Matth. Hohner AG

Notes to the Consolidated Financial Statements for Business Year 2010/2011
Sensitivity analysis for foreign exchange risks
In order to analyze foreign exchange risks, the Group performs a sensitivity analysis. In the process the
changes of +10 % and -10 % in foreign exchange rates are simulated and effects on material costs and net
yield are investigated. The simulation is performed for USD, CHF and JPY. For the financial year 2010/2011 the
analysis revealed the following risks affecting the annual result:
Währung
Average exchange rate
for March 31, 2011
Changes in results due to
an exchange rate of
-10 % (TEUR)
Changes in results with
an exchange rate of
+10 % (TEUR)
USD 1.3225 -240 +196
JPY (exchange rate for
December 2010)
116.24 -232 +190
CHF 1.3881 -24 +20
Total -496 +405
Changes in equity correspond to the changes in consolidated net income for the year.
To hedge against interest rate risks, resulting from changes in the level of interest rates for existing liabilities
to banks, there are long-term interest rate arrangements for domestic bank loans eliminating the interest rate
risk. Due to fixed rates of interest as well as interest rate swaps for bank loans with variable interest rates,
there is currently no need to perform sensitivity analysis.
Fair value
The group financial instruments not accounted for at fair value primarily consist of cash equivalents, trade
receivables, other receivables, trade payables, other liabilities, overdraft facilities, and long-term loans.
The carrying amount of cash equivalents and the overdraft facilities approximates fair value. The carrying
amount of receivables and payables based on historical cost and subject to normal trade credit terms also
approximates fair value due to the high liquidity of the instruments.
The fair value of non-current liabilities is based on the currently available interest rates for borrowing with the
same maturity and credit-standing profile. At present the fair value of borrowing corresponds closely to the
net carrying amount.
Depending on their fair value on the balance sheet date, derivative financial instruments are reported
separately on the assets side of the balance sheet (positive fair value) or on the liabilities side of the balance
sheet (negative fair value) respectively. Effective cash flow hedges are recognized directly in equity; otherwise
derivative financial instruments are posted to income.
Book values and fair values of financial instruments
The table below shows the reconciliation of the book values shown in the balance sheet and the IFRS
7-categories and IAS 39-valuation categories respectively, subdivided into recognition of financial instruments
carried at amortized cost and financial instruments valued at their fair value. The fair value of a financial
instrument is defined as the price a third party would be willing to pay for taking over the rights and duties
connected with that financial instrument.
Notes to the CoNsolidated FiNaNCial statemeNts Notes to the CoNsolidated FiNaNCial statemeNts
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