EXEL Industries // 2020 Universal registration document

Separate fi nancial statements 6

Notes to the parent company fi nancial statements

Notes to the parent company fi nancial statements

6.3

Accounting principles, rules and methods (Articles L.123-13 to L.123-21 of the French Commercial Code; ANC Regulation No. 2016-07)

1. Highlights of the fi scal year: impact of restructuring of the Sugar Beet Harvesters and Agricultural Spraying businesses After a di ffi cult year in 2019, the sales of the Sugar Beet Harvesters business stabilized in 2020. The fi nancial position improved this year, bene fi ting from the adjustment of production capacities in Germany, without becoming positive again. The situation of the sugar industry in Europe remains fragile (deterioration in yields, reduction in arable land, low sugar prices). In addition, in July 2019, the EXEL Industries group announced a plan to reorganize its Agricultural Spraying Division, which involves regrouping activities into centers of excellence for production and research. Three industrial sites (in France and Spain) were closed to consolidate production activities in several high-performance skills centers. At the same time, the US business has su ff ered in recent years, resulting in the impairment of assets in the consolidated fi nancial statements. In the end, these two items generated asset impairment in a total amount of €23 million in EXEL Industries’ fi nancial statements. These expenses are recognized in net fi nancial income and net exceptional Income. The Group’s two other businesses had mixed results in 2020: on the one hand, the garden business bene fi ted from favorable weather conditions and the e ff ect of lockdown to increase its sales; on the other hand, the industrial spraying business was affected by the di ffi culties facing the automotive industry. Application of accounting policies The fi nancial statements of our Company for the fi scal year ended on September 30, 2020were prepared in accordancewith the standards, principles and methods applicable in France of ANC Regulation No. 2016-07. The fi nancial statements are on this basis prepared in accordance with the general principles of conservatism in accordance with the 2.  the time period concept;  the consistency principle; and in accordance with the general rules for the preparation and presentation of annual fi nancial statements. The fi nancial statements for the fi scal year were prepared taking into account the current economic context and on the basis of fi nancial parameters for the market available at the end of the fi scal year. This economic and fi nancial environment is taken into account notably when valuing assets such as marketable securities and valuing long- term assets such as equity securities and receivables on interests. The value of these assets is reassessed at the end of the fiscal year based on the long-term economic outlook and the Company management’s best assessment of future cash fl ows. basic principles of:  going concern;

3. Exceptions provided for by the regulations – Exemptions to accounting instructions It was not necessary to make use of exceptions provided for by regulations to provide a true and fair view of the Company. Use of estimates To prepare annual financial statements in compliance with the generally accepted accounting principles (French GAAP), the Company 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 recorded under assets and liabilities, information on contingent assets and liabilities on the closing date of the 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 Management considers relevant and feasible in the Company’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 Company when preparing the financial statements concern notably assumptions adopted for calculations used for the valuation of intangible and intangible assets, equity interests and provisions. 4. 5.1 Intangible assets Intangible assets are recognized at acquisition cost. They are amortized or depreciated in accordance with the following durations:  patents:............................................................................straight-line 1 to 10 years;  trademarks: ...............non-depreciable unless impairment indicated;  computer software:.................................................. straight-line 1 to 5 years; Property, plant and equipment Property, plant and equipment are recognized at acquisition cost or production cost. Economic depreciation is calculated over the following estimated useful life of the assets:  buildings:.........................................straight-line between 10 and 20 years;  equipment & tools: ...accelerated method between 3 and 5 years;  fi xtures and fi ttings: .................... straight-line between 1 and 10 years;  o ffi ce equipment and furniture: ........... straight-line and accelerated method between 3 and 10 years. 5.2 5. Notes on the balance sheet and income statement

EXEL Industries group I 2020 Universal Registration Document

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