DHL 2000 Annual Report Download - page 132

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Liquidity risk and liquidity management
Liquidity risk defines the risk of not being able to pro-
cure necessary cash and cash equivalents on time.
Liquidity management is responsible for providing
sufficient liquidity and eliminating or minimizing un-
expected financial events (financing or investment
risk) for Deutsche Post Group. Confirmed credit lines
at sufficient amounts were available for the Group at
the end of 2000 to this end.
Currency risk and currency management
Currency risks,i.e.potential reductions in the value of
a financial instrument resulting from exchange rate
fluctuations relate,in particular,to the Group’s receiv-
ables and liabilities denominated in currency other than
the local currency.
Currency futures,currency options and interest swaps
are used to hedge against currency risks.The reported
volume of currency futures and options serves to
hedge contracted future transactions from the field of
services and acquisitions of shareholdings.The main
part is attributable to hedging acquisitions.The nega-
tive market value as at the balance sheet date was €29
million.
The use of currency swaps serves the hedging of intra-
group financing and investments at matched amounts
and maturities.At the balance sheet date the respective
positive market value was €36 million.All instruments
are due in less than one year.Each hedging transac-
tions is allocated to an underlying transaction. It was
therefore not necessary to set up provisions.
Interest rate risk and interest rate management
The interest rate risk,i.e.the risk that the value of fi-
nancial instruments may change due to interest rate
changes on the capital market relates primarily to re-
ceivables, liabilities and marketable securities having
maturities of more than one year.Such maturities are
relevant only to financial assets and borrowings.
Of the Group’s financial assets,only housing promo-
tion loans involve interest rate risks. Compared to the
market interest rate for similar financial assets as at
December 31, 2000, the majority of the housing
promotion loans bear lower than market interest or,
in some cases, are even non-interest-bearing. They
are recognized at their fair value amounting to € 20
million (1999: € 23 m).The nominal value of these
loans amounts to € 51 million (1999: € 56 m).
As of December 31,2000,the liabilities disclosed under
borrowings do not provide for any significant interest
rate risk since most of these liabilities are floating rate
financial instruments.Accordingly, the differences be-
tween fair values and carrying amounts of the borrow-
ings are relatively small.
The Deutsche Post Group uses primary and derivative
financial instruments to optimize interest costs and to
diversify the interest rate risk.
A risk diversification effect is also achieved by targeted
compilation of the portfolio.Derivative interest rate
instruments are used at the time of conclusion of a
trade in order to adjust the borrowing structure or
124