2019 relates to earn out on freeco logistics 2 2018

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2019: Relates to earn-out on Freeco Logistics.22018: Relates to transfers to pension liabilities (DKK -13m) and transfer from other payables relating to restructur-ing provisions (DKK 28m).Of the Group’s provision of DKK 85m (2018: DKK 67m), DKK 28m (2018: DKK 22m) is estimated net present value ofearn-out agreements regarding acquisitions; DKK 15m is estimated restructuring provision (2018: DKK 4m); and DKK42m (2018: DKK 41m) is other provisions.ACCOUNTING POLICIESProvisions are recognised when, due to an event occurring on or before the reporting date, the Group has a legalor constructive obligation, and it is probable that the Group will have to give up future economic benefits tomeet the obligation and that the obligation can be reliably estimated. Provisions are recognised based on Man-agement’s best estimate of the anticipated expenditure for settling the relevant obligation and are discounted ifdeemed material.Annual Report 201995Management reviewConsolidated financialsReportsOtherParent company financials
4. Capital structureand financesThis section shows how the activities of DFDS are financed.DFDS targets a financial leverage ratio between 2.0 and 3.0,where the ratio is measured as Net Interest-Bearing Debt toOperating profit before depreciation (EBITDA) and special items.The following section provides the notes of the main compo-nents that form basis of the Net Interest-Bearing Debt. Further-more, the section includes information on Financial andoperational risks, Financial instruments, Treasury sharesand Earnings per share.DKK millionNote201920181Interest-bearing liabilities24.512,7749,257Derivative financial instruments, related tointerest-bearing activities, net4.25250Receivables, interest-bearing3.2.1-24-24Securities-10-10Cash-840-761Net Interest-Bearing Debt (NIBD)11,9548,513Operating profit before depreciation (EBITDA) and special items3,6332,988Financial leverage ratio (NIBD/EBITDA, times)3.32.81Comparative 2018 numbers are not restated to IFRS 16.2Hereof DKK 3,109m relating to lease liabilities that have different characteristics than other liabilities included in in-terest-bearing liabilities. Under IFRS 16 extention and purchase options are included if the Group is reasonable certainthat these will be exercised. These options are not legally or contractually obligated.Annual Report 201996Management reviewConsolidated financialsReportsOtherParent company financials
4.1 Financial and operational risksDFDS’ risk management policyDFDS’ risk management policy is governed by the DFDS Treasury Policy, which is approved by the Board ofDirectors on an annual basis. The Financial Policy sets out the framework, key policies, limits and guidelines forfinancial risk management of DFDS. DFDS do not enter into speculation. The most important risk factors managedfinancially in DFDS are 1) bunker price, 2) interest rate, 3) currency exchange, 4) liquidity and 5) credit exposure.

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