SOLOCAL_Registration Document_2017

FINANCIAL STATEMENTS 6.1 Consolidated financial statements for the years ended 31 December 2016 and 2017

Movements in provisions were as follows:

Changes in the scope of consolidation, reclassifications and others

Reversal of the year (unused)

Reversal of the year (utilised)

Opening balance

Charge for the year

Closing balance

(in thousands of euros)

Provisions for social and fiscal litigations

48,084

1,256 1,908 3,164 3,114

(24)

(19,794)

-

29,522

1

Other Provision for risks TOTAL PROVISIONS of which non current l

3,466

(409) (433) (423)

(837)

(9) (9)

4,119

51,550 21,077 30,473

(20,631) (6,235) (14,396)

33,641 17,533 16,108

-

of which current l

50

(10)

(9)

2

The provisions booked primarily cover social disputes linked to the PSE (Job Safeguard Procedure) in progress (cf. Note 14.1).

Other retirement schemes These benefits are offered through defined contribution schemes for which the Group has no commitment other than the payment of contributions. The charge corresponding to the contributions paid is recognised in the income statement for the period. Other long-term benefits which may be granted by the Group consist mainly of long-service awards that are also measured on an actuarial basis. Personnel turnover tables’ adjustment In order to have up-to-date data, the turnover tables were recalculated in 2017. They were estimated based on the observations from 2012 to 2016 (5 years). The Group decided to retain only motives of resignation in the personnel turnover calculation. As such, the reason for redundancy regardless (including for economic reasons) or conventional termination is not retained. These tables have been used to determine commitments as at 31 December 2016 but also 31 December 2017. The impact relating to this change in method gave rise to an adjustment in opening shareholders’ equity standing as followed: -€43.1 million on the post-employment benefits (IFC) with a l positive tax impact of €12.1 million, generating a net impact of -€31 million; -€2.7 million on the long-service awards with a positive tax l impact of €0.9 million, generating a net impact of -€1.8 million.

Retirement benefits and similar commitments In France, legislation provides for benefits to be paid to employees at retirement on the basis of their length of service and salary at retirement age. In accordance with IAS 19, obligations under defined benefit schemes are measured by the projected unit credit method. According to this method, each period of service gives rise to an additional unit of benefit entitlement and measures each unit separately to value the final obligation, using demographic hypotheses (turnover of the personnel, mortality, retirement age, etc.) and financial hypotheses (future increase in salary by category). This final obligation is then discounted with a rate determined in reference to the yield on first-category long-term private bonds (or State bonds if there is no liquid market). Actuarial differences relating to post-employment benefits are recognised for the full amount in other comprehensive income. In order to have up-to-date data, the turnover tables were recalculated in 2017. They were estimated based on the observations from 2012 to 2016 (5 years). The impact relating to this change in method gave rise to an adjustment in opening shareholders’ equity standing of €33.1 million.

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2017 Registration Document SOLOCAL