Eczacıbaşı Yapı Gereçleri Sanayi ve Ticaret A

Transkript

ECZACIBASI YAPI GERECLERI SAN. VE TIC. A.S.
BOARD OF DIRECTORS ANNUAL REPORT PREPARED PURSUANT TO
COMMUNIQUE SERIAL:XI NO:29
I. INTRODUCTION
1. Period Covered by the Report
This report covers the activities of Eczacibasi Yapi Gerecleri Sanayi ve Ticaret A.S.
between 1 January 2009 and 31 December 2009.
2. Company Name
Eczacibasi Yapi Gerecleri Sanayi ve Ticaret A.S.
3. Boards in Charge during the Period
Board of Directors
Bülent Eczacıbaşı
Erdal Karamercan
Haluk Bayraktar
Hüsamettin Onanç
Mustafa Sacit Basmacı
Atalay Muharrem Gümrah
Ahmet TahsinYamaner
Chairman
Vice Chairman
Member-General Manager
Member
Member
Member
Member
The Directors were elected at the General Assembly Meeting on 3 April 2009 for a period
of one year.
Audit Committee
Bülent Avcı
Tayfun İçten
Auditor
Auditor
The auditors were appointed to serve until the examination of the 2009 accounts at the
following Ordinary General Assembly Meeting.
4. Registered and Paid-in Capital of the Company
Registered Capital
Paid-in Capital
TRY 300,000,000.TRY 112,830,900.-
As EYAP is a publicly-traded company, the exact number of its shareholders is not
known.
The value of EYAP’s shares fluctuated over the year parallel to movements in the
composite index of the Istanbul Stock Exchange. The 2009 closing price per share was
TRY 2.62.
No dividends were distributed during the previous three years.
Shareholders owning more than 10% of EYAP’s capital are listed below.
Shareholders
Eczacıbaşı Holding A.Ş.
Eczacibasi Yatırım Holding Ort. A.S.
Share Value (TRY)
78,937,180
8,455,335
Share (%)
69.96
7.49
As of 31 December 2009, the value and percentage of shares held by the principal
shareholders of publicly-owned shares were as follows.
Shareholders
Eczacıbası Holding A.S.
Eczacıbaşı Yatırım Holding Ort. A.Ş.
Share Value (TRY)
4,810,227
2,799,999
1
Share (%)
4.26
2.49
5. Main Factors Affecting Performance and Expectations:
EYAP’s total sales decreased by 6% in 2009 compared to the same period of the
previous year due to the continuing impact of the global economic crisis. Despite the
decline in sales, measures taken in previous years to increase productivity and
profitability enabled us to transform our operating loss of TRY28,471,991 in 2008 into an
operating profit of TRY 3,693,987.
On 30 June 2009, we took over Vitra Küvet AŞ through a forward-looking merger
transaction. Consequently, our consolidated income statement for the year as a whole
includes the operating results of Vitra Kuvet for the July 2009-December 2009 period.
6. Outlook:
Our shareholding in our affiliate Burgbad reached 95.02% following the acquisition of
100,000 shares in October 2009. With this purchase, EYAP obtained the position of
majority shareholder of Burgbad AG pursuant to the German Joint Stock Company Law,
enabling us to purchase the shares held by the minority shareholders of Burgbad AG at a
price determined by a court expert.
One of the assets we acquired on taking over VitrA Küvet AŞ was a kitchen furniture
plant that was being rented to Intema Insaat ve Tesisat Malzemeleri Yatirim ve
Pazarlama AŞ, one of our affiliates. Starting on 1 January 2010, we have decided to use
the plant ourselves, this way expanding our furniture production to include kitchen as well
as bathroom furniture and increasing the productivity of this business.
In 2009, we began work on our R&D center in Bozüyük, which we plan to begin operating
in 2010. The center will coordinate all of our R&D, innovation, and global collaboration
activities so as to position us at the forefront of our sector.
7. Market Position:
According to the market share report prepared by the international market research
company GFK, EYAP maintains its leadership in the Turkish ceramic sanitary ware,
faucet, and concealed cistern markets.
8. Developments in Manufacturing Units, Capacity Usage Rates, Goods and
Services Produced, and Comparisons of Quantity, Quality, Demand and Prices
with Previous Period Figures:
In January 2009, EYAP completed the transportation of its concealed cistern and
bathroom accessory production plant in Gebze to Bozüyük, as planned. The move to a
single production site has significantly reduced costs and increased productivity.
Upon transfer of the complementary products plant in Kartal, İstanbul, to Bozüyük, we
expect to reduce costs and increase productivity further in this product group.
2
9. Developments in Prices of Goods and Services, Sales Proceeds and Conditions,
Output and Productivity, and Reasons Thereof:
In 2009, our sales in Turkey decreased by 6% in TRY terms, while our international sales
dropped by 17% in Euro terms. The main reasons for these declines were the contraction
of the American and European markets caused by the global crisis and our strategic
decision to reduce OEM sales.
In light of the downturn in sales to North America and Europe, we decided to restructure
our sales operations and review our activities in all markets, with the aim of switching our
focus to alternative markets with promising growth potential.
10. Measures to Improve our Financial Structure:
During the global crisis, we implemented a series of measure aimed at limiting the impact
of the crisis on our financial health. We extended the payment terms for domestic
purchases, postponed non-essential investments, implemented measures to reduce
stocks, and reviewed expense items so as to increase savings.
11. Information on Interests in Enterprises subject to Consolidation in the
Parent Company Capital (Cross-Shareholding):
As of 31 December 2009, Eczacıbaşı Holding A.Ş. had a 74.22% shareholding in our
company, including its shares in the publicly-owned portion of our company. EYAP does
not have a cross-shareholding relationship with Eczacıbaşı Holding A.Ş. nor an influence
on this company’s business and management policies. EYAP acquired a majority share
of Burgbad AG in July 2008 and now has a shareholding of 95.02% in this German
company.
12. Descriptions of the Main Components of the Building Products Division’s
Internal Audit and Risk Management Systems with respect to the Preparation of its
Consolidated Financial Statements:
An international independent auditing company located in Germany has audited the 31
December 2009 financial statements of the subsidiary included in the consolidation to
ensure their compliance with the legislation of Turkey’s Capital Markets Board and
International Financial Reporting Standards.
3
I. OPERATIONS
A) Investments
EYAP invested TRY 5,506,116 (USD 3,564,060) in the modernization of its ceramic
sanitary ware plant during the 1 January 2009-31 December 2009 period.
B) Developments in Production of Goods and Services
Capacity Utilization Rates (%)
Production Units
Ceramic Sanitary Ware
Sanitary Fittings
Bathtubs
2009/12
69
56
87
2008/12
80
72
104
Changes in Production Volume 2009/12-2008/12
Production (1000 Units)
Ceramic Sanitary Ware
Duroplast Toilet Seats
Concealed Cisterns
Furniture
Chrome-Plated Products+
Colored Products
Bathtubs and Panels
Shower Trays
2009/12
3,438
368
128
22
2008/12
4,002
441
139
31
Change (%)
(14)
(17)
(8)
(29)
1,754
125
58
2,279
155
65
(23)
(19)
(12)
The foreign currency value of exports slipped from Euro 97.58 million in 2008 to Euro 81.01
million in 2009.
Export Revenue:
Eczacibasi Yapi Gerecleri Exports - Million €
120.00
97.58
100.00
81.01
80.00
60.00
40.00
20.00
2009/12
4
2008/12
Eczacibasi Yapi Gerecleri
Main Export Markets (% of Total)
Germany
27%
Germany
USA
Other Countries
55%
USA
4%
UK
Other Countries
UK
14%
C. Major Financial Ratios
Current Ratio
Liquidity Ratio
Total of Debts / Assets
Total of Equity / Assets
Total of Equity / Debts
2009/12
2008/12
0.85
0.58
0.80
0.20
0.25
1.07
0.57
0.58
0.42
0.72
D. Administrative Operations
1. Company Directors and their Functions:
Name Surname
Haluk Bayraktar
Levent Giray
Hakan Şahin
Cem Görürgöz
Mustafa Akdoğan
D.Erhan Arpaç
Berna Erbilek
Mustafa Manavoğlu
Mehmet Mercan
Oktay Pehlevan
Ayşegul Uzel
Function
General Manager
Assistant General Manager
Projects Director
Factory Manager-Kuvet
Purchasing Manager
HR Manager
Marketing Manager
Product Development Manager.
Factory Manager-VitrA
Factory Manager-Artema
Financial Affairs Manager
2. Personnel and Labor Changes:
5
Profession
MSc. Mechanical Engineer
MSc. Industrial Engineer
Industrial Engineer
Mechanical Engineer
Industrial Engineer
Lawyer
Business Manager
Mechanical Engineer
Metallurgy Engineer
Mechanical Engineer
Business Manager-S.M.M.M
Status
Union
Non-Union
Total
Entries
185
82
267
Departures
98
70
168
Year-end headcount
1,260
410
1,670
3. Collective Bargaining Agreements:
On 1 August 2009, EYAP signed a new Collective Bargaining Agreement with the Union
for the VitrA unit that is effective for the period 1 January 2009-31 December 2010.
The Collective Bargaining Agreement for the Artema unit that EYAP signed on 5
December 2008 is valid for the period 1 September 2008-31 August 2010.
4. Research & Development Activities:
In 2009, EYAP spent TRY 4,404,725 on research and development activities.
5. Donations:
In 2009, EYAP donated a total of TRY 259,440 to various projects, including TRY
154,840 in materials and services to Primary Boarding Schools involved in the
Eczacıbaşı Group Hygiene Project and TRY 57,000 to the Dr. Nejat Eczacıbaşı
Foundation.
III) RECOMMENDED DISTRIBUTION OF PROFITS AND RESULT
EYAP has no profit to distribute due to its net loss for the period.
BOARD OF DIRECTORS
6
Report on Compliance with Corporate Governance Principles
1. Declaration of Compliance with Corporate Governance Principles:
During the period 1 January 2009 – 31 December 2009, we implemented some but
not all of the principles issued by the Capital Markets Board (CMB). Detailed
information is given below.
PART I. SHAREHOLDERS
2. Division of Relations with Shareholders:
EYAP does not have a shareholder relations unit because there is little demand for a
unit of this kind. Instead, we manage these relations through the Finance
Department, which oversees communication with the CMB, Istanbul Stock Exchange,
Central Registry Agency, Takasbank and shareholders. In 2009, we received and
responded to four inquiries and 15 requests for annual reports.
3. Exercise of Shareholders Right to Obtain Information:
Shareholders’ requests for information are usually transmitted by intermediary
organizations. These requests are accepted by appointment and the required
meetings arranged. Individual requests are generally received in written form and
answered as soon as possible. In 2009, we received and responded to five written
requests. Shareholders’ rights and developments that can affect these rights are
announced by the Istanbul Stock Exchange; hence, we did not use the electronic
media for this purpose during the period. Our articles of association do not contain
any clause about appointing a special auditor, nor did we receive any demand for one
during the period.
4. Information on the General Meeting:
The general shareholders’ meeting was held punctually during the period, and the
attendance rate was 89.6%. Shareholders were invited to the meeting through
announcements in the press and the bulletin of the Istanbul Stock Exchange. Fifteen
people attended the meeting including members of the media and shareholders from
the publicly-owned part of the Company.
The Company made its annual report and financial statements available to
shareholders at its headquarters during the two weeks before the meeting.
Shareholders exercised their right to ask questions at the general meeting and
received responses from the Board of Directors.
There is no provision in the Company’s articles of association that decisions
regarding the sales, purchase and lease of large assets be taken up at the general
meeting, but they are put on the agenda anyway.
To facilitate attendance, the general meeting is announced in popular newspapers
and held in the city center. The minutes of the general meeting are sent to the
Istanbul Stock Exchange and CMB; they can also be freely viewed at the Company’s
headquarters and on the Investor Relations page of Eczacıbaşı Holding’s web site:
(www.eczacıbasi.com.tr).
7
5. Voting Rights and Minority Rights:
There are no privileged voting rights or mutual affiliate relationships. To date, there
has been no shareholder demand concerning minority shares. The Company does
not use the cumulative voting procedure.
6. Dividend Policy and Time of Dividend:
At a meeting held on 17 March 2006, the Board of Directors established the following
corporate governance principles with regard to the Company’s profit distribution
policy:
There are no special references in the Company’s articles of association to privileged
shares, founder benefit shares, the distribution of profit to members of the Board of
Directors and employees, and advanced dividends.
The Company’s articles of association accept the principle of distribution of the first
dividend based on the ratio and amount decided by the CMB.
The Board of Directors proposes to the General Meeting how much profit should be
distributed based on the principle of maintaining a balance between company
profitability, shareholder expectations, and growth strategies.
Dividend payments (cash or bonus shares) are to be made as soon as possible
within the legal time limit.
7. Transfer of Shares:
The Company’s articles of association do not include any provision restricting share
transfers.
PART II – PUBLIC DISCLOSURE AND TRANSPARENCY
8. Company Information Policy:
The Company’s principle is to present all non-confidential information whenever
requested and as soon as possible. The Finance Department provides written or oral
responses to all requests from shareholders, media or potential investors.
9. Disclosure of Special Cases:
In 2009, the Company made 21 special event disclosures to the PDP (Public
Disclosure Platform) and the Istanbul Stock Exchange and CMB. Neither institution
requested further information. Since the Company’s stocks are not traded in
international markets, the disclosures were timely and the CMB did not issue
warnings.
10. Company Website and Content:
The Company has a website with general information for customers and business
partners, www.vitra.com.tr. Information for investors is available on the Investor
Relations page of Eczacıbaşı Holding’s web site, www.eczacibasi.com.tr.
8
11. Statement of Final and Real Person Shareholder/Shareholders:
The Company is a member of the Eczacıbaşı Group and no study has been done on
this subject.
12. Public Disclosure of Potential Insiders:
The Company has disclosed this list to the CMB but not to the public. The list
includes management, the board of auditors and other boards established according
to CMB requirements as listed in the annual report.
PART III – STAKEHOLDERS
13. Informing Stakeholders:
Stakeholders are informed through general meetings, supplier and customer
meetings, strategic planning meetings, general manager meetings and departmental
meetings. (Targets, changes in wages, social benefits, travel allowances and
satisfaction surveys are reviewed in these meetings.) The Company shares
information with customers and suppliers in every area and undertakes joint efforts to
develop processes. Strategic meetings with employees are held once a year; general
manager meetings are held at least four times a year. Meetings to evaluate
customers and suppliers are held at least once a year and related sales and
marketing departments make customer visits.
14. Contribution of Stakeholders in Management:
Stakeholders contribute to management through strategic planning meetings for
employees, general meetings for shareholders, supplier meetings, customer
meetings and customer visits.
15. Human Resources Policy:
Relations with employees are managed by the Human Resources Department. Our
human resources policy aims to:
-Establish an organizational structure that is flexible and open to change, while
ensuring that human resources are used effectively and productively to achieve the
Company’s strategic goals;
-Continually review and improve the Company’s human resources processes and
systems, and encourage employees to learn so that they might improve their
knowledge, competencies, and behavior, thus enhancing their individual performance
as well as the performances of their teams and the Company;
-Create opportunities for personal and career development that respond to the needs
of the Company and reflect performance evaluation results;
-Attract employees who have the right competencies for their jobs: who are creative,
innovative, participative, open to change, entrepreneurial, energetic and strong
communicators; who want to develop personally and professionally and who are able
to train others; who share our values;
To date, there have been no complaints of discrimination from Company employees.
9
16. Information about Relations with Customers and Suppliers:
Customer satisfaction is evaluated through semi-annual surveys carried out by
wholesalers and retailers in Turkey and international markets. Apart from surveys, the
Company organizes retailer meetings, visits, and trips to the plant. A supplier
satisfaction survey is held once a year on “Suppliers’ Day”.
17. Social Responsibility:
The Company supports many social, cultural and sports activities, in line with the
principles of the Eczacıbaşı Group. There are no legal claims on the Company
related to environmental pollution.
PART IV – BOARD OF DIRECTORS
18. Structure and Composition of Board of Directors and Independent
Members:
The Board of Directors consists of 7 members, one of which is an executive officer.
Bülent Eczacıbaşı
Erdal Karamercan
Haluk Bayraktar
Hüsamettin Onanç
Mustafa Sacit Basmacı
Atalay Muharrem Gümrah
Ahmet Tahsin Yamaner
Chairman
Vice Chairman
Member-General Manager
Member
Member
Member
Member
The Board does not have any independent members. The Company’s view is that
independent members are not needed since the Board is careful to listen to the views
of shareholders and outsources consultancy services when required.
19. Qualifications of Board Members:
The structure of the Board of Directors is in accordance with Articles 3.1.1, 3.1.2 and
3.1.5 of the CMB’s Corporate Governance Principles. Related procedures, however,
are not included in the Company’s articles of association.
20. Mission, Vision and Strategic Targets of the Company:
The Board of Directors’ vision for EYAP in 2009 was to “make VitrA an internationally
recognized brand offering complete bathroom solutions”. Its 2009 strategic targets, in
line with the Eczacıbaşı Group’s three-year strategic plan for the Building Products
Division, were to defend its market leadership in Turkey, expand international sales of
