Note 25 Financial risk Fiven operates in an international and cyclical industry which exposes the business to a variety of financial risks. The financial risks are related to (1) market risk consisting of risk factors to currency, price and interest rates, (2) counterpart credit risk related to the financial ability of customers and lastly, (3) liquidity risk related to the risk that Fiven will encounter difficulties in meeting financial obligations. 1 Market Risks 1.1 Currency Risks Fiven has revenues and operating costs denominated in various currencies. The largest trading currencies are EUR and USD, but also BRL, and GBP are currencies in which Fiven trade. Fiven is using natural hedge to the extent possible by matching inflows and raw materials purchases to be denominated in the same currencies as well as entering into forward foreign exchange contracts to cover surplus currency risks. Fiven Norway has virtually no sales in local currency, and USD and EUR are the dominant ones. Raw material contracts like pet coke, sand and energy accounting for the majority of costs of goods sold, are signed in corresponding currencies to reduce impact on risk from currency inflows. Fiven Belgium external sales are in EUR. Import of crude silicon carbide from Venezuela is USD based. Fiven Brazil has mainly a currency inflow exposure as raw materials purchases are paid in local currency. In 2022 approximately 46 percent of total sales were in foreign currency, and the risk were covered through hedging instruments. The parent company Fiven ASA has EUR as functional currency as main in- and outflows are EUR denominated. Currency exposure affecting the consolidated statement of income: The table below shows assets and liabilities denominated in foreign currencies different from the entities functional currency, where changes in currency rates will affect profit and loss. The table includes notional amount of foreign exchange contracts. 31 December 2022 Amounts in EUR thousand USD EUR BRL NOK Other Total 2022 Other non current (financial) assets - 13 482 - 14 - 13 496 Receivables 8 572 10 203 7 865 14 272 200 41 112 Other current (financial ) assets - 17 914 - 70 7 17 991 Cash and cash equivalents 3 178 1 317 - 222 47 4 764 Total monetary assets 11 750 42 916 7 865 14 577 254 77 362 Interest bearing liabilities 7 185 5 651 - 7 365 240 20 441 Other liabilities 681 - - 348 18 1 047 Trade payables 982 4 173 - 2 076 27 7 257 Total monetary liabilities 8 848 9 823 - 9 790 285 28 746 Derivatives notional value 4 016 7 212 11 228 Net currency exposure financial position (1 114) 25 881 7 865 4 787 (30) 37 388 Fiven Annual Report 2022 Financial statements 71
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