ANNUAL REPORT - KORADO, as

KORADO, a.s.
Financial Statements for the year ended 31 December 2010
Bank loans extended by UniCredit Bank Czech Republic, a.s.
are secured by the pledge of movable and immovable assets
(see Note 4b), by the pledge of trade receivables (see Note
6), by the pledge of short-term financial assets (see Note 8)
and by the cession of receivables from property insurance
benefits exceeding CZK 5,000 thousand per insurance
claim.
15. INCOME TAXES
Based on the tax legislation, the Company is allowed to carry
on tax losses incurred in 2008 and 2010 to the next five years.
The tax loss which was not used in 2010 and will be carried
In 2008, the Company launched the 4th production line which
was financed through investment incentives. The amount of
potential investment incentive related to capital expenditures
already incurred was approximately CZK 170 million as at
31 December 2010 and 2009. The Company plans to meet
all relevant criteria for drawing these funds and use the investment
incentive in the future and, in addition, the Compa-
14. OTHER LIABILITIES
Accruals include, in particular, costs of electricity, gas and
communications, and bonuses to customers.
2010 2009
(in CZK thousands) (in CZK thousands)
Profit before taxes 19,644 66,395
Differences between book and tax depreciation (97,017) (83,698)
Reversal of impairment provisions (8,418) (13,838)
Creation of provisions 2,880 1,322
Other (e.g. receivable write-off, entertainment expenses, shortages and losses) 15,429 36,388
Tax base before adjustments (67,482) 6,569
Tax loss carry forward used - (4,898)
Taxable income / (tax loss) (67,482) 1,671
Current income tax rate (in %) 19 % 20%
Tax due - 334
Tax relief - (334)
Income tax - -
The Company quantified deferred taxes as follows (in CZK thousands):
on to following years amounted to CZK 72,537 thousand as
at 31 December 2010.
Deferred tax items 2010 2009
Deferred Deferred Deferred Deferred
tax tax tax tax
asset liability asset liability
Difference between net book value
of fixed assets for accounting and tax purposes - (118,464) - (126,321)
Other temporary differences:
Impairment provision receivables 334 - 160 -
Impairment provision against inventory 327 - 407 -
Provisions and unpaid social and health insurance 2,101 - 2,233 -
Tax loss not claimed 13,782 - 27,595 -
Deferred tax asset from investment incentives 29,759 - 23,765 -
Total 46,303 (118,464) 54,160 (126,321)
Net - (72,161) (72,161)
ny believes to generate sufficient taxable profits in the future
in order to claim the investment incentive. The Company did
not record a deferred tax asset from the investment incentive
in full amount as its recovery is uncertain. However, the Company
recorded a deferred tax asset of CZK 29,759 thousand
and CZK 23,765 thousand, respectively, as at 31 December
2010 and 2009.
Annual Report 2010 41