ANNUAL REPORT - KORADO, as

38
KORADO, a.s.
Financial Statements for the year ended 31 December 2010
The intrinsic value of interest represents the Company’s
share in the equity of individual companies (positive number
or nil).
The nominal value of interest represents the Company’s
share in the basic capital of individual companies.
Financial information of certain subsidiaries indicates that
their equity is lower than the acquisition cost of interest. If
the management assumes that a future settlement of the difference
is uncertain, an impairment provision was created
against these financial investments in subsidiaries (see Note
7) on the basis of the difference between the acquisition
cost and the value of interest in equity (intrinsic value of interest).
Full impairment provision was created against financial
investments in subsidiaries and associates whose equity is
negative or where another uncertainty exists in the recoverability
of investment; an impairment provision was established
against loans provided to and receivables from a subsidiary
with negative equity up to the negative equity (see Note 7).
On 19 October 2010, the Annual General Meetings of KO-
RADO Deutschland decided on the payment of additional
charge amounting to EUR 374 thousand relating to the decrease
of basic capital of the company in 2008.
Profit or loss generated by the subsidiaries and associates
was as follows (in CZK thousands):
2010 2009
KORADO Deutschland - -
KORADO Croatia (2,408) (2,784)
KORADO Polska 2,923 (4,172)
KORADO Bulgaria 9,925 8,632
KORADO Austria (26) (217)
Total 10,414 1,459
Loans granted to subsidiaries as at 31 December were as
follows (in CZK thousands):
Maturity 2010 2009
KORADO Polska 31. 12. 2011* 48,931 51,674
Total loans 48,931 51,674
Impairment provision (48,931) (51,674)
Total - -
* The loans are granted with one-year maturity and expected
to be renewed at the maturity date.
In 2010 and 2009, interest from loans to subsidiaries amounted
to CZK 1,290 thousand and CZK 3,833 thousand, respectively.
Other long-term financial investments as at 31 December
were as follows (in CZK thousands):
2010 2009
Nominal Nominal
value value
Loan to Josef Janda - 849
Total - 849
5. INVENTORY
Excess, obsolete and slow-moving inventory has been written
down to its estimated net realizable value by an impairment provision
account. The impairment provision is determined by management
based on the aging analysis of inventory (see Note 7).
6. RECEIVABLES
Impairment provisions against outstanding receivables that
are considered doubtful (including receivables ceded to the
factoring company Transfinance) were charged to income
based on estimated recoverability of receivables in 2010 and
2009, respectively (see Note 7).
As at 31 December 2010 and 2009, receivables overdue for
more than 180 days (from non-related parties) totaled CZK
13,252 thousand and CZK 12,566 thousand, respectively.
The Company wrote off irrecoverable receivables of CZK
12 thousand and CZK 397 thousand in 2010 and 2009, respectively
due to cancellation of bankruptcy proceedings,
etc. Any impairment provisions created against these receivables
were reversed.
The Company concluded a contract with a factoring company,
Transfinance a.s., for the purchase of receivables with
recourse (see Note 3e). The receivables ceded to this company
amounted to CZK 38,569 thousand and CZK 17,253
thousand as at 31 December 2010 and 2009, respectively.
Impairment provisions against these receivables reflect their
recoverability.
The maturity of certain receivables of EUR 1,074 thousand
(CZK 26,907 thousand) from KORADO Deutschland was
postponed in 2000 and there is no fixed repayment date.
Based on the financial results of KORADO Deutschland, portions
of these receivables in the amount of EUR 117 thousand
(CZK 2,940 thousand) and EUR 117 thousand (CZK
3,096 thousand), respectively became due as at 31 December
2010 and 2009.
Receivables of CZK 58,282 thousand and CZK 107,810 thousand,
respectively were pledged as collateral as at 31 December
2010 and 2009 to secure loans granted by UniCredit
Bank Czech Republic, a.s. (see Note 13).
Receivables from related parties (see Note 20).
Annual Report 2010