Page 106 - Loomis Annual Report 2017

102 Notes – Group Loomis Annual Report 2017
Note 30 cont.
Risks
Through its de ned bene t pension plans the Group is exposed to a number of risks, the most signi cant of which are detailed below:
Asset volatility
(Relevant to funded plans in UK and Norway)
Changes in yields
(Relevant to UK and France)
The majority of the scheme liabilities are calculated using a discount rate set with reference to investment grade bond yield curves. If return on scheme assets underperform the discount rate this will create a de cit. Equity instruments are expected to outperform liability matching bonds. Returns on equities are expected to be volatile relative to liability matching bonds thus introducing volatility and risk into the funding position.
A decrease in the discount rate will increase the scheme liabilities, although this will for funded plans, be partially offset by an increase in the value of the scheme’s bond holdings.
The majority of the pension obligations are linked to in ation, and higher in ation in insolation will lead to higher liabilities although, in most cases, caps on the level of in ationary increases are in place to protect the scheme against in ation. A majority of the assets are equity based where valuations have little predictable sensitivity to in ation meaning that an increase in in ation will be expected to increase the de cit.
The obligations in some countries provide bene ts for the life of the Member and/or their dependents, so increases in life expectancy will result in an increase in the scheme liabilities. In some countries, the bene t provided at retirement is a lump sum payment and therefore increases in life expectancy do not impact liabilities in these countries.
Governments may consult on certain aspects on bene ts. If changes are implemented by the Governments, the Company will re ect its impact on the accounting liabilities at the appropriate time.
In ation risk
(Relevant to UK)
Life expectancy
(Relevant to UK and Norway)
Legislative risk
SEK m
Other provisions
Accrued expenses and prepaid income
Dec. 31, 2016
1,117 6 27 2 311
1,463
NOTE 31
NOTE 32
Dec. 31, 2017
Other long-term provisions Other short-term provisions Total other provisions
SEK m
Other long-term provisions Opening balance
New provisions
Provisions utilized Translation differences Closing balance
Other short-term provisions Opening balance
New provisions
Provisions utilized
Translation differences
Closing balance
Total other provisions
Dec. 31, 2016
99
46
145
Dec. 31, 2016
106 3 –12 2 99
14 36 –3
0
46 145
SEK m
Accrued personnel costs
Accrued interest expenses
Accrued rent charges
Accrued consulting fees
Other accrued expenses
Total accrued expenses and prepaid income
1,042
Dec. 31, 2017
99
5
–18
–5
82
46
26
–20
–1
51
132
240
4
27
4
Other accrued expenses, as per the above, refer to, amongst other things, accrued insurance expenses, accrued suppliers’ invoices and accrued lease expenses.
NOTE 33
Other current liabilities
Other provisions refer primarily to provisions related to disputes. Disputes are often lengthy processes which extend over several years. It is, therefore, not possible to give any detailed informa- tion regarding the timeline for out ows from other provisions.
Dec. 31, 2017
82
51
132
SEK m
Dec. 31, 2016
69 191 101 360
Dec. 31, 2017
1,317
Advanced payment from customers Current liabilities attributable to VAT Other current liabilities
Total other current liabilities
69
203
111
382