the big bang division

ANNUAL REPORT
2012
1
2
Annual Report of Merkur, d. d.,
and Consolidated Annual Report
of the Merkur Group for 2012
3
T
R
O
P
E
R
S
S
E
BUSIN
FINANC
IAL REP
ORT
CO MPAN IES
4
INTRODUCTION
Contents
INTRODUCTION6
Operating Highlights
9
Report of the Chairman of the Management Board
10
Management Board’s Statement of Accountability
11
Report of the Supervisory Board
12
Merkur Group’s Strategic Policies
14
Strategic Policies of the MERKUR DIVISION
15
Strategic Policies of the MERSTEEL DIVISION
18
Strategic Policies of the BIG BANG DIVISION
20
Statement on the Management
28
Ownership Structure
31
Significant Events of the Merkur Group in 2012
34
Significant Achievements of the Merkur Group After the Balance Sheet Date 35
Risk Management
36
BUSINESS REPORT OF MERKUR, D. D., AND THE MERKUR GROUP
40
FINANCIAL REPORT FOR 2012 52
Audited Financial Statements of MERKUR, d. d., and the Audited Consolidated
Financial Statements of the MERKUR GROUP
53
Notes to the Audited Financial Statements of MERKUR, d. d., and to the
Audited Consolidated Financial Statements of the MERKUR GROUP
60
Statement of Management Responsibility
130
Auditor’s Report
131
COMPANIES IN THE MERKUR GROUP
138
5
INTRODUCTION
Merkur Group
The Merkur Group is an international group of retail companies. It comprises the Merkur, Mersteel and Big Bang divisions
with a total of 18 companies in 8 countries, Merkur and Big Bang retail centres, franchise stores, two online stores and the
modern wholesale Mersteel steel service centres and a production facility for the manufacture of welded pipes and girders
for dry construction. The common denominator of all the companies is the range of top-quality technical products and
services offered.
The company was founded in 1896 and became the internationally successful Merkur Group with more than 3,000
employees.
The Group is the leading Slovenian provider of quality products for home, do-it-yourself (DIY) products, electrical
installation, metal and construction materials, as well as technical products for professionals, and it keeps developing and
strengthening its Merkur, Mersteel, and Big Bang brands on neighbouring foreign markets. It aims to surpass its customers’
expectations by offering a range of additional services.
Half of Merkur Groups sales’ revenue comes from wholesale, whereas consumers know the company best for our modern,
well-stocked, and user-friendly sales centres.
The goal for all companies of the Merkur Group is to continue growing while at the same time not losing touch with its
main mission: creating customer satisfaction, business partners, and employees.
The Merkur Group consists of three divisions:
The Merkur Division is the largest seller of products for home, garden and
workshops, for end users, companies and craftsmen.
The Mersteel Division has a dominating market share in the field of supply and
sale of metal products and services in the steel service centres.
The Big Bang Division is the leading specialist for audio, video and computer
products, telecommunications, home appliances, music and games.
The Merkur Division
The Merkur Division comprises the parent company Merkur, d. d., and 11 other companies in five countries. Their core
activity is selling products for home improvement and for skilled craftsmen.
The company is well recognized through its wide network of retail centres (24 in Slovenia, five in Croatia, three in Serbia and
one in Bosnia and Herzegovina). Their main advantage is their concept for the successful sale of products for construction,
renovation and maintenance, as well as entertainment, comfort and high-quality living in one place. Such challenging sales
concept is also integrated in 15 franchise stores in Slovenia, one in Bosnia and Herzegovina, and the online store at: www.
merkur.si.
6
• Big Bang, d. o. o., Ljubljana
• Big Bang, d. o. o., Beograd
(in compulsory settlement proceedings since 10 May 2012)
• Železokrivnica SCT - Merkur, d. o. o., Ljubljana (in bankruptcy proceedings since 14 March 2011)
ng, d. o. o.,
Ba
bljana
Lju
Big
Mer
ku
. d., Naklo
,r d
• Merkur Hrvatska Zagreb, d. o. o.:
• Merkur Nekretnine Zagreb, d. o. o.
• Merkur Projekt Zagreb, d. o. o.
• Mirakul Gradnje Zagreb, d. o. o.
• Merkur International Beograd, d. o. o.:
• Mikos Gradnje Beograd, d. o. o.
• Validus Kapital Beograd, d. o. o.
• Intermerkur Nova, d. o. o., Sarajevo
• Merkur Čelik, d. o. o., Beograd
• Merkur, d. o. o., Črna Gora
• Perles Merkur Italia, s.r.l. SION
I
V
I
NG D
A
B
BIG
THE
I
IV
RD
KU
ER
EM
ISION
V
I
D
L
STEE
R
E
M
THE
l, d. o. o. N
a
tee
klo
• Mersteel, d. o. o., Naklo
• Mersteel, d. o. o., Beograd • Mersteel Profil doo, Beograd • Mersteel, d. o. o., Hrvaška • Mersteel, d. o. o., Sarajevo
• Merkur Makedonija, doo, Skopje
• Merkur – MI Handels, GmbH
Merkur, d. d., is 100% owner of
all its subsidiaries, except for
Merkur Makedonija, where it has
a 99.27% ownership stake. In
2012, no changes occurred in the
composition of the Group.
Mr
es
(in bankruptcy proceedings since 2 October 2010)
• Merkur International Praha spol. S.r.o.
(in bankruptcy proceedings since 12 May 2011)
The Mersteel Division
The Mersteel Division is the leading metal products seller and steel service centre in South Eastern Europe.
It consists of six companies in five different countries. It offers its customers over 30,000 metal products. Their quality,
competitive prices, and the consideration of customers’ special needs and wishes are the Division’s guidelines in designing
the range of products offered through its widespread network.
Along with its whole-sale activity, Mersteel also develops a wide range of add-on services. Our steel service centres redesign
metal products to the dimensions that customers require. We also provide the services of cutting tool steels, girders, bars,
and tubes, CNC machining of tool steels, cutting cold and hot rolled strips, and cutting hot-rolled metal sheets.
Mersteel Profil is a Serbian company specialized in producing pipes, tubes and other metal products. In addition to
producing pipes and tubes, which represent 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.
7
INTRODUCTION
The Big Bang Division
The Big Bang division comprises the parent company Big Bang, d. o. o., Ljubljana, and the subsidiary Big Bang, d. o. o.,
Beograd.
The products available in sixteen Big Bang stores and the bigbang.si online store help consumers conduct their work more
effectively, better spend their leisure time, and do housework faster and more efficiently. Even though such products are
not essential for modern living, the development of new technologies increasingly provides new functions and improved
user experiences.
As a specialist for consumer electronics, computers and small and large household appliances, Big Bang provides its
customers with the state-of-the-art technology of established brands. The care for high-quality and a varied range of
products and a high level of after-sales services have helped create the recognizable Big Bang brand. In modern stores,
customers can consult with the sales staff who are regularly trained on the latest developments. Moreover, customers can
test the majority of the products offered to make sure that they are making the right purchase.
In addition to the company’s main activity – selling products in stores – the sales through the bigbang.si online store, which
has been facing a fierce competition, is also very important. Big Bang also operates in wholesale and foreign markets.
Merkur Group Companies’ Product Portfolio
The versatile product range of the Merkur Group companies consists of 900 product groups, which are combined in the
following strategic programmes:
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.
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.
Technical products: 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: electrical installation materials, lighting equipment, wires and cables, switching and
protection devices, energy-related equipment, plumbing and fittings, tiles, bathroom ceramics and equipment, wellness
equipment, heating, ventilation and air-conditioning systems, other installation and electrical materials.
Consumer products: audio and video equipment, small household appliances, large household appliances, heating
appliances, kitchen utensils, computers and office supplies, communication equipment, gardening, agricultural and forestry
equipment, and other consumer goods.
Chemical and paper products: paint and chemical products, façade systems, industrial chemicals, plastic granulates,
printing paper and materials, packaging material.
Added value of own brands
Merkur Group’s own brands BIVA, MTECH and MQ, which are managed by the Merkur Division, are becoming widely
recognized. BOF is the brand of the Big Bang Division. Own brands offer the best quality in their price range. They are
synonymous with products which match the products and brands of established producers in terms of the quality, while
their prices are more affordable. Our own brands are intended to supplement and upgrade the existing product range. Our
vision is to bring high quality and aesthetics closer to all our consumers.
8
Operating Highlights
Merkur’s achievements in 2012:
• in December we successfully concluded the conversion of debt into capital for Merkur, d. d.,
• within the confirmed compulsory settlement, we entirely repaid the liabilities of the second instalment after the compulsory settlement, in the amount of €18 million,
• in spite of the fall in the market, we managed to increase our revenue (by 7% compared to 2011) and improve productivity,
• we sold the assets unnecessary for our operations at the carrying amount of €27 million and within the optimization of retail areas Merkur, d. d., generated €3.0 million of revenue from rent and the Merkur Group €4.8 million,
• we reorganized business processes,
• Merkur, d. d. decreased costs by €6.3 million compared to the previous year, and the Merkur Group by €11 million,
• we started selling both non-key divisions – Mersteel and Big Bang, and started looking for a strategic partner for the Merkur Division.
Merkur’s plan for 2013:
• we will continue the activities of selling the non-key divisions and searching for a strategic partner for the Merkur Division, which we started in 2012,
• we will perform the activities needed for the realization of the set strategy and for the achievement of the planned goals for 2013 within three sets: activities to increase the sales and generate customer value, the optimization of operations in terms of searching internal reserves, the development of the organization and standardization of processes,
• we will continue optimizing the working capital (through the active monitoring of customers, collection procedures, setting limits and similar),
• we will continue with the process of selling the assets that are unnecessary for our operations, and subletting excess premises.
Item
Merkur, d. d. Merkur, d. d. Merkur Group Merkur Group 2012 2011 2012 2011
Revenue (in € thousand)
242,843
226,847
428,889
417,196
Revenue from sales to COMPANIES (in € thousand)
110,155
101,560
183,277
173,150
Revenue from sales to CONSUMERS (in € thousand)
126,524
120,000
234,965
234,535
65,817
63,781
108,121
107,066
EBITDA (in € thousand)
8,235
193
8,199
-8,869
Operating profit or loss (in € thousand)
1,284
-8,015
-5,415
-24,794
Operating profit or loss in revenue
0.5%
-3.5%
-1.3%
-5.9%
141
120
149
128
14.0%
16.7%
12.2%
13.8%
9.0%
10.1%
9.2%
10.2%
24
20
22
15
Gross profit or loss (in € thousand)
Revenue per employee from hours (in € thousand)
Labour cost in revenue
Cost of services in revenue
Added value per employee from hours
(in € thousand)/loss on substance 9
INTRODUCTION
Report of the Chairman of the Management Board
All the employees at Merkur have reason to be proud of the year 2012. The
operations have stabilized and the parent company again started generating
an operating profit. As compared to the year before, the revenue increased
both in terms of sales to businesses as well as sales to consumers, and at
the same time we successfully reduced costs. This resulted in as much as
a 20% increase in the added value per employee. In spite of the shrinking
Slovenian market, Merkur managed to grow.
The Financial Restructuring Plan, which was adopted in 2010, has remained
the key basis for the activities of the Management Board. In December
we paid fully and in due time the second of the five instalments of the
compulsory settlement and at the same time we successfully finished with
the conversion of a part of the debt to equity. This further eased Merkur’s
position, enabling it an easier start in 2013.
The market situation has also remained fierce in 2012, thus we continued
reorganizing business processes and started working on additional projects
to improve Merkur’s position. In 2012, we continued selling the property,
which was not needed for the performance of our core activity. We have
optimized the surface areas of the shopping centres and sublet the excess
areas. This has enabled us to generate new income as well as to increase the
number of customers. Furthermore, we opened regional outlet departments
in individual shopping centres in order to sell the inactive products; we have
introduced the new ABC classification of products and started a trial period
of using new business and information solutions for ordering goods in the
shopping centres.
In the middle of 2012, we took a decision to sell the Mersteel and Big Bang
divisions, which are not vital for the operations of Merkur. This process was
not finished by the end of 2012, and just before the end of the year, Merkur’s
owners decided that the Merkur division would have to find a strategic
partner in 2013. Thus, the year 2013 will be a year of changes for the Merkur
Group.
Merkur is on the right track. We have been successfully levelling the
compulsory settlement proceedings, creating a stable growth in the
difficult situation. We are a well-known Slovenian company, which has been
regaining its former good reputation. I am convinced we will also continue
this road in the future.
Blaž Pesjak,
Chairman of the Management Board
10
Management Board’s Statement of Accountability
The Members of the Management Board of Merkur, d. d., hereby state that the Consolidated Annual Report of the Merkur
Group, and all its constituent parts have been compiled and published in accordance with the Companies Act and the
International Financial Reporting Standards as adopted by the EU.
The Management Board is responsible for the preparation of the Annual Report of Merkur, d. d., and the Consolidated
Annual Report of the Merkur Group, together with the financial statements and notes which provide the interested public
with a true and fair representation of the financial position and the results of the company’s and the Group’s operations.
The Management Board also states that that the company’s financial statements and the consolidated financial statements
were compiled under the going concern assumption, that the chosen accounting policies have been consistently applied,
and that any modifications to them have been disclosed.
The Management is responsible for the adoption of measures to prevent and detect fraud and misstatements, and for
ensuring the preservation of the assets of Merkur, d. d., and the Merkur Group.
Blaž Pesjak,
Chairman of the
Management Board
Rok Ponikvar,
Member of the
Management Board
Director of Sales and
Logistics
Uroš Zajc,
Member of the
Management Board
Director of Marketing,
Purchasing, Product
Portfolio and Development
Marjan Smrekar,
Member of the
Management Board
Workers’ Director
11
INTRODUCTION
Report of the Supervisory Board
Dear shareholders!
Merkur and other Merkur Group companies are still facing the difficult conditions of operations which are marked primarily
by the downturn in the purchasing power and investments. In spite of the difficult economic situation, the Group companies
managed to operate in accordance with the expectations that were set in the Financial Restructuring Plan under the
compulsory settlement proceedings. Unfortunately, the said external indicators prevented the Group companies from
making full use of the positive measures that were adopted in the business, cost and organizational areas and which would,
under normal conditions of operations, enable the company to improve its operations in a faster and more effective way.
Key positive measures in terms of the Group’s operations were carried out primarily in respect of changes or the optimization
in the business model, processes, product network and improved cost effectiveness.
In spite of the positive changes in operations, the company/Group is still facing liquidity problems since the finance
creditors are not enough to cover the total additional volume of the resulting debt related to the compulsory settlement.
Hence, Merkur, d. d., started with intense activities to find a strategic partner or to sell the company at the end of 2012 after
a similar process had already been started in Mersteel and Big Bang at the start of 2012.
Work of the Supervisory Board
Since the start of 2012, the Supervisory Board of Merkur, d. d., worked in the following composition: Matevž Slapničar
(Chairman), Antonija Pirc (Deputy Chairman), Vanja Jeraj and Gregor Simoniti as Representatives of the Shareholders, and
Ana Hochkraut and Peter Fratnik as Representatives of the Employees. The composition of the Supervisory Board did not
change in 2012.
In 2012, the Supervisory Board met at twelve regular meetings where it followed and supervised the operations of the
company and the work of the Management Board of the company in accordance with the mandate, authority and duties, as
defined in the Companies Act and the company’s Articles of Association. In the course of its work it took into consideration
the interests of the owners, as well as the interests of other stakeholders. Considering the still difficult company’s financial
situation due to being in compulsory settlement proceedings and the financial and business restructuring, as well as due
to the tough economic conditions, the work of the Supervisory Board in 2012 was very responsible.
Besides monitoring the compulsory settlement proceedings, the Supervisory Board spent most of the time in its 2012
meetings on issues regarding operations and the restructuring of operations in the parent company and the Group.
In 2012, the Supervisory Board discussed and took note of the audited financial statements for the year 2011 of Merkur, d. d.,
and the Merkur Group was informed about the business results of Merkur, d. d., and the Merkur Group.
Throughout the year, the Supervisory Board regularly discussed the operating results of Merkur, d. d., and the Merkur Group.
It agreed to the business plans and regularly monitored the liquidity, solvency and capital adequacy of the company.
Moreover, it discussed and gave consent to the disposals of properties that are unnecessary in terms of business operations.
All members of the Supervisory Board 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 Annual Report
On 29 March 2013, the Management Board of the company presented to the Supervisory Board a draft of the annual report
of Merkur, d. d., and of the consolidated annual report of the Merkur Group for 2012, and on 10 May 2013, it presented the
audited annual report of Merkur, d. d., and audited consolidated report of the Merkur Group for 2012 with the auditor’s
opinion. According to the auditor’s opinion, except for the potential effects of the matter referred to in the Basis for Qualified
Opinion paragraph, the unconsolidated and the consolidated financial statements present fairly, in all material aspects, the
company’s and Group’s financial position as at 31 December 2012, as well as their statement of comprehensive income and
cash flows for the year then ended, in accordance with the International Financial Reporting Standards as adopted by the EU.
At the 43rd regular session held on 10 May 2013, the Supervisory Board discussed the audited annual report of Merkur, d.
d., for 2012 and the audited consolidated annual report of the Merkur Group for 2012, which were audited by the audit firm
Deloitte Revizija, d.o.o.
12
After carefully examining the audited 2012 Annual Report, and the audited 2012 Consolidated Annual Report, the
Supervisory Board did not have any comments regarding the reports, and verified them unanimously at its session on 10
May 2013.
Proposal on the allocation of the distributable profit
While endorsing the annual reports for 2012, the Supervisory Board established that the company and the Group did not
generate any distributable profit.
The Supervisory Board prepared this report for the General Meeting of Shareholders in accordance with Article 282 of the
Companies Act.
Conclusion
The company’s high debt and the difficult economic situation had a key impact on the results of the company and the
Group also in 2012. Merkur, d. d., and the Merkur Group have adapted to the new situation by changing their business
models and the business policies. In 2012, the Group started selling the Mersteel and Big Bang Divisions, and at the end
of the year also searched for a strategic partner for the Merkur Division. These activities will require many more measures
and much adaptation in 2013. I believe that the company has more than enough ambition and know-how to successfully
complete these processes.
In 2012, the Members of the Supervisory Board responsibly and diligently monitored the operations of Merkur, d. d.,
and the Merkur Group. We had support and cooperation of the company, which allowed us to conduct our supervision
appropriately and at a high-quality level.
The Supervisory Board would like to thank the Management Board and all the employees for their contribution and effort
in these difficult conditions.
Matevž Slapničar, MSc,
Chairman of the Supervisory Board
Naklo, 10 May 2013
13
INTRODUCTION
Merkur Group’s Strategic Policies
Merkur’s key strategic policy is to remain a competent, competitive trader, providing the best services within the framework
of the largest sales network in the markets of South Eastern Europe. In these markets, Merkur will be the leader in providing
home equipment products, DIY products and construction, electrical, metal and professional products.
Key factors to success:

Knowing your customer

Courage to downsize

Control over processes and costs
Modus operandi:

Rational decision detached
of emotions

Always being ahead of competition
WINNERS
Management priorities:

Close relations with customers

Simplebusiness model

Close relations with all
levels of employees
Investments:

Technology - how to make
best use of it?

Employees of all levels customers are the priority
in all processes
The basis for the operative strategic policies is the requirement for the financial restructuring of both controlling companies
within the Merkur and Mersteel Divisions in accordance with the adopted financial restructuring plans. The strategic
policies of the Merkur Group have changed based on the decision adopted by the owners in 2012 about the need to find
as soon as possible a strategic partner who will provide sufficient liquid assets to continue the operations. According to
financial experts, it is impossible to find one investor for the entire Merkur Group because of its versatile activities, and so
the process was broken down to searching for a strategic partner for each of the divisions – initially for Mersteel and Big
Bang, and at the end of December 2012, we made a decision to also find an investor for the Merkur Division (upon the
previous disinvestment of both non-key divisions).
The key strategic policies of the Merkur Group are thus presented in the continuation as key strategic policies of the Merkur
Division on the assumption that both divisions which do not form part of the Merkur Division’s core activities, are sold.
The strategic policies of both divisions, which are intended for sale, are indicated in the way as if their operations were
continued under a new owner.
14
MISSION, VISION, VALUES
Merkur’s key strategic policy is to remain
a competent and competitive trader,
providing the best services. In the markets
of the South Eastern Europe, Merkur will be
the leader in providing home equipment
products, DIY products and construction,
electrical, metal and professional products.
MISSION
As a competent and competitive group of
companies, the Merkur Group provides the best service of B2C as well as B2B sales.
VISION
Merkur will be the leader in providing DIY
products, appliances and seasonal products
in the markets of South Eastern Europe.
VALUES
Enthusiasm
Wisdom
We are continuing the 115-year
long tradition of successful
business practices, using fresh
ideas to pave the way into the
next century.
Orderliness
Quality
We are a diligent,
trustworthy and
dependable business
partner.
We build on
established and
well received
services.
We are committed, competent
and professional and follow
the company goals as a team.
Success
Responding to changes
and market conditions is
our motto, and finding the
best opportunities is the
goal of each employee.
Truth
We do not hide the facts.
15
INTRODUCTION
How can the strategic goals be achieved?
Competitiveness
&
competence
Sales
& finance
Owners
Business
processes
Employees
Leader in providing
DIY products,
appliances &
seasonal products
Transfer the
potential to our
benefit
• the leading DIY provider
• financial reorganization
• optimization of operating costs
• customer segmentation:
B2B, B2C, bulk
• brand management
• sales promotion activities
• internal reserves
• real estate optimization
• risk control and minimization
• dynamic plan
with active measures
• strategic partnership
• healthy growth
• enhanced customer satisfaction
• flexible support
• moderate growth
• disinvestment
• optimization of working capital
• compliance with regulations and legislation
• improved, simplified and effective internal processes
• automatization of operations
• minimization of ineffectiveness
• organizational structure
• B2B reorganization
• moderate growth
• loyalty, motivation and satisfaction of employees
• corporate culture
• setting up a corporate climate that supports the planned changes
• remuneration system
• career management
The growth of sales is the result of more active market processing and brand management. The key to success is focusing
on selected segments of customers. Along with the planned growth of sales, we will increase the profitability with the
systematic management and reduction of operating costs. We offer vast supplies of our range of products, which is the
basis for sales to companies as well as consumers, and it represents the best ratio between quality, supplies and price. The
Merkur Division has the broadest sales network; our sales staff are competent and customer-oriented.
1. Merkur – SEE provider of DIY products
To keep a high market share in Slovenia; to consolidate operations in Croatia, moderate growth in Serbia; to minimize risk
in Bosnia and Herzegovina.
2. Retail network
A total of 33 stores in a sales area of 130,000 m2 – to focus on formats and increase sales per m2.
3. Optimization of sales channels
B2B – to focus on DIY products and appliances, B2B bulk – to increase sales and focus on services, B2B wholesale – major
customers and Group sales.
4. Range of products
Focus on products and appliances for home – the leading provider in selected categories.
16
Pillars and categories
of the Merkur’s range of products
SEASONAL
DIY
Spring & Garden
Summer & Furniture
Autumn & 1 November
Christmas & New Year
Construction
Tools
Home Improvement
Bathrooms
APPLIANCES
Large household appliances
TVs
Small household appliances
Home improvement
Segments of Merkur’s customers
B2C
RETAIL CENTRES
• The strategic range is represented by two pillars (DIY and appliances). Each pillar includes four or five strategic product CATEGORIES
• The SUPPLEMENTARY range is represented by four CATEGORIES OF SEASONAL PRODUCTS
B2B
RETAIL CENTRES (BULK SALE)
We focus on five target groups of customers:
• Construction finishing • Industry • Public companies • Electrical installations • Machine installations
WHOLESALE
•We focus on large customers in construction, industry and trade
•Sales units are specialized according to different target groups of customers
•Sales to subsidiaries are connected to their growth in sales
17
INTRODUCTION
Strategic policies of the Mersteel division
Mission, vision, values
MISSION
To create customer satisfaction with quality
products and excellent advisory services.
VISION
To become the leading goods and services provider in the metallurgy sector, and to create
added value between producers and customers.
VALUES
The key values of a modern and adaptable organizational culture are
innovation, loyalty and the engagement of employees. Adapting to changes
in the environment and being able to discover and take advantage of market
opportunities, and with a wish for an on-going development. It is driven by
the future, new challenges and ideas, which represent and opportunity and
challenge for further growth and development. The next step is to grow from
a company that used to operate only in Slovenia to the biggest provider of
metallurgic goods and services in South Eastern Europe.
18
The volume of the market has inevitably decreased for some of the traditional programmes and individual groups of
customers. A lack of liquid assets for financing the current assets is the main challenge faced by the Mersteel Division; it
attempts to use the existing resources more effectively exclusively in the profitable segments, which do not require the
long-term tying up of financial assets. Mersteel’s long-term strategic growth will be based on four pillars:
• sales,
• procurement,
• range of products,
• increase in productivity,
which will result in a higher average value of an individual sale, a decrease in the cost of procurement, an increase in the
share of services with a high acquisition price and lower cost per unit of the sold goods. The result of these activities will be
an improved statement of comprehensive income.
SALES EBITDA
1. SALES
2. PROCUREMENT
•to obtain old and new customers
•exports to Austria, Italy, Germany and Hungary
•improved interconnections among business functions
•to adapt and improve sales services based on the existing KPI and education
A larger number of customers and higher
average value of individual sales.
•to establish direct sales from steel undertakings
through a strategic partner
•centralised procurement for the entire division
DEVELOPMENT
STRATEGY
3. RANGE OF PRODUCTS
•to adapt the range of products for buyers
of higher added value materials
•to increase the share of processing services
•to ensure semi-products to end users
•to increase the share of special steels
To increase the share of services and materials
with a high added value.
To decrease the relative
purchasing costs.
4. PRODUCTIVITY
•to increase sales with the current human resources
•stable fixed assets without the need
for large investments
•slow-moving inventory management
•get rid of excess equipment
•to restructure Serbia
Lower fixed costs per sold
unit of goods/services.
19
INTRODUCTION
Strategic policies of the Big Bang division
Mission, vision, values
MISSION
We create long-term customer satisfaction, we inspire and enrich new market lifestyles by becoming a strong partner to the leading brands and producers.
VISION
In the area of consumer electronics, we will become the first choice by providing a quality
shopping experience and a wide range of services to customers.
VALUES
As a provider of quality technological products in the area of living,
work and entertainment, we pursue the following goals:
• To be the customers’ first choice.
• To achieve a sustainable return on equity and a positive cash flow.
•To be an exemplary and respected employer who takes care of the development of employees.
•To strengthen our position in Slovenia and the region (SE Europe, neighbouring markets).
•To extend and strengthen developmental and regional strategic partnerships (to be the partners’ first choice).
•To make target-oriented and carefully selected investments for satisfied customers, primarily in accordance with the achieved cash flow.
20
The development strategy is based on three pillars:
• Increasing the sales and customer satisfaction: we will offer our retail clients a sales’ network of an even higher quality and better competitiveness, which means a higher level of sales and after-sales services; we will remain the trendsetter in terms of consumer electronics, and we also plan to become the most recognizable in terms of large household appliances, personal care products and small household appliances. In terms of wholesale, we will build a long-term relationship and increase the sale of higher-value products.
• We will ensure a suitable range of products by adding new product ranges, which we already started in 2012. In the area of household devices, the division will develop two categories, which are the leading categories in the area of small household appliances abroad, and as yet they have not been established in Slovenia. The first category is dental care and the second is coffee machines. Under the slogan “Always Something New”, Big Bang will start developing these two categories, thus generating the entire Slovenian market.
• The development of a retail network in Serbia: in 2013, the retail network will spread through the opening of two new small stores. We expect this to improve the purchasing conditions and increase the recognizability on the Serbian market.
Planned Activities for 2013
THE MERKUR DIVISION
We already faced a difficult macroeconomic situation in 2012, however, the forecast for 2013 is even worse. The economic
crisis already decreased the DIY sales by 8% in 2012, whereas the general consumption is anticipated to drop by a further
11% by 2014. The latter drove us into first considering the anticipated macroeconomic factors (a drop in consumption, the
growth of the unemployment level and similar) when determining the 2013 activities necessary to achieve the annual plan,
and implementing activities that need to be achieved to meet the plan. We will monitor each activity on a monthly basis
within the Mozaik project, which is used by the Management Board, and the employees to be informed of the course of
the important activities at the division level that are directly or indirectly vital to achieve the strategic policies and planned
financial indicators.
The activities necessary to realize the set strategy and to achieve the set goals are classified into three important sets:
• activities to PROMOTE THE SALES AND CREATE VALUE for our customers,
• activities focused on SEARCHING FOR INTERNAL RESERVES through the optimization of operations (internal processes)
and disinvestment activities for the assets that are unnecessary for business operations,
• all are connected by the activities in the area of ORGANIZATION DEVELOPMENT AND STANDARDIZATION
OF BUSINESS PROCESSES.
SALES PROMOTION ACTIVITIES AND THE CUSTOMER VALUE CREATION
Sales Promotion
1.Sales to Consumers – B2C Sales
Within the sales to end consumers, the following activities will be implemented in 2013, all aimed at achieving a moderate
growth of sales to consumers according to the achieved sales in 2012, or at neutralizing the anticipated drop in sales due
to the anticipated negative trend of macroeconomic indicators:
•We will increase the competitiveness and sales by introducing three price levels for the products offered. In this way we will satisfy the entire spectrum of Merkur’s customers, keeping the sales or ensuring its moderate growth, while at the same time we will optimize the ordering process through the optimization of business processes, set up an optimal level of stock and thus decrease the tied up liquid assets.
•We will promote the sales with the already started marketing activities of “Unbeatable prices” and “Magnets”. In the time when consumers are becoming increasingly sensitive in terms of prices, we will use these activities to position ourselves as a company which gives customers the most value for money considering the quality of a product and the offered sales and/or aftersales’ service. These activities will increase the value of the shopping basket, the number of items on the invoice, the visits to shopping centres and the focus on the sale of those products that bring a higher difference in the price.
21
INTRODUCTION
•
•
•
•
•
The education and training of the sales staff both in terms of the technical direction as well as the soft skills of effective sales.
Active sales at counters, cross promotion and active sales in departments where customers are offered a range of products compatible in terms of season and content, and a range of those where we achieve the biggest difference in the price.
Measuring the quality of sales and aftersales service and its upgrading based on the results of the hidden buyer and the proactive reaction to perceived opportunities and risks.
Sales promotion of services within the sales activity “Building with Merkur”, where buyers of technical goods are offered a comprehensive sales service for technical goods with mounting or installation at competitive prices without the time-consuming search for servicemen.
The renovation of the financial offer for customers in the form of quick loans based on which we are also planning to increase the sales to those customers who otherwise would not decide on cash sales due to the difficult financial situation.
2. Bulk Sales to Businesses – B2B Bulk Sales
In terms of the content and the value, the planned increase in the B2B bulk sales is one of the key activities to raise the
revenue and the generated difference in the price, as included in the 2013 plan. We assess that this sales channel is the most
promising area of growth. The key activities to achieve the planned growth in sales are based on:
• the renewed B2B bulk strategy where we will analyse the market potential to identify the options of increasing the sales to existing customers, identify potential new customers and activate the “sleeping” customers, i.e. those who have already made purchases at Merkur in the past but have stopped due to various reasons;
• within the identification of potential new customers we will actively monitor the planned activities connected with the sale to new customers and the effectiveness of the realization of given proposals;
• the establishment of the process and support to active customer relationship management in the sale to businesses aimed at five key target groups (mechanical installers, electrical installers, performers of finishing works in the construction business, industry, public enterprises);
• a new remuneration system is being prepared for the stimulative remuneration to sales staff in the event of them reaching or exceeding the planned goals.
3. Sales to Businesses – B2B Wholesale
Within B2B wholesale we will in a similar way to the B2B bulk segment, analyse the market potential with the aim of
increasing sales to existing customers, potential customers and “sleeping” customers, we will develop a specialized sales
team to sell screws and bolts, and we are also studying the options to increase exports. The key element of increasing sales
within the B2B wholesale segment will be the counter-sales to suppliers, and we are also increasingly investing our efforts
into searching financial structures for the construction businesses who historically used to represent an important part of
customers.
In 2013, we will pay special attention to the development of sales to franchise holders. We plan to increase the sales to this
segment of corporate customers by €1 million through a renovated range of products and active sales promotion.
Sales Programme/Range of Products
In 2013, we will finish the project of updating the range of products and its implementation in the retail network in Slovenia.
Well-stocked shopping centres with the right products are the key prerequisite to increase sales. The updated range of
products will satisfy the needs of target groups of customers (the breadth, price range, brands, technical features) and
ensure our competitiveness. The key activities in 2013 will be:
• a new system of ordering in shopping centres, the aim of which is to increase the sales through increasing the amount of stock in shopping centres, thus minimizing the lost sales due to the lack of stock and decreasing the less needed stock,
• the introduction of new product groups and the expansion of the range of products with the niche products with the aim of satisfying the needs of the growing segments of consumers (active seniors, women, young families).
Due to the changed shopping habits of consumers, the role of products under own brand is becoming increasingly
important. The range of our own MTECH, BIVA and MQ brands supplements and upgrades to Merkur’s sales programme.
We will increase the share of own brands in sales by introducing new products and updating the existing product lines.
22
The Development of Formats and the Optimization of the Retail Network
In the Slovenian retail network, we will continue optimizing the retail areas with the aim of unifying the formats of shopping
centres and the coverage of regions. Shopping centres will develop using the model of HYBRID shopping centres divided
in two sales formats, namely the medium HYBRID SC (3,500–4,000 m2) and large HYBRID SC (6,000–8,000 m2).
The first phase of format unification is in the final stage and the continuation of the project is based on the optimization of
the coverage of regions by decreasing the number of shopping centres in an individual area. In Croatia we will achieve the
unification of the formats of shopping centres and an increase in the sales areas through the project of the retail network.
By subletting excess capacities and thus expanding the offer we will increase the number of visitors in shopping centres,
thus additionally contributing to the increase in the number of potential buyers. We expect to see results already in the
second half of 2013.
Likewise, we also optimized the Karaburma shopping centre in Serbia at the start of 2013, where we sublet the excess
capacities.
Customer Relationship Management
In terms of customer relationship management we will continue the activities in the area of the loyalty system renovation –
Merkur loyalty card. The goal of the renovation is to adapt the system to the needs of the customers and a more effective
customer relationship management. We will decrease the number of marketing activities and increase their effectiveness
and optimize the marketing budget through better oriented operations.
Identifying the
customer's needs
1. Stock
BASIC
2012
Strategic
positioning
2. Service
DIFFERENTIATION
3. Price
"GO-TO- MARKET"
approach
2013
Range of products
• Suitable products for professionals in all stores.
Price policy
• Competitiveness
• B2B conditions
Stock
• Through the central waehouse
• Through outlet stores
Pleasant shopping experience
• Comfort and offer
• Time effectiveness
Delivery
• To order or per project
Extra
• Complementary delivery
• Services
1. Analysis of sales channels
2. Targeted offers
3. Active sales
4. Targeted purchasing
5. Minimization of the failure to
meet customer's expectations
OPTIMIZATION OF OPERATIONS – Searching for INTERNAL RESERVES
Cost Savings
In the first half of the year, we will finish the project of managing service suppliers, which will ensure the supervision
over cost agreements, approved and non-approved suppliers, and increase the options of counter-sales and ensure single
payment deadlines.
Since the control over achieving the planned result is, in addition to the sales-related activities, tied to monitoring the set
amount of costs, and important activities that are also related to the latter. With regular monitoring and the renovation
and automation of the ordering procedure and the related authorizations, we will ensure the monitoring and the active
measures taken in case of exceeding the planned costs, and at the same time we will try to identify additional possible
savings within the business process optimization framework.
