Notes – Additional information
(USD „000)Liquidity risk
Satair‟s financial reserves at year-end 2010/11 consist of loans and credits taken out with banks and loans granted by vendors in connection with purchases of rights. Loans granted by vendors in connection with purchases of rights have an average term to maturity of approx. 3 years.
List of receivables at June 30 2010
Group 0-1 years 1-2 years 2-5 years +5 years Total*) Fair value**) Book value
Measured at amortized cost
Credit institutions (43,745) (19,659) (52,548) - (115,952) (111,175) (110,959)
Payable to suppliers (50,891) - - - (50,891) (50,891) (50,891)
Other non-current liabilities (200) (509) (1,553) (1,262) (3,524) (3,524) (3,524)
Other current liabilities (10,358) - - - (10,358) (10,358) (10,358)
Measured at fair value (trading portfolio) Foreign exchange hedging
contracts (300) - - - (300) (300) (300)
Interest-rate contracts (1,624) (1,624) (4,874) (2,017) (10,139) (10,139) (10,139)
Total financial liabilities (107,118) (21,792) (58,975) (3,279) (191,164) (186,387) (186,171)
Measured at amortized cost
Cash and cash equivalents 23,342 - - - 23,342 23,342 23,342
Receivables from sales and
services 64,591 - - - 64,591 64,591 64,591
Other receivables 1,037 - - - 1,037 1,037 1,037
Measured at fair value (trading portfolio) Foreign exchange hedging
contracts 18 - - - 18 18 18
Interest-rate contracts - - - -
Financial assets, total 88,988 - - - 88,988 88,988 88,988
Net, Group (18,130) (21,792) (58,975) (3,279) (102,176) (97,399) (97,183)
*) All cash flows are non-discounted and include all liabilities according to agreements made, which includes, i.a., future payments of interest on loans.
**) The fair value of financial liabilities is calculated on the basis of discounted cash flow models based on the market interest rates and credit conditions applying on the balance sheet date.
Notes – Additional information
(USD „000)List of receivables at June 30, 2011
Group 0-1 years 1-2 years 2-5 years +5 years Total*) Fair value**) Book value
Measured at amortized cost
Credit institutions (60,186) - - - (60,186) (59,238) (59,238)
Payable to suppliers (55,448) - - - (55,448) (55,448) (55,448)
Other non-current liabilities (400) (2,410) (2,837) (1,799) (7,446) (7,446) (7,446)
Other current liabilities (25,485) - - - (25,485) (25,485) (25,485)
Measured at fair value (trading portfolio) Foreign exchange hedging
contracts (53) - - - (53) (53) (53)
Interest-rate contracts (1,432) (1,432) (3,971) (520) (7,355) (7,355) (7,355)
Total financial liabilities (143,004) (3,842) (6,808) (2,319) (155,973) (155,025) (155,025)
Measured at amortized cost
Securities 51,027 - - - 51,027 51,027 51,027
Cash and cash equivalents 17,287 - - - 17,287 17,287 17,287
Receivables from sales and
services 66,197 - - - 66,197 66,197 66,197
Other receivables 1,271 - - - 1,271 1,271 1,271
Measured at fair value (trading portfolio) Foreign exchange hedging
contracts 189 - - - 189 189 189
Interest-rate contracts - - - -
Financial assets, total 135,971 - - - 135,971 135,971 135,971
Net, Group (7,033) (3,842) (6,808) (2,319) (20,002) (19,054) (19,054)
*) All cash flows are non-discounted and include all liabilities according to agreements made, which includes, i.a., future payments of interest on loans.
**) The fair value of financial liabilities is calculated on the basis of discounted cash flow models based on the market interest rates and credit conditions applying on the balance sheet date.
30 June, 2010 30 June, 2011
Credit facilities
Unutilized credit facilities 66,759 150,500
The unutilized credit facilities are deemed sufficient to secure the Group’s ongoing operations.
