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2016 REGISTRATION DOCUMENT
HERMÈS INTERNATIONAL
179
CONSOLIDATED FINANCIAL STATEMENTS
5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In millions of euros
2016
2015
Income from cash and cash equivalents
5.6
7.3
Cost of gross financial debt
(1.5)
(0.7)
s
of which: net income/(loss) on hedging instruments
0.6
0.4
Cost of net financial debt
4.2
6.6
Other financial income and expenses
(51.9)
(52.2)
s
of which: ineffective portion of cash flow hedges
(52.7)
(49.2)
TOTAL
(47.8)
(45.6)
NOTE 7
NET FINANCIAL INCOME
The ineffective portion of cash flow hedges includes -€1.1 million in over-hedging, compared with -€11.5 million in over-hedging in 2015. The impact
of the effective portion of the hedges recorded in equity is shown in Note 20.3.
NOTE 8
INCOME TAX
8.1
Breakdown of income tax
In millions of euros
2016
2015
Current tax
(612.5)
(539.6)
Deferred tax
57.0
3.9
TOTAL
(555.5)
(535.6)
8.2
Rationalisation of income tax expense
The effective tax rate was 33.7% as at 31 December 2016, compared with 35.8% as at 31 December 2015.
The difference between the theoretical tax expense and the actual tax expense is explained as follows:
In millions of euros
2016
2015
Net income attributable to owners of the parent
1,100.3
972.6
Net income from associates
10.9
17.7
Net income attributable to non-controlling interests
(3.9)
(4.6)
Tax expense
(555.5)
(535.6)
Net income before tax
1,648.8
1,495.1
Effective tax rate
33.7%
35.8%
Current tax rate in France
1
34.4%
38.0%
Theoretical tax expense
(567.7)
(568.1)
Reconciliation items:
s
differences relating to foreign taxation (primarily the tax rate)
64.6
92.8
s
permanent differences and transactions taxed at a reduced rate
2
(52.4)
(60.2)
TOTAL
(555.5)
(535.6)
(1) As at 31 December 2016, the tax rate applicable in France is the basic rate of 33.33% plus the social contribution of 3.3%, i.e. 34.43%. The exceptional
contribution of 10.7% on companies applicable in France from 2011 was removed in 2016.
(2) Including the effect of the 3% tax on dividends paid (€10.5 million in 2016 vs €25 million in 2015).