CFE - 2006 annual report - Vinci
CFE - 2006 annual report - Vinci CFE - 2006 annual report - Vinci
M. Construction contracts When the outcome of a construction contract can be reliably estimated, revenue and cost of the contract are recognized respectively in revenue and charges depending of the level of completion of the activity of the contract at year-end (% of com- pletion method). An expected loss on the construction contract is immediately recognized in charges. According to the percentage of completion method, revenue of the contracts is recognized in the income statement of the periods of the works done. Costs of the contract are usually recognized in charges under the income statement of the periods during which work related is achieved. Costs incurred related to future activities on the contract are capitalized if it is probable that it will be recovered. The group CFE has taken the option to not present separately the information related to construction contracts in the balance sheet but only in the notes. N. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. O. Impairment The carrying amounts of the company’s non current assets, other than financial assets in accordance with IAS 39, deferred tax assets and non current assets held for sale, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For intangible assets that are not yet available for use, and for goodwill amortized over a period exceeding twenty years from initial recognition, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement. 1. Calculation of recoverable amount The recoverable amount of the company’s investments in debt securities and receivables originated by the company is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. The recoverable amount of other assets is the greatest of their net selling price and value in use. The value in use is the dis- counted value of estimated future cash flows. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash- generating unit to which the asset belongs. 2. Reversal of impairment An impairment loss in respect of investments or receivables originated by the company is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific external event of an excep- tional nature, which is not expected to recur, and the increase in recoverable amount relates clearly to the reversal of the effect of that specific event. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. 1 2 1
1 2 2 P. Share capital Own shares purchase When shares capital (recognized as equity) is repurchased, the amount of the consideration paid, including directly attribu- table costs, is recognized as a change in equity. Repurchased shares are directly included in equity, without any impact on the income statement. Q. Provisions Provisions are recognized when the company has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable esti- mate of the amount of the obligation can be made. The amount recognized as provision corresponds to the best estimate of the necessary expenditure to stop the current obligation at the balance sheet date. This estimation is obtained by using a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provisions for restructuring are recognized when the company has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Costs relating to the ongoing activities of the company are not provided for. The current provisions correspond to the provisions directly related to the operating activities of each site, whatever their esti- mated due date. The provisions for after-sale services are recognized in respect of the entities obligations of the group of legal guarantees con- cerning sites delivered. A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provisions for claims related to the activity concern mainly client claims, sub-contractors, co-contractors and suppliers claims. The other provisions for current risks are mainly composed of provisions for penalties and other risks attached to the operating cycles. The non-current provisions correspond to the provisions not directly linked to the operating cycle and for which the due date is generally greater than one year. It includes in particular provisions for restructuring, when these have been announced before the closing date of the exercise. R. Employee benefits 1. Post employment benefits Post employment benefits include pension plans and life insurances. The company operates a number of defined benefits and defined contribution plans throughout the world. The assets of which are generally held in separate trustee-administered funds and financed through contributions from subsidiaries and from employees. These contributions are determined on basis of independent actuarial recommendations. The pension benefits obligations at the group CFE are either covered or non-covered by funds. a) Defined contribution plans Contributions to defined contribution plans are recognized as an expense in the income statement when incurred. C F E F I N A N C I A L R E P O R T 2 0 0 6 I 1 2 6 t h C F E F I N A N C I A L R E P O R T 2 0 0 6 I c o r p o r a t e f i n a n c i a l y e a r 1 2 6 t h c o r p o r a t e f i n a n c i a l y e a r
- Page 71 and 72: 7 0 In Richard’s Bay, South Afric
- Page 73 and 74: 7 2 ● Venezuela DI further consol
- Page 75 and 76: 7 4 DEC was selected as one of the
- Page 77 and 78: 7 6 Financial report Corporate gove
- Page 79 and 80: 7 8 Table of contents Corporate gov
- Page 81 and 82: 8 0 Corporate governance 1. Composi
- Page 83 and 84: 8 2 Bernard Huvelin VINCI 1, cours
- Page 85 and 86: 8 4 Co-opted Director whose nominat