Notes – Additional information
(USD „000)
List of terms to maturity as at June 30, 2010
Parent company 0-1 years 1-2 years 2-5 years > 5 years Total *) Fair value **) Book value Measured at amortized
cost
Credit institutions (38,761) (15,840) (26,397) - (80,998) (78,361) (78,195)
Payable to suppliers (22,746) - - - (22,746) (22,746) (22,746)
Debt owing to
subsidiar-ies (5,378) - - - (5,378) (5,378) (5,378)
Other non-current
liabili-ties (200) (509) (1,553) (1,262) (3,524) (3,524) (3,524)
Other current liabilities (5,701) - - - (5,701) (5,701) (5,701)
Measured at fair value (trading portfolio) Foreign exchange
hedg-ing contracts (300) - - - (300) (300) (300)
Interest-rate contracts (1,369) (1,369) (4,108) (1,570) (8,416) (8,416) (8,416)
Total financial liabilities (74,455) (17,718) (32,058) (2,832) (127,063) (124,426) (124,260) Measured at amortized
cost
Cash and cash
equiva-lents 9,295 - - - 9,295 9,295 9,295
Receivables from sales
and services 23,364 - - - 23,364 23,364 23,364
Receivables from
sub-sidiaries 18,754 - - 24,658 43,412 43,412 43,412
Other receivables 321 - - - 321 321 321
Measured at fair value (trading portfolio) Foreign exchange
hedg-ing contracts 18 - - - 18 18 18
Interest-rate contracts - - - -
Financial assets, total 51,752 - - 24,658 76,410 76,410 76,410
Net, parent company (22,703) (17,718) (32,058) 21,826 (50,653) (48,016) (47,850)
Notes – Additional information
(USD „000)
List of terms to maturity as at June 30, 2011
Parent company 0-1 years 1-2 years 2-5 years > 5 years Total *) Fair value **) Book value Measured at amortized
cost
Credit institutions (60,186) - - - (60,186) (59,238) (59,238)
Payable to suppliers (22,879) - - - (22,879) (22,879) (22,879)
Debt owing to
subsidiar-ies (9,241) - - - (9,241) (9,241) (9,241)
Other non-current
liabili-ties (590) (2,172) (3,548) (1,136) (7,446) (7,446) (7,446)
Other current liabilities (15,467) - - - (15,467) (15,467) (15,467)
Measured at fair value (trading portfolio) Foreign exchange
hedg-ing contracts (53) - - - (53) (53) (53)
Interest-rate contracts (1,432) (1,432) (3,971) (520) (7,355) (7,355) (7,355)
Total financial liabilities (109,848) (3,604) (7,519) (1,656) (122, 627) (121,679) (121,679) Measured at amortized
cost
Securities 51,027 - - - 51,027 51,027 51,027
Cash and cash
equiva-lents 1,175 - - - 1,175 1,175 1,175
Receivables from sales
and services 24,604 - - - 24,604 24,604 24,604
Receivables from
sub-sidiaries 63,232 - - - 63,232 63,232 63,232
Other receivables 680 - - - 680 680 680
Measured at fair value (trading portfolio) Foreign exchange
hedg-ing contracts 190 - - - 190 190 190
Interest-rate contracts - - - -
Financial assets, total 140,908 - - - 140,908 140,908 140,908
Net, parent company 31,060 (3,604) (7,519) (1,656) 18,281 19,229 19,229
*) All cash flows are non-discounted and include all liabilities according to agreements made, which includes, i.a., future payments of interest on loans.
**) The fair value of financial liabilities is calculated on the basis of discounted cash flow models based on the market interest rates and credit conditions applying on the balance sheet date.
Parent company 30 June, 2010 30 June, 2011
Credit facilities
Unutilized credit facilities 36,012 134,321
The unutilized credit facilities are deemed sufficient to secure the Group’s ongoing operations.
Notes – Additional information
(USD „000)
Financial instruments used for currency risk management - Group
The Group uses forward contracts and currency options to manage the currency risk.
