2007 - Pinguely Haulotte

2007
annual report # p93-94
Consolidated financial statements of December 31st, 2007
3.13 Stock option plans
The Group has implemented an
equity-settled share-based payment
compensation plan.
Stock options are granted to company
employees. These options are measured
at the grant date using the Black and
Scholes option pricing model. The main
assumptions of this method are
presented in note 23.
The fair value of options is recognized in
the income statement in personnel costs
on a straight-line basis over the period
from the grant date to the vesting date
with offsetting adjustment recognised
directly in equity.
In compliance with the standard’s
transition provisions, this treatment
concerns only plans granted after 7
November 2002 for which rights were
not vested on January 1st, 2005.
3.14 Assets and liabilities of disposal
group
IFRS 5 requires specific classification criteria
for disposal groups held for sale. A disposal
group is a group of current and noncurrent
assets with liabilities directly
associated with those assets that will be
transferred in a single transaction. This
disposal group is considered as held for
sale (classified accordingly at the end of
the fiscal year) when the following criteria
are met:
- It is available for immediate sale in its
present condition;
- The disposal is highly probable.
Assets of the disposal group that meet
criteria for classification as held for sale
shall be measured at the lower of carrying
amount and fair value less costs to sell.
Items that meet such criteria shall be
presented separately in the balance sheet
under current assets and liabilities.
Note 4
Management of financial risk
a) Foreign exchange risks
A significant portion of Haulotte Group
sales are in currencies other than the euro
including notably the US dollar and the
British pound sterling. Because sales of
Group subsidiaries are primarily in their
functional currency, transactions do not
generate foreign exchange risks at their
level.
The primary source of foreign exchange
risks for the Haulotte Group consequently
results from intercompany invoicing flows
when Group companies purchase
products or services in a currency not
their functional currency (exports of
manufacturing subsidiaries located in
the euro area and exporting in the local
currency of a sale subsidiary).
Such exposures are managed by
Haulotte Group SA. For the main
currencies, foreign exchange trading
positions in the balance sheet are partially
hedged using basic financial instruments
(forward exchange sales and purchases
against the euro).
b) Interest rate risks
The Group favours floating-rate debt
which provides it greater flexibility. To
hedge against interest rate risks, the Group
seeks to take advantage of market
opportunities according to interest rate
trends. There is no recourse to systematic
interest rate hedging.
To cover market risks (interest rate and
foreign exchange exposures), Haulotte
Group has recourse to financial
instrument derivatives. These derivatives
are destined to cover the fair value of
assets or liabilities (fair value hedges) or
future cash flows (cash flow hedges).
However, because financial instruments
held by Haulotte Group do not fully
comply with the criteria for hedge
accounting, changes in fair value are
recorded in income statement.
In compliance with the provisions of IAS
32 and 39, derivatives are recorded at fair
value. The fair value of assets and liabilities
traded on an active market is determined
on the basis of the market price at the
closing date for publicly traded
instruments.
c) Credit risk
Credit risk results primarily from exposure
to customer credit and notably
outstanding trade receivables and
transactions.
To limit this risk, the Group has
implemented rating procedures (internal
or independent) to evaluate credit risk
for new and existing customers on the
basis of their financial situation, payment
history and any other relevant information.
Credit risk is also limited by Haulotte
Group's ability in the event of default by
one of its customers to repossess the good
representing the receivable. Provisions for
collection losses are measured according
to this policy (note 3.7).
d) Liquidity risk
Haulotte Group cash management is
centralized. The corporate team manages
current and forecasted financing needs
for the parent company and subsidiaries.
All cash surpluses are invested by the
parent company at market conditions
in money market funds and term
deposits without risk to the capital.
Since 2005, the Group has had a 7-year
€360 million syndicated facility divided
into four tranches for the refinancing of
existing debt, the financing of capital
expenditures, the financing of acquisitions
and working capital requirements. At 31
December 2007, €79 million of this credit
line have been used.