Interim Activity Report MONBAT AD
Contents Page Interim consolidated activity report - Interim condensed consolidated statement of financial position 1 Interim condensed consolidated income statement 3 Interim condensed consolidated statement of changes in equity 4 Interim condensed consolidated statement of cash flows 6 Notes to the interim condensed consolidated financial statements 7
1 Interim condensed consolidated statement of financial position Аssets Note 30 September 2017 BGN 000 31 December 2016 BGN 000 Non-current assets Other intangible assets 5 2 475 1 228 Property, plant and equipment 6 148 061 145 692 Receivables from trade loans 455 455 Goodwill 237 237 Long-term financial assets 17 8 Non-current assets 151 245 147 620 Current assets Inventories 81 650 87 970 Trade receivables 59 964 52 766 Related party receivables 13 40 389 30 995 Receivables from trade loans 10 10 Tax receivables 13 487 8 182 Short-term financial assets 50 50 Other receivables 4 267 3 377 Cash and cash equivalents 12 938 5 550 Current assets 212 755 188 900 Total assets 364 000 336 520 Prepared by: / Belnikolov and Partners OOD Henry Belnikolov Manager / Executive Director: /Atanas Bobokov/ Date: 27.11.2017 The accompanying notes on pages from 7 to 28 form an integral part of the interim condensed consolidated financial statements.
2 Interim condensed consolidated statement of financial position (continued) Equity and liabilities Note 30 September 2017 BGN 000 31 December 2016 BGN 000 Equity Share capital 8 38 989 38 989 Share premium 28 538 28 538 General reserves 64 993 64 993 Foreign currency translation reserve (1 953) (1 073) Retained earnings 79 754 67 571 Equity attributable to the owners of the parent 210 321 199 018 Non-controlling interests (6 366) (6 414) Total equity 203 955 192 604 Liabilities Non-current liabilities Long-term borrowings 9 61 848 46 626 Finance lease liabilities 1 515 1 948 Long-term related party payables 13 7 7 Long-term grants 3 571 4 183 Deferred tax liabilities, net 1 423 1 308 Non-current liabilities 68 364 54 072 Current liabilities Guarantee provisions 183 183 Pension and other employee obligations 1 770 1 528 Short-term borrowings 9 52 626 58 173 Finance lease liabilities 519 515 Trade payables 23 127 21 492 Short-term related party payables 13 6 858 1 244 Tax liabilities 2 157 2 319 Short -term grants 806 806 Other liabilities 3 635 3 584 Current liabilities 91 681 89 844 Total liabilities 160 045 143 916 Total equity and liabilities 364 000 336 520 Prepared by: / Belnikolov and Partners OOD Henry Belnikolov Manager / Date: 27.11.2017 Executive Director: /Atanas Bobokov/ The accompanying notes on pages from 7 to 28 form an integral part of the interim condensed consolidated financial statements.
3 Interim condensed consolidated income statement Note 9 months to 30 September 2017 BGN 000 9 months to 30 September 2016 BGN 000 Sales revenue 227 414 179 058 Other revenue 2 321 2 017 Cost of materials (147 925) (122 531) Hired services expenses (17 479) (15 892) Employee benefits expense (19 543) (16 560) Depreciation, amortization and impairment of non-financial assets 5,6 (10 487) (9 385) Cost of goods sold and other current assets (10 750) (5 898) Changes in finished goods and work in progress 4 607 16 311 Other expenses (4 269) (3 716) Gain from sale of non-current assets 29 5 Gain from purchase of subsidiaries 3 905 Operating profit 27 823 23 409 Finance costs (3 123) (2 424) Finance income 781 846 Other financial items 514 (448) Profit before tax 25 995 21 383 Tax expense (2 554) (2 479) Profit for the period 23 441 18 904 Profit for the period, attributable to: Non-controlling interests 48 (270) Owners of the parent 23 393 19 174 Basic earnings per share 111.1 0.60 0.49 Prepared by: Executive Director: / Belnikolov and Partners OOD /Atanas Bobokov/ Henry Belnikolov Manager / Date: 27.11.2017 The accompanying notes on pages from 7 to 28 form an integral part of the interim condensed consolidated financial statements.
Interim condensed consolidated statement of changes in equity 4 All amounts are presented in BGN 000 Share capital Share premium General reserves Foreign currency translation reserve Retained earnings Total attributable to owners of parent Noncontrolling interests Total equity Balance at 1 January 2017 38 989 28 538 64 993 (1 073) 67 571 199 018 (6 414) 192 604 Dividends (11 032) (11 032) - (11 032) Transactions with owners (11 032) (11 032) - (11 032) Profit for the period - - - - 23 393 23 393 48 23 441 Currency translation differences from foreign operations - - - (880) - (880) - (880) Other changes - - - - (178) (178) - (178) Total comprehensive income for the period - - - (880) 23 215 22 335 48 22 383 Balance at 38 989 28 538 64 993 (1 953) 79 754 210 321 (6 366) 203 955 Prepared by: / Belnikolov and Partners OOD Henry Belnikolov Manager/ Date: 27.11.2017 Executive Director: /Atanas Bobokov/ The accompanying notes on pages from 7 to 28 form an integral part of the interim condensed consolidated financial statements.
