ASSYSTEM_Registration_Document_2017

FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS

The Group applies cash flow hedge accounting when the following conditions are met: ● there is formal designation and documentation of the hedging relationship;

● the hedge is highly effective; and

● the forecast transaction that is the subject of the hedge is highly probable and presents an exposure to variations in cash flows that could ultimately affect profit. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and the ineffective portion is recognised in the income statement. If the hedging instrument expires, or is sold, cancelled or exercised, the gain or loss initially recognised in other comprehensive income continues to be recorded separately in other comprehensive income until the forecast transaction occurs. If the commitment no longer exists or the forecast transaction is no longer expected to occur, any related cumulative gain or loss on the hedging instrument that had been recognised directly in other comprehensive income is reclassified to profit.

CURRENCY DERIVATIVES During 2017 the Group pursued its currency hedging strategy (see Section 5.3 – Liquidity and market risk in Chapter 5 of this Registration Document) by setting up new hedges comprising currency forwards and swaps.

At 31 December 2017 the Group’s currency derivatives had a positive fair value of €0.3 million, which was recorded under “Other current assets” (versus a negative fair value of €0.8 million at 31 December 2016, recorded under “Other short-term debt and current financial liabilities”). The application of hedge accounting to these derivatives resulted in the recognition of a €1.0 million fair value gain in other comprehensive income in 2017.

8.4

Net debt

Cash and debt consist of (i) cash and cash equivalents and non-current and 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.

6

Net debt corresponds to gross debt (bond debt, other long- and short-term debt and current and non-current financial liabilities and derivatives recorded under current and non-current liabilities) less cash and cash equivalents and derivatives recorded under current and non-current assets. Net debt breaks down as follows:

Maturity schedule

At 31 December 2017

Beyond 5 years

2018

2019

2020

2021

2022

In millions of euros Bank borrowings

-

-

-

-

-

Sundry financial liabilities

4.6 4.6

1.0 1.0

0.7 0.7

0.5 0.5

0.5 0.5

0.5 0.5

1.4 1.4

Gross debt

Cash and cash equivalents

28.2

28.2

- -

- -

- -

- -

- -

Derivatives

0.3

0.3

Cash, cash equivalents and derivatives recorded under assets

28.5

28.5

-

-

-

-

-

Net debt

(23.9)

(27.5)

0.7

0.5

0.5

0.5

1.4

The table below shows a breakdown of net debt by currency, converted at the closing rates:

At 31 December 2017

Euro Pound sterling

US dollar Other currencies

In millions of euros

Net debt

(23.9)

(18.8)

(1.9)

(1.4)

(1.8)

127

ASSYSTEM

REGISTRATION DOCUMENT 2017