SOMFY - Annual financial report 2018

07 CONSOLIDATED FINANCIAL STATEMENTS

Allocated intangible assets

Deve- lopment costs

Patents and brands

Software Other In progress and advance payments

Total

€ thousands

134,105 10,302

Gross value at 1 January 2017

31,456 38,298

9,003 45,138 2,290

7,920 8,487

Acquisitions

– –

223

124

1,368

99

-2,774 -1,919

Disposals

-1,416

-514 -297

-774 -124

-70

– – –

Impact of changes in foreign exchange rates Impact of changes in consolidation scope

-1,493

– –

-4

–

– –

–

–

–

-21

Other movements

5,821

-49

2,942

-22

-8,713

AT 31 DECEMBER 2017

29,963 42,926 -17,646 -26,718

8,267 48,549 2,294 -3,381 -35,956 -1,828

7,694 139,693

-85,530 -11,694

Accumulated amortisation at 1 January 2017

– – – – – –

Amortisation charge for the period

-3,242

-4,585 1,411

-571

-3,172

-124

2,111 1,115

Disposals

–

258

375

67

Impact of changes in foreign exchange rates Impact of changes in consolidation scope

961

– – –

68

82

4 –

–

– –

–

– –

71

Other movements

49

22

AT 31 DECEMBER 2017

-19,928 -29,892 10,035 13,034

-3,577 -38,671 -1,860

– -93,928

NET VALUE AT 31 DECEMBER 2017

4,690

9,878

434

7,694* 45,765

Of which development expenses in progress amounting to €6.0 million. *

Development expenses fulfilling the criteria of IAS 38 are capitalised and deemed as internally-generated intangible assets. At 31 December 2018, the gross value of these assets was €53.6 million, of which €4.7 million was in progress and the net value was €19.9 million. The amount of research and development expenses recognised during the year was €91.9 million (net of capitalised production). There are no contractual commitments to purchase intangible assets. Net intangible assets recognised in the context of business combinations at 31 December 2018 comprised €0.4 million in customer relationships and €2.4 million in capitalised research and development expenses (€6.8 million and €3.2 million respectively at 31 December 2017). The decrease in customer relationships is mainly due to the change in consolidation method of Dooya (see Highlights).

PROPERTY, PLANT AND EQUIPMENT NOTE 5.3

Except for business combinations, PPE assets are recorded at their acquisition or production cost, which includes the purchase price and all costs necessary to make the assets operational. Current maintenance costs are recognised as expenses for the financial year. Straight-line depreciation is used based on the following average useful lives: buildings: 20 to 30 years; – machinery and tools: 5 to 10 years; – transport vehicles: 3 to 5 years; – office furniture and equipment: 5 to 10 years; – fittings and fixtures: 8 to 10 years. – Taking account of the nature of PPE held by the Group, no significant component was identified.

Subsequent expenditures may be capitalised if they comply with asset recognition criteria, as defined by IAS 16, in particular if it is probable that the future economic benefits of the asset will flow to the company. These criteria are considered prior to incurring the cost. Asset residual values, useful lives and asset depreciation are reviewed, and amended if necessary, at the end of each year. PPE recoverable amounts are reviewed when events or changes in circumstances indicate that the book value may not be recovered. PPE are derecognised at disposal or when no future economic benefit is expected from their use or disposal. Any profit or loss resulting from the derecognition of an asset (measured as the difference between the net proceeds of the sale and the book value of the asset) is included in the income statement for the year in which the asset is derecognised.

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SOMFY – ANNUAL FINANCIAL REPORT 2018