Cluj-Napoca March 30 2015 INDIVIDUAL FINANCIAL … · Issued capital and Own shares Reevaluation...
Transcript of Cluj-Napoca March 30 2015 INDIVIDUAL FINANCIAL … · Issued capital and Own shares Reevaluation...
Cluj-Napoca
March 30 2015
SITUATII FINANCIARE INDIVIDUALE INDIVIDUAL FINANCIAL STATEMENTS
FOR THE PERIOD ENDING DECEMBER 31ST, 2014
Drawn-up according to the international reporting standards
Cuprins (Contents)
Situatia pozitiei financiare (Statement of financial position) ......................................................................................... 3
Situatia rezultatului global (Statement of comprehensive income) ................................ ................................5
Situatia fluxurilor de numerar (Statement of Cash-flow)................................................ ................................6
Situatia modificarilor capitalului propriu (Statement of changes in equity) ................... ................................8
CEMACON SA
Situatia pozitiei financiare
(Statement of financial position)
for the period ending December 31st, 2014
(for the period ended 31 December 2014) ACTIVE (ASSETS)
Active imobilizate
Non-current assets
31-Dec-14
LEI
31-Dec-13
LEI
Imobilizari corporale 11 116.490.340 114.888.514
Property, plant and equipment Investitii imobiliare - -
Investment property Imobilizari necorporale 12 216.166 206.560
Intangible Investitii in actiuni 14 200 -
Investments Alte active imobilizate 2.693.914 300.866
Other non-current assets
119.400.620 115.395.940
Active circulante Current assets
Stocuri 15 13.889.917 8.658.968
Inventories Creante comerciale si similare 16 6.567.750 7.511.743
Trade and other receivables Alte active financiare 1.051.380 -
Other financial assets
Numerar si echivalente numerar 27 12.338.661 6.902.535
Cash and cash equivalents
33.847.709 23.073.246
Active clasificate drept detinute In vederea
vinzarii 22 22.833.650 22.303.952 Assets classified as held for sale
TOTAL ACTIVE (TOTAL ASSETS) 176.081.978 160.773.138
DATORII (LIABILITIES)
DATORII CURENTE CURRENT LIABILITIES
Datorii comerciale si similare 17 6.349.126 29.207.985
Trade and other payables Imprumuturi 18 83.383.704 87.298.911
Loans and borrowings Subventii pentru investitii - -
Grants received Datorii privind impozitul pe profit Tax liability Provizioane 20 2.466.218 3.071.523
Provisions
CEMACON SA
Situatia pozitiei financiare
(Statement of financial position)
for the period ending December 31st, 2014
(for the period ended 31 December 2014)
92.199.047 119.578.418
Datoriile incluse In grupurile destinate cedarii
Liabilities directly associated with assets in disposal groups classified as held for sale
DATORII PE TERMEN LUNG
NON-CURRENT LIABILITIES
Datorii comerciale si similare
Non-current trade and other liabilities
Imprumuturi
Loans and borrowings
Subventii pentru investitii
Grants received
Impozit amanat
Deferred tax
Provizioane
Provisions
17
18
21
-
6 4 . 5 3 2 . 4 9 0
1 . 3 1 0 . 1 2 0
-
30.527.265
1.385.762
65.842.611 31.913.027
TOTAL DATORII (TOTAL LIABILITIES) 158.041.658 151.491.446
ACTIVE NETE (NET ASSETS) 18.040.321 9.281.692
CAPITAL SI REZERVE (EQUITY)
Capital social
Issued capital
Actiuni proprii
Own Shares
Prime legate de emiterea de actiuni
Share premium
Ajustari din retratare
Translation adjustments
Rezerve
Reserves
Rezultat reportat
Retained earnings
Interesele care nu controleaza
Non-controling interest
23
24
17.433.454
-
-
-
27.140.819
(26.533.953)
33.424.855
-
-
-
26.477.035
(50.620.198)
TOTAL CAPITALURI (TOTAL EQUITY) 18.040.320 9.281.693
All amounts in Lei, if not otherwise stated
CEMACON SA
Situatia rezultatului global (Statement of comprehensive income)
pentru anul incheiat la 31decembrie 2014 (for year ended 31 decembrie 2014)
Venituri din vanzari
Sales revenues
3
31-Dec-14
LEI
58.305.029
31-Dec-13
LEI
44.876.878
Alte venituri din exploatare 4 971.123 6.641.473
Other operating revenues
Variatia stocurilor
864.855 (839.734)
Change in inventories of FG & WiP
Materii prime si consumabile 15 (11.735.094) (9.770.419)
Raw material and consumables used
Cheltuieli de personal 6 (9.225.855) (6.837.943)
Personnel Expenses Amortizare si deprecieri (5.491.679) (5.055.030)
Depreciation and amortisation expenses Cercetare si dezvoltare - -
Research and development Alte cheltuieli din exploatare 5 (27.756.433) (26.206.693)
Other operating expenses Profit / (Pierdere) din exploatare 5.931.946 2.808.532
Profit / (Loss) from operation
Venituri / (costuri) financiare nete 7 (8.952.395) (10.028.944) Finance cost
Partea din profitul aferent entitãtilor asociate
- -
Income from associates Profit / (Pierdere) inainte de impozitare (3.020.449) (7.220.412)
Profit before tax Cheltuieli cu impozite 8 1.447.960 685.274
Profit / (Pierdere) (1.572.489) (6.535.138)
Profit after tax
Reevalurea imobilizarilor corporale 1.818.849 29.318
Impozit Amanat Aferent Diferentelor din reevaluare (940.380) (85.468)
Total alte elemente ale rezultatului global 878.469 (56.150)
Total other elements of other comprehensive income
Total rezultat global (694.020) (6.591.288)
Comprehensive income total
All amounts in Lei, if not otherwise stated
CEMACON SA
Situatia fluxurilor de numerar (Statement of Cash-flow)
pentru anul incheiat la 31decembrie 2014 (for year ended 31 decembrie 2014)
Fluxuri din activitati de exploatare 31-Dec-14 31-Dec-13
Cash flow from operating activities LEI LEI
Incasari de la clienti 66.108.313 52.654.489
Customer encashments Plati catre furnizori (47.750.283) (33.738.925)
Supplier payments Plati catre angajati (4.529.700) (3.351.461)
Payments to employees Dobanzi platite - -
Interest Paid Plati impozite si taxe (11.879.434) (10.271.852)
Tax Payments Impozit pe profit platit - -
Income Tax Paid Incasari din asigurari 23.563 49.011
Inssurance encashments Plati de asigurari (261.298) (168.888)
Insurrance payments Alte incasari - 243.428
Other Encashments
Trezoreria neta din activitati de exploatare 1.711.161 5.415.802
Cash from operating activities
Fluxuri de trezorerie din activitati de investitii
Cash flow from investing activities
Plati pentru achizitionarea de actiuni Payments for aquiring shares Plati pentru achizitionarea de imobilizari corporale (3.614.834) (452.251)
Payments for aquiring assets Incasari din vanzarea de imobilizari corporale 306.374 2.250
Encashments from sold assets Dobanzi incasate 51.694 45.755
Encashments from interest Dividende incasate - -
Encashment from dividends
Trezoreria neta din activitati de investitie (3.256.766) (404.246)
Cash from inveting activities
Fluxuri de trezorerie din activitati de finantare
Cash flow from financing activities
Incasari din aport de capital 7.694.683 -
Encashments form share capital increase
CEMACON SA
Situatia fluxurilor de numerar (Statement of Cash-flow)
pentru anul incheiat la 31decembrie 2014 (for year ended 31 decembrie 2014)
Incasari din imprumuturi
Encashments form loans
2.237.630 -
Plata datoriilor aferente leasing-ului financiar (754.040) (785.703)
Payments for financial lease Rambursari credite (2.207.396) (44.555)
Loan Reimbursments Dividende platite si dobanzi bancare platite - -
Dividends paid and bank interest paid
Trezoreria neta din activitati de finantare 6.970.877 (830.258)
Cash from financing activities
Crestere /scadere neta de numerar 5.425.272 4.181.298
Net increase/decrease in cash and cash equivalents
Numerar si echivalente de numerar la inceputul
perioadei
6.913.389 2.721.237
Cash and cash equivalents at beginning of period
Numerar si echivalente de numerar la sfarsitul perioadei 12.338.661 6.902.535
Cash and cash equivalents at end of period All amounts in Lei, if not otherwise stated
CEMACON SA Situatia modificarilor capitalului propriu
(Statement of changes in equity) pentru anul incheiat la 31decembrie 2014
(for year ended 31 decembrie 2014)
31-Dec-12 35.501.598 - 23.604.532 1.142.146 1.700.933 (33.182.009) - (2.162.210) (10.665.606) 15.939.384
Rezultatul global curent - - - - - (6.535.138) - - - (6.535.138)
Current global result
Alocari rezerva legala - - - - - - - - - -
Legal reserves distribution
Erori contabile (ajustare impozit pe profit) - - - - (237.445) - - (237.445)
Accounting Errors
Diferente capitalizate aferente impozitului
amanat - - - - - - - 85.468 - 85.468
Capitalized amounts related to deffered
tax
Diferente din reevaluare - - 29.424 - - - - - - 29.424
Reevaluation differences
Rezerve aferente iesirilor de mijloace fixe - - - - - - - - - -
Reserves related to non-current assets disposals
31-Dec-13 35.501.598 - 23.633.956 1.142.146 1.700.933 (39.954.592) - (2.076.742) (10.665.606) 9.281.693
Rezultatul global curent - - - - - (1.572.489) - - - (1.572.489)
Current global result
Ajustari erori contabil - - - - - (121.421) - - - (121.421)
Accounting Errors
Diferente capitalizate aferente impozitului
amanat - - - - 940.380 - 940.380
Capitalised differences related to deffered
tax -
Cresteri din reevaluari - - 1.836.599 - - - - - - 1.836.599
Increase from reevaluation
Diminuari din reevaluare - - (17.751) - - - - - - (17.751)
Decrease from reevaluation
Diminuare de capital prin acoperirea
pierderilor (25.761.453) - - - - 25.761.453 - - - -
Capital subscris Actiuni proprii Rezerve din Rezerve legale Alte reserve Rezultat Prima Alte elem. Prima aplicare Total si ajustari reevaluare nedistribuit aplicare a capitaluri a IAS29 Issued capital and Own shares Reevaluation Legal reserves Other Undistributed IAS/IFRS proprii adjustments reserves reserves result 1st Other 1st application Total application capital of IAS 29 of IAS/IFRS elements
CEMACON SA
Situatia fluxurilor de numerar (Statement of Cash-flow)
pentru anul incheiat la 31decembrie 2014 (for year ended 31 decembrie 2014)
Share Capital Decrease
Majorare de capital prin aport 7.693.309 - - - - - - - - 7.693.309
Share capital increase
Rezerva din reevaluare realizata aferenta
casarilor - - (18.702) - 18.702 - - - - -
Reevaluation differences for disposed
assets
31-Dec-14 17.433.454 - 25.434.102 1.142.146 1.719.635 (15.887.049) - (1.136.362) (10.665.606) 18.040.320
All amounts in Lei, if not otherwise stated
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
Cuprins (Contents)
Contents
1. Accounting policies of Cemacon 12
2. Accounting estimates 31
3. Revenues 33
4. Other operating revenues 33
5. Operating expenses 34
6. Personnel expenses 35
7. Financial income and expenses 36
8. Taxes 36
9. Earnings per share 37
10. Dividends 38
11. Tangible assets 39
12. Intangible assets 45
13. Goodwill and depreciation 46
14. Financial assets 47
15. Stocks 49
16. Trade receivables and other receivables 50
17. Trade and other liabilities 51
18. Loans 52
19. Employees’ benefits 55
20. Provisions 56
21. Deferred taxes 57
22. Assets and debts classified as for sale 58
23. Issued capital 59
24. Reserves 61
25. Lease 62
26. Transactions with affiliates 63
27. Cash and cash equivalents 66
28. Events subsequent to the reporting date 66
29. Adjustments of accounting errors 69
30. Payment based on shares 69
31. Other information 70
32. Contingents 71
33. Reconciliation with the financial statements in the format published by the Ministry of Finance (MF) 75
1. Accounting policies of Cemacon
Drafting principles The main accounting policies adopted in preparing the financial statements are listed below. These policies
have been constantly applied, for all the reported years, unless otherwise provided.
The financial statements are expressed in the national currency (Lei), which is also the entity’s functional currency.
Amounts are rounded up to the closest Leu, unless otherwise provided.
These financial statements have been drafted in accordance with:
the International Financial Reporting Standards (IFRS) adopted by the European Union;
the Accounting Law 82/1991, as republished (“Law 82”);
Order no. 881/2012 of the Ministry of Finance on the application of the International Financial
Reporting Standards (“IFRS”) by trading companies whose securities are admitted to trading on a regulated market;
Order no. 1286/2012 of the Ministry of Finance approving the Accounting Regulations in
accordance with the International Financial Reporting Standards (IFRS), applicable to trading companies whose securities are admitted to trading on a regulated market, as subsequently
amended.
Drafting the financial statements in accordance with the IFRS requires using certain critical accounting estimates. Drafting the financial statements in accordance with Order 1286/2012 of the Ministry of Finance
requires that the Company’s management makes estimates and hypotheses affecting the reported value of
assets and liabilities, the presentation of contingent assets and liabilities upon drafting the financial statements, and the reported income and expenditure for the period.
Estimates and judgments are continuously assessed and rely on historic experience and other factors,
including the forecasts on future events that are thought to be reasonable under the circumstances.
These financial statements have been drafted according to the principle of business continuity which means that the Company will continue doing its business in the predictable future. To assess the applicability of
this assumption, the management analyses the forecasts on future cash inflows.
Based on these analyses, the management believes that the Company will be able to continue doing its
business in the predictable future and, therefore, the application of the principle of business continuity in drafting the financial statements is well-founded.
Accounting policies (continuation) Measurement basis The financial statements have been drafted based on the historical cost, except for the items mentioned in
the notes.
Change of accounting policies
a) New standards, interpretations and amendments effective as of January 1st, 2014 A set of new standards, interpretations and amendments effective for the first time for periods starting on
(or after) the 1st of January 2014 have been adopted in these financial statements. The nature and effect of each new standard, interpretation and amendment adopted by the entity are detailed below. Note: Not all
the new standards and interpretations in force for the first time for periods starting in (or after) January 2014 are effective in the annual financial statements of the company.
IFRS 12 Disclosure of interests in other entities (applicable as of January 1st, 2014), adopted by the
EU on 11 December 2012, requires the supply of additional information on the significant judgments and
hypotheses made in order to determine the nature of the interest held in an entity or arrangement, subsidiary, joint arrangement and partnerships and non-consolidated structural entities.
b) New standards, interpretations and amendments effective as of January 1st, 2014
The following standards/interpretations have been issued, but are not mandatory for the financial year
ending on December 31st, 2014. These have not been adopted in preparing the financial statements of the year ending on December 31st, 2014 and are expected to affect the entity during the period they are
applied for the first time.
Standards that could have a financial impact.
IAS 19 (amended in November 2013) - Determined benefit plans: contributions from employees.
This amendment comes with specific objectives that:
Offer a practical use to certain contributions from employees or from third parties to a plan of
determined benefits, but only to contributions that are independent from the number of years of
service
Clarifies the treatment of contributions from employees or from third parties to a plan of
determined benefits that are not subject to practical use. These are distributed to accounts the
same way the gross benefit is attributed in accordance with IAS 19.70)
Application period: Annual reporting periods starting from or after the 1st of January 2014
Standards that could have an impact on the presentation
IAS 19 (amended in November 2013) – Depreciation of assets
Accounting policies (continuation)
Requires the presentation of the recoverable value of an asset, only during the periods when the
depreciation was booked or resumed regarding such asset.