branded products, reinforce its financial structure and improve its profitability. The
Board of Directors reviews these targets at monthly meetings.
21. Risk Management and Internal Control Mechanism:
The Company receives support on every issue from the Audit Committee, which
comprises two members of the Board of Directors, as well as from the Financial
Coordination Unit of Eczacıbaşı Holding and the Company’s independent auditor.
10
22. Authorization and Duties of Board Members and Directors:
These are clearly defined in the articles of association.
23. Operating Principles of the Board of Directors:
The Chairman assigns the General Manager the duty of preparing the agenda of
Board meetings. Over the year, the Board held 27 meetings that were attended by a
majority of the members. Invitations were made by phone or e-mail. The office of the
Vice President of the Building Products Division is responsible for organizing
meetings and distributing related information
No member opposed the Board’s resolutions during the year. All Board members
have attended meetings on the subjects listed in Part IV, Article 2.17.4 of the CMB’s
Corporate Governance Principles.
None of the members have special voting or veto rights.
24. Prohibition on Transactions with the Company and Competition:
In line with the general principles of the Eczacibasi Group, no member of the Board of
Directors can make a transaction with the Company.
25. Ethical Rules:
The Company abides by the ethical rules of the Eczacıbaşı Group. These are
distributed to all employees in written format but are not disclosed to the public.
26. Number, Structure and Independence of Committees established by the
Board of Directors:
The Board only has one Corporate Governance committee, the Audit Committee. The
reason for this is that the Company outsources consultancy services when needed.
27. Financial Benefits provided to the Board of Directors:
In accordance with the decisions of the general assembly, members of the Board of
Directors do not receive wages, make financial transactions with the Company, nor
receive performance awards. In 2009, no member of the Board of Directors received
guarantees, credit or loans from the Company.
11
ECZACIBAŞI YAPI GEREÇLERİ SANAYİ VE TİCARET A.Ş.
CONVENIENCE TRANSLATION INTO ENGLISH OF
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2009
TOGETHER WITH INDEPENDENT AUDITOR’S REPORT
12
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
a member of
PricewaterhouseCoopers
BJK Plaza, Süleyman Seba Caddesi
No:48 B Blok Kat 9 Akaretler
Beşiktaş 34357 İstanbul-Turkey
www.pwc.com/tr
Telephone +90 (212) 326 6060
Facsimile +90 (212) 326 6050
CONVENIENCE TRANSLATION INTO ENGLISH OF
INDEPENDENT AUDITOR’S REPORT
ORIGINALLY ISSUED IN TURKISH
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of
Eczacıbaşı Yapı Gereçleri Sanayi ve Ticaret A.Ş.
1.
We have audited the accompanying consolidated financial statements of Eczacıbaşı
Yapı Gereçleri Sanayi ve Ticaret A.Ş. and its subsidiaries (the “Group”) which
comprise the consolidated balance sheet as of 31 December 2009 and the
consolidated statement of income, consolidated statement of changes in
shareholders’ equity and the consolidated statement of cash flows for the year then
ended and a summary of significant accounting policies and other explanatory
notes.
Management’s Responsibility for the Financial Statements
2.
The Group management is responsible for the preparation and fair presentation of
these consolidated financial statements in accordance with the financial reporting
standards issued by the Capital Markets Board (“CMB”). This responsibility includes,
designing, implementing and maintaining internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error, selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditor’s Responsibility
3.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit. We conducted our audit in accordance with the
auditing standards issued by the CMB. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the consolidated financial statements are free from material
misstatement.
13
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the consolidated financial statements. The procedures selected
depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained in sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
4.
In our opinion, the accompanying consolidated financial statements present fairly, in
all material respects, the consolidated financial position of Eczacıbaşı Yapı Gereçleri
Sanayi ve Ticaret A.Ş. as of 31 December 2009, and of its consolidated financial
performance and its consolidated cash flows for the year then ended in accordance
with the financial reporting standards issued by the CMB (Note 2).
Additional paragraph for convenience translation into English
5.
The accounting principles described in Note 2 to the consolidated financial
statements differ from International Financial Reporting Standards (“IFRS”) issued
by the International Accounting Standards Board with respect to the application of
inflation accounting for the period between 1 January - 31 December 2005.
Accordingly, the accompanying consolidated financial statements are not intended
to present the consolidated financial position and results of operations of the Group
in accordance with IFRS.
Başaran Nas Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
a member of
PricewaterhouseCoopers
Originally issued and signed in Turkish
Coşkun Şen, SMMM
Partner
Istanbul, 15 March 2010
14
FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2009
CONTENTS
PAGE
CONSOLIDATED BALANCE SHEETS ...................................................................................
1-2
CONSOLIDATED STATEMENTS OF INCOME ....................................................................
3
CONSOLIDATED COMPREHENSIVE STATEMENTS OF INCOME ...............................
4
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ...........................................
5
CONSOLIDATED STATEMENTS OF CASH FLOW ............................................................
6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ...................................... 7-67
NOTE 1
NOTE 2
NOTE 3
NOTE 4
NOTE 5
NOTE 6
NOTE 7
NOTE 8
NOTE 9
NOTE 10
NOTE 11
NOTE 12
NOTE 13
NOTE 14
NOTE 15
NOTE 16
NOTE 17
NOTE 18
NOTE 19
NOTE 20
NOTE 21
NOTE 22
NOTE 23
NOTE 24
NOTE 25
NOTE 26
NOTE 27
NOTE 28
NOTE 29
ORGANISATION AND NATURE OF OPERATIONS .........................................................................
BASIS OF PRESENTATION OF FINANCIAL STATEMENTS ..........................................................
BUSINESS COMBINATIONS ...............................................................................................................
SEGMENT REPORTING .......................................................................................................................
CASH AND CASH EQUIVALENTS .....................................................................................................
FINANCIAL INVESTMENTS ...............................................................................................................
FINANCIAL LIABILITIES ....................................................................................................................
TRADE RECEIVABLES AND PAYABLES .........................................................................................
OTHER RECEIVABLES AND PAYABLES .........................................................................................
INVENTORIES .......................................................................................................................................
PROPERTY, PLANT AND EQUIPMENT .............................................................................................
INTANGIBLE ASSETS ..........................................................................................................................
GOODWILL ............................................................................................................................................
GOVERNMENT GRANTS.....................................................................................................................
PROVISIONS, CONTINGENT ASSETS AND LIABILITIES ..............................................................
EMPLOYEE BENEFITS ........................................................................................................................
OTHER ASSETS AND LIABILITIES ...................................................................................................
EQUITY ..................................................................................................................................................
REVENUE AND COST OF SALES .......................................................................................................
EXPENSES BY NATURE ......................................................................................................................
OTHER OPERATING INCOME/EXPENSES .......................................................................................
FINANCIAL INCOME ...........................................................................................................................
FINANCIAL EXPENSES .......................................................................................................................
TAX ASSETS AND LIABILITIES ........................................................................................................
EARNINGS PER SHARE .......................................................................................................................
TRANSACTIONS AND BALANCES WITH RELATED PARTIES ....................................................
FINANCIAL RISK MANAGEMENT ....................................................................................................
FINANCIAL INSTRUMENTS................................................................................................................
EVENTS AFTER THE BALANCE SHEET DATE ................................................................................
15
7-8
8-23
24-26
27-30
30
31
32-33
33-34
34
35
36-37
38-39
40
40
40-41
41-42
43
44-46
47
47-48
48
49
49
49-53
54
54-57
58-66
66-67
67
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED
CONSOLIDATED BALANCE SHEETS
AT 31 DECEMBER 2009 AND 2008
(Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.)
Notes
2009
2008
ASSETS
Current assets:
Cash and cash equivalents
Trade receivables
Due from related parties
Other receivables
Inventories
Other current assets
5
8
26
9
10
17
25,012,485
14,924,793
92,234,000
7,053,485
57,576,479
5,345,162
38,533,767
10,428,148
76,200,736
5,258,738
66,645,278
4,101,561
202,146,404
201,168,228
73,154
4,370,041
188,019,654
87,112,324
32,183,470
1,543,331
1,239,840
51,320
4,370,041
196,495,039
88,569,557
32,183,470
238,182
1,309,049
Total non-current assets
314,541,814
323,216,658
Total assets
516,688,218
524,384,886
Total current assets
Non-current assets:
Other receivables
Financial investments
Property, plant and equipment
Intangible assets
Goodwill
Deferred income tax assets
Other non-current assets
9
6
11
12
13
24
17
The accompanying notes form an integral part of these consolidated financial statements.
16
CONSOLIDATED BALANCE SHEETS
AT 31 DECEMBER 2009 AND 2008
Notes
2009
2008
LIABILITIES
Current liabilities:
Financial liabilities
Trade payables
Due to related parties
Other payables
Current income tax liabilities
Provisions
Other current liabilities
7
8
26
9
24
15
17
138,743,127
63,690,390
4,386,279
7,741,732
1,344,227
11,588,399
11,305,124
203,411,204
42,619,839
8,921,150
4,814,753
131,972
11,950,799
14,929,906
238,799,278
286,779,623
130,745,175
17,012,611
25,920,547
163,319
80,913,688
15,211,123
27,844,457
1,333,290
Total non-current liabilities
173,841,652
125,302,558
Total liabilities
412,640,930
412,082,181
18
18
98,654,349
112,830,900
102,262,544
100,000,000
18
18
18
18
18
18
4,555,100
2,058,373
10,542,660
(14,441,272)
(16,891,412)
5,392,939
1,303,016
9,777,150
76,603,199
(85,420,821)
10,040,161
Total equity
104,047,288
112,302,705
Total liabilities and equity
516,688,218
524,384,886
Total current liabilities
Non-current liabilities:
Provisions for employee benefits
Deferred income tax liabilities
Provisions
7
16
24
15
EQUITY
Attributable to equity holders of the parent
Share capital
Additional contribution to shareholders’ equity
related to merger
Restricted reserves
Translation reserve
Retained earnings
Net loss for the period
Minority interests
Commitments, contingent assets and liabilities
15
17
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008
Notes
Revenue
Cost of sales (-)
4, 19
4, 20
GROSS PROFIT
Marketing, selling and distribution expenses (-)
General administrative expenses (-)
Research and development expenses (-)
Other operating income
Other operating expense (-)
20
20
20
21
21
OPERATING PROFIT / (LOSS)
Financial income
Financial expense (-)
22
23
LOSS BEFORE TAX
Income tax expense
- Taxes on income
- Deferred income tax income/(expense)
24
NET LOSS
2009
2008
484,690,909
(303,141,012)
382,207,691
(252,986,750)
181,549,897
129,220,941
(114,451,400)
(56,828,824)
(6,936,967)
2,953,945
(2,592,664)
(86,979,660)
(66,544,558)
(5,105,264)
2,551,682
(1,615,132)
3,693,987
(28,471,991)
42,376,785
(58,930,419)
36,036,131
(89,845,366)
(12,859,647)
(82,281,226)
(6,545,235)
2,849,489
(800,336)
(2,328,892)
(16,555,393)
(85,410,454)
(16,891,412)
336,019
(85,420,821)
10,367
(16,555,393)
(85,410,454)
Net loss attributable to:
- Equity holders of the parent
- Minority interests
Losses per 1,000 shares (Kr)
25
(0.78)
18
(14.61)
CONSOLIDATED COMPREHENSIVE STATEMENTS OF INCOME
2009
NET LOSS
2008
(16,555,393)(85,410,454)
Other comprehensive income:
Translation reserve
868,616
10,808,257
Other comprehensive income
868,616
TOTAL COMPREHENSIVE LOSS
(15,686,777)
(74,602,197)
(16,125,902)
439,125
(75,643,671)
1,041,474
(15,686,777)
(74,602,197)
10,808,257
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO:
- Equity holders of the parent
- Minority interests
19
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share
capital
Additional equity
contribution due
to legal merge
Restricted
reserves
Translation
reserve
Retained
earnings
Net loss
for the period
Equity attributable
to equity holders
of the parent
Minority
interests
Balances at 1 January 2008
56,250,000
-
1,303,016
-
119,070,775
(42,567,115)
134,056,676
Capital increase
Transfers
Business combinations (Note 3)
Effect of change in the
effective rate of subsidiary (Note 2)
Total comprehensive expense
43,750,000
-
-
-
-
(42,567,115)
-
42,567,115
-
43,750,000
-
-
-
9,777,150
99,539
-
(85,420,821)
99,539
(75,643,671)
-
9,346,793
(348,106)
1,041,474
Total
equity
134,056,676
43,750,000
9,346,793
(248,567)
(74,602,197)
Balances at 31 December 2008
100,000,000
-
1,303,016
9,777,150
76,603,199
(85,420,821)
102,262,544
10,040,161
112,302,705
Balances at 1 January 2009
100,000,000
-
1,303,016
9,777,150
76,603,199
(85,420,821)
102,262,544
10,040,161
112,302,705
-
-
-
(85,420,821)
-
85,420,821
-
755,357
-
(3,166,518)
-
-
765,510
(2,457,132)
-
(16,891,412)
(2,457,132)
(16,125,902)
4,555,100
2,058,373
(14,441,272)
(16,891,412)
98,654,349
Transfers
Dividend paid
Business combinations (Note 3)
Additional equity contribution
Due to acquisition (Note 3)
Effect of change in the
effective rate of subsidiary (Note 2)
Total comprehensive expense
Balances at 31 December 2009
12,830,900
112,830,900
4,555,100
10,542,660
-
20
14,974,839
(828,300)
(133,680)
(4,124,367)
439,125
5,392,939
(828,300)
(133,680)
14,974,839
(6,581,499)
(15,686,777)
104,047,288
CONVENIENCE TRANSLATION INTO ENGLISH OF ONSOLIDATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Notes
2009
2008
Operating activities:
Net loss attributable to equity holders of the parent
(16,891,412)
Adjustments to reconcile net loss
to net cash generated from /(used in) operating activities:
Minority interests
Depreciation
Amortisation
Impairment on financial investments
Provision for employment termination benefits
Provision for doubtful receivables
Provision for unused vacation pay liability
Provision for lawsuits
Accrual for forward foreign exchange contracts
Provision for warranty expenses
Expense accruals
Tax expense
Deferred income tax (expense)/income
Provision for impairment of inventory
Interest expense
Interest income
Expenses due to business acquisition
Gain on sale of property, plant and equipment-net
11
12
6
15
15
17
15
24
24
10
23
22
3
Cash flows generated from/(used in) operating activities
before changes in operating assets and liabilities
336,019
31,184,693
9,270,953
5,410,122
3,003,205
2,238,621
475,942
776,434
576,989
6,545,235
(2,849,489)
720,921
19,258,576
(1,699,217)
447,354
(158,839)
58,646,107
Changes in assets and liabilities:
Trade receivables
Due from related parties
Inventories
Other receivables
Trade payables
Other payables
Other liabilities
Income taxes paid
Employment termination benefits paid
Utilised provision for lawsuit expenses
Annual vacation paid or used
Utilised provision for warranty expenses
Premiums paid
16
Net cash generated from/(used in) operating activities
(5,886,705)
(8,488,513)
11,756,865
(1,812,585)
(427,553)
203,558
14,282,325
(5,631,640)
2,534,552
(3,122,982)
(5,332,980)
(3,621,219)
(2,017,028)
(3,050,636)
(987,449)
(1,196,116)
45,848,001
Cash flows from investing activities:
Cash outflow on acquisition of subsidiary
Purchases of property, plant and equipment
Purchase of intangible assets
Purchase of financial investments
Proceeds from sale of property, plant and equipment
Interest received
Cash outflow on additional share purchase of subsidiary
Cash inflow on business acquisition
3
11
12
(85,420,821)
10,367
29,656,633
5,720,930
652,522
8,122,016
1,953,680
373,544
1,666,385
1,437,194
294,398
7,704,046
800,336
2,328,892
1,766,582
14,254,609
(710,619)
(214,972)
(9,604,278)
17,195,782
3,543,452
5,706,390
194,180
1,010,355
(335,467)
9,256,904
737,373
308,470
(17,275,999)
(2,571,289)
(9,355,564)
(1,056,025)
(2,880,082)
(5,125,798)
(282,312)
(13,940,217)
(4,224,462)
497,695
1,699,217
(6,581,499)
2,681,271
(118,644,826)
(20,138,883)
(2,053,694)
(377,363)
468,676
710,619
(248,567)
-
Net cash used in investing activities
(20,150,307)
(140,284,038)
Cash flows from financing activities:
Share capital increase
Increase in bank borrowings, net
Interest paid
Dividend paid
(16,918,309)
(21,395,549)
(828,300)
43,750,000
148,582,283
(10,512,973)
-
Net cash (used in)/ generated from financing activities
(39,142,158)
181,819,310
Currency translation differences
(76,818)
(1,218,439)
Net increase in cash and cash equivalents
(13,521,282)
35,191,035
Cash and cash equivalents at the beginning of the period
5
38,533,767
