Some examples of End of Year Adjustments. There's a possibility...

Some examples
of End of Year Adjustments. There's a possibility the treatment for the "impairment of loans" occured as such an adjustment. The adjustments coming about,as a proceedure to close off, in the period leading up to audit.

Re: the following notes, in summary, from the Annual Report.

4. Segment information
Business segment
The Group is organised internationally into the VentrAssist product segment.

VentrAssist segment
The VentrAssist LVAD segment has designed and developed a left ventricular assist device (LVAD) and related technologies. Offices have been established in the United States and in The Netherlands (for the European region), with executive appointments made to lead strategic clinical, marketing, sales and distribution in all of the segment’s major markets.

The segment utilises specialist medical companies in Australia and internationally to assist in the production
of VentrAssist pumps for the clinical trials. Final testing and assembly of the VentrAssist is carried out in
Australia.

26. Related parties
Directors and key management personnel
Disclosures relating to Directors and key management personnel are set out in Directors’ Report and note 21.

Subsidiaries
Ventracor Limited is the ultimate parent entity in the wholly-owned group comprising the Company and its
wholly-owned controlled entities. Ownership interests in these controlled entities are set out in note 27. Aggregate amounts included in the determination of loss from ordinary activities before income tax that resulted from transactions with entities in the wholly-owned Group are disclosed in note 5. Transactions between Ventracor Limited and other entities in the wholly-owned Group are reflected in amounts receivable from wholly-owned controlled entities (refer notes 10 and 13).

Transactions between Ventracor Limited and other entities in the wholly-owned group during the year ended 30 June 2008 are summarised below and consisted of:

(a) Loans advanced by Ventracor Limited
(b) The payment of interest on the above loans
(c) The sale of inventory to subsidiary companies;
(d) Management and administration charges

The following transactions occurred with related parties:

Parent entity________________________2008________2007

____________________________________$’000_______$’000
Loans to subsidiaries
Balance at the beginning of
the year____________________________23,665_______7,210
Loans advanced_______________________6,005_______8,952
Loan repayments receive_____________(1,216)_________0
Interest charged_____________________5,050_______1,760
R&D recharge from subsidiary________(2,783)_________0
Share based payments expense___________153__________0
Management and administration charges_1,352________865
Sales of goods_______________________13,037______6,443
Impairment of loans_________________(41,352_________0
Revaluation of foreign
currency loans_______________________(3,911____(1,565)
__________________________________________________________

Balance at the end
of the year___________________________0_________23,000
___________________________________________________________



27. Subsidiaries
VentrAssist Pty. Ltd Australia
Micromedical Industries Pty. Ltd Australia
Ventracor (UK) Ltd UK
Ventracor BV The Netherlands
Ventracor Inc USA
Micromedical Systems Inc USA
Ventracor GmbH Germany

Note: All controlled entities are 100% controlled by Ventracor Limited. All share capital consists of ordinary
shares. During the year Ventracor GmbH was incorporated as a 100% owned subsidiary of Ventracor (UK)Ltd.

28. Events occurring after the balance sheet date
No matter or circumstance has arisen since 30 June 2008 that has significantly affected or may
affect:

• the Consolidated Entity’s operations in future years, or
• the results of the operations in future financial years, or
• the Consolidated Entity’s state of affairs in future financial years.


2. Financial risk management (continued)
(c) Liquidity risk
Prudent liquidity risk management involves maintaining sufficient cash to fund the Group’s activities. The
Directors regularly monitor the company’s cash position and on an on-going basis consider a number of
strategic and operational plans and initiatives to ensure that adequate funding continues to be available to
meet the Group’s business objectives.

3. Critical accounting estimates and assumptions
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. There are estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(a) Carrying value of related party receivables
The carrying value of the parent entity’s loans to its wholly owned subsidiaries are held at fair value and
subsequently measured at amortised cost. The parent entity has considered the carrying value of the receivables at 30 June 2008. The assessment of carrying values and potential impairment involves judgments and assumptions relating to a number of factors including among other factors the Group’s
regulatory approval progress and the near term business outlook of the Group’s key markets. As a result of this review, a provision for impairment has been made for the balances at 30 June 2008.
On the basis of the impairment considerations and subject to the judgments and assumptions used, management of the parent entity consider the carrying value of these receivables to be appropriately stated at the balance date.

(b) Inventories
The Group reviews the carrying amounts of inventories half yearly and if there is any indication of impairment, the value is written down to net realisable value.