BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

1-2

Change in Group structure

Accounting policies In accordance with Revised IFRS 3 “Business Combinations”, business combinations completed after January 1, 2010 are accounted by using the purchase method. Identifiable assets acquired and liabilities assumed are measured at fair value at the acquisition date and, when appropriate, non-controlling interests in the acquiree are measured at either fair value or at the proportionate part in the fair value of the assets and liabilities of the acquired entity. This option is available on an individual basis for each business combination transaction. Any share previously held in the acquiree before the takeover, should be reassessed at fair value and the corresponding profit or the loss recorded in the income statement. Badwill is recorded immediately in the income statement. When incurred, acquisition costs are recognized immediately as expenses, except those relating to equity instruments (which reduce the Shareholders’ equity amount). Any potential price adjustment is estimated at fair value as of the acquisition date and this initial assessment can only later be adjusted against goodwill in the case of new information related to facts and circumstances existing at the date of acquisition and to the extent that the assessment was still described as provisional (assessment period limited to 12 months); any subsequent adjustments that do not meet these criteria are recorded as a liability or receivable through the Group income statement. Put options granted to non-controlling interests of fully consolidated subsidiaries are considered as financial debt. The value of the debt is estimated using the contract formulas or prices. When utilizing formulas based upon multiples of earnings minus debt, the Group uses the actual profit/loss of the entity in the period and its debt at the closing date of the fiscal year. The Group recorded these put options as a financial debt at the present value of the put exercise price with Group Shareholders’ equity as a counterpart; subsequent changes in debt are treated similarly.

Change in the consolidation scope

On June 6, 2017, BIC Group announced that it had signed an Asset and Share Purchase Agreement to sell its BIC Graphic North America and Asian Sourcing operations to H.I.G. Capital, a global U.S. private equity firm. The closing was effective as of June 30, 2017. The net disposal price amounted to 73.6 million dollars, including 10 million dollars through a six-year subordinated note bearing 7% per annum capitalized interest. Consequently, the subsidiaries BIC Graphic USA Manufacturing Co. Inc. and BIC Advertising and Promotional Products Co. Ltd. exited the Group structure as of December 31, 2017.

NOTE 2

OPERATING SEGMENTS

Accounting policies According to IAS 18, revenue is measured at the fair value of the counterpart received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of commercial discounts and sales-related taxes. Thus, sales of goods are recognized when goods are delivered and titles are transferred.

General information 2-1 BIC Group operating segments have been determined based on the reports regularly provided to the management and used to make strategic decisions. The management considers the business from a product category perspective, knowing that each category can be reviewed for a specific geographic area if necessary. On February 7, 2017, the BIC Group confirmed the strategic alternatives review for BIC Graphic North America and the Asia

sourcing operations. Consequently, in the first half 2017, BIC Graphic is no longer considered as a separate category or reporting segment. The activities of BIC Graphic Europe and Developing Markets are now accounted and presented in the Stationery and Other Products categories. (1) The categories are as follows: Stationery, Lighters, Shavers, Other Products. These operating segments receive their revenues from the production and distribution of each product category.

see Note 2-2 after. (1)

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BIC GROUP - 2017 REGISTRATION DOCUMENT

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