2013-vinci-annual-report

22.2 Equity risk
At 31 December 2013, the Group held 44,744,871 VINCI shares (representing 7.4% of the share capital) acquired at an average price of €40.13.
An increase or decrease of the stock market price of these treasury shares would have no impact on the Group’s consolidated profit or loss
or equity.
Regarding assets to cover retirement benefit obligations, a breakdown by asset type is given in Note E.19.1 “Provisions for retirement benefit
obligations”.
22.3 Foreign currency exchange rate risk
266 VINCI 2013 ANNUAL REPORT
22.3.1 Detail of foreign currency exchange rate derivatives
Transactions to hedge currency risk designed to cover commercial or financial transactions break down as follows:
31/12/2013
Within Between Between After Notional
(in € millions)
1 year 1 and 2 years 3 and 5 years 5 years amount Fair value
Currency swaps (including cross-currency swaps) – – 162 226 388 (40)
Foreign currency exchange rate derivatives: fair value hedges – – 162 226 388 (40)
Currency swaps (including cross-currency swaps) 59 – 170 38 267 7
Forward foreign exchange transactions 70 – – – 70 (0)
Foreign currency exchange rate derivatives: hedges of net foreign investments 129 – 170 38 337 7
Currency swaps (including cross-currency swaps) 32 8 5 – 45 1
Forward foreign exchange transactions 98 5 4 – 107 –
Foreign currency exchange rate derivatives not designated as hedges for
accounting purposes
130 13 9 – 152 1
Total foreign currency exchange rate derivative instruments 259 13 341 264 876 (32)
31/12/2012
Within Between Between After Notional
(in € millions)
1 year 1 and 2 years 3 and 5 years 5 years amount Fair value
Currency swaps (including cross-currency swaps) – – 162 226 388 (7)
Foreign currency exchange rate derivatives: fair value hedges – – 162 226 388 (7)
Currency swaps (including cross-currency swaps) 14 60 157 18 249 (10)
Forward foreign exchange transactions 58 – – – 58 (0)
Foreign currency exchange rate derivatives: hedges of net foreign investments 73 60 157 18 308 (10)
Currency swaps (including cross-currency swaps) 13 25 1 – 39 (1)
Forward foreign exchange transactions 19 32 – – 51 (1)
Foreign currency exchange rate derivatives not designated as hedges for
accounting purposes
33 56 1 – 91 (1)
Total foreign currency exchange rate derivative instruments 105 116 320 244 786 (19)
22.3.2 Breakdown of long-term debt by currency
Debt breaks down as follows by currency:
(in € millions) 31/12/2013 31/12/2012
Euro 18,233 97.7% 17,594 97.4%
Swiss franc 247 1.3% 257 1.4%
Yen 98 0.5% 124 0.7%
US dollar 21 0.1% 30 0.2%
Sterling 10 0.1% 13 0.1%
Other currencies 46 0.2% 52 0.3%
Total long-term borrowings 18,655 100.0% 18,071 100.0%
Generally, the Group’s activities in foreign countries are financed by loans in the local currency.
Debts in foreign currency of subsidiaries of which the operating currency is the euro (mainly VINCI and ASF) have been hedged at their time
of issue and do not generate any exposure to exchange rate risk.
22.3.3 Nature of the Group’s risk exposure
As 74% of VINCI’s revenue is generated in the eurozone, the Group’s exposure to currency risk is limited. Transactions outside the eurozone are
generally made in the local currency for permanent establishments and, to a great extent, in euros and dollars, in the case of major export projects.
VINCI may find itself exposed to currency risk whenever, in isolated cases, the parent company provides finance to certain foreign subsidiaries,
and on cash flows intended to be paid to the parent company. This exposure is generally covered by cross currency swaps or forward exchange
transactions.
VINCI’s foreign currency risk management policy consists of hedging the transactional risk connected with subsidiaries’ ordinary operations.
However, VINCI does not systematically hedge the currency risk connected with its foreign investments, resulting in translation exposure.