VINCI - 2008 annual report

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Consolidated fi nancial statements Notes to the consolidated fi nancial statements A. Accounting policies and measurement methods 1. General principles In application of Regulation (EC) No 1606/2002 of 19 July 2002, VINCI’s consolidated fi nancial statements for the year ended 31 December 2008 have been prepared under the International Financial Reporting Standards (IFRS) as endorsed by the European Union at 31 December 2008. (*) The accounting policies applied by the Group at 31 December 2008 are the same as those used in preparing its consolidated fi nancial statements at 31 December 2007, except for: - the Standards and Interpretations adopted by the European Union, applicable as from 1 January 2008 (see Note A.1.1. “New Standards and Interpretations applicable from 1 January 2008”); - the change of accounting policy relating to the early application of the IAS 20 Amendment included in the IFRS Annual Improvement Process (see Note A.1.2 “Change of accounting policy: accounting for loans at below-market rate of interest”); - the change of accounting policy relating to the early application of Interpretation IFRIC 12 (see Note A.1.3 “Change of accounting policy: IFRIC 12 Service Concession Arrangements”). The information relating to 2006, presented in the 2007 registration document D.08-0147 fi led with the AMF on 25 March 2008 is deemed to be included herein. The consolidated fi nancial statements were fi nalised by the Board of Directors on 3 March 2009 and will be submitted to the Shareholders’ General Meeting for approval on 14 May 2009. 1.1 New Standards and Interpretations applicable from 1 January 2008 1.1.1 IFRIC 11 Group and Treasury Share Transactions This Interpretation states how share-based payments (IFRS 2) in Group subsidiaries should be accounted for whenever these payments are made by means of equity instruments of the parent. VINCI’s accounting policies already complied with this Interpretation. 1.1.2 IFRIC 14 The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their Interaction This Interpretation sets out the conditions – i.e. refunds or reductions in future contributions – enabling the entity in question to recognise a receivable in the event of a fi nancial asset or pension fund becoming in surplus. Moreover, the existence of a minimum funding requirement may restrict the amount of the receivable recognised or require the recognition of a supplementary liability. The application of this Interpretation has had no material impact on the Group’s consolidated fi nancial statements at 31 December 2008. 1.1.3 IAS 39 & IFRS 7 Reclassifi cation of Financial Assets – Amendment published on 27 November 2008 The Amendments to IAS 39 and IFRS 7 allow entities, in rare circumstances, to reclassify certain fi nancial instruments originally held for trading to other asset categories. The current fi nancial crisis is considered as a rare circumstance of a nature such as to justify the use of this option by entities. This Amendment has not been applied to the consolidated fi nancial statements at 31 December 2008. 1.2 Change of accounting policy: accounting for loans at below-market rate of interest The Amendments issued under the IFRS Annual Improvements Process were adopted by the European Union during the fi rst quarter of 2009. VINCI has elected to apply the Amendment to IAS 20 early. This Amendment specifi es the accounting treatment of loans granted at belowmarket rates of interest by some public sector bodies (such as the loans made by the European Investment Bank in connection with the fi nancing of concession assets). The economic benefi t arising from application of an interest rate that is signifi cantly below market rates is henceforth considered as a government grant, recognised as a reduction of the related investments made. This results in a corresponding reduction of the loans in question, of which the interest expense will be recognised on the basis of market rates of interest. In accordance with the transitional arrangements provided for in this Amendment, this change of accounting policy has been applied prospectively to loans at below-market rates of interest taken out during 2008. (*) Available on the website: http://ec.europa.eu/internal_market/accounting/ias_en.htm#adopted-commission 172 VINCI __ 2008 ANNUAL REPORT
Main impacts recognised at 31 December 2008: Consolidated fi nancial statements 31/12/2008 (in € millions) Grants Loans Impact of change of accounting policy 57.2 (56.3) The impacts on the income statement are not material. 1.3 Change of accounting policy: IFRIC 12 Service Concession Arrangements Interpretation IFRIC 12, published in November 2006, was adopted by the Accounting Regulatory Committee (ARC) on 6 November 2008 and should be ratifi ed by the European Commission during the fi rst quarter of 2009. VINCI has elected to apply its principles as from the 2008 balance sheet date as it considers that this Interpretation enables better fi nancial information to be given. 1.3.1 Accounting treatment of concession agreements under IFRIC 12 The application scope of IFRIC 12 covers public service concession contracts in which the concession grantor is considered to exercise control over the assets operated. The concession grantor is considered to control the asset if: - the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and what and how the operator will be paid; and - the grantor controls the residual interest in the infrastructure at the end of the arrangement. Under the terms of this Interpretation, the operator has a twofold activity: - a construction activity in respect of its obligations to design, build and fi nance an asset that it makes available to the grantor: revenue is recognised on a stage of completion basis in accordance with IAS 11; - an operating and maintenance activity in respect of the assets under the concession: revenue is recognised in accordance with IAS 18. In return for its activities, the operator receives consideration from either: - users: the intangible asset model applies. The operator has a right to receive tolls (or other payments) from users in consideration for the fi nancing and construction of the infrastructure. The intangible asset model also applies whenever the concession grantor remunerates the concession operator on the basis of the extent of use of the infrastructure by users, but with no guarantees as to the amounts that will be paid to the operator (under a simple pass through or shadow toll agreement). Under this model, the operator’s rights are recognised in the balance sheet under Concession intangible assets. This operating right corresponds to the fair value of the asset under concession plus the borrowing costs capitalised during the construction phase. It is amortised over the term of the arrangement in a manner that refl ects the