Vilmorin & Cie - Annual report 2017-2018

Financial INFORMATION 5 ANNUAL REPORT Vilmorin & Cie 200 2017-2018 2.2.3 Information on the nominal value of instruments to hedge interest rates In order to manage the interest rate risks of its financial debts, Vilmorin & Cie uses derived instruments for which the notional outstanding sums are as follows: In millions of euros Nominal Due dates Market value 2019 2020 2021 2022 > 2022 Cash flow hedge operations 68.6 - - - 68.6 - Interest rate swap 1.5 Fair value operations through profit and loss (1) - - - - - - Interest rate swap - Total 68.6 - - - 68.6 - 1.5 (1) Operations ineligible for hedge accounting as determined by the standard IAS 39. Contractual cash flows associated with interest rate swap are paid at the same time as the contractual cash flows for loans with variable rates. The deferred amount in equity concerning hedge instruments is shown in the income statement for the period where the interest cash flow for the debt has an impact on the income. The inefficient part of hedge instruments was not significant on June 30, 2018. 2.2.4 Information on exposure to interest rates risks On the basis of net financial indebtedness on June 30, 2018, a variation of ±1% in interest rates after forward cover instruments would represent an extra financial charge or income limited to 0.6 million euros. 2.3 - Information concerning risks for shares and treasury shares Listed shares held by Vilmorin & Cie are subject to the risk of volatility characteristic of financial markets. Apart from consolidated securities, they can be divided up into three categories: securities in companies consolidated using the equity method: these concern for the most part the companies Seed Co (Zimbabwe), Australian Grain Technologies (Australia), Bio Seeds (Netherlands), Hengji Limagrain (China) and Canterra Seeds (Canada) (cf. Note 18), shares that are included in the portfolio “Financial assets held for sale” (cf. Note 17), other non-current financial assets. The risk concerning shares included in the portfolio “Financial assets held for sale” is mainly represented by a line of listed shares. There is a liquidity contract for Vilmorin & Cie treasury shares. On June 30, 2018, Vilmorin & Cie held 5,877 shares with a book value of 0.3 million euros. 2.4 - Information concerning liquidity risks Vilmorin & Cie’s Corporate Finance department manages liquidity risks by making short- or long-term funding available to subsidiaries as required. Optimization of liquidity is based on centralized management of Vilmorin & Cie’s subsidiaries’ cash surpluses and requirements. These operations are handled by Vilmorin & Cie’s Corporate Finance department mainly using cash-pooling conventions and intra-group loans on condition that this is authorized by local legislation. External funding is normally set up in a centralized manner by the Corporate Finance department in order to optimize the cost of funding and access to the banking market. In 2018, the main resources implemented by Vilmorin & Cie comprised: a bond loan of 450 million euros maturing in May, 2021, two mid-term Schuldschein loans for the amount respectively of: - 65 million euros, set up by Vilmorin & Cie in March 2013, of which 45 million euros mature in March 2020, and 20 million euros in March 2023, - 100 million euros set up on March 31, 2017, of which 15 million euros mature in July 2022, 50 million euros in March 2024, and 35 million euros in March 2027, a syndicated loan agreement of 300 million euros set up for Vilmorin & Cie, maturing in May 2021, and which was not used on June 30, 2018. Vilmorin USA Corp benefits from a syndicated loan agreement that was renewed in May 2017 for a total of 120 million US dollars, maturing in May 2022. On June 30, 2018, the conventions of existing financial commitments were respected. 5.1. Consolidated Financial Statements