Extends and clarifies the presentation requirements when the recovery value of an asset was
determined based on the fair value less the elimination costs
Application period: Annual reporting periods starting from or after the 1st of January 2014
Revenue recognition Revenues include the fair value of the amounts collected or to be collected as a result of selling the
provided goods and services.
Sales revenues from selling goods are recognized the moment the Company has transferred to the
purchaser the main risks and benefits associated to holding the goods.
These criteria are considered to be met when commodities are delivered to the purchaser. If the purchaser has a return right, the entity postpones the revenue recognition until the return right expires.
Sales revenues from the provision of services are recognized if they can be credibly measured and it its
likely that the company receives their money equivalent. Revenues from the provision of services are
recognized the moment such services are being provided.
Rental revenues are recognized based on the principles of commitment accounting in accordance with the economic substance of the relevant contracts.
Interest revenues are recognized on a regular basis, as such revenues are generated, based on the
commitment accounting method.
Commercial discounts granted after issuing the invoice are booked in the profit and loss account as part of
the operating revenues.
In these financial statements, the income and expenditure are presented as gross amounts. In the balance sheet, liabilities and receivables involving the same partners are presented as net amounts if there is a
compensation right.
Conversion of foreign currency transactions
The Company’s transactions in foreign currencies are booked based on the exchange rates announced by
the National Bank of Romania (“NBR”) for the transaction date.
At the end of each month, foreign currency balances are converted into Lei based on the exchange rates announced by the NBR for the last banking day of the month.
Gains and losses deriving from the settlement of foreign currency transactions and from the conversion of
monetary assets and liabilities expressed in foreign currencies are recognized in the profit and loss account, as part of the financial result.
Accounting policies (continuation) Financial assets
The entity classifies the financial assets into one of the categories presented below, depending on the purpose they were purchased for.
Evaluation based on the fair value through the profit and loss account – achieved only for categories of derivatives kept for sale. These are recognized in the balance sheet at their fair value,
whereas changes in value are recognized in the profit and loss account.
Recognition as debt or receivable – this category is for assets having a fixed maturity or that can
be easily determined and are not quoted on an active market. These usually appear from formed provisions relevant to the commodities or services for the customer, but may also incorporate other types of monetary assets relevant to contracts. These are initially recognized at their fair value plus
the transaction costs, directly attributable to the purchase or issue, being later recognized at the amortized value using the market interest rate method less the impairment adjustment.
The impairment adjustment is recognized when there is strong proof that the entity will not be able to
collect all the amounts having reached maturity according to the collection deadlines, the adjustment sum is given by the difference between the net book value and the present value of the future cash flows relevant
to the adjusted receivables. For receivables presented as net value such adjustments are booked on separate adjustment accounts, whereas the loss is recognized as administrative expenditure in the global
result statement. The moment the failure to collect is certain, the gross value of the asset is cancelled by the relevant provision value.
At regular time intervals, the entity will renegotiate the contractual terms regarding the outstanding
receivables for customers who have had a good transaction history. Such renegotiations will determine
changes in the collection time and the expected new cash inflows will be discounted using the initial interest, any difference resulting from the application of the method will be recognized in the profit and loss
account.
The entity’s financial assets consist of trade receivables, other receivables, cash and cash equivalents, included in the statement of financial position.
The cash and cash equivalents include: the petty cash and cash in current bank accounts, term deposits,
other short-term investments with very high liquidity or falling due within 3 months, and for the purpose of
drafting the statement of cash flow – bank overdraft – it is presented under the current liabilities and loans in the statement of financial position.
The accounting of foreign currency monetary operations is kept both in the currency they were conducted
and in the national currency, the conversion into the national currency is made according to the accounting policies regulating the conversion of foreign currency transactions, presented earlier herein.
Accounting policies (continuation) Financial liabilities The entity classifies the financial liabilities into one of the categories presented below, depending on the
purpose they were engaged for.
Evaluation based on the fair value through the profit and loss account – achieved only for
categories of derivatives kept for sale. These are recognized in the balance sheet at their fair value, whereas changes in value are recognized in the profit and loss account.
Other financial liabilities: – this category includes the following:
Bank loans are initially recognized at their fair value less the transaction costs directly attributed to
obtaining the loans.
Liabilities and other short-term monetary liabilities are initially recognized at their fair value, being later presented at their cost value using the market interest rate method.
Commercial liabilities are booked at the value of the amounts to be paid for the received assets or
services.
Equity The financial instruments issued by the Company are classified as equity only to the extent that they cannot
be classified as financial liabilities or financial assets.
The ordinary shares of the Company are classified as equity instruments.
Indebtedness cost
Indebtedness costs are recognized as financial expenses according to the contractual provisions for the
period when the indebtedness costs fall due or are actually engaged.
Indebtedness costs that are directly attributable to the purchase, construction or production of an asset having long production cycle are included in the cost of that asset.
The production cost of assets having a long production cycle includes only indebtedness costs relating to
the production period.
The indebtedness costs that are included in the production cost of assets having a long production cycle are
the following: total interest expense;
financial expense relevant to financial leasing contracts;
exchange rate differentials relevant to foreign currency loans, as far as these are construed as an
adjustment of the interest expense.
Accounting policies (continuation) The cost capitalization starts when:
expenses for such asset are borne;
indebtedness costs are borne, and
the necessary activities for preparing the asset in view of using it as pre-established or selling it are on-going.
The indebtedness cost capitalization is interrupted during extended periods when no work is being conducted to achieve that asset.
The indebtedness cost capitalization is ceased when most of the necessary activities for preparing the asset
that has a long production cycle in view of using it as pre-established or selling it are conducted, even if some of the administrative works may still continue.
The indebtedness costs borne during periods when capitalization is interrupted or after their capitalization ceases, are recognized in the financial expenditure entries.
Pensions and other post-retirement benefits During the normal course of business, the Company makes payments to the public health fund, pensions
fund, and unemployment fund on behalf of its employees, at the statutory rates. All the Company’s employees are members of the pension scheme of the Romanian state. These costs are recognized in the
profit and loss account at the same time wages are recognized.
Other long-term benefits Other employee benefits expected to be settled entirely within 12 months after the end of the reporting
period are presented as short-term liabilities.
Other employee benefits that are not extinguished within 12 months as of the end of the reporting period are presented as long-term liabilities and are calculated using discount rates. This is the case of employee
benefits upon retirement. For more details, please refer to Note 18 – Employee Benefits.
Leasing contracts The leasing contracts for tangible fixed assets whereby the Company undertakes all the risks and benefits
relevant to the property are classified as financial leasing contracts. Financial leasing costs are capitalized at the estimated discounted value of payments. Each payment is divided between the principal component and
the interest component in order to obtain a constant interest rate during the reimbursement period. The payable amounts are included in the short-term or long-term liabilities. The interest component is included
in the profit and loss account during the contract period. Assets held based on financial leasing contracts
are capitalized and amortized during their useful life.
Accounting policies (continuation) The leasing contracts where a significant part of the risks and benefits associated to the property is
withheld by the lessor are classified as operational leasing contracts. The payments made based on such a contract (net of any facilities granted by the lessor) are recognized in the profit and loss account on a linear
basis during the contract period.
Purchased fixed assets
a) Intangible assets Intangible assets include computer software created by entities or purchased from third parties for internal
needs, such as recipes, formulas, patterns, projects and prototypes.
Other intangible assets can be subject to straight-line amortization for a period of 3 years.
Expenses allowing intangible fixed assets to generate future economic benefits beyond the originally foreseen performance are added up to their original cost. These expenses are capitalized as intangible fixed
assets, unless they are integral part of tangible fixed assets.
Development is the application of research discoveries or other knowledge in a plan or project having to do
with the production of materials, devices, products, processes, systems or services, new or substantially improved, before starting their commercial production or use.
A fixed asset generated by development is recognized only is all the following elements can be
demonstrated:
technical feasibility for accomplishing the intangible fixed asset, so that it is available for use or
sale;
the company’s intent of accomplishing the intangible fixed asset and of using or selling it; the capacity of using or selling the intangible fixed asset;
the way the intangible fixed asset generates probable future economic benefits, the existence of a
market for the production generated by the intangible fixed asset or for the intangible fixed asset
as such; the availability of technical, financial or other resources suitable for complementing the
development and for using or selling the intangible fixed asset;
the capacity to credibly assess the expenses attributable to the intangible fixed asset during its
development period.
The development expenses are recognized at their production cost.
Accounting policies (continuation) b) Tangible assets
The purchased fixed assets are initially recognized at their acquisition cost. Later, they are recognized,
depending on the type of asset, at the following values:
Lands are evaluated at their reevaluated value
Buildings are evaluated at their reevaluated value
Equipment is evaluated at its historical cost.
On December 1st, 2014, the Company conducted a reevaluation of the land, buildings, and equipment, less
for the production equipment located at Recea, for which impairment adjustments were booked.
Following the reevaluation, the assets classified as sold were booked at the lowest of the book value and
the reevaluated value.
For constructions and equipment classified for sale, the decrease of the book value was booked as expense, whereas the decrease of the book value of the land was booked as impairment adjustment.
For the Company’s assets currently in operation, the increase of the book value resulting from the
reevaluation of lands and buildings is booked as reserves, as part of the equity. The decrease compensating the previous increase booked with regard to the same asset is booked as reserves, included directly in the
equity; all the other decreases are recorded in the profit and loss account.
If a completely amortized tangible asset can still be used, upon doing its reevaluation a new value and a
new economic useful life are established, relevant to the period during which it is estimated to continue being used.
The cost of a tangible asset also includes the originally estimated costs of dismantling and moving it for
decommissioning, as well as the costs of restoring the site where the fixed asset is located, when such amounts can be credibly estimated and the Company does not have an obligation regarding the
dismantling, the moving of the tangible fixed asset, and the site restoration.
The maintenance and repairs of tangible assets are booked as expenses as soon as conducted, whereas
significant improvements caused to tangible assets that increase their value or useful life or significantly increase their capacity to generate economic benefits, are capitalized.
The amortization is calculated based on the entry value, using the straight-line method along the estimated
useful life of assets, as follows:
Asset Years
Constructions 5 – 45
Technical plants and machinery 3 – 20 Other plants, equipment and furniture 3 – 30
Accounting policies (continuation) The amortization is calculated starting with the month following their start-up, until the full recovery of their
entry value.
Lands are not amortized because they are considered to have an indefinite useful life.
Regarding the equipment within the production factory at Recea, the Company’s management has decided that its amortization be calculated per product unit.
The amortization method calculated per product unit is applied because the nature of the tangible fixed asset justifies the application of such an amortization method, the useful life of fixed assets is expressed
using the number of units produced expected to be obtained by the enterprise by using that asset, in the Company’s case 8,470,000 sqm.
According to this method, the amortization rate is determined by dividing the monthly/annual production to
the total number of products.
Since this type of amortization is difference from the fiscal depreciation, the company calculates and books
a deferred tax relevant to the difference between the fiscal depreciation and the amortization per product unit.
Amortization is ceased for assets classified for sale.
Tangible fixed assets that are quashed or sold are eliminated from the balance sheet together with the
relevant cumulated amortization. Any profit or loss resulting as a difference between the revenues generated by the quashing and its unamortized value, including the expenses caused by such an operation,
is included in the profit and loss account under “Other operating revenues” or “Other operating expenses”,
as the case may be.
When the Company recognizes the cost of a partial replacement (replacement of a part) in the book value of a tangible fixed asset, the book value of the replaced part, with its relevant amortization, is quashed.
When selling or quashing reevaluated assets, the amounts included in the reevaluation reserves are
transferred to reevaluation surplus.
Internally generated fixed assets (development costs)
The tangible and intangible fixed assets production activity requires a separation of the process into a research stage and a development stage.
When a distinction between the research stage and the development stage of an internal project for
creating an intangible fixed asset cannot be made, the expenses relevant to that project are considered as having to do with the research stage, and are recognized in the profit and loss account.
No fixed asset deriving from research or from the research stage of an internal project is recognized. Research expenses are recognized as expenditure in the profit and loss account as soon as they are
generated.
Accounting policies (continuation)
Research is the original and planned investigation conducted in view gaining new knowledge or scientific or
technical meanings.
The production cost of the fixed assets originating from the development stage includes:
direct expenses relevant to production, such as direct materials, power consumed for technological
purposes, costs representing employee wages, legal contributions, testing costs regarding the correct operation of the asset, professional fees and charges paid in connection with the asset, the
cost for obtaining the necessary authorizations;
Development expenses that are recognized as intangible fixed assets are amortized for the period during which the Company expects to obtain benefits following the developed products.
Stripping costs, during the production stage of a surface mine.
The company Cemacon SA conducts Clay exploitation activities by performing mining works in the open in the exploitation perimeter Recea Cemacon, Varsolt commune, Salaj county. The clay deposit has the shape
of a gentle hill, covered by a layer of vegetal soil having an average thickness of 0.3 m. In some areas of
the deposit, under the vegetal soil layer, there is sandy clay that is not subject to exploitation. The thickness of the sandy clay layers varies between 1m and 5m. For the exploitation activity to be conducted
under optimal conditions, the exploitation perimeter must be prepared by removing the covering consisting of vegetal soil and sandy clay, which cover the deposit.
The clay exploitation in the quarry is conducted in exploitation steps. Following the activity conducted in the quarry, the following types of materials may result:
Rubbish: vegetal soil and sandy clay – as a result of the stripping activity, unused in the production activity or capitalized in any other way.
Useful substance: yellow clay and blue clay – as a result of the exploitation activity, used in the production
activity Rubbish (stripping) – as a result of the stripping activity, unused in the production activity, will be registered
according to the International Financial Reporting Standards IFRIC 20. The fixed asset will be called “Stripping activity asset” This asset must be recognized only if the following conditions are met:
1. It is likely that the future economic benefit relevant to the stripping activity
devolves on the entity; 2. The entity can identify the component of the lode to which the access has been
improved;
3. The costs relevant to the stripping activity regarding that component can be reliably evaluated;
The asset relevant to the stripping activity will be booked as an additional item or as an improvement of an
existing asset.
The initial evaluation of the asset is made at the cost value, which is a cumulation of the costs directly borne for conducting the stripping activity through which the access to the identified ore component is
improved, plus an allocation of the directly attributable management expenses.
The asset relevant to the stripping activity must be systematically depreciated or amortized, in accordance
with the accounting policies regarding the amortization.
Accounting policies (continuation) Depreciation of fixed assets Tangible and intangible fixed assets are tested for depreciation when facts and circumstances indicate that
the book value may not be recoverable.
An impairment loss is recognized as the sum by which the book value of the asset exceeds the recoverable sum. The recoverable sum is the largest of the fair value of the asset less the sale costs and the utility
value.
To evaluate the depreciation, assets are grouped down to the lowest level where separately identifiable
cash flows exist.
Dividends
Dividends are recognized when they can be duly paid:
In the case of interim dividends, payable to the existing shareholders, the recognition is effective
when they are declared by the Directors.
In the case of final dividends, their recognition is effective when they are approved at a General Meeting of Shareholders.
Deferred tax
The assets and liabilities regarding the deferred tax are recognized if the book value of an asset or liability in the statement of financial position differs from its taxation base, except for differences appearing on:
the initial recognition of the goodwill
the initial recognition of an asset or liability in a transaction that is not a combination of enterprises
and at the transaction time does not affect the bookkeeping or the taxable profit, and
investments in subsidiaries and jointly-controlled entities, if the group is capable of controlling the
time of taking charge of the difference, and if it is likely that the difference does not reverse in the near future.
The recognition of receivables regarding the deferred tax is limited to cases where it is likely that the
taxable profit is available as compared to the difference that can be used.
As regards the assets having to do with the deferred tax deriving from real estate investments evaluated at
their fair value, it will be presumed that the recovery is achieved rather by sale than by utilization.
The value of the asset or of the liability is determined using the taxation rates already adopted or largely adopted until the reporting date and are expected to apply is the deferred tax liabilities / (assets) are
discounted / (recovered).