pattern in which the asset’s economic benefi ts are consumed by the entity, starting from the entry into service of the asset. This treatment applies to most of the infrastructure concessions that are today operated by VINCI, in particular the motorway networks of ASF, Escota and Cofi route, the A19, the A4 Hörselberg in Germany, the Rion-Antirion bridge in Greece, the Athens-Patras-Corinth motorways in Greece and most of the parking facilities managed under concessions by VINCI Park. or - the grantor: the fi nancial asset model applies. The operator has an unconditional contractual right to receive payments from the grantor, irrespective of the amount of use made of the infrastructure. Under this model, the operator recognises a fi nancial asset, attracting interest, in its balance sheet, in consideration for the services it provides (designing, building, operation or maintenance). These fi nancial assets are recognised in the balance sheet under Loans and receivables, for the amount of the fair value of the infrastructure on fi rst recognition and subsequently at amortised cost. It is settled by means of the grantor’s payments received. The fi nancial income calculated on the basis of the eff ective interest rate, equivalent to the project’s internal rate of return, is recognised under operating income. This model applies to the Newport bypass contract in the UK, the Liefk enshoek Tunnel and Coentunnel contracts granted in 2008 (in Belgium and the Netherlands respectively), to some VINCI Park contracts, and to all VINCI’s Public-Private Partnerships in France and PFI (Private Finance Initiative) contracts in the United Kingdom. Under the mixed model, whenever only part of the investment is covered by an unconditional right to receive payments from the grantor, it is recognised as a fi nancial receivable up to the amount guaranteed by the grantor. The unguaranteed balance, of which the amount is dependent on the extent of use of the infrastructure, is recognised as an intangible asset. On the basis of an analysis of VINCI’s existing contracts, this model applies to some VINCI Park contracts. Concession operating assets that are not controlled by the grantor even though they are necessary for the operation of the concession – such as buildings intended for use in the operation, equipment for toll collection, signage, data transmission, and video-surveillance, and vehicles and equipment – are recognised under property, plant and equipment (see Note E.12 “Property, plant and equipment)” and are depreciated over their useful life. The accounting consequences of the application of IFRIC 12 for the Group’s consolidated fi nancial statements are given below (see Note A.1.3.2 “Consequences of the fi rst application of IFRIC 12 for the Group’s consolidated fi nancial statements” and Note A.1.3.3 “Main impacts of the change of accounting policy following application of IFRIC 12).” 173
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2008 ANNUAL REPORT
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KEY FIGURES Revenue by business lin
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PROFILE VINCI, the world’s leadin
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Roads Ranked among the world’s le
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MESSAGE FROM THE CHAIRMAN YVES-THIB
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Our strategy is to maintain a balan
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MANAGEMENT AND CO-ORDINATION COMMIT
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12 GROUP VINCI __ 2008 ANNUAL REPOR
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22 22 GROUP CONCESSIONS VINCI __ 20
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24 04.02.2008 GROUND CONSOLIDATION
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28 02.04.2008 INVENTING TOMORROW’
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32 18.10.2008 COMPREHENSIVE SOLUTIO
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36 24.01.2009 MOBILISATION ON THE G
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BUSINESS REPORT 40. CONCESSIONS 62.
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CONCESSIONS PROFILE VINCI Concessio
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INFRASTRUCTURE MANAGED BY VINCI CON
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VINCI PARK REVENUE BY GEOGRAPHICAL
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PROJECTS UNDER NEGOTIATION Negotiat
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Operation Electronic toll collectio
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THE A11 ANGERS, AN ILLUSTRATION OF
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WOMEN MOVE INTO MAINTENANCE The pro
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FIRST MOBILITY HUB AT LA DÉFENSE A
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Following its complete overhaul, Si
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A MONUMENT OF MODERN GREECE Charila
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6161
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ENERGY PROFILE VINCI Energies is a
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Revenue Revenue by business line 23
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COMPREHENSIVE EQUIPMENT FOR THE THE
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6969
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ROADS PROFILE Eurovia is a world le
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Revenue Operating profi t from ordi
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LONG-HAUL SUPPLY CHAIN In materials
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7 77
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CONSTRUCTION PROFILE French market
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Revenue 15,722 13,653 Revenue by bu
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290 METRE SPAN ACROSS THE ABYSS The
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AN OUTSIZED PORT Refurbished and ex
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Americas > Panama Canal deepening a
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90 BUSINESS REPORT PROPERTY PROPERT
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Report of the Board of Directors Co
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Consolidated fi nancial statements
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Parent company fi nancial statement
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Notes to the fi nancial statements
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Persons responsible for the registr
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Agence Dominique Perrault Architect
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VINCI - 2008 annual report

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