annual report 2011 danfoss trata d.o.o

MAKING MODERN LIVING POSSIBLE

Danfoss Trata d.o.o.

Annual Report 2011Danfoss Trata d.o.o.

2 | Annual Report 2011 Danfoss Trata

Danfoss Trata d.o.o., Annual Report 2011

July 2012

Published by

Danfoss Trata d. o. o., Jožeta Jame 16,

1210 Ljubljana Šentvid, Slovenia

Selection and preparation of the business part

of the annual report

Tina Pestotnik and Mateja Panjan

Photographs

Stanko Gruden and Archives of Danfoss Trata

Translation into English

Vikica Klasinc, Mar-Vik Vikica Klasinc s.p.

Design and print

COLOR.ID, design solutions, Uroš Sterle s. p.

Annual Report 2011 is also available on the website

www.trata.danfoss.com

Annual Report 2011 Danfoss Trata | 3

Content

BUSINESS REPORT

Highlights / 5

Key achievements in 2011 in fi gures / 6

General Manager’s Report: 2011, a record turnover year for Danfoss Trata / 7

Key events of the year 2011 / 9

Introduction / 11

Company profi le / 12

Nature of operations and activity / 13

Organization and management of the company / 13

More than 70 years of company operations / 14

Danfoss Trata in Danfoss / 14

Danfoss District Energy / 15

Vision of Danfoss Trata / 15

Danfoss’ Core & Clear strategy / 15

Business operations / 17

Leading technology / 18

Quality improvement of our products / 20

Effi cient organizational culture / 21

Corporate social responsibility / 23

Risk management / 25

Perspectives / 27

Plans for the year 2012 / 28

FINANCIAL STATEMENTS

Independent auditor’s report / 32

Balance sheet as per 31 December 2011 / 33

Comprehensive income statement for the year 2011 / 35

Cash fl ow statement (version II) for the year 2011 / 37

Statement of change in equity for the year 2011 / 38

Notes to the fi nancial statements / 39

tons of CO2 emission can be saved per year

if Europe doubles the use of district heating by up to 20% and boosts confi -dence in renewable energy sources.


Hig

hlig

hts

Hig

hlig

hts


BUSINESS REPORT

Net income on sales

Number of employees

Net return on capital

Sour

ce: F

inan

cial

Sta

tem

ents

Sour

ce: F

inan

cial

Sta

tem

ents

Sour

ce: F

inan

cial

Sta

tem

ents

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

50.000

55.000

60.000

65.000

70.000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

year

in €

Return on equityEBIT

EB

IT in

€

Re

turn

on

eq

uit

y i

n %

Key achievements in 2011in fi gures

0

50

100

150

200

250

300

350

2002 2003 2004 2005 2010 2011

year

2007 2008 20092006


Hig

hlig

hts

General Manager’s Report2011, a record turnover year for Danfoss Trata

2011 was another very successful year for

Danfoss Trata. Compared to 2010, the turn-

over increased by 27%, thus reaching a re-

cord value.

With the high sales in the fi rst half of the

year, we set the foundations for good re-

sults also in the second half of the year

when the sales growth rate decreased due

to unrest on fi nancial markets. Our leading

position in the district heating market was

strengthened in all the three regions that

are important to us – in Europe, Russia and

China.

The high demand for our products results

from increased interest in energy effi cient

solutions, as countries all over the world

strive to achieve energy independence and

safe energy supply due to climate change

and increasing energy prices.

The extreme profi tability of the year 2010

could not be exceeded this year, which can

be traced back to lower sales prices and

higher material costs, as well as to the in-

vestment in the establishment of the de-

velopment and production competence

centre for heat exchangers in Kamnik.

The project of relocation of development

and production from Finland to Slove-

nia began in 2010 with the preparation of

the premises in Kamnik. Last year, activities

continued that will contribute to our divi-

sion becoming the second largest supplier

of (soldered) heat exchangers worldwide.

Next year, at least three new or upgrad-

ed product models will be added to our

sales programme, bringing us an important

competitive advantage in the market. Con-

sequently, a 40% increase in turnover is ex-

pected in this product segment.

In the fi eld of development, we focused on

the development of a new generation of

electric motors for the regulation of larger

size valves in district heating systems. Our

eff orts resulted in the development of a

new electronics platform that regulates

brushless DC motors, which, apart from

controlling the speed of the motor, also

senses and regulates the motor power to

prevent overload.

Sales growth and expansion of operations

resulted in the need to strengthen our or-

ganization. In 2011, 82 new employees

joined us. We are proud of the high engage-

ment level of our employees, which even

increased in this year, as shown by the em-

ployee perception survey that over 90% of

the employees responded to. We will con-

tinuously engage in professional develop-

ment of our employees, strengthen their

competences and search for new opportu-

nities to promote effi ciency and innovation.

An exceptional year also for

Danfoss Group

For the second year in a row, Danfoss Group

achieved a record operating profi t. The

sales increased by 7.5% compared to 2010.

Good fi nancial results prove the effi ciency

of the new Core & Clear strategy that Dan-

foss introduced in 2010, which outlines the

direction of the company until 2015. Expo-

sure to banks was more than halved com-

pared to 2009.

Although several strategic goals in various

fi elds were reached sooner than expect-

ed, Danfoss still sees many possibilities of

improvement. We will strengthen the ba-

sics that we strive for: reliability, excellence

and innovation. In 2012, the main focus

will be on the establishment of a top sup-

ply chain that will make use of synergies,

economies of scale and high qualifi cation

level throughout the Group. We will con-

tinue to follow our strategic path towards

the targets set until 2015 and develop our

core activities that create the highest value

for customers globally.

Moderate sales growth also

expected for the following year

Also in the year 2012, turnover is expected

to increase in all production programmes,

in particular due to further economic

development of Russia and China. The main

challenge remains to maintain profi tability

and thus ensure sustainable growth and

development of Danfoss Trata. We believe

that through continued development proj-

ects, which, after having been successfully

completed, will result in further growth, as

well as through effi cient management of

the changes associated with the growth,

we will make use of our advantages and fol-

low our path successfully.

Aleksander Zalaznik

General Manager, Danfoss Trata

BUSINESS REPORT


Hig

hlig

hts

BUSINESS REPORT Key events of the year 2011

Relocation of production and development of heat

exchangers completed

In the beginning of the year, the production of heat exchangers began in

Kamnik, where it had been relocated from Finland. Thus we have set the

basis for the development of a competence centre for heat exchangers

in Slovenia.

Development activities resulted in new product

generations

In 2011, our development activities focused primarily on development of

the new generation of electric motors and larger size valves, as well as on

product modifi cations in the fi eld of balancing valves.

Danfoss Trata again one of the most innovative companies

in Slovenia

Chamber of Economy of Slovenia awarded a silver prize to Danfoss Tra-

ta and its experts for the innovation of HVAC iMCVTM motorized control

valves. The prize is the highest award for innovative achievements of Slo-

venian companies, and represents promotion of innovation in Slovenia.

The intelligent feature of the product is its anti-oscillation function.

Considerable increase in the number of employees,

engagement of all the employees at Danfoss Trata

increased further

In 2011, 82 new employees joined Danfoss Trata, whereof 28 were em-

ployed in the newly established development and production centre in

Kamnik, and 40 reinforced the operations of Controls business unit in Lju-

bljana and others. The employee perception survey showed a high level

of employee engagement, meaning that the result was even better than

the year before.

Danfoss Trata enjoys high reputation in the public

In May 2011, the Finance newspaper named Danfoss Trata best company

of the year 2010 on the basis of six indicators refl ecting the result of the

operations in the previous year: sales growth, high added value per em-

ployee, and return on assets and capital.

Preparations to join Danfoss Global Services

On 1 January 2012, the department Global Services Slovenia (GS) was es-

tablished within Danfoss Slovenia. The task of GS is to provide high quality

services to all business areas in the fi eld of fi nance, human resources, gen-

eral administration and building maintenance.


diff erent products are produced at Danfoss Trata.


Intr

oduc

tion

Intr

oduc

tion


MANAGEMENT REPORT Companyprofi le

Company name and registered offi ce

Danfoss Trata d.o.o., Jožeta Jame 16, 1210 Ljubljana Šentvid, Slovenija

Date and place of entry into the company register

24. 1. 1995, District Court in Ljubljana

Number of register entry

1/03245/00

Share capital

4.712,427.00 EUR

Company registration number

5226546

Tax number

90729587

Activities in accordance with the Decree on the standard classifi cation of economic activities

33.200 Assembly of industrial plant and equipment

Controlling company information

Since 1995, the company has operated as a member of the Danfoss International A/S

Group, Nordborgvej 81, 6430 Nordborg, Denmark, which is its 99,3606% owner as per 31

December 2011. Danfoss Trata's fi nancial statements are an integral part of the consolidated

fi nancial statements of the Danfoss A/S Group. The consolidated fi nancial statements are

presented on the website www.danfoss.com. Another company that operates in Slovenia

within Danfoss Group is Danfoss, Trgovinska družba d. o. o., Ljubljana. The company Danfoss

Compressors d. o. o., Črnomelj was acquired by the German holding Aurelius in July 2010.

Affi liated and associated companies

Institute Technological Centre for Vacuum Mechanics, VAKUUM–TC, 23.2% share - Danfoss

Trata d. o. o. is a co-founder of the institute, but has no management mandate in it. The

consolidated fi nancial statements are, therefore, not prepared. In this relation a long-term

investment in the nominal value of 834.59 Eur is shown on 31 December 2011.


Intr

oduc

tion

MANAGEMENT REPORT Nature of operations and activity

Organizationand management

of the company

The company's basic activity is production

and sales of equipment for process control

in air-conditioning, heating, and ventilation

systems.

The production programme

includes:

motors and valves for temperature

control in preparation of hot sanitary

water or water for heating,

pressure and fl ow regulators used

for system balancing – for district

heating as well as for secondary air-

conditioning systems and balancing of

lift pipes (balancing valves),

self-acting temperature regulators for

heating, hot sanitary water preparation,

and balancing of hot sanitary water

circulation systems,

plate heat exchangers

Company's bodies

General assembly and management board.

Company management

General Manager, Mr Aleksander Zalaznik, represents the management board of the com-

pany. The management of Danfoss Trata d. o. o. is based on statutory provisions and internal

acts and rules prepared in accordance with the ISO standards and the established modern

business practice.

Yearly fl ow of income on sales by operating area

2009 2010 2011

District heating Balancing valves HVAC Heat exchangers

13,9%

13,2%

7,9%


MANAGEMENT REPORT More than 70 years of company operations

Danfoss Tratain Danfoss

The beginnings of Danfoss Trata date back

to the year 1937, when Železolivarna Franc

Smole started operating in the fi eld of cast-

ing and machining of cast-iron products for

industry and public utility services. In the

years following the Second World War, the

development in the fi eld of central and dis-

trict heating installations brought about the

development of production programmes of

various regulation elements.

In 1957, the company was one of the found-

ers of the company Industrijsko montažno

podjetje, IMP, and quickly spread its produc-

tion programme to the fi eld of electronic reg-

ulators and valves. In the beginning of the

1990's, the company had almost a 90% mar-

ket share in the fi eld of district heating regu-

lation and air-conditioning in the territory of

former Yugoslavia.

Danfoss, a leading international company in

the fi eld of heating, refrigeration, and motion

systems regulation, with the registered offi ce

in Denmark, became Trata’s majority own-

er in 1995. One of the purposes of the take-

over was the establishment of a competence

centre for the development and production

of district heating components in Slovenia.

Therefore, Danfoss has invested in the de-

velopment from the very beginning and has

succeeded in consolidating the production of

district heating components dispersed in its

numerous factories throughout Europe.

Since 1995, Danfoss Trata has achieved

signifi cant results including exceptionally

profi table growth, introduction of modern

production principles and a highly devel-

oped supply chain. In 2003, Danfoss District

Heating business unit started intensive ex-

pansion from the operation associated with

components to the area of substations, it ac-

quired and set up businesses in numerous

countries in Europe and in China. Employees

from Danfoss Trata have contributed signif-

icantly to the operation of the whole busi-

ness unit, which in 2010 became a division

and was renamed Danfoss District Energy.

In 2008, the company Danfoss Trata com-

pleted the renovation and expansion of its

business and production premises in Lju-

bljana.

In 2011, due to closing down the produc-

tion in Finland, development, logistics and

production of heat exchangers were relocat-

ed to rented premises in Kamnik, Slovenia.

Today, Danfoss Trata is a successful develop-

ment and production company in the fi eld

of energy effi cient products and applica-

tions, providing solutions for effi cient miti-

gation of climate change. Our employees

live our ideas and strive to achieve our mu-

tual goals.

1957,

2010

1995.

2011,

2008,

1937,

2003,

1995

Danfoss, an international corporation with

its registered offi ce in Denmark, is a lead-

ing researcher, developer and producer of

mechanical and electronic components

and regulators. Danfoss' products contrib-

ute to comfortable life and at the same

time to a safe and clean environment. In

2011, Danfoss' annual turnover amounted

to 4,550 billion Eur. The company employs

over 24 thousand employees. It produc-

es regulators for cooling, heating and mo-

tion control devices throughout Europe,

North America, South America, and Chi-

na. Danfoss' sales network comprises over

110 sales companies. Danfoss continues

to expand globally, and has raised its ex-

pectations three times since 2010 because

the planned results were exceeded.

24 thousand employees.

110 sales companies.


Intr

oduc

tion

MANAGEMENT REPORT Danfoss District Energy

Danfoss’ Core & Clearstrategy

Visionof Danfoss Trata

tries throughout the world want to achieve

independence and self-suffi ciency in energy

supply, as energy prices are rising and global

warming is causing increasing concern.

Our promise

We provide leadership in our business

through reliability, excellence and innova-

tion – driving solutions within Climate and

Energy and true customer satisfaction.

Our aspiration

Danfoss is recognised as a global trendset-

ter. We passionately push boundaries on re-

sults and reputation.

Our behaviour

We build our business on trust. We are inno-

vative in our ambition to exceed expecta-

tions. We act globally while respecting local

cultures. We treasure sustainable results.

Danfoss consists of fi ve divisions, one of

them is Danfoss District Energy, in which

Danfoss Trata functions. Thus, Danfoss Trata

has strengthened the position of Danfoss'

core activities and got the opportunity to

continue the development of new, energy

effi cient and renewable solutions.

There are four core business units within the

division: Controls, Heavy Duty Stations, Light

Duty Stations in Heat Exchangers. Therefore,

Danfoss Trata got the opportunity to man-

age and develop the business area of com-

ponents for district heating and cooling, as

well as heat exchangers, not only from the

technical point of view, but due to its re-

sponsibility for business results also from the

business point of view.

Core & Clear strategy, launched two years

ago, shows good results. Danfoss' fi nancial

situation is sound, and it has an attractive

range of business areas. Focusing on cus-

tomers, improvement of quality and deliv-

eries is our key competitive advantage. The

strategy continues to optimize costs and im-

prove cash fl ow. Danfoss is growing, and so

is the need for new and better leaders. Con-

sequently, regular monitoring of employee

performance and potential and planning of

succession remains one of the key areas of

development.

On solid foundations, in the years to come

we will focus on the markets of Brazil, Russia,

India, China and the Middle East, especially

in the light of globalization and urbaniza-

tion, and above all, in the light of trends in

the fi eld of climate and energy. In spite of

the diffi cult fi nancial situation on the glob-

al market, an increasing number of coun-

Danfoss Trata will be a top business and

technology centre for district heating con-

trols with employees who will be able to

share their expertise and leadership skills

in accordance with the requirements of the

development of Danfoss.

Besides these business units, there are sev-

eral support functions, the most important

for Danfoss Trata being research and devel-

opment, where employees of Danfoss Trata

play the key role.

Danfoss District Energy develops and man-

ufactures products in Slovenia, Denmark,

Poland, Romania and in China. Danfoss is a

leading supplier of components and heat

exchangers for district heating and cool-

ing solutions. We are experts in compo-

nents and solutions used in district heating

stations that contribute to effi cient energy

use and its transmission for the purpose of

heating and ventilation. During 50 years of

activities in the fi eld of district heating regu-

lation, the division has developed numerous

competences. The division can, therefore, of-

fer custom-made solution to its customers

because of the wide standardized product

programme, its experiences and technical

knowledge. In markets where district heat-

ing is used as a heating source, Danfoss

District Energy has a widespread sales net-

work between wholesalers and customers

who install the division's products into their

own products. A strong trademark and pro-

duction effi ciency are two attributes that

diff erentiate our division from competi-

tors. Specialists and leaders in Danfoss Tra-

ta, especially those in the fi eld of technical

development, manufacture and logistics,

successfully participate in global projects

and lead processes that are important for

the whole division.


of the waste heat

yt

of the world's electricity productionis currently used for district heating. If this share was increased to a mere 12% globally, the energy savings would equal the energy generated by all of the world's wind turbines in the course of one year.


Busi

nes

s op

erat

ion

s

Busi

nes

s op

erat

ion

s


Product development

Great Britain. In the past year, the sales of

HVAC exceeded 21.3 million EUR globally,

which means that the sales increased by

more than 39%, compared to the equally

successful year 2010. Compared to 2009,

the sales of HVAC almost doubled in 2011.

Self-acting regulators

In 2011, a technological project was con-

ducted, using technical plastics in the

valve construction. Prototype tools for

membrane housings for ASV pressure

regulators were manufactured, and the

fi rst fi rmness tests were performed on

sample pieces.

Heat exchangers

The year 2011 was marked by the begin-

ning of heat exchanger production and

development in Slovenia. The sales range

of gasketed heat exchangers was renovat-

ed. A concept project was initiated, where

we intend to implement the »micro plate«

(MPHE) technology – currently used in

brazed exchangers – also in gasketed ex-

changers. An experimental environment

was established where measurements can

be carried out, which are required to con-

fi rm numeric models and to evaluate nu-

meric results.

Laboratory

New capacities were added to the labo-

ratory in the past year. One of the major

projects was the relocation of the labora-

tory from Finland to Kamnik. The project

involved construction of infrastructure,

relocation of machines and devices, and

production start-up. Among our main

the above enables us to develop prod-

ucts that set the standard for the future,

and are coordinated with production pro-

cesses.

lines are functional test of heat exchang-

ers, with current capacity of 500kW, oscilla-

tion pressure test, and static pressure test.

A line was also established for sustainable

test of valves with water temperatures up

to 150°C.

We started with the preparation of mea-

surement and testing instructions called

the Laboratory Practicum, and initiated

the activities to align the laboratories with

the EN 17025 standard defi ning all require-

ments to be met by testing and calibrating

laboratories.

In 2011, our development activities fo-

cused primarily on the development of

a new generation of electric motors and

larger size valves, modifi cation of products

in the fi eld of balancing valves, and sup-

port to quality activities.

Motors and valves

We have launched the VFM2 valve fam-

ily in DN65 to DN150 sizes to be used in

most demanding applications in district

heating. Our main target markets are Rus-

sia and China. In parallel with the develop-

ment of the valves, we have developed an

electric motor AMV (E) 65x. The advantag-

es of the new motor are its safety function,

high operation speed and simple assem-

bly.

Within product modifi cation, we com-

pleted in 2011 the project of optimiza-

tion of pressure independent AB-QM

valves, where the main target was to re-

duce the product's own-price. We have

further modifi ed the QT thermostat for a

lower temperature range. We have

changed the joining piece for the new

electric motor drive AM435 QM, and si-

multaneously changed the electronics

and the software of the motor itself.

The HVAC product range marked the year

2011 by the success of its most innovative

product iMCVTM. A successful sales tool

was developed – the iMCV control panel

– that is used by our sales staff to facilitate

the presentation of the iMCV and the an-

ti-oscillation function in various countries

like Russia, Ukraine, Sweden, Germany, and

We have a unique combination of knowl-

edge in the field of heating substations,

regulators and heat exchangers, a wide

sales range of regulators, and exception-

al experience with regard to the use of

our products in various applications. All

MANAGEMENT REPORT Leading technology

Danfoss is a leading supplier of compo-

nents for district heating and cooling ap-

plications. We are experts in solutions used

in district heating stations that contribute

to effi cient energy use and its transmission

for the purpose of heating and ventilation.


Busi

nes

s op

erat

ion

s

Development of supply chain and production processes

The same attention that is devoted to sales

growth by means of development of new

products has also been directed towards the

constant development and optimisation of

internal processes for a number of years. We

are aware that precise and reliable deliveries

are one of the most important demands of

our customers.

Our processes throughout the entire supply

chain are, therefore, precisely defi ned and

constantly improved, especially with the in-

tention to ensure the shortest delivery times

and simultaneously to reduce logistic costs.

Practices and experiences that Danfoss Trata

as a leading company has applied in opera-

tional processes for several years were also

successfully introduced in 2011 in the Kam-

nik unit, as well as in other companies within

the division, with special emphasis on Russia

and China.

Our business processes are primarily support-

ed by the SAP business information system.

In accordance with the forecasted consid-

erable sales increase, larger quantities were

produced in the fi rst months in order to be

able to deliver products to our customers

from stock in the second half of the year,

when our capacities would not be suffi -

cient to meet the demands of the market.

However, as the sales were relatively stable,

the second half of the year was mostly ded-

icated to the reduction of capacities and

stocks, also on the part of our suppliers.

Improved regulation of production was

achieved by means of the 5S system. All the

improvements lead to better results of our

operations, i.e. productivity and reduction

of delivery times.

The key technologies applied at Danfoss

Trata remain machining of components (i.e.

valve housing, valve cones, valve seats, and

bars) and assembly of semi-fi nished goods

and fi nished products. Our production pro-

gramme consists of six product groups with

a total of 3,500 diff erent products.

At the Kamnik site, the key technologies

are sheet metal forming on presses, assem-

bly of heat exchangers, vacuum soldering,

and product testing in accordance with

the directives. The production programme

includes two groups of brazed heat ex-

changers for district heating and cooling

applications, as well as gasketed heat ex-

changers. The total number of product ver-

sions exceeds 1,500.

The variety of production programme de-

mands a high fl exibility level from em-

ployees and equipment. Employees are

qualifi ed to work on several production

lines. Adaptability is also ensured with hired

employees.

Reliability and effi ciency of the machines

have been increased by means of various

techniques and lean production methods.

Increased prices of basic materials, e.g.

stainless steel, brass, and copper, resulted

in prices of intermediate goods which were

higher than in 2010. Consequently, we aug-

mented our activities to control our pur-

chasing costs.


MANAGEMENT REPORT Quality improvement of our products

In 2011, we systematically dealt with quality

improvement of products as well as of tech-

nologies in production and in development

of new products.

The so-called Q-pilot was introduced. This

is a process where an cross-functional team

systematically deals with a chosen product

type in which considerable deviations from

the required quality were noticed. The fi rst

Q-pilots show a great potential of improve-

ment in various areas, from the process of

new product development, component

production (internal and external), to the sta-

bility of assembly process and testing of the

fi nal product. In order to assure the quality

in the heat exchanger production in Kamnik,

several activities were conducted in relation

to obtaining the PED, ISO 9001 certifi cate,

and subsequently also the ISO14001.

We systematically engaged in the renova-

tion of the quality management system

based on the quality standard TS16949,

which is applied in automotive industry. We

are convinced that processes performed in

accordance with TS will assure even better

quality of our products.

The cost of non-quality remains on the same

level as the year before. Since the results of

systematic dealing with quality improve-

ment will show with approximately one

year's delay, the fi rst move towards the re-

duction of the number of claims is expect-

ed in 2012.


Busi

nes

s op

erat

ion

s

MANAGEMENT REPORT Effi cientorganizational culture

and better accessibility and transparen-

cy. It is aligned with Danfoss' concept and

with the Slovenian legislation. Employee

satisfaction with remuneration measured

in the employee perception survey (EPS)

increased by as much as six percentage

points, which also results from the new

system.

All the leaders in the organization, as well

as some key employees, were evaluated

systematically under the People Review

process with regard to their potential and

performance in the last year.

The year was also marked by continuous

eff orts to integrate Danfoss Trata sites in

Kamnik and in Ljubljana through various

personnel and communication activities.

Danfoss Trata remains a student-friendly

company. Tours of the company are orga-

nized for young university and high school

students, where they become acquainted

with the work in our company and with

employment opportunities. Danfoss Tra-

ta also off ers traineeship to students. This

is becoming a regular procedure, during

which students strengthen and expand

Danfoss has promoted the employees' de-

sire, energy and passion for innovation –

and built a strong organizational culture

encouraging the employees to share mu-

tual values and goals.

The strive for development and improve-

ment, as well as for turning good ideas

into excellent business results, is the key

connecting element within Danfoss,

which makes each employee surrounded

by dedicated employees. We continue to

create opportunities for our employees

who are able and willing to assume great-

er responsibilities.

Accepting challenges off ered by Danfoss'

international environment represents the

greatest opportunity for the development

of the majority of our employees. We try to

recognize their wishes, expectations and

potentials and at the same time provide

feedback regarding their performance.

Human resource management

We are continuously engaged in remune-

ration of employees, so we engaged in a

comprehensive revision of the salary sys-

tem marked by simplifi cation, renovation

the knowledge obtained at the facul-

ty, and we get to know prospective new

employee.

In 2011, the human resource management

department was reorganized, as it split in-

to two areas in accordance with Danfoss'

concept: human resource management as

part of Global Service covering the loca-

tion, and human resource management as

a business partner.

In 2011, 82 new employees joined Dan-

foss Trata, whereof 28 were employed in

the newly established development and

production centre in Kamnik, and 40 rein-

forced the operations of Controls business

unit in Ljubljana and others. 7 employees

left the company. We ended the year 2011

with 317 regular employees.

Employment was one of the key activities of

the year 2011. Trata is becoming increasingly

popular as a prospective future employer. Al-

most 3,000 candidates applied for jobs in our

company – while there were only 1,700 ap-

plicants in 2010. At the end of the year, the

project of preparing the e-employment tool

and a corresponding internet site started.

2010 2011

I. 41 40

II. 2 8

III. 51 62

IV. 32 38

V. 36 46

VI. 21 28

VII. 57 82

VIII. 3 13

Total 243 317

Age structure of employees Education structure of employees

from 18 to 29 years

15%

from 30 to 39 years

39%

from 40 to 49 years

25%

from 50 to 59 years

19% more then 60 years

2%


take part in on-boarding in various areas

during the initial few weeks of employ-

ment, in agreement with their immediate

leader.

Increasing employee engagement

Employees at Trata are motivated, satisfi ed

with their jobs, they strive to make an extra

eff ort, and wish to remain in the company.

This was shown by the employee percep-

tion survey that as many as 90% of the em-

ployees participated in. Our overall result

is 77, which represents high motivation, 2

points higher than in the year before.

Communication with employees

Communication with employees is among

the strategic areas of the human resource

management department. One of the key

tasks is to inform the stakeholders in an

appropriate and timely manner about var-

ious events, and to nurture a lasting rela-

tionship with them. Communication with

employees remains strengthened, and

employees are becoming increasingly fa-

miliar with the fi eld of communication,

which is the main source of information.

Direct communication between the man-

agement and the employees continued

successfully, and beside everyday con-

tacts, several meetings of all employees

were arranged, where information on the

market situation and its eff ect on our op-

erations was communicated promptly. On

top of meetings and gatherings of em-

ployees, we communicate with them in

writing and electronically. Every employee

is regularly informed of the developments

in Danfoss through internal newspapers.

At Danfoss Trata, we celebrate pleasant

personal events together. Colleagues al-

ways send greeting cards to new young

mothers and fathers, the management of

the company especially toasts to the em-

ployees who celebrate their 50th birthday,

we celebrate with all those who fi nish their

studies. A book of anecdotes, memories,

pictures and good wishes of colleagues is

prepared for each person who retires. Ev-

ery year, a party is organized for the former

employees, now pensioners, and Santa

Claus visits the children of our employees.

Education and training of

employees

In spite of the heavy workload, we pro-

vided for continuous development of

employees and encouraged internal

knowledge sharing, which was upgraded

with effi ciency measurement. More than

8,600 hours of internal and external edu-

cation were carried out, which is over one

half more than in 2010. On average, our

employee received 27 hours of training,

whereof half consisted of internal train-

ing. Tests of knowledge and practical use

of the knowledge showed that the train-

ing was highly effi cient, meaning that

the employees successfully implement in

their daily work the knowledge that they

gained.

According to previous year the proportion

of employees with VI. and VII. level of edu-

cation increased for more than 30%, while

the proportion of employees with VIII. lev-

el of education increased almost for 45%.

We continued with systematic on-board-

ing for new employees. New employees

Employee engagement

Reputation Management Immediate manager

Communica-tion

Cooperation Working conditions/daily work

Infl uence Compensa-tion

Professional and personal development


Busi

nes

s op

erat

ion

s

MANAGEMENT REPORT Corporate social responsibility

It is the objective of Danfoss to participate

actively in the global sustainable develop-

ment where social responsibility and care

for people and the environment go hand

in hand with successful business devel-

opment. We constantly strengthen our

eff orts since we believe that the fi nal re-

sults will be even better if the employees

are satisfi ed, if the consumption of sourc-

es is minimal and if the company is ethical

and respectable. On the basis of our vision

and fundamental values, Danfoss is trying

to be worthy of expectations of our stake-

holders. This is deeply rooted in our histo-

ry and culture, and is refl ected in the way

of our everyday business today and in the

future.

Since 2002, when Danfoss joined the UN Glob-

al Compact, social activities have been carried

out in accordance with these principles. The

ten principles of the Global Compact have

been integrated in a whole range of process-

es and business procedures since they en-

compass support and consideration of the

internationally recognized human rights, pro-

tection of employees’ rights and fi ght against

harassment, children’s work, discrimination at

work and against corruption, including extor-

tion and blackmailing.

We produce high-quality innovative products

in appropriate conditions. We are a responsible

company in local communities where we op-

erate. It depends on our reputation how we are


perceived as employer by our current employ-

ees, as well as by those that we wish to attract.

Our employees throughout the world fi nd

themselves in situations where they have to

make decisions that aff ect Danfoss’ reputation

and business. We know that we usually make

appropriate decisions and act in accordance

with company policy. But we also know that

in some circumstances doubts and uncertain-

ty arise. That is why Danfoss has its internal eth-

ics code containing ethics guidelines on the

situations requiring special attention of Dan-

foss employees and on unacceptable behav-

iour. Danfoss has also a special department that

answers question relating to ethics and ethics

telephone hotline for reporting on cases when

ethical rules may have been violated.

University and high school students have been

encouraged to visit Danfoss Trata and become

familiar with the work in the company and the

possibilities of employment. We also actively

encourage the sports of disabled persons. Our

employees are also active as authors of profes-

sional articles and lectures and they expand

their knowledge and experiences in the fi eld of

development in technique, quality and human

resource management.

Healthy, safe and well-organized

working environment

Warning of errors and prevention of injuries are

required to maintain a healthy and safe working

environment. By recognizing and recording the

risk, appropriate precautions are introduced in

order to prevent accidents. We continue to carry

out monthly safety checks with the aim of call-

ing the attention to possible danger in the fi eld

of work safety and health, as well as fi re safety.

Special attention was paid to the revision of Risk

Assessment, a regulation recognizing possible

danger and describing measures to prevent

such danger.

The total number of sick leave days increased

from 2.73% to 3.87%, short absence increased

from 1.81% to 2.39%. There were 6 occupational

injuries. In all the cases, the persons in charge of

health and work safety, together with the man-

agement, studied the cases and introduced

measures preventing similar injuries from hap-

pening again.

Employees of Trata are active in their spare time.

The Sports Society, established in 2010, was very

active, encouraging gathering of employees at

various events and promoting a healthy lifestyle.

The menu at Trata is still provided by excellent

cooks who prepare versatile and healthy dishes.

In 2011, Danfoss Trata joined the process of ob-

taining the Family-Friendly Enterprise certifi cate.

Commited to our environment

Strong environmental awareness has been a

part of Danfoss’ strategy for many years. It is not

refl ected only in our products, but also in the

development, purchase, use of raw materials,

energy consumption, handling of production

waste, and recycling. Danfoss Trata’s environ-

mental standards have been harmonized with

the ISO 14001 international environment man-

agement standard since 1998.

Experiences show that our competitive advan-

tage has improved, a lot of new knowledge re-

garding environmental factors was acquired

and the working atmosphere improved signif-

icantly due to the successful management of

environmental processes.

Indicators measuring the infl uence of our activ-

ity on the environment have been constantly

monitored. They have shown stable consump-

tion of natural resources for several consecutive

years. Special attention has been devoted to re-

ducing and separating waste.

Also in 2011, we took excellent care of the en-

vironment and carried out regular monitoring

and supervision of energy consumption. No en-

vironmental incidents were recorded.


Busi

nes

s op

erat

ion

s

MANAGEMENT REPORT Risk management

Management of all types of risks through-

out Danfoss Group has become an impor-

tant element of long-term development of

the Group. It is an integral part of long-term

strategic documents of individual busi-

ness units within Danfoss. Consequently,

risk management is an important element

in planning of annual activities in separate

organizational units within these business

units.

Risk management has been entirely cen-

trally managed and controlled: these are

mainly risks associated with information

technology and risks associated with the

principles of physical security of proper-

ty and all kinds of protection of property,

persons and responsibilities. The central

management is also refl ected in mandato-

ry standards in this area as well as in regu-

lar supervisions of compliance with these

standards, which result in the assessment

of the situation and (if necessary) recom-

mendations on concrete measures.

Business risks

Danfoss Trata manages business risks in

several parallel ways: through strategic

planning of product and market develop-

ment on the level of divisions, by devel-

oping partnership relations with suppliers

and by introducing a »multi-sourcing« sys-

tem for critical codes, and last but not least

by continuous care for product quality and

well-being of all the employees.

Financial risks

Considering the sales structure and sourc-

es of funds, we believe that the company

is not seriously exposed to fi nancial risks.

Since 99% of total turnover is recorded

within the Danfoss corporation, the expo-

sure to the lack of payment discipline is

negligible. Our operating results are excel-

lent. Our main fi nancial and business risks

are changes of prices of non-ferrous met-

als, but even these can be controlled with

the support from the appropriate corpo-

rate functions.


we will deliver on the basics:

quality, excellent deliveries and innovation.


Pers

pec

tives

Pers

pec

tives


MANAGEMENT REPORT Plans for the year 2012

tinued. Three additional products for dis-

trict heating applications will be transferred

from China.

A new organization will be established

within Danfoss in Slovenia as of 1 January

2012 -– Global Services Slovenia, abbrevi-

ated name GS Slovenia. The task of GS is to

provide high quality services to all business

areas in the fi eld of fi nance, human resourc-

es, general administration and building

maintenance. GS Slovenia will be a part of

the large Danfoss Global Services family,

covering Danfoss' sales and production or-

ganizations worldwide.

We will continue to take care of the pro-

fessional development of our employ-

ees, including competence development,

knowledge sharing through internal ed-

ucation and training, and search for new

possibilities to stimulate the effi ciency and

inventiveness of our employees.

Business environment for district heating

and cooling is becoming very dynamic, es-

pecially because of the commitment to re-

duce CO2 emissions. We are confi dent that

we make good use of all our advantages

and successfully continue along our path

as planned.

organization to achieve high quality, and

move ahead with the introduction of the

fi rst TS processes.

Also, we will intensify the eff orts to achieve

the effi ciency of our product portfolio. We

will focus on promoting our active role in

generating ideas for new products and in

launching new products on the market.

Our plans include the improvement of the

sales forecasting and planning processes,

where deviations from the required situa-

tion were established, as well as optimiza-

tion of stocks, all with the aim of ensuring

excellent deliveries on the market, along

with strong business results for Danfoss.

Apart from the above, we are planning a

reduction of purchasing costs.

In the fi eld of electric motors and valves,

our main goal for 2012 is to complete the

AMV(E) electric motors and to start with

the sales. In the fi eld of self-acting regu-

lators, we have started the project of de-

veloping the regulator for the latest fl at

substations, which provides a major op-

portunity to expand the sales in the Dis-

trict Energy Division. A new generation of

automatic balancing valves will be intro-

duced. Certain improvements will also be

made in the fi eld of automatic balancing

valves.

In the fi eld of heat exchangers, numerous

activities that began in 2011 will be con-

The year 2012 will be marked by battles

that we have to win, including improved

profi tability and growth in Europe, innova-

tion in Controls business unit, and taking

advantage of numerous opportunities in

the fi eld of district heating in China. It is al-

so our goal to become second largest sup-

plier in heat exchangers, and the leader in

gasketed heat exchangers.

We will deliver on the basics and become

leaders in quality, provide excellent deliver-

ies and remain innovative.

By 2015, we will focus intensively on growth

on the market and on business excellence.

In four years, we wish to double our sales

and take advantage of the global environ-

ment protection trend, as well as encour-

age countries to engage actively in eff orts

to use less energy in a more effi cient way,

and to raise the awareness of consumers.

Danfoss Trata plans to reach turnover in the

value of 75 million €, representing a 10% in-

crease compared to the year before. Out

of this value, approximately 10 million will

originate from heat exchangers whose pro-

duction and development was established

in Kamnik in the beginning of 2011.

Our targets for the year 2012 are clear: to

contribute as much as possible to improve

the quality of products and services, to

achieve customer satisfaction and provide

the best possible support when problems

arise. We will continue to strengthen our


Pers

pec

tives


Fin

anci

al S

tate

men

ts

Fin

anci

al S

tate

men

ts


Fin

anci

al S

tate

men

ts

in EUR

Note 31 Dec. 2011 31 Dec. 2010

Assets 52,293,874 47,497,055

A. Long-term assets 23,144,965 17,762,148

I. Intangible assets and long-term deferred costs and accrued revenue 1 94,040 77,758

1. Concessions, patents, licences, trade marks and similar rights 94,040 77,758

II. Property, plant and equipment 2 22,789,512 17,440,591

1. Land and buildings 9,011,581 9,743,093

a) Land 763,984 763,984

b) Buildings 8,247,598 8,979,109

2. Manufacturing plant and equipment 11,760,825 6,073,720

3. Other plant and equipment 1,516,807 387,666

4. Property, plant and equipment being acquired 500,298 1,236,112

a) Property, plant and equipment in the course of construction 478,767 1,086,031

b) Advances for acquisitions of property, plant and equipment 21,531 150,081

III. Investment property 0 0

IV. Long-term investments 835 835

1. Long-term investments, excluding loans 835 835

a) Other long-term investments 835 835

V. Long-term operating receivables 3 106,035 103,576

1. Long-term operating receivables due from others 106,035 103,576

VI. Deferred tax assets 4 154,544 139,388

B. Current assets 29,124,721 29,708,933

I. Assets (disposal groups) held for sale 0 0

II. Inventories 5 10,533,265 6,966,952

1. Material 7,146,253 4,271,613

2. Work in progress 3,173,247 2,401,874

3. Products and merchandise 213,765 293,465

III. Short-term investments 6 478 2,935

1. Short-term loans 478 2,935

a) Short-term loans to group companies 0 0

b) Short-term loans to others 478 2,935

IV. Short-term operating receivables 18,568,520 18,208,829

1. Short-term operating receivables due from group companies 7 17,375,049 17,169,091

2. Short-term operating trade receivables 8 150,709 111,300

3. Short-term operating receivables due from others 9 1,042,762 928,438

V. Cash 10 22,459 4,530,217

C. Short-term deferred costs and accrued revenue 11 24,187 25,974

D. Off -balance sheet assets 12 300,999 300,999

1. BALANCE SHEET as at 31 December 2011


in EUR

Note 31 Dec. 2011 31 Dec. 2010

Liabilities 52,293,874 47,497,055

A. Equity 13 33,131,194 36,158,344

I. Called-up capital 4,724,028 4,724,028

1. Share capital 4,724,028 4,724,028

II. Capital surplus 4,607,288 4,607,288

III. Revenue reserves 942,468 942,468

1. Legal reserves 942,468 942,468

IV. Revaluation surplus 0 0

V. Retained earnings 14,884,561 15,592,386

VI. Net profi t or loss for the period 7,972,850 10,292,174

B. Provisions and long-term accrued costs and deferred revenue 14 1,860,395 1,310,208

1. Provisions for pensions and similar liabilities 872,749 675,289

2. Other provisions 789,895 434,790

3. Long-term accrued costs and deferred revenue 197,751 200,129

C. Long-term liabilities 0 0

I. Long-term fi nancial liabilities 0 0

II. Long-term operating liabilities 0 0

III. Deferred tax liabilities 0 0

D. Short-term liabilities 16,065,671 9,161,870

I. Liabilities of disposal groups 0 0

II. Short-term fi nancial liabilities 10,257,442 146,431

1. Short-term fi nancial liabilities to group companies 15 10,058,010 0

2. Short-term fi nancial liabilities to banks 16 197,585 146,431

3. Short-term fi nancial liabilities to others 1,847 0

III. Short-term operating liabilities 5,808,229 9,015,439

1. Short-term operating liabilities to group companies 17 1,484,070 1,027,049

2. Short-term trade payables 18 3,464,570 6,148,923

3. Other short-term liabilities 19 859,589 1,839,467

E. Short-term accrued costs and deferred revenue 20 1,236,614 866,633

F. Off -balance sheet liabilities 12 300,999 300,999


Fin

anci

al S

tate

men

ts

2. COMPREHENSIVE INCOME STATEMENT for the year 2011

in EUR

Note 2011 2010

1.Net sales 21 68,574,448 53,960,130

a) Net revenue from sale in the domestic market 421,238 250,876

b) Net revenue from sales in the foreign market 68,153,209 53,709,254

2. Production cots of goods sold (Including depreciation and amortisation) or costs of goods sold 22 -42,790,414 -30,577,296

3. Gross profi t or loss from sales (1 - 2) 25,784,034 23,382,834

4. Selling costs (including depreciation and amortisation) 22 -721,190 -347,600

5. General and administrative costs (including depreciation and amortisation) 22 -15,152,039 -10,447,420

a) General and administrative costs -14,849,808 -10,447,163

b) Revaluation operating expenses associated with intangible assets and property, plant and equipment

0 -257

c) Revaluation operating expenses associated with current operating assets, excluding investments and investment property

-302,231 0

6. Other operating revenue (including revaluation operating revenue) 23 349,641 369,680

7. Financial revenue from shares 0 0

8. Financial revenue from loans 24 36,148 27,606

a) Financial revenue from loans to group companies 32,004 25,003

b) Financial revenue to others 4,144 2,603

9. Financial revenue from operating receivables 25 17,253 16,153

a) Financial revenue from operating receivables due from group companies 1,036 68

b) Financial revenue from operating receivables due from others 16,216 16,085

10. Financial expenses due to impairment and write-off s of investments 0 0

11. Financial expenses for fi nancial liabilities 26 -142,387 -117,445

a) Financial expenses for loans received from group companies -63,784 -95,084

b) Financial expenses for loans received from banks -78,603 -22,361

12. Financial expenses for operating liabilities 27 -16,994 -12,570

a) Financial expenses for operating liabilities to group companies -596 -1,067

b) Financial expenses for trade payables and bills payable -16,398 -10,934

c) Financial expenses for other operating liabilities 0 -569

13. Other revenue 28 19,567 41,699

14. Other expenses 29 -5,892 -2,628

15. Income tax 30 -2,210,447 -2,624,772

16. Deferred taxes 15,156 6,637

17. Net profi t or loss for the period (3-4-5+6+7+8+9-10-11-12+13-14-15+16) 7,972,850 10,292,174


in EUR

Note 2011 2010

18. Changes in surplus from revaluation of intangible assets and property, plant and equipment

0 0

19. Changes in surplus from revaluation of available-for-sales fi nancial assets 0 0

20. Profi ts and loss from translations of the fi nancial statements of foreign operations 0 0

21. Actuary profi ts and losses of programmes including certain benefi ts (employee benefi ts) 0 0

22. Other components of comprehensive income 0 0

23. Total comprehensive income (17+18+19+20+21+22) 7,972,850 10,292,174

24. Retained profi t 14,884,561 15,592,386

25. Reversal (release) of capital surplus 0 0

26. Reversal (release) of revenue reserves by individual kinds of these reserves 0 0

27. Allocation (additional formation) of revenue reserves by individual kinds of these reserves 0 0

28. Accumulated profi t (as a sum of net profi t and adequate items 18, 20 and 21) 22,857,410 25,884,560


Fin

anci

al S

tate

men

ts

3. CASH FLOW STATEMENT (Format II) for the year 2011

in EUR

Note 2011 2010

A. Cash fl ows from operating activities 31

a) Items of income statement 12,421,054 13,285,461

Operating revenue (except from revaluation) and fi nancial revenue from operating receivables 68,639,452 54,063,554

Operating expenses excluding depreciation or amortisation (except from revaluation) and fi nancial expenses from operating liabilities

-54,023,107 -38,159,958

Income taxes and other taxes not included in operating expenses -2,195,291 -2,618,135

b) Changes in net operating assets in balance sheet items (including accruals and deferrals, provisions and deferred tax assets and liabilities)

-7,042,130 -105,205

Opening less closing operating receivables -344,823 -2,562,384

Opening less closing deferred costs and accrued revenue 1,787 -11,062

Opening less closing deferred tax assets -15,156 -6,637

Opening less closing assets (disposal groups) held for sale 0 0

Opening less closing inventories -3,809,583 -1,963,981

Closing less opening operating liabilities -3,207,210 4,039,482

Closing less opening accrued costs and deferred revenue and provisions 332,855 399,377

Closing less opening deferred tax liabilities 0 0

c) Net cash from operating activities (a + b) 5,378,923 13,180,256

B. Cash fl ows from investing activities

a) Cash receipts from investing activities 45,883 3,026,208

Interest and dividends received from investing activities 36,148 27,606

Cash receipts from disposal of intangible assets 0 0

Cash receipts from disposal of property, plant and equipment 7,278 0

Cash receipts from disposal of investment property 0 0

Cash receipts from disposal of long-term investments 0 0

Cash receipts from disposal of short-term investments 2,457 2,998,602

b) Cash payments from investing activities -8,901,188 -2,268,213

Cash payments to acquire intangible assets -53,958 -6,916

Cash payments to acquire property, plant and equipment -8,847,230 -2,261,297

Cash payments to acquire investment property 0 0

Cash payments to acquire long-term investments 0 0

Cash payments to acquire short-term investments 0 0

c) Net cash from investing activities (a + b) -8,855,305 757,995

C. Cash fl ows from fi nancing activities

a) Cash receipts from fi nancing activities 10,111,011 0

Cash proceeds from paid-in capital 0 0

Cash proceeds from increase in long-term fi nancial liabilities 0 0

Cash proceeds from increase in short-term fi nancial liabilities 10,111,011 0

b) Cash payments from fi nancing activities -11,142,387 -9,408,187

Interest paid on fi nancing activities -142,387 -117,445

Cash repayments of equity 0 0

Cash repayments of long-term fi nancial liabilities 0 0

Cash repayments of short-term fi nancial liabilities 0 -7,990,742

Dividends and other profi t shares paid -11,000,000 -1,300,000

c) Net cash from fi nancing activities (a + b) -1,031,376 -9,408,187

D. Closing balance of cash 22,459 4,530,217

x) Net cash infl ow or outfl ow for the period (sum total of net cash Ac, Bc and Cc) -4,507,758 4,530,064

+

y) Opening balance of cash 4,530,217 153


4. STATEMENT OF CHANGES IN EQUITY for the year 2011

STATEMENT OF CHANGES IN EQUITY for the year 2010

in EUR

Share capital Capital surplus Legal reserves Retained net profi t

Net profi t for the period

Total

A.1. Balance as at 31 Dec. 2010 4,724,028 4,607,288 942,468 15,592,386 10,292,174 36,158,344

A.2. Balance as at 1 Jan. 2011 4,724,028 4,607,288 942,468 15,592,386 10,292,174 36,158,344

B.1. Changes in equity capital – transactions with

0 0 0 -11,000,000 0 -11,000,000

a) Payment of shares in profi t 0 0 0 -11,000,000 0 -11,000,000

B.2. Total comprehensive income for the reporting period

0 0 0 0 7,972,850 7,972,850

a) Net profi t or loss for the reporting period

0 0 0 0 7,972,850 7,972,850

B.3. Changes in equity 0 0 0 10,292,174 -10,292,174 0

a) Allocation of the remaining portion of net profi t of comparative reporting period to other components of equity

0 0 0 10,292,174 -10,292,174 0

C. Balance as at 31 Dec. 2011 4,724,028 4,607,288 942,468 14,884,560 7,972,850 33,131,194

in EUR

Share capital Capital surplus Legal reserves Retained net profi t

Net profi t Total

A.1. Balance as ta 31 Dec. 2009 4,724,028 4,607,288 942,468 10,662,290 6,230,096 27,166,170

A.2. Balance as at 1 Jan. 2010 4,724,028 4,607,288 942,468 10,662,290 6,230,096 27,166,170

B.1. Changes in equity capital – transactions with

0 0 0 -1,300,000 0 -1,300,000

a) Payment of shares in profi t 0 0 0 -1,300,000 0 -1,300,000

B.2. Total comprehensive income for the reporting

0 0 0 0 10,292,174 10,292,174

a) Net profi t or loss for the reporting period

0 0 0 0 10,292,174 10,292,174

B.3. Changes in equity 0 0 0 6,230,096 -6,230,096 0

a) Allocation of the remaining portion of net profi t of comparative reporting period to other components of equity

0 0 0 6,230,096 -6,230,096 0

C. Balance as at 31 Dec. 2010 4,724,028 4,607,288 942,468 15,592,386 10,292,174 36,158,344


Fin

anci

al S

tate

men

ts

5. NOTES TO THE FINANCIAL STATEMENTS

Registered offi ce and legal form of the company:

Danfoss Trata d.o.o., Jožeta Jame 16, 1210

Ljubljana Šentvid

Nature of operation and the most important activities:

33.200 Installation of industrial machinery

and equipment

Name of the controlling company:

Danfoss International A/S

No. of employees at the end of the accounting period:

317

Average number of employees in the accounting period:

293

Financial year of the company:

The fi nancial year equals the calendar year.

Financial statements for the previous year 2010:

The fi nancial statements for the previous

year that ended on 31 December 2010

were audited by KPMG Slovenija, d.o.o. and

an unqualifi ed audit opinion was issued.

5.1. SUMMARY OF ACCOUNTING

POLICIES

The fi nancial statements contained in this

report have been prepared in compliance

with Slovenian Accounting Standards 2006

issued by the Slovenian Institute of Auditors.

The fi nancial statements are presented in

euros.

During the preparation of fi nancial state-

ments the management of the Company

has expressed certain opinions, estimates

and assumptions that aff ected the applica-

tion of accounting policies and the reported

amounts of assets, liabilities, revenue and

expenses. The actual results may diff er from

these estimates.

The present fi nancial statements have been

prepared in accordance with the Slovenian

Accounting Standards (valid since 1 Janua-

ry 2006) and the basic accounting assump-

tions – accrual basis, consistency and going

concern.

Important accounting policies used by the

Company to recognise and measure parti-

cular balance sheet items are as follows:

1. Intangible assets and property, plant and

equipment are valued at cost. The cost in-

cludes the acquisition price, import du-

ties, non-refundable purchase taxes and

costs that are directly attributable costs

of bringing the asset to working condi-

tion for its intended use, particularly the

costs of transport and installation, disman-

tling, removal or reconstruction. The Com-

pany does not present any property, plant

and equipment including costs of disman-

tling, removal and reconstruction in its fi -

nancial statements. Intangible assets and

property, plant and equipment are amor-

tised/depreciated (single-asset amortisa-

tion/depreciation) using the straight-line

method of amortisation/depreciation. Pro-

perty, plant and equipment or an intangi-

ble asset shall be subject to depreciation/

amortisation on the fi rst day of the month

which follows its putting into operation wi-

th a view to performing the activity for whi-

ch it is intended. The cost model is used for

measurement according to the recognition

of an item of intangible assets or proper-

ty, plant and equipment. If the book value

of an intangible asset or of property, plant

and equipment exceeds its recoverable va-

lue, the book value is decreased due to im-

pairment.

2. Short-term investments in loans are valu-

ed at the amounts paid.

3. Inventories of material and merchandise

are originally valued at actual cost compri-

sing of the acquisition price, import duties

and non-refundable purchase taxes, and di-

rect purchasing costs. The acquisition price

is reduced by discounts granted. Inven-

tories of work in progress and of fi nished

products are valued at production costs.

General production costs include mainly

the costs of auxiliary materials, low value as-

sets, depreciation of production equipment

and salaries of overhead workers in produc-

tion. The use of inventories is valued accor-

ding to the FIFO method. Adjustments for

inventories are made on the basis of the

actual use in the past 6, 12 and 24 months

by a 25 %, 50 % and 75 % write-off ratio in

compliance with the accounting policy of

the Group. An adjustment of 90 % is made

for the inventories other than those in the

sales programme. The inventories do not

exceed the net realisable value.

4. Initially, receivables of all kinds are re-

ported in amounts recorded in the rele-

vant book-keeping documents under the

assumption that the amounts owed will

be also collected. Receivables are revalued

due to impairment, if their accounting va-

lue exceeds their fair or realisable value. The

receivables are revalued due to elimination

of impairment if their fair or realisable value

exceeds the book value. Adjustments for re-

ceivables are made individually due to non-

-collectibility of receivables: in the amount

of 100% for the receivables in the recovery

procedure.

5. Cash includes cash in hand and cash in

bank. On the balance sheet date the funds

in the foreign currency account are transla-

ted at the middle exchange rate of Bank of

Slovenia for each individual currency.

6. Short-term accruals and deferrals inclu-

de receivables and other assets and liabi-

lities that are expected to occur within a

year. Their occurrence is probable and their

amounts have been estimated reliably. De-

ferred costs and accrued revenue include

short-term deferred costs or short-term de-

ferred expenses, and short-term accrued

revenue, which are presented separately.

Accrued costs and deferred revenue inclu-

de short-term accrued costs or expenses

and short-term deferred revenue, which are

presented separately.

7. The total capital of the Company is clas-

sifi ed as share capital, capital surplus, legal

reserves, retained net profi t or loss and net

profi t or loss for the period.

8. Provisions are formed for those liabilities

that are expected to occur within a period

longer than a year, according to the binding

previous events, and their value has been

estimated reliably. The value of provisions at


the end of the accounting period is the sa-

me as the present value of expenses, which

are expected to be needed for the settle-

ment of liabilities. Provisions for jubilee be-

nefi ts and termination benefi ts are formed

on the basis of actuary calculations that

are made once a year. Provisions for repa-

irs or replacement of products in the gua-

rantee period are formed in the amount of

0.3 % of the sales value of the products sold

in the past 18 months. Provisions for the

Danfoss share option programme liabilities

intended for the management are calcula-

ted at the Group level. Long-term accrued

costs and deferred revenue include defer-

red revenue that will cover the expected

expenses in a period longer than a year.

Long-term deferred revenue also includes

government grants and donations received

to acquire fi xed operating assets or to co-

ver certain expenses. They were intended

to cover the depreciation and amortisa-

tion expense of these assets or of specifi c

expenses and are utilised by their transfer

to operating revenue.

9. Long-term and short-term liabilities are

recognised liabilities associated with fi nan-

cing of own resources. Financial liabilities

arise from the receipt of funds from lenders.

Financial liabilities are also loans obtained

on the bases of loan agreements. Liabiliti-

es are also operating ones when suppliers

deliver components needed for production

and render services to the company. Ope-

rating liabilities are suppliers’ credits for the

goods or services purchased, short-term li-

abilities to the employees and the state.

Long-term debts have to be repaid or set-

tled in a period longer than a year, while

short-term debts are to be returned or set-

tled in a period up to one year.

10. Revenue is recognised upon the transi-

tion of risks and ownership to a buyer. Reve-

nue is not recognised in case of uncertainty

regarding the repayment, if there is a possi-

bility that additional expenses will be incur-

red or if there is a possibility that the goods

will be returned.

11. Expenses are divided into operating

expenses, fi nancial expenses and other

expenses. Operating expenses are basically

equal to the accrued expenses in the acco-

unting period, increased by costs included

in the initial inventories of products and

work in progress, and reduced by costs re-

tained in fi nal inventories of products and

work in progress. Revaluation operating

expenses appear in relation to property,

plant and equipment, intangible assets and

current operating assets due to their impa-

irment. According to their purpose (functi-

on) operating expenses are classifi ed into

production costs of quantities sold, cost of

quantities sold and indirect costs of purcha-

sing and sale, direct costs of sale, indirect

costs of common services and revaluation

operating expenses, which are not consi-

dered costs. Financial expenses are expen-

ses for fi nancing and for investing. Other

expenses consist of extraordinary items and

other expenses reducing profi t or loss.

12. On the balance sheet date, receivables

and liabilities expressed in foreign currenci-

es are translated into the national currency

at the middle exchange rate of the Bank of

Slovenia. The exchange gains/losses repre-

sent fi nancial revenue or expenses.

13. Deferred tax assets are income tax amo-

unts that will be returned in the following

periods, regarding the deductible tempo-

rary diff erences. Deferred tax assets rela-

ting to deductible temporary diff erences

are recognised if an available taxable profi t

is likely to occur, which can be debited by

deductible temporary diff erences. Deferred

tax assets are presented as long-term rece-

ivables.

14. The Company considers its entire ope-

rations organised in one business and geo-

graphical segment.

Date of approval of the fi nancial statements

The management board of the company

reviewed and approved the submitted fi -

nancial statements on 26 June 2012.

5.2. NOTES TO THE ITEMS OF

FINANCIAL STATEMENTS

Notes to the items of fi nancial statements

refer to the year 2011, unless otherwise spe-

cifi ed.


Fin

anci

al S

tate

men

ts

in EUR

31 Dec. 2011 31 Dec. 2010

1. Intangible assets and long-term deferred costs and accrued revenue 94,040 77,758

in EUR

31 Dec. 2011 31 Dec. 2010

2. Property, plant and equipment 22,789,512 17,440,591

Intangible assets mainly include software that has an annual amortisation rate of 20%. The movement of intangible assets in 2011 was as

follows (in EUR):

Movement of property, plant and equipment in the year 2011 was as follows (in EUR):

Other intangible assets Total

Cost

Balance as at 1 Jan. 2011 1,271,150 1,271,150

Increase 53,959 53,959

Decrease 0

Balance as at 31 Dec. 2011 1,325,109 1,325,109

Accumulated amortisation

Balance as at 1 Jan. 2011 1,193,392 1,193,392

Amortisation 37,677 37,677

Decrease 0

Balance as at 31 Dec. 2011 1,231,069 1,231,069

Carrying amount

Balance as at 1 Jan. 2010 77,758 77,758

Balance as at 31 Dec. 2011 94,040 94,040

Land Constructions Manufactur-ing plant and

equipment

Other plant and equip-

ment

Fixed assets in the course of construc-

tion

Advances for fi xed operat-

ing assets

Total

Cost

Balance as at 1 Jan. 2011 763,984 16,548,536 19,514,832 1,783,542 1,086,031 150,081 39,847,006

Increases 0 0 0 0 8,979,024 0 8,979,024

Increase from fi xed assets 0 1,044,340 8,125,548 416,400 -9,586,288 0 0

Transfer 0 0 0 0 0 0 0

Decreases 0 0 -108,544 -24,542 0 -128,550 -261,636

Balance as at 31 Dec. 2011 763,984 17,592,876 27,531,836 2,175,400 478,767 21,531 48,564,394

Accumulated depreciation

Balance as at 1 Jan. 2011 0 7,569,427 13,441,112 1,395,876 0 0 22,406,415

Depreciation 0 844,694 2,435,198 218,416 0 0 3,498,308

Transfer 0 0 0 0 0

Decreases 0 0 -105,299 -24,542 0 0 -129,841

Balance as at 31 Dec. 2011 0 8,414,121 15,771,011 1,589,750 0 0 25,774,882

Net carrying amount

Balance as at 1 Jan. 2011 763,984 8,979,109 6,073,720 387,666 1,086,031 150,081 17,440,591

Balance as at 31 Dec. 2011 763,984 9,178,755 11,760,825 585,650 478,767 21,531 22,789,512


in EUR

31 Dec. 2011 31 Dec. 2010

4. Deferred tax assets 154,544 139,388

The Company owns 8,811 m2 of land and an offi ce and production building with a total area of 15,186 m2. Fixed operating assets have been

insured against business risk and damages. Fixed operating assets of the Company have not been pledged as security for its liabilities. The

Company has no assets acquired under lease and does not lease out any assets.

The item includes a long-term receivable for the collateral relating to the Lease contract for business premises concluded with Biring Sku-

pina, d.o.o., and a long-term receivable due from employees relating to the sale of apartments under the conditions of the Housing Act.

Movement of long-term operating receivables due from other buyers (in EUR):

As at 31 Dec. 2011 the Company recorded deferred tax assets arising from adjustments for inventories made (EUR 7,806), provisions for jubi-

lee benefi ts and termination benefi ts upon retirement (EUR 114,749), provisions for warranties (EUR 30,206) and impairment of receivables

(EUR 1,783). Deferred tax assets are calculated using a 20 % rate.

in %

2011 2010

Characteristic amortisation / depreciation rates are:

- buildings 5,00 5,00

- manufacturing plant 14,29-25,00 14,29-25,00

- computer equipment 33,33 33,33

- vehicles 14,29-33,33 14,29-33,33

- low value assets 25,00 25,00

in EUR

31 Dec. 2011 31 Dec. 2010

3. Long-term operating receivables due from other customers 106,035 103,576

Long-term operating receivables for the collateral relating to the Lease contract for business premises concluded with Biring Skupina, d.o.o.

105,087 101,735

Long-term operating receivable for the apartment contract for hire purchase based on the Housing Act 948 1,841

Balance - 1 Jan. 2011 Increases Decreases Balance - 31 Dec. 2011

Long-term operating receivable for the collateral relating to the Lease contract for business premises concluded with Biring Skupina, d.o.o.

101,735 3,353 0 105,087

Long-term operating receivable for the apartment contract for hire purchase bases on the Housing Act

1,841 0 893 948

Total 103,576 3,353 893 106,035


Fin

anci

al S

tate

men

ts

Movement of deferred tax assets (in EUR):

Adjustments for obsolete inventories made in accordance with the accounting principles were made to the credit of revaluation revenue

associated with current operating assets in the amount of EUR 41,042. Write-off s of unusable inventories were recorded in the amount of

EUR 274,020. The inventories have been insured against business risks and damages. The inventories have not been pledged as security for

the Company’s liabilities.

Inventory-taking diff erences in 2011 were as follows (in EUR):

As at 31 December 2011 the book value of inventories does not exceed the net realisable value of inventories.

Balance - 1Jan. 2011 Increases Decreases Balance - 31 Dec. 2011

Deferred tax assets - adjustment for inventories 10,545 0 2,739 7,806

Deferred tax assets - adjustment for jubilee benefi ts and termination benefi ts

98,535 16,214 114,749

Deferred tax assets - impairment of receivables 0 1,783 1,783

Deferred tax assets - provisions for warranties 30,308 102 30,206

Total 139,388 17,997 2,841 154,544

in EUR

31 Dec. 2011 31 Dec. 2010

5. Inventories 10,533,265 6,966,952

Material 8,362,990 4,905,702

Adjustment for obsolete inventories of material -1,216,737 -634,089

Work in progress and semi-fi nished goods 3,397,439 2,520,260

Adjustment for obsolete inventories of work-in-progress -224,193 -118,386

Products 222,301 303,223

Adjustment of obsolete inventories of fi nished products -34,234 -10,291

Goods 26,711 533

Adjustment of obsolete inventories of merchandise -1,012 0

Advances for inventories 0 0

Surplus Defi cit Net

Material 242,380 248,679 -6,299

Work-in-progress 144,724 146,476 -1,751

Products 37,766 49,596 -11,829

Merchandise 0 0 0

Total 424,870 444,750 -19,879


Short-term loans to others include a short-term loan amounting to EUR 478 having an interest rate of 2.269% p.a. and maturity of 10 Fe-

bruary 2012.

