Assystem - 2015 Registration Document

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Basis of consolidation

TRANSACTIONS AND BALANCES Foreign-currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when included in other comprehensive income as the effective portion of qualifying cash flow hedges and qualifying net investment hedges. TRANSLATION OF FINANCIAL STATEMENTS OF SUBSIDIARIES The financial statements of foreign subsidiaries whose functional currency is not the euro are translated into euros as follows: ● assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; ● income and expenses for each income statement presented are translated at average exchange rates, with this average representing a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates (except in the event of significant exchange rate fluctuations). All resulting exchange differences are recognised in other comprehensive income in a separate line. Goodwill arising on the acquisition of a foreign entity is recognised in the entity’s functional currency and translated into euros at the closing rate. Business combinations Business combinations which occurred between 1 January 2004 and 31 December 2009 were recognised in accordance with the requirements of the previous version of IFRS 3. Since 1 January 2010, business combinations have been recognised based on the requirements of the revised version of IFRS 3 (IFRS 3R). In accordance with IFRS 3R, when an entity over which the Group exercises exclusive control is consolidated for the first time: ● the identifiable assets acquired and liabilities assumed are measured at fair value on the date when control is transferred to the Group. When the Group acquires a business, it assesses the assets and liabilities (including client contracts and portfolios) for appropriate classification and designation ● any non-controlling interest in the acquiree is recognised on an acquisition-by-acquisition basis, either at fair value or at the non- controlling interest’s proportionate share of the recognised amounts of the identifiable net assets of the acquiree.

FULLY-CONSOLIDATED SUBSIDIARIES Companies over which the Group exercises control are consolidated. IFRS 10 has introduced a single model of control based on three criteria: “an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee”. Previously, control was defined in IAS 27 as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Assets, liabilities, income and expenses of consolidated subsidiaries are included in the consolidated financial statements from the date on which control is transferred to the Group until the date the Group ceases to control the subsidiary. All inter-company transactions and balances are eliminated on consolidation. Non-controlling interests are presented separately in the financial statements. JOINT VENTURES AND JOINT OPERATIONS Joint arrangements are classified into two types: joint ventures and joint operations. The Group determines the type of joint arrangement in which it is involved by considering its rights and obligations in the arrangement, assessed based on the structure and legal form of the arrangement, the contractual terms agreed to by the parties to the arrangement and, when relevant, other facts and circumstances. A joint venture is a joint arrangement whereby the parties with joint control (“joint venturers”) have rights to the net assets of the arrangement. A joint operation is a joint arrangement whereby the parties with joint control (“joint operators”) have rights to the assets and obligations for the liabilities of the arrangement. Joint arrangements that qualify as joint ventures are accounted for using the equity method (equity-accounted investees). For joint operations, each of the joint operators must recognise the assets and the liabilities (and income and expenses) relating to its interest in the joint operation. Translation of foreign companies’ financial statements and foreign-currency denominated transactions FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates, i.e. in which the entity mainly generates and expends cash. This currency is called the “functional currency”. The consolidated financial statements are presented in euros, which is the Group’s presentation currency.

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ASSYSTEM

FINANCIAL REPORT 2015