Page 49 - Hoftex Annual Report 2018 EN

(31) Contingent liabilities
Letter to Shareholders Supervisory Board Report Group Management Report Consolidated Financial Statements Annexes
Bills of exchange 0 81 Guarantee obligations 120 120
Based on past experience, we do not expect any claims arising from contingencies.
(32) Other financial commitments
The other financial commitments include EUR 5,513 thousand (prior year: EUR 6,123 thousand) re- sulting from leasing contracts and purchase commitments.
2018 2017
(33) Derivative financial instruments
HOFTEX GROUP AG will only utilise derivative financial instruments that are clearly designated as qualified hedging instruments and where the underlying transaction and the hedging instrument are combined in a so-called net hedge. For the purpose of hedging against the interest rate risk on variable-interest long-term loans, the Company entered into six interest swaps with a combined value of EUR 28,500 thousand to minimise the risk of future interest rate increases. With a term of 9 months and 36 months, the interest rate hedges currently held have a term less than those of the underlying transactions and have been combined to create net hedges. As of the balance sheet date, the Com- pany was not obliged to recognise provisions arising from the net hedges for these transactions; in other words, the Company was able to avoid setting aside provisions for contingent losses on pending transactions, corresponding to the negative fair values in the amount of EUR 350 thousand.
On 31 December 2018, the fair value of the Group’s interest rate hedges is as follows:
Fair value Nominal value Carrying value Fair value Swap rate
30 Sept. 2019 EUR 3.0 million EUR 0 thousand EUR -39 thousand 1.3950 % 30 Sept. 2019 EUR 4.0 million EUR 0 thousand EUR -50 thousand 1.3600 % 30 Sept. 2019 EUR 2.0 million EUR 0 thousand EUR -26 thousand 1.4100 % 30 Sept. 2019 EUR 3.0 million EUR 0 thousand EUR -39 thousand 1.4200 % 30 Sept. 2021 EUR 10.0 million EUR 0 thousand EUR -121 thousand 0.5225 % 30 Sept. 2021 EUR 6.5 million EUR 0 thousand EUR -75 thousand 0.5000 %
The counterparty bank calculates the fair value of the interest rate hedges using recognised calcula- tion models based on the respective yield curves.
(34) Report on events after the balance sheet date
There were no significant events after the balance sheet date.
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