Hexagon Annual Report 2019

NOTE 24 FINANCIAL INSTRUMENTS FINANCIAL RISK The Group's principal financial liabilities, other than derivatives, comprise loans and borrowings, and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operation. The Group's principal financial assets include trade receivables, cash and cash equivalents that derive directly from its operations. The Group use some financial derivatives for hedging purposes. The Group is exposed to interest rate risk, liquidity risk, currency risk and credit risk. The Group's management regularly evaluates these risks and defines guidelines on appropriate financial risk governance framework for the Group. Procedures for risk management are adopted by the board and carried out by the chief financial officer in close cooperation with the subsidiaries. The Group may use financial instruments to hedge risks associated with interest rate and foreign currency fluctuations. The Group uses derivative financial instruments to minimize these risks under its strategy for interest and currency exposure. The accounting treatment of financial derivatives is described in note 2. (NOK 1 000) DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS THROUGH PROFIT OR LOSS EQUITY INSTRUMENTS DESIGNATED AT FAIR VALUE THROUGH OCI FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH OCI FINANCIAL INSTRUMENTS AT AMORTISED COST TOTAL ASSETS Other non-current assets 44 859 4 133 48 992 Trade receivables 438 562 438 652 Bank deposits, cash and cash equivalents 177 651 177 651 Total financial assets 44 859 0 0 620 346 665 295 LIABILITIES Non-current interest-bearing liabilities 1 298 058 1 298 058 Short-term loans 2 857 2 857 Forward exchange contracts 245 245 Trade payables and other current liabilities 572 580 572 580 Total financial liabilities 245 0 0 1 873 495 1 873 740 THE GROUP HAS THE FOLLOWING FINANCIAL ASSETS AND LIABILITIES DIVIDED INTO DIFFERENT CATEGORIES FOR ACCOUNTING TREATMENT AND RECONCILED AGAINST THE BALANCE SHEET ITEMS 31.12.2019 (NOK 1 000) DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS THROUGH PROFIT OR LOSS EQUITY INSTRUMENTS DESIGNATED AT FAIR VALUE THROUGH OCI FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH OCI FINANCIAL INSTRUMENTS AT AMORTISED COST TOTAL ASSETS Other non-current assets 367 367 Trade receivables 148 703 148 703 Bank deposits, cash and cash equivalents 138 531 138 531 Total financial assets 0 0 0 287 601 287 601 LIABILITIES Non-current interest-bearing liabilities 516 163 516 163 Short-term loans 5 769 5 769 Forward exchange contracts 4 294 4 294 Trade payables and other current liabilities 202 653 202 653 Total financial liabilities 4 294 0 0 724 586 728 879 THE GROUP HAS THE FOLLOWING FINANCIAL ASSETS AND LIABILITIES DIVIDED INTO DIFFERENT CATEGORIES FOR ACCOUNTING TREATMENT AND RECONCILED AGAINST THE BALANCE SHEET ITEMS 31.12.2018 49 135 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS