EXEL industries - 2019 Universal Registration Document

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Consolidated fi nancial statements Notes to the consolidated fi nancial statements

Percentage controlled

Percentage held

Method of consolidation

Name

09/2018

09/2019

ETWorks INC (USA)

100.00% 100.00% 100.00% 100.00%

ET Ag Center (LLC)

100.00%

ETWorks Retail (LLC)

100.00%

Southern Application Management

100.00%

High Plains Apache Sales and Service

100.00%

ETWorks Canada, Ldt

100.00%

FC: Full consolidation – EM: Equity method – NC: not consolidated, now outside scope – NA: not applicable.

Changes in consolidated Group structure The HARDI Group has transferred the activity of its English subsidiary to AGRIFAC UK.

The companies HOZELOCK TRICOFLEX Gmbh and TRICOFLEX Scandinavia AB subsidiary of TRICOFLEX SAS have been dissolved. At the beginning of the fi scal year, ET Works group created a subsidiary in Canada in order to expand its sales network. The companies Southern Application Management and High Plains Apache Sales and Service were absorbed by Ohio Valley Ag which was renamed ET Works Retail, LLC.

Note c 3 Goodwill

3.1

Changes in the fi scal year

09/30/2018

09/30/2019

(in € thousands)

OPENING NET VALUE

64,462

64,390

Changes in consolidated Group structure:

Increases

Decreases

Impairment

Other net changes (foreign exchange e ff ect)

730

CLOSING NET VALUE

65,192

64,462

Over the year ended September c 30, 2019, the impact of foreign exchange rates on the value of goodwill is linked mainly to the fl uctuation of the US dollar.

Parameters used in impairment tests: All tests were carried out using the following principal assumptions for fi scal year 2019: the perpetual rate of growth used from the sixth year is 1.7% (1.8% in 2018); the discount rate is 8.3% (8% in 2018). The discount rate used for the impairment tests corresponds to the weighted average cost of capital (WACC) estimated on a date close to the closing date. The WACC is calculated on the basis of a target indebtedness of 25% of equity and a risk-free interest rate of 0.3% (ten-year French government bond rate). The growth rate is assessed in accordance with the IMF’s long-term in fl ation forecasts weighted for each geographical area.

The cash fl ows used are established according to past performance and anticipated changes, at the date these projections are prepared. Goodwill related to foreign companies is recognized in the functional currency of the acquired entity and converted at the year-end closing exchange rate. On September c 30, 2019, the Group performed a sensitivity analysis on the perpetual growth assumptions and the discount rate by applying an increase of 100 c bps to the discount rate or a reduction of 50 c bps to the perpetual growth rate. This analysis does not show a risk of additional loss in value for fi scal year 2019.

EXEL Industries Group I 2019 Universal Registration Document

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