5 Interim condensed consolidated statement of changes in equity All amounts are presented in BGN 000 Share capital Share premium General reserves Foreign currency translation reserve Retained earnings Total equity attributable to owners of the parent Noncontrollin g interests Balance at 1 January 2016 38 989 28 538 64 993 (712) 51 498 183 306 (3 827) 179 479 Dividends - - - - (10 920) (10 920) - (10 920) Transactions with owners - - - - (10 920) (10 920) - (10 920) Profit for the year - - - - 26 527 26 527 (1 741) 24 786 Other comprehensive income: - - - - - - - - Currency translation differences from foreign Total equity - - - (361) - (361) - (361) operations Acquisition of non-controlling interest - - - - 466 466 (846) (380) Total comprehensive income for the year - - - (361) 26 993 26 632 (2 587) 24 045 Balance at 31 December 2016 38 989 28 538 64 993 (1 073) 67 571 199 018 (6 414) 192 604 Prepared by: Executive Director : / Belnikolov and Partners OOD /Atanas Bobokov/ Henry Belnikolov Manager / Date: 27.11.2017 The accompanying notes on pages from 7 to 28 form an integral part of the interim condensed consolidated financial statements.
Interim condensed consolidated statement of cash flows 6 Note 9 months to 30 September 2017 BGN 000 9 months to 30 September 2016 BGN 000 Operating activities Cash receipts from customers 217 132 168 521 Cash paid to suppliers (174 342) (171 869) Cash paid to and on behalf of employees (18 425) (15 108) Paid taxes (3 471) 1 528 Other payments for operating activities 2 434 (1 148) Net cash flow from operating activities 23 328 (18 076) Investing activities Purchase/(sale) of property, plant and equipment,net (9 694) (23 424) Loans granted (6 713) (839) Loan repayments received - 2 204 Acquisition of subsidiaries and non-controlling interest (9) (606) Cash flow used in investing activities (16 416) (22 665) Financing activities Received borrowings 29 785 57 186 Payments on borrowings (20 110) (19 967) Payments on finance leases (550) (551) Interest paid (2 343) (1 629) Dividends paid (5 402) (5 040) Other payments for financial activities (551) (620) Net cash flow from (used in) financing activities 829 29 379 Net change in cash and cash equivalents 7 741 (11 362) Cash and cash equivalents, beginning of year 5 550 15 232 Losses on foreign currency translation (353) (562) Cash and cash equivalents, end of period 12 938 3 308 Prepared by: Executive Director : / Belnikolov and Partners OOD /Atanas Bobokov/ Henry Belnikolov Manager / Date: 27.11.2017
7 Notes to the interim condensed consolidated financial statements 1. Nature of operations The main activities of MonbatAD and its subsidiaries ( The Group ) include manufacturing, maintenance and realization of batteries; engineering and development activity; production and trade of equipment used in battery manufacturing; domestic and foreign trade and construction of commercial networks; specialized stores and representatives, recycling of lead and lead contain alloys. The parent company Monbat AD has the same principle activities. The company is registered as joint stock company in c.d. 4636/1999 SGS. The parent company s domicile, which is also its principal place of business, is on 32 A Cherni vrah buld., Sofia. The company is registered on the Bulgarian stock exchange on 22.12.2006. The principle place of the activity is town of Montana, 76 Industrialna str. The Group is managed through single-tier management system consisting of Board of Directors. The members of the Board of Directors are: 1. Atanas Stoilov Bobokov - chairman 2. Petar Nikolov Bozadjiev 3. Jordan Atanasov Karabinov 4. Plamen Stoilov Bobokov 5. Aleksandar Viktorov Chaushev 6. Nikolay Georgiev Trenchev 7. Stoyan Jivkov Stalev 8. Evelina Slavcheva 9. Florian Huth Executive director is Atanas Stoilov Bobokov. The ultimate owner of the group, is Prista Oil Group B.V., the Netherlands. 2. Basis for the preparation of the interim condensed consolidated financial statements These interim condensed consolidated financial statements as at have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information and disclosures required in full annual consolidated financial statements, and should be read in conjunction with the annual consolidated financial statements of the Group for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and approved by the European Union (EU).