Forward contracts and currency option contracts signed as a hedge of future transactions
The Group‟s risk management policy is formulated in a way that ensures compliance with the criteria set out in IAS 39 for use of the rules on hedge accounting. Unrealized exchange rate gains and losses under forward contracts and options are recognized in shareholders‟ equity and taken to the income statement as and when they are realized.
The following net outstanding forward cover contracts at June 30 were used as a hedge of future transactions:
2009/10 2010/11
*) Positive principal amounts of forward cover contracts reflect purchases of the currency in question.
Currency options arranged in cover of future transactions
As at 30 June 2011, by the sale of options the counter value in DKK and EUR of a total of USD 7.4 million (2009/10: USD 5.5 million) had been hedged at an average DKK/USD of 513 (2009/109: EUR/USD 131). Similarly, commitments had been made to sell the counter value of up to a total of USD 9.9 million (2009/10: USD 9 million) against DKK and EUR at an average DKK/USD rate of 550 (2009/10: EUR/USD 122) if the DKK/USD rate increases to a level of DKK/USD 550 (2009/10: EUR/USD 122) or above. The fair value of the currency option contracts signed at 30 June 2011 amounts to USD 33,000 (2009/10: USD -0.3 million). The average term to maturity is 6-7 months.
2009/10 2010/11 2009/10 2010/11
Interest hedging contracts arranged as a hedge of future transactions.
The notional amount and fair value of interest hedg-ing contracts as at the balance sheet date are deter-mined as follows:
Note 29 Pledges and security
Mortgages registered to Satair A/S at a total value of DKK 30 million have been issued and are in the company‟s possession.
Note 30 Contingent liabilities
Satair A/S has guaranteed the loans and credit facilities of subsidiaries in an amount of USD 9.0 million (2009/10: USD 49.2 million). At June 30, 2011 a total of USD 15.6 million (2009/10: USD 9.6 million) of the credit facilities had been utilized and a total of USD 0.0 million (2009/10: USD 28.5 million) had been granted in loans, bringing the total amount in debt at June 30, 2011 to USD 15.6 million (2009/10: USD -18.9 million). All loans and credit facilities are included in the credit line rescheduled in 2010/11 and with a 3-year term.
Notes – Additional information
(USD „000)Note 31 Lease commitments
Group and parent company have signed leases that are non-cancelable by the Group beyond 1 year. The net present value of the total lease commitments of Group and parent company is as follows:
Parent company Group
2009/10 2010/11 2009/10 2010/11
Lease costs payable within 1 year (364) (1,998) (1,805) (2,950)
Lease costs payable within 2 to 5 years (277) (3,782) (3,304) (5,382)
Lease costs payable after 5 years - - (2,889) (1,858)
Total (641) (5,780) (7,998) (10,190)
Lease costs for the year for the Group, respectively the parent company, amount to USD 2,263,000 (2009/10: USD 2,739,000) respectively USD 1,390,000 (2009/10: USD 1,084,000). The leasing contracts relate mainly to operating equipments and real property.
Note 32 Transactions with related parties
The Group has no related parties with a controlling influence.
The Group‟s related parties with considerable influence include members of the Board and Executive Committee and senior executives in the Group companies as well as their family members. Related parties also include companies in which the above persons have considerable influ-ence. Related parties also include Group companies, cf. note 35, in which Satair A/S has a controlling or considerable influence
Parent company Group
2009/10 2010/11 2009/10 2010/11
Trade and balances with closely related parties consist of:
Sales of goods and services, Group companies 47,350 74,248 - -
Purchases of goods and services, Group companies (29,073) (37,078) - -
Legal assistance provided by Bech-Bruun (36) (338) (36) (338)
Legal assistance provided by LETT - - - -
Dividend from associates - - - 826
Interest income from Group companies 1,189 892 - -
Interest expenses to Group companies (150) (187) - -
Receivable from closely related parties, Group companies 43,412 63,232 - -
Payable to closely related parties, Group companies (5,378) (9,241) - -
Payable to Bech-Bruun (6) 0 (6) 0
Salaries and emoluments to members of Board and Executive Committee are explained in note 4. There have been no other transactions in the course of the year with members of Board and Executive Committee or other related parties.
