BIC - 2019 Universal Registration Document

FINANCIAL STATEMENTS

Consolidated financial statements

NOTE 3

EXCHANGE RATES OF FOREIGN CURRENCIES

Accounting policies The individual financial statements of each Group entity are presented in the currency of the primary economic environment in ● which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the result and financial position of each entity are expressed in a common currency, the Euro, which is the functional currency of SOCIÉTÉ BIC as well as the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency ● are recorded at the rate of exchange prevailing on the date of the transaction. At each closing date, monetary items denominated in foreign currencies are translated at the closing rate. Non-monetary items that are measured in terms of historical cost are translated using the exchange rate at the transaction date. Non-monetary items that are measured at fair value are translated using the exchange rates prevailing at the date of the measurement. Exchange differences arising from the settlement of monetary items, and on the translation of monetary items, are recognized in ● profit or loss for the period. In order to hedge its exposure to certain foreign exchange risk, the Group enters into forward contracts and options (see Note 24 ● for details of the Group’s accounting policies regarding derivative financial instruments). For the purpose of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are ● converted into euros using the exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized as a separate line item in equity and under the Group’s translation reserve. Such translation differences are recognized in profit or loss in the period in which the foreign operation is disposed of.

The following table shows foreign currency equivalents of one euro (for instance: average 2019 is 1 euro = 1.12 U.S. dollar).

Foreign currency

Average 2018

Average 2019 December 31, 2018 December 31, 2019

Euro 1.18 1.58 1.53 1.15 7.80 0.88 9.26

Euro 1.12 1.61 1.49 1.11 7.73 0.88 8.77

Euro 1.15 1.62 1.56 1.13 7.88 0.89 8.97

Euro 1.12 1.60 1.46 1.09 7.82 0.85 8.75

U.S. dollar – USD

Australian dollar – AUD Canadian dollar – CAD

Swiss franc – CHF

Chinese renminbi – CNY

British pound – GBP

Hong Kong dollar – HKD

Indian rupee – INR Japanese yen – JPY Korean won – KRW

80.71

78.83

79.73

80.19

130.34

121.99

125.85

121.94

1,298.82

1,304.70

1,278.00

1,296.28

Malaysian ringgit – MYR New Zealand dollar – NZD Philippine peso – PHP Polish zloty – PLN Swedish krona – SEK Kenyan shilling - KES Nigerian naira - NGN South African rand – ZAR Argentinian peso – ARS Brazilian real – BRL Mexican peso – MXN Ukrainian hryvnia – UAH

4.76 1.71

4.64 1.70

4.73 1.71

4.60 1.67

62.22

57.98

60.11

56.90

4.26

4.30

4.30

4.26

10.26

10.59

10.25

10.45

119.89

114.35 354.01

116.50

113.91 409.70

-

-

15.60 43.13

16.16 55.01

16.46 43.13

15.78 67.27

4.31

4.41

4.44

4.52

22.73 32.09 74.02

21.55 28.94 72.42

22.49 31.74 79.72

21.22 26.62 69.96

Russian ruble – RUB

To date, we do not see any significant impact attributable to Brexit. The British subsidiary of the BIC Group, BIC UK, has been importing most of its products from BIC factories located in the Euro zone for years and is invoiced in euros by these entities. The fluctuation of the exchange rate of the British pound against the euro is fully integrated into our foreign exchange risk management processes.

The exposure of our British perimeter amounts 16.1 million euros as of December 31, 2019. As of December 31, 2019, Argentina is still considered a “hyperinflationary” country. As a result, the Group continues to apply IAS 29.

197

• BIC GROUP - 2019 UNIVERSAL REGISTRATION DOCUMENT •