ANNUAL REPORT 2011 - Kuehne + Nagel

system centralised at the head office. Given that the Group’s
hedging activities are limited to hedges of recognised foreign
currency monetary items, hedge accounting under IAS 39 is not
applied. The outstanding derivative contracts as of December
31, 2011, have mainly been entered into to off-set the foreign
exchange effect on investments in foreign currency debt instruments
(see note 33). As of the 2011 and 2010 year-end there
Consolidated Financial Statements 2011 _ _ _ _ _ _ Other Notes
were no material derivative instruments outstanding. Forecast
transactions are not hedged. Likewise, investments in foreign
subsidiaries are not hedged as those currency positions are considered
to be long-term in nature.
The Group’s exposure to foreign currency risk was as follows as
of year-end:
2011 2010
CHF million EUR USD GBP EUR USD GBP
Cash and cash equivalents 98 66 1 279 74 –
Financial investments 187 – – – – –
Trade receivables 29 223 8 26 193 1
Trade payables –33 –60 –4 –17 –87 –2
Gross balance sheet exposure 281 229 5 288 180 –1
The majority of all trade related billings and payments as well
as all payments of interest-bearing liabilities are done in the
respective functional currencies of the Group entities.
Sensitivity analysis
A 10 per cent strengthening of the CHF against the following
currencies on December 31, would have increased profit by the
amounts shown below. A 10 per cent weakening of the CHF
against the following currencies on December 31, would have
had the equal but opposite effect on the amounts shown below.
This analysis assumes that all other variables, in particular interest
rates, remain constant.
2011
CHF million 1 CHF/EUR 1 CHF/USD 1 GBP/EUR 1 GBP/USD 1 USD/EUR
Reasonably possible change +/–
in per cent 10.0 10.0 10.0 10.0 10.0
Positive effect on P/L 28.1 23.0 19.2 15.7 30.0
Negative effect on P/L –28.1 –23.0 –19.2 –15.7 –30.0
The impact on the profit or loss is mainly a result of foreign
exchange gains or losses arising on translation of trade receivables,
trade payables, investments in debt securities and cash
and cash equivalents in foreign currencies. The currency risk on
investments in foreign currency debt securities has mainly been
offset by foreign exchange contracts entered into. There would
not be an impact on other comprehensive income as the Group
does not have any securities classified as available for sale or
applies cash flow hedge accounting.
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