LEGO-Group-Annual-Report-2017.pdf

Interest rate risk the lego groups interest rate risk

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Interest rate risk The LEGO Group’s interest rate risk relates to interest- bearing debt and interest-bearing assets. The LEGO Group’s interest-bearing assets consist mainly of bank deposits and deposit with KIRKBI Invest A/S. An increase in the interest level of 1.0% for 2017 would have had a positive impact on the LEGO Group’s profit before tax of approx. DKK 34.4 million in 2017 (DKK 21.6 million in 2016). The LEGO Group’s interest rate risk is considered immaterial and is not expected to have a significant impact on the LEGO Group’s results. Liquidity risk Liquidity is managed centrally and is continually assessed. It is ensured that, at any given time, sufficient financial resources are available. Based on the financial reserves with banks and credit facilities available in credit institutions and from related parties, there are no significant liquidity risks. Furthermore, excess liquidity is placed at KIRKBI Invest A/S, which is why the counterparty risk is assessed to be low. Capital risk management Dividend of DKK 7,000 million has been paid in May 2017 (DKK 7,000 million in 2016). It is expected that the dividend for 2017, to be paid in 2018, will amount to DKK 7,000 million. The dividend payment reflects the strategy behind the capital structure where the LEGO Group is the operational company and any surplus liquidity is distributed to the owners. 44 Notes The LEGO Group — Annual Report 2017
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Note 26 (continued) The following table shows the timing of cash flows related to financial liabilities and hedging instruments 2017 (mDKK) Carrying amount Fair value 0–1 year 1–5 years Over 5 years Total cash flows Measured at amortised cost (liabilities) Debt to credit institutions 178 178 11 43 130 184 Debt to related parties 600 600 619 619 Trade payables 2,811 2,811 2,811 2,811 Other debt 1 2,751 2,751 2,759 10 2,769 6,340 6,340 6,200 53 130 6,383 Derivative financial instruments Measured at fair value through the income statement 2 2 2 2 Measured at fair value through comprehensive income (cash flow hedging) 1 1 1 1 3 3 3 3 Total financial liabilities 6,343 6,343 6,203 53 130 6,386 Measured at amortised cost (loans and receivables) Trade receivables 6,333 6,333 6,333 6,333 Other receivables 1 426 426 426 426 Receivables from related parties 6,688 6,688 6,688 6,688 Cash at banks 762 762 762 762 14,209 14,209 14,209 14,209 Derivative financial instruments Measured at fair value through the income statement 53 53 53 53 Measured at fair value through comprehensive income (cash flow hedging) 44 44 44 44 97 97 97 97 Total financial assets 14,306 14,306 14,306 14,306 1 Non-contractual items such as taxes, duties payable and wage related payables are excluded from other receivables and other debt balance as this analysis is only required for financial instruments. 45 Notes The LEGO Group — Annual Report 2017
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Note 26 (continued) 2016 (mDKK) Carrying amount Fair value 0–1 year 1–5 years Over 5 years Total cash flows Measured at amortised cost (liabilities) Debt to credit institutions 219 219 43 43 142 228 Debt to related parties 600 600 19 619 638 Trade payables 2,837 2,837 2,837 2,837 Other debt 1 3,112 3,112 3,095 21 3,116 6,768 6,768 5,994 683 142 6,819
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