annual report 2015 - romcab audit 2015 ifrs... · this report was prepared on 29 april 2016 and was...

1

Company

Presentation

Purpose of the report

Company Presentation

Activity analysis Tangible assets Securities market Company

management Financial situation

Corporate governance

Signatures:


Applicable regulations

Information users

Information categories

The date of the report


Activity analysis

Tangible assets

Securities market

Company management

Financial situation


Conclusions

Annual report 2015

Prepared in accordance with Regulation 1/2006 the CNVM, OMF 881/2012, OMF 1286/2012

Applicable regulations

This report has been prepared in accordance with the provisions of

Regulation 1/2006 regarding the issuers and operations with securities

issued by CNVM (National Securities Commission, the current

Financial Supervisory Authority).

According to the provisions of Title IV - the Issuers of securities,

Chapter III - Reporting Requirements, Section 2 - Obligations of

companies whose shares are allowed to trading on a regulated market,

Art. 113, companies whose shares are allowed to trading on a regulated

market shall establish, communicate and make public the annual report.

The annual report is made available to the public and is sent to the

Financial Supervisory Authority and market operator within four

months from the end of the reporting period.

company’s current activity and perspectives on medium and long

term, as well as regulatory bodies of the capital market in Romania,

to meet the requirements of regular reporting.

Users of information from this report

Information on the company’s business, its properties, transactions

carried out in 2015 through the mechanisms of BVB trading, financial

and economic situation presented and all other information included in

this report addresses current and potential investors, the general public

directly interested in the

The date of the report

This report was prepared on 29 April 2016 and was submitted to

ASF and BVB on 30 April 2016.

Information categories

The report is divided into 9 sections and it includes a presentation

of the legal framework for the preparation of the report,

presentation and analysis of the company’s business,

properties owned, company’s management, trading of shares on

the stock exchange and the presentation of economic and financial

situation of the company.

We tried, hopefully successfully, to present the information in such

a way to be easy to follow and assimilate.

2

Purpose of the report Company presentation - History




management Corporate

governance Financial situation

Signatures:



General information

History

Declarations of the CEO

Activity analysis

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


General information

Romcab S.A. is a manufacturer of cables, electric conductors, power cords and electrical wiring, with

the registered office in Tîrgu Mureș.

The main activity of the company is the production and marketing of the following product

categories:

Cables and conductors for civil, residential and industrial constructions

Wiring and conductors for the automotive industry

Cords and cables for household industry

Cables and conductors for infrastructure solutions

Telecommunication cables

ROMCAB SA Tîrgu Mureș

Registered office: 35 Voinicenilor

Street, Tîrgu Mureș, 540252,

Romania

Secretariat +40 265 312 540

Fax +40 265 312 551

E-mail: [email protected]

Web: www.romcab.ro

Registration number with the Office

of the Trade Register J26/764/1995

VAT no. 7947193

Fiscal assignment RO

Regulated market: BVB - REGS

Market symbol: MCAB

Share capital: 23.465.165 RON

Number of shares: 9,386,066

Nominal value: 2.5 RON / share

Number of shareholders: 723

* Date:

Zoltan Prosszer, CEO of ROMCAB S.A.

“Romcab is a player on the regional

market for more than 60 years. A

period of time which impacts

overwhelmingly on issues that matter

most: knowledge and experience in

the field of cables and wiring. The

strong ambition to offer products and

services that contribute to our

customers’ businesses and continued

pursuit of product quality and

services outlined our quality mark.”

“All these efforts translate into a

custom profile of the business that

differentiate us from our competitors.

We built a new factory in the latest

quality standards, we acquired top

equipment, we implemented ISO

standards, we formed a young,

qualified, motivated and dynamic

team. We accomplished all this out of

respect for the industry in which we

operate and to our customers.”

mailto:[email protected]

http://www.romcab.ro/

3

Company presentation - General

Information

Company presentation - History






Signatures:



General information

History


Activity analysis

Tangible assets

Securities market

Company management

Company management


Conclusions

1950 - Started the production of electric isolated

conductors in Tîrgu Mureș in the workshops of

local industry

1960 - After a dynamic development, this activity

was transferred to the republican industry

through the set-up of Tg.-Mures Conductors

Factory (FCTM), in 1960, with the registered office

on the current location of ROMCAB.

1961 – 1969 - The factory manufactured cables and

plastics insulated conductors, being developed

and equipped appropriately for domestic

demand, especially for the manufacture of

electrical strands for motor trucks and tractors

assimilated for manufacturing at the factories in

Brasov.

