Anders Hedin Invest årsredovisning ENG 1
loans at variable interest rates were in Swedish
krona, amounting to an average interest rate of between 0.6-1.6% If the interest rates on loans in Swedish Krona had been 1 per cent higher, all variables constant as of 31/12/2015, the estimated gains after taxes for the fiscal year would have been 24 MSEK (2014: 19 MSEK) higher/lower, primarily as a result of effects arising from higher/lower interest rates for loans with variable interest rates. Credit risks Credit risks are managed at Group level, with exception for credit risks attributable to outstanding accounts receivable. Each Group company is responsible for following up and analysing credit risks for each new customer prior to offering standard terms and conditions for payment and delivery. Credit risks arise as a result of cash and cash equivalents, derivative instruments, holdings in credit institutions and bank deposits, as well as exposure to credit toward customers including outstanding receivables and agreed upon transactions. Credit limits are followed up regularly, and management does not expect any losses as a result of payment defaults from any parties. The credit risk involved in receivables is specified in Note 19. Liquidity risks Cash flow projections are established by the Group's business operating companies and aggregated by the Group's CFO. The Group's CFO carefully monitors current prognoses for the Group's liquidity reserves in order to ensure that the Group has sufficient liquidity to satisfy any requirements in ongoing operations while simultaneously maintaining sufficient flexibility in agreed upon credit facilities that have not been used to ensure that the Group does not exceed the credit limits of any of the Group's borrowing facilities. The table below analyses the Group's financial obligations distributed over the period between the balance sheet date until the agreed upon expiration date. Amounts in the table are agreed upon non-discounted cash flows. Maturities Liabilities to credit institutions Financial leasing liabilities Overdraft facilities Accounts payable Other liabilities Total 1,987,891 6,607 522,142 632,152 64,844 3,213,636 < 1 year 1-2 years > 2 years 30,133 0 6,798 0 0 0 36,931 51,500 0 0 0 51,500 Agreed upon expiration date for the larger part of the loans is 2016, but is expected to be extended at the same amortization rate. Of obligations to credit institutions, 78,723 TSEK will be amortized and 57,562 TSEK attributable to vehicle financing for car rental operations will be settled during 2016. The remainder will be renewed. Calculation of fair value Classification of financial instruments valuated at fair value has been conducted in accordance with a fair value hierarchy which defines the various levels as follows: Level 1 indicates quoted prices in active markets for identical assets and liabilities. Level 2 indicates observable data concerning assets or liabilities other than quoted prices, in line with Level 1, either directly (i.e., as price quotes) or indirectly, (i.e., attributable to price quotes). Level 3 indicates information on assets or liabilities that are not based in observable market information. Financial instruments valuated at fair value in the income statement are classified as Level 1. Fair value of financial liabilities are equivalent to the carrying amount. Property and land are valuated at fair value in accordance with the revaluation method and classified as level 3, see also Note 3. NOTE 3 ESTIMATES AND ASSESSMENTS Estimates and assessments are valuated continuously and are based in historical precedence and other factors, including expectations of future events that are likely to occur under current conditions. The company makes estimates and assumptions about the future. The resulting estimates for accounting purposes will, by definition, seldom match actual results. The estimates and assumptions that carry a significant risk of material adjustments in reported values for assets and liabilities during the following year are outlined below. Goodwill impairment testing The Group tests annually for impairment for goodwill in accordance with the Group's accounting principles. Recoverable values for cash generating units have been established by calculating value of utilization. These calculations include by necessity certain estimates (note 13). Repurchase agreements In some car sales, the Group may occasionally commit to repurchase agreements, which entail a commitment to repurchase a sold good at a pre-agreed residual value. This occurs primarily in connection with car sales in private leasing. The agreements are reported as operational leasing agreements in accordance with the Group's accounting principles. The agreements entail a residual value risk in that the company may be forced to sell used cars at a loss in the future in the event that value developments are weaker than predicted at the time of the agreement. Continuous assessments of these vehicles' future net worth are carried out. The cars are reported as vehicles under tangible assets and repurchase agreements under Other Liabilities. Inventories Valuation of used cars is estimated at the lowest acquisition value and net realizable value. Net realizable value is established based in estimated realizable value less sales costs. Net realizable value was lower than acquisition value by the amount of 16,194 TSEK (13,592). Valuation of properties The properties are subject to regular valuation by external parties, last performed in December 2014. Valuation is based in estimates of market value based in analyses of prepaid items. Value is estimated based in a market adapted cash flow analysis which simulates projected future income and costs and analyses market expectations of the relevant item. Vacancies have been taken into consideration to the extent that such exist, as well as to property leases. Internal use of property has been estimated based in an estimate of market-valued leases for each area and 10 year contract. Direct returns requirements vary between 6,0-8,0 % depending on region. Annual inflation has been estimated at 2%. In the event that direct return requirements change by +/- 0,5 per cent, the market value would change by 95 MSEK. Rate of interest varies between 8,0-10,0 %. If the rate of interest changes by +/- 0,5 per cent, the market value would change by 85 MSEK. ANDERS HEDIN INVEST AB ANNUAL REPORT / 2015 73