Incredimail 2013 Annual Report Download - page 85

As of December 31, 2013, balance sheet financial items in U.S. dollars, our functional currency, and those currencies other than the
U.S. dollars were as follows:
The fair value of firmly committed transactions denominated in currencies other than our functional currency, as of December 31, 2013,
was a liability of $1.3 million for less than one year and $0.7 million for more than one year, all denominated in NIS.
The fair value of derivative instruments and the notional amount of the hedged instruments in NIS, as of December 31, 2013 were as
follows:
In addition, in territories where our prices are based on local currencies, fluctuations in the dollar exchange rate could affect our gross
profit margin. We may compensate for such fluctuations by changing product prices accordingly. We also hold a small part of our financial
investments in other currencies, mainly NIS and Euro. The dollar value of those investments may decline. A revaluation of 1% of the foreign
currencies (i.e. other than U.S. dollar) would not have a material effect on our income before taxes possibly reducing it by less than $0.1 million.
A significant portion of our costs, including salaries and office expenses are incurred in NIS. Inflation in Israel may have the effect of
increasing the U.S. dollar cost of our operations in Israel. If the U.S. dollar declines in value in relation to the New Israeli Shekel, it will become
more expensive for us to fund our operations in Israel. A revaluation of 1% of the New Israeli Shekel will affect our income before tax by less
than one percent (1%). The exchange rate of the U.S. dollar to the New Israeli Shekel, based on exchange rates published by the Bank of Israel,
was as follows:
Since 2006 we’
ve engaged a firm to analyze our exposure to the fluctuation in foreign currency exchange rates and are implementing
their recommendations since then. However, due to the market conditions, volatility and other factors, its proposals and their implementation
occasionally prove to be ineffective or can cause additional finance expenses.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
U.S. dollars
NIS
Other
Currencies
Total
In thousands of U.S. dollars
Current assets
38,508
6,994
2,083
47,585
Long
-
term assets
63,632
3,658
-
67,290
Current liabilities
37,267
11,605
1,573
50,445
Long
-
term liabilities
7,831
29
-
7,860
Total
57,042
(982
)
510
56,570
Notional
Amount
Fair Value
In thousands of U.S. dollars
Zero
-
cost collar contracts to hedge payroll expenses
2,500
113
Year Ended December 31,
2011
2012
2013
Average rate for period
3.578
3.855
3.610
Rate at year
-
end
3.821
3.733
3.471
76