Boskalis_Annual Report_2017

115

Contractual cash flows One year or less

More than 5 years

As at 31 December 2017

Book value

1 - 5 years

269,398

325,136

9,906

39,624

275,606

US private placements

1,466

1,715

347

1,368

- - - - -

Other interest-bearing borrowings

40,794

40,931

40,931

- - -

Bank overdrafts

1,011,629

1,011,629

1,011,629

Trade and other payables

148,488

148,488

148,488

Current tax payable

2,258

2,258

2,231

27

Derivatives

1,474,033

1,530,157

1,213,532

41,019

275,606

Contractual cash flows One year or less

More than 5 years

As at 31 December 2016

Book value

1 - 5 years

US private placements

759,727

830,074

465,001

41,413

323,660

Other interest-bearing borrowings

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

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) and to a lesser extent the Pound Sterling and 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 25% (2016: 30%) to the group revenue, 40% (2016: 40%) to the operating result excluding impairment losses and 35% (2016: 35%) to EBITDA in 2017. The Board of Management has defined a policy to control foreign currency risk based on the hedging of material transactions in foreign currencies by Group companies other than the functional currency. The policy is that these Group companies hedge their currency risks, if material, resulting from operational transactions in currencies other than their functional currency. This is mainly relevant for Group companies involved in dredging or offshore energy projects. The functional currency of a large part of the activities of Group companies is the euro. The expenses of these companies are mainly presented in euros and to a lesser extent in the local currency of the country in which the activities are undertaken. The Group contracts projects mainly in euro, US dollars, Pounds Sterling and currencies which are pegged to the US dollar. Consequently, the reported financial results and cash flows of the respective operations are exposed to foreign currency risk. The exchange rate of the US dollar and the euro are most relevant in this respect. The Board of Management has defined a policy to mitigate foreign risks by hedging the foreign currency exposure of operational activities, in most cases through forward currency contracts.

The Group uses derivative financial instruments only to hedge related transactions, mainly from future cash flows from contracted projects. The Group applies hedge accounting for its cash flow hedges.

Exposure to currency risk The Group’s currency risk management policy was maintained in 2017 and resulted in a non-material sensitivity of the Group to currency transaction risk.

ANNUAL REPORT 2017 – BOSKALIS A L REPORT 2017 -- BOSKALIS