1969 - The factory was unified with Electromureş

company and with Computing Machine factory

(Fabrica de Maşini de Calcul) being built and

commissioned. Electromureş became the sole

supplier of conductors and PVC insulated cords

for the entire building machine industry and

energetic industry, as well as electric strands for

any type of vehicle manufactured in the country.

Year 2016, in the vision of

ROMCAB

“Business growth for this year will be

fueled mainly by contracts signed two

years ago which reach maturity in 2016.

Alongside these, new customers will have

a contribution to the advance of incomes.

The advance of costs is closely related to

the increase in operations. For the

quotations for raw materials we have

budgeted a level close to that recorded last

year.”

Zoltan Prosszer, CEO Romcab

Medium-term plans

“The market capitalization reflects the

price that the Romanian investor is

willing to pay. We also try elsewhere, at

the London Stock Exchange, maybe the

investors there will be willing to pay

more."

Zoltan Prosszer, CEO Romcab

1969-1985 - The wires and wiring sections also

manufacture for export, approximately 20-30% of

the total volume of production, which is delivered

to partners well-known on the European,

American and Far Eastern markets.

1990 - The difficulty in adapting to new markets

and the loss of markets in the countries members

of CAER led to the separation of Electromureş in:

Romcab - having as main activity the

manufacture of wires and wiring; Electromureș- having as main activity the manufacture of

household products; Sumel - having as main

activity the manufacture of electrical, audio goods,

tools and construction of special machines.

1990-1999 - The lack of a centralized planning and

imperfect adaptation of Electromureş and then

Romcab to the conditions of market economy

have led to the loss of some business sectors

important to Romcab.

1999 – Paneuro Company SRL purchased from

F.P.S. [State Ownership Fund] the main stock

package and started an important re-organization

process of the factory, laid the basis of a modern

and efficient management which revived the

production and established, among other

objectives, the re-gain of positions on domestic

and foreign markets.

Annual report 2015


4

Company presentation - History Analysis of activity - Description of the main

activity






Signatures:



General information

History


Activity analysis

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


2000-2006 - Relaunch of activity supported by

investments worth 13.5 billion RON. The increase

in the market share was boosted by the emergence

of a new range of products (cords, extension cords

and rewinders) and by the entrance in the car

segment

2004 - The company takes over the debts of other

companies in the Paneuro Group and starts legar

reorganization. This is not an impediment to the

preservation and strengthening of market

position.

2007 - Signing of the most important contracts in

the automotive industry, both in the range of

automotive conductors and wires. Increase in the

volume of sales to export to 40% of the total

turnover, whose level reaches 21.5 million USD

2009 - Against the economic crisis, Romcab

implemented an ambitious development plan that

allowed him, in spite of drastic decrease in sales,

to carry out, at the end of the first semester of

2010, a net income of 287 thousand RON and

reduce spending at a very low level.

2010 - The company paid all creditors in the

insolvency proceedings and successfully closed

the procedure, and due to the development plan

initiated this year,

What 2015 meant for

ROMCAB

The increase in profit before

taxation by 2.39 times, against

an increase in sales of finished

goods by 31%

Increase in revenue of the

operational activity by 27%

Business margin reported to the

result from operational activity

by 8.5%

Alignment of the new corporate

governance code of the BVB

The company's inclusion in the

ELITE European Group

Companies within the program

initiated by the London Stock

Exchange Group (LSEG)

Increase in the visibility of the

business on the stock exchange

and outside

2011 - The company succeeded to attract co-

financing schemes offered by European funds

which were used for carrying out the green field

project for building and equipping a new factory,

to the highest standard of performance.

2012 - The team was extended by co-opting well-

known specialists in the cable industry, who

worked as a necessary and important element of

expertise and technology for factories, input of

know-how not only to build factories, but also to

drive them profitable and to high standards of

professionalism, catalyst in the process of

comprehensive development of the factory.

2013 - Solid foundations were established to

increase profitability by reducing significantly the

production costs due to the purchase of modern

equipment allowing automation, fluidization and

traceability of production.

2014 - Multi-annual contracts were signed worth

135 million EUR with important players on the

European market in the field.

5

Company presentation - History Activity analysis - Activity general evaluation






Signatures:



Activity analysis

Description of the main activity

Date of establishment

Mergers and reorganizations

Acquisitions/disposals of assets

Activity general evaluation

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Basic activity

The company ROMCAB S.A. is a Romanian legal entity with private

capital, its legal form being Joint Stock Company.

According to the articles of incorporation of the company updated on

16 July 2015, the main object of activity is Manufacture of fiber optic

cables (NACE 2731).

The activity is carried out on two production platforms in Mureș

County, respectively the production platform from Acățari and the

production platform from Tîrgu Mureș, Voinicenilor Street.

Date of establishment

From the legal point of view, the company ROMCAB S.A. was

founded in 1995, being given the registration number J26/764/95 of

29.11.1995, by the Office of the Trade Register of Mureș.

After 1990, the company detached from the former company

Electromureș. Amid problems of adaptability to new markets in the

1990s, the company took over a part of its assets, and began the

manufacturing process in January 1996.

Significant mergers and reorganizations of the trading company, its

subsidiaries or its controlled companies, during the financial year

During the reporting period there were no mergers, divisions,

acquisitions or other patrimony changes of the company.

Description of asset acquisition/disposal

According to the company’s investment plans for the previous period,

in 2015, several manufacturing equipment were purchased.

The value of the machinery and equipment purchased was at the level

of 54.8 million RON of the total of 59.2 million RON investments in

tangible assets.

Asset/investment category

(values expressed in RON) Year 2013 Year 2014 Year 2015

Construction/Facilities 47.075.448 804,552 3,588,375

Machinery/Machines 3.178.534 39.478.091 54.889.861

Measuring devices 744.829 289.291 228.058

Transportation means 511.605 689.367 447.085

Equipment, furniture, office

supplies

8.983 30.155 30.667

Total active investments 51.519.400 41.291.456 59.184.046

Regarding the disposal of assets, in 2015, the company sold assets

worth 1.74 million RON, of which machines and machinery of 1.28

million RON and means of transport worth 46 million RON.

6

Activity analysis - Description of the main

activity

Activity analysis - Activity general evaluation






Signatures:



Activity analysis


Evaluation of technical level

Evaluation of supply

Evaluation of sales

Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Export activity

The company carries out manufacturing and trade activities oriented

both to the domestic market and the foreign market.

In 2015, the share of domestic sales was 56.81%, while export sales

accounted for more than 43.19%


In 2015, the sales generated by the company they recorded a

significant advance of 26,63%, compared to the level recorded in the

previous financial year. Thus, net turnover registered in 2015 was of

837 million RON, compared to 661 million ON in 2014.

The Operational Activity maintained its growth trend in the year

2014 and in 2015, it recorded an advance of 26,55%, somewhat more

tempered, however, in relation to the increase of 43.53% in 2014.

In 2015, the income from operating activity was at the level of 842

million RON, compared to 665 million RON in 2014, while the operating costs increased from 625 million RON in 2014, to 771

million RON in 2015, repsectively by a porcentage of 23.24%.

If the operating result increased by 78.30% to 71 mil. RON, the

result from financing activity recorded a loss of 24 million RON,

through the increased banking fees related to financing contracted

products to provide linear cash flow. We note that the influence of the

financial result in its net result is much reduced compared to the

operating result contribution to the total achievements of the 2015.

In these conditions, profit for the financial year ended on 31

December 2015 was about 42 million RON, increased by 66%

compared to 2014 and by 100% compared to 2013, being recorded the

best year in the company history in terms of net result of the activity

performed.

7

Activity analysis - Activity general evaluation Analysis of activity - Evaluation of

technical level






Signatures:



Activity analysis




Evaluation of sales

Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

The liquidity level

According to the information on the company’s financial position on

31 December 2015, the general liquidity indicator is 1.02, giving a

satisfactory degree of certainty concerning the coverage of current

liabilities on account of current assets.

The liquidity levels are directly influenced by the company's

indebtedness by loans contracted to sustain the investment.

Annual report 2015


Main competitors

In recent years, the Romanian market developed positively in terms of

sales of the companies in the industry, thanks to the investments

made by the major players on the market.

ROMCAB’s major competitors on the Romanian market are: Coficab

Eastern Europe, ICME ECAB, Prysmian, Iproeb, Electroplast,

Cableteam, RCB Electro ’97, Energoplast, Top Electro, Elcom Cablaje,

Multicab Electro și Relee Mediaș.

An analysis of the global market reveals that ROMCAB positions on

the market with a share of 0.68%, a market dominated by well-known

players as PRYSMIAN, NEXANS or GENERAL CABLE.

