17.1.FINANCIAL ASSETS AVAILABLE FOR SALE
For 12 months 2010
For 12 months 2009
Balance at the beginning of the period 23 471 17 150
Increases 406 3 757
Write down of financial assets available for sale (1 763) 2 564 As at the end of the period 22 114 23 471
Assets available for sale are included into long-term assets and cover:
As at 2010-12-31
As at 2009-12-31 Securities quoted on the stock exchange:
- including equity securities 22 088 23 445
Securities not quoted on the stock exchange:
- including equity securities 26 26
Total long term equity securities 22 114 23 471
Assets available for sale include the shares of VISTULA & WÓLCZANKA S.A. purchased in 2008 (named: Vistula Group SA after merger with W. Kruk SA on 31 December 2008), which are quoted on the Warsaw Stock Exchange.
The Parent Company presents the said assets as long term financial assets due to the agreement signed 28 July 2009 which limits the sale of certain shares of Vistula Group S.A. (7 927 701 shares). The said agreement was concluded with Vistula Group SA and Fortis Bank Polska SA. An agreement limiting the sale of shares was signed for the conditional period depending on – among others – concluding an agreement on acquisition of a new issue of Vistula Group SA shares amounting to 8 247 423 by Grupa Fortis. Moreover, Grupa Fortis is obliged to possess Vistula Group SA at least 5 577 568 shares, not longer than to 29 February 2012.
Fortis Group should maintain not fewer than 5 577 568 the shares of Vistula Group S.A. If the Group does not fulfill this obligation, then tripartite agreement limiting the sale of Vistula Group shares is considered null and void.
During the agreed period, Alma Market SA agreed towards Bank and Vistula Group SA not to sell, charge, dispose in any way, put in a tender for sale or exchange any shares of Vistula Group S.A. without prior consent of Fortis Bank Polska SA. Due to the said agreement limiting the sale of some shares, Vistula Group S.A. committed to paying the remuneration for the benefit of Alma Market SA during the period of the said limitation.
This position presents also capital investments listed on the Warsaw Stock Exchange and purchased by the Krakchemia SA subsidiary. Financial assets available for sale are valued at every reporting date; valuation amount is transferred into equity from other total revenues. .
17.2.TRADE RECEIVABLES AND OTHER RECEIVABLES
As at 2010-12-31
As at 2009-12-31
Trade receivables 124 940 83 561 Minus: write-downs of trade receivables (5 068) (3 475)
Trade receivables – net 119 872 80 086
Other receivables 14 505 6 753 Minus: write-downs of other receivables (341) (399)
Other receivables net 14 164 6 354
Prepayments 249 138
Suspended amounts (guarantee deposits) 916 754 Prepaid expenses 1 311 1 240
Total receivables 136 512 88 572
Minus: long term parts – prepaid expenses (135) (137) Minus: long term part - securities (916) (754)
Receivables – short-term part 135 461 87 681
As at 2010-12-31
As at 2009-12-31
Long-term part - securities 916 754 Long-term part – prepaid expenses 135 137
Amounts displayed in the position “trade receivables” concern receivables due sales of merchandises with postponed payments (wholesale turnover) and services supplied (promotion, marketing and property lease). Write-downs on the trade receivables concern mainly the receivables due to wholesale trade.
"Other receivables" are receivables due to taxes, receivables from employees and other receivables. Other material amounts included in the position "other receivables" are receivables due to taxes and due to deposits.
Presented balance sheet values of trade receivables and other receivables equal to their fair value.
Write downs of receivables:
Actual write – downs on receivables:
For 12 months 2010
For 12 months 2009
Balance at the beginning of the reporting period 3 874 2 238
- trade receivables 4 957 4 022 - other receivables 120 331
Total increases in write - downs 5 077 4 353
Decreases in write downs (3 542) (2 717)
Balance at the end of the reporting period 5 409 3 874
17.3.THE MATURITY STRUCTURE OF FINANCIAL ASSETS
The operations conducted by the Companies are exposed to the following financial risks:
- market risk, including the risk of fluctuations in the foreign exchange rates (above all EUR/PLN), fair value risk related to changes in interest rates and other market risk;
- credit risk; - liquidity risk;
The Companies are attempting to minimize the potential unfavorable impact of those risks on the financial results. The Management Boards of the Companies directly manage risk, analyzing the scale of the risk on a current basis and taking appropriate decisions. Below, the credit risk is described qualitatively and quantitatively.
Credit risk due to receivables
Due to the type of operations in which it engages, the Group is exposed to the slight risk of deferred payments in respect of its sales. Average balance of receivables due to the sale of goods and services in 2009 and 2010 equaled to 8% of total revenues. The said risk mainly concerns wholesales with postponed payments (22.55% of total sales) and sale of services, which does not exceed 5% of total revenues in 2010.
When it comes to wholesale trade, the Group hedges its receivables (i.e. insurance of receivables, IOY, guarantee). The said risk is however minimized due to the fact, that these receivables are spread – i.e. concern numerous suppliers.
In case of overdue receivables due to services, when the contracting party does not agree on the compensation of mutual receivables and liabilities, the Group introduced detailed rules on debt recovery. In order to collect the debts, the designated Departmental and external Legal Offices undertake certain actions aimed at full debt recovery – i.e. sending dunning letters and taking legal actions.
All financial assets overdue more than one year are subject to write-downs and are put under court debt recovery procedures. In practice, 70% of sales are retail sales, where receivables do not incur due to cash sales.
Structure of receivables and borrowings classified under the length of maturity period is displayed below.
Receivables overdue As at 2009-12-31 in days YEAR 2009
0-120 121-360 >360 Total
Trade receivables gross 75 248 3 296 5 017 83 561 Minus: receivables write downs settled through
the financial result (1 035) (847) (1 593) (3 475)
Trade receivables - net 74 213 2 449 3 424 80 086
Other receivables 6 311 247 195 6 753 Minus: write downs of other receivables (213) (119) (67) (399)
Other receivables net 6 098 128 128 6 354
Advance payments* 138 - - 138 Suspended amounts (guarantee deposits) - - 754 754
80 449 2 577 4 306 87 332
Prepaid expenses 1 103 - 137 1 240 Minus: long term part – prepaid expenses - - (137) (137) Minus: long term part – guarantee deposits - - (754) (754)
Balance sheet position of short term
receivables 81 152 2 577 3 552 87 681
Long term receivables As at 2009-12-31 in days YEAR 2009
0-120 121-360 >360 Total Long term part: trade receivables
Prepaid expenses - - 137 137 Security deposits - - 754 754
Balance sheet position of long term
receivables - - 891 891
Receivables overdue As at 2010-12-31 in days YEAR 2010
0-120 121-360 >360 Total
Trade receivables gross 118 448 1 827 4 665 124 940 Minus: trade receivables write downs settled
through the financial result (816) (979) (3 273) (5 068)
Trade receivables - net 117 632 848 1 392 119 872
Other receivables 10 734 97 3 674 14 505 Minus: write down of other receivables - (5) (336) (341)
Other receivables net 10 734 92 3 338 14 164
Prepayments* 249 - - 249 Retain amounts (security deposits) - - 916 916
128 615 940 5 646 135 201
Accruals and deferrals 1 176 - 135 1 311 Minus: long term part – prepaid expenses - - (135) (135) Minus: long term part – security deposits - (916) (916)
Balance sheet position of short term
receivables 129 791 940 5 464 135 461
*Prepayments concern in majority the investment tasks and result from the concluded contracts, so that are presented within short-term receivables.
Long term receivables As at 2010-12-31 in days YEAR 2010
0-120 121-360 >360 Total Long term part: trade receivables
Prepaid expenses - - 135 135 Security deposits - - 916 916
Balance sheet position of long term
receivables - - 1 051 1 051
* Prepayments connected to investments are included in the short-term receivables in the position "other receivables". Due to the rapid execution of investments planned to be concluded within several months, various receivables due to advance payments and deposits expire, the next resulting from the following agreement appear.
Receivables are displayed in their fair value.
17.4. REGISTER OF FINANCIAL ASSETS EXPOSED AT CREDIT RISK
As at 2010-12-31
As at 2009-12-31
Financial assets available for sale 22 114 23 471 Loans and receivables 136 512 88 572 Cash in hand and at bank 4 762 4 698 Short term bank deposits 6 803 8 224 Cash in transit 4 902 4 543 Foreign currency forwards (83) (51)
Total 175 010 129 457
In the above table there is displayed in the numeral form the maximum amount exposed at credit risk, due to granted loans, not obtained receivables, as well as the owned financial assets available for sale, cash and cash equivalents.
In order to decrease the said risk the Companies have intensified debt recovery actions and shortened the payment period for the services delivered to counterparties. Moreover, mutual settlements (compensations) are gradually being introduced.
17.5.CASH AND CASH EQUIVALENTS
As at 2010-12-31
As at 2009-12-31
Cash in hand and at bank 4 762 4 698 Short term bank deposits 6 803 8 224 Including interest calculated on deposits 25 15 Cash in transit 4 902 4 543
Total cash and cash equivalents 16 467 17 465
* In the position „Short-term bank deposits" interest calculated on short term bank deposits are treated as cash and cash equivalents.
For the purpose of the cash flow statement, cash and cash equivalents cover bank overdraft on the current account – the table below has been adjusted by the interest calculated on short-term bank deposits.
As at 2010-12-31
As at 2009-12-31
Cash and cash equivalents 16 442 17 450 Overdraft in the current account (20 104) (36 033)
Cash and cash equivalents adjusted by the overdraft on the current account