Industrial Holding Bulgaria Plc
Interim Consolidated Financial Statements
For the period ended 31 March 2011
Consolidated Income StatementFor the period ended 31 March / / /
In BGN thousand / Note / 2011 / 2010
Revenue / 7 / 14,668 / 10,455
Other operating income / 8 / 300 / 560
Increase (reduction) of work in progress / 9 / 14,131 / 16,976
Capitalized expenses on own assets creation / 10 / 22 / -
Costs of materials / (14,862) / (12,728)
Costs of hired services / (5,324) / (6,066)
Depreciation and amortization costs / 18,19 / (2,382) / (1,843)
Payroll costs / 11 / (5,679) / (5,327)
Cost of assets sold / 12 / (262) / (468)
Other operating expenses / (926) / (460)
Operating profit/(loss) / (314) / 1,099
Financial income / 3,417 / 17
Financial expenses / (975) / (906)
Net financial income / 13 / 2,442 / (889)
Profit of associates reported under the capital method / 20 / - / -
Operating profit/(loss) prior to taxation / 2,128 / 210
Tax expenses / 14 / (147) / (177)
Operating profit/(loss) after taxation / 1,981 / 33
Profit/(loss) distribution
For the majority owners of the company / 2,017 / (341)
For the non-controlling interest / (36) / 374
1,981 / 33
Income per share for the majority owner
Basic earnings per share (in BGN) / 27 / 0.034 / (0,008)
Diluted earnings per share (in BGN) / - / -
The Income Statement should be considered together with the notes thereto, which form integral part of the Consolidated Financial Statements presented on pages 8 to 56.
Daneta Zheleva / Ms. Toshka Vassileva
Chief Executive Officer / Chief Accountant
Consolidated Statement of Comprehensive Income
For the period ended 31 March
In BGN thousand / Note / 31 March 2011 / 31 March 2010
Operating profit/(loss) after taxation / 1,981 / 33
Other comprehensive income
Movement in revaluation reserve resulting from assets sold / -
Hedging effects / 13 / 9 / 29
Other changes / 3 / (1)
Other comprehensive income for the period, net of tax / 12 / 28
Total comprehensive income for the period / 1,993 / 61
Total comprehensive income for:
For the majority owners of the company / 2,031 / (321)
For the non-controlling interest / (38) / 382
Total comprehensive income for the period / 1,993 / 61
The Consolidated Statement of Comprehensive Income should be considered together with the notes thereto, which form integral part of the Consolidated Financial Statements presented on pages 10 to 70.
Consolidated Statement of Financial PositionAs of 31 March
In BGN thousand / Note / 31 March 2011 / 31 December 2010Assets
Property, plant and equipment / 18 / 271,444 / 273,150
Intangible Assets / 19 / 4,954 / 5,061
Goodwill / 19 / 6,212 / 6,212
Investments in associates reported under the capital method / 20 / 15,132 / 15,132
Other investments / 21 / 8 / 8
Long-term receivables / 22 / 9,127 / 9,127
Total non-current assets / 306,877 / 308,690
Inventories / 23 / 108,217 / 100,706
Trade and other receivables / 24 / 9,294 / 10,525
Cash and cash equivalents / 25 / 3,956 / 8,906
Total current assets / 121,467 / 120,137
Total assets / 428,344 / 428,827
Equity
Share Capital / 26 / 58,282 / 58,282
Premium reserve / 30,313 / 30,313
Reserves / 67,401 / 67,394
Retained earnings (net) / 70,203 / 68,179
Capital and reserves of majority owners / 226,199 / 224,168
Non-controlling interest / 26,180 / 26,529
Total equity and reserves / 252,379 / 250,697
Liabilities
Borrowings / 28 / 40,658 / 41,915
Debenture loan / 28 / - / -
Other long-term payables / 29 / 1,654 / 1,656
Provisions / 30 / 199 / 239
Deferred tax liabilities / 31 / 8,418 / 8,418
Total non-current liabilities / 50,929 / 52,228
Borrowings / 28 / 25,903 / 31,432
Debenture loan / 28 / 21,650 / 21,650
Interest charged on debenture loan / 731 / 304
Trade and other payables / 32 / 75,986 / 72,200
Provisions / 30 / 766 / 316
Total current liabilities / 125,036 / 125,902
Total equity and liabilities / 428,344 / 428,827
The Consolidated Statement of Financial Position should be considered together with the notes thereto, which form integral part of the Consolidated Financial Statements presented on pages 8 to 56.
