Registration Document BOUYGUES

5
Financial statements
Parent company financial statements
In the case of quoted securities, the average
quoted stock market price over the last month of
the financial year is used.
2.6 Other assets
Deferred charges mainly comprise the portion
of bond issue costs not covered by the issue
premium. In the case of convertible bonds, any
un amortised issue costs relating to bonds converted
into shares are offset against the share
premium on the newly-issued shares.
Bond redemption premium relates to bond issues
priced at the following percentages of nominal
value: 99.05% (October 2004 issue), 99.804%
(July 2005 issue), 97.203% (February 2006 issue),
99.657% (May 2006 issue), 99.812% (May 2006
issue), 98.662% (October 2006 issue), 99.441%
(July 2008 issue), and 99.651% (February 2010
issue).
2.7 Provisions
These mainly comprise:
> provisions for miscellaneous risks (including tax
inspections) and provisions for additional risks
relating to loss-making subsidiaries, established
where the negative net assets of a subsidiary are
not wholly covered by provisions for impairment
of Bouygues SA’s investment in and loans and/
or advances to that subsidiary;
> provisions for charges, including employee benefits
(bonuses, lump-sum retirement benefits,
long-service awards, etc.).
2.8 Hedging instruments
Bouygues SA uses hedging instruments to limit the
impact on the income statement of fluctuations in
exchange rates and interest rates.
These instruments share the following characteristics:
> they are limited to the following products: forward
currency purchases and sales, currency
swaps, cross currency swaps and purchases
of currency options for currency risk hedging
purposes, and interest rate swaps, future rate
agreements, and purchases of caps and collars
for interest rate risk hedging purposes;
> they are used solely for hedging and prehedging
purposes;
> they are contracted solely with high-quality
French and foreign banks;
> they carry no liquidity risk in the event of a
downturn.
Gains and losses on financial instruments used for
hedging purposes are recognised in the income
statement symmetrically with gains and losses
arising on the hedged item.
2.9 Retirement benefit
obligations
Methods and assumptions used in calculating
the obligation:
> projected unit credit method based on final
salary;
> benefits as defined in agreements or established
by custom within the company, taking into
account applicable collective agreements for
managerial, administrative, clerical, technical
and supervisory grade staff;
> obligation measured in accordance with
opinions and recommendations issued by the
ANC (the French national accounting standardsetter);
> vested rights as of 31 December 2011;
> employees classified in groups with similar
characteristics in terms of grade, age and length
of service;
> average monthly salary for each employee
group, uplifted by a percentage to reflect the
applicable rate of employer’s social security
charges;
> salary increase rate and discount rate: rates
revised annually to reflect actual trends;
> average employee turnover rate calculated on
the basis of average number of leavers over the
last five years;
> mortality by reference to 1993 mortality tables.
2.10 Consolidation
Bouygues SA is the ultimate parent company in
the consolidation.
BOUYGUES • 2011 Registration Document • FINANCIAL STATEMENTS • 273