Compagnie des Alpes - 2017 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 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. 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 has never been confronted with a company operating a concession (Ski areas) or lease (Leisure parks) having to cease operations due to the expiration of its contract. Accordingly, 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. z assets held to maturity are recognised in the balance sheet at an amortised cost. These assets mainly comprise bonds, term deposits and loans to unconsolidated companies; z financial assets held for trading, i.e. , short-term holdings, and assets designated at fair value through profit or loss when initially recognised are measured at fair value. Fair value is offset in profit or loss. These are mainly short-term investments that do not meet the criteria for cash equivalents (investment periods greater than three months); z shareholdings in unconsolidated companies are recognised in available-for-sale financial assets, which are generally valued at cost price, given their nature as support companies or at fair value. In this case, the changes in fair value are recognised in shareholders’ equity until the securities are sold. Shareholdings must be tested annually for impairment, and impairment losses, if any, are recorded by net income. The Group measures the recoverable amount of all its financial assets at each reporting date. 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. ACCOUNTS RECEIVABLE Accounts receivable are recognised at fair value. Impairment loss is recognised when there is an objective indication that the amounts due may not be recovered. Any impairment loss is recognised in profit or loss. 1.17 1.18 1.16 FINANCIAL ASSETS Financial assets are divided into three major categories:

1.19 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 financial debt”. TREASURY STOCK The purchase of 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. 1.20 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 destinations 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. In other countries where the CDA Group operates (Germany, the Netherlands and Belgium in particular), retiring employees receive no retirement package from their employer. Therefore, no provision is required. However, companies contribute each year to provident funds (pension funds). The absence of the Group’s obligations with respect to these contracts is verified each year. Other provisions Provisions are recognised when, at the end of the reporting period, the Group has an obligation to a third party arising from a past event that is certain or likely to lead to an outflow of resources to the third party, with no equivalent consideration received. These provisions are estimated in accordance with their nature, with the most likely assumptions taken into account. Provisions for restructuring costs are recognised once the Group has a formal, detailed restructuring plan that has been communicated to the relevant parties. 1.21 PROVISIONS Provisions for retirement bonuses

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Compagnie des Alpes I 2017 Registration Document