PDF (7.3 MB) - GILDEMEISTER Interim Report 3rd Quarter 2012

190Consolidated Financial Statements of gildemeister Aktiengesellschaft: Notes to the Consolidated Financial StatementsAt the end of the reporting period, gildemeister also held forward foreign exchange contractsheld for trading purposes, which, although they do not fulfil the strict requirementsof hedge accounting pursuant to ias 39, make an effective contribution to the securingof financial risks pursuant to the principles of risk management. For the hedging ofcurrency risks recognised as monetary assets and liabilities, gildemeister does not usehedge accounting pursuant to ias 39, as the realised profits and losses from the underlyingtransactions from the currency translation pursuant to ias 21 are recognised in theincome statement at the same time as the realised profits and losses from the derivativesapplied as hedging instruments. In the event that third parties do not fulfil their obligationsarising from forward foreign exchange contracts, as at the end of the reporting period,gildemeister had a deficit risk amounting to € 2,148 k (previous year: € 1,582 k).Interest rate swaps with a nominal volume of a total of € 200,000 k have a remainingterm of up to five years. In the previous year, Interest rate swaps with a volume of€ 140,000 k had a remaining term of up to five years. One interest rate swap with anominal volume of € 60,000 k had a remaining term of more than five years.All existing forward exchange contracts as of the closing date with a nominal volumeof € 153,030 k have a remaining term of up to one year (previous year: € 88.415 k). In theprevious year, forward exchange contracts of a volume of € 7,204 k had a remaining termof more than one year.In the financial year 2010, expenses arising from the market valuation of financialinstruments allocated to cash flow hedges in an amount of € 16,774 k (previous year:€ 18,902 k) were allocated to equity and an amount of € 191 k (previous year: € 691 k)was removed from equity and recognised in profit or loss for the reporting period. It wasrecognised in the income statement under exchange rate and currency profits or in theexchange rate and currency losses. Neither in the financial year nor in the previous yearwas there any ineffectiveness.consolidated financialstatements36 risks fromfinancialinstrumentsRisks from financial instrumentsCurrency and interest rate fluctuations can lead to considerable profit and cash flow risksfor gildemeister. For this reason, gildemeister centralises these risks as far as possibleand manages them with a view to the future and by using derivative financial instruments.The controlling of risks is based on regulations that are valid throughout the group and inwhich the targets, principles, responsibilities and competencies are defined.Currency risksIn its global business activities gildemeister is exposed to two types of currency risks.Transaction risks arise through changes in value of future foreign currency payments dueto exchange rate fluctuations in individual accounts. In the gildemeister group bothpurchases and sales are made in foreign currencies. To hedge currency risks arising fromactivities within the gildemeister group, foreign exchange futures contracts and optionsare used. The conclusion and processing of derivative financial instruments is based onbinding internal regulations defining scope, responsibilities, reporting and accounting.