Annual Report 2014
Annual Report 2013
3
Table of Contents
1 Information on the Company and its Subsidiaries
4
2 History of the Company
5
3 Bodies of the Company and its Organisational Structure
7
4 Product Portfolio and Research and Development Activities
9
5 Report of the Board of Directors on the Economic Results for the Year Ended 31 December 2014 and on the Company’s Business Activities
10
6 Related Parties Report in accordance with Section 82 of Act No. 90/2012 Coll., on Business Corporations, for the year ended 31 December 2014
13
7 Auditor’s Report
17
8 Financial Statements for the Year Ended 31 December 2014
19
4
Information on LANEX a.s., its Fellow Subsidiary and its Subsidiaries
Name of the Company: Registered Office: Corporate ID: Tax ID: Registered in the Register of Companies:
LANEX a.s. Hlučínská 96/1 28223209 CZ28223209 Maintained by the Regional Court in Ostrava File B, Insert 4191
Telephone: Fax: E-mail: Presentation:
+420 553 751 111 +420 553 654 125
[email protected] www.lanex.cz
Financing banks:
Česká spořitelna a.s. ČSOB a.s. Ostrava UniCredit Bank Czech Republic, a.s. Ostrava
Information on securities: Type: Sort: Form: Registered share capital: Jmenovitá hodnota akcie:
Shares Ordinary registered shares Certificate CZK 111,150,000 CZK 45,000
Sole shareholder: Since 19 November 2014, Drandy s.r.o. with its registered office at Hlučínská 96/1, 747 23 Bolatice, Corporate ID 03327761, with a 100% equity investment. Until 19 November 2014, KRASTION HOLDINGS LIMITED, Nicosia, Republic of Cyprus, HE 210111. Until 19 November 2014, LANEX a.s. had one fellow subsidiary SINGING ROCK s.r.o. at Poniklá. LANEX a.s. has subsidiaries in which it holds the following equity investments: ■
■
100% equity investment of CZK 973 thousand in the subsidiary LANEX Polska Sp. z o.o. Dabrowa Gornicza in Poland, which was formed in 2000 and is engaged in business activities. 66% equity investment of CZK 15,983 thousand in the subsidiary LANEX-KANAT O.O.O. based in Orel, Russian Federation. This entity was formed in December 2010 for the production of PP fibres, dynamic and static ropes.
LANEX a.s. has no organisational branches abroad.
Annual Report 2013
5
History of the Company
The origins of rope production and the basis of today’s LANEX date back to 1949. In March 1949, Slezská provazárna was founded and later, in the 1950s, it underwent several organisational changes, the last of which was integration into JUTA Dvůr Králové nad Labem in 1958. The Bolatice plant was part of JUTA until 1990, when the political and economic changes in the Czech Republic led management to initiate a spin-off from JUTA as of 1 November 1990 and to form a standalone legal entity: LANEX s. p. Other important events in the Company’s modern history include:
1992 ■
■
■
Approval of the privatisation project by the Ministry of Industry followed by the transformation of the state-owned company LANEX into a joint-stock company as of 1 May 1992 The CONROP management company buys a 40 % shareholding from the state The Company’s headcount was 370 people and the annual turnover amounted to CZK 221 million
■
■ ■
2000 ■
1993 ■
Dynamic growth in the production and sale of bulk bags, acquisition of a production plant in Kravaře
■
1995
■
■
Further growth in the bulk bag sale, acquisition of a production plant in Vítkov for 60 employees Growth in the sales of marine ropes A construction of a new two-storey production hall in Bolatice Implementation of the first integrated information system, completion of gas installation in the firm
■
1997 Implementation of quality system management principles under EN ISO 9001 A TÜV CERT Munich grants a quality certificate as of 10 November 1997
■
1998
■
A year-on-year growth in turnover of 20 %; 71 % of sales are generated by exports The Company has 631 employees, sales amount to CZK 566 million
■ ■
■ ■
1999 ■ ■
Record expenses invested in the development: CZK 119 million Construction of a new production hall in Kravaře
Establishment of the second foreign subsidiary – LANEX Slovakia, based in Brezno, for bag production Quality management recertification audit under EN ISO 9001:2000
2005 ■
■
Establishment of two strategic business units: strategic and business unit (SBU) I Flexible Packaging a SBU II Ropes and Fibres The Company has 832 employees, annual turnover of CZK 842 million
2003 ■
■
stablishment of the first foreign subsidiary – LANEX Polska Sp. z o.o. Comprehensive renovation of the plant in Vítkov
2001 ■
■
Acquisition of the property of the former Hedva Vítkov textile company, in bankruptcy A year-on-year growth in turnover of 11 % Start of the development and sale of the product mix of paper carrier ropes and dynamic and static ropes
■
LANEX becomes a member of the European Federation of Rope, Twine and Netting Industries – EUROCORD Establishment of a subsidiary, Q-FLEX Rebranding of the product mix of dynamic and static ropes and the introduction of a new product brand, TENDON Exports to over 45 countries worldwide generate 84% of sales Construction of the plaiting production hall, resulting in a significant increase in the production capacity of rope-plaiting machines Acquisition of a re-granulation line to process synthetic material waste
6
2006 ■ ■
Move of bag production from the plant in Kravaře to Bolatice Construction of a new production hall in LANEX Slovakia
■
■
Establishment of the subsidiary – LANEX - KANAT O.O.O. in Russian Orel with a 66% share held by LANEX a.s. Record sales of nearly CZK 1 billion, profit generation, the LANEX Group now employs 774 people
2008 Investment of CZK 82 million: A Construction of a production hall in Bolatice A Implementation of a new information system (SAP) A Acquisition of the SIMA extrusion line and the related technology for the production of semi-finished products for artificial grass A Acquisition of additional plaiting machines for the production of dynamic and static ropes ■ A change in LANEX’s shareholder structure A sale of shares of most shareholders to ARX private equity fund ■ ARX purchases a 100% shareholding in SINGING ROCK, with its registered office in Poniklá ■
2011 ■
■
■
2012 ■
■
2009 ■
■
■
■
■ ■
A rapid drop in global demand and orders in most product groups resulting from the economic crisis Drop of 20-40 % in the sales of the LANEX Group in the early months of the year Transfer of the LANEX Group to the life operation in the new SAP information system as of 1 January Termination of bag production in LANEX Slovakia as of 1 May 2009, concentration of this production in the plants in Bolatice and Vítkov Launch of the production and sale of monofilaments for artificial grass Completion of the merger between SINGING ROCK and LANEX as of 1 June by which SINGING ROCK becomes the third division of LANEX a.s. A strengthening of LANEX’s position on the mountaineering and personal safety gear market by creating individual brands, TENDON and SINGING ROCK
■
■
2010 Gradual increase in the turnover of most product mixes and markets
Sale of the subsidiary, LANEX Slovakia, spol. s r.o., to the fellow subsidiary, LANEX Packaging s.r.o. Subsequent sale of the fellow subsidiary, LANEX Packaging s.r.o. Completion of the merger of RAVELTIK, s.r.o. and LANEX a.s., inclusion in the SINGING ROCK division Investment in the modernisation of machinery for the production of PP fibre
2013 ■
■
Spin off of the SINGING ROCK and Raveltik divisions into an independent subsidiary SINGING ROCK s.r.o. Investments in enhancing the twisting and knitting capacities and in further noise reduction
2014 ■ ■ ■
■
Acquisition of a Czech company, RAVELTIK, s.r.o., to expand the portfolio of products offered under the SINGING ROCK brand Transformation of the Flexible Packaging SBU into a fellowsubsidiary, LANEX Packaging s.r.o. For the first time in their history, the sales of the LANEX Group and the LANEX Packaging fellow-subsidiary exceeded CZK 1 billion A a growth of 7% compared to 2010
sale of LANEX a.s. to private shareholders investment of 6.5 million CZK in purchase of land property historically the first year of continuous operation of HT 8
Annual Report 2013
7
Bodies Of The Company And Its Organisational Structure
BODIES OF THE JOINT STOCK COMPANY
BOARD OF DIRECTORS Rudolf Gregořica – CHAIRMAN OF THE BOARD OF DIRECTOR Pavel Schiesser – VICE-CHAIRMAN OF THE BOARD OF DIRECTORS (until 19 November 2014) Tomáš Lánský – MEMBER OF THE BOARD OF DIRECTORS (until 19 November 2014) Jaroslav Štěpař – MEMBER OF THE BOARD OF DIRECTORS (from 19 November 2014) Miroslav Stančík – MEMBER OF THE BOARD OF DIRECTORS (from 19 November 2014)
SUPERVISORY BOARD Brian Albert Wardrop – CHAIRMAN OF THE SUPERVISORY BOARD (until 19 November 2014) Karolína Procházková – MEMBER OF THE SUPERVISORY BOARD (until 19 November 2014) Tereza Plášková – MEMBER OF THE SUPERVISORY BOARD (until 24 February 2014) Michal Aron – MEMBER OF THE SUPERVISORY BOARD (from 24 February 2014 until 19 November 2014) Rudolf Bochenek – MEMBER OF THE SUPERVISORY BOARD (from 19 November 2014)
MANAGEMENT David Kuzník – TECHNICAL DIRECTOR Věra Fojtů – FINANCE DIRECTOR Alena Zvěřinová – QUALITY DIRECTOR Jana Lazecká – HR DIRECTOR Eva Wiedermanová – MARKETING DIRECTOR Jaroslav Štěpař, ACCA – CONTROLLING DIRECTOR Břetislav Rohel – PRODUCTION DIRECTOR Martin Václavek – SALES & PURCHASE DIRECTOR Jiří Stachovský – SALES DIRECTOR Jana Jochimová – RESEARCH AND DEVELOPMENT MANAGER
8
ORGANISATIONAL STRUCTURE
LANEX a.s. Bolatice
CHAIRMAN OF THE BOARD OF DIRECTOR
Subsidiary LANEX POLSKA. SP. Z.o.o Dąbrowa Górnicza
HR SECTION HR DIRECTOR
Subsidiary OOO LANEX-KANAT Orel-Russia
PRODUCTION SECTION PRODUCTION DIRECTOR
RESEARCH AND DEVELOPMENT SECTION RESEARCH AND DEVELOPMENT MANAGER
CONTROLLING SECTION
SALES & PURCHASE SECTION
FINANCE SECTION
SALES SECTION
QUALITY SECTION
MARKETING SECTION
CONTROLLING DIRECTOR
FINANCE DIRECTOR
QUALITY DIRECTOR
SALES & PURCHASE DIRECTOR
SALES DIRECTOR
MARKETING DIRECTOR
TECHNICAL SECTION TECHNICAL DIRECTOR
SUBSIDIARIES WITH LEGAL ENTITY STATUS LANEX Polska Sp. z o.o. DĄBROWA GÓRNICZA, POLSKO OOO LANEX-KANAT OREL, RUSKÁ FEDERACE
ENVIRONMENTAL PROTECTION In its business activities, the Company respects and maintains all applicable legislative measures relating to the environment. The Company applies and improves internal preventive measures leading to the prevention of negative impacts with respect to work safety and environmental protection. The Company contributes to protecting the environment by increasing the share of its own and purchased production waste based on synthetic textile materials that it recycles. The significant portion of recycled polypropylene and polyethylene is processed and integrated in its final products. LABOUR RELATIONS LANEX a.s. complies with legal regulations and rules determined for labour relations and work safety. A labour union is active in the Company. Therefore, the Company concludes a collective agreement for each year, which is in line with the minimum claims of the supreme collective agreement and increases them in certain parts. All principal issues are discussed with labour
unions or else labour unions receive necessary information on them. The internal principles of the Company’s management are based on the Working Rules, Quality Manual, Principles of Economic Management, and integrated system of internal guidelines for the Company’s management. Results of inspections from labour offices, regional social security administrations, work inspection offices and other state institutions confirm the approach referred to above. POST BALANCE SHEET DATE EVENTS The statutory bodies of LANEX a.s. and Drandy s.r.o. are preparing a project of merger by acquisition on the basis of which LANEX a.s. will be dissolved and its commercial assets will be passed to Drandy s.r.o. The determining day of the merger has been determined to be 1 January 2015. No subsequent events which would have a significant impact on the financial statements have occured after the date of signing the financial statements.
