Condensed financial statements for the 1st quarter of 2014 prepared pursuant to the International Financial Reporting Standards endorsed by EU

Transcription

1 Wawel S.A. 1 Condensed financial statements for the 1st quarter of 2014 prepared pursuant to the International Financial Reporting Standards endorsed by EU

2 Wawel S.A. 2 I. FINANCIAL STATEMENT state as of state as of state as of Financial statement for 1 st three months of 2015 Assets Not audited Audited Converted Fixed assets Fixed tangible assets Goodwill Intangible assets Long-term receivables Shares in affiliates valued by equity Long-term accruals, including other accruals Current assets Inventory Receivables due to deliveries and services 3. Short-term accruals Short-term financial assets Assets classified to sell Total assets Liabilities Equity Share capital Capital from issue of the shares above their nominal value Other components of equity Supplementary capital Revaluation capital Retained profits/uncovered losses Total liabilities Long-term liabilities liabilities Provisions for liabilities Provision due to the deferred income Provision for retirement and similar Long-term liabilities Short-term liabilities liabilities Provisions for liabilities Provision for retirement and similar Other provisions Short-term liabilities Liabilities due to deliveries and services and other liabilities Liabilities due to CIT tax Accruals and deferred income Total liabilities

3 Wawel S.A. 3 TOTAL INCOME STATEMENT (PLN k) 1st quarter of 2015 Not audited 1st quarter of 2014 Converted I. Net income from the sale of products, goods and materials, including: Net income from sales of products Net income from sales of goods and materials II Costs of products, goods and materials sold, including: 1. Manufacturing cost of products sold 2. Value of the goods and materials sold 112) 769) (95 (99 881) (4 (90 521) (82 744) (7 777) III. Gross profit (loss) from sales Sales costs Management Board costs 515) 928) (22 (12 (22 865) (10 638) IV. Profit (loss) from sales Other operating income Other operating costs (1 090) (823) V. Profit (loss) from operating activity Financial incomes Financial costs Share in profit of affiliates (318) (513) (127) (289) VI. Gross profit (loss) Income tax (6 818) (5 003) VII. Profit (loss) for the period VIII. Other total incomes - - IX. The sum of the total incomes

4 I quarter 2014 (converted) 2014 (audited) I quarter 2015 (not audited) Wawel S.A. 4 Retained profits/uncovered losses STATEMENT OF CHANGES IN EQUITY (PLN K) Share capital Surplus from selling shares above their nominal value Other components of equity Suppleme ntary capital Revaluatio n capital total change in accounting policy Profit/loss Total equity As of 31st December net profit other total incomes a) total incomes As of 31st March As of 1st January net profit other total incomes a) total incomes b) distribution of undivided profit pursuant to GMS resolution c) forwarding to the dividend d) forwarding the revaluation capital to supplementary capital As of 31st December As of 1st January net profit other total incomes a) total incomes b) distribution of undivided profit pursuant to GMS resolution c) forwarding to the dividend As of 31st March

5 Wawel S.A. 5 CASH-FLOW STATEMENT (in k PLN) A. Net cash-flow from operating activities 1st quarter 2015 not audited 1st quarter 2014 converted I. Gross profits (loss) II. Total adjustments: Amortization Profit/loss due to the exchange differences Paid income tax Interests and dividends Profit/loss from investment activity Reserve change Stocks change Receivables change Short-term liabilities change (except for loans and credits) Change in prepayments and accrued income III. Net cash-flow from operating activities B. Net cash-flow from investments activities 1. Sales of intangible and tangible fixed assets Purchase of intangible and tangible fixed assets IV. Net cash-flow from the investment activity C. Net cash-flow from financial activities V. Net cash-flow from financial activities 0 0 D. Total net cash flows E. Balance change of pecuniary assets including change in pecuniary assets due exchange differences 1-3 F. Opening balance of pecuniary assets G. Closing balance of pecuniary assets (F+/-D) II. ADDITIONAL INFORMATION 1. GENERAL INFORMATION 1.1 Legal status and basic subject of activity as per the Polish Classification of Activities (PKD) Wawel Spółka Akcyjna seated in Kraków. The Company is registered in the National Court Register kept by the District Court for Kraków - Śródmieście, 11th Commercial Department in Kraków under the number According to the sections of the Polish Classification of Activities the basic subject of the company s activity is production of cocoa, chocolate and confectionary products denoted with the symbol (PKD 2007) 1082Z. The Company s shares are traded in the official market of the WSE. According to the classification adopted by the WSE, the Company is acting in the food industry sector. 1.2 The Company s duration is indefinite 1.3 The periods for which the financial statement and comparable data are presented. The financial data presented cover the period from 1st January to 31st March 2015.

6 Wawel S.A. 6 The comparable data cover the period from 1st January to 31st March 2014 and in financial statement cover the period from 1st January to 31st December Information concerning the composition of the Management Board and the Supervisory Board MANAGEMENT BOARD President of the Management Board - Member of the Management Board - Dariusz Orłowski Wojciech Winkel SUPERVISORY BOARD Chairman of the Supervisory Board Vice Chairman of the Supervisory Board Secretary of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Hermann Opferkuch Eugeniusz Małek Paweł Bałaga Nicole Opferkuch Christoph Köhnlein Paweł Tomasz Brukszo 1.5 As at 31st of March 2015, the following shareholders possessed more than 5 % of votes at the General Shareholders' Meeting: Name of shareholders Number of shares % share capital Number of votes % votes at the GSM Hosta International AG seated 781, , in Münchenstain (Switzerland) MetLife OFE seated in Warsaw 147, , Others shareholders 570, , Total 1,499, ,499, The Issuer is not a dominant entity in relation to other entities and it does not draw up a consolidated statement. 2. CHARACTERISTICS OF FINANCIAL RESULTS GENERATED IN THE REPORTING PERIOD 1. Results generated in Q The revenues from sales in 1st quarter of 2015 amounted million zlotys, that constitutes 114% of sales in comparison to the same period in To compare these two analyzed periods the margin rates EBIDTA, EBIT, gross cash flow and net cash flow was applied. The EBIDTA rate- calculated as the operational profit plus amortization. EBIDTA rate: 1st quarter of 1st quarter of Dynam / 2014 EBIDTA rate ( in k PLN) Operational profit+amortization 38,598 29, % EBIDTA margin (% share in revenues) 22.6% 19.9%

7 Wawel S.A. 7 The EBIT rate- calculated as the operational profit. EBIT rate: 1st quarter of st quarter of 2014 Dynam / 2014 EBIT rate ( in k PLN) Operational profit 34,240 26, % EBIT margin (% share in revenues) 20.1% 17.5% Gross cash flow rate- calculated as the gross profit plus amortization. Gross cash flow rate: 1st quarter of 1st quarter of Dynam / 2014 Gross cash flow rate (in k PLN) Gross profit+amortization 39,058 31, % Gross cash flow margin (% share in revenues) 22.9% 20.9% Net cash flow rate- calculated as the net profit plus amortization. Net cash flow rate: 1st quarter of 1st quarter of Dynam / 2014 Net cash flow rate (in k PLN) Net profit+amortization 32,240 26, % Net cash flow margin (% share in revenues) 18.9% 17.6% 2. Important events within the period The important events which occurred in Q were presented in the published current reports. 3. Important events after balance date: 4. Factors and events of a non-typical nature significantly influencing the financial results. Did not occur. 5. Specification of the factors which, in the company s opinion, will affect the achieved results in the prospection of at least the next quarter: The following should be mentioned among the main threats and risk factors: - increase in the prices of the essential production raw materials (mostly cocoa seeds), - occurrence of unfavourable for the Company changes of the exchange rates (mostly EUR, USD, GBP) which may consequently result in the increase in the purchase cost of the imported raw materials. In the nearest fiscal year there are not anticipated any important threats and risk, which may affect the level of achieved results. The Company does not possess any periodical foreign currency agreements and does not plan the important operations related to the opening the transactions with the currency risk due to its limited influence on the Company's result. The inflows due to the export in the material part (ca. 28%) protect the expenses due to the raw materials import used to manufacturing the finished products. Other open currency exposition due to the import purchase is calculated at the price of finished product. But the Issuer allows for possibility of entering into the currency term transactions related to the currency purchase to the extent necessary to cover the current raw materials purchases. Furthermore, in connection with the worsening political and economic situation in Ukraine, there is a risk associated with the business activity of the Lasoszczi Company (an affiliate in which Wawel S.A. holds 48.5% share). Therefore, the Management Board does not exclude the possibility of making - in the next

