SOMFY_ANNUAL_FINANCIAL_REPORT_2017

07 CONSOLIDATED FINANCIAL STATEMENTS

Somfy SA is a company governed by a Management Board and a Supervisory Board, listed on the Eurolist of Euronext Paris (Compartment A, ISIN Code: FR0013199916). Somfy is the global leader in opening and closing automation for both residential and commercial buildings, and a key player in the connected home. The head office is based in Cluses, Haute-Savoie, France. Somfy SA is a 52.65%-subsidiary of the French company J.P.J.S. On 6 March 2018, the Management Board approved the IFRS consolidated financial statements of the Group for the 12-month financial year ended 31 December 2017. Total assets were €1,182,585 thousand and consolidated net profit €157,742 thousand (Group share: €159,912 thousand). All accounting rules and methods are included in the various notes which are grouped by theme and highlighted in colour for greater readability and relevance.

As part of the preparation of these annual consolidated financial statements, the main judgments made and the main assumptions used by Management have been updated based on the latest indicators available. At 31 December, the Group reviews its performance indicators and, if necessary, carries out impairment tests if there is any indication that an asset may have been impaired.

ACCOUNTING PRINCIPLES NOTE 1 — CONSOLIDATED FINANCIAL STATEMENTS – NOTE 1.1 BASIS FOR PREPARATION The consolidated financial statements are presented in thousands of Euros. All amounts are rounded to the nearest thousand of Euros, unless otherwise specified. The financial statements have been prepared in accordance with the historical cost principle, except for a number of assets and liabilities that were measured at fair value, in particular in relation to derivative instruments. Consolidated financial statements include the financial statements of Somfy SA and its subsidiaries at 31 December of each year. The financial statements of subsidiaries are prepared for the same reference period as the parent company and on the basis of homogeneous accounting methods. The financial year-end of all companies is 31 December. In application of European regulation 1606/2002 of 19 July 2002 on international accounting standards, the Group’s consolidated financial statements for the financial year ended 31 December 2017 have been prepared in accordance with the international financial reporting standards (“IFRS”) applicable at that date, as approved by the European Union at the date of preparation of these financial statements. The preparation of the consolidated financial statements requires Management to make a number of judgments, estimates and assumptions liable to affect the values of certain assets, liabilities, and income and expense items in the financial statements, and certain information provided in the notes to the financial statements. Due to the inherently uncertain nature of the assumptions, actual results may differ from estimates. The Group reviews its estimates and assessments on a regular basis to take past experience into account and incorporate factors considered relevant under current economic conditions. The major items of the financial statements that may be subject to estimates are as follows: the impairment of goodwill and intangible assets and property, – plant and equipment, whose measurement is specifically based on future cash flow, discount rate and net realisable value assumptions (note 5.1 to the consolidated financial statements); retirement commitments, whose measurement is based on a – number of actuarial assumptions (note 10.2.1 to the consolidated financial statements); provisions (note 9.1 to the consolidated financial statements); – the measurement of options associated with stock option plans – and free share allocations granted to employees (note 10.3 to the consolidated financial statements). COMPLIANCE WITH ACCOUNTING STANDARDS NOTE 1.2 JUDGEMENTS AND ESTIMATES NOTE 1.3

NEW APPLICABLE STANDARDS NOTE 1.4 AND INTERPRETATIONS

Standards, amendments and interpretations Note 1.4.1

whose application is mandatory for financial years beginning on or after 1 January 2017

The Group has applied the following standards, amendments and interpretations as of 1 January 2017 at the latest:

Standards

Content

Application date

Recognition of Deferred Tax Assets for Unrealised Losses

Amendments to IAS 12 Amendments to IAS 7 Annual improvements to IFRS

Applicable from 1 January 2017 Applicable from 1 January 2017 Applicable from 1 January 2017

Disclosure Initiative

2014-2016 cycle – Amendment to IFRS 12

These new standards have not had a material impact on the Group’s results and financial position.

77

SOMFY – ANNUAL FINANCIAL REPORT 2017