+1 - Solvay

Financial
Cash and cash equivalents
Cash and cash equivalents amounted to EUR 575 million, up by EUR 142 million from end-2006.
EUR Million 2006 2007
Shares 0 3
Fixed-income securities 39 33
Term deposits 210 245
Cash 184 294
Cash and cash equivalents 433 575
The shares mentioned in the above table consist of investments in money market funds. Carrying amount
is an acceptable approximation of the fair value of the shares, fixed income securities and term deposits.
Liquidity risk
The financial debt matures as follows:
EUR Millions 2006 2007
The financial debt is repayable: 1 691 1 882
on demand or within one year 188 317
in year two 48 43
in years three to five 54 104
beyond five years 1 401 1 418
99
The above table gives the nominal amount repayable, undiscounted, and due at maturity. The Group staggers
the maturities of its financing sources over time in order to minimize its liquidity risk.
In addition to the above-mentioned financing sources, the Group also has access to the following instruments:
• a Belgian treasury bill program in an amount of EUR 400 million, of which EUR 143 million was used at the end
of 2007, or as an alternative a US commercial paper program in an amount of USD 500 million, unused at the end
of 2007. The higher ceiling of the two programs is fully covered by back-up credit lines which were unused
at the end of 2007;
• a EUR 850 million bank credit line (unused at end-2007), maturing in 2011;
• a EUR 400 million bank credit line (unused at end-2007), maturing in October 2013.
(30) Derivative financial instruments
The Solvay group uses derivatives to cover clearly identified foreign exchange and interest rate risks (hedging
instruments). However, the required criteria to apply hedge accounting according to IFRS are not met in all cases.
This means that this form of accounting is not always applicable when the Group covers its economic risks.
The Group’s exchange risk hedging policy is based essentially on the principles of financing its activities in local
currency, systematically covering transactional exchange risk at the time of invoicing (risks which are certain) and
monitoring and hedging where appropriate exchange rate positions generated by the Group’s activities, based on
expected cash flows.
Solvay Global Annual Report 2007