8 Wawel S.A. 8 reporting periods - the write-offs for impairment of held shares and loans granted to the Lasoszczi Company whose total book value as at 31 March 2015 equalled PLN 3,618 thousand (of which shares of PLN 2,180 thousand and loans of PLN 1,438 thousand). 3. ADOPTION OF THE INTERNATIONAL FINANCIAL REPORTING STANDARDS 3.1 Declaration of compliance: These interim condensed financial statements were prepared in compliance with the International Accounting Standard No. 34 Interim financial reporting endorsed by EU ( IAS 34 ). The interim condensed financial statements do not include all information and disclosures required for the annual financial statements and should be read along with the financial statements of the Company for the year ended on December 31, 2014 and approved to be published on The interim financial results may not fully reflect the achievable financial result for the fiscal year. The interim condensed consolidated financial statements were prepared on the assumption that the Company would continue as a going concern in the foreseeable future. As for the date of approval of this consolidated financial statement there are not any circumstances indicating any threat for the going concern principle First time adopted standards The accounting principles (policy) applied to prepare the interim condensed financial statements are consistent with these applied to prepare the annual financial statement of the Company for the year ended on December 31, 2014, except for the following new or amended standards and interpretations applicable for the annual periods starting on or after January 1, IFRIC 21: Levies This Interpretation provides guidance on how to recognise liabilities for payment of fees and taxes which are not income taxes. An obligating event is an event defined in the provisions of law which creates an obligation to pay a given tax or fee. IFRSs Amendments In December, the International Financial Reporting Committee issued amendments to IFRSs , which amended four standards. These amendments include modifications of presentation, recognition, valuation and definitions, and contain some editorial changes. The adoption of the aforementioned amendments to standards and interpretation does not affect the financial condition and the results of the Company s activity and the scope of information presented in the condensed separate financial statement of the Company. 3.3 Standards and Interpretations issued but not yet adopted by the EU for use. According to the Company's estimates, standards, interpretations and amendments to the standards wouldn't have any significant impact on the financial statements, if they had been applied by the company at the balance sheet date. 3.4 Voluntarily changes in accounting principles. The Company has not changed any Accounting Principles in comparison to the previous financial statements. 3.5 Comparability of financial data for the preceding year and the data from the financial statementsf or the reporting period.

9 Wawel S.A. 9 The Company changed the method of data presentation in the financial statement for 2014 and as follows: The changes in the presentation of the Statement of comprehensive income are as follows: Costs and revenues related to the revaluation allowances and liquidation of inventories presented in the other operating revenues and costs are recognized at costs of sales. write down of the doubt receivables are offset. The changes in the presentation of the Statement of financial position are as follows: Assets and provision for deferred tax are offset and presented as the deferred tax provision. Amount of provisions (amount others sales support expenses and employee expenses) presented in the statement of financial position at Other provisions are recognized at Deferral accounts. Corporate income tax was separated from Trade liabilities and presented at CIT liabilities. Liabilities and receivables due VAT are offset. In connection with the above in the Condensed Financial Statement for first three months of 2015, the data were adjusted in the Condensed Financial Statement for the period of first 3 months of 2014 in order to ensure the comparability. The below table presents the specification of differences as a result of change in the presentation of comparative data for 1 st quarter 2014 (in k PLN): Items from the Statement of comprehensive income: Item: It was for 1 st It is for 1 st Change: quarter 2014 quarter 2014 Costs of sold products, goods and materials Manufacturing costs of sold products and services Value of goods and materials sold Gross profit (loss) from sales Profit (loss) from sales Other operating revenues Other operating costs Items from the statement of financial position: STATEMENT OF FINANCIAL CONDITION (k PLN) Before the change as of Change After change as of Assets Non-current assets Long-term deferral accounts including: Assets due to deferred tax Current assets Receivables due to deliveries and services and other receivables Total assets Liabilities Total liabilities Long-term liabilities Provisions for liabilities

