6 - Vicat

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20Financial information concerning the asset base,the financial condition and the results of the issuer20.2. HISTORICAL FINANCIAL INFORMATIONNOTE 17 FINANCIAL INSTRUMENTSForeign exchange riskThe Group’s activities are carried out by subsidiariesoperating almost entirely in their own country andlocal currency. This limits the Group’s exposure to foreignexchange risk. These companies’ imports andexports denominated in currencies other than theirown local currency are generally hedged by forwardcurrency purchases and sales. The foreign exchangerisk on intercompany loans is hedged by the companieswhen the borrowing is denominated in a currencyother than their currency of account.The table below sets out the breakdown of the totalamount of Group’s assets and liabilities denominatedin foreign currencies, primarily in U.S. dollars, as atDecember 31, 2009 :(millions) USD EurosSwissfrancAssets 128.6 13.3 28.0Liabilities andoff-balance sheetcommitments (658.4) (20.2)Net position beforerisk management (529.8) (6.9) 28.0Hedging instruments 386.9 5.2 (28.0)Net position afterrisk management (142.9) (1.7)The Euros position does not include a loan of 20 millioneuros granted to Sococim Industries in which thefunctional currency is the CFA Franc, which has fixedparity with the euro.The net position after risk management includes a125 million dollars loan to Kazakhstan, for which thereis no hedge market.The hypothetical loss on the net currency positionarising from an unfavorable and uniform change ofone centime of the operating currency against theU.S. dollar, would amount to a loss of 1.1 million euros(including 0.9 million euros for the Kazakhstanloan).Moreover, the principal and interest due on a loanoriginally issued by the Group in U.S. dollars (400 millionUS Dollars) were converted into euros through aseries of cross currency swaps, included in the portfoliopresented below.Interest rate riskAll floating rate debt is hedged through the use ofcaps on original maturities of 2, 3, 5, 10 and 12 yearsand of swaps on original maturities of 3 years.The Group is exposed to interest rate risk on its financialassets and liabilities and its short-term investments.This exposure corresponds to price riskfor fixed-rate assets and liabilities, and cash flow riskrelated to floating-rate assets and liabilities.The Group estimates that a uniform increase or decreaseof 100 basis points in interest rates would havea non significant impact on its financial result and onthe group net equity.Liquidity riskAt December 31, 2009, the Group had 609 millioneuros in unused confirmed lines of credit that havenot been allocated to the hedging of liquidity risk oncommercial paper (603 million euros at December31, 2008).The Group also has a 152 million euro commercialpaper issue program. At December 31, 2009, 136million euros in commercial paper had been issued.Commercial paper consists of short-term debt instrumentsbacked by confirmed lines of credit in theamounts issued and classified as medium-term borrowingsin the consolidated balance sheet.Unused confirmed lines of credit are used to coverthe risk of the Group finding itself unable to issue itscommercial paper through market transactions. AtDecember 31, 2009, these lines matched the shortterm notes they covered, at 136 million euros.Some middle-term or long-term loan agreementscontain specific covenants especially as regards compliancewith financial ratios, reported each semester,which can lead to an anticipated repayment (accelerationclause) in the event of non-compliance. Thesecovenants are based on a profitability ratio (leverage: net debt/consolidated EBITDA) and on capitalstructure ratio (gearing : net debt/consolidatedshareholders’ equity) of the Group or its subsidiariesconcerned. Furthermore, the margin applied to somefinancing operations depends on the level reached onone of these ratios.154 VICAT - 2009 registration document
Financial information concerning the asset base,20the financial condition and the results of the issuer20.2. HISTORICAL FINANCIAL INFORMATIONConsidering the small number of companies concerned, essentially Vicat SA, the parent company of the Group, thelow level of gearing (31.4 %) and leverage (138 %) and the liquidity of the Group’s balance sheet, the existence of thesecovenants does not constitute a risk for the Group’s financial situation. At December 31, 2009, the Group is compliantwith all ratios required by covenants in financing contracts.Analysis of the portfolio of derivatives at December 31, 2009 :(in thousands of currency units)Nominalvalue(currency)Nominalvalue(euro)Marketvalue(euros)< 1 year(euro)Current maturity1 - 5 years(euro)> 5 years(euro)Fair value hedgesComposite instruments- U.S. dollar cross currency swapfixed / floating 200,000 ($) 138,831(1)(30,514) (14,025) (8,408) (8,081)Cash flow hedgesComposite instruments- U.S. dollar cross currency swapfixed / fixed 200,000 ($) 138,831(2)(38,678) (15,138) (11,564) (11,976)Other derivativesInterest rate instruments- Euro Caps 360,000 (€) 360,000 (1,055) (387) (668)- Dollar Caps 40,000 ($) 27,766 32 32- Dollar Swaps 30,000 ($) 20,825 (1,099) (1,099)Exchange instruments- Hedging for Vicat loan to Vigier(VAT Vicat) 28,000 (chf) 18,873 (31) (31)- Hedging for Vicat loan to NCC(VAT Vicat) 45,000 ($) 31,237 (57) (57)- Hedging for Parcifim loan toRavlied (AAT Ravlied) 4,700 (€ ) 4,700 (37) (37)- Hedging on acquisitions of rawmaterials 6,052 ($) 4,201 (18) (18)(71,457)In accordance with of IFRS 7, the breakdown of financial instruments valued at fair value by hierarchical level of fairvalue in the consolidated statement of financial situation is as follows as of December 31, 2009 :(in millions of euros) December 31, 2009Level 1 : instruments quoted on an active market 178.1 Note 12Level 2 : valuation based on observable market information (71.5) see aboveLevel 3 : valuation based on non-observable market information 16.4 Note 9(1)Offset by a 32.23 million euros improvement in debt(2)Offset by a 37.76 million euros improvement in debt2009 registration document - VICAT 155
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egistrationdocument& financialannua
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2STATUTORYAUDITORS2.1. Incumbent au
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Selected financial information3.1.
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Risk factors4 4.1. RISKS RELATING T
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Risk factors4 4.4. MARKET RISKSThe
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INFORMATION ABOUT THE COMPANY5.2. I
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BUSINESS OVERVIEW6 6.1. OVERVIEW OF
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BUSINESS OVERVIEW66.3. DESCRIPTION
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BUSINESS OVERVIEW66.3. DESCRIPTION
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BUSINESS OVERVIEW6.3. DESCRIPTION O
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BUSINESS OVERVIEW6.4. DEPENDENCY FA
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organisation chart77.2. INFORMATION
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organisation chart77.2. INFORMATION
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8Real estate,factories andequipment
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Real estate, factories and equipmen
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EXAMINATION OF THE FINANCIAL CONDIT
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9EXAMINATION OF THE FINANCIAL CONDI
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1010.2.CASH FLOW AND EQUITYCASH FLO
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1010.3.CASH FLOW AND EQUITYINDEBTED
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11RESEARCH ANDDEVELOPMENT,PATENTS A
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12INFORMATIONON TRENDS12.1. Recent
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1212.2.INFORMATION ON TRENDSTRENDS
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13PROFITFORECASTSOR ESTIMATESThe Co
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1appendixReport by the president on
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1appendixReport by the president on
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appendix2Statutoryauditors'reportpr
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appendix3ANNUALINFORMATION(ARTICLE
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3appendixANNUAL INFORMATION5. Decla
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4appendixELEMENTS CONSTITUTING THE
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GLOSSARYAdditiveAggregateAuto-level
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GLOSSARYClinkerisationCoalCoatingCo
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GLOSSARYGranulometryGrindingGrindin
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GLOSSARYPrecalcinatorCombustion cha
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GLOSSARYType of cementVibrationWork
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