2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

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 2010, compared with €2,266 million at 30 June 2010and €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 2010 30 June 2010 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 2010 financial statements (or in the 2009 financialstatements).NOTE 16. IMPAIRMENT OF NON-CURRENT ASSETSNote 16.1. Movements for the periodGoodwill and other non-financial non-current assets were tested forimpairment at 31 December 2010 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 2010, 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 Monoprix 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 2010 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 2010 | Casino Group89