Financial Derivatives
Using financial derivatives Augustea aims to minimise net risks related to freight rates, commodities’ price, exchange rates and interest rates.
Financial derivatives are only allowed for hedging purpose, also evaluating on an on-going basis the counterparty risk related to each executed operation. The chosen hedging structure can not imply additional financial or operational risks.
Therefore financial derivatives quoted on a regulated market are always preferred to those over-the-counter, and “plain vanilla” structures are preferred to more complex ones, whose negotiation is anyway restricted to extraordinary situations and for a limited time.
Derivatives can be transacted only with banking counterparties with a high credit rating and with a view of sharing risk, so that any single non-banking counterparty does not represent more than 5% of total transactions.
Each derivative negotiation must involve different counterparties and deals are signed basing on the best cost/counterparty risk combination.
A set of policies and guidelines defines control responsibilities and reporting lines to the CFO, the Board of Directors and the Internal Audit.
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