Compagnie des Alpes - 2017 Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

Translation gains or losses resulting from the translation of net investments in foreign operations and loans and other currency instruments designated as hedges on said investments are recognised in shareholders’ equity upon consolidation. OPERATING SEGMENTS The operating segments are presented on the same basis as those used in the internal reporting provided to the Group’s Executive Management: z Ski areas : this business mainly consists in the operation of ski lifts and maintenance of ski runs and trails. z Leisure destinations : this segment covers the operation of theme parks, combined amusement and animal parks, water parks and tourist sites. Its revenue figures include admission tickets, restaurants, shops and accommodation. z Group Development : this segment includes (i) the operations connected with the development of new wax museums abroad (Grévin, Chaplin’s World By Grévin) as well as wax figure production (CDA Productions), and (ii) consultancy services abroad (CDA Management and CDA Beijing). z Holdings and supports : this segment comprises holding companies and subsidiaries that provide operational support, and includes CDA SA and CDA-DS, its finance subsidiary CDA Financement, its reinsurance subsidiary Loisirs-Ré, and INGELO. A chart showing the Group’s consolidated companies, grouped by segment, is given in Note 4.2 1.4 The Group recognises the identifiable assets, liabilities and contingent liabilities of acquired entities at fair value on the date of taking of control. Where the agreement governing the business combination provides for a payment that is contingent on future events, the Group includes the amount of this payment in the cost of the business combination at the vesting date, if the payment is probable and can be reliably measured. In the case of acquisitions of companies holding concession agreements, an analysis and fair value measurement of these agreements are performed on the basis of the expected profit margin at the end of the concession agreement. Any variance between the profitability of the concession agreement and the Group average is recognised under (intangible) assets or liabilities (provisions). It is amortised or recovered over the remaining term of the concession. Goodwill is the excess of the cost of an acquisition over the fair value of the Group’s share in the identifiable net assets of the subsidiary or associate on the vesting date. Goodwill arising from the acquisition of a subsidiary is recognised under the item “goodwill”. Goodwill arising from the acquisition of an associate company is recognised under the item “investments in associate companies”. The Group is allowed 12 months from the vesting date to finalise accounting for the business combination in question. Any changes to the acquisition price made outside the allocation period are recognised in profit or loss and no change is made to the acquisition cost or goodwill. 1.5 BUSINESS COMBINATIONS AND GOODWILL

The IFRS 16 standard on lease agreements is applicable, for the Compagnie des Alpes Group, at 30 September 2020. Due to the existence of long-term lease agreements, the Group expects a significant impact related to the application of this standard. An analysis is underway to refine the number and nature of existing contracts, the typology of the assets in question and the impact on the Group’s consolidated financial statements. Key assumptions and estimates The preparation of the consolidated financial statements in accordance with IFRS is based on assumptions and estimates made by the Executive Management to calculate the value of assets and liabilities at the reporting date and the income and expense items for the year. The actual results may differ from these estimates. The main sources of uncertainty relating to the key assumptions and estimates concern goodwill (Note 6.1), estimates of the value of associate companies and the recognition of deferred tax assets (Note 6.12). CONSOLIDATION METHODS The companies in which the Group has exclusive control are fully consolidated. Associate companies are entities that the Group does not control but over which it exercises significant influence, usually with 20% to 50% of the voting rights. Shareholdings in associate companies are accounted for using the equity method, and initially recognised at their acquisition cost. The Group’s interest in associate companies includes goodwill (net of accumulated impairment) as identified at the time of acquisition. The Group presents its share of net income of associate companies on a separate line of the income statement, below the operating income line. The Group does not have any joint ventures. All internal transactions and positions are eliminated, either in full for fully consolidated companies, or proportionally to the Group’s interest in the case of companies consolidated using the equity method. The list of consolidated companies can be found in Note 4.2. 1.1

1.2

REPORTING DATE OF CONSOLIDATED COMPANIES

The consolidated financial statements cover a 12-month period, from 1 st October 2016 to 30 September 2017 for all companies, except for Groupe Compagnie du Mont-Blanc consolidated using the equity method over the period from 1 st September 2016 to 31 August 2017.

1.3

TRANSLATION OF FINANCIAL STATEMENTS AND FOREIGN-CURRENCY TRANSACTIONS

The financial statements of foreign subsidiaries are translated into the presentation currency (euro) by applying the following methods: z the balance sheet (including goodwill) is translated at the closing rate; z the statement of comprehensive income is translated at the average exchange rate for the period; z all resulting translation gains or losses are recognised in a separate component of shareholders’ equity.

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Compagnie des Alpes I 2017 Registration Document