Page 30 - Annual Report 2019

Supervisory Board Report
Group Management Report
Consolidated Financial Statements
Annexes

NOTES TO THE 2019 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

(1) Presentation of the Consolidated Financial Statements

HOFTEX GROUP AG is registered as a public limited company in the Federal Republic of Germany
with an entry in the commercial register of the Hof district court under the code HRB 50. Its business
address is Fabrikzeile 21, 95028 Hof, Germany. It serves the holding company of the Hoftex Group.
The purpose of the Company corresponds to the entry in the commercial register. The Hoftex Group’s
main activities are the production of nonwoven fabrics for technical applications and apparel,
the production of raw and coloured textiles including decorative fabrics and the production of raw
and coloured yarns including speciality and ply yarns.
As of 29 June 2009, the Company’s shares have been traded on the m:access open market of the
Munich Stock exchange. Since this time HOFTEX GROUP AG is no longer considered as a
“publicly listed” or “capital market-oriented” company as defined in the HGB and the AktG.

The consolidated financial statements of HOFTEX GROUP AG for the year ending 31 December 2019
are prepared pursuant to the provisions of the HGB and the AktG prevailing on the balance sheet date.

Section 290 HGB governs the obligation to prepare consolidated annual financial statements. The
consolidated financial statements for the preceding fiscal year are to be prepared within five months
of the new fiscal year. The consolidated financial statements have been prepared in euros (EUR).
All figures are shown in thousands of euros (EUR thousand), unless expressly stated otherwise.

The single-entity annual financial statements of the Group companies and the consolidated
annual financial statements are prepared as of the balance sheet date of the parent company.
The HOFTEX GROUP AG annual financial statements and the annual financial statements of
all domestic subsidiaries included in consolidation for the 2019 fiscal year were prepared
on the basis of the provisions of the HGB, the AktG and/or the German Limited Liability Companies
Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, or GmbHG). For the purpose of
preparing the consolidated annual financial statements, we have adapted the annual financial
statements of foreign subsidiaries to comply with HGB where necessary.
Certain items in the balance sheet and the income statement have been aggregated to improve
clarity of presentation. These items are reported separately and clarified in the notes to the
financial statements. The income statement is prepared using the total cost method.

(2) Consolidated companies
In addition to HOFTEX GROUP AG, the consolidated annual financial statements for the year ending
31 December 2019 include 14 (prior year: 15) domestic and 5 (prior year: 4) foreign companies,
in which HOFTEX GROUP AG directly or indirectly holds a majority of voting rights and therefore
exercises control over these companies. The Hoftex Group relief fund, the Wohlfahrtseinrichtung
der Vogtländischen Baumwollspinnerei AG e.V., is also subject to consolidation as stipulated in
Section 290(2) no. 4 HGB in conjunction with Standard 19 of the German Accounting Standards
(Deutsche Rechnungslegungsstandard or DRS). Pursuant to Section 296(2) HGB, one domestic
subsidiary was not included in consolidation due to its insignificance for the Group’s net assets,
financial position and results of operations.
The change in the consolidated companies was the result of a sale of a 100% stake in Hoftex
CoreTech GmbH to Filidea S.r.l., Biella, Italy during the fiscal year. The associated subsidiary was
deconsolidated on 31 August 2019. Effective 1 January 2019, Tenowo de Mexico S. de R.L. de C.V.,
located in San Luis Potosi, Mexico, which was not included in 2018, the year of establishment due to
its insignificance for the Group’s assets pursuant to Section 296(2) HGB, was consolidated for the first
time. The purpose of the business is to deliver nonwoven items to automotive customers in Mexico.

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