long-term
Loans Given by Merkur Group by Type
Item
Loans
given
Loans givento other companies
Receivables
from
finance
lease
Item
Loans
given to
other
companies
In thousand EUR
3,393
2,673
11,794
3,393
In thousand EUR
31 December 2010 31
InDecember
thousand 2009
EUR
31 December12,286
2010 31 December 1,477
2009
In
thousand
EUR
12,286
1,364
12,286
1,477
114
31 December
2010- 31 December1,364
2009
12,286
114
12,2861,477
Receivables
Loans
givenfrom finance lease
Loans given to
other
companies
12,286
Receivables
from
Merkur
Group’s Assets Loaned under Finance Lease – by Maturity
Receivables
from
finance
lease
Receivables from Merkur Group’s Assets Loaned under Finance Lease – by Maturity
1,364
In thousand EUR
114
In thousand EUR
Receivables from Merkur Group’s Assets Loaned under Finance Lease
– by Maturity
Maturity of receivables from assets loaned under finance lease:
31 December 2010 31 December 2009
Receivables from Merkur Group’s Assets Loaned under Finance Lease – by Maturity
due in less
a year* from assets loaned under finance lease:
42 31 December 2009
328
Maturity
ofthan
receivables
31 December 2010
In thousand EUR
due
between
1
to
5
years
0
114
due in less than a year*
42
328
Total
42
442
due between
1 to 5 yearsfrom assets loaned under finance lease:
0 31 December 2009
114
Maturity
of receivables
31 December 2010
Total
42
442
328
due between 1 to 5 years
0
114
Total
42
442
On 31 December 2010 the Group’s entire securities portfolio was subject to a claim for execution of financial
receivables, which was partially lifted in 2011.
77
77
77
The financial investments in the equity of Perutnina, d. d., Ptuj, in which the Group has a 24.26% stake, and of
Kopitarna, d. d., Sevnica, in which the company has a 24.20% stake, are classified as available-for-sale investments. The
Group does not influence the operations or decision making in these two companies, and because of the mentioned
uncertainty about ownership the investment in Perutnina Ptuj is not treated as an investment in an associated
company, and there is an ongoing dispute about the repurchase right, which is described further on.
63,500 shares
shares of
of Sava, d. d.,Ptuj,
Kranj – already pledged.
1,434,485
On 31 December
2010 the Perutnina
Group’s entire securities portfolio was subject to a claim for execution of
3,000 shares
of was
Gorenjska
– already pledged, and
financial receivables,
which
partiallybanka
lifted Kranj
in 2011.
On 31 December
2010 the
Group’s
entire
securities
63,500 shares
of Sava,
d. d.,
Kranj
– alreadyportfolio
pledged.was subject to a claim for execution of
financial receivables, which was partially lifted in 2011.
On 31 December 2010 the Group’s entire securities portfolio was subject to a claim for execution of
More
on receivables,
this is explained
in was
item partially
8.2. Lawsuits
against
Group.
financial
lifted
in
2011. Merkur
Changes
in Merkurwhich
Group’s
Deposits and
Collaterals
in 2009 and 2010
Changes in Merkur Group’s Long-Term Given Loans in 2009 and 2010
Collateral for Long-Term Loans Given by Merkur Group
Item
Acquisitions
Interest
Repayment
Transfers to long-term assets classified for sale
Gross value on 31 December 2009
Transfer from short-term to long-term given loans
Acquisitions
Interest
Repayment
Full write-off
Full write-off
Value impairment during the year
Transfer of correction from short-term to long-term loans
Full write-off
Impairment during the year
72
Loans Given
3,372
14,373
80
-11,874
-3,448
30
2,533
In thousand EUR
Receivables from
finance lease
420
76
-383
114
157,500
35,528
75
-10,880
-3
-10
184,743
-114
0
1,171
-13
10
1,169
0
0
126,395
-5
44,899
-1
172,458
0
0
2,201
1,364
12,286
420
114
0
The short-term loan given to HTC DVA, d. o. o., in the amount of EUR 147,500 thousand was converted
to aThe
long-term
loan
2–5
yearDVA,
maturity
23 amount
April 2010.
The
Group
took the
short-term
loanwith
given
to HTC
d. o. o.,on
in the
of EUR
147,500
thousand
wasborrower’s
converted toreceivables
a longdue term
fromloan
Merfin
in
the
amount
of
the
principal
value
as
collateral.
In
addition,
DVA,
d. o.
with 2–5 year maturity on 23 April 2010. The Group took the borrower’s receivablesHTC
due from
Merfin
in o.,
assumed
the
debt
that
Factor
druţba
za
svetovanje,
trgovino
in
leasing,
d.
o.
o.,
Ljubljana
owed
the amount of the principal value as collateral. In addition, HTC DVA, d. o. o., assumed the debt that Factor družba to
Merkur in the amount of EUR 10,000 thousand, with maturity on 28 March 2013.
za svetovanje, trgovino in leasing, d. o. o., Ljubljana owed to Merkur in the amount of EUR 10,000 thousand, with
maturity on 28 March 2013.
In 2010 HTC DVA, d. o. o., was given another loan in the amount of EUR 30,254 thousand by the Group.
AfterInthe
thed.bankruptcy
proceedings
DVA, d.
o.,30,254
was announced
on 4
November
2010start
HTC of
DVA,
o. o., was given
another loanofinHTC
the amount
of o.
EUR
thousand by the
Group.
After the2010,
start
the value
of the loanproceedings
was furtherofimpaired
in o.the
of EURon42,707
thousand.
The
Group
speculates
of the bankruptcy
HTC DVA, d.
o., amount
was announced
4 November
2010, the
value
of the
loan was
that further
as a creditor
in the
theamount
process
of compulsory
settlement
orspeculates
bankruptcy
challenge
the debtor’s
impaired in
of EUR
42,707 thousand.
The Group
thatitascan
a creditor
in the process
of
legalcompulsory
actions from
the
year
before
the
bankruptcy.
The
Management
Board
of
Merkur,
d.
d.,
is
settlement or bankruptcy it can challenge the debtor’s legal actions from the year before thediscussing
bankruptcy.
whether
to file a challenging
actiond.ford.,disputable
are the subject
of a
special audit.
The Management
Board of Merkur,
is discussingtransactions
whether to filethat
a challenging
action for
disputable
transactions
that are the subject of a special audit.
On 31 December 2010, the Group recorded the long-term loan given to HTC DVA, d. o. o., with the gross
Onof31EUR
December
2010,thousand,
the Group the
recorded
the long-term
to HTC
DVA, d.
o. o., with
the gross value
of EUR
value
179.963
allowance
for this loan
loangiven
stands
at EUR
169,101
thousand,
and so
the
179.963
thousand,
the
allowance
for
this
loan
stands
at
EUR
169,101
thousand,
and
so
the
net
value
of
the
loan
given
net value of the loan given is EUR 10,862 thousand.
is EUR 10,862 thousand.
Long-term
loans
given
fullyimpaired
impaired
in 2010
also include
loans
by to
Big
BangHoldings
to Je zapo
Long-term
loans
giventhat
that were
were fully
in 2010
also include
loans given
bygiven
Big Bang
Je zapo
Holdings L.t.d. in the amount of EUR 1,400 thousand and to Merfin, d. o. o., in the amount of EUR 730
L.t.d. in the amount of EUR 1,400 thousand and to Merfin, d. o. o., in the amount of EUR 730 thousand, since it was
thousand, since it was established that the companies do not have unburdened assets that could be used
established that the companies do not have unburdened assets that could be used to repay the loans.
to repay the loans.
78
In thousand EUR
thousand 2009
EUR
Item
31 December 2010
31InDecember
Total
12,286
1,364
thousand 2009
EUR
Item
31 December 2010
31InDecember
Mortgages
95
107
Total
12,286
1,364
Bills
of
exchange
100
Collateral
for Long-Term Loans Given by Merkur Group
Item
31 December 2010
31 December 2009
Mortgages
95
107
Other forms of collateral
843
1,051
In
thousand EUR
Total
12,2861,364
Bills
of
exchange
100
- movable assets
78
78
Mortgages
95
107
Other
forms
of
collateral
843
1,051
with
insurance
companies
315
400
Item
31 December 2010
31 December 2009
Bills
of exchange
100
-- movable
assets
7878
guarantors
412
527
Total
12,286
1,364
Other
of collateral
843
1,051
- with forms
insurance
companies
315
400
- other forms of collateral
Mortgages
9538
10745
- movable
assets
78
78
guarantors
412
527
Without
collateral
11,348
106
Bills
of exchange
100
companies
315
400
-- with
otherinsurance
forms of collateral
38
45
843
1,051
- guarantors
412
527
Without
collateral
11,348
106
-Maturity
movableof
assets
78
78
Long-Term
Loans Given by Merkur Group
- other forms
of collateral
38
45
- with
insurance
companies
315
400
Maturity
of
Long-Term
Loans
Given
by
Merkur
Group
In
thousand
EUR
Without collateral
11,348
106
of Long-Term Loans Given by Merkur Group
-Maturity
guarantors
412
527
Item
31 December 2010
31InDecember
thousand 2009
EUR
- other forms of collateral
38
45
Loans
given
12,286
1,364
Maturity
of
Long-Term
Loans
Given
by
Merkur
Group
Without
11,348
Item collateral
31 December
2010
31 December106
2009
Mature in 1–2 years
11,174
461
In thousand EUR
Loans
given
12,286
1,364
458
545
Item
31 December
2010
31 December 2009
Mature
in
1–2
years
11,174
461
Maturity
of
Long-Term
Loans
Given
by
Merkur
Group
Mature in more than 5 years
653
358
Loans
given
12,286
1,364
458
545
In thousand EUR
Mature in more
1–2 years
11,174
461
than 5 years
653
358
Item
31Rate
December 2010
31 December 2009
Long-Term
Loans
Given by Merkur Group by Currency and Interest
Mature in 2–5
years
458
545
Loans given
12,286
1,364
Mature in more than 5 years
653
358
Long-Term
and Interest
in Rate
Value
in
Mature
in 1–2Loans
years Given by Merkur Group by Currency Amount
11,174
461
currency in
thousand
Interest
Interest
Long-Term
Loans Given by Merkur Group by Currency
and Interest Rate
Mature
in 2–5 years
458
545
Currency Loans Given by Merkur Group by Currency thousands
EUR
rate from
rate to
Amount
in Rate
Value
in
Long-Term
and
Interest
Mature
in
more
than
5
years
653
358
currency
in
thousand
Interest
Interest
EUR
8,052
8,052
1.59%
5.50%
Currency
thousands
EUR
rate0.00%
from
rate
to
RSD
42,621
397
0.00%
Amount
in
Value
in
EUR
8,052
8,052
1.59%
5.50%
HRK
28,328
3,837
4.50%
4.50%
currency
in Rate
thousand
Interest
Interest
Long-Term
Loans Given by Merkur Group by Currency and
Interest
RSD
42,621
397
0.00%
Currency
thousands
EUR
rate0.00%
from
rate
to
Total
12,286
HRK
28,328
3,837
4.50%
4.50%
EUR
8,052
8,052
1.59%
5.50%
Amount
in
Value
in
Total
12,286
RSD
42,621
397 Interest
0.00% Interest
0.00%
currency
in
thousand
Currency
thousands
EUR
rate
to
5.7
HRKLong-Term Assets Classified for Sale
28,328
3,837 rate from
4.50%
4.50%
EUR
8,052
8,052
1.59%
5.50%
Total
12,286
5.7 Long-Term Assets Classified for Sale
In thousand
EUR
RSD
42,621
397
0.00%
0.00%
HRK
28,328
3,837
4.50%
4.50%
thousand 2009
EUR
ItemLong-Term Assets Classified for Sale
31 December
5.7
Total
12,286 2010 31InDecember
Item
5.7 Long-Term Assets Classified for Sale
5.7Long-term
Long-Term
Assets
Classified
assets
classified
for salefor Sale
Item
Item
18,457
31 December 2010
8,981
31InDecember
thousand 2009
EUR
18,457
31 December 2010
8,981
31 December 2009
In thousand EUR
8,981
18,457
31 December 2010
31 December 2009
18,457
8,981
79
Changes in Merkur Group’s Long-Term Given Loans in 2009 and 2010
In thousand EUR
Item
31 December 2010
31 December 2009
296
296
110
110
Trade receivables towards other
5.9 Changes in Merkur Group’s Long-Term Assets Classified for Sale in 2009 and 2010
Changes in Merkur Group’s Long-Term Assets Classified for Sale in 2009 and 2010
In thousand
Long-term assets classified
for EUR
sale
Merkur Group’s Inventories
In thousand EUR
0
In thousand
EUR
Item
Long-term
assets
classified
for
sale
Reclassification of assets
15,551
Balance onloss
31 December
2008
Impairment
through profit/loss
-6,5060
Item
Long-term assets classified for
sale
Reclassification
of
assets
15,551
-64
Balance onloss
31 December
2008
0
Impairment
through
profit/loss
-6,506
8,981
Reclassification
of
assets
15,551
-64
Increase
2,383
Impairment
through profit/loss
-6,506
Balance
on loss
31 December
2009
8,981
Reclassification
of assets
7,672
Foreign exchange
differences
-64
Increase loss through profit/loss
2,383
Impairment
-213
8,981
Reclassification
of differences
assets
7,672
Foreign
exchange
-366
Increase loss through profit/loss
2,383
Impairment
-213
18,457
Reclassification
of differences
assets
7,672
Foreign
exchange
-366
Impairment
loss
through
profit/loss
-213
Balance
31 December
2010 is actively selling assets classified in the group for sale. The main groups
18,457
As
statedon
under
3.6, the Group
-366
of assets classified for sale and debts included in the group for sale on the reporting date are the
Balance
on
31 December
2010 is is
18,457
As
stated
under
3.6,
theGroup
Group
actively
selling
classified
in the
formain
sale.
The of
main
groups
following:
As
stated
under
3.6, the
actively
selling
assetsassets
classified
in the group
for group
sale. The
groups
assets
of assets
sale
and debts
included
in on
thethe
group
for date
saleare
onthe
the
reporting
date areEUR
the
classifiedclassified
for sale andfor
debts
included
in the group
for sale
reporting
following:
In thousand
As stated under 3.6, the Group is actively selling assets classified in the group for sale. The main groups
following:
Item
Total
of assets classified for sale and debts included in the group for sale on the reporting
date are
the
In thousand
EUR
following:
Property
17,142
74
Item
Current assets
Property
Cash
Item
Current assets
Total
assets
Property
Cash
Loss
carried
forward
Current
assets
Total assets
Debts
Cash classified in the group for disposal
Loss carried forward
Trade
Total liabilities
assets
Debts classified in the group for disposal
Total
Loss liabilities
carried forward
Trade liabilities
Net
assets
classified
sale
Debts
classified
in the for
group
for disposal
Total liabilities
Trade liabilities
Net assets classified for sale
Total
liabilities
5.8
Other
Long-Term Receivables
Total
In thousand1,291
EUR
17,142
25
Total
1,291
18,457
17,142
25
-6
1,291
18,457
5,157
25
-6
2,713
18,457
5,157
7,864
-6
2,713
10,593
5,157
7,864
2,713
10,593
7,864
Net assets classified for sale
10,593
5.8 Other Long-Term Receivables
Merkur Group’s Other Long-Term Receivables by Type
Item
Other long-term
receivables
Merkur
Group’s Other
Long-Term Receivables by Type
Item
Item
Other
long-term receivables
5.9
Inventories
5.9 Inventories
5.9 Inventories
Item
Inventories
Merkur
Group’s Inventories
Item
Materials
Inventoriesproducts
Unfinished
Item
Materials
Products
and merchandise
Unfinished
-Inventories
in store products
Materials
-Products
in shopsand merchandise
Unfinished
in transit
store products
-- in
Products
- in shopsand merchandise
in transit
store
-- in
- in shops
- in transit
In thousand EUR
31 December 2010
31 December 2009
In thousand EUR
296
110
In thousand EUR
296
110
296
110
296
110
296
110
296
110
In thousand EUR
31 December 2010 31InDecember
thousand 2009
EUR
83,565
150,774
31 December 2010
2009
772 31InDecember
thousand3,378
EUR
83,565
150,774
96
310
31 December
2010
2009
772 31 December
3,378
82,697
147,086
83,565
150,774
96
310
22,582
68,055
772
3,378
82,697
147,086
59,396
77,197
96
310
22,582
68,055
719
1,833
82,697
147,086
59,396
77,197
22,582
68,055
719
1,833
59,396
77,197
80
719
1,833
Item
Inventories
Materials
Unfinished products
Products and merchandise
- in store
- in shops
- in transit
31 December 2010
83,565
772
96
82,697
22,582
59,396
719
31 December 2009
150,774
3,378
310
147,086
68,055
77,197
1,833
endof
of 2010,
netnet
realizable
value of
the Group’s
the basis of estimated
net sales
At At
thetheend
2010,thethe
realizable
value
of theinventories,
Group’s determined
inventories,ondetermined
on the basis
of
80
prices ofnet
items
minus
the direct
cost of
sale, exceeded
book
inventories.the
Thebook
inventories
amount of
estimated
sales
prices
of items
minus
the directthe
cost
of value
sale,ofexceeded
value in
ofthe
inventories.
43,674 thousand
pledged.
TheEUR
inventories
in the are
amount
of EUR 43,674 thousand are pledged.
At the end of 2010, the net realizable value of the Group’s inventories, determined on the basis of
Inventory
and
Deficits
Established
during
Inventory
inexceeded
Merkur
Group
estimated
netSurpluses
sales and
prices
of
items
minus the
direct
cost
of sale,
the book value of inventories.
Inventory
Surpluses
Deficits
Established
during
Inventory
in Merkur
Group
The inventories in the amount of EUR 43,674 thousand are pledged.
In thousand EUR
Inventory
Surpluses and Deficits Established during Inventory in Merkur Group
Item
2010
2009
Merchandise – net
-432
-342
In thousand EUR
Surplus
727
880
Deficit
-1,159
-1,222
Item
2010
2009
Merchandise
–
net
-432
-342
No No
significant
deficitswere
werediscovered
discovered
during
the interim
stocktaking.
significantsurplus
surplus or
or deficits
during
the interim
stocktaking.
Surplus
727
880
Deficit
-1,159
Revaluationds
of Inventory due to the Adjustment to Realizable Value in Merkur Group
in 2009 and 2010-1,222
In thousand EUR
NoRevaluationds
significant surplus
or deficits
discovered
during
the interim
stocktaking.
of Inventory
duewere
to the
Adjustment
to Realizable
Value
in Merkur 2010
Group in 2009 and 2009
2010
Item
Revaluationds
of Inventory due to the Adjustment to Realizable Value in Merkur Group
in 2009 and 2010
Balance on 1 January
3,393
2,044
EUR
Revaluations during the year
7,351 In thousand7,063
Inventory write-off
-4,723
-5,715
Item
2010
2009
6,021
3,393
3,393
2,044
Revaluations during the year
7,351
7,063
Based on the changed accounting estimate regarding the realizable value of inventory (see item 4.11),
Inventory write-off
-4,723
-5,715
an additional revaluation was made in 2010 in the amount of EUR 7,351 thousand debiting the balance
6,021
3,393
sheet.
Based
accounting
estimate
regarding
the realizable
of (see
inventory
4.11),
Basedon
onthe
the changed
changed accounting
estimate
regarding
the realizable
value of value
inventory
item 4.1(see
1), an item
additional
an revaluation
additional
revaluation
wasin
made
in 2010
in the
of debiting
EUR 7,351
thousand
debiting the balance
5.10
Short-Term
Financial
Investments
was
made
in 2010
the amount
of EUR
7,351amount
thousand
the balance
sheet.
sheet.
Merkur Group’s Short-Term Financial Investments by Type
5.10 Short-Term Financial Investments
Item
Deposits, collateral and advances
Item
In thousand EUR
31 December 2010
31 December 2009
0
-
4,351
In thousand EUR
4,351
31 December 2010
31 December 2009
The commercial paper of GBD d. d. that the Group recognized at the and of last year in the amount of
Short-term
investments
4,351
EUR
4,351 financial
thousand,
decreased in 2010 with the handover of 625,670 Maksima 0Invest shares worth
Deposits,
andbased
advances
EUR
3,441collateral
thousand
on the “Agreement on covering the liabilities of the commercial
paper”, 4,351
and
by purchasing the shares of Gorenjska banka valued at EUR 720 thousand and shares of Kopitarna
The commercial
of GBD
d. d. that the Group recognized at the and of last year in the amount of
Sevnica
valued atpaper
EUR 190
thousand.
EUR 4,351 thousand, decreased in 2010 with the handover of 625,670 Maksima Invest shares worth
EUR 3,441 thousand based on the “Agreement on covering the liabilities of the commercial paper”, and
by purchasing
the shares Loans
of Gorenjska
banka Lease
valued at EUR 720 thousand and shares of Kopitarna
5.11
Given Short-Term
and Finance
Sevnica valued at EUR 190 thousand.
In thousand EUR
Item
Inventories
5.9 Inventories
sheet.
sheet.
5.10 Short-Term
Short-Term
FinancialInvestments
Investments
5.10
Financial
5.10 Short-Term Financial Investments
0
4,351
0
4,351
4,351
4,351
Given
Short-Term Loans
and Finance Lease
Given
Given Short-Term
Short-Term Loans
Loansand
and FinanceLease
Lease
Short-termLoans
Loans and
andFinancial
Financial Lease
Lease Given
Given by
Merkur Group
Group by
by Type
Type
Short-term
by Merkur
Short-term Loans and Financial Lease Given by Merkur Group by Type
76
In thousand EUR
In thousand EUR
528
42,673
528
42,673
486
42,345
486
42,345
219
465
219
465
267
41,880
267
41,880
42
328
42
328
81
81
Collateral for Short-Term Loans Given by Merkur Group
Item
6.50%
6.50%
HRK
BAM
375
423
51
216
3.56%
6.50%
4.50%
6.50%
Total
486
In thousand EUR
31 December 2010
31InDecember
thousand 2009
EUR
Total
486
Item
31 December 2010
Mortgages
14
Total
486
Bills of exchange
50
Mortgages
14
186
Bills of exchange
50
- with insurance companies
83
186
- guarantors
103
- with insurance companies
83
Without collateral
237
- guarantors
103
Without collateral
237
Short-Term Loans Given by Merkur Group by Currency and Interest Rate
42,345
31 December 2009
19
42,345
37,915
19
233
37,915
115
233
118
115
4,178
118
4,178
Short-Term Loans Given by Merkur Group by Currency and Interest Rate
Short-Term Loans Given by Merkur Group by Currency Amount
and Interest
in RateValue in
currency in
thousand
Interest
Interest
Amount in
Value
in
Currency
thousands
EUR
rate from
rate to
Interest
Interest
currency
in
thousand
EUR
205
205
1.59%
5.50%
Currency
thousands
EUR
rate from
rate to
RSD
1,593
15
6.50%
6.50%
EUR
205
205
1.59%
5.50%
HRK
375
51
3.56%
4.50%
RSD
1,593
15
6.50%
6.50%
BAM
423
216
6.50%
6.50%
HRK
375
51
3.56%
4.50%
Total
486
BAM
423
216
6.50%
6.50%
Total
486
Changes in Given Short-Term Loans and Receivables from Finance Lease of Merkur Group in 2009 and 2010
In thousand EUR
In thousand EUR
Short-term loans
given to other
Receivables from
Short-term
loans
Item
companies
finance lease
given
to
other
Receivables
from
99,813
758
Item
Short-term maturity of long-term loans
Acquisitions
Interest
Repayment
Reclassification of a loan to long-term assets
Transfer from short-term to long-term given loans*
Acquisitions
Repayment
Transfer of correction from short-term to long-term loans
* Explanation
5.6.
