[36] Information on financial instruments

The KION Group uses both primary and derivative financial instruments. The following section summarises the relevance of these financial instruments for the KION Group.

The following table shows the measurement categories defined by IAS 39. In line with IFRS 7, the table shows the carrying amounts and fair values of financial assets and liabilities:

Carrying amounts broken down by class and category

 

Carrying
amount

Categories

Fair value

Classes

FAHfT

AfS

LaR

HtM

FLaC

FLHfT

€ thousand

2012

 

 

 

 

 

 

 

*

as defined by IAS 17

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

730

 

 

730

 

 

 

730

Financial receivables

9,587

 

 

9,587

 

 

 

9,587

Available-for-sale investments

768

 

768

 

 

 

 

768

Lease receivables*

399,269

 

 

 

 

 

 

398,229

Trade receivables

625,462

 

 

625,462

 

 

 

625,462

Other receivables

59,178

 

 

 

 

 

 

59,178

thereof non-derivative receivables

35,236

 

 

35,236

 

 

 

35,236

thereof derivative financial instruments

23,942

21,077

 

 

 

 

 

23,942

Cash and cash equivalents

562,357

 

 

 

 

 

 

562,357

 

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities to banks

1,858,448

 

 

 

 

1,858,448

 

1,858,448

Corporate bond

489,495

 

 

 

 

489,495

 

530,906

Other financial liabilities

4,488

 

 

 

 

4,488

 

4,488

Shareholder loan

0

 

 

 

 

0

 

0

Lease liabilities*

475,015

 

 

 

 

 

 

475,806

Trade payables

646,044

 

 

 

 

646,044

 

646,044

Other liabilities

503,112

 

 

 

 

 

 

503,612

thereof non-derivative liabilities

159,202

 

 

 

 

159,202

 

159,202

thereof liabilities from finance leases*

300,340

 

 

 

 

 

 

300,840

thereof derivative financial instruments

43,570

 

 

 

 

 

23,968

43,570

Carrying amounts broken down by class and category

 

Carrying
amount

Categories

Fair value

Classes

FAHfT

AfS

LaR

HtM

FLaC

FLHfT

€ thousand

2011

 

 

 

 

 

 

 

*

as defined by IAS 17

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

795

 

 

795

 

 

 

795

Financial receivables

5,351

 

 

5,351

 

 

 

5,351

Available-for-sale investments

768

 

768

 

 

 

 

768

Lease receivables*

361,221

 

 

 

 

 

 

362,319

Trade receivables

676,553

 

 

676,553

 

 

 

676,553

Other receivables

59,514

 

 

 

 

 

 

59,514

thereof non-derivative receivables

36,237

 

 

36,237

 

 

 

36,237

thereof derivative financial instruments

23,277

21,500

 

 

 

 

 

23,277

Cash and cash equivalents

373,451

 

 

 

 

 

 

373,451

 

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities to banks

2,509,889

 

 

 

 

2,509,889

 

2,509,889

Corporate bond

487,508

 

 

 

 

487,508

 

388,750

Other financial liabilities

7,333

 

 

 

 

7,333

 

7,333

Shareholder loan

643,132

 

 

 

 

643,132

 

530,045

Lease liabilities*

446,789

 

 

 

 

 

 

446,326

Trade payables

634,092

 

 

 

 

634,092

 

634,092

Other liabilities

452,691

 

 

 

 

 

 

452,427

thereof non-derivative liabilities

180,226

 

 

 

 

180,226

 

180,226

thereof liabilities from finance leases*

254,723

 

 

 

 

 

 

254,459

thereof derivative financial instruments

17,742

 

 

 

 

 

2,471

17,742

The change in valuation allowances for lease receivables and trade receivables was as follows:

Change in valuation allowances

€ thousand

2012

2011

 

 

 

Valuation allowances as at 1 January

49,565

47,125

Group changes

-483

626

Additions (cost of valuation allowances)

