VÝROČNÍ ZPRÁVA ANNUAL REPORT - Philip Morris

ANNUAL REPORT 2008 | FINANCIAL RESULTS
Credit risk concentration
The Company monitors the concentration of credit risk by distribution regions.
Classification of receivables by distribution regions:
Czech Slovak
Carrying amount as at December 31, 2008 (in CZK million) Republic Republic Other Total
Receivables from third parties – domestic 1 007 - - 1 007
Receivables from third parties – foreign - - 17 17
Receivables from PMI Group entities - 204 506 710
Total 1 007 204 523 1 734
Czech Slovak
Carrying amount as at December 31, 2007 (in CZK million) Republic Republic Other Total
Receivables from third parties – domestic 5 920 - - 5 920
Receivables from third parties – foreign - - 61 61
Receivables from Altria Group entities - 439 56 495
Total 5 920 439 117 6 476
Credit quality of financial assets not yet due and not impaired
The Company uses the following criteria when setting ratings of financial
assets that are not yet due and are not impaired.
• Solvency class 1 includes receivables from third parties secured
by bank guarantees for which there is no objective evidence indicating
impairment.
• Solvency class 2 includes receivables that are unsecured trade
receivables from third parties for which there is no objective evidence
indicating impairment.
• Receivables from and on-demand deposits with Philip Morris
International are classified according to Standard & Poor’s rating of the
company Philip Morris International. In 2008, the S&P rating was A.
• Receivables from and on-demand deposits with Altria Group are
classified according to Standard & Poor’s rating of the company Altria Group.
In 2007, the S&P rating was BBB+.
• Cash with banks is classified according to Moody’s Long-term Deposit
rating. For banks and financial institutions, only independently-rated parties
with a minimum rating of AA3 (2007: AA3+) are accepted.
Moody’s rating
Standard & Poor’s Long-term
Balance as at December 31, 2008 (in CZK million) Solvency class 1 Solvency class 2 Ratings (A) Deposit (AA3) Total
Receivables from third parties - domestic 873 134 - - 1 007
Receivables from third parties - foreign 13 4 - - 17
Receivables from PMI Group entities - - 710 - 710
Cash at banks - - - 14 14
On demand deposits with related parties - - 1 360 - 1 360
Total 886 138 2 070 14 3 108
Moody’s rating
Standard & Poor’s Long-term
Balance as at December 31, 2007 (in CZK million) Solvency class 1 Solvency class 2 Ratings (BBB +) Deposit (AA3+) Total
Receivables from third parties - domestic 5 075 840 - - 5 915
Receivables from third parties - foreign 18 31 - - 49
Receivables from Altria Group entities - - 495 - 495
Cash at banks - - - 2 2
On demand deposits with related parties - - 2 217 - 2 217
Total 5 093 871 2 712 2 8 678
Carrying amount of financial assets past due but not impaired
Months past due
Balance as at December 31, 2008 (in CZK million) Less than 1 month 1 – 3 months More than 3 months Total
Receivables from third parties - domestic 15 - - 15
Receivables from PMI Group entities 3 29 14 46
Total 18 29 14 61
Months past due
Balance as at December 31, 2007 (in CZK million) Less than 1 month 1 – 3 months More than 3 months Total
Receivables from third parties - domestic 5 - - 5
Receivables from third parties - foreign 11 - 1 12
Total 16 - 1 17
75