Annual Report 2013
9
Product Portfolio And Research And Development Activities
The rich product portfolio of LANEX a.s. is based on innovation and individual research projects. The product portfolio is divided into strategic product range groups based on market segmentation. The Company has its own product development, which is organised independently in each strategic and business unit. The Company’s management approves research and development projects and innovations for each product group every year. Development units monitor material and product trends and look for ways of differing, improving the end-use properties of the products, and reducing the costs of products through innovation and their own development.
The key development tasks in 2014 included: ■ ■ ■ ■ ■
development of ultralight dynamic rope “Lowe 8.4 mm” development of thin dynamic rope “Hattrick 8.6 mm” with technology limiting the sheath slippage relative to the core development of new series of halyards for water sports “Dynestorm” development of new series of mooring ropes for water sports “Flexi Dock” continuing extension of marine rope series under the name of Cruiser Plus with appropriate certification
The key strategic product groups are as follows: 1. SAFETY DYNAMIC AND STATIC ROPES Highly-sophisticated products used on the B2B B20 market in the mountaineering and canyoning segments and as safety ropes for working at heights and in various fields of the civil, rescue and military sectors. 2. PAPER CARRIER ROPES Highly-sophisticated products used as carrier ropes to introduce cartons of paper into paper machines with high resistance to chemicals and high temperatures. 3. ROPES FOR SHIP TRANSPORT, YACHTING AND OTHER INDUSTRIAL SEGMENTS A wide range of products covering ropes and cords made of natural and synthetic materials for various market segments. The largest portion includes ropes for naval transportation and anchoring, ropes for the production of nets, the transport and fastening of loads, ropes with conductible wire used as pasture fences, and products for consumer markets and leisure activities. 4. POLYPROPYLENE AND POLYETHYLENE FIBRES AND TAPES Semi-finished products used for further processing in various areas of technical textiles, ie the production of ropes, sewing threads, nets, filter cloths, strap belts and other products. 5. ARTIFICIAL GRASS FIBRES Monofilaments and fibrillated stripes including special texture materials used as semi-finished products for the production of artificial grass carpets and surfaces for sports – football, tennis, golf, field hockey and also for decorative and industrial purposes.
10
Report of the Board of Directors on the Economic Results for the Year Ended 31 December 2014 and on the Company’s Business Activities
For LANEX a.s. and the LANEX Group, the year 2014 was a very successful period of growth even in spite of the strongly unfavourable change of conditions in the Russian Federation which belongs to our important export territories and where, in addition, LANEX had established a joint venture in 2010. The political situation in this territory has been reflected adversely in the turnover realized in Ukraine. However, in spite of decreases in sales in Russia and Ukraine, the company not only succeeded in achieving the planned turnover but also exceeded the planned trading income, thus achieving a considerable year-on-year growth. In 2014, the process of sale of the LANEX Group has been successfully completed, as KRASTION Holdings Ltd. sold 100% of its shares in the LANEX Group to Drandy s.r.o. whose strategy is a long-term development of the LANEX Group and whose investing is not limited in terms of time.
Annual Report 2013
The turnover of LANEX a.s. reached the level of 711.5 million CZK, which represents a year-on-year growth of 7.8%. The biggest year-on-year growth of turnover, expressed in percentage terms, has been achieved in the product group of yachting ropes, thus reflecting the increasingly growing quality of both the products and the customer servicing. The biggest year-on-year growths of turnover, expressed in absolute terms, have been achieved in the product groups of high-tenacity polypropylene fibres and yarns, paper carrier ropes, and dynamic and static ropes being sold under the TENDON brand. Also the product group of marine ropes and ropes for hobby and industry showed a year-on-year growth. The fact that the main product groups with increased sales were sophisticated products for demanding and specific niche markets, i.e. products with above-average margin, has influenced significantly the operating profit and the EBITDA as well as the EBITDA margin which has achieved 9.7% in 2014 in comparison with 7.7% in the previous year. The EBITDA amounting to 68.8 million CZK made a 34.6% year-on-year growth; this result has been influenced especially by the year-on-year growth of turnover realized with the minimum increase of number of employees and fixed material costs. The presented results have been strongly influenced by the CZK-to-EUR currency devaluation as well. Also the financial result of the company shows considerable positive changes. Although the financial result is in negative figures (-2.6 million CZK), a comparison with the previous year shows an improvement by 12.1 million CZK. This year-on-year difference has been caused by the heavy impact of the CZK devaluation in November 2013 on the economic result of 2013 and on the accounting value of derivative contracts concluded for EUR sales before the devaluation of the Czech currency in November 2013. In 2014, the company showed -2.9 million CZK in the subledger of exchange rate profits and losses, but this is incomparably less that the previous year which has been affected by the above described losses from derivative contracts concluded earlier. All those effects have contributed to the total result of the operating profit of 27.5 million CZK and the profit before tax of 24.9 million CZK.
11
Česká spořitelna bank has taken the place of both the banks in November. LANEX has reduced its debt by 14.1 million CZK. EXPECTED DEVELOPMENT IN 2015 Based on the current market development and activities realized by the company, a growth also in 2015 is anticipated. In spite of the continuing problematic situation on the Russian market, the company expects an 8% increase of total turnover. The turnover is expected to grow mainly in product groups with higher added value, such as dynamic and static ropes, yachting ropes and paper carrier ropes, which have priority within the strategy of the company and its plans of future development. An important growth of sales is planned also in the group of high-tenacity polypropylene fibres and yarns in which LANEX ranks among the five leading European manufacturers for these market segments. For this reason, a new production capacity has been installed in March 2015 the value of which is the major part of the amount of 26.0 million CZK being planned to be invested in 2015. Other large investments are the increase of production capacities of braiding machines and renewal of hardware for operation of the information system. The turnover growth is the main precondition for increase of the planned operating profit to 46.1 million CZK and EBITDA to 80.4 million CZK. The risk being expected in 2015 is the same as in 2014, namely the development and situation on the markets of Russia and Russian speaking countries where the company realizes a significant part of its turnover. The members of the top management and the board of directors are sure that LANEX is able to utilize the opportunities connected with the expected general development of the market and demand activity and will able to continue its development and enhance its position on the market.
In terms of investment activities, the company has purchased fixed assets amounting to 22.5 million CZK in 2014. This investing was of development character mostly, with the objective of increasing the production capacities of the company and providing the possibility of further strategic development and growth.
