SOMFY - Annual financial report 2018

07 CONSOLIDATED FINANCIAL STATEMENTS

Property, plant and equipment under finance leases Note 5.3.2

The mandatory application of IFRS 16 “Leases” as from 1 January 2019, and the challenges that the standard poses to the Group are detailed in note 1.4.2. The Group did not opt for the early application of IFRS 16 in its 2018 consolidated financial statements. The impacts below have been determined in accordance with IAS 17. Leases that transfer virtually all the risks and rewards incident to ownership to the lessee are classified as finance leases . These leases are classified as finance leases when the following major indicators are met (non-cumulative criteria and non-exhaustive list): transfer of asset ownership at expiry of the lease with – purchase option; the option exercise conditions are such as to make the – transfer of ownership highly likely at the expiration of the lease; the lease term is for the major part of the useful life of the – asset according to the lessee’s conditions of use; the present value of minimum lease payments is close to the – fair value of the leased asset at the conclusion of the contract.

Assets financed within the framework of finance leases primarily include real estate. They are recorded, from inception of the contract, in property, plant and equipment at the lower of the fair value of leased assets and the present value of minimum payments in respect of the lease. Payments made in respect of the lease are broken down between finance charges and debt repayment, in order to obtain a constant periodic rate of interest on the outstanding liability. Finance charges are directly recognised in the income statement. PPE acquired through finance leases are depreciated over the same periods as described above where the Group expects to gain ownership of the asset at the expiry of the contract. If not, the asset is depreciated on the basis of the shorter period of the asset useful life and the duration of the lease. Leases classified as operating leases are not restated and lease payments are recognised as expenses for the financial year, spread if required on a straight-line basis.

Land

Buildings

Plant, machinery and tools

Total

€ thousands

26,636

Gross value at 1 January 2018

7,111

19,448

77

–

Acquisitions

– – – –

– –

–

-10

Disposals

-10

-1

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

-1

– – –

8

8

-3,254 23,380 -8,938

Other movements

-574

-2,680 16,776 -8,919

AT 31 DECEMBER 2018

6,537

67

Accumulated depreciation at 1 January 2018

– – – – – – –

-19 -14

-654

Depreciation charge for the period

-640

10

Disposals

– –

10

–

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

– – –

-2

-2

1,407 -8,177 15,202

Other movements

1,407 -8,154 8,622

AT 31 DECEMBER 2018

-24

NET VALUE AT 31 DECEMBER 2018

6,537

43

Other movements include the exercise of options upon expiry of certain finance leases.

The maturity profile of non-discounted and discounted minimum payments on finance leases is as follows:

Undiscounted 2018 debt

Discounted 2018 debt

Undiscounted 2017 debt

Discounted 2017 debt

€ thousands 1 year or less

€ thousands 1 year or less

1,454 2,810 1,684 5,948

1,222 2,193 1,558 4,973

1,444 3,621 2,329 7,394

1,175 2,879 2,094 6,148

Between 1 and 5 years

Between 1 and 5 years

5 years or more

5 years or more

TOTAL

TOTAL

99

SOMFY – ANNUAL FINANCIAL REPORT 2018