Registration Document - Pernod Ricard

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4 Notes 106 ANNUAL CONSOLIDATED FINANCIAL STATEMENTS to the annual consolidated fi nancial statements spread and mandatory costs. These facilities have maturities ranging from 1 to 5 years. This borrowing enabled the Group to repay the amounts due under the syndicated loan facility agreed in August 2005, to finance the Allied Domecq acquisition price and to refinance certain debt owed by the Group. 7. Bonds On 6 December 2006, Pernod Ricard SA issued bonds in a total amount of €850 million, in two tranches with the following characteristics: ◆ Tranche 1: floating rate Tranche 1 is composed of €300 million of floating rate notes with a remaining period to maturity of 2 years (maturity date: 6 June 2011) which bear interest at EURIBOR 3 months plus 50 basis points. NOTE 18 Financial instruments 1. Fair value of financial instruments PERNOD RICARD ◆ Tranche 2: fixed rate Tranche 2 is composed of €550 million of notes with a remaining period to maturity of 4 and a half years (maturity date: 6 December 2013) which bear interest at a fixed rate of 4.625%. On 15 June 2009, Pernod Ricard SA issued €800 million of bonds with the following characteristics: remaining period to maturity of 5 and a half years (maturity date: 15 January 2015) and bearing fixed-rate interest of 7%. 8. Allied Domecq bonds At 30 June 2009, bonds issued by Allied Domecq Financial Services Ltd consist of a £450 million issue bearing a nominal interest rate of 6.625% maturing on 18 April 2011 and a £250 million issue bearing a nominal interest rate of 6.625% maturing on 12 June 2014. Fair Carrying Financial instruments value at amount at included In euro million Assets IAS 39 category 30.06.2009 30.06.2009 in net debt Trade receivables Receivables at amortised cost 936 936 - Other current assets Non-current financial assets: Receivables at amortised cost 185 185 - • Available-for-sale financial assets Available-for-sale financial assets at fair value through equity 39 39 - • Guarantees and deposits Financial assets at fair value through profit or loss 54 54 - • Investment-related loans and receivables Receivables at amortised cost 3 3 - • Other financial assets Financial assets at fair value through profit or loss 9 9 - Derivative instruments – assets Financial assets at fair value 23 23 - Cash and cash equivalents Financial assets at fair value through income 520 520 CASH AND CASH EQUIVALENTS Liabilities 520 Bonds Bank loans – current Financial liabilities at amortised cost and fair value 2,482 2,540 2,540 • Syndicated loan Financial liabilities at amortised cost 0 0 0 • Commercial paper Financial liabilities at amortised cost 250 250 250 • Other Bank loans – non-current Financial liabilities at amortised cost 116 116 116 • Syndicated loan Financial liabilities at amortised cost 8,088 8,088 8,088 • Other Financial liabilities at amortised cost 175 175 175 Finance lease obligations Financial liabilities at amortised cost 52 52 52 Derivative instruments – liabilities Financial assets at fair value 455 455 188 GROSS FINANCIAL DEBT - - 11,408 NET FINANCIAL DEBT - - 10,888 I REFERENCE DOCUMENT 2008/2009 I
The fair value of the debt is determined for each loan by discounting future cash flows on the basis of market rates at the balance sheet date, adjusted for the Group’s credit risk. For floating rate bank debt, fair value is approximately equal to carrying amount. The market value of instruments recognised in the financial statements at the balance sheet date was calculated on the basis of available market data, using standard discounted cash flow methods. The disparity of valuation models implies that these valuations do not necessarily reflect the amounts that could be received or paid if these instruments were to be settled in the market. The methods used are as follows: ◆ bonds: market liquidity enabled the bonds to be valued at their fair value; ◆ other long-term financial liabilities: the fair value of other longterm financial liabilities is calculated for each loan by discounting future cash flows using an interest rate taking into account the Group’s credit risk at the balance sheet date; ◆ derivative instruments: the fair value of foreign currency forwards and interest rate and foreign currency swaps was calculated using the market prices that the Group should pay or receive to settle these contracts. 2. Risk management Management and monitoring of financial risks is performed by the Financing and Treasury Department, which has ten staff members. This department, which is part of the Group Finance Department, manages all financial exposures and prepares monthly reporting to the attention of General Management. It processes or validates all hedging transactions in the context of a programme approved by General Management. All financial instruments used hedge existing or forecast hedge transactions or investments. They are contracted with a limited number of counterparts who benefit from a first class rating from specialised rating agencies. Management of liquidity risk At 30 June 2009, cash and cash equivalents totalled €520 million. An additional €1,532 million of medium-term credit facilities with banks were confirmed and remained