Compagnie des Alpes - 2017 Registration Document

2 RISK FACTORS Legal risks

2.1.2 INTEREST RATE RISK Compagnie des Alpes uses financial instruments to manage interest rate risk in the course of the Group’s business. The Group does not manage market risks in a speculative manner. The sole objective is to be protected against market volatility.

The policy focuses on securitising financial expenses through short- and medium-term interest rate caps. The interest rate risk exposure on the existing debt and changes in this exposure are presented in Chapter 5 - in Note 6.11 to the Consolidated Financial Statements.

2.1.3 FOREIGN EXCHANGE RISK Most of the Group’s international business activities are in the euro zone. Group exposure to foreign-exchange risk is therefore low. COUNTERPARTY RISK All cash investments and financial instruments are set up with leading institutions and banks and in accordance with the rules regarding security and liquidity. 2.1.4

A detailed analysis of the exposure to foreign exchange risk is presented in Note 6.11 to the Consolidated Financial Statements.

For derivatives and transactions settled in cash, counterparties are restricted to top-notch financial institutions. The Group’s exposure to counterparty risk is therefore low.

2.2 Legal risks

2.2.1 REGULATORY RISKS The regulations governing the Group’s activities vary with the activities themselves and the countries in which the CDA Group operates. In France, Ski area operations are carried out under the terms of the Mountain Act ( Loi Montagne ) of 9 January 1985, which deals with “the provision of ski lift and ski run and trail services”, and which has now been integrated into and since been amended in the French Tourism Code. The features of the concession agreements, by which the Group operates in application of these regulations, are set out in Chapter 5 – Note 1.14. to the Consolidated Financial Statements. They can be terminated early only by court order, in the event that the court deems the operator to have committed a serious infraction, for reasons As at 30 September 2017, the CDA Group was not involved in any significant disputes. In the course of CDA’s day-to-day management of its activities, the Group is subject to a number of legal disputes and litigations. Compagnie des Alpes does not believe these will entail any significant cost or have any notable impact on its financial position, business, profits, or property. The disputes, periodically recorded, are analysed by management. The management then makes any provisions required. Provisions for legal disputes and litigation are described in Chapter 5 – Note 6.10. to the Consolidated Financial Statements. These provisions are divided between ongoing risks, which correspond to short-term 2.2.2 LITIGATION

considered to be in the general interest, or in case of force majeure that would make it impossible to meet the terms of the agreement. If an agreement is terminated early, the operator is entitled to compensation corresponding at least to the book value of non- amortised investments. In cases where the agreement is terminated for reasons in the general interest, the operator is entitled to compensation for loss of revenue, once the revenue loss has been established. There is no specific legal framework for the operation of the Leisure park division. Specific operating licenses may be required depending on national regulations. legal proceedings directly linked to the core activities of the Group’s companies, and non-current risks, which correspond to medium-term and non-current operations, notably those risks linked to acquisitions, which constitute the majority of these risks. To the Group’s knowledge there are no governmental, legal or arbitration proceedings (including any proceedings of which the issuer is aware, any suspended proceedings, and any proceedings with which it is threatened), and no litigation or arbitration regarding the validity or execution of concession agreements or operating contracts held by the Group that might have or have had, during the past 12 months, a significant impact on the financial position or profitability of the Company and/or Group.

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Compagnie des Alpes I 2017 Registration Document