8 The interim condensed consolidated financial statements are presented in Bulgarian Leva (BGN), which is also the functional currency of the Group. All amounts are presented in thousand Bulgarian leva (BGN 000) (including comparative information for 2016) unless otherwise stated. The interim condensed consolidated financial statements are prepared under the going concern principle. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts. Initial application of new amendments to the existing Standards and Interpretations effective for the current financial period The following new amendments to the existing standards and new interpretation issued by the International Accounting Standards Board (IASB) and adopted by the EU are effective for the current financial period: Amendments to various standards Improvements to IFRSs (cycle 2011-2013) resulting from the annual improvement project of IFRS (IFRS 3, IFRS 13 and IAS 40) primarily with a view to removing inconsistencies and clarifying wording - adopted by the EU on December 18, 2014 (amendments are to be applied for annual periods beginning on or after January 1, 2015), IFRIC 21 Levies adopted by the EU on September 13, 2014 (effective for annual periods beginning on or after September 17, 2014). The adoption of these amendments to the existing standards and interpretation has not led to any material changes in the Company s financial statements. Amendments to the existing Standards issued by IASB and adopted by the EU but not yet effective At the date of authorisation of these financial statements the following amendments to the existing standards issued by IASB and adopted by the EU were in issue but not yet effective: Amendments to various standards Improvements to IFRSs (cycle 2010-2012) resulting from the annual improvement project of IFRS (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38) primarily with a view to removing inconsistencies and clarifying wording - adopted by the EU on December 17, 2014 (amendments are to be applied for annual periods beginning on or after February 1, 2015), Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture - Agriculture: Bearer Plants - adopted by the EU on November 23, 2015 (effective for annual periods beginning on or after January 1, 2016), Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortisation - adopted by the EU on December 2, 2015 (effective for annual periods beginning on or after January 1, 2016),
9 Amendments to IAS 19 Employee Benefits - Defined Benefit Plans: Employee Contributions - adopted by the EU on December 17, 2014 (effective for annual periods beginning on or after February 1, 2015), Amendments to IFRS 11 Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations adopted by the EU on November 24, 2015 (effective for annual periods beginning on or after January 1, 2016). Amendments to IAS 1 Presentation of Financial Statements - Disclosure Initiative adopted by the EU on December 18, 2015 (effective for annual periods beginning on or after January 1, 2016), Amendments to IAS 27 Separate Financial Statements - Equity Method in Separate Financial Statements - adopted by the EU on December 18, 2015 (effective for annual periods beginning on or after January 1, 2016), Amendments to various standards Improvements to IFRSs (cycle 2012-2014) resulting from the annual improvement project of IFRS (IFRS 5, IFRS 7, IAS 19 and IAS 34) primarily with a view to removing inconsistencies and clarifying wording - adopted by the EU on December 15, 2015 (amendments are to be applied for annual periods beginning on or after January 1, 2016). New Standards and amendments to the existing Standards issued by IASB but not yet adopted by the EU At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the IASB except from the following new standards and amendments to the existing standards, which were not endorsed for use in EU as at the date of approval of these consolidated financial statements: IFRS 9 Financial Instruments (effective for annual periods beginning on or after January 1, 2018); IFRS 14 Regulatory Deferral Accounts (effective for annual periods beginning on or after January 1, 2016) - the European Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard, IFRS 15 Revenue from Contracts with Customers and further amendments (effective for annual periods beginning on or after January 1, 2018), IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019), Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (effective for annual periods beginning on or after January 1, 2016), Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 28 Investments in Associates and Joint Ventures - Investment Entities: Applying the Consolidation Exception (effective for annual periods beginning on or after January 1, 2016), The Group anticipates that the adoption of these standards, amendments to the existing standards and interpretations will have no material impact on the financial statements of the Group in the period of initial application
10 At the same time, hedge accounting regarding the portfolio of financial assets and liabilities, whose principles have not been adopted by the EU, is still unregulated. According to the Group s estimates, application of hedge accounting for the portfolio of financial assets or liabilities pursuant to IAS 39: Financial Instruments: Recognition and Measurement, would not significantly impact the financial statements, if applied as at the balance sheet date. 2.1. Estimates When preparing the interim consolidated financial statements management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual consolidated financial statements for the year ended 31 December 2016. 