SOMFY_ANNUAL_FINANCIAL_REPORT_2017

07 CONSOLIDATED FINANCIAL STATEMENTS

Gross remuneration of Management Board Note 10.2.2 and Supervisory Board members

as a member of the Management Board, and from his duties as Chairman of the Management Board on 9 March 2016. As of 2017, they include the payment of a bonus in favour of Management Board members, introduced following the removal of the previous “Article 39” additional pension scheme. Post-employment benefits correspond to retirement benefits associated with the employment contracts of Management Board members. They included the write-back of an “Article 39” provision in 2016, following the departure of Jean-Philippe Demaël. replicates the methodology that would be used by a bank’s trading room should beneficiaries request a price from the latter to monetise their shares. During the rights vesting period, the fair value of options and free shares thus determined is split in proportion to the acquisition of rights. This expense is posted to personnel expenses and offset by an increase in equity. Upon exercise of the options, the exercise price received is recorded under cash and offset in equity. The dilutive impact of outstanding options and free shares is reflected in the calculation of diluted earnings per share. In accordance with IFRS 2, stock options are valued at market value at the date of allocation and subsequently amortised through the income statement over the vesting period for all plans granted since 7 November 2002.

€ thousands

31/12/17

31/12/16

Short term benefits

1,583

1,816 –495

Post-employment benefits

22

The short term benefits at 31/12/16 included the remuneration paid to Jean-Philippe Demaël, who resigned from his term of office

SHARE-BASED PAYMENTS NOTE 10.3

Certain Group employees, including senior executives, may be entitled to the allocation of free shares, subject to the achievement of certain performance conditions, and options entitling them to acquire Somfy SA shares at a price fixed in advance. The Group does not grant warrants to subscribe for shares. Effective allocation of options and free shares is subject to conditions being fulfilled. Each beneficiary must be employed by the Group at the date options are exercised or free shares vested. For some employees, the ability to exercise options may also be governed by the achievement of predetermined objectives. Options were valued using the Black & Scholes model, which calculates the fair value of the benefit granted to date and takes account of various parameters such as the share price, exercise price, expected volatility, expected dividends, risk free interest rate and the life of the option. The fair value of free shares is determined using an approach that faithfully

At 31 December 2017, no more stock option plans existed. At its meeting of 21 February 2014, the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 154 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. In 2016, the final vesting related to 3,400 shares ( i.e. 17,000 shares given the five-for-one par value split) allocated to 80 beneficiaries who are French tax residents. Final vesting will take place on 30 June 2018 for non-French tax residents. Furthermore, at its meeting of 16 June 2017 the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 195 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. Final vesting will take place on 1 July 2019. The shares vested will be available immediately since they are not subject to a retention obligation.

At 31 December 2017, the free share position was as follows:

Plan date

Plan N°

Number of benefi- ciaries

Number of attributable shares

Price per share (€)

Allo- cation date

Vesting date

Revision of the shares number related to presence and perfor- mance conditions

Number of shares granted

Number of shares not yet allocated at 31/12/17

Number of shares poten- tially granted at 31/12/17

21/02/14

Residents AGA 2

86 68

36,350 35.98 30/06/16 01/07/18 –19,350 –17,000

–

N/A N/A N/A

21/02/14 Non-residents AGA 2

21,600 33.97 30/06/18

N/A –12,475 –600 8,525

21/02/14

Total AGA 2

154

57,950

–31,825 –17,600 8,525

Residents and non-residents

–

– 40,525

16/06/17

AGA 3

195 138,325 88.82 01/07/19 01/07/19 –97,800

For greater legibility, information concerning the AGA 2 Plan has been restated to reflect the 5-for-1 share par value split carried out in 2017.

106

SOMFY – ANNUAL FINANCIAL REPORT 2017