2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino
2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino
2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino
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Registration Document<strong>2010</strong>
SUMMARY1 Presentation of the <strong>Casino</strong> Group .... 031.1 Financial Highlights 41.2 Significant events of the year 41.3 Business and strategy 51.4 Real estate and investments 132 Management Report ....................... 15Financial highlights 162.1. Business Review 172.2. Parent Company Business Review 232.3. Subsidiaries and Associates 252.4. Subsequent Events 292.5. Outlook for 2011 and conclusion 302.6. Share Capital and Share Ownership 302.7. Risk Factors and Insurance 402.8. Environmental Report 432.9. Employment Report 463 Consolidated financial statements .... 533.1. Statutory Auditors’ Reporton the consolidated financial statements 543.2. Consolidated financial statements 553.2.1. Consolidated income statement 553.2.2. Consolidated statementof comprehensive income 563.2.3. Consolidated balance sheet 573.2.4. Consolidated statement of cash flows 583.2.5. Consolidated statementof changes in equity 613.3. Notes to the consolidatedfinancial statements 625 Corporate governance................... 1555.1. Board of Directors 1565.2. Management 1765.3. Auditing of Financial Statements 1805.4. Chairman’s Report 1815.5. Statutory Auditors’ Report 192Appendix: Board of Directors’ Charter 1936 General Meeting ............................ 1996.1. Report of the Board of Directorson Extraordinary Business Annual GeneralMeeting of 14 April 2011 2006.2. Statutory Auditors’ special reports 2056.3. Proposed resolutions 2107 Additional information .................... 2217.1. General information 2227.2. History of the Company and the Group 2267.3. The market for <strong>Casino</strong> securities 2297.4. Store network 2307.5. Person responsible for the RegistrationDocument and annual financial report 2327.6. Table of correspondence –Registration document 2347.7. Table of correspondence –Annual financial report 2364 Parent companyfinancial statements ...................... 1274.1. Statutory Auditors’ Reporton the annual financial statements 1284.2. Income statement 1294.3. Balance sheet 1304.4. Cash flow statement 1314.5. Notes to the financial statements 1324.6. Notes to the income statementand balance sheet 1344.7. Five-year financial summary 1494.8. List of subsidiaries and associates 1504.9. Statutory Auditors’ special reporton regulated agreementsand commitments with related parties 153
KEEPING AHEADIN A CHANGING WORLD<strong>Casino</strong> is a leading food retailer in France and abroad.At 31 December, <strong>2010</strong>, it operated a total of 11,663 storesin various retail formats.In France, which accounts for 62% of revenue and 59%of trading profi t, <strong>Casino</strong> operates 120 hypermarkets (1) ,795 supermarkets (1) , 585 discount stores, 7,545 conveniencestores and 287 cafeterias. In the international markets,which account for 38% of revenue and 41% of trading profi t,<strong>Casino</strong> operates in eight countries (Brazil, Colombia, Thailand,Argentina, Uruguay, Vietnam, Madagascar and Mauritius) andoperates a total of 2,202 stores including 294 hypermarkets.92% of international consolidated revenue comes fromSouth America and Asia, its two core international regions.<strong>Casino</strong> holds leadership positions in these two regions.In <strong>2010</strong>, consolidated revenue totalled €29 billion,an increase of 8.7% on 2009, while net earningswere up 3.0% to €559 (2) million.(1) Excluding international affi liates.(2) Continuing operations.The original French version of this translated Registration Document was filed with the Autorité des Marchés Financiers (AMF)on March 14, 2011 under number D. 11-0124, in accordance with article L. 212-13 of the AMF’s General Regulations.It may be used in connection with a financial transaction provided that it is accompanied by an Information Memorandum approvedby the Autorité des Marchés Financiers. It was prepared by the issue and its signatories assume responsibility for it.This document is a free translation from French into English and has no other value than an informative one. Should there beany difference between the French and the English version, only the text in French language shall be deemed authentic andconsidered as expressing the exact information published by <strong>Groupe</strong> <strong>Casino</strong>.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group1
KEY FIGURES€29 billion<strong>Casino</strong>’s <strong>2010</strong> consolidatednet revenues.Nearly 7.5 million sq.m.of retail surface area.38% of consolidatedrevenue outside France.No. 1 private label retailer in Francein terms of sales penetration.€559 million.Net profit attributable to equity holders(continuing operations).A favorable and diversified business mixin France weighted towards convenienceand discount format: 60% of revenue.Over 230,000employees around the world.A presence focused on4 key countries in international markets:Brazil, Colombia, Thailand, Vietnam.11,663 storesof which 9,461 in France.2 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
1PRESENTATION OFTHE CASINO GROUP1.1 Financial Highlights...........................................................41.2 Significant events of the year ...........................................41.3 Business and strategy ......................................................51.4 Real estate and investments ..........................................13Registration Document <strong>2010</strong> | <strong>Casino</strong> Group3
1PRESENTATION OF THE CASINO GROUPFinancial Highlights1.1 FINANCIAL HIGHLIGHTSCONTINUING OPERATIONS€ millions <strong>2010</strong> 2009ReportedchangeOrganicchange (1)Revenue 29,078 26,757 +8.7% +4.7%EBITDA (2) 1,953 1,849 +5.6% -3.1%Trading profit 1,300 1,209 +7.5% -3.9%Profit from continuing operations,attributable to equity holders of the parent company 559 543 +3.0%Profit from discontinued operations,attributable to equity holders of the parent company (9) 48Total net profit attributable to equity holdersof the parent company 550 591 -7.0%Underlying profit (3) attributable to equityholders of the parent company 529 534 -1.0%Cash flow 1,188 1,292 -8.0%(1) Based on a comparable scope of consolidation and constant exchange rates, excluding the impact of asset disposals to OPCI property funds and before reclassifi cation of the CVAE(Cotisation sur la Valeur Ajoutée des Entreprises) under income tax.(2) EBITDA = Earnings before interest, taxes, depreciation and amortisation.(3) Underlying profi t corresponds to profi t from continuing operations adjusted for the impact of other operating income and expense, non-recurring fi nancial items and non-recurring incometax expense/benefi ts (see Appendix on page 22).DEBT AND EQUITY€ millions <strong>2010</strong> 2009Equity (before appropriation) 9,064 7,919Net debt 3,845 4,072Net debt to EBITDA ratio 1.97x 2.2x1.2 SIGNIFICANT EVENTS OF THE YEAR■■On 17 January <strong>2010</strong>, the Venezuelan government ordered thenationalisation of Exito hypermarkets operating in Venezuela.Effective 1 January <strong>2010</strong>, <strong>Casino</strong>’s interests in Venezuela havebeen deconsolidated and reclassified under “Non-current assetsheld for sale”, in accordance with IFRS 5.In the first half of <strong>2010</strong>, <strong>Casino</strong> carried out two bond exchangeoffers totalling around €1.4 billion.From 26 January <strong>2010</strong> to 8 February <strong>2010</strong>, the Group offered toexchange its 2012 and 2013 bonds for new bonds due February2017 and paying interest equivalent to the Midswap-rate plus aspread of 135 basis points. A total of €888 million worth of thenew bonds were issued. Around €1.5 billion worth of bonds weretendered to the offer (nearly twice the issued amount), allowingthe Group to reduce bond repayments due 2012 and 2013 byrespectively €440 million and €354 million.From 20 April <strong>2010</strong> to 11 May <strong>2010</strong>, the Group offered to exchangeits 2011, 2012 and 2013 bonds for new bonds due November 2018■and paying interest equivalent to the Midswap-rate plus a spreadof 160 basis points. A total of €508 million worth of the new bondswere issued. This transaction reduced debt repayments due 2011,2012 and 2013 by €190 million, €156 million and €127 million,respectively.The two exchange offers noticeably improved the Group’s debtprofile and extended average bond debt maturity from 2.9 to4.4 years.In early June <strong>2010</strong>, the Group increased its interest in Grupo Pãode Açúcar (GPA) from 3<strong>3.4</strong>% to 33.7% following GPA’s issue to<strong>Casino</strong> of 1.1 million new preferred shares for a total of BRL67 million(€30 million) (1) . This issue, which was approved by GPA’sshareholders at the General Meeting of 29 April <strong>2010</strong>, was carriedout in accordance with the agreement signed in May 2005 with theAbilio Diniz family. Under the terms of this agreement, in late 2006,<strong>Casino</strong> transferred to GPA the goodwill arising on its successiveinvestments in the company.(1) Based on a price of BRL60.39 per share, corresponding to the volume-weighted average price over the 15 trading days before the date of notice of the General Meeting.4 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PRESENTATION OF THE CASINO GROUPBusiness and strategy1■■■Amortisation of this goodwill will generate total tax savings ofBRL517 million (€235 million) for GPA over an estimated six-yearperiod beginning in 2008. In exchange for the transferred goodwill,GPA agreed to pay 80% of the tax savings back to <strong>Casino</strong> in theform of new GPA preferred stock.When the goodwill amortisation period ends, <strong>Casino</strong>’s interestin GPA will stand at around 35% based on the current shareprice (1) .On 1 July <strong>2010</strong>, GPA and Casas Bahia announced the signature ofan amendment of their partnership agreement signed in December2009. The two parties revised certain terms and conditions of theirpartnership agreement without altering the general principles of theoriginal agreement.This strategic partnership will help GPA strengthen its position asBrazil’s leading retailer. <strong>Casino</strong> welcomes this agreement, whichhighlights the strategic importance of GPA and the Brazilian marketto the Group.The agreement became effective on 9 November <strong>2010</strong>, when theacquisition of Casas Bahia was approved by GPA’s shareholders.Casas Bahia has been fully consolidated by GPA since that date.On 27 July <strong>2010</strong>, <strong>Casino</strong> announced that it has signed a long-termpartnership agreement with <strong>Groupe</strong> Crédit Mutuel-CIC to developfinancial products and services in France through its Banque<strong>Casino</strong> subsidiary.Under the terms of the agreement, <strong>Groupe</strong> Crédit Mutuel-CIC willacquire a 50% stake in Banque <strong>Casino</strong>, which is currently 60%owned by <strong>Casino</strong> and 40% by LaSer Cofinoga. <strong>Casino</strong> has exercisedits call option on LaSer Cofinoga’s shares which, along with 10%of <strong>Casino</strong>’s current stake, will be sold to Crédit Mutuel.The transaction is subject to approval by the regulatory authoritiesand is expected to be completed within the next 18 months.On 15 November <strong>2010</strong>, <strong>Casino</strong>’s Big C subsidiary announcedthat it had signed a definitive agreement with Carrefour to acquireits business operations in Thailand for a total consideration ofTHB35.5 billion (€868 million) (2) , implying a pro forma <strong>2010</strong>e EV/EBITDA multiple of 8.6x including run-rate synergies.Carrefour Thailand operates a network of 42 stores, including34 hypermarkets, as well as 37 shopping centres. The companyis expected to generate sales of approximately THB30 billion(€734 million) in <strong>2010</strong>. Big C and Carrefour’s Thai networks present■strong geographical complementarities, enabling Big C to doubleits presence in Greater Bangkok.With 103 hypermarkets in total and a combined <strong>2010</strong> estimatedturnover of over THB100 billion (over €2.4 billion), Big C willsignificantly expand its market position and will become the Thaico-leader in the hypermarket segment.Carrefour Thailand’s 37 shopping centres account for close to 50%of EBITDA. After the transaction, the total number of shoppingcentres will exceed 100 with 585,000 sq.m. of gross leasable area.This enlarged portfolio reinforces Big C’s dual retail-property strategyallowing the implementation of value-creating opportunities.The acquisition will generate significant synergies equivalent to about1.2% of combined <strong>2010</strong>e sales on a run-rate basis. The synergiesare expected to be fully implemented by 2013.The acquisition will be financed out of Big C’s existing cash balanceresources as well as through debt financing. It should be accretiveon Big C’s earnings as of next year.The transaction allows <strong>Casino</strong> to strengthen significantly its marketposition in one of its key countries. It is in line with <strong>Casino</strong>’sstrategy of both selective development on high growth marketswhere it enjoys leadership positions, and optimisation of its assetportfolio.In that respect, in addition to its €1 billion asset disposal programme,<strong>Casino</strong> announced its intention to dispose of assets for an amountof €700 million in 2011.The acquisition was approved by Big C’s shareholders on 5 January2011.On 26 November <strong>2010</strong>, the <strong>Casino</strong> Group announced that ithad signed an agreement to form a strategic partnership withthe Bolivarian Republic of Venezuela, which has acquired 80.1%of Cativen for a total consideration of US$690 million. <strong>Casino</strong>has retained a 19.9% participation in the company to continueproviding operational support and develop cooperation with thenew state-controlled entity.Under this agreement, the <strong>Casino</strong> Group will receive a totalconsideration of US$622.5 million, of which 60% will be paidupon closing the deal, including 20% in cash and 40% in two US$denominated promissory notes. The remaining 40% will be paidin cash in 2011.1.3 BUSINESS AND STRATEGY1.3.1 MAJOR MILESTONES IN THE GROUP’S HISTORYThe <strong>Casino</strong> banner dates back to 1898, when Geoffroy Guichardcreated Société des Magasins du <strong>Casino</strong> and opened the first storein Veauche in central France. Just three years later, in 1901, the first<strong>Casino</strong> brand products were launched, thus pioneering the privatelabelconcept.The Group expanded rapidly until the eve of the Second World War,opening more than 500 stores in ten years. It initially focused on theSaint-Étienne and Clermont-Ferrand regions and during the 1930sexpanded its reach down to the Côte d’Azur. In 1939, the Groupmanaged nine warehouses and almost 2,500 retail stores.In the 1950s, <strong>Casino</strong> embarked on a policy of diversifying its formatsand its business activities. The first self-service store opened in 1948,the first <strong>Casino</strong> supermarket in 1960, the first <strong>Casino</strong> Cafétéria in 1967and the first Géant hypermarket in 1970. Acquisition of L’Épargne in1970 extended the Group’s operations to south-western France.(1) If minority shareholders exercise their pre-emptive subscription rights, GPA will repay part of <strong>Casino</strong>’s share of the tax savings in cash, thereby reducing the increase in <strong>Casino</strong>’sstake in the company.(2) Based on a THB/€ exchange rate of 40.859 on 12 November, <strong>2010</strong>.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group5
1PRESENTATION OF THE CASINO GROUPBusiness and strategyAt the end of the 1970s, <strong>Casino</strong> broke into the international markets,launching a chain of cafeterias in the United States and then acquiring90 cash & carry stores under the Smart & Final banner in 1984.The mid-1980s marked a turning point in the Group’s expansion policy.It adopted a redeployment strategy aimed at achieving critical mass toimprove its resilience in an increasingly competitive retail industry.This strategy consisted first and foremost of expanding its operationsin France and refocusing on its core business as a retailer. Between1985 and 1996, it acquired control of two retail companies ineastern and southern France, Cédis and La Ruche Méridionale. Itsigned partnership agreements with the Corse Distribution Groupand with Coopérateurs de Normandie-Picardie. In 1992, it took overRallye’s retail business comprising hypermarkets, supermarkets andcafeterias.The Group also launched a programme to refurbish its hypermarketsand modernise its convenience store network, with the aim ofrepositioning both its corporate image and the image of its banners.<strong>Casino</strong> created Spar France in 1996 and acquired a stake in <strong>Mo</strong>noprix-Prisunic in 1997. It also took a majority stake in the Franprix and LeaderPrice banners in 1997, making it the leading retailer in Paris.As a result of these developments, on the eve of the new millennium<strong>Casino</strong> had become one of France’s leading retail groups.Leveraging its strong domestic position, the Group then decidedto strengthen its international presence and embarked on an activeinternational expansion policy.From 1998 to 2002, it acquired a large number of retail companiesin South America (Libertad in Argentina, Disco in Uruguay, Exito inColombia, CBD in Brazil and Cativen in Venezuela), Asia (Big C inThailand, Vindémia in Vietnam), the Netherlands (Laurus, now Super deBoer) and the Indian Ocean region (Vindémia in Reunion, Madagascar,Mayotte and Mauritius).It also moved into Poland and Taiwan, opening its first Polishhypermarket in Warsaw in 1996 followed by a Leader Price store in2000, and its first hypermarket in Taiwan in 1998.Since 2000, <strong>Casino</strong> has strengthened its presence in France in themost buoyant formats and expanded in its most promising internationalmarkets.In France, <strong>Casino</strong> has adapted its business mix to meet changingmarket trends, first by strengthening its positioning in convenience anddiscount formats through major acquisitions. In 2000, it acquired astake in online retailer Cdiscount and raised its interest in <strong>Mo</strong>noprix to50%. In 2003, <strong>Casino</strong> and Galeries Lafayette renewed their partnershipin <strong>Mo</strong>noprix. At the end of 2008, the strategic agreement between thetwo partners was extended until 2012. In 2004, the Group increasedits interest in Franprix Holding to 95% and in Leader Price Holding to75%. Since 2009, it has owned 100% of both companies.Secondly, <strong>Casino</strong> also began to develop other businesses connectedwith retailing, such as financial services and commercial real estate.In 2001, it joined forces with LaSer Cofinoga to create Banque du<strong>Groupe</strong> <strong>Casino</strong>. In July <strong>2010</strong>, it signed a partnership agreement infinancial products and services with <strong>Groupe</strong> Crédit Mutuel-CIC, whichwill increase its interest in Banque <strong>Casino</strong> to 50%, with <strong>Casino</strong> owningthe remaining 50%. In 2005, the Group’s shopping centre propertieswere spun off into a new subsidiary, Mercialys, which was floated onthe stock exchange.In the international markets, <strong>Casino</strong> began to refocus its business ontwo core regions, South America and Southeast Asia, to capitaliseon their strong growth potential. From 2005 to 2007, the Groupacquired joint control of the GPA Group in Brazil, and became majorityshareholder of Exito in Colombia and Vindémia in the Indian Oceanregion. In <strong>2010</strong>, the partnership between GPA and Casas Bahia,Brazil’s leading non-food retailer, and Big C’s acquisition of CarrefourThailand significantly increased the Group’s footprint in these tworegions, which are the main pillars of its international development.In 2006, <strong>Casino</strong> sold its Polish retailing businesses and its 50% interestin its Taiwanese subsidiary Far Eastern Géant, followed by its interestin Smart & Final in the USA in 2007. In 2009, <strong>Casino</strong> sold its 57%interest in Dutch retailer Super de Boer.1.3.2 BUSINESS AND STRATEGYa. Group profile in <strong>2010</strong><strong>Casino</strong> is a leading food retailer in France and abroad. At 31 December<strong>2010</strong>, it operated a total of 11,663 stores in various formats.In France, which accounts for 62% of revenue and 59% of tradingprofit, <strong>Casino</strong> operates 120 hypermarkets (1) , 795 supermarkets (1) ,585 discount stores, 7,545 convenience stores and 287 cafeterias.In the international markets, which account for 38% of revenue and41% of trading profit, <strong>Casino</strong> operates in eight countries (Brazil,Colombia, Thailand, Argentina, Uruguay, Vietnam, Madagascar andMauritius) and operates a total of 2,202 stores including294 hypermarkets. 92% of international consolidated revenue comesfrom South America and Asia, its two core international regions.<strong>Casino</strong> holds leadership positions in both regions.In <strong>2010</strong>, consolidated revenue totalled €29 billion, an increase of8.7% on 2009, while net earnings (continuing operations) were up3.0% to €559 million.b. Business and strategy in France<strong>Casino</strong> is France’s third largest food retailer with about 13% marketshare (2) . The Group stands out in the French retail world for its multiformatstructure and its heavy weighting to convenience and discountstores. <strong>Casino</strong> also pursues a strategy of differentiating its bannersto meet new customer expectations. Lastly, it has a dual retailing andproperty development business model.The French operations generated revenue of €17,956 million in <strong>2010</strong>and trading profit of €769 million, giving a trading margin of 4.3%.From mass market to precision retailingThe French retailing market is gradually evolving, driven by changinglifestyles and socio-demographic trends such as an aging population,smaller families, family members leading separate lives and growingindividualisation of lifestyles. This has led to a greater diversity ofretail formats and concepts, providing an alternative to the historicallydominant hypermarket model, a broader and more segmented productoffering and more individualised contact with consumers.(1) Excluding international affi liates.(2) Source: KantarWorld Panel (formerly TNS).6 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
SCCR/SS/GE/13/3 Prov.page 945. The representative of the World Blind Union (WBU) expressed its appreciation for thegoodwill expressed in the SCCR to work towards language in the Treaty that would facilitate thesharing of materials across country borders. It had been encouraged by a number of commentsthat had shown understanding of that issue. The possibility of having materials in an accessibleformat would not only provide leisure reading, but the real core of education and opportunitiesfor a full and productive life to all visually impaired persons. It did not have any specific viewson the three-step test, fair dealing or fair use, but only views on the language agreed to facilitatethe practical implementation of a system that allowed the maximum access to materials by blindand visually impaired people throughout the world.46. The representative of the International Group of Scientific, Technical and MedicalPublishers (STM) called on the SCCR to create an enabling legal framework that wouldempower, rather than threaten, the ability of rights holders to serve the markets of visuallyimpaired persons and which would provide the legal infrastructure for cooperation whileencouraging public/private partnerships without undermining market access. It had alwayssupported the creation of an enabling legal framework that would allow access for print disabledpersons consistent with existing conventions which would yield effective, well crafted, crossborder mechanisms to facilitate the smooth and secure international exchange of works inaccessible formats through mainstream markets and through assistive measures. WIPO andespecially some of the Delegations from Latin America had been at the forefront of seekinggreater access for the blind and visually impaired since 1971. Fortunately, WIPO was nowclose to achieving a lasting result with a Treaty that would be enforced for many decades tocome. Fortunately, technology was also advancing fast making mainstream access for the blindand visually impaired through normal market channels also a reality. It hoped that the Treatywould lead to exponential growth of commercially available accessible works and craftedexceptions that would provide legal certainty to authorized entities, while avoiding duplicationwith other initiatives such as TIGAR, to enhance not only the accessibility of works, but thediscoverability of these works.47. The representative of the International Publishers Association (IPA) referred to the threesteptest and the issue of commercial availability. The IPA noted that it was of criticalimportance that the international exchange of copyright protected works in digital formats forvisually impaired persons would not be a white space in the international copyright framework.It was important to publishers that digital content followed the same rules of the internationallegal framework and national copyright laws. The WBU had stated that commercial availabilitywas not an important aspect of this debate however the IPA considered this was a core issue.The changes that had occurred since 2003 had to be taken into account and the trend wasclear. Namely, commercial publishing and commercial products would increasingly become theprimary direct source of accessible books for persons with print disabilities both in thedeveloped countries and in the developing countries. Commercial publishing and commercialproducts were therefore an important aspect of providing access to persons with printdisabilities. The IPA was delighted to see that recently adopted Indian copyright legislationincluded provisions regarding commercial availability referred to as ‘normal formats’. Publishersdid not want to interfere with the effective international exchange of files and commercialavailability could be worded in such a way that it would not entail any bureaucratic burden orliability. Simple mechanisms that were easy to use and which derived clear results could bespelt out. Any organization which acted in good faith should not be refrained from theinternational exchange of accessible files because of liability issues. Such organizations actingin good faith had to all be encouraged to participate in that exchange and most of them werewonderful partners for publishers to collaborate with. The new Treaty instrument had to reflectcurrent realities where publishers were part of the landscape of providing equal access tovisually impaired people at the same time, at the same place and at the same price as otherpersons.48. The representative of the International Federation of Library Associations and Institutions(IFLA) stressed that it was indispensable that exceptions in the Treaty instrument were madesubject to the three step test. The IFLA suggested that this should be reiterated in the Treaty
1PRESENTATION OF THE CASINO GROUPBusiness and strategyIn 2008, to meet consumer demand for modern, convenient shoppingfacilities, Franprix launched a new store concept with a restyled look,a product offering geared more towards fresh produce and snacks,and longer opening hours.In <strong>2010</strong>, Franprix continued its ambitious expansion strategy, opening100 new outlets, and its renovation programme. At the end of theyear, it operated a total of 870 stores, more than 50% of which hadbeen upgraded to the new concept.In <strong>2010</strong>, Franprix’s business volume (1) totalled €1,980 million.SuperettesThere are three superette banners: Petit <strong>Casino</strong>, Vival and Spar.Petit <strong>Casino</strong> is the Group’s historic convenience format. It projectsa friendly, welcoming image and offers an extensive range of foodproducts including high-quality fresh produce. The banner is an integralpart of local life in urban and suburban areas.Vival operates mainly in villages and also projects a friendly, welcomingimage. Alongside a food offering comprising mainly <strong>Casino</strong> brandgoods, it also offers magazines, newspapers and tobacco productsas well as fax, postal and other services.Spar operates in urban and suburban areas, offering a range offood products as well as services such as photo development, bustickets, etc.Recognised expertise in franchising is one of the key strengths ofthe superette business model. In ten years, the number of franchisestores has increased from none to more than 4,700, mainly underthe Spar and Vival banners. Franchising is an excellent growth driverand also provides a high return on capital.The network comprises 6,675 stores, covering the whole of France.The Group is continuing to expand and optimise the network, opening321 (2) outlets and closing 304 (2) during <strong>2010</strong>.With a selling area ranging from 12 to 800 sq.m., the superette storesposted revenue of €1,494 million in <strong>2010</strong>.The superettes are continuing their initiatives in the launching of newconcepts. In the past few years, these include the development ofvending machines with Petit <strong>Casino</strong> 24 and Express by <strong>Casino</strong> inEsso service stations, as well as the introduction of food corners inairports and train stations. They are also developing new servicessuch as “AlloCLivré”, a new grocery delivery service introduced in<strong>2010</strong>. Customers can place their orders directly with the store of theirchoice using a toll-free number and the groceries are delivered duringthe same morning or afternoon. The service is free and there is nominimum order. All deliveries are made by electric carrier-tricycle.DiscountLeader Price, the Group’s discount banner, operates in urban andsuburban areas across France. It is aimed at price-sensitive consumersand offers an extensive food range (4,200 items), including freshproduce, frozen goods and a few core regional products, more than90% of which is entirely under the Leader Price own brand and Le PrixGagnant value line label.This distinguishing feature, coupled with low operating costs andinventory requirements, makes Leader Price a very attractivefranchise concept, with almost half of all stores now operated underfranchise.In <strong>2010</strong>, Leader Price launched a sales revitalisation programme thatbegan in the first half with significant price cuts supported by increasedadvertising. The second half saw the rollout of a new store concept,the gradual introduction of 250 selected national brand products anda broadened Leader Price private label offering.Expansion also continued apace, with 52 new stores opened duringthe year, bringing the total to 585 at end-December <strong>2010</strong>.Leader Price’s business volume (1) in <strong>2010</strong> totalled €2,793 million.HypermarketsGéant <strong>Casino</strong>’s positioning is based on an enjoyable, comfortableshopping experience in people-friendly stores, whose average sellingarea is 7,000 sq.m. compared with the market standard of about9,000 sq.m. It stands apart from rival banners through its emphasison private-label products, its expanded, prominently displayed freshfood offering, and the development of new non-food universes suchas home decoration and lifestyle.At end-<strong>2010</strong>, Géant <strong>Casino</strong> operated 125 hypermarkets, mainly insouthern France.To meet customers’ expectations, and particularly women whorepresent 75% of its shoppers, Géant has been working on renovatingits concept over the past three years with the aim of creating a morewelcoming and more convenient environment. In late 2007, thenew concept was tested in the Pessac hypermarket near Bordeauxand had been extended to almost 30 stores by the end of 2009.The store offering centres on fresh food, private-label products thatprovide good value for money and the fast-growing apparel, homeand leisure segments.Géant <strong>Casino</strong> has also embarked on an ambitious plan to refocus itsnon-food offering on the more buoyant and profitable apparel, homeand leisure segments. Alongside the refocusing plan, store spaceis being reorganised and scaled down to improve return on capitalemployed. As a result, over 16,000 sq.m. of selling and storage space(more than 1% of the total) are being transferred to Mercialys, withinthe framework of the asset contribution made in 2009 (for furtherdetails, please see “Real estate and investments”, page 13).Another key differentiating factor was the launch of Alcudia in 2008,a plan to capture the value of the Group’s shopping centres throughMercialys, its dedicated shopping mall investment company (pleasesee below for further details on Mercialys).Géant <strong>Casino</strong>’s revenue amounted to €5,516 million in <strong>2010</strong>.E-commerceCdiscount was founded in 1998 and became a <strong>Casino</strong> Groupsubsidiary in 2000. It is the leading French B to C e-commerce site,posting growth that outperformed its peers in <strong>2010</strong>.As a multi-specialist, Cdiscount offers 100,000 items across morethan 40 stores, organised into major universes such as leisure andculture, high-tech, IT, household equipment, footwear and apparel,travel, health and beauty, and services (financing, insurance, videoon-demand,etc.).Since its creation, Cdiscount has cultivated a clear positioning asa specialist in the “Best products at the best prices”. Its success isunderpinned not only by this attractive price positioning but also byits innovative capability, its highly competitive cost structure and itsfast commercial response.In <strong>2010</strong>, Cdiscount attracted more than 10 million customers. Itsstrong momentum was reflected in 14.5% organic sales growth to€961 million (€1.1 billion including VAT).(1) Includes all revenue from consolidated companies, associates and franchisees, on a 100% basis.(2) Excluding wholesale outlets.8 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PRESENTATION OF THE CASINO GROUPBusiness and strategy1The Group also continued to promote synergies between Cdiscountand its banners. The pick-up service introduced in 2009 enablingCdiscount customers to collect large items (over 30 kg) from Géanthypermarkets was extended in <strong>2010</strong> to Petit <strong>Casino</strong> stores for smallitems under 30 kg. By the end of the year, this service was alreadyavailable in the 1,800 integrated Petit <strong>Casino</strong> stores and will beextended to all superettes in the first half of 2011.Real estateMercialys, a 51.1% subsidiary of <strong>Casino</strong>, is an SIIC (French style REIT)listed on the stock market since 2005. It is one of France's leadingreal estate investment companies and a major player in shoppingcentres. At end <strong>2010</strong>, it had a portfolio of 130 properties including92 shopping centres. It owns the Group’s shopping centres and isresponsible for enhancing their value through the Alcudia/Esprit Voisinprogramme (for further details, please see section 1.4 “Real estateand investments”).Other businessesThe Group has developed a number of other retail-relatedbusinesses:<strong>Casino</strong> Restauration<strong>Casino</strong> Restauration was historically positioned in the fast foodsegment through its chain of <strong>Casino</strong> cafeterias.In the past few years, it has been repositioning through innovativeconcepts such as theme restaurants (Villa Plancha), takeout foodservice(Cœur de Blé) and corporate foodservice (R2C: Restauration Collective<strong>Casino</strong>).Banque <strong>Casino</strong>Created in 2001 in partnership with Cofinoga, Banque <strong>Casino</strong> providesconsumer finance in Géant <strong>Casino</strong> hypermarkets, <strong>Casino</strong> supermarketsand the Cdiscount site. It has almost one million customers.In July <strong>2010</strong>, it entered into a long-term partnership with <strong>Groupe</strong>Crédit Mutuel-CIC, whose interest in Banque <strong>Casino</strong> will increase to50%, with <strong>Casino</strong> owning the remaining 50%.During the year, Banque <strong>Casino</strong> launched “<strong>Casino</strong> Banque et Services”,a new range of financial and insurance products, such as motor,health and pet insurance. It has been available since June <strong>2010</strong> inall Géant hypermarkets, as well as some <strong>Casino</strong> supermarkets andPetit <strong>Casino</strong> stores.Sustained development in private-label goodsThe <strong>Casino</strong> Group was a pioneer in private label products, launchingits own brand as early as 1901.In 1931, it released its first advertising for private label products withthe slogan “<strong>Casino</strong>, above all a great brand”. In 1959, the Group beganto put sell-by dates on its products, well before the regulations wereintroduced, and in 1984, offered a double money-back guaranteeon its products.Since 2005, the Group has stepped up the development of its ownlabel.In 2005, the private-label mix was completely overhauled, includingnew-look packaging, specific promotional campaigns (e.g. Gratos)and the development of 340 core items.In 2006, the private-label platform was consolidated with theintroduction of a new design across the entire range, an increasedpresence in the more buoyant markets and segments such as freshproduce and wines, and the launch of 451 new products in morespecific segments.2007 was a year of differentiation, with the adoption of higherquality communications, strong positioning in theme ranges (e.g.nutrition), and the launch of 500 new products including cosmeticsand confectionery.Thanks to this sustained development policy, the <strong>Casino</strong> brand enjoyeddouble-digit sales growth from 2005 to 2008.The brand’s strength lies in its competitive pricing, broad productrange and ability to regularly renew its product lines. For example,more than 400 new products were introduced in <strong>2010</strong>.<strong>Casino</strong> brand products were sold in more than 7,200 stores in <strong>2010</strong>,making it the leading private label in FMCG and refrigerated productsin terms of sales penetration. It now accounts for close to 50% oftotal volumes (1) .In <strong>2010</strong>, the <strong>Casino</strong> product portfolio comprised more than13,000 items – including 5,400 food items – covering broad productranges, thereby providing a segmented offering tailored to the latestconsumer trends and designed to meet each consumer’s specificneeds. The ranges include <strong>Casino</strong> Délice for gourmet food lovers,<strong>Casino</strong> Ecolabel for shoppers sensitive to sustainable developmentissues, <strong>Casino</strong> Bio for consumers seeking organic products and <strong>Casino</strong>Famili for family shoppers, which also covers non-food items.In late <strong>2010</strong>, <strong>Casino</strong> launched “<strong>Casino</strong> Bien Pour Vous”, a new wellbeingrange comprising both food and non-food items divided intofour main categories – fitness, protection, specific nutrition and sport.In early 2011, <strong>Casino</strong> Bien Pour Vous already boasted some onehundred items. The Group has also begun to revamp the packagingof its value-line label with a new range of daily basics called “Tous lesjours”. Comprising over 1,500 items, the range will cover all segments(food, hygiene, household goods and equipment, and apparel).Both these new ranges have been available in all <strong>Casino</strong> stores(hypermarkets, supermarkets and superettes) since early 2011.In non-food, the product offering has more than doubled since 2006and now comprises 7,600 items. The ranges include Ysiance forhealth and beauty, <strong>Casino</strong> Désirs for household and leisure goodsand Tout Simplement for clothing.The Group’s private label policy also stands out for its commitmentto sustainable development. <strong>Casino</strong> was the first retailer to sign thegovernment-sponsored voluntary code of commitment to nutritionalprogress in 2008. It was also the first French retailer to measurethe environmental impacts of its products, introducing the CarbonIndex in 2008, an environmental label that shows the amount ofgreenhouse gases generated by a product during the five key stagesof its lifecycle. By the end of <strong>2010</strong>, 650 products already carried theCarbon Index label. In <strong>2010</strong>, <strong>Casino</strong> also pledged to eliminate palmoil from its private label goods, representing another example of itsinitiatives in nutritional progress and its ability to meet society’s newconcerns. By the end of <strong>2010</strong>, <strong>Casino</strong> had reformulated 200 of the600 or so products that contained palm oil, with this initiative sharedby all the Group’s banners in France. Lastly, on 1 May <strong>2010</strong>, <strong>Casino</strong>launched a range of gluten-free private-label products in the Group’shypermarkets and supermarkets.Individualised marketingCustomer loyalty is an important factor in both revenue growth andmargin improvement. Thanks to the loyalty programme offered in itshypermarkets and supermarkets and its participation in the S’milesnetwork, the Group has a solid customer franchise with almost4 million card holders.(1) Private and value line FMCG and refrigerated products across all formats (Géant, <strong>Casino</strong> Supermarkets and convenience stores).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group9
1PRESENTATION OF THE CASINO GROUPBusiness and strategyIn November 2006, <strong>Casino</strong> signed a partnership with dunnhumby,creating a 50/50 joint venture company. dunnhumby is a recognisedexpert in data mining and managing customer data. Its mission issimple: “Understand the customer better than anyone else”.Through this partnership, the Group now has an effective marketingtool and can exploit data collected from its loyalty programme toanalyse each store’s consumer profile and build a product offeringtailored to each customer type at the individual store level.The main areas in which this approach is applied are pricing policyoptimisation, definition of assortment and communication. The initialinitiatives taken in 2007 began to produce results and were scaled upduring 2008. In terms of assortment, for example, the <strong>Casino</strong> Déliceslabel launched in 2008 has proved successful. Communication wasalso enhanced with the introduction of personalised statements foreach customer.In 2009, the Group extended the areas covered by the “dunnhumbytool” by implementing a more effective promotional policy andrationalising product ranges to eliminate low turnover products withoutimpacting revenue.c. Presentation of internationalbusiness and strategyInternational business is a powerful growth vector for the Group,which operates in eight countries with a total of 2,202 stores including294 hypermarkets. International revenue totalled €11,122 million in<strong>2010</strong>, representing 38% of the Group total compared with 34% in2009. The trading margin was 4.8% in <strong>2010</strong>.The portfolio of international assets has been thoroughly remodelled.<strong>Casino</strong> now has a geographic platform comprised of countrieswith high growth potential, large, young populations, fast-growingeconomies and a largely fragmented retail structure.<strong>Casino</strong> now focuses on two core regions: South America and South-East Asia, which accounted for more than 90% of the Group’s totalinternational revenue in <strong>2010</strong>. Its subsidiaries hold leadership positionsthanks to their long-established store banners and close-to-thecustomerrelations. Reflecting this momentum, the two regions bothreported a buoyant performance throughout the year, with organicgrowth of 13% in South America and 7.4% in Asia.<strong>Casino</strong> also operates in the Indian Ocean region, where it has a leadingposition through Vindémia.South America<strong>Casino</strong> is the number-one food retailer in South America, with leadingpositions in Brazil, Colombia, Argentina and Uruguay. South Americaaccounted for 74% of international revenue and 70% of internationaltrading profit in <strong>2010</strong>. Brazil and Colombia are the biggest contributorsto South American revenue, generating 56% and 35% respectively.South America posted total <strong>2010</strong> revenue of €8,245 million with atrading margin of 4.5%.• Brazil<strong>Casino</strong> has operated in Brazil since 1999, through its subsidiaryGrupo Pão de Açucar (formerly CBD). Grupo Pão de Açucar (GPA)is a historic player in the Brazilian retail market, and over the past fewyears has adapted its positioning in food retailing to meet the needsof consumers whose standard of living has improved dramatically.Although hypermarkets and supermarkets still dominate, GPA now hasa multi-format, multi-banner portfolio that caters to a clientele drawnfrom all socio-economic backgrounds. It has also been developinginnovative private label goods, which are much appreciated byconsumers, including Qualità, an umbrella brand for food products,and Taeq, a health and well-being range.In 2009, GPA acquired Globex and its Ponto Frio banner, Brazil’ssecond largest retailer of consumer electronics and householdappliances. In <strong>2010</strong>, Globex signed an agreement with Casas Bahia,Brazil’s leading non-food retailer, making GPA the unrivalled leaderin consumer electronics and household appliances with a marketshare of more than 20%. A new company will be launched to houseGPA and Casas Bahia’s online retailing business, thereby creatingthe second largest Brazilian internet retailer.With these major strategic initiatives, GPA has consolidated itsposition as Brazil’s leading retailer both in food and consumer durablesegments.At the end of <strong>2010</strong>, GPA operated a total of 1,647 stores, with strongmarket positions in Brazil’s two most economically vibrant states, SãoPaulo and Rio de Janeiro.GPA posted revenue of €13,751 million in <strong>2010</strong>.GPA has been proportionately consolidated since 1 July 2005.<strong>Casino</strong> owned a 33.7% interest in GPA at end-<strong>2010</strong>. Ponto Frio hasbeen consolidated by GPA since 1 July 2009 and Casas Bahia since1 November <strong>2010</strong>.GPA posted consolidated revenue of €4,635 million in <strong>2010</strong>.GPA’s shares have been listed on the São Paulo Stock Exchangesince 1995 and the New York Stock Exchange since 1997.HypermarketsExtra: 110 storesExtra hypermarkets offer a vast range of food products as well aspersonal and household equipment, aiming to meet the demands ofas many consumers as possible at the best prices.SupermarketsPão de Açúcar: 149 storesPão de Açúcar convenience supermarkets offer a broad array ofhigh quality produce. Always at the leading edge of technology, thebanner also offers a range of services to meet the needs of a relativelyaffluent clientele.Sendas: 17 storesSendas stores are convenience-format supermarkets operatingexclusively in the Rio de Janeiro area and offering a broad range ofpremium products with high quality service.Extra: 101 storesExtra Perto stores are large supermarkets designed on a human scale.They provide an extensive food offering as well as a broad non-foodrange in modern, pleasant surroundings.CompreBem: 113 storesCompreBem supermarkets are aimed more at lower-incomeconsumers. They provide a large range of primarily private-label foodproducts, as well as a selection of non-food products.ConvenienceExtra Facíl: 68 storesExtra Facíl superettes are local convenience stores with a simple,pleasant look. They offer all basic products and services, with goodvalue for money.10 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PRESENTATION OF THE CASINO GROUPBusiness and strategy1Cash and carryAssai: 57 storesAssai is an “Atacarejo” store, a booming sector in Brazil. Atacarejois a combination of “Atacado” or wholesaler and “Varejo” or retailer.Assai is aimed at restaurant operators and the lower income segment,offering a broad range of food products and a small selection ofnon-food products.Other formatsPonto Frio: 506 storesPonto Frio is aimed mainly at the middle income segment. It providesa broad range of household appliances and furniture, accompaniedby advice and services.Casas Bahia: 526 storesCasas Bahia is the leading non-food retailer in Brazil and focuses onhousehold goods aimed at the lower income segment. It is hugelysuccessful due to its large range of competitively priced furniture,household appliances and consumer electronics. It also owes itsuccess to a broad geographical reach covering ten States, as wellas the quality of its customer service.• Colombia<strong>Casino</strong> has operated in Colombia since 1999 through its subsidiaryExito. At end-<strong>2010</strong>, Exito had 299 stores in 53 towns and cities acrossthe country. <strong>Mo</strong>st of its stores are hypermarkets and supermarketsbut it also operates in the convenience and discount segments.Exito strengthened its position as Colombia’s leading food retailer in2007 with the acquisition of Carulla Vivero and is now number-onein all its formats. In <strong>2010</strong>, Exito signed a strategic alliance with theretailer CAFAM, thereby consolidating Exito’s leadership, with 41%market share, and strengthening its operations in Bogotá.Under this agreement, 31 CAFAM stores joined the Exito networkat the end of <strong>2010</strong>.Exito intends to consolidate its coverage of large cities, enter smalland mid-size urban markets and develop convenience formats. Italso plans to develop its Bodega banner, which is aimed at the lowerincome population.In <strong>2010</strong>, Exito continued its banner rationalisation programme,converting a total of 38 stores including 8 to the Bodega banner.3 Exito hypermarkets and 2 supermarkets were opened, and a newconvenience format was also launched: Exito Express, with 9 storesopened in <strong>2010</strong>.In <strong>2010</strong>, Exito’s revenue totalled €2,907 million.Exito has been fully consolidated since 1 May 2007. <strong>Casino</strong> held a54.8% interest in its share capital at end-<strong>2010</strong>.Exito’s shares have been listed on the Bogota Stock Exchange since1994.HypermarketsExito: 73 storesExito is a hypermarket banner with stores in 53 towns and cities.Its food and non-food product offering is tailored to the needs of allsegments of the Colombian population. Exito stands out for the qualityof its textile range. Its private-label products also enjoy a very goodreputation with consumers. The outlets provide a variety of servicesincluding the “Exito points” loyalty programme, travel and financialservices (insurance).Supermarkets: 112 storesCarullaCarulla is the main supermarket banner and is renowned for itshigh quality.PomonaPomona supermarkets are aimed at an affluent clientele and offertargeted gourmet products. The network operates mainly in Colombia’sfour major cities: Bogotá, Medellín, Cali and Barranquilla.The two banners have a joint loyalty programme called “SuperclienteCarulla Pomona”.Bodega: 54 storesBodega is aimed at low-income families who generally prefer to shopin traditional convenience stores rather than big retail chains. Theyare located in suburban areas and offer a comprehensive range ofbasic products, mainly under the Surtimax private label.Other: 60 stores (of which 9 Exito Express convenience stores)Other banners—Merquefacil, Surtimax, Ley, Homemart, Proximo andQ’Precios—are less important and are due to be combined underthe Bodega umbrella banner.• Argentina<strong>Casino</strong> has been present in Argentina since it acquired Libertad in1998. The Group developed the Libertad chain of hypermarkets andlaunched the Leader Price brand before creating a network of LeaderPrice discount stores, which was sold in <strong>2010</strong>.Libertad also operates other specialist retail formats, includingPlanet.com and Hiper Casa, as well as a chain of Apetito Fast Foodrestaurants.In <strong>2010</strong>, the Group had a total of 23 stores generating consolidatedrevenue of €339 million.HypermarketsLibertad: 15 storesLibertad is the leading hypermarket chain outside the capital,operating mainly in large inland cities. It is typically the anchor storein a shopping centre.Other: 8 storesPlanet.comPlanet.com is a specialist electronics retailer (computers, audio,video, photography, etc.), with an average selling area of about2,000 sq.m.Hiper CasaHiper Casa sells home and office decoration and equipment and isthe Argentinean leader in this market. It is a benchmark for consumersseeking quality products and service.• UruguayThe local market leader since 2000 through its Devoto subsidiary,<strong>Casino</strong> has three store banners that enjoy high brand recognition:Disco, Devoto and Géant.The Group had 53 stores at end-<strong>2010</strong> generating consolidatedrevenue of €364 million.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group11
1PRESENTATION OF THE CASINO GROUPBusiness and strategySupermarketsDisco: 28 storesOriginally a chain of family supermarkets, Disco enjoys strongrecognition throughout the country and focuses on competitive pricing.Disco stores are conveniently located and much appreciated byconsumers. The two key strengths are reflected in Disco’s signature:“Ever closer at better prices”.Devoto: 24 storesDevoto was originally a family company and has continued to developby opening large modern stores, some of which offer an extensivenon-food range. With its signature “Price and quality. Always”, Devotoclearly states its strong positioning focused on affordability but alsoon product quality and customer service.HypermarketsGéant: 1 storeGéant is Uruguay’s only hypermarket.This 11,000 sq.m store located in the suburbs of <strong>Mo</strong>ntevideo offersa broad range of products at the lowest prices in the country.AsiaThe Group has operated in Asia since 1999, where it now focuseson Thailand and Vietnam.In <strong>2010</strong>, Asia generated €2,009 million in revenue with a tradingmargin of 6%.The region accounted for 18% of international revenue and 23% ofinternational trading profit.• ThailandThe 1999 acquisition of a stake in Big C made <strong>Casino</strong> the number-twolarge-surface food retailer in Thailand.Big C enjoys the image of a powerful local banner selling productsat cheap prices aligned with local tastes.There were 116 stores at end-<strong>2010</strong>, including 70 hypermarkets. Big Coperates as many shopping centres as hypermarkets, reflecting the<strong>Casino</strong> Group’s aim of exporting its French “retailing and propertydevelopment” dual business model to its key international markets.Recently, Big C also entered the convenience segment with its “MiniBig C” stores.In <strong>2010</strong>, Big C continued to expand its private label, adding 300 newitems to its Happy Baht value-line and Big C Care well-being ranges.It also continued to roll out its ambitious customer loyalty programme“Big Card”, introduced in 2009. Lastly, Big C has stepped up itsexpansion, opening four new hypermarkets and has launched a newsupermarket store concept: “Big C Junior”.In <strong>2010</strong>, Big C generated €1,753 million of revenue.Big C’s shares have been listed on the Bangkok Stock Exchangesince 1994.<strong>Casino</strong> has a 63.2% interest in Big C.The acquisition of Carrefour Thailand’s business effective since early2011 has made Big C co-leader in the hypermarket segment.Hypermarkets: 70 storesBig C hypermarkets offer the lowest prices in the market, regularpromotions and excellent value for money. They also differentiatethemselves from the local stores by making shopping an enjoyableand pleasant experience (through in-store events, etc.), therebyencouraging consumers to return.Supermarkets: 2 storesBig C Junior was launched in <strong>2010</strong>, with an average selling area of4,000 sq.m.Convenience: 15 storesBig C operates in the convenience store segment through its Mini-Big Cbanner, which aims to attract an urban clientele seeking to make theirdaily shopping as quick and easy as possible.OtherPure: 29 storesLaunched in 2008, Pure is a new store concept offering a range of4,000 health, beauty and personal care items.• VietnamVindémia, a <strong>Casino</strong> Group subsidiary, opened the first “French-style”hypermarket in Vietnam in 1998 under the Big C banner. Vietnam is ahighly promising market, with a large, young population of 88 million,a fast-growing economy and substantial potential for developingmodern trade.At end-<strong>2010</strong>, Big C had 14 hypermarkets, all located in shoppingcentres in line with the Group’s dual development model implementedboth in France and internationally.Big C outlets stand out for their quality of service, range of freshproduce and store price image. Big C is the leader in store priceimage (source: Nielsen) and the Big C Vietnam brand was voted thirdpreferred brand by Vietnamese consumers in <strong>2010</strong>.Big C has embarked on an ambitious expansion programme, openingfive hypermarkets in <strong>2010</strong> with plans to open five more a year overthe next three years.Big C Vietnam posted revenue of €257 million in <strong>2010</strong>.Other countries• Indian OceanThe Group operates in the Indian Ocean region through its Vindémiasubsidiary.Vindémia has a very strong market position in Reunion, which accountsfor more than 80% of sales, but also operates in Madagascar, Mayotteand Mauritius.The Group is leader in the region through its multi-format positioningwith Jumbo hypermarkets, Score supermarkets and Spar conveniencestores. It now has a total of 50 outlets.In <strong>2010</strong>, the Group posted consolidated revenue of €866 million inthe Indian Ocean region.12 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PRESENTATION OF THE CASINO GROUPReal estate and investments11.4 REAL ESTATE AND INVESTMENTS1.4.1 OPTIMISING THE PROPERTY PORTFOLIOReal estate comprises a large part of the Group’s assets with a valueof €6.7 billion at end-<strong>2010</strong>.In France, the portfolio is worth €4.7 billion including €<strong>3.4</strong> billion forstore premises (mainly hypermarkets and <strong>Mo</strong>noprix) and €1.3 billionfor shopping centres (corresponding to the Group’s interest inMercialys).The International portfolio is worth an estimated €2 billion including€1.4 billion in store premises and €0.5 billion in shopping centres.In 2005, the Group embarked on an active strategy to capture thevalue of its real estate, by spinning off its shopping centres to Mercialys,a dedicated retail real estate subsidiary and a listed company. Atend-<strong>2010</strong>, Mercialys managed a portfolio worth €2.6 billion comprising130 assets including 92 shopping centres.Since the sale of its standard office and warehouse properties in 2005and 2006, the Group’s French property portfolio has comprised twoasset classes: investment property (Mercialys’ shopping centres) andfood store properties.Since 2007, the Group has pursued an assertive policy of turningover its food store assets, by selling properties that have reacheda certain maturity to finance those with high growth potential. Twomajor innovative transactions took place in 2007: (i) the sale to AEWImmocommercial, a property mutual fund (OPCI) (1) , of 250 urbanconvenience store and supermarket properties that could no longerbe extended any further, and (ii) the sale of store properties in Reunionto Immocio, another OPCI owned by the Generali group.A further transaction was completed in 2008, comprising the sale of42 superette, <strong>Casino</strong> supermarket and Franprix/Leader Price storeproperties to AEW Immocommercial and the sale of four <strong>Casino</strong>supermarket properties to another partner.The Group continued with this policy in 2009, selling further superette,supermarket and Franprix/Leader Price store properties in France.It also sold two shopping centres under its 2007 partnership with realestate investment fund Whitehall. This partnership, created to developshopping centres in Poland, leverages the property developmentteam’s skills through a dedicated unit called Mayland.In 2009, <strong>Casino</strong> created GreenYellow, a wholly-owned subsidiaryinvolved in photovoltaic (PV) energy. The new venture will leveragethe Group’s expertise in property development, construction andoperation, as well as the favourable geographic location of its stores,a majority of which are in sunny regions.As a designer and promoter of solar power generating systems,GreenYellow has defined a development programme that involvesequipping all of the Group’s sites in mainland France south of aBordeaux-Grenoble line, as well as in Corsica and Reunion Island. Thisrepresents potential capacity of more than 250 MWp (2) . Subsequently,non-Group clients will be able to benefit from GreenYellow’s expertiseto equip their parking lots, commercial sites and industrial buildingswith rooftop PV systems.The first stage of this programme was completed in <strong>2010</strong> with sixsites equipped in mainland France (Istres), Reunion (Saint-André,Saint-Benoît, Saint-Paul, Le Port) and Mayotte (Mamoudzou). Thereare now 42,000 solar panels installed on the rooftops and car parksat these sites, providing a capacity of 12.8 MWp (2) .(1) A tax-advantaged vehicle in France designed to promote investment in property stocks.(2) Megawatts-peak.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group13
1PRESENTATION OF THE CASINO GROUPReal estate and investments1.4.2 ROLLING OUT THE DUAL RETAILING AND PROPERTYDEVELOPMENT MODEL IN FRANCE AND ABROADThe Group’s expansion plan in France and abroad is based on abusiness model combining retailing with property. This model underpinsthe Group’s profitable growth strategy and meets two key objectives:to increase the appeal of its sites in order to drive the retail businessand to create a portfolio of valuable assets.<strong>Casino</strong> has set up a dedicated department in France called <strong>Casino</strong>Immobilier et Développement, which comprises subsidiaries specialisingin areas ranging from land purchase and property development toproperty letting and asset value enhancement:■ Immobilière <strong>Groupe</strong> <strong>Casino</strong> (IGC), a wholly owned subsidiary,holds the Group’s store properties.■ Mercialys, a subsidiary of IGC, owns the Group’s shopping centresin France and is responsible for operating this high-potential retailspace with the goal of capturing its full value. Mercialys is oneof France’s biggest property companies and a leading shoppingcentre operator.■ <strong>Casino</strong> Développement coordinates expansion in France andinternationally.■ IGC Promotion, Onagan and Soderip promote the Group’s retailspace in France.■ IGC Services manages asset turnover and financial engineeringof the property portfolio.■ Mayland develops shopping centres in Central and EasternEurope.■ Sudeco manages shopping centre leases.■ GreenYellow installs solar panels on the store roofs and shoppingcentre car parks.1.4.3. ENHANCING THE VALUE OF EXISTING ASSETS:THE ALCUDIA/“ESPRIT VOISIN” PROGRAMMEMercialys, the owner of the Group’s shopping centres in France, aimsto redevelop its retail space to meet changing consumer trends. Byrenovating and extending high potential retail space, Mercialys attractsthe most active banners and contributes to enhancing the vitality of<strong>Casino</strong>’s shopping centres.Three years ago, the Group set up the Alcudia plan, a majorprogramme to enhance the value of its retail properties with a view tocreating both real estate value and business value in France.Initiated in 2006, the plan aims to strengthen the appeal of the Group'sretail properties by extending shopping centres and creating thrivingsites that have their own personality and are deeply rooted in local life.The process of reviewing and defining a strategic plan for the Group’s109 sites was finalised in 2007 and the operational rollout phasebegan in 2008.In 2009, a major milestone was achieved when <strong>Casino</strong> contributedto Mercialys a €334 million portfolio of property assets comprising25 <strong>Casino</strong> development projects and hypermarket retail and storagespace.In addition, under the Alcudia/Esprit Voisin plan, five sites wereextended and nine converted to the Esprit Voisin concept.A further milestone was reached in <strong>2010</strong> when Mercialys sold45 assets for an amount of €120.1 million at the year-end. Thesewere mature assets comprising mainly service malls, food stores,individual assets, single store and restaurant properties, variousco-ownership lots and a shopping centre at Saint-Nazaire consideredto have reached maturity.The Esprit Voisin programme continued in <strong>2010</strong> with seven completionsduring the year.14 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
2MANAGEMENTREPORTAT 31 DECEMBER <strong>2010</strong>Financial highlights .........................................................162.1. Business Review ............................................................172.2. Parent Company Business Review ................................232.3. Subsidiaries and Associates ..........................................252.4. Subsequent Events ........................................................292.5. Outlook for 2011 and conclusion ...................................302.6. Share Capital and Share Ownership ..............................302.7. Risk Factors and Insurance............................................402.8. Environmental Report.....................................................432.9. Employment Report .......................................................46Registration Document <strong>2010</strong> | <strong>Casino</strong> Group15
231 DECEMBER <strong>2010</strong>Financial highlightsFINANCIAL HIGHLIGHTS<strong>2010</strong> financial highlights:CONTINUING OPERATIONS€ millions 2009 <strong>2010</strong>Reportedchange (%)Organicchange (1)Total business volume excl. VAT (2) 36,842 42,777 +16.1% +8.3%Net sales 26,757 29,078 +8.7% +4.7%Gross profit 6,921 7,325 +5.8%EBITDA (3) 1,849 1,953 +5.6% -3.1%Depreciation and amortisation expense (639) (653) -2.2%Trading profit 1,209 1,300 +7.5% -3.9%Other operating income and expense (37) 15Financial income and expense, of which: (345) (362) -4.9%Finance costs, net (343) (345) -0.7%Other financial income and expense, net (2) (17)Profit before tax 828 953 +15.0%Income tax expense (201) (214)Share of profits of associates 6 13Profit from continuing operations 633 752 +18.7%Attributable to equity holders of the parent company 543 559 +3.0%Attributable to minority interests 90 193Net profit from discontinued operations 228 (9)Attributable to equity holders of the parent company 48 (9)Attributable to minority interests 179 0Total net profit 861 743 -13.7%Attributable to equity holders of the parent company 591 550 -7.0%Attributable to minority interests 270 193UNDERLYING NET PROFIT ATTRIBUTABLETO EQUITY HOLDERS OF THE PARENT (4) 534 529 -1.0%(1) Based on a comparable scope of consolidation and constant exchange rates, excluding the impact of asset disposals to OPCI property funds and before reclassifi cation of the CVAE underincome tax.(2) Includes all revenue from consolidated companies, associates and franchisees, on a 100% basis.(3) EBITDA = earnings before interest, taxes, depreciation and amortisation.(4) Profi t from continuing operations adjusted for the impact of other operating income and expense (as defi ned in the “Signifi cant Accounting Policies” section of the notes to the consolidatedfi nancial statements), non-recurring fi nancial items and non-recurring income tax expense/benefi ts (see Appendix on page 22).16 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Business Review22.1. BUSINESS REVIEW■■The Group achieved in <strong>2010</strong> the sales targets set at the beginningof the year and the financial targets set at the beginning of 2009for the period 2009-<strong>2010</strong>.In France, sales momentum accelerated thanks to an improvementin price competitiveness at Géant and Leader Price and stepped-upexpansion in convenience formats. The Group’s market share roseby 0.2 point at the end of the year. In International operations,organic sales growth (1) accelerated rapidly to reach double digits.Two major acquisitions were made in <strong>2010</strong> and early 2011, whichwill further increase International operations’ contribution to boththe Group’s revenue and trading profit.<strong>Casino</strong> also met its cost-cutting and inventory turnover-reductiontargets and exceeded its goal of €1 billion in disposals during 2009to <strong>2010</strong>. Net debt (2) / EBITDA therefore fell to 1.97x at end-<strong>2010</strong>,well below the target of 2.2x.Consolidated revenue rose by 8.7% in <strong>2010</strong>. The currency effectwas a positive 5.0%, mainly due to the sharp appreciation of theBrazilian real, Colombian peso and Thai baht against the euro duringthe period. Changes in scope of consolidation had a negative impactof 1.0% as the deconsolidation of the Venezuelan operations wasonly partially offset by the consolidation of Ponto Frio and CasasBahia by Grupo Pão de Açucar (GPA).■■■(1)Sales were up 4.7% on an organic basis and 3.9% excludingpetrol, a considerable improvement on the 0.1% decline excludingpetrol recorded in 2009. French and International both contributedto the growth.(1)- In France, sales were up 1.8% on an organic basis (0.6%excluding petrol). This sharp improvement on the 2.7% declineexcluding petrol recorded in 2009 stemmed mainly from a recoveryin Leader Price’s same-store sales, an improvement in Géant’sfood sales and the faster growth enjoyed by the convenienceformats and Cdiscount.(1)- International operations posted 10.8% organic sales growth ,driven by strong momentum in same-store sales and fasterexpansion in South America and Asia, the Group’s two coreinternational regions.Trading profit increased by 7.5% or 2.6% before the reclassificationof the CVAE (3) under income tax, but was down 3.9% on anorganic basis (1) .Trading margin fell by 5 bp to 4.5% and by 38 bp on an organicbasis (1) .- Trading margin in France narrowed by 26 bp and by 55 bp onan organic basis (1) , due mainly to the sales revitalisation plan atLeader Price and Géant.- Trading margin in International increased 29 bp reflecting improvedprofitability in both Asia and South America. It was down 7 bpon an organic basis (1) .2.1.1. FRANCE(62% of consolidated net sales and 59% of consolidated trading profit)€ millions 2009 <strong>2010</strong>Net salesReportedchangeOrganicchange (1)France 17,664 17,956 +1.7% +1.8%<strong>Casino</strong> France 11,829 12,016 +1.6% +1.8%<strong>Mo</strong>noprix 1,829 1,914 +4.7% +4.7%Franprix-Leader Price 4,007 4,026 +0.5% +0.5%Trading profitFrance 802 769 -4.1% -10.5%<strong>Casino</strong> France 439 463 +5.5% -2.3%<strong>Mo</strong>noprix 120 139 +15.6% +8.4%Franprix-Leader Price 243 167 -31.2% -35.0%Trading marginFrance 4.5% 4.3% -26 bp - 55 bp<strong>Casino</strong> France 3.7% 3.9% +14 bp - 15 bp<strong>Mo</strong>noprix 6.6% 7.3% +69 bp +23 bpFranprix-Leader Price 6.1% 4.1% - 191 bp - 212 bp(1) Based on a comparable scope of consolidation and constant exchange rates, excluding the impact of disposals to OPCI property funds and before reclassifi cation of the CVAEunder income tax (positive impact of €57.1 million).(2) Net debt as defi ned in Note 1.5.29 of the notes to the consolidated fi nancial statements.(3) Starting with the <strong>2010</strong> fi nancial year, the “Cotisation sur la valeur ajoutée des entreprises” (CVAE) is presented under “Income tax”, in accordance with the Group’s position andIAS 12.This reclassifi cation had a positive €59.2 million impact on EBITDA and trading profi t and no impact on net profi t.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group17
231 DECEMBER <strong>2010</strong>Business ReviewSales in France rose by 1.7% to €17,956 million in <strong>2010</strong> from€17,664 million in 2009. Organic growth stood at 1.8% and 0.6%excluding petrol, compared with falls of 3.8% and 2.7% respectivelyin 2009.Trading profit declined by 4.1% over the period to €769 million. Onan organic basis, trading profit declined 10.5% due to significant priceinvestments at Géant and Franprix-Leader Price.Trading margin narrowed by 26 bp to 4.3% and by 55 bp on an organicbasis, mainly due to a decline in margin at Franprix-Leader Price.Highlights by format were as follows:■ Franprix-Leader Price sales returned to growth, with an increaseof 0.5% to €4,026 million from €4,007 million in 2009.- Leader Price same-store sales made a strong recovery from thesecond quarter of <strong>2010</strong>, with a decline of just 1.4% comparedwith 10.8% in the first quarter. The improvement was confirmedin the third and fourth quarters, with growth of 1.1% and 5.6%respectively. This good performance reflects the effectiveness ofthe sales revitalisation plan introduced early in the year, whichled to an increase in footfalls and in the average basket value.Significant price cuts were introduced in the first half, supportedby increased advertising. The second half saw the rollout of anew store concept, the gradual introduction of 250 selectednational brand products and a reinforced Leader Price privatelabel offering. Sales investments were significantly stepped upin the final quarter to build shopper loyalty and consolidate theimprovement in traffic.Expansion also continued apace, with 52 new stores opened in<strong>2010</strong>, including more than half in the final quarter. In addition,24 stores were closed and two transferred to Franprix under thestore rationalisation plan.- Franprix reported a sustained 6.4% increase in sales, led by thestrong expansion drive. In all, 100 new stores were opened duringthe year, bringing the total to 870. The banner also pursued itsstore renovation programme, with more than 50% of the storebase upgraded to the new concept by the year end. Franprixreported 0.7% growth in same-store sales.- Franprix-Leader Price trading margin stood at 4.1%, down 191 bpon 2009 and 212 bp on an organic basis. The decline stemmedfrom the significant price investment at Leader Price and highercosts, partly as a result of store base expansion.■ <strong>Mo</strong>noprix’s same-store sales rose 2.5% in <strong>2010</strong>, lifted by a goodperformance in food sales, and particularly FMCG (1) and refrigeratedproducts. During the second half, <strong>Mo</strong>noprix improved its pricepositioning benefiting from the deployment of dunnhumby. Thebanner also introduced a repackaging programme for its coreprivate label range “M”.The sustained expansion policy also continued across all itsformats, with a total of 27 new stores opened in <strong>2010</strong>, including7 Citymarchés, 11 <strong>Mo</strong>nop’, 1 Beauty <strong>Mo</strong>nop’ and 8 Naturaliaoutlets.<strong>Mo</strong>noprix reported consolidated sales growth of 4.7% to€1,914 million from €1,829 million in 2009, increasing marketshare by 0.1 point.Trading margin stood at 7.3%, up 69 bp and 23 bp on an organicbasis.■<strong>Casino</strong> France:- Géant <strong>Casino</strong> hypermarket sales declined by 0.6% comparedwith 2009, to €5,516 million. Excluding petrol, same-store saleswere down 4.4%. The average basket declined by 0.7% andfootfalls contracted by 3.7%.Food sales showed noticeable improvement from one quarter tothe next, as Géant started to feel the benefits of the action plandeployed to strengthen price competitiveness. After cutting pricesin the first half, the banner focused on leveraging promotions andloyalty programmes in the second half. All these initiatives enabledGéant to stabilise its market share at year-end.Non-food sales were down 6.0%. The banner continued torefocus its non-food offer on the most promising categories,such as clothing, home and leisure. Category managementorganisation has now been deployed and is already deliveringtangible benefits in home segments, whose sales were stable inthe final quarter. Major efforts were also made to reduce inventoryand obsolete stocks. Improving non-food performance will be apriority in 2011.- <strong>Casino</strong> Supermarkets reported 4.0% growth in sales to€3,490 million from €3,355 million in 2009. Growth excludingpetrol sales was 1.7%. Same-store sales held steady excludingpetrol, declining by just 0.1%.The banner stepped up its pace of expansion, opening elevennew supermarkets during the quarter versus three in 2009.The banner’s market share remained stable across the year.- Superette sales amounted to €1,494 million versus €1,506 millionin 2009, a slight decline of 0.8%. This trend improvementcompared with 2009 was mainly due to completion of the storerationalisation programme. Over the year, 321 new sales outletswere opened and 304 closed (excluding wholesale stores).- Other businesses, primarily Cdiscount, Mercialys, Banque <strong>Casino</strong>and <strong>Casino</strong> Restauration, reported 6.8% growth in sales to€1,516 million from €1,420 million in 2009, and organic growthof 9%.This performance was driven mainly by strong momentum atCdiscount, with organic sales growth accelerating in the secondhalf to 18.5% from 10.1% in the first. Household appliances andhome segments made a strong contribution to this growth andCdiscount also continued to expand its offering to new universes,such as toys and jewellery. The pick-up service was also a keysuccess factor. Since 2009, Cdiscount customers have beenable to pick up parcels weighing more than 30 kg from Géanthypermarkets and this service was extended in <strong>2010</strong> to the 1,800integrated Petit <strong>Casino</strong> stores for parcels weighing less than30 kg. The service will be available throughout the entire superettenetwork in the first half of 2011. Cdiscount outperformed its directcompetitors and strengthened its leadership during the year.Growth in Cdiscount sales amply offset the fall-off in Géant<strong>Casino</strong>’s non-food sales, enabling the Group to report an increasein consolidated non-food sales for the year.Mercialys reported 11.4% growth in rental income (2) . The “EspritVoisin” programme continued with 7 completions during the year.Mercialys also achieved a new milestone in its value-creationstrategy, with the implementation of an active asset disposalpolicy. A total of 45 mature assets were sold for the sum of€121.5 million (3) , mainly comprising service malls, food stores,single store and restaurant properties and a shopping centre atSaint-Nazaire.- <strong>Casino</strong> France’s trading margin gained 14 bp to 3.9%. On anorganic basis it was down 15 bp due mainly to lower marginsat Géant following the price cuts. <strong>Casino</strong> Supermarkets and thesuperettes enjoyed solid profitability. Retail-related businessesreported an increase in trading profit.(1) Fast-moving consumer goods.(2) Data published by the Company.(3) Capital gains on disposal were recognised under “Other operating income” (see notes of the consolidated fi nancial statements).18 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Business Review22.1.2. INTERNATIONAL(38% of consolidated net sales and 41% of consolidated trading profit)€ millions 2009 <strong>2010</strong>ReportedchangeOrganicchange (1)Net sales 9,093 11,122 +22.3% +10.8%Trading profit 407 530 +30.2% +9.2%Trading margin 4.5% 4.8% +29 bp -7 bpInternational sales grew by 22.3% to €11,122 million.The sharp increase in the Brazilian real, Colombian peso and Thai bahtagainst the euro had a positive impact of 14.6%. The change in scopeof consolidation had a negative impact of 3.0% as the deconsolidationof the Venezuelan operations was only partially offset by Grupo Pãode Açucar’s consolidation of Ponto Frio and Casas Bahia.Adjusted for these effects, International operations achieved doubledigitorganic growth of 10.8%, up significantly from 4.9% in 2009.Trading profit rose by 30.2% to €530 million from €407 million in2009. This strong growth was lifted by the favourable currency effectand robust organic sales growth in South America and Asia. On anorganic basis, trading profit rose by 9.2%.Trading margin improved 29 bp to 4.8% reflecting significant margingains in South America and Asia. On an organic basis, trading margindeclined slightly by 7 bp due to a decrease in property developmentprofits in Poland. Margins in South America and Asia rose by 28 bpand 56 bp respectively on an organic basis.International contributed 38% to Group revenue and 41% to tradingprofit, versus 34% of both revenue and trading profit in 2009.South America■■■■Brazil (GPA proportionately consolidated on a 33.7% basis, Ponto Frio consolidated by GPA since 1 July 2009 and Casas Bahia since1 November <strong>2010</strong>);Argentina;Uruguay;Colombia.€ millions 2009 <strong>2010</strong>ReportedchangeOrganicchange (1)Net sales 6,563 8,245 +25.6% +13.0%Trading profit 250 372 +48.9% +20.3%Trading margin 3.8% 4.5% +70 bp +28 bpSales in South America rose 25.6% to €8,245 million from€6,563 million in 2009.The currency effect was a favourable 17.1% whilst the scope effectwas a negative 4.5%, mainly due to the deconsolidation of theVenezuelan operations.Organic sales growth was 13.0%, driven mainly by a strong 10.3%increase in same-store sales across South America as a whole.In Brazil, GPA posted strong 13.2% (2) growth in same-store sales.Excluding Globex, same-store sales rose by a sustained 10.5% (2) ,mainly reflecting good performances by Assaï and Extra supermarkets.Globex turned in another excellent same-store performance, withgrowth of 30.2% (2) driven mainly by a 62% (2) increase in e-commercesales.GPA continued to pursue an active expansion policy across all itsformats, opening a total of 54 stores during the year, including eightExtra hypermarkets, twenty-three Extra Facil convenience stores andthirteen Assaï cash and carry stores. In total, Brazilian sales wereup 38% (1) over the year (at constant exchange rates), driven by thefull-year consolidation of Ponto Frio and the consolidation of CasasBahia since 1 November <strong>2010</strong>.In Colombia, in a better economic environment than 2009, Exitoreturned to growth, up 5.7% (2) on a same-store basis compared witha decrease of 4.1% (2) in 2009. Exito continued its store rationalisationprogramme, converting 38 stores, and stepped up its expansion,opening 14 new stores including 3 hypermarkets. Exito Express, anew convenience format, was launched during the year, with 9 storesopened. Lastly Exito entered into a strategic alliance with CAFAM, thesecond largest retailer in Bogota. Under the agreement, 31 CAFAMstores joined the Exito network in the final quarter of <strong>2010</strong>.Total sales grew by 7.6% (2) in <strong>2010</strong>, outperforming the market andstrengthening Exito’s leadership position.Operations in Argentina and Uruguay continued to deliver sustainedsame-store growth.Trading profit in South America totalled €372 million in <strong>2010</strong>, up48.9% on a reported basis and 20.3% on an organic basis.Trading margin improved by 70 bp. Deconsolidation of the Venezuelanoperations, which had a lower margin than the region as a whole, hada positive impact, although this was partially offset in the first half by theconsolidation of Ponto Frio, which also has a below-average margin.On an organic basis, trading margin in South America increased by28 bp, mainly reflecting improved profitability at Ponto Frio and highermargins in Colombia.(1) Based on a comparable scope of consolidation and constant exchange rates, excluding the impact of asset disposals to OPCI property funds and before reclassifi cation of theCVAE under income tax.(2) Based on data published by the companies.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group19
231 DECEMBER <strong>2010</strong>Business ReviewAsia■■Thailand;Vietnam.€ millions 2009 <strong>2010</strong>ReportedchangeOrganicchangeNet sales 1,686 2,009 +19.2% +7.4%Trading profit 92 121 +32.1% +18.4%Trading margin 5.4% 6.0% +59 bp +56 bpAsia reported 19.2% growth in sales to €2,009 million from€1,686 million in 2009. The currency effect contributed 11.8%.Organic growth was 7.4%, lifted by a good same-store performanceof 6.0%.In Thailand, Big C posted an acceleration in same-store sales growthdespite the political unrest in the first half. Big C had to temporarilyclose its Rajdamri store after it was damaged by fire during the riotsin May <strong>2010</strong>. This trimmed sales growth by more than 2 bp. TotalBig C sales increased by 3.2% (1) in <strong>2010</strong>.In line with its targets, Big C resumed a sustained pace of expansion,opening four hypermarkets during the year including three in the finalquarter, compared with just one in 2009. The company also continuedto develop its new formats and at the end of <strong>2010</strong> had 15 Mini Big Cstores, 29 Pure stores and two Junior Big C supermarkets.On 5 January 2011, Big C’s shareholders approved the acquisitionof Carrefour’s Thailand operations, making Big C co-leader in theThailand hypermarket segment.Vietnam continued to post very strong sales growth of more than40% at constant exchange rates, and stepped up its expansion,opening five hypermarkets in <strong>2010</strong>, including four in the final quarter,compared with just one in 2009.Trading profit in Asia rose by 32.1% on a reported basis, to€121 million, and by 18.4% on an organic basis.Trading margin increased by 56 bp on an organic basis, driven bysignificantly improved profitability in Thailand and Vietnam.Other international businesses■■Indian Ocean;Poland.€ millions 2009 <strong>2010</strong>ReportedchangeOrganicchangeNet sales 844 868 +2.8% +2.3%Trading profit 66 38 n/a n/aTrading margin n/a n/a n/a n/aOther businesses mainly comprise the Indian Ocean region and theGroup’s property development operations in Poland.Operations in the Indian Ocean region performed satisfactorily,with sales up 2.1% on a same-store basis and 2.7% on an organicbasis.Trading profit from other businesses was down, mainly due to adecrease in property development profits in Poland.2.1.3. COMMENTS ON THE CONSOLIDATED FINANCIAL STATEMENTSSignificant accounting policiesPursuant to European regulation 1606/2002 of 19 July 2002, theconsolidated financial statements have been prepared in accordancewith the standards and interpretations issued by the InternationalAccounting Standards Board (IASB), as adopted by the EuropeanUnion and mandatory as of the reporting date. These standards areavailable on the European Commission’s website (http://ec.europa.eu/internal_market/accounting/ias/index_en.htm). They includeinternational accounting standards (IAS) and international financialreporting standards (IFRS), as well as interpretations issued by theInternational Financial Reporting Interpretations Committee (IFRIC).The significant accounting policies set out in note 1.5 to theconsolidated financial statements have been applied consistently toall periods presented in the consolidated financial statements, aftertaking account of or with the exception of the new standards andinterpretations set out in notes 1.1.1 and 1.1.2. Apart from IFRS 3Rand IAS 27R, which are applicable prospectively, these new standardsand interpretations had no material effect on the consolidated financialstatements.The impacts of adopting IFRS 3R – Business Combinations andIAS 27R – Consolidated and Separate Financial Statements aredescribed in the summary of significant accounting policies (seenote 1.3 of the notes to the consolidated financial statements).(1) Based on data published by the companies.20 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Business Review2Main changes in the scope of consolidation■■■■Consolidation of Globex by GPA since 1 July 2009.Sale of Super de Boer’s assets at the end of 2009; in accordancewith IFRS 5, Super de Boer’s net income has been reclassifiedunder “Discontinued operations” from 1 January 2008.Deconsolidation of the Venezuelan operations since 1 January<strong>2010</strong>.Consolidation of Casas Bahia by GPA since 1 November <strong>2010</strong>.Net salesConsolidated net sales rose by 8.7% to €29,078 million from€26,757 million in 2009.Main currency effectsThe positive 5.0% currency effect reflected the sharp increase inthe Brazilian real, Colombian peso and Thai baht against the euroduring the period.Main scope effectsChanges in the scope of consolidation had a negative impact of 1.0%,with the positive impact of Ponto Frio and Casas Bahia’s consolidationby Grupo Pão de Açúcar (GPA) in Brazil offset by the deconsolidationof the Venezuelan operations.A detailed review of sales growth is presented above, in the sectionson French and International operations.Trading profitTrading profit rose by 7.5% in <strong>2010</strong> to €1,300 million.Reclassification of the CVAE under income tax charge contributed4.9% to growth. The currency effect added 5.9% and changes in thescope of consolidation a further 0.6%.Adjusted for these effects, trading profit decreased by 3.9% on anorganic basis.A detailed review of trading profit is presented above, in the sectionson French and International operations.Operating profitOther operating income and expense represented net incomeof €15 million in <strong>2010</strong>, compared with net expense of €37 millionin 2009.The net income of €15 million in <strong>2010</strong> mainly included:■■■■€323 million in gains on asset disposals, including €186 million netgain on the disposal of Cativen shares in Venezuela, €104 millionnet gain on property disposal mainly by Mercialys and €24 milliongain on disposal of Franprix-Leader Price assets;€134 million in restructuring provisions and expense, mainly for<strong>Casino</strong> France (€84 million), Franprix-Leader Price (€14 million)and Latin America (€18 million);€112 million in provisions for contingencies and litigation (mainlyconcerning tax risks and disputes in various group entities);€97 million in impairment losses, including €69 million in losses onreceivables and accrued income resulting from the correction of prioryear accounting errors in a subsidiary identified at the year-end;■■€33 million in other expense;€67 million gain (corresponding to negative goodwill on theacquisition of Casas Bahia in Brazil. For further details, see note 3.1to the consolidated financial statements).The net expense of €37 million in 2009 mainly included:■■■■■■€146 million in gains on asset disposals (including €139 million ingains on the distribution of Mercialys shares, a €22 million gain onthe disposal of Vindémia’s production assets and a €28 million losson the disposal of the Group’s interest in Easy Colombia);€70 million in provisions for contingencies;€68 million in restructuring provisions and expense, mainly for theconvenience stores and Franprix-Leader Price;€27 million in litigation provisions and expense;€15 million in asset impairment losses;€2 million in other expense (mainly reflecting a €75 millionnon-recurring expense due to a tax amnesty law in Brazil, partiallyoffset by income from a €69 million indemnity linked to thetermination of an exclusivity clause negotiated by GPA).After other operating income and expense, operating profit amountedto €1,314 million in <strong>2010</strong>, up 12.1% from €1,173 million in 2009.Profit before taxProfit before tax rose by 15% to €953 million from €828 million in2009, after deducting net financial expense of €362 million comparedwith €345 million in 2009. This total includes:■■finance costs, net of €345 million, stable compared with 2009(€343 million). In France, net finance costs decreased mainly asa result of lower interest rates. In International, the increase innet finance costs was mainly due to expenses related to tradereceivables discounting in the Brazilian non-food operations;other net financial expense of €17 million compared with €2 millionin 2009.Profit attributable to equity holdersof the parentIncome tax expense came to €214 million in 2009 compared with€201 million in 2009. The effective tax rate was 22.4%. Excludingnon-recurring items, the underlying tax rate was 30.9% and 26.4%before the reclassification of CVAE under income tax, versus 27.4%in 2009. The decrease in the underlying tax rate was mainly due togeographical mix.The Group’s share in profits of associates was €13 million comparedwith €6 million in 2009.Profit attributable to minority interests totalled €193 million in <strong>2010</strong>compared with €90 million in 2009 (€111 million in 2009 excluding theadjustment of profit for the period from 29 April 2008 to 31 December2008 initially allocated to minority interests in the Franprix-LeaderPrice holding companies).After non-recurring items (mainly the minority interests in Exito’s capitalgain on disposal of Cativen shares and Mercialys’s capital gain onasset disposals), underlying profit attributable to minority interestscame to €144 million, an increase of 30.1% mainly reflecting theincreased profits at Mercialys and Exito.In light of these factors, net profit from continuing operationsattributable to equity holders of the parent rose 3% to €559 million,from €543 million in 2009.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group21
231 DECEMBER <strong>2010</strong>Business ReviewUnderlying net profit on continuing operations attributable toequity holders of the parent (1) declined by 1% to €529 million from€534 million in 2009.The loss from discontinued operations attributable to equityholders of the parent amounted to €9 million in <strong>2010</strong>, mainlycorresponding to expenses associated with businesses sold inprior periods. In 2009, the gain from discontinued operations was€48 million, corresponding mainly to the capital gain on the Superde Boer disposal in late 2009.Total net profit attributable to equity holders of the parent fell7.0% to €550 million from €591 million in 2009.Cash flowsCash flow declined 8.1% to €1,188 million from €1,292 million in2009.Change in working capital was a positive €112 million in <strong>2010</strong>compared with a €219 million increase in 2009, driven by a favourabletrend in goods working capital, which increased by €253 million in<strong>2010</strong> due to sustained sales growth and an improvement in inventoryturnover. Non-goods working capital decreased by €141 million dueto the impact of Casas Bahia’s consolidation.Capital expenditure amounted to €954 million in <strong>2010</strong>, a containedincrease over the 2009 level of €810 million. In France, the Groupcontinued to expand in the most buoyant, cash-efficient formats(<strong>Casino</strong> Supermarkets, <strong>Mo</strong>noprix, Franprix and Leader Price). InInternational, subsidiaries in the Group’s core regions (Brazil, Colombia,Thailand and Vietnam) significantly stepped up their expansion after amore selective policy in the more difficult environment of 2009.Disposals totalled €692 million, mainly comprising the gain on disposalof Cativen shares in Venezuela and property disposals in France.Acquisitions amounted to €160 million.Financial positionNet debt stood at €3,845 million at 31 December <strong>2010</strong>, comparedwith €4,072 million one year earlier. The net debt to EBITDA ratio (2)fell to 1.97x versus 2.2x at end-2009, well below the end-<strong>2010</strong>target of 2.2x.Equity came to €9,064 million at 31 December <strong>2010</strong> compared with€7,919 million at 31 December 2009. The increase stemmed mainlyfrom favourable currency effects and the consolidation of CasasBahia. Net debt to equity therefore improved significantly to 42.4%at 31 December <strong>2010</strong> versus 51.4% a year earlier.Two bond exchange offers made in the first half, in an aggregateamount of around €1.4 billion, noticeably improved the Group’sdebt profile and extended the average bond maturity from 2.9 to4.4 years.(1) Profi t from continuing operations adjusted for the impact of other operating income and expense (as defi ned in the “Signifi cant Accounting Policies” section of the notes to theconsolidated fi nancial statements), non-recurring fi nancial items and non-recurring income tax expense/benefi ts (see Appendix below: Reconciliation of reported net profi t tounderlying net profi t).(2) EBITDA (earnings before interest, taxes, depreciation and amortisation) = trading profi t + amortisation and depreciation expense.2.1.4. APPENDIX: RECONCILIATION OF REPORTED NET PROFITTO UNDERLYING NET PROFITUnderlying net profit corresponds to net profit from continuingoperations, adjusted for the impact of other operating income andexpense (as defined in the “Significant Accounting Policies” sectionof the notes to the consolidated financial statements), non-recurringfinancial items and non-recurring income tax expense/benefits.Non-recurring financial items include fair value adjustments to certainfinancial instruments whose market value may be highly volatile. Forexample, fair value adjustments to financial instruments that do notqualify for hedge accounting and embedded derivatives indexed tothe <strong>Casino</strong> share price are excluded from underlying profit.Non-recurring income tax expense/benefits correspond to tax effectsrelated directly to the above adjustments and to direct non-recurringtax effects. In other words, the tax on underlying profit before tax iscalculated at the standard average tax rate paid by the Group.Underlying profit is a measure of the Group’s recurring profitability.€ millions2009(reported)Adjustments2009(underlying)<strong>2010</strong>(reported)Adjustments<strong>2010</strong>(underlying)Trading profit 1,209 0 1,209 1,300 0 1,300Other operating income and expense (37) 37 0 15 (15) 0Operating profit 1,173 37 1,209 1,314 (15) 1,300Finance costs, net (1) (343) 3 (340) (345) 0 (345)Other financial income and expense (2) (2) 13 11 (17) 18 1Income tax expense (3) (201) (40) (241) (214) (82) (296)Share of profits of associates 6 0 6 13 0 13Profit from continuing operations 633 12 645 752 (79) 673Attributable to minority interests (4) 90 20 111 193 (49) 144ATTRIBUTABLE TO EQUITYHOLDERS OF THE PARENT 543 (8) 534 559 (30) 529(1) Finance costs, net are stated before changes in the fair value of the embedded derivative corresponding to the indexation clause on the bonds indexed to the <strong>Casino</strong> share price (€3 millionexpense in 2009 and n/a in <strong>2010</strong>).(2) Other fi nancial income and expense, net is stated before changes in the fair value of interest rate derivatives not qualifying for hedge accounting (n/a in <strong>2010</strong> and €13 million expense in 2009and the impact of discounting deferred tax liabilities in Brazil (€18 million expense in <strong>2010</strong>).(3) Income tax expense is stated before the tax effect of the above adjustments and non-recurring income tax expense/benefi ts (recognition of tax loss carryforwards, etc.). In other words, thetax on underlying profi t before tax is calculated at the standard average tax rate paid by the Group.(4) Minority interests are stated before the above adjustments and, in 2009, before adjustment of profi t for the period from 29 April to 31 December 2008 initially allocated to minority interests,in an amount of €17 million.22 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Parent Company Business Review22.2. PARENT COMPANY BUSINESS REVIEW2.2.1. BUSINESS REVIEW<strong>Casino</strong>, Guichard-Perrachon, parent company of the <strong>Casino</strong> Group, isa holding company. Its activities consist of defining and implementingthe Group’s development strategy and coordinating the businesses ofthe various subsidiaries, acting jointly with their respective managementteams. The Company also manages a portfolio of brands, designsand models licensed to the subsidiaries. In addition, it manages theGroup cash pool in France and is responsible for overseeing the properapplication of Group legal and accounting rules and procedures bythe subsidiaries.In <strong>2010</strong>, the Company had net revenue of €153.7 million versus€151.2 million in 2009, corresponding mainly to trademark andbanner licence fees and management fees received from subsidiaries.Substantially all of its net revenue is derived from the Frenchsubsidiaries.The Company does not have any specific research and developmentactivities.2.2.2. FINANCIAL REVIEWThe financial statements are prepared in accordance with Frenchgenerally accepted accounting principles as approved by the decreeof 22 June 1999, and with all CRC standards published after thatdate.The accounting principles and policies applied to prepare the financialstatements are substantially the same as those used in the previousyear.These principles and policies are described in the notes to thefinancial statements, which also include a detailed analysis of the mainbalance sheet and income statement items, as well as movementsduring the year.At 31 December <strong>2010</strong>, the Company had total assets of€14,957.6 million and equity of €7,218.5 million. Non-currentassets amounted to €9,408.8 million (including €9,349.6 million ininvestments).Total debt stood at €7,066.6 million versus €7,292.2 million at31 December 2009, a decrease of 3.1%. Net debt stood at€5,377.5 million versus €5,294.8 million at end-2009, representing74.5% of equity. Details of debt and financial liabilities are providedin note 13 to the parent company financial statements. No debt issecured by collateral over the Company’s assets. At 31 December<strong>2010</strong>, the Company had confirmed undrawn bank lines totalling€1,640 million.As required by article L. 441-6-1 of the French Commercial Code (Code de commerce), the following table shows a breakdown of tradepayables by due date at the year-end:1 to 30 daysbefore thedue date31 to 60 daysbefore thedue date61 to 90 daysbefore thedue date<strong>Mo</strong>re than91 days beforethe due date Past due Total€ <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009Trade payables 21,089,711.68 14,508,519.14Accounts payable 1,626,397.28 1,735,158.67 3,541,326.43 3,324,897.27 838,617.32 917,129.65 6,006,341.03 5,977,185.59Bills payable 896,374.86 1,087,626.28 27,162.93 50,706.04 23,064.89 215.28 923,753.07 1,161,397.21Invoices not yet received 14,159,617.58 7,369,936.34Amounts dueto suppliers ofnon-current assets 149,139.91 143,186.95Accounts payable 1,817.92 56,478.72 58,296.64 0.00Bills payable 20,161.10 141,034.15 11,364.17 2,152.80 31,525.27 143,186.95Invoices not yet received 59,318.00 0.00Operating profit for the year came to €37.6 million versus €51.5 millionin 2009.The Company had net financial revenue of €125.1 million versus€261.3 million in 2009. The figure mainly includes:■■€348.4 million in income from investments in subsidiaries andassociates versus €526.9 million in 2009 (under the by-laws ofDistribution <strong>Casino</strong> France, <strong>Casino</strong> Restauration and L’Immobilière<strong>Groupe</strong> <strong>Casino</strong>, the Company records its share of each of thesecompanies’ profit for the year in its income statement);a €3.9 million capital loss relating to the sale of treasury shares;■a €12.6 million provision for amortisation of bond redemptionpremiums.Profit before tax and exceptional items therefore amounted to€162.7 million versus €312.8 million the previous year.Net exceptional income amounted to €99.8 million versus expenseof €(26.3) million in 2009. It mainly includes reversal of the provisionfor potential repayment of recognised tax savings to subsidiaries inthe French tax group (see note 4 to the parent company financialstatements).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group23
231 DECEMBER <strong>2010</strong>Parent Company Business ReviewProfit for the year, before tax, came to €262.5 million versus€286.5 million in 2009.As the parent company of the French tax group, <strong>Casino</strong>, Guichard-Perrachon recorded a tax benefit of €109.1 million in <strong>2010</strong>,corresponding to the tax saving arising from netting off the profit andlosses of the companies in the tax group. After taking this benefit intoaccount, net income for the year was €371.6 million compared with€40<strong>3.4</strong> million in 2009.2.2.3. NON-DEDUCTIBLE EXPENSESIn accordance with the disclosures required by Articles 223 quater, quinquies, 39-4 and 39-5 of the French General Tax Code (Code généraldes impôts), no non-deductible expenses were incurred during the year.2.2.4. DIVIDENDSIncluding retained earnings brought forward from prior years, the sumavailable for distribution comes to €2,838,400,099.46. The Board isrecommending a dividend of €2.78 per share, representing a totalamount of €307,659,439.14.Private shareholders resident in France for tax purposes will beentitled to claim 40% tax relief on their dividends, in accordance withArticle 158-3, paragraph 2, of the French Tax Code (Code général desimpôts), and have the option of paying a flat-rate withholding tax.The dividend will be paid as of 21 April 2011. Dividends on any<strong>Casino</strong> shares held by the Company on that date will be credited toretained earnings.Dividends paid over the last three years and the related tax credits are as follows:Year Class of shares Number of sharesDividendper shareDividend eligiblefor 40% tax reliefDividend noteligible for 40%tax relief2007 Ordinary shares 96,992,416 (1) €2.30 €2.30 -Preferred non-voting shares 15,124,256 (1) €2.34 €2.34 -2008 Ordinary shares 97,769,191 (2) €5.17875 (3) €5.17875 -Preferred non-voting shares 14,589,469 (2) €5.21875 (3) €5.21875 -2009 Ordinary shares 110,360,987 (4) €2.65 €2.65 -(1) Including 318,989 ordinary shares and 50,091 preferred non-voting shares held by the Company.(2) Including 250,730 ordinary shares and 411 preferred non-voting shares held by the Company.(3) At the annual general meeting of 19 May 2009, the shareholders voted to distribute a cash dividend of €2.53 per ordinary share and €2.57 per preferred non-voting share, plus an additionaldividend in the form of Mercialys shares on the basis of one Mercialys share for eight ordinary or preferred non-voting <strong>Casino</strong> shares. The per share value of the Mercialys stock dividend isequal to 1/8th of the Mercialys share price on 2 June 2009, i.e. €2.64875.(4) Including 85,996 held by the company.The following table shows the total dividend payout (in € millions) and the payout rate (as a percentage of net profit), over the past fiveyears:Year 2005 2006 2007 2008 2009Total payout 232.4 240.9 257.6 283.6 292.2Payout rate (% of net profit) 67.6 40.2 31.6 57.1 49.4By law, any dividends which have not been claimed within five years of their payment date will lapse and become the property of the FrenchState, in accordance with articles L. 1126-1 and L. 1126-2 of the French Public Property Code (Code général de la propriété des personnespubliques).24 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Subsidiaries and Associates22.3. SUBSIDIARIES AND ASSOCIATESThe business performance of the main subsidiaries is discussed on pages 6 to 23. A list of consolidated companies is provided on pages 123to 126. Information on <strong>Casino</strong>, Guichard-Perrachon’s subsidiaries and associates is provided on page 150.2.3.1. LEGAL STRUCTUREIn France, the Group’s business activities are managed through variousspecialised companies:The retailing business is mainly operated by two subsidiaries:■ Distribution <strong>Casino</strong> France, which manages all the hypermarkets,supermarkets and convenience stores in France through specialisedsubsidiaries:- Franprix-Leader Price Holding (formerly Asinco), which holds theGroup’s interests in Franprix-Leader Price,- Codim 2, which operates the Group’s hypermarkets andsupermarkets in Corsica,- Floréal and <strong>Casino</strong> Carburants, which operate the service stationson hypermarket/supermarket premises,- Serca, which provides an after-sales service with its subsidiaryAcos (online support),- <strong>Casino</strong> Vacances, the Group’s travel agency, which distributesits catalogue through the various networks,- Club Avantages, which manages the S’Miles loyalty programmefor the <strong>Casino</strong> Group,- Cdiscount (online sales);■ <strong>Mo</strong>noprix SA, which is 50/50 owned with Galeries Lafayette. The<strong>Mo</strong>noprix Group currently comprises some thirty companies.The Group’s real estate interests are held by:■ L’Immobilière <strong>Groupe</strong> <strong>Casino</strong>, which owns the hypermarketpremises. It has some thirty subsidiaries, including Foréziennede Participations, a real estate holding company and majorityshareholder of Mercialys, a real estate investment company thatowns the shopping centres and cafeterias surrounding the Group’shypermarkets and supermarkets. Mercialys has the tax status ofsociété d’investissement immobilier cotée (SIIC), a French-style REIT,and has been listed on Euronext Paris since 14 October 2005. Ithas 21 subsidiaries and interests in other companies;■ Plouescadis, which is the parent of some sixty companies involvedin property development.The supply chain business is operated by three subsidiaries:■ EMC Distribution, the Group’s central purchasing agency;■ Comacas, which manages store supplies;■ Easydis, which manages warehousing and transportation of goodsfrom warehouses to stores.Support functions are mainly provided through four subsidiaries:■■■■<strong>Casino</strong> Services, notably for accounting, legal affairs and finance;<strong>Casino</strong> Information Technology for information systems;IGC Services, which provides administrative services, advice andsupport to the Group’s real estate companies;<strong>Casino</strong> Développement, which undertakes feasibility studies andputs together the technical and administrative applications requiredto develop buildings for retail use and services.Other specialised subsidiaries include:■■■<strong>Casino</strong> Restauration, which operates all the Group’s cafeterias andits subsidiary R2C, a foodservice company;Banque du <strong>Groupe</strong> <strong>Casino</strong>, which manages the Group’s consumerfinance and payment card business;Campus <strong>Casino</strong>, the Group’s training centre for in-house andexternal client use;■ GreenYellow (formerly KSilicium), a holding company housing thesolar power generation business.The Group’s international business is operated by locally incorporatedcompanies.2.3.2. INVESTMENTS MADE IN <strong>2010</strong>In <strong>2010</strong>, the Company acquired and created companies with thefollowing direct and indirect interests:<strong>Casino</strong>, Guichard-PerrachonTupaia (100%), Casinelli (100%), Herna (99.95%).Distribution <strong>Casino</strong> France GroupAurecdis (100%), Pyrog (100%), Sodigrigny (100%), Distri CoreGuines (100%), Codival (99.80%), Frenil Distribution (99.40%),Victoire (26%).Franprix-Leader Price Holding sub-group(formerly Asinco)Volta 10 (51%); Addy Participations (51%); Holding <strong>Groupe</strong> Taleb(60%); Centralemag (100%); Taskco (51%); Minimarché Drancy(100%); Marengo (100%); SDAV (100%); Fresnes Distribution (100%);Lakadis (100%); Minimarché Sarcelles (100%); Minimarché Levallois(100%); Minimarché Magasins (100%); Minimarché Pyrénées (100%);Enseigne Franprix (100%); Minimarché Auxerre (100%); BouffemontDistribution (100%); Minimarché Opéra (100%); Minimarché Bac(100%); Minimarché Puteaux (100%); Minimarché Clichy (100%);Minimarché Boulogne (100%); Minimarché Malakoff (100%) MinimarchéRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group25
231 DECEMBER <strong>2010</strong>Subsidiaries and AssociatesBornedis (100%); Minimarché Asnières (100%); Minimarché Magasin 1(100%); Minimarché Magasin 2 (100%); Minimarché Magasin 3 (100%);Minimarché Magasin 4 (100%); Minimarché Magasin 5 (100%); Auladis(100%); Distribac (100%); Leader Price Angers (100%); Leader PriceBretigny (100%); Leader Price Colmar (100%); Leader Price Cholet(100%); Leader Price Halluin (100%); Leader Price Lucon (100%);Leader Price Pouzauges (100%); Leader Price Saint-Dié (100%);Leader Price Reze (100%); Leader Price Concarneau (100%) LeaderPrice Magasin 1 (100%); Leader Price Pithiviers (100%); Leader PriceHardricourt (100%); Lisud (100%); Leader Price Magasin 4 (100%);Leader Price Magasin 5 (100%); Leader Price Wattignies (100%);Leader Price Betting (100%); Leader Price Saint Avold (100%);Leader Price Avranches (100%); Leader Price Thionville (100%);Leader Price Baïlleul (100%); Leader Price Argentan (100%); LeaderPrice Besançon (100%); Leader Price Herbiers (100%); Leader PriceSens (100%); Leader Price Coigniers (100%); Leader Price Sene(100%); Leader Price Taden (100%); Leader Price Mulhouse (100%);Leader Price Bourges (100%); Leader Price Abbeville (100%); LeaderPrice Caudry (100%); Leader Price Magasin 6 (100%); Leader PriceMagasin 7 (100%); Leader Price Magasin 8 (100%); Leader PriceGonfreville (100%); Leader Price Tourville (100%); SA Marquis (100%);Flo (100%); Sodiasnes (100%); Sodico (100%); Sogerouet (100%);Bobigny Distribution (100%); Darcy Distribution (100%); JauresMarket Distribution (100%); La Fourche Distribution (100%); LeaDistribution (100%); Leader Price Pithiviers (100%); LMA Distribution(100%); Magic Distribution (100%); Martroi Distribution (100%); MikaDistribution (100%); <strong>Mo</strong>lière Distribution (100%); Murat Distribution(100%); Port Marly Distribution (100%); Sembat Distribution (100%);SMDF Distribution (100%); Saint-Gratien Distribution (100%);Saint-Luc Distribution (100%); Toudic Distribution (100%); Victor HugoDistribution (100%); Districolbert 13 (100%); Distrilieutaud 13 (100%);Distrirouet 13 (100%); Minimarché Vincennes (100%); Fontainedis(100%); Champigny 2 (100%).L’Immobilière <strong>Groupe</strong> <strong>Casino</strong> groupSCI du n° 11 de la rue de Fresnil (100%).Plouescadis GroupSNC Rhodanienne (100%), SNC Fairway (100%), SNC Les CabanesTchanquées (100%), SNC Wishbone (100%).GreenYellow GroupLycées Pyrénées-Orientales (100%), HECP 6 (94%), HECP 7 (94%),HECP 8 (94%), HECP 9 (94%), HECP 10 (94%), HECP 11 (94%),HECP 12 (94%), HECP 13 (94%), Kassira (99.90%).2.3.3. SIMPLIFIED ORGANISATION CHART (AT 31 DECEMBER <strong>2010</strong>)Company Business % interestEuropeFranceDistribution <strong>Casino</strong> France Group• Distribution <strong>Casino</strong> FranceRetailing (management of hypermarkets, supermarkets and convenience storesin mainland France)Floréal Service stations 100<strong>Casino</strong> Carburants Service stations 100<strong>Casino</strong> Vacances Catalogue-based travel sales 100Serca After-sales service 100Club Avantages Loyalty programme management 100Franprix-Leader Price Holding Group(formerly Asinco)Holding company 100- Franprix HoldingRetailing 100- Leader Price HoldingRetailing 100- Franprix ExploitationRetailing 100- SofigepRetailing 100- Leadis HoldingRetailing 100- FigeacRetailing 84- CogefisdRetailing 84- Taleb Group HoldingRetailing 60- SodigestionRetailing 60- H2ARetailing 60- Addy ParticipationRetailing 51- CofileadRetailing 60- Volta 10Retailing 51- TaskcoRetailing 5110026 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Subsidiaries and Associates2Company Business % interest• Codim 2 groupRetailing (management of hypermarkets and supermarkets100in Corsica through several subsidiaries)<strong>Mo</strong>noprix Group<strong>Mo</strong>noprix City-centre retailing 50<strong>Casino</strong> Restauration Group<strong>Casino</strong> Restauration Foodservice 100Restauration Collective <strong>Casino</strong>—R2C Foodservice 100Villa Plancha Foodservice 100<strong>Casino</strong> Entreprise Group<strong>Casino</strong> Entreprise Holding company 100Cdiscount e-commerce 83L’Immobilière <strong>Groupe</strong> <strong>Casino</strong> GroupL’Immobilière <strong>Groupe</strong> <strong>Casino</strong> Real estate 100- SudécoShopping arcades 100- UranieReal estate 100- La Forézienne de Participations Holding company 100- MercialysReal estate (listed company) 51- IGC ServicesProvision of administrative services 100Plouescadis GroupPlouescadis Real estate holding company 100- Onagan PromotionProperty development 100- Alcudia PromotionProperty development 100- IGC PromotionProperty development 100OtherEasydis Logistics services 100EMC Distribution Central purchasing agency 100Comacas Store deliveries 100Distridyn Fuel deliveries 50Banque du <strong>Groupe</strong> <strong>Casino</strong> Consumer finance (in partnership with Cofinoga) 60<strong>Casino</strong> Services Provision of legal, accounting and financial services to Group companies 100<strong>Casino</strong> Information Technology Information systems management 100GreenYellow (ex-Ksilicium) Energy generation holding company 100<strong>Casino</strong> Développement Retail property feasibility studies 100Dunnhumby France Marketing analysis 50C’Store Retailing 50PolandMayland BRL Estate Sp z.o.o Real estate 100SwitzerlandIRTS Provision of services 100Luxembourg<strong>Casino</strong> Ré SA Reinsurance 100South AmericaArgentinaLibertad SA. Retailing 100BrazilCompanhia Brasileira de Distribuição – Retailing (listed company) 33.70CBD (Grupo Pão de Açúcar)ColombiaAlmacenes Exito SA Retailing (listed company) 54.77UruguayGrupo Disco Uruguay Retailing 62.5Devoto Hermanos SA Retailing 96.55VenezuelaCativen SA Retailing 19.90Registration Document <strong>2010</strong> | <strong>Casino</strong> Group27
231 DECEMBER <strong>2010</strong>Subsidiaries and AssociatesCompany Business % interestAsiaThailandBig C Group Retailing 63.2Indian OceanVindémiaRetailing (hypermarkets and supermarkets in Reunion, Madagascar, Mayotte,Mauritius and Vietnam).1002.<strong>3.4</strong>. SHAREHOLDERS PACTSThe Company is party to several shareholder pacts. Details of themain pacts are as follows:<strong>Mo</strong>noprixOn 20 March 2003, <strong>Casino</strong> and Galeries Lafayette signed anagreement providing for the continuation of their partnership in<strong>Mo</strong>noprix SA. The 25-year agreement was disclosed to the FrenchStock Exchange Authorities (Conseil des marchés financiers, avis CMFNo. 203C0223). It provides for the delisting of <strong>Mo</strong>noprix (which tookplace in 2003) and gives each partner an equal number of seats onthe <strong>Mo</strong>noprix Board of Directors, with the Chairman having a castingvote. The chairmanship rotates every three years, after an initialfive-year period during which Philippe Houzé, Chairman of GaleriesLafayette, continued to act as Chairman. Once <strong>Casino</strong>’s interest in<strong>Mo</strong>noprix has been raised to 60%, these provisions will lapse. For aslong as Galeries Lafayette holds at least 40% of <strong>Mo</strong>noprix’s capital, itwill have the right to veto any rebranding of <strong>Mo</strong>noprix stores, as wellas any acquisition in excess of €80 million.<strong>Casino</strong> and Galeries Lafayette have exchanged put and call options,as described in note 32.2 to the consolidated financial statementsand note 16 to the parent company financial statements.The agreement also provides for the non-transferability of the sharesheld by each group, a reciprocal pre-emptive right, a joint exit rightand reciprocal call options in the event of a change of control.By amendment dated 22 December 2008, <strong>Casino</strong> and GaleriesLafayette agreed to suspend the exercise of their reciprocal calland put options on <strong>Mo</strong>noprix shares for three years. Philippe Houzéremains Chairman of the Board of Directors for a term of three yearsuntil March 2012.Franprix/Leader PriceCall and/or put options have been granted on shares in a large numberof companies that are not wholly-owned by the Group. The optionsare exercisable for varying periods up to 2043 at a price based onthe operating profits of the companies concerned (see notes 28.4and 32.2 to the consolidated financial statements).<strong>Casino</strong> has also entered into shareholders’ pacts with some of itspartners.Following the <strong>Casino</strong> Group’s increase in its holdings in FranprixHolding and Leader Price Holding; the matching put and call optionsbetween the Baud family and the <strong>Casino</strong> Group were renewed in2004.However, in 2007, when <strong>Casino</strong> took over the operational managementof Franprix and Leader Price, the Baud family informed <strong>Casino</strong> thatthey contested the conditions of their replacement as managersof the business and that they intended to exercise their put optionearly. Given the terms of the shareholders’ agreement and theirmismanagement, the <strong>Casino</strong> Group refuted this position and theirright to early exercise of the put option. The arbitration board upheldthe Company’s position in a ruling delivered on 2 July 2009. Theboard ruled that <strong>Casino</strong> had acted legitimately in dismissing the Baudfamily members as managers and that, accordingly, the value of theremaining interests in Franprix and Leader Price held by the Baudfamily should be calculated in accordance with the option agreementson a multiple of 14 times the average 2006 and 2007 earnings of thetwo companies. Following this ruling, on 12 November 2009 <strong>Groupe</strong><strong>Casino</strong> acquired the Baud family’s remaining interests in Franprix andLeader Price and now holds 100% of both companies.Almacenes Exito (Colombia)In July 1999, <strong>Casino</strong> entered into a strategic development agreementwith Almacenes Exito, whereby <strong>Casino</strong> acquired 25% of thiscompany’s share capital and became a benchmark strategic partner.In conjunction with the share acquisition, the two partners signed ashareholder pact setting out, amongst other things, their agreementconcerning the management of the company. The pact was amendedin October 2005, and between then and 31 December 2006, <strong>Casino</strong>increased its holding in Almacenes to 38.62%.On 16 January 2007, <strong>Casino</strong> exercised its right of first refusal overshares sold by one of the local partners and became the majorityshareholder on 3 May 2007.On 17 December 2007, <strong>Casino</strong> signed a new amendment to theExito shareholder pact to reflect the stronger relationship between<strong>Casino</strong>, the majority shareholder, and its strategic partners. Underthe new agreements, the partners have given up their put option,thereby releasing <strong>Casino</strong> from its commitment to purchase theirinterests in Exito. In addition, to take account of the new ownershipstructure, the revised shareholder pact contains new voting rulesfor appointing directors and for certain other decisions, as well asprovisions simplifying the rules on selling shares and other customaryclauses.Disco Uruguay group (Uruguay)In conjunction with <strong>Casino</strong>’s September 1998 acquisition of a stakein Grupo Disco del Uruguay, a shareholder pact was signed with thefounding families covering a period of five years, renewable once. Thepact sets out the basis for the exercise of joint control by the <strong>Casino</strong>and the founding families over the business of the SupermercadosDisco del Uruguay subsidiary, with the two partners holding an equalnumber of seats on the Board. The pact expired in September 2008and the family shareholders continue to benefit from put optionsgranted by <strong>Casino</strong>, exercisable until 21 June 2021. These put optionsare described in note 16 to the parent company financial statementsand note 32.2 to the consolidated financial statements).28 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Subsequent Events2Compañía Brasileira de Distribuiçao –CBD (Brazil) Parent companyof Grupo Pão de Açúcar (GPA)In 2005, the <strong>Casino</strong> Group entered into a partnership agreement withthe family of Abilio Diniz providing for joint control over the holdingcompany and GPA. As a result, their shareholder pact was revised.The two shareholders now have equal representation on the Boards ofDirectors of the holding company and GPA. CBD’s Board of Directorshas fourteen members, including five representing the <strong>Casino</strong> Group,five representing the Diniz family and four independent directorsappointed by mutual agreement of the <strong>Casino</strong> Group and the Dinizfamily. Abilio Diniz remains Chairman of CBD and has been appointedChairman of the holding company.All major management decisions are taken by unanimous agreement.<strong>Casino</strong> and Abilio Diniz have a right of veto over certain decisions.They appoint the Chief Executive of CBD by mutual agreement.Under the shareholder pact, the Diniz family undertook not to sell itsshares in the holding company for nine years, and <strong>Casino</strong> undertooknot to sell its shares for a period of eighteen months from July 2005,the date on which joint control was implemented. In 2008, <strong>Casino</strong>exercised its call option over a block of shares representing 5.6% ofthe voting rights and 2.4% of the share capital.After these lock-up periods, each shareholder has a right of firstrefusal should the other party wish to sell its shares.The parties have also agreed to a certain number of changes to thepact in 2012 designed to shift the percentage of control over CBDbetween them, depending on the circumstances. As of that year,<strong>Casino</strong> will have the right to appoint the Chairman of the holdingcompany. If <strong>Casino</strong> exercises this right, the pact allows for a changein the two parties’ respective percentage control over the holdingcompany through the exercise of call and put options. However, thiswill not give rise to any financial commitment binding on the <strong>Casino</strong>Group without its prior agreement.2.3.5. PLEDGED ASSETSAssets pledged by the Company or companies in the Group do not represent a material percentage of the Group’s fixed assets (€119 millionrepresenting 0.7% of non-current assets).2.3.6. RELATED-PARTY TRANSACTIONSThe Company has relations with all its subsidiaries in its day-to-daymanagement of the Group. These relations are described onpage 23.As a result of the Group’s legal and operational organisation structure(see page 25), various Group companies may also have businessrelations or provide services to each other.The Company also receives advice from its majority shareholder,<strong>Groupe</strong> Rallye, through Euris, the ultimate holding company, undera strategic advice and assistance contract signed in 2003.The Statutory Auditors’ special report on regulated agreements signedbetween the Company and (i) the Chairman and Chief ExecutiveOfficer, (ii) a director, or (iii) a shareholder owning more than 10% ofthe Company’s voting rights, or in the case of a corporate shareholderthe company controlling that shareholder, and which were not enteredinto on arm’s length terms is presented on page 153.Details of related-party transactions can be found in note 34 to theconsolidated financial statements.2.4. SUBSEQUENT EVENTS■ On 6 January 2011, <strong>Casino</strong> announced its buyout of the remaining18.6% stake of Cdiscount owned by the Charle brothers. The Groupnow holds a 99.6% interest in the company. The Charle brothers,who are planning to pursue other business projects, will also giveup their operating responsibilities at Cdiscount, which will continueto be managed by Olivier Marcheteau, Chairman of the Board ofDirectors, and Emmanuel Grenier, Managing Director.■ On 10 February 2011, <strong>Casino</strong> was informed that the Court ofArbitration handed down the Baud family’s claim for paymentof Franprix and Leader Price dividends for 2006 and 2007, dueto the observed errors and irregularities in their financial statements.As a result of this new decision, <strong>Casino</strong> will be required to pay only€34 million, corresponding to (i) the Franprix and Leader Pricedividends for 2008, (ii) additional consideration for the Franprixand Leader Price shares previously acquired by <strong>Casino</strong> and (iii) lateinterest over and above the €18 million already paid to the Baudfamily. This amount of €34 million is significantly less than the€67 million provision that had been booked in the <strong>Casino</strong> Group’saccounts.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group29
231 DECEMBER <strong>2010</strong>Share Capital and Share Ownership2.5. OUTLOOK FOR 2011 AND CONCLUSIONThe Group has undergone an in-depth transformation in recent years,changing its country mix and its mix of formats in France, while alsostrengthening its financial structure.As a result, its growth profile has been enhanced:■■■increasing contribution from International operations (45% ofconsolidated sales in 2011e following the consolidation of CasasBahia and the Carrefour operations in Thailand);leadership positions in international high potential markets (Brazil,Colombia, Thailand and Vietnam);a diversified business mix in France weighted towards convenienceand discount formats and No.1 ranking in B-to-C non-foode-commerce.The Group will step up the pace of transformation. It is confidentin its ability to deliver sales growth above 10% in each of the nextthree years.The following objectives have been set for 2011:■■■■strengthen market share in France, by continuing to expand in theconvenience and discount segments;drive up margin at Franprix-Leader Price;continue to deliver strong profitable organic growth in internationalmarkets;keep up the asset rotation strategy, with €700 million worth ofasset disposals in 2011.These forward-looking statements are based on what the Groupbelieves to be reasonable assumptions, but are not an indication offuture profits. They are subject to the risks and uncertainties inherentin the Group’s businesses that could cause actual results to differmaterially from the targets and outlook provided above.2.6. SHARE CAPITAL AND SHARE OWNERSHIP2.6.1. SHARE CAPITALAs of 31 December <strong>2010</strong>, the share capital amounted to €169,323,360.39 divided into 110,668,863 shares each with a par valueof €1.53.At 31 January 2011, the share capital amounted to €169,326,980.37 divided into 110,671,229 shares each with a par value of €1.53.2.6.2. TREASURY SHARES – AUTHORISATION TO TRADEIN COMPANY SHARESOn 29 April <strong>2010</strong>, the shareholders authorised the Board of Directorsto purchase shares of the Company in accordance with the provisionsof Articles L. 225-209 et seq. of the French Commercial Code (Codede commerce) notably for the following purposes:■■■to maintain a liquid market in the Company’s shares throughmarket-making transactions carried out by an independentinvestment services provider acting in the name and on behalf ofthe Company under a liquidity contract that complies with a codeof ethics approved by the French securities regulator (Autorité desmarchés financiers);to allocate shares (i) on exercise of stock options granted by theCompany pursuant to Articles L. 225-177 et seq. of the FrenchCommercial Code (Code de commerce), (ii) under an employeestock ownership plan governed by Articles L. 3332-1 et seq. ofthe French Labour Code (Code du travail) or (iii) in connection withshare grants governed by Articles L. 225-197-1 et seq. of the FrenchCommercial Code (Code de commerce);to allot shares upon exercise of rights attached to securitiesredeemable, convertible, exchangeable or otherwise exercisablefor shares;■■■to keep shares for subsequent delivery in payment or exchange forshares of another company in accordance with market practicesapproved by the French securities regulator (Autorité des marchésfinanciers);to cancel shares, in order to increase earnings per share;to implement any other market practices authorised in the futureby the French securities regulator (Autorité des marchés financiers)and, generally, to carry out any transaction allowed under currentlegislation.The shares may be purchased, sold, transferred or exchanged by anymethod, including through block trades or other transactions carriedout on the regulated market or over-the counter. The authorisedmethods include the use of any derivative financial instruments tradedon the regulated market or over-the-counter and of option strategies,on the basis authorised by the competent securities regulators,provided that the use of such instruments does not significantlyincrease the shares’ volatility. The shares may also be used forstock lending transactions in accordance with Articles L. 211-22 etseq. of the French <strong>Mo</strong>netary and Financial Code (Code monétaireet financier).The maximum authorised purchase price is €100 per share.30 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Share Capital and Share Ownership2Transactions carried out in <strong>2010</strong>and until 31 January 2011Liquidity contractIn February 2005, <strong>Casino</strong> mandated Rothschild & Cie Banque toimplement a liquidity contract to ensure a wide market and regularquotations for its shares. The contract complies with the Code ofConduct of the Association française des marchés financiers (AMAFI)approved by the French securities regulator (Autorité des marchésfinanciers) on 1 October 2008. <strong>Casino</strong> allocated 700,000 sharesand the sum of €40 million to the liquidity account. A total of2,180,089 shares were purchased in <strong>2010</strong> at an average price pershare of €63.83, and 2,180,089 shares were sold at an average priceper share of €64.16. At 31 December <strong>2010</strong>, the liquidity account heldno shares and the sum of €91.7 million.From 1 January to 31 January 2011, a total of 238,645 shareswere purchased at an average price per share of €71.54, and112,024 shares were sold at an average price per share of €72.39.At 31 January 2011, the liquidity account held 126,621 shares andthe sum of €82.7 million.Call options to cover options to purchaseexisting shares of <strong>Casino</strong> stockCall optionsIn 2005 and 2007, to cover part of the stock option plans grantedon 9 December 2004 and 13 April 2007, <strong>Casino</strong> purchased calloptions on ordinary shares with the same attributes (number, priceand final exercise date) as the stock options granted to employeesand officers under the plans. In 2009, the number and exercise priceof the calls outstanding were adjusted pursuant to the payment of apart of <strong>Casino</strong>’s 2008 dividend in Mercialys shares.In <strong>2010</strong>, no calls were purchased, 25,445 were exercised and 47,230were cancelled after a corresponding number of stock options werecancelled when the grantees left the company. Premiums receivedtotalled €0.26 million. 2,407 call options lapsed during the yearwithout being exercised.From 1 January to 31 January 2011, no calls were exercised and 3,370were cancelled after a corresponding number of stock options werecancelled when the grantees left the company. Premiums receivedtotalled €0.02 million.The following table shows the attributes of the call options purchased as well as transactions carried out during <strong>2010</strong> and from 1 Januaryto 31 January 2011:Expiry dateCallsoutstandingat1 January<strong>2010</strong>Callscancelled<strong>2010</strong> transactions CallsoutstandingCallsexercisedCallslapsedCallsadjustedat31 December<strong>2010</strong>2011 transactions CallsoutstandingCallscancelledCallsexercisedat31 January2011Adjustedexerciseprice8 June <strong>2010</strong> (1) 41,672 13,820 25,445 2,407 - 0 - - - €55.8812 Oct. 2012 284,027 33,410 - - - 250,617 3,370 - 247,247 €71.73TOTAL 325,699 47,230 25,445 2,407 - 250,617 3,370 - 247,247(1) 24,246 calls extended from 8 June <strong>2010</strong> to 14 June <strong>2010</strong>.Share purchasesIn <strong>2010</strong>, the Company did not purchase any shares for the purposeof allocating them to employee or officer stock option, share grantor stock ownership plans.Other stock transactionsThe Company cancelled 25,445 shares in <strong>2010</strong>. 25,445 sharesarising on the exercise of calls and 6 preferred non-voting shareswere cancelled in the twenty-four months from 1 February 2009 to31 January 2011.No other treasury share transactions were carried out between1 January and 31 January 2011.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group31
231 DECEMBER <strong>2010</strong>Share Capital and Share OwnershipSummary of stock transactionsThe table below shows details of treasury shares bought and sold between 1 January and 31 December <strong>2010</strong>, and between 1 January and31 January 2011, together with the number of treasury shares held by the Company:Ordinary shares% of capital represented by totalnumber of shares heldNumber of shares held at 31 December 2009 85,030 0.08Number of shares purchased under a liquidity contract 2,180,089Number of shares sold under a liquidity contract (2,180,089)Number of shares arising on the exercise of call options 25,445Number of shares vested under stock grant plans (78,072)Number of shares cancelled (25,445)Number of shares held at 31 December <strong>2010</strong> 6,958 0.006Number of shares purchased under the liquidity contract 238,645Number of shares sold under the liquidity contract (112,024)NUMBER OF SHARES HELD AT 31 JANUARY 2011 133,579 0.12At the year-end, the company owned 6,958 shares (purchase cost:€0.36 million) with a par value of €1.53, representing 0.006% of theshare capital. Based on closing prices on 31 December <strong>2010</strong> (€72.95),their market value totalled €0.51 million.At 31 January 2011, the Company owned 133,579 shares (purchasecost: €0.94 million) with a par value of €1.53, representing 0.12%of the share capital. Based on closing prices on 31 January 2011(€71.37), their market value totalled €9.53 million.They have been allocated as follows:■■126,621 shares to the liquidity contract;6,958 shares to cover stock option, share ownership or stock grantplans for employees and officers of the Group.On 31 December <strong>2010</strong>, Germinal SNC, an indirectly wholly-ownedsubsidiary, held 928 ordinary shares.At the Annual General Meeting of 14 April 2011, shareholders willbe asked to renew the authorisation for the Board of Directors topurchase Company shares pursuant to Article L. 225-209 of theFrench Commercial Code (Code de commerce), notably for thefollowing purposes:■■■to maintain a liquid market in the Company’s shares throughmarket-making transactions carried out by an independentinvestment services provider acting in the name and on behalf ofthe Company under a liquidity contract that complies with a codeof ethics approved by the French securities regulator (Autorité desmarchés financiers);to implement stock option plans pursuant to Articles L. 225-177et seq. of the French Commercial Code (Code de commerce),employee savings plans pursuant to Articles L. 3332-1 et seq. ofthe French Labour Code (Code de travail) and share grants pursuantto Articles L. 225-197-1 et seq. of the French Commercial Code(Code de commerce);to allot shares upon exercise of rights attached to securitiesredeemable, convertible, exchangeable or otherwise exercisablefor shares;■■■to keep shares for subsequent delivery in payment or exchange forshares of another company in accordance with market practicesapproved by the French securities regulator (Autorité des marchésfinanciers);to cancel shares, in order to increase earnings per share;to implement any other market practices authorised in the futureby the French securities regulator (Autorité des marchés financiers)and, generally, to carry out any transaction allowed under currentlegislation.The shares may be purchased, sold, transferred or exchanged by anymethod, including through block trades or other transactions carriedout on the regulated market or over-the counter. The authorisedmethods include the use of any derivative financial instruments tradedon the regulated market or over-the-counter and of option strategies,on the basis authorised by the competent securities regulators,provided that the use of such instruments does not significantlyincrease the shares’ volatility. The shares may also be used forstock lending transactions in accordance with Articles L. 211-22 etseq. of the French <strong>Mo</strong>netary and Financial Code (Code monétaireet financier).The maximum authorised purchase price will be €100 per ordinaryshare.The use of this authorisation may not have the effect of increasingthe number of shares held in treasury to more than 10% of the totalnumber of shares outstanding. Based on the number of sharesoutstanding on 31 January 2011, less the 134,507 shares held intreasury at that date, and assuming that the shares held in treasuryare not cancelled or sold, the maximum limit is 10,932,615 shares.The maximum amount that may be invested in the share buybackprogramme is therefore €1,093.26 million.The authorisation will be valid for a period of twenty-six months.At the Annual General Meeting of 19 May 2009, the shareholdersrenewed their authorisation for the Board of Directors to reduce theshare capital by cancelling treasury shares for a period of 36 monthsuntil 18 May 2012.32 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Share Capital and Share Ownership22.6.3. SHARE CAPITAL AUTHORISED BUT NOT YET ISSUEDAt their Annual General Meetings of 31 May 2007, 29 May 2008,19 May 2009 and 29 April <strong>2010</strong>, the shareholders granted the Boardof Directors various authorisations to increase the share capital forthe purpose of raising funds in the market, if necessary, to financethe Group’s future growth and improve its financial position, as wellas to make share grants to Group employees and officers. Theseauthorisations are summarised in the table below:TransactionsCapital increase by issuing shares or securities carryingrights to new or existing shares of the company or existingshares of any company in which it directly or indirectly ownsmore than 50% of the share capital or to debt securities,with pre-emptive rights in the case of new share issuesCapital increase by issuing shares or securities carryingrights to new or existing shares of the company or existingshares of any company in which it directly or indirectly ownsmore than 50% of the share capital or to debt securitiesby means of an offering, without pre-emptive rights in thecase of new share issuesCapital increase by issuing shares or securities carryingrights to new or existing shares of the company or existingshares of any company in which it directly or indirectly ownsmore than 50% of the share capital or to debt securitiesby means of an offering as referred to in Article L. 411-2 IIof the French <strong>Mo</strong>netary and Financial Code (Code monétaireet financier), without pre-emptive rights in the case of newshare issuesMaximumamountTerms andconditionsDate ofauthorisation Term Expiry€150 million (1) (2) with PE (*) 19 May 2009 26 months 18 July 2011€150 million (1) (2) without PE (*) 19 May 2009 26 months 18 July 201110% of shares without PE (*) 29 April <strong>2010</strong> 15 months 28 July 2011held per year (1) (2)Capital increase by capitalising reserves, earnings, share €150 million (1) (2 - 19 May 2009 26 months 18 July 2011premiums or other capitalisable sums (1)Capital increase by issuing shares or share equivalentsto pay for contributions in kind made to the Companycomprising shares or share equivalentsCapital increase by issuing shares or share equivalentsin the event of a share exchange offer initiated by <strong>Casino</strong>,Guichard-Perrachon for the shares of another listed companyIssuance of stock warrants, with or without consideration,to shareholders that are exercisable at a discount to marketprice, while a takeover bid for the Company is in progressCapital increase by issuing shares to employees who aremembers of an employee share ownership plan providedby the Company or related companiesStock option grants to employees of officers of theCompany and related companies.Share grants of new or existing ordinary shares toemployees and officers of the Company and relatedcompanies10% of the share without PE (*) 19 May 2009 26 months 18 July 2011capital (1)€150 million (2) without PE (*) 19 May 2009 26 months 18 July 2011€150 million (2) - 19 May 2009 18 months 18 November<strong>2010</strong>5% of the totalnumber of sharesoutstanding at thetime of issuance5% of the totalnumber of sharesoutstanding at thetime of grant2% of the totalnumber of sharesoutstanding at thetime of grantwithout PE (*) 19 May 2009 26 months 18 July 2011without PE (*) 29 April <strong>2010</strong> 38 months 28 June 2013without PE (*) 29 May 2008 38 months 28 July 2011(*) PE = pre-emptive subscription rights.(1) The aggregate par value of the shares which may be issued, immediately or in the future, pursuant to the above authorisations, may not exceed €150 million.(2) The total amount of debt securities that may be issued, immediately or in the future, pursuant to the above authorisations, may not exceed €2 billion or its equivalent value in other currenciesor monetary units based on a basket of currencies.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group33
231 DECEMBER <strong>2010</strong>Share Capital and Share OwnershipAt the Annual General Meeting of 14 April 2011, the shareholders willbe asked to renew all these authorisations (see as of page 200).The Board of Directors used these authorisations as follows:■A total of 48,540 stock options exercisable for new ordinary shareswere granted in <strong>2010</strong>, in accordance with the authorisation grantedby extraordinary resolution of the shareholders at the Annual■General Meeting of 29 April <strong>2010</strong> (see paragraph below on “Stockequivalents”).Share grants totalling 60,800 ordinary shares were made in 2008,524,736 were made in 2009 and 370,418 were made in <strong>2010</strong>,in accordance with the authorisation granted by extraordinaryresolution of the shareholders at the Annual General Meeting of29 May 2008 (see paragraph below on “Stock equivalents”).2.6.4. STOCK EQUIVALENTSOptions to purchase new sharesSince 1990, the Group has introduced several stock option plans for officers and employees. Details of all stock option plans that expired in<strong>2010</strong> and those valid at 31 January 2011 are shown below. No executive officers have received stock options.Grant dateInitial exercisedateExpiry dateOriginalnumber ofgranteesSubscriptionprice (€)Numberof optionsgrantedNumberof optionsexercisedNumberof optionscancelledor lapsedNumberof optionsoutstandingat 31 January2011 (1)9 Dec. 2004 9 Dec. 2007 8 June <strong>2010</strong> 408 59.01 78,527 26,320 52,207 026 May 2005 25 May 2008 25 Nov. <strong>2010</strong> 275 57.76 318,643 179,306 139,337 08 Dec. 2005 8 Dec. 2008 7 June 2011 413 56.31 50,281 9,194 21,338 19,75913 April 2006 13 April 2009 12 Oct. 2011 317 58.16 354,360 79,647 141,665 133,04815 Dec. 2006 15 Dec. 2009 14 June 2012 504 69.65 53,708 407 24,448 28,85313 April 2007 13 Oct. <strong>2010</strong> 12 Oct. 2012 351 75.75 362,749 0 133,985 228,7647 Dec. 2007 7 June 2011 6 June 2013 576 74.98 54,497 0 15,890 38,60714 April 2008 14 Oct. 2011 13 Oct. 2013 415 76.72 434,361 0 118,419 315,9425 Dec. 2008 5 June 2012 4 June 2014 633 49.02 109,001 0 17,047 91,95422 Dec. 2008 22 June 2012 21 June 2014 1 47.19 1,000 0 1,000 08 April 2009 8 Oct. 2012 7 Oct. 2014 33 49.47 37,150 0 1,000 36,1504 Dec. 2009 4 June 2013 3 June 2015 559 57.18 72,603 0 9,537 63,06629 April <strong>2010</strong> 29 Oct. 2013 28 Oct. 2015 33 64.87 48,540 0 425 48,115(1) Number of options granted at inception less those exercised and those cancelled when the grantees left the company.34 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Share Capital and Share Ownership2Share grantsPursuant to the provisions of articles L. 225-197-1 et seq. of the French Commercial Code (Code de commerce), the Company has madeshare grants to employees of Group companies. Details of the share grant plans valid at 31 January 2011 are shown below. No executiveofficers have received share grants.Grant dateVesting dateDate from which theshares may be soldNumber of granteesNumber of shares grantedTo the top tengrantees (*)Total adjustednumber of sharesgranted at31 January 2011 (1)14 April 2008 14 Oct. 2011 14 Oct. 2013 18 3,760 3,640 (2)14 April 2008 14 Oct. 2011 14 Oct. 2013 64 7,810 1,846 (3)14 April 2008 14 April 2011 14 Oct. 2013 1 6,517 6,517 (4)5 Dec. 2008 5 Dec. 2011 5 Dec. 2013 1 500 500 (4)8 April 2009 8 Oct. 2011 8 Oct. 2013 1,017 87,900 393,988 (5)8 April 2009 8 Oct. 2011 8 Oct. 2013 21 4,410 5,350 (2)8 April 2009 8 Oct. 2011 8 Oct. 2013 67 7,260 6,757 (6)8 April 2009 8 April 2011 8 April 2013 1 8,000 8,000 (4)4 Dec. 2009 4 Dec. 2012 4 Dec. 2014 3 24,463 24,463 (4)29 April <strong>2010</strong> 29 April 2013 29 April 2015 882 45,100 269,910 (5)29 April <strong>2010</strong> 29 April 2013 29 April 2015 20 4,270 5,100 (2)29 April <strong>2010</strong> 29 April 2013 29 April 2015 68 7,060 11,945 (6)29 April <strong>2010</strong> 29 April 2013 29 April 2015 29 39,556 48,326 (4)22 Oct. <strong>2010</strong> 22 Oct. 2012 22 Oct. 2014 2 4,991 4,991 (4)3 Dec. <strong>2010</strong> 3 Dec. 2013 3 Dec. 2015 469 8,120 17,268 (4)(*) At inception.(1) Number of shares granted at inception less those cancelled when the grantees left the company or on failure to meet performance conditions.(2) The grantees are employees and offi cers of the Codim 2 group. The share grants are contingent upon the grantees remaining with the company until the vesting date and upon achievementof a performance target based on Codim 2 sales growth over two years.(3) The grantees are employees and offi cers of the <strong>Mo</strong>noprix group. The share grants are contingent upon the grantees remaining with the company until the vesting date and upon achievementof two <strong>Mo</strong>noprix performance targets measured at the end of 2008 and 2009. The targets are EBIT (before asset disposals) and net debt (before dividends).(4) The share grants are contingent only upon the grantees remaining with the company until the vesting date.(5) The share grants are contingent upon the grantees remaining with the company until the vesting date and upon achievement of a performance target based on organic sales growth on acomparable scope basis over two years of French operations that are fully or proportionately consolidated including Franprix/Leader Price and <strong>Mo</strong>noprix but excluding Vindémia.(6) The grantees are employees and offi cers of the <strong>Mo</strong>noprix group. The share grants are contingent upon the grantees remaining with the company until the vesting date and upon achievementof a performance target based on <strong>Mo</strong>noprix sales growth over two years.The share grant plan of 14 April 2008 was contingent upon thegrantees remaining with the company until the vesting date andupon achievement of a performance target based on organic salesgrowth on a comparable scope basis over two years (31 December2009 versus 31 December 2007) of French operations that are fullyor proportionately consolidated including Franprix/Leader Price and<strong>Mo</strong>noprix but excluding Vindémia. These shares did not vest on14 October 2011 as the performance condition was not met.The following table shows the number of shares that have vested under the share grant plans of 14 April 2008, 13 April 2007, 29 October2008 and 7 December 2007:Grant date Vesting date Number of shares vested Type of shares14 April 2008 14 April <strong>2010</strong> (1) 1,500 Existing shares13 April 2007 13 Oct. <strong>2010</strong> (2) 50,437 Existing shares13 April 2007 13 Oct. <strong>2010</strong> (3) 1,615 Existing shares13 April 2007 13 Oct. <strong>2010</strong> (4) 3,720 Existing shares29 Oct. 2008 29 Oct. <strong>2010</strong> (1) 51,550 New shares7 Dec. 2007 7 Dec. <strong>2010</strong> (1) 20,800 Existing shares(1) The share grants were contingent only upon the grantees remaining with the company until the vesting date.(2) The share grants were contingent upon the grantees remaining with the company until the vesting date and upon achievement of a performance target based on organic sales growth ona comparable scope basis over two years of French operations that are fully or proportionately consolidated including <strong>Mo</strong>noprix but excluding Vindémia.(3) The grantees were employees and offi cers of the <strong>Mo</strong>noprix group. The share grants were contingent upon the grantees remaining with the company until the vesting date andupon achievement of two performance targets measured at the end of 2007 and 2008. The targets were EBIT (before asset disposals) and net debt (before dividends paid as of1 January 2007).(4) The grantees were employees and offi cers of the Codim 2 group. The share grants were contingent upon the grantees remaining with the company until the vesting date and uponachievement of a performance target based on Codim 2 organic sales growth on a comparable scope basis over two years.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group35
231 DECEMBER <strong>2010</strong>Share Capital and Share Ownership2.6.5. POTENTIAL NUMBER OF SHARESThe potential number of shares at 31 January 2011 is as follows:Number of shares at 31 January 2011 110,671,229Stock options 1,004,258Share grants 808,601POTENTIAL SHARES OUTSTANDING 112,484,088The number of shares could therefore be increased by 1.64%, representing 1.61% potential dilution of the existing share base.2.6.6. CHANGE IN SHARE CAPITAL OVER THE LAST FIVE YEARS1 January 2006to 31 January 2011Number of sharesissued/cancelledIncrease/(decrease)in share capital (in €)Share capitalTotal number of shares in issueOrdinary Preferred Par value Premium (in €) Ordinary Preferred Total2006• Stock options19,420 - 29,712.60 1,154,022.20 171,241,447.95 96,793,959 15,128,556 111,922,515• Exercise of C warrants4,359 - 6,669.27 393,486.93 171,248,117.22 96,798,318 15,128,556 111,926,874• Absorption of subsidiaries78 - 119.34 4,763.53 171,248,236.56 96,798,396 15,128,556 111,926,952• Cancellation of preferred stock- (4,300) (6,579.00) (199,803.80) 171,241,657.56 96,798,396 15,124,256 111,922,6522007• Stock options295,234 - 451,708.02 17,558,341.01 171,693,365.58 97,093,630 15,124,256 112,217,886• Cancellation of ordinary shares (101,214) - (154,857.42) 7,005,481.54 171,538,508.16 96,992,416 15,124,256 112,116,6722008• Stock options278,222 - 425,679.66 16,744,735.28 171,964,187.82 97,270,638 15,124,256 112,394,894• Absorption of subsidiaries42 - 64.26 3,005.15 171,964,252.08 97,270,680 15,124,256 112,394,936• Cancellation of preferred stock- (534,787) (818,224.11) (23,163,161.80) 171,146,027.97 97,270,680 14,589,469 111,860,149• Cancellation of ordinary shares (301,489) - (461,278.17) (20,984,265.02) 170,684,749.80 96,969,191 14,589,469 111,558,660• Creation of Emily 2 employeeshare ownership plan 800,000 - 1,224,000.00 35,720,000.00 171,908,749.80 97,769,191 14,589,469 112,358,6602009• Share grants77,169 - 118,068.57 (118,068.57) 172,026,818.37 97,846,360 14,589,469 112,435,829• Conversion of non-voting preferredshares into ordinary shares (1) 12,505,254 (14,589,469) (3,188,848.95) 3,188,848.95 168,837,969.42 110,351,614 - 110,351,614• Stock options9,373 - 14,340.69 529,881.24 168,852,310.11 110,360,987 - 110,360,987,<strong>2010</strong>• Stock options281,725 - 431,039.25 15,892,922.48 169,283,349.36 110,642,712 - 110,642,712• Absorption of a subsidiary46 - 70.38 1,948.34 169,283,419.74 110,642,758 - 110,642,758• Share grants51,550 - 78,871.50 (78,871.50) 169,362,291.24 110,694,308 - 110,694,308• Cancellation of shares(25,445) - (38,930.85) (1,698,089.04) 169,323,360.39 110,668,863 - 110,668,8632011• Stock options2,366 - 3,619.98 169,326,980.37 110,671,229 - 110,671,229(1) On the basis of 6 ordinary shares for 7 non-voting preferred shares.36 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Share Capital and Share Ownership22.6.7. OWNERSHIP OF SHARE CAPITAL AND VOTING RIGHTSAs of 31 December <strong>2010</strong>, a total of 161,037,340 voting rights wereattached to the 110,660,977 ordinary shares in issue. The differencebetween these two figures is due to the fact that certain registeredshares carry double voting rights (see “Voting rights” on page 225).It also reflects the fact that <strong>Casino</strong> shares held directly or indirectlyby the Company are stripped of voting rights.Taking account of the gain or loss of double voting rights by someshareholders since 1 January 2011 and the number of treasury shares,a total of 160,917,209 voting rights were attached to the 110,536,722voting ordinary shares in issue as of 31 January 2011.<strong>Casino</strong>, Guichard-Perrachon is controlled, directly and indirectly, by Euris. The diagram below shows the Company’s position within theGroup as of 31 January 2011:EURIS (1)(1) Euris is controlled by Jean-Charles Naouri.92,35% (2)(2) 92,45% of the voting rights.FINATIS89,21% (3)(3) 92,59% of the voting rights.FONCIÈRE EURIS56,91% (4)(4) 72,48% of the voting rights.RALLYE48,48% (5)CASINO, GUICHARD-PERRACHON( 5) Held directly or indirectly, excluding treasury shares,by Rallye and its subsidiaries representing 60,43%of voting rights.Listed companyThe tables below show the ownership of share capital and voting rights as of 31 December 2008, 2009 and <strong>2010</strong>, and as of 31 January2011:31 December 2008Ordinary sharesPreferrednon-voting shares (1) Total shares Voting rights (2)number % number % number % number %Public 42,909,874 43.9 7,574,363 51.9 50,484,237 45.1 46,131,488 30.8registered 3,447,845 3.5 102,071 0.7 3,549,916 <strong>3.4</strong> 6,669,459 4.5bearer 39,462,029 40.4 7,472,292 51.2 46,934,321 41.7 39,462,029 26.4Rallye Group 47,876,713 49.0 6,695,265 45.9 54,571,978 48.7 92,338,411 61.7Galeries Lafayette 2,049,747 2.1 - - 2,049,747 1.8 2,985,505 2.0CNP Group 1,895,337 1.9 254,430 1.7 2,149,767 1.9 3,790,674 2.5Employee share ownership plan 2,961,248 3.0 65,000 0.4 3,026,248 2.7 4,323,335 2.9Treasury stock 76,272 0.1 411 - 76,683 0.1 - -TOTAL 97,769,191 100.0 14, 589,469 100.0 112,358,660 100 149,569,413 100.031 December 2009Ordinary shares Total shares Voting rights (2)number % number % number %Public 49,703,303 45.0 49,703,303 45.0 52,664,256 32.4registered 3,626,096 3.3 3,626,096 3.3 6,587,049 4.1bearer 46,077,207 41.8 46,077,207 41.8 46,077,207 28.4Rallye Group 53,653,315 48,6 53,653,315 48.6 98,598,796 60.7Galeries Lafayette 2,049,747 1.9 2,049,747 1.9 2,985,505 1.8CNP Group 1,887,957 1.7 1,887,957 1.7 3,775,914 2.3Employee share ownership plan 2,980,707 2.7 2,980,707 2.7 4,321,675 2.7Treasury stock 85,958 0.1 85,958 0.1 - -TOTAL 110,360,987 100.0 110,360,987 100.0 162,346,146 100.0(1) On15 June 2009, the preferred non-voting shares were converted into ordinary shares on the basis of 7 preferred non-voting shares for 6 ordinary shares (resolutions passed at the AnnualGeneral Meeting of 19 May 2009).(2) Rights to vote in Annual General Meetings, which are not the same as the voting rights published under France’s disclosure threshold rules. When the monthly disclosures of total votingrights and shares are made, the number of voting rights is calculated, in compliance with Article 223-11 of the AMF’s General Rules and Regulations, on the basis of all the shares carryingvoting rights, including shares held in treasury, whose voting rights may not be exercised in Annual General Meetings.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group37
231 DECEMBER <strong>2010</strong>Share Capital and Share OwnershipOrdinary shares Total shares Voting rights (1)31 December <strong>2010</strong>number % number % number %Public 50,970,449 46.1 50,970,449 46.1 53,599,549 33.3registered 3,588,705 3.2 3,588,705 3.2 6,217,805 3.9bearer 47,381,744 42.8 47,381,744 42.8 47,381,744 29.4Rallye Group (2) 53,653,315 48.5 53,653,315 48.5 97,235,999 60.4Galeries Lafayette 2,049,747 1.9 2,049,747 1.9 2,985,505 1.9CNP Group 1,887,957 1.7 1,887,957 1.7 3,775,914 2.3Employee share ownership plan 2,099,509 1.9 2,099,509 1.9 3,440,373 2.1Treasury stock (3) 7,886 0.0 7,886 0.0 - -TOTAL 110,668,863 100.0 110,668,863 100.0 161,037,340 100,031 January 2011Ordinary shares Total shares Voting rights (1)number % number % number %Public 50,856,406 46.0 50,856,406 46.0 53,489,630 33.2registered 3,582,226 3.2 3,582,226 3.2 6,215,450 3.9bearer 47,274,180 42.7 47,274,180, 42.7 47,274,180 29.4Rallye Group (2) 53,653,315 48.5 53,653,315 48.5 97,235,999 60.4Galeries Lafayette 2,049,747 1.9 2,049,747 1.9 2,985,505 1.9CNP Group 1,887,957 1.7 1,887,957 1.7 3,775,914 2.3Employee share ownership plan 2,089,297 1.9 2,089,297 1.9 3,430,161 2.1Treasury stock (3) 134,507 0.1 134,507 0.1 0 -TOTAL 110,671,229 100.0 110,671,229 100.0 160,917,209 100,0(1) Rights to vote in Annual General Meetings, which are not the same as the voting rights published under France’s disclosure threshold rules. When the monthly disclosures of total votingrights and shares are made, the number of voting rights is calculated, in compliance with Article 223-11 of the AMF’s General Rules and Regulations, on the basis of all the shares carryingvoting rights, including shares held in treasury, whose voting rights may not be exercised in Annual General Meetings.(2) At 31 December <strong>2010</strong>, Rallye SA held 12.8% of the share capital representing 17.6% of the voting rights directly, and 35.7% of the share capital representing 42.8% of the voting rightsindirectly via six subsidiaries, fi ve of which own over 5% of the share capital and voting rights: Alpétrol with 11.2% of the share capital and 15.4% of the voting rights, Cobivia with 8.5% ofthe share capital and 9.2% of the voting rights, Habitation <strong>Mo</strong>derne de Boulogne with 6.7% of the share capital and 8.0% of the voting rights and Kerrous with 6.5% of the share capital and8.3% of the voting rights. At 31 January 2011, Rallye S.A. held 12.8%of the share capital and 17.6% of the voting rights directly, and 35.7% of the share capital representing 42.8% of thevoting rights indirectly via six subsidiaries, fi ve of which own over 5% of the share capital and voting rights: Alpétrol with 11.2% of the share capital and 15.4% of the voting rights, Cobiviawith 8.5% of the share capital and 9.2% of the voting rights, Habitation <strong>Mo</strong>derne de Boulogne with 6.7% of the share capital and 8.0% of the voting rights and Kerrous with 6.5% of theshare capital and 8.3% of the voting rights.(3) <strong>Casino</strong> holds a certain amount of treasury stock directly, mainly to meet its commitments under the liquidity contract (see page 31). Through Germinal, an indirectly wholly-owned subsidiary,<strong>Casino</strong> also held 928 shares representing 0.001% of the share capital at 31 December <strong>2010</strong>.Through the Group’s employee share ownership plan, Group employeesowned 2,099,509 shares on 31 December <strong>2010</strong>, representing 1.897%of the share capital and 2.136% of the voting rights.On 15 December <strong>2010</strong>, the Company conducted a survey ofholders of bearer shares. The survey identified 50,530 shareholdersor nominees, together holding 49,051,695, representing 44.32% ofthe share capital.The number of <strong>Casino</strong> shareholders is estimated at about 55,000(source: survey of identifiable holders of bearer shares carried outon 15 December <strong>2010</strong>, and shareholders’ register).To the best of the Company’s knowledge, no shareholder other thanthose listed above holds over 5% of the Company’s share capital orvoting rights.38 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Share Capital and Share Ownership2Between 1 January <strong>2010</strong> and 31 January 2011, the following shareholders disclosed a notifiable interest to the AMF:ShareholderDate ofdisclosureDirectionNumber of sharesand voting rights disclosed% of the sharecapital (1)% of votingrights (1)AMFreferenceRallye 19 May <strong>2010</strong> Increase 17,251,915 32,801,188 15.63 20.20 210C0441Rallye 19 Nov. <strong>2010</strong> Decrease 14,186,476 28,372,952 12.83 17.61 210C1207(1) Based on information provided by the Company pursuant to article L. 233-8 of the French Commercial Code (Code de commerce) and article L. 223-16 of the AMF’s General Rules andRegulations on the date of disclosure. However, the total number of voting rights published monthly is calculated, in compliance with article L. 223-11 of the AMF’s General Rules andRegulations, on the basis of all the shares carrying voting rights, including shares held in treasury, whose voting rights may not be exercised in Annual General Meetings.As of 31 December <strong>2010</strong>, 9,687,738 shares had been pledged by their holders. The table below shows details of shares pledged by theRallye Group to secure various credit facilities:BeneficiaryDate of initialpledgeExpiry dateConditions forrelease of pledgeNumber of sharespledged% share capitalpledgedRabobank July 2007 July 2012(1)2,706,453 2.45Crédit Agricole d’Ile-de-France (2) February 2009 February 2014(1)2,075,147 1.88Deutsche Bank October 2006 October 2011(1)1,799,557 1.63HSBC June 2007 June 2012(1)1,799,557 1.63Bayerische Landesbank January 2007 January 2012(1)890,289 0.80Other banks (2) December 2006 March 2014(1)373,909 0.34TOTAL 9,644,912 8.73(1) On repayment or maturity of the facility.(2) Initial pledge date and expiry date are the earliest and latest respectively for credit facilities currently in place.To the best of the Company’s knowledge, there are no shareholderpacts involving the Company’s shares.As of 31 December <strong>2010</strong>, <strong>Casino</strong> shares held directly by membersof the Board of Directors represented 0.011% of the share capitaland 0.012% of the voting rights in annual meetings. As of the samedate, 48.49% of the share capital and 60.39% of the voting rightswere controlled directly or indirectly by these members.As of 31 January 2011, <strong>Casino</strong> shares held directly by members ofthe Board of Directors represented 0.011% of the share capital and0.012% of the voting rights in annual meetings. As of the same date,48.49% of the share capital and 60.44% of the voting rights werecontrolled directly or indirectly by these members.The following table presents transactions disclosed to the Company by directors and related parties from 1 January <strong>2010</strong> to 31 January2011:DateShareholderPurchase/saleNumber ofinstrumentsAmount(in €)4 March <strong>2010</strong> David de Rothschild – Director Purchase 292 17,614.354 Nov. <strong>2010</strong> Matignon Sablons, company related to Foncière Euris, Director Sale 3,741,080 254,393,440.004 Nov. <strong>2010</strong> Cobivia, company related to Foncière Euris, Director Purchase 3,741,080 254,393,440.0019 Nov. <strong>2010</strong> Rallye S.A., company related to Foncière Euris, Director Sale 3,065,439 212,128,378.8019 Nov. <strong>2010</strong> Matignon Sablons, company related to Foncière Euris, Director Purchase 3,065,439 212,128,378.80Registration Document <strong>2010</strong> | <strong>Casino</strong> Group39
231 DECEMBER <strong>2010</strong>Risk Factors and Insurance2.7. RISK FACTORS AND INSURANCERisk management is an integral part of the day-to-day operationaland strategic management of the business and is organised atseveral levels (for further details, see section on “Chairman’s reporton internal control and risk management” as of page 185 of thisRegistration Document).The Group has reviewed the main risks that could have a materialimpact on its operations, financial position or results. These risks aredescribed below.2.7.1. MARKET RISKSThe Group has set up an organisation to manage liquidity, currencyand interest rate risks on a centralised basis. The Corporate FinanceDepartment, which reports to the Group Chief Financial Officer, isresponsible for managing these risks and has the necessary expertiseand tools, particularly in terms of information systems, to fulfil this task.The Corporate Finance Department operates on the main financialmarkets according to guidelines that guarantee the highest levels ofefficiency and security. A regular reporting system has been set up,allowing Group management to sign off on the policies followed, whichare based on strategies approved in advance by management.Interest rate riskDetailed information about interest rate risk is provided in note 31.2.1to the consolidated financial statements. The <strong>Casino</strong> Group usesvarious financial instruments to manage interest rate risk, particularlyswaps and interest rate options. These instruments are used solelyfor hedging purposes. Details of hedging positions are provided innote 31.1 to the consolidated financial statements.Currency riskInformation about currency risk is provided in note 31.2.2 to theconsolidated financial statements. The <strong>Casino</strong> Group uses variousfinancial instruments to manage currency risks, particularly swaps andforward purchases and sales of foreign currencies. These instrumentsare used solely for hedging purposes.Liquidity riskThe breakdown of long-term debt and confirmed lines of credit bymaturity and currency is provided in note 31.4 to the consolidatedfinancial statements, together with additional information concerningdebt covenants which, if breached, would trigger early repaymentobligations.The Group’s liquidity position appears to be very satisfactory. Upcomingrepayments of short-term financial liabilities are comfortably coveredby cash, cash equivalents and undrawn confirmed bank lines.The Group’s cash and cash equivalents present no liquidity orvalue risk.Its loan and bond agreements include the customary covenants anddefault clauses, including pari passu, negative pledge and crossdefaultclauses.None of its financing contracts contain a rating trigger.Public bond issues on the euro market and short-term confirmed banklines (up to one year) do not contain any financial covenants.Confirmed medium-term bank lines and some private placements (USprivate placement notes, 2009 private placement notes and indexedbonds) contain financial covenants which, if breached, could triggeraccelerated repayment.In the event of a change of control of <strong>Casino</strong>, Guichard-Perrachon(within the meaning of article L. 233-3 of the French CommercialCode), most loan agreements include an option for the lenders, at thediscretion of each, to request immediate repayment of all sums dueand, where applicable, the cancellation of any credit commitmentsentered into with the Company.Commodity riskGiven the nature of its business, the Company is not exposed to anymaterial commodity risk.Equity riskPursuant to the share buyback programme authorised by theshareholders (see section on Share capital and share ownership),the Company is exposed to a risk related to the value of the treasuryshares it holds.Sensitivity to a 10% decrease in the <strong>Casino</strong> share price is shown innote 18 to the parent company financial statements.The Group’s portfolio of marketable securities (see note 23 to theconsolidated financial statements and note 8 to the parent companyfinancial statements) consists primarily of money market mutual funds.The Group’s exposure to risks on this portfolio is low.Credit and counterparty riskThe Group is exposed to customer credit risks through its consumerfinance subsidiary, Banque du <strong>Groupe</strong> <strong>Casino</strong>. These risks aremeasured by a specialist service provider using credit scoringtechniques. Further information on credit and counterparty risk isprovided in note 31.3 to the consolidated financial statements.Many of the Group’s supermarkets and convenience stores areoperated by affiliates or franchisees. The credit risk relating to theseaffiliates and franchisees is assessed by the Group on a case by casebasis and taken into account in its credit management policy, mainlyby taking collateral or guarantees.40 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Risk Factors and Insurance22.7.2. OPERATIONAL RISKSRisks related to non-renewal of leasesand real estate assets<strong>Casino</strong> has standard commercial leases on its supermarket andconvenience store premises but cannot guarantee that they will berenewed on expiry.The owners could have other plans for the premises on expiry of thelease, which could prompt them not to renew the Company’s leasedespite the high amount of compensation for eviction they would haveto pay. However, commercial leases are governed by strict legislationas regards term, termination, renewal and rent indexation, which limitswhat owners can impose.Given the very few disputes caused by non-renewal of commercialleases, the risk is not considered to be in any way material.As regards property development, where the Group is the projectowner, specifications are drawn up by experts in accordance withthe prevailing regulations and functional and operational objectivesare set for each project.<strong>Mo</strong>re generally, the Group’s real estate portfolio is monitored regularlyto ensure its proper use.Risks associated with sales methodsThe Group’s banners in France have affiliate and franchise networks.These represented almost 55% of sales outlets at 31 December <strong>2010</strong>,corresponding mainly to supermarket networks (including LeaderPrice) and convenience store networks. The credit risk on theseconvenience store affiliates and franchises is taken into account inthe Group’s credit management policy.Risks related to trademarks and bannersThe Group owns substantially all of its trademarks and is not dependenton any specific patents or licences, except for the Spar trademarkwhich is licensed to the Group for the French market. The licencewas renewed for ten years in 2009.Furthermore, although the Group has a preventive policy of protectingall its trademarks, it does not believe that an infringement would havea material impact on its operations or results.Supplier and merchandise management riskThe Group is not dependent on any specific supply, manufacturing orsales contracts. <strong>Casino</strong> deals with almost 35,540 suppliers.The Group has its own logistics network in France (approximately970,000 sq.m. spread among 20 sites) managed by its Easydissubsidiary. The network spans the entire country and delivers regularlyto the Group’s various banners, with the exception of <strong>Mo</strong>noprix andFranprix-Leader Price which has its own logistics network.Risks related to private label goodsAs the leading private label retailer in the market, the Group sellsproducts under its own brand and can therefore be considered as aproducer/manufacturer. It draws up stringent specifications in termsof nutritional quality and quality standards for its product ingredients.However, it is nonetheless exposed to a product liability risk.Information systems riskThe Group is increasingly dependent on shared information systemsfor the production of costed data used as the basis for operatingdecisions. Security features are built into systems at the designphase and procedures are in place to constantly monitor systemssecurity risks.However, an information systems failure would not have any materialor prolonged impact on the Company’s operations or results.Geographical riskPart of the Group’s business is exposed to risks and uncertaintiesarising from trading in countries that notably could experience orhave recently experienced periods of economic or political instability(South America, Asia and the Indian Ocean region). Recent eventsin Venezuela and Thailand are described in notes 2.2 and 33 to theconsolidated financial statements. In <strong>2010</strong>, international operationsaccounted for 38% of consolidated revenue and 41% of consolidatedtrading profit.Industrial and environmental risksThe Group adopted a formal environmental policy in 2003 called“Excellence verte”, which complies with the objectives set by thegovernment’s Grenelle de l’environnement programme. An EnvironmentOfficer is responsible for coordinating the activities of all of the Group’soperating units in the area of environmental protection.Environmental risks and management procedures are described inthe Environmental Report which follows this section.2.7.3. LEGAL RISKSCompliance riskThe Group is mainly subject to regulations governing the managementof facilities open to the public and listed facilities. Certain Groupbusinesses are governed by specific regulations, and more particularly<strong>Casino</strong> Vacances (travel agency), Banque du <strong>Groupe</strong> <strong>Casino</strong> (bankingand consumer finance), Sudéco (real estate agency), Floréal and<strong>Casino</strong> Carburants (service stations), Mercialys (listed REIT) andL’Immobilière <strong>Groupe</strong> <strong>Casino</strong>, and GreenYellow (photovoltaic energyproduction). In addition, administrative consents are required to opennew stores and extend existing ones. International subsidiaries maybe subject to similar requirements under local legislation.Tax and customs riskThe Group is subject to periodic tax audits in France and the variousother countries where it has operations. Provision is made for allaccepted reassessments. Contested reassessments are provided foron a case-by-case basis, according to estimates taking into accountthe risk of an unfavourable outcome.Claims and litigationIn the normal course of its business, the Group is involved in variouslegal or administrative claims and litigation and is subject to audits byRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group41
231 DECEMBER <strong>2010</strong>Risk Factors and Insuranceregulatory authorities. Provisions are taken to cover these proceedingswhen the Group has a legal, contractual or constructive obligationtowards a third party at the year-end, it is probable that an outflowof resources embodying economic benefits will be required to settlethe obligation, and the amount of the obligation can be reliablyestimated.Information on claims and litigation is provided in notes 26.1 and 33to the consolidated financial statements.As of the Registration Document filing date, the Company is not andhas not been involved in any other governmental, legal or arbitrationproceedings (including any such proceedings that are pending orthreatened of which the Company is aware) during a period coveringat least the previous 12 months which may have, or have had in therecent past, significant effects on the financial position or profitabilityof the Company and/or the Group.Within the framework of litigation with the Baud family, however, asnoted on page 31 in the section on Shareholder Pacts, the Court ofArbitration had not yet ruled on the question of interest on the pricepaid by <strong>Casino</strong> for Franprix-Leader Price shares as well as an eventualright to dividends for the years 2006 and 2007. On 4 February 2011,the Court rejected out of hand the Baud family’s claim for paymentof Franprix and Leader Price dividends for 2006 and 2007. As aresult of this decision, <strong>Casino</strong> will be required to pay only €34 million,corresponding to the Franprix and Leader Price dividends for 2008 andto additional consideration for the Franprix and Leader Price sharespreviously acquired. This amount of €34 million is significantly lessthan the €67 million provision that had been booked in the <strong>Casino</strong>Group’s accounts.2.7.4. INSURANCE—RISK COVERAGEGeneral policyAs in previous years, the main objective of the Group’s insurance policyin <strong>2010</strong> was to protect its assets, customers and employees.The Insurance Department, which reports to Group Finance, isresponsible for:■■■■■managing centralised insurance programmes covering all Frenchoperations (including Mercialys, a listed subsidiary);identifying and quantifying insurable risks;ensuring that subsidiaries comply with the prevention measuresrecommended by the insurance company’s technical departments,particularly those related to facilities open to the public;implementing and monitoring insurance policies and/or selfinsurance;overseeing insurance brokers’ claims management.The Group is assisted by international brokers specialising in majorrisks and also uses the services of insurers specialising in industrialrisks.The Insurance Department oversees the local insurance programmestaken out by foreign subsidiaries where they are not covered by theGroup’s global master policies.Assessment of insurance coverrequirements and related costsSelf-insurance and insurance budgetTo smooth its insurance costs whilst controlling risks, the Groupcontinued to self-insure a large proportion of its high-frequencyclaims in <strong>2010</strong>, mainly but not exclusively for property damage andliability.As well as the application of low traditional deductibles, self-insurancealso includes deductibles per claim capped by underwriting year.These capped deductibles mainly concern major risks such asproperty damage, business interruption and liability. They are pooledat Group level by all subsidiaries insured under the Group’s globalinsurance programme.As well these deductibles, the Group continues to reinsure aportion of its property damage risk through its Luxembourg-basedcaptive reinsurance company, which is consolidated by the Groupand managed locally in compliance with the regulations applicableto this type of company. A stop loss policy is taken out to protectthe captive reinsurer’s interests by capping its commitment andtransferring the financial cost to the insurance market above a certainlevel of claims.Deductibles are managed by insurance brokers and overseen(depending on the type and amount of claim) by the Group as wellas the insurers under their contractual policy obligations.The Group’s total annual insurance budget (premiums and deductibles)for <strong>2010</strong>, excluding group death and disability plans, totalledan estimated €57 million, representing less than 0.20% of <strong>2010</strong>consolidated net revenue.Summary of insurance coverThe insurance cover described below summarises the main policiesvalid during <strong>2010</strong> and as of the date of this report. It cannot in anyway be considered as permanent. It may be changed at any timein accordance with developments in business operations and withthe Group’s choices to take account of insurance market capacity,available cover and rates.Property damage and business interruptionThis policy is designed to protect the Group’s assets.It is a ’named exclusion’ policy (i.e. it covers all losses exceptthose explicitly excluded) based on cover available in the insurancemarket.Insured risks include but are not limited to fire, explosion, naturaldisasters, subsidence and electrical damage.The maximum sum insured is €220 million per claim for major claims(fire and explosion), including direct damage and business interruption.There are certain sub-limits for named risks, including natural events,subsidence and theft.The premium payable on 1 July <strong>2010</strong> went up due to the riots andsocial unrest in Thailand in April <strong>2010</strong> which resulted in serious firedamage to a Bangkok shopping centre, and to the floods in theVar département of France in June <strong>2010</strong>. However, the increasewas contained thanks to the Group’s effective self-insuranceprogramme.No major claims had occurred by the year-end which could have anadverse effect on the programme’s renewal on 1 July 2011, either interms of overall cost (premiums and deductibles) or the cover itself.42 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Environmental Report2LiabilityLiability insurance covers the Group for all losses that might be incurreddue to bodily injury, damage to property or consequential loss sufferedby third parties caused by the Group’s products sold or delivered,technical facilities and equipment, buildings, store operations andservices rendered.The current policy is also a ’named exclusion’ policy with a sub-limitof €76 million for product withdrawal costs and for employer’s liabilityfor occupational accidents and illness.<strong>Mo</strong>st of the Group’s premises are classified as facilities open to thepublic. Insurance of the related risks requires careful managementgiven the involvement of third parties.Other insurance required by lawIn light of the Group’s business activities, it also has the followinginsurance cover:■■■■motor insurance;damages to works (prefinancing of claims under the ten-yearwarranty);construction insurance (ten-year warranty);specific liability insurance (building owners’ association or propertymanager, travel agency, bank).Other insuranceThe Group has also taken out various other policies given the risksinvolved, including:■a worldwide transportation and import policy to cover domesticand international transportation of goods;■a comprehensive contractor liability insurance to cover damageto buildings under construction, redevelopment, extension orrefurbishment.Risk prevention and crisis managementThe Group’s risk prevention policy, particularly with regard toproperty damage, which has been in place for several years now,is based on:■■■■regular audits of high value facilities by the insurers’ technicaldepartments, mainly covering hypermarkets, shopping centresand warehouses;joint monitoring of the audit and prevention reports for each facilityby the technical departments of both the Group and its insurers;monitoring of the protection in place at each facility according toneed and priorities (e.g. sprinklers, safety and security installations,etc.);monitoring risk mapping, including natural or other events both inFrance and abroad.The Group maintains and pursues a preventive approach to productrisk upstream of the sales outlets, both for private label and brandedgoods.In the event of a crisis or major claim, it also has the technical andadvisory resources to take swift action as required to protect itspeople, safeguard its assets and, wherever possible, ensure continuityof business and customer service.2.8. ENVIRONMENTAL REPORT2.8.1. SCOPEThe environmental data presented below includes all Géant <strong>Casino</strong>,<strong>Casino</strong> Supermarché, Hyper <strong>Casino</strong>, Spar and Petit <strong>Casino</strong> stores(including the Corsican stores managed by the Group’s subsidiaryCodim 2), the <strong>Casino</strong> cafeterias, the Easydis warehouses andCdiscount.Data concerning <strong>Mo</strong>noprix (50%-owned) are presented separatelyin the tables below.Data concerning the franchise outlets are not included in the <strong>2010</strong>report.Data concerning the Franprix-Leader Price Group are presentedseparately and only cover the consolidated scope, i.e. a total of167 Franprix outlets and 259 Leader Price outlets.Additional information, including data on foreign subsidiaries, isavailable in the <strong>Casino</strong> Group’s <strong>2010</strong> Business Review and CorporateSocial Responsibility (CSR) Report and the <strong>Mo</strong>noprix BusinessReview.2.8.2. ENVIRONMENTAL MANAGEMENTEnvironmental policyIn 2003, the <strong>Casino</strong> Group adopted a formal environmental policyset out in an action plan called “Excellence verte”. Each year, anenvironmental seminar is held for all environment officers in the Group’svarious functions and subsidiaries in France to review the effectivenessand results of actions taken and to set out the environmental actionplan for subsequent years. The plan is “Factor 4” compliant underthe French government’s Grenelle de l’environnement programmeand addresses all environmental issues including energy, waste,transportation, water, sustainable construction, eco-design, etc.Detailed road maps are available in the <strong>2010</strong> Business Review andCSR report.<strong>Casino</strong> completed its second carbon report in 2009 in order to refineits action plan and update its carbon index for <strong>Casino</strong> productslaunched in June 2008. The index covered more than 630 productsat end <strong>2010</strong>. <strong>Casino</strong> continues to work on environmental labelling inpartnership with the Ademe and Afnor organisations and submitteda response to the tender invitation launched in <strong>2010</strong> by the FrenchMinistry of Ecology, Energy, Sustainable Development and MaritimeAffairs.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group43
231 DECEMBER <strong>2010</strong>Environmental ReportEnvironmental assessment or certificationinitiatives<strong>Casino</strong> continued to roll out its energy consumption monitoringsystems, which cover the majority of its hypermarkets, supermarkets,cafeterias and warehouses.Independent electricity consumption audits are performed regularly,leading to the implementation of corrective action (see below fordetails).An IFS (International Food Standard) certification programme has beenimplemented for the Group’s warehouses. Eleven warehouses werecertified at the end of <strong>2010</strong> and the rest are due to obtain certificationby the end of 2011. One warehouse is also HQE certified and anotherISO 14001 certified.As regards the shopping centres, Mercialys, a <strong>Casino</strong> subsidiary,created the first sustainable development label for shoppingcentres—the “V” label—in liaison with experts in the field, includingEcocert Environnement, an independent external organisation thataudits the applicant shopping centres on the basis of a set of about100 criteria. Three shopping centres obtained the label in <strong>2010</strong>, witha target of thirty by 2015.Expenditure to limit the environmental impacts of the businessIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Eco-packaging tax + Corepile tax (battery recycling) + D3E tax(recycling) + Eco-TLC tax (selective waste sorting) (1) € 1,716,000 1,156,585 N/AEco contribution on promotional brochures (1) € 1,020,000 216,397 N/AExpenditure for remediation of land owned by the Group (1) € 57,000 N/A N/A(1) Excluding Codim 2 and Cdiscount.OrganisationThe Environment Officer was appointed in 2001 to coordinate the activities of all of the Group’s operating units in the area of environmentalprotection. He is supported by a number of local officers in the Group’s various business units and reports to the Corporate Social ResponsibilityDepartment set up in <strong>2010</strong> to develop and coordinate more efficiently the Group’s CSR policy in France and internationally.Provisions for environmental risks and insurance coverIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Provisions for environmental risks (1) € 466,000 0 N/AInsurance cover for environmental risk € 0 0 N/A(1) Sites concerned: Annemasse, Boissy-Saint-Léger, Chalon-sur-Saône, Cholet, Lanester, Lannion, Mandelieu, Marseille la Valentine and Limoges.Compensation paid and action takento remedy environmental damageThe Group was not ordered to pay any compensation for environmentaldamage in <strong>2010</strong> by decision of any court.Objectives set for foreign subsidiariesAt the beginning of 2003, the <strong>Casino</strong> Group produced a documentsetting out its commitments in the area of sustainable development(for further information, see the <strong>2010</strong> Business Review and SustainableDevelopment Report, and our website www.groupe-casino.fr). Thesecommitments, which were reaffirmed when the Group signed theUnited Nations Global Compact in 2009, also cover environmentalissues and apply by default to all Group entities. Areas requiring workon a Group scale are identified by exchanging best practices andharmonising action taken depending on local specifics.44 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Environmental Report22.8.3. MAIN ENVIRONMENTAL IMPACTSIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Water consumption m 3 1,955,046 286,214 N/AElectricity consumption MWh 1,256,176 315,117 245,884Cardboard waste sorted for recycling Tonnes 49,730 16,954 18,216Lighting consumables sorted for recycling tubes collected Tonnes N/A 5.6 N/ABatteries collected from customers Tonnes 209 113 N/ACO 2emissions generated during goods transportation(between warehouses and stores) (1) TCDE CO 2 142,541 19,478 32,433(1) Calculated on the basis of the distance travelled, using GHG Protocol methodology.Measures taken to improveenergy efficiency and useof renewable energy sourcesStore lighting and refrigeration for chilled foods are the two mainconsumers of energy, principally electricity. Major initiatives in <strong>2010</strong>included:■■■■■■■■■continued campaigns to raise awareness of energy savings;a load-shedding and automatic lighting shut off programme forthe head office;renovation and improvement of store lighting as part of the Group’smembership of the European Commission’s Green Light programmeand installation of energy optimisers;reduction of lighting in some store departments (household, clothing,perfume displays, etc.);establishment, in collaboration with refrigerated equipmentmanufacturers, of a master agreement for the gradual implementationof preventive maintenance and renovation programmes to avoidrefrigerant gas leaks and excessive consumption of electricity.A ’confinement’ charter has been prepared and incorporated intothe maintenance contracts with cooling systems suppliers;installation of night blinds for chiller cabinets and covers for freezercabinets;continued regular electricity consumption audits by the Group’sTechnical Department;introduction of LED light bulbs in cafeterias and warehouses;development of the Group’s subsidiary, GreenYellow, which installed18,000 kWp of solar power in <strong>2010</strong>, generated by solar panels.Waste managementThe Group generates limited amounts of non-hazardous waste(cardboard, plastic and wood) and industrial waste requiring dedicatedrecycling procedures (neon strips, frying oil, office waste). In additionto taking action to reduce waste at source (e.g. use of returnablepackaging, reduction in quantities of marketing brochures produced),<strong>Casino</strong> has made waste sorting and recycling a priority, and has signedcollection/recycling agreements to this effect. In <strong>2010</strong>, <strong>Casino</strong> recycled49,730 tonnes of cardboard waste. The warehouses have set up areverse logistics system, which led to the recovery of 8,300 tonnesof cardboard and plastic in <strong>2010</strong>. A programme for recycling organicwaste has been set up in the foodservice business, with 277 tonnesof waste processed in <strong>2010</strong>.The number of plastic bags distributed at the checkouts has decreasedby 85% between 2008 and <strong>2010</strong>.An eco-design programme for <strong>Casino</strong> private label goods wasintroduced in 2008. Savings of over 3,000 tonnes of packagingmaterials have so far been made on 899 products. <strong>Casino</strong> has set acumulative target of 3,700 tonnes for 2011.Atmospheric emissions<strong>Casino</strong> completed a second carbon report in 2009, covering a sampleof 400 premises. The results bear out the Group’s greenhouse gasreduction targets for 2009-2012 (for further details, see the <strong>2010</strong>Business Review and Corporate Social Responsibility Report).<strong>Mo</strong>noprix also carried out a carbon report in <strong>2010</strong>.The Group’s atmospheric emissions are limited and, apart fromcustomer travel, mostly concern CO 2emissions generated duringgoods transportation and indirect CO 2emissions generated byelectricity consumption and cooling systems. Apart from the results ofenergy and related-emission savings programmes, action to optimisedelivery schedules has led to a saving of over 12 million kilometres in<strong>2010</strong>, or the equivalent of almost 14,000 tonnes of CO 2.The programme to make the truck fleet compliant with the latestEuro 5 standards continues. 75% of the fleet was compliant at theend of <strong>2010</strong> and the target is 100% by end-2011.32% of <strong>Casino</strong>’s and 92% of <strong>Mo</strong>noprix’s major imports weretransported by waterway or railway. Discussions are in progress withthe operators on various large-scale cross-country railway projects.Franprix/Leader Price has introduced a home delivery service usingelectric vans. 100 vehicles will eventually be used to make a total of1,500 daily deliveries. <strong>Casino</strong> convenience stores have also introduceda home delivery service using electric vehicles (vans and tricycles) inmajor cities such as Paris, Toulouse and Saint-Étienne.Local pollution<strong>Casino</strong> strives to reduce noise pollution and emissions caused bydeliveries to its stores in urban areas. The Group has now equipped itsentire truck fleet with insulated containers using cryogenic refrigerationsystems to reduce emissions of refrigerant gases and noise pollutionwhile increasing compliance with the cold chain.This programme, known as “Citygreen”, won an LSA Innovation awardin <strong>2010</strong>. It covers the Piek Azote, Hybrid and electric innovations that<strong>Casino</strong> has decided to adopt, with the aim of equipping 200 vehiclesby 2013.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group45
231 DECEMBER <strong>2010</strong>Employment ReportLand use and measures to preventenvironmental damageThe majority of <strong>Casino</strong> stores and warehouses are located in urbanareas and the risk of land pollution or damage to the ecosystem isnegligible.Specific precautions are taken with respect to service stations,PCB-insulated transformers and air-conditioning refrigeration towers.A top-priority compliance programme has been introduced, includingthe following measures:■■All single-jacketed underground tanks are systematically beingreplaced with double-jacketed tanks to minimise the risk of soiland water table pollution.All of <strong>Casino</strong>’s newer store premises comply with the latest regulatorystandards concerning the recovery and treatment of rainwateron service station forecourts and in supermarket car parks. Allservice stations operated by the Group’s hypermarkets in Franceare equipped with hydrocarbon separators.2.9. EMPLOYMENT REPORT2.9.1. SCOPEThe employee data presented concern (unless otherwise specified)all wholly-owned Group facilities in France operated by the followingcompanies: <strong>Casino</strong> Guichard-Perrachon, Distribution France<strong>Casino</strong> (and its subsidiaries Serca, Acos and <strong>Casino</strong> Vacances),Codim 2, <strong>Casino</strong> Restauration (and its subsidiary RestaurationCollective <strong>Casino</strong> – R2C), Easydis (and its subsidiary C Chez Vous),L’Immobilière <strong>Groupe</strong> <strong>Casino</strong> (and its subsidiary Sudéco), EMCDistribution, Comacas and <strong>Casino</strong> Services, Club Avantages, <strong>Casino</strong>Franchise, dunnhumby France, Mercialys, Mercialys Gestion, VPAubière, Rédonis, <strong>Casino</strong> Développement, GreenYellow, VP Vaulx,Villa Plancha, Alwenna Restauration Traiteur, Odyssée RestaurationTraiteur, C.I.T. and IGC Services.Data concerning the franchise outlets are not included in the <strong>2010</strong>report. Data concerning the Franprix-Leader Price Group arepresented separately and only cover the consolidated scope, i.e. atotal of 167 Franprix outlets and 259 Leader Price outlets (FranprixExploitation, Franprix Holding, STL, Fretam, Sedifrais, SML, SCL,Franprix Distribution, Leader Price Holding, Gecoma, DLP, SGL,SLO, Effel and Franleader).Additional information (including data on foreign subsidiaries) isavailable in the <strong>Casino</strong> Group and <strong>Mo</strong>noprix’s <strong>2010</strong> Business Reviewand Corporate Social Responsibility Report.Data concerning <strong>Mo</strong>noprix (50%-owned) are presented separatelyin the tables below.46 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Employment Report22.9.2. EMPLOYEESIndicatorUnit<strong>Casino</strong><strong>2010</strong> <strong>Mo</strong>noprix <strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Number of employees in France as of 31 December Number 47,085 20,471 11,661Breakdown by type of contract:Permanent contracts (average across year) Number 44,190 18,324 9,322Fixed-term contracts (average across year) Number 4,031 2,235 897Breakdown by genderNumber• Managers2,918 1,082 759- Men1,308 1,244 342- Women• SupervisorsNumber- Men2,985 586 396- Women1,986 874 329• Clerical, administrative and otherNumber- Men13,043 5,337 3,470- Women24,876 11,348 4,941(1)- External labour:Average monthly number of temporary staff FTEs 1,762 50 N/ANumber of recruitments:Permanent contracts Number 6,064 3,270 2,603Fixed-term contracts Number 20,400 14,723 5,221Terminations:Job elimination Number 38 1 38Other reasons Number 1,756 1,173 640(1) Only includes companies that produce a corporate social report.2.9.3. ORGANISATION OF WORKING HOURSIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Number of full-time employees as of 31 December Number 31,521 13,702 7,462Number of part-time employees as of 31 December Number 15,598 6,769 2,775Average actual working week, full-time employees (1) Hours 33.90 35.03 36.0Average actual working week, part-time employees (1) Hours 23.56 22.93 24.0Overtime hours Hours 457,052 327,207 294,397(1) Excluding Codim 2 and Cdiscount.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group47
231 DECEMBER <strong>2010</strong>Employment Report2.9.4. ABSENTEEISMIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Total number of hours worked Hours 64,626,000 27,745,822 12,353,000Total number of hours absence Hours 6,903,090 4,267,610 889,628Breakdown of absenteeism by cause• Work-related accidentHours 796,776 304,825 242,824 (1)• Accident on journey to or from workHours 105,045 56,014• SicknessHours 4,064,497 1,459,655 441,614• Maternity/PaternityHours 822,118 352,107 205,190• Authorised leaveHours 101,124 403,612 N/A• OtherHours 978,965 1,691,814 N/A(1) Franprix-Leader Price: all accidents combined.2.9.5. PAYROLL COSTSIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Total wages and salaries € thousands 1,628,098 573,972 191,688Total incentive payments in the year € thousands 5,738 7,540 N/ATotal profit-sharing payments in the year € thousands 19,289 23,759 5,0892.9.6. EQUAL OPPORTUNITYFor more than 17 years, <strong>Casino</strong> has been committed to the preventionof all forms of discrimination in association with the various governmentorganisations. In October 2004, the Group signed the diversity charteralongside 40 other major French companies, endorsing six keyprinciples for promoting diversity. In 2005, Distribution <strong>Casino</strong> Francesigned a Group agreement on the promotion of equal opportunityand non-discrimination, as well as an agreement on gender equality.In 2007, a new agreement was signed with the Ministry of SocialCohesion and Equality and in February 2008 the Group endorsed thegovernment’s Plan Dynamique Espoir Banlieues for regenerating theunderprivileged city suburbs. <strong>Casino</strong> has also committed to use ofthe recruitment by simulation method for hiring its employees.In 2009 and <strong>2010</strong>, Distribution <strong>Casino</strong> France hired a total of 1,902young people under the age of 26 living in sensitive urban areas(permanent contracts and fixed-term contracts of more than 6 months),367 people on combined work/study contracts and 1,246 interns.Since 2008, almost 3,000 young people from sensitive urban areasaged under 26 and more than 1,700 interns have been recruited. Theresults in 2009 and <strong>2010</strong> show that the Group has delivered on all itscommitments despite the difficult economic environment.<strong>Mo</strong>noprix is also using the recruitment by simulation method, and eachyear hires young people from sensitive urban areas on apprenticeshipcontracts (663 apprentices hired in <strong>2010</strong>).In May 2009, <strong>Casino</strong> obtained the Diversity Label in recognition of itscommitment to preventing discrimination, providing equal opportunitiesand promoting diversity. In <strong>2010</strong>, this label was audited and renewedby Afnor Certification, whose commission gave a favourable opinionon its continuation. Group subsidiaries Cdiscount and Franprix-LeaderPrice, in addition, signed the diversity charter.<strong>Groupe</strong> <strong>Casino</strong> and ISM-Corum have been partners since 2002 in theEuropean Equal programme first through Equal LUCIDITÉ and thenEqual AVERROES. During <strong>2010</strong>, to meet its commitment of carryingout a second test three years after the first, the Group worked closelywith the trade unions and external experts to organise and arrangethe entire process, which will be launched in 2011.48 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Employment Report22.9.7. EMPLOYEE RELATIONSIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Number of meetings with employee representatives (1) Number 13,348 3,977 282(1) Only includes companies that produce a corporate social report.When the agreement on employment and skills planning andforecasting was negotiated in 2008, the Group announced its plansto sign a specific Group agreement on the employment of workersaged 50 plus. A three-year agreement covering <strong>2010</strong> to 2012 wassigned on 9 September 2009, committing to recruiting 500 employeesaged 50 plus during the three-year period and including provisionsfor keeping employees aged 55 plus in employment.<strong>Casino</strong> signed a new agreement on health and safety in the workplacein <strong>2010</strong> whilst both <strong>Casino</strong> and <strong>Mo</strong>noprix signed a new incentiveagreement.2.9.8. HEALTH AND SAFETYIndicatorWork-related accident rate (1)Lost-time accident rate (1)(1) In <strong>2010</strong>, these rates no longer include occupational illness. They do not include Codim 2 or Cdiscount.Unit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>No. of accidentsper million hours worked 38.41 55.22 N/ANo. of lost daysper 10,000 hours worked 1.82 1.22 N/AIn 2006, <strong>Casino</strong> conducted a survey on health in the workplace andsigned a national commitment charter with the national health fundfor employees (CNAMTS). The “Cap Prévention” accident preventionprogramme launched during 2007 continued to be deployedthroughout <strong>2010</strong> and is producing good results. Accident rates andlost-time accident rates have been falling steadily for the past six years.Agreements have been signed with the CNAMTS to implement anaccident prevention policy when stores are built or redeveloped.The programme for the prevention of musculoskeletal disorders initiatedin the warehouses in 2009 was extended to the supermarkets andhypermarkets. An agreement to implement a programme to preventpsychosocial risks was signed by the trade union organisations on22 January <strong>2010</strong>.<strong>Mo</strong>noprix has created the position of “working conditions and socialinnovation officer” with the aim of preventing occupational risks anddiseases.2.9.9. TRAININGIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Average number of hours training per employee per year (1) Hours 6.0 4.92 3.9% of employees who received at least one formof training during the year % 33% 40% 23%(1) <strong>Casino</strong> data excluding Codim 2 and Cdiscount.The Campus <strong>Casino</strong> centre provides a broad spectrum of training for employees, 14,555 of whom received some form of training in <strong>2010</strong>.2.9.10. DISABLED WORKERSIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Number of disabled employees hired during the year Number 125 57 N/ADisabled employees as a% of the workforce (1) % 10.07% 5.91% (2) N/A(1) Excluding Codim 2 and Cdiscount for <strong>Casino</strong>.(2) After deductions for <strong>Mo</strong>noprix.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group49
231 DECEMBER <strong>2010</strong>Employment ReportThe Group has had a disability policy since 1995 through its“Handipacte” agreements. In <strong>2010</strong>, the Group met the objectives setout in the fourth Handipacte agreement which covered the period2006-<strong>2010</strong>. A fifth agreement covering the period 2011-2013 wassigned by the trade union organisations in December <strong>2010</strong> and isawaiting the government’s DIRECCTE agency approval.Over the period 2006-<strong>2010</strong>, a total of 474 disabled people have beenrecruited and 392 more taken in on internship programmes comparedwith a target figure of 350. <strong>Mo</strong>noprix has a similar agreement, with atarget of hiring 180 disabled employees.2.9.11. EMPLOYEE WELFAREIndicatorUnit<strong>Casino</strong><strong>2010</strong><strong>Mo</strong>noprix<strong>2010</strong>Franprix-Leader Price<strong>2010</strong>Total budget paid to Works Council € 13,999,012 3,341,032 637,663Corporate sport and arts sponsorship (France and International) € 1,800,580 N/A 76,717Charitable donations (France and International) € 3,565,476 1,664,000 464,437Each year, all stores take part in national charitable events(food collection, telethons, etc.) and participate in various localpartnerships.In addition to these local initiatives, the <strong>Casino</strong> Foundation set up in<strong>2010</strong> supports initiatives fostering access to culture, knowledge andpersonal development in children. An initial programme to limit theisolation of children in hospital, in partnership with the Docteur Sourisassociation, provides laptops that enable them to keep in touch withthe outside world. The Foundation also supports local foundationsset up by the Group’s international subsidiaries.A national partnership has been forged with the food banks and over€2,600,000 worth of goods were collected under the programmein <strong>2010</strong>.2.9.12. IMPACT ON LOCAL JOB MARKETSAND REGIONAL DEVELOPMENTThe Diversity and Solidarity Promotion Department pursued itsaction in line with the priorities established in the national partnershipagreement with the Ministry for Urban Development, which wasrenewed for 2007-2012. The aim of this agreement is to help poorlyqualified people find jobs and young graduates from underprivilegedbackgrounds to gain access to management positions (see diversitypolicy in the <strong>2010</strong> Business Review and CSR report).Similarly, <strong>Casino</strong> has always had close relationships with its suppliers(farmers, cooperatives, SMEs). <strong>Mo</strong>st suppliers of <strong>Casino</strong> private labelproducts are local industrial firms. In June <strong>2010</strong>, <strong>Casino</strong> signed thegovernment-sponsored “Pacte PME” designed to foster growth,efficiency and expansion of the SME sector. It is the only majorretailer to have signed the Pact, which was launched by France’sPrime Minister.The foreign subsidiaries also pursue similar programmes in partnershipwith local stakeholders (see <strong>2010</strong> Business Review and CSRreport).2.9.13. OUTSOURCING AND RESPECT FOR ILO CONVENTIONSBy signing the United Nations Global Compact, the Group reaffirmedits commitment to respecting and promoting human rights.In 2000, the Group’s central purchasing agency established an actionplan designed to ensure that suppliers in developing countries respectthe human rights of their employees. The Suppliers Chart of Ethics,drawn up in accordance with the basic principles established by theILO and with the Social Initiative Clause standards, has been includedin all supplier contracts since 2002. Social audits of suppliers indeveloping countries continued in <strong>2010</strong> with 95 initial and follow-upaudits performed by external experts in China, Bangladesh, Pakistan,Thailand and Vietnam. <strong>Mo</strong>noprix conducted 69 social audits of itssuppliers in <strong>2010</strong>. In 2011, <strong>Casino</strong> will introduce a Group Chartof Ethics, which will be applicable to all French and internationalsubsidiaries.50 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
31 DECEMBER <strong>2010</strong>Employment Report22.9.14. EMPLOYEE PROFIT-SHARING AND INCENTIVE PLANSProfit-sharing planAn initial profit-sharing agreement was signed on 30 December 1969as required by the French Labour Code (Code du travail), and adoptedby each of the companies in the Group.Given the Group’s diversification since then and the inter-relationshipbetween its various business activities (retailing, production,foodservice, etc.), a new group-wide profit-sharing agreement wasadopted on 16 September 1988 at the request of the trade unions,covering all the Group’s French subsidiaries (except Franprix-LeaderPrice, <strong>Mo</strong>noprix and Banque du <strong>Groupe</strong> <strong>Casino</strong>).Under this agreement, all group companies established a specialprofit-sharing reserve based on their own individual results. Thesereserves were then aggregated and the total amounts distributedto all employees in proportion to their salaries, within the maximumlimit permitted by law.A new agreement was signed on 16 March 1998. There was no changeto the method of calculating and distributing the profit-sharing reserves,but the structure of the Employee Savings Plan was altered throughthe creation of several different investment funds. On 29 June 2000, asupplemental agreement was signed in order to neutralise the impacton calculation of 2000 profit-sharing (restatement of shareholders’equity) of restructuring operations carried out on 1 July 2000 butretroactive to 1 January 2000. A further supplemental agreement wassigned on 26 June 2001, which altered the method of calculating theGroup’s profit-sharing reserve. It is now computed as a function ofthe previous year’s reserve and the change in trading profit, but maynot in any event be less than the cumulated legal reserves computedon a company-by-company basis.Incentive planA new group-wide incentive plan for all French subsidiaries (exceptFranprix-Leader Price, <strong>Mo</strong>noprix and Banque du <strong>Groupe</strong> <strong>Casino</strong>) hasbeen set up covering <strong>2010</strong>, 2011 and 2012.The plan still combines a group incentive with a local incentive.The group component is calculated on the basis of consolidatedtrading profit (before incentive and profit-sharing entitlement) of thecompanies concerned less the remuneration of capital employed.80% is allocated in proportion to annual salary and 20% in proportionto length of service.The local component is a direct function of the results of each localoperating unit. It is allocated entirely in proportion to annual salaryand paid no later than 15 May each year.The aggregate group and local incentive payment may not exceed30% of the Group’s share in consolidated net profit after tax of thecompanies concerned.Profit-sharing and incentive paymentsProfit-sharing and incentive payments for the last five years are as follows (in € thousands):€ thousands Profit-sharing plan Incentive plan Total2005 21,986.8 16,217.6 38,204.42006 22,746.5 29,768.0 52,514.52007 24,317.0 26,572.3 50,889.32008 23,126.0 22,213.5 45,339.52009 20,448.4 14,474.4 35,922.8Employee stock options<strong>Casino</strong> introduced its first Group employee stock option plan in 1973.Since then, many plans have been implemented for officers andemployees of the Group. In 1991, for example, options to purchasenew shares were granted to the entire workforce (over 2.2 millionoptions granted to 27,375 beneficiaries), under a plan that expiredin 1997.In December 1987, all employees with managerial grade and aminimum of one year’s service were granted options to purchaseexisting shares representing 10%, 20%, 30% or 40% of their annualsalary, depending on their grade. Since then and through 2009,stock options to purchase existing or new shares based on thesame principles have been granted in December of each year to newmanagers who have completed one year’s service with the Group,and the number of options held by managers promoted to a highergrade has been adjusted.Options to purchase new sharesDetails of current stock options exercisable for new shares are givenon page 34.Options to purchase existing sharesThere were no stock options exercisable for existing shares outstandingat 31 January 2011.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group51
231 DECEMBER <strong>2010</strong>Employment ReportStock options granted to and exercised by the top ten employees in <strong>2010</strong> were as follows:Total numberof optionsWeightedaverage priceOptions granted 29,825 €64.87Options exercised 95,802 €58.01Share grantsSince 2005, the Company has made restricted share grants toemployees, contingent upon the achievement of certain performancecriteria and/or continued presence.In December <strong>2010</strong>, based on the same principles as the optionsgranted from December 1987 through December 2009, new managerswho have completed one year’s service with the Group and managerspromoted to a higher grade were granted shares representing,depending on their grade, 2%, 4%, 6% or 8% of their annual salary.The share grants are contingent upon the grantees remaining withthe company until the vesting date.Details on share grant plans that are currently valid may be foundon page 35.Employee share ownershipTwo employee share ownership plans were set up in December2005 and December 2008 respectively to strengthen the relationshipbetween the Group and its employees by giving them a greater vestedinterest in the Group’s future development and performance.These leveraged, capital guaranteed ESOPs are open to all employeesof the Group in France who are members of a <strong>Casino</strong> corporatesavings plan.The 2005 plan expired in <strong>2010</strong>.800,000 shares were issued to the 2008 Emily 2 plan at a price of€46.18.On 31 January 2011, Group employees owned 2,089,297 sharesrepresenting 1.88% of the capital and 2.13% of voting rights throughthe various employee share ownership plans.52 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
