Boskalis_Annual_Report_2016

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Credit risk cash and cash equivalents The Group had cash and cash equivalents of EUR 965 million at 31 December 2016

(2015: EUR 794 million), representing its maximum credit risk exposure on these assets. The cash and cash equivalents are held with bank and financial institution counterparties with investment grade credit ratings.

28.1.2 LIQUIDITY RISK Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group’s approach to managing liquidity is aimed at ensuring that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. Liquidity projections including available credit facilities are incorporated in the regular management information reviewed by the Board of Management. The focus of the liquidity review is on the net financing capacity, being free cash (see note 22) plus available credit facilities in relation to financial liabilities (see note 24). The total of free cash and available credit facilities at year-end amounted to EUR 1.4 billion of which EUR 0.4 billion was used to repay the 2010 US private placement in January 2017. Furthermore, based on the Group’s financial ratios it can be concluded that the Group has significant debt capacity available under an (implied) investment grade credit profile. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding both the impact of netting agreements and financial liabilities accounted for as part of the disposal group:

Contractual cash

More than 5 years

As at 31 December 2016

Book value

flows One year or less

1 - 5 years

US private placements

759,727

830,074

465,001

41,413

323,660

Other interest-bearing loans

1,704 1,188

1,994 1,198

351

1,643

- - - - -

Bank overdrafts

1,198

- - -

Trade and other payables

1,085,684

1,085,684

1,085,684

Current tax payable

152,331

152,331

152,331

Derivatives

9,656

9,656

8,838

818

2,010,290

2,080,937

1,713,403

43,874

323,660

Contractual cash

More than 5 years

As at 31 December 2015

Book value

flows One year or less

1 - 5 years

US private placements

711,575 196,897 23,889 30,603

848,287 205,940 25,360 30,625

29,753

444,913 204,219

373,621

Revolving multi-currency credit facility

1,721

- - - - - -

Other interest-bearing loans

19,198 30,625

6,162

Bank overdrafts

- - -

Trade and other payables

1,264,099

1,264,099

1,264,099

Current tax payable

182,886 14,867

182,886 14,867

182,886 13,720

Derivatives

1,147

2,424,816

2,572,064

1,542,002

656,441

373,621

28.1.3 MARKET RISK Market risk concerns the risk that Group income or the value of investments in financial instruments is adversely affected by changes in market prices, such as currency exchange rates, interest rates and fuel prices. The objective of managing market risks is to keep the market risk position within acceptable boundaries while achieving the best possible return. Currency risk The presentation currency of the Group is the euro. A number of Group companies, the most important of which being Dockwise, and substantial strategic investments (Smit Lamnalco, Keppel Smit Towage, Asian Lift and Saam Smit Towage), have other functional currencies than the euro. The main other currency is the US dollar (the functional currency of the Dockwise, Smit Lamnalco and Saam Smit Towage entities), followed by the Singapore dollar. The revenue and expenses of these companies are largely or entirely based on their functional currency, other than the euro. Group companies and strategic investments with functional currency other than the euro contributed approximately 30% (2015: 30%) to the group revenue, 40% (2015: 45%) to the operating result excluding impairment losses and 35% (2015: 45%) to EBITDA in

ANNUAL REPORT 2016 – BOSKALIS