- Page 87 and 88: 8 6 2. Operation of the Board of Di
- Page 89 and 90: 8 8 2.2 The Appointments and Compen
- Page 91 and 92: 9 0 3.3 Compensation of the Managin
- Page 93 and 94: 9 2 Remuneration of the auditors of
- Page 95 and 96: 9 4 Dredging & environment segment
- Page 97 and 98: 9 6 Contribution to the net resultp
- Page 99 and 100: 9 8 B. Risk factors 1. Risks common
- Page 101 and 102: 1 0 0 1.3 Management and workforce
- Page 103 and 104: 1 0 2 C. Insurance policy The CFE g
- Page 105 and 106: 1 0 4 6. Discharge to be given to t
- Page 107 and 108: 1 0 6 Definitions Associates Capita
- Page 109 and 110: 1 0 8 Transactions in 2005 1. Const
- Page 111 and 112: 1 1 0 Consolidated balance sheet Fo
- Page 113 and 114: 1 1 2 Statement of changes in Equit
- Page 115 and 116: 1 1 4 Notes to the consolidated fin
- Page 117 and 118: 1 1 6 The Financial Statements prep
- Page 119 and 120: 1 1 8 F. Goodwill 1. Goodwill Goodw
- Page 121: 1 2 0 Leases of assets under which
- Page 125 and 126: 1 2 4 T. Trade and other payables T
- Page 127 and 128: 1 2 6 X. Derivative financial instr
- Page 129 and 130: 1 2 8 Revenue (in thousand Euro) 20
- Page 131 and 132: 1 3 0 Balance sheet at December 31
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- Page 135 and 136: 1 3 4 Income statement 4. Revenue f
- Page 137 and 138: 1 3 6 9. Income tax expenses Recogn
- Page 139 and 140: 1 3 8 10. Profit per share The basi
- Page 141 and 142: 1 4 0 Assets items under lease Cert
- Page 143 and 144: 1 4 2 14. Intangible assets other t
- Page 145 and 146: 1 4 4 15. Investments available for
- Page 147 and 148: 1 4 6 17. Other non current assets
- Page 149 and 150: 1 4 8 21. Cash and cash equivalents
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- Page 153 and 154: 1 5 2 Interest rate risk The group
- Page 155 and 156: 1 5 4 26. Financial debts As per De
- Page 157 and 158: 1 5 6 29. Other commitments granted
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- Page 161 and 162: 1 6 0 List of the most important su
- Page 163 and 164: 1 6 2 C F E F I N A N C I A L R E P
- Page 165 and 166: 1 6 4 Statutory financial statement
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1 2 2<br />
P. Share capital<br />
Own shares purchase<br />
When shares capital (recognized as equity) is repurchased, the amount of the consideration paid, including directly attribu-<br />
table costs, is recognized as a change in equity. Repurchased shares are directly included in equity, without any impact on<br />
the income statement.<br />
Q. Provisions<br />
Provisions are recognized when the company has a present legal or constructive obligation as a result of past events, when it is<br />
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable esti-<br />
mate of the amount of the obligation can be made.<br />
The amount recognized as provision corresponds to the best estimate of the necessary expenditure to stop the current obligation<br />
at the balance sheet date. This estimation is obtained by using a pre-tax rate that reflects current market assessments of the time<br />
value of money and, where appropriate, the risks specific to the liability.<br />
Provisions for restructuring are recognized when the company has approved a detailed and formal restructuring plan, and the<br />
restructuring has either commenced or has been announced publicly. Costs relating to the ongoing activities of the company are<br />
not provided for.<br />
The current provisions correspond to the provisions directly related to the operating activities of each site, whatever their esti-<br />
mated due date.<br />
The provisions for after-sale services are recognized in respect of the entities obligations of the group of legal guarantees con-<br />
cerning sites delivered.<br />
A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower<br />
than the unavoidable cost of meeting its obligations under the contract.<br />
The provisions for claims related to the activity concern mainly client claims, sub-contractors, co-contractors and suppliers<br />
claims. The other provisions for current risks are mainly composed of provisions for penalties and other risks attached to the<br />
operating cycles.<br />
The non-current provisions correspond to the provisions not directly linked to the operating cycle and for which the due date is<br />
generally greater than one year. It includes in particular provisions for restructuring, when these have been announced before the<br />
closing date of the exercise.<br />
R. Employee benefits<br />
1. Post employment benefits<br />
Post employment benefits include pension plans and life insurances.<br />
The company operates a number of defined benefits and defined contribution plans throughout the world. The assets of which are<br />
generally held in separate trustee-administered funds and financed through contributions from subsidiaries and from employees.<br />
These contributions are determined on basis of independent actuarial recommendations.<br />
The pension benefits obligations at the group <strong>CFE</strong> are either covered or non-covered by funds.<br />
a) Defined contribution plans<br />
Contributions to defined contribution plans are recognized as an expense in the income statement when incurred.<br />
C F E F I N A N C I A L R E P O R T 2 0 0 6 I 1 2 6 t h C F E F I N A N C I A L R E P O R T 2 0 0 6 I c o r p o r a t e f i n a n c i a l y e a r<br />
1 2 6 t h c o r p o r a t e f i n a n c i a l y e a r
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