Boskalis_Annual Report_2017

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FINANCE INCOME AND COSTS 3.26 Finance income comprises interest received and receivable from third parties, currency gains on financing and compensating results of negative changes in the fair value of financial instruments used to hedge interest or currency results on the financing concerned (hedged item), for which the results of the hedged item are included in the finance income. Interest income is recognized in the statement of profit or loss as it accrues, using the effective interest rate method. Finance expenses include interest paid and payable to third parties which are reported using the effective interest method, expenses resulting from early repayments, arrangement fees, currency losses on financing and results of positive changes in fair value of financial instruments used to hedge interest or currency results on the financing concerned (hedged item), for which the results of the hedged item are included in the finance expenses. The interest component of financial lease payments is recognized in the statement of profit or loss using the effective interest rate method. Borrowing costs not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in the statement of profit or loss. TAXATION / DEFERRED INCOME TAX ASSETS AND 3.28 LIABILITIES Taxation is calculated on the basis of the result before taxation for the reporting period, taking into account the applicable tax provisions and tax rates, and also includes adjustments on taxation from prior reporting periods and movements in deferred taxes recognized in the reporting period. Taxation is included in the statement of profit or loss unless it relates to items recognized directly in equity, in which case taxation is included in equity. Income tax expenses also include the corporate income tax levied on deemed profit determined by revenue (withholding tax). Temporary differences are accounted for in deferred tax assets and/or deferred tax liabilities. Deferred tax assets are only recognized to the extent that it is probable that taxable profit will be available for realization in the foreseeable future. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax assets and liabilities are offset if there is a legally enforceable right to do so, and if they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but provided there is an intention to settle the tax liabilities and assets on a net basis or the tax assets and liabilities will be realized simultaneously. Deferred income tax assets and liabilities are recognized at nominal value. Additional (income) taxes that arise from the distribution of dividend are recognized at the same time that the liability to pay the related dividend is recognized. SHARE IN RESULT OF JOINT VENTURES AND 3.27 ASSOCIATED COMPANIES Share in result of joint ventures and associated companies comprises the share in the results after taxation of the strategic investments (see note 3.2.3). It includes interest income resulting from capital invested in joint ventures and associated companies by means of interest-bearing loans.

Revenue from salvage work that is completed at the date of the statement of financial position (part of the operational segment Towage & Salvage), but for which the proceeds are not finally determined between parties, is recognized at expected proceeds taking into account the estimation uncertainty. If it is uncertain whether the economic benefits of work done or services rendered will flow to the Group, the relevant revenue is not recognized. Revenue also includes revenue from services rendered to third parties during the reporting period. Such services include the rental/hire of equipment and/or personnel, sea transport services and related services of Offshore Energy and the activities of Harbor Towage. Revenues from services are recognized in the statement of profit or loss in proportion to the stage of completion of the work performed at the reporting date. The stage of completion is determined based on assessments of the work performed. OTHER INCOME AND OTHER EXPENSES 3.22 Other income and Other expenses mainly consist of book results from disposals and insurance results. If a business combination resulted in a gain on acquisition, this gain is also recognized in Other income. RAW MATERIALS, CONSUMABLES, SERVICES AND 3.23 CONTRACTED WORK Raw materials, consumables, services and contracted work consist of the cost price of the work performed during the reporting period, excluding personnel expenses, amortization, depreciation and impairments. This item also includes equipment utilization costs, costs of operational leases, general overhead costs, external costs for research and development where not capitalized, currency translation differences, fair value changes of derivatives related to hedging foreign currency effects of projects, and other results/late results. PERSONNEL EXPENSES 3.24 Personnel expenses consist of wages and salaries for own personnel and the related social security charges and pension costs, including paid and accrued contributions for defined contribution pension plans and movements in assets and liabilities from defined benefit plans including curtailments and settlements, insofar as applicable, and excluding actuarial gains and losses and the limits on net pension plan assets added or charged directly to group equity. LEASE PAYMENTS 3.25 Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the lease liability. Revenue does not include any taxes on added value.

ANNUAL REPORT 2017 – BOSKALIS A AL REP RT 2017 -- BOSKALIS