Annual report 2019

Železiarne Podbrezová a.s.: ROČNÁ SPRÁVA 2019 23 23 32.4 Emission rights During 2005, theEuropeanUnion - wide greenhouse gas emissionrights tradingschemecame into effect, together with the Act onEmissionRights TradingpassedbytheSlovakParliament inorder to implementtherelatedEUDirective inSlovakia. Underthis legislation, theCompany isrequired to deliver emission rights to the Slovak Environmental Office to offset actual greenhouse gas emissions. ŽP has opted to recognise the allocated emission rights at a face value. In 2019, the Company received a pro rata share of emission rights but the Company’s emission production in 2019 exceeded this share. The difference in the amount of EUR 293 thousand is recognised in the statement of profit and loss. The Company expects such development until the end of the 3 rd trading period (2020) and, therefore, decided to purchase emission rights in the amount of EUR 375 thousand. ŽP has an obligation to deliver emission rights to cover produced emissions. This obligation was fulfilled by delivering emission rights for the monitored 2019 period in April 2020. 32.5 Guarantee for loans provided to other entities The Company provided its assets as collateral for the liabilities of joint debtors ŽP Informatika s.r.o. and ŽIAROMAT a.s. arising from a loan agreement with SLSP up to EUR 6 million. The outstanding principal as at 31 December 2019 amounts to EUR 4 803 thousand. Since the Company’s management believes based on the financial positions of ŽP Informatika s.r.o. and ŽIAROMAT a.s. that the subsidiaries will repay the loans, ŽP recorded no provision in the accompanying separate financial statements. 32.6 Bank guarantees The Company’s liabilities to Graftech Switzerland S.A. arising from the Graphite Electrode Supply Agreement dated 30 November 2017 are secured by a bank guarantee up to a total amount of EUR 1 676 thousand. The Company’s customs debt is secured by a bank guarantee of up to EUR 200 thousand and customs debt from representing third parties by a bank guarantee for the approved guarantor of up to EUR 50 thousand. The Company issued blank promissory notes to secure both guarantees. 33 POST-BALANCE SHEET EVENTS From 31 December 2019 to the preparation date of the financial statements, there were no such events that would have a significant impact on the Company’s assets and liabilities, except for those resulting from the ordinary course of business operations. The rapid development of the Covid - 19 epidemics and its social and economic impact in Slovakia and worldwide may mean revisions may be needed to the assumptions and estimates used in the preparation of the financial statements. These may cause significant adjustments to the carrying amount of assets and liabilities in the following financial year. At this stage, Company management is unable to make a reliable estimate of their possible impact, as events are developing dynamically every day. The long - term impact may also affect volumes of business transactions, cash flows and profitability of the Company. However, as at the preparation date of the financial statements, the Company continues to meet its liabilities and expects to continue as a going concern. 34 APPROVAL OF SEPARATE FINANCIAL STATEMENTS The separate financial statements were prepared and approved for release on 16 March 2020. NOTES TO THE SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 (IN EUROS)