In Bolatice on 28 February 2015
During the year, the company had been financed by the ČSOB and UniCredit banks. On the basis of a selection procedure, the
Rudolf Gregořica CHAIRMAN OF THE BOARD OF DIRECTOR
Annual Report 2013
13
Related Parties Report in accordance with Section 82 of Act No. 90/2012 Coll., on Business Corporations, for the year ended 31 December 2014
1. Information on the controlled entity Name: Registered office: Corporate ID:
LANEX a.s. Hlučínská 96/1, 747 23 Bolatice 28223209, Recorded in the Register of Companies held by the Regional Court in Ostrava, File B, Insert 4191
Statutory body:
Rudolf Gregořica, Chairman of the Board of Directors Jaroslav Štěpař,Member of the Board of Directors (from 19 November 2014) Miroslav Stančík, Member of the Board of Directors (from 19 November 2014)
Pavel Schiesser, Vice-Chairman of the Board of Directors (until 19 November 2014) Tomáš Lánský, Member of the Board of Directors (until 19 November 2014)
The Board of Directors acts on behalf of the Company or two members of the Board of Directors may act on behalf of the Company jointly. The Board of Directors acts on behalf of the Company, Chairman and Vice-Chairman act independently on behalf of the Board of Directors, other members of the Board of Directors act always two together on behalf of the Board of Directors (until 6 March 2014).
Business activities: ■ ■
■ ■ ■
Production, trade and services not listed in appendices 1 to 3 of the Trade Licensing Act Road motor transport - freight in-country transport by vehicles with weight up to 3.5 tons (inclusive); - freight in-country transport by vehicles with weight exceeding 3.5 tons; - international freight transport by vehicles with weight up to 3.5 tons (inclusive); - freight international transport by vehicles with a maximum weight exceeding 3.5 tons. Technical and organisational activities in fire protection Provision of services in work safety and health protection in the workplace Accounting advisory, bookkeeping, tax records maintenance
2. Information on the controlling entity LANEX a.s. is directly controlled by its sole shareholder: Name: Registered office: Corporate ID:
Drandy s.r.o. Hlučínská 96/1, 747 23 Bolatice 03327761 Recorded in the Register of Companies held by the Regional Court in Ostrava, File C, Insert 60536
Until 19 November 2014, LANEX a.s. had been directly controlled by its sole shareholder: Name: Registered office: Corporate ID:
KRASTION HOLDINGS LIMITED Nicosia, Kyriakou Matsi, EAGLE HOUSE, 10th floor, Agioi Omologites 16, P.C. 1082, Cyprus HE 210111
KRASTION HOLDINGS LIMITED is also the sole partner of the following company: Name: Registered office: Corporate ID:
SINGING ROCK s.r.o. Poniklá 317, 514 01 29130719
14
Statutory body:
Recorded in the Register of Companies of the Regional Court in Hradec Králové, File C, Insert 32794 Jiří Hrdina, statutory executive Guilherme Settani, statutory executive Tomáš Lánský, statutory executive (from 1 November 2014) Rudolf Gregořica, statutory executive (until 1 November 2014) The statutory executive is entitled to act on behalf of the Company independently.
3. Information on other related parties LANEX a.s. is the sole owner of the following company: Name: Registered office: Corporate ID:
LANEX Polska, Sp. z o. o. Ul. Rapackiego 22, 42-520 Dąbrowa Górnicza, Poland 276759716 Recorded in the Regional Court Register, No. 0000129494
Statutory body:
Pavel Kirschner, Chairman Rafal Piotr Cwieczek, Vice-Chairman
Each statutory executive acts on behalf of the Company independently. LANEX a.s. holds a 66% equity investment in the following company: Name: Registered office: Corporate ID:
OOO “LANEX-KANAT” Mashinostroitelnaya, d.6, 302008 Orel, Russian Federation 1105752002190 Recorded in the Unified State Register of Legal Entities No. 2308 on 13 December 2010
Statutory body: Jan Mihal 4. Relations between related parties in the year ended 31 December 2014 A) BUSINESS RELATIONS Business transactions between related parties are made at arm’s length (contracts, orders). For these purposes, the Company prepared an internal guideline entitled “Transfer prices determined among LANEX related parties”. Transactions between LANEX a.s. and Krastion Holdings Limited: No business transactions were realized in 2014. Transactions between LANEX a.s. and Drandy s.r.o.: No business transactions were realized in 2014. Transactions between LANEX a.s. and LANEX Polska, Sp. z o.o.:
Annual Report 2013
15
Standard supplier-customer relations based on arm’s length conditions. The financial performance based on these transactions was as follows: ■
■
Business relations between LANEX Polska and LANEX a.s. in 2014 (LANEX Polska as the supplier) in the amount of CZK 468 thousand. Business relations between LANEX Polska and LANEX a.s. in 2014 (LANEX Polska as the customer) in the amount of CZK 28,242 thousand.
Transactions between LANEX a.s. and OOO LANEX-KANAT Standard supplier-customer relations based on arm’s length conditions. The financial performance based on these transactions was as follows: ■ ■
Business relations between KANAT and LANEX a.s. in 2014 (KANAT as the supplier) in the amount of CZK 5,665 thousand. Business relations between KANAT and LANEX a.s. in 2014 (KANAT as the customer) in the amount of CZK 14,291 thousand.
Business relations between LANEX a.s. and SINGING ROCK s.r.o. (from 1 January 2014 until 18 November 2014) Standard supplier-customer relations based on arm’s length conditions. The financial performance for 2014 based on these transactions was as follows: ■
■
Business relations between SINGING ROCK s.r.o. and LANEX a.s. (SINGING ROCK as the supplier) in the amount of CZK 3,615 thousand. Business relations between LANEX a.s. and SINGING ROCK s.r.o. (SINGING ROCK as the customer) in the amount of CZK 13,540 thousand.
B) GUARANTOR LIABILITY OF LANEX A.S. FOR PAYABLES OF SUBSIDIARY LANEX a.s. provided the following guarantees: - For a loan of the subsidiary, LANEX Polska, in the amount of CZK 6,492 thousand. C) CONTRACTS FOR THE BILLING OF SERVICES BETWEEN LANEX A.S. AND ITS RELATED PARTIES LANEX a.s. concludes contracts with related parties based on which it provides individual related parties with activities specified in the contract. The related parties pay a fee to the Company for the provided services in accordance with the contract. The fee is determined on a lump-sum basis. In 2014, the subsidiary LANEX Polska received payments amounting to CZK 392 thousand (use of the SAP software, insurance of statutory bodies, advertising services, etc.). In the period from 1 January 2014 to 18 November 2014, the subsidiary SINGING ROCK received payments amounting to CZK 3,193 thousand (IT and controlling services, bookkeeping and financing, customs services, etc.). D) LICENCE AGREEMENTS BETWEEN LANEX A.S. AND RELATED PARTIES The Company has concluded licence agreements for the use of trademarks owned by LANEX a.s. with the related parties. Pursuant to the licence agreements, LANEX a.s. billed CZK 396 thousand to LANEX Polska in the year ended 31 December 2014.
16
E) DIVIDENDS FROM SUBSIDIARIES In the year ended 31 December 2014, LANEX Polska paid CZK 3,875 thousand from its 2013 profit to the parent company LANEX a.s.
5. Conclusion In the year ended 31 December 2014, LANEX a.s. suffered no detriment from relations with the controlling entity and related parties. The controlling entity did not use its influence to enforce the adoption of a measure or conclusion of a contract from which the controlled entity may suffer proprietary detriment. The related parties share and participate in utilising the benefits specified in Points 4, arising from synergies in particular in the field of sharing a single SAP information system, but also from the financial stability and the LANEX brand awareness on the market. They are common, mutual and well-balanced benefits, applicable for all the participating related parties; no related party suffers from a disadvantage in this relationship. Apart from the above, no asset transaction of over 10% of the share capital took place between the controlled and controlling entities. The Board of Directors declares that it prepared this report using the information that it had available or that it was able to obtain with due care and diligence and it believes that the information listed in this report reflects reality.
In Bolatice on 28 February 2015
Rudolf Gregořica Chairman of the Board of Directors of LANEX a.s.
Annual Report 2013
Auditor‘s Report
17
18
Annual Report 2013
19
The information from the profit and loss statement and the balance sheet BALANCE SHEET FULL VERSION (in CZK thousand)
Year ended 31. 12. 2014
Year ended 31. 12. 2013
Gross
Adjustment
Net
Net
TOTAL ASSETS
962 942
546 931
416 011
430 357
B.
Fixed assets
762 195
542 955
219 240
247 735
B.I.
Intangible fixed assets
41 924
41 661
263
7 820
B.I.3.
Software
40 504
40 385
119
7 794
B.I.4.
Valuable rights
1 420
1 276
144
26
B.II.
Tangible fixed assets
703 315
501 294
202 021
214 106
B.II.1.
Land
7 505
1 005
B.II.2.
Structures
199 276
88 085
111 191
116 221
B.II.3.
Individual movable assets and sets of movable assets
496 284
413 209
83 075
96 373
B.II.7.
Tangible fixed assets under construction
B.II.8.
Prepayments for tangible fixed assets
B.III.
Non-current financial assets
16 956
B.III.1.
Equity investments - subsidiary (controlled entity)
16 956
C.
Current assets
199 289
C.I.
Inventories
95 024
C.I.1.
Material
C.I.2.
Work in progress and semifinished goods
C.I.3.
Products
C.I.5.
Goods
C.I.6.
Prepayments for inventory
C.III.
Short-term receivables
C.III.1.
Trade receivables
C.III.6.
State - tax receivables
C.III.7. C.III.8.
7 505
0
27
250
480
16 956
25 809
16 956
25 809
3 976
195 313
180 946
239
94 785
86 547
32 246
84
32 162
29 244
39 128
57
39 071
28 292
18 774
67
18 707
24 146
1 869
31
1 838
2 300
3 007
2 565
101 611
3 737
97 874
92 513
96 243
3 737
250 0
3 007
92 506
82 089
3 461
3 461
8 734
Short-term prepayments made
247
247
128
Estimated receivables
120
120
4
1 540
1 558
2 654
1 886
C.III.9.
