e. Fair Value of Financial Instruments

Fair value estimation

The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date.

At the balance sheet date, the fair values of forward contracts designated as cash flow hedges were as follows:

	Remaining period
(in TEUR)	not exceeding 1 year		more than 1 year		Total 2003	Total 2002
US dollars	19,590		4,520		24,110	9,910
Swedish crowns	30		0		30	26
Singapore dollars	436		7,075		7,511	3,144
Other currencies	(73)		3		(70)	26
	19,983		11,598		31,581	13,106

fairvalue.htm

fairvalue.xls (Download size=16896 Bytes): 

Fair values of forward contracts designated as cash flow hedges are included directly in equity.

(in TEUR)	2003	2002
Forward contracts with positive fair values	33,175	13,328
Forward contracts with negative fair values	(1,594)	(222)
	31,581	13,106

fairvalue2.htm

fairvalue2.xls (Download size=15872 Bytes): 

At the balance sheet date, the fair value of the interest swap was as follows:

	Remaining period
(in TEUR)	not exceeding 1 year		more than 1 year		Total 2003	Total 2002
Interest swap	0		9.019		9.019	8.808

interestsec.htm

interestsec.xls (Download size=15872 Bytes): 

The Group’s principal financial instruments not carried at fair value are trade receivables, other current assets, other non current assets, trade and other payables, bank overdrafts, long-term borrowings.

Cash and cash equivalents, current investments and other non-current financial assets

The carrying amount of cash and other financial assets approximates fair value due to the relatively short-term maturity of these financial instruments.

Non-current and current securities

The fair values of publicly traded instruments are stated based on quoted market prices. For all other instruments for which there are no quoted market prices, a reasonable estimate of fair value has been calculated based on the expected cash flows or the underlying net asset base for each investment. Non-current securities of the Group are classified as "available for sale” and are valued at their quoted market price at the balance sheet date.

Receivables and payables

The historical cost carrying amounts of receivables and payables which are all subject to normal trade credit terms approximate their fair values.

Short-term borrowings

The carrying amount approximates fair value because of the short period to maturity of those instruments.

Long-term borrowings

The fair value of the long-term debts is based on the current rates available for debt with the same maturity profile. The fair value of non-current borrowings and other payables with variable interest rates approximates their carrying amounts.

The carrying amount is equal to the estimated fair value of the Group’s financial instruments. The interest risk of the bond has been hedged by an interest swap. Management believes that the exposure to interest rate risk of the remaining financial assets and liabilities is negligible.

IAS 39-Reserve

The table below shows the movements in the hedging reserve in equity in respect to gains and losses on forward contracts designated as cash flow hedges during the period.

(in TEUR)	2003		2002
Balance as at 1 January	8,650		(1,821)
Movements in the period:
Gains and losses from changes in fair value	20,939		13,227
Deferred income taxes thereon	(7,119)		(4,497)
Transfers to income statement	(5,974)		2,638
Deferred income taxes thereon	2,031		(897)
Balance as at 31 December	18,527	*)	8,650	*)

fairvalue3.htm

fairvalue3.xls (Download size=16896 Bytes): 

*) In the hedging reserve acc. to the Consolidated Statement of Shareholders’ Equity, an additional amount of EUR -16 thousand (2002: EUR -49 thousand) is included which arises from the valuation of available-for-sales investments.