IFRIC 12, service concession arrangements disclosures

VINCI – Annual report – 31 December 2019

Industry: utilities, concessions, construction

12. Detail of main contracts in the Concessions business
The detail of main contracts in the Concessions business are set out by business line in the table below.

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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 (A19, Gefyra, section 1 of the Moscow–St Petersburg motorway, LISEA and Consortium Stade de France). When the contracts end, the concession infrastructure is generally returned 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

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In 2019, acquisitions of concession intangible assets amounted to €1,072 million. They included investments by the ASF group for €419 million (€388 million in 2018), by Arcos for €243 million (€70 million in 2018), by Cofiroute for €158 million (€139 million in 2018) and by VINCI Airports for €190 million (€184 million in 2018).

Concession intangible assets include assets under construction for €1,791 million at 31 December 2019 (€1,210 million at 31 December 2018). These relate to VINCI Autoroutes subsidiaries for €1,617 million (including ASF for €733 million, Arcos for €418 million, Cofiroute for €269 million and Escota for €190 million) and VINCI Airports for €172 million.

In 2018, scope effects at VINCI Airports mainly concerned Belgrade airport in Serbia and Orlando Sanford airport in the United States (Airports Worldwide).

14. Public-private partnership (PPP) contracts recognised using the financial asset model
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 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:

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The part at less than one year is included in the balance sheet under “Other current financial assets”. At 31 December 2019, it amounted to €6 million (€6 million at 31 December 2018).

15. Off-balance sheet commitments made under concession and PPP contracts
15.1 Commitments made in respect of companies controlled by the Group
Contractual investment and renewal obligations

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Contractual investment obligations of motorway concession companies consist mainly of undertakings made under concession contracts, multiyear master contracts as part of the 2015 motorway stimulus plan and the motorway investment plan approved in 2018. In 2019, progress with works by VINCI Autoroutes companies led to a €587 million reduction in their commitments to €1,930 million at 31 December 2019. 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) is generally granted to secure financing arranged within subsidiaries, and breaks down as follows:

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15.2 Commitments made in respect of companies accounted for under the equity method
Contractual investment obligations
At 31 December 2019, the Group’s share of investment commitments given by these companies amounted to €529 million (€642 million at 31 December 2018). 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 (€238 million), a section of the A7 motorway in Germany (€87 million) and Santiago airport in Chile (€63 million).

The €113 million decrease in these commitments during the year was due to progress with works carried out on projects, particularly works on the motorway between Moscow and St Petersburg, Santiago airport in Chile and the 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 2019 was €42 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 €20 million, Synerail (GSM-Rail – Global System for Mobile communication-Railway public-private partnership contract) for €12 million and SMTPC (the holder of the concession for the Prado Carénage road tunnel in Marseille) for €10 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 2019, those commitments amounted to €85 million (€162 million at 31 December 2018). They mainly concern the company holding the concession for Santiago airport in Chile for €39 million (€87 million at 31 December 2018).