undrawn at this date. Group funding is provided in the form of long-term debt (syndicated loan, bonds, etc.) and short-term financing (commercial paper, bank overdraft, etc.) which provide adequate financial resources to ensure the continuity of its business. Net short-term financial debt was €383 million. In addition, the Group’s bank and bond debt contracts include covenants. Breaches of these covenants could force the Group to make accelerated payments. As of 30 June 2009, the Group was in c ompliance with the covenants (consolidated EBITDA/net financing cost and Net debt/consolidated EBITDA) under the terms of its syndicated loans. Similarly , while the vast majority of the Group’s cash surplus is placed with branches of global banks enjoying the highest agency ratings, it cannot be ruled out that these Group investments may experience reduced liquidity and severe volatility. ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 4 Notes to the annual consolidated fi nancial statements Management of currency risk The Group prepares its financial statements in euros and is therefore exposed to fluctuations against the euro of other currencies in which its assets and liabilities are denominated (asset risk) or in which it carries out its operations (transaction and currency translation risks). Although certain hedging strategies can limit exposure, there is no absolute protection against the impact of exchange rate movements. Regarding asset risk, financing foreign currency-denominated assets acquired by the Group with debt in the same currency provides natural hedging. This principle was applied to the acquisition of Seagram, Allied Domecq and Vin&Sprit assets denominated in American dollars and Japanese yen. Movements in currencies against the euro (notably the American dollar) may impact the nominal amount of these debts and the financial costs published in euros in the consolidated financial statements, and this could affect the Group’s reported results. Regarding operational risk, due to its international exposure, the Group faces currency risks related to transactions carried out by subsidiaries in a currency other than their functional currency. In all cases, the Group policy is to invoice end customers in the functional currency of the distributing entity. Currency exposure generated by intrag roup billings between producer and distributor subsidiaries are managed through a monthly centralisation and netting process. This process involves most countries whose currencies are freely convertible and transferable and whose domestic laws allow their participation. This system hedges against net exposure using forward exchange contracts. Residual risk is partially hedged using financial derivatives (forward buying, forward selling or options) to hedge certain or highly probable non-Group operating receivables and payables. Sensitivity analysis of financial instruments to currency risks Financial liabilities classified as hedges of a net investment are essentially sensitive to fluctuations in the American dollar; a 1% increase or decrease in the dollar/euro exchange rate would affect Group shareholders’ equity by +/-€18 million. This impact would be offset by change in the translated value of the net investment being hedged. Management of interest rate risk At the time the syndicated loans for the acquisition of Seagram and Allied Domecq assets were put in place, the Group exceeded the hedging obligation required by the banks. The hedging portfolio includes swaps and interest rate options in addition to fixed-rate debt. Analysis of the sensitivity of financial instruments to interest rate risks (impacts on the income statement): I REFERENCE DOCUMENT 2008/2009 I PERNOD RICARD 107 ◆ ◆ a 50bp increase or decrease in (USD and EUR) interest rates would increase or reduce the cost of net financial debt by 4%; changes in the fair value of fair value hedges resulting from movements in the market rates of hedging and hedged instruments consist chiefly of:
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Reference Document 2008/2009
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Reference Document 2008/2009 This r
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1 PRESENTATION OF THE PERNOD RICARD
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2003 saw the Group re-enter the CAC
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The Company’s General Management
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Four sites were sold in 2008/2009:
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Environmental management The Group
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Ricard cemented this commitment by
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2 CORPORATE GOVERNANCE AND INTERNAL
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CORPORATE GOVERNANCE AND INTERNAL C
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Member’s first name and surname o
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Mr. Pierre Pringuet 59 years old, F
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Philip Morris Companies Inc. until
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◆ ◆ ◆ CORPORATE GOVERNANCE AN
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◆ ◆ ◆ CORPORATE GOVERNANCE AN
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◆ ◆ ◆ ◆ ◆ CORPORATE GOVER
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Statutory Auditors’ Report Report
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Risk factors 60 Risks in connection
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Analysis of business activity and r
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TOTAL MANAGEMENT REPORT 3 Analysis
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Cash and capital Reconciliation of
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Human resources Number of employees
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Directors’ compensation Compensat
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Mr. Patrick Ricard, Chairman of the
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In June 2007, the Committee decided
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Accordingly, Pernod Ricard’s E xe
Page 57 and 58: HISTORY OF ALLOCATIONS OF STOCK OPT
Page 59 and 60: Employee profit-sharing plans All e
Page 61 and 62: MANAGEMENT REPORT 3 Human resources
Page 63 and 64: Moreover, the Group may find itself
Page 65 and 66: Cubaexport’s application for rene
Page 67 and 68: Risks for consumers The Group has n
Page 69 and 70: Coverage Type of insurance Cover an
Page 71 and 72: Factoring agreement On 15 December
Page 73 and 74: Stolichnaya On 15 November 2000, Al
Page 75 and 76: 4 ANNUAL CONSOLIDATED FINANCIAL STA
Page 77 and 78: ANNUAL CONSOLIDATED FINANCIAL STATE
Page 79 and 80: Shareholders’ equity ANNUAL CONSO
Page 81 and 82: Annual c onsolidated cash flow stat
Page 83 and 84: ◆ f amendment to IAS 39 (Eligible
Page 85 and 86: Brands recognised in the context of
Page 87 and 88: 16.2 Investment-related l oans and
Page 89 and 90: 23. Earnings per share Basic and di
Page 91 and 92: 30.06.2008 In euro million Income s
Page 93 and 94: NOTE 8 Corporate income tax Analysi
Page 95 and 96: NOTE 10 Expenses by nature ANNUAL C
Page 97 and 98: Within the V&S acquisition, some ne
Page 101 and 102: At 30 June 2009, there was no reaso
Page 103 and 104: Changes in provisions for pensions
Page 107: ANNUAL CONSOLIDATED FINANCIAL STATE
Page 111 and 112: Classification of hedges and use of
Page 113 and 114: NOTE 23 Share-based payments Stock
Page 117 and 118: 3. In August 2006, the same competi
Page 119 and 120: Incorporated bodies Countries ANNUA
Page 121 and 122: Incorporated bodies Countries ANNUA
Page 123 and 124: I REFERENCE DOCUMENT 2008/2009 I PE
Page 125 and 126: Statutory Auditors’ R eport on th
Page 127 and 128: Balance sheet For the financial yea
Page 129 and 130: Cash flow statement For the financi
Page 131 and 132: Finally, income tax generated a gai
Page 133 and 134: the vesting period of the beneficia
Page 135 and 136: NOTE 4 Maturity of receivables and
Page 137 and 138: NOTE 9 Provisions PERNOD RICARD SA
Page 139 and 140: NOTE 11 Deferred income and adjustm
Page 141 and 142: PERNOD RICARD SA FINANCIAL STATEMEN
Page 143 and 144: EUR interest rate hedge Maturity PE
Page 145 and 146: In euro thousand Share capital Shar
Page 147 and 148: Dividends distributed during the la
Page 149 and 150: PERNOD RICARD SA FINANCIAL STATEMEN
Page 151 and 152: Directors concerned: ◆ Mr. Patric
Page 153 and 154: Directors concerned: ◆ Mr. Patric
Page 155 and 156: I REFERENCE DOCUMENT 2008/2009 I PE
Page 157 and 158: Statutory Auditors’ Report on the
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COMBINED (ORDINARY AND EXTRAORDINAR
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Thirteenth resolution COMBINED (ORD
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Nineteenth resolution COMBINED (ORD
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f f f f f f f COMBINED (ORDINARY AN
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7 ABOUT THE COMPANY AND ITS SHARE C
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Entitlement to dividends - Entitlem
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Powers of the Board of Directors Un
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ABOUT THE COMPANY AND ITS SHARE CAP
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GENERAL AUTHORISATIONS Type of secu
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ABOUT THE COMPANY AND ITS SHARE CAP
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Breakdown of share capital and voti
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Stock options exercised by Director
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Treasury share repurchase programme
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List of information published durin
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List of information published durin
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8 ADDITIONAL INFORMATION ON THE REF
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Reconciliation table Reference Docu
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ADDITIONAL INFORMATION ON THE REFER
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Annual financial report ADDITIONAL
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Registration Document - Pernod Ricard

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