3,342,732
Cash and cash equivalents at the end of the period
5
25,012,485
38,533,767
21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2009
NOTE 1 - ORGANISATION AND NATURE OF OPERATIONS
Eczacıbaşı Yapı Gereçleri Sanayi and Ticaret A.Ş. (“EYAP” or the “Company”) is a manufacturing
company involved in the production of a wide range of ceramic sanitary ware units and complementary
products for bathrooms, acyrylic bathtubs and shower cabins, and sanitary fittings and bathroom
accessories under the Vitra and Artema brand names. The Company manufactures ceramic sanitary
ware, faucets and complementary products for bathrooms in the Bozüyük-Bilecik factory, and bathroom
furniture in the Kartal-İstanbul factory. EYAP is a member of the Eczacıbaşı Group of companies, one of
the oldest and most prominent industrial groups in Turkey.
At the Board of Directors meeting of the Company held on 30 January 2009, the decision was taken to
merge Vitra Küvet San. ve Tic. A.Ş., another Eczacıbaşı Group company, into EYAP by taking over the
whole of its assets and liabilities as of 31 December 2008 in line with Turkish Law No:451 and
Corporate Tax Law No:18-20 and based on the balance sheets prepared in accordance with CMB
regulations at 31 December 2008. The aforementioned legal merger was approved at the Extraordinary
General Assembly meeting of the Company on 29 June 2009 and realized on 30 June 2009. At the
aforementioned meeting at 30 June, it was decided to increase the share capital of the Company from
TL100,000,000 to TL112,830,900 and to give the increased capital of TL12,830,900 to the shareholders
of the dissoluted company; Vitra Küvet, in return for 1,283,090,000 nominal EYAP shares with 1Kr par
value.
Vitra Küvet produces acrylic bathtubs and shower cabins.
EYAP is registered with the Capital Markets Board (“CMB”) and its shares have been quoted on the
Istanbul Stock Exchange (“ISE”) since 15 June 1995. As of 31 December 2009, 16.70% (2008: 18.84%)
of the Company's shares were held by the public (Note 18). After the share purchases made by
Eczacıbaşı Holding A.Ş. and Eczacıbaşı Yatırım Holding A.Ş. from the ISE, the publicly held share
dropped to 9.95% of the Company’s total shares (2008: 18.84%).
The address of the registered office is as follows:
Kanyon Ofis Büyükdere Cad.
No: 185 Kat: 20-21
Levent-İstanbul
Subsidiaries:
The subsidiaries consolidated in these consolidated financial statements as of 31 December 2009 and the
nature of their businesses are as follows:
Country
Nature
Subsidiaries
of incorporation
of business
Burgbad Aktiengesellschaft (“Burgbad”)
Burgkama GmbH
Burgbad Produktions GmbH
Miral Gmbh
KAMA Bad Verwaltungs GmbH
Société d’Equipement Postformé (S.E.P.)
S.C.I. Convention
Burg Nederland
Burg North America Inc.
Burg Belux BVBA
Germany
Germany
Germany
Germany
Germany
France
France
Netherlands
U.S.A.
Belgium
22
Bathroom accessories
NOTE 1 - ORGANISATION AND NATURE OF OPERATIONS (Continued)
These consolidated financial statements were approved for issue by Haluk Bayraktar and Hüsamettin
Onanç in the name of the Board of Directors on 15 March 2010. The owners of EYAP have the power
to amend the consolidated financial statements after their issue in the General Assembly meeting of
EYAP.
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
2.1
Basis of presentation
A)
Financial Reporting Standards
The Capital Markets Board of Turkey (“CMB”) regulates the principles and procedures of preparation,
presentation and announcement of financial statements prepared by the entities with the Communiqué
No: XI-29, “Principles of Financial Reporting in Capital Markets” (“the Communiqué”). This
Communiqué is effective for the annual periods starting from 1 January 2008 and supersedes the
Communiqué No: XI-25 “The Financial Reporting Standards in the Capital Markets”. According to
the Communiqué, entities shall prepare their financial statements in accordance with International
Financial Reporting Standards (“IAS/IFRS”) endorsed by the European Union. Until the differences
between the IAS/IFRS as endorsed by the European Union and the ones issued by the International
Accounting Standards Board (“IASB”) are announced by Turkish Accounting Standards Board
(“TASB”), IAS/IFRS issued by the IASB shall be applied. Accordingly, Turkish Accounting
Standards/Turkish Financial Reporting Standards (“TAS/TFRS”) issued by the TASB which are in
line with the aforementioned standards shall be considered.
With the decision taken on 17 March 2005, the CMB has announced that, effective from 1 January
2005, for companies operating in Turkey and preparing their financial statements in accordance with
CMB Financial Reporting Standards the application of inflation accounting is no longer required.
Accordingly, the Group did not apply IAS 29 “Financial Reporting in Hyperinflationary Economies”
issued by IASB in its financial statements for the accounting periods starting 1 January 2005.
As the differences between the IAS/IFRS endorsed by the European Union and the ones issued by the
IASB have not been announced by TASB as of the date of preparation of these consolidated financial
statements, the consolidated financial statements have been prepared within the framework of
Communiqué XI, No: 29 and related promulgations to this Communiqué as issued by the CMB in
accordance with the accounting and reporting principles accepted by the CMB (“CMB Financial
Reporting Standards”) which are based on IAS/IFRS. The consolidated financial statements and the
related notes to them are presented in accordance with the formats required by the CMB including the
compulsory disclosures. As per CMB’s Communiqué Serial XI, No:29 and its announcements
clarifying this communiqué enterprises are obliged to present the hedging rate of their total foreign
exchange liability and total export and import amounts in the notes to the financial statements.
Accordingly, required reclassifications have been made in the comparative financial statements
(Note 2.4).
All consolidated financial statements are prepared in Turkish Lira (“TL”) based on the historical cost
convention except for the financial assets and liabilities which are expressed with their fair values.
23
NOTE 2 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (Continued)
2.1
Basis of presentation (Continued)
Amendments in International Financial Reporting Standards
(a)
Standards, amendment and interpretations effective in 2009 and relevant to the Group
The Group has adopted the following new and amended IFRS as of 1 January 2009;
-
IAS 1 (Revised), “Presentation of financial statements” (effective from 1 January 2009): The
revised standard prohibits the presentation of items of income and expenses (that is, “non-owner
changes in equity”) in the statement of changes in equity, requiring “non-owner changes in
equity” to be presented separately from owner changes in equity in a statement of
comprehensive income. All non-owner changes in equity are required to be shown in a
performance statement, but entities can choose whether to present one performance statement
(the statement of comprehensive income) or two statements (the income statement and
statement of comprehensive income). Where entities restate or reclassify comparative
information, they are required to present a restated balance sheet as at the beginning
comparative period in addition to the current requirement to present balance sheets at the end of
the current period and comparative period. The Company has decided to present two statements
and disclose other comprehensive income in the statement of comprehensive income
-
IFRS 8 has been effective as a replacement to “Operating Segments”- IFRS 8, IAS 14 “Segment
reporting” Standard. The new Standard necessitates a “Corporate Approach” in order to make
segment reporting and the information used in internal reporting consistent with each other. The
Group began applying IFRS 8 on 1 January 2009.
-
IFRS 7 (Amendment), “Financial instruments - Disclosures” (effective 1 January 2009): The
amendment requires enhanced disclosures about fair value measurement and liquidity risk. In
particular, the amendment requires disclosure of fair value measurements by level of a fair value
measurement hierarchy. As the change in accounting policy only results in additional
disclosures, there is no impact on prior year decisions.
-
IAS 23 (Amendment), “Borrowing costs”: The Standard was amended by IASB on 29 March
2007. Revised IAS 23 is applicable from 1 January 2009 on, with early application permitted.
The Group has voluntarily applied the accounting policy about borrowing costs in IAS 23 since
1 January 2007. The financial costs arising from borrowings are added on the purchasing or
building cost of a qualifying asset in cases where the borrowing cost is related to the purchase or
building of the qualifying asset. Other borrowing costs are disclosed in the statement of income
of the related period.
24
2.1
(b)
Standards, amendments and interpretations, effective in 2009 but not relevant to the Group’s
consolidated financial statements
•
•
•
•
•
•
•
(c)
Effective on 1 July 2009 or effective in the annual reporting period that beginning after this
date:
•
•
•
•
•
•
B)
IAS 32, “Financial instruments: Presentation” and IAS 1 (Amendment), “Presentation of
financial statements” - Puttable financial instruments and obligations arising on
liquidation
IAS 39 (Amendment), “Financial instruments: Recognition and measurement”
IFRS 2 (Amendment) “Share-based payment”
IFRS 1 (Amendment), “First time adoption of IFRS”
IFRIC 13, “Customer Loyalty Programmes”
IFRIC 15, “Agreements for the construction of the real estates”
IFRIC 16, “Hedges of a net investment in a foreign operation”
IFRS 3, “Business combinations”
IAS 27, “Consolidated and Separate Financial Statements”
IAS 28, “Investments in associates”
UMS 31 “Interests in joint ventures” (Amendment),
IFRIC 17, “Distributions of Non-Cash Assets to Owners”
UFRYK 18, “Transfer of assets from customers”
Translation of Financial Statements of Foreign Subsidiaries
Financial statements of subsidiaries operating in foreign countries are prepared according to the
legislation of the country in which they operate and adjusted to the CMB Financial Reporting
Standards to reflect the proper presentation and content. Foreign subsidiaries’ assets and liabilities are
translated into TL using the foreign exchange rate at the balance sheet date and income, and expenses
are translated into TL using the average foreign exchange rate. Exchange differences arising from the
retranslation of the opening net assets of foreign undertakings and differences between the average and
balance sheet date rates are included in the “translation reserve” under equity.
C)
Basis of Consolidation
a)
The consolidated financial statements include the accounts of the parent company, Eczacıbaşı
Yapı Gereçleri Sanayi ve Ticaret A.Ş., and its subsidiaries (“Group”) on the basis set out in
sections (b), (c), (d) and (e) below. The financial statements of the companies included in the
scope of consolidation have been prepared as of the date of the consolidated financial statements
and in accordance with CMB Financial Reporting Standards, applying uniform accounting
policies and presentation. The results of subsidiaries are included or excluded from their effective
dates of acquisition or disposal respectively.
25
2.1
b)
Subsidiaries are companies in which the Company has the power to control the financial and
operating policies for the benefit of the Company, either (a) through the power to exercise more
than 50% voting rights relating to shares in the companies or (b) although not having the power to
exercise more than 50% of the voting rights, through the exercise of actual dominant influence
over financial and operating policies.
The table below sets out the subsidiaries and their shareholding structure as of 31 December 2009
and 2008:
Subsidiaries
Direct shareholding
by the Group (%)
2009
2008
Proportion of
effective interest (%)
2009
2008
Burgbad (*)
Burgkama GmbH
Burgbad Produktions GmbH
miral Gmbh
KAMA Bad Verwaltungs GmbH
Société d’Equipement Postformé (S.E.P.)
S.C.I. Convention
Burg Nederland
Burg North America Inc.
Burg Belux BVBA
95.02
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
50.48
95.02
95.02
95.02
95.02
95.02
95.02
95.02
95.02
95.02
47.97
(*)
90.78
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
90.78
90.78
90.78
90.78
90.78
90.78
90.78
90.78
90.78
-
On 2 July 2008 the Group acquired 47.16% of Burgbad shares owned by Ruddies Beteiligungsund Vermögensverwaltungsgesellschaft mbH for EUR33,399,220. The Group acquired another
41.76% on 31 July 2008 and 1.54% on 20 August 2008 for EUR29,577,245 and EUR1,090,323
respectively, in compliance with the call liability arising from the public trading of Burgbad shares
in the Frankfurt and Duesseldorf stock exchanges
The Group acquired another 0.26% of Burgbad shares for EUR98,940 (TL203,252) between dates
7 November 2008 and 31 December 2008. As a result of these purchases, the Company’s effective
shareholding in Burgbad increased to 90.78% as of 31 December 2008. Additionally the Group
acquired 4.24% of Burgbad shares for EUR3,011,341 (TL6,581,499) between 6 March 2009 and
16 October 2009. As a result of these purchases, the Company’s effective shareholding in Burgbad
increased to 95.02% as of 31 December 2009. The difference between the cost of the share
purchase and the carrying amount of the shares acquired from minority interest holders has been
accounted for under retained earnings.
After the aforementioned acquisition of shares, the effective shareholding of Eyap increased to
95.02%, which made EYAP the only controlling shareholder per German Stock Corporation Law.
Consequently EYAP had the right to purchase the minority shares of Burgbad on a price
determined by a court expert. Therefore, on 19 October 2009 the Board of Directors of EYAP
requested Burgbad to summon an Extraordinary General Assembly. In the Extraordinary General
Assembly meeting it was decided, in line with German Stock Corporation Law, to assign a court
expert to determine a purchase price.
The results of Burgbad are included from its effective date of acquisition in the consolidated
financial statements and reported under the “Bathroom furniture” segment.
26
2.1
The balance sheets and statements of income of the subsidiaries are consolidated on a line-by-line
basis and the carrying value of the investment held by EYAP and its subsidiary is eliminated against
the related equity. Intercompany transactions and balances between EYAP and its subsidiaries are
eliminated during the consolidation. The cost of, and the dividends arising from, shares held by EYAP
in its subsidiaries are eliminated from equity and income for the period.
c)
Investments in which the Group has interests below 20%, or over which the Group does not
exercise a significant influence, or which are considered not having a significant impact on the
consolidated financial statements are classified as available for sale. Available for sale
investments that do not have a quoted market price in active markets and whose fair value
cannot be measured reliably are carried at cost less any provision for impairment (Note 6).
d)
The results of subsidiaries are included or excluded from consolidation on the basis of to their
effective dates of acquisition and disposal,
e)
The minority shareholders’ share in the net assets and results for the period for subsidiaries are
separately classified respectively in the consolidated balance sheet and statement of income as
minority interest and income or loss attributable to minority interest.
2.2
Changes in the Accounting Policies and Errors
Significant changes in accounting policies or significant errors are corrected retrospectively by
restating the prior period consolidated financial statements. There are no changes in the accounting
policies as of 31 December 2009 and 2008.
2.3
Changes in the Accounting Estimates
The effect of changes in accounting estimates affecting the current period is recognised in the current
period; the effect of changes in accounting estimates affecting current and future periods is recognised
in the current and future periods. There are no changes in the accounting estimates for the period
1 January - 31 December 2009.
2.4
Convenience translation into English of consolidated financial statements originally issued
in Turkish
The accounting principles for the consolidated financial statements (defined as “CMB Financial
Reporting Standards”) differ from the IFRS issued by the International Accounting Standards Board
with respect to the application of inflation accounting for the period 1 January - 31 December 2005,
measurement principles and disclosure requirements for retirement benefits, and the presentation of
basic financial statements and the notes to them. Accordingly, the accompanying consolidated
financial statements are not intended to present the financial position and results of operations in
accordance with IFRS.
27
2.5
Summary of Significant Accounting Policies
The significant accounting policies applied in the preparation of these consolidated financial statements
are summarized below. These accounting policies are applied on a consistent basis to comparative
balances and results, unless otherwise indicated.
a)
Cash and due from banks are presented on the balance sheet with their acquisition values. Cash and
cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid
investments with insignificant risk of value in exchange and original maturities of 3 months or less,
and marketable securities with original maturities of less than 3 months (Note 5).
b)
Trade receivables and provision for doubtful receivables
Trade receivables that are created by the Group by way of providing goods or services directly to a
debtor are carried at amortised cost using the effective yield method. Short duration receivables with no
stated interest rate are measured at the original invoice amount unless the effect of imputing interest is
significant.
EYAP uses a direct collection system for receivables arising from domestic sales as a form of
guarantee. EYAP carries out its domestic sales via İntema İnşaat ve Tesisat Mlz. Yat. Paz. A.Ş.
(“İntema”); the premiums paid by İntema to dealers that make payments through this system, on the
collection amounts at the time of collection, are charged to EYAP. Premiums amounting to
TL1,208,853 for the period 01 January – 31 December 2009 period (2008: TL1,015,260) have been
accounted for under financial expenses (Note 23).
EYAP uses an advance payment system to minimise collection risk and create funds for itself as a