Other receivables
1 540
C.IV.
Current financial assets
2 654
C.IV.1.
Cash on hand
271
271
299
C.IV.2.
Cash at bank
2 383
2 383
1 587
D. I.
Other assets
1 458
1 458
1 676
D.I.1.
Deferred expenses
1 150
1 150
1 252
D.I.3.
Complex deferred expenses
308
308
424
0
0
20
BALANCE SHEET FULL VERSION (in CZK thousand)
Year ended 31. 12. 2014
Year ended 31. 12. 2013
TOTAL LIABILITIES & EQUITY
416 011
430 357
A.
Equity
182 854
170 290
A.I.
Share capital
111 150
111 150
A.I.1.
Share capital
111 150
111 150
A.II.
Capital funds
-9 487
-634
A.II.3.
Gains or losses from the revaluation of assets and liabilities
-9 487
-634
A.III.
Funds from profit
7 515
7 515
A.III.1.
Reserve fund
7 515
7 515
A.IV.
Retained earnings
52 260
54 597
A.IV.1.
Accumulated profits brought forward
52 260
54 597
A.V.1.
Profit or loss for the current period (+ -)
21 416
-2 338
B.
Liabilities
233 156
258 663
B.I.
Reserves
15 839
13 929
B.I.4.
Other reserves
15 839
13 929
B.II.
Long-term liabilities
12 892
17 792
B.II.9.
Other payables
B.II.10.
Deferred tax liability
12 892
15 729
B.III.
Short-term liabilities
85 345
93 797
B.III.1.
Trade payables
67 825
72 027
B.III.5.
Payables to employees
6 018
5 598
B.III.6.
Social security and health insurance payables
3 240
2 975
B.III.7.
State - tax payables and subsidies
4 257
493
B.III.8.
Short-term prepayments received
576
4 404
B.III.10.
Estimated payables
1 915
1 909
B.III.11.
Other payables
B.IV.
Bank loans and borrowings
B.IV.1.
Long-term bank loans
31 667
21 515
B.IV.2.
Short-term bank loans
87 413
111 630
2 063
1 514
6 391
119 080
133 145
C. I.
Other liabilities
1
1 404
C.I.1.
Accrued expenses
1
36
C.I.2.
Deferred income
1 368
Annual Report 2013
21
PROFIT AND LOSS ACCOUNT (in CZK thousand)
Year ended 31. 12. 2014
Year ended 31. 12. 2013
I.
Sales of goods
41 874
32 679
A.
Costs of goods sold
30 752
23 641
+
Gross margin
11 122
9 038
II.
Production
676 679
627 655
II.1.
Sales of own products and services
669 594
627 428
II.2.
Change in internally produced inventory
7 038
212
II.3.
Own work capitalised
47
15
B.
Purchased consumables and services
490 945
462 962
B.1.
Consumed material and energy
429 666
406 503
B.2.
Services
61 279
56 459
+
Added value
196 856
173 731
C.
Staff costs
130 358
122 774
C.1.
Payroll costs
95 784
90 057
C.3.
Social security and health insurance costs
31 469
29 876
C.4.
Social costs
3 105
2 841
D.
Taxes and charges
933
736
E.
Depreciation of intangible and tangible fixed assets
41 289
40 565
III.
Sales of fixed assets and material
11 776
12 362
III.1.
Sales of fixed assets
III.2.
Sales of material
F.
Net book value of fixed assets and material sold
F.1.
Net book value of sold fixed assets
F.2.
Book value of sold material
8 447
8 652
G.
Change in reserves and provisions relating to operating activities and complex deferred expenses
2 713
4 116
IV.
Other operating income
5 169
4 585
H.
Other operating expenses
2 565
2 774
442
1 355
11 334
11 007
8 447
9 232 580
*
Operating profit or loss
27 496
10 481
VII.
Income from non-current financial assets
3 875
3 273
VII.1.
Income from equity investments in subsidiaries and associates
3 875
3 273
IX.
Income from the revaluation of securities and derivates
6 939
L.
Costs of the revaluation of securities and derivates
X.
Interest income
N.
Interest expenses
2 408
2 635
XI.
Other financial income
5 012
10 682
O.
Other financial expenses
16 031
23 751
*
Financial profit or loss
-2 599
-14 727
Q.
Income tax on ordinary activities
3 481
-1 908
Q 1.
- due
6 318
2 474 14
178
Q 2.
- deferred
-2 837
-1 908
**
Profit or loss from ordinary activities
21 416
-2 338
***
Profit or loss for the current period (+/-)
21 416
-2 338
****
Profit or loss before tax
24 897
-4 246
22
STATEMENT OF CHANGES IN EQUITY (in CZK thousand)
Share capital
Capital funds
Funds from profit, reserve fund
Balance at 31 December 2012
222 300
162
5 207
Impact of demerger through spin off followed by merger
-111 150
Accumulated Accumulated Profit or profits losses loss for brought brought the current forward forward period 46 654 54 597
Distribution of profit or loss
2 333
Revaluation of financial investments
-796 -44 321
-44 321
-2 338
-2 338
54 597
-2 338
170 290
-2 338
2 338
-25 111 150
-634
7 515
Distribution of profit or loss Revaluation gains or losses on assets and upon transformations
-25
-8 853
-8 853
Profit or loss for the current period
21 416
Other Balance at 31 December 2014
-56 553
-796
Profit or loss for the current period Balance at 31 December 2013
1 111 150
-9 487
274 323
-2 333
Profit shares paid Payments from other funds
TOTAL EQUITY
7 515
52 260
21 416 1
21 416
182 854
Annual Report 2013
23
CASH FLOW STATEMENT (in CZK thousand)
P.
Opening balance of cash and cash equivalents
Year ended 31. 12. 2014
Year ended 31. 12. 2013
1 886
3 534
Impact of demerger through spin off followed by merger/Impact of merger
-186
Balance at 1 January 2013 post the demerger through spin off followed by merger
3 348
Cash flows from ordinary activities Z.
Profit or loss from ordinary activities before tax
24 897
-4 246
A.1.
Adjustments for non-cash transactions
35 532
46 901
A.1.1.
Depreciation of fixed assets
41 289
40 565
A.1.2.
Change in provisions and reserves
2 713
4 315
A.1.3.
Profit/(loss) on the sale of fixed assets
A.1.4.
Revenues from profit shares
-442
-775
-3 875
-3 273
A.1.5. A.1.6.
Interest expense and interest income
2 394
2 457
Adjustments for other non-cash transactions
-6 547
3 612
A.* A.2.
Net operating cash flow before changes in working capital
60 429
42 655
Change in working capital
-22 209
6 363
A.2.1.
Change in operating receivables and other assets
-9 058
-727
A.2.2.
Change in operating payables and other liabilities
-4 870
5 881
A.2.3.
Change in inventories
-8 281
1 209
A.**
Net cash flow from operations before tax and extraordinary items
38 220
49 018
A.3.
Interest paid
-2 427
-2 637
A.4.
Interest received
14
178
A.5.
Income tax paid from ordinary operations
A.7.
Received profit shares
A.***
Net operating cash flows
608
-6 290
3 875
3 273
40 290
43 542
-25 898
-24 993
442
1 355
-25 456
-21 344
-14 066
20 685
0
-44 345
Cash flows from investing activities B.1.
Fixed assets expenditures
B.2.
Proceeds from fixed assets sold
B.3.
Loans provided to related parties
B.***
Net investment cash flows
2 294
Cash flow from financial activities C.1.
Change in payables from financing
C.2.
Impact of changes in equity
C.2.5.
Payments from capital funds
C.2.6.
Profit shares paid
C.***
Net financial cash flows
F.
Net increase or decrease in cash and cash equivalents
R.
Closing balance of cash and cash equivalents
-24 -44 321 -14 066
-23 660
768
-1 462
2 654
1 886
24
Notes to the financial statements for the year ended 31 December 2014 TABLE OF CONTENTS
1. 1.1. 1.2. 1.3. 1.4. 1.5.
GENERAL INFORMATION Incorporation and Description of the Business Year-on-Year Changes and Amendments to the Register of Companies Organisational Structure Group Identification Board of Directors and Supervisory Board
26 26 26 27 27 27
2.
BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES
27
3. 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 3.8. 3.9. 3.9.1. 3.9.2. 3.9.3. 3.10. 3.11. 3.12. 3.13. 3.14. 3.15. 3.16.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Tangible Fixed Assets Intangible Fixed Assets Non-Current Financial Assets Inventory Receivables Trade Payables Loans Foreign Currency Translation Taxation Depreciation of Fixed Assets for Tax Purposes Current Tax Payable Deferred Tax Impairment Borrowing Costs Revenue Recognition Use of Estimates Cash Flow Statement Derivatives Changes in Accounting Policies
28 28 28 29 29 29 29 29 29 29 29 30 30 30 30 30 30 30 30 31
4. 4.1. 4.1.1. 4.1.2. 4.1.3. 4.2. 4.2.1. 4.3. 4.3.1.
ADDITIONAL INFORMATION ON THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT Fixed Assets Intangible Fixed Assets Tangible Fixed Assets Fixed Assets Pledged as Security Non-Current Financial Assets Equity Investments in Subsidiaries Receivables Aging of Trade Receivables
31 31 31 31 32 33 33 33 33
Annual Report 2013
25
4.3.2. 4.3.3. 4.3.4. 4.4. 4.4.1. 4.4.2. 4.4.3. 4.4.4. 4.5. 4.5.1. 4.5.2. 4.6. 4.6.1. 4.6.2. 4.6.3. 4.7. 4.8. 4.9. 4.9.1. 4.9.2. 4.10. 4.11. 4.12. 4.13. 4.14. 4.15. 4.16. 4.17.
