2006 Annual Report - Toyota Financial Services

TOYOTA Financial Services Czech s.r.o. 

Annual Report 2006




Annual Report 2006 

Content 

Introduction 6 

Company 8 

Establishment of the Company and its history 8 

Products and services 10 

Wholesale 18 

Strategy for the business year 2007 19 

Report of independent auditors and financial statements 20 

Balance sheet 24 

Income statement 25 

Statement of changes in shareholder’s equity 26 

Cash flow statement 27 

General information 29 

Accounting policies 30 

Intangible fixed assets 34 

Tangible fixed assets 35 

Receivables 37 

Equity 38 

Provisions 39 

Payables 40 

Bank loans 41 

Derivative financial instruments 41 

Taxation 42 

Accruals and deferrals 43 

Revenue analysis 44 

Employee analysis 44 

Related party transactions 46 

Commitments 47 

Cash flow statement 48 

Report on relations 49 


5

6 


Financial year 2006 

Introduction 

Dear Ladies, Dear Gentlemen, Dear Friends, 

I have again the honour of sharing with you the information pertaining to our Company. It is a great privilege for me, 

since the previous year has been in many respects one of the most successful years in our short, 6-year history. 

The fiscal or financial year 2006 started by close business cooperation with the distributor of Toyota and Lexus cars in 

the Czech Republic – Toyota Motor Czech. As part of this cooperation, we have carried out jointly several very successful 

campaigns. 

Not the ones to rest on our laurels, in summer 2005 we started to prepare, in accordance with our plans, an additional 

loan (credit) product which was aimed at developing its absolute variability and transparency. In August 2005, we have 

thus launched Toyota Genio. As far as this product is concerned, I have a very good feeling a job of well-done, since apart 

from a sophisticated approach to our customers with respect to this product, where customers are given the opportunity 

to repay the loan contract early every 12 months, at a clearly defined amount, known (and presented) already upon 

entering into the contract, we have managed to offer something tangibly different than our competitors were offering 

in our market up till now. 

We tested the variability of Toyota Genio immediately in December 2005 when we offered to the existing customers of 

the Toyota Yaris model series, under the name ”Toyota Genio 50/50”, the opportunity to acquire the car upon entering 

into the loan contract for one year, the payment of insurance premium instalments only and the complete repayment of 

the price for the car after 12 months (however, the contract was otherwise concluded under standard arrangements 

applicable to Toyota Genio). This campaign lasted one month only, but produced fascinating results. Up till now this 

campaign has been imitated by some captive lease companies in our part of the European space with enormous success. 

But let me discuss now other issues than products for end customers. In October 2005 after having agreed and clarified 

our ideas and plans with our partner - Toyota Motor Czech we have relaunched the planned dealer support scheme in its 

modified form. The modifications consisted in the new approach to the financing scheme for demonstration cars, we have 

changed credit limits, implemented new securing features. Much work was done on the scheme – not only the system 

setting has been changed, the entire legal documentation has been amended as well. 

As I have already noted in the introductory part of the annual report for the previous fiscal year, the financial year 2006 

had to be the customer-oriented year for our Company. And thus we managed, in addition to the above achievements, 

(yes, even a car dealer is a customer for us) to launch at the very end of the year new web sites which contain, even 

though offline only for the time being, certain customer support based on advisory services and communication forms 

(it concerns both end customers and authorized dealers of Toyota and Lexus). As we intend to focus on web-based 

solutions in the future, we continue with our strategy adopted in the previous period and develop our web sites in such 

a manner to be able to offer to our customers and to our partners an additional tool for the exchange of information. 

This time it will not be an offline version anymore, but an online one. Since this is a relatively robust tool, the work on it 

will exceed the period of more than one fiscal year. However, I am firmly convinced that the end result will be worth it. 

Apart from this crucial project, we have managed to survey customer satisfaction and implemented appropriate tools 

to this effect. We are pleased to find, that on the scale of 1 to 5 (same as school grading scale) our customers gave us 

1.3 mark. This is not mark 1 without any reservation and therefore we have definitely to continue our efforts with a view 

to increasing customer satisfaction. 

We have also launched the program in support of ”return on customers”. For the time being, we are still testing this 

scheme with respect to the users of the model series Yaris. After assessing its success, obviously, this tool is going to be 

modified in such a manner to suit best to our customers. 

Last year when I was drafting the introductory part of the annual report I made a reference to the expansion of the 

Toyota Financial Services Group abroad under our supervision. I have also noted that we, as the supervisors of Toyota 

Financial Services Slovakia s.r.o., were delighted with their results. And this was at the time when I did not know yet what 

the final fiscal year 2006 results for both Czech and Slovak company will be like in business terms! I am extremely happy 

to be able to advise you of the fact that the Slovak Company after the first year of its existence acquired the biggest 

market share within Toyota Financial Services, i.e. the first position within the Europe-Africa region, under which we fall 

in terms of the organizational structure! The third position for TOYOTA Financial Services Czech is very gratifying, too. 

Thereby, for the five years of existence of our Company we have won all positions in the Czech Republic market 

(in virtual terms): gold (in 2004), silver (2003) and bronze (2005 and 2006).Our Slovak colleagues won already in the 



Financial year 2006 

Introduction 

first year of their existence the golden award. What awaits them in the future? We will have to wait for a year to get an 

answer to this question. 

However, fiscal year 2006 was successful for us also in other areas. We have reported the highest profit ever in our 

history and the long-term planned value of ROMA (Return of Managed Assets, under International Financial Reporting 

Standards measurement and recognition principles) was achieved for the first time. 

We have achieved this success on one hand by smart business negotiations with our partners, but also by well set rules 

pertaining to risk exposure on the other. The overall result has been undoubtedly influenced also by careful management 

of operating costs and continuous monitoring of profitability of contracts. 

Even in Slovakia we were more successful in terms of the financial result than the plan envisaged. A better result has been 

achieved by methods very similar to those used in the Czech Republic. 

Without our partners, as traditionally, our success would be unattainable. Last year, both distributors of Toyota and 

Lexus cars helped us a lot by their support – the Company Toyota Motor Czech spol. s r.o. (limited liability company) 

in the Czech Republic and Toyota Motor Slovakia s.r.o. in Slovakia and the distributor of Toyota fork-lift trucks in the 

Czech Republic – TOYOTA MATERIAL HANDLING CZECH REPUBLIC a.s. (joint-stock company). May I take this 

opportunity to express my sincere thanks to the management of all three companies and their employees. Our key 

partners are also insurance companies. In the Czech Republic, I would like to thank to the management and employees 

of the companies Kooperativa poji‰Èovna a.s., Allianz poji‰Èovna, a.s., Modul Servis s.r.o and in Slovakia to the Company 

Allianz – Slovenská poisÈovÀa a.s. 

Our employees. The linchpin of our efforts. Without them our firm would not be able to exist. All deserve many thanks 

and recognition of their unprecedented and long-term support. For I am always even more intensely aware, how crucial is 

their contribution to such small companies with a wide range of services on offer as we represent. 

Let me conclude this introduction to the annual report again by presenting our plans for the future period. Next year we 

would like to focus again on the automation of certain processes. We will also take the steps necessary for gradual 

implementation of our long-term strategy in the area of insurance. We will continue to work on Phase 2 of the client 

information exchange system (online). In the area of products we will endeavour to revive the idea of the repeated 

purchase of a new car by the customer after the completion of the financing cycle related to the previous car (the socalled 

Trade Cycle Management), either by using Toyota Vario or the modified Toyota Rent product. 

A long-term task for us is then the ongoing stabilization of all internal company processes with regard to the 

minimization of transaction errors (inputting information into the system, exchange of information within the firm, etc.), 

process optimization (working procedures) and procedure standardization. Radical changes will be made across the 

entire documentation and the retail area in particular. It is going to be completely revised . 

The development of our Company is a very dynamic one. We still endeavour to respond to the requirements of 

our customers and we are engaged in all activities that differentiate us from our competitors. Due to this fact we are 

faced with enormous tasks and big challenges are ahead for individual systems and overhead suppliers. 

Nevertheless, I believe that, despite the demanding period that is ahead of us next year and the following years, all the 

changes that we have to make, will contribute to the long-term prosperity and sizeable competitive advantage for 


Yours sincerely, 

Prague, 15 August 2006 

Ing. Ale‰ Kamar˘t 

Managing Director 


7

2001 2000 

8 


Annual Report 

Year ended 31 march 2006 

COMPANY 

Basic information: 

Name: TOYOTA Financial Services Czech s.r.o. 

ID No.: 65413261 

Registered office: Rubín Office Center, Sokolovská 192/79, 186 00 Praha 8 

Date of establishment: 30 April 1996 

Legal form: a limited liability company 

Ownership interest: Toyota Financial Services (UK) plc 100% 

Share capital: CZK 44,000,000 paid up 

Statutory body: Ing. Ale‰ Kamar˘t – statutory representative 

TOYOTA Financial Services Czech s.r.o. is a member of the Czech leasing and finance association. 

ESTABLISHMENT OF THE COMPANY AND ITS HISTORY 

TOYOTA Financial Services Czech s.r.o. was established in 2000 as the successor to the business of BB-Leasing s.r.o. 

(established in 1996) due to the acquisition of 100 % of the company’s share by the current owner – Toyota 

Financial Services (UK) plc from Great Britain. 

From 1996 to April 2000 

– BB-Leasing, s.r.o., universal leasing company. 

May 2000 

– Establishment of TOYOTA Financial Services Czech 

s.r.o. (“TFSCZ”) through takeover of 100% business 

share of BB-Leasing s.r.o., new owner – Toyota 

Financial Services (UK) plc from Great Britain. 

