TŽ Annual Report 2008 in pdf, 7.5 MB - Třinecké železárny

AssociatesName of the company Registered office Business activities Equity share at 31 Dec 2006VESUVIUS ČESKÁ REPUBLIKA, a.s. Třinec-Staré Město,Production of isostatically pressed40.00 %Průmyslová 715, 739 65heat-resisting productsSochorová válcovna TŽ, a.s.Třinec-Staré Město,Production and metallurgic processing18.00 %Průmyslová 1000, 739 70of iron and steelMORAVIA ENERGO, a.s.Třinec-Staré Město,Průmyslová 1018, 739 65Distribution of electricity, energyadvisory services41.00 %Due to the sale of the equity investment in MORAVIA ENERGO, a.s. as of 24 March 2006, the entity was removed from the consolidation group for theyear ended 31 December 2006. The deconsolidation was performed as of 31 March 2006.The consolidation methods were used in compliance with the consolidation rules of the consolidated group – full consolidation was applied in the caseof subsidiaries, consolidation under the equity method was used for the associates. The Company participates in the financial and operating policies of Sochorováválcovna TŽ, a.s., which was therefore consolidated using the equity method of accounting.Financial statements of all entities, both included and excluded from the consolidation, are maintained in the registered office of the parent companyfor presentation purposes.2.3. The Balance Sheet Dates and Registered Offices of the Companies Included in the Consolidated GroupThe financial statements of the companies included in the consolidated group were prepared as of and for the years ended 31 December 2008, 2007 and2006. The companies included in the consolidated group in the period 2006 – 2008 are based in the Czech Republic.2.4. Companies Excluded from ConsolidationEntities in which the Company has control, joint control or substantial influence are not included in the consolidated group if:– The assets of such an entity do not exceed CZK 150 million;– The equity share in the entity in proportion to the equity in the group is less than 1.5 percent;– The share in the net turnover (revenues of account class 6) in the Group is less than 1.5 percent;– The companies which meet the condition set out in the first paragraph for non-inclusion in the consolidated group, thereby not entering into consolidationbased on individual assessment, must also meet the group materiality criterion. Under the group materiality criterion, these companies are taken as onewhole. The total assets of this whole must be less than CZK 500 million, the equity share of this whole in the Group must be less than 5 percent and theshare in the net turnover (revenues of account class 6) in the Group must be less than 5 percent. If the assets are less than CZK 500 million and the equityshare is less than 5 percent while the share in the net turnover exceeds 5 percent, the decisive fact for inclusion in the consolidated group is whether therevenues largely generated by the company with related parties would have an immaterial impact on the profit and loss account after eliminating intercompanydeliveries. For calculating materiality levels, all companies in the Group with the exception of companies in liquidation or subject to bankruptcyproceedings are taken into account;– Severe and long-term restrictions of the parent company hinder the companys rights connected to the control of assets or management, or, in exceptionalcases, if the information necessary for the preparation of the consolidated financial statements cannot be obtained without inevitably incurring undue costs(that can be documented) or with inevitable and provable undue delay;– The shares or equity interests in these companies are held exclusively with a view to their subsequent disposal.3. Basis of Accounting and General Accounting PrinciplesThe Groups accounting records are maintained and the consolidated financial statements were prepared in accordance with Accounting Act 563/1991Coll., as amended; Regulation 500/2002 Coll. which provides implementation guidance on certain provisions of the Accounting Act for reporting entitiesthat are businesses maintaining double-entry accounting records, as amended, and Czech Accounting Standards for Businesses, as amended.The accounting records are maintained in compliance with general accounting principles, specifically the historical cost valuation basis, the accruals principle,the prudence concept and the going concern assumption.For the purpose of preparing the consolidated financial statements of the TŘINECKÉ železárny, a.s. Group, accounting principles and policies used withinthe Group were brought into line. Significant accounting principles and policies as they are used by individual companies are set out below.These consolidated financial statements are presented in thousands of Czech crowns (CZK).3.1. Financial Reporting PeriodThe financial statements of the Company for the year ended 31 December 2008 were prepared as follows:– The balance sheet contains comparative amounts as of 31 December 2007 and 31 December 2006;– The profit and loss account comprises comparative amounts for the years ended 31 December 2007 and 31 December 2006;– The statement of changes in equity contains comparative amounts as of 31 December 2007 and 31 December 2006; and– The cash flow statement comprises comparative amounts for the years ended 31 December 2007 and 31 December 2006.A N N U A L R E P O R T T Ř I N E C K É Ž E L E Z Á R N Y , a . s . 2 0 0 875