16. OTHER RECEIVABLES

Other receivables may be broken down as follows:

(in thousands of euro)
  
12/31/2011 12/31/2010
 
TOTAL NON-CURRENT CURRENT TOTAL NON-CURRENT CURRENT
Financial receivables 303,271 250,734 52,537 236,023 222,757 13,266
Trade and other
accrued income and
prepaid expenses
12,575 333 12,242 11,002 338 10,664
Receivables from
employees
10,257 2,096 8,161 8,799 2,091 6,708
Receivables from
social security and
welfare institutions
2,575 - 2,575 7,061 - 7,061
Receivables from tax
authorities not related
to income taxes
129,868 8,527 121,341 88,653 8,929 79,724
Other receivables 171,135 86,180 84,955 139,147 81,416 57,731
 
629,681 347,870 281,811 490,685 315,531 175,154
Provision for bad debts (74) - (74) (172) - (172)
 
629,607 347,870 281,737 490,513 315,531 174,982

 

For current and non-current other receivables, the carrying amount is considered approximate to the fair value.

Non-current financial receivables (euro 250,734 thousand) refer primarily:

  • renewal until July 2017 of the loan to Prelios S.p.A. (formerly Pirelli RE) for euro 160 million, euro 10 million more than the euro 150 million previously lent, and envisages full repayment on maturity. The loan is subject to a variable rate (6-month Euribor + 7%). The loan renewal was executed in accordance with the covenants assumed in 2010 by Pirelli & C. S.p.A. in favour of the financing banks of Pirelli RE (now Prelios S.p.A.) in order to obtain the necessary authorisation from those banks to spin off Pirelli RE from the Pirelli Group. This transaction was unanimously approved by the Board of Directors, after receiving the unanimous favourable opinion of the Committee for Related Party Transactions, all of whose members are independent directors. The loan has to be classified as a related party transaction due to the relationship existing between Pirelli and Prelios through Camfin which has “significant influence” over Prelios;
  • to euro 81,332 thousand deposited to guarantee tax and legal disputes in relation to the subsidiary Pirelli Pneus Ltda (Brazil), remunerated at market rates.

The receivables from tax authorities not related to income taxes refer mainly to receivables for VAT and similar taxes.

Non-current other receivables (euro 86,180 thousand) refer mainly to amounts deposited as security in lawsuits and tax litigation involving the Brazilian unit Pirelli Pneus Ltda (euro 73,493 thousand) and to a receivable of euro 7,600 thousand relating to a cash grant paid in connection with the execution of an equity partnership agreement.

The current other receivables (euro 84,955 thousand) mainly consist of advances of euro 50,399 thousand for the purchase of machinery and a receivable from shareholders for euro 5,013 thousand (China).