June 2000 

– First lease contract concluded under the heading of 

TFSCZ (product Toyota Leasing). 

March 2001 

– Cooperation agreement concluded between TFSCZ 

and the Toyota cars importer – Toyota Motor 

Czech, spol. s r.o. (“TMCZ”). 

March 2001 

– First meeting with all Toyota authorized dealers 

from the Czech Republic, official launching of 

Toyota Vario product on the market, introduction of 

the new calculation programme. 

April – June 2001 

– First joint campaign (“Spring campaign”) in 

cooperation with TMCZ, aimed at support of Yaris, 

Corolla and Avensis models sale, a first sales record 

was achieved during this campaign. 


September 2001 

– Work commenced on implementation and 

adjusting of the STEP_SQL system (master software 

serving for contracts administration and their 

accounting). 

October 2001 

– Cooperation started with TOYOTA MATERIAL 

HANDLING CZECH REPUBLIC a.s. (formerly 

Kromexim a.s., KromûfiíÏ) – importer of Toyota 

handling equipment in the Czech Republic, the 

leasing product Toyota Forklift Leasing launched on 

the market. 

March 2002 

– Presentation of the first credit-based product 

(Toyota Kredit) to the network of Toyota authorized 

dealers and its subsequent launch on the market. 

April 2002 

– Work commenced on the new scheme of dealers 

support. 

June 2002 

– Historic sales record achieved (on the basis of 

market share so far unbeaten). 

August 2002 

– Registered office of the company struck by floods, 

TFSCZ offices moved to spare premises provided by 

TMCZ. 

2002

2003 

2004 


Establishment of the Company and its History 

October 2002 

– Successful return to the registered office of the 

company. 

February 2003 

– The company was awarded the 2nd best result 

among the companies of the Toyota Financial 

Services Group in Europe and Africa. 

February 2003 

– Testing phase of the new scheme of dealers support 

with pilot partners launched. 

April 2003 

– First product based on operating lease (Toyota Rent) 

launched on the market. 

May 2003 

– The rest of Toyota’s authorized dealers included in 

the new dealer support scheme. 

August 2003 

– A totally new motivation competition for Toyota 

dealers announced. 


– STEP_SQL system put into full operation 

December 2003 

– On-line calculator for authorized dealers put into 

operation 

February 2004 - 

– Cooperation with TOYOTA MATERIAL HANDLING 

CZECH REPUBLIC a.s. (formerly Kromexim a.s., 

KromûfiíÏ) extended by the offer of the product on 

the operating lease basis (Toyota Forklift Rent). 

February 2004 

– TFSCZ hosted 6th TFS Marketing Conference, at the 

same time it was awarded a prize for 1st place (the 

highest market share) among companies in the 

Toyota Financial Services Group within Europe and 

Africa. 

May 2004 

– A change in the VAT Act and subsequent dramatic 

decline in the volume of newly concluded lease 

contracts. 

August 2004 

– Work commenced on the project of Toyota 

Financial Services Slovakia s.r.o. subsidiary 

establishment. 


– First product from the line Toyota Direct (insurance 

following the termination of the lease or credit 

contract). 

December 2004 

– Historic sales record in the number of contracts 

concluded in one month. 

January 2005 

– Project finalization and establishment of Toyota 

Financial Services Slovakia s.r.o. 

August 2005 

– variable loan (credit) Toyota Genio launched 

October 2005 

– completely revised (wholesale) dealer support offer 

launched 

February 2006 

– testing of the “return on customers” scheme started 

March 2006 

– new web sites with customer section launched 

(Project Phase I, internally labelled as ”front-end 

solution”) 

2005 


9

10 


Product and services 


At present the business activities of TOYOTA Financial Services Czech s.r.o. are performed on three basic product 

levels. 

The first one is the provision of financial services to end customers who have the intention to acquire (fund) Toyota 

and Lexus cars or forklift trucks Toyota. This area of services is termed “retail”. 

The second part of TFSCZ product portfolio, usually called “wholesale”, is designed to support Toyota’s authorised 

dealers network. 

Above both these basic product levels, which primarily serve asset acquisition, there is a third level, insurance. 

Insurance currently consist of property insurance relating to cars (and handling equipment). 

Retail 

The product portfolio that was modified at the turn of the business years 2004 and 2005, thanks to the advised 

changes in the VAT Act, is currently capable of satisfying a wide range of customer needs and expectations. 

It includes both lease and credit products split as follows: 

Toyota Leasing 

TOYOTA Financial Services Czech s.r.o. product pillar, 

offered since the beginning of its operation on the market 

in the Czech Republic, has been based on a finance lease 

with full amortization or on a finance lease with subsequent 

purchase of the leased asset. Either businessmen or nonbusinessmen 

may be the lessees. The actual conditions of 

the lease contract have been set up based on a combination 

of standard parameters as follows: 

• an extra instalment comprising 10% - 60% of the 

vehicle cost, 

• duration of the contract is 36, 42, 48 or 60 months, 

• fixed liability insurance (limit CZK 50 million/CZK 50 

million or CZK 70 million/CZK 70 million) for the entire 

term of the lease is part of the regular instalments, 

• car insurance, with coinsurance of 5% (CZK 5,000 at minimum) or 10% (CZK 10,000 at minimum), is fixed for 

the whole lease term and may be part of regular instalments, 

• it is possible to take insurance for any Toyota or Lexus brand model, 

• the contract is terminated by settling the repurchase price for the customer in the symbolic amount of CZK 

1,190 including VAT. 

Toyota Kredit 

Our product, offered since 2002 and based on the credit 

funding principle, is specified for customers who want to 

own the vehicle immediately but they do not want or 

may not use their own financial means for its purchase. 

Toyota Kredit is suitable not only for businessmen or nonbusinessmen, 

but also for contributory organisations of 

self-governing territories, cities (including the Capital of 

Prague), municipalities and regions. The contract set-up is 

very flexible: 

• the standard funded amount ranks between 40% - 

75% of the assets cost (i.e. the minimum amount of 

own financial means for covering the purchase is 25%), 

• duration of the credit contract is 12, 24, 36 or 48 

months, 

• fixed liability insurance (limit CZK 50 million/CZK 50 million or CZK 70 million/CZK 70 million) is part of regular 

instalments for the whole credit contract term, 





the whole credit contract term and may be part of regular instalments, 

• the product can normally be used for funding the Toyota and Lexus brand cars, 

• the contract is terminated by repayment of the total principal (credit); the credit contract may be extended, 

shortened or repaid earlier following agreement with our company. 

Toyota Vario 

The principle of the modified credit product, which has 

been offered by our company since 2001 (until 

30 April 2004 this product was offered on the basis 

of finance lease with partial amortization – net book 

amount), is the option of the increased last instalment 

(till 30 April 2004 – net book amount). This enables the 

debtor to achieve a very favourable amount of the regular 

monthly instalment. The product is meant particularly for 

non-businessmen. The following applies for the product 

Toyota Vario: 

• own financial means in the amount of 20% - 60% 

from the cost of the vehicle, 

• duration of the contract is 36 or 48 months, 


million or CZK 70 million/CZK 70 million) for the whole credit contract term is part of regular instalments, 


the whole credit contract term and it is part of regular instalments, 

• the last increased credit instalment can be opted in the range from 10% to 30%, or 25% from the total value of 

the vehicle, depending on the contract term and the model of vehicle being financed, 

• the contract can be concluded for models Yaris, Corolla, Avensis (except for Avensis Verso), RAV4, 

• at the end of the contractual period it is necessary to select one of the following alternatives: 

- payment of the last increased instalment, 

- continued funding of the last increased instalment (extension of the credit contract till final repayment), 

- vehicle buyback at market value (in the value of the last increased instalment at a minimum) by the dealer 

using the offer for a very favourable purchase of a new car, including no less favourable funding terms. 

Toyota Genio 

New product for end-customers based on the model of 

a loan/credit (consumer loan, commercial business loan 

for entrepreneurs, customer groups are the same as for 

Toyota Kredit), with the option of early repayment of the 

principal every 12 months, free of interest. For our 

customers this product is interesting since the advance 

payment required is lower (starting at 10% of own funds), 

loan instalments are incomparably lower (due to longer 

contract) and the amount of insurance premium included 

in the instalment is very reasonable. The customer is 

informed about the value determined for the purposes of 

the early repayment already in the loan contract itself. 

Specific features of Toyota Genio are as follows: 

• amount of own funds at 10% - 60% of the cost of 

acquisition of a vehicle, 

• contract duration (term): 72 months, 

• fixed compulsory motor vehicle liability insurance (with the limit of CZK 50 million/CZK 50 million) is included 

in regular instalments over the entire term of the loan contract, 

• motor hull casco insurance, with a deductible at 5% (at least CZK 5,000) or 10% (at least CZK 10,000) is fixed 

over the entire term of the loan contract and is included in regular instalments, 

• option of early repayment every 12 months of the contract duration 

• currently, the contract may be concluded for models of the Aygo, Yaris and Corolla series. 


11

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Toyota Rent 

A newcomer in the portfolio, since the business year 

2004, is aimed at mainly corporate clients. It concerns 

an operating lease, which is based on the partial 

amortization of the vehicle according to a specified 

travelling timetable (period of use and total mileage). 

The customers main benefit is undoubtedly this 

product’s a very favourable instalment policy positively 

influencing the financial expenses with only very little 

administration connected with the vehicle operation. 