Consolidated Cash Flow StatementFor the period ended 31 March 2011
In BGN thousand / Note / 31 March 2011 / 31 March 2010Operating cash flow
Proceeds from clients / 15,937 / 13,941Payments to suppliers / (19,058) / (15,798)
Remuneration related payments / (5,200) / (5,247)
Paid corporate profit tax, net / (192) / (398)
Foreign exchange gains/loss / (66) / 32
Other proceeds (payments) / 917 / (235)
Net operating cash flow / (7,662) / (7,705)
Investment cash flow
Proceeds from sale of non-current tangible assets / 12 / 4Payments for acquisition of non-current tangible assets and their economic construction / (659) / (44)
Recovered loans and interest / 392 / -
Loans granted / (515) / (335)
Purchase of investments / - / (53)
Received dividends from investments / - / 874
Interest received on loans, deposits and current accounts / 46 / 3
Other proceeds (payments) / 26 / -
Net investment cash flow / (698) / (425)
Financial cash flow
Proceeds from securities issue / -Credits and loans received / 11,500 / 20,732
Credits and borrowings repaid / (6,447) / (11,845)
Dividends paid / (270) / (321)
Loan interests, charges and commission fees paid / (1,323) / (528)
Other proceeds (payments) / (15) / (122)
Net financial cash flow / 3,410 / 7,916
Net increase in cash and cash equivalents / (4,950) / (214)
Cash and cash equivalents as of 1 January / 25 / 8,906 / 5,435
Cash and cash equivalents at the end of the period / 25 / 3,956 / 5,221
The Consolidated Statement of Cash Flows should be considered together with the notes thereto, which form integral part of the Consolidated Financial Statements presented on pages 8 to 56.
5
INDUSTRIAL HOLDING BULGARIA PLCConsolidated Equity Statement
For the year ended 31 December 2009
In BGN thousand /
Note / Share Capital / Premium reserve / Additional and statutory reserves / Hedging reserve / Revaluation reserve / Retained earnings / Total for the Group / Non-controlling interest / Total
Balance as of 1 January 2010 / 43,756 / 24,503 / 11,582 / (18) / 37,257 / 79,625 / 196,705 / 25,561 / 222,266
Total comprehensive income for the period
Profit and loss / - / - / - / - / - / (341) / (341) / 374 / 33
Other comprehensive income
Other changes in the revaluation reserve / - / - / - / - / (1) / 1 / - / - / -
Hedging effects / - / - / 18 / - / - / 18 / 11 / 29
Other changes / - / - / - / - / 2 / 2 / (3) / (1)
Total other comprehensive income / 26 / - / - / 18 / (1) / 3 / 20 / 8 / 28
Total comprehensive income for the period / - / - / 18 / (1) / (338) / (321) / 382 / 61
Transactions with shareholders reported in the Statement of Equity
Contributions by and allocations to shareholders
Profit distribution for reserves / - / - / 7 / - / - / (7) / - / - / -
Dividends paid / - / - / - / - / - / - / - / (377) / (377)
Acquisition of non-controlling interest / - / - / - / - / - / - / - / - / -
Total transactions with shareholders / - / - / 7 / - / - / (7) / - / (377) / (377)
Balance as of 31 March 2010 / 43,756 / 24,503 / 11,589 / - / 37,256 / 79,280 / 196,384 / 25,566 / 221,950
Consolidated Equity Statement (continued)
For the Period Ended 31 March 2011
In BGN thousand /
Note / Share Capital / Premium reserve / Additional and statutory reserves / Hedging reserve / Revaluation reserve / Retained earnings / Total for the Group / Non-controlling interest / Total
Balance as of 1 January 2011 / 58,282 / 30,313 / 11,264 / (335) / 56,465 / 68,179 / 224,168 / 26,529 / 250,697
Total comprehensive income for the period
Profit and loss / - / - / - / - / - / 2,017 / 2,017 / (36) / 1,981
Other comprehensive income
Other changes in the revaluation reserve / (2) / 2 / -
Hedging effects, net of taxes / 13 / - / - / 9 / - / - / 9 / - / 9.