2.2 Financial risk management The Group s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual consolidated financial statements; they should be read in conjuction with the annual consolidated financial statements as at 31 December 2016. There have been no changes in the risk management policies since year end. 3. Significant events and transactions during the reporting period At the end of 2016 and during the reporting period of 2017, there was a significant increase in the lead LME index compared to the average index for the comparative period. The increase in the index led to an increase in the sales prices of the batteries charged to the end customers of the Company and respectively a temporary drop in the realized volumes in 2017 compared to same period for 2016. The decrease in the realized volumes also accounted for the lower financial result for the period ending on compared to the financial result for the period ending on 30 September 2016. Despite the decrease in the sold volumes of lead-acid batteries, the Company's management believes that the Company is well positioned in the current economic circumstances. Factors contributing to the Company's strong position are: No significant decline in undertaking larger projects. Further, the Company has several long-term contracts with a number of its customers. The Company's major customers have not experienced financial difficulties. Credit quality of trade receivables as at is considered to be good. The lead LME index remained high throughout 2017, which led to the acceptance of the higher battery prices by the Company's customers. Expectations for battery sales for the
11 remainder of 2017 are positive and not lower than realized sales over the remaining comparable period for 2016. The decrease in the realized results in Monbat AD, caused by the decrease in the volumes of the sold lead-acid batteries, was fully compensated on Group level by realized gross profit from the sale of lead and lead alloys. In the beginning of June 2017, the Group acquired Monbat Holding Gmbh. The value of the deal amounted to EUR 27.5 thousand. In June 2017, two new companies - EAS Batteries Gmbh and Monbat New Power Gmbh were acquired by Monbat Holding Gmbh. The purchase consideration paid for each of the acquired companies was EUR 27.5 thousand. Prior to the date of the acquistions, the three newly acquired companies have had limited operating activities. On July 31, 2017, EAS Batteries Gmbh and Monbat New Power Gmbh acquired part of the net assets and existing contractual relationships as part of insolvency proceedings, including the knowhow and technological knowledge and processes of the companies in liquidation GAIA Akkumulatorenwerke Gmbh and EAS Germany Gmbh. Both companies were focused in the production and sale of lithium - ion batteries prior to the insolvency procedures. In these interim condensed consolidated financial statements, the acquisitions of the net assets conducted by EAS Batteries Gmbh and Monbat New Power Gmbh are treated as a business combination within the meaning of IFRS 3 Business Combinations. Both acquisitions are treated as one business combination from the Group's perspective for the purpose of calculating the effect of acquisitions. Acquisitions effect: Purchase consideration: 000 лв. EAS Batteries Gmbh 1 682 Monbat New Power Gmbh 1 721 Total Purchase Consideration Paid 3 403 Fair Value of the acquired net assets 000 лв. Inventory 2 243 Property, plant and equipment 6 227 Other intangible Assets 10 Trade advances Monbat AD (941)
12 Personnel liabilities (241) Total Net Assets 7 308 Gain on purchase of subsidiaries: 000 лв. Fair value of the acquired net assets 7 308 Total Purchase Consideration Paid (3 403) Gain on purchase of subsidiaries 3 905 The management of the Group has used certain assumptions to determine the fair value of the acquired property, plant and equipment and inventories. In September Monbat AD restructured its involvement in the capital of Octa Light Bulgaria AD subsequently transformed to Octa Light Bulgaria EAD) by transferring 2,346,000 shares to Octagon International EOOD. In September Monbat AD acquired 49% of the capital of Octagon International EOOD (subsequently transformed into Octagon International OOD). With a cession contract and a contract for substitution in debt concluded between Monbat AD, Octa Light Bulgaria AD and Octagon International EOOD, the liabilities of Octa Light Bulgaria AD towards Monbat AD were transferred to Octagon International EOOD. In this regard, and in connection with share transfer contracts, the total net effect of Octagon International's remaining unimpaired liability to the Group is presented in note 13. The management of the Group assesses that the Group continues to control the company Octa Light Bulgaria EAD as the current management structure of Octa Light Bulgaria EAD, the composition of the Board of Directors of the later and the excercised Group Financial Policy give the Group the power to direct the relevant activities of the company. The Group continues to be exposed to variable returns from its involvement with the subsidiary and the Group continues to exercise its power to affect those returns. In these interim condensed consolidated financial statements, the accounting treatment of the financial transactions described above does not have an effect on the interim condensed consolidated income statement. In these interim condensed consolidated financial statements, the management of the Group has used the equity method of accounting to account for the Group s investment in Octagon International OOD. 4. Segment reporting No change has occurred in the basis of segment reporting or determining the profit or loss of the segments as compared to the prior period consolidated financial statements. Segment information for the reporting periods under review can be analyzed as follows:
13 9 months ended 30 September 2017 Bulgaria Serbia Romania Nigeria Germany Total 000 BGN 000 BGN 000 000 BGN BGN 000 лв. 000 лв. Revenue: - from external customers 205 015 14 397 9 355 964 4 229 735 - intersegment transactions 188 203 29 513 70 989 - - 288 705 Segment revenues 393 218 43 910 80 344 964 4 518 440 9 months ended 30 September 2016 Bulgaria Serbia Romania Nigeria Total 000 BGN 000 BGN 000 000 BGN BGN 000 лв. Revenue: - from external customers 174 217 3 492 3 330 36 181 075 - intersegment transactions 200 026 20 108 46 014 266 148 Segment revenues 374 243 23 600 49 344 36 447 223 Assets September 2017 BGN 000 Total segment assets 631 787 Consolidation (267 787) Group assets 364 000 Liabilities September 2017 BGN 000 Total segment liabilities 323 652 Consolidation (163 607) Group liabilities 160 045
Assets 14 December 2016 BGN 000 Total segment assets 579 089 Consolidation (242 569) Group assets 336 520 Liabilities December 2016 BGN 000 Total segment liabilities 283 118 Consolidation (139 202) Group liabilities 143 916 The total of segment profit/loss reconciles to the Group's profit before tax expense as presented in its interim condensed consolidated financial statements as follows: 9 months to 30 September 2017 9 months to 30 September 2016 BGN 000 BGN 000 Profit Total segment profit 28 243 23 924 Elimination from intersegment profits from related party transactions (420) (515) Group operating profit 27 823 23 409 Finance costs (3 123) (2 424) Finance income 781 846 Other financial items 514 (448) Group profit before tax 25 995 21 383
15 5. Other intangible assets The Group's other intangible assets comprise software, trade marks and other intangible assets. The carrying amounts for the reporting periods under review can be analyzed as follows: 9 months to Software Trade marks Other assets R&D expences Total BGN 000 BGN 000 BGN 000 000 лв. BGN 000 Gross carrying amount Balance at 1 January 2017 498 1 349 92 1 064 3 003 Additions, separately acquired 27-1 383-1 410 Balance at 525 1 349 1 475 1 064 4 413 Amortization Balance at 1 January 2017 (461) (1 169) (34) (111) (1 775) Amortization (24) (40) (17) (82) (163) Balance at (485) (1 209) (51) (193) (1 938) Carrying amount at 30 September 2017 40 140 1 424 871 2 475 For the year ended 31 December 2016 Software Trade marks Other R&D expences Total BGN 000 BGN 000 BGN 000 BGN 000 лв. BGN 000 Carrying amount Balance at 1 January 2016 476 1 266 92 701 2 535 Additions 22 83-363 468 Balance at 31 December 2016 498 1 349 92 1 064 3 003 Amortization Balance at 1 January 2016 (410) (1 126) (21) (73) (1 630) Amortization (51) (43) (13) (38) (145) Balance at 31 December 2016 (461) (1 169) (34) (111) (1 775) Carrying amount at 31 December 2016 37 180 58 953 1 228
16 6. Property, plant and equipment Group's property, plant and equipment comprise lands, buildings, machinery, equipment, vehicles, business inventory and cost of acquisition. The carrying amount can be analyzed as follows: 9 months to 30 September 2017 Lands Buildings Machinery Equipment Vehicles Business inventory Asset acquisition expenses BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 Gross carrying amount Balance at 1 January 2017 9 247 48 095 123 947 34 693 10 878 4 837 18 859 250 556 Additions 432 4 487 1 799 291 362 163 7 057 14 591 Disposals (200) (300) (172) (18) (1 179) - (1 063) (2 932) Assets transfer 200 5 058 3 720 358 42 29 (9 407) - Balance at 30 September 2017 9 679 57 340 129 294 35 324 10 103 5 029 15 446 262 215 Depreciation Balance at 1 January 2017 - (12 029) (73 074) (8 895) (6 945) (3 921) - (104 864) Depreciation (1 381) (6 921) (1 214) (594) (214) - (10 324) Written-off depreciation - 2 60-972 - - 1 034 Balance at 30 September 2017 - (13 408) (79 935) (10 109) (6 567) (4 135) - (114 154) Carrying amount at 30 September 2017 9 679 43 932 49 359 25 215 3 536 894 15 446 148 061 Total
17 Lands Buildings Machinery Equipment Vehicles Business inventory Assets under construction BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 BGN 000 Gross carrying amount Balance at 1 January 2016 8 481 45 016 107 585 32 404 10 248 4 288 10 882 218 904 Additions 30 611 2 535 1 328 622 276 28 024 33 426 Disposals (231) (204) (65) (46) (325) - (903) (1 774) Assets transfer 967 2 672 13 892 1 007 333 273 (19 144) - Balance at 31 December 2016 9 247 48 095 123 947 34 693 10 878 4 837 18 859 250 556 Depreciation Balance at 1 January 2016 - (10 259) (64 724) (7 531) (6 255) (3 618) - (92 387) Depreciation (1 780) (8 372) (1 368) (854) (303) - (12 677) Disposals - 10 22 4 164 - - 200 Balance at 31 December 2016 - (12 029) (73 074) (8 895) (6 945) (3 921) - (104 864) Total Carrying amount at 31 December 2016 9 247 36 066 50 873 25 798 3 933 916 18 859 145 692
18 7. Seasonality and cycles of the interim operations The demand of accumulator batteries is not a subject to significant seasonal changes. However, practice shows that the demand reaches its peak values in autumn and winter. 8. Share capital The registered share capital of the Group consists of 39 000 000 ordinary shares with a nominal value of BGN 1 per share. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders' meeting of the Group. As at 30.09.2017 the Group has redeemed 10 946 ordinary own shares, which are presented as a decrease in the shared capital. The issued and authorized shares for reporting periods can be presented as follows: 30 31 September December 2017 2016 BGN BGN Number of shares issued and fully paid, - beginning of the period 38 989 054 38 989 054 Number of shares issued and fully paid 38 989 054 38 989 054 Total number of shares authorized at the end of the period 38 989 054 38 989 054 The list of the principal shareholders of the Group is as follows: 30 September 30 September 31 December 31 December 2017 2017 2016 2016 Number of shares % Number of shares % Prista Oil Holding EAD 16 666 371 42.73 16 666 371 42.73 PRISTA HOLDCO COOPERATIEF U.A 8 103 758 20.78 8 103 758 20.78 Monbat Trading OOD 2 752 800 7.06 2 752 800 7.06 UPF Doverie 2 553 813 6.54 2 549 457 6.54 ZUPF Alianz Bulgaria 2 029 556 5.20 2 029 556 5.20 Other natural persons and entities 6 893 702 17.69 6 898 058 17.69 39 000 000 100 39 000 000 100 Buyback of own shares from natural persons and entities (10 946) (0.03) (10 946) (0.03) 38 989 054 99.97 38 989 054 99.97