Other Receivables Intercompany Receivables Tax Receivables Short-Term Payables Aging of Short-Term Trade Payables Intercompany Payables Tax Payables Other Payables Bank Loans Long-Term Bank Loans Short-Term Bank Loans Income Taxation Deferred Tax Tax Charge Due Payables Arising from Social Security and Health Insurance Contributions and Tax Arrears Reserves and Provisions Details of Income by Principal Activity Related Party Transactions Income Generated with Related Parties Purchases from Related Parties Consumed Purchases Services Costs, Income from the Sale of Material Other Operating Income Other Operating Expenses Other Financial Income Other Financial Expenses Research and Development Costs
33 34 34 34 34 34 34 34 35 35 35 35 35 36 36 36 36 36 36 37 37 37 38 38 38 38 38 38
5. 5.1. 5.2.
Employees, Management and Statutory Bodies Staff Costs and Number of Employees Loans, Borrowings, and Other Benefits Provided
39 39 39
6.
CONTINGENT LIABILITIES AND OFF BALANCE SHEET COMMITMENTS
40
7.
POST BALANCE SHEET EVENTS
40
26
1. GENERAL INFORMATION 1.1. Incorporation and Description of the Business Name of the company: LANEX a.s. Registered office: Bolatice, Hlučínská 96/1, 747 23 Places of business: Bolatice Corporate ID:
282 23 209
Legal status:
Joint Stock Company
Principal activities:
Production of textile goods (except for clothes and accessories) Production of textile fibres and fabrics
The financial statements are prepared as of 31 December 2014. The reporting period covers the calendar year from 1 January 2014 to 31 December 2014. Date of formation of the Company: 31 December 2007. The Company is recorded in the Register of Companies held by the Regional Court in Ostrava, File B, Insert 4191. The Company’s share capital amounts to CZK 111,150 thousand. Sole shareholder: Drandy s.r.o., Hlučínská 96/1, 747 23 Bolatice (03327761), 100% of the issued share capital of LANEX a.s. from 19 November 2014. KRASTION HOLDINGS LIMITED Nicosia, Republic of Cyprus (HE 210111), until 19 November 2014. 1.2. Year-on-Year Changes and Amendments to the Register of Companies On 6 March 2014, Messrs Jiří Hrdina, Martin Václavek and Guilherme Settanni, members of the Board of Directors, were removed from the Register of Companies. Their membership in the Board of Directors expired as of 31 December 2013. On 25 March 2014, the following change in the composition of the Supervisory Board was recorded in the Register of Companies: New member: Michal Aron Original member: Tereza Plášková As of 19 November 2014, the sole shareholder was changed. Since this date, LANEX a.s. has been controlled directly by the sole shareholder – Drandy s.r.o. This fact was recorded in the Register of Companies on 4 December 2014. On 4 December 2014, the following change in the composition of the Board of Directors was recorded in the Register of Companies: New members: Jaroslav Štěpař, Miroslav Stančík (members of the Board of Directors) Original members: Pavel Schiesser (Vice Chairman of the Board of Directors), Tomáš Lánský (member of the Board of Directors) On 4 December 2014, the following change in the composition of the Supervisory Board was recorded in the Register of Companies: New member: Rudolf Bochenek Original members: Brian Albert Wardrop, Karolina Procházková, Michal Aron
Annual Report 2013
27
1.3. Organisational Structure LANEX a.s. is managed by the Board of Directors and supervised by the Supervisory Board. Its organisational structure is divided into the following servicing central sections: Technical section HR section ■ Finance section ■ Controlling section ■ Quality Assurance section ■ Marketing section ■ ■
1.4. Group Identification The LANEX group includes LANEX a.s. with its subsidiaries LANEX Polska Sp. z o.o. and LANEX-KANAT O.O.O. Until 19 November 2014, SINGING ROCK s.r.o. was a fellow subsidiary. 1.5. Board of Directors and Supervisory Board Names and surnames of members of the statutory and supervisory bodies and their positions as of the balance sheet date: Board of Directors Rudolf Gregořica Chairman of the Board of Directors Jaroslav Štěpař Member of the Board of Directors Miroslav Stančík Member of the Board of Directors Supervisory Board Rudolf Bochenek Member of the Supervisory Board
2. BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES The Company’s accounting books and records are maintained and the financial statements were prepared in accordance with the Accounting Act 563/1991 Coll., as amended; the Regulation 500/2002 Coll. which provides implementation guidance on certain provisions of the Accounting Act for reporting entities that are businesses maintaining double-entry accounting records, as amended; and Czech Accounting Standards for Businesses, as amended. The accounting records are maintained in compliance with general accounting principles, specifically the historical cost valuation basis, the accruals principle, the prudence concept and the going concern assumption. The financial statements are general purpose financial statements and have not been prepared for any special purpose, transaction or user. Users should not rely exclusively on these financial statements in making decisions and should undertake other appropriate inquiries before making decisions. These financial statements are presented in thousands of Czech crowns (‘CZK thousand’).
28
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1. Tangible Fixed Assets Tangible fixed assets include assets with an estimated useful life greater than one year and an acquisition cost greater than CZK 40 thousand on an individual basis. The Company also accounts for low value fixed assets with the cost from CZK 20 thousand to CZK 40 thousand and the depreciation period of 24 months. Purchased tangible fixed assets are stated at cost less accumulated depreciation and any recognised impairment losses. Interest on loans for the acquisition of fixed assets is not included in the costs of the assets. Tangible fixed assets developed internally are valued at actual costs including direct costs and production overheads directly relating to the development of these assets. The following tangible fixed assets are stated at replacement cost: tangible fixed assets acquired through donation, tangible fixed assets acquired on the basis of a contract to purchase a leased asset (accounted for by a corresponding entry in the relevant accumulated depreciation account) and an investment of tangible fixed assets. The replacements cost is determined on the basis of an expert appraisal or a reasonable estimate, ie arm’s length price. The cost of fixed asset improvements exceeding CZK 40 thousand for the taxation period increases the acquisition cost of the related tangible fixed asset. Depreciation is charged so as to write off the cost of tangible fixed assets, other than land and assets under construction, over their estimated useful lives, using the straight line method on the following basis: Type of tangible fixed assets Buildings Manufacturing machinery - of which textile machinery with cost exceeding CZK 1 million Computer systems Vehicles – cars Vehicles - trucks Furniture and fixtures – furniture Furniture and fixtures – iron structures, racks
Depreciation method Straight line Straight line Straight line Straight line Straight line Straight line Straight line Straight line
Number of years 30 8 10 4 4 8 8 12
Assets held under finance leases are depreciated by the lessor. Assets held under finance leases are depreciated by the lessor. Tangible fixed assets with the subsequent purchase of leased asset are not depreciated if the costs relating to their acquisition do not exceed CZK 40 thousand. Technical improvements on leasehold tangible fixed assets are depreciated on a straight line basis over the estimated useful life. Assets held under an agreement to lease a business or part thereof are depreciated by the Company as the lessee on a contractual basis. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the net book value of the asset at the sale date and is recognised through the profit and loss account. As of 31 December 2014, a provision against tangible fixed assets in the amount of CZK 500 thousand was recognised. 3.2. Intangible Fixed Assets Intangible fixed assets include assets with an estimated useful life greater than one year and an acquisition cost greater than CZK 60 thousand, on an individual basis. Purchased intangible fixed assets are stated at cost less accumulated amortisation and any recognised impairment losses. The cost of fixed asset improvements exceeding CZK 40 thousand for the taxation period increases the acquisition cost of the related intangible fixed asset. Amortisation of intangible fixed assets is recorded on a straight line basis over their estimated useful lives as follows: Type of intangible fixed assets Software Valuable rights
Depreciation method Straight line Straight line
Provisions were not recognised against intangible fixed assets.
