NOTES
90•Consolidated financial statements
PANDORAANNUAL REPORT2014
SECTION 4: CAPITAL STRUCTURE AND NET FINANCIALS, CONTINUED
FINANCIAL RISKS, CONTINUED
4.4
Liabilities fall due as follows:
Falling due
Falling due
Falling due
DKKmillion
within1 year within 1-5 years
after 5 years
Total
2014
Financial instruments
268
-
-
268
Loans and borrowings
10
-
-
10
Trade payables
804
-
-
804
Other payables
630
-
-
630
Total liabilities at 31December 2014
1,712
-
-
1,712
2013
Financial instruments
148
-
-
148
Loans and borrowings
49
-
-
49
Other non-current liabilities
-
3
-
3
Trade payables
539
-
-
539
Other payables
551
-
-
551
Total liabilities at 31December 2013
1,287
3
-
1,290
Credit risk
PANDORA’s credit risk is primarily related to trade
receivables, cash andunrealised gains onfinancial
contracts.Themaximum credit risk related tofinancial
assets corresponds to the carrying amounts recognised in the
consolidatedbalance sheet.
It is PANDORA’s policy for subsidiaries tobe responsible
for credit evaluation and credit riskon their trade receivables.
In caseof deviation from standard agreements,Group
Treasury and/or theCFOmust approve any significant
transactions related todirect distributors and local key
customers.
Note3.4 includes anoverviewof the credit risk related to
trade receivables.
Credit risks related toPANDORA’s other financial
assetsmainly include cash andunrealised gains on
financial contracts.The credit risk is related todefault of
the counterpartywith amaximum risk corresponding to the
carrying amount of the assets. It is PANDORA’s policy for
GroupTreasury tomonitor andmanage these credit risks.
Liquidity risk
Liquidity risk is the riskof PANDORA’s cashnot covering
PANDORA’s payables due.
The aimof liquiditymanagement is tomaintainoptimal
cash resources to fundPANDORA’s commitments at all
times, tominimise interest andbank costs and to avoid
financial distress. PANDORA’sGroupTreasury is responsible
formonitoring andmanagingPANDORA’s total liquidity
position. PANDORA currentlydoes not use cashpools, but
intercompany loans exist betweenPANDORAA/S and its
subsidiaries.Whenever possible, liquidity is accumulated in
PANDORAA/S.
PANDORA’s cash resources comprise cash and
unutilised committed anduncommitted credit facilities. It is
Management’s opinion that the cash resources of theGroup
and theParent Company are adequate. It is PANDORA’s
policy to ensure adequate cash resources in caseof
unforeseen cashfluctuations.
PANDORAhas revolving credit facilities ofDKK3,500
million,which are committeduntil July2018. Furthermore,
PANDORAhasminor local uncommitted credit facilities
to ensure efficient andflexible local liquiditymanagement.
These credits are facilitatedbyPANDORA’sGroupTreasury.
Interest rate risk
Interest rate risk is the risk of interest rate fluctuations
resulting in additional costs.Most of PANDORA’s interest
rate risk is related to floating-rate loans. It is PANDORA’s
policy tominimise interest rate risk bymanaging the overall
durationof interest rate-sensitive assets and liabilities. At
the reporting date, all interest-bearing loans andborrowings
were unhedged.
