Read the Registration Document - Guerbet

i) Translation of foreign currency itemsGuerbet centralises the management of foreign currency exposures of its French subsidiaries.Payables and receivables in foreign currency outside the euro area are converted in each Group companyat year-end exchange rates. Resulting unrealised currency losses and gains are recorded in the balancesheet under translation adjustments. Guerbet’s foreign exchange risk is covered by forward exchangecontracts and currency options and accruals made for currency losses take into account the impact of theseinstruments.The results of transactions in currency options are recorded at the options’ maturity where they covercommercial transactions after the closing date. Premium paid is recorded in the balance sheet under assetsuntil the maturity of the option.j) Regulated provisionsIn compliance with the law, regulated provisions are made for:- Investments (in connection with employee profit-sharing);- Special accelerated tax depreciation.The special accelerated tax depreciation is calculated according to the method explained in b) and c) forintangible and tangible assets.k) Provisions for contingencies and expensesProvisions for contingencies and expenses correspond to liabilities that meet the following criteria:- Uncertain timing or amount;- With a negative economic impact for the company defined as an obligation to a third party resultingin a probable or certain outflow from the company of resources embodying economic benefits tosettle the obligation, without receiving in exchange resources of a value at least equivalent to thelatter.l) Retirement obligationsObligations in connection with retirement severance benefits are recorded under provisions forcontingencies and expenses. For defined contribution plans concerning post-employment benefits, costsare estimated according to the method of the projected unit credit method.This method is based on benefits payable to employees on their expected date of retirement taking intoaccount the age pyramid, rate of employee turnover, mortality rates on the basis of actuarial tables by agebracket. The amounts are revalued according to assumptions concerning inflation and promotions anddiscounted in respect to the date benefits will actually be paid.When the assumptions on which calculations are based are revised, actuarial gains and losses arerecorded under income. All plans are remeasured once year.m) Revenue recognitionRevenue is recognised when significant risks and rewards incident to ownership have been transferred tothe buyer.n) Investment grantsAccording to the option available the under French GAAP (plan comptable général), investment grants thatfinance a depreciable asset are recovered over the same period and at the same rate as the depreciation ofthe value of the acquisition acquired or created through this grant.120