51 / 164
CONSOLIDATED FINANCIAL STATEMENTS
51
LISI 2015 FINANCIAL REPORT
The graph below shows the Group's financial leeway over 10
years, giving a total borrowing amount of €254 million. The
difference with the current and non-current borrowings
shown above (€282 million vs. €254 million) is primarily due
to current banking facilities, employee profit-sharing and
leasing liabilities that are not included in the graph below:
-39.2
-47.5 -46.2
-32.7
-13.5
-42.7
-12.3 -12.3
-4.7
-2.9
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
-5
-15
-25
-35
-45
-55
Million euros
Debt amortization profile at 12/31/2015
2.5.3 Market risk
The main risks covered by the Group's financial instruments
are the foreign currency risk and the interest rate risk. The
fair value as at December 31, 2015 of the derivatives used in the
management of market risks is detailed below:
(in €'000)
12/31/2015
12/31/2014
On the
assets
side
On the
liabilities
side
On the
assets
side
On the
liabilities
side
Interest rate risk
management
Variable rate
payers swaps
1,893
2,269
Currency risk
management
Foreign exchange
derivatives
2,151
14,052 1,493
4,831
Total
2,151
15,945
1,493
7,100
Market risk is the risk of variation in market prices, such
as interest rates, affecting the Group result or the value of
financial instruments held. Managing market risk involves
controlling market risk and maintaining it within acceptable
limits, whilst optimizing the profitability risk ratio.
The Group buys and sells derivatives and supports financial
liabilities in order to manage market risk.
Hedging and market operations on interest rates, exchange
rates or securities using futures instruments are recorded
in accordance with the provisions of CRBF rules nos. 88-02
and 90-15. Commitments relating to these transactions are
posted to off-balance sheet accounts for the nominal value
of the contracts. As at December 31, 2015, the sum of these
commitments represented the volume of transactions that
remained unsettled at year-end.
The accounting principles applied vary according to the nature
of the instruments and the operator’s initial intentions.
The commitments are detailed in paragraph 2.8.4.1 of chapter 3
of this Annual Report.
2.5.3.1 Interest rate risk
The Group’s main exposure in terms of interest rate risk arises
from the exposure of its financial assets and liabilities at
variable rates to variations in interest rates, which could have
an impact on these cash flows.
Within the framework of its overall policy, the Group partly
converts its initially variable rate liabilities into fixed rate
liabilities, using financial instruments such as interest rate swaps.
These hedging instruments are negotiated on OTC markets
with banking counterparts, in a centralized manner by the
Group's Financial Department. They are not considered by the
Group to be hedging instruments and are recorded at fair value
to the income statement.