10 Wawel S.A Deferred income tax provisions Short-term liabilities Provisions for liabilities Other provisions Short-term liabilities Liabilities due to deliveries and services and other liabilities CIT liabilities Accruals and deferred income Total assets IMPORTANT VALUES BASING ON PROFESSIONAL JUDGMENT AND ESTIMATIONS Professional judgment. At preparation of the condensed interim financial statements, the Entity s management is required to make certain estimates, judgments and assumptions that affect the presented revenues, costs, assets and liabilities and related notes and disclosures of contingent liabilities. The uncertainty of these assumptions and estimates may cause the material adjustments of the carrying amount of assets and liabilities in the future. 4.2 Uncertainty of estimations and assumptions The basic assumptions referred to the future and other key sources of uncertainty as of the end of the period, with which the significant risk of the significant adjustment of the assets and liabilities accruing amount in the next fiscal year is connected, are described below. The Company adopted the assumptions and estimations about the future based on the knowledge as of the date of these financial statements. The assumptions and estimations may change as a result of the future events being a consequence of the market changes or changed beyond the Company s control. Such changes are reflected in the estimations and assumptions, when occurred. Impairment of non-current assets and goodwill The Company did not identify any assumptions of impairment and did not carry out any test for impairment. Impairment of interest in associate The Company did not identify any assumptions of impairment and did not carry out any test for impairment. Measurement of provisions for employee benefits The provisions due to the employee benefits were estimated by actuarial methods. Adopted actuarial assumptions did not change at the end of Deferred tax assets The Company recognizes the deferred tax assets basing on the assumption that the tax profit allowing to use them will be achieved in future. The deterioration of the achieved tax results in the future might cause that this assumption would be unjustified. Depreciation rates The amount of depreciation rates is set basing on the expected period of useful life of the assets of the property, plant and equipment as well as the intangible assets. Annually, the Company carries out the verification of adopted useful life periods basing on the current estimations.

11 Wawel S.A OTHER EXPLANATORY NOTES TO THE FINANCIAL STATEMENT 5.1 Functional and reporting currency. This financial statement was drawn up in polish zlotys. The reporting and functional currency is polish zloty. The financial data in the financial statement were presented in thousands zlotys. 5.2 Chosen financial data contained in this statement have been converted into EURO according to the following rules: Financial data for 2015: - the particular items of the assets and liabilities for the balance sheet according to the average exchange rate announced for by the National Bank of Poland: 1 EUR = 4,0890 PLN - the particular items of the profit and loss account and the cash flow account for the period from to according to the exchange rate constituting the arithmetic mean of the average exchange rates determined by the National Bank of Poland as of the last day of each month of 1 st quarter EUR = 4,1489 PLN Financial data for 2014: - the particular items of the assets and liabilities for the balance sheet according to the average exchange rate announced for by the National Bank of Poland: 1 EUR = 4,2623 PLN - the particular items of the profit and loss account and the cash flow account for the period from to according to the exchange rate constituting the arithmetic mean of the average exchange rates determined by the National Bank of Poland as of the last day of each month of 1 st quarter EUR = 4,1894 PLN 5.3 Important events after the interim period completion, which were not reflected in the financial statement for the relevant interim period. Did not occur 5.4 Paid dividends with division into registered shares and other shares. On the Issuer s Supervisory Board, on the basis of recommendation of the Audit Committee, gave a positive opinion to the Issuer s Management Board s motion on submission to be recognized by the Wawel s General Meeting the intended use of the net profit for 2014 in the amount 88,035, PLN with the division proposal as follows: - For dividend: 29,995, PLN i.e PLN per one share, - For supplementary capital: 58,040, PLN 5.5 Information on changes in contingent liabilities or contingent assets, which occurred from the end of the last fiscal year. Liabilities and assets do not occur. 5.6 Information on issue, buy-out and repayment of debt securities and capital securities 5.7 Change in the entity s structure in the interim period

12 Wawel S.A. 12 Did not occur. 5.8 Goals and policy of the financial risk management In the period of first three months of 2015 any goals or policy of the financial risk management did not change in comparison to Financial instruments In the Company s opinion, the fair value of cash, short-term deposits, trade receivables, granted loans, trade liabilities and other liabilities does not differ from the carrying amount, mainly as a result of the short maturity date Discontinuing operations 5.11 Seasonality of issuer s business activity The business activity of the Issuer is characterized by the seasonality, which results from the structure of manufactured and sold products. Due to the fact that 75% - 80% of the sale constitute the products from the group of filled chocolate, full chocolate and chocolate candies, their sale is lower during the summer months, but the lowest level is in II quarter. The biggest revenues and profits are generated in I and IV quarter of the calendar year. The diagram below presents the amounts in sale revenues in the last four quarters of Company s activity in comparison to the same quarters of the previous year.

