Čgs holding a.s. annual report 2015 - rubena.eu. the most important ... 7 costs related to the...

Č G S H O L D I N G a . s .A n n u a l R e p o r t 2 01 5

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C o n t e n t s

Introduction 5Main Financial Indicators 6Company Profile 9Statutory Bodies of the Core Companies 13Location of ČGS Companies 14Mitas 16Rubena 22Savatech 28Independent Auditor’s Report on Verification

of the Consolidated Annual Financial Statement 34Consolidated Balance Sheet 36Consolidated Profit and Loss Statement 40Subsidiaries of ČGS HOLDING a.s. 42Contact Information 43

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Dear business partners,

Last year was a successful year for the ČGS group interms of financial results. We continued to strengthenour position on the market of special tyres andindustrial polymer solutions. The ongoing developmentprograms supported a stable level of achieved revenues.The companies also successfully reduced theirfixed expenses and maintained low financing costs. Thefinancial result was also positively influenced by thereduced price level of production inputs, in particularrubber materials.We continued our implementation of extensive investments into modernising production facilities, andexpanded our portfolio of export destinations also in2015. The most important investment projects includedthe purchase of a production line for all-steel radialtyre for forklifts, the introduction of in-house productionof rubber-coated steel cords and the expansion ofour development and testing centre. As regards the

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I n t r o d u c t i o n

environment, we invested into modernising the energybase for steam production, with emission reductionbeing one of the objectives, and we optimised ourelectricity consumption. Another major investmentfocussed on improving the working environment. We paidspecial attention to the issue of social responsibilityand sustainability, as these are a natural part of oureveryday work rather than mere empty phrases.The financial results have confirmed the ČGS group seconomic stability and opened doors to acquisitionopportunities. In November 2015, ČGS HOLDING a.s.shareholders concluded a contract to sell all their sharesto Trelleborg AB. This business transaction is subject toconsent from the relevant competition protectionauthorities and should be finalised in the first half of2016. Once the merger is approved, we will be facedwith the challenging process of integration involvinga number of extensive transformation activities. We firmlybelieve we will complete this successfully and thussignificantly strengthen the Trelleborg group, whichalready leads the ranks in a number of industrial sectors.

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Key Indicators of ČGS from 2013—2015, consolidated data

Key Indicators of ČGS from 2013—2015, consolidated data

Thousands CZK

Sales thousands

exports thousands

Value added thousands

Staff costs thousands

Depreciation thousands

Operating profit thousands

Profit in the accounting period thousands

Assets thousands

Liabilities thousands

Equity thousands

Full-time employees recalculated

Ratio indicators

Sales/full-time employees thousands

Value added/full-time employees thousands

Profit/equity (ROE)

Liabilities/assets

Sales/equity

Thousands EUR

CZK/EUR exchange rate

Total sales thousands

exports thousands

Value added thousands

Operating profit thousands

Profit in the accounting period thousands

Assets thousands

Liabilities thousands

Equity thousands

2013 2014 2015

16,746,575 16,803,442 16,304,783

14,986,099 15,339,810 14,743,686

5,921,459 6,506,901 6,692,023

2,903,500 3,083,062 3,120,075

628,566 632,400 652,053

2,249,839 2,689,076 2,614,706

1,697,640 2,108,601 1,939,926

14,054,148 14,092,895 14,594,651

6,827,855 4,673,236 3,731,717

7,044,738 9,204,089 10,671,293

6,233 6,352 6,322

2,687 2,645 2,579

950 1,024 1,059

% 24 23 18

% 49 33 26

% 238 183 153

2013 2014 2015

27.425 27.725 27.025

610,632 606,075 603,322

546,439 553,284 545,557

215,915 234,694 247,623

82,036 96,991 96,751

61,901 76,054 71,783

512,458 508,310 540,043

248,965 168,557 138,084

256,873 331,978 394,867

M a i n F i n a n c i a l I n d i c a t o r s

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Costs related to the acquisition of fixed assets — Investments

MITAS a.s. 264,102

Mitas d.o.o. ( ) 29,451

Mitas Tires North America, Inc. 31,163

IGTT a.s. 39,806

RUBENA a.s. 159,791

SICO RUBENA s.r.o. 20,799

RUBENA Mexico 69,559

SAVATECH d.o.o. 139,881

754,552

Thousands CZK Total

Serbia

Total

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ČGS HOLDING a.s. is a company with a broad portfolioof rubber production.

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ČGS HOLDING a.s. is a dynamically developing holdingcompany based in the Czech Republic, with acomprehensive portfolio of rubber products. It employsalmost 6,500 people around the world and operates13 plants, 11 of which are in Europe, one in the USAand one in Mexico.

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The ČGS group is structured into two divisions. The coreof the tyre division is MITAS a.s., which generates abouttwo thirds of ČGS HOLDING’s revenues. MITAS a.s. isone of the world’s leading manufacturers of agriculturaltyres. It also produces and distributes a wide range ofindustrial tyres, motorcycle and bicycle tyres. Thisdivision also includes the joint-stock company IGTT,which produces moulds for the rubber industry andspecialises in certification tests tyreMITAS a.s. operates three production plants in theCzech Republic, one in Serbia and one in the USA, andmaintains business offices in Great Britain, USA,Australia, Brazil, Mexico, Germany, Netherlands, Austria,France, Italy, Spain, Switzerland, Finland and Russia.The technical rubber division is represented by RUBENAa.s. and SAVATECH d.o.o. RUBENA a.s. operates inHradec Králové, Náchod, Zlín and Mexico and producesa wide range of industrial polymer solutions, such as

, cuffs, various types of rubber sealing, bushing,dusters, covers, connecting elements, belts and other

products for the automotive, building and electricalengineering industries. RUBENA a.s. also produces awide portfolio of rubber-metal and rubber-textile products,such as sealing and lifting bags, rubber , floodprevention walls, aircraft tanks, various types of bellows,couplings and membranes. The production of bicycletubes and bicycle tyres under the Mitas brand is anequally important segment. The range is supplementedby rubber coating for rollers, rubber mixtures and pucks.RUBENA a.s. has foreign branches in Bulgaria, Slovakiaand Mexico. The joint Czech and German venture SICORUBENA s.r.o. specialises in processing silicon rubbers.SAVATECH d.o.o. produces rubber , conveyorbelts, rubber profiles, printing technology,

, motorcycle and scootertyres and . SAVATECH d.o.o. has its mainproduction plant in Kranj, and also producers in Ptuj,Slovenia and in Zagreb, Croatia. The company has fiveretail branches.

dams

compounds

moulded parts

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environmentalprotection and rescue products

ČGS HOLDING a.s. is a company with a transparentholding structure, which upholds strict ethical standardsincluding sustainable company policies aimed at responsible social behaviour and environmental protection.Focus on modern technologies, responsible resourcemanagement and the occupational health and safety ofemployees are a matter of course.

C o m p a n y P r o f i l e

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ČGS HoldingSelected consolidated data for the period of 2006—2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

11,048,717 10,913,312 11,488,807 8,682,829 10,783,811 13,857,489 13,773,743 16,746,575 16,803,442 16,304,783

3,398,221 3,454,789 3,737,110 3,253,602 3,585,318 3,501,466 4,282,736 5,921,459 6,506,901 6,692,023

607,668 724,453 719,894 390,169 579,848 446,216 1,415,384 2,249,839 2,689,076 2,614,706

6,187 6,021 5,858 5,430 5,457 5,885 5,331 6,233 6,352 6,322

Thousand CZK

Total sales

Value added

Operating profit

Employees

Treasury and risk management

On a consolidated basis, in terms of financial risks,ČGS HOLDING a.s. is primarily exposed to fluctuationsin forex rates due to the export and import operations ofindividual companies in the group. The natural balancingof exchange rate differences from expenses and revenuesreduces these risks. The strategic diversification ofproduction units also contributes to mitigating this risk.The CNB’s intervention policy, which limited thefluctuation of the EUR/CZK rate, also had a majorimpact on reducing the risk. The outstanding openposition is secured using financial instruments witha timeframe over the next 12 to 24 months. Hedging iscontracted on an ongoing basis based on existing andexpected (planned) contracts in foreign currencies.Currency forwards, alternatively currency options, arethe primary hedging instruments. Towards the end of2013, it was decided that a hedge account would nolonger be used for most transactions, and during 2015derivatives were fully classified as trading transactionswith revaluation entered into the P&L statement.

The ČGS group hedges against interest rate risk usingIRS derivative operations and interest options. In 2015,most hedging was terminated given the repayment ofalmost all loans, which had a slight negative impact onthe financial result. For the outstanding interest riskhedging transactions, the change in the market value isentered in the profit/loss as in previous years.During 2015, no further hedging operations to limitcommodity risk were concluded, given the continuingdecline of commodity markets. As in the previous years,hedging for 2016 and 2017 is accounted as profit orloss as at the balance date and after settlement it isaccounted as an expense for the implementationperiod of the corresponding energy expense (2016 andfollowing).In terms of risk management, ČGS acts as the controlunit providing central risk and treasury managementservices to the other companies. These services includethe negotiation and management of insurance contractsfor operating risk (natural disasters, machinery, liability)and monitoring and managing credit risk.

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Mitas 61Rubena 18Savatech 21

Czech Republic 10Western Europe 55Eastern Europe 21Africa and Asia 5North and South America 9

2015 revenues by territory in % 2015 revenues by division in %

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ČGS HOLDING a.s. is a progressive company witha transparent and clearly defined structure.

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Č

č

Č

GS HOLDING a.s.

nost s.r.o.

GS a.s.

MITAS a.s.

Board of Directors

Supervisory Board

Executives

Board of Directors

Supervisory Board

Board of Directors

Supervisory Board

Chairman — Tomáš NěmecVice-Chairman — Oldřich ŠlemrMember — Věra Bechyňová

Lubomír Svátek, Petr Čepek, Hana Černá

Tomáš Němec, Oldřich Šlemr

Chairman — Tomáš NěmecVice-Chairman — Oldřich ŠlemrMember — Věra Bechyňová

Lubomír Svátek, Petr Čepek, Hana Černá

Chairman — Jaroslav ČechuraVice-Chairman — Josef Křeme ek, Andrew Mabin

Tomáš Němec, Oldřich Šlemr, Michaela Soukupová

Česká gumárenská spole

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S t a t u t o r y B o d i e s o f t h e C o r eC o mp a n i e s a s a t 31 D e c e m b e r 2 015

RUBENA a.s.

IGTT a.s.

Mitas Antikor, spol. s r.o.

Board of Directors

Supervisory Board

Board of Directors

Supervisory Board

Confidential clerks

Executives

Confidential clerks

Chairman — Rudolf PecaVice-Chairman — Michal KubečekMember — Pavel Kment


Chairman Marek BrázdaVice-Chairwoman Eva HamelováMember Leoš Zámoravec

Josef Křeme ek, Petr Sliž


Olga Mužíková, Jindřich Burda, Miloš Šimůnek


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1 4 | Č G S 2 0 1 5

P r a g u e , Č G S H O L D I N G a . s . , Č G S a . s . ,Č e s k á g u m á re n s k á s p o l e č n o s t s . r. o . ( c o mp a ny m a n a g e m e n t ) ,M I TA S a . s . ( Ty r e D i v i s i o n ) ,M i t a s A n t i k o r , s p o l . s r . o . ( o t h e r c o m p a n i e s )

M i l č i c e , S AVA T R A D E , s p o l . s r. o . ( Te c h n i c a l Ru b b e r D i v i s i o n )

Ve l k é Po ř í č í , S I C O RU B E N A s . r. o . ( Te c h n i c a l Ru b b e r D i v i s i o n )

N á c h o d , R U B E N A a . s . ( Te c h n i c a l R u b b e r D i v i s i o n )

H r a d e c K r á l o v é , R U B E N A a . s . ( Te c h n i c a l R u b b e r D i v i s i o n )

Z l í n , M I TA S a . s . , I G T T a . s . ( Ty r e D i v i s i o n ) ,R U B E N A a . s . ( Te c h n i c a l R u b b e r D i v i s i o n )

O t r o k o v i c e , M I TA S a . s . ( Ty r e D i v i s i o n )

L o c a t i o n o f Č G S C o m p a n i e s

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G e r m a n y , H a n n o v e r , M i t a s G m b H ( Ty r e D i v i s i o n )G e r m a n y , M u n i c h , S a v a Tr a d e G m b H ( Te c h n i c a l R u b b e r D i v i s i o n )

A u s t r i a , Tr a i s k i r c h e n , M i t a s G m b H ( Ty r e D i v i s i o n )

I t a l y , S a r o n n o , M I TA S S . R . L . ( Ty r e D i v i s i o n )

F r a n c e , D i j o n , M i t a s S A R L ( Ty r e D i v i s i o n )

S p a i n , M a d r i d , M I TA S T Y R E S , S . L . ( Ty r e D i v i s i o n )

G r e a t B r i t a i n , K i n g ’ s Ly n n , M I TA S T Y R E S L I M I T E D ( Ty r e D i v i s i o n )G r e a t B r i t a i n , S u r r e y , S AVAT EC H T R A D E L I M I T E D ( Te c h n i c a l R u b b e rD i v i s i o n )

S w i t z e r l a n d , F l a w i l , M i t a s G m b H ( Ty r e D i v i s i o n )

M a l t a , Ta ’ X b i e x , C G S A U T O L I M I T E D ( Ty r e D i v i s i o n ) ,S l i e m a , C G S T Y R E S L I M I T E D ( Ty r e D i v i s i o n )

J e r s e y , S t . H e l i e r , C G S T Y R E S L I M I T E D ( Ty r e D i v i s i o n )

S l o v a k i a , P r e d m i e r, R U B E N A S l o v a k i a a . s . ( Te c h n i c a l R u b b e r D i v i s i o n )

B u l g a r i a , P l o v d i v , R U B E N A B a l k a n , O O D ( Te c h n i c a l R u b b e r D i v i s i o n )

S e r b i a , R u m a , M i t a s d . o . o . ( Ty r e D i v i s i o n )

R u s s i a , M o s c o w, M i t a s O O O ( Ty r e D i v i s i o n )R u s s i a , Ya r o s l a v l , O O O S a v a r u s ( Te c h n i c a l R u b b e r D i v i s i o n )

H o l l a n d , U d e n , M I TA S Ty r e s B . V. ( Ty r e D i v i s i o n )H o l l a n d , A m s t e r d a m , C G S Ty r e s H o l d i n g B . V. ( Ty r e D i v i s i o n )

F i n l a n d , Ta m p e r e , M i t a s a . s . ( Ty r e D i v i s i o n )

S l o v e n i a , K r a n j , S AVAT EC H d . o . o . , S AVA P R O , h o l d i n g d . o . o . ,S AVA M E D I C A L I N S T O R I T V E , d . o . o . ( Te c h n i c a l R u b b e r D i v i s i o n )

C r o a t i a , Z a g r e b , S AVA - R O L d . o . o . ( Te c h n i c a l R u b b e r D i v i s i o n )

Ty r e D i v i s i o n

B r a z i l , V i t ó r i a , M I TA S d o B R A S I L L t d a . ( Ty r e D i v i s i o n )

U S A , C h a r l o t t e ( N C ) , M i t a s T i r e s N o r t h A m e r i c a , I n c .C h a r l e s C i t y ( I A ) ( Ty r e D i v i s i o n )U S A , D a y t o n a B e a c h , S AVAT EC H C O R P. ( Te c h n i c a l R u b b e r D i v i s i o n )

M e x i c o , A g u a s c a l i e n t e s , M i t a s , S . d e R . L . d e C . V. ( Ty r e D i v i s i o n )M e x i k o , S i l a o , C G S A u t o m o t i v e d e M é x i c o , S . d e R . L . d e C . V.( Te c h n i c a l R u b b e r D i v i s i o n )

Po l a n d , M i l a n ówe k , S AVA T R A D E s p . z . o . o . ( Te c h n i c a l Ru b b e r D i v i s i o n )

A u s t r a l i a , W i l l i a m s t o w n V i c t o r i a , M i t a s Ty r e s A u s t r a l i a P t y L t d( )

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The key business activity of the Mitas tyre divisionis the production and sale of tyres for agricultural andconstruction machinery, forklifts, off-road and sportmotorcycles.

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M i t a s

1. Basic description of the activityand organisation of Mitas’ tyre division

Description of activity

Organisational structure

Production units:

Test centre and curing-mould manufacturing

MITAS a.s. provides managementfor the following companies

Sales companies and branches

Europe

America

Australia and Oceania

The key business activity of the Mitas tyre division isthe production and sale of tyres for agricultural andconstruction machinery, forklifts, off-road and sportmotorcycles.

