Annual report 2011 - Trelleborg

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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
At December 31, 2010 Assets at fair value in profit and loss Loan Carrying Measurement receivable and accounts amount level sek m receivable Note 30 Non-interest-bearing liabilities Other non-current liabilities sek m 2011 2010 Other non-interest-bearing liabilities 60 27 Derivative instruments (Note 23) 103 53 Total 163 80 Other current liabilities sek m 2011 2010 Advance payment from customers 185 245 Accounts payable 3,353 3,154 Bills payable 8 11 Other non-interest-bearing liabilities 444 407 Derivative instruments (Note 23) 83 140 Accrued expenses and prepaid income (Note 33) 1,402 1,476 Total 5,475 5,433 Total non-interest-bearing liabilities 5,638 5,513 Liabilities are recognized at amounts that correspond to fair value. Derivatives used for hedging purposes Carrying Measure- amount ment level Assets in the balance sheet Derivative instruments – 63 2 120 2 183 Financial non-current assets 116 20 2 – 136 Accounts receivable 4,102 – – 4,102 Interest-bearing receivables 7 – – 7 Cash and cash equivalents 731 101 2 – 832 Total 4,956 184 120 5,260 sek m Other financial liabilities Liabilities at fair value in profit and loss Carrying Measurement amount level Derivatives used for hedging purposes Carrying Measure- amount ment level Liabilities in the balance sheet Derivative instruments – 105 2 164 2 269 Interest-bearing non-current liabilities 4,343 – – 4,343 Interest-bearing current liabilities 3,162 – – 3,162 Accounts payable 3,154 – – 3,154 Total 10,659 105 164 10,928 Total Total Note 31 Pension provisions and similar items NOTES – GROUP Specification of costs sek m Cost of defined-benefit plans 2011 2010 Costs for services during current year 39 34 Interest on the obligation 62 75 Anticipated return on plan assets –32 –34 Actuarial gains and losses recognized for the year 9 7 Curtailment and settlement losses –12 –12 Total cost of defined-benefit plans 66 70 Cost of defined-contribution plans 165 142 Total pension costs 231 212 Of which discontinued operations – 10 Actual return on plan assets amounted to a negative SEK 3 M (pos: 57). Change in pension liability in balance sheet Defined-benefit plans sek m 2011 2010 Opening balance 544 744 Net expenses recognized in profit and loss 66 70 Benefit payments –80 –136 Increase attributable to acquisitions 7 0 Decrease attributable to divestments – –55 Other changes –1 –6 Translation difference –2 –73 Closing balance 534 544 of which, unfunded pension obligations 474 500 of which, funded pension obligations 60 44 Specification of pension liability in the balance sheet sek m Defined-benefit plans 2011 2010 Present value of funded obligations 1,546 1,395 Fair value of plan assets –750 –697 796 698 Unrecognized actuarial gains 51 40 Unrecognized actuarial losses –314 –195 Other changes 1 1 Total defined-benefit plans 534 544 Defined-contribution plans 20 19 Net pension liability 554 563 of which, recognized as plan assets 29 29 Closing balance, pension liability 583 592 Important actuarial assumptions on the closing date, % France Germany Sweden Italy Japan Norway Discount rate at December 31 Anticipated return on pension plan 4.40% 4.80% 3.50% 4.40% 1.75% 3.00% assets at December 31 4.00% 3.00% 4.00% - - 4.50% Inflation 2.00% 2.00% 2.00% 2.00% 0.00% 2.00% Future annual wage increases 1.0-3.5% 2.50% 3.00% 2.67% 2.00% 4.00% Defined-benefit plans The Group has several defined-benefit plans, whereby employees are entitled to post-employment benefits based on their final salary and length of service. The largest plans are in France, Germany, Sweden, Italy, Japan and Norway. Pension insurance with Alecta Retirement pension and family pension obligations for salaried employees in Sweden are secured through pension insurance with Alecta. According to a statement issued by the Emerging Issues Task Force of the Swedish Financial Accounting Standards Council (URA 42), this constitutes a multi-employer plan. For the 2011 fiscal year, the company did not have access to such information that would enable the company to record this plan as a defined-benefit plan. Consequently, the ITP pension plan secured through insurance with Alecta is recorded as a defined-contribution plan. The year’s contributions for pension insurance taken out with Alecta total SEK 9 M (11). Alecta’s surplus can be distributed to the policyholders and/or the insured. At December 31, 2010, Alecta’s surplus corresponded to a collective consolidation ratio of 146 percent – corresponding information for December 2011 is not yet available. The collective consolidation ratio reflects the market value of Alecta’s assets as a percentage of insurance obligations, calculated in accordance with Alecta’s actuarial assumptions, which do not correspond with IAS 19. Annual Report 2011 Trelleborg AB 91
