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Software AG GB 2012, englisch

SOFTWARE AG | ANNUAL REPORT 2012 220 The net gain/loss from loans and receivables was only affected significantly by currency translation effects. The net gain from derivatives without qualifying hedging relationships amounted to €3,101 thousand (2011: €5,987 thousand) in fiscal 2012. The net loss from derivatives designated as cash flow hedges was included in the income statement and amounted to €1,345 thousand (2011: €178 thousand) in 2012. Market risk and the use of derivative financial instruments As a result of its international operating activities as well as its investing and financing activities, Software AG is exposed to various financial risks. Management continuously monitors these risks. Derivative financial instruments are used in accordance with internal guidelines in order to reduce risks arising from changes in interest rates, exchange rates, cash flows, or the value of cash investments. Derivatives are generally entered into to hedge existing balance sheet exposures and highly probable forecast transactions. a) Interest rate risk The Company is subject to interest rate fluctuations that affect both assets and equity and liabilities on the balance sheet. On the assets side, income from investing cash and cash equivalents and future interest income resulting from discounting non-current receivables are particularly subject to interest rate risk. On the equity and lia- bilities side, interest expenses for current and non-current financial liabilities as well as pension provisions and other items related to long-term borrowings are especially exposed to interest rate risk. The sensitivity analysis required by IFRS 7 relates to interest rate risk arising from monetary financial instru- ments bearing variable interest rates. Based on the current structure of the interest-bearing financial instruments, a hypothetical increase in the market interest level of 100 basis points would raise earnings by €2,388 thousand (2011: €1,593 thousand).