requirement of its sector. According to this method, the premiums paid by İntema to dealers with a
cash surplus for collections made before the maturity date are charged to EYAP. Premiums amounting
to TL4,488,787 for the 01 January – 31 December 2009 period (2008: TL1,335,108) have been
accounted for under financial expenses (Note 23).
A credit risk provision for trade receivables is established if there is objective evidence that the Group
will not be able to collect all amounts due. The amount of the provision is the difference between the
carrying amount and the recoverable amount. The recoverable amount is the present value of all cash
flows, including amounts recoverable from guarantees and collateral, discounted by the original effective
interest rate of the originated receivables at inception.
If the amount of the impairment subsequently decreases due to an event occurring after the write-down,
the release of the provision is credited to other income (Note 8).
28
2.5
Summary of Significant Accounting Policies (Continued)
c)
Credit finance income/expenses
Credit finance income/expenses represent imputed finance charges on credit sales and purchases. Such
income and expenses are recognised using the effective yield method over the year of credit sales and
purchases, and included under financial income and expenses.
d)
Inventories
Inventories are valued at the lower of cost or net realisable value less costs to sell. Cost of inventories is
comprised of the purchase cost and the cost of bringing inventories into their present location and
condition. Cost is determined by the monthly moving weighted average method. Net realisable value less
costs to sell is the estimated selling price in the ordinary course of business, less the estimated costs
necessary to sell (Note 10).
e)
Property, plant and equipment are carried at the acquisition value less accumulated depreciation and, if
any, impairment (Note 11). Depreciation is provided over the economically useful lives for property,
plant and equipment on a straight-line basis
The depreciation periods for property, plant and equipment, which approximate the economic useful
lives of such assets, are as follows:
Years
Land improvements
Buildings
Machinery and equipment
Motor vehicles
Furniture and fixtures
Special costs
Other tangible assets
5-30
20-50
2-30
2-15
2-15
2-5
2-15
Gains or losses on disposals of property, plant and equipment are determined by comparing proceeds
with their carrying amounts and are included in the related income and expense accounts, as
appropriate.
Where the carrying amount of an asset is greater than its recoverable amount, it is written down
immediately to its recoverable amount. The recoverable amount of an asset is the higher of its fair
value less cost to sell and its value in use. Fair value less cost to sell is the amount obtainable from the
sale of an asset less the costs of disposal. Value in use is the present value of the future cash flows
expected to be derived from an asset.
Expenses for the repair of property, plant and equipment are normally charged against income. They
are, however, capitalised in exceptional cases if they result in an enlargement or substantial
improvement of the respective assets.
29
2.5
f)
Intangible assets
Intangible assets comprise trademarks, order backlogs, customer relationships, production knowhow,
acquired rights and computer software. The value of trademarks, order backlogs, customer
relationships and production knowhow were determined through independent valuations made during
business combinations. Intangible assets are carried at cost less accumulated amortisation. The
amortisation periods for intangible assets, which approximate the useful lives of such assets, are as
follows:
Years
Trademark
Customer relationships
Production knowhow
Computer software and other rights
20
11
11
2-15
Where an indication of impairment exists, the carrying amount of any intangible asset is assessed and
written down immediately to its recoverable amount (Note 12).
g)
Business combinations and goodwill
A business combination is the bringing together of separate entities or businesses into one reporting
entity. Business combinations are accounted for by applying the purchase method in accordance with
IFRS 3.
The cost of a business combination is allocated by recognising the acquiree’s identifiable assets,
liabilities and contingent liabilities at the date of acquisition. Goodwill has been recognised as an asset
and has initially been measured as the excess of the cost of the combination over the fair value of the
acquiree’s assets, liabilities and contingent liabilities. In business combinations, the acquirer
recognises identifiable assets (such as deferred income tax on carry forward losses), intangible assets
(such as trademarks) and/or contingent liabilities which are not included in the acquiree’s financial
statements at their fair values in the consolidated financial statements. The goodwill previously
recognised in the financial statements of the acquiree is not considered as an identifiable asset.
Goodwill recognized as a result of business combinations is not amortised and its carrying value is
tested for impairment annually or more frequently if events or changes in circumstances indicate that it
might be impaired.
If the acquisition cost is lower than the fair value of the identifiable assets, liabilities and contingent
liabilities acquired, the difference is accounted for as income in the related period.
The Group treats transactions with minority interests as transactions with equity owners of the Group.
Accordingly, for purchases from minority interests, the difference between any consideration paid and
the relevant share acquired of the carrying value of net assets of the subsidiary is deducted from
equity. Gains and losses on disposals to minority interests are also recorded in equity.
30
2.5
h)
Available-for-sale financial instruments
Investments intended to be held for an indefinite period of time, which may be sold in response to needs
for liquidity or changes in interest rates, are classified as available-for-sale; these are included in noncurrent assets unless management has the intention of holding the investment for less than 12 months
from the balance sheet date or unless they will need to be sold to raise operating capital, in which case
they are included in current assets. Management determines the appropriate classification of its
investments at the time of the purchase and re-evaluates such designation on a regular basis.
All financial assets are initially recognized at cost, being the fair value of the consideration given and
including acquisition charges associated with the investment. After initial recognition, financial assets
that are classified as available-for-sale are measured at fair value unless fair value cannot be reliably
measured.
Other financial assets in which the Group has an interest below 20%, that do not have a quoted market
price in active markets, and whose fair value cannot be measured reliably are carried at cost, if
applicable, less any provision for impairment. Available-for-sale investments that have a quoted market
price in active markets and whose fair values can be measured reliably are carried at fair value.
In accordance with the revised IAS 39 “Financial Instruments”, unrealised gains and losses arising from
changes in the fair value of financial assets classified as available-for-sale are deferred in the equity until
the financial asset is sold, collected, or otherwise disposed of. When the marketable securities availablefor-sale are derecognized from the consolidated financial statement, the related income and expenses
followed in the fair value reserve of financial assets under equity are transferred to the consolidated
income statement. There is no fair value reserve in the accompanying consolidated financial statements
for the periods presented.
i)
Share capital
Ordinary shares are classified as equity. Dividends payable are recognised as an appropriation of profit in
the period in which they are declared.
In the restatement of shareholders’ equity items, the addition of funds formed due to hyperinflation, such
as the revaluation value increase fund in share capital, is not considered a contribution from
shareholders. Additions of legal reserves and retained earnings to share capital are considered
contributions by shareholders.
In the restatement of shareholders’ equity items added to share capital, the capital increase registry dates
or the payment dates are considered. In the restatement of share premiums, the payment dates are
considered (Note 18).
31
2.5
j)
Taxes on income
Taxes on income for the period comprise current tax and the change in deferred income taxes. Current
year tax liability consists of the taxes calculated over the taxable portion of the current year income by
reference to corporate income tax rates enacted as of the balance sheet date and adjustments provided
for previous years’ income tax liabilities.
Deferred income tax is provided, using the liability method, for all temporary differences arising
between the tax base of assets and liabilities and their carrying values for financial reporting purposes.
Currently enacted tax rates are used to determine deferred income taxes.
Deferred income tax liabilities are recognised for all taxable temporary differences, whereas deferred
income tax assets resulting from deductible temporary differences are recognised to the extent that it is
probable that future taxable profit will be available against which the deductible temporary difference
can be utilised.
Deferred income tax assets and deferred income tax liabilities related to income taxes levied by the
same taxation authority are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities (Note 24). Deferred income tax assets and deferred income tax liabilities
are classified as long term in the consolidated financial statements.
k)
Revenue recognition
Revenues are recognised on an accrual basis at the time deliveries are made, when the amount of
revenue can be measured reliably, and it is probable that the economic benefits associated with the
transaction will flow to the Group at the fair value of considerations received or receivable. The Group
carries out domestic and foreign sales through İntema İnşaat ve Tesisat Mlz.Yat.Paz. A.Ş. and
Eczacıbaşı Dış Ticaret A.Ş. respectively. Revenue from domestic sales is recognized when the goods
are delivered to dealers. Revenue from foreign sales is recognized when the goods are delivered to the
related custom office or port. Net sales represent the invoiced value of goods sold less sales returns
and commission, and exclude sales taxes. When the arrangement effectively constitutes a financing
transaction, the fair value of the consideration is determined by discounting all future receipts using an
imputed rate of interest. The difference between the fair value and the nominal amount of the
consideration is recognized as interest income on a time proportion basis that takes into account the
effective yield on the asset.
Other revenues earned by the Group are recognised on the following bases:
Royalty and rental income - on an accrual basis.
Interest income - on an effective yield basis.
Dividend income - when the Group’s right to receive payment is established.
32
l)
Foreign currency transactions and translations
Transactions in foreign currencies during the period have been translated at the exchange rates
prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies have been translated at the exchange rates prevailing at the balance sheet date. Exchange
gains or losses arising on the settlement and translation of foreign currency items have been included
in the statement of income.
m)
Borrowings and borrowing costs
Borrowings are recognised initially at the proceeds received, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost using the effective yield method; any difference
between proceeds, net of transaction costs, and the redemption value is recognised in the income
statement over the period of the borrowings. Borrowing costs are charged to the income statement
when they are incurred (Note 7).
IAS 23 (Amendment), “Borrowing costs” was amended by IASB at 29 March 2007. The revised IAS
23 is applicable from 1 January 2009 onward, with early application permitted. The Group has
voluntarily applied the accounting policy about borrowing costs in IAS 23 on 1 January 2007. The
financial costs arising from borrowings are added on the purchasing or building cost of a qualifying
asset when the borrowing cost is related with the purchase or building of the qualifying asset.
Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use. Other borrowing costs are disclosed in the statement of income of the related period.
n)
Employee benefits /Provision for employment termination benefits
The provision for employment termination benefits represents the present value of the estimated total
reserve of the future probable obligation of the Group arising from the retirement of employees in
accordance with Turkish Labour Law and calculated by applying actuarial valuation methods
(Note 16).
o)
Provisions, contingent liabilities and contingent assets
The conditions that must be met in order to recognise a provision in the consolidated financial
statements are that the Group has a present legal or constructive obligation as a result of past events,
that it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation, and that a reliable estimate can be made of the amount of the obligation.
Liabilities or assets that arise from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events which are not wholly within the
control of the entity are not recognised as liabilities or assets and should be disclosed as contingent
liabilities or assets (Note 15).
33
2.5
p)
Related parties
The Group is under the control of Eczacıbaşı Holding A.Ş., which owns 70% of the shares. For the
purpose of these consolidated financial statements, shareholders, key management personnel and Board
members, including their families and companies controlled by or affiliated with them as well as
associated companies, are considered and referred to as related parties (Note 26).
r)
Warranties
Warranty expenses are recorded as a result of repair and maintenance expenses for products produced
and sold, authorised services’ labour and material costs for products under the scope of the warranty
terms without any charge to the customers, initial maintenance costs and estimated costs based on
statistical information for possible future warranty services and returns of products with respect to
products sold during the year (Note 15).
s)
Earnings per share
Earnings per share disclosed in the consolidated statement of income are determined by dividing net
profit by the weighted average number of outstanding shares during the period concerned.
In Turkey, companies can increase their share capital through a pro-rata distribution of shares (“Bonus
Shares”) to existing shareholders from retained earnings. For the purpose of earnings per share
computations, such Bonus Share issuances are regarded as issued shares. Accordingly the weighted
average number of shares used in earnings per share computations is derived by giving retrospective
effect to share issuances without consideration. Profit or loss derived from changes in fair values of
derivative financial instruments is recorded as income or expense in the consolidated statement of
income.
t)
Statement of cash flows
Cash flows during the period are classified and reported by operating, investing and financing
activities in the cash flow statements.
Cash flows from operating activities represent the cash flows of the Group generated from operating
activities.
Cash flows related to investing activities represent the cash flows that are used in or provided from the
investing activities of the Group (fixed investments and financial investments).
Cash flows arising from financing activities represent the cash proceeds from the financing activities
of the Group and the repayments of these funds.
Cash and cash equivalents comprise cash on hand and bank deposits and short-term, highly liquid
investments that are readily convertible to known amounts of cash with maturities equal or less than
three months and which are subject to an insignificant risk of change in value (Note 5).
34
2.5
u)
Derivative financial instruments
Derivative financial instruments are initially recognised in the consolidated balance sheet at cost
(including transaction costs) and subsequently measured at their fair value. The derivative financial
statements of the Group consist of forward foreign exchange contracts and commodity swap
agreements. The fair value of over-the-counter forward foreign exchange contracts is determined
based on the comparison of the original forward rate with the forward rate calculated in reference to
the market interest rates of the related currency for the remaining period of the contract, discounted to
31 December 2009. All derivatives are carried as assets when the fair value is positive and as liabilities
when the fair value is negative.
v)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker responsible for allocating
resources and assessing the performance of operating segments has been identified as the steering
committee, which makes strategic decisions.
Management has determined the operating segments based on reports for the steering committee’s
strategic decisions.
Management approaches its business from a product perspective: ceramic sanitary ware, faucets,
bathroom furniture, and bathtubs.
Reportable operating segments derive their revenue primarily from domestic and international
manufacturing and wholesaling. The steering committee assesses the performance of operating
segments based on a measure of Earnings Before Interest, Tax, Depreciation and Amortisation
(“EBITDA”) (Note 4).
y)
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is
a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net
basis, or realise the asset and settle the liability simultaneously.
35
2.6
Critical Accounting Estimates and Assumptions
Preparation of the consolidated financial statements in accordance with CMB Financial Reporting
Standards necessitates the usage of estimates and assumptions that can affect amounts of reported
assets and liabilities as of the balance sheet date, as well as the explanations for contingent assets and
liabilities and income and expenses reported during the accounting period. Although these estimates
and assumptions are based on the best judgment of Group management with regard to existing
conditions and transactions, actual results may differ from these estimates. Estimates are reviewed on