19 9. Borrowings Borrowings include the following financial liabilities: Current Non-current 30 31 30 31 September December September December 2017 2016 2017 2016 BGN 000 BGN 000 BGN 000 BGN 000 Financial liabilities measured at amortized cost: Other bank loans 52 626 58 173 61 848 46 626 Total carrying amount 52 626 58 173 61 848 46 626 9.1. Borrowings at amortized cost Details of the contracts for banking loans: 1. Rajfaizenbank EAD Contract dated 28.11.2013, Annex 2/12.02.2014 Maturity date: 15.12.2016 (limit A),15.11.2018 (limit B) Amount borrowed: EUR 5 700 000 Type of credit: Investment loan Interest: 1-month EURIBOR + fixed mark-up Collateral: First rank collateral of assets including Engitec line, owned by Monbat Recysling and first rank conventional mortgage of own real estate, owned by Monbat Pledge of fixed assets owned by Monbat AD First rank pledge agreement for Monbat s receivables from the third parties. Utilized amount as of 30.09.2017 at the amount of EUR 873 286 or BGN 1 708 000 2. Rajfaizenbank EAD Contract dated 25.02.2014, Maturity date: 15.02.2017 Amount borrowed: EUR 3 200 000 Type of credit: Revolving loan Interest: 1-month EURIBOR + fixed mark-up Collateral: Rank collateral of mortgage of own real estate, cadaster 48489.5.279, cadaster 48489.5.281, cadaster 48489.5.396, together with bildings on it, on the teritory of Montana str. Indystrialna. With anex N 4/ 30.06.2016 г. the amount of the loan was been increased to 4 200 000 EUR : With anex m.06.2016 г. the amount of the loan was been increased to 9 200 000 EUR : Maturity date: 15.05.2019 г. First rank pledge agreement for Monbat s receivables from the third parties. Pledge of fixed assets owned by Monbat AD Utilized amount as of 30.09.2017 at the amount of EUR 9 138 891 or BGN 17 874 118 3. Eurobank Bulgaria AD Contract 339/07.12.2004 Maturity date: 01.09.2014 Amount borrowed: EUR 2 200 000 Type of credit: Credit line
20 Interest: 3-month EURIBOR + fixed mark-up Collateral: Pledge, registered in the Special Pledge Registry Utilized amount as of 30.09.2017 at the amount of EUR 0 or BGN 0. There is annex from 29.07.2014 and the loan is transfered from EUR in BGN Maturity date: 01.09.2017 Amount borrowed: 9 192 401 BGN Type of credit: Credit line Interest: 3 M Sofibor + + fixed mark-up Collateral:: Pledge of assets and inventories owned by Monbat AD With annex from 16.06.2017 and the amount of the loan was been increased to 18 971 401 BGN Maturity date: 18.08.2019 Utilized amount as of 30.09.2017 at the amount of BGN 18 970 420 4. Eurobank Bulgaria AD Contract 100-972 / 23.11.2010 Maturity date: 29.08.2015 Amount borrowed: EUR 1 000 000 Type of credit: Working capital Interest: 3-month EURIBOR + fixed mark-up Collateral: Real estate 1: ½ ideal part of land with identification N48489.282 on the cadastral map of Montana, buildings and factories, warehouse currently owned by Monbat AD, approved with Directive RD-18-19-/05.04.2006 of the executive director of AK. Real estate 2: ½ ideal part of land with identification N48489.282 on the cadastral map of Montana, buildings and factories, warehouse currently owned by Monbat AD, approved with Directive RD-18-19-/05.04.2006 of the executive director of AK. Pledges: Pledge 1: Machines, installations and vehicles, located in the factory of Monbat AD in Montana, 72 Industrial str. Pledge 2: Vehicle weighing machine and security room with an area of 102 sq.m., according to documentary evidence and inventory number 300000003 Pledge 3: Unloading area, with an area of 1980 sq.m., according to documentary evidence and property inventory number 3000000004. Utilized amount as of 30.09.2017 at the amount of EUR 0 or BGN 0. There is annex from 29.07.2014 and the loan is transfered from EUR in BGN Maturity date: 28.08.2019 Amount borrowed: 1 955 830 BGN Type of credit: Credit line Interest: 3 M Sofibor + + fixed mark-up Collateral:: Pledge of assets and inventories owned by Monbat AD Utilized amount as of 30.09.2017 at the amount of BGN 1 902 454 5. HYPO NOE Gruppe Bank AG Contract from 16.05.2014 Maturity date: 03.10.2018 Amount borrowed: EUR 10 000 000 Type of credit: Investment loan Interest: 3 M EURIBOR + fixed mark-up Collateral: Pledge agreement for all Monbat s shares of Monbat Recycling EAD
21 Utilized amount as of 30.09.2017 at the amount of EUR 10 000 000 or BGN 19 558 300 6. DSC Bank EAD Contract. 1675/16.09.2015 Maturity date: 10.11.2017 Amount borrowed: EUR 2 500 000 Type of credit: For working capital Interest: 3 M EURIBOR + fixed mark-up Collateral: Pledge agreement for materials Utilized amount as of 30.09.2017 at the amount of EUR 2 500 000 or BGN 4 889 575 7. DSC Bank EAD Contract. 1674/16.09.2015 Maturity date: 10.11.2017 Amount borrowed: BGN 2 000 000 Type of credit: For working capital Interest: 1 M EURIBOR + fixed mark-up Collateral: Pledge agreement for materials Utilized amount as of 30.09.2017 at the amount of BGN 1 997 883 8. Rajfaizenbank EAD Contract. Of 09.11.2015 Maturity date: 15.05.2018 Amount borrowed: EUR 490 000 Type of credit: For working capital Interest: 1 M SOFIBOR + fixed mark-up Collateral: No collateral Utilized amount as of 30.09.2017 at the amount of BGN 489 203 9. HYPO NOE Gruppe Bank AG Contract. Of 21.07.2016 Maturity date: 30.06.2021 Amount borrowed: EUR 3 600 000 Type of credit: For working capital Interest: 6 M EURIBOR + fixed mark-up Collateral: Second pledge agreement for Monbat s shares of Monbat Recycling EAD Utilized amount as of 30.09.2017 at the amount of EUR 3 600 000 or BGN 7 040 988 10. BACB AD Contract. Of 20.10.2016 Maturity date: 20.11.2017 Amount borrowed: BGN 5 000 000 Type of credit: For working capital Interest: 3 M SOFIBOR + fixed mark-up Collateral: First pledge agreement for Monbat s receivables from the third parties. Utilized amount as of 30.09.2017 at the amount of BGN 5 000 000 11. Bank credit card accounts with credit limits BGN 50 000 and utilized amounts as of 30.09.2017 at the amount of BGN 0
