Saab 2014 Annual Report Download - page 117

FINANCIAL INFORMATION – NOTES
Parent Company
MSEK 31-12-2014 31-12-2013
Value-added tax 222 81
Employee withholding taxes 141 148
Other 458 704
Total 821 933
Of which liabilities due for payment more than five years
after closing day - 43
Other liabilities in the Parent Company include both interest-bearing and non-
interest-bearing liabilities. For a comparison with the Group, see also note 35.
Saab does not consider there to be a significant difference between book
and fair value.
NOTE 40 ACCRUED EXPENSES AND
DEFERRED INCOME
Group Parent Company
MSEK 31-12-2014 31-12-2013 31-12-2014 31-12-2013
Accrued expenses
Vacation pay liability 995 914 719 698
Accrued project costs 944 852 508 563
Social security expenses 613 435 473 324
Expected invoices 306 266 144 192
Personnel liabilities 263 237 165 178
Claims reserve 80 101 11 2
Royalties and
commissions 60 134 39 114
Other 285 316 365 232
Total accrued
expenses 3,546 3,255 2,424 2,303
Deferred income
Liabilities to customers 2,038 2,456 1,528 2,162
Capitalised changes in
value related to forward
contract rollovers - - 194 330
Other 25 24 21 24
Total deferred income 2,063 2,480 1,743 2,516
Total 5,609 5,735 4,167 4,819
Saab does not consider there to be a significant difference between book
and fair value.
NOTE 41 FINANCIAL RISK MANAGEMENT
AND FINANCIAL INSTRUMENTS
Saab’s financial assets and liabilities and contractual obligations give rise to
financial risks. These risks are managed to a large extent with various financial
instruments.
Financial risk management
The Board of Directors of Saab has approved a Group Treasury Policy, which pro-
vides an overall description of the management of financial risks and treasury ope-
rations. The goal is to identify and actively manage financial risks in order to reduce
the negative impact on the Group’s results, competitive strength and financial flexi-
bility.
The financial risks are defined as follows:
• Foreign currency risk
• Interest rate risk
• Liquidity and financing risk
• Commodity risk
• Credit and counterparty risk
Saab uses derivatives primarily to:
• convert anticipated commercial cash flows in foreign currency to SEK
• convert the fixed interest periods for assets and liabilities
Responsibility for managing the Group’s financial risks and developing methods
and principles to manage financial risks is centralised in Group Treasury. The ope-
rating business areas have directives and processes that describe how financial
risks shall be managed. Furthermore, Group Management has issued detailed
directives and guidelines for Group Treasury’s operations.
Management of insurance is centralised in the Group’s insurance company, Lan-
sen Försäkrings AB, where external transactions are handled as well. Customer
finance, guaranty and finance issues are also managed by Group Treasury.
The Group’s internal bank, Saab Treasury, is responsible for the Group’s cash
management, financing, management of interest rate and currency risks and also
electricity price risks. Saab has an agreement with an external party to manage the
Group’s electricity price risks through discretionary management. Other commo-
dity risk is managed primarily through contractual clauses.
To a limited extent, the Group Treasury Policy allows proprietary trading in inte-
rest rate and currency instruments. The main purpose of this trading is to gain
access to qualitative market information and maintain a high level of market exper-
tise. Saab Treasury has a risk mandate expressed as VaR (Value at Risk) of
MSEK50 (50), which is divided between management of economic risks in the
Tender to Contract portfolio, trading and electricity derivatives. During the year,
approximately MSEK 15 was allocated to the trading portfolio, approximately
MSEK 1 to electricity derivatives and approximately MSEK 34 to the Tender to
Contract portfolio. VaR is a probability-based method based on historical price
fluctuations and correlations and is considered a standard in the financial industry.
The method provides an estimation of the maximum loss over a specific number of
days, with a certain probability. Saab uses three days and a 99-per cent probabi-
lity. The Treasury Risk Analysis unit reports each portfolio’s risk defined according
to established risk measures to Saab’s CFO on a daily basis.
Financial instruments
Financial assets in the Group mainly comprise accounts receivable, accrued
income, interest-bearing receivables, liquid assets, fixed income investments and
derivatives with positive market values. Saab’s financial liabilities mainly comprise
interest-bearing liabilities, accounts payable, accrued expenses and derivatives
with negative market values. The following tables show a subdivided statement of
financial position categorised and classified according to IAS 39. A more detailed
description of the categories can be found in note 1, Accounting principles.
Note 39, cont.
SAAB ANNUAL REPORT 2014 – 113