Compagnie des Alpes // 2020 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

l detailed analytical reviews in order to corroborate the quantified data with seasonal and customer-attendance trends and to ensure that price changes are taken into account; l reconciliation between data from the ticketing systems, incoming payments and data recognised in the accounts. Accounting treatment of the concessions for ski areas Risk identified: The operation of the ski areas by Compagnie des Alpes lies within a complex legal framework: l the specifics of the mechanical-ski-lifts public service are recognised at the legislative and regulatory level via the Mountain Act of 9 January 1985, the major provisions of which were incorporated in the French Tourism Code; l public service concessions (PSC) signed between the subsidiaries of Compagnie des Alpes and the local authorities set the main economic parameters for the equilibrium of the PSC relative essentially to investments, fees paid, changes to prices and the devolution of assets at the end of the concession. We considered that the accounting translation of the elements in the life of these contracts is a key point of the audit, because recording transactions directly related to these contracts is complex: l each subsidiary signs a specific contract with the local authority upon which the ski area is dependent; l the accounting treatment of assets is specific to each of the concessions; l the determination of the recovery value of assets at the end of the concession may, according to the contracts, require the use of judgements and estimates by the management; l the management’s assumption that the concessions will be renewed made by the management when carrying out its impairment tests must take into account the latest discussions with the local authorities. Our solution: We have taken note of the legal commitments and transactions related to the implementation of these contracts. We have checked the correct accounting translation of these transactions, particularly with regard to the treatment of the concession assets and the investment commitments. Where applicable, we have corroborated our analyses by interviews with the Financial Department and Legal Department, notably to understand the judgements and estimates adopted. We took note of the negotiations in progress, in order to verify the reasonableness of the assumptions used by the Management and their consequences in terms of accounting treatment, in particular in the determination of the business plans used to perform the impairment tests. In particular, we verified the accounting treatment of the effects of the early termination of the PSC contracts in the Deux Alpes ski area, and assessed the reasonableness of the assumptions made by management, notably for the measurement of the fair value of the assets and the appropriateness of the presentation of assets and liabilities held for sale. We have also assessed the appropriate character of the information referred to in the consolidated financial statements, notably in Note 1.14 relating to the concessions. Impairment testing of intangible assets, property, plant and equipment, and IFRS 16 right-of-use assets Risk identified At 30 September 2020, the net value of intangible and tangible assets stood at €1,647 million compared with a balance sheet total of €1,990 million. These assets are composed of goodwill (€270 million, see Note 6.1), intangible assets (€78 million, see Note 6.2), property, plant and equipment (€1,128 million, see Note 6.3) and IFRS 16 right-of-use assets (€170 million, see Note 8). As indicated in Note 1.15 “Impairment of assets” to the consolidated financial statements, the recoverable amount of these assets is tested by Management as soon as events or changes in the market environment or internal factors indicate a risk of long-term loss of value and at least once a year for assets with an indefinite useful life. The Covid-19 pandemic and the lockdown measures decided by the governments of the countries in which the Group operates, have led to a complete halt in the activity of the Group’s business lines as of 14 March 2020. Given the impact of the pandemic on the risk rate and the Group’s activities, as indicated in the note “Highlights of the year - Consequences of the Covid-19 pandemic” and Note 6.1 “Goodwill”, the Group recorded an impairment of the carrying amount of its goodwill for a total amount of €48.8 million for the fiscal year ended 30 September 2020. We considered the valuation of these assets to be a key audit matter due to: l on the one hand, the health crisis related to Covid-19 which has had a significant impact on the Group’s activities; l secondly, the determination of their recoverable amount, based on discounted future cash flow forecasts that require the use of assumptions, estimates or assessments; l and, finally, the high sensitivity of these assumptions on the results of the impairment tests implemented, particularly in the very specific context of the Covid-19 pandemic. To determine the recoverable amount of these assets, the main assumptions, the methodology used and the sensitivity tests are described in Notes 1.15 and 6.1 to the consolidated financial statements, the latter presenting the various business recovery scenarios modelled by the Group in this context of uncertainty.

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Compagnie des Alpes I 2020 Universal registration document