a regular basis and the necessary adjustments and corrections are made; they are included in the
income statement when they accrue. Estimates and assumptions subject to the risk of being corrected
in the registered value of assets and liabilities in the next financial period are stated below:
(a)
Estimated impairment of goodwill
The Group tests annually whether goodwill has been impaired, in accordance with the accounting
policy stated in Note 2.5. The recoverable amount of a cash-generating unit has been determined based
on value-in-use calculations. These value-in-use calculations include discounted after-tax cash flow
projections based on EUR-denominated financial budgets covering a three-year period and approved
by Group management. Cash flows beyond three years are extrapolated. The fair value in EUR is
converted into TL using the related foreign exchange rate on the date of the balance sheet. Therefore,
the value-in use calculations are affected by fluctuations in the foreign exchange market. The discount
rate used in the value-in-use calculations is 8.20%. The discount rates used are before tax and reflect
specific risks relating to the Company. As of 31 December 2009, the Group did not determine any
impairment in the amount of goodwill as a result of the impairment test performed with the
aforementioned assumptions.
The sensitivity analysis below presents the changes in value-in-use when the discount rate used in the
goodwill impairment test changes:
Value-in-use (TL)
Basic discount rate +1
Basic discount rate 0
Basic discount rate -1
250,916,898
282,916,556
323,838,414
36
2.6
Critical Accounting Estimates and Assumptions (Continued)
(b)
Estimated impairment of property, plant and equipment
In accordance with the accounting policy stated in Note 2.5, tangible assets were analysed for
impairment by the Group. The recoverable amount of property, plant, and equipment has been
determined based on value-in-use calculations. These value-in-use calculations include discounted
before-tax cash flow projections based on three-year, TL financial budgets approved by Group
management. The discount rate used in the value-in-use calculations is 12.80%. This rate is before tax
and reflects the company’s specific risks. As of 31 December 2009, the Group did not determine any
impairment in the amount of property, plant, and equipment through an impairment test performed
with the aforementioned assumptions.
The sensitivity analysis below presents the changes in value-in-use when the discount rate used in the
property, plant and equipment impairment test changes:
Value-in-use (TL)
Basic discount rate +1
Basic discount rate 0
Basic discount rate -1
(c)
306,547,419
321,589,346
337,751,236
Net realisable value
Inventories are valued at the lower of cost or net realisable value as described by the accounting policy
in Note 2.5. Net realisable value is the estimated selling price in the ordinary course of business, less
the costs of completion and selling expenses.
(d)
Useful lives of tangible and intangible assets
In accordance with the accounting policy stated in Note 2.5, tangible and intangible assets are stated at
historical cost less depreciation and net of any impairment. Depreciation on tangible assets is
calculated using the straight-line method to allocate their cost or revalued amounts to their residual
values over their estimated useful lives. Useful lives depend on the best estimates of management, and
are reviewed in each financial period and corrected accordingly.
(e)
The Group calculates the provision for impairment of trade receivables to cover the estimated losses
resulting from customers’ inability to make required payments. The estimates used in evaluating the
adequacy of the provision for impairment of trade receivables are based on the aging of the trade
receivable balances and the trend of collection performance. The provision for doubtful trade
receivables is a critical accounting estimate that is formed by past payment performance and the
financial position of customers.
(f)
Provisions
In accordance with the accounting policy stated in Note 2.5, provisions are recognised when the Group
has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and a reliable estimate of the amount can be made.
37
2.7
Going concern
The Group prepares its consolidated financial statements based on the assumption that the Group will
continue as a going concern.
As of 31 December 2009, the Group’s total current liabilities exceeded its total current assets by
TL36,652,874. The operating profit of the Group as of 31 December 2009 was TL3,693,987, while its
loss before tax as of 31 December 2009 was TL12,859,647.
The Group managed to turn an operating loss of TL28,471,991 in 2008 into an operating profit of
TL3,693,987 in 2009 through actions to increase efficiency and profitability, despite the decrease in
sales caused by the continuing effects of the global economical crisis.
In order to reduce the cost of production and increase efficiency, Group management;
Moved the ceramic sanitary ware factory in İstanbul-Kartal to the factory in Bozüyük in 2007 and the
bathroom accessory and concealed cistern plant in Kocaeli-Gebze to the factory in Bozüyük in 2008.
In 2009, Group management also moved the complementary products production facility to Bozüyük.
In 2008, the Group acquired the shares of Burgbad, a premium brand in the European bathroom
furniture market, in order to become a global brand in the bathroom furniture segment (Note 3). In
2009, the Group sought to create synergy in its European sales organizations by taking advantage of
Burgbad’s power and efficiency.
In order to gain a competitive advantage and increase its market share, the Group decided to add
acrylic bathtubs and shower cabins to its product line by merging with Vitra Küvet (Note 4). Through
this merger, the Group aims to create synergy and decrease costs, strengthen its “complete bathroom”
concept, and differentiate itself from competitors in domestic and international markets.
The Group has decided to begin kitchen furniture production, effective from 1 January 2010, utilizing
the kitchen furniture production facilities previously rented to İntema İnşaat ve Tesisat Malzemeleri
Yatırım ve Pazarlama A.Ş. by Vitra Küvet, in order to increase the efficiency of furniture production
(Note 29).
The Group is continuing to implement measures to increase operating efficiency by reviewing
administrative processes and taking measures to increase savings.
Group management believes that the strategy and market developments described above will help
EYAP become more competitive and contribute to improved results.
38
NOTE 3 - BUSINESS COMBINATIONS
31 December 2009
Business combinations:
Burgbad, one of the subsidiaries of EYAP, acquired a 50.48% of Burg Belux BVBA’s shares for
EUR144,000 in November 2009. The portion of the acquisition cost which exceeds the fair values of
identifiable assets, liabilities and contingent liabilities has been added into the consolidated statement
of income since no future benefit is expected from future operations (Note 20). The rest of the shares
of Burg Belux BVBA will be acquired by Burgbad for EUR141,000 in 2010 according to the
agreement signed, and a provision for such additional amount has been accounted for in the
consolidated statement of income as of 31 December 2009.
The fair value of the acquired identifiable intangible assets and liabilities and the cost of acquisition
are as shown below:
TL
Acquisition cost
Acquired net assets
311,083
136,271
Direct costs relating to the acquisition
447,354
The fair value of assets and liabilities arising from the acquisition are as follows:
Trade receivables
Inventories
Intangible assets
Deferred income tax asset
Other current/non-current assets
Trade payables
28,771
83,703
6,585
455,733
118,232
95,831
23,486
(1,082,292)
Total of net assets
(269,951)
Minority interests
133,680
Net assets acquired
(136,271)
Purchase consideration settled in cash
Acquired cash and cash equivalents
(311,083)
28,771
Cash outflow on acquisition (net)
(282,312)
39
NOTE 3 - BUSINESS COMBINATIONS (Continued)
Legal Merge of Entities Under Common Control:
At the Board of Directors Meeting of EYAP, held on 30 January 2009, it was decided that Vitra Küvet
be merged with EYAP, that the merger be reflected in the balance sheets of the companies dated
31 December 2008, prepared in accordance with the relevant regulations of the CMB, and that all the
assets and liabilities of Vitra Küvet’s balance sheet dated 31 December 2008 be transferred to EYAP
as a whole; the merger was approved at the EYAP Extraordinary General Assembly meeting held on
29 June 2009 and realised on 30 June 2009.
At the EYAP Extraordinary General Assembly meeting held on 29 June 2009, it was decided that the
merger be done via EYAP’s taking over of all the assets and liabilities on the balance sheet of Vitra
Küvet San. ve Tic. A.Ş. dated 31 December 2008, based on file No. 2009/1000 D.İş of the Istanbul 9th
Commercial Court of First Instance, in accordance with Article 451 of the Turkish Commercial Code,
Articles 18 and 20 of the Corporate Tax Law, and provisions of Capital Markets Board Communiqué
Serial I No. 31 on the Principles of Merger Transactions.
The Istanbul Trade Registry announced in Trade Registry Gazette No. 7347, dated 06 July 2009, that
EYAP’s Extraordinary General Assembly Decision dated 29 June 2009 and merger agreement were
registered on 30 June 2009.
The merger transaction was made by taking the merger rate as 0.886282 and the change rate as
0.738001 and according to the equity method stated in the expert report prepared by the experts
assigned based on file No. 2009/1000 D.İş of the Istanbul 9th Commercial Court of First Instance, on
the balance sheets dated 31 December 2008, prepared as per the relevant regulations of the CMB; and
due to the merger, the issued capital of EYAP was increased by TL12,830,900 to TL112,830,900.
Since the merger took place between two companies controlled by Eczacıbaşı Holding A.Ş. as of
30 June 2009 and because EYAP took over all the existing assets and liabilities of Vitra Küvet as a
whole in this merger, EYAP’s balance sheet dated 31 December 2009 was prepared by consolidating
the two companies’ balance sheets, prepared according to CMB Financial Reporting Standards. As the
merger was applied prospectively, the activity results of Vitra Küvet arising after 30 June 2009 have
been included in the consolidated income statement for the year ending 31 December 2009.
Since the difference of TL4,555,100 arising after this merger is not an item relevant to the presentation
of financial statements required by the CMB, it has been indicated as “additional equity contribution
due to legal merge” under the consolidated statements of changes in equity.
40
NOTE 3 - BUSINESS COMBINATIONS (Continued)
31 December 2008
On 2 July 2008 the Group acquired 47.16% of Burgbad shares owned by Ruddies Beteiligungs-und
Vermögensverwaltungsgesellschaft mbH for EUR33,399,220. The Group acquired another 41.76% on
31 July 2008 and 1.54% on 20 August 2008 for EUR29,577,245 and EUR1,090,323 respectively, in
compliance with the call liability arising from the public trading of Burgbad shares in the Frankfurt and
Duesseldorf stock exchanges.
The fair values of identifiable assets, liabilities and contingent liabilities acquired, and the cost of
acquisition are as follows:
TL
Acquisition cost
Direct costs relating to the acquisition
117,384,647
3,426,795
Net assets acquired
120,811,442
(88,627,972)
Goodwill (Note 13)
32,183,470
The fair value of assets and liabilities arising from the acquisition are as follows:
TL
Trade receivables
Other receivables
Inventories
Intangible assets
Other current/non-current assets
Trade payables
Provisions for pensions
Other non-current provisions
Provisions
Other liabilities
Taxes on income
2,166,616
27,542,398
2,558,565
15,376,326
73,627,828
49,433,074
109,848
788,635
(6,654,332)
(6,595,127)
(472,140)
(25,349,055)
(11,494,173)
(1,109,766)
(20,052,441)
(1,901,491)
Total of net assets
97,974,765
Minority interests
(9,346,793)
Net assets acquired
88,627,972
Acquired cash and cash equivalents
(120,811,442)
2,166,616
Cash outflow on acquisition (net)
(118,644,826)
41
NOTE 4 - SEGMENT REPORTING
Ceramic sanitary ware and complementary products are classified as Ceramic Sanitary Ware, faucets,
accessories and reservoirs are classified as Sanitary Fittings, bathroom furniture is classified as
Bathroom Furniture, and acrylic bathtubs are classified as Bathtubs by Group management in order to
make strategic decisions about product groups and track business performance. Management takes
EBITDA into consideration when evaluating the business performance of segments. EBITDA has
been calculated without taking the adjustments and reclassifications for true presentation mentioned in
Note 2.1 into consideration.
Segment reporting presented to the Group management as of 31 December 2009 and 2008 is as
follows:
Ceramic Sanitary
Ware
Gross sales
Less: Discounts
Less: Returns
Net sales
Cost of sales (-)
Gross profit
Marketing, selling and
distribution expenses (-)
General administrative
expenses (-)
Research and development
expenses (-)
Operating (loss)/profit
Sanitary
Fittings
2009
Bathroom
Furniture
Bathtubs
Total
243,350,265
(48,603,855)
(386,178)
168,516,397
(67,780,043)
(1,056,181)
234,535,744
(58,192,750)
(8,209)
27,480,183
(9,718,823)
(44,104)
673,882,589
(184,295,471)
(1,494,672)
194,360,232
99,680,173
176,334,785
17,717,256
488,092,446
(119,637,577)
(61,869,956)
(102,415,956)
(10,687,142)
(294,610,631)
74,722,655
37,810,217
73,918,829
7,030,114
193,481,815
(49,187,749)
(16,082,270)
(47,609,212)
(3,124,006)
(116,003,237)
(23,118,417)
(10,679,645)
(15,575,932)
(2,190,575)
(51,564,569)
(3,297,088)
(880,599)
(907,703)
(3,647,767)
10,140,599
7,085,918
Depreciation and amortisation
15,381,560
1,762,400
14,587,074
EBITDA
14,500,961
11,902,999
21,672,992
42
(46,229)
1,669,304
617,798
2,287,102
(7,898,787)
18,015,222
32,348,832
50,364,054
NOTE 4 - SEGMENT REPORTING (Continued)
Ceramic Sanitary
Ware
Gross sales
Less: Discounts
Less: Returns
Net sales
Cost of sales (-)
Sanitary
Fittings
2008
Bathroom
Furniture
251,390,007 184,342,197
(50,788,471) (71,381,638)
(362,711)
(728,228)
200,238,825
112,232,331
(117,953,201)
(78,116,713)
82,285,624
34,115,618
Gross profit
Marketing, selling and
distribution expenses (-)
General administrative expenses (-)
Research and development expenses (-)
(49,464,955) (17,561,315)
(29,397,235) (14,480,150)
(1,865,474) (937,952)
Operating profit
Total
107,426,232 543,158,436
(26,858,223) (149,028,332)
(43,660)
(1,134,599)
80,524,349
392,995,505
(52,212,477) (248,282,391)
28,311,872
144,713,114
(20,384,039)
(5,593,932)
(1,889,019)
(87,410,309)
(49,471,317)
(4,692,445)
1,557,960
1,136,201
444,882
3,139,043
13,258,150
1,811,800
7,937,404
23,007,354
EBITDA
14,816,110
2,948,001
8,382,286
26,146,397
The reconciliation of EBITDA and loss before tax presented in the consolidated statement of income
is as follows:
2009
EBITDA
Due date difference on term purchases
Utilised/(additional) provision for lawsuit
Due date charges on term sales
Provision for employment termination benefits, net
Other
2008
50,364,054
1,605,976
1,541,086
(40,455,646)
(2,668,611)
(1,448,899)
(3,614,717)
(1,990,537)
26,146,397
4,789,605
(1,666,385)
(35,377,563)
(11,696,883)
(1,380,091)
(8,122,015)
(2,101,606)
3,332,706
(29,408,541)
Other operating income
Other operating expense
2,953,945
(2,592,664)
2,551,682
(1,615,132)
Operating profit/(loss)
3,693,987
(28,471,991)
Financial income
Financial expense
42,376,785
(58,930,419)
36,036,131
(89,845,366)
Loss before tax
(12,859,647)
(82,281,226)
43
Segment assets
2009
2008
Ceramic sanitary ware
Sanitary fittings
Bathroom furniture
Bathtubs
176,598,682
58,503,842
187,753,259
24,435,189
195,949,904
55,702,488
188,149,491
-
Segment assets (*)
447,290,972
439,801,883
Unallocated assets
58,815,845
62,064,685
506,106,817
501,866,568
Total assets
(*)
Segment assets are generally related to segment operations.
The reconciliation of segment assets with the total assets presented in consolidated financial
statements is as follows;
2009
2008
Segment assets
506,106,817
501,866,568
Impairment on property, plant and equipment
Written-off tangible and intangible assets
Impairment on inventory
Impairment on financial assets
Deferred tax assets
Other
21,924,374
(3,830,304)
(2,711,034)
(3,261,972)
(1,695,232)
(1,225,009)
1,164,294
216,284
33,407,960
(3,830,304)
(2,391,361)
(1,374,989)
(2,417,804)
(1,225,009)
349,825
Total assets
516,688,218
524,384,886
Segment liabilities
2009
2008
Ceramic sanitary ware
Sanitary fittings
Bathroom furnitures
Bathtubs
10,422,355
13,246,342
75,875,030
3,065,135
8,891,207
28,981,969
74,707,558
-
Segment liabilities (*)
102,608,862
112,580,734
Unallocated liabilities
293,937,456
279,845,502
Total liabilities
396,546,318
392,426,236
(*)
Segment liabilities generally comprise operating liabilities.
44
The reconciliation of segment liabilities with the total liabilities presented in consolidated financial
statements is as follows;
2009
Segment liabilities
Unrecognized financial expenses
Deferred tax liability
Forward foreign exchange contracts
Premiums paid
Other
Total liabilities
2008
396,546,318
392,426,236
10,596,601
4,101,874
1,756,144
(360,007)
-
9,441,731
4,160,815
3,274,468
(403,280)
301,511
1,437,194
1,196,116
247,390
412,640,930
412,082,181
NOTE 5 - CASH AND CASH EQUIVALENTS
2009
Cash
Banks
- TL demand deposits
- Foreign currency demand deposits
- TL time deposits
- Foreign currency time deposits
2008
32,589
24,905
30,773
16,553,561
7,381,855
1,013,707
70,376
11,382,370
17,292,000
9,764,116
25,012,485
38,533,767
The terms of the time deposits are up to one year as of 31 December 2009 and 2008. The interest rates
applied are 8.50% and 0.25% for TL and EUR time deposits respectively (2008: Interest rates for TL
time deposits are 16.18%. Interest rates for EUR time deposits are 4.79%).
45
NOTE 6 - FINANCIAL INVESTMENTS
2009
Percentage of
shareholding %
Vitra Bathroom Products LLC OOO
Vitra Bath and Tiles JSC
Vitra Bulgaria Ood
Vitra U.S.A. Inc.
Seramik Araştırma Merkezi
Akenerji Elektrik Üretimi ve Otoprodüktör A.Ş.
100
50
50
49
1<
1<
Less: Diminution in value (-)
2008
Percentage of
Amount shareholding %
3,331,687
1,006,138
682,509
572,488
2,000
229
100
50
50
49
1<
1<
Amount
3,331,687
1,006,138
682,509
572,488
2,000
229
5,595,051
5,595,051
(1,225,010)
(1,225,010)
4,370,041
4,370,041
Financial investments are carried at acquisition cost and shareholding percentages are calculated using
nominal values. The financial assets have neither been accounted for using the equity method nor
