VINCI - 2008 annual report

Consolidated fi nancial statements
23. Management of financial risks
The following disclosures present the Group’s exposure to its fi nancial risks, its objectives, its policy and its processes to measure and manage
the risks.
Given the level of its net fi nancial debt and of the associated fi nancial income and expense, VINCI has instituted a system to manage and monitor
the various fi nancial risks to which it is exposed, principally interest rate risk.
These fi nancial risks are managed in accordance with the management policies laid down by the Group’s Finance Department. In application of
these rules, the responsibility for identifying, measuring and hedging the fi nancial risks lies with the operational entity in question. On the other
hand, derivative fi nancial instruments are generally managed by the Group Finance Department on behalf of the subsidiaries in question.
Treasury committees meet regularly to analyse the main exposures and decide on management strategies for the entities that have the most
material exposure to fi nancial risks (ASF, Cofi route, VINCI Park, VINCI SA). These companies use the same tools as the VINCI holding company to
monitor fi nancial instruments, which enables information to be centralised.
In order to manage its exposure to market risks, the Group uses derivative fi nancial instruments, which are recognised in the balance sheet at
their fair value.
At the balance sheet date, the fair value of derivative fi nancial instruments breaks down as follows:
Non-current
Current
31/12/2008
(in € millions) Ref.
asset
asset (*)
Non-current
Current
liability
liability (*) Net
Interest rate derivatives: fair value hedges 23.1.2 109.8 44.4 (6.8) 147.3
Interest rate derivatives: cash fl ow hedges 23.1.3 0.7 (235.8) (10.3) (245.4)
Interest rate derivatives not designated as hedges 23.1.4 128.5 (85.6) 43.0
Interest rate derivatives 109.8 173.6 (235.8) (102.7) (55.1)
Foreign currency exchage rate derivatives: cash fl ow hedges
Foreign currency exchage rate derivatives:
23.3.1 5.0 (0.9) 4.1
hedge of net foreign investment 23.3.1 (0.7) (0.7)
Foreign currency exchage rate derivatives
not designated as hedges 23.3.1 25.3 (13.1) 12.2
Currency derivatives
Other derivatives
30.3 (14.7) 15.6
Total derivative fi nancial instruments 109.8 203.9 (235.8) (117.4) (39.5)
(*) The current part includes accrued interest not matured, amounting to €27.9 million at 31./12/.08.
238 VINCI __ 2008 ANNUAL REPORT
31/12/2007
Non-current
Current
(in € millions) Ref.
asset
asset (*)
Non-current
Current
liability
liability (*) Net
Interest rate derivatives: fair value hedges 23.1.2 12.1 27.6 (9.3) (1.6) 28.7
Interest rate derivatives: cash fl ow hedges 23.1.3 59.2 11.7 (6.0) (0.7) 64.2
Interest rate derivatives not designated as hedges 23.1.4 105.1 (30.1) 75.0
Interest rate derivatives 71.2 144.4 (15.3) (32.4) 167.9
Foreign currency exchage rate derivatives: cash fl ow edges
Foreign currency exchage rate derivatives: hedge of net
23.3.1 1.8 (0.6) (0.9) 0.3
foreign investment 23.3.1 0.8 0.8
Foreign currency exchage rate derivatives not designated
as hedges 23.3.1 6.8 (20.2) (13.5)
Currency derivatives 9.4 (0.6) (21.1) (12.3)
Other derivatives 0.9 14.1 (0.0) 14.9
Total derivative fi nancial instruments 72.1 167.9 (15.9) (53.6) 170.5
(*) The current part includes accrued interest not matured, amounting to €38.9 million at 31 December 2007.
23.1 Interest rate risk
Interest rate risk is managed within the Group, making a distinction between concessions, contracting activities and holding companies, as their
respective fi nancial profi les are not the same.
For the concession operating companies, interest rate risk is managed with two timescales: the long term, aiming to ensure and optimise the
concession’s economic equilibrium, and the short term, with an objective of optimising the average cost of debt within the budget framework
and depending on the situation in fi nancial markets.