8

Activity analysis - Activity general evaluation Analysis of activity - Evaluation of

technical level






Signatures:



Activity analysis




Evaluation of sales

Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Categories of products

The company is recognized for the company is recognized for quality

product quality products manufactured and marketed. The diversity

of ROMCAB’s products is reflected in covering a large share of needs

for the following product categories:

Cables and copper conductors isolated in PVC intended for:

electrical installations for civil, administrative and industrial

constructions, indoor or outdoor telecommunication

networks, ships facilities and infrastructure of railways,

mining applications and cable TV and antenna networks

Electrical wiring for: automotive initial equipment, initial

equipment of motorcycles, spare parts for the automotive

industry, power supply for the products from the “white

goods”category , industrial use

Cords for supply of electrical power to one or several electric,

electronic devices and household appliances, which include:

cords to plug with one or several sockets, with or without

rewinder, cords without plug, used by manufacturers of

electrical appliances, PVC injection molded parts for various

applications.

Competitive advantages of products

The company’s commercial policy is based on offering a package of

services that individualizes ROMCAB’s offer on the market, along

with a range of products linked to market requirements. Among the

main competitive assets of ROMCAB we may mention:

Romania’s great location between Poland and Turkey,

Germany and Russia, which has direct consequence in the

fact that ROMCAB products are competitive and are not

influenced by transportation costs

The company covers all processes involved in the production

of cables: it is the only company that manufactures both

wires (wire drawing - metallurgy), insulation (electrical-

technical) and transformation in cords

It has the possibility to achieve complex products and to

change the production flow more quickly from one type of

product to another; it may manufacture unique products,

new, alloys Cu, Al, Silver, with th modern equipment it has,

serving mainly the automotive market

The labor expenses ensure competitiveness, including in

comparison with the markets in the Far East, like China,

where logistics costs make it almost impossible that their

products should represent competition.

9

Activity analysis - Evaluation of technical

level

Analysis of activity - Evaluation of supply






Signatures:



Activity analysis




Evaluation of sales

Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Distribution channels

The principle followed by ROMCAB regarding the distribution of

products is made of manufacturer - consumer chain or manufacturer -

intermediate - consumer chain.

The most sales channels used were:

The channel of distributors of electrical materials - Romcab

products are delivered to the distributors’ warehouses or

stores of electrical articles, from where they are sent to the

end consumer

The channel of industrial consumers in various fields:

automotive, electronic and household - depending on the

type of industry where the ROMCAB products are sent,

automotive industry and electrical and household industry,

the products are part of the final products of industrial

consumers.

Channel of telecom operators - the production is achieved

based on special orders of telecom operators in servicing

their infrastructure development projects

Auction channel - the company has a team that constantly

seeks tenders that are launched and prepares offers to cover

as much as possible of the requested products at competitive

prices.

Structure of turnover by product category

In 2015, ROMCAB achieved operating incomes of 842 million RON.

Of their total, the revenue from the sale of finished products is 590

million RON (70% of total), and revenues from the sale of goods is 233

million RON (28% of total).

The structure of ROMCAB sales of 2015 by product category is as

follows:

Product Group (% of total

sales) Year 2013 Year 2014 Year 2015

Cables and wires 97.99% 96.45% 96.93%

Electrical wiring 0.11% 0.17% 0.02%

Products molded in PVC 1.90% 3.38% 3.05%

Total Sales 100% 100% 100%

10

Activity analysis - Evaluation of technical

level

Activity analysis - Evaluation of

personnel






Signatures:



Activity analysis




Personnel evaluation

Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Evaluation of technical and material supply

The main raw material used by the company in production is 8mm

copper wire, representing approximately 80% of total purchases.

9.5 mm aluminum wire represents about 8% of the total value of

purchases for the production flow.

In the electro areas, respectively injection of plugs on flexible cords,

insulation for cables and telephone cables and vehicle cables, as well

as for cover for the flexible cords and protection cover of general use

cables, PVC granules shall be used as raw material (polyvinyl chloride

and polyethylenes).

11

Activity analysis - Supply evaluation Activity Analysis - Risk Management






Signatures:



Activity analysis





Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Number of employees and skill level

In 2015, the average values of the company’s employees, compared to

2014, are as follows:

31 December

2015

31 December

2014

Annual average total employees 535 434

Annual average white collar

employees

152 130

Annual average blue collar

employees

383 304

From blue collar directly

productive

254 207

From blue collar indirectly

productive

129 97

ROMCAB uses a complex process for testing and selection of

employees, having various profiles for each job, and the candidates

must be compatible with them in order to be considered. ROMCAB’s

standard in employing quality personnel, with high qualifications,

skills and motivation to work to bring value and efficiency in the

company.

Inevitably, issues such as human resources, economic trends,

management but especially that technological processes evolve in

time, the staff is constantly trained and ready to meet new

requirements or expectations. These trainings or specializations are

carried out both at the company and by attending external training

courses offered by specialized companies in areas of interest.