* Explanationin
in item
item 5.6.
Short-term loans
given to other
companies
99,813
-1,893
201,356
12
470
-128,414
-515
-427
170,403
Receivables from
finance lease
758
-758
328
328
-157,500
43,594
5
-27,949
6
28,560
-286
42
1,663
126,395
128,058
0
0
25,500
-125,485
910
28,073
0
98,150
42,345
486
758
328
42
82
Trade
Receivables
and Other
Assets
5.125.12
Trade
Receivables
and Other
Assets
Merkur Group’s Short-Term Trade Receivables
Merkur Group's Short-Term Trade Receivables
Item
Advances for inventory
Trade receivables due from customers
Trade receivables due from associated companies
Trade receivables due from others and active accruals
In thousand EUR
42,118
3,167
28,269
8
10,674
173,613
961
147,609
543
24,500
Revaluation of receivables and the maturity structure of receivables are shown in item 5.23 Financial
Instruments
and
Risk Management.
Revaluation
of receivables
and the maturity structure of receivables are shown in item 5.23 Financial Instruments and
Risk Management.
5.13 Cash and Cash Equivalents
Merkur Group’s Cash and Cash Equivalents
Item
Cash and cash equivalents
Cash in hand
Cash in bank
Demand deposits
In thousand EUR
11,592
2,679
577
680
4,974
1,652
5,909
-
In thousand EUR
In thousand EUR
The commercial paper of GBD d. d. that the Group recognized at the and of last year in the amount of
Thecommercial
commercial
paper
of GBD
d. the
d. that
the
Group recognized
the
and
of last
year
amount of
The
paper
of GBD
d. d. that
Group
recognized
at the andofofat
last
year
inMaksima
the
amount
of in
EURthe
4,351
EUR
4,351 thousand,
decreased
in 2010
with
the handover
625,670
Invest
shares
worth
EUR
4,351
thousand,
decreased
in
2010
with
the
handover
of
625,670
Maksima
Invest
shares
thousand,
decreased
in 2010
withon
thethe
handover
of 625,670
shares worth
EUR commercial
3,441 thousandpaper”,
basedworth
EUR
3,441
thousand
based
“Agreement
on Maksima
coveringInvest
the liabilities
of the
and
EUR
3,441
thousand
basedthe
onliabilities
the “Agreement
on covering the
liabilities
of the commercial
paper”, and
on
the
“Agreement
covering
ofbanka
the commercial
and720
by purchasing
of Gorenjska
by
purchasing
theonshares
of Gorenjska
valued paper”,
at EUR
thousand the
andshares
shares
of Kopitarna
by purchasing
the720
shares
of Gorenjska
valued
at valued
EUR at
720
and shares of Kopitarna
banka
valued
at EUR
thousand
and shares ofbanka
Kopitarna
Sevnica
EURthousand
190 thousand.
Sevnica
valued
at EUR
190 thousand.
Sevnica valued at EUR 190 thousand.
Item
Item
Given short-term loans and finance lease
Given short-term loans and finance lease
Loans given to other companies
Loans given to other companies
- current part of given long-term loans
- current part of given long-term loans
- given short-term loans
- given short-term loans
Receivables from finance lease
15
5.11
5.11
5.11
1,593
In thousand EUR
Item
Item
RSD
10,674
24,500
Revaluation of receivables and the maturity structure of receivables are shown in item 5.23 Financial
Instruments and Risk Management.
Item
Cash in hand
Cash in bank
Demand deposits
Received cheques
In thousand EUR
11,592
2,679
577
680
4,974
1,652
5,909
131
348
The Group has an agreement on automatic bank overdraft on its accounts in the total amount of EUR
Group has
an31
agreement
on automatic
bank
overdraft
on its accounts
in the
total amount
EUR 792
thousand.
792 The
thousand.
On
December
2010, the
Group
exploited
EUR 544
thousand
fromofthis
amount.
Not
agreed
overdrafts
bank
amounted
to thousand
EUR 1,888
on Not
31 December
2010.on
The
fixed
On 31
Decemberon
2010,
theaccounts
Group exploited
EUR 544
fromthousand
this amount.
agreed overdrafts
bank
annual
interest
rate fortodemand
between
0.40%
andThe
2.00%.
accounts
amounted
EUR 1,888deposits
thousandison
31 December
2010.
fixed annual interest rate for demand deposits
is between 0.40% and 2.00%.
5.14 Equity and Reserves
5.14 Equity and Reserves
78
Share capital of Merkur, d. d., the controlling company in the group, totals EUR 54,773 thousand and is divided into
Share capital of Merkur, d. d., the controlling company in the group, totals EUR 54,773 thousand and is
1,312,585 individual ordinary shares. All shares have been paid up in full. An individual ordinary share is registered in
divided into 1,312,585 individual ordinary shares. All shares have been paid up in full. An individual
the name
of is
theregistered
holder andin
gives
holder
to: and gives its holder the right to:
ordinary
share
theits
name
ofthe
theright
holder
• one
vote
at
a
shareholders’
general
meeting,
one vote at a shareholders’ general meeting,
• a pro
ratarata
dividend
from from
profit profit
appropriated
for dividend
payout, payout,
a pro
dividend
appropriated
for dividend
• a pro rata portion of the remainder of estate in bankruptcy or liquidation in the event of bankruptcy or liquidation.
a pro rata portion of the remainder of estate in bankruptcy or liquidation in the event of
bankruptcy
or liquidation.
The shares
have been
issued in dematerialized form and entered in the central securities register run by KDD –
TheCentralna
shares have
been
issued
in dematerialized
klirinško
depotna
družba
d. d. Ljubljana. form and entered in the central securities register run by
KDD – Centralna klirinško depotna druţba d. d. Ljubljana.
Approved
Capital
Approved
Capital
No resolutions have been adopted regarding approved capital.
No resolutions have been adopted regarding approved capital.
Conditional Capital Increase
TheConditional
Articles of Association
of Merkur, d. d. do not include any provisions on conditional capital increase.
Capital Increase
The Articles
of Association
of Merkur,
d. d. do
not includeReserves
any provisions
conditional
increase.
Revenue
reserves
total EUR
55,044
thousand.
for on
own
shares capital
amount
to EUR 53,159
thousand, and will be released upon disposal of own shares or upon their retirement. Statutory reserves
Revenue reserves total EUR 55,044 thousand. Reserves for own shares amount to EUR 53,159 thousand, and will
that are not subject to division amount to EUR 1,798 thousand, while other revenue reserves amount to
be released upon disposal of own shares or upon their retirement. Statutory reserves that are not subject to division
EUR 87 thousand.
amount to EUR 1,798 thousand, while other revenue reserves amount to EUR 87 thousand.
Fair value reserve totals at EUR 84,025 thousand and represents the effects of changes in fair value of
available-for-sale
financial
and property.
areassets
negative
and have increased by EUR 7,770 thousand in 2010. On 31
December 2010, they amounted to EUR 19,415 thousand (31 December 2009: EUR 11,644 thousand).
Translation
are negative
and have
increased
by EUR
7,770 thousand
in 2010. On
31
They refer to reserves
foreign exchange
differences
in including
foreign
subsidiaries’
financial statements
in the
December
2010,
they
amounted
to
EUR
19,415
thousand
(31
December
2009:
EUR
11,644
thousand).
consolidated financial statements.
They refer to foreign exchange differences in including foreign subsidiaries’ financial statements in the
Retained
Loss
consolidated
financial statements.
Retained
Loss
On On
31 31
December
theGroup
Grouphad
had
retained
amounting
EUR 214,670
December2010,
2010, the
retained
lossloss
amounting
to EURto214,670
thousand.thousand.
Retained Loss
On 31 December 2010, the Group had retained loss amounting to EUR 214,670 thousand.
5.155.15
Long-Term
Loans
Taken
Long-Term
Loans
Taken
5.15 Long-Term Loans Taken
Long-Term
Loans
Taken
Merkur
Group
Type
Long-Term
Loans
Taken
by by
Merkur
Group
by by
Type
Item
In thousand EUR
Long-term loans taken from banks
Item
47,870
119,735
Changes in Merkur Group’s Long-Term Taken Loans in 2009 and 2010
In 2008, the Group acquired 131,258 of own shares, or 10% of total share capital.
83
These shares were acquired in relation to ZGD, Article 247, second indent, namely to be offered for repurchase to
employees of the Company or a related company. Because the shares were not offered to employees for repurchase
within a year, the management proposed to the general meeting that the shares be retired. The decision on retiring
the shares was adopted at the 22nd shareholders’ general meeting on 25 February 2011.
In 2010 the Group acquired 13,615 of own shares valued at EUR 3,812 thousand and immediately sold them to Merfin,
d. o. o., at the same price. 16,090 MER shares have been pledges in favor of the bank as a loan collateral.
Fair value reserve totals at EUR 84,025 thousand and represents the effects of changes in fair value of available-forsale financial assets and property.
Translation reserves are negative and have increased by EUR 7,770 thousand in 2010. On 31 December 2010,
they amounted to EUR 19,415 thousand (31 December 2009: EUR 11,644 thousand). They refer to foreign exchange
differences in including foreign subsidiaries’ financial statements in the consolidated financial statements.
47,870
Balance on 1 January 2009
Item
Current part of taken long-term loans
New loans
Current
part of taken
long-term loans
Foreign exchange
differences
New
loans
Loan repayment
Foreign
differences
Transferexchange
to short-term
loans due to failure to fulfill obligations
Loan
repayment
Current part of long-term loans
Transfer to short-term loans due to failure to fulfill obligations
Current part of taken long-term loans
Balance
on 31short-term
December
2009
Transfer from
loans
to long-term (rescheduling)
Current
part
of
taken
long-term
loans
New loans
Transfer
from
short-term
loans
to
long-term
(rescheduling)
New
loans
Loan repayment
Foreign
differences
Transferexchange
to short-term
loans due to failure to fulfill obligations
Loan
repayment
Transfer
loans2010
due to failure to fulfill obligations
Balance to
onshort-term
31 December
119,735
In thousand EUR
Item
In thousand
EUR
Long-term loans taken
from banks
135,248
11,832
135,248
116,704
11,832
1,069
116,704
-12,282
1,069
-41,500
-12,282
-91,336
-41,500
119,735
-91,336
0
119,735
49,722
0
14,776
49,722
-976
14,776
-251
-976
-17,143
-251
-117,992
-17,143
47,870
-117,992
47,870
Long-Term Loans Taken by Merkur Group by Currency and Interest Rate
Long-Term Loans Taken by Merkur Group by Currency and Interest Rate
Own Shares
In 2008, the Group acquired 131,258 of own shares, or 10% of total share capital.
Own Shares
In thousand EUR
Long-Term Loans Taken by Merkur Group by Type
Currency
EUR
HRK
BAM
Total
Amount in
currency in
thousands
44,898
17,724
1,117
Value in
thousand
EUR
44,898
2,401
571
47,870
Interest
rate from
1.73%
5.76%
7.22%
Interest
rate to
84
9.00%
5.76%
84
7.99%
Collateral for Long-Term Loans Taken by Merkur Group
In thousand EUR
Item
Loans taken
Mortgages
Guarantees
Bills of exchange
Collateralized by securities
Without collateral
31 December 2010
31 December 2009
47,870
38,281
6,000
3,589
119,735
34,993
19,838
7,047
57,857
-
Maturity of Long-Term Loans Taken by Merkur Group
In thousand EUR
Trade receivables due from others and active accruals
31InDecember
2009
52,174
7,047
thousand
EUR
61,558
119,735
57,857
31 December 2009
6,002
52,174
119,735
In thousand
EUR
61,558
52,174
31 December
2009
6,002
61,558
119,735
6,002
In thousand
EUR
52,174
31 December
2009
61,558
6,002
119,735
In thousand EUR
35,478
52,174
Merkur
Group’s Non-Current and Current Liabilities from Finance Leases
Item
31 December
2010 31 December
2009
Mature
in 2–5
years Non-Current and Current Liabilities from Finance Leases
12,393
61,558
Merkur
Group’s
5.16
Non-Current
and Current
Liabilities
from
Finance
Leases
In thousand EUR
Merkur
Group’s
Non-Current
and
Current
Liabilities
from
Finance
Leases
Noncurrent
liabilities
from
finance leases
142,155
146,228
Mature
in more
than 5
years
6,002
thousand4,023
EUR
Item
31 December4,217
2010 31InDecember
2009
Current liabilities from finance leases
Noncurrent
liabilities
from finance
142,155
146,228
Merkur
Non-Current
andleases
Current Liabilities from Finance Leases
Total Group’s
146,372
150,250
Item
31 December
2010 31 December
2009
5.16
Non-Current and Current Liabilities from Finance Leases
Current
liabilities
from
finance
leases
4,217
4,023
In
thousand
EUR
Noncurrent liabilities from finance leases
142,155
146,228
5.16
80
1.73%
9.00%
Interest
Interest
5.76%
rate5.76%
from
rate
to
Interest
Interest
7.22%
7.99%
1.73%
9.00%
rate from
rate to
5.76%
5.76%
1.73%
9.00%
Interest
Interest
7.22%
7.99%
5.76%
rate5.76%
from
rate
to
7.22%
7.99%
1.73%
9.00%
In thousand5.76%
EUR
5.76%
Interest
Interest
31 December7.99%
2009
rate7.22%
from
rate to
In thousand
EUR
119,735
1.73%
9.00%
31
December
2009
34,993
In thousand5.76%
EUR
5.76%
19,838
119,735
7.22%
31
December7.99%
2009
7,047
34,993
119,735
In thousand EUR
57,857
19,838
34,993
31 December
2009
7,04719,838
119,735
57,857
7,047
In thousand
EUR
34,993
57,857
19,838
31 December
2009
In thousand
EUR
7,047
119,735
31 December
2009
57,857
34,993
In thousand
EUR
119,735
19,838
Total
146,372
150,250
Current liabilities
from finance
leases
4,217
4,023
Item
2010 31 December
2009
Liabilities
from Assets
Leased
by Merkur group under Finance Lease –31
byDecember
Maturity
Merkur
Group’s
Non-Current
and
Current
Liabilities
from
Finance
Leases
EUR
Total
146,372 In thousand
150,250
Noncurrent
liabilities from finance leases
142,155
146,228
In thousand EUR
Liabilities
from Assets
Leased
by Merkur group under Finance Lease – by Maturity 4,217
Current liabilities
from finance
leases
4,023
Receivables
from
assets
leased
under
financial
lease:
31
December
2010
31
December
2009
In
thousand
EUR
Item
31
December
2010
31
December
2009
Total
146,372
150,250
Liabilities
from Assets Leased by Merkur group under Finance Lease – by Maturity
4,217 In thousand EUR
4,023
Noncurrent liabilities from finance leases
142,155
146,228
dueLiabilities
between 1from
to 5 assets
years leased
31,303
31,549
from
Assets
Leasedunder
by Merkur
group
under Finance Lease
by Maturity
Receivables
financial
lease:
31–December
2010 31 December
2009
Current liabilities from finance leases
4,217
4,023
Liabilities
from
Leased by Merkur group under Finance Lease – by Maturity
more
thanAssets
5year*
years
110,852
114,679
due
in
less
than
a
4,217
4,023
Receivables
from assets leased under financial lease:
31 December
2010 31
December
2009
Total
146,372
150,250
In thousand
EUR
Total
146,372
150,250
due
between
1
to
5
years
31,303
31,549
4,217
4,023
due
in
more than
55 years
110,852
114,679
due
between
1
to
years
31,303
31,549
Non-current
Liabilities
from
Finance
Lease
of Merkur
Group – by Currency
and Interest
Rate
Receivables
from
assets
leased
financial
lease:
2010
31 December 2009
Liabilities
from
Assets
Leased
byunder
Merkur
group under
Finance Lease –31
byDecember
Maturity
Total
146,372
150,250
due
thana5year*
years
110,852
114,679
due in
in more
less than
4,217 In thousand
4,023
EUR
Value146,372
in
Total
150,250
due betweenLiabilities
1 to 5 years
31,303
31,549
Non-current
from Finance Lease of Merkur Group – by Currencythousand
and Interest
Rate
Interest
Interest
due
in more than
years leased under financial lease:
110,852
114,679
Receivables
from5 assets
31 December
2010
31from
December
2009
Currency
EUR
rate
rate
to
Non-current
Liabilities
from Finance Lease of Merkur Group – by Currency
and
Interest
Rate
Value in
Total
146,372
150,250
due
4,217
4,023
EURin less than a year*
142,155
2.13%
4.93%
thousand
Interest
Interest
Value
in
Total
142,155
due between 1 to 5 years
31,303rate from
31,549
Currency
EUR
rate to
Non-current Liabilities from Finance Lease of Merkur Group – by Currencythousand
and Interest Rate
Interest
Interest
due in more than 5 years
110,852 2.13%
114,679
EUR
142,155
4.93%
Currency
EUR
rate from
rate
to
146,372
150,250
Total
142,155
Value
in
EUR
142,155
2.13%
4.93%
Non-current Liabilities from Finance Lease of Merkur Group – by Currency
and Interest
Rate
thousand
Interest
Interest
85
Total
142,155
Non-current
Liabilities
from
Finance
Lease
of
Merkur
Group
–
by
Currency
and
Interest
Rate
Currency
EUR
rate from
rate to
EUR
142,155
2.13%
4.93%
85
Value in
Total
142,155
thousand
Interest
Interest
85
Currency
EUR
rate from
rate to
EUR
142,155
2.13%
4.93%
85
Total
142,155
85
Changes in Non-Current Liabilities from Finance Lease in 2009 and 2010
In thousand EUR
Item
Non-current liabilities from finance leases
In thousand EUR
143,216
Item
Non-current liabilities from finance leases
Current part of liabilities from finance leases
517
In thousand EUR
Acquisitions
9,678
143,216
Repayment
-7,129
Item
Non-current
liabilities
from
finance
leases
Current part of liabilities from finance leases
517
Interest
3,970
Acquisitions
9,678
Balance
on 1 January 2009
143,216
-2
Repayment
-7,129
Current
partof
ofliabilities
liabilities
from
finance
leases
517
Current
part
from
finance
leases
-4,023
Interest
3,970
Acquisitions
9,678
146,228
Foreign
exchange
differences
-2
Repayment
-7,129
Currentpart
partofofliabilities
liabilities
from
finance
leases
4,023
Current
from
finance
leases
-4,023
Interest
3,970
Acquisitions
122
Balance
on
31
December
2009
146,228
-2
Repayment
-8,038
Currentpart
partofofliabilities
liabilities
from
finance
leases
4,023
Current
from
finance
leases
-4,023
Interest
4,039
Acquisitions
122
Balance
on 31 December 2009
146,228
Foreign
exchange
differences
-1
Repayment
-8,038
Current
partof
ofliabilities
liabilities
from
finance
leases
4,023
Current
part
from
finance
leases
-4,217
Interest
4,039
Acquisitions
122
142,155
Foreign
exchange
differences
-1
Repayment
-8,038
Current
part
of
liabilities
from
finance
leases
-4,217
Interest
4,039
Balance
on
31
December
2010
142,155
-1
5.17 Other Non-Current Liabilities
Current
of liabilities
from financeLiabilities
leases
5.17part
Other
Non-Current
Merkur
Other Non-Current
Liabilities
BalanceGroup’s
on 31 December
2010
-4,217
142,155
In thousand EUR
5.17 Other Non-Current Liabilities
Merkur Group’s Other Non-Current Liabilities
Merkur Group’s Other Non-Current Liabilities
ItemOther Non-Current Liabilities
5.17
Merkur
Group’s
Other liabilities
Non-Current
Non-current
operating
to beLiabilities
paid to suppliers
Item
Non-current
operating
liabilities to be paid to others
Other
non-current
liabilities
Non-current operating liabilities to be paid to suppliers
Item
Non-current
operating
liabilities to be paid to others
Other
non-current
liabilities
5.18
Long-term and Short-term Provisions
Non-current operating liabilities to be paid to suppliers
Merkur
Group’s
Long-Term
Provisions
Non-current
operating
liabilities
to be paidby
to Type
others
5.18
5.18
Merkur
Item Group’s Long-Term Provisions by Type
Merkurfor
Group’s
Long-Term
Provisions by Type
Provisions
severance
payProvisions
Merkur
Long-Term
by Type
Item Group’s
Provisions for guarantees
Provisions for taxes
Provisions for severance pay
Item
Other
provisions
Provisions
for
guarantees
Long-term
provisions
Provisions
for
taxes
Provisions for severance
pay
Other
provisions
Provisions for guarantees
Other provisions
5.18
In thousand EUR
40
3,798
31 December 2010- 31 December3,733
2009
In thousand EUR
40
65
40
3,798
31 December 2010- 31 December 3,733
2009
40
65
40
3,798
40
3,733
65
In thousand EUR
In thousand9,509
EUR
34,663
31 December5,369
2010 31 December7,468
2009
23,727 In thousand EUR34,663
9,509
3,649
5,369
31 December 2010 31 December 7,468
2009
1,917
2,042
23,727
34,663
9,5093,649
5,369
7,4681,917
2,042
23,727
3,649
1,917
2,042
86
Long-Term Loans Taken by Merkur Group by Currency and Amount
Interest Rate
in
Value in
EUR
44,898
44,898
currency
in
thousand
Amount
in
Value
in
HRK
17,724
2,401
Currency
thousands
EUR
Long-Term Loans Taken by Merkur Group by Currency andcurrency
Interest Rate
in
thousand
BAM
1,117
571
EUR
44,898
44,898
Currency
thousands
EUR
Total
47,870
HRK
17,724
2,401
Amount
in
Value
in
EUR
44,898
44,898
currency
in
thousand
BAM
1,117
571
HRK
17,724
2,401
Collateral
for Long-Term
Loans Taken
Group
Long-Term
Loans
Taken by Merkur
Groupby
byMerkur
Currency
and thousands
Interest
Rate
Currency
EUR
Total
47,870
Collateral
for Long-Term Loans Taken by Merkur Group
BAM
1,117
571
EUR
44,898
44,898
Total
47,870
Amount in
Value
in
HRK
17,724
2,401
currency
in
thousand
Collateral
for
Long-Term
Loans
Taken
by
Merkur
Group
Item
31 December 571
2010
BAM
1,117
Currency
thousands
EUR
Loans
taken
47,870
Total
47,870
Collateral
EUR
44,898
44,898
Item
31 December
2010
Mortgages
38,281
HRK
17,724
2,401
Guarantees
Loans
47,870
BAM
1,117
571
Item taken
31 December
2010Collateral
Bills
of
exchange
6,000
Mortgages
38,281
Total
47,870
Loans taken
47,870
Collateralized
by securities
Guarantees
Mortgages
38,281
Item
31 December
2010
Without
collateral
3,589
Bills
of exchange
6,000
Guarantees
Collateral
Loans taken
47,870Collateralized
by
securities
Bills
of exchange
6,000Mortgages
38,281
Without collateral
3,589
Collateralized
by securities
Maturity
of Long-Term
Loans Taken by Merkur Group
Guarantees
Item
31 December 2010-Without
collateral
3,589
Bills
of taken
exchange
6,000
Loans
47,870
Maturity
of Long-Term Loans Taken by Merkur Group
Maturity
of
Long-Term
Loans
Taken
by
Merkur
Group
Item
31 December
2010Collateralized
by securities
Mortgages
38,281
Loans
taken
47,870
Without
collateral
3,589
Guarantees
Maturity
of Long-Term Loans Taken by Merkur Group
Item
31 December
2010
Mature
in 1–2 years
35,478
Bills
of exchange
6,000
Mature
in 2–5 by
years
12,393
Loans
47,870
Collateralized
securities
Item taken
31 December
2010Maturity
of Long-Term
Loans Taken by Merkur Group
more
than
5
years
Mature
in
1–2
years
35,478
Without
collateral
3,589Loans taken
47,870
Mature
12,393
Mature in
in 2–5
1–2 years
years
35,478
Item
31 December
2010
Mature
in
more
than
5
years
Mature
in
2–5
years
12,393
Maturity
of
Long-Term
Loans
Taken
by
Merkur
Group
Loans taken
47,870
5.16
Mature
in more
than 5 years
Mature in
1–2 years
35,478Item
31 December
2010
Mature in
2–5 years
12,393
5.16
Non-Current
and Current Liabilities from Finance Leases
Merkur Group’s Non-Current and Current Liabilities from Finance Leases
Mature
in more
than 5 yearsand Current Liabilities from Finance Leases
Loans
47,8705.16taken
Non-Current
Changes in Merkur Group’s Long-Term Provisions in 2009 and 2010
Changes in Merkur Group’s Long-Term Provisions in 2009 and 2010
Provisions for
Item
severance pay
7,488
Provisions set aside during the year
558
Provisions used during the year
-526
Reversal of provisions
-45
Translation differences
-8
Provisions set aside during the year
Provisions used during the year
Reversal of provisions
Translation differences
Provisions
for issued
Provisions guarantees,
for share
mortgages
options and lawsuits
2,138
0
-121
-2,018
-
In thousand EUR
Provisions
Other
for taxes provisions
0
1,964
795
-603
-115
1
Long-term
provisions
11,590
1,354
-1,250
-2,177
-7
7,468
0
0
0
2,042
9,509
7,468
185
-402
-1,861
-21
0
-
0
23,727
-
0
3.649
-
2,042
587
-635
-76
-
9,509
28,148
-1,036
-1,937
-21
5,369
0
23,727
3.649
1,917
34,663
Provisions for severance pay and long-service bonuses are set according to the amount of expected
payouts,Provisions
discounted
at the end
reportingbonuses
period.are
Individual
companies
in the ofGroup
calculated
for severance
pay of
andthe
long-service
set according
to the amount
expected
payouts, the
provisions
based at
onthe
a methodology
of anperiod.
authorized
actuary
and by
taking
into
accountthe
labor
legislation
discounted
end of the reporting
Individual
companies
in the
Group
calculated
provisions
based on
of the country,
which of
defines
the employees'
to severance
pay
andlegislation
long-service
anddefines
their
a methodology
an authorized
actuary andright
by taking
into account
labor
of the bonuses,
country, which
taxation.
the employees’ right to severance pay and long-service bonuses, and their taxation.
