Group Management Report Corporate Governance Environment, Safety, and Corporate Social Responsibility Consolidated Financial Statements 131 Currency Risk: The Company is subject to currency risk associated with its international opera- tions. Currency risk occurs for financial instruments which are denominated in another than the functional currency. Foreign currency translation risk resulting from the consolidation of foreign subsidiaries is not considered. For hedging instruments used by the Company to limit the exposure to foreign currency rate fluctuations see “Hedging”. The main currency fluctuation risks relate to exchange rate changes of the U.S. Dollar and the Japanese Yen. The following table provides the effects of a 10 % quantitative change of currency exchange rates on profit or loss and on the item “Derivative financial instruments” in other comprehensive income (see table “Foreign Currency” in note 2): Effect on profit or loss Change in other comprehensive income exchange rate plus 10 % exchange rate minus 10 % exchange rate plus 10 % exchange rate minus 10 % U.S. Dollar Derivatives Dec. 31, 2014 9,832 (9,832) 3,230 (3,230) Dec. 31, 2015 12,729 (12,729) 3,931 (3,931) Other financial instruments Dec. 31, 2014 (14,579) 14,579 – – Dec. 31, 2015 (15,577) 15,577 – – Total Dec. 31, 2014 (4,747) 4,747 3,230 (3,230) Dec. 31, 2015 (2,848) 2,848 3,931 (3,931) Japanese Yen Derivatives Dec. 31, 2014 900 (900) 2,095 (2,095) Dec. 31, 2015 1,307 (1,307) 2,408 (2,408) Other financial instruments Dec. 31, 2014 (1,512) 1,512 – – Dec. 31, 2015 (1,674) 1,674 – – Total Dec. 31, 2014 (612) 612 2,095 (2,095) Dec. 31, 2015 (367) 367 2,408 (2,408) Interest Rate Risk: The Company is exposed to changes in interest rates. The majority of the interest-sensitive assets and liabilities are marketable securities (money market funds) and debt. For those assets or liabilities that are variable rate instruments, changes in the interest rate will result in changes of the expected cash flows and will affect profit or loss. The fair value of fixed interest rate financial assets classified as available-for-sale and measured at fair value is affected by changes in the interest rate and the resulting change in the fair value is reported in other comprehensive income. The following table shows the profit or loss effect as well as changes in other compre- hensive income on interest-bearing assets, liabilities and interest rate swaps resulting from a change in the average market rate of interest of 50 basis points. The sensitivity analysis was performed under the assumption that the interest rate may decrease to below zero percent.
E_ALT_GB15_160317_online
To see the actual publication please follow the link above