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The ILC index applies to leases signed after the decree of
November 4, 2008 came into force on November 7, 2008. For
leases currently in progress that do not include a clause expressly
providing for the automatic substitution of the index previously used
with the ILC upon its entry into force, the parties may agree, through
an amending rider, to index the rent on the lease based on changes
in the ILC.
IRL
The IRL is a quarterly index calculated by INSEE.
Article 9 of Law 2008-111 of February 8, 2008 on purchasing
power, modifi ed the IRL created by Article 35 of Law 2005-841 of
July 26, 2005. The new index represents the average, over the past
12 months, of the consumer price index excluding tobacco and
rent. It is calculated using a base of 100 in the fourth quarter of
1998.
Income from disposals
Gains (or losses) on disposals represent the difference between
proceeds from the disposal minus sale-related expenses and the
net book value of the assets.
Whether ANF actually sells property primarily depends on its ability
to fi nd potential purchasers for the assets it wishes to sell.
Macroeconomic conditions
The residential and commercial property sector is directly affected
by general economic conditions. The main economic indicators,
particularly gross domestic product growth, job creation, interest
rates, infl ation, the construction cost index and the rent reference
index may have an impact on ANF’s fi nancial performance, and on
the value of its properties in either the short- or long-term.
The level of interest rates has a major impact on the property market
since low interest rates generally help support both the value of
INFORMATION ABOUT ANF
Income from operations
property portfolios and tenants’ fi nancial strength. By contrast, a
signifi cant increase in interest rates is likely to be detrimental to the
value of property portfolios and raise fi nancial expenses on debt.
Low long-term interest rates and construction costs also make it
easier for property landlords to fi nance investments and reduce the
cost of completing developments.
Investment subsidies
ANF receives subsidies from government and local authorities for
certain kinds of investment. These subsidies are recognised in the
income statement in line with the depreciation period of the asset
for which they are paid. They are recognised as a deduction from
depreciation expenses.
Property expenses
Property expenses include in particular maintenance expenses,
operating expenses (which mainly include the supply of
consumables, maintenance contracts and concierge expenses,
and insurance) and land tax. Part of these expenses is passed on
to tenants.
ANF also incurs renovation and major repair expenses which are
capitalised and are therefore not included in property expenses.
Overhead expenses
Overhead expenses mainly include personnel expenses (employees
and secondments), operating expenses (premises, IT purchases,
supplies) and fees.
Net fi nancial expense
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Contents
Changes in fi nancial expenses are affected by average debt levels,
trends in the interest rates at which ANF can obtain fi nancing or
carry out refi nancing, and the cash generated by operations.
ANF • 2009 ANNUAL REPORT
29
OTHER GENERAL GENERAL INFORMATION PRO FORMA FINANCIAL INFORMATION ANNUAL FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL FINANCIAL STATEMENTS INFORMATION ABOUT ANF DESCRIPTION OF OF THE BUSINESS