Values
Values
Values
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Company | Group Management Group Financial | Corporate Governance | Report of the | Boards/Mandates | Additional Information<br />
Report Statements Supervisory<br />
Board<br />
Income Statement<br />
Statement of Comprehensive Income<br />
Balance Sheet<br />
Cash Flow Statement<br />
Statement of Changes in Equity<br />
Notes<br />
The following table provides an overview of the carrying<br />
amounts of the Group’s derivative fi nancial instruments, which<br />
correspond to their fair values. A distinction is made between<br />
Financial Instruments<br />
Financial Risk Management<br />
Th e Bertelsmann Group is exposed to various forms of fi nancial<br />
risk through its international business operations. Th is includes<br />
above all the eff ects of exchange and interest rate movements.<br />
Bertelsmann’s risk management activities are designed to eff ectively<br />
mitigate these risks.<br />
Th e Executive Board establishes basic risk management<br />
policy, outlining general procedures for hedging currency and<br />
interest rate risk and the utilization of derivative fi nancial instruments.<br />
Bertelsmann Annual Report 2009<br />
derivatives that are included in an eff ective hedging relationship<br />
in accordance with IAS 39 and those that are not.<br />
Derivative Financial Instruments<br />
Carrying Carrying<br />
amount as of amount as of<br />
in € millions<br />
Assets<br />
Forward contracts and currency swaps<br />
12/31/2009 12/31/2008<br />
Without hedge relation 13 67<br />
In connection with cash fl ow hedges<br />
Currency options<br />
31 106<br />
Without hedge relation<br />
Interest rate swaps<br />
– 1<br />
Without hedge relation 18 –<br />
In connection with cash fl ow hedges – –<br />
Other in connection with cash fl ow hedges<br />
Equity and Liabilities<br />
Forward contracts and currency swaps<br />
3 –<br />
Without hedge relation 13 25<br />
In connection with cash fl ow hedges<br />
Interest rate swaps<br />
34 47<br />
Without hedge relation – –<br />
In connection with cash fl ow hedges 6 5<br />
Other in connection with cash fl ow hedges – –<br />
RTL Group uses currency forwards to hedge the exchange<br />
rate risk relating to the purchase of program rights and output<br />
deals. RTL Group hedges between 80 and 100 percent of<br />
the future cash fl ows from the purchase of program rights in<br />
foreign currencies, which represent a fi xed obligation (within<br />
one year) or a future transaction with a high probability of<br />
occurrence and between 20 percent and 85 percent of the<br />
longer-term (two to fi ve years) expected future transactions<br />
under output deals. Th e derivatives used for this purpose<br />
are recognized as hedging instruments in connection with<br />
cash fl ow hedges. Th e eff ective portion of the changes in the<br />
fair value of hedging instruments is parked in OCI until the<br />
eff ects of the hedged items are recognized in profi t or loss.<br />
Th e portion remaining in OCI at December 31, 2009, will<br />
thus impact the income statement in fiscal years 2010<br />
through 2015. Th e ineff ective portion of cash fl ow hedges<br />
amounted to €-12 million as of December 31, 2009 (previous<br />
year: €-9 million).<br />
Th e Corporate Treasury and Finance department advises subsidiaries<br />
on operating risk and hedges risks using derivative fi -<br />
nancial instruments as necessary. However, subsidiaries are not<br />
obliged to use the services provided by this department for their<br />
operating risks. Certain subsidiaries, particularly RTL Group,<br />
have their own treasury departments, which are required to<br />
report their hedging activities to the Corporate Treasury and<br />
Finance on a quarterly basis.<br />
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