Carrefour - 2017 Registration Document

6 COMPANY FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2017 Notes to the Company Financial Statements CARREFOUR | 2017 REGISTRATION DOCUMENT 303 Marketable securities 1.4 Marketable securities include: Carrefour shares designated as being held for allocation to ● employees under stock option plans and free shares plans. They are not written down to market value because they are intended to be allocated to employees and a provision is recorded in liabilities as explained below in the note on provisions; Carrefour shares available for allocation to employees or to ● stabilise the share price. These shares are stated at the lower of cost and market value, corresponding to the average share price for the month of December; Carrefour shares under the liquidity agreement. These shares are ● stated at the lower of cost and market value corresponding to the average share price for the month of December; Mutual fund units, stated at the lower of cost and market value. ● Foreign currency transactions 1.5 Income and expenses recorded in foreign currencies are translated at the exchange rate on the transaction date. Receivables, payables and cash in foreign currency are recorded in the balance sheet at the year-end exchange rate or the hedging rate if applicable. The difference arising from the application of the year-end rate is recorded in the balance sheet under “Prepayments and deferred charges”. Pension benefit obligations 1.6 Pension benefit obligations corresponding to amounts payable to employees on retirement and benefits payable under supplementary pension schemes are measured using the projected unit credit method. The main actuarial assumptions used to measure the obligations are described below. The Company applies the rules set out under ANC Recommendation 2013-02 for the recognition and measurement of pension benefits and other obligations. The provision at December 31, 2017 reflects the full amount of the present value of pension benefit obligations (including actuarial gains and losses and past service costs), net of plan assets. Termination benefit obligations 1.6.1 The Company’s total liability for amounts payable to employees on retirement is covered by a provision recorded in the balance sheet. Company employees in France are entitled to a lump-sum payment when they retire. The assumptions used to calculate the provision are as follows: Rate of future salary increases: 2.5%; ● Payroll tax rate: 35%; ● Discount rate: 1.44%; ● Staff turnover rate: average of the actual turnover rates for ● headquarters staff in 2015, 2016 and 2017, i.e., employees with 0 to 5 years’ seniority: 7.41%, employees with 6 to 10 years’ seniority: 6.77%, employees with 11 to 15 years’ seniority: 6.95%, employees with 16 to 20 years’ seniority: 4.96%, employees with 21 to 25 years’ seniority: 3.19%, and employees with 26 years’ seniority or more: 2.36%. For employees aged over 55, the turnover rate is assumed to be zero; Mortality table: TV TD 10-12. ● Retirement obligations 1.6.2 In 2009, the Company set up a supplementary pension plan. The main terms of this defined benefit plan, which was amended in 2015, are as follows: Eligibility: plan participants must have completed at least three ● years’ service at the time of retirement and their annual compensation must be greater than 18 times the annual ceiling for Social Security contributions; Years of service taken into account for the calculation of plan ● benefits: years of service with the Carrefour group under consecutive or non-consecutive employment contracts. The Company does not grant any length-of-service awards; Benefits: 2.75% of the reference compensation per year of ● service, subject to the applicable performance conditions being met for each year. No benefits are paid if a minimum number of years has not been validated in connection with the performance conditions; Reference compensation: average of the last three years’ salary ● and bonus preceding the retirement date or 60 times the annual ceiling for Social Security contributions, whichever is lower; Annual benefit cap: 25% of the reference compensation and the ● difference between 45% of the reference compensation and the total basic and supplementary pension benefits received by the plan participant; Upon the participant’s death, a reversionary pension is payable ● to the surviving spouse in an amount equal to 50% of the original benefit.