Compagnie des Alpes // 2020 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

Procedures for determining the recoverable amount The recoverable amount of groups of CGUs, as defined above, corresponds to the sum of the values in use of the CGUs comprising the groups of CGUs, which is determined by discounting projections of future cash flows from operating of the sites based on the medium-term plans (five years) approved by the Group’s Executive Management and presented to the Strategy Committee and to the Board of Directors, and using a terminal value based on the forecast future standardised cash flows to perpetuity generated by the asset under consideration. Support costs considered as reasonably allocable are taken into account in operating segments. For the impairment tests at 30 September 2020, the Group has chosen to apply the practical relief in which the value to be tested includes the right-of-use deducted from the lease liabilities. Projections from the business plan, the terminal value and the discount rate are determined in line with the situation prior to the application of IFRS 16. The projections resulting from the business plans, the terminal value and the discount rate do not take into account the application of IFRS 16. For the CGUs operated under concession agreements (Ski areas) or leases (Leisure parks), the CDA Group manages these contracts on a going concern basis (both in terms of site management and in terms of capital expenditure to maintain/increase its business). The Group measures the recoverable amount of the groups of CGUs on the assumption that its concession-holding activities will continue beyond the end of the concession, in light of the extensions already obtained in the past. The daily management and investment policy are therefore implemented with a view to maintaining or increasing the appeal of the leisure park or ski area concerned. FINANCIAL ASSETS Pursuant to IFRS 9, the non-current financial assets are broken down into three categories: l financial assets measured at amortised cost: These are financial assets whose economic model aims to receive contractual flows, and the contractual conditions of which provide for specified dates of flows corresponding only to repayments of capital and interest. They represent the loans and receivables linked to the shareholdings and the deposits and guarantees; l financial assets measured at fair value, with recognition as other comprehensive income, which cannot be recycled as income: They represent shareholdings of non-controlled companies; l financial assets measured at fair value through income: They mainly represent securities of non-consolidated controlled companies. This primarily concerns shareholdings of Ski areas in real estate agencies and lease or building ownership companies, which are not significant with regard to the consolidated financial statements (see Notes 6.7 and 6.8). Fair value is determined according to the methodology defined by IFRS 13, based on the three levels of fair value defined in Note 6.15. For listed securities, it corresponds to a market price. For unlisted securities, it is determined primarily by reference to recent transactions or by valuation techniques that incorporate reliable and observable market data. However, in the absence of observable 1.16

market data on comparable companies, the fair value of unlisted securities is most often assessed on the basis of discounted cash flow projections or the revalued net book value, determined from internal parameters (level 3 of the fair value hierarchy). INVENTORIES Inventories are stated at the lower of cost and net realisable value ( i.e. the market price less costs to sell). Inventories are measured at weighted average cost. OPERATING RECEIVABLES Accounts receivable are recognised at amortised cost. An impairment loss is recognised depending on the expected losses and the actual losses. Any impairment loss is recognised in profit or loss. CASH AND CASH EQUIVALENTS Cash and cash equivalents include petty cash, bank balances and short- term investments in money market investments. Such investments are readily convertible into cash at their nominal value, and the risk of a change of value is insignificant. Overdrafts are presented as liabilities in the balance sheet, under “Current borrowings”. TREASURY STOCK Treasury stock is recorded at acquisition cost with a corresponding reduction in shareholders’ equity. Treasury stock sale proceeds are credited to shareholders’ equity and not recognised in the income statement. 1.17 1.18 1.19 1.20 The CDA Group’s commitments with respect to retirement benefits derive from legal obligations and collective bargaining agreements applicable in the countries in which Group subsidiaries operate. In France, company commitments to permanent or seasonal employees are reflected either in premiums paid to insurance companies or in provisions. If the premium paid by a company only partly covers its commitments, a provision is funded for the remainder. The commitments are calculated for all Group employees in France, except for seasonal workers in the Leisure parks segment, where turnover is extremely high. It is thus considered unlikely that these workers will still be employed by the Group when they retire. The total of these commitments is determined on the basis of the current salaries of employees by calculating the bonuses that will be paid to employees upon retirement, having regard to their seniority at that date. Gains and losses resulting from changes in actuarial assumptions, plus the impact of regulatory changes, are recognised in shareholders’ equity. Supplementary pension benefits granted to executives of certain subsidiaries are revalued each year. 1.21 PROVISIONS Provisions for retirement bonuses

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Compagnie des Alpes I 2020 Universal registration document