Annual report 2018

Železiarne Podbrezová a.s. ANNUAL REPORT 2018 66 24 27 RELATED PARTY TRANSACTIONS 27.1 Members of statutory, supervisory and other bodies Remuneration paid to the members of the Group’s statutory, supervisory and other bodies for the year ended 31 December 2018 amounted to EUR 3 517 thousand (year ended 31 December 2017: EUR 2 052 thousand). Remuneration is included in personnel expenses. 27.2 Other related parties CPA s.r.o., Slovak Republic is the parent company of Železiarne Podbrezová a.s. During the year, the Group entered into the following transactions with related parties that did not represent consolidated entities in these consolidated financial statements: Purchases of goods and services in 2018 Payables as at 31 Dec 2018 Sales of goods and services in 2018 Receivables as at 31 Dec 2018 Parent company and ultimate owners 181 677 23 470 480 6 339 3 149 Other related parties 313 898 211 012 1 598 634 287 846 Total 495 575 23 681 492 1 604 973 290 995 Purchases of goods and services in 2017 Payables as at 31 Dec 2017 Sales of goods and services in 2017 Receivables as at 31 Dec 2017 Parent company and ultimate owners 189 593 24 973 063 7 024 3 141 Other related parties 357 443 175 834 1 589 788 275 393 Total 547 036 25 148 897 1 596 812 278 534 Transactions with the parent company and ultimate owners mainly represent received borrowings, advisory services, and lease of premises. Transactions with fellow subsidiaries and other related parties mainly represent the sale of products of the Group, and transport services. 28 COMMITMENTS AND CONTINGENCIES 28.1 Environmental matters The Company’s management believes that the Group complies with the relevant existing legislation in all material respects. It is not expected that the Group may become liable to make significant payments relating to the environment in the future. 28.2 Capital expenditure The Group prepared a capital expenditure plan for 2019 amounting to EUR 25 728 thousand, of which EUR 6 574 thousand is contracted as at 31 December 2018. 28.3 Litigation and potential losses At present, the Group is involved in a number of legal cases and other disputes that arise as a result of ordinary business activities. The Group created a provision for litigation against PIPEX ITALIA S.p.A in the amount of EUR 796 thousand. The Group did not create a provision for other Group litigations in the accompanying consolidated financial statements, and based on the advice of its legal counsels, believes that the final outcome of the litigations isuncertain,and nomaterialnegative impact, individuallyor in aggregate, isanticipated on the Company’sconsolidated financial statements. 28.4 Emission rights During 2005, the EU - wide greenhouse gas emission rights trading scheme came into effect together with the Act on Emission Rights Trading passed by the Slovak Parliament in order to implement the related EU Directive in Slovakia. Under this legislation, the Group is required to deliver emission rights to the Slovak Environmental Office to offset actual greenhouse gas emissions. The Group has opted to recognise the allocated emission rights at a nominal amount. In 2018, the Group received a pro rata share of emission rights, but the Group’s emission production in 2018 exceeded this share. The difference of EUR 126 thousand is recognised in profit or loss. The Group expects similar development until the end of the 3 rd trading period (2020) and, therefore, decided to purchase emission rights in the amount of EUR 648 600. The Group has an obligation to deliver emission rights for actual emissions. This obligation was fulfilled by the delivery of emission rights for the 2018 monitored period in March 2019. 28.5 Guarantee for loans provided to other entities The Group provides its assets as collateral for the liabilities of joint debtors ŽP Informatika s.r.o. and ŽIAROMAT a.s. under a loan agreement with Slovenská sporiteľňa a.s. up to EUR 6 million. The outstanding principal as at 3 1 December 2018 amounts to EUR 4 million. The Company’s management believes given the financial positions of ŽP Informatika s.r.o. and ŽIAROMAT a.s. that the subsidiaries will repay the loans, therefore the Group recorded no provision in the accompanying consolidated financial statements. 29 EVENTS AFTER THE REPORTING PERIOD From 31 December 2018 up to the issue date of the financial statements, there were no such events that would have a significant impact on the Group’s assets and liabilities, except for those resulting from the ordinary course of business operations. 30 APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements were prepared and approved for issue on 23 April 2019. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018 (IN EUROS)