2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 114 CONSOLIDATED FINANCIAL STATEMENTS 4 Notes to the consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1/ Accounting policies andmethods 115 1.1 General information 115 1.2 Basis of preparation of the consolidated financial statements 115 1.3 Adoption of the new IFRS standards 116 1.4 Use of estimates and assumptions 117 1.5 Summary of accounting policies and methods 118 1.5.1 Foreign currency translation 118 1.5.2 Business combinations and goodwill 119 1.5.3 Negative goodwill 119 1.5.4 Intangible assets 119 1.5.5 Property, plant and equipment 119 1.5.6 Equity interests in associates and joint ventures 120 1.5.7 Investments and other financial assets 120 1.5.8 Inventories and work in progress 122 1.5.9 Cash and cash equivalents 122 1.5.10 Non-current assets held for sale and discontinued operations 122 1.5.11 Treasury shares 122 1.5.12 Provisions and contingent liabilities 122 1.5.13 Employee benefits 122 1.5.14 Financial liabilities 123 1.5.15 Finance leases 124 1.5.16 Revenue 124 1.5.17 Current income tax and deferred tax 124 1.5.18 Derivative instruments and hedge accounting 124 1.6 Translation of the financial statements of foreign subsidiaries 125 2/ Significant information for the year ended December 31, 2017 126 2.1 Significant events over the period 126 2.2 Changes in the scope of consolidation 127 2.2.1 Newly consolidated companies 127 2.2.2 Deconsolidated companies 127 2.2.3 Transactions in non-controlling interests 127 3/ Notes to the consolidated financial statements 128 3.1 Goodwill 128 3.2 Other intangible assets 131 3.3 Property, plant and equipment 133 3.4 Investments in affiliates under the equitymethod 136 3.4.1 Aggregate financial information 137 3.4.2 Commitments given or received for associated or joint venture companies 137 3.4.3 Transactions with associates and joint ventures 137 3.5 Non-current financial assets 137 3.6 Inventories and work in progress 139 3.7 Trade and other receivables, current financial assets and other current assets 139 3.8 Cash and cash equivalents 140 3.9 Shareholders’ equity 140 3.10 Stock option subscription or purchase plans 141 3.11 Bonus share allocation 142 3.12 Treasury shares 142 3.13 Employee benefit obligations and other provisions 143 3.14 Gross financial liabilities 145 3.15 Financial income/(loss) 147 3.16 Deferred taxes 148 3.17 Income tax 149 3.18 Financial risk management objectives and policy 149 3.18.1 Credit/counterparty risk 149 3.18.2 Liquidity risks 150 3.18.3 Market risks 152 3.19 Financial instruments 156 3.19.1 Financial assets 156 3.19.2 Derivative financial instruments 157 3.19.3 Financial liabilities 158 3.19.4 Fair value of financial assets and liabilities 159 3.19.5 Management of the risks related to financial instruments 159 3.20 Contingent liabilities 160 4/ Operating segments 160 5/ Other information 163 5.1 Contractual obligations and other off-balance sheet commitments 163 5.1.1 Off-balance sheet commitments related to the Group scope of consolidation 163 5.1.2 Off-balance sheet commitments related to financing 163 5.1.3 Off-balance sheet commitments related to the Group’s operating activities 164 5.2 Net earnings per share 165 5.2.1 Basic net earnings per share 165 5.2.2 Diluted net earnings per share 166 5.3 Workforce and payroll 166 5.4 Significant events after the end of the reporting period 167 5.5 Related-party transactions 167 Relations with the SINOPACIFIC Group 167 Relations with an executive 167 Relations with JACCAR Holdings 167 5.6 Executive compensation 168 5.6.1 Compensation paid to the Chairman and Chief Executive Officer and the ExecutiveVice Presidents 168 5.6.2 Commitments of any kind made by the Company to its corporate officers 172 5.6.3 Stock options exercised during the year by each Executive Director 172 5.7 Statutory Auditors’ fees 173 5.8 Scope of consolidation 174 5.8.1 List of BOURBON Corporation’s fully consolidated companies 174 5.8.2 List of companies consolidated by BOURBON Corporation using the equity method 178 6/ Financial Glossary 179