2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 120 CONSOLIDATED FINANCIAL STATEMENTS 4 Notes to the consolidated financial statements At the acquisition date, the value of the “vessel” component is the total cost price of the asset minus the “overhaul” component; this component is equal to the cost of the first overhaul of the vessel. B) Depreciation Depreciation is calculated on the basis of the gross value of the component less its residual value. Residual value is the expected selling price (less selling costs) which the Group would obtain today from the sale of this asset at the end of its use by the Group. The depreciable amount of the “vessel” component is equal to its gross value in the consolidated accounts less its residual value. As the “overhaul” component has a zero residual value, its depreciable amount corresponds only to its gross value in the consolidated accounts. Each component is then depreciated using the straight-line method over its useful life. Useful life is defined according to the expected utility of the asset for BOURBON based on the use planned by the Group. The main useful lives of the “vessel” component used at BOURBON are between 8 and 30 years. The useful life of the “overhaul” component of a vessel depends on the multi-year maintenance schedule for the vessel. Moreover, if there are indications of impairment, an impairment test is then performed on the asset or group of assets by comparing its net book value with its recoverable value. The recoverable value is generally determined with reference to a market valuation. Such valuations are obtained from independent experts and reviewed by the Group’s management. When the recoverable value turns out to be less than the net book value of the asset group, an impairment is recognized. Other property, plant and equipment (excluding vessels) Property, plant and equipment, other than the vessels and investment property, are carried at cost as defined by IAS 16 § 16. These assets consist of a single component. The depreciable amount of other property, plant and equipment is equal to their purchase price, their residual value being zero, with the exception of certain buildings for which there is a residual value. Other assets are depreciated using the straight-line method over their useful life. The main useful lives for property, plant and equipment, excluding vessels, are as follows: 3 construction and buildings: between 8 and 40 years; 3 technical facilities: between 10 and 15 years; 3 other property, plant and equipment: between 2 and 10 years. Investment properties The investment properties held by the Group are recognized in the consolidated accounts at historical cost and depreciated using the straight-line method over 40 years. 1.5.6 Equity interests in associates and joint ventures Associates are companies over which the Group exercises a significant influence; partnerships that solely provide control of the net assets of the Company are considered joint ventures. The Group’s equity interests in its associates and joint ventures are recognized using the equity method. Investments in associates are recognized as assets on the balance sheet for the part of shareholders’ equity they represent. The related goodwill is included in the book value of the equity interest. A liability is recognized for the companies with a negative net asset and for which there exists a legal or implied obligation for the Group. Since these companies are directly and fully integrated in the Group’s business activities, the net earnings of the associates are presented on a separate line from the operating income. 1.5.7 Investments and other financial assets Financial assets included in the scope of application of IAS 39 are classified as “financial assets at fair value through profit or loss”, as “loans and receivables”, as “held-to-maturity investments”, or as “available-for-sale financial assets”. When initially recognized, financial assets are measured at fair value, plus transaction costs in the case of investments which are not recognized at fair value through profit or loss. Initially, the Group analyzes the possible existence of embedded derivatives in the contracts. Embedded derivatives are separated from the host contract if the contract is not recognized in its entirety at fair value through the income statement, and if analysis shows that the economic features and the risks of the embedded derivatives are not closely related to those of the host contract. The Group determines the classification of its financial assets at the time of initial recognition and reviews this classification at each yearly closing when this is authorized and appropriate. All “normalized” purchases and sales of financial assets are recognized on the transaction date, i.e . the date on which the Group agrees to purchase the asset. “Normalized” purchases or sales are purchases or sales of financial assets under a contract, the terms of which require the delivery of the asset within the period generally defined by the regulations or by a convention on the market in question. Financial assets at fair value through profit or loss The category of “financial assets at fair value through profit or loss” includes financial assets held for trading purposes and financial assets designated at the initial accounting as financial assets at fair value through profit or loss. Further details are given in note 3.19. Loans and receivables Loans and receivables are non-derivative financial assets, with fixed or determinable payments, which are not listed on an active market. After initial recognition, loans and receivables are measured at amortized cost using the effective interest rate method, less, if applicable, an impairment loss. The amortized cost is calculated by taking into account any initial additional cost or discount, and includes commissions which are an integral part of the effective interest rate, as well as transaction costs.