12,010

10,547

Reversals

-2,829

-3,092

Utilisations

-7,573

-5,425

Currency translation adjustments

-158

-216

Valuation allowances as at 31 December

50,532

49,565

The net gains and losses on financial instruments by IAS 39 category are as follows:

Net gains and losses on financial instruments broken down by category

€ thousand

2012

2011

 

 

 

Loans and receivables (LaR)

-1,594

2,062

 

 

 

Available-for-sale investments (AfS)

13

13

 

 

 

Financial assets held for trading (FAHfT)

8,950

14,360

 

 

 

Financial liabilities held for trading (FLHfT)

-11,923

-10,109

 

 

 

Financial liabilities carried at amortised cost (FLaC)

-179,209

-225,277

The above gains and losses do not include losses arising on hedging transactions deferred in the period amounting to €19,861 thousand (2011: €18,464 thousand) because these losses relate to a documented hedge.

Fair value measurement

The majority of the funding, loans, investments, other non-derivative receivables and liabilities, trade receivables and trade payables held by the Group have short-term maturities. The carrying amounts of these financial instruments approximate their fair values.

The fair value of the corporate bond that has been issued is determined using publicly listed market prices. The calculation is based on the offer price applicable on the reporting date.

The fair value of receivables and liabilities from finance leases corresponds to the present value of the net lease payments, taking into account the current market interest rate for similar leases.

The fair value of derivative financial instruments is determined using appropriate valuation methods on the basis of the observable market information at the reporting date. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of currency forwards is calculated on the basis of the forward rates at the reporting date. All interest-rate swaps and currency forwards are therefore classified as level 2 measurements.

The fair value of the put and call options for the remaining shares of Linde Hydraulics was determined using the Black-Scholes model. The main input variables for the model were the options' exercise price, which may be modified by individual, specific, contractually agreed factors if necessary, and the fair value of the remaining shares in Linde Hydraulics. As at 31 December 2012 the fair value of the put option was €19,740 thousand and the fair value of the call options was €16,520 thousand. The exercise price of the put option is €77,429 thousand. The exercise price of the two call options totals €116,143 thousand. The options are classified as level 3 measurements.

As at 31 December 2012 the net value calculated for the options on the remaining shares in Linde Hydraulics was €3,220 thousand. If the fair value of the shares had been 10 per cent lower on the reporting date, the net value for the options would have increased by €8,310 thousand to a total of €11,530 thousand and resulted in an additional gain of €8,310 thousand. An increase of 10 per cent in the fair value of the shares in Linde Hydraulics would have decreased the net value for the options by €9,010 thousand to a total of €5,790 thousand and would have resulted in an expense of €9,010 thousand.

In order to eliminate default risk to the greatest possible extent, the KION Group only enters into derivatives with counterparties holding a good credit rating.

With the exception of derivative financial instruments and available-for-sale assets, all financial assets and liabilities are measured at amortised cost.

The fair value of available-for-sale assets is determined on the basis of data in an active market and is classified as level 1.

The following table shows the assignment of the fair values to the individual classification levels.

Financial instruments measured at fair value

 

Fair Value Hierarchy

 

€ thousand

Level 1

Level 2

Level 3

2012

 

 

 

 

 

Financial assets

 

 

 

24,710

thereof available-for-sale

768

 

 

768

thereof derivative instruments

 

4,202

19,740

23,942

 

 

 

 

 

Financial liabilities

 

 

 

43,570

thereof derivative instruments

 

27,050

16,520

43,570

Financial instruments measured at fair value

 

Fair Value Hierarchy

 

€ thousand

Level 1

Level 2

Level 3

2011

 

 

 

 

 

Financial assets

 

 

 

24,045

thereof available-for-sale

768

 

 

768

thereof derivative instruments

 

23,277

 

23,277

 

 

 

 

 

Financial liabilities

 

 

 

17,742

thereof derivative instruments

 

17,742

 

17,742

to pagetop