Compagnie des Alpes - 2017 Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

5.4

BORROWING COST AND OTHER FINANCIAL INCOME AND EXPENSES

30/09/2017

30/09/2016

(in thousands of euros)

Interest on borrowings

-16,270

-15,690

Other financial income and expenses Income on cash and cash equivalents

-

-428

130

94

NET COST OF DEBT

-16,140

-16,024

Losses on financial transactions

-747 -196

-617 -392

Other financial income

Financial provisions/reversals

-2,082 -3,025

-2,276 -3,286

OTHER FINANCIAL INCOME AND EXPENSES

5.5 INCOME TAX EXPENSE Income tax expense breaks down as follows:

30/09/2017

30/09/2016

(in thousands of euros)

Current taxes Deferred taxes

-19,637

-17,891

-300

-314

TOTAL

-19,937

-18,205

The reconciliation between the standard tax rate in France and the effective tax rate is outlined below (the effective tax rate is the ratio of income tax to net income of consolidated companies, including income

from discontinued operations included in the tax consolidation, but before tax and adjustments for goodwill impairment losses).

The reconciliation between income tax and the pre-tax income of consolidated companies is shown below:

30/09/2017

30/09/2016

NET INCOME BEFORE TAX

59,838 33.33% 19,946

58,527 33.33% 19,509

Current tax rate

Theoretical tax expense

Effects of: Difference between actual tax rate and theoretical rate

4,674

1,175

Non-deductible expenses/non-taxable income

-5,070

637

Interim tax losses on sold companies not recognised in assets

408

-

Other tax loss carryforwards not recognised in assets

4,153

1,397

Activation of losses from previous years

-2,608 -1,566 19,937

-2,920 -1,592 18,205

Income from associate companies recognised net of tax

TOTAL INCOME-TAX EXPENSE

The Group recognised an income of €2.3 million stemming from the removal of tax on dividends and the reversal of a tax provision of €1.8 million on a dispute with a foreign tax authority (which originated prior to the acquisition by Compagnie des Alpes), which turned out in favour of the Group. These items are included in the line, “Non- deductible expenses/non-taxable income”. The impairment on property, plant and equipment of the Prague and Seoul sites are taken into account in the tax loss carryforwards not

recognised in assets of these companies, at the locally applicable tax rate. The differences in the tax rate compared to the tax rate applicable in France can be found in the line, “Difference in tax rate”. Tax loss carryforwards and indefinitely deferred depreciation for which no deferred tax was recognised stood at €34.4 million at 30 September 2017 (of which €26 million relate to foreign subsidiaries) and equate to a deferred tax asset of €8.1 million.

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Compagnie des Alpes I 2017 Registration Document