2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 31.1. Breakdown of derivative financial derivativesThe table below shows a breakdown of derivative financial instruments by type of risk and accounting classification:€ millions Note 2010Derivative assetsInterestrate riskCurrencyriskOthermarket risks 2009Financial instruments at fair value through profit or loss 22 - - - - 1Cash flow hedges 22 6 - 6 - 0Fair value hedges 28.5 262 262 - - 292TOTAL DERIVATIVE ASSETS 269 262 6 - 293of which current 119 112 6 - 116of which non-current 150 150 - - 176Derivative liabilitiesFinancial instruments at fair value through profit or loss 29 4 4 - - 11Cash flow hedges 29 2 1 2 - 1Fair value hedges 28.5 179 179 - - 249TOTAL DERIVATIVE LIABILITIES 186 184 2 - 261of which current 125 123 2 - 79of which non-current 61 61 - - 183At 31 December 2010, the IFRS cash flow hedge reserve totalled€(9) million (€(22) million at 31 December 2009). The ineffective portionof these cash flow hedges is not material.The fair value of derivative instruments that do not qualify for hedgeaccounting under IAS 39 amounted to €(4) million at 31 December2010 (€(10) million at 31 December 2009).Note 31.2. Market riskNote 31.2.1. Interest rate riskThe Group’s objective is to reduce its cost of debt by limiting theimpact of interest rate changes on its income statement. Groupstrategy therefore consists of dynamically managing debt by convertingall borrowings to variable rate in order to benefit from declines ininterest rates, while also setting up hedges as a protection againstrate increases.Various derivative instruments are used to manage interest rate risks,mainly interest rate swaps. Not all of these instruments qualify forhedge accounting; however, all interest rate instruments are used inconnection with the above risk management policy.Group financial policy consists of managing finance costs by combiningvariable and fixed rate derivatives.Sensitivity analysis to a change in interest rates€ millions 2010 2009Borrowings 978 1,179Finance lease liabilities 43 43Bank overdrafts and spot loans 316 352Total variable rate borrowings (excluding accrued interest) (1) 1,336 1,573Cash equivalents 1,526 1,617Cash 1,285 1,099TOTAL CASH AND CASH EQUIVALENTS 2,811 2,716NET POSITION BEFORE HEDGING (1,475) (1,143)Derivative financial instruments 3,501 2,028NET POSITION AFTER HEDGING 2,026 885Net position to be rolled over within one year 2,026 885Effect of a 1-point change in interest rates 20 9Average remaining duration of hedges 1 0.95Effect of a 1-point change in interest rates on finance costs 20 82010 finance costs, net 345 343Effect of a 1-point change in interest rates, as a % of finance costs, net 5.87% 2.44%(1) Adjustable rate fi nancial assets and liabilities are considered as maturing on the interest reset date. The above total does not include liabilities not exposed to interest rate risk,corresponding mainly to put options granted to owners of non-controlling interests and accrued interest.Registration Document 2010 | Casino Group111