Boskalis_Annual Report_2017

118 ANNUAL REPORT 2017 – BOSKALIS FINANCIAL STATEMENTS 2017 ANNUAL REPORT 2017 -- BOSKALIS FINANCIAL STATEMENTS 2017 118 Price risks Assets Derivatives Financial assets available for sale Liabilities Derivatives 2017 USD forward selling (in US dollar) USD forward buying (in US dollar) Fuel hedges (in US dollar) 2016 USD forward selling (in US dollar) USD forward buying (in US dollar) Fuel hedges (in US dollar) Interest rate swaps (in EUR)

Risks related to price developments on the purchasing side which are usually borne by the Group, for example developments in wages, costs of materials, sub-contracting costs and fuel, are also taken into account when preparing cost price calculations and tenders. Price index clauses are included in contracts wherever possible, especially on projects that extend over a long period of time. The Board of Management has established a fuel price risk management policy stipulating approved fuel price risk management instruments. These include: delivery of fuel by the client, price escalation clauses, fixed price supply contracts and financial derivatives (forward, future and swap contracts). ON-BALANCE FINANCIAL INSTRUMENTS AND FAIR VALUE 28.2 Financial instruments accounted for under assets and liabilities are financial fixed assets, cash and cash equivalents, receivables, and current and non-current liabilities. Derivatives are mainly future cash flows hedged by forward contracts to which hedge accounting is applied. Furthermore, the Group holds a number of interest rate swaps. These are recognized under other derivatives. The fair value of the forward exchange contracts is based on their listed market price (unadjusted market prices in active markets for identical assets and liabilities) or discounted cash flows based on relevant conditions and durations of the contracts and including public interest rates for comparable instruments as at the balance sheet date, taking into account the credit risk of the counterparty. The fair value of other financial instruments is based on quoted prices or on the actual interest rate as at the balance sheet date, taking into account terms and maturity. The fair value of non-interest-bearing financial instruments with a maturity of twelve months or less is supposed to be equal to their book value. The fair value of the majority of the financial instruments does not differ materially from the book value, with the exception of a number of loans and other payables with a fixed rate. The fair value of these instruments is disclosed below.

The fair value and the related hierarchy of the aforementioned financial instruments are:

As at 31 December 2016

As at 31 December 2017

CARRYING AMOUNT

CARRYING AMOUNT

FAIR VALUE

HIERACHY

FAIR VALUE

HIERACHY

29,876

29,876

2 1

80,804 115,379

80,804 115,379

2 1

-

-

- 2,258

- 2,258

2

- 9,656

- 9,656

2

Interest-bearing borrowings with fixed interest rates

- 270,864

- 279,724

3

- 761,431

- 779,607

3

Derivatives The composition of outstanding derivatives at year-end is presented below.

WITHIN ONE YEAR

AFTER ONE YEAR

TOTAL

- 128,874

- 98,755 - 227,629

7,039

-

7,039

- 198,611

- 76,121 - 274,732 34,343 116,276

Forward selling of other currencies (average contract rates in EUR) Forward buying of other currencies (average contract rates in EUR)

81,933

1,420

-

1,420

WITHIN ONE YEAR

AFTER ONE YEAR

TOTAL

- 181,748 38,628 - 88,100 136,288

- 14,347 - 196,095

-

38,628

Forward selling of other currencies (average contract rates in EUR) Forward buying of other currencies (average contract rates in EUR)

- 28,562 - 116,662

20,620

156,908

947

- -

947

59,669

59,669