SOMFY_ANNUAL_FINANCIAL_REPORT_2017

07 CONSOLIDATED FINANCIAL STATEMENTS

INVENTORIES NOTE 4.4

Inventories are valued at their procurement cost, determined using the weighted average cost method. In particular, inventory cost measurement takes into account the following items: the gross value of raw materials and supplies includes the purchase price and ancillary expenses; – expenses incurred to bring inventories to the place they are located, and in the condition they are in, are integrated in inventory – procurement cost; manufactured products are measured at production cost, which includes consumables, direct and indirect production expenses and – depreciation charges of assets used in the manufacturing process; intragroup profits included in inventories are eliminated; – borrowing costs are not included in the cost of inventory. – The value of inventories and work in progress is impaired when their net realisable value is lower than their book value. Net realisable value is the estimated selling price under normal business conditions, after deducting estimated completion costs and estimated selling expenses.

€ thousands

31/12/17

31/12/16

Gross value Raw materials and other supplies Finished goods and merchandise

65,562 131,127 196,689 –11,982 184,707

56,059 125,143 181,202 –11,458 169,744

Total

Provisions NET VALUES

Value 31/12/16

Net charges

Exchange rate movement

Value 31/12/17

€ thousands

–11,982

Inventory provisions

–11,458

–799

274

TRADE RECEIVABLES NOTE 4.5

Trade receivables are recorded at their nominal value and a provision for writedown is established when receivables are unlikely to be collected.

€ thousands Gross value

31/12/17 188,104 –14,623 173,482

31/12/16 178,360 –15,926 162,433

Provision

NET VALUE

Value 31/12/16

Charges Reversals used

Reversals unused

Exchange rate movement

Value 31/12/17

€ thousands

–14,623

Provision for bad debts

–15,926

–2,527

2,239

955

637

At 31 December 2017, the maturity profile of trade receivables was as follows:

Overdue between

Not overdue

Total

0 to 3 months

3 to 6 months

6 to 9 months

More than 9 months

€ thousands

Trade receivables 188,104 Credit insurance contracts, both in France and internationally, mitigate the consequences of customer default. Approximately 80% of sales are covered by such contracts. It is appropriate to note that the current method for determining provisions for trade receivables complies with the requirements of IFRS 9 – Financial Instruments. 142,041 25,790 5,964 2,566 11,743

85

SOMFY – ANNUAL FINANCIAL REPORT 2017