38. Non-current and current financial liabilities

Liabilities to banks also include interest of € 1,017 thousand accrued up to the balance sheet date (previous year: € 1,077 thousand). In the previous year, transaction costs of € 71 thousand, incurred by taking out loans, increased the liabilities to banks for the duration of the loan.

The liabilities from leases represent the discounted value of future payments for movable non-current assets. The increase was a result of the initial application of IFRS 16.

Other loans comprise a € 6.0 million loan granted to a minority shareholder (previous year: € 7.8 million) as well as promissory note loans of € 9.5 million (previous year: € 9.5 million) issued to other creditors.

Buildings, surfacing and movable non-current assets with a carrying amount of € 5,251 thousand (previous year: € 7,333 thousand) have been pledged as collateral for interest-bearing loans. The collateral agreements provide that the assets are transferred to the banks until the loans and interest have been repaid in full and that they have a right to dispose of the assets if the borrower is in arrears with payments of interest and principal.

The liabilities towards employees consist primarily of wages and salaries.

The other financial liabilities include a settlement obligation to other shareholders. This entitlement to a financial settlement amounts to € 65,662 thousand for the financial years 2019 and 2020 (previous year: € 61,300 thousand for the financial years 2018 and 2019), see also Note 6 and Note 35.

The floating interest rates are EURIBOR rates with maturities of one to six months.

Interest rates of 0.5 to 1.4 % p.a. (previous year: 1.0 to 2.3 % p.a.) were used to measure the fair value of fixed interest-bearing loans. The interest rates are derived from the risk-free rate depending on maturity plus a premium according to the credit rating and maturity. They therefore constitute market rates. The average interest rate for the reported liabilities from bank loans was 1.6 % in the reporting year (previous year: 1.7 %).

As a result of borrowing, certain affiliates have covenants linked to key balance sheet figures and collateral. Violating these covenants would authorise the lender to demand additional collateral, a change to the conditions or the repayment of the loan. In order to prevent such steps, HHLA constantly monitors compliance with the covenants and, where required, implements measures to ensure that all conditions of the loan are met. As of the balance sheet date, the corresponding borrowings totalled € 72,401 thousand (previous year: € 84,861 thousand).