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M A N A G E M E N T ,
V I S I O N A N D V A L U E S
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4 ANNUAL REPORT
Trace Group Hold plc takes part in any activity related to construction and enterprises associated with it.
Trace Group Hold plc takes part in projects of national and regional importance and international projects, as well. Its market activity includes construction, reconstruction and rehabilitation of roads, highways, airports, underground stations and underground railways, ground railroads and facilities, urban infrastructure and road marking.
The group constructs water-supplying and gas-distributing networks and wastewater treatment plants. Participates in the national program for strengthening
sliding areas and emergency reconstruction activities at times of natural disasters.
Trace Group Hold plc is very successful in the field of high construction.
The holding carries out projects under the Operative Programs of the European Union. It meets the requirements and criteria for participation in international procedures of NATO through the NATO Agency for Maintenance and Supplies. Trace Group Hold plc is a Bulgarian group which performs its activities in conformity with the strict quality requirements and criteria of the international construction industry.
AbOUT US
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ANNUAL REPORT 5
Trace Group Hold plc has been a public
company since December 2007 when it set a
record in oversubscription of initial public offers
of 200 000 new shares at the Bulgarian Stock
Exchange - Sofia.
Trace Group Hold plc is a member of the
Bulgarian Construction Chamber, the Bulgarian
Branch Chamber “Roads”, the Bulgarian Industrial
Capital Association and of the Bulgarian Chamber
of Commerce and Industry.
THe HoldinG incorporaTes over 23 inTerconnecTed companies wITh hEADqUARTERS AT ThE MAIN REgIONAl CENTERS IN BUlgARIA.
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6 ANNUAL REPORT
Good corporate management is crucial for achieving the strategic goals of Trace Group Hold plc. Its main objective is long-term stable results and benefits for the shareholders, employees and the society as a whole.
The management of the group is based on internationally recognized standards of good corporate management, accepted by the European Community and the National Code of Corporate Management.
as a public company, Trace Group Hold plc observes the principles of transparency, equality, accountability and objectivity. These values are the core of its business practice and they
allow for establishing of efficient risk control and management, and timely consideration of the
regulation changes and acquiring of information.
The corporate management of Trace
Group Hold plc is a system of clearly defined
functions, rights and obligations at different levels
- the Board of Directors of the group, managing
bodies and boards of directors of the subsidiaries
and their executives.
The Board of directors manages the holding
and takes all decisions about its activity with the
exception of those which are up to the general
Assembly of the shareholders.
cORPORATE MANAGEMENT
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ANNUAL REPORT 7
assoc. prof. dipl.-eng. dr.
nikolay mihaylov
Chairman of the Board of Directors of
TRACE gROUP hOlD PlC
dipl.-eng.Tsvetan Tsonev
CEO and deputy chairman of the Board
of Directors of TRACE gROUP hOlD PlC
dipl.-eng. ivan Hristov
Chief Administrative and human Resources
Executive and a member of the Board
of Directors of TRACE gROUP hOlD PlC
manol denev
Commercial Director and a member of the Board of Directors of
TRACE gROUP hOlD PlC
miroslav manolov
Chief legal Adviser and a member of the Board of Directors of
TRACE gROUP hOlD PlC
prof. dipl.-eng. dr. ivan Trifonov
An independent member of the Board
of Directors of TRACE gROUP hOlD PlC
academiciananton donchev
An independent member of the Board
of Directors of TRACE gROUP hOlD PlC
bOARD Of DIREcTORS
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8 ANNUAL REPORT
The autonomy of Trace Group Hold plc and its good corporate management are starting points in carrying out major infrastructure projects of international, national and regional importance.
european quality, efficient conceptions and competitive prices are the advantages of the holding company. Its employees are united by common values, the most important of which are:
•Sustainability•Excellence•Safety•Innovation•Reliability
it is important for us to play an efficient role in the development of Bulgaria inside and outside its boundaries by participating in major
international projects. we guarantee:•High quality in all aspects of our work•Observing the main principles of engineering: safety, reliability, latest technology, efficiency and aesthetics•Preservation of environment and society•Benefits for the clients, contractors and society
We are proud with establishing creative and professional relations within TRACE gROUP hOlD PlC and we are equally proud with the honest and creative cooperation with suppliers and clients, universities and academic organizations, Bulgarian and foreign companies. These relations are deeply rooted in the mutual respect for personal and cultural differences. Such relations help us to build facilities which make our life easier and better.
VISION AND VALUES
Eng. Martin Slavov, European Сommissioner of Regional Policy Paul Sametski, Minister of Regional Development Rosen Plevneliev and the Chairman of the Board of Directors of TRACE gROUP hOlD PlC Prof. Dipl. -Eng. Dr. Nikolay Mihaylov (from left to right)
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P R O J E c T S
A c c O M P L I S H E D
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10 ANNUAL REPORT
The new route of Trakia motorway, which is part of Corridor № 8, connects Chirpan with Stara Zagora and provides a direct link between Sofia and Stara Zagora. Improved road conditions and removal of transit traffic increase traffic safety and comfort of passengers, reduce road distances, travel time, transportation and operating costs.
average per day more than 4700 tons of asphalt were paved. Average per day 4 km of elastic fence was installed. The huge overpass over the railway line Sofia-Burgas (2 x 150 m) was built in less than 180 days and the last overpass at km 209+300 - for thirty days (from 20.08.2007 to 20.09.2007).
scope of the works: Directly involved in assembly and construction activities throughout the area Orizovo - Stara Zagora km 171+360 to km 210+100 were over 1000 people, 300 trucks and highly specialized road construction equipment. For the fast, efficient and professional project completion were installed
two mobile asphalt plants with a capacity exceeding 200 tons/hour, and the aggregates were supplied from four fixed and three mobile crushing plants.
excavations: 8 687 504 m3 embankments: 4 551 830 m3
Base of crushed stone: 578 500 m3
asphalt works: 831 805 tBridge structures: 27 piecesconcrete works: 81 112 m3
reinforcing steel: 2 800 tBridge beams: 606 piecesdrainage: 35 000 mTrenches: 88 000 mculverts: 5 000 mFence: 84 000 mGuard railings: 135 500 m Horizontal marking: 45 000 m2
landscaping - trees and bushes: 60 000 piecesGrassing: 247 018 m2
Country: republic of BulgariaProject: Trakia motorway - loT 1 - orizovo - stara Zagora from km 171+360 to km 210+100Construction type: new construction
Employer: national road agency, republic of BulgariaFinancing: nri Fund, Budget of BulgariaProject budget (EUR): 93 038 943 €Construction started: 04.03.2003Construction completed: 05.10.2007
TRAkIA MOTORwAy LOT 1
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ANNUAL REPORT 11
Country: republic of BulgariaProject: road i-7 “elhovo - Granitovo - lesovo - new Border checkpoint” from km 0+000 to km 20+858Construction type: new construction
Employer: national road agency, republic of BulgariaFinancing: nri Fund, Budget of BulgariaProject budget (EUR): 19 587 494 €Construction started: 2001Construction completed: 2006
Basic types of construction and installation work
performed on site:
earthworks - 1 592 550 m3
asphalt works - 98 500 t
concrete works - 6 860 m3
crushed-stone surface - 113 950 m3
drainage system - 18 960 m
pipe and slab culverts - 1 400 m
Bridge structures - 10 pieces, of them
underpasses - 6 pieces, overpasses - 2
road junction “Trumpet” at km 8+705 - 1 piece
road junction “Trumpet” at km 4+082 - 1 piece
ROAD I - 7
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12 ANNUAL REPORT
scope of the works:•Reconstruction of the runway for takeoff and landing•Reconstruction of pathways for taxiing•Reconstruction of aircraft parking lots•Installation of lighting system of runways
Basic types of construction and installation works performed on site:
asphalt works - 245 000 tconcrete works - 11 000 m3
earthworks - 99 189 m3
Geo-grid placing - 136 000 m2
drainage system with pipes Ø200, Ø400, Ø500, Ø600, Ø800 - 7 000 m
Treatment of cracks and joints with polymer-modified paste - 164 495 mlight system - laying 200 km of cablevertical signalizationHorizontal marking - 25 000 mdrilling crossings - 27 pieces, each of 90 m
military airport “Graf ignatievo” was the largest construction project in Bulgaria in 2001. Its reconstruction was carried out for three months. This allowed the conduct of the largest training program for Eastern Europe by NATO: “Cooperative Key 2001”.
Country: republic of BulgariaProject: reconstruction of airport “Graf ignatievo”Construction type: reconstructionEmployer: ministry of defence, republic of Bulgaria
Financing: ministry of defence Fund, Budget of BulgariaProject budget (EUR): 16 783 938 €Construction started: 01.04.2001Construction completed: 01.07.2001
AIRPORT “GRAf IGNATIEVO”
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ANNUAL REPORT 13
scope of the works: Strengthening of landslides in region Kabakum: bus stop “horizont” - bus stop “Pisatel” and Road IV-9003 golden Sands Resort, Varna
plumbing - 2 148 msewerage - 2 386 mretaining walls - 5 piecespilot structures - 3 piecesanchor structures - 12 490 mdrainage system of horizontal drillings - 2 385 m
excavation works - 240 000 m3
embankments - 71 000 m3
reconstruction of electric power transmission 20 kv - 80 Areconstruction of cable networks - 8 918 malley lightingconcrete works - 13 425 m3
reinforcing steel - 347 tpavement - 38 800 m3
asphalt workspusher pump station
Country: republic of BulgariaProject: strengthening of landslides in the region of tourist complex “chaika”Construction type: strengthening of landslidesEmployer: mrdpW, meWB, republic of Bulgaria
Financing: mrdpW and meWB fund, Budget of BulgariaProject budget (EUR): 1 148 006 €Construction started: 09.01.2002Construction completed: 09.08.2002
STRENGTHENING Of LANDSLIDES
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14 ANNUAL REPORT
additional information: The building of the
Regional historical Museum in Stara Zagora,
reconstructed from TRACE, received the
prestigious winning award in the national contest
“Building of the Year 2009”. The project was
awarded in category “Buildings with special
functions” in competition with other 10 buildings,
including an aqua park, church, clinic, stations
etc. The national competition is organized under
the auspices of the MRDPw and with the support
of professional organizations in architecture and
construction in Bulgaria.
Country: republic of BulgariaProject: construction works on the exposition building of regional Historical museum in stara ZagoraConstruction type: construction and reconstruction
Employer: municipality of stara Zagora, republic of BulgariaFinancing: Budget of municipality stara ZagoraProject budget (EUR): 1 101 913 €Construction started: 12.10.2008Construction completed: 20.08.2009
HISTORIcAL MUSEUM, STARA zAGORA
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P R O J E c T S
I N P R O G R E S S
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16 ANNUAL REPORT
project description:
•Implementation of structural and architectural
design of the 3 metro stations; including the
completion of partially built structures in the
section „NPC” - Museum “Earth and Man”
•Construction of two-way district tunnels with
total length of 2.6 km
•Development and implementation of
dispatching systems for traffic management,
electricity and sanitary facilities
•Supply and installation of automation equipment for transport management and regulation of train speed
•Complex equipment and construction of system for traction power by 7 power stations, railway and station facilities
•Supply and installation of train radio system, dispatching links, audiovisual and other low voltage systems.
additional information: lOT II has a length of 2.6 km and 3 stations.
Country: republic of BulgariaProject: sofia metro extension, metro diameter ii, separate loT ii, section patriarh evt. Blvd. - cherni vrah. Blvd.Construction type: : new constructionEmployer: “metropoliten” Jsc
Financing: sofia municipality, mrdpW, european investment BankProject budget (EUR): 86 914 304 €Construction started: 01.12.2008Construction to be completed: 01.09.2012Stage of construction completed: 32%
SOfIA METRO ExTENSION
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ANNUAL REPORT 17
scope of the works: The extension provides design and construction of 2.150 km railway, 2 metro stations and underground parking lot at two levels with capacity of 1500 places.
additional information: A part of the tunnels (at the intersection of blvd “A. Malinov” and before blvd. “Tsarigradsko shose”) is built underground according to New Austrian Tunneling Method. The metro stations, the rest of the tunnels and the buffer parking under “Tsarigradsko shose” are being constructed in an open process with reinforced plates.
The metro station has a central entrance hall, located in the boulevard roadway and entrances to the Expo center and the south side of the boulevard opposite it.
proceeding from the fact that this avenue is the largest input / output artery of Sofia, we intend to locate the first large parking lot in the capital with real buffer functions in the east of the station under the driveway of the boulevard. Thus, those traveling by car, rather than aggravate traffic and parking in the central part of the capital at very high fees, will prefer to park in the much cheaper buffer parking and through fast and convenient subway travel to go to do their jobs in the city.
Country: republic of BulgariaProject: sofia metro extension, metro diameter i, section mladost 1 (metro station №13) - Tsarigradsko shose (metro station №19) with underground parking lotConstruction type: new constructionEmployer: “metropoliten” Jsc
Financing: sofia municipality, mrdpW, european investment BankProject budget (EUR): 113 250 448 €Construction started: 16.02.2009Construction to be completed: 16.05.2012Stage of construction completed: 31%
SOfIA METRO ExTENSION
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18 ANNUAL REPORT
The project aims at improving water supply and sewerage infrastructure in Sofia. By improving service levels in the water sector, it will supply the population with quality drinking water and free the environment from of untreatable sewage water. The project comprises three sites.
•continuation of left vladaiski collectorThe route of the collector is about 4 kilometers
long and ensures the removal of waste-water from urban areas by the collector.
•construction of new collector Bankya-KakachThe collector, which is 8 km long, transports
wastewater from the town of Bankya and the adjacent villages and localities into the existing shaft collector “Kakach”.
•rehabilitation of rila Water-conduitRehabilitation of water-conduit, 200 meters long.
The water-conduitt will be strengthened hrough injection works in the ground base and filling joints and cracks inside the tube. Restoring the low water channel camera Simeonovo, which is part of Rila water-conduit.
Country: republic of BulgariaProject: construction of Water supply and sewerage collectors - ii phase, •extension of left vladaiski collector •construction of new collector Bankya-Kakach •rehabilitation of rila Water-conduit
Employer: mrdpWFinancing: mrdpWProject budget (EUR): 8 248 101 €Construction started: 22.10.2009Construction to be completed: 15.03.2011Stage of construction completed: 61%
wATER SUPPLy
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ANNUAL REPORT 19
Technical parameters of construction
Gauge of Trakia motorway - a - 29•Two lanes for each direction - 2 x 3.75 m•Guiding strips - 0.75 m •Emergency lanes (each way) - 2 x 2.50 m •Banquets - 2 x 1.25 m•Central reserve - 3.50 m
main types of work involved in the project: •Earthworks - about 8 million cubic meters•Production of materials and installation of pavement •Bridge structures - 20 pieces•Road junctions - 2 pieces
•Reconstruction of high voltage transmission lines and TM cables, pipelines, irrigation and drainage facilities
The project envisages the following construction of the road surface: Asphalt courses:
•Wearing course of split mastics asphalt - 4 cm •Binder - 6 cm •Bituminous base - 12 cm
Basic courses: •Cement-stabilized base - 20 cm •Road base of crushed stone - 28 cm
Country: republic of BulgariaProject: Trakia motorway - loT 2 - stara Zagora - nova Zagora from km 210+100 to km 241+900Construction type: new construction
Employer: national road agency, mrdpW, republic of BulgariaFinancing: operative program “Transport” 2007-2013Project budget (EUR): 70 491 000 €Construction started: 09.06.2010Construction to be completed: 10.07.2012
TRAkIA MOTORwAy LOT 2
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c E R T I f I c A T E S
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22 ANNUAL REPORT
Trace Group Hold plc and consTrucTion company Trace Jsc meet the high criteria set by NATO. The companies are listed in the database of candidates for participation in the NATO international procedures at the Ministry of Economy and Energy. This entitles the companies to tender in the international procurement procedures of the North Atlantic Treaty Organization (NATO) issued by the NATO Agency for Maintenance and Supply (NAMSA). TRACE gROUP hOlD PlC and CONSTRUCTION COMPANY TRACE JSC participated in international tenders organized by countries which are members of NATO: germany, Czech, Belgium and NAMSA as host for non-member countries in NATO: Serbia, Kosovo, Afghanistan and others.
consTrucTion company Trace Jsc is one of the few companies in Bulgaria which has been issued Certificate for access to classified information to the national level “Secret” and a unique identification number by the State Commission on Information Security (SCIS).
“Trace Group Hold” plc and “construction company Trace“ Jsc meet the high criteria set by NATO, and are listed in the database of candidates for participation in the NATO international procedures at the Ministry of Economy and Energy. This entitles the companies to tender in the international procurement procedures of the North Atlantic Treaty Organization (NATO) issued by the NATO Agency for Maintenance and Supply (NAMSA). “Trace group hold”PlC and “Construction Company Trace”JSC participated in international tenders organized by countries which are members of NATO: germany, Czech, Belgium and NAMSA as host country for non-member countries in NATO: Serbia, Kosovo Afghanistan and others.
“construction company Trace” Jsc is one of the few companies in Bulgaria with issued by the State Commission on Information Security (SCIS) “Certificate for access to classified information to the national level” Secret “” and a unique identification number.
cERTIfIcATES
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ANNUAL REPORT 23
investing in our employees is the prime principle of management policy of TRACE
gROUP hOlD PlC.
The management of human resources is a leading factor in the corporate policy of
the group. TRACE gROUP hOlD PlC employs
highly qualified professionals successfully
implementing the most complicated projects in
all construction fields, accordingly completed with
high quality and in conformity with international
practices thereof. The management experience
and professional qualification of experts and
professionals make possible implementation of
innovational practices and modern technologies
when performing infrastructure projects. There
are over 1000 highly qualified experts working in
TRACE gROUP hOlD PlC.
HUMAN RESOURcES
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f I N A N c I A L
H I G H L I G H T S
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26 ANNUAL REPORT
Generated operating income in 2009 amounted to 105 608 thousands EUR or 186% more than in 2008 and 157% more than in 2007. The structure of net sales revenue is as follows:
Тype Thousands EUR
2009 share % 2008 share % 2007 share %
Production 1 056 1,00% 3 420 6,01% 9 409 13,94%
Services 100 644 95,30% 49 253 86,55% 52 681 78,05%
goods 1 690 1,60% 245 0,43% 540 0,80%
Others 2 218 2,10% 3 989 7,01% 4 866 7,21%
Net Sales Revenue 105 608 100% 56 907 100% 67 496 100%
Net Sales Revenue
MAIN RESULTS fOR THE yEAR
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ANNUAL REPORT 27
incurred expenses amount to 97 370 thousands EUR and are divided into economic elements, as follows:
Тype Thousands EUR
2009 share % 2008 share % 2007 share %
Expenditures on materials 17 019 17,47% 20 827 35,27% 22 679 39,48%
Expenditures on outside servises 66 487 68,28% 25 380 42,98% 24 512 42,67%
Expenditures on amortization 2 237 2,30% 3 023 5,12% 2 206 3,84%
Expenditures on salaries,social allowances
9 217 9,47% 8 173 13,84% 6 348 11,05%
Impairment of assets 689 0,71% 295 0,50% 241 0,42%
Other Expenditures 1 720 1,77% 1 352 2,29% 1 459 2,54%
Total Expenditures on Activity 97 370 100% 59 051 100% 57 445 100%
Expenditures on Activity
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28 ANNUAL REPORT
continues the acquiring of framework contracts for assumption of credit commitments from 2008 to 2009 with unicrediT BulBanK for issuing bank guarantees amounting to EUR 12.015 million and EUR 0.76 million overdraft, mKB union BanK – for issuing bank guarantees amounting to EUR 10.70 million, letters of credit amounting to EUR 0.56 million and with FirsT invesTmenT BanK - for issuing of bank guarantees of EUR 12.78 million; with ccB 8.6 million EUR.
Frame contracts for bank guarantees up to 31.12.2009 /Thousands EUR/
Name of bank Value of contract limitguarantee in forceup to 31.12.2009
First Investment Bank 12 782 11 009
MKB Unionbank 10 737 5 098
UniCredit Bulbank 12 015 4 019
Corporate Commercial Bank 8 692 3 185
Total: 44 227 23 311
in 2009, Trace Group Hold plc continues its investment policy in respect to construction equipment and machinery. New frame contracts for lease with INTERlEASE JSC and INTERlEASE AUTO JSC amounted to 10 000 thousands EUR.
