Annual Report 2017 Enovos Luxembourg S.A.

38 39 Part I Our Mission 6 Part II Our Achievements 14 Part III Annual Accounts 22 Annual Report 2017 Enovos Luxembourg The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities in the next financial year. Estimates and judg- ments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant accounting policies The main valuation rules applied by the Company are the following: Foreign currency translation The Company maintains its books in Euro (EUR). Transactions expressed in currencies other than EUR are translated into EUR at the exchange rate effective at the time of the transaction. Formation expenses and long-term assets expressed in currencies other than EUR are translated into EUR at the exchange rate effective at the time of the transaction. At the balance-sheet date, these assets remain translated at historical exchange rates. Cash at bank is translated at the exchange rate effective at the balance-sheet date, exchange losses and gains are recorded in the profit and loss account for the year. Other assets and liabilities are translated separately respectively at the lower or at the higher of the value converted at the historical exchange rate or the value determined on the basis of the exchange rates effective at the balance sheet date. The unrealised exchange losses are recorded in the profit and loss account. The exchange gains are recorded in the profit and loss account at the moment of their realisation. Where there is an economic link between an asset and a liability, these are valued in total, according to the method described above, and net unrealised losses are recorded in the profit and loss account, and net unrealised exchange gains are not recognised. Presentation of the comparative financial data In order to further improve the presentation of the annual accounts, manage- ment has recorded in 2017 some reclassification between the captions “Social security costs” and “Other staff costs” (see note 16). The comparative figures for 2016 have been reclassified accordingly. Intangible assets Intangible assets are valued at purchase price, including the expenses incidental thereto or at production cost, less cumulated depreciation amounts written off and value adjustments. The depreciation rates and methods applied are as follows: Depreciation rate Depreciation method Concessions, patents, licences, trademarks and similar rights and assets 4%-33.33% Straight-line Goodwill, to extent that it was acquired for valuable consideration 10% Straight-line Where the Company considers an intangible asset has suffered a durable depreciation in value, an additional write-down is recorded to reflect this loss. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. Intangible assets under development are valued at cost, based on the direct costs of the Company, and are reviewed annually for impairment. Tangible assets Tangible assets are valued at purchase price, including the expenses incidental thereto or at produc- tion cost. Tangible assets are depreciated over their estimated useful economic lives. The depreciation rates and methods applied are as follows: Depreciation rate Depreciation method Other fixtures and fittings, tools and equipment 10%-25% Straight-line Exception: Finance lease of pumping station in Vianden 2% Straight-line The finance lease concerns a specific investment in a turbine in a pumping station. As the underly- ing contract has a duration of 49 years, the Board of Directors decided to mirror the depreciation period on the duration of the contract, therefore the application of a 2% depreciation rate. Investments that qualify from a tax point of view as finance lease are treated in accounting as finance lease as well. Where the Company considers a tangible asset to have experienced a lasting depreciation in value, an additional write-down is recorded to reflect this loss. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. Tangible assets under development are valued at cost, based on the direct costs of the Company, and are reviewed annually for impairment. Work performed by the undertaking for its own purposes and capitalised The costs incurred on fixed assets under development created by the Company itself are recorded in the profit and loss account under caption “Work performed by the undertaking for its own purposes and capitalised” during the year and are transferred at balance sheet date to the appropriate balance sheet caption.