Annual Report 2017 Enovos Luxembourg S.A.

40 41 Part I Our Mission 6 Part II Our Achievements 14 Part III Annual Accounts 22 Annual Report 2017 Enovos Luxembourg Financial assets Shares in affiliated undertakings and participating interests are recorded on the balance sheet at their acquisition cost, including the expenses incidental thereto. Loans to affiliated undertakings and loans to undertakings with which the undertaking is linked by virtue of participating interests are included at their nominal value. In case of an impairment that the Board of Directors considers as permanent in nature, value adjustments are made in respect to these long-term investments to apply the lower value to be assigned to them at the balance-sheet date. These value adjustments are not maintained when the reasons for making them have ceased to exist. Raw materials and consumables Raw materials and consumables are valued at the lower of purchase price, calculated on the basis of weighted average cost or market value. Value adjust- ments are recorded when the estimated realisable value of stocks is lower than the weighted average cost. These value adjustments are not maintained if the reasons for recording them have ceased to exist. Debtors Debtors are recorded at their nominal value. Value adjustments are recorded when there is a risk that all or part of the amounts concerned may not be recovered. These value adjustments are not maintained if the reasons for recording them have ceased to exist. Investments Other investments are valued at their purchase price, including expenses incidental thereto, expressed in the currency in which the annual accounts are prepared. A value adjustment is recorded where the market value is lower than the purchase price. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. Market value corresponds to the latest available quote on the valuation day for investments listed on a stock exchange or traded on another regulated market. Derivative financial instruments The Company may enter into derivative financial instruments such as options, swaps, futures or foreign exchange contracts. The Company initially records derivative financial instruments at costs. At each balance-sheet date, unrealised losses are recognised in the profit and loss account, whereas gains are accounted for when realised. In the event of hedging of an asset or liability not recorded at fair value, unrealised gains or losses are deferred until recognition of the realised gains or losses on the hedged item. Prepayments This asset item includes expenditure incurred during the financial year but relating to a subsequent financial year. Temporarily not taxable capital gains Temporarily not-taxable capital gains include gains for which the taxation is deferred by virtue of Article 54 LIR (Income tax law). Such gains, which are rolled over, are recorded at their initial value. Reinvested gains are written off using the same method and over the same period as the assets to which they relate. This caption is disclosed under “other non available reserves” on the balance sheet. Provisions The aim of provisions is to cover clearly defined losses and debts, which, on the balance-sheet date, are either probable or certain, but for which the amount or date of occurrence cannot be determined with certainty. A review is carried out at year-end to determine the provisions to be recorded for the Company’s liabilities and charges. Provisions recorded in previous years are reviewed annually and those no longer needed are released. Provisions may also be created to cover charges which originate in the financial year under review or in a previous financial year, the nature of which is clearly defined and which at the date of the balance sheet are either likely to be incurred or certain to be incurred as to their amount or the date on which they will arise. Provisions for pensions and similar obligations The Company offers its employees a defined benefit plan and a defined contribution plan. Defined benefit plan A defined benefit plan defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date. The defined benefit obli- gation is measured using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future payments, by reference to the historical evolution of long-term interest rates. Actuarial gains and losses are charged or credited in the profit and loss account in the period in which they arise. Past-service costs are recognised immediately in the profit and loss account.