215
Considering the market level of interest rates, the Group
entered new interest rate swaps in March 2012 with a notional
value of Euro 100 million as a partial hedge against future
variable interest rate payments in the period 2012-2016,
taking the nominal value of hedges covering this period to
Euro 200 million.
Interest rate swaps on loans totalling Euro 500 million expired
in May 2012. New hedges with a total nominal value of Euro
480 million, covering the period 2012-2014, came into effect
on the same date.
Interest rate swaps have a notional value of Euro 680 million
at 31 December 2012 and are hedging derivatives that qualify
as cash flow hedges (Euro 655 million at 31 December 2011).
Such financial instruments convert the variable component of
The ineffective portion of cash flow hedges had a negligible negative post-tax impact, compared with Euro 1 million in 2011,
reported in the income statement under “Finance costs”.
interest rates on loans received into a fixed rate of between
1.1% and 3.7%.
Forward currency contracts have a notional value of Euro
1,971 million at 31 December 2012 (Euro 1,758 million at 31
December 2011); total notional value at 31 December 2012
includes Euro 728 million in derivatives designated as cash
flow hedges (Euro 779 million at 31 December 2011).
At 31 December 2012, like at 31 December 2011, almost all the
derivative contracts had been entered with major financial
institutions.
Metal derivatives have a notional value of Euro 614 million at
31 December 2012 (Euro 548 million at 31 December 2011).
9. CASH AND CASH EQUIVALENTS
These are detailed as follows:
The following table shows movements in both reporting periods in the cash flow hedge reserve for designated hedging derivatives:
Cash and cash equivalents, deposited with major financial
institutions, are managed centrally by Group treasury
companies or by subsidiaries under the supervision of the
Prysmian S.p.A. Finance Department.
Cash and cash equivalents managed by Group treasury
companies amount to Euro 354 million at 31 December 2012
compared with Euro 353 million at 31 December 2011.
For additional details about the change in cash and cash
equivalents, please refer to Note 37. Statement of cash flows.
(in millions of Euro)
2012
2011
Gross reserve
Tax effect
Gross reserve
Tax effect
Opening balance
(25)
8
(19)
6
Changes in fair value
(15)
5
(14)
4
Release to other finance income/(costs)
11
(3)
5
(1)
Release to exchange gains/(losses)
(1)
-
(4)
1
Reclassification to other reserves
-
-
-
-
Release to finance costs/(income)
-
-
2
(1)
Release to construction contract costs/(revenues)
(4)
1
5
(1)
Closing balance
(34)
11
(25)
8
(in millions of Euro)
31 December 2012
31 December 2011
Cash and cheques
7
10
Bank and postal deposits
805
717
Total
812
727
