2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 30.2. Fair value hierarchyfor financial instrumentsEntities are required to classify fair value measurements using a fairvalue hierarchy based on the valuation method used (quoted pricesor valuation techniques). The hierarchy has three levels as follows:■ level 1: financial instruments measured using quoted prices in anactive market;■ level 2: financial instruments measured using valuation techniquesbased on observable market data;■ level 3: financial instruments measured using valuation techniquesthat are not based on observable market data.The table below shows the fair values of financial assets and liabilitiesbased on this hierarchy at 31 December 2010:€ millionsAssetsQuoted price= level 1Observablemarket data= level 2Hierarchy of fair valuesNo observablemarket data= level 3 2010Available-for-sale financial assets - - 85 85Fair value hedges (assets) - 262 - 262Other derivative assets 1 5 - 6Cash equivalents 758 3 - 761LiabilitiesFair value hedges (liabilities) - 179 - 179Other derivative liabilities - 6 - 6Put options granted to owners of non-controlling interests - - 44 44The valuation techniques used to measure fair value are as follows:■■Available-for-sale financial assetsAvailable-for-sale financial assets do not include any listed securities.Their fair value is typically determined on the basis of widely usedvaluation techniques.If their fair value cannot be determined reliably, they are not includedin this note.Put options granted to owners of non-controlling interestsThe fair value of put options granted to owners of non-controllinginterests are measured in accordance with the contractual calculationterms and are discounted where applicable. These put options aremainly classified in Level 3. Put options whose price is consideredto be variable are not included in the above table.■Derivative liabilitiesDerivative financial instruments are valued (internally or externally)on the basis of the usual valuation techniques for this type ofinstrument. Valuation models are based on observable market data(mainly the yield curve) and counterparty quality. These instrumentsare mainly classified in Level 2.NOTE 31. FINANCIAL RISK MANAGEMENT OBJECTIVESAND POLICIESThe main risks associated with the Group’s financial instruments aremarket risks (currency, interest rate and equity risk), counterpartyrisk and liquidity risk.The Group uses derivative financial instruments such as interestrate swaps, currency swaps and forward instruments to manageand mitigate its exposure to interest rate and currency risk. Theseinstruments are either quoted on organised markets or over-thecounterinstruments transacted with first-class counterparties. Noderivative instruments are acquired for speculative purposes.110 Casino Group | Registration Document 2010