Assystem - 2015 Registration Document

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Revenue recognition Revenue corresponds to the gross inflows of economic benefits received or receivable by the Group during the period on its own account which arise from ordinary operating activities and result in increases in equity. The applicable standards require that revenue be measured at the fair value of the consideration received or receivable. In most cases, the consideration is in the form of cash or cash equivalents and the amount of revenue is the amount of cash or cash equivalents received or receivable. The Group recognises its revenue in the period in which the services are rendered. Revenue for the Group comprises: ● the valuation at cost price of services for which the Group has undertaken works and for which it is certain that it will receive an order from the client; and ● commissions on business for which the Group acts as an agent. Depending on the type of transaction involved, the criteria for determining the stage of completion of services rendered can at a given date include: ● services performed to date as a percentage of total services to be performed; or ● the proportion that costs incurred to date bear to the estimated total costs of the transaction. The criteria applied are left to the discretion of the operating unit’s manager who chooses those that are best suited to the project. The Group’s services are valued based on the following: ● time and materials contracts: the valuation of services rendered under these contracts depends on the resources used. Revenue is determined on a time-spent basis, agreed on with the client, and corresponding to an aggregate resulting from the multiplication of an hourly or daily rate. ● fixed-price contracts: services rendered under these contracts are valued based on the percentage of completion method as defined in IAS 11 ● provisions for losses on completion: a provision is recognised when it is probable that contract costs will exceed contract revenue. The amount of the provision is calculated by reference to the stage of completion less the loss already recognised, and it is recorded under “Depreciation, amortisation and provisions for recurring operating items, net”. Government grants and tax credits Government grants are recognised in the income statement on a systematic basis over the periods necessary to match them with the costs that they are intended to compensate. They are recognised either: ● as a deduction from the corresponding expense if the grant is intended to compensate an identified cost, or ● as a decrease in other operating expenses if the grant is for general purposes. Tax credits relating to operating expenses (research tax credits, etc.) are recognised in operating profit as a deduction from the expenses to which they relate, using the same accounting treatment as for government grants. ● invoices issued or to be issued for services rendered; ● surveys of work performed;

Operating profit before non-recurring items (EBITA)/ Operating profit A new sub-total called “EBITA including share of profit of equity-accounted investees” has been added to the income statement in 2015, which corresponds to the aggregate of “Operating profit before non-recurring items (EBITA)” and “Share of profit of equity-accounted investees”. Operating profit before non-recurring items (EBITA) corresponds to operating profit before: ● share-based payment expense (performance shares/free shares and stock options); ● acquisition- and divestment-related expenses (external fees associated with external growth transactions and divestments); ● income and expenses related to unusual, atypical and infrequent events, mainly comprising restructuring costs, asset impairment losses (including goodwill impairment), and other material income and expenses. ● capital gains or losses arising on business divestments; Net financial income (expense) on cash and debt and other financial income and expenses Net financial income (expense) on cash and debt (hereinafter “Finance costs, net”) corresponds to all income and expenses arising during the period on items making up net debt, including gains and losses on interest rate and currency hedges on debt. Cash and debt consist of (i) cash and cash equivalents and current and non-current derivatives (included in other financial assets) on the assets side of the statement of financial position, and (ii) bond debt, other debt and financial liabilities, and the fair value of derivatives on the liabilities side. Changes in the fair value of the above-mentioned categories of financial assets and liabilities are not included in “Finance costs, net” and instead are recognised in “Other financial income and expenses”. “Other financial income and expenses” corresponds to income and expenses that are non-operational ( e.g. financial income arising from the main business of the Company, a subsidiary or a division and associated with a commercial activity) and which are not included in “Finance costs, net”. They consist mainly of dividends from non-consolidated companies, impairment of AFS financial assets, gains and losses on the disposal of AFS financial assets, impairment and losses on disposals of other current and non-current financial assets, the effect of discounting provisions, changes in the fair value of financial assets and liabilities, foreign exchange gains and losses on operating assets and liabilities, and miscellaneous financial income and expenses. Basic earnings per share and diluted earnings per share Basic earnings per share is calculated by dividing profit for the period attributable to owners of the parent (after deducting coupons on the Odirnane bonds – see below) by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by adjusting (i) profit for the period attributable to owners of the parent for the impact of all dilutive potential ordinary shares, net of the related tax, and (ii) the weighted

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ASSYSTEM

FINANCIAL REPORT 2015