Nabaltec_E_GB2016

OTHER DISCLOSURES 101 In accordance with IFRS 7, foreign exchange risks are presented using sensitivity analyses, which show the effects on pre-tax earnings (due to changes in the measurement of financial assets and liabilities with effect on profit and loss) and possibly shareholders’ equity of the Euro going up or down in value relative to all other foreign currencies. These analyses focus on financial instruments which are denominated in a currency other than the local functional currency, and which are monetary in nature. Accordingly, differences arising from the transla- tion of foreign statements into the Group currency, Euros, due to changes in exchange rates are not recognized, in accordance with the requirements of IFRS 7. In contrast to the year before, shareholders’ equity as of the reporting date was affected by changes in the fair value of currency derivatives intended to hedge future cash flows. 2016 USD USD 2015 USD USD Rate change in % Impact on pre-tax earnings in TEUR Impact on shareholders’ equity* in TEUR +10 –10 +10 –10 471 –471 497 –497 852 –1,430 0 0 * Not including the impact on pre-tax earnings Interest rate risk The Group’s exposure to the risk of fluctuations in market interest rates results primarily from financial accounts payable to banks carrying variable interest rates. The Group’s interest expenses are managed through a combination of fixed-interest and variable-interest debt. Interest rate swaps are used to hedge against interest rate risks arising from positions carrying long-term variable interest rates, in which the difference between fixed-interest and variable-interest cash flows is exchanged with the counterparty at defined intervals based on a predefined notional amount. Interest rate risks are modelled in accordance with the requirements of IFRS 7 using sensitivity analyses, which show the effects of hypothetical changes in market interest rates on current interest payments, income and expenses as follows in the context of pre-tax earnings and possibly shareholders’ equity (from the subsequent measurement of interest rate derivatives designated as effective cash flow hedges): S T N E M E T A T S L A I C N A N I F D E T A D I L O S N O C Annual Report 2016 | Nabaltec AG ||||

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