32. Derivative Financial Instruments

The fair value of the derivative financial instruments is as follows:

in thousands of EUR

31 December 2016

31 December 2015

Assets

Liabilities

Assets

Liabilities

Interest rate derivatives – cash flow hedges

-

4,243

-

1,922

Currency derivatives – cash flow hedges

5,223

675

1,201

1,162

Currency derivatives – fair value hedges

-

116

-

-

Total

5,223

5,034

1,201

3,084

Less non-current portion:

Interest rate derivatives – cash flow hedges

-

4,169

-

1,039

Current portion

5,223

865

1,201

2,045

The valuation of the derivatives is based on valuations provided by banks and other parties. In note 3.1.3 the maturity of the expected cash flows to occur is shown.

Interest rate derivatives

The nominal amount of the bank borrowings (see note 26) hedged by interest rate derivatives amounts to €300 million (2015: €470 million) which include €300 million (2015: €150 million) of 0% floors to hedge the impact of negative interest rates. The interest rate derivatives meet the requirements for hedge accounting in full.

Currency derivatives

The Group has transactional cash flows in multiple currencies and is exposed to the volatility of these currencies against the euro. The treasury policy is to hedge between 25% and 80% of the transactional cash flows based on a rolling 12-month forecast. Derivative financial instruments are aimed at reducing the exposure to adverse currency change. In relation to the Brexit event in 2016, the Group has hedged its British Pound Sterling transactional exposures to the higher end of this range.

Most of the currency derivatives meet the requirements for hedge accounting in full. The remaining currency derivatives that do not qualify for cash flow hedge accounting are carried at fair value through profit or loss as fair value derivatives.

At the end of 2016 the notional principal amounts of the outstanding forward foreign exchange contracts were:

in thousands of EUR

31 December 2016

31 December 2015

Currency

United States Dollar (USD)

58,360

40,652

British Pound Sterling (GBP)

32,312

9,098

Swedish Krona (SEK)

20,253

10,101

Polish Zloty (PLN)

13,533

10,637

Norwegian Krone (NOK)

11,465

8,369

Chilean Peso (CLP)

4,804

-

Danish Krone (DKK)

4,280

6,002

Czech Koruna (CZK)

4,145

3,985

Turkish Lira (TRY)

3,936

5,221

Hungarian Forint (HUF)

3,896

4,099

Peruvian Sol (PEN)

1,660

-

Colombian Peso (COP)

1,122

-

Swiss Franc (CHF)

996

653

Brazilian Real (BRL)

721

-

Russian Ruble (RUB)

594

353

All these foreign exchange deals are partially hedging underlying forecasted transactions of Group entities in the corresponding foreign currency.