Annual Report 2010/11 - Sonova

128
foreign currency sensitivity analysis
a 5% strengthening/weakening of the following currencies against the swiss franc as of march 31, 2011 and 2010 (for
foreign currency rates refer to note 34) would create an impact on income after taxes and equity as shown in the following
table. the analysis assumes all other variables to remain constant.
1,000 cHf 2010/11 2009/10 2010/11 2009/10
impact
on income
after taxes
impact
on equity
change in Usd/cHf +5% 2,548 2,006 19,214 16,402
change in Usd/cHf –5% (2,548) (2,006) (19,214) (16,402)
change in eUR/cHf +5% 3,608 3,894 9,309 8,290
change in eUR/cHf –5% (3,608) (3,894) (9,309) (8,290)
interest rate risk
the Group has only limited exposure to interest rate changes. a substantial portion of the cHf 470 million loan, entered
into in connection with the acquisition of advanced Bionics, has already been repaid. for the long-term bank loan of
cHf 230 mil lion, the Group entered into a swap agreement that protects the Group against raising interest rates, as
the floating interest rates are swapped against fixed rates. as the conditions of the swap are in line with the underlying
conditions of the financing agreement, the swap can be considered as 100% effective and hedge accounting has been
applied. as of march 31, 2011, the negative fair value of the interest rate swap amounts to cHf 1.9 million and represents
the theoretical replacement value. if interest rates had been 0.5% lower/higher, the valuation of the swap would have
changed by approximately cHf 4 million and the equity would have been cHf 4 million lower/higher. as of march 31,
2011, the remaining short-term portion of the bank loan of cHf 40 million is affected by interest rate changes. if interest
rates for the financial year 2010/11 had been 1% higher/lower, income after taxes would have been cHf 0.4 million
lower/higher.
except as noted above, no derivative instruments have been used to hedge against changes in interest rates. However,
the interest situation and hedging possiblities are continuously monitored.
the most substantial interest exposure on assets relates to cash and cash equivalents with an average interest-bearing
amount for the financial year 2010/11 of cHf 237 million (previous year cHf 252 million). if interest rates during the
financial year 2010/11 had been 1% higher/lower on these accounts, income after taxes would have been cHf 2.1 million
higher/lower (previous year cHf 2.2 million).
other market risks
Risk of price changes of raw materials or components used for production is limited. a change in those prices would not
result in financial effects being above the Group’s risk management tolerance level. therefore, no sensitivity analysis has
been conducted.
the Group holds certain marketable securities which are classified as “financial assets at fair value through profit or loss”
and mainly consist of quoted bonds and equity funds. these investments (0.4% of total assets as of march 31, 2011) are also
below the Group’s risk management tolerance level. therefore no sensitivity analysis has been conducted.