Boskalis_Annual Report_2017

116 ANNUAL REPORT 2017 – BOSKALIS FINANCIAL STATEMENTS 2017 ANNUAL REPORT 2017 -- BOSKALIS FINANCIAL STATEMENTS 2017 116 The following significant exchange rates applied during the year under review: Average rate Euro 2017 2016 US Dollar 1.133 1.102 Pound Sterling 0.874 0.816 Singapore Dollar 1.561 1.526 joint ventures, whose functional currency is different than the presentation currency of the Group. Investments are viewed from a long-term perspective. Currency risks associated with investments in these affiliated companies are not hedged, under the assumption that currency fluctuations and interest and inflation developments balance out in the long run. Items in the statements of profit or loss of these subsidiaries are translated at average exchange rates. Currency translation differences are charged or credited directly to equity. At reporting date the net asset positions of the main subsidiaries, associated companies and joint ventures in functional currencies other than the euro were as follows: 31 DECEMBER Euro 2017 US dollar 891,111 Pound Sterling 88,906 Singapore dollar 63,506 1,043,523 For the 2017 financial year, profit before tax, excluding the effect of non-effective cash flow hedges would have been EUR 3.9 million higher (2016: EUR 26.5 million lower) if the corresponding functional currency had strengthened by 5% in comparison to the euro with all other variables, in particular interest rates, held constant. This would have been mainly as a result of currency exchange effects on translation of the result of the above-mentioned affiliates denominated in US dollars. The total impact on the currency translation reserve would have amounted to about EUR 55 million positive (2016: approximately EUR 66 million positive). A 5% weakening of the corresponding functional currency against the euro at year-end would have had the same but opposite effect assuming that all other variables remained constant. Currency transaction risk, excluding interest-bearing financing The currency transaction risk for Group companies resulting from future operational transactions in currencies other than their functional currency, can be summarized as follows: Euro 2017 Expected cash flows in US dollars 176,892 Expected cash flows in Australian dollars - 9,770 Expected cash flows in Pounds Sterling 61,182 Expected cash flows in Indian rupees 83,486 Expected cash flows in Swedish kronors 44,082 Expected cash flows in euros - 32,016 Expected cash flows in other currencies 12,805 Expected cash flows 336,661 Cash flow hedges - 330,077 Net position 6,584 Sensitivity analysis Due to the fact that expected future cash flows in foreign currencies are hedged, the sensitivity to foreign currency risk for financial instruments, excluding interest-bearing financing, is limited for the Group. The Group is mainly funded by interest-bearing borrowings denominated in US dollars (see note 24 ‘Interest- bearing borrowings’). The US private placements expressed in US dollars are used to hedge, in part, the net investments in Dockwise and Fairmount, including the intercompany financing provided. Therefore, and Spot rate as at 31 December 2017 1.201 0.888 1.605 Currency translation risk Currency translation risk arises mainly from the net asset position of subsidiaries, associated companies and

2016

1.055 0.884 1.524

2016

1,058,871

56,373 157,255

1,272,499

2016

133,703 - 13,043 42,204

-

14,306

- 115,604

8,343

69,909

- 77,176

- 7,267

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