Boskalis_Annual Report_2017

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DUE FROM AND DUE TO CUSTOMERS 3.12 Due from and due to customers concerns the gross amount yet to be charged which is expected to be received from customers for contractual work performed up to the reporting date (hereinafter: ‘work in progress’) and services rendered (mainly salvage work). Work in progress is valued at cost of the work performed, plus a part of the expected results upon completion of the project in proportion to the progress made and less progress billings, advances and, if applicable, provisions for losses. Provisions are recognized for expected losses on work in progress as soon as they are foreseen, and deducted from the cost price; if necessary, any profits already recognized are reversed. Revenue from additional work is included in the overall contract revenue if the customer has accepted the sum involved. Claims and incentives are included in construction work in progress if they are virtually certain based upon negotiations with the customer. Liquidated damages are accounted for if the Group expects that the client is entitled to these liquidated damages and will deduct these from contract revenue. The cost price includes project costs, consisting of payroll costs, materials, costs of subcontracted work, cost of local representatives, rental charges and maintenance costs for the equipment used and other project costs. The rates applied are based on the expected average occupation in the long run. The progress of a project is determined on the basis of the proportion that contract cost incurred for work performed to date bear to estimated total cost. Profits are not recognized unless a reliable estimate can be made of the result upon completion of the project. The balance of the value of work in progress, progress billings and advance payments is determined for each project. It is assessed for each project whether the work in progress relates to an asset or a liability. These assets are recognized in the statement of financial position as ‘due from customers’ and as liabilities as ‘due to customers’. Salvage work that is completed at the statement of financial position date but for which the final proceeds are not yet determined between parties is recognized at expected proceeds taking into account the estimation uncertainty less progress billings and advances. For expected losses on salvage work, provisions are recognized as soon as they are foreseen. TRADE AND OTHER RECEIVABLES 3.13 Trade and other receivables are stated initially at fair value and subsequently at amortized cost less accumulated impairment losses, such as doubtful debts. Amortized cost is determined using the original effective interest rate. CASH AND CASH EQUIVALENTS 3.14 Cash and cash equivalents consist of cash and bank balances, deposits with terms of no more than three months or that qualify as highly liquid investments that are readily convertible and which are subject to insignificant risks of change in value. The explanatory notes disclose the extent to which cash and cash equivalents are not freely available as a result of transfer restrictions, joint control or other legal restrictions. Bank overdrafts are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

SHARE CAPITAL 3.15 Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects. Transaction costs directly attributable to share buy backs are recognized as a deduction from equity, net of any tax effects. institutions. At initial recognition, interest-bearing borrowings are stated at fair value less transaction costs. Subsequently, interest-bearing borrowings are stated at amortized cost with any difference between cost and redemption value being recognized in the statement of profit or loss over the period of the borrowings using the original effective interest rate. EMPLOYEE BENEFITS 3.17 Defined contribution pension plans A defined contribution pension plan is a post-employment benefit scheme under which the Group pays fixed contributions into a separate pension fund or an insurance company. The Group has no legal or constructive obligation to pay further amounts if the pension fund or insurance company has insufficient funds to pay employee benefits in connection with services rendered by the employee in the current period or prior periods. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense as part of the personnel expenses in the statement of profit or loss when they are owed. Prepaid contributions are recognized as an asset. Contributions to a defined contribution pension plan payable more than 12 months after the period during which the employee rendered the services, are discounted. Defined benefit pension plans A defined benefit pension plan is every post-employment benefit plan other than a defined contribution plan. For each separate defined benefit pension plan, the net asset or liability is determined as the balance of the discounted value of the future payments to employees and former employees, less the fair value of plan assets. The calculations are done by qualified actuaries using the projected unit credit method. The discount rate equals the yield on high-quality corporate bonds as at the date of the statement of financial position, with the period to maturity of the bonds approximating the duration of the liability. If the calculation results in a positive balance for the group, the asset is included up to an amount equal to any unrecognized past service pension costs and the discounted value of economic benefits in the form of possible future refunds or lower future pension premiums from the fund. In calculating the discounted value of economic benefits, the lowest possible financing obligations are taken into account as applicable to the individual plans in force within the Group. An economic benefit is receivable by the Group if it can be realized within the period to maturity of the plan or upon settlement of the scheme’s obligations. Actuarial gains and losses, including any movements in limits on net pension assets, are recognized in the unrecognized results within the statement of other comprehensive income. If plan benefits are changed or if a plan is amended, past service costs or a resulting curtailment profit or loss is recognized directly in the statement of profit or loss. The Group recognizes profit or INTEREST-BEARING BORROWINGS 3.16 Interest-bearing borrowings are liabilities to financial

ANNUAL REPORT 2017 – BOSKALIS A U L REP RT 2017 -- BOSKALIS