Read the Registration Document - Guerbet

c) Property, plant and equipmentProperty, plant and equipment are recorded at acquisition cost. Depreciation is calculated on a straight-linebasis over the estimated useful life of these assets:- Buildings: 20 years;- Fixtures, fittings: 10 years;- Machinery and equipment: 5 to 10 years;- Other tangible assets: 5 to 10 years.For all acquisitions until 31 December 1997, and again starting on 1 January 2002, all possibilities offeredby tax regulations concerning accelerated and exceptional depreciation have been used. The varianceresulting from the difference between accelerated and straight-line depreciation is considered as a specialaccelerated tax depreciation.Property, plant and equipment may be written down to reflect their utilisation by Guerbet.d) Investments and non-current assetsInvestments are recorded at cost and depreciated to reflect the share of net equity of subsidiaries after therestatement of their intangible assets.Other non-current assets are recorded at the lower of their cost or their carrying value.e) Inventories and production in progressRaw materials and other supplies are recorded at the opening weighted average price. When the carryingvalue falls below this amount, a provision is recorded for the difference. Provisions are also made forinventories subject to low turnover rates.Production in progress and finished goods are recorded on the basis of production cost which includesdirect and indirect production costs and excludes headquarters, financial or selling expenses. A provisionfor impairment is made when justified by the inventory turnover rate and when there is a risk that productswill not be sold before their expiration dates are reached or sold at a loss.f) Trade receivables and related accountsAccounts receivable are recorded at face value.An allowance for doubtful accounts is recorded when a collection risk exists which is determined on a caseby-casebasis.The company has recourse to the securitisation of receivables. This transaction consists of the assignmentof the trade receivables by the company owed by customers to an entity (specifically created for thispurpose) that finances the acquisition of the receivables by the issuance of securities on capital markets.From an accounting perspective, securitisation corresponds to the assignment of receivables whereby:- Receivables assigned are eliminated from the balance sheet of the assignor;- All costs incurred on the transaction are expensed in the corresponding period.g) Marketable securitiesMarketable securities are recorded at cost. When the carrying value of the securities, determined on thebasis of their estimated market value, i.e. their net asset value on the closing date, is less than theacquisition cost, a provision for impairment is recorded.h) Financial instrumentsWhen interest rate options are acquired, premium is posted to the income statement pro rata over theduration of the contract. Provisions are made for eventual charges resulting from interest rate fluctuations.To manage foreign exchange and interest rate exposure from its industrial and commercial activities, theGroup has recourse to derivatives traded in organised markets. Group policy prohibits trading in suchmarkets on a speculative basis.119