consolidated line-by-line due to the insignificance of their combined impact on the net profit, financial
position and results of the Group.
The movements of financial assets as of 31 December 2009 and 2008 are below:
2009
1 January
4,370,041
Contribution of capital increase
Diminution in value (Note 21)
-
31 December
4,370,041
46
2008
4,645,200
377,363
(652,522)
4,370,041
NOTE 7 - FINANCIAL LIABILITIES
2009
Weighted average
interest rate p.a.
TL
2008
Weighted average
interest rate p.a.
TL
Short-term bank borrowings
USD borrowings
TL borrowings
EUR borrowings
Interest accrual
5.24
7.90
-
6,926,220
5,266,219
400,849
4.54
5.57
12,593,288
12,105,206
114,464
19,435,273
982,255
32,637,198
Current portion of
long-term bank borrowings
EUR borrowings
USD borrowing
GBP borrowing
TL borrowing
Interest accrual
3.59
5.75
5.90
-
108,860,839
10,625,940
3,583,800
3,079,260
2009
Weighted average
interest rate p.a.
7.30
4.38
5.22
16.50
126,661,971
34,688,608
3,288,600
1,500,000
4,634,827
126,149,839
170,774,006
138,743,127
203,411,204
TL
2008
Weighted average
interest rate p.a.
TL
Long-term bank borrowings
EUR borrowings
USD borrowings
5.12
5.50
100,222,485
30,522,690
6.77
4.29
130,745,175
79,371,908
1,541,780
80,913,688
The redemption schedule of long-term bank borrowings is as follows:
2009
2010
2011
2012
47
2008
130,745,175
80,913,688
-
130,745,175
80,913,688
NOTE 7 - FINANCIAL LIABILITIES (Continued)
The carrying amounts and fair values of bank borrowings are as follows:
Carrying amount
2009
2008
Bank borrowings
Fair value
2009
2008
269,488,302
284,324,892
277,600,362
289,688,936
269,488,302
284,324,892
277,600,362
289,688,936
The fair values are based on cash flows discounted with the weighted average interest rates of 2.17%
(2008: 4.78 %), 2.46% (2008: 4.41%), 1.11% (2008: 5.22%) and 9.67% (2008: 15.33%) per annum for
EUR, USD, GBP and TL borrowings respectively.
NOTE 8 - TRADE RECEIVABLES AND TRADE PAYABLES
Trade receivables
2009
Trade receivables
Notes receivables
Other trade receivables
Less: Provision for doubtful receivables
2008
15,696,029
880,467
1,842,435
11,801,938
785
342,420
18,418,931
12,145,143
(3,494,138)
(1,716,995)
14,924,793
10,428,148
The weighted average term of trade receivables is less than 3 months. The balances are calculated
based on cash flows discounted using weighted average interest rates of 0.89% (2008: 2.83%), 0.44%
(2008: 1.02%), 0.66% (2008: 2.80%) and 0.30% (2008: 0.15%) per annum for EUR, USD, GBP and
TL trade receivables, respectively.
Movement schedules of provision for doubtful receivables as of 31 December 2009 and 2008 are as
follows:
2009
1 January
1,716,995
Current year charge
Disposals and collections
Additions due to business combinations
31 December
48
2008
644,590
1,797,948
(29,806)
9,001
182,934
(215,060)
1,017,167
87,364
3,494,138
1,716,995
NOTE 8 - TRADE RECEIVABLES AND TRADE PAYABLES (Continued)
Trade payables
2009
Trade payables
64,050,398
Less: Unrealised credit finance expense
(360,008)
63,690,390
2008
43,023,119
(403,280)
42,619,839
The weighted average term of trade payables is less than 3 months. The balances are calculated based
on cash flows discounted using weighted average interest rates of 5.10% (2008: 2.37%), 3.07% (2008:
0.35%), 2.81% (2008: 2.40%) and 6.20% (2008: 16.95%) per annum for EUR, USD, GBP and TL
trade payables, respectively.
NOTE 9 - OTHER RECEIVABLES AND PAYABLES
2009
Other Short-Term Receivables
VAT receivable
Prepaid taxes and funds
Receivables from personnel
Other receivables
6,541,844
233,792
166,844
111,005
5,111,173
146,515
1,050
7,053,485
5,258,738
2009
Other Long-Term Receivables
Deposits and guarantees given
Other receivables
49
2008
67,582
5,572
45,748
5,572
73,154
51,320
2009
Other Short-Term payables
Payable to personnel
Social security payable
Taxes and dues payable
Order advances taken
Deposits and guarantees taken
2008
2008
2,851,334
2,440,554
2,356,316
90,970
2,558
972,170
2,222,270
1,620,313
-
7,741,732
4,814,753
NOTE 10 - INVENTORIES
2009
Raw materials and supplies
Semi-finished goods
Finished goods
Trade goods
Less: Provision for impairment on inventories
2008
27,067,878
11,202,162
20,846,642
17,281
25,938,480
9,012,580
33,918,084
-
59,133,963
68,869,144
(1,557,484)
(2,223,866)
57,576,479
66,645,278
The cost of inventories recognised as expense and included in “cost of sales” amounted to
TL153,251,080 (2008: TL127,271,627).
Movement schedules for provision for impairment on inventories are as follows:
2009
1 January
2,223,866
Current year charge
Cancelled provisions
720,921
(1,387,303)
31 December
1,557,484
50
2008
1,812,580
1,766,582
(1,355,296)
2,223,866
NOTE 11 - PROPERTY, PLANT AND EQUIPMENT
1 January
2009
Cost:
Land
Land improvements
Buildings
Motor vehicles
Special costs
Construction in progress
and advances given
Accumulated depreciation:
Land improvements
Buildings
Motor vehicles
Special costs
Net book value
Additions
Additions due
to legal
merge
494,021
10,873,134
10,328,095
81,732
3,243,303
396,355
682,486
Additions due
to business
combinations
2,770,046
9,953,713
592,390,737
13,940,217
26,112,587
118,232
2,200,865
42,780,743
304,808,138
1,233,345
37,987,507
6,107,015
778,085
180,948
3,256,514
23,565,356
65,562
3,271,263
728,973
116,077
421,429
3,703,572
7,662,984
80,808
3,089,528
396,355
539,643
-
(19,754)
(1,854,559)
(494,603)
(3,074,341)
-
-
204,085
231,187
178,885
-
2,803,242
49,925,160
334,413,106
885,112
41,452,842
7,232,343
1,433,805
395,895,698
31,184,693
15,894,319
-
(5,443,257)
-
614,157
438,145,610
196,495,039
(5,782,113)
868,401
2,942,195
-
31 December
2009
6,406
328,123
1,383,125
47,241
2,172,214
30,100
19,295
-
(31,383)
(2,029,102)
(544,242)
(3,177,386)
-
Transfers
1,091,822
3,954,222
100,931,129
423,430,835
1,524,409
49,739,392
8,006,396
942,486
13,461
25,870
92,362
-
Disposals
Currency
translation
differences
(5,574,629)
(1,764,033)
517,996
343,343
265,436
-
1,091,822
4,454,649
113,487,400
436,424,361
1,109,140
52,335,321
8,432,851
1,644,267
22,862
7,185,453
1,149,637
626,165,264
188,019,654
As of 31 December 2009 and 2008, there are no mortgages on property, plant and equipment.
Transfers amounting to TL1,764,033 are related to intangible assets (Note 12).
Depreciation and amortisation expenses of TL30,594,345 have been recorded in “cost of sales”, of TL1,653,098 in “research and development expenses”, of
TL1,780,137 in ‘general administrative expenses’ and of TL6,428,066 in “marketing and selling expenses”.
51
NOTE 11 - PROPERTY, PLANT AND EQUIPMENT (Continued)
1 January
2008
Cost:
Land
Land improvements
Buildings
Motor vehicles
Special costs
Construction in progress
and advances given
Accumulated depreciation:
Land improvements
Buildings
Motor vehicles
Special costs
Net book value
1,093,794
3,356,360
43,871,028
375,801,600
1,838,476
19,934,616
8,079,833
949,595
465,269
Additions
Additions due
to business
combinations
29,746
2,184,212
9,338,774
67,819
1,525,958
37,218
-
29,933,687
10,466,121
8,728,610
-
6,955,156
304,656
455,390,571
20,138,883
49,433,074
2,054,148
19,660,564
257,097,329
1,419,519
17,376,787
5,358,321
673,249
146,717
2,170,184
24,221,646
147,816
2,044,220
819,782
106,268
-
303,639,917
29,656,633
-
151,750,654
Disposals
(1,972)
(232,418)
(649,184)
(381,886)
(428,555)
(110,655)
(7,109)
(1,811,779)
(232,418)
(489,472)
(333,990)
(429,675)
(71,088)
(1,432)
(1,558,075)
Transfers
568,116
485,478
3,215,494
(5,016,212)
Currency
translation
differences
31 December
2008
24,689,142
25,258,030
19,978,763
61,177
1,091,822
3,954,222
100,931,129
423,430,835
1,524,409
49,739,392
8,006,396
942,486
2,770,046
(747,124)
69,987,112
592,390,737
-
21,182,413
23,978,635
18,996,175
-
2,200,865
42,780,743
304,808,138
1,233,345
37,987,507
6,107,015
778,085
-
64,157,223
395,895,698
196,495,039
Transfers amounting to TL747,124 are related to intangible assets (Note 12).
Depreciation and amortisation expenses of TL23,883,447 have been recorded in “cost of sales”, of TL1,146,158 in “research and development expenses”, of
TL3,878,141 in “general administrative expenses” and of TL6,469,817 in “marketing and selling expenses”.
52
NOTE 12 - INTANGIBLE ASSETS
1 January
2009
Cost:
Rights
Order backlog
Computer software
Brand name
Production know-how
Advances given
Accumulated amortisation:
Rights
Order backlog
Computer software
Brand name
Production know-how
Net book value
Additions
Additions due
to legal
merge
Additions due
to business
combinations
Disposals
Transfers
Currency
translation
differences
31 December
2009
32,650,141
813,504
8,561,882
23,790,710
25,873,709
27,162,471
595,191
1,431,636
91,527
2,701,299
772,783
1,488,669
-
455,733
-
(2,196,309)
(817,299)
-
1,764,033
-
186,635
3,795
216,703
235,677
247,416
17,371
35,064,652
10,142,078
24,007,413
26,109,386
27,409,887
3,313,861
119,447,608
4,224,462
2,261,452
455,733
(3,013,608)
1,764,033
907,597
126,047,277
20,665,718
813,504
6,393,328
594,768
1,176,076
1,234,657
2,526,415
705,494
1,195,084
2,363,127
2,480,833
396,609
1,199,097
-
-
(2,196,309)
(817,299)
-
-
145,965
3,795
10,704
21,166
22,221
21,538,398
8,297,919
1,800,556
3,560,369
3,737,711
30,878,051
9,270,953
1,595,706
-
(3,013,608)
-
203,851
38,934,953
88,569,557
87,112,324
53
NOTE 12 - INTANGIBLE ASSETS (Continued)
1 January
2008
Cost:
Rights
Order backlog
Computer software
Brand name
Advances given
Production know-how
Accumulated amortisation:
Rights
Order backlog
Computer software
Brand name
Production know-how
Net book value
Additions
Additions due
to business
combinations
Disposals
Transfers
Currency
translation
differences
31 December
2008
11,191,351
8,180,760
-
1,255,187
381,122
417,385
-
20,446,508
732,298
21,415,862
153,879
23,290,931
24,451,045
(3,082,434)
-
785,125
(38,001)
-
2,054,404
81,206
2,374,848
61,928
2,582,778
2,711,426
32,650,141
813,504
8,561,882
23,790,710
595,191
25,873,709
27,162,471
19,372,111
2,053,694
90,490,523
(3,082,434)
747,124
9,866,590
119,447,608
3,828,493
5,541,569
-
1,454,027
727,476
851,759
531,871
1,051,705
1,104,092
16,862,695
-
(3,082,434)
-
-
1,602,937
86,028
62,897
124,371
130,565
20,665,718
813,504
6,393,328
594,768
1,176,076
1,234,657
9,370,062
5,720,930
16,862,695
(3,082,434)
-
2,006,798
30,878,051
10,002,049
88,569,557
54
NOTE 13 - GOODWILL
Goodwill amounting to TL32,183,470 resulted from the acquisition of shares of Burgbad on 2 July
2008 (Note 3). The Group has not identified any impairment of goodwill based on the test performed
as of 31 December 2009.
NOTE 14 - GOVERNMENT GRANTS
The Group is entitled to the following incentives and rights:
i)
Exemption from customs duty on imported machinery and equipment
ii)
Exemption from customs duty on imported investment goods; exemption from VAT, duties and
charges on investment goods purchased from local suppliers.
NOTE 15 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES
Short-term provisions
2009
Long -term provisions
7,003,760
2,174,126
1,756,144
654,369
7,343,242
1,193,091
3,274,468
139,998
11,588,399
11,950,799
2009
2008
2008
163,319
1,333,290
163,319
1,333,290
Movements of provisions are as follows:
2009
1 January
13,284,089
Charge for unused vacation pay liability
Charge for warranty provision
Additions due to legal merge
Additions due to business combinations
Charge for lawsuits
Charge for employment termination benefits
Paid employment termination benefits
Paid warranty liability
Utilised provision for lawsuit expenses
Paid or used unused vacation pay liability
31 December
55
2008
6,698,769
2,238,621
776,434
528,446
475,942
654,369
(139,998)
(987,449)
(2,017,028)
(3,050,636)
(11,072)
373,544
294,398
4,619,896
1,666,385
139,998
(1,056,025)
547,124
11,751,718
13,284,089
NOTE 15 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES (Continued)
Provisions in the amount of TL1,756,144 (2008: TL3,274,468) were recorded in light of legal
consultations and past experiences of legal, labour, trade and administrative lawsuits against the
Group.
Guarantees received
2009
Guarantee bills received
Letter of guarantees received
Guarantee cheques received
Mortgages received
Guarantees given
6,265,667
2,037,820
1,974,647
159,000
7,060,439
1,706,732
1,321,140
140,000
10,437,134
10,228,311
2009
Letter of guarantees given
2008
5,628,198
2008
6,526,646
NOTE 16 - EMPLOYEE BENEFITS
2009
Provision for employment termination benefit
Provision for pensions
2008
9,942,232
7,070,379
8,120,249
7,090,874
17,012,611
15,211,123
Turkey
Provision for employment termination benefits is allocated in accordance with the disclosures given
below.
Under Turkish Labour Law, the Company is required to pay termination benefits to each employee
who has completed one year of service and whose employment is terminated without due cause, is
called up for military service, dies, or retires after completing 25 years of service (20 years for women)
and achieves the retirement age (58 for women and 60 for men). Since the legislation was changed on
23 May 2002, there are certain transitional provisions relating to length of service prior to retirement.
At 31 December 2009, the amount payable consists of one month’s salary limited to a maximum of
TL2,365 (2008: TL2,173) for each year of service.
The liability is not funded, as there is no funding requirement.
The provision has been calculated by estimating the present value of the future probable obligation of
the Company arising from the retirement of employees.
56
NOTE 16 - EMPLOYEE BENEFITS (Continued)
IAS 19 “Employee Benefits” requires actuarial valuation methods to be developed to estimate the
enterprise’s obligation under defined benefit plans. Accordingly, the following actuarial assumptions
were used in the calculation of the total liability:
Discount rate (%)
Turnover rate to estimate the probability of retirement (%)
2009
2008
5.92
94.00
6.26
97.00
The principal assumption is that maximum liability for each year of service will increase in line with
inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the
anticipated effects of future inflation. As the maximum liability is revised semi-annually, the maximum
amount of TL2,427 (1 January 2009: TL2,260), which is effective from 1 January 2010, has been taken
into consideration in calculating the Company’s provision for employment termination benefits.
Movements in the provision for employment termination benefits during the year are as follows:
1 January
Increase during the year
Actuarial gain
Paid during the year
31 December
2009
2008
8,120,249
4,955,473
462,368
(621,214)
(2,974,644)
9,283,108
8,416,758
(434,740)
(9,144,877)
9,942,232
8,120,249
Germany
Pension provisions have been stated for obligations resulting from pension plan commitments for
retirement, invalidity and dependants payments which guarantee a spesific pension entitlement to
employees of Burgbad. The pension provisions are measured using the projected unit credit method on
the basis of actuarial surveys. The calculation of provisions has been based on the assumed rate of
interest and pension trend which are 5.75% and 2.00% respectively.
The movement schedule of provision for employment retirement benefit plans is as follows:
2009
1 January
7,090,874
Addition due to business combinations
Increase during the year
Payments
421,494
(506,577)
64,588
31 December
7,070,379
57
2008
6,595,129
(210,687)
706,432
7,090,874
NOTE 17 - OTHER ASSETS AND LIABILITIES
2009
2008
Order advances given
Prepaid expenses
Prepaid taxes and funds
Job advances
Income accruals
Advances given to personnel
2,553,178
1,689,797
661,053
58,256
47,407
4,842
330,629
186,788
2,223,137
1,073,725
68,457
1,962
547,492
5,345,162
4,101,561
Prepaid expenses
902,929
336,911
948,119
360,930
1,239,840
1,309,049
4,360,554
2,211,751
761,019
564,430
432,060
92,160
21,320
2,861,830
3,844,398
5,457,791
777,922
235,488
98,704
31,702
1,437,194
690,927
2,355,780
11,305,124
14,929,906
Other liabilities
Accrued salaries and wages
Bonus accrual
Deferred income
Order advances received
Accrual for marketing expenses
Accrual for commission expenses
Accrual for energy expenses
Forward foreign exchange contacts
Accrual for reclaims
Other
58
NOTE 18 - EQUITY
Paid-in capital
The total authorised number of ordinary shares of par value YKr1 each at 31 December 2009 is
11,283,090,000 (2008: 10,000,000,000). There is no preferred stock.
The movement of ordinary shares issued that are fully paid is as follows:
2009
2008
1 January
Issued for legal merge
Issued for cash
10,000,000,000
1,283,090,000
-
5,625,000,000
4,375,000,000
31 December
11,283,090,000
10,000,000,000
The Company’s shareholders and their shareholding percentages as of 31 December 2009 and
2008 are as follows:
2009
İntema İnşaat ve Tesisat Malzemeleri
Yatırım ve Pazarlama A.Ş.
Eczacıbaşı Yatırım Holding
Ortaklığı A.Ş.
İslam Kalkınma Bankası
Kale Seramik A.Ş.
Other
Publicly owned
Total capital
Adjustment to share capital (*)
Total paid-in capital
(*)
Share
(%)
2008
Share
(%)
78,937,180
70
69,562,424
70
6,187,500
5
6,187,500
6
8,455,335
400,604
12,013
809
18,837,459
7
<1
<1
<1
17
5,000,000
400,604
12,013
18,837,459
5
<1
<1
19
112,830,900
100
100,000,000
100
57,797,233
170,628,133
56,796,542
156,796,542
Adjustment to share capital presents the difference between the cash and cash equivalent capital additions
adjusted per inflation and the amount before adjustment has been made.
After the share purchases made by Eczacıbaşı Holding A.Ş. and Eczacıbaşı Yatırım Holding A.Ş. from
the ISE, the shares of Eczacıbaşı Holding A.Ş. and Eczacıbaşı Yatırım Holding A.Ş. have increased to
74.22% and 9.98%, respectively.
59
NOTE 18 - EQUITY (Continued)
Restricted Reserves
As of 31 December 2009, restricted reserves comprise legal reserves amounting to TL2,058,373
(2008: TL1,303,016).
Legal reserves consist of first and second reserves, appropriated in accordance with the Turkish
Commercial Code (“TCC”). The TCC stipulates that the first legal reserve is appropriated out of
statutory profits at the rate of 5% per annum, until the total reserve reaches 20% of the company’s
paid-in share capital. The second legal reserve is appropriated at the rate of 10% per annum of all cash
distributions in excess of 5% of the paid-in share capital. Under the TCC, legal reserves can only be
used to offset losses and are not available for any other usage unless they exceed 50% of paid-in share
capital. These amounts should be classified as restricted reserves according to CMB Financial
Reporting Standards. As of 31 December 2009\ restricted reserves comprise legal reserves amounting
to TL2,058,373 (2008: TL1,303,016).
In accordance with the CMB regulations effective until 1 January 2008, inflation adjustment
differences arising at the initial application of inflation accounting which are recorded under
“accumulated losses” can be netted off from the profit to be distributed based on CMB profit
distribution regulations. In addition, the aforementioned amount recorded under “accumulated losses”