3CONSOLIDATEDFINANCIALSTATEMENTS3.1. Statutory Auditors’ Reporton the consolidated financial statements .......................543.2. Consolidated financial statements .................................553.2.1. Consolidated income statement .......................................553.2.2. Consolidated statement of comprehensive income .........563.2.3. Consolidated balance sheet .............................................573.2.4. Consolidated statement of cash flows .............................583.2.5. Consolidated statement of changes in equity...................613.3. Notes to the consolidated financial statements .............62Registration Document <strong>2010</strong> | <strong>Casino</strong> Group53
3CONSOLIDATED FINANCIAL STATEMENTSStatutory Auditors’ Report on the consolidated fi nancial statements3.1. STATUTORY AUDITORS’ REPORT ON THECONSOLIDATED FINANCIAL STATEMENTSThis is a free translation into English of the Statutory Auditors’ report issued in the French language and is provided solely for the convenienceof English-speaking readers. This report includes information specifically required by French law in such reports, whether qualified or not. Thisinformation is presented below the opinion on the consolidated financial statements and includes (an) explanatory paragraph(s) discussingthe auditors’ assessment(s) of certain significant accounting and auditing matters. These assessments were made for the purpose of issuingan audit opinion on the consolidated financial statements taken as a whole and not to provide separate assurance on individual accountcaptions or on information taken outside the consolidated financial statements.This report should be read in conjunction with, and is construed in accordance with, French law and professional auditing standards applicablein France.To the Shareholders,In compliance with the assignment entrusted to us by your shareholders’ meeting, we hereby report to you, for the year ended December31, <strong>2010</strong>, on:■■■the audit of the accompanying consolidated financial statements of <strong>Casino</strong>, Guichard-Perrachon;the justification of our assessments;the specific verification required by French law.These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these consolidatedfinancial statements based on our audit.I. Opinion on the consolidatedfinancial statementsWe conducted our audit in accordance with professional standardsapplicable in France; those standards require that we plan andperform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement. Anaudit involves performing procedures, using sampling techniques orother methods of selection, to obtain audit evidence about the amountsand disclosures in the consolidated financial statements. An auditalso includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made, as wellas the overall presentation of the consolidated financial statements.We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.In our opinion, the consolidated financial statements give a true andfair view of the assets and liabilities and of the financial position of theGroup as at December 31, <strong>2010</strong> and of the results of its operationsfor the year then ended in accordance with International FinancialReporting Standards as adopted by the European Union.Without qualifying our opinion, we draw your attention to Note 1.1.1to the consolidated financial statements, which describe the newstandards and interpretations applied by the Group as of January 1,<strong>2010</strong>.II. Justification of assessmentsIn accordance with the requirements of article L. 823-9 of the FrenchCommercial Code (Code de commerce) relating to the justification ofour assessments, we bring to your attention the following matters:■The Group is required to make estimates and assumptions asregards impairment tests of goodwill and other non current■■assets (notes 1.5.12 et 16). The recoverable value of noncurrent assets is estimated using cash flow and earningsprojections and other information contained in the Group’slong-range business plans approved by the management.We examined the consistency of assumptions, the data underlinedto these ones and available documentation. Based on those, weassessed the reasonableness of the Group’s evaluations.Note 3 of the consolidated financial statements describes therecognition of a negative goodwill related to the acquisition of CasasBahia. We assessed the data and the assumptions on which wasestimated the provisional negative goodwill, analyzed the calculationsperformed by the Group, verified the accounting treatment followedand that the notes to the financial statements included appropriatedisclosures in the notes to financial statements.As described in Note 1.5.33 “Operating segments” of theconsolidated financial statements, information about segmentswas brought into line with the new internal organization.We assessed the appropriateness of the presentation on thebasis of available documentation and of disclosures in the notesto consolidated financial statements.These assessments were made as part of our audit of the consolidatedfinancial statements taken as a whole and, therefore, contributed toour audit opinion expressed in the first part of this report.III. Specific verificationAs required by law we have also verified in accordance withprofessional standards applicable in France the information presentedin the Group’s management report.We have no matters to report as to its fair presentation and itsconsistency with the consolidated financial statements.Neuilly-sur-Seine and Lyon, March 11, 2011The Statutory AuditorsDeloitte & AssociésErnst & Young et AutresAntoine de Riedmatten Alain Descoins Sylvain Lauria Daniel Mary-Dauphin54 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements33.2. CONSOLIDATED FINANCIAL STATEMENTS3.2.1. CONSOLIDATED INCOME STATEMENTfor the years ended 31 December <strong>2010</strong> and 2009€ millions Notes <strong>2010</strong> 2009CONTINUING OPERATIONSNet sales 5.1 29,078 26,757Cost of goods sold 5.2 (21,753) (19,836)Gross profit 7,325 6,921Other income 5.1 411 314Selling expenses 5.3 (5,324) (4,983)General and administrative expenses 5.3 (1,112) (1,043)Trading profit 1,300 1,209as a % of sales 4.5 4.5Other operating income 6 420 260Other operating expense 6 (405) (296)Operating profit 1,314 1,173as a % of sales 4.5 4.4Income from cash and cash equivalents 39 27Finance costs (384) (370)Finance costs, net 7.1 (345) (343)Other financial income 7.2 85 91Other financial expense 7.2 (102) (93)Profit before tax 953 828as a % of sales 3.3 3.1Income tax expense 8 (214) (201)Share of profits of associates 9 13 6Profit from continuing operations 752 633as a % of sales 2.6 2.4attributable to owners of the parent 559 543attributable to non-controlling interests 193 90DISCONTINUED OPERATIONSNet profit/(loss) from discontinued operations 10 (9) 228attributable to owners of the parent (9) 48attributable to non-controlling interests - 179CONTINUING AND DISCONTINUED OPERATIONSTotal net profit 743 861attributable to owners of the parent 550 591attributable to non-controlling interests 193 270Earnings per shareIn € Notes <strong>2010</strong> 2009From continuing operations attributable to owners of the parent 11• Basic earnings per share4.93 4.76• Diluted earnings per share4.90 4.75From continuing and discontinued operations attributable to owners of the parent 11• Basic earnings per share4.85 5.20• Diluted earnings per share4.82 5.18Registration Document <strong>2010</strong> | <strong>Casino</strong> Group55
3CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements3.2.2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the years ended 31 December <strong>2010</strong> and 2009€ millions <strong>2010</strong> 2009Net profit for the period 743 861Exchange differences on translating foreign operations 579 532Actuarial gains and losses (18) (6)Gains and losses from remeasurement at fair value of available-for-sale financial assets 5 6Cash flow hedges 13 -Tax effect on income and expense recognised directly in equity 3 (4)Income and expense recognised directly in equity, net of tax 583 528TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,325 1,389Attributable to owners of the parent 995 1,096Attributable to non-controlling interests 331 293<strong>Mo</strong>vements in the period are presented in note 24.3.56 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements33.2.3. CONSOLIDATED BALANCE SHEETfor the years ended 31 December <strong>2010</strong> and 2009Assets€ millions Notes <strong>2010</strong> 2009 adjusted (1)Goodwill 12 6,654 6,435Intangible assets 13 1,150 688Property, plant and equipment 14 6,160 5,751Investment property 15 1,346 1,235Investments in associates 17 161 178Other non-current assets 19 648 409Non-current hedging instruments 31 150 176Deferred tax assets 8 113 140Total non-current assets 16,382 15,012Inventories 20 2,892 2,575Trade receivables 21 1,744 1,509Other current assets 22 1,758 1,201Current tax receivables 8 85 67Current hedging instruments 31 112 116Cash and cash equivalents 23 2,813 2,716Non-current assets held for sale 10 1 26Total current assets 9,406 8,209TOTAL ASSETS 25,788 23,221Equity and liabilities€ millions Notes <strong>2010</strong> 2009 adjusted (1)Share capital 169 169Additional paid-in capital, treasury shares and retained earnings 6,347 5,619Profit attributable to owners of the parent 550 591Equity attributable to owners of the parent 7,066 6,379Non-controlling interests in reserves 1,805 1,269Non-controlling interests in profit for the period 193 270Non-controlling interests 1,998 1,539Equity 24 9,064 7,919Provisions 26 306 234Non-current financial liabilities 28 5,549 5,710Other non-current liabilities 29 237 186Deferred tax liabilities 8 444 369Total non-current liabilities 6,535 6,499Provisions 26 279 248Trade payables 4,822 4,327Current financial liabilities 28 1,754 1,369Current taxes payable 8 62 57Other current liabilities 29 3,273 2,786Liabilities associated with non-current assets held for sale 10 - 17Total current liabilities 10,189 8,804TOTAL EQUITY AND LIABILITIES 25,788 23,221(1) The 2009 published fi nancial statements have been adjusted following changes made to the fair value of assets and liabilities acquired from Globex (see note 3).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group57
3CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements3.2.4. CONSOLIDATED STATEMENT OF CASH FLOWSfor the years ended 31 December <strong>2010</strong> and 2009€ millions <strong>2010</strong> 2009 adjusted (1)Profit attributable to owners of the parent 550 591Profit attributable to non-controlling interests 193 270Profit for the period 743 861Depreciation, amortisation and provision expense 697 760Unrealised (gains) / losses arising from changes in fair value (3) (4)(Income) / expenses on share-based payment plans 19 15Other non-cash items 61 41Depreciation, amortisation, provisions and other non-cash items 774 811(Gains)/losses on disposal of non-current assets (320) (375)(Gains) / losses due to changes in percentage ownership resulting in the gain or loss of controlor in other investments without control (7) (8)Share of profits of associates (13) (7)Dividends received from associates 10 9Cash flow 1,188 1,292Finance costs, net (excluding changes in fair value and amortisation) 331 342Current and deferred tax expenses 213 202Cash flow before net finance costs and tax 1,731 1,835Income tax paid (262) (163)Change in operating working capital (i) 112 219Net cash from operating activities 1,581 1,891Outflows of acquisitions:• Property, plant and equipment, intangible assets and investment property(937) (802)• Non-current financial assets(71) (36)Inflows of disposals:• Property, plant and equipment, intangible assets and investment property274 239• Non-current financial assets4 23Effect of changes in scope of consolidation resulting in the gain or loss of control or in otherinvestments without control (ii) 21 65Change in loans granted (8) (30)Net cash from investing activities (718) (541)Dividends paid (note 24.4):• To owners of the parent(292) (284)• To non-controlling interests(105) (46)• To holders of deeply-subordinated perpetual bonds (TSSDI)(26) (30)Increase/(decrease) in the parent’s share capital 16 1Other transactions with owners of non-controlling interests (162) (388)Proceeds received from the exercise of stock options 5 1(Purchases)/sales of treasury shares (1) 2Additions to debt 844 1,880Repayments of debt (736) (1,455)Interest paid, net (350) (320)Net cash from financing activities (808) (639)Effect of changes in foreign currency translation adjustments 76 112CHANGE IN CASH AND CASH EQUIVALENTS 132 822Cash and cash equivalents at beginning of period 2,365 1,543• Cash and cash equivalents related to non-current assets held for sale (note 10)(1) -Reported cash and cash equivalents at beginning of period (note 23) 2,364 1,543Cash and cash equivalents at end of period 2,497 2,365• Cash and cash equivalents related to non-current assets held for sale (note 10)- (1)REPORTED CASH AND CASH EQUIVALENTS AT END OF PERIOD (NOTE 23) 2,497 2,364(1) The 2009 comparative information has been adjusted for the retrospective application of the amendment to IAS 7 (note 1.5.2).Cash flows related to discontinued operations are presented in note 10.58 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements3(i) Change in operating working capital€ millions <strong>2010</strong> 2009Inventories of goods (120) 133Property development work in progress 40 87Trade payables 215 (220)Trade receivables 209 38Finance receivables (credit activity) (15) 62Finance payables (credit activity) (17) (49)Other (199) 167Change in operating working capital 112 219(ii) Effect of changes in scope of consolidation€ millions <strong>2010</strong> 2009 adjusted (1)Disposal proceeds, of which: 66 428Cativen 30 -Store assets sub-group 15 -Franprix-Leader Price sub-group 14 -GPA (change in percentage interest) 4 -Super de Boer (2) - 316Vindémia (changes in scope and disposal of production companies) - 36Mercialys (change in percentage interest) - -Acquisition cost, of which: (36) (387)Franprix-Leader Price sub-group (25) (79)Mercialys sub-group (4) -Store assets sub-group (4) -Gdynia - (39)Dilux and Chalin - (26)Caserne de Bonne - (47)Halles des Bords de Loire - (13)GPA (Globex Utilidades acquisition) - (118)GPA (other change in scope) - (6)Cash of subsidiaries acquired or sold during the period, of which: (9) 23GPA (Casas Bahia acquisition) 9 -Franprix-Leader Price sub-group 8 5Venezuelan operations (loss of control) (21) -GPA (Globex Utilidades acquisition) - 10GPA (other change in scope) - (4)<strong>Casino</strong> Limited and EMC Limited - 7Caserne de Bonne - 5Effect of changes in scope of consolidation 21 65(1) The 2009 comparative information has been adjusted for the retrospective application of the amendment to IAS 7 (note 1.5.2).(2) The amount of €316 million includes the sale price for all Super de Boer’s assets and liabilities (€553 million), less an interim dividend paid to the owners of non-controlling interests(€237 million).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group59
3CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements3.2.5. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY€ millions(before appropriation of profit)SharecapitalAdditionalpaid-incapital (2)TreasurysharesRetainedearnings andprofit for theperiodDeeplysubordinatedperpetualbondsAt 1 January 2009 173 3,964 (3) 1,138 600Income and expense recognised directly in equity - - - - -Net profit for the period - - - 591 -Total comprehensive income - - - 591 -Issue of share capital (3) 4 - - -Issue expenses - (4) - - -Purchases and sales of treasury shares - - (1) 5 -Dividends paid (4) - - - (593) -Dividends payable to deeply subordinated perpetual bondholders - - - (18) -Share-based payments - - - 15 -Changes in percentage interest not resulting in the gain or lossof control of subsidiaries (5) - - - - -Changes in percentage interest resulting in the gain or lossof control of subsidiaries (1) - - - - -Other movements - - - 4 -AT 31 DECEMBER 2009 ADJUSTED (1) 169 3,964 (4) 1,142 600Income and expense recognised directly in equity - - - - -Net profit for the period - - - 550 -Total comprehensive income - - - 550 -Issue of share capital (6) - 16 - - -Issue expenses - - - - -Purchases and sales of treasury shares - - 4 (3) -Dividends paid (7) - - - (292) -Dividends payable to deeply subordinated perpetual bondholders - - - (15) -Share-based payments - - - 18 -Changes in percentage interest not resulting in the gain or lossof control of subsidiaries (8) - - - (20) -Changes in percentage interest resulting in the gain or lossof control of subsidiaries (9) - - - (4) -Other movements (10) - - - (8) -AT 31 DECEMBER <strong>2010</strong> 169 3,980 - 1,367 600(1) The 2009 comparative data have been adjusted following changes to the fair value of identifi ed assets and liabilities acquired from Globex (see note 3). The adjustment had an impact of€2 million on non-controlling interests.(2) Additional paid-in capital: premiums on shares issued for cash or in connection with mergers or acquisitions, and statutory reserves.(3) Attributable to the shareholders of <strong>Casino</strong>, Guichard-Perrachon.(4) The amount of €593 million includes €284 million in cash and €308 million in shares. Dividends paid to owners of non-controlling interests in 2009 include €237 million in sale proceeds fromSuper de Boer.(5) The increase in non-controlling interests in 2009 primarily refl ects the Group’s distribution of Mercialys shares and dilution of the Group’s interest in Exito following various share issues.(6) Issued on exercise of stock options (see note 25.2).(7) The amount of €398 million includes €292 million in dividends paid by <strong>Casino</strong>, Guichard-Perrachon in respect of 2009 (see note 24.4) and €106 million related mainly to subsidiaries Mercialys,Big C Thailand, Exito and investment fund Whitehall.(8) The amount of €20 million mainly includes €70 million related to the acquisition of the non-controlling interests in Sendas (see note 32.2) partially offset by GPA’s €59 million dilution gain inGlobex (see note 3.1). The amount of €23 million corresponds to cancellation of the non-controlling interests in Sendas.(9) The amount of €344 million relates mainly to the business combination of Casas Bahia (see note 3.1).(10) The €138 million impact presented in non-controlling interests corresponds to a capital reduction during the period made by investment fund Whitehall, following the disposal of two propertydevelopment sites in Poland in 2009.60 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSConsolidated fi nancial statements3Cash flowhedgesTranslationadjustmentsActuarial gainsand lossesFair value ofassets andliabilities heldin prior periodsAvailable-forsalefinancialassetsEquityattributable toowners of theparent (3)Equityattributable tonon-controllinginterestsTotal equity(10) (95) 6 90 27 5,890 1,141 7,0311 504 (4) - 4 505 23 528- - - - - 591 270 8611 504 (4) - 4 1,096 293 1,389- - - - - 1 - 1- - - - - (4) - (4)- - - - - 4 - 4- - - - - (593) (298) (891)- - - - - (18) - (18)- - - - - 15 - 15- - - - - - 400 400- - - - - - 2 2- - - - (16) (12) - (11)(9) 409 2 90 15 6,379 1,539 7,9198 447 (12) - 2 445 138 583- - - - - 550 193 7438 447 (12) - 2 995 331 1,325- - - - - 16 - 16- - - - - - - -- - - - - 1 - 1- - - - - (292) (106) (398)- - - - - (15) - (15)- - - - - 18 - 18- - - - - (20) 23 3- - - - - (4) 348 344(4) - - - - (11) (138) (149)(5) 856 (10) 90 18 7,066 1,998 9,064Registration Document <strong>2010</strong> | <strong>Casino</strong> Group61
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3.3. NOTES TO THE CONSOLIDATED FINANCIALSTATEMENTSReporting entity<strong>Casino</strong>, Guichard-Perrachon is a French société anonyme listed on compartment A of Euronext Paris. In these notes, theCompany and its subsidiaries are referred to as “the Group” or “<strong>Casino</strong>”. The Company’s registered office is at 1, Esplanadede France, 42008 Saint-Étienne.The consolidated financial statements for the year ended 31 December <strong>2010</strong> reflect the accounting situation of the Company,its subsidiaries and jointly-controlled companies, as well as the Group’s interests in associates.The <strong>2010</strong> consolidated financial statements of <strong>Groupe</strong> <strong>Casino</strong> were approved for publication by the Board of Directors on28 February 2011.NOTE 1. SIGNIFICANT ACCOUNTING POLICIESNote 1.1. Accounting standardsPursuant to European regulation 1606/2002 of 19 July 2002, theconsolidated financial statements have been prepared in accordancewith the standards and interpretations issued by the InternationalAccounting Standards Board (IASB), as adopted by the EuropeanUnion and mandatory as of the reporting date.These standards are available on the European Commission’s website(http://ec.europa.eu/internal_market/accounting/ias/index_en.htm).They include international accounting standards (IAS) and internationalfinancial reporting standards (IFRS), as well as interpretations issuedby the International Financial Reporting Interpretations Committee(IFRIC).The significant accounting policies set out below have been appliedconsistently to all periods presented, after taking account of or with theexception of the new standards and interpretations set out below.Note 1.1.1. New standards, amendmentsand interpretations applicableas of 1 january <strong>2010</strong>The Group has applied the following new standards, amendmentsand interpretations as of 1 January <strong>2010</strong>:■■■■IAS 27 Revised – Consolidated and Separate Financial Statements,mandatory for annual periods beginning on or after 1 July 2009;IFRS 3 Revised – Business Combinations, applicable to businesscombinations completed in the first annual period beginning on orafter 1 July 2009;The revised standard is applicable prospectively. Businesscombinations and changes in percentage interests before 1 January<strong>2010</strong> are therefore not affected and have been accounted inaccordance with IFRS 3 and IAS 27 as described in notes 1.3onwards;Annual improvements to IFRSs (May 2008) – amendment to IFRS 5,relating to the reclassification as “non-current assets held for sale”of all assets and liabilities of a subsidiary held for sale even wherethe Group retains a residual interest. This amendment is applicablefor periods beginning on or after 1 July 2009;Amendment to IAS 39 – Financial Instruments: Recognition andMeasurement “Eligible Hedged Items”, mandatory for annual periodsbeginning on or after 1 July 2009;■■■■IFRIC 17 – Distributions of Non-cash Assets to Owners, mandatoryfor annual periods beginning on or after 1 July 2009;IFRIC 18 – Transfers of Assets from Customers, mandatory forannual periods beginning on or after 1 July 2009;Amendment to IFRS 2 – Share-based Payment: Group Cash-settledShare-based Payment Transactions, mandatory for annual periodsbeginning on or after 1 January <strong>2010</strong>;Annual improvements to IFRSs (16 April 2009), most of whichare mandatory for annual periods beginning on or after 1 January<strong>2010</strong>. The improvement to IFRS 8 eliminating the requirement todisclose assets by operating segment was early adopted by theGroup in 2009.Apart from IFRS 3R and IAS 27R, which are applicable prospectively,these new standards and interpretations had no material effect onthe consolidated financial statements.The impacts of IFRS 3R Business Combinations and IAS 27RConsolidated and Separate Financial Statements are described in thesummary of significant accounting policies (see note 1.3).Note 1.1.2. Standards and interpretationspublished but not yet mandatoryStandards and interpretations adoptedby the European Union on the reporting date■■■■IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments,mandatory for annual periods beginning on or after 1 July <strong>2010</strong>;Amendment to IAS 32 – Classification of Rights Issues, mandatoryfor annual periods beginning on or after 1 February <strong>2010</strong>;Amendment to IFRIC 14 – The Limit on a Defined Benefit Asset,Minimum Funding Requirements and their Interaction, mandatoryfor annual periods beginning on or after 1 January 2011;IAS 24 revised – Related Party Disclosures, mandatory for annualperiods beginning on or after 1 January 2011.The Group has not early adopted any of these new standards orinterpretations. Their application is not expected to have a materialimpact on the consolidated financial statements.62 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Standards and interpretations not adoptedby the European Union on the reporting dateSubject to their final adoption by the European Union, the followingstandards, amendments and interpretations published by the IASB aremandatory for annual periods beginning on or after 1 January 2011(with the exception of the amendments to IAS 12 and IFRS 9).The Group is currently analysing the potential impacts of their firsttimeadoption.■■■■IFRS 9 – Financial instruments: Classification and Measurement,mandatory for annual periods beginning on or after 1 January2013;Amendment to IAS 12 – Deferred Tax: Recovery of UnderlyingAssets, mandatory for annual periods beginning on or after1 January 2012;Amendment to IFRS 7 – Financial Instruments Disclosure, mandatoryfor annual periods beginning on or after 1 July 2011;Annual improvements to IFRSs (6 May <strong>2010</strong>), applicable to theGroup as of 1 January 2011.Note 1.2. Basis of preparation and presentationNote 1.2.1. Accounting conventionThe consolidated financial statements have been prepared using thehistorical cost convention, with the exception of the following:■■land held by companies in the “centralised” scope (historical scopein France) and <strong>Mo</strong>noprix, as well as the warehouse land held byFranprix-Leader Price, for which the fair value at 1 January 2004has been used as deemed cost. The resulting revaluation gainshave been recognised in equity;derivative financial instruments and financial assets available forsale, which are measured at fair value. The carrying amounts ofassets and liabilities hedged by a fair value hedge, which wouldotherwise be measured at cost, are adjusted for changes in thefair value attributable to the hedged risk.The consolidated financial statements are presented in millions of euros.The figures in the tables have been rounded to the nearest millioneuros and include individually rounded data. Consequently, thetotals and sub-totals may not correspond exactly to the sum of thereported amounts.The consolidated financial statements for the year ended 31 December2008 are incorporated by reference.Note 1.2.2. Use of estimatesThe preparation of consolidated financial statements requires theuse of estimates and assumptions that affect the reported amountof certain assets and liabilities and income and expenses, as well asthe disclosures made in certain notes to the consolidated financialstatements. Due to the inherent uncertainty of assumptions, actualresults may differ from the estimates. Estimates and assessments arereviewed at regular intervals and adjusted where necessary to takeinto account past experience and any relevant economic factors.The main estimates and assumptions are based on the informationavailable when the financial statements are drawn up and concernthe following:■■■commercial cooperation fees (see note 1.5.24);impairment of doubtful receivables (notes 19, 21 and 22);impairment of non-current assets and goodwill (see notes 1.5.12and 16);■■■■■■available-for-sale financial assets (see note 19.1);fair values of investment property disclosed in the notes (see note15), as well as the accounting treatment of investment propertyacquisitions. For each transaction, the Group analyses the existingassets and operations to determine whether the acquisition shouldbe treated as a business combination or a separately acquiredasset;deferred taxes (see notes 1.5.31 and 8);non-current assets (or groups of assets) held for sale (see note 10);put options granted to owners of non-controlling interests andcontingent consideration in business combinations (see notes1.5.20 and 28);provisions for liabilities and other operating provisions (see notes1.5.19.2 and 26).Additional disclosures on the sensitivity of goodwill, provisions andput option values are provided in notes 16, 26 and 28.Note 1.3. Impact of accounting changesThe financial information previously published has been adjustedfor the impact of the revised standard IAS 27 – Consolidated andSeparate Financial Statements, which introduced an amendment toIAS 7 – Statement of Cash Flows.The revised versions of IFRS 3 - Business Combinations and IAS27 - Consolidated and Separate Financial Statements are applicableprospectively for financial periods starting on or after 1 January<strong>2010</strong>. Business combinations completed before 1 January <strong>2010</strong> aretherefore not affected and are accounted for using the same methodas that used to prepare the consolidated financial statements at31 December 2009.The two revisions introduce significant changes to the accountingtreatment of business combinations and changes in percentageinterests in subsidiaries with or without loss of control. The mainchanges affecting business combinations involve the valuation ofnon-controlling interests (previously called “minority interests”),acquisition-related expenses, initial and subsequent measurementof contingent consideration and business combinations achieved instages. The main changes introduced by IAS 27R involve accountingfor partial disposals resulting in loss of control and changes inpercentage interests without loss of control. These changes aredescribed in more detail in note 1.5.2 on business combinations.IAS 27R introduces an amendment to IAS 7 – Statement of CashFlows that is applicable retrospectively. The statement of cash flowsat 31 December 2009 has therefore been adjusted accordingly (seenote 1.5.2).The Group’s accounting policies have been updated to include allthese changes.Note 1.4. Positions adopted by the Groupfor accounting issues not specificallydealt with in IFRSsIn the absence of standards or interpretations applicable to conditionalor unconditional put and call options on non-controlling interests (seenote 1.5.20), management has used its judgment to define and applythe most appropriate accounting treatment.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group63
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 1.5. Significant accounting policiesNote 1.5.1. Basis of consolidationand consolidation methodsThe consolidated financial statements include the financial statementsof all material subsidiaries, joint ventures and associates over whichthe parent company exercises control, joint control or significantinfluence, either directly or indirectly.SubsidiariesSubsidiaries are companies controlled by the Group. Control is thepower to govern the financial and operating policies of an entity soas to obtain benefits from its activities.Control is presumed to exist when the Group directly or indirectlyholds more than half of the voting power of an entity. The consolidatedfinancial statements include the financial statements of subsidiariesfrom the date when control is acquired to the date at which theGroup no longer exercises control. All controlled companies are fullyconsolidated in the Group’s balance sheet, whatever the percentageinterest held.Joint venturesJoint ventures are companies in which the Group shares control ofan economic activity under a contractual agreement. Companiesthat are controlled jointly by the Group are consolidated by theproportionate method.AssociatesAssociates are companies in which the Group exercises significantinfluence over financial and operational policies without having control.They are accounted for by the equity method. Goodwill related to theseentities is included in the carrying amount of the investment.For all companies other than special purpose entities, control isdetermined based on the percentage of existing and potential votingrights currently exercisable.The Group may own share warrants, share call options, debt or equityinstruments that are convertible into ordinary shares or other similarinstruments that have the potential, if exercised or converted, to givethe Group voting power or reduce another party’s voting power overthe financial and operational policies of an entity (potential voting rights).The existence and effect of potential voting rights that are currentlyexercisable or convertible are considered when assessing whether theGroup has the power to govern the financial and operating policiesof an entity. Potential voting rights are not currently exercisable orconvertible when, for example, they cannot be exercised or converteduntil a future date or until the occurrence of a future event.Control of special purpose entities is determined by reference to theGroup’s share of the risks and rewards of ownership of the entity.Special purpose entities are consolidated when, in substance:■■■the relationship between the special purpose entity and the Groupindicates that the Group controls the special purpose entity;the special purpose entity conducts its business activities to meetthe Group’s specific operating needs in such a way that the Groupbenefits from these activities;the Group has decision-making powers to obtain the majorityof the benefits of the special purpose entity’s activities or is ableto obtain the majority of these benefits through an “auto-pilot”mechanism;■■by having a right to the majority of the special purpose entity’sbenefits, the Group is exposed to the special purpose entity’sbusiness risks;the Group retains the majority of residual or ownership risks relatedto the special purpose entity’s property or its assets in order tobenefit from its activities.Note 1.5.2. Business combinationsIFRS 3R introduces changes to the acquisition method of accountingfor business combinations as of 1 January <strong>2010</strong>. The considerationtransferred in a business combination is measured at fair value,which is the sum of the acquisition-date fair values of the assetstransferred by the acquirer, the liabilities incurred by the acquirer toformer owners of the acquiree and the equity interests issued bythe acquirer. Identifiable assets acquired and liabilities assumed aremeasured at their acquisition-date fair values. Acquisition-relatedcosts are accounted for as expenses in the periods in which they areincurred under “Other operating expense”.Any excess of the consideration transferred over the fair value ofthe identifiable assets acquired and liabilities assumed is recognisedas goodwill. For each business combination, the Group may electto measure any non-controlling interest in the acquiree either atthe non-controlling interest’s proportionate share of the acquiree’sidentifiable net assets or at fair value. Under the latter method (calledthe full goodwill method), goodwill is recognised on the full amount ofthe identifiable assets acquired and liabilities assumed.Business combinations completed prior to 1 January <strong>2010</strong> wereaccounted for using the partial goodwill method, as required by thestandards applicable at the time.In the case of a business combination achieved in stages, the equityinterest previously held by the Group is remeasured at its acquisitiondatefair value and any resulting gain or loss is recognised in profit orloss under “Other operating income” or “Other operating expense”.Prior to 1 January <strong>2010</strong>, gains or losses were recognised throughequity.The provisional amounts recognised on the acquisition date may beadjusted retrospectively during a 12-month measurement period if newinformation is obtained about facts and circumstances that existedas of the acquisition date. Goodwill could not be adjusted after themeasurement period. The subsequent acquisition of non-controllinginterests does not give rise to the recognition of additional goodwill.Any contingent consideration is included in the cost of the acquisitionat its acquisition-date fair value even if it is not probable that an outflowof resources embodying economic benefits will be required to settlethe obligation. Subsequent changes in the fair value of contingentconsideration due to facts and circumstances that existed as of theacquisition date are recorded by adjusting goodwill if they occur duringthe measurement period or directly in profit or loss for the periodunder “Other operating income” or “Other operating expense” if theyarise after the measurement period, unless the obligation is settledin equity instruments in which case the contingent consideration isnot remeasured.IFRS 3R also requires the recognition through profit or loss of deferredtax assets not recognised on the acquisition date or during themeasurement period.64 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Summary of changes: IAS 27RUnder the revised version of IAS 27, consolidated financial statementsare the financial statements of a group presented as those of a singleeconomic entity with two categories of owner: the owners of the parent(<strong>Casino</strong>, Guichard-Perrachon shareholders) and the owners of thenon-controlling interests in its subsidiaries. A non-controlling interestis the equity in a subsidiary not attributable, directly or indirectly, toa parent. As a result of this new approach, transactions with theowners of non-controlling interests resulting in a change in the parentcompany’s percentage interest without loss of control only affect equityas there is no change of control of the economic entity.Accordingly, effective from 1 January <strong>2010</strong>, in the case of anacquisition of an additional interest in a fully consolidated subsidiary,the Group recognises the difference between the acquisition costand the carrying amount of the non-controlling interests as a changein equity attributable to owners of the parent. Transaction costs arealso recognised in equity. The same treatment applies to disposalswithout loss of control.In the case of disposals of controlling interests involving a loss ofcontrol, the Group derecognises the whole of the ownership interestand recognises any investment retained in the former subsidiary atits fair value. The gain or loss on the entire derecognised interest(interest sold and interest retained) is recognised in profit or lossunder “Other operating income” or “Other operating expense”, whichamounts to remeasuring the investment retained at fair value throughprofit or loss.Impact of IAS 27R on the statementof cash fl ows (IAS 7)IAS 27R has resulted in an amendment to IAS 7 – Statement of Cashflows. Cash flows arising from the acquisition or loss of control of asubsidiary are classified as cash flows from investing activities whilecash flows arising from changes in ownership interests in a fullyconsolidated entity that do not result in a loss of control (includingincreases in percentage interest) are classified as cash flows fromfinancing activities.In prior periods, cash flows arising from changes in ownership interestwithout loss of control were classified as cash flows from investingactivities. As this amendment is applicable retrospectively, the 2009cash flow figures have been adjusted accordingly.The amendment has no impact on transactions with associates orjoint ventures, which continue to be classified as cash flows frominvesting activities.Note 1.5.3. Closing dateWith the exception of a few small subsidiaries and Cdiscount, whichclose their accounts at 31 March, Group companies all have a31 December year-end.Note 1.5.4. Consolidation of subsidiarieswhose business is dissimilarfrom that of the Group as a wholeThe financial statements of Banque du <strong>Groupe</strong> <strong>Casino</strong> are preparedin accordance with accounting standards applicable to financialinstitutions. The financial statements of <strong>Casino</strong> Ré are preparedin accordance with accounting standards applicable to insurancecompanies. In the consolidated financial statements, their assets,liabilities, income and expenses are classified based on non-industryspecificIASs and IFRSs, with customer loans included in “Tradereceivables”, refinancing of customer loans in “Other current liabilities”and banking revenue in “Revenue”.Note 1.5.5. Foreign currency translationThe consolidated financial statements are presented in euros,the Group’s functional currency. It is the currency of the principaleconomic environment in which <strong>Groupe</strong> <strong>Casino</strong> operates. Each <strong>Groupe</strong>ntity determines its own functional currency and all their financialtransactions are measured in that currency.The financial statements of subsidiaries that use a different functionalcurrency from that of the Group are translated according to theclosing rate method:■■assets and liabilities, including goodwill and fair value adjustments,are translated into euros at the closing rate, corresponding to thespot exchange rate at the balance sheet date;income statement and cash flow items are translated into eurosusing the average rate of the period unless significant variancesoccur.The resulting exchange differences are recognised directly within aseparate component of equity. When a foreign operation is disposedof, the cumulative amount of the exchange differences in equity relatingto that operation is reclassified to profit or loss.Foreign currency transactions are translated into euros using theexchange rate at the transaction date. <strong>Mo</strong>netary assets and liabilitiesdenominated in foreign currencies are translated at the closing rateand the resulting exchange differences are recognised in the incomestatement under “Exchange gains and losses”. Non-monetary assetsand liabilities denominated in foreign currencies are translated at theexchange rate at the transaction date.Exchange differences arising on the translation of a net investmentin a foreign operation are recognised within a separate componentof equity and reclassified to profit or loss on disposal of the netinvestment.Exchange differences arising on the translation of borrowings hedginga net investment denominated in a foreign currency or on permanentadvances made to subsidiaries are recognised in equity and thenreclassified in profit or loss on disposal of the net investment.Note 1.5.6. Goodwill and intangible assetsIntangible items are recognised as intangible assets when they meetthe following criteria:■■■the item is identifiable and separable;the Group has the capacity to control future economic benefitsfrom the item;the item will generate future economic benefits.Intangible assets acquired in a business combination are recognisedas goodwill when they do not meet these criteria.Note 1.5.6.1. GoodwillAt the acquisition date, goodwill is measured in accordance withnote 1.5.2. Goodwill is allocated to the cash generating unit orgroups of cash-generating units that benefit from the synergies of thecombination, based on the level at which the return on investmentis monitored for internal management purposes. Goodwill is notamortised but is tested for impairment at each year-end, or wheneverthere is an indication that it may be impaired. Impairment losses ongoodwill are not reversible. The method used by the Group to testgoodwill for impairment is described in the note entitled “Impairmentof non-current assets”. Negative goodwill is recognised directly in theincome statement for the period of the business combination, once theidentification and measurement of the acquiree’s identifiable assets,liabilities and contingent liabilities have been verified.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group65
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 1.5.6.2. Intangible assetsIntangible assets acquired separately by the Group are measured atcost and those acquired in business combinations are measured atfair value. Intangible assets consist mainly of purchased software,software developed for internal use, trademarks, patents and leasepremiums. Trademarks that are created and developed internally arenot recognised on the balance sheet. Intangible assets are amortisedon a straight-line basis over their estimated useful lives. Developmentcosts are amortised over three years and software over three to tenyears. Intangible assets with an indefinite useful life (including leasepremiums and purchased trademarks) are not amortised, but are testedfor impairment at each year-end or whenever there is an indicationthat their carrying amount may not be recovered.An intangible asset is derecognised on disposal or when no futureeconomic benefits are expected from its use or disposal. The gain orloss arising from the derecognition of an intangible asset is determinedas the difference between the net sale proceeds, if any, and thecarrying amount of the asset. It is recognised in profit or loss (otheroperating income or expense) when the asset is derecognised.Residual values, useful lives and amortisation methods are reviewedat each year-end and revised prospectively if necessary.Note 1.5.7. Property, plant and equipmentProperty, plant and equipment are measured at cost less accumulateddepreciation and any accumulated impairment losses.Subsequent expenditures are recognised in assets if they satisfythe recognition criteria in IAS 16. The Group examines these criteriabefore making expenditure.Land is not depreciated. All other items of property, plant andequipment are depreciated on a straight-line basis over their expecteduseful lives without taking into account any residual value. The mainuseful lives are as follows:Asset categoryDepreciationperiod(in years)Land -Buildings (shell) 40Roof waterproofing and shell fire protectionsystems 15Land improvements 10 to 20Building fixtures and fittings 5 to 10Technical installations, machinery andequipment 5 to 12Computer equipment 3 to 5“Roofing and shell fire protection systems” are classified as separateitems of property, plant and equipment only when they are installedduring major renovation projects. In all other cases, they are part ofthe building.An item of property, plant and equipment is derecognised on disposalor when no future economic benefits are expected from its use ordisposal. The gain or loss arising from the derecognition of an asset isdetermined as the difference between the net sale proceeds, if any, andthe carrying amount of the asset. It is recognised in profit or loss (otheroperating income or expense) when the asset is derecognised.Residual values, useful lives and depreciation methods are reviewedat each year-end and revised prospectively if necessary.Note 1.5.8. Finance leasesLeases that transfer substantially all the risks and rewards of ownershipto the lessee are classified as finance leases. They are recognisedin the consolidated balance sheet at the inception of the lease atthe fair value of the leased asset or, if lower, the present value of theminimum lease payments.Leased assets are accounted for as if they had been acquired throughdebt. They are recognised as assets (according to their nature) witha corresponding amount recognised in financial liabilities.Leased assets are depreciated over their expected useful life in thesame way as other assets in the same category, or over the leaseterm if shorter, unless the lease contains a purchase option and it isreasonably certain that the option will be exercised.Finance lease obligations are discounted and recognised in the balancesheet as a financial liability. Payments made under operating leasesare expensed as incurred.Note 1.5.9. Borrowing CostsBorrowing costs that are directly attributable to the acquisition,construction or production of an asset that necessarily takes asubstantial period of time to get ready for its intended use or sale(typically more than six months) are capitalised in the cost of thatasset. All other borrowing costs are recognised as an expense in theperiod in which they are incurred. Borrowing costs are interest andother costs incurred by an entity in connection with the borrowingof funds.The Group capitalises borrowing costs for all qualifying assets whoseconstruction commencement date is on or after 1 January 2009. TheGroup continues to expense borrowing costs as incurred for projectswhose commencement date was before 1 January 2009.Note 1.5.10. Investment propertyInvestment property is property held to earn rentals or for capitalappreciation or both. It is recognised and measured in accordancewith IAS 40.The shopping centres owned by the Group are classified as investmentproperty.Subsequent to initial recognition, they are measured at historical costless accumulated depreciation and any accumulated impairmentlosses. Their fair value is disclosed in the notes to the consolidatedfinancial statements. Investment property is depreciated over thesame useful life and according to the same rules as owner-occupiedproperty.The shopping malls owned by Mercialys are valued on an assetby-assetbasis by independent appraisers in accordance with RICS(Royal Institute of Chartered Surveyors) standards, using the openmarket value appraisal methods recommended in the 3 rd edition of theFrench Property Appraisal Charter (Charte de l’expertise en évaluationimmobilière) of June 2006 and the 2000 report of the combinedworkgroup set up by the French securities regulator (COB nowrenamed AMF) and the French accounting board (CNC) on propertyasset valuations for listed companies. One third of Mercialys’ assetsare re-appraised each year by rotation and the existing appraisalsfor the other two thirds are updated. In accordance with the COB/CNC 2000 report, two methods were used to determine the marketvalue of each asset:■the income capitalisation (IC) method consists of assessing therental revenue generated by the property and multiplying thisincome by the market yield on comparable properties (selling space,66 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3■configuration, competition, ownership method, rental and extensionpotential and comparability with recent transactions), taking intoaccount any difference between actual and market rents for theproperty concerned. Any non-billable expenses and works are thendeducted from this amount;the discounted cash flows (DCF) method consists of discountingfuture revenues from the asset and takes into account, year afteryear, forecast rent adjustments, vacancy rates and other parameterssuch as marketing periods and capital expenditure to be financedby the lessor.The discount rate used is the risk-free market rate (10-year OAT TECfor France) plus a property market risk and liquidity premium, plus apremium for obsolescence and rental risk if applicable.Small assets are also valued by comparison to transactions in similarassets.Note 1.5.11. Cost of f ixed assetsThe cost of fixed assets corresponds to their purchase cost plustransaction expenses including tax.Note 1.5.12. Impairment of non-current assetsThe procedure to be followed to ensure that the carrying amount ofassets does not exceed their recoverable amount (recovered by useor sale) is defined in IAS 36.Goodwill and intangible assets with an indefinite useful life are testedfor impairment at least once a year. Other assets are tested wheneverthere is an indication that they may be impaired.Note 1.5.12.1. Cash Generating Units (CGUs)A cash-generating unit is the smallest identifiable group of assetsthat generates cash inflows that are largely independent of the cashinflows from other assets or groups of assets.The Group has defined cash-generating units as follows:■■for hypermarkets, supermarkets and discount stores, each storeis treated as a separate CGU;for other networks, each network represents a separate CGU.Note 1.5.12.2. Impairment indicatorsApart from the external sources of data monitored by the Group(economic environment, market value of the assets, etc.), theimpairment indicators used are based on the nature of the assets:■■■land and buildings: loss of rent or early termination of a leasecontract;fixed assets related to the business (assets of the cash generatingunit): ratio of net book value of the assets related to a store dividedby sales (including VAT), higher than a defined level determinedseparately for each store category;assets allocated to administrative activities (headquarters andwarehouses): the closing of a site or the obsolescence of equipmentused at the site.Note 1.5.12.3. Recoverable amountThe recoverable amount of an asset is the higher of its fair value lesscosts to sell and its value in use. It is generally determined separatelyfor each asset. When this is not possible, the recoverable amount ofthe group of CGUs to which the asset belongs is used.Fair value less costs to sell is the amount obtainable from the saleof an asset in an arm’s length transaction between knowledgeable,willing parties, less the costs of disposal. In the retailing industry, fairvalue less costs to sell is generally determined on the basis of a salesor EBITDA multiple.Value in use is the present value of the future cash flows expectedto be derived from continuing use of an asset and from its ultimatedisposal. It is determined internally or by external experts on thebasis of cash flow projections contained in business plans or budgetscovering no more than five years. Cash flows beyond the projectionperiod are estimated by applying a constant or decreasing growthrate. The discount rate corresponds to long-term after-tax marketrates reflecting market estimates of the time value of money and thespecific risks associated with the asset. The terminal value is generallydetermined on the basis of a multiple of final year EBITDA.For goodwill impairment testing purposes, the recoverable amounts ofCGUs or groups of CGUs are determined annually at the year end.Note 1.5.12.4. ImpairmentAn impairment loss is recognised when the carrying amount of anasset or the CGU to which it belongs is greater than its recoverableamount. Impairment losses are recorded as an expense under “Otheroperating income and expense”.Impairment losses recognised in a prior period are reversed if, andonly if, there has been a change in the estimates used to determinethe asset’s recoverable amount since the last impairment loss wasrecognised. However, the increased carrying amount of an assetattributable to a reversal of an impairment loss may not exceed thecarrying amount that would have been determined had no impairmentloss been recognised for the asset in prior years. Impairment losseson goodwill cannot be reversed.Note 1.5.13. Financial assetsNote 1.5.13.1. Defi nitionsFinancial assets are classified into four categories according to theirtype and intended holding period, as follows:■■■■held-to-maturity investments;financial assets at fair value through profit or loss;loans and receivables;available-for-sale financial assets.Financial assets are classified as current if they are due in less thanone year and non-current if they are due in more than one year.Note 1.5.13.2. Recognition and measurementof fi nancial assetsWith the exception of financial assets at fair value through profit orloss, all financial assets are initially recognised at cost, correspondingto the fair value of the consideration paid plus transaction costs.Note 1.5.13.3. Held-to-maturity investmentsHeld-to-maturity investments are fixed income securities that theGroup has the positive intention and ability to hold to maturity. Theyare measured at amortised cost using the effective interest method.Amortised cost is calculated by adding or deducting any premium ordiscount over the remaining life of the securities. Gains and losses arerecognised in the income statement when the assets are derecognisedor there is objective evidence of impairment, and also through theamortisation process.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group67
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 1.5.1<strong>3.4</strong>. Financial assets at fair valuethrough profi t or lossFinancial assets at fair value through profit or loss are financial assetsclassified as held for trading, i.e. assets that are acquired principallyfor the purpose of selling them in the near term. They are measuredat fair value and gains and losses arising from remeasurement at fairvalue are recognised in the income statement. Some assets maybe designated at inception as financial assets at fair value throughprofit or loss.These financial instruments mainly comprise units in eligible mutualfunds classified as current assets under cash equivalents.Note 1.5.13.5. Loans and receivablesLoans and receivables are financial assets issued or acquired by theGroup in exchange for cash, goods or services that are paid, deliveredor rendered to a debtor. They are measured at amortised cost usingthe effective interest method. Long-term loans and receivables thatare not interest-bearing or that bear interest at a below-market rate arediscounted when the amounts involved are material. Any impairmentlosses are recognised in the income statement.Trade receivables are recognised and measured at the originalinvoice amount net of any accumulated impairment losses. They arederecognised when all the related risks and rewards are transferredto a third party.Note 1.5.13.6. Available-for-sale fi nancial assetsAvailable-for-sale financial assets correspond to financial assetsnot meeting the criteria for classification in any of the other threecategories. They are measured at fair value. Gains and losses arisingfrom remeasurement at fair value are accumulated in equity untilthe asset is derecognised. When they are derecognised or when adecline in the fair value of an available-for-sale financial asset hasbeen recognised directly in equity and there is objective evidencethat the impairment is other than temporary, the cumulative loss thathad been recognised directly in equity is removed from equity andrecognised in the income statement.Impairment losses on equity instruments are irreversible and anysubsequent increases in fair value are recognised directly in equity.Impairment losses on debt instruments are reversed through theincome statement in the event of a subsequent increase in fair value,provided that the amount reversed does not exceed the impairmentlosses previously recognised in the income statement.This category mainly comprises investments in non-consolidatedcompanies. Available-for-sale financial assets are classified undernon-current financial assets.Note 1.5.13.7. Cash and cash equivalentsIn accordance with IAS 7, cash and cash equivalents consist of cashand investments that are short-term, highly liquid, readily convertibleto known amounts of cash and are subject to an insignificant risk ofchanges in value.Note 1.5.13.8. DerecognitionFinancial assets are derecognised in the following two cases:■■the contractual rights to the cash flows from the financial assetexpire; or,the contractual rights are transferred and the transfer qualifies forderecognition,- when substantially all the risks and rewards of ownership of thefinancial asset are transferred, the asset is derecognised in full,- when substantially all the risks and rewards of ownership areretained by the Group, the financial asset continues to berecognised in the balance sheet for its total amount.The Group has set up receivables discounting programmes withits banks. The Group considers that there is no risk of discountedreceivables being cancelled by credit notes or being set off againstliabilities. The receivables discounted under the programmes mainlyconcern services invoiced by the Group under contracts with suppliersthat reflect the volume of business made with the suppliers concerned.The other risks and rewards associated with the receivables havebeen transferred to the banks. Consequently, as substantially all therisks and rewards have been transferred at the balance sheet date,the receivables are derecognised.Note 1.5.14. Financial liabilitiesNote 1.5.14.1. Defi nitionsFinancial liabilities are classified into two categories as follows:■■borrowings recognised at amortised cost;financial liabilities at fair value through profit or loss.Financial liabilities are classified as current if they are due in less thanone year and non-current if they are due in more than one year.Note 1.5.14.2. Recognition and measurementof fi nancial liabilitiesFinancial liabilities are measured according to their category underIAS 39.Note 1.5.14.2.1. Financial liabilities recognisedat amortised costBorrowings and other financial liabilities are usually recognised atamortised cost using the effective interest rate method, except forinstruments qualifying for hedge accounting.Debt issue costs and issue and redemption premiums are included inthe cost of borrowings and financial debt. They are added or deductedfrom borrowings, and are amortised using an actuarial method.Note 1.5.14.2.2. Financial liabilities at fair valuethrough profit or lossThese are financial liabilities intended to be held on a short-term basisfor trading purposes. They are measured at fair value and gains andlosses arising from remeasurement at fair value are recognised in theincome statement.Note 1.5.14.3. Recognition and measurement ofderivative instrumentsNote 1.5.14.3.1. Derivative financial instruments thatqualify for hedge accounting:recognition and presentationAll derivative instruments (swaps, collars, floors and options) arerecognised in the balance sheet and measured at fair value.In accordance with IAS 39, hedge accounting is applied to:■fair value hedges (for example, swaps to convert fixed rate debtto floating rate). In this case, the debt is measured at fair value,with gains and losses arising from remeasurement at fair valuerecognised in the income statement on a symmetrical basis withthe gain or loss on the derivative. If the hedge is entirely effective,the loss or gain on the hedged debt is offset by the gain or losson the derivative;68 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3■cash flow hedges (for example, swaps to convert floating rate debtto fixed rate). For these hedges, the effective portion of the change inthe fair value of the derivative is recognised in equity and reclassifiedinto the income statement on a symmetrical basis with the hedgedcash flows and under the same line item as the hedged item (i.e.trading profit for hedges of operating cash flows and net financialincome or expense for other hedges). The ineffective portion isrecognised directly in the income statement.Hedge accounting may only be used if:■■the hedging relationship is clearly defined and documented atinception; andthe effectiveness of the hedge can be demonstrated at inceptionand throughout its life.Note 1.5.14.3.2. Derivative financial instruments thatdo not qualify for hedge accounting:recognition and presentationWhen a derivative financial instrument does not qualify or no longerqualifies for hedge accounting, changes in fair value are recogniseddirectly in profit or loss for the period under “Other financial incomeand expense”.Note 1.5.15. Fair value of f inancial instrumentsFair value measurements are classified using a fair value hierarchythat reflects the significance of the inputs used in making themeasurements. The fair value hierarchy has the following levels:■■■quoted prices (unadjusted) in active markets for identical assetsor liabilities (Level 1);inputs other than quoted prices included within Level 1 that areobservable either directly (i.e. as prices) or indirectly (i.e. derivedfrom prices) (Level 2);inputs for the asset or liability that are not based on observablemarket data (unobservable inputs) (Level 3).The fair value of financial instruments traded in an active market isthe quoted price on the balance sheet date. A market is consideredas active if quoted prices are readily and regularly available from anexchange, dealer, broker, industry group, pricing service or regulatoryagency, and those prices represent actual and regularly occurringmarket transactions on an arm’s length basis. These instrumentsare classified as Level 1.The fair value of financial instruments which are not quoted in an activemarket (such as over-the-counter derivatives) is determined usingvaluation techniques. These techniques use observable market datawherever possible and make little use of the Group’s own estimates.If all the inputs required to calculate fair value are observable, theinstrument is classified as Level 2.If one or more significant inputs are not based on observable marketdata, the instrument is classified as Level 3.Note 1.5.16. InventoriesInventories are measured at the lower of cost and net realisable value,determined by the first-in first-out (FIFO) method.The cost of inventories comprises all costs of purchase, costs ofconversion and other costs incurred in bringing inventories to theirpresent location and condition. Accordingly, logistics costs are includedin the carrying amount and supplier discounts recognised in “Cost ofgoods sold” are deducted.The cost of inventory includes gains or losses on cash flow hedgesof future inventory purchases initially recognised in equity.Net realisable value is the estimated selling price in the ordinary courseof business less the estimated costs of completion and the estimatedcosts necessary to make the sale.Property development work in progress is recognised in inventories.Note 1.5.17. Non-current assets held for saleand discontinued operationsNon-current assets classified as held for sale are measured at thelower of their carrying amount and their fair value less costs to sell.A non-current asset (or disposal group) is classified as held for sale ifits carrying amount is recovered principally through a sale transactionrather than through continuing use. For this condition to be met, theasset (or disposal group) must be available for immediate sale in itspresent condition and its sale must be highly probable. For the saleto be highly probable, management must be committed to a plan tosell the asset (or disposal group), and the sale should be expectedto qualify for recognition as a completed sale within one year fromthe date of classification.In the consolidated income statement for the current and prior periods,the post-tax results of discontinued operations and any gain or loss onsale are presented as a single amount on a separate line item belowthe results of continuing operations, even where the Group retains aminority interest in the subsidiary after its sale.Property, plant and equipment and intangible assets classified as heldfor sale are no longer depreciated or amortised.Note 1.5.18. EquityNote 1.5.18.1. Equity instruments and hybridinstrumentsThe classification of instruments issued by the Group in equity or debtdepends on each instrument’s specific characteristics. An instrument isdeemed to be an equity instrument when the following two conditionsare met: (i) the instrument does not contain a contractual obligationto deliver cash or another financial asset to another entity, or toexchange financial assets or financial liabilities with another entityunder conditions that are potentially unfavourable to the entity; and (ii)in the case of a contract that will or may be settled in the entity’s ownequity instruments, it is either a non-derivative that does not include acontractual obligation to deliver a variable number of the Company’sown equity instruments, or it is a derivative that will be settled by theexchange of a fixed amount of cash or another financial asset for afixed number of the entity’s own equity instruments.Accordingly, instruments that are redeemable at the Group’s discretionand for which the remuneration depends on the payment of a dividendare classified in equity.Note 1.5.18.2. Equity transaction costsExternal and qualifying internal costs directly attributable to equitytransactions or transactions involving equity instruments are recordedas a deduction from equity, net of tax. All other transaction costs arerecognised as an expense.Note 1.5.18.3. Treasury shares<strong>Casino</strong>, Guichard-Perrachon shares purchased by the Group arededucted from equity at cost. The proceeds from sales of treasuryshares are credited to equity with the result that any disposal gainsor losses, net of the related tax effect, have no impact in the incomestatement for the period.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group69
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 1.5.18.4. Options on treasury sharesOptions on treasury shares are treated as derivative instruments, equityinstruments or financial liabilities depending on their characteristics.Options classified as derivatives are measured at fair value throughprofit or loss. Options classified as equity instruments are measured inequity at their initial amount and changes in value are not recognised.The accounting treatment of financial liabilities is described in note1.5.14.Note 1.5.18.5. Share-based paymentThe management and certain employees of the Group receive stockoptions and share grants.The fair value of the options at the grant date is recognised in employeebenefits expense over the option vesting period. The fair value ofoptions is determined using the Black & Scholes option pricing model,based on the plan attributes, market data (including the market priceof the underlying shares, share price volatility and the risk-free interestrate) at the grant date and assumptions concerning the probability ofgrantees remaining with the Group until the options vest.The fair value of share grants is also determined on the basis ofthe plan attributes, market data at the grant date and assumptionsconcerning the probability of grantees remaining with the Group untilthe shares vest. If there are no vesting conditions attached to theshare grant plan, the expense is recognised in full when the plan isset up. Otherwise the expense is deferred over the vesting period asand when the vesting conditions are met.Note 1.5.19. ProvisionsNote 1.5.19.1. Post-employment and other long-termemployee benefi tsGroup companies provide their employees with various employeebenefit plans depending on local laws and practice.Under defined contribution plans, the Group pays fixed contributionsinto a fund and has no obligation to pay further contributions if the funddoes not hold sufficient assets to pay all employee benefits relatingto employee service in the current and prior periods. Contributionsto these plans are expensed as incurred.Under defined benefit plans, the Group’s obligation is measured usingthe projected unit credit method based on the agreements effectivein each entity. Under this method, each period of service gives riseto an additional unit of benefit entitlement and each unit is measuredseparately to build up the final obligation. The final obligation is thendiscounted. The actuarial assumptions used to measure the obligationvary according to the economic conditions prevailing in the relevantcountry. The obligation is measured by independent actuaries annuallyfor the most significant plans and for the employment terminationbenefit, and regularly for all other plans. Assumptions include expectedrate of future salary increases, estimated average working life ofemployees, life expectancy and staff turnover rates.Actuarial gains and losses arise from the effects of changes in actuarialassumptions and experience adjustments (differences between resultsbased on previous actuarial assumptions and what has actuallyoccurred). All gains and losses arising on defined benefit plans arerecognised immediately in equity.Past service cost is the increase in the obligation resulting from theintroduction of, or changes to, benefit plans. It is recognised as anexpense on a straight-line basis over the average period until thebenefits become vested, or immediately if the benefits are alreadyvested.Expenses related to defined benefit plans are recognised in operatingexpenses (service cost) and in “Other financial income and expense”(interest cost and expected return on plan assets).Curtailments, settlements and past service costs are recognisedin operating expenses or in “Other financial income and expense”depending on their nature. The liability recognised in the balance sheetis measured as the net present value of the obligation, less the fairvalue of plan assets and unrecognised past service cost.Note 1.5.19.2. Other provisionsA provision is recorded when the Group has a present obligation(legal or constructive) as a result of a past event, the amount ofthe obligation can be reliably estimated and it is probable that anoutflow of resources embodying economic benefits will be requiredto settle the obligation. Provisions are discounted when the relatedadjustment is material.In accordance with the above principle, a provision is recorded forthe cost of repairing equipment sold with a warranty. The provisionrepresents the estimated cost of repairs to be performed during thewarranty period, as estimated on the basis of actual costs incurredin prior years. Each year, part of the provision is reversed to offsetthe actual repair costs recognised in expenses.A provision for restructuring is recorded when the Group hasa constructive obligation to restructure. This is the case whenmanagement has drawn up a detailed, formal plan and has raised avalid expectation in those affected that it will carry out the restructuringby announcing its main features to them before the period-end.Other provisions concern specifically identified liabilities andcharges.Contingent liabilities correspond to possible obligations that arisefrom past events and whose existence will be confirmed only bythe occurrence or non-occurrence of one or more uncertain futureevents not wholly within the Group’s control, or present obligationswhose settlement is not expected to require an outflow of resourcesembodying economic benefits. Contingent liabilities are not recognisedin the balance sheet, but are disclosed in the notes to the financialstatements.Note 1.5.20. Put options granted to ownersof non-controlling interestsThe Group has granted put options to the owners of non-controllinginterests in some of its subsidiaries. The exercise price may befixed or based on a predetermined formula and the options may beexercised either at any time or on a fixed future date. Options with afixed exercise price are measured and recorded as financial liabilitiesat discounted present value and options with a variable exerciseprice at fair value.In accordance with IAS 32, the obligations under these puts havebeen recognised as financial liabilities.IAS 27R, which is applicable as of 1 January <strong>2010</strong>, sets out theaccounting treatment for acquisitions of additional equity interests.The Group has decided to apply two different accounting methodsdepending on whether the put options were granted before or afterthe effective date of IAS 27R, as recommended by France’s securitiesregulator (Autorité des Marchés Financiers). Put options granted beforethe effective date are accounted for using the goodwill method andthose granted after the effective date are treated as equity transactions(i.e. transactions with owners in their capacity as owners).70 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 1.5.21. General def inition of fair valueFair value is the amount for which an asset could be exchanged, ora liability settled, between knowledgeable, willing parties in an arm’slength transaction.Note 1.5.22. Classif ication of assets and liabilitiesas current and non-currentAssets that are expected to be realised in, or are intended for saleor consumption in, the Group’s normal operating cycle or withintwelve months after the balance sheet date are classified as currentassets, together with assets that are held primarily for the purposeof being traded and cash and cash equivalents. All other assets areclassified as “non-current”. Liabilities that are expected to be settledin the entity’s normal operating cycle or within twelve months afterthe balance sheet date are classified as current. The Group’s normaloperating cycle is twelve months.All deferred tax assets and liabilities are classified as non-currentassets or liabilities.Note 1.5.23. Total revenueRevenue comprises “Net sales” and “Other income”.“Net sales” include sales by the Group’s stores, self-service restaurantsand warehouses, as well as financial services, rental services, incomefrom the banking business and revenue from other miscellaneousservices rendered.“Other income” consists of revenue from the property developmentbusiness, other revenue from rendering of services, incidental revenuesand revenues from secondary activities, including fees in connectionwith the sales of travel packages, fees related to franchise-activityand sub-leases revenues.Total revenue is measured at the fair value of the consideration receivedor receivable, net of any trade discounts, volume rebates and salestaxes. It is recognised as follows:■■revenue from the sale of goods is recognised when the significantrisks and rewards of ownership of the goods are transferred to thebuyer (in most cases when the legal title is transferred), the amountof the revenue can be measured reliably and it is probable that theeconomic benefits of the transaction will flow to the Group;revenue from the sale of services, such as extended warranties,services directly related to the sale of goods and services renderedto suppliers are recognised in the period during which they areperformed. When a service is combined with various commitments,such as volume commitments, the Group analyses facts and legalpatterns in order to determine the appropriate timing of recognition.Accordingly, revenue may either be recognised immediately (theservice is considered as performed) or deferred over the periodduring which the service is performed or the commitment isachieved.If payment is deferred beyond the usual credit period and is notcovered by a financing entity, the revenue is discounted and the impactof discounting (the difference between the discounted transactionsand the cash payment), if material, is recognised in financial incomeover the deferral period.Award credits granted to customers under loyalty programmes arerecognised as a separately identifiable component of the initial salestransaction. The corresponding revenue is deferred until the awardcredits are used by the customer.Note 1.5.24. Gross profitGross profit corresponds to the difference between net sales andthe cost of goods sold.The cost of goods sold comprises the cost of purchases net ofdiscounts and commercial cooperation fees, changes in inventoryrelated to retail activities and logistics costs.Commercial cooperation fees are measured based on contractssigned with suppliers. They are billed in instalments over the year.At each year-end, an accrual is booked for the amount receivableor payable, corresponding to the difference between the value ofthe services actually rendered to the supplier and the sum of theinstalments billed during the year.Changes in inventory, which may be positive or negative, aredetermined after taking into account any impairment losses.Logistics costs correspond to the cost of logistics operations managedor outsourced by the Group, comprising all warehousing, handlingand freight costs incurred after goods are first received at one of theGroup’s stores or warehouses. Transport costs included in suppliers’invoices (e.g. for goods purchased on a “delivery duty paid” or “DDP”basis) are included in purchase costs. Outsourced transport costsare recognised under logistics costs.Note 1.5.25. Selling expensesSelling expenses consist of point-of-sale costs, as well as the cost ofproperty development work and changes in work in progress.Note 1.5.26. General and administrative expensesGeneral and administrative expenses correspond to overheads andthe cost of corporate units, including the purchasing and procurement,sales and marketing, IT and finance functions.Note 1.5.27. Pre-opening and post-closure costsWhen they do not meet the criteria for capitalisation, costs incurredprior to the opening or after the closure of a store are recognised inoperating expense when incurred.Note 1.5.28. Other operating income and expense“Other operating income and expense” covers two types of item:■■first, the effects of major events occurring during the period thatwould distort analyses of the Group’s recurring profitability. They aredefined as significant items of income and expense that are limitedin number, unusual or abnormal, whose occurrence is rare;second, items which by their nature are not included in anassessment of a business unit’s recurring operating performance,such as impairment losses on non-current assets, disposals ofnon-current assets and the impact of applying IFRS 3R and IAS27R (see note 1.5.2).Note 1.5.29. Finance costs, netFinance costs, net correspond to all income and expenses generatedby net debt during the period, including gains and losses on salesof cash equivalents, interest rate and currency hedging gains andlosses, as well as interest charges on finance leases.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group71
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNet debt corresponds to borrowings and financial liabilities includingany associated hedges with a negative fair value, less (i) cash andcash equivalents, (ii) financial assets held for treasury managementpurposes and other similar investments, (iii) hedges of debt with apositive fair value and (iv) financial assets arising from a significantdisposal of non-current assets.Note 1.5.30. Other f inancial income and expenseThis item corresponds to financial income and expense that is notgenerated by net debt.It consists mainly of dividends from non-consolidated companies,gains and losses arising from remeasurement at fair value of financialassets other than cash and cash equivalents and of derivatives notqualifying for hedge accounting, gains and losses on disposal offinancial assets other than cash and cash equivalents, discountingadjustments (including to provisions for pensions and other postemploymentbenefit obligations) and exchange gains and losses onitems other than components of net debt.Cash discounts are recognised in financial income for the portioncorresponding to the normal market interest rate and as a deductionfrom cost of goods sold for the balance.Note 1.5.31. Income tax expenseIncome tax expense corresponds to the sum of the current taxes dueby the various Group companies and changes in deferred taxes.Qualifying French subsidiaries are generally members of a tax groupand file a consolidated tax return.Current tax expenses reported in the income statement correspondto the tax expenses of the parent companies of the tax groups andcompanies that are not members of a tax group.Deferred tax assets correspond to future tax benefits arising fromdeductible temporary differences, tax loss carryforwards and certainconsolidation adjustments that are expected to be recoverable.Deferred tax liabilities are recognised in full for:■■taxable temporary differences, except where the deferred taxliability results from recognition of a non-deductible impairmentloss on goodwill or from initial recognition of an asset or liabilityin a transaction which is not a business combination and, at thetime of the transaction, affects neither accounting profit nor taxableprofit or the tax loss; andtaxable temporary differences related to investments in subsidiaries,associates and joint ventures, except when the Group controls thetiming of the reversal of the difference and it is probable that it willnot reverse in the foreseeable future.Deferred taxes are recognised according to the balance sheetmethod and, in accordance with IAS 12, are not discounted. Theyare calculated by the liability method, which consists of adjustingdeferred taxes recognised in prior periods for the effect of any enactedchanges in the income tax rate.Effective from 1 January <strong>2010</strong>, the French business tax (taxeprofessionnelle) has been replaced with two new levies which aredifferent in nature:■■the Cotisation Foncière des Entreprises (CFE), which is based onthe property rental values previously used to calculate the taxeprofessionnelle;the Cotisation sur la Valeur Ajoutée des Entreprises (CVAE), whichis based on the value added reported in the parent companyfinancial statements.The Group believes that the two new levies are different in nature:■■the CFE is very similar to the taxe professionnelle and has thereforebeen recognised as an operating expense in <strong>2010</strong>;the CVAE, according to the Group’s analysis, meets the definitionof a tax on income as defined in IAS 12 and has been thereforerecognised under income tax since the year end <strong>2010</strong>.Note 1.5.32. Earnings per shareBasic earnings per share are calculated based on the weighted averagenumber of shares outstanding during the period, excluding sharesissued in payment of dividends and treasury shares. Diluted earningsper share are calculated by the treasury stock method, as follows:■■numerator: earnings for the period are adjusted for interest onconvertible bonds and dividends on deeply subordinated perpetualbonds;denominator: the number of shares is adjusted to include potentialshares corresponding to dilutive instruments (equity warrants, stockoptions and share grants), less the number of shares that could bebought back at market price with the proceeds from the exercise ofthe dilutive instruments. The market price used for the calculationcorresponds to the average share price for the year.Equity instruments that will or may be settled in <strong>Casino</strong>, Guichard-Perrachon shares are included in the calculation only when theirsettlement would have a dilutive impact on earnings per share.Note 1.5.33. Segment informationAs required by IFRS 8 – Operating Segments, segment informationis now disclosed on the same basis as the Group’s internal reportingsystem.There are now six rather than seven operating segments, reflecting thenew internal organisation structure introduced in France on 1 January<strong>2010</strong>, split between France (<strong>Casino</strong> France, <strong>Mo</strong>noprix, Franprix-LeaderPrice) and International (Latin America, Asia and Other Businesses).Segment information is presented in note 4.The new “<strong>Casino</strong> France” segment comprises all the French retailand real estate businesses other than Franprix-Leader Price and<strong>Mo</strong>noprix.Segment information is provided on the same basis as presented inthe consolidated financial statements.Management evaluates the performance of its operating segmentson the basis of trading profit.72 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 2. SIGNIFICANT EVENTS OF THE YEARNote 2.1. Changes in the scope of consolidationThe main changes in the scope of consolidation during <strong>2010</strong> were as follows:Newly-consolidated and deconsolidated companiesCompany Business Country OperationConsolidationmethod(1)Casas BahiaRetailing Brazil Acquisition FC(2)Alamea InvestmentsFinancing Luxembourg Acquisition FC(3)Cativen and BonuelaRetailing Venezuela Disposal -(4)Leader Centre Gestion (LCG)Retailing France Disposal EMLeader Price Argentina Retailing Argentina Disposal -(1) See note 3 – Casas Bahia is fully consolidated by GPA (PC in <strong>Casino</strong>).(2) See note 28.1.(3) See note 2.2.(4) In February <strong>2010</strong>, RLPI, a subsidiary of the Franprix-Leader Price sub-group, signed a partnership agreement with Nougein SA creating a new company called Leader Centre Gestion(“LCG”). Both partners contributed assets to LCG, which is owned 49% and 51% respectively by RLPI and Nougein SA. The impacts of this transaction, including the gain on the percentageinterest sold and revaluation of the percentage interest retained in accordance with IAS 27R (see note 1.5.2), are described in note 6.Changes in percentage interest with no change of consolidation methodCompany Business CountryChange inpercentageinterestConsolidationmethodMercialys Real estate France 0.13% FCCdiscount e-commerce France 2.11% FCGPA Retailing Brazil 0.03% PC(1)Globex UtilidadesRetailing Brazil (43.05)% FC(1) See note 3.2 – Globex Utilidades is fully consolidated by GPA.A list of main consolidated companies is provided in note 37.Note 2.2. Other significant eventsVenezuelan operationsThe Group operated in Venezuela through its subsidiary Cativen, oneof the country’s leading retailers.On 17 January <strong>2010</strong>, the Venezuelan government decided tonationalise Exito’s hypermarkets. Since that date, the Group has lostcontrol of its Venezuelan assets and its subsidiary Cativen has beendeconsolidated. The Group concurrently began negotiations with theVenezuelan government for a voluntary sale of its assets.The two parties reached an agreement on 26 November <strong>2010</strong> underwhich the Bolivarian Republic of Venezuela acquired 80.1% of Cativenfor a total consideration of USD 690 million (€518 million). Cativen’sother shareholders (Exito and Polar) sold their entire interests while<strong>Casino</strong> retained a 19.9% holding to continue providing operationalsupport to and develop cooperation with the new state-controlledentity. This residual holding has been recognised under available-forsaleassets and the Group does not exercise significant influence.The Group has also undertaken to hold its interest for a period of fiveyears. The two parties have granted reciprocal call and put optionsover the Group’s 19.9% interest. The options are exercisable as of26 November 2015, although the exact terms and conditions haveyet to be defined.At 31 December <strong>2010</strong>, the Group had received USD 138 million (about€103 million) in cash and two USD-denominated promissory notestotalling USD 138 million in consideration for the sale. The balance of40% is due by the end of February 2011. The promissory notes are forequal amounts and mature on 26 November 2011 and 26 November2012 respectively. The Group received USD 138 million after theyear-end. At 31 December <strong>2010</strong>, receivables totalling USD 510 million(€382 million) after discounting were recognised under other currentand non-current assets according to their maturity.The disposal generated a capital gain of €186 million net of expensesand was recognised in “other operating income” (see note 6).Bond exchange offersOn 8 February <strong>2010</strong> <strong>Casino</strong> made an offer to exchange its 2012 and2013 bonds for new bonds due February 2017 and paying interestequivalent to midswap plus 135 basis points. A total of €440 millionand €354 million respectively of 2012 and 2013 bonds were tenderedto the offer and €888 million worth of the new bonds were issued.On 11 May <strong>2010</strong>, the Group made a second offer to exchange its2011, 2012 and 2013 bonds for new bonds due November 2018 andpaying interest equivalent to midswap plus 160 basis points. A totalof €190 million, €156 million and €127 million respectively of the 20112012 and 2013 bonds were tendered to the offer and €508 millionworth of the new bonds were issued.The accounting treatment for these offers is described in note28.1.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group73
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsIssue of preferred shares in consideration for the taxsaving arising on GPA’s goodwill amortisationOn 29 April <strong>2010</strong>, the Group increased its interest in GPA from33.6% to 33.9%, following GPA shareholder approval of theissue to <strong>Casino</strong> of 1.1 million new preferred shares at a price ofBRL 60.39 per share, making a total of BRL 67 million (€30 million).This transaction generated a gain of €11 million recognised under“Other operating income”.Partnership agreement between <strong>Casino</strong>and Group Crédit Mutuel-CICOn 27 July <strong>2010</strong>, <strong>Casino</strong> announced the signing of a long-termpartnership agreement with <strong>Groupe</strong> Crédit Mutuel-CIC to developfinancial products and services in France through its Banque <strong>Casino</strong>subsidiary.Under the terms of the agreement, <strong>Groupe</strong> Crédit Mutuel-CIC willacquire a 50% stake in Banque <strong>Casino</strong>, which is currently 60% ownedby <strong>Casino</strong> and 40% by LaSer Cofinoga.<strong>Casino</strong> has exercised its call option on LaSer Cofinoga’s shareswhich, along with 10% from <strong>Casino</strong>’s current stake, will be sold toCrédit Mutuel. The transaction is subject to approval by the regulatoryauthorities and is expected to be completed within the next 18 months(see note 32.2).This project is subject to approval by the competent authorities.NOTE 3. BUSINESS COMBINATIONSNote 3.1. Acquisition of Casas BahiaIn December 2009, GPA’s subsidiary Globex Utilidades S.A. (“PontoFrio” or “Globex”) entered into a partnership with the retail business ofCasas Bahia Comercial Ltda (“Casas Bahia”), Brazil’s leading non-foodretailer. The current shareholders of Casas Bahia will contribute theirretail business to Ponto Frio in exchange for a non-controlling interest,while GPA will retain majority ownership in the company.Under the partnership, the two companies will merge their durablegoods and online retailing businesses, enabling GPA to enhance itsproduct offering, improve customer service and facilitate access tocredit.On 1 July <strong>2010</strong>, GPA and Casas Bahia signed an amendment to theirinitial partnership agreement, revising certain terms and conditionsand setting out the stages for implementation.On 1 October <strong>2010</strong>, as a preliminary stage in the integration ofCasas Bahia’s business, its operating assets were transferred toa new company called Nova Casa Bahia SA (“NCB”). Since then,NCB has used the “Casas Bahia” brand across 526 stores and8 shopping centres in twelve Brazilian states, selling a range ofconsumer electronics, white goods and small household appliances,such as mobile phones, electronic toys, office products, computersand accessories.On 9 November <strong>2010</strong>, prior to Globex’s acquisition of NCB shares,GPA subscribed to a new share issue made by its subsidiary Globex.The total consideration comprised BRL 290 million (€123 million) incash, Globex’s “Extra-Eletro” consumer electronics business for BRL90 million (€38 million) and intragroup receivables for BRL 374 million(€158 million).On the same day, Globex acquired the entire share capital of NCB,which is now a fully consolidated subsidiary. The acquisition was paidfor in new Globex shares resulting in a dilution of GPA’s interest inGlobex. After the transaction, GPA retained a controlling interest of52.44% in its Globex subsidiary. The share exchange was based onreports drawn up by an independent accounting firm based on thefinancial statements of NCB and Globex at 30 June <strong>2010</strong>.In <strong>2010</strong>, NCB contributed €462 million to the Group’s revenue and aloss of €6 million to pre-tax profit. Had it been acquired since 1 January<strong>2010</strong>, NCB would have contributed €2,189 million to revenue and aloss of €24 million to pre-tax profit.Acquisition-related costs incurred in <strong>2010</strong> totalled €10 million and<strong>Casino</strong>’s share of €3 million was recognised in “other operatingexpense”.Determination of the purchase priceAs Globex is listed on the Bovespa (São Paulo stock exchange),the fair value of the shares issued by Globex in consideration for theacquisition (the “consideration transferred”) was determined on thebasis of Globex’s share price on the acquisition date.€ millions 31 December <strong>2010</strong>Number of Globex shares held by GPA (98.77%) 168,927,975Share price of BRL 15 at 9 November <strong>2010</strong> – in euros 6.34Market value (Bovespa) of the interest in Globex (98.77%) 1,071FAIR VALUE OF THE CONSIDERATION TRANSFERRED (47% OF GLOBEX) 50474 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Fair value of identif iable assets and liabilitiesThe acquisition-date fair values of NCB’s identifiable assets and liabilities in Globex’s financial statements, as drafted by an independentaccounting firm, are summarised below.€ millionsFair value at8 November <strong>2010</strong>Intangible assets 1,221Property, plant and equipment 241Investments in associates 58Deferred tax assets -Inventories 575Trade receivables 1,030Other assets 500Cash and cash equivalents 27ASSETS 3,653Borrowings 608Provisions 14Other liabilities 1,327Deferred tax liabilities 365TOTAL LIABILITIES 2,314Net identifiable assets and liabilities acquired (A) 1,338Fair value of consideration transferred for controlling interest in NCB (B) 504Value of non-controlling interests based on the partial goodwill method (C) 632NEGATIVE GOODWILL (A-B-C) 201Share of negative goodwill recognised in the Group’s financial statement under other operating income (see note 6) 67This temporary valuation may be revised within the 12-monthremeasurement period as of 9 November <strong>2010</strong>. The main fair valueadjustments were recognition of the “Casas Bahia” brand (€683 million),lease premiums (€170 million), advantageous arrangements relatedto the contracts with the Klein family (€108 million) and the sourcingcontract with Bartira (€60 million), the call option on 75% of Bartira’sshares (€176 million) and the associated deferred taxes (€427 million).Bartira is a furniture supplier 75%-owned by the Klein family. NCB andthe Klein family have signed a sourcing contract with Bartira as well asa shareholders’ pact that includes put and call options exercisable in18 months. Bartira is proportionately consolidated by GPA.The negative goodwill has arisen mainly due to the recognition of theadvantageous arrangements and other contracts entered into by NCBand the Klein family concurrently with the acquisition, as well as thefair value of the “Casas Bahia” brand and lease premiums.Determination of the value of the non-controlling interestsThe acquisition-date value of the non-controlling interests was measured as follows:€ millions 31 December <strong>2010</strong>Fair value of NCB’s identifiable assets and liabilities 1,338Non-controlling interests 47.56%VALUE OF THE NON-CONTROLLING INTERESTS BASED ON THE PARTIAL GOODWILL METHOD 632Dilution of GPA’s interest in GlobexIn accordance with IAS 27R, the decrease in GPA’s interest in Globex from 98.77% to 52.44% is treated as a transaction between owners,and <strong>Casino</strong>’s share of the €59 million dilution gain is recognised directly in equity.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group75
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 3.2. Acquisition of Globex Utilidades(Ponto Frio banner) in 2009In the third quarter of 2009, GPA acquired 95.46% of Globex Utilidadesand its Ponto Frio banner. The controlling interest in Ponto Frio wasaccounted for using the acquisition method in accordance with IFRS 3as applicable in 2009 and described in the notes to the consolidatedfinancial statements for the year ended 31 December 2009.The total cost of the business combination was BRL 1,155 million(€425 million). BRL 200 million (€74 million) was settled by GPA’sissuance of Class B preferred stock, which does not carry votingrights and is entitled to a fixed dividend of BRL 0.01 per share. Thepreferred stock will automatically be converted into Class A preferredstock on a 1 for 1 basis in accordance with a pre-set schedule. At31 December <strong>2010</strong>, 20% of the stock had not yet been converted,but was subsequently converted on 7 January 2011.The acquisition-date fair values of Globex Utilidades’ assets and liabilities in GPA’s financial statements are summarised below:€ millions Fair value at 6 July 2009Intangible assets 246Property, plant and equipment 110Investments in associates 11Deferred tax assets 191Inventories 157Trade receivables 265Other assets 124Cash and cash equivalents 32ASSETS 1,136Borrowings 156Provisions 161Trade payables 209Accrued taxes and employee benefits expense 54Other liabilities 123Deferred tax liabilities 94TOTAL LIABILITIES 797Net identifiable assets and liabilities 339Net identifiable assets and liabilities acquired (95.46%) 324Goodwill 101o/w <strong>Casino</strong>’s share on the acquisition date 35ACQUISITION COST 425o/w acquisition-related expenses 9The fair value adjustments mainly concerned the “Ponto Frio” brand(€147 million), lease premiums (€72 million), real estate assets(€36 million), contingent liabilities (€67 million) and the deferred taxasset arising from fiscal amortisation of the goodwill (€45 million).The 2009 consolidated financial statements were adjusted to takeaccount of the revised fair values.In February <strong>2010</strong>, GPA acquired a further 3.3% of Globex Utilidadesraising its interest to 98.32%. The total consideration comprisedBRL 28 million in cash (€13 million) and 137,014 Class B preferredshares. The difference between the acquisition cost and the carryingamount of the percentage interest acquired was recognised by GPAdirectly through equity in an amount of BRL 20 million (€9 million).The Group’s share amounts to €3 million.76 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 4. SEGMENT INFORMATIONNote 4.1. Definition of operating segmentsSegment information is disclosed on the same basis as the Group’sinternal reporting system.There are now six rather than seven operating segments, reflecting thenew internal organisation structure introduced in France on 1 January<strong>2010</strong>, split between France and International: <strong>Casino</strong> France, <strong>Mo</strong>noprix,Franprix-Leader Price in France, and Latin America, Asia and OtherBusinesses in International.The new <strong>Casino</strong> France segment comprises all the French retailand real estate businesses other than Franprix-Leader Price and<strong>Mo</strong>noprix.Management evaluates the performance of these segments on thebasis of sales and trading profit. Accordingly, the Group no longerdiscloses total assets and liabilities by segment, as permitted byIFRS 8.Segment information is provided on the same basis as presented inthe 2009 consolidated financial statements.The 2009 comparative information presented below has been adjustedin line with the new segmentation.Note 4.2. Key indicators by operating segment<strong>2010</strong>€ millions<strong>Casino</strong>FranceFrance<strong>Mo</strong>noprixFranprix-LeaderPriceLatinAmericaInternationalAsiaOtherBusinesses,InternationalExternal sales 12,016 1,914 4,026 8,245 2,009 868 29,078(1)Trading profit463 139 167 372 121 38 1,300(1) As described in note 8, recognition of the new CVAE tax under “Income tax expense” had a €57 million positive impact on trading profi t for France and €2 million for Other Businesses,International.Total2009€ millions<strong>Casino</strong>FranceFrance<strong>Mo</strong>noprixFranprix-LeaderPriceLatinAmerica (1)InternationalAsiaOtherBusinesses,InternationalExternal sales 11,829 1,829 4,007 6,563 1,686 844 26,757Trading profit 439 120 243 250 92 66 1,209(1) Latin America included the Venezuelan operations in 2009 but not in <strong>2010</strong>.TotalNOTE 5. TRADING PROFITNote 5.1. Total revenue€ millions <strong>2010</strong> 2009Net sales 29,078 26,757Other income 411 314TOTAL REVENUE 29,490 27,071The €97 million increase in other income in <strong>2010</strong> stems mainly from the disposal of property development assets in France for €183 million(including €141 million related to the photovoltaic energy business) partially offset by losses on the disposal of property development sitesin Poland for €119 million.Note 5.2. Cost of goods sold€ millions <strong>2010</strong> 2009Purchases and change in inventories (20,643) (18,770)Logistics costs (1,110) (1,067)COST OF GOODS SOLD (21,753) (19,836)Registration Document <strong>2010</strong> | <strong>Casino</strong> Group77
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 5.3. Expenses by nature and function31 December <strong>2010</strong>€ millions Logistics costs (1) Selling expensesGeneral andadministrativeexpensesEmployee benefits expense (385) (2,384) (633) (3,401)Other expenses (691) (2,412) (389) (3,492)Depreciation and amortisation expense (34) (528) (91) (653)TOTAL (1,110) (5,324) (1,112) (7,546)(1) Logistics costs are reported in the income statement under “Cost of goods sold”.31 December 2009€ millions Logistics costs (1) Selling expensesGeneral andadministrativeexpensesEmployee benefits expense (339) (2,227) (570) (3,136)Other expenses (690) (2,244) (384) (3,318)Depreciation and amortisation expense (37) (513) (89) (639)TOTAL (1,067) (4,983) (1,043) (7,093)(1) Logistics costs are reported in the income statement under “Cost of goods sold”.TotalTotalNote 5.3.1. EmployeesEmployees at 31 December (number of employees) <strong>2010</strong> 2009Number of employees at 31 December 170,248 163,208Full-time equivalents 159,230 152,377Employees of associates are not included in these figures. Employees of joint ventures are included proportionally to the Group’s percentageinterest.Note 5.3.2. Finance and operating lease expenseOperating leasesOperating lease payments amounted to €587 million at 31 December <strong>2010</strong> (including €527 million for property assets) and €526 million at31 December 2009.The amount of future operating lease payments and minimum lease payments to be received under non-cancellable sub-leases are disclosedin note 32.3.2.Finance leasesConditional rental payments related to finance leases included in the income statement amounted to €1 million in <strong>2010</strong> and 2009.The amount of future finance lease payments and minimum lease payments to be received under non-cancellable sub-leases are disclosedin note 32.3.1.Note 5.4. Depreciation and amortisation€ millions <strong>2010</strong> 2009Depreciation and amortisation expense - owned assets (616) (600)Depreciation expense - finance leases (38) (39)DEPRECIATION AND AMORTISATION EXPENSE (653) (639)78 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 6. OTHER OPERATING INCOME AND EXPENSE€ millions <strong>2010</strong> 2009Total other operating income 420 260Total other operating expense (405) (296)BREAKDOWN BY TYPE15 (37)Gains and losses on disposal of non-current assets 323 146Gain on disposal of Venezuelan operations (1) 186 -Gain on property development operations (2) 104 14Gain on disposals in the Franprix-Leader Price sub-group (3) 24 -Gain on disposal of Mercialys shares (4) - 139Gain on disposal of Vindémia assets - 22Loss on disposal of Easy Colombia (Easy Holland BV) - (28)Other operating income and expense (308) (182)Restructuring provisions and expense (5) (134) (68)Impairment losses (8) (97) (15)Provisions for litigation and risks (6) (112) (97)Negative goodwill (7) 67 -Other (33) (2)TOTAL OTHER OPERATING INCOME AND EXPENSE, NET 15 (37)(1) See note 2.2.(2) Arising from the Mercialys group’s disposal of 45 assets considered to be suffi ciently mature, representing 5% of its portfolio, and the disposal of other non-operating assets held by otherof the Group's real estate companies.(3) Arising mainly from the transaction presented in note 2.1, which generated a €14 million gain.(4) The gain recognised in the fi rst half of 2009 was due to the payment of a dividend in Mercialys stock to <strong>Casino</strong>, Guichard-Perrachon shareholders.(5) The restructuring charge in <strong>2010</strong> mainly concerns <strong>Casino</strong> France (€84 million), Franprix-Leader Price (€14 million) and Latin America (€18 million). In 2009, it mainly concerned theconvenience stores and Franprix-Leader Price.(6) Corresponds to notably fi scal risks and disputes in the Group’s various entities.(7) See note 3.1.(8) Breakdown of impairment losses:€ millions Notes <strong>2010</strong> 2009Impairment of intangible assets net of reversals 13.2 (4) (2)Impairment of property, plant and equipment net of reversals 14.2 (7) (4)Impairment of financial assets net of reversals (1) (85) (9)TOTAL IMPAIRMENT LOSSES, NET (97) (15)(1) Impairment of fi nancial assets net of reversals mainly includes €69 million in impairment of receivables and accrued income arising from accounting errors made by a subsidiary in prior yearsand detected upon closing the accounts.NOTE 7. FINANCIAL INCOME AND EXPENSENote 7.1. Finance costs, net€ millions <strong>2010</strong> 2009Gains and losses on sales of cash equivalents 1 4Revenue from cash and cash equivalents 38 22Total income from cash and cash equivalents 39 27Interest expense on borrowings after hedging (379) (362)Interest expense on finance lease liabilities (6) (8)Finance costs (384) (370)TOTAL FINANCE COSTS, NET (345) (343)Registration Document <strong>2010</strong> | <strong>Casino</strong> Group79