Assets and liabilities regarding the deferred tax are compensated when the company has the legal right to
compensate the current fiscal assets and liabilities and the deferred tax assets and liabilities when they refer to the taxes collected by the same fiscal authority from the same company.
Accounting policies (continuation) Inventories
Inventories are originally recognized based on their cost value and later based on the lowest of the cost
value and the net realizable value. The cost is composed of all the purchase costs, the conversion cost and other costs borne in order to bring the inventories to the current location, in their current condition.
In the case of end products, the production cost includes the acquisition cost of raw materials and
consumables and the production expenses directly attributable to the asset.
The cost is determined based on the “First-in, First-out” (FIFO) method. The indebtedness costs are not included.
Where necessary, adjustments are made for stocks, physically and morally outdated. The net realizable
value is estimated based on the sale price netted against the sale expenses.
When there is a change in the use of a tangible fixed asset, meaning that it is going to be improved in view of its sale, the Company books the transfer of the asset from the tangible fixed assets category into the
fixed assets held for sale category.
As of the balance sheet date, the inventories are evaluated at the lowest of the cost value and the net
realizable value.
If the book value of inventories is larger than the book value (net realizable value), the value of the inventories is reduced down to the net realizable value by making an impairment adjustment.
Assets in the form of inventories are evaluated based on the book value, less the acknowledged impairment
adjustments.
Due to the nature and specificity of the activity, for certain categories of inventories such as raw materials,
spare parts, auxiliary materials, and end products, the inventories are analysed on the balance sheet date and an adjustment is made for products that are deteriorated or morally outdated.
Fixed assets held for sale Fixed assets are classified as held for sale the moment they:
are available for immediate sale
the company’s management has committed a sale plan there are only slight chances that the sale plan suffer major changes or be withdrawn
an active program for finding purchasers is started
the asset group is traded at a reasonable price in comparison to the fair value
the sale is expected to be concluded within 12 months as of classifying the assets as held for sale.
Assets held for sale are evaluated at the lowest of: the book value before the assets are classified as held for sale, according to the company’s
accounting policies
Assets held for sale are not amortized
Accounting policies (continuation) Subsidies
Subsidies received in view of purchasing assets such as tangible fixed assets are booked as investment
subsidies and are recognized in the balance sheet as deferred income. The deferred income is recognized in the profit and loss account as the amortization expenses are booked or upon quashing or assigning the
assets purchased using such subsidy.
Provisions The entity will record a provision in its accounting books only when:
(a) it has a current liability (legal or implied) generated by a previous event;
(b) it is likely (there are more chances for it to happen than not to happen) that a resource outflow affecting the economic benefits be required in order to extinguish the liability; and
(c) a relevant estimate of the liability value can be made.
The sum booked as a provision is the best estimate of the payments required for extinguishing the current
liability on the balance sheet date; in other words, the amount the entity would normally pay on the balance sheet date in order to extinguish the liability or transfer it to a third party, at that particular time.
In the provision evaluation process, the entity will take into account the following: a) risks and uncertainties are taken into account. However, uncertainties do not justify the
creation of excessive provisions or the deliberate overvaluation of liabilities. b) discount the provisions if the effect of the time-value of money is significant, using a discount
rate(s), before taxation, reflecting the current evaluations on the market of the time-value of money, and the liability-specific risks that have not been reflected in the best estimate of
expenses. If a discount is used, the provision increase due to the passage of time is booked as
an interest expense; c) future events are taken into account, such as legislation amendments or technological
changes, if there is sufficient proof that they would occur; and d) not take into account gains from the forecasted assignment of assets, even if such prospective
assignments are tightly related to the forecast generating event.
Provisions will be reanalysed on each balance sheet date and will be adjusted so as to reflect the best current estimate. If it is no longer likely that resource outflows – affecting the economic benefits – are
required to extinguish the liability, the provision will be cancelled.
The provisions will only be used for the purposes they were originally formed.
The entity will not recognize provisions for future losses from the exploitation activity.
The value recognized as provision will be the best estimate of the necessary costs for extinguishing the
current liability on the balance sheet date.
The best estimate of the necessary costs for extinguishing the current liability is the sum the entity will
reasonably pay in view of extinguishing the liability on the balance sheet date or to transfer it to a third party at that particular time. Often, it can be impossible or highly expensive to extinguish or transfer a
liability on the balance sheet date. However, the estimate of the amount the entity will reasonably pay in view of extinguishing or transferring a liability is the expression of the best estimate of the necessary costs
for extinguishing the current liability on the balance sheet date.
Accounting policies (continuation) The estimates of the financial results and effects are determined by the analysis methods of the enterprise’s
management, considering the experience gained in similar transactions and, in some cases, the reports drafted by independent experts. The elements taken into account include any proof provided by events
occurring after the balance sheet date. However, the estimate of the sum that the enterprise will reasonably pay to extinguish or transfer a liability is the expression of the best estimate of the necessary costs for
extinguishing the current liability on the balance sheet date.
The estimates of the financial results and effects are determined by the analysis methods of the enterprise’s
management, considering the experience gained in similar transactions and, in some cases, the reports drafted by independent experts. The elements taken into account include any proof provided by events
occurring after the balance sheet date.
Doubtful elements regarding the sum to be recognized as a provision are treated in different ways, depending on the circumstances. If the provision to be evaluated involves a wide range of elements, the
liability is estimated by weighing all the possible results with the probabilities to achieve each of them. This statistical method of evaluation is called “forecasted value”. Therefore, the provision will differ depending on
the probability (e.g. 60% or 90%) for a certain loss to be suffered. If there is a continuous range of
possible results and if the probability for each of them to occur is equal, the middle point of the range will be used.
If a single liability is evaluated, the most probable individual result may form the best estimate of the debt.
However, even in such situation, the entity will also take into account other possible results. Where other possible results are either higher or lower than the most probable result, the best estimate would be a
larger or smaller amount. For example, if the entity must remedy an error in the construction of a factory built for a customer, the most probable result would be that the repair is successfully conducted since the
first attempt at a cost of 1,000, but a provision is formed for a larger amount if it is more likely that several
attempts could be necessary.
The provision is evaluated before tax since the effects of taxation on the provision and changes of the latter are contemplated by IAS 12 “Profit Tax”.
If a part of or all the expenses necessary to extinguish a provision are expected to be reimbursed by a third
party, the reimbursement must be recognized only when it is certain that it will be received if the company extinguishes its liability. The reimbursement must be considered as a separate asset. The sum recognized
for reimbursement must not exceed the amount of the provision.
In the profit and loss account, costs related to a provision will be presented at its value reduced by the
amount recognized for reimbursement.
Provisions will be revised with each balance sheet and adjusted so as to reflect the best current estimate if a resource outflow incorporating the economic benefits is no longer probable; to extinguish a liability, the
provision must be cancelled.
If a discount is used, the book value of a provision increases during each period in order to reflect the
passage of time. This increase is recognized as indebtedness cost.
Accounting policies (continuation) Affiliated parties
An affiliated party is an individual or a company associated to the entity preparing and presenting the
financial statements.
Affiliated persons:
A company is an affiliated party if one of the following conditions is applicable:
the entity and the reporting company belong to the same group (which means that each parent
company, subsidiary and other subsidiary companies reporting to the same parent company are
affiliated parties to one another). the entity is a shareholder or a partnership of the entity
both companies are affiliated or associated in partnership with the same third party
the entity is a partnership of a third party and the other entity is a shareholder of the same third
party
the entity is controlled or controlled in a partnership by an affiliated person, as defined under
affiliated persons. the affiliated party having control or associative control of the reporting entity has significant
influence on the entity (which is considered to be an affiliated party) or is a member of the key
management of the entity.
Transactions with the affiliated parties are defined as a transfer of resources, services or liabilities between the reporting entity and the affiliated party, regardless of whether a price is paid.
All the transactions with the affiliated parties are made based on the transfer pricing principles.
Risk management
Market risk and foreign exchange risk
Most of the transactions made by the company are expressed in Lei, which does not expose the company to the foreign exchange risk, as seen from this perspective.
However, the foreign exchange risk is a strong factor influencing the balance sheet and the financial
performance considering the contracts signed by the company, which are currently expressed in Euros. In 2014, when the exchange rate witnessed strong variations because of the political crisis in our country and
because of the economic crisis at European Union level, the losses due to exchange rate variations were
large and influenced the final net result.
Accounting policies (continuation) Credit risk In 2014, the commercial policy of Cemacon witnessed a major change in terms of payment conditions
granted to customers, so that last year the weight of prepaid sales decreased as compared to the previous year.
Nevertheless, despite the strong pressure coming from the competition and the distributors, the company adopted a policy of making transactions solely with trusted parties and of getting sufficient guarantees,
when needed, as a means of reducing the risk of financial loss as a result of breach of contract.
The exposure of the company and the credit rating of the contracting third parties are monitored by the management.
The trade receivables of the company consist of a large number of customers. The permanent evaluation of customer credit is made on the financial standing of customers.
To reduce the credit risk, the company has taken out a commercial credit insurance with Coface company.
Liquidity risk
The management of the liquidity risk devolves on the company’s management, who formed a suitable
framework for managing the risk regarding the short-term and medium-term provision of funds. The company manages the liquidity risk by continuously monitoring the real cash flow and by placing in
correspondence the maturity profiles of financial assets and liabilities.
Interest rate risk
The company benefits from long-term loans and short-term loans with a variable interest rate.
Currently, Cemacon has signed the agreement letter for restructuring bank loans in view of bringing balance
in the balance sheet and a reduction of the incidence of interest costs on the annual performance.
Events after the reporting date
The events after the balance sheet date are those events, both favourable and unfavourable, occurring between the balance sheet date and the date until the financial statements are authorized for lodging. Two
types of events can be identified: a) Those proving the conditions existing on the balance sheet date (events determining an
adjustment of the financial statements), and
b) Those providing indications about conditions having occurred after the balance sheet date
(events that do not determine an adjustment of the financial statements).
The financial statements of the company Cemacon SA are subject to approval by its shareholders after being issued, the approval date of the financial statements issue is the financial statements issue date, not
the date when these were approved by the shareholders.
The events after the balance sheet date include all the events occurring until the date until the financial
statements are authorized for lodging, even if such events occur after publishing an announcement on the profit or other financial information selected.
Accounting policies (continuation) The entity will adjust the recognized values in its financial statements in order to reflect the events
determining an adjustment of the financial statements. The entity will not adjust the recognized values in its financial statements in order to reflect the events not
determining an adjustment of the financial statements. If the dividends of the holders of equity instruments (as defined in IAS 32, Financial instruments:
presentation and description) are proposed or declared after the balance sheet date, the entity does not have to recognize such dividends as debt on the balance sheet date.
According to IAS 1 “Presentation of financial statements”, the entity must present the value of dividends proposed or declared after the balance sheet date, but before authorizing the financial statement for
lodging. The entity may make these presentations of information either:
(a) in the balance sheet, as a separate component of the equity, or (b) in the notes to the financial statements.
The entity will not draft the financial statements based on the business continuity principle if the
management bodies determine after the balance sheet date either that they intend to wind-up the
enterprise or cease its trading activity, or that they have no other realistic variant besides these. A deterioration of the operating results and of the financial position following the balance sheet date
indicates the need to consider whether the business continuity principle is still suitable. If the business continuity principle is no longer suitable, the effect is so persistent that this IAS 10 Standard “Events after
the reporting period” requires a fundamental change of the accounting basis rather than an adjustment of the values recognized on the initial accounting basis.
The entity must present the date when the financial statements were authorized for lodging, as well as who gave such authorization. If the entity’s owners or others have the power to amend the financial statements
after their issue, the entity will state this fact.
The entity will publish the moment the financial statements were authorized for lodging because users must know that financial statements do not reflect events subsequent to that date.
If the entity receives, after the balance sheet date, information on the conditions having existed on the balance sheet date, the entity must update the information presented with regard to such conditions, in the
light of the new information. In some cases, the entity needs to update the information presented in its financial statements in order to
reflect the information received after the balance sheet date, even if such information does not affect the values the enterprise recognizes in its financial statements.
Share-based payment.
The company will apply the provisions of IFRS 2 “Share-based payment” to distribute to accounts the following share-based payment transactions, including:
1. Equity-settled share-based payment transactions, where the entity receives goods or services as
consideration for the capital instruments of the entity (stock or stock options), 2. Cash-settled share-based payment transactions, where the entity purchases goods or services by
engaging debts towards the supplier or provider of the same for the amounts consisting of the
price (or value) of the entity’s shares or other capital instruments of the entity, and 3. Transactions where the entity receives or purchases goods or services and the contractual terms
confer the entity or the provider of goods/supplier of services the possibility to settle the transaction in cash (or other assets) or by issuing capital instruments,
Accounting policies (continuation)
The shareholders’ transfer of the entity’s equity instruments to third parties having provided goods or services to the entity (including the employees) are share-based payment transactions only if the transfer is
made for a purpose different than the payment for the goods or services provided to the entity. This is also applicable to transfers of equity instruments of the holding or of equity instruments of another entity of the
group to the parties having provided goods or services to the entity.
A transaction with an employee (or some other third party) acting as holder of the equity instruments of the entity is not a share-based payment transaction. For example, if the entity grants to all holders of a certain
class of equity instruments the right of additionally purchasing equity instruments of that entity at a price
that is lower than the fair value of the instruments, and an employee receives such a right because he/she is the holder of equity instruments of that class, the granting or exercising of that right is not the object of a
transaction classified as a share-based payment transaction.
Share-based payment transactions are those share-based payment transactions where the entity purchases or receives goods or services. Goods include: inventories, consumables, machinery, equipment, plants,
intangible assets and other non-financial assets. However, the entity must not apply this IFRS to
transactions where the entity purchases goods as part of the net assets purchased in a combination of
enterprises to which IAS 22 is applicable. Therefore, the equity instruments issued in a combination of enterprises in exchange to obtaining control over the purchased company does not fall within its scope.
The entity will recognize the goods or services received or purchased in a share-based payment transaction
when it obtains the goods or when the services are provided. The entity must recognize a suitable increase in its equity if the goods or services have been received in the share-based payment transaction, or a debt
if the goods or services have been purchased in a cash-settled share-based payment transaction. If the goods or services purchased or received in a share-based payment transaction do not qualify to be
recognized as assets, they will be recognized as expenditure.
For equity-settled share-based payment transactions, the entity must assess the goods or services received
and, accordingly, increase its equity to the fair value of the received goods or services, only if the fair value cannot be credibly determined. If the entity cannot credibly estimate the fair value of the goods or services
received, the entity must determine their value and their relevant increase in equity, indirectly, by referring to the fair value of the granted equity instruments.
For transactions with employees and third parties providing similar services*, the entity must evaluate the
fair value of the services received by referring to the fair value of the granted equity instruments since the
fair value of the received services cannot be credibly estimated. The fair value of these equity instruments must be assessed on the assignment date.
Stocks, stock options or other equity instruments are granted to employees as remuneration, in excess of
the wage and other employee benefits. Usually, the direct evaluation of the services received is not possible for certain components of the employee remuneration. Also, the remuneration cannot be evaluated
independently from the fair value, without directly evaluating the fair value of the granted equity instruments. Moreover, stocks or stock options are granted rather as part of a bonus contract than as part
of a basic remuneration, for example as an incentive for the employees to remain with the company or to
recompense them for their efforts
Accounting policies (continuation) to improve the entity’s performance. By granting options or stock options in excess of other remunerations,
the entity pays additional remunerations in order to get additional benefits. The estimation of the fair value of such additional benefits is very difficult to make. Because of the difficulty to evaluate the fair value of the
services received, the entity must evaluate the fair value of the employee services received by referring to the fair value of the granted equity instruments.
There must be a presumption that the fair value of the goods and services received can be credibly
estimate. The fair value must be determined on the date the entity gets the goods or the other party
provides the services. In few cases, if the entity rejects the presumption because it cannot credibly estimate the fair value of the goods and services received, the entity must evaluate the goods and services received
and accordingly increase its equity by referring to the fair value of the granted equity instruments, evaluated at the date the entity obtains the goods or the other party provides the services.