23
INTRODUCTION
In 2013, important activities related to costs are tied to the procedure of setting up a new organizational structure, which
will in connection with the reorganization of business processes deliver the planned savings in labour cost.
We expect that the accession of Croatia to the EU will bring additional savings in the supply chain in terms of the ordering
process and transportation costs optimization, as it will provide possibilities of increased synergies in the process of
procurement as well as transportation and warehousing procedures. In the later phase we will study the possibilities of also
including other markets.
Supply Chain
One of the most important projects in 2013 is connected with the supply chain optimization aimed at generating savings
in the supply chain. The project is divided into three areas: the optimization of the ordering process, the optimization of
transportation costs and the reaching of more favourable conditions of procurement from suppliers.
We will continue the already started negotiations with suppliers in terms of purchase prices, payment deadlines, countersupplies and similar with the aim of increasing the added value for consumers.
Disinvestment
In accordance with the Merkur Group’s development strategy and the Financial restructuring plan, the disinvestment
process will continue in 2013 in the direction of the sale of financial investments as assets unnecessary for business
operations (in particular real estate).
In the second half of 2012 we started selling both divisions – the Mersteel and Big Bang divisions, which will continue in
2013. Due to the tough economic situation it is difficult to tell when the procedures of sale will be finished.
At the same time, we also started searching for a strategic partner for the Merkur division in December 2012, which will
ensure the conditions for stable operations and further growth and development of operations in accordance with the
strategic policy of the new Merkur Group. The activities to obtain a strategic partner or investors are planned to end in the
last quarter of 2013.
In addition to selling both non-key divisions, the activities of selling the assets unnecessary for business operations are
planned within the framework of strategic restructuring in 2013, both in the controlling company Merkur, d.d. as well as all
subsidiaries within the Merkur division with the aim of ensuring liquid assets and decreasing the level of debt.
To ensure the financial rehabilitation and further successful operations, it is vital to exploit the potential of the real estate
owned by the Group. The Merkur division owns over €25 million worth of real estate (at the carrying amount), which are
not in use (such as land in Koper, Zagreb, Rijeka – Kukuljanovo, Split, Dobanovci ...). The problem of selling real estate is the
current situation on the real estate market with low prices, mortgages on real estates for bank loans, in some cases the
unsolved issues of ownership, land register entry and similar.
Development of the ORGANIZATION and STANDARDIZATION OF PROCESSES
Information Support
The implementation of the main development projects for 2013 will enable support to the planned increased sales, an
decrease in operating costs and at the same time an increase in the effectiveness of operations. The following projects
have the highest priority in terms of support to operations: template for orders intended for an optimal ordering process
and the maintenance of a sufficient stock in shopping centres, the updating of the Merkur loyalty card and the automation
of the preparation of retail orders.
Employees
Employees are one of the most important resources and at the same time represent the high potential of the Group,
therefore they are actively included in all processes of achieving the goals of the Merkur Group. The importance of human
resources, their role and knowledge, abilities and skills significantly contribute to the success of operations and they are
particularly expressed in the current demanding economic and market situation in which we operate and which require
constant adaptation and quick response. We are aware that each individual employee and all of us together contribute
to the Group’s competitive advantage on the market with our work. In order to be successful in the current situation, all
employees must actively cooperate with each other and be creative, ready for new challenges and be bold in terms of
making accomplishments.
24
The 2013-2017 strategic plan is the basis for the HR plan. According to the expected difficult situation on the market, we will
continue looking for ways to make savings in labour costs through on-going improvements and the optimization of business
processes, since we believe that the only way to achieve successful operations is through continuous improvements in all
areas of work.
We will adapt our organizational structure in 2013. We will continue the activities of adapting the number of employees in
all Group companies with the aim of increasing the productivity per employee and consequently decreasing the labour
cost.
Within the HR strategy, we plan:
• self-initiative of all employees in the renovation and implementation of business processes, responsible resolving of occurred problems and socially responsible thinking and acting,
• downsizing of part-time employees and the reallocation of full-time employees where enabled by the working process,
• new recruitments to those positions where this is important to ensure an uninterrupted business process.
The process of introducing changes requires an open and timely communication with employees – internal communication
will be based on partnership relationships with the aim of keeping confidence among co-workers.
The training and education plan has been prepared by considering the cost effectiveness according to the current situation
of the Merkur Group. In order to achieve competence, we will carry out the urgent functional training.
THE MERSTEEL DIVISION
The division will continue with the activities related to the financial reorganization plan, which were started in previous years.
The management will focus particularly on:
• searching for an agreement with partner banks regarding the method of settling (deferral/restructuring) overdue liabilities in 2013 (regular and arising from the compulsory settlement),
• searching for finances to pay the first instalment of the compulsory settlement, which falls due on 17 June 2013
• searching for a strategic partner for the entire Mersteel division, either from among interested metallurgists or financial funds.
The 2013 operative activities include:
• agreements to increase the share of purchases without prepayments from suppliers who are known for their reliable business operations, correct relationships and fulfilment of promises,
• entering into agreements regarding the sale of processing services with large business partners (Posco, EGO, Magna),
• the continuation of operating cost optimization,
• the continuation of the activities on the end user market with services from the steel service centre and the Serbian factory,
• the continuation of subletting the unneeded warehouse premises.
THE BIG BANG DIVISION
The key activities carried out by the Big Bang division in 2013 to achieve the planned and strategic objectives are:
• Marketing activities which are vital in achieving the set sales objectives. In 2013, the division will continue researching the shopping intentions and the “Guaranteed lowest price” activity aimed at building the price perception among customers, which it started in 2012. The Big Bang loyalty programme is planned to be implemented in Slovenia in 2013.
• Cost effectiveness: in 2013, efforts will be made to achieve price effectiveness in the cost of rent, cost of materials, cost of energy and other costs.
• Supplementing the range of products: continuation of the activities started in 2012.
25
INTRODUCTION
Merkur Group Markets
Croatia 7%
Serbia 5%
Bosnia and
Herzegovina 2%
Macedonia 1%
MERKUR GROUP IN
SOUTH-EASTERN EUROPE
Slovenia 85%
SLOVENIA
CROATIA
BOSNIA AND
HERZEGOVINA
SERBIA
We have been realizing our
vision and strengthening
our position as the leading
technical trader in South
Eastern Europe!
MERKUR DIVISION
26
MERSTEEL DIVISION
MACEDONIA
BIG BANG DIVISION
MURSKA
SOBOTA
Merkur’s Shopping Centres
IN SLOVENIA AND SOUTHEASTERN EUROPE
Slovenj Gradec
Tržič
NAKLO KRANJ
Jarše pri Domžalah
Ptuj
Slovenske Konjice
Velenje
CELJE
Rogaška Slatina
LJUBLJANA
Škofja Loka
Cerkno
Logatec
Litija
Šentpavel pri Stični
Šentrupert
Ivančna Gorica
Trebnje
Brežice
NOVO
MESTO
NOVA
GORICA
Merkur company
Merkur shopping centres
Franchise stores
Ribnica
KOPER
Izola
SLOVENIA
Ormož
Slovenska Bistrica
Jesenice
Lesce
Idrija
MARIBOR
Kočevje
Merkur companies
Merkur shopping centres
Franchise store
ČAKOVEC
ZAGREB
NOVI SAD
CROATIA
BIHAĆ
PULA
ZADAR
ŠIBENIK
BOSNIA AND
HERZEGOVINA
SARAJEVO
BEOGRAD
SERBIA
SKOPJE
MACEDONIA
27
INTRODUCTION
Statement on the Management
Management System
The Merkur Group and its three divisions are managed by the holding company Merkur, d.d. The Management Board of
Merkur, d. d. is responsible for the preparation and realization of the strategic goals of development for all companies.
The Supervisory Board monitors the work of the Management Board in line with the two-tier management structure.
The interest of shareholders are represented by up to four members of the Supervisory Board who are elected by
the shareholders at the General Meeting. Up to two members of the Supervisory Board represent the interests of the
employees. This position is taken by the President of the Workers’ Council and additionally by one of the members of the
Workers’ Council.
General Meeting of the Shareholders
The Shareholders of Merkur, d. d. convened three times in 2012, namely at the 24th General Meeting held on 27 August
2012, at the 25th meeting on 22 October 2012 and at the 26th meeting on 12 December 2012.
24th General Meeting held on 27 August 2012
At the meeting, 857,308 shares (35.25% of the voting rights) were represented.
The shareholders adopted the following resolutions:
• they were informed with the annual report for 2011, with the auditor’s opinion and the report of the Supervisory Board about the verification and approval of the annual report for 2011 and the information about the receipts of the Members of the Management and Supervisory Boards; furthermore, they granted the discharge for the Management and Supervisory Boards for 2011,
• they appointed the audit firm DELOITTE REVIZIJA d. o. o. as the certified auditor for the company Merkur, d. d., and the Merkur Group for the year 2012,
• they confirmed the change in the Articles of Association of the company related to the harmonization of its provisions and the provisions of ZGD-1 (Articles 12, 13, 14 and 17) and the new registration of activities (Article 3).
25th General Meeting held on 22 October 2012
Initially, there were 1,658,666 shares (68.20% of the voting rights) present. However, at points 2 and 3, there were 1,758,049
shares (72.28% of the voting rights) present.
The shareholders adopted the following decisions:
• they confirmed an increase in the company’s share capital from €3,066,444 by a minimum of €1,184,910 and a maximum of €1,611,325 to a minimum of €4,251,354 and a maximum of €4,677,769 with the issue of a minimum of 1,184,910 and a maximum of 1,611,325 new ordinary shares for in-kind contributions,
• they authorized the Supervisory Board of the company to harmonize the Articles of Association with the increase in the share capital of the company in accordance with the decision on the increase in the share capital.
26th General Meeting held on 12 December 2012
1,778,155 shares (73.11% of the voting rights) were present.
The shareholders adopted the following decisions:
• the share capital of the company was to increase from €3,066,444 by a minimum of €734,956 and a maximum of €1,161,371 to a minimum of €3,801,400 and a maximum of €4,227,815 with the issue of a minimum of 734,956 and a maximum of 1,161,371 new ordinary shares for in-kind contributions,
• they authorized the Supervisory Board of the company to harmonize the Articles of Association of the company with the increase in the company’s share capital in accordance with the decision on the increase in the share capital.
28
The Supervisory Board
In 2012, the Supervisory Board of Merkur, d. d., met at 12 sessions, where it discussed the following important topics:
• the audited annual report of Merkur, d. d., for 2011
• consolidated audited annual report of the Merkur Group for 2011
• business plan of the Merkur Group for 2012
• strategic plan of the Merkur Division
• reports on current operations
• overview of the capital increase process
• overview of procedures related to disputed transactions
• capital adequacy
• solvency analysis
• reports on market trends
• assessment of the company’s position
• reports on the courses of the General Meetings
• draft of the business plan for 2013 – Merkur, d. d.
The composition of the Supervisory Board of Merkur, d. d.:
Representatives of the shareholders:
Matevž Slapničar, MSc, Chairman of the Supervisory Board
Antonija Pirc, MSc, Deputy Chairman
Vanja Jeraj, Member (from 25 February 2011 to 24 February 2015)
Gregor Simoniti, Member (from 5 December 2011 to 4 December 2015)
Representatives of the workers:
Ana Hochkraut, MSc, Member
Peter Fratnik, Member (from 22 July 2010 to 31 May 2014)
The Supervisory Board’s term ends on 23 June 2014.
The Management Board
In 2012, the Management Board of Merkur, d. d., met at 47 meetings, where it focused on the optimization of operations,
the optimization and rationalization of operations in terms of the Mozaik project, the liquidity and capital increase of the
company, and the payment of the second instalment of the compulsory settlement.
The Management Board of Merkur, d. d.:
Blaž Pesjak, Chairman of the Management Board
Rok Ponikvar, Member of the Management Board, Director of Sales and Logistics
Uroš Zajc, Member of the Management Board, Director of Marketing, Purchasing, Product Portfolio and Development
Marjan Smrekar, Member of the Management Board – Workers’ Director (until 31 August 2013)
The Management Board’s term ends on 1 July 2015.
29
INTRODUCTION
Governance and Management of Subsidiaries
The Management Board of the holding company actively followed the operations of the subsidiaries in accordance
with the strategic policies and with the aim of achieving the planned business goals. In terms of the governance and
management of the subsidiaries, it implemented unified standards of corporate governance that are already used in the
holding company.
Subsidiaries are supervised through shareholder’s meetings and the director at Merkur who is responsible for the supervision
over subsidiaries.
COMPANIES IN THE MERKUR DIVISION
CEO:
MERKUR HRVATSKA, d. o. o.
Gregor Adler
• Merkur Nekretnine Zagreb, d. o. o.
Gregor Adler
• Merkur Projekt Zagreb, d. o. o.
Gregor Adler
• Mirakul Gradnje Zagreb, d. o. o.
Gregor Adler
MERKUR INTERNATIONAL d. o. o., Beograd Milan Borota, PhD • Mikos Gradnje Beograd, d. o. o.
Milan Borota, PhD • Validus Kapital Beograd, d. o. o.
Milan Borota, PhD MERKUR ČELIK, d. o. o., Beograd
Branko Drofenik (Zoran Cvijović until 15 May 2012)
MERKUR, trgovina i usluge, d. o. o., Cetinje Marija Zarić
INTERMERKUR – NOVA, d. o. o., Sarajevo Enver Šoškić
COMPANIES IN THE MERSTEEL DIVISION
MERSTEEL, trgovina in storitve, d. o. o., Naklo
Darko Gregorič, MSc
MERSTEEL, d. o. o., Hrvatska Sanja Svetec
MERSTEEL, trgovina i usluge, d. o. o. , Beograd Branko Drofenik (Zoran Cvijović until 15 May 2012)
MERSTEEL PROFIL doo, Beograd
Milan Ačimović
MERSTEEL, d. o. o., Sarajevo Željko Mutnović
MERKUR MAKEDONIJA DOO Skopje
Vesna Mirčeska
COMPANIES IN THE BIG BANG DIVISION
BIG BANG, d. o. o., Ljubljana Aleš Ponikvar
BIG BANG, d. o. o., Beograd
Aleksandra Memon
Internal controls related with the financial reporting procedure
In terms of ensuring that the financial information meets the criteria of the International Financial Reporting Standards,
we have set up internal controls which decrease the risks related to financial reporting.
Our financial controls ensure:
• credibility,
• correctness, and
• accuracy of the financial information.
We take care of regular professional training of our employees, which enables them to provide high-quality, correct and
timely financial information through their work.
External audit
A regular annual audit of the financial statements is carried out by Deloitte revizija d.o.o.
30
Ownership Structure
Merkur shares are not traded on the regulated market.
The ownership structure of the managing company Merkur, d. d., as at 31 December 2012:
OWNERSHIP STRUCTURE OF MERKUR, d. d., as at 31 December 2012 in %
Skupina Viator & Vektor, d. d.
3.08
Perutnina Ptuj, d. d.
2.09
Cinkarna Celje, d. d.
1.04
Merfin, d. o. o. - in bankruptcy
3.20
Baumit, d. o. o.
0.89
Gorenjska banka, d. d
3.21
G Skupina, d. d.
0.73
Merkur International,
d. o. o., Beograd
13.83
Iskratel, d. o. o.
3.24
Ananke Handels und
Beteiligungs GmbH
10.70
Nova kreditna banka
Maribor, d. d.
3.24
Salonit Anhovo, d. d.
3.66
Abanka Vipa, d. d.
3.69
Sava, d. d.
8.20
Gorenje, d. d.
3.69
Mersteel, trgovina in
storitve, d. o. o.
6.85
Hypo bank, d. d.
4.68
Factor banka, d. d.
4.92
Banka Koper, d. d.
5.53
Probanka, d. d.
5.11
31
INTRODUCTION
OWNERSHIP STRUCTURE OF MERKUR, d. d., as at 31 December 2011 in %
G Skupina, d. d.
1.46
H & R, d. d.
1.91
Cinkarna Celje, d. d.
1.04
Other shareholders
9.29
Merkur International, d. o. o. Beograd
13.83
Perutnina Ptuj, d. d.
2.09
Skupina Viator
& Vektor, d. d.
3.08
Ananke Handels und
Beteiligungs GmbH
25.00
Iskratel, d. o. o.
3.24
Nova kreditna banka
Maribor, d. d.
3.24
Salonit Anhovo, d. d.
3.66
Sava, d. d.
19.17
Abanka Vipa, d. d.
3.69
Gorenje, d. d.
3.69
Mersteel, trgovina
in storitve, d. o. o.
6.85
Merfin, d. o. o. - in bankruptcy
3.77
Hypo Alpe-Adria-Bank, d. d.
4.68
Factor banka, d. d.
4.92
Banka Koper, d. d.
5.53
Probanka, d. d.
5.11
There were no significant changes to the ownership structure in 2012. The current ownership structure is the result of
the finalized compulsory settlement of Merkur, d. d., in 2011, based on which a number of the creditors converted their
receivables into capital.
As at 31 December 2012, the largest shareholder was the subsidiary Merkur International, d. o. o., Beograd, which is a 20.68%
owner together with Mersteel. Through the conversion of receivables into capital and the confiscation of Merkur shares in
2011, the banks hold a 30.38% equity stake of Merkur as at 31 December 2012. Major changes in the ownership structure
are planned for 2013 after the fulfilment of the suspensive conditions in connection with the conversion of debt into capital.
Details are provided in Point 9 Business Events after the Balance Sheet.
32
Equity of subsidiaries as at 31 December 2012 and the net operating result of subsidiaries in 2012
Company
Total equity
of the company
31 Dec 2012
Net profit or loss of the company
2012
Total equity
of the company
31 Dec 2011
In € thousand
Net profit or loss
of the company
2011
The Merkur Division
• Merkur Hrvatska, d. o. o., Zagreb
686
-5,491
6,167
-7,411
• Merkur Nekretnine Zagreb, d. o. o.*
1,974
-49
2,029
-6
• Merkur Projekt Zagreb, d. o. o.*
-221
-8
-213
-212
• Mirakul Gradnje Zagreb, d. o. o.*
2,335
-2
2,344
-2
• Merkur International Beograd, d. o. o.
38,692
-3,071
45,685
-4,479
• Mikos Gradnje Beograd, d. o. o.**
1,116
-32
1,264
46
• Validus Kapital Beograd, d. o. o.**
-29
-30
-330
-104
• Intermerkur Nova, d. o. o., Sarajevo -1,807
-1,536
-271
-1,775
• Perles Merkur Italia, s.r.l.
0
0
-2,349
0
• Merkur Čelik, d. o. o., Beograd
9,694
-127
10,745
-280
• Merkur, d. o. o., Cetinje
0
0
-440
1
The Mersteel Division
• Mersteel, d. o. o., Naklo
3,972
-422
4,394
-9,841
• Mersteel, d. o. o., Zagreb
-341
-629
-2,028
-1,359
• Mersteel, d. o. o., Beograd 579
-625
-1,714
-938
• Mersteel Profil doo Beograd *** -2,324
-1,343
-1,070
-1,017
• Mersteel , d. o. o., Sarajevo
5,748
-184
5,932
-1,093
• Merkur Makedonija, doo, Skopje
2,104
3
2,082
2
• Merkur International Praha, spol. S.r.o., Praga**** 0
0
548
-112
The Big Bang Division
• Big Bang, d. o. o., Ljubljana
8,723
144
8,579
1,062
• Big Bang, d. o. o., Beograd 1,447
-221
1,825
-541
*
**
***
****
Merkur Nekretnine Zagreb, d. o. o., Merkur Projekt Zagreb, d. o. o., and Mirakul Gradnje Zagreb, d. o. o., are the subsidiaries of Merkur Hrvatska d. o. o., Zagreb
Mikos Gradnje Beograd, d. o. o., and Validus Kapital Beograd, d. o. o., are the subsidiaries of Merkur International Beograd, d. o. o.
Mersteel Profil doo Beograd is the subsidiary of Mersteel, d. o. o., Beograd
The data for Merkur International Praha, spol. S.r.o., Praga are for 30 April 2011 or from 1 January 2011 to 30 April 2011.
33
INTRODUCTION
Significant Events of the Merkur Group in 2012
The Audit at Merkur, d. d.
The authorized auditor of Merkur, d. d., issued a report on the extraordinary audit from 2011 in which it found the company
was allegedly harmed. After that the shareholders imposed on the company the initiation of procedures to compensate for
the damages at the 23rd General Meeting on 5 December. Based on the findings of the extraordinary audit and a law firm’s
opinion, the Management Board of Merkur, d. d., filed the first lawsuit on 18 January 2012. It was filed against the members
of the previous Management and Supervisory Boards. The claim for damage compensation applied to the Merkur retail
centre at Primskovo and the transfer of the pre-emptive right and consequent shortcomings due to the failure to pay the
price difference. This price difference was evident after the retail centre was resold, and the company suffered damages in
the amount of €9 million.
The Merkur Brand Among si.Brand TOP 50 Brands in 2011
At the end of January 2012, the si.Brand Consumer Association for classifying and defining product and service brands
published the latest si.Brand TOP 50 list for 2011. Slovenian consumers selected the 50 best Slovenian product and service
brands in 2011, and Merkur was ranked 16th. By making it among the si.Brand TOP 50 brands in 2011, the company obtained
the right to use the si.Brand 2012 logo for one year.
Merkur, d. d., Signs a Syndicated Loan Agreement
On 14 March 2012, the Management Board of Merkur, d. d., signed the agreement for a syndicated loan worth €7 million.
The acquired money was spent on replenishing the stock levels of the seasonal product range. The approval of the loan is
one of the elements of the Financial Restructuring Plan. This is a short-term loan approved by a syndicate of 11 banks; the
banks kept the same participating shares as in the last loan, worth €35 million.
Merkur and Mersteel Sign a New Collective Agreement
The Management Board of Merkur, d. d., signed a new collective agreement with representatives of the trade unions, with
the effective date of 1 May 2012. The new collective agreement, which applies to Merkur, d. d., and Mersteel, d. o. o., is
adapted to the market situation. Cooperation with representatives of trade unions and understanding the operating results
positively contributed to the new collective agreement, which has remained good in the time of the crisis and still ensures
a higher standard compared to the collective agreement of the trade activity.
Discharge to the Management and Supervisory Boards at the 24th General Meeting of Merkur, d. d.
At the 24th General Meeting of Merkur, d. d., held on 27 August and chaired by the attorney Srečo Jadek, the shareholders
confirmed the decisions on the agenda with the necessary majority. Therefore, based on the presentation of the Annual
Report for 2011 with the auditor’s report and the report of the Supervisory Board they gave a discharge to the Management
and Supervisory Boards for 2011. They appointed the audit firm DELOITTE REVIZIJA d. o. o. as the certified auditor of Merkur,
d. d., and the Merkur Group for 2012 and confirmed the changed Articles of Association referring to the harmonization of
the provisions of the Articles of Association with the provisions of ZGD-1 (in Articles 12, 13, 14 and 17) and to the additional
registration of activities (in Article 3). The latter means that we can now make the shopping experience at Merkur’s shopping
centres even better by supplementing the sales programme, yet still remain the technical dealer, and endeavour to remain
the leading provider of products and services in terms of DIY, appliances and seasonal categories in accordance with our
vision.
Merkur’s Own Brand Rewarded for the Third Successive Time
Merkur’s own brands were rewarded in September 2012 for the third successive time. This time, the selection panel of the
Creativity International Awards conferred the silver award to Merkur’s own BIVA brand for the packaging system of small
household appliances, from among over 1,000 products from more than 30 countries. BIVA thus again showed it can stand
next to the most valuable global brands such as: Apple, LG, Levi’s, Dell, Bacardi, etc. The selection panel explained its reason
for conferring the award with the following words: “What separates the BIVA packaging system from most of the others
is the fusion of the packaging system and the advertisement story or the consideration of the modern ‘from-the-shelf’
marketing paradigm and not the awfully expensive ‘to-the-shelf’ marketing paradigm. The result is driving the customer
towards the activity itself (cooking) already at the point of sale. The product alone becomes delicious, and the customer
wants to cook already in the store.”
34
Capital Increase of Merkur, d. d., Confirmed
At the 25th General Meeting of Merkur, d. d., held on 22 October 2012 and chaired by the attorney Srečo Jadek, 72.28% of
the capital was present. The shareholders confirmed that with the issue of a maximum of 1,611,325 new ordinary shares for
in-kind contributions, the share capital of the company be increased to a maximum of €4,677,769. The General Meeting thus
authorized the Supervisory Board of the company to harmonize the Articles of Association of the company in accordance
with the increase in the share capital of the company. The voted capital increase with the bank creditors (negotiations
started on 4 June 2012) has an exceptional importance both for the company as well as all its shareholders, since it ensures
the continuation of the business and financial rehabilitation. The company will reinforce its capital adequacy and the
urgently needed liquidity. Suppliers of merchandize also expressed their contribution to the rehabilitation of the company
by further prolonging the payment deadlines (most supplies are tied to deferred payment) and thus significantly impacted
the generation of liquid assets.
Solving Merkur’s Capital Adequacy by Means of a Capital Increase and the Write-Off of Receivables
On 22 October 2012, the shareholders unanimously confirmed the proposed capital increase at the General Meeting.
Afterwards, some of the banks, which are involved in the rehabilitation process of Merkur, d. d., adopted a decision to
cooperate in solving the capital adequacy of Merkur, partly with the conversion of receivables to capital and partly with
the write-off of receivables. Even with such a proposal, the total effect on Merkur’s equity is the same as it would be with
the capital increase. Due to the changed situation, the implementation of the decision as adopted by the General Meeting
was not possible, thus a new General Meeting was convened for 10 December 2012, where the shareholders voted on a
new proposal.
Merkur’s Debt Cancellation and Capital Increase Confirmed
At the 26th general Meeting of Merkur held on 10 December 2012, 73.11% of the capital was present, and the shareholders
confirmed with a 99% majority that the share capital of the company be increased with the issue of a maximum of 1,403,375
new ordinary shares for in-kind contributions to a maximum of €4,469,819. The new suggestion is a combination of a capital
increase with in-kind contributions and the cancellation of debt. The General Meeting adopted a counter suggestion by
Abanka Vipa, d. d., as follows: the share capital of the company be increased from €3,066,444 by a maximum of €1,403,375
to a maximum of €4,469,819 with the issue of a maximum of 1,403,375 new ordinary shares for in-kind contributions. The
total issue price of the issued shares is a maximum of €74,378,875. Therefore, a maximum of 1,403,375 new ordinary shares
are provided for in-kind contributions. The Management Board supported the counter suggestion. By the final deadline on
28 December 2012, the creditors of Merkur, d. d., entered 734,970 new ordinary shares in the total amount of €38,953,410.
Merkur Starts Repaying the Second Instalment of the Compulsory Settlement
On 28 December 2012, Merkur started repaying the 2nd instalment to creditors after the final compulsory settlement of 11
August 2011. The repayment includes 4,200 creditors, of which a little under a half are employed in the company. After the
second instalment, which amounts to slightly below €18 million, there are three more left at the end of 2013, 2014 and 2015.
Significant Achievements of the Merkur Group After the
Balance Sheet Date
As explained under the heading “Significant Events of the Merkur Group in 2012”, Merkur, d. d., realized the cancellation of
debt, the conversion of debt into capital and the increase in share capital in December 2012. The increase in share capital
was entered into the Central Depository on 19 February 2013. Due to the statutory deadlines for the increase in share capital
and the fulfilment of suspensive conditions related to the agreement on the cancellation of debt and the agreements of
the conversion of debt, the recording of such events was implemented in 2013. The accounting treatment of the abovementioned transaction and a simulation of the balance of equity on 31 December 2012 (together with the interpretation
of other events referring to accounting events after the balance sheet date) is presented in the financial part of the report
under point 9 “Events after the Balance Sheet Date”.
35
INTRODUCTION
Risk Management
Efficient risk management creates the groundwork for a safe and profitable business and is one of the more important
factors of business success.
Managing different risks requires taking different approaches. The Group manages business risks through its regional
offices.
Through the timely detection of risks, the Group endeavours to increase the achievement of the set goals, timely identify
the deviations, and adopt corrective measures, thus mitigating the potential impact of negative events and better manage
the assets that are available to the company in reaching its goals.
The risks managed by the Group/company are classified in three major groups, namely business risks, financial risks and
operational risks.
Business Risks
Business risks are connected with the operations of the company and its core activity. At the Merkur Group (and individual
Group companies) the business risk is reflected through the changes in the shopping habits of consumers, in particular
the decline in their purchasing power and the trend of purchases by businesses, which depend on the general economic
situation (the construction activity, public tenders and similar). The key indicator is the unemployment level, which has
been declining in all markets and has achieved the rock bottom in the last five-year period, the GDP trend, where a fall is
expected as well, and the level of investments, which has also been dropping as a result of the deleverage of the economy
and the financial sector. Consumers are increasingly expecting the general financial position to further deteriorate, thus
they have become even more conservative with their purchases.
The risk of purchasing power decline
The forecast unemployment level and decline in the purchasing power are reflected in the
decreased consumption. The insecurity regarding the financial position of consumers will
permanently change the shopping behaviour towards making more considerate purchases.
For consumers, getting products of higher quality at appropriate prices is becoming more
important than who provides the products.
We manage the risk by communicating the image of a credible partner, with purchase
advice service, and by offering a range of comprehensive solutions for customers.
HIGH
Within the internal monitoring activities, Merkur values the market potential and regularly
monitors customer satisfaction, the number of complaints, the number of customers in
shopping centres and their average shopping basket, it also compares the competitiveness
of the prices of items with the competition and similar.
The risk of the range of products
Operations in the difficult situation require even greater control over the combination of
the price and the range of products, which we are adapting to the environment.
Merkur operates in various geographical areas, various macroeconomic situations and
various competitive environments, therefore it is exposed to several sales and marketing
risks. Swift response to possible changes in operations and the adaptation of the range of
products and related marketing activities are the key factors of risk management.
The risk in the procurement process
The risk in the procurement process is divided into two major sets, namely:
a. the risk of the supplier – a reliable supplier with financially acceptable
purchase conditions
b. the risk in the internal ordering process – optimal stock
The risk of selecting a supplier and the provision of uninterrupted stock is managed within
terms of the internal procedure of selecting suppliers. Such a selection procedure requires
a reliable and timely delivery, whereas the financial aspect is also vital, i.e. arrangements
36
HIGH
MEDIUM
regarding payment terms, entering into counter-sales, minimizing the number of
complaints and similar, which is also used to indirectly manage financial risks, especially
the liquidity risk.
The risk in the internal ordering process is managed with an active management of stock,
which will in 2013 be upgraded with the monitoring of ordering and stock in the shopping
centres in connection with the already implemented optimization of the range of products.
Initially, the activity will be introduced in the controlling company Merkur, d. d., and later it
will also be implemented in the subsidiaries.
MEDIUM
Financial Risks
Financial risks are those which have a negative effect on the ability to manage financial income and expenses, keeping the
value of financial assets and managing the financial assets.
Credit risk – handling of receivables
Credit risk refers to the risk of payments to the counterparty.
Merkur Naklo and Mersteel Naklo, which are most exposed to the credit risk related to
trade receivables, have taken out the insurance of receivables with an insurance company,
which has had a significant effect on the quality of receivables, a decrease of past due
receivables and the related loss. The companies in the Merkur and Big Bang divisions are
less exposed to credit risk related to trade receivables on markets of the former Yugoslavia
due to the increased focus on the sales to end customers, whereas the Mersteel division
has been decreasing such risk by entering into counter-supply transactions and through
compensations.
Credit risk – financial assets
The exposure to credit risk related to financial assets goes almost exclusively to the
controlling company Merkur, d. d. The risk arises from negative trends on the stock markets
and consequently fluctuations in the fair value of the financial investments. Moreover, the
company is exposed to changes in the recoverable value of investments in subsidiaries in
individual financial statements.
LOW
HIGH
The Group/company has no special hedging. Since the assets are mainly pledged for the
repayment of borrowings and the lienholder’s consent is required before the sale, the risk of
achieving a suitable price in the existing economic situation is even higher.
Currency risk
The Group is exposed to the currency risk particularly in respect of the fluctuation of the
EUR/HRK and EUR/RSD currencies. The controlling company operates solely in euros and it
is therefore not exposed to the currency risk.
MEDIUM
The Group/company has no special risk hedging instruments. On the basis of expected
fluctuations of macroeconomic indicators we will try to adapt to the risk by closing currency
positions in order to minimize the currency risk.
Interest rate risk
Interest rate risk is mainly tied to the EURIBOR.
In terms of the amount of unsettled borrowings, the controlling company Merkur, d. d., is
most exposed to this risk since it has a fixed interest rate in 2013 on the borrowings in respect
of the compulsory settlement proceedings; it will increase over the years until the final
repayment of liabilities referring to the compulsory settlement has been made. Additional
borrowings are tied to market interest rates such as applicable in the time of raising the
borrowings referring to the confirmed compulsory settlement. Group companies are
exposed to the interest rate fluctuation.
MEDIUM
37
INTRODUCTION
Insolvency risk
Insolvency risk is one of the most important risks the Group/company is exposed to.
Within the confirmed compulsory settlement proceedings, the controlling company Merkur,
d. d., is required to ensure the regular payment of liabilities referring to the confirmed
compulsory settlement. The covenant for the repayment of mutual guarantees in respect
HIGH
of the Merkur Group companies, the planning of liquidity is the priority task. Cash flow
planning on the Group level is performed on a weekly basis and it is updated on every
change of plan items.
Risk of additional tax assessment in respect of subsequent tax inspections
In accordance with the tax legislation, the Tax Office has the right to inspect the correctness
of the tax and contributions accounting in the period of the last five years. Merkur, d. d., as a
controlling company of the Group, is obliged to settle its liabilities, which were reported for
the compulsory settlement, in accordance with the confirmed Financial Restructuring Plan,
whereby the ZFPPIPP sets forth that a creditor can subsequently, i.e. after the compulsory
settlement has been confirmed, report its receivable that had occurred before the start of
the compulsory proceedings, and it is repaid in accordance with the confirmed Financial
Restructuring Plan. The same applies for the company Mersteel, d. o. o.
MEDIUM
After the confirmed compulsory settlement, the Tax Office carries out tax inspections and
imposes taxes on disputed transactions, which have harmed the company and against
which claims have been or will be lodged. Since an appeal does not stay execution in
accordance with the adopted tax legislation, Merkur/Mersteel is exposed to significant
risk related to additional taxations with inestimable amounts in the event of recurring
tax inspections and taxation of the disputed transactions carried out by the former
Management Board.
The Group/company hires tax advisors and attorneys in the procedures of tax inspections.
Operational Risks
Operational risks are connected to the implementation and control of business processes and activities and the expenditure
and respective costs incurred.
Strategic risks
Strategic risk refers to the risk of realizing the set strategy, satisfying and monitoring the
plan, and to an active response to deviations from the plan, as well as adopting corrective
actions.
The Merkur Group has established regular reporting based on which any deviations from
the set guidelines are identified. The Management Board adopts corrective actions with the
aim of following the planned result of operations.
Risk of operational product group management
The timely supply to shopping centres with the ordered goods is essential for the realization
of the plan.
The risk is limited by means of an active ordering process, by ensuring back-up stock and by
carrying out transactions with checked suppliers who take care of the safety and quality in
the production and supply of products.
38
MEDIUM
MEDIUM
The risk of the actual state in the area of mutual guarantees and intertwining of the
Group companies
The operational implementation of the adopted financial plans carries a high level of risk in
the individual financial statements of the controlling company Merkur, d. d., as the holder of
given corporation guarantees and sureties to the Group companies.
HIGH
The risk is being minimized through an active cooperation with everyone involved and by
searching for the solutions at the Group level with the active cooperation of the financial
advisory firm Roland Berger.
Disinvestment risk
The implementation of the set disinvestment activities and their timely implementation is
essential for the realization of the proposed plan and for the assurance of liquidity.
The risk is limited through the Management Board’s active cooperation in the processes of
negotiations and monitoring of the set time plan as regards the actively marketed property.
IT risk
The risk of the failure of the central information systems.
MEDIUM
LOW
The risk is decreased with the use of parallel system areas, which contain equipment.
HR risks
The risk connected with a lack of competent staff and the health and dissatisfaction of the
existing employees.
The primary activity of managing the HR risk will be ensuring a suitable level of employee
satisfaction, since the reorganization of operations will require the limitation of the rights
already attributed to employees. We endeavour to ensure the loyalty to the company and
decrease any departures by applying motivational measures.
MEDIUM
We have been systematically educating and training our employees. The education of
employees is monitored on a regular basis. Simultaneously, the responsibilities of employees
are increasing and they are also being encouraged to assume new tasks.
Legal risks
The legal department is in charge of the legal certainty and lawful operations.
The legal department is included in the work in all areas where necessary. Most of all it keeps track
of the legislation, reviews contracts, prepares internal acts and coordinates disputes.
Accident and cost risks
The risk of loss events and increased operating costs.
We limit any potential loss events that might negatively affect our profit or loss by applying
active prevention measures and securing loss events. We have insured the machinery
breakdown, employee liability and other accident situations.
Risk of operational reorganization of Merkur and the subsidiaries
The renovation of the management and operations of the subsidiaries represents the
basis for the reorganization process of the entire Merkur Group. Extensive changes in the
organization might cause standstills both in operations as well as the provision of services
to customers. This risk has particularly increased as a result of the compulsory settlement of
Merkur, d. d., and Mersteel, d. o. o., since a substantial emphasis is put on the optimization
(decrease) of all types of costs. The optimization of processes and a decrease in costs is one
of the key levers for achieving the threshold of the economic viability.
LOW
LOW
MEDIUM
The company is increasing the provision of information in the entire Merkur Group
through regular communications and setting up a clear reporting line, and by setting up a
department for the control over subsidiaries, the company is passing on the organizational
culture to all subsidiaries.
39
ANNUAL REPORT
Business Report of
Merkur, d. d., and
the Merkur Group
40
Financial results
Item
In € thousand
Merkur, d. d. 2012 Merkur, d. d. 2011 Merkur Group 2012 Merkur Group 2011
Revenue
242,843226,847
Earnings before interest and taxes – EBIT 1,284
-8,015
EBITDA (earnings before interest, taxes, depreciation, and amortization) 8,235
193
Profit before tax
-40,171
31,963
Assets – 31 December 429,599
508,867
Equity – 31 December
-39,391
4,125
428,889
-5,415
8,199
-20,860
645,801
-36,946
417,196
-24,794
-8,869
41,952
713,273
-10,345
In the period ended on 31 December 2012, Merkur, d. d., generated a revenue of €242,843 thousand (the Merkur Group:
€428,889 thousand), exceeding the 2011 result by €14,929 thousand (the Merkur Group: €11,963 thousand). From the
absolute perspective, the B2B channel contributed most to the increased sales at the Merkur, d. d., level, where the sales
increased by €8,594 thousand compared to the previous year (the Merkur Group: €10,127 thousand). The revenue from
services increased by €1,078 thousand on a year-on basis (the Merkur Group: €1,408 thousand) – the increase refers to
higher revenue from rent in connection with the optimization of the retail areas (subletting the excess capacities).
As a result of the savings measures, the operating expenses decreased on a year-on-year basis by €6,247 thousand (the
Merkur Group: €11,003 thousand). As compared with 2011, the decrease in expenses in 2012 was not as impressive as that
in 2011 compared to 2010, when we recorded a drop of €18,644 thousand (the Merkur Group: €30,835 thousand), since the
expenses dropped to the level of fixed operating expenses which can in the short run not be further decreased without a
radical change in business processes and the change of the entire strategy.
Compared to 2011, the group of costs that decreased the most in 2012 was the labour cost in the amount of €3,920
thousand (the Merkur Group: €5,424 thousand), the cost of amortization and depreciation by €1,255 thousand (the Merkur
Group: €2,311 thousand) and the cost of services by €953 thousand (the Merkur Group:
€3,056 thousand).
In 2012, Merkur, d. d., generated an operating profit of €1,284 thousand, which is in
accordance with the strategic plan, whereas the Merkur Group has generated an
operating loss of €-5,415 thousand due to the losses generated by its subsidiaries. The net
financing loss contributed to the loss before tax, which amounted to €-40,171 thousand
at Merkur, d. d. In 2012, Merkur, d. d., realized €1,736 thousand of financial revenue and
as much as €48,452 thousand of financial expenses, which are
mainly the result of impairments of investments in subsidiaries
(2012: €33,565 thousand, 2011: €19,211 thousand) and a loss
from the disposal of available-for-sale financial assets related
to the liquidation of collateral for bank loans in the amount of
€4,968 thousand. The Merkur Group also generated a loss before tax in
2012 in the amount of €-20,860 thousand; the Group also recorded a loss from
financing activities with the net financial loss of €-16,354 thousand, which is
€11,152 thousand down on the year before as a result of a lower loss from the
impairment of financial assets and loss from their disposal.
The net result of other revenue/expenses is €5,351 thousand, down by €46,372
thousand compared to 2011 (the Merkur Group: €909 thousand, down by €71,038
thousand compared to 2011). Other revenue in 2011 referred to the effect of the
cancellation of debt after the confirmed compulsory settlement (Merkur, d. d.,
40% discount in the amount of €51,724 thousand, Mersteel, d. o. o., 45% discount
in the amount of €14,872 thousand, a total of €71,947 thousand at the consolidated
level). In 2012, the result of other revenue/expenses is the result of other revenue in the
amount of €7,055 thousand, €4,484 thousand of which refer to the write-off of liabilities after
the compulsory settlement in connection with the liquidation of collateral in the amount of the
difference between the amount of the loan and the value of liquidated collateral, less the discount after the confirmed
41
ANNUAL REPORT
compulsory settlement – for the unsettled part of liabilities, a creditor entered the compulsory settlement as a creditor
with the right to separate settlement with a discount after the confirmed compulsory settlement in 2011 totalling 40% of
the unsecured liability. Revenue from the reversal of provisions related to the decrease in the value of security, which was
given to a bank for the repayment of the loan for a third/unrelated entity totalled €2,571 thousand – the security was given
in the form of shares the fair value of which decreased. Other expenses in 2012 totalled €1,704 thousand and refer to the
received tax decision of the Special Tax Office in respect of the carried out tax inspection of the correctness of salary tax
and contributions accounting in connection with the granted option entitlements in 2003 and 2004.
As at 31 December 2012, the balance sheet total was €79,268 thousand down on the balance on 31 December 2011 (the
Merkur Group: by €67,472 thousand); long-term assets decreased the most, by €69,220 thousand (the Merkur Group: by
€45,220 thousand).
The major reason for the decrease in the long-term assets of Merkur, d. d., was the decreased investments in the subsidiaries
in the amount of €33,565 thousand due to the formed impairments, and the available-for-sale financial assets decreased by
€29,194 thousand (mainly due to the liquidation of collateral in connection with the repayment of borrowing in the amount
of €25,585 thousand, and also partly due to a change in the fair value and impairments); at the Merkur Group level, the latter
represents the major reason in terms of the amount for the decrease in the balance of long-term assets compared to 31
December 2011.
€36,943 thousand of fixed assets, which were not used for the performance of activities connected with the generation of
revenue from the sale of goods and services or for administrative purposes, were reclassified in investment property; there
were €2,423 thousand of new purchases of fixed assets, and the remaining decrease in fixed assets refers to the accounted
cost of depreciation. The reclassification was also made at the Merkur Group level.
Short-term assets decreased by €10,049 thousand (the Merkur Group: €22,252 thousand), a majority of which went to the
cash and cash equivalents, which were down by €5,347 thousand compared to 31 December 2011 (the Merkur Group:
by €6,906 thousand) and the inventory in the amount of €2,243 thousand (the Merkur Group: by €7,962 thousand). The
total amount of accounts receivable dropped by €637 thousand (the Merkur Group: by €5,026 thousand); their structure
changed at the Merkur, d. d., level: while receivables to third parties decreased by €5,036
thousand compared to the balance at 31 December 2011, the receivables to
related persons increased by €4,108 thousand.
42
The balance of equity as at 31 December 2012 was negative and amounted to €-39,391 thousand (the Merkur Group:
€-36,946 thousand). As compared to 31 December 2011 the total equity dropped by €43,516 thousand (the Merkur Group:
by €26,601 thousand); of this €40,171 thousand (the Merkur Group: €20,877 thousand) refers to the net profit or loss for the
year, and €3,346 thousand (the Merkur Group: €2,381 thousand) to the reversal of the reserve for the fair value of financial
assets in the revaluation adjustment of equity. At the Merkur Group level, the translation reserve on equity increased by
€3,599 thousand compared to 2011 and amounted to €-22,098 thousand at 31 December 2012. In December 2012, the
conversion of debt into capital and the cancellation of debt in the total amount of €63,379 thousand was confirmed at the
controlling company Merkur, d. d. The capital increase will ensure capital adequacy to the controlling company Merkur,
d. d., and consequently the Merkur Group. The accounting recording of conversion will be implemented in 2013 on the
fulfilment of suspensive conditions and after the entry of the capital increase in the register of companies. The events after
the balance sheet date in point 9 “Business Events after the Balance Sheet Date” include detailed notes and a simulation of the
increase in the share capital were it recorded at the balance on 31 December 2012.
The total liabilities of Merkur, d. d., dropped by €35,752 thousand compared to the previous year, of which liabilities for
borrowings decreased by €33,097 thousand, liabilities for finance lease by €2,266 thousand, provisions by €11,028 thousand,
whereas operating liabilities to suppliers and others increased by €10,638 thousand, and at the Merkur Group level they
were down by €40,871 thousand.
Liabilities from borrowings received by Merkur, d. d., decreased by the repayments of long-term borrowings in the amount
of €8,450 thousand and short-term borrowings in the amount of €27,520 thousand (including the decrease referring to the
liquidation of collateral), write-offs of borrowings after the confirmed compulsory settlement totalling €4,486 thousand,
whereas the company received a new borrowing in 2012 in the amount of €7,063 thousand. At the Merkur Group level, the
total liabilities decreased by €33,648 thousand.
Finance lease liabilities decreased due to repayments.
As at 31 December 2012, provisions decreased by €11,028 thousand on a year-on-year basis (the Merkur Group: €5,191
thousand), of which long-term by €10,570 thousand and short-term by €458 thousand. Among the changes of long-term
provisions, the biggest effect (€3,319 thousand) refers to the reversal of provisions related to the decrease in the value of
security given to banks as guarantee for a third, unrelated entity; €1,460 thousand of tax provisions were reclassified to
long-term liabilities (the decision of the Tax Office became final, which resulted in the fulfilment of all the conditions for the
recognition of liabilities).
43
ANNUAL REPORT
The Business Environment and Trends in Industry
Macroeconomic Environment
Slovenia
After the growth of GDP in 2011 (0.6%), the recovery of the economic activity stopped in the first half of 2012. For the year
2012 we thus expect a 2.0% decline in the GDP to €35,700 million in current prices or €17.5 thousand per capita. Domestic
consumption (households, the state and investments in fixed assets) experienced a steep downturn, and the behaviour of
consumers also significantly deteriorated, whereas the situation on the labour market remained tough.
4
1
2
0
0
-1
-2
-2
-4
-3
-6
-4
-8
-5
-10
Quarterly, seasonally adjusted (left axis)
Year-on-year change, in %
2
Year-on-year (right axis)
Due to the poor situation on the labour market
and the measures for the consolidation of the
public finance, the domestic consumption
is expected to decrease by 5.8%; private
consumption is anticipated to drop by 3.0%,
and the national consumption by 3.4%. In the
2008–2011 period, the available household
income realistically dropped by 2.4%. The
estimate of the available income in 2012
anticipates a real decrease of 3.3%.
(IMAD; 2012 Autumn Forecast of Economic Trends).
Q1 12
6
Q1 11
3
Q1 10
8
Q1 09
4
Q1 08
Quarterly seasonally adjusted change, in %
Gross domestic product in Slovenia (Source: SURS)
Available income of households and NPISH and private
consumption (Source: SURS)
7
The estimate of gross investments for 2012
anticipated a decrease for the fourth successive
year, this time by 9.0%. In terms of construction
investments, the construction of apartments
continued to decrease the most along with large
inventories of unsold apartments.
5
4
3
2
Real change, in %
According to the labour force questionnaire,
the unemployment rate assessment is by 0.1
percentage point higher in 2012 compared to 2011,
and the average number of registered unemployed
population is (109.7 thousand) slightly below last
year’s number. The estimate of year-on-year inflation
in 2012 is on average 2.8%.
6
1
0
-1
-2
-3
Private consumption
-4
1996
1997
1998
1999
2000
2001
2002
2003
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Available income
Forecast
44
Slovenia
Real GDP growth (%) GDP per capita (in €) • real private consumption (%)
• real national consumption (%)
• real investment consumption (%)
2010
2011
Estimate 2012
Forecast 2013
1.4
0.6
-2
-1.4
17,379
-0.7
1.5
-8.3
17,620
0.9
-1.2
-8.1
17,457
-3
-3.4
-9
17,327
-3.6
-6.9
1.3
Real export of goods and services (%)
9.5
7
0.1
1.9
Real import of goods and services (%)
7.2
5.2
-5.2
-1
Level of registered unemployment (in %) 10.7 11.8
11.9
13.1
Salary per employee (gross, real growth rate – %) 2.1
0.2
-2.3
-1.3
Inflation – annual average 1.8
1.8
2.8
2.2
Source: IMAD: JNGG 2012, NLB analytics
Croatia
In the first nine months of 2012, GDP decreased by 1.8% (as compared to the same period of 2011). Since the start of the
economic crisis that struck the country in 2009, the output of the country decreased by approximately 10%. The domestic
consumption fell drastically. As compared with 2011, the drop was much steeper (by 2.7% compared to 0.4% in 2011).
Private consumption, which accounts for the major share in the structure (around 56%) recorded the highest real decrease,
which was affected by the fall in the total available assets, which are a result of the real drop in net salaries, a decrease in
salary premiums and increase in unemployment rate. Likewise, prices of some goods and services also increased.
In November 2012, the registered unemployment level was 20.4% (around 347,000 unemployed), which is the highest since
the start of the crisis. In November, the level of unemployed population was by 45,000 or almost 15% on a year-on-year
basis.
The construction industry is still facing a downward trend. In the first nine months of 2012, the total value of finished
construction work was down by 6.6%.
In December, the Croatian kuna further dropped compared to the euro. At the end of December, the exchange rate was
around HRK 7.55/EUR. In 2012, the kuna thus lost approximately 0.2% of its value compared to the euro.
Croatia 2010
2011
Estimate 2012
Real GDP growth (%) -1.2
0
-1.1
GDP per capita (in €)
10,396
10,427
11,026
Inflation, average of year (in %) 1.1
2.3
2.9
Registered unemployment rate (in %) 17.6
18
17.6
Source: Statistical Office and NLB analytics
Serbia
In the first eight months of 2012, GDP dropped by 1.8% (compared with the same period in 2011). According to the forecasts
of the Statistical Office, the Serbian economy was to shrink by 1.9% and 2.0% in 2012, mainly due to the decrease in foreign
investments and a drop in domestic consumption. According to the estimate of NBS, the inflation level at the year-end
should be 13.8%.
According to the Labour Force Questionnaire in October 2012, the unemployment rate in October was 22.4% (3.1 percentage
points) less than in April 2012, and the employment rate in the same comparison was higher by 2.4 percentage points and
amounted to 36.7% in October. According to the last available data, more than 170,000 people lost their jobs in Serbia alone
in 2012, which increased the total number of unemployed people to 755,442 persons.
The construction industry (measured in working hours) dropped by 2.3% in the first nine months of 2012 (compared to the
same period in the year before), and by 5.1% compared to the average in 2011.
The industrial production dropped by 3.4% in the first eleven months of 2012 (compared to the same period in the year
before).
45
ANNUAL REPORT
In the first half of 2012, the dinar dropped compared to the euro but it then stabilized in the second half of the year. At the
end of 2012, the conversion rate of the dinar was around 113.0 for one euro, which represents approximately a 6.0% drop in
the value of the dinar according to the end of 2011.
Serbia 2010
2011
Estimate 2012
Real GDP growth 1
1.6
-2
GDP per capita (in €) 3,841
4,290
3,967
Inflation, average of year (in %) 6.8
11.3
4.3
Unemployment rate, ILO (in %) 19.2
23.7
25.5
Source: Statistical Office and NLB analytics
Bosnia and Herzegovina
Private consumption is facing a downward trend, particularly because of the continued economic crisis, the increasing
unemployment, the decrease in salaries of the public sector, the decrease of social aid and of poor loan conditions.
On a year-on-year basis, the growth in the prices of provisions was slightly lower in November than the month before
(+2.3%); the prices were on average 1.9% higher, and the monthly comparison recorded deflation in the amount of 0.1%.
The negative trend in the industrial production continued in November. On a year-on-year basis, it was 4.6% lower, and in
the first eleven months of 2012 it was 5.3% down on the same period in 2011.
Bosnia and Herzegovina
2010
2011
Estimate 2012
Real GDP growth 0.72
1.26
0.1
N/A GDP per capita (in €, USD*) 3,293
Inflation, average of year (in %) 2.1
3.7
4,261*
2.3
Unemployment rate, ILO (in %) 27.2
27.6
51
Source: Statistical Office and NLB analytics
Macedonia
In the third quarter of 2012, the GDP recorded a 0.2% growth on a year-on-year basis, after recording growth of 1.3% in the
same period in 2011.
In November, the prices of provisions remained at the same level as the month before, while they were 4.6% higher on a
year-on-year basis. The industrial production in November was 4.6% lower year-on-year, and in the first eleven months of
this year it was down by 6.5% compared to the same period in the previous year.
In the third quarter of 2012, the unemployment rate decreased by 1.8 percentage points compared to the same period in
2011, amounting to 30.6%, meaning there were 288,159 unemployed people.
Macedonia 2011
Estimate 2012
Real GDP growth (%) 2.9
2.8
0
GDP per capita (in €) 3,350
3,565
3,831
Inflation, average of year (in %) 1.6
3.9
2.8
Unemployment rate (ILO), in % 32
31.4
30.9
Source: Statistical Office and NLB analytics
46
2010
Changed Behaviour of Consumers and the Market Situation
In the last few years, the Slovenian market has been marked by the economic crisis, which also continued in 2012. Consumers
responded to the economic crisis by saving, planning and rationalizing their purchases. The recession and the stagnation
of purchasing power are reflected in the smaller volume of purchases and the value of the shopping basket. A smaller
shopping basket is a reflection of both the decreased quantity of purchases as well as the increased purchases of lower
price class products. The share of purchases of famous brands has been slightly decreasing, which consequently increases
the share of purchases of own brands. In terms of cost reduction, purchases are also becoming more rational as regards
the technical characteristics of the products. Consumers have started saving on energy consumption in households.
Consequently, purchases of products in the energy saving categories (EU energy label, A+++ to D) have been increasing.
20
Consumer confidence indicator(1), Slovenia, January 2005 – December 2012 (Source: SURS)
Slovenia
Average Slovenia in 2005 – 2011
1) The value of the consumer
confidence indicator can range
between -100 and +100. The
consumer confidence indicator is
the average of the balances from
answers to questions about the
expected financial situation in the
household, the expected economic
climate in the country, the expected
unemployment level and the savings
of households in the next 12 months.
15
10
percentage points
5
0
-5
-10
-15
-20
-25
-30
-35
-40
-45
2005
2006
2007
2008
2009
2010
2011
2012
Even though the market volume shrunk in 2012, Merkur managed to grow and increase its market share compared to 2011.
In 2013 we can expect a further continuation of the negative market trend. Nevertheless, Merkur will endeavour to keep
its position as one of the largest companies in the industry, and increase the market position with relevant market shares.
While all the segments of operations faced a drop in the market in 2012, Merkur managed to improve its position and also
increase its market share in the DIY segment and appliances in 2012.
120
Real income index in retail trade without motor fuels 1),
Slovenia, December 2007 – December 2012 (o 2005=100) (Source: SURS, Real income indexes in trade)
Indices
115
Seasonally adjusted data
110
Trend
105
1) Seasonal and calendar impacts
are excluded from the data.
100
-95
90
XII 2007
XII 2008
XII 2009
XII 2010
XII 2011
XII 2012
47
ANNUAL REPORT
Marketing
Our vision and mission is to be the leading provider in the industry. We want to be the best in the entire width and depth
of the range of products we offer in terms of the DIY, appliances and seasonal categories. We are consumer oriented and
place the consumer at the centre of our operations: by offering high-quality and competitive products at low prices, a
wide range of services, a modern and pleasant shopping experience, friendly options of credit payments, many shopping
centres, an online store and in many other ways we endeavour to be the top provider and the first consumer’s choice.
In 2012, the marketing activities in Merkur were focused on the further revitalization of the Merkur brand. Merkur managed
to actively and successfully defy the many negative trends in the industry, which affected the consumer climate in 2012.
Merkur is proud to be able to pamper its customers, putting them in first place. In 2012, we adapted our activities to the
changed shopping habits. The only way to create a competitive advantage is to enable a unique user experience; therefore,
we stand in favour of the multichannel marketing strategy. The user experience is in each contact of the consumer with the
brand. The quality of the user experience represents an important factor in the user experience and it depends on a variety
of objective and subjective parameters. If we want to fulfil the expectations of users/consumers, we need to approach
them and comprehensively connect all physical and virtual channels.
With this aim we continued presenting our range of products in all the classical communication channels. We rearranged
and optimized the sales areas at our shopping centres. Most of all, we have continued developing Merkur’s online
presentation with its modern online store and the best range of technical products offered in Slovenia. We are trying to
ensure that Merkur’s online store gets even closer to our customers, thus providing them an even easier and friendlier
experience. In doing this, one of the many newly introduced features in our online store is the application of presenting
the stock of items according to each individual shopping centre. This has enabled our customers an even faster overview
of the products offered and consequently easier shopping.
Our policies to a comprehensive user experience and the key factors affecting its quality are definitely transparency,
simplicity and accuracy. Simplicity and the right information at the right time help our customers when making purchases
in shopping centres as well as other communication tools.
The changed consumer behaviour has encouraged us to prepare a new pricing strategy and to continue optimizing
the range of our products. The main guideline in developing Merkur’s range of products has remained relevance and
competitiveness.
The development of our range of products continues to be supported by the so-called pull and push strategy. Within
the pull strategy, we present the entire width and depth of the range of products in the DIY, appliances and seasonal
categories. We thus provide customers with an in-depth insight into Merkur’s range of products and the possibility of
finding and selecting suitable products among the presented range of products in terms of their technical characteristics
as well as their price. Within the push strategy, we formed the category of “unbeatable prices”, which are the lowest on the
market at any given moment. By means of the push strategy, we print leaflets offering appealing products from the total
range of products, which is extremely seasonally oriented and aggressive in terms of price.
We devote special attention to price formation, as we have undertaken to form fair prices without misleading the customers.
The results of a questionnaire have strengthened our belief that compared with many special deals with reduced prices
and discounts, customers appreciate much more competitively formed basic prices of products. Thus we introduced two
new price labels in addition to the regular price to help customers make their purchases:
• The unbeatable price: the “Unbeatable price” symbol marks products that are available at the lowest retail price on the market the day a catalogue is published. The price is set based on a price analysis of equal or comparable products from competitive retail stores in Slovenia.
• Sales hit: the “Sales hit” symbol marks products for which sales analyses show that they have the biggest sale potential because of their relation between price and technical characteristics.
The changed consumer behaviour in terms of making more rational purchases has been
present for a long time now. The key indicator of changed shopping habits is the focus on
the value and additional benefits. Wishing to build trust and long-term relationships with
consumers, Merkur has been maintaining the loyalty programme supported with the Merkur
loyalty card, which is one of the oldest and largest loyalty programmes in Slovenia in terms of
numbers.
48
SLO
t
ug o dn os
t
i
k ar
ic a
New Merkur's loyalty card
In 2012, we started to modernize the Merkur loyalty card, which was vital in such a demanding
time and a big challenge for us. The modernization represents a big advantage for us, as
it enables us to transfer to an operatively simpler and more state-of-the-art system. Card
holders will have even more advantages using the new card, as it delivers easier operations
and many additional benefits. In 2013, we are also preparing a new programme of benefits
and activities intended for our loyal customers.
In 2012, the Big Bang division carried out a major marketing research on the recall and perception of the Big Bang brand
after 2009. The recession and general belief that Big Bang’s prices are not among the lowest, the division introduced the
“Guaranteed lowest price” activity in 2012, which is used to build the price perception among buyers. Furthermore, we
introduced the “Hit the target on Wednesday”, when the prices are reduced by 20–50%. The “Always low price” label
determines the lowest price in the respective segment; products are exposed online and at the points of sale – again
intended for rational customers.
Our rational customers will be offered the Big Bang Bonus loyalty programme in 2013, and we have offered our customers
the possibility of payment in instalments through special deals. The activity was very successful, but unfortunately the cost
of financing was very high.
We have also been engaged with emotional customers whom we offer new technologies and the option of testing
technologically advanced products at the points of sale. According to the Google Consumer Barometer, 50–60% of buyers
find information online, therefore we will in 2013 put a major focus on our website, which has already been refreshed and
where we will take care of informative, entertaining and educational contents.
Own Brands
Our own brand products represent the top quality in their respective price classes. In terms of quality, they are comparable
with the products of brands of established producers, while they are more affordable in terms of price.
Products offered under the brands MTECH, BIVA and MQ are a addition and upgrade to the Merkur Group’s range of
products, and they strengthen Merkur’s market differentiation and fulfil the need for more competitive conditions.
Brand managers as specialists for certain brands consistently provide an optimal range of products, make sure it is broad
and deep enough, as well as usable, and of a high-quality and appealing design. Our vision is to bring high quality and
aesthetics closer to all our customers.
MTECH – Simple, With Lots of Joy
MTECH is a brand for products for the home workshop, garden and construction work: power
tools, workshop equipment and utilities, gardening tools and machinery. Products that have a
modern design, are innovative and made from materials with tested quality. The use of such
products is not complicated, which makes them useful for DIY enthusiasts.
BIVA – A Nicer, More Attractive Home
BIVA products are used for creating, enriching and beautifying our living environment: bathroom
equipment, household appliances, decorative products, colours, furniture and floor decking,
garden furniture and other outdoor products. Modern materials, attractive colours and shapes and
the innovative nature of the products attract everyone who enjoys the comfort and aesthetics of
their own home.
MQ
The MQ brand is used to market mostly generic products that are needed for basic household
furnishings. They are extremely functional, whereas the brand is not an important distinguishing
factor. They include: construction tools and materials, installations, workshop equipment and tools,
gardening equipment, landscaping products, energy products, etc. The range of MQ products is
intended primarily for rational and price sensitive customers, both professionals as well as DIY
users.
49
ANNUAL REPORT
The arrangement of the portfolio on all types of goods has also partly changed the content of our
own brand products. The total number of products has even shrunk slightly, and it now comprises
5,700 products. Considering the already well stocked technical goods of the MTECH brand, we have
focused more on the development and expansion of the BIVA brand in the last year, i.e. a range of
products from the household and summer programme products. The MQ brand still has the majority
of products, and this is also where we generate most sales’ revenue.
The breakdown of the total sales of own brands is as follows:
Share of sales by brand in 2012
Number of own brand products
MTECH
33%
MTECH
25%
MQ
45%
BIVA
29%
MQ
46%
BIVA
22%
Sales by countries
SERBIA
7%
CROATIA
7%
BOSNIA IN HERZEGOVINA
2%
SLOVENIA
84%
BOF
BOF is the own brand of the Big Bang subsidiary. BOF products comprise primarily computer
hardware – stationary computer components, which convince many buyers with their favourable
price-quality ratio.
Own brand products are sold throughout the entire Merkur chain, i.e. also in subsidiaries abroad. The sale of own brands in
the total sales of the Merkur Group increased in 2012 by 4% as compared with the year before. In terms of the sale of product
groups where the prevailing share consists of own brands, we exceed a 35% share of the sales, which is comparable with
Western European DIY traders.
50
Employees
The number of employees in the Merkur Group also continued to drop in 2012, by 7.3% compared to 2011, since we are still
facing a drop in sales and consequently have too many employees. Therefore, almost all companies of the Merkur Group
have taken up a systematic downsizing approach.
Employees by companies of the Merkur Group
Balance
Company
31 Dec 2012
31 Dec 2011
Index
MERKUR GROUP3,089 3,331
92.7
THE MERKUR DIVISION
2,276
2,495
91.2
Merkur, d. d. 1,775
1,934
91.8
Merkur Hrvatska, d. o. o.
253
282
89.7
Merkur International Beograd, d. o. o.
Intermerkur Nova, d. o. o., Sarajevo
194
54
204
75
95.1
72.0
THE MERSTEEL DIVISION
321
345
93.0
Mersteel, d. o. o., Naklo
122
123
99.2
Mersteel, d. o. o., Hrvaška
24
30
80.0
Mersteel, d. o. o., Beograd
36
47
76.6
Mersteel Profil doo, Beograd
77
78
98.7
Mersteel, d. o. o., Sarajevo
Merkur Makedonija, doo, Skopje
27
35
32
35
84.4
100.0
THE BIG BANG DIVISION
492
491
100.2
Big Bang, d. o. o., Ljubljana
429
449
95.5
Big Bang, d. o. o., Beograd
63
42
150.0
The educational structure of employees at the Merkur Group and Merkur, d. d., in % as at 31 December 2012
In spite of many departures, the educational structure of employees has remained at the same level as in the previous
years. Through in-house trainings we have managed to keep the level of employees’ competences for work and placed a
big emphasis on ensuring safe working conditions. We also offered our employees the possibility of spending their annual
leave in our holiday facilities at favourable prices.
45.0
38.1
35.3
35.0
37.6
Merkur Group
32.6
30.0
Merkur, d. d.
25.0
20.0
15.0
9.4
10.0
5.0
0.0
3.9
4.3
I. 10.9
10.5
3.8
0.7
0.7
0.7
10.0
II.
III. 0.7
IV. V.
VI.
VII.
0.7
VIII. 0.0
0.0
IX.
51
FINANCIAL REPORT
Financial Report
for 2012
52
Audited Financial Statements of Merkur, d. d., and the Audited
Consolidated Financial Statements of the Merkur Group
All data (totals, differences, ratios and indexes) have been calculated from a value in euros and not in thousands
of euros.
Statement of Financial Position as at 31 December 2012
In € thousand
Merkur, d. d. Item
Note
31 Dec 2012
Intangible assets
5.1
Property, plant and equipment
5.2
Investment property
5.3
Investments in subsidiaries
5.4
Long-term financial assets
5.6
Loans given 5.7
Long-term assets classified held for sale
Other long-term receivables
Total long-term assets
255
152,314
58,955
41,017
57,724
30,091
0
394
340,750
Merkur, d. d. Merkur Group Merkur Group
31 Dec 2011 31 Dec 2012
31 Dec 2011
570
195,558
22,012
74,583
86,919
30,109
0
219
409,970
1,506
339,788
87,236
0
59,385
30,143
0
509
518,566
1,666
404,434
22,160
0
88,178
30,595
16,419
334
563,786
Inventories
5.8 39,524 41,767 76,27284,234
Short-term financial assets131313
166
Loans given
5.9
6,129
6,144
388
405
Current tax receivable 0
0
84
66
Trade receivables and other assets 5.10
40,420
41,057
45,095
50,521
Assets held for sale
5.11
0
1,807
0
1,807
Cash and cash equivalents
5.12
2,763
8,110
5,382
12,288
Total current assets
88,849
98,898
127,235
149,487
TOTAL ASSETS
429,599
508,867
645,801
713,273
Issued equity3,0663,0663,0663,066
Equity reserves00
1,869
1,853
Own shares (as a deductible item)
0
0
-33,616
-33,616
Retained net earnings/loss
-76,306
-36,136
-41,381
-22,120
Fair value reserve
33,848
37,194
55,199
58,955
Translation reserves00
-22,098
-18,499
Total equity of partners in controlling company
-39,391
4,125
-36,962
-10,360
Non-controlling interest0015
15
Total equity
5.13
-39,391
4,125
-36,946
-10,345
Borrowings 5.14 207,745 272,210264,433324,965
Finance lease liabilities
5.15
50,764
53,217
134,354
138,017
Long-term liabilities
5.16
23,699
32,029
28,206
38,214
Provisions 5.17 11,205 21,77516,90621,629
Total long-term liabilities 293,413
379,231
443,899
522,824
Borrowings 5.18114,456 83,088134,798107,914
Finance lease liabilities
5.15
2,626
2,439
4,241
4,410
Trade and other payables
5.19
58,053
39,085
99,178
81,637
Current tax liabilities
0
0
15
1
Liabilities classified in the held for sale
0
0
0
5,749
Provisions 5.17 442 900 6151,083
Total short-term liabilities
175,578
125,512
238,848
200,794
Total liabilities
468,991
504,743
682,747
723,618
TOTAL EQUITY AND LIABILITIES
429,599
508,867
645,801
713,273
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
53
FINANCIAL REPORT
Statement of Comprehensive Income for the Period Between
1 January 2012 and 31 December 2012
In € thousand
Merkur, d. d. Merkur, d. d. Merkur Group Merkur Group
Item
Note2012201120122011
REVENUE 6.1
Cost of goods sold GROSS PROFIT Other operating revenue
6.2
Selling expenses
6.3
General and administrative expenses 6.3
Other operating expenses
6.4
OPERATING PROFIT/LOSS Financial income
6.5
Financial expenses
6.5
NET FINANCIAL INCOME/EXPENSES Other revenue
6.6
Other expenses
6.7
PROFIT/LOSS BEFORE TAXES
Income tax
6.10
PROFIT/LOSS FOR THE YEAR
Net loss/profit attributable to the owners of the controlling company
Net loss/profit attributable to the non-controlling interest 242,843
-177,027
65,817
7,263
-50,094
-19,145
-2,556
1,284
1,736
-48,542
-46,806
7,055
-1,704
-40,171
0
-40,171
-40,171
0
226,847
-163,066
63,781
6,061
-55,010
-20,477
-2,369
-8,015
31,695
-43,441
-11,746
51,724
-
31,963
0
31,963
31,963
0
428,889
-320,768
108,121
10,682
-87,643
-28,334
-8,241
-5,415
8,793
-25,147
-16,354
7,055
-6,146
-20,860
-17
-20,877
-20,877
0
417,196
-310,129
107,066
6,425
-96,612
-30,368
-11,306
-24,794
30,917
-36,119
-5,202
72,236
-289
41,952
-19
41,933
41,933
0
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
Statement of Other Comprehensive Income for the Period Between
1 January 2012 and 31 December 2012
In € thousand
Merkur, d. d. Merkur, d. d. Merkur Group Merkur Group
Item
Note
2012
2011 2012
2011
Net profit/loss for the year
-40,171
31,963
-20,877
41,933
Other comprehensive income in the year
Disposal of property
-21
667
-21
612
Changes in the fair value of property
-
-6,425
-863
-5,828
Changes in the fair value of available-for-sale financial assets
7.1-1,030-11,998-1,030-11,998
Disposal of available-for-sale financial assets 7.1
-2,295
-7,245
-2,295
-7,245
Foreign exchange differences from translations related to foreign subsidiaries
-
-
-
479
Total other comprehensive income for the period
-3,345
-25,001
-2,483
-23,979
Total comprehensive income for the period
-43,516
6,962
-23,360
17,953
Of which attributable to:
• The controlling company
-43,516
6,962
-23,360
17,953
• non-controlling interest
-
-
-
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
54
Statement of Cash Flow for the Period Between
1 January 2012 and 31 December 2012
In € thousand
Merkur, d. d. Merkur, d. d. Merkur Group Merkur Group
Item2012201120122011
PROFIT/LOSS FOR THE YEAR
-40,171
31,963
-20,860
41,933
Adjustments:
Depreciation and amortization
6,952
8,208
13,614
8,208
Loss (proceeds) from the disposal of property, plant and equipment
-208
-676
2,883
332
Investment income (expense)
37,456
16,498
6,901
-818
Financial income (expense) 9,111
-56,805
7,880
-69,672
Change in provisions and other accruals
-9,111
-509
-3,250
-612
Impairment of assets
-5,041
-152
-7,518
7,444
Other equity effects and/or effects in statement of comprehensive income
17
-
-443
19
Foreign exchange differences
-15
1
-887
-66
ADJUSTMENTS TO THE STATEMENT COMPREHENSIVE INCOME
39,160
-33,436
19,180
-55,165
Increase/decrease in trade receivables
-5,679
-19,479
-1,371
-23,660
Increase/decrease in deferred expenses and accrued revenue
-
-
-
Increase/decrease in inventories
3,608
-2,938
9,958
-887
Increase/decrease in available-for-sale assets
-
-
-
Increase/decrease in trade liabilities
10,206
-604
1,154
18,501
Increase/decrease in accrued expenses and deferred revenue
-10
-3,590
-20
-4,839
Increase/decrease in liabilities classified as held for sale
-
-
-3
Increase/decrease in tax assets and liabilities
-
-
-25
Income tax expense---CHANGE IN WORKING CAPITAL
8,125
-26,612
9,695
-10,885
CASH FLOW FROM OPERATING ACTIVITIES
7,115
-28,085
8,015
-24,117
Proceeds from sale of property, plant and equipment
7,865
10,158
8,718
16,193
Acquisition of property, plant and equipment
-983
-411
-2,433
-2,681
Proceeds from financial investments
20,622
-168
20,251
-168
Proceeds from loans given
207
322
757
321
Interest received
1,179
1,220
1,200
1
Dividends received9
2,4509
2,450
Foreign exchange differences
-
-
4,607
8,451
CASH FLOW FROM INVESTING ACTIVITIES
28,900
13,572
33,109
24,567
Proceeds from long-term loans
-
35,000
-
35,000
Acquisition of long-term loans
-8,450
-3,293
-8,450
-3,293
Proceeds from short-term loans
7,063
-
18,569
7,063
Acquisition of short-term loans
-27,520
-5,696
-39,452
-23,548
Acquisition of finance lease – long-term
-4,118
-2,245
-9,438
Acquisition of finance lease – long-term
-1,000
228
-103
Interest paid
-7,336
-6,954
-7,403
-14,600
Foreign exchange differences
-
-
-1,756
-375
CASH FLOW FROM FINANCING ACTIVITIES
-41,361
17,040
-48,033
247
CASH FLOW FOR THE PERIOD
-5,347
2,527
-6,909
697
Cash and cash equivalents at the beginning of the accounting period
8,110
5,584
12,290
11,593
Cash and cash equivalents at the end of the accounting period
2,763
8,110
5,382
12,290
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
55
FINANCIAL REPORT
Unconsolidated Statement of Changes in Equity of Merkur, d. d., for the
Period Between 1 January 2012 and 31 December 2012
Item
Share
capital
Capital
reserves
Reserves for
treasury shares
Balance at 31 December 2010
Other comprehensive income in the accounting period
Net profit/loss for the period
Total comprehensive income in the accounting period
54,773
-
-
0
0
-
-
0
53,159
-
-
0
Transactions with owners
Debt to equity swap as part of CS*
1,885
95,723
-
Withdrawal of treasury shares
-
-
-53,159
Decrease in the share capital due to the decrease in the nominal value of the share
-53,592
53,592
-
Covering the loss -
-149,315
-
Balance at 31 December 2011
3,066
0
0
Other comprehensive income in the accounting period
-
-
-
Net profit/loss for the period
-
-
-
Total comprehensive income in the accounting period
0
0
0
Transactions with owners
Balance at 31 December 2012
3,066
0
0
* CS – compulsory settlement
The items of other comprehensive income are presented in the net value less deferred taxes.
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
Statement of Changes in Equity of the Merkur Group for the Period Between
1 January 2012 and 31 December 2012
Share
Capital Statutory
Reserves for Other reserves
Own
Item
capital
reserves
reserves
own shares from earnings
shares Balance at 31 December 2011
3,066
0
1,767
0
87
-33,616
Comprehensive income for the accounting period
Net profit/loss in the accounting period
-
-
-
-
-
Other comprehensive in the accounting period
-
-
-
-
-
-
Total comprehensive income for the accounting period
-
-
-
-
-
-
Transactions with owners
Other changes in equity
-
-
-
-
-
-
Foreign exchange difference related to the consolidation
-
-
15
-
-
-
Balance at 31 December 2012
3,066
0
1,782
0
87
-33,616
The items of other comprehensive income are presented in the net value less deferred taxes.
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
56
in € thousant
Treasury
shares
(Retained) profit/loss
Reserve for fair value
of property
Reserve for fair value
of financial assets
TOTAL
EQUITY
-53,159
-
-
0
-218,080
667
31,963
32,630
40,017
-6,425
-
-6,425
22,844
-19,243
-
-19,243
-100,446
-25,001
31,963
6,962
-
-
-
-
53,159
-
-
-
-
-
-
-
-
149,315
-
-
0
-36,135
33,592
3,601
-
-21
-3,325
-
-40,171
-
-
0
-40,171
-21
-3,325
97,608
0
0
0
4,125
-3,345
-40,171
-43,516
0
-76,306
33,572
277
-39,391
In € thousand
TOTAL EQUIRY
Reserve for fair
Reserve for OF PARTNERS
(Retained)
value of land
fair value of Translation
IN CONTROLLING UNCONTROLLING
TOTAL
earnings/loss
and buildings
financial assets
reserves
COMPANY
INTEREST
EQUITY
-22,120
55,354
3,601
-18,499
-10,360
15
-10,345
-20,877
-
-
-
-20,877
-
-20,877
-
842
-3,325
-
-2,483
-
-2,483
-20,877
842
-3,325
-
-23,360
-
-23,360
-364
-
-
-
-364
-
1,976
-1,273
-
-3,599
-2,881
-
-41,381
54,922
277
-22,098
-36,962
15
-364
-2,881
-36,947
57
FINANCIAL REPORT
Statement of Changes in Equity of the Merkur Group for the Period Between
1 January 2011 and 31 December 2011
Share Capital
Statutory
Reserve for
Item
capital
reserves
reserves
own shares
Balance at 31 December 2010
54,773
0
1,798
53,159
Comprehensive income for the accounting period
Net profit/loss in the accounting period
-
-
-
-
Other comprehensive income for the period
-
-
-31
-
Total comprehensive income in the accounting period
0
0
-31
0
Transactions with owners
Distribution of the net profit under the decision of the Management and Supervisory Boards -
-1,728
-
-
Debt to equity swap as part of the compulsory settlement
1,885
95,723
-
-
Conversion of receivables into treasury shares
-
-
-
-
Withdrawal of treasury shares
-
-
-
-53,159
Decrease in the share capital due to the decrease in the nominal value of share
-53,592
53,592
-
-
Divestitures of companies
-
-
-
-
Foreign exchange differences
-
-
-
-
Covering the loss
-
-147,586
-
-
Balance at 31 December 2011
3,066
0
1,767
0
The items of other comprehensive income are presented in the net value less deferred taxes.
The accounting policies and notes are an integral part of the financial statements and should be read accordingly.
58
In € thousand
Reserve
Reserve
TOTAL EQUITY
for fair
for fair OF PARTNERS
value of
value of
IN
UNOther reserves
Own
(Retained
land and
financial
Translation CONTROLLING CONTROLLING
TOTAL
from earnings
shares earnings/loss
buildings
assets
reserves
COMPANY
INTEREST
EQUITY
87
-53,159
-214,670
61,181
22,844
-19,416
-93,401
15
-93,386
-
-
41,933
-
-
-
41,933
-
41,933
-
-
612
-5,828
-19,243
511
-23,979
-
-23,980
0
0
42,545
-5,828
-19,243
511
17,953
0
17,953
-
-
1,728
-
-
-
-
-
0
-
-
-
-
-
-
97,608
-
97,608
-
-33,316
-
-
-
-
-33,616
-
-33,616
-
53,159
-
-
-
-
-
-
0
-
-
-
-
-
-
-
-
-
-
691
-
-
-
691
-
691
-
-
-
-
-
405
405
-
405
-
-
147,586
-
-
-
0
-
0
87
-33,616
-22,120
55,353
3,601
-18,499
-10,360
15
-10,345
59
FINANCIAL REPORT
Notes to the Audited Financial Statements of Merkur, d. d.,
and to the Audited Consolidated Financial Statements of the
Merkur Group
1 Composition of the Merkur Group
As at 31 December 2012, the Merkur Group comprised 18 active companies: the parent company Merkur, d. d., 17
subsidiaries, and five companies that are inactive and in bankruptcy proceedings.
A list of companies, which together with Merkur, d. d., comprise the Merkur Group, and ownership shares at 31
December 2012 and 31 December 2011
Subsidiaries and associates
Country
Ownership stake
since
Ownership stake in %
31 Dec 2012
Ownership
stake in %
31 Dec 2011
MERKUR DIVISION
- Merkur Hrvatska Zagreb, d. o. o.
Croatia 1994
100
100
- Merkur Nekretnine Zagreb, d. o. o.
Croatia 2000
100
100
- Merkur Projekt Zagreb, d. o. o.
Croatia 2008
100
100
- Mirakul Gradnje Zagreb, d. o. o.
Croatia 2007
100
100
- Merkur International Beograd, d. o. o.
Serbia 1994
100
100
- Mikos Gradnje Beograd, d. o. o.
Serbia
2004
100
100
- Validus Kapital Beograd, d. o. o.
Serbia
2006
100
100
- Intermerkur Nova, d. o. o., Sarajevo
Bosnia and Herzegovina
2008
100
100
- Perles Merkur Italia, s.r.l.
Italy
1994
100
100
- Merkur Čelik, d.o.o., Beograd
Serbia 2007
100
100
- Merkur, d. o. o., Cetinje
Montenegro
2008
100
100
- Železokrivnica SCT – Merkur, d. o. o., Ljubljana
Slovenia
2006
45
45
MERSTEEL DIVISION
- Mersteel, d. o. o., Naklo
Slovenia
2008
100
- Mersteel, d. o. o., Beograd
Serbia
2008
100
- Mersteel Profil doo, Beograd Serbia
2008
100
- Mersteel, d. o. o., Hrvaška
Croatia
2008
100
- Mersteel, d. o. o., Sarajevo
Bosnia and Herzegovina
1998
100
- Merkur Makedonija, doo, Skopje
Macedonia
1994
99.27
- Merkur – MI Handels, GmbH
Germany
1994
100
- Merkur International Praha spol. S.r.o.
The Czech Republic
1994
100
100
100
100
100
100
99.27
100
100
BIG BANG DIVISION
- Big Bang, d. o. o., Ljubljana
Slovenia
1999
100
100
- Big Bang, d. o. o., Beograd
Serbia 2005
100
100
• MERKUR MI HANDELS, GmbH (in bankruptcy proceedings since 2 October 2010) – not included in the consolidation since 1 January 2011
• PERLES MERKUR ITALIA, s.r.l. (in bankruptcy proceedings since 10 May 2012) – excluded from the consolidation since 31 December 2011
• MERKUR INTERNATIONAL PRAHA, spol. S. r. o. (in bankruptcy proceedings since 12 May 2011) – excluded from the consolidation since 31 December 2011
• Merkur, d. o. o., Cetinje (inactive) – excluded from the consolidation since 31 December 2011
• ŽELEZOKRIVNICA SCT - MERKUR, d. o. o. (in bankruptcy proceedings since 14 March 2011)
60
Changes in the Composition of the Merkur Group
The composition of the Group did not change in 2012.
The companies which are in bankruptcy or liquidation proceedings have been excluded from the consolidation, since
the controlling company Merkur has no influence on the decisions regarding their financial and business policies such
as would result in obtaining benefits from their operations.
Subsidiaries and the associate companies of Sava Trade, d. d., Ljubljana, which was merged through acquisition in 2007,
are also excluded from the consolidation, since they are in the liquidation and bankruptcy proceedings, which were not
Subsidiaries and Associates not Included in Consolidation in 2012
OwnershipOwnership
Ownership
share in %
share in %
Subsidiaries and associates
Country
share since
31 Dec 2012
31 Dec 2011
– Chemo Zagreb, d. o. o., Zagreb
– Chemo Split, d. o. o., Split
– Kemo Niš, d. o. o., Niš
Croatia
Croatia
Serbia
1991
1991
1991
100
100
30
100
100
30
Capital Increase in Subsidiaries of the Merkur Group in 2012
Company name
Date Mersteel, d. o. o., Zagreb
7 February 2012
(capital increase provided by Mersteel, d. o. o., Naklo)
Mersteel, d. o. o., Beograd
(capital increase provided by Mersteel, d. o. o., Naklo)
29 February 2012
In € thousand
Capital
increase amount
In-kind
contribution
2,300
2,300
3,000
3,000
2 The Reporting Company
Merkur - trgovina in storitve, d. d., (hereinafter: the “Company”) is a joint stock company with its headquarters in Slovenia.
The address of the company’s headquarters is Cesta na Okroglo 7, 4202 Naklo.
The consolidated financial statements of the company ended 31 December 2012 include the parent company, its
subsidiaries and associate companies (hereinafter: the “Group”). A detailed overview of the composition of the Group is
provided under item 1 “Composition of the Merkur Group”.
The Group and the company compiled the consolidated financial statements and the annual report in accordance with
the International Financial Reporting Standards as adopted by the EU (hereinafter: “IFRS as adopted by the EU”) and the
Companies Act (ZGD-1). The accounting period equals the calendar year.
The ownership structure is specified in the business report. None of the owners holds a controlling interest.
61
FINANCIAL REPORT
3 Basis for the Preparation of Financial Statements
3.1 Going Concern Assumption
The financial statements have been prepared on the going concern assumption, which means that the assets are
obtained and sold and that the liabilities are settled in the ordinary course of business. The financial statements do
not include the adjustments that would be necessary if the going concern assumption did not apply, except in the
treatment of the receivables and liabilities from deterred taxes.
On 16 September 2010 the Management Board of Merkur, d. d., established that the parent company was insolvent and
must therefore observe the provisions of the Financial Operations, Insolvency Proceedings and Compulsory Dissolution
Act (hereinafter referred to as ZFPPIPP). The decision on approving the compulsory settlement was made final on 11
August 2011. Until all liabilities to the creditors are settled, i.e. until 31 December 2015, the company’s operations shall be
governed by the provisions of ZFPPIPP. On 15 September 2010 the Management Board of Mersteel, d. o. o., established that the company was insolvent and
must therefore observe the provisions of the Financial Operations, Insolvency Proceedings and Compulsory Dissolution
Act (hereinafter referred to as ZFPPIPP). The decision on approving the compulsory settlement was made final on
17 June 2011. Until all liabilities to the creditors are settled, i.e. until 17 June 2017, the company’s operations shall be
governed by the provisions of the ZFPPIPP. In the event that the parent company fails to fulfil the obligations of the financial reorganization plan and settle the
liabilities to the creditors pursuant to the adopted compulsory settlement plan, the ability of the entire Group to remain
operating on a going concern basis will be uncertain.
Both financial restructuring plans (such as confirmed within the framework of the compulsory settlement) are accessible
on the AJPES website (www.ajpes.si).
3.2 Statement of Compliance
The financial statements have been prepared in accordance with the IFRS, as adopted by the European Union. The
accounting and reporting rules of the IFRS and the Companies Act were observed in the process.
Standards and interpretations effective in the reporting period
The following amendments of the existing standards, issued by the International Accounting Standards Board (IASB)
and adopted by the EU, are currently effective:
•Amendments to IFRS 7 “Financial Instruments: Disclosures” – Transfer of Financial Assets, adopted by the EU on 22 November 2011 (effective for annual periods beginning on or after 1 July 2011).
The adoption of these amendments has no impact on the company’s accounting policies.
Standards and interpretations issued by the IASB and adopted by the EU but are not yet effective
On the date of the approval of these financial statements, the following standards, amendments and interpretations,
adopted by the EU, have been issued but are not yet effective:
•IFRS 10 “Consolidated Financial Statements”, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2014),
•IFRS 11 “Joint Arrangements”, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2014),
•IFRS 12 “Disclosure of Interests in Other Entities”, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2014),
•IFRS 13 “Fair Value Measurement”, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2013),
•IAS 27 (revised in 2011) “Separate Financial Statements” adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2014),
62
•IAS 28 (revised in 2011) “Investments in Associates and Joint Ventures”, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2014),
•Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2013),
•Amendments to IFRS 7 “Financial Instruments: Disclosures” – Offsetting Financial Assets and Financial Liabilities, adopted by the EU on 13 December 2012 (effective for annual periods beginning on or after 1 January 2013),
•Amendments to IAS 1 “Presentation of Financial Statements” – Presentation of Items in Other Comprehensive Income, adopted by the EU on 5 June 2012 (effective for annual periods beginning on or after 1 July 2012),
•Amendments to IAS 12 “Income Taxes” – Deferred Tax: Recovery of Underlying Assets, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2013),
•Amendments to IAS 19 “Employee Benefits” – Improvements of Accounting for Post-Employment Benefits, adopted by the EU on 5 June 2012 (effective for annual periods beginning on or after 1 January 2013),
•Amendments to IAS 32 “Financial Instruments: Presentation” – Offsetting Financial Assets and Financial Liabilities, adopted by the EU on 13 December 2012 (effective for annual periods beginning on or after 1 January 2014),
•IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”, adopted by the EU on 11 December 2012 (effective for annual periods beginning on or after 1 January 2013).
Standards and interpretations issued by the IASB but not yet endorsed by the EU
The current IFRS as endorsed by the EU are not significantly different from the regulations as adopted by the IASB, with
the exception of the following standards, amendments to the existing standards and interpretations, which were not yet
effective on 31 January 2013:
•IFRS 9 “Financial Instruments” (effective for annual periods beginning on or after 1 January 2015),
•Amendments to IFRS 1 “First-time Adoption of International Financial Reporting Standards” – Government Loans (effective for annual periods beginning on or after 1 January 2013),
•Amendments to IFRS 9 “Financial Instruments” and IFRS 7 “Financial Instruments: Disclosures” – Mandatory Effective Date and Transition Disclosures,
•Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements” and IFRS 12 “Disclosure of Interests in Other Entities” – Transition Guidance (effective for annual periods beginning on or after 1 January 2013),
•Amendments to IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 27 “Separate Financial Statements” – Investment Entities (effective for annual periods beginning on or after 1 January 2014),
•Amendments to various standards “Improvements to the IFRS (2012)” as stated in the annual improvements to the IFRS project, published on 17 May 2012 (IFRS 1, IAS 1, IAS 16, IAS 32, IAS 34), in particular with the aim of eliminating inconsistencies and the interpretation of text (effective for annual periods beginning on or after 1 January 2013).
The company assesses that the introduction of these standards, amendments to existing standards and interpretations will
not significantly impact its financial statements in the initial period of application.
Also, the application of hedge accounting related with the financial assets and liabilities portfolio, the principles of which
have not yet been endorsed by the EU, has still not been regulated. The Company assesses that the application of hedge
accounting related with the financial assets and liabilities portfolio in accordance with the requirements of the IAS 39:
“Financial Instruments: Recognition and Measurement” would not have a significant impact on the Company’s
financial statements if applied on the balance sheet date.
63
FINANCIAL REPORT
4 Significant Accounting Policies
BASIS OF PREPARATION
The financial statements have been prepared on the historical cost basis except for the following items that were
revaluated: (investment) property, and available-for-sale financial assets. The applied methods are described in the notes
under individual items, namely:
• 4.4 Property, plant and equipment
• 4.6 Investment property
• 4.7 Financial assets
Certain items of the statement of comprehensive income (also referred to as statement of profit and loss) and statement of
cash flows have been reclassified for the previous years to ensure comparability.
4.1 Functional and Presentation Currency
The financial statements are presented in euros, which is the functional currency. All financial information presented in
euros has been rounded to the nearest thousand. Rounding may cause slight differences in the summation.
4.2 Foreign Currency Translation
Transactions in foreign currency are translated to the functional currency using the exchange rate at the date of the
transaction. Cash 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 the
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 using the exchange rate at the date when the fair value was determined.
4.3 Basis for Consolidation
Subsidiaries
Subsidiaries are the companies controlled by the Group. Control is present if the Group has the possibility of deciding
on the company’s financial and business policies so as 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.
The subsidiaries’ financial statements are included in the 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, on 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.
Where necessary, consolidation corrections are made in order to harmonize the financial policies of Group companies with
financial policies of the Group.
Financial Statements of Foreign Subsidiaries
Assets and liabilities of foreign subsidiaries, which comprise monetary items, are translated to euros 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 their 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
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to euros at the average ECB exchange rate. Foreign exchange gains or losses are recognized directly in equity, in foreign
exchange reserves.
When a foreign company is sold (partly or completely), the foreign exchange gains or losses are recognized in the statement
of comprehensive income as part of profit or loss from sales. Foreign exchange gains or losses from financial investments in
foreign companies made before 1 January 2004 are recognized as part of the investment.
4.4 Property, Plant and Equipment
Property, plant and equipment are the assets used in the operations to generate revenue from the sale of products and
services and for administrative purposes. Plant and equipment are carried under the cost model, less potential impairment,
while property is carried under the revaluation model.
Initial Measurement
Property, plant and equipment are initially measured at cost, which comprises their purchase price, import duties and nonrefundable purchase taxes, and any costs of bringing the asset to working condition for its intended use. The cost of assets
that require a longer time to be brought to their use also comprises borrowings’ costs (interest) related to the construction
of an item of property.
Subsequent improvements made to assets held under finance or operating lease are recognized as property, plant and
equipment, or their part.
Subsequent Costs
Costs of replacing a part to an item of property, plant and equipment are recognized in the book value of the asset, if
it is probable that the Group 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, the purpose of which is the restoration or
maintenance of future economic benefits, are, on the basis of the originally estimated rate of effectiveness and the useful
life of the asset, recognized as maintenance costs in the profit or loss and as expenditure in the period when they are
incurred.
Subsequent Measurement of Property, Plant and Equipment
After their initial recognition as an asset, plant and equipment are carried under the cost model, less any impairments
(more information under “Impairment”), while the property and plant are carried under the revaluation model, which is
based on the fair value less any subsequent depreciation and accumulated impairment losses. Revaluation is performed
regularly, at least every five years. The latest revaluation was carried out on 31 December 2010. The Management Board
of the parent company estimates that no significant changes in the evaluation assumptions applied in the consolidated
financial statements occurred in 2012.
If an asset’s book value is increased as a result of a revaluation, the increase is recognized in other comprehensive income as
revaluation reserve under equity, except when it reverses a prior decrease in the value of the same property by the amount
previously recognized in the statement of comprehensive income – an increase in the same amount is first recognized
in the statement of comprehensive income. Any decrease in the book value resulting from revaluation first decreases the
revaluation reserve (and is recognized in other comprehensive income) if the amount related to a certain property was
recognized as surplus under equity before, while the remaining loss is recognized directly in the profit or loss.
Determining the Fair Value of Property, Plant and Equipment Valued at the Revaluation Model
The fair value of property is based on the market value. The market value is the estimated amount for which a property and
plant could be exchanged on the date of valuation between knowledgeable, willing parties in an arm’s length transaction.
Depreciation, Depreciation Method, and Useful Lives
Depreciation of property, plant and equipment 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 asset, and is
recognized in the statement of comprehensive income. The useful lives of assets are examined at the end of the financial
year and are as follows:
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FINANCIAL REPORT
Property, plant and equipment
Useful life
Business buildings, 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 €500
Computer and telecommunications equipment
40 years
30 years
25 years
10 years
5–20 years
6–16 years
4–10 years
5 years
3–5 years
Land, advances and assets under construction are not depreciated.
Assets that the Group/company holds under finance lease are depreciated based on their useful lives as the Group’s/
company's own assets. In the event of uncertainty regarding the transfer of ownership after the finance lease expires, the
assets are depreciated based on the shorter of their useful lives and the lease term.
Impairment
A fixed asset is impaired when its book value exceeds its recoverable amount. At each reporting date, all assets are reviewed
for any indication that an asset may be impaired. If there is an indication that an asset is impaired, the asset’s recoverable
amount is calculated.
If the impairment cannot be evaluated on the level of an individual fixed asset, the impairment is evaluated on the level of
the cash-generating unit, which the asset is a part of.
The recoverable amount is the asset’s fair value less costs to sell, or its value in use. The asset’s value in use is estimated by
discounting the estimated cash flows to their present value, using a pre-tax discount rate that reflects the time value of the
money and the risks associated with the asset, whose recoverable value is being estimated.
If the recoverable value of the asset (or cash-generating unit) is lower than its book value, the book value is reduced to the
asset’s recoverable value. The impairment loss is recognized in the statement of comprehensive income, unless the asset
is evaluated under the revaluation model, in which case the impairment loss is recognized as a decrease in revaluation
reserve.
If the recoverable amount increases, the asset’s (or cash-generating unit’s) book value is increased to the level of the
recoverable amount, which should not exceed the initial book value (before the impairment). The impairment reversal is
recognized in the statement of comprehensive income, unless the asset is evaluated under the revaluation model, in which
case the impairment reversal is recognized as an increase in the revaluation reserve under equity.
Derecognition of Property, Plant and Equipment
When an asset, evaluated under the revaluation model, is derecognized (disposed of or withdrawn from use), the revaluation
reserve included in equity is first decreased and transferred directly to retained earnings, while the remaining difference
between the disposable and book value is recognized in the profit or loss. If an asset is evaluated under the cost model, the
entire difference between the disposable and book values is recognized in the profit or loss.
4.5 Intangible Assets
Assets recognized as intangible assets include non-monetary intangible assets, such as computer software, long-term
patents and licenses.
Costs of internal research and development, brands and similar items are not recognized as intangible assets, but are
immediately recognized as costs 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”).
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Amortization
The Group/company presents intangible assets with determinable useful lives. Amortization is calculated on a straightline basis over the estimated useful lives of intangible assets, if these are determined, and is recognized in the statement
of comprehensive income. Amortization of intangible assets begins on the first day of the month following the month
in which the asset is available for use. Estimated useful lives are as follows:
Intangible assets
Software
Long-term licences
Useful life
5 years
Under agreement
Derecognition of 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 disposable and book
value of the asset. It is recognized in the profit or loss when derecognition occurs.
4.6 Investment Property
Investment property is property which the Group/company holds either to earn rental income or for capital appreciation
or both. They include investment property under construction.
Initial Measurement
An investment property is initially measured at its cost, comprising the purchase price and costs directly attributable to
the purchase. These costs include legal fees, property transfer taxes, and other transaction related costs.
If it needs to be determined whether an asset is an investment property or property for carrying out the activity, the
asset is deemed investment property if more than 20% of the investment property (i.e. of its net usable surface area) is
not used for the purpose of carrying out the activity in connection with the generation of the revenue from the sales
of goods and services. In this case, the part that is not used to carry out the activity, is classified as investment property.
Measurement Subsequent to Initial Recognition
Subsequent to initial recognition, investment property is measured at fair value. The fair value of investment property
reflects the market conditions on the balance sheet date. The Group/company revaluated its investment properties
on 31 December 2010. The Group/company estimates that the assumptions applied in evaluation did not significantly
change in 2011. Gains or losses arising from the change in the fair value of investment property are recognized in the
profit or loss for the period in which they are incurred.
Determining Fair Value
The fair value of the investment property in Slovenia is determined by an authorized external real-estate appraiser, and
an equally qualified property appraiser with an appropriate license abroad. 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 the current prices in an active market, the valuation is made 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 is included in the calculation of the property value based on the discounted net annual cash flows.
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FINANCIAL REPORT
Derecognition of Investment Property
An investment property is derecognized on its 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 or withdrawal of an
investment property should be calculated as the difference between the disposable book values of the asset and should
be recognized in the profit or loss.
4.7 Financial Assets
The company’s/Group’s balance sheet discloses available-for-sale financial assets, and loans and receivables. The
classification depends on the nature of the financial asset and its purpose. The classification is carried out upon the initial
recognition. Financial assets are recognized on the trade date.
Financial assets are initially valued at the fair value. The transaction expenses that are directly connected with the acquisition
or issue of financial instruments increase the fair value of the financial asset.
Effective Interest Rate
The effective interest rate is a method of calculating the amortized cost, and allocating the interest income over the relevant
period. The effective interest rate is the rate that exactly discounts the estimated future cash receipts (including all fees and
points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums and
discounts) through the expected life of the debt instrument, or, where appropriate a shorter period to the net book value
on initial recognition.
The Group/company does not use the effective interest rate method but distributes the costs of loan approval in the
expenses on a straight-line basis considering the intended time of returning the loan. The Management Board has
estimated that this method is a close enough approximation to the effective rate method.
Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivative financial assets that are not classified as loans/receivables.
Initially, available-for-sale financial assets are measured at fair value on the date of acquisition. At the end of the financial
year, they are measured at the fair value. The fair value is determined as described under 5.6 Long-Term Financial Investments.
Dividends related to available-for-sale financial assets are recognized as financial income when the company/Group has
the right to acquire dividends.
On the disposal of financial assets, the company uses the weighted average price method.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an
active market.
Upon their initial recognition they are recognized at their fair value, usually in the amounts based on the appropriate
documentation and under the assumption that they will be repaid. Subsequently they are measured at the amortized cost
using the effective interest method, less impairments.
Interest income is recognized under the effective interest rate method, except for short-term financial assets, where the
effect would be negligible.
Impairment of Financial Assets
A financial asset is deemed impaired if there is objective evidence that as a result of one or more events the estimated
future cash flows from the asset has decreased, and this can be reliably measured.
Objective evidence on the impairment of assets comprises the following:
• the debtor’s financial problems,
• the debtor’s failure to fulfil contractual obligations or to pay (on time),
• restructuring,
• indications that the debtor will go bankrupt, and
• the disappearance of an active market for the security (as the result of the debtor’s financial problems).
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For available-for-sale equity investment, a significant (over 40%) or prolonged decline (longer than 9 months) in fair value
of the security below its cost is considered to be objective evidence of an impairment.
Certain groups of financial assets, such as trade receivables are assessed on an individual and collective basis. For each
significant receivable, an individual assessment is made whether the impairment has occurred. If the criteria for individual
impairments are not identified, the receivable is classified in a group and impaired at the same rate as the group, which
reflects past losses in a group with a similar credit risk. The percentage of group impairments reflects, in addition to past
losses, also changes in the macroeconomic situation and other active factors.
Low-value receivables are included in a group with similar characteristics of credit risk and assessed together. The Group/
company forms groups based on a similar credit risk and based on the maturity of receivables. On assessing the total
impairment, we include the past development of the likelihood of non-payment (default), the time of repayment and the
amount of incurred loss adjusted by the assessment of the Management Board as to whether the actual losses may due to
the current economic and credit conditions be higher or lower than anticipated by the past development.
If financial assets are measured at cost, the impairment amount is the difference between the asset’s book value and the
present value of the estimated future cash flow discounted at the current required return rate for a financial asset with
similar risks. Loss from such impairment may not be reversed in the following periods.
Impairments for all financial assets (except for available-for-sale financial assets) are recorded through an allowance. When
the objective evidence exists that the receivable or loan cannot be collected (usually when the bankruptcy/liquidation
proceedings are concluded or when the limitation period expires), the receivable/loan is derecognized.
Subsequent payments of receivables and loans, for which an adjustment had been made earlier, are recognized in the
statement of comprehensive income under other operating revenue.
If the available-for-sale financial asset is permanently impaired, the accumulated loss previously recognized in the statement
of other comprehensive income is recognized in the statement of comprehensive income for the current year.
If factors occur related to financial assets measured at amortized cost, for which an adjustment has been made as a result
of the impairment in the past years, indicating that the impairment is no longer necessary and the factors can be directly
linked with an event occurring after the impairment had been made, the previously recognized loss is reversed through the
statement of comprehensive income to the amount that does not exceed the amortized cost in the event the impairment
would not have been made.
In respect of available for sale equity securities impairment losses previously recognized in profit and loss are not reversed
through profit and loss – any increase in fair value subsequent to an impairment loss is recognized in other comprehensive
income.
Derecognition of Financial Assets
Financial assets are derecognized only when the Group/company has no more contractual obligations arising from cash
flow, or when it transfers all the risks and benefits related to the ownership of the financial asset to a third party.
Upon derecognition, the entire difference between the book value (including previously recognized unrealized profits/
losses in other comprehensive income) and the disposable value is recognized in the statement of comprehensive income.
4.8 Investments in Subsidiaries
Financial Investments in Subsidiaries
Financial investments in subsidiaries are carried under the cost method. After the acquisition, they are not revalued due to
changes in currencies (in case of investments in companies abroad).
Impairment
At each reporting date, the remaining carrying amount is assessed for impairment. If such an 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
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FINANCIAL REPORT
discount rate that reflects the 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). 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 statement of comprehensive income. Impairment
losses recognized in respect of a cash-generating unit are allocated first to reduce the book value of any goodwill allocated
to the unit, and then of other assets in the unit (group of units) on a pro rata basis.
4.9 Assets/Liabilities Classified as for Sale
Assets and liabilities are classified as for sale if their book value is recovered mostly through their sale and not through
their further use. This criterion is only met 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.
When the company intends to sell a stake in a subsidiary (as a loss of the controlling interest), all the subsidiary’s assets and
liabilities are classified as assets classified as for sale, regardless of the size of the minority stake.
Long-term assets (and disposal groups) classified as for sale are measured at the lower amount of their book or fair value
less the costs of the sale.
Debts included in the group classified as for sale are presented separately from other debts in the balance sheet.
4.10Inventories
Measurement of Inventories
Inventories are stated at the lower amount of the 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 selling.
The use of inventories is determined at the weighted average cost method.
The cost 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.
When inventories are sold, their book value is recognized as an expense in the period in which the related revenue was
accounted for.
Net Realizable Value of Inventories
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.
4.11 Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and in the bank, and demand deposits. Automatic bank overdrafts are
not cash but a short-term financial liability.
4.12Equity
Total equity is the total of its liabilities to owners that fall due if it discontinues its operations. It is defined by the amounts
invested by the owners and the amounts generated during operations that belong to the owners, and reduced by the loss
from operations, repurchased own shares, and withdrawals (payouts). Total equity includes share capital, capital reserves,
revenue reserves, retained earnings, fair value reserves, and own shares as a deductible item.
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Treasury Shares
When own shares recognized as part of the share capital are repurchased, the amount paid, which includes the directly
attributable costs and is net of any tax effects, is recognized as a change in 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.
4.13Liabilities
Financial Liabilities
Financial liabilities are stated at the amortized cost using the effective interest rate method.
Trade Payables
Trade payables are generally stated at the amortized cost using the effective interest rate method. Current trade
payables are not discounted on the balance sheet date.
Trade payables are initially recognized at the 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.
Effective Interest Rate
The effective interest rate is a method of calculating the amortized cost, and allocating interest income over the relevant
period. The effective interest rate is the rate that exactly discounts the estimated future cash receipts (including all
fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums and discounts) through the expected life of the debt instrument, or, where appropriate a shorter period to
the net carrying amount on initial recognition.
The Group/company does not use the effective interest rate method but distributes the costs of loan approval in the
expenses on a straight-line basis considering the intended time of returning the loan. The Management Board has
estimated that this method is a close enough approximation to the effective rate method.
Issued Guarantees
In the case of financial guarantees the guarantor must pay the creditor at first call when the debt instrument falls due
for payment, if the main debtor fails to do so.
The issued guarantees are initially recognized at their fair value and later at the higher amount of:
• the liability under the agreement as defined by IAS 37 – Provisions, Contingent Liabilities and Contingent Assets, or
• the amount initially recognized less the expected repayments in accordance with the revenue recognition policy.
The details are described under items 5.17 “Long-term and Short-term Provisions” and 6.9 “Contingent Liabilities and Receivables”.
Derecognition
The Group/company derecognizes liabilities if, and only if, the liabilities have been settled, cancelled or when they have
ended. The difference between the carrying amount of the financial liability, which is derecognized, and the payment,
is recognized in the statement of comprehensive income.
Extinguishing Financial Liabilities with Equity Instruments
The issue of the company’s equity instruments for the settlement of financial liability and/or trade payable in whole
or partly is measured at the fair value of the extinguishing financial liability, since the Management Board assesses that
the fair values of the issued equity instruments cannot be measured reliably (equity instruments are not traded in
regulated markets, comparable transactions are rare due to the current macroeconomic situation, and the controlling
company is in the process of financial reorganization, and similar). The difference between the carrying amount of the
extinguishing liability (or its part) and its fair value is recognized in the profit or loss.
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FINANCIAL REPORT
4.14Provisions
Provisions are recognized when a present legal or constructive obligation has arisen as the result of a past event, and
it is probable that settling the obligation will require an outflow of economic benefits. If the effect of the time value of
money is material, the amount of a provision equals the present value of the expenditures expected to be required to
settle the obligation.
The provision is the best estimate of the amount necessary to settle the current liability on the last date of the
reporting period considering all the risks and uncertainties related to the liability. If the provision is measured as the
estimated cash flow necessary to settle the current liability, the book value is recognized as the current value of this cash
flow (if the effect of the time value of money is important).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party. A receivable is recognized as an asset if it is virtually certain that reimbursements will be received and the amount
can be measured reliably.
Provisions for Severance Payments and Jubilee Awards
In accordance with the legal requirements and the collective agreement, the Group/company must pay jubilee awards and
severance payments 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 State Subsidies
The Group/company carries provisions from retained subsidies for employing a surplus quota of disabled persons. Provisions
are used for improving the working conditions for disabled persons according to the law.
Provisions for Lawsuits and Other Possible Obligations
The Group/company has provisions for lawsuits against it. Provisions are reviewed annually for their expected outcome.
The Group/company also has provisions for other obligations for which there is a probability of settlement in the future,
i.e. for issued guarantees and similar.
Short-Term Employee Benefits
Liabilities for short-term employee benefits are measured on an undiscounted basis and are recognized as an expense when
the employee’s work is performed. A liability is recognized for the amount expected to be paid within twelve months after
the period expires if the company has a current 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. liabilities related to unused annual leave).
Provisions for Issued Guarantees
The Group companies are guarantors to repay bank loans to third, unrelated parties. The provisions are recognized in the
amount of the expected repayment..
4.15Leases
Types of Lease
Leases are classified as financial leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lease. All other leases are classified as operating leases. Leased assets under the operating lease are not
recognized on the balance sheet.
Finance Lease
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 the lease payments, each determined at the inception of
the lease. Subsequent to initial recognition, the asset is accounted with the accounting policies applicable to such an asset.
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Operating Lease
Rent under the operating lease is recognized as an expense on the straight-line basis over the term of the lease.
4.16 Income Tax
Income tax is recognized as an expense in the statement of comprehensive income, except to the extent that it refers to
items recognized directly in the comprehensive income, in which case it is recognized under equity.
Current tax payable is the tax expected to be paid on taxable income for the financial year, using the 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 the temporary differences between the book
values and the 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 the assets and liabilities, using the tax rates applicable at the balance sheet
date, or tax rates in the period in which the elimination of the deferred tax assets or liabilities is expected.
A deferred tax asset is recognized to the extent for which it is probable that taxable profits will be available against which
it can be utilized in the future. Deferred tax assets are reduced by the amount, by which it is no longer probable that it will
be available to utilize the benefit of that deferred tax asset.
4.17Revenue
Revenue from the Sale of Goods
Revenue from the 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 reliably measured.
Customer Loyalty System
The companies in the Merkur division issue Merkur’s Loyalty Card to their customers. The card is used to record each
purchase in the retail centres or franchise stores, which brings extra benefits to the cardholders. Every three months
cardholders receive a discount coupon which they can use upon their next purchase. Depending on the total value of all
the purchases in the last three months, card holders receive a credit in the extent of 2-5% of the total value of the purchases.
Revenue from customer loyalty awards is deferred based on the fair value of the awards and the awards expected to be
redeemed (i.e. until the awards are actually redeemed).
Revenue from Services Rendered
Revenue from services rendered is recognized in proportion to the stage of the completion of the transaction at the
reporting date. The stage of completion is estimated by reviewing the performed work.
Rental Income and Finance Lease
Rental income is recognized as revenue on a straight-line basis over the term of the lease.
Other Operating Revenue
Other operating revenue includes profit from the disposal of property, plant and equipment, revaluation of investment
property to fair value, and revenue from recovered receivables (including the reversal of impairment loss from receivables).
The item Other Revenue is included in the statement of comprehensive income due to significant unique revenue, which
however, does not affect the operating profit or loss.
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4.18Expenses
Operating Expenses
Operating expenses are classified according to their function as the cost of goods sold, selling cost, general and
administrative expenses (administration and procurement), and other operating expenses.
Cost of Goods Sold
The sold quantities of inventories of goods are derecognized on the basis of the weighted average purchase price method.
The cost of goods sold is directly decreased by rebates and super-rebates that are subsequently granted by the suppliers.
Selling Cost (including depreciation)
The selling cost (including depreciation) includes all the 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.
General and Administrative Expenses (including amortization/depreciation)
General and administrative expenses (including depreciation/amortization) include costs related to purchases and
administration, including auxiliary activities. They are recognized in their total amount as operating expenses in the
accounting period in which they were incurred.
Costs by Nature
The 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 useful life of an item of property, plant and
equipment or intangible asset.
Labour costs include gross wages and salaries under the collective agreement and individual employment contracts,
contributions and taxes paid by the employer, voluntary additional pension insurance, and other labour costs (holiday
allowance, transport allowance, meals allowance, etc.).
Other operating expenses arise in connection with impairment losses or write-downs and upon the disposal of property,
plant and equipment, and investment property due to loss on disposal.
Other expenses are included in the presentation of the statement of comprehensive income due to significant unique
expenses, which however did not impact the profit or loss.
4.19 Financial Income and Expenses
Financial Income
Financial income includes interest income from investments and trade receivables, foreign exchange gains, dividend
income, and gains on the disposal of available-for-sale financial assets.
Interest income is recognized in the profit or loss as it accrues using the effective interest method. Dividend income is
recognized in the statement of comprehensive income on the date when the shareholder’s right to receive payment is
realized, which in the case of the listed securities is the ex-dividend date.
Financial Expenses
Financial expenses include borrowing costs, impairment losses of values and write-offs of financial assets, and losses on
hedging instruments that are recognized in the statement of comprehensive income. All borrowing costs are recognized in
the statement of comprehensive income using the effective interest method, unless they are capitalized 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.
74
4.20 Application of Estimates and Judgments
The financial statements are compiled based on estimates, judgments and assumptions made by the Management Board,
which affect the application of the financial policies and the disclosed values of assets, liabilities, revenue and expenses.
The estimates and judgments are reviewed regularly, and at least annually at the end of the financial year.
Estimates
Going Concern
As explained under Note 3.1 “Going Concern Assumption”, the controlling company of the Group is in compulsory settlement
proceedings. Mersteel, d. o. o. is also in compulsory settlement proceedings. The Management Board assesses that other
than the facts described under Note 3.1 no other factors have arisen that would jeopardize the going concern assumption.
Provisions for Issued Guarantees
The Group/company is a guarantor for the repayment of bank loans to (non)related parties. On the formation of provisions
for issued guarantees, the Management Board examined the criteria set by the International Accounting Standard
37 – Provisions, Contingent Liabilities and Contingent Assets, especially as to whether the criteria that would require
reclassification provisions of an off-balance sheet contingent liability to a balance provision have arisen.
Provisions for guarantees issued are recognized when the Management Board estimates that the probability that the main
debtor will fail to settle the debt is high. The provisions are recognized in the amount expected the group will have to pay
in the following way:
1. guarantees issued to companies in insolvency, compulsory settlement, bankruptcy, or liquidation proceedings in the entire amount of debt towards the main creditor, by taking into account the effect of the compulsory settlement of Merkur (40% discount) and Mersteel (45% discount),
2. guarantees issued to others, in the full amount, regardless of the main debtor’s actual liability and without taking into account the discount from the compulsory settlement.
Guarantees issued between the Group companies are not recognized in the consolidated financial statements.
Judgments
Below are the main assumptions of the future events and other risk judgments made at the end of the financial year, which
may have a significant impact on the amounts shown in the financial statements.
Useful Lives of Buildings and Equipment
The Group examines the appropriateness of the useful lives of buildings and equipment at the end of the financial year.
Useful lives did not change in 2012.
Valuation of Financial Investments
As explained under 5.6 Long-term Financial Investments, the Group measures certain financial investments using a model
in which the input data is not based on market values. Note 5.6 Long-term Financial Investments gives a more detailed
explanation of the input data used for the valuation model.
The Management Board believes that the applied valuation methods and assumptions used are an adequate and sufficient
estimate of the fair value.
Assets/Liabilities Held for Sale
In spite of the current activities in respect of the disposal of both non-key divisions, i.e. the Mersteel and Big Bang divisions,
the Management Board estimates that the conditions that would require the recognition of assets and liabilities as held for
sale, have not been fulfilled.
4.21 Statement of Cash Flow
The Cash Flow Statement was compiled using the indirect method. Cash and cash equivalents in the statement of cash
flow present cash in hand and in bank accounts, and bank deposits with an original maturity of up to three months.
75
FINANCIAL REPORT
5 Notes to the Statement of Financial Position
5.1 Intangible Assets
Intangible Assets by Types
In € thousand
Item
Intangible assets
Software licenses
Intangible assets under additions
Merkur, d. d.
31 Dec 2012
Merkur, d. d. 31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
255
255
-
570
570
-
1,506
1,473
32
1,666
1,635
31
Changes in the Intangible Assets of Merkur, d. d., in 2012 and 2011
Item Balance at 1 January 2011
In € thousand
Intangible assets
4,235
Additions19
Disposals and write-offs -158
Balance at 31 December 2011
4,096
Additions89
Disposals and write-offs
-215
Balance at 31 December 2012
3,970
Accumulated amortization at 1 January 2011
3,263
Amortization421
Disposals and write-offs -158
Accumulated amortization at 31 December 2011
3,526
Amortization343
Additions61
Disposals and write-offs -215
Accumulated amortization at 31 December 2012
3,715
Carrying amount at 1 January 2011
Carrying amount at 31 December 2011
Carrying amount at 31 December 2012
76
971
570
255
Changes in the Intangible Assets in the Merkur Group in 2012 and 2011
In € thousand
Intangible
Property rights
assets being
Intangible
Item and software
Goodwill
acquired
assets
Balance at 1 January 2011
Additions
Addition with transfer of assets under addition
Transfers from property, plant and equipment Disposals and write-offs
Foreign exchange differences
8,905
6,141
224
2
-10
-192
-5
0
15,046
- 33257
-
-2
0
-
-
-10
-
-
-192
-
-
-5
Balance at 31 December 2011
Additions
Addition with transfer of assets under addition
Transfers from property, plant and equipment Disposals and write-offs
Foreign exchange differences
8,924
6,141
31
15,096
729 - 32761
31
-
-31
15
-
-
15
-234
-
-
-234
-59
-
-
-59
Balance at 31 December 2012
9,406
Accumulated amortization at 1 January 2011
Amortization
Transfers from property, plant and equipment Disposals and write-offs
Foreign exchange differences
Accumulated amortization at 31 December 2011
6,516
6,141
0
12,657
965--
965
5
-
-
5
-189
-
-
-189
-8
-
-
-8
7,289
6,141
0
13,430
Accumulated amortization at 1 January 2012
Amortization
Additions Disposals and write-offs
Foreign exchange differences
Accumulated amortization at 31 December 2012
7,289
6,141
0
13,429
836--
836
61--
61
-216
-
-
-216
-37
-
-
-37
7,933
6,141
-
14,074
Carrying amount at 1 January 2011
Carrying amount at 31 December 2011
Carrying amount at 31 December 2012
2,389
1,635
1,473
6,141
0
0
0
32
0
31
32
15,579
2,389
1,666
1,506
As at 31 December 2012, intangible assets comprise property rights from the use of patents, licences and the BOF brand,
and software in the amount of €1,506 thousand (31 December 2011: €1,666 thousand).
77
FINANCIAL REPORT
5.2 Property, Plant and Equipment
Property, Plant and Equipment by Types
In € thousand
Merkur, d. d. Item31 Dec 2012
Property, plant and equipment Land and buildings - land - buildings
Plant, machinery and equipment
Property, plant and equipment under construction
Property, plant and equipment under finance lease
152,314
92,934
52,414
40,520
7,106
668
51,606
Merkur, d. d. 31 Dec 2011
Merkur Group
Merkur Group
31 Dec 201231 Dec 2011
195,558
115,105
57,912
57,192
9,021
10,933
60,499
339,788
176,775
92,867
83,908
22,883
2,345
137,786
404,434
214,424
110,877
103,547
28,911
12,581
148,517
Changes in Property, Plant and Equipment in Merkur, d. d., in 2012 and 2011
In € thousand
Property, Property,
plant and
plant and
Other
equipment
equipment
plant and
under
under
Item
Land Buildings equipment construction finance lease
Balance at 1 January 2011 (Cost)
60,191
Additions Reclassified from investment property
Reclassified to assets classified for sale
Disposals – write-offs
Balance at 31 December 2011 (Cost)
-
72
56
-
39
-
-1,203
-3,299
-
-1,076
-1,376
-4,271
57,912123,038 40,806
Additions -
Reclassified between assets
-
Reclassified to investment property -5,498
Disposals – write-offs
-
Balance at 31 December 2012 (Cost)
52,414 Accumulated depreciation at 1 January 2011
0
1,214
-
-27,390
-157
96,704
64,668
45,022
1,208
104
-
-1,357
40,760
33,664
10,921
67,348
311,082
20
-
-
-6
10,933
200
348
-
39
-
-4,502
-103
-6,833
67,445 300,134
-
-38
-10,221
-7
668
0
-
-66
-9,489
-
57,890
5,766
2,423
0
-52,598
-1,522
248,437
104,098
Depreciation
Reclassified from investment property
Reclassified to assets classified for sale
Disposals – write-offs
Accumulated depreciation at 31 December 2011
-4,310 2,274
-
25
-
-
-2,288
-
-
-869
-4,152
065,845 31,785
- 1,203 7,787
-
-
25
-
-
-2,288
-
-24
-5,046
0
6,945104,575
Additions
Depreciation
Reclassified between assets
Reclassified to investment property
Disposals – write-offs
Accumulated depreciation at 31 December 2012
- -1,142
-
3,605 2,017
-
-
30
-
-13,196
-
-
-70
-1,320
0
56,185
33,654
-
- 1,142
-
986
6,609
-
-30
0
-
-1,618
-14,813
-
-
-1,390
0
6,284
96,123
Carrying amount at 1 Jan 2011
Carrying amount at 31 Dec 2011
Carrying amount at 31 Dec 2012
78
127,601
Property,
plant and
equipment
60,192
57,912
52,414
62,934
57,192
40,520
11,358
9,021
7,106
10,920
10,933
668
61,581
60,499
51,606
206,984
195,558
152,314
Significant Changes in Property, Plant and Equipment in Merkur, d. d., in 2012
In 2012, the investments in property, plant and equipment amounted to €2,423 thousand, as follows:
• investments in buildings
1,214
• acquisition of software
1,157
• acquisition of plant, machinery and equipment
52
TOTAL
2,423
The carrying amounts of significant disposals of property, plant and equipment in 2012:
• write-off of investments in the Sežana open warehouse 87
• sale and destruction of plant and equipment
38
• write-off of current investments
7
TOTAL132
In 2012, the company partly or entirely reclassified property to investment property. The reclassification was made for
those items of property where more than 20% of the net usable surface area was rented out or was empty.
Merkur, d. d., has the following five real-estates under finance lease:
Shopping centre
In € thousand
Contract from
Carrying amount
2002
2009
2002
2001
2010
3,355
17,067
12,434
6,994
11,601
TC Bršljin Novo mesto
TC Murska Sobota
TC Hudinja
TC Ljubljana Rudnik
TC Škofja Loka
In addition, the company has five company cars under financial lease with the carrying amount of €155 thousand as
at 31 December 2012.
Property and Equipment Pledged as Security and Reservation of Title
A mortgage is entered on the properties of Merkur, d. d., the carrying amount of which totals €89,325 thousand as at 31
December 2012. The company is not allowed to dispose the pledged property without the permission of the creditor.
In the case of a finance lease, the lessor has the ownership right over the leased item until the expiry of the lease agreement.
Liabilities from the finance lease are presented under Note 5.15 “Long-Term and Short-Term Finance Lease Liabilities”.
Property Carried at the Revaluation Model
The property carried at the revaluation model was valued by a certified appraiser on 30 June 2010. The valuation was
performed in line with the International Valuation Standards with reference to the comparable market transactions among
unrelated entities. The Management Board estimates that the baseline that presented the basis for evaluation did not
change significantly by 31 December 2012.
Impairment loss
No impairments of fixed assets were made in 2012.
79
FINANCIAL REPORT
Changes in Property, Plant and Equipment in the Merkur Group in 2012 and 2011
In € thousand
Property,
Property,
plant and
plant and
Otherequipment equipment
Property,
plant and
under
under
plant and
Item
Land
Buildings
equipment construction finance lease
equipment
Balance at 1 January 2011 (Cost)
105,603
192,476
89,973
12,791
161,774
562,617
Divestitures
-47-369 -552 -293
- -1,261
Additions -20
955
743
269
284
2,232
Reclassified between assets
-16
3
17
-4
-
0
Reclassified as investment property
-
-154
-
-
-
-154
Reclassified from investment property
8,428
3,242
-
-
-
11,670
Reclassified as intangible assets
-
-5
-
-
-
-5
Reclassified as long-term assets classified for sale
-1,203
-3,299
-
-
-
-4,502
Revaluation recognized in profit/loss – impairment
-
-
-864
-
-
-864
Disposals – write-offs
-2,713
-8,925
-5,542
-6
-161
-17,347
Foreign exchange differences 845
623
87
14
1
1,572
Balance at 31 December 2011 (Cost)
110,877
184,547
83,863
12,772
161,898
553,957
Additions Reclassified between assets
Reclassified as investment property
Equity changes
Reclassified as assets classified for sale
Reclassified as intangible assets
Disposals – write-offs
Foreign exchange differences -25
54
-15,177
-103
-
-
-373
-2,386
1,726
535
-27,390
-
-
-
-746
-2,131
1,613
-614
-
-
-297
-15
-2,774
-678
188
-126
-10,221
-
-
-
-176
-82
-
125
-9,925
-
-
-
-49
-3
3,501
-26
-62,713
-103
-297
-15
-4,118
-5,281
Balance at 31 December 2012 (Cost)
92,867
156,540
81,097
2,356
152,045
484,904
Accumulated depreciation at 1 January 2011
0
80,739
55,087
184
10,582
146,592
Depreciation
Reclassified between assets
Reclassified as investment property
Reclassified from investment property
Reclassified as intangible assets
Reclassified as long-term assets classified for sale
Revaluation recognized in profit /loss – impairment
Disposals – write-offs
Foreign exchange differences 06,846 5,665
-
7
-7
-
-6
-
-
25
-
-
-5
-
-
-2,288
-
-
-
-247
-
-4,341
-5,503
-
23
-44
Accumulated depreciation at 31 December 2011
0
Additions
Depreciation
Reclassified between assets
Reclassified as investment property
Reclassified as assets classified for sale
Disposals – write-offs
Foreign exchange differences - -1,142 -
- 1,142
-5,342 5,166
- 2,694 13,201
-
-1
-135
-
-8
-144
-
-13,196
-
-
-1,777
-14,973
-
-
-82
-
-
-82
-
-231
-2,576
-165
-27
-2,998
-
-281
-254
-16
-3
-553
Accumulated depreciation at 31 December 2012
0
72,632
58,214
10
14,260
145,116
105,603
110,877
92,867
111,737
103,547
83,908
34,886
28,911
22,883
12,607
12,582
2,345
151,192
148,517
137,786
416,025
404,434
339,788
Carrying amount 1 January 2011
Carrying amount 31 December 2011
Carrying amount 31 December 2012
80
80,999
54,952
-
-
-
-
-
-
-
-
6
191
2,885
-
-
-
-
-
-
-87
1
13,381
15,397
-6
25
-5
-2,288
-247
-9,930
-14
149,523
Significant Changes in Property, Plant and Equipment in the Merkur Group in 2012
In 2012, the Merkur Group’s direct investments in property, plant and equipment amounted to €3,501 thousand, as follows:
• investment in property 1,701
• acquisition of plant, machinery and equipment
1,613
• work in progress: buildings and equipment
188
TOTAL
3,501
The carrying amounts of significant disposals of property, plant and equipment in 2012:
• sale of land
373
• sale of buildings
515
• sale and destruction of plant and equipment
198
• write-off of current investments
11
• transfer of operating lease to finance lease
22
TOTAL
1,119
The amortization and depreciation expense included in the operating costs of the Merkur Group amounted to €13,201
thousand in 2012 and €15,397 thousand in 2011.
The Group holds 14 shopping centres in Slovenia, Croatia, Serbia and Bosnia and Herzegovina under finance lease. Their
carrying amount as at 31 December 2012 was €137,422 thousand. In addition, the Group holds personal vehicles and
forklifts under finance lease.
Assets Pledged as Security and Reservation of Title
A mortgage is entered on the properties of Merkur Group companies, the carrying amount of which totals €142,966
thousand as at 31 December 2012. The company is not allowed to dispose the pledged property without the permission
of the creditor.
In the case of a finance lease, the lessor has the ownership right over the leased item until the expiry of the lease agreement.
Liabilities from finance lease are presented under Note 5.15 “Long-Term and Short-Term Finance Lease Liabilities”.
The book values of the pledged property, plant and equipment as at 31 December 2012 by Group companies are as follows:
Company
In € thousand
31 December 2012
Mersteel, d. o. o., Zagreb
2,072
Merkur International, d. o. o., Beograd
2,730
Merkur Čelik, d. o. o., Beograd
10,494
Mersteel Profil doo, Beograd
3,199
Intermerkur - Nova, d. o. o., Sarajevo
4,844
Merkur Makedonija, doo, Skopje
1,668
Merkur, d. d., Naklo
89,325
Mersteel, d. o. o., Naklo
28,634
Total142,966
Property Carried at the Revaluation Model
The property carried at the revaluation model was valued by a certified appraiser on 30 June 2010. The valuation was
performed in line with the International Valuation Standards with reference to the comparable market transactions among
unrelated entities. The Management Board estimates that the baseline that presented the basis for evaluation did not
change significantly by 31 December 2012.
Impairment loss
No impairments of fixed assets were made in 2012.
81
FINANCIAL REPORT
5.3 Investment Property
Investment Property by Types
In € thousand
Merkur, d. d. Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Investment property
Land Buildings Buildings under finance lease
Investment property being acquired
58,955
25,854
25,228
7,871
2
22,012
10,600
11,412
-
-
87,236
53,735
25,628
7,871
2
22,160
10,600
11,560
-
The investment property leased by the company/Group generated a constant rental income throughout the lease period.
In 2012, the rental income from investment property amounted to €1,981 thousand (2011: €903 thousand) at Merkur, d. d.,
and €2,628 thousand (2011: €1,902 thousand) at the Merkur Group.
Changes in the Investment Property of Merkur, d. d., in 2012 and 2011
In € thousand
BuildingsInvestment
under propertyInvestment
Item
Land
Buildings
finance lease
being acquired
property
Balance at 1 January 2011
Additions
Reclassified as property, plant and equipment
Disposals Balance at 31 December 2011
18,443
17,719
0
0
36,162
-
15--
15
-
-14
-
-
-14
-7,843
-6,308--
-14,151
10,600
11,412
0
0
22,012
Additions
Transfers from property, plant and equipment
Disposals
Balance at 31 December 2012
---22
15,719
14,195
7,871
-
37,784
-464
-378--
-843
25,854
25,228
7,871
2
58,955
A mortgage is entered on the investment properties of Merkur, d. d., the carrying amount of which totals €46,341 thousand
as at 31 December 2012.
The fair value of the investment property was determined on 30 June 2010 by a certified appraiser who holds a license
of the Slovenian Institute of Auditors. The values were determined based on the method of comparable sales among
independent parties. The Management Board estimates that the baseline that presented the basis for evaluation did not
change significantly by 31 December 2012.
Due to the inactivity of the Slovenian real-estate market, the fair value of the investment property is based on extremely
limited market data. The future economic situation is very uncertain, which might significantly affect the value of property.
Hence, the financial statements may not include all the potentially significant effects of such uncertainty.
82
Changes in the Investment Property of the Merkur Group in 2012 and 2011
In € thousand
BuildingsInvestment
under finance property being Investment
Item
LandBuildings
lease acquired property
Balance at 1 January 2011
Additions
Reclassified as property, plant and equipment
Disposals Balance at 31 December 2011
26,871
20,922
-
-
47, 793
-
15--
15
-8,428
-3,069
-
-
-11,497
-7,843
-6,308--
-14,151
10,600
11,560
0
0
22,160
Additions
Adjustment to the fair value Reclassified from property, plant and equipment
Reclassified from long-term assets
Disposals
Foreign exchange differences
Balance at 31 December 2012
546--2
548
1,587
-
-
-
1,578
25,398
14,472
7,871
-
47,740
16,419
-
-
-
16,419
-464
-378--
-843
-350
-25
-
-
-375
53,735
25,628
7,871
2
87,236
A mortgage is entered on the investment properties of the Merkur Group, the carrying amount of which totals €48,471
thousand as at 31 December 2012.
The fair value of investment property was determined on 30 June 2010 by a certified appraiser who holds a license of the
Slovenian Audit Institute or an equivalent expert abroad. The values were determined based on the method of comparable sales among independent parties. The Management Board estimates that the baseline that presented the basis for
evaluation did not change significantly by 31 December 2012.
Reclassifications among long-term assets in 2011 included those assets/property where the carrying amount would be
regained, particularly with their sale and not with their further use. Due to the difficult situation in the real-estate market,
assets were reclassified to investment property. The Management is still making every effort to find a buyer for the said
property.
5.4 Investments in Subsidiaries
Investments of Merkur, d. d., in Subsidiaries
Item
Investments in subsidiaries
In € thousand
31 Dec 2012
31 Dec 2011
41,017
74,583
In € thousand
Ownership Ownership Ownership InvestmentInvestment
stake
stake in %
stake in %
value
value
Item
since
31 Dec 2012 31 Dec 2011
31 Dec 2012 31 Dec 2011
Investments in shares in subsidiaries in Slovenia
Big Bang, d. o. o., Ljubljana
1999
100
100
11,191
11,191
Mersteel, d. o. o., Naklo
2008
100
100
2,732
5,656
Investments in shares in subsidiaries abroad
Merkur Hrvatska Zagreb, d. o. o., Hrvaška
1994
100
100
-
6,168
Merkur International Beograd, d. o. o., Srbija
1994
100
100
21,211
45,685
Perles Merkur Italia, s.r.l., Italija
1994
100
100
-
Merkur Čelik, d. o. o., Beograd, Srbija
2007
66.16
66.16
5,883
5,883
Merkur, d. o. o., Cetinje, Črna Gora
2008
100
100
-
Intermerkur Nova, Sarajevo, d. o. o., Bosna in Hercegovina
2007
100
100
-
Total
41,017 74,583
83
FINANCIAL REPORT
Information on the amount of equity in subsidiaries and their profit or loss in 2012 are presented in the table below:
Equity of Active Subsidiaries as at 31 December 2012 and Their Net Profit or Loss in 2012
Company
In € thousand
Total equity
of company
31 Dec 2012
Net profit or loss of the
Company 2012
Total equity
of company
31 Dec 2011
Net profit or
loss of the
Company 2011
3,972
8,723
686
38,692
9,694
-1,807
-422
144
-5,491
-3,071
-127
-1,536
4,394
8,579
6,167
45,685
10,745
-271
-9,841
1,062
-7,411
-4,479
-280
-1,775
- Mersteel, d. o. o., Naklo
- Big Bang, d. o. o., Ljubljana
- Merkur Hrvatska, d. o. o., Zagreb
- Merkur International Beograd, d. o. o.
- Merkur Čelik, d. o. o., Beograd
- Intermerkur Nova, d. o. o., Sarajevo Changes in Investments of Merkur, d. d., in Subsidiaries in 2012 and 2011
Item
In € thousand
Investments in subsidiaries
Net value at 1 January 2011
Capital increases of subsidiaries
Impairment of financial investments in subsidiaries
Net value at 31 December 2011
73,983
19,811
-19,211
74,583
Impairment of financial investments in subsidiaries
Net value at 31 December 2012
-33,565
41,017
Changes in the Investments in Subsidiaries in 2012
The Company assessed the recoverable value of investments in subsidiaries and concluded the book value exceeds their
recoverable value on 31 December 2012. Hence, the company impaired investments to the assessed recoverable value
and recognized the financial expenses in the amount of €33,565 thousand. Investments in the following subsidiaries were
impaired:
• Mersteel, d. o. o., Naklo in the amount of €2,924 thousand,
• Merkur Hrvatska, d. o. o., Zagreb in the amount of €6,167 thousand, and
• Merkur International, d. o. o., Beograd in the amount of €24,474 thousand.
Pledged Investments in Subsidiaries
The following ownership shares are pledged for securing the loans raised by Merkur, d. d.:
• Big Bang, d. o. o., Ljubljana in the amount of 100%,
• Merkur Hrvatska, d. o. o., Croatia in the amount of 100%,
• Merkur International, d. o. o., Serbia in the amount of 100%.
84
5.5 Long-Term Investments in Associated Companies
Long-Term Investments in Associated Companies
In € thousand
Companies Ownership
stake
since
Ownership
stake in %
31 Dec 2012
Value of
investment
31 Dec 2012 Ownership
stake in %
31 Dec 2011
Value of
investment
31 Dec 2011
Investments in shares of associated companies:
Železokrivnica SCT – Merkur, d. o. o., Ljubljana, Slovenia
Kemo Niš, d. o. o., Niš, Serbia
2006
1991
45
30
-
-
45
30
-
Kemo Niš, d. o. o., Niš, Serbia, is an associated company in the process of liquidation that was not yet completed in 2012.
The associated company Železokrivnica SCT – Merkur, d. o. o., Ljubljana has been in bankruptcy proceedings since 14
March 2011.
5.6
Long-Term Financial Investments
Long-Term Financial Investments by Types
In € thousand
Item
Long-term investments
Available-for-sale financial assets
Deposits
Merkur, d. d. 31 Dec 2012
Merkur, d. d.
31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
57,724
55,580
2,145
86,919
84,774
2,145
59,385
55,580
3,805
88,178
84,774
3,403
Changes in the Available-For-Sale Financial Assets of Merkur, d. d, and the Merkur Group in
2012 and 2011
In € thousand
AFS financial assets
Item
Merkur, d. d.
Merkur Group
Net value on 1 January 2011
Change in fair value in other comprehensive income
Disposals Impairment loss through profit/loss
Reversal of impairment
Net value on 31 December 2011
Change in fair value in other comprehensive income
Change in fair value in sales
Disposals and write-offs
Impairment loss through profit or loss
Reversal of impairment loss through profit or loss
Net value at 31 December 2012
128,650
-19,243
-14,401
-10,233
1
84,774
-1,029
-2,295
-25,585
-356
71
55,580
128,650
-19,243
-14,401
-10,233
1
84,774
-1,029
-2,295
-25,585
-356
71
55,580
The fair values of the available-for-sale financial assets were determined on 31 December 2012. On the basis of the valuations,
the company found that the fair values of some investments were below their carrying amount: the effect on the fair
value is recognized in the statement of other comprehensive income in the amount of €1,029 thousand (of which €1,041
thousand refers to shares of Gorenjska banka, d. d., Kranj), and €356 thousand (of which €204 thousand refers to shares of
Gorenjska banka, d. d.) as a financial expense in the statement of comprehensive income.
85
FINANCIAL REPORT
The most significant available-for-sale financial assets according to their balance at
31 December 2012 are:
In € thousand
Investment Gorenjska banka, d. d., Kranj
Perutnina Ptuj, d. d.
Cimos, d. d., Koper
Sava, d. d., Kranj
Number of
Ownership
shares at
stake in % at
Cost of
Revalued
Adjusted
31 Dec 2012 31 Dec 2012
investment
investment
investment
9,089
1,434,485
500,000
134,923
2.74
24.26
3.00
6.72
9,347
25,821
7,789
32,571
-
-
-
-
-203
-4,375
-17,325
The shares of Gorenjska banka are valued at the book value less 10%. The Management Board estimates that this is a
reliable estimate of the fair value, since the company cannot obtain reliable financial information on the bank’s operations
in the current year and due to the volatility in the Slovenian securities market.
The shares of Sava, which are traded on the Stock Exchange, are measured at the valuation model. The valuation was
made by a certified appraiser with a license from the Slovenian Institute of Auditors. Since Sava is a financial holding, a
valuation based on assets was selected as the most appropriate model, and within this method the method of adjusted
book values based on the going concern assumption. The valuation was performed based on the International Valuation
Standards. Since Merkur did not have access to information on Sava’s operations as at 31 December 2012, the investment
was recognized at the value based on the valuation carried out on 30 June 2011. At the end of the fiscal year, the stock
exchange quotation for Sava shares was €3.4 per share.
The financial investments in Perutnina Ptuj, d. d., in which the company has a 24.26% ownership stake and in the equity of
Kopitarna Sevnica, d. d., in which the company has a 24.20% ownership stake, are classified as available-for-sale investments
and are recognized at the cost less any impairments. The company has no influence on the operations and decisionmaking in these two companies.
There is an uncertainty regarding a dispute on the right of repurchase related to the investment in Perutnina Ptuj, d. d.
Merkur and Perutnina Ptuj, d. d., entered a “Protocol on mutual assistance – a mutual agreement” on the repurchase rights
for their shares, respectively. Perutnina owns 64,198 MER shares with a value of €26,000 thousand, and Merkur owns
1,434,485 PPTG shares with a value of €25,821 thousand. Based on the Protocol, the repurchase rights must be exercised
simultaneously by entering an agreement on the double purchase and sale of shares. If one of the parties demands it, the
other is obliged to realize the option with immediate effect. The PPTG shares are additionally burdened with a ban on the
right to dispose of shares.
On 18 July 2010, Perutnina Ptuj informed Merkur, d. d., about its intention to realize the option contract for switching
Perutnina Ptuj shares for Merkur shares. The Management Board of Merkur rejected this based on a legal opinion claiming
the contract might be in violation of the law and thus void as it would lead to Merkur acquiring its own shares in conflict
with the legal restrictions. There were no changes related to this issue in 2012.
Disposals of Available-For-Sale Financial Assets in 2012
In 2012, the Group disposed the following available-for-sale financial assets:
•20,000 shares of Gorenjska banka, d. d., Kranj (GBKR shares) at €780 per share; the total value of the transaction was €15,600 thousand (plus €4,963 thousand of loss on disposal),
•1,317 shares of Triglav zdravstvena zavarovalnica, d. d., Koper (ZACR shares) at €6 per share; the total value of the transaction was €8 thousand,
•530 shares of Cetis, d. d., Celje (CETG shares) at €25 per share; the total value of the transaction was €13 thousand,
•525 shares of Hotel Lev, d. d., Ljubljana (LEVG shares) at €2 per share; the total value of the transaction was €1 thousand, and
•5,000 FB15 bonds issued by Factor banka, d. d., with the nominal value of €1,000 per bond; the total value of the transaction under the agreement on repurchase of bonds was €5,000 thousand.
86
Pledged Investments and Additional Restrictions of the Disposal
On 31 December 2012, the following securities of the company were pledged:
•
9,000 shares of Gorenjska banka, with the book value of €9,054 thousand,
• 1,434,485 shares of Perutnina Ptuj with the book value of €25,821 thousand,
• 130,000 shares of Maksima Invest Ljubljana with the book value of €0 and
• 133,547 shares of Sava, d. d., Kranj with the book value of €15,091 thousand.
Additional restrictions on securities (no right to dispose):
• 1,434,485 shares of Perutnina Ptuj,
•
3,000 shares of Gorenjska banka Kranj – already pledged, and
• 60,000 shares of Save, d. d., Kranj – already pledged.
On 31 December 2012, a part of the company’s securities portfolio was subject to a claim for execution of financial
receivables (unchanged situation as compared with 31 December 2011).
Changes in the Deposits given of Merkur, d. d., and the Merkur Group in 2012 and 2011
In € thousand
Given deposits
Item
Merkur, d. d.
Merkur Group
Gross value at 1 January 2011
Additions
Foreign exchange differences
Gross value at 31 December 2011
2,145
3,393
-26
-
-16
2,145
3,403
Additions
Repayments
Reclassified as deposit from loan
Foreign exchange differences
Gross value at 31 December 2012
-4
--6
-
373
-
30
2,145
3,805
Net value at 1 January 2011
Net value at 31 December 2011
Net value at 31 December 2012
2,145
2,145
2,145
3,393
3,403
3,805
The interest rate for the long-term deposit of Merkur, d. d., is EURIBOR + 1.6% markup on an annual basis. The deposit
was provided as security to the lessor and it falls due at the end of 2015. This deposit bears interest on the Group level.
5.7 Loans Given
Long-Term Loans Given by Types
In € thousand
Item
Loans given
Loans to other companies
Loans to subsidiaries
Merkur, d. d.
31 Dec 2012
Merkur, d. d. 31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
30,091
30,084
7
30,109
30,109
-
30,143
30,143
-
30,595
30,595
-
Loans to other companies in the amount of €28,500 thousand refer to loans given to others in the time of the management
buyout and represent harm to Merkur, d. d., such as established in the report of the special audit performed in 2011. In
respect thereof, court proceedings have been initiated as well as out-of-court settlements.
87
FINANCIAL REPORT
Changes in the Long-Term Loans Given by Merkur, d. d., and the Merkur Group in 2012 and 2011
In € thousand
Merkur Group
Merkur, d. d.
Item
Loans to subsidiaries
Loans to others
Loans to others
Balance at 1 January 2011 Short-term maturity of long-term loans
Additions
Attribution of interest
Repayments
Transfer to long-term available-for-sale financial assets
Write-off of loan
Foreign exchange differences
Balance at 31 December 2011
Short-term maturity of long-term loans
Attribution of interest Transfer between assets
Repayments
Write-off of loan
Foreign exchange differences
Balance at 31 December 2012
Allowance at 1 January 2011
Write-off Reversal of impairment
Allowance at 31 December 2011
Write-off Impairments of loans
Reversal of impairment
Transfer between assets
Allowance at 31 December 2012
Net value at 1 January 2011
Net value at 31 December 2011
Net value at 31 December 2012
0
181,560
184,743
-
-170
-171
- 66115
-
29
29
- -58-115
-
-
-5
-
-81
-81
-
-
17
0
181,346
184,533
-
-152
-153
-
24
24
7
201
-172
--58-73
-
-11
-11
-
-
-38
7
181,349
184,111
0
169,754
172,458
-
-19
-19
-
-18,500
-18,500
0
151,236
153,939
-
-12
-12
-
11
11
-
-161
-161
-
191
191
0
151,266
153,968
0
11,805
12,286
0
30,109
30,595
7
30,084
30,143
Collateral for Long-Term Loans Given
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Total
Mortgages
Bills of exchange Other forms of collateral
- movable assets
- with insurance companies
- guarantors
Without collateral
88
30,09130,109 30,14330,595
77867786
19,362
19,362
19,392
19,362
426
550
426
596
-
-
-
46
169
228
169
228
257
322
257
322
10,227
10,111
10,248
10,551
Maturity of Long-Term Loans Given by the Merkur Group
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Loans given
Maturity in 1 to 2 years
Maturity in 2 to 5 years
Maturity in more than 5 years
30,091
29,723
263
105
30,109
29,620
324
166
30,143
29,746
267
130
30,595
29,627
344
624
Long-Term Loans Given by Merkur, d. d., and Merkur Group by Currency and Interest Rate
Currency
EUR
RSD
HRK
Total
Amount in
€ thousand Merkur, d. d.
Merkur Group
Interest
rate from
Interest
rate up to
Amount in
€ thousand
Interest
rate from
Interest
rate up to
30,091 1.30% 5.50%30,087 3.30%8.50%
-
-
- 25 0.00%0.00%
-
-
- 30 4.11%4.50%
30,091
30,143
5.8 Inventories
Inventories by Types
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Inventories Material
Unfinished products
Products and merchandise - goods in warehouses
- goods in shops
- goods in transit 39,524
41,767
76,272
84,234
50 58366629
-
-
8
82
39,474
41,708
75,899
83,522
8,966
10,683
20,364
27,276
30,236
30,837
54,060
55,762
272
188
1,475
483
At the end of 2012, the net realizable value of the company’s inventories obtained on the basis of the expected net sales’
prices of items less the direct cost of the sale, exceeded the book value of the inventories. Inventories have been pledged in
the amount of €35,685 thousand (of which €2,970 thousand for loans raised by Mersteel, d. o. o.), and in the Merkur Group
inventories have been pledged in the amount of €41,562 thousand.
Inventory Surplus and Deficit After Stocktaking
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item31 Dec 2012 31 Dec 201131 Dec 201231 Dec 2011
Merchandise – net Surplus
Deficit
183
-176
189
-310
360423491579
-177-599-302-889
No significant surplus or deficits were found during the regular annual or interim stocktaking.
89
FINANCIAL REPORT
Changes in the Allowance of Inventories Due to the Adjustments to the Realizable Value
in 2012 and 2011
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Balance at 1 January
Impairments during the year Reversal of impairments
Foreign exchange difference
Allowance reversal due to the divestiture of a company
Write-off of inventories
Balance at 31 December
2,814
7
-1,372
-
-
-59
1,390
2,531
415
-
-
-
-132
2,814
5,233
191
-2,192
-39
-
-80
3,113
6,021
351
12
-964
-186
5,233
5.9 Short-Term Loans Given and Finance Lease Receivables
Short-Term Loans Given and Financial Lease by Types
In € thousand
Merkur, d. d. Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Short-term loans given and finance lease
Loans to subsidiaries
Loans to other companies
- short-term part of long-term loans
- short-term loans given
6,129
5,977
152
152
-
6,144
5,977
167
167
-
388
-
388
385
3
405
405
402
3
Changes in Short-Term Loans Given by Merkur, d. d., and the Merkur Group in 2012 and 2011
In € thousand
Merkur, d. d.
Merkur Group
Item
Gross value at 1 January 2011
Short-term maturity of long-term loans
Repayments Reschedule to long-term loans
Transfer from short-term loans given
to long-term loans
Conversion of loan into investment
Write-off
Gross value at 31 December 2011
Short-term maturity of long-term loans
Repayments Foreign exchange differences
Gross value at 31 December 2012
15,165
-
-
-
28,270
171
-
-203
42
-
-42
-
28,560
171
-3
-
42
-42
-
---
-249-9,188
-
-
-
--1,649-1,652
5,977
26,589
0
26,826
0
-
152
--168
-
-
5,977
26,573
-
153
--168
-
-2
0
26,809
0
Allowance at 1 January 2011
Write-off
Allowance at 31 December 2011
0
28,070
--1,649
0
26,421
0
28,073
--1,652
0
26,421
0
0
Allowance at 31 December 2012
0
26,421
0
26,421
0
15,165
5,977
5,977
200
167
152
42
0
0
486
405
388
42
0
0
Net value at 1 January 2011
Net value at 31 December 2011
Net value at 31 December 2012
90
Short-termShort-term FinanceShort-term Finance
loans to
loans to other
lease
loans to other
lease
subsidiaries
companies
receivables companies
receivables
Collaterals for Short-Term Loans Given
In € thousand
Item
Merkur, d. d. 31 Dec 2012
Total
Mortgages
Bills of exchange Other forms of collateral
- with insurance companies
- with guarantors Without collateral
Merkur, d. d.
31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
6,1296,144 388 405
14131413
5,977
5,977
-
139
154
139
154
61
66
61
66
78
88
78
88
-
-
236
238
Short-Term Loans Given by Merkur, d. d., and the Merkur Group by Currency and Interest Rate
Currency
Amount in
€ thousand
EUR
RSD
HRK
Skupaj
Merkur, d. d.
Merkur Group
Interest
Interest Amount in
Interest
rate from
rate up to
€ thousand
rate from
Interest
rate up to
6,1291.30%4.68% 3693.58%7.60%
-
-
- 16 0.00%0.00%
-
-
-
34.00%4.50%
6,129
388
5.10 Trade Receivables and Other Assets
Short-Term Trade Receivables and Other Assets
In € thousand
Merkur, d. d. Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Trade receivables and other assets
Advances for inventories
Accounts receivable Trade receivables due from subsidiaries
Trade receivables due from others Deferred costs and accrued revenue
40,420
530
16,764
19,330
2,527
1,269
41,057
422
21,801
15,221
2,670
944
45,095
1,753
34,903
-
5,840
2,598
50,192
1,547
41,811
5,656
1,178
The changes in the revaluation of receivables and the maturity structure of receivables are presented in Item 6.8 “Financial
Instruments and Risk Management”.
5.11
Assets Held for Sale
Assets Held for Sale
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Assets Held for Sale
Property for sale
0
0
1,807
1,807
0
0
1,807
1,807
In 2012, the Group/company disposed all the assets that were classified as held for sale as at 31 December 2011.
91
FINANCIAL REPORT
5.12 Cash and Cash Equivalents
Cash and Cash Equivalents
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Cash and cash equivalents Cash in hand
Cash in banks
Demand deposits
Received cheques 2,763
269
389
2,106
-
8,110
477
587
7,046
-
5,382
595
1,466
2,995
326
12,290
1,052
1,800
9,266
172
The company does not have any automatic bank overdrafts on its bank accounts. The fixed annual interest rate for demand
deposits is between 1.5% to 2.2%. Demand deposits include €181 thousand of deposits for open letters of credit with the
annual interest rate of 0.4%.
At the Group level, the company Big Bang, d. o. o., has an automatic bank overdraft on its account with NLB, d. d., in the
amount of up to €1 million with the annual fixed interest rate of 7.15% (as at 31 December 2012 there was no automatic
bank overdraft). The annual interest rate for demand deposits is between 0.4% and 3.1%.
As at 31 December 2012, deposits in the amount of €2,995 thousand include €500 thousand at the Mersteel d. o. o., Naklo
pledged as collateral for all its liabilities to Factor banka under the agreement on short-term blanket overdraft. The deposit
terminates on 20 August 2013.
5.13 Equity and Reserves
The share capital of Merkur, d. d., the controlling company of the Group, totals €3,066 thousand and is divided into
3,066,444 ordinary no-par value shares. All shares have been fully paid in. An ordinary no-par value share is registered in the
name of the holder and gives its holder the right to:
• one vote at the General Meeting of Shareholders,
• a pro rata dividend from profit appropriated for dividend payout,
• a pro rata portion of the remainder of the estate in bankruptcy or liquidation in the event of bankruptcy or liquidation.
Authorized capital
No resolutions have been adopted regarding the authorized capital.
Conditional Capital Increase
The Articles of Association of Merkur, d. d., do not include any provisions on conditional capital increase.
Revenue reserves at the Group level are €1,869 thousand, whereas Merkur, d. d., has no reserves.
Own Shares
In 2011, the Group withdrew €53,159 thousand of own shares. These shares were obtained with the purpose defined under
indent 2 of Article 247 of the ZGD, namely as for employee share-based payment. The plan was abolished, therefore the
shares were withdrawn.
The subsidiaries Mersteel, d. o. o., and Merkur International, d. o. o., Beograd, also own stakes in the controlling company
Merkur, d. d., therefore the Group decreased the equity in the consolidated financial statements by the book value of cross
ownership. The fund of own shares has not been formed, since the Group has no reserves or any other equity groups for
which the fund of own shares could be formed.
The fair value reserve totals €33,848 thousand (the Merkur Group: €55,199 thousand) and represents the effects of
changes in the fair value of available-for-sale financial assets and property.
92
The translation reserves at the Merkur Group are negative and increased by €3,599 thousand in 2012. As at 31 December
2012, they total €22,098 thousand (31 December 2011: €18,499 thousand) and refer to foreign exchange differences in
including foreign subsidiaries’ financial statements in the consolidated financial statements.
Retained Loss
As at 31 December 2012, the company’s retained loss totalled €76,306 thousand (the Merkur Group: €41,381 thousand).
Loss in 2012 and Loss Carried Forward
The Management Board established that the company generated a loss of €76,306 thousand (the Merkur Group:
€41,381 thousand), which however cannot be covered from other equity items.
Events After the Balance Sheet Date Related To Capital Adequacy
In 2012, the controlling company Merkur, d. d., successfully ended the process of the conversion of debt into capital, the
cancellation of debt and the increase in share capital. The details are explained in Point 9 Events After the Balance Sheet
Date.
5.14 Long-Term Borrowings
Long-Term Borrowings by Types
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Long-term borrowings
Borrowings from banks
Borrowings from others
207,745
206,424
1,321
272,210
270,228
1,982
264,433
263,112
1,321
324,965
322,983
1,982
Changes in the Long-Term Borrowings in Merkur, d. d. and the Merkur Group in 2012
In € thousand
Merkur,
d. d.
Merkur Group
BorrowingsBorrowingsBorrowingsBorrowings
Item
from banks from others
from banks
from others
Balance at 31 December 2011
270,228
1,982
322,983
1,982
Foreign exchange differences
-
-
-1,337
Decrease in loans due to the liquidation of collaterals
-8,450
-
-8,450
Reclassified from short-term to long-term loans for repayments under CS*4,343
-
4,343
Reclassified to short-term financial liabilities related
to the conversion of debt into capital
-27,581
-
-27,581
Reclassified to short-term financial liabilities
related to debt extinguishment
-23,786
--23,786
Reclassified from short-term to long-term loans – reschedule
-
-
541
Short-term part of long-term loans
-8,330
-661
-
-661
Reclassified from long-term loans to short-term loans under CS
-
-
-3,600
Balance at 31 December 2012
206,424
1,321
263,112
1,321
*CS – compulsory settlement
The syndicated loan in the amount of €35,000 thousand received by the controlling company Merkur, d. d., was transferred
from a long-term to a short-term period due to the failure to fulfil the debt covenants already in the balance as at 31
December 2011. The loan agreement was concluded on 28 December 2010 with the maturity date on 31 December 2016.
Under the agreement, the company must fulfil the following debt covenants: the amount of net cash flow, the amount of
working capital, revenue, and of profit before tax. All of the four covenants except the amount of revenue were fulfilled on 31
December 2011, whereas on 31 December 2012, the covenant of the amount of working capital was fulfilled out of the four.
93
FINANCIAL REPORT
The decrease in loans due to the liquidations of collaterals in the amount of €8,450 thousand in 2012 refers to the liquidation
of the collateral at Merkur, d. d., (the loan was collateralized with shares of Gorenjska banka), €4,343 thousand is a part,
with this the same creditor entered compulsory settlement as an ordinary creditor after the liquidation of collateral for the
outstanding part of the loan (liability related to the loan less the liquidation of collateral; a 45% discount is applied to the
unsettled part such as voted after the confirmed compulsory settlement of Merkur, d. d.), and €4,486 thousand (presented
in the table of changes in short-term borrowings under Item 5.18 “Borrowings”) is the discount for a 40% write-off in
accordance with the provisions of the compulsory settlement.
The loans, which were in December 2012 voted for the write-off of the loan and the conversion of debt into capital (details
are provided in Item 9 “Events After the Balance Sheet Date”), were reclassified from a long-term to a short-term period in the
total amount of €51,367 thousand.
Long-Term Borrowings of Merkur, d. d., and the Merkur Group by Currency and Interest Rate
Currency
Merkur, d. d.
Merkur Group
Amount in
€ thousand Interest
rate from
Interest
rate up to
Amount in
€ thousand
Interest
rate from
Interest
rate to
207,745
207,745
0.00%*
4.29%
264,433
264,433
0.00%*
5.23%
EUR
Total
*Liabilities under the confirmed compulsory settlement do not bear interest.
Secured/Unsecured Long-Term Borrowings
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Borrowings (at amortized cost)
With mortgage
Inventories as collateral
Bills of exchange as collateral
Securities as collateral
Without collateral
207,745
120,662
67,301
-
8,105
11,678
272,210
156,585
73,113
-
23,644
18,868
264,433
151,792
73,383
5,077
8,105
26,076
324,965
178,320
80,114
6,021
23,644
36,867
The table presents the carrying amount of secured and unsecured borrowings at amortized cost as at 31 December 2012.
The table only presents the carrying amount of borrowings for which security has been pledged.
Maturity of Long-Term Borrowings
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Borrowings
Maturity in 1 to 2 years
Maturity in 2 to 5 years
Maturity in more than 5 years
94
207,745272,210264,433324,965
10,321
10,383
23,460
22,313
36,098
34,895
68,621
65,689
161,326
226,932
172,352
236,963
5.15 Long-Term and Short-Term Financial Lease Liabilities
A majority of the company’s/Group’s assets held under finance lease are in property (shopping centres) intended for
carrying out its activity. The average (weighted by value) duration of lease is 11.6 years for Merkur, d. d., and 13.5 years for
the Merkur Group. At 31 December 2012, the average (weighted by value) time until the expiry of finance lease agreements
is 4.6 years for Merkur, d. d., and 8.3 years for the Merkur Group. The company/Group has the right to repurchase these
properties after the agreements expire. The liabilities from finance lease are secured with the lessor’s ownership right for
the subject of the lease.
Long-Term and Short-Term Finance Lease Liabilities
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Long-term financial lease liabilities
Short-term financial lease liabilities
Total
50,764
53,217
134,354
138,017
2,626
2,439
4,241
4,410
53,390 55,656138,595142,427
Liabilities from Assets Under Finance Lease by Maturity
In € thousand
Liabilities from assets under
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
finance lease fall due:
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
In up to one year
In more than one year and not more than five years In more than five years
Total
2,626
2,439
4,241
4,410
37,971
39,928
46,435
48,194
12,793
13,288
87,919
89,822
53,390 55,656138,595142,427
Finance Lease Liabilities of Merkur, d. d., and the Merkur Group by
Currency and Interest Rate
Currency
EUR
Total
Merkur, d. d.
Merkur Group
Amount in
€ thousand
Interest
rate from
Interest
rate up to
Amount in
€ thousand
Interest
rate from
Interest
rate up to
53,390 1.82% 3.69%138,595 1.82% 7.70%
53,390
138,595
95
FINANCIAL REPORT
Changes in financial lease liabilities of Merkur, d. d. and the Merkur Group in 2012 and 2011
In € thousand
Finance lease liabilities
Item
Merkur, d. d. Merkur Group
Long-term part of finance lease liabilities at 1 January 2011
55,463
142,155
Short-term part of finance lease liabilities at 1 January 2011
2,211
3,381
Additions -
93
Repayments -4,199
-9,173
Attribution of interest 2,182
5,270
Foreign exchange differences
-
700
Short-term part of finance lease liabilities at 31 December 2011
-2,439
-4,410
Long-term part of finance lease liabilities at 31 December 2011
53,217
138,017
Short-term part of finance lease liabilities at 31 December 2011
2,439
Repayments -4,118
Attribution of interest
1,852
Short-term part of finance lease liabilities at 31 December 2012
-2,626
Long-term part of finance lease liabilities at 31 December 2012
50,764
4,410
-9,541
5,710
-4,241
134,354
5.16 Long-Term Liabilities
Long-Term Liabilities
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Long-term liabilities Long-term operating payables based on advances
Long-term trade payables to suppliers Long-term trade payables to subsidiaries Long-term trade payables to others
23,699
3
19,443
4,244
10
32,029
3
27,332
4,673
21
28,206
3
28,193
-
10
38,214
3
38,190
21
A major part of other long-term liabilities are payables to suppliers under the compulsory settlement attributable to the
controlling company Merkur, d. d., and the company Mersteel, d. o. o.
5.17 Long-Term and Short-Term Provisions
Long-Term Provisions by Types
In € thousand
Merkur, d. d.
Merkur, d. d. Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Long-term provisions
Provisions for severance payments Provisions for issued guarantees
Provisions for taxes
Other provisions
96
11,205
1,439
6,657
1,460
1,649
21,775
3,388
12,686
3,649
2,052
16,906
2,142
11,655
1,460
1,649
21,629
4,270
11,645
3,649
2,064
Changes in Long-Term Provisions of Merkur, d. d., in 2012 and 2011
In € thousand
Provisions
Provisions for
for issued
Provisions
Other
Long-term
Item
severance pay
guarantees
for taxes
provisions
provisions
Balance at 1 January 2011
Provisions made during the year
Provisions used during the year
Provisions adjusted during the year
Reversal of provisions
Balance at 31 December 2011
Provisions made during the year
Provisions used during the year
Provisions adjusted during the year
Reversal of provisions
Balance at 31 December 2012
4,331
-
-130
-
-813
3,388
-
-96
-
-1,852
1,439
24,768
-
-10,922
-1,161
-
12,686
60
-3,319
-198
-2,571
6,657
3,649
-
-
-
-
3,649
-
-730
-1,460
-
1,460
1,440
92
-513
1,161
-128
2,052
88
-177
198
-513
1,649
34,189
92
-11,565
0
-941
21,775
148
-4,322
-1,460
-4,936
11,205
Provisions for Severance Pay and Jubilee Awards
The following assumptions were taken into account when calculating provisions for severance pay and jubilee awards:
• the growth of the average salary in the Republic of Slovenia is estimated at 1.5% a year, which represents the estimated long-term salary growth,
• the calculation of liabilities for severance pay is connected to the years of service of individual employees,
• the selected discount rate stands at 6.00% a year,
• the Slovenian mortality tables for the 2005–2007 period.
Provisions for Taxes
Provisions for taxes were set aside using the income tax assessment based on the decision issued by the Special Tax Office
of the Tax Administration of RS No. DT 0610-98/2010 0203 31 of 16 March 2011, namely in the amount of 60% or €3,649
thousand of the whole income tax liability for 2009 and of value added tax for the June 2009 tax period. According to the
ZFPPIPP this is a standard liability affected by compulsory settlement (40% discount). The company filed an appeal against
the records and the decision at the second instance, the Ministry of Finance. No decision has yet been made regarding the
appeal.
In 2012, the provision decreased by two instalments, which fell due in accordance with the time schedule of the compulsory
settlement, and the liability that falls due in one year was transferred among short-term trade payables.
Other Provisions
Other provisions apply to the long-term deferred revenue from the sale and leaseback of property and to the retained
contributions for exceeding the quota for the employment of disabled persons, which can be used for improving the
working environment of disabled persons.
Provisions for Issued Guarantees – Merkur, d. d.
Provisions for issued guarantees were set aside for cases when the main debtor, to whom a guarantee was given, is in
the compulsory settlement proceedings (Mersteel, d. o. o., Perles Merkur Italia s.r.l.), bankruptcy (Merfin, d. o. o., Merkur
International Praha s.r.o., Merkur MI Handels G.m.b.H., Alpos, d. d.) or when the main debtor failed to settle its liabilities in
2012 on a regular basis.
Provisions for issued guarantees to all companies except Mersteel, d. o. o., and Merfin, d. o. o., were fully recognized based
on the main debtor’s actual, unsettled liability less the fair value of the pledged assets (creditor with the right to separate
settlement according to the ZFPPIPP) and by taking into account the effect of the compulsory settlement (40% discount).
97
FINANCIAL REPORT
The liabilities to creditors for issued guarantees to the subsidiary Mersteel d. o. o., were recognized by the company in
the amount of the estimated contingent liability of Merkur while taking into account the value of the pledged assets, the
repayments of the main creditor (Mersteel) through the confirmed compulsory settlement of Mersteel, which includes the
payment of the main liabilities related to the separate settlement and main ordinary liabilities while taking into account the
effects of the compulsory settlement in Mersteel (45% discount) and the effects of the confirmed compulsory settlement
in Merkur (40% discount). Merkur’s estimated liability or provision to pay the main creditors of Mersteel amounted to €5,430
thousand at 31 December 2012. In 2012, €3,099 thousand of provisions were reversed due to the settlement of the second
instalment of the compulsory settlement, thus the remaining provision under this item amounts to €2,331 thousand.
The liabilities to Banka Koper for the guarantee issued to Merfin, d. o. o., were recognized by the company in the amount
of €6,000 thousand at 31 December 2011. Regarding this guarantee Merkur, d. d., is the solidary co-pledgee of shares of
Gorenjska banka. In 2012, Merkur reversed a provision in the amount of €2,571 thousand, thus decreasing the carrying
amount of pledged shares in the books of Merkur, d. d. for such amount. At 31 December 2012, the remaining amount of
the provision under this item is only €3,429 thousand.
Other provisions for issued guarantees refer to the guarantees issued to associated companies, which are in the process of
winding up: Merkur MI Handels, Merkur International Praha and Perles Merkur Italia. Details are provided in the table below.
Changes in Provisions for Payments from Guarantees in Merkur, d. d.
Guarantee recipient
Merkur MI Handels, Muenchen
Merfin, d. o. o., Ljubljana
Merkur International Praha, spol. S. r. o. Perles Merkur Italia, s. r. l.
Mersteel, d. o. o., Naklo
Total
Balance at 31 Dec 2012
Change in 2012
In € thousand
Balance at 31 Dec 2011
60
60
3,429
-2,571
219
-109
619
-309
2,331
-3,099
6,658-6,028
6,000
328
928
5,430
12,686
Changes in Long-Term Provisions of the Merkur Group in 2012 and 2011
In € thousand
Provisions
for issued
guarantees,
Provisions for
mortgages
Provisions
Other
Long-term
Item
severance pay
and lawsuits
for taxes
provisions
provisions
Balance at 1 January 2011
Provisions made during the year
Provisions used during the year
Reversal of provisions
Adjusted provisions
Foreign exchange differences
Balance at 31 December 2011
Provisions made during the year
Provisions used during the year
Adjusted provisions
Reversal of provisions
Foreign exchange differences
Balance at 31 December 2012
5,369
23,727
3,649
1,917
34,663
70
-
-
106
176
-341
-10,921
-
-982
-12,245
-836
-
-
-128
-964
-
-1,161
-
1,161
0
8
-
-
-10
-1
4,270
11,645
3,649
2,064
21,629
14
6,596
-
102
6,712
-161
-3,505
-730
-177
-4,573
-
-198
-1,460
198
-1,460
-1,969
-2,881
-
-540
-5,390
-12---
-12
2,142
11,655
1,460
1,649
16,906
Provisions for Severance Payments and Jubilee Awards
The following assumptions were taken into account by countries when calculating provisions for severance pay and jubilee
awards:
Slovenia as explained under Merkur, d. d.
98
Croatia:
• the growth of the average salary in the country is estimated at 0% annually, and the growth of salaries within the company at 0% annually, which represents the estimated long-term salary growth,
• the calculation of liabilities for severance pay is connected to the years of service of individual employees,
• the selected discount rate stands at 8% on an annual basis.
Serbia:
• the growth of the average salary in the country is estimated at 11% annually, and the growth of salaries within the company at 0% annually, which represents the estimated long-term salary growth,
• the calculation of liabilities for severance pay is connected to the years of service of individual employees,
• the selected discount rate stands at 10% on an annual basis.
Bosnia and Herzegovina:
• the growth of the average salary in the country is estimated at 0% annually, and the growth of salaries within the company at 0% annually, which represents the estimated long-term salary growth,
• the calculation of liabilities for severance pay is connected to the years of service of individual employees,
• the selected discount rate stands at 4% on an annual basis.
Provisions for Taxes
Provisions for taxes were set aside only by the controlling company Merkur, d. d., – notes are provided below the table of
changes in the long-term provisions of Merkur, d. d., in 2012 and 2011.
Other Provisions
Other provisions apply to the long-term deferred revenue from the sale and leaseback and to the retained contributions
for the employment of disabled persons, which is earmarked for improving the working environment of disabled persons.
Provisions for Issued Guarantees - Merkur Group
The Group has made provisions for guarantees issued to Merfin d. o. o., and HTC DVA, d. o. o. Both companies are in
bankruptcy proceedings.
Provisions relating to the guarantee issued to Merfin d. o. o., in the amount of €6,000 thousand are explained under
provisions of Merkur, d. d. As at 31 December 2012 the provision under this item is only €3,429 thousand.
Provisions in the amount of €11,631 thousand were made for the loan given to the company HTC DVA, d. o. o., Ljubljana,
by Gorenjska banka, d. d., which Mersteel, d. o. o., secured with a mortgage on property. After the announcement of the
initiation of bankruptcy proceedings over the company HTC DVA, d. o. o., the bank filed for the execution on the property.
As at 31 December 2012, the execution was final.
Guaranteed inside the Merkur Group are intertwined, and some of the companies are in liquidation, bankruptcy or
compulsory settlement proceedings (Merkur MI Handels: €60 thousand, Merkur International Praha: €219 thousand and
Perles Merkur Italia: €619 thousand, Mersteel, d. o. o., Naklo: €-4,301 thousand – unsettled part of short-term liabilities from
guarantees). Details about mutual guarantees are disclosed in the annual reports of the individual companies.
Changes in the Provisions for Payments Under Guarantees for the Merkur Group
In € thousand
Guarantee recipient
Balance at 31 Dec 2012
Change in 2012 Balance at 31 Dec 2011
Merkur MI Handels, Muenchen
Merfin, d. o. o., Ljubljana
Merkur International Praha, spol. S. r. o. Perles Merkur Italia, s. r. l.
Mersteel, d. o. o., Naklo
HTC Dva, d. o. o., Ljubljana
LTH Ulitki, d. o. o.
Prvi faktor, d. o. o.
60
3,429
219
619
-4,301
11,631
-
-
Total11,655
60
-2,571
219
619
-4,301
-
-186
-310
-6,470
6,000
11,631
186
310
18,127
99
FINANCIAL REPORT
Short-Term Provisions by Types
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Short-term provisions
Provisions for lawsuits and contractual liabilities
442
-
900
277
615
-
1,083
278
Provisions for liabilities to employees for unpaid
salaries and unused holiday leave
442
623
615
806
The company’s/Group’s short-term provisions include provisions for liabilities to employees for unused annual leave.
5.18Borrowings
Short-Term Borrowings by Types
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Borrowings
Borrowings from banks
- of which conversion of liabilities from the entry into the register
of companies and the fulfilment of suspensive conditions
114,456 83,088134,798 107,914
107,793
76,561
126,188
101,391
Short-term borrowings from others
- of which conversion of liabilities from the entry into the register
of companies and the fulfilment of suspensive conditions
60,379
-
60,379
-
6,663
6,527
8,610
6,523
3,001
-
3,001
-
€63,380 thousand refers to the borrowings for which the General Meeting voted an increase in the (share) capital and
cancellation of debt in December 2012. Until the entry of the increase in share capital and the fulfilment of suspensive
conditions the amount is recognized as short-term borrowing. The details are provided in Note 9 “Business Events After the
Balance Sheet Date”.
Short-Term Borrowings from Banks to Merkur, d. d., and the Merkur Group
by Currency and Interest Rate
Currency
EUR
RSD
HRK
MKD
BAM
Total
Amount in
€ thousand
Merkur, d. d.
Merkur Group
Interest
rate from
Interest
rate up to
Amount in
€ thousand
Interest
rate from
Interest
rate up to
107,793
0.00%*
4.29%
117,305
0.00%*
7.05%
-
-
- 5,849 2.51%7.44%
-
-
- 788 2.00%8.08%
-
-
- 759 7.20%7.20%
-
-
- 1,488 7.00%9.50%
107,793
126,188
*Liabilities under the confirmed compulsory settlement do not bear interest.
Short-Term Borrowings from Other Companies to Merkur, d. d., and the Merkur Group
by Currency and Interest Rate
Currency
Amount in
€ thousand
Interest
rate from
Interest
rate up to
Amount in
€ thousand
Interest
rate from
Interest
rate up to
6,663
-
-
6,663
0.00%*
-
-
0.00%
-
-
6,654
606
1,350
8,610
0.00%*
2.00%
0.00%
0.00%
7.50%
0.00%
EUR
HRK
RSD
Total
* Liabilities under the confirmed compulsory settlement do not bear interest.
100
Merkur, d. d.
Merkur Group
Secured/Unsecured Short-Term Borrowings
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Borrowings (at amortized cost)
With a mortgage
Guarantees
Inventories as collateral
Bills of exchange as collateral
Securities and shares in subsidiaries as collateral
No collateral
114,456
83,088
134,798
107,914
39,411
44,094
46,648
62,188
-
-4,2334,394
-
-
692
-
-
3,138
2,336
1,784
30,499
1,784
30,499
73,262
8,495
78,304
8,497
The table presents the carrying amount of secured and unsecured borrowings at the amortized cost as at 31 December 2012. The table only presents the carrying amount of borrowings for which
security has been pledged.
Changes in the Short-Term Borrowings of Merkur, d. d., and the Merkur Group in 2012
In € thousand
Merkur, d. d.
Merkur Group
BorrowingsBorrowingsBorrowingsBorrowings
Item
from banks
from others
from banks
from others
Balance at 1 January 2012
76,561
6,527
101,391
6,523
New borrowings
7,000
63
17,664
2,255
Attribution of interest on principal
187
-
520
Repayments of loans
-26,933
-587
-38,628
-824
Cancellation of liabilities under CS
-4,486
-
-4,486
Reclassified from long-term loans due to the reschedule of debt
-
-
-541
Transfer of long-term loans to short-term loans under CS
-
-
3,600
Reclassification of long-term loans for repayments under CS
-4,343
-
-4,343
Reclassification of liabilities from the payment of capital
27,581
-
27,581
Reclassification of liabilities from the remission of debt
23,786
-
23,786
Reclassification of other liabilities from the remission of debt
110
-
110
Short-term part of long-term loans
8,330
661
-
661
Foreign exchange difference
-
-
-466
-5
Balance at 31 December 2012
107,793
6,663
126,188
8,610
5.19 Trade and Other Payables
Short-Term Trade and Other Payables
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Trade and other payables
Trade payables based on advances
Trade payables to suppliers
Trade payables to subsidiaries
Trade payables to others
- salaries payable
- payables to state institutions
- interest payable
- payables on assignment
- accrued costs
- other liabilities
58,053
39,085
99,179
81,637
511
420
1,008
888
37,113
20,703
76,215
58,862
6,841
3,049
-
13,588
14,913
21,956
21,887
2,3192,6363,6564,205
2,4763,8644,533 6,913
1,1762,4051,445 2,912
1 - 350
1,3661,8611,5202,355
6,250 4,14710,799 5,453
101
FINANCIAL REPORT
5.20 Deferred Tax
MERKUR, D. D.
The table below contains a presentation of the differences between the carrying and tax values of assets and liabilities, and
a presentation of the deferred tax that would be recognized if the going concern assumption had not been compromised.
The deferred tax is calculated as the difference between the carrying amount and the tax value of the assets and liabilities
as at 31 December 2012.
In € thousand
Difference between the
Item
carrying and tax value
Tax rate
Deferred tax
Property, plant and equipment 148
Financial assets – investments 157,150
Financial assets – loans
183,987
Trade receivables
23,000
Provisions for severance payments
5,468
Other items
4,281
Tax loss13,803
Total receivables for deferred tax
Property, plant and equipment Financial assets
Other items
Total deferred tax liabilities 17%
17%
17%
17%
17%
17%
17%
387,837
43,092
277
1,098
25
26,715
31,278
3,910
892
728
2,347
65,894
17%
17%
17%
7,326
47
187
44,467
7,559
Net deferred tax assets 58,335
MERKUR GROUP
The table below contains a presentation of the differences between the carrying and tax values of assets and liabilities, and
a presentation of the deferred tax that would be recognized if the going concern assumption had not been compromised.
The deferred tax is calculated as the difference between the carrying amount and the tax value of the assets and liabilities
as at 31 December 2012.
Difference between the
Item
carrying and tax value Property, plant and equipment Financial assets – investments Financial assets – loans Trade receivables
Provisions for severance payments Other items
Tax loss
102
5,034
188,455
184,569
41,044
7,163
5,694
20,317
In € thousand
Deferred tax
622
32,037
31,377
6,994
1,187
904
3,469
Total receivables for deferred tax
452,277
76,590
Property, plant and equipment Financial assets Other items
60,407
277
1,492
9,517
47
254
Total deferred tax liabilities 62,176
9,819
Net deferred tax assets 66,771
6 Notes to the Statement of Comprehensive Income
6.1Revenue
Revenue
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Revenue by categories
Revenue from the sale of goods and products
Revenue from services
Rental income
242,843
235,264
4,623
2,956
226,847
220,334
3,989
2,524
428,889
416,603
7,460
4,825
417,196
406,319
6,990
3,888
Out of €242,843 (2011: €226,847) thousand of the total revenue generated by Merkur, d. d., €185,450 (2011: €118,561)
thousand were generated in retail. Other revenues (wholesale, export) in 2012 were generated in the amount of €57,393
(2011: €108,286) thousand, of which €23,525 (2011: €22,805) thousand were generated by sales to the 15 largest customers,
and of this €15,435 (2011: €15,934) thousand were revenues generated from the sale to Merkur Group companies. Revenues
from the sale of goods are decreased by the discounts given to holders of the Merkur's loyalty card. In 2012, the discounts
granted based on purchases with the loyalty card totalled €1,150 thousand (2011: €997 thousand), which accounts for 0.6%
of the total sales of goods to individuals in retail in the current year. For the issued credits to the holders of the loyalty card
related to the purchases made in the last quarter of 2012 (discounts can be used by the end of April 2013), the revenue was
deferred in the amount estimated for the redeeming of credits, totalling €332 (2011: €315) thousand.
Out of €428,889 (2011: €417,196) thousand of the total revenue generated by the Merkur Group, €315,695 (2011: €232,957)
thousand were generated in retail. Other revenues (wholesale) in 2012 were generated in the amount of €113,194 (2011:
€184,239) thousand, of which €19,674 (2011: €16,279) thousand were generated by sales to the 15 largest customers, and of
this €15,435 (2011: €15,934) thousand were revenues generated from the sale to Merkur Group companies. Revenues from
the sale of goods are decreased by the discounts given to holders of Merkur’s loyalty cards. In 2012, discounts granted
based on purchases with the loyalty card totalled €1,276 thousand (2011: €1,115 thousand), which accounts for 0.4% of the
total sales of goods to individuals in retail of the Merkur division in the current year. For the issued credits to the holders of
the loyalty card related to the purchases made in the last quarter of 2012 (discounts can be used by the end of April 2013),
the revenue was deferred in the amount estimated for the redeeming of credits, totalling €332 (2011: €315) thousand.
The company and the Group generate rental income by renting out own property or investment property and partly by
subletting parts of the property that are under finance or operating lease (e.g. shopping centres with accompanying bars,
restaurants and shops).
The Group is not obliged to apply segment reporting.
Additional Information on the Merkur Group’s Sales by Geographic Regions
In € thousand
Item2012
Revenue from sales in the domestic market – Slovenia
Revenue from sales in foreign markets
Merkur Group’s revenue
343,328
85,561
428,889
2011
341,843
75,353
417,196
103
FINANCIAL REPORT
6.2 Other Operating Revenue
Other Operating Revenue
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Other operating revenue
Revenue from liquidated receivables
Gains on disposal of property, plant and equipment Other operating revenue Revenue from reversal and use of long-term provisions
Gains on disposal of investment property
Gains on reversal of impairment of inventories
Revenue from sued recovered receivables
Income from government grants
6.3
7,263
1,220
484
297
2,365
24
1,372
1,399
101
6,061
3,712
761
548
941
-
-
-
99
10,682
2,625
605
511
2,819
24
2,192
1,794
113
6,425
3,604
863
878
972
108
Costs by Nature
Costs by Nature
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Costs by nature
Cost of material
- electricity cost
- fuel cost
- other cost of material
Cost of services
- transportation costs
- rent
- investment and maintenance costs
- cost of advertising, promotion and participation at fairs
- banking and insurance costs
- costs of utility services
- cost of other services
Labour cost
- salaries
- pension and other insurance costs
- commuting and meal allowance
- other labour cost
Amortization and depreciation
- depreciation of property, plant and equipment
- amortization of intangible assets
Long-term provisions
Other operating expenses
104
69,239
75,487
115,978
126,979
4,269
4,365
6,987
6,946
2,141 2,2313,6473,771
1,5411,4812,0331,910
587 6531,3081,265
21,907
22,860
39,360
42,405
3,8653,6595,2554,874
6,253 6,95712,86514,620
2,2282,3783,2534,411
2,4532,4595,6206,199
1,916 1,838 3,7263,542
9271,0201,7221,915
4,264 4,549 6,9186,842
33,937
37,857
52,237
57,662
23,054 24,90136,66639,959
4,108 4,7156,7467,669
4,061 4,515 5,7146,301
2,713 3,726 3,1113,734
6,952
8,207
13,602
15,925
6,609 7,787 12,76614,949
343 421836976
0
-
15
71
2,175
2,197
3,776
3,971
6.4 Other Operating Expenses
Other Operating Expenses
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Other operating expenses
Impairments and write-offs of receivables due from customers
Write-offs of inventories to the realizable value
Expenses from revaluation of property
Other operating expenses Write-offs and losses on disposal of property, plant and equipment
Write-offs and losses on disposal of investment property
6.5
2,556
2,030
7
66
219
32
203
2,369
1,758
415
3
111
82
-
8,241
1,969
191
2,969
2,568
340
203
11,306
9,347
351
620
413
575
-
Net Financial Income and Expenses
Financial Income
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Financial income
1,736
31,695
8,793
30,917
Interest income
1,199
3,134
1,221
1,954
Dividend income
9
2,450
9
2,450
Foreign exchange gains
73
94
383
536
Gains on disposal of financial assets 5
7,303
5
7,303
Other financial income, of which:
451
18,665
7,174
18,674
- recovered interest receivable
77
48
113
71
- reversal of impairment of debt
47
18,502
2,130
18,502
- other financial income
327 115
4,931 101
Financial Expenses
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Financial expenses
Impairment of loans given
Interest expenses
Impairment of available-for-sale financial assets
Impairment and write-off of interest receivables
Foreign exchange losses
Losses on disposal of financial assets Impairment of investments in subsidiaries
Financial expenses from finance lease guarantees
Other financial expenses
48,542
11
8,129
356
59
58
4,968
33,565
1,000
396
43,441
-
7,532
10,233
155
95
-
19,211
-
6,216
25,147
11
14,601
356
120
1,502
4,968
3,033
-
555
36,119
14,104
10,908
156
1,496
9,454
105
FINANCIAL REPORT
6.6 Other Income
Other Income
In € thousand
Merkur, d. d. Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Other income
- other income
- reversal of provision
7,055 4,484
2,571
51,724
51,724
-
7,055 4,484
2,571
72,236
72,236
-
Other income refers to the write-off of liabilities under the compulsory settlement in 2011 – details are provided under Item
5.14 “Borrowings”.
Income from the reversal of provision refer to the reduced value of collateral – details are provided under Item 5.17 “Provisions”.
6.7 Other Expenses
Other Expenses
In € thousand
Merkur, d. d.
Merkur, d. d.
Merkur Group
Merkur Group
Item
31 Dec 2012
31 Dec 2011
31 Dec 2012
31 Dec 2011
Other expenses – formed provision 1,704 -
6,146
289
Other expenses refer to the expenses for the formation of provisions related to the tax inspection, a part of which was
reclassified in liabilities after the receipt of the tax inspection decision (long-term and short-term in accordance with the
maturity of instalments under the compulsory settlement). Details about the tax inspection are provided under Item 6.10 “Income Tax”.
6.8
Financial Instruments and Risk Management
In relation to exposure to business risks, Merkur, d. d., and the Merkur Group reflect the current situation in world markets.
The unsuccessful management buyout and the economic crisis have had the most significant negative impact on the
operations in the past years, and the most negative consequence was losing the trust of our partners – especially the
banks and suppliers – liabilities towards whom had increased to the extent that we were unable to repay them fully
within the originally agreed upon deadlines. By carrying out the compulsory settlement, which was confirmed in 2011, the
predictability of the interest rate risk (due to the signed loan rescheduling) and filling of the liquidity gap have changed
significantly. Regardless of this, financial risks remain a category that must be constantly monitored, and measures for
managing the risks and limiting exposure must be regularly implemented.
Merkur, d. d., and the Merkur Group estimate financial risks by the following groups:
• Credit risks include the risk that 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 the risk of changes in the market prices of securities,
• Insolvency risk is the risk of the short-term and long-term inability to settle liabilities in time.
The financial risks and activities for minimizing the exposure to risks are monitored weekly at the Management Board
sessions.
106
Capital Adequacy
In 2011, a compulsory settlement was confirmed in the controlling company Merkur, d. d. and another one in the subsidiary
Mersteel, d. o. o. Indirectly, this affected the equity through the conversion of capital and cancellation of debt – details are
provided in the note about the progress of the compulsory settlement in Item 8.2 “Progress of Compulsory Settlements in
Merkur, d. d., and Mersteel, d. o. o.”
As at 31 December 2012, both Merkur, d. d., as well as the Merkur Group were facing a negative equity and surplus of shortterm liabilities over short-term assets. On 31 December 2012, the negative equity of Merkur, d. d. was €39,391 thousand and
the surplus of short-term liabilities over short-term assets totalled €86,729 thousand, whereas the Merkur Group had €31,154
thousand of negative equity and €110,263 thousand of surplus of short-term liabilities over short-term assets.
In December 2012, the General Meeting of Shareholders confirmed the capital increase for the controlling company
Merkur, d. d., in the form of an increase in share capital, the cancellation of debt and the conversion of debt into capital
in the amount of €63,379 thousand. The details are provided in Item 9 “Business Events After the Balance Sheet Date”. The
Management Board believes this will ensure enough equity both to the controlling company Merkur, d. d., as well as the
Merkur Group for future operations.
Credit Risk
Credit risk related to the risk that counterparties will be unable to meet their obligations, is recorded as operating loss or
financing loss.
The company/Group has adopted a policy of active credit risk management, which comprises securing receivables, regular
monitoring of outstanding receivables, limiting exposure to individual customers through a cap system, offering incentives
for advanced payment, charging penalty interest for late payments, and a policy of collecting receivables.
Because of the increased volatility of the global market, the company 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 who were granted loans are also
subject to credit risk monitoring. If there is risk of default, we make allowances for doubtful debts in accordance with the
adopted accounting policy.
By insuring receivables with an insurance company, a major part of the credit risk was transferred to the insurance company,
which has improved the awareness of the importance of credit risk management and also updated the main measures for
efficiently managing the credit risk, which are:
• Any future receivables must be already insured upon concluding the contract, and the credit rating of new and existing customers is evaluated by the credit rating office; acquiring collateral, which may 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 the 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 the estimated turnover (depending on the credit rating and acquired collateral),
• A procedure for collecting receivables (including through the court) from customers is in place.
The primary credit rating is static and performed at least once a year based on the financial statements, or more frequently,
depending on the partner’s size and activity. In addition, depending on the partner’s importance, the Group/company
also uses independent risk assessments and recommendations on the cap amount by an external, independent provider.
Secondary ranking is performed based on the information about the current financial soundness, and is updated daily
based on blocked bank accounts and the current balance between receivables and the approved cap.
Credit risk from sale is partially transferred to the insurance company with which the receivables due from customers were
insured. The cap on the coverage amount is set with previously agreed upon criteria based on which receivables from
the majority of partners are insured automatically, while if the criteria are only partly fulfilled or the caps are higher, the
insurance policy is concluded after additional communication with the insurance company. If the criteria are not met, the
exposure to risk is not insured. Automatic caps are examined at least once a year, while blocked bank accounts and the age
of the receivables are checked daily. Sales to a customer is stopped when one of the following criteria is met: exceeded the
cap, receivables overdue for over 30 days, customer’s blocked bank account, or any other external information indicating
107
FINANCIAL REPORT
the debtor’s major financial problems. Exceptions are only possible if approved by the Management Board or are in line
with financial and commercial authorizations.
The effects of insuring receivables are already evident, especially in a greater dispersion of the receivables portfolio, faster
and more efficient collection, and as a result lower the allowances for disputable receivables. Since the introduction of the
security of receivables, the percentage of overdue receivables compared to the total receivables decreased from 32% to
28%, whereas the allowances of overdue receivables to unrelated companies in terms of ownership decreased by 90%. In
2012, the controlling company Merkur, d. d., recorded 40 loss events in the total amount of 6‰ of the sales to companies.
In the majority of cases, receivables of Slovenian companies are secured.
Market Risk
The company/Group is exposed to the following market risks:
• currency risk,
• interest rate risk, and
• risk of changes in the values of securities.
The definitions used by the company/Group are:
• currency risk is a risk that the economic benefits of the Group may decrease as a result of changes in foreign currency exchange rates,
• the interest rate risk is a risk that the value of the financial instrument might fluctuate due to changes in market interest rates, and
• the risk of changes in the values of securities is the risk of changes of fair value.
Market risk management is aimed at managing and controlling exposure to market risks within reasonable limits while at
the same time optimizing profit.
In the past years, the Group has used derivative financial instruments for interest rate hedging, however, these instruments
expired when compulsory settlement was initiated in Merkur, d. d. according to the contractual provisions.
Interest Rate Risk
The company/Group is exposed to interest rate risk, because it borrows assets at fixed and variable interest rates. A quarter
of the company’s loans and a half of the Group’s loans are indexed with the EURIBOR variable interest rate.
Before the compulsory settlement, we managed risks caused by the extreme volatility of the interest rates by adjusting the
asset related interest rates to the interests from liabilities, and with derivative financial instruments.
These instruments expired as the compulsory settlement was initiated.
After the compulsory settlement was confirmed, a rescheduling was signed for all the loans that were subject to compulsory
settlement, based on which the interest was charged at a fixed rate, which is currently below the market interest rate.
The company is now exposed to interest rate risk only in relation to newly raised borrowings and leases, while the Group is
exposed to it in 45% share of its debt exposure.
Currency Risk
The Group operates mainly in the domestic currency, therefore the Management Board assesses the currency risk exposure
as constant and low.
Considering the size of the transactions, and the translation exposure of foreign subsidies, the Group has defined two key
currency pairs in relation to currency risk: EUR/HRK and EUR/RSD.
In all markets, we try to curb currency risk by integrating the exchange rate into the difference in price with natural hedging,
i.e. balancing sales and procurement in the same currency, by synchronizing outflows and inflows as well as possible, and
by taking out loans in the local currency. The way the subsidiaries in Croatia and Serbia have been operating so far (the
difference in price, the share of local procurement, the offer of loans in the local currency) does not enable sufficient control
of currency risk exposure.
108
Risk of Changes in the Market Prices of Securities
The exposure of Merkur, d. d., and the Merkur Group to this risk is the highest in relation to fair values of shares of Gorenjska
banka, d. d., Sava, d. d., and Perutnina Ptuj, d. d.
Insolvency Risk
The insolvency risk is a risk that the company/Group may have difficulties in obtaining sufficient funds to settle its financial
obligations. The responsibility for managing the insolvency risk lies with the Management Board.
Hedging against insolvency risk is performed through an active policy of liquidity management. The aim is to balance the
cash inflows and outflows. The policy comprises:
• a system of caps determining the lowest amount of cash and highly liquid assets that must be available to the company at all times,
• centralized monitoring, and the timely management and planning of cash transactions to provide liquidity and solvency,
• dispersed external financial sources,
• dispersed maturity dates for liabilities,
• credit risk management policy (especially by introducing the insurance of receivables) ensuring the
planned settlement of receivables,
• the option of activating short-term financial investments and inflows from end-consumers, which allow easier management and control of liquidity.
Due to the harsher liquidity situation, the following decisions have been taken:
• 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.
The confirmation of compulsory settlement in Merkur, d. d., and Mersteel, d. o. o., in 2011, and the cancellation and
conversion of the debt into capital, which was confirmed in December 2012, were necessary, however, not a sufficient
condition for lowering the insolvency risk. Only strict insolvency risk management will revive the operations and relieve the
solvency crunch.
With the purpose of ensuring short-term and long-term solvency in accordance with the Financial Restructuring Plan, the
companies also continue implementing measures in other areas that affect the management of insolvency risk:
• optimization of procurement – improving the procurement conditions in the meaning of supply for deferred payment,
• cost cutting in all areas,
• overhaul of credit risk management – decreasing the insecurity of collecting financial assets for settling liabilities by increasing the turnover of receivables.
As a result, all the measures are reflected through the working capital. Despite the extensive programme of
financial restructuring and reorganization, the company/Group managed in 2012 to cut the period for which cash is tied
up by 37 days, which presents another advantage in managing the insolvency risk in addition to the overhauled model for
the detailed monitoring of cash flow.
109
FINANCIAL REPORT
Credit Risk
The company and the Group are exposed to credit risk in relation to receivables from operations and finance lease, given
loans, and available-for-sale shares. The table below shows the company’s maximum exposure to credit risk in 2012 and
2011. Concentration is defined as exposure to the 10 largest partners and expressed in %.
The company is not exposed to any significant credit risk in relation to revenue from retail sales, since the majority of
payments are made with cash or bank cards, whereas wholesale customers are secured with the insurance company, and
the sales to subsidiaries at the level of the controlling company Merkur, d. d., is controlled through the constant monitoring
of operations of an individual company and it depends on the strategy that Merkur pursues in relevant markets.
Exposure to credit risk in relation to bank deposits and cash equivalents, which comprises deposits with an original maturity
of less than three months of concluding the agreement, is high, however, counterparties are banks operating in Slovenia,
and the Management Board assesses that these do not pose a significant credit risk.
Maximum Exposure to Credit Risk at Merkur, d. d., in 2012 and 2011
Item
Net 31 Dec 2012
Gross 31 Dec 2012
Allowances 31 Dec 2012
Available-for-sale assets
Bank deposits Loans given Receivables due from customers Receivables due from others Demand cash equivalents
55,580
2,158
36,220
36,624
4,190
2,106
Total
85,672
2,158
212,997
52,791
20,088
2,106
30,092
-
176,777
16,167
15,898
-
136,877375,811
238,934
*Concentration describes what percentage of exposure applies to top 10 customers/lessees
Maximum Exposure to Credit Risk at the Merkur Group in 2012 and 2011
Item
Net 31 Dec 2012
Gross 31 Dec 2012
Allowances 31 Dec 2012
55,580
3,818
30,531
36,656
8,947
2,995
85,672
3,818
210,248
67,399
25,195
2,995
30,092
-
179,717
30,743
16,248
-
Available-for-sale assets Bank deposits Loans given Receivables due from customers Receivables due from others Cash and cash equivalents
Total
* Concentration describes what percentage of exposure applies to top 10 customers/lessees
110
138,526395,326
256,801
In € thousand
Concentration* 31 Dec 2012
Net 31 Dec 2011
Gross 31 Dec 2011
Allowances 31 Dec 2011 Concentration* 31 Dec 2011
99%
100%
97%
57%
63%
100%
84,774
2,158
36,253
37,444
3,832
7,046
114,636
2,158
213,001
53,618
20,089
7,046
29,862
-
176,747
16,174
16,257
-
99%
100%
97%
47%
80%
93%
171,507 410,548 239,040
Concentration* 31 Dec 2012
Net 31 Dec 2011
Gross 31 Dec 2011
99%
100%
97%
12%
39%
100%
84,774
3,570
31,000
43,358
7,497
9,266
114,636
3,570
210,588
77,268
24,163
9,266
In € thousand
Allowances 31 Dec 2011 Concentration* 31 Dec 2011
29,862
-
179,589
33,910
16,666
-
99%
100%
100%
33%
81%
100%
179,465 439,491 260,026
The company and the Group are further exposed to credit risk in relation to issued financial guarantees which
are presented off-balance (Note 6.9 “Contingent Liabilities and Receivables”), where the maximum possible
exposure that the company and/or Group would have to pay if the guarantee was called, is also presented.
Secured Credit Risk
As at 31 December 2012, the company had €14,796 thousand of secured receivables due from customers,
whereas the Group had €20,988 thousand (insured with the insurance company, mortgages or the possibility
of immediate offset). Notes on the received collateral for loans given are provided under Items 5.7 “Long-Term
Loans Given” and 5.9 “Short-Term Loans Given”.
Receivables Due from Customers
Based on historical data on non-payments and disputed receivables, allowances are made as follows:
• for the 25 largest customers individually,
• for all other regular receivables overdue above 180 days: 100%, and
• 100% for disputable receivables regardless of the maturity; if a receivable is secured or there are realistic grounds for its payment, the allowance may be proportionately decreased.
111
FINANCIAL REPORT
Maturity of Due from Customers of Merkur, d. d., and the Merkur Group in 2012 and 2011
Merkur, d. d.
Gross value
Impairment
Gross value
Impairment
Item
31 Dec 2012
31 Dec 2012
31 Dec 2011
31 Dec 2011
Not past due
14,651
Overdue 0–30 days
4,470
Overdue 31–180 days
8,459
Overdue 181–365 days
6,293
More than one year overdue18,919
Total
-
-
-
288
15,879
22,773
4,783
7,865
625
17,572
-
-
1,382
196
14,596
52,79116,16753,61816,174
Maturity of Receivables Due From Others of Merkur, d. d., and the Merkur Group in 2012 and 2011
Merkur, d. d.
Gross value
Impairment
Gross value
Impairment
Item
31 Dec 2012
31 Dec 2012
31 Dec 2011
31 Dec 2011
Not past due
4,167
Overdue 0–30 days
257
Overdue 31–180 days
103
Overdue 181–365 days
143
More than one year overdue15,418
Total
-
234
103
143
15,418
3,618
500
34
832
15,104
-
286
34
832
15,104
20,088 15,89820,089 16,257
Classification of Customers to Risk Grades According to the Chances of Their Insolvency
Merkur, d. d.
Share of receivables
Share of partners
Share of receivables
Share of partners
Classification grade
31 Dec 2012
31 Dec 2012
31 Dec 2011
31 Dec 2011
Above-average risk
Average risk
Below-average risk Total
49%
42%
9%
45%
19%
36%
34%
44%
22%
45%
20%
35%
100%100%100% 100%
The classification into grades is based on the credit rating of an individual customer.
Changes in Allowances of Trade Receivables Due from Customers of Merkur, d. d., and
the Merkur Group in 2012 and 2011
In € thousand
Merkur, d. d.
Merkur Group
Item
2012201120122011
Balance at 1 January
Write-off Impairments
- impairment of trade receivables
- impairment of interest receivables
Reversal of impairment
- reversal of impairment of trade receivables
- reversal of impairment of interest receivables Reclassified between assets
Transfers of allowances between assets
Foreign exchange differences
Balance at 31 December
112
32,364
-976
2,089
2,030
59
-1,297
-1,220
-77
-191
-
-
31,988
36,255
-2,043 1,912 1,757
155
-3,760
-3,712
-48
-
-
-
32,364 50,576
-1,658
2,087
1,969
120
-2,738
-2,625
-113
-968
-297
-89
46,914
53,889
-7,480
9,503
9,347
156
-3,676
-3,604
-71
-1,601
-60
50,576
In € thousand
Merkur Group
Gross value
Impairment
Gross value
Impairment
31 Dec 2012
31 Dec 2012
31 Dec 2011
31 Dec 2011
24,449
6,899
4,245
740
31,066
67,399
-
-
35
528
30,180
32,148
5,070
4,861
673
34,517
30,743
77,268
48
1,411
684
31,767
33,910
In € thousand
Merkur Group
Gross value
Impairment
Gross value
Impairment
31 Dec 2012
31 Dec 2012
31 Dec 2011
31 Dec 2011
7,544
369
380
358
16,544
25,195
-
234
103
159
15,752
6,507
627
151
978
15,900
16,248
24,163
286
34
832
15,514
16,666
Merkur Group
Share of receivables
Share of partners
Share of receivables
Share of partners
31 Dec 2012
31 Dec 2012
31 Dec 2011
31 Dec 2011
62%
23%
15%
100%
52%
20%
28%
53%
24%
23%
100%
51%
19%
30%
100%
100%
Changes in Allowances of Loans Given of Merkur, d. d., and the Merkur Group in
2012 and 2011
In € thousand
Merkur, d. d.
Merkur Group
Item
2012201120122011
Balance at 1 January
Write-off Impairments Reversal of impairment Transfers of allowance between assets Balance at 31 December
176,747
-12
11
-161
191
196,915
-1,667
-
-18,502
-
179,589
-179
11
-
297
199,622
-1,532
-18,502
-
176,777
176,747
179,717
179,589
113
FINANCIAL REPORT
Liquidity Risk
The following section provides the contractually agreed due dates of financial 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, d. d., in 2012
Item
Carrying amount
Contractual cash flows Non-derivative financial assets
Long-term financial investments 57,737
57,854
Loans given
36,220
36,284
Receivables due from customers
36,624
36,624
Receivables due from others
4,190
4,190
Cash and cash equivalents
2,106
2,106
Total non-derivative financial assets
136,877
137,059
Non-derivative financial liabilities
Secured borrowings -322,201
-388,459
Finance lease liabilities -53,390
-61,299
Trade liabilities towards suppliers -67,640
-67,640
Liabilities towards others -14,112
-14,112
Total non-derivative financial liabilities
-457,344
-531,510
Net balance at 31 December 2012
-320,466
-394,451
Stipulated Due Dates of Non-Derivative Financial Assets and Liabilities of Merkur Group in 2012
Item
Carrying amount
Contractual cash flows Non-derivative financial assets
Financial investments, deposits and collaterals
59,399
59,517
Loans given
30,531
30,595
Receivables due from customers
36,656
36,656
Receivables due from others
8,947
8,946
Cash and cash equivalents
2,995
2,995
Total non-derivative financial assets
138,527
138,709
Non-derivative financial liabilities
Secured loans -294,851
-367,639
Other loans
-104,380
-106,491
Finance lease liabilities
-138,595
-172,541
Trade liabilities
-104,408
-104,408
Liabilities towards others -19,252
-19,175
114
Total non-derivative financial liabilities -661,487
-770,254
Net balance at 31 December 2012
-522,960
-631,545
In € thousand
1–2 years
2–5 years
More than 5 years
55,599
19
53
35,650
86
148
36,624
-
-
4,190
-
-
2,106
-
-
2,184
287
-
-
-
113
-
2,470
113
-77,195
-10,530
-18,925
-100,642
-1,954
-1,954
-18,100
-23,530
-34,526
-9,428
-10,151
-13,536
-8,408
-5,704
-
-
-181,167
-15,761
-
6 months or less
134,169
6–12 months
105
201
-122,083
-27,616
-47,175
-137,708
-196,928
12,086
-27,510
-46,974
-135,237
-196,815
In € thousand
6 months or less
1–2 years
2–5 years
More than 5 years
55,599
426
53
29,707
305
179
36,656
-
-
8,917
29
-
2,995
-
-
2,184
290
-
-
-
1,255
113
-
2,474
1,367
-20,521
-10,400
-22,856
-120,374
-73,835
-6,365
-10,013
-16,100
-4,394
-4,387
-22,901
-37,911
-65,931
-10,833
-11,772
-15,872
-13,148
-6,027
-
-
-193,489
-178
-102,947
-
133,875
6–12 months
761
232
-177,829
-38,012
-67,541
-190,257
-296,615
-43,954
-37,251
-67,310
-187,783
-295,247
The table for the company/Group was prepared based on undiscounted cash flows and based on agreed maturity dates,
and it includes the contractually stipulated dates on which the liabilities should be settled/assets may be liquidated.
The split of long and short maturity for borrowings is made based on the agreed cash flows, due to which it is not consistent
with the split of maturities for borrowings presented in the statement of financial position (also referred to as the balance
sheet).
The Management believes that the remaining liquidity gap will be covered with the effect of longer due dates, which
will be achieved in negotiations with suppliers, with the sale of property and other assets that are unnecessary in terms
of business operations according to the Financial Restructuring Plan, and with the effects delivered by negotiations with
financial institutions.
115
FINANCIAL REPORT
Stipulated Due Dates of Non-Derivative Financial Assets and Liabilities of Merkur, d. d., in 2011
Item
Carrying amount
Contractual cash flows Non-derivative financial assets
Long-term financial investments 86,932
87,190
Loans given
36,253
36,472
Receivables due from customers
37,444
37,444
Receivables due from others
3,832
3,832
Cash and cash equivalents
8,110
8,110
Total non-derivative financial assets
172,571
173,048
Non-derivative financial liabilities
Secured borrowings
-355,298
-440,599
Finance lease liabilities -55,656
-68,701
Trade liabilities towards suppliers -55,758
-55,758
Liabilities towards others -15,356
-15,356
Total non-derivative financial liabilities -482,068
-580,415
Net balance at 31 December 2011
-309,496
-407,367
Stipulated Due Dates of Non-Derivative Financial Assets and Liabilities of the Merkur Group in 2011
Item
Carrying amount
Contractual cash flows Non-derivative financial assets
Financial investments, deposits and guarantees
88,344
88,603
Loans given
31,000
31,085
Receivables due from customers
43,358
43,357
Receivables due from others
7,497
7,497
Cash and cash equivalents
12,288
12,288
Total non-derivative financial assets
182,486
182,831
Non-derivative financial liabilities
Secured borrowings -387,515
-473,252
Other borrowings
-45,364
-49,146
Finance lease liabilities 142,427
-155,481
Trade liabilities -97,052
-96,083
Liabilities towards others -22,799
-22,799
Total non-derivative financial liabilities -695,156
-796,762
Net balance at 31 December 2011
-512,670
-613,931
Currency Risk
Currency Risk Exposure of Merkur, d. d., and the Merkur Group in Nominal Values in 2012
Merkur, d. d.
Item
EUR HRK USD RUB
Receivables and liabilities at 31 Dec 2012
Receivables due from customers
36,214
-7
417
-
Borrowings
-322,201---
Finance lease liabilities
-53,390 - - -
Liabilities towards suppliers
-67,542
-5
-12
-80
Balance sheet exposure to currency risk
-406,920
-12
405
-80 116
In € thousand
6 months or less
1–2 years
2–5 years
More than 5 years
84,806
32
64
35,675
96
168
37,444
-
-
3,832
-
-
8,110
-
-
2,287
356
-
-
-
177
-
2,643
177
-28,147
-15,723
-22,607
-107,964
-2,360
-2,237
-4,465
-41,794
-14,653
-9,100
-10,668
-21,337
-11,753
-3,603
-
-
-266,157
-17,846
-
169,867
6–12 months
128
232
-56,913
-30,662
-37,741
-171,095
-284,003
112,954
-30,534
-37,509
-168,452
-283,826
In € thousand
6 months or less
1–2 years
2–5 years
More than 5 years
84,806
192
64
29,566
765
177
41,964
2,526
-144
7,251
101
131
12,288
-
-
2,288
377
-988
14
-
1,252
200
-
1,690
1,453
-48,301
-10,859
-24,000
-117,563
-1,100
-7,414
-9,889
-27,144
-3,358
-3,226
-6,489
-48,028
-50,227
-9,027
-11,224
-23,771
-18,773
-3,991
-25
-10
-272,529
-3,600
-94,380
-1,834
0
175,875
6–12 months
3,584
229
-121,759
-34,517
-51,627
-216,516
-372,343
54,116
-30,933
-51,398
-214,826
-370,890
In thousand
Merkur
Group
EUR HRKBAM RSDMKDUSDRUB
31,166
993
2,191
1,232
589
485
-394,152
-869
-1,618
-483
-759-
-138,595--- ---89,006
-6,328
-1,582
-7,064
-150
-197
-80
-590,588
-6,205
-1,009
-6,315
-320
287
-80
117
FINANCIAL REPORT
Currency Risk Exposure of Merkur, d. d., and the Merkur Group in Nominal Values in 2011
Merkur, d. d.
Item
EUR
HRK
USD
RUB Receivables and liabilities at 31 Dec 2011
Receivables due from customers
37,452
-9
-
-
Borrowings
-355,298---
Finance lease liabilities
-55,656
-
-
-
Liabilities towards suppliers
-55,694
-5
-8
-52
Balance sheet exposure to currency risks
-429,195
-13
-8
-52 Sensitivity Analysis
The controlling company Merkur, d. d., is not significantly exposed to currency risk, which it assesses as insignificant and
thus does not disclose the sensitivity analysis.
A 10% strengthening of foreign currencies compared to the local currencies of the Merkur Group companies as at 31
December 2012 would have decreased the Group’s profit or loss by the amount presented below. This analysis assumes
that all other variables, especially interest rates, remain unchanged. The 2011 analysis was made on the same basis.
Item
31 Dec 2012
HRK
-1,650
BAM-551
RSD
-2,572
MKD-322
USD
38
RUB
-9
Total effect on profit or loss
-5,067
In € thousand
31 Dec 2011
-1,979
-422
-2,781
-313
-5
-6
-5,506
Interest Rate Risk
Characteristics of Interest Rates Applied to Financial Instruments of Merkur, d. d., and the Merkur
Group
In € thousand
Merkur, d. d.
Merkur Group
Carrying amount
Carrying amount
Item
2012201120122011
Instruments with fixed interest rate
Financial assets
Financial liabilities
Instruments with variable interest rate
Financial assets
Financial liabilities 118
-239,694
35,568
-275,262
-241,700
35,454
-277,155
-265,230
29,979
-295,209
-267,186
30,200
-197,386
-99,678
652
-100,330
-133,000
799
-133,799
-242,066
552
-242,618
-190,511
799
-191,310
In thousand
EUR
Merkur Group
HRK
BAM
RSD
MKD
USD
RUB
36,972
2,304
1,870
1,595
587
30
-434,843
5,538
-2,182
-425
-967--142,427
-
-
-
-
-
-82,596
-7,445
-1,496
-5,024
-351
-88
-52
-622,894
396
-1,807
-3,853
-731
-58
-52
Fair Value Sensitivity Analysis for the Financial Instruments of Merkur, d. d., and the Merkur Group:
•
•
The company/Group does not account for financial assets with a fixed interest rate at the fair value through profit or loss, thus a change in interest rates at the reporting date would not affect the profit or loss.
In terms of financial instruments with a variable interest rate, a change in interest rates by 100 basal points at the reporting date would increase or decrease the equity and profit or loss by the amounts presented below. The 2011 analysis was performed on the same basis.
Calculations on the effect of changed variable interest rates have been prepared based on the actual data as at 31 December
2012, and they do not include data from the Financial Restructuring Plan.
In € thousand
Merkur, d. d.
Effect on profit or loss
+100 bps
-100 bps
Instruments with variable interest rate at 31 December 2012
Cash flow sensitivity (net)
Instruments with variable interest rate at 31 December 2011
Cash flow sensitivity (net)
-1,018
-1,018
-1,336
-1,336
1,018
1,018
1,336
1,336
Merkur Group
+100 bps
-100 bps
-1,578
-1,578
-1,909
-1,909
1,578
1,578
1,909
1,909
Hierarchy for Determining Fair Value in the Balance Sheet
The company and the Group use the stock market prices as a basis for the fair value of the financial assets. If a financial
instrument is not listed on the Stock Exchange or a market is deemed inactive, the company uses a model for assessing the
fair value of the financial asset. The item “available-for-sale shares and stakes” includes the shares of Perutnina Ptuj, valued at
the cost model (the reason for such valuation is explained under Item 5.6 “Long-Term Financial Investments”). The cost model
was also used for the valuation of a small number of interests with a value insignificant for a fair presentation of the financial
statements, because the cost of the valuation of such interests would not be economically justifiable.
The table below presents the analysis of the financial assets measured at fair value after initial recognition and grouped
together into levels 1, 2 and 3 based on the fair value determination method according to the following criteria:
• level 1 fair values are those investments whose value is based on the quoted market prices in an active market for assets and liabilities of the same class,
• level 2 fair values are those investments whose inputs in the model are based on comparable stock market inputs for similar financial assets/liability, and
• level 3 fair values are those investments that are accounted for at fair value based on the valuation models whose inputs are not based on the observable market data.
119
FINANCIAL REPORT
Hierarchy of Determining the Fair Value of Financial Assets on 31 December 2012
Item
Available-for-sale shares and stakes In € thousand
Level 1
Level 2
Level 3
Total
-
-
55,580
55,580
In € thousand
Hierarchy of Determining the Fair Value of Financial Assets on 31 December 2011
Item
Available-for-sale shares and stakes Level 1
Level 2
Level 3
Total
666
-
84,108
84,774
6.9 Contingent Liabilities and Receivables
Contingent liabilities of Merkur, d. d., relate to the guarantees provided to third parties for the liabilities of subsidiaries
and the liabilities of Merfin, d. o. o. The contingent liabilities are recognized as an off-balance item for all companies that
settle their liabilities as they become due (this includes contingent liabilities from issued guarantees and finance lease
obligations where Merkur, d. d., acts as a joint guarantor in case subsidiaries fail to pay). Provisions for guarantees issued were
accounted based on the assumption of the most probable amount that would be paid by Merkur, while the difference to
the theoretically highest possible amount is presented as an off-balance contingent liability.
The increase in contingent liabilities as at 31 December 2012 related to the financial guarantees issued to subsidiaries,
except for lease, is a result of the change in the assumption of evaluating contingent liabilities for the subsidiary Mersteel
– the contingent liability is stated in the maximum possible amount that should be paid by Merkur, d. d., in the case of the
bankruptcy of Mersteel, d. o. o., whereby all collateral is excluded.
Liabilities to the main creditors for the financial guarantee issued to Merfin, d. o. o., are presented as an off-balance item,
because lawsuits to annul the main transaction (and as the result the liability) are underway. These contingent liabilities
amount to €6,072 thousand. This is also the only contingent liability on the Merkur Group level.
In € thousand
Cumulative overview
Guarantees to subsidiaries, except for finance lease
Guarantees to subsidiaries for lease
Guarantees to others
Total
Merkur, d. d.
31 Dec 2012
Merkur, d. d.
31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
51,115
27,198
-
84,337
93,554
-
6,072
6,072
6,072
6,072
141,524126,823 6,072 6,072
In € thousand
Overview by recipients Mersteel, d. o. o., Naklo
Intermerkur – Nova, d. o. o., Sarajevo
Merkur International, d. o. o., Beograd
Merkur Hrvatska, d. o. o., Zagreb
Mersteel Profil doo, Beograd
Mersteel, d. o. o., Sarajevo
Merfin, d. o. o., Ljubljana
Merkur – MI Handels, GmbH, Haar
Total
120
Merkur, d. d. 31 Dec 2012
Merkur, d. d.
31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
30,011
4,814
-
1,181
973
-
40,109
41,866
-
40,607
47,054
-
4,167
4,167
-
19,377
21,628
-
6,072
6,072
6,072
6,072
-
250
-
141,524126,823 6,072 6,072
Merkur, d. d., has a contingent receivable due from Merfin, d. o. o., arising from the claim for returning the difference
between the acquisition and the disposable value of assets that Merfin realized as profit from sales in 2008 and 2009 when
it was still the controlling company, namely:
• based on the agreement according to which Merfin is obliged to return the difference between the acquisition and the disposable value of the property shopping centre Primskovo in the amount of €9,271 thousand with interest from the date of sale on 24 December 2008 to 31 October 2010 in the amount of €781 thousand, and
• based on the agreement according to which Merfin is obliged to return the difference between the acquisition and disposable value of the business share in the company HTC Dva in the amount of €8,500 thousand with interest from 23 December 2009 to 31 October 2010 in the amount of €107 thousand.
The total receivables due from Merfin are €18,659 thousand, but the conditions for recognizing the income according to IAS
18 have not yet been met since it is not likely that the economic benefits related to the transaction will be realized, therefore
the receivables are recognized only off-balance. Nonetheless, the receivables have been lodged in the bankruptcy estate
of Merfin.
6.10 Income Tax
Income Tax
In € thousand
Item Current tax expense – tax liability
Deferred tax expense – deferred tax liability
Eliminated deferred tax assets and liabilities
Total tax expense in the statement of comprehensive income
Merkur, d. d. 31 Dec 2012
Merkur, d. d.
31 Dec 2011
Merkur Group
31 Dec 2012
Merkur Group
31 Dec 2011
-
-
-
0
-
-
-
0
17
-
-
17
319
-300
19
Effective Income Tax Rate – Merkur, d. d.
In € thousand
Item20122011
Profit before taxes
Expenses not deductible for tax purposes
Untaxed income
Other tax base adjustments
Tax loss
Tax base
Decrease of the tax base and tax reliefs
Income tax
-40,171
40,288
-3,233
-1,553
-4,669
-
-
0
31,963
31,806
-24,619
4,623
0
43,773
-43,773
0
In 2010, a tax inspection was carried out at the controlling company Merkur, d. d., regarding income tax for the years 2008
and 2009. Upon completing the tax review on 16 March 2011, the Tax Authority issued a decision, in which it charged an
additional tax liability from corporate income tax for the period from 1 January 2009 to 31 December 2009 in the amount
of €4,277 thousand, and VAT for June 2009 in the amount of €1,805 thousand. The company already commented on the
Tax Authority’s minutes, and on 16 April 2011 it filed a complaint regarding the decision at the Special Tax Office, and on
26 April 2011 it filed a complaint at the Ministry of Finance due to a violation of the procedure regulations, incorrectly and
incompletely determined actual state and due to the incorrect application of the substantive law. The tax inspection also
looked into the transactions related to the purchase and sale of the ownership stake in the company HTC Dva, d. o. o., and
the purchase of the shopping centre Primskovo shopping centre. In these disputable transactions, the company suffered
an outflow of assets and the Tax Authority increased the company’s tax base for income tax based on these transaction
and did not recognize the deduction of input VAT. The Management Board filed a complaint against the Tax Administration
121
FINANCIAL REPORT
on account of the incorrectly and incompletely established actual state, the incorrect application of the substantive law
and due to material violations of the administrative procedure rules. In 2012, the issue has not yet been concluded.
The complaint lodged against the minutes on the tax inspection regarding the correctness of the accounting for the
corporate income tax in the period between 1 January 2007 and 31 December 2007 has also not been solved yet – this
is a matter of the inspection of taxation of the option remuneration of employees in 2003 and 2004. The tax inspection
imposed an additional payment of tax in the amount of €1,704 thousand – the main liability is the regime of the compulsory
settlement of Merkur, d. d.; two instalments were overdue and have been settled, whereas the remaining three will fall due
at the end of 2015.
At the Merkur Group level, the most significant unfinished tax disputes include the tax inspection in the company Mersteel,
d. o. o. The Special Tax Office carried out a tax inspection in the company regarding the corporate income tax for the period
from 1 January 2009 and 31 December 2010. The company received the minutes on the performed inspection in April
2012, which puts forward the tax authority’s point of view:
• Impairments of investments in subsidiaries as at 1 January 2009 are unjustified: the tax administration rejected the
impairments of the investments in subsidiaries in the form of an increase in expenses in the 2009 financial statements
in the amount of €61,057 thousand as an impairment under the IAS 36. The revaluation of these companies was made
in the company Merkur before the transfer of the metallurgy plant/activity to the company Mersteel – according to the
tax administration, the revaluation of the metallurgy activity in the company Merkur prior to the transfer of the activity
was unjustified, thus the value of the division was overestimated. Consequently, the impairments of these long-term
investments were unjustified as at 1 January 2009.
• The formation of long-term provisions in the amount of €5,815 thousand not recognized in terms of tax – these are
formed long-term provisions related to the Izola’s shopping centre guarantee issued to the company HTC Dva. Details are
provided in Item 5.3 “Investment Property”. The amount not recognized in terms of tax totals 50% of the expenses applied
by Mersteel in the tax account.
A complaint was filed in July 2012, but no decision has yet been received.
7. 1
Notes to Items of the Statement of Other Comprehensive Income of the Merkur Group for 2012 and 2011
Reserves for
fair value of
Reserves for
Retained
land and
fair value of
Item Note
earnings
buildings
financial assets
2012
Net profit or loss for the period
-20,877
0
0
Disposal of property
-
-21
-
Change in fair value of property
-
863
-
Change in fair value of available-for-sale financial assets
7.1
-
-
-1,030
Disposal of available-for-sale financial assets
7.1
-
-
-2,295
Total other comprehensive income for the period
0
842
-3,325
Total comprehensive income for the period
-20,877
842
-3,325
2011
Net profit or loss for the period
41,933
0
0
Disposal of property
612
-
-
Change in fair value of property
-
-5,828
-
Change in fair value of available-for-sale financial assets
-
-
-11,998
Disposal of available-for-sale financial assets
-
-
-7,245
Foreign exchange differences from translations of foreign subsidiaries
-
-
-
Total other comprehensive income for the period
612
-5,828
-19,243
Total comprehensive income for the period
42,545
-5,828
-19,243
122
7 Notes to the Statement of Other Comprehensive Income
7.1
Notes to Items of the Statement of Other Comprehensive Income of Merkur, d. d.,
in 2012 and 2011
In € thousand
Reserves
Reserves
for fair
for fair
TOTAL OTHER
Retained
value of land
value of COMPREHENSIVE
Item
Note
earnings
and buildings
financial assets
INCOME
2012
Net profit/loss for the period
-40,171
-
-
-40,171
Disposal of property
-
-21
-
-21
Change in fair value of available-for-sale financial assets
7.1
-
-
-1,030
-1,030
Disposal of available-for-sale financial assets
7.1
-
-
-2,295
-2,295
Total other comprehensive income for the period
-
-21
-3,325
-3,345
Total comprehensive income for the period
-40,171
-21
-3,325
-43,516
2011
Net profit/loss for the period
31,963
0
0
31,963
Disposal of property
667
-
-
667
Change in fair value of property
-
-6,425
-
-6,425
Change in fair value of available-for-sale financial assets
-
-
-11,998
-11,998
Disposal of available-for-sale financial assets
-
-
-7,245
-7,245
Total other comprehensive income for the period
667
-6,425
-19,243
-25,001
Total comprehensive income for the period
32,630
-6,425
-19,243
6,962
In € thousand
TOTALTOTAL
COMPREHENSIVE COMPREHENSIVE
INCOME OF OWNERS
INCOME – NON
Translation
OF CONTROLLING
-CONTROLLING
reserve
COMPANY INTEREST
TOTAL OTHER
COMPREHENSIVE
INCOME
0
-
-
-
-
0
0
-20,877
-21
863
-1,030
-2,295
-2,483
-23,360
0
-
-
-
-
-
0
-20,877
-21
863
-1,030
-2,295
-2,483
-23,360
0
-
-
-
-
479
479
479
41,933
612
-5,828
-11,998
-7,245
479
-23,979
17,953
0
-
-
-
-
-
-
0
41,933
612
-5,828
-11,998
-7,245
479
-23,979
17,953
Notes to Items of the Statement of
Other Comprehensive Income
7.1 Change in the Fair Value of Available-forSale Financial Assets
The change in the fair value of available-forsale financial assets related to the disposal
refers to the liquidated collateral in the form
of shares of Gorenjska banka – the difference
between the carrying amount and the
liquidated amount of collateral. In respect of
this, the previously formed fair value reserve
decreased in the amount of €2,295 thousand.
On account of impairments (again primarily
referring to shares of Gorenjska banka, which
were left in the portfolio after the liquidation
of collateral), the fair value reserve decreased
by an additional €1,030 thousand.
123
FINANCIAL REPORT
8 Other Notes
8.1 Related Parties
Related parties at the Merkur, d. d., level include subsidiaries and natural persons. Related natural persons are members
of the Supervisory Board, members of the Management Board and their close family members, and companies in which
these persons hold an ownership share or a significant influence on the management of the company, and employees
under individual contracts. At the Merkur Group level, related natural persons also include members of the Managements
of subsidiaries, their close family members and companies in which these persons hold an ownership share or a significant
Transactions between Merkur, d. d., and Related Parties
Item
Sale of
goods Purchase
of goods
Performance
of services
Used services
2012
Merkur Hrvatska, d. o. o., Zagreb
7,203
60
174
7
Merkur Nekretnine, d. o. o., Zagreb
-
-
-
-
Merkur International, d. o. o., Beograd
5,052
5
142
1
Merkur Čelik, d. o. o., Beograd
-
-
-
-
Intermerkur - Nova d. o. o., Sarajevo
1,616
188
20
-
Perles Merkur Italia, s. r. l.
-
-
-
-
Mersteel, d. o. o., Naklo
814
10,611
799
322
Mersteel, d. o. o., Beograd
-
-
1
-
Mersteel, d. o. o., Zagreb
-
-
2
-
Mersteel Profil doo, Beograd
-
-
-
-
Mersteel, d. o. o., Sarajevo
-
-
2
-
Merkur International Praha, spol. S. r. o. -
-
-
-
Merkur Makedonija, doo, Skopje
575
-
2
-
Merkur - MI Handels, GmbH
-
-
-
-
Big Bang, d. o. o., Ljubljana
68
10,169
465
-
Total Merkur, d. d., to related parties
15,329
21,033
1,608
330
Item
Sale of
goods Purchase
of goods
Performance
of services
Used services
2011
Merkur Hrvatska, d. o. o., Zagreb
8,603
67
184
18
Merkur Nekretnine, d. o. o., Zagreb
-
-
-
-
Merkur International, d. o. o., Beograd
5,134
156
288
8
Merkur Čelik, d. o. o., Beograd
-
-
-
-
Intermerkur – Nova, d. o. o., Sarajevo
1,734
203
11
1
Perles Merkur Italia, s. r. l.
-
-
4
-
Merkur, d. o. o., Cetinje
-
-
-
-
Mersteel, d. o. o., Naklo
56
10,689
856
407
Mersteel, d. o. o., Beograd
-
-
-
-
Mersteel, d. o. o., Zagreb
-
-
-
-
Mersteel Profil doo, Beograd
-
-
-
-
Mersteel, d. o. o., Sarajevo
-
-
-
1
Merkur Makedonija, doo, Skopje
463
-
-
-
Merkur – MI Handels, GmbH
-
-
-
-
Big Bang, d. o. o., Ljubljana
87
7,204
161
4
Total Merkur, d. d., to related parties
124
16,077
18,319
1,504
439
Relationships with the Controlling Company
None of the owners of the controlling company Merkur, d. d., hold a controlling share.
Relationships Between the Parent Company and its Subsidiaries and Associated Companies
Business relations between the parent company and its subsidiaries and associate companies mostly comprise the purchase
and sale of goods, products, services and assets, and financial transactions related to the management of the given and
taken loans. As related parties, the companies conducted business based on concluded sales and loan agreements. In the
transactions, the companies applied the market prices of goods, products, services, and assets without exceptions. Loans
between related parties were granted under the same conditions as apply to other companies with a similar credit rating.
In € thousand
Loans given Guarantees issued
391
-
10,821
1
5,977
-
-
131
-
-
174
-
5,694
466
-
-
-
722
-
-
61
-
1,588
-
-
-
-
-
498
-
-21
6
149
2,338
7
-
-
1
-
-
-
-
2
-
-
-
-
38
-
-
-
-
6
-
-
-
-
-
-
-
2
-
127
-
-
-
-
-
347
-
-
2
51
7,435
-
40,607
40,109
1,181
30,011
4,167
19,377
-
Interest charged
606
Interest received
8
Receivables
19,330
Liabilities
11,085
5,984
135,452
In € thousand
Interest charged
Loans given Guarantees issued
890
-
8,132
18
5,977
-
-
131
-
-
42
-
4,396
615
-
-
-
722
-
-
103
-
1,462
13
-
-
-
-
498
-
4
-
-
-
-
35
10
140
1,536
-
1
1
-
-
-
5
-
-
-
-
36
-
8
-
-
874
-
1
-
-
110
-
202
-
-
-
-
-
434
-
-
197
27
4,608
-
47,053
41,866
973
4,814
4,167
21,628
250
-
2,100
Interest received
208
Receivables
15,221
Liabilities
7,722
5,977
120,751
125
FINANCIAL REPORT
Transactions with Related Parties – Members of Supervisory and Management Boards, Employees with
Individual Contracts
The Group and company entered business relationships with companies’ members of the Supervisory and Management
Boards and management workers, and employees with individual contracts in the Merkur Group’s companies.
As at 31 December 2012, none of the members of the Management Board of Merkur, d. d., their close family members,
members of the Management Boards or Directors and members of the Supervisory Boards of subsidiaries, or members of
subsidiaries’ supervisory boards owned shares of Merkur, d. d. The same applies for members of the Supervisory Board of
Merkur, d. d.
Gross Income
In € thousand
Recipient No. of members
Fixed part
of income
Other
income
Total
gross income
1
2
3
4=2+3
Blaž Pesjak (12 months)
Rok Ponikvar
(12 months)
Uroš Zajc (12 months)
Marjan Smrekar
(12 months)
Management Board of Merkur, d. d.
167
132
133
61
492
12
12
11
5
40
178
143
144
66
532
DIRECTORS OF SUBSIDIARIES
583
62
643
22
15
15
15
14
15
97
22
15
15
15
14
15
97
3,475
376
3,852
Matevž Slapničar
Antonija Pirc
Vanja Jeraj Gregor Simoniti
Ana Hochkraut
Peter Fratnik
Supervisory Board of Merkur, d. d.
Other employees with individual
contracts at the Merkur Group
(12 months)
(12 months)
(12 months)
(12 months)
(12 months)
(12 months)
104
Total 4,551575
5,124
Balance of Merkur Group’s Receivables due from Related Parties
Related parties 31 Dec 2012
Total
Receivables due from employees
In € thousand
31 Dec 2011
56
56
125
125
Receivables comprise receivables from housing loans to employees. The loans were granted at the market interest rate on
the day they were granted.
Companies have no liabilities to related natural persons.
126
8.2 Progress of Compulsory Settlements in Merkur, d. d. and Mersteel, d. o. o.
Merkur, d. d., Naklo
On 3 November 2010, the Court issued a decision on initiating compulsory settlement proceedings in Merkur, d. d. In
accordance with the approved compulsory settlement, Merkur, d. d., must repay 60% of the creditors’ claims that are the
subject of compulsory settlement within 5 years, namely:
20% by 31 December 2011,
20% by 31 December 2012,
20% by 31 December 2013,
20% by 31 December 2014, and
20% by 31 December 2015.
The company already paid the first instalment in the amount of €18,900 thousand and the second instalment in the amount of
€17,964 thousand. The table below shows long-term and current liabilities from compulsory settlement and regular (current)
operations as on 31 December 2012.
Liabilities of Merkur, d. d. from Compulsory Settlement and Regular Operations as at 31 December 2012
In € thousand
Long-term borrowings, of which:
207,745
- long-term financial liabilities from compulsory settlement
11,479
Long-term liabilities, of which:
23,699
- long-term liabilities from compulsory settlement
23,686
Short-term borrowings, of which:
114,456
- short-term borrowings from compulsory settlement
72,117
Trade payables and other liabilities, of which:
58,053
- short-term trade payables from compulsory settlement
15,132
127
FINANCIAL REPORT
Mersteel, d. o. o., Naklo
On 5 November 2010, the Court issued a decision on initiating compulsory settlement proceedings in Mersteel, d. o. o. In
accordance with the confirmed compulsory settlement, Mersteel, d. o. o., must repay 55% of creditor’s claims that are subject
of compulsory settlement within 5 years, namely:
20% by 17 June 2013,
20% by 17 June 2014,
20% by 17 June 2015,
20% by 17 June 2016, and
20% by 17 June 2017.
Each annual instalment amounts to €5,652 thousand. The table below shows long-term and current liabilities from compulsory
settlement and regular (current) operations as on 31 December 2012.
Liabilities of Mersteel, d. o. o. from Compulsory Settlement and Regular Operations as at 31
December 2012
In € thousand
Long-term borrowings, of which:
40,689
- long-term financial liabilities from compulsory settlement
14,399
Long-term liabilities, of which:
8,360
- long-term liabilities from compulsory settlement
8,360
Short-term borrowings, of which:
4,337
- short-term borrowings from compulsory settlement
3,600
Trade payables and other liabilities, of which:
4,490
- short-term trade payables from compulsory settlement
2,090
8. 3 Lawsuits Against the Merkur Group
Merkur, d. d., Naklo
Two major lawsuits have been filed against Merkur, d. d., Naklo:
• A lawsuit filed by Marta Marn in the amount of €120 thousand, with the subject of the dispute being the inadmissibility of the execution on the debtor’s property. In the said case, the Court issued a decision on 16 January 2013 that the lawsuit be rejected.
• A lawsuit filed by LTH, d. d. in bankruptcy, in the value of €396 thousand, on the challenge of legal actions in bankruptcy proceedings. The Court has not issued its decision yet.
Mersteel, d. o. o., Naklo
Mersteel is a defendant party in only one case with the claimed amount of more than €100 thousand. It is a matter of the
lawsuit filed by LTH, d. d. in bankruptcy, in the value of €170 thousand on the challenge of the legal actions of the debtor
in bankruptcy. The procedure has been concluded at the first instance and we are waiting on the verdict. The outcome
cannot be anticipated.
128
9 Events After the Balance Sheet Date
Significant events that happened after the balance sheet date are:
At the 26th general Meeting of Merkur held on 10 December 2012, the shareholders confirmed that the share capital of
the company be increased with the issue of a maximum of 1,403,375 new ordinary shares for in-kind contributions to a
maximum of €4,469,819. By the final deadline on 28 December 2012, creditors of Merkur, d. d., entered and paid 734,970
new ordinary shares in the total amount of €38,953,410, whereas an Agreement on the arrangement of mutual relationships
and the settlement of liabilities was signed on 27 December 2012 with the creditor NLB, d. d., in which the creditor will remit
Merkur’s debt in the total amount of €24,426 thousand under cumulatively determined suspensive conditions.
Since the share capital was not entered into the register of companies and the suspensive conditions of the remittance
or conversion of debt into capital were not fulfilled, the said transaction was not recorded in 2012, hence the negative
disclosed equity of Merkur, d. d., and the Merkur Group as at 31 December 2012. Were the transaction recorded in 2012, the
equity of Merkur, d. d., as at 31 December 2012 would total €23,448 thousand and of the Merkur Group €26,433 thousand.
The ownership structure after the changes in the ownership of the controlling company Merkur, d. d., as at 28 February
2013 is:
OWERSHIP STRUCTURE OF MERKUR, d. d., at 28 February 2013 in %
Other shareholders
10.28
Banka Celje, d. d.
1.74
Skupina Viator & Vektor, d. d.
2.48
Perutnina Ptuj, d. d.
1.04
Merkur International, d. o. o. Beograd
11.16
Merfin, d. o. o.
- in bankruptcy
2.58
Ananke Handels und
Beteiligungs GmbH
8.63
Salonit Anhovo, d. d.
2.95
Gorenje, d. d.
2.98
Nova kreditna banka
Maribor, d. d.
7.95
Hypo bank, d. d.
3.77
Iskratel, d. o. o.
4.10
Gorenjska banka, d. d.
7.55
Probanka, d. d.
4.12
Factor banka
4.46
Banka Koper, d. d.
4.46
Abanka Vipa, d. d.
6.95
Mersteel, trgovina
in storitve, d. o. o.
5.953
Sava, d. d.
6.62
129
FINANCIAL REPORT
Statement of Management Responsibility
We hereby recognize our responsibility for preparing and for the true and fair presentation of the financial statements
which were prepared in line with the International Financial Reporting Standards. This responsibility includes: establishing,
managing, and maintaining internal controlling related to the preparation and fair presentation of the financial statements,
which are free from material misstatements, whether due to fraud or error; selection and the application of appropriate
accounting policies and the preparation of accounting estimates that are reasonable in the circumstances.
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 annual report gives a true and fair presentation of the
financial position of Merkur, d. d., and the Merkur Group, and the results of their operations for the year ended 31 December
2012.
The Management Board is also responsible for adequate and orderly accounting, the establishment and maintenance of
internal controlling related to the preparation and fair presentation of the financial statements. To the Management Board’s
best knowledge, the financial statements are free from material misstatements, whether due to fraud or error; and the
statements and notes have been prepared in line with the valid legislation and international financial reporting standards
adopted by the EU.
The Management Board has adopted all the measures necessary for protecting its assets.
The Chairman and members of the Management Board of Merkur, d. d., are acquainted with the content of the annual
report of Merkur, d. d., and the consolidated annual report of the Merkur Group. We agree with it and confirm it with our
signatures.
The consolidated financial statements were approved on 11 February 2013.
Blaž Pesjak, Rok Ponikvar,
Uroš Zajc,
Marjan Smrekar,
Chairman of the
Management Board
Member of the
Management Board
Director of Marketing,
Purchasing, Product
Portfolio and
Development
Member of the
Management Board
Workers’ Director
Naklo, 21 March 2013
130
Member of the
Management Board
Director of Sales and
Logistics
Auditor's Report for the company Merkur, d. d.
131
FINANCIAL REPORT
132
133
FINANCIAL REPORT
Auditor’s Report for the group Merkur Group
134
135
FINANCIAL REPORT
136
137
COMPANIES
Companies in the
Merkur Group
138
COMPANIES IN THE MERKUR GROUP
Parent company:
MERKUR - trgovina in storitve, d. d.
Cesta na Okroglo 7, 4202 Naklo
Registered at: District Court in Kranj – file no. 10001500
Share capital: €3,801,414 EUR (€3,066,444 by 15 February 2013)
Registration no.: 5003563000
Telephone no.:+386 (0)4 258 80 00
Website: www.merkur.si
Identification no.: SI98492462
Activity code: G/46.740
Fax:+386 (0)4 258 88 05E-mail: info@merkur.si
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
Management Board of Merkur, d. d., until 1 July 2015:
Blaž Pesjak, Chairman of the Management Board
Rok Ponikvar, Member of the Management Board, Director of Sales and Logistics
Uroš Zajc, Member of the Management Board, Director of Marketing, Purchasing, Product Portfolio and Development
Marjan Smrekar, Member of the Management Board – Workers’ Director (until 31 August 2013)
Supervisory Board of Merkur, d. d., until 23 June 2014:
Representatives of shareholders:
Matevž Slapničar, MSc, Chairman of the Supervisory Board
Antonija Pirc, MSc, Deputy Chairman
Vanja Jeraj, Member (from 25 February 2011 to 24 February 2015)
Gregor Simoniti, Member (from 5 December 2011 to 24 February 2015)
Representatives of employees:
Ana Hochkraut, MSc, Member
Peter Fratnik, Member (from 22 July 2010 to 31 May 2014)
139
COMPANIES
COMPANIES OF THE MERKUR DIVISION:
SUBSIDIARIES OF THE MERKUR DIVISION:
MERKUR HRVATSKA, d. o. o.
Kelekova 18/A, 10000 Zagreb, Croatia
Telephone: +385 1 2009 333
E-mail: merkurhr@merkur.eu
Fax: +385 1 2008 708
Ownership: Merkur - trgovina in storitve, d. d., 100%
Director: Gregor Adler
MERKUR NEKRETNINE, d. o. o.
Kelekova 18/A, 10000 Zagreb, Croatia
Telephone: +385 1 2009 333
Fax: +385 1 2008 708
E-mail: merkurhr@merkur.eu
Ownership: Merkur Hrvatska, d. o. o., 100%
Director: Gregor Adler
MERKUR INTERNATIONAL d. o. o., Beograd
Partizanske avijacije 4, 11070 Novi Beograd, Serbia
Telephone: +381 11 20 57 200
Fax: +381 11 20 57 201
E-mail: merkurbg@merkur.eu
Ownership: Merkur - trgovina in storitve, d. d., 100%
Director: Milan Borota, PhD
MERKUR ČELIK, d. o. o., Beograd
Partizanske avijacije 4, 11070 Novi Beograd, Serbia
Telephone: +381 11 222 89 00
Fax: +381 11 222 89 01
E-mail: merkurbg@merkur.eu
Ownership:Merkur – trgovina in storitve, d. d., 66.16%
Merkur International d. o. o., Beograd 33.84%
Director: Branko Drofenik (Zoran Cvijović until 15 May 2012)
MERKUR, trgovina i usluge, d. o. o., Cetinje
Bajova br. 1,81250 Cetinje, Montenegro
Telephone: +38269090365
E-mail: marija.zaric@merkur.eu
Ownership: Merkur – trgovina in storitve, d. d., 100%
Director: Marija Zarić
INTERMERKUR – NOVA, d. o. o., Sarajevo
ul. Stupska bb, Novi Grad
71000 Sarajevo, Bosnia and Herzegovina
Telephone: +387 33 756 980
Fax: +387 33 756 941
E-mail: intermerkur-nova@merkur.eu
Ownership: Merkur - trgovina in storitve, d. d., 100%
Director: Enver Šoškić
PERLES MERKUR ITALIA, s.r.l. (in compulsory settlement proceedings since 10 May 2012)
ASSOCIATED COMPANY OF THE MERKUR DIVISION:
ŽELEZOKRIVNICA SCT- MERKUR, d. o. o. (in bankruptcy proceedings since 14 March 2011)
140
COMPANIES IN THE MERSTEEL DIVISION:
SUBSIDIARIES OF THE MERSTEEL DIVISION:
MERSTEEL, trgovina in storitve, d. o. o.
Cesta na Okroglo 7, 4202 Naklo (entered into the register of companies on 2 April 2008)
Registration no.: 3307417
Identification no.: SI 11722088
Telephone:+386 (0)4 258 80 00Fax:+386 (0)4 258 85 56
Website: www.mersteel.si
Activity code: G/46.720
E-mail: info@mersteel.si
Bank accounts:
- Abanka, d. d. Ljubljana:
05100-8012565469
- Gorenjska banka d.d., Kranj: 07000-0001053995
- NKBM d. d. Maribor:
04515-0001597128
- Factor banka d. d., Ljubljana:27000-0000155572
- Probanka, d. d., Maribor:
25100-9722716103
Ownership: Merkur - trgovina in storitve, d. d., 100%
Director: Darko Gregorič, MSc
MERSTEEL, d. o. o.
Poslovna zona Žitnjak, Slavonska avenija 22d,
10000 Zagreb, Croatia
Telephone: +385 1 249 87 30
Fax: +385 1 249 87 39
E-mail: mersteel.hrvatska@mersteel.eu
Ownership: Mersteel, trgovina in storitve, d. o. o., Naklo, 100%
Director: Sanja Svetec
MERSTEEL, trgovina i usluge, d. o. o.
Partizanske avijacije 4, 11070 Novi Beograd, Serbia
Telephone: +381 11 222 89 00
Fax: +381 11 222 89 01
E-mail: mertsteelbg@mersteel.eu
Ownership: Mersteel, trgovina in storitve, d. o. o., Naklo, 100%
Director: Branko Drofenik (Zoran Cvijović until 15 May 2012)
MERSTEEL PROFIL doo, Beograd
Partizanske avijacije 4, 11070 Novi Beograd, Serbia
Telephone: +381 11 222 89 00
Fax: +381 11 222 89 01
E-mail: mersteelbg@mersteel.eu
Ownership: 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
Telephone: +387 33 496 000
Fax: +387 33 496 019
E-mail: mersteel.bih@mersteel.eu
Ownership: Mersteel, trgovina in storitve, d. o. o., Naklo, 100%
Director: Željko Mutnović
141
MERKUR MAKEDONIJA DOO Skopje
Ul. Edvard Kardelj 12, 1000 Skopje, Macedonia
Telephone: +389 232 19 701
Fax: +389 232 19 710
E-mail: general@merkur.eu
Ownership: 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
Registration no.: 5464943
Identification no.: SI 18224326
Telephone: +386 (0)1 309 37 00 Fax: +386 (0)1 309 37 60
Website: www.bigbang.si
Activity code: G/47.430
E-mail: info@bigbang.si
Bank accounts:
- NLB d.d. Ljubljana: 02923-0254441325
- SKB banka d. d., Ljubljana: 03171-1007727196
- NKBM d. d., Maribor: 02923-0254441325
Ownership: Merkur - trgovina in storitve, d. d., 100%
Director: Aleš Ponikvar
BIG BANG, d.o.o., Beograd
Partizanske avijacije 4, 11070 Novi Beograd, Serbia
Telephone: +381 11 260 13 10
Fax:+381 11 260 11 59
E-mail: aleksandra.memon@bigbang.rs
Ownership: Big Bang, d. o. o., Ljubljana, 100%
Director: Aleksandra Memon
Annual Report of Merkur, d. d., and
Consolidated Annual Report of the Merkur Group for the Year 2012
• Published by: Merkur, d. d., Cesta na Okroglo 7, 4202 Naklo • Production by: Marketing, Merkur, d. d.
• Concept by: Aleša Unk • Design by: Aleša Unk, Maja Kocjančič • Texts by: Merkur, d. d.
• Prepress production by: Merkur, Marketing, d. d. • Print by: digitalni print Trajanus • May 2013
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