EXEL Industries // 2020 Universal registration document

Consolidated fi nancial statements Notes to the consolidated fi nancial statements

Goodwill determined on the basis of a fair value measurement of iNTEC SAMES KREMLIN was recognized in the amount of €25.0 million. In accordance with IFRS 3, the Group continues to fully assess the assets acquired and liabilities assumed within 12 months from the acquisition date. The highly uncertain macroeconomic environment has led us to increase the general level of risk taken into account in our asset impairment testing. This resulted in the impairment of €26.3 million of Agricultural Spraying goodwill, recognized as a non-recurring expense in our fi nancial statements for the year ended September 30, 2020. Parameters used in impairment tests: All the tests were carried out using the following principal assumptions for fi scal year 2020:  the perpetual growth rate used from the sixth year is 1.7% (1.7% in 2019);  the discount rate is 9.0% (8.3% in 2019);

The discount rate used for the impairment tests corresponds to the weighted average cost of capital (WACC) estimated on a date close to the closing date. The WACC is calculated on the basis of target indebtedness of 25% of equity and a risk-free interest rate of 0.02% (average ten-year French government bond rate). The growth rate is assessed in accordance with the IMF’s in fl ation forecasts weighted for each geographical area. The cash fl ows used are established according to past performance and anticipated changes, at the date these projections are prepared. Goodwill related to foreign companies is recognized in the functional currency of the acquired entity and converted at the year-end closing exchange rate. On September 30, 2020 the Group performed a sensitivity analysis on the perpetual growth assumptions and the discount rate by applying an increase of 100 bps to the discount rate or a reduction of 50 bps to the perpetual growth rate. This analysis does not show a risk of additional loss in value for fi scal year 2020.

3.2

Analysis of goodwill by cash-generating unit (CGU)

(Net carrying value)

5

09/30/2019

09/30/2020

(in € thousands)

Agricultural Spraying CGU

-

26,620

Sugar Beet Harvesters CGU

-

-

Garden Watering and Spraying CGU

33,150

33,715

Industrial Spraying CGU

29,865

4,857

TOTAL

63,015

65,192

Note 4 Intangible assets

09/30/2019

09/30/2020

Net

Gross Amortized Impairment

Net

(in € thousands)

Patents, trademarks, licenses and software

32,686

(17,861)

-

14,825

12,715

Other intangible assets

18,462

(2,105)

-

16,356

31

TOTAL

51,148

(19,966)

-

31,182

12,746

The gross change in intangible assets is attributable in the amount of €18.3 million to the inclusion of iNTEC SAMES KREMLIN GmbH in the scope of consolidation.

EXEL Industries group I 2020 Universal Registration Document

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