Pharmaceuticals Sector - Solvay

90
Solvay Global Annual Report 2005
Identical fi nancial instruments relating to the same operation are not included in the table below.
EUR million Notional
amount
Foreign currency derivatives
2004 2005
Fair value Notional
amount
Fair value
Foreign exchange contracts and swaps 358 5 624 -4
Options 154 2
Interest rate derivatives
Swaps 1 004 3 1 029 1
Other 15 0
Other derivatives 0 0 0 0
Total derivative fi nancial instruments 1 362 8 1 822 -1
Credit risk management
The Group is exposed to the risk of insolvency of the banks which owe it money, corresponding for example, but
not exclusively, to deposits of whatever duration. The bank counterparty risk is managed centrally by setting bank
ceilings based on counterparty quality as estimated by the rating agencies (Moody’s and Standard & Poors). The
respecting of these limits is controlled at regular intervals.
(32) Other current liabilities
Other current liabilities rose by EUR 247 million compared with 2004. EUR 143 million of this increase is due to
Fournier.
(33) Commitments to acquire tangible and intangible assets
EUR million 2004 2005
Commitments for the acquisition of tangible and intangible assets 25 26
of which: JV’s 4 1
(34) Contingent liabilities
EUR million 2004 2005
Liabilities and commitments of third parties guaranteed by the company 130 151
Pledges given or irrevocably committed by Group companies on their own assets
as security for their own or third-party liabilities and commitments
Commitments resulting from technical guarantees attached to sales of goods or
services
106 187
0 0
Additional milestones and earn-outs for Fournier 0 290
Litigation and other major commitments 34 31
Additional milestones (EUR 290 million) and future earn-outs depend on market conditions and future product
performances.
EUR 24 million under the litigation and other major commitments heading consists of a contingent liability linked to
the supply of ethylene (2004: EUR 28 million).