ВИНПРОМ ТРОЯН АД ГОДИШЕН ОТЧЕТ ЗА 2016 Г. VINPROM TROYAN AD ANNUAL REPORT 2016
ANNUAL REPORT 2016 CONTENT: I. Introduction II. Company profile General information Company bodies Main indicators Subsidiary companies Organization and company management charts III. Economic results Balance as of 31.12.2016 Profit and loss account as of 31.12.2016 Cash flow statement Information about capital Notes to the financial statements IV. Auditor's report to shareholders of the company
Dear shareholders and business partners, Let me present you the annual report of 2016 on behalf of the Board of Directors of VINPROM-TROYAN AD. In 2016 we increased our share in the Bulgarian market thanks to our customers, who prefer quality and tradition. This year was truly record-breaking in every aspect. Year was very favourable regarding plum and other fruits harvest. In 2016 we bought over 5 million pounds of plums and 0.8 million pounds of other fruits. This is a historic record in VINPROM-TROYAN AD. Purchased amount of fruits gave us the opportunity to expand our stocks of aging distillate and to create some special new barrels that will go on sale in decades. Thanks to the exceptional quality and the incredible taste we managed to win a gold medal at the prestigious exhibition VINARIA in Plovdiv. Our apricot distillate finished second in an international tasting of fruit distillates, where thousands of samples took part. Total revenues in the company reached the amount of 5.353 thousand BGN. In comparison to 2015, the revenues increased by 17%, mainly due to sales of our spirits in bulk (we achieved more than double growth in this indicator), which was a result of increased interest from companies in the RJG Group. Sales of our own products in Bulgaria grew by 6% and exports were 83% higher than last year. Products from Troyan have been sold in more than 10 countries, mainly in the Czech Republic, the United States and Spain. As the executive director, I cannot hide my joy of the fact that after a period of 10 years, we have achieved a steady growth in sales. For this reason VINPROM-TROYAN AD has calculated a profit of 341 thousand BGN. The record profit allowed the company to write down all its problematic depts. and at the same time evaluate all its employees with annual bonuses. The company's profit also allowed us to realize record investments to the value of 400 thousand BGN. We invested in all areas of the company's business - from the intake of fruit to the distillation column, from the material-technical base to the firm plum gardens. In 2016, we managed to win a subsidy for the renewal of old plum gardens, and in 2017 we plan the planting of 30 hectares of new gardens. At the end of 2016 the total assets stabilized 6.181 thousand BGN. The increase of assets amounts to 10% compared to last year. Equity capital share is almost 58% of total assets. Subscribed capital has not changed and remains 1 491 thousand BGN. The equity capital was increased by 10% to 3.592 thousand BGN. The results for 2016 give us the opportunity to launch a careful company policy of dividend distribution. The tax deduction to the state amounted to 2.498 thousand BGN, the excise tax was 1.842 thousand BGN. VINPROM-TROYAN AD increased its investment credit and used it to increase the capacity of fruit reception in the form of a new mobile blending machine, forklift truck and box pallets, which helps us to increase the quantity of fruit taken by 20%. The remainder of the investment loan currently amounts to 263 thousand BGN after the
increase and partial repayment. For its current needs, the company uses an overdraft of 1.3 million BGN and a bank guarantee of 0.9 million, provided by SIBANK and OBB. The Board of Directors authorized the annual plan for 2017. The planned profit is earnings before tax of 343 thousand BGN with repeatedly increased investments and reconstruction of the company's assets of 780 thousand BGN. This is the most ambitious plan in the company's history that will be funded by both subsidies and investment credits and own funds. Summing up, Directors I would like to thank to all employees, business partners and shareholders for their work, support and faith in the company VINPROM TROYAN AD in 2016. Wishing common success and faith in the future Eng. Jaroslav Burkart Executive Director of VINPROM-TROYAN AD
GENERAL INFORMATION Business Name: VINPROM TROYAN AD Registered Office: ul. Akad. Angel Balevski 16, 5600 Troyan, Bulgaria ID No.: 110030644 Legal form: Share Capital: Joint Stock Company 1 491 478 BGN Shares: 745 739 registered shares in documentary form, par value 2 BGN per share Number of employees: 32 COMPANY BODIES Board of Directors Chairman: Member: Member: Member: Executive Director Authorized representative Ing. Pavel Dvořáček Ing. Jaroslav Burkart mgr. Vladislav Katrencik Stanislav Spasov Ing. Jaroslav Burkart Stanislav Spasov