Service providers and providers of newly acquired equipment make

available specialists for the training of ROMCAB personnel for the

proper use of the equipment or services provided.

The unionzation of the workforce

There is no organized union in the company. Instead, there are two

persons designated by the employees as "employee representatives"

who participate in formal negotiations or discussions.

Description of the relationship between management and

employees or conflicts

Legally, there are periodic negotiations of the collective agreement,

which take into account the views gathered for the employees, issues

of interest to them, different polls that take place and help the Human

Resources Department to observe any trends or satisfaction levels,

work standardization, new OSH rules.

Romcab wishes to be a transparent organization to its employees,

regardless of the hierarchical position that they occupy. The

communication is direct and less formal, so that any problems can be

understood and solved as quickly as possible. The company’s

management believes that there are no barriers of any kind between

hierarchical levels of the company.

12

Activity analysis - Evaluation of personnel Activity Analysis - Risk Management






Signatures:



Activity analysis





Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Risks related to the macroeconomic environment

Investment risk - Romania joined the European Union in

2007, but it is still an emerging market. Thus, Romania is still

developing its economic, political and legal systems, which makes

that an investment in Romania generates risks not typically associated

with investments in more developed countries. In general,

investments in countries such as Romania are suitable for

sophisticated investors who have the capacity and resources to assess

the risks associated with such investment

The risk of post-integration - The difficulties of post-

integration into the European Union can have a negative impact on

investment in Romania

Corruption in Romania continues to be at a high level, and

anti-corruption legislation, although well developed, despite progress

in recent years, is not yet a sufficiently effective tool in practice

Geopolitical context - The international situation and the

escalation of conflicts globally and regionally may influence the

economic development of the whole world, at European and regional

level, Romania having a relevant position as NATO member and as

member of the European Union, as it is located at the Southern-

Eastern border. Geopolitical context may have a negative impact on

the business and financial condition of the company, the company's

ability to perform its obligations

Resource management and absorption of EU funds - Despite

some progresses have been recorded, Romania will have to pay

greater attention to strengthening the administrative capacity for the

efficient management of budgetary resources and increase capacity to

absorb EU funds

Legislative instability - In most respects, the Romanian

legislation is harmonized with EU legislation, reflecting the imposed

recommendations and containing the guidelines and principles of the

Community acquis. However, changes in legislation, given that laws

and regulations are sometimes applied inconsistently and in certain

circumstances legal remedies cannot be obtained quickly enough, and

the complex and ambiguous tax system may affect the company's

business

Political and economic uncertainties - economic fluctuations

and inconsistency in the implementation of government policies,

respectively political and economic uncertainties may have a negative

impact on the business, financial situation and the company's ability

to perform its obligations

Risks related to capital market

The market price of the shares is volatile and may be

adversely affected by future sales of shares on the open market

A suspension of trading of the shares could negatively affect

the share price

Stocks traded on BVB are less liquid and more volatile than

those traded on larger financial markets

13

Activity Analysis - Risk Management Activity Analysis - Risk Management






Signatures:



Activity analysis





Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


Specific hazards ROMCAB

A) Market risk

Currency risk - The company is exposed to the currency risk

through exposure to different currencies, particularly the US dollar

and Euro. Currency risk is associated to assets and liabilities

recognized. But the company is covered in terms of currency risk,

having a natural hedging policy to mitigate these effects.

Price risk - The company is exposed to price risk for

purchased copper for cables production, but this risk is entirely

transferred its contractual customers, through the mechanism for

setting the selling price that reflects true price of this metal market

developments.

Interest rate risk on cash flow and fair value - the company is

exposed to interest rate risk through its long-and short-term

borrowings, most of which have variable rates. Tracking the interest

rate currently occurs but, as far as possible preventively, so that action

can be taken when the situation demands it. There is a department

with direct responsibility in negotiation and renegotiation of the

interest levels applied when market conditions require.

B) Credit risk

Credit risk is mainly related to cash and cash equivalents and trade

receivables. The company has developed a number of policies whose

application shall ensure that sales of products and services are made

to customers with low risk for collection.

C) Liquidity risk

Prudent liquidity risk management implies maintaining

constantly a positive cash flow and the availability of funding through

an adequate committed credit facilities in line with the company’s

needs.

The company foresees cash flows. The company's financial

function continuously monitors the liquidity requirements of the

company to ensure that there is sufficient cash for working capital, so

the company does not violate the limits or loan agreements. These

forecasts take into account the company plans to finance working

capital, compliance agreements, compliance with internal objectives

relating to balance sheet indicators, all under the umbrella of external

regulations and legal requirements.