Within 2009 the holding has acquired 3 pieces Asphalt-mixing plant CB 150P, Asphalt-mixing plant CB 180, 2 pieces mini front loaders gEhl, 2 pieces Bitumen installations gieb, 6 pieces rollers type hAMM hD 90 and 4 pieces rollers type hAMM hD150TT for laying road pavements, 20 pieces of cars and light trucks.
long-term investments made in 2009
INVESTMENT POLIcy
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ANNUAL REPORT 29
consolidated profit loss account/ income statement /Thousands EUR/
2009 2008
incomenet sales income 105 608 56 907
Services 100 635 49 255
Production 975 3 419
goods 1 771 247
Others 2 226 3 986
Financial income 230 613
Grants provided by the state 25 5
Total income 105 863 57 525
expendiTuresexpenditures on activity -97 370 -59 051
Expenditures on materials -17 019 -20 829
Expenditures on outside services -66 487 -25 382
Expenditures on amortization -2 237 -3 025
Expenditures on salaries, social allowances -9 217 -8 172
Impairment of assets -689 -292
Other Expenditures -1 720 -1 351
corrective amounts -2 017 2 297
Financial expenditures -2 521 -1 263
Total expenditures without Taxes -101 908 -58 018
result from release of fixed assets -12 1 430
share of results of associated companies 998
profit/loss before Taxes 4 941 937
Taxes -654 -283
profit/loss on continuing activities 4 287 654
net income 4 287 654
Basic net profit per share 2,408 0,169
cONSOLIDATED PROfIT LOSS AccOUNT
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30 ANNUAL REPORT
consolidated Balance sheet /Thousands EUR/
31.12.2009 31.12.2008 01.01.2008
asseTsFixed assets
Property, plant and equipment 26 598 26 068 15 551
long-term intangible assets 542 579 180
Non-current financial assets 923 31 3
Investments according to equity method 1 001 11 10
Non-current receivables 3 035 15
Deferred tax assets 611 409 223
Corporate reputation 229 412 184
Total Fixed assets 32 940 27 510 16 166
current assets
Inventories 5 095 7 385 2 901
Accounts receivables 68 975 26 989 25 038
Refundable taxes 2 304 963 252
Current financial assets 3 165 6 338 10 063
Cash and cash equivalents 3 258 6 929 5 856
Total current assets 82 798 48 605 44 110
ToTal asseTs 115 738 76 115 60 277
liaBiliTies and equiTylong-term liabilities
long-term financial liabilities 4 247 4 591 2 333
long-term payables 2 025 1 187 146
long-term provisions 126 108 88
Deferred tax liability 282 287 359
Total long-term liabilities 6 680 6 172 2 927
short-term liabilities
Short-term financial liabilities 8 262 7 048 4 076
Accounts payable 67 088 32 904 23 862
Current income tax liabilities 1 249 1 783 1 563
liabilities to employees 1 779 1 083 923
Current provisions 827 140
grants provided by the state 25 31
Total long-term liabilities 79 206 42 843 30 594
equity
Share Equity 1 125 1 125 1 125
Share Premiums 11 126 11 126 11 126
Reserve from recalculation -106 -95
Reserves 9 585 7 560 4 260
Financial Result 7 954 4 507 7 742
Holding equity 29 684 24 223 24 254
uncontrolled share 168 2 876 26 756
Total equity 29 852 27 099 26 756
ToTal liaBiliTies and equiTy 115 738 76 115 60 277
cONSOLIDATED bALANcE SHEET
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ANNUAL REPORT 31
Financial ratios /Thousands EUR/
Coefficients 2009 2008 Difference
Value Value Value %
profitability:
On Equity 0,18 0,02 0,16 1057%
On Assets 0,05 0,00 0,04 832%
On Passives 0,06 0,01 0,05 709%
On Sales Income 0,05 0,01 0,04 664%
efficiency:
Of expenditures 1,04 0,99 0,05 5%
Of incomes 0,96 1,01 -0,05 -5%
liquidity:
Total liquidity 1,05 1,13 -0,08 -8%
quick liquidity 0,98 0,96 0,02 2%
Instant liquidity 0,08 0,31 -0,23 -74%
Absolute liquidity 0,04 0,16 -0,12 -75%
liquidity
Financial autonomy 0,35 0,50 -0,15 -30%
leverage/gearing 2,89 2,02 0,87 43%
fINANcIAL RATIOS
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w w w . t r a c e b g . c o m