Other changes / - / - / - / - / - / 5 / 5 / (2) / 3
Total other comprehensive income / - / - / 9 / (2) / 7 / 14 / (2) / 12
Total comprehensive income for the period / - / - / 9 / (2) / 2,024 / 2,031 / (38) / 1,993
Transactions with shareholders reported in the Statement of Equity
Contributions by and allocations to shareholders
Profit distribution for reserves / - / - / - / - / - / -
Distribution of reserves for loss coverage / - / - / - / -
Dividends paid / - / - / - / - / (311) / (311)
Capital increase / 26 / - / - / - / - / - / -
Total transactions with shareholders / - / - / - / - / (311) / (311)
Balance as of 31 March 2011 / 58,282 / 30,313 / 11,264 / (326) / 56,463 / 70,203 / 226,199 / 26,180 / 252,379
The Consolidated Statement of Changes in Equity should be considered together with the notes thereto, which form integral part of the Consolidated Financial Statements presented on pages 8 to 56.
53
INDUSTRIAL HOLDING BULGARIA PLCNotes to the consolidated financial statements
1 / Status and scope of operations
Industrial Holding Bulgaria PLC (the Company or the Holding) is a public limited company having its seat in Sofia, Bulgaria and address of management at 42 Damyan Gruev Blvd, Sofia 1000. The consolidated statements of the Company for the period ended 31 December 2010 comprise the statements of the Company and its subsidiaries (together referred to as the “Group”), as well as the interests of the Group in associates.
The scope of activity of the Group include production of and trading in heavy machinery, shipbuilding, ship repairs and transportation, furniture production, real estate transactions, port services and accompanying activities from /to ships and land transport vehicles, maintenance and repairs and other services.
Industrial Holding Bulgaria and some of the subsidiaries are listed at Bulgarian Stock Exchange – Sofia.
2 / Basis of preparation
(а)
/Statement of compliance
These Consolidated Financial Statements have been prepared in compliance with the International Financial Reporting Standards (IFRS) adopted by the European Union (EU).The consolidated financial statements were approved for publication by the management of the Company on 30 May 2011.
/
These Interim Consolidated Financial Statements should be considered in relation to the Annual Consolidated Financial Statements of the Group as of 31 December 2010.
(b)
/Basis of valuation
/ These Consolidated Financial Statements have been prepared based on historical cost with the exception of the following material articles in the statement of financial position:· Derivative financial instruments measured at fair value;
· Land, buildings, plant and equipment, which have been presented at a revalued amount less the accumulated depreciation and impairment losses
· Financial assets measured at fair value through gains and loss;
· Financial assets available for sale, which have been valued at their fair value.
(c) / Functional currency and reporting currency
These Consolidated Financial Statements are presented in BGN, which is the functional currency of the Company and the Group. The financial data in the Annual Financial Statements are given in BGN thousand.
(d) / Use of estimates and assumptions
The drafting of the consolidated financial statements under IFRS requires that the management makes judgments, estimates and assumptions which affect the application of the accounting policies and of the reported amounts of the assets, liabilities, gains and losses. The actual results may differ from such estimates.
The expectations and key assumptions are revalued on a current basis. The revaluation of the accounting estimates is recognized for the period when the estimate is revalued when the revaluation affects only this period, or in the period of revaluation and future periods if the revaluation affects future periods.
Information about critical estimates in the application of the accounting policies which have the most significant effect on the amounts recognized in the consolidated financial statements, is given in the following notes:
2 / Basis of preparation (continued)
(d) / Use of estimates and assumptions (continued)
Note 18 – Property, plant and equipment
Note 23 – Inventories
Note 24 – Trade and other receivables
Note 31 – Deferred tax assets and liabilities
Information about the uncertainty in the assumptions and estimates which carry a significant risk for material adjustments in the following financial year is included in the following notes: