2008 ANNUAL REPORT INDEX
Asfa: professional motorways and roadworks association. CHSCT: health, hygiene, safety and working conditions committee. Interchange: has at least one motorway exit or entry linking to the road network. It can be complete (if it allows motorway entry and exit in both directions) or incomplete. An incomplete or “partial” interchange provides motorway entry and exit only in a single direction. EBITDA: rearnings before interest, taxes, depreciation and amortisation. Hotspot : lieu public délimité donnant accès à un réseau sans fil (radio) qui permet aux utilisateurs de terminaux mobiles (PC portables, assistants personnels) de se connecter à Internet. GPEC: management planning of jobs and skills. Hotspot: a delimited public space providing access to a wireless (radio) network allowing users of mobile terminals (laptop computers or personal digital assistants) to connect to the Internet. ICAS: additional investments in working motorways. Interest during production: service fee when there are several suc- cessive releases for a given loan. NAO: obligatory annual negotiations. PADD: sustainable development action plan. PL: HGV. PMV: variable message panels. Setra: French government entity that conducts technical studies related to roads and motorways VL: light vehicles. Wi-Fi : (Wireless Fidelity): short range wireless telecommunications network technique (based on the IEEE 802.11 standard) developed to establish internal radio networks and which has since become a means of providing broadband access to the Internet. Wimax : (Worldwide Interoperability for Microwave Access): long range (up to 70 km) wireless telecommunications network technique (based on the IEEE 802.16 standard) which, in the future, will enable the introduction of extended broadband radio networks (up to 70 Mbit /s). GROUP DESIGNING AND INNOVATING FOR THE LONG TERM P. 2 Message from the Chairman p. 4 2008 in facts and figures p. 6 Company organisation and ownership p. 8 Strategy and development p. 10 ACTIVITIES PROTECTING AND SERVING CUSTOMERS EFFICIENTLY P. 14 Investments p. 16 Traffic and toll plazas p. 18 Customer safety and services p. 20 Technologies and telecommunications p. 22 COMMITMENTS CONTROLLED INTERACTION AND SHARING OF OUR DEVELOPMENT P. 24 Human resources p. 26 Sustainable development p. 28 Commitments p. 32 Innovation p. 34 APRR NETWORK 1,821 KM AREA NETWORK 413 KM A5 Paris (La Francilienne) – Langres 248 km A43/A430 Lyon – Chambéry – Albertville 124 km (of which A105 [formerly A5b]: 10 km) A48 Coiranne – Grenoble 50 km A6 Paris (Saint-Germain/École) – Lyon (Limonest) 401 km A41 Chambéry-Nord – Annecy – Autoroute Blanche 77 km A19 Sens – Courtenay 31 km A41 Chambéry-Sud – Grenoble 51 km A26 Troyes-Nord – Troyes-Est 22 km A49 Grenoble – Valence 62 km A31 Beaune – Toul (of which A311: 4 km) 232 km A432 Saint-Laurent-de-Mure – A43 4 km A36 Beaune – Mulhouse 217 km A51 Grenoble – col du Fau 26 km A39 Dijon – Bourg-en-Bresse (of which A391: 5 km) 150 km A41* (Liane) Annecy – Genève 19 km A40 Mâcon – Bellegarde (Châtillon-en-Michaille) 104 km A404 Antenne d’Oyonnax 21 km A42 Lyon – Pont-d’Ain 49 km A432 La Boisse – Saint-Laurent-de-Mure 20 km A46 Anse – Neyron 26 km A71 Bourges – Clermont-Ferrand (of which A710: 2 km) 181 km A719 Antenne de Gannat 10 km A77 Dordives – Cosne-sur-Loire 101 km Tunnel Maurice-Lemaire (of which 4 km access) 11 km
EXTENSION PROJECTS FOR 2012 A406 Mâcon south bypass 9 km A432 Les Échets – La Boisse 12 km A714 Montluçon slip road 9 km A719 Gannat – Vichy 14 km * Adelac concession. SERENELY ACCOMPANYING ALL YOUR TRAVEL MOVEMENTS
Every day, APRR employees strive to make travel easier for all their customers. The Group has an ongoing commitment to ensuring your safety, simplifying and smoothing your travel movements, giving you the best possible service at toll plazas and rest & service areas, and contributing to the development of the regions served. APRR, providing mobility and serenity for all. COMMITMENTS FAVOURING SUSTAINABLE DEVELOPMENT
CUSTOMERS
E1 • Improve network safety on a regular basis. E2 • Encourage customers to adopt safer, more considerate behaviour. E3 • Provide customers with a quality service, including optimal comfort and traffic flow.
EMPLOYEES
E4 • Foster collective and individual development for Group employees, and prepare them for the activities of the future. E5 • Ensure that employee safety remains a focal point of our work practices. E6 • Strengthen social cohesion through constructive internal dialogue that fully addresses the concerns of those working in the field.
ENVIRONMENT
E7 • Help with research into the impact of motorways on the environment and on public health. E8 • Cooperate with stakeholders to preserve the environment - including the living environment - when structures are at the design and construction stages, and throughout their useful lives. E9 • Promote a rate structure that takes account of vehicles' emission levels on the network
TERRITORY
E10 • Foster actions aimed at developing tourism and the economy in general in the territories served by our networks. E11 • Continue working in partnership to evaluate the environmental and socio-economic impacts of the motorway. E12 • Use our know-how to help develop economically-viable projects encouraging multimodality. th APRR Group is Europe’s 4th largest motorway operator and a subsidiary of Eiffarie, the consortium formed by Eiffage (majority interest) and Macquarie*. The Group operates a network of 2,234 km of motorways of a possible 2,279 km granted under concession from the French Government. 4 * Macquarie Infrastructure Group and Macquarie European Infrastructure Fund. Network Our network notably includes the Paris – Lyon corridor (A5, A6, A39), a Bourgogne – Northern Europe link (A31 and A36), motorways crossing the Alps in the Rhône-Alpes region (A40, A41, A42, A43, A48, A49 and A51 Nord) and motorways in central France (A77 and A71).
In 2008, 20 billion kilometres were driven on the Group’s network, 20 making it one of Europe’s key infrastructures.
The group generated consolidated sales of €1,834 in 2008 and net 1834 profit of €333 million.
Over 4 000 Over 4,000 employees provide our customers with high performance, service and innovation.
DESIGNING AND INNOVATING FOR THE LONG TERM
GROUP
The APRR group invests constantly to prepare for tomorrow. It is committed to simplifying the mobility of persons and goods, and contributing to local economic development. The Group owes it to each of its customers to develop and apply relevant policies. MESSAGE FROM THE CHAIRMAN
The key news in 2008 was the decrease in the number of deaths due to traffic accidents from 61 to 31, although it should not be forgotten that this took place at a time of rising fuel costs. Most performance indicators (p. 31) affecting customers and employees, already at an excellent level, are also continuing to improve.
Moreover, financial results held up despite the diminishing traffic level, a factor that has accelerated in early 2009.
The ongoing drive to develop and improve toll network automation, and the experimental use of drive-through barriers, reveal the value of the French motorway model, which provides customers with constantly improving levels of safety and service within the framework of company agreements signed with the State.
Following the Coynelle–Col-du-Fau section of the A51 in 2007, the opening of Liane (Annecy-Geneva) on the A41 Nord provides a fine example of an Alpine motorway that respects the environment while boosting economic development. Let’s hope that we soon see a similar motorway link between Grenoble and Gap!
Jean-François Roverato Chief Executive Officer, APRR 04 APRR 2008 ANNUAL REPORT 2008 IN FACTS AND February May/June FIGURES Working to improve customer Drowsiness at the wheel. safety in tunnels. Driver awareness campaign An information brochure entitled covering APRR and AREA “Adoptez la bonne conduite networks. en tunnel” (tunnel safety tips) Works on the A406 motorway was published and distributed for the Mâcon south bypass. to 800,000 customers using Beginning of works with the 11 tunnels. the construction of two
en c underpasses running below Que faire... w w w w w w w w w w the A40 motorway and the RD w w w w w w w w w w w w w w w Bons réflexes à avoir en tunnel signalisation Les tunnels ont unerespectez-la ! particulière, A year dedicated Suivez les instructions Coupez le m laissan 1079 road. données par le personnel contact autoroutier, par les services de secours ou par les panneaux d’information lumineux.
Respectez les to consolidation and innovation distances de sécurité. Discovering the motorway Allumez vos feux de télé croisement. professions. 6 and 7 June: jamais Ne faites demi-tour.
Écoutez la radio autoroutière, two days to learn about FM 107.7.
Pensez au gilet de sécurité si vous avez à sortir de votre véhicule. the work of the response, Respectez l’arrêtfixe ouabsolu au feu rouge clignotant, comme aux barrières d’arrêt. maintenance and toll-plaza Vérifiez votre niveau de carburant. teams.
1,803 1,834
864 887
2007 2008 2007 2008 343 362 +1.7% +2.7% 2007 2008 Sales Operating profit on +5.4% (€m) ordinary activities (€m) Net finance costs (€m)
October Following four years of major Paris Motor Show. modernisation works, Nearly 70 people took their reopening of the fully turn at the trade show to renovated Maurice-Lemaire inform visitors of the Group’s tunnel. Now provided with activities and innovations, the latest equipment, drivers and to commercialise the are guaranteed the highest electronic toll subscription possible level of safety. system: 1,444 badges sold! Completion of the renovation and safety works on the Saint- Germain and Châtillon tunnels. New equipment has been installed to optimise fire safety, provide drivers with real-time information and ensure rapid assistance in the event of an incident. How to use the hard shoulder. Awareness campaign from 13 October to 16 November. On the programme: displays at toll plaza entrances, messages on variable message panels, and 06 press releases. July/August “Soleil, mythes et réalités” Sharing the motorway. Launch (sun, myths and realities), of a road safety campaign a free exhibition. Presented aimed at HGV and car drivers. all through the summer on the Venoy-Grosse-Pierre Introduction of Bali, rest area (A6). Its purpose is an automatic electronic toll to help drivers understand badge distributor. the environment and energy This initiative, a first in France, management. allows drivers to obtain a “Liber-t balade” badge that Beginning of works on the is immediately functional A432 Les Echets – La Boisse, throughout the French a new Dombes and Côtière motorway network. route programmed to open in 2011. The A432 will provide a safer, better flowing and more 7,349 reliable itinerary for users and 6,921 local inhabitants.
1,208 1,244 498 688 689 341 333 488 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 -2.4% +3.0% +2.0% +0.2% +6.2% Net profit EBITDA Investments Cash flow Borrowing (€m) (€m) (€m) from operations (€m) (€m)
December Two new Park+ secure Beginning of preparatory works truck parking facilities for the Montluçon motorway slip on the A105 and the A43. road (A714). Programmed to Offering seven-day, 24-hour continue through to October security and useful services, 2009, they concern these facilities provide archaeological diagnostics, protection for goods and network diversions, the comfort for drivers. widening of seven engineering Opening of Liane. It takes structures and the restoration less than half an hour to of the associated roadways. drive from Annecy to Geneva Opening to traffic of along this section of the A41 150 kilometres of three-lane motorway between motorway in both directions Saint-Julien-en-Genevois – on the A31 and 17 kilometres Villy-le-Pelloux – Saint-Martin- on the A36 between Bellevue. Belfort-centre and Sochaux-Exincourt.
APRR 2008 ANNUAL REPORT COMPANY ORGANISATION AND OWNERSHIP
Executive Committee Board of Directors at 17 December 2008 Jean-François Roverato Vincent Lang Chairman and Chief Executive Chief Financial Officer Officer of APRR Jean-François Roverato John Hughes Chairman of AREA Jean-René Argouarc’h Chairman and Chief Executive Chief Executive Officer, Macquarie Operations Manager, APRR Officer, Eiffage Infrastructure Group Philippe Nourry Chief Operating Officer of Jean-Charles Dupin Bruno Angles Andrew Hunter APRR Operations Manager, AREA Senior Vice President, Head of France Executive Director, Head of Chief Executive Officer AREA Macquarie European Macquarie Europe Infrastructure Funds, Macquarie Patrick Boccardi Capital Funds François Massé Company Secretary Deputy Managing Director, Eiffage Director of Human Resources Gérard Bailly Senator, Jura Ross McInnes Vice Chairman Louis de Broissia Macquarie Capital Europe Ltd Senator, Côte-d’Or Arnaud Montebourg Philippe Delmotte Member of Parliament and Director, Eiffage Chairman of the Saône-et-Loire General Council Robert Galley Former Minister Max Roche Finance Director, Eiffage
Stock exchange and shareholders
APRR Group has been listed Place of listing: Euronext on the Paris Stock Exchange compartiment A, Euronext Paris since November 2004. Type: ordinary shares, local At 31 December 2008, securities the registered share capital ISIN code: FR 0006 807 004 amounted to €33,911,446.80, First listed: 24 November 2004 consisting of 113,038,156 shares Eligibility: personal equity plans with a par value of €0.30 each. (Plan d'Epargne en Actions - PEA) and deferred settlement service (Service à Règlement Différé - SRD) Index: CAC AllShares Codes: Bloomberg: ARR FP – Reuters: ARR.PA 08 Breakdown of share capital at 31 December 2008
10.49% 0.79% Cypress Elliott International LP* Holding AB* 6.52% Public
0.72% The Liverpool Ltd. Partnership* 81.48% Eiffarie
* Cypress Holding AB, Elliott International LP and The Liverpool Ltd Partnership, which are acting in concert, owned 13,576,026 shares representing 12.01% of the capital and 12.01% of voting rights on the date of this report.
APRR share - Average share price and trading volumes in 2008
Share price (€) Volume
80 120,000
100,000 70 80,000
60 60,000
40,000 50 20,000
40 0 January February March April May June July August September October November December
APRR 2008 ANNUAL REPORT STRATEGY AND DEVELOPMENT
Developing the network to serve customers better Despite the economic and financial context, network customer services have continued to develop. Although traffic levels have dropped slightly for the first time, the Group continues to grow. The four key components of APRR’s business strategy were pursued in 2008, and the Group progressed in line with its commitments to further enhancing safety, increasing the services offer and customer satisfaction, developing the network and improving economic performance.
Further improving customer and employee safety
Safety remains a major concern for APRR. In addition There are regular road safety to ongoing investment to deal with critical areas on carriageways and in tunnels, a large number of measures campaigns to improve driver behaviour have been taken in the field to address events in real-time, examples being awareness campaigns prior to critical events such as two-way summer peaks and severe winter weather. 10 Concerning personnel safety, 2008 saw the Group consolidate the remarkable results obtained in 2007: 67 work accidents with medical leave were registered, compared with 62 in 2007 and 89 in 2006. For both APRR and AREA, frequency rates are lower than 11.5, which is better that the average ratios in the profession.
Expanding the services offer
Improving customer service quality, which is one of the APRR group’s main priorities, involves: • creating and extending truck parking facilities at our service and rest areas; • establishing a network of secure truck parking facilities. There are currently three of these “Park+” facilities on The Group also takes long-term measures aimed at the network; improving customer behaviour. The number of physical • improving and enhancing rest and service areas; injuries linked to traffic accidents continued to fall in 2008 • providing greater levels of traffic information; as did the number of deaths which, over the entire network, • carrying out major network maintenance works during was virtually halved from 61 to 31. To further improve these the night to reduce inconvenience to customers. results, road safety campaigns are regularly launched, In 2008, electronic toll subscriptions represented nearly both by ASFA (Association of toll motorways and structures) 40% of transactions, a level that is increasing rapidly and by the APRR group. Among other things, they address thanks to the successful rollout for trucks and growing drowsiness at the wheel and the dangers of alcohol. popularity among car-users.
Two new secure truck parking facilities
Following the opening, in October and international truck drivers in video surveillance and guard 2006, of the first Park+ truck transit along the North/South service; parking facility in Langres on the corridor (Italy, Spain), these two • driver comfort: dining area A31 motorway and the 40% new stopover points are a welcome (cafeteria & bar), relaxation room increase in its use over a one-year addition to existing infrastructures with satellite TV, washrooms period, the APRR group has on the French motorway network. (toilets and showers), WiFi access expanded its offer by opening two Open to trucks only, Park+ facilities and service station (cigarettes, similar facilities on strategic provide a complete range of services press, ATM, etc.). motorway corridors, the first on guaranteeing: These infrastructures meet the A5b to the south-east of Paris • security for goods: maximum the needs of carriers and and the second on the A43 in the security with fencing over two their customers. Rhône-Alpes region. For French metres high, seven-day 24-hour
APRR 2008 ANNUAL REPORT STRATEGY AND DEVELOPMENT
The remote operation programme for toll plazas with low traffic levels is being continued on the APRR and AREA Improving customer service networks: at end-2008, 90 sites were remotely operated, compared with 66 at end-2007. quality is a priority for the APRR Group
Developing the network
Significant improvements were made to the network in 2008: • the Maurice-Lemaire tunnel was opened to traffic after APRR, an expert in Singapore four years of modernisation works and the construction of a safety gallery; Following a call for tenders launched by the Singapore • safety works were completed in the Châtillon and Land Transport Authority to ensure safety in its KPE (Kallang Saint-Germain tunnels on the A40 motorway, allowing Paya Lebar Expressway) urban tunnel currently under the APRR group to comply fully with the Mont-Blanc construction, APRR was awarded the contract alongside Tropex and Setec. A team of three permanent experts was directive six years ahead of the cut-off date set by formed to evaluate, both on site and remotely, all aspects of the government. the tunnel’s safety and its compliance with international At the end of the year, the Group also opened 75 kilometres standards. All three worked for over two and a half years of a new third lane on the A31 motorway between Beaune before authorising the opening of a first three kilometre section of the tunnel in autumn 2007, followed by the entire and Langres, and 18 kilometres of a new third lane on the nine kilometres of the KPE tunnel in September 2008. A36 motorway between Belfort and Montbéliard. On 22 December 2008, Adelac (an AREA subsidiary) opened the new section of the A41 Nord motorway to traffic. Known as “Liane”, it provides a direct 19-kilometre link between Annecy and Geneva. This motorway section €1,834 million. Thanks to the continuing toll plaza is remarkable both for the quality of the works and its modernisation programme and to measures aimed at particularly successful integration into the environment. simplifying the organisation and controlling operational The extension to the APRR network has now entered costs, EBITDA and the EBITDA margin continued to a new phase with several construction projects such as progress, with the latter reaching 67.8%, as against 67% the A432 Les Échets – La Boisse section, the A406 southern in 2007 and 64% in 2006). The net result fell slightly from Mâcon bypass and the A714 Montluçon slip ramp. €341 million in 2007 to €333 million in 2008. The APRR group is willing to maintain this progression in results Improving economic performance which benefit all employees through profit-sharing agreements. To this end, it is committed to increasing its Due to runaway fuel costs and the economic and financial toll plaza productivity gains, further reducing its external crisis, APRR’s overall traffic fell by 1.2% in 2008. Despite acquisition costs and continuing to optimise its this drop, the Group’s turnover increased by 1.7% to organisation and internal workings.
Liane finally inaugurated!
After a 20 year wait, the opening of the A41 Nord motorway now means that Annecy and Geneva are less than 30 minutes’ drive from one another. Called “Liane”, i.e. forest vine – a name evoking fluidity and an acronym for Liaison Annecy-Nord Express – it is 19.3 kilometres long and will carry nearly 23,000 vehicles a day. The works were marked by their complexity and speed, and involved clearing a path through a mountainous region while respecting the integrity of the landscapes along the route. The motorway comprises 30 standard engineering structures, a 3.1 kilometre dual tube tunnel, a partially covered trench, four viaducts, a partial interchange and a toll approach. Technical prowess and rapid execution saw the works completed in just 38 months. A job well done! EIFFAGE : has developed significant activities as a concession operator
Over more than three decades, Eiffage has built up a portfolio of infrastructure concessions located mainly in France. In addition to designing and building these infrastructures, Eiffage is involved in structuring project financing, and operates the facilities over the term of the concessions. It was to this end that Eiffage become one of the two core shareholders of APRR Group at the start of 2006. 5%€ +increase in sales to 13,226 million
On 20 February 2006, the French State transferred the control of APRR – and therefore of AREA – to Eiffarie, a company controlled Operating profit on ordinary activities of by Eiffage, which owns 50% plus one share of the capital, and by Macquarie, which owns the rest. Since then, Eiffage has shared its expertise with APRR and helped define the Group’s strategic € orientations. 1,104 million
2008 was marked by further major investments in the motorways under concession, with work carried out notably on the Pau-Langon Net profit (group share) of section of the A65 motorway. For this project undertaken by Eiffage (65%) and Sanef (35%), APRR acted as project consultant. € The objective is to link the French city of Pau to the regional capital, 301 million Toulouse, Pau being the only major city in the Aquitaine region without such a connection.
The Millau Viaduct recorded a 3.04% increase in traffic compared with 2007, with 4,670,449 vehicles making the crossing. As the most direct link between Spain and the Paris region, it rapidly won over additional haulage companies. Some 392,048 heavy goods vehicles crossed the viaduct, an increase of 30,000 over 2007. This represents an average of 1,071 heavy goods vehicles per day over 366 days, or 1,568 per working day. Heavy goods vehicle now account for 8.39% of total traffic. Finally, developments involving Eiffage are afoot in France and elsewhere in Europe concerning concessions for which APRR Group would be the operator.
APRR 2008 ANNUAL REPORT
PROTECTING AND SERVING CUSTOMERS EFFICIENTLY
ACTIVITIES
APRR employees work continually to ensure the safety of their customers and provide them with optimal service throughout the network. It is incumbent upon the Group to provide each of its customers with reliable, high quality services. INVESTMENTS
Investing to improve In 2008, network investments represented €498.4 million, infrastructures and services covering new constructions (€80.5 million), network improvements (€303.1 million) and operating assets To provide its customers with the best (€92.2 million, of which €33 million of road resurfacing infrastructures and services, the APRR Group material and €22.5 million of associated costs, i.e. is pursuing its investment programme in line immobilised production plus interest during construction). with the management contract. Whether for new New constructions constructions, maintenance or network improvements, it does all it can today to prepare Preparatory works for three operations forming part of the 2004-2008 management contract were begun in 2008. for tomorrow. These concerned: • A406 motorway, Mâcon southern bypass, essentially works on civil engineering structures; • A432 Les Échets – La Boisse motorway where works have begun at both ends: on the A46 side with bridges for the future motorway interchange and the railway line structure and, on the A42 side, with the Côtière viaduct, the key element of the project; • finally, the A714 motorway, with the Montluçon motorway slip ramp and bridge widening. The Group is committed to opening these three new links, representing a total length of 30 kilometres, between late €498.4 million 2010 and 2011. invested into new constructions, improving the existing network Additional investments on motorways in service (ICAS) and renewing equipment The Group maintains and improves its network by making steady investments into: • widening to three lanes; • new interchanges; • extending and renovating a large number of service and rest areas; • creating new interchanges and junctions;
Maurice-Lemaire :
Following four years of major modernisation works, the Maurice-Lemaire tunnel was opened to traffic on 1 October 2008. This toll structure, which is the longest road tunnel fully within France (6,950 metres), links Alsace and Lorraine, crossing through the Vosges mountain range in the heart of the Ballon des Vosges natural 16 park. Provided with all the Consolidated data for the Group (€ million) 2006 2007 2008 Construction 44.7 24.1 80.5 Additional investments on motorways in service 215.3 342.5 303.1 Road widening 69.7 163.7 182.1 Road interchanges 16.7 8.9 4.0 Toll plazas 7.7 11.7 8.4 Rest & service areas 7.8 22.4 12.4 Operational systems 6.2 5.0 3.8 Tunnels 68.7 91.2 52.0 Engineering structures other than tunnels 1.2 2.0 2.4 Buildings 4.5 4.7 6.2 Roadways 13.8 14.2 8.1 Environment (water and noise) 10.0 10.1 13.8 Safety 5.9 6.5 6.5 Other additional investments on motorways in service 3.1 2.3 3.4 Costs associated with production plus interest during production 19.0 23.4 22.5 Construction + Additional investments on motorways in service + Related costs 279.0 390.0 406.2 Operating assets 56.6 62.2 59.2 Road resurfacing 34.3 36.3 33.0 TOTAL INVESTMENTS (excluding subsidies) 369.9 488.5 498.4 Excluding costs associated with production + interest during construction 350.9 465.0 475.9
• increasing the capacity of toll plazas, parking facilities Langres over a distance of 98 kilometres – making a total of and buildings; 150 kilometres of third lane in both directions – opened to • environmental protection; traffic in December 2008. This completes approximately 75% • compliance of tunnels with new safety standards. of planned widening works. ; 2008 saw the completion of the Group’s road and motorway • widening over 19 kilometres of the A36 motorway between tunnel compliancy programme. In line with commitments, Belfort and Montbéliard, and complete opening to three lanes the Maurice-Lemaire tunnel linking Sainte-Marie-aux-Mines of the 17 kilometres between Belfort and Sochaux on 15 in Alsace to Saint-Dié-des-Vosges was opened to traffic on December 2008, representing over 85% of the total distance 1 October 2008 having been closed for over four years for to be widened. complete renovation and the creation of a safety gallery. Finally, works on two new interchanges jointly financed by In addition, the renovation and safety works to the Châtillon local authorities were begun in 2008: and Saint-Germain tunnels on the A40 motorway were • the Mionnay partial interchange on the A46 motorway north completed on 31 October 2008. of Lyon, linked to the construction of the A432 motorway; Other major network development works were also carried out: • the Arlay interchange on the A39 motorway, linked to the • widening of the A31 motorway between Beaune and Jura service area.
a safer, more modern tunnel
latest equipment, the tunnel In all, the investments is now completely ready for represented €180 million motorists. Safety gallery, (inflation-adjusted) excl. VAT, pressurised shelters, of which €145 million provided ventilation, signage, video by the APRR group and surveillance, fire detection, €35 million by the government rapid response teams, etc. and local authorities. – everything has been completely upgraded to ensure the highest possible level of safety for customers as they drive through the tunnel.
APRR 2008 ANNUAL REPORT TRAFFIC AND TOLL PLAZAS
Innovating to increase Following the improvements seen in 2007 (+ 2.7% on 2006), productivity 2008 saw the European economic crisis impacting traffic levels on the APRR group’s network, with a 1.2% fall in the In 2008, despite the economic crisis and a slight number of kilometres travelled when compared with 2007. drop in traffic levels on its network, the APRR Nonetheless, the AREA network saw a positive development group has stepped up the modernisation of in 2008 (+ 0.8%). This was particularly due to an excellent winter sports season and, a 366th day of vehicle its toll plazas to improve traffic flow and meet movements given that 2008 was a leap year. customer expectations in terms of comfort. However, the economic crisis neutralised these factors and resulted in a reduced traffic level over the Group’s entire network, with the exception of AREA and the A71 motorway. The impact of the crisis became stronger as from June and was more marked for heavy goods vehicles (- 3.3%) than for light vehicles (- 0.8%). The reduction of traffic led to a 1.7% fall in mileage 90 intensity when compared with 2007. plazas were remotely operated (some only at night) at end 2008, out of the 141 held by the Group. More transactions and higher income
Transactions are continuing to increase (+ 0.8%) reflecting a very slight fall in the average customer journey length. Toll revenues saw a slight increase of + 1.7% when compared with 2007. This slight increase is explained by the combination of three factors: • the price rate increases in October 2007 and October 2008; 80% • falling traffic levels, of truck transactions are now made via HGV electronic toll collection, since this system • completion of the progressive reduction in discount tariffs became generalised in April 2008. for heavy goods vehicles, in compliance with the European Eurovignette road charging directive. The rates charged by the Group’s two companies are governed by concession contracts and five-year services Number of transactions contracts. Increases contains a variable component indexed to inflation, and a fixed component linked to investments per payment mode used to develop the network. In 2007 and 2008, rate (in millions per year) increases were preceded by detailed negotiations with 2006 2007 2008 the government. These concerned the interpretation of the contractual rate clauses and the impact of rate increases Electronic toll on purchasing power. collection 60.9 25.6 % 73.3 29.6 % 100.7 40.3 % Automatic 59.5 25.0 % 71.2 28.7 % 68.7 27.5 % Modernised toll plazas
Manual 117.8 49.5 % 103.5 41.7 % 80.4 32.2 % In order to improve traffic flow, especially at network Total 238.2 247.9 249.8 exits, the Group is accelerating the modernisation of its toll plazas. In 2008, 141,350 badges were sold, bringing In 2008, electronic toll payment became the total number of active Liber-t badges in circulation by the Group’s main collection method the end of the year to 607,000, which represented a 20% increase over 2007. The sales drive, backed by a large number of promotional actions enabled the Group to attract a large number of new customers, despite 18 the difficult economic context. Group traffic volumes (in millions of kilometres travelled between toll plazas) Group LV Kilometres Growth HGV Kilometres Growth Total Kilometres Growth (in millions) (% change) (in millions) (% change) (in millions) (% change) 2006 16,768 2.8 % 3,479 2.7% 20,247 2.8 % 2007 17,238 2.8 % 3,572 2.7 % 20,810 2.8 % 2008 17,107 - 0.8 % 3,453 - 3.3 % 20,561 - 1.2 % Of which APRR share 2006 13,029 0.9 % 3,038 1.9% 16,067 1.1 % 2007 13,332 2.3 % 3,104 2.2 % 16,436 2.3 % 2008 13,145 - 1.4 % 3,009 - 3.1 % 16,154 - 1.7 % Of which AREA share 2006 3,739 2.2 % 441 - 1.2% 4,180 2.1 % 2007 3,906 4.5 %468 6.2% 4,374 4.6 % 2008 3,962 1.4% 444 - 5.0 % 4,407 0.8 %
The capitalisation on existing subscription formulas Development of mileage (“fréquence”, “détente”, “balade”, “modulo”, “Evolyon”, student offers, specific APRR or AREA offers on certain intensity in 2008 Maurice-Lemaire Tunnel routes, etc.) and the strong development of new 9 1,507 of which A105 distribution channels (online sales, distribution 3 14,238 1,419 LV TOUL LV + HGV: -2.5% 88 HGV partnerships and key account contracts) have increased PARIS A5 LV: -2.4% our presence in the electronic toll collection market. MELUN HGV: -2.8% 4 23,709 In the last quarter of 2008, AREA enjoyed a resounding A26 LV + HGV: -2.3% A19 LV: -1.4% success with the commercialisation of an electronic toll HGV: -5.1% 1 26,608 TROYES LANGRES collection subscription known as “Liane Liber-t” for use LV + HGV: -2.9% MULHOUSE LV: -3% on its network and on that of its Adelac subsidiary. HGV: -2.9%
To further enhance customer service, APRR innovated in A77 A6 A31 MONTBÉLIARD terms of badge distribution by presenting an automatic A39 A36 AUXERRE Bali badge distributor during the Paris Motor Show. A311 BESANÇON DIJON This system allows the client to acquire a ready-to-use 5 19,733 BOURGES LV + HGV: -2.9% toll collection badge in just a few minutes. In parallel, LV: -2.7 % 90 of the Group’s 141 toll plazas were either partially or BEAUNE DOLE HGV: - 3.5 % totally remotely operated at end-2008, as against 66 at A71 A391 end-2007. This programme now extends to AREA. MONTLUÇON 2 61,120 LV + HGV: - 2% On 1 April 2008, the Caplis payment card system for HGVs LV: -1.5% A39 A404 HGV: -4% GENÈVE was ended over the entire national motorway network. 7 19,813 A40 LV + HGV: +1.5% A719 MÂCON The customers concerned have changed over to the LV: +1.6% HGV: +0.2% A46 6 23,660 LV + HGV: -0.4 % A42 electronic toll collection system which now represents LV: -0.2 % A41N over 80% of HGV transactions. Four European agents HGV: -1.3 % LYON CLERMONT-FERRAND ANNECY approved by the ASFA electronic toll collection commission A432 A43 ALBERTVILLE (Axxès, Eurotoll, Total and DKV) commercialise and A430 A48 A41S CHAMBÉRY manage HGV subscribers on behalf of the motorway A49 GRENOBLE A43 companies. VALENCE 8 30,559 A51 LV + HGV: -0.2% LV: +0.5% HGV: -5.9% 1 A6 N + A77 6 A40 + A42 + A432 + A404 < 15 000 vehicles/day 2 A6 S + A46 7 A71 + A719 de 15 000 à 25 000 vehicles/day de 25 000 à 50 000 vehicles/day 3 A5 + A105 + A26 + A19 8 AREA > 50 000 vehicles/day 4 A31 + A311 9 Maurice-Lemaire Tunnel 5 A36 + A39 + A391
APRR 2008 ANNUAL REPORT CUSTOMER SAFETY AND SERVICES
Changing to optimise network safety and traffic flow Every day, working in the field, the APRR group does all it can to make its customers’ journeys easier, safer and more pleasant. Its objective is to constantly improve both its network and its services offer.
