Annual Report 2009 Royal BAM Group nv

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114 2009 If a variable interest rate is fixed by means of an interest rate swap, the variable interest charge, as well as the value adjustment of the related interest rate swap, is recognised in the income statement. Consequently, financing expenses are fixed.
4. Financial statements The Group recognises financial risk factors with regard to foreign exchange rate, interest rate, price, credit and liquidity. These financial risks are not exceptionally or different in nature from those that are customary in the industry. The Group applies a stringent policy designed to manage and mitigate these risks to the extent possible. This involves using general management measures, such as internal procedures and instructions, as well as specific measures and/or financial instruments. These measures are accompanied by efficient reporting systems and short lines of communication. The Group’s financial risk factors, control measures and residual risk are described below. 4.1 Financial risk factors a) Market risks Foreign exchange risks The Group has substantial activities in the United Kingdom and, to a limited extent, in other non-euro countries. The Group’s results and shareholders’ equity are therefore affected by foreign exchange rates. Generally, the Group is active in the above mentioned markets through local subsidiaries. The exchange risk is therefore limited, because income and expenditure are largely in the same currency. The associated translation risk is not hedged. A limited number of subsidiaries are active in markets where contracts are denominated in a different currency than their functional currency. Group policy is that costs and revenues from these projects are mainly expressed in the same currency, thus limiting foreign exchange risks. The Group hedges the residual exchange risk on a project-by-project basis, using forward exchange contracts. This involves hedging of unconditional project-related exchange risks in excess of €1 million as soon as they occur. Additional exchange risks in the tender stage and arising from contractual amendments are assessed on a case-by-case basis. Procedures have been established for proper recording of hedge transactions. Systems are in place to ensure the regular performance and analysis of the requisite hedge effectiveness measurements. Once costs and revenues in the same currency have been balanced against each other and any residual exchange risk has been hedged using forward exchange contracts, exchange rate fluctuations have a limited effect on the Group’s results and capital base. With regard to financial instruments, the Group predominantly faces an exchange rate risk for current account transactions in pound sterling. This risk is covered by forward exchange contracts. The residual effect of the exchange rate risk with regard to financial instruments in British sterling and other currencies on the Group’s result and equity, is limited. Interest rate risks The Group’s interest rate risk is associated with interest-bearing receivables and cash and cash equivalents, on the one hand, and interest-bearing borrowings, on the other. If the interest is variable, it presents the Group with a cash flow interest rate risk. If the interest rate is fixed, there is a fair value interest rate risk. The Group mitigates the cash flow interest rate risk to the extent possible through the use of interest rate swaps, under which interest liabilities based on a variable rate are converted into fixed rates. The Group does not use interest rate swaps under which fixed-rate interest liabilities are converted into variable rates in order to hedge the fair value interest rate risk. The analysis of the cash flow interest rate risk takes into account cash and cash equivalents, the debt position and the usual fluctuations in the Group’s working capital requirements. Various alternatives are being studied and hedges are being considered. Under Group policy, cash flow interest rate risks with regard to long-term borrowings (mainly subordinated and PPP borrowings) are largely hedged by interest swaps. As a result, the Group is not entirely insensitive to movements in interest rates. At year-end 2009, 62 percent of the interest on the Group’s net debt position was fixed (2008: 48 percent). The part not covered consists almost entirely of short-term project financing. 115 2009
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Annual Report 2009 Soccer City foot
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Fire service and ambulance station,
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6 2009 Netherlands Belgium United K
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8 2009 Core of BAM’s strategy Mis
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10 2009 Horseshoe-shaped Saendelft
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12 2009 Stock exchange listing Roya
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14 2009 According to the register o
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16 2009 Information per ordinary sh
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18 2009 The members possess the exp
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20 2009 The Supervisory Board gave
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22 2009 Meeting decided in favour o
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24 2009 External auditor Both in it
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26 2009 Remuneration report The fol
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28 2009 The way in which the remune
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30 2009 Rules governing securities
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32 2009 W.K. Wiechers (1940), Chair
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34 2009 J.A.P. van Oosten (1948), C
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36 2009 Result before tax, excludin
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38 2009 In addition to the movement
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40 2009 Wft declaration In accordan
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42 2009 procedure for appointing me
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44 2009 or candidates the Board and
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46 2009 anonymous list, broken down
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48 2009 third-party bidder to exami
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50 2009 Decision on Article 10 Take
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52 2009 or of depositary receipts i
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Temporary steel structure under old
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56 2009 construction partners. A qu
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58 2009 proceedings and of AGIV’s
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60 2009 Rustenburg city centre proj
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62 2009 Construction barometer The
Page 66 and 67: Construction MAS - Museum aan de St
Page 68 and 69: 66 2009 Restoration of Beverweert C
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Page 72 and 73: 70 2009 BAM South Woningbouw Thames
Page 74 and 75: Property Approximately 300 luxury h
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Page 78 and 79: 76 2009 > Kaïros has been operatin
Page 80 and 81: Civil engineering Pedestrian bridge
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Page 86 and 87: 84 2009 BAM Water Woningbouw purifi
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Page 90 and 91: St. Peter the Apostle High School (
Page 92 and 93: Mechanical and electrical contracti
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Page 96 and 97: 94 2009 Ukraine, so the local Tebod
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Page 100 and 101: 98 2009 20 Net result for the year
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Page 104 and 105: 102 2009 3. Summary of significant
Page 106 and 107: 104 2009 3.3 Segment reporting The
Page 108 and 109: 106 2009 Gains and losses on dispos
Page 110 and 111: 108 2009 Contracts containing the c
Page 112 and 113: 110 2009 3.17 Derivative financial
Page 114 and 115: 112 2009 3.20 Deferred taxes Deferr
Page 118 and 119: 116 2009 If the interest rates (EUR
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Page 122 and 123: 120 2009 5. Critical accounting est
Page 124 and 125: 122 2009 Sector reporting Revenue a
Page 126 and 127: 124 2009 Assets ¹ Netherlands Unit
Page 128 and 129: 126 2009 PPP projects The total pos
Page 130 and 131: 128 2009 Tangible assets on order a
Page 132 and 133: 130 2009 9.1 Goodwill Goodwill pred
Page 134 and 135: 132 2009 10. PPP receivables At 1 J
Page 136 and 137: 134 2009 12. Other financial fixed
Page 138 and 139: 136 2009 Trade receivables and impa
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Page 150 and 151: 148 2009 The actuarial assumptions
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Page 154 and 155: 152 2009 22. Provisions At 1 Januar
Page 156 and 157: 154 2009 Deferred tax liabilities A
Page 158 and 159: 156 2009 Impairments in 2009 were m
Page 160 and 161: 158 2009 Allowing for dilution, the
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168 2009 40. Research and developme
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170 2009 Notes to the statutory fin
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172 2009 2. Tangible assets At 1 Ja
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174 2009 4. Financial assets At 1 J
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176 2009 The specification of movem
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178 2009 12. Employees During the y
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180 2009 Anti-takeover measures The
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182 2009
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184 2009 Principal subsidiaries and
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186 2009 Revenue Operating result e
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188 2009 21 April 2010 General Meet
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Annual Report 2009 Royal BAM Group nv

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