BIC - 2018 Registration document

FINANCIAL STATEMENTS

Consolidated financial statements

23-3

Interest rate risk

As Group Treasury is centralized, SOCIÉTÉ BIC has current accounts with its main subsidiaries. Credit balances in foreign currencies are swapped against the euro for a very short term and the euro is invested in money market UCITS and other short-term investments. Every day, Group Treasury adjusts the liquidity situation of the current accounts as a result of currency swaps realized on the market. This strategy, even though it uses exchange instruments, cannot be considered as a full foreign exchange risk management hedging program, as there is no definitive translation of bank accounts. It only relates to optimization of funding by SOCIÉTÉ BIC through foreign liquidity management.

As of December 31, 2018 BIC Group has no significant debt or related hedging instruments. The exposure to interest rate fluctuations on borrowings is very limited. All local funding needs are directly indexed on a variable rate. Borrowers’ positions are insignificant and are of too limited a time scale to require any relevant hedging.

Impact of interest rate and foreign exchange risk hedging on the consolidated financial 23-4 statements as of December 31, 2018

The following amounts have been booked as the fair value of derivatives as of December 31, 2018 (in thousand euros):

Net financial Income/ (expense) before tax (a) – Note 6

Other com- prehensive income before tax (a)

Income from operations – Note 4

Hedge qualification/ hedged risk

Non Current assets

Derivative instruments and revaluation

Current assets (b)

Current Liabilities

Non-current Liabilities

Hedging revaluation impact

Cash flow hedge/Foreign exchange risk

Commercial flows

-

(4,608)

(19,411)

5,058

44

(7,346)

(37)

Net investment/ Foreign exchange risk

Dividends

- -

-

(3,932)

-

-

(3,930)

-

Subtotal (1)

(4,608)

(23,344)

5,058

44 (11,276)

(37)

At fair value through P&L/Foreign exchange risk

Revaluation of cross-currency swaps backed by cash positions in foreign currencies

Subtotal (2)

249 249

-

-

231

-

(157)

-

TOTAL (1) + (2) (37) This corresponds to mark-to-market of hedging instruments in the portfolio at December 31, 2018, restated for the reversal of the mark-to-market of the portfolio of hedging (a) instruments as of December 31, 2017. Including options not yet exercised held by SOCIÉTÉ BIC representing current assets for 928 thousand euros. (b) (4,608) (23,344) 5,289 44 (11,433)

238

• BIC GROUP - 2018 REGISTRATION DOCUMENT •