IC Companys – Annual Report 2008/09 0 - IC Companys A/S

time limit in pursuance thereof. Therefore, we have requested the authorities to appoint an advisory committee,
who shall decide how the transfer pricing principles should be eliminated.
In the financial year 2007/08 IC Companys’ other German sales company has been subject to a tax audit. The
audit of the years under review has generated a tax loss of DKK 55 million. Based on their audit, the German tax
authorities have increased the income for the years under review by 65 million. As in the case above, the argument
is that the transfer pricing principles have not been correctly applied. Equal to the other case, the Danish
authorities have rejected to perform corresponding adjustments. As in the case mentioned above, the case will be
brought before an EC Arbitration Commission and preliminary proceedings are ongoing.
Historically, cases brought before the EC Arbitration Commission are lengthy, and on that background a resolution
is not expected for at least six months for the first case and 2 years for the latter. The tax base of these tax losses
and the possible refund of Danish taxes are not recognised in the balance sheet.
28. Changes in working capital
DKK million 30.06.2009 30.06.2008
Change in inventories 92.8 (66.0)
Change in receivables 55.1 (22.0)
Change in short-term debt excluding tax (14.4) 55.3
Total 133.5 (32.7)
29. Cash at year end
DKK million 30.06.2009 30.06.2008
Cash and cash equivalents 82.2 132.0
Financial institutions, short-term (447.3) (603.0)
Cash at 30 june (365.1) (471.0)
The Group’s total credit commitments amounted to DKK 1,419 million at 30 June 2009 (30 June 2008: DKK
1,420 million). Of this amount, DKK 615 million has been utilised in the form of short-term and long-term debt to
credit institutions and DKK 224 million has been utilised in the form of trade finance facilities and guarantees.
Accordingly, unutilised credit facilities amount to DKK 580 million. All credit facilities are standby credits which
can be utilised with a day’s notice.
30. Risks and derivative financial instruments
Foreign exchange risk
The Group’s foreign exchange risk (transaction risk) is handled centrally by the Group’s Treasury Department. DKK
is the Group’s functional currency, and foreign exchange positions are generally hedged vis-à-vis DKK. The Group’s
primary transaction risk relates to the buying and selling of goods in foreign currency. The accounting and anticipated
risks are hedged by means of forward transactions and/or options. Hedging is made on a 12-month horizon.
Forward currency contracts relate exclusively to hedges of goods sold and bought. See the Group’s policy in this
respect. The risk coverage of the Group’s transaction exposure is made from an estimate of the cash flow demand
for the future 12 months. As a general rule cash flows in all currencies are hedged except from EUR.
The Group’s foreign exchange exposure is hedged centrally, although a few subsidiaries have unhedged foreign
exchange exposures if they have signed leases in a currency other than the local currency.
IC Companys – Årsrapport 2008/09
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