As at 31 December 2011 receivables due from companies in the Danfoss Group were as follows (in EUR):

As at 31 December 2011 maturity of receivables due from group companies at carrying amount (in EUR):

Receivables due from group companies have not been secured.

in EUR

31 Dec. 2011 31 Dec. 2010

6. Short-term investments 478 2,935

Short-term loans to group companies 0 0

Short-term loans to others 478 2,935

in EUR

31 Dec. 2011 31 Dec. 2010

7. Short-term operating receivables due from group companies 17,375,049 17,169,091

Danfoss A/S, Denmark 16,568,154 16,806,764

Danfoss GmbH, Germany 14,110 2,718

Danfoss d.o.o., Slovenia 6,928 18,570

Oy Danfoss Ab, Danfoss LPM, Finland 464,395 120,000

Danfoss Ges.m.b.H, Austria 5,460 74,664

Danfoss (Anshan) Controls Co. Ltd., China 50,003 139,475

Danfoss d.o.o., Croatia 0 778

Danfoss (Tianjin) Ltd., China 0 6,122

Danfoss llc, Russia 4,477 0

DANFOSS POLAND SP.Z.O.O., Poland 33,745 0

DANFOSS D.O.O., Serbia 53,585 0

Danfoss (Hangzhou) Plate Heat Exchanger, China 72,501 0

DANFOSS ENERGY PRODUCTS (GUIYANG), China 28,872 0

DANFOSS AS, Estonia 10,399 0

SIA DANFOSS, Latvia 26,468 0

Danfoss District Heating AB, Sweden 12,251 0

DANFOSS S.R.L., Italy 17,972 0

Danfoss Redan A/S 410 0

Gemina Termix produktion A/S 2,500 0

UAB DANFOSS, Lithuania 2,819 0

31. 12. 2011 31. 12. 2010

Undue receivables 17,114,197 17,153,968

Receivables due up to 1 year 260,852 15,123

Receivables due up to 3 years 0 0

Total 17,375,049 17,169,091


Fin

anci

al S

tate

men

ts

in EUR

31 Dec. 2011 31 Dec. 2010

8. Short-term operating receivables due from customers 150,709 111,300

Receivables due from Slovene customers 107,597 84,433

Receivables due from foreign customers 60,940 26,867

Impairment of short-term receivables due from customers -17,829 0

in EUR

31 Dec. 2011 31 Dec. 2010

10. Cash 22,459 4,530,217

Cash in EUR accounts 391 4,530,217

Cash in foreign currency 22,068 0

in EUR

31 Dec. 2011 31 Dec. 2010

11. Short-term deferred costs and accrued revenue 24,187 25,974

Short-term deferred costs 22,171 25,974

Short-term accured revenue 2,016 0

Maturity of receivables due from other customers as at 31 December 2011 at carrying amount (in EUR):

Receivables due from customers have not been secured. In its operation the Company has been mainly exposed to credit and foreign

exchange risks. Verifi cation of customers’ credit rating may signifi cantly reduce the credit risk. The major part of trading operations with

other customers is nominated in euros and thus the management considers the foreign exchange risk to be minimal.

Receivables amounting to EUR 17,829 that are overdue over one year refer to the company Tabor Ljubljana. A value adjustment has been

made for them since the success of the collection has been assessed as uncertain.

Other receivables include mainly receivables for collaterals (EUR 2,090) and an advance for services (EUR 155,374), receivables for the alrea-

dy granted government subsidy (EUR 11,107) and advances for business trips (EUR 1,482).

They mostly include deferred costs of airline tickets (EUR 15,466) and software (EUR 4,217).

31. 12. 2011 31. 12. 2010

Undue receivables 130,235 32,438

Receivables due up to 1 year 20,474 43,747

Receivables due up to 3 years 17,829 35,115

Total 168,538 111,300

in EUR

31 Dec. 2011 31 Dec. 2010

9. Short-term operating receivables due from others 1,042,762 928,438

Receivables for input VAT 511,330 779,301

VAT claim to from HM Revenue & Customs 0 3,713

VAT claim from Tax Administration of the Federal Republic of Germany 0 2,885

Receivables for corporate income tax 195,594 0

Receivables due from suppliers for undelivered goods 52,639 31,656

Receivables due from partners who resigned from the company 92,725 92,725

Receivables for redunds of insitution compensations 35,100 12,712

Other receivables 155,374 5,446


in EUR

31 Dec. 2011 31 Dec. 2010

12. Off -balance sheet assets 300,999 300,999

Security of liabilities by bank guarantees 300,999 300,999

The Company submitted bank guarantees to the Public Agency of the Republic Slovenia for Entrepreneurship and Foreign Investments

amounting to EUR 275,000 and the Ministry of Higher Education, Science and Technology amounting to EUR 25,999 for the security of lia-

bilities under co-fi nancing contracts.

Capital surplus was formed by the transfer of general equity revaluation adjustment as a consequence of transfer to Slovene Accounting

Standards 2006.

On 22 September 2011 the general meeting of the company took a decision that net profi t or loss of the company from the year 2010 amo-

unting to EUR 10,292,174.00 and a portion of net profi t or loss from previous periods amounting to EUR 707,826.00 should be paid to the

partners in the amount of EUR 11,000,000 proportionally to the amount of shares.

Accumulated profi t (in EUR):

The general meeting shall take a decision on the accumulated profi t of the year 2011.

Net profi t or loss after the restatement of equity on the basis of consumer price index (in EUR):

Provisions for jubilee benefi ts and termination benefi ts were formed according to actuarial calculation as at 31 December 2011, 31 Decem-

ber 2010, 31 December 2009, 31 December 2008, 31 December 2007, 31 December 2006 and 31 December 2005. The actuarial calculations

were made by an independent actuary in accordance with requirements of SAS 10 in association with IAS 19. The assumptions for the cal-

culation as at 31 December 2011 were as follows: a discount rate of 4.8%, the estimate of probability of terminating an employment con-

tract at the discretion of an employee: 5% for the age group up to 30 years, 3% for the age group from 30 to 40 years, 1.5% for the age group

from 40 to 50 years and 1% for the age group over 50 years and 0% for the age group over 60 years.

in EUR

31 Dec. 2011 31 Dec. 2010

13. Equity 33,131,194 36,158,344

Share capital 4,724,028 4,724,028

Capital surplus 4,607,288 4,607,288

Legal reserves 942,468 942,468

Retained earnings 14,884,561 15,592,386

Net profi t or loss for the fi nancial year 7,972,850 10,292,174

in EUR

31 Dec. 2011 31 Dec. 2010

14. Provisions and long-term accrued costs and deferred revenue 1,860,395 1,310,208

Provisions for jubilee benefi ts 174,135 129,189

Provisions for termination benefi ts 698,614 546,100

Provisions for liabilities in accordance with the Danfoss option programme 487,831 131,707

Provisions for liabilities for warranties 302,064 303,083

Government grants received for acquisition of equipment and covering of costs 197,751 200,129

31 Dec. 2011 31 Dec. 2010

Net profi t or loss for the fi nancial period 7,972,850 10,292,174

Retained profi t 14,884,560 15,592,386

Accumulated profi t 22,857,410 25,884,560

Average equity Restatement eff ect Net profi t or loss after restatement

Net profi t or loss under consideration of:

- revaluation of equity based on the consumer price index (102.0) 34,644,769 692,895 7,279,955


Fin

anci

al S

tate

men

ts

Warranty costs for own products are calculated on the basis of accounting policies of the parent company i.e. in the amount of 0.3% of sa-

les value of products sold in the last 18 months.

Provisions for liabilities based on the Danfoss option programme for the management have been calculated at the Group level.

Government grants were obtained in form of non-refundable means for the co-fi nancing of the competitive development centre in Ka-

mnik by the JAPTI Agency.

Changes in provisions and long-term accrued costs and deferred revenue (in EUR):

There were no material deviations between the planned formation and utilisation, realised formation and utilisation of provisions in the ye-

ar 2011.

Short-term loans received from banks include a standing credit line in the transaction account with Raiff eisen banka d.d. amounting to 4.7

million EUR:

- the standing credit line in the transaction account has been agreed for the period of one year (from 7 October 2011 to 5 October

2012) with a possibility of prolongation;

- the interest rate is a 3-month Euribor + 3.00% p.a. (based on the linear calculation under consideration of the actual number of days

and the interest rate base of 360 days);

- the currency of the standing credit line is EUR; the interest rate is variable and depends on the changes in the 3-month Euribor;

- the loan is intended for general purposes;

- kind of loan security: 4 blank bills of exchange and 4 BN 02 payments orders.

Balance - 1 Jan. 2011 Formation Drawing Eliminat. Balance - 31 Dec. 2011

Provisions for jubilee benefi ts 129,189 61,403 12,138 4,318 174,136

Provisions for termination benefi ts 546,100 171,382 11,719 7,149 698,614

Provisions for liabilities in accordance with the Danfoss option programme

131,707 627,574 271,450 487,831

Provisions for liabilities for warranties 303,083 715,403 494,896 221,527 302,063

Government grants received for the acqui-sition of equipment and covering of costs

200,129 2,378 197,751

Total 1,310,208 1,575,762 792,581 232,994 1,860,395

in EUR

31 Dec. 2011 31 Dec. 2010

15. Short-term fi nancial liabilities to group companies 10,058,010 0

Short-term loans received from group companies 10,058,010 0

Interest on loans received 0 0

in EUR

31 Dec. 2011 31 Dec. 2010

16. Short-term fi nancial liabilities to banks 197,585 146,431

Short-term loans received from banks 197,585 146,431

Interest on loans received 0 0


As at 31 December 2011 liabilities to companies in the Danfoss Group were as follows (in EUR):

Liabilities to employees include salaries accounted for in December 2011. At the end of the year there were 317 employees in the Company.

Other liabilities include mainly wage assignments deducted from employees’ salaries (EUR 18,327) and contributions to additional retire-

ment insurance (EUR 23,351).

There were no major deviations between the planned formation, utilisation and implemented formation and utilisation of short-term accru-

ed costs and deferred revenue in the year 2011.

Other accrued costs mostly include accrued costs of employees and students hired through agencies (EUR 105,246), accrued liability for

tax on a referred employee (EUR 60,142), accrued costs of audit (EUR 20,394), accrued costs of transport (EUR 42,837), power supply (EUR

16,562) and telephone costs (EUR 6,268).

in EUR

31 Dec. 2011 31 Dec. 2010

18. Short-term trade payables 3,464,570 6,148,923

Liabilities to domestic suppliers 2,403,360 3,855,741

Liabilities to foreign suppliers 1,061,210 2,293,182

in EUR

31 Dec. 2011 31 Dec. 2010

20. Short-term accrued costs and deferred revenue 1,236,614 866,633

Annual performance bonus to employees 923,976 620,702

Other accrued costs 312,638 245,931

in EUR

31 Dec. 2011 31 Dec. 2010

19. Other short-term operating liabilities 859,589 1,839,467

Liabilities for net salaries 380,380 292,385

Liabilities for contributions from gross salaries 144,939 113,990

Liabilities for taxes on gross salaries 104,075 82,478

Other short-term liabilities to employees 78,923 88,629

Contributions from salaries 105,893 84,546

Corporate income tax 0 1,132,764

Other liabilities 45,379 44,675

Danfoss d.o.o., Slovenia 2,169 22,326

Danfoss (Anshan) Controls Co. Ltd., China 1,119 85,686

DANFOSS AUTOMATIC CONTROLS, China 0 348

Danfoss EOOD, Bulgaria 1,918 11,846

Danfoss GmbH, Germany 30,351 29,081

Gemina Termix produktion A/S 18,344 0

DANFOSS DISTRIBUTION SERVICES A/S, Denmark 221 0

Danfoss A/S, Denmark 972,178 528,835

Oy Danfoss Ab, Danfoss LPM, Finland 16,575 347,557

DANFOSS RANDALL LTD, Great Britain 125,000 0

Danfoss Kft, Hungary 978 1,370

Danfoss (Hangzhou), China 109,098 0

DANFOSS B.V., The Netherlands 64,998 0

Danfoss d.o.o., Croatia 7,499 0

DANFOSS POLAND SP.Z.O.O., Poland 84,619 0

DANFOSS DISTRICT HEATING SRL, Romania 49,003 0

in EUR

31 Dec. 2011 31 Dec. 2010

17. Short-term operating liabilities to group companies 1,484,070 1,027,049


Fin

anci

al S

tate

men

ts

in EUR

2011 2010

21. Net sales 68,574,448 53,960,130

Sales with group companies 67,558,087 51,859,520

Sales with others 1,016,361 2,100,610

Break down of sales by geographical segment (in EUR):

EU 67,406,011 53,201,494

Western Europe (excl. EU) 4,714 636

Eastern Europe (excl. EU) 159,110 10,382

North America (USA) 54,984 140,156

Eastern Asia 949,629 585,970

Western and sourthern Asia 0 21,492

Total 68,574,448 53,960,130

Break-down of sales by business segments (in EUR):

Balancing valves 20,946,806 18,508,588

District heating 33,271,769 29,201,527

Valves and actuators for air-conditioning (HVAC) 6,378,475 5,913,757

Heat exchangers 7,574,782 0

Other 402,616 336,258

Total 68,574,448 53,960,130

in EUR

2011 2010

22. Break-down of costs

Break-down of costs by functional group (in EUR)

Costs of goods sold 277,841 83,867

Production costs of products sold 42,512,573 30,493,429

Selling costs (incl. amortisation / depreciation) 721,190 347,600

General and administrative costs (incl. amortisation / depreciation) 15,125,039 10,447,420

Total 58,663,643 41,372,316

Break –down of costs by natural kinds (in EUR)

Cost of goods and material sold 277,841 83,867

Costs of material 33,564,515 23,758,346

Costs of services 8,941,914 6,109,429

Labour cost 10,792,008 8,431,420

a) Payroll costs 8,241,775 6,404,351

b) Pension insurance costs 929,746 747,227

c) Other social security costs 545,472 429,271

d) Other labour costs 1,075,015 850,571

Depreciation and amortisation 3,535,985 2,956,357

Revaluation operating expenses associated with intangible assets and property, plant and equipment 0 266

Revaluation operating expenses associated with current operating assets 302,231 0

Other operating expenses 1,915,656 884,149

a) Provisions for jubilee and termination benefi ts 232,785 167,244

b) Provisions for liabilities in accordance with the Danfoss option programme 627,574 34,157

c) Provisions for guarantees 489,973 294,697

d) Compensations for the use of construction land 133,841 116,446

e) Other costs 431,483 271,605

Increase in inventories value -666,507 -851,518

Total 58,663,643 41,372,316


Other labour costs include holiday allowances (EUR 276,819), commuting allowance (EUR 276,760), meal allowances (EUR 363,518), solida-

rity subvention (EUR 4,985), employee awards (EUR 144,386) and termination benefi ts upon termination of the employment contract and

jubilee benefi ts (EUR 8,547).

Financial revenue from loans includes interest received on loans granted and foreign exchange gains from foreign transactions.

Financial revenue from operating receivables includes foreign exchange gains arising from foreign transactions, default interest received

and interest on long-term collateral.

Financial expenses for fi nancial liabilities include interest on loans received and foreign exchange losses arising from foreign transactions.

Financial expenses for operating liabilities include foreign exchange losses arising from foreign transactions.

in EUR

2011 2010

23.Other operating revenue (incl. reval. operating revenue) 349,641 369,680

Profi t from sale of fi xed assets 5,224 32

Subsidies 28,184 79,628

Revaluat. operating revenue associated with current operating assets 43,186 68,745

Revenue from reversal of provisions 273,047 221,275

in EUR

2011 2010

24. Financial revenue from loans 36,148 27,606

Financial revenue from loans to group companies 32,004 25,003

Financial revenue from loans to others 4,144 2,603

in EUR

2011 2010

25. Financial revenue from operating receivables 17,253 16,153

Financial revenue from operating receivables due from group companies 1,036 68

Financial revenue from operating receivables due from others 16,216 16,085

in EUR

2011 2010

26. Financial expenses for fi nancial liabilities -142,387 -117,445

Financial expenses for loans received from group companies -63,784 -95,084

Financial expenses for loans received from banks -78,603 -22,361

in EUR

2011 2010

27. Financial expenses for operating liabilities -16,994 -12,570

Financial expenses for operating liabilities to group companies -569 -1,067

Financial expenses for trade payables and bills payable -16,398 -10,934

Financial expenses for other operating liabilities 0 -569


Fin

anci

al S

tate

men

ts

Other revenue includes mostly contractual compensation received from suppliers due to delivery of inadequate material (EUR 15,711) and

liquidated damages paid by suppliers (EUR 3,414).

Among others, other expenses include default interest on non-timely paid taxes (EUR 2,055) and other compensation (EUR 3,627).

As at 31 December 2011 the Company recorded deferred tax assets relating to the provisions for jubilee benefi ts and termination benefi ts

made in 2006, those relating to the impairment of inventories, then liabilities from the Danfoss option programme and liabilities for war-

ranties.

Eff ective income tax rate:

31. Cash fl ow statement

The Company prepares its cash fl ow statement using the indirect method (version II). The data used in the preparation of the cash fl ow

statement were taken from the balance sheet as at 31 December 2011 and 31 December 2010 and income statement for the year 2011.

In the preparation of the cash fl ow statement, all non-monetary transactions were excluded, such as: provisions for jubilee benefi ts and ter-

mination benefi ts, provisions for the Danfoss option programme.

in EUR

2011 2010

28. Other revenue 19,567 41,699

in EUR

2011 2010

29. Other expenses -5,892 -2,628

in EUR

2011 2010

30. Income tax 2,210,447 2,624,772

Year 2006 2007 2008 2009 2010 2011

27,50% 22,50% 21,06% 21,49% 20,33% 21,74%


1. Total emoluments of individual groups of persons (EUR):

As at 1 April 2012 the company changed the wage system. In compliance with the new system the company has no employees working on

the basis of the employment contract. The amount of emoluments per individual employment contracts therefore accounts for only emo-

luments in the period 1 January 2011 – 31 March 2011.

The Company has neither receivables nor liabilities to the above mentioned groups of persons. And the Company neither granted nor re-

ceived any warranties from them.

The Company's operating leasing includes passenger cars, parking lots and business premises where it performs its activity.

2. Audit fee and tax consulting in the year 2011 (EUR):

3. Operating leasing received

Minimal future gross expenses for lease (EUR):

5.3. BASIC ACCOUNTING RATIOS

5.4. OTHER DISCLOSURES

2011 2010

Equity fi nancing rate 63% 76%

Long-term fi nancing rate 67% 79%

Operating fi xed assets rate 44% 37%

Long-term assets rate 44% 37%

Equity to operating fi xed assets 1,45 2,06

Immediate solvency ratio 0,00 0,49

Quick ratio 1,16 2,48

Current ratio 1,81 3,24

Operating effi ciency ratio 1,17 1,31

Net return on equity ratio 0,24 0,39

Dividends to share capital ratio 2,33 0,28

in EUR

2011 2010

Management board 220,715 190,487

Other employees - individual employment contracts 316,595 1,139,618

Total 537,310 1,330,105

in EUR

2011 2010

Audit 20,394 19,994

Tax consulting 8,644 19,680

Total 29,038 39,674

Year Expenses

2011 596,781

2012 573,868

2013 424,096

2014 422,645

2015 214,668

2016 0

Total 2,232,058


Fin

anci

al S

tate

men

ts

The Company does not have any contingent liabilities that were not appropriately included in its balance sheet as at 31 December 2011.

In accordance with the changes in the Corporate Income Tax Act, published in the Offi cial Gazette of the Republic of Slovenia No. 30/2012,

the tax rate for legal entities shall be reduced from the present 20 % to 18 % in the fi nancial year 2012. In compliance with the new tax act

deferred taxes would amount to EUR 139,089 or would be lower by EUR 15,454.

5.5. CONTINGENT LIABILITIES

5.6. EVENTS AFTER THE BALANCE SHEET DATE

The Management confi rms the fi nancial statements of Danfoss Trata d.o.o. for the year that ended on 31 December 2011.

The Management confi rms that appropriate accounting policies were consistently applied to the preparation the fi nancial statements that

accounting estimates were made in accordance with the principle of prudence, and due professional care and that the annual report pre-

sents a true and fair position of the Company and results of its operation for the year 2011.

The Management is responsible also for adequate keeping of accounting, for the establishment, operation and maintenance of internal

controls associated with the preparation and fair presentation of the fi nancial statements that are free from material misstatements, whe-

ther due to fraud or error, adoption of suitable measures for the insurance of property and other assets and confi rms that the fi nancial sta-

tements with notes have been prepared on the basis of the going concern assumption and in compliance with the legislation in force and

Slovene Accounting Standards.

The management board has been informed about the contents of the components of the annual report of the company Danfoss Trata

d.o.o. for the year 2011 and thus about the complete annual report. It agrees with it and confi rms this by the signatures.

Head of Finance and Accounting General Manager

Silvij Briški Aleksander Zalaznik

Ljubljana, 29 June 2012

5.7. MANAGEMENT RESPONSIBILITY STATEMENT

Silvij Briški

annual report 2011 danfoss trata d.o.o

Documents