LEGRAND_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL INFORMATION CONCERNING THE GROUP’S ASSETS, LIABILITIES, FINANCIAL POSITION AND RESULTS Consolidated financial statements in accordance with IFRS for the years ended December 31, 2017 and December 31, 2016

The following impairment testing parameters were used in the period ended December 31, 2016:

Value in use

Carrying amount of trademarks with indefinite useful lives

Discount rate (before tax)

Growth rate to perpetuity

Recoverable amount

(in € millions)

Value in use

1,408.0

9.2 to 10.0%

2.9 to 3.1%

No impairment was recognized in the period ended December 31, 2016.

3.1.2 Patents Patents can be analyzed as follows:

December 31, 2017

December 31, 2016

(in € millions)

Gross value at the beginning of the period

619.5

591.2

W Acquisitions

67.1

25.1

W Disposals

0.0

0.0

W Translation adjustments

(13.7)

3.2

Gross value at the end of the period

672.9

619.5

Accumulated amortization and impairment at the beginning of the period

(594.7)

(589.2)

W Amortization expense

(5.6)

(2.7)

W Reversals

0.0

0.0

W Translation adjustments

9.1

(2.8)

Accumulated amortization and impairment at the end of the period

(591.2)

(594.7)

NET VALUE AT THE END OF THE PERIOD

81.7

24.8

To date, no impairment has been recognized for these patents.

3.1.3 Other intangible assets Other intangible assets are recognized at cost less accumulated amortization and impairment. They include in particular: W costs incurred for development projects (relating to the design and testing of new or improved products). They are amortized from the date of sale of the product on a straight-line basis over the period in which the asset’s future economic benefits are consumed, not exceeding 10 years. Costs incurred for projects that do not meet the IAS 38 definition of an intangible asset

are recorded in research and development costs for the year in which they are incurred; W software, which is generally purchased from an external supplier and amortized over 3 years; W customer relationships acquired in business combinations. Corresponding to contractual relationships with key customers, they are measured using the discounted cash flow method and are amortized over a period ranging from 3 to 20 years.

08

Other intangible assets can be analyzed as follows:

December 31, 2017

December 31, 2016

(in € millions)

Capitalized development costs

353.0

349.7

Software

129.3

115.0

Other

353.0

84.0

Gross value at the end of the period

835.3

548.7

Accumulated amortization and impairment at the end of the period

(433.3)

(391.3)

NET VALUE AT THE END OF THE PERIOD

402.0

157.4

To date, no material impairment has been recognized for these items.

243

REGISTRATION DOCUMENT 2017 - LEGRAND