Notes to the Consolidated Financial Statements for the Year Ended 31 December 20122013
Instructions:
· This document contains general information and the application of the contents to specific cases will depend on particular circumstances. Deloitte does not provide accounting, investment, legal, tax or other professional advice or services through this document. This document is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect you or your business, you should consult your professional advisor. Deloitte accepts no responsibility for any losses sustained by any person as a result of placing reliance on the information presented in this document;
· This version is general and extensive, unnecessary parts may be omitted in specific cases;
· If the relevant disclosure section is not relevant for the Company, no comments need to be provided on this matter (e.g., the Company has no pledged assets) and the relevant section can be deleted;
· Text in bold + italics represents instructions;
· Slashes represent multiple options;
· Dots in the text represent space for filling in information;
· Most of the tables are linked to the financial statements, i.e., it is necessary to check whether data from the table agrees with the financial statements;
· It is necessary to modify the standard wording for a limited liability company, because the notes have been prepared primarily in respect of joint stock companies;
· If a table can be replaced with a note disclosure of the same informative value and the note disclosure is shorter, please delete the table and use the note disclosure;
· Comment on all material and non-recurring items;
· Remember to indicate the Company’s name in the footer and to update the table of
contents;
· If the Group used the profit and loss account structured by the function of expense/income method (‘ucelove cleneni’), then the notes always need to include the profit and loss account structured by the nature of expense/income method (‘druhove cleneni’).
notes to the consolidated financial statements
for the year ended 31 december 20122013
Name of the Parent Company: ...... ……………......
Registered Office: ...... ……………......
Legal Status: Joint stock company/Limited liability company
Corporate ID: ...... ……………......
TABLE OF CONTENTS
1. general information 4
1.1. Incorporation and Description of the Consolidating Entity (hereinafter also the “Parent Company”) 4
1.2. Year-on-Year Changes and Amendments to the Register of Companies 4
1.3. Organisational Structure of the Parent Company 4
2. DEFINITION OF THE CONSOLIDATION ENTITY (HEREINAFTER ALSO THE “GROUP”) 5
2.1. Subsidiaries 6
2.2. Shares in Associates 6
2.3. Jointly Controlled Entities 6
2.4. Board of Directors and Supervisory Board of the Parent Company 7
3. basis of accounting AND GENERAL ACCOUNTING PRINCIPLES 8
3.1. Scope of Consolidation and Consolidation Method 8
3.2. Full Consolidation Method 9
3.2.1. Description of the Full Consolidation Method 9
3.2.2. Stages of the Full Consolidation Method 9
3.3. Consolidation using the Equity Method of Accounting 12
3.3.1. Description of Consolidation using the Equity Method of Accounting 12
3.4. Proportionate Consolidation 13
3.4.1. Tangible Fixed Assets 14
3.4.2. Intangible Fixed Assets 15
3.4.3. Patents and Trademarks 16
3.4.4. Goodwill 16
3.4.5. Non-Current Financial Assets 16
3.4.6. Current Financial Assets 18
3.4.7. Derivative Financial Transactions 18
3.4.8. Inventory 21
3.4.9. Receivables 22
3.4.10. Trade Receivables 22
3.4.11. Loans 22
3.4.12. Reserves 22
3.4.13. Foreign Currency Translation 23
3.4.14. Finance Leases 23
3.4.15. Taxation 24
3.4.16. Impairment 25
3.4.17. Borrowing Costs 25
3.4.18. Government Grants 25
3.4.19. Revenue Recognition 26
3.4.20. Use of Estimates 26
3.4.21. Extraordinary Expenses and Income 26
3.4.22. Year-on-Year Changes in Valuation, Depreciation or Accounting Policies 26
3.4.23. Other Matters 27
3.4.24. Cash Flow Statement 27
4. additional information on the CONSOLIDATED balance sheet and profit and loss account 28
4.1. Consolidation 28
4.1.1. Proportionate Consolidation 28
4.1.2. Disposal of Subsidiary 29
4.1.3. Acquisition of Subsidiary 29
4.2. Intangible Fixed Assets 30
4.2.1. Internally Generated Intangible Fixed Assets 32
4.3. Tangible Fixed Assets 33
4.3.1. Fixed Assets Pledged as Security 35
4.3.2. Assets Held under Finance and Operating Leases 36
4.4. Accounting for Goodwill Arising on Consolidation 37
4.5. Non-Current Financial Assets 37
4.5.1. Non-Current Securities and Equity Investments Available for Sale 37
