2010 annual report - touax group

Annual report 2010
Other Non-Current Financial Assets and other fixed assets are
valued at cost and amortized using the effective interest rate; it
is considered that their book values are a reasonable approximation
to fair value.
Other Non-Current Financial Assets and other fixed assets
undergo impairment tests on the basis of the estimated future
income streams. Impairments amounting to €6.7 million have
been booked in earlier financial periods (before 2008). In 2009,
a €1 million impairment was booked on the deferred payment
of EIG management commissions concerning the Group, as
well as a €2.1 million impairment on liquidity reserves granted
to the Trusts 2001 (see the appendix to the consolidated financial
statements, note 30.1 and note 30.3).
❙ note 18.1.1. Trade receivables and other receivables
On first booking, trade receivables and related accounts are
recognized at their fair value which corresponds to their nominal
value. They may be written down if there is a risk the debt
may not be collected in full. The item appears in the Balance
Sheet on December 31, 2010 at an amount of €57 million: this
book value is a reasonable estimate of the fair value.
Mean aging of trade receivables is 64 days. A provision is set
aside for any receivables in arrears by less than one year; its
amount depends on the customer’s payment history.
Before a new customer is accepted, the Group checks its solvency
with credit rating agencies and determines the applicable
credit limits.
As of December 31, 2010 the Group’s books included
€16 million net of receivables in arrears.
Aged trial balance
(€ thousands) Gross accounts Provisions Accounts
receivable
receivable
Not due 40,740 (213) 40,527
0-6 months 11,540 (473) 11,067
6-12 months 4,205 (988) 3,216
> 1 year 8,650 (6,471) 2,180
TOTAL 65,134 (8,144) 56,990
❙ note 18.1.2. Credits under finance leases
The Group’s assets include moneys owed to it under finance leases, in which it is the lessor, amounting to a net bookable value of
€11.7 million and a cost price of €16.1 million.
(€ thousands) Minimum future Discounted minimum
payments
future payments
< 1 year (+) 3,223 1,910
2 - 5 years (+) 10,985 7,160
> 5 years (+) 2,974 2,628
Total 17,182 11,698
Discounting of finance leases (-) (5,484)
Discounted minimum future payments 11,698 11,698
Presentation in the balance sheet of finance lease receivables:
Other current assets 1,910
Other non-current assets 9,788
TOTAL 11,698
The interest rate applied in each finance lease is determined on
the day the contract is signed. The mean rate of interest used
in the accounts was 9.91% on December 31, 2010. The interest
income from finance leases is recorded under leasing income
(€2.1 million in 2010 compared with €1.2 million in 2009 and
€973 thousand in 2008).
The total amount of customer repayments of principal lent
under finance leases (the principal appears as a net investment
among Balance Sheet assets) was €2 million in 2010 versus
€1.8 million in 2009 and €1.9 million in 2008.
The EBITDA – understood by the Group as current operating
income less amortization charges and provisions – is not itself
an accounting concept. However, it is very often used by financial
analysts, investors and other users of Financial Statements
as a measure of the operating performance of a business. In
TOUAX’s view, users of the Group’s Financial Statements would
find the re-stated EBITDA shown below to be a better measure
of this performance. Re-stated EBITDA is EBITDA plus these
capital repayments of the net investment in finance leases
accorded to customers: it allows a more accurate calculation
than does customary EBITDA of the size of the income stream
from these transactions. The practice is widespread among
firms which lease out equipment.
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