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AAK Annual Report 2016

58 Loans and capital structure AAK’s policy on capital structure is to maximize 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 2016 Net interest-bearing debt/EBITDA < 3.0 1.26 1.13 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 minimizes the currency risk in relation to the Group’s ability to pay interest on and amortize 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 2016 SEK 202 954 DKK 491 468 USD 1,433 441 CNY 81 73 TRY 240 195 BRL 296 66 INR 177 193 Other 154 29 Total 3,074 2,419 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, 2016 Total amount Less than 1 year Between 1 and 2 years Between DQG years More than \HDUV Non-current liabilities Financial liabilities Liabilities to banks and credit institutions 2,857 478 - 1,888 491 Other non-current liabilities 250 - - - 250 Total non-current liabilities 3,107 - 741 Interest on liabilities to banks and credit institutions 483 16 - 416 51 Total non-current liabilities and interest 494 - 2,304 792 Current liabilities Financial liabilities Liabilities to banks and credit institutions 217 217 - - - Accounts payables 3,258 3,258 - - - Derivative financial instruments 724 724 - - - Accrued expenses 899 899 - - - Other current liabilities 200 200 - - - Total current liabilities - - - Interest on liabilities to banks and credit institutions 1 1 - - - Total current liabilities and interest - - - Unused credit facilities available to the Group at the 2016 year-end Total amount Less than 1 year Between 1 and 2 years Between DQG\HDUV More than \HDUV Unused credit facilities 3,665 277 - 3,388 -


AAK Annual Report 2016
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