EXEL industries - 2019 Universal Registration Document

Separate fi nancial statements 5

Notes to the parent company fi nancial statements

Notes to the parent company fi nancial statements

5.3

Accounting principles, rules and methods (Articles c L.123-13 to L.123-21 of the French Commercial Code; ANC Regulation No. c 2016-21)

1. Highlights of the fi scal year: impact of restructuring of the Sugar Beet Harvesters and Agricultural Spraying activities The Sugar Beet Harvesters activity was a ff ected in the fi scal year by the crisis in the sugar industry in Europe which led to the closing of sugar mills in Europe and a reduction in land in cultivation. The EXEL Industries group adjusted its production capacities and reduced its headcount, mainly in Germany. This crisis led to a deterioration in the fi nancial position of the Sugar Beet Harvesters Division. In July c 2019, the EXEL Industries group announced a plan to reorganize its Agricultural Spraying Division, which involves regrouping activities into centers of excellence for production and research. Under this plan, manufacturing sites will be closed in France and Spain and production activities will eventually be brought together into a number of centers of manufacturing excellence: the Belleville (France) and Norre Aslev (Denmark) sites will specialize in trailed and mounted agricultural sprayers; the Epernay site in vineyard and orchard sprayers; the Beaurainville and Fère-Champenoise sites in self-propelled equipment. The annual fi nancial statements of EXEL Industries at September c 30, 2019, take account of the consequences of the ongoing restructuring of the Sugar Beet Harvesters and Agricultural Spraying Divisions: „ additional depreciation, impairment of assets and debt waivers were recognized for a total amount of €36 c million. These expenses were recognized in net exceptional income/(loss).

3. Exceptions provided for by the regulations – Exemptions to accounting instructions It was not necessary to make use of exceptions provided for by regulations to provide a true and fair view of the Company. Use of estimates To prepare annual financial statements in compliance with the generally accepted accounting principles (French GAAP), the Company makes a certain number of estimates and adopts certain assumptions that may have an impact on the amounts disclosed under assets and liabilities. These include amounts recorded under assets and liabilities, information on contingent assets and liabilities on the closing date of the fi nancial statements and amounts recognized under income and expenses for the fi scal year. These estimates are based on the assumption of going concern and include assumptions Management considers relevant and feasible in the Company’s operating environment and based on feedback available. Estimates and assumptions are reviewed on a regular basis and at a minimum at the end of each fi scal year. They may vary if the circumstances on which theywere based change or new information becomes available. Actual results may di ff er from these estimates. The main estimates made by the Company when preparing the financial statements concern notably assumptions adopted for calculations used for the valuation of intangible and intangible assets, equity interests and provisions. 4. 5.1 Intangible assets Intangible assets are recognized at acquisition cost. They are amortized or depreciated in accordance with the following durations: „ patents:............................................................................straight-line 1 to 10 c years; „ trademarks: ............... non-depreciable unless impairment indicated; „ computer software:...................................................straight-line 1 to 5 c years; Property, plant and equipment Tangible fi xed assets are recognized at acquisition cost or production cost. Economic depreciation is calculated over the following estimated useful life of the assets: „ buildings:.........................................straight-line between 10 and 20 c years; „ equipment & tools: ... accelerated method between 3 and 5 c years; „ fi xtures and fi ttings: .....................straight-line between 1 and 10 c years; „ o ffi ce equipment and furniture: ........... straight-line and accelerated method between 3 and 10 c years: 5.2 5. Notes on the balance sheet and income statement

Application of accounting policies and Ƥ basis of presentation

2.

These condensed fi nancial statements of our Company for the fi scal year ended September c 30, 2019 were prepared according to French generally accepted accounting principles (French GAAP). The fi nancial statements are on this basis prepared in accordance with the general principles of conservatism in accordance with the

basic principles of: „ going concern;

„ the time period concept; „ the matching principle; and in accordance with the general rules for the preparation and presentation of annual fi nancial statements. The fi nancial statements for the fi scal year were prepared taking into account the current economic context and on the basis of fi nancial parameters for the market available at the end of the fi scal year. This economic and fi nancial environment is taken into account notably when valuing assets such as marketable securities and valuing long- term assets such as equity securities and receivables on interests. The value of these assets is reassessed at the end of the fiscal year based on the long-term economic outlook and the Company management’s best assessment of future cash fl ows.

EXEL Industries Group I 2019 Universal Registration Document 92