22 12. CIBank EAD Contract 1317/18.03.2016 Maturity date: 30.12.2017 Amount borrowed: EUR 2 700 000 Type of credit:: working capital Interest: 3-month EURIBOR + fixed mark-up Collateral: Land with ident. N72624.603.300, including the buildings on it. Land with ident. N72624.603.190, including the buildings on it. Land with ident. N72624.603.191, including the buildings on it. Land with ident. N72624.603.193., including the buildings on it. Land with ident. N72624.603.196, including the buildings on it. Special pledge on plant and equipment Special pledge on receivables in CiBank Balance as at 30.09.2017 at the amount of EUR 1 498 866 or BGN 2 931 527 14. CIBank EAD Contract 1318/18.03.2016 Maturity date: 20.03.2021 Amount borrowed: EUR 5 035 000 Type of credit:: working capital Interest: 3-month EURIBOR + fixed mark-up Collateral: Land with ident. N72624.603.300, including the buildings on it. Land with ident. N72624.603.190, including the buildings on it. Land with ident. N72624.603.191, including the buildings on it. Land with ident. N72624.603.193., including the buildings on it. Land with ident. N72624.603.196, including the buildings on it. Special pledge on plant and equipment Special pledge on receivables in CiBank Balance as at 30.09.2017 at the amount of EUR 4 406 692 or BGN 8 618 741 14. Credi Agricole Bank Romania S.A. Contract N 019/21/2011 Maturity date: 04.12.2017 Amount borrowed: EUR 3 500 000 Type of credit: Credit line Interest rate and commission: 3 М EURIBOR + fixed mark-up Collaterals: Corporate guarantee on the name of Monbat AD, as well as reprocessing equipment for the recycling of wastage accumulator batteries rotational furnace, boiler 5000. Balance as at 30.09.2017 at the amount of EUR 3 491 000 or BGN 6 827 802 15. Rajfaizenbank EAD Contract dated 15.07.2015 Maturity date: 30.09.2018 Amount borrowed: EUR 3 000 000 Type of credit: Credit line Interest rate and commission: 1 М EURIBOR + fixed mark-up Collaterals: Special pledge on plant and equipment situated in Montana Balance as at 30.09.2017 at the amount of EUR 3 000 000 or BGN 5 867 490. 16. Rajfaizenbank EAD Contract dated 30.06.2016 Maturity date: 25.05.2021
23 Amount borrowed: EUR 2 200 000 Type of credit: Credit line Interest rate and commission: 1 М EURIBOR + fixed mark-up Collaterals: : First pledge of receivables First rank collateral of assets including Engitec line, owned by Monbat Recysling First pledge of materials Balance as at 30.09.2017 at the amount of EUR 1 420 914 or BGN 2 779 066 17. Pireos Bank Contract N 196/2016 Maturity date: 30.08.2018. Amount borrowed: EUR 1 500 000 Type of credit: Credit line Interest rate and commission: 3 М EURIBOR + fixed mark-up Repayment schedule: Currently paid depending on the available cash and cash equivalents. With anex 27.09.2017 г. the amount of the loan was been increased to 2 500 000 EUR : Maturity date: 30.09.2018. Collaterals: : First pledge of receivables from third parties. Balance as at 30.09.2017 at the amount of EUR 1 121 225 or BGN 2 192 925 18. Investbank AD Contract N FC1554/2015 Maturity date: 26.09.2022 г. Amount borrowed: 2 000 000 EUR. Type of credit : Investment loan Interest rate and commission3 М EURIBOR + fixed mark-up Repayment schedule: On 79 monthly payments Collaterals: Second pledge on real estate situated in Godech. Second rank collateral of machinery and equipment owned by IBT. First rank collateral of receivables and proceeds in Investbank account. Balance as at 30.09.2017 1 541 000 EUR or BGN 3 013 934 19. Rajfaizenbank EAD Contract dated 13.07.2016 Maturity date: 25.02.2019 Amount borrowed: EUR 1 100 000 Type of credit: Credit line Interest rate and commission: 1 М SOFIBOR + fixed mark-up Collaterals: Special pledge on tehnological equipment for producing of LED by Octa Light Bulgaria AD. Special pledge on receivables. Guarantee from Monbat Recycling EAD and Octagon international. Balance as at 30.09.2017 BGN 532 045 20. Rajfaizenbank EAD Contract N 1/13.07.2016 Maturity date: 25.07.2018 Amount borrowed: BGN 2 000 000 Type of credit: Credit line Interest rate and commission: 1 М SOFIOR + fixed mark-up
24 Collaterals: Special pledge on tehnological equipment for producing of LED by Octa Light Bulgaria AD. Special pledge on receivables. Guarantee from Monbat Recycling EAD and Octagon international. Balance as at 30.09.2017 BGN 281 202 21. Rajfaizenbank EAD Contract N 2/13.07.2016 Maturity date: 25.07.2018 Amount borrowed: BGN 2 000 000 Type of credit: Credit line Interest rate and commission: 1 М SOFIBOR + fixed mark-up Collaterals: Special pledge on tehnological equipment for producing of LED by Octa Light Bulgaria AD. Special pledge on receivables. Guarantee from Monbat Recycling EAD and Octagon international. Balance as at 30.09.2017 BGN 2 000 000 10. Income tax expense Income tax expense is recognized based on management s best estimate of the annual income tax rate expected for the full financial year. The estimated annual tax rate for income tax for 2017 and 2016 is 10%. 11. Earnings per share and dividents 11.1. Earnings per share Basic earnings per share have been calculated using the profit attributed to the shareholders of the Group as the numerator. The weighted average number of outstanding shares used for basic earnings per share as well as profit attributable to shareholders is as follows: 30 September 30 September 2017 2016 BGN BGN Profit attributable to the shareholders (BGN) 23 393 000 19 174 000 Weighted average number of outstanding shares 38 989 000 38 989 000 Basic earnings per share (BGN per share) 0.60 0.49 11.2. Dividends At the General meeting of the shareholders, held on 26.06.2017, a decision was made to distribute dividends in the amount of BGN 11 032 000, which is a part of the income for 2016.