14

Activity Analysis - Risk Management Tangible assets






Signatures:



Activity analysis





Risk management

Tangible assets

Securities market

Company management

Company management


Conclusions

The impact of ROMCAB’s activities on the environment

Romcab has implemented and certified an integrated management

system which also includes ISO 14001: 2004 standard, to develop and

implement environmental policy and to manage environmental

issues.

Both production facilities of ROMCAB were authorized for operation

by the Environmental Protection Agency. Environmental permits in

force issued by the Environmental Protection Agency Mureș are:

Authorization no. 141 of 30.03.2009 (revised on 05.02.2015)

for the site in Voinicenilor Street;

Authorization no. 132 of 06.06.2013 for the site in the town

Acăţari.

The verification of compliance with the environmental requirements

was performed in January 2015 and February 2016, by the

Environmental Authority, as no nonconformities are recorded. The

sequence of technological operations used in the manufacturing of

cables and electrical conductors represents a specific process of the

cable industry, integrated with specific manufacturing operations for

the main product groups.

Most facilities and equipment are new or modernized and meet the

requirements of environmental protection and labor health and safety.

A sustainable business development is part of the company’s policy

and further includes ambitious plans for modernization of equipment

and production machinery in terms of performance and energy

consumption.

The activities carried out at both sites do not have significant

environmental impacts:

Both sites have the necessary authorizations and the requirements

thereof are complied with. For the manufacturing section in Acăţari,

thanks to the use of natural water resources, there is a water

management authorization. For the production department in

Tîrgu Mureş, there is a contract with the operator of the municipal

networks for water supply and sewage, which sets conditions for

discharge of waste water. Waste water and rainwater are treated

and eliminated. The management of waste and chemicals is done

properly

The dangers of soil and water contamination are removed

The noise is within normal parameters

Monitoring of emissions and the status of compliance are

performed

Through the work done, both employees and the environment are

not exposed to any source of radiation

Environmental monitoring: The monitoring of the environmental

factors shall be made through regular analysis of environmental

factors and maintenance of the updated records of waste

management, as well as control actions undertaken by the

Environment Authority, Water Management System

Records of management packs are according to HG no. 856/2002.

The company signed a contract with a company for pick up and

recycling of packaging waste and the data reporting requirements

on packaging and packaging waste.

Annual report 2015


15

Activity Analysis - Risk Management Securities market






Signatures:



Activity analysis

Tangible assets

Production capacity

The wear of properties

Risks - right of ownership

Securities market

Company management

Company management


Conclusions

Locating production capacities

The company operates under the two production platforms,

respectively the platform from Tîrgu Mureș, Voinicenilor Street and

the platform from Acățari, located about 10 km from Tîrgu Mureș.

The wear of properties

The degree of wear of the property owned by the company does not

present significant problems of carrying out the activity.

Property rights risks

There are no problems regarding the ownership of tangible assets

owned by the company.

Acățari Platform

Annual report 2015


Tîrgu Mureș Platform

16

Tangible assets Management of the company/Corporate

Governance






Signatures:



Activity analysis

Tangible assets

Securities market

Company management

Company management


Conclusions

Annual report 2015


ROMCAB at the stock exchange

Trading symbol MCAB

Trading market REGS, of 26.10.2015

Transactions in 2015 6,746

Transactions in 2016 1885 (including 25.04.2016)

Volume traded in 2015 2,072,679 shares (22% of CS)

Maximum price 2015 10,25 RON / share (02.11.2015)

Minimum price 2015 4,67 RON / share (05.02.2015)

Current price 7,90 RON / share (25.04.2016)

Current capitalization 74,15 mil RON (16,4 million

EUR)

Shareholders structure on 31 December 2015

According to the synthetic consolidated structure issued by

“Depozitarul Central SA” on 28 December 2015, the shareholding of

ROMCAB was as follows:

Name of the holder Number of

shares

Percentage

(%)

SADALBARI SRL 6,479,143 69,0294

Individuals 1,895,356 20,1933

Legal entities 1,011,567 10.7773

TOTAL 9,386,066 100,0000

Total number of shareholders: 723

Share capital: 23.465.165 RON

Nominal value: 2,5 RON / share

Shares in other companies

According to the statements of the management and as shown in the

financial statements for the financial year ended on 31 December 2015,

ROMCAB does not have any shares in other companies.

Policy for granting of dividends

ROMCAB did not distribute dividends to its shareholders, the net

profit recorded during the activity remaining in the company.

