Annual report 2011 - Trelleborg

90
NOTES – GROUP
Note 28
Financial risk management
For a description of the Group’s financial risks and policies regarding financial risks, see the “Financial risk”
section on pages 31-33.
Financial credit risk exposure
The Treasury Policy contains a special counterparty regulation specifying the maximum credit risk exposure to
various counterparties. A follow-up in relation to credit limits is conducted on an ongoing basis.
Counterparties have been subdivided into three categories: A, B and C. Category A contains counterparties
and their fully guaranteed subsidiaries that hold Issuer Ratings from two of the following three rating institutes
with a minimum of the following ratings or better: Moody´s (Aa3/stab/P-1), Standard & Poor´s (AA-/ stab/A-1),
Fitch (AA-/stab/F1). Loans from the Trelleborg Group to institutions in category A may not exceed SEK 1,000 M
or equivalent, including the value of unrealized gains in derivative instruments. Category B comprises
counterparties and their fully guaranteed subsidiaries that cannot be included in category A and that hold an
Issuer Rating from two of the following three rating institutes with a minimum of the following rating or better:
Moody´s (A3/stab/P-1), Standard & Poor´s (A-/stab/A-1), Fitch (A-/stab/F1). Counterparties in category B
may borrow a maximum of SEK 500 M or equivalent, including the value of unrealized gains in derivative
instruments, from the Trelleborg Group. Category C encompasses counterparties outside categories A and B
that the Group requires to fulfill its operational needs. Exposure to counterparties in category C may not
exceed SEK 50 M per counterparty.
The table below presents the Group’s credit risk exposure for interest-bearing receivables, cash and cash
equivalents and derivative instruments at December 31, 2011 subdivided by category:
Category Interest-bearing
receivables
Cash and cash
equivalents
Derivative
instruments –
unrealized
gains, gross
sek m 2011 2010 2011 2010 2011 2010 2011 2010
A – – 98 217 15 68 113 285
B 30 2 417 207 115 113 562 322
C 84 – 238 408 – – 322 408
Total 114 2 753 832 130 181 997 1,015
Exposure in categories A and B was in line with the Treasury Policy. The total credit exposure in category C at
year-end 2011 was divided among more than 40 counterparties. All credit exposures in category C amounted
to less than SEK 50 M with one exception: SEK 55 M relating to the accumulated balance of the main account
in the Chinese cash pool.
Credit risk exposure associated with derivative instruments is determined as the fair value on the closing
date. On December 31, 2011, the total counterparty risk associated with derivative instruments (calculated
as net receivable per counterparty) was SEK 38 M (84), taking into account ISDA agreements. In addition to
the amounts presented in the table above, the Group also has interest-bearing loan receivables of SEK 231 M
(123) due from third parties.
None of these fully valuable financial assets were renegotiated in the past year, nor have they matured or
been impaired. With the exception of what was described above, no credit limits were exceeded in 2011 or
2010 and the management does not anticipate any losses due to non-payment by these counterparties.
Liquidity analysis for financial instruments
The table below shows the Group’s financial liabilities and the net settlement of derivative instruments
comprising financial liabilities, subdivided into the periods remaining on the closing date until the agreed
date of maturity. The amounts stated in the table comprise contractual, undiscounted cash flows.
At December 31, 2011
sek m
Less than
1 year
Between 1
and 5 years
More than
5 years
Total
Borrowing, incl. interest –2,289 –6,114 –3 – 8,406
Interest-rate swaps with negative
fair value
–67 –103 – –170
Accounts payable –3,353 – – –3,353
Total –5,709 –6,217 –3 –11,929
Accounts receivable 4,390 – – 4,390
Net flow –1,319 –6 ,217 –3 –7,539
At December 31, 2010
sek m
Less than
1 year
Between 1
and 5 years
More than
5 years
Total
Borrowing, incl. interest –3,249 –4,564 –4 –7,817
Interest-rate swaps with negative
fair value
–93 –53 – –146
Accounts payable –3,154 – – –3,154
Total –6,496 –4,617 –4 –11,117
Accounts receivable
Interest-rate swaps with positive
4,102 – – 4,102
fair value – 13 – 13
Net flow –2,394 –4,604 –4 –7,002
Annual Report 2011 Trelleborg AB
Total
The table below shows the Group’s financial derivative instruments that will be settled gross, subdivided into
the periods remaining on the closing date until the agreed date of maturity. The amounts stated in the table
comprise contractual, undiscounted cash flows.
At December 31, 2011
sek m
Note 29
Financial instruments by category and measurement level
A description of each category and the calculation of fair value are presented
in the section “Accounting policies.”
At December 31, 2011 Assets at fair value
in profit and loss
Loan Carrying Measurement
receivable
and
accounts
amount
level
sek m
receivable
Derivatives used for
hedging purposes
Carrying Measure-
amount ment level
Assets in the balance sheet
Derivative instruments – 69 2 59 2 128
Financial non-current assets 190 32 2 – 222
Accounts receivable 4,390 – – 4,390
Interest-bearing receivables 41 82 – 123
Cash and cash equivalents 753 – 2 – 753
Total 5,374 183 59 5,616
sek m
Other
financial
liabilities
Less than
1 year
Between 1
and 5 years
Liabilities at fair value
in profit and loss
Carrying Measurement
amount
level
More than
5 years
Foreign-exchange contracts
–outflow –14,901 – – –14,901
–inflow 14,888 – – 14,888
Basis swap contracts
–outflow –459 –271 – –730
–inflow 509 325 – 834
Total 37 54 0 91
At December 31, 2010
sek m
Less than
1 year
Between 1
and 5 years
More than
5 years
Foreign-exchange contracts
–outflow –26,052 – – –26,052
–inflow 26,082 – – 26,082
Basis swap contracts
–outflow –8 –731 – –739
–inflow 15 762 – 777
Total 37 31 0 68
Derivatives used for
hedging purposes
Carrying Measure-
amount ment level
Liabilities in the balance sheet
Derivative instruments – 84 2 202 2 286
Interest-bearing non-current
liabilities
5,452 – – 5,452
Interest-bearing current liabilities 2,171 – – 2,171
Accounts payable 3,353 – – 3,353
Total 10,976 84 202 11,262
The measurement of all financial assets and liabilities at fair value on the closing date was based on
observable data (Level 2 in accordance with the fair-value hierarchy).
Total
Total
Total
Total