HERMES_REGISTRATION_DOCUMENT_2017

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CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8.3 Deferred tax

The net change in deferred tax assets and liabilities is broken down as follows:

2017

2016

In millions of euros

Deferred tax assets at 1st January Deferred tax liabilities at 1st January Net deferred tax assets at 1st January Impact on statement of profit or loss Impact on scope of consolidation Impact of exchange rate movements

430.4

360.3

49.0

50.7

381.4

309.6

20.4

57.0

-

-

(18.5) (80.3) 303.0 349.8

4.1

10.7

Others 1

Net deferred tax assets at the end of the period Balance of deferred tax assets at the end of the period Balance of deferred tax liabilities at the end of the period

381.4 430.4

46.8

49.0

(1) Other items primarily involve the deferred tax change resulting from revaluations recorded in equity (investments and financial investments and hedging of future cash flows) and in actuarial gains and losses on employee benefit obligations. These changes had no impact on net income for the year (see Note 20.4).

Deferred taxes mainly related to the following adjustments:

2017

2016

In millions of euros

Internal margins on inventories and provisions for inventories

247.8

263.0

Employee benefits

55.9

63.1 12.1 17.1

Derivatives

(51.9)

Impairment losses Regulated provisions

20.4

(42.9)

(40.8)

Other TOTAL

73.7

66.9

303.0

381.4

As at 31 December 2017, tax loss carry-forwards and other temporary differences that did not lead to the recognition of deferred tax assets repre- sented potential tax savings of €50.7 million (compared with €48.6 million in 2016).

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2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL