FABRYKA FARB I LAKIERÓW ŚNIEŻKA SA

Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
FABRYKA FARB I LAKIERÓW ŚNIEŻKA SA
FINANCIAL STATEMENT
for the year ended as at 31 December 2015
ALONG WITH INDEPENDENT STATUTORY AUDITOR'S REPORT
PREPARED ACCORDING TO THE INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) IN THE VERSION
APPROVED BY THE EUROPEAN UNION ALONG WITH INDEPENDENT STATUTORY AUDITOR'S REPORT
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
1
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
FABRYKA FARB I LAKIERÓW ŚNIEŻKA SA .............................................................................................................. 1
STATEMENT OF COMPREHENSIVE INCOME for the year ended as at 31 December 2015 .............................. 6
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015........................................................................ 7
CASH FLOW STATEMENT...................................................................................................................................... 8
STATEMENT OF CHANGES TO EQUITY FOR THE YEAR ENDED AS AT 31 DECEMBER 2015 ...................................10
ACCOUNTING PRINCIPLES (POLICY) AND ADDITIONAL EXPLANATORY NOTES ....................................................11
1. GENERAL INFORMATION.................................................................................................................................11
2. IDENTIFICATION OF THE CONSOLIDATED FINANCIAL STATEMENTS.................................................................11
3. THE COMPOSITION OF THE MANAGEMENT BOARD ........................................................................................11
4. APPROVAL OF THE FINANCIAL STATEMENT ....................................................................................................11
5. COMPANY’S INVESTMENTS.............................................................................................................................11
6. SIGNIFICANT VALUES BASED ON PROFESSIONAL JUDGEMENT AND ESTIMATE ...............................................14
6.1. PROFESSIONAL JUDGEMENT .............................................................................................................................14
6.2. UNCERTAINTY OF ESTIMATES AND ASSUMPTIONS ...................................................................................................14
7. THE BASIS FOR PREPARATION OF THE FINANCIAL STATEMENT .......................................................................15
7.1. DECLARATION OF COMPLIANCE .........................................................................................................................15
7.2. FUNCTIONAL AND FINANCIAL REPORT CURRENCY ...................................................................................................15
8. AMENDMENTS TO APPLICABLE ACCOUNTING PRINCIPLES..............................................................................15
9. NEW STANDARDS OR INTERPRETATION WHICH HAVE BEEN PUBLISHED, BUT HAVE NOT ENTERED INTO
FORCE YET...........................................................................................................................................................16
10. SIGNIFICANT ACCOUNTING PRINCIPLES ........................................................................................................16
10.1. MEASUREMENT AT FAIR VALUE .......................................................................................................................16
10.2. FOREIGN CURRENCY TRANSLATION ...................................................................................................................17
10.3 ................................................................................................................................................................18
PROPERTY, PLANT AND EQUIPMENT ..........................................................................................................................18
10.4. FIXED ASSETS HELD FOR SALE ..........................................................................................................................19
10.5. INVESTMENT PROPERTIES ..............................................................................................................................19
10.6. INTANGIBLE ASSETS ......................................................................................................................................19
10.7.LEASING ....................................................................................................................................................20
THE COMPANY AS A LESSEE ....................................................................................................................................20
10.8. IMPAIRMENT OF NON-FINANCIAL NON-CURRENT ASSETS........................................................................................20
10.9. EXTERNAL FINANCING COSTS ..........................................................................................................................21
10.10. SHARES AND STOCKS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES .................................................................21
10.11. FINANCIAL ASSETS .....................................................................................................................................21
10.12. Impairment of financial assets..........................................................................................................22
10.13. HEDGES ..................................................................................................................................................23
10.14. INVENTORY ..............................................................................................................................................24
10.15. TRADE AND OTHER RECEIVABLES....................................................................................................................25
10.16. CASH AND CASH EQUIVALENTS ......................................................................................................................25
10.17. INTEREST-BEARING LOANS, BORROWINGS AND DEBT SECURITIES ............................................................................25
10.18. TRADE AND OTHER LIABILITIES ......................................................................................................................25
10.19. PROVISIONS .............................................................................................................................................26
10.20. EMPLOYEE BENEFITS...................................................................................................................................26
10.21. REVENUES ...............................................................................................................................................26
10.22. TAXES.....................................................................................................................................................27
10.23. NET EARNINGS PER SHARE ...........................................................................................................................28
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
2
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
11.OPERATING SEGMENTS..................................................................................................................................28
12. REVENUES AND COSTS ..................................................................................................................................32
12.1. OTHER OPERATING REVENUE ..........................................................................................................................32
12.2. OTHER OPERATING EXPENSES .........................................................................................................................32
12.3 FINANCIAL REVENUES ....................................................................................................................................32
12.4. FINANCIAL EXPENSES ....................................................................................................................................33
12.5 EXPENSES BY TYPE ........................................................................................................................................33
12.6. DEPRECIATION EXPENSES, IMPAIRMENT LOSSES, FOREIGN EXCHANGE DIFFERENCES AND INVENTORY RECOGNIZED IN PROFIT
AND LOSS ..........................................................................................................................................................34
12.7. COSTS OF EMPLOYEE BENEFITS ......................................................................................................................34
14. INCOME TAX .................................................................................................................................................35
14.1. TAX BURDEN ..............................................................................................................................................35
14.2. RECONCILIATION OF EFFECTIVE TAX RATE ...........................................................................................................35
RECONCILIATION OF INCOME TAX ON PROFIT BEFORE TAX AT THE STATUTORY TAX RATE WITH INCOME TAX COMPUTED AT THE
EFFECTIVE TAX RATE OF THE COMPANY FOR THE YEAR ENDED AS AT 31 D ECEMBER 2015 AND 31 DECEMBER 2014 IS AS FOLLOWS: 35
14.3. DEFERRED TAX INCOME.................................................................................................................................37
15. SOCIAL ASSETS AND SOCIAL FUND LIABILITIES ..............................................................................................37
16. EARNINGS PER SHARE ...................................................................................................................................39
17. DIVIDENDS PAID AND PROPOSED .................................................................................................................39
18. PROPERTY, PLANT AND EQUIPMENT.............................................................................................................40
19. LEASING ........................................................................................................................................................42
19.1. LIABILITIES UNDER FINANCIAL LEASING AND LEASE AGREEMENTS WITH A PURCHASE OPTION............................................42
19.2. RECEIVABLES UNDER FINANCIAL LEASING AND LEASE AGREEMENTS WITH A PURCHASE OPTION.........................................42
20. INVESTMENT PROPERTIES .............................................................................................................................43
21. INTANGIBLE ASSETS ......................................................................................................................................43
22. FINANCIAL ASSETS CLASSIFIED AS HELD FOR SALE ........................................................................................45
23. OTHERS ASSETS .............................................................................................................................................45
23.1. OTHER FINANCIAL ASSETS ..............................................................................................................................45
23.2. OTHER NON-FINANCIAL ASSETS .......................................................................................................................46
24. EMPLOYEE BENEFITS .....................................................................................................................................46
24.1. RETIREMENT AND OTHER POST-EMPLOYMENT BENEFITS ........................................................................................46
25. INVENTORY ...................................................................................................................................................49
26. TRADE AND OTHER RECEIVABLES ..................................................................................................................50
27. CASH AND CASH EQUIVALENTS .....................................................................................................................52
28. EQUITY, SUPPLEMENTARY AND RESERVE CAPITAL........................................................................................52
28.1. EQUITY .....................................................................................................................................................52
28.2. SUPPLEMENTARY CAPITAL ..............................................................................................................................54
28.3. RETAINED PROFIT (LOSS) AND DIVIDEND RESTRICTIONS..........................................................................................54
29. INTEREST-BEARING LOANS AND BORROWINGS ............................................................................................55
30. TRADE AND OTHER LIABILITIES AS WELL AS ACCRUALS.................................................................................59
30.1. TRADE AND OTHER LIABILITIES AS WELL AS OTHER LIABILITIES (SHORT-TERM) ..............................................................59
30.2. CURRENT INCOME TAX LIABILITIES ....................................................................................................................60
30.3. ACCRUALS .................................................................................................................................................60
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
3
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
31. CAUSES OF DIFFERENCES BETWEEN CHANGES IN CERTAIN ITEMS AS SHOWN BY THE STATEMENT OF
FINANCIAL POSITION AND AS SHOWN BY THE STATEMENT OF CASH FLOWS AS WELL AS OTHER INFORMATION
ON THE STATEMENT OF CASH FLOWS .................................................................................................................60
32. INVESTMENT LIABILITIES ...............................................................................................................................62
33. CONTINGENT LIABILITY .................................................................................................................................62
33.1. LEGAL AFFAIRS ............................................................................................................................................62
33.2. TAX SETTLEMENTS .......................................................................................................................................62
34. INFORMATION ON SUBSIDIARIES AND ASSOCIATES......................................................................................62
34.1. ASSOCIATE ................................................................................................................................................63
34.2. TRANSACTION CONDITIONS WITH ASSOCIATED ENTITIES .........................................................................................63
34.3. LOAN GRANTED TO A MEMBER OF THE MANAGEMENT BOARD ...............................................................................63
34.4. OTHER TRANSACTIONS WITH PARTICIPATION OF MEMBERS OF THE MANAGEMENT BOARD .............................................63
34.5. REMUNERATION OF COMPANY’S SENIOR EXECUTIVES ...........................................................................................63
35. INFORMATION ON REMUNERATION OF THE KEY CERTIFIED AUDITOR OR THE ENTITLED ENTITY TO CARRY
OUT THE AUDIT OF FINANCIAL STATEMENTS ......................................................................................................64
36. OBJECTIVES AND PRINCIPLES OF FINANCIAL RISK MANAGEMENT ................................................................65
36.1. INTEREST RATE RISK......................................................................................................................................65
36.2. CURRENCY RISK ...........................................................................................................................................66
36.3. RISK RELATED TO PRICES OF RAW MATERIALS ......................................................................................................66
36.4. CREDIT RISK ...............................................................................................................................................66
36.5. LIQUIDITY RISK ............................................................................................................................................66
37. FINANCIAL INSTRUMENTS.............................................................................................................................67
37.1. HEDGES ....................................................................................................................................................68
38. CAPITAL MANAGEMENT................................................................................................................................68
39. EMPLOYMENT STRUCTURE ...........................................................................................................................69
40. EVENTS AFTER THE BALANCE SHEET DATE ....................................................................................................69
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
4
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
SELECTED FINANCIAL INFORMATION
in PLN ‘000
the year ended as at
31 December 2015
I. Net revenues from sale of products, goods and materials
II. Operating profit (loss)
in Euro ‘000
the year ended as at
31 December 2014
the year ended as at
31 December 2015
the year ended as at
31 December 2014
496 809
43 180
65 115
486 033
37 318
30 631
118 718
10 318
15 560
116 018
8 908
7 312
IV Net profit (loss)
58 216
24 639
13 911
5 881
V Comprehensive income for the period
58 651
24 377
14 015
5 819
VI. Net cash flows from operating activities
60 104
47 745
14 362
11 397
III. Gross profit (loss)
VII. Net cash flows from investing activities
VIII. Net cash from financing activity
IX. Total net cash flows
15 253
(14 451)
3 645
(3 449)
(79 793)
(40 865)
(19 067)
(9 755)
(4 436)
(7 571)
(1 060)
(1 807)
X.Total assets
306 286
309 365
72 595
72 582
XI. Liabilities and provisions
156 542
178 664
41 925
41 917
XII. Long-term liabilities
51 834
67 503
15 840
15 837
XIII. Short-term liabilities
104 708
111 161
26 085
26 080
XIV.Equity
149 744
130 701
30 670
30 664
12 618
12 618
2 961
2 960
12 617 778
12 617 778
12 617 778
12 617 778
XVII.Profit (loss) per common share (in PLN/EUR)
4,61
1,95
1,10
0,47
XVIII. Diluted profit (loss) per common share (in PLN/EUR)
4,61
1,95
1,10
0,47
XIX. Carrying amount per common share (in PLN/EUR)
11,87
10,36
2,78
2,43
XX. Diluted carrying amount per common share (in PLN/EUR)
11,87
10,36
2,78
2,43
3,10
2,50
0,74
0,60
XV. Share capital
XVI. Number of shares (items)
XXI. Declared or paid dividend per share (in PLN/EUR)
The following exchange rates were applied to convert PLN to EUR:
Particular items of the statement on comprehensive income were calculated on the basis of average EURO
exchange rate, which was the following:
within 12 months of 2015 - 4,1848
within 12 months of 2014 - 4,1893
Particular positions of the financial position statement were calculated on the basis of EURO exchange rate,
which was the following:
as at 31 December 2015 - 4,2615
as at 31 December 2014 - 4,2623
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
5
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
STATEMENT OF COMPREHENSIVE INCOME
for the year ended as at 31 December 2015
31 December 2015
31 December 2014
Note
Continued operations
Revenue from sales of materials
442 577
38 483
15 749
426 139
43 207
16 687
Sales revenue
496 809
486 033
Cost of sales
311 107
311 135
Gross profit / (loss) on sales
185 702
174 898
1 464
90 295
51 321
2 370
333
86 929
46 843
4 141
43 180
37 318
30 852
8 917
2 983
9 670
65 115
30 631
6 899
5 992
58 216
24 639
-
-
58 216
24 639
435
(262)
-
-
-
-
435
(262)
435
(262)
435
(262)
Revenue from sales of products
Revenue from sales of goods
Other operating revenue
Selling cost
General administrative expenses
Other operating expenses
12.1
12.5
12.5
12.2
Operating profit(loss)
Financial revenues
Financial expenses
12.3
12.4
Gross profit (loss)
Income tax
14
Net profit/ (loss) on continued operations
Discontinued operations
profit/ (loss) for the period of discontinued operations
Net profit/ (loss) for the period
Other comprehensive income
13
Items that could be reclassifies to profit / (loss) in subsequent reporting
periods:
Financial assets classified as held for sale
Cash flow hedge
Income tax on other comprehensive income
Items that could not be reclassified to
Profit / (loss) in subsequent reporting periods :
Actuarial gains and losses
Other net comprehensive income
13
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
6
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
COMPREHENSIVE INCOME FOR THE PERIOD
Profit/ (loss) per share:
58 651
24 377
4,61
4,61
4,61
4,61
1,95
1,95
1,95
1,95
31 December 2015
31 December 2014
165 580
132 064
11 569
1 376
358
18 888
1 325
-
167 687
132 536
11 821
1 418
58
19 338
2 516
-
140 706
64 382
66 537
450
930
8 407
141 576
57 463
70 625
8
637
12 843
-
102
306 286
309 365
149 744
12 618
88 594
48 532
130 701
12 618
103 563
14 520
51 834
47 808
1 262
67 503
63 365
1 524
16
basis, from profit for the reporting period
basis, from profit on continued operations for the period
diluted, from profit for the reporting period
diluted, from profit for continued operations for the period
STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
Note
ASSETS
Non-current assets
Property, plant and equipment
Investment properties
Intangible assets
Financial assets classified as held for sale
Shares and interests and other long-term assets
Long-term receivables
18
20
21
22
5, 23.1
26
Deferred tax assets
Current assets
Inventory
Trade and other receivables
25
26
Income tax receivables
Derivative financial instruments
Other financial assets
Other non-financial assets
Cash and cash equivalents
23.1
23.2
27
Non-current assets classified as held for sale
TOTAL ASSETS
LIABILITIES
Equity
Equity
28.1
Surplus from sales of shares above their nominal value
Own shares
Other supplementary capital
Revaluation reserve
Supplementary capital
Retained earnings/losses brought forward
28.2
28.3
Long-term liabilities
Interest-bearing loans and borrowings
Provisions
29
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
7
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
2 764
-
2 614
-
104 708
50 049
51 614
2 229
278
538
111 161
40 106
67 634
2 676
342
403
-
-
Total liabilities
156 542
178 664
TOTAL LIABILITIES
306 286
309 365
Other liabilities
Deferred income tax provision
30.1
14.3
Accruals
Short-term liabilities
Trade and other liabilities
Current portion of interest-bearing loans and borrowings
30.1
29
Derivative financial instruments
Income tax liabilities
Accruals
Provisions
30.2
30.3
Liabilities directly related to non-current assets
classified as held for sale
CASH FLOW STATEMENT
for the year ended as at 31 December 2015
Cash flows from operating activities for the year ended
31 December 2015
31 December 2014
Profit before tax
65 115
Adjustments:
Depreciation / amortisation of PP&E and intangible assets
Impairment losses on PP&E
(Profit) loss on investing activities
(Profit) loss on sales of financial assets classified as held for sale
Profit (loss) on the measurement of investment properties at fair value
(Profit) loss arising from changes in the fair value of financial assets at fair value
(Profit) / loss associated with financial activity and foreign exchange differences
Interest not paid
Share in profit (loss) of associates
Negative goodwill
Interest received
Net interests and dividends
Other adjustments
Operating cash flows before changes to working capital
(5 174)
24 934
16 772
15 767
-
-
(29)
872
-
-
-
-
Movement in inventories
Movement in receivables
Movement in liabilities
Movement in provisions
Movement in accruals
Cash generated by operating activities
Grants received
Income tax paid
Net operating cash
30 631
-
-
4 489
7 391
-
-
-
-
-
-
-
-
(26 406)
904
-
-
59 941
55 565
(6 918)
5 409
4 581
(10 086)
9 880
3 899
308
193
(355)
67 437
8
54 988
-
-
(7 333)
(7 243)
60 104
47 745
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
8
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment as well as intangible assets
Expenses related to acquisition of PP&E and intangible assets
Expenses related to acquisition of investment properties
Proceeds from sale of investment properties
Expenses related to acquisition of financial assets classified as held for sale
Proceeds from leasing of PP&E
Expenses related to acquisition of shares and interests
Expenses related to loans granted
Proceeds from repayment of loans
Expenses related to acquisition of subsidiaries ( decreased by acquired cash and cash
equivalents)
607
366
(16 187)
(17 406)
-
-
-
-
-
-
-
(550)
-
-
-
330
-
-
475
-
Proceeds from sale of shares
Proceeds from government grants
Interest received
Other
Dividends received
-
-
30 318
2 773
Net cash used in investing activity
15 253
(14 451)
-
-
39
36
Cash flows from financing activities
Net proceeds from issuance of shares
Acquisition of own shares
Proceeds from issuance of debt securities
Repayment of debt securities
Proceeds from loans and borrowings raised
Repayment of loans and borrowings
Repayment of liabilities under finance lease
Grants received
Interest
Other proceeds
Dividends and promoter certificates paid
Net cash from financing activity
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Change in cash due to accrued interest
Cash and cash equivalents at the end of the period
-
-
-
-
-
-
-
-
76 348
17 226
(112 386)
(22 779)
(126)
(257)
-
-
(4 055)
(3 395)
34
322
(39 608)
(31 982)
(79 793)
(40 865)
(4 436)
(7 571)
12 843
20 414
-
-
8 407
12 843
Accounting principles (policy) and additional explanatory notes to the financial statements on pages from 10 to 62 constitute its
integral part
9
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
STATEMENT OF CHANGES TO EQUITY
for the year ended as at 31 December 2015
Surplus from sales of
shares above their
nominal value
Share
capital
As at 1 January 2015
Other
supplementary
capital
Own
shares
12 618
Retained
earnings/losses
brought forward
Revaluation
reserve
Reserve capital
14 520
130 701
Other net comprehensive income for the period
-
-
-
-
-
-
435
435
Net profit / (loss) for the period
-
-
-
-
-
-
58 216
58 216
Transfer to reserve capital due to profit distribution
-
-
-
-
-
-
-
-
Comprehensive income for the period
-
-
-
-
-
-
-
-
Issued shares
-
-
-
-
-
-
-
-
Redemption of own shares
-
-
-
-
-
-
-
-
Promoter certificates paid
-
-
-
-
-
-
(493)
(493)
-
-
-
-
(14 969)
-
(24 146)
(39 115)
12 618
-
-
-
88 594
-
48 532
149 744
Dividends paid
As at 31 December 2015
As at 1 January 2014
103 563
Total equity
12 618
-
-
-
113 681
-
12 007
138 306
Other net comprehensive income for the period
-
-
-
-
-
-
(262)
(262)
Net profit / (loss) for the period
-
-
-
-
-
-
24 639
24 639
Transfer to reserve capital due to profit distribution
-
-
-
-
-
-
-
-
Comprehensive income for the period
-
-
-
-
-
-
-
-
Issued shares
-
-
-
-
-
-
-
-
Redemption of own shares
-
-
-
-
-
-
-
-
Profit adjustment arising from changes in the fair value of financial
assets
-
-
-
-
-
-
-
-
Promoter certificates paid
-
-
-
-
-
-
(438)
(438)
Dividends paid
-
-
-
-
(10 118)
-
(21 426)
(31 544)
12 168
-
-
-
103 563
-
14 520
130 701
As at 31 December 2014
10
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
ACCOUNTING PRINCIPLES (POLICY) AND ADDITIONAL
EXPLANATORY NOTES
1. General information
The financial statement of FabrykaFarb i LakierówŚnieżka SA covers the year ended as at 31 December 2015
and contains comparable data for the year ended as at 31 December 2014.
FabrykaFarb i Lakierów „Śnieżka” S.A. (“Company”, “Entity”) was established by virtue of Notarial Deed as of
16 January 1998. The registered office of the Company is Lubzina 34a.
The Company is registered in the register of entrepreneurs of The National Court Register, at District Court, XII
Commercial Division , under number KRS0000060537. The Company holds a national Business Registry
Number (REGON): 690527477.
The Company has been formed for an unspecified time
The Company’s core scope of activity is manufacture of paints, varnishes and alike coatings as well as
adhesives.
According to WSE classification the entity operates in the chemical industry.
2. Identification of the consolidated financial statements
The Company prepared the consolidated financial statements for the year ended as at 31 December 2015 , which
was approved to be published on 18 April 2016.
3. The composition of the Management Board
The composition of the Management Board of the company as at 31 December 2015 was as follows:
Piotr Mikrut - President of the Management Board since 31 March 2004 to date,
WitoldWaśko - Vice-President of the Management Board since 1 April 2005 to date,
Member of the Management Board between the period of 16 February 1998 and 31
March 2005.
Joanna Wróbel-Lipa- Vice-President of the Management Board since 6 May 2011 to date,
Member of the Management Board between the period of 18 December 2007 and 5
May 2011.
4. Approval of the financial statement
This financial statement was approved by the Management Board to be published on 18 April 2016.
5. Company’s investments
The Company holds investments in the following subsidiaries, affiliated companies and associate.
11
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Subsidiary
Headquarters
Company's core activity
31 December 2015
31 December 2014
Śnieżka - Ukraina Sp. z o.o.
Yavoriv Prywokzalna 1A, Ukraine
manufacture
of
paints,
varnishes
solvents,
adhesives,
putties,
etc.
wholesale and retail sale of construction
82,52%
82,52%
Śnieżka - BelPol Wspólna Sp. z o.o.
ZhodzinaDorożnaja 3/1, Belarus
solvents, wholesale and
wholesale and retail sale of construction
99,00%
99,00%
TM Investment Sp. z o.o
Brzeźnica, ul.Dębska 44, Poland
trademarks management road transport
100,00%
100,00%
100,00%
100,00%
10,07%
10,07%
promotion of Snieżka products and
advertising activity
Śnieżka East Trade Sp.z o.o
Moscow, Rumjancewo, Russia
Plastbud Sp. z o.o.
Pustków 604, Poland
production resins, pigments
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
13
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
As at 31 December 2015 and 31 December 2014 the share in the total number of votes held by the Company in
subsidiaries, affiliated entities and joint ventures is equal to the share of the Company in the share capitals of such
entities.
6. Significant values based on professional judgement and estimate
6.1. Professional judgement
Within the process of accounting principles (policy) regarding the notions below, the most vital, apart from
accounting estimates, was the management’s professional judgement.
One of the areas requiring the management’s professional judgement is a verification of indication of investment
impairment in affiliated entities.
As at each balance sheet date the Company estimates whether there is objective evidence of impairment of particular
asset or a group of assets.
Another area, where the Company bases on the management’s professional judgement, apart from accounting
estimates, is leasing. The Company classifies leasing as operating or financial leasing, based on an estimate, to what
extent the risks and benefits related to the possession of the object of leasing are borne or gained by the lessor and to
what extent by the lessee. Such assessment is based on the economic terms of each leasing transaction.
6.2. Uncertainty of estimates and assumptions
The basic assumptions related to the future and other key sources of uncertainties present at the balance sheet date,
to which the risk of significant adjustment of balance sheet assets and liabilities is related in the following fiscal year
are presented below. The Company adopted estimates and assumptions related to the future on the basis of
knowledge possessed during the preparation of the financial statement. The estimates and assumptions may be
subject to change due to events in the future resulting from market changes or changes being beyond the Company’s
control. Such changes are reflected in estimate and assumptions when they occur.
Impairment of assets
As at each balance sheet date the Company estimates whether there are any indications for occurrence of
impairment of any assets. Details on impairment of assets have been presented in notes 18 and 21. As at the balance
sheet date the Company did not identify any indications that an asset may have been impaired. Within the period of
12 months ended as at 31 December 2015 the Company received dividend from TM Investment Sp. z o.o.
subsidiary. The value of divided received exceeded the amount of comprehensive income of the said entity, which
pursuant to IAS 36.12 are premises indicating possibility of impairment of shares in subsidiary. Accordingly, the
entity carried out the impairment test in relation to investment in the subsidiary. As a result of the test, no
investment impairment occurred.
In addition to the above there were no premises which would indicate impairment loss of other assets. As at 31
December 2014 as a result of analysis conducted there were no premises which would indicate impairment loss of
assets.
Valuation of provisions for employee benefits
Valuation of provisions for employee benefits was calculated by actuarial method. The assumptions of the said
matter have been presented in note 25.
Deferred tax assets
The Company recognizes the items of deferred tax assets basing on the assumption that in the future the tax gains
will allow for its use. Deterioration of the future tax gains can cause that this assumption may be unreasonable
Amortisation rates
The amount of amortisation rates is determined on the basis of expected useful life of tangible non-current assets
and intangible assets. PP&E, relatively their material and separate parts are depreciated according to the equal
instalment method in their useful lives. Depreciation write-offs are conducted for as long as the closing value of an
asset does not exceed its carrying amount.
The Company verifies the adopted periods of useful lives on an annual basis, taking into account the current
estimates.
Revaluation write-offs
As at the balance sheet date the Company estimates whether there is objective evidence for impairment of
receivables. If recoverable amount of an asset item is lower than its carrying amount, the Company makes a write-
14
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
off to the level of current amount of future cash inflows.
7. The basis for preparation of the financial statement
This financial statement was drawn up in accordance with the historical cost convention.
The financial statement is presented in Polish currency, i.e. PLN, and all values, unless stated otherwise, are
provided in PLN’ 000.
This financial statement was drawn up assuming that the Company will continue its business activity in the
foreseeable future. As at the date of approval of this financial statement, there is no evidence indicating that the
Company will not be able to continue its operations for the period of at least 12 months after the balance sheet date,
i.e. 31 December 2015.
7.1. Declaration of compliance
This financial statement was drawn up in accordance with International Financial Reporting Standards (‘IFRS’) and
approved by the EU. (‘IFRS EU’). As at the date of approval of this financial statement to be published, taking into
account a pending process within the EU on implementation IFRS standards as well as conducted business activity
by the Group, in the scope of accounting principles applied by the Group, IFRS differ from IFRS UE.
The IFRS UE comprise standards and interpretations approved by the International Accounting Standards Board
("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC")
7.2. Functional and financial report currency
Functional and financial report currency of the Company to this financial statement is PLN.
8. Amendments to applicable accounting principles
Accounting principles (policy) applied herein, comply with those applied in the financial statement of the Company
for the year ended as of 31 December 2014, excluding the following amendments to standards and new
interpretations applicable for annual periods, commencing as of 1 January 2015:
Amendments resulting from IFRS 2011-2013 review:
• Amendments to IFRS 3 Business combinations
The amendments clarify, that not only joint venture but also joint arrangements are beyond the range of
IFRS 3. This exception is only applied to preparation of financial statement for joint arrangement. This
amendment shall be applied prospectively.
The adoption of the aforementioned amendments had no impact on the financial position or performance
of the Company.
• Amendments to IFRS 13 Fair value measurement
•
•
The amendments clarify, that exception referring to portfolio investment is applicable not only to financial
assets and liabilities but also to other agreements embraced by IAS 39. The amendments shall be applied
prospectively.
The adoption of the aforementioned amendments had no impact on the financial position or performance
of the Company.
Amendments to IAS 40 Investment properties
Description of additional services in IAS 40 distinguishes investment property from owner-occupied
property (i.e. property, plant and equipment). The amendment shall be applied prospectively and clarifies
that IFRS 3, not a definition of additional services in IAS 40, is used to determine whether transaction is
acquisition of an asset or venture.
The adoption of the aforementioned amendments had no impact on the financial position or performance
of the Company.
IFRIC 21 Levies
An interpretation that clarifies that the entity shall recognize a liability for levies when obligating event
occurs, i.e. the event which imposes an obligation to pay levy in accordance with applicable regulations.
In the event of due payment after exceeding the threshold, the entity shall not recognize a liability till the
moment the said threshold is reached. IFRIC 21 shall be applied prospectively.
The adoption of the aforementioned amendments had no impact on the financial position or performance
of the Company.
The Company has not decided to apply any standard, interpretation or amendments, which have been published but
15
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
have not entered into force yet, by virtue of European Union’s regulations.
9. New standards or interpretation which have been published, but have not entered
into force yet
The following standards and interpretations have been published by the International Accounting Standards Board,
but have not entered into force yet:
•
•
•
•
•
•
•
•
IFRS 9 Financial instruments (published on 24 July 2014) - not adopted by the EU till the date of approval of
these financial statement - being applicable for annual periods commencing on or after 1 January 2018,
IFRS 14 Regulatory Deferral Accounts (published on 30 January 2014) - in accordance with a decision taken
by the European Commission the approval process of the initial standard shall not be initiated prior to final
version - not adopted by the EU till the date of approval of these financial statement - being applicable for
annual periods commencing on or after 1 January 2016,
Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (published on 6 May 2014)
- being applicable for annual periods commencing on or after 1 January 2016,
Amendments to IAS 16 and 38 Clarification of Acceptable Methods of Depreciation and Amortisation (published
on 12 May 2014) being applicable for annual periods commencing on or after 1 January 2016,
IFRS 15 Revenue from Contracts with Customers (published on 28 May 2014) embracing amendments to IFRS
15 Date of entry into force of IFRS 15 (published on 11 September 2015) - not approved by EU as at the date of
approval of these financial statement - being applicable for annual periods commencing on or after 1 January
2018,
Amendments to IAS 16 and 41 Agriculture: Bearer Plants (published on 30 June 2014) being applicable for
annual periods commencing on or after 1 January 2016,
Amendments to IAS 27 Equity method in separate financial statements (published on 12 August 2014) - being
applicable for annual periods commencing on or after 1 January 2016,
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture (published on 11 September 2014) - the decision on the date was not made when EFRAG is to
conduct particular stages of work whose aim is to approve the standard herein - not approved by EU as at the
date of
approval of these financial statement,
• Amendments resulting from IFRS 2012 - 2104 review (published on 25 September 2014) - being applicable for
annual periods commencing on or after 1 January 2016,
• Amendments to IFRS 10, IFRS 12 and IAS 28 Investment entities: Applying the Consolidation Exception
•
•
•
•
•
(published on 18 December 2014) - not approved by EU as at the date of approval of these financial
statement- being applicable for annual periods commencing on or after 1 January 2016,
Amendments to IAS 1 Disclosure Initiative (published on 18 December 2014) being applicable for annual
periods commencing on or after 1 January 2016,
IFRS 16 Leasing (published on 13 January 2016) - the decision on the date was not made when EFRAG is to
conduct particular stages of work whose aim is to approve the amendments herein - not approved by EU as at the
date of approval of these financial statement- being applicable for annual periods commencing on or after 1
January 2019,
Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses (published on 19 January
2016) - not adopted by the EU till the date of approval of these financial statement - being applicable for annual
periods commencing on or after 1 January 2017,
Amendments to IAS 7 Disclosure initiative (published on 29 January 2016) - not adopted by the EU till the date
of approval of these financial statement - being applicable for annual periods commencing on or after 1 January
2017,
Explanation to IFRS 15 Revenue from Contracts with Customers (published on 12 April 2016)- not approved
by EU as at the date of approval of these financial statement - being applicable for annual periods commencing
on or after 1 January 2018,
10. Significant accounting principles
10.1. Measurement at fair value
The Company values financial instruments such as available-for-sale and derivatives at fair value at each balance
sheet date.
16
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Furthermore, the fair value of financial instruments measured at amortised cost and investment property at historic
cost, have been relatively disclosed in note 20 and 37.
The fair value is comprehended as the price which would be obtained from sales of an asset, or paid for the purpose
of transferring the liability on the basis of regular sales of an asset between the market participants, at the date of
measurement at applicable market conditions. Measurement of fair value is based on the assumption, that the
transaction of an asset or liability transfer occurs either:
on the principal market for a particular asset or liability,
- in the event of lack of principal market, on the most favourable market for a particular asset or liability.
Both the principal and most favourable market must be available to the Company.
The fair value of an asset or liability is measured assuming that the market participants, while establishing the price
of an asset or liability, act in their best economic interest. The measurement of the non-financial asset at fair value
takes into consideration an ability of the market participant to make use of the asset or disposal to another market
participant, which would use the asset most efficiently.
The Company applies measurement techniques which are appropriate in the circumstances and where sufficient data
for fair value measurement is available, by taking advantage of maximum appropriate observable inputs and
minimum unobservable inputs. All assets and liabilities, which are measured to fair value or their fair value is
disclosed in the financial statement, are classified in fair value hierarchy in a manner described below on the basis
of the lowest level of inputs which is significant for measurement of fair value treated as a whole:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Level 2 - Valuation technique for which the lowest level of inputs, which is significant for measurement of fair
value as a whole, is directly or indirectly observable,
Level 3 - Valuation technique for which the lowest level of inputs, which is significant for measurement of fair
value as a whole, is unobservable.
As at each balance sheet, in the event of assets and liabilities at particular balance dates in the financial statement,
the Company assesses whether transfers between hierarchy levels occurred through classification re-evaluation to
particular levels, driven by significance of inputs from the lowest level, which is essential to measure the fair value
treated as a whole.
The adoption of IFRS 13 had no impact on the financial position, performance of the Company or the scope of
information presented in the financial statement of the Company.
The Management Board of the Company determines principles and procedures of both systematic measurement of
fair value e.g. investment properties and non-listed financial assets as well as one-time valuation e.g. in the event of
assets available-for-sale for discontinued operations.
For the purpose of disclosing the measurement of fair value, the Company established classification of assets and
liabilities based on types , features and risks associated with particular assets and liabilities as well as the level in the
hierarchy of fair value, as described above.
10.2. Foreign currency translation
Transactions in foreign currency are recognized initially by the Company in functional currency (PLN), applying
spot foreign exchange to translate the amount in foreign currency. It’s an average NBP exchange for a particular
currency as of the last business day preceding the date of currency transaction conclusion.
As at the balance sheet date:
 Cash items in foreign currency are translated by applying closing quote for a particular currency.
Closing rate is the spot exchange rate at the balance sheet date. (The Company adopts an average
NBP exchange rate as of the last business day preceding the balance sheet date).
 Non-cash items assessed by historical cost determined in foreign currency are translated by applying
a spot foreign exchange as of the day of transaction.
Currency differences arise from settlement of cash items or translation the items as at the balance sheet date in
different currency rates than those converted at the beginning of recognition. They are recognized in the result of
the period they occur, while favourable exchange rate variances increase financial revenues of a particular period,
unfavourable exchange rate variances increase financial costs of a particular period. Currency differences arising
from settlement of non-cash items are recognized in the statement of comprehensive income in the period, where the
settlement was conducted.
The following currency rates were adopted to the balance sheet valuation:
17
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
31 December 2015 31 December 2014
USD
3.8801
3.5458
EUR
4.2423
4.3138
RON
0.9368
0.9630
UAH
0.1609
0.2269
BYR
0.00021
0.000321
10.3
Property, plant and equipment
PP&E constitute fixed assets, which are retained by the Entity in order to use them in the manufacturing process or
delivery of goods and services, so as to hand them over to be utilized by other entities by virtue of lease agreement
or administrative purposes.
The aforementioned fixed assets are recognized as an element of assets, if there is an expectation, that they are to be
utilized for the period of at least one year and it is very likely that the Company is to gain prospect economic
benefits associated with this asset.
The elements of tangible fixed assets are recognized on the basis of their acquisition price or estimated
manufacturing cost, decreased by cumulated amortisation/ depreciation
write-offs and permanent asset impairment. If, however, a determined element of tangible fixed assets is composed
of individual and essential parts of various economic lifetime, the parts are treated as individual items of tangible
fixed assets.
Fixed assets account is conducted in terms of quantities and values included in assets by category.
PP&E, relatively their material and separate parts are depreciated according to the equal instalment method in their
useful lives. Depreciation write-offs are conducted for as long as the closing value of the element does not exceed
its carrying amount. Lands are not subject to deprecation.
Useful time periods of tangible fixed assets for particular asset categories:
Category type Period
Lands
0
1
Buildings
Structures
2
3
Boilers and power machinery
4
5
Machinery and devices
Machinery, special sector devices
indefinite
20-40
20-40
5-10
years
years
years
years
3-15
years
5-10
years
6
Technical equipment
4-30
years
7
Means of transport
Tools, instruments, movables and
equipment
3-8
years
5-15
years
8
At the balance sheet date the Company assesses whether there are any indications for a possible impairment of
tangible fixed asset. When such an indication occurs, the Company estimates the recoverable amount of the asset. If
the carrying amount of a fixed asset is higher than the estimated value of its recoverable amount, then the carrying
amount of the said asset is subject to impairment write-off to the amount of its recoverable amount.
The Company verifies utilization periods as well as residual value of tangible fixed assets on annual basis.
A tangible fixed asset can be removed from the Company’s statement of financial position when the asset is sold or
when no economic gains are expected from continuing to use such an asset. All gains and losses resulting from
removal of a particular element of fixed assets from the financial statement of the Company’s financial position are
recognized in the statement of comprehensive income, where the said write-off occurred.
Assets in the course of construction refer to fixed assets being in progress and are recognized in accordance with
acquisition prices or manufacturing costs, decreased by impairment write-offs. The main reason of performing
write-offs is a probability that the element of fixed assets being in progress is very unlikely to generate gains in the
long run. Commenced investments are not subject to depreciation. Depreciation write-offs are commenced when a
particular fixed asset is complete and fit for use.
18
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
10.4. Fixed assets held for sale
Fixed assets (or disposal group) are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction, rather than through continuing use of the asset. This condition can only be met when a
sale transaction is highly probable and the asset is available for immediate sale at its present condition.
Classification of an asset as held for sale assumes the intention of the company’s management to conduct a sale
transaction within one year from the classification. Fixed assets classified as held for sale are measured according
to: carrying amount or fair value, less costs related to sales.
10.5. Investment properties
Investment property is initially recognized at acquisition cost including transaction costs. After the initial
recognition, investment property is reduced by depreciation and accumulated write-downs related to impairment.
Investment properties are removed from the balance sheet in the event of their sale or permanent withdrawal of
investment property from use, when non future sale benefits are expected. All gains and losses resulting from
removal of investment property from the balance sheet are recognized in gains and losses of the period, when the
write-off occurred.
Assets are transferred to investment properties only if a change of their utilisation method occurred, which must be
confirmed with the termination of the proprietor’s use of a given asset, the conclusion of an operating leasing
agreement. If an asset is utilised by its proprietor, i.e. the Company, it becomes an investment property and the
Company applies the principles specified in the section Tangible fixed assets until the day of changing the manner
of the property utilisation. If an asset is moved from inventory to investment property, the difference between the
fair value of the property determined as at the date of such movement and its previous value presented in the
statement of financial position is recognised in profit or loss. In the event of a transfer of investment property to the
assets utilised by the proprietor or to stocks, the alleged cost of such an asset assumed for the disclosure in another
category equals the fair value of the property determined as at the date of the change of its utilisation.
10.6. Intangible assets
Tangible assets acquired separately or produced (in case they meet criteria of development costs) are measured on
initial recognition at purchase or production cost. The purchase price of intangibles acquired in a business
combination amounts to their fair value as at the combination date. After initial recognition, intangibles are
disclosed at their purchase price or production cost decreased with the amortisation and revaluation write-offs for
impairment. Expenditure incurred on intangibles produced internally, except for capitalised expenditure incurred on
development works, are not capitalised and are stated in the costs of the period in which they were incurred.
The Company determines whether the useful time for the intangibles is limited or undefined. An intangible asset
with a definite useful time is amortised throughout its useful time and subject to impairment tests whenever there
are grounds for assuming impairment.
The period and method of amortisation of intangible assets with a definite useful life are verified at least as at the
end of each reporting period. Changes in the expected useful life or in the expected method of consuming the
economic benefits from an intangible asset are recognised through a change of, respectively, the period or
method of amortisation, and treated as changes of the estimated values. Depreciation write-offs for intangible
assets with definite useful time are recognised under profit or loss under the category corresponding to the given
intangible asset.
An intangible asset with an indefinite useful time as well as those, which are not utilised, are tested for
impairment on an annual basis in relation to particular assets or at the level of a cash-generating unit.
Research and development costs
R&D expenditures are recognized in profit or loss when incurred. Expenditures incurred on development work
performed as part of a given project is carried forward to the next period when it can be assumed that it will be
recovered in the future. After initial recognition, expenditures made on development are measured with the
historical cost method that requires assets to be recognized at the acquisition price less accumulated amortization
and accumulated impairment write downs. Capitalised expenditures are depreciated over the estimated period in
which the related undertaking generates sales revenues.
A summary of the policies applied to the Company's intangible assets is as follows:
19
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Patent and licences
Useful
life
Applied
method of
amortization
Internally
produced or
acquired
The impairment
test
Development costs
Computer
software
Other e.g. copyrights,
licences
5-10 years
2-10 years
2-10 years
(5-10 years) -straight-line
method.
(2-10 years) -straightline method.
(2-10 years) straight-line
method.
Acquired
Internally produced
Acquired
Acquired
Indefinite useful time - annual and
in the event of grounds for
impairment loss.
Others – annual appraisal whether
grounds for possible impairment
loss occurred.
Annual in the event of
assets not subject to
utilization as well as in the
event of grounds for
possible impairment loss.
Annual appraisal
whether grounds for
possible impairment loss
occurred.
Annual appraisal
whether grounds
for possible
impairment loss
occurred.
Indefinite In case of patents and
licenses utilised by virtue of
agreement for definite period of time,
such time is adopted considering
additional period for which their use
can be extended
Assets that have an indefinite useful
life are not subject to amortisation
and revaluation. Depreciated over
the duration of the contract (2-10
years) -straight-line method.
Gains or losses on derecognition of intangible assets for the balance sheet are measured at the difference between
net revenues from sales and the carrying amount of a given asset, and recognized in profit or loss at the moment
of derecognition.
10.7.Leasing
The Company as a lessee
Financial leasing agreements transferring all the risks and benefits resulting from owning the subject of the leasing
to the Company are recognised in the statement of financial condition as at the leasing date according to the lower
of the two following values: fair value of the fixed asset constituting the subject of the leasing and the current value
of minimal leasing payment. Leasing payments are divided into financial costs and the decrease in balance of
liabilities on account of leasing, which allows for calculating the whole interest rate on the unpaid liability.
Financial costs are recognised in profit or loss, unless capitalisation requirements are met
The depreciation policy for depreciable leased assets shall be consistent with that for depreciable assets that are
owned. If it is not certain that the lessee will obtain title to the asset before the end of the lease term, an asset is
depreciated over the shorter of the lease term and the asset’s useful economic life.
Leasing agreements, under which the lessor retains all risks and benefits resulting from owning the subject of the
leasing agreement, are recognised under operating leasing agreements. Leasing payments on account of operating
leasing and leasing instalments are recognised as operating costs under profit or loss according to the straight line
method during the leasing period.
Contingent lease charges are recognised as expenses in the period when they become due.
The Company as a lessor
Leasing agreements, under which the lessor retains all risks and benefits resulting from owning the subject of the
leasing agreement, are recognised under operating leasing agreements. The initial direct costs incurred in the course
of negotiating operating leasing agreements are added to the carrying amount of the asset being the leasing subject
and disclosed in the whole leasing period on the same basis as the revenue from rental. Contingent lease charges are
recognised as revenue in the period when they become due.
10.8. Impairment of non-financial non-current assets
As at each balance sheet date the Company estimates whether there are any indications for occurrence of
impairment of any assets. In the event of determination that such indications exist or a necessity of conducting an
20
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
annual impairment test, the Company estimates the recoverable amount for a given asset or a cash-generating unit
the asset is allocated to.
The recoverable amount of the given asset or cash-generating unit corresponds to fair value decreased by costs of
effecting the sale of the given asset or respectively the cash-generating unit, or its use value, depending on which
one is higher. The recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. If balance-sheet value of the
asset is higher that its recoverable amount, impairment occurs and a write-off is made up to the determined
recoverable amount. For the estimation of the value in use, the projected cash flows are discounted to their present
value with the application of a discount rate prior to entailing the effects of taxation reflecting the current estimated
value of money in time as well as the risk typical for a given asset. Impairment losses on individual assets used in
continued activity are recognised under costs categories corresponding to the function of the asset whose
impairment was established.
As at each balance-sheet date, the Company assesses whether there are grounds for assuming whether the write-off
related to impairment recognised in previous periods regarding the given asset is necessary, or whether it should be
reduced. When such an indication occur, the Company estimates the recoverable amount of the asset. The
previously recognised write-down for impairment is reversed only if a change in the applied estimated values is
introduced in the period from recognition of the last write-down to establishing the recoverable value of the given
asset In such a case, the carrying amount of the asset is increased up to the level of its recoverable amount.
The increased amount cannot exceed the balance-sheet value of the asset which would be determined (after
amortisation), if the write-off related to impairment in connection with this asset hadn’t been recognised in previous
years. The reversal of the revaluation write-off for impairment of an asset is recognized immediately as revenue in
the profit and loss account Having reversed the revaluation write-off, in the following periods, the revaluation writeoff with regard to a given asset is adjusted in a manner which allows for, within the remaining utilisation period for
the asset in question, systematic write-off of its verified carrying amount decreased with the exit value.
10.9. External financing costs
External financing costs directly associated with acquisition, construction and manufacture of fixed assets, requiring
a significant amount of time to prepare for utilization in accordance with its purpose, are recognized as a part of the
cost of other asset manufacture. All other external financing costs are recognized as expense in the period they are
incurred. The Company takes advantage of external financing, which is mainly intended for objectives associated
with the current activities, targeted financing consists of loans at ING Bank Śląski SA (a loan of PLN 4.0m) as well
as a loan from TM Investment Sp. z o.o subsidiary (a loan in the amount of PLN 46.6m).
External financing cost constitutes the total amount of bank loans the Company takes advantage of, i.e. interest rates
along with commission. The basis for interest calculation is a rate resulting from loan agreements.
External financing cost consists of loan and borrowing costs which can be directly linked with acquisition or
manufacture of an asset, they are capitalized as prospect economic benefits if they are likely to contribute to future
economic benefits and can be reliably measured. The Company activates the differences between the external
financing costs and investment income on the temporary investment of those borrowings.
10.10. Shares and stocks in subsidiaries, associates and joint ventures
Shares and stocks in subsidiaries, associates and joint ventures are recognized in accordance with historical costs,
taking into account revaluation write-offs. In the event of share sales, the sales value of shares is calculated on the
basis of average weighted price.
10.11. Financial assets
Financial assets are classified in the following categories:
• Financial assets held to maturity,
• Financial assets at fair value through profit and loss,
• Loans and receivables,
• Financial assets available for sale.
Financial assets held to maturity are financial assets quoted on an active market that are not derivative instruments,
have identified or identifiable payments and a fixed maturity date, which the Company intends and is able to hold
till maturity, and are different from:
• classified at the initial recognition as measured to fair value through profit and loss,
• classified as available for sale,
21
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
those that meet the definition of loans and receivables.
Financial assets held to maturity are measured at amortized cost using the effective interest method. Financial
assets held to maturity are classified as long-term assets, if their term exceeds 12 months counting from the balance
sheet date.
Financial assets at fair value through profit and loss are financial assets that meet at least one of the following
conditions:
a)
is classified as held for sale Financial assets are classified as held for trading if:
•
they were acquired in order to be sold in a short period of time,
•
they are a part of the portfolio of specific financial instruments which are managed together, and which
are likely to generate short-term gains,
•
they are derivatives, except for derivatives constituting part of hedge accounting and financial
guarantee agreements,
b)
According to IAS 39, was classified in this category at the time of its initial recognition.
Financial liabilities evaluated according to fair value by financial result are assessed according to fair value taking
into account their market value as at balance-sheet date without sales transaction costs. Changes of the values of
these financial instruments are recognized in the statement of comprehensive income as company’s income
(favourable net change in the fair value) or costs (unfavourable net change in the fair value). If a contract contains
one or more embedded derivatives, the whole contract may be classified as financial assets measured at fair value
through profit or loss. This does not apply to cases in which the embedded derivative does not have significant
influence on cash flows from the contract or if it is obvious without carrying out an analysis or after performing
brief analysis, that if the hybrid instrument was considered first, then separating the embedded derivative would be
prohibited. Financial assets might be first recognised under categories evaluated according to fair value by financial
result, if the following criteria are met: (i) such qualification eliminates or significantly reduces incoherence within
the scope of recognition or evaluation (accounting mismatch); or (ii) assets are part of the financial assets group
which is managed and assessed according to fair value and documented risk management strategy; or (iii) financial
assets include embedded derivatives, which should be recognised separately. As at 31 December 2015 nonfinancial assets were classified to the category at fair value through profit and loss.
•
Loans and receivables are financial assets not classified as derivatives with determined and identifiable payments,
not quoted on the active market. They are classified as current assets unless their maturity exceeds 12 months from
the balance sheet date. Granted loans and receivables maturing within more than 12 months from the balance sheet
date are treated as fixed assets. Financial assets available for sale are financial assets classified as non-derivatives
that are classified as available for sale or not belonging to any previously mentioned asset categories. Financial
assets available for sale are recognized at fair value, increased by transaction costs, which can be directly attributed
to acquisition or issuance of the asset. If there are no quotations on an active market and it is impossible to estimate
reliably their fair value by alternative methods, financial assets available for sale are measured at their purchase cost
adjusted by any impairment losses. The positive and negative difference between the fair value and the acquisition
price of assets available for sale (if there is a market price established on the active market or if their fair value can
be determined with the application of another reliable method), after having decreased it with deferred tax, is
included in other comprehensive income. Decrease in the value of financial assets for sale due to impairment losses
is recognized as expense in the profit and loss. Acquisition and sales of financial assets are recognized at the
transaction date. On initial recognition, financial assets are recognized at fair value, increased, in the event of
financial assets other than those measures at fair value through profit and loss – by transaction costs directly
attributable to such acquisition.
An individual financial asset is removed from the balance sheet when the Company loses control over contractual
rights which make up a given financial instrument, it is usually the case when the instrument is sold or when all cash
flows attributable to the instrument are transferred to an independent third party.
If the Company:
•
has a legally enforceable right to use a surplus in one plan to settle obligations under the other plan; and
•
intends either to settle the obligations on a net basis, or to realise the surplus in one plan and settle its
obligation under the other plan simultaneously
a financial asset and a financial liability is offset and recognized in net amount of financial statement.
Framework agreement specified in IAS 32.50 shall not constitute a basis for offset, unless the both criteria described
above are met.
10.12. Impairment of financial assets
As at each balance sheet date the Company estimates whether there is objective evidence of impairment of
particular asset or a group of assets.
22
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
10.12.1 Assets recognized according to amortised cost
If there are indications of impairment of loans and receivables measured at amortized cost, the amount of the
impairment loss is equal to the difference between the carrying amount of the financial asset and the current value
of the estimated future cash flows (except for future losses not yet incurred resulting from failure to recover certain
receivables), discounted using the original (i.e. determined at initial recognition of the asset) effective interest rate.
The carrying amount of an asset is reduced by calculating impairment write-off. The amount of loss is recognized
under profit or loss. The Company first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant, and individually or collectively for financial assets that are not
individually significant. Should the analysis performed imply that there are no objective premises for the
impairment of a financial asset assessed individually, regardless of whether it is significant or not, the Company
includes this asset in the group of financial assets of similar characteristics related to the credit risk and performs a
joint assessment for impairment. The assets assessed individually for impairment for which the revaluation writeoff for impairment has been stated or it has been established that the existing write-off is not to be changed, are not
taken into consideration in the joint assessment of a group of assets for impairment.
If an impairment write-off decreases in the next period, and the decrease may be objectively associated with an
event that occurred after the impairment write-off, the recognized impairment write-off is reversed. The subsequent
reversal of an impairment write-off is recognized in profit or loss to the extent that the carrying amount of the asset
does not exceed its amortized cost at the reversal date.
10.12.1 Financial assets recognized according to cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not
carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and
has to be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is measured
as the difference between the carrying amount of the financial asset and the present value of the estimated future
cash flows discounted at the current market rate of return for a similar financial asset.
10.12.3 Financial assets classified as held for sale
In the event when there are objective reasons indicating that a financial assets available for sale might be impaired,
then the amount constituting the difference between a purchase price of such asset (less any principal payment and
capitalization) and its current fair value, less any impairment write-down against such asset recognized in profit or
loss, is derecognized from equity and transferred to profit or loss. The reversal of the impairment write-off of the
financial instruments classified as available for sale cannot be recognized in the financial result. If the fair value of
the debt instrument available for sale increases during the next period and this increase can be objectively associated
with an event following the recognition of the impairment write-off in the financial result, then the amount of the
reversed impairment write-off is disclosed in the financial result.
10.13. Hedges
When applying hedge accounting, hedges are classified as:
•
fair value hedges against changes in fair value of a recognized asset or liability, or
•
cash flow hedges against changes in cash flows that may be attributed to a concrete type of risk related to a
disclosed asset, liability or a projected transaction, or
•
a hedge of a net investment in a foreign operation (entity).
A hedge of the foreign currency risk of the likely future liability is settled as the hedging of cash flows.
At the time when the hedge is established, the Company formally appoints and documents the hedging relationship
as well as the risk management objective and strategy for undertaking the hedge. The documentation includes
identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and
how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged
item’s fair value or cash flows attributable to the hedged risk. It is expected that the security is going to be highly
effective in compensating for changes of the fair value or cash flows resulting from the risk being secured. The
hedging effectiveness is evaluated on a regular basis in order to check whether it is highly effective in all reporting
periods for which it has been established.
10. 13.1 Fair value hedge
The fair value hedge is a hedge of the exposure to a change in fair value of a recognized asset, or liability, or of an
unrecognized probable future liability or a separated part of such asset, liability or probable future liability which
can be attributed to a given type of risk and which can affect a profit and loss account. In the case of fair value
hedge, the carrying amount of a hedged item is adjusted by profits and/or losses on fair value changes resulting from
23
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
the hedged risk, while the hedging instrument is carried at fair value, and profits and losses on the hedge instrument
and on the hedged item are related to the profit and loss account.
If the unrecognized reasonably anticipated liability is assigned as hedged item, future joint changes in fair value of
the reasonably anticipated liability resulting from hedged risk are recognized as assets or liabilities, and generated
profit or incurred loss are recognized under profit or loss. The changes in the fair value of the hedging instrument
are also recognized in profit or loss.
The Company ceases to use the hedge accounting principles if a hedging instrument expires, is sold, dissolved or
executed, if the hedging fails to fulfil the hedge accounting criteria. Each adjustment of the carrying amount of the
hedged financial instrument to which the effective interest rate method is applied is subject to amortization, and the
write-offs are recognized in the profit and loss account. The amortization can commence at the moment of the
adjustment, however no later than at the moment of the ceasing
of the adjustment of the hedged item with the changes of the fair value resulting from the hedged risk.
10.13.2 Cash flow hedge
Cash flow hedges secure against the risk of changes in cash flows, which can be assigned to particular risks related
to the recognized asset or liability or with a highly likely planned transaction, and which could influence profit or
loss. The part of profits or losses related to the securing instrument, constituting an efficient security is stated in
other comprehensive income, whereas the inefficient part is stated in the profit or loss.
If planned hedged transaction then results in recognition of a financial asset or a financial liability, the related
profits or losses, which were recognized in other comprehensive income and accumulated in equity, are carried over
to the profit and loss account in the same period or periods in which the acquired asset or liability has an effect on
the profit or loss.
If a hedge of a forecast transaction subsequently results in the recognition of a nonfinancial asset or a non-financial
liability, or a forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for
which fair value hedge accounting is applied, then the Company removes the associated gains and losses that were
recognized directly in equity, and includes them in the purchase cost or other carrying amount of the asset or
liability.
Profits or losses generated in result of changes in fair value of derivatives that do not meet the criteria allowing
application of special hedge accounting principles, are recognised directly in the net financial result for the current
period.
The Company discontinues hedge accounting when the underlying instrument expires or is sold, terminated or
realized, or when the hedge no longer meets the criteria for hedge accounting. In such a case, total gain or loss on
the hedging instrument, previously recognized in equity, is recognized in equity until the forecast transaction takes
place. If the Company no longer expects the forecast transaction to take place, the total net gain or loss recognized
in equity is presented in the financial result of the current period.
10.13.3 Hedges of net investments in foreign operations
Hedges of net investments in foreign operations, including cash hedges, recognized as part of investments under net
assets, are recognized similarly to cash flow hedges. Profits or losses related to the hedges connected with the
effective part of the hedge are recognised under total other income, whereas profits or losses connected with the
ineffective part of the hedge - under profit or loss. At the moment of selling the foreign entity, the amount of profit
or loss recognized earlier under other total revenues are re-qualified from equity to profits or losses as adjustments
resulting from requalification.
10.14. Inventory
Inventories are assets according to (IAS 2, item 6):
 For sale in the ordinary course of business,
 The Company presents the assets as finished materials (products) and goods. Finished goods and
materials shall be understood as products made by the Company. Goods shall be understood as
commercial goods acquired by the Company for further resale,
 Being in the process production intended for sale purposes, in the statement of the Company presented
as semi-finished products,
 In the form of materials used in the production process, during rendering services as well as used in
the sales and management process. Within the statement of the Company presented as materials.
Inventory is measured (according to IAS 2 item 9.18) in accordance with purchase prices or manufacturing costs no
higher than their net selling prices as at the balance sheet date. The achievable net sales price is the assessed sales
24
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
price made in the course of business activity, reduced by the cost of finishing and estimated costs necessary for
performing the sale.
Inventory value is based on the following:
 Materials – purchase price, whereas the outlaws are valued according to average weighted method,
 Goods - purchase price, whereas the outlaws are valued according to average weighted method,
 Finished goods – sales price is established at planned price of product manufacture, adjusted by
departures within the cumulative system, resulting in real costs of manufacturing, not higher than the
net selling price, whereas the outlaws are valued according to average weighted method,
 Semi-finished goods – sales price is established at planned price of product manufacture, adjusted by
departures within the cumulative system, resulting in real costs of manufacturing, whereas the outlaws
are valued according to average weighted method,
Manufacturing costs regarding finished good and semi-finished goods contain a part of fixed indirect costs. Other,
unspecified part of fixed indirect costs decreases the period costs, where the costs are incurred. Division into the
aforementioned parts is conducted on the basis of normal operating capacity. Normal operating capacity is
established as average production results from three months. The ratio of underutilization production capacities
constitutes the difference between normal operating capacities, verified monthly, and actually performed amount of
production in a particular reporting period.
Write-offs are created for excessive or non-tradable inventories. Verification of accumulated supplies and their
rotation is conducted quarterly on regular basis. Write-off equals the carrying amount of inventory to realizable net
selling price. Write-offs are established on the basis of specified individual criteria, taking into consideration the
company’s scope of activity.
Advances on deliveries in ‘the statement of financial position’ are recognized by the Company in item ‘Inventory’.
10.15. Trade and other receivables
Trade receivables are recognised at originally invoiced amounts, less an allowance for doubtful accounts receivable.
The allowance is estimated when recovering a certain amount of accounts receivable is no longer probable.
Other receivables include in particular advances made toward future purchases of physical non-current assets,
intangible assets and inventories. Advances are presented according to the nature of the assets to which they relate
as non-current or current assets as appropriate. As non-monetary assets, the advance payments are not discounted.
Budget receivables are presented as other non-financial assets, except for the corporate income tax receivables
which constitute the separate item in the balance sheet.
10.16. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and banks, bank deposits and securities with maturities of up to
three months. They are measured at nominal value.
10.17. Interest-bearing loans, borrowings and debt securities
At the initial recognition, all the bank loans, borrowings and debt securities are initially recognized at their fair
value, reduced by costs related to obtaining the credit or loan.
After the initial recognition, bank loans, borrowings and debt securities are measured at amortised cost on an
effective interest rate basis. While setting the depreciated cost the costs connected with obtaining the loan or
borrowing and any discount or premium related to raising the funds.
The revenues and costs are recognised in profit or loss when the liability is removed from the balance sheet and also
as a result of accounting using the effective interest rate.
10.18. Trade and other liabilities
Short term trade and other liabilities are reported at the amount that needs to be paid. Financial liabilities valued at
fair value through profit or loss include two categories: financial liabilities intended for trade and financial liabilities
originally assigned to the categories valued at fair value through profit and loss. The financial liabilities are
classified as intended for trading if they were acquired for sales purposes in the nearest future. Derivatives,
including separated embedded derivatives are also classified as held for trading unless they are designated as
effective hedging instruments The financial liabilities can be qualified at the first recognition to the categories
carried at fair value through profit and loss if the following criteria are fulfilled: (i) such qualification eliminate or
significantly reduces the incongruence of treatment when both the evaluation and the principles of recognizing the
25
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
losses and profit are subject to other regulations, or (ii) the liabilities are a part of a group of financial liabilities that
are managed and evaluated on the basis of the fair value in accordance with the documented strategy of risk
management, or (iii) the financial liabilities include the built-in derivatives that should be recognized separately. As
at 31 December 2015 non-financial assets were classified to the category at fair value through profit and loss.
Financial liabilities evaluated according to fair value by financial result are assessed according to fair value taking
into account their market value as at balance-sheet date without sales transaction costs. Changes in fair value of
these instruments are recognised under profit or loss as financial revenues or costs.
Financial liabilities which are not financial instruments measured at fair value by financial result, are measured
according to amortised cost with use of effective interest rate method.
The Company derecognises a financial liability when the liability has expired, that is when the contractual
obligation has been met, forgiven or expired. The replacement of the previous debt instrument by an instrument
with substantially different terms and conditions between the same entities of the Company is recognized as the
expiration of the original financial liability and the recognition of a new financial liability. Similarly, significant
modifications of the contractual provisions concerning an existing financial liability are recognized by the Company
as the expiration of the original financial liability and the recognition of a new financial liability. The differences of
respective carrying amounts related to the exchange are recognized in the profit and loss account.
Other non-financial liabilities include especially liabilities towards the Tax Office on account of taxes on goods and
services and liabilities on account of received advance payments, which will be settled by the supplier of goods,
services or fixed assets. Other non-financial liabilities are stated in the payable amount due.
10.19. Provisions
Provisions are established whenever the Company has a present obligation as a result of past events and when it is
probable or highly probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and the amount of such obligation can be reliably estimated. If the Company expects that the costs
covered by the provision are to be returned, for instance pursuant to an insurance agreement, the return is
recognized as a separate asset, yet only when it is virtually certain that the return will actually take place. Costs
related to a given provision are disclosed in the statement of comprehensive income less any received
reimbursements.
Where the effect of the time value of money is material, the balance of the provision is determined by discounting
projected future cash flows to their present value using the gross discount rate, which reflects current market
assessment of the time value of money and of the probable risk related to the liability. If the discounting method is
applied, the increase of provisions with time is recognized as external financing costs.
10.20. Employee benefits
According to the company remuneration schemes, employees of the Company are entitled to jubilee bonuses and
retirement benefits. Jubilee bonuses are payable to those employees who worked a specified number of years.
Retirement benefits are payable on a one-off basis, when an employee retires. The amount of retirement benefits
and jubilee bonuses depends on the number of years of service and an employee’s average remuneration. The
Company creates provisions for prospect jubilee bonuses and retirement benefits liabilities and allowances in lieu of
leave in order to assign the costs to periods, they refer to. In accordance with IAS 19, jubilee bonuses are long-term
employee benefits and retirement benefits are classified as post-employment benefit plans. The present value of
those liabilities is estimated at the end of each reporting year by an independent actuary. Accrued liabilities equal to
discounted payments which are to be made, including employee turnover and refer to the period of the balance sheet
date. Demographic data and information on employee rotation are based on historical records.
Reassessment of liabilities due to employee benefits related to defined benefit plans covering actuarial gains and
losses is recognized in other comprehensive income and is not subject to subsequent reclassification to profit and
loss.
The Company recognizes the following changes in net liabilities in respect of defined benefit plan within cost of
sales, general administrative expenses as well as selling costs comprising the following:
•
employment costs (including current employment expenses, past employment expenses)
•
net interest on the defined benefit net liability
10.21. Revenues
Revenues are recognized at such an amount for which it is likely that the Company will receive the economic
benefits of the transaction concerned and if the revenue amount can be reliably measured. Revenues are recognised
at fair value of received or due payment, after deducting VAT tax and discounts. For revenue recognition the
following criteria are also used.
26
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Sales of products, goods and materials
Revenue is recognized if significant risk of and benefits from the ownership rights to goods for resale and products
have been transferred to the purchaser, and revenue amount may be reliably estimated.
Interest
Interest income is recognised on an accrual basis (with the effective interest rate method, which is the rate precisely
discounting future cash inflow over the estimated useful economic life of financial instruments) up to net carrying
value of a given financial asset.
Dividends
Dividends are recognized when the shareholders’ right to receive payment is established.
Revenues from rental (operating lease)
Revenues from rental of on investment real estate is recognized on a straight-line basis within the rental period with
regard to the contracts in progress.
Government grants
The government grants are recognized at fair value if there is reasonable assurance that the grant will be obtained
and the entity will comply with the conditions attached to it.
If the grant relates to an expenditure, it is recognized as income over the period necessary to match it with the
related costs which the grant is intended to compensate. If the grant concerns assets, its fair value is recognized as
deferred income and on a systematic basis recorded in the profit and loss over the estimated useful life of the
underlying asset.
10.22. Taxes
Current tax
Liabilities and receivables on current tax for current period and previous periods are measured in the amount of
foreseen payment for the benefit of tax bodies (subject to return from tax bodies) with application of tax rates which
legally or factually have been binding as at the balance sheet date.
Deferred tax
For the purpose of financial reporting, deferred tax is provided, using the liability method, on all temporary
differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax provisions are established in relation to all positive temporary differences – except for
situations when a deferred tax provision arises from initial recognition of goodwill or initial recognition of an asset
or liability on a transaction other than combination of businesses, which at the time of its conclusion has no
influence on pre-tax profit, taxable income or tax loss, as well as in relation to positive temporary differences arising
from investments in subsidiary or associated companies or from
interests in joint ventures – except for situations when the investor is able to control the timing of reversal of such
temporary differences and when it is probable that such temporary differences will not be reversed in the
foreseeable future.
Deferred income tax assets are recognized in relation to all negative temporary differences, as well as unutilized
deferred tax assets or unutilized tax losses carried forward to subsequent years, in such amount that it is probable
that future taxable income will be sufficient to allow the above-mentioned temporary differences, assets or losses to
be utilized.
•
this does not apply to situations when the assets resulting from the deferred tax with regard to negative
temporary differences are generated as a result of the initial recognition of an asset or a liability for the
transaction which neither constitutes a business combination nor, upon its conclusion, influences the gross
financial result or the revenue to be taxed or tax loss; and
•
in the case of negative temporary differences arising from investments in subsidiaries, affiliates or joint
ventures, deferred tax assets are recognized in the balance sheet only to the extent it is probable that in the
foreseeable future the aforesaid temporary differences will be reversed and taxable income will be generated,
which will enable the negative temporary differences to be offset.
The balance sheet value of a deferred tax asset is verified at each balance sheet date and is subject to a respective
27
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
decrease by the amount which corresponds to the lesser degree of the probability of generating taxable income or
partial or total realization of a deferred tax asset. An unrecognised deferred tax asset is re-assessed as at each
balance sheet date, and recognised up to the amount which reflects the probability to derive in future such taxable
income that will allow recovering the asset in question.
Deferred tax assets and deferred tax provisions shall be measured using the future tax rates anticipated to be
applicable at the time when a deferred tax asset is realized or a deferred tax provision is reversed, the basis for
which shall be the tax rates (and tax regulations) legally or factually in force at the balance sheet date.
The income tax on items registered outside profit and loss is recognized outside profit and loss: in other
comprehensive income for items included in other comprehensive income or directly in the corporate capital for
items included directly in the corporate capital.
The Company offsets deferred income tax assets against deferred income tax liabilities only and exclusively when it
holds an enforceable title to offset receivables against current income tax liabilities, and when the deferred income
tax is related to the same taxpayer and the same tax authority.
Goods and services tax
Revenues, expenses, assets and liabilities are recognized after deducting the tax on goods and services, except for:
where tax on goods and services incurred on purchase of assets or services is not recoverable from the taxation
authority, in which case value added tax is recognized as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
liabilities and receivables, which are recognized with the tax on goods and services.
The net amount of the goods and services tax payable to fiscal authorities, is recognized in the balance sheet as part
of receivables or liabilities.
10.23. Net earnings per share
Net earnings per share for each reporting period is calculated as the quotient of the net profit for the given
accounting period and the weighted average of shares in that period.
11.Operating segments
For the management purposes the Company has been divided into parts, based geographical target markets.
Hence, the following reportable operating segments have been identified:
Poland
Ukraine
Belarus
Russia
Moldova
Other
The management monitors the operating results of business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on operating profit
or loss. Financing of the Company (including finance costs and revenues) and corporate income tax are monitored
at the Company’s level and is not allocated to segments.
Transactional prices are applied for transactions among operating segments and fixed at arm’s length basis as in
transactions with non-related entities.
Segment outcome is calculated by reducing own cost of sale and part of cost sale from revenues from sales (mainly
marketing and transportation costs), attributable to particular segments.
Unallocated expenses include total overheads, as well as this part of sale costs which cannot be attributed directly to
individual segments.
The purpose of calculating outcome in individual segments is to evaluate each separate market, and indicate
direction of actions as well as marketing and commercial activities.
Individual items of liabilities and receivables, which have been attributed by the Entity to a individual segment, are
subject to analysis of the Management. The main criteria, upon which the Company attributes the carrying amounts
to individual segments, is an operation territory of the Company’s customers.
Segments by products and services have been presented in the management’s report.
28
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Continued
operations
Segments’ results the
Discontinued
operations
Total
operations
Year ended as at
31 December 2015
Poland
Ukraine
Belarus
Russia
Moldova
Other
total
-
Segment revenues
425 278
21 492
23 312
9 159
8 253
9 315
496 809
Total segment revenues
425 278
21 492
23 312
9 159
8 253
9 315
496 809
496 809
89 685
6 349
10 889
3 512
3 354
2 608
116 397
116 397
Segment results
496 809
Non-allocated costs
72 311
Other operating revenue
1 464
Other operating expenses
2 370
Net loss on discontinued operations
-
Profit from operating activity
43 180
Financial revenues
30 852
Financial expenses
8 917
Profit before tax
65 115
Income tax
6 899
Net profit
58 216
Other information regarding segments for the year ended as at 31 December 2015
Segment’s assets
Trade and other receivables
Investment in other entities
Unallocated Company’s assets
Segment’s liabilities
Trade and other liabilities
Unallocated Company’s liabilities
Poland
Ukraine
Belarus
Russia
Moldava
Other
Total
54 614
17 628
5 191
731
500
1 910
306 286
54 251
363
859
16 769
38 000
38 000
2 648
2 543
-
710
21
-
-
-
500
11
11
1 910
3
3
60 878
19 696
225 712
5 025
5 025
306 286
43 039
263 247
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Total
operations
Total
operations
Total
operations
Segments’ results the year ended as at 31
December 2014
Poland
Ukraine
Belarus
Russia
Moldava
Other
Total
Segment revenues
393 771
27 940
34 360
12 168
10 124
7 670
486 033
486 033
Total segment revenues
393 771
27 940
34 360
12 168
10 124
7 670
486 033
486 033
89 685
6 349
10 889
3 512
3 354
2 608
116 397
116 397
Segment results
Non-allocated costs
75 271
Other operating revenue
333
Other operating expenses
4 141
Net loss on discontinued operations
-
Profit from operating activity
37 318
Financial revenues
2 983
Financial expenses
9 670
Profit before tax
30 631
Income tax
5 992
Net profit
24 639
Other information regarding segments for the year ended as at 31 December 2014
Segment’s assets
Trade and other receivables
Investment in other entities
Unallocated Company’s assets
Segment’s liabilities
Trade and other liabilities
Unallocated Company’s liabilities
Poland
Ukraine
Belarus
Russia
Moldova
Other
Total
55 046
17 771
7 342
22
598
2 809
309 365
55 041
5
1 002
16 769
29 495
29 495
4 799
2 543
1
21
14
-
14
598
3
3
2 809
-
-
64 250
19 338
225 777
4 225
4 225
309 365
33 737
275 628
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
12. Revenues and costs
12.1. Other operating revenue
the year ended as at 31
December 2015
the year ended as at
31 December 2014
208
214
1
21
19
17
23
14
881
332
67
1 464
333
Compensations
Subsidies
Tangible current assets acquired free of charge
Refund of court proceedings
Movement in inventories
Other
Other operating revenue
-
12.2. Other operating expenses
the year ended
31 December 2015
the year ended
31 December 2014
484
-
528
519
29
151
Donations
Compensations, fines, penalties
616
203
453
884
Costs related to compensations
11
27
Provision for retirement benefits
309
193
Costs related to removal of fortuitous events
124
140
Nonculpable shortages in equity
14
9
Long-term receivables
Inventory costs and scrapping
17
442
1 145
Other
121
26
2 370
4 141
the year ended
31 December 2015
30 318
the year ended
31 December 2014
1 970
442
687
34
58
323
3
30 852
2 983
Impairment loss on receivables
Impairment loss on inventories
Loss on sales of tangible fixed assets
Other operating expenses
12.3 Financial revenues
Dividends and profit shares
Revenues from bank interest and loans
Profit from sales of investment
Other financial revenues
Total financial revenues
66
32
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
On 23 December 2015 the Company was paid a dividend in the amount of PLN 30.1M from its subsidiary - TM Investment Sp. z o.o.
12.4. Financial expenses
the year ended
31 December 2015
the year ended
31 December 2014
Interest on bank loans and borrowings
3 943
3 680
Foreign exchange differences
4 974
5 990
Total financial expenses
8 917
9 670
12.5 Expenses by type
the year ended as at
31 December 2015
Depreciation/amortization
12,6
Consumption of materials and energy
Third party services
Taxes and charges
Costs of employee benefits
Other types of expenses
Value of sold goods and materials
Expenses by type total, including
Items recognized in cost of sales
Items recognized in selling costs
Items recognized in general administrative costs
Change in finished goods
Cost of manufacturing products for own purposes of the entity
12,7
16 722
265 908
57 617
2 019
48 324
22 777
40 241
413 417
270 865
90 285
51 321
6 465
(5529)
the year ended as at
31 December 2014
15 767
259 733
54 315
1 868
44 922
25 622
44 458
402 227
267 916
86 929
46 843
(1466)
1 985
33
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
12.6. Depreciation expenses, impairment losses, foreign exchange differences and inventory
recognized in profit and loss
the year ended as at 31
December 2015
the year ended as at 31
December 2014
6477
536
6 489
3
532
4 149
492
3 974
155
4 939
179
4 493
121
Items recognized in cost of sales:
Depreciation of fixed assets
Depreciation of intangible fixed assets
Depreciation of investment properties
Items recognized in selling costs
Depreciation of fixed assets
Depreciation of intangible assets
Items recognized in general administrative costs
Depreciation of fixed assets
Depreciation of intangible fixed assets
12.7. Costs of employee benefits
the year ended as at the year ended as at
31 December 2015
31 December 2014
Remuneration
Social insurance costs
Other employee benefits
39 362
7 006
1 956
36 819
6 388
1 715
Total costs of employee
benefits, including:
48 324
44 922
Items recognized in cost of sales
Items recognized in selling costs
Items recognized in general administrative costs
14 492
1 601
32 231
13 161
1 507
30 254
13. Other comprehensive income
Other comprehensive income was the following:
the year ended as at
31 December 2015
Actuarial (losses) profits
435
the year ended as at
31 December 2014
(262)
34
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
14. Income tax
14.1. Tax burden
Major components of income tax burden for the year ended 31 December 2015 and 31
December 2014 are as follows:
the year ended as at
31 December 2015
the year ended as at
31 December 2014
6 749
6 749
6 034
5 932
Deferred tax income
150
102
(42)
Related to certain and reversal of
transitional differences
150
(42)
6 899
5 992
Recognized under profit or loss
Current income tax
Current income tax burden
Adjustments regarding current
income tax in previous years
Tax burden recognized under profit or loss
14.2. Reconciliation of effective tax rate
Reconciliation of income tax on profit before tax at the statutory tax rate with income tax computed
at the effective tax rate of the Company for the year ended as at 31 December 2015 and 31
December 2014 is as follows:
35
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Gross profit / (loss) before tax on continued
operations
Gross profit / (loss) before tax on discontinued
operations
Other comprehensive income
Gross profit / (loss) before tax
Statutory income tax rate in Poland,
(19% (2014: 19%)
Non-deductible costs including
Representation costs
Donations
PEFRON
Inventory costs and scrapping
Compensations, fines, penalties
Costs of subsidies received
Other
Revenues not subject to taxation, including:
Dividends*
Subsidies
Other
Deducted donations (art. 18)
Loss from previous years subject to deduction
Tax adjustment from previous years
Total income tax recognized in the statement of
comprehensive income
Tax according to effective tax rate of 10,72 %
(2014: 19.56%)
the year ended as
at 31 December 2015
the year ended as
at 31 December 2014
65 115
30 631
435
65 550
(262)
30 369
12 455
5 770
345
98
419
74
117
43
31
86
20
36
39
175
28
17
(5 796)
(5 760)
(36)
(104)
(385)
(358)
(27)
86
-
102
6 899
5 992
6 899
5 992
36
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
4.3. Deferred tax income
Statement of financial position
31 December 2015
Deferred tax provisions
- difference between tax and balance
value of fixed assets
interests on loans granted, not paid yet
- fixed assets under leasing
- leasing receivables
- external financing capitalized costs o
- other
Deferred tax provisions
Deferred tax assets
- revaluation write-offs
- impairment loss on inventory
- impairment loss on investment
property
- leasing liabilities
- provision for retirement, jubilee
awards and disability benefits
- fixed assets under leasing
- costs of auditing the financial
statement
- remuneration costs
- bonuses for customers
- receivables on sale of shares
- costs settled in time
-interest on loans, borrowings and
liabilities
- other
Deferred tax assets
Deferred income tax liability
Deferred tax assets and provisions
Statement of comprehensive income
31 December 2014
4 434
31 December 2015
4 322
31 December 2014
112
6
13
-
1
1
309
27
471
27
162
261
6
227
6
5 010
5 054
569
485
(84)
116
284
168
483
483
52
(142)
(34)
(39)
7
44
(103)
(72)
(91)
27
27
53
342
366
24
(87)
258
418
160
(110)
21
21
393
240
(153)
71
9
11
1
84
18
1
75
7
(1 )
1
60
34
9
5
8
29
1
25
6
2 246
2 764
2 440
2 614
194
(150)
-
(145
42
-
15. Social assets and Social Fund Liabilities
The Act of 4 March 1994 on the Company Social Fund as amended, states that the Company Social
Fund is established by employers, whose full time employees’ number exceeds 20. The Company
has established such Fund and makes periodic allocations to it in the basic amount.
The aim of the Fund is to finance social operations, loans granted to its employees and other social costs.
The Company compensated the assets of the Fund from its liabilities towards the Fund, since the assets do not
constitute separate assets of the Company. Accordingly, the net balance sheet as at 31 December 2015 and 31
December 2014 amounted to PLN 0.00
31 December
2015
Fixed assets contributed to the Fund
Loans granted to employees
31 December 2014
-
-
37
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Cash
Fund liabilities
228
335
149
179
(377)
(514)
-
Balance sheet after compensation
the year ended as
at 31 December
2015
Fund write-offs in the fiscal year
924
The tables below
present the analysis of
assets, liabilities and
costs of the Fund.
-
the year ended as
at 31 December 2014
906
38
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
16. Earnings per share
Basic earnings per share are calculated by dividing net profit for the financial period attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares outstanding during the
financial period. The weighted average number of ordinary shares equalled to all shares i.e. 12 617 778 shares
between the period of 1 January 2015 and 31 December 2015.
The data on share gains have been presented below, which stipulated a basis to calculate basic and diluted
earnings per share: year ended as at 31 December 2014
the year ended as at
the year ended as at
31 December 2015
31 December 2014
Profit from continued operations
Profit /loss from discontinued operations
58 216
Net profit
58 216
24 639
-
24 639
the year ended as at
the year ended as at
31 December 2015
31 December 2014
Weighted average of issued ordinary shares
applied to basic calculation of the profit
per share
Profit per share in PLN
12 617 778
12 617 778
4,61
1,95
IN THE PERIOD BETWEEN THE BALANCE-SHEET DATE AND THE DATE OF PRODUCTION HEREOF NO
TRANSACTIONS WERE REPORTED WHICH WOULD BE RELATED TO ORDINARY SHARES OR POTENTIAL
ORDINARY SHARE
17. Dividends paid and proposed
Dividends on the ordinary shares for 2014, paid on 3 July 2015 amounted to PLN 39,115,000 (for 2013, paid on 1 July
2014: PLN 31,544,000).
The value of dividend per ordinary share paid in 2014 amounted to PLN 3,10 (for 2013: PLN 2.50). In the Company the
very same amount of dividend per 1 share is attributable to both ordinary and preference shares.
39
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
18. Property, plant and equipment
The year ended as at 31 December 2015
Lands, buildings and
structures
Net value as at 1 January 2015
Additions from acquisition of property
Decrease due to disposal or liquidation
Transfer between groups to investment
properties
Fixed assets under lease
Amortization
Adjustment of PP&E value due to business
combination
Net values as at 31 December 2015
Net value as at 1 January 2014
Additions from acquisition of property
Decrease due to disposal or liquidation
Transfer between groups to investment
properties
Fixed assets under lease
Amortization
Adjustment of PP&E value due to business
combination
Net value as at 31 December 2014
Machinery and devices
Net carrying amount
As at 31 December 2015
Gross carrying amount
Value of fixed assets held for sale
Total accumulated depreciation and impairment
losses less the liquidated and sold non-current
assets
Net carrying amount
Other fixed assets
Total
30 619
8 143
(58)
8 719
1 891
(421)
8 467
723
(25)
127 454
11 561
(569)
(3 401)
(6 963)
(1 916)
(3 284)
(15 564)
76 987
31 741
8 273
5 881
122 882
74 283
8 610
(44)
34 300
4 875
(114)
7 581
3 170
(332)
9 637
1 868
-
125 081
18 523
(490)
(107)
-
-
-
(3 093)
(1 317)
(7 125)
(1 700)
(3 038)
(107)
(1 317)
(14 956)
0
79 649
0
30 619
8 719
8 467
127 454
Lands, buildings and
structures
As at 1 January 2015
Gross carrying amount
Value of fixed assets held for sale
Total accumulated depreciation and impairment
losses less the liquidated and sold non-current
assets
Means of transport
79 649
804
(65)
Machinery and
devices
Means of transport
Other fixed assets
Total
101 801
-
91 285
-
16 331
-
17 080
-
226 497
-
(22 152)
79 649
(60 666)
30 619
(7 612)
8 719
(8 613)
8 467
(99 043)
127 454
102 438
-
96 813
-
16 788
-
17 671
-
233 710
-
(25 451)
76 987
(65 072)
31 741
(8 515)
8 273
(11 790)
5 881
(110 828)
122 882
40
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
As at 1 January 2014
Gross carrying amount
Gross carrying amount
Value of fixed assets held for sale
93 371
90 466
14 233
15 223
-
-
-
(19 088)
74 283
0
(56 166)
34 300
0
(6 652)
7 581
(5 586)
9 637
0
(87 492)
125 801
101 801
91 285
16 331
17 080
226 497
-
-
-
(60 666)
30 619
(7 612)
8 719
(8 613)
8 467
Total accumulated depreciation and impairment
losses less the liquidated and sold non-current
assets
Net carrying amount
As at 31 December 2014
Gross carrying amount
Gross carrying amount
Value of fixed assets held for sale
Total accumulated depreciation and impairment
losses less the liquidated and sold non-current
assets
Net carrying amount
-
(22 152)
79 649
31 December 2015
PROPERTY, PLANT AND EQUIPMENT
a) fixed assets, including:
- lands (including right of perpetual usufruct of land)
- buildings, premises and civil engineering structures
- technical machinery and equipment
- means of transport
- other fixed assets
b) fixed assets under construction
c) advances on fixed assets under construction
Total tangible fixed assets
122 882
1 087
75 900
21 741
8 273
5 881
8 772
410
132 064
213 293
-
-
(99 043)
127 454
31 December 2014
122 454
1 087
78 562
30 619
8 719
8 467
4 713
369
132 536
As at 31 December 2015 the Company does not hold tangible fixed assets under financial leasing or hire purchase
contracts (as at 31 December 2014 the Company held such assets, their value amounted to PLN 144,000).
As at 31 December 2015, the pledges on the fixed assets as a liability security of bank loans, amounted to PLN 17 666
000, whereas collateral mortgages on properties of the Company, as at 31 December 2015 amounted to PLN 128 250
000.
Outlays on fixed asset under construction in 2015 amounted to PLN 15 904 000 (whereas in 2014 the outlays amounted
to PLN 17 049 000). The value of capitalized costs of external financing in the fiscal year ended as at 31 December 2015
amounted to PLN 220 000 ( the year ended as at 31 December 2014 the value of capitalized costs of external financing
amounted to PLN 240 000).
41
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
19. Leasing
19.1. Liabilities under financial leasing and lease agreements with a purchase option
As at 31 December 2015 and as at 31 December 2014 subsequent minimal leasing charges under financial leasing
agreements and the current amount of minimal net lease payments are as follows
Subsequent minimal leasing charges under
financial leasing agreements
31 December 2015
Min. Payments
Payable within 1 year
Payable from 1 to 5 years
Over 5 years
Total subsequent minimal leasing charges
under financial leasing
Financial expenses
Current amount of min. payments under
financial leasing
31 December 2014
current value of
payments
Min. Payments
current value of
payments
-
-
129
-
126
-
-
-
129
3
126
-
-
-
126
126
19.2. Receivables under financial leasing and lease agreements with a purchase option
As at 31 December 2015 subsequent minimal leasing charges under financial leasing agreements and the current
amount of minimal net lease payments are as follows:
Subsequent minimal leasing charges under
financial leasing agreements
Payable within 1 year
Payable from 1 to 5 years
Over 5 years
Total subsequent minimal leasing charges
under financial leasing
Financial expenses
Current amount of min. payments under
financial leasing
31 December 2015
31 December 2014
Min. Payments
current value of
payments
901
983
-
751
873
-
1 103
1 867
-
862
1 618
-
1 884
260
1 624
-
2 970
490
2 480
-
1 624
1 624
2 480
2 480
Min. Payments
current value of
payments
42
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
20. Investment properties
31 December 2015
31 December 2014
11 821
386
-102
-536
11569
12 246
107
Opening balance as at 1 January
Additions from acquisition of property
Decrease due to disposal
Depreciation/amortization
Impairment write-offs
Closing balance as at 31 December
-532
11 821
In the year ended as at 31 December 2015 revenues from lease of investment properties amounted to PLN 1 031
000 (whereas in the year ended as at 31 December 2014: PLN 1 043 000). Direct operating expenses related to
investment properties in the year ended as at 31 December 2015 amounted to PLN 698 000, (including costs,
which contributed to income from lease amounted to PLN 602 000, whereas other costs amounted to PLN 96
000). In the year ended as at 31 December 2014 direct operating expenses amounted to PLN 698 000).
In the year ended as at 31 December 2015 the Company acquired a property in Chojnice for PLN 386,000 and
disposed of investment property in Żabiniec of PLN 102,000 value.
21. Intangible assets
The year ended as at 31 December 2015
Patent and
licences
Goodwill
Net value as at 1 January 2015
Additions from acquisition of property
Decrease due to disposal or liquidation
Amortisation
Foreign exchange differences
other changes
Net value as at 31 December 2015
Net value as at 1 January 2014
Additions from acquisition of property
Decrease due to disposal or liquidation
Amortization
Foreign exchange differences
Other changes
Net value as at 31 December 2014
Other
intangible
assets
Development
costs
Total
-
1 288
726
(672)
1 342
-
-
1 288
726
(672)
1 342
-
374
1 164
(250)
1 288
111
(82)
(29)
-
-
485
1 164
(82)
(279)
1 288
43
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
As at 1 January 2015
Gross carrying amount
Total accumulated depreciation and
impairment losses less the liquidated and sold
non-current assets
Net carrying amount
As at 31 December 2015
Gross carrying amount
Total accumulated depreciation and
impairment losses less the liquidated and sold
non-current assets
Net carrying amount
As at 1 January 2014
Gross carrying amount
Total accumulated depreciation and
impairment losses less the liquidated and sold
non-current assets
Net carrying amount
As at 1 December 2014
Gross carrying amount
Total accumulated depreciation and
impairment losses less the liquidated and sold
non-current assets
Net carrying amount
-
4 120
-
200
4 320
-
(2 832)
1 288
-
(200)
-
(3 032)
1 288
-
4 263
-
-
4 263
-
(2 921)
-
-
(2 921)
1 342
-
-
1 342
-
2 956
318
200
3 474
-
(2 582)
374
(207)
111
(200)
-
(2 989)
485
-
4 120
-
200
4 320
-
(2 832)
-
(200)
(3 032)
1 288
-
-
1 288
31 December 2015
Intangible assets
a) Costs of development completed
b) acquired concessions, patents, licences and
similar assets, including:
computer software
c) other intangible assets
d) intangible assets under construction
e) advances for intangible assets
Total intangible assets
1 342
1 342
34
1 376
31 December 2014
1 288
1 288
130
1 418
As at 31 December 2015 the intangible fixed assets were not subject to liability pledges. Outlays on intangible
assets in 2015 amounted to PLN 629 000 (whereas in 2014, PLN 358 000). As at 31 December 2015 the balance
of intangible assets under construction comprise outlays on implementing a laboratory system in the amount of
PLN 34,000.
The Company tested these assets for impairment and stated that it was not necessary to make impairment writeoff with respect to the said assets.
44
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
22. Financial assets classified as held for sale
Financial assets classified as held for sale cover shares in unrelated entities Assets were measured at acquisition
price. As at 31 December 2015 and 31 December 2014 the value of the aforementioned assets is presented in the
table below.
31 December 2015
Shares/stocks in companies
not listed on stock market
Shares of companies listed on stock market
Total
31 December 2014
358
58
-
-
358
58
The parent company holds 10.07% shares in Plastbud Sp z o.o. company. The value of shares amounts to PLN 48
000. The entity holds shares in Podkarpacki Bank Spółdzielczy, the carrying amount of the shares as at 31
December 2015 amounted to PLN 10,000, and shares in Grupa Polskie Składy Budowlane SA, the carrying
amount of the shares amounted as at 31 December 2015 to PLN 300,000. In 2015 the Company acquired 100
shares in Grupa Polskie Składy Budowlane SA at the amount of PLN 300,000.
23. Others assets
23.1. Other financial assets
The table below presents financial assets classified as held for sale, shares and other financial assets as at 31
December 2015 and the comparable period.
31 December 2015
31 December 2014
19 246
19 396
18 888
18 888
- shares and stocks in other entities
-
-
- financial assets available for sale.
358
58
0
450
Other short-term financial assets
450
8
- loans granted to related entities
450
8
-
-
19 696
19 404
Shares and stocks and other long-term
assets, and financial assets classified as
held for sale,
Shares and stocks in related entities
- loans granted to related entities
- loans granted to other entities
- other short-term financial assets
Total
45
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
In 2015 the Company was paid dividend by one of subsidiaries in the amount exceeding the total
comprehensive income generated by this entity in 2015. In accordance with IAS 36 this situation is objective
evidence of impairment on asset, including shares in this subsidiary. Accordingly, the Company tested these
assets for impairment. The test result confirmed that as at 31 December 2015 the reduction in the value of
shares in said subsidiary did not occur.
The table below presents loans granted by the Company.
31 December 2015 31 December 2014
Loans granted
Other receivables
Total
- short-term
- long-term
450
458
450
458
450
-
450
8
A loan for Śnieżka-BELPOL Wspólna Sp. z o.o in the amount of PLN 450 000 with fixed interest rate of 7 %,
the deadline of repayment of the loan was established until 30 June 2016.
23.2. Other non-financial assets
As at 31 December 2015 the Company in item „Other non-financial assets” recognized the following accrued
expenses at the total amount of PLN 829 000.
31 December 2015
Insurances
Marketing services
Advertises
Other non-financial assets
Total
short-term
long-term
31 December 2014
359
47
88
436
930
429
25
183
637
930
-
637
-
24. Employee benefits
24.1. Retirement and other post-employment benefits
The entity pays retirement bonuses to its retiring employees in the amount provided for in the Labour Code In
connection with the above, the Company forms provisions for current amount of liabilities to due to retirement
bonuses, by virtue of the estimation executed by professional actuary company. The table below summarizes the
amounts of the provision and movements in the benefit liability over the period:
46
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
31 December 2015
31 December 2014
As at 1January
Provision utilization
Provision creation
1927
311
184
1470
245
702
As at 31 December
- long-term part
- short-term part
1800
1262
538
1927
1524
403
MAIN ASSUMPTION ADOPTED BY THE ACTUARY AS AT THE BALANCE SHEET DATEFOR CALCULATING
LIABILITIES ARE AS FOLLOWS
Retirement and
disability benefits
Death benefits
Opening balance as at 1
January 2015
Current employment expenses
Actuarial gains, losses
Benefits paid
Post-employment expenses
Interest expenses
Closing balance as at 31
December 2015
SHORT-TERM PROVISIONS
LONG-TERM PROVISIONS
Allowances in
lieu of awards
leave
Jubilee
Total
612
64
(138)
(21)
15
853
102
(258)
(18)
21
236
35
(39)
(46)
4
226
378
(226)
-
1 927
579
-435
(311)
0
40
532
47
485
700
52
648
190
61
129
378
378
-
1800
538
1262
47
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Allowances in lieu
of awards leave
Retirement and
disability benefits
Opening balance as at 1
January 2014
Current employment expenses
Actuarial gains, losses
Benefits paid
Post-employment expenses
Interest expenses
Death benefits
Jubilee
Total
453
41
118
(25)
25
660
59
117
(25)
42
223
36
27
(60)
10
134
226
(134)
-
1470
362
262
(244)
0
77
612
52
560
853
50
803
236
75
161
226
226
-
1927
403
1524
Closing balance as at 31
December 2014
SHORT-TERM PROVISIONS
LONG-TERM PROVISIONS
Sensitivity analysis
Change of adopted discount rate by up to one percentage point:
Increase
Decrease
(in PLN ‘000)
(in PLN ‘000)
(221)
257
(1)
2
Effect on defined benefits
(220)
255
31 December 2014
(320)
327
(29)
(21)
(291)
348
31 December 2015
Effect on total current employment expenses and interests
Effect on total current employment expenses and interests
Effect on defined benefits
Change of remuneration increase rate up to
one percentage point.:
31 December 2015
Effect on total current employment expenses and interests
Increase
Decrease
(in PLN ‘000)
(in PLN ‘000)
286
(246)
29
(22)
Effect on defined benefits
257
(224)
31 December 2014
340
(337)
(6)
(42)
346
(295)
Effect on total current employment expenses and interests
Effect on defined benefits
48
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
25. Inventory
31 December 2015
Materials (at acquisition cost)
Production in progress (at production cost)
Finished goods:
At acquisition cost / at production cost
By net realisable value
Goods
31 December 2014
22 333
1167
38720
39 085
38 720
2 162
20 936
1306
32364
33 377
32 364
2 857
64 382
57 463
Total inventory, at the lower two values
acquisition cost (production cost) and
Net realisable value
49
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Inventories are measured at purchase prices or manufacturing costs not higher than their net selling price as at the
balance sheet date. The achievable net sales price is the assessed sales price made in the course of business
activity, reduced by the cost of finishing and estimated costs necessary for performing the sale.
The Company reviews inventories on regular quarterly basis.
Write-offs on property, plant and equipment items – inventories, are conduced:


By arriving the value of the said inventories at realizable price as at the balance sheet date, for their
disposal at reduced value,
When there is likelihood that the asset being controlled by an entity in the form of inventories is not
to result subsequently in significant, partially or wholly estimated economic benefits.
As at 31 December 2015 the Company recognized a revaluation write-off on inventories in the amount of PLN
1,493,000 and created a new write-off in the amount of PLN 612,000 (As at 2014 December 2014 the write-off
amounted to PLN 519,000).
Fixed collateral was established towards inventories of the entity which for the year ended as at 31 December
2015 amounted to PLN 17 000 000, the very same amount as year before.
26. Trade and other receivables
31 December 2015
31 December 2014
Trade and other receivables:
60 878
64 250
including related entities
including other entities
3 598
57 280
4 292
59 958
3 445
2 961
Impairment write-offs on trade
receivables
Current income
tax receivables
Other receivables
including related entities
including other entities
Impairment write-offs total other
receivables
Total receivables, including:
- long-term part
- short-term part
-
-
6 984
8 891
0
771
6 984
8 120
-
-
67 862
73 141
1 325
66 537
2 516
70 625
Transaction conditions with related entities are presented in note 34.2.
Trade and other receivables are not interest-bearing and their usual payment term is 60 days. An average length
of receivables in 2015 amounted to 50,5 days (in 2014: 48,1 days).
The Company has implemented a relevant policy based on selling its goods to reliable clients only.
Consequently, according to the management’s opinion, there is no additional credit risk that would exceed the
doubtful debts allowance recognized for trade receivables of the Company
50
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Total trade and other receivables
with remaining maturities from the balance sheet:
31 December 2015
31 December 2014
To 1 month
More than 1 month up to 3 months
More than 3 months up to 6 months
More than 6 months up to 12 months
More than 12 months
Overdue
2 898
38 755
2 518
233
1569
18 350
8 527
32 434
298
256
1817
23 879
Total gross trade and other receivables:
Impairment write-offs
64 323
3 445
67 211
2 961
Total net trade and other receivables:
60 878
64 250
Overdue receivables up to 12 months
Overdue receivables over 12 months
59 482
1 396
62 548
1 702
As at 31 December 2015 trade and other liabilities in the amount of PLN 3 445 000 (2014: PLN 2 961 000) were
considered as bad debt and, hence, written off. Changes to receivables of impairment write-off were the
following
31 December
2015
Impairment write-offs on trade at the beginning of the
period
31 December
2014
2 961
3 113
Increase
518
975
Decrease
34
1 127
3 445
2 961
Impairment write-offs on trade at
the end of the period
51
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
The table below presents trade and other receivables analysis, which as at 31 December 2015 and 2014
December 2014 were overdue but they were not considered as bad debt and were not subject to write off.
Overdue trade and other receivables
of the following overdue period
31 December 2015
31 December 2014
14 905
20 918
7 207
7 389
287
21
1
9 134
9 112
2 645
24
3
3 445
2 961
18 350
23 879
14 905
20 918
1. . Receivables not covered by impairment
write-off:
To 1 month
More than 1 month up to 3 months
More than 3 months up to 6 months
More than 6 months up to 12 months
More than 12 months
2. Receivables covered by impairment writeoff
Gross overdue trade and other
receivables
Net overdue trade and other receivables
27. Cash and cash equivalents
Cash in bank is subject to interest according to variable interest rates, which depend on the interest on daily
bank deposits. Short-term deposits are made for various periods, from one day to one month, depending on the
current needs of the Company for cash, and are subject to determined interest rates. Fair value of cash and cash
equivalents as at 31 December 2015 amounted to PLN 8 407 000 (whereas as at 31 December 2014: PLN 12
843 000).
31 December 2015
Cash in hand and bank
Short-term bank deposits
Commercial documents
Cash in hand and bank
attributable
to discontinued operation
31 December 2014
6 525
1 822 -
12 842
1
-
-
Total
8 407
12 843
28. Equity, supplementary and reserve capital
28.1. Equity
As at 31 December 2015, the Company’s equity amounted to PLN 12 617 778 comprising 12 617 778 shares of
nominal value of PLN 1,00 each. In 2015 the equity was not subject to change.
Equity capital
Registered shares of series A of
31 December 2015
100 000
31 December 2014
100 000
value of 1 PLN each
52
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
400 000
400 000
12 117 778
12 177 778
Registered shares of series B of
value of 1 PLN each
Ordinary shares of series C, D, E and F
of nominal value of 1 PLN each
Nominal value per share
All the issued shares have the nominal value of PLN 1 per share and have been fully paid.
Shareholders’ rights
Registered shares of series A and B are preferential for vote so that one share corresponds to 5 votes. Shares
of series C, D, E and F are entitled to one vote per each share. Shares of all series are equally preferred as to
dividends and return on equity.
In accordance with the Issuer’s Articles of Association, series ‘A’ shares entitle their holder to indicate a
member of the Supervisory Board in such a way, that each 25 000 of shares bear the right to indicate one such
member.
Majority shareholders
Shareholders holding over 5% of total number of votes.
As at31 December 2015
Shareholder
Number of shares held
Number of votes
Share in the total
number of votes at
GMS (%)
Share in the share
capital (%)
Jerzy Pater
2 541 667
20.14
3 208 335
21.95
including directly 166 667
2 541 667
1.32
20.14
833 335
3 208 335
5.70
21.95
including directly 166 667
1.32
833 335
5.70
Piotr Mikrut
directly 1 254 166
9.94
1 787 498
12.23
Rafał Mikrut
directly 1 254 167
9.94
1 254 167
8.58
1 250 000
9.91
1 250 000
8.55
781 669
6.19
781 669
5.35
Stanisław Cymbor**
AMPLICO OFE
Aviva OFE Aviva BZ WBK
*Jerzy Pater holds the Issuer’s shares indirectly by PPHU Elżbieta i Jerzy Pater Sp. z o.o. (PPHU Elżbieta i
Jerzy Pater Sp. z o.o. holds 2 375 000 shares of the Issuer, i.e. 18.82% share in the share capital and 16.25% in
the total votes at the General Meeting of Shareholders
** Stanisław Cymbor holds the Issuer’s shares indirectly by PPHU Iwona i Stanisław Cymbor Sp. z o.o.
(PPHU Iwona i Stanisław Cymbor Sp. z o.o. holds 2 375 000 shares of the Issuer, i.e. 18.82% share in the share
capital and 16.25% in the total votes at the General Meeting of Shareholders.
53
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
As at 31 December 2014:
Shareholder
Number of shares held
Number of votes
Share in the total
number of votes at
GMS (%)
Share in the share
capital (%)
Jerzy Pater*
2 541 667
20.14
3 208 335
21.95
including directly 166 667
2 541 667
1.32
20.14
833 335
3 208 335
5.70
21.95
including directly 166 667
1.32
833 335
5.70
Piotr Mikrut
directly 1 254 166
9.94
1 787 498
12.23
Rafał Mikrut
directly 1 254 167
9.94
1 254 167
8.58
1 250 000
9.91
1 250 000
8.55
781 669
6.19
781 669
5.35
Stanisław Cymbor**
AMPLICO OFE
Aviva OFE Aviva BZ WBK
** Stanisław Cymbor holds the Issuer’s shares indirectly by PPHU Iwona i Stanisław Cymbor Sp. z o.o.
(PPHU Iwona i Stanisław Cymbor Sp. z o.o. holds 2 375 000 shares of the Issuer, i.e. 18.82% share in the share
capital and 16.25% in the total votes at the General Meeting of Shareholders.
28.2. Supplementary capital
The Company established the supplementary capital, resulting from an obligation for joint stock companies, to
one third of its share capital, transferring 8% of net profit for a given financial year. Moreover, the Company
transfers optionally a specified part of its net profit for a financial year to increase the supplementary capital in a
given year. In 2015 supplementary capital was decreased by PLN 14 969 000, the amount was earmarked to pay
dividends for 2014.
28.3. Retained profit (loss) and dividend restrictions
According to the Code of Commercial Partnership and Companies, the Company is obliged to provide the
supplementary capital for covering future loss. To that category of capital the company transfers at least 8% of
profit for a given financial year disclosed in the statement of the company, until it reaches at least one third of
the equity. The General Meeting of Shareholders shall take decisions about use of the supplementary and
reserve capital, however, a part of the supplementary capital in the amount of 1/3 of the equity, may be used
only for coverage of the loss disclosed in the financial statement and is not subject to distribution to other
purposes.
Dividend for ordinary shares for the year of 2014, paid on 3 July 2015, amounted to PLN 39 115 000 (for 2013,
paid on 1 July 2014: PLN 31 544 000). From the profit in 2014 the dividend was paid in the amount of PLN
24,146,000, whereas the amount of PLN 14,969,000, was covered from the supplementary capital. Part of the
surplus in excess of the coverage of 1/3 of share capital was allocated to the payment of dividend from reserve
capital. The value of dividend per share paid for the year of 2014 amounted to PLN 3.10 (2013: PLN 2.50).
The Company did not pay advances for dividends in 2015 and 2014.
54
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
29. Interest-bearing loans and borrowings
31 December 2015
Loan in Banku Pekao S.A.
Interest rate
18 045
Loan in PKO BP O/Rzeszów
1M WIBOR + margin
Loan in Bank Handlowym w Warszawie S.A.
6 607
1M WIBOR /1M
LIBOR+ margin
-
3 976
1M WIBOR + margin
-
20 086
1M WIBOR /1M
LIBOR+ margin
-
Loan in PKO BP O/Rzeszów
31 December 2014
29 797
Loan in ING Bank Śląski SA - kredyt inwestycyjny
4 004
9 336
Loan in ING Bank Śląski SA
3 529
1M LIBOR + margin
11 935
Loan in DNB Bank Polska SA
2 954
1M WIBOR+ margin
13 963
1M WIBOR+ margin
Loan in DNB Bank Polska SA
1M LIBOR + margin
Loan in PBS S.A. w Sanoku
207
-
1M WIBOR+ margin
Total loans
52 801
71 638
Loans
46 621
59 361
46 621
59 361
99 422
130 999
Loan from TM INVESTMENT related entity investment loan
Total loans and borrowings
31 December 2015
31 December 2014
51 614
47 808
99 422
67 634
63 365
130 999
Short-term loans and borrowings
Long-term loans and borrowings
Total loans and borrowings
The currency structure of loans and borrowings is as follows:
PLN
USD
EUR
Total loans and borrowings
31 December 2015
31 December 2014
31 December 2015
31 December 2014
currency value
currency value
value in PLN
value in PLN
99 422
71 236
16 855
99 422
-
71 236
59 763
-
-
-
99 422
-
130 999
55
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Loan liabilities
The amount of loan/ borrowing by agreement
Loan and borrowing liabilities
The amount of loan/ borrowing outstanding
The amount of loan/ borrowing outstanding balance
balance
Name (company) along with legal form
Payment deadline
Bank Pekao S.A. O/Dębica
2016-12-18
Bank PKO BP O/Rzeszów
currency
in PLN ‘000
currency
short-term
30 000
PLN
18 045
PLN
18 045
2016-12-27
20 000
PLN
Bank PKO BP O/Rzeszów
2016-12-27
20 000
PLN
3 976
PLN
3 976
2016-03-26
500
PLN
207
PLN
207
2015-06-30
20 000
PLN
3 529
PLN
3 529
20 000
PLN
4 004
PLN
2 666
2017-02-17
30 000
PLN
20 086
PLN
20 086
Bank DNB Polska S.A. Warszawa
2016-01-29
24 000
PLN
2 954
PLN
2 954
TM Investment Sp. z o.o. Brzeźnica
2018-12-31
80 000
PLN
46 621
PLN
151
Podkarpacki Bank Spółdzielczy
in PLN ‘000
long-term
PLN
O/Dębica
ING Bank Śląski O/Katowice
14 quarterly instalments
ING Bank Śląski O/Katowice
beginning with 31-01-2013 in
1 338
the amount of PLN 1 333 000 the last instalment PLN 1 338
CITI BANK HANDLOWY S.A.
O/Kraków
Total loans and borrowings
99 422
PLN
46 470
51 614
47 808
Loan collaterals as at 31 December 2015:
Name (company) along
with legal form
Bank Pekao S.A. O/Dębica
Loan amount in
PLN ‘000
18 045
Collateral
Other
Register pledge on tangible fixed assets in the
amount of PLN 7 825 000, ownership transfer of
the said assets, contractual mortgage of total value
of PLN 30 000 000 on property in Pustkow as
loan to finance the current
well as assignment of the insurance policy, power activities.
of attorney to the current accounts of the
Company, a statement on submission to voluntary
enforcement collection
56
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Bank PKO BP O/Rzeszów
-
Bank PKO BP O/Rzeszów
Working capital facility may be
Collateral mortgage in the amount of PLN 25 000 used for current operations in
000, on the land perpetual usufruct right and
PLN, USD or EUR currencies.
ownership to buildings and equipment,
assignment of the insurance policy to the current
cash on all accounts in PKO BP,
As above
3 976
Podkarpacki Bank
Spółdzielczy O/Dębica
working capital facility
Power of attorney to the current accounts of the
Company in PBS, a blank promissory note, a
statement on submission to voluntary enforcement working capital facility
collection to the amount of PLN 1 000 000
207
ING Bank Śląski
O/Katowice
ING Bank Śląski
O/Katowice
CITI BANK
HANDLOWY S.A.
O/Kraków
Bank DNB Polska S.A.
Warszawa
TM Investment Sp. z o.o.
Brzeźnica
An assignment of receivables (liabilities covered
by assignment by the end of each quarter not
lower than 60% of the total amount of loan),
collateral mortgage in the amount of PLN 30 000
working capital facility can be
000 on the property in BiałaPodlaska, assignment
used in PLN or convertible
of the insurance policy of the property in the
currencies
amount of at least PLN 3 500 000, registered
pledge to the amount of PLN 9 000 000 on
finished goods in warehouse in Brzeźnica,
assignment of the insurance policy of the
inventory, a statement on submission to voluntary
3 529 enforcement collection
4 004 As above
loan in PLN to refinance
investment outlays
Collateral mortgage in the amount of PLN 11 250
000, on the land perpetual usufruct right of
property in Chojnice, and ownership right to part
of the commercial facility as well as a property
located in Chojnice along with as assignment of
20 086
working capital facility
the insurance policy, registered pledge to the
amount of PLN 8 000 000 on the inventory in
warehouse in Lubzina, , assignment of the
insurance policy of the said inventory, a civillegal surety of TM INVESTMENT company
Collateral mortgage in the amount of PLN 32 000
000, on the land perpetual usufruct right of
property in Lubzina, assignment of the insurance
2 954 policy of the said property, registered pledge to
working capital facility
the amount of PLN 9 841 000 on the fixed assets
along with assignment of the insurance policy,
assignment of receivables to the amount of PLN 4
000 000, a statement on submission to voluntary
enforcement collection
46 621
loan from subsidiary can be used
in PLN or convertible currencies
57
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Loan collaterals as at 31 December 2014:
Name (company) along
with legal form
Loan
amount in
PLN ‘000
6 607
Bank Pekao S.A. O/Dębica
Bank PKO BP O/Rzeszów
-
Bank PKO BP O/Rzeszów
Collateral
Other
Register pledge on tangible fixed assets in the amount of
PLN 8 800 000, ownership transfer of the said assets,
contractual mortgage of total value of PLN 30 000 000 on
property in Pustkow as well as assignment of the insurance
policy, power of attorney to the current accounts of the
Company at BPH bank, a statement on submission to
voluntary enforcement collection
loan to finance the
current activities.
Collateral mortgage in the amount of PLN 25 000 000, on the
land perpetual usufruct right and ownership to buildings and
equipment, assignment of the insurance policy to the current
cash on all accounts in PKO BP,
Working capital
facility may be used
for current operations
in PLN, USD or EUR
currencies.
As above
working capital facility
Power of attorney to the current accounts of the Company in
PBS bank, a blank promissory note, a statement on
submission to voluntary enforcement collection to the
amount of PLN 1 000 000
working capital facility
An assignment of receivables (liabilities covered by
assignment by the end of each quarter not lower than 60% of
the total amount of loan), collateral mortgage in the amount
of PLN 30 000 000 on the property in BiałaPodlaska,
assignment of the insurance policy of the property in the
amount of at least PLN 3 500 000, registered pledge to the
amount of PLN 9 000 000 on finished goods in warehouse in
Brzeźnica, assignment of the insurance policy of the
inventory, a statement on submission to voluntary
enforcement collection
working capital facility
can be used in PLN or
convertible currencies
As at 31-12-2014 the
outstanding amount
was USD 3 366 000.
As above
loan in PLN to
refinance investment
outlays
Collateral mortgage in the amount of PLN 11 250 000, on the
land perpetual usufruct right of property in Chojnice, and
ownership right to part of the commercial facility as well as a
property located in Chojnice along with as assignment of the
insurance policy, registered pledge to the amount of PLN 8
000 000 on the inventory in warehouse in Lubzina, ,
assignment of the insurance policy of the said inventory, a
civil-legal surety of TM INVESTMENT company
working capital facility
As at 31-12-2014 the
outstanding amount
was USD 8 397 000.
Podkarpacki Bank
Spółdzielczy O/Dębica
-
ING Bank Śląski O/Katowice -
ING Bank Śląski O/Katowice
9 336
CITI BANK HANDLOWY
S.A. O/Kraków
29 797
58
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Bank DNB Polska S.A.
Warszawa
Collateral mortgage in the amount of PLN 32 000 000, on the working capital facility
land perpetual usufruct right of property in Lubzina,
assignment of the insurance policy of the said property,
registered pledge to the amount of PLN 9 841 000 on the
fixed assets along with assignment of the insurance policy,
assignment of receivables to the amount of PLN 4 000 000, a
statement on submission to voluntary enforcement collection
-
Bank DNB Polska S.A.
Warszawa
13 963
TM Investment Sp. z o.o.
Brzeźnica
59 361
AS ABOVE
currency loan in
working capital facility
As at 31-12-2014 the
outstanding amount
was USD 3 938 000.
loan from the related
entity. As at 31-122014 the outstanding
amount was USD 1
154 000, PLN 55 270
000.
30. Trade and other liabilities as well as accruals
30.1. Trade and other liabilities as well as other liabilities (short-term)
Trade and other liabilities
including related entities
including other entities
Other liabilities towards related entities
Other liabilities towards other entities
- taxes, customs, insurance and other
- remuneration
- advances received for supplies
- leasing
- other
Total liabilities, including
- long-term part
- short-term part
the year ended
31 December 2015
the year ended
31 December 2014
43 072
33 737
1 004
42 068
873
32 864
75
125
6 902
6 244
3 047
3 354
50
-
2 872
42
2886
451
126
318
50 049
-
40 106
-
50 049
40 106
Transaction conditions with related entities are presented in note 35.2. An average length of liabilities
in 2015 amounted to 36,4 days (in 2014: 35,1 days). All trade and other liabilities are settled on
ongoing basis, within the statutory payment periods.
59
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
30.2. Current income tax liabilities
the year ended
31 December 2015
the year ended
31 December 2014
2 229
2 676
31 December 2015
31 December 2014
Current income tax liabilities
30.3. Accruals
Accrued expenses related to:
Bonuses
Consulting services, audits
Accrued
expenses
revenues:
Subsidies
Total
- short-term
- long-term
related
93
110
150
110
75
278
278
82
342
342
to
-
-
31. Causes of differences between changes in certain items as shown by
the statement of financial position and as shown by the statement of cash
flows as well as other information on the statement of cash flows
Causes of differences between changes in certain items as shown by the statement of financial
position and as shown by the statement of cash flows are presented by the tables below:
the year ended
31 December 2015
Change resulting from statement of financial
position/Balance sheet’s change to receivables
the year ended
31 December 2014
(5 729)
11 407
19
-
-
1 317
(300)
-
58
-
Receivables from disposal of shares
(475)
-
Other
Change resulting from statement of cash flows
4 581
4
(10 086)
Receivables from disposal of tangible investment
goods
Leasing receivables
Subscription of shares
Foreign exchange differences from disposal of
shares
60
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
the year ended
31 December 2015
the year ended
31 December 2014
9 496
2 448
126
-
258
546
Investment liabilities
Income tax liabilities
(373)
582
(567)
1 261
Liability under surety
Other
49
-
(47)
9 880
3 899
Change resulting from statement of financial
position/Balance sheet’s change to liabilities excluding
loans and borrowings
Leasing
Unpaid share liabilities
Change to liabilities excluding loans and borrowings
resulting from statement of cash flows
-
the year ended as at
31 December 2015
the year ended as at
31 December 2014
Change resulting from statement of financial
position/Balance sheet’s change to provisions
(127)
457
Provisions for employee benefits
- other comprehensive income
Other
(435)
-
262
2
308
193
Change to provisions resulting from
statement of cash flows
61
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
32. Investment liabilities
As at 31 December 2015 the Company was obliged to incur outlays on tangible fixed assets in the amount of
PLN 2 493 000. The amounts are to be earmarked to cover expenses connected with development,
modernization and acquisition of fixed assets of the entity. Estimated investment expenses for 2016 amount to
PLN 26 864 000.
As at 31 December 2014 the Company’s obligation to incur outlays on tangible fixed assets amounted to
PLN 2 121 000, as at 1 January 2014 - PLN 1 554 000.
33. Contingent liability
As at 31 December 2015 the Company did not have any contingent liability. As at 31 December 2014 the
Company also did not have any contingent liability.
33.1. Legal affairs
There are no proceedings pending which would constitute at least 10% of the Issuer’ share capital.
33.2. Tax settlements
Tax settlements, together with other areas of legal compliance (e.g. customs or foreign exchange law) are subject
to review and investigation by a number of authorities, which are entitled to impose severe fines and penalties. A
lack of reference to well established regulations in Poland results in a lack of clarity and integrity. Frequent
contradictions in legal interpretations both within government bodies and between companies and government
bodies create uncertainties and conflicts. These facts create tax risks in Poland that are substantially higher than
those typically found in countries with more developed tax systems.
Tax settlements may be a subject of review during the subsequent 5 years As a result of the said tax reviews, the
Company’s current tax liabilities may be increased. The Company believes that adequate provisions have been
recorded for known and quantifiable risks as at 31 December 2015.
34. Information on subsidiaries and associates
The table below presents total amounts of transactions entered into with subsidiaries and associates during the
current and previous fiscal year:
sales to subsidiaries
purchase from
subsidiaries
receivables from
subsidiaries
liabilities
towards
Subsidiaries
SNIEZKA-UKRAINA SP Z O.O.
Śnieżka BELPOL Wspólna Sp. z o.o.
TM INVESTMENT Sp. z o.o.
ŚNIEŻKA EastTrade Sp zo.o.
Jednostka stowarzyszona:
Plastbud Sp. z o.o.
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
21 356
27 840
3 795
3 966
28
579
526
0
16 242
40
182
545
-
15 995
43
859
1 002
2 739
3 298
-
1 001
995
-
132
22 920
21 914
17
3
4 078
2 852
62
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
34.1. Associate
As at 31 December 2015 the Company holds 10.07% of shares in Plastbud Sp z o.o. company. (31 December 2014:
also 0.07% of shares)
34.2. Transaction conditions with associated entities
Transaction nature with associated entities:
•
Plastbud Sp. z o.o. in Pustkow whose scope of business activity is manufacture of paint pigments, which
are sold under Śnieżka brand. Mutual transactions between the companies regard trade of raw materials,
products and goods.
•
Śnieżka - Ukraina Sp. z o.o. in Yavorov is one of the manufacturers of paints and putties in Ukraine.
Its products are sold under “Śnieżka” brand. Mutual transactions between the companies regard trade of
raw materials, products and goods.
•
•
Śnieżka - BelPolWspólna Sp. z o.o. acquires from FFiLŚnieżka SA raw materials and goods to
manufacture paints and solvents.
TM INVESTMENT Sp. z o. o. w Brzeźnicy whose scope of business activity is management of
trademarks. FFiLŚnieżka SA pays licence fee for taking advantage of trademarks which belong to TM
Solutions Sp z o.o.
Transactions between the aforementioned associates are made on terms equivalent to those that prevail in arm’s
length transactions.
34.3. Loan granted to a Member of the Management Board
As at 31 December 2015 and 31 December 2014 the Company did not hold any receivables due to loans granted
to members of the Management Board.
34.4. Other transactions with participation of members of the Management Board
The Company did not conclude any transactions with members of the Management Board.
34.5. Remuneration of Company’s senior executives
Remuneration paid or payable to the members of the Management Board and Supervisory Board of the
Company
the year ended
31 December 2015
the year ended
31 December 2014
The Management Board
The Supervisory Board
1 944
1 284
1 770
1 763
Total
3 228
3 533
63
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
Remuneration paid or payable to other members of the senior executives
the year ended as at 31
December 2015
Short-term employee benefits (remuneration and
related expenses)
Termination benefits
Total value of remuneration paid to management
and executive personnel (excluding the
Management Board and Supervisory Board)
the year ended as
at 31 December
2014
4 237
4 182
-
-
4 237
4 182
35. Information on remuneration of the key certified auditor or the entitled entity
to carry out the audit of financial statements
The table below presents remuneration of the entitled entity to carry out the audit of financial statements paid or
due for the year ended as at 31 December 2015 and 31 December 2014 by the following types of services:
Type of services
Obligatory audit of the financial statement
Other services
Total
the year ended
31 December 2015*
the year ended
31 December 2014*
115
115
10
125
10
125
64
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
36. Objectives and principles of financial risk management
The main financial instruments used by the Company are bank loans, bonds, leasing contracts, cash and short-term
deposits. The main objective of these financial instruments is to raise funds for the Company’s operations. The
Company holds also other financial instruments such as trade receivables and payables which arise directly in the
course of its business.
The Company does not conclude transactions involving derivatives, including contracts for change in interest rates
(interest rate swaps) excluding short-term currency trading.
The rule applied by the Company now and throughout the reporting period is not to engage in instruments trading.
The main types of risk resulting from the Company’s financial instruments include interest, currency, liquidity and
credit risk. The Management Board verifies and agrees on the principles of the management of each of the
aforementioned risks and these principles are briefly discussed below. The Company also monitors the risk of
market prices applicable to all financial instruments managed by it. The extent of the risk in the period has been
presented in Note 36.1 and 36.5. The Company’s accounting principles related to derivative instruments have been
summarized in note 10.13.
36.1. Interest rate risk
Exposing the Company to risk resulting from changes in interest rates refers mainly to short-term and long-term
financial liabilities.
Currently, the Company takes advantage of variable interest rates, does not conclude additional contracts to alter
the interest rates (interest rate swaps).
Interest rate risk – susceptibility to changes
The table below presents susceptibility of the gross financial results to possible interest rate changes under the
assumption that other factors remain fixed (in connection with liabilities with variable interest rate). The impact on
the Company’s equity and comprehensive income has not been presented.
Increase/decrease of
interest rates
Impact on gross profit/loss
The year ended as at 31 December 2015
PLN
PLN
+1%
-1%
-994
+994
+1%
+1%
-1%
-1%
-712
-598
+712
+598
The year ended as at 31 December 2014
PLN
USD
PLN
USD
65
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
36.2. Currency risk
The Company is exposed to currency risk due to concluded transactions. The said risk results from sales or
purchases carried out by the Company in currencies other than its reporting currency. In 2015 approximately
11% of sale transactions are concluded by the Company in currencies other than its reporting currency, whereas
26% of costs is expressed in other currency than the reporting currency
The Company acquires raw materials such as titanium white, resins and fillers in foreign currencies. The
Company does not use derivatives to hedge cash flows, except for short-term currency trading (maturity to 30
days). As at 31 December 2015 the Company did not hold any hedges in the form of derivatives.
36.3. Risk related to prices of raw materials
The Company is exposed to risk related to increase of prices of raw materials, including Euro currency
fluctuations, which is adopted to settle part of the raw materials for production. In the event of 1% price
increase of raw materials the expenses within the Company are subject to change amounting to PLN 3 million.
36.4. Credit risk
The Company concludes transactions with reputable companies which have a good credit rating. All clients
willing to take advantage of merchant credit, are subject to procedures of initial verification. Moreover, thanks
to current monitoring balances of receivables, the Company’s exposure to the risk of non-collectible debts is
insignificant.
With regard to other financial assets of the Company, such as cash and cash equivalents, and certain derivatives,
credit risk arises for the Company if the other party to a contract is unable to pay, and the maximum exposure to
this risk is equal to the carrying amount of those instruments.
There is no particular concentration of credit risk in any segment of the Company’s operations.
36.5. Liquidity risk
The Company monitors liquidity risk of funds shortage using the tool for periodic planning of liquidity. This
tool takes into account due dates/maturities of both investments and financial asserts (e.g. receivable accounts,
other financial assets and projected cash flows from operating activities.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use
of various financial sources such bank loans, bank overdrafts, finance leases and hire purchase contracts.
The table below presents financial liabilities of the Company at 31 December 2015 as well as 31 December 2014
by due dates/maturities pursuant to contractual non-discounted payments.
31 December 2015
Interest-bearing loans and borrowings
Financial guarantees
Other liabilities
from 3 to 12
less than 3 months months
Upon request
from 1 to 5 years
Total
Over 5 years
Trade and other liabilities
Derivatives
-
3 312
43 039
-
48 302
-
47 808
-
-
99 422
43 039
-
Total
-
46 351
48 302
47 808
-
142 461
66
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
31 December 2014
from 3 to 12
less than 3 months months
Upon request
Interest-bearing loans and borrowings
Financial guarantees
from 1 to 5 years
Total
Over 5 years
Other liabilities
Trade and other liabilities
Derivatives
-
43 760
40 106
-
23 874
126
-
63 365
-
-
130 999
126
40 106
-
Total
-
83 866
24 000
63 365
-
171 231
37. Financial instruments
The table below shows the carrying amount and fair values of all financial instruments of the Company,
including the financial instruments broken down to classes and categories of assets and liabilities. The carrying
amount of classes and categories of financial instruments as at 31 December 2015 as well as 31 December 2014
are presented in the tables below. The Company presents particular categories and classes of financial
instruments in the carrying amount, whose fair value approximates the carrying amount.
Carrying amount
Financial assets
Other financial assets (short-term)
Trade and other receivables
Cash and cash equivalents
Total
31 December 2015 31 December 2014
450
8
66 537
70 625
8 407
12 843
75 394
83 476
Carrying amount
31 December 2015
31 December 2014
47 808
-
63 365
-
-
-
Total
47 808
63 365
Short-term financial liabilities
Interest-bearing loans and borrowings - variable %
51 614
67 634
Liabilities under financial leasing and lease agreements with
a purchase option
Trade and other liabilities
43 072
33 737
6 977
6 369
101 663
107 740
Long-term financial liabilities
Interest-bearing loans and borrowings - variable %
Working capital facility
Financial leasing liabilities
Other liabilities
Total
67
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
37.1. Hedges
As at 31 December 2015 and 31 December 2014 the Company did not hold any contracts to hedge fair value,
cash flows as well as any collateral for net investment in a foreign entity.
Cash flows hedges
As at 31 December 2015 the Company did not hold any contracts to hedge cash flows.
Fair value hedge
As at 31 December 2015 the Company did not hold any contracts to hedge the fair value.
38. Capital management
The main objective of the Company’s capital management is to maintain favourable credit rating and safe level
of equity ratios that would support the Company's operating activities and increase the value for its shareholders.
The Company manages its capital structure and makes adjustments to it, in response to changing economic
conditions. In order to maintain or adjust its capital structure, the Company may change dividends payments to
shareholders, return capital to shareholders or issue new shares. In the year ended as at 31 December 2015 and
31 December 2014 , no major changes were implemented to objectives, principles and processes applicable
within this area.
The Company monitors the balance of its capitals using the leverage ratio, which is calculated as a relation of net
liabilities to total equity increased by net liabilities. It’s the Company’s principle to keep this ratio between 30%
- 60%. Net liabilities include interest-bearing loans and borrowings, trade accounts payable and other liabilities,
decreased by cash and cash equivalents. The equity comprises share capital attributable to the shareholders of the
parent company, decreased by reserve capitals from unrealized net profits.
31 December 2015
Interest-bearing loans and borrowings
Trade and other liabilities
Less cash and cash equivalents
Net debt
Equity
Total equity
Equity and net debt
Leverage ratio
99 422
50 049
8 407
141 064
149 744
149 744
290 808
49%
31 December 2014
130 999
40 106
13843
158 262
130 701
130 701
288 963
55%
68
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
39. Employment structure
An average employment rate within the Company in the year ended as at 31 December 2015 and 31 December
2014 was the following:
the year ended as at
31 December 2015
the year ended as at
31 December 2014
Other
3
205
27
201
224
3
180
28
193
239
Total
660
643
Management Board
Administration
Sales department
Production employees
40. Events after the balance sheet date
On 18 April 2016 the Management Board of FFiL SA announced its decision on the amount of the declared
dividend which amounted to PLN 3.15 per share. The final decision on the amount of the dividend shall be made
by the General Meeting of Shareholders.
69
Fabryka Farb i Lakierów Śnieżka SA
FINANCIAL STATEMENT FOR THE YEAR ENDED AS AT 31 DECEMBER 2015
(in PLN ‘000)
70