Share buy-back policy

In 2015, the company did not resort to the recovery its own shares.

17

Securities market Financial situation - financial position






Signatures:



Activity analysis

Tangible assets

Securities market

Company management


Financial situation

Conclusions

The purpose of the code is to create in Romania a capital markets

attractive internationally, on the basis of the best practices,

transparency and confidence. The code encourages companies to

build a strong relationship with their shareholders and other interest

holders (stakeholders) to communicate effectively and transparently,

and to demonstrate openness towards all potential investors.

The objective of the corporate governance code of the Bucharest Stock

Exchange is to enhance confidence in the listed companies through

the promotion of improved standards of corporate governance in

these companies.

Statement regarding the fulfillment of the principles of corporate

governance

ROMCAB complies with the relevant principles of corporate

governance applicable to issuers on the regulated market of BVB, as

regards the communication with investors, the integrity of the

financial reporting process and the effectiveness of internal controls.

For the current year, the issuer intends to formalize the corporate

governance processes and to review the conditions of conformity, as

they are described in the BVB Code of corporate governance

applicable to issuers traded on the main segment, standard category

of BVB.

(Additions in annex 1 to the Report)

Company management

In accordance with the provisions of the articles of incorporation of

ROMCAB, the management of the company is exercised by the

General Assembly of the shareholders and the company’s Board of

Directors, elected for 2-year mandate.

The company’s Board of Directors is composed of 3 Directors

appointed by the Ordinary General Assembly of the Shareholders.

On 31 December 2015, as well as on the date of this report, the

members of the Board of Directors are:

Member of the Board of Directors Position

Sebastian Teodor-Gheorghe Vlădescu Chairman

Zoltan Prosszer Director

Lucia Maria Oanea Director

Executive management of the company is ensured by Mr. Zoltan

Prosszer as General Manager, Mr. Gombos Geza Csaba, Operational

Manager, and Mrs. Dana Nețoi Economic Manager.


Bucharest Stock Exchange launched, on 11 September 2015, the new

corporate governance code of the stock exchange. The document

includes a set of principles and recommendations for companies

whose shares are admitted to trading on a regulated market.

Annual report 2015


18

Company’s management / Corporate

governance

Financial situation - financial position






Signatures:



Activity analysis

Tangible assets

Securities market

Company management


Financial situation

Financial position

Financial performance

Conclusions

Situation of the financial position for the financial year ended on 31 December 2015 -

Shares

Indicators of the financial

position

(Values expressed in RON)

31

December

2013

31

December

2015

31

December

2014

Evolution

2015 /2014

(%)

Fixed Assets

Intangible Assets 1,480,015 1,443,136 1,452,755 - 0,66%

Tangible assets: 144,990,508 234,898,098 187,019,723 +25,60%

Total fixed assets 146,470,523 236,341,234 188,472,478 +25,40%

Current assets

Inventories 130,427,251 446,140,406 305,330,759 +46,12%

Trade receivables and other

receivables

189,527,929 230,241,408 137,030,979 +68,02%

Collateral deposits 4,236,972 4,683,938 3,122,898 +49,99%

Cash and cash equivalents 912.102 8,225,830 26,911,262 - 69,43%

Total current assets 325,104,254 689,291,582 472,395,898 +45,91%

Total assets 471,574,777 925,632,816 660,868,376 40,06%

Evolution of assets

Continuing investment led the tangible assets to a

net value of 234 million RON, marking

an increase by 25.6% compared to year 2014

The current assets increased by 45,91%, based on

the increase in stocks of raw materials and products

by 46% and increase in claims by 68%

Collateral deposits also marked a significant

increase, by 50%, but the share in total

current assets is insignificant

Cash and cash equivalents decreased by 69%, from

27 million RON in 2014, up to 8 million RON

by the end of 2015

Annual report 2015


19

Financial situation - financial position Financial situation - financial position






Signatures:



Activity analysis

Tangible assets

Securities market

Company management


Financial situation

Financial position


Conclusions

Situation of the financial position for the financial year ended on 31 December 2015 -

Capitals and debts

Indicators of the financial position


31

December

2013

31

December

2015

31

December

2014

Evolution

2015 /2014

(%)

