Merck 2014 Annual Report Download - page 240

235CONSOLIDATED FINANCIAL STATEMENTS → Notes to the Group accounts
The following table presents the net exposure of the Group in
relation to exchange rate fluctuations of the major currencies
against the euro:
€ million CHF CNY JPY TWD USD
Net exposure Dec. 31, 2014 – 246.6 355.8 121.6 260.0 753.0
Net exposure Dec. 31, 2013 – 233.0 251.4 107.9 169.0 690.4
Net exposure per currency consists of the following components:
→Balance sheet items in the respective currency, unless such
currency corresponds to the functional currency of a company;
→ forecast cash flows for the next twelve months in the respective
currency; and
→ derivatives used to hedge the abovementioned balance sheet
items and forecast cash flows for the next twelve months.
The following table presents the effect of exchange rate fluctua-
tions in the key currencies versus the euro on net income and
Group equity:
€ million
Dec. 31, 2014 CHF CNY JPY TWD USD
Exchange rate +10 %
(Appreciation vs. EUR)
Consolidated income
statement 0.0 0.0 0.1 0.0 0.0
Total equity 0.0 0.0 –14.2 –10.8 844.1
Exchange rate –10 %
(Depreciation vs. EUR)
Consolidated income
statement 0.0 0.0 32.1 0.0 0.0
Total equity 0.0 0.0 9.2 9.1 – 681.7
€ million
Dec. 31, 2013 CHF CNY JPY TWD USD
Exchange rate +10 %
(Appreciation vs. EUR)
Consolidated income
statement 0.0 0.0 0.0 0.0 0.0
Total equity 0.0 0.0 – 26.3 – 9.8 – 94.4
Exchange rate –10 %
(Depreciation vs. EUR)
Consolidated income
statement 0.0 0.0 0.0 0.0 0.0
Total equity 0.0 0.0 19.0 6.7 69.8
In addition to the previously described transaction risks, Merck
KGaA, Darmstadt, Germany, is also exposed to currency trans lation
risks since many Group companies are located outside the euro-
zone. The financial statements of these companies are translated
into euros. Exchange rate differences in the assets and liabilities of
these companies resulting from currency translation are recog-
nized directly in Group equity.