The total rental is based on the following parameters: 

• funding of 100% of the vehicle cost, 

• duration of the contract is 12 – 48 months, 

• maximum number of km driven during the lease 

contract is 160,000 km, 


million) for the whole lease term is always part of regular instalments, 


the whole lease term and is always part of regular instalments, 

• the rental cost also includes the vehicle registration, payment of the road tax and the radio licence fee, 

• after the contract expires, the vehicle is returned to our company and, if the car wear and tear corresponds with 

the contractual conditions, no other additional costs are charged to the client. 

Toyota Direct 

Toyota Direct is a new specification of product line, which 

is focused on any user of Toyota and Lexus cars. 

In particular it is focused on those customers, who have 

properly terminated their credit or lease contracts with 

TOYOTA Financial Services Czech s.r.o. for a vehicle 

which they retain or on owners of Toyota and Lexus cars, 

who in the past have not performed a purchase through 

brand financial services or they are not even considering 

it. Due to the fact that Toyota Direct is based on customer 

expectations, we also anticipate a regular change and 

extension of this product, where at present it is possible 

to arrange the following: 

• comprehensive car insurance with the insurance 

company Allianz poji‰Èovna a.s., together with 

supplementary insurance (insurance of the 

windscreen, an alternate car, baggage insurance, accident insurance for passengers) – we guarantee the 

provision of best rates on the market, 

• motor third party insurance in cooperation with Allianz poji‰Èovna a.s. 




Toyota Forklift Leasing 

Complex financial support of the Toyota brand is also 

reflected in the sale of handling equipment and Toyota 

forklifts, whose exclusive distribution on the Czech 

market is performed by TOYOTA MATERIAL HANDLING 

âESKÁ REPUBLIKA a.s. (formerly Kromexim, a.s. KromûfiíÏ). 

In cooperation with the above distributor, it is 

possible to enter into a finance lease with full amortization 

and other standard parameters as follows: 

• extraordinary instalment in the amount of 10% - 60% 

from the vehicle’s cost, 

• payments term is 36 or 48 months, 

• net book amount 0% (possibly 10%) from the 

vehicle’s cost, 

• machinery insurance is fixed and is part of the 

instalments for the whole lease contract term, with 

maximum coinsurance of CZK 10,000, 

• third party insurance (limit CZK 50 million/CZK 50 

million) is part of regular instalments for the whole 

lease contract term, 

• the contract is terminated by settling the repurchase 

price for the customer in the symbolic amount of CZK 

1,190 including VAT. 

Toyota Forklift Rent 

Together with TOYOTA MATERIAL HANDLING âESKA 

REPUBLIKA a.s., the exclusive distributor of forklift trucks 

and handling equipment of Toyota brand, we have 

brought to our customers since February 2004 a unique 

product within which the operation and care for the 

vehicle is taken. Toyota Forklift Rent is an operating lease 

with full services. Terms and conditions of the lease 

contract, which is entered into with the distributor, are 

specified by a combination of the following parameters: 

• duration of the contract is 12 – 84 months, 

• financing of 100% of the vehicle cost, 

• fixed insurance for machinery, which is part of lease 

instalments for the whole lease term, with maximum 

coinsurance amounting to CZK 10,000, 

• third party insurance (limit CZK 50 million/CZK 50 

million) is fixed and is part of regular rent payments, 

• the rental cost includes the provision of normal 

services connected with operation of the vehicle and 

is proportional to the number of hours in operation, 

• above the framework of normal services it is possible 

to arrange for change of tyres and the fork of the 

vehicle. 


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The volumes of individual products (related to delivered contracts in the business year) is clear from Table 1. 

“Financed value” represents the amount of funds lent to customers. “Number of contracts” shows the number of 

units (financed objects) which were financed within the business year, i.e. products including the word “forklift” in 

their name represent forklift trucks, other products represent passenger and commercial cars. The column “Cost 

(without VAT)” represents the total value of individual objects at the time of their acquisition again split into 

individual products. 

Table 1 Contracts handed over in the financial year 2006 (CZK) 

Product Financed Share Nr.of Share Cost Share 

value contracts (without VAT) 

Toyota Leasing272,874,506.50 37.56% 795 41.21% 428,708,300.90 42.21% 

Toyota Equipment Leasing456,794.40 0.06% 1 0.05% 507,549.00 0.05% 

Toyota Kredit 142,137,719.55 19.57% 416 21.57% 235,506,196.00 23.19% 

Toyota Vario 10,851,008.80 1.49% 43 2.23% 17,133,481.00 1.69% 

Toyota Genio 73,976,426.85 10.18% 319 16.54% 107,053,608.00 10.54% 

Toyota Rent 72,265,873.90 9.95% 119 6.17% 72,265,873.90 7.11% 

Toyota Forklift Leasing11,871,813.40 1.63% 20 1.04% 12,557,517.60 1.24% 

Toyota Forklift Rent 141,992,342.70 19.55% 216 11.20% 141,992,342.70 13.98% 

Total 726,426 486.10 100.00% 1,929 100.00% 1,015,724,869.10 100.00% 

What does this table indicate? First of all, the continuing trend towards the growth of loan-based products. Such 

products accounted for 40% of the new business in the fiscal year 2006 (in terms of the number of contracts) and 

35% (in terms of the volume, the cost of acquisition). In year-on-year comparison, growth of almost 34% was 

recorded (number of contracts), or 10%, in terms of the volume (the cost of acquisition). If we take into account 

the launch of the Toyota Genio product (started to be offered since August/2005) and its limitations (some model 

series only), this trend is in a way fascinating and testifies to the fact that also the leasing companies market in the 

Czech Republic starts to follow the trend well-known in Western Europe for many years already. 

If we look back on the financial year 2006, we find several interesting facts: 

- The classic product within our offer - Toyota Leasing (finance leasing with full amortization), despite the 

increased number of loan-based products has retained its position, and even has slightly “increased” 

(comparison 2006/2005: 37.56%/33.71% by the financed amount (see Graph 2), or 42.21%/38.40% in terms 

of the cost of acquisition, but 41.21%/42.20% in terms of the number of contracts). This product is still used for 

the financing of rather more expensive cars (this is also due to the offer or some product limitations of our 

Company). 

- Toyota Kredit, our first ever loan (credit) product, recorded a drop in year-on-year terms. However, this drop 

was caused by switching of some customers to the new Toyota Genio product. 

- Toyota Genio is a clear premium quality product of the previous year – within 8 months only this product 

acquired more than 10% from our portfolio of the newly concluded contracts, both in terms of the financed 

value, and in terms of the cost of acquisition. 

- In terms of the number of the concluded contracts, its share accounted for 16.5% (see Graph 1) which confirms 

the previous description of the development of the Toyota Kredit product – the customers switched from one 

product to another. 

- Simple operational leasing, represented by Toyota Rent, acquired almost the same share as in the previous year 

and this status testifies to a certain stagnation of the product which results from its limited offer (without 

services). Changes may be prompted either by its more mass distribution (via the dealer network of Toyota and 

Lexus) or precisely by way of implementation of additional services geared towards full-service leasing (a longterm 

strategy of TOYOTA Financial Services Czech s.r.o.). 




- The performance of the Toyota Vario product is disappointing. Its ever decreasing share in the portfolio of our 

offer arises from the fact that this product series is misunderstood by our trade partners and it is necessary to 

focus on its ”renaissance” in the future. This product belongs, together with Toyota Rent and Toyota Genio, to 

our distinctive features and may give us sizeable competitive advantage in the future. 

- The statistics also include the Toyota Equipment Leasing series which represents our offer for organizations of 

the Toyota Group in the territory of the Czech Republic and is not actively offered. For this reason, its share is 

almost negligible. 

- The products intended for the financing of the handling technology showed a decline in year-on-year terms, 

however, our market share has not dropped. The financial services provided to customers of TOYOTA 

MATERIAL HANDLING CZECH REPUBLIC, a.s. continue to be the stabilizing element of our contract portfolio. 

Graph 1 – Product share by the number of contracts Graph 2 – Product share by the financed value 

Toyota Forklift 

Leasing 

1% 


6% 


17% 


Rent 


22% 

11% 


Rent 


20% 

37% 


2% 


41% 

Toyota Equipment 

0% 


Leasing 

2% 


10% 


10% 


20% 

Toyota Equipment 

0% 


1% 

In aggregate, we have recorded the year-on-year increase in trade, in terms of the financed value, by 

CZK 83 million (less than 13%), by 178 contracts only (by 10%) and in terms of the cost of acquisition, exclusive of 

VAT, we have increased our turnover by just under CZK 108 million (almost 12%). This implies that the trade result 

development was not as dramatic as it might seem. The detailed analysis, as noted above, shows certain switching 

of customers between individual products and it is influenced by the circumstances given below. 

In spite of the linear growth of trade in general (i.e. not in leaps and bounds, as in previous years) we were relatively 

successful in the development of our market share. As is clear from Table 2, our Company has increased its market 

share in the territory of the Czech Republic, in comparison with the previous year that was affected by stagnation 

due to the development of the tax legislation and a change in the dealer network of Toyota and Lexus. 

An increase in the market share was, on the other hand, adversely affected by a drop in the sales of Toyota and 

Lexus cars in the territory of the Czech Republic and thus despite an undoubtedly positive result in the achieved 

penetration (the share of the financed cars in the number of the sold cars), the overall development of the number 

of the financed cars in the year-on-year terms was not so marked. 