Equities

Share capital 42,967,568 42,967,568 42,967,568 +0,00%

Retained earnings 39,526,831 100,320,673 55,524,694 +80,68%

Reassessment reserves 7,245,972 21,330,080 6,197,789 +244,16%

Total equity 89,740,731 164,618,321 104,690,051 +57,24%

Long term debts

Trade debts and other debts 5,900,655 21,812,420 32,334,903 - 32,54%

Loans 48,485,631 22,346,702 47,480,750 - 52,94%

Financial lease 4,728,569 14,682,162 4,139,884 254,65%

Income in advance 18,791,954 19,844,833 44,413,481 - 55,32%

Debts related to the postponed tax

on profit

2,357,438 3,361,146 1,547,860 117,15%

Total long term debts 80,264,247 82,047,263 129,916,878 - 36,85%

Short term debts

Trade debts and other debts 119,685,600 354,303,533 205,074,302 +72,77%

Loans 175,014,397 311,367,969 216,499,679 +43,82%

Financial lease 2,248,641 7,967,292 3,588,485 +122,02%

Income in advance 2,380,467 3,508,571 1,046,528 +235,26%

Debts related to the postponed tax

on profit

2,240,694 1,819,867 52.453 +3369,52%

Total short term debts 301,569,799 678,967,232 426,261,447 +59,28%

Total equity and liabilities 471,574,777 925,632,816 660,868,376 +40,06%

The evolution of debt and capital

Total debts greater by 37%, based on the contracting of new

short-term loans or supplement of credits already

given, as well as the increase in the balance of the

commercial debt

Debts to the suppliers having maturity less than 1 year

increased from 205 million RON to 354 million RON, i.e.

with a share of over 70%

The balance of long-term loans diminished by a percentage

of 53%, up to a value of 22 million RON

The revaluation reserve increased by 3.4 times in 2015

compared to 2014

Equity of the company increased up to 165 million RON, i.e.

by a percentage of 57%

Annual report 2015


20

Financial situation - financial position Financial situation - financial performance






Signatures:



Activity analysis

Tangible assets

Securities market

Company management


Financial situation

Financial position


Conclusions

Annual report 2015


Situation of the profit and loss account for the year ended on 31 December 2015

Indicators of the profit and loss account


31

December

2013

31

December

2015

31

December

2014

Evolution

2015 /2014

(%)

Incomes from the sale of finished products 304,275,220 590,063,209 449,776,659 +31,19%

Incomes from the sale of goods 153,547,268 233,020,095 200,599,629 +16,16%

Other incomes 7,009,805 19,385,473 15,322,183 +26,52%

Expenses with raw materials and

consumables

(245,864,225) (451.069.612) (346,715,758) +30,10%

Expenses with merchandise (144,737,692) (230,887,132) (192,816,300) +19,74%

Expenses with personnel (13,746,997) (25,251,730) (21,043,283) +20,00%

Expenses with depreciation and

depreciation of assets

(7,133,425) (12,536,285) (7,896,638) +58,75%

Value adjustments on current assets (411.419) 4,508,676 (11,811,532) N/A

Other operational expenses (17.903.818) (55.921.804) (45.419.683) 23,12%

Operating profit 35,034,717 71,310,890 39,995,277 +78,30%

Financial income 42.794 26.000 88.561 - 70,64%

Financial costs (12,281,245) (24,433,349) (20,465,141) +19,39%

Net financial costs (12.238.451) (20,407,349) (20,376,580) +19,78%

Profit / loss before taxation 22,796,266 46,903,541 19,618,697 +139,08%

Income tax costs (2,177,953) (4,773,348) (3,782,052) +26,21%

Profit/loss for the year 20,618,313 42,130,193 15,836,645 +166,03%

The evolution of debt and capital

Revenue from the sale of finished products in

significant increase by 31%

Higher operational income by 27%, on the one hand,

due to the increase in sales of all types of products

(goods, finished products, other income)

Operational costs increased noticeably less than the

percentage of operational revenue, the percentage of

23% consolidating the advance of the operational

result up to the level of 71 mil RON, respectively an

increase by 78% compared to the previous period

The profit before taxation in 2015 was 47 million RON,

increased by 139% over the level of 19.6 million RON

recorded in 2014

21

Financial situation - financial performance






Signatures:



Activity analysis

Tangible assets

Securities market

Company management


Financial situation

Financial position


Signatures:

Chairman of the Board of Directors

Mr. Sebastian Teodor Gheorghe Vlădescu

Annual report 2015


This annual report was drawn up on 29 April 2016 and filed with ASF and BVB on 30 April 2016, being countersigned by the authorized

representative of the Board of Directors, by the Executive Manager and the Economic Manager of the company.

On 31 December 2015, ROMCAB S.A. did not have subsidiaries, the information presented in the annual report being presented with reference to

the individual patrimony situation according to RAS, on the mentioned date.

annual report 2015 - romcab audit 2015 ifrs... · this report was prepared on 29 april 2016 and was...

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