DERICHEBOURG - Universal registration document 2018-2019

4

Financial statements Consolidated financial statements for the year ended September 30, 2019, in compliance with IFRS Accounting policies, rules and methods

and depreciated over their useful lives, with the corresponding debt being recognized as a liability. The rental payments under the lease are divided between financial expenses and reduction of the debt related to the lease in such a way as to obtain a constant rate of interest on the balance of the debt remaining due. Rental agreements which do not have the characteristics of finance leases are treated as simple operating leases and only the rental payments are charged to income throughout the entire term of the agreement. Investments in associates and joint ventures 2.3.10 The Group’s equity investments accounted for using the equity method are initially recognized at acquisition cost including any goodwill arising, where applicable. Subsequently, their carrying amount is increased or decreased to take into account the Group’s share of profits or losses made after the acquisition date. When the losses are greater than the value of the Group’s net investment in the entity, they are recognized only if the Group has a contractual commitment to recapitalize the entity or has made payments on its behalf. If there is any indication of impairment, the recoverable amount of the investments consolidated using the equity method is tested in accordance with the methods described in the note on impairment of non-current assets, other than financial assets. Other non-current financial assets 2.3.11 This category includes receivables related to equity investments, loans and receivables and assets available for sale (mainly investment securities). In accordance with IFRS 9 “Financial Instruments”, equity interests in non-consolidated companies are considered by their nature to be assets available for sale and as such are recognized at their fair value. Where the shares are listed, the fair value is the price quoted on the stock market. If the fair value cannot be determined reliably, the shares are recognized at cost price. Changes in fair value are recognized directly in shareholders’ equity in an account created for this purpose. Where there is an objective indication of impairment, an irreversible provision for impairment is recognized in the income statement. This provision may be reversed only when the relevant shares are sold. Loans are recognized at amortized cost. An impairment provision may be recognized if there is an objective indication of such impairment. The amount corresponding to the difference between the net carrying amount and the recoverable amount is recognized in the income statement. It may be reversed if the recoverable amount increases subsequently. Inventory and work in progress 2.3.12 Inventories of raw materials and goods purchased for resale are recognized using the weighted average cost method. The work in progress and finished goods of Environmental Services are valued at cost price, including the cost of materials and labor and other costs directly related to production. At each closing date, inventories are valued at the lower of cost or net realizable value.

Impairment of non-current assets other than 2.3.6 financial non-current assets Goodwill, intangible assets and property, plant and equipment are subjected to impairment testing in certain circumstances: for non-current assets whose useful life is indefinite (as in the case of p goodwill), impairment testing is carried out at least once per year, and any time there is an indicator of impairment; for other non-current assets, testing is only carried out when there is p an indicator of impairment. Assets subjected to impairment tests are grouped into cash generating units (CGUs) which are groupings of similar assets whose utilization generates identifiable cash flows. When the recoverable amount of a CGU is less than its net carrying amount, an impairment provision is recognized against operating income. The recoverable amount of the CGU is the higher of the fair value less the costs to sell and the value in use. The value in use is determined by discounting the future cash flows likely to arise from an asset or a CGU. These future cash flows are estimated over a period of five years. Beyond that period, cash flows are extrapolated by applying a growth rate to infinity. The CGUs defined by the Group relate to the following businesses: Environmental Services p Business Services. p These impairment tests are conducted annually at September 30. Property, plant and equipment 2.3.7 Property, plant and equipment are recognized at their acquisition or production cost, reduced by the cumulative depreciation and any potential impairment provisions. Depreciation charges are normally applied on a straight line basis over the useful life of the asset; nevertheless, accelerated depreciation may be used where it appears more appropriate for the conditions in which the equipment is used. The useful lives generally applied are as follows:

Buildings

10 to 30 years 3 to 10 years 5 to 10 years

Equipment and technical installation

Airport equipment

Other tangible assets 4 to 10 years Maintenance and repair costs are charged to income, with the exception of those incurred to increase productivity or prolong the useful life of an asset. Investment grants 2.3.8 Investment grants are treated as deferred income. They are brought into income over the estimated useful life of the asset concerned.

Finance leases 2.3.9

Assets acquired under finance leases are recognized as property, plant and equipment when the lease agreements effectively transfer to the Group almost all the risks and benefits of ownership of these assets. They are recognized as assets at cost price at the date of acquisition

DERICHEBOURG p 2018/2019 Universal Registration Document 131