The entity will distribute those services to accounts the moment they are provided by the third party during
the benefit entitlement period, while increasing its equity accordingly. For example:
a) if stock options are granted to an employee only if he/she has three years of service, then the
entity assumes the services provided by the employee as consideration for the stock options to be received during the three years, during the benefit entitlement period.
b) if an employee receives stock options conditional on performance and remains an employee until the achievement of that performance, and the benefit obtaining period depends on meeting such
condition, the entity will assume the services to be provided by the employee as consideration for the stock options to be received during the benefit entitlement period. The entity estimates the
benefit granting period upon granting them, based on the probability of meeting the performance condition. If the performance condition is a market-determined condition, the estimation of the
length of the benefit entitlement period is consequent on the assumptions used in estimating the
fair value of the granted options and will not be subsequently revised. If the performance condition is not a market-determined condition, the entity must revise the estimation made with regard to
the length of the benefit granting period if subsequent information indicates that the length differs from the previously estimated one.
For transactions made by referring to the fair value of the granted equity instruments, the entity must
evaluate the fair value of the granted equity instruments on the evaluation date, based on the market prices, if available, considering the terms and conditions until such equity instruments were granted.
If the market prices are not available, the entity must estimate the fair value of the granted equity
instruments using an evaluation technique to evaluate what the price of the equity instruments may have been on the evaluation date in a transaction where the price is objectively determined. The evaluation
technique must be consequent on the generally accepted evaluation methodology for the evaluation of financial instruments and must incorporate all the factors and all the presumptions contemplated by the
market players in establishing the price. For cash-settled share-based payment transactions, the entity must evaluate the goods or services
purchased and the engaged debt at its fair value. Until the debt is settled, the entity must reevaluate the faire value of the debt on each reporting date and on the settlement date, with any amendments in the fair
value recognized in the profit and loss account of the period.
2. Accounting estimates
The company makes certain estimates and assumptions concerning the future. Estimates and judgments
are continually evaluated based on historical experience and other factors, including expectations o f
future events that are believed to be reasonable under the given circumstances. In the future, actual
experience may differ from these estimates and assumptions. Estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Estimates and Assumptions
IFRS 13 Fair Value Measurement
A number of assets and liabilities in the financial statements of the Company require a fair value
measurement and / or presentation.
IFRS 13 defines fair value as the price that would be charged by selling an asset or paid by
transferring a liability in a transaction regulated between market participants at the assessment date
(i.e. an exit price). The definition of fair value emphasizes that fair value is a market-based
assessment, not an entity-specific value.
IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair
value measurements except for the following cases:
a) Share-based payment transactions covered by IFRS 2
b) Lease transactions that fall under IAS 17
c) Assessments which are similar to fair value, without being fair value, such as net realizable value
which falls under IAS 2.
d) Assets in the charts of accounts measured at fair value in accordance with IAS 19.
e) Investment in pension schemes assessed at fair value in accordance with IAS 26.
f) Assets the recoverable amount of which is fair value less costs related to transfer in accordance
with IAS 36.
The Fair Value Hierarchy – in order to improve the consistency and comparability of fair value
measurements and related disclosures, this hierarchy is classified in 3 levels:
1. Level 1 Input Data - quoted prices unadjusted in active markets for identical assets and liabilities, to
which the company has access to the assessment data.
2. Level 2 Input Data – input data different from quotation prices included in Level 1 that are
observable directly or indirectly for the asset or liability.
3. Level 3 Input Data – unobservable input data for the asset or liability.
Litigation
The company analyses existing disputes subsequent events existing at the reporting date to assess the
need for provisions or disclosures in the financial statements.
Among the factors considered in making decisions on provisions are: the nature of the dispute, claim or
assessment, the proceedings and potential level of damages in the jurisdiction in which
Accounting estimates (continued)
the dispute was brought, the progress of the case (including the progress as of the date of the financial
statements, and before those statements are issued), the views and opinions of legal advisors, experience
in similar cases and any decision of the company management on how to respond to the litigation.
Corporate tax
During its normal activity, transactions and calculations are made for which the final tax determination is
uncertain. As a result, the company recognizes tax liabilities based on estimates regarding which is clear
that additional taxes and interest will be due. These debts or liabilities are recognized, despite the fact that
the company believes that tax return is probable, the company believes that certain positions are likely to
be challenged and not be fully supported by a possible revision of tax authorities.
The company believes that its commitments to tax liabilities are adequate for all years open to review,
based on the evaluation of many factors including past experience and interpretations of tax laws.
This assessment is based on estimates and assumptions and may involve a number of complex judgments
about future events. To the extent that the final tax outcome of these transactions is different than the
amounts recorded, such differences will impact the corporate tax expense in the period in which such
determination is made.
Provision for pensions
Provisions for pensions: according to the collective labour agreement valid in 2013, the company's
employees will receive on retirement, according to the seniority in the company the following
compensation only once:
< 5 years 0
5 – 20 years 1 individual salary on retirement date
> 20 years 2 individual salaries on retirement date
The estimated values were calculated based on the number of employees who will retire and the average
value of the allowance paid to an employee. In order to capture the time value of money a discount rate of
10.45% was used - representing the weighted average rate of return of the private pension funds for the
last 24 months. The company estimates that these amounts will be realized in the long term for a period of
34 years.
Depreciation at product level
For the equipment in Recea production plant, the company's management decided that depreciation should
be calculated per unit of product.
Stock adjustments
Where necessary, adjustments are made for worn or obsolete stocks. The net realizable value is estimated
based on the selling price less selling expenses.
32
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
3. Revenues
Sales revenues 31.Dec.14 31.Dec.13
Sales of finished products 50,239,737 39,287,791
Sales of goods 7,052,559 682,322
Sales of services 1,012,733 4,871,626
Services pending - -
Rental revenues - 35,139
Trade discounts - -
Total 58,305,029 44,876,878 All amounts in Lei, if not otherwise stated
The main revenue earned by the company in 2014 is considered by exercising the main object of activity,
sales of finished products amounting to RON 50,239,737. Revenue from sales of services consists of
transport services invoiced to third parties.
4. Other operating revenues
Other operating revenues are generated by activities that are not part of the overall scope of activity of the
company and are therefore presented separated from sales revenue.
Other operating income 31.Dec.14 31.Dec.13
Revenues from various services (3,306,001) 3,162,711
Revenues from the sale of assets 668,971 1,815
Revenues from real estate investments - -
Cancellation of impairment of uncertain receivables - 1,826,318
Cancellation of impairment of inventories 32,544 -
Cancellations of other provisions - -
Miscellaneous 3,575,609 1,650,629
971,123 6,641,473 All amounts in Lei, if not otherwise stated
In 2010 the company received a grant for investments in the amount of RON 1,612,687; in 2014 the
company recognized as revenue related to these grants the amount of RON 75.642.
Revenues from the grant are recognized during the depreciation of fixed assets to which they refer. The grant
recognized refers to the 15% grant of the loan received by the company from EBRD sources for the energy efficiency
project started in 2009 with the building of the new brick factory in Recea.
Turnover of account 708 is affected primarily by packaging returns during the relevant period.
33
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
5. Operating expenses
Other operating expenses 31-Dec-14 31-Dec-13
Utilities 6,469,959 6,390,652
Repairs 730,247 616,808
Rent 295,306 822,655
Insurances 356,499 248,296
Fees 171,562 330,429
Publicity 2,300,800 2,228,338
Travel and transport 9,276,617 7,842,083
Post and telecommunications 161,686 143,257
Other services provided by third parties 2,853,904 3,408,309
Taxes to the state budget 2,429,547 1,053,808
Environmental protection - -
Loss on disposal of assets 144,278 -
Losses and adjustments for uncertain debts 40,067 487,000
Adjustment of stocks - 285,362
Other provisions 1,451,451 1,144,246
Miscellaneous 1,074,510 1,205,450
27,756,433 26,206,693 All amounts in Lei, if not otherwise stated
34
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
6. Personnel expenses
Personnel expenses 31.dec.14 31.dec.13
Salaries 4,691,988 5,072,699
Bonuses 1,152,230 405,398
Temporary work contracts 35,800 72,255
Taxes and social contributions 1,553,748 2,190,643
Other benefits 280,803 272,715
7,714,569 8,013,710
Salaries paid at the end of the period 252,396 322,431
Key Management
Key Management consists of those persons having authority and responsibility to plan, direct and control
the activities of the company.
a) Allowances granted to members of administration, management and supervision boards.
Indemnification expenses 2014 2013
Directors 222,780 477,359
Bonuses 71,259 669,712
Managers 1,033,850 640,659
Taxes and contributions 183,397 -
1,511,286 1,787,730
Salaries payable at the end of the period: 2014 2013
Directors 13,224 13,110
Managers 719,035 8,460
732,259 21,570
b) Advances and loans to members of the administrative, management and supervisory boards:
In 2014 were not granted any advances or loans to the members of the administrative, management and
supervisory boards
Employees
The structure and average number of employees is: 137
Average number of employees 31-Dec-14 31-Dec-13
Management staff 49 45
Production staff 88 78
137 123
35
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
7. Financial income and expenses
Finance cost 31-Dec-14 31-Dec-13
Income from investment securities transferred 64,123 -
Adjustment of investments - -
Interest income 51,694 45,754
Interest costs (8,401,014) (8,092,121)
Other financial income 5,232 (1,297)
Other financial expenses (657,158) (166,204)
Exchange difference (15,272) (1,815,076)
Finance cost (8,952,395) (10,028,944)
Interest income is related to short-term deposits concluded by the company in 2014 and 2013.
Interest costs relate to bank loans contracted by the company. For more details, see note 17.
Financial income and expenses recorded are generated mostly by the monthly revaluation of foreign
currency balances regarding bank loans, debts to leasing companies and suppliers.
The structure of financial income and expenses from exchange rate differences for 2014:
Revaluation of
Suppliers
Revaluation Revaluation
of leases of loans
Revaluation
of cash
Expenditure on foreign exchange differences 25,930
Revenues regarding exchange currency differences 46,226
34,323 3,502,003
26,305 3,530,294
357,928
302,087
8. Taxes
Current taxes 2014 2013
Corporate tax expense for the year profit Adjustments for
previous years profit
Total current tax
Deferred corporate tax 2014 2013
Total deferred tax at the beginning of period Temporary differences
reversed
Recognition of deferred tax that was not previously recognized
246,177
2,388,340
(439,097)
685,274
Total deferred corporate tax 2,634,517 246,177
Total Tax 2,634,517 246,177
36
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
During the ordinary course of business, transactions and calculations are made for which the determination of final is
uncertain. As a result, the company recognizes tax liabilities based on estimates regarding the certainty that additional
taxes and interest will be due. These debts or liabilities are recognized, and despite the fact that the company believes
that tax return is probable, the company believes that certain positions are likely to be challenged and not be fully
supported by a possible revision of tax authorities.
The company believes that its commitments to tax liabilities are adequate for all years open to review, based on
the evaluation of many factors including past experience and interpretations of tax laws.
This assessment is based on estimates and assumptions and may involve a number of complex judgments about
future events. To the extent that the final tax outcome of these transactions is different than the amounts
recorded, such differences will impact the corporate tax expense in the period in which such determination is
made.
9. Earnings per share
Earnings per share 31-Dec-14 31-Dec-13
Number of shares issued 82,191,053 262,872,486
Operational profit / (loss) (EBITDA) 13,019,165 7,970,957
Operational profit / (loss) (EBITDA) per share 0.1584 0.0303
Profit / (loss) from operations (EBIT) 7,379,906 2,808,532
Profit / (loss) from operations per share 0.0898 0.0107
Total profit / (loss) -1,572,489 -6,535,138
Total profit / (loss) per share -0.0191 -0.0249
Earnings per share is calculated by dividing the profit / (loss) by the number of shares issued on December 31,
2014.
For details on the number of shares see Note 23 – ‘Share Capital’.
On December 22, 2014 the Extraordinary General Meeting of Shareholders of CEMACON SA decided the Company's
share capital increase with the amount of RON 8,219,105.30, within subscriptions validly made within subscription
deadlines of Step 1 or Step 2, as they are defined below, by cash contribution (including, in Step 2, by converting
receivables held against the Company) from RON 8,219,105.30 to RON 16,438,210.60 by issuing a total of
82,191,053.00 shares (‘New shares’) with a nominal value of 0.1 RON / share.
Due to the second increase by converting the loan into shares, the final number of shares will be 113,990,000.
37
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
Considering the effects of the capital increase approved, the company has calculated the diluted
earnings per share, which is shown in the following table:
Diluted earnings per share
Diluted earnings per share 31.dec.14 31.dec.13
Current number of shares 82,191,053 262,872,486
Number of shares issued subsequently 31,798,947 31,798,947
Number of Shares after issuance 113,990,000 294,671,433
Total profit / (loss) - 1,572,489 lei - 6,535,138 lei
Total profit / (loss) per share - 0.0191 lei - 0.0249 lei
Total diluted profit/ (loss) per share - 0.0138 lei - 0.0222 lei
10. Dividends
In 2014 the company did not pay any dividends.