can be netted off from net income for the period, if there is any, undistributed prior period profits, and
inflation adjustment differences of extraordinary reserves, legal reserves and capital, respectively.
In addition, in accordance with the CMB regulations effective until 1 January 2008, “Capital, Share
Premiums, Legal Reserves, Special Reserves and Extraordinary Reserves” were recorded at their
statutory carrying amounts and the inflation adjustment differences related to such accounts were
recorded under “inflation adjustment differences” at the initial application of inflation accounting.
“Equity inflation adjustment differences” could be utilised in issuing bonus shares and offsetting
accumulated losses, and the carrying amount of extraordinary reserves could be utilised in issuing
bonus shares, cash dividend distribution and offsetting accumulated losses.
In accordance with Communiqué No:XI-29 and related announcements of the CMB, effective from
1 January 2008, “Share capital”, “Restricted Reserves” and “Share Premiums” should be carried at
their statutory amounts. The valuation differences (such as inflation adjustment differences) should be
disclosed as follows:
-
if the difference arises from the inflation adjustment of “Paid-in Capital” and has not yet been
transferred to capital, it should be classified under the “Inflation Adjustment to Share Capital”;
-
if the difference is due to the inflation adjustment of “Restricted Reserves” and “Share
Premium” and the amount has not been utilised in dividend distribution or capital increase yet, it
should be classified under “Retained Earnings”.
Other equity items should be carried at the amounts calculated based on CMB Financial Reporting
Standards.
Capital adjustment differences have no other use other than being transferred to share capital.
60
NOTE 18 - EQUITY (Continued)
In accordance with the CMB Decision No. 02/51 and dated 27 January 2010, concerning the allocation
basis of profit from operations in 2009, the minimum profit distribution will not be applied for the year
2009 (31 December 2008: 20%). According to the Board’s decision and Communiqué No. IV-27
issued by the CMB regarding the allocation basis of profit of publicly owned companies, the
distribution of the relevant amount may be realised as cash or as bonus shares or partly as cash and
bonus shares; and in the event that the first dividend amount to be specified is less than 5% of the
paid-up capital, the relevant amount can be retained within the Company. However, companies that
made capital increases before distributing dividends related to the prior period, whose shares are
therefore classified as "old" and "new", and that will distribute dividends from the profit made from
2008 operations are required to distribute the initial amount in cash.
In accordance with the CMB Decision No. 7/242 on 25 February 2005, if the amount of net
distributable profit based on the CMB’s requirement regarding the minimum profit distribution
arrangements, which is computed over the net profit determined according to CMB regulations, does
not exceed net distributable profit in the statutory accounts, then the whole amount calculated per CMB
regulations should be distributed. Similarly, if the amount of net distributable profit based on the
CMB’s requirement regarding the minimum profit distribution arrangements, which is computed over
the net profit determined according to CMB regulations, exceeds net distributable profit in the statutory
accounts, then distributable profit is limited to the profit per statutory accounts. When there is a net loss
per statutory accounts or financial statements prepared in accordance with CMB financial reporting
standards, a distribution of profit is prohibited.
Equity table of the Group as of 31 December 2009 and 2008 is as follows;
2009
Share capital
Additional equity contribution
due to acquisition
Restricted reserves
Exraordinary reserves
Equity inflation adjustment differences
Net loss
Retained earnings
2008
112,830,900
100,000,000
4,555,100
2,058,373
30,182,811
102,708,895
(16,891,412)
(147,332,978)
1,303,016
30,182,811
101,708,204
(85,420,821)
(55,287,816)
Total attributable equity
88,111,689
92,485,394
Currency transliation differences
10,542,660
9,777,150
Equity attributable to equity
holders of the parent
98,654,349
102,262,544
61
NOTE 19 - REVENUE AND COST OF SALES
2009
2008
Domestic sales
International sales
Other sales
420,580,118
249,420,042
480,893
325,043,159
209,474,610
203,221
Gross sales
670,481,053
534,720,990
(184,295,471)
(1,494,673)
(151,378,700)
(1,134,599)
484,690,909
382,207,691
(303,141,012)
(252,986,750)
181,549,897
129,220,941
Less: discounts
Less: returns
Net sales
Cost of sales (-)
Gross profit
NOTE 20 - EXPENSES BY NATURE
Cost of sales
2009
Raw materials, supplies and semi-finished goods
Personnel
Depreciation and amortisation expenses
Energy
Maintenance
Rent
Insurance
Transportation
Other
62
2008
153,251,080
82,957,752
30,594,345
16,075,287
4,143,200
1,045,806
1,003,171
859,902
13,210,469
127,271,627
70,840,698
23,883,447
17,973,765
4,706,409
1,078,614
937,230
1,778,219
4,516,741
303,141,012
252,986,750
NOTE 20 - EXPENSES BY NATURE (Continued)
Operating expenses
2009
Personnel
Transportation
Advertising and promotion
Consultancy
Commissions
Amortisation and depreciation expenses
Employment termination benefits, net
Rent
Provision for doubtful receivables, net
Travel
After-sales service
Sponsorship
Energy
Dealer training
Communication
Expenses due to business combination (Note 3)
Termination benefit
Other
2008
54,502,462
27,273,916
24,064,750
17,634,909
13,509,477
9,861,301
4,988,628
3,199,013
1,589,772
2,492,531
1,445,067
1,409,680
1,090,506
1,087,451
1,086,214
447,354
282,183
12,251,977
37,689,119
23,193,352
14,921,290
22,437,611
12,304,598
11,494,116
8,122,016
3,003,192
1,166,835
1,641,985
2,417,932
1,640,000
1,038,004
1,575,393
1,242,483
1,483,529
13,258,027
178,217,191
158,629,482
NOTE 21 - OTHER OPERATING INCOME/EXPENSES
Other income:
2009
Gain on sales of scrap goods
Rent income
Insurance compensation
Incentive fund income
Gain on sale of property, plant and equipment
Other
Other expenses:
1,008,584
239,995
222,922
202,106
158,839
1,121,499
1,286,364
22,744
241,913
91,751
214,972
693,938
2,953,945
2,551,682
2009
Indemnities
Penalties
Donations
Moving out expenses
Taxes paid for stock count differences
Impairment on financial assets
Other
773,170
345,500
259,440
190,232
148,073
876,249
2,592,664
63
2008
2008
118,503
281,511
364,777
652,522
197,819
1,615,132
NOTE 22 - FINANCIAL INCOME
2009
Foreign exchange gains
Due date charges on term sales
Interest income
Commodity swap contracts
2008
36,039,973
3,200,401
1,699,217
1,437,194
-
25,831,092
9,155,681
710,619
338,739
42,376,785
36,036,131
NOTE 23 - FINANCIAL EXPENSE
Foreign exchange losses
Interest expense
Due date difference on term purchases
Other
2009
2008
36,171,445
19,258,576
1,269,883
790,950
1,439,565
67,485,012
14,254,609
4,386,325
3,416,389
303,031
58,930,419
89,845,366
2009
2008
NOTE 24 - TAX ASSETS AND LIABILITIES
Taxes and funds payable
Less: prepaid current income taxes
Tax provision, net
6,545,235
(5,201,008)
800,336
(668,364)
1,344,227
131,972
Turkish tax legislation does not permit a parent company and its subsidiaries to file a consolidated tax
return. Therefore, provisions for taxes, as reflected in these consolidated financial statements, have been
calculated on a separate-entity basis.
Turkey
Turkey’s Corporate Income Tax Law was changed with Law No. 5520 which was published on 13 June
2006. Most of the rules of the new Corporate Income Tax Law are applicable from 1 January 2006.
According to this, the corporate tax rate applicable for the year 2009 is 20% (2008: 20%). The corporate
tax rate is applied to taxable profit, which is calculated by adding non-taxable expenses and deducting
some exemptions offered by tax laws (exemptions for participation revenues, exemptions for investment
incentives) from the accounting profit of the Company. No additional taxes are paid unless profit is
distributed (except a 19.8% withholding tax paid on used investment incentives).
64
NOTE 24 - TAX ASSETS AND LIABILITIES (Continued)
Dividends paid to non-resident corporations which have a place of business in Turkey or resident
corporations are not subject to withholding tax. Otherwise, dividends paid are subject to withholding tax
at the rate of 15%. An increase in capital via issuing bonus shares is not considered a profit distribution
and thus does not incur withholding tax.
Corporations are required to pay advance corporation tax quarterly at the rate of 20% on their corporate
income. Advance tax is payable by the 17th of the second month following each calendar quarter end.
Advance tax paid by corporations is credited against the annual corporation tax liability. The balance of
the advance tax paid may be refunded or used to set off against other liabilities to the government.
In accordance with Tax Law No: 5024 “Law Related to Changes in Tax Procedure Law, Income Tax
Law and Corporate Tax Law” that was published on the Official Gazette on 30 December 2003 to amend
the tax base for non-monetary assets and liabilities, effective from 1 January 2004, income and corporate
taxpayers will prepare their statutory financial statements by adjusting non-monetary assets and liabilities
to changes in the general purchasing power of the Turkish Lira. In accordance with the aforementioned
law provisions, in order to apply inflation adjustment, the cumulative inflation rate (SIS-WPI) over the
previous 36 months and 12 months must exceed 100% and 10%, respectively. Since these conditions in
question were not fulfilled after 1 January 2005, no inflation adjustments were performed.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file
their tax returns by the 25th of the fourth month following the close of the financial year to which they
relate.
Tax returns are open for 5 years from the beginning of the year that follows the date of filing, during
which time the tax authorities have the right to audit tax returns and the related accounting records on
which they are based, and may issue re-assessments based on their findings.
Under the Turkish taxation system, tax losses can be carried forward to offset against future taxable
income for up to 5 years. Tax losses cannot be carried back to offset profits from previous periods.
Germany
In Germany, the corporation tax rate is 29.83%. The applicable tax rate is the result of the corporate
income tax rate of 15%, plus a solidarity surcharge of 0.83% and a trade tax rate of 14.00% .
The details of taxation on income for the years ended 31 December 2009 and 2008 are as follows:
2009
Current period tax expense (-)
Deferred income tax income/(expense)
65
2008
(6,545,235)
2,849,489
(800,336)
(2,328,892)
(3,695,746)
(3,129,228)
The reconciliation of tax expenses stated in the consolidated income statements as of 31 December
2009 and 2008 is as follows:
2009
Loss before tax in the consolidated financial statements
Tax charge according to parent company’s
tax rate of 20%
Effect of current year loss
Tax calculated based on the dividend paid
Non-deductible expenses
Effect of carry forward tax losses
Exemptions
Effect of property, plant and equipment and intangible assets
Effect of tax rate difference
Other
Tax (expense)/income
2008
(12,859,647)
(82,281,226)
2,571,929
16,456,245
(3,699,727)
(1,239,040)
(467,266)
(899,248)
37,606
(13,464,891)
(440,607)
(6,883,209)
714,456
385,674
(25,423)
128,527
(3,695,746)
(3,129,228)
Deferred Income Taxes
The Group recognises deferred income tax assets and liabilities based upon temporary differences
arising between their financial statements as reported under CMB Financial Reporting Standards and
their statutory tax financial statements.
Tax rates used for deferred income tax assets and liabilities calculated on temporary differences that
are expected to be realised or settled based on taxable income under the liability method are 20% in
Turkey and 29.5% in Germany (2008: 20% and 29,5%).
66
The composition of cumulative temporary differences and the related deferred income tax assets and
liabilities in respect of items for which deferred income tax has been provided at 31 December 2009
and 2008 using the enacted tax rates are as follows:
Cumulative temporary
differences
2009
2008
Deferred income
tax assets/(liabilities)
2009
2008
Provision for employment
termination benefits
Provision for impairment of
property, plant and equipment
Provision for impairment on inventory
Scrap goods
Unrealised credit finance income
Administrative expenses
Financial assets
Personnel bonus accrual
Other
11,936,436
4,101,874
8,260,247
4,408,205
3,342,260
2,711,034
1,756,144
1,557,484
469,447
590,468
428,193
251,910
270,618
3,830,304
2,391,361
3,274,468
2,223,866
193,937
851,123
517,124
251,910
1,437,194
1,196,116
290,278
2,514,571
820,375
1,652,049
881,641
668,452
542,207
351,229
311,497
125,401
118,094
72,963
50,382
54,123
766,061
478,272
654,894
444,773
38,787
170,225
152,551
50,382
287,439
239,223
85,632
5,629,294
5,901,929
(29,909,792)
(72,002)
(24,716)
(33,373,779)
(80,656)
(53,769)
(30,006,510)
(33,508,204)
(24,377,216)
(27,606,275)
Property plant and equipment and
intangible assets
Unincurred credit finance expenses
Other
(107,211,314) (123,667,058)
(360,008)
(403,280)
(120,804)
(213,690)
Deferred income tax (liabilities)/assets - net
67
A deferred income tax asset is recognised only to the extent that it is probable that a tax benefit will be
realised in the future. If it is probable that a tax benefit will be realised, a deferred income tax asset is
recognised on unused tax losses, unused tax credits and other temporary differences. The Company
did not recognise deferred income tax assets in respect of losses amounting to TL118,538,891 (2008:
TL102,601,910) that can be carried forward against future taxable income:
2009
2009
2010
2012
2013
2014
Deferred Income Tax Assets:
4,651,626
34,383,662
63,233,936
16,269,667
332,686
4,651,626
34,383,662
63,233,936
-
118,538,891
102,601,910
2009
Deferred income tax assets to be realized in twelve months
Deferred income tax assets to be realized after twelve months
Defered Income Tax Liabilities:
2008
1,575,514
4,053,780
2,579,795
3,322,134
5,629,294
5,901,929
2009
Deferred income tax liabilities to be settled after twelve months
Deferred income tax liabilities to be settled after twelve months
2008
2008
(96,718)
(29,909,792)
(134,425)
(33,373,779)
(30,006,510)
(33,508,204)
Movements in deferred income taxes can be analysed as follows:
2009
1 January
Additions due to legal merge (Note 3)
Addition due to business combinations (Note 3)
Current year deferred income tax income/(expense)-net
31 December
68
2008
(27,606,275)
524,012
95,831
2,849,489
(240,273)
2,683,108
(25,239,206)
(2,328,892)
(2,721,285)
(24,377,216)
(27,606,275)
NOTE 25 - EARNINGS PER SHARE
2009
Net loss attributable to the equity holders of the parent
Weighted average number of shares
with Kr1 face value each
Losses per 1,000 shares (Kr)
(16,891,412)
21,603,637,444
(0.78)
2008
(85,420,821)
5,845,308,652
(14.61)
NOTE 26 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES
The due to and due from related party balances as of year-end, and transactions performed with related
parties during the period are summarized below:
a)
Due from related parties:
2009
Due from shareholders:
İntema İnşaat ve Tesisat Mlz.Yat.Paz.A.Ş.
Due from group companies:
EKOM Eczacıbaşı Dış Ticaret A.Ş.
Vitra Bad GMBH
Vitra Karo San. ve Tic.A.Ş.
Vitra USA Inc
Other
Less: Provision for doubtful receivables
Less: Unearned credit finance income
2008
49,126,483
37,881,481
49,126,483
37,881,481
44,294,653
1,215,860
153,946
88,741
38,602,942
1,903,686
82,184
79,976
407,846
45,753,200
41,076,634
(2,055,229)
(590,454)
(1,906,256)
(851,123)
92,234,000
76,200,736
The movement of provisions for doubtful receivables is summarized below:
2009
1 January
1,906,256
1 January
Collections and disposals
327,343
1,205,257
(1,383,627)
31 December
2,055,229
69
2008
707,295
1,770,746
(571,785)
1,906,256
NOTE 26 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES (Continued)
On average, credit terms for trade receivables are less than 3 months. The effective interest rates
applied to receivables from related parties are 0.89% (2008: 2.83%), 0.44% (2008: 1.02%), 0.66%
(2008: 2.80%) and 0.30% (2008: 0.15%) for EUR, USD, GBP and TL, respectively.
b)
Due to related parties:
2009
Due to shareholders:
Due to group companies:
ESAN Eczacıbaşı Endüstriyel
Hammaddeler San. ve Tic.A.Ş.
Vitra Sanitary Marketing U.K.
Vitra Bath and Tiles
Vitra USA Inc.
Eczacıbaşı Sigorta Acenteliği A.Ş.
Eczacıbaşı Koramic Yapı Kimyasalları San. ve Tic.A.Ş.
Eczacıbaşı Bilgi İletim San. ve Tic.A.Ş.
Eczacıbaşı Sağlık Hizmetleri A.Ş.
Other
c)
2008
2,190,551
389,323
6,534,346
-
2,579,874
6,534,346
1,213,070
291,257
132,332
56,727
34,193
30,889
8,398
395
39,144
936,972
303,253
896,794
79,976
483
17,624
51,096
5,288
95,318
1,806,405
2,386,804
4,386,279
8,921,150
Net sales to related parties:
2009
Eczacıbaşı Dış Ticaret A.Ş.
70
2008
173,211,997
143,502,126
175,470,093
135,904,026
316,714,123
311,374,119
d)
Product, service and property, plant and equipment purchases:
2009
Product
EKOM Eczacıbaşı Dış Ticaret A.Ş. (*)
Eczacıbaşı Holding A.Ş. (**)
İntema İnşaat ve Tesisat
Mlz. Yat. Paz. A.Ş. (***)
ESAN Eczacıbaşı Endüstriyel
Hammaddeler San. ve Tic. A.Ş.
Vitra Bad GMBH
Eczacıbaşı Spor KulübüVitra USA Inc.
Vitra Bath and TilesVitra Sanitary Marketing U.K
Eczacıbaşı İlaç Sinai ve
Finansal Yat. San. ve Tic. A.Ş.
Vitra Karo San.ve Tic. A.Ş.
Kanyon Yönetim İşletim
Pazarlama Ltd. Şti.
Eczacıbaşı Havacılık A.Ş. Eczacıbaşı Bilişim San. ve Tic. A.Ş.
İstanbul Modern-İKSV
VILLEROY & BOCH
Eczacıbaşı Koramic Yapı
Kimyasalları San.ve Tic.A.Ş.
Girişim Paz.Tük.Ür.San.Tic.A.Ş.
İpek Kağıt San. Ve Tic A.Ş.
Eczacıbaşı İnşaat ve Tic.A.Ş.
Service
29,913,317
19,410,917
6,484
20,899,333
Fixed assets
2,844,646
Financial
expense (*)
Total
-
27,068,671
17,058,724 (**) -
2,352,193
14,852,035 (***)731,120
5,309,694
3,919,934 57,587
2,245,725
1,381,000
903,087
1,253,057
1,470,431
-
-
3,977,521
2,245,725
1,381,000
903,087
1,253,057
1,470,431
-
972,147
483,858
-
-
972,147
483,858
-
460,481
6,661
111,792
2,387
30,832
73,891
78,778
-
-
460,481
6,661
190,570
2,387
30,832
73,891
64,863
10,277
-
14,607
1,296
-
79,470
10,277
2,800
1,296
2,800
3,929,218
83,769,058
44,283,481
825,801
34,730,558
(*)
Comprises interest expense and foreign exchange losses on bank borrowings used through Eczacıbaşı Dış
Ticaret A.Ş. and Eczacıbaşı Holding A.Ş..
(**)
Services received from Eczacıbaşı Holding A.Ş. consist of legal consultancy, financial consultancy,