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 7.2. Other financial income and expense€ millions <strong>2010</strong> 2009Investment income 2 1Exchange gains (other than on borrowings) 28 27Discounting and discounting reversal adjustments 5 2Gains from remeasurement at fair value of derivative instruments not qualifying for hedge accounting 4 11Other financial income 45 51Total other financial income 85 91Exchange losses (other than on borrowings) (23) (20)Discounting and discounting reversal adjustments (13) (18)Losses from remeasurement at fair value of derivative instruments not qualifying for hedge accounting (1) (3)Losses from remeasurement at fair value of financial assets at fair value through profit or loss - (1)Other financial expense (65) (51)Total other financial expense (102) (93)TOTAL OTHER FINANCIAL INCOME AND EXPENSE, NET (17) (2)NOTE 8. INCOME TAX (EXPENSE)/BENEFITNote 8.1. Income tax expenseNote 8.1.1. Analysis of income tax expense€ millions <strong>2010</strong> 2009Current taxes (174) (193)France (97) (126)International (76) (66)Other taxes (CVAE) (59) -France (57) -International (2) -Deferred taxes 19 (8)France 12 1International 7 (9)TOTAL INCOME TAX EXPENSE (214) (201)France (143) (125)International (71) (76)Income tax expense increased by €13 million in <strong>2010</strong> to €214 million.The increase was due mainly to growth in pre-tax profit and the changeof in presentation of the new CVAE tax, offset by the non-taxability ofcertain non-recurring transactions during the year such as the disposalof the Venezuelan operations and the Casas Bahia negative goodwill.As of 1 January <strong>2010</strong>, the CVAE tax has been recognised as a tax onincome whereas it was previously recognised as an operating expensein the same way as the former business tax (taxe professionnelle) itis partially replacing.80 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 8.1.2. Reconciliation of theoretical and actual tax expenseFor <strong>2010</strong> and 2009, the reconciliation of the Group’s effective tax rate is based on the standard French tax rate of 34.43%, as follows:€ millions <strong>2010</strong> 2009Profit before tax and share of profits of associates 953 828Standard French tax rate 34.43% 34.43%Income tax at the standard French tax rate (328) (285)Impact of tax rate differences 17 43Theoretical impact of zero-rated temporary differences (see note 8.1.3) 105 36• Tax credit on deduction of notional interest charges4 6• Investment tax credit for France and International18 7• Recognition and write-off of losses(2) (6)• Reversal of provision for taxes- 4• Tax credits available for corporate philanthropy and apprenticeship contracts5 -• CVAE net of income tax(35) -• Other2 (6)ACTUAL INCOME TAX EXPENSE (214) (201)Effective tax rate paid by the Group 22.4% 24.3%Note 8.1.3. Main zero-rated temporary differences€ millions <strong>2010</strong> 2009Unrecognised deferred tax assets on tax losses available for carry forward (7) (33)Mercialys tax-exempt profit 94 46Stock options (19) (15)Brazil and Colombia dilution 7 18Non-taxable disposals 205 58Non-taxable negative goodwill 67 -GPA (tax amnesty) - 44Non-deductible expenses - (15)Other (41) 3TOTAL 306 106Standard French tax rate 34.43% 34.43%TAX EFFECT OF ZERO-RATED TEMPORARY DIFFERENCESAT STANDARD FRENCH TAX RATE 105 36Note 8.2. Deferred taxesNote 8.2.1. Change in deferred tax assets€ millions <strong>2010</strong> 2009 adjustedAt 1 January 140 110Benefit (expense) for the period on continuing operations 83 (62)Benefit (expense) for the period on discontinued operations - (3)Impact of changes in exchange rates and scope of consolidation, reclassifications (106) 89Deferred tax assets recognised directly in equity (4) 3Reclassification of non-current assets held for sale - 3AT 31 DECEMBER 113 140Registration Document <strong>2010</strong> | <strong>Casino</strong> Group81
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 8.2.2. Change in deferred tax liabilities€ millions <strong>2010</strong> 2009 adjustedAt 1 January 369 391Expense (benefit) for the period 64 (54)Impact of changes in exchange rates and scope of consolidation, reclassifications 10 32Deferred tax liabilities recognised directly in equity - -AT 31 DECEMBER 444 369Note 8.2.3. Breakdown of deferred tax assets and liabilities by source€ millions <strong>2010</strong>Net 2009adjustedIntangible assets (295) (120)Property, plant and equipment (318) (335)of which finance leases (87) (101)Inventories 42 (12)Financial instruments 9 11Other assets 61 56Provisions 99 91Untaxed provisions (145) (139)Other liabilities 77 81of which finance lease liabilities 23 50Tax loss carryforwards 140 138NET DEFERRED TAX ASSETS (LIABILITIES) (330) (229)Deferred tax assets recognised in the balance sheet 113 140Deferred tax liabilities recognised in the balance sheet 444 369NET (330) (229)In <strong>2010</strong>, the <strong>Casino</strong>, Guichard-Perrachon group tax relief agreementresulted in a tax saving of €117 million compared with €119 millionin 2009.At 31 December <strong>2010</strong>, the Group had €66 million of unusedunrecognised tax loss carryforwards (€23 million of unrecogniseddeferred tax assets). These losses mainly concern Franprix-LeaderPrice and Cdiscount.They expire as follows:Expiry dates of tax loss carryforwards€ millions <strong>2010</strong> 2009Less than 1 year - 11 to 2 years - 12 to 3 years - 1<strong>Mo</strong>re than 3 years 22 20TOTAL 23 23Recognised tax loss carryforwards mainly concern GPA and Franprix-Leader Price. The corresponding deferred tax assets have beenrecognised in the balance sheet as their utilisation is consideredprobable in view of the forecast future taxable profits of the companiesconcerned and their tax planning strategies.82 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 9. SHARE OF PROFITS OF ASSOCIATES€ millions <strong>2010</strong> 2009GPA Group associates 7 3Property mutual funds (OPCI) – Store premises 2 -Franprix and Leader Price associates 1 5AEW Immocommercial 2 2Easy Colombia - (1)Cdiscount Group associates - (3)SHARE OF PROFITS OF ASSOCIATES 13 6NOTE 10. DISCONTINUED OPERATIONSAND NON-CURRENT ASSETS HELD FOR SALENon-current assets held for sale:€ millions <strong>2010</strong> 2009Franprix-Leader Price group property assets 1 10Leader Price Argentina - 12DCF property assets - 4NON-CURRENT ASSETS HELD FOR SALE (1) 1 26Liabilities associated with non-current assets held for sale - 17(1) Including €1 million of cash at 31 December 2009.The income statements for the US, Polish and Super de Boer operations, presented under a single line of the consolidated income statementunder discontinued operations, break down as follows:€ millions<strong>2010</strong> 2009Superde Boer Other TotalSuperde Boer Other TotalSales - - - 1,570 - 1,570Gross profit - - - 143 - 143Trading profit - (4) (4) 20 (1) 19Other operating income and expense (3) (2) (6) 217 (5) 211Operating profit (3) (6) (9) 237 (6) 231Net financial income/(expense) - (1) (1) (5) 1 (3)Income tax expense - 1 1 (3) 2 (1)Share of profits of associates - - - 1 - 1NET PROFIT/(LOSS) FROM DISCONTINUEDOPERATIONS (3) (6) (9) 230 (2) 228Attributable to owners of the parent (3) (6) (9) 51 (2) 48Attributable to non-controlling interests - - - 179 - 179Cash flows of discontinued operations€ millions<strong>2010</strong> 2009Superde Boer (1) Other TotalSuperde Boer Other TotalNet cash from operating activities (20) (5) (26) 20 (11) 9Net cash from investing activities - - - 292 - 292Net cash from financing activities - - - (307) - (307)NET CHANGE IN CASH AND CASH EQUIVALENTSOF DISCONTINUED OPERATIONS (20) (5) (26) 5 (11) (6)(1) In <strong>2010</strong>, cash fl ows correspond mainly to the payment of fees in connection with the Super de Boer disposal in 2009.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group83
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNOTE 11. EARNINGS PER SHARENote 11.1. Number of sharesCalculation of the weighted average number of shares and potential sharesused to determine diluted earnings per share <strong>2010</strong> 2009WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING THE PERIODTotal ordinary shares 110,478,074 110,329,142Ordinary shares held in treasury (189,136) (169,598)Weighted average number of ordinary shares before dilution (1) 110,288,938 110,159,544POTENTIAL SHARES REPRESENTED BY:Stock options 1,246,255 1,424,673Non-dilutive instruments (out of the money or covered by calls) (671,860) (1,424,673)Weighted average number of dilutive instruments 574,395 -Theoretical number of shares purchased at market price (1) (503,389) -Dilutive effect of stock options 71,006 -Share grants 581,407 323,089Total potential dilutive shares 652,413 323,089TOTAL DILUTED NUMBER OF SHARES (2) 110,941,351 110,482,633(1) In accordance with the treasury stock method, the proceeds from the exercise of warrants and options are assumed to be used in the fi rst instance to buy back shares at market price. Thetheoretical number of shares that would be purchased is deducted from the total shares that would be issued on exercise of the rights attached to the warrants and options. Any theoreticalshares in excess of the number of shares resulting from the exercise of rights are not taken into account.Note 11.2. Profit attributable to ordinary shares€ millions <strong>2010</strong> 2009Profit attributable to owners of the parent 550 591Dividends payable on deeply subordinated perpetual bonds (15) (18)PROFIT ATTRIBUTABLE TO HOLDERS OF ORDINARY SHARES (3) 534 573of which:• profit from continuing operations, attributable to owners of the parent(4) 543 524• profit from discontinued operations, attributable to owners of the parent(9) 48Note 11.3. Earnings per shareIn € <strong>2010</strong> 2009Basic earnings per share attributable to owners of the parent:• on continuing and discontinued operations(3)/(1) 4.85 5.20• on continuing operations(4)/(1) 4.93 4.76Diluted earnings per share attributable to owners of the parent:• on continuing and discontinued operations(3)/(2) 4.82 5.18• on continuing operations(4)/(2) 4.90 4.7584 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 12. GOODWILLNote 12.1. Breakdown€ millions<strong>2010</strong> 2009 adjustedGross Impairment Net NetHistorical companies (1) 1,311 - 1,311 1,297• Hypermarkets614 - 614 614• Supermarkets504 - 504 492• Convenience stores192 - 192 190Franprix-Leader Price 1,819 - 1,819 1,857<strong>Mo</strong>noprix 907 - 907 906Other 335 - 335 334France 4,372 - 4,372 4,394Latin America 2,010 - 2,010 1,791Argentina 35 - 35 34Brazil 1,388 - 1,388 1,222Colombia 478 - 478 403Uruguay 109 - 109 103Venezuela - - - 29Asia 93 - 93 72Thailand 89 - 89 68Vietnam 3 - 3 3Other 179 - 179 178Indian Ocean 176 - 176 176Poland 2 - 2 1Other 1 - 1 1International 2,282 - 2,282 2,041GOODWILL 6,654 - 6,654 6,435(1) Goodwill related to the historical companies corresponds mainly to the Distribution <strong>Casino</strong> France business and the goodwill recognised in 1990 and 1992 on the acquisition of La RucheMéridionale and the businesses contributed by Rallye.Note 12.2. <strong>Mo</strong>vements for the period€ millions <strong>2010</strong> 2009 AdjustedCarrying amount at 1 January 6,435 6,190Goodwill recognised during the period (1) 22 178Impairment losses recognised during the period - (10)Derecognised companies (2) (39) (251)Translation adjustment (3) 250 320Adjustments arising from recognition of put options granted to owners of non-controlling interests 1 7Reclassifications and other movements (4) (16) -CARRYING AMOUNT AT 31 DECEMBER 6,654 6,435(1) The change in 2009 was mainly due to GPA’s acquisition of Globex (€29 million), the acquisition of Dilux and Chalin supermarket business owners (€28 million), acquisitions made by theFranprix-Leader Price sub-group (€45 million), the consolidation of Viver, Alco and Casteldoc (€19 million), and the impact of transactions with Mercialys (€50 million).(2) Disposals mainly comprise Cativen for €29 million (see note 2.2). In 2009, disposals mainly comprised the assets and liabilities of Super de Boer for €169 million and dilutions of the Group’spercentage interest in Exito and GPA for, respectively, €35 million and €25 million.(3) The translation adjustment in <strong>2010</strong> and 2009 stems mainly from the appreciation of the Brazilian and Colombian currencies against the euro.(4) The €16 million decrease is mainly due to the arbitration board’s ruling regarding the Baud family litigation (see note 33).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group85
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNOTE 13. INTANGIBLE ASSETSNote 13.1. Breakdown€ millionsGross<strong>2010</strong> 2009 adjustedAmortisationandimpairment Net GrossAmortisationandimpairmentConcessions, trademarks, licences and banners 612 (53) 559 353 (42) 311Lease premiums 227 (2) 225 156 (2) 154Software 343 (216) 128 350 (207) 143Other 272 (34) 238 112 (33) 79INTANGIBLE ASSETS 1,455 (304) 1,150 971 (283) 688NetNote 13.2. <strong>Mo</strong>vements for the period€ millionsConcessions,trademarks,licences andbannersLeasepremiums Software Other TotalAt 1 January 2009 333 114 123 112 681Change in scope of consolidation 49 24 8 - 80Increases and separately acquired intangible assets 2 19 23 49 93Intangible assets disposed of during the period (101) (2) (7) 2 (108)Amortisation for the period (continuing operations) (14) - (53) (3) (70)Impairment losses recognised during the period(continuing operations) - - - (1) (2)Translation adjustment 22 2 1 1 26Reclassifications and other movements 22 (2) 49 (80) (12)At 31 December 2009 adjusted 311 154 143 79 688Change in scope of consolidation (1) 192 51 (4) 136 376Increases and separately acquired intangible assets 7 16 11 71 105Intangible assets disposed of during the period - (4) 1 (8) (12)Amortisation for the period (continuing operations) (13) - (62) (7) (82)Impairment losses recognised during the period(continuing operations) (4) - (2) 1 (4)Translation adjustment 56 7 3 10 75Reclassifications and other movements 10 1 39 (44) 5AT 31 DECEMBER <strong>2010</strong> 559 225 128 238 1,150(1) See note 3 for main acquisitions.Internally-generated intangible assets represented €13 million in <strong>2010</strong> compared with €9 million in 2009.At 31 December <strong>2010</strong>, intangible assets included trademarks and lease premiums with an indefinite useful life for the amount of €552 millionand €225 million respectively. They are allocated to the following groups of CGU:€ millions <strong>2010</strong> 2009 adjustedExito 246 243GPA (1) 399 80Distribution <strong>Casino</strong> France 73 72Franprix-Leader Price 36 36<strong>Mo</strong>noprix 20 16Other 3 5(1) The €319 million increase related to GPA is mainly due to the acquisition of Casas Bahia (see note 3.1).86 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 14. PROPERTY, PLANT AND EQUIPMENTNote 14.1. Breakdown€ millionsGross<strong>2010</strong> 2009 adjustedDepreciationandimpairment Net GrossDepreciationandimpairmentLand and land improvements 1,475 (61) 1,413 1,429 (54) 1,375Buildings, fixtures and fittings 3,711 (1,269) 2,442 3,404 (1,133) 2,272Other 5,486 (3,180) 2,305 5,124 (3,021) 2,104PROPERTY, PLANT AND EQUIPMENT 10,672 (4,511) 6,160 9,958 (4,208) 5,751NetNote 14.2. <strong>Mo</strong>vements for the period€ millionsLand and landimprovementsBuildings,fixtures andfittings Other TotalAt 1 January 2009 1,349 2,376 2,187 5,912Change in scope of consolidation 32 24 22 78Increases and separately acquired property, plant & equipment 19 98 440 557Property, plant & equipment disposed of during the period (1) (76) (270) (28) (374)Depreciation for the period (continuing operations) (6) (145) (410) (561)Impairment losses recognised during the period(continuing operations) (2) - (5) (22) (27)Translation adjustment 46 134 50 230Reclassifications and other movements 10 61 (134) (63)At 31 December 2009 adjusted 1,375 2,272 2,104 5,751Change in scope of consolidation 5 (30) (12) (37)Increases and separately acquired property, plant & equipment 22 113 685 820Property, plant & equipment disposed of during the period (26) (58) (22) (106)Depreciation for the period (continuing operations) (6) (124) (411) (540)Impairment losses recognised during the period(continuing operations) (2) (6) 1 (7)Translation adjustment 72 190 75 338Reclassifications and other movements (27) 86 (117) (58)AT 31 DECEMBER <strong>2010</strong> 1,413 2,442 2,305 6,160(1) In 2009, disposals of buildings, fi xtures and fi ttings stem mainly from the sale of Super de Boer assets for €132 million and sales of store assets for €101 million (principally to the two newproperty mutual funds).(2) The 2009 impairment loss of €27 million corresponds to the results of impairment tests for €4 million and the restructuring of convenience stores and Franprix-Leader Price for €23 million.Property, plant and equipment were tested for impairment at 31 December <strong>2010</strong> using the method described in note 1.5 “Significant AccountingPolicies”. The impact is presented in note 16.Note 14.3. Finance leasesFinance leases on owner-occupied property and investment property break down as follows:<strong>2010</strong> 2009€ millionsGross Depreciation Net Gross Depreciation NetLand 41 (2) 39 44 (2) 42Buildings 227 (105) 123 226 (102) 124Equipment and other 646 (531) 114 707 (583) 125Investment property 82 (7) 74 82 (6) 76TOTAL 996 (645) 351 1,059 (693) 366Registration Document <strong>2010</strong> | <strong>Casino</strong> Group87
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 14.4. Capitalisation of borrowing costsInterest capitalised during the period amounted to €3 million at an average interest rate of 6.59%, compared with €3 million at an averageinterest rate of 7.43% in 2009.NOTE 15. INVESTMENT PROPERTYNote 15.1. <strong>Mo</strong>vements for the period€ millions Gross Depreciation Impairment NetAt 1 January 2009 1,385 (229) (34) 1,121Change in scope of consolidation 82 - - 81Increases and separately acquired investment property 46 (32) - 14Investment property disposed of during the period (22) 5 - (17)Impairment losses recognised during the period, net - - - -Translation adjustment 1 - - 1Reclassifications and other movements 32 3 - 35At 31 December 2009 1,524 (254) (34) 1,235Change in scope of consolidation - - - -Increases and separately acquired investment property 122 (48) - 74Investment property disposed of during the period (74) 18 - (56)Impairment losses recognised during the period, net - - - -Translation adjustment 49 (12) (1) 36Reclassifications and other movements 49 8 - 57AT 31 DECEMBER <strong>2010</strong> 1,669 (288) (36) 1,346Investment property is measured at cost less accumulated depreciationand any accumulated impairment losses. The fair value of investmentproperty at 31 December <strong>2010</strong> totalled €3,332 million (€2,994 millionat 31 December 2009). For most investment properties, fair valueis determined on the basis of valuations carried out by externalappraisers. Valuations are based on open market value, as confirmedby market indicators, in accordance with international valuationstandards.The carrying amount of investment property totalled €1,346 million at31 December <strong>2010</strong>, including 78% or €1,054 million for Mercialys.Amounts recognised in the income statement in respect of rentalrevenue and operating costs on investment property break downas follows:€ millions <strong>2010</strong> 2009Rental revenue from investment property 255 221Directly attributable operating costs of investment properties that did not generateany rental revenue during the period (12) (8)Directly attributable operating costs of investment properties that generated rentalrevenue during the period (15) (16)Note 15.2. Fair values of investment propertyrelating to MercialysBNP Paribas Real Estate (Atisreal), Catella Valuation and Galtierupdated their appraisals of Mercialys’ property portfolio at 30 June<strong>2010</strong>. On a comparable basis, all properties were appraised.At 31 December <strong>2010</strong>, Atisreal, Catella and Galtier updated theirprevious appraisals:■Atisreal appraised the portfolio of 95 hypermarkets, making onsitevisits to 7 properties in the second half of <strong>2010</strong> and updating itsappraisals at 30 June <strong>2010</strong> for the other 88 (which included 9 onsitevisits in the first half of <strong>2010</strong>);■■Catella appraised the portfolio of 10 supermarkets, updating itsappraisals at 30 June <strong>2010</strong>;Galtier appraised the rest of Mercialys’ assets, comprising22 properties, making onsite visits to 6 properties in the secondhalf of <strong>2010</strong> and updating its appraisals at 30 June <strong>2010</strong> for theother 16.88 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3These appraisals, based on recurring rental revenue of €136 million,valued the portfolio at a total of €2,359 million including transfer taxesat 31 December <strong>2010</strong>, compared with €2,266 million at 30 June <strong>2010</strong>and €2,237 million at 31 December 2009.The portfolio value has therefore increased by 5.5% over one year (up7% on a like-for-like basis), and by 4.1% over six months (up 5.5%on a like-for-like basis).The average capitalisation rates were as follows:31 December <strong>2010</strong> 30 June <strong>2010</strong> 31 December 2009Large shopping centres 5.4% 5.6% 5.7%Neighbourhood shopping centres 6.4% 6.5% 6.7%Total portfolio 5.8% 6.0% 6.1%Based on annual rental revenue of €136 million and a capitalisationrate of 5.8%, a 0.5% decrease in the capitalisation rate would havethe effect of increasing fair value by €223 million and a 0.5% increasein the capitalisation rate would have the effect of decreasing fair valueby €188 million.Based on a capitalisation rate of 5.8%, a 10% increase or decreasein rental revenue would have the effect or increasing or decreasingfair value by €236 million.On the basis of these appraisals, no impairment losses wererecognised in the <strong>2010</strong> financial statements (or in the 2009 financialstatements).NOTE 16. IMPAIRMENT OF NON-CURRENT ASSETSNote 16.1. <strong>Mo</strong>vements for the periodGoodwill and other non-financial non-current assets were tested forimpairment at 31 December <strong>2010</strong> by the method described in note1.5 “Significant Accounting Policies”.Management made the best possible estimate of recoverableamounts or values in use for all assets. The assumptions used areset out below.As a result of the impairment tests carried out in <strong>2010</strong>, the Grouprecognised impairment losses totalling €11 million on intangible assetsand property, plant and equipment.For information, the 2009 goodwill impairment test resulted in therecognition of €15 million of impairment losses, mainly including€6 million allocated to intangible assets and property, plant andequipment in the Franprix-Leader Price and <strong>Mo</strong>noprix segments.Note 16.2. Goodwill impairment lossesGoodwill is tested for impairment at each year end in accordance withthe principles set out in note 1.5 “Significant Accounting Policies”.Impairment testing consists of determining the recoverable valuesof the cash generating units (CGUs) or groups of CGU to which thegoodwill is allocated and comparing them with the carrying amountsof the relevant assets. Goodwill arising on the initial acquisition ofnetworks is allocated to the groups of CGU in accordance with theclassifications set out in note 12. Some goodwill may occasionallybe allocated directly to CGUs.For internal valuations, impairment testing generally consists ofdetermining the value in use of each CGU in accordance with theprinciples set out in note 1.5.12. Value in use is determined by thediscounted cash flows method, based on after-tax cash flows andusing the following rates.Parameters used for internal calculations of <strong>2010</strong> values in useRegion Growth rate (1) (x EBITDA)Terminal valueAfter-taxdiscount rate (2)France (retailing) 1.1% to 1.6% 9.0 6.0% to 9.0%France (other) 1.1% to 1.6% 7 to 8.0 6.0% to 8.2%Argentina 15.5% 9.5 20.9%Colombia 5.8% 9.5 9.8%Uruguay 5.5% 9.5 12.2%Thailand 2.0% 9.0 6.6%Vietnam 9.0% 9.5 14.8%Indian Ocean 1.6% 9.0 6.0% to 12.0%(1) The growth rate for the cash fl ow projection period includes the expected increase in the consumer price index, which is very high in some countries.(2) The discount rate used is the weighted average capital cost (WACC) for each country. WACC is calculated by taking account of the sector’s indebted beta, the historical observed marketrisk premium and the Group’s cost of debt.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group89
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsBased on the <strong>2010</strong> goodwill impairment test, which was completed atthe year-end, no impairment losses were recognised at 31 December<strong>2010</strong>.In view of the positive difference between value in use and carryingamount, the Group believes that on the basis of reasonably foreseeableevents, any changes in the key assumptions set out above wouldnot lead to the recognition of an impairment loss, with the exceptionof the Geimex CGU. For example, a 100-basis point increase in thediscount rate or a 0.5-point decrease in the EBITDA multiple used tocalculate terminal value, or a 50-basis point decrease in the EBITDAmargin in the final year of the projections used to calculate the terminalvalue, would not have led to the recognition of an impairment loss.As regards the Geimex CGU, the <strong>2010</strong> test resulted in a value inuse very close to the carrying amount. A 100-basis point increasein the discount rate or a 0.5-point decrease in the EBITDA multipleused to calculate terminal value or a 50-basis point decrease in theEBITDA margin in the final year of the projections used to calculatethe terminal value would have led to the recognition of an impairmentloss of between €2 million and €6 million for the Group.An independent valuation was carried out for GPA duringDecember <strong>2010</strong> and January 2011, which did not lead to therecognition of any impairment at 31 December <strong>2010</strong>.The main assumptions underlying this independent valuation were:GPA’s value in use was estimated on the basis of discounted futurecash flows supported by a multi-criteria analysis based on shareprices and comparable transaction multiples. The discounted cashflows method was considered to be fundamental for GPA. It wasbased on three-year projected cash flows approved by management,plus a further two years of estimated cash flows and a terminal value.The discount rate used was 10.7%. The key assumptions includea revenue growth rate, discount rate and EBITDA multiple (10.7x)used to calculate the terminal value. At 31 December <strong>2010</strong>, a 1,300basis-point increase in the discount rate or a 5.8-point decrease inthe EBITDA multiple would have been required to reduce value in useto the carrying amount.NOTE 17. INVESTMENTS IN ASSOCIATESNote 17.1. <strong>Mo</strong>vements for the period€ millions<strong>Mo</strong>vements in 2009 adjustedOpeningbalanceImpairmentNet profit forthe periodRetailingChangesin scope ofconsolidationandtranslationadjustmentsClosingbalanceGPA Group associates 10 - 3 - 15 28Franprix and Leader Price associates 75 - 5 (5) 12 87Easy Holland BV 2 - - - (2) -AEW Immocommercial 25 - 2 (4) - 23Property mutual funds (OPCI) – storepremises - - - - 41 41Cdiscount Group associates 2 - (3) - 2 -Easy Colombia 9 - (1) - (9) -TOTAL 122 - 6 (9) 57 178<strong>Mo</strong>vements in <strong>2010</strong>GPA Group associates 28 - 7 - 4 39Franprix and Leader Price associates 87 - 1 (6) 18 100AEW Immocommercial 23 - 2 (4) - 22Property mutual funds (OPCI) – storepremises 41 - 2 (1) (42) -Poland - - - - - 1TOTAL 178 - 13 (11) (19) 161<strong>Mo</strong>vements during the year were mainly due to the derecognition ofOPCI Vivéris and SPF1 as the Group does not exercise significantinfluence over either of these entities.These associates are privately-held companies for which no quotedmarket prices are available on which to estimate their fair value.Transactions with associates are disclosed in note 34.1.Note 17.2. Group share of contingent liabilitiesof associatesAt 31 December <strong>2010</strong> and 2009, there were no contingent liabilitiesin associates.90 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 18. JOINT VENTURES<strong>Mo</strong>noprix, Distridyn, Régie Média Trade, Dunnhumby France andGeimex are jointly controlled (on a 50/50 basis) by the Group andare consolidated by the proportionate method.Banque du <strong>Groupe</strong> <strong>Casino</strong>, Grupo Disco de Uruguay, Wilkes and theGPA group are also consolidated by the proportionate method becausein all cases the agreement between <strong>Groupe</strong> <strong>Casino</strong> and its partnersprovides for the exercise of joint control over the business.Some joint ventures, mainly GPA and <strong>Mo</strong>noprix, are subject to putand all options (see note 32.2).Note 18.1. Financial highlights for the main joint ventures, restated in accordance with IFRS€ millionsGroup shareTotal<strong>2010</strong> 2009 adjustedo/wGPA (1)o/w<strong>Mo</strong>noprixTotalo/wGPAo/w<strong>Mo</strong>noprixPercentage interest 33.70% 50.00% 33.67% 50.00%Income 8,289 4,762 1,938 6,206 3,006 1,840Expense (8,052) (4,650) (1,850) (6,034) (2,927) (1,768)Total non-current assets 3,946 2,358 1,111 3,029 1,506 1,108Total current assets 3,434 2,344 329 2,238 1,208 295TOTAL ASSETS 7,380 4,702 1,440 5,267 2,713 1,403Total equity 3,017 1,840 611 2,229 1,159 582Total non-current liabilities 981 852 113 669 548 113Total current liabilities 3,382 2,009 716 2,368 1,007 708TOTAL LIABILITIES 7,380 4,702 1,440 5,267 2,713 1,403(1) See note 2.1.Note 18.2. Group share of contingent liabilitiesAu 31 December <strong>2010</strong>, the only contingent liabilities in joint ventures were tax and social security related risks at GPA for €434 million(Group share).NOTE 19. NON-CURRENT FINANCIAL ASSETS€ millions <strong>2010</strong> 2009 adjustedAvailable-for-sale financial assets (AFS) 120 79Other financial assets 344 209• Loans108 99• Derivatives not qualifying for hedge accounting- -• Receivables from non-consolidated and other companies236 109Prepaid rents 183 122NON-CURRENT FINANCIAL ASSETS 648 409Note 19.1. Available-for-sale financial assets (AFS)<strong>Mo</strong>vements for the period€ millions <strong>2010</strong> 2009At 1 January 79 170Increase 21 4Decrease (8) (22)Gains and losses from remeasurement at fair value 8 5Changes in scope of consolidation and translation adjustment (1) 20 (79)Other - -AT 31 DECEMBER 120 79(1) Changes in scope of consolidation and translation adjustment of <strong>2010</strong> mainly comprise the reclassifi cation of OPCI Vivéris and SPF1 (see note 17.1), partially offset by the consolidationof companies not previously consolidated.Available-for-sale financial assets held by the Group in <strong>2010</strong> and 2009 comprise only unlisted equities.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group91
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 19.2. Prepaid rentsPrepaid rents reflect the right to use land in some countries for an average period of 30 years, with the cost recognised over the period ofuse.NOTE 20. INVENTORIES€ millions <strong>2010</strong> 2009Goods 2,750 2,387Property development (work in progress) 212 241Gross 2,962 2,628Impairment of goods held in inventory (42) (35)Impairment of property development (work in progress) (27) (18)Total impairment (69) (53)INVENTORIES 2,892 2,575NOTE 21. TRADE RECEIVABLESNote 21.1. Breakdown€ millions <strong>2010</strong> 2009Trade receivables 978 923Accumulated impairment losses (107) (78)Finance receivables 969 751Accumulated impairment losses (97) (86)TRADE RECEIVABLES 1,744 1,509Note 21.2. Accumulated impairment losses on trade receivables€ millions <strong>2010</strong> 2009ACCUMULATED IMPAIRMENT LOSSES ON TRADE RECEIVABLESAt 1 January (78) (67)Charge (33) (22)Reversal 25 16Change in scope of consolidation (17) (4)Translation differences (3) (1)AT 31 DECEMBER (107) (78)ACCUMULATED IMPAIRMENT LOSSES ON FINANCE RECEIVABLESAt 1 January (86) (62)Charge (36) (55)Reversal 25 31Change in scope of consolidation - (1)Translation differences - -AT 31 DECEMBER (97) (86)The criteria for recognising impairment losses are set out in note 31.3 on counterparty risk.92 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 22. OTHER ASSETSNote 22.1. Breakdown€ millions <strong>2010</strong> 2009Other receivables 1,535 1,018Advances to non-consolidated companies 108 86Accumulated impairment losses on other receivables and advances (31) (33)Derivatives not qualifying for hedge accounting and cash flow hedges 6 -Prepaid expenses 140 128OTHER ASSETS 1,758 1,201Other receivables primarily include tax receivables, prepaid employee benefit expenses and receivables from suppliers. Prepaid expensesmainly include purchases, rents, other occupancy costs and insurance premiums.Note 22.2. Accumulated impairment losses on other assets€ millions <strong>2010</strong> 2009At 1 January (33) (28)Charge (9) (11)Reversal 7 12Change in scope of consolidation - (6)Reclassifications and other movements 5 -Translation differences - -AT 31 DECEMBER (31) (33)NOTE 23. NET CASH AND CASH EQUIVALENTSNote 23.1. Breakdown€ millions <strong>2010</strong> 2009Cash equivalents 1,526 1,617Cash 1,287 1,099Cash and cash equivalents 2,813 2,716Bank overdrafts (316) (352)NET CASH AND CASH EQUIVALENTS 2,497 2,364Gross cash and cash equivalents of the parent company and itswholly-owned subsidiaries amounted to approximately €1,398 million.Total cash and cash equivalents of companies that are not whollyownedamounted to approximately €553 million. The balancecorresponds to the cash and cash equivalents of proportionatelyconsolidated companies, amounting to approximately €862 million(GPA, Banque du <strong>Groupe</strong> <strong>Casino</strong>, <strong>Mo</strong>noprix). Except for proportionatelyconsolidated companies for which dividend payments are decidedjointly with <strong>Groupe</strong> <strong>Casino</strong>’s partner, the cash and cash equivalentsof fully consolidated companies are entirely available to the Groupas the Group controls their dividend policy despite the presence ofnon-controlling interests.Note 23.2. Breakdown of cash and cash equivalents by currency€ millions <strong>2010</strong> % 2009 %Euro 1,508 54 1,993 73US dollar 39 1 29 1Argentine peso 31 1 15 1Brazilian real 676 24 311 11Thai baht 128 5 42 2Colombian peso 312 11 216 8Vietnamese dong 57 2 24 1Uruguayan peso 32 1 20 1Venezuelan bolivar - - 39 1Other 30 1 27 1CASH AND CASH EQUIVALENTS 2,813 100 2,716 100Registration Document <strong>2010</strong> | <strong>Casino</strong> Group93
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsCash and cash equivalents include the €187 million proceeds(€181 million at 31 December 2009) from sales of receivables fulfillingthe derecognition criteria of IAS 39, as explained in note 1.5.13.8.Cash equivalents at 31 December <strong>2010</strong> consisted of term deposits,euro-denominated money market mutual funds and other short-terminvestments. The Group applies the guidelines set out in the pressrelease published by the AFG-AFTE on 8 March 2006 concerning theclassification of money market funds as cash equivalents in accordancewith IAS 7 - Cash Flow Statements.NOTE 24. EQUITYNote 24.1. Share capitalAt 31 December <strong>2010</strong>, the share capital was €169,323,360 versus€168,852,310 at 31 December 2009, divided into 110,668,863fully-paid ordinary shares, each with a par value of €1.53.Under the shareholder authorisations given to the Board of Directors,the share capital may be increased immediately or in the future, by upto €150 million through the issuance of shares or share equivalentsother than bonus shares paid up by capitalising profits, reserves oradditional paid-in capital.Issued and fully-paid ordinary shares (number of shares) <strong>2010</strong> 2009At 1 January 110,360,987 97,769,191Shares issued on exercise of stock options 281,725 9,373New shares issued (1) 46 -New shares issued pursuant to share grants 51,550 77,169Cancellation of shares (25,445) -Conversion of preferred non-voting shares into ordinary shares (2) - 12,505,254AT 31 DECEMBER 110,668,863 110,360,987(1) In accordance with the 16th resolution passed by the shareholders at the annual general meeting of 29 April <strong>2010</strong>, the approval of the merger absorption of Viver by <strong>Casino</strong>, Guichard-Perrachon led to the issuance of 46 new shares.(2) In accordance with the 25th resolution passed by the shareholders at the annual general meeting of 19 May 2009, the preferred non-voting shares were converted into ordinary shares,increasing the share capital by €19 million.Note 24.2. Other equity€ millions <strong>2010</strong> 2009 adjustedAdditional paid-in capital(1)3,980 3,964Treasury shares 24.2.2 - (4)Equity instruments (deeply subordinated perpetual bonds) 24.2.3 600 600Other equity instruments 24.2.4 (4) (5)Reserves(2)2,624 1,961Translation reserve 24.2.5 951 372TOTAL OTHER EQUITY 8,151 6,888(1) Additional paid-in capital corresponds to cumulative premiums on shares issued for cash or in connection with mergers or acquisitions recorded in the parent company accounts, as wellas the legal reserve.(2) Reserves correspond to:– parent company reserves;– subsidiaries’ reserves;– the cumulative effect of changes in accounting policies and estimates and corrections of errors;– gains and losses from remeasurement at fair value of available-for-sale fi nancial assets;– gains and losses on cash fl ow hedges recognised directly in equity;– the cumulative effect of share-based payment expense.Note 24.2.1. Share equivalentsThe Group has granted stock options to its employees under theplans presented in note 25.Note 24.2.2. Treasury sharesTreasury shares correspond to shareholder-approved buybacks of<strong>Casino</strong> Guichard-Perrachon SA shares. At 31 December <strong>2010</strong>, a totalof 6,928 shares were held in treasury. These shares were acquiredat a total cost of less than €1 million.In January 2005, the Group signed a liquidity contract with theRothschild investment bank in accordance with European Commissionregulation 2273/2003/EC. The liquidity account was set up with a totalof 700,000 <strong>Casino</strong>, Guichard-Perrachon shares and €40 million. At31 December <strong>2010</strong>, no treasury shares were held under the contract.The cash earmarked for the liquidity account is invested in moneymarket mutual funds. These funds qualify as cash equivalents andare therefore included in net cash and cash equivalents in the cashflow statement.94 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 24.2.3. Deeply subordinated perpetual bondsAt the beginning of 2005, the Group issued €600 million worthof deeply subordinated perpetual bonds (TSSDI). The bonds areredeemable solely at the Group’s discretion and interest paymentsare due only if the Group pays a dividend on its ordinary shares in thepreceding twelve months. For these reasons, the bonds are carriedin equity, for an amount of €600 million.The bonds pay interest at 7.5% in the first three years, and thereafterat the 10-year constant maturity swap rate plus 100 basis points,capped at 9%. Interest payments are deducted from equity, net ofthe tax effect.Note 24.2.4. Other equity instrumentsThe Group held €4 million of calls on its ordinary shares at31 December <strong>2010</strong> (€5 million at 31 December 2009).Note 24.2.5. Translation reserveThe translation reserve corresponds to cumulative exchange gains andlosses on translating the equity of foreign subsidiaries and receivablesand payables corresponding to the Group’s net investment in thesesubsidiaries, at the closing rate.Translation reserves by country at 31 December <strong>2010</strong>€ millionsAttributable to owners of the parent Attributable to non-controlling interests TotalAt1 January<strong>2010</strong>Exchangedifferencesfor the periodAt31 December<strong>2010</strong>At1 January<strong>2010</strong>Exchangedifferencesfor the periodAt31 December<strong>2010</strong>At31 December<strong>2010</strong>Brazil 377 250 626 (3) (2) (4) 622Argentina (47) (1) (48) - - - (48)Colombia 6 120 126 (24) 92 68 194Uruguay 33 14 47 1 - 1 48Venezuela (see note 2.2) 11 (11) - (4) 4 - -United States (7) 6 (1) - - - (1)Thailand 11 64 76 (3) 38 35 110Poland 35 4 39 - - - 39Indian Ocean (6) - (6) (3) - (3) (8)Vietnam (5) - (4) (2) - (1) (6)TOTAL 409 447 856 (37) 132 95 951<strong>Mo</strong>vements during the period mainly stem from the appreciation of the Brazilian, Colombian and Thai currencies against the euro.Translation reserves by country at 31 December 2009€ millionsAttributable to owners of the parent Attributable to non-controlling interests TotalAt1 January2009Exchangedifferencesfor the periodAt31 December2009At1 January2009Exchangedifferencesfor the periodAt31 December2009At31 December2009Brazil (18) 395 377 2 (5) (3) 374Argentina (31) (16) (47) - - - (47)Colombia (45) 51 6 (55) 31 (24) (18)Uruguay (6) 39 33 - - 1 34Venezuela (26) 37 11 (5) 2 (4) 7United States (4) (3) (7) - - - (7)Thailand 11 - 11 (4) 1 (3) 8Poland 32 4 35 - - - 35Indian Ocean (5) - (6) (3) - (3) (8)Vietnam (1) (4) (5) (1) (1) (2) (6)TOTAL (94) 504 409 (66) 29 (37) 372<strong>Mo</strong>vements in 2009 mainly stemmed from the appreciation of the Brazilian and Colombian currencies against the euro. They also included€12 million in exchange differences reclassified to the income statement upon acquisitions and disposals of GPA shares.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group95
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 24.3. Notes to the consolidated statement of comprehensive income€ millions <strong>2010</strong> 2009Available-for-sale financial assets 2 4Change in fair value during the period 3 4Reclassification to profit or loss 2 1Income tax (expense)/benefit (3) (2)Cash flow hedges 13 (4)Change in fair value during the period 18 (44)Reclassification to profit or loss (5) 45Income tax (expense)/benefit - (4)Exchange differences (note 24.2.5) 579 532Change in translation differences during the period 633 545Reclassification to profit or loss due to disposals during the period (54) (13)Actuarial gains and losses and asset ceiling adjustments (note 27.1.3) (12) (4)Change during the period (18) (6)Income tax (expense)/benefit 6 2TOTAL 583 528Note 24.4. DividendsThe recommended <strong>2010</strong> dividend has been set at €2.78 per ordinary share. The dividend is subject to approval at the next Annual Shareholders’Meeting and is therefore not reflected in the consolidated financial statements at 31 December <strong>2010</strong>.Cash dividends paid and recommended€ millionsOrdinary dividendsNet dividendin euros Number of shares Treasury shares <strong>2010</strong> recommended 20092009 €2.65 110,360,987 85,000 292<strong>2010</strong> dividend (recommended) (1) €2.78 110,668,863 - 308Dividends on deeply subordinatedperpetual bonds, net of tax2009 €30.14 600,000 - 18<strong>2010</strong> €25.31 600,000 - 15(1) The recommended <strong>2010</strong> dividend per share has been calculated on the basis of the total number of shares outstanding at 31 December <strong>2010</strong>. It will be modifi ed in 2011 to exclude theactual number of treasury shares held on the payment date.Note 24.5. Capital managementThe Group’s policy is to maintain a strong capital base in order toensure the confidence of investors, creditors and the markets, andto support the Group’s future business development.The Group occasionally purchases its own shares in the market, forthe purpose of allocating them to the liquidity contract and generatingmarket activity or keeping them to cover stock option plans, employeeshare ownership plans or share grant plans for Group employees andexecutive officers.NOTE 25. SHARE-BASED PAYMENTSSince 1987, stock options or share grants have been grantedin December of each year to new managers who have completedone year’s service with the Group, and the number of options held bymanagers promoted to a higher grade has been adjusted.Share grants are also made to certain company managers and tostore managers. The shares vest in tranches, subject to continuedemployment with the Group and the attainment of Group performancetargets for the period concerned.Note 25.1. Impact of share-based paymentson earnings and equityThe net expense of €19 million in <strong>2010</strong> (€15 million in 2009) wasrecognised by adjusting equity at 31 December <strong>2010</strong> by the sameamount.96 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 25.2. Details of <strong>Casino</strong>, Guichard-Perrachon stock option plansIn accordance with IFRS 2, all stock options granted were valued using the Black & Scholes option pricing model.Details of the plans and the main assumptions applied to value options on new shares<strong>2010</strong> 2009 2008Grant date 29 April 4 December 8 April 5 December 14 AprilExpiry date 28 October 2015 3 June 2015 7 October 2014 4 June 201413 October2013Share price on the grant date €65.45 €58.31 €48.37 €43.73 €75.10Option exercise price €64.87 €57.18 €49.47 €49.02 €76.73Number of options granted 48,540 72,603 37,150 109,001 434,361Estimated life of the options (in years) 5.5 5.5 5.5 5.5 5.5Projected dividend yield 5% 5% 5% 5% 5%Projected volatility 29.32% 30.02% 29.60% 26.77% 24.04%Risk-free interest rate 1.69% 2.09% 2.44% 3.05% 4.17%Fair value of stock options €10.33 €8.59 €5.07 €6.14 €13.61NUMBER OF OPTIONS OUTSTANDING 48,115 72,281 36,150 102,578 358,0352007 2006 2005Grant date 7 December 13 April 15 December 13 April 8 DecemberExpiry date 6 June 2013 12 October 2012 14 June 2012 12 October 2011 7 June 2011Share price on the grant date €77.25 €75.80 €70.00 €59.80 €56.95Option exercise price €74.98 €75.75 €69.65 €58.16 €56.31Number of options granted 54,497 362,749 53,708 354,360 50,281Estimated life of the options (in years) 5.5 5.5 5.5 5.5 5.5Projected dividend yield 5% 5% 2% 2% 2%Projected volatility 25.27% 23.55% 25.11% 25.87% 21.19%Risk-free interest rate 4.85% 4.78% 3.99% 3.94% 3.21%Fair value of stock options €18.18 €16.73 €14.31 €11.88 €9.00NUMBER OF OPTIONS OUTSTANDING 39,031 229,489 29,054 135,873 19,880Details of share grant plansGrant date<strong>2010</strong>3 December 22 October 29 April 29 AprilEXPIRY• Vesting date3 December 2013 22 October 2012 29 April 2013 29 April 2013• End of lock-up period3 December 2015 22 October 2014 29 April 2015 29 April 2015Share price on the grant date €69.33 €67.68 €65.45 €65.45Number of shares 17,268 4,991 296,765 51,394Fair value of the share €55.35 €57.07 €50.86 €50.86Continued employment conditions Yes Yes Yes YesPerformance conditions No No Yes NoPerformance condition applicable(1) (1) (2) (2)NUMBER OF SHARES BEFORE APPLICATIONOF PERFORMANCE CONDITIONS 17,268 4,991 287,415 48,326Registration Document <strong>2010</strong> | <strong>Casino</strong> Group97
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsGrant date2009 20084 December 8 April 8 April 5 December 14 April 14 AprilEXPIRY• Vesting date4 December 2012 8 April 2011 8 October 2011 4 December 2011 13 October 2011 13 April 2011• End of lock-up period 4 December 2014 8 April 2013 8 October 2013 4 December 2013 13 October 2013 13 October 2013Share price on the grant date €58.31 €48.37 €48.37 €43.73 €75.10 €75.10Number of shares 24,463 8,000 492,273 500 183,641 8,017Fair value of the share €42.47 €36.32 €34.18 €33.16 €61.92 €61.92Continued employmentconditions Yes Yes Yes Yes Yes YesPerformance conditions No No Yes No Yes NoPerformance conditionapplicable(1) (1) (2) (1) (2) (1)Number of shares beforeapplication of performanceconditions 24,463 8,000 432,765 500 5,758 6,517(1) No performance conditions.(2) The performance target for the share grant plan of 14 April 2008, 8 April 2009 and 29 April <strong>2010</strong> depends upon the Company. At 31 December <strong>2010</strong>, the applicable performance conditionswere as follows:Plans granted on 29 April <strong>2010</strong> 8 April 2009 14 April 2008<strong>Mo</strong>noprix 74%(based on 11,945 shares)Codim 2 100%(based on 5,100 shares)Other companies 100%(based on 270,370 shares)98%(based on 8,960 shares)100%(based on 5,350 shares)96%(based on 418,455 shares)50%(based on 2,118 shares)100%(based on 3,640 shares)0%Performance conditions mainly involve organic sales growth, trading profit levels, and net financial debt.Details of plans on <strong>Casino</strong>, Guichard-Perrachon sharesStock option plansNumber of outstanding optionsWeighted average exercise price(in €)At 1 January 2009 2,515,543 €71.14Of which, vested options 1,283,320Options granted during the period 109,753 €54.57Options exercised during the period (9,373) €58.06Options cancelled during the period (1,210,279) €75.73Options that lapsed during the period - -At 31 December 2009 1,405,644 €65.98Of which, vested options 527,581 €62.05Options granted during the period 48,540 €64.87Options exercised during the period (281,725) €57.94Options cancelled during the period (120,974) €69.75Options that lapsed during the period (41,705) €58.16AT 31 DECEMBER <strong>2010</strong> 1,009,780 €68.04Of which, vested options 414,296 €72.9498 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Share grant plans, not yet vestedNumber of outstanding sharesAt 1 January 2009 558,809Shares granted 524,736Shares cancelled (104,165)Shares issued (77,169)At 31 December 2009 902,211Shares granted 370,418Shares cancelled (307,004)Shares issued (129,622)AT 31 DECEMBER <strong>2010</strong> 836,003NOTE 26. PROVISIONSNote 26.1. Breakdown and movements€ millions1 January<strong>2010</strong>AdjustedIncreases<strong>2010</strong>Reversals(used)<strong>2010</strong>Reversals(surplus)<strong>2010</strong>Change inscope ofconsolidationTranslationadjustmentOther31 December<strong>2010</strong>Product warranty costs 7 7 (6) - - - - 7Pensions (note 27) 107 66 (54) (2) - 2 23 143Jubilees 21 - (1) - - - 1 21Long-service awards 15 15 (15) - - - - 15Claims and litigation 57 15 (9) (6) - 4 2 64Other liabilities and charges 256 209 (138) (11) (7) 9 - 319Restructuring 3 17 (3) (67) 67 - - 16Risk relating to the TRS (1) 17 - - (17) - - - -TOTAL 482 330 (226) (103) 60 15 26 585of which short-termprovisions 248 233 (145) (84) 55 4 (33) 279of which long-termprovisions 234 96 (80) (18) 5 11 59 306(1) See note 26.2.Provisions for claims and litigation and for other liabilities and chargescorrespond to a large number of provisions for employee claims,property-related claims (concerning construction or refurbishmentwork, rents, tenant evictions, etc.), tax claims and business claims(trademark infringement, etc.).Note 26.2. Risk relating to the total return swapon Exito sharesOn 19 December 2007, <strong>Casino</strong> announced an amendment to theshareholders’ agreement entered into with Exito on 7 October2005.On the same date, the minority shareholders of Suramericana deInversiones S.A. and other Colombian strategic partners enteredinto reciprocal put and call options with Citi on their interests in Exito(5.8% and 4.4% respectively). On 8 January 2008, Grupo Nacionalde Chocolates SA sold its interest in Exito to Citi. Consequently, thesepartners have renounced the put option granted to them under thehistorical shareholders’ agreement with <strong>Casino</strong>, thereby releasing<strong>Casino</strong> from its commitment to purchase their stakes in Exito.Suramericana sold its 5.8% interest in Exito on 19 January <strong>2010</strong> forCOP 21,804 per share.The put options on the 4.4% owned by other Colombian strategicpartners are exercisable for a period of three months from 16 December<strong>2010</strong>, 2011, 2012, 2013 and 2014. The call option is exercisable byCiti for a period of three months from 16 March 2015. The exerciseprice of the options is the higher of:■■■■a fixed price of COP 19,477 per share, revalued for inflation at+1%;a multiple of EBITDA less net financial debt;a multiple of sales less net financial debt;the average quoted share price over the preceding six months.Concurrently with these transactions, on 8 January 2008 and19 January <strong>2010</strong>, <strong>Casino</strong> entered into a total return swap (TRS) withCiti on the interests in Exito acquired respectively from Chocolates andSuramericana, with net settlement due in cash. The TRS is valid forthree years and three months. <strong>Casino</strong> also undertook to enter into afurther TRS contract on the combined interests of the other partners(4.4% in total) subject of the call and put options referred to above.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group99
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsDuring the first half of <strong>2010</strong>, the Chocolates TRS was unwound givingrise to a loss of €5 million.The Suramericana TRS contract states that <strong>Casino</strong> will receive thedifference between the market price (sale price of Citi’s interest)and a minimum sum of COP 21,804 per share for the interest soldby Suramericana, if positive, and will pay the difference to Citi ifnegative.The TRS on the 4.4% interest held by the other Colombian strategicpartners will have the same terms and conditions as the Chocolatesand Suramericana TRSs and will be effective for a maximum periodof three years and three months from the date of exercise of therelevant call or put options.<strong>Casino</strong> will receive or pay as applicable the difference between thesale price of the interest on the market and the TRS entry price (i.e.the sale price paid by Citi to the minority shareholders on the basisdescribed above).<strong>Casino</strong> has no contractual commitment nor the option to purchasethe shares from Citi at maturity of the TRS (net settlement in cash).The main risk for <strong>Casino</strong> is that the sale price received by Citi atmaturity of the TRS could be lower than the price paid by Citi tothe Colombian shareholders, and that <strong>Casino</strong> could be obliged topay Citi the difference, if negative, between the entry price (minorityshareholders’ put exercise price) and the exit price (market sale pricereceived by Citi).The risk has been measured on the basis of several factors:■■■the exercise price by the shareholders holding the 4.4% interestin Exito, which itself depends on when they elect to exercise theirput according to their assessment of market conditions and Exito’sfuture performance;the term of each TRS, which is a maximum of three years andthree months from the exercise date of the relevant put by theColombian partners;the market value of Exito shares on maturity of the TRSs.An independent bank has carried out several simulations to determinethe best time for the minority shareholders to exercise their put options.It has also estimated the market value of Exito shares at maturity ofthe TRSs using a multi-criteria approach based on forecast operatingperformance as set out in Exito’s business plan, investor expectationsand Exito’s share price.Given the specific features of these TRSs and the estimated associatedrisk (the share price was COP 23,360 on 31 December <strong>2010</strong>), theGroup made a €17 million provision reversal at the year-end, fullyextinguishing the provision originally recognised. The “central case”(most probable) simulation gives a positive value of €18 million at theyear-end, which is not recognised in the financial statements. The “highcase” (more optimistic) and “low case” (less optimistic) simulationsgive a positive value of €31 million and €7 million respectively. In linewith the accounting treatment applied in previous years, no assetwas recognised at 31 December <strong>2010</strong> given the uncertainty of thesecash flows valuations.NOTE 27. PENSION AND OTHER POST-EMPLOYMENT BENEFITOBLIGATIONSThe Group’s obligations under defined benefit plans are measured on an actuarial basis. They mainly concern lump-sum retirement allowancesand length-of-service awards in France.Note 27.1. Defined benefit planNote 27.1.1. SummaryThe following table shows a reconciliation of the obligations of all group companies and the provisions recognised in the consolidated financialstatements at 31 December <strong>2010</strong> and 2009.€ millionsFrance International Total<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009Present value of projected benefit obligationunder funded plans 166 140 - - 166 140Fair value of plan assets (55) (62) - - (55) (62)Funding requirement 111 79 - - 111 79Present value of projected benefit obligationunder unfunded plans 13 11 18 17 31 28Unrecognised surplus (asset ceiling) - - - -LIABILITY RECOGNISEDIN THE BALANCE SHEET 124 90 18 17 143 107100 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 27.1.2. Change in obligationFrance International Total€ millions<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009A - CHANGE IN ACTUARIAL LIABILITYActuarial liability at 1 January 152 137 17 365 168 502Service cost 13 11 1 1 14 11Interest cost 6 5 - - 6 5Change in scope of consolidation (1) - - - (350) - (350)Reduction in the liability (benefit payments) (11) (5) (2) - (13) (5)Actuarial gains and losses 19 6 - - 20 6Translation adjustment - - 2 1 2 1Employee contributions - - - - - -Impact of curtailments and settlements - (1) - - - (1)Change of assumptions - (1) - - - (1)Other movements - - - - - -Actuarial liability at 31 December A 179 152 18 17 197 168B - CHANGE IN PLAN ASSETSFair value of plan assets at 1 January 62 66 - 366 62 432Expected return on plan assets 1 1 - - 1 1Actuarial gains and losses 1 (1) - - 1 (1)Employer’s contribution - - - - - -Employee contributions - - - - - -Benefits paid during the period (9) (5) - - (9) (5)Change in scope of consolidation - - - (366) - (366)Other movements - - - - - -Fair value of plan assets at 31 December B 55 62 - - 55 62C - FUNDING REQUIREMENT A-B (124) (90) (18) (17) (143) (107)Asset ceiling - - - - - -NET RETIREMENT BENEFIT OBLIGATION (124) (90) (18) (17) (143) (107)(1) The change in scope of consolidation in 2009 concerns Super de Boer.Note 27.1.3. Balance of actuarial gains or losses recognised in equity€ millions <strong>2010</strong> 2009Provisions (decrease)/increase 15 (3)Deferred tax (assets) / liabilities (5) 1CUMULATIVE DECREASE/(INCREASE) IN EQUITY NET OF TAX 10 (2)Of which, attributable to owners of the parent 10 (2)GAIN/(LOSS), NET OF TAX, RECOGNISED DIRECTLY IN EQUITY (12) (4)Registration Document <strong>2010</strong> | <strong>Casino</strong> Group101
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 27.1.4. Reconciliation of liabilities in the balance sheetFrance International Total€ millions<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009At 1 January 90 71 17 30 107 100Actuarial gains or losses recognised in equity 18 6 - - 18 6Employee contributions - - - - - -Expense for the period 18 14 1 1 19 14Reduction in the liability (benefit payments) (8) (4) (2) - (10) (4)Partial reimbursement of plan assets 6 4 - - 6 4Change in scope of consolidation - - - (15) - (15)Unrecognised surplus (asset ceiling) - - - - - -Translation adjustment - - 2 1 2 1AT 31 DECEMBER 124 90 18 17 143 107Note 27.1.5. Breakdown of expense for the period€ millionsFrance International Total<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009Interest cost 6 5 - - 6 5Expected return on plan assets (1) (1) - - (1) (1)Expense recognised in other financialincome and expense 4 4 - - 5 4Service cost 13 11 1 1 14 11Past service cost - - - - - -Curtailments and settlements - (1) - - - (1)Expense recognised in employee benefitsexpense 13 10 1 1 14 10EXPENSE FOR THE PERIOD 18 14 1 1 19 14Note 27.1.6. Funding policyHistorical data€ millions <strong>2010</strong> 2009 2008 2007 2006Present value of projected benefit obligationunder funded plans 166 140 464 125 120Fair value of plan assets (55) (62) (432) (71) (84)Sub-total 111 78 32 54 36Present value of projected benefit obligationunder unfunded plans 31 28 38 23 11Asset ceiling - - 30 - -LIABILITY RECOGNISED IN THE BALANCE SHEET 143 107 100 77 47Plan assets comprise 87% in money market mutual funds and 11%in fixed-rate bonds.Note 27.1.7. Actuarial assumptionsIn France, the pension reform act was published on 10 November<strong>2010</strong>. It progressively increases the retirement age from 60 to 62in 2018, which had no material impact on the Group’s obligationin respect of lump-sum retirement allowances. The impact of thisnew law, which is not material, has been treated as an actuarial gainor loss, as were the impacts of all previous laws that affected theactuarial assumptions used to compute the obligation (particularlythe 2003 Fillon law).102 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3The following table summarises the main actuarial assumptions used to measure the obligation:FranceInternational<strong>2010</strong> 2009 <strong>2010</strong> 2009Discount rate 4.0% 4.9% – 5% 4.1% – 7.5% 4.9% – 8%Expected rate of future salary increases 2.0% to 2.5% 2.5% 3.0% 2.5% – 4%Retirement age 62-67 62-65 50-60 57-65Expected return on plan assets 4.0% 3.5% – 3.9% - -For French companies, the discount rate is determined by reference to the Bloomberg 15-year AA corporate composite index.The expected return on plan assets in <strong>2010</strong> corresponds to the actual rate achieved in the previous year. The actual return on plan assetsfor France was €1 million in <strong>2010</strong> and 2009.Note 27.1.8. Sensitivity of actuarial assumptionsA 50-basis point change in the discount rate would lead to a 6.1%change in the total obligation.A 10-basis point increase or decrease in the expected rate of salaryincreases would lead to a 1.2% increase or decrease in the totalobligation.A 50-basis point change in the expected return on plan assets wouldnot lead to any significant change in the income from plan assets.Note 27.1.9. Experience adjustmentsExperience adjustments represent the impact on the obligation ofdifferences between benefits estimated on the previous closingdate and benefits actually paid during the year. They amounted to€(8) million at 31 December <strong>2010</strong>.Note 27.1.10. Expected benef it payments in 2011The Group expects to pay benefits of approximately €8 million underits defined benefit plans in 2011.Note 27.2. Defined contribution plansDefined contribution plans correspond primarily to retirement plans. Thecost of these plans in <strong>2010</strong> was €280 million (€260 million in 2009).NOTE 28. FINANCIAL LIABILITIESFinancial liabilities amounted to €7,303 million at 31 December <strong>2010</strong> (€7,079 million in 2009), breaking down as follows:€ millions NoteNon-currentportion<strong>2010</strong> 2009CurrentportionTotalNon-currentportionCurrentportionBonds 28.2 4,397 472 4,869 4,760 427 5,187Other financial liabilities 28.3 1,027 1,063 2,090 676 755 1,431Finance leases 32.3 63 43 106 88 43 131Put options granted to ownersof non-controlling interests 28.4 1 57 58 3 77 80Fair value hedges (liabilities) 31 61 119 179 183 67 249FINANCIAL LIABILITIES 5,549 1,754 7,303 5,710 1,369 7,079TotalRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group103
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 28.1. Change in gross financial debt€ millions <strong>2010</strong> 2009At 1 January 7,079 6,993Fair value hedges (assets) (292) (195)Financial debt at 1 January (including hedging instruments) 6,787 6,799New borrowings (1) 803 1,789Repayments (principal and interest) (660) (1,444)Change in fair value of debt hedged (7) 35Exchange differences 117 123Change in scope of consolidation 23 42Change in put options granted to owners of non-controlling interests (2) (23) (555)Financial debt at 31 December (including hedging instruments) 7,040 6,787Gross financial liabilities at 31 December 7,303 7,079Fair value hedges (assets) (262) (292)(1) New borrowings stem mainly from the following transactions:• Bond exchange offers in <strong>2010</strong>On 8 February and 11 May <strong>2010</strong>, the Group made two bond exchange offers, reducing its 2011, 2012 and 2013 maturities by €190 million, €596 million and €481 million respectively (seenote 2.2).The two new issues were for €888 million and €508 million maturing in 2017 and 2018 respectively. Their effective interest rate is 5.85% and 5.25% respectively.The accounting treatment for the two exchanges was analysed in light of the criteria set out in IAS 39 on the derecognition of fi nancial liabilities. After analysis, they were treated as a rolloverof fi nancial liabilities as the revisions to the contractual terms and conditions were not deemed to be substantial. The impact of the exchange is treated as an adjustment to the carryingamount of the 2017 and 2018 bond issues and is amortised on an actuarial basis over the remaining term of the liability as adjusted. The same accounting treatment is applied to premiumsand unamortised issue expenses related to the exchanges, which will be amortised until 2017 and 2018 respectively. The impact of unwinding hedges of the original liabilities will also beamortised over the term of the new liabilities.• Financing transaction through Alamea InvestmentsIn April <strong>2010</strong>, the Group raised €300 million through a fi ve-year fi nancing facility from Alamea Investments, a Luxembourg company 95%-owned by a bank and 5% by the Group. AlameaInvestments is a special purpose entity and has been fully consolidated due to the way it is structured.The portion of the issue fi nanced by external investors is in substance external debt and is included in other borrowings and fi nancial liabilities.(2) The <strong>2010</strong> change in put options granted to owners of non-controlling interests concerns Franprix-Leader Price. The 2009 change in put options granted to owners of non-controlling interestsconcerns Franprix-Leader Price for €407 million, Exito (Carulla) for €118 million and GPA for €30 million.Note 28.2. BondsThe Group has a €8 billion EMTN (Euro Medium Term Notes)programme, which was signed and approved by Luxembourg’s CSSF(Commission de Surveillance du Secteur Financier) on 25 October<strong>2010</strong>. The programme expires on 25 October 2011. At 31 December<strong>2010</strong>, notes issued under the programme totalled €4,355 million. Thenotes are rated BBB- by Standard & Poor’s and Fitch Ratings andare not subject to any financial covenants.Notes issued and due in August 2012, April 2013, April 2014, January2015, February 2017 and November 2018 are subject to a redemptionoption at the investor’s discretion should the notes be downgradedto non-investment grade following a change of control.With the exception of the notes due April 2014, they are also subjectto a “step up” clause should the rating be downgraded to noninvestment grade.The notes are recognised and measured in the balance sheet atamortised cost based on the effective interest rate, taking accountof the adjustment in fair value arising from the hedging relationshipdocumented in accordance with IAS 39. The interest is recognisedin “Other financial liabilities”.104 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3€ millions Amount Interest rate (1) Effectiveinterest rate Issue date Due <strong>2010</strong> (2) 2009 (2)Bonds in euros<strong>2010</strong> bonds2003-<strong>2010</strong>2011 bonds2004-20112012 bonds2002-20122012 bonds2009-20122013 bonds2008-20132014 bonds2007-20142008-20142015 bonds2009-20152017 bonds<strong>2010</strong>-20172018 bonds<strong>2010</strong>-2018Bonds in USDPrivate placement notes2002-2011Bonds in COPExito bond issue2006-2011Exito bond issue2005-2013Carulla bond issue2005-2015Bonds in BRLGPA bond issue2007-2013GPA bond issue2009-2011GPA bond issue2009-2014400 F: 5.25 5.36% April 2003 April <strong>2010</strong> - 401210 F: 4.75 4.81% July 2004 July 2011 210 399439 F: 6.00 6.24% Feb. 2002June 2002Feb. 2012 449 717165 F: 7.88 8.03% Feb. 2009 August 2012 167 506719 F: 6.38 6.36% April 2008June 2008May 2009677 F: 4.88 5.19% April 2007June 2008April 2013 745 1,251April 2014 701 691750 F: 5.50 5.60% July 2009 Jan. 2015 782 761888 F: 4.38 5.85% Feb. <strong>2010</strong> Feb. 2017 833 -508 F: 4.48 5.25% May <strong>2010</strong> Nov. 2018 472 -255 F: 6.46 6.66% Nov. 2002 Nov. 2011 187 17110 V: CPI +4.98 12.53% April 2006 April 2011 12 1025 V: CPI +5.45 1<strong>3.4</strong>2% April 2006 April 2013 29 2549 V: CPI+7.50 15.15% May 2005 May 2015 59 51108 V: CDI +0.5% 12.95% March 2007 March 2011 toMarch 2013118 10828 V: 119% CDI 119% CDI June 2009 June 2011 30 2867 V: 109.5%CDI109.5% CDI Dec. 2009 Dec. 2012 toDec. 201474 67TOTAL BONDS 4,869 5,187(1) F (Fixed rate) - V (Variable rate) - CPI (Consumer Price Index) - CDI (Certifi cado de Deposito Interbancario).(2) The amounts shown above include the impact of fair value hedges.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group105
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 28.3. Other borrowings€ millions Amount Type of rate Issue date Due <strong>2010</strong> 2009FranceCalyon structured loan 183 Variable rate June 2007 June 2013 184 179Schuldschein loan 130 Variable rate May 2008 May 2013 130 131Alaméa 300 Variable rate April <strong>2010</strong> April 2015 300 -Other (1) 143 196InternationalLatin America (2) 768 379Other 51 5Bank overdrafts 316 352Accrued interest (3) 198 190TOTAL OTHER BORROWINGS 2,090 1,431(1) Including Franprix-Leader Price for €86 million in <strong>2010</strong> and €158 million in 2009.GPA for €622 million and Exito for €144 million in <strong>2010</strong> (€199 million and €180 million respectively in 2009).(2) The amount for GPA includes the liability arising from the agreement with the Sendas family (see note 32.2).(3) Accrued interest relates to all fi nancial liabilities including bonds.Conf irmed bank lines of credit€ millions Interest rateLess thanone yearDue<strong>Mo</strong>re thanone yearAmount ofthe facilityDrawdowns<strong>Casino</strong>, Guichard-Perrachon syndicated credit line (1) Variable rate - 1,200 1,200 -Other confirmed bank lines of credit Variable rate 104 690 794 5(1) The €1,200 million syndicated line of credit was renewed in August <strong>2010</strong> for fi ve years.Note 28.4. Put options granted to owners of non-controlling interestsThese put options correspond to liabilities towards various counterparties arising from commitments made by the Group to purchase sharesin consolidated companies. They have therefore been recognised as financial liabilities and break down as follows at 31 December <strong>2010</strong>:€ millions % interest Commitment PriceFranprix-Leader Price (1)26.00 to84.00%Fixed orvariableexercisepriceCurrentfinancialliabilitiesNon-currentfinancialliabilitiesGoodwill16.00 to74.00% 44 F/V 44 1 91Lanin/Devoto (Uruguay) (2) 96.55% <strong>3.4</strong>5% 13 F 13 - 13TOTAL COMMITMENTS 58 57 1 104(1) Put options granted to subsidiaries of the Franprix-Leader Price sub-group. Their value is mainly based on net profi t. A +/- 10% change in the indicator would have an impactof +/- €1 million. They expire between 2011 and 2043.(2) The option is exercisable until 21 June 2021.106 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 28.5. Net debt€ millionsNon-currentportion<strong>2010</strong> 2009CurrentportionTotalNon-currentportionCurrentportionBonds 4,397 472 4,869 4,760 427 5,187Other financial liabilities 1,027 1,063 2,090 676 755 1,431Finance leases 63 43 106 88 43 131Put options granted to owners of non-controlling interests 1 57 58 3 77 80Fair value hedges (liabilities) 61 119 179 183 67 249Gross financial liabilities 5,549 1,754 7,303 5,710 1,369 7,079Fair value hedges (assets) (150) (112) (262) (176) (116) (292)Other financial assets (83) (299) (382) - - -Cash and cash equivalents - (2,813) (2,813) - (2,716) (2,716)Cash and cash equivalents and other financial assets (233) (3,224) (3,457) (176) (2,832) (3,008)NET DEBT 5,316 (1,470) 3,845 5,534 (1,463) 4,072TotalNote 28.6. Maturities of liabilitiesAt 31 December <strong>2010</strong>€ millions Carrying amountDue withinone yearDue in oneto five yearsDue beyondfive yearsBond issues 4,869 472 3,020 1,376Other financial liabilities 2,090 1,063 995 30Finance leases 106 43 55 9Put options granted to owners of non-controlling interests 58 57 1 -Fair value hedges (liabilities) 179 119 50 10Trade payables 4,822 4,822 - -Other liabilities 3,510 3,273 208 29TOTAL 15,634 9,849 4,329 1,455of which non-current 5,784Maturities at 31 December 2009€ millions Carrying amountDue withinone yearDue in oneto five yearsDue beyondfive yearsBond issues 5,187 427 3,992 769Other financial liabilities 1,431 755 643 33Finance leases 131 43 76 12Put options granted to owners of non-controlling interests 80 67 3 -Fair value hedges (liabilities) 249 77 183Trade payables 4,327 4,327 - -Other liabilities 2,972 2,786 174 11TOTAL 14,379 8,482 5,072 825of which non-current 5,898Registration Document <strong>2010</strong> | <strong>Casino</strong> Group107
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNOTE 29. OTHER LIABILITIES€ millions<strong>2010</strong> 2009Non-current Current Total Non-current Current TotalDerivative liabilities - 6 6 - 12 12Accrued taxes and employee benefitsexpense 206 1,261 1,467 161 1,277 1,438Other liabilities 31 759 789 25 547 572Amounts due to suppliers of fixed assets - 257 257 - 151 151Current account advances - 30 30 - 51 51Finance payables (credit business) - 796 796 - 583 583Deferred income - 165 165 - 166 166TOTAL 237 3,273 3,510 186 2,786 2,972The table below gives a breakdown of confirmed bank credit lines relating to the credit business at 31 December <strong>2010</strong>:€ millions Interest rateLess thanone yearDue<strong>Mo</strong>re thanone yearAmount ofthe facilityDrawdownsCredit activity refinancing facility Variable rate 143 157 300 143NOTE 30. FAIR VALUE OF FINANCIAL INSTRUMENTSNote 30.1. Carrying amount and fair value of financial assets and liabilitiesNote 30.1.1. Financial assetsThe following table compares the carrying amount of financial assets with their fair value.31 December <strong>2010</strong>€ millionsFinancial assetsCarryingamount(A)<strong>2010</strong> Carrying amount <strong>2010</strong>Nonfinancialassets(B)Totalfinancialassets(A) - (B)Financialassets atfair valuethroughprofit orlossHeld-tomaturityinvestmentsLoans andreceivablesAvailablefor-salefinancialassetsNon-current financial assets 648 177 471 - - 351 120 471Non-current fair value hedges (assets) 150 - 150 150 - - - 150Trade receivables 1,744 - 1,744 - - 1,744 - 1,744Other assets 1,758 700 1,059 6 - 1,053 - 1,059Current fair value hedges (assets) 112 - 112 112 - - - 112Cash and cash equivalents 2,813 - 2,813 761 - 2,052 - 2,813Fairvalue108 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements331 December 2009€ millionsFinancial assetsCarryingamount(A)2009 Carrying amount 2009Nonfinancialassets(B)Totalfinancialassets(A) - (B)Financialassets atfair valuethroughprofitor lossHeld-tomaturityinvestmentsLoans andreceivablesAvailablefor-salefinancialassetsNon-current financial assets 409 122 287 - - 208 79 287Non-current fair value hedges (assets) 176 - 176 176 - - - 176Trade receivables 1,509 - 1,509 - - 1,509 - 1,509Other assets 1,201 528 673 - - 673 - 673Current fair value hedges (assets) 116 - 116 116 - - - 116Cash and cash equivalents 2,716 - 2,716 1,617 - 1,099 - 2,716FairvalueThe fair value of cash and cash equivalents, trade receivables and other current financial assets is deemed to be the same as the carryingamount given their short maturity.Note 30.1.2. Financial liabilitiesThe following tables compare the carrying amount of financial liabilities with their fair value.€ millionsFinancial liabilitiesCarryingamount (A)<strong>2010</strong> Carrying amount <strong>2010</strong>Non-financialliabilities(B)Totalfinancialliabilities(A) - (B)Liabilitiesat fair valuethroughprofit or lossLiabilities atamortisedcostFair valueof financialliabilitiesBonds 4,869 - 4,869 - 4,869 5,027Other financial liabilities 2,090 - 2,090 - 2,090 2,090Finance leases 106 - 106 - 106 106Fair value hedges (liabilities) 179 - 179 179 - 179Put options granted to ownersof non-controlling interests 58 - 58 44 13 58Trade payables 4,822 - 4,822 - 4,822 4,822Other liabilities 3,510 1,324 2,186 6 2,180 2,186€ millionsFinancial liabilitiesCarryingamount (A)2009 Carrying amount 2009Non-financialliabilities(B)Totalfinancialliabilities(A) - (B)Liabilitiesat fair valuethroughprofit or lossLiabilities atamortisedcostFair valueof financialliabilitiesBonds 5,187 - 5,187 - 5,187 5,416Other financial liabilities 1,431 - 1,431 - 1,431 1,441Finance leases 131 - 131 - 131 131Fair value hedges (liabilities) 249 - 249 249 - 249Put options granted to ownersof non-controlling interests 80 - 80 80 - 80Trade payables 4,327 - 4,327 - 4,327 4,327Other liabilities 2,972 1,466 1,506 12 1,494 1,506The fair value of bonds issued is based on the latest known quoted price on the closing date.The fair value of other financial liabilities is determined using valuation methods such as discounted cash flows, taking account of the Group’scredit risk and interest rate levels on the closing date.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group109
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 30.2. Fair value hierarchyfor financial instrumentsEntities are required to classify fair value measurements using a fairvalue hierarchy based on the valuation method used (quoted pricesor valuation techniques). The hierarchy has three levels as follows:■ level 1: financial instruments measured using quoted prices in anactive market;■ level 2: financial instruments measured using valuation techniquesbased on observable market data;■ level 3: financial instruments measured using valuation techniquesthat are not based on observable market data.The table below shows the fair values of financial assets and liabilitiesbased on this hierarchy at 31 December <strong>2010</strong>:€ millionsAssetsQuoted price= level 1Observablemarket data= level 2Hierarchy of fair valuesNo observablemarket data= level 3 <strong>2010</strong>Available-for-sale financial assets - - 85 85Fair value hedges (assets) - 262 - 262Other derivative assets 1 5 - 6Cash equivalents 758 3 - 761LiabilitiesFair value hedges (liabilities) - 179 - 179Other derivative liabilities - 6 - 6Put options granted to owners of non-controlling interests - - 44 44The valuation techniques used to measure fair value are as follows:■■Available-for-sale financial assetsAvailable-for-sale financial assets do not include any listed securities.Their fair value is typically determined on the basis of widely usedvaluation techniques.If their fair value cannot be determined reliably, they are not includedin this note.Put options granted to owners of non-controlling interestsThe fair value of put options granted to owners of non-controllinginterests are measured in accordance with the contractual calculationterms and are discounted where applicable. These put options aremainly classified in Level 3. Put options whose price is consideredto be variable are not included in the above table.■Derivative liabilitiesDerivative financial instruments are valued (internally or externally)on the basis of the usual valuation techniques for this type ofinstrument. Valuation models are based on observable market data(mainly the yield curve) and counterparty quality. These instrumentsare mainly classified in Level 2.NOTE 31. FINANCIAL RISK MANAGEMENT OBJECTIVESAND POLICIESThe main risks associated with the Group’s financial instruments aremarket risks (currency, interest rate and equity risk), counterpartyrisk and liquidity risk.The Group uses derivative financial instruments such as interestrate swaps, currency swaps and forward instruments to manageand mitigate its exposure to interest rate and currency risk. Theseinstruments are either quoted on organised markets or over-thecounterinstruments transacted with first-class counterparties. Noderivative instruments are acquired for speculative purposes.110 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 31.1. Breakdown of derivative financial derivativesThe table below shows a breakdown of derivative financial instruments by type of risk and accounting classification:€ millions Note <strong>2010</strong>Derivative assetsInterestrate riskCurrencyriskOthermarket risks 2009Financial instruments at fair value through profit or loss 22 - - - - 1Cash flow hedges 22 6 - 6 - 0Fair value hedges 28.5 262 262 - - 292TOTAL DERIVATIVE ASSETS 269 262 6 - 293of which current 119 112 6 - 116of which non-current 150 150 - - 176Derivative liabilitiesFinancial instruments at fair value through profit or loss 29 4 4 - - 11Cash flow hedges 29 2 1 2 - 1Fair value hedges 28.5 179 179 - - 249TOTAL DERIVATIVE LIABILITIES 186 184 2 - 261of which current 125 123 2 - 79of which non-current 61 61 - - 183At 31 December <strong>2010</strong>, the IFRS cash flow hedge reserve totalled€(9) million (€(22) million at 31 December 2009). The ineffective portionof these cash flow hedges is not material.The fair value of derivative instruments that do not qualify for hedgeaccounting under IAS 39 amounted to €(4) million at 31 December<strong>2010</strong> (€(10) million at 31 December 2009).Note 31.2. Market riskNote 31.2.1. Interest rate riskThe Group’s objective is to reduce its cost of debt by limiting theimpact of interest rate changes on its income statement. Groupstrategy therefore consists of dynamically managing debt by convertingall borrowings to variable rate in order to benefit from declines ininterest rates, while also setting up hedges as a protection againstrate increases.Various derivative instruments are used to manage interest rate risks,mainly interest rate swaps. Not all of these instruments qualify forhedge accounting; however, all interest rate instruments are used inconnection with the above risk management policy.Group financial policy consists of managing finance costs by combiningvariable and fixed rate derivatives.Sensitivity analysis to a change in interest rates€ millions <strong>2010</strong> 2009Borrowings 978 1,179Finance lease liabilities 43 43Bank overdrafts and spot loans 316 352Total variable rate borrowings (excluding accrued interest) (1) 1,336 1,573Cash equivalents 1,526 1,617Cash 1,285 1,099TOTAL CASH AND CASH EQUIVALENTS 2,811 2,716NET POSITION BEFORE HEDGING (1,475) (1,143)Derivative financial instruments 3,501 2,028NET POSITION AFTER HEDGING 2,026 885Net position to be rolled over within one year 2,026 885Effect of a 1-point change in interest rates 20 9Average remaining duration of hedges 1 0.95Effect of a 1-point change in interest rates on finance costs 20 8<strong>2010</strong> finance costs, net 345 343Effect of a 1-point change in interest rates, as a % of finance costs, net 5.87% 2.44%(1) Adjustable rate fi nancial assets and liabilities are considered as maturing on the interest reset date. The above total does not include liabilities not exposed to interest rate risk,corresponding mainly to put options granted to owners of non-controlling interests and accrued interest.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group111
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsTo protect its financial margin from interest rate volatility, Banque du<strong>Groupe</strong> <strong>Casino</strong> hedges its interest rate risk, as follows:■■borrowings used to finance fixed rate loans are either convertedto fixed rate or hedged by fixed rate caps. The notional amountof the hedges is adjusted to reflect the gradual reduction in theoutstanding balance of the corresponding loans;borrowings used to finance adjustable rate loans are convertedto fixed rate over a rolling period of at least three months, for anamount corresponding to forecast loans for the period.The Group’s other financial instruments are not interest-bearing andare therefore not exposed to any interest rate risk.Note 31.2.2. Exposure to currency riskThe Group is exposed to currency risks mainly through purchasesmade in a currency other than the Group’s functional currencyand particularly purchases in US dollars, which are hedged usingforward currency purchases and currency swaps. Group policyconsists of hedging substantially all budgeted purchases usingderivative instruments with the same maturities as the underlyingtransactions.Due to its geographical diversification, the Group is also exposed totranslation risk, in other words its balance sheet and income statementare sensitive to movements in exchange rates on consolidation ofthe financial statements of its foreign subsidiaries outside the eurozone.The Group’s net exposure based on notional amounts after hedging is mainly to the following currencies (excluding the functional currenciesof entities):€ millions USD JYP EURTotal <strong>2010</strong>exposureTotal 2009exposureTrade receivables exposed (10) - - (10) (1)Other financial assets exposed (434) - - (434) (14)Trade payables exposed 90 - 2 92 80Financial liabilities exposed 456 19 1 477 480Gross exposure payable/(receivable) 101 19 3 124 545Trade receivables hedged (6) - - (6) -Other financial assets hedged - - - - -Trade payables hedged 25 - - 25 2Financial liabilities hedged 450 19 - 470 479NET EXPOSURE PAYABLE/(RECEIVABLE) (369) - 3 (365) 64The net balance sheet exposure of €(365) million at 31 December<strong>2010</strong> mainly includes receivables from the Venezuelan governmentdenominated in US dollars for €338 million. These receivables havenot been hedged.At 31 December 2009, the net balance sheet exposure of €64 millionbroke down as follows by currency:■■US dollar: €65 million;euro: €(1) million.Sensitivity of net exposure after hedging to exchangerate changesA 10% appreciation or depreciation of the euro against thosecurrencies at 31 December would have increased or decreased netprofit by the amounts shown in the table below. For the purposes ofthe analysis, all other variables, particularly interest rates, are assumedto be constant.€ millions <strong>2010</strong> 2009US dollar (37) 7Japanese yen - -Other - -TOTAL (37) 6112 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Exchange rates against the euro<strong>2010</strong> 2009(exchange rates against the euro)Closing rate Average rate Closing rate Average rateUS dollar (USD) 1.3362 1.3268 1.4406 1.3933Polish zloty (PLN) 3.9750 3.9950 4.1045 4.3298Argentine peso (ARS) 5.2768 5.1898 5.4992 5.2020Uruguayan peso (UYP) 26.5784 26.6237 28.1878 31.3083Thai baht (THB) 40.1700 42.0824 47.9860 47.7751Colombian peso (COP) 2,558.3400 2,519.4100 2,944.9400 2,982.8900Brazilian real (BRL) 2.2177 2.3344 2.5113 2.7706Venezuelan bolivar (VEF) (see note 2) 5.7340 5.6598 3.0961 2.9924Vietnamese dong (VND) 26,031.7000 24,690.3918 26,644.8000 23,786.8985The exchange rates used for the Japanese yen were €1 = ¥108.66 at 31 December <strong>2010</strong> and €1 = ¥133.28 at 31 December 2009.Note 31.3. Counterparty riskThe Group is exposed to various aspects of counterparty risks in itsoperating activities, its short-term investment activities and its interestrate and currency hedging instruments.Counterparty risk related to trade receivablesRetail credit riskGroup policy consists of checking the financial health of all customersapplying for credit. Customer receivables are regularly monitored andthe Group’s exposure to the risk of bad debts is not material.Trade receivables break down as follows by maturity€ millionsReceivablesnot yet due,not impairedReceivables past due on the balance sheet dateReceivablesnot morethanone monthpast dueReceivablesbetweenone andsix monthspast dueReceivablesmore thansix monthspast dueImpairedreceivables<strong>2010</strong> 725 40 28 20 88 165 9782009 740 45 22 17 84 98 923TotalTotalReceivables past due but not impaired can vary substantially in lengthof time overdue depending on the type of customer, i.e. privatecompanies, consumers or public authorities. Impairment policiesare determined on an entity-by-entity basis according to customertype. The Group believes that it has no material risk in terms of creditconcentration.Financial credit riskBanque du <strong>Groupe</strong> <strong>Casino</strong>’s credit risks are managed based on:■■statistical analyses of pools of loans with similar characteristics, dueto the fact that individual loans are not material and all the loanshave the same risk profile;recovery probabilities at the different phases in the collectionprocess.As required by IAS 39, a provision is recorded when there is objectiveevidence that loans are impaired. This is considered to be the casewhen customers default on at least one instalment.Provisions for credit risks are determined by modelling statisticalrecovery and write-off data, taking into account all possible movementsbetween the various strata. The statistics used correspond to observedhistorical defaults and write-offs.The calculation also takes into account the present value of expectedrecoveries of principal and interest, discounted at the original interestrate on the loan. The purpose of this discounting adjustment is to factorin the loss of future lending margins. Renegotiated loans for whichpayments are up to date are classified as sound loans. If the borrowerdefaults on any payments, they are immediately reclassified as doubtfuland a provision is recorded on the basis described above.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group113
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsFinance receivables break down as follows by maturity:€ millionsNot yet duePast due,not impairedRestructurednot yet dueAccumulatedimpairmentlosses(1) (2) (3) (4)<strong>2010</strong> 733 7 89 141 9692009 530 - 81 140 751(1) Receivables with no payment incidents.(2) Receivables past due but not impaired.(3) Receivables for which payments have been rescheduled.(4) Receivables with at least one payment outstanding for more than one month and for which an impairment loss has been taken.TotalCredit risk on other financial assets – comprising cash and cashequivalents, available-for-sale financial assets and certain derivativefinancial instruments – corresponds to the risk of failure by thecounterparty to fulfil its obligations. The maximum risk is equal to theinstruments’ carrying amount.Counterparty risk related to other assetsOther assets, mainly comprising tax receivables, repayment rightsand amounts due from the Venezuelan government, are neither pastdue nor impaired.Note 31.4. Liquidity riskThe Group had confirmed credit facilities totalling €1,994 million(including €1,989 million unutilised) and available cash of €2,813 millionat 31 December <strong>2010</strong>, ensuring that it has sufficient liquidity to meetits needs.Loans with financial covenants represent about 15% of the total,mainly concerning subsidiaries in France, Brazil and Colombia. TheGroup’s loan and bond agreements also include the customarycovenants and default clauses, including pari passu, negative pledgeand cross-default clauses.Bonds placed on the euro market do not include any covenantsrelated to financial ratios.At 31 December <strong>2010</strong>, the consolidated net debt to consolidatedEBITDA ratio stood at 2.14 compared with a minimum requirementof 3.5. The Group considers that it can comply comfortably with itscovenants over the next twelve months.Some of the loan agreements, in an aggregate principal amount of€3,705 million, contain an acceleration clause at the lender’s discretionshould <strong>Casino</strong>, Guichard-Perrachon SA’s long-term senior debt ratingbe downgraded to non-investment grade due to a change of majorityshareholder. In this case, the Group would be obliged to pay therelevant loans on demand. Other loan agreements, in an aggregateprincipal amount €3,159 million, contain a coupon step-up clauseincreasing the interest rate should <strong>Casino</strong>, Guichard-Perrachon SA’slong-term senior debt rating be downgraded to non-investmentgrade.At 31 December <strong>2010</strong>, the covenants related to the main types ofdebt carried by the parent company were as follows:■■■■the €1.2 billion syndicated credit line renewed in August <strong>2010</strong> andthe BNP Paribas and Santander confirmed credit lines are subject toa consolidated net debt to consolidated EBITDA ratio of < 3.5;the other confirmed credit lines and the Alaméa financing facilityare subject to a consolidated net debt to consolidated EBITDAratio of < 3.7;the Calyon structured loan is subject to a consolidated net debt toconsolidated EBITDA ratio of < 4.3;the ratios applicable to the US Private Placement Notes are asfollows:RatioRequiredActual31 December <strong>2010</strong>Consolidated net debt (3) /consolidated EBITDA (2) < 3.50 (1) 2.14Consolidated net debt/consolidated equity < 1.20 0.48Consolidated intangible assets/consolidated equity < 1.25 0.89(1) The consolidated net debt to consolidated EBITDA requirement decreased from 3.7 to 3.5 in <strong>2010</strong> due to the inclusion of the new syndicated credit line in the covenants applicable to theUS Private Placement Notes.(2) EBITDA (earnings before interest, taxes, depreciation and amortisation) = trading profi t plus operating depreciation and amortisation.(3) Net debt as defi ned in the loan agreements is not the same as net debt recognised in the consolidated fi nancial statements (see 1.5.29). It corresponds to borrowings and fi nancial liabilitiesless cash and cash equivalents, as increased or reduced by the net impact of fair value hedges of debt with a positive or negative fair value.<strong>Mo</strong>noprix, GPA and Exito are also subject to financial covenants. The Group complied with all these financial ratios at 31 December <strong>2010</strong>.114 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Exposure to liquidity riskThe table below shows a maturity schedule for financial liabilities at 31 December <strong>2010</strong>, including principal and interest but excludingdiscounting.Maturity <strong>2010</strong>€ millionsDue withinone yearDue in oneto two yearsDue in twoto threeyearsDue in threeto five yearsDue beyondfive yearsTotalCarryingamountNON-DERIVATIVE FINANCIAL INSTRUMENTS RECOGNISED IN LIABILITIES:Bonds and other borrowings 1,712 900 1,525 2,141 1,548 7,827 6,959Put options granted to ownersof non-controlling interests 57 1 - - - 58 58Finance lease liabilities 50 30 19 14 24 137 106Trade payablesand other financial liabilities 6,663 70 236 3 29 7,001 7,001DERIVATIVE FINANCIAL INSTRUMENTS ASSETS/(LIABILITIES):Interest rate derivatives8,483 1,001 1,780 2,159 1,601 15,024Derivative contracts - received 357 146 111 141 84 839Derivative contracts - paid (370) (66) (43) (40) (18) (537)Derivative contracts - settled net 24 - - - - 24Currency derivativesDerivative contracts - received 853 - 1 - - 854Derivative contracts - paid (981) (11) - - - (992)Derivative contracts - settled net 20 - - - - 20Other derivative instrumentsDerivative contracts - received - - - - - -Derivative contracts - paid - - - - - -Derivative contracts - settled net - - - - - -(97) 69 68 101 66 208 83Registration Document <strong>2010</strong> | <strong>Casino</strong> Group115
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsMaturity 2009€ millionsDue withinone yearDue in oneto two yearsDue in twoto threeyearsDue in threeto five yearsDue beyondfive yearsTotalCarryingamountNON-DERIVATIVE FINANCIAL INSTRUMENTS RECOGNISED IN LIABILITIES:Bonds and other borrowingsexcluding derivative instrumentsand finance leases 1,430 1,199 1,596 2,726 845 7,796 6,618Put options granted to ownersof non-controlling interests 77 3 - - - 80 80Finance lease liabilities 52 45 21 17 19 155 131Trade payablesand other financial liabilities 5,637 24 148 2 11 5,821 5,821DERIVATIVE FINANCIAL INSTRUMENTS ASSETS/(LIABILITIES):Interest rate derivatives7,196 1,270 1,765 2,745 876 13,852Derivative contracts - received 184 347 142 144 21 839Derivative contracts - paid (142) (375) (62) (52) - (632)Derivative contracts - settled net (49) (20) (17) - - (86)Currency derivativesDerivative contracts - received - - - - - -Derivative contracts - paid (46) (12) (3) - - (60)Derivative contracts - settled net - - - - - -Other derivative instrumentsDerivative contracts - received - - - - - -Derivative contracts - paid - - - - - -Derivative contracts - settled net - - - - - -(52) (60) 60 92 21 60 32Note 31.5. Equity riskThe Group had no material exposure to equity risk at 31 December <strong>2010</strong>. It does not hold significant interests in other listed companiesor treasury shares. It has limited exposure in respect of its call options over ordinary shares (see note 24.2.4). Its policy as regards cashmanagement is to invest only in money market instruments that are not exposed to equity risk.116 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 32. OFF-BALANCE SHEET COMMITMENTSManagement believes that, to the best of its knowledge, there wereno off-balance sheet commitments at 31 December <strong>2010</strong>, other thanthose described below, likely to have a material impact on the Group’scurrent or future financial position.The completeness of this information is checked by the Finance, Legaland Tax departments, which also participate in drawing up contractsthat are binding on the Group.Commitments entered into in the ordinary course of business mainlyconcern the Group’s operating activities except for undrawn confirmedlines of credit, which represent a financing commitment.Other commitments are relative to the Group’s consolidated scope.Note 32.1. Commitments entered into in the ordinary course of businessCommitments givenThe amounts disclosed in the above table represent the maximum potential amounts (not discounted) that the Group might have to pay inrespect of commitments given. They are not netted against sums which the Group might recover through legal actions or counter-indemnitiesreceived.€ millions <strong>2010</strong> 2009Assets pledged as collateral (1) 119 89Bank bonds and guarantees given 426 246Firm purchase commitments ( * ) , (2) 26 40Customer credit facilities (3) 1,235 1,274Other commitments 17 16TOTAL COMMITMENTS GIVEN 1,822 1,665(*) Reciprocal commitments.(1) Assets pledged, mortgaged or otherwise given as collateral.(2) Commitments to purchase goods and services, less any advance payments made.(3) Confi rmed credit facilities granted to customers of Banque du <strong>Groupe</strong> <strong>Casino</strong>, in the amount of €1,235 million in <strong>2010</strong>, can be drawn down at any time. The total corresponds to facilitiesrecognised by the French Banking Commission for inclusion in the calculation of capital adequacy ratios, i.e. excluding accounts that have been dormant for two years.French subsidiaries’ commitments in respect of the mandatory personal training entitlement (“DIF”) amounted to 6,004,422 hours at 31 December<strong>2010</strong>, versus 5,432,740 hours at 31 December 2009. The amount of entitlement used during the year totalled 60,974 hours.Commitments receivedThe amounts disclosed in the above table represent the maximum potential amounts (not discounted) that the Group might receive in respectof commitments received.€ millions <strong>2010</strong> 2009Bonds and guarantees received from banks 81 62Security for receivables 43 42Undrawn confirmed lines of credit (see Notes 28.3 and 29) 2,146 2,113Other commitments received 7 22TOTAL COMMITMENTS RECEIVED 2,277 2,238Registration Document <strong>2010</strong> | <strong>Casino</strong> Group117
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 32.2. Other commitmentsOther commitments givenThe amounts disclosed in the table above represent the maximum potential amounts (not discounted) which the Group might have to payin respect of commitments given, except for written put options which are measured at their fair value.The table does not include commitments given by the Group to associates and joint ventures (see notes 17 and 18 respectively).€ millions <strong>2010</strong> 2009Seller’s warranties(1)(2)• Polish business58 68• Smart & Final shares4 3• Property assets9 18• Other assets2 -Written put options ( * ) (3) 1,465 1,551<strong>Mo</strong>noprix 1,225 1,200Franprix-Leader Price 184 194Disco (Uruguay) 56 49Sendas Distribuidora (Brazil) - 108Banque du <strong>Groupe</strong> <strong>Casino</strong>/Laser Cofinoga/Crédit Mutuel partnership ( * ) (4) - -Carrefour Thailand acquisition ( * ) (5) 851 -Other commitments given 23 22TOTAL COMMITMENTS GIVEN 2,411 1,662(*) Reciprocal commitments.(1) Following the property disposals, the Group is the tenant under traditional fi xed-rent commercial leases. The Group has issued a guarantee covering the risk of vacancy should it decide tovacate the premises after the fi rst three-year lease break and fails to fi nd a new tenant on similar fi nancial terms and conditions. The guarantee is valid from the fi rst day of the fourth year to thefi nal day of the sixth year. The guarantee is conditional and cannot be quantifi ed.When Vindémia sold its production activities in Reunion, it committed to specifi c purchase volumes for a period of fi ve years. To date, these volumes have been met.(2) The Group has given the customary warranties in connection with its disposals, as follows:• In 2006, <strong>Casino</strong> gave the buyer of its interest in Leader Price Polska a seller’s warranty covering any risks pre-dating the sale that were not covered by provisions in the balance sheet. The amountof the warranty was capped at €17 million and was valid for 18 months. The amount for tax-related risks is capped at €50 million and is valid for a period corresponding to the statute of limitations.• Following a claim under this warranty, in September 2009 the arbitration board ordered the Group to pay and recognise as a liability the sum of €14 million. <strong>Casino</strong> has appealed againstthis ruling. The residual risk of €35 million is purely theoretical as Leader Price Polska has already been subject to two tax audits during the warranty period. However, <strong>Casino</strong> has receiveda new claim for €6 million, which it believes to be unfounded.• Mayland (formerly Géant Polska) has given the buyer of the hypermarkets business a sellers’ warranty covering any risks pre-dating the sale that are not covered by provisions in the balancesheet. The amount of the warranty is capped at €46 million and is valid for 24 months as of the sale date and for 8 years in the case of environmental claims. The amount of the warrantydecreases gradually as of 2008 and was €27 million at 31 December <strong>2010</strong>. After deduction of a provision for risks, the net amount presented in the table above is €23 million.(3) In accordance with IAS 32, put options granted to owners of non-controlling interests in fully-consolidated subsidiaries are recognised as fi nancial liabilities at their discounted present value ortheir fair value (see notes 1.5.20 and 28.4).Under the terms of the option contracts, the exercise price of written put and call options may be determined using earnings multiples, based on the latest published earnings for optionsexercisable at any time and earnings forecasts or projections for options exercisable as of a given future date. In many cases, the put option written by the Group is matched by a call optionwritten by the other party. For these options, the value shown corresponds to that of the written put.• <strong>Mo</strong>noprixOn 22 December 2008, <strong>Casino</strong> and Galeries Lafayette signed an amendment to their March 2003 strategic agreement which suspends the exercise of their respective put and call optionson <strong>Mo</strong>noprix shares for three years.As a result, <strong>Casino</strong>’s call on 10% of <strong>Mo</strong>noprix’s outstanding shares and Galeries Lafayette’s put on 50% of <strong>Mo</strong>noprix’s capital will be exercisable only as of 1 January 2012. The other termsof exercise remain unchanged. The other terms of the March 2003 strategic agreement remain unchanged.The Group commissioned an independent valuation at 31 December <strong>2010</strong>. The independent expert estimated the value of 100% of <strong>Mo</strong>noprix shares at between €2,300 and €2,600 million.The contingent liability covering 50% of <strong>Mo</strong>noprix shares has been disclosed at a value of €1,225 million.• Franprix-Leader PricePut options have been granted on shares in a large number of companies that are not wholly-owned by the Group. The options are exercisable until 2043 at a price based on the operatingprofi ts of the companies concerned.• Uruguay<strong>Groupe</strong> <strong>Casino</strong> has granted a put option on 29.3% of Disco’s capital to the family shareholders. The option is exercisable until 21 June 2021 at a price based on the Disco sub-group’sconsolidated operating profi t, with a fl oor of USD 41 million plus interest at 5% per year.• BrazilGPA had granted the Sendas family a put option on their 42.57% holding in Sendas Distribuidora, giving them the right to exchange their shares for GPA preferred non-voting shares. GPAhad the right to settle the put option either in shares or in cash as it deemed appropriate. On 5 January 2007, the Sendas family advised the Group of its intention to exercise the put option.The two parties were then in dispute over the exercise price. They have since reached an agreement leading to the recognition of a discounted fi nancial liability in the sum of €46 million for<strong>Casino</strong>’s share (see note 28.3).The Group has granted the Diniz family, with whom it exercises joint control over GPA in Brazil, two put options on shares in GPA’s head holding company, covering 0.4% and 7.6% of GPA’sshare capital respectively. The fi rst option is exercisable as of 2012 should <strong>Casino</strong> exercise its right to elect the Chairman of the Board of Directors of the head holding company in that year.If the fi rst put option is exercised, the second will become exercisable for a period of eight years as of June 2014. The Group has a call option on the shares covered by the fi rst put optionrepresenting 0.4% of GPA’s share capital, subject to certain conditions.(4) On 20 July <strong>2010</strong>, the Group decided to exercise its call option on LaSer Cofi noga’s 40% interest in Banque du <strong>Groupe</strong> <strong>Casino</strong>. The shares will be transferred no later than 20 January 2012 inaccordance with the existing agreements. The Group has also signed a long-term partnership with <strong>Groupe</strong> Crédit Mutuel-CIC, which will have the effect of raising the latter’s interest in Banque du<strong>Groupe</strong> <strong>Casino</strong> to 50% (see note 2.2). The purchase and sale price of the two transactions are based on the Company’s net earnings and equity in future years and cannot be determined at present.(5) See note 35.Lastly, under its partnership with Corin, Mercialys has acquired 60% of the joint rights over certain real estate assets in Corsica for €90 million. If the joint ownership agreement is not renewedby 15 June 2011, Corin and Mercialys will transfer their joint rights to a new company. Mercialys has undertaken to acquire Corin’s joint rights (40%) or its shares in the newly-created company,on the following terms and conditions:• Mercialys irrevocably undertakes to acquire Corin’s joint rights (or its shares in the newly-created company), subject to its right to make a counter-proposal, and Corin irrevocably undertakesto sell its rights to Mercialys.• If Corin exercises its option, Mercialys may, as from 31 January 2017, either assign its rights and obligations to a third party or execute its commitment by offering Corin the right to acquire itsjoint rights. The method of valuing the assets is set out in the agreement. In this latter case, a 20% discount will be applied. Corin may also assign the benefi t of the option to a third party.The options are contingent liabilities, the outcome of which is not foreseeable. If exercised, the value of the assets determined in accordance with the agreement will be representative of the market value.Commitments receivedCommitments received amounted to €6 million at 31 December <strong>2010</strong>.118 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Note 32.3. Lease commitmentsNote 32.3.1. Finance leases where the Group is lesseeThe Group has leases on owner-occupied property and investment property. Actual future minimum lease payments under these leases andthe present value of the future minimum payments are as follows:Finance leases on property where the Group is lessee€ millionsFuture minimumlease payments<strong>2010</strong>Present value offuture minimumlease paymentsDue within one year 13 11Due in one to five years 39 34Due beyond five years 20 6Total future minimum lease payments 72Interest cost (22)TOTAL PRESENT VALUE OF FUTURE MINIMUM LEASE PAYMENTS 50 50€ millionsFuture minimumlease payments2009Present value offuture minimumlease paymentsDue within one year 12 10Due in one to five years 46 41Due beyond five years 19 7Total future minimum lease payments 77Interest cost (19)TOTAL PRESENT VALUE OF FUTURE MINIMUM LEASE PAYMENTS 58 58The Group has finance leases and leases with purchase options on equipment. Actual future minimum lease payments under these equipmentleases and the present value of the future minimum payments are as follows:Finance leases on equipment where the Group is lessee€ millionsFuture minimumlease payments<strong>2010</strong>Present value offuture minimumlease paymentsDue within one year 38 33Due in one to five years 24 20Due beyond five years 3 3Total future minimum lease payments 65Interest cost (9)TOTAL PRESENT VALUE OF FUTURE MINIMUM LEASE PAYMENTS 56 56Registration Document <strong>2010</strong> | <strong>Casino</strong> Group119
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements€ millionsFuture minimumlease payments2009Present value offuture minimumlease paymentsDue within one year 41 37Due in one to five years 42 35Due beyond five years - -Total future minimum lease payments 83Interest cost (10)TOTAL PRESENT VALUE OF FUTURE MINIMUM LEASE PAYMENTS 73 73Note 32.3.2. Operating leases where the Group is lesseeThe Group has operating leases on properties used in the business that do not meet the criteria for classification as finance leases. Thepresent value of future minimum payments under non-cancellable operating leases breaks down as follows:Operating leases on property where the Group is lessee€ millionsFuture minimum lease payments<strong>2010</strong> 2009Due within one year 423 338Due in one to five years 659 634Due beyond five years 517 455Future minimum lease payments receivable under non-cancellable sub-leases amounted to €18 million at 31 December <strong>2010</strong>.The Group has operating leases on certain items of equipment that it does not wish to ultimately own. The present value of future minimumpayments under operating leases on equipment breaks down as follows:Operating leases on equipment where the Group is lessee€ millionsFuture minimum lease payments<strong>2010</strong> 2009Due within one year 28 26Due in one to five years 30 32Due beyond five years - -Note 32.3.3. Operating leases where the Group is lessorThe Group is also a lessor through its property activity. Future minimum lease payments receivable under non-cancellable operating leasesbreak down as follows:€ millionsFuture minimum lease payments<strong>2010</strong> 2009Due within one year 202 181Due in one to five years 135 159Due beyond five years 21 25Conditional rental revenue received by the Group included in the income statement in <strong>2010</strong> amounted to €5 million versus €1 million in2009.120 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 33. CONTINGENT ASSETS AND LIABILITIESIn the normal course of its business, the Group is involved in a numberof legal or arbitration proceedings with third parties or with the taxauthorities in certain countries. Provisions are taken to cover suchproceedings when the Group has a legal, contractual or constructiveobligation towards a third party at the year-end, it is probable that anoutflow of resources embodying economic benefits will be requiredto settle the obligation, and the amount of the obligation can bereliably estimated.Contingent liabilities in associates and joint ventures are presentedin notes 17.2 and 18.2.Dispute with the Baud familyOn 4 February 2011, the arbitration board delivered its final rulingin the dispute between <strong>Casino</strong> and the Baud family over Franprixand Leader Price dividends and late interest. The board rejectedthe Baud family’s claims for payment of Franprix and Leader Pricedividends for 2006 and 2007 and additional compensation for theirinternational tax position, due to accounting errors and irregularitiesin their financial statements.As a result of the board’s decision, <strong>Casino</strong> will be required to payonly €34 million corresponding to dividends for 2008 (€28 million)and additional consideration for the Franprix and Leader Price sharespreviously acquired by <strong>Casino</strong> (€6 million).This amount of €28 million is lower than the €67 million that had beenrecognised in other current liabilities. The difference of €39 millionwas deducted from other liabilities at 31 December <strong>2010</strong> and thegoodwill arising on acquisition of the shares was reduced by acorresponding amount.As regards the dispute over the organisation and operation of Geimex,a company owned jointly and equally by <strong>Casino</strong> and the Baud familythat owns the international rights to the Leader Price brand, anacting director appointed by the Paris commercial court has beenmanaging the company since May 2008. The disputes between thetwo shareholders mainly involve <strong>Casino</strong>’s disposal of Leader PricePolska in 2006 and the Baud family’s Swiss activities. The case hasgone to arbitration and the two parties are pursuing criminal complaintsagainst each other.A ruling is expected at the end of 2011. <strong>Casino</strong> contests all the claimsmade by the Baud family and is confident in the outcome of this casebased on advice from its legal counsels.Geimex is proportionately consolidated in the Group’s financialstatements. <strong>Casino</strong>’s interest in this company amounts to €77 million,including €61 million in goodwill.For information, the Geimex group’s revenue and earnings amountedto €249 million and €8 million respectively in <strong>2010</strong>.Unicentro dispute (Colombia)In the second half of 2009, a dispute arose over the operation ofan asset in Colombia. On 20 August <strong>2010</strong>, the parties reachedan agreement which had no material impact on the financialstatements.Property damage in ThailandDuring the unrest in Bangkok in the second quarter, the Group’ssubsidiary Big C Thailand suffered losses as a result of vandalism andbusiness interruption losses estimated at €17 million at 31 December<strong>2010</strong>. Property damage, business interruption losses and expensesare covered by the Group’s insurance policies.The total cost is being assessed by the Group’s insurers. Lossesassessed on the basis of asset reconstruction or replacement costtogether with business interruption losses are currently estimated at€36 million. The net cost to the Group at 31 December <strong>2010</strong>, aftertaking account of insurance and deductibles, is €3 million including therecognition of a €14 million insurance receivable, of which €7 millionwas received in December <strong>2010</strong> and €2 million in January 2011,leaving a receivable of €5 million.Tax disputesThe Group has been notified of tax reassessments related to 1998,concerning utilisations of tax loss carryforwards contested by the taxauthorities and a provision for impairment in value of fixed assets,which the tax authorities consider as non-deductible. The Grouphas contested these reassessments and is confident of a favourableoutcome. Consequently, no provision has been set aside for theadditional tax claimed. The administrative court found in favour ofthe tax authorities on the second count. The Group contests thisruling and has appealed to the Conseil d’État. The risk not providedfor amounts to €7 million.NOTE 34. RELATED PARTY TRANSACTIONSRelated parties are:■■■■■■parent companies;entities that exercise joint control or significant influence over theentity;subsidiariesassociates;joint ventures;members of the entity’s administrative, management and supervisorybodies.The Company has relations with all its subsidiaries in its day-to-daymanagement of the Group. It also receives advice from its majorityshareholder, <strong>Groupe</strong> Rallye, through Euris, the ultimate holdingcompany, under a strategic advice and assistance contract signedin 2003.The related party transactions presented below mainly concern routinetransactions with companies over which the Group exercises jointcontrol or significant influence, which are respectively proportionatelyconsolidated or accounted for by the equity method. Thesetransactions are carried out on arm’s length terms.Related party transactions with individuals (directors, corporateofficers and members of their families) and with parent companiesare not material.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group121
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsNote 34.1. Related party transactions<strong>2010</strong> 2009€ millionsTransactions Balances Transactions BalancesTransactions with joint venturesLoans - 4 - 4Receivables 9 92 9 81Payables 3 89 3 86Expense 56 - 44 -Income 45 - 51 -Transactions with associatesLoans 5 44 39 39Receivables - - (1) -Payables - - - -Expense 28 - 22 -Income 5 - 1 -Note 34.2. Gross remuneration and benefits of the membersof the Executive Committee and the Board of Directors€ millions <strong>2010</strong> 2009Short-term benefits excluding payroll taxes(1)7 7Payroll taxes on short-term benefits 2 2Termination benefits - 1Share-based payments(2)3 2TOTAL 12 12(1) Gross salaries, bonuses, discretionary and statutory profi t-sharing, benefi ts in kind and directors’ fees.(2) Expense recognised in the income statement in respect of stock option and share grant plans.The members of the Group Executive Committee are not entitled to any specific pension benefit.NOTE 35. SUBSEQUENT EVENTSBig C’s acquisition of Carrefour’s ThaioperationsFollowing the agreement signed with Carrefour in November <strong>2010</strong>,<strong>Casino</strong>’s Thai subsidiary Big C acquired Carrefour’s Thai operationson 7 January 2011 for a total consideration of €851 million.These operations comprise a portfolio of 42 stores, including 34hypermarkets, as well as 37 shopping malls.<strong>Casino</strong> acquires Charle brothers’ stakein CdiscountOn 6 January 2011, <strong>Groupe</strong> <strong>Casino</strong> acquired the remaining 18.6%of Cdiscount owned by the Charle brothers. The Group now owns99.6% of Cdiscount.122 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3NOTE 36. STATUTORY AUDITORS’ FEESFees paid in respect of the audit of <strong>Groupe</strong> <strong>Casino</strong>’s financial statements amounted to €7 million in <strong>2010</strong>.Fees for other direct audit-related work amounted to €0.3 million in <strong>2010</strong>.NOTE 37. MAIN CONSOLIDATED COMPANIESAt 31 December <strong>2010</strong>, <strong>Groupe</strong> <strong>Casino</strong> comprised some 1,500 consolidated companies. The main companies are listed below:Company<strong>Casino</strong>, Guichard Perrachon SAFRANCE% interestConsolidationmethodParentRetailing<strong>Casino</strong> Carburants SAS 100.00 FC<strong>Casino</strong> Services SAS 100.00 FC<strong>Casino</strong> Vacances SNC 100.00 FC<strong>Casino</strong> Information Technology SAS 100.00 FCClub Avantages SAS 98.00 FCComacas SNC 100.00 FCDistribution <strong>Casino</strong> France SAS 100.00 FCDistridyn SA 49.99 PCDunnhumby France SAS 50.00 PCEasydis SAS 100.00 FCEMC Distribution SAS 100.00 FCFloréal SA 100.00 FCGeimex SA 49.99 PC• <strong>Mo</strong>noprix SA Group 50.00 PCSociété Auxiliaire de Manutention Accélérée de Denrées Alimentaires (SAMADA)(1)100.00 FC<strong>Mo</strong>noprix Exploitation (MPX)(1)100.00 FCTransports et Affrètements Internationaux Combinés (TAIC)(1)100.00 FCSociete L.R.M.D.(1)100.00 FCNaturalia(1)100.00 FC<strong>Mo</strong>nop’(1)100.00 FCRégie Média Trade SAS 50.00 PCSerca SAS 100.00 FC• Franprix-Leader Price GroupFranprix-Leader Price 100.00 FCAddy Participations(2)51.00 FCCafige(2)49.00 EMCofilead(2)60.00 FCCogefisd(2)84.00 FCDBA(1) and (3)49.00 EMDFP (Baud SA)(3)100.00 FCDistribution Leader Price(2)100.00 FCFigeac(2)84.00 FCFranprix Exploitation(2)100.00 FCFranprix Holding(2)100.00 FCH2A(2)60.00 FCHD Rivière(2)40.00 EMLeader Price Holding(2)100.00 FCRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group123
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsCompany% interestConsolidationmethodLeadis Holding(2)100.00 FCLecogest(2)100.00 FCMinimarché(2)95.00 FCPatrick Fabre Distribution(2)40.00 EMPro Distribution(2)49.00 EMR.L.P Investissement(2)100.00 FCRetail Leader Price(2)100.00 FCSarjel(2)49.00 EMSarl Besançon Saint Claude(2)100.00 FCSédifrais(2)96.80 FCSI2M(2)40.00 EMSodigestion(2)60.00 FCSofigep(2)100.00 FCSurgénord(2)96.80 FCTaleb(2)60.00 FCVolta(2)51.00 FC• Codim GroupBalcadis 2 SNC 100.00 FCCodim 2 SA 100.00 FCCosta Verde SNC 100.00 FCFidis 2 SNC 100.00 FCHyper Rocade 2 SNC 100.00 FCLion de Toga 2 SNC 100.00 FCPacam 2 SNC 100.00 FCPoretta 2 SNC 100.00 FCPrical 2 SNC 99.00 FCProdis 2 SNC 100.00 FCSemafrac SNC 100.00 FCSNC des Cash Corses 100.00 FCSodico 2 SNC 100.00 FCSudis 2 SNC 100.00 FCUnigros 2 SNC 100.00 FCFrance - Property• Property GroupIGC Services SAS 100.00 FCL’Immobilière <strong>Groupe</strong> <strong>Casino</strong> SAS 100.00 FCDinetard SAS 100.00 FCSudéco SAS 100.00 FCUranie SAS 100.00 FCAEW Immocommercial 20.48 EM• Mercialys Group (listed company)Mercialys SA 51.21 FCMercialys Gestion SAS(8)100.00 FCCorin Asset Management SAS(8)40.00 PCLa Diane SCI(8)100.00 FCPoint Confort SA(8)100.00 FCSAS les Salins(8)100.00 FCSCI Centre Commercial Kerbernard(8)98.31 FCSCI Caserne de Bonne(8)100.00 FC124 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements3Company% interestConsolidationmethodSCI Timur(8)100.00 FCSNC Agout(8)100.00 FCSNC Géante Périaz(8)100.00 FCSNC Dentelle(8)100.00 FCSNC Chantecouriol(8)100.00 FCVendolone(8)100.00 FC• Property developmentPlouescadis 100.00 FCSodérip SNC 100.00 FCIGC Promotion SAS 100.00 FCOnagan 100.00 FCAlcudia Promotion 100.00 FCSCI Les Halles des Bords de Loire 100.00 FCFrance – Other businessesBanque du <strong>Groupe</strong> <strong>Casino</strong> SA 60.00 PC<strong>Casino</strong> Restauration SAS 100.00 FCRestauration Collective <strong>Casino</strong> SAS 100.00 FCVilla Plancha 100.00 FCCdiscount SA 83.01 FCINTERNATIONALPolandMayland (ex-Géant Polska) 100.00 FCPolish property developmentCentrum Handlowe Pogoria(7)25.00 FCCentrum Handlowe Jantar(7)26.00 FCEspace Warszawa(7)25.00 FCInternational – ThailandBig C Group (listed company) 63.15 FCInternational – ArgentinaLibertad SA 100.00 FCInternational – UruguayDevoto 96.55 FCGrupo Disco Uruguay 62.49 PCInternational – BrazilWilkes(4)68.85 PC• GPA Group (listed company) (ex-CBD) 33.70 PCBarcelona(5)100.00 FCBanco Investcred Unibanco(5)50.00 EMBartira Ltda(5)25.00 PCBellamar(5)100.00 FCBruxelas(5)100.00 FCCBD Holland B.V.(5)100.00 FCCBD Panamá Trading Corp.(5)100.00 FCDallas(5)100.00 FCECQD(5)100.00 FCGlobex FIDC(5)100.00 FCGlobex Utilidades(5)52.41 FCMiravalles - Financeira Itaù CBD - FIC(5)50.00 EMRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group125
3CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statementsCompany% interestConsolidationmethodNova Casa Bahia(5)100.00 FCNovasoc Comercial Ltda(5)99.98 FCPAFIDC(5)100.00 FCPA Publicidade Ltda.(5)99.99 FCPontoFrio.com Comercio Electronico(5)94.00 FCSendas Distribuidora(5)57.43 FCSé Supermercados Ltda(5)100.00 FCVancouver(5)100.00 FCVedra(5)100.00 FCXantocarpa Participações Ltda(5)100.00 FCInternational – Colombia• Exito Group (listed company) 54.77 FCDistribuidora de Textiles y Confecciones SA (DIDETEXCO)(6)97.75 FCPatrimonio Autonomo San Pedro Plaza(6)51.00 FCInternational – Indian OceanVindémia Group 100.00 FCFrench and international holding companiesAlaméa Investments(9)5% FCBergsaar BV 100.00 FC<strong>Casino</strong> International SAS 100.00 FC<strong>Casino</strong> Ré SA 100.00 FCCoboop BV 100.00 FCGéant Foncière BV 100.00 FCGéant Holding BV 100.00 FCGéant International BV 100.00 FCGelase SA 100.00 FCIntexa 97.91 FCForézienne de participations 100.00 FCIRTS 100.00 FCLatic 100.00 FCMarushka Holding BV 100.00 FCPachidis SA 100.00 FCPolca Holding SA 100.00 FCSégisor SA 100.00 FCTevir SA 100.00 FCTheiadis SAS 100.00 FCSpice Espana 100.00 FCVegas Argentina 100.00 FCFC: Full Consolidation – PC: Proportionate Consolidation – EM: Equity Method.(1) The percentage interest corresponds to the percentages held by the <strong>Mo</strong>noprix sub-group.(2) The percentage interest corresponds to the percentages held by the Franprix-Leader Price sub-group.(3) The Franprix-Leader Price sub-group holds 49% of DBA’s voting rights.(4) The Group holds 50% of Wilkes’ voting rights.(5) The percentage interest corresponds to the percentages held by the GPA sub-group.(6) The percentage interest corresponds to the percentages held by the Exito sub-group.(7) In 2008, <strong>Casino</strong> entered into a partnership agreement with the Whitehall investment fund managed by Goldman Sachs, for developing shopping centres mainly in Poland. Several newcompanies were created for this purpose: DTC Finance BV, DTC Développement 1 BV, DTC Développement 2 BV, DTC Développement 3 BV, Centrum Handlowe Pogoria, CentrumHandlowe Jantar and Espace Warszawa. They are 51%-owned by the Group and are fully consolidated as <strong>Casino</strong> owns the majority of the voting rights and receives the majority of thedevelopment margin.(8) The percentage interest corresponds to the percentages held by the Mercialys sub-group.(9) See note 28.1.126 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
4PARENT COMPANYFINANCIALSTATEMENTSAT 31 DECEMBER <strong>2010</strong>4.1. Statutory Auditors’ Reporton the annual financial statements ...............................1284.2. Income statement ........................................................1294.3. Balance sheet ..............................................................1304.4. Cash flow statement ....................................................1314.5. Notes to the financial statements .................................1324.6. Notes to the income statement and balance sheet .....1344.7. Five-year financial summary .........................................1494.8. List of subsidiaries and associates ...............................1504.9. Statutory Auditors’ special report on regulatedagreements and commitments with related parties .....153Registration Document <strong>2010</strong> | <strong>Casino</strong> Group127
4PARENT COMPANY FINANCIAL STATEMENTSStatutory Auditors’ Report on the annual fi nancial statements4.1. STATUTORY AUDITORS’ REPORTON THE ANNUAL FINANCIAL STATEMENTSThis is a free translation into English of the statutory auditors’ report issued in the French language and is provided solely for the convenienceof English-speaking readers. This report includes information specifically required by French law in such reports, whether qualified or not. Thisinformation is presented below the opinion on the financial statements and includes (an) explanatory paragraph(s) discussing the auditors’assessment(s) of certain significant accounting and auditing matters. These assessments were made for the purpose of issuing an auditopinion on the financial statements taken as a whole and not to provide separate assurance on individual account captions or on informationtaken outside the financial statements.This report should be read in conjunction with, and is construed in accordance with French law and professional auditing standards applicablein France.To the shareholders,In compliance with the assignment entrusted to us by your shareholders' meeting, we hereby report to you, for the year ended December31, <strong>2010</strong>, on:■■■the audit of the accompanying annual financial statements of <strong>Casino</strong>, Guichard-Perrachon,the justification of our assessments,the specific verifications and information required by French law.These financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial statementsbased on our audit.I. Opinion on the financial statementsWe conducted our audit in accordance with professional standardsapplicable in France; those standards require that we plan andperform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An auditinvolves performing procedures, using sampling techniques or othermethods of selection, to obtain audit evidence about the amountsand disclosures in the financial statements. An audit also includesevaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made, as well as the overallpresentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.In our opinion, the financial statements give a true and fair view of theassets and liabilities and of the financial position of the Company asat December 31, <strong>2010</strong> and of the results of its operations for the yearthen ended in accordance with French accounting principles.II. Justification of assessmentsIn accordance with the requirements of article L. 823-9 of the FrenchCommercial Code (code de commerce) relating to the justification ofour assessments, we bring to your attention the following matters:Note 1 “Accounting policies” of the financial statements describes themethods of determination of the recoverable value of investments.Note 6 "Long term investments" discloses the data related to thisclosing and the variation of investments.As part of our assessment of the accounting methods followed byyour company, we examined the available documentation, assessedthe reasonableness of the estimates and verified that the footnotesgive adequate information on the assumptions used therein.These assessments were made as part of our audit of the financialstatements taken as a whole, and therefore contributed to the opinionwe formed which is expressed in the first part of this report.III. Specific verification and informationWe have also performed, in accordance with professional standardsapplicable in France, the specific verifications required by Frenchlaw.We have no matters to report as to the fair presentation and theconsistency with the financial statements of the information given in themanagement report of the Board of Directors and in the documentsaddressed to shareholders with respect to the financial position andthe financial statements.Concerning the information given in accordance with the requirementsof article L. 225-102-1 of the French Commercial Code (code decommerce) relating to remunerations and benefits received by thedirectors and any other commitments made in their favour, we haveverified its consistency with the financial statements, or with theunderlying information used to prepare these financial statementsand, where applicable, with the information obtained by your companyfrom companies controlling your company or controlled by it. Basedon this work, we attest the accuracy and fair presentation of thisinformation.In accordance with French law, we have verified that the requiredinformation concerning the purchase of investments and controllinginterests and the identity of the shareholders and holders of the votingrights has been properly disclosed in the management reportNeuilly-sur-Seine and Lyon, March 11, 2011The Statutory AuditorsDeloitte & AssociésErnst & Young et AutresAntoine de Riedmatten Alain Descoins Sylvain Lauria Daniel Mary-Dauphin128 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSIncome statement44.2. INCOME STATEMENT€ millions Notes <strong>2010</strong> 2009Operating income 1 166.6 163.9Operating expense 1 (129.0) (112.4)Operating profit 37.6 51.5Net financial income/(expense) 2 125.1 261.3Recurring profit before tax 162.7 312.8Non-recurring income/(expense) 3 76.1 (26.3)Income tax (expense)/benefit 4 132.8 116.9NET PROFIT FOR THE PERIOD 371.6 40<strong>3.4</strong>Registration Document <strong>2010</strong> | <strong>Casino</strong> Group129
4PARENT COMPANY FINANCIAL STATEMENTSBalance sheet4.3. BALANCE SHEETASSETS€ millions Notes <strong>2010</strong> 2009FIXED ASSETSIntangible assets 17.9 17.0Amortisation and impairment (1.2) (0.9)5 16.7 16.1Property, plant and equipment 17.9 1<strong>3.4</strong>Depreciation and impairment (7.5) (3.9)5 10.4 9.5Long-term investments (1) 9,399.2 9,390.6Impairment (17.5) (18.0)6 9,381.7 9,372.6Total fixed assets 9,408.8 9,398.2CURRENT ASSETSTrade and other receivables (2) 7 4,644.4 4,630.2Marketable securities 8 251.5 455.9Cash 8 556.0 723.0Total current assets 5,451.9 5,809.1Accruals and other assets (2) 9 120.6 2.8TOTAL ASSETS 14,981.3 15,210.1(1) o/w loans due within one year 11.4 5.3(2) o/w due beyond one year - -EQUITY AND LIABILITIES€ millions Notes <strong>2010</strong> 2009Total equity 10 7,218.5 7,124.0Quasi-equity 11 600.0 600.0Provisions 12 96.2 193.9Borrowings 13 6,185.0 6,473.8Trade payables 21.1 14.6Accrued taxes and employee benefits expense 29.9 23.7Other liabilities 14 830.6 780.1Total liabilities (1) 7,066.6 7,292.2TOTAL EQUITY AND LIABILITIES 14,981.3 15,210.1(1) o/w:due within one year 1,971.9 1,889.2due in one to five years 3,699.2 4,649.0due beyond five years 1,395.5 754.0130 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSCash fl ow statement44.4. CASH FLOW STATEMENT€ millions <strong>2010</strong> 2009OPERATING ACTIVITIESNet profit for the period 371.6 40<strong>3.4</strong>Elimination of non-cash items• Depreciation, amortisation and provisions (other than on current assets)(93.7) (239.4)• (Gains)/losses on disposal of fixed assets(0.2) 247.9• Stock dividends received- (197.2)Net cash provided by operations 277.7 214.7Change in working capital requirement – operating activities 48.1 (465.4)Net cash from operating activities 325.8 (250.7)INVESTING ACTIVITIESPurchases of fixed assets (71.8) (431.3)Proceeds from disposals of fixed assets 60.4 307.1Change in working capital requirement – investing activities - (0.5)Change in loans granted (2.6) 10.5Net cash from investing activities (14.0) (114.2)FINANCING ACTIVITIESDividends paid to shareholders (292.2) (284.3)Proceeds from issuance of shares for cash 14.5 (3.0)Proceeds from new borrowings 481.6 2,040.9Repayments of borrowings (868.0) (982.5)Net cash from financing activities (664.1) 771.1CHANGE IN CASH AND CASH EQUIVALENTS (352.3) 406.2Cash and cash equivalents at beginning of year 1,123.9 717.7Cash and cash equivalents at year-end 771.6 1,123.9Registration Document <strong>2010</strong> | <strong>Casino</strong> Group131
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the fi nancial statements4.5. NOTES TO THE FINANCIAL STATEMENTS4.5.1. ACCOUNTING POLICIES4.5.1.1. Significant events of the yearBond exchange offersOn 8 February <strong>2010</strong>, <strong>Casino</strong> made an offer to exchange its 2012and 2013 bonds for new bonds maturing February 2017 and payinginterest equivalent to the midswap-rate plus a spread of 135 basispoints. A total of €888 million worth of the new bonds were issued,allowing the Group to reduce debt repayments due 2012 and 2013by respectively €440 million and €354 million.On 11 May <strong>2010</strong>, the Group made a second offer to exchange its2011, 2012 and 2013 bonds for new bonds maturing November2018 and paying interest equivalent to the midswap-rate plus aspread of 160 basis points. A total of €508 million worth of the newbonds were issued. This transaction reduced debt repayments due2011, 2012 and 2013 by €190 million, €156 million and €127 million,respectively.Partnership agreement between <strong>Casino</strong>and Group Crédit Mutuel-CICOn 27 July <strong>2010</strong>, <strong>Casino</strong> announced the signing of a long-termpartnership agreement with <strong>Groupe</strong> Crédit Mutuel-CIC to developfinancial products and services in France through its Banque <strong>Casino</strong>subsidiary.Under the terms of the agreement, <strong>Groupe</strong> Crédit Mutuel-CIC willacquire a 50% stake in Banque <strong>Casino</strong>, which is currently 60% ownedby <strong>Casino</strong> and 40% by LaSer Cofinoga.<strong>Casino</strong> has exercised its call option on LaSer Cofinoga’s shareswhich, along with 10% of <strong>Casino</strong>’s current stake, will be sold toCrédit Mutuel. The transaction is expected to be completed overthe next 18 months.This project is subject to approval by regulatory authorities.4.5.1.2. Significant accounting policiesGeneralitiesThe financial statements have been prepared in accordance withgenerally accepted French accounting principles (1999 general chart ofaccounts, approved by decree of 22 June 1999), applied consistentlyfrom one period to the next.Intangible assetsIn accordance with standard CRC 2004-01 of 4 May 2004, thedeficit arising from merger transactions due to technical reasons isautomatically recognised in intangible assets.Intangible assets are stated at cost and primarily correspondto goodwill, software and technical deficits arising from mergertransactions.Where appropriate, goodwill is written down to its fair value, determinedbased on earnings outlooks for he entities concerned.Software is amortised over a period of three years.Property, plant and equipmentProperty, plant and equipment are stated at cost.Depreciation is calculated using the straight-line or reducing balancemethod, with residual values deemed to be zero. Accelerated capitalallowances, corresponding to the difference between depreciationexpense calculated by the reducing balance method for tax purposesand that calculated by the straight-line method, are recorded underprovisions.The main depreciation periods are as follows:Asset categoryBuildingsFixtures, fittings and refurbishmentsEquipmentDepreciationperiod40 years5 to 12 years5 to 10 yearsThe depreciable amount is the cost of property, plant and equipmentwith a nil residual value.Property, plant and equipment acquired through mergers or assettransfers are depreciated over the remaining depreciation periodapplied by the company that originally held the assets concerned.Long-term investmentsInvestments in subsidiaries and associates are stated at the lowerof cost and fair value. However, treasury shares recorded underlong-term investments are not remeasured to fair value when theCompany intends to cancel them.Fair value is determined using a number of indicators, including(i) <strong>Casino</strong>, Guichard-Perrachon’s equity in the underlying net assetsof the companies concerned at the balance sheet date; (ii) profitabilitycriteria; (iii) earnings outlooks; (iv) the share price for listed companies;and (v) the usefulness of the companies for the Group. Furtherinformation on investments in subsidiaries and associates is providedin Note 6–Long-term investments.A similar method of determining fair value is also used whereappropriate for the Company’s other long-term investments.In accordance with opinion No. 2007-C issued by the CNC’sEmerging Accounting Issues Committee on 15 June 2007, <strong>Casino</strong>,Guichard-Perrachon has elected to capitalise transaction costs onthe acquisition of long-term investments and defer them over a periodof five years.132 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the fi nancial statements4Marketable securitiesMarketable securities are stated at the lower of cost and probablerealisable value.In the case of treasury shares, probable realisable value correspondsto the average share price for the last month of the year.Treasury shares held for allocation to employees on the exercise ofstock options are written down on a plan-by-plan basis if their carryingamount exceeds the option exercise price.Probable realisable value of other categories of marketable securitiesalso corresponds to the average market price for the last month ofthe year.ReceivablesReceivables are stated at their nominal value. Provisions are bookedto cover any default risks.Exchange differences on translatingforeign operationsAssets and liabilities denominated in foreign currencies are translatedinto Euros at the rate prevailing on the balance sheet date and gainsor losses arising on translation are recorded in the balance sheetunder “Unrealised exchange gains” or “Unrealised exchange losses”.A provision is recorded for unrealised exchange losses.ProvisionsIn accordance with CRC standard 2000-06 relating to liabilities, thecompany records a provision to cover its obligations to third partieswhere the settlement of the obligation is expected to result in anoutflow of resources embodying economic benefits for the third partyand where the amount concerned can be estimated with sufficientreliability.The Company grants its employees retirement bonuses, determinedon the basis of length of service.In accordance with CNC recommendation 2003 R-01, the projectedbenefit obligation representing the full amount of the employees’accrued entitlements is recognised in the balance sheet as a provision.The amount set aside is calculated using the projected unit creditmethod, taking into account payroll taxes.Actuarial gains and losses on retirement benefit obligations arerecognised in profit by the corridor method. This method consists ofrecognising a specified portion of the net cumulative actuarial gainsand losses that exceed the greater of (i) 10% of the present value ofthe defined benefit obligation and (ii) 10% of the fair value of any planassets. The portion of actuarial gains and losses recognised for eachdefined benefit plan is the excess that fell outside the 10% “corridor” atthe previous reporting date, divided by the expected average remainingworking lives of the employees participating in that plan.The Company has also set up stock option and share grant plans forexecutives and employees.A liability is recognised when it is probable that the company will allotexisting shares to plan beneficiaries measured on the probable outflowof economic benefits, which is the probable cost of purchasing theshares if they are not already held by the company or their “entrycost” on the date of their allocation to the plan. If the stock optionsor stock awards are contingent upon the employee’s presence inthe company for a specific period, the liability is deferred over thevesting period.No liability is recognised for plans settled in new shares.No liability is recognised if the Company has not yet decided at theyear-end whether to settle the plans in new or existing shares.Other provisions concern specifically identified liabilities andcharges.Currency and interest rate instrumentsThe Company uses various financial instruments to reduce its exposureto currency and interest rate risks. The nominal amounts of forwardcontracts entered into by the Company are included in off-balancesheet commitments. Gains and losses arising on interest rate hedgesare recognised in the income statement on an accruals basis.Recurring profitRecurring profit includes all income and expense relating to theCompany’s ordinary activities.Non-recurring income/(expense)Non-recurring income and expense result from events or transactionsthat do not relate to <strong>Casino</strong>, Guichard-Perrachon’s ordinary activities asa holding company in view of their nature, frequency or amounts.Income tax expense<strong>Casino</strong>, Guichard-Perrachon is the head of a tax group that includesthe majority of its subsidiaries (285 at 31 December <strong>2010</strong>). Eachcompany in the tax group accounts for taxes as if it were taxed ona stand-alone basis.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group133
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4.6. NOTES TO THE INCOME STATEMENTAND BALANCE SHEETNOTE 1. OPERATING PROFITBreakdown€ millions <strong>2010</strong> 2009Revenue from services (excluding VAT) 153.7 151.2Other revenue 9.0 9.4Reversals of provisions 3.9 3.3Operating income 166.6 163.9Purchases and external charges (98.3) (85.3)Taxes other than on income (3.6) (2.5)Employee benefits expense (22.5) (21.0)Additions to depreciation, amortisation, impairment and provisions:• non-current assets(1.8) (1.4)• provisions for contingencies(2.3) (1.4)Other expenses (0.5) (0.8)Operating expense (129.0) (112.4)OPERATING PROFIT 37.6 51.5Expense transfers break down as follows:€ millions <strong>2010</strong> 2009Purchases and external charges 0.7 -Employee benefits expense 1.0 0.5Additions to depreciation, amortisation and provisions 0.1 0.1EXPENSE TRANSFERS 1.8 0.6Revenue from services (excluding VAT)€ millions <strong>2010</strong> 2009Seconded employees 6.3 3.3Brand royalties 52.7 53.3Other 94.7 94.6REVENUE FROM SERVICES (EXCLUDING VAT) 153.7 151.2As the parent and holding company for <strong>Groupe</strong> <strong>Casino</strong>, <strong>Casino</strong>, Guichard-Perrachon’s revenue mainly corresponds to royalties received fromsubsidiaries for the use of trademarks and brands owned by the company, as well as management fees billed to subsidiaries.<strong>Casino</strong>, Guichard-Perrachon generates 99% of its revenue with companies based in France.Average number of employeesNumber of employees <strong>2010</strong> 2009Managers 40 37Supervisors 2 2Other - -TOTAL 42 39134 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4NOTE 2. FINANCIAL INCOME AND EXPENSE€ millions <strong>2010</strong> 2009Income from investments in subsidiaries and associates:• Distribution <strong>Casino</strong> France149.7 -• Immobilière <strong>Groupe</strong> <strong>Casino</strong>98.2 350.5• Finovadis- 26.8• <strong>Mo</strong>noprix55.8 70.2• Vindémia25.1 70.0• Plouescadis12.6 -• Other7.0 9.4Total 348.4 526.9Other investment income 0.5 1.0Other financial income 222.9 172.9Provision and impairment reversals 2.5 30.2Net income from disposals of marketable securities 1.2 6.0Financial income 575.5 737.0Interest expense:• Bonds(257.0) (275.9)• Additions to amortisation and provisions(13.9) (29.7)• Other financial expense(174.6) (162.4)• Net expenses on disposals of marketable securities(4.9) (7.7)Financial expense (450.4) (475.7)NET FINANCIAL INCOME/(EXPENSE) 125.1 261.3Other financial income and expense mainly comprises interest oncurrent accounts with subsidiaries and gains and losses on interestratehedges.Net income and expense from disposals of marketable securitiesmainly included a €3.9 million loss on sales of treasury shares.The main movement in provisions and impairment in <strong>2010</strong> wasa €12.6 million provision for amortisation of bond redemptionpremiums.The main movements in provisions in 2009 were as follows:■■■provision for impairment of Finovadis shares (€25.5 million) andGéant Argentina shares (€2.2 million);reversal of provision for impairment of Latic shares (€17.6 million);reversal of provisions for liabilities recorded in relation to theredemption price of bonds indexed to the <strong>Casino</strong> share price(€7.7 million).NOTE 3. NET NON-RECURRING INCOME/(EXPENSE)€ millions <strong>2010</strong> 2009Net gains/(losses) on disposals of intangible assets and property, plant and equipment 0.2 -Net gains/(losses) on disposals of investments in subsidiaries and associates - (247.6)Gains/(losses) on disposal of non-current assets 0.2 (247.6)Provision expense (11.1) (26.1)Provision reversals 104.1 262.8Other non-recurring expense (17.8) (33.6)Other non-recurring income 0.7 18.2NET NON-RECURRING INCOME/(EXPENSE) 76.1 (26.3)In <strong>2010</strong>, net non-recurring income mainly comprised a reversalof the provision for potential repayment of recognised tax savingsto subsidiaries (see note 4).In 2009, net gains and losses on disposals of investments insubsidiaries and associates primarily included:■■loss generated on the dividend distribution in Mercialys(€11.1 million);loss on the disposal of Finovadis shares (€153.3 million), fullyprovided for in prior years;Registration Document <strong>2010</strong> | <strong>Casino</strong> Group135
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet■■loss on the contribution of Marushka shares to Tévir for €76.6 million,with a corresponding reversal of provisions for impairment of€81.7 million;loss on the disposal of Tout Pour La Maison shares to Distribution<strong>Casino</strong> France (€6.7 million), with a corresponding reversal inprovisions for impairment of the same sum.Other non-recurring income and expense mainly included a net chargeof €8 million under the liability warranty granted on the disposal ofLeader Price Polska, and net income of €6 million following the bondbuyback and early unwinding of related hedging instruments.NOTE 4. INCOME TAX BENEFIT€ millions <strong>2010</strong> 2009Recurring profit 162.7 312.8Non-recurring income/(expense) 76.1 (26.3)Profit before tax 238.8 286.5Group relief 132.8 116.9Income tax benefit 132.8 116.9NET PROFIT 371.6 40<strong>3.4</strong><strong>Casino</strong>, Guichard-Perrachon is the head of the French tax group andwould not have been taxable had it not elected for group tax relief.Group relief recorded by the company corresponds to tax savingsarising from netting off the profits and losses of the companies inthe tax group.A Conseil d’État decree published on 12 March <strong>2010</strong> states thatmembers of a tax group may freely agree between themselves onthe method of allocating the tax expense or benefit resulting fromelection for group tax relief. On that basis, <strong>Casino</strong>, Guichard-Perrachonamended the tax agreements with the tax group members. Theamendment states that the tax saving arising on tax loss carryforwardsattributable to tax group members will not be repaid to them in theform of cash, current account credit or debt write-off. Consequently,in accordance with opinion no. 2005-G issued by the CNC’s EmergingAccounting Issues Committee on 12 October 2005, the provision forpotential repayment of recognised tax savings was reversed in fullduring the year, in an amount of €82.1 million. This commitment isnow disclosed under contingent liabilities (see note 16).As head of the tax group, <strong>Casino</strong>, Guichard-Perrachon had no taxliability at 31 December <strong>2010</strong>.The tax group had no tax loss carryforwards under the group reliefagreement at 31 December <strong>2010</strong>.At that date, timing differences between book income and expensesand income and expenses for tax purposes gave rise to anunrecognised deferred tax asset of €18.5 million.NOTE 5. INTANGIBLE ASSETS AND PROPERTY,PLANT AND EQUIPMENTBreakdown€ millions <strong>2010</strong> 2009Goodwill 16.0 15.3Other intangible assets 1.9 1.7Impairment (1.2) (0.9)16.7 16.1Intangible assets 16.7 16.1Land and land improvements 0.6 0.6Depreciation - -0.6 0.6Buildings, fixtures and fittings 2.5 2.5Depreciation (1.1) (0.9)1.4 1.6Other property, plant and equipment 14.8 10.2Depreciation (6.4) (2.9)8.4 7.3Property, plant and equipment 10.4 9.5TOTAL INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT, NET 27.1 25.6136 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4<strong>Mo</strong>vements during the period€ millions CostAmortisation,depreciation andimpairmentAt 1 January 2009 29.9 (3.3) 26.6Increases 0.6 (1.4) (0.9)Decreases (0.1) - (0.1)At 31 December 2009 30.4 (4.8) 25.6Increases 5.4 (3.9) 1.5Decreases - - -AT 31 DECEMBER <strong>2010</strong> 35.8 (8.7) 27.1NetNOTE 6. LONG-TERM INVESTMENTSBreakdown€ millions <strong>2010</strong> 2009Investments in subsidiaries and associates 9,367.1 9,360.9Impairment (1) (17.5) (18.0)9,349.6 9,342.9Loans 31.5 28.9Impairment - -31.5 28.9Other 0.6 0.8Impairment - -0.6 0.8LONG-TERM INVESTMENTS 9,381.7 9,372.6(1) In accordance with the accounting policies described in the section on Signifi cant Accounting Policies, at 31 December <strong>2010</strong> the Company measured the fair value of its investmentsin subsidiaries based either on market value, as assessed by an independent valuer where appropriate, or on value in use determined by the discounted cash fl ows method. Value inuse determined by the discounted cash fl ows method is based on after-tax cash fl ows using the following rates.Parameters used for internal calculations of <strong>2010</strong> values in useRegion Growth rate (1) (x EBITDA)Terminal valueAfter-taxdiscount rate (2)France (retailing) 1.1% to 1.6% 9.0 6.0 to 9.0%France (other) 1.1% to 1.6% 7.0 to 8.0 6.0 to 8.2%Argentina 15.5% 9.5 20.9%Colombia 5.8% 9.5 9.8%Uruguay 5.5% 9.5 12.2%Thailand 2.0% 9.0 6.6%Vietnam 9.0% 9.5 14.8%Indian Ocean 1.6% 9.0 6.0 to 12.0%(1) The growth rate for the cash fl ow projection period includes the expected increase in the consumer price index, which is very high in some countries.(2) The discount rate used is the weighted average capital cost (WACC) for each country. WACC is calculated by taking account of the sector’s indebted beta, the historical observed marketrisk premium and the Group’s cost of debt.Based on the <strong>2010</strong> goodwill impairment test, which was completedin December, no impairment losses were recognised at 31 December<strong>2010</strong>.In view of the positive difference between value in use and carryingamount, the Group believes that on the basis of reasonably foreseeableevents, any changes in the key assumptions set out above would notlead to the recognition of an impairment loss. For example, a 100-basispoint increase in the discount rate or a 0.5-point decrease in theEBITDA multiple used to calculate terminal value or a 50-basis pointdecrease in the EBITDA margin in the final year of the projections usedto calculate the terminal value would not have led to the recognitionof an impairment loss.A list of the Company’s subsidiaries and associates is provided atthe end of this document.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group137
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet<strong>Mo</strong>vements during the period€ millions CostAmortisation andimpairmentAt 1 January 2009 9,629.4 (249.8) 9,379.6Increases 632.9 (27.8) 605.1Decreases (871.7) 259.6 (612.1)At 31 December 2009 9,390.6 (18.0) 9,372.6Increases 118.5 (1.0) 117.5Decreases (109.9) 1.5 (108.4)AT 31 DECEMBER <strong>2010</strong> 9,399.2 (17.5) 9,381.7NetIncreases in long-term investments in <strong>2010</strong> correspond mainly to:■■■■acquisition of Cativen shares for €49.6 million;acquisition of Codival shares for €4.8 million and Frénil Distributionshares for €5.3 million;additional Distribution <strong>Casino</strong> France shares for €4.7 million, receivedpursuant to the merger of Viver;grant of loans to Géant International BV for €49.6 million.Decreases in long-term investments in <strong>2010</strong> included:■■■sale of Cativen shares to Géant International BV for €49.6 million;sale of Codival and Frénil Distribution shares to Distribution <strong>Casino</strong>France for, respectively, €4.8 million and €5.3 million;repayment of the loan granted to Géant International BV for€49.6 million.NOTE 7. TRADE AND OTHER RECEIVABLES€ millions <strong>2010</strong> 2009Trade receivables 100.2 98.2Other operating receivables 2.2 2.2Other receivables 381.3 299.3Provisions for impairment of other receivables - (0.5)Current account advances 4,160.7 4,231.04,544.2 4,532.0TRADE AND OTHER RECEIVABLES 4,644.4 4,630.2At 31 December <strong>2010</strong>, trade and other receivables included€347.5 million in accrued income, primarily corresponding to <strong>Casino</strong>,Guichard-Perrachon’s share of the <strong>2010</strong> profits of companies whosebylaws provide for profit to be distributed as of the balance sheetdate. These accrued profit shares totalled €200.0 million in <strong>2010</strong>(€159.8 million in 2009) and mainly concerned Distribution <strong>Casino</strong>France and Immobilière <strong>Groupe</strong> <strong>Casino</strong>.All of the Company’s trade and other receivables are due within oneyear.NOTE 8. NET CASH AND CASH EQUIVALENTS€ millions <strong>2010</strong> 2009Mutual fund units 251.1 451.5Treasury shares 0.4 4.4Provisions for impairment in value of treasury shares - -Marketable securities 251.5 455.9Cash 556.0 723.0Bank overdrafts (6.2) (10.4)Commercial paper issued (1) (27.7) (43.7)Short-term credit facilities (2.0) (0.9)Total short-term bank credit facilities (35.9) (55.0)NET CASH AND CASH EQUIVALENTS 771.6 1,123.9(1) Rollover notes due in under 3 months.The fair value of mutual fund units approximates their carrying amount.138 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4Treasury shares <strong>2010</strong> 2009NUMBER OF SHARES HELDMarketablesecuritiesLong-terminvestments Total TotalAt 1 January 85,000 0 85,000 75,314Shares purchased 2,180,089 25,445 2,205,534 4,966,850Shares sold (2,258,161) (25,445) (2,283,606) (4,957,164)AT 31 DECEMBER 6,928 0 6,928 85,000VALUE OF SHARES HELD (in € millions)At 1 January 4.4 0.0 4.4 3.5Shares purchased 139.2 1.7 140.9 249.8Shares sold (143.2) (1.7) (144.9) (248.9)AT 31 DECEMBER 0.4 0.0 0.4 4.4Average purchase price per share (€) 51.8 - 51.8 51.8% of share capital 0.01 0.08Underlying net assets (in € millions) 0.4 5.7In February 2005, <strong>Casino</strong>, Guichard-Perrachon signed a liquiditycontract with Rothschild & Cie Banque authorising Rothschild & Cieto trade in the Company’s shares on Euronext Paris in order to ensurea liquid market for the shares.The Company allocated 700,000 ordinary shares and the sum of€40.0 million to the liquidity account. At 31 December <strong>2010</strong>, no <strong>Casino</strong>,Guichard-Perrachon shares were held under the contract.At the year-end, the company owned 6,928 ordinary shares with a parvalue of €1.53. Their aggregate quoted market value at 31 December<strong>2010</strong> was €0.5 million. Based on the average quoted price for themonth of December, no impairment provisions were required at theyear-end.No stock options were granted to executive officers or employeesin <strong>2010</strong>.NOTE 9. ACCRUALS AND OTHER ASSETS€ millions <strong>2010</strong> 2009Bond issue premium 117.0 0.5Prepaid expenses 2.2 0.7Unrealised exchange losses 1.4 1.6TOTAL ACCRUALS AND OTHER ASSETS 120.6 2.8Bond issue premiums are amortised on a straight-line basis over the life of the bonds.The increase in bond issue premium was due to the bond exchange transactions described in note 13.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group139
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheetNOTE 10. EQUITYChanges in equity, before and after appropriation of net profit€ millions <strong>2010</strong> 2009Share capital 169.3 168.9Additional paid-in capital 3,926.9 3,912.7Legal reserve:• before appropriation of net profit17.1 17.1• after appropriation of net profit17.1 17.1Available reserves 207.5 207.5Special long-term capital gains reserve:• before appropriation of net profit56.4 56.4• after appropriation of net profit56.4 56.4Retained earnings:• before appropriation of net profit2,466.8 2,355.6• after appropriation of net profit2,530.7 2,466.5Net profit for the period:• before appropriation of net profit371.6 40<strong>3.4</strong>• after appropriation of net profit- -Untaxed provisions 2.9 2.4TOTAL EQUITY• before appropriation of net profit7,218.5 7,124.0• after appropriation of net profit6,910.8 6,831.5Changes in equity€ millions <strong>2010</strong> 2009At 1 January 7,124.0 7,304.1Profit for the period 371.6 40<strong>3.4</strong>Dividend payout for the prior year (292.2) (581.2)Issuance of new shares 0.5 -Increase in additional paid-in capital 15.8 0.5Other movements (1.2) (2.8)AT 31 DECEMBER 7,218.5 7,124.0The increase in share capital and additional paid-in capital stemmedfrom:■■■281,725 shares issued on exercise of stock options;51,550 shares granted on 29 October <strong>2010</strong> under the share grantplan of 29 October 2008;46 shares to pay for the minority interests pursuant to the mergerabsorptionof Viver.Other movements mainly comprise the cancellation of 25,445 sharesauthorised by the Board of Directors on 3 December <strong>2010</strong>.140 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4<strong>Mo</strong>vements in share capital and the number of shares<strong>2010</strong> 2009At 1 January 110,360,987 112,358,660Shares issued to the employee share ownership plan - -Stock grants 51,550 77,169Shares issued on exercise of stock options 281,725 9,373Cancellation of shares (25,445) (14,589,469)Conversion of preferred non-voting shares into ordinary shares 12,505,254Shares issued to minority shareholders in connection with mergers 46 -AT 31 DECEMBER 110,668,863 110,360,987At 31 December <strong>2010</strong>, the share capital was divided into 110,668,863 ordinary shares with a par value of €1.53 each.Potential dilution<strong>2010</strong> 2009Number of shares at 31 December 110,668,863 110,360,987Share equivalents:• Exercise of stock options1,009,780 1,405,644TOTAL NUMBER OF POTENTIAL SHARES FOLLOWING EXERCISEOF SHARE EQUIVALENTS 111,678,643 111,766,631NOTE 11. QUASI-EQUITYIn 2005, <strong>Casino</strong>, Guichard-Perrachon issued €600 million worth of deeply subordinated perpetual bonds (TSSDI).As these bonds are undated, they are classified as quasi-equity. They are direct commitments with no collateral and are subordinated to allother liabilities.Accrued interest on the bonds is included under “Miscellaneous borrowings”.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group141
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheetNOTE 12. PROVISIONSBreakdown€ millions <strong>2010</strong> 2009Provisions for foreign exchange losses 1.4 1.6Provisions for potential repayment of income tax saving - 82.1Provision for Exito equity swap (1) - 16.5Provision for other liabilities (2) 74.2 78.6Provisions for charges 20.6 15.1TOTAL 96.2 193.9(1) On 19 December 2007, <strong>Casino</strong> announced an amendment to the shareholders’ agreement entered into with Exito on 7 October 2005.On the same date, the minority shareholders of Suramericana de Inversiones S.A. and other Colombian strategic partners entered into reciprocal put and call options with Citi on theirinterests in Exito (5.8% and 4.4% respectively). On 8 January 2008, Grupo Nacional de Chocolates SA sold its interest in Exito to Citi. Consequently, these partners have renounced the putoption granted to them under the historical shareholders’ agreement with <strong>Casino</strong>, thereby releasing <strong>Casino</strong> from its commitment to purchase their stakes in Exito.Suramericana sold its 5.8% interest in Exito on 19 January <strong>2010</strong> for COP 21,804 per share.The put options on the 4.4% owned by other Colombian strategic partners are exercisable for a period of three months from 16 December <strong>2010</strong>, 2011, 2012, 2013 and 2014. The calloption is exercisable by Citi for a period of three months from 16 March 2015. The exercise price of the options is the higher of:– a fi xed price of COP 19,477 per share, revalued for infl ation at +1%;– a multiple of EBITDA less net fi nancial debt;– a multiple of sales less net fi nancial debt;– the average quoted share price over the preceding six months.Concurrently with these transactions, on 8 January 2008 and 19 January <strong>2010</strong>, <strong>Casino</strong> entered into a total return swap (TRS) with Citi on the interests in Exito acquired respectively fromChocolates and Suramericana, with net settlement due in cash. The TRS is valid for three years and three months. <strong>Casino</strong> also undertook to enter into a further TRS contract on thecombined interests of the other partners (4.4% in total) the call and put options referred to above.During the fi rst half of <strong>2010</strong>, the Chocolates TRS was liquidated giving rise to a loss of €5 million.The Suramericana TRS contract states that <strong>Casino</strong> will receive the difference between the market price (sale price of Citi’s interest) and a minimum sum of COP 21,804 per share for theinterest sold by Suramericana, if positive, and will pay the difference to Citi if negative.The TRS on the 4.4% interest held by the other Colombian strategic partners will have the same terms and conditions as the Chocolates and Suramericana TRSs and will be effective fora maximum period of three years and three months from the date of exercise of the relevant call or put options.<strong>Casino</strong> will receive or pay as applicable the difference between the sale price of the interest on the market and the TRS entry price (i.e. the sale price paid by Citi to the minority shareholderson the basis described above).<strong>Casino</strong> has no contractual commitment nor the option to purchase the shares from Citi at maturity of the TRS (net settlement in cash).The main risk for <strong>Casino</strong> is that the sale price received by Citi at maturity of the TRS could be lower than the price paid by Citi to the Colombian shareholders, and that <strong>Casino</strong> couldbe obliged to pay Citi the difference, if negative, between the entry price (minority shareholders’ put exercise price) and the exit price (market sale price received by Citi).The risk has been measured on the basis of several factors:– the exercise price by the shareholders holding the 4.4% interest in Exito, which itself depends on when they elect to exercise their put according to their assessment of market conditionsand Exito’s future performance;– the term of each TRS, which is a maximum of three years and three months from the exercise date of the relevant put by the Colombian partners.– the market value of Exito shares on maturity of the TRSs.An independent bank has carried out several simulations to determine the best time for the minority shareholders to exercise their put options. It has also estimated the market value of Exitoshares at maturity of the TRSs using a multi-criteria approach based on forecast operating performance as set out in Exito’s business plan, investor expectations and Exito’s share price.Given the specifi c features of these TRSs and the estimated associated risk (the share price was COP 23,360 on 31 December <strong>2010</strong>), the Group made a €17 million provision reversal at theyear-end, fully extinguishing the provision originally recognised. The “central case” (most probable) simulation gives a positive value of €18 million at the year-end, which is not recognisedin the fi nancial statements. The “high case” (more optimistic) and “low case” (less optimistic) simulations give a positive value of €31 million and €7 million respectively.(2) Provisions for contingencies mainly comprise tax risks (<strong>Casino</strong> has received tax reassessments for 2006, 2007 and 2008, which have been contested) and the risk related to the negativenet equity position of some Group subsidiaries.<strong>Mo</strong>vements during the period€ millions <strong>2010</strong> 2009At 1 January 193.9 198.8Additions 9.0 26.8Reversals (1) (106.7) (31.7)At 31 December 96.2 193.9o/w operating (1.6) (1.8)o/w financial (0.3) (7.7)o/w non-recurring (95.8) 4.6TOTAL (97.7) (4.9)(1) Including reversals of surplus provisions totalling €126.6 million in <strong>2010</strong> and €11.1 million in 2009.142 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4Retirement obligationsProvision for retirement obligations€ millionsProvisionat 1 January <strong>2010</strong><strong>Mo</strong>vementfor the periodProvisionat 31 December<strong>2010</strong>Unrecognisedactuarial gainsand lossesObligation at31 December <strong>2010</strong>Projected benefit obligation 1.4 0.1 1.5 (0.8) 0.7Fair value of plan assets - - - - -PROVISION 1.4 0.1 1.5 (0.8) 0.7Provision movements€ millions Interest costExpectedreturn onplan assetsServicecostRecognisedactuarialgains andlossesCost forthe periodBenefit/contributionspaid<strong>Mo</strong>vementforthe periodProjected benefit obligation - - 0.1 - 0.1 - 0.1Fair value of plan assets - - - - - - -PROVISION - - 0.1 - 0.1 - 0.1The main actuarial assumptions used in <strong>2010</strong> to calculate the benefitobligation were as follows:■■discount rate: 4.0% (determined by reference to the Bloomberg15-year AA corporate composite index);rate of future salary increases: 2.5%;■■■■retirement age: 64;expected return on plan assets: 3.99%;mortality table: TGH05/TGF05;payroll taxes: 38%.NOTE 13. BORROWINGSBreakdown€ millions <strong>2010</strong> 2009Bonds 4,777.1 5,058.2Other borrowings 313.8 313.8Spot loans and confirmed credit facilities 2.0 0.9Bank overdrafts 33.9 54.1Sub-total 5,126.8 5,427.0Miscellaneous borrowings 1,058.2 1,046.8TOTAL BORROWINGS 6,185.0 6,473.8Maturities of borrowings€ millions <strong>2010</strong> 2009Due within one year 1,127.5 1,093.9Due in one to five years 3,662.0 4,629.9Due beyond five years 1,395.5 750.0TOTAL 6,185.0 6,473.8Net debt€ millions <strong>2010</strong> 2009Total borrowings 6,185.0 6,473.8Marketable securities (251.5) (455.9)Cash (556.0) (723.0)NET DEBT 5,377.5 5,294.8Total borrowings include €181.5 million in accrued interest.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group143
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheetBreakdown of borrowingsUSD Private placement notes2002-20112011 bonds2004-20112012 bonds2002-20122012 bonds2009-20122013 bonds2008-20132014 bonds2007-20142015 bonds2009-20152017 bonds<strong>2010</strong>-20172018 bonds<strong>2010</strong>-2018Interest rateFixed rate6.46%Fixed rate4.75%Fixed rate6.00%Fixed rate7.88%Fixed rate6.38%Fixed rate4.88%Fixed rate5.50%Fixed rate4.38%Fixed rate4.48%EffectiveinterestrateTOTAL BONDS 4,609.1Amount€ millions Term Due Hedging (1)6.66% 254.5 9 years November 2011 FRBFRL4.81% 210.1 7 years July 2011 FRBFRL6.24% 439.5 10 years February 2012 FRBFRL8.03% 164.5 3 years August 2012 FRL6.36% 718.5 5 years April 2013 FRBFRL5.19% 676.5 7 years April 2014 FRBFRL5.60% 750.0 6 years January 2015 FRL5.85% 887.8 7 years February 2017 FRL5.25% 507.7 8 years November 2018 FRLCalyon structured loan Variable rate 183.5 6 years June 2013 FRBSchuldschein loan Variable rate 130.0 6 years May 2013 Not hedgedTOTAL BANK BORROWINGS 313.5(1) FRB (fi xed rate borrower) – FRL (fi xed rate lender).FRLBond exchange offersOn 8 February and 11 May <strong>2010</strong>, the Group made two bond exchangeoffers, reducing its 2011, 2012 and 2013 maturities by €190 million,€596 million and €481 million respectively.The two new issues were for €888 million and €508 million maturingin 2017 and 2018 respectively. Their effective interest rate is 5.85%and 5.25% respectively.Other€ millions amountSpot loans and confirmed credit facilities 2.0Bank overdrafts 6.2Commercial paper 27.7Miscellaneous borrowings (1) 1,045.2Accrued interest 181.3TOTAL OTHER BORROWINGS 1,262.4(1) Including Géant Holding BV loan for €125.0 million, Gelase loan for €299.5 million Marushka BV loan for €315.5 million and Polca Holding loan for €300 million.144 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4Liquidity risk<strong>Casino</strong>, Guichard-Perrachon had confirmed credit facilities totalling €1,640.0 million and available cash of €771.6 million at 31 December<strong>2010</strong>, ensuring that it has sufficient liquidity to meet its needs.Confirmed bank lines of creditAmountof the facility Drawdowns DueSyndicated lines of credit (1) Variable rate 1,200.0 - 2015Confirmed bank lines of credit Variable rate 290.0 - 2012Confirmed bank lines of credit Variable rate 150.0 - 2013TOTAL 1,640.0(1) The €1,200 million syndicated line of credit was renewed in August <strong>2010</strong> for fi ve years.The Company’s loan and bond agreements include the customarycovenants and default clauses, including pari passu, negative pledgeand cross-default clauses.Bonds placed on the euro market do not include any covenantsrelated to financial ratios.At 31 December <strong>2010</strong>, the net debt to EBITDA ratio stood at 2.14compared with a minimum requirement of 3.5. The group considersthat it can comply comfortably with its covenants over the nexttwelve months.Some of the loan agreements, in an aggregate principal amount of€3,705 million, contain an acceleration clause at the lender’s discretionshould <strong>Casino</strong>, Guichard-Perrachon SA’s long-term senior debt ratingbe downgraded to non-investment grade due to a majority shareholderchange. In this case, the group would be obliged to pay the relevantloans on demand. Other loan agreements, in an aggregate principalamount €3,159 million, contain a coupon step-up clause increasingthe interest rate should <strong>Casino</strong>, Guichard-Perrachon SA’s long-termsenior debt rating be downgraded to non-investment grade.At 31 December <strong>2010</strong>, <strong>Casino</strong>, Guichard-Perrachon’s main covenantswere as follows:■■■■The €1.2 billion syndicated credit line renewed in August <strong>2010</strong> andthe BNP Paribas and Santander confirmed credit lines are subject toa consolidated net debt to consolidated EBITDA ratio of < 3.5;The other confirmed credit lines are subject to a consolidated netdebt to consolidated EBITDA ratio of < 3.7;The Calyon structured loan is subject to a consolidated net debtto consolidated EBITDA ratio of < 4.3;The ratios applicable to the US Private Placement Notes are asfollows:Ratio Required Actual at 31 Dec. <strong>2010</strong>Consolidated net debt/consolidated EBITDA (1) < 3.50 (2) 2.14Consolidated net debt/consolidated equity < 1.20 0.48Consolidated intangible assets/consolidated equity < 1.25 0.89(1) EBITDA (earnings before interest, taxes, depreciation and amortisation) = trading profi t plus operating depreciation and amortisation.(2) The consolidated net debt to consolidated EBITDA requirement decreased from 3.7 to 3.5 in <strong>2010</strong> due to the inclusion of the new syndicated credit line in the covenants applicable to theUS Private Placement Notes.NOTE 14. OTHER LIABILITIES€ millions <strong>2010</strong> 2009Related companies 725.6 654.3Other liabilities 70.2 114.3Deferred income 34.8 11.5OTHER LIABILITIES 830.6 780.1• o/w due within one year79<strong>3.4</strong> 757.1• o/w loans due beyond one year37.2 23.0Other liabilities include €47.6 million in accrued expenses.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group145
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheetNOTE 15. TRANSACTIONS AND BALANCESWITH AFFILIATED COMPANIES (1)€ millions <strong>2010</strong> 2009ASSETSInvestments in subsidiaries 8,363.2 8,358.2Loans and advances to subsidiaries - -Trade receivables 97.9 95.1Other 4,130.4 4,189.0LIABILITIESBorrowings 1,080.7 1,084.4Trade payables 10.8 3.3Other 719.9 648.8INCOME STATEMENTFinancial income 46.4 53.7Financial expense 35.8 52.4Dividends 292.3 456.7(1) Related companies correspond solely to Group companies that are fully consolidated.NOTE 16. OFF-BALANCE SHEET COMMITMENTSCommitments entered into in the ordinary course of business€ millions <strong>2010</strong> 2009Bonds and guarantees received from banks - -Undrawn confirmed lines of credit 1,640.1 1,736.8Total commitments received 1,640.1 1,736.8Bonds and guarantees given (1) 1,294.7 983.9Repayment to loss-making subsidiaries of the tax saving arising from group tax relief (2) 135.7 -Other commitments given - 0.2Total commitments given 1,430.4 984.1Interest rate hedges—nominal amount (3) 7,084.7 8,449.5Interest rate swaps 6,959.7 7,666.0Floors - 75.0Future Rate Agreement - 483.5Caps 125.0 225.0Other reciprocal commitments 0.2 0.3TOTAL RECIPROCAL COMMITMENTS 7,084.9 8,449.8(1) Including €569.0 million concerning related companies at 31 December <strong>2010</strong>.(2) See note 4.(3) Financial instruments are used solely for hedging purposes.At 31 December <strong>2010</strong>, the fair value of these instruments totalled €82.9 million, breaking down as follows:Type of instrument Number of contracts Fair valueO/w accrued interest and premiumsrecognised in the balance sheetInterest rate swaps 88 82.9 66.3Caps 5 - -TOTAL 93 82.9 66.3Aggregate accrued training rights under the “Droit Individuel à la Formation” (D.I.F.) system represented 2,516 hours at 31 December <strong>2010</strong>.At 31 December 2009, the total was 2,061 hours. The number of hours used during the year was not material.146 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheet4Other commitments€ millions <strong>2010</strong> 2009Seller’s warranty given in connection with the disposal of:(1)• Polish businesses35.2 36.0• Smart & Final shares3.7 3.5Total commitments given 38.9 39.5Written put options (2) 1,294.3 1,261.2<strong>Mo</strong>noprix (3) 1,225.0 1,200.0Uruguay (4) 69.3 61.2Brazil (5) - -Banque du <strong>Groupe</strong> <strong>Casino</strong>/Laser Cofinoga/Crédit Mutuel partnership (6) - -TOTAL RECIPROCAL COMMITMENTS 1,294.3 1,261.2(1) The Group gave the customary warranties to the buyers of its Polish businesses in 2006. <strong>Casino</strong> gave the buyer of its interest in Leader Price Polska a seller’s warranty covering any riskspre-dating the sale that were not covered by provisions in the balance sheet. The amount of the warranty was capped at €17 million and was valid for 18 months. The amount for tax-relatedrisks is capped at €50 million and is valid for a period corresponding to the statute of limitations.Following a claim under this warranty, in September 2009 the arbitration board ordered the Group to pay and recognise as a liability the sum of €14 million. <strong>Casino</strong> has appealed againstthis ruling. The residual risk of €36 million is purely theoretical as Leader Price Polska has already been subject to two tax audits during the warranty period. However, <strong>Casino</strong> has receiveda new claim for €6 million, which it believes to be unfounded.(2) Under the terms of the option contracts, the exercise price of written put and call options may be determined using earnings multiples, based on the latest published earnings for optionsexercisable at any time and earnings forecasts or projections for options exercisable as of a given future date. In many cases, the put option written by the Group is matched by a call optionwritten by the other party. For these options, the value shown corresponds to that of the written put.(3) <strong>Mo</strong>noprix: on 22 December 2008, <strong>Casino</strong> and Galeries Lafayette signed an amendment to their March 2003 strategic agreement which suspends the exercise of their respective put andcall options on <strong>Mo</strong>noprix shares for three years.As a result, <strong>Casino</strong>’s call on 10% of <strong>Mo</strong>noprix’s outstanding shares and Galeries Lafayette’s put on 50% of <strong>Mo</strong>noprix’s capital will be exercisable as of 1 January 2012. The other terms andconditions of exercise remain unchanged.The other terms of the March 2003 strategic agreement remain unchanged.The Group commissioned an independent valuation at 31 December <strong>2010</strong>. The independent expert estimated the value of 100% of <strong>Mo</strong>noprix shares at between €2,300 and €2,600 million.The contingent liability covering 50% of <strong>Mo</strong>noprix shares has been disclosed at a value of €1,225 million.(4) Disco Uruguay: <strong>Groupe</strong> <strong>Casino</strong> has granted a put option on 29.3% of Disco’s capital to the family shareholders. The option is exercisable until 21 June 2021 at a price based on the Discosub-group’s consolidated operating profi t, with a fl oor of US$41 million plus interest at 5% per year.(5) <strong>Groupe</strong> <strong>Casino</strong> has granted the Diniz family, with whom it exercises joint control over GPA in Brazil, two put options on shares in GPA’s head holding company, covering 0.4% and 7.6% ofGPA’s share capital respectively. The fi rst option is exercisable as of 2012 if the Group exercises its right to elect the Chairman of the Board of Directors of the holding company in that year.If the fi rst put option is exercised, the second will become exercisable for a period of eight years as of June 2014. The Group has a call option on the shares covered by the fi rst put optionrepresenting 0.4% of GPA’s share capital. This option is exercisable under certain conditions.(6) On 20 July <strong>2010</strong>, the Company decided to exercise its call option on LaSer Cofi noga’s 40% interest in Banque du <strong>Groupe</strong> <strong>Casino</strong>. The shares will be transferred no later than 20 January2012 in accordance with the existing agreements. The Company also signed a long-term partnership with <strong>Groupe</strong> Crédit Mutuel-CIC, which will have the effect of raising the latter’s interestin Banque du <strong>Groupe</strong> <strong>Casino</strong> to 50%. The purchase and sale price of the two transactions are based on the Company’s net earnings and equity in future years and cannot be determinedat present.Maturities of contractual commitmentsPayments due by period€ millionsTotal Due within one year Due in one to five years Due beyond five yearsLong-term borrowings 6,185.0 1,127.5 3,662.0 1,395.5Non-cancellable written puts 1,294.3 69.3 1,225.0TOTAL 7,479.3 1,196.8 4,887.0 1,395.5Registration Document <strong>2010</strong> | <strong>Casino</strong> Group147
4PARENT COMPANY FINANCIAL STATEMENTSNotes to the income statement and balance sheetNOTE 17. CURRENCY RISK€ millions USDAssets 6.5Liabilities (255.9)Net position before hedging (249.4)Off-balance sheet positions 342.5NET POSITION AFTER HEDGING 91.3NOTE 18. EQUITY RISK€ millionsCarrying amount of treasury shares 0.4Fair value 0.5Impairment -Impact of a 10% decrease in the share price -NOTE 19. COMPENSATION AND BENEFITS PAIDTO DIRECTORS AND OFFICERS€ millions <strong>2010</strong> 2009Compensation paid 1.8 1.8Loans and advances - -NOTE 20. CONSOLIDATION<strong>Casino</strong>, Guichard-Perrachon is consolidated by Rallye SA.NOTE 21. SUBSEQUENT EVENTSNo significant events have occurred since the year-end.148 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSFive-year fi nancial summary44.7. FIVE-YEAR FINANCIAL SUMMARYCAPITAL AT THE YEAR-END<strong>2010</strong> 2009 2008 2007 2006Share capital (€ millions) 169.3 168.9 171.9 171.5 171.2Number of outstanding shares with voting rights (1) 110,668,863 110,360,987 97,769,191 96,992,416 96,798,396Number of outstanding preferred non-voting shares - - 14,589,469 15,124,256 15,124,256RESULTS OF OPERATIONS (€ millions)Revenue (excluding VAT) 153.7 151.2 136.5 129.5 115.7Profit before tax, employee profit-sharing, depreciation,amortisation and provisions 157.4 48.9 114.0 444.4 118.7Income tax expense (132.8) (116.9) (83.8) (56.5) (157.8)Employee profit-sharing 0.1 0.1 0.1 0.1 0.1Net profit/(loss) for the period 371.6 40<strong>3.4</strong> 155.8 541.1 250.0Dividends paid on voting shares 307.7 292.5 247.4 223.1 208.1Dividends paid on non-voting shares - - 37.5 35.4 33.1Total dividend payout 307.7 292.5 284.9 258.5 241.2PER SHARE DATA (€)Weighted average shares outstanding during the year (2) 110,288,938 110,159,544 111,407,890 111,651,603 111,406,423Earnings per share after tax and employee profit-sharingbut before amortisation, depreciation and provisions 2.63 1.50 1.76 4.46 2.47Net profit/(loss) for the period 3.37 3.66 1.39 4.83 2.23Dividend paid per voting share 2.78 2.65 2.53 (4) 2.30 2.15Dividend paid per non-voting share - - 2.57 (4) 2.34 2.19EMPLOYEE DATANumber of employees (full-time equivalent) 42 39 30 25 24Total payroll (3) (€ millions) 16.5 15.8 14.0 15.7 14.3Total benefits (€ millions) 6.0 5.6 4.3 4.7 4.2(1) The increase in share capital during the year refl ects the issuance of 281,725 shares on exercise of stock options, 51,550 shares in share grants and 46 shares to pay for minorityinterests in connection with mergers, as well as the cancellation of 25,445 shares.(2) Excluding treasury shares.(3) Excluding discretionary profi t-sharing.(4) Excluding dividends in kind.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group149
4PARENT COMPANY FINANCIAL STATEMENTSList of subsidiaries and related companies4.8. LIST OF SUBSIDIARIES AND RELATED COMPANIES€ millionsCompanySharecapitalEquity%ownershipNumber ofshares heldCarryingamountLoans andadvancesgrantedby theCompanyGuaranteesgiven by theCompanyA. Data on investments whose carrying amount exceeds 1% of the share capitalGrossNet<strong>2010</strong> netsales<strong>2010</strong> netprofit (loss)Dividendsreceivedby theCompanyin the prioryear1. SUBSIDIARIES (50% or more)Distribution <strong>Casino</strong> France1, esplanade de France42008 Saint-Étienne Cedex 46 3,546 97.01 44,646,175 3,281 3,281 9,858 230 150L’Immobilière <strong>Groupe</strong> <strong>Casino</strong>1, esplanade de France42008 Saint-Étienne Cedex 100 1,194 100.00 100,089,304 1,130 1,130 131 98 98Segisor1, esplanade de France42008 Saint-Étienne Cedex 937 684 100.00 937,121,094 937 937 - 13 -CIT1, esplanade de France42008 Saint-Étienne Cedex 5 23 100.00 5,040,000 50 50 136 (8) -Tevir1, esplanade de France42008 Saint-Étienne 379 637 100.00 378,915,860 637 637 - 1 -Easydis1, esplanade de France42008 Saint-Étienne Cedex 1 19 100.00 60,000 44 44 554 (15) -Pachidis1, esplanade de France42008 Saint-Étienne Cedex 84 84 100.00 84,419,248 84 84 - - -Theiadis1, esplanade de France42008 Saint-Étienne Cedex 2 21 100.00 2,372,736 3 3 - 20 -Intexa1, esplanade de France42008 Saint-Étienne Cedex 2 2 97.91 990,845 7 7 - - -Green Yellow1, esplanade de France42008 Saint-Étienne Cedex 9 25 76.57 35,164 7 7 128 20 -<strong>Casino</strong> Services1, esplanade de France42008 Saint-Étienne Cedex - 16 100.00 100,000 19 19 68 (2) -Banque <strong>Groupe</strong> <strong>Casino</strong>58-60, avenue Kléber75116 Paris 23 98 60.00 140,816 36 36 9 555 143 7 -Boidis1, esplanade de France42008 Saint-Étienne Cedex - - 99.68 2,492 4 4 - - -<strong>Casino</strong> Entreprise1, esplanade de France42008 Saint-Étienne Cedex 14 (103) 100.00 14,063,422 14 0 - (2) -Comacas1, esplanade de France42008 Saint-Étienne Cedex - 2 100.00 99,999 3 3 28 - -150 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSList of subsidiaries and related companies4€ millionsCompanySharecapitalEquity%ownershipNumber ofshares heldCarryingamountLoans andadvancesgrantedby theCompanyGuaranteesgiven by theCompany<strong>2010</strong> netsales<strong>2010</strong> netprofit (loss)Dividendsreceivedby theCompanyin the prioryearVindémia5, impasse du Grand-Prado97438 Sainte-Marie 60 252 100.00 3,750,250 440 440 25 2 25Foodservice<strong>Casino</strong> Restauration1, esplanade de France42008 Saint-Étienne Cedex 36 95 100.00 35,860,173 103 103 255 (2) -InternationalSpice Investment MercosurCircusivalocion Durango383/ Officina 301<strong>Mo</strong>ntevideo – Uruguay 313 297 100.00 6,512,038,560 293 293 - 6 -GelaseRue RoyaleB–1000 Brussels-Belgium 520 700 100.00 28,476,254 520 520 - 43 -Latic (1)2711 Centerville RoadWilmington, Delaware – USA - 83 94,70 179,860 76 76 - 1 -2. ASSOCIATES (10 to 50%)<strong>Mo</strong>noprix14-16, rue Marc-Bloch92116 Clichy Cedex 62 506 50.00 3,859,479 843 843 238 167 56Geimex15, rue du Louvre75001 Paris - 42 49.99 4,999 63 63 249 8 -Uranie1, esplanade de France42008 Saint-Étienne 44 83 26.81 11,711,600 31 31 6 5 1InternationalGeant Holding BV1 Beemdstraadt5653 MA Eindhoven –The Netherlands 1 858 25.00 3,900 672 672 - (15) -GrossB. Aggregated data for all other subsidiaries or associates1. SUBSIDIARIES (not included in A above)GPAAvenida BrigadeiroLuiz Antonio, 3142São Paulo – Brazil 2 516 3 165 2.17 5,600,052 52 52 13,747 309 1Géant ArgentinaCorrientes Av.587 Piso 41043 Capital Federal – Argentina 84 50 5.68 387,267,369 7 5 - 5 -Various companies 8 7NetRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group151
4PARENT COMPANY FINANCIAL STATEMENTSList of subsidiaries and related companies€ millionsCompanySharecapitalEquity%ownership2. INVESTMENTS (not included in A above)Number ofshares heldCarryingamountGrossNetLoans andadvancesgrantedby theCompanyGuaranteesgiven by theCompany<strong>2010</strong> netsales<strong>2010</strong> netprofit (loss)Dividendsreceivedby theCompanyin the prioryearOther companies 3 3TOTAL INVESTMENTS 9,367 9,350o/w consolidatedcompanies 9,358 9,341• French companies7,736 7,721• Foreign companies1,622 1,620o/w non-consolidatedcompanies 9 9• French companies9 9• Foreign companiesOther long-terminvestments - -Marketable securities - -<strong>Casino</strong> shares - -Mutual funds 251 251TOTAL 251 251Certain data was unavailable and is therefore not included in thistable.Information on investments in non-French subsidiaries and associatescompanies is provided on a country-by-country basis in note 6.As a result of the judgment applied when measuring the fair valueof investments in foreign entities, provisions for the carrying amountand the amount of the Company’s share of the underlying assets arenot systematically recognised (see note 6).152 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
PARENT COMPANY FINANCIAL STATEMENTSStatutory Auditors’ special report on regulated agreements and commitments with related parties44.9. STATUTORY AUDITORS’ SPECIAL REPORT ONREGULATED AGREEMENTS AND COMMITMENTSWITH RELATED PARTIESSHAREHOLDERS’ MEETING HELD TO APPROVE THE FINANCIALSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER <strong>2010</strong>This is a free translation into English of the Statutory Auditors’ special report on regulated agreements and commitments with related partiesthat is issued in the French language and is provided solely for the convenience of English speaking readers. This report on regulatedagreements and commitments should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France. It should be understood that the agreements reported on are only those provided by the French CommercialCode (Code de commerce) and that the report does not apply to those related party transactions described in IAS 24 or other equivalentaccounting standards.To the Shareholders,In our capacity as Statutory Auditors of your Company, we herebyreport to you on regulated agreements and commitments with relatedparties.The terms of our engagement require us to communicate to you,based on information provided to us, the principal terms and conditionsof those agreements and commitments brought to our attention orwhich we may have discovered during the course of our audit, withoutexpressing an opinion on their usefulness and appropriateness oridentifying such other agreements, if any. It is your responsibility,pursuant to Article R. 225-31 of the French Commercial Code (Code decommerce), to assess the interest involved in respect of the conclusionof these agreements for the purpose of approving them.Our role is also to provide you with the information provided for inArticle R. 225-31 of the French Commercial Code in respect of theperformance of the agreements and commitments, already authorizedby the Shareholders’ Meeting and having continuing effect duringthe year, if any.We conducted our procedures in accordance with the professionalguidelines of the French National Institute of Statutory Auditors(Compagnie nationale des commissaires aux comptes) relating to thisengagement. These guidelines require that we agree the informationprovided to us with the relevant source documents.Agreements and commitments submitted tothe approval of the Shareholders’ MeetingPursuant to Article L. 225-40 of the French Commercial Code, thefollowing agreements and commitments, which were previouslyauthorized by your Board of Directors, have been brought to ourattention.Amendment to the agreement concerningloans and current account advancesentered into with MONOPRIX SAIndividuals concerned: Messrs. Philippe Houzé (Directorand Chairman & Chief Executive Officer of <strong>Mo</strong>noprix SA) andGilles Pinoncely (Director of your Company and <strong>Mo</strong>noprix SA).Nature and purpose: this arrangement relates to the increase from10 basis points to 40 basis points of the interest payable on the loansand current account advances effective 1 January <strong>2010</strong>. Accordingly,the loans and advances granted by your Company to <strong>Mo</strong>noprix SAbear interest at Euribor over the preset term of the loans and advancesgranted, with a 40 basis point mark-up.Terms and conditions: under this agreement, your Company recordedinterest income of €1,715 thousand in its financial statements for theyear ended 31 December <strong>2010</strong>.Agreements and commitments alreadyapproved by the Shareholders’ MeetingAgreements and commitmentsapproved during previous yearsa) Having continuing effect during the yearPursuant to Article R. 225-30 of the French Commercial Code, wehave been advised that the following agreements and commitmentsauthorized in previous years have had continuing effect during theyear.1. Partnership agreement entered into with MercialysNature and purpose: under the terms of this agreement:■■■■■Mercialys has a call option on any commercial property assetdevelopment transaction within the scope of its operations,conducted in France by the <strong>Casino</strong> Group, alone or in partnershipwith third parties (shopping centres and medium-sized areasexcept food stores);Mercialys has the opportunity to purchase properties off-plan, usingthe current agreement discount rate so as to adjust the price asset out in the context of forward sales. It can also receive assetsvia contributions subject to usual terms;the option exercise price is determined on the basis of future annualnet rent payments related to the assets divided by a yield rate set inconsideration of the features of the assets concerned, as detailedbelow. To account for changes in market conditions, these yieldrates are revised by the parties on a half-year basis;this exercise price is adjusted half-yearly in order to take accountof the effective conditions of lettings. As for the difference, positiveas negative (upside/downside) between the effective rents resultingfrom the letting and the planned rents, it will be shared half and halfbetween Mercialys and the developer;when exercising its option, Mercialys can request that the developerproceed with the letting. In this case, benefits granted to thetenants will go to the developer and the price of the assets will beadjusted on the basis of the effective rents as resulting from theletting. Mercialys can also postpone the purchase as long as theminimum 85% letting target is not reached. If there is no agreementbetween the parties, the vacant premises are evaluated based onan appraisal.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group153
4PARENT COMPANY FINANCIAL STATEMENTSStatutory Auditors’ special report on regulated agreements and commitments with related partiesThe yield rates are as follows:For the first half of <strong>2010</strong>:TYPE OF ASSETSShopping centresMetropolitanFranceCorsicaand Frenchoverseasdepartmentsandterritories(DOM-TOM)MetropolitanFranceRetail parksCorsicaand Frenchoverseasdepartmentsandterritories(DOM-TOM)TowncentreRegionalcentres/Largeshopping centres(> 20,000 sq.meters) 6.6% 7.2% 7.2% 7.6% 6.3%Neighbourhoodcentres(from 5,000 to20,000 sq. meters) 7.1% 7.6% 7.6% 8.1% 6.7%Other assets(< 5,000 sq. meters) 7.6% 8.1% 8.1% 8.8% 7.2%For the second half of <strong>2010</strong>:TYPE OF ASSETSShopping centresMetropolitanFranceCorsicaand Frenchoverseasdepartmentsandterritories(DOM-TOM)MetropolitanFranceRetail parksCorsicaand Frenchoverseasdepartmentsandterritories(DOM-TOM)TowncentreRegionalcentres/Largeshopping centres(> 20,000 sq.meters) 6.5% 7.1% 7.1% 7.5% 6.2%Neighbourhoodcentres(from 5,000 to20,000 sq. meters) 7.0% 7.5% 7.5% 8.0% 6.6%Other assets(< 5,000 sq. meters) 7.5% 8.0% 8.0% 8.7% 7.1%Terms and conditions: during fiscal year <strong>2010</strong>, Mercialys hasacquired from the <strong>Casino</strong> Group a building complex of more than20,000 sq. meters located on the former grounds of the “Caserne deBonne” in Grenoble. The value of this asset, to which a 6.3% yield ratewas applied as provided for in the agreement, totals €92.9 million.The transaction was concluded between Mercialys and yourCompany’s subsidiaries. The performance of this agreement has hadno impact on your Company’s financial statements.2. Trademark license agreemententered into with MercialysNature, purpose and terms and conditions: under this agreement,your Company grants Mercialys, for no consideration, a non-exclusiveright to use, in France only, the “Nacarat” wordmark and figurativetrademark, the “Beaulieu” wordmark and the “Beaulieu… pour unepromenade” semi-figurative trademark.Mercialys has a right of first refusal over these trademarks shouldyour Company intend to sell them.3. Current account and cash management agreemententered into with MercialysNature, purpose and terms and conditions: pursuant to thisagreement, the balance of the Mercialys current account totaled€67,034 thousand at 1 January <strong>2010</strong> and €68,209 thousand at31 December <strong>2010</strong>. Interest expense for the year, calculated at Eoniaplus 10 basis points, amounted to €366 thousand.4. Advisory agreement entered into with EURISNature and purpose: pursuant to the terms of this agreement,EURIS provides consulting and advisory services to your Companyto determine its strategic planning and development.Terms and conditions: for the year ended 31 December <strong>2010</strong>, yourCompany recorded an expense of €350 thousand excluding taxes,to pay for these services.5. Membership of Mr Jean-Charles Naouri, Chairmanand Chief Executive Officer, in a healthcare, deathand disability insurance planNature, purpose and terms and conditions: with respect to thisplan, employer contributions relating to healthcare coverage anddeath and disability coverage amounted to €122.27 thousand and€1.87 thousand, respectively, for fiscal year <strong>2010</strong>.In addition, the Chairman and Chief Executive Officer is also a memberof group compulsory pension plans, the contributions to which aredetermined by national joint agreements.b) Not having effect during the yearFurthermore, pursuant to the French Commercial Code, we havebeen informed that the performance of the following agreements andcommitments, approved by the Shareholders’ Meeting in previousfiscal years, did not continue during the year.6. Framework agreement entered into between GALERIESLAFAYETTE and your Company on 20 March 2003,amended on 22 December 2008Nature, purpose and terms and conditions: under the frameworkagreement entered into on 20 March 2003, amended on 22 December2008, Galeries Lafayette and your Company granted put and calloptions on the share capital of <strong>Mo</strong>noprix SA.These options are only exercisable from 1 January 2012 toMarch 2028. The call option exercise price held by Galeries Lafayettewill be determined on the basis of an expert appraisal. The call optionheld by your Company on 10% of the share capital of <strong>Mo</strong>noprix SAwill be determined based on the appraisal value plus a 21% premium.From the date of exercise of the call option by your Company and fora period of 12 months, Galeries Lafayette will have a put option onits remaining 40% interest in MONOPRIX SA at the same appraisalvalue plus a 21% premium.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésSylvain Lauria Daniel Mary-Dauphin Antoine de Riedmatten Alain Descoins154 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
5CORPORATEGOVERNANCE5.1. Board of Directors ........................................................1565.2. Management ................................................................1765.3. Auditing of Financial Statements ..................................1805.4. Chairman’s Report .......................................................1815.5. Statutory Auditors’ Report ...........................................192Appendix: Board of Directors’ Charter .........................193Registration Document <strong>2010</strong> | <strong>Casino</strong> Group155
5CORPORATE GOVERNANCEBoard of Directors5.1. BOARD OF DIRECTORS5.1.1. COMPOSITION OF THE BOARD AND BOARD PRACTICESAs of 28 February 2011, the Board of Directors had fifteenmembers:■■■■■■■■■■■■■■■Jean-Charles Naouri, Chairman and Chief Executive Officer;Didier Carlier, representing Euris;Abilio Dos Santos Diniz;Henri Giscard d’Estaing;Jean-Marie Grisard, representing Matignon-Diderot;Philippe Houzé;Marc Ladreit de Lacharrière;Didier Lévêque, representing Foncière Euris;Catherine Lucet;Gilles Pinoncély;Gérald de Roquemaurel;David de Rothschild;Frédéric Saint-Geours;Michel Savart, representing Finatis;Rose-Marie Van Lerberghe.Non-voting director: Pierre Giacometti.Honorary Chairman (not a director): Antoine Guichard.Board Secretary: Jacques Dumas.As part of its annual duties, the Appointments and CompensationCommittee reviewed the composition of the Board of Directors and,more particularly, assessed the independence of each director basedon the criteria set out in the AFEP-MEDEF corporate governance codewith regard to relationships with Group companies that could affecttheir freedom of judgement or lead to conflicts of interest.Directors are selected for their acknowledged competence, diversityof experience, complementary areas of expertise and commitmentto contributing to the Group’s future development.Five directors meet the independence criteria set out in the AFEP-MEDEF code: Catherine Lucet, Rose-Marie Van Lerberghe, HenriGiscard d’Estaing, Gérald de Roquemaurel and Frédéric Saint-Geours.The Board of Directors appointed Catherine Lucet as independentdirector to replace Jean-Dominique Comolli on 28 February 2011, andappointed Foncière Euris as director to replace Omnium de Commerceet de Participations on 29 April <strong>2010</strong>. Both appointments are subjectto ratification at the Annual General Meeting of 14 April 2011.Another five directors are qualified outside people or representativesof the Company’s shareholders: Abilio Dos Santos Diniz, PhilippeHouzé, Marc Ladreit de Lacharrière, Gilles Pinoncély and David deRothschild.The Company’s controlling shareholder is represented by five directorsand therefore does not hold a majority of the Board’s votes.The rules and procedures governing the functioning of the Board ofDirectors are defined by law, the Company’s articles of associationand the Board Charter. They are described in detail in the Chairman’sReport, which follows, and the Board Charter, included in anappendix.Directors are elected for a term of three years. At the proposal of theAppointments and Compensation Committee and in accordance withthe AFEP-MEDEF code, the Board decided to introduce a systemof retirement by rotation for the directors with effect from the AnnualGeneral Meeting to be held in 2012, when the term of all directorscurrently in office is due to expire. One third of directors will retire andseek re-election each year.The Board is also proposing to amend the age limit for directors bysimply applying the provisions set out by law, that is no more thanone third of the directors may be aged over 70.According to the Board Charter, each director must own a number ofregistered shares equal to at least one year’s directors’ fees.Non-voting directorThe articles of association permit the appointment of one or morenon-voting directors, who are either elected at an Ordinary GeneralMeeting of the shareholders or, between two meetings, appointed bythe Board of Directors subject to ratification at the next shareholders’meeting. The non-voting directors are elected for a term of threeyears. They attend Board meetings in a consultative capacity only,to make observations and give opinions. The number of non-votingdirectors may not exceed five. The age limit for holding office asnon-voting director is 80.Pierre Giacometti was appointed non-voting director on 3 March<strong>2010</strong>.156 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors55.1.2. DIRECTORSHIPS AND OTHER POSITIONS HELDBY MEMBERS OF THE BOARD OF DIRECTORSJean-Charles NaouriChairman and Chief Executive OfficerDate of birth8 March 1949, aged 62Business address1, esplanade de France – 42000 Saint-Étienne, FranceBiographyA graduate of the École normale supérieure (Sciences), Harvard University and the École nationale d’administration, Jean-Charles Naouribegan his career as an Inspecteur des finances at the French Treasury. He was appointed chief of staff for the Minister of Social Affairs andNational Solidarity in 1982, then for the Minister of the Economy, Finance and Budget in 1984. He founded Euris in 1987.Main executive positionsChairman and Chief Executive Officer of <strong>Casino</strong>Chairman of Euris (SAS)Current offi ce within the CompanyOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMChairman 4 September 2003 2012 AGMChief Executive Officer 21 March 2005 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Euris Group:• Chairman and Chief Executive Officer of Rallye (listed company);• Director of CBD (listed company) and Wilkes Participações (Brazil);• Deputy Chairman of Fondation <strong>Casino</strong>;• Chairman of Fondation Euris.Outside the Euris Group:• Director of Fimalac (listed company);• Legal Manager of SCI Penthièvre Neuilly;• Member of the Bank of France Consultative Committee;• Chairman of the ’Promotion des Talents’ Association;• Honorary Chairman and Director of the Institut de l’École normalesupérieure.Directorships and positions held during the past fi ve years (other than those listed above)• Chairman of the Board of Directors of Finatis and Euris SA;• Member of the Supervisory Board of <strong>Groupe</strong> Marc de Lacharrière(SCA), Natixis and Super de Boer;• Representative of <strong>Casino</strong>, Guichard-Perrachon as Chairman ofDistribution <strong>Casino</strong> France;• Legal Manager of Penthièvre Seine;• Director of Natixis and HSBC France;• Non-voting director of Fimalac and Caisse Nationale des Caissesd’Épargne et de Prévoyance (CNCE);• Deputy Chairman of Fondation Euris.Number of <strong>Casino</strong> shares held: 367Registration Document <strong>2010</strong> | <strong>Casino</strong> Group157
5CORPORATE GOVERNANCEBoard of DirectorsAbilio Dos Santos DinizDirectorDate of birth28 December 1936, aged 74Business addressAvenue Brig. Luiz Antonio 3126 – 01402-901 São Paulo-SP, BrazilBiographyA graduate in Business & Administration from the São Paulo School of Administration Getulio Vargas Foundation, Abilio Dos Santos Dinizjoined Companhia Brasileira de Distribuição (CBD) in 1956, where he has spent his entire career. The main shareholder in CBD since the1990s, he was appointed Chief Executive Officer and then Chairman of the Board of Directors. He has also been a member of the SuperiorCouncil of the Economy of São Paulo State and the National <strong>Mo</strong>netary Council of Brazil.Main executive positionChairman of the Board of Directors of Companhia Brasileira de Distribuição (Grupo Pão de Açùcar), Brazil (listed company)Current offi ce within the CompanyOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the GPA Group:• Chairman of the Board of Directors of Wilkes Participações S/A(Wilkes);• Director of Sendas Distribuidora S/A (Sendas);• Director of Globex Utilidades S/A (Globex) (listed company);• Director of Paic Participações Ltda, Península Participações Ltda,Fazenda da Toca Ltda, Ciclade Participações Ltda, Onyx 2006Participações Ltda, Rio Plate Empreendimentos e ParticipaçõesLtda, Zabaleta Participações Ltda and Wilkes Participações S/A;• Director Chairman of Recco Master Empreendimentos eParticipações S/A.Directorships and positions held during the past fi ve years (other than those listed above)• Officer Director of Instituto Pão de Açùcar de Desenvolvimento Humano.Number of <strong>Casino</strong> shares held: 300158 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Henri Giscard d’EstaingDirectorDate of birth17 October 1956, aged 54Business address11, rue de Cambrai – 75019 Paris, FranceBiographyHenri Giscard d’Estaing is a graduate of the Institut d’études politiques de Paris and holds a Master’s degree in economics. He began hiscareer in 1982 with Cofremca, where he was associate director specialising in consumer behaviour patterns and their impact on marketand strategy.In 1987, he joined the Danone Group as head of business development, subsequently becoming Managing Director of UK subsidiary HPFood Lea & Perrins, then Chief Executive Officer of Evian-Badoit and lastly Director of the Mineral Waters division.In 1997, he joined Club Méditerranée where he was, successively, Deputy Chief Executive Officer responsible for finance, business developmentand international relations (1997-2001), Chief Executive Officer (2001-2002), Chairman of the Management Board (2002-2005) and Chairmanand Chief Executive Officer (2005 to date).Main executive positionChairman and Chief Executive Officer of Club MéditerranéeCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 8 April 2004 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Club Méditerranée Group• Chairman of Fondation d’Entreprise Club Méditerranée;• Director of Holiday Hotels AG (Switzerland) and Cathargo (Tunisia).Outside the Club Méditerranée Group• Member of the Supervisory Board of Vedior-Randstad(The Netherlands);• Director of Aéroports de Paris (ADP).Directorships and positions held during the past fi ve years (other than those listed above)• Chairman of the Board of Directors and director of Club MedWorld Holding;• Chairman of the Board of Directors of Jet Tours SA;• Chairman of the Board of Directors of Club Med Services Pte Ltd(Singapore);• Chairman of Hôteltour, Club Med Marine and CM UK Ltd (UK);• Deputy Chairman of Nouvelle Société Victoria (Switzerland);• Director of SECAG Caraïbes (France) and Club Med ManagementAsia Ltd (Hong Kong);• Permanent representative of Club Méditerranée SA as a directorof Hôteltour.Number of <strong>Casino</strong> shares held: 313Registration Document <strong>2010</strong> | <strong>Casino</strong> Group159
5CORPORATE GOVERNANCEBoard of DirectorsPhilippe HouzéDirectorDate of birth27 November 1947, aged 63Business address40, boulevard Haussmann – 75009 Paris, FranceBiographyPhilippe Houzé began his career with <strong>Mo</strong>noprix in 1969, becoming Chief Executive Officer in 1982 and Chairman and Chief Executive Officer in1994. Under his management, <strong>Mo</strong>noprix has become the leading town-centre convenience store chain through its innovative sales concepts.The strategic alliance he established with <strong>Casino</strong> in 2000 has contributed to <strong>Mo</strong>noprix’s success.He is a member of the sustainable development association “Comité 21”, and author of “La vie s’invente en ville”. He has a strong personalcommitment to sustainable development and is closely involved in urban regeneration projects with a focus on environmental and socialresponsibility. Since 2005, Philippe Houzé has been Chairman of the Management Board of Galeries Lafayette, France’s leading departmentstore group. He is a Commandeur de la Légion d’honneur.Main executive positionChairman of the Management Board of Société Anonyme des Galeries LafayetteCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Galeries Lafayette group• Chairman and Chief Executive Officer of <strong>Mo</strong>noprix SA;• Chairman of the Board of Directors of Artcodif (SA) and Fondationd’Entreprise <strong>Mo</strong>noprix;• Chairman of Galeries Lafayette Haussmann – GL Haussmann(SAS);• Vice-Chairman and Chief Executive Officer of <strong>Mo</strong>tier (SAS);• Member of the Supervisory Board of Bazar de l’Hôtel de Ville –B.H.V. (SAS);• Permanent representative of <strong>Mo</strong>noprix SA on the Boardof Directors of Fidecom;• Permanent representative of Galeries Lafayette on the Boardsof Laser and Laser Cofinoga.Outside the Galeries Lafayette group• Director of HSBC France and HSBC Bank Plc (United Kingdom);• Chairman of Union du Grand Commerce de Centre-Ville (UCV);• Member of the Board of Directors of the National Retail Federation(NRF-USA);• Within the Paris Chamber of Commerce and Industry:- Elected member of the Paris Chamber of Commerce andIndustry,- Chairman of the Founding Board of Advancia-Négocia,- Vice-President of the Commerce and Trade Commission,- Member of the Education Commission.Directorships and positions held during the past fi ve years (other than those listed above)• Chairman of the Supervisory Board of Sofidi SA;• Chairman and Chief Executive Officer of Artcodif;• Chief Executive Officer of Sogefin (SAS);• Chairman of Aux Galeries de la Croisette (SAS),Europa Quartz (SAS), <strong>Mo</strong>nop’ (SAS), <strong>Mo</strong>nop Store (SAS),<strong>Mo</strong>noprix Exploitation (SAS) and Naturalia France (SAS);• Chairman of the Board of Directors of Aldeta;• Member of the Executive Committee of the MEDEF;• Director of Royal Orly (SA) and Société d’Exploitation du Palaisdes Congrès de Paris (SEPCP);• Member of the Commercial Urban Planning Commission(Paris Chamber of Commerce and Industry);• Member of the Management Committee of <strong>Mo</strong>tier;• Deputy Chairman of Union du Grand Commerce de Centre-Ville(UCV);• Member of the Internal Regulations Commission (Paris Chamberof Commerce and Industry);• Member of the Communications Committee (Paris Chamberof Commerce and Industry).Number of <strong>Casino</strong> shares held: 300160 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Marc Ladreit de LacharrièreDirectorDate of birth6 November 1940, aged 70Business address97 rue de Lille – 75007 Paris, FranceBiographyA graduate of the École nationale d’administration, Marc Ladreit de Lacharrière began his career with Banque de Suez et de l’Union des Mines,which subsequently became Indosuez after merging with Banque de l’Indochine. He left his position as the Head of Indosuez’s InvestmentBanking Department in 1976 to join L’Oréal as Chief Financial Officer, later becoming Vice-Chairman and Chief Operating Officer. In March1991, he left L’Oréal to found his own company, Fimalac.Main executive positionChairman and Chief Executive Officer of Fimalac.Current offi ce within the CompanyOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Fimalac group• Chairman of the Board of Directors of Fitch Group (USA) and FitchRatings (USA);• Chairman of the Management Boardof <strong>Groupe</strong> Marc de Lacharrière;• Legal Manager of Fimalac Participations.Outside the Fimalac group• Director of L’Oréal, Gilbert Coullier Productions (SAS) and Renault;• Honorary Chairman of Comité national des conseillersdu commerce extérieur de la France;• Chairman of the Board of Directors of Agence France Museums;• Member of the Fondation Culture et Diversité, FondationBettencourt Schueller, Fondation d’Entreprise L’Oréal, Fondationdes sciences politiques, Musée des arts décoratifs and Conseilartistique des musées nationaux;• Member of the Institut de France (Vice-President of the Académiedes Beaux-Arts).Directorships and positions held during the past fi ve years (other than those listed above)• Chairman of Fitch Group Holdings (USA);• Director of Algorithmics (Canada), Cassina (Italy) and state-ownedMusée du Louvre;• Member of the Bank of France Consultative Committee.• Member of the Conseil stratégique pour l’attractivité de la France.Number of <strong>Casino</strong> shares held: 600Registration Document <strong>2010</strong> | <strong>Casino</strong> Group161
5CORPORATE GOVERNANCEBoard of DirectorsGilles PinoncélyDirectorDate of birth5 October 1940, aged 71 – Descendant of the Geoffroy Guichard familyBusiness address1, esplanade de France – 42000 Saint-Étienne, FranceBiographyA graduate of the École supérieure d’agriculture de Purpan in Toulouse, Gilles Pinoncély began his career with L’Épargne, which was takenover by the <strong>Casino</strong> Group in 1970. He was appointed fondé de pouvoir in 1976, Managing Partner of <strong>Casino</strong> in 1981, then Statutory Managerin 1990. He became a member of <strong>Casino</strong>’s Supervisory Board in 1994 and a director in 2003.Main positionDirector of <strong>Casino</strong>Current offi ce within the CompanyOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Director of <strong>Mo</strong>noprix and Financière Celinor (Vie & Véranda);• Director of Centre Long Séjour Sainte-Élisabeth.Directorships and positions held during the past fi ve years (other than those listed above)• Director of Celinor and Vie & Véranda.Number of <strong>Casino</strong> shares held: 4,000 (full title) and 21,000 (benefi cial interest)162 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Gérald de RoquemaurelDirectorDate of birth27 March 1946, aged 65Business address84, avenue d’Iéna – 75116 Paris, FranceBiographyGérald de Roquemaurel has a law degree, is a graduate of the Institut d’études politiques de Paris and an alumnus of the École nationaled’administration (1970 to 1972). A direct descendant of Louis Hachette (founder of Librairie Hachette), he joined Publications Filipacchiin 1972 and became a director of Paris-Match in 1976. In 1981, he was appointed Vice-Chairman and Chief Executive Officer of <strong>Groupe</strong>Presse Hachette (which became Hachette Filipacchi Presse in 1992). From 1983 to 1985, he was responsible for the Group’s internationalexpansion and in 1984 became director and Chief Executive Officer of Publications Filipacchi (later Filipacchi Medias), and then a memberof the Executive and Strategic Committee of Lagardère S.C.A, a director of Hachette SA and Legal Manager of NMPP.On 18 June 1997, he was appointed Chairman and Chief Executive Officer of Hachette Filipacchi Médias, then in 1998, Chief OperatingOfficer of the Lagardère Group in charge of the media division. In April 2001, he became Chairman of F.I.P.P. (Fédération internationale de lapresse périodique) for two years. In June 2001, he was appointed Chairman of the Club de la Maison de la chasse et de la nature. In early2007, he became Managing Partner of HR Banque and was appointed Senior Partner of Arjil in January 2009.Main positionSenior Partner of ArjilCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 31 May 2006 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Member of the Supervisory Boardof Baron Philippe de Rothschild SA;• Chairman of the Board of Directors of SICAV Sagone;• Chairman of Éditions Lebey SAS;• Deputy Chairman of Association Presse Liberté;• Director of the Musée des arts décoratifs (association)and Nakama (Skyrock).Directorships and positions held during the past fi ve years (other than those listed above)• Chairman and Chief Executive Officer of Hachette FilipacchiMédias;• Chairman of Hachette Filipacchi Presse and Quillet;• Director of Hachette, Hachette Distribution Services, HachetteLivre, Nice Matin, La Provence, Éditions Philippe Amaury,Le <strong>Mo</strong>nde and Fondation Jean-Luc Lagardère;• Member of the Supervisory Board of Société Financière HR;• Legal Manager of Compagnie pour la Télévision Féminine SNCand Nouvelles Messageries de la Presse Parisienne SARL.Number of <strong>Casino</strong> shares held: 400Registration Document <strong>2010</strong> | <strong>Casino</strong> Group163
5CORPORATE GOVERNANCEBoard of DirectorsDavid de RothschildDirectorDate of birth15 December 1942, aged 68Business address29, avenue de Messine – 75008 Paris, FranceBiographyA graduate of the Institut d’études politiques de Paris, David de Rothschild began his career with Le Nickel. From 1973 to 1978, he wasChief Executive Officer of Compagnie du Nord and then Chairman of the Management Board of Banque Rothschild. He founded ParisOrléans Banque in 1982 and became Statutory Managing Partner of Rothschild & Cie Banque and Chairman and Chief Executive Officer ofFrancarep (now Paris Orléans).Main executive positionManaging Partner of Rothschild & Cie Banque (SCS – Paris)Current offi ce within the CompanyOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Rothschild group• Managing Partner of Rothschild & Cie Banque (SCS – Paris),Rothschild Gestion Partenaires (SNC – Paris), Rothschild Ferrières(SC – Paris), SCI 2 Square Tour Maubourg (SC – Paris) andSociété Civile du Haras de Reux (SC – Reux);• Chairman of Rothschild Concordia (SAS – Paris), RothschildNorth America (USA), Rothschilds Continuation Holding AG(Switzerland), N.M. Rothschild & Sons Ltd (UK) and SCS Holding(SAS – Paris), Financière de Reux (SAS – Paris) and Financière deTournon (SAS – Paris);• Vice Chairman of Rothschild Bank AG (Switzerland);• Managing Director of Rothschild Europe BV (The Netherlands);• Member of the Management Board of Paris-Orléans (SA – Paris);• Sole Director of GIE Five Arrows Messieurs de Rothschild Frères(Paris) and Sagitas (Paris).Outside the Rothschild group• Member of the Supervisory Board of Compagnie Financière Saint-Honoré (SA – Paris) and Euris SA;• Director of La Compagnie Financière Martin-Maurel (SA – Marseille)and De Beers SA.Directorships and positions held during the past fi ve years (other than those listed above)• Managing Partner of Financière Rabelais (SCA – Paris);• Vice-Chairman of the Supervisory Board of Paris Orléans;• Chairman of Rothschild Concordia AG (Switzerland), RothschildHolding AG (Switzerland), Concordia BV (The Netherlands) andRothschild Investments NV (The Netherlands);• Member of the Supervisory Board of ABN Amro (The Netherlands).Number of <strong>Casino</strong> shares held: 400164 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Frédéric Saint-GeoursDirectorDate of birth20 April 1950, aged 60Business address75, avenue de la Grande-Armée – 75116 Paris, FranceBiographyFrédéric Saint-Geours has a degree in economics, is a laureate of the Institut d’études politiques de Paris and an alumnus of the École nationaled’administration. After a career with the Ministry of Finance and in the offices of the President of the National Assembly and the Secretary ofState for the Budget (1975 to 1986), he joined the PSA Peugeot-Citroën group in 1986 as Deputy Chief Financial Officer and became ChiefFinancial Officer of the group in 1988. From 1990 to 1997, he was Deputy Chief Executive Officer of Automobiles Peugeot, where he wasappointed Chief Executive Officer in early 1998. He was a member of the Management Board of PSA Peugeot-Citroën from July 1998 toDecember 2007. On 1 January 2008, he was appointed Adviser to the Chairman of the Management Board of PSA Peugeot Citroën andmember of the Management Committee. He was elected Chairman of the UIMM trade federation on 20 December 2007. On 17 June 2009,he became a member of the Management Board of Peugeot SA and Head of Finance and Strategy for the PSA Peugeot Citroën Group.Main executive positionMember of the Management Board of Peugeot SA, Vice-President Finance and Strategic Development of PSA Peugeot CitroënCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 31 May 2006 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the PSA group• Chairman and Chief Executive Officer of Banque PSA Finance;• Chairman of the Supervisory Board of Peugeot FinanceInternational NV (The Netherlands);• Vice-Chairman of Dongfeng Peugeot-Citroën AutomobilesCompany Ltd (UK);• Vice-Chairman and Managing Director of PSA International S.A.;• Director of Gefco;• Director of Automobiles Citroën;• Director of Peugeot Citroën Automobiles S.A.;• Director of PCMA Holding B.V. (The Netherlands);• Permanent representative of Peugeot SA on the Boardof Directors of Automobiles Peugeot.Outside the PSA group• Chairman of Union des industries et métiers de la métallurgie.Directorships and positions held during the past fi ve years (other than those listed above)• Member of the Supervisory Board of Peugeot Deutschland GmbH;• Director of Peugeot España S.A.;• Chief Executive Officer and Director of Automobiles Peugeot;• Permanent representative of Automobiles Peugeot on the Boardof Directors of Gefco and Bank PSA Finance.Number of <strong>Casino</strong> shares held: 350Registration Document <strong>2010</strong> | <strong>Casino</strong> Group165
5CORPORATE GOVERNANCEBoard of DirectorsRose-Marie Van LerbergheDirectorDate of birth7 February 1947, aged 64Business address32, rue Guersant – 75017 Paris, FranceBiographyRose-Marie van Lerberghe is a graduate of the École nationale d’administration, the Institut d’études politiques in Paris and INSEAD BusinessSchool. She is an alumnus of the École normale supérieure and has a degree in history and a higher degree in philosophy. She started hercareer as inspector at the General Inspection of Social Affairs and subsequently became deputy director for labour defence and promotionat the employment delegation of the Ministry of Labour. She then joined the Danone group for ten years, where she became head of humanresources. Subsequently, she was delegate general for employment and vocational training, and then became Director of the network ofParis Hospitals. Since 2006, she has been Chairman of the Management Board of the Korian group.Rose-Marie Van Lerberghe is also a director of Air France and the École des hautes études en santé publique, and a member of the Conseilsupérieur de la magistrature.Main executive positionChairman of the Management Board of KorianCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 19 May 2009 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Outside the Korian group• Director of Air France;• Director of the École des hautes études en santé publique(EHESP);• Director of the Hôpital Saint-Joseph foundation (FHSJ);• Member of the Conseil supérieur de la magistrature.Directorships and positions held during the past fi ve years (other than those listed above)• Director of the Institut des hautes études en santé publique (IHESP);• Member of the Board of Directors of the Institut Pasteur foundation.Number of <strong>Casino</strong> shares held: 300166 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Matignon DiderotSociété par actions simplifiée with share capital of €9,038,500Registered office: 83, rue du Faubourg-Saint-Honoré – 75008 Paris, France433 586 260 R.C.S. ParisCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 17 October 2007 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Director of Finatis (listed company).Directorships and positions held during the past fi ve years (other than those listed above)• Director of Euris SA and Rallye.Number of <strong>Casino</strong> shares held: 350Permanent representativeJean-Marie GrisardDate of birth1 May 1943, aged 67Business address83, rue du Faubourg-Saint-Honoré – 75008 Paris, FranceBiographyA graduate of the École des hautes études commerciales, Jean-Marie Grisard began his career with the mining group Peñarroya-Le Nickel-Imétal, holding various positions in Paris and London. He was appointed Chief Financial Officer of Francarep (now Paris Orléans) in 1982 andjoined Euris in 1988 as Company Secretary, a position he held until 2008.Main positionAdviser to the Chairman of EurisOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Euris Group• Director of Carpinienne de Participations (listed company)and Euris Limited (UK);• Permanent representative of Finatis SA on the Board of Directorsof Rallye SA (listed company);• Director of Fondation Euris.Outside the Euris Group• Member of the Steering Committee, director and deputy treasurerof the “Promotion des Talents” Association;• Legal manager of Frégatinvest SARL.Directorships and positions held during the past fi ve years (other than those listed above)Within the Euris Group• Chief Executive Officer of Euris SA and Finatis SA;• Corporate Secretary of Euris;• Chairman of Matimmob 1 SAS, Eurdev SAS, Matignon DiderotSAS and Matignon Rousseau SAS;• Director of Foncière Euris, Finatis SA, Euris North AmericaCorporation (ENAC), Euris Real Estate Corporation (EREC),Euristates, Parande Brooklyn Corp and Park Street InvestmentsInternational Ltd;• Permanent representative of Euris SA on the Board of Directorsof <strong>Casino</strong>, Guichard-Perrachon SA;• Permanent representative of Euris SAS on the Board of Directorsof Euris SA;• Permanent representative of Foncière Euris on the Boardof Directors of Marigny Belfort SA;• Treasurer of Fondation Euris.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group167
5CORPORATE GOVERNANCEBoard of DirectorsFinatisSociété anonyme with share capital of €84,852,900Registered office: 83, rue du Faubourg-Saint-Honoré – 75008 Paris, France712 039 163 R.C.S. ParisCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 15 March 2005 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Director of Carpinienne de Participations (listed company), Foncière Euris (listed company) and Rallye (listed company).Directorships and positions held during the past fi ve years (other than those listed above)• Director of Euris SA.Number of <strong>Casino</strong> shares held: 380Permanent representativeMichel SavartDate of birth1 April 1962, aged 48.Business address83, rue du Faubourg-Saint-Honoré – 75008 Paris, FranceBiographyMichel Savart is a graduate of the École polytechnique and the École nationale supérieure des mines de Paris. He began his career withHavas in 1986, joined Banque Louis Dreyfus as project manager in 1987 and Banque Arjil (Lagardère group) in 1988, where he was projectmanager then adviser to the Management Board and Managing Director until 1994. He joined Banque Dresdner Kleinwort Benson (DKB) in1995, where he was notably Executive Director in charge of mergers and acquisitions until 1999. He then joined the Euris-Rallye group inOctober 1999 as Director and Advisor to the Chairman, responsible for private equity investments, and is also Chairman and Chief ExecutiveOfficer of Foncière Euris.Main executive positionsDirector and Advisor to the Chairman of RallyeChairman and Chief Executive Officer of Foncière EurisOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Euris Group• Director of Cdiscount SA and Mercialys (listed company);• Permanent representative of Rallye on the Board of Directorsof <strong>Groupe</strong> Go Sport (listed company);• Representative of Foncière Euris as:- Chairman of Marigny Belfort SAS, Marigny Élysées SAS, MarignyFoncière SAS, Matignon Abbeville SAS, Matignon Bail SAS,and Matignon Corbeil Centre SAS,- Legal Manager of SCI Sofaret and SCI Les Herbiers;• Representative of Marigny Foncière as:- Chairman of Mat-Bel 2 SAS,- Co-Legal Manager of SNC Centre Commercial Porte deChâtillon, SCI Les Deux Lions, SCI Palais des Marchands andSCI Ruban Bleu Saint-Nazaire, and Legal Manager of SCI Pontde Grenelle;• Representative of Matignon Abbeville as Legal Managerof Centrum K Sarl, Centrum J Sarl and Centrum Z Sarl(Luxembourg);• Representative of Centrum NS Luxembourg Sarl as Legal Managerof Manufaktura Luxembourg Sarl (Luxembourg);• Legal Manager of Alexa Holding GmbH, Alexa Shopping CentreGmbH, Alexanderplatz Voltairestrasse GmbH, Einkaufzsentrumam Alex GmbH, Guttenbergstrasse BAB5 GmbH, HBF KönigswallGmbH and Loop 5 Shopping Centre GmbH (Germany),Centrum NS Luxembourg Sarl.Outside the Euris Group• Legal Manager of EURL <strong>Mo</strong>ntmorency and EURL AubriotInvestments.Directorships and positions held during the past fi ve years (other than those listed above)• Representative of Foncière Euris as Chairman of MarignyExpansion and Legal Manager de la SNC Alta Marigny Carréde Soie;• Representative of Matignon Abbeville as Chairmanof Mat-Bel 2 SAS;• Director of <strong>Groupe</strong> Go Sport;• Representative of Parande SAS on the Board of Directorsof Matussière et Forest SA;• Representative of Marigny-Élysées as Co-Legal Managerof SCCV des Jardins de Seine 1, SCCV des Jardins de Seine 2and SNC du Centre Commercial du Grand Argenteuil.168 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5EurisSociété par actions simplifiée with share capital of €169,806Registered office: 83, rue du Faubourg-Saint-Honoré – 75008 Paris, France348 847 062 R.C.S. ParisOffice Elected/appointed Term expiresDirector 4 September 2003 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Director of Finatis (listed company), Foncière Euris (listed company) and Rallye (listed company).Directorships and positions held during the past fi ve years (other than those listed above)• Director of Euris SA.Number of <strong>Casino</strong> shares held: 365Permanent representativeDidier CarlierDate of birth5 January 1952, aged 59Business address83, rue du Faubourg-Saint-Honoré – 75008 Paris, FranceBiographyDidier Carlier is a graduate of the Reims École supérieure de commerce and a qualified accountant. He began his career in 1975 as anauditor with Arthur Andersen, rising to the grade of Manager. He subsequently became Corporate Secretary of Équipements MécaniquesSpécialisés and then Chief Financial Officer of the Hippopotamus restaurant group. He joined the Rallye group in 1994 as Chief FinancialOfficer and was appointed Deputy Chief Executive Officer in January 2002.Main executive positionDeputy Chief Executive Officer of Rallye SAOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Euris Group• Chairman and Chief Executive Officer of Miramont Finance etDistribution SA, La Bruyère SA and Colisée Finance VI SA;• Chairman of Alpétrol SAS, Cobivia SAS, Colisée Finance IV SAS,Colisée Finance V SAS, Genty Immobilier et Participations SAS,Kerrous SAS, L’Habitation <strong>Mo</strong>derne de Boulogne SAS, LesMagasins Jean SAS, Marigny Percier SAS, Matignon Sablons SASand Parande SAS;• Chairman and Chief Executive of MFD Inc. (USA);• Managing Director of Limpart Investments BV (The Netherlands);• Representative of Parande SAS as Chairman of Pargest SAS andParinvest SAS;• Permanent representative of Foncière Euris SA (listed company)as Director of Rallye SA (listed company);• Permanent representative of Matignon Sablons on the Board ofDirectors of <strong>Groupe</strong> Go Sport SA (listed company);• Legal Manager of SCI de Kergorju, SCI des Sables and SCI desPerrières.Outside the Euris Group• Legal Manager of SC Dicaro.Directorships and positions held during the past fi ve years (other than those listed above)Within the Euris Group• Chairman and Chief Executive Officer of Ancar, Colisée FinanceSA and Colisée Finance II SA;• Chairman of MFD Finances SAS, Parande Développement SAS,Parcade SAS, Soparin SAS, Syjiga SAS, Colisée Finance III SASand Omnium de Commerce et de Participations SAS;• Director of Clearfringe Ltd;• Managing Director of Club Sport Diffusion SA (Belgium);• Representative of Parande SAS as Chairman of Pargest HoldingSAS, Matignon Neuilly SAS and Sybellia SAS;• Permanent representative of Omnium de Commerce et deParticipations SAS as Director of <strong>Groupe</strong> Go Sport SA.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group169
5CORPORATE GOVERNANCEBoard of DirectorsFoncière EurisSociété anonyme with share capital of €149,648,910Registered office: 83, rue du Faubourg-Saint-Honoré – 75008 Paris, France702 023 508 R.C.S. ParisCurrent offi ce within the CompanyOffice Elected/appointed Term expiresDirector 29 April <strong>2010</strong> 2012 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Chairman of Matignon Abbeville SAS, Matignon Bail SAS,Matignon Corbeil Centre SAS, Marigny Belfort SAS, Marigny-Élysées SAS, Marigny Expansion SAS and Marigny Foncière SAS;• Director of Rallye SA (listed company);• Legal Manager of SCI Sofaret and SCI Les Herbiers.Directorships and positions held during the past fi ve years (other than those listed above)• Chairman of Marigny Concorde;• Director of Apsys International, Marignan Consultantsand Marigny Belfort;• Legal Manager of SCI Pont de Grenelle;• Co-Legal Manager of SNC Alta Marigny Carré de Soie.Number of <strong>Casino</strong> shares held: 365170 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Permanent representativeDidier LévêqueDate of birth20 December 1961, aged 49Business address83, rue du Faubourg-Saint-Honoré – 75008 Paris, FranceBiographyDidier Lévêque is a graduate of the École des hautes études commerciales. From 1985 to 1989, he was research manager for the FinanceDepartment of Roussel-Uclaf. He joined the Euris Group in 1989 as deputy Corporate Secretary and was appointed Corporate Secretaryin 2008.Main executive positionsCorporate Secretary of Euris SASChairman and Chief Executive Officer of Finatis (listed company)Other directorships and positions held in <strong>2010</strong> and as of 28 February 2011Within the Euris Group• Chairman and Chief Executive Officer of Euris North AmericaCorporation (ENAC), Euristates Inc. and Euris Real EstateCorporation (EREC) (USA);• Chairman of Parande Brooklyn Corp. (USA);• Chairman of Par-Bel 2 (SAS), Matignon Diderot (SAS) andMatimmob 1 (SAS);• Chief Executive Officer of Carpinienne de Participations SA(listed company);• Director of Carpinienne de Participations, Park Street InvestmentsInternational Ltd and Euris Limited (UK);• Member of the Supervisory Board of Centrum Development SA,Centrum Leto SA, Centrum Poznan SA and Centrum Weiterstadt SA(Luxembourg);• Permanent representative of Finatis as Director of Foncière Euris(listed company);• Permanent representative of Matignon Corbeil Centre as Directorof Rallye (listed company);• Director and Treasurer of Fondation Euris.Outside the Euris Group• Legal Manager of SARL EMC Avenir 2.Directorships and positions held during the past fi ve years (other than those listed above)Within the Euris Group• Deputy Corporate Secretary of Euris SAS;• Chairman of Compagnie d’Investissements Trans-Européens –CITE (SAS), Parinvest (SAS), Dofinance (SAS), Euristech (SAS),Par-Bel 1 (SAS), Parantech Expansion (SAS), <strong>Mo</strong>ntparnet (SAS)and Matignon-Tours (SAS);• Permanent representative of Carpinienne de Participations(listed company) as Director of Marigny Belfort;• Permanent representative of Euris SA as Directorof Foncière Euris (listed company);• Permanent representative of HMB as Director of Colisée Finance;• Representative of Euristech as Chairman of Marigny-Artois (SAS);• Representative of Parinvest as Chairman of Parfonds (SAS);• Permanent representative of Matignon-Diderot as Directorof Finatis (listed company);• Permanent representative of Omnium de Commerce et deParticipations as Director of <strong>Casino</strong>, Guichard-Perrachon.Outside the Euris Group• Legal Manager of EMC Avenir.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group171
5CORPORATE GOVERNANCEBoard of DirectorsPierre GiacomettiDirector until 3 March <strong>2010</strong>, appointed non-voting director on that dateDate of birth14 June 1962, aged 48Business address4, rue de la Planche – 75007 Paris, FranceBiographyA graduate of the Institut d’études politiques de Paris, Pierre Giacometti began his career with BVA in 1985. He became head of politicalresearch in 1986 and was appointed executive director in 1990, responsible for the Opinion, Institutionals & Media division. In 1995, he joinedthe Ipsos group as Chief Executive Officer of Ipsos Opinion and international director responsible for developing global opinion researchwithin the group. In 2000, he became co-Chief Executive Officer of Ipsos-France. In February 2008, he left Ipsos and set up his own strategyand communications consultancy, Giacometti Peron & Associés. From 1989 to 1999, Pierre Giacometti was a senior lecturer at the Institutd’études politiques de Paris.Main executive positionChairman of Giacometti Peron & AssociésCurrent offi ce within the CompanyOffice Elected/appointed Term expiresNon-voting director 3 March <strong>2010</strong> 2013 AGMOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Member of the Supervisory Board of the Fondation pour l’innovation politique;• Senior lecturer at the IEP in Paris.Directorships and positions held during the past fi ve years (other than those listed above)• Director of <strong>Casino</strong>, Guichard-Perrachon.Number of <strong>Casino</strong> shares held: 300172 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors5Honorary Chairman (not a director)Antoine GuichardHonorary Chairman (not a director)Date of birth21 October 1926, aged 84 – Descendant of the Geoffroy Guichard familyBusiness address1, Esplanade de France – 42000 Saint-Étienne, FranceBiographyA graduate of the École des hautes études commerciales, Antoine Guichard began his career with <strong>Casino</strong> in 1950. He was appointed fondéde pouvoir en 1953, Managing Partner in 1966, then Statutory Legal Manager in 1990. He was Chairman of the Management Board from1994 to 1996, when he joined the Supervisory Board, becoming its Chairman in 1998. He was a director from 2003 to 2005 and has beenHonorary Chairman of the Board of Directors since 2003.Main positionHonorary ChairmanOther directorships and positions held in <strong>2010</strong> and as of 28 February 2011• Honorary Chairman of Fondation Agir Contre l’Exclusion (FACE).Directorships and positions held during the past fi ve years (other than those listed above)• Director of CELDUC.Number of <strong>Casino</strong> shares held: 54,577Registration Document <strong>2010</strong> | <strong>Casino</strong> Group173
5CORPORATE GOVERNANCEBoard of Directors5.1.3. DIRECTORSHIPS AND POSITIONS OF DIRECTORSWHO STOOD DOWN IN <strong>2010</strong>Jean-Dominique ComolliDate of birth25 April 1948, aged 62Directorships and positions held in <strong>2010</strong> until date of resignation• Chairman of the Board of Directors of Altadis SA (Spain) andSeita;• Chairman of the Supervisory Board of Altadis <strong>Mo</strong>rocco;• Director of Pernod-Ricard (listed company), Calyon Bank, <strong>Casino</strong>,Guichard-Perrachon (listed company) and the state-owned OpéraComique.Catherine SoubieDate of birth20 October 1965, aged 45Directorships and positions held in <strong>2010</strong> until date of resignationWithin the Euris Group• Deputy Chief Executive Officer of Rallye SA (listed company);• Permanent representative of Euris on the Board of Directorsof Rallye SA (listed company);• Permanent representative of Finatis on the Board of Directorsof <strong>Casino</strong>, Guichard-Perrachon (listed company);• Permanent representative of <strong>Casino</strong>, Guichard-Perrachonon the Board of Directors of Banque du <strong>Groupe</strong> <strong>Casino</strong> SA;• Director of Mercialys (listed company);• Permanent representative of Rallye SA on the Board of Directorsof <strong>Groupe</strong> Go Sport SA (listed company);• Director of Fondation Euris.Outside the Euris Group• Legal Manager of Bozart;• Director of Medica.Société Omnium de Commerce et de Participations (OCP)Société par actions simplifiée with share capital of €2,427,000Registered office: 83 rue du Faubourg-Saint-Honoré – 75008 Paris, France572 016 681 R.C.S. ParisDirectorships and positions held in <strong>2010</strong> until resignation date• Director of <strong>Casino</strong>, Guichard-Perrachon (listed company);• Director of <strong>Groupe</strong> Go Sport SA (listed company).174 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEBoard of Directors55.1.4. DIRECTORS WHOSE APPOINTMENT IS SUBJECTTO RATIFICATION AT THE SHAREHOLDERS’ MEETINGCatherine LucetDirector (appointed by the Board of Directors on 28 February 2011 to replace Jean-Dominique Comolli)Date of birth3 February 1959, aged 52Business address25, avenue Pierre-de-Coubertin – 75013 Paris, FranceBiographyCatherine Lucet is a graduate of the École polytechnique (1979), the École des mines de Paris (1984) and holds an MBA from INSEAD. Shebegan her career as an analyst at the Analysis and Forecasting Centre of the French Ministry of Foreign Affairs. She joined McKinsey in 1986as a consultant, later becoming a project manager. In 1991, she was appointed Chief Executive Officer of Éditions Harlequin, a subsidiaryof Éditions Hachette and Canadian publisher Torstar. In 1996, she joined Anglo-Dutch group Reed Elsevier where she headed their Frenchscientific and medical publishing subsidiary until 2001, when she joined the Vivendi Group as head of Éditions Nathan. Catherine Lucet isnow a member of the Executive Committee of Editis, Chief Executive Officer of its Education and Reference division which includes ÉditionsNathan, Bordas, Clé and Retz and Dictionnaires Le Robert, and Chairman of Éditions Nathan. In <strong>2010</strong>, she was also appointed Vice-Presidentof the Cap Digital competitiveness business cluster.Main executive positionChief Executive Officer of the Education and Reference division of EditisDirectorships and positions held as of 28 February 2011• Chairman of Sejer;• Chairman and Chief Executive Officer of Éditions Nathanand Dictionnaires Le Robert;• Director of Cap Digital.Directorships and positions held during the past fi ve years (other than those listed above)• Chairman and Chief Executive Officer of Éditions Nathan Jeux;• Chairman of the association Savoir-Livre.Foncière EurisDirector (appointed by the Board of Directors on 28 February 2011 to replace Omnium de Commerce et de Participations)Details about Foncière Euris are provided on page 170.To the best of the Company’s knowledge, during the last five years none of the members of the Board of Directors has received any convictionsin relation to fraudulent offences or has acted in the capacity of manager of a company that has undergone bankruptcy or been placed inreceivership or liquidation. In addition, no director has received an official public incrimination and/or sanction by any statutory or regulatoryauthority or has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of anissuer or from acting in the management or conduct of the affairs of any issuer.There are no directors elected by the employees or directors representing the employee shareholders.There are no family ties between the directors.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group175
5CORPORATE GOVERNANCEManagement5.2. MANAGEMENT5.2.1. CHAIRMAN AND CHIEF EXECUTIVE OFFICERAt its meeting of 19 May 2009, acting on the recommendation of theAppointments and Compensation Committee, the Board of Directorsrenewed Jean-Charles Naouri’s term of office as Chairman and ChiefExecutive Officer for the remainder of his term as a director, expiringat the annual general meeting to be held in 2012.As Chairman of the Board of Directors, Jean-Charles Naouri organisesand leads the work of the Board and reports thereon at Shareholders’Meetings. He is also responsible for ensuring that the Company’scorporate governance structures function correctly.Restrictions on the Chief Executive Officer’spowersUnder Article L. 225-56 of the French Commercial Code (Code decommerce), the Chief Executive Officer has full powers to act in allcircumstances in the name of the Company within the limits of itscorporate purpose, and except for those powers vested by law inthe Board of Directors or in the shareholders in a General Meeting.The Chief Executive Officer represents the Company in its dealingswith third parties.However, at the time of his appointment, with a view to ensuringgood corporate governance, Jean-Charles Naouri requested that therestrictions on the Chief Executive Officer’s powers relating to certainmanagement transactions should remain in place, based on the type oftransaction concerned and/or the amounts involved. These restrictionsare set out in the Chairman’s Report (see page 182).Jean-Charles Naouri is the Company’s only executive officer.5.2.2. EXECUTIVE COMMITTEEThe Executive Committee, headed by the Chairman and ChiefExecutive Officer, is responsible for the day-to-day management ofthe Group’s operations. It implements the strategic guidelines set outby the Board of Directors and the Chief Executive Officer. It helps toshape strategy, coordinates and shares initiatives, and tracks crossfunctionalprojects to ensure the alignment of action plans deployedby the subsidiaries and operating divisions, and, in this capacity,sets priorities when necessary. It monitors the Group’s results andfinancial position and draws up the Group’s overall business plans.The Committee meets fortnightly.The Executive Committee comprises the following members:■■Jean-Charles Naouri, Chairman and Chief Executive Officer;Hervé Daudin, Merchandise and Supply Chain Director, Chairmanof the Board of Directors of Cdiscount;■■■■■■■Yves Desjacques, Human Resources Director;Jean-Michel Duhamel, Chairman of Franprix-Leader Price Holding(formerly Asinco);Jacques Ehrmann, Real Estate and Expansion Director;Antoine Giscard d’Estaing, Chief Financial Officer;Thierry Levental, Group Legal Counsel;André Lucas, Managing Director, Hypermarkets and <strong>Casino</strong>Supermarkets;Arnaud Strasser, Corporate Development and Holdings Director;■ Committee Secretary: Omri Benayoun.5.2.3. EXECUTIVE OFFICERS’ COMPENSATIONAND DIRECTORS’ FEESThe principles and rules approved by the Board of Directors fordetermining the compensation and benefits allocated to corporateofficers are described in the Chairman’s report on page 184.Chairman and Chief Executive Officer’scompensationIn his capacity as Chairman and Chief Executive Officer, Jean-CharlesNaouri receives a fixed salary plus a performance-related bonusset annually on the recommendation of the Appointments andCompensation Committee, supported where appropriate by marketsurveys conducted by outside consultants.His gross annual fixed salary, which has remained unchanged sincehis appointment on 21 March 2005, is €700,000. His performancerelatedbonus can represent up to 150% of his fixed salary. It iscontingent on the achievement of quantitative targets concerningsales, consolidated trading profit and net debt ratios, consistent withthose set for members of the Executive Committee.176 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEManagement5Compensation paid to the Chairman and Chief Executive Off icer by <strong>Casino</strong>Total compensation, directors’ fees and benefits paid by the company to Jean-Charles Naouri in his capacity as Chairman and Chief ExecutiveOfficer in 2009 and <strong>2010</strong>:€2009 <strong>2010</strong>Amount due (3) Amount paid (4) Amount due (3) Amount paid (4)Fixed (1) 700,000 700,000 700,000 700,000Variable (1) (2) 233,333 635,600 532,778 233,333Exceptional bonus - - - -Directors’ fees 12,500 12,500 12,500 12,500Benefits - - - -TOTAL 945,833 1,348,100 1,245,278 945,833(1) Gross before social security contributions and tax.(2) The method of setting the performance-related component is described in the Chairman’s report on page 184.(3) Compensation due in respect of the relevant year regardless of payment date.(4) Total compensation paid by the company during the year.Jean-Charles Naouri has no employment contract. He is not entitled tosupplementary pension benefits, termination benefits or non-competebenefits. He is a member of the mandatory group pension plans(ARCCO and AGIRC) and the death and disability plan covering allemployees within the company.Compensation paid to the Chairman and Chief Executive Off icer by <strong>Casino</strong>, Guichard-Perrachonand other Euris group companiesThe table below shows all compensation, directors’ fees and benefits paid to the Chairman and Chief Executive Officer in 2009 and <strong>2010</strong> by<strong>Casino</strong>, Guichard-Perrachon, its subsidiaries, its controlling companies and companies controlled by them.€ 2009 <strong>2010</strong>Compensation due for the year 2,298,333 (1) 2,216,111 (2)Valuation of stock options granted during the year Not applicable Not applicableValuation of share grants made during the year Not applicable Not applicableTOTAL 2,298,333 2,216,111 (3)(1) Compensation and/or directors’ fees paid in respect of 2009 by <strong>Casino</strong>, Guichard-Perrachon (€945,833), Rallye (€10,000), Finatis (€2,500) and Euris (€1,340,000).(2) Compensation and/or directors’ fees paid in respect of <strong>2010</strong> by <strong>Casino</strong>, Guichard-Perrachon (€1,245 278), Rallye (€10,000), Finatis (€833) and Euris (€960,000).(3) Compensation and/or directors’ fees paid in <strong>2010</strong> to Jean-Charles Naouri by <strong>Casino</strong>, Guichard-Perrachon, its controlling companies and companies controlled by them amounted to a totalof €1,918,333.No compensation or directors’ fees were paid to the Chief Executive Officer by subsidiaries of <strong>Casino</strong>, Guichard-Perrachon.Directors’ feesAt their meeting of 19 May 2009, the shareholders set the total amountof directors’ fees to be allocated to members of the Board and theCommittees of the Board at €650,000. These fees are allocated amongdirectors on the following basis, in line with the recommendationsmade by the Appointments and Compensation Committee.The total fee per director is set at €25,000, comprising a fixed fee(€8,500) and a variable fee (€16,500 maximum) based on theirattendance rate at Board meetings. Variable fees not paid to absentmembers are not reallocated.The total fee for the Chairman and for directors representing themajority shareholder is capped at €12,500.On his appointment, the Chairman of the Board of Directors waivedthe additional fee of €25,000 previously paid to the Chairman.An additional fee is paid to Antoine Guichard for the duties he performsas Honorary Chairman in recognition of his attendance at meetingsand his continuing input to the Company.Members of the Board Committees receive a fixed fee (€6,500) and avariable fee based on attendance (up to €13,500 for members of theAudit Committee and up to €8,745 for members of the Appointmentsand Compensation Committee). Variable fees not paid to absentmembers are not reallocated.Under the authority granted by the shareholders on 29 April <strong>2010</strong>, theBoard of Directors agreed to allocate a fee to the non-voting director onexactly the same basis, i.e. €25,000 comprising a fixed fee of €8,500and a variable fee of up to €16,500 based on attendance. This sum,paid on a prorata temporis basis, is deducted from the total amountof directors’ fees voted by the shareholders.Total directors’ fees paid in January 2011 in respect of <strong>2010</strong> tomembers of the Board of Directors, the non-voting director and theCommittees of the Board amounted to €462,259. The total amount ofdirectors’ fees paid in <strong>2010</strong> in respect of 2009 was €544,005, includingthe additional fee of €10,000 allocated to each independent memberof the Audit Committee in recognition of their specific assignmentto supervise and review the independent appraisal related to theproposed conversion of preferred non-voting shares into ordinaryshares. The decrease compared with 2009 also reflects the fact thattwo directors stood down during <strong>2010</strong>.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group177
5CORPORATE GOVERNANCEManagementCompensation and/or directors’ fees paid to the non-executive directorsTotal compensation and directors’ fees paid in 2009 and <strong>2010</strong> by the Company, its subsidiaries, companies that control it and companiescontrolled by them, to the non-executive directors and the non-voting director can be analysed as follows:€Directors’ fees and compensation paid2009 <strong>2010</strong>Directors Directors’ fees Other compensation (1) Directors’ fees Other compensation (1)Didier Carlier (2) 32,500 471,500 17,908 745,531Abilio Dos Santos Diniz 20,286 - 25,000 -Jean-Dominique Comolli (3) - - 31,800 -Pierre Féraud (4) 12,500 545,167 (5) 8,333 -Pierre Giacometti 3,065 - 51,217 -Henri Giscard d’Estaing 30,816 - 37,495 -Jean-Marie Grisard (6) 12,500 23,198 12,500 20,326Antoine Guichard 61,000 - 61,000 -Philippe Houzé 25,000 370,039 25,000 370,039Marc Ladreit de Lacharrière 13,214 - 11,250 -Didier Lévêque 7,193 533,901 12,500 636,786Gilles Pinoncély 60,245 - 64,267 -Gérald de Roquemaurel 35,531 - 40,245 -David de Rothschild 26,710 - 27,059 -Frédéric Saint-Geours 45,000 - 55,000 -Catherine Soubie (7) 27,745 769,071 27,745 712,864 (8)Rose-Marie Van Lerberghe (3) - - 23,186 -(1) Directors’ fees and/or compensation and benefi ts paid by <strong>Casino</strong>’s subsidiaries and/or companies that control <strong>Casino</strong> or companies controlled by them.(2) Representative of Euris, parent company of the Euris group, which in <strong>2010</strong> received a net total of €3,942,465 in strategic advisory fees from all companies it controls, including €350,000from <strong>Casino</strong>.(3) Elected as director on 19 May 2009.(4) Stood down on 27 August 2009.(5) Excluding €104,804 in retirement bonuses.(6) Jean-Marie Grisard is also the Legal Manager of Frégatinvest, which received net annual advisory fees of €130,000 in 2009 and <strong>2010</strong>.(7) Stood down on 6 July <strong>2010</strong>.(8) Excluding termination benefi ts relating to offi ces held within Rallye (€1,012,036).Directors’ fees paid in January 2011 in respect of <strong>2010</strong>DirectorsCommitteesFixed Variable Fixed VariableDidier Carlier 4,250 8,250 - -Jean-Dominique Comolli (1) 6,375 7,425 4,875 8,100Abilio Dos Santos Diniz 8,500 7,333 - -Pierre Giacometti (2) 8,500 12,833 1,625 1,687Henri Giscard d’Estaing 8,500 11,000 6,500 6,996Jean-Marie Grisard 4,250 8,250 - -Antoine Guichard 61,000 - - -Philippe Houzé 8,500 16,500 - -Marc Ladreit de Lacharrière 8,500 9,167 - -Didier Lévêque 4,250 8,250 - -Gilles Pinoncély 8,500 16,500 6,500 13,500Gérald de Roquemaurel (3) 8,500 16,500 11,917 17,182David de Rothschild 8,500 7,333 6,500 3,498Frédéric Saint-Geours 8,500 16,500 6,500 13,500Rose-Marie Van Lerberghe 8,500 14,667 6,500 8,745(1) Stood down on 3 September <strong>2010</strong>.(2) Director and member of the Audit Committee until 3 March <strong>2010</strong>, when appointed non-voting director.(3) Appointed member of the Audit Committee on 3 March <strong>2010</strong>.178 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEManagement5Executive Committee compensationThe Appointments and Compensation Committee is advised of thecompensation policy for members of the Executive Committee.This policy is designed to ensure a competitive compensationpositioning relative to general market practices and to be in line withsimilar French companies. It is also designed to encourage and rewardperformance both in terms of Group activity and results as well asindividual performance.Total compensation paid to Executive Committee members comprisesa fixed and a variable component.The variable component is contingent on the achievement of varioustargets:■■■quantitative Group targets, which are identical to those set for theChief Executive Officer;personal quantitative targets based on the operating units anddepartments for which the person is responsible (e.g. achievementof budget or strategic plan);personal qualitative targets based on a general appraisal mainlytaking account of managerial attitudes and behaviour.An annual “road map” sets out the applicable criteria, the weightingassigned to each criterion in the overall appraisal, and the targetsto be met.The variable component can be up to 50% of the fixed salary if targetsare reached and up to 100% if they are exceeded.In <strong>2010</strong>, total compensation and benefits paid by the Companyand its subsidiaries to Executive Committee members other thanthe Chairman and Chief Executive Officer amounted to €5,628,099,including €1,798,875 in performance-related bonuses for 2009 and€33,175 in benefits.Stock options and share grantsThe Chairman and Chief Executive Officer is not entitled to receiveand has never received stock options or share grants from <strong>Casino</strong>,Guichard-Perrachon, companies it controls or companies thatcontrol it.No stock options or share grants were awarded to other corporateofficers in <strong>2010</strong> by <strong>Casino</strong> or its subsidiaries.As employees, members of the Executive Committee may receivestock options and/or share grants each year, as part of a policy toretain key people and involve them in the Group’s development.Share grants are contingent on the achievement of a performancecondition specific to the company and to the grantee being employedby the Group on the vesting date. Stock options are contingent on theoptionee being employed by the Group on the exercise date.Options are granted with no discount to the share price and theexercise price is based on the average quoted prices during thetwenty trading days immediately prior to the grant date.In addition to the annual allocation, the company may also makeshare grants on an exceptional basis, especially to employees whohave made a significant contribution to strategic or highly complextransactions.In <strong>2010</strong>, members of the Executive Committee received thefollowing:■■37,242 share grants subject to a performance condition and acontinued employment condition;16,553 share grants made on an exceptional basis to five membersof the Executive Committee, subject only to a continued employmentcondition.In <strong>2010</strong>, a total of 40,982 stock options on new <strong>Casino</strong> shares wereexercised by Executive Committee members.Board of Directors and senior managementconflicts of interestThe Company has relations with all its subsidiaries in its day-to-daymanagement of the Group. It also signed a strategic advice andassistance agreement in 2003 with Euris, the ultimate holdingcompany whose majority shareholder and chairman is Jean-CharlesNaouri, under which it receives advice from the Rallye Group, <strong>Casino</strong>’smajority shareholder. Fees paid under this agreement amounted to€350,000 before tax. No benefits are granted under the provisionsof the agreement.Jean Charles Naouri, Didier Carlier, Jean Marie Grisard, Didier Lévêqueand Michel Savart, directors or permanent representatives of theRallye and Euris groups, are executives and/or members of the Boardof companies belonging to those groups and receive compensationand/or directors’ fees in that capacity. Philippe Houzé, Director, isChairman and Chief Executive Officer of <strong>Mo</strong>noprix, and Abilio DosSantos Diniz is Chairman of Grupo Pão de Açùcar.Apart from these relationships, there are no potential conflicts ofinterest between the directors’ and managers’ duties towards theCompany and their private interests.The responsibilities of the Audit Committee and the Appointmentsand Compensation Committee, both of which comprise a majority ofindependent directors, help to prevent conflicts of interest and ensurethat the majority shareholder does not abuse its position.The Statutory Auditors’ special report on regulated agreements signedbetween the Company and (i) the Chairman and Chief ExecutiveOfficer, (ii) a director, or (iii) a shareholder owning more than 10% ofthe Company’s voting rights, or in the case of a corporate shareholderthe company controlling that shareholder, and which were not enteredinto on arm’s length terms is presented on page 153 of this report.No loans or guarantees have been granted by the Company to anymembers of the Board of Directors.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group179
5CORPORATE GOVERNANCEAuditing of Financial Statements5.3. AUDITING OF FINANCIAL STATEMENTS5.3.1. STATUTORY AUDITORSStatutory AuditorsErnst & Young et AutresEngagement partners: Daniel Mary-Dauphin and Sylvain Lauria(since 2009).First appointed: 20 May 1978.Current term ends: At the close of the Annual General Meeting to beheld in 2016 to approve the financial statements for the year ending31 December 2015.Alternate auditorsAuditexAlternate to Ernst & Young et Autres.First appointed: 29 April <strong>2010</strong>.Current term ends: At the close of the Annual General Meeting to beheld in 2016 to approve the financial statements for the year ending31 December 2015.In line with the French Financial Security Act of 1 August 2003, theErnst & Young engagement partners were rotated for the first timein 2009.Deloitte & AssociésEngagement partners: Alain Descoins and Antoine de Riedmatten(since <strong>2010</strong>).First appointed: 29 April <strong>2010</strong>.Current term ends: At the close of the Annual General Meeting to beheld in 2016 to approve the financial statements for the year ending31 December 2015.BEASAlternate to Deloitte & Associés.First appointed: 29 April <strong>2010</strong>.Current term ends: At the close of the Annual General Meeting to beheld in 2016 to approve the financial statements for the year ending31 December 2015.5.3.2. STATUTORY AUDITORS’ FEESFinancial years ended 31 December <strong>2010</strong> and 2009.€Ernst & Young et Autres Deloitte & Associés Cabinet Didier Kling & AssociésAmount(excl. VAT) %Amount(excl. VAT) %Amount(excl. VAT) %<strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009 <strong>2010</strong> 2009Audit1. Statutoryand contractualaudit services• Issuer269,000 367,600 6% 8% 150,000 - 40% - - 285,800 - 23%• Fully-consolidated subsidiaries 4,011,853 4,078,810 90% 87% 202,331 - 54% - 427,000 922,200 100% 73%2. Other audit-related services• Issuer73,000 45,000 2% 1% 13,500 - 4% - - 24,000 - 2%• Fully-consolidated subsidiaries 53,500 121,975 1% 3% - - - - - 19,500 - 2%Sub-total 4,407,353 4,613,385 99% 99% 365,831 - 98% - 427,000 1,251,500 100% 99%Other services providedto fully-consolidatedsubsidiaries3. Legal and tax advice 2,994 21,942 0% 0% 7,515 - 2% - - - - -4. Other (specify if morethan 10% of audit fees) 47,500 47,500 1% 1% - - - - - 17,000 - 1%Sub-total 50,494 69,442 1% 1% 7,515 - 2% - - 17,000 - 1%TOTAL 4,457,847 4,682,827 100% 100% 373,346 - 100% - 427,000 1,268,500 100% 100%180 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEChairman’s Report55.4. CHAIRMAN’S REPORTIn accordance with Article L. 225-37 of the French CommercialCode (Code de commerce), the Chairman is required to report toshareholders annually on the Company’s corporate governancepractices as well as internal control and risk managementprocedures.The report, which is attached to the management report on <strong>Groupe</strong><strong>Casino</strong>’s operations for the year ended 31 December <strong>2010</strong>, has beenreviewed by the Appointments and Compensation Committee and theAudit Committee and approved by the Board of Directors. It was madeavailable to shareholders prior to the Annual General Meeting.As required by article L. 225-235 of the French Commercial Code(Code de commerce), the Statutory Auditors have reviewed andissued an opinion on the information contained in the report regardinginternal control over accounting and financial reporting as well as theinclusion of other required information.5.4.1. CORPORATE GOVERNANCECorporate governance codeIn line with the Company’s policy of implementing good governancepractices, the Board of Directors has adopted the AFEP-MEDEFcorporate governance code published in December 2008 as itsreference code, particularly for the purpose of preparing this report.The AFEP-MEDEF code can be found on the company’s websitehttp://www.groupe-casino.fr.Board of Directors1. Composition of the Board of DirectorsThe composition of the Board of Directors is presented onpage 156.2. Board practicesThe rules governing the functioning of the Board of Directors are setout in law, the Company’s by-laws, the Board of Directors’ Charterand the charters of the Board Committees.• Organisation and proceduresof the Board of DirectorsSince the Board of Directors’ meeting of 21 March 2005, thefunctions of Chairman of the Board and Chief Executive Officer havebeen combined. Jean-Charles Naouri has been Chairman and ChiefExecutive Officer since that date.In a highly competitive and fast-changing environment, this combinationof functions was designed to strengthen the link between strategicand management decisions, and to optimise and shorten decisionmakingchannels.The organisation and procedures of the Board of Directors aredescribed in the Board of Directors’ Charter adopted in December2003 and amended by the Board of Directors on 13 October 2006,7 December 2007, 27 August 2008 and 28 February 2011. It outlinesand clarifies the applicable provisions of the law and the Company’sby-laws. It also incorporates the corporate governance principles thatthe Board of Directors is responsible for implementing.The Board of Directors’ Charter describes the procedures, powers,role and duties of the Board and its committees the Audit Committeeand the Appointments and Compensation Committee.It also sets out the rules of conduct to be followed by directors,particularly with regard to the duty of confidentiality referred to in ArticleL. 465-1 of the French <strong>Mo</strong>netary and Financial Code (Code monétaireet financier) and Articles 621-1 et seq. of the General Regulationsof the Autorité des marchés financiers (AMF) on inside informationand insider trading, and the prohibition on dealing in the Company’sshares during the “closed period” of fifteen days prior to publicationof the Company’s annual and interim results.It specifies the requirement for directors to be registered on the listof insiders drawn up by the Company in connection with regulationsaimed at more effectively preventing insider trading, and details thedisclosure requirements for dealings in the Company’s shares bydirectors, corporate officers and by people with whom they haveclose personal ties.The Board of Directors’ Charter incorporates the principle of formaland regular assessments of the Board of Directors’ work andperformance, describes how Board meetings are to be conducted,and authorises directors to take part in meetings via videoconferenceor any telecommunications medium.• Role and duties of the Board of DirectorsIn accordance with Article L. 225-35 of the French CommercialCode (Code de commerce), the Board of Directors is responsiblefor defining the Company’s broad strategic objectives and ensuringtheir implementation. Except for those powers expressly vested in theshareholders in General Meeting, the Board of Directors considersand decides on all matters related to the Company s operations,subject to compliance with the corporate purpose.It also carries out any verifications or controls it deems appropriate.The Board of Directors reviews and approves the annual and interimfinancial statements of the Company and the Group, as well as themanagement reports on the operations and results of the Companyand its subsidiaries. It also approves budgets and forecasts, reviewsand approves the Chairman’s report, decides on the compensationto be paid to executive directors, allocates stock options and sharegrants, establishes employee share ownership plans, and reviews theCompany’s equal opportunity and equal pay policy annually.Powers of the Chief Executive OfficerUnder Article L. 225-56 of the French Commercial Code (Code decommerce), the Chief Executive Officer has full powers to act in allcircumstances in the name of the Company, within the limits of itscorporate purpose and except for those powers vested by law in theBoard of Directors or in the shareholders in a General Meeting. Herepresents the Company in its dealings with third parties.In line with the principles of good corporate governance, the Chairmanhas decided that certain management transactions must receive theBoard’s prior authorisation in view of the type of transaction and/or the amounts involved. The ceilings set ensure that the Board ofRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group181
5CORPORATE GOVERNANCEChairman’s ReportDirectors remains responsible for the most significant transactionsin type and amount, in line with the law and with good corporategovernance practices.The Chief Executive Officer must therefore obtain the Board’s priorauthorisation for the following:■■transactions that are likely to affect the strategy of the Company andits subsidiaries, their financial position or scope of business, such asthe signature or termination of industrial and commercial agreementslikely to materially influence the Group’s future development;transactions representing over two hundred million Euros(€200,000,000), including but not limited to:- investments in securities and immediate or deferred investmentsin any company or business venture,- sales of assets, rights or securities, in exchange for securities ora combination of securities and cash,- acquisitions of real property or real property rights,- purchases or sales of receivables, acquisitions or divestments ofgoodwill or other intangible assets,- issues of securities by directly or indirectly controlledcompanies,- granting or obtaining loans, borrowings, credit facilities or shorttermadvances,- agreements to settle legal disputes,- disposals of real property or real property rights,- full or partial divestments of equity interests,- granting security interests.This €200 million ceiling does not, however, apply to lease-purchasetransactions relating to buildings and/or equipment, for which themaximum aggregate authorised amount is set at €300 million peryear.These provisions apply to transactions carried out directly by theCompany and by all entities controlled directly or indirectly by theCompany.The Chairman and Chief Executive Officer has specific annualauthorisations as regards loans, credit lines and bond or other debtsecurity issues, for which the maximum limits were revised in <strong>2010</strong>to take account of the Group’s operating needs in a fast-changingenvironment.The Chairman and Chief Executive Officer may thus issue guaranteesor other security interests to third parties in the Company’s name,subject to a maximum annual limit of €600 million and a maximumlimit per commitment of €300 million.He may negotiate, implement, roll over, extend and renew loans,confirmed credit lines, short-term advances and all syndicated ornon-syndicated financing contracts, subject to a maximum annuallimit of €3 billion and a maximum limit per transaction of €500 million.He may also issue bonds or any other debt securities (other thancommercial paper), under the EMTN programme or otherwise, subjectto a ceiling of €3 billion, determine the terms and conditions of suchissues and carry out all related market transactions. He may issuecommercial paper up to a maximum amount of €1 billion a year.Chairman’s powersThe Chairman organises and leads the work of the Board of Directorsand reports thereon to the shareholders.He calls Board meetings and is responsible for drawing up theagenda and minutes. He also ensures that the Company’s corporategovernance structures function correctly and that the directors arecapable of fulfilling their duties.• Independence of directorsThe Appointments and Compensation Committee is tasked withmonitoring the relationships between directors and the Company orits subsidiaries to ensure that there is nothing which could interferewith their freedom or judgement or potentially lead to a conflict ofinterest.The Committee reviews the composition of the Board of Directors onan annual basis, and more specifically the independence of directorswith regard to the criteria set out in the AFEP-MEDEF corporategovernance code. It reports on its work to the Board of Directors.• Work performed by the Board of Directorsduring <strong>2010</strong>The Board of Directors met nine times in <strong>2010</strong>. The average attendancerate was 83.2% with each meeting lasting an average of one hourand forty-five minutes.Approval of the financial statements –Operations of the Company and its subsidiariesThe Board of Directors reviewed the financial statements for the yearended 31 December 2009 and for the first half of <strong>2010</strong>, as well as theGroup’s budgets and forecasts. It approved the reports and resolutionsto be put to the Annual General Meeting on 29 April <strong>2010</strong>. It wasinformed of the Group’s operations and results for the three monthsto 31 March <strong>2010</strong> and the nine months to 30 September <strong>2010</strong>.The Board of Directors authorised various financial transactions forwhich its approval is required under the Company’s governancepractices. These transactions included <strong>Casino</strong>’s disposal of its 80.1%interest in Cativen and the signing of a strategic partnership with theVenezuelan government, the proposed acquisition of the Carrefourgroup’s Thai operations making the Group joint leader in the Thaihypermarkets sector, and a revision to the interest rate paid underthe intergroup loan agreement with <strong>Mo</strong>noprix.The Board was informed of the terms and conditions of the followingagreements: (i) the joint venture agreement signed by Grupo Paõ deAçucar (GPA) for the acquisition of a majority interest in Casas Bahia,Brazil’s leading non-food retailer, (ii) the acquisition of the residualminority interests held by the founders of Cdiscount, (iii) the long-termpartnership in financial products and services between the Group’ssubsidiary Banque du <strong>Groupe</strong> <strong>Casino</strong> and the Crédit Mutuel CICgroup, under which the latter will ultimately acquire a 50% interestin Banque du Group <strong>Casino</strong>, and (iv) the bond exchange offers,which led to a significant improvement in the Group’s debt profileand average maturity.The Board received specific presentations on the group’s executivecompensation policy, the photovoltaic electricity production business,the online retailing business and the <strong>Casino</strong> foundation dedicatedto preventing the cultural and social exclusion of underprivileged orhospitalised children.Compensation – Allocation of stock options and share grantsThe Board of Directors set the Chairman and Chief Executive Officer’sfixed salary and performance-related compensation targets for <strong>2010</strong>,and determined his performance-related compensation for 2009. It setthe procedures for allocating fees payable to directors, the non-votingdirector and Board Committee members for <strong>2010</strong>.It also allocated stock options and share grants subject to performanceconditions and made exceptional share grants to senior executivesof the Group responsible for implementing and ensuring the successof strategic or highly complex transactions.182 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEChairman’s Report5Corporate governanceThe Board of Directors reviewed its position with regard to corporategovernance issues, including the composition and organisation ofthe Board and its Committees, as well as directors’ independence.As a result, it revised the composition of the Audit Committee anddecided to set in motion the process of electing a new independentdirector.The Board of Directors approved the Chairman’s Report on corporategovernance, internal control and risk management.In addition, it was advised of the work of the Board Committees, asdescribed below.• Committees of the BoardThe Board of Directors is currently assisted by two specialisedcommittees: the Audit Committee and the Appointments andCompensation Committee.The members of these committees, all of whom are directors, areappointed by the Board, which also designates their chairmen. TheChairman and Chief Executive Officer does not sit on and is notrepresented on either of the committees.The role, duties and procedures of each committee were defined bythe Board when they were first established and are incorporated inthe Board of Directors’ Charter.Audit CommitteeCompositionThe Audit Committee has three members, two of whom – FrédéricSaint-Geours (Chairman) and Gérald de Roquemaurel – areindependent. The third member is Gilles Pinoncély. Pierre Giacomettiand Jean-Dominique Comolli stood down on 3 March <strong>2010</strong> and3 September <strong>2010</strong> respectively.All members of the Audit Committee hold or have held corporateexecutive positions and therefore have the financial or accountingskills required by article L. 823-19 of the French Commercial Code(Code de commerce).Role and dutiesThe Audit Committee is responsible for assisting the Board ofDirectors in reviewing the annual and interim financial statements,and in dealing with transactions or events that could have a materialimpact on the position of the Company or its subsidiaries in terms ofcommitments and/or risks.As required by article L. 823-19 of the French Commercial Code(Code de commerce), it therefore deals with matters relating to thepreparation and control over accounting and financial information.It oversees the process of preparing financial information and monitorsthe effectiveness of internal control and risk management systems,auditing of the statutory and consolidated financial statements andthe independence of the Statutory Auditors.Its powers and duties are set out in a Charter, including thoseconcerning risk management and the identification and preventionof management errors.Work performed in <strong>2010</strong>The Audit Committee met six times in <strong>2010</strong> with an attendance rateof 87%.During its meetings the Committee reviewed the annual and interimaccounts closing processes and read the Statutory Auditors’ postauditreport, which included a discussion of the accounts and of allconsolidation operations. It reviewed off-balance sheet commitments,risks, and the accounting policies applied in relation to provisions, aswell as legal and accounting developments. It was informed of theStatutory Auditors’ audit plan and fees for <strong>2010</strong>.The Committee reviewed the various risk management documents, andthe Chairman’s report on internal control and risk management.It discussed the audit assignments carried out during <strong>2010</strong> with theinternal audit department, the conditions in which they took placeand the 2011 audit plan. It revised its Charter to include recentdevelopments in applicable standards and to align it with the reporton audit committees published by the Autorité des marchés financiers(AMF).It informed the Board of its observations and recommendations onthe work performed and the implementation of the internal auditors’recommendations. It reviewed the work of the Group’s internal controldepartment in <strong>2010</strong>.It also organised and supervised the process of re-appointing theStatutory Auditors through a call for tenders and presented itsconclusions and recommendations to the Board of Directors.The Committee also revised its Charter to include recent regulatorydevelopments, AFEP and MEDEF recommendations and the reportpublished by the Autorité des marchés financiers in <strong>2010</strong>. TheChairman of the Committee reported to the Board of Directors onthe work carried out at each Committee meeting.Appointments and Compensation CommitteeCompositionThe Committee has four members, three of whom – Rose-MarieVan Lerberghe (Chairman), Henri Giscard d’Estaing and Gérald deRoquemaurel – are independent. The other member is David deRothschild. Catherine Soubie stood down on 6 July <strong>2010</strong>.Role and dutiesThe Committee’s primary role is to assist the Board of Directors inreviewing candidates for appointment to senior management positionsand for election to the Board of Directors, setting and overseeingthe Group’s executive compensation, stock option and share grantpolicies, and establishing employee share ownership plans.Its powers and duties are set out in a Charter, including thoseconcerning organising the assessment process for the Board ofDirectors’ practices and performance, and ensuring compliance withthe Company’s corporate governance principles, Code of Conductand Board of Directors’ Charter.Work performed in <strong>2010</strong>The Committee met five times in <strong>2010</strong> with an attendance rate of82%.During the year, the Committee undertook its annual review ofBoard and Board Committee practices and compliance with thecorporate governance principles set out in the AFEP-MEDEF codeand the Board Charter. It presented recommendations to the Boardof Directors, particularly with regard to modifying the composition ofthe Committees.It examined each director’s relations with Group companies that couldcompromise his or her freedom of judgment or lead to a conflict ofinterest.The Committee organised the process of selecting a new independentdirector and presented its recommendation to the Board ofDirectors.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group183
5CORPORATE GOVERNANCEChairman’s ReportIt made proposals concerning the method of determining theChairman and Chief Executive Officer’s fixed and performance-relatedcompensation for <strong>2010</strong> and allocating directors’ fees to members ofthe Board of Directors and Board Committees.It reviewed the Chairman’s report on corporate governance and theinformation on corporate governance contained in the managementreport.The Committee gave its opinion on the proposal to allocate sharegrants and stock options to Group employees.It made recommendations on renewing the specific annualauthorisations given to the Chairman and Chief Executive Officer.The Chairman of the Committee reported to the Board of Directorson the work carried out at each Committee meeting.The Committee uses outside research and comparative surveys, mainlycarried out by specialist firms, to assist it in some of its duties.• Procedures for determining Executive Offi cers’compensation and directors’ feesThe Chairman and Chief Executive Officer receives a fixed salary plusa performance-related bonus set annually on the recommendation ofthe Appointments and Compensation Committee, supported whereappropriate by market surveys conducted by outside consultants.His performance-related bonus for <strong>2010</strong> was contingent on theachievement of quantitative targets for the Company concerningsales and consolidated trading profit as well as net debt figures,consistent with those set for members of the Executive Committee.The performance-related component can be up to 100% of his fixedsalary if targets are reached and up to 150% if they are exceeded.The Chairman and Chief Executive Officer has no entitlement tosupplementary pension benefits, termination benefits or non-competebenefits. He is a member of the mandatory group pension plans(ARCCO and AGIRC) and the death and disability plan covering allemployees within the company.The Chairman and Chief Executive Officer is not entitled to receivestock options or share grants from <strong>Casino</strong>, Guichard-Perrachon,companies it controls or companies that control it.The method of allocating the directors’ fees voted by shareholdersamong directors and members of the Board Committees wasdetermined by the Board of Directors on 3 December <strong>2010</strong> and wasunchanged from the previous year:■■■■■The total fee per director is set at €25,000, comprising a fixedfee of €8,500 and a variable fee based on their attendance rateat Board meetings, capped at €16,500. Variable fees not paid toabsent members are not reallocated.The individual fee for the Chairman and for directors representingthe majority shareholder is capped at €12,500. On his appointment,the Chairman of the Board of Directors waived the additional feeof €25,000 previously paid to the Chairman.An additional fee is paid to Antoine Guichard for the duties heperforms as Honorary Chairman in recognition of his attendanceat meetings and his continuing input to the Company.The non-voting director receives an identical fee to the otherdirectors, which is deducted from the total amount voted by theshareholders.Members of the Board Committees receive a fixed fee (€6,500) anda variable fee based on attendance (up to €13,500 for membersof the Audit Committee and up to €8,745 for members of theAppointments and Compensation Committee). Variable fees notpaid to absent members are not reallocated.• Information provided to the Board of DirectorsThe Chairman or Chief Executive Officer is responsible for providingall directors with the documents and information they need to fulfiltheir role and duties.Prior to each Board meeting, directors receive a set of documentscontaining the main information they require to prepare for the itemson the agenda.Senior Management provides the Board of Directors at least once aquarter with a status report on the business operations of the Companyand its main subsidiaries, including sales figures and results trends,as well as information on debt and credit lines and headcount datarelating to the Company and its main subsidiaries.The Board of Directors also reviews the Group’s off-balance sheetcommitments at least once every six months.The Chief Financial Officer and the Advisor to the Chairman who actsas Secretary to the Board attend all Board meetings. Other membersof the Executive Committee attend as and when necessary.• Assessment of the Board’s practicesand performanceIn accordance with the corporate governance code, the Board ofDirectors’ Charter provides for an annual debate on and regularassessment of the Board’s practices and performance, organisedand carried out by the Appointments and Compensation Committeewith the assistance of outside consultants if required.A new assessment will be conducted in the second half of 2011 bythe Appointments and Compensation Committee, either with theassistance of a specialised outside consultant or internally using aquestionnaire covering a set of issues selected in advance basedon market practices in the matter and adapted to <strong>Casino</strong>’s specificrequirements.The comments and observations made by the directors during thelast assessment revealed that the Board practices are fully satisfactorywith regard to business conduct and corporate governance principlesand that progress had been made since the previous assessment.Attendance at shareholders’ meetingsInformation on attendance at shareholders’ meeting is set out inarticles 25, 27 and 28 of the Company’s by-laws (see page 225).These articles will also be updated in an extraordinary resolution tobe put to the annual general meeting on 14 April 2011.Factors liable to have an influencein the event of a public offerInformation on the Company’s capital structure and significant director indirect interests in its share capital known by the Company byvirtue of articles L. 233-7 and L. 233-12 of the French CommercialCode (Code de commerce) is provided on pages 37 onwards.The by-laws contain no restrictions on voting rights or the transferof shares. There are no agreements known to the Company byvirtue of article L. 233-11 of the French Commercial Code (Code decommerce) that contain pre-emption rights with respect to the sale orpurchase of the Company’s shares. There are no known shareholders’agreements that could result in restrictions on the transfer of sharesand/or exercise of voting rights.The Company has not issued any securities conferring special controlrights. There are no employee share schemes where the voting rightsare not exercised directly by the employees.184 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEChairman’s Report5The rules governing the appointment and replacement of Boardmembers and amendment of the by-laws are described on pages 222onwards.The powers of the Board of Directors are described on pages 181,194 and 223. The Board’s powers to issue and buy back shares aredescribed on page 33 and page 30 respectively.Agreements to which the company is a party and which are alteredor terminate upon a change of control of the Company are describedon pages 28 (“<strong>Mo</strong>noprix”) and 40 (“Liquidity Risks”).There are no agreements between the Company and its directors oremployees providing for compensation if they resign because of atakeover bid, or are made redundant without valid reason, or if theiremployment ceases because of a takeover bid.5.4.2 INTERNAL CONTROL AND RISK MANAGEMENT<strong>Groupe</strong> <strong>Casino</strong>’s internal control and risk management systemis based on the risk management and internal control referenceframework published by the Autorité des marchés financiers (AMF),which is a French adaptation principally of the international frameworkpublished by the COSO (Committee of Sponsoring Organizations ofthe Treadway Commission).The work underlying this report involved interviews, analysis ofaudit reports and circulation of AMF and internal questionnaires.The format and content of the report is also based on the AMF’sreference framework and the report of its working group on auditcommittees.The report and the underlying work have been presented to the AuditCommittee for review and opinion, and submitted for approval to theBoard of Directors of <strong>Casino</strong>, Guichard-Perrachon in accordance withthe law of 3 July 2008.Scope of risk managementand internal controlIn accordance with the AMF reference framework, the scope of riskmanagement and internal control as described in this report coversthe parent company and its subsidiaries within the meaning of theFrench Commercial Code (Code de commerce). The AMF referenceframework requires the risk management and internal control systemto be adapted to the specific characteristics of each company and therelationships between the parent company and its subsidiaries.Parties involved in risk managementand internal controlSenior Management, through the Executive Committee, is responsiblefor defining and implementing the risk management and internalcontrol system to ensure that it is appropriate for the Company, itsoperations and organisation structure.The Board of Directors of the parent company, <strong>Casino</strong>, Guichard-Perrachon, is informed of the key features of the risk managementand internal control system by Senior Management. The Board hasset up an Audit Committee whose role is described below.The Board may also use its general powers to perform controls andverifications or take any other initiatives it deems appropriate.The Board’s Audit Committee is responsible for checking that<strong>Groupe</strong> <strong>Casino</strong> has the appropriate resources and structure to identifyand prevent risks, errors and irregularities in the management of theGroup’s business. As such it fulfils a clear, ongoing oversight role inrelation to the risk management and internal control system.It issues observations and recommendations on audit work performedwithin the Group, and carries out or commissions any risk managementor internal control analyses and reviews it deems appropriate.It oversees the financial reporting process and monitors theeffectiveness of internal control and risk management systems inthe Group.The Audit Committee’s Charter, which set out its duties andresponsibilities, was revised in <strong>2010</strong>.Group Internal Control is responsible for encouraging theimplementation of best internal control practices.Its duties include:■■■■■■■assisting Senior Management in identifying significant risks in theGroup’s business units;setting out the Group’s key internal controls in general proceduresand risk matrices;assisting the operating and support units in improving and optimisingthe control systems in place or to be deployed;setting out, managing and overseeing internal control and riskmanagement training programmes, including fraud prevention;analysing issues identified by the operating or support unitsinvolving deficiencies in internal control or significant developmentsin processes or information systems;overseeing the work underlying the Chairman’s report on internalcontrol and risk management;any other matters relating to internal control and risk managementas determined by Senior Management.Group Internal Control works with local internal control officers in thevarious business units, forming a network of about thirty dedicatedinternal control staff.The role of Group Internal Audit and the Business Unit InternalAudit departments in relation to internal control is described in thesection of this report on “Ongoing monitoring of internal control”.Lastly, employees, managers and operating heads are allresponsible for making the risk management and internal controlsystem work efficiently.Limitations of risk managementand internal controlAs stated in the AMF reference framework, no risk managementand internal control system can provide absolute assurance that thecompany’s objectives will be achieved. There are limitations inherent inany system resulting from numerous internal and external factors.General risk management principlesDef inition of risk managementWithin <strong>Groupe</strong> <strong>Casino</strong>, risk management encompasses a set ofresources, behaviours, procedures and actions that is adapted to theGroup’s specific characteristics and that enables Senior Managementto keep risks at acceptable level for the Company.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group185
5CORPORATE GOVERNANCEChairman’s ReportObjectives of risk managementThe key objectives of risk management are to:■■■■create and preserve the Company’s value, assets and reputation;secure decision-making and the Company’s processes to attainits objectives;promote consistency of the Company’s actions with its values;bring all employees together behind a shared vision of the mainrisks.Components of the risk management system• OrganisationThe risk management system is decentralised and overseen by theparent company’s Senior Management. The heads of each businessunit are therefore responsible for identifying, analysing and dealingwith the main risks to which they are exposed. They may ask GroupInternal Control and its network for support in identifying risks.The Group also has a Risk Prevention Committee, whose practicesand procedures were updated in <strong>2010</strong>. Permanent members of theCommittee include representatives from Group Human Resources,Insurance, Internal Control, Legal Affairs, Quality and Communications,as well as an adviser to the Chairman. Group Internal Audit attendsmeetings as an observer. Other people may be invited to attenddepending on the issues addressed.The Committee’s role is to steer the Company’s risk managementsystem and ensure a consistent overall approach to preventing risksthat could have a significant impact on the Company’s achievement ofits strategy or objectives or, more generally, on its long-term survival.It is supported by the business unit heads who are responsible fordefining the risk management policy and the control systems requiredfor its effective application.The Group also has a dedicated crisis management unit which includesrepresentatives of Senior Management and, on a need basis, anyother in-house or external capability that may be required.• Risk management processRisk identificationThe <strong>Casino</strong> Group is exposed to various types of risk, including marketrisk, operational risk and legal risk. These risks have been mappedand are described in the section of the annual report entitled “Riskfactors – Insurance”.Each business unit is responsible for identifying the specific risks towhich its operations are exposed. It is supported in this task by GroupInternal Control, which has been working on developing specific riskidentification tools during the year. These tools are sent to the businessunits heads, who are responsible for updating them regularly.Risk analysisRisks identified by each business unit are analysed and quantifiedunder the responsibility of the business unit head. The work of GroupInternal Control is underpinned by the risk identification tools and riskmapping. Its role and work are described in the section of this reporton “Organisation of the internal control system”.Identified risks are reviewed regularly during internal audit assignments.They are evaluated according to their impact, likelihood of occurrenceand strategic importance, as well as in light of the existing internalcontrol system. Tests are conducted to assess internal controls,evaluate the residual risk and issue recommendations on implementinga new or improving an existing internal control process.The work carried out by the Internal Audit department is describedin greater detail in the section of this report on “<strong>Mo</strong>nitoring of internalcontrol”.Risks likely to lead to crisis situations are assessed and prioritised atlocal level by the business unit heads.Risk managementThe control activities described below are aimed at reducing thoserisks identified by each business unit head and at group level whoseoccurrence could prevent the Group from achieving its objectives.In addition, the various risk identification and analysis toolsare monitored by the business units, which are responsible forimplementing plans to mitigate the risks. Group Internal Control maybe involved in implementing means of risk mitigation. For example, itruns a fraud risk awareness programme to help business unit headsset up an appropriate fraud prevention plan.Internal Audit ensures that internal controls are properly performedand identifies any residual risk. Recommendations made by InternalAudit are used to establish action plans designed to mitigate risks.Through its follow-up audit role, it also ensures that the risks identifiedduring its initial audit assignments are duly dealt with.Each business unit is responsible for organising a business continuityplan and setting up a process for reporting critical information andmanaging potentially harmful events.Local management may, if necessary, call on the Group crisismanagement unit for support.Group Insurance is responsible for insuring all insurable risks forsubsidiaries, where permitted by local legislation, and for taking outand managing the appropriate insurance policies on a centralisedbasis. It plays a cross-functional role in operational management ofinsurance and in risk prevention.It is directly responsible for taking out insurance policies coveringFrench subsidiaries and coordinates and oversees insuranceprogrammes taken out by the Group’s international subsidiaries.The Insurance department is also involved in monitoring claimsand receives information from business units about events anddevelopments likely to change the terms and conditions of existinginsurance policies.• Ongoing oversight of the risk management systemThe risk management system is monitored and reviewed regularlyby the business unit heads. Internal Audit takes part in the oversightprocess through its audit assignments with the aim of contributingto continuous improvements.General internal control principlesDef inition of internal control<strong>Groupe</strong> <strong>Casino</strong>’s internal control system, which is defined andimplemented under the responsibility of the parent company, isdesigned to help maintain control over its business operations, achieveits operations effectively and make efficient use of resources, whilsttaking appropriate account of the major risks that could prevent theCompany from achieving its objectives.Internal control objectives<strong>Mo</strong>re specifically, it aims to provide reasonable assuranceregarding:■■■■compliance with applicable laws and regulations;compliance with instructions and guidance issued by SeniorManagement;proper application of processes, particularly with regard tosafeguarding the Group’s assets;reliability of financial information.186 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEChairman’s Report5Internal control components• Internal control pre-requisitesObjective setting and communication<strong>Groupe</strong> <strong>Casino</strong> sets its strategic and financial objectives in a three-yearbusiness plan under the responsibility of the parent company’s SeniorManagement. The plan is fully reviewed and updated on an annualbasis. The first year of the plan constitutes the budget.The Strategy department is responsible for drawing up the plan, andin this role has the following tasks:■■■■■■co-ordinating the preparation of three-year business plans by thevarious Group business units and ensuring that they are consistentwith the Group’s strategy;drawing up the Group’s consolidated plan;verifying the Group’s broad financial targets, particularly in terms offinancial resource allocation and debt management;optimising the allocation of capital expenditure in line with the Group’sexpansion and profitability objectives, in particular by ensuring anoptimum, consistent capital-expenditure policy, selecting the mostprofitable projects, taking a detailed medium-term approach tocapital expenditure requirements and assessing the results;monitoring achievement of the plan, in association with the FinanceDepartment (mainly Financial Control) and updating it regularly onthe basis of actual results;working with the Executive Committee and the operating units andsupport functions to draw up related action plans and ensuring thatthe measures provided for are implemented.Rules of conduct and integrity<strong>Groupe</strong> <strong>Casino</strong> conveys values of ethics and integrity throughout theorganisation. These values are relayed through a set of managerialattitudes and behaviour, supported by ongoing training for allmanagement staff throughout <strong>2010</strong>.• OrganisationBecause of its broad range of business activities, the Group hasa decentralised structure to take better account of each businessunit’s specific features and to make the decision-making processmore effective.In France, the business unit heads are responsible for applying theGroup’s strategy, whilst in the International business units responsibilityfor implementation lies with the Country Managers overseen by theInternational Co-ordination department and the Development andHoldings department.Each business unit has its own support departments, which have areporting line to the corresponding Group department.Responsibilities and powersSegregation of dutiesEach business unit is responsible for organising its structure andfunctions in such a way as to ensure proper segregation of duties.Delegation of powers and responsibilitiesThe Group Legal and Human Resources departments manage andsupervise the process of delegating powers and responsibilities inaccordance with local law.Human resources policyThe Group’s human resources policy aims to ensure an appropriateallocation of resources within the Group through structured recruitmentand career management policies designed to help achieve theobjectives set by the parent company.The Group also has specific training policies in business management,personal development and the Group’s various business areas.The business units base their pay policies on an analysis of marketpractices and on the principle of internal fair treatment, in order tomotivate employees.Managerial practices are assessed each year during the annualappraisal process to ensure that they conform with the Group’s set ofmanagerial attitudes and behaviour. The results will partly determinethe amount of variable compensation received.Information systems<strong>Groupe</strong> <strong>Casino</strong> has developed a target model based mainly on twowell-known management software suites available on the market,one for administrative functions and one for commercial functions.The model also encompasses IT industry standards and governanceframeworks to ensure that the information systems are geared to theGroup’s current and future objectives. These references also serveas a basis to spread best practices, particularly in areas such asphysical and logical security, data backup and business continuity.They are taken into account when setting and monitoring objectivesand deadlines for each business unit, with a view to reducing risklevels.Operating procedures, content and communicationmethodsThe Group has internal control procedures for its significantbusiness processes. They describe the objectives of the process,the departments and activities concerned and the guidelines tofollow. These procedures are published on the intranet sites andother documentary databases of the various Group business unitsor circulated within the company.• In-house dissemination of informationAppropriateness and reliability of informationManagement is responsible for deciding what information should becommunicated to the various parties involved and for assessing itsappropriateness. It must provide employees with all the informationthey need to fulfil their duties, Senior Management with the informationit needs for decision-making and other entities with any informationlikely to have an impact on their activities.The Financial Control teams of each business unit use IFRS accountinginformation in their standard monthly management reports. GroupFinancial Control consolidates the report to identify any potential errorsand any variances against forecast and prior year data.Dissemination of informationTimeframe for providing informationThe timeframe for providing information is designed to give the partiesinvolved sufficient time to react appropriately. This is particularly trueof events likely to lead to a crisis at Group level, for which there is aspecific alert procedure.Communication methodsThe Group’s information systems, intranet sites, databases and othercommunication media are not only used to communicate informationbut also to centralise and circulate procedures applicable to variousactivities.In cases likely to lead to crisis at Group level, events are reportedaccording to a specific procedure. A reporting tool is also usedby a number of business units for prompt reporting to SeniorManagement.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group187
5CORPORATE GOVERNANCEChairman’s ReportConfidentialityAll Group employees are bound by a duty of confidentiality coveringany information they obtain in the course of their employment.Employees likely to obtain inside information during the course oftheir employment are identified and registered on an insider list, inaccordance with the AMF’s General Regulations.• Risk management systemThe risk management system is described in the section on generalrisk management principles.• Control activitiesCompliance with laws and regulationsThe control activities described below aim to mitigate the legal risksdescribed in the section of the annual report entitled “Risk factors– Insurance”.OrganisationThe Group Legal department’s role is to ensure that the Group’soperations comply with laws and regulations. It reports monthly onall major pending legal matters and holds regular meetings designedto spread good practices.All consolidated companies have a legal department responsible forensuring that the company complies with all applicable laws andregulations under the responsibility of the Group Legal Counsel.Tax matters are dealt with by a dedicated department reporting tothe Group’s Chief Financial Officer.Legal intelligenceLegal intelligence is the responsibility of each business unit’s legalteam, supported where necessary by external law firms.The legal teams have access to databases and specialist reviews tokeep them abreast of developments on a daily basis.The Human Resources and Legal departments are also involved inlegal intelligence with regard to labour law.Transcribing legislation into company regulationsThe legal team is responsible for transcribing laws and regulationsapplicable to the various business units, as well as any amendments.It prepares and circulates opinions, standard procedures or memoson the Group’s legal and regulatory obligations.Staff information and training on relevant regulationsDocuments drawn up by the legal team are sent to the heads ofthe operating units to ensure that they comply with all laws andregulations.The Group Legal department is also involved in prevention and advicecampaigns in all areas of the law. It seeks to raise the awarenessof the heads of the Group’s operating units and support functionsconcerning risks that may arise due to the conduct of Groupcompanies and employees. It circulates procedures and providestraining to all employees.Control activities to ensure that operationscomply with regulationsEach Legal department is responsible for ensuring that its company’ssubsidiaries comply with applicable laws and regulations.Compliance control is the responsibility of each company’smanagement team or its delegated representatives. These aspectsof compliance are also controlled during internal audits of operations.Disputes and litigation are overseen by each Legal department,supported if necessary by external lawyers and the Group Legaldepartment.Compliance with Senior Management instructionsand guidanceCirculating Senior Management instructions and guidanceAs described earlier, the Group’s objectives are set by SeniorManagement and shared with the business unit heads. The Strategydepartment is responsible for checking that the plan is alwaysconsistent with Senior Management’s objectives. Each business unitthen drills down its own objectives to sub-unit level. For internationalsubsidiaries, the process involves the International Co-ordinationdepartment, which is responsible for ensuring consistency betweenthe objectives and their various projects.<strong>Mo</strong>nitoring compliance with instructions and guidanceA number of key performance indicators are used to monitorcompliance with Senior Management instructions and guidance, andto measure any variances against its objectives. The frequency ofindicator reporting depends on the type of information. The financialreporting systems are also used to monitor performance on a businessunit and consolidated basis.Senior Management receives a standard monthly management reportdrawn up by each business unit, summarising its key performanceand management indicators and including a year-to-date incomestatement, balance sheet and cash flow statement. It also containscomments on achievement of objectives and a report on the mainactions in progress.The information contained in the monthly report is formally reviewedby Senior Management and the business unit’s management toprovide appropriate oversight. In addition, the Group FinancialControl department reports regularly to Senior Management on itsanalysis work.Senior Management also receives a monthly progress report on theGroup’s various projects. The report is prepared in a standardisedformat by the project managers in conjunction with the Strategydepartment.A unit dedicated to optimising and monitoring working capital isresponsible for setting improvement targets for each Group entity,supporting them in implementing action plans, spreading best practicesand regularly tracking monthly actuals and half-yearly forecasts.All reported data aims to give Senior Management the informationit needs to monitor achievement of its annual objectives and toimplement remedial plans where necessary.Annual forecasts are reviewed twice a year to factor in market trendsand revise the full-year targets if necessary. These revisions aresubmitted to Senior Management for approval.The Investment Committee is responsible for approving and overseeingthe Group’s investment projects and their compliance with allocatedbudgets. The Committee sends a monthly report on year-to-dateinvestments and month-end forecasts to Senior Management.Effectiveness of internal processes particularlywith regard to safeguarding assetsThe Control activities described below aim to mitigate the operationalrisks described in the section of the annual report entitled “Riskfactors – Insurance”.188 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEChairman’s Report5Processes aiming to protect property and peopleA permanent control process aims to protect property and people. Itis the responsibility of several different departments in each businessunit, and particularly the Technical and Operations departments.Where necessary, they are supported by outside service providersin the areas concerned.Fixed asset managementThe Group’s new construction projects are based on specificationsdrawn up in association with experts. They comply with all applicableregulations and are designed to meet the functional and operationalobjectives of the building. The entire construction process is overseenby a project manager, who ensures that contractual conditions andthe projected budget are met.The Group’s property portfolio is monitored technically andadministratively. Regular maintenance operations are carried out tokeep the properties in an optimal state of repair for their purpose.Business units in charge of a property portfolio may call on the Group’sdedicated subsidiaries if required.Other fixed assets (equipment, fixtures and fittings) are monitored on atechnical level to ensure their correct use and on an accounting levelto ensure the reliability of the basis for calculating various taxes.Banner protectionThe commercial leases signed by business units are drawn up inaccordance with the Group’s requirements to make sure that they haveadequate protection against the risk of eviction. They are monitoredby the teams in charge of property management, whose objective isto renew them on expiry.As a large number of the Group’s stores are run through affiliate andfranchise networks, the relevant contracts are monitored carefullyto ensure that all affiliates and franchisees comply fully with theircontractual obligations.Intellectual property protectionAll trademarks used by <strong>Groupe</strong> <strong>Casino</strong> are checked for availabilityand then registered with the appropriate authorities in France andall countries where the Group operates or is likely to operate in thefuture. Each subsidiary monitors its own trademarks to make surethat the requisite registrations are kept up to date.The Group uses outside service providers to make sure that noidentical or similar trademarks are registered by other parties and totake appropriate action in the event of infringement.Image protectionCorporate advertising is the responsibility of Group Communications.Business units with their own communications department work underthe authority and responsibility of Group Communications where<strong>Casino</strong>’s image may be affected.Senior Management systematically approves information publishedby Group Communications prior to release, including in the eventof crisis.Intelligence and monitoring processes aim to give the Group themeans to act and react appropriately to published information, inconjunction with the support departments concerned.Merchandise managementThe purchasing strategy, in terms of both assortment and suppliers,is based on market research and reflects the business unit’s mainstrategic goals. Action plans are drawn up on the basis of internal orexternal research to ensure that the product offering always meetsmarket expectations and banner positioning.Controls are regularly carried out to minimise risks relating todependency on suppliers.Lastly, performance indicators are tracked in order to monitor theeffectiveness of the Group’s purchasing processes.The supply chain and logistics teams of each business unit areresponsible for meeting the needs of the Group’s various bannersand for avoiding stock-outs in the stores.The Group Quality Control department sets out the quality policyfor <strong>Casino</strong>’s private label and similar products. If requested, it willdetermine and/or circulate good product quality and safety practicesfor other business units in order to involve all parties in the Group’squality approach.It draws up and implements quality control and monitoring proceduresfor merchandise and suppliers of <strong>Casino</strong> private label and similarproducts, budget products and direct imports.Quality audits are carried out at all manufacturing plants of suppliersthat manufacture <strong>Casino</strong> private label products. In addition, qualityand conformity controls are performed on food and non-food productsby outside service providers.Group business units take measures to safeguard inventories. Thesemeasures include ensuring the security of warehouses, equipment andmerchandise, goods reception and shipping processes, as well asmonitoring standards relating to hazardous or regulated products.Stock-takes are performed regularly, particularly as part of the accountsclosing process. They are designed to monitor a performance indicatorand detect any anomalies in goods flows.Financial asset management and financial flowsThe control activities described below aim to mitigate the marketrisks described in the section of the annual report entitled “Riskfactors – Insurance”.Financial transactions are governed by procedures designed to ensurethe security of cash receipts. There is a system of delegated signatureauthorities for cash payments covering the Group’s business units.Cash receipts and payments are controlled through reconciliationswith bank and accounting data.Financial asset management and control over financing and financialrisk management policies are the responsibility of Group CorporateFinance supported by the subsidiaries’ local Finance departments.Major operations are monitored individually, primarily on the basisof country risk.Group Corporate Finance has produced a guide to good financing,investment and hedging practices, which is circulated to all localFinance departments. The guide sets out financing methods,preferred banking partners, appropriate hedging products andrequired authorisation levels. The Group Corporate Finance Directoris responsible for updating the guide, mainly to take account ofchanges in the Group’s banking partners, which are selected fortheir first-class ratings.Medium and long-term financing transactions and various riskmanagement transactions such as interest rate and currency hedgingare covered by a set of procedures based on prudent, pro-activeprinciples.The Treasury Committee meets weekly to monitor risks, positions andcash forecasts for the Group’s French units, under the supervision ofSenior Management. Treasury risks and positions for the internationalunits are also monitored formally on a weekly basis.Business units conducting banking or insurance businesses areresponsible for ensuring that they comply with the appropriatelegislation.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group189
