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Note 21. Guarantees, liability engagements and other liabilities
€ million 2016 2015
Real estate mortgages
For subsidiaries 4 4
Pledged shares 58 28
Guarantees
For subsidiaries 72 81
Other liabilities and liability engagements
For own debt 15 4
Rent liabilities on machinery and fixtures
Falling due within a year 4 1
Falling due later 7 1
Rent liabilities on real estate
Falling due within a year 104 40
Falling due later 400 156
Foreign currency risks
The result of the Company's operating activities is affected by the amount of working capital financing granted by the Company to its foreign subsidiaries and in part also, in its capacity of the Group's parent company, the subsidiaries' hedgings against their parent.
The foreign currency exposure is hedged using foreign currency derivatives in accordance with the confirmed foreign currency risk policy. The fair value of foreign currency derivatives is calculated by measuring them based on quoted market prices at the balance sheet date.
The measurement of derivatives is based on direct market data, in other words, they are classified into level 2. The maximum credit risk of these derivatives corresponds to their fair value at the balance sheet date.
The results of derivatives are recognised in financial items.
Company's transaction exposure as at 31 Dec. 2016
€ million
USD SEK NOK PLN RUB BYN
Transaction risk -20.2 19.6 22.4 16.5 14.4 0.0
Hedging derivatives 31.3 -12.0 -18.2 -9.1 -17.6 0.0
Exposure 11.1 7.6 4.2 7.4 -3.1 0.0
Company's transaction exposure as at 31 Dec. 2015
€ million
USD SEK NOK PLN RUB BYN
Transaction risk -19.7 -11.2 23.9 0.0 13.4 0.0
Hedging derivatives 29.4 3.8 -18.7 0.0 -16.7 0.0
Exposure 9.7 -7.4 5.1 0.0 -3.3 0.0
The sensitivity analysis of transaction exposure shows the profit impact of a +/-10% exchange rate change on the Goup's foreign currency denominated acquisitions and hedging foreign currency derivatives.
Sensitivity analysis, impact on pre-tax profit as at 31 Dec. 2016
€ million
USD SEK NOK PLN RUB BYN
Change +/-10% 1.1 0.8 0.4 0.7 -0.3 0.0
Sensitivity analysis, impact on pre-tax profit as at 31 Dec. 2015
€ million
USD SEK NOK PLN RUB BYN
Change +/-10% 1.0 -0.7 0.5 0.0 -0.3 0.0
Derivatives
Fair values of derivative contracts
€ million
31.12.2016
Positive fair value
(balance sheet value)
31.12.2016
Negative fair value
(balance sheet value)
31.12.2015
Positive fair value
(balance sheet value)
31.12.2015
Negative fair value
(balance sheet value)
Currency derivatives 4.4 -5.4 12.2 -2.3
Notional amounts of derivative contracts
€ million
31.12.2016
Notional amount
31.12.2015
Notional amount
Currency derivatives 213.7 302.8
All currency derivatives mature in 2017.
€ million 2016 Fair
value
2015 Fair
value
Liabilities arising from derivative instruments
Values of underlying instruments as at 31 December
Interest rate derivatives
Interest rate swaps 40 -0.1 100 -0.0
Foreign currency derivatives
Forward and future contracts 193 -3.6 252 5.1
Outside the Group 174 -2.9 225 5.8
Inside the Group 19 -0.7 26 -0.6
Option agreements
Bought, inside the Group 0 -0.0 0 -0.0
Written, inside the Group 0 -0.0 1 -0.0
Currency swaps 20 2.7 50 4.9
Commodity derivatives
Electricity derivatives 22 0.0 19 -0.0
Outside the Group 11 -1.7 9 -7.2
Inside the Group 11 1.7 9 7.2