Thousands BGN Thousands BGN MAIN INDICATORS OF THE COMPANY units 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1. total sales without excise tax and the VAT thous. BGN 2168 3208 3126 3123 3068 3502 4379 3983 4459 5353 2. revenues thous. BGN 2202 3757 3452 3222 3287 3604 4438 4133 5499 5449 3. expenses thous. BGN 1798 3317 2992 2993 3097 4100 4169 4062 6182 5112 4. economic result thous. BGN 404 440 460 229 190-497 276 75-669 341 5. investments and repairs thous. BGN 430 507 156 162 59 254 101 165 204 411 6. taxes paid - excise tax thous. BGN 1004 1542 1246 1413 1461 1567 1647 1691 1855 1842 7. taxes paid - VAT thous. BGN 112 287 213 414 302 399 427 452 466 483 8. sales relation - domestic market : export % 44 / 56 55 / 45 52 / 48 64 / 36 79 / 21 80 / 20 73 / 27 88 / 12 85 / 15 75 / 25 9. wages and salaries thous. BGN 188 257 269 272 331 347 404 357 402 486 10. number of employees 25 30 27 27 26 24 31 31 31 32 11. average salary BGN 6112 7866 9963 10074 11378 11085 12244 11516 12955 15185 12. sickness absence % 8,88 8,8 5,7 1,2 2,6 2,5 2,9 1,4 4,4 6,0 7000 Sales, revenues, expenses 6000 5000 total sales without excise tax and the VAT 4000 revenues 3000 2000 1000 expenses 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Economic result 600 400 200 0-200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 economic result -400-600 -800 Years
Thousands BGN Thousands BGN Investments and repairs 600 500 400 300 investments and repairs 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years Taxes paid 2000 1800 1600 1400 excise tax 1200 1000 800 600 400 VAT 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Years
SUBSIDIARY COMPANIES Business Name: Registered Office: ID No.: Legal form: Share Capital: Ownership interest of VINPROM - TROJAN AD: Year of Establishment: Main Business Activity: VINPROM TROYAN GRADINI EOOD Akad. A. Balevski 16 str., 5600 Troyan, Bulgaria 204075970 Limited Company 1 000 BGN 100% 2016 agrikultural activity in the region of Troyan ECONOMIC RESULTS (in BGN) Date 31.12.2016 Assets 1 000 Revenues 2 510 Expenses 7 654 Profit (loss) -5 144
ORGANIZATION STRUCTURE Annual Meeting Board of Directors Executive Director Financial Department Production and Technical Department Commercial Department
Balance as of 31.12.2016 Amount (in thousands N: ASSETS Current period Prior period а b 1 2 A. Receivables for subscriptions B. Fixed assets 1 150 927 B.I. Intangible fixed assets 15 20 1 Research and development 2 Concessions, patents, licences, trade marks, program products and other rights and assets 15 20 3 Goodwill 4 Advance payments and intangible assets under construction B.II. Tangible fixed assets 1 102 879 1 Land and buildings 390 433 - land 142 171 - buildings 248 262 2 Machines, production equipment, apparature 440 285 3 Facilities etc. 206 136 4 Advance payments and tangible assets under construction 66 25 5 Other tangible fixed assets B.III. Financial investments 1 1 Shares and ownership interests with companies from the group 1 2 Intercompany loans 3 Shares and ownership with asociated companies 4 Loans to asociated companies 5 Other investments 6 Other loans 7 Own shares, bought for nominal value B.IV. Deferred taxes 32 28 C. Current assets 5 026 4 677 C.I. Inventory 3 999 3 970 1 Materials 253 212 2 Work-in-progress 3 Products and goods 3 746 3 758 - products 3 500 3 565 - goods 246 193 4 Advance payments for production 5 Other inventory C.II. Receivables 685 705 1 Receivables from clients and suppliers 635 514 including: - older than 1 year 2 Receivables from companies from the group including: - older than 1 year 3 Receivables from asociated companies including: - older than 1 year 4 Other receivables 50 191 including: - older than 1 year C.III. Investments 1 Shares and ownership interests with companies from the group 2 Own shares, bought for nominal value 3 Other investments C.IV. Finances 342 2 1 Finances in cash 3 1 2 Finances on non-fixed accounts (deposits) 339 1 3 Other finances - - D. Deferred expenses 5 2 TOTAL ASSETS (А+B+C+D) 6 181 5 606
Amount (in thousands N: LIABILITIES Current period Prior period а b 1 2 А. Equity capital 3 592 3 251 A.I. Subscribed capital 1 491 1 491 A.II. Share premium A.III. Reserves from future assessments A.IV. Reserves 353 353 1 Legal reserves 150 150 2 Reserves for buying own shares 3 Reserves according foundation charter 4 Other reserves 203 203 A.V. Profit (loss) of previous years including: - retained earnings 1 407 2 076 - accumulated losses A.VI. Profit (loss) of current period 341 (669) B. Provisions and similar liabilities 67 1 Provision for pensions and similar liabilities 2 Provision for taxes including: - deferred taxes 3 Other provisions and similar liabilities 67 C. Payables 2 589 2 288 1 Obligační půjčky, konvertované se uvádí zvláště including: - less than 1 year - more than 1 year 2 Payables to financial companies 1 563 1 237 including: - less than 1 year 1 300 1 156 - more than 1 year 263 81 3 Received advance payments 195 including: - less than 1 year 195 - more than 1 year 4 Payables to suppliers 422 493 including: - less than 1 year 422 493 - more than 1 year 5 Payables to bills of exchange including: - less than 1 year - more than 1 year 6 Payables to companies from the group 254 98 including: - less than 1 year 254 98 - more than 1 year 7 Payables to asociated companies including: - less than 1 year - more than 1 year 8 Payables to employees 72 28 including: - less than 1 year 72 28 - more than 1 year 9 Payables to social security and health insurance 17 9 including: - less than 1 year 17 9 - more than 1 year 10 Other payables 261 228 including: - less than 1 year 261 228 - more than 1 year D. Financing and deferred revenues including: - financing - deferred revenues TOATAL LIABILITIES (А+B+C+D) 6 181 5 606 Date: 15 th Mar. 2017 Prepared by: Stanislav Spasov Authorized by: ing. Jaroslav Burkart
