CzeCh airlines - České aerolinie

Independent Auditor’s Report to the Shareholders
of České aerolinie a.s.
annual report 2010 | 40
Non-consolidated
financial statements
On the basis of our audit, on 15 April
2011 we issued an auditor’s report
on the Company’s non-consolidated
statutory financial statements, which
are included in this Annual Report
and our report was as follows:
“We have audited the acCompanying
financial statements of České aerolinie
a.s., which comprise the balance
sheet as of 31 December 2010, and
the income statement, the statement
of changes in equity and the cash flow
statement for the year then ended,
and the notes to these financial statements
including a summary of significant
accounting policies and other
explanatory notes. Information about
the Company is set out in Note 1 to
these financial statements.
Statutory Body’s
Responsibility for the
Financial Statements
The statutory body of České aerolinie
a.s. is responsible for the preparation
of financial statements that give a
true and fair view in accordance with
Czech accounting legislation and for
such internal controls as the statutory
body determines are necessary
to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud
or error.
Auditor’s Responsibility
Our responsibility is to express an
opinion on these financial statements
based on our audit. We conducted our
audit in accordance with the Act on
Auditors and International Standards on
Auditing and the relevant guidance of
the Chamber of Auditors of the Czech
Republic. Those standards require that
we comply with ethical requirements
and plan and perform the audit to obtain
reasonable assurance whether the financial
statements are free from material
misstatement.
An audit involves performing procedures
to obtain audit evidence about
the amounts and disclosures in the
financial statements. The procedures
selected depend on the auditor’s judgment,
including the assessment of
the risks of material misstatement of
the financial statements, whether due
to fraud or error. In making those risk
assessments, the auditor considers
internal controls relevant to the entity’s
preparation and fair presentation of the
financial statements in order to design
audit procedures that are appropriate
in the circumstances, but not for the
purpose of expressing an opinion on
the effectiveness of the entity’s internal
controls. An audit also includes evaluating
the appropriateness of accounting
policies used and the reasonableness
of accounting estimates made by the
Management, as well as evaluating the
overall presentation of the financial
statements.
We believe that the audit evidence we
have obtained is sufficient and appropriate
to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements
give a true and fair view of the
assets and liabilities of České aerolinie
a.s. as of 31 December 2010, and of its
expenses, revenues and net result and
its cash flows for the year then ended,
in accordance with Czech accounting
legislation.
Emphasis of Matter
Without qualifying our opinion, we draw
attention to Note 3 to the financial statements.
The going concern assumption
applied by the Company’s Management
is conditional upon the successful implementation
of the Restructuring Plan
and the fulfilment of the cash flow plan
for 2011. In 2010, the Company reported
a negative operating cash flow, which
indicates a potential impairment of fixed
assets. The Company’s Management
prepared an analysis of the potential
impairment of fixed assets, which is
based on future discounted operating
cash flows. The assumption is that the
implementation of measures included in
the Restructuring Plan will be successfully
completed and the Company will
generate positive operating cash flows.
Based on these long-term projections,
the Company’s Management concluded
that fixed assets had not been impaired.
Since the Restructuring Plan had not
been fully implemented as at the date
of this report, there is uncertainty as
to the outcome of its implementation
that may have a significant effect on the
Company’s ability to continue as a going
concern, and on the valuation of fixed
assets.”
Consolidated financial
statements
On the basis of our audit, on 6 May 2011
we issued an auditor’s report on the
Group’s consolidated statutory financial
statements, which are included in this
Annual Report and our report was as
follows: “We have audited the acCompanying
consolidated financial statements
of České aerolinie a.s. and its
subsidiaries (“Group”), which comprise
the consolidated balance sheet as
of 31 December 2010, the consolidated
income statement, the consolidated
statement of changes in equity and the
consolidated cash flow statement for the
year then ended, and the notes to these
consolidated financial statements including
a summary of significant accounting
policies and other explanatory notes.
Information about the Group is set out
in Note 1 to these consolidated financial
statements.