Prague (CZ) manufacturing of agricultural and industrialtyresZlín (CZ) — manufacturing of agricultural, industrial andmotorcycle tyresOtrokovice (CZ) — manufacturing of agricultural tyresRuma (Serbia) — manufacturing of agricultural andindustrial tyresCharles City (Iowa) — manufacturing of radial agriculturaltyres

Zlín (CZ) — IGTT a.s.

MITAS d.o.o., Ruma, Serbia CGS Tyres Holding B.V.

Australia, Austria, Finland, France, Germany, Italy, Russia,Spain, Switzerland, the Netherlands, the United Kingdom

Mexico, USA and Canada

Australia (since 1 October 2015)

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,

Composition of the Board of Directorsas at 31 December 2015

Composition of the Supervisory Boardas at 31 December 2015

Agricultural tyres

Industrial tyres

Jaroslav Čechura, chairmanAndrew Mabin, vice chairmanJosef Křemeček, vice chairman

Tomáš Němec, member of the Supervisory BoardOldřich Šlemr, member of the Supervisory BoardMichaela Soukupová, member of the Supervisory Board

In 2015, the tyre division continued with excellentfigures and reached positive business results despitethe total annual sales for agricultural and industrialtyres in 2015 being lower than in 2014. Highly positivecash flow enabled the continuation of many developmentand investment projects.

MITAS a.s. sales on the agricultural tyre market inEurope were better in the first half of 2015. Lower salesin the second half were caused mainly by thetraditionally weaker months (August till December).Tyre sales to original equipment manufacturers inEurope didn t fully recover. Production and machinerysales in Europe remained reduced against 2014 but inregions outside Europe, especially in North Americaand Russia, we saw a slight improvement in machineryproduction and sales especially in lower HP machines.Sales figures in these regions were higher comparedwith 2014. Despite the strong competition on theagricultural tyre market and their aggressive pricingpolicies, the market share position of MITAS a.s.improved during 2015.

The overall sales of MITAS a.s. on the industrial tyremarket were a slightly lower than in 2014. These

2. Development of the company in 2015

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1 8 | Č G S 2 0 1 5

decreased figures were influenced mainly by thereplacement market but, for example, in France and theCzech Republic, we saw a slight increase of salescompared with 2014. The situation of original equipmentmanufacturers showed improvement for MITAS a.s. inthat we saw an increase of sales, especially thanks tonew contracts in Russia.

There was further positive growth on the motorcycletyre market and in sales of motorcycles compared with2014. The West European market kept the same figuresas in 2014, but we saw better sales in Eastern Europeand in regions outside Europe.

In 2015, Europe remains the dominant market, accountingfor more than 80% of total sales; North and SouthAmerica are at 8%, Russia remains at 4%, and ROW(rest of the world) has around 8%.In 2015, MITAS a.s. fully focused on the successfulexecution of its brand strategy. By the end of 2014,MITAS a.s. had announced its long-term aim to focus onits own brands, Mitas and Cultor. As part of this brandstrategy, MITAS a.s. launched the Mitas Premium tyreline. Mitas Premium replaced all Continental-brandedtyres on new machinery produced by original equipmentmanufacturers (OEMs) as of Q1 2015. The successfullaunch of Mitas Premium was confirmed by the fact thatall major OEMs accepted Mitas Premium tyres andmounting them on their new machinery. Throughout theyear, MITAS a.s. prepared for the launch of MitasPremium on the replacement market, as well, whichstarted in January 2016. Since then, Mitas Premiumtyres are delivered to Mitas dealers, where theysubstitute Continental-branded tyres. The launch wasannounced in November 2015 at the Agritechnica fair,and from January 2016 Mitas Premium tyres aredelivered as a replacement for Continental tyres tocustomers on the replacement market.The second brand in the MITAS a.s. portfolio is Cultor.At the Agritechnica 2015 fair in Hannover, Germany,MITAS a.s. announced the launch of Cultor RD radialagricultural tyres. The Cultor RD tyre range is a substitution for Mitas RD and draws on the performance ofMitas RD, which are no longer included in the Mitasbrand portfolio. MITAS a.s., which produces Cultor at its

Motorcycle tyres

3. Sales and marketing

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Industrial tyres 19Agricultural tyres 69Truck tyres 1Motorcycle tyres 6Compounds and others 5

Sales structure for 2015 basedon individual territories (in %)

Sales structure for 2015 based on givenproduct assortments (in %)

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Selected indicators of the Tyre Division — data consolidated within the division

Selected indicators of the Tyre Division

Thousands CZK

Sales share of the entire Group

Total revenues thousands

export revenues thousands

Added value thousands

Personal expenses thousands

Depreciations thousands

Operational economic result thousands

Economic result for the accounting period thousands

Assets thousands

External resources thousands

Company capital thousands

Employees recalculated

Proportional indicator

Revenues/recalculated number of employees thousands

Added value/recalculated number of employees thousands

Economic result/company capital (ROE)

External resources/assets

Revenues/company capital

Thousands EUR







Assets thousands



2013 2014 2015

% 65.36 62.90 60.68

10,988,666 10,679,423 10,021,739

9,960,278 9,758,201 9,090,007

3,807,286 4,144,202 4,020,663

1,598,521 1,693,980 1,702,557

397,185 392,027 391,395

1,646,568 1,997,239 1,701,547

1,287,062 1,605,698 1,215,317

8,826,329 8,206,665 9,082,736

3,866,637 2,444,912 2,335,137

4,792,712 5,578,697 6,572,263

3,392 3,390 3,354

3,240 3,150 2,988

1,122 1,222 1,199

% 27 29 18

% 44 30 26

% 229 191 152

2013 2014 2015

27.425 27.725 27.025

400,681 385,191 370,832

363,182 351,964 336,355

138,825 149,475 148,776

60,039 72,037 62,962

46,930 57,915 44,970

321,835 296,002 336,086

140,989 88,184 86,407

174,757 201,215 243,192

plants in Europe, offers 46 new sizes of radial agriculturaltyres marked Cultor RD as of December 2015. CultorRD takes advantage of the benefits of high-tech tyredevelopment conducted under the Mitas brand, offeringthe same performance and durability of Mitas RD.Fairs and exhibitions were an important part of MITAS a.s.presentation over the course of 2015. In November,

MITAS a.s. joined the world’s leading internationalexhibition for agricultural machinery and equipment,Agritechnica, in Hannover, Germany. There, MITAS a.s.received two highly acclaimed awards for its uniqueinner tyre named AirCell. As a major innovation of theyear 2015, AirCell received the DLG Agritechnica GoldMedal and also the Machine of the Year 2016 award.

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MITAS a.s. also joined the Intermat fair in Paris todisplay its n from the construction machinerytyres segment.On the North American market, at the Farm ProgressShow in Decatur, Illinois, MITAS a.s. organised livedemonstrations of the PneuTrac concept, which attractedcrowds of curious visitors.In 2015, MITAS a.s. was recognised by two importantoriginal equipment manufacturers. AGCO named MITASa.s. as its Supplier of the Year 2015 in the category ofEngineering & Innovation, and agricultural machinerymanufacturer Fendt awarded its highest supplier ratingof “Four As” to MITAS a.s. for its deliveries of farmtyres.

In 2015, MITAS a.s. investments were directed towardthe realisation of time-sensitive projects, the preparationof new projects connected to the expected growth ofsales and the modernisation of current equipment andfacilities. The most important investment project wasthe delivery, installation and launch of manufacturingequipment that enables MITAS a.s. to produce all-steelradial tyres for forklifts. MITAS a.s. also invested in thelaunch of its own production of rubberised cord andextension of production capacities of large curingmembranes. MITAS a.s. successfully finished testoperation at the new plant in Otrokovice and obtainedan approbation for the continuous run of completetechnologies used in the Otrokovice plant.Among ongoing projects, MITAS a.s. focused on themodernisation and unification of primary technologiessuch as curing and tyre-bui ld ing faci l i t ies.Modernisation of the primary line for rubberised cordproduction, new tools and forms for manufacturing ofnew tyre sizes were also part of ongoing projectsinvestments.With regard to the environment, the energy centre forproduction of hot water and steam was modernised inorder to reduce emissions. MITAS a.s. also identifiedproduction halls where energy-saving optimisationthrough modernisation of lighting solutions is possible.Through the audit, MITAS a.s. received valuableinformation on how to implement cost- and energy-saving measures to reduce specific as well as overallenergy consumption. The aim of MITAS a.s. is to obtainan ISP 50 001 in the next audit, planned for this year.MITAS a.s. complies with all environmental directives

ew products

4. Investment and environmental protection

and legislation, including implementation of the REACHEuropean legislation. The company continues toactively cooperate with ETRMA members and in theEmissions Trading Scheme. MITAS a.s. also activelytook part in the negotiations and commentingprocedures of new legislative proposals regardingrecycling used tyres.

Consolidated revenue of the tyre division in 2015exceeded 370 million EUR. This represents a 3.8%decline compared with last year. The financial resultsfor 2015 were affected by weaker sales in the segmentof agricultural tyres, particularly toward originalequipment manufacturers. The industrial tyre segmentsaw a slight decline, as well. On the other hand, thanksto optimisation of other cost groups and increased workproductivity, and also with the help of sales supportcampaigns, MITAS a.s. managed to reach overallpositive business results.During 2015, MITAS a.s. invested mainly in productionfacilities and the development of new products.Operating profit exceeds the level of 63 million EUR,and profit after tax exceeds the level of 45 million EUR.

The EU economy shows signs of stability. In this regard,there is an expected increase in the production ofconstruction and agricultural machinery for 2016 and2017. Similarly, the aftermarket should pick up.Developments in the Russian Federation are difficult toforecast. MITAS a.s. doesn’t expect the economic andpolitical situation to have an impact on sales due to thelong-term relationship with customers on the market.Positive developments in Australia (a new salesubsidiary was established there in 2015) and SouthAmerica are anticipated. In the coming year, thecompany anticipates further moderate and stablegrowth of the U.S. economy. MITAS a.s. successfullystarted deliveries to John Deere Mexico and hasprepared further market development for Canada.Mitas and Cultor brand acceptance on the U.S. marketis growing stably. A new sourcing scheme for motorcycletyres for the U.S. market helps to reduce the deliverytime for our U.S. customers.

5. Financial results for 2015

6. Anticipated developments in 2016and strategic goals

| 21

The long-term plan is to build up the image of the Mitasbrand in all product segments and to be presenteverywhere where demand for radial tyres is increasing.Aside from Europe and North America, this trend maybe expected in South America, Central Asia, the FarEast and eventually in China, as well. The longer-termpriority is to focus on Sub-Saharan Africa.

• Maintain the position as a major supplier of tyresfor the agricultural and industrial sector in Europeand continue building our position on the NorthAmerican market.

Strategic goals

• Grow our lines of modern radial tyres, especially inthe area of the construction industry, innovateagricultural tyres and thus provide our customerswith greater added value.

• Ensure profitable growth by increasing productivityand improving quality, adapting price policyand making optimal use of our productioncapacity.

• Foster strategic partnerships with OEM clients,including cooperation in the development of newproducts and technologies, as well in the areas oflogistics and customer service.

• Build equity in a single brand, namely Mitas.

2 2 | Č G S 2 0 1 4

The development production and sale of rubberproducts, including rubber-metal parts for theautomotive, construction and electrical engineeringindustry is the subject of activity of RUBENA a.s.The production of bicycle tyres and tubes constitutesa substantial part of the production.

| 2 3

R u b e n a

1. Basic description of the activityand organisation of RUBENA a.s.


Organisational structure

Production companies

Business companies

Composition of the Board of Directorsas at 31 December 2015

Composition of the Supervisory Boardas at 31 December 2015

The development production and sale of rubber products,including rubber-metal parts for the automotive,construction and electrical engineering industry is thesubject of activity of RUBENA a.s. The productionof bicycle tyres and tubes constitutes a substantial partof the production.

RUBENA a.s. production plants in Hradec Králové,Náchod, Velké Poříčí and ZlínSICO RUBENA s.r.o. production of silicon parts in VelkéPoříčíCGS Automotive de Mexico production of parts for theautomotive industry in Silao, Mexico

RUBENA Slovakia a.s., Predmier, SlovakiaRUBENA Balkán s. r. o., Plovdiv, Bulgaria

Chairman of the Board of Directors Rudolf PecaVice-chairman of the Board of Directors Michal KubečekMember of the Board of Directors Pavel Kment

Members of the Supervisory Board Tomáš Němec,Oldřich Šlemr

—

—

—

——

—

—


Strategic business units of RUBENA a.s.

SAS

VELO

The strategic business unit SAS (Sealing and Antivibration Solutions) focuses on the automotive industrymarkets and markets of industrial applications andmanufacturers of white goods. It is involved in thedevelopment, production and supply of rubber-metalparts designed for absorbing vibrations, such as silentblocks, conical, cylindrical and disk springs, thrustsilencers, connection components, various types ofspecial mounting, etc. Yet another part of the productportfolio comprises sealing elements for sealingsurfaces of mechanical parts and aggregates filled withoils, lubricants, fuels and other industrial liquids. Theseinclude, for example,

, CR rings, for silencers and pneumaticcylinders, O-rings and other sealing elements. The thirdimportant group in the product range includes rubber

used especially for protecting movablemechanical parts, silencing thrusts and noise, reducingvibrations, etc. Examples of products in this sectioninclude cable bushings, dust boots, caps, stops, rubbersprings, membranes for brake boosters, etc.A key part of the strategic business unit is itsdevelopment center, which is fully equipped for “black-box” development, processing calculations using themethod of final elements, construction of individualparts, testing the required static, dynamic and lifespanproduct parameters.In 2015, a production increase was recorded for almostall commodities. This increase was also reflectedin sales reaching CZK 1,365 mil., which represents anincrease by 8.25% compared to 2014. Performance ofthe passenger car sector increased by 3% year-on-year,while the truck sector increased by 1%. Industrialutilization recorded an increase of 9%. Export accountedfor 80% of the achieved sales.

In early 2015, a decision was made to rebrand theentire production range from the Rubena brand to

rotary shaft seals, bearingseals

moulded products

seals

24 |


Technical pressed rubber 50Bicycle sets 17Special production 20Mixtures 12Other 1

Č G S 2 0 1 5

after

—

the Mitas brand. The rebranding process wascompleted in the first half of 2016. The Velo strategicbusiness unit specialises in the development, productionand sale of bicycle tyres and tubes for bicycleproduction as well as the market. The salesdepartment does not limit its activities to the Europeanmarket. It also develops its activities in Africa,Australia, North and South America, Central Asia,Turkey and Russian-speaking countries. The consumercharacter of the product range demands certain utilityand aesthetic standard of the products and developmentof the overall image of the Mitas brand. All activities,including development, are executed with the objectiveto achieve this goal. A comprehensive range of bicycletyres is offered in all categories, such as MBT/Cross,CityTour/Trek, Road and Reha (disability program fornon-motorised wheelchairs). An independent group, so-called Extreme tyres, consists of tyres designed for themost demanding terrains and conditions Downhill,Freeride, Enduro, Enduro Race and SlopeStyle. BMXtyres represent yet another specific product group. Ourdevelopment, production and sales currently focusprimarily on the medium and premium categoriesof skinwall design in various forms and on specialanti-puncture tyres.Special mixtures developed and produced by theCompounds SBU are used to construct bicycle tyres andtubes. The development and testing of certain types ofbicycle tyres are carried out in close cooperation withracing teams from the Czech Republic and abroad andwith leading figures in individual sports categories.In 2014, more than 5.6 million bicycle tyres and 8.1bicycle tubes worth a total of CZK 547 mil. weremanufactured and sold. Although sales decreased year-on-year by about 4.5%, the total profitability increasedby 31%.

The Compounds strategic business units produces andsupplies rubber mixtures both for external customersand for the internal needs of ČGS. It also manufacturesnon-vulcanised and vulcanised foils, non-vulcanisedtapes and rubber-coated textiles in various colours.Rubber compounds are processed at the company’sown modern rolling plants located in Náchod andHradec Králové. Since 2014, RUBENA a.s. has had fourfully automated lines, two of which are intermixing linesand one is a tangential line with a kneader usedexclusively to produce mixed coloured EPDM compounds.

COMPOUNDS



| 2 5

Selected indicators of RUBENA a.s. — data consolidated within the division

Selected indicators of RUBENA a.s.

2013 2014 2015

% 14.88 17.34 18.26

2,681,335 3,114,851 3,163,251

1,925,244 2,414,535 2,377,925

933,965 1,170,778 1,283,902

548,115 594,076 626,020

93,502 98,319 118,855

222,937 452,828 513,665

173,381 357,459 395,990

1,797,495 1,975,484 2,118,340

791,073 687,936 613,233

1,002,205 1,283,481 1,501,114

1,835 1,933 1,981

1,461 1,611 1,597

509 606 648

% 17 28 26

% 44 35 29

% 268 243 211

2013 2014 2015

27.425 27.725 27.025

97,770 112,348 117,049

70,200 87,089 87,990

34,055 42,228 47,508

8,129 16,333 19,007

6,322 12,893 14,653

65,542 71,253 78,384

28,845 24,813 22,691

36,543 46,293 55,545

Thousands CZK









Assets thousands










Thousands EUR







Assets thousands



The fourth line is a tangential line with a fullyautomated control system ensuring the highest qualityof the prepared compounds. Physical-mechanical testingconducted for each prepared compound with resultsconfirmed in a certificate issued to all buyers under theindividual contracts is an essential part of the entireproduction procedure.

In 2015, the company continued with its projectinvolving mixing coloured compounds and subsequentsale of vulcanised rubber to produce granulate forsports surfaces, and the development of compoundsfor all of the company’s strategic business units. Forthe SAS SBU, this involved compounds for the mostdemanding applications in automotive industry projects.

2 6 | Č G S 2 0 1 5

New types of compounds were developed and existingrecipes were optimised for SAVATECH d.o.o., resulting inan overall increase in the volume of mixed compoundscompared to the plan.In 2015, the Compounds SBU reported sales of goodsand products of CZK 380 mil. The overall productionwas worth CZK 987 mil.

The Special Production strategic business unit focuseson the development, sales, and complete productionof highly specialised commodities. These commoditiesare internally structured according to productiontechnologies and character as follows:

a wide range of anti-vibration and regulationelements for industrial pneumatic and hydraulic systemsand the automotive industry, where the company ranksamong the biggest European manufacturers. Theproduct range also includes flexible connections, railwaypads and compensators.

production and deliveries ofhighly specialised bags and reservoirs using themanual confection method with free vulcanisation. Thispart of the product range includes partition weirs,flood-protection systems, fuel tanks for aircraft,containers and insulation, pressing and food bags.RUBENA a.s. ranks among the world leaders especiallyin partition bags.

a traditional manufacturer ofrubberized cylinders, from small to 12.5-ton cylindersfor metallurgical, timber, mining, paper, textile andpolygraphic industries. The main markets for theseproducts are in the Czech Republic and Central Europe.

RUBENA a.s. is among the world’slargest manufacturers.

the plants in Náchod and Zlín manufacture awide range of coated and cut V-belts. Our keycustomers are industrial, agricultural and automotivemarkets of individual European and North Africancountries. Following extensive investment into thereconstruction of all rotational press capacities for theproduction of coated V-belts, all of our belts nowcomply with the strictest tolerance and qualityparameters.

SPECIAL PRODUCTION

Bags and reservoirs

Hockey pucks

V-belts

—

—

—

—

—

Air springs

Rubber-coated rollers

Service warehouse

Subsidiaries

CGS Automotive de Mexico

RUBENA Slovakia a.s.

this department focuses onservicing smaller and medium-sized producers andcommercial companies from Central and EasternEurope. The service warehouse with its wide range ofinventory (16 thousand items including sealingcomponents, silent blocks, pressed products, belts,foils, panels, silicon extruded profiles and hoses) isamong the largest wholesale establishments of its kindin Central and Eastern Europe. The department alsohas production capacity for medium and small-seriesorders.

In 2015, production increased and sales amounting toCZK 630 mil. were achieved, representing an increaseof 5% compared to 2014. More than two fifths of theturnover were attributable to domestic customers. Theexport share was 57%. Apart from the traditionalWestern European and Eastern European partners,a part of the turnover came from customers in Africa,Asia and America. The best results in history wererecorded in particular for , V-belts and hockeypucks.

CGS Automotive de Mexico manufactures membranesfor brake boosters for Continental, Bosch and TRW forthe American continent. During 2015, major investmentwas made into expanding the capacity of theproduction equipment at the Mexican plant to cover thecontinuously increasing demand among customers.Based on the latest forecast, the growth trend willcontinue into 2016. In 2015, a total of 7.2 millionmembranes were sold. Compared to 2014, sales grewby 21%. The company’s turnover in 2015 reached CZK197.3 mil.

RUBENA Slovakia a.s. is our business representationfocusing mainly on spare parts from the range of thewholesale warehouse of the Special Production SBU. In2015, the subsidiary mediated sales of productionamounting to CZK 24 mil. (after conversion) for itsparent company RUBENA a.s. and turnover from saleof goods reached CZK 0.2 mil.

—

air springs

| 27

Joint ventures

SICO RUBENA s.r.o.

RUBENA BALKÁN s.r.o.

SICO RUBENA s.r.o. is a subsidiary with a productionfacility in Velké Poříčí, in which RUBENA a.s. owns afifty-percent share. The company focuses on theproduction and sale of silicon rubber products. In2015, its sales increased by 5% year-on-year and itstotal sales thus amounted to CZK 393 mil.

RUBENA Balkán s.r.o. (Plovdiv, Bulgaria) is a commercialcompany that distributes Rubena products in Bulgaria,Turkey and Greece (bicycle tyres and bicycle tubesfor the purposes of production and spare parts, rubberand rubber-metal products for the needs of spare partsand special products). RUBENA a.s. is the owner of a36% share of the company’s basic capital. The sales ofgoods in 2015 amounted to CZK 13 mil.

In 2015, fixed tangible and intangible assets worth CZK147.094 were activated. This sum is equal to almost 5%of the company’s total turnover. A part of the resourceswas invested into production technologies for the SASSBU intended for the production of rubber and rubber-metal products for the automotive industry and fordemanding technical applications in other industrialsectors. The technical development of the SAS SBUalso involved a project worth CZK 10.5 mil.implemented under the title “Subsequent expansion of

3. Investment and environmental protection

equipment to support development” using a subsidyfrom the “Potential” program. Additional funds wereinvested into the purchase and modernisation ofmachinery equipment for the Special Production SBU.Considerable investment resources were used tomodernise the Velo SBU production, including newmoulds to expand the production range of bicycle tyres.Modernisation of the K7 kneader was launched at theCompounds SBU, and will be finalised in early 2016.Additional investments were made into purchasing newinformation technologies, and completing theimplementation of the SAP information system toreplace the outdated Movex system from 2016. Anyinvestments made also pursue improvement in workingconditions and environmental aspects. In the past year,the share of investments into production andmachinery equipment was 75.2% of the total activatedvolume.

In 2016, the company expects continued increase inthe demand for industrial polymer solution productsand further strengthening of its market position.The high technological standard, consistent quality ofproducts and the potential of the company’s ownproduction capacity are strong prerequisites forseeking new business opportunities. The company’sstrategic objectives remain unchanged, i.e. sustainingand strengthening its position of a leading supplier oftechnical rubber products on the European and othermarkets, improving labour productivity and maximisingthe company’s added value.


2 8 | Č G S 2 0 1 4

Savatech d.o.o.

SAVATECH d.o.o. has its head office in Kranj, Slovenia.It manufactures and markets industrial rubberproducts and tyres for scooters and motorcycles.Rubber compounds and conveyor belts have a largeshare in its production, too.

| 2 9

S a v a t e c h

1. Basic description of the activityand organisation of SAVATECH d.o.o.


Organisational structure of productionand sales units

Programmes of the company SAVATECH d.o.o.

SAVATECH d.o.o. has its head office in Kranj, Slovenia.It manufactures and markets industrial rubber productsand tyres for scooters and motorcycles. Rubbercompounds and conveyor belts have a large share in itsproduction, too.

SAVATECH d.o.o., Kranj (Slovenia) — industrial rubberproducts and tyresSava Medical in storitve, d.o.o., Kranj (Slovenia) —company for training and employing disabled workersSava-Rol, d.o.o., Zagreb (Croatia) — manufacture andsale of rubber-coated rollers

Mixing Plant, Kranj — manufacture of rubber compoundsElastomers, Kranj — development and sale of rubbercompoundsConveyor Belts, Kranj — manufacture and sale of conveyorbeltsProfiles, Kranj — manufacture and sale of solid andcellular rubber profilesPrint, Kranj — manufacture and sale of offset printingblanketsEko, Kranj — manufacture and sale of environmentalprotection and rescue productsMoto, Kranj — manufacture and sale of tyres and tubesfor scooters, motorcycles, small industrial and agriculturalvehicles, go-karts, special-purpose tyresGTI, Ptuj — manufacture and sale of moulded products

Sales companies

Europe

North America

Representative office

Company Management as at 31 December 2015

Company representatives of SAVATECH d.o.o.

Sava Trade, GmbH, GermanySava Trade, spol.s.o.o., Czech RepublicSava Trade, sp.z o.o., PolandSavatech Trade, Ltd., Great Britain

Savatech Corp., Florida, USA

Representative office Moscow, Russia

Company Director — Rudolf PecaCompany Director — Vesna Čadež

In 2015, total volume of the sales reached 123.7 millionEUR — the best sales result since the company wasfounded. We have particularly focused on seeking newopportunities, and thus managed to acquire over 300new customers and generated a turnover in excessof 13 million EUR with only the new accounts. Theextended range of customers and services providesa good platform for the future, not only for increasingthe sales volume but primarily for a further overallimprovement in sales quality leading towards generationof a higher added value. A great deal of effort has beeninvested in a strict collection of debts, as the generalfinancial situation in the majority of the global marketswas not especially favourable. Moreover, the companyhas been challenged with a fairly strong downwardpressure on the prices as a result of declining rawmaterials prices.Numerous new products were developed and the productmix was expanded in 2015. With the investments



3 0 | Č G S 2 0 1 5

Czech Republic 4Western Europe 52Eastern Europe 29Africa and Asia 8North and South America 6Other 1

Elastomers 16Coveyor Belts 20Profiles 14Print 11Environmental Protection

and Rescue Products 11Moto 16Moulded Products 8Services 2Other 2


made, we pursued the strategy implementationas formulated by SAVATECH d.o.o., thereby providingsuitable technology-related conditions for the manufactureof higher value-added products.

As far as sales are concerned, 2015 was an incrediblychallenging year, because sales markets were stillhighly volatile in spite of the economic recovery inindividual countries. The unstable political situationin the Near East and a slower economic growth in Chinaposed another challenge, while a fall in the Russiancurrency’s value had a negative impact on the salebusiness in Russia. SAVATECH d.o.o. responded to theunfavourable market circumstances in due time byintroducing suitable measures. The company furtherintensified its sales activities and especially focused onfostering direct contact with the existing and potentialcustomers, acquired new customers and opened upnew markets. As far as participation in trade fairs isconcerned, 2015 was an extremely busy year, as theSavatech-branded products were exhibited at 21 tradefairs across Europe, Asia, the USA and South America.Total sales volume of products and services ofSAVATECH d.o.o. reached 123.7 million EUR. Thegreatest share of sales is generated in the marketsof Western Europe with 52%, followed by the markets ofEastern Europe with 29%.The product group Conveyor Belts had the greatest,20% share in the sale of products by SAVATECH d.o.o.in 2015. The second largest product group was Motowith 16%, followed by Elastomers with 15% and Profileswith 14%.

In 2015, the development of new products andtechnologies from the previous years was completed,while the development of certain new products andtechnologies began and was partially finished. Numerousactivities took place in the field of optimisation andupgrade of the existing technologies, and in seekingnew solutions for the development of new products andtechnologies.In the Central Laboratory, a new UV ozone chamberwas efficiently introduced. In the R&D area, variousanti-decubitus mattresses were developed. Progress

3. Sales and marketing

4. Product innovation

| 31

Selected indicators of SAVATECH d.o.o. — data consolidated within the division

Selected indicators of SAVATECH d.o.o.

Thousands CZK









Assets thousands










Thousands EUR







Assets thousands



2013 2014 2015

% 19.64 19.58 20.90

3,305,519 3,309,375 3,430,109

2,771,269 2,820,326 2,937,796

1,161,858 1,172,688 1,309,832

671,977 707,659 706,829

137,778 140,557 139,845

343,190 327,956 472,166

288,010 271,682 362,976

3,979,937 3,998,873 2,842,874

1,893,852 1,613,991 1,085,390

2,075,730 2,356,570 1,744,998

921 943 904

3,589 3,509 3,794

1,262 1,244 1,449

% 14 12 21

% 48 40 38

% 159 140 197

2013 2014 2015

27.425 27.725 27.025

120,529 119,364 126,924

101,049 101,725 101,725

42,365 42,297 48,467

12,514 11,829 17,471

10,502 9,799 13,431

145,121 144,233 105,194

69,056 58,214 40,162

75,688 84,998 64,570

has been made in virtual development with increasingthe number of simulations that resulted in theoptimised development process and the end productquality. The major development achievement inConveyor Belts was the installation of five new conveyorbelts for the manufacture of plasterboards for the

renowned customers. A prototype conveyor belt fortransporting crystallized sugar was manufactured.Profiles continued to develop seals for solar energyapplications as well as profiles used as dilatationjoints. By way of virtual development, numerous newseals samples were manufactured. The activities in

3 2 | Č G S 2 0 1 5

Print were primarily focused on the developmentand technology-related tasks associated with theexpansion of technology and production capacities.Eko developed a decontamination unit incorporatinga PU tubular construction, which was exhibitedat the Interschutz 2015 trade fair. A high-pressuresealing hose was developed for sealing applications.Moto’s R&D activities take place in developmentdepartments in Kranj, Slovenia and the Czech Republic.The Kranj-based department further complementedthe range of tyre sizes for different tyre types andsheave liners. Moto also launched the project of virtualtyre development and analyses in virtual environment.GTI introduced a new technology of 2K plasticextrusion, a robotised cell for the manufactureof products in plastic-to-rubber combination, andbegan the assembly of the automated productioncell for rubber-to-metal products. GTI introducedalso the technology equipment for 3K rubber productswith a special CMS press. In the new develop-ment projects, GTI will continue to focus on therobotised processes utilizing the advanced technologyequipment.

In 2015, SAVATECH d.o.o. made investments to theamount of 5.1 million EUR. The major part ofinvestments was earmarked for the expansionof production capacities in connection with the newtechnologies introduction. In Mixing Plant, ConveyorBelts and Eko, investments and optimisation took placeto ensure good availability and more efficientutilisation of production equipment. Profiles mainlymade investments in finishing of rubber profiles, wherehigher added value can be generated. In Print, theinvestment project in progress will result in doublingthe production capacity. In this context, new workprocedures and technologies were introduced toimprove the quality of products and make a significantcontribution to minimising the environmentalburden. GTI continued investments in the newproduction capacities for the manufacture of new,cutting-edge products. The automation of the existingprocesses is in progress, too. Moto made furtherinvestments for the manufacture of new radialmotorcycles tyres sizes. As far as energy supply and

5. Investment and environmentalprotection

efficiency are concerned, two transformer stationswere reconstructed. New equipment for a continualmonitoring of energy consumption was introduced.Improvements that aim at providing of good workingconditions are always incorporated in the investments.Besides the improvements carried out as part of theinvestments in technology equipment and optimisation,also the fire safety systems in Profiles and GTI wereentirely renewed in 2015.The company introduced the environmental managementsystem according to the ISO 14001 standard already in2002. SAVATECH d.o.o. regularly adapts its operationsto the environmental legislation requirements and isstriving for minimising the impacts of its operations onthe environment.The following priority goals have been defined:prevention of environmental pollution, replacement ofhazardous substances with less hazardous ones,rational use of energy, raw materials and naturalresources, separate waste collection and decrease inspecific amount of rubber waste, raising employeeeducation and environmental awareness.The pursues the impact of its operations on theenvironment based on regular environmental monitoringcarried out by the certified external institutions. Alreadyin 2002, SAVATECH d.o.o. joined the internationalinitiative by the chemical industry, the so-calledResponsible Care. The initiative represents a commitmentto reporting on activities associated with continualimprovements in employee health and safety, as well ason minimising the impact on the environment. Based onregular reporting on these issues, SAVATECH d.o.o.obtained a Certificate, which entitles us to use theResponsible Care logotype.

In 2015, SAVATECH d.o.o. generated net sales revenuesof more than 120 million EUR, which is a 3% improvementyear-on-year. The net profit amounted to 13 million EURand the return on capital achieved 21%. The shareof capital in total liabilities of SAVATECH d.o.o. rose by4% year-on-year to achieve 61.3%. In 2015, thecompany employed 904 employees on average, 3% lessthan in 2014.Since SAVATECH d.o.o. generated a positive cash flow in2015, all of its liabilities were timely settled while theobtained loan is being repaid prematurely.

6. Financial results in 2015

| 3 3


Seeking new market opportunities, opening up newmarkets and development of new products and solutionsremain our moto in the upcoming year. We expecta stable sales growth in all product groups in 2016. The

market of products will have to face the downwardpressure on the prices of end products, mainly due todeclining prices of raw materials. New investments willboost productivity and increase production capacity.The vital internal elements of success in 2016 will bebased on the advanced knowledge, corporate identityand orientation to continued progress.

3 4 | Č G S 2 0 1 5

of the ČGS HOLDING a.s. as of December 31, 2015

The company HAYEK, spol. s r.o., holding, at the addressJindřišská 5/901, Prague 1, Certificate No. 029,has examined the consolidated annual financialstatement of the company ČGS HOLDING a. s., at theadress Švehlova 1900/3, 106 00 Praha 10 Záběhlice,identification No. 248 11 742. The auditor responsiblefor preparing the report is Mr, Ing. Konstantin Tafincev,Registration No. 1972.The independent auditor s report is addressed to theshareholders of the company a. s.We have audited the accompanying consolidatedfinancial statements of ČGS HOLDING a. s., compiledbased on the Czech accounting regulations, whichcomprise the balance sheet as at 31 December 2015,the income statement for the period from 1 January2015 to 31 December 2015, and notes to theconsolidated financial statements, including a summaryof significant accounting policies and other explanatoryinformation. Information about ČGS HOLDING a. s. isdisclosed in Note I. to the consolidated financialstatements.

The Statutory Body of ČGS HOLDING a.s. is responsiblefor the preparation and fair presentation of theseconsolidated financial statements in accordance withaccounting regulations applicable in the CzechRepublic, and for such internal control as managementdetermines is necessary to enable the preparation ofconsolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit.We conducted our audit in accordance with the Act onAuditors and International Standards on Auditing andthe related application guidelines issued by the Chamberof Auditors of the Czech Republic. Those standards

-

’ČGS HOLDING

Statutory Body s Responsibilityfor the Consolidated Financial Statements

Auditor’s Responsibility

’

I n d e p e n d e n t A u d i t o r ’ s R e p o r ton Verification of the Consolidated Annual Financial Statement

require that we comply with ethical requirements andplan and perform the audit to obtain reasonableassurance about whether the consolidated financialstatements are free from material misstatement.An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in theconsolidated financial statements. The proceduresselected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatementof the consolidated financial statements, whether dueto fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’spreparation and fair presentation of the consolidatedfinancial statements in order to design audit proceduresthat are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accountingpolicies used and the reasonableness of accountingestimates made by management, as well as evaluatingthe overall presentation of the consolidated financialstatements.We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for ouraudit opinion.

In our opinion, the consolidated financial statements in allmaterial respects give a true and fair view of assets andliabilities of the ČGS HOLDING a. s. as at 31 December2015 and of its expenses and revenues and operatingresults as at 31 December 2015 in accordancewith accounting regulations applicable in the CzechRepublic.

the informationincluded in the consolidated annual report, but doesnot include the consolidated financial statements andour auditor’s report thereon. The Statutory Body isresponsible for the other information.Our opinion on the consolidated financial statements

-

Opinion

Other Information

For the other information are considered

| 3 5

does not cover the other information and we donot express any form of opinion thereon. However,in connection with our audit of the consolidatedfinancial statements, our responsibility is to read theother information and consider whether the otherinformation is not materially inconsistent with theconsolidated financial statements or our knowledgeobtained in the audit, the consolidated annualreport has been prepared in accordance with theapplicable legal requirements, or the other informationdoes not otherwise appear to be materially misstated.If, based on the work we have performed, we concludethat the above is not true, we are required to reportsuch facts.

Based on the work we have performed, we have nothingto report in this regard.

In Prague, March 31, 2016

HAYEK, spol. s r. o., holdingIng. Konstantin Tafincev Registration No. 1972

,,

Registration No. 029

3 6 | Č G S 2 0 1 5

Thousands CZK 2015 2014

Total assets 14,594,651 14,092,895

A. Receivables from subscriptions 0 0

B. Fixed assets 8,034,376 7,931,961

B.I. Intangible fixed assets 115,373 71,487

B.I.1. Incorporation expenses 265 314

2. Research and development 0 0

3. Software 14,472 12,971

4. Royalties 3,362 2,613

5. Goodwill 63,223 28,857

6. Other intangible fixed assets 7,589 7,851

7. Intangible fixed assets under construction 26,463 18,881

8. Advance payments for intangible fixed assets 0 0

B.II. Tangible fixed assets 6,905,568 6,776,375

B.II.1. Lands 963,995 1,039,512

2. Constructions 2,987,840 2,928,765

3. Equipment 2,749,293 2,515,267

4. Perennial crops 0 0

5. Breeding and draught animals 0 0

6. Other tangible fixed assets 29,465 25,449

7. Tangible fixed assets under construction 150,815 228,259

8. Advance payments for tangible fixed assets 24,160 39,927

9. Adjustment to acquired assets 0 -804

B.III. Long-term financial assets 4,196 3,947

B.III.1. Shares in controlled and managed oranizations 0 0

2. Shares in subjects under substantial influence 2,773 2,832

3. Other securities and shares 149 150

4. Loans to controlled and managed organizations and to subjects under substantial influence 0 0

5. Other financial investments 1,274 965

6. Financial investments acquired 0 0

7. Advance payments for long-term financial assets 0 0

B.IV. Active consolidation difference, (-) Passive consolidation difference 1,009,238 1,080,151

B.V. Securities in equivalence 0 0

Assets

C o n s o l i d a t e d B a l a n c e S h e e ta s o f 31 D e c e m b e r 2 01 5

| 37


C. Current assets 6,440,983 6,076,962

C.I. Inventory 2,652,307 2,759,040

C.I.1. Materials 934,625 1,035,565

2. Work in progress and semi-finished goods 296,459 329,899

3. Finished products 1,299,042 1,311,405

4. Animals 0 0

5. Merchandise 122,161 82,140

6. Advance payments for inventory 20 31

C.II. Long-term receivables 1,216 5,356

C.II.1. Trade receivables 0 0

2. Receivables from controlled and managed organizations 0 0

3. Receivables from subjects ubder substantial influence 0 0

4. Receivables from partners, cooperative members and association members 0 0

5. Estimated receivable 0 0

6. Other receivables 1,216 5,356

7. Deffered tax receivable 0 0

C.III. Short-term receivables 2,621,788 2,684,383

C.III.1. Trade receivables 2,344,406 2,370,487

2. Receivables from controlled and managed organizations 0 0

3. Receivables from subjects ubder substantial influence 0 0

4. Receivables from partners, cooperative members and association members 0 0

5. Receivables from social security and health insurance 278 27,272

6. Due from state — tax receivable 240,817 252,152

7. Short-term deposits given 12,241 9,108

8. Estimated receivable 2,887 5,591

9. Other receivables 21,158 19,773

C.IV. Short-term financial assets 1,165,672 628,183

C.IV.1. Cash 1,874 3,654

2. Bank accounts 1,163,799 624,529

3. Short-term securities and ownership interests 0 0

4. Short-term financial assets acquired 0 0

D.I. Accruals 119,292 83,973

D.I.1. Deferred expenses 119,292 81,122

2. Complex deferred costs 0 0

3. Deferred income 0 2,851

3 8 | Č G S 2 0 1 5

Liabilities


Total liabilities

Equity

Registered capital

Registered capital

Company’s own shares and ownership interests (-)

Changes of registered capital (+/-)

Capital funds

Share premium

Other capital funds

Diferences from revaluation of assets and liabilities (+/-)

Diferences from revaluation in tranformation (+/-)

Reserve funds, statutory reserve account for cooperatives, and other retained earnings

Legal reserve fund indivisible fund

Statutory and other funds

Profit/loss — previous year

Retained earnings from previous years

Accumulated losses from previous years

Profit/loss of current period w/o minority share (+/-)

Profit/loss of current period (+/-)

Share of profit/loss in equivalence (+/-)

Consolidation reserve fund

Other sources

Reserves

Reserves under special statutory regulations

Reserves for pension and similar payables

Income tax reserves

Other reserves

Long-term payables

Trade payables

Payables to controlled and managed organizations

Payables to subjects under substantial influence

Payables from partners, cooperative members and association members

Long-term advances received

Bond issues

Long-term notes payables

Estimated payables

Other payables

Deffered tax liability

14,594,651 14,092,895

A. 10,671,293 9,204,089

A.I. 3,000,000 3,000,000

A.I.1. 3,000,000 3,000,000

2. 0 0

3. 0 0

A.II. 112,038 -45,455

A.II.1. 0 0

2. 234,922 54,315

3. -122,883 -99,770

4. 0 0

A.III. 496,268 397,653

A III.1. 496,268 397,653

3. 0 0

A.IV. 5,123,061 3,743,290

A IV.1. 5,123,061 3,743,290

2. 0 0

A.V. 1,939,926 2,108,601

A.V.1. 1,939,926 2,108,601

A.V.2. 0 0

A.VI. 0 0

B. 3,731,717 4,673,236

B I. 339,244 404,458

B.I.1. 0 0

2. 81,604 92,888

3. 21,503 150,719

4. 236,136 160,851

B.II. y 74,201 30,551

B.II.1. 0 0

2. 0 0

3. 0 0

4. 0 0

5. 0 0

6. 0 0

7. 0 0

8. 0 0

9. 2,327 0

10. 71,874 30,551

| 3 9

B.III. 2,005,586 2,230,184

B.III.1. 1,440,795 1,505,133

2. 0 0

3. 0 0

4. 0 0

5. 168,807 151,093

6. 51,750 53,903

7. 215,077 219,191

8. 17,132 13,170

9. 0 0

10. 30,019 66,577

11. 82,007 221,117

B.IV. 1,312,686 2,008,043

B.IV.1. 1,097,736 1,706,011

2. 214,951 301,893

3. 0 139

C.I. 191,640 215,570

C.I.1. 167,703 180,115

2. 23,937 35,455

D. 0 0

D.I. 0 0

D.II. 0 0

D.III. 0 0

D.IV. 0 0

D.V. 0 0

D.VI. 0 0


Short-term payables

Trade payables

Payables to controlled and managed organizations

Payables to subjects under substantial influence

Payables from partners, cooperative members and association members

Payroll

Payables to social securities and health insurance

Due from state — tax liabilities and subsidies

Short-term deposits received

Bond issues

Estimated payables

Other payables

Bank loans and financial accomodations

Long-term bank loans

Short-term bank loans

Short-term accomodations

Accruals

Accrued expenses

Deffered revenues

Minority equity

Minority Capital Stock

Minority Capital Funds

Minority Profit Funds incl. unretained income from previous years

Minority profit/loss from current period

Minor share on economical result in equivalence

Minor consolidated reserve fund

4 0 | Č G S 2 0 1 5

Thousand CZK 2015 2014

Revenues from goods sold

Expenses on goods sold

Sale margin

Production

Revenues from own products and services

Change in inventory of own products

Capitalisation

Production consumption

Consumption of material and energy

Services

Added value

Personnel expenses

Wages and salaries

Renumeration of board members

Social security expenses and health insurance expenses

Other social expenses

Taxes and fees

Depreciations of intangible and tangible assets

Revenues from disposals of fixed assets and materials

Revenues from disposals of fixed assets

Revenues from disposals of materials

Net book value of diposed fixed assets and materials

Net book value of sold fixed assets

Net book value of sold material

Change in operating reserves and adjustments and complex deferred costs (+/-)

Other operating revenues

Other operating expenses

Transfer of operating revenues

Transfer of operating expenses

Accounting of possitive consolidated difference

Consolidated profit/loss

Revenues from sales of securities and ownership interests

Sold securities and ownership interests

Revenues from long-term financial assets

Revenues from shares in controlled and managed organizations and in subjects under subsantial influence

Revenues from others securities and ownership interests

Revenues from other long-term financial assets

I. 520,148 500,620

A. 355,783 359,396

+ 164,365 141,224

II. 15,748,620 16,224,085

II.1. 15,784,635 16,302,822

2. -75,124 -114,699

3. 39,110 35,962

B. 9,220,962 9,858,408

B.1. 7,121,363 7,819,438

2. 2,099,599 2,038,970

+ 6,692,023 6,506,901

C. 3,120,075 3,083,062

C.1. 2,346,451 2,314,125

2. 152 0

3. 638,218 627,332

4. 135,254 141,605

D. 31,191 53,047

E. 652,053 632,400

III. 23,169 106,552

III.1. 5,483 23,317

2. 17,686 83,235

F. 17,142 53,839

F.1. 803 8,629

2. 16,339 45,210

G. 51,898 13,072

IV. 178,068 166,251

H. 335,281 184,297

V. 0 0

I. 0 0

70,913 70,913

* 2,614,706 2,689,076

0 0

J. 0 0

VII. 2,407 41

VII.1. 2,407 0

2. 0 41

3. 0 0

C o n s o l i d a t e d P r o f i t a n d L o s sS t a t e m e n t a s o f 31 D e c e m b e r 2 01 5

| 41

VIII. 0 0

K. 0 0

IX. 77,837 198,896

L. 3,423 94,763

M. 0 0

X. 1,259 2,406

N. 55,202 85,999

XI. 546,689 233,534

O. 765,873 394,368

XII. 0 0

P. 0 0

* -196,306 -140,253

Q. 478,473 424,746

Q.1. 442,934 441,771

2. 35,539 -17,025

** 1,939,927 2,124,076

XIII. (XVI) 0 1,098

R. 0 16,076

(S + T.1) 0 0

S. 0 497

S.1. 0 497

2. 0 0

* 0 -15,475

T. 0 0

*** 1,939,926 2,108,601

1,939,926 2,108,601

0 0

0 0

**** 1,939,926 2,108,601

2,418,399 2,533,844

Thousand CZK 2015 2014

Revenues from short-term financial assets

Expenses associated with financial assets

Revenues from revaluation of securities and derivatives

Cost of revaluation of securities and derivatives

Change in financial reserves and adjustments (+/-)

Interest revenues

Interest expenses

Other financial revenues

Other financial expenses

Transfer of financial revenues

Transfer of financial expenses

Consolidated profit/loss from financial operations

Income tax on ordinary income

Tax due

Tax deferred

Consolidated profit/loss from ordinary activity

Extraordinery revenues

Extraordinery expenses

Extraordinery expenses

Income tax on extraordinery income

Tax due

Tax deferred

Extraordinary consolidated profit/loss

Trasfer profit/loss to partners

Consolidated profit/loss for accounting period w/o equivalence share

profir/loss from current period w/o minority share

Minority profit/loss from current period

Share on profit/loss in equivalence

Consolidated profit/loss for accounting period

Consolidated profit/loss before tax (+/-)

4 2 | Č G S 2 0 1 5

ČGS HOLDING a.s.

Česká gumárenská společnost s.r.o.

ČGS a.s.

MITAS a.s.

0

Registered capital (thousands CZK) 3,000,000Sales of products, services and goods

(thousands CZK) 0Number of employees (averaged) 0Business activity: holding company

Registered capital (thousands CZK) 816,000Sales of products, services and goods

(thousands CZK)Number of employees (averaged) 0Business activity: holding company


(thousands CZK) 35,948Number of employees (averaged) 24Business activity: management services for subsidiaries

Registered capital (thousands CZK) 1,460,384Sales of products, services and goods

(thousands CZK) 8,048,851Number of employees (averaged) 2,369Production programme: tyres for large construction machi-nery, excavators, small loaders, trucks, multi-purpose andagricultural tyres

IGTT a.s.

RUBENA a.s.

Mitas Antikor, spol. s r.o.


(thousands CZK) 215,407Number of employees (averaged) 124Production programme: development of new constructionsand technology for the production of tyres, testing anddevelopment


(thousands CZK) 2,956,758Number of employees (averaged) 1,729Production programme: rubber products, sealing elements,roller coatings, rubber compounds, V-belts, rollers, bicycletyres and tubes

Registered capital (thousands EUR) 26,368Sales of products, services and goods

(thousands EUR) 123,719Number of employees (averaged) 796Production programme: rubber compounds, conveyorbelts, moulded products, tyres for motorcycles, smallindustrial and agricultural vehicles, offset rubber blankets,rubber profiles, environmental protection and rescueproducts

Registered capital (thousands CZK) 200Sales of products, services and goods

(thousands CZK) 25,526Number of employees (averaged) 22Production programme: Anti-corrosion and anti-abrasionprotection, rubberising of galvanised vessels, pipes for thechemical industry, ion-exchange and vacuum filters

SAVATECH d.o.o.

S u b s i d i a r i e so f Č G S H O L D I N G a . s .a s a t 31 D e c e m b e r 2 01 5

| 4 3

C o n t a c t I n f o r m a t i o n

ČGS HOLDING a.s.

Prague 10, Záběhlice, Švehlova 1900/3Company ID no. (IČ): 24 81 17 42Tax ID (DIČ): CZ 24 81 17 42tel: +420 267 111 111, +420 267 111 881www.cgs.eu

Čgs holding a.s. annual report 2015 - rubena.eu. the most important ... 7 costs related to the...

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