Profit and Loss Account as of 31.12.2016 N: A. LOSS Amount (in thousands BGN) Current period Prior period а b 1 2 1 Reduction of inventory of production and work-in-progress 37 2 Expenses on raw materials, materials and services 3 589 4 073 including: - raw materials and materials 2 514 2 936 - services 1 075 1 137 3 Personal expenses 564 469 including: - wages and salaries 486 402 - social and health insurance expenses 78 67 including: - pension incurance 4 Expenses on depreciation and devaluation 144 129 а Expenses on depreciation and devaluation of tangible fixed assets and intangible assets 144 129 including: - expenses on depreciation 144 129 - expenses on devaluation b Expenses on devaluation of current assets 5 Other expenses 694 1427 including: - balance sheet value of sold assets 501 1 220 - provisions 67 - others 193 140 Total operating expenses (1+2+3+4+5) : 5 028 6 098 6 Expenses on devaluation of financial assets including investitions, recognized as current assets 3 2 includng: - Negartive differences from changes of currency rates 3 2 7 Expenses on interests and other financial expenses 81 82 a Expenses connected with companies from the group b Negative differences from operations with financial assets c Expenses on interests 52 50 d Others 29 32 Total financial expenses (6+7): 84 84 Total business expenses (1+2+3+4+5+6+7) 5 112 6 182 8 Operating profit 337 9 Extraordinary expenses TOTAL EXPENSES (1+2+3+4+5+6+7+ 9) 5 112 6 182 10 Accountable profit (total receivables - total expenses) 337 V Expenses on taxes 11 Expenses on profit tax (4) (14) 12 Other taxes, alternatives of profit tax for corporations 13 After-tax profit (10-11-12) 341 TOTAL (Total expenses + 11+12+13) 5 449 6 168 N: B. PROFIT Amount (in thousands BGN) Current period Prior period а b 1 2 1 Netto receivables from sales: 5 353 4 459 a Production 4 666 3 810 b Goods 687 649 c Services d Others 2 Increase of inventory of production and work-in-progress 754 3 Expenses on economic aquisitions of assets 4 Other receivables 95 285 including: - receivables from financing Total operating receivables (1+2+3+4) 5 448 5 498 5 Receivables from subsidiary, asociated or mixed companies including: - receivables connected with companies from the group 6 Receivables from other investitions and loans, recognized as not current assets including: - receivables from companies from the group 7 Other interests and financial receivables 1 1 a Receivables from companies from the group b Positive differences from operatons with financial assets c Positive differences from changes of currency rates d Receivables from interests 1 1 e Others Total financial receivables (5+6+7) : 1 1 Total business receivables (1+2+3+4+5+6+7) : 5 449 5 499 8 Operating loss 683 9 Extraordinary receivables TOTAL RECEIVABLES (1+2+3+4+5+6+7+9) : 5 449 5 499 10 Accountable loss (total receivables - total expenses) 683 11 After-tax loss (10 + A11 + A12) 669 TOTAL (Total receivables + 11) : 5 449 6 168 Date: 15 th Mar. 2017 Prepared by: Stanislav Spasov Authorized by: ing. Jaroslav Burkart
Statement of owner`s equity as of 31.12.2016 Indicators Capital subscribed Share premium From future assessments Legal For buying own shares According foundation charter Others Retained earnings Accumulated losses Profit (loss) of current period In thousands BGN Total equity capital а 1 2 3 4 5 6 7 8 9 10 11 1. Opening balance at the beginning of current period 1 491 150 203 2 076 (669) 3 251 2. Changes of account policy 3. Mistakes 4. Closing balance after changes of account policy and mistakes 1 491 150 203 2 076 (669) 3 251 5. Changes on the account of owners - increase - decrease 6. Financial result of current period 341 341 7. Distribution of profit (669) 669 - including dividends 8. Settled losses 9. Future assessments of assets and liabilities - increase - decrease 10. Other changes of equity capital (expenses for 2007 and 2008) 11. Closing balance at the end of current period 1 491 150 203 1 407 341 3 592 Reserves Financial result from previous years 12. Changes from transfers of annual reports of foreign companies 13. Equity capital at the end of current period (11+/- 12) 1491 150 203 1407 341 3592 Date: 15 th Mar. 2017 Prepared by: Stanislav Spasov Authorized by: ing. Jaroslav Burkart