CEMACON SA
Note la Situatiile FInanciare pentru perioada incheiata la 31 Decembrie 2014
11. Tangible assets
Cost value of Assets as at December 31, 2014
Tangible assets Initial balance Acquisition
s
Value increase Revaluation
increase Disposals
Revaluation
movements
(held for sale)
Revaluation
decreases
Final balance
Land 7,539,711 - - 127,556 - 89,195 16,945 7,561,127
Land improvements 306,376 - 29,700 - - - - 336,076
Buildings 31,841,532 819,931 1,197,774 1,921,796 7,415 58,865 1,316,685 34,398,068
Machinery, Plant and Equipment 97,362,266 3,457,809 260,044 332,036 798,290 204,360 109,960 100,299,545
Furniture and office equipment 135,912 20,082 20,404 - 19,820 (21,896) 9,871 168,603
Fixed assets in progress 1,022,420 5,329,610 - - 5,660,597 - - 691,433
Total 138,208,217 9,627,432 1,507,922 2,381,388 6,486,122 330,524 1,453,461 143,454,852
The value of the cost of assets as of December 31, 2013
tangible assets Initial balance Acquisitio
ns
Value increase Revaluation
increase Disposals
Reclassification
(held for sale)
Revaluatio
n
decreases Final balance
Land 12,048,654 - - 11,564 - -4,511,030 -9,477 7,539,711
Land improvements 285,799 - 20,577 - - - - 306,376
Buildings 39,306,296 1,444,866 256,760 46,066 - -7,822,949 -1,389,507 31,841,532
Machinery, Plant and Equipment 106,182,090 605,886 801,034 - -67,277 -10,116,734 -42,733 97,362,266
Furniture and office equipment 159,947 - 28,378 - - -52,412 - 135,912
Fixed assets in progress 2,044,904 2,029,419 - - -3,051,902 - - 1,022,420
Total 160,027,690 4,080,172 1,106,749 57,630 -3,119,179 -22,503,125 -1,441,717 138,208,219
39
CEMACON SA
Notes on the Financial Statements
for the period ending December 31st, 2014
Tangible assets (continued)
The amount of depreciation and impairment as of December 31, 2014
Depreciation and Adjustments Initial balance
Depreciation and
impairments during
the year
Depreciation
related to fixed
assets transferred
Depreciation of
fixed assets
held for sale Adjustments
established during
the year
Adjustments
resumed on
income
Final balance
Depreciation of land arrangements 101,081 33,479 - - - - 134,560
Depreciation of buildings - - - - - - -
Depreciation of machinery, plant, equipment 16,086,638 4,257,546 544,060 - - - 19,800,124
Depreciation of furniture and office equipment 65,461 12,313 23,473 - - - 54,301
Impairment of land 2,413,078 14,341 - - - 105,339 2,322,080
Impairment of machines, equipment and plant 4,653,447 - - - - - 4,653,447
Total 23,319,705 4,317,679 567,533 - - 105,339 26,964,512
The amount of amortization and impairment as of December 31, 2013
Depreciation and Adjustments Initial balance
Depreciation and
impairments during
the year
Depreciation
related to fixed
assets transferred
Depreciation of
fixed assets
held for sale Adjustments
established during
the year
Adjustments
resumed on
income
Final balance
Depreciation of land arrangements 56,270 44,811 - - - - 101,081
Depreciation of buildings - - - - - - -
Depreciation of tangible assets 12,490,935 3,862,154 - 67,277 - 199,174 - - 16,086,638
Depreciation of furniture and office equipment 57,132 8,329 - - - - 65,461
Impairment of land 2,411,276 - - - 1,802 - 2,413,078
Impairment of plant, fixed assets 4,653,447 - - - - - 4,653,447
Total 19,669,059 3,915,293 - 67,277 - 199,173 1,802 - 23,319,705
40
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
Tangible assets (continued)
Net value of tangible assets on December 31, 2014
Gross value at 31 Reclassification spre
Net value 31 Dec
Tangible assets 2014 Dec 2014 for sale
Depreciation Adjustments 2013
Land 7,561,127 - - - 2,322,080 5,239,047
Land improvements 336,076 - - 134,560 - 201,516
Buildings 34,398,068 - - - 34,398,068
Machinery, Plant and Equipment 100,299,545 - - 19,800,124 - 4,653,447 75,845,974
Furniture and office equipment 168,603 - - 54,301 - 114,302
Fixed assets in progress 691,433 - - - 691,433
Total 143,454,852 - - 19,988,98
5
- 6,975,527 116,490,340
Net value of tangible assets on December 31, 2013
Tangible assets 2013 Gross value at 31
Dec 2013
Reclassification
for sale Depreciation Adjustmen
ts
Net value 31 Dec
2013
Land 12,050,742 -4,511,030 - -2,413,078 5,126,634
Land improvements 306,376 - -101,081 - 205,295
Buildings 39,664,481 -7,822,949 - - 31,841,532
Machinery, Plant and Equipment 107,479,001 -9,946,793 -16,285,812 -4,653,447 76,592,949
Furniture and office equipment 188,324 -23,180 -65,461 - 99,684
Fixed assets in progress 1,022,420 - - - 1,022,420
Total 160,711,344 -22,303,952 -16,452,354 -7,066,525 114,888,514
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
Tangible assets (continued)
Fixed assets held for sale
The following major classes of assets and liabilities were classified as held for sale in the statement of
financial position on December 31, 2014:
Fixed Assets Value remaining
31 Dec 2013 Depreciation Revaluation
differences
Value
remaining on
Dec. 31, 2014
Land 4,511,030 - 89,196 4,600,226
Buildings 7,822,949 - 58,865 7,881,814
Machinery, Plant and Equipment 9,917,561 - 403,534 10,321,095
Furniture and office equipment 52,412 - (21,897) 30,515
Total 22,303,952 - 529,698 22,833,650
For more details, see note 21 “Assets and liabilities classified for sale”.
During 2014 the company Cemacon recognized an Asset related to the stripping activity worth RON
241,459.
Revaluation of fixed assets
The assets held by the company on December 31, 2014 were appraised at fair value by the appraisal
company SC CS INVEST CONSULTING SRL, independent appraiser.
The revaluation was made on land, buildings and equipment, except for equipment in Recea quarry, clay preparation
line from Recea and production line of Recea for which depreciation was calculated according to IAS 36.
For the assets in Zalau classified for sale the appraisal was prepared and recording was made at the
lowest value and the carrying amount of the revalued amount.
In order to determine fair value the following methods were used:
Locations The valuation procedure
Zalau (Factory) The land was appraised by direct comparison technique and the
buildings by the cost - net replacement cost approach (main
method) and by the income approach, the rent capitalization
method (second method). (Level 2 property) Equipment was
appraised by the cost - net replacement cost approach. (Level 3
property)
Zalau (TUF Department) The land was appraised by direct comparison technique (Level 1
property), buildings by the cost - net replacement cost approach
(Level 3 property) and equipment by the cost - net replacement
cost approach (Level 3 property).
Zalau (Stejarul) Real estate property was appraised by the income – rent
capitalization approach (Level 2 property), of which the value
of land which was appraised by direct comparison technique
was deducted from (Level 1 property), thus resulting in the
construction value.
42
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
Equipment was appraised by the cost - net replacement cost
approach. (Level 3 property)
Tunari (Quarry) The land was appraised by plotting (for the large plot) and with
the direct comparison technique (for plots resulting from
parceling). (Level 1 property) and buildings by the cost - net
replacement cost approach. (Level 3 property)
Recea (Factory land) The land was appraised by direct comparison technique (Level 1
property), and buildings by the cost - net replacement cost approach
and then the results were verified as well as by the income approach.
(Level 3 property)
Panic plot of land (locality of Hereclean) The land was appraised by direct comparison technique.
(Level 1 property)
Beltiug (warehouse land) The land was appraised by direct comparison technique (Level 1
property), and buildings by the cost - net replacement cost
approach. (Level 3 property)
Revaluation differences were recorded either on account of capital in the revaluation reserve, either in the profit
and loss account, the effect of these beings presented below:
Increases from revaluation reserve 1,836,599
Discounts from revaluation reserve 17,751
Revenue 650,128
Expenditure 80,654
Reversals of income from previously recorded expenses amount to RON 650,128.
By applying these methods and related techniques, a set of values was obtained, which was interpreted by
the appraiser and by their reconciliation was formed the appraiser’s opinion on the possible market value
obtainable in the relevant area on the appraisal date.
Changes of the revaluation reserve during the financial year are presented below:
Movements of revaluation reserves 2014
Revaluation reserve at the beginning of financial year 23,633,956
1,818,849
Revaluation differences transferred during the financial year -
Amounts transferred from the revaluation reserve during the financial year
(18,702)
Revaluation reserve at the end of the financial year 25,434,102
On December 31, 2014, there were no restrictions on the distribution of the revaluation surplus (2013: N/A).
Treatment of revaluation reserve for tax purposes
According to tax laws in Romania, by May 1, 2009 revaluation reserves of tangible assets became taxable only
when their destination was changed. Subsequently to changing the tax code, starting May 1, 2009 revaluation
reserves of fixed assets
43
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
Tangible assets (Continued)
made after January 1, 2004, which are deducted from the calculation of the taxable income through tax
depreciation or expenditure on sold assets and / or retired, taxation is made at the same time with deduction of
tax depreciation, that is at the discharge of these fixed assets, as appropriate.
Impairment losses according to IAS 36, as reflected in the profit and loss account
Tangible assets are tested for impairment when facts and circumstances indicate that the carrying value may not
be recoverable.
An impairment loss is recognized as the amount by which the asset's carrying amount exceeds the recoverable amount.
The recoverable amount is the higher value of the asset's fair value less sales costs and value in use. In order to
appraise impairment, assets are grouped at the lowest level at which separately identifiable cash flows exist.
Considering the recommendations of paragraph 36 of IAS 36.12, the company examined the factors that might
lead to clues to impairment on December 31, 2014.
Considering the aspects analysed, the company believes that there is no evidence on impairment of assets in Recea
factory and therefore the calculation of depreciation for assets from Recea on December 31, 2013 in accordance with
paragraph 36.9 of IAS 36 is not necessary.
Currently from all the assets of Cemacon, the income generating activity is focused on Recea factory assets, land,
buildings and equipment representing a clay quarry exploitation, preparation halls, and production, production
line (press, dryer, oven etc), storage area and quarry machinery and logistics.
The value of adjustments for impairment for location Recea is as follows:
Land
Machinery, Supplies,
facilities and office
buildings Equipment equipment Total
Initial balance
Increases
Discounts
Net carrying amount
4,653,447
4,653,447
4,653,447
4,653,447
Tangible assets pledged and restricted
Bank guarantees are:
Intangible assets 2014 BCR security Unencumbered Total
Plots of land 10,610,796 1,550,557 12,161,353
Buildings 30,107,698 10,172,183 42,279,881
Machinery,plant,equipment 96,296,627 14,324,012 110,620,639
Furniture and office equipment 0 199,120 199,120
Fixed assets in progress 0 691,433 691,433
137,015,121 26,937,305 165,952,426
44
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
12. Intangible assets
Structure of intangible assets:
Dec.31, 14
Intangible assets Initial Balance
Internal developmen
t
Acquisitions
Final Balance
Development expenses 489,058 - - 489,058
Concessions, patents, licenses 60,109 27,883 87,992
Other intangible assets 65,710 33,707 99,417
Total 614,877 - 61,590 676,467
Dec. 31, 13
Intangible assets Initial Balance
Internal
Acquisitions
Final Balance developmen
t Development expenses 309,782 179,276 - 489,058
Concessions, patents, licenses 46,423 - 13,686 60,109
Other intangible assets 52,389 - 13,321 65,710
Total 408,594 179,276 27,007 614,877
The structure of depreciation and value adjustments for intangible assets is as follows:
Depreciation and adjustments for assets Dec 31, 2014
Initial balance
Depreciation by year
Adjustments for
depreciation Final
balance
Development expenses 309,782 35,855 - 345,637
Concessions, patents, licenses 45,406 9,783 - 55,189
Other intangible assets 53,129 6,345 - 59,474
Total 408,318 51,983 - 460,301
Adjustments
Depreciation and adjustments for intangible assets on December 31, 2013
Initial balance
Depreciation by year
for Final
balance
depreciation Development expenses 305,162 4,620 - 309,782
Concessions, patents, licenses 41,009 4,397 - 45,406
Other intangible assets 52,389 740 - 53,129
Total 398,561 9,757 - 408,318
45
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
Net value of intangible assets:
Asset type Stock
value
2013
Net
value
2014
Stock Net
value value
Development expenses 489,058 179,276 489,058 143,421
Concessions, patents, licenses 60,109 14,703 87,992 32,803
Other intangible assets 65,710 12,581 99,417 39,943
Total 614,877 206,560 676,467 216,167
The accounting treatment of depreciation of development costs is consistent to the accounting policy
regarding the depreciation of fixed assets in the profit centre Recea, depreciation per unit of product.
In 2014 the company has not capitalized development costs under IAS 38. The
remaining intangible assets shall be depreciated linearly over a period of 3 years.
The depreciation cost is recorded in the profit and loss account of the period in which it is made, in the
position of Amortization and impairment in the statement of comprehensive income.
13. Goodwill and depreciation
The Company did not hold on December 31, 2014 any intangible assets as goodwill.
Tangible and intangible assets are tested for depreciation when facts and circumstances indicate that
the carrying value may not be recoverable. An impairment loss is recognized as the amount by which
the asset's carrying amount exceeds the recoverable amount. The recoverable amount is the higher
value of the asset's fair value less sales costs and value in use. To appraise impairment, assets are
grouped at the lowest level at which separately identifiable cash flows exist.
On December 31, 2014 taking into account the recommendations of paragraph 36 of IAS 36.12, the
company examined the factors that might lead to clues regarding impairment.
Considering the aspects analysed, our company believes that there is no evidence on impairment of assets
in Recea factory and therefore it is not necessary to make a calculation of depreciation for assets from
Recea on December 31, 2014 in accordance with paragraph 36.9 of IAS 36.
46
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
14. Financial assets
Investments in shares 30-Dec-14 31-Dec-13
Investments in subsidiaries 200 -
Investments in associates - -
Investments in jointly controlled entities - -
Investments available for sale 1,278,223 1,278,223
Depreciation (1,278,223) (1,278,223)
Amounts payable for investments - -
Total 200 -
Investments in subsidiaries refer to Cemacon Real Estate Srl, a company controlled 100% by Cemacon SA.
Cemacon Real Estate Company Srl was established following the agreement signed by Cemacon SA and BCR
(Banca Comerciala Romana) in order to transfer non-core assets under the restructuring process.
Long-term securities are valued at historical cost less possible adjustments for impairment. Classification of
securities in financial assets or short-term investments is made depending on the intention of the company of
holding securities up to a year or more than a year.
Activities and the percentage of the share capital held by the company in businesses representing securities held as
financial assets are summarized below:
Name of company
Country of
registration Date Percentage
of registration Object held
production of construction
Cercon Ariesul SA Romania 2004 materials 11.45%
buying and selling
Cemacon Real own real
Estate Srl Romania 2013 estate 100%
On December 31, 2014, the Company held shares with an acquisition cost of RON 1,278,223, for which in 2010 a
provision for impairment of shares was recorded, amounting to RON 1,278,223 (December 31, 2010: RON 1,278,223),
the reason being that SC Cercon Aries SA entered bankruptcy proceedings starting June 11, 2009.
On 31 December 2014, the Company held shares in Cemacon Real Estate Srl worth RON 200, representing 100%
of its capital.
On December 31, 2014, the Company had securities for rented spaces and also for the National Administration of
State Reserves ("ANRS") totalling RON 59,397.
47
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
On December 31, 2014 and December 31, 2013, the Company had no loans granted ot SC Cercon
Aries S. A. and it did not guarantee for any of the loans contracted by SC Cercon Aries S. A.
48
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
15. Stocks
Stocks 31-Dec.-14 31-Dec-13
Raw materials and consumables 8,565,640 3,713,961
Adjustments (270,602) (252,851)
Production in progress 66,120 840,777
Adjustments - -
Semi-products and finished products 4,750,959 4,314,031
Adjustments (92,155) (133,836)
Goods 957,234 272,779
Adjustments (87,279) (95,893)
Biological assets - -
Adjustments - -
Total 13,889,917 8,658,968
The cost of inventories recognized in the profit and loss account have the following structure:
Raw materials and consumables 31-Dec-14 31-Dec-13 Raw materials 3,151,004 2,271,485
Additional material 2,602,143 4,546,819
Goods 2,395,560 580,595
Inventory items 76,347 75,441
Other supplies 32,779 18,170
Miscellaneous 3,477,261 2,277,909
11,735,094 9,770,419
On December 31, 2014 the following stocks are considered as tangible assets as security
without dispossession of future receivables for loans held “for details see note 18”
No. Product name ceramic block Quantity MU/pc. Storage
1 EVOCERAMIC 29 240/290/238CLSIN 1,915,792 Recea
2 EVOCERAMIC 24V240/240/238CLSIN 116,912 Recea
3 EVOCERAMIC 1/229 115/290/238 CLS I N 53,600 Recea
4 EVOCERAMIC 20 NF 450/200/238 CLS I 18,648 Recea
5 EVOCERAMIC 12 NF 460/120/238 CLS I 2,496 Recea
6 EVOCERAMIC 24AERO 430/240/238 CLS I 1,380 Recea
Analysis of age
Receivables not yet
due Unadjusted outstanding receivables
up to 3
months 3 to 6
months 6 to
12 months
over
Total
Adjustments
At the beginning of the period
Established during the year.
Costs in the bad debt period.
Cancellation of unused adjustments.
Exchange differences.
