FFP_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS

Consolidated financial statements

those assets. They are remeasured at the period-end exchange rate at each balance sheet date. Exchange differences relating to assets are taken to reserves. Exchange differences on borrowings and renewable notes are taken to income. The financial statements of group companies whose operational currency is not the euro are translated at the period-end exchange rate for balance-sheet items, and at the average rate of the period for income-statement items. The difference between the opening and closing balance sheet, and the difference resulting from the application of those exchange rates, are taken to “exchange differences” under consolidated reserves. USE OF ESTIMATES Preparing financial statements in accordance with IFRSs requires management to make estimates and assumptions in order to determine the amounts of certain assets, liabilities, income and expense items, as well as certain information disclosed in the notes to the financial statements. The main financial statement items that depend on estimates or judgment are securities in companies accounted for under the equity method and unlisted available-for-sale securities. INTANGIBLE ASSETS Intangible assets consist of purchased software. Software is recognised at purchase cost and amortised over its estimated useful life of 1 year. No goodwill is currently recognised on fully consolidated subsidiaries. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of an investment property and assets mainly relating to the winemaking business. A. Investment property This is an office and warehouse building that is let to a tenant. It is measured at fair value, and differences in value between one balance sheet date and the next are taken to income for the period. Fair value is determined annually by an independent appraiser, based on market conditions, the quality of the building, its location, floorspace, use and rental status. B. Other property, plant and equipment Other property, plant and equipment mainly consist of the vines, buildings and equipment used in the winemaking business. The vines were measured at their fair value at the time FFP bought shares in SCA Château Guiraud in 2006. Measurement criteria are monitored periodically. The remaining property, plant and equipment, including planting costs that are regarded as land development costs, are recognised at cost (purchase price plus directly related costs). 1.3 1.4 1.5

Depreciation is calculated on a straight-line basis over the useful lives of assets. The main useful lives used are as follows: O vineyards: 25 years O buildings: 10-50 years

O plant and equipment: 4-10 years O computer equipment: 3-4 years O office furniture: 10 years O fixtures and fittings: 10 years

1.6 FINANCIAL ASSETS AND LIABILITIES The Group classifies its financial assets (excluding investments in associates) in the following categories: O available-for-sale securities, divided between investments in non-consolidated companies and Portfolio Investment Securities; O loans and receivables; O assets measured at fair value through profit and loss, mainly warrants, cash and cash equivalents. The classification depends on the reasons for which the financial assets were acquired. The classification of financial assets is determined at initial recognition. A. Non-current financial assets a. Investments in associates This item comprises investments in associates accounted for under the equity method. MEASUREMENT The Group’s share in the net profit of associates after the acquisition is recognised under consolidated profit, and the Group’s share of changes in equity (with no impact on profit) after the acquisition is recognised directly in equity. The carrying amount of the investment is adjusted to reflect cumulative changes after the acquisition. IMPAIRMENT At each balance sheet date, FFP examines whether there is an objective indication of non-temporary and substantial impairment in each of its investments in associates, such as a material change that has a negative effect on the technological, market, economic or legal environment in which each company operates. If such an indication is found, an impairment test is performed. Where the recoverable amount is lower than the carrying amount, the investment in the associate is impaired. The recoverable amount of the investment is the higher of its fair value less costs to sell and value in use. Value in use may be calculated in several ways: peer-group comparison, discounted estimated future cash flows where FFP has reliable medium-term cash flow projections, and the Company’s net worth.

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FFP

2017 REGISTRATION DOCUMENT