Statement of Cash Flows as of 31.12.2016 In thousands BGN Cash flow Current period Prior period receivables expenses netto receivables expenses netto а 1 2 3 4 5 6 A. Operating cash flow 7 148 6 798 350 6 899 6 994-95 1. Cash flow of trade partners 7 121 6 283 838 6 861 6 252 609 2. Cash flow of current financial assets for trade purposes 3. Cash flow of wages and salaries 471-471 432-432 4. Cash flow of interests, commissions, dividends, ect. 4 30-26 32-32 5. Cash flow of positive and negative differences of currency rates 1-1 1-1 6. Payd and returned profit taxes of corporations 17-17 7. Payments for distribution of profit 8. Other operating cash flow 23 13 10 38 260-222 B. Investment cash flow 31 471-440 242-242 1. Cash flow of fixed assets 31 471-440 242-242 2. Cash flow of current financial assets 3. Cash flow of interests, commisions, dividends, ect. 4. Cash flow of business combinations - acquisitions 5. Cash flow of positive and negative differences of currency rates 6. Other investment cash flow C. Financial cash flow 7 326 6 896 430 6 039 5 713 326 1. Cash flow for emision and following acquisitions of securities 1-1 2. Cash flow from excess payments and their returnig to owners 3. Cash flow of provided or received loans 7 326 6 843 483 6 039 5 655 384 4. Cash flow of interests, commisions, dividends, ect. 52-52 46-46 5. Payment of payables from leasing contracts 12-12 6. Cash flow of positive and negative differences of currency rates 7. Other financial cash flow D. Change of cash flow during period (A + B + C) 14 505 14 165 340 12 938 12 949-11 E. Cash flow at the beginning of period 2 13 F. Cash flow at the end of period 342 2 Date: 15 th Mar. 2017 Prepared by: Stanislav Spasov Authorized by: ing. Jaroslav Burkart
NOTES TO THE FINANCIAL STATEMENTS FOR 2016 Establishment and registration VINPROM TROJAN AD is a company, founded in Bulgaria in 1991 and registered by the District court of Lovech with registration 144/1991. The registered office and administration address of the company is:16 Akad. A. Balevski str., Troyan 5600, Bulgaria The main business activity of the company is: production and trade with fruit distillates and spirits. Operating period: unlimited Ownership and management: The company has a single-stage management system and is managed by the Board of Directors, consisting of 4 members as follows: Chairman: ing. Pavel Dvořáček Member: ing. Jaroslav Burkart Executive director Member: mgr. Vladislav Katrencik Member: Stanislav Spasov Authorized Representative Company structure: The company operation structure is based on single-level management under the direct management of the executive director. The structure defines and determines clearly the rights and responsibilities on each level and within the individual organizational units. Functional and administrative relationships between the departments and final executors are governed by written procedures. Base for Preparation of the Financial Report The financial report of the company is an individual financial report and its preparation is based on the National standards for financial reports for small and mid-sized companies. The financial report preparation is based on accounting estimates in the company. The Company`s management is not aware of any circumstances, which could impugn this principle. Changes in the Accounting policies In 2016 there were no changes in the accounting policies.
Accounting policies 1. Basis for preparation of the financial report The Financial Report of VINPROM TROYAN AD was prepared in agreement with the Accounting Act and The National Accounting Standards /NAS/ in Bulgaria. Financial reports are presented in Bulgarian levs (BGN) in whole thousands. The following Financial Report was prepared in accordance with the historical cost principle, modified in certain cases with a new evaluation of some assets and liabilities regarding to their fair value as mentioned in the appropriate places. 2. Data comparison and recounting sheet Some items in the Balance sheet, The Profit and Loss Account and The Statement of Cash Flows, mentioned in the Financial Report for the previous year of 2015, were reclassified in this report in order to provide easier comparing with the data from the current year of 2016. 3. Use of approximate accounting evaluations and estimations The Preparation of the financial report according to The National Accounting Standards requires from the management certain approximate accounting evaluations and presumptions, related to the reported assets and liabilities from the Balance Sheet, Profit and Loss Account and conditional assets and liabilities. All of them were made according to the best estimation of the management at the date of preparing of the financial report. The actual results may differ from the approximate accounting evaluations. 4. Currency of the report Each of the components of the following Financial Report is calculated in the currency of the main economic environment, in which the company operates, called functional currency. The functional and reported currency of the company is the Bulgarian lev., fixed to euro rate from 1.1.1999. by the law of the established Currency Board of Bulgaria at that time. The transactions in foreign currencies are reported in the main lev exchange rate of National Bank of Bulgaria, valid on the day of the transaction. The monetary assets and liabilities denominated in foreign currencies are reported in the main lev exchange rate of the National Bank of Bulgaria as of 31.12.2016. The currency differences, created by the transactions are reported in the Profit and Loss Account. 5. Financial Risk management. Factors for the financial risk The business activities of the company face many financial risks, including the implications of currency rate changes, interest rates of commercial and bank credits, mortgages for receivables and interests terms.
5.1. Foreign-exchange risk The Company is not exposed to a significant currency risk as its transactions are carried out mainly in the currencies of lev and euro. Loans, received and paid in euros, do not expose the Company or the Cash flow to currency risks. The Company does not maintain significant cash supply than those in the lev and euro currencies. 5.2. Interest risk For its current activities the company uses bank and commercial credits. Bank credits are secured by mortgage of real estates and material reserves. Annual interest rate of the bank credit is 4,5%. The management supposes that there aren`t any conditions to change the existing interest rates, which could bring additional financial risks in credits, used up to 31 st Dec 2016. 5.3. Credit risks Financial assets which potentially expose the Company to credit risks are mainly resulted from receivable sales and received loans. The Company is exposed mainly to credit risk in the case that any of its counterparties do not meet their obligations. Policy of the Management is to minimize these risks and to achieve sales of customers with appropriate credit standing and to obtain adequate compensation. 6. Tangible fixed assets The tangible fixed assets were valued according the acquisition cost, which consist of its purchase value and additional expenses for its acquisition and reduced with the amount of its depreciation and eventual loss due to devaluation. The company reports in the value of the certain possession the expenses, which occurred by the changing of a separate component of this possession in the time of its occurrence, if they are likely to lead to a future economic advantage, bigger than standard efficiency. All other expenses for reconstructions of the tangible fixed assets are reported at the time of their occurrence. The devaluation of the balance value of the tangible fixed assets is controlled in occasions, when balance value could be permanently different from the value of their reparation. If there are some indications, that approximately defined value of reparation is lower than the balance value, the balance value is corrected to balance value of the reparation of the possession. Losses due to devaluation are registered in the Profit and Loss Account, except for cases, when for a certain possession has been established a reserve for new valuation. In that occasion, devaluation is reported as reduction of this reserve. In occasion that devaluation is bigger than the reserve, the overage is registered as a loss in the Profit and Loss Account. On the 31 st of December 2016 the devaluation of all the important tangible fixed assets was controlled. For 2016 the Company has defined limit of 700 BGN, under it the acquired possessions are registered as current expenses even if they may have qualities of tangible fixed assets.
7. Intangible fixed assets The intangible fixed assets are reported according the acquisition cost reduced with the amount of their depreciation and devaluation. The depreciation is calculated by applying the straight-line method using the life-time period of the current asset. The Company has fixed a limit of 700 levs. 8. Long-term investments Long-term investments are estimated according to the acquisition cost, because they aren t dealt on the exchange and the management doesn t keep at disposal sure information about their real value and supposes that it doesn t differ a lot from their registered value. A method of registration according the cost price is applied. 9. Materials The materials in the Company include products, goods and products in progress. Their cost includes all costs of purchase and processing and other costs directly related to the manufacturing. At the end of each reporting period, all inventories are valued at the lower balance value and net realizable value. The amount of the devaluation is recognized as a loss of value. Net realizable value is the estimated selling price decreased with the cost of necessary for the completion and sale. In case that the previous period was reported as a loss of value period and it turns out that the new net realizable value is higher, the recovery may be recognized as a loss of value, but it can`t exceed the previously recognized loss of value. The Company sets the expense of its materials by applying the weighted average cost formula. When selling their balance value is recognized as an expense during the period of revenue recognition. 10. Financial assets Financial assets are these financial instruments: credits and receivables with origin in the company, financial assets for trading, financial assets before the term of payment and financial assets for sale. Financial assets may belong to different groups according to the company`s intentions. Trade and other receivables are registered by the value of their occurrence, those of them, which are in foreign currency by the final currency rate of the National Bank of Bulgaria as of 31 st of December 2016 and reduced by the value of devaluation of the irrecoverable receivables. Devaluation is calculated on the base of analysis of oldness of the receivables from the due date to 31 st of December 2016. The receivables are categorized as not collectable by presumption of the Management when no further reasonable efforts to collect the receivables are possible.