Number of years 4 4
Annual Report 2013
29
3.3. Non-Current Financial Assets Non-current financial assets include equity investment in subsidiaries. These assets are carried at cost upon acquisition. As of the balance sheet date, the value of non-current financial assets is translated using the Czech National Bank’s exchange rate as of 31 December of the relevant year. Unrealised gains and losses are recognised as a standalone part of equity if the impairment is not permanent. As of the financial statements date, equity investments are stated at cost net of provisions. 3.4. Inventory Purchased inventory is valued at acquisition costs. The acquisition cost includes the purchase cost and indirect acquisition costs such as transport costs, postal fees, packaging, customs, and commissions. Purchased inventory of material and goods in stock is carried at average costs determined as the weighted arithmetic average of the costs that is calculated upon each addition to inventory, no less than once in a month. Internally developed inventory is valued at the cost of producing the inventory on the basis of planned costings according to a determined costing formula, ie direct costs of production (material and labour) and an element of indirect costs (production overheads) that relate to the production. Shipments of finished products and semi-finished products out of stock are accounted for using the fixed (standard) stock prices. Provisions are recognised when impairment of inventory in the accounting records is not permanent, based on an aging analysis of inventory. Inventory with the last receipt in 2013 and older was provided for at 50%. Full provisions are made on the basis of an individual assessment. 3.5. Receivables Upon origination, receivables are stated at their nominal value as subsequently reduced by appropriate provisions for doubtful and bad amounts. Receivables being recovered through courts or registered for recovery under bankruptcy proceedings are provisioned in full. Receivables past their due dates by more than 180 days are provisioned in full. Based on an individual assessment, provisions are also recognised against receivables that are less time past their due dates if the Company considers there is a risk of the receivables not being repaid in full. As of the balance sheet date, the value of receivables denominated in foreign currencies is translated using the Czech National Bank’s foreign currency rate as of 31 December of the particular year. 3.6. Trade Payables Trade payables are stated at their nominal value. As of the balance sheet date, the value of payables denominated in foreign currencies is translated using the Czech National Bank’s exchange rate ruling as of 31 December of the particular year. 3.7. Loans Loans are stated at their nominal value. The portion of long-term loans maturing within one year from the balance sheet date is included in short-term loans. Interest on loans is accrued and included in the profit or loss for the period. As of the balance sheet date, loans denominated in foreign currencies are translated using the Czech National Bank’s exchange rate ruling as of 31 December of the particular year. 3.8. Foreign Currency Translation Transactions denominated in foreign currencies during the year are translated using the exchange rate of the Czech National Bank prevailing on the date of the transaction. At the balance sheet date, the relevant assets and liabilities are translated at the Czech National Bank’s exchange rate prevailing as of that date. 3.9. Taxation 3.9.1. Depreciation of Fixed Assets for Tax Purposes The Company calculates depreciation for tax purposes using the straight line method – for tangible fixed assets with the cost under CZK 100 thousand and using the accelerated method – for tangible fixed assets with the cost exceeding CZK 100 thousand. Low value tangible fixed assets with the cost below CZK 40 thousand are not depreciated for tax purposes.
30
3.9.2. Current Tax Payable Management of the Company has recognised a tax payable and a tax charge based on its tax calculation which follows from its understanding of the interpretation of Czech tax legislation valid at the financial statements date and believes that the amount of tax is correct in compliance with the effective Czech tax regulations. Since various interpretations of tax laws and regulations by third parties, including state administrative bodies, exist, the income tax payable reported in the Company’s financial statements may change based on the ultimate opinion of the tax authorities. 3.9.3. Deferred Tax Deferred tax is accounted for using the balance sheet liability method. Deferred tax is recorded in the profit and loss account. Deferred tax assets and liabilities are offset and reported on an aggregate net basis in the balance sheet, except when partial tax assets cannot be offset against partial tax liabilities. 3.10. Impairment At each balance sheet date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 3.11. Borrowing Costs Borrowing costs arising from loans (interest) attributable to the acquisition, construction or production of fixed assets are recognised in the profit or loss in the period in which they are incurred. 3.12. Revenue Recognition Revenue is measured at the value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and value added tax. Sales of goods are recognised when goods are delivered and title has passed. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established. 3.13. Use of Estimates The presentation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Management of the Company has made these estimates and assumptions on the basis of all the relevant information available to it. Nevertheless, pursuant to the nature of estimates, the actual results and outcomes in the future may differ from these estimates. 3.14. Cash Flow Statement The cash flow statement is prepared using the indirect method. Cash equivalents include current liquid assets easily convertible into cash in an amount agreed in advance. Cash and cash equivalents can be analysed as follows: (CZK ‘000) Cash on hand and cash in transit Cash at bank Total cash and cash equivalents
At 31 Dec 2014 271 2 383 2 654
At 31 Dec 2013 299 1 587 1 886
Cash flows from operating, investment and financial activities presented in the cash flow statement are not offset. 3.15. Derivatives The Company hedges the future value of exports in EUR using closed derivatives – option strategies. As of the date of the cash settlement of the derivative, the realised profit or incurred loss are recognised and off-balance sheet entries are reversed. All derivatives realised before 31 December 2014 were included in financial income and expenses for the taxation period. The fair value of open unrealised derivatives for 2015 based on the valuation performed by banks as of 31 December 2014 represents a negative amount of CZK 1,514 thousand (a negative amount as of 31 December 2013: CZK 8,454 thousand) and is reported as part
Annual Report 2013
31
of other short-term payables of CZK 1,514 thousand (CZK 6,391 thousand as of 31 December 2013) and other long-term payable of CZK 0 thousand (CZK 2,063 thousand). Given that these derivatives do not comply with the criteria for hedge accounting (they do not comply with the condition of high effectiveness to be within a range of 80% to 125%), these derivatives were classified as derivatives for trading and a change in the future value as compared with their valuation as of 31 December 2013 is recognised in the profit or loss for the period (ie the change in the value of open derivative positions in 2014 as compared to 2013 represents income of CZK 6,939 thousand). 3.16. Changes in Accounting Policies There were no changes in accounting policies in the reporting period.
4. ADDITIONAL INFORMATION ON THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 4.1. Fixed Assets 4.1.1. Intangible Fixed Assets Acquisition Cost (CZK ‘000)
Software Valuable rights Total
Balance at 1 Jan 2013 39 713 1 348 41 061
Additions
Disposals
2 048 0 2 048
1 270 0 1 270
Balance at 1 Jan 2013 24 684 1 294 25 978
Additions
Disposals
9 283 28 9 311
1 270 0 1 270
Balance at 31 Dec 2013 7 794 26 7 820
Balance at 31 Dec 2014 119 144 263
Balance at 31 Dec 2013 40 491 1 348 41 839
Additions
Disposals
599 147 746
586 75 661
Balance at 31 Dec 2013 32 697 1 322 34 019
Additions
Disposals
8 274 29 8 303
586 75 661
Balance at 31 Dec 2014 40 504 1 420 41 924
Accumulated Amortisation (CZK ‘000)
Software Valuable rights Total
Balance at 31 Dec 2014 40 385 1 276 41 661
Net Book Value (CZK ‘000)
Software Valuable rights Total
In the year ended 31 December 2014, the Company acquired intangible assets directly charged to expenses in the amount of CZK 114 thousand (2013: CZK 68 thousand). Major additions to intangible assets include the technical improvement of SAP in the amount of CZK 599 thousand. Major disposals of CZK 163 thousand include the disposal of the attendance software and the archiving software in the amount of CZK 129 thousand. 4.1.2. Tangible Fixed Assets Acquisition Cost (CZK ‘000)
Land Buildings Individual tangible movable assets Tangible fixed assets under construction Prepayments for tangible fixed assets Total
Balance at 1 Jan 2013 1 014 189 143 477 479 6 047 263 673 946
Additions
Disposals
Balance at 31 Dec 2013
Additions
Disposals
Balance at 31 Dec 2014
0 9 917 13 560 27 480 23 984
9 1 158 3 104 6 047 263 10 581
1 005 197 902 487 935 27 480 687 349
6 500 1 586 13 570 0 250 21 906
0 212 5 221 27 480 5 940
7 505 199 276 496 284 0 250 703 315
32
Accumulated Depreciation (CZK ‘000)
Land Individual tangible movable assets Total
Balance at 1 Jan 2013 76 069 369 585 445 654
Additions
Disposals
6 770 25 081 31 851
1 158 3 104 4 262
Balance at 31 Dec 2013 81 681 391 562 473 243
Additions
Disposals
6 616 26 368 32 984
212 5 221 5 433
Balance at 31 Dec 2014 88 085 412 709 500 794
Provisioning Charge (CZK ‘000)
Individual tangible movable assets Total
Balance at 1 Jan 2013 0 0
Additions
Disposals
0 0
0 0
Balance at 31 Dec 2013 0 0
Additions
Disposals
500 500
0 0
Balance at 31 Dec 2014 500 500
Net Book Value (CZK ‘000)
Land Buildings Individual tangible movable assets Tangible fixed assets under construction Prepayments for tangible fixed assets Total
Balance at 31 Dec 2013 1 005 116 221 96 373
Balance at 31 Dec 2014 7 505 111 191 83 075
27 480 214 106
0 250 202 021
In the year ended 31 December 2014, the Company acquired tangible assets charged directly to expenses in the amount of CZK 1,194 thousand (2013: CZK 1,260 thousand). The most significant additions to individual movable assets include the technical improvements of the warehouse of finished products in the amount of CZK 673 thousand, technical improvements of production halls of CZK 630 thousand and technical improvements of the administrative building in the amount of CZK 215 thousand. Major additions to individual tangible movable assets included the acquisition of four new LINDE forklifts in the amount of CZK 2,951 thousand, two FRIMAL uptwister machines of CZK 2,987 thousand, four RATERA knitting machines of CZK 1,031 thousand and two HERZOG knitting machines of CZK 1,616 thousand. 4.1.3. Fixed Assets Pledged as Security Fixed assets pledged as security serve as collateral underlying receivables arising from the Credit Line Contract of 19 November 2014 up to the amount of CZK 150 million, concluded between Česká spořitelna, a.s. and LANEX a.s. Real Estate Based on the Contract for the Pledge of Real Estate of 19 November 2014, concluded between Česká spořitelna, a.s., as the pledger, and LANEX a.s., as the pledgee, real estate registered at the real estate register of the Cadastral Office for the Moravian-Silesian region based at Opava – cadastral site Opava, for the cadastral area of Bolatice, title deed no. 425, was pledged, as well as real estate registered at the real estate register of the Cadastral Office for the Olomouc region based at Olomouc – cadastral site Olomouc, for the cadastral area of Stará Libavá on ownership deed no. 33. The total net book value of pledged real estate as of 31 December 2014 is CZK 111,191 thousand – buildings (2013: CZK 115,994 thousand) and CZK 7,505 thousand – land (2013: CZK 1,005 thousand).
