It
En15. Other current assets
| 31 December 2016 | 31 December 2015 | |
|---|---|---|
| Derivatives | 152 | 415 |
| Prepaid expenses - current portion | 32 | 5 |
| Receivables for grants | 98 | - |
| Receivables from employees and social security institutions | 50 | 1 |
| Indirect tax receivables | 32 | 116 |
| Deferred receivables under Law no. 808/1985 | 2 | - |
| Other related parties receivables (Note 32) | 51 | 33 |
| Fair value of the residual portion in portfolio of Ansaldo Energia | 138 | - |
| Other assets | 82 | 4 |
| 637 | 574 |
This item includes the fair value of 15% of the share capital of Ansaldo Energia and of the related put&call options, which will be sold upon the exercise of these options, by the parties, at a pre-arranged price of €mil. 117, in respect of which capitalised interest accrues at a yearly 6% rate (total €mil. 138 at 31 December 2016). In particular, Leonardo can exercise its put option between 30 June and 31 December 2017, while the call option of FSI is exercisable in the same period or before if some conditions occur. Considering that the expiry date of the options is nearing, the item was reclassified under current assets.
“Indirect tax receivables”, equal to €mil. 32 (€mil. 116 at 31 December 2015), mainly represent VAT receivables transferred from companies participating in the Group VAT mechanism. The changes during the year and the composition of assets by maturity, currency and geographical area are shown in Appendices nos. 5 and 6 to these Notes.
The table below provides the breakdown of derivatives.
| 31 December 2016 | 31 December 2015 | |||
|---|---|---|---|---|
| Assets | Liabilities | Assets | Liabilities | |
| Forward forex instruments | 150 | 274 | 412 | 411 |
| Derivatives covering debt items | 1 | 35 | 1 | 14 |
| Interest rate swaps | 2 | 4 | 2 | 3 |
| 153 | 313 | 415 | 428 | |
| Fair value at | ||||||||
|---|---|---|---|---|---|---|---|---|
| 31 December 2016 | 31 December 2015 | |||||||
| Assets | Liabilities | Net | Assets | Liabilities | Net | |||
| Interest-rate swaps | ||||||||
| Trading | 2 | (3) | (1) | 2 | (3) | (1) | ||
| Fair value hedge | - | - | - | - | - | - | ||
| Cash flow hedge | - | (1) | (1) | - | - | - | ||
| Currency forward/swap/options | ||||||||
| Trading | 41 | (41) | - | 411 | (411) | - | ||
| Fair-value hedges | 1 | (37) | (36) | 1 | (14) | (13) | ||
| Cash-flow hedges | 109 | (231) | (122) | 1 | - | 1 | ||
The cash flow hedge is the forward instrument hedging trade items denominated in foreign currency. Such item was not present last year since Leonardo, before the merger and acquisition transactions, did not carry out any trading activity.
Vice versa, the fair value hedge is the forward instrument hedging deposits and loans made in pound sterling and US dollars that fall under the Group’s financial centralisation, with reference to financial activities for the companies not falling under the One Company scope: the changes in fair value directly offset the realignment of the exchange rates applicable to loans and deposits.
Finally, trading forward instruments refer to transactions that the Leonardo Group finance department carries out with banks acting in the interest of the fully owned subsidiaries; these transactions are transferred to the Group companies that incur the related costs on a mirror-like basis.
The “interest rate swaps” with a total notional value of €mil. 400, classified as trading instruments, were placed into effect to pursue the management objectives of hedging part of the bonds issued by Leonardo and the Group companies. The impact on the income statement is described in the section on Financial Risk Management (Note 33).
The portion of the changes that had an impact on the income statement is described in Note 29.