A N N U A L R E P O R T - Bouygues

NOTE 1: SIGNIFICANT EVENTS
OF THE YEAR
1.1 Holdings in subsidiaries and
affiliates
1.1.1 Significant increases:
% interest as at
31/12/2005 31/12/2004
• Colas €34m 96.42 95.56
• TF1 €65m 42.89 41.45
• Novasaur €15m 9.88 -
1.1.2 Bouygues SA interest in
Bouygues Telecom
The BNP Paribas Group having sought to enhance
the liquidity of its 6.5% stake in Bouygues
Telecom, Bouygues granted BNP Paribas a promise
to buy this stake, exercisable at any time
between 1 September 2005 and 31 July 2007 at a
price of between €477 million and €495 million
depending on the date of exercise.
In return, BNP Paribas granted Bouygues a promise
to sell this interest to Bouygues, exercisable
between 1 September 2007 and 30 September
2007 at a price of €497 million.
If the cumulative amount of dividends paid by
Bouygues Telecom to the BNP Paribas Group
exceeds €4.6 million, the prices indicated above
will be reduced by the amount of dividend paid.
1.1.3 Significant divestments
• Saur:
The effects of the sale of Saur were included in
the financial statements as at 31 December 2004.
The amount of €796 million receivable from PAI
partners, included in “Other receivables” as at
that date, was received in February 2005.
Following the sale, Bouygues held 15% of Saur’s
holding company, Novasaur (formerly Financière
Gaillon).
In 2005, the interest of Bouygues in Novasaur
was reduced from 15% to 9.9%.
• Sale of CATC and Cica to Sogeby, a 100%-owned
subsidiary of Bouygues SA.
• Sale of Fibysa to Finagestion, a 100%-owned
subsidiary of Bouygues SA.
• Liquidation of the following companies:
Bymages 4, Financière des Saules, RCS.
1.2 Treasury shares
Acquisition of 8,361,649 treasury shares at a
value of €320 million, classified in “Other longterm
investments”. These shares were then
cancelled via capital reductions in June and
December 2005 (Board decisions of 21 June and
13 December 2005).
105,000 treasury shares held under a liquidity
agreement as at 31 December 2005.
1.3 SNC Challenger
On the expiry of the construction lease for
the Challenger building (December 2005), SNC
Challenger, the lessor, realised a gross gain of
€102.91 million, of which €102.90 million was
recognised in the Bouygues SA income statement
(in line with its 99.99% interest in SNC
Challenger).
In line with standard practice, this gain represents
the residual value of the building on expiry
of the lease as estimated at the time of signature
of the lease, equivalent to the cost of construction
less the depreciation that would have been
recognised by the lessor if the building had been
recorded as asset in its balance sheet over the
term of the lease.
The tax arising on this gain has been spread
over 15 years, and is reflected in the books of
Bouygues SA by the recognition of a provision for
income taxes of €37.9 million.
1.4. Advances to subsidiaries
and affiliates
• Bouygues Telecom: reimbursement of advances
amounting to €498 million.
• Finagestion: funds of €23.6 million advanced
during the year.
1.5. Bond issue
1.5.1 Bond issue carried out in July
2005
• Amount:
€750 million
• Rate: 4.25%
• Issue priced at: 99.804%
• Repayment terms: repayable in full at par on
22 July 2020.
1.5.2 Significant events subsequent
to 31 December 2005
A €250 million bond issue supplementary to the
July 2005 issue was launched in January 2006 on
the same terms (issue priced at 97.203%).
1.6 Net financial income
Net financial income amounted to €209 million,
comprising (in millions of euros):
- Dividends received and share
of partnership profits 369 (1)
- Net interest expense (168)
- Net change in impairment and
provisions relating to subsidiaries (5)
- Gains on disposals of short-term investment
securities 12
- Other items 1
(1) includes €103 million arising on the expiry of the construction
lease for the Challenger building
NOTE 2: ACCOUNTING
POLICIES
The financial statements have been prepared
in accordance with the current provisions of
French law.
2.1. Intangible assets
Incorporation costs and research and development
costs are expensed in full as incurred.
As a general principle, software acquired from
third parties is recognised as an intangible asset
and amortised on a straight-line basis over a
maximum of five years.
2.2. Property, plant and
equipment
Property, plant and equipment is recognised
at acquisition cost net of reclaimable taxes.
Transaction costs that do not form part of the
market value of the acquired asset are expensed
as incurred.
Own production capitalised is recognised at production
cost plus a percentage of overheads.
Depreciation is calculated on a straight-line basis,
according to the nature and estimated useful life
of each asset component. Where plant and equipment
is eligible for accelerated tax depreciation,
an additional depreciation charge is recognised
in the income statement.
The application from 1 January 2005 of
Regulations 2002-10 and 2004-06 of the French
national accounting standard-setter, the Conseil
National de la Comptabilité (CNC), relating
respectively to depreciation and impairment of
assets and to the recognition and measurement
of assets, had no material effect on the financial
statements.
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