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Software AG GB 2012, englisch

SOFTWARE AG | ANNUAL REPORT 2012 146 sales are transacted. This can result in currency risks and opportunities for Group revenue. The sales-related expenses are in the same currency as the sales themselves, however. This natural hedging relationship is further strengthened in the U.S. due to the fact that parts of our Research and Devel- opment and Global Marketing are based in the U.S. and will continue to be expanded. We further utilize derivative finan- cial instruments to mitigate the effects of exchange rate fluctuations on Group results. Our hedging instruments are used to cover existing foreign currency receivables and pay- ables and anticipated cash flows. Income generated in for- eign currencies from individual Group companies is also hedged against changes in value due to exchange rate fluc- tuations. All exchange rate risks are monitored centrally. Risks from financial instruments Liquidity and cash-flow risks concerning derivative financial instruments are eliminated by the fact that we secure exist- ing balance sheet items or highly likely cash flows. Based on the financial instruments open on the balance sheet date, an increase in the market interest rate level by 100 basis points would have increased Group net income in 2012 by €2.4 million (2011: €1.6 million). Provided conditions such as revenue structure and balance sheet relationships remained constant and no further hedging transactions took place, this approximate correlation could be applied to future fiscal years as well. Under these conditions, a 10-percent decrease in the euro’s value against the U.S. dollar as of December 31, 2012 would have caused Group net income in 2012 to increase by €1.2 million (2011: €1.2 million) and the remaining reserves in equity to remain unchanged product portfolio, and market positioning in the various sub- markets is being realigned depending on the size of the country subsidiaries. We do not yet have enough offshore and nearshore resources for presenting efficient cost struc- tures. We are currently developing them rapidly to increase our pool of available specialists around the world as well as to optimize cost structures. Our Professional Services man- agement team was significantly expanded in fiscal year 2012. All service activities worldwide were moved under common leadership. Personnel risks Employees are the most important asset for an innovative company like Software AG. Therefore, one of the central challenges is having a sufficient number of highly qualified employees at all relevant sites at all times. Software AG’s growth strategy is based on the broadening our staff cover- age in Sales. The demographic trend in some countries is resulting in a reduction in potential growth due to a shortage of qualified human resources. We reduce this risk by enhancing our personnel development programs and our remuneration systems as well as through high-potential programs for the targeted further development of managers. In addition, we are working on balancing high and low-cost locations. Financial risks Exchange rate risks The Software AG Group is exposed to exchange rate risks through our global business activities. Our sales organiza- tions operate in the currency of the countries in which the

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