Download - Salzgitter AG

The valuation of securities with no effect on income developed as follows:
in T€ FY 2007 FY 2006
As of January 1 4,962 7,332
Addition 166 1,196
Write-up 26,897 –
Disposal 1,139 3,439
Valuation allowance – 127
As of December 31 30,886 4,962
The write-up of € 26.9 million in the financial year 2007 essentially relates to the shares in an Indian
manufacturing company in the tubes industry.
In accordance with IAS 39, the Salzgitter Group applied hedge accounting exclusively to forward
exchange contracts in the financial year 2007. In the process, the currency risks were hedged using
cash flow hedges. The respective market values were as follows:
Positive market values in T€ 31/12/2007 31/12/2006
Forward exchange contracts – cash flow hedges 11,593 3,899
Interest rate swaps – cash flow hedges – 45
Total 11,593 3,944
Negative market values in T€ 31/12/2007 31/12/2006
Forward exchange contracts – cash flow hedges 2,766 130
The underlying transactions that were secured using cash flow hedges will generally affect income
within 12 months of the reporting date. A small proportion will affect income within the next three
years.
The development of the cash flow hedge reserve, which was posted to equity with no effect on
income, was as follows:
in T€ FY 2007 FY 2006
As of January 1 3,434 1,948
Additions 7,053 959
Disposals 1,660 –527
As of December 31 8,827 3,434
The effectiveness of the hedging arrangements is examined as of every reporting date. This involves
comparing the cumulative change in the value of the underlying transaction with the cumulative
change in the value of the hedging transaction. In the reporting year, slight ineffectivities arose from
cash flow hedges.