annual report - Royal Haskoning

isk profile 2006
royal haskoning
other operational risks
Suppliers
Around 25 percent of the costs of a project are incurred in purchasing materials and hiring in work from third parties. Our
quality system is used to perform a systematic evaluation of the quality of our suppliers. At the end of 2006, the accounts
payable amounted to almost 1 19 million (2005: 1 15 million).
Systems
ICT is essential for the exchange of project information and for the supporting business processes. The risks associated with
a possible failure of ICT systems are therefore increasing. The management and maintenance of the group-wide ICT network
and the support for our standard software has been contracted out to Siemens. Agreements on response times in the event
of a failure have been included in the service level agreement with Siemens. Additionally, PriceWaterhouseCoopers carry
out an annual EDP audit on our financial ICT systems as part of the audit of the annual accounts.
financial risks
Currency risks
As in 2005, less than 3 percent of the turnover was exposed to currency risks in 2006. As a rule this was a risk in relation to
the US dollar, but our portfolio also includes other, less common currencies. The currency risk relating to the more common
currencies is covered on the futures market or by option contracts for long-term projects. At the end of 2006 the value of
futures and option contracts in US dollars amounted to some 1 9.3 million at the expiry date (2005: 1 8.1 million).
The risk connected with currencies for which there is no direct futures market is covered where possible either by taking
a position in a related currency or by matching the income as closely as possible to expenditure in the same currency. The
total currency risk in carrying out our projects is therefore relatively small.
Guarantees, interest and credit risks
Bank guarantees are regularly issued in connection with projects. At the end of 2006 there were 1 19.3 million outstanding
in bank guarantees with clients and suppliers (2005: 1 15.2 million).
Some clients require the parent company to guarantee the execution of projects. It is Royal Haskoning policy to limit such
guarantees. Partly for this reason, we operate an internal balance policy, whereby the solvency of the various operating
companies is sufficient for them to be able to operate independently in the market.
Clients are increasingly willing to make a down payment at the start of a project. The company usually issues a down
payment guarantee in return. The total of the down payment guarantees amounted to 1 11.4 million at the end of 2006.
Royal Haskoning wants to limit the influence of financial charges on the operating result. The company therefore strives for
a healthy cash position and regularly reviews interest rates in consultation with the banks.
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