At the end of the period
49
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
16. Trade receivables and other receivables
31 Dec 31 Dec
Trade and other receivables 2014 2013
Trade receivables 7,270,931 7,985,630
Adjustments for trade receivables (1,564,710) (1,524,643)
Intragroup receivables - -
Adjustments for intragroup receivables - -
Receivables to partners / shareholders - -
Employees - -
Corporate tax - -
Other debts against the State Budget 566,133 126,249
Subsidies - -
Sundry debtors and other receivables 21,181 415,623
Adjustments for other receivables - -
Interest receivable - -
Total financial assets other than cash, classified as
loans and receivables 6,293,536 7,002,859
Advances 274,214 508,884
Total 6,567,750 7,511,743
The structure of receivables according to their age on
December 31, 2014
is as follows:
31.Dec.14
31.Dec.13
4,384,356 4,508,357
1,997,671 2,889,315
37,524 91,200
148,199 22,871
- -
6,567,750
7,511,743
31-Dec-14
31-Dec-13 1,524,643 2,234,887
475,863 197,560
(678,564)
(435,797) (229,240)
- -
- -
1,564,709
1,524,643
50
CEMACON SA
Notes on the Financial Statements for the period ending December 31st, 2014
17. Trade and other liabilities
Trade and other liabilities 31-Dec-14 31-Dec-14
Trade liabilities 3,728,475 4,444,068
Suppliers of fixed assets 328,773 366,979
Intra-group liabilities - -
Lease liabilities 22,747 -
Debt related to employees 1,000,217 340,345
Taxes and social contributions 354,532 1,014,140
Other tax liabilities 3,618 1,320,647
Other liabilities 843,761 393,331
Interest to pay - 21,253,787
Total debt less loans classified as
measured at amortized cost 6,282,124 29,133,296
Dividends - -
Advances 67,002 74,689
Revenue in advance - -
Total 6,349,125 29,207,985
18. Loans
The classification of short-term and long-term loans on the 31st of December, 2014 is the following:
Current 31-Dec-14 31-Dec-13
Short-term loans and overdraft 10,757,040 10,763,285
Current long-term loans 14,342,409 22,423,500
Bonds - -
Financial lease 58,284,255 54,112,126
Loans from affiliates - -
83,383,704 87,298,911
Long-term loan Long-term loans 63,707,518 30,074,273
Bonds - -
Financial lease 824,973 452,992
Loans from affiliates - - 64,532,490 30,527,265
Total 147,916,194 117,826,176
On the 31st of December, 2014, the Company contracted the following loans:
long-term loan from Anglo Romanian Bank Limited Sibiu Agency, contracted on the 27th of June,
2008, for a period of 8 years, amounting to €20,000,000, with an annual margin interest +
EURIBOR 6M. In May 2011, the balance of this loan was transferred to the Romanian
Commercial Bank. In 2013, part of the balance transferred to RCB was transferred to Business
Capital for Romania - Opportunity Fund Coperatief
long-term loan from the Romanian Commercial Bank, contracted on the 18th of December, 2006,
for a period of 5 years, amounting to €4,350,000, with an annual margin interest + EURIBOR
6M. In 2013, part of the balance transferred to RCB was transferred to Business Capital for
Romania - Opportunity Fund Coperatief
long-term loan from the Romanian Commercial Bank, contracted on the 25th of August, 2009, for
a period of 7 years, amounting to €2,500,000, with an annual margin interest + EURIBOR 6M.
short-term loan from the Romanian Commercial Bank, contracted on the 18th of December,
2006, for a period of 1 year, with annual extension, amounting to €2,400.00, with a margin
interest + EURIBOR 3M.
short-term loan from Business Capital for Romania - Opportunity Fund Coperatief, contracted by
the loan transfer from the Romanian Commercial Bank amounting to €12,000,000 with an
annual margin interest + EURIBOR 6M.
short-term loan from short-term majority shareholders amounting to €500,000 with EURIBOR
1M interest, contracted on the 18th of February, 2014
On the 4th of November, 2013, the Company and its main shareholders, KJK Fund II, Consultanta Andrei &
Andrei, SSIF Broker and Casa de Insolventa Transilvania signed together with the Romanian Commercial
Bank SA ("RCB") a term-sheet agreement regarding the restructuring of the loan package mainly
amounting to €26,105,964, plus interests and penalties, granted by RCB to the Company during 2006-2009
("Loan") whose repayment under the initially agreed terms was not possible due to the financial difficulties
faced by the Company in the last years ("Agreement”).
The agreement provides a set of principles applicable to the Loan restructuring, and the measures and
actions which must be undertaken by the Company, its shareholders and RCB, representing the conditions
whose successful completion depends on the establishment of new Loan repayment terms, namely:
the conversion of a part, amounting to about €12 million, of the debts of the Company to RCB
related to the existing loan in the Company’ shares. An investor to which RCB assigns that part
of the loan-related receivable shall be identified. The conversion of the assigned receivable to
the Company’ shares shall be done so as the assignee investor has, as a result of the
conversion, a number of shares (a) representing maximum 33% of the issued capital of
Cemacon and (b) [about] equal to the number of shares individually held by the greatest
current shareholder of the Company, namely KJK Fund II;
the transfer of secondary assets and the obligations to repay a loan granted to the Company by
RCB, amounting to €5 million, to a newly established company, Cemacon Real Estate SRL. The
repayment of the loan taken over by Cemacon Real Estate shall be guaranteed: (i) by a
mortgage over all assets of the newly established company, and (ii) a personal guarantee
issued by Cemacon in favour of RCB amounting to up to €3 million;
Subject to the fully compliance with the aforementioned suspensive conditions, in the limits permissible by
the applicable legal provisions, RCB, the Company and the majority shareholders of the Company shall
negotiate and sign the documents related to the Loan restructuring as follows:
(a) a loan amounting to €13 million granted to the Company, with a 10-year maturity, with
a 1-year grace period for the principal and interest payment, guaranteed by the Company’s
assets;
(b) a loan amounting to €5 million, taken over by Cemacon Real Estate, whose repayment
is guaranteed by the assets of Cemacon Real Estate SRL and a personal guarantee of Cemacon
amounting to up to €3 million.
On the 23rd of February, 2015, Cemacon SA and Business Capital for Romania - Opportunity Fund
Cooperatief U.A (BOF) signed the agreement whereby the parties ordered the freezing and fully conversion
held by BOF amounting to €58,033,045.02 to Cemacon shares as part of the restructuring of Cemacon
loan granted by RCB according to the decision of the Extraordinary General Meeting of Shareholders as of
the 22nd of December, 2014.
On the 19th of March, 2015 the Company signed with the Romanian Commercial Bank the new loan
agreements, thus finalizing the financial restructuring started in 2010. The new signed agreements refer
to:
Loan agreement no. 2 as of the 19th of March, 2015 amounting to RON 58,487,000 with maturity in
December 2023.
In long-term and short-term division of such loans, the aforementioned agreement was taken into account.
On the loan signature, the difference in the value between the "Existing payment obligations" and, on the
other hand, the "Payment obligation of Cemacon RE” and the "New payment obligation of Cemacon" as
defined by the loan agreement, was cancelled according to the agreement.
On the 31st of December, 2014, the loan structure was as follows:
31st of December, 2013 31st of December, 2014
Loan Institution RON Currency RON Currency
Romanian Commercial Bank RON 2,718,319 € 606,132 RON 2,716,743 € 606,132
Romanian Commercial Bank RON 39,151,431 € 8,730,000 RON 39,128,733 € 8,730,000
Romanian Commercial Bank RON 10,628,024 € 2,369,840 RON 10,621,862 € 2,369,840
Romanian Commercial Bank RON 10,763,280 € 2,400,000 RON 10,757,040 € 2,400,000
Business Capital for Romania RON 53,816,400 € 12,000,000
- Opportunity Fund Cooperatief RON 53,785,200 € 12,000,000
Majority shareholders RON 0 € 0 RON -
Interest RON 21,166,162 € 4,719,638 RON 29,652,709 € 6,615,807
TOTAL RON 138,243,616 RON 30,825,610 RON 146,662,286 € 32,721,779
In 2014, the company did not have unused loan facilities.
The bank guarantees consisting in non-current assets on the 31st of December, 2014 related to the
contracted loans have the following structure:
2014 Non-current assets RCB Guarantees Unencumbered Total
Land RON 10,610,796 RON 1,550,557 RON 12,161,353
Constructions RON 32,107,698 RON 10,172,183 RON 42,279,881
Machines, plants and equipment RON 96,296,627 RON 14,324,012 RON 110,620,639
Furniture and office appliance RON - RON 199,120 RON 199,120
Pending non-current assets RON - RON 691,433 RON 691,433
Total RON 139,015,121 RON 26,937,305 RON 165,952,426
Other bank guarantees related to the loans:
personal security without dispossession on the credit balance of accounts/sub-accounts opened by the
Borrower with the Bank, registered in the Electronic Archive for Security Interests in Movable Property;
personal security without dispossession on finished product stocks consisting of:
No. Ceramic block product name Quantity um/pcs. Storage
1 EVOCERAMIC 29 240/290/238CLSIN 1,915,792 RECEA
2 EVOCERAMIC 24V240/240/238CLSIN 116,912 RECEA
3 EVOCERAMIC 1/229 115/290/238 CLS I N 53,600 RECEA
4 EVOCERAMIC 20 NF 450/200/238 CLS I 18,648 RECEA
5 EVOCERAMIC 12 NF 460/120/238 CLS I 2,496 RECEA
6 EVOCERAMIC 24AERO 430/240/238 CLS I 1,380 RECEA
property of SC CEMACON SA, registered in the Electronic Archive for Security Interests in Movable
Property.
Assignment in favour of the bank in a percentage of 41% of the cash resulted from new
agreements/present and future cash collection registered in the "Electronic Archive for Security Interests in
Movable Property”.
19. Employees’ benefits
The debts regarding the employees' benefits consist of:
Indemnity for annual leave which is annually granted for the leaves used in the reference year. For the
unused leaves, the company established at the end of the year a provision for unused leaves.
Upon retirement, according to the collective labour agreement valid in 2013, the employees shall receive
once, according to the seniority in the company, the following indemnities:
< 5 years 0
5 – 20 years 1 individual salary on the retirement date
> 20 years 2 individual salaries on the retirement date
For this type of indemnity, the company established a provision with the value of benefits granted at
retirement. For details, see note 19 Provisions.
Employees’ benefits 2014 2013
Benefits upon retirement 315,625 190,715
Provision related to the annual leave 57,925 243,025
Bonuses 1,281,345 1,075,110
Other benefits -
Total 1,654,895 1,508,850
Structure of benefits 2014 2013
Short-term 1,339,270 1,318,135
Long-term 315,625 190,715
Total 1,654,895 1,508,850
In case of unjust dismissal of the General Manager, he/she shall be entitled in addition to other
compensations under the law or this agreement to receive an amount equal to the remaining amount which
he/she would have received until the end of term, but not more than €60,000 (in net amount), as
compensation for his/her dismissal.
In case of unjust dismissal of the Financial Manager, he/she shall be entitled in addition to other
compensations under the law or this agreement to receive an amount equal to the remaining amount which
he/she would have received until the end of term, but not more than €48,000 (in net amount), as
compensation for his/her dismissal.
In case of unjust dismissal of the Technical Manager, he/she shall be entitled in addition to other
compensations under the law or this agreement to receive an amount equal to the remaining amount which
he/she would have received until the end of term, but not more than €34,800 (in net amount), as
compensation for his/her dismissal.
20. Provisions
The structure of provisions on the 31st of December, 2014 is the following:
Structure of provisions Short-term Long-term
Disputes 168,506 -
Unused leaves 57,925 -
Pensions - 315,625
Environmental reclamation provision - 348,873
Other provisions 1,575,289 -
Total 1,801,720 664,498
The Company established provisions for the following events which shall generate future cash outflows as
a result of past events:
Dispute provisions: under the existing disputes on the 31st of December, 2014 and using the best
estimates regarding their settlement, the company established provisions for the estimated amounts
to be paid. The presented amounts include both the estimated compensations on the 31st of
December, 2015 and the related legal expenses. The probability of winning such disputes is less than
50% which is why the related provisions were established.
Provisions for unused leaves: the company registered provisions for leave-related expenses unused by
the employees in 2014. The provisioned amounts were estimated based on the number of leave days
related to 2014 which remained to be used by the company’s employees and related leave
indemnities. The company estimates that the amounts related to such provisions shall be done in
2015.
Pension provisions: according to the collective labour agreement valid in 2014, the company’s
employees shall receive once, upon retirement, according to the seniority in the company, the
following indemnities:
< 5 years 0
5 - 20 years 1 individual salary on the retirement date
> 20 years 2 individual salaries on the retirement date
The estimated values were calculated based on the number of employees to be retired and the
average value of the indemnity received by an employee. To observe the time value of money, a
9.23% discount rate was used – representing the weighted average rate of return of all private
pension funds in the last 24 months. The company estimates that such amounts shall be done on the
long run, for a period of 34 years.
Environmental reclamation provisions: due to the fact that the company also carries out activities
related to mineral resource exploitation (clay) under the operating permits and licenses, it is liable to
make environmental reclamation expenses related to the exploited perimeters. The related expenses
are estimated to be achieved by the end of the exploitation period, which is why the company
established provisions related to such expenses.
Other provisions: within such categories, various provisions are included for which the entity is
expected to achieve short-term cash outflows but with uncertain value. To estimate such amounts,
the company used the best estimates and knowledge on the generating facts on the 31st of
December, 2014.
Provision Initial
balance Additional provisions
Used amounts
Reversal of unused
amounts
time passing
Increases
regarding the
discount of
amounts once with
the passing of time
Effects of the discount rate
change
Final balance
Disputes 1,464,992 (716,688) (579,798) - - 168,506
Unused leaves 243,025 (185,100) - - - 57,925
Pensions 190,715 124,910 - - - - 315,625
Environmental
reclamation
provision 306.377 12.798 - -
306,377 12,798
-
-
29,699 - 348,874
Bonus provision for
employees
595,860 616,860 (450,921) (144,939)
616,860
Bonus provision for
management
- 661,486
661,486
Other provisions 270,553 26,390 - - - 296,943
Total 3,071,522 1,442,444 (1,352,709) (724,737) 29,699 - 2,466,219
21. Deferred taxes
Deferred income tax 2014 2013
Total deferred tax at the beginning of the period 246,177 (439,097)
Temporary reversed differences
Acknowledgement of the deferred tax receivables which were not
previously acknowledged 2,388,340 685,274
Total deferred income tax 2,634,517 246,177
Total tax 2,634,517 246,177
For the equipment in Recea production factory, the company calculates depreciation per product unit, case
in which there is a difference between the calculated depreciation according to the fiscal model and the
applicable one. For this difference, the company calculates and registers the deferred income tax.
The receivable from the deferred income tax incurred as a result of accrued fiscal losses registered by the
entity in the previous years. The fiscal loss was mostly caused by the financial costs related to the loans
which the company has.
In 2014, the deferred tax receivable is greater, because compared to the previous year the entire fiscal loss
was considered, which until now for reasons of caution it has not been fully considered, given the financial
restructuring which was not completed. Considering that, until the publication of the financial statements,
the restructuring was completed and there are very good reasons to believe that the entire loss shall be
recovered, the company acknowledged the entire deferred tax receivable related to the fiscal loss.
58
Losses prior to 2013 RON 10,877,111
Deferred tax receivables RON 1,740,338
The entire amount has been acknowledged in the 2014 profit and loss account.
Deferred tax acknowledged in the comprehensive income RON 1,447,960
Deferred tax acknowledged in capitals RON 940,380
As a result of the signature of the term-sheet agreement for the restructuring of loans signed with the
Romanian Commercial Bank, a reduction of financial costs is estimated. As a result of these assumptions,
the company estimates that in the future it will record positive comprehensive income, which is why the
company believes that it shall use the deferred tax receivables.
22. Assets and debts classified as for sale
(i) General description
The Board of Directors announced its intention to sell the assets of the brick factory in Zalau and the
premises in Stejarul administrative building in Zalau and the non-current assets were classified as held-for-
sale in the financial position.
The management believes that the sale shall be completed in March 2015. In time, the company accrued a
series of assets, a part being used in production in the previous years: Tunari quarry, Zalau platform with
the equipment related to the old production line etc., and other held without being productive: Stejarul
Building apartments, etc.
Considering the launch of the new Recea factory, and the economic context in which the focus is on
liquidity and liquidation of assets, this package of unproductive and non-essential non-current assets for
Cemacon, was classified as held-for-sale assets by the decisions of the company’s decision-making bodies:
General Meeting of Shareholders and Board of Directors.
During the time since these decisions, concrete actions were taken to promote them on the specialty
market and various solutions have been searched for their sale.
