Common use of Interest Rate Risk Clause in Contracts

Interest Rate Risk. Sovello is exposed to interest rate risks because of its variable rate financial liabilities. It reduces these risks by using interest rate swaps which exchange the variable interest rate for a fixed rate of 4.655%. The carrying amount of the variable rate financial liabilities at the reporting date was EUR 120,036 (2007 EUR 109,097) thousand. In 2007, to hedge its exposure to the risk of interest rate movements, the Company entered into interest rate swaps having an initial total notional principal amount of EUR 90,000 thousand and terms running until September 30, 2010. The notional principal amounts, terms and maturity dates match those of the hedged items. The hedging relationships are therefore designated as cash flow xxxxxx. The Company applies the hedge accounting rules of IAS 39. In accordance with IFRS 7 interest rate risks are presented by means of sensitivity analyses. These sensitivity analyses show how profit or loss or equity would have been affected by changes in market interest rates. The sensitivity analyses are prepared using the following assumptions: In the case of original financial instruments with fixed interest rates, changes in market interest rates affect profit or loss only where the financial instruments are measured at fair value. Financial instruments with fixed interest rates which are measured at amortized cost do not therefore expose the Company to the risk of interest rate movements. In the case of original financial instruments with variable interest rates which are not designated as hedged items within a cash flow hedging relationship, changes in market interest rates do affect profit or loss and are therefore to be included in the interest rate sensitivity analysis (cash flow risk) under IFRS 7. An increase (decrease) of 100 basis points in the market interest rate at December 31, 2008, would have decreased (increased) the profit for 2008 by EUR 278 (2007 EUR 31) thousand. In the case of financial instruments designated as cash flow xxxxxx, changes in market interest rates affect the Accumulated other comprehensive income component of equity, and are therefore included in the fair value sensitivity analyses. A decrease of 100 basis points in the market interest rate at December 31, 2008, would Annex 1.5 / 33 have decreased equity by EUR 217 (2007 EUR 770) thousand; an increase of 100 basis points would have increased it by EUR 293 (2007 EUR 753) thousand.

Interest Rate Risk. Sovello is exposed to interest rate risks because of its variable rate financial liabilities. It reduces these risks partly by using interest rate swaps which exchange the variable interest rate for a fixed rate of 4.655%. The carrying amount of the variable rate financial liabilities at the reporting date was EUR 68,079 thousand (2008 EUR 120,036 (2007 EUR 109,097) thousand). In 2007, to hedge its exposure to the risk of interest rate movements, the Company entered into interest rate swaps having an initial total notional principal amount of EUR 90,000 thousand and terms running until September 30, 2010. The notional principal amounts, terms and maturity dates match those of a portion of the hedged itemsliabilities. The These hedging relationships are therefore designated as cash flow xxxxxx. The Company applies the hedge accounting rules of IAS 39. In accordance with IFRS 7 interest rate risks are presented by means of sensitivity analyses. These sensitivity analyses show how profit or loss or equity would have been affected by changes in market interest rates. The sensitivity analyses are prepared using the following assumptions: In the case of original financial instruments with fixed interest rates, changes in market interest rates affect profit or loss only where the financial instruments are measured at fair value. Financial instruments with fixed interest rates which are measured at amortized cost do not therefore expose the Company to the risk of interest rate movements. In the case of original financial instruments with variable interest rates which are not designated as hedged items within a cash flow hedging relationship, changes in market interest rates do affect profit or loss and are therefore to be included in the interest rate sensitivity analysis (cash flow risk) under IFRS 7. An increase (decrease) of 100 basis points in the market interest rate at December 31, 20082009, would have decreased (increased) the profit for 2008 2009 by EUR 611 thousand (2008 EUR 278 (2007 EUR 31) thousand). Annex 1.5 / 37 In the case of financial instruments designated as cash flow xxxxxx, changes in market interest rates affect the Accumulated accumulated other comprehensive income component of equity, and are therefore included in the fair value sensitivity analyses. A decrease of 100 basis points in the market interest rate at December 31, 20082009, would Annex 1.5 / 33 have decreased equity by EUR 36 thousand (2008 EUR 217 (2007 EUR 770) thousand); an increase of 100 basis points would have increased it by EUR 41 thousand (2008 EUR 293 (2007 EUR 753) thousand).