BIC_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Consolidated financial statements

Tax and social risks and litigation

Product liability

Other risks and charges

Litigation

Total

(in thousand euros)

At January 1, 2016

29,377

6,855

2,019

3,275 1,630 (629) (673)

41,526

Additional provisions

6,366

3,398

236

11,631 (6,106) (10,658)

Reversals of provisions utilized

(2,221) (7,250)

(2,948) (1,835)

(309) (899)

Reversals of provisions not utilized

Exchange differences

648

394

28

18

1,088

Transfers to non-current liabilities held for sale

(1,360) 25,560

(387)

-

(174)

(1,921) 35,560

At December 31, 2016

5,477

1,075

3,447

As of December 31, 2017, it was not deemed necessary to book provisions for the risks described in Part 1 Group Presentation that could affect: the Company’s personnel, assets, environment or reputation; ● the Group’s ability to reach its objectives and abide by its values, ● ethics or the laws and regulations. Tax and social risks and litigation Provisions for tax and social risks and litigation relate mainly to: tax risks; ● U.S. workers’ compensation. ● Tax audits are carried out regularly by local tax authorities which may dispute positions taken by Group subsidiaries. In accordance

with the Group’s accounting policies, it may be decided to record provisions when tax-related risks are considered likely to generate a payment to local tax authorities. The Group reviews the evaluation of all its tax positions on a regular basis, using external counsels and considers that its tax positions are adequately provided for. However, the Group cannot predict the ultimate outcome of future audits. Litigation As of December 31, 2017, the litigation provision mainly represents distributor and commercial agent risks for 1.9 million euros (2.2 million euros at December 31, 2016). Product liability Product liability mainly relates to the U.S.

PENSION AND OTHER EMPLOYEE BENEFITS NOTE 18

Accounting policies Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit plans are dealt with as payments to defined contribution plans where the Group’s obligation under these plans are equivalent to those arising in defined contribution retirement benefit plans. For defined benefit retirement plans, the amount of provision is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. All actuarial differences are recognized in other comprehensive income in the period in which they occur. Past service costs are recognized for their full amount as a component of cost of services (in the income statement), whether benefits are vested definitively to their beneficiaries or are being acquired. The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation reduced by the fair value of plan assets. Any net asset resulting from this calculation is limited to the present value of available refunds and reduction in future contributions to the plan.

196

BIC GROUP - 2017 REGISTRATION DOCUMENT