On the 19th of March, 2015, Cemacon SA signed the Novation Agreement with the Romanian Commercial
Bank (Agreement no. 4) whereby it transferred the assets held for sale to Cemacon Real Estate Srl. The
operational phase of the asset transfer is pending on the publication of financial statements.
(ii) Held-for-sale assets and debts
The following major classes of assets and liabilities were classified as being held for sale in the financial
position on the 30th of December, 2014:
Fixed assets Remaining amount
31st of December,
2013
Depreciations
Revaluation
differences
Remaining
amount
31st of
December,
2014
Land 4,511,030 - 89,196 4,600,226
Constructions 7,822,949 - 58,865 7,881,814
Machines, plants and
equipment 9,917,561 - 403,534 10,321,095
Furniture and office appliance 52,412 - (21,897) 30,515
Total 22,303,952 - 529,698 22,833,650
In 2014, the held-for-sale assets generated the following income and expenses which generated cash
outflows and inflows:
Income and expenses related to held-for-sale fixed assets
income from rent 80,625
total expense of which: 141,774
utility expenses 21,799
tax and fee expenses 119,115
building insurance expenses 860
(iii) Evaluation at fair value
The assets held by the company on the 31st of December, 2014 were evaluated at fair value by the
evaluation company SC CS.INVEST CONSULTING SRL.
Fair value = is the price which would be received to sell an asset or paid to transfer a debt in a normal
transaction between the market participants on the evaluation date. (IFRS 13).
23. Issued capital
On the 31st of December, the structure of issued capital was as follows:
Structure of issued capital 31-Dec-13 31-Dec-14
Number of authorized shares 262,872,486 pcs. 82,191,053 pcs.
Number of subscribed and paid-up shares 262,872,486 pcs. 82,191,053 pcs.
Number of subscribed and unpaid-up shares - -
Nominal value of a share RON 0.10 RON 0.10
Issued capital value RON 26,287,249 RON 8,219,105
All shares of the company are common and have the same voting right.
The movements on the capital structure in 2014 can be seen in the following table:
2013
Number
Value
2014
Number Value
Ordinary shares of RON 01 each 262,872,486
pcs.
RON 26,287,249 262,872,486 pcs. RON 26,287,249
Reduction by entrainment of losses -
RON
- RON - 257,614,526 pcs.
pcs.
- RON 25,761,453
Conversion of debts during the year -
RON
- RON
- - RON
Emissions during the year -
RON
- RON
+ 76,966,093 pcs. RON +7,693,309
Acquisition of own shares -
RON
- RON
- - RON
Total 262,872,486 pcs.
26,287,249
RON 26,287,249 82,191,053 pcs. RON 8,219,105
The Extraordinary General Meeting of Shareholders as of the 24th of March, 2014 approved the reduction of
the issued capital, by the entrainment of losses registered in the last 4 years, from the value of RON
26,287,248.6 to the value of RON 525,796, by the reduction of the number of shares from 262,872,486
shares to 5,257,960 shares.
On the 24th of March, 2014, the Extraordinary General Meeting of Shareholders of Cemacon SA decided the
approval of the increase in the Company’s issued capital in order to ensure the financial resources for the
company’s development, by issuing a number of maximum 88,000,000 new shares, at the nominal value of
RON 0.1 according to article 210 paragraph (1) of Law no. 31/1990.
The increase in issued capital was done during the period 14th of October – 13th of November, 2014.
The shareholders included in the Issuer’s Register on the 15th of April, 2014 had an applied right for
subscription of new shares according to a conversion index of 0.334763 approved by the decision of the
Extraordinary General Meeting of Shareholders. Of the total shareholders with subscription right, 96
subscriptions were validated.
On the 11th of December, 2014, the Central Depositary SA registered in the Cemacon SA register the
increase in the issued capital which was increased by a number of 76,933,093 shares with a nominal value
of RON 0.1/share, from the value of RON 525,796.00 (divided into 5,257,960 shares) at the value of RON
8,219,105.3 (divided into 82,191,053 shares).
Shareholding structure of the 31st of December, 2014
Shareholder Number of shares Percent
KJK FUND II SICAV-SIF loc. LUXEMBOURG LUX 31,799,065 38.6892%
SC CONSULTANTA ANDREI&ANDREI SRL, ARAD, ARAD County 19,979,032 24.3080%
S.S.I.F. BROKER S.A. CLUJ-NAPOCA, CLUJ County 16,657,252
20.2665%
other shareholders / others 13,755,704 16.7363%
Total 82,191,053 100.0000%
Shareholding structure of the 31st of December, 2013
Shareholder Number of shares Percent
other shareholders / others 100,591,580 38.2663%
KJK FUND II SICAV-SIF loc. LUXEMBOURG LUX 76,677,501 29.1691%
SC CONSULTANTA ANDREI&ANDREI SRL ARAD 46,621,358 17.7354%
ARAD County
S.S.I.F. BROKER S.A. CLUJ-NAPOCA, CLUJ County 38,982,047 14.8293%
Total 262,872,486 100.0000%
24. Reserves
The following describe the nature and type of each reserve from own capitals:
Type of reserve
Description and purpose
Legal reserve They are annually established from the company’s profit in the quantities and limits
provided by the law. In 2013, the limits are 5% applied on the accounting profit until it
reaches 20% of the paid-up subscribed capital. At the end of 2013, the company’s
reserves reached 20% of the subscribed capital, which is why in 2013 no reserves were
established.
Revaluation reserves
The revaluation reserves are established from the differences resulted from the
revaluation of tangible and intangible assets. The presentation of the revaluation
reserves shall be done according to each type of non-current asset and on each
revaluation operation which took place. In 2013, the company made the revaluation and
registered the revaluation results according to the accounting policies.
Other reserves There are other reserves not provided by the law which were optionally established on
the net profit to cover the accounting losses or for other purposes, under the decision of
the general meeting of shareholders, by complying with the legal provisions. In 2013,
the company did not register other reserves.
Type of reserve Initial balance Increases Reductions
Final balance
Legal reserves 1,142.146 - - 1,142,146
Revaluation reserves 23,633,956 1,836,599 (36,453)
,53)
25,434,102
Other reserves 1,700,933 - - 1,700,933
Total 26,477,035 1,836,599 (36,453) 28,277,181
25. Lease
On the 31st of December, 2014, the company concluded financial lease agreements with the following lease
companies:
Lease company Type of lease Leased property
PORSCHE LEASING ROMANIA IFN Financial lease Vehicles
IMPULS LEASING Financial lease Machines, equipment
The situation of debts regarding the financial lease on the 31st of December, 2014 is the following:
Leased assets Initial balance Increases Reductions Final balance
Buildings - - - -
Vehicles 609,120 707,929 399,354 917,695
Equipment 97,057 319,877 123,622 293,312
Total 706,177 1,027,806 1,550,782 1,211,007
The due date of the lease payments during 2013-2014 is presented in the following table:
2014
Lease Payment Due Date Total value Interest Net value
less than 1 year RON 484,780 RON 55,842 428,938
between 1-5 years RON 829,487 RON 47,421 782,066
over 5 years - RON - RON 0
Total RON 1,314,267 RON 103,263 1,211,004
2013
Lease Payment Due Date Total value Interest Net value
less than 1 year RON 292,979 RON 39,794 253,185
between 1-5 years RON 477,337 RON 24,346 452,992
over 5 years - RON - RON 0
Total RON 770,316 RON 64,140 706,177
26. Transactions with affiliates
The company's affiliates are:
Cercon Ariesul with the registered office in Campia Turzii, 1 Ialomitei St., Cluj County
Cemacon holds shares in this company SA
Consultanta Andrei&Andrei Srl with the registered office in Bucharest, 1st district, 14 Jandarmeriei
St., building A2, 3rd entrance, ap. 2; tax identification number: RO 17345454, Trade Register number
J40/14670/2011
Director of Cemacon SA
KJK Fund II SICAV-SIF with the registered office in Luxemburg, 412F Esch Road, code L-2086
Director of Cemacon.
Orion Strategy Solution Srl with the registered office in Cluj County, Cluj-Napoca, 7 Artelor St.; Tax
identification number Ro26118990; Trade Register number J12/3026/2013;
Chairman of Cemacon SA Board of Directors
Liviu-Ionel Stoleru, General Manager of Cemacon SA, is the Director of Orion Strategy Solution Srl
and representative of this entity of the Board of Directors of Cemacon SA.
Casa de Insolventa Transilvania Sprl with the registered office in Cluj County, Cluj-Napoca, 48 Calea
Dorobantilor St., 6th floor, Tax identification number: RO 21057514,
Declared to act together with KJK Fund and Consultanta Andrei&Andrei
S.S.I.F. Broker Sa with the registered office in Cluj-Napoca, 119 Calea Motilor; Tax identification
number: RO 29371864
Declared to act together with KJK Fund and Consultanta Andrei&Andrei
Cemacon Real Estate with the registered office in Salaj County, Zalau, 1 Fabricii St., tax identification
number RO 32604048
Company held by Cemacon SA in a proportion of 100%
Transactions with affiliates (Continued)
The transactions with affiliates are summarized in the following table:
Service Sales Service Acquisitions
Affiliates 1 Jan – 31 Dec 2014 1 Jan – 31 Dec 2013 1 Jan – 31 Dec 2014 1 Jan – 31 Dec 2013
Cercon Ariesul - - -
Consultanta Andrei&Andrei Srl - - 138,167 92,151
KJK FUND II SICAV-SIF - - 87,828 98,552
Orion Strategy Solution Srl - - 593,918 849,553
S.S.I.F. Broker Sa - - 22,311 -
Casa de insolventa Transilvania - - -
Cemacon Real Estate Srl - - - -
Total - - 842,224 1,040,256
Amounts in RON
The balances with affiliates are summarized in the following table:
Receivables from
affiliates
Debts from affiliates Loans received from shareholders
Loans returned to shareholders
Affiliates 31.dec.14 31.dec.13 31.dec.14 31.dec.13 01.01.2014-
31.12.2014
01.01.2013-
31.12.2013
01.01.2014-
31.12.2014
01.01.2013-
31.12.2013
Cercon Ariesul
Consultanta Andrei&Andrei Srl KJK FUND II SICAV-SIF
Orion Strategy Solution Srl S.S.I.F. Broker Sa
Casa de insolventa Transilvania Cemacon Real Estate Srl
- -
- - - -
- - - -
- - -
- -
- - - -
- - - -
- - -
-
-
-
186,380
- 9,817
- -
-
-
- 9,817
- -
-
602,831 997,557
- 503,917
133,325 -
-
- -
- -
- -
-
596,982 979.190
- 497,911
131,748 -
-
- -
- -
-
Total - - 196,197 9,817 2,237,630 - 2,205,831 - Amounts in RON
27. Cash and cash equivalents
Cash and cash equivalents 31-Dec-14 31-Dec-13
Cash at bank 12,336,476 6,902,272
Cash and cash equivalents 2,185 262
Deposits - -
Miscellaneous - -
Total 12,338,661 6,902,535
28. Events subsequent to the reporting date
On the 22nd of December, 2014, the Extraordinary General Meeting of Shareholders of CEMACON S.A.
decided a series of events which were not finalized on the 31st of December, 2014.
a) The approval of the increase in the Company’s issued capital amounting to RON 8,219,105.30 within the
limits of subscriptions validly made within the periods of subscription related to Phase 1 and, respectively,
Phase 2, as defined below, by a cash contribution (including, within Phase 2, by the conversion of
receivables held against the Company) from RON 8,219,105.30 to RON 16,438,210.60, by the issuance of a
number of 82,191,053.00 shares ("New Shares") with a nominal value of RON 0.1/share. The New Shares
shall be submitted for subscription as follows:
i) In Phase 1, all shareholders of the Company registered in the Shareholders’ Register on the 15th of
January, 2015 ("Registration Date”) under their preference right, proportional to the stake in the
issued capital held by them on the Registration Date ("Phase 1”), at a subscription price amounting
to RON 1.5/share, considering a nominal value of RON 0.1/share and a premium on shares amounting
to RON 1.4/share. Thus, in Phase 1, each shareholder exercising the preference right may subscribe
for each share a number of 1 New Shares. The subscription right may be exercised for a period of 31
days from the data established in the announcement and prospectus proportional to the offer
approved by the Financial Supervisory Authority, the date subsequent to the Registration Date and the
publication date of the decision of the Extraordinary General Meeting of Shareholders in the Official
Gazette of Romania.
(ii) If all New Shares submitted for subscription to the beneficial shareholders of the preference right
were not subscribed in Phase 1, in the Period of Subscription related to Phase 1, the new unsubscribed
shares shall be submitted for subscription in Phase 2 to the qualified investors according to the first
come, first served method ("Phase 2”). The Period of Subscription in Phase 2 is 5 business days,
calculated from the first business day following the publication of the Board of Directors’ report
regarding Phase 1 or until the full subscription of shares provided within Phase 2. The Phase 2
subscription price of the New Shares by the qualified investors is minimum RON 1.6/share considering
the nominal values of RON 0.1/share and a premium on shares amounting to RON 1.5/share.
The subscribed shares in Phase 1 shall be fully paid on the Subscription Date in the Company’s bank
account intended for the increase in issued capital, while the subscribed shares in Phase 2 may be
paid both in cash and by converting the receivables held against the Company.
The unsubscribed shares in Phase 2 shall be cancelled by the decision of the Company’s Board of
Directors, and the Company’s issued capital shall be increased within the limit of the results of
validated subscriptions determined by the Company’s Board of Directors.
b) The approval of the restructuring of loans granted to the Company by the Romanian Commercial Bank
S.A. ("RCB") under the loan agreements numbers 25/27th of June, 2008, 542/35333/18th of December,
2006, 186/612/25th of August, 2009, 543/35334/18th of December, 2006, as subsequently amended (“Loan
Agreements”), the total amount due by the Company under the Loan Agreements on the 31st of October,
2014 being €19,646,801.11 (respectively the main total amount of €14,105,964.00 and total interests of
€5,540,837.11, mentioning that the interest is calculated under the relevant agreements until the effective
restructuring and operations related to the asset transfer and establishment of guarantees, restructuring
which includes at least the following operations and legal documents:
(i) conclusion of a novation agreement between RCB, as Lender, the Company, as Existing
Debtor and Cemacon Real Estate SRL (company affiliated to the Company), as New Debtor,
whereby the parties regulate, among others, that:
(i) Cemacon Real Estate SRL takes over by novation a part of the Company’s debts to
RCB under the Loan Agreements, in the amount of €5 million, together with the
related rights and obligations; and that
(ii) the Company’s debt to RCB is reduced to €13 million, shall be denominated in RON
and unitarily regulated by a new loan agreement which replaces the existing Loan
Agreements. The novation shall take place by maintaining all existing guarantees
related to the Loan Agreements;
(ii) by novation, the Company shall transfer to Cemacon Real Estate SRL, by means of a sale and
purchase agreement, a part of its assets, together with the related activity, transfer which is
to include, without limitation, the ownership over the assets referred to in Annex 1 to this
decision, assets evaluated at a value approximately equal to the amount of the debt taken
over by Cemacon Real Estate SRL through novation. Subsequent to the transfer, all
transferred assets shall be mortgaged by Cemacon Real Estate SRL under those mentioned in
section (vii) below.
(iii) the conclusion of a loan agreement between RCB and the Company which replaces the Loan
Agreements and regulates the terms and conditions in which the Company repays to RCB the
amount of €13 million, denominated in RON, respectively for a period of 9 years, starting in
May 2015, together with the related interest and costs to be negotiated by the Company’s
representative.
