2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 118 CONSOLIDATED FINANCIAL STATEMENTS 4 Notes to the consolidated financial statements The expected future cash flows used to calculate the useful value of each CGU are calculated based on the Group’s five-year business plans, prepared using adjusted financial data (see note 4 “Segment information”). The flows are discounted at a rate measured on the basis of the average weighted cost of the capital determined for the Group. Analyses are then done to determine the sensitivity of the values obtained to a variation in one or more of the assumptions in the business plan. Since by its nature the “discounted cash flow” method used to measure the value in use of the CGUs to which the goodwill is allocated is uncertain, the actual future cash flows can vary from the future cash flow projections used to determine the useful value. In accordance with IAS 36, the goodwill value must be tested at least once a year and systematically as soon as indications of impairment appear. Impairment tests on assets Intangible assets with definite useful life and property, plant and equipment are tested for possible impairment as soon as there is any indication that the assets may be impaired (see notes 1.5.5 and 1.5.6), i.e . when events or specific circumstances indicate a risk of impairment loss. In order to conduct these tests, non-current assets are grouped into CGUs and their net book value is compared to the recoverable value of said units. Recoverable value is defined as the higher of the useful value (see previous section) and the fair value (net of disposal costs). 1.5 SUMMARY OF ACCOUNTING POLICIES AND METHODS 1.5.1 Foreign currencytranslation The consolidated financial statements are disclosed in euros, which is the functional and presentation currency of the parent company. The functional currency of the foreign subsidiaries is generally the local currency. If the majority of the transactions and costs are executed in a different currency, that currency is used as the functional currency. The accounts of subsidiaries with a functional currency different from euro are translated by applying the closing rate method: 3 balance sheet items, with the exception of shareholders’ equity, which is maintained at the historical rate, are converted at the year-end exchange rate; 3 items on the income statement are translated at the average rate for the period; 3 the currency translation adjustment is included in consolidated shareholders’ equity and does not affect net income. Foreign currency transactions made by the companies of the Group are initially booked in the functional currency at the exchange rate prevailing on the date of the transaction. On the closing date, monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate prevailing on the closing date. All exchange differences are recognized in the income statement, with the exception of those related to borrowings in foreign currencies which constitute a hedge of the net investment in a foreign entity. These differences are charged directly to shareholders’ equity until the disposal of the investment; on that date, they are recognized as income/loss. Pursuant to IAS 21, goodwill is expressed in the functional currency of the companies acquired and then translated at the closing rate (IAS 21.47). Monetary items receivable from or payable to a foreign business for which settlement is neither planned nor likely to occur in the foreseeable future is, in substance, a part of the entity’s net investment in that foreign operation (IAS 21.15). Exchange differences arising on a monetary item that forms part of a net investment in a foreign business must be recognized in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment (IAS 21.48). Hyperinflationaryeconomies The hyperinflationary nature of an economy is defined by IAS 29.3 in accordance with the following non-exhaustive characteristics: 3 the general population prefers to keep its wealth in non monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power; 3 the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency; 3 sales and purchases on credit take place at prices that compen- sate for the expected loss of purchasing power during the credit period, even if the period is short; 3 interest rates, wages, and prices are linked to a price index; 3 the cumulative inflation rate over three years approaches, or exceeds, 100%. Moreover, under IAS 21.42 and IAS 21.43, when an entity’s functional currency is the currency of a hyperinflationary economy, the following treatment is applied: 3 initially, the entity’s financial statements for the year in progress drawn up in its functional currency based on historical costs or actual costs are restated in accordance with the principles of IAS 29.8, i.e . by applying a general price index, so that they are expressed in terms of the current measuring unit at the balance sheet date; 3 comparative figures for the prior financial year are also restated by applying a general price index, so that they are expressed in terms of the current measuring unit at the balance sheet date; 3 the gain or loss on the net monetary position is included in net income and is disclosed separately (IAS 29.9);