FINANCIAL REPORT 2014

For this to be the case the asset (or disposal group) must be available for immediate sale in its present condition and its sale must be highly probable. The relevant assets and liabilities are shown separately on the balance sheet under “Noncurrent assets held for sale” and “Liabilities associated with non-current assets held for sale”. A non-current asset (or disposal group) classified as held for sale is measured at the lowest of its carrying amount and lowest fair value costs of sale. An expense for impairment of unrealised gains is recognised in the income statement. Unrealised gains are no longer amortised when they are reclassified. • The post-tax profit or loss of discontinued operations until the date of disposal; • The post-tax gain or loss recognised on the disposal or on measurement to fair value less costs of sale of the assets and liabilities constituting the discontinued operations. 2.4. CONSOLIDATION PRINCIPLES AND METHODS (IFRS 10, IFRS 11, IAS 28) 2.4.1. SCOPE OF CONSOLIDATION The consolidated financial statements include the financial statements of CACEIS and those of all companies over which, in compliance with IFRS 10, IFRS 11 and IAS 28, CACEIS exercises control, joint control or significant influence. 2.4.2. DEFINITIONS OF CONTROL In compliance with international standards, all entities under control, under joint control or under significant influence are consolidated, provided that their contribution is deemed material. Exclusive control over an entity is deemed to exist if CACEIS is exposed to or entitled to receive variable returns as a result of its involvement with the entity and if the power it holds over this entity allows it to influence these returns. Power in this context means substantive (voting or contractual) rights. Rights are considered substantive if the holder of the rights can in practice exercise them when decisions about the company’s relevant activities are made. CACEIS is deemed to control a subsidiary through voting rights when its rights give it the practical ability to direct the subsidiary’s relevant activities. CACEIS is generally considered to control a subsidiary when it holds more than half the existing or potential voting rights in an entity, whether directly or indirectly through subsidiaries, except when it can be clearly demonstrated that such ownership does not give it the The following are disclosed on a separate line of the income statement:

power to direct its relevant activities. Control is also deemed to exist where CACEIS holds half or less than half of the voting rights, including potential rights, in an entity but is able in practice to direct its relevant activities at its sole discretion, notably because of the existence of contractual arrangements, the size of its stake in the voting rights compared to those of other investors, or other reasons. Control of a structured entity is not assessed on the basis of voting rights as these have no effect on the entity’s returns. When assessing control, consideration is given not only to contractual arrangements in force but also to whether CACEIS was involved in creating the entity and what decisions it made at the time, what agreements were made at its inception and what risks are borne by CACEIS, any rights under agreements that give the investor the power to direct relevant activities in specific circumstances only and any other facts or circumstances that indicate the investor can direct the entity’s relevant activities. Where there is a management agreement, the extent of decision-making powers granted to the delegated manager and the remuneration accorded by such contractual agreements are examined to establish whether the manager is in practice acting as an agent (with delegated powers) or as a principal (on their own account). Furthermore, when decisions on the entity’s relevant activities are taken, the indicators used to assess whether an entity is acting as agent or principal are as follows: the extent of the decision-making powers compared to the powers over the entity delegated to the manager, the remuneration provided for under the contractual agreements, any substantive rights that may affect the decision-making capacity of other parties involved in the entity and the exposure to variable returns of other interests in the entity. Joint control is deemed to exist when there is a contractual division of control over an economic activity. Decisions affecting the entity’s relevant activities require unanimous agreement of the joint controllers. In traditional entities, significant influence is defined as the power to influence but not control a company’s financial and operational policies. CACEIS is presumed to have significant influence if it owns 20% or more of the voting rights in an entity, whether directly or indirectly through subsidiaries. 2.4.3. TRANSLATION OF FOREIGN SUBSIDIARIES FINANCIAL STATEMENTS (IAS 21) Financial statements of subsidiaries denominated in foreign currencies are translated into euros in two steps: • If applicable, the local currency, in which the financial statements are prepared, is translated into the functional currency (currency of the main business environment of the entity) using the historical cost method and all translation adjustments are fully and immediately recognised in the income statement;

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