VINCI - 2005 annual report

2. RELATIONS BETWEEN THE PARENT COMPANY
AND SUBSIDIARIES
2.1 THE ROLE OF THE VINCI HOLDING COMPANY AS REGARDS ITS SUBSIDIARIES
The VINCI holding company has no operational activities of its own.
The Group’s operational activities are carried out by a large number of
subsidiaries (there were 1,704 consolidated entities at 31 December
2005), which are grouped under four business line lead companies:
– VINCI Concessions, VINCI Energies, Eurovia, and VINCI Construction,
Moreover, VINCI Immobilier, directly owned by VINCI, carries out the
property activities previously carried out by Sorif and Elige.
The holding company provides leadership and supervisory functions
for the Group’s operating entities, supplying services and assistance to
its subsidiaries in the following areas:
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VINCI 2005 ANNUAL REPORT
– participation in the drawing up and execution of subsidiaries’ strategies,
in acquisitions and disposals, and in the study and implementation
of industrial and commercial synergies within the Group;
– provision of expertise in administrative, legal, human resources, tax,
fi nancial and communication matters;
– provision of benefi ts associated with the Group’s size and reputation,
such as for example easier access to internationally recognised partners,
optimisation of terms for fi nancing, purchases and insurance,
facilitation of relations with public authorities, public relations, etc.
2.2 MOVEMENTS OF FUNDS BETWEEN THE VINCI HOLDING COMPANY
AND ITS SUBSIDIARIES
The main movements of funds between the VINCI holding company and
its subsidiaries, other than the payment of dividends, are as follows:
– payment for the holding company’s assistance to its subsidiaries: VINCI’s
subsidiaries pay it a fee corresponding to the costs borne, recharged on
the basis of the services provided. For 2005, fees for assistance paid to
VINCI by its subsidiaries amounted to €66 million;
– centralised cash management: in general, subsidiaries’ cash surpluses
are usually transferred through a cash pooling system to the holding
company, which in return meets the subsidiaries’ fi nancing needs. The
holding company acts on the money and fi nancial markets on its own
behalf or on its subsidiaries’ behalf, investing and borrowing funds as
necessary;
– VINCI may also afford medium-term loans to certain subsidiaries. At
31 December 2005, amounts due on such loans amounted to
€8.6 million;
– regulated agreements: please refer to the Report of the Statutory Auditors
on regulated agreements on page 293.