Notes – Additional information
(USD „000)Note 33 Share-based remuneration – Warrants program
At the end of fiscal 2006/07 Satair established an incentive program in the form of options. As expected at the time of establishment, the pro-gram was changed into a warrants propro-gram at the company‟s Annual Shareholder Meeting in October 2007. The propro-gram has run over three years during which the participating employees in the period 2006/07 to 2010/11 have been allocated individual numbers of warrants depending on the company‟s financial performance. The Board of Directors is not covered by the program.
No. of warrants allocated Parent company Group
Executive Committee
Others Total Executive
Committee
Others Total
July 1, 2010 69,486 27,429 96,915 69,486 50,742 120,228
Allocated for the year - - - -
Cancelled - - - -
June 30, 2011 69,486 27,429 96,915 69,486 50,742 120,228
Value of allocated warrants
2007/08 1,072 484 1,556 1,072 839 1,911
2008/09 362 65 427 362 183 545
2009/10 - - - -
Total costs in accordance with IFRS 2 at
June 30, 2011 1,434 549 1,983 1,434 1,022 2,456
No. of outstanding warrants Parent company Group
Executive Committee
Others Total Executive
Committee
Others Total
July 1, 2010 69,486 27,429 96,915 69,486 50,742 120,228
Allocated for the year - - - -
Cancelled - - - -
Exercised - (3,200) (3,200) - (8,229) (8,229)
Not exercised - - - -
30 June, 2011 69,486 24,229 93,715 69,486 42,513 111,999
Reconciliation:
Adjustment based upon fulfillment of objectives - - - 142,772
Unallocated - - - 75,487
Exercised - - - 8,229
Total authorization - - - - - 338,487
In principle it is possible to allocate up to 338,487 warrants over the three-year program period. The exercise period runs three years from Sep-tember 14, 2010.
The fair value at the time of allocation (time of establishment) of the warrants will be recognized in the income statement in the three years dur-ing which warrants are allocated with a set-off in shareholders‟ equity. At the time of allocation, the fair value amounted to USD 3,579,000 based on the precise fulfillment of the financial objectives, and USD 5,010,000 based on the financial objectives being exceeded and the maximum number of warrants being allocated.
Notes – Additional information
(USD „000)Other assumptions applied in the calculation of the fair value at the time of allocation were:
A volatility of 31% determined on the basis of volatility in the period between May 2004 and May 2007 A dividend rate of 1.75%
A risk-free interest rate of 4.7%
Exercise 3 years after the expiry of the vesting period.
The final allocation of warrants took place on 14 September 2010, and the warrants may be exercised up to and including the last window be-fore the Board of Director‟s approval of the Annual Report 2013/14.
The exercise price of the warrants was reduced from 250.00 to 201.34 in fiscal 2010/11 due to the decision to declare an extraordinary dividend of DKK 50 per share. The rules for the reduction of the exercise price are set out in the underlying contracts.
In 2010/11, a total of 8,229 warrants were exercised. The remaining 111,999 warrants are held by 12 current and former employees.
Note 34 Subsequent events
On 2 August 2011, Airbus made a public offer to the holders of shares and warrants in Satair. The offer to buy expires on 27 September 2011.
The Board of Directors finds that the combination with Airbus offers good strategic opportunities likely to accelerate the fulfillment of Satair‟s strategy. No other subsequent significant events occurred which are likely to affect the position of the Group.
Note 35 Group directory
Subsidiaries Registered office Stake
Satair USA Inc. USA 100%
Satair Pte. Ltd. Singapore 100%
Satair UK Ltd. England 100%
Associates
Blue Sky Alliance GmbH Germany 33.3%
Telair International Services Pte. Ltd. Singapore 29.5%