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ANNUAL REPORT WE SEAL, DAMP AND PRO
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TRELLEBORG IN BRIEF GLOBAL LEADER I
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sek 29,106 m Demand was significant
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Trelleborg will be able to allocate
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FURTHER DEVELOPMENT OF ANTIVIBRATIO
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Continuing operations Net sales and
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KEY FIGURES Market position, no. 1-
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KEY FIGURES 2011 2010 Net sales, se
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KEY FIGURES Net sales and ROS* 2011
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KEY FIGURES 2011 2010 Net sales, se
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About the material’s properties N
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WE ARE GROWING IN PACE WITH GLOBALI
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INCREASED GLOBAL PRESENCE +11% Nort
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OUR FINANCIAL TARGETS Trelleborg sh
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EXCELLENCE - CONTINUOUS IMPROVEMENT
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Turcon® M12 is the name of a new p
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Moreover, because selected parts of
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The elevated risk level has been de
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Financial risks, cont. Maturity ter
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CORPORATE GOVERNANCE Trelleborg is
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Independence of the Board The Board
Page 43 and 44: Name Nina Udnes Tronstad Heléne Vi
Page 45 and 46: Name Maurizio Vischi Sören Anderss
Page 47 and 48: President and Group Management The
Page 49 and 50: Control staff function works in acc
Page 51 and 52: As part of the infrastructure proje
Page 53 and 54: TARGET INDICATORS OUTCOME AND PROGR
Page 55 and 56: GOVERNANCE AND CODE OF CONDUCT Gove
Page 57 and 58: ACTIVE STAKEHOLDER DIALOG Trellebor
Page 59 and 60: in the voluntary reporting process
Page 61 and 62: workplaces globally. Trelleborg’s
Page 63 and 64: RESPONSIBILITY FOR SOCIETY AND THE
Page 65 and 66: ASSURANCE REPORT Auditor’s Report
Page 67 and 68: Our finances ......................
Page 69 and 70: CONSOLIDATED INCOME STATEMENTS sek
Page 71 and 72: Operating profit In addition to dis
Page 73 and 74: Income statement per quarter Contin
Page 75 and 76: CONSOLIDATED BALANCE SHEETS Decembe
Page 77 and 78: COMMENTS ON THE CONSOLIDATED CASH-F
Page 79 and 80: Note 1 General information The Pare
Page 81 and 82: Dividend income Dividend income is
Page 83 and 84: loss. If the loan, and consequently
Page 85 and 86: Assets and liabilities by business
Page 87 and 88: Note 4 Auditor’s remuneration sek
Page 89 and 90: Note 15 Intangible assets Buildings
Page 91 and 92: Note 18 Deferred tax assets/tax lia
Page 93: Note 26 Equity Specification of oth
Page 97 and 98: Note 36 Events after the closing da
Page 99 and 100: PARENT COMPANY, TRELLEBORG AB Chang
Page 101 and 102: Note 45 Property, plant and equipme
Page 103 and 104: Proposed treatment of unappropriate
Page 105 and 106: TEN-YEAR OVERVIEW Trelleborg Group
Page 107 and 108: Swedish and foreign ownership, base
Page 109 and 110: Spain Production: Burgos, Cascante,
Page 111 and 112: FINANCIAL DEFINITIONS AND GLOSSARY
Page 113 and 114: ADRESSES Head offices Trelleborg AB
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Annual report 2011 - Trelleborg

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