AT&S World

Consolidated Financial Statements as of 31 March 2011
70
II. Risk Report
Financial risks
Risk management of financial risks is carried out by a central
treasury department (Group Treasury) under policies approved
by the Management Board. Responsibilities, authorisations and
limits are governed by internal guidelines. Group Treasury identifies,
evaluates and hedges financial risks in close cooperation
with the Group’s operative units. The Board provides written
principles for overall risk management, as well as written policies
covering specific areas, such as foreign exchange risk, interest
rate risk, credit risk, use of derivative financial instruments
and non-derivative financial instruments, and investing excess
liquidity.
The risk management of financial risks is incorporated in the
group-wide risk management and thus part of the timely risk
reporting to executive employees, Management and Supervisory
Board.
Liquidity risk
At the balance sheet date, the Group has liquidity reserves in
the amount of EUR 118.8 million, EUR 18.2 million of which is
accounted for by cash (equivalents) and securities held for trading
and available-for-sale securities, and EUR 100.6 million by
available unused credit facilities. Thus, the liquidity reserves
increased by EUR 31.5 million year-on-year. In the past financial
year, the secured credit lines in particular were raised from
EUR 167.7 million to EUR 243.7 million, and thus the unused
committed credit lines amount to EUR 88.4 million.
The Company is authorized, subject to the approval of the Supervisory
Board, to issue up to 12,950,000 new shares from authorized
capital, as well as convertible bonds in a total nominal
amount of up to TEUR 100,000, and to sell treasury shares (at the
balance sheet date the Group holds 2,577,412 treasury shares).
With respect to a detailed explanation of the options regarding
capital measures, reference is made to Note 22 “Share capital”.
The Group has a clearly positive operating cash flow. The net
cash flow from operating activities for the financial year 2010/11
amounts to EUR 70.7 million (2009/10: EUR 47.0 million). Thus,
most of the investments made in the past financial year could
be financed from the operating cash flow.
With regard to liquidity risks, reference is also made to the detailed
disclosures in Note 16 “Financial liabilities”.
Financial market risks
Detailed information on market risks and derivative financial instruments
is contained in Note I.B.l. “Summary of significant accounting
policies: Derivative financial instruments” and in Note
19 “Derivative financial instruments”. The Group uses derivative
financial instruments, such as forward contracts, options and
swaps, exclusively for hedging purposes.
Interest rate risk
Minor interest rate risks on the assets side of the balance sheet
relate to investments in securities. Most of the other liquid resources
are invested short-term and all securities are available
for sale, Reference is made to Note 13 “Financial assets” and Note
14 “Cash and cash equivalents”.
On the liabilities side, 83% of the borrowings are subject to fixed
interest rates, taking into account interest rate hedging instruments,
and most of the remaining variable interest rate loans
(17%) have maturities of less than one year. Reference is made
to Note 16 “Financial liabilities”.
Currency risk
Transaction, translation and economic risk are constantly
monitored to guard against currency risk. Transaction risk is
mostly internally managed by closing positions (netting), in some
cases derivative financial instruments are used to hedge open
positions.