SOMFY - Annual financial report 2018

08 PARENT COMPANY FINANCIAL STATEMENTS

MARKETABLE SECURITIES

SOMFY SA STOCK OPTION AND FREE SHARE ALLOCATION PLANS

The gross value of marketable securities comprises their purchase price less related expenses or their transfer value, calculated using the first in, first out method. Marketable securities are valued at their average quoted stock exchange price over the month of December 2018 and are impaired when this is lower than cost. At 31 December 2018, marketable securities totalled €98.4 million, comprising: treasury shares of €99.3 million; – a provision of €0.9 million for the writedown of treasury shares. – The company has implemented several successive share buyback programmes. The most recent buyback programme was launched in 2018; it was authorised by the Combined General Meeting of 16 May 2018, and had the following objectives: to stimulate the secondary market or ensure the liquidity of the – Somfy share, by way of an investment services provider within a liquidity contract that complies with the Ethics Charter of AMAFI recognised by regulations; to retain the shares purchased and subsequently exchange them – or use them as payment within the framework of potential acquisitions; to ensure the coverage of stock option plans and/or free share – allocation plans (or similar) granted to employees and/or corporate officers of the Group, as well as all other shares allocated under a company or group savings scheme (or similar), in relation to employee profit sharing and/or any other form of allocation to employees and/or corporate officers of the Group; to cover marketable securities giving right to the allocation of – company shares, in accordance with applicable regulations; to proceed with the possible cancellation of shares acquired, in – accordance with the authorisation granted by the Extraordinary General Meeting. Such share purchases could be effected by all means, including by means of acquiring blocks of shares and at any times considered appropriate by the Management Board. The company reserved the right to use options or derivative instruments, in accordance with applicable regulations. These shares are classified in account 502 “Treasury shares”. Income or losses on treasury share transactions are thus recognised as financial income/expenses. Treasury shares to be granted to employees and allocated to stock option or free share plans are valued on a plan by plan basis at the lower of acquisition cost or exercise price of the call option. Shares not yet allocated to plans or which have lapsed are valued at the lower of the average purchase price of all these shares or the average quoted stock exchange price over the month of December 2018. Allocations are valued based on the first in, first out method. Shares bought and sold to ensure the liquidity and to stimulate the secondary market and shares purchased to be retained and subsequently exchanged are valued at the lower of the average purchase price of all these shares or the average quoted stock exchange price over the month of December 2018. Disposals are valued based on the first in, first out method. TREASURY SHARES

At 31 December 2018, no more stock option plans existed. At its meeting on 21 February 2014 the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 154 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. In 2018, the final vesting related to 8,525 shares allocated to 55 beneficiaries who are not French tax residents. At its meeting on 16 June 2017 the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 195 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. Final vesting will take place on 1 July 2019. The shares vested will be available immediately since they are not subject to a retention obligation. In addition, at its meeting on 12 November 2018 the Management Board of Somfy SA decided to allocate Somfy SA performance shares to seven beneficiaries who are employees of Somfy Protect by Myfox. The vesting of these performance related shares is subject to a condition of continued employment within the Group. Final vesting will take place on 30 June 2021. The shares vested will be available immediately since they are not subject to a retention obligation. ACCOUNTS RECEIVABLE FROM EQUITY INVESTMENTS, BONDS RECEIVABLE AND OTHER RECEIVABLES Receivables are carried at their nominal value. A provision for impairment is recorded when their estimated realisable value falls below carrying value and based upon the probability of their recovery. When the equity of investments becomes negative, a provision for impairment is recorded with reference to the above estimated realisable value. Accrued interest on bonds receivables are capitalised at each year-end. Foreign currency denominated income and expenses are recorded at their equivalent value at the transaction date. Foreign currency denominated debts, receivables and cash are recognised in the balance sheet at their exchange rate on the balance sheet date. The difference resulting from the translation of foreign currency debts and receivables at the balance sheet date exchange rate is recognised in the balance sheet as a “Translation adjustment”. At 31 December 2018, “Asset” and “Liability” translation adjustments of €7,701 thousand and €29 thousand respectively, were classified under “Other receivables and accruals” and “Other payables and accruals”, respectively. Unrealised foreign exchange losses resulting from the net exchange position by currency recorded on assets and liabilities at the balance sheet date are recorded as a provision for foreign exchange losses. FOREIGN CURRENCY DENOMINATED TRANSACTIONS

BORROWINGS AND DEBTS FROM CREDIT INSTITUTIONS

Borrowings and debts from credit institutions are recorded on the balance sheet at their net value. Accrued interest is recorded on the balance sheet with the related borrowings. At 31 December 2018, the company complied with all financial covenants imposed by banks on its borrowing facilities.

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SOMFY – ANNUAL FINANCIAL REPORT 2018