11. Financial resources and financial equivalence Financial resources consist of money in cash, money on bank accounts and deposits. Financial resources in leva are evaluated by the nominal value, and those, which are in foreign currency by the final exchange rate of the National Bank of Bulgaria as of 31 st of December 2016. Preparing of the Statement of Cash Flows: - Financial receivables from clients and financial payments to suppliers are presented approximately, including VAT (20%) - Interests from received credits are presented as payments in the financial part. 12. Depreciation and devaluation of fixed assets The depreciation of fixed assets is counted consistently by linear method. Depreciation is not counted for lands and possessions in process of building and reconstruction, until it wasn t finished and put into operation. Standards of depreciation are determined by the management of the company on the base of expected operating time of the group of possessions. At the end of every reported period the management of the company controls the remaining operating time of possessions and depreciable values to find signs of devaluation or need of changing the standards of depreciation. For each group of possessions are applied the following operating times: Facilities 25 years Equipment 5 years Machines and devices 5 years Vehicles 5 years Office equipment 5 years During the year the standards of depreciation haven t been changed compared to the previous reporting period. 13. Registered capital The registered capital is presented by its nominal value and corresponds with its actual registration in the court at the date of this financial report. The accumulated profit / loss / from previous years include uncategorized and accumulated losses from previous years. Reserves: - common / legal / - due to subsequent loss of value - others
14. Company`s payables to employees from pension obligations The Company has not prepared any program of earning after the retirement of the employees. The Company has short-term payables to the employees for accumulated holidays, which are expected to be used in 12 months after the date of the balance and also for unpaid salaries. 15. Adjustments, Conditional Assets and Conditional Liabilities Adjustments are registered in the balance in cases when, as a result of previous event, the Company has legal or constructive liability, and it is possible, that the Company may have negative cash flow. The value of the necessary and satisfactory reserves is been controlled every year on 31 st of December in order to make necessary corrections. The Company has not recorded in the balance sheet contingent assets and contingent liabilities and presents them off the balance sheet. 16. Financial liabilities Trade payables Trade and any other similar payables in BGN are evaluated by the value of their occurrence and payables in foreign currency by the final rate of the National Bank of Bulgaria as of 31st of December 2016. Current are those which are due within 12 months after the reporting period. Received loans The received loans are initially reported at the amount payable. The taxes payable such as "fee for granting a loan" are deferred on a time proportion basis. Interest`s taxes are reported as current financial costs. Leasing contracts In a financial lease the Company reports leased asset at the lower of fair value or at the value of the minimum lease instalments. In the balance sheet are reported the debts at the total amount of the specified in the contract amount of the rental payments. Difference is reported as a finance expense in the period of the contract. Assets, acquired under finance leases are depreciated just like the remaining depreciable assets. In operating leasing contract the Company reports as an expense for external service the payments of the rent of the asset. 17. Profit tax Current tax assets and liabilities are claims or payables towards budget for the current period due to overpaid or underpaid profit tax. They are calculated by application of current tax rate based on the annual taxable profit. Assets and liabilities from deferred taxes are evaluated according tax rates by the tax legislation for the periods, when the realization of assets or liabilities is expected.
Liabilities from deferred taxes are presented in full rate. Assets from deferred taxes are declared up to the amount of possible future tax income for realization of the assets. 18. Authorization of receivables and expenses Receivables are set according to the fair value of the amounts, which are or have to be received in pecuniary means. Receivables from sells are declared as follows: - Sell of production, goods, materials, intangible assets and tangible fixed assets at the time of invoicing and transfer of possession from the seller; - Services depending on the stage of completeness and at the time, when the result of business transaction can be surely evaluated; - Interests currently, prorated in time; - Dividends at the time, when the right to receive them is determined; - Payments from licences according to contracts. Recognition of revenue and expenditure shall be subject to the requirement of a causal link between them. Revenues in foreign currencies are recorded at the exchange rate of the National Bank of Bulgaria on the date of occurrence. Announcements 1.Net revenues from sells in thousands BGN 2016 2015 Revenues from sells of finished goods 687 687 Revenues from sells of production 4 666 3 810 Others 95 285 Grand total 5 448 4 744 2. Expenses 2.1. Expenses for materials in thousands BGN 2016 2015 Main materials 2 254 2 661 Additional materials 8 4 Supplies 63 50 Fuels 185 215 Others 4 6 Grand total: 2 514 2 936