The following
estimates
are used
in calculatingpotential
potentialliabilities
liabilities (by
The following
estimates
are used
in calculating
(bycountry):
country):
Slovenia:
Slovenia:
• the growth of the average salary in the country is estimated at 2.5% a year, and growth of salaries in the company growth
the average
salary
in the
countrysalary
is estimated
at 2.5% a year, and growth of
the
at 0,5%
a year,ofwhich
presents the
estimated
long-term
growth,
salaries
in
the
company
at
0,5%
a
year,
which
presents
the
estimated
salary
growth,
• the calculation of liabilities for severance pay is connected to the years of servicelong-term
of individual
employees,
the
calculation
of
liabilities
for
severance
pay
is
connected
to
the
years
of
service
of
individual
• the selected discount rate stands at 4.00% a year.
employees,
Croatia:
the selected discount rate stands at 4.00% a year.
• the growth of the average salary in the country is estimated at 0% a year, and growth of salaries in the company at Croatia: 0% a year, which presents the estimated long-term salary growth,
•the
thegrowth
calculation
of liabilities
forsalary
severance
paycountry
is connected
to the years
service
of individual
employees,
of the
average
in the
is estimated
atof0%
a year,
and growth
of salaries
•inthe
selected
discount
rate
stands
at
8.00%
a
year.
the company at 0% a year, which presents the estimated long-term salary growth,
the calculation of liabilities for severance pay is connected to the years of service of individual
Serbia:
•employees,
the growth of the average salary in the country is estimated at 10% a year, and growth of salaries in the company selected
rate stands
at 8.00%
a year.salary growth,
the
at 10%
a year,discount
which presents
the estimated
long-term
82
• the calculation of liabilities for severance pay is connected to the years of service of individual employees,
the growth of the average salary in the country is estimated at 10% a year, and growth of salaries
Bosnia
Herzegovina:
in theand
company
at 10% a year, which presents the estimated long-term salary growth,
•the
thecalculation
growth of theofaverage
salary
the country pay
is estimated
at 0% a year,
andyears
growthofofservice
salaries inofthe
company at liabilities
forinseverance
is connected
to the
individual
employees,
0% a year, which presents the estimated long-term salary growth,
•the
theselected
calculation
of liabilities
forstands
severance
pay is connected
discount
rate
at 10.00%
a year. to the years of service of individual employees,
Bosnia and Herzegovina:
Provisions in this category decreased in 2010 due to paid out severance pay at regular retirement, and paid longthe growth of the average salary in the country is estimated at 0% a year, and growth of salaries
service bonuses totaling at EUR 402 thousand, and also due to the provision withdrawal in the amount of EUR1,861
in the company at 0% a year, which presents the estimated long-term salary growth,
thousand as a consequence of a significantly lower number of employees in almost all the companies in the group.
the calculation of liabilities for severance pay is connected to the years of service of individual
employees,
Based
on the decision of the Management Board from 2009, all of the unrealized share options from the previous
the selected
discount
at for
4.00%
year.
years
were withdrawn,
andrate
the stands
provisions
themacancelled.
Serbia:
Provisions in this category decreased in 2010 due to paid out severance pay at regular retirement, and
paid long-service bonuses totaling at EUR 402 thousand, and also due to the provision withdrawal in the
amount of EUR1,861 thousand as a consequence of a significantly lower number of employees in almost
all the companies in the group.
Based
on
the decision
of
Management
Board
fromset
allguarantees,
of the
unrealized
share
options
from
the
December
2010,
thethe
Group
had provisions
set aside
for2009,
issued
mortgages,
and guarantees
for and
On On
3131
December
2010,
the
Group
had provisions
aside
for
issued
guarantees,
mortgages,
previous
years
were
withdrawn,
and
the
provisions
for
them
cancelled.
third
parties
for
liabilities
of
HTC
DVA,
d.
o.
o.,
Merfin,
d.
o.
o.
and
Alpos,
d.
d.
in
the
amount
of
EUR
23,231
thousand,
guarantees
fordecision
third parties
for
liabilities ofBoard
HTC from
DVA,2009,
d. o. all
o., Merfin,
d. o. o. and
Alpos,
d. d.
in the
the
Based
the
of the
Management
the unrealized
share
options
from
and on
provisions
for lawsuits
against
any
ofprovisions
the Group’sfor
companies
inagainst
theof
amount
of
EUR
496
thousand.
The reasons
amount
of
EUR
23,231
thousand,
and
lawsuits
any
of
the
Group's
companies
in
the
previous
years were2010,
withdrawn,
and the
provisions
for set
them
cancelled.
On
31setting
December
the
had
provisions
aside
for
guarantees,
mortgages,
for
aside496
provisions
andGroup
other
information
regarding
the issued
guarantees
are described
under
5.24 and
amount
of EUR
thousand.
The important
reasons
for
setting
aside
provisions
and
other
important
information
guarantees
forLiabilities
third parties
for liabilitiesunder
of HTC
d. o. o.,
Merfin, and
d. o.Receivables.
o. and Alpos, d. d. in the
Contingent
and are
Receivables.
regarding
the
guarantees
5.24DVA,
Contingent
Liabilities
On
31 December
2010,
the described
Group
provisions
set aside
for issued
guarantees,
mortgages,in and
amount
of EUR 23,231
thousand,
andhad
provisions
for lawsuits
against
any of the
Group's companies
the
guarantees
forGroup
third
parties
for The
liabilities
HTC
DVA,
d. o. thousand
o.,
Merfin,
d. liability
o.other
o. and
Alpos,d. d.,
d.
d. in the
In 2010,
the
set
aside provisions
in theof
amount
of
EUR 3,649
for tax
ofimportant
Merkur,
arising
amount
of
EUR
496
thousand.
reasons
for
setting
aside
provisions
and
information
In 2010,
the
Group
set aside
in the of
amount
of EUR
3,649 thousand
for
tax liability
of Merkur,
d.
amount
EUR
23,231
thousand,
and provisions
forContingent
lawsuits
any
of
Group's
in the
from aof
decision
issued
by
the provisions
Tax
Administration
the
Republic
ofagainst
Slovenia.
Theand
taxthe
inspection
is companies
described
in more
regarding
the
guarantees
are
described
under
5.24
Liabilities
Receivables.
d.,
arising
from
a
decision
issued
by
the
Tax
Administration
of
the
Republic
of
Slovenia.
The
tax
amount
EUR
thousand.
The
reasons
for settingReport.
aside provisions and other important information
detailof
under
6.7496
Income
Tax of the
Merkur,
d. d., Accounting
inspectionthe
is described
in are
more
detail under
6.75.24
Income
Tax of the
Merkur,
d. d.,
Accounting Report.
regarding
guarantees
described
under
Contingent
Liabilities
and
Receivables.
In 2010,
Groupapply
set aside
provisions
in the
amount
EUR 3,649
thousand
for taxand
liability
of Merkur, d.
Other the
provisions
to long-term
deferred
income
fromof
sale-and-leaseback
of real estate,
to retained
d.,
arising
from
a
decision
issued
by
the
Tax
Administration
of
the
Republic
of
Slovenia.
The
Other
provisions
apply
toquote
long-term
deferred
from
sale-and-leaseback
ofimproving
real estate,
andtax
to
subsidy
forGroup
exceeding
for employment
ofincome
disabled
persons,
which
is dedicated
to
theMerkur,
working
In
2010,
the
set the
aside
provisions
in the
amount
ofTax
EUR
3,649
thousand
forAccounting
tax
liability
of
d.
inspection
is
described
in
more
detail
under
6.7
Income
of
the
Merkur,
d.
d.,
Report.
retained
subsidy
for
exceeding
the
quote
for
employment
of
disabled
persons,
which
is
dedicated
to
environment
of
disabled
persons.
d., arising from a decision issued by the Tax Administration of the Republic of Slovenia. The tax
improving the
working environment
of under
disabled
inspection
is described
detail
6.7persons.
Income
the Merkur, d. d., Accounting
Report.and to
Other
provisions
applyintomore
long-term
deferred
income Tax
fromofsale-and-leaseback
of real estate,
retained subsidy for exceeding the quote for employment of disabled persons, which is dedicated to
Short-term
Provisions
of long-term
Merkur Group
– by Type
Other
provisions
applyenvironment
to
deferred
income from sale-and-leaseback of real estate, and to
improving
working
of disabled
persons.
Short-termthe
Provisions
of Merkur Group
– by Type
retained
subsidy
for exceeding
the quote
for employment of disabled persons, which is dedicated to
In thousand EUR
improving the working environment of disabled persons.
Short-term Provisions of Merkur Group – by Type
Item
Short-term
Short-termProvisions
provisionsof Merkur Group – by Type
Provisions for lawsuits and contractual obligations
Item
31 December 2010
798
295
31 December 2010
31 December 2009
In thousand EUR
1.399
In
thousand
EUR
869
31 December 2009
Short-term
provisions
798
1.399
Provisions for
liabilities to employees for unpaid salaries and for
Item
compensation
for
unused
leave
503
529
Provisions for lawsuits and contractual obligations
295
869
Short-term provisions
798
1.399
Provisions
for
to employees
forobligations
unpaid salaries
and for for liabilities towards295
Provisions
for liabilities
lawsuits
and
contractual
869
The
Group’s
short-term
provisions
comprise
provisions
employees (fur unpaid
compensation for unused leave
503
529
salaries
and
for
compensation
for
unused
annual
leave),
and
for
lawsuits
and
contractual
obligations.
The
Group’s
short-term
provisions
comprise
provisions
for
liabilities
towards
employees
(fur
unpaid
salaries
and
for
Provisions for liabilities to employees for unpaid salaries and for
compensation
for
unused
annual leave), and for lawsuits and contractual obligations.
compensation
unused
leave
529
The
Group’s for
short-term
provisions comprise provisions for liabilities towards 503
employees (fur unpaid
salaries
and forTaken
compensation for unused annual leave), and for lawsuits and contractual obligations.
5.19 Group’s
Loans
The
short-term provisions comprise provisions for liabilities towards employees (fur unpaid
salaries and for compensation for unused annual leave), and for lawsuits and contractual obligations.
5.19 Loans Taken
5.19
Loans
Taken
Short-term
Loans
Taken by Merkur Group by Type
5.19Short-term
LoansLoans
TakenTaken by Merkur Group by Type
Item
Short-term
Loans Taken by Merkur Group by Type
In thousand EUR
31 December 2010
31 December 2009
In thousand
EUR
398,910
Loans taken
445,133
Short-term
Loans Taken by Merkur Group by Type
Item
31 December
2010
31InDecember
2009
Loans taken from banks
425,505
361,406
thousand
EUR
-Loans
current
part
of
taken
long-term
loans
117,992
91,336
445,133
398,910
Item taken
31 December
2010
31 December
2009
- transfer
from
long-term
17,143
41,500
Loans
taken
from
banks loans due to the failure to fulfill conditions
425,505
361,406
Loans
445,133
398,910
taken taken
short-term
loans
290,370
228,570
-- current
part of taken
long-term loans
117,992
91,336
Loans
taken
from
banks
425,505
361,406
Short-term
loans
taken
from
other
parties
19,628
37,503
- transfer from long-term loans due to the failure to fulfill conditions
17,143
41,500
- current part of taken long-term loans
117,992
91,336
- taken short-term loans
290,370
228,570
- transfer from long-term loans due to the failure to fulfill conditions
17,143
41,500
Short-term
loans
taken
from
other
parties
19,628
37,503
Short-Term Loans Taken from Banks by Merkur Group by Currency and Interest Rate
- taken short-term loans
290,370
228,570
Short-term loans taken from other parties
37,503
Amount in
Value19,628
in
Short-Term Loans Taken from Banks by Merkur Group bycurrency
Currency
and
Interest
Rate
in
thousand
Interest
Interest
Short-Term Loans Taken from Banks by Merkur Groupthousands
by Currency and Interest
Currency
EUR Rate rate from
rate to
Short-Term Loans Taken from Banks by Merkur Group byAmount
Currency
in and Interest
ValueRate
in
EUR
420,206
420,206
1.70%
9.00%
currency in
thousand
Interest
Interest
RSD
119,985
1,116
18.00%
18.00%
Amount
in
Value
in
Currency
thousands
EUR
rate from
rate to
currency
in
thousand
Interest
HRK
10,001
1,355
5.76% Interest
9.16%
EUR
420,206
420,206
1.70%
9.00%
Currency
thousands
EUR
rate from
rate to
BAM
3,938
2,009
6.99%
8.00%
RSD
119,985
1,116
18.00%
18.00%
EUR
420,206
420,206
1.70%
9.00%
MKD
49,948
819
7.50%
7.90%
HRK
10,001
1,355
5.76%
9.16%
RSD
119,985
1,116
18.00%
18.00%
Total
425,505
BAM
3,938
2,009
6.99%
8.00%
HRK
10,001
1,355
5.76%
9.16%
MKD
49,948
819
7.50%
7.90%
BAM
3,938
2,009
6.99%
8.00%
Total
425,505
MKD
49,948
819
7.50%
7.90%
Total
425,505
88
88
87
88
Based on the decision of the Management Board from 2009, all of the unrealized share options from the
previous years were withdrawn, and the provisions for them cancelled.
- payables on assignment
- accrued costs
- other payables
Short-term trade payables – interest rate swaps
5.21
EUR
HRK
EUR
HRK
BAM
HRK
BAM
Total
BAM
Total
Total
19,335
2,151
19,335
2,151
2,1514
44
Collateral for Short-Term Loans Taken by Merkur Group
Collateral for Short-Term Loans Taken by Merkur Group
Collateral
for Short-Term
Short-Term Loans
Loans Taken
Taken by
byMerkur
Merkur Group
Group
Collateral for
Item
Item
Loans taken
Item
Loans
taken
Mortgages
Loans
taken
Mortgages
Guarantees
Mortgages
Guarantees
Inventories
Guarantees
Inventories
Bills of exchange
Inventories
Bills
of exchange
exchange
Collateralized
by securities
Bills
of
Collateralized
by
securities
Without
collateral
Collateralized by securities
Without
collateral
Without collateral
19,335
291
19,335
291
2912
19,628
22
19,628
19,628
31 December 2010
31 December
December
2010
445,133
31
2010
445,133
143,410
445,133
143,410
6,035
143,410
6,035
43,674
6,035
3.00%
4.50%
3.00%
4.50%
6.50%
4.50%
6.50%
6.50%
5.21
Interest
rate to
Interest
Interest
rate
to
9.00%
rate
to
9.00%
4.50%
9.00%
4.50%
7.99%
4.50%
7.99%
7.99%
In thousand EUR
In
thousand EUR
EUR
31
2009
In December
thousand
31 December
December398,91
2009
31
2009
43,674
77,636
43,674
77,636
148,743
77,636
148,743
25,635
148,743
25,635
25,635
398,91
166,158
398,91
166,158
18,795
166,158
18,795
97,515
18,795
97,515
78,444
97,515
78,444
34,864
78,444
34,864
3,133
34,864
3,133
3,133
5.20
Trade and Other Payables Including Derivative Financial Instruments
5.20
Trade
and Other
Other
Payables
Including
Derivative
Financial
Instruments
5.20
Trade
andPayables
Other Payables
Including
Derivative
Financial
Instruments
5.20
Trade and
Including
Derivative
Financial
Instruments
84
Merkur Group's Short-Term Trade and Other Payables Including Derivative Financial Instruments
Merkur
Group’s
Short-Term
Trade
Other
Payables
Including
Derivative
Financial
Instruments
Merkur
Group's
Short-Term
Trade
andand
Other
Payables
Including
Derivative
Financial
Instruments
In thousand EUR
Merkur Group's
Short-Term
Trade
and
Other
Payables
Including
Derivative
Financial
Instruments
InDecember
thousand EUR
EUR
In
thousand
Item
31 December 2010 31
2009
Trade
and
other
payables,
including
derivative
financial
Item
31
December
2010
31
December
2009
Item
instruments
178,236
275,593
Trade
and other
other payables,
payables, including
including derivative
derivative financial
financial
Trade
and
instruments
178,236
275,593
Advances
payable
1,092
13,072
instruments
178,236
275,593
Advances
payable
1,092
13,072
Trade
payables
to
suppliers
141,283
232,387
Advances payable
1,092
13,072
Trade
payables
to
suppliers
141,283
232,387
Bills
payable
568
Trade payables to suppliers
141,283
232,387
Bills
payable
568
Trade
payables
to
associated
companies
5
374
Bills payable
568
Trade
payables
to
associated
companies
5
374
Trade
payables
to
others
35,856
25,679
Trade payables to associated companies
5
374
Trade
payables
to others
others
35,856
25,679
- salaries
payable
5,826
5,670
Trade
payables
to
35,856
25,679
salaries
payable
5,826
5,670
payables
to state institutions
4,659
7,594
---salaries
payable
5,826
5,670
payables
to
state
institutions
4,659
7,594
interest
payables
11,889
2,772
- payables to state institutions
4,659
7,594
interest
payables
11,889
2,772
payables
on
assignment
331
742
- interest payables
11,889
2,772
payables
on
assignment
331
742
accrued
costs
2,803
6,181
- payables on assignment
331
742
accrued
costs
2,803
6,181
other payables
10,348
2,720
---accrued
costs
2,803
6,181
- other
other payables
payables
10,3482,720
trade payables – interest rate swaps
3,513
-Short-term
10,348
2,720
Short-term
trade
payables
–
interest
rate
swaps
3,513
Short-term trade payables – interest rate swaps
3,513
5.21
5.21
5.21
Debts Classified in the Groups for Sale
Debts Classified
Classified in
in the
the Groups
Groups for
for Sale
Sale
Debts
Merkur Group’s debts classified in the groups for sale
Merkur
Group’s debts
debts classified
classified in
in the
the groups
groups for
for sale
sale
Merkur Group’s
Item
Item
Debts classified for sale
Item
Debts
classified
for sale
sale
Short-term
debtsfor
Debts
classified
Short-term debts
debts
Short-term
In thousand EUR
In
thousand EUR
EUR
In thousand
31
December 2010
2010 31
31 December
December 2009
2009
7,864
1,625
31 December
7,864
1,625
7,864
1,625
7,864
1,625
7,864
1,625
7,864
1,625
89
89
89
742
6,181
2,720
3,513
In thousand EUR
Item
31 December 2010
31 December 2009
7,864
7,864
1,625
1,625
Debts classified for sale
Short-term debts
5.22
Deferred Taxes
89
5.22
Deferred Taxes
Group’s
Deferred Tax Assets and Liabilities
5.22Merkur
Deferred
Taxes
Merkur Group’s Deferred Tax Assets and Liabilities
Merkur Group’s Deferred Tax Assets and Liabilities
Item
Property,
plant and equipment
Item
Investment property
Financial assets
Investment property
Inventories
Financial assets
Provisions
Inventories
Other items
Provisions
Tax base of recognized accumulated losses
Other items
Net tax assets / tax liabilities
Tax base of recognized accumulated losses
Tax assets
31 Dec. 2010 31 Dec. 2009
Tax assets
31 Dec. 2010- 31 Dec.1,041
2009
1,041
179
268
179
1,323
268
2,694
1,323
410
2,694
0
5,914
410
Net tax assets / tax liabilities
Changes in Temporary Differences in Merkur Group in 2010
0
Balance at the
beginning of
Balance
the
Item
theatyear
beginning
of
11,823
Item
the year
Investment property
1
11,823
Financial assets
4,076
Investment property
1
Inventories
-83
Financial assets
4,076
Provisions
-1,314
Inventories
-83
Other items
-2,375
Provisions
-1,314
Tax base of utilized accumulated losses
-410
Other items
-2,375
Total
11,717
Tax base of utilized accumulated losses
-410
Total
11,717
In accordance with the facts listed in item 3.1 Going
5,914
In thousand EUR
Tax liabilities
In thousand EUR
31 Dec. 2010 31 Dec. 2009
Tax liabilities
12,863
31 Dec. 2010- 31 Dec.
2009
1
12,863
4,255
1
185
4,255
9
185
319
9
319
0
17,632
0
17,632
In thousand EUR
In thousand EUR
Recognized in
Balance at
Recognized comprehensive
Translation the end of
Recognized
in
at
in expenses
income
differences Balance
the year
Recognized
Translation
comprehensive
the
end
of
-2,461
-9,213
-149
in expenses
income
differences
the year
-1
-2,461
-9,213
-149
179
-4,255
-1
83
179
-4,255
1,314
83
1,672
703
1,314
370
40
1,672
703
1,156
-12,765
-108
0
370
40
1,156
-12,765
-108
0
Concern Assumption, the long-term assets and
liabilities from deferred taxes were eliminated from the Group’s financial statements.
In accordance
factslisted
listed
in item
3.1 Going
Assumption,
theassets
long-term
assets
and
In accordancewith
withthe
the facts
in item
3.1 Going
ConcernConcern
Assumption,
the long-term
and liabilities
from
liabilities
from
deferred
taxes
were
eliminated
from
the
Group’s
financial
statements.
deferred
taxes
were
eliminated
from
the
Group’s
financial
statements.