Table 2 The company’s share in the market of sold newToyota and Lexus cars 

Parameter/financial year 2000 2002 2003 2004 2005 2006 

Sales of cars in the CR (number) 77,907 184,339 161,449 171,116 158,308 166,278 

Sales of Toyota and Lexus brands (num.) 2,010 4,617 3,747 4,418 4,749 4,717 

Toyota’s share in the Czech market (num.) 2.58% 2.50% 2.32% 2.58% 3.00% 2.84% 

Number of cars financed by TFSCZ (num.) 221 1,079 1,166 1,455 1,336 1,571 

Achieved penetration of TFSCZ 11.00% 23.37% 31.12% 32.93% 28.13% 33.31% 

The penetration we have achieved on one hand shows more than the 50% market share (if we know that 60% out 

of 100% of the cars are financed in some way) but it also testifies to the fact that this is a limit that can be hardly 

exceeded in the long-term without special sales campaigns, only by further refining the existing retail products or 

by a completely new approach to services. 


15

16 



Graph 3 – Development of the number of the financed cars (newly contracted business transactions) and achieved penetration 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

As at 31 March 2006 our Company administered 5,090 active contracts, out of this number, operational and 

finance lease contracts accounted for 72% and loan contracts accounted for 28%. The total year-on-year increase 

of contracts was 11.72%, while the most marked increase was recorded again within the operational leasing of 

Toyota Forklift Rent (increase by almost 69%) and loan contracts for Toyota Vario (+ 39.58%) and Toyota Kredit 

(+34.28%). 

The classic product Toyota Leasing showed a drop due to the lower increase of contracts, in proportion to regular 

expiration of contracts on this basis. This product ranked among the most successful ones in the Company’s 

history and an increase on such a scale that would compensate for a drop caused by regular (proper) repayment of 

loan contracts, as in previous years, cannot be expected anymore. The launch of loan products is very vigorous. For 

more details see Table 3. 


0 

Table 3 – Number of active contracts per product 

2000 2002 2003 2004 

2005 2006 

Number of contracts Penetration 

35,00% 

30,00% 

25,00% 

20,00% 

15,00% 

10,00% 

Products / as at 31.3.2004 31.3.2005 31.3.2006 Year-to-year 

change 

Toyota Leasing2,849 2,820 2,651 (5.99%) 

Toyota Vario (leasing) 486 381 237 (37.80%) 

Toyota Kredit 322 738 991 34.28% 

Toyota Vario (loan) 0 96 134 39.58% 

Toyota Genio 0 0 313 --- 

Toyota Forklift Leasing46 39 50 28.21% 

Toyota Forklift Rent 19 313 528 68.69% 

Toyota Rent 60 140 155 10.71% 

Toyota Equipment Leasing0 1 2 100.00% 

Other (Non Toyota Leasing, Kredit a Rent)* 16 27 29 7.41% 

Taken over portfolio of BB-Leasing s.r.o. 13 9 0 (100.00%) 

Total 3,811 4,564 5,090 11.52% 

*) This includes cases of financing of other cars than Toyota or Lexus, in the form of either Toyota Leasing or Toyota Kredit 

5,00% 

0,00%



The total net book amounts of tangible fixed assets financed under finance and operational lease contracts (after 

depreciation) amounted as at 31 March 2006 to more than CZK 1 billion (increase by almost 9%, in comparison 

with the previous year). 

The total balance of financed values as at the same date amounts to CZK 761 million (increase by less than 19%). 

The balance of receivables from the provided consumer loans (principal and outstanding interest) amounted to 

CZK 325 million (increase by 36%). The total financed volume then amounted to almost CZK 1.1 billion and thus 

increased in year-on-year terms by 23% - see Table 4. 

Table 4 Volumes of financing (values denominated in CZK) 

Volumes of balances / as at 31.3.2004 31.3.2005 31.3.2006 Year-to-year 

change 

Net book amounts of leased assets 862,051,107 929,172,481 1,012,454,676 8.96% 

Balances of financed values 499,414,946 641,649,896 760,879,220 18.58% 

Balance of receivables - credit principals 118,166,691 234,877,106 318,816,000 35.74% 

Total financed volume * 619,790,000 881,094,582 1,086,530,540 23.32% 

*) The total financed volume as a sum of the balances of financed values (leasing) and receivables (loans) 


17

18 


Wholesale 

Our Company, already since 2000, when it started its operations in the Czech market, has been supporting the sale 

of Toyota and Lexus brands also by way of the provision of financial assistance to authorized brand dealers for 

the purpose of acquiring stock inventories of new and used cars, demonstration cars and the provision of specialpurpose 

financial loans. 

In February 2003, we offered to car dealers in response to their needs, a new support scheme that opened up wider 

possibilities and put in place for our Company also more effective securing and monitoring of the support product 

portfolio. 

The scheme was subsequently modified in October 2005 when new securing arrangements were incorporated, 

the limits were restructured and the scheme for the financing of demonstration cars was radically changed. 

The products we offer were given specific names in order to allow easier communication: Toyota New SF – 

financing of stocks of new cars, Toyota Used SF – financing of stocks of used cars, Toyota Demo – financing of 

stocks of demonstration cars, Toyota Financing I/C – financing in the form of investment loans (credits), Toyota 

Financing W/C – financing of the working capital. In addition, we offer financing under finance lease or operational 

lease contracts, where the parameters of these products are very similar to retail products (Toyota Leasing and 

Toyota Rent), only some details are different. 

The dealer support scheme also includes the plan of participation in advertising activities of individual dealers 

and the commission scheme. For all of the above products, product limits are set that differ according to the 

solvency of individual partners, their requirements and other parameters affecting them. 

The dealers’ interest in financial support provided by our Company is growing year-on-year terms. Whereas in the 

financial year 2000 we provided funding amounting to CZK 22.5 million, in the financial year 2002 this amount 

was already CZK 366 million (an increase of 1,526%!). This trend continued and thus in financial year 2004 we 

have provided the incredible sum of CZK 1,002.5 million in funding (increase by 84.8%). Although it might seem 

that the growth trend in the financial year 2005 stopped and stabilized at the level of CZK 1,095 million (increase 

by 9%), this trend needs to be interpreted in the context of consolidation of the dealer network, when for 11 dealer 

centres that lost at the beginning of May 2004 their authorization for the sale of the Toyota brand, the financing 

was immediately suspended. 

By the modification of the scheme in October 2005, the value of the provided funds amounted to 

CZK 1.37 billion which is an increase of 25%, in comparison with the previous year. 

Graph 4 – The development of the value of the provided funds within the dealer support scheme 

1,400 million 

1,200 million 

1,000 million 

800 million 

600 million 

400 million 

200 million 

The above figures were very markedly influenced in particular by the financing of the Toyota New SF product 

(financing of stocks of new cars) thanks to which we have also indirectly speeded up the delivery of vehicles for end 

customers between the stocks (warehouses) of the distributor of Toyota cars in the Czech Republic - the company 

Toyota Motor Czech spol. s r.o. and individual dealers. 

Also the financing of demonstration cars (Toyota Demo) gained in importance. We endeavour to meet 100% of 

the dealers' demands for demonstration cars. 


0 2000 2002 2003 2004 2005 2006 

Fiscal year


Strategy for the Financial year 2007 

As noted above, as part of the fulfilment of our long-term objectives and related strategies, our efforts will be 

again focused on the continuing improvement of the quality of our services provided to our existing customers 

(authorized dealers of Toyota and Lexus brands and end customers using the services of our Company for the 

acquisition or lease of Toyota and Lexus cars). 

We will focus also on the improvement of individual processes within the Company itself. 

Our strategy for the fiscal year 2007 consists of the following parts: 

1. Implementation of the retail contract evaluation system (rating, score card): 

a) system setting and implementation (STEP_SQL), 

b) membership of the NRKI Register. 

Objective: make the approval schemes more flexible, better risk management (transparent creation of 

provisions), preparation for the front-end solution (Phase II). 

2. Modification of the Toyota Vario product series, or adjustment of the Toyota Rent product 

(through the pilot product series) 

Objective: increase the availability of Toyota cars for customers by way of the reduction of monthly 

payments (instalments), Trade Cycle Management – controlled replacement of cars. 

3. Revision (review) of the retail documentation 

Objective: update retail documentation to be in compliance with the legislation and regulations in force, 

review the effectiveness of the documentation within the currently set work-flow, 

implementation of the approach based on the new Corporate Identity Design. 

4. Facilitation of the exchange of information between the Company, authorized dealers and 

end customers – front-end solution (Phase II). 

Objective: increase comfort in obtaining, and availability, of information from TFSCZ. 


19

20 


Report of independent auditors 

and financial statements 


REPORT OF INDEPENDENT AUDITORS 

TO THE SHAREHOLDER OF TOYOTA FINANCIAL SERVICES CZECH S.R.O. 

PricewaterhouseCoopers Audit, s.r.o. 

Katefiinská 40 

120 00 Praha 2 

âeská republika 

Telefon +420 251 151 111 

Fax +420 251 156 111 

We have audited the accompanying balance sheet of TOYOTA Financial Services 

Czech s.r.o. (“the Company”) as at 31 March 2006, the related income statement, statement of 

changes in shareholder’s equity, cash flow statement and notes for the year then ended presented 

in the annual report of the Company on pages 24 - 48 (“the financial statements”). The financial 

statements, which include description of the activities 

of the Company, and underlying accounting records are the responsibility of the Company’s 

Director. Our responsibility is to express an opinion on these financial statements based on our 

audit. 

We conducted our audit in accordance with the Act on Auditors, International Standards 

on Auditing and related application guidance of the Chamber of Auditors of the Czech Republic. 

Those auditing standards require that we plan and perform the audit to obtain reasonable assurance 

as to whether the financial statements are free of material misstatement. An audit includes 

examining, on a test basis, evidence supporting 

the amounts and disclosures in the financial statements. An audit also includes assessing 

the accounting principles used and significant estimates made by management, as well 

as evaluating the overall financial statements presentation. We believe that our audit provides a 

reasonable basis for our opinion. 