Contributing to the mobility of their customers with optimal safety, traffic flow and comfort is the main priority of the staff working on the 2,215 kilometre network and on the The number of deaths due to road 19 kilometres conceded to Adelac and operated by AREA. accidents fell by 49% from 61 in 2007 Making the network even safer to 31 in 2008. Lying at the heart of the APPR group’s priorities, the safety policy forms part of its global strategy and is designed to obtain concrete results in both the short and middle terms. The Group has provided itself with equipment that allows it to react in real-time to events (video surveillance, geolocation of Number of accidents emergency vehicles, control stations located on the network and linked to one another, etc.) and keep customers informed. 2006 2007 2008 This system, with the scheduled insourcing of emergency call management for APRR (AREA has managed such calls Material damage only 5,310 5,216 5,138 directly since its creation), is manned 24 hours a day, with Accidents involving injury 435 411 415 additional staff during winter maintenance campaigns. Fatalities 53 61 31 In addition, awareness campaigns aimed at improving driver behaviour are organised regularly in the Group’s network. These cover themes such as: “Anticipate-act-inform on wintertime road conditions”, “Holiday departure/return Commercial establishments weekends”, “driver fatigue” in partnership with Asfa, “Tunnel driving” and “Discovering motorway professions”. In 2008, € (Royalties in millions) over 5,000 people underwent training courses at the 2006 2007 2008 Sécurodrome, the dedicated APRR training centre, either Service stations 17,755 18,474 17,697 through in-company courses or schoolchildren road safety Restaurants 6,295 6,508 6,491 awareness training. The Centaure and Minotaure centres, subsidiaries of Group companies and of Groupama, also saw Shops 1,372 1,503 1,529 a greater number of visits in 2008. Hotels 356 362 341 The Group has also made considerable investments in Others 201 214 216 the safety of its customers, notably through the road Group total 25,979 27,061 26,274 resurfacing programme, roadway widening on the A36 and A31 and upgrading of toll plazas (Saint-Martin-Bellevue on the A41 Nord, Villefranche – Limas and Nemours on the A6, Gannat on the A71, etc.). It has also carried out works aiming to reinforce safety barriers and prevent intrusions on the network: contraflow signage, fencing for large game, etc. Finally, the reopening of the Maurice-Lemaire tunnel and the 20 opening of the Mont-Sion tunnel on the A41 Nord were To accompany winter and summer holiday traffic, the Group organises a large number of actions under the Entract’ name. Its main objective is to make its service and rest areas more attractive to encourage drivers to make regular stops. Within this framework, it offered customers a free exhibition on the theme of “Soleil, mythes et réalités” (sun, myths and realities) organised in partnership with the Cité des Sciences, on the Venoy-Grosse-Pierre rest area. Its HGV customers are not forgotten, as, in the last five years, over 800 additional parking places have been created for them. Furthermore, two new entirely secure parking facilities have been opened in addition to the existing parking facility in Langres: 100 places at Paris Sud-Est (A105-A5b-RN104-Francilienne) and 60 places in L’Isle-d’Abeau (A43 in the Grenoble – Chambéry – Lyon direction. These parking facilities have seven-day, 24-hour video surveillance as well as comfort areas: restaurant, relaxation room, Wi-Fi connection, service station, etc. Faster and safer: this is the Group’s ambition for its network to meet the expectations of its customers. accompanied by prevention plans and exercises carried out To this end, 2008 saw it continue its toll plaza automation in collaboration with the authorities. programme, the increasing use of all class and all And the results are there: the overall accident figures have payment lanes and improvements to lane signage. stabilised at 261 accidents per billion kilometres travelled. It has also directed its efforts towards reconfiguring and The number of deaths due to traffic accidents has fallen by extending the number of lanes, as well installing rumble 49% from 61 in 2007 to 31 in 2008. Finally, after dropping for strips at all toll plaza approaches where such would not years, the number of accidents involving injury has stabilised cause excessive noise for local residents. Since 2009, at 415 accidents. the Group has experimentally introduced the “high speed phantom toll” which allows its customers to pass through Anticipating customer expectations and making at nearly 30 km/h. The level of automatic toll collection appropriate changes has considerably improved and reached 67.8% in 2008 (up from 58.3% in 2007), and electronic toll subscriptions Capitalising on the results of the regularly held survey represented 40.3% of transactions in 2008 (compared with campaigns carried out on our customers, the Group 29.6% in 2007), essentially due to additional HGV electronic continues to adapt its operating procedures. Traffic flow is toll subscriptions. optimised and real-time information relayed by a vast The Group always gives priority to providing customers system that incorporates: with a welcome and services on its rest and service areas. • mobilisation of control station teams, As part of this approach to continually improving the • information provided to customers via variable message quality and the breadth of its offers, APRR is preparing to panels, the 107.7 FM motorway radio station and the renew nearly 60 service and rest area partnership Group’s website, contracts by 2010. • information provided in works areas, • speed control tests, • analysis of travel times.
A well maintained network
The Group has a dual policy of • reduce inconvenience to AREA network, and lay APRR rest and service areas with ensuring the long service life customers: changing mobile Orthoprine surfacing on the selective waste sorting, launching of its assets and meeting variable message panels in A40 – A42 motorway of an ISO 14001 initiative to achieve customer safety and comfort 2 x 20 minutes, “scraping” interchange, certification of regional APRR expectations. This policy is three bridges in just 43 hours • integrate environmental divisions as from 2009, etc. accompanied by a constant on the A31, etc., responsibility into the Group’s environmental approach and • introduce innovative day to day activities: remote technological monitoring technologies: renovation of management of protection aimed at carrying works out the Fier viaduct without basins on the A51 Trièves more rapidly in order to: interrupting traffic on the motorway, equipping of all
APRR 2008 ANNUAL REPORT TECHNOLOGIES AND TELECOMMUNICATIONS
Leverage the Group’s skills to remain Always at the leading edge of new technologies, the APRR at the cutting edge of progress Group confirm its leadership in the telecommunications Broadband optical networks, telecommunications sector in 2008. infrastructures, radio, etc. The Group has High performance telecommunications retained its lead to provide its customers with infrastructures
the excellence and quality they demand. Constantly developing synergies between its own requirements and those of telecommunications operators, the Group enhanced the capacities of its fibre optic links and completed its set of radio towers in 2008. Several new rental contracts for high points and fibre optics have been signed, notably within the framework of public telecom service delegations won by Eiffage Concessions. All the major telecom operators and Internet access providers (France Télécom, Neuf Cegetel, Completel, SFR, Bouygues Telecom, Free, etc.) are customers of the Group. The telecom turnover exceeded €12 million in 2008, positioning APRR as motorway 14 sector leader for this activity. hotspots deployed by APRR providing A new very high speed IP network customers with a wireless Internet connections when travelling. In 2008, the Group finalised a major innovation for its very high speed multimedia IP telecommunications network. This development, introduced in 2009, makes it possible Nearly to anticipate future phantom toll solutions and meet the growing requirements for video surveillance of traffic and toll plazas. In addition, this very high speed IP network will allow APRR to develop new bandwidth services for €12 million operators and public telecom service delegates. This is APRR’s telecom turnover in 2008, making it the motorway sector leader for this activity.
A national digital development player
Resembling very fine “glass fibres are installed in the hairs”, optical fibres are able to middle of the hard shoulders carry vast quantities of digital or in the central reservation, information in the form of dozens of centimetres below lightbeams. Voice, data, images the road surface. Manholes and videos can be transported located every four kilometres very rapidly across great provide access for repair distances. The Group currently works. In some areas, the has 300,000 kilometres of location of the fibres is shown fibres covering all the 2,234 by blue lines. A monitoring kilometres of its motorway system ensures that all 22 network. The ultra-protected incidents will be addressed Innovative radio networks participated in the call for bidders launched by CSA (the French radio and TV authority) on 26 March 2008 for In 2008, the Group completed the adaptation of AREA’s terrestrial digital radio to replace the current analogue operational radio network to the TETRA standard. This FM radio. Its application was declared acceptable by CSA means that APRR and AREA now have a unified network in early December, and the next steps in the frequency dedicated to safety communications between the allocation process will take place in 2009. motorways and the traffic control stations. AREA has also initiated a partnership that, in the long Telecom activities grouped together in the same term, will result in the installation of 20 Wi-Fi hotspots on department Alpine motorway service areas. These will complete the 14 hotspots already installed by APRR on its service Since 1 July 2008, all APRR and AREA telecom skills areas and which allow customers to have wireless access and activities and, more globally, all the Group’s skills to the Internet when travelling. To date, APRR is the only and activities in the field of information technologies have motorway operator to provide this type of Wi-Fi service. been grouped within a new information engineering Concerning traffic information, the Group, through its and systems department. SIRA subsidiary which operates Autoroute INFO radio,
within 12 hours, day or night, capacity is rented to telecom seven days a week. Voice data operators for telephone, APRR is the only motorway for the Autoroute INFO radio television and Internet, and the station, electronic banking Group’s customers now include operator to offer such movements at the toll booths, Neuf Cegetel, Orange, Free and surveillance images over the Bouygues Telecom. a highly-developed Wi-Fi length of the motorway, etc.: for APRR, fibre optics means service on its service station being able to transport all the telephone, computer, areas automation and video data that it needs. The network’s surplus
APRR 2008 ANNUAL REPORT
CONTROLLED INTERACTION AND SHARING OF OUR DEVELOPMENT
COMMITMENTS
The APRR group interacts constantly with its partners to ensure the integration of its network into the natural environment, manage the impact of its activities and share its sustainable development initiatives with employees and customers. It is the group’s responsibility to control its actions fully for everyone’s benefit. HUMAN RESOURCES
Dialogue to accompany employees The APRR group constantly listens to its employees. Training, group savings schemes, safety and diversity are among the key themes The APRR and AREA human resources departments defining the Group’s human resources actions operate an ambitious social policy whose pillars are the and policies. They are based on a single strength of social dialogue, the expression of diversity, group objective: to always better meet the needs savings schemes, and professional training. They are based on the values of trust, responsibility, transparency, example, and expectations of our staff. lucidity, tenacity and courage.
Social dialogue, the keystone of the Group’s HR policy
Within a difficult economic context, a meaningful social dialogue is more than ever indispensable. Wage settlements signed within both the Group’s companies have allowed Over the purchasing power of all employee categories to be maintained. APRR social partners are currently negotiating an agreement regarding changing toll-collection procedures. In addition, the agreement concerning early retirement for certain employees (CATS) signed within the Group’s two 75% companies in 2007 is now coming fully into effect. It allows of employees took at least employees over 57 years old who have performed least one training course in 2008. 15 years of shift or night work, or who are covered by legislation concerning the disabled, to terminate their activity before retirement age under favourable salary conditions.
26 were renegotiated for the period 2009-2011. Furthermore, an exceptional discretionary payment, corresponding to 0.7 months of salary, has been decided in favour of the employees. Employees opting to invest amounts due under the profit sharing arrangements in Sicavas Eiffage 2000 will have the option of taking out a €2,500 loan bearing interest at 4% and repayable by equal monthly instalments over a period of Favouring diversity five years. This offer will help employees retain some liquidity. Finally, Two agreements concerning gender equality and the inclusion pursuant the law governing revenue from work, a 25% of the disabled were signed by AREA’s unions in 2008. Their contribution will be made by the employer when employees innovative provisions have made our Group one of the best in invest their 2008 entitlement in Sicavas Eiffage 2000. the profession. In 2009, keeping on seniors will be the order of the day. Negotiations will simultaneously begin within the Group’s two companies during the second half of the year. Priority given to the safety of personnel
Significant resources for group savings schemes Personnel safety is vital. The APRR and AREA operations departments have considerable means in this area that In 2008, amounts due in respect of mandatory employee increased by 10% in 2008, when measures were taken profit-sharing plans came to €13.3 million. Amounts due in concerning: respect of discretionary employee profit-sharing plans came • risk prevention for personnel working on toll plazas through to €12.8 million. Payments made in respect of the mandatory appropriate training and an increased number of variable employee profit-sharing plans and discretionary employee message panels, profit-sharing plans averaged €4,465 and €4,450, • the introduction of new lit warning arrows, resulting in respectively, per employee. For those employees opting to the number of accidents being halved, invest their profit share in Eiffage shares via Sicavas Eiffage • ergonometric studies of remote operation and network 2000, the employer’s contribution came to 50%, where the surveillance sites to improve personnel comfort and safety. legal limit allowed. Actions taken by the Health & Safety committees and The poor performances recorded by the stock markets in prevention committees, as well as the policies applied over 2008 did affect employee savings plans. For this reason, nearly the last ten years, have, for the third year running, the Group’s Chief Executive Officer decided to increase the allowed the Group to remain at the top of the profession ceiling to 14% of payroll for 2009 when the three-year plans in terms of safety. The work accident frequency rate was 10.61 and the severity level 0.39. Maintaining these results requires increased vigilance by both employees and management. An awareness campaign will be carried out in 2009.
First class training courses
90,000 hours of training were given in 2008. The sums allocated for training represent 3.9% of the payroll. Over 75% of employees participated in at least one training course in 2008. The means allocated helped reorganise the departments, and safety missions and personnel requirements were also taken into consideration. A strategic training committee was formed in 2008 within APRR and will be enlarged to incorporate AREA as from 2009. All Eiffage group training tools, particularly the institute and the CREF, are now available to all those working for AREA and APRR.
APRR 2008 ANNUAL REPORT SUSTAINABLE DEVELOPMENT Mobilising energies to meet
The Group increased its mobilisation in 2008 to provide customers with a high quality service, enhance personnel risk prevention and help protect the environment, including the living environment. This dynamic also makes a concrete contribution to the implementation of the Eiffage group’s sustainable development policy.
In order to provide its customers with an enhanced travelling experience, particularly by improving the number and the quality of the services offered, the APRR group has created the “Entract’” name to clearly identify the location and diversity of the new services on offer. It was developed to accompany the numerous holiday events – such as exhibitions, entertainment, information and sports events – taking place on service and rest
CUSTOMERS Prevention and welcome
Over and above individual the use of the hard shoulder, and service areas are just one Annual rate of conduct, road safety is a road sharing between light of the measures being taken to accidents involving collective concern. vehicles and HGVs, respect make these areas increasingly injuries: This is why the APRR Group’s for the work carried out by inviting, a prime example being 2006 : 20.8 2007 : 19.1 awareness actions are being motorway staff and loss of the Écot – Combe-Ronde area 2008 : 19.5 diversified to provide customers vigilance have been covered on the A36 which has been with even clearer explanations as by information campaigns. completely renovated. To to the specificities of motorway The “1,2,3… Détente” magazine encourage emulation between driving, share good practices provides advice on making the commercial installations on and generalise measures breaks more efficient, especially its network, AREA awarded its favouring prevention and by explaining relaxation first cleanness trophy this year. careful driving. Tunnel driving, techniques and how to avoid To permit environmentally- dehydration. The new safety friendly 24-hour, seven-day shops have been a resounding surveillance , cameras supplied success and the “mist by solar and wind energy as generators” installed on well as fuel cells have been 28 the most frequently used rest installed along the A5. tomorrow’s challenges
areas, the highlight being the “Soleil, mythes et réalités” fields, and AREA was awarded its certificate in late 2008. exhibition held on the Venoy – Grosse-Pierre (A6) rest Active prevention measures within and between professions area, and organised in partnership with the Cité des have led to the Group maintaining a good level of results Sciences et de l’Industrie. This fun, cultural circuit was in terms of personnel safety. accessible to all adults and children, including disabled The preparation for ISO 14001 environmental certification and visually impaired customers. In addition, Group within the three regional APRR departments strongly employees went out to meet customers during the motivated the teams in 2008 and the intention is to obtain motorway professions days organised by Asfa. This was certification in the first half of 2009. an efficient way of increasing drivers’ awareness of road During the summer of 2008, APRR group customers and safety while showing them the hidden aspects of employees discovered the first issue of our new “Carnets motorway professions. d’autoroutes” collection which aims to make readers aware of sustainable development through the Certification to guarantee quality description of concrete motorway achievements. You will find the list of all of our commitments at the end of this The Group continues to work towards improving its services. document. The three regional APRR departments have renewed their ISO 9001 quality certification in their particular
EMPLOYEES Consultation and diversity
Toll, services and safety Number of CATS transferred from the toll sector, limit travel, APRR has further professions are all concerned employees who have enthusiastically taken developed its videoconference by the CATS (early retirement of concerned in 2008 up the challenge of a new system, and twelve meeting certain employees) agreement career direction. These rooms are now operational. introduced in summer 2008 45 successful experiences have This will also have an impact on within the Group to take into opened the way to other our carbon balance, which is account the wearing nature of Work accident rate measures favouring a greater measured by Ademe, and can certain jobs. Negotiations 2006 : 13.3 level of mix, and the challenges be summarised as follows: carried out within the Group 2007 : 9.6 and advantages of equal two million TCE* due to traffic, have already led to agreements 2008 : 10.6 opportunity and diversity were 50,000 due to infrastructures for AREA concerning the presented during the 2008 and 25,000 due to operations. employment of disabled people executives’ convention. and gender equality . In Occupational During national sustainable *tonne of carbon equivalent addition, operational posts accident severity development week, a promotion rate linked to services and safety of the various ecolabels through have begun to be taken up by 2006 : 0.52 in-house displays made buyers 2007 : 0.48 women, most of whom have 2008 : 0.39 more aware of this approach. To
APRR 2008 ANNUAL REPORT ENVIRONMENT Awareness and preservation
An eco-citizen approach, expressed through the preservation of biodiversity and concerning both flora and fauna, is central to the construction of the A406. Bird boxes and bat refuges are gradually being installed along the network, as are planted meadows. The protection of drinking water sources from motorway pollution is being The APRR group is increasing network, the Group has renewed € pursued, especially on the A6 Nord. its actions in view of improving its “balanced kWh” contract with 15.5million The listing of noise black spots the energy performance of its EDF (electricity company) which has been invested is being brought up to date into operating installations. guarantees that the equivalent motorways to reduce throughout the network, and In parallel with the optimisation of of six million kWh of electricity environmental the protection of nearby houses lighting at rest & service areas consumption comes from impacts and is being continued. and toll plazas, energy diagnostics renewable energy sources. decrease risks. Concerning rubbish dumping, of certain buildings have resulted A vertical axis wind turbine has €11.3 million for water, an initial customer awareness in simple modifications, increased also been tested in view of being €2 million for noise, campaign has been launched € awareness among occupants of installed on the A6 in order to 1 million for rubbish giving information concerning the and €1.2 million for the need to take energy-saving convert the mechanical energy biodiversity and the health & safety risks resulting measures, and the scheduling provided by the prevailing winds and landscape. from this type of behaviour. of more far-reaching works. the turbulence caused by passing In addition, for a part of its vehicles into electrical energy.
REGIONS Cooperation and attentiveness
The rest areas on the network The latter is eagerly awaited by the represent showcases for the local Aproport* operators as it will extend culture and for the motorway the river transport catchment area itself. to the east, providing an example of This has resulted in the inauguration intermodality. Following on from the of the Bresse museum rest area Grenelle environmental round table, on the A40, the exhibition on Maurice APRR contributed to examining Novarina, architect of the “Autoroute the conditions for extending the des Titans”, on the Lac rest area, experimental intermodal Alpine and around ten local players road-rail motorway system to the participated in an exhibition on the east of Lyon. Listening to what Venoy – Grosse-Pierre rest area territorial decision-makers have to (A6). On the A31, the Toul – Since the end of the year, the say allows the Group to propose Dommartin area explained APRR group has begun operating services that meet their specific the tourist attractions to be found two new infrastructures: the requirements. This, for example, in the Meurthe-et-Moselle Amount of taxes paid Maurice-Lemaire tunnel between has resulted in the key-accounts department using innovative to local authorities the Vosges and Alsace, and the last function being developed at totems and display consoles. Land tax: €2 million section of the A41 Nord between management level among the Business tax: Annecy and Saint- Julien-en- Group’s corporate and local €47.8 million Genevois. Three new sections are authority customers. currently being constructed near Montluçon, to the north-east of Lyon and to the south of Mâcon. * Aproport is a Saône-et-Loire Chamber of Commerce and Industry service that manages, administrates and 30 equips the Chalon-sur-Saône and Mâcon port platforms. PERFORMANCE INDICATORS
Indicateurs de performance Figures Themes Indicators Units 2006 2007 2008 CUSTOMERS Traffic safety Annual rate of accidents Number of accidents involving injuries 20.8 19.1 19.5 involving injuries per billion kilometres travelled(b) Service quality Hours x kilometres of traffic jams Hour kilometre 25,462 25,151 22,328 EMPLOYEES Training Training access rate Number of persons taking training courses in comparison with the number of employees 1.91 2.02 1.87 Number of hours of training per employee Hour 19.6 22.9 22.6 Personnel safety Work accident frequency rate Number of accidents with time off 13.3 9.6 10.6 work per million hours worked Occupational accident severity rate Number of days lost 0.52 0.48 0.39 per thousand hours worked ENVIRONMENT Noise Proportion of noise black spots to be absorbed Percentage 75.7 42.7 28.5 Water consumption Drinking water consumption Litres/100 km 2.27 2.24 2,.29 479.200 m3(a) per 100 km travelled (b) Energy consumption Energy consumption kWh/100 km 0.63 0.63 0.70 145.92 million kWh (a) per 100 km travelled (b)
Company’s greenhouse Greenhouse gas emissions caused g of CO2/100 km 86 88 95 gas emissions by the company per 100 km travelled (b)
Greenhouse gas emissions Greenhouse gas emissions caused g of CO2/100 km 30,00 30,000 30,000 by customers by traffic per 100 km travelled (b) Waste Reconversion rate for waste produced Percentage 19.4 21.3 16.5 Consumption of materials Proportion of roadway materials Percentage 10.5 1.9 2.2 of recycled origin Discharges into water and soil Proportion of network length over Percentage 97.7 98.2 99.3 which water resources are protected ECONOMY / TERRITORY Economic and tourism development Proportion of average daily traffic measured Percentage 18 18 17 of the territories on the road interchanges outside of urban areas(c)
(a) Total consumption for 2008. (b) On the network by customers. (c) INSEE definition of urban areas: an urban area as a group of municipalities comprising an urban centre (with at least 5,000 jobs) surrounded by suburbs, which, in turn, are comprised of rural municipalities or of urban entities where at least 40% of employed residents work either in the urban centre or in one of the municipalities in its catchment area.
Methodological information concerning indicators
Proportion of noise “black service areas) per 100 Ministry conversion factors and service areas. It includes spots” still to be treated: kilometres travelled for consumption of fuel and neither construction waste this is the number of noise combustibles; nor green waste. black spots or PNBs (points Energy consumption: • generated by traffic: estimate noirs bruit), as defined by the this term encompasses produced by application of Proportion of network regulations, that still require consumption linked to the the methodology developed length over which water treatment, as a percentage Group's activities (excluding by Asfa concerning the resources are protected: of the corresponding figure fuel consumed by customers number of kilometres this indicator covers in 2003. using the motorway network) travelled by customers. stretches where studies per 100 kilometres travelled have revealed the need for Water consumption: this Recycling rate for waste special protection and for concerns water consumption Greenhouse-gas emissions: produced: “waste produced” which protection has been linked to the Group's activities • generated by the company: includes all waste generated implemented, as well as (including consumption by estimate produced by by the Group's own activities stretches where no special customers in rest and application of Industry and by customers in rest protection is required.
APRR 2008 ANNUAL REPORT INNOVATION
Innovate to meet The Group’s research and development policy notably covers new expectations actions taken to improve customer and personnel safety, traffic management and road telematics, upgrading of toll The APRR group pursues an active policy collection processes, environmental integration and reducing of technological monitoring and innovation, the cost of transportation. allowing it to remain at the cutting edge Leading edge safety and service quality of all new developments and to improve its competitiveness while meeting Several projects aimed at improving safety and customer its customers’ new expectations. service were implemented in 2008. They allowed the Group to make significant advances in the following fields: • research into the use of new energies such as micro wind turbines and fuel cells, • experimental use of free-flow tolls, such as users of electronic toll badges being able to drive through toll barriers at 50 km/h, • emphasis placed on water and energy savings in the 50 km/h design and operation of buildings. This is the speed at which electronic toll users will soon be able to travel through certain PHOSPHORE: a project creating links with other toll lanes. branches of the Eiffage group
In 2008, the APRR group participated in the development of the PHOSPHORE project, which concerns a sustainable development forecasting laboratory that € groups together all the R&D skills of the various Eiffage group branches. The aim is to work in synergy with the 1million assistance of climate experts, town planners, sociologists a year is set aside for the development of innovative systems and technical building experts to define the city of and services on the APRR and AREA networks. tomorrow. APRR is part of the Mobility and Services group. It contributes its expertise to help meet extensive future needs in terms of real and virtual mobility and to provide information and communication related services. The intention is to develop a rigorous management of resources such as energy, air and water. To this end, APRR has presented innovative solutions for treating air and water (treatment tanks), individual parking place management, and the organisation of intermodal transport systems without intermediate reloading. It also participates in the study of motorway hubs: light vehicle car parks at the end of the motorway network with development of local services and access to tram, metro and rapid suburban trains at the entrance points to large conurbations. 32 A new series of studies for European programmes
APRR and AREA continue to participate in development programmes for intelligent transport systems in Europe. The new Easy Way programme (2007-2013) aims to reduce The aim of the new Easy Way traffic jams and CO2 emissions while improving safety. It is based on cross-border studies and the deployment programme is to reduce traffic of systems and services: route information, traffic jams and CO emissions management and coordination, and specific infrastructures 2 for the management, processing and exchange of data. Within this framework, APRR and AREA invest over a million euros a year (of which approximately 20% comes from European subsidies) to improve their systems and services.
APRR 2008 ANNUAL REPORT MANAGEMENT REPORT P. 36 REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS OF APRR P. 56 on the work of the Board of Directors and on internal control STATUTORY AUDITOR’S REPORT P. 66 drawn up in accordance with article L. 225-235 of the Commercial Code, on the report of the chairman of the Board of Directors of APRR RISK ANALYSIS P. 66
CONSOLIDATED FINANCIAL STATEMENTS AND NOTE TO THE FINANCIAL STATEMENTS P. 70 STATUTORY AUDITOR’S REPORT P. 98 on the consolidated financial statements CORPORATE FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS P. 100
STATUTORY AUDITOR’S REPORT P. 118 on the annual financial statements
STATUTORY AUDITOR’S SPECIAL REPORT P. 120 on agreements and regulated commitments
RESOLUTIONS P. 122 TRANSPARENTLY INCREASING AND CONSOLIDATING THE GROUP’S RESULTS
FINANCIAL REPORT
The APRR group saw its income slightly increase in 2008, despite major investments made to increase the safety, comfort and technology of its network. While the Group has a duty to improve its income, it also needs to stand by its commitments and performance goals. Contents 5.1.1 Water resources 52 5.1.2 Raw materials 52 1. Group Activities 38 5.1.3 Energy 52 1.1 Traffic volume and toll fares 38 5.2 Measures to limit the threat to ecological balance 1.1.1 Traffic volume 38 and natural environments 52 1.1.2 Tariffs 38 5.2.1 Environmental pollution 52 1.2 Service and safety 38 5.2.2 Waste materials 52 1.2.1 Service 38 5.2.3 Fauna 52 1.2.2 Safety and network surveillance 40 5.2.4 Landscape management 52 1.3 Major works on motorways in service 40 5.2.5 Noise 53 1.3.1 New exchanges (€4 million) 40 5.3 Company environmental impact assessment 1.3.2 Service areas (€12 million) 41 and certification 53 1.3.3 Road widening (€182 million) 41 5.3.1 Environmental certification 53 1.3.4 Roadways excluding resurfacing (€8 million) 41 5.3.2 Specific assessments 53 1.3.5 Civil engineering works and tunnels (€54 million) 41 5.4 Measures taken to ensure activities comply with 1.3.6 Construction of new motorways (€81 million) 41 legislative and regulatory requirements 53 1.4 Development of the Group’s activities 42 5.5 Expenditure committed to mitigate the environmental impact of the activities 53 2. Governance and Corporate Life 43 5.6 Sustainable development policy 2.1 Board of Directors 43 de développement durable 54 2.2 Information concerning Directors and Officers 43 5.7 Provisions and guarantees for environmental risks 54 2.2.1 Positions and offices held by the Company’s 5.8 Damages settled in 2008 pursuant to a legal ruling Directors and Officers 43 in an environmental matter 54 2.2.2 Compensation and benefits in kind paid to the Company’s Directors and Officers 47 6. Finances 54 2.2.3 Securities transactions involving Directors 6.1 Consolidated financial statements 54 and related parties 47 6.1.1 Revenue 54 2.2.4 AFEP-MEDEF code of cooperate governance – 6.1.2 Earnings before interest, tax, depreciation Disclosure of compensation 47 and amortisation 54 2.3 Internal regulations governing the Board of 6.1.3 Operating profit on ordinary activities 55 Directors and Ad-hoc Committees 48 6.1.4 Operating profit 55 2.4 Contract Award Commission 48 6.1.5 Finance costs 55 2.5 Modifications to the organisation 48 6.1.6 RNet profit 55 2.5.1 Merging of Engineering and Project Management 6.1.7 Consolidated balance sheet 55 Department and Information Systems Department 48 6.2 Company financial statements 56 2.5.2 Reorganisation of the Legal Department 48 6.2.1 Income statement 56 6.2.2 Five-year financial summary 56 3. Research and Development 49 6.2.3 Non-tax deductible charges (Article 39-4 of the General Tax Code) 56 4. Group Human Resources Policy 49 4.1 Human resources management 49 7. Information concerning the share capital 4.2 Work scheduling 50 and shareholders 57 4.3 Compensation and equality of employment 7.1 Breakdown of share capital and voting rights 57 opportunity 50 7.2 Delegations of authority for capital increases 57 4.3.1 Compensation 50 7.3 Employee shareholders 57 4.3.2 Employee savings plans 50 7.4 Additional financial information (Article L.225-100-3 4.3.3 Equal employment opportunity 51 of the Commercial Code) 57 4.4 Labour relations 51 4.5 Training 51 8. Subsidiaries and Participating Interests 58 4.6 Other labour issues related to the Group’s activities 51 4.6.1 Health and safety conditions 51 9. Significant Events in Progress and Outlook 58 4.6.2 Employment and integration of disabled workers 51 9.1 Maurice Lemaire tunnel 58 4.6.3 Welfare schemes 51 9.2 2009-2013 business plan 58 9.3 Outlook 59 5. Environmental protection 52 5.1 Consumption of water, raw materials and energy 52
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
01Group Activities 1.1 Traffic volume and toll fares 1.2.1 Service In 2008, the Group stepped up its efforts to improve both the 1.1.1 Traffic volume information provided to customers and the traffic flow. After the upturn enjoyed in 2007 when traffic increased by 2.8% By being attentive to the findings of regular surveys of customer year-on-year, the crisis affecting the European economy left its needs and satisfaction levels, APRR has been able to adapt working imprint on traffic on APRR’s network, with the number practices so as to cater even better to their expectations. of kilometres travelled in 2008 declining by 1.2% from 2007. Traffic flow and other information is related on a real time basis by command centre personnel, using a wide range of media: variable This downturn, which affected nearly the entire network from message signs, the FM 107.7 radio station, the APRR web site, June 2008 onwards, was more pronounced for heavy goods roadside panels at sections under work, speed regulation tests, vehicle traffic, falling by 3.3%, whereas the decrease was only and travel time information. 0.8% for light vehicles. To facilitate the long journey’s on France’s road, APRR launched a new initiative called Entract’, one of whose objectives is to improve Traffic intensity, declined by 1.7% in 2008 compared with safety during the summer and winter departures by making breaks the year before. at service areas more fun. Free organised activities were staged at service areas over the summer and winter holidays and an The number of transactions, up 0.8% year-on-year, continued exhibition on the theme of the sun was held in partnership with Cité to grow more strongly than kilometres travelled, indicating that des Sciences at the Venoy Grosse-Pierre service area. the average distance travelled declined in 2008. Heavy goods vehicle drivers were not forgotten with the creation of new parking placing at the service stations. A total of nearly 1.1.2 Tariffs 1,200 additional spaces have been added over the last five years. Toll fares charged by APRR and AREA are regulated by In addition, two new, totally secure parking areas were opened the concession agreement and five-year contracts entered into to complement the existing parking area at Langres: 100 spaces by these companies. Fares comprise a variable portion indexed at Paris Sud Est on A5 and 60 spaces at Isle d’Abeau on A43. to inflation and a fixed portion tied to investments to improve These parking areas are fitted with remote surveillance operated and develop the network. 24 hours a day, seven days a week and offer a range of conve- niences: catering, leisure room, wi-fi access, service station, etc. In 2008, tariff increases were negotiated with the French State, Toll collection is being adapted to be faster and safer. To this end taking into account the tariff clauses in the five-year contracts APRR has pressed on with its programme to extend automated as well as the impact of raising toll fares on purchasing power. and remote toll collection, to introduce all class all payment lanes and all class TIS lanes, to improve road signalling, reconfigure or Tariff increases came into force on 1 October 2008 in extend the number of lanes, to install speed ramps at all toll accordance with the terms of the relevant contracts. stations wherever possible without causing excessive noise levels for nearby residents, and at the start of 2009 it started trials on a An information campaign was organised to inform customers new drive-by toll collection system, allowing vehicles to pass of the tariff revisions. through toll barriers at speeds of up to 30 kilometres per hour. At the year-end, 90 of the 140 toll stations were totally or partially 1.2 Service and safety automated compared with 66 at end-2007. By leveraging up the existing subscription base (Fréquence, Détente, The Group’s priority remains to facilitate the movement of goods Balade, Modulo, Evolyon, LIANE’t, student offers and APRR/AREA and persons in optimum conditions in terms of safety, traffic offers for specific routes) and by developing strongly particular flow and comfort on its 2,215-kilometre network as well as the distribution channels such as Internet and corporate accounts (Air 19-kilometre concession granted to Adelac and managed by AREA. Liquide, Pfizer, Bouygues Telecom, Darty, CMCIC Bail, etc.), 141,000 Liber-t badges were sold in 2008. As a result, the number of active Liber-t badges increased to 607,000 at the year-end, up 20% over 2007. APRR remains the leading vendor of badges, outperforming other motorway concession operators. APRR also innovated in the distribution of badges. At the Paris 38 Motor Show, it unveiled BALI, an automated badge distributor that allows drivers to obtain an active remote toll badge and be • Acting on customer behaviour on their way in a matter of minutes. In addition, driver-awareness campaigns are held at regular On 1 April 2008, the Caplis payment card system for heavy goods ntervals to modify driver behaviour. They cover topics such as vehicles was discontinued on France’s motorway network, leaving driving in extreme weather conditions in the winter (anticipating, the remote toll system that currently accounts for over 80% acting responsibly and keeping informed), responsible driving of transactions involving heavy goods vehicles. during extreme traffic congestion (campaign in three languages Axxès, Eurotoll, Total and DKV – the four European issuers approved focusing on periods when both departing and returning by the ad-hoc commission of the Federation of French Motorway holidaymakers are on the road) and the danger of falling asleep and Toll Facility Companies (Association des Sociétés Françaises at the wheel (campaign conducted in partnership with ASFA), d'Autoroutes et d'Ouvrages à Péage - ASFA) – are responsible for driving through tunnels, and a campaign of career opportunities at marketing and managing remote toll services provided to heavy motorway operators with the staging of presentations at selected good vehicles on behalf of the motorway companies. service areas. The automation rate recorded another sharp increase to reach 67.8% on average in 2008, up from 58.3% in 2007. Remote toll In 2008, some 5,000 persons received training or attended collection increased to represent 40.3% of transaction, up from awareness sessions at the Sécurodrome (including courses held 29.6% at end-2007, helped in this by the development of remote toll for companies and for youngsters in connection with road safety payment systems for heavy goods vehicles. certificates). The Centaure and Minotaure centres set up by In 2008, APRR’s three regional departments renewed their ISO 9001 the Group in partnership with Groupama recorded increases in (version 2000) certification based on the new scope of their attendance. operations, and AREA obtained ISO 9001 (version 2008) certification. In addition, the APRR’s three regional departments launched • Acting on infrastructure and equipment the ISO 14001 certification process in 2009. programme to renovate road courses and to widen motorways APRR continued to focus its efforts on the welcome and services (work carried out on the A36 and A41 motorways), complete tunnel offered to motorway users stopping off at the services and rest renovations and improvements at toll stations, and strengthen areas. To this end, the Group constantly seeks to improve the systems regulating traffic flows (wrong way signs, etc.) quality and the range of the service its offers and is working on and intrusions (fencing to keep out stray animals, etc.). the renewal of nearly sixty partnerships with firms providing In conjunction with the re-opening of the Maurice Lemaire tunnel services at services and rest areas by 2010. and the opening of the Mont Sion tunnel on the A41 Nord These efforts are being rewarded, as reflected in customer motorway, APRR worked in collaboration with the public satisfaction, which improved 7.8 on average compared to 7.7 in 2006 authorities to devise accident prevention plans and perform according to the survey conducted each year. safety drills. Tangible results have been achieved from these efforts. 1.2.2 Safety and network surveillance There was another decrease in the “all accidents” rate in 2008 Ongoing improvements in safety remain a paramount concern to 261 accidents per billion kilometres travelled, which represents for the Group, which has harnessed its resources to this end, an improvement of 0.2% compared with 2007. implementing concrete actions as part of a global strategy aimed There was a substantial decrease in the number of accident at achieving positive results over the short to medium term. fatalities, down 49% from 61 in 2007 to 31 in 2008. APRR is able to react instantly to all events. It has installed a Bodily injuries were stable at 415 after having declined for several remote surveillance system covering its entire network, years in a row. service vehicles are fitted with global positioning systems, and the command centres are positioned strategically and linked to one another. In this way, the Group can tailor its response to the type of event and inform drivers. In addition to the above measures, APRR plans to bring back in-house the management of the emergency call centres as is already the case at AREA. These centres operate 24 hours a day, seven days a week, and are on state of heightened alert during the winter months to ensure the viability of the network.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
1.3 Major works on motorways in service As done every year, in addition to relaying stretches of roadway, road surfaces were renovated on both the APRR and AREA networks. In 2008, the Group made €303 million in additional investments on motorways in service compared with €343 million in 2007 1.3.5 Civil engineering works and tunnels (€54 million) and €215 million in 2006. The main investment projects are The Group completed a vast programme to renovate and improve presented below the safety of its tunnels. Work on the Maurice Lemaire tunnel was completed in 2008 and it was re-opened on 1 October 2008 after 1.3.1 New exchanges (€4 million) being closed for five years to bring it up to standard. In 2008, Work started on the Jura exchange on the A39 and on the Mionnay the Group also completed work improving safety in the Chamoise, exchange on the A46. Work is scheduled to get under way on the Saint-Germain and Chatillon tunnels on the A40 motorway. Chaux exchange on the A41 motorway in 2009. All these projects were started up in 2003. AREA completed its upgrading of the Epine and Dullin tunnels, 1.3.2 Service areas (€12 million) two projects that got under way in 2006 and 2001, respectively. The Group has pressed ahead with its programme for adding Work on the tunnels of the A51 motorway is scheduled to get heavy goods vehicle parking spaces, increasing their number by under way shortly under the next contracting contract. more than 1,200 between 2004 and 2008. Concurrently, two new secure parking areas were brought into 1.3.6 Construction of new motorways (€81 million) service at Paris Sud Est (A105-A5B-RN104-Francilienne junction) Work continued in 2008 on the Mâcon southern bypass on the and at Isle d’Abeau (A43 from Grenoble/Chambéry to Lyon) with A406 motorway (scheduled to be opened to traffic in the spring respectively 100 and 60 parking spaces. of 2011) and on the Les Echets-La Boisse section of the A432 motorways (scheduled to be opened to traffic end-2010). En parallèle, 2008 a vu la création de deux nouveaux parkings Preliminary work has started on the A714 motorway slip road sécurisés avec 100 places à Paris sud-est (A105-A5B-RN104- linking the A71 motorway to Montluçon by converting a Francilienne) et 60 places à l’Isle-d’Abeau (A43 Sens Grenoble/ 9.5-kilometre stretch of the RN144 trunk road to 2x2 lanes. It is Chambéry > Lyon). expected to be completed in the spring of 2011.
1.3.3 Road widening (€182 million) Other projects include: Work is being carried out to widen the A36 motorway between • The extension of the Gannat spur, a fourteen kilometre section Belfort and Montbéliard, with the 18 km Belfort-Brognard section on the A719, towards Vichy. Preliminary studies were approved being brought into service. Work on the Brognard-Montbéliard by the authorities in June 2007. At the end of 2008 proposals for section is still under way. a public interest enquiry were communicated to the Group. Work converting the A31 to 2x3 lanes continued. Work on the • The links between the A89 and A6 motorways and A6 and A46 Beaune-Dijon and Langres-Dijon sections was completed. Road motorways, respectively six and four kilometres, for which widening work is scheduled to go on until 2011. a public interest enquiry was launched by the authorities at Other ongoing projects include the widening of 7 –kilometres of the end of 2007. The decree should be published in 2009. the Montbonnot-Crolles section of the A41 Sud. Draft proposals to widen the Anse-Genay section of the A46 and the 1.4 Development of the Group’s activities Anse-Villefranche section of the A6 have been submitted to the Transport Infrastructure Department (Ministry for Ecology, Energy, 2008 highlights included: Sustainable Development and Town and Country Planning). • Telecommunication infrastructure 1.3.4 Roadways excluding resurfacing (€8 million) APRR is constantly seeking to develop synergies between its own Work strengthening the A5 motorway continued in 2008 and is needs and those of telecommunication operators. In 2008, expected to last until 2011. Concurrently, several stretches of the the Group increased the capacity of its fibre optic networks and A31 and A38 motorways were re-laid. completed the installation of radio pylons. Several new lease agreements for towers and fibre optic cables were signed, notably in connection with the delegation of public telecommunication services won by Eiffage Concessions. All the leading telecommunication operators and Internet service providers 40 (France Telecom, 9Cegetel, Completel, SFR, Bouygues Telecom, Free, etc.) are clients of the group. Revenue contributed by lead to the installation of some fifteen new wi-fi hotspots at telecommunications exceeded €12 million in 2008, APRR being the service stations on its Alpine motorways. The new hotspots France’s leading motorway operator in this activity. will complement the five hotspots rolled out by AREA and the fourteen already operated by APRR at its service areas, providing • Broadband fibre optic networks motorway users with wireless Internet access on their journey. In 2008, the Group prepared for a major overhaul of its broadband The Group is currently the only French motorway operator to and multimedia IP telecommunication network. This system offer this wi-fi service. upgrade is planned for 2009 and will support the solution being As regards traffic information, the Group’s subsidiary Sira, which developed for drive-by remove toll collection as well as cater to runs the Autoroute-Info radio channel, answered request for the increasing needs for remote surveillance of traffic and toll proposal held on 26 March 2008 by the French broadcasting collection. This new very high speed IP network will enable authority (Conseil Supérieur de l’Audiovisuel – CSA) for a digital the Group to use the extra bandwidth to develop new services terrestrial radio that will ultimately replace the analogue FM for public telecommunication service operators and licensees. radio service. Sira’s candidature was approved by the CSA in early December. The next phase of the process will consist in the • Wireless networks attribution of frequencies. This is expected to take place in 2009. In 2008, the Group completed the rollout of the wireless network used in AREA’s operations. Both APRR and AREA have adopted • Organisation of telecommunication activities the Terrestrial Trunked Radio (TETRA) to create a unified network A new Engineering and Information Systems Department was to enable communication between the field and the command created on 1 July 2008 to bring together APRR’s and AREA’s centres about all safety-related events. expertise and activities in telecommunications and more generally In the field of wi-fi, AREA has struck up a partnership that will in information technologies.
02 Governance and Corporate Life 2.1 Board of Directors
The first part of the report by the Chairman of the Board of Directors Mr François Massé was co-opted by the Board of Directors on on the preparation and organisation of the work of the Board of 17 December 2008. He replaced Mr Guy Lacroix who had tendered Directors and on the internal control system describes the company’s his resignation. general management and the functioning of the Board of Directors. Mr Andrew Hunter was co-opted by the Board of Directors on On the date of this Report, the composition of the Board of Directors 17 December 2008. He replaced Mr David Harrison who had was as follows: tendered his resignation. • Jean-François Roverato, Chairman of the Board, Chief Executive Officer On 7 January 2008, Mr Philippe Nourry was appointed as Deputy • Bruno Angles, Director Chief Executive Officer. Since that date, he has been responsible • Gérard Bailly, Director for the Company’s management alongside the Chairman and • Philippe Delmotte, Director Chief Executive Officer. • Louis de Broissia, Director • Robert Galley, Director 2.2 Information concerning Directors and • John Hughes, Director Officers • Andrew Hunter, Director • François Massé, Director 2.2.1 II.2.1 Positions and offices held by the Company’s • Ross McInnes, Director Directors and Officers • Arnaud Montebourg, Director The list of the positions and offices held by the Company’s • Max Roche, Director Directors and Officers is presented below:
Mr Arnaud Montebourg was appointed by the General Meeting of 20 June 2008.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
Name, age, Date of initial DStart and end Principal Other offices and Other offices and office or position appointment date of current position positions held positions held held within the or date term of office at the time of this previously outside Company when position (year) report the company during taken up the last 5 years Jean-François From 20 2008-2010 Chief Executive Officer, • Chairman of the Board Permanent representative Roverato February 2006 Eiffage of Directors of AREA of Eiffage on the Board of Chief Executive to 26 June 2007 • Chairman: Directors of Cofiroute Officer and then from Financière Eiffarie SAS Director 7 January 2008 Eiffarie SAS Born 10 September Apollinaire Participation 1944 1 SAS Bruno Angles 20 February 2008-2010 Senior Vice-President • Director: Managing director of Vinci Director 2006 (Head of France), Macquarie Autoroutes de Energies and director of Born 14 November Macquarie European France various Vinci subsidiaries 1964 Infrastructure Funds AREA Eiffarie SAS Financière Eiffarie SAS Adelac SAS • Member of the Supervisory Board of: Saft Groupe SA Pisto • Chairman of the Board of Directors: Holding Farnier Compteurs Farnier • Abroad, Director or Chairman of various funds managed by and subsidiaries of Macquarie Group Philippe Delmotte 5 May 2008 2008-2010 Director, Eiffage • Director: Director AREA Born 10 February Clemessy 1952 Crystal Eiffarie SAS Financière Eiffarie SAS SAS Verdun Participation 1 SAS Verdun Participation 2 • Permanent representative of Eiffage TP on the Board of Directors of SMTPC • Member of the Supervisory Board FCPE Eiffage 2011 Managing director of SICA- VAS Eiffage 2000 John Hughes 5 December 2008-2010 Executive Director, • Director: Macquarie Director 2007 Macquarie Autoroutes de France Born 30 December Chief Executive Officer, MAF Finance Sarl 1951 Macquarie Infrastructure AREA Group Eiffarie SAS Financière Eiffarie SAS • Abroad, Director or Chairman of various funds managed by and subsidiaries of Macquarie Group 42 Name, age, Date of initial DStart and end Principal Other offices and Other offices and office or position appointment date of current position positions held positions held held within the or date term of office at the time of this previously outside Company when position (year) report the company during taken up the last 5 years Andrew Hunter 17 December 2008-2010 Executive Director, • Director: Macquarie Director 2008 Head of Macquarie Autoroutes de France Europe Born 16 June 1968 AREA Eiffarie SAS • Abroad, Director or Chairman of various funds managed by and subsidiaries of Macquarie Group • Manager of MAF Finance Sarl • Permanent representa- tive of Macquarie Capital Group Ltd (UK Branch) François Massé 17 December 2008-2010 Deputy Managing • Director: AREA Director 2008 director, Eiffage Compagnie Eiffage du Born 29 December Viaduc de Millau (CEVM) 1951 Clemessy Crystal Eiffarie SAS Ross McInnes 26 June 2007 2008-2010 Vice Chairman de • Director: • Chairman of the Director Macquarie Capital AREA Executive Board of Born 8 March 1954 Europe Ltd Eiffarie SAS Générale de Santé SA Adelac SAS • Permanent representative Macquarie Autoroutes de of Santé Sarl on the France SAS Supervisory Board of Santé SA Générale de Santé SA SNEF • Managing Director - Financière du Planier Finance of PPR. Faurecia • Observer on Board of Bienfaisance Holding SAS • Directors of PPR • Member of the • Director of CFAO Supervisory Board: • Director of Rexel Générale de Santé SA • Member of the Pisto SAS Supervisory Board of • Representative of the Gucci Group NV Chairman of Santé • Deputy Managing Développement Europe • Director of Thales Director of Thales Air Defence SA, Thales Systèmes Aéroportés SA, and Thales International. • Director of Adi Group Holding Pty Ltd, Adi Group Pty Ltd, Adi Munitions Pty Ltd, Australian Defence Industries, and Camelot Plc • Director of Electro Banque Arnaud Montebourg 20 June 2008 2008-2010 Member of Parliament and Director Chairman of the Saône et Born 30 October 1962 Loire General Council
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
Name, age, Date of initial DStart and end Principal Other offices and Other offices and office or position appointment date of current position positions held positions held held within the or date term of office at the time of this previously outside Company when position (year) report the company during taken up the last 5 years Max Roche 20 February 2008-2010 Finance Director, • Permanent representa- • Chairman and Director 2006 Eiffage tive of APRR on the Board Managing Director of Born 30 January of Directors of AREA Compagnie Eiffage du 1953 • Director: Viaduc de Millau (CEVM) Compagnie Eiffage du • Member of the Viaduc de Millau (CEVM) Supervisory Board of Clemessy FCPE Eiffage Crystal Eiffarie SAS Financière Eiffarie SAS Verdun Participation 1 SAS Verdun Participation 2 SAS • Permanent representative of Eiffage Travaux Publics on the Board of Directors of SMTPC • Member of the Supervisory Board of PROBTP Finances • Manager: Agenofim Entreprise Sofra Omnium Général Laborde • Representative of Eiffage and Chairman: EFI SOCFI • Director: Forclum Soficom (Belgium) Norscut (Portugal) Soficom (Belgium) TP Ferro (Spain) Gérard Bailly 4 May 2004 2008-2010 Senator Director Born 28 January 1940 Louis de Broissia 4 May 2004 2008-2010 • Director: Director of France Director Société Professionnelle Télévisions SA Born 1 June 1943 des Papiers de Presse Chairman of SEM Alésia Fondation pour l’Enfance Robert Galley 4 May 2004 2008-2010 Former Minister Director Born 11 January 1921 Philippe Nourry 7 January 2008 • Chief Executive Officer • Manager of SIRA Deputy Chief of AREA Chief executive Officer Executive Officer Permanent representative of SGTBA Born 1 December of AREA, 1958 CENTAURE Rhöne Alpes • Chairman and Managing Director of Compagnie Eiffage du Viaduc de Millau (CEVM) • Director: Adelac SAS SAS VERDUN PARTICIPATION 1 SAS VERDUN PARTICIPATION 2 44 2.2.2 Compensation and benefits in kind paid to the 2.3 Internal regulations governing Company’s Directors and Officers the Board of Directors and Ad-hoc Committees 2.2.2.1 Compensation paid to Directors and Officers The Company’s only two executive directors are its Chief Executive The Internal Regulations of the Board of Directors prescribe Officer and its Deputy Chief Executive Officer. how the Board functions. They determine the scope of No compensation has been paid to the Company’s two successive responsibility of the Board of Directors and its members Chief Executive Officers. and how the Board operates. The Internal Regulations also Mr Philippe Nourry was appointed as Deputy Chief Executive establish the role and rules governing the Audit Committee Officer on 7 January 2008. Compensation totalling €453,000, and Compensation and Selection Committee and, finally, consisting of a fixed salary of €253,000 and a bonus of €200,000, the Director’s Charter. was paid to Mr Nourry for the year ended 31 December 2008. More detailed information on this subject is provided in the This compensation was set by the Board of Director at its meeting report on the work of the Board of Directors and on internal on 26 February 2008. controls. In 2007, Mr Nourry was the Company’s Operations Director, but he was not an executive director. 2.4 Contract Award Commission No options to subscribe to or acquire shares in the Company have been granted to any of the executive directors. A Contract Award Commission, established under the terms and conditions provided by the rider to the specifications of the 2.2.2.2 Directors’ fees Company’s concession, meets each month. No director’s fees were paid in 2008 to members of the Company’s This Commission is responsible for defining the internal rules Board of Directors or to members of the various committees. for awarding and performing contracts and issues opinions on the award of contracts for work, supplies, and services exceeding 2.2.3 Securities transactions involving Directors certain thresholds defined by the French State. and related parties No options to subscribe to or acquire shares in the Company 2.5 Modifications to the organisation have been granted to any of the directors and officers. To the Company’s knowledge, none of its directors and officers After consulting authorised personnel representative bodies owned shares in APRR on 31 December 2008, apart from the (Central Workers’ Council of APRR and Workers’ Council of AREA), qualifying share held by directors as required by Article 11.2 an integrated group management organisation was established of the Company’s Memorandum and Articles of Association. by combining the central administrative departments of the two companies. 2.2.4 AFEP-MEDEF code of cooperate governance – Under the new organisation detailed by the Board of Directors Disclosure of compensation on 7 January 2008, the two companies maintain their respective When the Board of Directors met on 17 December 2008, it decided separate legal and corporate status. Group management by a unanimous vote to adhere to the recommendations issued by departments and operational departments have been placed the French Association of Private Companies (Association under the direct responsibility of the Deputy Chief Operating Française des Entreprises Privées – AFEP) and the French Officer of APRR and Chief Operating Officer of AREA. Confederation of Business Enterprises (Mouvement des Entreprises de France – MEDEF) on 6 October 2008 regarding the 2.5.1 Merging of Engineering and Project Management compensation of the directors and officers of companies whose Department and Information Systems Department shares are listed on a regulated market. These recommendations After consulting authorised personnel representatives (Central can be consulted on MEDEF’s site at www.medef.fr. Workers’ Council of APRR and Workers’ Council of AREA), The information provided in Notes I.2.2 and I.2.3 above comply with the decision was taken to merge the Engineering and Project the AFEP-MEDEF recommendations of 6 October 2008 regarding Management Department and Information Systems Department standard disclosure requirements of compensation paid to on 1 June 2008 with a view to bringing together all of the company directors and officers. Group’s IT structures. The new Engineering and Information Systems Department (DISI) regroups all of the IT resources devoted to new technologies, working at the level of the networks of the different group entities.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
2.5.2 Reorganisation of the Legal Department referred to this department. On 1 December 2008, the Group reorganised its Legal Reporting to the General Secretariat, the Legal Department Department to improve the services it renders to the operational now consists of a public law, markets and insurance depart- departments, to prepare for the negotiation of the new ment, a research, operations and development department, management contract for period 2009 to 2013, and so that and representation within AREA. contracts of any kind negotiated by group companies can be
03 Research and Development APRR’s policy is to maintain an active technological and innovation • Participation in the Phosphore project undertaken by Eiffage watch so as to remain at the forefront of technological innovations (foresight research into sustainable development harnessing the and to constantly improve its competitiveness in all aspects of R&D expertise of all of the Eiffage divisions). its activities, and at the same time respond to new customer expectations. In addition, APRR and AREA continued to participate actively in The main projects undertaken in 2008 concerned: programmes for the development of intelligent transport systems • The utilisation of new forms of energy to power equipment (micro in Europe, notably in connection with the new EasyWay wind energy installations, fuel cells, photovoltaic panels, etc.); programme for the period 2007 to 2013, aimed at reducing both • The testing of the new drive-by remote toll collection system; congestion and carbon emissions. • Research into water and energy savings in the design of The Media project for the interoperability of remote toll collection buildings and their operation; systems for heavy good vehicles was suspended in 2008 because of delays in standardising these systems.
04 Group Human Resources Policy 4.1 Human resources management On an average weighted basis, management grade staff accounted for 13% of the workforce in 2008, supervisor-grade At 31 December 2008, the Group employed 4,081 persons under staff for 44% and workers and office staff for 43%. At group permanent contracts, 40 under the early retirement scheme, level, 36.6% of the workforce was involved in toll collection and and 34 under fixed-term contracts. On an average weighted basis, customer sales, 39.8% in road operation and security, and the Group employed 3,954.5 persons under permanent contracts 23.6% of the organisation’s workforce in functional or support in 2008 and a further 9 under the early retirement scheme. activities. The weighted average number of employees has declined over CDI CDD Total CATS the last five years. In 2008, the workforce shrank by 82 persons APRR 2,875.2 19.4 2,894.5 4.5 on an average weighted basis, reflecting continuing efforts to AREA 1,045.2 14.9 1,060.1 4.5 raise productivity and automate toll collection. With regards GROUP 3,920.3 34.2 3,954.5 9.0 to the remote operation of toll collection, the Group pressed on and intensified actions in favour of employees, holding courses Note: The average weighted number of employees measures the full-time equivalent number of people employed under permanent contracts and fixed-term contracts to train up or retrain employees. over a given period (the weighting factor is a function of the rate of employment and In 2008, the Group hired 104 persons under permanent the length of service during the period). contracts, including 19 management grade staff, 47 supervisor grade staff and 38 workers and office staff. At the same time, 224 persons left the Group, mainly upon reaching retirement 46 age or having tendered their resignation. Group companies continued to give preference to internal promotions. In 2008, leave, business creation leave and sabbatical leave. 77 members of staff were promoted, including 10 management The absentee rate due to illness held steady at 4.97%. grade staff and 67 supervisor grade staff. The Group used temporary workers for toll collection and 4.3 Compensation and equality of administrative functions in order to fill seasonal jobs or employment opportunity as replacements. In 2008, temporary workers represented the equivalent of 230.5 full-time employees. 4.3.1 Compensation In 2008, 49 employees benefited from the early retirement The average compensation of current employees increased by scheme: 3.42% in 2008, of which 1.30% was in the form of individual pay • 18 toll collectors and senior toll collectors, and 3 toll awards and 2.12% was in the form of general pay awards. supervisors; In order to individualise salaries, and in particular to base • 5 motorway workers and 3 drivers; remuneration on performance, part of the remuneration of • 4 surveillance agents and 1 network safety viability workshop the executive managers of APRR and AREA is variable in nature agent and incentive-based. • 1 disabled employee 4.3.2 Employee savings plans Provided certain conditions are met, the scheme allows Sicavas Eiffage 2000 is the main investment support for both employees to take early retirement at age 57, resulting in the Group Savings Plan and the individual savings plans of the suspension of their employment contract. They continue APRR and AREA. The employer’s contribution paid by Group to receive an allowance paid by the national union for companies is reserved exclusively for payments into the Sicavas employment in industry and commerce (Union Nationale in the conditions and limits defined by applicable laws and Interprofessionnelle pour l’Emploi dans l’Industrie et le regulations. All amounts due in respect of mandatory Commerce – Unedic) and the employer (typically between profit-sharing plans for the year ended 31 December 2007 were 80% and 85% of their earlier salary) until they become entitled paid automatically into Sicavas Eiffage 2000 in 2008. to a full pension. Amounts due in respect of mandatory employee profit-sharing Generally, overtime is worked to carry out unexpected inter- plans came to €12,140,523 in 2008. Amounts due in respect ventions on the network due to extreme weather conditions, of discretionary employee profit-sharing plans came to to carry out maintenance work on safety equipment or to deal €12,826,121. In 2008, payments made in respect of the with accidents. A total of 82,300 hours of overtime were paid mandatory employee profit-sharing plans averaged €2,940 in 2008, a slight decrease on 2007. per employee and payments made in respect of discretionary employee profit-sharing plans were €2,750 per employee. 4.2 Work scheduling 4.3.3 Equal employment opportunity In response to the high quality standards expected by customers Employee representatives elected to the Works Councils and its obligations as regards toll collection, traffic management of APRR and of AREA were consulted on practices relating and infrastructure maintenance, the Group’s operations run to professional equality between the genders. At group level, non-stop, 24 hours a day and seven days a week, relying mainly women account for 44.3% of employees. They represent 24% on the following methods of work scheduling: of management grade staff and 41% of supervisor grade staff. As part of the mandatory annual negotiation, minutes were • Shift work (3x8, 2x8) cycled by day or on an annualised basis signed at the two companies to indicate the start of negotiations or toll employees; regarding equality of salary between genders. Working groups • Rotating basis from Sunday to Saturday, or staggered shift basis, have been set up to define and elaborate new indicators in particular for teams responsible for roadway operation; measuring the relative situation of men and women within • Variable working hours, mainly for the head office function; or the Group. • Part-time work. At AREA, a company agreement on professional equality In 2008, the overall absentee rate declined slightly to 7.38%, down between genders was signed in December 2008. A similar from 7.63% in 2007. Note that this overall rate includes unpaid agreement is being negotiated at APRR.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
4.4 Labour relations 4.6 Other labour issues related to the Group’s activities There were extensive contacts between employers and employees during 2008. 4.6.1 Health and safety conditions At AREA, important agreements were negotiated and signed Workplace accident prevention remains a key objective for the by a majority of the staff representatives. They concerned Group. Efforts and measures taken in this area have led to a salaries, the renewal of the employee profit-sharing agreement, decrease in the workplace accident frequency rate to around the organisation of work at the Equipment Department, 10.0, reflecting the fact that APRR is one most active motorway professional equality between genders, and the insertion operators in this area. The rate of serious accidents also of disabled persons. declined in 2008, down to 0.45 from 0.48 in 2007. These excellent At APRR, a labour agreement was signed by a majority of performances are the results of the combined action taken by the staff representatives. Other agreements were signed, the Health, Safety and Working Conditions Committee and the one relating to the standardisation of working hours for various accident prevention committees. middle-grade management staff, the other renewing the employee profit-sharing agreement for three years. 4.6.2 Employment and integration of disabled workers The Group employs 95 disabled workers. At the end of 2008, 4.5 IV.5 Training AREA signed an innovative agreement regarding the insertion of disabled workers. In 2008, the Group provided nearly 110,000 hours of training to its employees, underlining its determination to enhance core 4.6.3 Welfare schemes expertise in such areas as safety, motorway operation, Welfare schemes are administered by the works committees at marketing and management and to encourage toll collection APRR and by the works council at AREA. Each council provides employees to move up to new positions. financial assistance in a variety of forms: contributions towards There was extensive recourse to training in connection with school outings, subsidised holidays for children, holiday vouchers, the various reorganisations carried out within the Group. rental of holiday accommodation or contributions towards mutual Spending on training represented 4% of total payroll. insurance cover (at APRR). Some 75% of employees attended at least one training course In 2008, contributions paid by group companies towards these in 2008. welfare schemes amounted to €1,860,000.
05 Environmental Protection 5.1.3 Energy 5.1 Consumption of water, raw materials Total energy consumption (electricity and fossil fuel) came to and energy 145.92 million KWh. Measured in relation to the traffic, energy consumption was higher than in 2007. Nearly two-thirds of the 5.1.1 Water resources increase related to electricity, reflecting amongst other things It is estimated that nearly 480,000 cubic metres of drinking water consumption at the Maurice Lemaire tunnel. Nearly 6 million were consumed in 2008. Measured in relation to the traffic, water KWh of the electricity consumed was certified renewable consumption was equivalent to that in 2007. energy (supplied under the Equilibre Offer signed with EDF). Note that solar panels and mini wind turbines provide energy 5.1.2 Raw materials for certain facilities. In 2008, a first trial was carried out on Nearly 1,245,000 metric tons of materials were used on a fuel cell as a replacement for a small generator set at the existing motorway network, including recycled materials an isolated site. amounting to 27,4,000 metric tons, or around 2.2% of total. 48 5.2 Measures to limit the threat to 5.3 Company environmental impact ecological balance and natural assessment and certification environments 5.3.1 Environmental certification 5.2.1 Environmental pollution In connection with the process launched at the end of 2007 Priority is given to remote water catchments when it comes leading to the certification of the environmental management to environmental protection in areas abutting on the roadways system, environmental analyses required under ISO 14001 were operated by APRR. In 2008, the Group developed nearly completed to identify major environmental impacts linked 34 kilometres of roadways in proximity to areas where water to motorway operations. resources might be at risk. Two accidents involving hazardous material spills were reported 5.3.2 Specific assessments on the network in service, of which one had an impact outside Environmentally sensitive areas are monitored and assessed the motorway boundaries. at regular intervals. This concerns in particular the monitoring of Additionally, the Group is continuing its policy as regards water quality for the various waterways and for effluents and air the controlled use of pesticides that best respond to regulatory quality at Beaune in collaboration with the relevant authorities. requirements and public health concerns. New analysis of collisions involving large game, cross-referenced to the existence of purpose-built crossings for animals, was 5.2.2 Waste materials carried out, and data on motorway fencing was updated. All operation centres and 73% of service areas (excluding toll For the first time, the Group drew up a carbon balance statement stations) have waste sorting systems. in accordance with the method developed by the Agency for The Group’s overall recovery rate for the waste it produces reached Environment and Energy Management (Agence de nearly 17% in 2008. l'Environnement et de la Maîtrise de l'Energie - ADEME). The findings are summarised below:
5.2.3 Fauna • Emissions due to traffic: just over 2 million tCo2e; The network is equipped with 144 purpose-built crossings for • Emissions due to motorway infrastructures: nearly 50,000 tCo2e; animals. There are an additional 77 works (roadway or hydraulic • Emissions due to motorway operations: nearly 25,000 tCo2e. installations) that promote the continuity of biological corridors, although not purpose-built for animals. 5.4 Measures taken to ensure activities In connection with the widening of the A31 motorway, comply with legislative and regulatory 18 purpose-built crossings for animals (earthworks or passage requirements ways) were built along the motorway boundaries. In the areas of water and noise, field data is regularly updated in 5.2.4 Landscape management order to itemise protected zones and zones yet to be protected, Group practices in landscape management integrate constraints and to schedule works over several years. As required by arising from the need to protect water and aquatic environments regulations, a noise mapping has been completed covering as well as to preserve biodiversity. There is extensive management the entire network and provided to the competent authorities. of the green areas, as seen in the flowered vales alongside In connection with the process leading up to environmental the motorways. Research to develop technical alternatives management certification, measures were taken to adapt the to pesticides is ongoing, notably to fight the spread of ragweed regulatory watch performed at both head office level and at local level. and other invasive plants. 5.5 V.5 Expenditure committed 5.2.5 Noise to mitigate the environmental impact In 2008 work was completed at 48 noise trouble spots as defined of the activities by regulation. Work is under way at 168 noise trouble spots identified by the local population along the section of the A36 The portion earmarked strictly for the environment is estimated motorway that is currently being widened. at 12% of the construction cost of a new motorway.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
For motorways already in service, the Group spent €15,460,000 on 5.7 Provisions and guarantees the environment in 2008: for environmental risks • Acoustic protection: €2,007,000; • Water protection: €11,292,000; APRR Group has environmental civil liability insurance policies. • Waste processing: €965,000; In 2008, APRR and AREA were insured in an amount of €4 million • Landscaping: €1,196,000 for expenses incurred while undertaking actions to eliminate the threat of loss or damage, and to avoid any aggravation of Operating expenses incurred in respect of waste management loss or damage. amounted to nearly €11,850,000. APRR is also insured against the cost of cleaning up water catchment areas. 5.6 Sustainable development policy These policies complement the pollution and environmental accident cover in the operating civil liability policies taken out A summary of the strategy initiated by the Strategic Planning by APRR and AREA. and Development department, in particular within the framework APRR has put in place a financial guarantee amounting to of the Sustainable Development Committee, is provided in €162,000 pursuant to the prefectoral decree relating to a quarry the Annual Report. The sustainable development action plan in the flood compensation zone of the A406 motorway. and performance indicators are the main tools for mobilising and monitoring the concrete implementation of this policy. 5.8 Damages settled in 2008 pursuant The corporate and social aspects of sustainable development to a legal ruling in an environmental were dealt with at some length at the October 2008 management matter seminar. No damages of any kind were settled by the Group pursuant to a legal ruling in an environmental matter.
06 Finances 6.1 Consolidated financial statements • Decrease of €1.8 million in rental income from commercial facilities, down 5.8% year on year; 6.1.1 Revenue • Increase of €1.2 million in revenue from telecommunications, up At group level, revenue increased to €1,833.7 million in the year 10.2% year on year; and ended 31 December 2008, up 1.7% from €1,802.6 million the year • Increase of €2.2 million in other income, up 31.2% year-on-year. before. Growth was almost entirely due to the €29.6 million increase in 6.1.2 Earnings before interest, tax, depreciation toll receipts, up 1.7% to €1,782.2 million in 2008 from €1,752.6 and amortisation million in 2007. This reflected the effects of tariff adjustments, Earnings before interest, tax, depreciation and amortisation as there were decreases in traffic of 0.8% for light vehicles and (EBITDA) increased by €35.7 million, up 3.0% to €1,243.8 million 3.3% for heavy goods vehicles. in 2008 from €1,208.1 million in 2007. This was equivalent to Other sources of revenue changed as follows: 67.8% of revenues compared with 67.0% in 2007.
6.1.3 Operating profit on ordinary activities Operating profit on ordinary activities increased to €887.4 million in 2008, up 2.7% from €864.3 million in 2007. The growth was due to the combined effects of the increase in revenue and tight control of operating expenses. Operating expenses in respect of ordinary activities increased by 50 0.9% year-on-year to €946.3 million. 6.1.4 Operating profit 6.2 Company financial statements Other operating income and expenses amounted to a net charge of €0.9 million in 2008, related to the settlement of an old 6.2.1 Income statement works-related dispute, compared with net income of €1.6 million The income statement for the year ended 31 December 2008 in 2007, arising mainly from the waiver of a tax penalty. was impacted by the significant provision for the replacement Operating profit increased to €886.5 million in 2008, up 2.4% from of surface course, which amounted to €129.7 million in total. €866.0 million in 2007. The part corresponding to the provision at the start of the year, which amounted to €92.5 million, was reported as an exceptional 6.1.5 Finance costs item, while the part set aside in respect of 2008, which amounted Finance costs amounted to €361.6 million in 2008 compared to €37.2 million, was reported as an operating item. with €343.2 million in 2007. Operating profit decreased by €16.1 million. But for the provision Other financial income and expenses amounted to a net charge of for replacement, operating profit would have increased by €16.7 million in 2008 compared with €1.7 million in 2007. €21.1 million due to the combined effects of the €24.6 million In 2008, this charge included €15.7 million arising from increase in revenue and the tight control of operating expenses, the collapse of the American investment bank Lehman which rose by only €3.5 million. Brothersthat was acting as counterparty for three swaps entered Finance costs increased by €37.6 million, of which €24.2 million into by the Group in 2005. was caused by the collapse of Lehman Brothers, acting as counterparty for two swaps entered into by the Company. 6.1.6 Net profit Net profit decreased by €96.3 million, down 28.9% from 2007. Income tax expense decreased by €4.4 million to €175.8 million But for the provision for replacement, net profit would have in 2008. declined by only €11.2 million, down 3.4% year-on-year. Net profit decreased by €8.0 million to €332.9 million, down 2.4% Earnings before interest, tax, depreciation and amortisation from €340.9 million in 2007. (EBITDA) improved by €33.8 million to €934.2 million, equivalent to 66.9% of revenue compared with 65.7% in 2007. 6.1.7 Consolidated balance sheet Capital and reserves amounted to €121.9 million compared with €123.5 million at 31 December 2007, reflecting the profit for the year of €332.9 million, the distribution of an ordinary dividend of €332.3 million for 2007 (including €116.4m paid in December 2007 as an interim dividend) and the payment in December 2008 of an interim dividend of €96.1 million for 2008. Borrowings totalled €7,348.8 million at 31 December 2008 compared with €6,920.6 million at 31 December 2007. As regards borrowings, one new loan was arranged with Caisse Nationale des Autoroutes (CNA) amounting to €91 million, while loans totalling €532 million were repaid. In 2008, the Group arranged two new bank loans amounting to €250 million and to €50 million. In addition, €200 million of bonds indexed to inflation were issued via a private placement with a Dutch pension fund. Finally, at 31 December 2008, the Group had drawn €1,295 million against the €1,800 million syndicated loan facility.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
6.2.2 Five-year financial summary
2004 2005 2006 2007 2008 Share capital at 31 December (€ thousand) Share capital 33,594 33,911 33,911 33,911 33,911 Number of ordinary shares in issue 111,978,831 113,038,156 113,038,156 113,038,156 113,038,156 Number of preference shares in issue - - - - - Maximum number of shares to be created in the future: - - - - - through the conversion of bonds - - - - - through the exercise of subscription rights - - - - - Results (€ thousand) Revenue 1,136,259 1,188,890 1,272,500 1,370,925 1,395,510 Profit before depreciation, provisions, employee profit-sharing and tax 392,822 505,320 820,648 761,749 806,754 Income tax expense (24,951) 55,902 86,151 121,534 62,290 Employee profit sharing for year ended 1,612 3,125 5,447 8,707 7,366 Profit after depreciation, provisions, employee profit-sharing, and tax 144,405 166,191 435,956 333,342 237,061 Dividends 103,995 377,424 435,197 332,332 (1) Results per share (€) Profit after employee profit-sharing and tax, but before depreciation and provisions 3.73 3.98 6.45 5.59 6.52 Profit after depreciation, provisions, employee profit-sharing, and tax 1.29 1.47 3.86 2.95 2.10 Dividend per share 0.93 1.72 3.85 2.94 (1) Employees Average number of employees during the year 3,332 3,233 3,071 2,960 2,891 Salaries and wages (including profit sharing) 99,539 102,771 111,492 105,618 107,961 Employee benefits (excluding provisions for retirement indemnities) 42,083 43,536 44,137 46,215 43,930
(*) Amount to be decided by the General Meeting. Note that an interim dividend of €96,042 thousand was distributed in December 2008.
6.2.3 Non-tax deductible charges (Article 39-4 of the General Tax Code) Non-tax deductible charges totalled €98,418 and the corresponding income tax was €33,885. 52 07 Information Concerning the Share Capital and Shareholders 7.1 Breakdown of share capital and voting rights
On the date of this report, the Company’s share capital came to To the best of the Company’s knowledge, its shareholders at 31 €33,911,446.80 and consisted of 113,038,156 fully-paid up ordinary December 2008 were as follows: shares of €0.30 each.
Shareholders Number of shares % capital Number of voting right % of voting rights Eiffarie 92,101,144 81.48 % 92,101,144 81.48 % Cypress Holding AB* 11,859,008 10.49 % 11,859,008 10.49 % Elliott international LP* 893,370 0.79 % 893,370 0.79 % The Liverpool Ltd Partnership* 818,828 0.72 % 818,828 0.72 % Public 7,360,806 6.52 % 7,360,806 6.52 % Total 113,038,156 100.00 % 113,038,156 100.00 %
(*) Cypress Holding AB, Elliott International LP and The Liverpool Ltd Partnership, which are acting in concert, owned 13,576,206 actions representing 12.01% of the capital and 12.01% of voting rights on the date of this report.
Note that the company did not implement any programme to buy back its shares during the year ended.
7.2 Delegations of authority for capital • Restrictions on the exercise of voting rights and share transfers increases contained in the Memorandum and Articles of Association Article 9 of the Memorandum and Articles of Association requires All delegations of authority previously granted by the Shareholders’ any shareholder, acting alone or in concert, coming to own directly General Meeting have expired. or indirectly shares representing 1% or more the capital or voting There is no right or obligation to acquire shares attached to capital rights, and then each subsequent block of shares representing 1% issued but not paid-up, nor is there a commitment to increase the or more the capital or voting rights, to inform the Company of capital. the total number of share and securities providing access to the There is no other security providing access to the Company’s capital capital or voting rights. The shareholder is required to inform the apart from the ordinary shares. Company within five trading sessions following the date on which said threshold or thresholds were passed by way of a letter sent 7.3 Employee shareholders by recorded delivery to the Company’s registered office. The same disclosure requirements apply when the shares held Employee interest in the Company’s share capital on 31 and voting rights exercisable by a shareholder come to be less December 2008: none. than the threshold or thresholds mentioned above. The employees of APRR qualify for the employee savings policy Failure to comply with this disclosure requirement would result in in place at companies belonging to the Eiffage Group. those shares in excess of the threshold or thresholds passed being deprived of voting rights at all General Meetings held within two 7.4 Additional financial information years from the date on which notification was received by the (Article L.225-100-3 of the Company in fulfilment of this requirement. Commercial Code) • Clauses in agreements for the sale of securities at preferential • Structure of the capital – Direct and indirect shareholders conditions known to the Company On the date of this report, the Company was not aware of any The identity of the shareholders, as known to the Company on the clauses of this type. date of the report, is disclosed is Note VII.1 above.
2008 APRR ANNUAL REPORT MANAGEMENT REPORT
• List of holders of securities featuring special control rights and must be decided by the General Meeting, voting under the quorum description of these rights and majority required for extraordinary meetings On the date of this report, the Company had not issued any securities providing holders with special control rights. • Powers of the Board of Directors In accordance with Article 14 of the Memorandum and Articles of • Control mechanism provided for in employee share ownership Association, the Board of Directors determines the orientations of plan the Company’s activity and oversees their implementation. Subject There being no employee share ownership plan, no mechanism of to those powers granted expressly to the General Meeting and this type exists. within the limit of the Company’s object clause, the Board of Directors considers all matters that have a bearing on the conduct •Agreements between shareholders, of which the Company is of the Company’s affairs and through its deliberations the Board aware, that could restrict share transfers and the exercise of settles all those matters than concern it. The Board is authorised to voting rights issue bonds and to set the conditions for their issue in accordance On the date of this report, the Company was not aware of any with the provisions of Article L.228-40 of the Commercial Code. agreement of this type The Board of Directors performs those controls and verifications it deems necessary. It may decide to create ad-hoc committees to • Rules governing the appointment or replacement of members consider issues submitted to them for their opinion by the Board or of the Board of Directors and amendments to the Memorandum its Chairman. The Board decides the composition and powers of and Articles of Association these committees, which carry on their activities under the Board’s and Articles of Association, the members of the Board of Directors responsibility. are appointed by the General Meeting, voting under the quorum and majority required for ordinary meetings. • Agreements entered into by the Company that would be modified Article 12 of the Memorandum and Articles of Association authorises or terminated if there was a change in the control of the Company the Board of Directors to fill temporarily a board vacancy arising There is no agreement of this type requiring disclosure in this report. from the death or resignation of a board director, provided this appointment is submitted for approval at the next General Meeting. • Agreements providing for the payment of indemnities to members Article 11 of the Memorandum and Articles of Association requires of the Board of Directors or to employees on their resignation, on members of the Board of Director to hold at least one share in the being made redundant without real or serious cause, or if their Company. employment were terminated in connection with a public purchase Article 26 of the Memorandum and Articles of Association stipulates offer that any changes to the Memorandum and Articles of Association There is no agreement of this type requiring disclosure in this report.
08 Subsidiaries and Participating Interests For accounting purposes, the Group is constituted of the parent accounts to 30 June 2008. company APRR and its 99.82% owned subsidiary Autoroutes Details of the company’s subsidiaries and participating interests Rhône-Alpes (AREA), which is consolidated, AREA’s 49.9% owned are provided in the table below: subsidiary Adelac, which is accounted for under the equity method, and, since 2008, Axxès, which is owned 22.80% by APRR and 5.30% by AREA, and is accounted for under the equity method. All companies have a 31 December year and prepared interim 54 Subsidiaries and Outstanding Capital % of Gross Carrying Dividends Sales Net profit participating interests Reserves loans and 2008 capital value value received 2008 2008 (€ thousand) advances
Subsidiaries (more than 50% owned) AREA 82,900 76555 99.82 % 214,957 214,957 629,585 111,112 438,442 98,759 SIRA 10 233 100.00 %11 11 113 3,350 232 Park+ 300 (73) 60.00 % 180 180 2,761 232 (25) CERA 8 99 100.00 % 315 315 698 23 Participating interests Autoroutes Trafic NC NC 24.00 % 72 72 na na Centaure Grand Est 450 649 35.55 % 212 212 1,086 77 Centaure Ile de France 900 415 49.00 % 441 441 1,296 4 ALTECH 40 701 33.50 % 6 6 16 1,765 339 Axxès 7,500 2,580 22.80 % 1,710 1,710 673,498 6,785 SC Autoroutes GIE 16 105 19 DEVTEL 25 (449) 100.00 % 25 25 384 0 11 Apollinaire participations 37 21 100.00 % 37 37 0 0 SEM Alesia na na 20 20 na na Total 217,986 217,986 632,362 111,625
09Significant Events in Progress and Outlook 9.1 Maurice Lemaire tunnel 9.2 2009-2013 business plan
The Maurice Lemaire tunnel was reopened to traffic on 1 October Negotiations with the French State to agree on a new management 2008, after four years of work to add a safety gallery and to modernise contract covering the period 2009 to 2013 continued until the tunnel. the autumn of 2008. These negotiations - interrupted during As the draft rider to the concession agreement for the Maurice the fourth quarter of 2008 because of a change in personnel at Lemaire Tunnel received a negative opinion from the State Council, the Ministry for Ecology, Energy and Sustainable Development a new draft will be submitted to this body at the start of 2009, which and Town and Country Planning, with responsibility for Ecology - will include proposals to reduce the concession extension to resumed at the start of 2009. 20 years and to insert an indemnity clause corresponding to the value of the work carried out to improve the tunnel’s safety that 9.3 Outlook will not have been depreciated when the concession ends in 2042. These two proposals are tantamount to extending the concession outlook for the Company’s activities is dependent on the evolution until 2068. They will be incorporated in legislation that will be in the economic situation, it being likely that current conditions submitted to Parliament in 2009. will continue to weigh on heavy goods vehicle traffic at least in the first half of 2009, which could restrict growth in full-year revenues.
The Board of Directors Jean-François Roverato - Chairman of the Board of Directors
2008 APRR ANNUAL REPORT REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF AUTOROUTES PARIS-RHIN-RHÔNE on the preparation and organisation of the board’s work and on internal control
56 Year Ended 31 December 2008
1. Preparation and Organisation of The Board Of 2. Internal Control Procedures 61 Directors’ Work 58 2.1 Powers of the Chief Executive Officer 61 1.1 Board of Directors 58 1.1.1 Composition of the Board of Directors 58 2.2 Financial management and information 61 1.1.2 Competence of the Board and summary of 2.2.1 Organisation of accounting function the Board’s activity in 2008 59 and payment systems 61 1.1.2.1 Strategic orientations, business plan 2.2.2 Production and control of accounting statements 62 and financial situation 59 2.2.3 Organisation and control of capital expenditure 1.1.2.2 Prior authorisations 59 and cash flow management operations 62 1.1.3 Functioning of the Board of Directors 59 2.2.4 Budgetary control and reporting 62 1.1.4 Principles governing the organisation of Board meetings 59 2.3 Management information systems 63
1.2 Internal regulations of the Board of Directors 2.4 Procedures manual 63 and ad-hoc committees 59 1.2.1 Group Audit Committee 59 2.5 Procurement monitoring 63 1.2.2 Selection and Compensation Committee 59 1.2.3 Compensation and board fees paid to Directors 2.6 Organisation of internal audit or risk and Officers 60 management in the Group 64 1.2.3.1 Principles and rules for the compensation of the Directors and Officers defined by the Board of 2.7 Group internal audit 64 Directors (paragraph 7 of Article L. 225-37 of the French Commercial Code) 60 2.8 Self-assessment of internal control 64 1.2.3.2 Compensation paid in respect of the year ended 60 1.2.4 Contract Award Commission 60 2.9 Risk management 65 1.2.5 Functioning of the Board of Directors of AREA 60 1.2.6 Shareholder attendance at General Meetings 60 2.10 Forward planning 65 1.2.7 Information governed by Article L. 225-100-3 of the French Commercial Code 61
2008 APRR ANNUAL REPORT REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF AUTOROUTES PARIS-RHIN-RHÔNE on the preparation and organisation of the board’s work and on internal control
Year Ended 31 December 2008
In accordance with the provisions of Article L. 225-37 of the French as may be drawn up by other associations or confederations of Commercial Code (Code de Commerce), the Chairman of the business enterprises. Since its shares were first listed on a regulated Board of Directors is required to submit a report, attached to the market in November 2004 and then its privatisation in February Management Report, on the preparation and organisation of the 2006, the Company has adapted its practices as and when needed Board’s work and on the internal control and risk management to take into account changes in regulations and recommendations procedures put in place within the APRR Group. pertaining to corporate governance. To this end, it has modified its Memorandum and Articles of Association, adapted the Board’s The Company has adopted unequivocally the AFEP-MEDEF bylaws and implemented new organisational structures and recommendations on the compensation of executive corporate procedures in the areas of legal, finance and corporate governance. officers of listed companies published on 6 October 2008. The Company does not refer to any other code of corporate governance
01Preparation and Organisation of The Board Of Directors’ Work
The Chairman of the Board of Directors organises and oversees The Chief Executive Officer’s powers are exercised within the limits the work of the Board and reports back to Shareholders at the fixed by the Board of Directors and summarised hereunder in General Meeting. Chapter II.
The Chairman ensures that the Company’s different management Mr Philippe Nourry, Chief Operating Officer since February 2006, bodies function properly, in particular that the Directors are able to was appointed as Deputy Chief Executive Officer by the Company’s perform their duties. Board of Directors on 7 January 2008. Working under the authority of the Chief Executive Officer, he has been tasked with overseeing Pursuant to Article L. 225-51-1 of the Commercial Code, the the Group. He exercises his powers within the limits fixed by the Board of Directors decided not to separate the functions of Board of Directors, in agreement with the Chief Executive Officer, Chairman and Chief Executive Officer. and summarised hereunder in Chapter II.
The Company’s general management has been entrusted to the 1.1 Board of Directors Chairman of the Board of Directors, Mr Jean-François Roverato, who was appointed Chief Executive Officer on 7 January 2008, 1.1.1 Composition of the Board of Directors replacing Mr Benoît Heitz who had held this position since 26 June On the date this report was drawn up, the Board of Directors 2007. comprised twelve members, eight of whom represent the majority shareholder Eiffarie and four of whom are from French territorial The Chief Executive Officer represents the Company in its relations authorities. with third parties. He has been vested with broad authority to act in Board members were as follows: the Company’s name, provided that he acts in accordance with the • Jean-François Roverato; Company’s constituent documents, in relation to all matters • Bruno Angles; except those for which authority expressly resides with the • Gérard Bailly; Shareholders or the Board of Directors. • Louis de Broissia; • Philippe Delmotte; • Robert Galley; • John Hughes; • Andrew Hunter; • François Massé; • Ross McInnes; • Arnaud Montebourg; 58 • Max Roche. Finally, in accordance with the concession agreement entered into 1.2 Internal regulations of the Board by APRR, board meetings are attended in a consultative capacity of Directors and ad-hoc committees by a government representative, being the Director of Transport Infrastructures at the Directorate General for Infrastructure, The internal regulations are determined by the Board of Directors. Transport and the Sea. These regulations define the manner in which function the Board and its two ad-hoc committees: Audit Committee and Selection 1.1.2 Competence of the Board and summary of the and Compensation Committee. These regulations also contain the Board’s activity in 2008 Directors’ Code of Ethics. The Board of Directors determines the guidelines for the Company’s activities and ensures they are implemented. Subject 1.2.1 Group Audit Committee to those powers granted expressly to Shareholders at the General In accordance with its regulations, the Audit Committee consists of Meeting and consistent with the limits set forth in the Company’s three members chosen by the Board of Directors for their expertise. constituent documents, the Board considers all matters relating to Two members are Company Directors. The Chairman of the Audit the proper functioning of the Company and debates all matters Committee is appointed by the Board of Directors. concerning the Company. The French Government representative is notified of committee 1.1.2.1 Strategic orientations, business plan and financial meetings and may attend them in a consultative capacity. The situation Audit Committee met three times in 2008. At least once a year, the Board of Directors reviews the annual financial statements prepared by the Company and by the Group The Audit Committee reviews the procedures for the preparation and the implementation of the strategy, business plan and financial of the company financial statements and consolidated financial policy defined for the Company and for the Group. statements. It ensures that the accounting methods are appropriate and that they are applied consistently, and that internal procedures 1.1.2.2 Prior authorisations for collating and checking the information contribute to achieving The Board of Directors is advised by the Company’s senior these goals. management of all matters requiring prior approval by the Board. Each year, the Audit Committee informs the Board as to the 1.1.3 Functioning of the Board of Directors checks carried out and observations arising from its work. These regulations are intended to define the scope of the It also refers to the Board issues relating to any options regarding responsibilities of the Board and its members and the manner in the accounting standards being applied. Finally, it makes which the Board functions. It is the Board that defines the objectives recommendations regarding the appointment and renewal of ad-hoc committees and the matters they should consider. of the statutory auditors and the scope of their work.
1.1.4 Principles governing the organisation of Board More generally, the Audit Committee is called upon to issue meetings opinions on any accounting, financial or tax issues brought to its The Chairman of the Board of Directors convenes the Board as attention or that it felt it needed to consider. and when he deems necessary in the best interest of the Company. Once a year, the Audit Committee reviews the work performed by The memorandum and articles of associations and internal the internal audit function and by the risk management function. regulations of the Board of Directors set forth the conditions under which members participate in board meetings by videoconference At the end of 2008, the Audit Committee approved the internal and other means of telecommunications. audit charter of the APRR Group, the risk management charter and policy, and the Audit Committee and risks’ charter. The Board of Directors conducts an annual assessment of its work. In 2008, the Board met on six occasions. The attendance 1.2.2 Selection and Compensation Committee rate was 77% in 2008 and 83% in 2007. The Selection and Compensation Committee is charged with reviewing applicants for key management positions within the Company and the Group and with issuing proposals and opinions in this regard. It establishes the procedures for selecting independent
2008 APRR ANNUAL REPORT REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF AUTOROUTES PARIS-RHIN-RHÔNE on the preparation and organisation of the board’s work and on internal control
directors to be appointed in the future and submits proposals The above information meets disclosure requirements for the regarding the fixed and variable compensation of key management standardised presentation of compensation paid to executive personnel and their terms and conditions of employment. corporate officers contained the AFEP-MEDEF recommendations published on 6 October 2008. The Selection and Compensation Committee consists of four members chosen by the Board of Directors. Committee members 1.2.4 Contract Award Commission are Board Directors. The Committee’s Chairman is appointed by The Company has set up a Contract Award Commission charged the Board of Directors. The Committee is convened by its with defining internal regulations for negotiating and performing Chairman as and when needed. contracts, as well as with issuing opinions binding on the Company regarding public works, supply and service agreements 1.2.3 Compensation and board fees paid to Directors exceeding specified thresholds. and Officers The Contract Award Commission operates according to the 1.2.3.1 Principles and rules for the compensation of specifications appended to the service concession agreement. the Directors and Officers defined by the Board of It does not per se constitute an ad-hoc committee reporting Directors (paragraph 7 of Article L. 225-37 directly to the Board of Directors. of the French Commercial Code) On 17 December 2008 the Company adopted unanimously The Contract Award Commission met eight times in 2008. and unequivocally the AFEP-MEDEF recommendations on the compensation of executive corporate officers of listed companies 1.2.5 Functioning of the Board of Directors of AREA published on 6 October 2008. The recommendation can be AREA, which is 99.82% owned by the Company and constitutes its consulted on the website of the French Confederation of Business main subsidiary, also has its own internal regulations governing Enterprises at www.medef.fr the functioning of its Board of Directors. These regulations are based on the general principles underlying the internal regulations 1.2.3.2 Compensation paid in respect of the year ended adopted for APRR’s own Board of Directors. Corporate governance The Shareholders, at General Meeting, have not voted on any principles are identical. A majority of board members also sits on resolution setting the total amount to be paid by way of board fees the Board of Directors of APRR. to the Company’s Directors. 1.2.6 Shareholder attendance at General Meetings The only Executive Directors of APRR are its Chief Executive Office Pursuant to Article 19 of the Company’s Memorandum and and Deputy Chief Executive Officer. Articles of Association, any Shareholder may as of right attend General Meetings and participate in the deliberations, in person or The Company’s last two Chief Executive Officers did not receive by proxy, whatever the number of shares held on production of an any compensation in respect of their functions at the Company. official document considered as proof of identity. However, attendance at General meeting is subject to the shares having been Since his appointment as Deputy Chief Executive Officer on recorded in the name of the Shareholder or of an intermediary on 7 January 2008, Mr Philippe Nourry has received a total compensation the Shareholder’s behalf in accordance with regulatory requirements of €453,000, consisting of a fixed remuneration amounting to at least three working days before the General Meeting, no later €253,000 and of a bonus amounting to €200,000. In 2007, than midnight Paris time, either in registered form in the company’s Mr Philippe Nourry, who then held the position of Chief Operating register or in bearer form in the register kept by the authorised Officer, was not an Executive Director of the Company. intermediary. The shares’ recording in bearer form in the register kept by the authorised intermediary is evidenced by a certificate of No options to subscribe to or purchase the Company’s share have ownership issued by this intermediary. ever been awarded by the Company. 60 1.2.7 Information governed by Article L. 225-100-3 of susceptible of having a bearing were a public bid to be made. the French Commercial Code The full text of this report can be found in the Annual Report that Information governed by Article L. 225-100-3 of the French is available from the Company’s website at www.aprr.com. Commercial Code is disclosed and explained in the Directors’ This report is posted to the website after the board meeting held to Report submitted to the General Meeting when this information is approve its content.
02 Internal Control Procedures APRR has based its internal control framework on the Framework recalled that the Deputy Chief Executive Officer assists the Chief issued by the Committee of Sponsoring Organizations of the Executive Officer implement the policies defined for the APRR Treadway Commission (COSO). This states that internal control is Group. a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: 2.2 Financial management and • Effectiveness and efficiency of operations information • Reliability of financial reporting • Compliance with applicable laws and regulations The financial management of APRR and AREA have been placed under the authority of a single Chief Financial Officer. This definition is based on a number of key concepts, which are that: • Internal control is effected by people. It is not merely policy The presentation of the company financial statements is identical manuals and forms, but people at every level of an organisation. and they are prepared applying the same accounting policies and • Internal control can be expected to provide only reasonable methods at both companies. assurance, not absolute assurance, to an entity’s management and board. The Group’s consolidated financial statements are included in the consolidated financial statements of Eiffage Group. It is the same Internal control consists of five interrelated components integrated statutory auditors who report on the two sets of consolidated into the management process: control environment, risk assessment, financial statements. control activities, information and communication, and monitoring. 2.2.1 Organisation of accounting function and payment 2.1 Powers of the Chief Executive Officer systems Responsibilities for maintaining the accounting records and for The Chief Executive Officer is vested with powers by law. He is payment instructions are allocated as follows: responsible for managing the Company and for representing the Company in its dealings with third parties. He is vested with broad • Group Finance Department authority to act on behalf of the Company, provided that he acts in The Group Finance Department defines the accounting methods accordance with the Company’s constituent documents, in relation and practices applied by the different group entities. It controls and to all matters except those for which authority expressly resides ensures that these are applied consistently. with the Shareholders or the Board of Directors. The Department produces the consolidated financial statements. The Board of Directors controls the powers of the Chief Executive In terms of scope, these statements cover APRR, AREA (a 99.82% Officer in the case of major decisions relating to the Company owned subsidiary of APRR), Adelac (a 49.9% owned subsidiary of and/or its subsidiaries when the amounts in question exceed AREA) and, since 1 January 2008, Axxès (in which APRR has a €15 million. 22.8% participating interest and AREA a 5.3% interest). Adelac and The powers of the Deputy Chief Executive Officer are controlled in Axxès are accounted for using the equity method. the same way as those of the Chief Executive Officer. It will be
2008 APRR ANNUAL REPORT REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF AUTOROUTES PARIS-RHIN-RHÔNE on the preparation and organisation of the board’s work and on internal control
The Department records head office operating expenses and The Company has complied with the requirements of the capital expenditure as well as loans. It is responsible for initiating Transparency Directive since 2007 without having to avail itself of the corresponding payments. the transitional measures.
It is responsible for recording toll receipts settled on a subscription 2.2.3 Organisation and control of capital expenditure basis or using credit and other charge cards, as well as rental and cash flow management operations income from leasing commercial premises and telecommunication installations. a) Capital expenditure monitoring The Group’s capital expenditure programme is drawn up on a It consolidates and controls the accounting records of the Regional pluri-annual basis. Monthly budgets for the current year and Departments and submits direct debit instructions to the bank. annual budgets for subsequent years are updated on a quarterly Finally, it produces the tax returns and accounting statements. basis from the information provided by the operational departments concerned. • APRR Regional Departments The operations of APRR are coordinated by APRR’s Operations The Group’s capital expenditure commitments arise from Department, to which three Regional Units report. The operations the concession agreements entered into by APRR and AREA and of AREA are coordinated by AREA’s Operations Department. are specified and supplemented in the contracting agreements signed for the period 2004 to 2008. The accounting departments of the Regional Departments record operating expenses, capital expenditure, toll receipts (apart from b) Forward looking statements amounts settled by subscribers or using credit or other charge The Company seeks to assess business prospects over cards) and miscellaneous revenue. Payment instructions are the remaining term of the concession based on macroeconomic authorised in compliance with the delegation of power in application. parameters and communicates these estimates to the State pursuant to its obligations under the concession agreement. • AREA Finance Department AREA’s Accounting Department is responsible for all accounting c) Cash and debt management entries relating to the company’s operations. Cash flow management gives rise to monthly reporting indicating estimated and actual cash flows at the level of the different It records the operating expenses and capital expenditure by companies (i.e. APRR and AREA) and at group level. More specific the different departments as well as entries relating to the loans reporting is produced for the quarterly updates and on the balance and to the commercial premises. All parameters relating to the sheet dates. Financing requirements are monitored using the operating expenses and construction expenditure are determined information received each month on operating expenses and by AREA’s Accounting Department. capital expenditure.
2.2.2 Production and control of accounting statements Cash flow management is now performed for both AREA and APRR In accordance with regulations, the Group has prepared consolidated by the Group Treasury Department apply common procedures. financial statements applying International Financial Reporting standards (IFRS) since 2005. The company financial statements of Debt management involves arranging the financing needed by the APRR and its subsidiaries are prepared in accordance with Group and includes monitoring obligations and covenants for the generally accepted accounting principles in France. various loan agreements and market financing as well as interest rate risk management, including making recommendations to These financial statements are audited by independent auditors in limit exposure to this risk. accordance with applicable professional standards. The consolidated financial statements are available on the Company’s website. 2.2.4 Budgetary control and reporting The Group produces a monthly management report which contains operational and financial indicators measuring traffic, revenue, productivity, quality, safety, operating expenses, cash position, employee numbers and EBITDA for the month and year-to-date, comparing actual performances with the budget 62 and with the prior year. This report is produced on the 15th of each month. The ERP system used by the Group for human resources management As regards the preparation of the budget, each department draws will soon be supplemented with a new system for managing staff up initial proposals regarding employee numbers and operating employed on a temporary basis (PIXID project). The new application expenses in September or October of each year. These proposals was tested at a pilot site, the Villefranche-Limas toll plaza, in 2008. are consolidated. Meetings are held with the Finance Department In addition, the overhaul of the applications for managing working and Human Resources Department to fine-tune these proposals, time and on duty shifts is ongoing (ATOS project) and a new training which are then validated by senior management. management module has been brought into service. Once validated, the budgets are notified to the departments and integrated into the human resources and management systems. In the field of finance, a pre-study has been completed with a view The budgets are broken down in monthly budgets. to the paperless management of supplier invoices and a new legal archiving system of accounting and financial data was integrated During the year, budget estimates are reviewed on a quarterly into the management and finance ERP. basis in April, July and October. The results of this process are communicated internally along with a revised income statement. The Group’s information systems were adapted to integrate Adelac, the company awarded the concession for the northern Capital expenditure is the object of annual budgets which are section of the A41 motorway linking Annecy and Geneva, brought revised on a quarterly basis. into service in December 2008.
These budgets are discussed at meetings attended by the Group’s Improvements were made to AREA’s IT installations, with the Executives, the Finance Department and the Operational construction of a second computer room under way designed to Departments concerned. be used as backup in the eventuality of a disaster. An IT backup plan, similar to APRR’s, was drawn up for AREA. It will be put in When the budget is being prepared and on the occasion of the place during the first half 2009. quarterly updates, elaborated according to the process described above and in cooperation with the operational and functional 2.4 Procedures manual departments of the company, the Group’s Deputy Chief Executive Officer and Chief Financial Officer are responsible for ensuring The business activities carried on by APRR are organised around a decisions taken are consistent with the contracting contract and set of procedures that underlay the various processes in place at with the operational and financial objectives being pursued. The the Company. operational and functional departments of the company take responsibility, towards General Management, for the achievement These procedures are available to managers on APRR’s Intranet, of those objectives. which underwent a complete overhaul in 2007. 2.3 Management information systems 2.5 Procurement monitoring
The Group’s IT Department, Engineering and Project Management In accordance with the riders to the APRR and AREA concession Department and certain the operating departments’ units were agreements approved by Decree 2007-815 of 11 May 2007, public combined on 1 July 2008 to form the Group’s Engineering and IT works contracts with a value of more than €2 million (excluding Department. This new structure brings together all of the group taxes) and supply and service contracts with a value of more than expertise in the fields of information and telecommunication €240,000 (excluding taxes) entered into by the Group in connection technologies. with the concession remain within the scope of Decree 2005-1742 of 30 December 2005, which sets out the rules applicable to The standardisation of the information systems of APRR and AREA contracts concluded by the adjudicating authorities listed in Article continued in order have common applications, equivalent technical 3 of Order No. 2005-649 of 6 June 2005 regarding contracts infrastructures and similar working methods at both companies. concluded by certain public or private entities that are not subject to the French Public Procurement Code (Code des Marchés Publics). The overhaul of the sales information systems (SITEL project) at APRR and AREA got under way in 2008. The new Group application will be started up in the first half of 2009 at APRR and in 2010 at AREA.
2008 APRR ANNUAL REPORT REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS OF AUTOROUTES PARIS-RHIN-RHÔNE on the preparation and organisation of the board’s work and on internal control
Accordingly, these contracts must give rise to an information Each year a report on the activities of the Contract Award notice at European level and a tender invitation must be staged Commissions covering the previous year is drawn up and submitted before awarding these contracts. to the National Contracts Commission (Commission Nationale des Marchés). APRR and AREA each have a Contract Award Commission that operates in accordance with the provisions of Article 6 of the 2.6 Organisation of internal audit or risk specifications to their respective concession agreements, which management in the Group are identical. Internal audit and risk management are two distinct but These Commissions are responsible for defining the internal rules complementary functions placed under the responsibility of for awarding and performing contracts and issuing opinions on the the Group Audit and Risk Management Department. award of contracts for work, supplies and services that comply This Department reports directly to the Chief Executive Officer. with the aforementioned thresholds. The Department is responsible for implementing all measures In 2008, these two Commissions reviewed a total of 40 contracts necessary to apply the recommendations issued by the French that breakdown as follows: institute of internal auditors and thereby comply with international auditing standards. In 2007, the services rendered by the Number of contracts APRR AREA Department were assessed and certified by the French Institute Service contracts 16 2 of Internal Auditors (Institut Français de l'Audit et du Contrôle Supply contracts 3 3 Internes). A follow-up audit in respect of this certification Public works contracts 14 2 conducted in 2008 confirmed the certification.
The Group Audit and Risk Management Department informs the Audit committee on a quarterly basis of the conclusions of its duties. It presented its 2008 annual report and 2009 audit programme to the Audit Committee in December 2008. Note that in certain instances, a procedure may cover several contracts. These contracts were concluded after completing the 2.7 Group internal audit following procedures: Internal audit is an independent and objective function that provides Number of contracts APRR AREA the Group with assurances regarding the controls exercised over Open procedures 5 1 its operations. It also makes proposals for improving these Restricted procedures 20 5 operations and enhancing the effectiveness and efficiency of its gotiated procedures 5 1 processes. Competitive dialogue 3 In 2008, the Group’s internal auditors carried out 17 general or The Commissions issued favourable opinions (in certain instances specific assignments at APRR and AREA covering operational and making observations) on the award of the contracts as proposed functional aspects as well as the day-to-day operations and the by the investment directors concerned in all but two instances information system. The internal audit team consists of 4 persons. when the award procedure was called out because prices were It also has recourse to temporary external resources to complete djudged to be too high. its assignments.. 2.8 Self-assessment of internal control
Dans le cadre de la mise en place d’un dispositif d’auto-évaluation As part of the implementation of the procedure for the annual self-assessment of the internal control system within the APRR 64 Group, in 2008 the Group Internal Audit and Risk Management Department put in place an annual self-assessment of internal • Human resources control by managers at all of the Group’s decentralised operating • Administrative and financial units covering 27 districts at APRR and 8 toll plazas, 6 maintenance • Corporate strategy centres and the traffic centre at AREA. The organisation tasked with risk management is based on a For this first annual self-assessment conducted in 2008, 107 centralisation of risk management supported by a network of risk questions were put to the APRR districts, 78 to the AREA toll managers. plazas, 81 to the AREA maintenance centres and 59 to the AREA traffic centre. The level of the internal control was assessed at 2008 marked the second year of existence of the risk management each entity, first for each question and then for each process. system in its present form. 2.9 Risk management 2.10 Forward planning
Risk management is aimed at identifying, assessing, processing In terms of audit, internal control and risk management, the next and monitoring the risks to which the Group is exposed. These steps in 2009 will be: risks are of diverse nature: operational, financial, strategic, human, regulatory and reputational. • the completion of the 2009 audit plan; • the extension of the annual internal control self-assessment Risk management is based on a structured, documented process procedure at all entities of the 2 operating departments of APRR for updating risk mapping and for processing, monitoring and and AREA; controlling risks. This process has been formalised in a document • the completion of the second annual internal control entitled “APRR Group Risk Management Policy and Charter”. self-assessment procedure for all of the Group’s operating activities; and The process for identifying risks and their hierarchy implemented • the continuing application of the risk management process. by the Group consists of 4 stages:
• Risk mapping: identifying and setting priorities for all risks arising from the Group’s business activities and its external environment. Paris, 28 April 2009
• Updating of risk mapping: periodic updating of mapping process Jean-François Roverato and hierarchy for risks arising from the Group’s business activities Chairman of the Board of Directors and its external environment.
• Risk processing: management supervision of actions taken to mitigate those risks considered as a priority, i.e. major risks.
• Risk monitoring and control: periodic monitoring of action plans.
The Group’s different risk exposures have been classified into 7 categories:
• Construction • Operations • Toll receipts • Legal and reputational
2008 APRR ANNUAL REPORT REPORT OF THE AUDITORS prepared pursuant to Article L.225-235 of the French Commercial Code (Code de Commerce) on the report by the Chairman of the Board of Directors of Société des Autoroutes Paris Rhin Rhône (Year ended 31 December 2008)
PricewaterhouseCoopersAudit To the Shareholders 63, rue de Villiers 92208 Neuilly-sur-Seine cedex L.225-235 of the French Commercial Code we present to you France our report on the report prepared by the Chairman of your company for the year ended 31 December 2008 in accordance Salustro Reydel with the provisions of Article L.225-37 of the French Member of KPMG International Commercial Code. 1, cours Valmy It is the responsibility of the Chairman to prepare and submit 92923 Paris La Défense for approval by the Board of Directors a report describing the France internal control procedures and risk management procedures implemented within the Company and disclosing the other Aux actionnaires information required by Article L.225-37 of the Commercial Société des Autoroutes Paris-Rhin-Rhône Code relating notably to the system of corporate governance. 36 rue du Docteur Schmitt It is our duty to: 21850 Saint Apollinaire France • Inform you of any observations we may have on the information and statements contained in the Chairman's report on internal control procedures relating to the preparation and processing of accounting and financial information and
• Certify that the report contains the other information required by Article L.225-37 of the French Commercial Code, bearing in mind that we are not required to verify the accuracy and fairness of the information in question.
We performed our work in accordance with the auditing standards applicable in France.
Information concerning internal control procedures relating to the preparation and processing of accounting and financial information
Auditing standards require that we perform such procedures so as to establish the accuracy and fairness of the information given in the Chairman's Report on internal control procedures relating to the preparation and processing of accounting and financial information. These procedures consisted notably of:
• reviewing the internal control procedure for preparing and processing the accounting and financial information underpinning the information presented in the Chairman's report as well as the existing supporting documents; 66 • reviewing the work carried out to prepare this information and the existing supporting documents;
• determining whether any major internal weakness identified by us in connection with our assignment, and affecting the way in which the accounting and financial information was prepared and processed, was properly disclosed in the Chairman's report.
On the basis of this work, we have no observation to make concerning the information provided relating to the internal control procedures applied by the company for the preparation and processing of accounting and financial information as contained in the report prepared by the Chairman of the Board of Directors pursuant to the provisions of Article L.225-37 of the French Commercial Code.
Paris La Défense and Neuilly-sur-Seine, 28 April 2009
The Statutory Auditors
PricewaterhouseCoopersAudit Salustro Reydel Member of KPMG international
Louis-Pierre Schneider, Thierry Charron Benoît Lebrun Partner Partner Partner
2008 APRR ANNUAL REPORT GROUP RISK ANALYSIS
01Risk management Risk management is aimed at identifying, assessing, processing • Risk processing: management supervision of actions taken to monitoring and controlling the risks to which the Group is exposed. mitigate those risks considered as a priority, i.e. major risks. These risks are of diverse nature including : operational, financial, strategic, human, regulatory and reputational. • Risk monitoring and control: periodic monitoring of action plans.
Risk management is based on a structured, documented process The Group’s 33 risk exposures have been classified into 7 categories: for updating risk mapping and for processing, monitoring and • Construction controlling risks. This process is formalised in a document entitled • Operations “APRR Group Risk Management Policy and Charter”. • Toll receipts • Legal and reputational The process for identifying risks and their hierarchy implemented • Human resources by the Group consists of 4 stages: • Administrative and financial • Risk mapping: identifying and setting priorities for all risks arising • Corporate strategy from the Group’s business activities and its external environment. The organisation dedicated to risk management is based on a • Updating of risk mapping: periodic updating of mapping process centralized risk management activity supported by a network of and hierarchy for risks arising from the Group’s business activities risk managers. and its external environment. 2008 marked the second year of full operational running of the risk management system. 68 02 Insurances As regards insurance, the Group's policy focuses on arranging This cover complements the pollution and accidental environmental cover for what would be material claims. Low-frequency and damage cover of the Group's third party liability policy. low-intensity risks are addressed through the use self-insurance and deductibles. In accordance with the 1st of August 2008 transposition law concerning the environmental liability, environmental damage The Group seeks to optimise and extend insurance cover taken insurance covers, from then on, environmental damages. out, not only to protect against any claims, but also to ensure that the protection is and remains at a cost level that does not affect • Employer financial risk insurance covering the consequences of the Group's competitiveness. This long-term insurance policy a work-place accident or illness. Taken out by the Group, these requires a partnership with high quality brokers and insurers policies concern work-place accidents and professional illnesses denoted for their excellent financial solidity. due to criminal negligence on the part of the Group and cover the repayment of the additional contributions and benefits paid to The main insurance policies taken out by the Group are summarised the victim or legal beneficiaries in application of the French Social below: Security Code. • Property damage insurance covering standard risks such as fire, water damage, explosions, lightning, theft, machine breakage, • Keyman third party liability insurance covering the Directors and experts' fees, loss of income. Limits of coverage are set according Officers of APRR and AREA, taken out by the Eiffage Group. to the type of damage. • Legal protection insurance has been taken out by APRR covering • Third party and professional liability insurance covering the all costs to obtain the settlement out of court or in court of suits financial consequences arising from the companies' civil liability seeking compensation for bodily injury, property damage or for damage caused to third parties in the conduct of their business consequential loss that would not be covered by other insurance or arising from professional negligence when rendering services. policies. This policy is used essentially to press claims for damage caused to the public roadways as a result of traffic accidents. • Environmental damage insurance covering bodily injury, property damages and consequential damages to third parties resulting • Group automobile insurance under two compulsory fleet policies from accidents affecting the environment. that provide varying degrees of cover based on the options selected Policies also cover expenses incurred in connection with measures for each category of vehicles insured. to mitigate risks or prevent their aggravation. Under this cover, the Group is insured for costs incurred to decontaminate water basins.
03 Exceptional events and disputes APRR is involved in various disputes having arisen in the normal course of business. The Company considers that none of the ongoing disputes arising from the normal course of ;business are susceptible of having a material impact on its operating profit, its activity or its financial situation and the provisions set aside in respect of these disputes are reasonable in light of the amounts that might have to be disbursed.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
70 Financial statements 72 10. Provisions 85 11. Employee benefits provided 1. Consolidated balance sheet 72 under defined benefit plans 86 1.1. Assets 72 12. Financial instruments and derivative instruments 88 1.2. Equity and liabilities 72 13. Other current and non-current liabilities 91 2. Consolidated income statement 73 14. Revenue 91 3. Consolidated statement of changes in equity 74 15. Purchases and external charges 91 4. Consolidated cash flow statement 75 16. Employee benefit expenses and headcount 92 17. Taxes (other than income tax) 92 Notes to the 2008 consolidated 18. Depreciation and amortisation expense financial statements 76 and provisions 92 19. Other operating income and expenses 92 1. General information 76 20. Income from cash and cash equivalents 93 2. Significant accounting policies and methods 77 21. Finance costs 93 2.1. Basis of preparation 77 22. Income tax expense 93 2.2. Basis and methods of consolidation 78 23. Earnings per share 94 2.3. Non-current assets held under concessions 78 24. Dividend 95 2.4. Borrowing costs 78 25. Commitments 95 2.5. Asset impairment 79 26. Related party transactions 96 2.6. Other non-current financial assets 79 27. Management indicators 96 2.7. Cash and cash equivalents 79 28. Events after the balance sheet date 96 2.8. Inventories 79 29. Fees paid to the statutory auditors 97 2.9. Trade and other receivables 79 2.10. Borrowings 79 2.11. Employee benefits - defined benefit plans 79 2.12. Provisions 79 2.13. Leasing agreements 79 2.14. Revenue and other income 80 2.15. Government grants 80 2.16. Income tax 80 2.17. Derivative instruments 80 2.18. Segment reporting 80 2.19. Basis of presentation 80 3. Non-current assets 81 4. Investments in associates 83 5. Trade and other receivables 83 6. Other current assets 83 7. Cash and cash equivalents 84 8. Analysis of financial assets and financial liabilities by maturity 84 9. Share capital 85
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
Financial statements
01Consolidated Balance Sheet 1.1 Actif
At 31 December (€ million) Notes 2008 2007 Non-current assets Non-current assets held under concessions 3 7,473.6 7,380.2 Investments in associates 4 58.2 1.4 Other non-current financial assets 58,2 30.9 Other non-current assets 0.1 0.2 Total non-current assets 7,591.6 7,412.6 Current assets Inventories 8.5 8.5 Trade and other receivables 5 78.0 103.9 Current tax assets 63.6 0.0 Other current assets 6 187.5 89.9 Cash and cash equivalents 7 241.9 71.8 Total assets 8171,2 7686,6
1.2 Equity and liabilities
At 31 December (€ million) Notes 2008 2007 Capital and reserves Share capital 9 33.9 33.9 Consolidated reserves (244.9) (251.3) Profit for the year 332.7 340.7 Group share of shareholders’ equity 121.7 123.3 Minority interests 0.2 0.2 Total equity 121.9 123.5 Non-current liabilities Borrowings 8 6,612.2 6,194.2 Deferred tax liabilities 22 261.0 212.0 Provisions 10 22.7 20.1 Other non-current liabilities 13 38.6 43.2 Current liabilities Trade and other payables 200.5 178.0 Borrowings 8 179.7 188.0 Non-current borrowings due within one year 8 556.9 538.3 Current tax liability 0.0 34.3 Provisions 10 9.6 13.5 Other current liabilities 13 168.0 141.3 Total equity and liabilities 8,171.2 7,686.6 72 02 Consolidated income statement
At 31 December (€ million) Notes 2008 2007 Revenue 14 1,833.7 1,802.6 Other operating revenue 0.0 0.1 Purchases and external charges 15 (150.3) (162.3) Employee benefit expenses 16 (209.6) (208.9) Taxes (other than income tax) 17 (230.7) (228.8) Depreciation and amortisation expenses 18 (358.4) (345.5) Provisions 18 1.1 3.3 Other operating income (expenses) from ordinary activities 19 1.6 3.9 Operating profit on ordinary activities 887.4 864.3 Other income (expenses) from operations 19 (0.9) 1.6 Operating profit 886.5 866.0 Income from cash and cash equivalents 20 9,1 9,5 Finance costs 21 (370.6) (352.7) Net finance costs (361.6) (343.2) Other financial income (expenses) 21 (16.7) (1.7) Share of profit of associates 0.4 (0.0) Income tax expense 22 (175.8) (180.2) Profit for the year 332.9 340.9 Attributable to: – Equity holders of the parent company 332.7 340.7 – Minority interests 0.2 0.2 Earnings per share attributable to equity holders of the parent company – Basic earnings per share (euros) 2.94 3.01 – Diluted earnings per share (euros) 2.94 3.01
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
03 Consolidated Statement of Changes in Equity
(€ million) Share Share Reserves Profit of Group Minority Total capital premium the year share interest equity At 1 January 2007 33.9 393.0 (250.6) 263.1 439.4 0.2 439.6 Appropriation of 2006 profit 263.1 (263.1) - - Dividends (392.6) (143.2) (535.8) (0.2) (536.0) Interim dividends (116.4) (116.4) (116.4) Profit for the year 340.7 340.7 0.2 340.9 Change in fair value of cash flow derivatives (4.5) (4.5) - (4.5) Total income and charges recognised directly to equity (4.5) 340.7 336.2 0.2 336.4 At 31 December 2007 33.9 0.4 (135.2) 224.3 123.3 0.2 123.5 Dividends (215.9) (215.9) (0.2) (216.1) Interim dividends (96.1) (96.1) (96.1) Profit for the year 332.7 332.7 0.2 332.9 Change in fair value of cash flow derivatives (22.3) (22.3) - (22.3) Total income and charges recognised directly to equity (22.3) 332.7 310.4 0.2 310.6 At 31 December 2008 33.9 0.4 (149.1) 236.6 121.7 0.2 121.9
74 04 Consolidated Cash Flow Statement
Year ended 31 December (€ million) 2008 2007 Cash and cash equivalents at the beginning of the year 72 131 Profit for the year 333 341 Income tax expense 176 180 Share of profit of associates -- Net interest expense 358 346 Depreciation and amortisation expense and provisions 390 349 Share-based payments and other adjustments (3) 2 Gains on disposals (1) 1 Taxes paid (218) (146) Interest paid (365) (360) Cash generated by operations 670 712 Movement in working capital related to ordinary activities (44) (13) Net cash from operating activities (I) 625 699 Purchases of assets held under concessions (436) (461) Purchases of non-current financial assets (*) (108) - Total purchases on non-current assets (544) (461) Proceeds from disposals of non-current assets 2 4 Net cash from (used in) investing activities (II) (542) (456) Dividends paid (312) (652) Repayment of borrowings (832) (792) New borrowings 1,231 1,143 Net cash used in financing activities (III) 87 (301) Net decrease in cash and cash equivalents (I+II+III) 170 (59)
Cash and cash equivalents at the end of the year 242 72
(*) In 2008, this corresponds to changes in the shareholding held by AREA in Adelac and in advances made by AREA to Adelac.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
Notes to the 2008 Consolidated Financial Statements
01General Information Autoroutes Paris-Rhin-Rhône Group is primarily composed of two • the authority of the French government to pre-emptively terminate companies - Autoroutes Paris-Rhin-Rhône (APRR) and Autoroutes concession contracts and to buy back concession contracts: under Rhône-Alpes (AREA) - which operate motorway networks whose public law, the State has a unilateral option to terminate concession construction they financed under the terms of two different motorway in the public interest and under the control of the courts; in addition, concession agreements that expire in 2032. Contracting contracts the agreement gives the French government a buyback right as of define the investment programmes for the two concessions and 1 January 2012 on the grounds of the public interest. practices regarding tariffs for the period 2004 to 2008. The network covers a total of 2,279 kilometres of motorways, 2,234 kilometres of which are in service. A separate concession agreement covers the operation of the The motorway concession agreements and the related specifications Maurice Lemaire tunnel by Autoroutes Paris-Rhin-Rhône until are the principal instruments defining the relations between the 31 December 2022. French government, Autoroutes Paris-Rhin-Rhône and Autoroutes It is planned to extend the concession for this tunnel by 20 years, Rhône-Alpes: they govern the construction and operation meaning that it would end in 2042 instead of 2022. The decree of the motorways, the financial provisions applicable, the term of extending the concession term has not yet been published, the concessions and the conditions for the return of the facilities but the 2008 financial statements take into account the extension at the end of the concession. of the concession. The principal provisions that could influence the operating outlook APRR is a limited company (Société Anonyme - SA) having include: its registered office at 36, rue du Docteur Schmitt, 21850 Saint-Apollinaire, France. • the obligation to maintain all structures in good service condition It is controlled by Eiffage Group through its subsidiary Eiffarie, and to use every resource to maintain the continuity of traffic flows which is owned jointly by Eiffage Group and investment funds of under good conditions; Macquarie group. • the provisions setting the toll rates and the rules for changing The 2008 consolidated financial statements were approved by the the rates; Board of Directors on 25 February 2009 and shareholders will be • the clauses stipulating the provisions that will apply in the event invited to approve these financial statements on the occasion of of a change in the technical regulations or tax rules applicable to the General Meeting that is to be held on 23 June 2009. motorway companies; if such a change were likely to seriously compromise the financial position of the concessions, the State Significant events in 2008 and the motorway company would come to a mutual agreement The Maurice Lemaire tunnel was reopened to traffic on 1 October regarding compensation; 2008. This 11-kilometre long tunnel had been closed since April • the provisions that would guarantee the repair of the concession 2004 to allow renovation work to be carried out. works at the expiration date, particularly the establishment, seven years prior to the end of the concession, of a maintenance and A new 19.3 kilometre long section of the A41 Nord, named Liane, replacement programme for the last five years; was brought into service on 22 December 2008 by Area’s 49.9% • the conditions for returning the assets to the State at the end of owned subsidiary Adelac, which is the concession operator. the concession and the restrictions on the assets: the assets to be returned shall revert to the State without financial consideration APRR Group had entered into three hedging swaps with Lehman and they may not be sold or carry pledges or sureties; Brothers. Following the collapse of this investment bank, the three swaps were terminated, resulting in the recognition of a net receivable amounting to €28.4 million from this bank. Impairment losses totalling €25.6 million have been recognised, representing 76 90% of the net receivable. 02 Significant Accounting Policies and Methods 2.1. Basis of preparation IFRS 8, “Operating Segments”. The application of this standard is not expected to have any impact on the consolidated financial The consolidated financial statements of APRR Group for the year statements since the Group carries on just one activity exclusively ended 31 December 2008 have been prepared in accordance with in France. International Financial Reporting Standards (IFRS) as adopted by the European Union on 31 December 2008. IFRIC 12, ““Service Concession Arrangement”. This interpretation, which has been published by the International Accounting The information contained in the consolidated financial statements Standards Board (IASB), is still under review by the European Union. is presented in millions of euros unless otherwise indicated. This interpretation makes a distinction between two types of public As a rule, assets and liabilities are reported at cost in the balance service concession arrangements, each with its own accounting sheet, net of any amortisation and depreciation, subject to the method: following exceptions: 1) Arrangements under which the operator receives a right to • cash equivalents, financial investments and derivative instruments charge for use of the asset and for which it ultimately bears are measured at fair value; the operating risk. The assets concerned by these arrangements • provisions for liabilities and charges represent the discounted would be recorded as intangible assets, reflecting the right of present value of the estimated expenditure to settle the obligation; the concession operator to charge users of the public service. • certain non-current assets are measured at their realisable This approach would apply in particular to the motorway value if lower than amortised cost; infrastructure currently operated by the Group; • provisions for employee benefits provided under defined benefit plans are measured on the basis described in Note 2.11 and 2) Arrangements under which the operator has an unconditional section 10. right to receive cash regardless of the conditions of use of the asset. The corresponding asset would be recorded as a financial Changes in International Financial Reporting Standards (IFRS) up to asset under “Financial receivables” and amortised according to the balance sheet date are summarised below: the contractual financial conditions of each arrangement. a) The following new standards, interpretations and amendments took effect for annual periods beginning on or after 1 January APRR Group has not elected for the early application of this 2008: interpretation at 31 December 2008. The impact of applying this interpretation is currently being assessed. Its application by IFRIC 11, “Group and Treasury Share Transactions”: in application the Group will require modifications to accounting procedures of this interpretation, which is effective for annual periods beginning applicable to service concession agreements, notably regarding on or after 1 January 2008, the consolidated financial statements the method of accounting for provisions for replacement. reflect the effects of the rights to equity instruments of the parent company granted to employees of its subsidiary. IFRIC 13, “Customer Loyalty Programmes”, IFRIC 15, “Agreements for the Construction of Real Estate”, IFRIC 16, IFRIC 14, “The Limit on a Defined Benefit Asset, Minimum Funding “Hedges of a Net Investment in a Foreign Operation”, IFRIC 17, Requirements and their Interaction”. This interpretation had no “Distributions of Non-cash Assets to Owners”, and IFRIC 18, impact on the consolidated financial statements “Transfers of Assets from Customers”: the Group is not concerned by these interpretations, which become effective for annual b) The following standards, interpretations and amendments were periods beginning on or after 1 January 2009 or 1 January 2010. not in effect for annual periods ending on 31 December 2008 and the Group did not elect to apply these pronouncements before their effective date for the preparation of the financial statements.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
2.2. Basis and methods of consolidation motor vehicles and tooling). These assets are reported on the balance sheet at their historical cost, net of accumulated Companies are consolidated under the full consolidation method depreciation. when the Group controls directly or indirectly more than 50% of the voting rights or exercises effective control. Control exists Non-renewable assets come from initial investments. Subsequent when the Group has the power, directly or indirectly, to govern the capital expenditure is referred to as supplementary investments financial and operating policies of the enterprise so as to obtain on motorways in service. Non-renewable assets held under economic benefits from its activity. concessions are reported on the balance sheet at their historical cost, including borrowing costs and certain expenses related Companies are accounted for using the equity method when directly to construction. They are depreciated using the straight the Group exercises, directly or indirectly, significant influence over line method over the period between the date they enter service the enterprise. When the company is not controlled exclusively, and the end of the concession. the Group is presumed to exercise significant influence when it controls at least 20% of voting rights. Renewable assets used in the operations are assets with a useful life that is less than the term of the concession. They are depreciated APRR Group consists of the parent company Société des Autoroutes almost exclusively using the straight line method over their useful Paris-Rhin-Rhône (APRR), Société des Autoroutes Rhône-Alpes life, which is estimated at between 3 and 12 years. (AREA), its 99.82%-owned subsidiary which is consolidated under the full method, and Adelac, a 49.9%-owned subsidiary of AREA In addition, certain sections built by the French government, which that is consolidated under the equity method. Since 1 January are geographically integrated into the Group’s network, have been 2008, it also includes Axxès, which is 28.09% owned by APRR made available to APRR by the concession authority for the term (including 5.30% by AREA) and consolidated under the equity of the concession, at the end of which, they will be returned to the method. concession authority. These assets do not appear on the Group’s balance sheet. 2.3. Non-current assets held under concessions Capital-based grants are deducted from the cost of the non-current assets concerned. Nearly all non-current assets in the Group’s balance sheet represent assets held under service concession agreements. Costs incurred during the construction are integrated into the cost Most of these assets will be returned to the French government of civil engineering works. at no charge when the concession expires. The methods describe above comply with IFRS as applied at the The concession covers the motorways or motorway sections balance sheet date. These methods will be reviewed when IFRIC operated by the Group, as well as all land, works and facilities 12 come into effect as explained in section 2.1 b) above. needed to build, maintain and operate each motorway or motorway section, including links to existing roadways, outbuildings and 2.4. Borrowing costs ancillary facilities directly needed to serve motorists or created to improve operations. Borrowing costs that are directly attributable to the construction of a qualifying asset are capitalised as part of the cost of the asset. Non-current assets under the concessions are either In the Group’s case, qualifying assets are assets held under “non-renewable” assets during the term of the concession concessions for which the period of time to get ready for use (particularly infrastructure and civil engineering works), or exceeded 12 months. “renewable” assets, which have a useful life shorter than the concession (surface course, toll equipment, signage, remote In respect of qualifying assets: transmission and video surveillance equipment, computers, • interest is capitalised on the basis of the average monthly value of the assets or work in progress for which a payment has been 78 made during the year; • the specific effective interest rate for the loan is applied to this 2.10. Borrowings monthly average disbursement, if the qualifying asset has been financed by a specific loan, or the weighted average effective Borrowings are measured at amortised cost using the effective interest rate for other loans for qualifying assets not financed interest rate method, taking into account issue and redemption by a specific loan. premiums and issue costs. 2.5. Asset impairment 2.11. Employee benefits - Defined benefit plans Given the legal terms of the existing concession agreements and the financial provisions governing these agreements, two Employee benefits under defined benefit plans concern retirement cash-generating units (CGU) have been distinguished: one for indemnities and long service medals. The actuarial method used the two APRR concessions and the other for the AREA concession. to measure these obligations is the projected unit credit method.
2.6. Other non-current financial assets Assets earmarked to cover these obligations are measured at fair value and deducted from the actuarial obligation reported on the Other non-current financial assets comprise notably balance sheet. non-consolidated participating interests. The Group uses the corridor method for recognising actuarial When fair value can be determined reliable, these assets are gains and losses arising in respect of the provision for retirement measured at fair value, the other side of the entry being directly to indemnities. equity. Otherwise these assets are measured at cost. 2.12. Provisions 2.7. Cash and cash equivalents The non-current portion, i.e. liability in excess of one year, of the Cash equivalents are highly liquid investments that are readily provisions relating to retirement indemnities and long service convertible to a known amount of cash and that present an medals was classified under non-current provisions. insignificant risk of changes in value. In the case of debt instruments, they may not have maturities in excess of three months on the date The current portion of these provisions and the other provisions of purchase. were classified as current provisions.
Cash equivalents are monitored daily at fair value. They are reported 2.13. Leasing agreements at fair value in the balance sheet, with adjustments in value taken directly to profit or loss. When assets are made available to the Group under operating leases (equipment, offices, buildings and parking lots), lease 2.8. Inventories payments are recognised by spreading all expenses related to these leases, including set-up costs, over the term of the lease Inventories are valued applying the weighted average cost method. agreement using the straight line method. An impairment loss is recognised when net realisable value is less than the cost of acquisition. When assets built by the Group are made available under operating leases (fibre optic cables leased to telecommunication operators, 2.9. Trade and other receivables commercial facilities leased to operators at rest areas), these assets are recognised as assets in the balance sheet and are Trade and other receivables have due dates under six months. They accounted for in the same way as other items of property, plant and are measured at face value. Appropriate allowances for estimated equipment. Income guaranteed under this lease agreement is irrecoverable amounts are recognised when it is uncertain whether recognised over the term of the lease agreement using the straight these amounts can be collected. line method. Conditional rents are recognised when earned.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
At the balance sheet date, the Group was not party to a finance When a fixed-rate loan is hedged by entering into fixed-for-floating lease agreement, either as lessee or as lessor. interest swap, this is considered as a fair value hedge (FVH). Changes in the fair value of the hedged item (for the portion of the 2.14. Revenue and other income risk hedged) and in the hedging instrument (in its totality) are recognised to profit or loss. Revenue is recognised when the service has been rendered. 2.15. Government grants 2.18. Segment reporting
Government grants received to finance certain motorway sections The Group has a single activity consisting of the operation of are recognised as a deduction from the assets in question. motorway networks under concession agreements, which in the case of the two main concessions consolidated under the full 2.16. Income tax method, expire on the same date in 2032. These networks are located exclusively in France. Consequently, no information broken Deferred tax is recognised on temporary differences between down by business segment or by geographic region is provided in the carrying amounts of assets and liabilities in the financial the consolidated financial statements. statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is calculated at the rates that 2.19. Basis of presentation are expected to apply in the period when the liability is settled or the asset realised insofar as these rates are known at the balance In the balance sheet, assets and liabilities are analysed and sheet date. reported as either current or non-current items.
Deferred tax assets are recognised to the extent that it is probable In the income statement, operating expenses are analysed and that taxable profits will be available against which deductible reported according to their nature. temporary differences can be utilised.
Deferred tax assets and liabilities are offset, regardless of the period when expected to reverse, as there is a legally enforceable right to set off current tax assets against current tax liabilities given the existence of a tax group and these assets and liabilities relate to transactions entered into since the election to be assessed on a group basis. 2.17. Derivative instruments
The accounting treatment of derivative instruments depends on whether they qualify as a hedge. Changes in the fair value of a derivative financial instrument that are designated as a cash flow hedge (CFH) are recognised directly in equity for the effective portion. The amounts are reversed to profit or loss in the same period in which the hedged item affects profit or loss. 80 03 Non-Current Assets 2008 (€ million) Au début Increases Decreases At 31 January December a) Cost or valuation Non-current assets held under concessions 12,078 453 (43) 12,488 Investments in associates 162-63 Unlisted participating interests 8 48 (2) 55 Other investments - - - - Loans 3 - - 3 Sundry financial assets 22 - (20) 2 Other financial assets 33 49 (22) 60 Total 12,113 564 (65) 12,612
(€ million) Au début Increases Decreases At 31 January December b) Accumulated depreciation and impairment (1) Non-current assets held under concessions (4,698) (365) 48 (5,014) Investments in associates ---- Unlisted participating interests (2) - - (2) Other investments - - - - Loans - - - - Sundry financial assets - - - - ther financial assets (2) - - (2) Total (4,700) (365) 49 (5,016) Carrying value (a-b) 7,412 199 (16) 7,596
(1) No impairment loss recognised in 2008.
The increase in non-current assets held under concessions in 2008 was due notably to work widening motorway sections and to the work carried out at the Maurice Lemaire tunnel.
Borrowing costs amounting to €15.0 million were capitalised in 2008 (2007: €12.7 million).
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
2007 (€ million) Au début Increases Decreases At 31 January December a) Cost or valuation Non-current assets held under concessions 11,652 483 (57) 12,078 Investments in associates 1--1 Unlisted participating interests 12 2 (6) 8 Other investments - - - - Loans 3 - - 3 Sundry financial assets 18 5 - 22 Other financial assets 33 7 (6) 33 Total 11,686 490 (63) 12,113
(€ million) Au début Increases Decreases At 31 January December b) Accumulated depreciation and impairment (1) Non-current assets held under concessions (4,408) (351) 62 (4,698) PInvestments in associates ---- Unlisted participating interests - (2) - (2) Other investments - - - - Loans - - - - Sundry financial assets - - - - Other financial assets - (2) - (2) Total (4,408) (353) 62 (4,700) Carrying value (a-b) 7,277 136 (2) 7,412
(1) No impairment loss recognised in 2007.
(€ million) 31 December 2007 31 December 2006 Signed works contracts not executed 262.6 278.2
Furthermore, from 2009 to 2014, the Group is committed to undertaking work to build and widen motorways and to create new exchanges that are expected to cost €876 million. 82 04 Investments In Associates Investments in associates consist of the Group’s shareholding in • Shareholders’ equity at 31 December 2008: €121.4 million Adelac and Axxès. • Borrowings: €757.4 million • Total assets: €885.4 million AREA owns 49.9% of the capital of Adelac, which in 2005 was awarded a concession by the French State to build a 19-kilometre APRR Group owns 28.09 % of the capital of Axxès, a company that section of the A41 motorway between Villy le Pelloux-Saint Martin markets and manages electronic toll subscriptions for heavy Bellevue and Saint-Julien en Genevois. The concession service goods vehicles. agreement, with a term of 55 years, was published in the Official Gazette on 28 October 2005. The motorway section was brought Key financial data regarding this company are as follows: into service on 22 December 2008. • Revenue for the year: €673.5 million Key financial data regarding this company are as follows: • Loss for the year: €6.8 million
• Revenue for the year: €4.8 million • Shareholders’ equity at 31 December 2008: €10.1 million • Loss for the year: €0.9 million • Borrowings: €2.7 million • otal assets: €201.5 million
05 Trade and Other Receivables
(€ million) 31 December 2008 31 December 2007 Trade receivables - Tolls 39.0 64.9 Trade receivables - Other activities 47.3 47.6 Impairment losses (8.3) (8.6) Total 78.0 103.9
06 Other Current Assets
(€ million) 31 December 2008 31 December 2007 State - Value added tax 28.6 22.5 Sundry receivables 117.6 43.7 Prepayments 24.3 22.6 Sundry current assets 17.0 1.1 Total 187.4 89.9
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
07Cash and Cash Equivalents
(€ million) 31 December 2008 31 December 2007 Cash at bank and in hand 21.5 25.7 Cash equivalents 220.4 46.1 Total 241.9 71.8
08 Analysis of Financial Assets and Financial Liabilities by Maturity At 31 December 2008 Less than From 1 year After 5 years Total (€ million) 1 year to 5 years Financial assets: cash and cash equivalents Cash at bank and in hand 21.5 - - 21.5 Cash equivalents 220.4 - - 220.4 Financial assets 241.9 - - 241.9 Financial liabilities: current and non current Long-term borrowings - 3,140.0 3,472.2 6,612.2 Long-term borrowings due within 1 year 556.9 - - 556.9 Short term borrowings and other debts 179.7 - - 179.7 Financial liabilities 736.6 3,140.0 3,472.2 7,348.8
At 31 December 2007 Less than From 1 year After 5 years Total (€ million) 1 year to 5 years Financial assets: cash and cash equivalents Cash at bank and in hand 25.7 25.7 Cash equivalents 46.1 46.1 Financial assets 71.8 - - 71.8 Financial liabilities: current and non current Long-term borrowings 2,006.1 4,188.1 6,194.2 Long-term borrowings due within 1 year 538.3 538.3 Short term borrowings and other debts 188.0 188.0 Financial liabilities 726.4 2,006.1 4,188.1 6,920.6
Three new loans were arranged in 2008: • Two bank loans totalling €300 million.
• One loan with Caisse Nationale des Autoroutes (CNA) amounting At 31 December 2008, the Group had drawn down €1,295 million to €91 million; (2007: €955 million) against the €1,800 million syndicated loan. • One bond indexed on inflation amounting to €200 million; and 84 09Share Capital At 31 December 2008 Nombre d'actions € Ordinary shares issued and fully paid 113,038,156 33,911,447
The share capital consists of shares of €0.30 each. The company does not hold any of its shares in treasury. The number of shares in issue and their nominal value has not No particular right, preference or restriction is attached to the changed since 1 January 2007. shares.
10 Provisions
(en millions d’euros) At 1 Additional Provisions Provisions Other At 31 January provisions utilised reversed December 2008 in the year 2008 Provision for retirement indemnities 18.9 2.4 - - 0.3 21.6 Provision for long service medals 1.3 0.1 (0.2) (0.1) - 1.1 Non-current provisions 20.1 2.5 (0.2) (0.1) 0.3 22.7 Provision for retirement indemnities 0.3 - - - (0.3) - Provision for long service medals 0.2 - - - - 0.2 Other provisions for liabilities and charges 13.0 0.9 (3.9) (0.6) - 9.4 Current provisions 13.5 0.9 (3.9) (0.6) (0.3) 9.6
A provision amounting to €4.8 million has been set aside in res- restated at its present value applying the same hypotheses as for pect of the commitments given by the Group in connection with retirement indemnities and based on the assumption one in two eli- the early retirement agreement signed in 2007. Payments that are gible employees would ask to leave on early retirement. to be made are accounted for as termination benefits. The provision covers the bonus paid to the employee on agreeing The provision was calculated on an actuarial basis for the population to take early retirement as well as the part of the replacement concerned. The average retirement was estimated at 60 years (given indemnity to be paid until the employee leaves on retirement that the particular characteristics of the population). The provision was is borne by the employer.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
11Employee Benefits Provided Under Defined Benefit Plans These benefits consist of retirement indemnities and long service medals. Assumptions
(€ million) Retirement indemnities Long service medals 2008 2007 2008 2007 Discount rate 6.25% 5.25% 6.25% 5.25% Expected rate of inflation 2.00% 2.00% 2.00% 2.00% Expected rate of salary increases 3.00% 3.00% 3.00% 3.00% Mortality tables for men TH 03-05 TH 03-05 TH 03-05 TH 03-05 Mortality tables for women TF 03-05 TF 03-05 TF 03-05 TF 03-05 Retirement age for managers 63 years 63 years 63 years 63 years Retirement age for non-managers 63 years 63 years 63 years 63 years Social security charges 45.00% 45.00% 0.00% 0.00%
The expected return on plan assets was 6.25% in 2008 (2007: 5.25%). The actual return on plan assets was 4.10% in 2008 (2007: 4.70%).
Changes during the year
(€ million) Retirement indemnities Long service medals 2008 2007 2008 2007 Actuarial obligation at 1 January 21.7 22.7 1.5 1.6 Cost of past services 1.5 1.7 0.1 0.2 Interest on actuarial obligation 1.1 0.9 0.1 0.1 Benefits paid (1.4) (1.0) (0.2) (0.2) Actuarial losses (gains) generated (3.6) (2.6) (0.2) (0.2) Actuarial obligation at 31 December 19.4 21.7 1.3 1.5
Charge for the year
(€ million) Retirement indemnities Long service medals 2008 2007 2008 2007 Cost of past services 1.5 1.7 0.1 0.2 Interest on actuarial obligation 1.1 0.9 0.1 0.1 Expected return on plan assets (0.2) (0.2) - - Actuarial losses (gains) not recognised - - (0.2) (0.2) Charge (income) recognised 2.4 2.4 - -
The corresponding charge is included under employee benefit expenses in the income statement. 86 Plan assets
(€ million) Retirement indemnities Long service medals 2008 2007 2008 2007 Plan assets at 1 January 4.1 5.1 - - Expected return on plan assets 0.2 0.2 - - Actuarial losses (gains) 0.3 (0.2) - - Benefits paid (1.4) (1.0) - - Plan assets at 31 December 3.3 4.1 - -
(€ million) 2008 2007 2008 2007 Actuarial obligation in respect of retirement indemnities 19.4 21.7 22.7 21.8 Fair value of plan assets 3.3 4.1 5.1 6.5 Difference 16.1 17.6 17.6 15.4
Deferred items
(€ million) Retirement indemnities Long service medals 2008 2007 2008 2007 At 1 January (1.6) 0.8 - - Losses (gains) on assets (0.3) 0.2 - - Losses (gains) on actuarial obligation (3.6) (2.6) - - Actuarial losses (gains) at 31 December (5.5) (1.6) - -
Reconciliation of provision recognised in the balance sheet to the actuarial obligation
(€ million) Retirement indemnities Long service medals 2008 2007 2008 2007 Provision recognised in the balance sheet 21.6 19.2 1.3 1.5 Actuarial differences (5.5) (1.6) - - Plan assets 3.3 4.1 - - Actuarial obligation 19.4 21.7 1.3 1.5
Benefits in respect of retirement indemnities and long service medals totalling €0.6 million are expected to be paid in 20091.
1 NdT : le document source indique 2008.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
12 Financial Instruments and Derivative Instruments Currency risk At 31 December 2008, an amount of €1,295 million had been drawn down against this facility. The Group operates principally in the countries of the euro zone, essentially in France. It is therefore exposed to a limited currency In 2008, the Group arranged two variable rate bank loans, one in risk on the transactions to which it is party. an amount of €250 million for six years and the other in an amount of €50 million for four years, and a 7-year index-linked All of the Group’s borrowings are denominated in euro. bond of €200 million.
Liquidity risk The Group has also set up a Euro Medium Term Note (EMTN) programme amounting to €6,000 million. The prospectus was This liquidity risk is mitigated by the recurring nature of the cash filed with the Luxembourg Stock Exchange on 3 October 2007. flow and debt repayments. For the purpose of managing its cash position and hedging The Group has given undertakings to Caisse Nationale des transactions, the Group entertains relations only with financial Autoroutes (CNA) and the members of the banking pool to comply institutions enjoying an outstanding reputation. with the following ratios: • Net debt will be less than 7 times EBITDA Interest rate risk • EBITDA will be more than 2.2 times net financial charges Essentially all of the Group’s borrowings bear fixed interest rates. These two ratios were 5.7 times and 3.2 times, respectively, at 31 December 2008. Based on borrowing at the year-end, the Group does not have significant exposure in terms of interest expenses to a rise in To finance its day-to-day operations, the Group has negotiated a interest rates. €1,800 million syndicated loan bearing a variable interest rate.
(€ million) 31 December 2008 31 December 2007 Carrying value Fair value Carrying value Fair value Assets Cash and cash equivalents 241.9 241.9 71.8 71.8 Loans 2.6 2.6 2.6 2.6 Interest rate swaps 2.6 2.6 21.9 21.9 Other financial assets 53.0 53.0 6.3 6.3 Trade and other receivables 78.0 78.0 103.9 103.9 Other current assets 187.5 187.5 89.9 89.9 other non-current assets 0.1 0.1 0.2 0.2 Liabilities Variable-rate borrowings 2,006.1 2,095.4 1,947.0 1,988.3 Fixed rate borrowings 763.7 924.2 256.7 306.5 Interest rate swaps 4,321.8 4,759.2 4,467.3 4,829.2 Other financial liabilities 58.6 58.6 43.5 43.5 Trade and other payables 200.5 200.5 178.0 178.0 Other non-current liabilities 38.6 38.6 43.2 43.2 Other liabilities 168.0 168.0 141.3 141.3 88 Fair value of the derivative instruments was determined • A remaining group of seven derivative contracts (including three by reference to the mark-to-market value communicated swaps receiving fixed rates and paying variable rates, qualifying by the various counterparties. as fair value hedges, and four options contracts aiming to limit exposure to an interest rate increase, which were treated as In March 2008, the Group entered into five new interest rate swap autonomous instruments) entered into in the second half of agreements for a total nominal amount of €500 million matched 2005 as part of a variable rate programme scaled backed to to the bank loan for the same amount taken out in August 2007, as €350 million at 31 December 2008, matched to the following loans: a result of which the interest rate for this loan is now fixed until its repayment on 29 August 2014, with the Group receiving variable - €208.4 million against the CNA 4.50% line maturing 28 March interest on the loan and paying fixed interest. 2018; - €50.0 million against the CNA 5.25% line maturing 30 January In 2008, two interest rate swaps entered into in 2005 for a total 2017; and nominal amount of €100 million backed to the CNA 5.25% loan - €91.6 million against the CNA 4.50% line maturing 25 April 2010. maturing 30 January 2017 were terminated. These swaps were entered into in 2005 as part of a variable rate programme covering • Five swaps entered into in March 2008, under which the company loans totalling €450 million. pays a fixed rate on a nominal of €500 million and receives a variable rate, the maturity (August 2014) and interest periods matching Lastly, in 2008 the Group terminated three swaps entered into in those of the €500 million bank loan arranged in August 2007. 2005 with Lehman Brothers International Europe Ltd following the collapse of the investment bank: A sensitivity analysis was performed on the basis of the borrowings at 31 December 2008. • Two swaps for nominal toll revenues of €90 million maturing in 2018 and €60 million maturing in 2012, under which the Group This determined that a change of 100 basis points in the variable swaps cash flows calculated by reference to the toll indexation rates would have an impact of €20.2 million on finance costs and formula defined in the terms of the concession, applied to a fixed of €13.3 million on net profit for the year. inflation rate of near to 2% in the case of inflows, and to the actual inflation rate in the case of annual outflows. Inflation risk
• The third swap, which concerned a loan in a nominal amount of Toll fares are reviewed annually on the basis of formula whereby €300 million maturing in 2018, under which APRR paid a fixed rate the adjustment is indexed to the rate of inflation. and received a fixed rate on a nominal indexed to inflation. This swap was entered into to neutralise the effects of another mirror As a hedge against the risk of weak inflation, the Group entered swap entered into in 2004 under which it received a fixed rate and into two swaps in 2005 for total nominal revenues of €150 million paid a fixed rate on a nominal indexed to inflation under which it swapped cash flows calculated by reference to the toll indexation formula defined in the terms of the concession, The termination of these swaps gave rise to the recognition of a net applied to a fixed inflation rate of near to 2% in the case of inflows, receivable of €28.4 million from Lehman Brothers International and to the actual inflation rate in the case of annual outflows. Europe Ltd. An impairment loss amounting to €25.6m (90% of the amount receivable) has been recognised and reported together The termination of these swaps in September 2008 was offset by with the other effects of Lehman Brothers’ collapse under Other an increase in the portion of the debt bearing directly or indirectly financial income (expenses). (via swaps) a fixed rate on a nominal indexed to inflation. In this way, the Group’s exposure to weaker inflation is hedged partially. At 31 December 2008, the Group was party to several derivative While weaker inflation would lead to slighter increases in toll agreements: tariffs, finance costs would also decline on the portion of the debt indexed to inflation, thereby cushioning the overall negative impact • One swap, entered into 2004, under which the company receives of weaker inflation on the Group’s earnings. a fixed rate on a nominal of €300 million and pays a fixed rate on this nominal indexed to inflation as well as capitalised inflation at maturity.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
Additional information on derivative The other derivative financial instruments were not designated financial instruments as hedging instruments and accordingly are accounted for by applying general accepted accounting principles for derivative The five swaps entered into in March 2008, to pay fixed rates and instruments. The change in the fair value of these instruments receive variable rates, were designated respectively as cash flow is recognised directly to profit or loss. In 2008, this resulted in hedges (CHF) and fair value hedges (FVH). In 2008, changes in the recognition of a €32.6 million loss (2007: €1.9 million loss). the fair value of these swaps, which are taken directly to equity, amounted to a debit of €19.4 million before taking deferred tax into account. As it was determined that these cash flow hedges were totally effective, no entries were recorded in respect of hedge ineffectiveness.
Changes in the fair value of the three fixed-for-floating interest swaps are recognised directly to the income statement. The interest rate risk covered by these fair value hedges was determined to have produced a €21.7 million gain (2007: €5.5 million loss) before taking deferred tax into account. As it was determined that these fair value hedges were totally effective, no entries were recorded in respect of hedge ineffectiveness.
Credit risk
(€ million) 2008 2007 Past dues: up to 3 months 3.3 1.7 Past dues: between 3 and 6 months 0.8 1.1 Past dues: over 6 months 10.2 11.1 Total past dues 14.3 13.8
The provisioning rate in respect of past dues is around 64%. Risk management
Past dues in excess of 6 months include an amount of €7.8 million Risk management is aimed at identifying, assessing, processing receivable from France Télécom that is the object of a dispute and and monitoring the risks to which the Group is exposed. These has been provisioned in full. risks are of diverse nature: operational, financial, strategic, human, regulatory and reputational. Apart from the above amount, past dues concern a very large number of customers given the activities carried on by the Group. Risk management is based on a structured process that is It is therefore impossible to assess the overall financial solidity of documented and on the risk management policy as defined these customers. by top management.
The mapping of the risks to which the Group is exposed was updated in 2008. 90 13 Other Current And Non-Current Liabilities
(€ million) 31 December 2008 31 December 2007 Payments on account 2.5 2.2 Tax and social security 140.9 117.4 Deferred income 8.9 8.4 Other debts 15.7 13.4 Other current liabilities 168.0 141.3 Deferred income 38.6 43.2 Other non-current liabilities 38.6 43.212
14 Revenue
Year ended 31 December (€ million) 2008 2007 Toll revenue 1.783.3 1,752.6 Rental income from commercial facilities 29.8 31.6 Revenue from leasing telecommunication installations 12.4 11.2 Other 9.2 7.1 Total 1,833.7 1,802.6
Rental income from commercial facilities is collected from third Revenue from leasing telecommunication installations parties that operate the commercial establishments located at the corresponds essentially to leases entered into with telecommunication rest areas. operators for the use of fibre optic cables and towers.
15 Purchases And External Charges
Year ended 31 December (€ million) 2008 2007 Energy12.7 11.0 Supplies 9.3 9.3 Spare parts 5.3 6.0 Infrastructure maintenance 33.2 49.1 Routine maintenance 17.9 17.2 Other external charges 71.9 69.7 Total 150.3 162.33
1 NDT : En anglais, les parenthèses ne sont pas indispensables
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
16 Employee Benefit Expenses and Headcount
Year ended 31 December (€ million) 2008 2007 Wages and salaries 114.4 113.4 Social security contributions and deferred benefits 67.7 69.8 Discretionary employee profit sharing and employer’s contribution to savings plan 15.4 12.4 Mandatory employee profit sharing 12.1 13.3 Total (209,6) (208,9)4
Headcount Year ended 31 December Année 2008 Année 2007 Management grade 514 526 Supervisor grade 1,752 1,727 Workers and office staff 1,673 1,784 Total 3,939 4,036
17 Taxes (Other Than Income Tax)
Year ended 31 December (€ million) 2008 2007 Regional development tax 133.0 134.7 Local business tax 47.8 45.3 Fee for the use of public property 44.3 42.9 Other taxes and duties 5.7 5.9 Total 230.7 228.85
18 Depreciation and Amortisation Expense and Provisions
Year ended 31 December (€ million) 2008 2007 Depreciation and amortisation 358.4 345.5 Other provisions (1.1) (3.3) Total 357.3 342.26 92 19 Other Operating Income and Expenses
Year ended 31 December (€ million) 2008 2007 Impairment losses recognised in respect of current assets (0.3) 0.5 Gains on disposals 1.1 2.0 Other 0.7 1.3 Other operating income (expenses) from ordinary activities 1.6 3.9 Other operating income (expenses) from operations (0.9) 1.6
20 Income From Cash and Cash Equivalents
Year ended 31 December (€ million) 2008 2007 Net proceeds from the disposal of marketable securities 4.1 7.0 Income from debt-related derivative instruments 0.1 0.1 Other financial income 4.9 2.4 Total 9.1 9.5
21Finance Costs
Year ended 31 December (€ million) 2008 2007 Interest and other financial charges 379.3 362.9 Charges on debt-related financial instruments 6.3 2.6 Financial charges transferred (15.0) (12.7) Finance costs 370.6 352.7 Other financial charges 16.7 1.7
Fees in respect of unutilised credit lines came to €0.7 million in Other financial charges in 2008 record the impact of the collapse 2008 (2007: €1.1 million). of Lehman Brother mentioned in Note 12.
22 Income Tax Expense Tax charge for the year
Year ended 31 December (€ million) 2008 2007 Current tax 117.2 180.9 Deferred tax 58.7 (0.7) Total 175.8 180.2
The deferred tax credit recorded in 2008 includes €50.2 million lin- ked to the reversal of the provision for replacement recorded in the company financial statements.
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation of theoretical tax charge to effective tax charge
Year ended 31 December (€ million) 2008 2007 Net profit for the year 332.9 340.9 Income tax expense 175.8 180.2 Share of profit of associates (0.4) - Profit before tax 508.3 521.1 Applicable tax rate 34.43% 34.43% Tax on the profit before tax determined above 175.0 179.4 Permanent differences 0.9 0.7 Other differences - 0.1 Income tax expense recognised 175.9 180.2
Analysis of deferred tax assets and liabilities
(€ million) 2008 2007 Assets resulting from Provisions for retirement indemnities 9.1 8.3 Provisions for holiday pay 5.2 5.5 Employee profit sharing 4.0 4.6 Swap reversals 6.8 8.6 Other 6.6 2.0 Deferred tax assets 31.6 29.0 Deferred tax liabilities arising from Charges capitalised, net of depreciation (187.5) (188.1) Depreciation of renewable fixed assets (41.4) (41.4) Other (63.7) (11.5) Deferred tax liabilities (292.7) (240.9)9
Net deferred tax liabilities 261.0 (212.0)
23 Earnings Per Share The average number of shares was calculated taking into account Earnings per share are calculated by dividing profit or loss attributable the number of days elapsed since the dates of the last transactions to ordinary equity holders of the parent entity by the weighted having affected the capital. average number of ordinary shares outstanding during the year.
Year ended 31 December (€ million) 2008 2007 Net profit for the year attributable to ordinary equity holders of the parent entity 332.9 340.9 Weighted average number of ordinary shares outstanding during the year 113,038,156 113,038,156 Basic earnings per share 2.94 3.02 Net profit for the year attributable to ordinary equity holders of the parent entity 332.9 340.9 Weighted average number of ordinary shares outstanding during the year 113,038,156 113,038,156 Diluted earnings per share 2.94 3.02
There are no potentially dilutive instruments in issue. 94 24 Dividend During the year, the company distributed a dividend of €1.91 In December 2008, an interim dividend of €0.85 per share was per share in respect of 2007. distributed in respect of 2008.
25 Commitments Commitments given
(€ million) 31 December 2008 31 December 2007 Sundry guarantees 24.0 133.7 AREA tax reintegration 3.3 4.9 Work to be performed (1% landscape) 0.1 0.2 Total (175,8) 27.4 138.8
Sundry guarantees relate to commitments given by AREA in respect of its participating interest in Adelac.
Commitments received
(€ million) 31 December 2008 31 December 2007 Bank guarantees 58.2 86.1 Other -- Total 58.2 86.1
Amounts payable under operating leases
(€ million) 31 December 2008 31 December 2007 Within 1 year 0.3 0.5 Between 1 and 5 years 0.4 0.2 After 5 years -- Total 0.6 0.7
Amounts receivable under operating leases
(€ million) 31 December 2008 31 December 2007 Within 1 year 30.6 31.6 Between 1 and 5 years 74.9 104.5 After 5 years 36.9 69.0 Total 142.4 205.1
2008 APRR ANNUAL REPORT CONSOLIDATED FINANCIAL STATEMENTS
26 Related Party Transactions Related parties include: (I) entities over which the Group exercises Group and the companies over which they exercise exclusive exclusive control, joint control or significant influence (i.e. joint control, joint control or significant influence or in which they ventures and associates); (II) shareholders exercising joint hold significant voting rights. control over group joint ventures; (III) minority shareholders exercising significant influence over the group subsidiaries; Material transactions with related parties are summarised in and finally (IV) the directors, officers and managers of the the table below:
Company Nature Type Amount Payable (€ million) (Receivable) Eiffage Group Sundry services Income 1.0 (0.4) Work Charges 6.0 3.4 Work Investments 45.8 12.6 Eiffarie Staff made available Charges 0.8 - Axxès Heavy goods vehicles remote toll collection Charges 2.6 (34.9) Cash advance Receivable 0.1 - Sira Radio services (Autoroute Info) Charges 1.7 0.2 Sundry services Income 0.3 (0.30) Park + Cash advance Income 0.2 (2.8) Sundry services Income 0.1 - Adelac Sundry services Income 0.1 (0.5) Work Investments 1.1 - Staff made available Income 0.3 -
Work carried out by Eiffage group is negotiated on an arm’s length basis and after inviting tenders from other construction and civil engineering groups.
27 Management Indicators (€ million) 2008 2007 Operating cash flow 689 688 EBITDA 1,244 1,208 EBITDA margin 67.8% 67.0%
Earnings before interest, tax, depreciation and amortisation correspond to operating profit before amortisation, depreciation and provisions. 96 28 Events After the Balance Sheet Date No significant event has occurred since 31 December 2008.
29 Fees Paid to the Statutory Auditors
PriceWaterhouseCoopers Audit KPMG (formerly Salustro - Reydel)
Amount (excluding VAT) % Amount (excluding VAT) %
2008 2007 2008 2007 2008 2007 2008 2007
Audit
Statutory audit, certification, review of company and consolidated financial statements
- Issuer 132,480 127,875 88 88 132,480 127,875 59 61
- Fully consolidated subsidiaries - - - - 63,590 61,380 29 29
Other reviews and services directly linked to the statutory audit assignment
- Issuer 18,500 17,000 12 12 23,500 17 000 11 8
- Fully consolidated subsidiaries - - - - 2,500 2,500 1 1
Subtotal 150,980 144,875 100 100 222,070 208,755 100 100
Other services provided by the networks to fully consolidated subsidiaries
- Legal, tax and employment matters ------
- Other ------
Subtotal ------
Total 150,980 144,875 - - 222,070 208,755 - -
2008 APRR ANNUAL REPORT STATUTORY AUDITORS’ REPORT on the consolidated financial statements (for the year ended 31 december 2008)
PricewaterhouseCoopersAudit To the Shareholders, 63, rue de Villiers 92208 Neuilly-sur-Seine cedex In fulfillment of the assignment entrusted to us by your General Meeting of Shareholders, we present to you our report Salustro Reydel for the year ended 31 December 2008 on: Member of KPMG International 1, cours Valmy • the audit of the consolidated financial statements of APRR 92923 Paris La Défense cedex SA, as attached to this report;
To the Shareholders • the justification of our assessments; and Société des Autoroutes Paris Rhin Rhône 36, rue du Docteur Schmitt • the specific verification required by law. 21850 Saint Apollinaire France The consolidated financial statements have been prepared under the responsibility of the Board of Directors. It is our responsibility, based on our audit, to express an opinion on these financial statements.
Opinion on the consolidated financial01 statements
We conducted our audit in accordance with auditing standards applied in France. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, the evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, and in light of International Financial Reporting Standards (IFRS) as adopted by the European Union, the consolidated financial statements give a true and fair view of the Group’s assets and liabilities and financial position at 31 December 2008, and of the results of operations of the companies and legal entities included in the consolidation for the year then ended. 98 02 Justification of our assessments 03 Specific verification Pursuant to the provisions of Article L823.9 of the French We have also carried out the specific verification required by Commercial Code (Code de Commerce) relating to the law on the information on the Group contained in the justification of our assessments, we bring to your attention Management Report. the following matters: We have no comment to make as to the fair presentation of this information and its conformity with the consolidated • Notes 2.1 and 2.3 to the consolidated financial statements financial statements. describe the accounting treatment applied by the Group to its activities as concession operator. We verified that the accounting Neuilly-sur-Seine and Paris La Défense, 28 April 2009 treatment applied by the Group did not contravene the fundamental concepts defined in the International Financial Reporting Standards and that the information provided in the notes was appropriate. • Notes 2.17 and 12 to the consolidated financial statements describe the accounting methods used to recognise and measure derivative instruments. We assessed the data, assumptions and parameters upon which theses estimates are based and reviewed the calculations.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to determining the unqualified opinion expressed in the first part of this report.
The Statutory Auditors
PricewaterhouseCoopersAudit KMPG Audit Department of KPMG SA
Louis-Pierre Schneider Thierry Charron Benoît Lebrun
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
100 Financial statements 102 4. Information on the income statement 113 4.1 Revenue 113 1. Balance sheet 102 4.2 Purchases and external charges 114 4.3 Employee benefit expenses and headcount 114 2. Income statement 103 4.4 Other operating income and expenses 114 4.5 Taxes (other than income tax) 114 Notes to the financial statements 104 4.6 Depreciation, amortisation and provisions 115 4.7 Financial income and expenses 115 1. Significant envents in 2008 104 4.8 Exceptional items 115 4.9 Income tax expense 115 2.Accounting policies and methods 104 2.1. Intangible assets 104 5. Additional information 116 2.2. Property, plant and equipment 104 5.1. Tax group and parent company 116 2.3. Capital grants 105 5.2. Accounting and financial indicators 116 2.4. Non-current financial assets 105 5.3. Compensation paid to members of 2.5. Inventories 106 the management bodies 116 2.6. Receivables 106 5.4. Litigation 116 2.7. Marketable securities 106 5.5. Information concerning 2.8. Other equity 106 the Maurice Lemaire tunnel concession 116 2.9. Conversion of foreign currency 5.6. Commitments 117 receivables and payables 106 2.10. Loan issue costs and loan issue or 6. List of subsidiaries and participating interests 117 redemption premiums 106 2.11. Indexed loans and advances 106 2.12. Obligations in respect of retirement indemnities and other employee benefits 106 2.13. Infrastructure maintenance 106 2.14. Financial risks 106 2.15. Reporting currency 107
3. Information on the balance sheet 107 3.1 Intangible assets 107 3.2 Property, plant and equipment 107 3.3 Non-current financial assets 108 3.4 Trade receivables 108 3.5 Other receivables, prepayments and accrued income 108 3.6 Marketable securities, cash at bank and in hand 109 3.7 Capital and reserves 109 3.8 Other equity 110 3.9 Provisions for liabilities and charges 110 3.10 Borrowings and other financial liabilities 111 3.11 Other payables, accruals and deferred income 113
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
Financial statements
01Balance sheet Assets
31 December (€ million) Note 2008 2007 Intangible assets 3.1 22.7 24.5 Property, plant and equipment - Assets held under concessions 3.2 10,301.0 9,910.8 - Depreciation 3.2 (4,044.9) (3,806.8) Non-current financial assets 3.3 854.0 668.5 Total non-current assets 7,132.8 6,797.0 Inventories 7.0 6.9 Trade receivables 3.4 68.9 89.3 Other receivables, prepayments and accrued income 3.5 278.0 148.0 Marketable securities, cash at bank and in hand 3.6 236.5 66.2 Total current assets 590.4 310.4
Total assets 7,723.2 7,107.3
Equity and liabilities
31 December (€ million) Note 2008 2007 Share capital 33.9 33.9 Share premium and reserves 3.7 3.7 Retained earnings -- Interim dividend (95.1) (116.4) Profit for the year 237.1 333.3 Capital grants 149.4 112.2 Regulated provisions 28.9 19.1 Total equity 3.7 357.9 385.8 Other equity 3.8 164.7 164.7 Provisions for liabilities and charges 3.9 234.6 65.9 Borrowings and other financial liabilities 3.10 6,594.4 6,104.6 Trade payables 48.2 48.3 Other payables, accruals and deferred income 3.11 323.3 338.0 Total liabilities 6,965.9 6,490.9
Total equity and liabilities 7,723.2 7,107.3 102 02 Income statement
(€ million) Note 2008 2007 Revenue 4.1 1,395.5 1,370.9 Operating expenses (781.8) (741.0) Purchases and external charges 4.2 (170.9) (179.7) Employee benefit expenses 4.3 (152.8) (153.4) Other operating income (expenses) 4.4 20.4 21.1 Taxes (other than income tax) 4.5 (150.7) (149.8) Depreciation, amortisation and provisions 4.6 (327.8) (279.2) Operating profit 613.7 629.9 Financial income (expenses) 4.7 (209.8) (172.3) Profit on ordinary activities 403.9 457.6 Exceptional items 4.8 (97.2) 6.0 Employee profit sharing (7.4) (8.7) Income tax expense 4.9 (63.3) (121.5) Profit for the year 237.1 333.3
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
Notes to the financial statements
These notes form an integral part of the annual financial Company’s assets and financial situation at 31 December 2008 statements. and its results for the year then ended.
These notes contain complementary information to the Information that is not subject to disclosure requirements is balance sheet and income statement in order for the annual provided only when material. financial statements to provide a true and fair view of the .
01Significant events in 2008 The Maurice Lemaire tunnel was reopened to traffic on 1 October Under the terms of the concession agreements, the Company 2008. This 11-kilometre long tunnel had been closed since has the obligation to replace the assets recorded on its balance April 2004 to allow renovation work to be carried out. sheet. The Company decided to avail itself of the possibility offered by Article 393-1 of the French Accounting Standards It is planned to extend the concession for this tunnel by 20 years, (Plan Comptable Général) to set aside a provision for replacement, meaning that it would end in 2042 instead of 2022. The decree acting in compliance with Article 5 of the 1998 Finance Act, as extending the concession term has not yet been published, but codified by Article 39-1-5° of the General Tax Code (Code Général the 2008 financial statements take into account the extension des Impôts). of the concession. The accounting change having been decided purely for taxation APRR had entered into two hedging swaps with Lehman Brothers. purposes, the initial recognition of the provision was done in Following the collapse of this investment bank, the two swaps accordance Article 314-2 II of the French Accounting Standards, were terminated, resulting in the recognition of a net receivable which require that the impact of changes in tax treatments relating amounting to €27.6 million from this bank. Impairment losses to the period be recognised in the income statement of that period. totalling €24.9 million have been recognised, representing 90% of the net receivable Accordingly, the provision is reported under provisions for liabilities and charges. In the income statement, the charge is reported as an exceptional item for that part of the provision relating to prior periods, and as an operating item for that part relating to 2008 alone. 02 Accounting policies and methods The company financial statements of APRR for the year ended 31 2.2. Property, plant and equipment December 2008 have been prepared in accordance with the French general chart of accounts pursuant to the Decree of 22 June 1999. Nearly all tangible fixed assets reported on the Company’s balance Accounting policies are identical to those used for the preparation sheet consist in assets held under a service agreement concession. of the financial statements for the year ended 31 December 2007. Most of these assets will be returned to the French State for free when the concession expires. Accounting rules for the recognition 2.1. Intangible assets of these assets and their depreciation are summarised below:
Intangible assets comprise mainly software applications that are • Tangible assets held under a service concession agreement amortised over periods of between three to five years. The concession covers motorways and sections of motorways made available by the French State along with all the land, works 104 and facilities needed to build, maintain and operate each of these motorways or sections of motorways, including slip roads, Surface courses do not give rise to financial depreciation and are outbuildings and ancillary facilities needed to serve motorists or depreciated over a period of twelve years. created to improve operations. Ordinary depreciation and financial depreciation are aggregated and presented on the same lines of the income statement and Tangible assets held under concessions comprise assets that balance sheet. In the income statement, they constitute operating will not be renewed during the term of the concession (notably expenses. In the balance sheet, they are deducted from the assets infrastructures and civil engineering works) and assets that have to which they relate. a useful life that is shorter than the term of the concession (surface course, toll equipment, signage, remote transmission Fixed assets made available under the concession are reported as and video surveillance equipment, motor vehicles and tooling). assets under “Property, plant and equipment” and as liabilities under “Other equity” for the value of the said contributions on the Non-renewable assets come from initial investments. Subsequent date of transfer. These contributions will be returned to the French capital expenditure is referred to as “supplementary investments State at the end of the concession and are not depreciated. on motorways in service”. • Provision for replacement Tangible assets held under concessions are recognised at cost, In accordance with the option offered by Article 393-1 of the French including borrowing costs and certain directly attributable expenses. General Accounting Standards (Plan Comptable Général – PCG), the Company elected to set aside a provision for the replacement • Depreciation of tangible assets held under a service concession of renewable assets for an amount equal to the difference between agreement the estimate cost of replacement of each asset and the cost of Non-renewable tangible assets are depreciated using the straight- acquisition or production of the assets. Amounts are transferred line method from the date on which brought into service until the to this provision each year on the basis the revised estimated date on which the concession expires. This financial depreciation, replacement cost of the assets concerned, so as to match this cost which is classified as an operating expense, is not intended to reflect on the date the assets are replaced. The provision has given rise to the pattern in which the asset's economic benefits are consumed an asset replacement programme based on the resources available, by the enterprise. Rather, the intention is to write-down the assets’ which set the dates and cost of replacing each asset, which may depreciable amount to zero by the time the concession expires. be revised subsequently if circumstances so require.
Renewable tangible assets used in the operations are assets that 2.3. Capital grants have a useful life that is shorter than the term of the concession. As a rule, these assets are depreciated using the straight-line Capital grants, received to help finance construction projects, method over their estimated useful life, normally between three are recognised directly to equity. Grants are reversed to income and ten years. statement over the term of the concession to match the financial depreciation recognised in respect of the assets they financed. Renewable tangible assets used in the operations are also the object of a financial depreciation, the purpose of which is to spread 2.4. Non-current financial assets over the remaining term of the concession the loss that would be incurred were these assets handed over to the State free of charge Participating interests held in subsidiaries are recorded at cost. at the end of the concession, being the residual value at the end of An impairment loss is recognised if the carrying value, determined the concession determined applying normal depreciation rules. mainly by reference to the subsidiary’s net assets, is less than cost.
For renewable tangible assets used in the operations, the financial 2.5. Inventories depreciation is calculated by reference to the assets’ net book value, being the cost of acquisition of the assets less ordinary accumulated Inventories are valued applying the weighted average cost method. depreciation at the close of the financial year and less accumulated An impairment loss is recognised when net realisable value is less financial depreciation at the beginning of the financial year. than the cost of acquisition.
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
2.6. Receivables The above method is tantamount to amortising premiums by reference to accrued interest to the extent that loans give rise to Receivables are measured at face value. Appropriate allowances a one-time payment at term. for estimated irrecoverable amounts are recognised when it is uncertain whether these amounts can be collected. 2.11.Indexed loans and advances
2.7. Marketable securities Advances from the French State and indexed loans are adjusted each year to reflect the application of the indexation procedure, the Marketable securities are measured at the lower of cost and net offsetting entry being to “Indexation difference” on the asset or realisable value. Unrealised gains are not recognised. liability side of the balance sheet as appropriate. Provisions for liabilities and charges are recognised in respect of unrealised 2.8. Other equity losses, which correspond to indexation differences to the debit f the balance sheet. Certain contributions in kind made under the service concession agreement are reported as assets under “Property, plant and 2.12.Obligations in respect of retirement equipment” and as liabilities under “Other equity” for the value of indemnities and other employee benefits the said contributions on the date of transfer. Amounts credited to other equity will be derecognised on the date the assets in question The actuarial method used to calculate the Company’s obligations are returned to the French State. in respect of retirement indemnities, as reported on the balance sheet, is the projected unit credit method based on final salaries. 2.9. Conversion of foreign currency This is the method advocated by International Accounting receivables and payables Standard 19, Employee Benefits, and it meets the requirement set forth in Recommendation no. 2003-R.01 issued by the French Receivables and payables denominated in foreign currencies are National Accounting Board (Conseil National de la Comptabilité). converted into the Company’s functional currency using the most recent exchange rate. Resulting differences are recorded under This method consists in measuring the Company’s obligations by “Conversion differences” on the asset or liability side of the balance reference to the projected salary at the end of the employee’s sheet as appropriate. Provisions for liabilities and charges are career and to vested rights on the measurement date, determined recognised in respect of unrealised losses, which correspond to applying the terms of the collective bargaining agreement, the conversion differences to the debit of the balance sheet. company agreement or rights under law at the balance sheet date. 2.10.Loan issue costs and loan issue 2.13.Infrastructure maintenance or redemption premiums Expenditure on infrastructure maintenance is recognised as an Premiums on the issue and redemption of the loans arranged with operating expense as and when committed. Caisse Nationale des Autoroutes (CNA) and issue costs for these In 2005, the Company decided to apply the component method of loans are recognised as deferred charges and amortised using the accounting to expenditure on surface courses. Note that straight-line method over the term of the loans to which they Regulation 2002-10 issued by the French National Accounting relate. Board (Conseil National de la Comptabilité) does not require public If loan repayments will be less than the initial amount of the loan, service concession operators to apply this method. the difference is recognised initially as deferred income and reversed to the income statement over the term of the loan using the 2.14.Financial risks straight-line method. The Company operates principally in the countries of the euro zone, essentially in France. It is therefore exposed to a limited currency risk on the transactions to which it is party. All of the Company’s borrowings are denominated in euro. Two thirds of these borrowings are at fixed rates. The Company does not therefore have significant exposure to an increase in interest 106 expenses linked to a rise in interest rates. 2.15.Reporting currency
The tables overleaf are stated in millions of euros unless otherwise indicated..
03 Information on the balance sheet
3.1. Intangible assets
Valeurs brutes 31 December (€ million) 2007 Increase Charge Decrease Assets brought 2008 for the year Reversals into service Intangible assets 87.6 3.7 (1.4) 1.9 91.8 Intangible assets work in progress 3.6 3.1 - (1.7) 5.0 Amortisation (66.7) (8.8) 1.4 - (74.1) Carrying value 24.5 (2.0) - 0.2 22.7
3.2. Property, plant and equipment
Assets held under concessions The network covered a total of around 1,855 kilometres at 31 December 2008, 1,810 kilometres of which were in service.
Valeurs brutes 31 December (€ million) 2008 2007 Non-current construction assets 9,230.1 8,671.4 Non-current assets used in the operations 768.7 747. Non-current assets under construction 302.2 491.8 Total cost 10,301.0 9,910.8
Valeurs brutes 31 December (€ million) 2007 Increase Decrease Brought 2008 into service Non-current construction assets 8,671.4 - (1.4) 560.1 9,230.1 Road surface courses 292.3 17.4 (22.4) 4.4 291.7 Non-current assets used in the operations 455.2 23.7 (21.8) 20.0 477.0 Non-current assets under construction 491.9 394.9 - (584.60) 302.2 Total cost 9,910.8 436.0 (45.6) (0.2) 10,301.0
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
Depreciation
Depreciation 31 December (€ million) 2007 Charge for Decrease 2008 the year Reversals Financial depreciation (3,285.4) (221.8) 1.4 (3,505.7) Ordinary depreciation (521.4) (61.5) 43.8 (539.1) Total depreciation (3,806.8) (283.3) 45.2 (4,044.9)
3.3. Non-current financial assets
31 December (€ million) 2008 2007 Participating interests 853.1 667.7 Loans 0.6 0.6 Other non-current financial assets 0.2 0.2 Total 854.0 668.5
AREA distributed dividends totalling €111 million (including an require the Company to recognise an impairment loss in res- interim dividend of €59 million for 2008). These payments did not pect of its investment in AREA.
3.4. Trade receivables
31 December (€ million) 2008 2007 Toll subscribers 35.7 54.3 Ancillary activities 34.0 36.1 Doubtful debts (0.8) (1.2) Total 68.9 89.3
3.5. Other receivables, prepayments and accrued income
31 December (€ million) 2008 2007 State and other public bodies 129.8 29.7 Sundry receivables and income receivable 79.0 56.3 Prepayments 19.9 18.4 Deferred charges 9.8 12.0 Indexation difference 39.4 31.5 Total 278.0 148.0 108 Amounts receivable from the State and other public bodies consist corresponding convention had not been signed at the balance mainly of subsidies receivable and income tax credits. sheet date.
Subsidies receivable at 31 December 2008 include subsidies to be Sundry receivables and income receivable consists mainly of received from local authorities in respect of the Maurice Lemaire amounts dues by the TIS agents. tunnel. These subsidies have been agreed in principle, but the Prepayments comprise mainly the fee for the use of public property.
3.6. Marketable securities, cash at bank and in hand
31 December (€ million) 2008 2007 Marketable securities 220.3 46.1 Cash at bank and in hand 16.2 20.1 Total 236.5 66.2
3.7. Capital and reserves
The share capital consists of 113,038,156 shares of €0.30 each. The number of shares in issue and their nominal value has not changed since 1 January 2007.
At 31 December (€ million) 2008 2007 Share capital 33.9 33.9 Share premium account 0.3 0.3 Reserves 3.4 3.4 Retained earnings 1.0 - Interim dividend (96.1) (116.4) Profit for the year 237.1 333.3 Capital grants 149.4 112.2 Regulated provisions 28.9 19.1 Total equity 357.9 385.8
Regulated provisions consist of excess depreciation over plan recorded for taxation purposes.
