DHL 2008 Annual Report Download - page 184

Deutsche Post World Net Annual Report 2008
Currency risk and currency management
 e Group’s global activities expose it to currency risks from
planned and completed transactions in foreign currencies. All cur-
rency risks are recognised and managed centrally in Corporate
Treasury. For this purpose, all Group companies report their foreign-
currency risks to Corporate Treasury, which calculates a net position
per currency on the basis of these reports, hedging it externally where
applicable. Currency forwards, currency swaps and currency options
are used to manage the risk.  e notional amount of outstanding
currency forwards and swaps was around  , million as at the
reporting date (previous year:  , million).  e corresponding fair
value was –  million (previous year: –  million).  ese trans-
actions were used to hedge planned and recorded operational risks
and to hedge internal and external  nancing and investments. Fair
value hedge accounting was not used substantially.
In addition, currency options with a notional amount
of   million (previous year:   million) and a fair value of
  million (previous year: –  million) were used to hedge oper-
ational currency risks and risks arising from investing activities.
Derivative  nancial instruments entail both rights and obli-
gations.  e contractual arrangement de nes whether these rights
and obligations can be o set against each other, thus resulting in a
Maturity structure – remaining maturities
€ m Less than More than
1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years 5 years
As at 31 December 2008
Derivative receivables – gross settlement
Cash outfl ows – 4,332 – 111 – 43 – 50 – 21 – 153
Cash infl ows 4,763 128 54 56 21 180
Net settlement
Cash infl ows 40 0 0 0 0 0
Derivative liabilities – gross settlement
Cash outfl ows – 5,461 – 72 – 69 – 47 – 12 – 193
Cash infl ows 4,914 52 51 35 9123
Net settlement
Cash outfl ows – 13 00000
As at 31 December 2007
Derivative receivables – gross settlement
Cash outfl ows – 1,685 – 16 – 15 – 15 – 16 – 160
Cash infl ows 1,730 16 16 16 16 191
Net settlement
Cash infl ows 720000
Derivative liabilities – gross settlement
Cash outfl ows – 1,810 – 116 – 185 – 113 – 91 – 212
Cash infl ows 1,739 97 166 94 77 180
Net settlement
Cash outfl ows – 6 – 7 0 0 0 0
net settlement or whether both parties to the contract will have to
fully perform under their obligations (gross settlement).  e matu-
rity structure of payments under derivative  nancial instruments
is as follows:
 e Group also held cross-currency swaps with a notional amount
of   million (previous year:   million) and a fair value of
–  million (previous year: –  million) to hedge long-term for-
eign currency  nancing.
Currency risks resulting from translating assets and liabili-
ties of foreign operations into the Group’s currency (translation risk)
were not hedged as at  December .
 e fair value of currency forwards was measured on the
basis of current market prices, taking forward premiums and dis-
counts into account.  e currency options were measured using the
Black-Scholes option pricing model. Of the unrealised gains from
currency derivatives that were recognised in equity as at  Decem-
ber  in accordance with  , a gain of   million (previous
year: loss of   million) is expected to be recognised in income in
the course of .
  requires a company to disclose a sensitivity analysis,
showing how pro t or loss and equity are a ected by hypotheti-
cal changes in exchange rates at the reporting date. In this process,
the hypothetical changes in exchange rates are analysed in relation
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