Annual Report Gorenje Group 2009
Annual Report Gorenje Group 2009 Annual Report Gorenje Group 2009
anticipated reversionary increases, it is assumed that all notices, and when appropriate counternotices, have been served validly and within the appropriate time. (iv) Investments in equity and debt securities The fair value of financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date. The fair value of held-to-maturity investments is determined for disclosure purposes only. (v) Trade and other receivables The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. Trade and other receivables are not discounted due to maturity. Impairment loss to fair value is considered. (vi) Derivatives The fair value of derivatives is estimated as the present value of estimated future cash flows, taking into account the market value of equivalent derivatives at the reporting date and using market interest rates for similar derivatives at the reporting date. The fair value of financial instruments is determined on the basis of data provided by Reuters. The decisive values are those of the opposite forward exchange transactions with equal maturities effective at the reporting date. The fair value of forward exchange transactions at the reporting date is the difference between the value of actually concluded forward exchange transactions and the value of opposite forward exchange transactions at the reporting date, taking into consideration equal maturities of the individual forward exchange transactions. Decisive are the values of interest transactions with equal maturities effective at the reporting date. The fair value of interest rate swaps at the date of the statement of financial position is the discounted difference between the cash flow for interest under the interest rate swap contracts and the cash flow for interest under equivalent interest rate swap contracts at the date of the statement of financial position. (vii) Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. In respect of the liability component of convertible notes, the market rate of interest is determined by reference to similar liabilities that do not have a conversion option. For finance leases the market rate of interest is determined by reference to similar lease agreements. Loans and borrowings are measured, on the basis of recalculation, at effective interest rates that insignificantly differ from the contractual interest rates. Therefore the contractual interest rate is used in calculations. 189 Annual Report Gorenje Group 2009
COMPANY - 5. FINANCIAL RISK MANAGEMENT In respect of financial risk management, the internal financial policies comprising the bases for efficient and systematic risk management were observed in 2009. The objectives of risk management are: • to achieve stability of operations and to reduce risk exposure to an acceptable level, • to increase the value of companies and the impact on their financial standing, • to increase financial income and/or to decrease financial expenses, and • to nullify and/or decrease the effects of exceptionally damaging events. In the Company, the following key financial risks have been defined: Financial risks Credit risk Currency risk Interest rate risk Liquidity risk The exposure to each of the above risks and the hedge measures to be applied are judged and implemented on the basis of their effects on the cash flows. To hedge against financial risks in the course of ordinary business activities, relevant hedging activities have been conducted in the area of operating, investing and financing activities. In the light of the strained macroeconomic situation, more attention was paid in 2009 to the credit risk which includes all risks where the failure of a party (a buyer) to discharge contractual obligations results in a decrease in economic benefits of the Company. The credit risk was managed by application of the following sets of measures: • insurance of a major portion of operating receivables against credit risk with Slovenska izvozna družba - Prva kreditna zavarovalnica d.d.; • additional collateralisation of more risky trade receivables by bank guarantees and other security instruments; • regular monitoring of operation and financial standing of new and existing business partners, and limitation of exposure to certain business partners; • implementation of mutual and chain compensation with buyers; • systematic and active control of credit limits and collection of receivables. Taking into account the above mentioned hedge measures, the Company's management estimates that the exposure to credit risk has increased. With regard to the geographic diversification of its operations, the Company is strongly exposed to currency risk, which is the risk that the economic benefits of the Company may be decreased due to changes in foreign exchange rates. When assessing the risks, balance sheet exposure has been considered. The currency risk mainly results from the performance of business activities in the markets of Great Britain, Poland, Hungary, Croatia, and the US dollar markets. A greater attention was paid to natural hedging of currency risks and harmonisation of business operations to ensure long-term decrease in currency fluctuation exposure by matching or netting sales and purchases. Additional short-term hedging is carried out by currency future contracts and short-term borrowings in currencies, to which the Company is exposed. Irrespective of measures taken to hedge against currency risk, the Company’s management estimates that, due to significant macroeconomic changes and oscillations in particular in the East European countries, the exposure to currency risk has increased. 190 Annual Report Gorenje Group 2009
