Annual Report - KonÄar Distribution and Special Transformers Inc.

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Notes to the financial statements - continued 39. FINANCIAL INSTRUMENTS In this note the following information will be disclosed: A) The significance of financial instruments for the financial position and performance of the Company, and B) The types and the nature of risks arising from financial instruments to which the Company is exposed at the end of the reporting period, and the method used by the Company in order to manage those risks. A) The significance of financial instruments for the Company’s financial position and its performance The significance of financial instruments for the financial position and performance of the Company is presented in the following table: 31/12/2012 Loans and receivables Fair value through P&L Available for sale Held to maturity Assets under IAS 39 HRK’000 HRK’000 HRK’000 HRK’000 HRK’000 AFS financial assets Trade and other receivables Trade receivables from related parties Cash & cash equivalents Total — — 39 — 39 177,948 — — — 177,948 14,802 — — — 14,802 15,661 — — — 15,661 208,411 — 39 — 208,450 31/12/2011 Loans and receivables Fair value through P&L Available for sale Held to maturity Assets under IAS 39 AFS financial assets Trade and other receivables Trade receivables from related parties Deposits Cash & cash equivalents Total HRK’000 HRK’000 HRK’000 HRK’000 HRK’000 — — 39 — 39 115,988 — — — 115,988 14,448 — — — 14,448 — — — 64,009 64,009 37,928 — — — 37,928 168,364 — 39 64,009 232,412 57
Notes to the financial statements - continued All of the Company’s liabilities have been classified as “At amortised cost”. Debt (interest bearing) Long-term loans Short-term loans (including the current portion of long-term loans) Less: Cash and cash equivalents Net debt 31/12/2012 31/12/2011 HRK HRK 66,071,551 9,299,544 57,724,815 5,722,796 8,346,736 3,576,748 (15,660,651) (37,928,446) 50,410,900 — Equity Equity and net debt Gearing 198,738,316 179,749,771 249,149,216 — 25% — Fair value of financial assets and liabilities Fair value of financial assets and liabilities approximates to carrying amounts of the Company’s assets and liabilities. Investments in equity instruments Of all financial assets of the Company, only shares in ZagrebaËka Bank d.d. are listed on the active market. The carrying value of these shares amounts to HRK 39,000 and the fair value (according to the closing price at the Zagreb Stock Exchange) amounts to HRK 85,705. Other investments in equity instruments (shares in Elkakon d.o.o., Ferokotao d.o.o. and Novi Feromont d.o.o.) are investments not listed on the active market; therefore those investments are measured at the cost under IAS 39 since the fair value of those instruments cannot be measured reliably. Apart from investments in equity instruments, the Company has used the following methods and assumptions in evaluation of the fair value of the financial instruments: Receivables and deposits at banks For assets due within three months, the carrying value is approximate to their fair value due to the shortness of the assets. For longer term assets, the contracted interest rates do not significantly deviate from the current market rates and their fair value is, therefore, approximate to their accounting value. Liabilities per loans received Current liability fair value is approximate to their carrying value due to the short-term nature of these instruments. The Management Board believes that their fair value doesn’t differ significantly from their carrying value. Other financial instruments Financial instruments of the Company that are not valued at fair value are trade receivables, other receivables, trade payables and other current liabilities. The historical carrying value of receivables and liabilities, including provisions that are in line with the usual terms of business, is approximately equal to their fair value. B) Risks arising from financial instruments The Company’s operations are exposed to the following financial risks: market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. 1. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The market risk includes currency risk, interest rate risk and other price risk. There have been no significant changes to the Company’s exposure to market risks or the manner in which it manages and measures the risk. 58
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Annual Report 2012 ISO 9001:2008 IS
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Contents I. MANAGEMENT BOARD REPORT
Page 5 and 6:
Detail of the Trakoscan castle in n
Page 7 and 8: 2. Major 2012 figures and their com
Page 9 and 10: 4. General position of the Company
Page 11 and 12: 7. Market position and sales by cou
Page 13 and 14: 9. Operating results (Profit & Loss
Page 15 and 16: ange. The Company is capable to fol
Page 17 and 18: 14. Human Resources At the beginnin
Page 19 and 20: KON»AR - Distribution and Special
Page 21 and 22: KON»AR - Distribution and Special
Page 23 and 24: New Head Office New High Voltage La
Page 27 and 28: Statement of comprehensive income 3
Page 29 and 30: Statement of financial position - c
Page 31 and 32: Statement of changes in equity 31 D
Page 33 and 34: Notes to the financial statements -
Page 57: Notes to the financial statements -
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Annual Report - KonÄar Distribution and Special Transformers Inc.