FINANCIAL INFORMATION CONCERNING THE GROUP’S ASSETS AND LIABILITIES, FINANCIAL POSITIONAND PROFITS AND LOSSES 20 NOTES TO THE CONSOLIDATED FINANCIAL Note 2: Statement of compliance and transition to IFRS STATEMENTS 2.1 Statement of compliance Note 1: General information about the Company The consolidated financial statements have been prepared in Founded in 2012, GenSight Biologics S.A. (hereinafter referred accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board to as “GenSight Biologics” or the “Company” and together with (IASB). As the shares of the Company are listed on Euronext Paris, its subsidiary as the “Group”) is a clinical-stage biotechnology in compliance with European regulation n°1606 / 2002 adopted group discovering and developing novel therapies for on July 19, 2002 by the European Parliament and the European neurodegenerative retinal diseases and diseases of the central Council, the Group’s consolidated financial statements for the nervous system. GenSight Biologics’ pipeline leverages two core year ended December 31, 2017 were prepared in accordance technology platforms, the Mitochondrial Targeting Sequence with IFRS, as endorsed by the European Union on the date of (MTS) and optogenetics, to help preserve or restore vision in preparation. patients suffering from severe degenerative retinal diseases. The Group focus is in ophthalmology where it develops product The IFRS as adopted by the European Union differ in certain candidates to restore eyesight to patients suffering from retinal aspects with the IFRS published by the IASB. Nevertheless, the diseases that would otherwise lead to blindness. Group ensured that the financial information for the periods The Company has incurred losses and negative cash flows from presented is not substantially different between IFRS published operations since its inception and shareholders’ equity amounts by the IASB and IFRS as adopted by the European Union. to €54,996 K as of December 31, 2017 as a result of several International accounting standards include IFRS, International financing rounds (see Note 9). The Group anticipates incurring Accounting Standards (IAS), as well as the interpretations issued additional losses until such time, if ever, that it can generate by the Standing Interpretations Committee (SIC), and the significant revenue from its product candidates in development. International Financial Reporting Interpretations Committee Substantial additional financing will be needed by the Company (IFRIC). to fund its operations and to commercially develop its product New standards, amendments and interpretations that became candidates. applicable to the Group from January 1, 2017 The Group’s future operations are highly dependent on a The new standards, amendments to standards and interpretations combination of factors, including: (i) the success of its research published by IASB and mandatorily applicable from 2017 are and development; (ii) regulatory approval and market acceptance listed below : of the Group’s proposed future products; (iii) the timely and • Amendments to IAS 12 Income Taxes. The amendments consist successful completion of additional financing; and (iv) the in some clarifying paragraphs and an illustrative example. development of competitive therapies by other biotechnology • Amendments to IAS 7Statementof Cash Flows. The amendments and pharmaceutical companies. are intended to clarify IAS 7 to improve information provided The consolidated financial statements as of December 31, to users of Financial Statements about an entity’s financing 2017 and related notes (the “Financial Statements”) present activities. They are effective for annual periods beginning on or the operations of the Group. These are the Group’s first ful l after January 1, 2017. year of consolidated financial statements published, as the New standards, amendments and interpretations not applicable parent Company GenSight Biologics S.A. had no subsidiary as of until future period December 31, 2016. The new standards, amendments to standards and interpretations The presented Financial Statements are expressed in thousands published by IASB, adopted by the European Union but not yet of euros, unless stated otherwise. The reporting date for the applicable in 2017 are listed below: consolidated financial statements s December 31, and covers ai • On May 28, 2014, the IASB issued IFRS 15 Revenue from twelve-month period. The individual statements of the consolidated Contracts with Customers which specifies how and when to subsidiary GenSight Biologics Inc. are prepared at the same recognize revenue as well as requiring entities to provide users reporting date, i.e., December 31, and cover a one-year period for of financial statements with more informative and relevant the parent company and an eight-month period for the subsidiary. disclosures. According to the new standard, revenue is The consolidated financial statements as of December 31, 2017 recognized to depict the transfer of promised goods or services have been prepared under the responsibility of management of to a customer in an amount that reflects the consideration the Group and were approved on February 27, 2018 by the Board to which the Group expects to be entitled in exchange for of Directors. those goods or services. Revenue is recognized when, or as, 190– GENSIGHT BIOLOGICS – 2017 Registration Document