IFRIC 12, service concession arrangements disclosures

VINCI – Annual report – 31 December 2020

Industry: utilities, concessions, construction

VINCI – Annual report – 31 December 2020

12. Details of the main contracts in the Concessions business

Details of the main contracts in the Concessions business are set out by business line in the table below.

Certain contracts may benefit from investment grants from the grantor. This relates mainly to contracts under the financial asset model and certain contracts with traffic level risk (Arcour (A19), Gefyra, section 1 of the Moscow–St Petersburg motorway, LISEA and Consortium Stade de France). When the contracts end, the concession infrastructure is returned in principle to the grantor for no consideration. In the event that the contract is terminated or the concession asset is bought out early by the grantor, compensation is generally payable to the concession holders. Its amount is determined in accordance with contractual or statutory provisions.

13. Concession intangible assets

In 2020, acquisitions of concession intangible assets amounted to €851 million. They included investments by the ASF group for €253 million (€419 million in 2019), by Cofiroute for €174 million (€158 million in 2019), by Arcos for €107 million (€243 million in 2019) and by VINCI Airports for €247 million (€190 million in 2019).

Concession intangible assets include assets under construction for €1,697 million at 31 December 2020 (€1,775 million at 31 December 2019). These relate to VINCI Autoroutes subsidiaries for €1,344 million (including Arcos for €570 million, ASF for €328 million, Cofiroute for €310 million and Escota for €134 million) and VINCI Airports for €346 million.

14. PPP financial receivables (controlled companies)

The main PPP contracts operated by Group subsidiaries are presented on the asset side of the consolidated balance sheet for their part at more than one year under “Other non-current financial assets” and concern:

  • Caraibus (right-of-way public transport system in Martinique): this contract is recognised under the financial asset model;
  • MMArena (Le Mans stadium in France) and Park Azur (business complex for car rental firms at Nice-Côte d’Azur Airport in France): both contracts are recognised under the bifurcated model (intangible asset and financial asset).

Their change during the period and their breakdown by maturity are as follows:

15. Off-balance sheet commitments in the Concessions business

15.1 Companies controlled by the Group

Contractual investment and renewal obligations

Contractual investment obligations of motorway concession companies consist mainly of undertakings made under concession contracts, multi-year master contracts as part of the 2015 motorway stimulus plan and the motorway investment plan approved in 2018. In 2020, progress with works by VINCI Autoroutes companies led to a €464 million reduction in their commitments to €1,465 million at 31 December 2020.

The above amounts do not include obligations relating to maintenance expenditure on infrastructure under concession, in respect of which specific provisions based on maintenance plans are set aside (see Note H.19.3, “Breakdown of current provisions”).

Where the financial asset or bifurcated model applies, subsidiaries receive a guarantee of payment from the concession grantor in return for their investment commitment.

Collateral security connected with financing

Collateral security (in the form of pledges of shares and mortgages on building land) is generally granted to secure financing arranged within subsidiaries, and breaks down as follows:

15.2 Companies accounted for under the equity method

Contractual investment obligations

At 31 December 2020, the Group’s share of investment commitments given by these companies amounted to €344 million (€529 million at 31 December 2019). They relate mainly to projects involving infrastructure under construction in the Concessions business, the Via 40 Express motorway between the cities of Bogotá and Girardot in Colombia (€261 million) and a section of the A7 motorway in Germany (€38 million).

The €186 million decrease in these commitments during the year was due to progress with works carried out on projects, particularly works on Santiago Airport in Chile and on a section of the A7 motorway in Germany.

Collateral security connected with financing

Collateral security has been granted in the form of pledges of shares in companies accounted for under the equity method. The net carrying amount of the shares pledged at 31 December 2020 was €43 million and included shares in WVB East End Partners (the company holding the concession for the Ohio River Bridges – East End Crossing project in the United States) for €18 million, Synérail (the PPP contract for the GSM-Rail system, under the Global System for Mobile communications – Railway standard) for €12 million and SMTPC (the holder of the concession for the Prado Carénage road tunnel in Marseille) for €11 million.

Funding commitments

The Group has made commitments to provide funding (capital and/or subordinated loans) to companies accounted for under the equity method. At 31 December 2020, those commitments amounted to €32 million (€85 million at 31 December 2019). They mainly concern the company holding the concession for Santiago Airport in Chile for €14 million at 31 December 2020 (€39 million at 31 December 2019) and the A7 motorway project in Germany for €13 million.