Tax loss from the current and previous years on the level of Merkur Group amounted to EUR 102,989
thousand.
Deferred
tax assets
in the years
amount
of level
EUR 19,009
thousand
wouldtobe
under this
loss
fromthe
thecurrent
current
and
on the
Merkur
amounted
EURrecognized
102,989
thousand.
Tax Tax
loss
from
andprevious
previous
years
on theoflevel
of Group
Merkur
Group amounted
to EUR
102,989
item
if there
was
no going
concern.
Deferred
tax
assets
in
the
amount
of
EUR
19,009
thousand
would
be
recognized
under
this
item
if
there
was
no going
thousand. Deferred tax assets in the amount of EUR 19,009 thousand would be recognized under
this
concern.
item if there was no going concern.
Short-Term Loans Taken from Other Companies by Merkur Group by Currency and Interest Rate
Short-Term Loans Taken from Other Companies by Merkur Group by Currency and Interest Rate
Short-Term
Loans Taken
Taken from
from Other
Other Companies
Companies by
byMerkur
Merkur Group
Group by
by Currency
Currency and
andInterest
Interest Rate
Rate
Short-Term Loans
Amount in
Value in
Interest
currency
in
thousand
Amount in
in
Value in
in
Amount
Value
Currency
thousands
EUR
rate
from
currency
in
thousand
Interest
currency in
thousand
Interest
Currency
thousands
EUR
rate
from
EUR
19,335
19,335
3.00%
Currency
thousands
EUR
rate from
331
2,803
10,348
-
5.23 Financial Instruments
5.23
and
Financial
Risk Management
Instruments and Risk Management
5.23 Financial Instruments and Risk Management
Credit Risk
Credit Risk
Credit Risk
Merkur
Group’s
Maximum
Exposure
Merkur
Group’s
to Credit
Maximum
RiskRisk
in 2009
Exposure
and and
2010
to Credit
Merkur
Group’s
Maximum
Exposure
to Credit
in 2009
2010 Risk in 2009 and 2010
In thousand EUR
Net
Gross Corrections
Net
Concentration*
Gross Corrections Net
Concentration*
Gross
Corrections
Net
Concentration*
Gross
Corrections Concentration*
Item
Item
31 Dec. 2010 31 Dec. 201031 31
Dec.
Dec.
2010
201031 Dec.
31 Dec.
20102010
31 Dec.
31 Dec.
201020093131
Dec.
Dec.
2010
200931 31
Dec.
Dec.
2009
200931 Dec.
31 2009
Dec. 2009
31 Dec. 2009
31 Dec. 2009
Shares and stakes available for
Shares
sale and stakes available
128,650
for sale
148,289
128,650
19,639
148,28999%
19,639
172,999
182,022
99%
172,999
9,023
182,022 99%
9,023
99%
Bank deposits
Bank deposits
3,393
3,393
3,393 3,393
100%
16,145
100%
16,145
16,145 16,145 100%
100%
Exposure 43,708
of129,228
Merkur Group’s
Receivables
Due from Customers
to Credit Risk by Geographical Region in
Loans given
Loans given
12,772
212,394
12,772
199,622
212,39499% 199,622
43,708
172,936
99%
172,936
98% 129,228
98%
2010
and
2009
Exposure
of
Merkur
Group’s
Receivables
Due
from
Customers
to Credit Risk by Geographical Region in
Receivables from finance lease 42
42
42 42
100%
- 442
100%
442
442 442 100%
100%
2010 and 2009
In thousand EUR
Trade receivables
Trade receivables
28,277
65,465
28,277
37,188
65,46519%
37,188
148,010
172,060
19%
148,010
24,049
172,060 16%
24,049
16%
In thousand
EUR
Book
value
Receivables due from others Receivables due from others
14,137
30,838
14,137
16,701
30,83815%
16,701
25,571
15%
30,184
25,571
4,613
30,184 52%
4,613
52%
Book
value
Item
2010
2009
Cash and cash equivalents Cash and cash equivalents 11,592
11,592
11,592 11,592
100%
2,679
100%
2,679
2,679 2,679 100%
100%
Item
2010
2009
Slovenia
19,858
115,677
Total
Total
198,863
472,013
198,863
273,150
472,013
273,150
409,554
576,467
409,554
166,913
576,467
166,913
Slovenia
19,858
115,677
EU countries
1,305
4,988
* Concentration describes what percentage of exposure applies to top 10 partners.
EU
countries
1,305
4,988
Former Yugoslavian countries
7,069
26,996
Former
Yugoslavian
countries
7,069
26,996
* Concentration describes what
* Concentration
percentagedescribes
of exposure
what
applies
percentage
to top 10
of exposure
partners. applies to top 10 partners.
Other countries
45
350
Other
countries
45
350
In 2010 and before the compulsory settlement proceedings, we rescheduled the following loans, given to:
Total
28,277
148,010
In 2010 and before the compulsory
In 2010 and
settlement
before the
proceedings,
compulsory
wesettlement
rescheduled
proceedings,
the following
we loans,
rescheduled
given to:
the following loans, given to:
• Renta A d. o. o. in the amount of EUR 5,500 thousand; extended from 30 March 2010 to 30 June 2010, and from 30 Total
28,277
148,010
86
- Renta A d. o. o. in the amount
- Renta
of EUR
A d. o.
5,500
o. in thousand;
the amount
extended
of EUR 5,500
from 30
thousand;
March 2010
extended
to 30 June
from 30
2010,
March
and2010
from to
3030
June
June
2010
2010,
to 30
andSeptember
from 30 June
2010,
2010
of which
to 30 September 2010, of which
Impairment
losses
June 2010 to 30 September 2010, of which EUR 5,500 thousand in the correction on 31 December 2010
EUR 5,500 thousand in theEUR
correction
5,500 thousand
on 31 December
in the correction
2010
on 31 December 2010
Impairment losses
• Factor
leasingd.d.o.
o. o.
o. in
amount
ofof
EUR
20,000
extended
May
2010
to 3 May
2011,
which
3 of
- Factor
leasing
inthe
-the
Factor
amount
leasing
EUR
d. o.
20,000
o.thousand;
in the
thousand;
amount
extended
of from
EUR320,000
from
3thousand;
May
2010
extended
to 3ofMay
from
2011,
May
which
2010
EUR
to 320,000
May 2011,
thousand
of which
in the
EUR
correction
20,000 thousand
on 31
in the correction on 31
Impairment
EUR 20,000
thousand in the
correction2010
on 31 December 2010
Maturitylosses
of Merkur Group’s Receivables Due from Customers in 2009 and 2010
December
2010
December
Maturity of Merkur Group's Receivables Due from Customers in 2009 and 2010
• HTC
DVAd.d.o.
o. o.
o. in
EUR
147,500
extended
from 28
March
2010
to 28 March
2013,
which
March
- HTC
DVA
inthe
theamount
amount
- HTCofDVA
of
EUR
d. o.
147,500
o.thousand;
in thethousand;
amount
of
extended
EUR
147,500
from 28
thousand;
March
2010
extended
to
28ofMarch
from
282013,
of 2010
whichtoEUR
28 March
136,638
2013,
thousand
ofMerkur
which
in the
EUR
correction
136,638
thousand
on
the correction
Maturity
of
Group's
Receivables
Dueinfrom
Customerson
in 2009 and 2010
EUR 136,6382010.
thousand in the
31 December 2010.
31 December
31 correction
Decemberon2010.
Gross value
Impairment
13,473
13,473
5,664
5,664
16,228
16,228
7,632
7,632
22,468
22,468
65,465
65,465
8181
8,440
8,440
6,980
6,980
21,688
21,688
37,188
37,188
91
The disclosure on collaterals, received for loans that have matured or have been impaired are in item 5.11, and in most
Gross
Impairment
Item
Dec.value
2010
31
Dec. 2010
Thecases
disclosure
collaterals,
The
disclosure
for on
loans
collaterals,
that have
received
maturedfororloans
have that
beenhave
impaired
matured
are or
in have
item 5.11,
been and
impaired
in most
arecases
in item
apply
5.11,
toand
received
in most
bills
cases
of exchange.
apply to 31
received
bills of exchange.
apply toonreceived
bills
ofreceived
exchange.
Item
31 Dec. 2010
31 Dec. 2010
Exposure of Merkur Group’s Receivables Due from Customers to Credit Risk by Geographical Region in
Exposure of Merkur Group’s Receivables Due from Customers to Credit Risk by Geographical Region in
2010 and 2009
2010 and 2009
In thousand EUR
Book value
Item
2010
2009
Slovenia
19,858
115,677
EU countries
1,305
4,988
Former Yugoslavian countries
7,069
26,996
Other countries
45
350
Total
28,277
148,010
Impairment losses
Maturity of Merkur Group's Receivables Due from Customers in 2009 and 2010
In thousand EUR
Gross value
31 Dec. 2010
Impairment
31 Dec. 2010
Gross value
31 Dec. 2009
Impairment
31 Dec. 2009
Not yet due
Overdue 0–30 days
Overdue 31–180 days
More than a year
overdue
13,473
5,664
16,228
7,632
81
8,440
6,980
90,039
31,816
20,156
9,358
5
1,382
2,071
2,583
22,468
21,688
20,688
18,008
Total
65,465
37,188
172,060
24,049
Item
Maturity of Merkur Group's Receivables Due from Others in 2010 and 2009
In thousand EUR
Not yet due
Not
yet due
Overdue
0–30 days
Overdue
days
Overdue 0–30
31–180
days
Overdue
31–180
days
More than181–365
a year days
Overdue
overdue
More
than a year
overdue
Total
Total
91
Gross value
Gross
31
Dec.value
2009
31 Dec.
2009
90,039
90,039
31,816
31,816
20,156
20,156
9,358
9,358
20,688
20,688
172,060
172,060
Maturity of Merkur Group's Receivables Due from Others in 2010 and 2009
Maturity
of Merkur
Group’s
Receivables
Others
in and 2009
Maturity
of Merkur
Group's
Receivables
DueDue
fromfrom
Others
in 2010
2010 and 2009
Item
Item
Not yet due
Not
yet due
Overdue
0–30 days
Overdue
days
Overdue 0–30
31–180
days
Overdue 181–365
31–180 days
Overdue
days
Overdue
181–365
days
More than a year overdue
More
Total than a year overdue
Total
Gross value
Gross
31
Dec.value
2010
31 Dec.7,908
2010
7,908
3,082
3,082
2,782
2,782
12,291
12,291
4,775
4,775
30,838
30,838
Impairment
Impairment
31
Dec. 2010
31 Dec. 2010141141
2,320
2,320
9,464
9,464
4,775
4,775
16,701
16,701
Gross value
Gross
31
Dec.value
2009
In thousand EUR
In thousand
EUR
Impairment
Impairment
31
Dec. 2009
31 Dec. 2009
5
5
1,382
1,382
2,071
2,071
2,583
2,583
18,008
18,008
24,049
24,049
In thousand EUR
In thousand
EUR
Impairment
31 Dec.
2009
24,110
Impairment
31
Dec. 2009
31 Dec. 2009-
4,746
30,184
30,184
4,255
4,613
4,613
24,110
453
453
619
619
256
256
4,746
Classification of Customers to Risk Grades according to the Chances of their Insolvency
Share of
Share of
Share of
receivables
partners
receivables
Share of
Share
of
Share of
receivables
partners
receivables
Classification grade
31 Dec. 2010
31 Dec. 2010
31 Dec. 2009
Classification
grade
31
Dec.
2010
31
Dec.
2010
31 Dec. 2009
Above average risk
17%
22%
46%
Above
average
risk
17%
22%
46%
Average risk
72%
49%
42%
Average
risk risk
72%
49%
42%
Below average
11%
29%
11%
Below
11%
29%
11%
Total average risk
100%
100%
100%
Total
100%
100%
100%
8181
90
90
187
187
4,255
Share of
partners
Share
of
partners
31 Dec. 2009
31 Dec. 2009
24%
24%
42%
42%
34%
34%
100%
100%
In thousand EUR
2,782
12,291
More than a year overdue
Total
2,320
9,464
619
256
90
187
4,775
4,775
4,746
4,255
Full write-off
30,838
16,701
30,184
4,613
Classification grade
Above average risk
Average risk
Below average risk
Total
Share of
receivables
Share of
partners
Share of
receivables
Share of
partners
31 Dec. 2010
17%
72%
11%
100%
31 Dec. 2010
22%
49%
29%
100%
31 Dec. 2009
46%
42%
11%
100%
31 Dec. 2009
24%
42%
34%
100%
classificationinto
into grades
grades isisbased
on on
the the
credit
rating.rating.
On 31 December
2010, the Group
32,189
thousand
TheThe
classification
based
credit
On 31 December
2010,had
theEUR
Group
had
EUR
worth
of
secured
receivables.
In
2011,
Merkur,
d.
d.,
and
Mersteel,
d.
o.
o.,
concluded
an
agreement
on
securing
32,189 thousand worth of secured receivables. In 2011, Merkur, d. d., and Mersteel, d. o. o., concluded
receivables aton
ansecuring
insurance receivables
company, further
limiting
the exposure
to credit
risk. limiting the exposure to credit
an agreement
at an
insurance
company,
further
risk.
Allowances for Doubtful Debts
Allowances for Doubtful Debts
Allowances
Allowances for
for Doubtful
Doubtful Debts
Debts Due to the Impairment of Trade Receivables of Merkur Group in 2010 and
2009
Allowances
for Doubtful
Debts
toImpairment
the Impairment
of Trade
Receivables
of Merkur
Group
in 2010
Allowances
for Doubtful
Debts
Due Due
to the
of Trade
Receivables
of Merkur
Group
in 2010
and and
In thousand EUR
20092009
2010
In thousand 2009
EUR
Item
Full
write-off
Balance
on 1 January
Value
impairment during the year*
Full write-off
Reversal
of impairment
Value impairment
during the year*
2010
26,883
-2,054
26,883
33,391
-2,054
-4,331
33,391
2009
24,403
-3,541
24,403
8,100
-3,541
-2,079
8,100
53,889
26,883
Item
Balance
31 December
Reversal on
of impairment
88
92
53,889
-4,331
26,883
-2,079
*Value impairments apply to trade receivables from the sales of goods and services in the amount of
impairments
apply to(2009:
trade receivables
the sales
of goods andand
services
in the interest
amount of EUR
29,326 thousand
7,766 thousand)
and
EUR*Value
29,326
thousand
EURfrom
7,766
thousand)
from
receivables
in(2009:
the EUR
amount
of EUR
*Value
impairments
to trade
receivables
from
the
sales of goods and services in the amount of
from interest
receivables inapply
the amount
of EUR 4,065
thousand (2009:
EUR 334
thousand).
4,065 thousand (2009: EUR 334 thousand).
EUR 29,326 thousand (2009: EUR 7,766 thousand) and from interest receivables in the amount of EUR
4,065 thousand (2009: EUR 334 thousand).
Allowances for Doubtful Debts Due to the Impairment of Loans Given by Merkur Group in 2010 and
Allowances
2009 for Doubtful Debts Due to the Impairment of Loans Given by Merkur Group in 2010 and 2009
In thousand
Allowances for Doubtful Debts Due to the Impairment of Loans Given by Merkur Group in 2010
and 2009 EUR
2010
In thousand 2009
EUR
Balance
on 1 January
Item
Full
write-off
Impairment
Full write-offduring the year
129,228
2010
-5
129,228
70,399
-5
2,834
2009
-11
2,834
126,405
-11
199,622
129,228
Item
Balance
onduring
31 December
Impairment
the year
199,622
70,399
129,228
126,405
Insolvency Risk
Insolvency Risk
The following section provides the stipulated due dates of financial assets and liabilities, including the
estimated interest payments and excluding the effects of offset agreements.
The following section provides the stipulated due dates of financial assets and liabilities, including the
estimated
interest payments and excluding the effects of offset agreements.
Stipulated Due Dates of Non-Derivative Financial Assets and Liabilities of Merkur Group in 2010
Item
Non-derivative
financial assets
Item
Financial investments, deposits
Non-derivative
and collaterals financial assets
Loans
given
and collaterals
Receivables
Loans given from finance lease
Trade
receivables
Receivables
from finance lease
Receivables
due from others
Trade receivables
Cash
and
cash
Receivables dueequivalents
from others
Total non-derivative financial
assets
Non-derivative
financial liabilities
assets
Secured loans
In thousand EUR
More
In thousand
EUR
2–5
than
5
More
years
years
2–5
than 5
years
years
Book
value
Book
value
Stipulated
cash flows
Stipulated
cash flows
6 months
or less
6 months
or less
6–12
months
6–12
months
1–2
years
1–2
years
132,044
12,772
132,044
42
12,772
28,277
42
14,137
28,277
11,592
14,137
132,044
13,264
132,044
43
13,264
28,277
43
14,137
28,277
11,592
14,137
21,700
7,008
21,700
30
7,008
28,277
30
13,842
28,277
11,592
13,842
5,935
447
5,935
13
447
13---
57,895
383
57,895
3830295
0
295-
2,602
5,020
2,602
5,020----
43,913
406
43,913
406----
11,592
198,863
11,592
199,357
11,592
82,449
6,395
58,572
7,622
44,319
198,863
-486,336
199,357
-573,094
82,449
-110,979
6,395 58,572
-33,043 -19,179
7,622
44,319
-78,754 -331,139
-5
70,399
-11
126,405
199,622
129,228
Insolvency
Insolvency
RiskRisk
The following section provides the stipulated due dates of financial assets and liabilities, including the estimated
The following
section and
provides
the the
stipulated
dates
of financial assets and liabilities, including the
interest payments
excluding
effects ofdue
offset
agreements.
estimated interest payments and excluding the effects of offset agreements.
Item
Non-derivative financial assets
and collaterals
Loans given
Trade receivables
Receivables due from others
assets
Non-derivative financial liabilities
Secured loans
Other loans
Bank overdraft
Liabilities under finance lease
Trade liabilities
Other payables
Provisions
liabilities
Net balance on 31 December
2010
Bridging the Liquidity Gap
In thousand EUR
More
2–5
than 5
years
years
Book
value
Stipulated
cash flows
6 months
or less
6–12
months
1–2
years
132,044
12,772
42
28,277
14,137
11,592
132,044
13,264
43
28,277
14,137
11,592
21,700
7,008
30
28,277
13,842
11,592
5,935
447
13
-
57,895
383
0
295
-
2,602
5,020
-
43,913
406
-
198,863
199,357
82,449
6,395
58,572
7,622
44,319
-486,336
-1,887
-4,780
-146,372
-141,288
-36,988
-35,461
-573,094
-1,887
-4,829
-192,299
-141,288
-36,988
-35,461
-110,979
-1,821
-4,372
-4,617
-43,745
-27,786
-503
-33,043 -19,179
-66
-91
-91
-4,598 -9,204
-16,483 -16,483
-1,619 -1,619
-6,098 -17,234
-78,754 -331,139
-274
-39,675 -134,205
-58,526
-6,050
-5,521
-442
-7,436
-4,190
-853,113
-985,845
-193,823
-61,998 -63,811
-190,186 -476,027
-654,250
-786,488
-111,374
-55,603
-182,564 -431,708
-5,239
93
In line with the Financial Restructuring Plan we will bridge the established liquidity gap by means of converting the
liabilities into capital, discounts on common liabilities, reprogramming the existing secured loans, selling property
and shares, received dividends and payments from guarantors, and new loans. The results of the abovementioned
actions are illustrated in the table below:
In line with the Financial Restructuring Plan we will bridge the established liquidity gap by means of
converting
intoRestructuring
capital, discounts
liabilities,
reprogramming
thegap
existing
secured
In
line withthe
theliabilities
Financial
Plan on
we common
will bridge
the established
liquidity
by means
of
loans,
selling
received dividends
andliabilities,
payments
from guarantors,
and newsecured
loans.
converting
theproperty
liabilitiesand
into shares,
capital, discounts
on common
reprogramming
the existing
The
results
of property
the abovementioned
aredividends
illustratedand
in the
table below:
loans,
selling
and shares,actions
received
payments
from guarantors, and new loans.
