A rePort: How is a head- liner actually produced? friedrich ... - polytec

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Other provisions disclosed under Other long-term and short-term
liabilities were made if foreseeable risks and uncertain obligations
exist until the preparation of the balance sheet. The amounts refl ect
the most probable amount based on a careful assessment of the
circumstances. Provisions for future expenditures are not accrued.
In accordance with IFRS 3, contingent liabilities are also disclosed
under this item.
14. Recognition of Financial Instruments
Financial assets and liabilities are disclosed in the balance sheet,
insofar as the group becomes a contractual party to a fi nancial
instrument.
Financial assets are derecognised if the contractual rights arising
from the assets are ending or if such assets are transferred,
including all essential rights and obligations arising therefrom.
Financial liabilities are derecognised if the contractual obligations
were met, cancelled or ended. On principle, purchases and sales
of fi nancial instruments common in the market are recognised in
the balance sheet as of the date of fulfi lment.
15. Derivative Instruments
According to the fi nancial policies of the group, fi nancial instruments
are held for hedging purposes and to optimise the net interest
result of the group. The following pending derivative instruments
exist as of the balance sheet of December 31, 2006:
The following pending TYPE derivative CUR- instruments LONG- exist NOMINALE as of the FAIR bal-
RENCY
ance sheet of December 31, 2006:
TERM IN TEUR VALUE
IN TEUR
Forward
exchange
dealing
Interest
CALL EUR July 2009 1,847.1 11.0
rate-swap
Currency
- EUR Dec. 2011 5,000.0 3.6
future CALL EUR March 2007 2,100.0 9.6
The EUR-Call forward exchange dealing serves as hedging activity
against currency exchange risks posed to the groups business
activity in South Africa.
The interest option has been concluded as a hedging activity
against a specifi ed bank liability of POLYTEC GROUP (Micro-
Hedge).
POLYTEC
ANNUAL REPORT 2006
NOTES
The interest swap cannot be allocated to a specifi c balance sheet
item, but to a portfolio of fi nancial liabilities.
If no market prices were available, recognised valuation methods,
especially option price models and analyses of discounted
expected cash fl ows, were used to determine the fair values.
16. Revenue and Expense Recognition
Revenue from the sale of products and goods is recognised when
the risks and opportunities are transferred to the buyer. Operating
expenses have an effect on the result when the received services
are utilised or at the time when such are provided.
17. Financial Result
Financial expenditure comprise the interest and interest equivalent
expenses arising for debt fi nancing and fi nance leasing transactions
as well as the interest component of the variation of the
obligations to employees.
Financial gains comprise the interest, dividends and similar gains
realised from the assessment of fi nancial means and the investments
in fi nancial assets. Interest received are accounted proportionally
to time and according to the effective yield of the asset.
Dividend yields are realised at the time when the legal entitlement
to such exists.
Gains and losses from the disposal of fi nancial assets, losses
from the impairment of fi nancial assets, fi nancing related currency
exchange gains and losses and results from hedging activities are
reported in the fi nancial result.
18. Uncertainties from Estimations
and Assumptions
Estimates and assumptions must be made to a certain extent in
the Consolidated Financial Statements and such might affect the
assets and liabilities reported in the balance sheet, the statement
of other obligations on the balance sheet date and the recognition
of income and expenses during the reporting period. The actual
amounts arising in the future, may differ from these estimates.
Especially the assumptions referring to future cash fl ows from the
cash-generating units which are based on middle-term budgets of
the group may prove to be incorrect and trigger effects on assets
(especially goodwill) in the future.