ANNUAL REPORT - KORADO, as

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20 PRODUCTION MATERIAL PROCUREMENT The procurement of input material is a very important part of KORADO’s production process. Maximum emphasis is placed on quality, sales and delivery terms and, above all, input material prices. Give the dramatic developments in prices and demand that occurred in 2010, solid cooperation and partnerships with suppliers of priority materials became very important due to their contribution to KORADO’s good market position and reputation. A key element of planning and implementing material procurement is having sufficient in-house and external information. Use of the acquired information makes it easier to ensure high-quality and optimally priced input materials through the procurement management and decision-making process. The Supplier Rating Committee has become a key part of companywide procurement and has favourably impacted all KORADO’s production and non-production units. Electronic auctions create substantial additional savings and have become an important new procurement tool. Sheet metal prices In 2010, we continued to see sharp growth in the price of our most important input material – cold-rolled sheet metal, a trend that started in Q3 and accelerated in Q4 2009. Excess demand that exacerbated the ongoing lack of metallurgical Sheet metal price development index % 240 220 200 180 160 140 120 100 0 material producers’capacities and negative developments in steel production raw material prices (e.g. iron ore and coke) created a strain on KORADO operations. It is clear from the current dramatic situation that further abrupt changes in supply and demand can be anticipated in future. Suppliers, stabilization and finding new resources In 2010, the Company continued to work in a systematic manner with its suppliers while subjecting them to rigorous evaluation. At the same time, the standard process of sourcing new supplies continued while maintaining quality, logistics and service parameters and minimizing procurement risks. We further optimized the supplier evaluation system, employing solutions which take into account experience gained from working with different suppliers across the entire Company.The evaluation results are analyzed in detail and used in future negotiations. Days inventory In 2010, the Company achieved stable days inventory of materials thanks to the efforts of individual procurement staff, the attention devoted to the planning process, communication among KORADO departments and cooperation with suppliers of priority and raw materials. 2002 2003 2004 2005 2006 2007 2008 2009 2010 Change in sheet metal price compared to opening balance as of 1 January 2001 (in percent). Annual Report 2010
PRODUCTION AND DEVELOPMENT In 2010, the Company continued to reduce production shifts. At 1 December 2010, the number of production shifts was reduced from three to two. Nonetheless, KORADO continues to regularly manufacture its entire range of products every week. KORALUX radiator panel production innovation In 2010, the Company made a capital investment in the installation of capillary fitting technology for KORALUX heating panels in the Company’s existing premises. This project means that in 2011, KORADO will be able to deliver a greater number of bathroom radiators at a lower production cost. Number of produced panel radiators (parent x KBG) 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 1 416 103 1 582 218 1 739 179 1 905 195 1 648 149 All the production technology for fitted tubular panels was brought in over the course of the fourth quarter and installed as received. Production was up and running before the 2010 year-end. 2 099 231 1 932 375 1 551 343 Annual Report 2010 Parent company KORADO, a.s. KORADO Bulgaria 1 176 1 153 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 135 167 21
Page 1 and 2: ANNUAL REPORT 2010
Page 4 and 5: 4 CONTENTS Foreword from the Managi
Page 6 and 7: 6 CORPORATE STRATEGY AND GOALS KORA
Page 8 and 9: 8 TABLE OF FINANCIAL INDICATORS 200
Page 10 and 11: 10 Management The Company is divide
Page 12 and 13: 12 KORADO Group consolidated revenu
Page 14 and 15: 14 DESCRIPTION OF SUBSIDIARIES AND
Page 16 and 17: 16 KORADO Bulgaria A.D. - was found
Page 18 and 19: 18 FINANCIAL POSITION The persistin
Page 22 and 23: 22 SALES AND MARKET POSITION The co
Page 24 and 25: 24 QUALITY MANAGEMENT SYSTEM AND TH
Page 26 and 27: 26 INDEPENDENT AUDITOR‘S REPORT T
Page 30 and 31: 30 BALANCE SHEET - LONG FORM Czech
Page 32 and 33: 32 CASH FLOW STATEMENT Czech Statut
Page 34 and 35: 34 KORADO, a.s. Financial Statement
Page 48 and 49: 48 KORADO Group CONSOLIDATED STATEM
Page 50 and 51: 50 KORADO Group CONSOLIDATED CASH F
Page 52 and 53: 52 KORADO GROUP Notes to the Consol
Page 70 and 71:
70 KORADO GROUP Notes to the Consol
Page 72 and 73:
72 SWORN AFFIDAVIT We hereby certif
Page 74:
KORADO, a.s. Bří Hubálků 869, 5
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