This note contains information concerning the contractual provisions for the Group's interest-bearing loans and other financial liabilities that are measured at amortised cost.
(in millions of euros) | 31 December 2020 | 31 December 2019 |
Non-current liabilities | ||
Private loans | 1,113 | 600 |
Other financial liabilities | - | 39 |
Currency derivatives | 2 | 9 |
Commodity derivatives | 15 | 8 |
Total | 1,130 | 656 |
Current liabilities | ||
Private loans | 50 | 58 |
Bank overdrafts | 17 | 40 |
Commodity derivatives | 14 | 1 |
Total | 81 | 99 |
Total liabilities | 1,211 | 755 |
In 2020, the Group had a net amount of €507 million in new private loans.
The ‘Private loans’ item includes a debt payable by the Group to the Ministry of Infrastructure and Water Management of €114 million (2019: €148 million) associated with the deferred payments of franchise fees. Of that amount, €82 million has been included under ‘Non-current liabilities’, for the portion that is due to be paid after 2021. The portion that will be paid in 2021 (€33 million) is recognised in ‘Current liabilities’. The interest rate is fixed at 3.027%. The terms and conditions of the loan were agreed in detail with effect from 1 January 2015 under the main rail network franchise.
The other private loans have terms expiring between 2021 and 2029 and interest rates ranging from 0.01% to 1.7%.
The reconciliation of changes in liabilities resulting from financing activities is as follows:
(in millions of euros) | Private loans | Bank overdrafts | Other financial liabilities | Interest rate swaps used for hedging | Currency derivatives | Commodity derivatives | Lease liabilities | Total |
Balance as at 1 January 2019 | 646 | 19 | 48 | 2 | 4 | 33 | 752 | |
Repayment of borrowings | -454 | -420 | -874 | |||||
Addition of loans | 400 | - | 400 | |||||
Total net cash flow from financing activities 2019 | -54 | - | - | - | - | - | -420 | -474 |
New finance leases | 826 | 826 | ||||||
Movements in working capital | -18 | 18 | - | |||||
Currency differences | 53 | 53 | ||||||
Other movements | 6 | -3 | 9 | 5 | - | 17 | ||
Balance as at 31 December 2019 | 658 | 40 | 39 | - | 9 | 9 | 2,109 | 2,864 |
Repayment of borrowings | -494 | -481 | -975 | |||||
Addition of loans | 1,001 | - | 1,001 | |||||
Total net cash flow from financing activities 2020 | 507 | - | - | - | - | - | -481 | 26 |
New finance leases | 518 | 518 | ||||||
Movements in working capital | 23 | -23 | - | |||||
Currency differences | -51 | -51 | ||||||
Other movements | -25 | -39 | -7 | 20 | -29 | -80 | ||
Balance as at 31 December 2020 | 1,163 | 17 | - | - | 2 | 29 | 2,066 | 3,277 |
Accounting policy
Non-derivative financial instruments
On initial recognition, these instruments are measured at fair value plus any directly attributable transaction costs. After initial recognition, loans and receivables are measured at amortised cost using the effective interest method.
Derivative financial instruments (derivatives)
The Group holds derivatives to hedge its foreign currency, interest rate and commodity risks. On initial recognition, derivatives are measured at fair value, which is the same as the cost applicable on that date. Attributable transaction costs are charged to the income statement when they are incurred. After initial recognition, derivatives are measured at fair value and any changes are accounted for as described below.
Hedge accounting
The method for recognition of the result depends on whether hedge accounting is used and, if so, whether the hedging relationship is effective. If the hedging relationship is effective, hedge accounting is used for these derivatives. When a hedging transaction is entered into, the hedging relationship is documented. Regular assessments are performed to determine if the hedging transaction was effective throughout the past period and whether the hedging transaction is expected to be effective throughout the coming period. If the hedging instrument expires, is sold, terminated or exercised or no longer meets the criteria for hedge accounting, application of hedge accounting ends with immediate effect.
Cash flow hedges
If a derivative is classified as a hedge for variability in cash flows ensuing from a particular risk associated with a recognised asset or liability, or if a highly probable forecast transaction could affect profit or loss, the effective portion of the changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of the changes in the fair value of the derivative is recognised directly in the income statement. The accumulated amount is reclassified to the income statement in the same period in which the hedged position affects the income statement.
Fair value hedges
Changes in the fair value of a derivative hedging instrument that is classified as a fair value hedge are charged or credited to the income statement together with the changes in the fair value of the assets and liabilities (or groups thereof) insofar as they are attributable to the hedged risk.
If a hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, hedge accounting is discontinued prospectively. The cumulative gain or cumulative loss that was previously recognised in equity remains in equity until the forecast transaction has occurred. The amount recognised in equity is reclassified to the income statement (under net change in the fair value of the cash flow hedges reclassified from equity) in the same period in which the hedging instrument affects the income statement.
Economic hedges
Hedge accounting is not applied to derivatives that are used as economic hedges of assets and liabilities denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in the income statement as part of exchange rate gains and losses.
Energy hedging
The Group uses accrual accounting for commodity derivatives intended for its own use, under the exception allowed by IAS 39.5 insofar as the requirements of IAS 39.5 are met. This is applicable to purchases of diesel and fuel oil and energy in the Netherlands and is discussed in the section on risks and in ‘Off-balance sheet commitments’. The other commodity derivatives, which do not meet the criterion of being intended for the Group’s own use, are measured at fair value, and hedge accounting is used where possible.