In our opinion, the accompanying financial statements give a true and fair view, in all material 

respects, of the assets, liabilities and equity of the Company as at 31 March 2006, and the results 

of its operations and its cash flows for year then ended in accordance 

with the Act on Accounting and other relevant legislation of the Czech Republic. 

We have examined whether the supplementary financial information included in the annual report 

of the Company on pages 6 - 19, which does not form part of the financial statements for the year 

ended 31 March 2006, is consistent with the audited financial statements of the Company. In 

our opinion, all other supplementary information included in the annual report is consistent with 

the audited financial statements in all material respects. 

In addition we have also reviewed the accompanying report on relations between 

the Company and its controlling party TOYOTA Financial Services (UK) PLC and between the 

Company and the other parties controlled by TOYOTA Financial Services (UK) PLC 

on pages 49 and 50 (“the Report”). The completeness and accuracy of the Report 

is the responsibility of the Director. 

PricewaterhouseCoopers Audit, s.r.o., se sídlem Katefiinská 40/466, 120 00 Praha 2, IâO: 40765521, zapsaná v obchodním rejstfiíku 

vedeném Mûstsk˘m soudem v Praze, oddíl C, vloÏka 3637, a v seznamu auditorsk˘ch spoleãností Komory auditorÛ âeské republiky pod 

osvûdãením ã. 021.


Report of independent auditors 

and financial statements 

REPORT OF INDEPENDENT AUDITORS 

TO THE SHAREHOLDER OF TOYOTA FINANCIAL SERVICES CZECH S.R.O. 

Our responsibility is to review the accuracy of information included in the Report. 

We conducted our review in accordance with the auditing standards of the Chamber of Auditors 

of the Czech Republic related to reviews of reports on relations between related parties. These 

standards require that we plan and perform the review to obtain moderate assurance as to whether 

the Report is free of material misstatement. Based on our review, nothing has come to our 

attention that causes us to believe that the accompanying Report has not been properly prepared, 

in all material respects. 

25 October 2006 

PricewaterhouseCoopers Audit, s.r.o. 

represented by 

Paul Inman Martin Manãík 

Director Auditor, Licence No. 1964 


21


Financial statements

24 


Balance sheet 

As at 31 March 2006 

ASSETS 


31 March 31 March 

Note 2006 2005 

Gross amount Provision Net amount Net amount 

CZK’000 CZK’000 CZK’000 CZK’000 

B. Fixed assets 1,832,243 (814,679) 1,017,564 933,733 

B. I. Intangible fixed assets 3 2,896 (2,805) 91 658 

B. II. Tangible fixed assets 4 1,829,347 (811,874) 1,017,473 933,075 

C. Current assets 580,801 (6,430) 574,371 394,104 

C. II. Long-term receivables 5 247,828 (363) 247,465 171,746 

C. III. Short-term receivables 5 300,349 (6,067) 294,282 217,200 

C. IV. Financial assets 19 32,624 - 32,624 5,158 

D. I. Accruals and deferrals 1,418 0 1,418 1,782 

TOTAL ASSETS 2,414,462 (821,109) 1,593,353 1,329,619 

LIABILITIES AND EQUITY 

A. Equity 6 88,877 63,271 

A. I. Share capital 44,000 44,000 

A. II. Capital contributions 98,985 98,985 

A. III. Reserve funds 2,160 865 

A. IV. Retained earnings (81,874) (106,491) 

A. V. Profit for the current period 

25,606 25,912 

B. Liabilities 1,307,083 1,164,409 

B. I. Provisions 7 25,384 20,275 

B. II. Long-term liabilities 8 308,469 216,787 

B. III. Short-term liabilities 8 118,060 361,659 

B. IV. Bank loans & overdrafts 9 855,170 565,688 

C. I. Accruals and deferrals 12 197,393 101,939 

TOTAL LIABILITIES AND EQUITY 1,593,353 1,329,619


Income statement for the year ended 31 March 2006 

INCOME STATEMENT 

Year ended 31 March 

2006 2005 

Note CZK’000 CZK’000 

I. Sales of goods 13 1,885 924 

A. Cost of goods sold 1,885 924 

+ Gross profit 0 0 

II. Sales of production 13 676,437 620,996 

B. Cost of sales 37,428 38,487 

+ Added value 639,009 582,509 

C. Staff costs 14 14,085 13,499 

D. Taxes and charges 600 425 

E. Depreciation of long-term assets 3, 4 518,703 476,880 

III. Sale of long-term assets 13 55,193 35,722 

F. Net book amount of long-term assets sold 51,867 34,471 

G. Change in provisions for operating liabilities and charges 4, 5, 7 (2,238) 7,925 

IV. Other operating income 13 25,507 28,704 

H. Other operating charges 82,846 75,421 

* Operating result 53,846 38,314 

IX. Gain on revaluation of derivatives 10, 13, 2(n) 6,497 2,154 

L. Loss on revaluation of derivatives 10 736 6,061 

X. Interest income 13 5,176 4,382 

N. Interest expense 33,163 27,243 

XI. Other financial income 13 6,304 6,610 

O. Other financial expense 2,743 2,253 

* Financial result (18,665) (22,411) 

Q. Tax on profit or loss on ordinary activities - deferred 11 9,575 (13,858) 

** Profit or loss on ordinary activities after taxation 25,606 29,761 

R. Extraordinary charges 10, 2(n) - 3,849 

* Loss on extraordinary items - (3,849) 

*** Net profit for the financial period 25,606 25,912 

*** Net profit before taxation 35,181 12,054 


25

26 


Statement of changes in shareholders’ equity 

year ended 31 March 2006 

STATEMENT OF CHANGES Share Share Statutory Revaluation Retained 

IN SHAREHOLDERS’ EQUITY Note capital premium reserve reserve earnings Total 

fund 

CZK’000 CZK’000 CZK’000 CZK’000 CZK’000 CZK’000 

At 1 April 2004 44,000 98,985 - (3,849) (105,626) 33,510 

Net profit for the current 

period 

Fair value losses – 

6 - - - - 25,912 25,912 

financial derivatives 10, 2(n) - - - 3,849 - 3,849 

Contribution to reserve 

fund 


6 - - 865 - (865) - 

At 31 March 2005 44,000 98,985 865 - (80,579) 63,271 

Net profit for the current 

period 

- - - - 25,606 25,606 

Contribution to reserve fund 6 - - 1,295 - (1,295) - 

At 31 March 2006 44,000 98,985 2,160 - (56,268) 88,877


Cash flow statement 


Cash flows from operating activities 


CZK’000 CZK’000 

NET PROFIT ON ORDINARY ACTIVITIES BEFORE TAX 35,181 12,054 

A.1 Adjustments for non-cash movements: 

A.1.1 Depreciation of fixed assets 518,703 476,880 

A.1.2 Change in provisions (2,238) 7,925 

A.1.3 Profit from disposal of fixed assets (3,316) (1,243) 

A.1.5 Net interest expense (income) 27,987 22,862 

A.* Net cash flow from ordinary activities before tax, changes in 

working capital and extraordinary items 576,317 518,478 

A.2 Working capital changes: 

A.2.1 Increase in receivables and prepayments (162,012) (157,683) 

A.2.2 Increase/(decrease) in short-term payables and accruals (148,145) 67,551 

A.** Net cash flow from ordinary activities before tax and 

extraordinary items 266,160 428,346 

A.3 Interest paid (33,163) (27,243) 

A.4 Interest received 5,176 4,382 

A *** Net cash flow from ordinary activities 238,173 405,485 


27

28 


Cash flow statement 


CASH FLOW STATEMENT (continued) 

Cash flows from investing activities 



CZK’000 CZK’000 

B.1 Acquisition of fixed assets (647,054) (572,505) 

B.2 Proceeds from sale of fixed assets 55,183 35,713 

B*** Net cash flow from investing activities (591,871) (536,792) 

Cash flows from financing activities 

C.1 Change in long and short-term liabilities 381,164 136,348 

C*** Net cash flow from financing activity 381,164 136,348 

Net increase in cash and cash equivalents 27,466 5,041 

Cash and cash equivalents at the beginning of the year 5,158 ,117 

Cash and cash equivalents at the end of the year 32,624 5,158


Notes to financial statements 


1 GENERAL INFORMATION 

TOYOTA Financial Services Czech s.r.o. (“the Company”) was incorporated on 30 April 1996. The Company 

has its registered office in the building Rubín Office Center, Sokolovská 192/79, 186 00 Praha 8 – Karlín. 

The Company’s business activities are: 

- Leasing; 

- Purchase of goods for sale and resale; 

- Lease of manufactured goods; 

- Advisory activities in the area of business and services; 

- Intermediation activities in the area of business and services; 

- Provision of loans. 

The sole partner of the Company is: 

Toyota Financial Services (UK) plc 

Yew Tree Bottom Road, Great Burgh, Burgh Heath 

Epsom, Surrey KT18 5UZ 

United Kingdom of Great Britain and Northern Ireland 

Contribution in the total amount of CZK 44,000,000 (100% of the share capital) was fully paid up. 

Ing. Ale‰ Kamar˘t is the Company’s statutory representative. 

The business year of the Company always begins on 1 April and ends on 31 March of the following 

calendar year. Therefore the financial statements as at 31 March 2006 include a period of twelve 

months, i.e. from 1 April 2005 to 31 March 2006 („2005/06“). 


29

30 




2 ACCOUNTING POLICIES 

(a) Basis of preparation 

The financial statements have been prepared in accordance with Generally Accepted Accounting Principles 

in the Czech Republic and Czech Accounting Standards. The financial statements have been prepared 

under the historical cost convention. 

Derivatives are shown at fair value. 

The amounts disclosed in the financial statements including notes are rounded to thousands of Czech 

Crowns (CZK’000) unless stated otherwise. 

(b) Intangible fixed assets 

Purchased intangible assets are recorded at cost. 

The annual depreciation rates used are as follows: 

Intangible fixed assets with a unit cost less than CZK 60,000 are expensed upon acquisition. 

A provision for impairment is established when the carrying value of an asset is greater than its estimated 

recoverable amount. 

(c) Tangible fixed assets 

Acquired tangible fixed assets are recorded at cost, which includes costs incurred in bringing the assets to 

their present location and condition. 

Tangible fixed assets are depreciated applying the straight-line method over the their estimated useful lives. 

The Company reviewed in 2005/06 the useful lives of assets used for its own needs and since this year the 

following annual depreciation rates apply: 

These rates were applied also to assets that were acquired in previous years and recorded in the fixed asset 

register as at 1 April 2005. 


In the first year of In the subsequent For increased initial 

depreciation years cost 

Software 14.2% 28.6% 25% 



Furniture and fittings 11% 22.25% 20% 

Machinery and equipment 20% 40% 33.3% 

Passenger vehicles 14.2% 28.6% 25%




2 ACCOUNTING POLICIES (continued) 

(c) Tangible fixed assets (continued) 

In 2004/05 the following annual depreciation rates applied: 



Furniture and fittings 8.5% 18.3% 16.7% 

Passenger vehicles, 

machynery and equipment 

Repairs and maintenance expenditures relating to tangible assets are expensed as incurred. Property 

enhancements (i.e. extending the life or improving the productivity of the asset) exceeding CZK 40,000 per 

item per year are capitalised. 

Tangible fixed assets with a unit cost less than CZK 40,000 are treated as inventory and are expensed upon 

consumption. 

Tangible fixed assets leased under the finance lease contracts acquired after 31 March 2005, are 

depreciated on a daily basis by the accounting entity, starting from the day when the conditions for 

depreciation were met, i.e. the assets were recorded in the fixed asset register of the accounting entity and 

the leased asset was handed over to the lessee in compliance with the finance lease contract with 

subsequent purchase of the leased asset or in a condition fit for the agreed or customary use. 

The accounting unit depreciates fixed assets leased under finance leases, acquired up to 

31 March 2005, on a monthly basis, starting with the month following the month in which the conditions 

for depreciation were met. 

Accounting depreciation of tangible fixed assets leased under operational lease contracts is determined on 

a straight-line basis on a monthly basis according to the duration of the operational lease contract. The 

depreciation commences in a month when the conditions for depreciation were met, i.e. the assets were 

recorded in the fixed asset register of the accounting entity and the leased asset was handed over to the 

lessee in compliance with the finance lease contract with subsequent purchase of the leased asset or in 

a condition fit for the agreed or customary use. 

A provision for impairment is established when the carrying value of an asset is greater than its estimated 

recoverable amount. 

(d) Receivables 

14.2% 28.6% 25.0% 

Receivables are stated at the nominal value less a provision for doubtful amounts. Irrecoverable receivables 

are generally written-off upon completion of bankruptcy or administration or legal proceedings against the 

customer. A provision for bad debts and its amount is created on the basis of maturity analysis, the 

customers_ solvency, recovery of debts and the results of legal enforcement. 


31

32 





(e) Foreign currency translation 

The accounting unit translates foreign currency to Czech crowns using a fixed annual exchange rate set on 

the basis of exchange rate announced by the Czech National Bank on the first working day of the 

accounting period. 

All monetary assets and liabilities denominated in foreign currencies have been translated at the period-end 

exchange rate as published by the Czech National Bank. All foreign exchange gains and losses from 

translation of receivables and payables are recognized in the profit and loss account. 

(f) Derivative financial instruments 

Derivative financial instruments, including interest rate swaps, are initially recognised on the balance 

sheet at cost a subsequently are re-measured at their fair value. The Company acquires these derivatives 

for the purpose of covering its interest rate risk. Because these derivatives do not qualify for hedge 

accounting they are classified as trading derivatives. Fair values are obtained from quoted market prices 

and from discounted cash-flow models. 

All derivatives are presented in other receivables or in other payables when their fair value is positive or 

negative, respectively. Changes in the fair value of derivatives are recognised as financial expense or 

financial income. 

(g) Revenue recognition 

Sales are recognised upon the performance of services and are stated including discounts and net of the 

Value Added Tax. Lease income from the finance and operating leases is recognised evenly over the life of 

the relevant lease contracts. Income interest on consumer loans is recorded on an accrual basis. 

(h) Consumer credits 

Receivables from consumer credits are stated at the nominal value less a provision for doubtful amounts. 

(i) Provisions 

Provisions are recognised when the Company has a present obligation, it is probable that an outflow of 

resources will be required to settle the obligation, and a reliable estimate of the amount can be made. 

(j) Pension plan 

The Company does not operate any pension plan. Regular contributions are made to the state to fund 

the national pension plan. 

(k) Interest costs 

Interest costs on borrowings to finance the acquisition of tangible and intangible fixed assets are 

capitalised during the period of completion and preparation of the asset for its intended use. Other 

borrowing costs are expensed. 






(l) Deferred tax 

Deferred tax is recognised on all temporary differences between the carrying amount of an asset or 

liability in balance sheet and its tax base. Deferred tax assets are recognised if it is probable that sufficient 

future taxable profit will be available against which the assets can be utilised. 

(m) Related parties 

The Company’s related parties are considered to be the following: 

- Group companies; 

- Sole partner, of which the Company is a subsidiary or an associate, directly or indirectly, and subsidiaries 

and associates of the partner; 

- Members of the Company’s statutory and supervisory bodies and management and parties close to such 

members, including the subsidiaries and associates of the members and their close parties; 

- Companies with the same member of management. 

Material transactions and outstanding balances with related parties are disclosed in Note 15. 

(n) Changes in accounting policies 

In relation to the amendment to the Act on Accounting the Company effective 1 April 2004 recognises 

changes in fair values of trading derivatives as financial expense or financial income. 

Till 31 March 2004 changes in fair values of these derivatives were recognised in equity. The impact of this 

change in the amount of CZK 3,849,000 was recognised as an accounting policy change in the 

extraordinary profit/(loss) in the accounting period 2004/05. 

Since 2005/06, in connection with the amendment to the Act on Income Taxes, new depreciation rates for 

tangible fixed assets used by the Company apply retroactively. The applied depreciation rates are described 

in Note 2(c). 

In 2005/06 the Company changed the manner of depreciation of tangible fixed assets leased under the 

finance lease contracts in order to ensure, to the maximum possible extent, true and fair view of costs and 

revenues associated with these lease relations. Tangible fixed assets acquired after 31 March 2005 with the 

aim of their lease under the finance lease contracts are depreciated by the Company with accuracy to days, 

starting from the day when the conditions for depreciation were met, i.e. the assets were recorded in the 

fixed asset register of the accounting entity and the leased asset was handed over to the lessee in 

compliance with the finance lease contract with subsequent purchase of the leased asset or in a condition fit 

for the agreed or customary use. 

The Company continues to depreciate tangible fixed assets acquired before 31 March 2005 with accuracy 

of whole months, starting from the month following the which the conditions for depreciation were met. 

(o) Subsequent events 

The effects of events, which occurred between the balance sheet date and the date of preparation of the 

financial statements, are recognised in the financial statements in the case that these events provide further 

evidence of conditions that existed at the balance sheet date. 

Where significant events occur subsequent to the balance sheet date but prior to the preparation of the 

financial statements, which are indicative of conditions that arose subsequent to the balance sheet date, the 

effects of these events are disclosed, but are not themselves recognised in the financial statements. 


33

34 




3 INTANGIBLE FIXED ASSETS 

Cost 


1 April 2005 Additions 31 March 2006 

CZK’000 CZK’000 CZK’000 

Software 2,647 228 2,875 

Other intangible fixed assets ,21 - ,21 

Total 2,668 228 2,896 

Accumulated amortisation 


CZK’000 CZK’000 CZK’000 

Software 1,989 795 2,784 


Total 2,010 795 2,805 

Net book amount ,658 ,91 

Cost 


CZK’000 CZK’000 CZK’000 

Software 2,575 72 2,647 


Total 2,596 72 2,668 

Accumulated amortisation 


CZK’000 CZK’000 CZK’000 

Software 1,394 595 1,989 


Total 1,415 595 2,010 

Net book amount 1,181 658




4 TANGIBLE FIXED ASSETS 

Cost 

1 April 2005 Additions Disposals 31 April 2006 

CZK’000 CZK’000 CZK’000 CZK’000 

Machinery and equipment 2,832 195 - 3,027 

Passenger cars 3,425 4,595 3,425 4,595 

Furniture and fittings 2,300 - 11 2,289 

Finance lease - cars 1,411,804 429,216 473,792 1,367,228 

Finance lease - machinery 37,741 12,738 18,075 32,404 

Operating lease - cars 73,374 72,255 43,270 102,359 

Operating lease - machinery 173,406 144,156 117 317,445 

Advances paid for fixed assets - 301 301 - 

Total 1,704,882 663,456 538,991 1,829,347 

Accumulated depreciation 

1 April 2005 Additions Disposals 31 April 2006 

CZK’000 CZK’000 CZK’000 CZK’000 

Machinery and equipment 1,801 726 - 2,527 

Passenger cars 1,471 2,607 3,425 653 

Furniture and fittings 1,233 443 11 1,665 

Finance lease - cars 715,824 472,045 473,791 714,078 



Operating lease - machinery 15,469 40,199 117 55,551 

Provisions for assets 150 49 150 49 

Total 771,807 578,906 538,839 811,874 

Net book amount 933,075 1,017,473 

Additions to accumulated depreciation also include the net book amount (value) of the sold (disposed) assets of CZK 

51,867,000 (2004: CZK 34,471,000) from terminated lease contracts. 


