AS KLEMENTI

ANNOUNCEMENT

15.03.99

 

1998 ACTIVITY REPORT

 

1. Production 

 

The business activities of AS Klementi and its subsidiaries in 1998 

were continuously based on three relatively independent business lines, 

aimed to different markets:

- women’s fashion clothing: development, production and sales 

(trademarks KLEMENTI and REGINA) 

- habiliments: development, production and sales (trademarks PROFLINE)

- subcontracting works

Production of the two first-mentioned is financed by AS Klementi 

(trademarks Klementi and Regina) and AS Klementi’s subsidiary AS 

Profline (trademark Profline). The materials for subcontracting works 

are generally supplied and delivered by the respective customer.

As of the end of 1997, a new collection of classical women’s clothes 

named BASIC by KLEMENTI was introduced to the market. This collection 

includes garments which can be purchased directly from the storage, 

without placing the advance order.

 

The 1998 net sales of AS Klementi and its subsidiaries amounted to 

124,579 thousand EEK, which is 26,115 thousand EEK or 26.5% less than 

in 1997. 

Division between business and other activities:

- women’s fashion clothing 74,623 thousand EEK (59.9% of net sales), 

increase 52.7%

- habiliments: 18,091 thousand EEK (14.5%), increase 26.1%

- subcontracting works (including sale of services) 29,307 thousand EEK 

(23.5%), decrease 12.8%

- other (sale of materials, diner, etc.) 2,558 thousand EEK (2.1%), 

increase 54.3%

The sales volume of goods produced in 1998 was 92,714 thousand EEK 

(74.4% of total turnover), of which the women’s fashion clothing 

accounted for 80.5% and habiliments for 19.5%.

The development costs of new garment lines in 1998 totaled 3,496 

thousand EEK, which is 1,043 thousand EEK (29.8%) more than in 1997.

 

2. Production

 

In 1998, production took mainly place in the production building 

located in Mustamäe, Tallinn (contains 395 needlecraft workplaces).     

During the period from January to September, AS Klementi also used the 

production facilities of OÜ Deodora, which was sold in 1998 (45 

workplaces).  

The production volume in standard minutes (SM) totaled 26,322 thousand 

SM, of which 1,956 thousand SM were purchased from other needlecraft 

companies according to the need. The total output of AS Klementi 

Tallinn production unit in 1998 was 24,367 thousand SM, i.e. 61,6 

thousand SM per workplace (in 1997, 58,1 thousand SM per workplace, 

increase 6.2%).    

 

3. Supply policies

 

AS Klementi and its subsidiaries purchase raw materials mainly from the 

European companies. This enables toll-free import of goods produced to 

the EU member countries, Lithuania and Latvia. The materials are 

purchased from ca 60 companies. The total cost of raw materials and 

goods amounted to 63,889 thousand EEK (46.6% of net sales), increase 

since 1997 is 23,019 thousand EEK, or 51.3%.    

 

4. Personnel and salary policies

 

In 1998, AS Klementi and its subsidiaries employed an average of 692 

workers (compared with 1997, approximately 61 workers or 8.1% less), of 

who 505 worked on production lines (compared with 1997, 39 workers 

less). The personnel expenses (including social and medical taxes) in 

1998 totaled 48,222 thousand EEK, increase compared to 1997 6,567 

thousand EEK or 15.8%. The personnel expenses accounted for 38.7% of 

net sales. As of 01.01.1998, the wages for piecework were increased by 

10%. As of 01.01.1998, the hourly wages were increased an average of 

10%. The total employee absenteeism accounted for 7.0% of the normative 

work time, whereas the respective figure of the piece workers in 

needlecraft departments was 8.7% (in 1997, 10.4%).

 

 

5. Investments 

 

The following investments were made in 1998:

- in share capital of subsidiaries: 3,012 thousand EEK

- tangible assets: 2,131 thousand EEK

- intangible assets: 578 thousand EEK

- improvements on real estate objects: 463 thousand EEK

                    TOTAL: 6,184 thousand EEK

 

A subsidiary AS Profline was established in 1998 (100% owned by AS 

Klementi). AS Klementi’s non-monetary contribution to the subsidiary’s 

share capital included current and non-current assets of AS Klementi 

related to the production of habiliments. Tangible assets (mainly 

production technological devices) were purchased in the value of 2,131 

thousand EEK. 

Investments in tangible and intangible assets include payments of lease 

and rent contracts concluded both before 01.01.98 and during the year 

1998.

The following equipment was acquired during 1998 on the basis of new 

lease contracts:

- computers for cutting complex 

- software for cutting complex

- diner’s self-service line "Metos"

- car Mitsubishi Lancer

 

6. Real estate development

 

In 1998, the renovation and rent program on AS Klementi office building 

in Tallinn (address Akadeemia road 33) was continued. The works to 

rebuild and improve the real estate objects were finished in 1998 

(total cost 463 thousand EEK). The total volume of rent income in 1998 

amounted to 1,017 thousand EEK.

 

7. Subsidiaries

 

AS Klementi owns the following subsidiaries:

1. OÜ Klementi Kinnisvara, share capital 500 thousand EEK, 100% owned 

by AS Klementi (AS Klementi real estate administration);

2. AS Profline, share capital 2,500 thousand EEK, 100% owned by AS 

Klementi (production of habiliments);

3. Klementi Trading OY (registered in Finland), share capital 131.6 

thousand EEK, 100% owned by AS Klementi (realization of AS Klementi 

products in Finland);

4. AS Brendman, share capital 100 thousand EEK, 100% owned by AS 

Klementi (retail sales of women’s clothing; did not operate in 1998).

 

8. Management Board, meetings of the Management Board, and remuneration

 

As of 01.01.1998, the Management Board of AS Klementi consisted of the 

following members:

- Madis Võõras - Chairman of the Management Board

- Mare-Ann Perkmann – Deputy Chairman of the Management Board

- Urmas Rohi

- Lilia Peets

 

As of 22.09.1998, Urmas Rohi was released from the Management Board.

After the last changes, the Management Board AS Klementi has three 

members:

- Madis Võõras - Chairman of the Management Board (managing director)

- Mare - Ann Perkmann (product development director)

- Lilia Peets (sales and marketing director)

 

The Management Board held a total of 28 meetings in 1998. 

The Management Board members of AS Klementi are also the members of the 

managing direction. During the year 1998, the aforementioned persons 

received salaries and extra payments in the total amount of 1,103 

thousand EEK. The members of the Management Board did not receive 

separate payments for participating in the work of the Management 

Board. 

 

 

Madis Võõras, 

AS Klementi 

Chairman of the Management Board