ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

2010
PARENT
COMPANY
SEK M
At fair value
through
profit or loss,
held for sale
Loans
and
receivables
Other
liabilities
Total
carrying
value
Fair
value
Receivables from
Group companies
2,570.9 2,570.9 2,570.9
Other receivables 8.2 1.6 9.8 9.8
Liquid assets 138.3 138.3 138.3
Total 8.2 2,710.8 0.0 2,719.0 2,719.0
Liabilities to
credit institutions
2,588.6 2,588.6 2,588.6
Accounts payable 6.7 6.7 6.7
Liabilities to
Group companies
1,659.5 1,659.5 1,659.5
Other liabilities 0.8 5.8 6.6 6.6
Total 0.8 0.0 4,260.6 4,261.4 4,261.4
2009
PARENT COMPANY
SEK M
Receivables from
Group companies
2,207.1 2,207.1 2,207.1
Other receivables 7.5 0.1 7.6 7.6
Liquid assets 159.8 159.8 159.8
Total 7.5 2,367.0 0.0 2,374.5 2,374.5
Liabilities to
credit institutions
2,349.7 2,349.7 2,349.7
Accounts payable 4.1 4.1 4.1
Liabilities to
Group companies
1,703.1 1,703.1 1,703.1
Other liabilities 1.3 2.4 3.7 3.7
Total 1.3 0.0 4,059.3 4,060.6 4,060.6
The only financial instruments that are regularly restated at fair value are
derivatives (forward exchange contracts). They are measured based on a
valuation technique that uses observable market data and thus falls under
Level 2 according to the valuation hierarchy in IFRS 7.
Purchased debt
Purchased debt is recognized at amortized cost according to an effective
interest method. The Group determines the carrying value by calculating
the present value of estimated future cash flows at the receivables’ original
effective interest rate. Adjustments are recognized through profit or
loss. In the company’s opinion, the market’s yield requirements in the form
of effective interest rates on new portfolios have remained fairly constant
despite turbulence in global financial markets in recent years. With this
valuation method, the carrying value is the best estimate of the fair value
of debt portfolios, in the company’s opinion.
Other receivables
Other receivables have short maturities. Receivables in foreign currency are
translated in the accounts at balance sheet date rates. Consequently, carrying
value corresponds to fair value.
Liquid assets
Liquid assets mainly consist of bank balances. Liquid assets in foreign currency
are translated in the accounts at balance sheet date rates. Consequently,
carrying value corresponds to fair value.
Liabilities to credit institutions
The Parent Company’s and the Group’s loan liabilities carry market rate
interest with short fixed interest terms. Liabilities in foreign currency are
translated in the accounts at balance sheet date rates. Consequently, carrying
value corresponds to fair value.
Notes
Accounts payable
Accounts payable have short maturities according to the tabel below. Liabilities
in foreign currency are translated in the accounts at balance sheet
date rates. Consequently, carrying value corresponds to fair value.
GROUP PARENT COMPANY
MSEK 2010 2009 2010 2009
Accounts payable due
< 30 days
129.7 135.4 6.6 4.1
Accounts payable due
31-90 days
10.6 7.1 – –
Accounts payable due
> 91 days
1.1 0.5 0.1 0.0
Total accounts payable 141.4 143.0 6.7 4.1
Other liabilities
The Parent Company’s and the Group’s other liabilities have short maturities.
Liabilities in foreign currency are translated in the accounts at balance
sheet date rates. Consequently, carrying value corresponds to fair value.
Derivatives
The Parent Company and the Group hold forward exchange contracts to a
limited extent. The contracts have short maturities, typically one or more
months. All outstanding forward exchange contracts are restated at fair
value in the accounts, with adjustments recognized through profit or loss.
Outstanding forward exchange contracts at year end in the parent company
and in the Group comprise the following currencies:
Local currency Local currency Hedged amount, sell
CHF – 1 471 799
CZK 4,441,819 138,114,747
DKK – 54,360,258
EUR 18,055,977 22,841,309
GBP – 21,852,477
HUF – 2,335,379,615
LTL – 914,336
LVL – 322,739
NOK 39,131,771 –
PLN 9,170 1,848,170
RUB – 25,800,000
Forward exchange contracts are classified as financial assets measured at fair
value through profit or loss (held for sale). The carrying value at year-end corresponds
to fair value, SEK 7.4 M (6.2), net. Changes in the value of forward
exchange contracts recognized during the year through profit or loss amounted
to SEK 81.8 M (65.6). The purpose of these forward exchange contracts
has been to minimize exchange rate differences in the Parent Company attributable
to receivables and liabilities in foreign currency. These exchange rate
differences amounted to SEK –82.5 M (–60.3) during the year. The net effect
through profit or loss of exchange rate differences attributable to receivables
and liabilities as well as forward exchange contracts is SEK –0.7 M (5.3).
NOTE 38
fINANCIAL RISKS AND fINANCIAL POLICIES
Principles of financing and financial risk management
The financial risks that arise in Intrum Justitia’s operations are limited.
Thanks to a strong cash flow, combined with little need for investment and
operating capital, external capital needs in the Credit Management operations
are low.
Intrum Justitia’s financing and financial risks are managed within the
Group in accordance with the treasury policy established by the Board of
Directors. The treasury policy contains rules for managing financial activities,
delegating responsibility, measuring and identifying financial risks and
limiting these risks.
Internal and external financial operations are concentrated in Group Treasury
in Stockholm, which ensures economies of scale when pricing financial
transactions. Because Group Treasury can take advantage of temporary surpluses
and deficits in the Group’s various countries of operation, the Group’s
total interest expense can be minimized.
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