2.2. Expenses for external services in thousands BGN 2016 2015 Advertising 247 219 Rents 6 12 Insurance 29 25 Telecommunication services 11 10 Independent financial Audit 4 4 Reconstructions 36 29 Trade discounts 468 596 Logistics 172 124 Other expenses 102 118 Grand total: 1 075 1 137 2.3. Other expenses in thousands BGN 2016 2015 Business trips 25 38 Taxes 5 6 Others 163 96 Grand total: 193 140 3. Financial revenues and expenses 3.1. Revenues in thousands BGN 2016 2015 Revenues from loans 1 1 Revenues from changes in currency rates Other financial revenues Grand total: 1 1 3.2. Expenses in thousands BGN 2016 2015 Interest expenses on bank loans 52 47 Expenses from changes in currency rates 3 2 Expenses related to other companies from the group 3 Interest expenses on lease contracts 29 32 Other financial expenses Grand total: 84 84
4. Land, buildings, machines and facilities Reported value Balance as of 01.01.2016 Acquired Transactions Depreciated Balance as of 31.12.2016 Depreciation Balance as of 01.01.2016 Imposed for the period Depreciated Balance as of 31.12.2016 Balance as of 31.12.2016 Land and Buildings Machines and Equipment Vehicles Economic inventory Others In progress Grand total: 598 1 432 234 120 107 2 491 4 227 100 64 395 30 21 51 572 1 659 313 120 171 2 835 165 1 147 149 111 40 1 612 17 72 39 4 7 139 18 18 182 1 219 170 115 47 1 733 390 440 143 5 124 1 102 On 31 st of December 2016 were audited the important tangible fixed assets for purpose of verifying their balance value and discovering their devaluation. The land and the buildings are pledged by the force of the following mortgages: - first in line is the mortgage in benefit of OBB Bank AD as a reinsurance of the bank in front of the Customs Agency in the amount of 900 thousands BGN. - second in the line is the mortgage in benefit of SIBANK EAD under an overdraft contract for working capital in the amount of 1 300 thousands BGN and an investment credit in the amount of 100 thousands BGN. Machines, equipment and vehicles in the total amount of 1 622 thousand BGN were pledged in benefit of SIBANK AD by the force of overdraft contract for working capital and investments credits. The company does not use foreign tangible fixed assets.
5. Intangible fixed assets Product of development Software Intellectual Property Rights Others Grand Total Reported value Balance as of 01.01.2016 19 19 38 Acquired Transactions Depreciated 19 19 38 Balance as of 31.12.2016 19 19 38 Depreciation Balance as of 01.01.2016 15 3 18 Imposed for the period 2 3 5 Depreciation Balance as of 31.12.2016 15 6 23 Balance value as of 31.12.2016 2 13 15 The company does not use foreign possessions. 6. Investment property The company does not have any investment property. 7. Long-term investments In 2015 the company does not have subsidiaries and other long-term investments. 8. Long-term receivables The company has no receivables from granted long-term loans. 9. Inventory of materials and goods in thousands BGN as of 31.12.2016 as of 31.12.2015 Materials 253 212 Production 3 500 3 565 Goods 246 193 Grand total: 3 999 3 970 The Production 200 thousands l. mature spirits were pledged in benefit of SIBANK EAD in return for a granted loan for working capital and investment bank credit. Depreciation of the inventory of materials was not executed.
10. Trade and other receivables In thousands BGN as of 31.12.2016 as of 31.12.2015 Net receivables from clients 616 514 Receivables from clients 616 514 Receivables from advance payments 19 VAT receivables 95 Receivables corporate profit tax 24 Receivables from court procedures 16 32 Others 34 40 Grand total: 685 705 Some of the receivables from contractors which "CIBANK" EAD esteems as acceptable were pledged as a security for overdraft for working capital and investment credit. In 2016 were written off receivables from: EVROPA Market LTD 18542 BGN; KMB Bulgaria EAD 24332 BGN; Borislav V. Radilov 16169 BGN. 11. Financial resources and financial equivalents in thousands BGN as of 31.12.2016 as of 31.12.2015 Financial resources in cash 3 1 Financial resources on bank accounts 339 1 Grand total: 342 2 12. Registered capital On 31 st of December 2016 the registered capital of the Company was fully paid in amount of 1 491 thousands BGN. It is divided into 745 739 shares, each of nominal value of 2 BGN. Main shareholders of the Company`s securities: 1. R. JELINEK Group SE Holland 742 642 shares 99,58% 2. Smaller shareholders 3 097 shares 0,42% 13. Payables from long-term commercial loans in thousands BGN as of 31.12.2016 as of 31.12.2015 Payables bank credits 263 81 Payables lease contracts Grand total: 263 81 14. Other long-term liabilities none