5CORPORATE GOVERNANCEChairman’s Report• Ongoing monitoring of internal control<strong>Mo</strong>nitoring of internal control is carried out at several levels under thesupervision of Senior Management. Senior Management is informedregularly of any deficiencies in the internal control system and itsappropriateness for the Group’s business operations, and takes anynecessary remedial action.<strong>Mo</strong>nitoring by ManagementManagement plays an ongoing role in monitoring the effectivenessof internal control procedures. It is responsible for implementingremedial action plans and reporting any serious deficiencies to SeniorManagement.Assessment by Internal AuditGroup Internal Audit and the business unit internal audit departmentsregularly review the effectiveness of the internal control systemthrough their internal control assessment work. Group Internal Audit isresponsible for assisting Senior Management and the various Frenchand international business units in exercising their responsibilities. Italso provides information or responses to all requests made by theAudit Committee of parent company <strong>Casino</strong>, Guichard-Perrachon.The subsidiaries’ internal audit teams report to their SeniorManagement or Administration and Finance department, but alsohave a functional reporting line to Group Internal Audit and GroupInternal Control. Group Internal Audit therefore has a central internalaudit team supported through the functional reporting line by localinternal audit teams in France and abroad, comprising a total of almostone hundred and ten people.Internal audit assignments conducted by the central team are setout in an annual audit plan prepared by Group Internal Audit basedon the Group’s risk map, the principle of audit cycles and any majorissues identified by Senior Management. Business unit internal auditdepartments draw up their own annual audit plans, which are approvedby their senior management and, where applicable, reviewed by theirown Audit Committee.The Group Internal Audit charter, approved by the Audit Committee ofparent company <strong>Casino</strong>, Guichard-Perrachon, describes the Group’sinternal audit function and how it operates. It was updated in <strong>2010</strong> totake account of the various changes in professional standards, lawsand regulations since the previous update. It is supplemented by formalguidelines for conducting audit assignments, which are based on theprofessional standards of the Institute of Internal Auditors (IIA).All Internal Audit reports are sent to Group Senior Management and theAudit Committee of parent company <strong>Casino</strong>, Guichard-Perrachon, inaccordance with the provisions set out in the Internal Audit charter.<strong>Mo</strong>nitoring by external auditorsThe Statutory Auditors are required to obtain an understanding of theorganisation and operation of the Group’s internal control procedures,to give their opinion on the description of the internal control andrisk management system for the financial reporting process, andto certify that other information required by article L. 225-37 of theFrench Commercial Code (Code de commerce) has been provided.This Chairman’s report on internal control and risk management hastherefore been reviewed by the Statutory Auditors.In addition, the Statutory Auditors are required to have regulardiscussions with Group Internal Audit and Control.Internal control intelligenceGroup Internal Audit and Control is responsible for keeping abreast ofbest internal control practices developed by <strong>Groupe</strong> <strong>Casino</strong> businessunits and best practices in the marketplace.Internal control over the financial reportingprocessInternal control over the financial reporting process aims to providereasonable assurance regarding:■■■■■■compliance of published accounting and financial information withthe applicable regulations;compliance with Senior Management instructions and guidanceon financial reporting;reliability of information circulated and used internally for managementor control purposes, where it is used in the preparation of publishedaccounting and financial information;reliability of published financial statements and other publishedinformation;safeguard of assets;prevention and detection of fraud and accounting and financialirregularities.The scope of internal control over the financial reporting processdescribed below covers the parent Company and all companiesincluded in its consolidated financial statements.<strong>Mo</strong>nitoring the f inancial reporting processAspects relating to the management of accounting and financial humanresources and the roles of Senior Management and the Board ofDirectors in monitoring and overseeing the financial reporting processare described in sections 5.3.2 and 2 of the annual report.• General organisationEach business unit has its own accounting and finance department toensure that local requirements and obligations are properly handled.Some business units may outsource these activities to sharedsupport functions. Each business unit is responsible for organisingits accounting and finance function in accordance with the principleof segregation of duties.Group Accounting, Financial Control and Corporate Finance monitorand oversee the local departments. They also consolidate datareported by the business units and produce the accounting andfinancial information published by <strong>Groupe</strong> <strong>Casino</strong>.The Audit Committee reviews the annual and interim accounts inorder to give an opinion to the Board of Directors on the financialstatements to be published. It also reviews the conclusions of theStatutory Auditors on their work.For this purpose, it obtains information on and monitors the processfor preparing the related accounting and financial information,ensuring that:■■■appropriate control procedures have been applied, through itsreview of internal audit work;the accounts closing process has been properly carried out;the main accounting options chosen are appropriate.• Application and control of accounting policiesThe system aims to ensure that local accounting standards usedcomply with regulations and that they are available to everyoneinvolved in the financial reporting process.As part of the consolidation process, each business unit sends itsIFRS-compliant accounts to Group Accounting and Group FinancialControl, including an income statement, balance sheet, cashflow statement, net cash statement and various key performanceindicators.190 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEChairman’s Report5Group Accounting and Group Financial Control have producedand circulated a Financial Reporting Guide designed to ensure thatinformation reported is reliable and consistent throughout the Group.This guide describes Group accounting policies, consolidationprinciples, and consolidation adjustments and entries, as well asmanagement accounting principles and the accounting treatmentof complex transactions. All users of the Group’s financial reportingsystem have received a copy of the guide.In addition, a compliance watchdog unit has been set up to assessand anticipate changes in accounting regulations that may impactthe Group’s accounting standards, particularly IFRSs. Any regulatorydevelopments that have an impact on the Group’s accountingprocedures are explained in memos. Similar arrangements are in placefor tax matters. Each business unit, together with the Group Taxationdepartment for French units, monitors tax regulations to identify anydevelopments that could affect the Group’s taxable results. All relevantinformation is sent to employees responsible for their application.• ToolsThe Group’s information systems are described in section 5.3.2 ofthis report.Each business unit has a team responsible for ensuring that localinformation systems used for financial reporting conform to localregulations and accounting standards.IFRS-compliant accounting and financial data, adjusted to complywith Group standards, are reported by the business units through asingle consolidation and financial reporting software package. TheGroup’s reporting system has a dedicated administration unit.Financial reporting process• Identifi cation of risks affectingthe fi nancial reporting processThe Management of each business unit is responsible for identifyingrisks affecting the financial reporting process. Duties in the upstreamaccounting production process are segregated to prevent fraud andaccounting and financial regularities. Control activities appropriate tothe level of risk are implemented.In early 2011, a weakness in the process for recording benefitsnegotiated with suppliers was identified in a subsidiary that accountsfor less than 1.5% of Group revenue.The Group has already implemented an action plan to remedy theinitial irregularities identified and the accounting consequences wererecognised in the <strong>2010</strong> financial statements.Additional investigations are currently ongoing to identify the actionsrequired to improve the subsidiary’s internal control system.• Control activities aimed at ensuringthe reliability of published accountingand fi nancial informationPreparation and consolidation of financial and accountinginformationThe accounting production processes are organised with a view toproviding high quality, reliable published accounting and financialinformation. Against a background of shorter deadlines, the accountsare now closed on an intermediate basis to preserve informationreliability.<strong>Mo</strong>st consolidation adjustments are made by the business units.Group Accounting and Group Financial Control arrange training for thebusiness units in how to use the reporting system and the FinancialReporting Guide, to guarantee high quality data and reliable financialand accounting information.The system checks data consistency through automatic controls andthrough double checking of both local and consolidated data.Group Accounting monitors and checks changes in percentageownership of subsidiaries and associates. It is responsible for applyingthe appropriate consolidation treatment (scope of consolidation,change of consolidation method, etc.).As required by law, <strong>Casino</strong>, Guichard-Perrachon has two StatutoryAuditors, appointed in <strong>2010</strong>. Their network of local audit firms may alsobe involved in auditing accounting information, including consolidationadjustments, produced by various Group subsidiaries. Their dutiesinclude verifying that the annual financial statements are prepared inaccordance with generally accepted accounting principles and givea true and fair view of the Group’s results of operations for the yearand its financial position and net assets at the year-end.The Group Accounting department acts as the interface withthe external auditors of the Group’s various entities. The Group’sStatutory Auditors are appointed through a competitive tenderprocedure arranged and overseen by the Audit Committee in linewith the recommendations made in the AFEP-MEDEF corporategovernance code.Management of external financial informationThe Investor Relations department is in charge of communicatingfinancial information to the financial community (analysts, investors,etc.).Financial information is validated by the Financial Control departmentprior to release.The Board of Directors is also presented with information concerningthe publication of results or acquisitions and mergers, and may makecomments and proposals. Financial news releases are, in addition,submitted to the Statutory Auditors for comment prior to issue.Financial information is disclosed to the markets through the followingcommunication channels:■■■■■■■media releases;conference calls for quarterly releases of sales figures;annual and interim results presentations;presentations to financial analysts and investors, including roadshows organised in France and abroad;Annual General Meetings;annual reports, business reviews and sustainable developmentreports;the Group’s corporate website.Group Investor Relations is also involved in monitoring financialinformation drawn up by listed majority-controlled subsidiaries andensures consistency between the various communication mediaused by the Group.ConclusionThe <strong>Casino</strong> Group takes a continuous progress approach to its riskmanagement and internal control system to promote the systematicspread of best internal control practices.The Group’s objective is to pursue and extend the implementationof adequate processes to further enrich the existing systems. Thediversity of the Group’s business operations and geographical scopedemands ongoing monitoring of risk management and internal controlprocesses to encourage even greater standardisation.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group191
5CORPORATE GOVERNANCEStatutory Auditors’ Report5.5. STATUTORY AUDITORS’ REPORTprepared in accordance with article L. 225-235 of the French CommercialCode (Code de commerce), on the report prepared by the Chairmanof the Board of DirectorsThis is a free translation into English of a report issued in the French language and is provided solely for the convenience of English-speakingreaders. This report should be read in conjunction with and construed in accordance with French law and professional auditing standardsapplicable in France.In our capacity as Statutory Auditors of <strong>Casino</strong>, Guichard-Perrachonand in accordance with article L. 225-235 of the French CommercialCode (Code de commerce), we hereby report on the report preparedby the Chairman of your company in accordance with article L. 225-37of the French Commercial Code (Code de commerce) for the yearended 31 December <strong>2010</strong>.It is the Chairman’s responsibility to prepare and submit for the Boardof Directors’ approval a report on internal control and risk managementprocedures implemented by the company and to provide the otherinformation required by article L. 225-37 of the French CommercialCode (Code de commerce) relating to matters such as corporategovernance.Our role is to:■■report on the information contained in the Chairman’s report inrespect of the internal control and risk management proceduresrelating to the preparation and processing of the accounting andfinancial information; andconfirm that the report also includes the other information requiredby article L. 225-37 of the French Commercial Code (Code decommerce). It should be noted that our role is not to verify thefairness of this other information.We conducted our work in accordance with professional standardsapplicable in France.Information on internal control and riskmanagement procedures relating to thepreparation and processing of accountingand financial informationThe professional standards require that we perform the necessaryprocedures to assess the fairness of the information provided inthe chairman’s report in respect of the internal control and riskmanagement procedures relating to the preparation and processingof the accounting and financial information. These procedures consistmainly in:■■■obtaining an understanding of the internal control and riskmanagement procedures relating to the preparation and processingof the accounting and financial information on which the informationpresented in the chairman’s report is based and of the existingdocumentation;obtaining an understanding of the work involved in the preparationof this information and of the existing documentation;determining if any material weaknesses in the internal controlprocedures relating to the preparation and processing of theaccounting and financial information that we may have noted inthe course of our work are properly disclosed in the Chairman’sreport.On the basis of our work, we have nothing to report on the informationin respect of the company's internal control procedures relatingto the preparation and processing of the accounting and financialinformation contained in the report prepared by the Chairman of theBoard of Directors in accordance with article L. 225-37 of the FrenchCommercial Code (Code de Commerce).Other informationWe confirm that the report prepared by the Chairman of the Boardof Directors also contains the other information required by articleL. 225-37 of the French Commercial Code (Code de commerce).Neuilly-sur-Seine and Lyon, 11 March 2011The Statutory AuditorsDeloitte & AssociésErnst & Young et AutresAntoine de Riedmatten Alain Descoins Sylvain Lauria Daniel Mary-Dauphin192 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEAppendix: Board of Directors’ Charter5APPENDIX: BOARD OF DIRECTORS’ CHARTERThe Board of Directors has grouped together and, where appropriate,clarified and supplemented, the provisions governing its functioning inaccordance with the applicable laws and regulations and the Company’sArticles of Association.This Charter describes the Board’s organisation structure and modusoperandi, the powers and duties of the Board and the Board Committees,and the code of conduct applicable to the Board’s members.For this purpose the Board has drawn up a Board of Directors’ Charterwhich incorporates all of the Company’s corporate governance principlesand facilitates their implementation.1. ORGANISATION AND PROCEDURES OF THE BOARD OF DIRECTORSArticle 1 - Election of directorsDirectors are elected by the shareholders for a term of three years and areeligible to stand for re-election.Candidates for nomination are first reviewed by the Appointments andCompensation Committee as described in the sections below entitled“Committees of the Board – General provisions” and “Appointments andCompensation Committee”.Directors are selected for the contribution they can make to the Board’swork through their expertise, diversity of experience and backgrounds, andcommitment to the <strong>Casino</strong> Group’s future development.If one or more seats on the Board fall vacant between two General Meetingsdue to the death or resignation of directors, the Board of Directors mayappoint replacement directors. Any such appointments must be ratified byshareholders at the next General Meeting. A director appointed to replacean outgoing director stays in office for the remainder of his predecessor’sterm.Directors or permanent representatives of corporate directors who reachthe age of seventy (70) while in office are required to stand down at theend of their term.This age limit does not apply to directors who were previously members ofthe Company’s Management Board.Notwithstanding the foregoing, a person over the age limit may be electedor re-elected for a single three-year term.In any event, the number of directors or permanent representatives ofcorporate directors over the age of seventy (70) may not exceed onequarter of the total number of directors in office. Should this proportion beexceeded, the oldest director or permanent representative shall stand downat the Annual General Meeting held to approve the financial statements forthe year in which the proportion was exceeded.The Board of Directors is responsible for ensuring that it has sufficientindependent directors to comply with the recommendations made in theAFEP-MEDEF Corporate Governance Code.Article 2 - Board meetings and decisionsof the BoardThe Board of Directors meets as often as necessary in the interests of theCompany.Meetings are called by the Chairman or in the Chairman’s name by anyperson designated by him. If the Board has not met for a period of overtwo months, a group of at least one third of the Directors may ask theChairman to call a meeting to discuss a particular agenda, as may the ChiefExecutive Officer.Meetings are held at the venue specified in the notice of meeting.Directors may give proxy to another director to represent them at Boardmeetings, provided that they clearly state their position concerning all thematters to be put to the vote. Directors may only hold a proxy from one otherdirector. However, a Director taking part in a meeting by videoconferenceor telecommunications under the conditions set out below may not act asproxy for another Director.These provisions also apply to the permanent representatives of corporatedirectors.A quorum of at least half the directors is required for the meeting to transactbusiness. Decisions are taken by majority vote of the directors present orrepresented by proxy. In the event of a split ballot, the Chairman of themeeting has the casting vote.As permitted by law, the Chairman of the Board may occasionallypermit Directors to participate in a meeting by videoconference ortelecommunications, if so requested for valid reasons.The videoconference or telecommunications link used must be technicallycapable of transmitting at the very least the voice of the person or personsconcerned and allowing them to be properly identified and participateeffectively in the meeting through a continuous and simultaneous broadcast.It must also be able to guarantee confidentiality of the proceedings.The videoconference link must simultaneously transmit both image and voiceand enable the person or persons attending the meeting by such means andthose persons physically present at the meeting to recognise each other.Telecommunications means the use of a telephone conference call systemwhich allows those persons physically present at the meeting and theperson attending by telephone to recognise, beyond any doubt, the voiceof each participant.In case of doubt or poor reception, the Chairman of the meeting maydecide to continue the meeting and exclude those persons attending byvideoconference or telecommunications for the purpose of determining thequorum and majority, provided that the quorum conditions remain fulfilled.The Chairman may also decide to suspend the director’s attendance atthe meeting if a technical malfunction means that the videoconference ortelecommunications link can no longer ensure total confidentiality of theproceedings.When permitting the use of videoconference or telecommunications, theChairman of the Board must first ensure that all members invited to attendby one of these means have the equipment required to take part effectivelyin accordance with the requisite conditions.The minutes of the meeting shall indicate the names of those directorsattending a meeting by videoconference or telecommunications and mentionany technical disruption or incidents which occurred during the meeting.Directors taking part in Board meetings by videoconference ortelecommunications are deemed to be present for the purposes of calculatingthe quorum and majority, except for the following matters:■■■appointment and compensation of the Chairman of the Board, the ChiefExecutive Officer or the Chief Operating Officers;removal of the Chief Executive Officer or the Chief Operating Officers;approval of the annual and interim financial statements of the Companyand the Group, together with the accompanying reports.Furthermore, the Chairman may permit a director to take part in meetingsvia any other telecommunication medium.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group193
5CORPORATE GOVERNANCEAppendix: Board of Directors’ CharterIn this case, however, the director concerned shall not be deemed presentfor the purpose of calculating the quorum and majority.The Board of Directors may also permit persons other than the directors toattend its meetings, in a consultative capacity only.An attendance register is drawn up and signed by those directors attendinga Board meeting.Directors attending a meeting by videoconference or telecommunicationsare certified as present on the attendance register by the Chairman.Article 3 - Minutes of Board meetingsBoard resolutions are recorded in minutes signed by the Chairman of themeeting and at least one of the directors present. Minutes are approved at thenext Board meeting and a draft copy is sent to all directors in advance.The minutes shall indicate whether or not a videoconference ortelecommunications link was used, list those directors who participated bythose means, and mention any technical incidents which occurred duringthe meeting.Copies or extracts of the minutes may be validly certified by the Chairman ofthe Board, the Chief Executive Officer, a Chief Operating Officer, the directortemporarily acting as Chairman, or a duly empowered representative.Article 4 - Directors’ feesThe Board of Directors may receive annual directors’ fees, as voted by theshareholders at the Annual General Meeting pursuant to Article 22-I of theArticles of Association.The total fee voted by shareholders is allocated by the Board of Directors,on the proposal or recommendation of the Appointments and CompensationCommittee, on the following basis:■■a fixed sum allocated to each director;a variable sum based on attendance at Board meetings.Directors may also receive additional fixed fees for their specific experienceor for special tasks undertaken at the Board’s request.The Board of Directors fixes the amount of any other compensation payableto the Chairman and Vice Chairman or Chairmen. It may also allocateexceptional compensation for special assignments or mandates entrustedto its members.Each director, whether a natural person, legal entity or permanentrepresentative, undertakes to hold a number of shares in the Companyequivalent to the sum of at least one year’s directors’ fees. Shares held tomeet this requirement must be held in registered form.Pursuant to the provisions of Article L. 228-17 of the French CommercialCode (Code de commerce), directors or permanent representatives maynot hold preferred non-voting shares.2. AUTHORIT Y AND POWERS OF THE BOARD OF DIRECTORSArticle 5 - Role and powersof the Board of DirectorsUnder the provisions of Article L. 225-35 of the French Commercial Code(Code de commerce):“The Board of Directors is responsible for defining the Company’s broadstrategic objectives and for their implementation. Except for those powersexpressly vested in the shareholders in General Meeting, the Board ofDirectors considers and decides on all matters related to the Company’soperations, subject to compliance with the corporate purpose.”The Board of Directors also decides whether to combine or separate thepositions of Chairman of the Board and Chief Executive Officer. Where thepositions are separated, the Chief Executive Officer must be an individualbut is not required to be a director.The Board of Directors exercises the powers vested in it by law and theCompany’s Articles of Association. To exercise these powers, it has a rightof information and communication and may be assisted by Committeesof the Board.A - Powers vested in the Board of DirectorsThe Board of Directors reviews and approves the annual and interim financialstatements of the Company and the Group, as well as the managementreports on the operations and results of the Company and its subsidiaries.It also approves budgets and forecasts.It calls shareholders’ meetings and may carry out shareholder-approvedsecurities issues.B - Matters requiring the Board of Directors’ priorauthorisationIn addition to the issue of guarantees and security interests and related-partyagreements governed by Article L. 225-38 of the French Commercial Code(Code de commerce), which by law require the Board’s prior authorisation,the Board of Directors has decided, as an internal rule, that its priorauthorisation must be obtained for certain management transactions dueto their nature or if they exceed a unit value of €200 million, as specifiedin the paragraph below entitled “Senior Management”. Accordingly, theBoard’s authorisation is required for all transactions that are likely to affectthe strategy of the Company and its subsidiaries, their financial positionor scope of business, such as the signature or termination of commercialagreements likely to materially influence the Group’s future development.In this respect, the Board has also granted certain blanket delegations ofauthority, renewable each year, which are described in the paragraph belowentitled “Senior Management”.Article 6 - Right of information and communicationThe Board of Directors carries out all the verifications and controls it deemsnecessary and at the times it deems appropriate. The Chairman or ChiefExecutive Officer is responsible for providing all directors with the documentsand information they need to fulfil their role and duties.Prior to each Board meeting, directors receive all the information they requireto prepare for the agenda items, provided such information is available andsufficiently complete.The Chief Executive Officer reports to the Board of Directors on the followingat least once every quarter:■■■operations of the Company and its main subsidiaries including sales andearnings figures;debt and the credit lines available to the Company and its mainsubsidiaries;headcount data for the Company and its main subsidiaries.The Board of Directors also reviews the Group’s off-balance sheetcommitments at least once every six months.Article 7 - Chairman of the Board of DirectorsThe Chairman of the Board organises and leads meetings of the Boardand reports to shareholders on the Board’s work at the General Meeting.He is responsible for ensuring that the Company’s corporate governancestructures function correctly and, more particularly, that the directors arecapable of fulfilling their duties.The Chairman also prepares a report to shareholders, in addition to theManagement Report, on the Company’s corporate governance and internalcontrol/risk management systems, particularly regarding the financial reportingprocess. This report indicates any restrictions placed by the Board ofDirectors on the Chief Executive Officer’s powers. If the Company voluntarilyrefers to a corporate governance code drawn up by an accredited body or194 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEAppendix: Board of Directors’ Charter5organisation, the report also indicates any provisions that are not appliedand the reasons why. It indicates where a copy of the code may be obtained.If the Company does not voluntarily refer to such a corporate governancecode, the report describes the Company’s corporate governance practicesover and above the legal requirements and explains why a reference codeis not used. The report also describes any special conditions regardingshareholder attendance at general meetings or refers to the provisions ofthe articles of association where such conditions can be found. The reportsets out the principles and rules set by the Board of Directors to determinethe compensation and benefits paid to executive officers and refers todisclosure of the information required by article L. 225-100-3 of the FrenchCommercial Code (Code de commerce).The report is approved by the Boardof Directors and published.The Chairman is elected for a period not exceeding his term of office asdirector. If the Chairman reaches the age of 70 while in office, he is requiredto stand down at the end of that term.In the event of the Chairman’s temporary unavailability or death, the Boardof Directors may appoint another director as acting Chairman. In the caseof temporary unavailability, the acting Chairman is appointed for a fixedperiod, which may be renewed. In the case of death, the acting Chairmanis appointed until such time as a new Chairman is elected.Article 8 - Senior ManagementBy virtue of article L. 225-56 of the French Commercial Code (Codede commerce), the Chief Executive Officer has full powers to act in allcircumstances in the name of the Company within the limits of its corporatepurpose, and except for those powers vested by law in the Board of Directorsor in the shareholders in a General Meeting. The Chief Executive Officerrepresents the Company in its dealings with third parties.However, the Board of Directors has decided, as an internal rule, that theChief Executive Officer must obtain the Board’s prior authorisation for thefollowing:■■transactions that are likely to affect the strategy of the Company and itssubsidiaries, their financial position or scope of business, such as thesignature or termination of industrial and commercial agreements likelyto materially influence the Group’s future development;transactions representing over two hundred million Euros (€200,000,000),including but not limited to:- investments in securities and immediate or deferred investments in anycompany or business venture,- sales of assets, rights or securities, in exchange for securities or acombination of securities and cash,- acquisitions of real property or real property rights,- purchases or sales of receivables, acquisitions or divestments of goodwillor other intangible assets,- issues of securities by directly or indirectly controlled companies,- granting or obtaining loans, borrowings, credit facilities or short-termadvances,- agreements to settle legal disputes,- disposals of real property or real property rights,- full or partial divestments of equity interests,- granting security interests.This €200 million ceiling does not, however, apply to finance lease transactionsrelating to buildings and/or equipment, for which the maximum aggregateauthorised amount is set at €300 million per year.These provisions apply to transactions carried out directly by the Companyand by all entities controlled directly or indirectly by the Company, exceptfor intragroup transactions.The Board of Directors may grant the Chief Executive Officer authority tocarry out the following transactions, up to a maximum aggregate limit seton an annual basis:■■■Guarantees and security interestsThe Chief Executive Officer may issue guarantees or other security intereststo third parties in the Company’s name, subject to a maximum annual limitof €600 million and a maximum limit per commitment of €300 million.Loans, confirmed credit lines, short-term credit facilities and all financingagreementsThe Chief Executive Officer may negotiate and/or renew or extend loans,confirmed credit lines, short-term credit facilities and all syndicated andnon-syndicated financing agreements subject to a maximum annual limitof €3 billion and a maximum limit per transaction of €500 million.Issuance of bonds and other debt securitiesThe Chief Executive Officer may issue bonds or any debt securities otherthan commercial paper, under the EMTN programme or otherwise, subjectto a ceiling of €3 billion, determine the terms and conditions of any suchissue and carry out all related market transactions. The Chief ExecutiveOfficer may issue commercial paper subject to a ceiling of €1 billion.The Chief Executive Officer may delegate all or some of these powers,except the power to issue bonds or other debt securities. He is requiredto report regularly to the Board of Directors on their utilisation.These provisions apply to transactions carried out directly by the Companyand by all entities controlled directly or indirectly by the Company.The Chief Executive Officer’s term of office is set by the Board of Directorsat its discretion, but may not exceed three years. If the Chief ExecutiveOfficer reaches the age of 70 while in office, he is required to stand downat the end of that term.In the event of the temporary unavailability of the Chief Executive Officer, theBoard of Directors shall appoint an acting Chief Executive Officer until suchtime as the Chief Executive Officer is able to resume his duties.At the proposal of the Chief Executive Officer, the Board of Directors mayappoint up to five individuals as Chief Operating Officers to assist the ChiefExecutive Officer in his duties.In agreement with the Chief Executive Officer, the Board of Directorsdetermines the scope and duration of the powers to be vested in the ChiefOperating Officers. However, they have the same powers as the ChiefExecutive Officer in dealings with third parties.The Chairman, if he is also Chief Executive Officer, the Chief Executive Officerand each of the Chief Operating Officers may delegate their powers to carryout one or several specific transactions or categories of transaction.3. COMMITTEESArticle 9 - Committees of the Board –General provisionsUnder Article 19-III of the Company’s by-laws, the Board of Directorsmay establish one or more specialised committees, appoint the membersthereof, and specify their role and responsibilities, under its oversight andauthority. The Board of Directors may not delegate to these Committeesany powers that are specifically vested in the Board of Directors either bylaw or under the Company’s by-laws. Each committee reports on its workat the next Board meeting.The Committees comprise at least three members, who must be directors,permanent representatives of corporate directors or non-voting directors,appointed by the Board. Members are appointed on a purely personal basisand may not be represented by proxy.Their term of office is set by the Board of Directors and may be renewed.The Board of Directors appoints a Chairman of each Committee, for a periodthat may not exceed that person’s term of office as a Committee member.Each Committee decides how often it will meet and may invite anyone itdeems appropriate to attend meetings.Minutes are prepared after each Committee meeting, unless specificallyprovided otherwise, under the authority of the Committee Chairman. Suchminutes are sent to all Committee members.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group195
5CORPORATE GOVERNANCEAppendix: Board of Directors’ CharterThe Committee Chairman reports to the Board of Directors on theCommittee’s work.The work carried out by each Committee is described in the Company’sannual report. The Committees are responsible for making proposals orrecommendations and giving their opinion in their specific area of expertise.To this end, they may conduct or commission any research or studies likelyto assist the Board of Directors in its decisions.Committee members receive fees allocated by the Board of Directors on therecommendation of the Appointments and Compensation Committee.The Board of Directors is currently assisted by two committees: the AuditCommittee and the Appointments and Compensation Committee.Article 10 - Audit CommitteeThe Audit Committee is responsible for reviewing the annual and interimfinancial statements, together with the accompanying reports, before theyare submitted to the Board of Directors for approval.As part of this process the Committee holds discussions with the StatutoryAuditors and reviews their audit reports and conclusions.The Audit Committee reviews and gives its opinion on candidates forappointment as Statutory Auditors of the company and its subsidiaries.It verifies the independence of the Statutory Auditors, with whom it has regularcontact. It also reviews overall relations between the Statutory Auditors andthe company and its subsidiaries and gives its opinion on their fees.The Audit Committee periodically reviews the internal control systems, andmore generally the audit, accounting and management procedures of thecompany and the Group, through discussions with the Chief Executive Officer,internal audit teams and the Statutory Auditors. It provides an interfacebetween the Board of Directors, the Statutory Auditors of the company andits subsidiaries, and the internal audit teams.■■■■The Committee also deals with any facts or events which may have asignificant impact on the position of <strong>Casino</strong>, Guichard-Perrachon or itssubsidiaries in terms of commitments and/or risks. It ensures that thecompany and its subsidiaries have effective internal audit, accountingand legal functions to prevent risks and management errors.The Audit Committee has at least three members appointed from amongthose directors with finance and management experience.It meets at least three times a year at the initiative of its Chairman, who mayalso arrange any additional meetings required by the circumstances.The Audit Committee may invite opinions from any persons of its choicebelonging to the support functions of the Company and its subsidiaries.It may call upon any outside consultant or expert it deems appropriateto assist in its duties.■■The Committee reports to the Board of Directors on its work, researchand recommendations. The Board of Directors has absolute discretionto decide whether or not to act on such recommendations.The Audit Committee has a charter, approved by the Board of Directors,describing its organisation, operation, expertise and responsibilities.Article 11 - Appointments and CompensationCommitteeThe role of the Appointments and Compensation Committee is to:■■■■■■■■■■prepare the groundwork for fixing the compensation of the Chief ExecutiveOfficer and, where applicable, the Chief Operating Officers, and to proposequalitative and quantitative criteria for determining any performance-relatedcomponent;assess all other benefits or emoluments to be received by the ChiefExecutive Officer and, where applicable, the Chief Operating Officers;review proposals for allocating stock options and/or share grants tomanagers and other Group employees in order to enable the Board ofDirectors to set the total and/or individual number of options or sharesto be allocated and the related terms and conditions;review the composition of the Board of Directors;examine candidate applications for election to the Board, in light of eachcandidate’s business experience, expertise and economic, social andcultural representativeness;examine candidate applications for the position of Chief Executive Officerand, where applicable, Chief Operating Officer;obtain all useful information concerning recruitment methods, compensationand status of senior executives of the company and its subsidiaries;make proposals and give opinions on directors’ fees and any othercompensation or benefits to be paid to the directors and non-votingdirectors;review the relationships between the directors and the company or itssubsidiaries to ensure that there is nothing which could interfere with theirfreedom or judgement or potentially lead to a conflict of interest;organise regular assessments of the Board of Directors’ performance.The Committee has at least three members and meets at least twice a year atthe initiative of its Chairman, who may also arrange any additional meetingsrequired by the circumstances.In association with the Chief Executive Officer, the Appointments andCompensation Committee works closely with the Group Human Resourcesand Finance departments, and may call upon any outside consultant orexpert it deems appropriate to assist in its duties.It reports to the Board of Directors on its work, research and recommendationsand the Board has absolute discretion to decide whether or not to act onsuch recommendations.4. NON-VOTING DIRECTORSArticle 12 - Non-voting directorsThe shareholders may appoint non-voting directors, who may be naturalpersons or legal entities, from among the shareholders. The Board ofDirectors may appoint a non-voting director subject to ratification at thenext shareholders’ meeting.The number of non-voting directors may not exceed five. They are electedfor a term of three years and may be re-elected.A non-voting director reaching the age of 80 while in office is required tostand down at the Annual General Meeting held to approve the financialstatements for the year in which this age limit was reached.Non-voting directors attend Board meetings in a consultative capacityonly.They may receive attendance fees, the total aggregate amount of which isfixed by ordinary resolution of the shareholders and remains unchanged untila further decision of the shareholders. Attendance fees are allocated amongthe non-voting directors at the discretion of the Board of Directors.196 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
CORPORATE GOVERNANCEAppendix: Board of Directors’ Charter55. DIRECTORS’ CODE OF CONDUCTArticle 13 - PrinciplesThe Company’s directors must be able to exercise their duties in compliancewith the rules of independence, business ethics and integrity.In line with good corporate governance practices, directors exercise theirduties in good faith in the manner they consider most appropriate to promotethe interests of the company and with the care that would be expected ofa normally prudent person in such circumstances.The directors undertake to maintain their freedom of analysis, judgement,decision and action at all times, and to withstand any direct or indirectpressure that may be brought to bear on them.Article 14 - Duty of informationBefore accepting office, directors must familiarise themselves with all legaland regulatory requirements concerning their position and with any provisionsspecific to the company set out in its by-laws and this charter.Article 15 - Protection of the Company’sinterests – Conflicts of interestDirectors must act in all circumstances in the best interests of theCompany.They undertake to ensure that the Company’s decisions do not favour oneparticular class of shareholder over another.The directors shall advise the Board of any actual or potential conflict ofinterest in which they might be directly or indirectly involved and in such acase shall abstain from voting on the issues concerned.Article 16 - Control and assessment of the Boardof Directors’ performanceDirectors must pay careful attention to the allocation and exercise ofpowers and responsibilities among the Company’s corporate governancestructures.They must ensure that no person can exercise uncontrolled discretionarypower over the Company, and that the Committees of the Board of Directorsoperate properly.Self-assessments are also organised regularly by the Appointments andCompensation Committee on the instructions of the Chairman of theBoard.Article 17 - Presence of directorsDirectors must devote the appropriate time and attention to their duties. Theyshall, as far as possible, attend all Board meetings, shareholders’ meetingsand meetings of any Committees of which they are members.Article 18 - Dealing in the Company’s sharesIn accordance with Article L. 621-18-2 of the French <strong>Mo</strong>netary and FinancialCode (Code monétaire et financier) and Article L. 222-14 of the GeneralRegulations of the Autorité des marchés financiers (AMF), each individualand corporate director is required to disclose to the AMF all purchases,sales, subscriptions or exchanges of the Company’s shares in excess of acumulative amount per calendar year of €5,000. This formality must be carriedout within five trading days of the transaction date. Disclosable transactionsinclude purchases and sales of derivative instruments and acquisitions ofshares on exercise of stock options, even when the acquired shares arenot sold immediately.This requirement also applies to persons who have close personal ties withany members of the Board of Directors, defined as a director’s spouse orpartner, dependent children, or any trust or partnership that is managedand/or controlled, directly or indirectly, by a director or by any person whohas close personal ties with a director.All shares in the company held by directors must be registered shares.Directors must also advise the Company of the number of shares they holdat each year-end and at the time of any capital transactions.Article 19 - ConfidentialityDirectors, and any other persons attending Board meetings, are bound bya general duty of confidentiality with regard to the proceedings of Boardmeetings or meetings of Committees of the Board.Non-public information received by directors in their capacity as Boardmembers is given on a personal basis. Such information must be keptstrictly confidential and must not be disclosed under any circumstances.These provisions also apply to representatives of corporate directors, andto non-voting directors.Article 20 - Inside informationInformation received by directors is governed by the provisions of ArticleL. 465-1 of the French <strong>Mo</strong>netary and Financial Code (Code monétaire etfinancier), Articles 611-1 to 632-1 of the AMF’s General Regulations andEuropean Commission Regulation 2773/2003 on inside information andinsider trading.If the Board of Directors receives specific confidential information which,if published, could have a significant impact on the share price of theCompany, one of its subsidiaries or associates, directors must not disclosesuch information to third parties until it has been made public.Directors shall also refrain from dealing in the Company’s shares during the“closed period” of fifteen days prior to publication of the company’s annualand interim financial statements.In accordance with new legal and regulatory requirements concerning insideinformation, each director has been registered on the Company’s list ofpeople who have permanent access to inside information.The directors have been advised of their inclusion in this list and have beenprovided with a summary of their duties concerning inside information andthe penalties for breaching such duties.6. ADOPTION OF THE BOARD OF DIRECTORS’ CHARTERThis Charter was approved for the first time by the Board of Directors at its meeting of 9 December 2003, and the most recent update was validated on28 February 2011.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group197
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6GENERALMEETING6.1. Report of the Board of Directors on ExtraordinaryBusiness Annual General Meeting of 14 April 2011 .....2006.2. Statutory Auditors’ special reports ...............................2056.3. Proposed resolutions ...................................................210Registration Document <strong>2010</strong> | <strong>Casino</strong> Group199
6GENERAL MEETINGReport of the Board of Directors on Extraordinary Business Annual General Meeting of 14 April 20116.1. REPORT OF THE BOARD OF DIRECTORS ONEXTRAORDINARY BUSINESS ANNUAL GENERALMEETING OF 14 APRIL 2011Ladies and Gentlemen,We are seeking your approval of various proposed amendments to the Company's by-laws as well as the renewal of various authorisationsgranted to the Board of Directors.I. AMENDMENTS TO THE BY-LAWSAmendment relating to the retirement of directors by rotationIn accordance with the recommendations of the AFEP/MEDEF Corporate Governance Code, we are proposing to introduce a system wherebyone third of the directors will retire by rotation each year with effect from the Annual General Meeting to be held in 2012, when the term ofall directors currently in office is due to expire.Accordingly, we propose to amend the wording of sections I and III of article 16 of the by-laws as follows to enable the shareholders to electa director exceptionally for a term of one or two years, the standard term of office being three years:Old versionI. Except for the effect of paragraphs II and III (two last paragraphs)of this article, the duration of the offices of the directors is three yearsexpiring at the end of the meeting of the Ordinary General Meeting ofshareholders ruling on the accounts of the past year and held in theyear during which the office expires.Directors at the end of their office are re-eligible.II. (…)III. Directors are appointed or renewed in their offices by the OrdinaryGeneral Meeting of shareholders.In case of vacancy by death or resignation of one or more seats ofdirectors, the Board of Directors may, between two General Meetings,appoint persons provisionally. These appointments are subject toratification of the next General Meeting.Should the appointment of a director made by the board not be ratifiedby the meeting, the acts carried out by this director and the decisionsmade by the board during the provisional management, are still valid.Should the number of directors become less than three, the remainingmembers (or in case of shortage representative appointed at the requestof any person concerned by the President of the commercial court) mustconvene immediately an Ordinary General Meeting of shareholders witha view to appointing one or more new directors in order to completethe board until the legal minimum.The director appointed in replacement of another director only remainsin office the time remaining on the office of his predecessor.The appointment of a new member of the board adding to the membersin office may be decided only by the General Meeting which fixes theduration of the office.New versionI. Except for the effect of paragraphs II and III (two last paragraphs)of this article, the duration of the offices of the directors is three yearsexpiring at the end of the meeting of the Ordinary General Meeting ofshareholders ruling on the accounts of the past year and held in theyear during which the office expires.Directors at the end of their office are re-eligible.Directors are appointed or renewed in their offices by the OrdinaryGeneral Meeting of shareholders.Directors have their terms of office renewed in rotation so that thedirectors are regularly renewed in proportions that are as equal aspossible. In order to enable the system of rotation to operate, theOrdinary General Meeting can appoint a director for a period of one ortwo years, on an exceptional basis.II. (…)III. In case of vacancy by death or resignation of one or more seats ofdirectors, the Board of Directors may, between two General Meetings,appoint persons provisionally. These appointments are subject toratification of the next General Meeting.Should the appointment of a director made by the board not be ratifiedby the meeting, the acts carried out by this director and the decisionsmade by the board during the provisional management, are still valid.Should the number of directors become less than three, the remainingmembers (or in case of shortage representative appointed at the requestof any person concerned by the President of the commercial court) mustconvene immediately an Ordinary General Meeting of shareholders witha view to appointing one or more new directors in order to completethe board until the legal minimum.The director appointed in replacement of another director only remainsin office the time remaining on the office of his predecessor.The appointment of a new member of the board adding to the membersin office may be decided only by the General Meeting which fixes theduration of the office.200 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGReport of the Board of Directors on Extraordinary Business Annual General Meeting of 14 April 20116Amendment relating to the age limit for directorsWe also propose to amend the age limit for directors by simply applying the provisions set out by law, that is no more than one third of thedirectors may be aged over 70.We therefore propose to amend the wording of section II of article 16 of the by-laws as follows:Old versionNew versionI. (…) I. (…)II. The age limit for the exercising of the offices of director, individual, orpermanent representative of director, legal entity, is fixed at 70 years.The director or permanent representative reached by the age limitremains in office until the expiry of his current office.This age limit does not apply to persons who have exercised previouslythe offices of member of the Board of Directors of the Company.By exception to these provisions, an office may be given to a personover this age limit, or be renewed for a duration of three years nonrenewable.In any case, the number of directors, individuals, and permanentrepresentatives of directors, legal entities, having exceeded the ageof 70 cannot be greater than one forth of the director sin office. In theevent of exceeding of the proportion, the oldest director or permanentrepresentative is deemed resigning automatically at the end of theannual Ordinary General Meeting ruling on the accounts of the yearduring which the age limit was exceeded.III. (…)II. No person over the age of seventy (70) may be elected as directoror permanent representative of a corporate director if such electionwould cause the number of directors and permanent representativesof corporate directors over that age to be more than one third of thetotal. In the event of exceeding of the proportion, the oldest directoror permanent representative is deemed resigning automatically at theend of the annual Ordinary General Meeting ruling on the accounts ofthe year during which the age limit was exceeded.III. (…)Amending the by-laws to reflect new regulations on shareholders' rightsWe propose to amend the wording of articles 25-II, 25-IV, 27-I and 28-III of the by-laws to reflect the new regulations on shareholders’ rightsintroduced by the decree of 23 June <strong>2010</strong> and the ordinance of 9 December <strong>2010</strong>. The new regulations extend the options for shareholderswishing to appoint a proxy. They also permit electronic proxies to be revoked and increase the advance notice to be given for a GeneralMeeting on second call from six to ten days.The proposed amendments are as follows:Old versionArticle 25 – Setting up of the General MeetingsI. (…)II. Anyshareholder may be represented only by his/her spouse or byanother shareholder by virtue of a special written proxy signed by theshareholder.Minors and incompetent persons are represented by their guardiansand trustees, without the latter needing to be shareholders in person.A legal entity is validly represented by any legal representative havingcapacity or by a person specially empowered for that purpose.The owner of shares whose domicile is not in France may be representedby the middleman properly registered as owner of these shares onbehalf of the latter.III. (…)New versionArticle 25 – Setting up of the General MeetingsI. (…)II. Shareholders may appoint a proxy to represent them in accordancewith the provisions of the law.Minors and incompetent persons are represented by their guardiansand trustees, without the latter needing to be shareholders in person.A legal entity is validly represented by any legal representative havingcapacity or by a person specially empowered for that purpose.The owner of shares whose domicile is not in France may be representedby the middleman properly registered as owner of these shares onbehalf of the latter.III. (…)Registration Document <strong>2010</strong> | <strong>Casino</strong> Group201
6GENERAL MEETINGReport of the Board of Directors on Extraordinary Business Annual General Meeting of 14 April 2011IV. Shareholders may, if the board decides it, take part in the meetingsand vote by videoconference or by any telecommunication and remotetransmission means, including the Internet, allowing their identificationin the conditions of the regulations in force and those decided by theboard.By decision of the Board of Directors, shareholders may make outtheir distance vote forms or by proxy on an electronic medium, in theconditions fixed by the regulations then in force. The capture andsignature of the forms may be directly made on the Internet site setup by the centralizing establishment in charge of the General Meeting.The electronic signature of the form may be made by any processin conformity with the provisions of the first sentence of the secondparagraph of article 1316-4 of the Civil Code, or any subsequentlegal provisions which would substitute for it, such as the use of anidentifying code and a password. The vote or proxy expressed bythis electronic means, as well as the acknowledgement of receiptgiven, shall be considered as non revocable written documents andbinding on all, except in the event of transfer of securities notified in theconditions provided for in the second paragraph of article R. 225-85 IVof the Commercial Code or by any other subsequent legal or statutoryprovision substituting for it.IV. Shareholders may, if the board decides it, take part in the meetingsand vote by videoconference or by any telecommunication and remotetransmission means, including the Internet, allowing their identificationin the conditions of the regulations in force and those decided by theboard.By decision of the Board of Directors, shareholders may make outtheir distance vote forms or by proxy on an electronic medium, in theconditions fixed by the regulations then in force. The capture andsignature of the forms may be directly made on the Internet site setup by the centralizing establishment in charge of the General Meeting.The electronic signature of the form may be made by any processin conformity with the provisions of the first sentence of the secondparagraph of article 1316-4 of the Civil Code, or any subsequent legalprovisions which would substitute for it, such as the use of an identifyingcode and a password.The electronic vote and the acknowledgement of receipt will beconsidered as an irrevocable written document binding on everyone,except in the event of the sale of shares notified on the terms andconditions set out in the second indent of Article R. 225-85 IV of theFrench Commercial Code (Code de commerce) or any other futureprovision of the law that might replace it.The electronic proxy form and the acknowledgement of receipt willbe considered as a revocable written document binding on everyoneunder the conditions set out by law.Article 27 – Notification to attend – Place of meeting - AgendaI. General Meeting is convened by the Board of Directors, or, in the eventof shortage, by the auditors or even by a representative designated bythe President of the commercial court ruling in urgent matters, at therequest either of one or more shareholders gathering one fifth at least ofthe authorized capital, or an association of shareholders in the conditionsprovided for by article L. 225-120 of the Commercial Code.The notification to attend is sent fifteen days at least in advance atthe first convening and six days at least in advance for the followingmeeting, by way of an ad inserted in a magazine empowered to receivelegal announcements in the “département” of the registered office andin the Bulletin des Annonces Légales Obligatoires.Shareholders owning registered shares for one month at least on thedate of these notices are convened by ordinary letter or by any electroniccommunication means.The notification to attend is preceded by a notice containing theindications provide for by law and inserted in the Bulletin des AnnoncesLégales Obligatoires thirty five days at least before the meeting.II. (…)III. (…)Article 27 – Notification to attend – Place of meeting – AgendaI. General Meetings is convened by the Board of Directors, or, in theevent of shortage, by the auditors or even by a representative designatedby the president of the commercial court ruling in urgent matters, at therequest either of one or more shareholders gathering one fifth at least ofthe authorized capital, or an association of shareholders in the conditionsprovided for by article L. 225-120 of the Commercial Code.The notification to attend is sent fifteen days at least in advance atthe first convening and ten days at least in advance for the followingmeeting, by way of an ad inserted in a magazine empowered to receivelegal announcements in the “département” of the registered office andin the Bulletin des Annonces Légales Obligatoires.Shareholders owning registered shares for one month at least on thedate of these notices are convened by ordinary letter or by any electroniccommunication means.The notification to attend is preceded by a notice containing theindications provide for by law and inserted in the Bulletin des AnnoncesLégales Obligatoires thirty five days at least before the meeting.II. (…)III. (…)202 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGReport of the Board of Directors on Extraordinary Business Annual General Meeting of 14 April 20116Article 28 – Committee – Attendance sheet –Votes – Vote by post – MinutesI. (…)II. (…)III. Any shareholder has as many votes as he owns shares or representsthem without any limitation, with the sole exception of the cases providedfor by law. However, a double right to vote is given, in legal conditions,to all shares fully paid up for which is justified a registered registrationfor four years at least, in the name of a same shareholder, as well as,in case of capital increase by incorporation of reserves, profits or issuepremiums, to registered shares granted free of charge to a shareholderon account of old shares for which it has this right.The list of registered shares with double right to vote is settled by theBoard of Directors.The double right to vote thus given to registered shares fully paid upceases ipso jure, for any share that was converted into a bearer shareor transfer in ownership, except, in case of transfer of from registeredto registered, by enforcement of the provisions of article L. 225-124of the Commercial Code. For any power of attorney of a shareholderwithout indication of a representative, the chairman of the GeneralMeeting issues a favourable vote for the adoption of draft resolutionspresented or approved by the Board of Directors and an unfavourablevote for the adoption of any other draft resolutions. To issue any othervote, the shareholder must choose a representative with the capacityof shareholder who accepts to vote in the sense indicated by theprincipal.Votes are expressed by a show of hands, by e-mail or by anytelecommunication means allowing the identification of the shareholdersin the conditions of the regulations in force. The General Meeting mayalso decide the secret vote upon proposition of the committee.Shareholders may also vote by post, in legal conditions.The vote or proxy issued by a middleman who, either has not declaredhimself as registered middleman, holder of securities on behalf of thirdparties not domiciled in France, or has not disclosed the identity of theowners of the shares for which he is registered, in accordance with theregulations in force, shall not be taken into accountIV. (…)Article 28 – Committee – Attendance sheet –Votes – Vote by post – MinutesI. (…)II. (…)III. Any shareholder has as many votes as he owns shares or representsthem without any limitation, with the sole exception of the cases providedfor by law. However, a double right to vote is given, in legal conditions,to all shares fully paid up for which is justified a registered registrationfor four years at least, in the name of a same shareholder, as well as,in case of capital increase by incorporation of reserves, profits or issuepremiums, to registered shares granted free of charge to a shareholderon account of old shares for which it has this right.The list of registered shares with double right to vote is settled by theBoard of Directors.The double right to vote thus given to registered shares fully paid upceases ipso jure, for any share that was converted into a bearer shareor transfer in ownership, except, in case of transfer of from registeredto registered, by enforcement of the provisions of article L. 225-124of the Commercial Code. For any power of attorney of a shareholderwithout indication of a representative, the chairman of the GeneralMeeting issues a favourable vote for the adoption of draft resolutionspresented or approved by the Board of Directors and an unfavourablevote for the adoption of any other draft resolutions. To issue any othervote, the shareholder must choose a proxy who accepts to vote in thesense indicated by the principal.Votes are expressed by a show of hands, by e-mail or by anytelecommunication means allowing the identification of the shareholdersin the conditions of the regulations in force. The General Meeting mayalso decide the secret vote upon proposition of the committee.Shareholders may also vote by post, in legal conditions.The vote or proxy issued by a middleman who, either has not declaredhimself as registered middleman, holder of securities on behalf of thirdparties not domiciled in France, or has not disclosed the identity of theowners of the shares for which he is registered, in accordance with theregulations in force, shall not be taken into account.IV. (…)Registration Document <strong>2010</strong> | <strong>Casino</strong> Group203
6GENERAL MEETINGReport of the Board of Directors on Extraordinary Business Annual General Meeting of 14 April 2011II. FINANCIAL AUTHORISATIONSTo permit the Company to raise funds in the market should it appearnecessary to finance its continued growth strategy, we are seekingthe renewal of all financial authorisations due to expire, bearing inmind that the maximum limits for these various authorisations havebeen decreased and are in line with the recommendations made bythe various consulting firms.Thus, it is proposed that you delegate to the Board of Directors, fora period of 26 months, the competence to decide:■■■■■■The issue of shares or of negotiable securities convertible into theCompany’s capital or giving entitlement to the allocation of new orexisting shares of the Company or of debt securities of the Company,with retaining shareholders’ preferential subscription rights, withthe power, in the event of surplus subscription applications, toincrease the number of shares. The overall nominal amount ofnegociable securities convertible into Company’s capital likelyto be issued in vertu of this delegation, could not exceed eightymillion euros, if it consists in shares representing a quota lot of thecapital, and two billion euros or its exchange value in currenciesor composite monetary units, if it consists in debt securities.The issue by public offering or to the benefit of the personsreferred in paragraph II of Article L.411-2 of <strong>Mo</strong>netary andFinancial Code, of shares or of negotiable securities convertibleinto the Company’s capital or giving entitlement to the allocationof new or existing shares of the Company or of debt securities ofthe Company, with the suppression of shareholders’ preferentialsubscription rights, with the power, in the event of surplussubscription applications, to increase the number of shares.Persons referred to in paragraph II of Article L.411-2 of <strong>Mo</strong>netaryand Financial Code would be determined by the Board of Directors.The overall nominal amount of negociable securities likely to beissued by public offering, could not exceed forty million euros,if it consists in shares representing a quota lot of the capital,and two billion euros or its exchange value in currencies orcomposite monetary units, if it consists in debt securities. Theoverall nominal amount of any capital increases that might becompleted, whether immediately and/or in the future, in theframework of issue to the benefits of the persons referred inparagraph II of Article L.411-2 of <strong>Mo</strong>netary and Financial Codecould not exceed 10% of the Company’s capital each year.The issue price would be at least equal to the weighted averageshare price on the Euronext Paris regulated market during thethree last stock market sessions preceding the fixing thereof,subject to a maximum possible discount of 5%. The Boardwould also be authorized, up to a maximum of 10% of theauthorized share capital per year, to set the issue price on thebasis of the weighted average share price during the ten laststock market sessions preceding the fixing thereof, subject toa maximum possible discount of 5%, by way of exception tothe provisions of Article L. 225-136-1 of the Commercial Code;To increase the authorized share capital by the capitalizationof reserves, profits, premiums or other sums the capitalizationof which is allowed. The amount of increase in the Company’scapital resulting from issue realized on this basis shouldnot exceed the nominal amount of eighty million euros.The issue of shares or negotiable securities convertible into theCompany’s capital in the event of a takeover bid being madeby <strong>Casino</strong>, Guichard-Perrachon for the shares of another listedcompany with the suppression of shareholders’ preferentialsubscription rights. The overall nominal amount of negociablesecurities convertible into Company’s capital likely to be issuedin vertu of this delegation, could not exceed eighty millioneuros, if it consists in shares representing a quota lot of thecapital, and two billion euros or its exchange value in currenciesor composite monetary units, if it consists in debt securities.It is also proposed to delegate to the Board of Directors, for a period oftwenty-six months, the power to decide to issue shares or negotiablesecurities convertible into the Company’s capital, up to a maximumof 10% of the Company’s capital, in order to pay for contributionsin kind made to the Company and consisting of equity securities ornegotiable securities convertible into the capital, in accordance withArticle L. 225-147 of the Commercial Code.The overall nominal amount of any capital increases that might becompleted, whether immediately and/or in the future, on the basis ofthese delegations, could not exceed eighty million euros, and the oneof any issues of debt securities that might be completed, whetherimmediately and/or in the future, on the basis of these delegationscould not exceed two billion euros or its exchange value in currenciesor composite monetary units.The General Meeting may also be assigned to authorize the Companyor the companies that hold more that half of the Company’s capitalto issue negotiable securities giving entitlement to the allocation of<strong>Casino</strong>’ existing shares.As the Board's authorisation to make stock grants of existing or newshares to certain employees and executive officers of the Group is dueto expire, the Board is seeking its renewal for a period of twenty-sixmonths. The total number of shares that may be granted pursuantto this authorisation may not be more than 1% of the total numberof shares comprising the Company's share capital on the date ofthe Annual General Meeting. The Board will have the power to setthe terms and conditions and, if applicable, any criteria related to thegrants. The shares granted will be subject to a vesting period of atleast two years and a lock-up period of at least two years as of thevesting date. Share grants made under the previous authorisationare described on page 35.In order to harmonise the term of all authorisations given to the Boardof Directors, we are seeking early renewal, for a period of 26 months,of the following authorisations:■■To grant stock options exercisable for new or existing sharesto employees and executive officers of the Company or relatedcompanies. Directors are not entitled to receive stock options. Thetotal number of options that may be granted may not exceed 2%of the total number of shares comprising the Company's sharecapital on the date of the Annual General Meeting, not includingoptions previously granted but not yet exercisedThe exercise pricemay not be less than the average of the opening prices quotedduring the twenty trading days preceding the option grant date. Inthe case of options on existing shares, the exercise price may notbe less than the average price paid for the shares bought backby the Company pursuant to Articles L.225-208 and L.225-209of the French Commercial Code (Code de commerce). The life ofthe options may not exceed seven years. Options granted underthe previous authorisation are described on page 34.To reduce the share capital by cancelling shares of the Companyacquired pursuant to the provisions of article L.225-209 of theFrench Commercial Code (Code de commerce).204 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGStatutory Auditors’ special reports6Lastly, we are seeking a twenty-six months authorisation to makeemployee share issues, in accordance with article L. 3332-18 et seq.of the French Labour Code (Code du travail) and article L. 225-138-1of the French Commercial Code (Code de commerce). The issue pricewill be set in accordance with the provisions of Article L. 3332-19 of theFrench Labour Code, that is by reference to the average quoted shareprice during the twenty trading days preceding the date on which thesubscription opening date was set, less a discount of up to 20% or30% if the lock-up period under the plan is ten years or more. Underthis authorisation, the Board may also sell existing shares boughtback on the market in accordance with Article L.225-206 et seq. ofthe French Commercial Code (Code de commerce). The number ofshares issued or sold pursuant to this authorisation may not exceed4% of the total number of shares comprising the Company's sharecapital on the date of the Annual General Meeting.We trust that these proposals meet with your approval and that youwill vote in favour of the corresponding resolutions.The Board of Directors6.2. STATUTORY AUDITORS’ SPECIAL REPORTSSTATUTORY AUDITORS’ REPORT ON THE CAPITAL DECREASE11 th resolutionThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of your Company and inaccordance with the procedures provided for in article L. 225-209 ofthe French Commercial Code (Code de commerce) on the decreasein share capital by the cancellation of shares purchased, we herebyreport to you on our assessment of the reasons for and the termsand conditions of the proposed decrease in share capital.Shareholders are requested to confer all necessary powers on theBoard of Directors, during a period of 26 months starting from the dayof this Shareholders’ Meeting, to cancel, up to a maximum of 10% ofits share capital by 24-month periods, the shares purchased by theCompany pursuant to the authorisation to purchase its own sharesas part of the provisions of the aforementioned Article.We performed the procedures that we considered necessary inaccordance with the professional guidelines of the French NationalInstitute of Statutory Auditors (Compagnie nationale des commissairesaux comptes) applicable to this engagement. Our proceduresconsisted, in particular, in verifying the fairness of the reasons for andthe terms and conditions of the proposed decrease in share capital,and ensuring that it does not interfere with the equal treatment ofshareholders.We have no comments on the reasons for and the terms andconditions of the proposed decrease in share capital.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain DescoinsRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group205
6GENERAL MEETINGStatutory Auditors’ special reportsSTATUTORY AUDITORS’ SPECIAL REPORT ON THE ISSUE OF SHARES ANDMARKETABLE SECURITIES CONFERRING ENTITLEMENT TO THE SHARE CAPITAL12 th , 13 th , 14 th , 15 th , 16 th , 18 th , 19 th and 20 th resolutionsThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of <strong>Casino</strong>, Guichard-Perrachonand pursuant to the procedures set forth in the French CommercialCode (Code de commerce), and in particular, articles L. 225-135,L. 225-136 and L. 228-92, we hereby present to you our report onthe proposed delegations of authority to the Board of Directors tocarry out various issues of shares and marketable securities conferringentitlement to the share capital, as presented in the 12 th , 13 th , 14 th ,15 th , 16 th , 18 th , 19 th and 20 th resolutions, transactions on which youare asked to vote.Your Board of Directors proposes, based on its report:■that shareholders delegate to it, for a period of 26 months, with theoption to sub-delegate such powers to the Chief Executive Officeror with the latter’s approval, to one or more deputy vice-presidents,the authority to decide on these transactions and to set the finalterms and conditions of these issues and proposes, when necessary,that you waive your preferential subscription rights:- issue, with retention of preferential subscription rights, shares ormarketable securities conferring entitlement to new or existingshares of the Company or existing shares of any company inwhich it holds, directly or indirectly, more than 50% of the sharecapital or conferring entitlement to debt securities (12 th , 16 th and20 th resolutions),- issue, with cancellation of your preferential subscription rights,up to a maximum of 10% of the share capital per year, througha public offering or through an offering referred to in paragraphII of article L. 411-2 of the French <strong>Mo</strong>netary and Financial Code(Code monétaire et financier), shares or marketable securitiesconferring entitlement to new or existing shares of the Companyor, in accordance with Article L. 228-93 of the French CommercialCode, of existing shares of any company, in which it holds,directly or indirectly, more than 50% of the share capital orconferring entitlement to debt securities (13 th , 14 th , 15 th , 16 th and20 th resolutions),- issue, with cancellation of your preferential subscription rights,shares or other marketable securities conferring entitlement to theshare capital of the Company, in the event of a public exchange,mixed or alternative offer, initiated by the Company on the sharesor marketable securities of another company registered on oneof the regulated markets referred to in Article L. 225-148 of theFrench Commercial Code (18 th and 20 th resolutions);th■ to authorise it, pursuant to the 15 resolution and as part of thedelegation of authority referred to in the 13 th and 14 th resolutions,to set the issue price up to the annual legal maximum of 10% ofthe share capital;■to delegate to it, for a period of 26 months, with the option tosub-delegate such powers to the Chief Executive Officer or withthe latter’s approval, to one or more deputy vice-presidents, theauthority to set the terms and conditions of an issue of shares ormarketable securities conferring entitlement to the share capitalof the Company, in consideration of in-kind contributions made tothe Company that are comprised of equity securities or marketablesecurities conferring entitlement to the share capital, up to amaximum of 10% of the share capital (19 th and 20 th resolutions).The total nominal amount of potential capital increases likely to becarried out, immediately or in the future, may not exceed €80 millionpursuant to the 12 th , 13 th , 14 th , 18 th and 19 th resolutions, excluding thenominal amount of additional shares to be issued to preserve the rightsof holders of marketable securities in accordance with the law. Thenominal amount of debt securities likely to be issued, immediately orin the future, pursuant to the 12 th , 13 th , 14 th , 18 th and 19 th resolutions,may not exceed €2 billion or its equivalent in a foreign currency orcomposite monetary units. These ceilings include the additional numberof marketable securities to be created as part of the delegations ofauthority resulting from the 12 th , 13 th and 14 th resolutions, under theconditions set forth in article L. 225-135-1 of the French CommercialCode, should you adopt the 18 th resolution.It is the responsibility of the Board of Directors to prepare a report inaccordance with articles R. 225-113, R. 225-114 et R. 225-117 ofthe French Commercial Code. Our role is to express an opinion onthe fair presentation of the quantified information extracted from theaccounts, on the proposed cancellation of preferential subscriptionrights and on certain other information concerning these transactions,contained in this report.We performed the procedures that we deemed necessary inaccordance with the professional guidelines of the French Instituteof Statutory Auditors (Compagnie nationale des commissaires auxcomptes) relating to this type of engagement. These proceduresconsisted in verifying the content of the Board of Directors’ reportin respect of these transactions and the terms and conditionsgoverning the determination of the issue price of equity securitiesto be issued.Subject to a subsequent review of the terms and conditions ofproposed issues, we have no comments on the terms and conditionsgoverning the determination of the issue price of equity securities tobe issued presented in the Board of Directors’ report in connectionwith the 13 th and 14 th resolutions.Furthermore, as the report does not include information on the termsand conditions governing the determination of the issue price ofsecurities to be issued pursuant to the 12 th , 18 th and 19 th resolutions,we cannot express an opinion on the issue price calculation inputs.As the issue price of equity securities to be issued has not been setyet, we do not express an opinion on the final terms and conditionsunder which the issues will be performed and, as such, on theproposed cancellation of preferential subscription rights submittedfor your approval in the 13 th , 14 th 18 th and 19 th resolutions.In accordance with article R. 225-116 of the French Commercial Code,we shall issue an additional report, if necessary, on the performance byyour Board of Directors of any issues with cancellation of preferentialsubscription rights or of any issues of securities conferring accessto the Company’s share capital and/or entitlement to the grant ofdebt instruments.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain Descoins206 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGStatutory Auditors’ special reports6STATUTORY AUDITORS’ SPECIAL REPORT ON THE ISSUE, BY ANY COMPANYHOLDING MORE THAN 50% OF THE SHARE CAPITAL OF CASINO, GUICHARD-PERRACHON, OF MARKETABLE SECURITIES CONFERRING ENTITLEMENTTO EXISTING SHARES OF THE COMPANY21 st resolutionThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of your Company and inaccordance with the procedures provided for in articles L. 228-93and L. 228-92 of the French Commercial Code (Code de commerce),we hereby present to you our report on the proposed issue, by anycompany which holds, directly or indirectly, more than 50% of theshare capital of <strong>Casino</strong>, Guichard-Perrachon, of marketable securitiesconferring entitlement by any means, immediately or in the future,to existing shares of your Company. You are asked to vote on thistransaction.Your Board of Directors recommends that, based on its report, youconfer on it, for a period of 26 months, the authority to issue thesetypes of marketable securities. It is the responsibility of the Board toprepare a report in accordance with Article L. 228-92 of the FrenchCommercial Code. It is our role to give our opinion on the terms andconditions of the proposed transaction.We performed the procedures that we considered necessary inaccordance with professional guidelines. These procedures consistedin verifying the content of the report of the Board of Directors relatingto this authorisation and verifying that the terms and conditionsproposed by your Board comply with legal provisions.We have no comments on the information given in the Board ofDirectors’ report in connection with the proposed transaction.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain DescoinsSTATUTORY AUDITORS’ SPECIAL REPORT ON THE GRANTING OF SHAREPURCHASE OPTIONS TO EMPLOYEES OF CASINO, GUICHARD-PERRACHONAS WELL AS TO EMPLOYEES AND CORPORATE OFFICERSOF AFFILIATED COMPANIES22 nd resolutionThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of your Company and inaccordance with the procedures provided for in articles L. 225-177and R. 225-144 of the French Commercial Code (Code de commerce),we have prepared this report on the granting of share purchaseoptions to employees of your Company as well as to employeesor corporate officers of companies or economic interest groupingsreferred to in Article L. 225-180 of the French Commercial Code, itbeing specified that the corporate officers of your Company may notbe granted share purchase options.It is the responsibility of the Board of Directors to prepare a reporton the reasons for the granting of share purchase options and theproposed terms and conditions for determining the purchase price.It is our responsibility to comment on the proposed terms andconditions for determining the purchase price.We performed the procedures that we considered necessary inaccordance with the professional guidelines of the French NationalInstitute of Statutory Auditors (Compagnie nationale des commissairesaux comptes) applicable to this engagement. These proceduresconsisted in verifying that the proposed terms and conditions fordetermining the purchase price are disclosed in the Board of Directors’report, that they comply with legal provisions, in order to informshareholders, and that they do not appear obviously inappropriate.We have no comments to make on the proposed terms and conditions.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain DescoinsRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group207
6GENERAL MEETINGStatutory Auditors’ special reportsSTATUTORY AUDITORS’ SPECIAL REPORT ON THE GRANTINGOF SUBSCRIPTION OPTIONS TO EMPLOYEES OF CASINO, GUICHARD-PERRACHON AS WELL AS TO EMPLOYEES AND CORPORATE OFFICERSOF AFFILIATED COMPANIES23 rd resolutionThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of your Company and inaccordance with the procedures provided for in articles L. 225-177and R. 225-144 of the French Commercial Code (Code de commerce),we have prepared this report on the granting of share subscriptionoptions to employees as well as to employees and corporate officersof companies or economic interest groupings referred to in articleL. 225-180 of the French Commercial Code, it being specified thatthe corporate officers of your Company may not be granted sharesubscription options.It is the responsibility of the Board of Directors to prepare a reporton the reasons for the granting of share subscription options andthe proposed terms and conditions for determining the subscriptionprice. It is our responsibility to comment on the proposed terms andconditions for determining the subscription price.We performed the procedures that we considered necessary inaccordance with the professional guidelines of the French NationalInstitute of Statutory Auditors (Compagnie nationale des commissairesaux comptes) applicable to this engagement. These proceduresconsisted in verifying that the proposed terms and conditions fordetermining the subscription price are disclosed in the Board ofDirectors’ report, that they comply with legal provisions, in orderto inform shareholders, and that they do not appear obviouslyinappropriate.We have no comments to make on the proposed terms andconditions.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain DescoinsSTATUTORY AUDITORS’ SPECIAL REPORT ON THE FREE GRANTINGOF EXISTING SHARES OR SHARES TO BE ISSUED TO EMPLOYEESOF CASINO, GUICHARD-PERRACHON AS WELL AS TO EMPLOYEESAND CORPORATE OFFICERS OF AFFILIATED COMPANIES24 th resolutionThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of your Company and inaccordance with the procedures provided for in article L. 225-197-1 ofthe French Commercial Code (Code de commerce), we have preparedthis report on the proposed free granting of existing shares or sharesto be issued to employees or to certain categories of them as wellas to employees and corporate officers of companies or economicinterest groupings affiliated to the Company under the conditionsset forth in article L. 225-197-2 of the French Commercial Code, itbeing specified that the corporate officers of your Company may notreceive free grants of shares.The Board of Directors also recommends that you confer on it theauthority to grant shares for no consideration, whether existing or to beissued. It is responsible for preparing a report on the transaction that itwishes to carry out. Our role is to inform you of our comments, if any,on the information thus given to you on the proposed transaction.We performed the procedures that we considered necessary inaccordance with the professional guidelines of the French NationalInstitute of Statutory Auditors (Compagnie nationale des commissairesaux comptes) applicable to this engagement. Our work consisted inverifying more specifically that the proposed procedures and datapresented in the Board of Directors’ report comply with the legalprovisions.We have no comments on the information given in the Board ofDirectors’ report in connection with the proposed granting of sharesfor no consideration.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain Descoins208 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGStatutory Auditors’ special reports6STATUTORY AUDITORS’ REPORT ON THE CAPITAL DECREASEWITH CANCELLATION OF PREFERENTIAL SUBSCRIPTION RIGHTSRESERVED FOR EMPLOYEES25 th resolutionThis is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of Englishspeaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditingstandards applicable in France.To the Shareholders,In our capacity as Statutory Auditors of your Company and inaccordance with the procedures provided for in articles L. 225-135 etseq. of the French Commercial Code (Code de commerce), we herebyreport to you on the proposed delegation to the Board of Directorsof the authority, with the option to delegate such authority pursuantto articles L. 225-129-2 and L. 225-129-6 of the French CommercialCode, to decide on a capital increase by the issue of ordinary shareswith cancellation of preferential subscription rights, reserved tomembers of a corporate savings plan of <strong>Casino</strong>, Guichard-Perrachonand their affiliated companies under the conditions referred to in articleL. 233-16 of the French Commercial Code. This capital increase maynot exceed 4% of the total number of Company outstanding as ofthe date of the Extraordinary Shareholders’ Meeting. You are askedto vote on this transaction.Shareholders are asked to approve this share capital increase pursuantto Article L. 225-129-6 of the French Commercial Code and articleL. 3332-18 et seq. of the French Labor Code (Code du travail).Your Board of Directors recommends that, based on its report, youconfer on it, for a period of 26 months, the authority to decide onone or more issues and waive your preferential subscription rights.If applicable, it will be responsible for determining the final issuanceterms and conditions of this transaction.It is the Board of Directors’ responsibility to prepare a report inaccordance with articles R. 225-113 and R. 225-114 of the FrenchCommercial Code. Our role is to express an opinion on the fairnessof the quantified data extracted from the financial statements,on the proposed cancellation of preferential subscription rights andon certain other information pertaining to the issuance as presentedin this report.We performed the procedures that we considered necessary inaccordance with the professional guidelines of the French NationalInstitute of Statutory Auditors (Compagnie nationale des commissairesaux comptes) applicable to this engagement. Such proceduresconsisted in verifying the content of the Board of Directors’ reportas it relates to this transaction and the terms and conditions underwhich the issue price of the shares was determined.Subject to our subject review of the terms and conditions of the capitalincreases that may be decided, we have no comments to make onthe procedures for determining the issue price of the shares to beissued presented in the Board of Directors’ report.As the issue price of the shares to be issued has not been determined,we express no opinion on the final terms and conditions under whichthe capital increases will be carried out and, consequently, on theproposed cancellation of preferential subscription rights on whichyou are asked to vote.In accordance with article R. 225-116 of the French CommercialCode, we will issue a supplementary report, where necessary, whenthis delegation of authority is utilised by your Board of Directors.Lyon and Neuilly-sur-Seine, 11 March 2011The Statutory AuditorsErnst & Young et AutresDeloitte & AssociésDaniel Mary-Dauphin Sylvain Lauria Antoine de Riedmatten Alain DescoinsRegistration Document <strong>2010</strong> | <strong>Casino</strong> Group209
6GENERAL MEETINGProposed resolutions6.3. PROPOSED RESOLUTIONS6.3.1. ORDINARY RESOLUTIONSFirst resolutionApproval of the Company’s f inancial statements forthe year ended 31 December <strong>2010</strong>Having considered the reports of the Board of Directors and theStatutory Auditors, the shareholders approve the Company’s financialstatements for the year ended 31 December <strong>2010</strong> as presented,showing net profit for the year of €371,661,581.13, together with thetransactions reflected or described in the said reports.The shareholders note the transfer to retained earnings, pursuant tothe resolution voted at the Annual General Meeting of 29 April <strong>2010</strong>,of 2009 dividends allocated to the 85,996 ordinary shares held bythe Company on the 10 May <strong>2010</strong>, being the dividend payment date,amounting to a total of €227,889.40.Second resolutionApproval of the consolidated f inancial statementsfor the year ended 31 December <strong>2010</strong>Having considered the reports of the Board of Directors and theStatutory Auditors, the shareholders approve the consolidated financialstatements for the year ended 31 December <strong>2010</strong> as presented,showing net profit attributable to equity holders of the parent of€549,788 thousand.Third resolutionAppropriation of net profit and dividendHaving considered the report of the Board of Directors, the shareholders resolve to appropriate profit for the year ended 31 December <strong>2010</strong>as follows, having noted that there is no need for a transfer to the legal reserve:Net profit for the year €371,661,581.13Retained earnings brought forward from 2009 (+) €2,466,738,518.33Profit available for distribution (=) €2,838,400,099.46Dividend (-) €307,659,439.14TRANSFER TO RETAINED EARNINGS (=) €2,530,740,660.32Each share will receive a dividend of 2.78 payable on 21 April 2011.Private shareholders who are French tax residents will be entitledto claim 40% tax relief on their dividends, in accordance withArticle 158-3-2 of the French Tax Code (Code général des impôts).They may alternatively elect for liability to the flat rate withholdingtax.<strong>Casino</strong> shares held by the Company on the dividend payment date donot qualify for a dividend and the corresponding sums will thereforebe transferred to retained earnings.Dividends and corresponding tax credits for the past three years were as follows:YearClass of sharesNumber ofsharesDividendper shareDividend eligiblefor 40% tax reliefDividend not eligiblefor 40% tax relief2007 • Ordinary shares96,992,416 (1) €2.30 €2.30 -• Preferred non-voting shares15,124,256 (1) €2.34 €2.34 -2008 • Ordinary shares97,769,191 (2) €5.17875 (3) €5.17875 -• Preferred non-voting shares14,589,469 (2) €5.21875 (3) €5.21875 -2009 • Ordinary shares110,360,987 (4) €2.65 €2.65 -(1) Including 318,989 ordinary shares and 50,091 preferred non-voting shares held by the Company.(2) Including 250,730 ordinary shares and 411 preferred non-voting shares held by the Company.(3) At the Annual General Meeting of 19 May 2009, the shareholders voted to distribute a cash dividend of €2.53 per ordinary share and €2.57 per preferred non-voting share, plus an additionaldividend in the form of Mercialys shares on the basis of one Mercialys share for eight ordinary or preferred non-voting <strong>Casino</strong> shares. The per share value of the Mercialys stock dividend isequal to 1/8th of the Mercialys share price on 2 June 2009, i.e. €2.64875.(4) Including 85,996 held by the Company.210 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGProposed resolutions6Fourth resolutionRelated-party agreement: revision ofthe intercompany loan agreement with <strong>Mo</strong>noprixHaving considered the Statutory Auditors’ report on agreementsgoverned by article L. 225-38 of the French Commercial Code(Code de commerce), the shareholders approve the revised marginof 0.40% over the reference Euribor rate applicable to short-termintercompany loans between <strong>Mo</strong>noprix and its two shareholders,<strong>Casino</strong>, Guichard-Perrachon and Galeries Lafayette.Fifth resolutionAuthorisation to implementa share buyback programmeHaving considered the Board of Directors’ report, the shareholdersauthorise the Board to buy back the Company’s shares in accordancewith the provisions of articles L. 225-209 et seq. of the FrenchCommercial Code (Code de commerce), notably for the followingpurposes:■■■■■■to maintain a liquid market in the Company’s shares through marketmakingtransactions carried out by an independent investmentservices provider acting on the Company’s behalf under a liquiditycontract that complies with a code of ethics approved by theAutorité des marchés financiers;to allocate shares (i) on exercise of stock options granted by theCompany pursuant to articles L. 225-177 et seq. of the FrenchCommercial Code (Code de commerce), (ii) under an employeestock ownership plan governed by articles L. 3332-1 et seq. ofthe French Labour Code (Code du travail) or (iii) in connectionwith share grants governed by articles L. 225-197-1 et seq. of theFrench Commercial Code (Code de commerce);to allot shares upon exercise of rights attached to securitiesredeemable, convertible, exchangeable or otherwise exercisablefor shares;to keep shares for subsequent delivery in payment or exchange forshares of another company in accordance with market practicesapproved by the French securities regulator (Autorité des marchésfinanciers);to reduce the share capital by cancelling shares, in order to increaseearnings per share;to implement any other market practices authorised in the futureby the French securities regulator (Autorité des marchés financiers)and, generally, to carry out any transaction allowed under currentlegislation.The shares may be purchased, sold, transferred or exchanged by anymethod, including through block trades or other transactions carriedout on the regulated market or over-the counter. The authorisedmethods include the use of any derivative financial instruments tradedon the regulated market or over-the-counter and of option strategies,on the basis authorised by the competent securities regulators,provided that the use of such instruments does not significantlyincrease the shares’ volatility. The shares may also be used for stocklending transactions in accordance with articles L. 211-22 et seq. of theFrench <strong>Mo</strong>netary and Financial Code (Code monétaire et financier).The maximum authorised purchase price is one hundred Euros(€100) per share.The use of this authorisation may not have the effect of increasingthe number of shares held in treasury to more than 10% of the totalnumber of shares outstanding. Based on the number of sharesoutstanding of 31 January 2011, less the 134,507 shares held intreasury at that date, and assuming that the shares held in treasuryare not cancelled or sold, the maximum limit is 10,932,615 shares.The maximum amount that may be invested in the share buybackprogramme is therefore €1,093.26 million. Where treasury shares havebeen purchased under a liquidity contract, the number of treasuryshares taken into account to calculate the 10% maximum limit referredto above corresponds to the number of shares purchased less thenumber of shares resold under the liquidity contract during the periodof the authorisation.This authorisation is given for a period of eighteenth months. It cancelsand supersedes the authorisation given in the fifth resolution at theAnnual General Meeting of 29 April <strong>2010</strong>.The Company may use this resolution and continue its share buybackprogramme even in the event of a public offer for the Company’s sharesor other securities or a public offer initiated by the Company.The shareholders accordingly give full powers to the Board of Directorsto place any and all buy and sell orders, enter into any and all contractsnotably for the keeping of registers of share purchases and sales,make any and all filings with the Autorité des marchés financiers,carry out all other formalities, and generally do everything necessary.These powers may be delegated by the Board.Sixth resolutionRatification of the co-optationof Foncière Euris as directorThe shareholders ratify the Board’s co-optation on 29 April <strong>2010</strong> ofFoncière Euris as director to replace Omnium de Commerce et deParticipations for the remainder of its term, which ends at the AnnualGeneral Meeting to be held in 2012 to approve the financial statementsfor the year ended 31 December 2011.Seventh resolutionRatification of the appointmentof Mrs Catherine Lucet as directorThe shareholders ratify the Board’s co-optation on 28 February 2011of Mrs Catherine Lucet as director to replace Jean-Dominique Comollifor the remainder of his term, which ends at the Annual GeneralMeeting to be held in 2012 to approve the financial statements forthe year ended 31 December 2011.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group211
6GENERAL MEETINGProposed resolutions6.3.2. EXTRAORDINARY RESOLUTIONSEighth resolutionAmendment of Article 16-I and 16-III ofthe by-laws on the renewal of directors by rotationHaving considered the report of the Board of Directors, theshareholders resolve to amend Articles 16-I and 16-III of the by-lawsaccordingly, as follows:“Article 16 – Duration of office - Age limit - ReplacementI. . Except for the effect of paragraphs II and III (two last paragraphs)of this article, the duration of the offices of the directors is threeyears expiring at the end of the meeting of the Ordinary GeneralMeeting of shareholders ruling on the accounts of the past yearand held in the year during which the office expires.Directors at the end of their office are re-eligible.Directors are appointed or renewed in their offices by the OrdinaryGeneral Meeting of shareholders.Directors have their terms of office renewed in rotation so that thedirectors are regularly renewed in proportions that are as equalas possible. In order to enable the system of rotation to operate,the Ordinary General Meeting can appoint a director for a periodof one or two years, on an exceptional basis.(…)III. In case of vacancy by death or resignation of one or more seatsof directors, the Board of Directors may, between two GeneralMeetings, appoint persons provisionally. These appointments aresubject to ratification of the next General Meeting.Should the appointment of a director made by the board not beratified by the meeting, the acts carried out by this director and thedecisions made by the board during the provisional management,are still valid.Should the number of directors become less than three, theremaining members (or in case of shortage representativeappointed at the request of any person concerned by the presidentof the commercial court) must convene immediately an OrdinaryGeneral Meeting of shareholders with a view to appointing oneor more new directors in order to complete the board until thelegal minimum.The director appointed in replacement of another directoronly remains in office the time remaining on the office of hispredecessor.The appointment of a new member of the board adding to themembers in office may be decided only by the General Meetingwhich fixes the duration of the office.”Ninth resolutionAmendment to Article 16-II ofthe by-laws on the age limit for directorsHaving considered the report of the Board of Directors, the shareholdersresolve to amend Article 16-II of the by-laws as follows:“Article 16 – Duration of office - Age limit - Replacement(…)II. No person over the age of seventy (70) may be elected as directoror permanent representative of a corporate director if suchelection would cause the number of directors and permanentrepresentatives of corporate directors over that age to be morethan one third of the total. In the event of exceeding of theproportion, the oldest director or permanent representative isdeemed resigning automatically at the end of the annual OrdinaryGeneral Meeting ruling on the accounts of the year during whichthe age limit was exceeded.(…)”Tenth resolutionAmendment to Articles 25-II, 25-IV, 27-Iand 28-III of the by-laws on participationin and notice of General MeetingsHaving considered the report of the Board of Directors, theshareholders resolve to amend Articles 25-II, 25-IV, 27-I and 28-III ofthe by-laws as follows:“Article 25 – Setting up of the General Meetings(…)II. Shareholders may appoint a proxy to represent them in accordancewith the provisions of the law.Minors and incompetent persons are represented by theirguardians and trustees, without the latter needing to beshareholders in person. A legal entity is validly represented byany legal representative having capacity or by a person speciallyempowered for that purpose.The owner of shares whose domicile is not in France may berepresented by the middleman properly registered as owner ofthese shares on behalf of the latter.(…)212 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGProposed resolutions6IV. Shareholders may, if the board decides it, take part in the meetingsand vote by videoconference or by any telecommunication andremote transmission means, including the Internet, allowing theiridentification in the conditions of the regulations in force and thosedecided by the board.By decision of the Board of directors, shareholders may make outtheir distance vote forms or by proxy on an electronic medium,in the conditions fixed by the regulations then in force. Thecapture and signature of the forms may be directly made on theInternet site set up by the centralizing establishment in chargeof the General Meeting. The electronic signature of the formmay be made by any process in conformity with the provisionsof the first sentence of the second paragraph of article 1316-4of the Civil Code, or any subsequent legal provisions whichwould substitute for it, such as the use of an identifying codeand a passwordThe electronic vote and the acknowledgementof receipt will be considered as an irrevocable written documentbinding on everyone, except in the event of the sale of sharesnotified on the terms and conditions set out in the second indentof Article R. 225-85 IV of the French Commercial Code (Codede commerce) or any other future provision of the law that mightreplace it.The electronic proxy form and the acknowledgement of receiptwill be considered as a revocable written document binding oneveryone under the conditions set out by law.”“Article 27 – Notifi cation to attend –Place of meeting – AgendaI. General Meetings is convened by the Board of Directors, or, inthe event of shortage, by the auditors or even by a representativedesignated by the president of the commercial court ruling inurgent matters, at the request either of one or more shareholdersgathering one fifth at least of the authorized capital, or anassociation of shareholders in the conditions provided for byarticle L. 225-120 of the Commercial Code.The notification to attend is sent fifteen days at least in advanceat the first convening and ten days at least in advance for thefollowing meeting, by way of an ad inserted in a magazineempowered to receive legal announcements in the “département”of the registered office and in the Bulletin des Annonces LégalesObligatoires.Shareholders owning registered shares for one month at least onthe date of these notices are convened by ordinary letter or byany electronic communication means.The notification to attend is preceded by a notice containing theindications provide for by law and inserted in the Bulletin desAnnonces Légales Obligatoires thirty five days at least before themeeting(…)”“Article 28 – Committee – Attendance sheet –Votes – Vote by post – Minutes(…)III. Any shareholder has as many votes as he owns shares orrepresents them without any limitation, with the sole exceptionof the cases provided for by law. However, a double right to voteis given, in legal conditions, to all shares fully paid up for which isjustified a registered registration for four years at least, in the nameof a same shareholder, as well as, in case of capital increase byincorporation of reserves, profits or issue premiums, to registeredshares granted free of charge to a shareholder on account of oldshares for which it has this right.The list of registered shares with double right to vote is settledby the Board of Directors.The double right to vote thus given to registered shares fully paidup ceases ipso jure, for any share that was converted into abearer share or transfer in ownership, except, in case of transferof from registered to registered, by enforcement of the provisionsof article L. 225-124 of the Commercial Code. For any power ofattorney of a shareholder without indication of a representative,the chairman of the General Meeting issues a favourable vote forthe adoption of draft resolutions presented or approved by theBoard of Directors and an unfavourable vote for the adoption ofany other draft resolutions. To issue any other vote, the shareholdermust choose a proxy who accepts to vote in the sense indicatedby the principal.Votes are expressed by a show of hands, by e-mail or by anytelecommunication means allowing the identification of theshareholders in the conditions of the regulations in force. TheGeneral Meeting may also decide the secret vote upon propositionof the committeeShareholders may also vote by post, in legal conditions.The vote or proxy issued by a middleman who, either has notdeclared himself as registered middleman, holder of securitieson behalf of third parties not domiciled in France, or has notdisclosed the identity of the owners of the shares for which he isregistered, in accordance with the regulations in force, shall notbe taken into account(…)”Eleventh resolutionAuthorisation to reduce the capitalby cancelling treasury sharesHaving considered the reports of the Board of Directors and theStatutory Auditors, the shareholders resolve to authorise the Boardof Directors, in accordance with the provisions of Article L. 225-209of the French Commercial Code (Code de commerce), to reduce theshare capital at any time, on one or more occasions, up to a maximumof 10% of the share capital existing on the date of cancellation (that isadjusted for capital transactions after this resolution is passed) withina period of twenty-four months, by cancelling shares purchased bythe Company under an authorisation granted by ordinary resolutionof the shareholders.The shareholders give full powers to the Board of Directors to use thisauthorisation within the above limits and, in particular, to place theshare cancellations on record and deduct the difference between thepurchase price of the shares and their par value from the reserve orshare premium account of its choice, amend the by-laws accordinglyand fulfil all and any formalities.This authorisation is given for a period of twenty-six months as ofthe date of this meeting. It cancels and supersedes the authorisationgiven under the thirty-ninth resolution passed at the Annual GeneralMeeting of 19 May 2009.The Board of Directors shall accordingly take all necessary measuresand fulfil all legal and statutory formalities related to the sharecancellations and, in particular, amend the by-laws after eachcancellation to reflect the new capital.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group213
6GENERAL MEETINGProposed resolutionsTwelfth resolutionAuthorisation given to the Board of Directorsto issue, with pre-emptive rights, shares or securitiescarrying rights to new or existing shares ofthe Company or existing shares of any companyin which it directly or indirectly owns more than50% of the share capital, or securities carrying rightsto debt securitiesHaving considered the report of the Board of Directors and theStatutory Auditors’ special report and noted that the Company’sshare capital is fully paid up, in accordance with articles L. 225-127,L. 225-129, L. 225-129-2, L. 228-91, L. 228-92, L. 228-93 et seq. ofthe French Commercial Code (Code de commerce), the shareholdershereby resolve to authorise the Board of Directors and, by delegation,the Chief Executive Officer or, with the latter’s agreement, one orseveral Chief Operating Officers, to issue with pre-emptive rightsshares or securities carrying immediate or deferred rights to shares,debt securities or existing shares of the Company or existing sharesof any company in which it directly or indirectly holds more than 50%of the share capital. The authorisation may be used on one or severaloccasions to carry out issues in France or abroad. The timing andamounts of such issues shall be determined by the Board. The rights toshares may be exercisable, at Company’s discretion for new or existingshares or a combination of new and existing shares. The subscriptionprice may be paid in cash or settled by capitalising debt.The securities carrying immediate or deferred rights to shares, debtsecurities or existing shares of a company in which the Companydirectly or indirectly holds more than 50% of the share capital mayconsist of debt securities or be attached to debt securities or permitthe issue of debt securities as intermediate securities. They maytake the form of dated or undated, subordinated or unsubordinatednotes, denominated in euros, in foreign currency or in monetary unitsbased on a basket of currencies. Issues of warrants to subscribe forshares of the Company may be made for consideration or by way ofallotment for no consideration to the holders of existing shares. TheBoard of Directors shall have the right to decide that any fractionalallotment rights will not be negotiable and that the correspondingsecurities will be sold.The aggregate par value of shares issued pursuant to this authorisationshall not exceed eighty (80) million euros and the aggregate parvalue of debt securities shall not exceed two (2) billion euros (or theequivalent in foreign currency or in monetary units based on a basketof currencies).The Board of Directors shall be authorised to increase the capitalby a maximum of eighty (80) million euros to enable holders ofsecurities to exercise their rights to new <strong>Casino</strong> shares. This ceilingdoes not include the par value of any additional shares to be issuedto protect the right of holders of securities carrying rights to shares,in accordance with the law.The aggregate par value of debt securities that may be issued in thefuture shall not exceed two (2) billion euros or the equivalent in foreigncurrency or in monetary units based on a basket of currencies, notincluding the amount of any redemption premium.As allowed by law, in the case of an issue or allotment of newshares, the Board may, at its discretion, grant existing shareholdersa pre-emptive right to subscribe for any shares not taken up byother shareholders pursuant to their pre-emptive rights. If theissue is oversubscribed, these rights will be exercisable pro rata toeach participating shareholder’s existing interest in the Company’scapital.If the issue is not taken up in full by shareholders exercising theirpre-emptive rights as provided for above, the Board may limit theamount of the issue to the subscriptions received, provided that atleast three-quarters of the issue has been taken up.In addition, if the issue is not taken up in full by shareholders exercisingtheir pre-emptive rights as provided for above, the Board may allocateall or some of the unsubscribed shares or securities as it deemsappropriate and/or offer all or some of the unsubscribed securitiesto the public.In the case of an allotment of new shares to holders of securities withrights to shares, this authorisation will automatically entail the waiverby shareholders of their pre-emptive right to subscribe for the sharesto be issued on exercise of the rights attached to the securities.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Within the limits set by shareholders and those prescribed by law, theBoard of Directors shall have full powers to decide the issue or issues,set the issue terms, conditions and characteristics – including the issueprice of the shares and other securities to be issued, which may ormay not include a premium, and the dividend entitlement date of thenew shares, which may be retrospective – set the method of payingfor the shares or securities carrying immediate or deferred rights toshares, place on record the resulting capital increases, deduct theissue expenses from the premium, amend the by-laws to reflect thenew capital and where applicable apply for the shares or securitiesissued to be admitted to trading on a regulated market.Specifically, the Board of Directors shall have full powers to:■■■■■■decide the amount of any immediate or deferred issue of debtsecurities, the term of the securities, the currency of issue, anysubordination clauses, the fixed, variable zero coupon, indexed orother interest rate and its payment date, terms for rolling up interest,the fixed or variable redemption price, which may or may not includea premium, the repayment terms based on market conditions andthe terms and conditions of the rights to shares attached to thesecurities and any other terms and conditions of issue, includingconferring guarantees or collateral;amend, during the life of the securities concerned, the terms andconditions of the securities issued or to be issued in accordancewith the applicable formalities;take any and all measures to protect the rights of holders of rightsand securities convertible, exchangeable, redeemable or otherwiseexercisable for shares;suspend, if necessary, exercise of the rights attached to thesecurities for a period determined in accordance with the provisionsof the law and regulations;decide the characteristics of the securities carrying rights to debtsecurities, the type of debt securities covered by the rights, theirnominal value and interest accrual date, their issue price, whichmay or may not include a premium, their fixed and/or variableinterest rate, the interest payment date or, in the case of variablerate securities, the method of determining the interest rate, andany interest capitalisation terms;sign any and all agreements, in particular with any banks, take anyand all measures, and carry out any and all formalities to properlycomplete any issue decided pursuant to this authorisation.214 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGProposed resolutions6Thirteenth resolutionAuthorisation given to the Board of Directorsto issue, without pre-emptive rights, sharesor securities carrying rights to new or existingshares of the Company or existing shares of anycompany in which it directly or indirectly ownsmore than 50% of the share capital, or carryingrights to debt securitiesHaving considered the report of the Board of Directors and theStatutory Auditors’ special report and noted that the Company’sshare capital is fully paid up, in accordance with articles L. 225-127,L. 225-129, L. 225-129-2, L. 225-135, L. 225-136, L. 228-91,L. 228-92, L. 228-93 et seq. of the French Commercial Code (Codede commerce), the shareholders hereby resolve to authorise the Boardof Directors and, by delegation, the Chief Executive Officer or, with thelatter’s agreement, one or several Chief Operating Officers, to makepublic offers of shares or securities carrying immediate or deferredrights to shares, debt securities or existing shares of the Company orexisting shares of any company in which it directly or indirectly holdsmore than 50% of the share capital. The authorisation may be usedon one or several occasions to make public offers in France or abroad.The timing and amounts of such issues shall be determined by theBoard. The rights to shares may be exercisable for new or existingshares or a combination of new and existing shares. The subscriptionprice may be paid in cash or settled by capitalising debt.The securities carrying immediate or deferred rights to shares, debtsecurities or existing shares of a company in which the Companydirectly or indirectly holds more than 50% of the share capital mayconsist of debt securities or be attached to debt securities or permitthe issue of debt securities as intermediate securities. They may takethe form of dated or undated, subordinated or unsubordinated notes,denominated in Euros, in foreign currency or in monetary units basedon a basket of currencies.The aggregate par value of shares issued pursuant to this authorisationshall not exceed forty (40) million euros and the aggregate parvalue of debt securities shall not exceed two (2) billion euros (or theequivalent in foreign currency or in monetary units based on a basketof currencies).The Board of Directors shall be authorised to increase the capital bya maximum of forty (40) million euros to enable holders of securitiesto exercise their rights to new <strong>Casino</strong> shares.The aggregate par value of securities carrying rights to debt securitiesshall not exceed two (2) billion euros or the equivalent in foreigncurrency or in monetary units based on a basket of currencies, notincluding the amount of any redemption premium.The shareholders waive their pre-emptive rights over the shares andsecurities carrying rights to shares. However, the Board of Directorsmay, at its discretion, grant shareholders a priority right to subscribefor the securities pro rata to their existing interest in the Company’scapital and/or a priority right to subscribe for any securities not takenup by the other shareholders. The Board of Directors is authorisedto set the terms and conditions of such priority right in accordancewith the provisions of the law and applicable regulations. Any shareswhich are not taken up under the priority right may be offered to thepublic in France, abroad or on the international market.In the case of a public exchange offer decided by the Company for itsown securities, the Board of Directors shall be authorised to deliver inexchange the securities referred to in article L. 228-91 of the FrenchCommercial Code that are issued pursuant to this authorisation.In the case of an allotment of new shares to holders of securities withrights to shares, this authorisation will automatically entail the waiverby shareholders of their pre-emptive right to subscribe for the sharesto be issued on exercise of the rights attached to the securities.The issue price of shares shall be set by the Board of Directors at anamount at least equal to the minimum required by law on the date ofissue, which is currently the weighted average price of <strong>Casino</strong> shareson Euronext Paris for the three trading days that precede the issuepricing date, with a maximum discount of 5%, and where applicableafter adjustment of the average weighted price in the case of a differentdividend entitlement date.The issue price of securities carrying rights to shares, taking accountof the amount of the share entitlement, shall be set such that the sumreceived immediately by the Company, plus any amounts that mightsubsequently be received, shall, for each share issued on exerciseof the rights attached to the securities, be at least equal to the issueprice defined in the preceding paragraph.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Within the limits set by shareholders and those prescribed by law, theBoard of Directors shall have full powers to decide the issue or issues,set the issue terms, conditions and characteristics – including the issueprice of the shares and other securities to be issued, which may ormay not include a premium, and the dividend entitlement date of thenew shares, which may be retrospective – set the method of payingfor the shares or securities carrying immediate or deferred rights toshares, place on record the resulting capital increases, deduct theissue expenses from the premium, amend the by-laws to reflect thenew capital and where applicable apply for the shares or securitiesissued to be admitted to trading on a regulated market.Specifically, the Board of Directors shall have full powers to:■■■■■■decide the amount of any immediate or deferred issue of debtsecurities, the term of the securities, the currency of issue, anysubordination clauses, the fixed, variable zero coupon, indexed orother interest rate and its payment date, terms for rolling up interest,the fixed or variable redemption price, which may or may not includea premium, the repayment terms based on market conditions andthe conditions of the rights to shares attached to the securitiesand any other terms and conditions of issue, including conferringguarantees or collateral;amend, during the life of the securities concerned, the terms andconditions of the securities issued or to be issued in accordancewith the applicable formalities;take any and all measures to protect the rights of holders of rightsand securities convertible, exchangeable, redeemable or otherwiseexercisable for shares;suspend, if necessary, exercise of the rights attached to thesecurities for a period determined in accordance with the provisionsof the law and regulations;decide the characteristics of the securities carrying rights to debtsecurities, the type of debt securities covered by the rights, theirnominal value and interest accrual date, their issue price, whichmay or may not include a premium, their fixed and/or variableinterest rate, the interest payment date or, in the case of variablerate securities, the method of determining the interest rate, andany interest capitalisation terms;sign any and all agreements, in particular with any banks, take anyand all measures, and carry out any and all formalities to properlycomplete any issue decided pursuant to this authorisation.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group215
6GENERAL MEETINGProposed resolutionsFourteenth resolutionAuthorisation to be given to the Board of Directorsto issue shares and securities with rights to new orexisting shares of the Company or to debt securities,without pre-emptive rights, by way of placementwith the persons referred to in Article L. 411-2-IIof the French <strong>Mo</strong>netary and Financial Code(Code monétaire et f inancier)Having considered the report of the Board of Directors and theStatutory Auditors’ special report and in accordance with articlesL. 225-129, L. 225-135 and L. 225-136 of the French CommercialCode (Code de commerce), the shareholders authorise the Board ofDirectors and, by delegation, the Chief Executive Officer or, with thelatter’s agreement, one or several Chief Operating Officers, to issue,without pre-emptive subscription rights for existing shareholders,shares or securities carrying immediate or deferred rights to shares,debt securities or existing shares of the Company or existing sharesof any company in which it directly or indirectly holds more than 50%of the share capital by way of placement with the persons referredto in article L. 411-2-II of the French <strong>Mo</strong>netary and Financial Code(Code monétaire et financier). The authorisation may be used on oneor several occasions to carry out issues in France or abroad, eitherin Euros or in foreign currency. The timing and amounts of suchissues shall be determined by the Board. The rights to shares maybe exercisable for new or existing shares or a combination of both,at Board’s discretion. The subscription price may be paid in cash orsettled by capitalising debt.The shareholders resolve as follows:■■■■■■The securities carrying immediate or deferred rights to shares,debt securities of the Company or existing shares of a company inwhich the Company directly or indirectly holds more than 50% ofthe share capital may consist of debt securities or be attached todebt securities or permit the issue of debt securities as intermediatesecurities. They may take the form of dated or undated, subordinatedor unsubordinated notes, denominated in euros, in foreign currencyor in monetary units based on a basket of currencies.The shareholders waive their pre-emptive rights over the sharesand securities carrying immediate or deferred rights to shares infavour of the persons referred to in article L. 411-2-II of the French<strong>Mo</strong>netary and Financial Code (Code monétaire et financier).In the case of an allotment of new shares to holders of securitieswith rights to shares, this authorisation will automatically entail thewaiver by shareholders of their pre-emptive right to subscribe forthe shares to be issued on exercise of the rights attached to thesecurities.The issues carried out pursuant to this authorisation shall not resultin the Company’s share capital being increased by more than 10%per year. This limit shall be assessed at the issue date excludingthe par value of any shares to be issued at a later date on exerciseof all existing deferred rights.The issue price of shares shall be set by the Board of Directors at anamount at least equal to the minimum required by law on the dateof issue, which is currently the weighted average price of <strong>Casino</strong>shares on Euronext Paris for the three trading days that precedethe issue pricing date, with a maximum discount of 5%, and whereapplicable after adjustment of the average weighted price in thecase of a different dividend entitlement date.The issue price of securities carrying rights to shares, taking accountof the amount of the share entitlement, shall be set such that thesum received immediately by the Company, plus any amounts that■might subsequently be received, shall, for each share issued onexercise of the rights attached to the securities, be at least equalto the issue price defined in the preceding paragraph.This authorisation is given for a period of twenty-six months fromthe date of this Meeting. It cancels and supersedes all earliershareholder authorisations for the same purpose.The Board of Directors and, by delegation, the Chief ExecutiveOfficer, shall have full powers, within the limits set by the shareholdersand in accordance with the law, to use this authorisation and morespecifically to:■■■■■decide on the issue or issues to be made;set the terms and conditions, type and characteristics (including theissue price which may be with or without a premium) of the sharesor other securities to be issued and set the dividend entitlementdate, which may be retrospective;determine the persons referred to in article L. 411-2-II of the French<strong>Mo</strong>netary and Financial Code (Code monétaire et financier) withwhom the shares or securities will be placed;place on record the resulting capital increase or increases andamend the by-laws accordingly;deduct the issue expenses from the issue premium if any.<strong>Mo</strong>re generally, the Board of Directors and, by delegation, the ChiefExecutive Officer shall have all the powers set out in the final twoparagraphs of the twelfth resolution.Fifteenth resolutionAuthorisation given to the Board of Directors to fixthe price of issues without pre-emptive subscriptionrights on the basis decided by shareholders, pursuantto article L. 225-136 of the French Commercial CodeHaving considered the report of the Board of Directors and theStatutory Auditors’ special report, the shareholders resolve, inaccordance with article L. 225-136 of the French Commercial Code(Code de commerce), to authorise the Board of Directors, and, bydelegation, the Chief Executive Officer or, with the latter’s agreement,one or several Chief Operating Officers, to set the price of an issuecarried out pursuant to the thirteenth and fourteenth resolutions of thisMeeting on the following basis, as an exception to article L. 225-136paragraph 1 of the Code:■■The issue price shall be equal to the weighted average price of<strong>Casino</strong> shares for the ten trading days that precede the issuepricing date, with a maximum discount of 5%.The issue price of securities carrying rights to shares, taking accountof the amount of the share entitlement, shall be set such that thesum received immediately by the Company, plus any amounts thatmight subsequently be received, shall, for each share issued onexercise of the rights attached to the securities, be at least equalto the issue price defined in the preceding paragraph.The issues carried out pursuant to this authorisation shall not resultin the Company’s share capital being increased by more than 10%per year. This limit shall be assessed at the issue date and shall notinclude the par value of any shares to be issued at a later date onexercise of all existing deferred rights but including the impact of anycapital transactions carried out after the date of this Meeting.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.216 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGProposed resolutions6Sixteenth resolutionAuthorisation given to the Board of Directorsto increase the amount of any oversubscribed issueswith or without pre-emptive rightsHaving considered the reports of the Board of Directors and theStatutory Auditors, the shareholders resolve, in accordance with articleL. 225-135-1 of the French Commercial Code (Code de commerce),to authorise the Board of Directors, and, by delegation, the ChiefExecutive Officer or, with the latter’s agreement, one or several ChiefOperating Officers, to increase the amount of shares or securities issueinitially pursuant to the twelfth, thirteenth and fourteenth resolutions ofthis Meeting, within the limits set in the twelfth, thirteenth and fourteenthresolutions and the blanket limit set in the twentieth resolution. Theadditional shares or securities shall be offered at the same price as theoriginal issue, in accordance with article L. 225-135-1 of the FrenchCommercial Code (Code de commerce).This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Seventeenth resolutionAuthorisation given to the Board of Directorsto issue bonus shares to be paid up by capitalisingreserves, profits, additional paid-in capitalor other capitalisable sumsHaving considered the report of the Board of Directors, theshareholders resolve, in accordance with articles L. 225-129 andL. 225-30 of the French Commercial Code (Code de commerce),to authorise the Board of Directors, and, by delegation, the ChiefExecutive Officer or, with the latter’s agreement, one or several ChiefOperating Officers, to increase the capital by capitalising reserves,profits, additional paid-in capital or other capitalisable sums andissuing bonus shares and/or raising the par value of existing shares.The timing and amounts of such transactions shall be determined atthe Board’s discretion.The amount by which the capital may be increased pursuant to thisauthorisation shall not exceed eighty (80) million euros, not includingthe amount necessary to protect the rights of holders of securitiescarrying rights to shares in accordance with the law.The Board of Directors shall have full powers to implement thisauthorisation and specifically to:■■■■decide all the terms and conditions of the authorised transactions,including the amount and origin of the capitalised sums, the numberof new shares to be issued and/or the amount by which the parvalue of existing shares is to be increased, and the date – whichmay be retrospective – from which the new shares will carry dividendrights or the increase in the par value will come into effect;take any and all measures to protect the rights of holders ofsecurities carrying rights to shares that are outstanding on the dateof the capital increase;decide the treatment of rights to fractions of shares. In particular,the Board may decide that these rights will not be transferable ortradable and that the corresponding shares will be sold, with thesale proceeds allocated among the rights holders within 30 daysof the date when the whole number of shares allotted to them isrecorded in their securities account;place on record the capital increase, amend the by-laws to reflectthe new capital, apply for the shares to be admitted for tradingon a regulated market and carry out any and all publicationformalities;■generally, take any and all measures and carry out any and allformalities required for the capital increase to become effective.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Eighteenth resolutionAuthorisation given to the Board of Directorsto issue, without pre-emptive rights, sharesor securities with rights to shares in the eventof a public exchange offer initiated by <strong>Casino</strong>,Guichard-Perrachon for the shares or othersecurities of another listed companyHaving considered the report of the Board of Directors and theStatutory Auditors’ special report, the shareholders resolve toauthorise the Board of Directors, and, by delegation, the ChiefExecutive Officer or, with the latter’s agreement, one or several ChiefOperating Officers, to issue shares or securities with immediate ordeferred rights to the share capital of the Company in payment forthe shares or other securities of another company (the “target”) listedon one of the regulated markets referred to in article L. 225-148 ofthe French Commercial Code (Code de commerce) tendered to apublic exchange offer, mixed cash and exchange offer or cash offerwith an exchange alternative initiated by the Company.The shareholders further resolve to waive their pre-emptive right tosubscribe for the new shares or the securities with rights to the newshares or debt securities to be issued pursuant to this authorisation,in favour of the holders of shares or other securities of the target.The aggregate par value of shares issued pursuant to this authorisationshall not exceed eighty (80) million euros and the aggregate parvalue of debt securities shall not exceed two (2) billion euros (or theequivalent in foreign currency or in monetary units based on a basketof currencies).The Board of Directors shall be authorised to increase the capital bya maximum of eighty (80) million euros to enable holders of securitiesto exercise their rights to new <strong>Casino</strong> shares.The shareholders note that the issue of securities with rights toshares will automatically entail the waiver of their pre-emptive rightto subscribe for the shares to be issued on exercise of the rightsattached to the securities.The Board of Directors shall have full powers to initiate the public offersreferred to in this resolution, to set the exchange ratio and any balancepayable in cash, to place on record the number of securities tenderedto the offer, to set the terms and conditions, type and characteristicsof the shares or other securities to be delivered in exchange, torecognise any share premium in equity, to deduct all transaction costsand expenses from the premium, to complete all and any formalitiesand declarations and request all and any authorisations required forthe proper execution of the transactions carried out pursuant to thisauthorisation and, more generally, do all things necessary.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group217
6GENERAL MEETINGProposed resolutionsNineteenth resolutionAuthorisation to issue shares or securities carryingrights to shares, representing up to 10% of theCompany’s issued capital, in payment for sharesor securities carrying rights to shares of anothercompanyHaving considered the reports of the Board of Directors and theStatutory Auditors, the shareholders resolve, pursuant to articleL. 225-147 of the French Commercial Code (Code de commerce),to authorise the Board of Directors, and, by delegation, the ChiefExecutive Officer or, with the latter’s agreement, one or several ChiefOperating Officers, to issue shares or securities with rights to sharesin payment for the shares or other securities of another company(the “target”) in a transaction not covered by article L. 225-148 ofthe French Commercial Code (Code de commerce). The amount ofany such issue will be determined based on the values specified inthe report issued by the merger auditor appointed pursuant to thefirst and second paragraphs of said article L. 225-147, provided thatthe issue does not result in the capital being increased by more than10%. Existing shareholders shall insofar as necessary waive theirpre-emptive right to subscribe for the shares or other securities tobe issued, in favour of the holders of the shares or other securitiesof the target.The shareholders note that this authorisation automatically entailsthe waiver of their pre-emptive right to subscribe for the <strong>Casino</strong>shares to be issued on exercise of the rights attached to securitiesissued pursuant to this authorisation, in favour of the holders of saidrights.The Board of Directors shall have full powers to use this authorisationand specifically to determine, based on the report of the mergerauditor appointed pursuant to the first and second paragraphs ofsaid article L. 225-147, the value of the acquired shares or othersecurities of the target, as well as any specific benefits to be grantedand the value thereof (including reducing the valuation of the sharestendered or specific benefits if the tendering shareholders agree), toset the terms and conditions, type and characteristics of the shares orother securities to be issued, to place on record the capital increaseor increases, to amend the by-laws to reflect the new capital, to carryout any and all filing and other formalities, to obtain any authorisationsthat are necessary to complete the acquisition, and generally to doeverything necessary.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Twentieth resolutionBlanket ceiling on f inancial authorisationsgiven to the Board of DirectorsHaving considered the report of the Board of Directors, and subject topassing the twelfth to nineteenth resolutions above, the shareholdersresolve as follows:■■The aggregate par value of any immediate and/or future debtsecurities issued pursuant to these resolutions, not including anyredemption premium, may not exceed two (2) billion euros or theequivalent in foreign currency or in monetary units based on abasket of currencies.The aggregate par value of any immediate and/or future capitalincreases made pursuant to these resolutions may not exceedeighty (80) million euros, not including the par value of any additionalshares to be issued to protect the rights of holders of securitiescarrying rights to shares in accordance with the law.The aggregate ceiling of eighty (80) million euros on share issues shallnot include the par value of shares:■■■■to be issued upon exercise of stock options granted to employeesand officers;to be allotted to employees and officers in the form of stockgrants;to be allotted to employees who are members of the Companycorporate savings plan, in accordance with the twenty-fifthresolution;to be allotted to shareholders in the form of stock dividends.Twenty-first resolutionAuthorisation of the issue by any company that holdsmore than 50% of the Company’s capital of securitiescarrying rights to existing <strong>Casino</strong> sharesHaving considered the report of the Board of Directors and theStatutory Auditors’ special report, in accordance with the provisionsof articles L. 228-91 et seq. of the French Commercial Code (Codede commerce), the shareholders resolve to authorise the Companyor any company that directly or indirectly holds more than half of theCompany’s capital to issue securities carrying immediate or deferredrights to existing <strong>Casino</strong> shares.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Twenty-second resolutionAuthorisation to grant stock options exercisablefor existing shares to employees and officersof the Company or related companiesHaving considered the reports of the Board of Directors and theStatutory Auditors, the shareholders authorise the Board of Directors togrant stock options on shares bought back by the Company pursuantto the law, to employees and officers of the Company or the companiesor intercompany partnerships referred to in article L. 225-180 of theFrench Commercial Code (Code de commerce). This authorisation maybe used on one or several occasions. The Directors of the Companyare not entitled to receive stock options.The total number of shares to be issued on exercise of the optionsmay not exceed 2% of the total number of shares comprising theCompany’s share capital on the date of this Meeting, taking intoaccount options granted under the twenty-third resolution if passed,but not taking into account options previously granted but not yetexercised.The option exercise price shall not be less than either the average ofthe opening prices quoted for the Company’s shares over the twentytrading days preceding the grant date or the average price paid for theshares bought back by the Company pursuant to articles L. 225-208and L. 225-209 of the French Commercial Code (Code de commerce).The life of the options shall not exceed seven years.In the event that the Company carries out any of the corporate actionsprovided for by law during the option exercise period, the Boardof Directors shall adjust the number of shares to be purchased onexercise of the options and the exercise price on the basis prescribedby the applicable regulations.218 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
GENERAL MEETINGProposed resolutions6The Board of Directors shall have full powers to:■■■■■draw up the list of grantees;determine the number of options to be granted to each grantee;set, within the above limits, the option exercise price and exerciseperiod;decide to impose a vesting period for the options and/or a lock-upperiod for the shares acquired on exercise of the options, not toexceed three years from the exercise date;take all necessary decisions pursuant to this authorisation, delegateits authority to any other person and, generally, do everythingnecessary.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Twenty-third resolutionAuthorisation to grant stock options exercisablefor new shares to employees or officersof the Company or related companiesHaving considered the reports of the Board of Directors and theStatutory Auditors, the shareholders authorise the Board of Directorsto grant stock options on new shares to employees and officers of theCompany or the companies or intercompany partnerships referredto in article L. 225-180 of the French Commercial Code (Codede commerce). This authorisation may be used on one or severaloccasions. The directors of the Company are not entitled to receivestock options on new shares.The total number of shares to be issued on exercise of the optionsmay not exceed 2% of the total number of shares comprising theCompany’s share capital on the date of this Meeting, taking intoaccount options granted under the twenty-second resolution ifpassed, but not taking into account options previously granted butnot yet exercised.The option exercise price shall not be less than the average of theopening prices quoted for the Company’s shares over the twentytrading days preceding the grant date. The life of the options shallnot exceed seven years.The shareholders resolve to waive their pre-emptive right to subscribefor the new shares to be issued pursuant to this authorisation, infavour of the option holders.In the event that the Company carries out any of the corporate actionsprovided for by law during the option exercise period, the Board ofDirectors shall adjust the number of shares to be issued on exerciseof the options and the exercise price on the basis prescribed by theapplicable regulations.The Board of Directors shall have full powers to:■■■■draw up the list of grantees;determine the number of options to be granted to each grantee;set, within the above limits, the option exercise price and exerciseperiod;decide to impose a vesting period for the options and/or a lock-upperiod for the shares acquired on exercise of the options, not toexceed three years from the exercise date.The Board of Directors shall also have full powers to:■■temporarily suspend the right to exercise the options in the case ofany transaction involving the detachment of a subscription right;charge the share issue costs against the related premiums;■■take all necessary decisions under this authorisation and delegatethe Board’s powers to any other person;place on record the share issues resulting from the exerciseof the options, amend the by-laws accordingly, and generallydo everything necessary.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.Twenty-fourth resolutionAuthorisation given to the Board of Directorsto make share grants to employees and/or officersof the Company or related companiesHaving considered the reports of the Board of Directors and theStatutory Auditors and in accordance with articles L. 225-197-1et seq. of the French Commercial Code (Code de commerce), theshareholders authorise the Board of Directors to grant on one or moreoccasions in accordance with the provisions of articles L. 225-197-1to L. 225-197-5 of the French Commercial Code (Code de commerce)existing or new shares, without consideration, to employees of theCompany or certain categories of employee and to employees orofficers of companies or consortia related to the Company withinthe meaning of article L. 225-197-2 of the French Commercial Code(Code de commerce). The directors of the Company are not entitledto receive share grants.The total number of shares issued pursuant to this authorisation maynot exceed 1% of the total number of shares in issue on the dateof this Meeting.The Board of Directors is authorised as follows, alternatively orcumulatively, and within the limits referred to above:■■to grant shares purchased by the Company in accordance withthe provisions of articles L. 225-208 and L. 225-209 of the FrenchCommercial Code (Code de commerce); and/orto grant new shares to be issued by way of capital increase, inwhich case the Board of Directors is authorised to increase theshare capital by the number of shares granted and the shareholdersexpressly waive their pre-emptive rights over the shares issued infavour of the grantees.The vesting date of rights to the shares shall not be less than twoyears from the grant date determined by the Board of Directors. Inaccordance with the provisions of article L. 225-197-3 of the FrenchCommercial Code (Code de commerce), the rights are not transferableduring that period.Grantees are required to hold their shares for a minimum periodof two years after the vesting date. This period may be reduced orsuppressed if the vesting period is at least four years.The Board of Directors shall have full powers within the limits set outabove to do the following:■■■designate the grantees or the category or categories of personsentitled to the share grants, provided that no employee nor officerwho holds more than 10% of the share capital shall be grantedsuch shares, and provided that the share grant does not cause thegrantee to hold more than 10% of the share capital;make the share grants on one or more occasions at the times itdeems appropriate;set the terms and conditions of eligibility for the share grants,including but not limited to length of service, requirement to remainan employee or officer throughout the vesting period, or otherindividual or collective financial or performance requirements;Registration Document <strong>2010</strong> | <strong>Casino</strong> Group219
6GENERAL MEETINGProposed resolutions■■■■■■■set the vesting period and lock-up period during which the sharesmay not be sold, within the limits set out in this resolution;register the shares granted on a securities account in the name ofthe holder, with reference to the lock-up period and its duration;release the shares from lock-up in the event of the beneficiary’sredundancy, retirement, second or third degree disability withinthe meaning of article L. 341-4 of the French Social Security Code(Code de la Sécurité sociale), or death;create a special non-distributable reserve for the grantees’ rights bytransferring a sum equal to the par value of the shares to be issuedthrough capital increase from an ordinary reserve account;deduct the sums required from the special reserve to pay for thepar value of the shares to be granted;in the event of a capital increase, alter the by-laws accordingly andfulfil any necessary formalities;take all measures to protect and adjust the rights of grantees duringthe vesting period in the event of a capital transaction referred to inarticle L. 228-99, paragraph one, of the French Commercial Code(Code de commerce), in accordance with paragraph 3 thereof.In accordance with the provisions of articles L. 225-197-4 andL. 225-197-5 of the French Commercial Code (Code de commerce),a special report shall be prepared each year advising the shareholdersof transactions carried out pursuant to this authorisation.This authorisation is given for a period of twenty-six months. It cancelsand supersedes all earlier shareholder authorisations for the samepurpose.Twenty-fifth resolutionAuthorisation given to the Board of Directorsto issue new shares or allot existing shares to employeesHaving considered the report of the Board of Directors and theStatutory Auditors’ special report, and in accordance with articlesL. 3332-18 et seq. of the French Labour Code (Code du travail)and article L. 225-138-1 of the French Commercial Code (Code decommerce), the shareholders authorise the Board of Directors, withthe ability to subdelegate in accordance with articles L. 225-129-2and L. 225-129-6 of the French Commercial Code, to issue ordinaryshares on one or several occasions at its sole discretion:■■in connection with an issue for cash of securities carrying rightsto shares; orat any time when the information given in the report of the Boardof Directors provided for by article L. 225-102 of the FrenchCommercial Code (Code de commerce) indicates that the aggregatenumber of shares held by employees of the Company or relatedcompanies within the meaning of article L. 225-180 of the FrenchCommercial Code (Code de commerce) represents less than 3%of the issued capital.The shares shall be offered exclusively to employees who are membersof an employee stock ownership plan set up by <strong>Casino</strong>, Guichard-Perrachon and related companies, which is governed by articleL. 233-16 of the French Commercial Code (Code de commerce) andarticle L. 3332-18 of the French Labour Code (Code du travail).The shareholders waive their pre-emptive right to subscribe for theshares issued pursuant to this authorisation in favour of eligibleemployees.The total number of shares that may be issued pursuant to thisauthorisation may not exceed 4% of the total number of sharesoutstanding on the date of this Meeting. This amount is not includedin the limit ceiling set in the thirteenth resolution or the blanket ceilingset in the twentieth resolution.The issue price shall be set in accordance with the provisions of articleL. 3332-19 of the French Labour Code (Code du travail).The Board of Directors is also authorised to make stock grants orgrants of other securities carrying rights to shares for no consideration.The total benefit resulting from such grants and, if applicable, theemployer’s matching contribution and discount to the market price,may not exceed the legal or regulatory limits.The Board of Directors is authorised to sell shares bought back bythe Company in accordance with articles L. 225-206 et seq. of theFrench Commercial Code (Code de commerce) to employees whoare members of an employee stock ownership plan set up by <strong>Casino</strong>,Guichard-Perrachon and related companies within the meaning ofarticle L. 233-16 of the French Commercial Code (Code de commerce),which is governed by the provisions of articles L. 3332-18 et seq. ofthe French Labour Code (Code du travail). Said sales may be madeon one or several occasions at the Board’s discretion, provided thatthe total number of shares sold does not exceed 4% of the totalnumber of <strong>Casino</strong> shares outstanding on the sale date.This authorisation is given for a period of twenty-six months from thedate of this Meeting. It cancels and supersedes all earlier shareholderauthorisations for the same purpose.The share issue(s) shall be limited to the number of shares subscribedby employees either directly or through a corporate mutual fund.The Board of Directors is authorised, in accordance with the provisionsof article L. 225-135-1 of the French Commercial Code (Code decommerce), to issue a higher number of shares than that originallyset, at the same price agreed for the original issue, within the limitsof the ceiling set out above.The Board of Directors shall have full powers, with the right ofdelegation provided for by law, to use this authorisation and to carryout the share issue(s) within the above limits, and to determine thetiming, periods and terms of said issues subject to compliance withthe provisions of the law and the by-laws. Specifically, the Board ofDirectors shall have full powers to:■■■■■set the terms and conditions of the future share issue(s) and decidewhether said issue(s) will be made to eligible employees directly orthrough a corporate mutual fund;set the amount of the share issue, the subscription dates andperiod, the method and period of payment of the subscriptionor purchase price, the conditions of eligibility to be fulfilled byemployees participating in the share issue or sale in terms ofminimum service period;at the Board’s discretion, after each share issue, charge the shareissuance costs against the related premium and deduct fromthe premium the amounts necessary to raise the legal reserve toone-tenth of the new capital;place the issues on record and amend the by-laws to reflect thenew capital;generally, take any and all measures and carry out any and allformalities that are necessary for the issue, listing and servicing ofthe shares issued pursuant to this authorisation.Twenty-sixth resolutionPowers for formalitiesThe shareholders grant full powers to the bearers of an original, excerptor copy of the minutes of this Meeting for the purpose of any filing,publication or other formalities required by law.220 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
7ADDITIONALINFORMATION7.1. General information ......................................................2227.2. History of the Company and the Group .......................2267.3. The market for <strong>Casino</strong> securities ..................................2297.4. Store network ..............................................................2307.5. Person responsible for the Registration Documentand annual financial report ...........................................2327.6. Table of correspondence –Registration document .................................................2347.7. Table of correspondence –Annual financial report ..................................................236Registration Document <strong>2010</strong> | <strong>Casino</strong> Group221
7ADDITIONAL INFORMATIONGeneral information7.1. GENERAL INFORMATIONName and registered off ice<strong>Casino</strong>, Guichard-Perrachon1, esplanade de France, 42000 Saint-Étienne, FrancePhone: 04 77 45 31 31Legal formSociété anonyme governed by Book II of the French CommercialCode (Code de commerce).Governing lawThe laws of France.Date of incorporation and expiryThe Company was incorporated on 3 August 1898 following signatureof the by-laws on 1 July 1898. Its term, which was extended byextraordinary resolution of the shareholders at the General Meetingof 31 October 1941, will expire on 31 July 2040 unless the Companyis dissolved before this date or its term is further extended.Trade and companies registerThe Company is registered in Saint-Étienneunder no. 554 501 171 RCS.APE (business identifier) code: 6420 Z.Access to legal documentsThe by-laws, minutes of General Meetings, Statutory Auditors’reports and other legal documents are available for consultation atthe Company’s registered office.Financial yearThe Company’s financial year runs from 1 January to 31 December.Corporate purpose (Article 3 of the by-laws)The corporate purpose of the Company is:■■■■to create and operate, either directly or indirectly, any and all typesof stores for the retail sale of any and all goods and products,including but not limited to comestibles;to provide any and all services to the customers of such storesand to produce any and all goods and merchandise used in theoperation thereof;to sell wholesale any and all goods and merchandise for its ownaccount or for the account of third parties, notably on a commissionbasis, and to provide any and all services to such third parties;generally, to conduct any and all commercial, industrial, real estate,securities or financial transactions related to, or which may facilitatethe fulfilment of, the foregoing purposes.The Company may, both in France and abroad, create, acquire,use under licence or grant licences to use any and all trademarks,designs, models, patents and manufacturing processes related tothe foregoing objects.It may acquire any and all holdings and other interests in any Frenchor foreign company or business regardless of its purpose.It may operate in all countries, directly or indirectly, either alone or withany and all other persons or companies within a partnership, jointventure, consortium or other corporate entity, and carry out any andall transactions which fall within the scope of its corporate purpose.7.1.1. PROVISIONS OF THE BY LAWS CONCERNING THE BOARDOF DIRECTORS AND SENIOR MANAGEMENT –BOARD OF DIRECTORS CHARTERBoard of DirectorsMembership of the Board of Directors(Article 14 of the by-laws)The Company is administered by a Board of Directors. It has atleast three and no more than eighteen members, elected by theshareholders in General Meeting, except as required under theprovisions of the law in the case of a merger with another companywith the same legal form (société anonyme).Directors’ qualifying shares(Article 14 of the by-laws)Each director must hold at least 100 registered shares.Term of off ice – Age limit – Replacement(extracts from Article 16 of the by-laws)I - Other than as specified in paragraphs II and III (last two paragraphs)of this article, Directors are elected for a three-year term ending atthe close of the Annual General Meeting called in the year when theirterm expires.Directors may be re-elected.II - The age limit for holding office as Director or as permanentrepresentative of a corporate Director is seventy (70).A director or permanent representative who reaches the age of70 while in office is required to step down at the end of his or hercurrent term.The age limit does not apply to directors who were previously membersof the Company’s Management Board.222 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONGeneral information7Notwithstanding the foregoing, a person over the age limit may beelected or re-elected for a single three-year term.In any event, the number of directors or permanent representatives ofcorporate directors over the age of seventy (70) may not exceed onequarter of the total number of directors in office. Should this proportionbe exceeded, the oldest director or permanent representative shallstep down at the Annual General Meeting held to approve the financialstatements for the year in which the proportion was exceeded.III - Directors are elected or re-elected by the shareholders in GeneralMeeting.If one or several seats on the Board fall vacant between two GeneralMeetings due to the death or resignation of directors, the Board ofDirectors may appoint replacement directors. Any such appointmentsmust be ratified by shareholders at the next General Meeting.If any such appointment is not ratified by the shareholders, the actionscarried out by the Director concerned and the decisions made by theBoard during his or her appointment remain valid.If the number of directors falls to below three, the remaining directors(or, failing that, a representative appointed by the presiding magistrateof the Commercial Court at the request of any interested party) shallimmediately call a General Meeting of shareholders to elect one orseveral new directors so that the total number of directors is at leastequal to the number required by law.A director appointed to replace an outgoing director shall remain inoffice for the remainder of his or her predecessor’s term.Any decision to increase the number of directors sitting on the Boardmay only be made by the shareholders in General Meeting. The relatedresolution shall also fix the new director’s term of office.At the Annual General Meeting of 14 April 2011, shareholders willbe asked to approve an amendment to article 16 of the by-laws toprovide for the re-election of directors by rotation and to changethe rules as regards age limit by simply applying the provisions ofthe law, which state that no more than one third of the directorsmay be over the age of 70 (see Report of the Board of Directorson Extraordinary Business).Organisation, Board meetingsand decisions of the BoardChairman – Offi cers of the Board(extracts from Articles 17 and 20 of the by-laws)The Board of Directors elects one of its members (other than acorporate Director) to act as Chairman. The Chairman’s functionsare defined by law and the Company’s by-laws. The Chairman ofthe Board of Directors organises and leads the Board’s work andreports thereon to the Company’s shareholders. He is responsiblefor ensuring that the Company’s corporate governance structuresfunction correctly and, more particularly, that the directors are capableof fulfilling their duties.The Chairman may be appointed for his entire term as director. Hemay be replaced at any time by decision of the Board and may resignthe chairmanship before the end of his term as director. The Chairmanmay be re-elected to this position. The age limit for holding office asChairman is 70. If the Chairman reaches the age of 70 during histerm as director, he may continue to chair the Board until the endof his term.In the event of the Chairman’s temporary unavailability or death, theBoard of Directors may appoint another director as acting Chairman.In the event of temporary unavailability, the acting Chairman isappointed for a fixed period, which may be renewed. In the eventof death, the acting Chairman is appointed until such time as a newChairman is elected.Non-voting directors (extract from Article 23of the by-laws)The shareholders may appoint non-voting directors, who may benatural persons or legal entities, from among the shareholders. TheBoard of Directors may appoint non-voting directors between twoGeneral Meetings, subject to shareholder ratification of the appointmentat the next General Meeting. The number of non-voting directors maynot exceed five.Non-voting directors are elected for a three-year term ending at theclose of the Annual General Meeting called in the year when theirterm expires. They may be re-elected for an unlimited number ofsuccessive terms and may be removed from office at any time byordinary resolution of the shareholders in General Meeting.Non-voting directors attend Board meetings in a consultativecapacity only.They may receive attendance fees, the total aggregate amount ofwhich is fixed by ordinary resolution of the shareholders and remainsunchanged until a further decision of the shareholders. The total feeis allocated among the non-voting directors at the discretion of theBoard of Directors.Meetings of the Board of Directors(extract from Article 18 of the by-laws)The Board of Directors meets as often as it deems necessary in theinterests of the Company, at the location specified in the notice ofmeeting. Meetings are called by the Chairman or in the Chairman’sname by any person designated by him. If the Board has not metfor a period of over two months, a group of at least one third of thedirectors may ask the Chairman to call a meeting to discuss a particularagenda, as may the Chief Executive Officer.The Board of Directors may validly conduct business when at leasthalf of the Directors are present.Decisions are made by majority vote of those directors present inperson or represented by proxy. In the event of a tie, the Chairmanof the meeting shall have the casting vote. However, if the Board hasless than five members, decisions may be made by favourable voteof two directors present at the meeting.Powers of the Board of Directors(extract from Article 19 of the by-laws)The Board of Directors is responsible for defining the Company’s broadstrategic objectives and for their implementation. Except for thosepowers expressly vested in the shareholders in General Meeting, theBoard of Directors considers and decides on all matters related tothe Company’s operations, subject to compliance with the corporatepurpose. The Board of Directors performs all controls and verificationsthat it considers necessary or appropriate.The Board of Directors may also decide to combine or to separate thepositions of Chairman of the Board and Chief Executive Officer. Anysuch decision does not require any amendment of the by-laws.The Board of Directors may set up Committees of the Board to assistit, in which case the Committees’ membership and terms of referenceare decided by the Board. These Committees issue proposals,recommendations and opinions on the matters falling within theirterms of reference.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group223
7ADDITIONAL INFORMATIONGeneral informationIn accordance with the law, the Board of Directors approves relatedparty agreements, other than those entered into in the normal courseof business on arm’s length terms, governed by Article L. 225-38 ofthe French Commercial Code (Code de commerce). In accordancewith Article L. 225-35 of the French Commercial Code, the Board’sprior authorisation is required for any and all guarantees, bonds andendorsements issued in the Company’s name. However, the Boardmay delegate this authority to the Chief Executive Officer. In thiscase, the Board of Directors will set an aggregate annual ceiling onthe Chief Executive Officer’s authority and, if appropriate, a ceilingper commitment.The Board may issue delegations of authority, grant authorisations ordelegate certain functions for one or several transactions or categoriesof transaction to any director or other person, except where this isprohibited by law.The Board of Directors has included in its Charter certain mechanismsto restrict the powers of the Chief Executive Officer (see “CorporateGovernance”).Management structureMerger of the functions of Chairman of the Board of Directors andChief Executive Officer (extract from Article 21 of the by-laws)ManagementThe by-laws allow for the functions of Chairman of the Board ofDirectors and Chief Executive Officer to be separated or combined.The Company chose the latter option on 21 March 2005.The Chief Executive Officer’s term of office is set by the Board ofDirectors at its discretion, but may not exceed three years. The termmay be renewed.The Chief Executive Officer has full powers to act in all circumstancesin the name of the Company, within the scope of the corporatepurpose and except for those powers which are specifically vestedin the shareholders in General Meeting or in the Board of Directorsunder the law. However, the Board of Directors may adopt an internalrule restricting the Chief Executive Officer’s powers (see “CorporateGovernance” for a description of the restrictions decided by theBoard). The Chief Executive Officer represents the Company in itsdealings with third parties.The age limit for holding office as Chief Executive Officer is 70. If theChief Executive Officer reaches the age of 70 while in office, he isrequired to step down at the end of his current term.The Chief Executive Officer may be removed from office at any timeby the Board of Directors. If he is removed from office without duecause, he may be entitled to compensation unless he is also theChairman of the Board of Directors.Chief Operating OfficersAt the proposal of the Chief Executive Officer, the Board of Directorsmay appoint up to five Chief Operating Officers to assist the ChiefExecutive Officer in his duties.Chief Operating Officers are appointed for a maximum three-year termand their appointment may be renewed. They have the same powersas the Chief Executive Officer in dealings with third parties.The age limit for holding office as Chief Operating Officer is 70. If aChief Operating Officer reaches the age of 70 while in office, he isrequired to step down at the end of his current term.Chief Operating Officers may be removed from office at any timeby the Board of Directors, at the proposal of the Chief ExecutiveOfficer. The Chairman, if he is also Chief Executive Officer, the ChiefExecutive Officer and the Chief Operating Officers may delegate theirpowers to carry out one or several specific transactions or categoriesof transaction.Board of Directors’ CharterThe Board of Directors has adopted a Charter describing its rulesof procedure, which add to the related provisions of the law and theCompany’s by-laws.The Charter describes the Board’s organisation and procedures, thepowers and duties of the Board and the Committees of the Board, andthe procedures for overseeing and assessing its work (see “CorporateGovernance” for a description of the Committees of the Board, therestrictions on the Chief Executive Officer’s powers and the proceduresfor overseeing and assessing the Board’s work).The Charter was last updated on 27 August 2008 to incorporate theprovisions of the law of 3 July 2008 relating to the Chairman’s reportand reference to a corporate governance code.7.1.2. APPROPRIATION OF NET PROFIT(Article 34 of the by-laws)The income statement summarises all revenues and expenses forthe year. The difference between revenues and expenses, less anydepreciation, amortisation and provision charges, constitutes the netprofit or loss for the year.After deducting any prior year losses, net profit is first used to makeany transfers to reserves required by law, and more particularly tothe legal reserve.The balance, plus any retained earnings brought forward from prioryears, constitutes the sum available for distribution. It is used to paya first dividend on shares, in an amount equal to five percent (5%)of the paid-up portion of their par value. If, in a given year, there isinsufficient profit available to pay the first dividend in full, retainedearnings brought forward from the prior year may not be used tomake up the difference.Any surplus, plus any retained earnings brought forward from prioryears as outlined above, are then available for distribution to allshareholders.However, on recommendation of the Board of Directors, shareholdersmay resolve to transfer the surplus to any ordinary or extraordinarydiscretionary reserves that may or may not be allocated for a particularpurpose.On recommendation of the Board of Directors, sums transferred toreserves may subsequently be distributed or incorporated in the sharecapital by resolution of the shareholders.224 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONGeneral information77.1.3. ANNUAL GENERAL MEETINGSNotice of meeting, participation(Articles 25 and 27 of the by-laws)Annual General Meetings are called under the conditions requiredby law.For shareholders to be entitled to participate in General Meetings, theirshares must be recorded in the shareholder’s name or in the name ofan accredited intermediary in the case of non-resident shareholders,no later than midnight CET time on the third business day precedingthe meeting date, either in the share register kept by the Companyor its registrar (registered shares), or in the securities account keptby the shareholder’s bank or broker (bearer shares).For holders of bearer shares, ownership of shares is evidenced bya certificate (attestation de participation) issued by their bank orbroker, which may be sent to the Company by e-mail or attached tothe postal voting form/form of proxy or the request for an admissioncard issued in the shareholder’s name or in that of the accreditedintermediary representing the shareholder. A certificate shall also beissued to shareholders wishing to participate in General Meetings inperson who have not received their admission card by midnight CETon the third business day preceding the meeting date.Meetings are held in the town where the Company’s registered officeis located or any other venue in France as specified in the notice ofmeeting.All shareholders are entitled to attend and vote at Annual GeneralMeetings, regardless of the number of shares held.At the Annual General Meeting of 14 April 2011, shareholders willbe asked to approve an amendment to articles 25 and 27 of theby-laws to align them with the new rules on shareholders’ rightsintroduced by the decree of 23 June <strong>2010</strong> and the ordinanceof 9 December <strong>2010</strong> (see Report of the Board of Directors onExtraordinary Business).Voting rights (double voting rights)(Article 28-III of the by-laws)All shareholders entitled to attend meetings have one vote foreach share held, without limitation, save as otherwise providedfor by law.However, as allowed by law, double voting rights are attached to allfully-paid registered shares which have been registered in the name ofthe same shareholder for at least four years and to any bonus sharesissued upon capitalisation of reserves, retained earnings or additionalpaid-in capital in respect of shares entitled to double voting rights.The double voting rights are cancelled ipso jure if the shares areconverted to bearer shares or transferred to another shareholder,save as provided for in Article L. 225-124 of the French CommercialCode (Code de commerce) in the case of inheritance, division ofestate between divorcing spouses or gifts inter vivos to a spouse orother person of an eligible degree of relationship.Votes cast or proxies given by an intermediary that either has notdisclosed its status as nominee shareholder acting on behalf ofnon-resident shareholders or has not disclosed the identity of thosenon-resident shareholders, as required by the applicable regulations,are not taken into account.The provisions of the by-laws concerning double voting rights wereoriginally adopted by shareholders at the Extraordinary GeneralMeeting of 30 November 1934 and were amended at the ExtraordinaryGeneral Meeting of 21 May 1987, when the qualifying period wasraised from 2 to 4 years.7.1.4. IDENTIFIABLE HOLDERS OF BEARER SHARES(Article 11-1 of the by-laws)In accordance with the applicable regulations, the Company mayrequest at any time from the organisation responsible for clearingtransactions in its shares, information about the identity of theholders of its bearer shares and any securities carrying rights to itsshares, including each such shareholder’s name (or corporate name),nationality and address, the number of shares and securities with rightsto shares held, and any restrictions attached to the securities.Based on the information obtained under this procedure, if theCompany believes that any shares or securities with rights to sharesmay be held by nominees, it may contact any shareholders whosenames appear on the list, either directly or through the clearingorganisation, to request information allowing the Company toidentify the ultimate shareholders. In the event of failure to disclosethe identity of shareholders, the votes cast or proxies given by theintermediary on record as acting as nominee shareholder will not betaken into account.The Company may ask any legal entity that holds over 2.5% of itsshare capital or voting rights to disclose the identity of the personsholding, directly or indirectly, more than one third of the legal entity’sshare capital or voting rights.In the case of failure by a shareholder or intermediary to disclosethe requested information, the shares or securities with rights toshares held or represented by the shareholder or intermediary maybe stripped of voting and dividend rights, temporarily or permanently,in accordance with the law.Statutory disclosure thresholds(Article 11-II of the by-laws)Any person or legal entity, including any accredited intermediary in thecase of non-resident shareholders, acting either alone or in concertwith other persons or legal entities, that comes to hold or ceases tohold, by whatever means, a number of shares representing 1% ofthe voting rights or capital or any multiple thereof, must inform theCompany, by registered letter with acknowledgement of receipt, ofthe number of shares and voting rights held, within five trading daysof the relevant disclosure threshold being crossed.Shareholders that have crossed a disclosure threshold are also requiredto inform the Company of the number of securities held that carry adeferred right to shares, and of the number of voting rights attachedto said securities.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group225
7ADDITIONAL INFORMATIONHistory of the Company and the GroupThese disclosure requirements no longer apply when over 50% ofthe voting rights are held, individually or in concert.Failure to comply with these requirements will result in the undisclosedshares being stripped of voting rights at General Meetings at therequest of one or more shareholders separately or together owningat least 5% of the share capital or voting rights. Similarly, any votingrights which have not been duly and properly disclosed may not beexercised. Disqualification will apply to all General Meetings heldduring a period of two years commencing on the date on which theomission is remedied.7.2. HISTORY OF THE COMPANY AND THE GROUP1898 Company founded by Geoffroy Guichard and first store opened.1901 Launch of the first private-label <strong>Casino</strong>-brand products.1914 <strong>Casino</strong> manages 460 stores and 195 concessions.1929 <strong>Casino</strong> manages 20 plants, 9 warehouses, 998 stores and 505 concessions.1939 On the eve of the Second World War, <strong>Casino</strong> manages 1,670 stores and 839 concessions.1948 First self-service store opened in Saint-Étienne.1960 First supermarket opened in Grenoble.1967 First cafeteria opened in Saint-Étienne.1970 First hypermarket opened in Marseille. <strong>Casino</strong> acquires L’Épargne, a retailer operating in south-western France.1971 The Group manages 2,575 outlets.1976 <strong>Casino</strong> enters the US market by launching a chain of cafeterias.1980 <strong>Casino</strong> manages 2,022 convenience stores, 76 supermarkets, 16 hypermarkets, 251 affiliates, 54 cafeterias and 6 plants.1984 In the United States, the Group acquires the Smart & Final cash & carry chain (90 outlets).1985 <strong>Casino</strong> acquires Cédis, a retailer operating in eastern France with annual sales of €1.14 billion.1990 The Group acquires La Ruche Méridionale, a retailer operating in the South of France with annual sales of €1.2 billion.In the United States, the Group acquires the food wholesaler Port Stockton Food Distributors.The hypermarket and supermarket service station business is sold to Shell and Agip.1991 The retail business is spun off into a subsidiary.1992 <strong>Casino</strong> acquires Rallye’s retailing business.1994 The Company is converted into a société anonyme (joint-stock corporation) with a Management Board and Supervisory Board.1995 The Group signs a partnership agreement with Corsica-based Corse Distribution, leading to the acquisition of 50% interestsin Codim 2 and Médis.1996 A partnership agreement is signed with Coopérateurs de Normandie-Picardie.A joint venture is set up with Dairy Farm International to develop hypermarkets in Taiwan.Spar France is set up.The Group buys back from Agip the service stations located on the sites of <strong>Casino</strong> hypermarkets and supermarkets.The first hypermarket is opened in Poland.1997 <strong>Casino</strong> acquires the entire capital of Médis.<strong>Casino</strong> and Shell launch the Club Avantages loyalty card.<strong>Casino</strong> acquires the Franprix and Leader Price networks (€1.9 billion in sales) and a food wholesaler, Mariault (€152 million in sales).<strong>Casino</strong> takes a 21.4% stake in the capital of <strong>Mo</strong>noprix/Prisunic.1998 <strong>Casino</strong> acquires a 75% stake in Argentine company Libertad.The Centre Auto business is sold to Feu Vert in exchange for 38% of Feu Vert’s capital.<strong>Casino</strong> takes a 50% stake in Uruguay’s Disco Group.The first hypermarket is opened in Taiwan.1999 <strong>Casino</strong> takes a 66% stake in Thailand’s Big C Group.A total of 75 convenience stores are acquired from Guyenne & Gascogne in south-western France.The Opéra central purchasing agency is set up with Cora.The first Imagica one-hour digital film-processing store is opened.<strong>Casino</strong> takes a 25% stake in Exito (Colombia) and CBD (Brazil).226 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONHistory of the Company and the Group72000 <strong>Casino</strong> acquires a 50% stake in the capital of Cdiscount.The joint venture with Dairy Farm International in Taiwan is dissolved and <strong>Casino</strong> signs an agreement with the Far Eastern Groupfor the creation of Far Eastern Géant in Taiwan.The first Leader Price store opens in Poland.The Group acquires 475 convenience stores from Auchan.<strong>Casino</strong> takes part in the creation of WorldWide Retail Exchange (WWRE), a new B2B electronic marketplace.The Group raises its stake in <strong>Mo</strong>noprix to 49.3%, alongside Galeries Lafayette which also holds 49.3%.<strong>Casino</strong> strengthens its presence in Latin America – in Uruguay, Disco acquires control of Devoto (21 outlets),and in Venezuela <strong>Casino</strong> takes a 50.01% stake in Cativen (48 supermarkets and 2 hypermarkets).2001 <strong>Casino</strong> joins forces with Cofinoga to set up Banque du <strong>Groupe</strong> <strong>Casino</strong>.A Géant hypermarket is opened in Bahrain (Persian Gulf) under an affiliation agreement with the Sana Group.An agreement is signed with the Bourbon Group providing for the acquisition by <strong>Casino</strong> of a 33.34% interest in Vindémia,a retail chain operating in Reunion, Madagascar, Mayotte, Mauritius and Vietnam.2002 Cora terminates the agreement concerning the Opéra joint central purchasing agency.<strong>Casino</strong> Cafétéria enters the foodservice market.<strong>Casino</strong> and Galeries Lafayette launch a new-generation loyalty programme, S’Miles, which combines the Points Ciel (GaleriesLafayette) and Club Avantages (<strong>Casino</strong>/Shell) loyalty programmes.The first two Leader Price stores are opened in Thailand.<strong>Casino</strong> buys back from Shell the service stations located on the sites of <strong>Casino</strong> hypermarkets and supermarkets.<strong>Casino</strong> acquires 38% of Dutch retailer Laurus.A new central purchasing agency, EMC Distribution, is set up.<strong>Casino</strong> joins forces with Auchan to create International Retail and Trade Services (IRTS), offering services to multinational suppliersand/or SMEs.2003 <strong>Casino</strong> and Galeries Lafayette agree to continue their partnership in <strong>Mo</strong>noprix for at least three years, and make a joint public buyoutoffer for <strong>Mo</strong>noprix shares to be followed by a squeeze out.Smart & Final Inc. sells its foodservice businesses in Florida and California.The Company changes its legal form to a société anonyme with a Board of Directors.2004 The <strong>Casino</strong> Group and CNP Assurances announce a strategic agreement for the development and promotion of insurance productsfor customers of the Group’s stores in France.The <strong>Casino</strong> Group raises its holding in Franprix Holding to 95% and in Leader Price Holding to 75%.2005 <strong>Casino</strong> acquires joint control of the CBD Group, with 68.8% of the capital of the group’s holding company.<strong>Casino</strong> becomes the majority shareholder of Vindémia, with 70%.The Group’s shopping centre properties in France are spun off into a subsidiary, Mercialys, which is floated on the stock exchange.The Group sells 13 warehouse properties to Mines de la Lucette.2006 The equity swap between Deutsche Bank and <strong>Casino</strong> is unwound and the GMB/Cora shares are sold.Exito acquires control of Carulla Vivero, a listed company ranked No. 2 in the Colombian retailing market.<strong>Casino</strong> sells its remaining 38% stake in Feu Vert.The Group joins forces with dunnhumby to create dunnhumby France.<strong>Casino</strong> sells its Polish operations.International Retail and Trade Services (IRTS), set up in partnership with Auchan, is dissolved.2007 <strong>Casino</strong> sells its 55% interest in Smart & Final (USA) to investment fund Apollo.<strong>Casino</strong> becomes the majority shareholder of Exito after exercising its right of first refusal over the shares sold by the Toro family.<strong>Casino</strong> and Cencosud enter into a joint venture agreement to develop a DIY retail business in Colombia.<strong>Casino</strong> enters into an agreement with property investment fund Whitehall to develop shopping centres, mainly in Poland and otherEastern Europe countries.<strong>Casino</strong> owns 66.8% of Cdiscount after various share purchases and subscribing to a new share issue.<strong>Casino</strong> owns 100% of Vindémia (Indian Ocean), following Bourbon’s exercise of its put option.<strong>Casino</strong> sells 225 convenience store and supermarket properties in France, as well as store and warehouse propertiesin Reunion, to two property mutual funds (OPCI).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group227
7ADDITIONAL INFORMATIONHistory of the Company and the Group2008 <strong>Casino</strong> raises its stake in Super de Boer to 57%.Telemarket.fr signs an agreement with the <strong>Casino</strong> Group to sources its supplies from the Group’s central purchasing agency.<strong>Casino</strong> reduces its interest in Mercialys from 61.48% to 59.76% to comply with “SIIC 4” regulations.The <strong>Casino</strong> Carbon Index is the first complete environmental labelling system.Emily 2, a new employee share ownership plan, is set up.The Group continues to pursue its policy of capturing the value of its assets by selling 42 superette, <strong>Casino</strong> supermarket andFranprix/Leader Price store properties to two property partners, including AEW Immocommercial, a property mutual fund (OPCI).<strong>Casino</strong> and Galeries Lafayette sign an amendment to their March 2003 strategic agreement which suspends the exerciseof their respective put and call options on <strong>Mo</strong>noprix shares for three years. Philippe Houzé is reappointed Chairman of the Boardof <strong>Mo</strong>noprix until March 2012.2009 All preferred non-voting shares are converted into ordinary shares.<strong>Groupe</strong> <strong>Casino</strong> signs the United Nations Global Compact, strengthening its commitment to promoting and adopting sustainable andsocially responsible policies. It has set up an action plan in the areas of human rights, labour, the environment and anti-corruption.<strong>Casino</strong> sells the assets and liabilities of its 57%-owned subsidiary Super de Boer to Jumbo.<strong>Casino</strong> creates GreenYellow, a subsidiary that develops photovoltaic systems on shopping centre store and car park roofs.<strong>Casino</strong> acquires the Baud family minority interests in Franprix and Leader Price.<strong>Casino</strong> signs a distribution agreement with the Sherpa network of convenience stores, under which Sherpa will source its suppliesfrom <strong>Casino</strong>’s central purchasing agency.<strong>Casino</strong> creates a single division combining Géant <strong>Casino</strong> hypermarkets and <strong>Casino</strong> Supermarkets, as well as a single food andnon-food purchasing department.GPA signs an agreement to create a joint venture between its subsidiary Globex Utilidades SA and Casas Bahia Comercial Ltda,Brazil’s leading non-food retailer, thereby strengthening its leadership position in the Brazilian retail market.<strong>2010</strong> The Cactus Group, Luxembourg’s leading retailer, becomes a member of <strong>Casino</strong>’s central purchasing agency.The <strong>Casino</strong> Foundation launches its first programme to prevent the isolation of hospitalised children, in partnership with the DocteurSouris association.<strong>Casino</strong> signs a long-term partnership with the Crédit Mutuel-CIC group for financial products and services in France through itssubsidiary Banque du <strong>Groupe</strong> <strong>Casino</strong>, which is currently 60%-owned by <strong>Casino</strong>, Guichard-Perrachon and 40% by Laser Cofinoga.The agreement is expected to be finalised within 18 months.Big C, <strong>Casino</strong>’s Thai subsidiary, signs an agreement to acquire Carrefour’s Thai operations comprising 42 stores and 37 shoppingmalls.<strong>Casino</strong> signs a partnership with the Bolivarian Republic of Venezuela, which acquires 80% of Cativen with <strong>Casino</strong> retaining 20% toprovide its operational support to the new state-controlled entity.<strong>Casino</strong> gives new impetus to its “tous les jours” range of high quality, low price basic products.The GPA/Casas Bahia merger in Brazil becomes effective in November.<strong>Casino</strong> joins the European central purchasing agency EMD as of 1 January 2011, improving its supply chain competitiveness.228 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONThe market for <strong>Casino</strong> securities77.3. THE MARKET FOR CASINO SECURITIES7.3.1. LIST OF QUOTED CASINO SECURITIES IN <strong>2010</strong>Since 15 June 2009, <strong>Casino</strong>’s only quoted securities are ordinaryshares (ISIN code FR0000125585). They are listed on Euronext Parisand are eligible for the Deferred Settlement System (SRD).Following their mandatory conversion into ordinary shares on 15 June2009, the preferred non-voting shares (ISIN code RFR 0000121139)were transferred to the delisted securities compartment of EuronextParis (CVRMR) where they remained tradable for six months until15 December 2009.From 1 January each year to the dividend payment date, ordinaryshares issued on exercise of stock options or warrants are also tradedon Euronext Paris.The Company has also carried out several bond issues, which arequoted on the Luxembourg stock exchange.7.3.2. TRADING VOLUMES AND PRICES OVER THE PAST 7 MONTHS(source: Euronext Paris)Ordinary sharesHigh and low prices Trading volume Trading volumeHigh (€) Low (€) (thousands of shares) (in € millions)2009 September 57.84 51.45 7,484 403October 57.00 52.39 6,774 371November 59.05 54.04 4,677 265December 62.90 57.04 4,222 252<strong>2010</strong> January 64.50 58.60 5,742 350February 60.38 57.06 3,954 232March 63.59 59.29 6,394 392April 67.41 62.64 6,075 397May 68.07 58.65 9,171 579June 66.20 61.50 5,329 339July 69.07 61.51 5,551 365August 68.02 62.80 3,561 234September 70.38 63.59 5,161 352October 68.00 65.27 4,832 322November 70.90 66.10 5,016 343December 75.10 66.81 5,035 3592011 January 75.74 70.31 4,766 343Preferred non-voting sharesHigh and low prices Trading volume Trading volumeHigh (€) Low (€) (thousands of shares) (in € millions)2009 September ( * ) 46.03 39.20 1 0.06October ( * ) 49.78 46.00 2 0.09November ( * ) 49.78 45.00 5 0.3December ( * ) 49.50 ( * ) 48.00 2 0.09(*) The preferred non-voting shares were transferred to the delisted compartment on 15 June 2009, where they remained tradable until 15 December 2009.Registration Document <strong>2010</strong> | <strong>Casino</strong> Group229
7ADDITIONAL INFORMATIONStore network7.4. STORE NETWORKFRANCENumber of stores at 31 DecemberRetail space (in thousands of sq.m.)2008 2009 <strong>2010</strong> 2008 2009 <strong>2010</strong>Géant <strong>Casino</strong> hypermarkets 131 122 125 988 903 915of which French affiliates 6 5 6 - - -International affiliates 14 5 5 - - -<strong>Casino</strong> Supermarkets 401 390 405 628 619 650of which French, affiliates 67 53 54 - - -International affiliates 22 21 27 - - -Franprix supermarkets 702 789 870 315 352 374of which Franchise outlets 281 472 515 - - -<strong>Mo</strong>noprix supermarkets 377 463 494 559 639 661of which Franchise outlets/Affiliates 47 117 131 - - -Naturalia 39 41 49 - - -Leader Price discount stores 530 559 585 483 509 533Of which Franchise outlets 216 266 294 - - -TOTAL SUPERMARKETSAND DISCOUNT STORES 2,010 2,201 2,354 1,985 2,118 2,218of which Franchise outlets 633 929 1,021 - - -Petit <strong>Casino</strong> superettes 1,903 1,816 1,791 265 257 257of which Franchise outlets 26 28 29 - - -Spar superettes 915 896 928 240 236 243of which Franchise outlets 735 739 761 - - -Vival superettes 1,677 1,753 1,767 160 166 168of which Franchise outlets 1,677 1,753 1,766 - - -Other 30 4 3 6 1 1of which Franchise outlets 6 2 1 - - -Other Franchise stores 1,126 1,257 1,260 73 92 93Corners, Relay, Shell, Elf, Carmag, Sherpa,other 1,126 1,257 1,260 - - -Wholesale outlets 441 1,025 926 34 75 68TOTAL CONVENIENCE STORES 6,092 6,751 6,675 778 827 829of which Franchise/wholesale outlets 4,011 4,805 4,744 - - -Other affiliate stores 99 13 20 - - -of which French affiliates 98 13 17 34 4 3International affiliates 1 - 3 - - -Other businesses 269 277 287 NA NA NA<strong>Casino</strong> Restauration 269 277 287 - - -TOTAL FRANCE 8,601 9,364 9,461 3,785 3,852 3,966230 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONStore network7INTERNATIONALNumber of stores at 31 DecemberRetail space (in thousands of sq.m.)2008 2009 <strong>2010</strong> 2008 2009 <strong>2010</strong>Argentina 65 49 23 164 149 131Libertad hypermarkets 15 15 15 - - -Leader Price discount stores 26 26 - - - -Other businesses 24 8 8 - - -Uruguay 52 53 53 70 74 74Géant hypermarkets 1 1 1 - - -Disco supermarkets 27 28 28 - - -Devoto supermarkets 24 24 24 - - -Venezuela 60 41 - 85 78 -Exito hypermarkets 6 6 - - - -Cada supermarkets 36 35 - - - -Q’Precios (discount) 18 - - - - -Brazil 597 1,080 1,647 1,359 1,745 1,833Extra hypermarkets 102 103 110 - - -Pão de Açucar supermarkets 145 145 149 - - -Sendas supermarkets 73 68 17 - - -Extra Perto supermarkets 5 13 101 - - -CompreBem supermarkets 165 157 113 - - -Assai discount stores 28 40 57 - - -Extra Facil convenience stores 32 52 68 - - -Eletro, Ponto Frio (other businesses) 47 502 1,032 - - -of which Ponto frio - 455 506 - - -of which Casas Bahia - - 526 - - -Thailand 79 97 116 590 596 612Big C hypermarkets 66 67 70 - - -Big C supermarkets 13 2 - - -mini Big C convenience stores - 11 15 - - -Pure (other businesses) - 19 29 - - -Vietnam 8 9 14 42 47 72Big C hypermarkets 8 9 14 - - -Indian Ocean 51 50 50 95 97 99Jumbo hypermarkets 11 11 11 - - -Score/Jumbo supermarkets 20 21 21 - - -Cash and Carry supermarkets 5 5 5 - - -Spar supermarkets 6 6 7 - - -Other businesses 9 7 6 - - -Colombia 264 260 299 646 649 676Exito hypermarkets 87 74 73 - - -Pomona, Carulla and Exito supermarkets 94 93 112 - - -Exito, Surtimax discount stores 14 47 54 - - -Exito Express, Carulla Expressconvenience stores - - 22 - - -Others 69 46 38 - - -The Netherlands 305 - - - - -Super de Boer supermarkets 305 - - - - -TOTAL INTERNATIONAL 1,481 1,639 2,202 3,051 3,435 3,497Registration Document <strong>2010</strong> | <strong>Casino</strong> Group231
7ADDITIONAL INFORMATIONPerson responsible for the Registration Document and annual fi nancial report7.5. PERSON RESPONSIBLE FOR THE <strong>REGISTRATION</strong><strong>DOCUMENT</strong> AND ANNUAL FINANCIAL REPORTPERSON RESPONSIBLE FOR THE <strong>REGISTRATION</strong> <strong>DOCUMENT</strong>Jean-Charles Naouri, Chairman and Chief Executive OfficerSTATEMENT BY THE PERSON RESPONSIBLEFOR THE <strong>REGISTRATION</strong> <strong>DOCUMENT</strong>“I hereby declare that, having taken all reasonable care to ensurethat such is the case, the information contained in this RegistrationDocument is, to the best of my knowledge, in accordance with thefacts and contains no omission likely to affect its import.I hereby declare that, to the best of my knowledge and belief, thefinancial statements have been prepared in accordance with theapplicable accounting standards and present accurately in all materialrespects the assets and liabilities, financial position and results ofthe Company and the consolidated group. I also declare that theinformation contained in the management report appearing onpages 15 onwards gives a true and fair view of trends in the businessoperations, results and financial position of the Company and theconsolidated group, as well as a description of the main risks anduncertainties facing those companies.I obtained a statement from the Statutory Auditors at the end of theirengagement affirming that they had read the whole of the RegistrationDocument and examined the information about the financial positionand the accounts contained therein.Their report on the historical financial information for <strong>2010</strong> is presentedon pages 54 and 128 of this Registration Document. Their report onthe historical financial information for 2009 and 2008 is incorporated byreference. Their report on the 2008 consolidated financial statementscontains an emphasis of matter paragraph relating to the adoptionof an income statement presentation by function.Their report on the 2009 consolidated financial statements containstwo emphasis of matter paragraphs, one relating to the new standardsand interpretations applied by the Group in 2009, the other relating tothe accounting treatment used for the dividend distribution in Mercialysshares and the positions taken by the Group with regard to theconsolidation of its Venezuelan subsidiary Cativen in its consolidatedfinancial statements.Their report on the <strong>2010</strong> consolidated financial statements containsan emphasis of matter paragraph relating to the new standards andinterpretations adopted by the Group in <strong>2010</strong>.”Jean-Charles Naouri232 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONPerson responsible for the Registration Document and annual fi nancial report7In application of Article 28 of European Commission regulation 809/2004/EC, the following information is incorporated by reference in thisRegistration Document:2009The 2009 Registration Document was filed with the Autorité des Marchés Financiers on 6 April <strong>2010</strong> under No. D.10-221. This RegistrationDocument includes:■■■the consolidated financial statements (pages 63 to 146) and the Statutory Auditors’ report on the consolidated financial statements(page 64);financial information (pages 1 to 62);the parent company financial statements prepared under French GAAP (pages 147 to 175) and the Statutory Auditors’ general and specialreports (pages 148 and 176 respectively).2008The 2008 Registration Document was filed with the Autorité des Marchés Financiers on 20 April 2009 under No. D.09-0272. This RegistrationDocument includes:■■■the consolidated financial statements (pages 60 to 140) and the Statutory Auditors’ report on the consolidated financial statements(page 58);financial information (pages 1 to 56);the parent company financial statements prepared under French GAAP (pages 143 to 169) and the Statutory Auditors’ general and specialreports (pages 142 and 170 respectively).Registration Document <strong>2010</strong> | <strong>Casino</strong> Group233
7ADDITIONAL INFORMATIONTable of correspondence – Registration document7.6. TABLE OF CORRESPONDENCE –<strong>REGISTRATION</strong> <strong>DOCUMENT</strong>To facilitate consultation of this Registration Document, the table below indicates the page references corresponding to the main headingsrequired under annexe 1 of European Commission regulation 809/2004/EC of 29 April 2004.1. Persons responsible1.1. Person responsible for the Registration Document ...............................................................................................................2321.2. Statement by the person responsible for the Registration Document ..................................................................................2322. Statutory Auditors ................................................................................................................................................. 1803. Selected financial information .................................................................................................................................. 44. Risk factors .................................................................................................................................................... 40 to 435. Information about the issuer5.1. History and development of the Company5.1.1. Legal and commercial name ...................................................................................................................................................2225.1.2. Place of registration and registration number ..........................................................................................................................2225.1.3. Date of incorporation and length of life ...................................................................................................................................2225.1.4. Domicile, legal form and governing legislation .........................................................................................................................2225.1.5. Important events in the development of the business .....................................................................................5 and 6, 226 to 2285.2. Investments ............................................................................................................................................................13 and 14, 226. Business overview ............................................................................................................................................ 5 to 237. Organisational structure7.1. Issuer’s position within the Group ................................................................................................................................23, 25, 377.2. <strong>Groupe</strong> <strong>Casino</strong> organisation chart .............................................................................................................................. 26 and 278. Property, plant and equipment8.1. Tangible fixed assets .................................................................................................................................... 13 and 14, 87 to 898.2. Environmental issues ...................................................................................................................................................... 43 to 469. Operating and financial review9.1. Financial position ......................................................................................................................................................................229.2. Operating results ............................................................................................................................................................. 20 to 2310. Capital resources ................................................................................................................................... 22, 93 to 9611. Research and development, patents and licences .............................................................................................. 2312. Trend information .........................................................................................................................5 to 14, 29 and 3013. Profit forecasts or estimates ................................................................................................................................. 3014. Administrative, management and supervisory bodies and senior management14.1. Members of the Board of Directors and senior management ..................................................................................156, 17614.2. Administrative, management and supervisory bodies and senior management conflicts of interest .............................17915. Remuneration and benefits ....................................................................................................................... 176 to 179234 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
ADDITIONAL INFORMATIONTable of correspondence – Registration document716. Board practices16.1. Current term of office of members of the administrative, management or supervisory bodies ........................... 157 to 17516.2. Information about service contracts between members of the administrative,management or supervisory bodies and the issuer or any of its subsidiaries ..................................................................17916.3. Board Committees ...............................................................................................................................................183 and 18416.4. Statement as regards compliance with corporate governance regime ............................................................................18117. Employees17.1. Human resources ....................................................................................................................................................... 46 to 5017.2. Shareholdings and stock options .......................................................................................... 37 to 39, 37 and 38, 51 and 5217.3. Arrangements for involving the employees in the issuer’s capital ......................................................................................5518. Major shareholders18.1. Ownership of share capital and voting rights ............................................................................................................. 37 to 3918.2. Controlling shareholder ........................................................................................................................................................3718.3. Arrangements which may result in a change in control of the issuer .........................................................................37, 17919. Related-party transactions ...................................................................................................... 29, 121 and 122, 14620. Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses20.1. Consolidated financial statements for the year ended 31 December <strong>2010</strong> ........................................................... 55 to 12620.2. Parent company financial statements for the year ended 31 December <strong>2010</strong> ..................................................... 129 to 15220.3. Statutory Auditors’ report on the consolidated financial statements at 31 December <strong>2010</strong>..............................................5420.4. Statutory Auditors’ report on the parent company financial statements at 31 December <strong>2010</strong> ......................................12820.5. Dividend policy ......................................................................................................................................................................2420.6. Legal and arbitration proceedings .......................................................................................................................... 41 and 4220.7. Significant change in the issuer’s financial or trading position ............................................................... 17 to 22, 29 and 3021. Additional information21.1. Information about the share capital21.1.1. Amount of issued capital ......................................................................................................................................................3021.1.2. Treasury shares ...........................................................................................................................................................30 to 3221.1.3. History of share capital ........................................................................................................................................................3621.2. Memorandum and Articles of Association21.2.1. Corporate purpose .............................................................................................................................................................22221.2.2. Summary of provisions of the by-laws or charter with respect to members of the administrative,management and supervisory bodies ...................................................................................................193 to 197, 222 to 22421.2.3. Rights, privileges and restrictions attaching to the shares ........................................................................................224 to 22621.2.4. General Meetings ..............................................................................................................................................................22521.2.5. Shareholder pacts ................................................................................................................................................................3921.2.6. Notification of interests .......................................................................................................................................................22522. Material contracts ...................................................................................................................................... 28 and 2923. Documents on display ........................................................................................................................................ 22224. Information on holdings .............................................................................................................25 to 29, 150 to 152Registration Document <strong>2010</strong> | <strong>Casino</strong> Group235
7ADDITIONAL INFORMATIONTable of correspondence – Annual fi nancial report7.7. TABLE OF CORRESPONDENCE –ANNUAL FINANCIAL REPORTTo facilitate consultation of this Registration Document, the table below indicates the page references corresponding to the information containedin the annual financial report which listed companies are required to publish in accordance with articles L. 451-1-2 of the French <strong>Mo</strong>netaryand Financial Code (Code monétaire et financier) and article 222-3 of the General Regulation of the Autorité des Marchés Financiers.1. Parent company financial statements ........................................................................................................ 129 to 1522. Consolidated financial statements .............................................................................................................. 55 to 1263. Management report ....................................................................................................................................... 16 to 523.1. Information referred to in articles L. 225-100 and L. 225-100-2 of the French Commercial Code (Code de commerce)■ Analysis of business trends .............................................................................................................................................17 to 20■ Analysis of results ..........................................................................................................................................................20 to 23■ Analysis of financial position.....................................................................................................................................................22■ Major risks and uncertainties...........................................................................................................................................40 to 43■ Summary of valid authorisations granted by the shareholders to the Board of Directors to increase the share capital................333.2. Information referred to in article L. 225-100-3 of the French Commercial Code (Code de commerce)■ Factors liable to have an influence in the event of a public offer .............................................................................................1843.3. Information referred to in article L. 225-111 of the French Commercial Code (Code de commerce)■ Purchases of treasury shares ..........................................................................................................................................30 to 324. Statement by the persons responsible for the annual financial report ............................................................... 2325. Statutory Auditors’ report on the parent company and consolidated financial statements ........................ 54, 1286. Disclosure of Statutory Auditors’ fees ................................................................................................................. 1807. Chairman’s report on internal control and risk management .................................................................... 185 to 1918. Statutory Auditors’ report on the Chairman’s report on internal control and risk management ........................ 192236 <strong>Casino</strong> Group | Registration Document <strong>2010</strong>
Investor RelationsNadine COULMAline NGUYENPhone: +33 (0)1 53 65 64 17 Phone: +33 (0)1 53 65 64 85ncoulm@groupe-casino.fr anguyen@groupe-casino.frShareholder RelationsToll-free number: 0 800 16 18 20 (calls originating in France only)E-mail: actionnaires@groupe-casino.frTo convert bearer shares to registered shares, contact:BNP Paribas Securities Services – GCTShareholder RelationsGrands <strong>Mo</strong>ulins de Pantin9, rue du Débarcadère93761 PANTIN Cedex, FrancePhone: +33 (0)1 40 14 31 00<strong>Casino</strong>, Guichard-PerrachonSociété anonyme. Share capital: €169,323,360.39HeadquartersB.P. 306 – 1, Esplanade de FranceF-42008 Saint-Etienne Cedex 2, FrancePhone: +33 (0)4 77 45 31 31Telex: CASFL X 3304645FFax: 04 77 45 38 38The Company is registered in Saint-Étienne under no. 554 501 171 RSCParis office58-60 avenue Kléber75116 PARISPhone: +33 (0)1 53 65 64 00www.groupe-casino.frPublished by groupe <strong>Casino</strong>. Design and creation: . Cover design and creation: All Contents. Photo credit: Agence Lubrik.Printing: BERGAME PRINT - Parc d’Activité du Bel Air – 8, rue Joseph Paxton – 77607 Marne la vallée Cedex 3, France.Printed on Cocoon Offset 100% recycled paper.
GROUPE CASINOB.P. 306 – 1, Esplanade de FranceF-42008 Saint-Étienne cedex 2, FrancePhone: + 33 (0)4 77 45 31 31 – Fax: + 33 (0)4 77 45 38 38www.groupe-casino.fr
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