EXEL Industries // 2020 Universal registration document

Consolidated fi nancial statements Notes to the consolidated fi nancial statements

The reasonably certain term of leases is determined by the department that signed the lease and is reviewed at the close of each accounting period. In Pro fi t and loss, a depreciation expense for the right to use the asset is recorded in operating margin and a fi nancial expense relating to interest on the lease liability is presented in net fi nancial income/ (expense). The Group has chosen to adopt the exemptions provided for by IFRS 16, which allow it to continue to record rents for leases with a term of 12 months or less and leases relating to low-value assets on a straight-line basis in Pro fi t and loss over the lease term. In accordance with IAS 37, provisions are recognized based on case-by-case assessments of the corresponding contingencies and expenses. A provision is recorded whenever Group corporate governance bodies are made aware of a legal or constructive obligation resulting from a past event when it is probable that it will result in an outflow of resources with no inflow of resources representing an equivalent amount expected in return. Provisions are broken down between current and non-current liabilities according to the expected term to maturity of the risk. The provisions with a term to maturity of more than one year are discounted when their impact is material. In cases where it is not probable that an obligation will result in the out fl ow of resources to be settled or because its amount cannot be measured with su ffi cient reliability, it is recognized by the Group o ff - balance sheet as a contingent liability. Contingent liabilities are reported in the notes unless the probability of an out fl ow of resources is very low. Contingent assets are reported in the notes where an in fl ow of economic bene fi ts is probable. 1.15 Provisions, contingent assets and contingent liabilities Provisions are recorded in the balance sheet for liabilities arising from de fi ned bene fi t plans. These liabilities are calculated using the projected unit credit method based on actuarial valuations performed at the end of the fi scal year. Actuarial assumptions used to calculate these liabilities vary according to the economic conditions of the country in which the plan applies. Each plan is accounted for separately. The Group makes use of the services of an outside entity to partially cover its bene fi t liabilities. The provision recorded in the consolidated fi nancial statements corresponds solely to the uncovered portion as well as social charges for the full amount of these bene fi t liabilities. For de fi ned bene fi t plans fi nanced through outside fund managers (pension funds or insurance policies), any positive or negative di ff erence in the fair value of plan assets and the present value of obligations is recognized in the balance sheet as an asset or liability. However, such di ff erences are only recognized as assets when they embody a future economic bene fi t for the Group. Past service costs represent the bene fi ts grantedwhen the Company either adopts a new de fi ned bene fi t plan or modi fi es the level of bene fi ts of the existing plan. When new rights to bene fi ts are vested as of the adoption of the new plan or the change of the existing plan, past service costs are immediately recognized in the income 1.16 Pensions and similar liabilities (see note 13.3)

statement. Conversely, when the adoption of a new plan or a change in the existing plan results in the vesting of rights subsequent to the date the plan is established, past service costs are expensed on a straight-line basis over the average remaining period for the corresponding rights to be fully vested. Actuarial gains and losses result from changes in actuarial assumptions and adjustments related to experience (di ff erences between actuarial assumptions and assumptions based on actual experience). Actuarial gains and losses are recognized directly in equity and in consequence have no impact on the income statement. For defined benefit plans, the expenses recognized in operating income include service costs, the amortization of past service costs, the discounting costs as well as the e ff ects of any plan curtailment or settlement. 1.17 Use of estimates To prepare consolidated fi nancial statements in compliance with the rules provided for under IFRS, Group Management makes a certain number of estimates and adopts certain assumptions that may have an impact on the amounts disclosed under assets and liabilities. These include amounts for depreciation, amortization and provisions, information on contingent assets and liabilities on the closing date of the consolidated fi nancial statements and amounts recognized under income and expenses for the fi scal year. These estimates are based on the assumption of going concern and include assumptions that Management considers relevant and feasible in the Group’s operating environment and based on feedback available. Estimates and assumptions are reviewed on a regular basis and at a minimum at the end of each fi scal year. They may vary if the circumstances on which theywere based change or new information becomes available. Actual results may di ff er from these estimates. The main estimates made by the Group when preparing the fi nancial statements concern notably assumptions adopted for calculating deferred taxes, the valuation of intangible assets, the impairment of current assets and current and non-current provisions. 1.18 Segment information The main business activity of EXEL Industries group is precision spraying, for agriculture and industry. The Group also competes in the consumerwatering products market and in sugar beet harvesters. Treasury shares In accordance with IAS 32, treasury shares (own equity instruments) held by the Group through the share repurchase program in connection with the liquidity agreement are recorded at acquisition cost and deducted from equity. Proceeds from the disposal of treasury shares are recognized under equity, net of income tax, and are not included under income in the fi scal year. Derivative fi nancial instruments In the fi scal year, the Group has on occasion made use of interest rate or foreign exchange hedges to reduce its exposures. The Group did not hold any derivative fi nancial instruments at the close of the fi scal year. 1.19 Financial instruments

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EXEL Industries group I 2020 Universal Registration Document

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