VINCI - 2008 annual report

Consolidated fi nancial statements
23.4 Credit risk and counterparty risk
VINCI is exposed to credit risk in the event of default by customers. It is exposed to counterparty risk in respect of its investments of cash, commitments
received, acquisition of negotiable debt securities, marketable securities, and unused authorised credit facilities, fi nancial receivables
and derivative fi nancial instruments.
The Group has set up procedures to manage and limit credit risk and counterparty risk.
Trade receivables
It should be noted that nearly 40% of consolidated revenue is generated with public sector, or quasi-public sector, customers. Moreover, VINCI
considers that the concentration of counterparty risk connected with trade receivables is limited because of the large number of customers and
the fact that they are widely scattered across France and abroad. In foreign countries and in developing countries, the risk of non-payment is
generally covered by an appropriate insurance policy (Coface, documentary credit, etc.). Trade receivables are broken down in Note E.21.2 “Trade
receivables”.
Financial instruments
Financial instruments are set up with fi nancial institutions meeting the Group’s credit rating criteria. The Group has also set up a system of
counterparty limits to manage its counterparty risk. This system allocates maximum risk amounts by counterparty, defi ned by taking account of
their credit ratings as published by Standard & Poor’s, Moody’s and Fitch IBCA. These limits are regularly monitored and updated by the Group
Finance Department at Treasury Committee meetings on the basis of a quarterly, consolidated report.
The Group Finance Department also distributes instructions to the subsidiaries laying down the authorised limits by counterparty and the list
of authorised UCITS.
24. Carrying amount and fair value by accounting category
The following table shows the carrying amount and the fair value of fi nancial assets and liabilities, in the balance sheet, by accounting category
as defi ned in IAS 39:
31/12/2008 Accounting categories (*) Fair value
Balance sheet headings
and classes of instrument
244 VINCI __ 2008 ANNUAL REPORT
Financial
instruments
through
profi t or loss
Derivatives
designated
as hedges
Assets
measured
at fair
value
(fair value
option)
Availablefor-sale
fi nancial
assets
Loans
and
receivables
Liabilities
at
amortised
cost
Total
carrying
amount for
the class
Listed
prices
Internal
model
based on
observable
factors
Internal
model not
based on
observable
factors
Fair value
of the
class
Investments in listed
subsidiaries and associates 182.9 182.9 182.9 182.9
Investments in unlisted
subsidiaries and associates 119.8 119.8 119.8 119.8
Loans and collateralised
fi nancial receivables 209.9 209.9 209.9 209.9
I - Non-current fi nancial
assets 302.7 209.9 512.6 182.9 209.9 119.8 512.6
Interest rate derivatives –
fair value hedges 154.1 154.1 154.1 154.1
Interest rate derivatives –
cash fl ow hedges 0.7 0.7 0.7 0.7
Interest rate derivatives not
designated as hedges 128.5 128.5 128.5 128.5
Foreign currency exchage rate
derivatives – cash fl ow hedges 5.0 5.0 5.0 5.0
Foreign currency exchage rate
derivatives – hedge of net
foreign investment
Foreign currency exchage rate
derivatives not designated as
hedges
Derivatives – other instruments
25.3 25.3 25.3 25.3
II - Derivative fi nancial
instruments - assets 153.9 159.8 313.7 313.7 313.7
III - Trade receivables 11,561.5 11,561.5 11,561.5 11,561.5
Loans and collateralised
fi nancial receivables 44.4 44.4 44.4 44.4