The results of the abovementioned actions are illustrated in the table below:
Property
sale assets (the
Sale of financial
shares
of
Sava and
Sale of financial
assets (the
Gorenjska
banka)
shares
of Sava
and
Gorenjska
banka)
Guarantor payment
90
6 months
or less
6 months
or less
-
6–12
months
6–12
months
10,339
10,339
97,608
97,608
15,591
1–2
years
1–2
years
10,339
10,339
27,203-
-
15,591
27,203
4,000
-
95,511
95,511
6,920
95,511
95,511
6,920
21,700
21,700
5,420
5,935
5,935
300
57,895
57,895
1,200
9,982
9,982-
-
Guarantor
New loan inpayment
line with the
Financial
New
loan Restructuring
in line with theplan
Financial Restructuring
plan
Dividends
from Gorenjska
banka andfrom
Big Bang
Dividends
Gorenjska
banka and Big Bang
Factoring line
Factoring
line
The outcome
6,920
89,000
89,000
16,442
16,442
7,500
7,500
-222,271
6,920
89,000
89,000
16,442
16,442
7,500
7,500
-354,510
5,420
3,000
3,000
2,442
2,442
7,500
7,500
-71,312
300
2,000
2,000
2,500
2,500
78,669-
1,200
7,000
7,000
2,500
2,500
100,898-
51,000
51,000
9,000
9,000
-65,261-
26,000
26,000
-397,504-
The outcome
-222,271
-354,510
-71,312
78,669
100,898
-65,261
-397,504
Stipulated
Due Dates
of Merkur
Group’s
Derivative
Financial
Liabilities
in and
20092010
and 2010
Stipulated
Due Dates
of Merkur
Group’s
Derivative
Financial
Liabilities
in 2009
In thousand EUR
Item
Derivative financial liabilities
Stipulated cash
Book value flows 2–5 years
Interest rate swaps used for hedging
Total on 31 December 2010
0
0
Derivative financial liabilities
3,513
3,513
Total on 31 December 2009
3,513
3,513
Stipulated
Due Dates
of Non-Derivative
Financial
Assets
and Liabilities
of Merkur
in 2009
Stipulated
Due Dates
of Non-Derivative
Financial
Assets
and Liabilities
of Merkur
GroupGroup
in 2009
In thousand EUR
In thousandMore
EUR
Book Stipulated
6 months
6–12
1–2
2–5
than
5
More
Item
value
flows
or less
months
years
years
years
Book cash
Stipulated
6 months
6–12
1–2
2–5
than
5
Item
value cash flows
or less
months
years
years
years
Non-derivative financial assets
Financial investments,
deposits
Non-derivative
financial
assets
and collaterals
189,143
189,143
9,382
1 176,509
3,252
Financial
investments, deposits
and
collaterals
189,143
189,143
9,382
1 176,509
3,252
Loans
given
43,708
44,252
38,781
4944,018
561
397
Loans
given from finance lease
43,708
44,252
38,781
494
4,018
561397Receivables
442
445
209
122
114
Receivables
from finance lease
442
445
209
122114Trade
receivables
148,010
148,010
148,010
Trade receivables
148,010
148,010
148,010
Receivables
due from others
25,571
25,571
25,571
Receivables
due
from
others
25,571
25,571
25,571
2,679
2,647
2,647
Cash and
cash equivalents
2,679
2,647
2,647
Total
non-derivative
financial
assets
409,554
410,069
224,601
616
4,133 177,070
3,649
assets
409,554
410,069
224,601
616
4,133 177,070
3,649
Non-derivative financial liabilities
Non-derivative
Secured loans financial liabilities
Secured
loans
Other
loans
Other
loans
Bank overdraft
Bank
overdraft
Liabilities
under finance lease
Liabilities
under finance lease
Trade
liabilities
-513,295
-513,295
-3,133
-3,133
-2,216
-2,216
-150,250
-150,250
-236,494
-524,406
-524,406
-3,171
-3,171
-2,216
-2,216
-200,206
-200,206
-236,494
-288,394
-288,394
-2,517
-2,517
-2,216
-2,216
-1,743
-1,743
-232,761
Trade
liabilities
Other payables
Other
payables
Provisions
Provisions
liabilities
liabilities
2009
2009
-236,494
-39,384
-39,384
-10,908
-10,908
-955,680
-955,680
-546,126
-546,126
-236,494
-39,384
-39,384
-10,908
-10,908
-1,016,785
-1,016,785
-606,716
-606,716
-232,761
-39,384
-39,384
-324
-324
-567,338
-567,338
-342,737
-342,737
-64,524 -75,897 -89,558
-6,033
-64,524
-6,033-654 -75,897- -89,558-654-1,865-9,118- -45,605- -141,875-1,865-9,118- -45,605
-3,733 -141,875-3,733-2,748-2,351-996-4,490-2,748
-2,351
-996-4,490
-69,791 -87,367 139,892- -152,397
-69,791 -87,367 139,892 -152,397
-69,175 -83,233 37,178 -148,749
-69,175 -83,233 37,178 -148,749
94
94
95
Bridging the liquidity gap:
Bridging
the liquidity
Discount (40%
write-offgap:
of
common
liabilities)
Discount (40% write-off of
common
liabilities)
Capital injection
(conversion
of liabilities
into shares)
Capital
injection
(conversion
of liabilities
into shares)
Property
sale
Book Stipulated
value
flows
Book cash
Stipulated
value cash flows
72,203
72,203
72,203
72,203
97,608
97,608
97,608
97,608
46,794
46,794
46,794
46,794
In thousand EUR
In thousand EUR
More
2–5
than
5
More
years
years
2–5
than
5
years
years
43,322
8,204
43,322
8,204
4,000-
Currency Risk
Currency Risk
Currency Risk
Currency Risk Exposure ofCurrency
Merkur Group
Risk Exposure
in Nominal
ofValues,
Merkur in
Group
2010in Nominal Values, in 2010
Currency Risk Exposure of Merkur Group in Nominal Values, in 2010
Item
Item
EUR
HRK
EUR BAM
HRKRSD
BAMMKD
Receivables and liabilities Receivables
on 31 December
and 2010
liabilities on 31 December 2010
Trade receivables
Trade receivables
21,589
19,149
21,5893,779
19,149
151,702
3,779
32,905
-2,000 -468,073-5,050
-2,000
-13,908
-5,050
-49,948
-60,169 -123,705-3,341
-60,169
-602,100
-3,341
-24,500
-43,020 -570,189-4,613
-43,020
-464,305
-4,613
-41,544
Secured loans from banks Secured loans from banks
-468,073
Trade liabilities
Trade liabilities
-123,705
Balance sheet currency exposure
Balance sheet currency-570,189
exposure
Currency Risk Exposure ofCurrency
Merkur Group
Risk Exposure
in Nominal
ofValues,
Merkur in
Group
2009in Nominal Values, in 2009
Currency Risk Exposure of Merkur Group in Nominal Values, in 2009
Item
Item
EUR
HRK
EURBAM
HRK
RSD
BAM
MKD
Receivables and liabilities Receivables
on 31 December
and 2009
liabilities on 31 December 2009
Trade receivables
125,622
83,905
125,622
16,448
83,905
385,085
16,448
65,325
Secured loans from banks Secured loans from banks
-474,735
-
-474,735
-6,325
-196,542
-
-6,325
-43,459
-116,093
-206,360
-4,914
-116,093
-857,208
-4,914
-52,085
-32,187
-555,473
5,209
-32,187
-668,665
5,209
-30,218
Trade liabilities
Trade receivables
Trade liabilities
-206,360
Balance sheet currency exposure
Balance sheet currency
-555,473
exposure
92
Sensitivity Analysis
In thousand EUR
31 December 2010
1,748
-28
-836
-256
332
20
303
-
31 December 2009
965
-197
808
-556
337
2
14
712
-
1,282
2,084
A 10 percent weakening of the euro against the above currencies on 31 December 2010 would have had
A 10 percent
weakening
of theoneuro
against
the above
currencies
on shown
31 December
2010
have had an equal
an equal
but opposite
effect
profit
or loss
by the
amounts
above,
onwould
the assumption
that all
but
opposite
effect
on
profit
or
loss
by
the
amounts
shown
above,
on
the
assumption
that
all
other
variables remain
other variables remain unchanged.
unchanged.
Interest Rate Risk
Characteristics of Interest Rates Applied to Merkur Group’s Financial Instruments
In thousand EUR
Book value
Item
Fixed rate instruments
Financial assets
Financial liabilities
USD
CZK
RUB
CZK
A 10 percent strengthening of the euro against the following currencies on 31 December 2010 would have
increased
(decreased)
the profit
shown below. This analysis assumes that all other
151,702
7
32,905
8,558
7 or loss by-the amounts
8,558
variables, in particular interest rates, remain unchanged. The analysis is performed on the same basis for
-13,908 -49,948
- 2009.
-602,100
-332
-9,123
-24,500
-31,693
-332
-9,123
-464,305
-325
-9,123
-41,544
-23,135
-325
-9,123
Item
HRK
BAM
RSD
In thousands
MKD
USD
USD
RSD CHFCHF MKD RUB
USD
CHF
CZK
RUB
RUB
385,085
87 GBP -65,325 8,335 87
13,750
8,335
CZK
-196,542
-43,459
- -CAD
-857,208
-477
-32
-52,085 -9,132-477
-63,986
-32
-9,132
Total effect on profit or loss
-668,665
-389
-32
-30,218 -798-389
-50,237
-32
-798
-31,693
In thousand EUR
-23,135
In thousands
CZK
13,750
-63,986
-50,237
31 December 2010
1,748
-28
-836
-256
332
20
303
-
31 December 2009
965
-197
808
-556
337
2
14
712
-
1,282
2,084
Interest Rate Risk
A 10Apercent
strengthening
againstthe
the
following
currencies
31 December
2010
would
have
10 percent
strengtheningofofthe
the euro
euro against
following
currencies
on 31on
December
2010 would
have
increased
increased
(decreased)
profit
or loss
by the
amounts
below.
This analysis
assumes
that
all other
(decreased)
the profit the
or loss
by the
amounts
shown
below.shown
This analysis
assumes
that all other
variables,
in particular
variables,
particular
interest rates,
The
isfor
performed
on the same basis for
interestinrates,
remain unchanged.
The remain
analysis isunchanged.
performed on
theanalysis
same basis
2009.
2009.
Total effect on profit or loss
RUB
MKD
A 10 percent weakening of the euro against the above currencies on 31 December 2010 would have had
an equal but opposite effect on profit or loss by the amounts shown above, on the assumption that all
other variables remain unchanged.
Item
HRK
BAM
RSD
MKD
USD
CHF
RUB
GBP
CZK
CAD
RSD
USD
In thousands
2010
2009
-140,438
-131,847
11,638
39,804
-152,076
-171,651
Interest Rate Risk
In thousand EUR
Book value
Item
Fixed rate instruments
Financial assets
96
96
2010
2009
-140,438
-131,847
11,638
39,804
-152,076
-171,651
Floating rate instruments
-339,793
-343,089
Financial assets
1,134
-340,927
3,904
-346,993
Fair Value Sensitivity Analysis for Fixed Rate Instruments
The Fair
Group
does
not account
for anyfor
fixed
rate
financial
assets at fair value through profit or loss, therefore
Value
Sensitivity
Analysis
Fixed
Rate
Instruments
a change in interest rates on the reporting date would not affect the profit or loss.
The Group does not account for any fixed rate financial assets at fair value through profit or loss, therefore a change in
interest
on the reporting
datefor
would
not affect
theInstruments
profit or loss.
Cash
Flowrates
Sensitivity
Analysis
Floating
Rate
A change of 100 basis points in interest rates on the reporting date would have increased (decreased)
equity and profit or loss by the amounts shown below. The analysis assumes that all other variables, in
particular
the foreign
currency
rates,for
remain
unchanged.
The analysis is performed on the same basis for
Cash Flow
Sensitivity
Analysis
Floating
Rate Instruments
2009.
A change of 100 basis points in interest rates on the reporting date would have increased (decreased) equity and
profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular the foreign
currency rates, remain unchanged. The analysis is performed on the same basis for 2009.
In thousands
Effect on profit or loss
+100 b. p.
-100EUR
b. p.
In thousand
Effect on profit or loss
Floating rate instruments on 31 December 2010
+100 b. p.
-3,985
-100 b. p.
3,985
Interest rate swap
Cash flow sensitivity (net)
Interest rate swap
-3,985
-3,985
-
3,985
3,985
-
-3,985
-4,052
3,985
4,052
Interest rate swap
Interest rate swap
600
-4,052
-3,452
600
-600
4,052
3,452
-600
Fair Value
-3,452
3,452
Fair Value
Fair Value
Item
94
Shares and stakes available for sale
Item
Loans given
Loans given
Trade receivables
Trade receivables
Secured loans
Other loans taken
Secured loans
Bank overdraft
Other loans taken
Liabilities from financial lease
Bank overdraft
Trade liabilities
Liabilities from financial lease
Other payables
Trade liabilities
Other payables
In thousand EUR
Book
Fair
value
value
Book
Fair
31 December 31 December
value
value
2010
2010
128,650
128,650
2010
2010
3,393
3,393
128,650
128,650
12,772
10,755
3,393
3,393
42
42
12,772
10,755
28,277
28,277
42
42
14,137
14,137
28,277
28,277
11,592
11,592
14,137
14,137
-486,336
-380,596
11,592
11,592
-1,887
-1,887
-486,336
-380,596
-2,432
-2,432
-1,887
-1,887
-146,372
-146,372
-2,432
-2,432
-141,288
-141,288
-146,372
-146,372
-36,988
-36,988
-141,288
-141,288
-36,988
-36,988
Book
Fair
In thousand EUR
value
value
Book
Fair
value
value
2009
2009
172,999
183,155
2009
2009
16,145
14,709
172,999
183,155
43,708
43,150
16,145
14,709
442
445
43,708
43,150
148,010
148,152
442
445
25,571
25,571
148,010
148,152
2,679
2,679
25,571
25,571
-513,295
-497,046
2,679
2,679
-3,133
-3,171
-513,295
-497,046
-2,216
-2,216
-3,133
-3,171
-150,250
-150,250
-2,216
-2,216
-236,494
-236,494
-150,250
-150,250
-39,384
-39,384
-236,494
-236,494
-3,513
-3,513
-39,384
-39,384
Interest
rate swaps
usedstock
for hedging
- fair value of - financial assets.
-3,513 If a financial
-3,513
The
Group
uses the
market prices as a basis for the
instrument is not listed on a regulated market or a market is deemed inactive, the Group uses a model for
The
Groupthe
uses
stock
market
prices
as aThe
basis
forShares
the fairand
value
of financial
a financial
assessing
fairthe
value
of the
financial
asset.
item
stakes
availableassets.
for saleIfincludes
the
instrument
is
not
listed
on
a
regulated
market
or
a
market
is
deemed
inactive,
the
Group
uses
a
model for
shares
Perutnina
valuated
with
price ofmodel
reason
for such
valuation
The of
Group
uses the Ptuj,
stock market
prices
as athe
basispurchase
for the fair value
financial(the
assets.
If a financial
instrument
is notis
assessing
the
fair 4.6).
valueThe
of the
financial
asset.
Thewas
itemalso
Shares
and
stakes
available
for sale
includes
the
explained
in aitem
purchase
price
model
foruses
valuation
small
number
stakes
listed on
regulated
market
or a market
is deemed
inactive,
theused
Group
a modelofforaassessing
the fair of
value
of
shares
of Perutnina
Ptuj, for
valuated
with the purchase
price
model (the
reasonvaluating
for such these
valuation
is
with the
a value
insignificant
fair
presentation
of
financial
statements,
because
stakes
financial asset. The item Shares and stakes available for sale includes the shares of Perutnina Ptuj, valuated with
explained
in
item
4.6).
The
purchase
price
model
was
also
used
for
valuation
of
a
small
number
of
stakes
would not
be economically
viable.
purchase
price modelfor
(thefair
reason
for such valuation
is explained
in item 4.6).
The purchase
price these
model was
also
with the
a value
insignificant
presentation
of financial
statements,
because
valuating
stakes
used
for
valuation
of
a
small
number
of
stakes
with
a
value
insignificant
for
fair
presentation
of
financial
statements,
would
not be
economically
Hierarchy
in Setting
Fairviable.
Value of Financial Assets on 31 December 2010
because
valuatingthe
these
stakes
would not be economically viable.
Hierarchy in Setting the Fair Value of Financial Assets on 31 December 2010
Item
Level 1
Level 2
Item
2,643
Level
1
Level 2-
Shares andinstakes
available
sale of Financial Assets on2,643
Hierarchy
Setting
the FairforValue
31 December 2009 Hierarchy in Setting the Fair Value of Financial Assets on 31 December 2009
In thousand EUR
LevelIn
3 thousand Total
EUR
126,007
128,650
Level 3
Total
126,007
128,650
In thousand EUR
Item
Level 1
Level 2
LevelIn
3 thousand Total
EUR
Item
45,709
Level
1
86,178
Level
2
51,268
Level
3
183,155
Total
Interestand
ratestakes
swapsavailable
used for for
hedging
Shares
sale
45,709-
3,513
86,178
51,268-
3,513
183,155
-
3,513
-
3,513
98
98
Item
Level 1
Level 2
Item
2,643
Level 1
Level 2
Hierarchy
instakes
Settingavailable
the Fairfor
Value
31 December 2009 Shares and
sale of Financial Assets on 2,643
Hierarchy
in Setting
theValue
Fair Value
of Financial
Assets
31 December
Hierarchy
in Setting
the Fair
of Financial
Assets
on 31on
December
2009 2009
Item
Level 1
Level 2
Shares
Item and stakes available for sale
45,709
Level
1
45,709
86,178
Level
2
3,513
86,178
In thousand EUR
Level 3
Total
In thousand EUR
126,007
128,650
Level 3
Total
126,007
128,650
In thousand EUR
Level In
3 thousandTotal
EUR
51,268
Level
3
51,268
183,155
Total
3,513
183,155
In thousand EUR
The
Groupthe
uses
stock
market
prices
as aThe
basis
the fair
value
of financial
a financial
assessing
fairthe
value
of the
financial
asset.
itemfor
Shares
and
stakes
available assets.
for sale Ifincludes
the
instrument
is not listedPtuj,
on avaluated
regulatedwith
market
a marketprice
is deemed
the Group
uses valuation
a model for
shares of Perutnina
the or
purchase
modelinactive,
(the reason
for such
is
assessing
theitem
fair4.6).
valueThe
of the
financial
asset.
Thewas
itemalso
Shares
stakes available
for number
sale includes
the
explained in
purchase
price
model
usedand
for valuation
of a small
of stakes
shares
of Perutnina
Ptuj, for
valuated
with the purchase
price
model (the
reasonvaluating
for suchthese
valuation
is
with a value
insignificant
fair presentation
of financial
statements,
because
stakes
explained
4.6). The viable.
purchase price model was also used for valuation of a small number of stakes
would not in
beitem
economically
with a value insignificant for fair presentation of financial statements, because valuating these stakes
would not in
beSetting
economically
Hierarchy
the Fairviable.
Value of Financial Assets on 31 December 2010
5.24for Contingent
Liabilities and Receivables
Interest rate swaps used
hedging
3,513
3,513
5.24 Contingent Liabilities and Receivables
5.24 Contingent Liabilities and Receivables
International Accounting Standard 37 says that provisions should be made for contingent liabilities in the
financial
statements
the provisions
period when
it becomes
that an
outflowinofthe
resources
embodying
98
International Accounting
Standard
37 saysinthat
should
be madeprobable
for contingent
liabilities
5.24 Contingent
Liabilities
and
Receivables
economic
benefits
will
be
required
to
settle
the
obligation.
In
line
with
this,
the
Group
recognized
in 2010
financial
statements
in theStandard
period when
it becomes
probable
that be
anmade
outflow
resources
embodying
International
Accounting
37 says
that provisions
should
for of
contingent
liabilities
in the
98
provisions
for
guarantees
and
mortgages
in
the
amount
of
EUR
23,231
thousand
for
liabilities
of
International
Accounting
Standard
says that
provisions
should
be with
made
for outflow
contingent
in theembodying
financial
economic
benefits
will be
required
settle
obligation.
In line
the Group
recognized
in 2010
financial
statements
in the
periodto37
when
itthe
becomes
probable
that this,
an
ofliabilities
resources
companies
outside
Merkur
Group
that
are
in
compulsory
settlement
(Alpos
d.
d.)
or
bankruptcy
provisions
for
guarantees
and
in
amount
EUR
23,231
thousand
for liabilities
of
statements
in thewill
period
whenmortgages
it becomes
that
an outflow
ofwith
resources
embodying
economic
benefits
economic
benefits
be required
to settleprobable
thethe
obligation.
Inofline
this, the
Group recognized
in 2010
proceedings
(HTC
o.amount
andGroup
Merfin
d. o. 23,231
o.).
The
difference
between
contingent
companies
Merkur
Group
thatDVA,
in o.
compulsory
settlement
d.
d.) for
or
bankruptcy
provisions
for guarantees
and
mortgages
in
the
of
EUR
thousand
forguarantees
liabilities maximum
of
will be outside
required
to
settle the
obligation.
Inare
line d.
with
this,
the
recognized
in(Alpos
2010
provisions
liabilities
for
the
given
guarantees
and
the
provisions
for
the
given
guarantees
was
recognized
in the offproceedings
(HTC
DVA,
d.
o.
o.
and
Merfin
d.
o.
o.).
The
difference
between
maximum
contingent
companies
outsidein the
Merkur
Group
in compulsory
settlement
(Alpos Merkur
d. d.)Group
or bankruptcy
and mortgages
amount
of EURthat
23,231are
thousand
for liabilities of
companies outside
that are in
balance
sheet.
liabilities
for
the
given
guarantees
and
the
provisions
for
the
given
guarantees
was
recognized
in
the
offproceedings
(HTC
DVA,
d.
o.
o.
and
Merfin
d.
o.
o.).
The
difference
between
maximum
contingent
compulsory settlement (Alpos d. d.) or bankruptcy proceedings (HTC DVA, d. o. o. and Merfin d. o. o.). The difference
balance
sheet.
liabilities
for the
given contingent
guarantees
and the
for the given
guarantees
was
in thewas
offbetween
maximum
liabilities
forprovisions
the given guarantees
and the
provisions for
therecognized
given guarantees
In thousand EUR
balance
sheet.
recognized in the off-balance sheet.
31 December
31 December
In thousand
EUR
2010
2009
31 December In 31
December
thousand EUR
Guarantees for others
26,909
Item – off-balance sheet
2010
200910,068
31 December
31 December
Item
–
off-balance
sheet
2010
2009
Total
10,068
26,909
10,068
26,909
10,068
26,909
Total
10,068
26,909
Total
10,068
26,909
Guarantees and Mortgages of Merkur Group Recognized in the Balance and Off-Balance Sheets on 31 Decembe
2010
Guarantees and Mortgages of Merkur Group Recognized in the Balance and Off-Balance Sheets on 31 December
2010
Guarantees
and and
Mortgages
of Merkur
Group
Recognized
in theinBalance
and Off-Balance
Sheets
on 31
Guarantees
Mortgages
of Merkur
Group
Recognized
the Balance
and Off-Balance
Sheets
onDecember
31
In thousand EUR
2010December 2010
Guarantee/mortgage
Maximum
possible
In thousand EUR
recognized in
Guarantee/mortgage recepient
Recognized provision
liability
Guarantee/mortgage
Maximum
possible
In thousand EUR
Balance
sheet
HTC Dva, d. o. o., Ljubljana
11,631
11,631
recognized
in
Guarantee/mortgage
recepient
Recognized provision
Guarantee/mortgage
Maximumliability
possible
recognized
in
Guarantee/mortgage
recepient
Recognized
provision
liability
Merfin,
d.
o.
o.,
Ljubljana
11,000
11,000
Balance sheet
HTC Dva, d. o. o., Ljubljana
11,631
11,631
Item – off-balance sheet
Balance sheet
Off-balance sheet
Off-balance sheet
Alpos, d. d., Šentjur
HTC Dva,
o., Ljubljana
Merfin,
d. o. d.
o.,o.
Ljubljana
Merfin,
d. o.
o., Ljubljana
Total
Alpos,
d. d.,
Šentjur
Alpos,
d.
d.,
Šentjur
Off-balance
Merfin, d. o. o., Ljubljana
Total sheet
Total d. o. o., Ljubljana
Total
Merfin,
Total
11,631
11,000
11,000
600
600
23,231
23,231
0
00
600
11,631
11,000
11,000
23,231
600
0600
23,231
23,231
0
10,068
10,068
10,068
600
23,231
10,068
10,068
Total
0
10,068
Guarantees Given by Merkur Group Recognized in the Off-Balance Sheet on 31 December
2009
Guarantees
Given Given
by Merkur
GroupGroup
Recognized
in the in
Off-Balance
Sheet Sheet
on 31 on
December
Guarantees
by Merkur
Recognized
the Off-Balance
31 December 2009
2009
Guarantees Given by Merkur Group Recognized in the Off-Balance Sheet on 31 December
In thousand EUR
2009
Off-balance sheet
Off-balance sheet
Off-balance sheet
Merfin,
d.
o.
o.,
Ljubljana
Alpos, d. d., Šentjur Total
Total
Total
In thousand EUR
In thousand
EUR
25,909
25,909
1,000
1,000
26,909
26,909
25,909
1,000
26,909
Provisions recognized in profit or loss in the amount of EUR 11,631 thousand were set aside for a loan
given
to HTC
DVA,
o., by of
Gorenjska
banka,
d.d., inwere
whichsetMersteel,
o., used mortgage on
Provisions recognized in profit
or loss
in d.
theo.amount
EUR 11,631
thousand
aside ford.a o.
loan
property
as
collateral.
Start
of
bankruptcy
proceedings
against
HTC
DVA,
d.
given
to HTCrecognized
DVA, d. o.in o.,
by or
Gorenjska
banka,
d.d.,
which
Mersteel,
d. o.were
o., used
mortgage
ono. o., Ljubljana was
Provisions
profit
loss in the
amount
of in
EUR
11,631
thousand
set aside
for a loan
announced
on
4
November
2010,
so
there
is
a
possibility
that
the
bank
will
cash
in
the property to repay
property
collateral.
DVA,d.d.o.o.o.,o.,
Ljubljana
wason
given toasHTC
DVA, d.Start
o. o.,ofbybankruptcy
Gorenjska proceedings
banka, d.d., against
in which HTC
Mersteel,
used
mortgage
the
loan.
announced
on
4
November
2010,
so
there
is
a
possibility
that
the
bank
will
cash
in
the
property
to
repay
property as collateral. Start of bankruptcy proceedings against HTC DVA, d. o. o., Ljubljana was
the
loan.
announced
on 4 November 2010, so there is a possibility that the bank will cash in the property to repay
Provisions in the amount of EUR 11,000 thousand have also been set aside and recognized in profit or
the loan.
loss for
of Merfin,
d. o.have
o., Ljubljana,
which
Group
issued guarantees,
Provisions in the amount
of liabilities
EUR 11,000
thousand
also beenforset
asidethe
and
recognized
in profit or and in the amount
holders can use by the end of April 2011.
The Group generates rental income by renting out property and investment property, and partly by
The Groupparts
generates
rentalthat
income
by renting
property
and investment
property, sales
and partly
by
subleasing
of property
the Group
leasesout
through
operating
lease (for example,
centers
subleasing
parts ofbars,
property
that theand
Group
leases through operating lease (for example, sales centers
with
accompanying
restaurants
shops).
with accompanying bars, restaurants and shops).
Provisions in the amount of EUR 11,000 thousand have also been set aside and recognized in profit or loss for
liabilities of Merfin, d. o. o., Ljubljana, for which the Group issued guarantees, and in the amount of EUR 600 thousand
for liabilities of Alpos, d. d., Šentjur. The assumptions used in recognizing the provisions are described under 5.24
Contingent Liabilities and Receivables in the Accounting Report of Merkur, d. d.
Guarantees between companies in Merkur Group are intertwined, and some of the companies are in liquidation,
bankruptcy or compulsory settlement proceedings. More information on mutual guarantees is available in annual
reports of individual companies.
Merkur Group also has contingent receivables due from Merfin, d. o. o., arising from the claim for returning the
difference between the purchase and sales values of the property that Merfin realized as profit from sales in 2008 and
2009 when it was still the controlling company in the Group, namely:
• based on the agreement according to which Merfin is obliged to return the difference between the purchase and sales values of the property SC Primskovo in the amount of EUR 9,271 thousand with interest from the date of sale on 24 December 2008 to 31 October 2010 in the amount of EUR 781 thousand, and
• based on the agreement according to which Merfin is obliged to return the difference between the purchase and sales values of the stake in HTC DVA in the amount of EUR 8,500 thousand with interest from 23 December 2009 to 31 October 2010 in the amount of EUR 107 thousand.
Total receivables due from Merfin thus amount to EUR 18,659 thousand, but since the conditions for recognizing the
income according to IAS 18 are not met because it is not likely that the economical gains, related to this transaction,
will be realized, the receivables are only recognized in the off-balance sheet.
6
96
6
Additional
Information
on Merkur
Group’s
Revenue
by Regions
Additional
Information
on Merkur
Group’s
SalesSales
Revenue
by Regions
Additional Information on Merkur Group’s Sales Revenue by Regions
Item
Item
Revenue
from sales in the domestic market – Slovenia
Revenuefrom
fromsales
salesininforeign
the domestic
market – Slovenia
Revenue
markets
Revenue
from sales
in foreign
markets
Merkur
Group’s
Sales
Revenue
Merkur Group’s Sales Revenue
In thousand EUR
In thousand EUR
2010
2009
2010
2009
446,262
652,622
446,262
652,622
141,536
222,557
141,536
587,798
587,798
222,557
875,179
875,179
6.2 Other Operating Revenue
Other
Operating
Revenue
6.2 6.2
Other
Operating
Revenue
Merkur Group's Other Operating Revenue
Merkur Group’s Other Operating Revenue
Merkur Group's Other Operating Revenue
Item
Item operating revenue
Other
Other operating
revenue
Recovered
receivables
Recovered
receivables
Gains
on disposal
of property, plant and equipment
Gainsoperating
on disposal
of property, plant and equipment
Other
revenue
Other
operating
revenue
Gains from reversal of long-term provisions
Gainson
from
reversal
of long-termproperty
provisions
Gains
disposal
of investment
Gains
on
disposal
of
investment
property
Gains on revaluating investment property
Gains on
revaluating
investment
Income
from
government
grants property
Income from government grants
In thousand EUR
EUR
2010 In thousand2009
2010
2009
12,365
4,783
12,365
4,331
4,331
2,835
2,835
2,397
2,397
1,937
1,937
300
300
415
415
150
150
4,783
2,079
2,079
1,278
1,278
1,136
1,136
160
160
0
00
1300
130
Notes on the Profit and Loss Statement
Notes on the Profit and Loss Statement
6.3 6.3
Costs by
Nature
Costs
by Nature
6.1 Sales Revenue
6.1 Sales Revenue
Merkur
Group’s
Costs
by Nature
Merkur
Group’s
Costs
by Nature
In thousand EUR
Merkur
Group’s
Sales
Revenue
Merkur
Group’s
Sales
Revenue
Item
Prihodki od prodaje Merkur Group
Sales revenue by categories
Revenue from selling goods and products
Revenue from selling services
Rental income
In thousand EUR
2010
2009
587,798
576,924
7,894
2,981
875,179
863,169
10,306
1,704
Revenue from selling goods is reduced by discounts given to holders of Merkur's loyalty card. A total of
EURRevenue
2,191 from
thousand
(2009:is reduced
EUR 2,566
thousand)
discounts
were granted
in A2010
based
on the
selling goods
by discounts
givenof
to holders
of Merkur’s
loyalty card.
total of
EUR 2,191
purchases
made
card,
presents
1.3% inof2010
the based
total retail
in the
Merkur
thousand
(2009:with
EUR the
2,566loyalty
thousand)
of which
discounts
were granted
on thesales
purchases
made
with Division
the
that loyalty
year. card,
Deferred
recognized
in sales
the in
estimated
rewards
– EUR 280
which assets
presentswere
1.3% of
the total retail
the Merkuramount
Division of
thatredeemed
year. Deferred
assets were
thousand
– for
credits
issued
for the
purchases
made
in the
last quarter
2010,
which
loyalty
card
recognized
in the
estimated
amount
of redeemed
rewards
– EUR
280 thousand
– forof
credits
issued
for the
purchases
holders
uselast
byquarter
the end
of April
2011.
madecan
in the
of 2010,
which
loyalty card holders can use by the end of April 2011.
Groupgenerates
generates rental
income
by renting
out property
and investment
property, andproperty,
partly by subleasing
TheThe
Group
rental
income
by renting
out property
and investment
and partly by
parts of property
the Group
operating
lease (for
example, sales
with accompanying
bars,
subleasing
parts ofthat
property
thatleases
the through
Group leases
through
operating
leasecenters
(for example,
sales centers
and shops).
withrestaurants
accompanying
bars, restaurants and shops).
Item
Costs by nature
Cost of materials
Cost of services
Labor costs
- wages and salaries
- pension insurance
- other insurance
- other labor costs
Amortization and depreciation
Other operating costs
2010
157,821
7,981
49,326
76,631
50,830
5,625
4,277
15,899
18,740
687
4,457
2009
171,561
9,468
101
59,581
101
80,531
55,701
6,106
4,741
13,982
17,408
525
4,047
6.4 Other Operating Expenses
Merkur Group's Other Operating Exspenses
In thousand EUR
Additional Information on Merkur Group’s Sales Revenue by Regions
In thousand EUR
Item
2010
2009
Revenue from sales in the domestic market – Slovenia
446,262
652,622
Revenue from sales in foreign markets
141,536
222,557
Merkur Group’s Sales Revenue
587,798
875,179
6.2
Item
Impairments and write-offs of trade receivables
Write-offs of inventories to the realizable value
Expenses from revaluation of property
Write-offs and losses on disposal of property, plant and equipment
Impairment of investment properties
Impairment of long-term assets for sale
2010
50,204
29,326
7,351
5,195
3,649
3,038
1,086
345
213
2009
29,475
7,766
7,063
760
1,165
30
6,506
Provisions recognized in profit or loss in the amount of EUR 11,631 thousand were set aside for a loan given to HTC
DVA, d. o. o., by Gorenjska banka, d.d., in which Mersteel, d. o. o., used mortgage on property as collateral. Start of
bankruptcy proceedings against HTC DVA, d. o. o., Ljubljana was announced on 4 November 2010, so there is a
possibility that the bank will cash in the property to repay the loan.
15,899
18,740
18,740
687
687
4,457
4,457
13,982
17,408
17,408
525
525
4,047
4,047
Losses of associated companies
6.6
Merkur Group’s Other Operating Exspenses
In thousand
thousand EUR
EUR
In
2010
2010
50,204
50,204
29,326
29,326
7,351
7,351
5,195
5,195
3,649
3,649
3,038
3,038
1,086
1,086
345
345
213
213
---
2009
2009
29,475
29,475
7,766
7,766
7,063
7,063
760
760
-1,165
1,165
30
30
-6,506
6,506
6,141
6,141
45
45
6.5
Income
and
Net Financial
Income
and Expenses
6.5 6.5Net
Net Financial
Financial
Income
and Expenses
Expenses
Merkur Group’s
Financial Income
Merkur
Merkur Group’s
Group’s Financial
Financial Income
Income
Foreign
Foreign exchange
exchange gains
gains
Gains
on
Gains on disposal
disposal of
of financial
financial assets
assets
In thousand
thousand EUR
EUR
In
2010
2010
18,695
18,695
13,483
13,483
3,463
3,463
2009
2009
38,054
38,054
14,377
14,377
3,303
3,303
1,595
1,595
154
154
-20,374
20,374
Merkur
Group’s
Financial
Expenses
Merkur
Group’s
Financial
Expenses
In thousand EUR
Item
2010
Financial expenses
Impairment of loans given
Interest expenses
Impairment of available-for-sale financial assets
Elimination of derivative financial instruments
Impairment and write-off of interest receivables
Foreign exchange losses
Losses on disposal of financial assets
Other financial expenses
Losses of associated companies
6.6
132,537
70,399
38,521
10,619
4,308
4,065
2,993
1,280
353
Merkur Group’s Other Expenses
0
In thousand EUR
In thousand EUR
2010
2009
Item
Item
Other expenses
2010
23,727
2009-
Other expenses
23,727
-
Merkur Group's other expenses in 2010 include one-off expenses from provisions for given guarantees
Group’sinother
include
one-off
expenseswhich
from provisions
given guarantees
and Merkur
mortgages
the expenses
amount inof2010
EUR
23,231
thousand,
is was for
already
explainedand
under 5.24
Merkur
Group's
other
expenses
2010
includewhich
one-off
expenses
from provisions
given guarantees
mortgages
in the
amount
of EUR in
23,231
thousand,
is was
already explained
5.24for
Contingent
Liabilitiesof
Contingent
Liabilities
and Receivables,
and provisions
for lawsuits
againstunder
the Group
in the amount
and and
mortgages in and
the provisions
amount for
of EUR 23,231
thousand,
is was
already
explained under 5.24
against
the
Group
in which
the amount
of EUR
496 thousand.
EUR 496Receivables,
thousand. More
on this islawsuits
explained
in item
8.2. Lawsuits
against
Merkur
Group. More on this is
Contingent
Receivables,
andGroup.
provisions for lawsuits against the Group in the amount of
explainedLiabilities
in item 8.2.and
Lawsuits
against Merkur
EUR 496 thousand. More on this is explained in item 8.2. Lawsuits against Merkur Group.
6.7
Income Tax
6.7 6.7
IncomeIncome
Tax
Tax
Merkur Group's Income Tax
In thousand EUR
Item
In thousand 2009
EUR
2010
Current
tax expense – tax liability
Item
Deferredtax
taxexpense
expense––tax
taxliability
liability
Current
Eliminating
assets
and liabilities
Deferred taxdeferred
expensetax
– tax
liability
Total
tax
expense
in
the
profit
andliabilities
loss statement
Eliminating deferred tax assets and
50
2010
50-
1,1561,206
1,156
1,317
2009
597
1,317
Total tax expense in the profit and loss statement
1,206
1,915
5971,915-
The effective tax rate in Merkur Group in 2010 is nil, because the Group disclosed operating and tax
losses. The current tax expense from tax liabilities in 2010 amounted to EUR 50 thousand, while the effect
The effective tax rate in Merkur Group in 2010 is nil, because the Group disclosed operating and tax
of eliminating deferred tax assets and liabilities amounted to EUR 1,156 thousand.
losses.
current
tax inexpense
from in
tax2010
liabilities
in 2010
to EUR
50 thousand,
while the
The The
effective
tax rate
Merkur Group
is nil, because
theamounted
Group disclosed
operating
and tax losses.
The effect
of eliminating
deferred
tax tax
assets
and in
liabilities
amounted
to 50
EUR
1,156 while
thousand.
current
tax
expense
from
liabilities
2010
amounted
to
EUR
thousand,
the
effect
of
eliminating
deferred
The authorities can check the company's operations, which could result in additional tax liabilities, interest
tax
assets
and
liabilities
amounted
to
EUR
1,156
thousand.
for past liabilities, or fines related to income or other taxes and contributions anytime within five years from
The authorities can check the company's operations, which could result in additional tax liabilities, interest
the year
in which the check
tax should
be levied.
Tax inspection
was carried
out in controlling
companyforMerkur,
The authorities
the company’s
operations,
which
could
in additional
tax liabilities,
past
for past
liabilities, can
or fines related
to income
or other
taxes
andresult
contributions
anytime
withininterest
five years
from
d. d.,
for
years
2008
and
2009,
and
its
findings
are
disclosed
under
6.7
Income
Tax
in
theyear
Accounting
liabilities,
or finesthe
related
to income
other taxes
contributions
anytime out
within
years from
the
in
which
the year
in which
tax should
beorlevied.
Tax and
inspection
was carried
in five
controlling
company
Merkur,
report of Merkur, d. d. The Management Board is not familiar with any other circumstances that could
thefor
taxyears
should2008
be levied.
inspection
was
carried out
controllingunder
company
d. d.,
for years
and 2009,
d. d.,
and Tax
2009,
and its
findings
areindisclosed
6.7Merkur,
Income
Tax
in the2008
Accounting
present significant liabilities under this head for Merkur Group.
andofitsMerkur,
findings are
under 6.7 Income
Tax inisthe
Accounting
reportany
of Merkur,
d. The Management
report
d. disclosed
d. The Management
Board
not
familiar with
other d.
circumstances
that Board
could
present
liabilities
this head
forcould
Merkur
Group.
is notsignificant
familiar with
any otherunder
circumstances
that
present
significant liabilities under this head for Merkur Group.
102
390
In thousand EUR
Other expenses
390
2009
102
170,036
126,405
33,278
8,085
334
1,933
-
Other Expenses
Item
0
Other Expenses
Merkur
Group’s
Income
Merkur
Group's
Income
Tax Tax
98
334
1,933-390-
Merkur
Merkur Group's
Group's Other
Other Operating
Operating Exspenses
Exspenses
Item
Item
Financial
income
Financial income
Interest
income
Interest income
Dividend
Dividend income
income
4,065
1,280
2,993
353
1,280
0
353
Other
Expenses
6.6 6.6Other
Expenses
6.4
Other Operating Expenses
6.4
6.4 Other
Other Operating
Operating Expenses
Expenses
Item
Item
Other
Other operating
operating expenses
expenses
Impairments
Impairments and
and write-offs
write-offs of
of trade
trade receivables
receivables
Write-offs
of
inventories
to
the
Write-offs of inventories to the realizable
realizable value
value
Expenses from
from revaluation
revaluation of
of property
property
Expenses
Provisions
Provisions for
for taxes
taxes
Other
operating
expenses
Write-offs
Write-offs and
and losses
losses on
on disposal
disposal of
of property,
property, plant
plant and
and equipment
equipment
Impairment of
of investment
properties
Impairment
Impairment
Impairment of
of long-term
long-term assets
assets for
for sale
sale
Impairment
of
goodwill
Impairment of goodwill
Losses
Losses on
on disposal
disposal of
of investment
properties
Impairment and write-off of interest receivables
Losses
disposallosses
of financial assets
Foreign on
exchange
Other
financial
expenses
Losses on disposal of financial assets
Losses
of associated
companies
Other financial
expenses
2010
2009
23,727
-
Merkur Group's other expenses in 2010 include one-off expenses from provisions for given guarantees
103
103
- other labor costs
Amortization
Amortization and
and depreciation
depreciation
Long-term
provisions
Other
Other operating
operating costs
costs
Notes on the Other Comprehensive Income Statement
7
Notes on the
7 Other
Notes
Comprehensive
on the OtherIncome
Comprehensive
StatementIncome Statement
7.1
7.1
Notes
7.1in
in Merkur
Merkur
Notes Group’s
Group’s
on ItemsOther
Other
in Merkur
Comprehensive
Group’s Other
Income
Comprehensive
Statementfor
for
Income
2010 Statement for 2010
Notes on
on Items
Items
Comprehensive
Income
Statement
2010
In thousand EUR
TOTAL
TOTAL
Reserves Reserves
COMPREHENSIVE
COMPREHENSIVE
for the
for the
INCOME OF
TOTAL
OTHEROF
TOTAL OTHER
INCOME
fair value fair value
SHAREHOLDERS
COMPREHENSIVE
COMPREHENSIVE
SHAREHOLDERS
Reserves
of land
of
Reserves
OF THE
INCOME – NONTOTAL
OTHER
INCOME
– NONOF THE
and
financial
Translation
for interest
CONTROLLING
Translation
CONTROLLING
for interest
CONTROLLING
CONTROLLING COMPREHENSIVE
rate
buildings
swaps
assets
reserves
rate swaps COMPANY
reserves
INTEREST
COMPANY
INCOME
INTEREST
Reserves
for the
fair value
of land
and
buildings
Note
Reserves
for the
fair value
of
Retained
financial
earnings
assets
0
-198,621
0
00
0
0
0
-198,621 0
-198,621
-1
-198,622 -1
-198,622
-
7.1
718
-
718 -
-
-
-
718 -
718
-
718 -
718
Changes in the fair value of
Changes
available-for-sale
in the fair value of available-for-sale
financial assets
financial assets
7.2
-
7.2 -
-19,363-
--
-19,363
-
-
-19,363 -
-19,363
-
-19,363 -
-19,363
Elimination of derivative financial
Elimination
instruments
of derivative financial instruments
for cash flow hedging
7.3
-
7.3 -
-
3,513
-
-
-
3,513
3,513 -
3,513
-
3,513 -
3,513
Effect of eliminating deferred
Effect
tax of
assets
eliminating
and deferred tax assets and
liabilities
liabilities
7.4
9,213
7.4
4,255
9,213
-703
4,255
-
-703
12,765 -
12,765
-
12,765 -
12,765
Retained
Item
Item
Note
earnings
Net profit or loss for the Net
accounting
profit or loss for the accounting
period
period
-198,621
Changes in the fair value of
Changes
propertyin the fair value of property
7.1
100
In thousand EUR
TOTAL OTHER
COMPREHENSIVE
INCOME
Foreign
fromexchange differences from
translations related to foreign
translations
subsidiaries
related to foreign7.5
subsidiaries
-
7.5 -
-
--
-7,770
-
-
-7,770
-7,770
-7,770
-
-7,770 -
-7,770
Total other comprehensive
Total
income
other in
comprehensive
the
income in the
accounting period
accounting period
0
9,931
-15,108
0
9,931
2,811
-15,108
-7,770
2,811
-10,136
-7,770
-10,136
0
-10,136 0
-10,136
Total in
comprehensive
the
income in the
accounting period
accounting period
-198,621
9,931
-198,621
-15,108
9,931
2,811
-15,108
-7,770
2,811
-208,758
-7,770
-208,758
0
-208,758 0
-208,758
7.1
7.1
Item
7
Notes on Items7.1
in Merkur
Notes
Group’s
on Items
Other
in Merkur
Comprehensive
Group’s Other
Income
Comprehensive
Statement for Income
2009 Statement for 2009
Notes on Items in Merkur Group’s Other Comprehensive Income Statement for 2009
Item
Note
Reserves for
the fair value
Retained
of land and
earnings
buildings
Note
Net profitperiod
or loss for the accounting period -153,881
Changes in the fair value of property
Changes in the fair value of property7.1
-
Reserves
Reserves
Reserves
for the fair Reserves
forfor for the fair
fair value
value of
value of the interest
Retained
of land
and Translation
financial
financial
rate
earnings
assets
buildings
swaps
reserves
assets
In thousand EUR
TOTAL
TOTAL
COMPREHENSIV
COMPREHENSIV
Reserves
E INCOME OF
TOTAL OTHER
TOTAL OTHER
E INCOME OF
SHAREHOLDERS
for
COMPREHENSIV
SHAREHOLDERS COMPREHENSIV
interestOF THE E INCOME – NON-OF THE
TOTAL
OTHER– NONE INCOME
CONTROLLING
rate Translation
CONTROLLING
COMPREHENSIV
CONTROLLING
CONTROLLING
swaps
COMPANY
reserves INTEREST
COMPANY 104
E INCOME
INTEREST
In thousand EUR
TOTAL OTHER
COMPREHENSIV
104 E INCOME
0
-153,8810
00
00
-153,881
0
0
-48
-153,881
-153,929
-48
-153,929
39,798
7.1
--
39,798
-
--
- 39,798
-
- 39,798
39,798
-
39,798
--48,097
-
--48,097
-48,097
-
-48,097
185
-
-
185
185
-
185
Changes in the fair value of available-for-sale
Changes in the fair
financial
value of available-for-sale financial
assets
assets
7.2
-
7.2
-
-48,097
-
- -
-48,097
-
Changes in the value of derivative
Changes
financial
in theinstruments
value of derivative financial instruments
7.3
-
7.3
-
--
185 -
--
-
-
-8,882
-
- -
-8,882
-
- -8,882
-
- -8,882
-8,882
-
-8,882
Effect of deferred tax assets and
Effect
liabilities
of deferred tax assets and liabilities
34
Foreign exchange differencesForeign
from translations
exchange related
differences from translations related
to foreign subsidiaries
to foreign subsidiaries
-
-8,039
6,062
34
-8,039
-37
6,062
-
-37 -1,980
-
- -1,980
-1,980
-
-1,980
-
--
- -
-4,693 -
- -4,693 -4,693
- -4,693
-4,693
-
-4,693
34
31,759
-50,917
34
31,759
148
-50,917
-4,693
148-23,670 -4,693
0-23,670
-23,670
0
-23,670
Total
in the
comprehensive
accounting income in the accounting
period
period
-153,847
31,759
-153,847
-50,917
31,759
148
-50,917
-4,693
148
-177,551 -4,693
-48
-177,551
-177,599
-48
-177,599
Disposal of available-for-sale Disposal
financial of
assets
available-for-sale financial assets
Total other comprehensive Total
income
other
in the
comprehensive income in the
accounting period
accounting period
185
7.1
Changes in the fair value arise from revaluation of property based on the fair value model. The Group revaluates
the value of property at the balance sheet date. In 2010 the effect of revaluation that affected other comprehensive
income amounted to EUR 718 thousand (2009: EUR 39,798 thousand).
7.2
Changes in the Fair Value of Available-for-Sale Financial Assets
The Group assessed the fair value of available-for-sale financial assets on 31 December 2010. The valuation revealed
that the fair value of individual investments was below the book value (revaluation reserve included). The change
in the fair value was recognized in the other comprehensive income statement for 2010, and amounted to EUR
19,363 thousand (2009: EUR 48,097 thousand). The major part of the change, EUR 19,390 thousand, arises from the
investment into shares of Gorenjska banka d. d., Kranj.
7.3
Elimination of Derivative Financial Instruments
The Group used derivative financial instruments for interest rate hedging. In the past years, the company recorded
a loss from valuation of fair value of derivative financial instruments, which amounted to EUR 2,811 thousand.
Compulsory settlement proceedings were launched against controlling company Merkur, d. d., in 2010, and in
line with the contract provisions, the company stopped accounting for hedges, and the total effect of eliminating
derivative financial instruments in the amount of EUR 3,513 thousand was recognized in other comprehensive
income for 2010 (2009: EUR 185 thousand).
7.4
102
Eliminating Deferred Tax Assets and Liabilities
In line with the facts presented under 3.1 Going Concern Assumption, long-term deferred tax assets and liabilities
were eliminated in the financial statements for 2010. Elimination of deferred tax liabilities from revaluated properties
in the amount of EUR 9,213 thousand, and from available-for-sale financial assets in the amount of EUR 4,255
thousand was recognized in other comprehensive income. Elimination of deferred tax assets from cash flow hedges
in the amount of EUR 703 thousand is recognized in other comprehensive income.
