ASSYSTEM_Registration_Document_2017

FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS

The risk relating to this dispute was transferred by Assystem France to Assystem SA on 30 December 2016, with Assystem France paying Assystem SA compensation corresponding to the provisioned amount. As a result, Assystem SA recognised a provision in its 2016 financial statements for the same amount. At 31 December 2017, Assystem SA decided to increase the provision to cover the full amount of the risk and the potential late payment penalties following its receipt in November 2017 of the payment notice for the reassessed amount and in view of the fact that the risk relates to the former GPS division, whose control has now been transferred outside the Group. Consequently, €6.8 million was added to the provision recognised at 31 December 2015 along with €2.1 million for potential late payment penalties, bringing the total provision to €16.1 million at 31 December 2017. A bank guarantee amounting to €13.5 million has been issued to the tax authorities in respect of this dispute.

the event ASG is held liable, this claim would be covered under the Group’s third-party liability insurance policies. TAX AUDIT In late 2014 Assystem SA received notification of a €13.5 million tax reassessment relating to research tax credits recognised by its subsidiary Assystem France for 2010, 2011 and 2012. Assystem considers that this reassessment is based on a general position taken by the French tax authorities which is applicable, with no real grounds, to all of the French companies concerned, and which Assystem is disputing in full. However, in view of the changes in case law in 2015, and based on the opinions of external legal experts, Assystem France set aside a €7.3 million provision in its 2015 financial statements (covering 50% of the amount of the reassessments and €0.5 million in potential legal fees). At 31 December 2016 Assystem had not yet received a payment notice from the tax authorities for the reassessed amount and the valuation of the related risk was unchanged compared with 31 December 2015. Assystem’s parent company financial statements for the year ended 31 December 2017 have been prepared in accordance with French generally accepted accounting principles including the principle of segregation of accounting periods. They are presented on a going concern basis and accounting policies have been applied consistently from one year to the next. Accounting entries are based on the historical cost convention. Fixed assets Intangible assets are carried at cost, excluding financial expenses, which are not capitalised. Property, plant and equipment are stated at cost, corresponding to either purchase cost (including incidental expenses but excluding transaction costs), or production cost. Interest on borrowings specifically used to finance property, plant and equipment is not included in production cost. NOTE 2

BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Depreciation and amortisation is determined on a straight-line basis over the estimated useful lives of the assets concerned as follows:

software patents

1 to 5 years

●

4 years

●

fixtures and fittings

5 to 10 years

●

vehicles

3 to 5 years 3 to 5 years

●

office equipment office furniture

●

5 to 10 years

●

6

buildings

20 years

●

Shares in subsidiaries and affiliates Shares in subsidiaries and affiliates are stated at historical cost or contribution value. Disposals of these shares are measured on the basis of cost price and capital gains or losses are calculated using the carrying amount of the shares sold. At each year-end, the Company calculates the value in use of its shares in subsidiaries and affiliates and recognises a provision for impairment if their value in use is lower than their carrying amount. The Company uses one of the following two methods in order to measure value in use, depending on the type of business carried out by the subsidiary or affiliate: (i) a financial approach (based on projected cash flows or the EBIT multiples method), or (ii) a net asset approach (based on the Company’s share of equity held in the subsidiary or affiliate).

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ASSYSTEM

REGISTRATION DOCUMENT 2017