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
Change in capital and reserves in 2008
(€ million) 31 december Appropriation Grants received Regulated 2008 31 december 2007 per AGM of 2008 less provisions profit 2008 26 June 2008 reversals Share capital 33.9 33.9 Share premium 0.3 0.3 Legal reserve 3.4 3.4 Other reserves - - Retained earnings - 1.0 1.0 Interim dividends (116.4) 116.4 (96.1) (96.1) 2008 profit - 237.1 237.1 2007 profit 333.3 (333.3) - Capital grants 112.2 37.2 149.4 Regulated provisions 19.1 9.9 28.9 Total equity 385.8 (216.9) 37.2 9.9 141.0 357.9
3.8. Other equity
Other equity was unchanged during the year at €164.7 million. It corresponds to concessions made free of charge by the French State, recognised at their value on the date of transfer. 3.9. Provisions for liabilities and charges
(€ million) 31.december Charge for Reversals Reversals Other 31 december 2007 the year (provisions (provisions 2008 utilised) no longer required) Provisions for retirement indemnities 15.6 1.8 17.3 Provisions for similar obligations 4.7 0.3 (0.4) (0.1) 4.6 Provisions for disputes 2.4 0.3 (0.8) (0.2) 1.6 Provisions for taxes 11.8 177.3 (17.4) 171.6 Provisions for indexation of CNA loans 25.2 7.0 32.2 Provisions for indexation of advances 6.4 0.9 7.3 Total 65.9 187.5 (18.6) (0.3) - 234.6 110 In 2008, a provision for replacement, in respect of the surface amounted to ¤92.5 million, was reported as an exceptional item, course, amounting to ¤129.8 million was set aside. The part while amounts set aside and reversed in respect of 2008 were corresponding to the provision at the start of the year, which reported as an operating item.
Provisions for retirement indemnities and similar obligations The following assumptions were relied upon when determining the company’s obligations in respect of retirement indemnities:
31 December (€ million) 2008 2007 Discount rate 6.25% 5.25% Expected rate of salary increases 3.00% 3.00% Mortality tables for men TH 03-05 TH 03-05 Mortality tables for women TF 03-05 TF 03-05 Retirement age for managers 63 years 63 years Retirement age for non-managers 63 years 63 years Social security charges 45.0% 45.0%
A provision amounting to ¤3.2 million was set aside in respect of provision was based on the assumption one in two eligible the commitments given by the Company in connection with the employees would ask to take early retirement. early retirement agreement signed in 2007. The provision covers the bonus paid to the employee on agreeing The provision was calculated on an actuarial basis for the population to take early retirement as well as the part of the replacement concerned. The average retirement age was estimated at 60 years indemnity to be paid until the employee leaves on retirement that (allowing for the particular characteristics of the population). The is borne by the employer. same hypotheses were used as for retirement indemnities and the 3.10.Borrowings and other financial liabilities
31 December (€ million) 2008 2007 Fixed rate CNA loans 3,052.9 3,606.7 Variable rate or revisable-rate CNA Loan (notably through the use of swaps) 977.7 770.7 Fixed rate EIB loan 100.0 100.0 Amounts drawn down against revolving credit facility 1,295.0 955.0 7-year variable rate bank loan 800.0 500.0 Bonds indexed to inflation 200.0 - State advances to TML 18.9 18.0 Debts related to participating interests and sureties received 8.1 9.5 Subtotal 6,452,6 5,959.8 Accrued interest 141.8 144.8 Total 6,594.4 6,104.6
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
In 2008: In addition, the Company drew down on the revolving credit facility • € million of loans having reached maturity were repaid to Caisse a net amount of €340 million, as a result of which the balance on Nationale des Autoroutes (CNA) this facility increased to €1,295 million at 31 December 2008, up • A new €91 million loan was arranged with Caisse Nationale des from €955 million one year before. Autoroutes (CNA) and amalgamated with the 4.5% loan maturing in 2018 The Company’s borrowings (excluding accrued interest) • A 7-year index-linked bond of €200 million was issued at 31 December 2008 are analysed by remaining maturity below: • Two variable rate bank loans amounting to €250 million and €50 million were arranged, repayable in seven years and four years, respectively
(€ million) Less than Between More than Total 1 year 1 and 5 years 5 years Total 409.9 2,804.6 3,211.1 6,452.6
Five new interest rate swaps for a total nominal amount of ¤500 inflation rate of near to 2% in the case of inflows, and to the actual million were entered into by the Company in March 2008 that are inflation rate in the case of annual outflows matched to a loan for the same amount arranged in 2007, for the • The other swap, which concerned a loan in a nominal amount of purpose of fixing the rate on this loan until it is repaid on 29 August ¤300 million maturing in 2018, under which APRR paid a fixed rate 2014. Under these swaps, the Company pays a fixed rate and and received a fixed rate on a nominal indexed to inflation. This receives a variable rate. swap was entered into to neutralise the effects of another mirror swap entered into in 2004 under which it received a fixed rate and In 2008, two swaps for a total nominal amount of €100 million paid a fixed rate on a nominal indexed to inflation entered into in 2005, matched to the 5.25% CNA loan maturing 30 January 2017, were terminated to take advantage of the decline The termination of these swaps gave rise to the recognition in interest rates in the second half of 2008, after interest rates had of a net receivable of €27.6 million from Lehman Brothers risen steadily since the swaps were put into place. International Europe Ltd. An impairment loss amounting to €24.9m (90% of the amount receivable) has been recognised. In 2005, the Company put into place a variable rate programme concerning €450 million of loans, matched for €208.4 million The initial swap entered into in 2004 for a nominal amount of against the CNA 4.50% line maturing 28 March 2018, for €300 million matures in 2018. Under this swap, the Company €150.0 million against the CNA 5.25% line maturing 30 January continues to receive a fixed rate and to pay a fixed rate on 2017, and for €91.6 million against the CNA 4.50% line maturing a nominal amount indexed to inflation, which is no longer 25 April 2010. Part of this programme qualifies as a hedging neutralised by the now terminated mirror swap. The initial swap relationship for accounting purposes. is recognised in full for its market value as a financial charge through the intermediary of a financial provision. In 2008, finally, the Group terminated two swaps entered into in 2005 with Lehman Brothers International Europe Ltd following the collapse of the investment bank: • One swap for nominal toll revenues of €90 million maturing in 2008 and €60 million maturing in 2012, under which the Group swaps cash flows calculated by reference to the toll indexation formula defined in the terms of the concession, applied to a fixed 112 3.11.Other payables, accruals and deferred income
31 December (€ million) 2008 2007 Due to fixed asset suppliers 133.5 112.6 Tax and social security 103.7 133.0 Deferred income 62.7 72.5 Other 23.4 19.9 Total 323.3 338.0
Deferred income comprises mainly issue premiums, income on swap reversals, income from the rental of commercial facilities and income from the lease of installations to telecommunication operators.
04 Information on the income statement 4.1. Revenue
Revenue is analysed below:
Year ended 31 December (€ million) 2008 2007 Toll revenue 1,350.2 1,327.0 Rental income from commercial facilities 27.0 28.6 Revenue from leasing telecommunication installations 10.6 9.4 Other 7.8 5.9 Total 1,395.5 1,370.9
4.2. Purchases and external charges
Year ended 31 December (€ million) 2008 2007 Energy, supplies and spare parts (21.4) (20.8) Infrastructure maintenance (28.3) (42.5) Other maintenance (22.0) (23.0) Fee for the use of public property (36.2) (35.1) Other external charges (63.1) (58.4) Total (170.9) (179.7)
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
4.3. Employee benefit expenses and headcount
a) Expenses
Year ended 31 December (€ million) 2008 2007 Wages and salaries (96.4) (96.3) Social security contributions and deferred benefits (44.8) (47.7) Discretionary employee profit sharing and employer’s contribution to savings plan (11.6) (9.3) Total (152.8) (153.4)
b) Average headcount
Year ended 31 December (€ million) 2008 2007 Management grade 403 414 Supervisor grade 1,437 1,410 Workers and office staff 1,051 1,135 Total 2,891 2,960
4.4. Other operating income and expenses
Year ended 31 December (€ million) 2008 2007 Charges capitalised - Property, plant and equipment 5.3 8.4 Charges capitalised - Intangible assets 5.9 2.3 Insurance claim 6.8 7.4 Loan issue costs -- Other 2,4 2.9 Other operating income 20.4 21.1
4.5. Taxes (other than income tax)
Year ended 31 December (€ million) 2008 2007 Regional development tax (104.4) (106.2) Local business tax (37.6) (35.0) Payroll and similar taxes (4.5) (4.2) Other taxes and duties (4.2) (4.5) Total (150.7) (149.8) 114 4.6. Depreciation, amortisation and provisions
Year ended 31 December (€ million) 2008 2007 Financial depreciation (221.1) (209.9) Depreciation of renewable non-current assets (70.0) (70.6) Provisions (36.8) 1.4 Total (327.8) (279.2)
4.7. Résultat financier
Year ended 31 December (€ million) 2008 2007 Loan interest and indexation (409.3) (320.5) Interim interest capitalised 15.0 11.2 Amortisation of loan issue costs and premiums (2.2) (2.6) Dividends received from subsidiaries 111.6 106.3 Other financial income including loan indexation adjustments 75.0 33.3 Total (209.8) (172.3)
More information on dividends received from subsidiaries is provided in Note 3.3.
4.8. Exceptional items
Year ended 31 December (€ million) 2008 2007 Net gains on the disposal of non-current assets 0.9 1.9 Reversal of capital grants 4.8 4.5 Depreciation and provisions (103.2) (2.8) Other 0.3 2.4 Total (97.2) 6.0
4.9. Income tax expense
In 2008, the tax charge on the income of the tax group amounted to €117.3 million, for part offset by the €55.0 million of tax credits booked by its subsidiaries AREA and Sira.
2008 APRR ANNUAL REPORT COMPANY FINANCIAL STATEMENTS
05 Additional information 5.1. Tax group and parent company different group members. APRR had no commitment in this respect towards other group members at 31 December 2008. APRR is the head of a tax group that includes AREA and Sira. The financial statements of APRR are consolidated under the full The agreement signed by the companies belonging to this tax method in the consolidated financial statements of Eiffage Group group was drawn up on the basis of fiscal transparency for the since 20 February 2007.
5.2. Accounting and financial indicators
Year ended 31 December (€ million) 2008 2007 EBITDA 934.2 900.4 EBITDA margin 66.9% 65.7%
Earnings before interest, tax, depreciation and amortisation correspond to operating profit before amortisation, depreciation and provisions. 5.3. Rémunérations des organes de direction
The Chairman of the Board of Directors received no compensation from the Company in 2008. 5.4. Litigation
APRR is involved in various disputes having arisen in the normal business are likely to have a material impact on its operating profit, course of business. The Company considers that, as at 31 December its activity or its financial situation (apart from the risks already 2008, none of the ongoing disputes arising from the normal course of provisioned in the accounts). 5.5. Commitments
a) Commitments given
31 December (€ million) 2008 2007 Work to be performed (1% landscape) 0.1 0.2 Total 0.1 0.2
b) Commitments received
31 December (€ million) 2008 2007 Bank guarantees 41.6 72.9 Total 41.6 72.9 116 c) Reciprocal commitments
31 December (€ million) 2008 2007 Work contracts (signed, not performed) 261.3 277.7 Syndicated loan facility not utilised 505.0 845.0 Total 766.3 1,122.7
5.6. Information concerning subsidiaries and participating interests
(€ million) Subsidiaries Participating interests Participating interests 853.1 Other receivables 0.7 27.8 Trade payables 15.1 0.3 Other payables 0.5 Financial income 133.9 Operating charges 2.1
06 List of subsidiaries and participating interests
(€ thousands) 2008 2008 % held Gross Net Loans and Dividends 2008 2008 capital Reserves value value advances received revenue profit not repaid Subsidiaries (over 50% held by APRR) AREA 82,900 76,555 99.82% 214,957 214,957 629,585 111,112 438,442 98,759 Sira 10 233 100.00% 11 11 113 3,350 232 Park + 300 (73) 60.00% 180 180 2,761 232 (25) Cera 8 99 100.00% 315 315 698 23 Participating interests Autoroutes Trafic na na 24.00% 72 72 na na Centaure Grand Est 450 649 35.55% 212 212 1,086 77 Centaure Ile de France 900 415 49.00% 441 441 1,296 4 Altech 40 701 33.50% 6 6 16 1,765 339 Axxès 7,500 2,580 22.80% 1,710 1,710 673,498 6,785 SC Autoroutes GIE (449) 16 105 19 Devtel 25 21 100.00% 25 25 384 - 11 Apollinaire Participations 37 100.00% 37 37 - - SEM Alesiana na 20 20 na na Total 217,986 217,986 632,362 111,625
2008 APRR ANNUAL REPORT STATUTORY AUDITORS’ REPORT on the company financial statements (for the year ended 31 december 2008)
To the Shareholders To the Shareholders, Sociétés des Autoroutes Paris-Rhin-Rhône 36, rue du Docteur Schmitt In fulfillment of the assignment entrusted to us by your General 21850 Saint Appolinaire Meeting of Shareholders, we present to you our report for the year France ended 31 December 2008 on: • the audit of the company financial statements of APRR SA, as attached to this report; • the justification of our assessments; and • the specific verifications and information required by law. The company financial statements have been prepared under the responsibility of the Board of Directors. It is our responsibility, based on our audit, to express an opinion on these financial statements.
01 Opinion on the company financial statements
We conducted our audit in accordance with auditing standards applied in France. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the company financial statements are free of material misstatement. An audit includes examining, on a test basis, the evidence supporting the amounts and disclosures in the company financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, and in light of generally accepted accounting rules and principles in France, the company financial statements give a true and fair view of the Company’s assets and liabilities and financial position at 31 December 2008, and of the results of operations for the year then ended. 118 Justification of our assessments Specific verifications 02 03and information Pursuant to the provisions of Article L823.9 of the French Commercial Code (Code de Commerce) relating to the justification of our We also performed specific verifications required by law. assessments, we bring to your attention the following matters: We have no comment to make as to: • As explained in Note 1, the Company decided to set aside provisions for the replacement of surface courses in accordance • the fair presentation of the information provided in with the requirements of Article 393-1 of the French Accounting the Management Report and in the documents addressed Standards. As part of our assessment of the accounting rules and to the shareholders relating to the financial situation of principles adopted by the Company, we verified that this change of the Company and its financial statements and the conformity accounting method was justified and that the information provided of this information with the company financial statements; and in the notes was appropriate. • the fair presentation of the information provided in the • Note 2.2 to the company financial statements describes the Management Report relating to the compensation and benefits accounting methods applied to tangible assets made available in kind paid to the Company’s Directors and Officers and under the concession agreement and their depreciation. commitments given in their favour upon or subsequent to their We verified that these accounting methods are appropriate taking up this or another appointment or upon termination of and were applied properly. this appointment.
These assessments were made as part of our audit of the As required by law, we checked that the information relating to company financial statements taken as a whole, and therefore the identity and voting rights of the Company's shareholders was contributed to determining the unqualified opinion expressed in provided in the Management Report. the first part of this report. Neuilly-sur-Seine and Paris La Défense, 28 April 2009
The Statutory Auditors
PricewaterhouseCoopersAudit KMPG Audit Department of KPMG SA.
Louis-Pierre Schneider Thierry Charron Benoît Lebrun
2008 APRR ANNUAL REPORT AUDITORS' SPECIAL REPORT on the regulated agreements and commitments (for the year ended 31 December 2008)
PricewaterhouseCoopersAudit costs, more specifically marketing and management expenses, 63, rue de Villiers committed to re-invoicing part of these expenses to AREA in a 92208 Neuilly-sur-Seine Cedex fixed amount of €1.2 million a year. All material exceptional expenses committed by one party to the Salustro Reydel common benefit of the Group are to be re-invoiced as indicated Member of KPMG International below: 1, cours Valmy • seventy five percent (75%) to APRR if the expense is committed 92923 Paris-La Défense Cedex by AREA; and • twenty five percent (25%) to AREA if the expense is committed The Shareholders by APRR Société des Autoroutes Paris-Rhin-Rhône Furthermore, expenses committed by either one of the parties in 36, rue du Docteur Schmitt connection with investment activities fall outside the scope of the 21850 Saint Appolinaire flat fee agreement and will continue to be re-invoiced on an ad-hoc France basis between the two companies. Income arising from the application of this agreement amounting To the Shareholders, to €1.2 million was recognised by your Company in respect of the year ended 31 December 2008. As the statutory auditors of your Company, we present to you our report on regulated agreements and commitments. Directors concerned: Jean-François Roverato, Bruno Angles, Philippe Delmotte, John Hughes, Andrew Hunter, François Massé, Ross McInnes, Max Roche, and Philippe Nourry. Agreements and commitments 01authorised during the year As required by Article L.225-40 of the French Commercial Code 02 Agreements and commitments (Code de Commerce) we were informed of the agreements approved in previous years that and commitments having received the prior authorisation of remained in force during the year the Board of Directors. It is not our responsibility to determine whether other agreements ended or commitments exist, but rather to inform you, on the basis of Furthermore, as required by the French Commercial Code, the information provided, of the main features and conditions of we were advised that the following agreements and commitments, those agreements and commitment about which we have been approved in previous years, remained in force during the year advised, without having to express an opinion on their usefulness ended. or appropriateness. In accordance with the provisions of Article R.225-31 of the French Commercial Code it is your responsibility With Caisse Nationale des Autoroutes to determine the Company's interest in entering into these Le Conseil d’administration de votre Société, dans sa séance du agreements when they are submitted for approval. 26 octobre 2005, a approuvé, dans ses principes, un projet d’avenant We performed our work in accordance with auditing standards à la convention cadre du 2 septembre 1996 conclue entre votre issued by the French Institute of Chartered Accountants. These Société, AREA et la Caisse Nationale des Autoroutes (CNA) ainsi standards require that we perform such procedures as may be qu’aux différents contrats de prêts conclus entre la CNA d’une part, necessary to verify the consistency of the information given to us votre Société ou AREA d’autre part. with the source documents from which this information is extracted. Les principales modifications apportées par cet avenant, signé le 20 février 2006, aux relations entre votre Société, AREA et la CNA With AREA, for the re-invoicing of intra-group services sont les suivantes : During its meeting of 5 May 2008, the Board of Directors approved • your Company acts as the co-surety of AREA's obligations an agreement governing the conditions under which intra-group towards CNA; services are to be re-invoiced between your company and AREA. • your Company and AREA may take out new financing with CNA Under this agreement, your Company, which bears all joint (i) until 31 December 2006 for capital expenditure on construction for motorways in service, such as that imposed under concession agreements and contracting contracts concluded by each of the two companies, and (ii) until 31 December 2008 for new constructions; • your company agrees to comply at all times with the following financial ratios, calculated based on the APRR group's consolidated 120 financial statements: - net debt/EBITDA ratio no higher than 7; and Interest income arising from the application of this agreement - EBITDA/interest expense no less than 2.2; amounting to €20 million was recognised by your Company in - your Company and AREA agree that, unless authorised by CNA, respect of the year ended 31 December 2008. The amount payable APRR Group would maintain its construction and operation by AREA to APRR under this agreement amounted to €600 million business, or the operation only of road transport and parking at 31 December 2008. infrastructures or related services, in France and in OECD countries, so that it represents at all times over 85% of its consolidated • Agreement governing intra-group advances assets and over 80% of its consolidated annual revenue; During its meeting of 18 December 2003, the Board of Directors of - your Company and AREA agree not to take part in mergers, your Company authorised the intra-group advance agreement. absorptions or partial business transfers without prior agreement Under the agreement signed on 31 December 2003, AREA granted from CNA, with the exception of intra-group transactions; your Company an advance of ¤ 130 million. Interest is charged on • The main cases for acceleration of maturity are the following (if this advance at 0.20% over the Euro OverNight Index Average necessary after taking into consideration their effect on the general (EONIA) rate on an Exact/360 basis. Furthermore, provided the cash financial position of the Group): available is surplus to requirements, each signatory company - payment default; to the agreement agrees to grant a "subsidiary" cash advance - non-compliance with a key commitment under the terms of to the other company if it has a negative cash balance. an agreement concluded with CNA; These subsidiary advances are short-term, bearing interest - cross default (payment default in excess of ¤30m); at 0.05% over the EONIA rate on an Exact/360 basis. - inaccuracies in a disclosure or guarantee provided under Interest income arising from the application of this agreement an agreement concluded with CNA; amounting to ¤2.1 million was recognised by your Company in - issuance of a qualified opinion by the statutory auditors on the respect of the year ended 31 December 2008. The amount payable accounts of your Company or of AREA that might have an impact by AREA to APRR under this agreement amounted to €29.6 million on compliance with any of the financial ratios defined above; at 31 December 2008. - significant non-performance of any of the concessions, which would have a significant negative impact on the ability of your With SIRA Company or AREA to make repayments, and only if (in CNA's • Service agreement signed on 18 August 2005 reasonable opinion) CNA's interest would be affected; A rider was signed on 14 September with retroactive effect from - cancellation of any motorway concession agreements for which 1 January 2007. In 2008, your Company invoiced the following your Company and AREA are currently holders, or any other amounts to SIRA, for: important concession agreement to be concluded; - sundry services: €67.2 thousand - cessation of the transport infrastructure operation business; and - rent: €88.7 thousand - any major dispute that could have a significant negative effect on - insurance premiums: €3.3 thousand the ability of your Company or of AREA to make repayments. Concurrently, SIRA invoiced your Company an amount of €1 million With AREA for broadcasting the Autoroute Info radio channel. • Framework agreement governing intra-group cash advances Under this agreement, your Company provides SIRA with the financing and any retrocessions in the form of intra-group loans by APRR needed for its operations. Advances granted under this agreement to AREA of all or part of the loans issued by APRR bear interest at the average annual rate for the CNA loans and are During its meeting of 29 November 2006, the Board of Directors repayable within at most five years. If there is cash available, SIRA approved in principle, the signing of an agreement between your may make cash advances to your Company on the same terms. Company and AREA for the provision of cash. Under the terms of Interest income arising from the application of this agreement this agreement your Company will provide AREA with the financing amounting to €3.4 thousand was recognised by your Company in it needs under the conditions negotiated by your Company in the respect of the year ended 31 December 2008. The amount payable context of its global financing. This agreement was signed by the by SIRA to APRR under this agreement amounted €0.5 million at parties on 2 January 2007. 31 December 2008.
Neuilly-sur-Seine and La Défense, 28 April 2009
The Statutory Auditors
PricewaterhouseCoopersAudit KMPG Audit Member of KPMG International Louis-Pierre Schneider Thierry Charron Benoît Lebrun
2008 APRR ANNUAL REPORT RESOLUTIONS put to the combined Ordinary and Extraordinary General Meeting of 23 June 2009
01 Ordinary resolutions Given that an interim dividend of ¤0.85 per share was distributed First Resolution on 29 December 2008 pursuant to the decision taken by the Approval of the company’s financial statements Board of Directors on 17 December 2008, no final dividend will The General Meeting, voting in accordance with the quorum and be distributed. majority requirements for ordinary general meetings, having heard the Board of Directors’ Report on the activities of the company in As required by law, the General Meeting is reminded that the 2008 and the Auditors' General Report on the company’s financial following dividends were distributed for the previous three years: statements for that year, approves the company’s financial statements as presented to it, which show a profit of €237.1 million, and the 2005 transactions reflected in such financial statements or summarised in such reports. Number of shares 113,038,156 Second Resolution Dividend per share (*) €11.30 Approval of the consolidated financial statements Distribution eligible for the allowance The General Meeting, voting in accordance with the quorum and provided for in Article 158-3-2 of the French majority requirements for ordinary general meetings, having heard General Tax Code €1,277,331,162.80 the Board of Directors’ Report on the activities of the group in 2008 Distribution not eligible for the allowance and the Auditors' General Report on the consolidated financial provided for in Article 158-3-2 of the French statements for that year, approves the consolidated financial General Tax Code – statements as presented to it, which show a net attributable * Amount of €9.58 per share distributed by drawing down on retained earnings, on profit for the year of ¤332.9 million, and the transactions reflected reserves and on the share premium account. The amount drawn down on retained earnings and reserves, totalling €1.62 per share, was treated as a dividend for taxation purposes, in such financial statements or summarised in such reports. while the amount drawn down on the share premium account, amounting to €7.96 per Accordingly, the General Meeting gives the members of the Board share, was treated as repayment of capital. of Directors final discharge for their management in 2008. Third Resolution 2006 Appropriation of profit Number of shares 113,038,156 The General Meeting, voting in accordance with the quorum € and majority requirements for ordinary general meetings, Dividend per share (*) 7.33 having heard the Board of Directors’ Report and the Auditors' Distribution eligible for the allowance General Report on the financial statements for the year, and provided for in Article 158-3-2 of the French € having noted that the distributable profit for the year amounted General Tax Code 828,569,683.48 to €237,061,290.85, approves the allocation of net profit Distribution not eligible for the allowance proposed by the Board of Directors. provided for in Article 158-3-2 of the French General Tax Code – Accordingly it resolves as follows: * Amount of €3.48 per share distributed by drawing down on retained earnings and on the share premium account. The amount drawn down on retained earnings was treated as a € dividend for taxation purposes, while the amount drawn down on the share premium Distributable profit for the year 237,061,290.85 account was treated as repayment of capital. Plus amount brought forward from the previous year €1,009,410.84 2007 Giving a total of €238,070,701.69 To be appropriated as follows: Number of shares 113,038,156 € € - Distribution of a total dividend of 0.85 for 96,082,432.60 Dividend per share €2.94 each of the 113,038,156 shares: - Amount drawn down to be carried forward € Distribution eligible for the allowance 141,988,269.09 € to next year provided for in Article 158-3-2 of the French 332,332,178.64 General Tax Code Total €238,070,701.69 Distribution not eligible for the allowance provided for in Article 158-3-2 of the French 122 General Tax Code – Fourth Resolution reaches the age of 65, the Board of Directors may extend the Approval of agreements governed by Article L.225-38 of the Chairman’s term of office once or several times, for a total period Commercial Code of no more than three years. The General Meeting, voting in accordance with the quorum and The Board of Directors may dismiss its Chairman at any time. majority requirements for ordinary general meetings, having heard Should the Chairman be prevented temporarily from performing the Auditors' Special Report on the transactions governed by his duties or should the position be vacant as a result of the Article L225-38 of the Commercial Code, approves said report and Chairman’s death, the Board of Directors may appoint a board the transactions referred to therein. member to act as Chairman. If the Chairman is prevented temporarily from performing his duties, this appointment shall be Fifth Resolution limited in time. The appointment may be renewed. In the event of Ratification of provisional appointment of a director the Chairman’s death, the appointment shall be for such time The General Meeting, voting in accordance with the quorum and until a new Chairman has been chosen by the Boar majority requirements for ordinary general meetings, ratifies The rest of the article is unchanged. the provisional appointment made by the Board of Directors on 17 December 2008, by replacing Mr Guy Lacroix, who has Eighth Resolution resigned, with:Mr François Masse, Born on 29 December 1951, Amendment of Article 16.1 of the Memorandum and Articles of as a director of the company for the remainder of his predecessor’s Association term of office, that is until the close of the Ordinary General The General Meeting, voting in accordance with the quorum and Meeting convened in 2011 to approve the financial statements for the majority requirements for extraordinary general meetings, the year ended 31 December 2010. having heard the Director's Report, decides to amend Article 16.1 the Memorandum and Articles of Association as follows: Sixth Resolution Ratification of provisional appointment of a director Article 16 – General management The General Meeting, voting in accordance with the quorum and 1. Either the Chairman of the Board of Directors or another natural majority requirements for ordinary general meetings, ratifies person appointed by the Board of Directors to serve as Chief the provisional appointment made by the Board of Directors on Executive Officer shall be responsible for the general management 17 December 2008, by replacing Mr David Harrison, who has of the company. resigned, with: Mr Andrew Hunter, Born on 16 June 1968, as a The age limit for appointment as Chief Executive Officer or as director of the company for the remainder of his predecessor’s Deputy Chief Executive Officer shall be 65. However, if a person term of office, that is until the close of the Ordinary General who is already the Chief Executive Officer or Deputy Chief Meeting convened in 2011 to approve the financial statements for Executive Officer reaches the age of 65, the Board of Directors the year ended 31 December 2010. may extend said person’s term of office once or several times, for a total period of no more than three years. The Board of Directors, ruling under the conditions defined in Extraordinary Resolutions Article 14, shall choose one of these two methods of general 02 management. This choice may be modified at any time. Whichever form is chosen, the Board shall inform shareholders Seventh Resolution and third parties in accordance with the applicable regulations. Amendment of Article 15.1 of the Memorandum and Articles of Changing the form of general management shall not require the Association Memorandum and Articles of Association to be amended. The General Meeting, voting in accordance with the quorum and The rest of the article is unchanged. the majority requirements for extraordinary general meetings, having heard the Director's Report, decides to modify Article 15.1 the Memorandum and Articles of Association as follows: 03 Common resolution Article 15 – Chairman of the Board of Directors 1. The Board of Directors shall appoint one of its members, who Ninth Resolution shall be a natural person, as Chairman for a period that may not Powers to carry out legal formalities exceed the person’s term of office as a director. The Chairman may The General Meeting grants full powers to the Chairman of the serve further terms. Board of Directors, to his representative(s) and to the bearer of a The age limit for appointment as Chairman shall be 65. However, copy of or an excerpt from these minutes to make all filings and if a person who is already the Chairman of the Board of Directors publications and to carry out other formalities required.
2008 APRR ANNUAL REPORT NOTES
Autoroutes Paris-Rhin-Rhône Joint stock company with a capital of €33,911,446.80 – Dijon company register no. 016 250 029 APRR – Communications Department April 2009 Printed in France on paper produced from responsibly-managed forests Printer: Axiom-Graphic Photo credits: APRR photo library, Daniel Jamme (Millau for CEVM, p. 13) Design-production: 8602 36 rue du Docteur-Schmitt – 21850 Saint-Apollinaire Tel.: +33 (0)3 80 77 67 00 – Fax: +33 (0)3 80 77 67 20 Joint stock company with a capital of €33,911,446.80 - Dijon company register no. 016 250 029 www.aprr.com