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AAK Annual Report 2015

56 Effective interest rate on debt to banks and credit institutions at balance sheet date (* incl. interest rate swaps) SEK DKK USD CNY TRY BRL INR 2015 1.66* 0.59 1.01 5.55 13.75 14.00 8.00 2014 1.99* 1.12 0.10 5.88 12.50 - - S ensitivity analysis – Interest rates At the closing date, the Group had a floating-rate-based net debt of SEK 960 million (862). A 1 percent change in interest rates would therefore have a full-year effect of SEK 10 million (9) on the Group’s interest costs before tax. Loans and capital structure AAK’s policy on capital structure is to maximise debt financing, though not to a level that would threaten the Company’s position as an investment grade company. AAK’s target key ratios are as follows: Target 2015 2014 Net interest-bearing debt/EBITDA < 3.0 1.13 1.50 This target level is considered to be relatively conservative and contributes to ensuring that AAK will be able to retain its high credit rating.   The Group’s policy is to allocate total net borrowings per subsidiary relative to each subsidiary’s share of the Group’s free cash flow. This minimises the currency risk in relation to the Group’s ability to pay interest on and amortise its borrowings, which in turn strengthens the Group’s debt capacity. Total borrowing reported in the balance sheet, per currency at balance sheet date SEK million 2015 2015 SEK 954 935 DKK 468 647 USD 441 734 CNY 73 54 TRY 195 176 BRL 66 - INR 193 - Other 29 82 Total 2,419 2,628 Liquidity risk Liquidity risk concerns the Group’s ability to meet its financial commitments as they fall due. The table below shows all of the Group’s financial commitments, listed by the earliest contractual maturity date at the balance sheet date. All liabilities to banks and credit institutions are based on variable interest rates, which means the year-end carrying value reflects the present value of these liabilities. All liabilities in foreign currency are translated into SEK at year-end closing rates. Disclosure of financial liabilities by maturity date, December 31, 2015 Total amount Less than 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years Non-current liabilities Financial liabilities Liabilities to banks and credit institutions 2,132 375 - 1,432 325 Other non-current liabilities 226 - - - 226 Total non-current liabilities 2,358 375 - 1,432 551 Interest on liabilities to banks and credit institutions 495 11 - 299 185 Total non-current liabilities and interest 2,853 386 - 1,731 736 Current liabilities Financial liabilities Liabilities to banks and credit institutions 287 287 - - - Accounts payables 2,383 2,383 - - - Derivative financial instruments 304 304 - - - Accrued expenses 672 672 - - - Other current liabilities 135 135 - - - Total current liabilities 3,781 3,781 - - - Interest on liabilities to banks and credit institutions 1 1 - - - Total current liabilities and interest 3,782 3,782 - - - Unused credit facilities available to the Group at the 2015 year-end Total amount Less than 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years Unused credit facilities 3,766 375 - 3,391 -


AAK Annual Report 2015
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