Compagnies des Alpes // 2019 Universal Registration Document
5 FINANCIAL INFORMATION
Consolidated financial statements
1.12 INTANGIBLE ASSETS The intangible assets acquired appear on the balance sheet at their amortised cost. When the Group measures brands and trademarks, following analysis, these are considered as having inde fi nite useful lives. They are thus not amortised and are instead tested for impairment annually (see Note 6.1). This in particular applies to (see Note 1.14): l usage rights: the intangible rights to operate the ski lifts of ADS (Les Arcs/Peisey), SEVABEL (Les Ménuires), SCV Domaines Skiables (Serre Chevalier), GMDS (Flaine), STVI (Val-d’Isère) and DAL (Les Deux Alpes); l the concession for the use of the highway interchange giving access to Parc Astérix, which expires in 2086 (see Note 1.14 below); and l the right to use the Futuroscope brand until 2026. Intangible assets and other use rights to assets, the duration of which is directly linked to a concession agreement or lease, are amortised up to the date of expiry of such contracts.
l ROCE (return on capital employed) and operating ROCE on sites: this measure allows measuring of the pro fi tability of the Group’s invested capital and the Group’s principal business lines, namely, Ski areas and Leisure parks. It corresponds to the percentage, for each business line and the total for both business segments, of the after tax net operating income on the consolidated net asset amount determined as follows: l after tax net operating income: it is determined after deducting a theoretical tax expense by applying a standard tax rate, l net assets used excluding goodwill include: l non-current assets in net amount after exclusion of goodwill, l working capital requirement, l deferred tax assets net of deferred tax liabilities, l current provisions. The operating ROCE on sites is determined on the basis of the aggregates indicated above for each of the business lines, after the exclusion of goodwill; l net debt: corresponds to gross borrowings net of cash and cash equivalents.
1.13 PROPERTY, PLANT AND EQUIPMENT Items of property, plant and equipment are recognised on the balance sheet at their amortised cost. Investment subsidies are deducted from the gross amount of the assets giving rise to them. Items of property, plant and equipment that are in use are depreciated on a straight-line basis, broken down by component on the basis of their estimated useful lives as follows:
Durations
Buildings
20 to 30 years 10 to 20 years 15 to 30 years 10 to 40 years 5 to 40 years 3 to 10 years 40 years
Improvements
Ski lifts
Ski run and trail works
Rides
Equipment (other than ski lifts and rides)
Other items of property, plant and equipment (including theme decor and wax fi gures in Musée Grévin)
capital expenditure over the life of the concession required to keep the facilities in good operating condition and implement its commercial and pricing policy. In return, the operator is authorised to collect from users, on the basis of a public rate grid, income from the sale of ski lift passes. Some CDA Group companies (STGM, ADS, SAP, SCV and GMDS) continue to pay leasing contract fees for ski lifts provided by the granting authorities. However, this system is gradually being replaced by concession agreements. In fact, the operators replace, at their own expense, obsolete equipment held under leasing contracts, with the new equipment coming under concession agreements. The CDA Group has analysed the characteristics of its contracts and the nature of the services provided and concluded that these contracts do not fall within the scope of IFRIC 12 on service concession agreements. Accordingly, the CDA Group recognises assets associated with ski lift concessions as a separate component of property, plant, and equipment. They are broken down and amortised in accordance with the same rules applied to property, plant and equipment owned by the Group itself.
The range of depreciable periods is due to the diversity of assets involved. The shortest periods are for more rapidly replaced components ( e.g. , scenery for di ff erent types of rides), while the longest periods apply to infrastructure. Residual values and useful lives of assets are reviewed and, if necessary, adjusted at each reporting date. CONCESSIONS Compagnie des Alpes is a major player in the leisure sector in Europe, particularly in the operation of ski areas. The operation of ski areas in France is governed by the legal framework established in the French Mountain Act (Loi Montagne) of 9 January 1985, concerning the development and protection of mountainous regions. These ski areas are for the most part subject to concession agreements between CDA subsidiaries and local municipalities. The operator holds a concession agreement with a municipality or group of municipalities. These agreements govern the relations between the granting authority and the operator with regard to all operating aspects of a ski area (capital expenditure, commercial and pricing policies, legal risks, etc.). On this basis, the operator is responsible for making the 1.14
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Compagnie des Alpes I 2019 Universal registration document
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