Vilmorin & Cie - Annual report 2017-2018

Financial INFORMATION 5 ANNUAL REPORT Vilmorin & Cie 156 2017-2018 The actuarial gains and losses resulting from changes in assumptions or experience adjustments (difference between the projected figure and the actual figure) on the commitments or the financial assets of the plan are entirely recorded as other items in the global income for the fiscal year when they are generated, along with the corresponding fiscal impact. They cannot be reclassified in the income statement in subsequent fiscal years. The costs of services rendered, past services, and fund administration costs for the period are all recorded as operating charges for the fiscal year. Liquidations and/or reductions of defined benefit plans are also recorded as operating charges for the fiscal year. Net interests on liabilities (or net assets), valued at the adjustment rate, are recorded as other income and financial charges. 16.2 - Other long-term subsequent benefits Provisions are made for certain other long-term benefits which are determined using an actuarial calculation that is comparable to that used for defined contribution schemes. For Vilmorin & Cie these benefits mainly correspond to bonuses that accompany “work medals” for long service, and concern almost exclusively the French companies. The costs of services rendered are recorded as operating charges and the financial interests as other income and financial charges. 17- Provisions (IAS 37) 17.1 - General principle Standard IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” defines the rules applicable to provisions. It is mandatory to record a provision in cases where: it is intended to meet a current, legal or implicit obligation, this obligation exists at the date of the close of the fiscal year, it is probable or certain that settlement will lead to an outflow of resources to a third party, a reliable evaluation of the provision can be made. These provisions are estimated taking into account the most probable hypotheses at the closing date of the accounts. 17.2 - Application to Vilmorin & Cie Within the normal conditions of its business Vilmorin & Cie is subject to various risks (commercial litigation, reorganization, fiscal litigation, social litigation, etc.). It applies the following rules: 17.2.1 Provisions for reorganization Provisions for the cost of reorganization programs are made in full during the fiscal year in which an irreversible obligation for Vilmorin & Cie arises with regard to third parties. This obligation is the result of a decision taken by the invested management authority and materialized before the end of the closing date by informing the third parties concerned, or their representatives. The amount of the provision mainly includes the following costs: severance pay, notice not worked, training of employees laid off, other costs linked to the closing of sites. Disposal of fixed assets, impairment of inventories and other assets that are the direct result of reorganization costs are also recorded in the reorganization costs. 17.2.2 Provisions for litigations Litigations (commercial, fiscal, intellectual property, etc.) are assessed individually and/or on the basis of statistical estimate of the litigations observed for similar cases bearing in mind what is known at the end of the fiscal year. 17.2.3 Presentation in the financial statements Except in particular justified cases, provisions are presented in the balance sheet in the current liabilities. 18- Government grants (IAS 20) In compliance with standard IAS 20, Vilmorin & Cie records government grants in the balance sheet on the line “Deferred income” and includes them in the income for the useful life of the assets for which they were received. Government grants received for fixed assets that cannot be depreciated (land) are directly recorded in income for the fiscal year, when they cannot be linked to a fixed asset that is depreciated. If they can be linked to a depreciated fixed asset, they are depreciated at the same rhythm as this asset. 19- Deferred taxes (IAS 12) In compliance with standard IAS 12, deferred taxes are calculated for all temporal differences between the tax base and the book value of the assets and liabilities. The main items taken into account for this purpose concern: consolidation restatement showing a divergence between book value and tax base (special tax exemption, lease agreements, 5.1. Consolidated Financial Statements