ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...
ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...
ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...
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2010<br />
PARENT<br />
COMPANY<br />
SEK M<br />
At fair value<br />
through<br />
profit or loss,<br />
held for sale<br />
Loans<br />
and<br />
receivables<br />
Other<br />
liabilities<br />
Total<br />
carrying<br />
value<br />
Fair<br />
value<br />
Receivables from<br />
Group companies<br />
2,570.9 2,570.9 2,570.9<br />
Other receivables 8.2 1.6 9.8 9.8<br />
Liquid assets 138.3 138.3 138.3<br />
Total 8.2 2,710.8 0.0 2,719.0 2,719.0<br />
Liabilities to<br />
credit institutions<br />
2,588.6 2,588.6 2,588.6<br />
Accounts payable 6.7 6.7 6.7<br />
Liabilities to<br />
Group companies<br />
1,659.5 1,659.5 1,659.5<br />
Other liabilities 0.8 5.8 6.6 6.6<br />
Total 0.8 0.0 4,260.6 4,261.4 4,261.4<br />
2009<br />
PARENT COMPANY<br />
SEK M<br />
Receivables from<br />
Group companies<br />
2,207.1 2,207.1 2,207.1<br />
Other receivables 7.5 0.1 7.6 7.6<br />
Liquid assets 159.8 159.8 159.8<br />
Total 7.5 2,367.0 0.0 2,374.5 2,374.5<br />
Liabilities to<br />
credit institutions<br />
2,349.7 2,349.7 2,349.7<br />
Accounts payable 4.1 4.1 4.1<br />
Liabilities to<br />
Group companies<br />
1,703.1 1,703.1 1,703.1<br />
Other liabilities 1.3 2.4 3.7 3.7<br />
Total 1.3 0.0 4,059.3 4,060.6 4,060.6<br />
The only financial instruments that are regularly restated at fair value are<br />
derivatives (forward exchange contracts). They are measured based on a<br />
valuation technique that uses observable market data and thus falls under<br />
Level 2 according to the valuation hierarchy in IFRS 7.<br />
Purchased debt<br />
Purchased debt is recognized at amortized cost according to an effective<br />
interest method. The Group determines the carrying value by calculating<br />
the present value of estimated future cash flows at the receivables’ original<br />
effective interest rate. Adjustments are recognized through profit or<br />
loss. In the company’s opinion, the market’s yield requirements in the form<br />
of effective interest rates on new portfolios have remained fairly constant<br />
despite turbulence in global financial markets in recent years. With this<br />
valuation method, the carrying value is the best estimate of the fair value<br />
of debt portfolios, in the company’s opinion.<br />
Other receivables<br />
Other receivables have short maturities. Receivables in foreign currency are<br />
translated in the accounts at balance sheet date rates. Consequently, carrying<br />
value corresponds to fair value.<br />
Liquid assets<br />
Liquid assets mainly consist of bank balances. Liquid assets in foreign currency<br />
are translated in the accounts at balance sheet date rates. Consequently,<br />
carrying value corresponds to fair value.<br />
Liabilities to credit institutions<br />
The Parent Company’s and the Group’s loan liabilities carry market rate<br />
interest with short fixed interest terms. Liabilities in foreign currency are<br />
translated in the accounts at balance sheet date rates. Consequently, carrying<br />
value corresponds to fair value.<br />
Notes<br />
Accounts payable<br />
Accounts payable have short maturities according to the tabel below. Liabilities<br />
in foreign currency are translated in the accounts at balance sheet<br />
date rates. Consequently, carrying value corresponds to fair value.<br />
GROUP PARENT COMPANY<br />
MSEK 2010 2009 2010 2009<br />
Accounts payable due<br />
< 30 days<br />
129.7 135.4 6.6 4.1<br />
Accounts payable due<br />
31-90 days<br />
10.6 7.1 – –<br />
Accounts payable due<br />
> 91 days<br />
1.1 0.5 0.1 0.0<br />
Total accounts payable 141.4 143.0 6.7 4.1<br />
Other liabilities<br />
The Parent Company’s and the Group’s other liabilities have short maturities.<br />
Liabilities in foreign currency are translated in the accounts at balance<br />
sheet date rates. Consequently, carrying value corresponds to fair value.<br />
Derivatives<br />
The Parent Company and the Group hold forward exchange contracts to a<br />
limited extent. The contracts have short maturities, typically one or more<br />
months. All outstanding forward exchange contracts are restated at fair<br />
value in the accounts, with adjustments recognized through profit or loss.<br />
Outstanding forward exchange contracts at year end in the parent company<br />
and in the Group comprise the following currencies:<br />
Local currency Local currency Hedged amount, sell<br />
CHF – 1 471 799<br />
CZK 4,441,819 138,114,747<br />
DKK – 54,360,258<br />
EUR 18,055,977 22,841,309<br />
GBP – 21,852,477<br />
HUF – 2,335,379,615<br />
LTL – 914,336<br />
LVL – 322,739<br />
NOK 39,131,771 –<br />
PLN 9,170 1,848,170<br />
RUB – 25,800,000<br />
Forward exchange contracts are classified as financial assets measured at fair<br />
value through profit or loss (held for sale). The carrying value at year-end corresponds<br />
to fair value, SEK 7.4 M (6.2), net. Changes in the value of forward<br />
exchange contracts recognized during the year through profit or loss amounted<br />
to SEK 81.8 M (65.6). The purpose of these forward exchange contracts<br />
has been to minimize exchange rate differences in the Parent Company attributable<br />
to receivables and liabilities in foreign currency. These exchange rate<br />
differences amounted to SEK –82.5 M (–60.3) during the year. The net effect<br />
through profit or loss of exchange rate differences attributable to receivables<br />
and liabilities as well as forward exchange contracts is SEK –0.7 M (5.3).<br />
NOTE 38<br />
fINANCIAL RISKS AND fINANCIAL POLICIES<br />
Principles of financing and financial risk management<br />
The financial risks that arise in Intrum Justitia’s operations are limited.<br />
Thanks to a strong cash flow, combined with little need for investment and<br />
operating capital, external capital needs in the Credit Management operations<br />
are low.<br />
Intrum Justitia’s financing and financial risks are managed within the<br />
Group in accordance with the treasury policy established by the Board of<br />
Directors. The treasury policy contains rules for managing financial activities,<br />
delegating responsibility, measuring and identifying financial risks and<br />
limiting these risks.<br />
Internal and external financial operations are concentrated in Group Treasury<br />
in Stockholm, which ensures economies of scale when pricing financial<br />
transactions. Because Group Treasury can take advantage of temporary surpluses<br />
and deficits in the Group’s various countries of operation, the Group’s<br />
total interest expense can be minimized.<br />
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