ANNUAL REPORT - KORADO, as
ANNUAL REPORT - KORADO, as
ANNUAL REPORT - KORADO, as
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70<br />
<strong>KORADO</strong> GROUP<br />
Notes to the Consolidated Financial Statements for the Year Ended 31 December 2010 (In thousand CZK)<br />
The following tables demonstrate the sensitivity to a re<strong>as</strong>onably possible change in the exchange rates between functional<br />
currencies and foreign currencies, with all other variables held constant, of the Group’s profit before tax (due to the change in<br />
the fair value of monetary <strong>as</strong>sets and liabilities):<br />
2010 2009<br />
Incre<strong>as</strong>e/decre<strong>as</strong>e Effect on profit Incre<strong>as</strong>e/decre<strong>as</strong>e Effect on profit<br />
in exchange rate * before tax in exchange rate * before tax<br />
EUR +5 % (3,862) +5 % (23,284)<br />
GBP +5 % 1,605 +5 % 512<br />
PLN +5 % 1,316 - -<br />
USD +5 % 3 +5 % 11<br />
CHF +5 % (20) +5 % (35)<br />
EUR (5 %) 3,862 (5 %) 23,284<br />
GBP (5 %) (1,605) (5 %) (512)<br />
PLN (5 %) (1,316) - -<br />
USD (5 %) (3) (5 %) (11)<br />
CHF (5 %) 20 (5 %) 35<br />
* Incre<strong>as</strong>e means depreciation of functional currency against foreign currency. Decre<strong>as</strong>e means appreciation of functional<br />
currency against foreign currency..<br />
Liquidity risk<br />
The Group monitors its risk of shortage of funds by considering<br />
the maturity of both its financial <strong>as</strong>sets and financial lia-<br />
bilities and projected c<strong>as</strong>h flows from operations. The Group<br />
uses bank overdrafts to meet its short-term c<strong>as</strong>h needs and<br />
long-term bank loans to finance its long-term investments.<br />
The tables below summarize the maturity profile of the Group’s financial liabilities <strong>as</strong> at 31 December 2010 and 2009 b<strong>as</strong>ed<br />
on contractual undiscounted payments (nominal amount and interest) provided that the Group meets the loan agreement<br />
covenants (see Note 12):<br />
31 December 2010 Less than 3 months 3-12 months 1-5 years Total<br />
Bank loans 31,061 91,983 451,797 574,841<br />
Finance le<strong>as</strong>e obligations 17 63 - 80<br />
Trade and other payables 298,073 - - 298,073<br />
329,151 92,046 451,797 872,994<br />
31 December 2009 Less than 3 months 3-12 months 1-5 years Total<br />
Bank loans 71,978 273,979 387,367 733,324<br />
Finance le<strong>as</strong>e obligations 189 276 108 573<br />
Trade and other payables 322,212 - - 322,212<br />
394,379 274,255 387,475 1,056,109<br />
The management of the Company believes the Group will be<br />
able to generate sufficient c<strong>as</strong>h-flows to repay its liabilities or<br />
obtain other adequate funding from banks.<br />
Fair Value<br />
Fair value is defined <strong>as</strong> the amount at which the instrument<br />
could be exchanged in a current transaction between knowledgeable<br />
willing parties in an arm’s length transaction, other<br />
than in a forced or liquidation sale.<br />
The following methods and <strong>as</strong>sumptions are used to estimate<br />
the fair value of each cl<strong>as</strong>s of financial instruments:<br />
C<strong>as</strong>h and C<strong>as</strong>h Equivalents<br />
The carrying amount of c<strong>as</strong>h and c<strong>as</strong>h equivalents approximates<br />
fair value due to the relatively short-term maturity of<br />
this financial instrument.<br />
Receivables, Prepayments and Other Current Assets,<br />
Payables and Other Current Liabilities<br />
The carrying amount of receivables, prepayments and other<br />
current <strong>as</strong>sets, payables and other current liabilities approximates<br />
fair value due to the short-term maturity of these financial<br />
instruments.<br />
Annual Report 2010
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