2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 122 CONSOLIDATED FINANCIAL STATEMENTS 4 Notes to the consolidated financial statements 1.5.8 Inventories and work in progress Inventories are measured at the weighted-average cost method for raw materials and at the production cost for work in progress and finished goods. When the production cost of finished goods is greater than the selling price at the inventory date, impairment is recognized in order to reduce the value of the inventories to their net realizable value. 1.5.9 Cash and cash equivalents Cash and cash equivalents consist of cash on hand and in banks, short-term deposits and marketable securities. Cash and cash equivalents are recorded at fair value. 1.5.10 Non-current assets held for sale and discontinued operations Non-current assets held for sale Pursuant to IFRS 5, non-current assets (or disposal groups) and the related liabilities are classified as “held for sale” if their carrying amount will be recovered primarily through a sale transaction rather than continuing use. This classification implies that the assets (or disposal groups) intended for sale are available for immediate sale, in their present condition, and that the sale is highly probable. The highly probable nature of the sale is assessed according to the following criteria: management has undertaken an asset (or asset group) disposal plan and a program to find a buyer and finalize the plan has been initiated. In addition, the assets must be actively marketed for sale at a reasonable price in relation to their fair value. The sale of the assets (or disposal group) is assumed to take place within one year from the date of being classified as assets held for sale. Non-current assets (or disposal groups) intended to be sold and classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. They are no longer depreciated as of the date they are classified as assets held for sale. Discontinued operations A discontinued operation is an activity or a significant geographic region for the Group which is either being sold or classified as an asset held for sale. The items of the income statement and the cash flow statement for these discontinued operations or operations being sold are presented on specific lines of the financial statements for all periods presented. As a result, certain elements of the income statement and the cash flow statement for the previous year are restated in order to present comparative information for these discontinued operations. 1.5.11 Treasuryshares When the Group purchases its own equity instruments (treasury shares), they are deducted from shareholders’ equity. No profit or loss is booked in the income statement at the time of the purchase, sale, issue or cancellation of the Group’s equity instruments. 1.5.12 Provisions and contingent liabilities Provisions Provisions are recognized when the Group has a present obligation resulting from a past event, when it is probable that an outflow of resources embodying economic benefits will be necessary to settle the obligation, and when the amount of the obligation can be reliably estimated. If the effect of the time value of the money is significant, the provisions are discounted on the basis of a pre-tax rate which reflects the risks specific to the liability, if any. When the provision is discounted, the increase in the provision related to the passage of time is recognized as a finance expense. Under certain operating leases, major periodic maintenance work of the vessels has to be done by the Group throughout the lease period. In this case, with a current obligation of future outflow of resources which can be reliably determined, the Group has set aside provisions for major maintenance, based on estimates of the future cost of said maintenance. Contingent liabilities Contingent liabilities are the subject of a note to the financial statements (see note 3.20). They correspond to: 3 a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the entity; or 3 a present obligation that arises from past events but is not recognized because: i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or ii) the amount of the obligation cannot be measured with sufficient reliability. 1.5.13 Employee benefits Employee benefits include retirement indemnities, seniority awards, incentives and profit-sharing. Retirement benefit obligations Group employees receive retirement indemnity in addition to the legal retirement benefits in effect in the countries in which they are employed. Pursuant to IAS 19 “Employee benefits”, retirement benefit obligations are measured using the projected unit credit method. Under this method, the valuation of the commitment takes into consideration the pension rights that the employee will have acquired on the date of his retirement. However, the commitment is allocated proportionately between the employee’s seniority on the calculation date, taking into account the ratio between the employee’s current seniority and his seniority projected at retirement date.