4.5.2. Other Debt Securities Held to Maturity (Foreign Currency) 38
4.5.3. Acquisition of Non-Current Financial Assets 38
4.5.4. Non-Current Financial Assets Pledged as Security 38
4.6. Inventory 38
4.7. Long-Term Receivables 39
4.8. Short-Term Receivables 39
4.9. Current Financial Assets 40
4.10. Deferred Expenses and Accrued Income 40
4.11. Equity 40
4.11.1. Changes in Equity 40
4.11.2. Shares Issued during the Reporting Period 41
4.12. Reserves 41
4.13. Long-Term Payables 41
4.13.1. Collateralised Long-Term Payables or Otherwise Secured 42
4.14. Short-Term Payables 42
4.14.1. Aging of Short-Term Trade Payables 42
4.15. Loans 42
4.16. Temporary Liabilities 42
4.17. Derivative Financial Instruments 42
4.18. Income Taxation 43
4.18.1. Deferred Taxation 43
4.18.2. Income Tax Charge (Credit) 44
5. additional information on the consolidated profit and loss account 45
5.1. Details of Income by Principal Segment 45
5.2. Profit from Operating Activity by Principal Segments 45
5.3. Consumed Purchases 46
5.4. Services 46
5.4.1. Aggregate Expenses for Remuneration to the Statutory Auditor/Audit Firm 46
5.5. Depreciation of Intangible and Tangible Fixed Assets 46
5.6. Change in Reserves and Provisions Relating to Operating Activities and Complex Deferred Expenses 47
5.7. Other Operating Income 47
5.8. Other Operating Expenses 48
5.9. Proceeds of the Sale of Securities and Investments, Securities and Investments Sold 48
5.10. Income from Non-Current Financial Assets 48
5.11. Income from Current Financial Assets 48
5.12. Costs of Financial Assets 48
5.13. Income from the Revaluation of Securities and Derivatives 49
5.14. Costs of the Revaluation of Securities and Derivatives 49
5.15. Change in Reserves and Provisions Relating to Financial Activities 49
5.16. Interest Income 49
5.17. Other Financial Income 49
5.18. Other Financial Expenses 50
5.19. Transfer of Financial Expenses and Transfer of Financial Income 50
5.20. Aggregate Research and Development Costs 50
5.21. Off-Balance Sheet Transactions 50
6. EMPLOYEES, gROUP MANAGEMENT AND STATUTORY BODIES 52
6.1. Staff Costs and Number of Employees 52
6.2. Loans, Borrowings, and Other Benefits Provided 52
7. CONTINGENt liabilities AND OFF BALANCE SHEET commitments 54
8. post balance sheet events 56
1. general information
1.1. Incorporation and Description of the Consolidating Entity (hereinafter also the “Parent Company”)
(Name of the parent company as indicated in the details held at the Register of Companies) was formed by a Deed of Association/Memorandum of Association/Founder’s Deed (in the case of one founder) as a joint stock company/limited liability company on ...... and was incorporated following its registration in the Register of Companies held by the Court in ...... on ...... The principal activities of the Parent Company are (Provide a list of principal activities.).
The Parent Company’s registered office is located at (The registered office address as indicated in the details held at the Register of Companies, disclose the place of business if different from the registered office as stated in the Register of Companies.)
The Parent Company’s issued share capital is CZK xxx.
The consolidated financial statements have been prepared as of and for the year ended 20112013.
(Detail the individuals and legal entities with ownership interest in the Parent Company of 20percent or greater and their ownership percentage, describe any changes or amendments made in the previous reporting period in the details held at the Register of Companies.)
Shareholder/Owner / Ownership percentageOther
Total / 100 %
(Also give details of agreements, if any, put in place between the shareholders/owners, which establish voting rights regardless of the share of the Parent Company’s share capital - this relates to a shareholding in companies equal to or in excess of 20 percent.)
1.2. Year-on-Year Changes and Amendments to the Register of Companies
(Describe changes and amendments to the Register of Companies, such as a change of the registered office, a change of name, a change of the subject of operations, etc. In addition, disclose matters approved by the general meeting of shareholders, which have not as yet been recorded in the Register of Companies, indicate if the petition to have the details in the Register of Companies updated has been submitted.)
1.3. Organisational Structure of the Parent Company
(Describe the organisational structure and any significant changes in the structure made during the previous reporting period.)
