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

192Consolidated Financial Statements of gildemeister Aktiengesellschaft: Notes to the Consolidated Financial Statementsconsolidated financialstatementsInterest rate risksInterest rate risks include any potential positive or negative impact of interest ratechanges on the results, equity or cash flow during the current or future reporting periods.At gildemeister interest rate risks are essentially in connection with financial liabilities.gildemeister hedges this risk through concluding interest rate swaps.Interest hedging instruments in the form of swaps are used to eliminate the effectsof future changes in interest rate on the cost of financing loans that are subject to avariable interest rate.To hedge against future interest rate changes from the borrowers’ notes, gildemeisterhas concluded interest rate swaps, which serve to secure a fixed interest rate until theend of the term. Interest rate swaps for a nominal total volume of € 140,000 k wereconcluded for a hedged interest rate of 4.98% to 5.02% with a term up to 29 May 2013.The interest rate swaps bind gildemeister to pay a fixed rate interest over the term andfor the volume concluded. To offset this, gildemeister receives a euribor 6-month ratepayment from the contractual partner to the interest rate swap.Furthermore, gildemeister has concluded a further interest rate swap for a nominalamount of € 60,000 k and a hedged interest rate of 4.79% with a term up to 29 May2015. The interest rate swaps bind gildemeister to pay a fixed rate of interest over theterm and for the volume concluded. To offset this, gildemeister receives a 6-montheuribor rate payment from the contractual partner to the interest rate swap.Thus the company is protected against rising short-term interest rates yet, in return,does not benefit from falling short-term interest rates.If the interest rate at 31 December 2010 had been 1% lower (higher), the reservesfor derivatives in equity and the fair value of the interest rate swap would have been€ 5,161 k (previous year: € 7.038 k) lower (€ 6,947 k higher (previous year: € 8,807 k)).For financial instruments with a variable rate of interest – mainly this refers to thesyndicated loans of € 232.0 million – the interest rate risk will be measured with the aidof cash flow sensitivity. Based on the financial instruments with a variable interest rate,existing interest hedges have been deducted. A 1% increase in interest rates pertainingto the non-hedged portfolio at the end of the reporting period would result in an increasein interest expense of € 1.0 million (previous year: € 1.0 million).Within the scope of adapting the existing financing agreement, interest marginshave risen markedly and allow for the changed credit risk (see page 195). The newborrowers’ notes bear interest at 6-month euribor plus margin. The interest rate swapsconcluded serve to hedge against future changes in interest rates of the borrowers’ notes.