VINCI - 2005 annual report

3. NET FINANCIAL DEBT UNDER THE IFRS
VINCI’s net financial debt under the IFRSs is defined as the sum of the
financial liabilities (gross financial debt) less treasury assets and the net
fair value of derivative financial instruments.
Treasury assets comprise cash, cash management financial assets (liquid
and short-maturity investments of cash) and collateralised financial
receivables, which are deposits guaranteeing long-term debts.
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VINCI 2005 ANNUAL REPORT
The following table shows the breakdown of VINCI’s net borrowing in the
IFRS balance sheet:
(in € millions) 01/01/2004 31/12/2004
Gross financial debt:
Non-current financial debt (5,754) (6,117)
Current financial liabilities (including bank overdrafts) (1,053) (1,125)
Sub-total (6,807) (7,242)
Treasury assets:
Cash 663 830
Cash management financial assets 3,506 3,688
Collateralised financial receivables 39 45
Sub-total 4,208 4,563
Fair value of derivatives:
Fair value of derivatives (assets) 242 349
Fair value of derivatives (liabilities) (135) (103)
Sub-total 107 246
Total net financial debt under IFRS (2,492) (2,433)
3.1 RECONCILIATION OF NET FINANCIAL DEBT (FRENCH GAAP AGAINST IFRS)
(in € millions) 01/01/2004 31/12/2004
Net financial debt under French GAAP (2,266) (2,285)
Treasury shares taken against equity (182) (88)
Current financial assets excluded from net financial debt (24) (38)
Other restatements (20) (22)
Net financial debt under IFRS (2,492) (2,433)
VINCI’s net financial debt at 31 December 2004 increases by €148 million
from €2,285 million under French GAAP to €2,433 million under
the IFRSs.
This difference can be explained mainly by the fact that treasury shares
are taken directly against equity under the IFRSs and are henceforth
excluded from the definition of treasury assets. These amounted to €88
million at 31 December 2004, less than at 1 January 2004 (€182 million),
as a result of the exercise of purchase options during the year.
Furthermore, the definition of treasury assets, which is more restrictive
under IFRS than under French GAAP, results in the exclusion from the
treasury assets taken into account in determining net borrowing of certain
financial receivables of which the liquidity is considered insufficient.