Annual Report 2013
33
Movable Assets Based on notarial deed NZ 1097/2014 dated 26 November 2014, a pledge contract is concluded between Česká spořitelna, a.s. as the pledger and LANEX, a.s. as the pledgee, establishing the pledge of a set of movable assets stated in the notarial deed. The net book value of the set of movable assets is CZK 70,449 thousand as of 31 December 2014 (as of 31 December 2013, the net book value of the pledged assets was CZK 14,739 thousand). Receivables Based on the Contract for the Pledge of Trade Receivables of 26 November 2014, concluded between Česká spořitelna, a.s. as the pledger and LANEX, a.s. as the pledgee, a pledge is established for trade receivables as collateral for the Credit Line Contact of 19 November 2014. Based on the Contract for the Pledge of Bank Account Receivables of 26 November 2014, concluded between Česká spořitelna, a.s. as the pledger and LANEX, a.s. as the pledgee, a pledge is established for bank account receivables as collateral for the Credit Line Contact of 19 November 2014. Inventory Based on notarial deed NZ 1097/2014 dated 26 November 2014, a pledge contract is concluded between Česká spořitelna, a.s. as the pledger and LANEX, a.s. as the pledgee, establishing the pledge of inventories of raw material, semi-finished goods, finished products and goods owned by the pledgee and stored at the pledgee’s registered office or at any other warehouse where inventories owned by the pledgee are stored.
4.2. Non-Current Financial Assets 4.2.1. Equity Investments in Subsidiaries (CZK ‘000) Ownership percentage LANEX Polska Sp. z o.o. Dabrowa Gornicza LANEX – KANAT o.o.o. OREL, Russian Federation Total
100 %
Amount of the investment at 31 Dec 2014 973
Amount of the investment at 31 Dec 2013 990
Equity
Profit or loss
Dividend income
7 602
3 910
3 875
15 983 16 956
24 819 25 809
23 037
-131
0
66 %
These non-current financial assets were not and are not pledged. The information on LANEX Polska and LANEX-KANAT is reported based on the unaudited financial statements. 4.3. Receivables 4.3.1. Aging of Trade Receivables (CZK ‘000) Year
2014
2013
Category
Gross Provisions Net Gross Provisions Net
Before due date 75 775 0 75 775 70 560 0 70 560
0 – 90 days 12 993 -24 12 969 11 420 0 11 420
91 – 180 days 4 491 -831 3 660 109 0 109
Past due date 181 – 360 days 102 0 102 316 -316 0
1–2 years 130 -130 0 96 -96 0
2 years and more 2 752 -2 752 0 3 065 -3 065 0
Total past due
Total
20 468 -3 737 16 731 15 006 -3 477 11 529
96 243 -3 737 92 506 85 566 -3 477 82 089
4.3.2. Other Receivables Other short-term receivables in the amount of CZK 1,540 thousand as of 31 December 2014 predominantly include the value added tax to invoices that LANEX a.s. received in January 2015, however their taxable supply belongs to 2014 (2013: receivables of CZK 1,558 thousand).
34
4.3.3. Intercompany Receivables Short-Term Trade Receivables (CZK ‘000) Name of the entity LANEX Polska LANEX-KANAT SINGING ROCK* Total short-term intercompany receivables Other than intercompany receivables Total short-term trade receivables
Balance at 31 Dec 2014 7 667 4 287 11 954 80 552 92 506
Balance at 31 Dec 2013 6 191 3 653 3 294 13 138 68 951 82 089
*Singing Rock s.r.o. is no longer part of the Group as of 31 December 2014 4.3.4. Tax Receivables As of 31 December 2014, tax receivables include a receivable arising from an excessive VAT deduction of CZK 3,461 thousand. As of 31 December 2013, the Company recorded a tax receivable arising from an excessive VAT deduction in the amount of CZK 5,471 and a receivable arising from a corporate income tax overpayment of CZK 3,263 thousand. 4.4. Short-Term Payables 4.4.1. Aging of Short-Term Trade Payables (CZK ‘000) Year
2014 2013
Category
Short-term Short-term
Before due date 65 748 66 947
0 – 90 days 1 977 5 080
91 – 180 days 100 0
Past due date 181 – 360 days 0 0
1–2 years 0 0
2 years and more years 0 0
Total past due
Total
2 077 5 080
67 825 72 027
4.4.2. Intercompany Payables Short-Term Trade Payables (CZK ‘000) Name of the entity LANEX Polska SINGING ROCK* Total short-term intercompany payables Other than intercompany payables Total short-term trade payables
Balance at 31 Dec 2014 543 0 543 67 282 67 825
Balance at 31 Dec 2013 605 463 1 068 70 959 72 027
*Singing Rock s.r.o. is no longer part of the Group as of 31 December 2014 4.4.3. Tax Payables As of 31 December 2014, the Company primarily reports a tax payable arising from corporate income tax in the amount of CZK 3,663 thousand (2013: CZK 3,263 thousand). 4.4.4. Other Payables As of 31 December 2014, other short-term payables of CZK 1,514 thousand represent a short-term portion of the fair value of unrealised derivatives as of that date (the long-term portion is reported in other long-term payables of CZK 0 thousand). As of 31 December 2013, the Company reported a short-term portion of the fair value of unrealised derivatives of CZK 6,391 thousand. The long-term portion was reported in other long-term payables in the amount of CZK 2,063 thousand.
Annual Report 2013
35
4.5. Bank Loans 4.5.1. Long-Term Bank Loans (CZK ‘000) Bank/ Creditor
Currency
ČSOB – machinery SIMA ČSOB – machinery Austrof. ČSOB - acquisition ČSOB – investment UniCredit - acquisition ČS – refinancing loan
EUR CZK CZK CZK CZK CZK
Balance at 31 Dec 2014 0 0 0 0 0 38 333
Balance at 31 Dec 2013 6 485 12 988 8 900 13 180 2 493 0
Interest rate 2014
Form of collateral in 2014
3 month EURIB+1.9% 3 month PRIB+1.65% 3 month PRIB+1.9% 3 month PRIB+15% 3 month PRIB+1.6% 3 month PRIB +1.5%
Real estate, receivables Real estate, movable assets Real estate, receivables Real estate, receivables Real estate, bill of exchange Real estate, movable assets, inventory, receivables, bill of exchange, pledged equity interests, pledge of shares
Total Of which repayable within 1 year Total long-term loans
38 333 6 666 31 667
44 046 22 531 21 515
Repayment Schedule of Long-Term Loans (CZK ‘000) Bank/creditor ČS – refinancing loan Total
2015 6 666 6 666
2016 6 667 6 667
2017 6 667 6 667
2018 6 667 6 667
Other 11 666 11 666
Total 38 333 38 333
As of 31 December 2014, the portion of loans repayable within one year in the aggregate amount of CZK 6,666 thousand is reported as part of short-term bank loans in accordance with applicable accounting regulations (as of 31 December 2013: CZK 22,531 thousand). Bank loans carry certain contractual terms and conditions, the breach of which may result in the loan being immediately called for repayment. As of 31 December 2014, the Company meets these loan covenants. 4.5.2. Short-Term Bank Loans (CZK ‘000) Bank/ Creditor
Currency
ČSOB revolving ČSOB overdraft UniCredit overdraft UNICREDIT overdraft UNICREDIT revolving. ČS overdraft
CZK USD EUR CZK CZK CZK
ČS revolving
CZK
Total Repayments of long-term loans within 1 year Total
Balance Balance at 31 Dec at 31 Dec 2014 2013 0 57 000 0 0 0 521 0 9 578 0 22 000 10 747 0 70 000
0
80 747 6 666 87 413
89 099 22 531 111 630
Interest rate 2014
Form of collateral in 2014
1 month PRIB+1,2% O/N LIB+1,45% 1 week EURRIB+1,25% 1 week PRIB+1,25% 1 month PRIB+1,25% 1 month PRIB +1,15% 1 month PRIB +1,15%
Real estate, inventory and receivables Real estate, inventory and receivables Real estate, inventory and receivables Real estate, inventory and receivables Real estate, inventory and receivables Real estate, movable assets, receivables, inventory, bill of exchange Real estate, movable assets, receivables, inventory, bill of exchange pledged equity interests, pledge of shares
4.6. Income Taxation 4.6.1. Deferred Tax The balance of deferred tax is analysed as follows: (CZK ‘000) From non-tax deductible provisions and reserves From the difference between the tax carrying amount and accounting carrying amount of fixed assets Total deferred tax liability
Balance at 31 Dec 2014 3 334 -16 226
Balance at 31 Dec 2013 2 789 -18 518
-12 892
-15 729
36
4.6.2. Tax Charge The charge for the years 2014 and 2013 can be reconciled to the profit per the profit and loss account as follows: (CZK ‘000) Balance at 31 Dec 2014 24 897 12 942 37 839 -3 948 19% -121 6 318
Profit before tax Tax effect of expenses/income that are not allowable in determining taxable profit Tax base Utilisation of research and development costs Income tax rate Tax relief Current tax payable
Balance at 31 Dec 2013 -4 246 9 112 4 866 -4 866 19% 0 0
4.6.3. Due Payables Arising from Social Security and Health Insurance Contributions and Tax Arrears The balances of due payables arising from social security contributions and contributions to the State employment policy were CZK 2,237 thousand and CZK 2,051 thousand as of 31 December 2014 and 31 December 2013, respectively. The balances of due payables arising from public health insurance contributions were CZK 1,003 thousand and CZK 924 thousand as of 31 December 2014 and 31 December 2013, respectively. The Company records no payables arising from social security and health insurance past their due dates. The Company does not report tax arrears to the relevant taxation authorities. 4.7. Reserves and Provisions (CZK ‘000)
Other reserves Provisions against inventory Provision against fixed assets Provisions against receivables Total
Balance at 1 Jan 2013 9 764 225 0 3 298 13 287
Charge for reserves 8 879 197 0 203 9 279
Use of reserves 4 714 225 0 24 4 963
Balance at 31 Dec 2013 13 929 197 0 3 477 17 603
Charge for reserves 20 108 239 500 1 005 21 852
Use of reserves 18 198 197 0 745 19 140
Balance at 31 Dec 2014 15 839 239 500 3 737 20 315
Other reserves include reserves for outstanding vacation days, an additional payment of salaries linked to the amount of the profit or loss of the year ended 31 December 2014 and an estimate of potential costs of legal disputes. 4.8. Details of Income by Principal Activity (CZK ‘000)
Sales of goods Sales of own products Sales of services Total income
Year ended 31 Dec 2014 In-country Cross-border 16 228 25 646 164 346 492 682 8 680 3 886 189 254 522 214
Total 41 874 657 028 12 566 711 468
Year ended 31 Dec 2013 In-country Cross-border 11 880 20 799 100 041 512 494 12 663 2 230 124 584 535 523
Total 32 679 612 535 14 893 660 107
4.9. Related Party Transactions 4.9.1. Income Generated with Related Parties 2014 (CZK ‘000) Entity LANEX Poland LANEX KANAT SINGING ROCK* Total
Relation to the Company Subsidiary Subsidiary Fellow subsidiary
Goods
Products
Material
Services
1 840 1 950 2 3 792
26 387 10 075 11 557 48 019
15 2 266 73 2 354
48 0 3 182 3 230
*Period from 1 January to 18 November 2014
Operating income 740 0 11 751
Financial income 3 875 0 0 3 875
Total 32 905 14 291 14 825 62 021
Annual Report 2013
37
2013 (CZK ‘000) Entity LANEX Poland Q-FLEX LANEX KANAT SINGING ROCK Total
Relation to the Company Subsidiary Subsidiary Subsidiary Fellow subsidiary
Goods
Products
Material
Services
222 0 6 729 2 690 9 641
19 921 0 6 951 10 839 37 711
7 0 2 243 11 2 261
17 0 0 3 438 3 455
Operating income 782 0 0 35 817
Financial income 3 273 1 773 177 2 5 225
Total 24 222 1 773 16 100 17 015 59 110
4.9.2. Purchases from Related Parties 2014 (CZK ‘000) Entity LANEX Poland LANEX KANAT SINGING ROCK* Total
Relation to the Company Subsidiary Subsidiary Fellow subsidiary
Goods
Products
Services
Material
462 0 133 595
0 5 665 3 395 9 060
6 0 2 8
0 0 85 85
Goods
Products
Services
Material
437 0 1 386 1 823
0 0 2 580 2 580
5 0 14 19
0 0 180 180
Financial expenses 0 0 0 0
Total 468 5 665 3 615 9 748
*Period from 1 January to 18 November 2014 2013 (CZK ‘000) Entity LANEX Poland Q-FLEX SINGING ROCK Total
Relation to the Company Subsidiary Subsidiary Fellow subsidiary
Financial expenses 0 380 0 380
Total 442 380 4 160 4 982
4.10. Consumed Purchases (CZK ‘000) Consumed material Consumed energy Total consumed purchases
Year ended 31 Dec 2014 401 012 28 654 429 666
Year ended 31 Dec 2013 373 302 33 201 406 503
Year ended 31 Dec 2014 7 227 4 006 585 1 441 511 20 645 3 953 4 176 1 645 4 368 783 728 2 669 1 131 2 875 4 536 61 279
Year ended 31 Dec 2013 8 239 4 266 628 1 734 547 17 439 3 654 3 800 1 517 3 593 783 805 1 441 640 2 896 4 477 56 459
4.11. Services (CZK ‘000) Repairs and maintenance Travel charges Representation costs Telephone, fax, internet Rental Transportation charges Commissions Cooperation Security of the building Exhibitions, conferences, promotion costs Advertising Certification, ISO Legal services Personnel services, advisory, training SW/HW maintenance Other services including audit Total
38
4.12. Costs, Income from the Sale of Material Costs and income from the sale of material predominantly include sales of pallets and waste material. 4.13. Other Operating Income (CZK ‘000) Received rental Insurance proceeds and damage compensation Grants Sundry operating income Total
Year ended 31 Dec 2014 3 129 383 667 990 5 169
Year ended 31 Dec 2013 3 058 326 32 1 169 4 585
4.14. Other Operating Expenses (CZK ‘000) Donations Other penalties and fines Write-off of receivables and transferred receivables Insurance of assets Deficits and damage relating to operating activities Sundry operating expenses Total
Year ended 31 Dec 2014 60 1 392 1 454 44 614 2 565
Year ended 31 Dec 2013 250 3 758 1 475 9 279 2 774
4.15. Other Financial Income (CZK ‘000) Foreign exchange rate gains Proceeds from the liquidation of the subsidiary Q-FLEX Total
Year ended 31 Dec 2014 5 012 0 5 012
Year ended 31 Dec 2013 8 909 1 773 10 682
Year ended 31 Dec 2014 5 025 1 272 9 734 0 16 031
Year ended 31 Dec 2013 8 912 1 435 13 024 380 23 751
4.16 Other Financial Expenses (CZK ‘000) Foreign exchange rate losses Banking fees Expenses of derivative transactions The costs of the liquidation of the subsidiary Q-FLEX Total
4.17. Research and Development Costs The Company has its own research and development centre. Each year, it approves research and development projects that cover the development of new products or improvement of technical properties already developed and produced. The research and development costs of LANEX a.s. in the years ended 31 December 2014 and 2013 amounted to CZK 3,948 thousand and CZK 4,866 thousand, respectively. These costs are treated as an item deductible from the tax base. In the year ended 31 December 2014, a total of CZK 3,948 thousand (2013: CZK 4,866 thousand) was claimed as a tax-deductible item.
Annual Report 2013
39
5. EMPLOYEES, MANAGEMENT AND STATUTORY BODIES 5.1. Staff Costs and Number of Employees The following table summarises the average number of the Company’s employees and managers for the years ended 31 December 2014 and 31 December 2013: 2014 (CZK ‘000)
Staff Managers Total
Number
Payroll costs
356 9 365
86 209 9 575 95 784
Number
Payroll costs
354 7 361
80 037 10 020 90 057
Social security and health insurance 28 200 3 269 31 469
Other expenses 3 030 75 3 105
Total staff costs 117 439 12 919 130 358
Social security and health insurance 26 855 3 021 29 876
Other expenses 2 788 53 2 841
Total staff costs 109 680 13 094 122 774
2013 (CZK ‘000)
Staff Managers Total
The number of employees is based on the average recalculated headcount. The category of ‘managers’ includes management (sectional directors). 5.2. Loans, Borrowings, and Other Benefits Provided During the years ended 31 December 2014 and 2013, the members of the Company’s Board of Directors, Supervisory Board and management received the following contributions and bonuses in addition to their basic salary: 2014 (CZK ‘000)
Pension insurance contributions Bonuses Cars to be used for private purposes (the figure increases the tax base of employees)
Board of Directors 0 0 0
Supervisory Board 0 0 0
Managers
Board of Directors 0 0 0
Supervisory Board 4 0 0
Managers
110 0 42
2013 (CZK ‘000)
Pension insurance contributions Bonuses Cars to be used for private purposes (the figure increases the tax base of employees)
87 0 15
40
6. CONTINGENT LIABILITIES AND OFF BALANCE SHEET COMMITMENTS Third Party Guarantees The Company provided guarantees for loans to its subsidiaries LANEX Polska in the amount of PLN 1,000 thousand (CZK 6,492 thousand). In addition, the Company provided a guarantee of EUR 30 thousand (ie CZK 832 thousand) to AUSTROMAR, obchodní a dopravní spol. s r.o., Prague until 4 November 2015 due to lost documents. Československá obchodní banka, a.s. Prague provides a guarantee of up to CZK 200 thousand to the Customs Directorate Ostrava for Other than transit operations (global guarantee). Environmental Liabilities As of 31 December 2014, there was no environmental audit of the Company. The Company’s management is not aware of any contingent liabilities pertaining to damage caused by prior activities or liabilities related to the prevention of potential future damage. Legal Disputes With respect to legal disputes in which the Company acts as a defendant, the Company recognised a reserve of CZK 9,263 thousand for the associated costs in the year ended 31 December 2014. Off-Balance Sheet Records The Company accounts for the following items in its off-balance sheet records: Low value tangible assets with the acquisition cost from CZK 1 thousand to CZK 20 thousand; Low value intangible assets from CZK 5 thousand to CZK 60 thousand; ■ Assets acquired under finance and operating leases; ■ Statute-barred receivables and dividends; ■ Concluded option strategies to hedge the exchange rate; and ■ Provided guarantees for loans. ■ ■
7. POST BALANCE SHEET EVENTS The statutory bodies of LANEX a.s. and Drandy s.r.o. are working to prepare a project of merger by amalgamation which will result in LANEX a.s. being dissolved and its net assets being transferred to Drandy s.r.o. The merger effective date has been determined at 1 January 2015. No other events occurred subsequent to the balance sheet date that would have a material impact on the financial statements.
Annual Report 2013
41
LANEX a.s. Hlučínská 96/1, 747 23 Bolatice, Czech Republic Phone: +420 553 751 111 Fax: +420 553 654 125 E-mail:
[email protected] www.lanex.cz
