Annual Report 2012 - Inwido

FINANCIAL STATEMENTS
exceeds this value is immediately taken up as income. The
portion that does not exceed the fair value of the acquired
identifiable non-monetary assets is systematically taken up
as income over a period that is calculated as the remaining
weighted average useful life for the acquired identifiable
assets that are amortized. In the consolidated accounts,
bargain purchases are reported directly in profit/loss.
Untaxed reserves
Untaxed reserves including deferred tax liability are recognized
in the Parent Company. In the consolidated accounts
however, untaxed reserves are divided into deferred tax
and shareholders’ equity.
Group contributions
Group contributions received by the Parent Company from
its subsidiaries are reported in the Parent Company according
to the same principles as normal dividends from subsidiaries,
in other words, as a financial income item in the
income statement. Group contributions paid by the Parent
Company to its subsidiaries are recognized as an appropriation
in the income statement.
Note 2 Financial risks and policies
Through its operations, the group is exposed
to various kinds of financial risks
Financial risks are those involving fluctuations in the Group’s
earnings and cash flow as a consequence of changes in exchange
rates, interest rate levels, and refinancing and credit
risks. The Group’s financial policy for the management of
financial risks has been designed by the Board of Directors
and provides a framework of guidelines and regulations in
the shape of risk mandates and limits for financing activities.
To read more about the Company’s financial risks, please see
the Financial Risks section in the Directors’ Report.
Responsibility for the Group’s financial transactions and
risks is managed centrally by the Parent Company’s finance
department. The overarching objective for risk management efforts
is to provide cost effective financing and to minimize the
negative effects of market fluctuations on the Group’s earnings.
Liquidity risks
Liquidity risk (or financing risk) refers to the risk that it will
not be possible to secure financing or that it will only be possible
to do so at considerably increased expense. Consequently,
it is the Group’s objective that there always be sufficient
cash and equivalents, as well as guaranteed lines of credit to
cover the next six months. Furthermore loan maturities have
been spread out over time to limit the liquidity risk.
To ensure that the Group always has access to external
financing, the finance department shall make sure that
commitments to grant credit, both short and long-term,
are available. Efforts shall be made to maintain the highest
level of cost efficiency possible within the set framework.
At the end of the year, the Group’s financial liabilities
amounted to SEK 1,922.0 million with the maturity structure
indicated in the table below.
Maturity structure, financial liabilities – undiscounted cash flows
2012 2011
Nominal
amount,
functional 0-6 6-12 1-5 5 years 0-6 6-12 1-5 5 years
SEKm currency months months years or later Total months months years or later Total
Bank loans 1,108.6 61.8 70.1 1,038.7 11.3 1,181.9 143.0 150.1 1,345.3 16.6 1,655.0
Overdraft facilities 122.2 1.8 1.8 125.8 129.5 4.1 4.1 103.9 112.1
Derivatives 9.9 2.1 1.7 6.1 9.9 0.3 0.3 9.9 10.5
Synthetic instrument 11.4 11.4 11.4 27.9 27.9
Trade and other payables 348.6 348.2 0.4 348.6 404.0 404.0
Liabilities to Group companies 168.6 168.6 168.6 304.2 304.2
Financial lease liabilities 21.6 4.1 3.7 16.4 0.2 24.4 6.2 6.2 20.7 33.2
Other current liabilities 131.0 131.0 131.0 224.9 224.9
Total accounts receivable 418.0 208.7 1,355.6 23.0 2,005.3 557.6 385.6 1,784.0 44.5 2,771.8
Interest rate risks
Interest rate risk refers to the risk that the value of a financial
instrument may fluctuate due to changes in market rates.
The Group’s interest rate risk consists of that entailed by its
borrowing. Management of the Group’s interest exposure
is centralized, meaning that the central finance function
is responsible for identifying and managing this exposure.
Derivative instruments, such as interest swap contracts, are
used to manage the credit risk.
The Group is mainly exposed through its interest-bearing
financial assets, which are indicated in the table in Note 20.
The total exposure for the credit risk corresponds to the value of
the receivables in the balance sheet. At 31 December 2012, the
fair value of these swaps amounted to a negative SEK 9.6 million
(neg 10.5) consisting of liabilities of SEK 9.6 million (10.5).
As per 31 December 2012, interest-bearing liabilities, excluding
financial leasing amounted to SEK 1,231 million (1,648).
The average period of fixed interest, excluding derivatives was
approximately one month (one). The average period of fixed interest,
including derivatives was approximately six months (six).
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Inwido AB | Annual Report 2012