SOMFY - Annual financial report 2018

04 MANAGEMENT BOARD MANAGEMENT REPORT

ENGAGEMENT WITH ETHICS AND COMBATING CORRUPTION

FIGHT AGAINST TAX EVASION

Ethics is a cross-company driver of the CSR booster contributing to the “Better Together” strategic driver. Since 2015, the Group has specifically rolled out an Ethics Charter and all employees have been made aware of its contents and trained in ethical concepts by their managers. “With its continued growth, the Group enjoys […] great visibility in many countries and in increasingly diverse markets. Our position as leader in several of our industries and our ambition for tomorrow involve increased responsibilities that we wish to assume. In fact, the success of our business will only endure if we clearly assert our requirements as an ethical and responsible business.” (1) The Group therefore wants to maintain the requirement for exemplary behaviour on a day-to-day basis. As such, the Ethics Charter is intended to serve as a point of reference in terms of individual and collective behaviour and will guide our day-to-day activities enabling us to embody our values. It is a common and unifying document, which guides us in our decision-making; a tool for the promotion of dialogue between employees so that ethics is an open matter understood by all. Somfy and its employees particularly seek to respect the regulations of the countries in which it operates in relation to organisation of work, whilst subscribing to the principles and objectives of the fundamental conventions of the International Labour Organisation (ILO) and by aiming to adopt the practices of a responsible and management respectful of everyone. A role of the network of HR Officers is to ensure the respect of Human Rights, particularly examining within their scope rights and concerns relating to racial discrimination, torture, enforced disappearances, disabled people and the rights of women, children, migrants, respect differences, improve diversity and reject discrimination; – reject any kind of harassment, notably mental and sexual; – ensure the health, safety and decent working conditions for the – company’s employees and partners; seek to develop the skills and employability of staff and their – professional development; reject any kind of illegal child labour and the use of forced – labour; guarantee constructive social dialogue; – reject any kind of corruption, whether active or passive. – In addition to this Ethics Charter and following the enactment of the law on transparency, the fight against corruption and the modernisation of the economy (2) , Somfy has chosen to adopt the Middlenext Anti-Corruption Code of Conduct. This Code of Conduct is designed to guide business behaviour. The Group has decided to supplement it with several appendices in order to provide practical advice, examples and links to other procedures. In addition to these documents, e-learning materials are currently being rolled out and face-to-face training has also been introduced for those employees expected to be the most exposed. In 2018, 290 exposed individuals received face-to-face training. The early-warning arrangements introduced in 2015 to escalate non-ethical behaviours was extended to meet the requirements of the French “Sapin 2” anticorruption legislation. Accounting controls were also implemented to detect potential fraudulence. minorities and indigenous peoples. This is reflected in a commitment to:

Somfy undertakes to observe the spirit and the letter of the law in all countries in which it does business. It wants a frank and transparent relationship with all tax authorities, seeks to clarify all uncertainties and resolve all disputes in due course. It considers that it pays its fair share of taxes in those countries in which it operates. Furthermore, the Group undertakes to pursue the following actions in its drive for tax transparency and to combat tax evasion: participate in compulsory reporting such as the – Country-by-Country Reporting for France; monitor that intragroup transactions comply with arm’s length – principles and OECD actions on base erosion and profit shifting (BEPS). METHODOLOGY NOTE — The Non-Financial Performance Statement was drafted using the reporting protocol introduced for the RSE 2018 reporting in accordance with Article L. 225-102-1 of the Commercial Code (the “Grenelle 2” decree). The Groups’ CSR reporting protocol is the reference guide for all those involved in CSR reporting within the Group. It is drawn up in French and English. Its purpose is to define all the Group’s CSR indicators along with their method of calculation, and to describe the procedures for their collection and for reporting in order to promote the consistency and comparability of data. This document is distributed to and applied at all levels of data reporting. The reporting protocol is updated annually to take into account Group developments. The CSR reporting protocol also serves as a reference framework for the external verification of data, in accordance with Article L. 225-102-1 of the Commercial Code. It is available on request from Head Office. The Group’s indicators were defined by the CSR officers for each area in line with the Group’s CSR strategy and the resulting social, environmental and societal objectives. They address the main challenges (risks and opportunities) inherent in the Group’s activity and illustrate, through clear communication, the Group’s non-financial performance and the policies it has introduced to address these challenges, while at the same time supporting the CSR approach in each of the progress drivers identified by the Group. REPORTING PROTOCOL SELECTION OF INDICATORS

COLLECTION, INTERNAL CONTROL AND CONSOLIDATION

The collection of CSR indicators is ensured by the CSR officers within their respective fields of expertise. They rely on their network of local experts who provide the data. The CSR officers are also responsible for monitoring the consistency and plausibility of the data prior to its consolidation in order to generate the Group indicators included in the CSR section of the management report.

Source: Introduction of the Ethics Charter by the Management Board. (1) Known as the “Sapin II” law. (2)

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SOMFY – ANNUAL FINANCIAL REPORT 2018