New Wave Group AB Annual report 2017 EN | Page 85

FINANCIAL INFORMATION THE GROUP
Accounts receivable ( SEK million )
2017
2016
Exposure
1 016.0
944.0
Credit risk reserve
33.2
37.8
Carrying amount
982.8
906.2
A description of credit risk exposures is given in the table below :
As of 31 December
Number of
Percentage of
Percentage of
2017
customers total customers
portfolio
Exposure < 1 MSEK
28 996
95.1
68.0
Exposure 1 - 5 MSEK
636
2.1
18.5
Exposure > 5 MSEK
839
2.8
13.5
Total
30 471
100.0
100.0
As of 31 December
Number of
Percentage of
Percentage of
2016
customers total customers
portfolio
Exposure < 1 MSEK
28 808
93.1
66.2
Exposure 1 - 5 MSEK
763
2.5
22.4
Exposure > 5 MSEK
1 389
4.5
11 . 5
Total
30 960
100.0
100.0
The provision for doubtful receivables has been changed as follows :
Provision for doubtful receivables ( SEK million )
2017
2016
Provision at the beginning of the year
37.8
41.8
Reclassification
0.0
0.0
Additional provision
10.2
15.7
Confirmed losses
-14.1
-20.9
Translation difference
-0.7
1.2
Provision at year-end
33.2
37.8
Apart from the provision for doubtful receivables , there is no impairment of financial instruments .
Age analysis
2017
2016
SEK million < 30 days
912.0
835.3
30 – 90 days
59.5
48.5
> 90 days
11 . 3
22.5
Total
982.8
906.2
OTHER ASSETS Other assets include loan receivables , derivatives and liquid assets . Credit risk related to balances at banks and other financial institutions is managed by the Treasury center in accordance with the Group ' s finance policy . The Group deals only with established financial institutions . Other receivables and accrued income , which represents 6.6 ( 4.4 ) % of the total credit risk , is managed locally on an ongoing basis in accordance with the finance policy and with support from the central finance function .
OTHER RISKS
PURCHASING MARKET New Wave Group ’ s purchases are mainly made in China , Bangladesh , India and Vietnam . Political and socioeconomic changes could have an impact on New Wave Group . By maintaining a high level of preparedness and by making purchases in several different countries in Europe as well as Asia , New Wave Group limits the economic risk which would arise if purchases were made from a single country .
STRONG GROWTH The continued expansion planned by New Wave Group will put strong pressure on management and employees . Wrong recruitments , organizational problems , the departure of key individuals , etc could delay and affect the progress of the expansion . The crucial factor determining the pace of expansion is that earnings expand at the same pace , which could result in uneven growth rates . New Wave Group is allocating resources to internal management training programs , mentorship schemes and annual meetings of management to guarantee future leadership and spread New Wave Group ’ s values .
FASHION TRENDS – CHANGES IN ECONOMIC CONDITIONS New Wave Group devotes significant resources to ensure good design and quality . Still , due to the rapid pace of change in the fashion industry , the company cannot exclude the possibility of temporary declines in sales for certain collections . However , New Wave Group has a limited risk , as the fashion content is lower in the Corporate Promo operating segment and the promo sales channel , while the Sports & Leisure operating segment is focused on areas that are less sensitive to changes in fashions , such as Craft functional underwear and Seger socks . New Wave Group ’ s goal is to ensure that the promo sales channel continues to account for 60 – 80 % of total sales .
FOREIGN EXPANSION The Group intends to establish a presence in additional foreign countries only when previous foreign operations are generating satisfactory profits . The Board deems that this strategy represents a good compromise between growth and reduced risk . New Wave Group believes it is very hard to determine the exact timetables and budgets for new foreign ventures , which could entail a risk of initial losses . However , the Board deems that the company is well equipped for the new ventures that are being planned .
ENVIRONMENT The Group ’ s operations may involve environmental commitments , but the Board ’ s and the management ’ s assessment is that these , to the extent that they may have an impact on the Group ’ s financial position , have been considered in the present financial statement .
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