15. Current liabilities 15.1. Short-term credits and interest loans in thousands BGN as of 31.12.2016 as of 31.12.2015 1. From Financial institutions SIBANK EAD 1 300 1 156 2. From connected companies R.JELINEK GROUP SE 254 98 Grand total: 1 554 1 254 SIBANK EAD has granted the Company overdraft in the amount of 1 300 thousands BGN. In 2015 the company used the loan from majority shareholder in the amount of 254 thousand BGN. UBB AD has issued a bank guarantee in the amount of 900 thousand BGN in benefit to Customs Agency. 15.2. Trade payables in thousands BGN as of 31.12.2016 as of 31.12.2015 Payables to suppliers 422 493 including related parties 99 83 Payables to granted advanced payments 195 Grant total: 576 688 16. Incomes of the Employees As of 31 th of December 2016 the Company has 32 employees. 16.1. Expenses on the Employees Expenses on the Employees consist of: in thousands BGN 2016 2015 Wages 486 402 Social insurance 78 67 Grand total: 564 469
Payables to Employees and insurance institutions: in thousands BGN as of 31.12.2016 as of 31.12.2015 Current wages 72 28 Social and health insurance 17 9 Grand total: 86 37 17. Tax payables in thousands BGN as of 31.12.2016 as of 31.12.2015 Payables by the Law of individual`s income tax 9 3 Profit tax VAT 50 34 Excise mark 186 183 Grand total: 245 220 In 2016 the Company has formed a profit in the amount of 341 thousands BGN is deducted from a loss in 2015. The taxable temporary differences are in the amount of 116 thousands BGN and the liabilities from deferred taxes are in the amount of 12 thousands BGN. The deductible temporary differences are in the amount of 77 thousands BGN, the asset upon the deferred taxes is 8 thousands BGN. 18. Other creditors in thousands BGN as of 31.12.2016 as of 31.12.2015 Guarantees Board of directors 6 6 Others 1 Grand total: 6 7 19. Donations In 2016 the Company has not made any donations. 20. Taxable temporary differences Вin thousands BGN 2016 2015 At the beginning of the period 28 14 Declared during the period 12 17 Appeared during the period 8 3 At the end of the period 32 28
21. Income of a single share 2016 2015 Financial result in thousands BGN 341-669 Average number of securities 745 739 745 739 Income of a single share 0.46-0.90 22. Dividends The Annual General Meeting of the shareholders in the previous year of 2015, which has taken place on the 18 th of April 2016, has decided to deduct the loss in the amount of 669 thousands BGN from retained earnings from past periods. The Board of the Directors has decided to propose at the Annual General Meeting of the shareholders to divide the profit for 2016 in amount of 342 thousand BGN for dividends BGN 0,06 per share. The reminder of the profit to be divided as retained earnings from past periods. 23. Evaluation of the financial resources by their real value The financial resources of the company are monetary and currency resources, trade receivables and liabilities, received credits and investments to sell. Financial and currency resources are presented by their nominal value, which corresponds with their real value on the day of the balance. Current receivables and liabilities are receivables and liabilities with remaining maturity period shorter than a year from the date of balance and their nominal value reduced by the devaluation is judged as real value. Liabilities from bank credits are discounted and amortized by the method of effective interest rate, as to determine the real value on the date of balance. Investments of the company aren t dealt on the exchange and their real value cannot be identified. 24. Announcement of Contracts with related parties Partner Contract Amount in thousands BGN 1.RUDOLF JELINEK A.S. purchase 494 Czech Republic sell 1 193 2.R. Jelinek Group SE purchase 5 Holland sell 0 3.VINPROM TROYAN GRADINI EOOD purchase 3 Troyan sell 0 During the transactions, realised within the year did not occur any unusual conditions or deviations from the trade prices.
Financial wages of company management as follows: in thousands BGN 2016 2015 Wages and honorariums 218 178 Paid insurances 28 21 Grand total: 246 199 25. Other announcements 25.1. Conditional assets and conditional liabilities There are no legal processes upon the company from any personal or legal entity. The Company has brought lawsuits against: The Company has an issued executive list against Ferdi I. Satkaev, Sveshtari, Razgrad region in the amount of 58 185 BGN. This receivable is from 2012. In 2014 it was adjusted at 100%. The Company has opened a law suit to EVROPA MARKET OOD in 2014 in the amount of 20 392 BGN, for receivables from 2013. On 24.04.2017 was issued executive list against EVROPA MARKET. During 2016 VINPROM TROYAN received 1850 BGN. In the end of the year 2016 BGN 18542 were written off. In 2015 VINPROM-TROYAN AD has opened a law suit to KMB Bulgaria EAD in the amount of 24332 BGN. On 25.05.2016 was issued executive list. In the end of the year 2016 BGN 24332 were written off. Since 2012 the company tried to collect the sum of 32 338 BGN from Borislav Radulov. In the end of the year 2016 BGN 16 169 were written off. 25.2. Events after the date of the balance sheet After the date of balance, have not occurred any events, which have important influence on possessions and financial status of the company. 26. Date of authorization of the Annual financial report The Annual financial report of the Company for the year of 2016 was officially authorized and announced on the 17 th of March 2017 by the Board of the Directors. 17 th of March 2017 Prepared by: Stanislav Spasov Troyan Authorized by: ing. Jaroslav Burkart