7.5
Foreign Exchange Differences from Translations Related to Foreign Subsidiaries
Assets and liabilities of foreign companies are translated into euros at the exchange rate at the balance sheet date.
Revenue and expenses of foreign companies are translated into euros at the average exchange rate in the period.
Foreign exchange differences from translations are recognized in other comprehensive income. The effect of
translation in 2010 was negative and amounted to EUR 7,770 thousand (2009: EUR 4,693 thousand).
8
Other Notes
8.1
Related Parties
Related parties include controlling company MERFIN, d. o. o., Ljubljana (until it lost the controlling interest), parent
company Merkur, d. d., and its subsidiaries and associated companies. Related natural persons are members of the
companies’ supervisory boards, Management Board members and management workers, and employees with
individual contracts in Merkur Group.
Relationships with the Controlling Company
The controlling company in Merkur Group was MERFIN, holdinška družba, d. o. o., with headquarters at Verovškova
ulica 55, 1000 Ljubljana, Slovenia. MERFIN, d. o. o., lost the controlling interest in the Group in 2010, after its stake in
parent company Merkur, d. d., dropped to 8.81% or 9.79% of votes as on 31 December 2010. According to the data
from 31 December 2009, MERFIN, d. o. o., held a 67.5% stake or 75% of votes in the parent company. MERFIN still held
a 68.60% stake in MERKUR on 30 June 2010, it however lost its influence on decisions as the new Management Board
of Merkur, d. d., took over on 1 July 2010. In the second half of 2010, creditors of MERFIN, d. o. o., sold seized shares of
Merkur, d. d., which resulted in the company losing the major part of its only assets, and the company found itself in
great financial difficulties. Bankruptcy proceedings were launched against MERFIN, d. o. o., Ljubljana, on 3 June 2011.
Report on Relationships between Merkur Group and Controlling Company MERFIN, d. o. o., in Line
with Article 545 of the Companies Act – 1
Based on a resolution of the 22nd General Meeting held on 25 February 2011, the DELOITTE REVIZIJA, d.o.o., Ljubljana,
audit company was appointed as a special auditor to review how individual transactions were managed in the period
from 26 April 2007 to 3 November 2010. The special auditor must review the regularity and commercial aptitude of all
direct and indirect transactions between Merkur, d. d., (and its subsidiaries) and companies MERFIN, d. o. o., MERFINA
DVA, d. o. o., MERFIN TRI, d. o. o., and MERFIN ŠTIRI, d. o. o., all four with headquarters in Ljubljana; and direct and
indirect transactions between Merkur, d. d., (and its subsidiaries) and HTC DVA, d.o.o. – in bankruptcy, HTC ENA, d. o.
o., and HTC G, d. o. o., all three with headquarters in Ljubljana. The special auditor must also review the management
of all other transactions, for which suspicion exists that they might have harmed the company (and subsidiaries). The
special auditor should also review all transactions between the company (and subsidiaries), and banks and other
financial organizations related to all loan and other financial transactions, which Merkur, d. d., or any of its subsidiaries
concluded in that period. The review should look at their regularity, commercial aptitude, and check whether a
third party has used its power to intentionally influence management or supervisory bodies, or an authorized
representative to act in a way that would harm Merkur, d. d., and its shareholders. In each of the listed cases, the
special auditor should determine the damage Merkur, d. d., or Merkur Group suffered in line with paragraph 3 of
Article 545 of the Companies Act – 1.
The special audit should be concluded by 30 September 2011 with a report issued by the DELOITTE REVIZIJA, d.o.o.,
Ljubljana, audit company. Based on the findings, the Management Board of Merkur, d. d., will apply due diligence and
launch all the necessary procedures it is required to in line with the law.
Relationships between the Parent Company and Its Subsidiaries and Associated Companies
Business relations between the parent company and its subsidiaries and associated companies are mostly comprised
of purchase and sale of goods, products, services and assets, and financial transactions related to the management
of given and taken loans. As related parties, companies conducted business based on concluded sale and loan
contracts. In transactions, the companies applied market prices of goods, products, services and assets without
exceptions. Loans between related parties were granted under same conditions as apply to other companies with
similar credit ranking.
Notes on Items in Merkur Group’s Other Comprehensive Income Statement for 2010
Report on Transactions between Related Companies
Report on Transactions
Report
between
on Transactions
Related Companies
between Related Companies
Item
Item
YEAR 2010
YEAR 2010
Sale of
goods
Purchase of
goods
-
Merkur, d. d., towards Merfin,
Merkur,
d. o.d.
o.,d.,
total
towards Merfin, d. o. o.,0 total
Merkur, d. d., towards subsidiaries
Merkur, d. d., towards subsidiaries19,910
Loans
Issued
Loans
Liabilities
given guarantees
taken
Loans
given
Issued
guarantees
-
-
-
-65
32-
14765
32
-
147
-
-
-
--
10,068-
-
10,068
0
0
065
32
0
14765
32
0
147
0
0 0
00
10,0680
0
10,068
19,910
3,414
21,964
1,184
3,414
2,505
2,268
1,184
14,590
2,505
15,165
37,788
125,783-
15,165
125,783
21,964
197
355
Merkur Hrvatska, d. o. o., Zagreb
724
8,152
-
-
Merkur International, d. o. o.,Merkur
Beograd
International, d. o. o., Beograd
635
197
2,268
37,788
-
-
-
-
35531
28-
-31
28
-
-
--
--
-
-
724 667
8,15267
667
259
1,05167
1,567
259
1,0513,512
1,567
15,165
3,832
3,512
15,165-
3,832
-
-
-2
-
-2
--
-1,426
3,832
-
1,426
-
3,832-
-
-
-
-
14,590
5,360
635 426
5,360
341
1,626
426
47
341
26,333
1,626
47 718
26,333 5
459
718
5-
459
-
-
-
- 140
- -
140-
- -
18-
-1,609
18 14
1,609
-
14-
-
-
Intermerkur - Nova d. o. o., Sarajevo
Intermerkur - Nova d. o. o., Sarajevo683
2,851
683 106
2,851
1,036
106-
220
1,036
148-
2203,098
148 51
3,098
-
51-
-
-
1,494
289
1,494 19
289 9
19
26
-9
2,527
26
-
-
191
-
-
19114
-
3214
16,575
8,781
16,575
1,064
8,781
2,603
1,064
1,504
Mersteel, d. o. o., Beograd Mersteel, d. o. o., Beograd
6,415
9,163
6,415 44
9,163
636
Mersteel, d. o. o., Zagreb
1,312
2,439
1,312 48
2,439
686
6,792
3,716
6,792 181
919
798
Merkur International Praha, Merkur
spol. S.International
r. o.
Praha, spol. S.2,559
r. o.
Merkur Čelik, d. o. o., Beograd
Perles Merkur Italia, s. r. l. Perles Merkur Italia, s. r. l.
Merkur, d. o. o., Kotor
Mersteel, d. o. o., Zagreb
Mersteel Profil doo, BeogradMersteel Profil doo, Beograd
Mersteel, d. o. o., Sarajevo Mersteel, d. o. o., Sarajevo
104
Provided
Charged Received
Used
Charged Received
Loans
services
interest
interest
services Receivables
interest
interest
Liabilities
Receivables
taken
0
Kovinotehna, d. o. o., Celje Kovinotehna, d. o. o., Celje
Merkur Nekretnine, d. o. o., Merkur
Zagreb Nekretnine, d. o. o., Zagreb
Sale
Provided
of PurchaseUsed
of
goods
services
services
goods
In thousand EUR
1
2,527
-
-1
--
-
14-
32 358
14
-
358
-
--
-
-
1,297
2,603
27,412
1,504
1,2973,615
27,412
-
3,615
-
18,636-
-
18,636
44
39
536
636
4,979
39
5367,711
4,979232
7,711
14
232-
14
-
48-
583
686
156-
5837,253
156
-
7,253
-
--
-
-
3,716 -
181-
62 -
1,900-
625,438
1,900222
5,438
-
222-
-
-
919 944
798
102
944
92
266
102
1,641
92
2668,936
1,641
-
8,936
51
--
51
-
343
2,559 19
34390
19
17
890
1,401
17
1,401
-
15
-
--
-
-
1,257 72
Merkur Makedonija, doo, Skopje
1,257
1,860
Merkur - MI Handels, GmbHMerkur - MI Handels, GmbH
2,391
453
Big Bang, d. o. o., Ljubljana Big Bang, d. o. o., Ljubljana
8,130
3,246
Big Bang, d. o. o., Beograd Big Bang, d. o. o., Beograd
Subsidiaries towards Merkur
Subsidiaries
and among
towards Merkur and among
themselves, total
themselves, total
50,084
30
48,029
-
8
15
1,860 9
72-
220 9
--
-
-
3,331
-
--
-
-
8
453 -3
81
8
9-3
1,471
81
9
-
1,471
-
--
--
-
-
8,130 136
2,391
2203,331
3,246
458
136
438
17
458
750
438
17
69
750
-
69
-
14,470-
-
14,470
-
3022
-
222
6-
2
35
6
-
35
-
--
-
-
50,084
3,872
48,029
6,102
3,872
4,111
4,348
6,102
70,325
4,111
70,325
19,522
4,357
47,126
33,106
19,522
4,357
33,106
-
4,348
47,126
Mersteel, d. o. o., towards associated
Mersteel, d.
companies
o. o., towards associated
1,513
companies 1,659
1,513
-
1,659 -
3-
- -
83
-
5
8
-
-5
--
-
-
Ţelezokrivnica SCT -Merkur,Ţelezokrivnica
d. o. o., Ljubljana
SCT -Merkur, d. o. o.,
1,659
Ljubljana
1,513
1,659
-
1,513 -
-
3 -
5-
3
8
5
-
-8
--
-
-
Associated company towards
Associated
subsidiaries,
company
totaltowards subsidiaries,
1,659
total1,513
1,659
0
1,513 0
0
30
50
3
8
5 0
08
00
0
0
108
108
In thousand EUR
Report on Transactions between Related Companies
Item
Sale of
goods
YEAR 2009
YEAR 2009
Merfin, d. o. o., Ljubljana Merfin, d. o. o., Ljubljana Merkur,
d., towards Merfin, d. o. o.,
Merkur, d. d., towards Merfin,
d. o.d.o.,
total
total
0
0
-
- 4
- -
588 4
16 -
588 -
16 -
419
-
-
- 25,909
419
-
25,909
0 0
0
0
0 4
0 0
588 4
16 0
5880
16 0
419
0
0
0 25,909
419
0
25,909
32,244
-
5,489
2,588 -
5,489
5,303
2,588
258
5,303
57,026
258
64,734
57,026
- 15,165 64,734218,282 -
15,165
218,282
- 2,444
- -
39 122 - -
38 2,444
606
- -
- 39
696122
165 -
38
1,006
606
5,138
- 4
1,006
4
-696
5,508 15,1655,1383,858 5,508 15,165
165
3,858
1,267
3,858
- 1,267
-
-
-
3,858
-
-
-
-817
-219
573 437
-
13817
219
-
278573
- -
13
29,473
626
278
711
2,181
1465
199336
26 24
1
227
10
3,414
-1,372
50,775
199
5,062
26
326
-
Kovinotehna, d. o. o., CeljeKovinotehna, d. o. o., CeljeMerkur Hrvatska, d. o.
o., Zagreb 17,353
12,985
Merkur Nekretnine, d. o. o.,Merkur
ZagrebNekretnine, d. o. o.,- Zagreb
-
-
-
-
-
12,985
-
17,353
-
-
-
-
-
332
-
14,236
-
-
-
-
437
561
-
6,396
-
5,892
-
1,986
-
-465
- 73
336 24 -
-
888
24,316
-
- -865
-
16,440
-
14 4,302 664 -
8,175437
407 -
23,621
1
44,149
888
24,316
1
44,149
Mersteel, d. o. o., Beograd Mersteel, d. o. o., Beograd
12,321
Mersteel, d. o. o., Zagreb Mersteel, d. o. o., Zagreb
875
16,440
12,321
23,621
875
Mersteel Profil doo, Beograd
Mersteel Profil doo, Beograd
8,175
Mersteel, d. o. o., SarajevoMersteel, d. o. o., Sarajevo
407
7,355
4,963
Praha,
o.
Merkur International Praha,Merkur
spol. S.International
r. o.
6,081 spol. S. r.441
Merkur Makedonija, doo,
Skopje
1,824
6,489
Merkur - MI Handels,12,715
GmbH
Merkur - MI Handels, GmbH
1,719
Issued
guarantees
-
53,774
o., Sarajevo6,396
Intermerkur - Nova d. o. o.,Intermerkur
Sarajevo - Nova d. o.561
r. l.
Perles Merkur Italia, s. r. l. Perles Merkur Italia, s.5,892
1,986
Loans
given
-
Merkur, d. d., towards
subsidiaries 32,244
Merkur, d. d., towards subsidiaries
53,774
Merkur
International, d. 332
o. o., Beograd
Merkur International, d. o. o.,
Beograd
14,236
-
106
-
In thousand EUR
-
- 48
- 17
7,355
4,963
-
437251
-236
441
6,489
-
- 7
-107
6,081
1,824
-
12,715
-
1,719
-
9,006
-
10,626
-
- 21
-274
19
10 73
- 865
1,372
37
4,192
134
251
51236
98664
1,755
1,326
96 727177
97 112 15 -
12 7
107
74 21
10 97
252112
14 15
12
2,227
187
140274
- 1
493
2 23
1,755 - 177 -
37 48
- 17
1 14
4,302
3,509
--
1,813
51
2,404
74
4,186
140
6,772
---
251
-
-
-
-3,414
326
-715
-50,775
44,235
675
20,636 4,192
9,250
-134
14,099
--
-
-
-
-
675
20,636
-
-
-
-
251
--
-
-
-675
--
-
-
-
-
- 2,776 16,470 9
445 -
-
16,470
-
445
7,398
112,6044,784104,896 37,551
19,949
104,896
19,949
4,784
37,551
1
715
3,509
44,235
29,473
711
251
- 626
- 2,181
- 227
- 5,062
98
9,250
1,326
14,099
96
2,682
727
11,655
2511,813
2,404
-
10
145
252
4,187
1483
2,227
675 187
4,186
-
2,776
2 9
6,772
- 30
- 2,682
- 11,655
145
- 4,187
-
83
Big Bang, d. o. o., LjubljanaBig Bang, d. o. o., Ljubljana
9,006
10,626
Big Bang, d. o. o., BeogradBig Bang, d. o. o., Beograd
19
44
Subsidiaries
towards Merkur and
Subsidiaries towards Merkur
and
total
among themselves, total among themselves,
115,342
136,872
-
44
-
- 1
493 23 -
115,342437
136,872
437
437
5,845
8,744437
5,845
2,354
8,744
7,398
2,354
112,604
companies
companies
3,300
2,773
3,300
-
2,773
-
-
-
- -
- -
- -
543
374
- 543
-
374
--
-
-
Ţelezokrivnica
SCT -Merkur, d. o. o.,
Ţelezokrivnica SCT -Merkur,
d. o. o.,
Ljubljana
Ljubljana
2,773
3,300
2,773
-
3,300
-
-
-
18 -
- -
62 18
374
62
543
- 374
-
543
--
-
-
subsidiaries, total 2,773
subsidiaries, total
2,773 0
3,300
0
0 0
18 0
0 0
62 18
0
374
62
543
0 374
0
543
00
0
0
3,300
30
109
109
Item
In thousand EUR
Purchases of
Sale of
Purchases of Sale of
Sale ofand Purchase
and
property
and Charged
ProvidedReceived
Used Charged Received
Loans
Purchase property
Used
Loans
Loans
Issued
propertyproperty
and Provided
goods
other assets
assets interest
services interest
services Receivables
interest
interest Receivables
Liabilities
taken
of goods other
assets of goods
other assets
services other
services
Liabilities
taken
given
guarantees
Equity of Subsidiaries on 31 December 2010 and Their Net Profit/Loss in 2010
In thousand EUR
108
Net profit/loss
of the
of the
of the
In thousand
EUR
company
company
company
of the company
Company
31 Dec. 2010
2010
31 Dec. 2009
2009
Total equity Net profit/loss
Total equity Net profit/loss
Merkur Division
of the
of -10,068
the
of the
- Merkur Hrvatska, d. o. o., Zagreb
3,624
13,718
-2,993
company
company
company of the company
- Merkur Nekretnine, d. o. o., Zagreb
2,077
2,089
-2
Company
31 Dec. 2010
2010
31 Dec. 2009
2009
48,299
-2,180
56,937
407
Merkur Division
- Intermerkur Nova d. o. o., Sarajevo
-1,163
-2,394
1,231
-1,114
- Merkur Hrvatska, d. o. o., Zagreb
3,624
-10,068
13,718
-2,993
-2,349
-2,765
286
-730
- Merkur Nekretnine, d. o. o., Zagreb
2,077
2,089
-2
- Kovinotehna, d. o. o., Celje**
-42
810
37
48,299
-2,180
56,937
407
- Merkur Čelik, d. o. o., Beograd
10,627
-239
12,277
-143
- Intermerkur Nova d. o. o., Sarajevo
-1,163
-2,394
1,231
-1,114
- Merkur, d. o. o., Kotor
-442
-355
-87
-286
-2,349
-2,765
286
-730
Mersteel Division
- Kovinotehna, d. o. o., Celje**
-42
810
37
-13,421
-54,018
39,898
-69,382
- Merkur Čelik, d. o. o., Beograd
10,627
-239
12,277
-143
- Mersteel, d. o. o., Zagreb
-701
-3,379
2,664
-7,288
- Merkur, d. o. o., Kotor
-442
-355
-87
-286
-764
-9,852
9,779
-2,810
Mersteel Division
- Mersteel Profil doo Beograd*
-59
-2,622
2,761
-1,681
-13,421
-54,018
39,898
-69,382
1,857
-3,558
5,414
-2,274
- Mersteel, d. o. o., Zagreb
-701
-3,379
2,664
-7,288
2,117
-79
2,157
-21
-764
-9,852
9,779
-2,810
- Merkur - MI Handels, GmbH***
1,126
16
1,109
144
- Mersteel Profil doo Beograd*
-59
-2,622
2,761
-1,681
- Merkur International Praha, spol. S.r.o., Praga
675
-153
785
-67
1,857
-3,558
5,414
-2,274
Big Bang Division
2,117
-79
2,157
-21
- Big Bang, d. o. o., Ljubljana
7,517
-6,009
17,525
1,695
- Merkur - MI Handels, GmbH***
1,126
16
1,109
144
- Big Bang, d. o. o., Beograd
2,273
-710
2,697
-976
- Merkur
International
Praha,
spol. S.r.o.,
Praga of Mersteel,675
785
-67
* Mersteel
Profil doo
Beograd
is a subsidiary
d. o. o., Beograd-153
Big**Bang
Division d. o. o., Celje was liquidated on 30 September 2010
Kovinotehna,
***Bang,
Data for
Merkur
- MI Handels, GmbH is as on 30 September
from 1 January to17,525
30 September 2010
- Big
d. o.
o., Ljubljana
7,517 2010, and -6,009
1,695
- Big Bang, d. o. o., Beograd
2,273
-710
2,697
-976
* Mersteel
Profil
Beograd
is a subsidiary
ofo.,Mersteel,
* Mersteel Profil
doodoo
Beograd
is a subsidiary
of Mersteel, d. o.
Beograd d. o. o., Beograd
** **
Kovinotehna,
o.Celje
o., was
Celje
was liquidated
on 30
Kovinotehna, d.d.
o. o.,
liquidated
on 30 September
2010September 2010
Relationships
with
Related
***
Data
Merkur - MI
Handels,
GmbH isGmbH
asNatural
on 30is
September
2010,
and from 1 January
30 September
*** Data
forforMerkur
- MI
Handels,
as Persons
on 30
September
2010,toand
from 1 2010
January to 30 September 2010
The Group enters business relationships with companies’ supervisory boards, Management Board
members andwith
management
workers,
and employees with individual contracts in Merkur Group’s
Relationships
Related Natural
Persons
companies. with Related Natural Persons
Relationships
The Group enters business relationships with companies’ supervisory boards, Management Board members and
workers,
and employees
with individual
contracts
Group’s
None
of enters
the
members
ofrelationships
the Management
Board in
of Merkur
Merkur,
d. companies.
d.,
their Management
close family members,
Themanagement
Group
business
with companies’
supervisory
boards,
Board
management
board
members
or
directors
of
subsidiaries,
or
members
of
subsidiaries’
supervisory
boards
members
and
management
workers,
and
employees
with
individual
contracts
in Merkur
Group’s
None of the members of the Management Board of Merkur, d. d., their close family members, management
board
owned shares of Merkur, d. d., on 31 December 2010. The same applies to members of the Supervisory
companies.
members or directors of subsidiaries, or members of subsidiaries’ supervisory boards owned shares of Merkur, d. d.,
Board of Merkur, d. d.
on 31 December 2010. The same applies to members of the Supervisory Board of Merkur, d. d.
None of the members of the Management Board of Merkur, d. d., their close family members,
management board members or directors of subsidiaries, or members of subsidiaries’ supervisory boards
Gross
Income
Gross
Income
owned
shares
of Merkur, d. d., on 31 December 2010. The same applies to members of the Supervisory
Board of Merkur, d. d.
In thousand EUR
Related natural person
Total
Gross
Income
Management Board members
2010
2009
7,771
7,148
1,675
1,350
In thousand EUR
6,035
5,751
2010
2009
Others
employees
with individual contracts
Related
natural
person
Members of the Supervisory Board of Merkur, d. d.
Total
7,771 61
7,148 47
Management Board members
1,675
1,350
Others employees with individual contracts
6,035
5,751
61
47
On3131
December
group
had 98 with
employees
individual
contracts.
(31
**On
December
2010,2010,
MerkurMerkur
group had
98 employees
individualwith
contracts.
(31 December
2009:
143)December 2009: 143)
Balance
Merkur
Group’s
Receivables
Members
ofof
the
Supervisory
Board
of Merkur,due
d. d.from
Balance
of
Merkur
Group’s
Receivables
due
fromRelated
RelatedNatural
Natural Persons
Persons
* On 31 December 2010, Merkur group had 98 employees with individual contracts. (31 December 2009: 143)
Related natural person
In thousand110
EUR
31 December 2010
31 December 2009
Total
192
269
Others employees with individual contracts
192
110
Receivables comprise receivables from housing loans to employees. The loans were granted at the
market interest rate applying at the date they were granted.
269
Receivables comprise receivables from housing loans to employees. The loans were granted at the market interest
rate applying at the date they were granted.
Company has no liabilities towards related natural persons.
8. 2
Lawsuits against Merkur Group
Merkur, d. d., Naklo
Lawsuits against Merkur, d. d., are fully described under item 8.3 of the Accounting Report of Merkur, d. d.
A lawsuit against Mersteel, d. o. o., Naklo, is underway before the Kranj District Court under ref. no. I Pg 617/2010, filed
by LTH ULITKI d. o. o., Škofja Loka, on 1 September 2010 for payment of damages in the amount of EUR 186 thousand
with interest and other charges. Both parties filed two applications. Mersteel filed its last application on 9 February
2011, however the plaintiff has not yet responded, neither has the court scheduled the main hearing. Mersteel, d. o. o.,
has set aside provisions in the amount of EUR 186 thousand for this lawsuit.
