SECURITAS AB Annual Report 2011

ACCOUNTS RECEIVABLE AND AGEING ANALYSIS
MSEK 2011 % 2010 % 2009 %
Accounts receivable
before deduction of
provision for bad
debt losses
Provision for bad
11 384.3 100 10 068.8 100 9 741.2 100
debt losses
Total accounts
-419.3 -4 -344.7 -3 -377.9 -4
receivable 10 965.0 96 9 724.1 97 9 363.3 96
Ageing of accounts
receivable before
deduction of provision
for bad debt losses
Overdue 1–30 days 1 822.1 17 1 556.5 16 1 435.3 15
Overdue 31–90 days 801.8 7 785.2 8 631.7 7
Overdue >90 days 802.3 7 565.9 6 567.0 6
Total overdue 3 426.2 31 2 907.6 30 2 634.0 28
The following details the credit quality of interest-bearing receivables.
COUNTERPARTIES WITH EXTERNAL CREDIT RATINGS
MSEK
Credit quality interest-bearing receivables
2011 2010 2009
A1 / P1 2 245 2 768 2 335
The Group has policies in place that limit the amount of credit exposure to
any one financial institution. Investments of liquid funds may only be made
in government paper or with financial institutions with a high credit rating.
As of December 31, 2011 the weighted average credit rating of these institutions
was short-term A1/P1. The largest total exposure for all instrument
types to any one institution was MSEK 1 062 (958 and 848). Derivative
contracts are only entered into with financial institutions with a credit rating
of at least A1/P1, and with whom Securitas has an established customer
relationship.
Rating
In order to access international debt capital markets in an effective manner,
Securitas has obtained long-term and short-term credit ratings from Standard
& Poor’s. The long term rating is BBB+ with “Stable Outlook” and the
short-term rating is A-2. The Nordic short-term rating is K-1.
FAIR VALUE – HIERARCHY AS PER DECEMBER 31, 2011
Annual Report
Notes and comments to the consolidated financial statements
Fair value of financial instruments
The methods and assumptions used by the Group in estimating the fair
value of the financial instruments are:
· Cash and bank deposits and Short-term investments: carrying amounts
approximate fair values.
· Derivative and other financial instruments: fair values are estimated based
on quoted market prices, on prices provided by independent brokers, or
are calculated on best market prices. The prices used are fair values
stated excluding accrued interest.
· Debt: fair values of fixed rate debt are based on either quoted prices or are
estimated using discounted cash flow calculations based upon the Group’s
current incremental borrowing rates for similar types of borrowings with
maturities consistent with those remaining for the debt being valued.
The fair value of floating rate debt is assumed to equal the carrying value
of the debt.
REVALUATION OF FINANCIAL INSTRUMENTS
MSEK
Recognized in the statement of income
2011 2010 2009
financial income1 3.3 – 0.1
financial expenses1 -0.2 -4.5 -0.5
Deferred tax -0.8 1.2 0.1
Impact on net income for the year 2.3 -3.3 -0.3
Recognized in other comprehensive income
Transfer to hedging reserve before tax -29.7 -56.9 -107.1
Deferred tax on transfer to hedging reserve 7.8 15.0 28.1
Transfer to hedging reserve net of tax -21.9 -41.9 -79.0
Transfer to statement of income before tax 34.1 129.0 184.2
Deferred tax on transfer to statement of income -9.0 -33.9 -48.4
Transfer to statement of income net of tax 25.1 95.1 135.8
Total change of hedging reserve before tax2 Deferred tax on total change of hedging
4.4 72.1 77.1
reserve before tax2 -1.2 -18.9 -20.3
Total change of hedging reserve net of tax 3.2 53.2 56.8
Total impact on shareholders’ equity
as specified above
Total revaluation before tax3 7.5 67.6 76.7
Deferred tax on total revaluation3 -2.0 -17.7 -20.2
Total revaluation after tax 5.5 49.9 56.5
1 Related to financial assets and financial liabilities at fair value through profit or loss. There was no
significant ineffectiveness in the fair value hedge or in the cash flow hedge.
2 Total of transfer to hedging reserve and transfer from hedging reserve to statement of income.
3 Total revaluation and deferred tax recognized via statement of income and via other comprehensive
income.
Valuation techniques Valuation techniques
Quoted using observable using non-observable
MSEK
market prices
market data
market data Total
Financial assets at fair value through profit or loss – 19.6 – 19.6
Financial liabilities at fair value through profit or loss – -21.2 – -21.2
Derivatives designated for hedging with positive fair value – 33.6 – 33.6
Derivatives designated for hedging with negative fair value – -20.5 – -20.5
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