BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

NOTE 1

MAIN RULES AND ACCOUNTING POLICIES

Approval of the financial statements The BIC Group’s consolidated financial statements for FY 2017 were been approved by the Board of Directors’ Meeting of February 13, 2018 and are submitted for approval to the Annual Shareholders’ Meeting to be held on May 16, 2018.

Standards, interpretations and amendments with mandatory application after 2017 and adopted by the European Union In 2017, the Group did not elect to early apply any standard, interpretation or amendment approved by the European Union, particularly regarding: IFRS 9 – Financial instruments. ● According to the analysis made by the Group, the implementation of this standard will have the following main impacts on the financial statements: Impairment of financial assets (particularly trade receivables) • will be based on expected credit losses (instead of observed), starting as from initial recognition, The additional amount of provision to record will be booked through Shareholders’ equity at the transition date. However, the Group does not expect a significant impact at the transition, BIC will apply IFRS 9 for hedge accounting. Therefore, for option • and forward contracts documented in hedge accounting, the fair value change in: the time value component of options, and • the forward points • will be recorded through OCI. These amounts will be recycled in financial income when the hedged item is recorded. The estimation of the impact at the transition is -3.3 million euros. This adjustment will be booked in Shareholders’ equity at the transition date and will not have any impact on the total Shareholders' equity; IFRS 15 – Revenue from Contracts with Customers and ● Amendments to IFRS 15 – Clarification. In May 2014, the IASB released IFRS 15 with the FASB (Financial Accounting Standards Board). IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. It will supersede the following revenue Standards and Interpretations upon its effective date as of January 1, 2018: IAS 18 – Revenue; IAS 11 – Construction Contracts; IFRIC 13 – Customer Loyalty Programmes; IFRIC 15 – Agreements for the Construction of Real Estate; IFRIC 18 – Transfers of Assets from Customers; and SIC 31 – Revenue – Barter Transactions Involving Advertising Services. The objective of IFRS 15 is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is presented in a five-step model framework: Identify the contract(s) with a customer, •

1-1

Accounting policies

General policies 1-1-1 Pursuant to European regulation (EC) no. 1606/2002 of July 19, 2002 on international accounting standards, the consolidated financial statements of the BIC Group have been prepared in accordance with accounting principles as defined by the International Accounting Standards Board (IASB) as adopted by the European Union as of December 31, 2017. The international standards include the IFRS (International Financial Reporting Standards), the IAS (International Accounting Standards), as well as their SIC (Standing Interpretations Committee) and IFRIC (International Financial Reporting Interpretations Committee) interpretations. At the end of the year, there were no differences between the reference standards used and the standards adopted by the IASB, whose application is mandatory for the period presented. The financial statements have been prepared on a historical cost basis, except for the valuation of certain financial instruments. The main accounting policies remain unchanged compared to the prior year, except for the following policies, effective since January 1, 2017. The following standards and amendments are effective since January 1, 2017 and have been applied to the consolidated financial statements for the period ended December 31, 2017: Amendments to IAS 7 – Disclosure initiative; ● Amendments to IAS 12 – Recognition of deferred tax assets for ● unrealized losses; Annual improvements - 2014-2016 cycle: ● IFRS 1 – First-time Adoption of International Financial • Reporting Standards, IFRS 12 – Disclosure of Interests in Other Entities. • Adoption of new and revised IFRS, 1-1-2 interpretations and amendments Standards, interpretations and amendments effective for periods starting January 1, 2017

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BIC GROUP - 2017 REGISTRATION DOCUMENT