Prvi faktor, d. d., filed a motion for execution against Mersteel, d. o. o., Naklo, for the collection of EUR 310 thousand
with interest and other charges. On 7 July 2010, the Ljubljana Local Court issued a decision no. VL 93154/2010, in
which it upheld the claim for execution. The company filed an appeal against the decision. The court reversed the
decision and the decision on the motion will be made in a civil procedure. The civil claim is based on the right of
recourse from the concluded contract on factoring. The main hearing has not been scheduled yet. Mersteel, d. o. o.,
has set aside provisions in the amount of EUR 310 thousand for this lawsuit.
9
Business Events after the Balance Sheet Date
9.1
Compulsory Settlement Proceedings against Merkur, d. d.
Compulsory settlement proceedings against Merkur, d. d., are fully described under item 9.1 of the Accounting Report
of Merkur, d. d.
9.2
Insolvency Proceedings against Merkur Group Subsidiaries
Based on re-audited annual report for 2009, financial statements as on 30 June 2010, and documents from relevant
support offices and consultants, the management informed the owner on 15 September 2010 that the company had
met criteria for declaring insolvency.
The company filed an incomplete motion for launching compulsory settlement proceedings at the Kranj District
Court on 29 September 2010, and completed the motion with the report on the company’s financial position
and operations, the auditors report, basic financial restructuring plan, and authorized appraiser’s report within the
deadline prescribed by the law. On 5 November 2010, the Kranj District Court issued a decision no. 1352/2010,
launching the compulsory settlement proceedings.
Since the proceedings were launched, the company’s operations have been managed in line with the Financial
Operations, Insolvency Proceedings and Compulsory Dissolution Act and overseen by court-appointed receiver
Katarina Benedik. The court also appointed a creditors’ committee, which comprises five major ordinary creditors.
The Financial Restructuring Plan, and the report by an authorized appraiser who issued a positive opinion upon
valuating the company, indicate that the implementation of the proposed Financial Restructuring Plan will help the
debtor acquire short- and long-term solvency, while the creditors will have their receivables repaid under better
conditions than they would in case bankruptcy proceedings against the debtor.
The company’s management has adopted a number of measures for improving the operations, which included
laying off redundant workers and cost cutting, and above all efficient management of resources tied up in inventory
and receivables. The operations have focused on profitable groups of goods and buyers who settle their liabilities on
time.
Equity
of of
Subsidiaries
December2010
2010and
and
Their
Net
Profit/Loss
in 2010 Total equity
Equity
Subsidiaries on
on 31 December
Their
Net
Profit/Loss
in 2010
Total
equity
Net profit/loss
On 27 May 2011, the court issued a decision on approving compulsory settlement proceedings, which was supported
by 92.82% of creditors with the right to vote. The was made final on 17 June 2011.
The effects of compulsory settlement made final affect individual financial statements of above-mentioned
companies, as well as consolidated financial statements of Merkur Group. The table with 2010 consolidated financial
statements of Merkur Group below shows the simulation of effects of recording effects of compulsory settlements
made final in 2011:
In thousand EUR
Perles Merkur Italia, s.r.l.
A motion for voluntary liquidation of the company was filed at the competent court in August 2010. Further
procedures revealed that the company lacked sufficient assets to fulfil the criteria for voluntary liquidation. The
company started preparing documents to file a motion for launching compulsory settlement proceedings, which
should be filed by 15 September 2011. During this time, on 5 August 2011, a creditor filed a motion for launching
bankruptcy proceedings, and the court is expected to make a decision on the company’s fate within a month.
A court decision on successful compulsory settlement of Mersteel is required in the motion for launching
compulsory settlement proceedings, since Mersteel’s repayment of liabilities towards Perles is the basis for filing
a motion for Perles’s compulsory settlement. According to the Financial Restructuring Plan, 20% of the creditors’
receivables would be repaid. In the event that the proposed procedure will not be approved, bankruptcy
proceedings will be launched against the company.
Merkur International Praha, spol. S. r. o.
On 11 October 2010, the company’s management filed a motion for insolvency proceedings at the competent
court, which the court rejected, saying it was incomplete. A new motion for insolvency proceedings was filed on
22 October 2010, and on 16 November 2010 the court established that the company met the criteria for declaring
insolvency, and appointed a receiver, a creditors’ representative (Moravia Steel), and set the deadlines for registering
receivables and the date for creditors’ meeting.
110
On 31 January 2011, the court granted a motion of the creditors’ representative and MI Praha for changing the date of
the creditors’ meeting due to lack of clarity in insolvency proceedings against Mersteel, d. o. o., Naklo. The court set a
new date – 19 April 2011.
A motion for reorganization, i.e. compulsory settlement was filed on 8 April 2011. According to the reorganization
plan, the creditors would receive 100% of their receivables within 5 years, 30% of which would be paid this year, and
then 17.5% each following year. The funds for repaying the creditors would be provided from the receivables paid by
Merkur and Mersteel, and by selling property.
The creditors did not support the motion for compulsory settlement on 19 April 2011, and the court declared
bankruptcy, which was made final on 12 May 2011.
Merkur – MI Handels, GmbH
The chairman of the Management Board proposed that the German company be closed down on 17 September
2010. At the proposal of the company’s management, bankruptcy proceedings were launched in the company on 2
October 2010. Michael Jaffe was appointed as the receiver. The bankruptcy proceedings are managed independently
from us and we do not have any influence on further proceedings. Considering the situation, it is unlikely that the
founder would get any of the investment repaid.
9.3
The Effect of Compulsory Settlements in Merkur, d. d., and Mersteel, d. o. o., Made Final on Merkur Group’s Balance Sheet
The creditors supported compulsory settlement in compulsory settlement proceedings against Merkur, d. d., and
Mersteel, d. o. o. Based on the provisions from the Financial Operations, Insolvency Proceedings and Compulsory
Dissolution Act, the court issued on 27 May 2011 a decision on approving compulsory settlement of debtor Mersteel,
d. o. o., which was supported by 92.82% of creditors with the voting right. The decision was made final on 17 June
2011. 95.35% of creditors with voting rights voted in favor of compulsory settlement in Merkur, d. d. The court issued
a decision on approving the compulsory settlement on 15 July 2011, and the decision was made final on 11 August
2011.
Item
Consolidated
balance sheet
of Merkur
Group –
audited as on
31 Dec. 2010
Consolidated
Merkur Group –
the effect of
compulsory
settlements
New balance
sheet of
Merkur Group
as on 31 Dec.
2010 with the
effects of the
compulsory
settlement
1
2
3=1+2
Intangible assets
Investment property
Financial assets
Loans given
Total long-term assets
416,048
2,372
47,793
132,044
12,286
18,457
296
629,296
0
0
0
0
0
0
0
0
416,048
2,372
47,793
132,044
12,286
18,457
296
629,296
Inventories
Loans given
Current tax assets
Total short-term assets
83,565
528
494
42,118
11,592
138,296
0
0
0
-37,457
0
-37,457
83,565
528
494
4,661
11,592
100,839
767,592
54,773
0
55,044
-53,159
-214,670
84,025
-19,415
-93,402
-37,457
-51,707
149,315
-53,159
19,543
48,373
0
0
112,364
730,135
3,066
149,315
1,885
-33,616
-166,297
84,025
-19,415
18,962
15
0
15
-93,387
112,364
18,977
47,870
24,631
72,501
0
142,155
40
0
34,663
224,729
275,660
0
0
49,092
15,909
365,291
275,660
142,155
40
49,092
50,572
590,021
Loans taken
Trade and other payables, including derivative financial
instruments
Current tax liabilities
Provisions
Total liabilities
445,133
4,217
-369,580
0
75,553
4,217
178,236
2
7,864
798
636,250
860,979
-145,533
0
0
0
-515,113
-149,821
32,703
2
7,864
798
121,137
711,158
767,592
-37,457
730,135
TOTAL ASSETS
Issued capital
Capital reserves
Revenue reserves
Treasury shares (as a deduction)
Fair value reserves
Total equity
Loans taken
Non-current financial liabilities after compulsory
settlement
Non-current liabilities after compulsory settlement
Provisions
Total non-current liabilities
On 9 March 2011, the court published an amended Financial Restructuring Plan, which envisaged the repayment of
a larger share of receivables (55%). At the same time the company concluded and agreement with creditor banks on
rescheduling secured liabilities and financing current operations.
Comprehensive Reorganization in Merkur Group in 2011
In addition to the financial restructuring of both holding companies of MERKUR and MERSTEEL divisions (Merkur, d. d.,
and Mersteel, d. o. o.), the implementation of measures for improving the efficiency of operations in companies of the
Merkur division is of key importance for Merkur Group in the phase of reorganizing both divisions. We clearly defined
the roles in responsibilities to ensure successful implementation of measures in the Merkur division. Key measures
were integrated in a comprehensive reorganization project entitled Mozaik. The project’s goals are synchronized with
the company’s financial plan and are of key importance for the success of the reorganization.
Key measures for achieving this goal are divided into 6 sets: optimizing the procurements, optimizing the supply
chain, optimizing the sales network, product group management, increasing the wholesale, working capital
management. Measures for working capital management included an improved tool for planning and managing
cash flows, which allows comprehensive working capital management. Measures for product group management
included category management measures, with which we managed to increase the average value of a purchase
in the retail sector. Measures for optimizing procurement (optimizing all procurement processes and improving
procurement terms) and sales network (optimizing the sales facilities and increasing the productivity) helped us cut
the operating costs in sales centers. Successfully implemented measures in cutting the labor costs and optimizing the
supply chain also contributed to cost cutting.
The project is being implemented in line with the plan and the goals are consistently met.
The goals of Merkur, d. d., are also linked to fulfilling the financial obligations, which are an integral part of the contract
with the consortium of banks. The fulfillment of these goals is overseen by the Roland Berger consultancy company,
which prepares weekly reports for the Management Board and quarterly reports for the consortium of banks.
9.5 112
General Meeting Resolution on Decreasing Capital Stock and on a Capital Injection for Merkur, d. d.
At the 22nd General Meeting of MERKUR, d. d., held on 25 February 2011, a decision was adopted on decreasing the
capital stock. The capital stock of the company, which amounted to EUR 54,773 thousand on the day the decision
was adopted, shall be decreased by EUR 53,592 thousand. The decrease in the capital stock will be carried out in a
simplified manner, by
(a) retiring EUR 5,477 thousand worth of treasury shares, and
(b) by transferring EUR 48,115 thousand from capital stock to capital reserve with the purpose of financial restructuring.
At the same time, a decision was taken on increasing the capital stock with in-kind contributions. The in-kind
contributions comprised claims towards the company from the list of ordinary claims from item 3 of paragraph 1 of
Article 142 of the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act, and from the list
of secured claims from item 5 of paragraph 1 of article 142 of the Financial Operations, Insolvency Proceedings and
Compulsory Dissolution Act, in the case no. 1358/2010 conducted by the Kranj District Court.
The decision will be implemented under the condition that the compulsory settlement proceedings become final.
9.6 Drop in the Value of Maksima Invest Shares
The share of Maksima Invest, d. d., (symbol MKIR) is a security included in auction trading at the Ljubljana Stock
Exchange. Merkur, d. d., holds 5.4% of all the shares.
When determining the fair value of a listed financial instrument, the closing price on the day that the valuation
is being made or the last available price is used. From 31 December 2010 to 30 June 2011, the price of the share
decreased from EUR 2.95 to EUR 0.14 per share (-95.3%). The impairment loss of this investment in the first half of
2011 amounted to EUR 1,780 thousand, which increases the financial expenses and has direct impact on the profit or
loss in the accounting period. Considering the long global economic crisis and the illiquidity of the share market, a
significant turnaround is not to be expected soon.
The biggest decrease of the share’s price occurred this January and in February the share hit its record low value,
followed by stagnation, and a slight increase in the second quarter. The share’s value is changing slightly below EUR
0.14.
9.7
Sale of the Sales Center in Rijeka
Merkur’s sales center in Rijeka was sold on 21 July 2011. The buyer – a property management firm owned by Kiko
Austria – paid the agreed price of EUR 5,444 thousand with tax in three tranches by the end of August 2011. A EUR 40
thousand loss was realized in the sale. Subsidiary Merkur Hrvaška used the money for repaying a loan to SID banka,
d. d., Ljubljana, and paying the suppliers.
9.8
Liabilities from Guarantees
Controlling company Merkur, d. d., had contingent liabilities towards NKBM, d. d., Maribor, arising from a guarantee
issued for a loan taken by subsidiary Mersteel, d. o. o. The loan was secured with inventories at the main creditor and
guarantor, so the creditor could liquidate the inventories, however this would not be an optimum solution for neither
of the parties. The bank proposed that the secured part of the loan be rescheduled, which is a better solution
than liquidating the inventories in the current liquidity situation. In line with the notification from NKBM, d. d., of 14
September 2011, contingent liabilities of Merkur, d. d., in the amount of EUR 4,412 thousand were rescheduled. The
effect of taking over the liabilities is an increase in non-current liabilities in the amount of EUR 4,355 thousand, an
increase in current liabilities in the amount of EUR 57 thousand, and an increase in expenses in the profit and loss
statement for 2011 in the amount of EUR 4,412 thousand.
9.4
Auditor’s Report
Statement of Management Responsibility
The Management Board declares to its best knowledge that the consolidated financial statements were drawn up in
accordance with appropriate accounting policies and that the accounting estimates have been prepared under the
principle of conservatism and the principle of due care, and that the consolidated annual report gives a true and fair
view of the financial position of Merkur Group, and the results of its operations for the year ended 31 December 2010.
The Management Board is also responsible for adequate and orderly accounting, establishment and maintenance
of internal controlling related to preparing and fair presentation of consolidated financial statements. To the
Management Board’s best knowledge, the consolidated financial statements free from material misstatement,
whether due to fraud or error; and the statements with notes and the report are prepared in line with the valid
legislation and International Financial Reporting Standards adopted by the EU.
The Management Board has adopted all measures for protecting the assets.
The chairman and members of the Management Board of Merkur, d. d., are acquainted with the content of integral
parts of the consolidated annual report and the entire consolidated annual report of Merkur Group. We agree with
them and confirm this with our signature.
Naklo, 19 September 2011
114
Blaž Pesjak,
Chairman of the Management Board
Rok Ponikvar,
Management Board Member Director of Procurement, Sales and Logistics
Uroš Zajc,
Management Board Member Director of Marketing
Product Portfolio and Development
Marjan Smrekar,
Management Board Member
Workers’ Director
We hereby recognize our responsibility for preparing and for true and fair presentation of consolidated financial
statements of Merkur Group, which were prepared in line with the International Financial Reporting Standards. This
responsibility comprises: establishing, managing and maintaining internal controlling related to preparing and fair
presentation of consolidated financial statements, which free from material misstatement, whether due to fraud or
errorselection and application of appropriate accounting policies and preparation of accounting estimates that are
reasonable in the circumstances. We confirm the consolidated financial statements
116
COMPANIES IN MERKUR GROUP
Companies in the Merkur division:
Companies in the Mersteel division:
Parent company:
SUBSIDIARIES IN THE MERKUR DIVISION:
SUBSIDIARIES IN THE MERSTEEL DIVISION:
ASSOCIATED COMPANY IN THE MERSTEEL DIVISION:
MERKUR HRVATSKA, d. o. o.
Kelekova 18/A, 10000 Zagreb, Croatia
Phone: +385 1 2009 333
Fax: +385 1 2008 708
E-mail: [email protected]
Ownership structure: Merkur - trgovina in storitve, d. d., 100%
Director: Gregor Adler (Bojan Vidmar until 1 September 2010)
MERSTEEL, trgovina in storitve, d. o. o.
Cesta na Okroglo 7, 4202 Naklo
(registered in the court register on 2 April 2008)
Company registration number: 3307417
Identification number: SI 11722088
Activity code: G/46.720
Phone: +386 (0)4 258 80 00
Fax: +386 (0)4 258 85 56
Website: www.mersteel.eu
ŽELEZOKRIVNICA SCT- MERKUR, d. o. o.
(in bankruptcy proceedings since 14 March 2011)
Bank accounts:
• Gorenjska banka, d. d., Kranj: 07000-0000002321
• Banka Koper, d. d., Koper: 10100-0032602083
• SKB, d. d., Ljubljana: 03138-1002701594
• NLB, d. d., Ljubljana: 02923-0016828282
• Abanka Vipa, d. d., Ljubljana: 05100-8000018034
• Probanka, d. d., Maribor: 25100-9700292128
• NKBM, d. d., Maribor: 04515-0000270653
• Hypo Alpe Adria Bank, d. d., Ljubljana: 33000-0001958809
• UniCredit Banka, d. d., Ljubljana: 29000-0001816667 • Banka Celje, d. d., Celje: 06000-1027015638
• Factor banka, d. d., Ljubljana: 27000-0000097760
118
Management Board of Merkur, d. d., until 30 June 2010:
Bine Kordež, Chairman of the Management Board – CEO
Goran Čelesnik, member of the Management Board –
Commercial Director (until 22. 3. 2010)
Milan Jelovčan, member of the Management Board –
director for organization and IT (until 15 July 2010)
Marjan Smrekar, workers’ director
Management Board of Merkur, d. d., after 1 July 2010
(term until 1 July 2015):
Blaž Pesjak, Chairman of the Management board
(Since 29 September 2010)
Blaž Pesjak, member of the Management Board, in charge of finance,
investments and controlling (from15 July 2010 to 28 September 2010)
Bojan Knuplež, Chairman of the Management Board – CEO
(until 24 September 2010)
Rok Ponikvar, member of the Management Board,
in charge of procurements, sales and logistics (since 15 July 2010)
Uroš Zajc, member of the Management Board, in charge of marketing,
product portfolio and development (since 15 July 2010)
Marjan Smrekar, member of the Management Board –
workers’ director (until 31 August 2013)
Supervisory Board of Merkur, d. d., until 22 June 2010:
Marta Bertoncelj – chairwoman Jakob Piskernik – deputy chairman
Branko Dernovšek
Supervisory Board of Merkur, d. d., after 23 June 2010
(term until 23 June 2014):
Matevž Slapničar, chairman of the Supervisory Board
Antonija Pirc, deputy chairwoman
Miro Medvešek, member (from 25 February 2011 to 25 March 2011)
Vanja Jeraj Markoja, member (from 25 February 2011 to 24 February 2015)
Ana Hochkraut, member
Peter Fratnik, member (from 22 July 2010 to 31 May 2014)
MERKUR NEKRETNINE, d. o. o.
Kelekova 18/A, 10000 Zagreb, Croatia
Phone: +385 1 2009 333
Fax: +385 1 2008 708
Ownership structure: Merkur Hrvatska, d. o. o., 100%
Director: Gregor Adler (Bojan Vidmar until 1 September 2010)
MERKUR INTERNATIONAL d. o. o., Beograd
Partizanske avijacije 4, 11070 Novi Beograd, Serbia
Phone: +381 11 20 57 200
Fax: +381 11 20 57 201
Director: Bojan Pongrac
MERKUR ČELIK, d. o. o., Beograd
Phone: +381 11 222 89 00
Fax: +381 11 222 89 01
Ownership structure: Merkur - trgovina in storitve, d. d., 66.16%
Merkur International d. o. o., Beograd 33,84%
Director: Zoran Cvijović
MERKUR, trgovina i usluge, d. o. o., Cetinje
Bajova br. 1,81250 Cetinje, Montenegro
Phone: +38269090365
Director: Marija Zarić
INTERMERKUR – NOVA, d. o. o., Sarajevo
ul. Stupska bb, Novi Grad
71000 Sarajevo, Bosnia and Herzegovina
Phone: +387 33 756 980
Fax: +387 33 756 941
Director: Enver Šoškić (Igor Lipanović until 5 December 2010)
PERLES MERKUR ITALIA, s.r.l.
(in voluntary liquidation proceedings since 24 August 2010)
Via Aquileia 15/A, 34070 Villesse, Italy
Phone: +39 04 81 96 46 11
Fax: +39 04 81 91 81 67
Director: Davorin Adler
KOVINOTEHNA, d. o. o., CELJE
(the company was deleted from the court register on
30 September 2010 based on the founder’s decision
on simplified liquidation)
Bank account:
• Abanka, d. d., Ljubljana: 05100-8012565469
• Gorenjska banka, d. d., Kranj: 07000-0001053995
• NKBM, d. d., Maribor: 04515-0001597128
Ownership structure: Merkur – trgovina in storitve, d. d., 100%
Director: mag. Darko Gregorič (Gregor Krajnik until 31 March 2010)
MERSTEEL, d. o. o.
Poslovna zona Žitnjak, Slavonska avenija 22d,
10000 Zagreb, Croatia
Phone: +385 1 249 87 30
Fax: +385 1 249 87 39
Ownership structure: Mersteel, trgovina in storitve, d. o. o., Naklo, 100%
Director: Sanja Svetec (Gregor Adler until 1 September 2010)
MERSTEEL, trgovina i usluge, d. o. o.
Phone: +381 11 222 89 00
Fax: +381 11 222 89 01
Director: Zoran Cvijović
MERSTEEL PROFIL, d. o. o., Beograd
Phone: +381 11 222 89 00
Fax: +381 11 222 89 01
Ownership structure: Mersteel, trgovina i usluge DOO, Beograd, 100%
Director: Milan Ačimović
MERSTEEL, d. o. o., Sarajevo
Ul. Safeta Zajke 267, Rajlovac
71000 Sarajevo, Bosnia and Herzegovina
Phone: +387 33 496 000
Fax: +387 33 496 019
Director: Željko Mutnović
MERKUR MAKEDONIJA DOO Skopje
Ul. Edvard Kardelj 12, 1000 Skopje, Macedonia
Phone: +389 232 19 701
Fax: +389 232 19 710
Ownership structure: Mersteel, trgovina in storitve, d. o. o., Naklo, 99,27%
Director: Vesna Mirčeska
MERKUR MI HANDELS, GmbH
(in bankruptcy proceedings since 2 October 2010)
MERKUR INTERNATIONAL PRAHA, spol. S. r. o.
(in bankruptcy proceedings since 12 May 2011)
Companies in the Big Bang division:
BIG BANG, d. o. o., Ljubljana
Šmartinska cesta 152, 1000 Ljubljana
Identification number: SI 18224326
Phone: +386 (0)1 309 37 00
Fax: +386 (0)1 309 37 60
Website: www.bigbang.si
Bank accounts:
• NLB, d. d., Ljubljana: 02923-0254441325
• SKB banka, d. d., Ljubljana: 03171-1007727196
Ownership structure: Merkur – trgovina in storitve, d. d., 100%
Director: Breda Terglav (Bojan Knuplež until 15 July 2010)
BIG BANG, d.o.o., Beograd
Bulevar Mihajla Pupina 6, 11000 Beograd, Serbia
Phone: +381 11 262 24 63
Fax: +381 11 268 51 70
Ownership structure: Big Bang, d. o. o., Ljubljana, 100%
Director: Gregor Drozg
Office of MERKUR, d. d., abroad:
CHINA
(closed on 25 July 2011)
MERKUR – trgovina in storitve, d. d.
Cesta na Okroglo 7, 4202 Naklo
Registered at: The Kranj District Court under no. 10001500
Capital stock: EUR 3,066,444
Identification number: SI98492462
Phone: +386 (0)4 258 80 00
Fax: +386 (0)4 258 88 05
Website: www.merkur.eu
120
CONSOLIDATED ANNUAL REPORT OF
MERKUR GROUP FOR THE FINANCIAL
YEAR 2010
Published by: Merkur, d. d.
Cesta na Okroglo 7, SI–4202 Naklo, Slovenia
Production by: Merkur, d. d., Marketing
Texts by: Merkur, d. d.
Photography by: Lidija Mataja
September 2011
122
Merkur, d. d., Cesta na Okroglo 7, 4202 Naklo

consolidated annual report of merkur group for the financial year 2010

Transcription

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