13 Wawel S.A Information on operating sectors Pursuant to the requirements of IFRS 8, the operating sectors need to be identified basing on internal reports on these elements of the Company, which are verified on a regular basis by the persons deciding on allocation to the relevant sector and assessing the financial results. The Company runs homogenous business activity consisting of manufacture and sale of confectionery. However for the management needs the internal system of financial reporting allows identifying the financial results pursuant to the markets. And due to this fact after adopting IFRS 8 the identification of reporting sectors in the company did not changed. The results in the market segments are as follows: 1 st quarter 2015 PLN k Item: Country Export Total Income from sales of products, goods and materials 160,445 10, ,511 Cost of products, goods and materials sold 94,312 5,569 99,881 Gross profit (loss) from sales 66,133 4,497 70,630 1st quarter 2014 Income from sales of products, goods and materials 140,468 8, ,352 Cost of products, goods and materials sold 85,397 5,124 90,521 Gross profit (loss) from sales 55,072 3,760 58,831 PLN k The capital expenditures are not alocated according to the markets, because all of the fixed assets used are situated in Poland. Information on major clients: In the first 3 months of 2015, the Company and one external entity performed the sales transaction exceeding 10% of the total revenues from sales of the Company. The sales transactions referred to the segment Domestic sales Information on allowances revaluating the inventories amount to the achievable net amount and reversal of allowances: In Q the revaluation allowances for stocks of materials amounting to PLN 19 k were established and revaluation allowances for inventories of finished goods amounting to PLN 46 k were reversed Information on revaluation allowances for impairment of financial assets, impairment of noncurrent assets, impairment of intangible assets or other assets and any reversal of such allowances: - In Q the write-downs for debts for principal amount and interest were increased by the amount of PLN k Information on establishment, increase, use and release of provisions: In Q the provision was not changed Information on provisions and assets due to deferred income tax realized in Q3 2014:

14 Wawel S.A The balance of the provision for deferred income tax was increased by the amount of PLN 259 k - The balance of the assets due to deferred income tax was increased by the amount of PLN 1,683 k 5.17 Information on significant purchase and sale transactions of P,P & E: Did not occur Information on significant liability due to the purchase of P,P&E: 5.19 Information on significant settlement due to court procedures: 5.20 Indication of adjustments of the previous periods: 5.21 Information on changes in the economic situation and business activity conditions, which affect significantly the fair value of financial assets and liabilities of the entity: 5.22 Information on failure to pay any credit or loan or on breaching of the credit or loan agreement: 5.23 Significant transactions with the related entities under other conditions than market. Did not occur Information on change in the classification of financial assets as a result of change of target or use of such assets. Did not occur Opinion of the Management Board concerning the possibility of published forecasts of results for 2015: The Company did not published the forecast of the financial results for Wawel S.A. shareholders possessing directly or indirectly by the related entities at least 5% of votes at the GMS of the Issuer: Name of shareholder Number of shares Number of votes % share in the share capital % votes at GMS Shareholding as for the date of annual report for 2014: Hosta International AG seated in Münchenstein 781, , (Switzerland) MetLife OFE 147, , Change in shareholding from the date of forwarding the annual report for 2014 to the date of forwarding the report for 1st quarter of 2015: There were no changes Shareholding as for the date of report for 1st quarter of 2015: Hosta International AG seated in Münchenstein (Switzerland) 781, , MetLife OFE

15 Wawel S.A Specification of the changes in Issuer s shareholding by the managing and supervising person: Number of Number of Managing person Type of held shares shares votes Shareholding as for the date of annual report for 2014: Wojciech Winkel - the Member of the 1,001 1,001 Ordinary bearer s shares Management Board Change in shareholding from the date of forwarding the annual report for 2014 to the date of forwarding the report for 1st quarter of 2015: Wojciech Winkel - the Member of the Management Board - there were no changes. Shareholding as for the date of report for 1st quarter of 2015: Wojciech Winkel - the Member of the 1,001 1,001 Ordinary bearer s shares Management Board Supervising person Number of Number of shares votes Type of held shares Shareholding as for the date of annual report for 2014: Eugeniusz Małek 2 2 Ordinary bearer s shares Paweł Bałaga 1,640 1,640 Ordinary bearer s shares Change in shareholding from the date of forwarding the annual report for 2014 to the date of forwarding the report for 1st quarter of 2015: There were no changes. Shareholding as for the date of report for 1st quarter of 2015: Eugeniusz Małek 2 2 Ordinary bearer s shares Paweł Bałaga 1,640 1,640 Ordinary bearer s shares 5.28 Proceedings in progress before the court, entity competent for the arbitrage proceeding or public administration entity. As of there are any proceedings against the Issuer before the courts and public administration entities, which concern the receivables and liabilities of the Issuer, which total value will constitute at least 10% of the equity of the Company Information on granting the guaranty for the credit or loan or awarding the warranty by the issuer. The guarantees and warranties awarded by Wawel S.A. constituting at least 10% of the own equity of the Issuer do not occur Other information significantly affecting the assessment of the financial standing and financial result of the issuer. Did not occur.