- Page 145 and 146: GROUP - NON-CURRENT INVESTMENTS Not
- Page 147 and 148: GROUP - INVENTORIES Note 26 - Inven
- Page 149 and 150: GROUP - OTHER CURRENT ASSETS Note 2
- Page 151 and 152: GROUP - EARNINGS PER SHARE Note 32
- Page 153 and 154: Movement of provisions in 2009 in T
- Page 155 and 156: Some non-current borrowings are sim
- Page 157 and 158: GROUP - TRADE PAYABLES Note 37 - Tr
- Page 159 and 160: Impairment loss 8,780 3,512 Allowan
- Page 161 and 162: in TEUR Carrying amount Expected ca
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- Page 165 and 166: Fair value scale The table shows me
- Page 167 and 168: GROUP - EVENTS AFTER THE REPORTING
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- Page 171 and 172: Mora Moravia s r.o., Czech Republic
- Page 173 and 174: Gorenje UK Ltd., Great Britain Gore
- Page 175 and 176: FOREIGN CURRENCY EXCHANGE RATES App
- Page 177 and 178: STATEMENT OF FINANCIAL POSITION Sta
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- Page 203 and 204: in TEUR 2009 2008 Interest expenses
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- Page 207 and 208: Changes in intangible assets in 200
- Page 209 and 210: Carrying amount at 1 Jan 2008 12,95
- Page 211 and 212: COMPANY - INVESTMENTS IN SUBSIDIARI
- Page 213 and 214: Long-term loans to specific groups
- Page 215 and 216: Short-term loans in TEUR 2009 2008
- Page 217 and 218: Kemis-Termoclean, d.o.o., Croatia 2
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- Page 223 and 224: COMPANY - CURRENT FINANCIAL LIABILI
- Page 225 and 226: Trade payables to suppliers in the
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- Page 229 and 230: 31 December 2008 in TEUR Carrying a
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- Page 233 and 234: COMPANY - FAIR VALUE Note 36 - Fair
- Page 235 and 236: Net earnings in 2009 in TEUR Manage
- Page 237 and 238: Net earnings in 2008 in EUR Salarie
- Page 239 and 240: COMPANY - EVENTS AFTER THE DATE OF
- Page 241: Imprint: Publisher: Gorenje, d.d.,
COMPANY - 5. FINANCIAL RISK MANAGEMENT<br />
In respect of financial risk management, the internal financial policies comprising the bases for efficient<br />
and systematic risk management were observed in <strong>2009</strong>. The objectives of risk management are:<br />
• to achieve stability of operations and to reduce risk exposure to an acceptable level,<br />
• to increase the value of companies and the impact on their financial standing,<br />
• to increase financial income and/or to decrease financial expenses, and<br />
• to nullify and/or decrease the effects of exceptionally damaging events.<br />
In the Company, the following key financial risks have been defined:<br />
Financial risks<br />
Credit risk<br />
Currency risk<br />
Interest rate risk<br />
Liquidity risk<br />
The exposure to each of the above risks and the hedge measures to be applied are judged and<br />
implemented on the basis of their effects on the cash flows. To hedge against financial risks in the<br />
course of ordinary business activities, relevant hedging activities have been conducted in the area of<br />
operating, investing and financing activities.<br />
In the light of the strained macroeconomic situation, more attention was paid in <strong>2009</strong> to the credit risk<br />
which includes all risks where the failure of a party (a buyer) to discharge contractual obligations<br />
results in a decrease in economic benefits of the Company. The credit risk was managed by<br />
application of the following sets of measures:<br />
• insurance of a major portion of operating receivables against credit risk with Slovenska<br />
izvozna družba - Prva kreditna zavarovalnica d.d.;<br />
• additional collateralisation of more risky trade receivables by bank guarantees and other<br />
security instruments;<br />
• regular monitoring of operation and financial standing of new and existing business partners,<br />
and limitation of exposure to certain business partners;<br />
• implementation of mutual and chain compensation with buyers;<br />
• systematic and active control of credit limits and collection of receivables.<br />
Taking into account the above mentioned hedge measures, the Company's management estimates<br />
that the exposure to credit risk has increased.<br />
With regard to the geographic diversification of its operations, the Company is strongly exposed to<br />
currency risk, which is the risk that the economic benefits of the Company may be decreased due to<br />
changes in foreign exchange rates. When assessing the risks, balance sheet exposure has been<br />
considered. The currency risk mainly results from the performance of business activities in the markets<br />
of Great Britain, Poland, Hungary, Croatia, and the US dollar markets. A greater attention was paid to<br />
natural hedging of currency risks and harmonisation of business operations to ensure long-term<br />
decrease in currency fluctuation exposure by matching or netting sales and purchases. Additional<br />
short-term hedging is carried out by currency future contracts and short-term borrowings in currencies,<br />
to which the Company is exposed. Irrespective of measures taken to hedge against currency risk, the<br />
Company’s management estimates that, due to significant macroeconomic changes and oscillations in<br />
particular in the East European countries, the exposure to currency risk has increased.<br />
190<br />
<strong>Annual</strong> <strong>Report</strong> <strong>Gorenje</strong> <strong>Group</strong> <strong>2009</strong>