(iv) to guarantee the fulfilment of the payment obligations arising from the aforementioned loan
agreement and, additionally, all guarantees existing and related to the Loan Agreements to
be fully maintained as a result of novation, the Company shall establish in favour of RCB
Lender the real estate and pledged-asset mortgages over all assets in the property of the
Company, including, without limitation, mortgage over all lands and constructions, equipment
and fixed assets, stocks, receivables (of any nature, including commercial and resulting from
the insurance policies), intellectual property rights, shares held by the Company in any other
entity, including within Cemacon Real Estate SRL, etc.;
(v) conclusion of addenda to all personal security agreements and/or existing mortgage
agreements and related Loan Agreements, whereby the aforementioned novation is
implemented;
(vi) conclusion of a loan agreement between RCB and Cemacon Real Estate SRL regulating the
terms and conditions whereby Cemacon Real Estate SRL repays to RCB the amount of €5
million, respectively within 5 years, together with the related interest and costs to be
negotiated by the representatives of Cemacon Real Estate SRL;
(vii) to guarantee the fulfilment of the payment obligations arising from this loan agreement,
Cemacon Real Estate SRL shall establish in favour of RCB Lender the real estate and pledged-
asset mortgages over all assets in the property of Cemacon Real Estate SRL, including,
without limitation, mortgages over all lands and constructions, equipment and fixed assets,
stocks, receivables (of any nature, including commercial and resulting from the insurance
policies), intellectual property rights, shares held by Cemacon Real Estate SRL in any other
entity, etc.
(viii) conclusion of a company guarantee agreement (fidejussion) whereby the Company
guarantees the obligations of Cemacon Real Estate SRL resulting from the aforementioned
loan agreement within the limit of €3 million and, in exchange for an annual commission
payable by Cemacon Real Estate SRL to the Company amounting to 2.5%/year of the
guarantee value;
(ix) any other required or useful documents to implement the loan restructuring, as described
above.
Considering the effects of the approved capital increase, the entity calculated the diluted result per share;
it is presented in the following table:
Diluted earnings per share
Diluted earnings per share 31.dec.14 31.dec.13
Number of current shares 82,191,053 262,872,486
Number of subsequent issued shares 31,798,947 31,798,947
Number of shares after issue 113,990,000 294,671,433
Total profit/(loss) - RON 1,572,489 - RON 6,535,138
Total profit/(loss) per share - RON 0.0191 - RON 0.0249
Total diluted profit/(loss) per share - RON 0,0138 - RON 0,0222
On the 23rd of February, 2015, Cemacon SA and Business Capital for Romania - Opportunity Fund
Cooperatief U.A (BOF) signed the agreement whereby the parties ordered the freezing and fully
conversion held by BOF amounting to €58,033,045.02 to Cemacon shares as part of the restructuring of
Cemacon loan granted by RCB according to the decision of the Extraordinary General Meeting of
Shareholders as of the 22nd of December, 2014.
On the 19th of March, 2015, the Company signed with the Romanian Commercial Bank the new loan
agreements, thus finalizing the financial restructuring started in 2010. The new signed agreements refer
to:
Loan agreement no. 2 of the 19th of March, 2015 amounting to RON 58,487,000 with maturity in
December 2023.
In the long-term and short-term division of such loans, the aforementioned agreement was taken into
account.
On the loan signature, the difference in the value between the "Existing payment obligations" and, on the
other hand, the "Payment obligation of Cemacon RE” and "New payment obligation of Cemacon" as
defined by the loan agreement, was cancelled according to the agreement.
29. Adjustments of accounting errors
In 2014, the company performed the correction of the 2013 accounting errors amounting to RON 121,421,
representing expenses related to 2013 green certificates which were not provisioned.
In order not to affect the 2014 financial year, the company registered such expense in relation to the
retained earnings.
The effect of such transaction can be summarized in the following table:
Undistributed result as of the 31 Dec 2014 (26,668,785)
Adjustment of accounting error (121,421)
Undistributed result after adjustment (26,790,206)
2013 comprehensive income (6,535,138)
Adjustment of accounting error (121,421)
2013 comprehensive income after adjustment (6,656,559)
The 2013 earnings per share after the adjustment registration is summarized in the following table
Earnings per share
2013 before
adjustment
2013 after
adjustment
Number of issued shares 262,872,486 262,872,486
Total profit/(loss) (6,535,138) (6,656,559)
Total profit/(loss) per share (0.0249) (0.0253)
30. Payment based on shares
Considering the decision no. 1 of the Ordinary General Meeting of Shareholders of Cemacon SA as of the
25th of October, 2013, implemented by the Decision no. 108 of the Board of Directors of Cemacon SA as of
the 24th of September, 2014 and management agreements signed with the company’s managers whereby
there is the obligation to grant a bonus in the Company’s shares to the management, more exactly, during
2014-2016, within the total limit of 5% of the Company’s issued capital during the aforementioned period
and within the minimum annual limit of 1.6% of the Company's issued capital. On the 31st of December,
2014, the company registered a provision amounting to RON 653,825.
2014 2014 2013 2013
Weighted average of
the acquisition price (RON)
Number of shares
Weighted average of
the acquisition price (RON)
Number of shares
Unpaid on the 1st of January - - - -
Granted during the year 0.3374 1,937,832 - -
Cancelled during the year - - - -
Used during the year - - - -
Expired during the year - - - -
Unpaid on the 31st of December 0.3374 1,937,832 - -
The total number of shares to be granted within the agreement is 3,516,401.55 divided by 3 years as
follows:
2014 1,195,576.53
2015 1,195,576.53
2016 1,125,248.49
Shares related to 2014 were not settled on the 31st of December, 2014 which is why the company
acknowledged a provision amounting to RON 653,825.
In order to establish the provision, Cemacon share trade price was considered on the current platform of
Bucharest Stock Exchange on the 31st of December, 2014: RON 0.2748/share and the price of RON 0.4000
per share, price at which the company estimates that the market shall be stabilized as a result of the capital
operations. Thus, the average of the two prices has been applied, obtaining an average price of RON
0.3374/share. To obtain the fair value of the shares, the entity has used 2nd level information.
31. Other information
Other elements of the comprehensive income:
In other comprehensive income elements, the entity registered the transfer of the revaluation reserve
related to the invalidated fixed assets amounting to RON 18,701.
Information on the Company’s presentation:
Cemacon SA is a Romanian legal entity, established as joint stock Company under the Government Decision
no. 1200/1991 with the registered office in Cluj-Napoca, 48 Dorobantilor St., Silver Business Center, 1st
floor, Cluj County. The company’s main activity is "Manufacture of bricks, roof tiles and construction
products, in baked clay".
The bases of conversion used to express in national currency the assets and liabilities, income
and expenses initially outlined in a foreign currency:
The way used to express the property items in national currency, income and expenses emphasized in a
foreign currency is presented in Note 1. The main exchange rates used for RON conversion of balances
expressed in foreign currency on the 31st of December, 2013 and 31st of March, 2014 are:
Exchange rate
Foreign currency Abbreviation 31-Dec-14 31-Dec-13
US dollar USD 3.6868 3.2551
Euro EUR 4.4821 4.4847
Fees paid to auditors/censors
All paid fees refer to the audit services on the individual financial statements prepared by the Company
under IFRS. The Company paid during the year concluded on the 31st of December, 2014, fees to auditors
under the agreement concluded between the parties. The Company's audit is provided by BDO Auditors &
Accountants SRL.
Activity segments.
During 2013, the company re-commissioned the zeolite mineral powders department, established in 1994.
During the year, the company registered expenses amounting to 312,000. The income from the sale of
zeolite mineral powders related to 2014 amounted to 65,234.
Amendments.
The directors are not entitled to subsequently amend the financial statements.
The financial statements together with the notes to the financial statements were published for approval on
the 30th of March, 2015.
32. Contingents
Taxation
All amounts due to the State for taxes and fees were paid or registered on the balance date. The Romanian
tax system is undergoing consolidation and harmonization with the European legislation, there being
different interpretations of the authorities in connection with the tax legislation, which may give rise to
taxes, fees and additional penalties. If the state authorities discover violations of the Romanian legal
provisions, they may be determined as applicable: confiscation of the concerned amounts, imposition of
additional tax liabilities, imposition of fines, application of delay increases (applied to remaining actual
payment amounts). Therefore, the tax sanctions resulted from violations of the legal provisions may lead to
important amounts to be paid to the State.
The Company deems that it paid on time and fully all taxes, fees, penalties and penalty interest, if
applicable.
In Romania, the tax year is opened for verifications for a period of 5 years.
Transfer price
Under the relevant tax legislation, the tax assessment of a transaction with the affiliates is based on the
market price concept related to that transaction. Under this concept, the transfer prices must be adjusted
so as to reflect the market prices which would have been established between the entities between which
there is no relation of affiliation and which act independently under “normal market conditions”.
It is likely that the transfer price verifications are carried out in the future by the tax authorities to
determine whether these prices comply with the principle of "normal market conditions" and that the
taxable base of the Romanian taxpayer is not distorted.
Risk factors
Border market risk
The border market investors must be aware that such markets have a great risk than the markets of
countries with developed economy and mature legal and political systems. This risk is determined by the
need to adapt the legal system to create efficient instruments both legally and economically to ensure the
required framework of a functional market economy.
The Romanian capital market classifies at the current level of development in the category of border
markets, which have greater risks compared to developed markets, although they can provide greater
performance to investors. The country risk is generated by the probability of political, social and economic
contingencies, repeated legal changes, and fluctuations of exchange rate or high rates of inflation.
Even if Romania is a member state of the European Union, the Issuer’s financial statement and results may
be influenced by contingencies characteristic to a border market, considered to be a market characterized
by a higher volatility, especially in the current global context.
Risk determined by the correlation with global market evolution
The events on the global financial market have a direct and indirect impact on the evolution of the
Romanian economic market which is reflected on the evolution of the Romanian capital market in the last
years. Therefore, the global evolutions affect both the Issuer’s activity and its evolution on the capital
market.
The Romanian economy, as any developing economy, is sensitive to the fluctuation of global business. The
political, economic, social and any other type of events on the global market have a significant impact on
the economic climate in which the Issuer carries out its activity.
Financial crisis
The significant turbulences occurring on the global loan market had a significant effect on the entities
operating in various industries, creating a crisis of liquidity and solvency in the financial banking markets.
Other significant effects of the crisis are higher funding costs, reduction of the loan market and
consumption, significant volatility of capital markets and exchange rates etc. Bankruptcies affected the
banking financial sector, some states contributing to the re-capitalization of such entities in order to save
them from bankruptcy. The lending capacity has significantly been reduced as the lending availability, so
that most of the non-banking sector worldwide is facing a downturn or severe economic recession.
Risks generated by the legislative instability
The results of Issuer’s initiatives are difficult to predict and may suffer from the Romanian legislative
instability. The frequent modification of norms, including those involving a direct impact on the Issuer’s
activity may generate risks for the Issuer.
The Issuer’s effort to constantly adapt to the changing legislative requirements may generate significant
additional costs and the possible future changes in the legislative framework may negatively influence the
Issuer’s activity and profitability.
Risk of exchange rate variations
The Company’s currency transactions are recorded in the accounting records at the exchange rate as of
their date, earnings and losses resulting from the settlement of such transactions and from the conversion
of monetary assets and liabilities denominated in foreign currency, being recognized as expenses or income
in the profit or loss account.
The cash balances in foreign currency are converted in RON at the exchange rate as of the end of the
year.
Loan risk
The Company carries out commercial activities only with acknowledged third parties, which justify the
financing on loan. The Company’s policy is that all customers who want to carry out commercial relations
as lending to be subject to the verification proceedings. Moreover, the receivable balances are continuously
monitored, resulting in insignificant exposure of the Company to the risk of bad debt.
Operational risks
The main operational risks faced by the Company are presented in the following table:
Risk Risk category Impact
Lack of (reliable) supplies for raw materials and
materials Acquisitions Improper product quality
Increase in supply prices for raw materials,
materials, packaging Acquisitions Production-profitability cost
Increase in the energy price over the performed
estimates Acquisitions Production-profitability cost
Unpredicted increase of prices for transportation
services in certain periods Acquisitions Profitability
Losses on non-collection of receivables due to the
client’s insolvency / bankruptcy Customer Financial losses
Increase in the average collection period with
impact on cash-flow and non-collection risk Customer Financial losses
Newly launched products of competition (especially
similar products in the traditional area) Competition
Loss of market share, pressure
on prices
Entry into a price war with competitors Competition Reduction of margins
Low penetration and sales under forecasts of
products newly launched on the market Innovation Costs, competitiveness
Technical issues, accidental failures which may
affect productivity Manufacturing Production-profitability cost
Improper quality of batches of finished products Manufacturing
Image-brand damage, non-
performance of the sales plan
Information attack/incident which may affect the
normal performance of internal processes
(manufacturing, invoicing, e-mail)
Information and
communication
technology
Blocking basic
processes/activities
Loss of confidential information
Discrediting own products by the competition Reputation Image-brand damage
Loss of lawsuits pending with payment of
compensation Legal Exceptional financial losses
Interest rate risk
The interest rate risk has the risk that the value of a financial instrument fluctuates due to the variation of
interest rates on the market. The Company's exposure to the risk of changes in interest rates primarily
relates to variable interest bearing loans which the Company has on the long-term.
Liquidity risk
The management of the liquidity risk belongs to the Company’s management, which established a proper
framework for the risk management regarding the short- and average-term provision of funds. The
Company manages the liquidity risk by continuously monitoring the real cash flow and by mapping the
maturity profiles of financial assets and debts.
Risks on shares
In terms of value of transactions or market capitalization, the Bucharest Stock Exchange can be considered
a small size stock exchange compared to other markets in the world, there being such risks related to the
low market liquidity and high volatility of the traded share price.
The low market liquidity may determine the impossibility to buy or sale the Company’s shares without a
significant impact on the price of that share, thus generating a high volatility of share price.
33. Reconciliation with the financial statements in the format published by the Ministry of
Finance (MF)
Reconciliation of the Financial Position
Non-current assets 31-Dec-14 31-Dec-13
Other non-current assets MF 59,397 54,689
Deferred tax 2,634,517 246,177
Investments in shares IFRS 200 -
Other non-current assets IFRS 2,693,914 300,866
Verification - -
Current assets 31-Dec-14 31-Dec-13
Stocks MF 36,723,567 30,962,921
Held-for-sale assets IFRS 22,833,650 22,303,952
IFRS stocks 13,889,917 8,658,968
Verification - -
Receivables MF 9,161,689 7,675,019
Deferred tax (2,634,517) (246,177)
Prepayments 41,101 72,046
Treasury advance payments 1,614 10,855
Receivables IFRS 6,567,750 7,511,743
Verification - -
Cash and cash equivalents MF 12,340,275 6,913,390
Treasury advance payments (1,614) (10,855)
Cash and cash equivalents IFRS 12,338,661 6,902,535
Verification - -
Reserves 31-12-14 31-Dec-13
Reserves MF 28,775,765 26,956,917
Reserves representing surplus from revaluation reserves (498,583) (479,882)
Reserves IFRS 28,277,182 26,477,035
Verification - -
Retained earnings 31-12-14 31-Dec-13
Retained earnings MF 14,794,441 33,899,335
Retained earnings from adoption of IAS 29 MF 10,665,606 10,665,606
Current earnings MF (1,572,489) (6,535,138)
Reserves representing surplus from revaluation reserves 498,584 479,882
Retained earnings IFRS (26,533,953) 50,620,197
Verification - -
Reconciliation of the Comprehensive Income
Operating Income 31-12-14 31-12-13
Operating income MF 58,022,008 50,678,617
Income from current assets adjustment 499,199 2,024,063
Income from provisions 2,086,454 595,061
Expenses on adjustment of stocks 506,721 684,745
Operating income IFRS 60,141,007 44,876,878
Verification - -
Operating expenses 31-12-14 30-Jun-13
Operating expenses MF 52,090,062 45,462,216
Income from current asset adjustment 499,199 2,024,063
Income from provisions 2,086,454 595,061
Expenses on adjustment of stocks 506,721 684,745
Operating expenses IFRS 54,209,061 47,870,085
Verification - -
General Manager Financial Manager
Stoleru Liviu Sologon Daniel
Signature _________ Signature _____________
Company’s stamp