DERICHEBOURG - Universal registration document 2019-2020

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Financial statements Consolidated financial statements for the year ended September 30, 2020, in compliance with IFRS Accounting policies, rules and methods

Interest rate and foreign exchange derivatives used by the Group to hedge changes in its debt denominatedin foreign currenciesqualify as hedges in accordancewith IFRS 9because: the hedgingrelationshipis clearly definedand documentedfrom the p date of implementation; the efficiency of the hedging relationship is clearly demonstratedin p the beginningand on a regular basis for as long as it lasts. The applicationof hedge accountinghas the following consequences, the derivative always being measured on the balance sheet at its fair value: for fair value hedges of existingassets or liabilities, the change in fair p value of the derivative is recognized in the income statement. This change is offset in the income statement by re-measuring the hedged item on the balance sheet. Any differencebetween the two changes in value represents the inefficiency of the hedging relationship; for hedges of future cash flows, the “efficient” portion of the p change in fair value of the hedging instrument is recognizeddirectly in shareholders’equity in a specific reserve account, and the portion

of the change in fair value considered“inefficient”is recognized in the income statement. The amounts recognized in the reserve account are entered in the income statementonce the hedged cash flows are recognized; for hedges covering net investments in a foreign country, the p “efficient” portion of the changes in fair value of the derivative instrument is recognized in shareholders’equity under the heading “translation reserve” and the portion considered “inefficient” is recognized in the income statement. The profit or loss on the derivative that was recognized in the translation reserve must be transferred to the income statement in the event of the sale of the foreignentity that was the subject of the initial investment. As part of its trading business in non-ferrousmetals, the Group uses forwardpurchaseand sale agreementsconcludedon the LondonMetal Exchange (LME) in order to reduce its exposure to the risk of fluctuations in non-ferrous metal prices (copper, aluminum, nickel). Changes in the fair value of the derivative instruments (forward purchases and sales of metals on the LME) are recognized in the incomestatement.

Financial instrument

Subsequent valuation method Recognition of the change in value

Equity interests

Fair value

In shareholders’ equity, unless the impairment observed is long-term, in which case it would be recognized in the income statement via an impairment

Marketable securities Loans and receivables

Fair value

On the income statement On the income statement

Amortized cost Amortized cost Amortized cost

Financial debt Other liabilities

Held-for-saleand discontinued operations 2.3.20 Assets and liabilities classified as held for sale are measured at the lower of their carryingvalue or their fair value less selling costs. The profit (loss) from discontinuedoperationsis recordedon a separate line of the incomestatement. A discontinuedoperationis a componentof an entitythat eitherhas been disposed ofo, r is classifiedas heldfor sale,and: representsa separatemajor line of business or geographicalarea of p operations; is part of a single coordinatedplan to dispose of a separate major p

Othernon-recurringexpenses andincome 2.3.21 Other non-recurring expenses and income" includes income items which, due to their nature, amountor frequency,cannot be considered as part of the Group's non-recurringactivities and operational profit. This relates in particular to impairment of goodwill. It also includes, if material, the effects of certain unusual transactions such as restructuring costs, expenses related to litigation, or any other non-recurringincome or expenses that may affect the comparabilityof recurringoperatingprofit fromone year to the next.

line of businessor geographicalarea of operations; or is a subsidiaryacquiredexclusivelyto be sold. p

DERICHEBOURG p 2019/2020 Universal Registration Document 149