Annual report 2005 - Sava dd

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28. Accrued expenses
29. Financial instruments
Managing financial risks
The Sava Group has a very good rating, therefore it has
no difficulty in balancing liquidity and cash flows.
However, due to contracting debts in euro currency a
higher foreign currency risk exists. Due to a stable
exchange rate and expected euro introduction the risk is
low. Simultaneously with contracting debts in foreign
currency the EURIBOR rate risk increases, which
mainly serves as the basis for interest rates for debts
contracted anew. According to forecasts this basis
should rise in the future, therefore we are preparing an
interest rate protection which will include all companies
indebted at the EURIBOR-based interest rate. Managing
financial risk is explained in chapter 9 Risk
Management in detail.
Sensitivity analysis of financial risks
In financial risk we are highly exposed to a change in
(SIT in thousands)
2005 2004
Accrued expenses 338,138 405,228
Fair value of financial instruments
the interest rate and since almost three-quarters of
indebtedness is based on the inter-bank interest rate
EURIBOR, its influence is the greatest. Taking into
consideration the average indebtedness last year and the
current structure at 31/12/2005 each tenth of a change in
the average annual interest rate would increase interest
by almost 25 million tolars for the entire Group.
If indebtedness in the Group changed by 1 billion tolars,
the operating income would change by 35.3 million
tolars with the average December interest rate being
3.53 per cent at the Group level.
With regard to the expectations and forecasts, the
change in the euro rate has a considerably lower effect
on operations; ever since Slovenia accessed the
European Union the exchange rate has fluctuated only
slightly around the centrally agreed parity exchange rate
and it amounts to 239.640 tolars for one euro.
(SIT in thousands)
2005 2004
Book Fair Book Fair
value value value value
Securities available for sale 33,430,277 33,430,277 32,141,290 32,141,290
Non-current receivables 2,704,451 2,704,451 442,475 442,475
Current receivables 12,075,122 12,075,122 11,525,492 11,525,492
Granted loans 574,234 574,234 1,042,284 1,042,284
Cash and cash equivalents 2,568,857 2,568,857 703,168 703,168
Non-current loans 14,480,373 14,480,373 11,698,555 11,698,555
Non-current operating liabilities 17,418 17,418 47,329 47,329
Current loans 30,642,855 30,642,855 23,137,273 23,137,273
Current operating liabilities 10,707,024 10,707,024 10,787,794 10,787,794