2. DEFINITION OF THE CONSOLIDATION ENTITY (HEREINAFTER ALSO THE “GROUP”)
Name / Registered office / Share in equity(percentage) / Dependence degree / Consolidation method
Parent Company / Registered office / n/a / n/a / n/a
Subsidiary / Registered office / 100 / Controlling influence / Full
Subsidiary / Registered office / 56 / Controlling influence / Full
Associate / Registered office / 25 / Significant influence / Equity
Joint venture / Registered office / Proportionate consolidation
The Group does not include the following companies due to …
(Please state the reason for choosing the consolidation method in each entity.)
(Please provide a list and the corporate name and registered office of the accounting entities not included in the Group and the reason for non-inclusion. )
Name / Registered office / Share in equity(percentage) / Reason for non-consolidation
Subsidiary / Registered office / 100
Subsidiary / Registered office / 56
Associate / Registered office / 25
Financial statements of all companies, both consolidated and unconsolidated, are available in the registered office of the Parent Company Address.
Consolidated financial statements of all companies, both consolidated and unconsolidated, are available in the registered office of the Parent Company Address.
Changes in the Composition of the Consolidation Group
The consolidated Group has been recently extended to include subsidiaries XXX and XXX, and associates XXX and XXX as a result of yyyyyyyyy. When compared to the year ended 31 December 20122013, the consolidated Group does not include the subsidiaries XXX and XXX and the associates XXX and XXX, due to yyyyyyyyyyyy (sale, no opportunity to obtain data etc. – refer to the Consolidation Rules) and companies controlled in concert.
The balance sheet date of the companies included in the Group is 31 December 20112013. (State the balance sheet date of entities included in the Group if it is different from the balance sheet date of the Parent Company.)
2.1. Subsidiaries
The following table summarises the information about subsidiaries as of
31 December 20122013:
(or registration) and operation / Ownership interest percentage / Voting rights percentage / Principal activity
(Please describe the principal activity of the subsidiary in the Principal activity column or use the space under the table to do so.)
2.2. Shares in Associates
(CZK thousand)
31 Dec 20122013 / 31 Dec 20112012Investment costs
Share in post-acquisition profit and dividends
received and amortisation of goodwill on consolidation
The following two tables summarise the information about the associates of the Group as of 31 December 20122013:
Name / Place of incorporation(or registration) and operation / Ownership interest / Voting rights / Principal activity
(Please describe the principal activity of the associate in the Principal activity column or use the space under the table to do so.)
2.3. Jointly Controlled Entities
The Group has significant interests in the following jointly-controlled entities:
(Please describe the principal activity of joint ventures.)
(If the Company is included in the Group, please state its specification.)
2.4. Board of Directors and Supervisory Board of the Parent Company
(Name the members of the Board of Directors and Supervisory Board, indicating their positions as of the balance sheet date.)
Position / NameBoard of Directors / Chairman
Vice-chairman
Member
Supervisory Board / Chairman
Vice-chairman
Member
During the year ended 31 December 20122013, the following changes were made to the composition of the Company’s Board of Directors and Supervisory Board:
Board of Directors:
Position / Original member / New member / Date of changeSupervisory Board:
Position / Original member / New member / Date of change3. basis of accounting AND GENERAL ACCOUNTING PRINCIPLES
The Company’s accounting books and records are maintained and the financial statements were prepared in accordance with the Accounting Act 563/1991 Coll., as amended; the Regulation 500/2002 Coll. which provides implementation guidance on certain provisions of the Accounting Act for reporting entities that are businesses maintaining double-entry accounting records, as amended by the Regulation 472/2003 Coll. and the Regulation 397/2005 Coll.; and Czech Accounting Standards for Businesses.
The accounting records are maintained in compliance with general accounting principles, specifically the historical cost valuation basis with certain exceptions as described in Note xxx, the accruals principle, the prudence concept and the going concern assumption.
In order to compile the consolidated financial statements of the … Group, the accounting principles applied by the Group companies were brought into conformity. Significant accounting policies adopted by individual Group companies are set out below.
These consolidated financial statements are presented in thousands of Czech crowns (‘CZK’).
3.1. Scope of Consolidation and Consolidation Method
Consolidation is performed using the direct consolidation method (or by each sub-group level) as appropriate. Direct consolidation involves consolidation of all accounting entities of the Group at once without using the consolidated financial statements or financial statements presented for consolidation sub-groups. Consolidation by levels means that financial statements for lower groupings are entered and form a part of the consolidated financial statements of higher groupings.
The Group consists of the Parent Company XXXXX, and its subsidiaries and associates. The definition of subsidiaries and associates is as follows:
Subsidiaries
· Investments in enterprises in which the Parent Company has the power to govern the financial and operating policies so as to obtain benefits from their operations are treated as ‘Equity investments in subsidiaries’.