auditing, budget planning, corporate identity and human resource services. These services are charged
according to the time spent by the related departments of Eczacıbaşı Holding A.Ş.. Additionally, these
services include the time spent for the acquisition of the subsidiary in 2008, legal services and services
related with human resources.
(***) Service received from Intema İnşaat ve Tesisat Mlz.Yat.Paz.A.Ş. mainly include sales commissions and
shared expenses.
71
2008
Product
Eczacıbaşı Dış Ticaret A.Ş.
İntema İnşaat ve Tesisat
Mlz.Yat.Paz.A.Ş.
Eczacıbaşı Endüstriyel
Hammaddeler San.ve Tic.A.Ş.
Vitra Bad GMBH
Vitra USA
Vitra Bath and Tiles
Vitra Sanitary Marketing U.K
Eczacıbaşı İlaç Sanayi
Vitra Karo San.ve Tic.A.Ş.
Eczacıbaşı Bilgi İletim San. ve Tic.A.Ş.
Eczacıbaşı Koramic Yapı
Kimyasalları San.ve Tic.A.Ş.
Girişim Paz.Tük.Ür.San.Tic.A.Ş.
Vitra Küvet San.ve Tic.A.Ş.
İpek Kağıt San. Ve Tic A.Ş.
Eczacıbaşı İnşaat ve Tic.A.Ş.
Eczacıbaşı Beiersdorf Kozmetik
Service
113,046
65,912,764
29,947,462
121,133
19,432,224
4,391,867
127,810,685
e)
3,138,622
-
Total
62,661,096
21,208,866 (**)16,694
8,721,902
16,956,804 (***)3,919
2,350,368
4,151,171 111,135
2,511,978
1,742,855
1,204,586
1,181,306
874,735
349,429
40,515
35,731
6,517
-
Financial
expense (*)
Fixed assets
34,916
12,953
11,824
5,852
1,078
49,423,185
17,863
223,791
-
-
4,262,306
2,511,978
1,742,855
1,204,586
1,199,169
874,735
349,429
264,306
35,731
-
-
34,916
12,953
11,824
6,517
5,852
1,078
262,267
73,733,366
Key Management Compensation:
The Group has determined key management personnel as the chairman, members of the Board of
Directors, general manager and assistant general managers. Key management compensation is
summarized as below.
2009
Salaries and other short-term benefits
Employment termination benefits
Personnel bonuses
Unused vacation pay liabilities
72
2008
8,318,483
1,767,214
1,489,018
902,332
7,053,175
668,587
2,341,582
1,104,733
12,477,047
11,168,077
NOTE 27 - FINANCIAL RISK MANAGEMENT
Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair
value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The
Group’s overall risk management program focuses on the unpredictability of financial markets and seeks
to minimize potential adverse effects on the Group’s financial performance.
Credit Risk
Credit risk arises from deposits with banks, as well as credit exposures to customers, including
outstanding receivables.
Ownership of financial assets involves the risk that counter parties may be unable to meet the terms of
their agreements. A significant portion of trade receivables is due from domestic and international
related-party sales companies. Since the credit risk of receivables from domestic sales is born by the
related party, there is no risk. Receivables from international sales are guaranteed by Eximbank
insurance. The risk has been reduced for international receivables that are not covered by Eximbank
insurance by collecting them in cash or by receiving a guarantee letter provided by banks.
The aging of the Group’s overdue but not impaired trade receivables, including due from related
parties which takes into account the overdue terms, is as follows:
Trade Receivables
1-30 days overdue
1-3 months overdue
3-12 months overdue
1-5 years overdue
More than 5 years overdue
Collateralized or secured with guarantees *
2009
Other Receivables
6,516,774
3,454,230
2,701,434
-
73
-
Trade Receivables
2008
Other Receivables
14,524,294
3,106,109
1,377,439
-
-
NOTE 27 - FINANCIAL RISK MANAGEMENT (Continued)
2009
Maximum net credit risk as of
balance sheet date (A+B+C+D+E) (1)
- The part of maximum risk
under guarantee with collateral
A. Net book value of financial assets
that are not past due/impaired
B. Net book value of financial assets
that are renegotiated, if not that
will be accepted as past due or impaired
C. Net book value of past due but not
impaired financial assets (6)
- Collateralized or guaranteed part
D Net book value of impaired financial assets (4)
- Past due (gross carrying amount)
Impairment (-)
- The part of net value under guarantee
with collateral
- Not over due (gross carrying amount)
- Impairment (-)
with collateral
E. Off-balance sheet items with credit risk
Trade receivables
Related
Other
Party
14,924,793
92,234,000
1,339,584
-
10,783,593
83,702,762
Other receivables
Related
Other
Party
2,661,357
-
-
-
2,661,357
-
Bank
Deposits
Financial
Instruments
24,979,896
24,979,896
-
-
-
-
-
-
-
4,141,200
1,339,584
8,531,238
-
3,494,138
(3,494,138)
2,055,229
(2,055,229)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
74
2008
Maximum net credit risk as of
balance sheet date (A+B+C+D+E) (1)
- The part of maximum risk
under guarantee with collateral
A. Net book value of financial assets
that are not past due/impaired
12,193,250
B. Net book value of financial assets
that are renegotiated, if not that
will be accepted as past due or impaired
C. Net book value of past due but not
impaired financial assets (6)
- Collateralized or guaranteed part
D Net book value of impaired financial assets (4)
- Past due (gross carrying amount)
Impairment (-)
with collateral
- Not over due (gross carrying amount)
- Impairment (-)
with collateral
E. Off-balance sheet items with credit risk
Trade receivables
Related
Other
Party
10,428,148
12,193,250
76,200,735
116,526
-
6,914,734
60,706,307
-
-
3,513,414
116,526
1,716,995
(1,716,995)
15,494,428
1,906,256
(1,906,256)
Other receivables
Related
Other
Party
Bank
Deposits
Financial
Instruments
1,979,545
-
38,508,862
-
-
1,979,545
-
-
-
-
-
-
-
-
-
-
-
38,508,862
-
-
-
-
-
-
-
-
-
-
-
-
75
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed credit facilities and the ability to
close out market positions
Group management develops weekly, monthly and 4-month period cash flow plans to determine the
liquidity risk; carries out monthly analyses of operating cash adequacy, operating cash’s ability to pay
interest, operating profit’s ability to pay interest, and level of operating cash generation; and takes the
necessary precautions accordingly.
As of 31 December 2009 and 2008, the undiscounted contractual cash flows of the financial liabilities
of the Group are as follows:
2009
Carrying
amount
Contractual
cash flow
Less than
3 months
3-12
months
1-5
years
Over
5 years
Non-derivative financial liabilities
Trade payables and due to related parties
Other payables
Other short term liabilities
269,488,302
68,076,669
7,741,732
11,305,124
295,629,276
68,076,669
7,741,732
11,305,124
62,228,715 69,928,209 163,472,352 67,077,522 999,147
7,741,732
11,305,124
-
356,611,827
382,752,801 148,353,093
70,927,356 163,472,352 -
Derivative financial liabilities
Derivative cash inflows
Derivative cash outlows
-
-
-
-
-
-
Net cash outflow
from forward contracts
-
-
-
-
-
-
Carrying
amount
Contractual
cash flow
Less than
3 months
3-12
months
1-5
years
Over
5 years
2008
Non-derivative financial liabilities
Trade payables and due to related parties
Other payables
Other short term liabilities
284,324,892
51,540,989
4,814,753
14,929,906
299,274,938
51,540,989
4,814,753
14,929,906
34,405,490 179,287,081
49,152,695
2,388,294
4,814,753
8,757,419
6,172,487
85,582,367
-
-
355,610,540
370,560,586
97,130,357 187,847,862
85,582,367 -
Derivative cash inflows
Derivative cash outflows
12,193,250
12,844,800
12,193,250
12,844,800
2,923,550
3,211,200
9,269,700
9,633,600
-
-
Net cash outflow
from forward contracts
25,038,050
25,038,050
6,134,750
18,903,300
-
-
Derivative financial liabilities
76
Funding risk
The ability to fund existing and prospective debt requirements is managed by maintaining the
availability of adequate committed funding lines from high quality lenders.
Interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest-bearing
liabilities and assets. These exposures are managed by using natural hedges that arise from offsetting
interest rate sensitive assets and liabilities. The Group utilizes its cash in time deposits and the
purchase of company bonds. To keep these exposures at a minimum level, the Group tries to borrow at
the most suitable rates.
Average effective annual interest rates at 31 December 2009 and 2008 are as follows:
USD
Current Assets
2009
EUR GBP
-
0.25
0.50
2008
EUR GBP
TL
USD
TL
8.50
-
4.79
-
16.18
4.54
5.57
-
-
Short-Term liabilities
Short-term bank borrowings
Current portion of long-term
bank borrowings
5.24
-
7.90
5.75
3.59
5.90
-
4.38
7.30
5.22
16.50
Long-Term liabilities
Long-term bank borrowings
5.50
5.12
-
-
4.29
6.77
-
-
Interest rate positions of the Group at 31 December 2009 and 2008 are as follows:
2009
Financial instruments with fixed interest rates
Bank borrowings
8,395,562
269,488,302
There are no financial instruments with floating interest rates.
2008
27,056,116
284,324,892
-
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the Turkish Lira. The Group constantly monitors the
currency risk and net financial position through regular meetings and monthly reports.
Foreign Currency Position
The Group’s assets and liabilities denominated in foreign currencies at 31 December 2009 and 2008
are as follows:
77
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
2009
TL equivalent
Assets:
Cash and cash equivalent
Receivables from related parties
Trade receivables
Other receivables
GBP
Other
TL equivalent
219,682
3,847,423
161,284
-
7,815,286
15,362,173
5,562,975
525,336
1,508,664
155,955
159,669
4,274,891
217,606
-
1,316,173
-
85,616,736
4,228,389
30,930,389
4,652,166
1,316,173
133,468,778
130,745,175
31,721,522
957,291
5,763,336
3,359,677
10,146,510
163,319
7,070,379
12,402,916
20,079,818
1,738,488
136,627
13,077
85,958
-
51,413,939
46,526,405
12,554,372
187,464
2,558,933
1,555,190
4,636,894
75,600
3,272,869
1,558,754
827,804
145,067
45,266
-
4,882
107,432
-
323,395,987
34,456,884
122,781,666
2,576,891
112,314
(237,779,251)
(30,228,495)
(91,851,277)
2,075,275
1,203,859
Off-balance sheet foreign
currency derivative assets
currency derivative liabilities
Net asset/(liability)position of off balance
sheet financial instruments
Net Foreign Currency Position
AVRO
17,595,619
50,509,710
12,780,446
1,134,884
3,259,168
336,909
Liabilities:
Short-term financial liabilities
Long-term financial liabilities
Trade payables
Short-term debt provisions
Other short-term payables
Other short-term liabilities
Long-term debt provisions
Net Foreign Currency Position (*)
ABD
Doları
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,075,275
1,203,859
-
-
(237,779,251)
Fair value of foreign currency
hedged financial assets
-
Exports
Imports
173,816,812
42,220,332
78
(30,228,495)
13,919,781
9,625,685
(91,851,277)
54,211,569
10,136,954-
8,110,578
2,089,118
16,406,735
553,842
CONVENIENCE TRANSLATION INTO ENGLISH OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009
2008
TL equivalent
Assets:
Cash and cash equivalent
Receivables from related parties
Trade receivables
Other receivables
GBP
Other
TL equivalent
1,139,639
4,600,262
146,814
11,403
4,279
9,056,755
14,843,279
4,442,918
1,033,244
1,556,258
307,632
25,076
1,120
44,315
-
1,574,646
7,739
-
77,165,929
5,902,397
31,240,086
70,511
1,582,385
201,704,752
80,913,688
12,553,076
1,123,267
4,128,128
922,633
12,141,661
8,424,164
31,647,936
1,019,493
591,957
510,968
15,527
-
70,315,134
37,075,817
5,101,239
9,557
1,928,311
430,976
5,585,229
3,935,054
1,511,102
294,288
150,552
25,949
-
9,115
105,690
-
321,911,369
33,785,881
124,381,317
1,981,891
114,805
(244,745,440)
(27,883,484)
(93,141,231)
(1,911,380)
currency derivative assets (**)
currency derivative liabilities (***)
-
Net asset/(liability)position of off balance
sheet financial instruments
Net Foreign Currency Position
EUR
21,167,155
40,295,575
9,733,426
2,334,016
3,331,637
304,120
Liabilities:
Short-term financial liabilities
Long-term financial liabilities
Trade payables
Short term provisions
Other short-term payables
Other short-term liabilities
Long term provisions
Net Foreign Currency Position (*)
USD
-
-
-
-
12,844,800
-
6,000,000
-
-
(12,844,800)
-
(6,000,000)
-
-
(257,590,240)
Fair value of foreign currency
hedged financial assets
11,407,606
Exports
Imports
176,307,394
46,213,136
79
1,467,580
(27,883,484)
29,339,722
13,215,070
(99,141,231)
11,407,606
59,607,387
13,270,209
(1,911,380)
5,226,764
55,549,082
1,467,580
13,728,197
986,327
The foreign currency position as of 31 December 2009 and 2008 in regard to changes in foreign
currency rates is depicted in the table below. The Group is mainly exposed to EUR and USD currency
risk.
2009
Profit/Loss
Appreciation of
Depreciation of
foreign currency
foreign currency
Equity
Appreciation of
Depreciation of
foreign currency
foreign currency
Change in USD against TL by 10%
USD Net assets/liabilities
Hedged USD (-)
(4,551,504)
-
4,551,504
-
-
-
USD Net Effect
(4,551,504)
4,551,504
-
-
EUR Net assets/liabilities
Hedged EUR (-)
(19,842,631)
-
19,842,631
-
615,899
-
(615,899)
-
EUR Net Effect
(19,842,631)
19,842,631
615,899
(615,899)
Change in EUR against TL by 10%
2008
Profit/Loss
Appreciation of
Depreciation of
foreign currency
foreign currency
Equity
Appreciation of
Depreciation of
foreign currency
foreign currency
Change in USD against TL by 10%
USD Net assets/liabilities
Hedged USD (-)
(4,227,677)
-
4,227,677
-
-
-
USD Net Effect
(4,227,677)
4,227,677
-
-
EUR Net assets/liabilities
Hedged EUR (-)
(19,751,491)
(1,284,480)
19,751,491
1,284,480
10,878,301
-
-
EUR Net Effect
(21,035,971)
21,035,971
10,878,301
-
Change in EUR against TL by 10%
80
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group performs a monthly financial risk analysis of capital risk management, the general
monetary situation, short-term balance sheet liquidity and net financial liability levels.
As of 31 December 2009 and 2008, net debt/(Equity+net debt+minority interest) rates are:
Total liabilities
Net deferred income tax liabilities
Net debt
Equity
Minority interest
Equity+net debt
Net debt/Equity+net debt
2009
2008
412,640,930
(25,012,485)
(24,377,216)
363,251,229
98,654,349
5,392,939
467,298,517
78%
412,082,181
(38,533,767)
(27,606,275)
345,942,139
102,262,544
10,040,161
458,244,844
75%
NOTE 28 - FINANCIAL INSTRUMENTS
Fair value of financial instruments
Fair value is the amount at which a financial instrument could be exchanged in a current transaction
between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted
market price, if one exists.
Effective 1 January 2009, the Group adopted the amendment to IFRS 7 for financial instruments that are
measured in the balance sheet at fair value, which requires disclosure of fair value measurements by
level of the following fair value measurement hierarchy:
•
•
•
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (Level 3).
81
NOTE 28 - FINANCIAL INSTRUMENTS (Continued)
For disclosure purposes, the borrowings carried at the amortised cost at the balance sheet are presented
with their values in Note 6. The fair value of borrowings for disclosure purposes is estimated by NOTE
discounting the future contractual cash flows at the current market interest rate (Libor) that is available to
the Group for similar financial instruments that can be classified as level 2. The carrying value less
impairment provision of trade receivables and payables are assumed to approximate their fair values due
to the short-term nature of trade receivables and payables.
NOTE 29 - EVENTS AFTER THE BALANCE SHEET DATE
Starting on 1 January 2010, EYAP began to utilise the kitchen furniture production facilities that had
previously been rented to Intema İnşaat ve Tesisat Malzemeleri Yatırım ve Pazarlama A.Ş. by Vitra
Küvet, with which EYAP merged on 6 June 2009. The Group decided to take over the premise located
at E-5 Karayolu Üzeri, Sifa Mahallesi, Aslı Sokak Tuzla-Istanbul and used by Intema İnşaat ve Tesisat
Malzemeleri Yatırım ve Pazarlama A.Ş. in accordance with Article 6 of the Labour Law on the
transfer of business premises. Domestic sales of kitchen furniture products will be carried out by
Intema İnşaat ve Tesisat Malzemeleri Yatırım ve Pazarlama A.Ş. as the exclusive authorised
distributor.
………………………..
82
ECZACIBASI YAPI GERECLERI
SANAYI VE TICARET A.S.
AUDIT COMMITTEE REPORT FOR THE ACCOUNTING PERIOD 1 JANUARY –31
DECEMBER 2009
To: Eczacibasi Yapi Gerecleri Sanayi ve Ticaret A.S. General Assembly
Title of Company
Registered Office
Istanbul
Capital
TRY 112,830,900.-
Field of Activity
Name & term of office of Auditors,
Shareholders, or Company personnel
Production of ceramic sanitary ware and fixtures
Tayfun Icten and Bulent Avci are in charge up to the
Ordinary General Meeting to be held to review
Company accounts for the year 2009. They are not
shareholders or personnel of the Company.
Number of Board meetings held and
of Audit Committee meetings attended
No attendance at Board meetings; five audits were
conducted.
Scope, dates and results of audit
conducted on Company Accounts, books
and documents
All operations as of end-April, June, August, October
and December 2009 were audited and determined to
comply with all laws and regulations.
Number and results of counts made in
shareholding cash desk as per sub-paragraph 3
of paragraph 1 of Article 353 of the
Turkish Commercial Code
Counting was performed once every two months or
six times a year. In all cases, the cash desk was found
to be appropriate for counting.
Dates and results of audits conducted
as per sub-paragraph 4 of paragraph 1
of Article 353 of the Turkish
Commercial Code
Complaints and corruptions submitted
and related actions
Audits were conducted at the end of every month
and inventories were found to be consistent with
records.
No complaints or cases of corruption.
We have audited the accounts and transactions for the period 01 January 2009-31 December
2009 in accordance with the Turkish Commercial Code, the Company’s articles of association,
other legislation and Generally Accepted Accounting Principles and Standards.
We believe that the Balance Sheet prepared as of 31 December 2009 and attached hereto
reflects the financial position of the Company on said date and that the Income Statement for the
period 01 January 2009-31 December 2009 reflects the operating results for said period fairly and
accurately.
We kindly request that you approve the Balance Sheet and Income Statement and discharge the
Board of Directors of their duties.
Audit Committee
Tayfun Icten
Bulent Avci
83

Eczacıbaşı Yapı Gereçleri Sanayi ve Ticaret A

Transkript

Benzer belgeler

The Turkish Diplomat`s Daughter

The Monument of Reliance was built “With a view to affirming the

The Turkish National Anthem - English lyrics Turkish National

Patient Participation Group Turkish

ISO 9001 - Modern Ambalaj

LITR 304 MODERN TURKISH LITERATURE SPRING 2012 Koç

Guaranty

ınformatıon on consolıdated assocıate

Embassy English 2016 Promotion for Turkish

qryho pdvwhuv rı wxunlvk olwhudwxuh vkruw vwru\ srhwu