VINCI - 2005 annual report

25.3.2 Cash and cash management financial assets
Net cash managed breaks down as follows:
CONSOLIDATED FINANCIAL STATEMENTS
31/12/2005 31/12/2004
VINCI SA Concessions Other business Total Total
(in € millions) and services lines (1)
I. Marketable securities and mutual funds 3,025.0 389.5 208.5 3,623.0 2,898.6
II. Negotiable debt securities and bonds
with an original maturity of less than 3 months 125.9 13.6 190.3 329.8 266.0
III. Negotiable debt securities with an original maturity of more than 3 months 341.8 341.8 477.3
Current cash management financial assets (I + II + III) 3,492.7 403.1 398.8 4,294.6 3,642.0
Cash 11.9 146.5 985.5 1,144.0 830.4
Bank overdrafts (18.9) (13.3) (572.8) (605.0) (380.5)
Net cash managed 3,485.6 536.3 811.6 4,833.5 4,091.9
(1) surpluses not included in the cash pooling system.
Cash surpluses are managed with the objective of earning a return close
to that of the money market, avoiding risks to capital while maintaining
a low level of volatility through a performance and risk monitoring system.
The investment vehicles used by the Group are mainly marketable securi-
ties and mutual funds and negotiable debt securities (in particular deposit)
and other such securities. They are measured and recognised at their fair
value (see Note 21 Cash management financial assets and cash).
26. FINANCIAL INSTRUMENTS
AND MANAGEMENT OF MARKET RISKS
In connection with its financial activities, VINCI has set up a framework
for the management and control of the various market risks to which it
is exposed, in particular interest rate, exchange rate and liquidity risks.
On the basis of an analysis of its various exposures to interest rate and
exchange rate market risks, VINCI uses various derivative financial instruments
with the objective of reducing such exposure and optimising its
borrowing costs and foreign exchange gains and losses.
These market risks are managed by the holding company in collaboration
with the business lines involved. In the case of subsidiaries that manage
their risks autonomously, in particular Cofiroute, coordination of their
financial management with VINCI’s finance department has been set up.
The derivative financial instruments used by the Group are recognised in
the balance sheet at their fair value, whether they are considered as hedges
or not.
Fair value of derivatives, by type:
31/12/2005 31/12/2004
(in € millions) Assets Liabilities Net Net
Interest rate derivatives (1) 243.8 (7.6) 236.3 255.8
Currency derivatives (2) 3.6 (4.6) (1.0) 13.1
Total derivative instruments 247.4 (12.1) 235.3 268.9
(1) See detail in Note 26.1.1.
(2) See detail in Note 26.3.4.
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