Financial risk management

The group’s operations expose it to the following financial risks:

  • market risks, related to currency risk, operations in currencies other than the functional currency, interest rate risk;
  • liquidity risks, related to the availability of financial resources and access to the credit market;
  • credit risk, arising from normal trading transactions or financing activities.

The group specifically monitors each of these financial risks and acts promptly to minimise them including via hedging derivatives. Ansaldo STS group’s approach to managing these risks, in line with internal policies, is described below.

Hedges are mainly undertaken with banks. The group has contracts in place for the following notional foreign currency amounts at the reporting date:

(€’000) Sell 06 14 Buy 06 14 30.06.2014 Sell 12 13 Buy 12 13 31.12.2013
Euro 81,025 56,282 137,307 88,262 74,249 162,511
US dollar 98,738 58,301 157,039 114,537 58,210 172,747
Pound sterling 9,295 - 9,295 8,878 - 8,878
Swedish krona 881 30,002 30,883 1,312 26,057 27,369
Australian dollar - 33,126 33,126 - 53,427 53,427
Hong Kong dollar 252 - 252 248 - 248
South African rand 1,404 - 1,404 1,397 - 1,397
Indian rupee 4,515 - 4,515 4,331 - 4,331
Abu Dhabi dirham 6,003 - 6,003 15,399 - 15,399

The net fair value of the derivatives in place at 30 June 2014 was a positive €1,357 thousand.

Registered Office: 16151 Genoa Via Paolo Mantovani, 3 - 5
Paid-in Share Capital EUR 100,000,000 R.E.A. n. 421689 Register of Enterprises of Genoa Tax Code 01371160662
A Finmeccanica Company