25 Untill the Company has paid dividends at the amount of BGN 5 401 596. At the General meeting of the shareholders, held on 27.06.2016, a decision was made to distribute dividends in the amount of BGN 10 920 000, which is a part of the income for 2015. Untill 31 December 2016 the Company has paid dividends at the amount of BGN 10 150 852 12. Related parties transactions The Group's related parties include its owners, subsidiaries, companies under common control, key management and others as described below. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. 12.1. Transactions with owners Purchases of goods and services - purchases of raw materials from Prista oil Holding EAD 30 September 30 September 2017 2016 BGN 000 BGN 000 (21) (20) - purchases of services from Prista oil Holding EAD (5) (1) - purchases of other from Prista oil Holding EAD (6) (6) - purchases of assets from Prista oil Holding EAD - (30) - purchases of nomaterial assets from Prista oil Holding (1) (2) EAD - purchases of services from Monbat Trading OOD (580) (188) (613) (247) Sale of goods and services - sale of goods to Prista oil Holding EAD 4 286 2 455 - sale of other to Prista oil Holding EAD - 2 - sale of services to Monbat Trading OOD 26 18 4 312 2 475 Other - dividends paid to Monbat Trading OOD - (244) - interest on loan granted to Prista Oil Holding EAD 626 562 12.2. Transactions with other related parties under common control 30 September 30 September 2017 2016 BGN 000 BGN 000 Sale of assets - sale of assets to IBT 10 - - sale of production to IBT - 38 10 38
26 Purchases of goods and services - purchases of raw materials from PCHMV (13) (8) - purchases of services from PCHMV (9) (26) - purchases of services from Kom EOOD (17) (12) - purchases of raw materials from Kom EOOD (1) (1) - purchases of assets from IBT (356) (91) - purchases of services from IBT (18) - - purchases of services from Octa Lait EOOD - (1) (414) (139) Other transactions - interest accrued PCMV - 9 12.3 Transactions with key management personnel Key management personnel of the Group include members of the Management board and Supervisory board. Key management personnel remuneration includes the following expenses: 30 September 30 September 2017 2016 BGN 000 BGN 000 Short-term employee benefits: -Salaries 2 874 3 076 -Social security costs 220 190 -Company cars 91 93 Total short-term employee benefits 3 185 3 359 Total employee benefits 3 185 3 359 13. Related parties balances 30 September 31 December 2017 2016 BGN 000 BGN 000 Current Receivables from: - Prista oil Holding EAD loan 23 225 18 140 - Prista oil Holding EAD trade receivables 8 764 6 782 - Atanas Bobokov - loan 2 058 430 - Prista oil Holding EAD interest 3 042 2 416 - IBT loan 81 81 - IBT trade receivables 37 54 - IBT interests 32 30 - Agencia Apecs trade receivables 20 20
27 - KOM interests 169 105 - KOM loan 2 150 2 150 - Georgi Trenchev - loans 5 5 - Octagon International loans, net 427 427 - Octagon International - interests 45 31 - Monbat Trading OOD - trade receivables 5 2 -Monbat End Prodject- loan 222 222 -Monbat End Prodject- interests 9 2 -Florian Huit-loans 98 98 Total current receivables 40 389 30 995 Total receivables from related parties 40 389 30 995 Non current Payables to: - Ecobat AD dividends 6 6 - Bat AD dividends 1 1 Total noncurrent payables to related parties 7 7 Current Payables to: - Monbat Trading OOD - dividents 1 549 771 - Prista Oil Holding EAD - trade payables 362 357 - PCMV - trade payables - 12 - Kom EOOD- trade payables 81 67 - Prista oil Romania-trade payables 2 2 - IBT trade receivables 150 15 - Torlashka sreshta EOOD trade receivables - 20 - Prista Oil Holding EAD - dividents 4 714 - Total current payables to related parties 6 858 1 244 Total payables to related parties 6 865 1 251 14. Post - reporting date events No adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorization. 15. Authorization of the interim condensed consolidated financial statements The interim condensed consolidated financial statements as of (including comparatives) were approved for issue by the managing board on 29 November 2017.