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4 TANGIBLE FIXED ASSETS (continued) 

Cost 


1 April 2004 Additions/ Disposals 31 April 2005 

CZK’000 transfers CZK’000 CZK’000 CZK’000 

Machinery and equipment 2,602 1,283 1,053 2,832 

Passenger cars 3,425 - - 3,425 

Furniture and fittings 2,190 110 - 2,300 

Finance lease - cars 1,451,752 355,723 395,671 1,411,804 



Operating lease - machinery 10,238 163,168 - 173,406 

Advances paid for fixed assets 3,394 1,813 5,207 - 

Total 1,552,452 585,852 433,422 1,704,882 

Accumulated depreciation 

1 April 2004 Additions/ Disposals 31 April 2005 

CZK’000 transfers CZK’000 CZK’000 CZK’000 

Machinery and equipment 1,258 1,596 1,053 1,801 

Passenger cars 491 980 - 1,471 

Furniture and fittings 866 367 - 1,233 

Finance lease - cars 650,154 461,341 395,671 715,824 



Operating lease - machinery 204 15,265 - 15,469 

Provisions for assets 767 150 767 150 

Total 682,172 518,617 428,982 771,807 

Net book amount 870,280 933,075 

The Company acquired in the financial year 2005/06 low value intangible fixed assets which were expensed as incurred 

in the amount of CZK 67,000 (2004/05: CZK 55,000) and low value tangible fixed assets expensed in the same 

way in the amount of CZK 311,000 (2004/05: CZK 86,000).




5 RECEIVABLES 

31 March 2006 31. March 2005 

CZK’000 CZK’000 

Trade receivables - current 135,276 111,218 

- overdue 7,138 6,242 

142,414 117,460 

Other receivables - current 157,631 108,701 

- overdue - 1,612 

157,631 110,313 

Short-term advances provided 304 672 

300,349 228,445 

Provisions for short-term doubtful receivables (6,067) (11,245) 

Net short-term receivables 294,282 217,200 

Long-term trade receivables 196,684 136,439 

Other long-term receivables 46,861 23,882 

Deferred tax asset (see note 11) 4,283 13,858 

247,828 174,179 

Provisions for long-term doubtful receivables (363) (2,433) 

Net long-term receivables 247,465 171,746 

Net total receivables 541,747 388,946 

Trade receivables include mainly receivables from customer credit contracts. For these contracts the 

Company enters into the agreement on securing an obligation by the transfer of ownership title. At 31 

March 2006 these receivables amounted to: CZK 318,816,000 (at 31 March 2005: CZK 234,877,000). 


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5 RECEIVABLES (continued) 

Other short and long-term receivables include receivables from funding the dealers network. 

For securing receivables from contracts on investment loan provided to Toyota dealers the Company uses 

the right of lien over the property owned by them. At 31 March 2006 these receivables amounted to: CZK 

49,900,000 (at 31 March 2005: CZK 23,121,000). 

Provisions 

The change in the provision for doubtful receivables may be analysed as follows: 

In 2005/06 the Company wrote-off any irrevocable receivables in the amount of CZK 1,502,000 

(2004/2005: CZK 0) and released provisions in the amount of CZK 1,446,000. 

6 EQUITY 

The statutory reserve fund may not be distributed to the shareholder, but may be used to offset losses. In 

2005/06 the Company, in compliance with the relevant provisions of the Commercial Code, transferred 5% 

of its annual net profits generated in 2004/05 to the statutory reserve fund, in amount of CZK 1,295,000. 

The Company generated net profits for the first time in 2003/04 and established the statutory reserve fund 

at 10% of these profits in 2004/05. 

The net profit of CZK 25,912,000 for 2004/05 was approved and allocated by the General Meeting of the 

Shareholder on 30 September 2005. 


31 March 2006 31 March 2005 

CZK’000 CZK’000 

Opening balance 13,678 10,329 

Charge for the year 1,884 6,476 

Released during the year (9,132) (3,127) 

Closing balance 6,430 13,678




7 PROVISIONS 

The Company creates provisions for expected losses or expenses relating to uncollectibility of receivables 

from the current portfolio. The Company further creates provisions for payables, which it knows will be due 

in the following business year. 

Provisions for the Other 

new portfolio value provisions Total 

CZK’000 CZK’000 CZK’000 

Opening balance as at 1 April 2004 12,818 2,263 15,081 

Charge for the year 6,286 1,866 8,152 

Used in the year (696) (2,262) (2,958) 

Closing balance at 31 March 2005 18,408 1,867 20,275 

Charge for the year 4,629 2,464 7,093 

Used in the year (117) (1,867) (1,984) 

Closing balance at 31 March 2006 22,920 2,464 25,384 


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8 PAYABLES 

Advances received are recognised as revenue on a straight-line basis over the lease term along with related 

lease instalments in accordance with the individual payment calendar. 

Trade and other payables have not been secured over any assets of the Company. Total overdue payables 

as at 31 March 2006 amounted to: CZK 4,208,000 (at 31 March 2005: CZK 7,098,000). 

TOYOTA Motor Finance (Netherlands) B.V. provided to the Company a long-term loan (credit) of CZK 300 

million, with its two CZK 150 million tranches falling due on 12 August 2007 and 12 August 2008, 

respectively. A portion of the CZK 150 million payable on 12 August 2005 has been refinanced. Interest on 

the loan is based on variable interest rates. 



CZK’000 CZK’000 

Short-term trade payables 44,953 67,443 

Short-term advances received 56,047 123,019 

Short-term portion of long-term loan (see Note 15) - 150,000 

Negative fair value of derivatives (see note 10) 1,995 7,756 

102,995 348,218 

Other short-term payables 15,065 13,441 

Total short-term payables 118,060 361,659 

Long-term advances received 8,469 66,787 

Long-term loan (see note 15) 300,000 150,000 

Total long-term liabilities 308,469 216,787 

Total short- and long-term liabilities 426,529 578,446




9 BANK LOANS 


CZK’000 CZK’000 

Loans due within 1 year 750,000 510,000 

Long-term loans – a portion payable within 1 year 13,374 7,782 

Long-term loans due between 1 – 5 years 77,171 35,024 

Long-term loans due after 5 years 14,625 12,882 

Total bank loans and overdrafts 855,170 565,688 

Total short-term bank loans 763,374 517,782 

Total bank loans 91,796 47,906 

Short-term loans were provided by domestic banks and a letter of support was issued by the parent 

company Toyota Financial Services (UK) plc. 

HSBC Bank provided a long-term loan of EUR 1,923,000, which is due by 30 June 2011 in regular monthly 

payments in accordance with a payment calendar. The loan bears fixed interest of 4.65% p.a. for the whole 

repayment term. In 2005/06 HSBC Bank provided to the Company a long-term loan (credit) of EUR 

2,115,000 which is payable in regular monthly instalments in accordance with the repayment schedule to 

30 March 2012 in two tranches amounting to EUR 1,050,000 and EUR 1,065,000. In the course of the 

drawdown of the funding, the interest charged on the loan is variable. After the complete drawdown of the 

funding, the interest on the loan is fixed over the entire duration (term) of the loan contract, namely for the 

first tranche at 4.00% p.a and for the second tranche at 3.95% p.a. 

The Company entered into agreements on interest rate swaps (Note 10) in order to fix the interest expense 

on loans bearing a variable interest rate. 

10 DERIVATIVE FINANCIAL INSTRUMENTS 

The Company recognises finance derivatives as trading derivatives. 

The fair value of derivatives is presented in “Other receivables”, if positive or in “Other payables”, if 

negative. The derivatives can be analysed as follows: 

Trading agreements Fixed Fair Notional 

(interest rate swap) interest rate value amount 

% CZK’000 CZK’000 

At 31 March 2006 2.38 – 3.98 (1,995) 840,000 

At 31 March 2005 2.59 – 3.98 (7,756) 700,000 

The year-to-year change in a fair value of the above derivatives amounting to CZK 5,761,000 was 

recognized as a loss from revaluation of derivatives of CZK 736,000 and as a gain from revaluation of 

derivatives of CZK 6,497,000 (In the year 2004/05 the year-to-year change in a fair value of the above 

derivatives amounting to CZK 3,907,000 was recognized as a loss from revaluation of derivatives of CZK 

6,061,000 and as a gain from revaluation of derivatives of CZK 2,154,000). 


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11 TAXATION 

The income tax expense is comprised of the following: 


2005 / 06 2004 / 05 

CZK’000 CZK’000 

Change in the deferred tax asset 9,575 (13,858) 

Current tax can be analysed as follows: 

Net profit before taxation 35,181 12,054 

Adjustments for tax purposes: 

Non taxable income (276) (9,196) 

Non-tax deductible costs 137 24,229 

Diference between tax and accounting depreciation of fixed assets (21,276) (2,312) 

Net taxable profit 13,766 24,775 

Inclusion of tax losses carried forward (13,766) (24,775) 

Accumulated losses at the period-end 11,930 27,667 

Corporate taxation at 24% (2004/05: 26%) - - 

As at 31 March 2006 the Company recorded accumulated tax losses in the amount of CZK 11,930,000, which 

will be barred by the statute of limitation as follows: 

Year of establishment Year of statutory bar Tax loss 

CZK’000 

2001 2008/09 3,630 

2002 2009/10 8,300 

Total 11,930 

The year of statutory bar was analysed in accordance with legislation in effect at 31 March 2006.




11 TAXATION (continued) 

The deferred tax asset is calculated at 24% (the tax rate enacted for period of expected realisation of 

deferred tax) from the net taxable profit and can be analysed as follows: 

Deferred tax asset: 

12 ACCRUALS AND DEFERRALS 


CZK’000 CZK’000 

Difference between accounting and tax depreciation rate (4,381) 357 

Other provisions 5,867 6,915 

Other temporary differences (66) (54) 

Tax losses carried forward 2,863 6,640 

Net deferred tax asset (see Note 5) 4,283 13,858 

The decrease of the deferred tax asset by CZK 9,575,000 was as at 31 March 2006 credited to receivables. 

The deferred tax asset was recognised for the first time as at 31 March 2005 in the amount of CZK 

13,858,000 and debited to receivables. 


CZK’000 CZK’000 

Accrued expenses 2,146 1,919 

Accrued revenues on related party grants (subsidies) 

(see Note 15) 

7,041 519 

Accrued revenues from other subsidies 235 157 

Accrued extraordinary lease instalments 187,971 99,344 

Total accruals and deferrals 197,393 101,939 

In connection with legislative adjustments in the Value Added Tax after 1 May 2004 and the relating change 

in contractual conditions the down payments settled by lessees at the commencement of the lease contract 

are considered to be extraordinary payments and are recognised on the accrued basis. 

Down payments in contracts concluded prior to this date were recognised in advances received (note 8). 


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13 REVENUE ANALYSIS 

Revenue from ordinary activities has been generated as follows: 

Other revenues are recognised in the profit and loss account mainly in other operating income and other 

financial income. They also include income from re-measurement of interest rate swaps in the amount of 

CZK 6,497,000 (in 2004/05: CZK 2,154,000) (see Note 10). 

All revenues have been derived only from domestic activities. 

14 EMPLOYEE ANALYSIS 

The Company’s management comprises the statutory representative (in the employment relation as 

a Company director) and employees at managerial positions directly reporting to him. 

In the year 2005/06 company cars were made available for use by the senior staff members with the total 

cost of CZK 4,595,000 (in 2004/05: CZK 2,478,000). 


2005 / 06 2004 / 05 

CZK’000 CZK’000 

Sales of services provided (finance lease) 566,298 558,645 

Sales of services provided (operating lease) 79,006 41,053 

Interest received from customer credits provided to clients 30,816 21,233 

Interest received from loans provided to dealers 5,442 4,340 

Proceeds from sale of fixed assets 55,183 35,713 

Other revenues 40,597 39,487 

Total revenues from ordinary activities 777,342 700,471 

Employee numbers 31 March 2006 31 March 2005 

Average number of members of management 4 4 

Average number of staff 12 12 

Total 16 16




14 EMPLOYEE ANALYSIS (continued) 

In the business year 2005/06 no remuneration was paid to the Company’s statutory representative acting as 

the statutory body. 

No loans have been provided to senior staff members. 

31 March 2006 

Management Other Total 

CZK’000 CZK’000 CZK’000 

Wages and salaries 4,988 4,043 9,031 

Board emoluments 586 489 1,075 

Social security costs 1,951 1,584 3,535 

Other social costs 170 274 444 

Total staff costs 7,695 6,390 14,085 

31 March 2005 

Wages and salaries 4,731 4,010 8,741 

Board emoluments 687 328 1,015 

Social security costs 1,896 1,528 3,424 

Other social costs 73 246 319 

Total staff costs 7,387 6,112 13,499 


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15 RELATED PARTY TRANSACTIONS 

The Company was involved in the following related party transactions: 


CZK’000 CZK’000 

Short-term trade receivables 

Toyota Motor Czech 240 301 

Toyota Financial Services Slovakia - 326 

Short-term trade payables 

240 627 

Toyota Financial Services Slovakia 

Estimated payables 

0 2 

Toyota Kreditbank GmbH 69 86 


Other liabilities 

874 557 

Toyota Motor Finance (Netherlands) B.V. (Note 8) 

Accrued expenses from subventions 

300,000 300,000 

Toyota Motor Czech (Note 12) 

Accrued expenses 

7,041 519 

Toyota Motor Finance (Netherlands) B.V. 873 924 

Income from subventions 

308,857 302,088 

Toyota Motor Czech 

Other operating income 

2,785 1,609 

Toyota Kreditbank GmbH - 224 

Toyota Financial Services (UK) plc 507 755 

Toyota Financial Services Slovakia 15 3,310 

Purchase of services 

3,307 5,898 

Toyota Kreditbank GmbH 557 211 

Toyota Financial Services (UK) plc 3,537 1,114 

Toyota Leasing (Thailand) - 13 

Toyota Financial Services Corporation 20 - 

Toyota Motor Czech 60 - 

Toyota Financial Services Slovakia 86 2 

Interest expense 

4,260 1,340 

Toyota Motor Finance (Netherlands) B.V. 6,593 7,677 

10,853 9,017 





15 RELATED PARTY TRANSACTIONS (continued) 

All these transactions have been performed on an arm’s length basis. 

The loans received bear interest at market interest rates. Trade receivables and payables from these 

transactions arose under the same terms and conditions as with unrelated parties. Receivables from related 

parties have not been provided for. 

Besides the above stated remuneration and benefits, there was no other consideration provided to the 

Company’s partners, members of the Company’s boards and management in 2005/06 and 2004/05. 

16 COMMITMENTS 

The Company had no significant capital commitments as at 31 March 2006. 

17 CONTINGENT LIABILITIES 

ABN AMRO bank N.V. provided the Company with a bank guarantee of CZK 485,000 for the office space 

rent payment. 

The management of the Company is not aware of any other significant unrecorded contingent liabilities as 

at 31 March 2006. 

18 SUBSEQUENT EVENTS 

No events have occurred subsequent to year-end that would have a material impact on the financial 

statements as at 31 March 2006. 


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19 CASH FLOW STATEMENT 

The Company has prepared a cash flow statement following the indirect method. Cash equivalents 

represent short-term liquid investments, which are readily convertible for a known amount of cash. Cash 

and cash equivalents disclosed in the cash flow statement can be analysed as follows: 

Statutory approvals 

These financial statements have been approved for submission to the sole partner of the Company by the 

Company’s statutory representative. 

Prague, 30 June 2006 


Statutory Representative 



CZK’000 CZK’000 

Cash on hand and in transit 166 140 

Cash in banks 32,458 5,018 

Cash and cash equivalents 32,624 5,158


Report on relations among related parties 

Report 

on relations among related parties 

pursuant to the provisions of Section 66a) of Act No. 513/1991 Coll., the Commercial Code, 

as amended (hereinafter “CC”) 

of the statutory representative of 


1. Controlled Entity TOYOTA Financial Services Czech s.r.o. 

Rubín Office Center 

Sokolovská 192/79, 186 00 Praha 8 - Karlín 

ID No.: 65413261 

Kept by the Registration Court in Prague, Section C, Inset 44764 

(hereinafter the “Company”) 

2. Relevant Period 

This report describes relations among related parties pursuant to Section 66a of Act No. 513/1991 for the last accounting 

period, i.e. for the period from 1 April 2004 to 31 March 2005. 

(hereinafter the “Relevant Period”) 

3. Structure of the Group 

Controlling entity: Toyota Financial Services (UK) plc 

Great Burgh, Burgh Heath, Epsom, Surrey KT18 5UZ 


Toyota Financial Services (UK) plc is controlled by Toyota Financial Services Corporation, which is directly controlled 

by Toyota Motor Corporation. 

Related parties, with whom TOYOTA Financial Services Czech s.r.o. has contractual relations: 

Toyota Financial Services Corporation 

Mitsui Sumitomo Bank Nagoya Bld. 10 F 18-19 

Nishiki 2-Chome, Naka-ku, Nagoya 

Japonsko 




Toyota Kreditbank GmbH 

Toyota-Allee 5, Köln-Marsdorf 

Federal Republic of Germany 

Toyota Kreditbank GmbH International Division 



Toyota Motor Finance (Netherlands) B.V. 

DeBoelelaan 7, 1083HJ, Amsterdam 

The Netherlands 

Toyota Financial Services Slovakia s.r.o. 

Gagarinova 7/B, 821 03 Bratislava 

Slovak Republic 

Toyota Motor Czech spol. s. r.o. 

·afránkova 1238, 150 00 Praha 5 

Czech Republic 


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Report on relations among related parties 

4. Relations among Related Parties 

Contracts concluded in the Relevant Period: 

In the Relevant Period the Company entered into a credit contract with Toyota Motor Finance (Netherlands) B.V. 

under general business conditions. No loss was incurred by the Company due to this contract. 

5. Conclusion 

The Company’s statutory representative states that he has made efforts of a prudent manager to ascertain the 

group of related parties for the purposes hereof, particularly through inquiring of the controlling entity in relation 

to the group of entities that are controlled by it. 

The Company’s statutory representative declares that the payments or consideration provided on the basis of the 

above-described relations among the related parties were provided on an arm’s length basis. 

Prague, 30 June 2006 


Statutory Representative 



Note 


51


Rubín Office Center 

Sokolovská 192/79 

186 00 Praha 8-Karlín 

Czech Republic 

Tel.: +420 296 579 500, 296 579 506-7 

Fax: +420 296 579 524 

toyotafinance@toyotafinance.cz 

www.toyotafinance.cz

2006 Annual Report - Toyota Financial Services

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