HERMES_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 2017, mainly relating to corporate income tax. After consul- ting its legal advisors, Hermes has challenged these reassessments and intends to seek redress using the means available to it for its defence. Hermès considers that risks, disputes and litigation are the subject of appropriate provisions the amounts of which are reviewed, in coordina- tion with its legal advisors, and in accordance with the criteria of IAS 37 and IAS 12.

The provisions correspond to the estimated consequences to assets of actual or probable risks, litigation and disputes on the Group’s activities. Current provisions concern risks, disputes and litigation (tax, legal, social) as well as provisions for returns of goods in the normal course of operations. In particular, certain French companies of the Group received reas- sessment proposals for the years 2013 and 2014 at the end of

EMPLOYEES

NOTE 24

A geographical breakdown of the workforce is as follows:

31/12/2017

31/12/2016

France

8,319 1,421 3,743

7,881 1,351 3,602

Europe (excl. France)

Other geographical areas

TOTAL

13,483

12,834

A breakdown by category is as follows:

31/12/2017

31/12/2016

Production

6,249 5,130 2,104

5,917 4,865 2,052

Sales

5

Other (design, communication and administration)

TOTAL

13,483

12,834

Employee expenses in 2017 totalled €1,050.1 million, compared with €983.8 million in 2016.

POST-EMPLOYMENT AND OTHER EMPLOYEE BENEFIT OBLIGATIONS

NOTE 25

25.1 Description of plans HermèsGroup employees are eligible for short-termbenefits (paid leave, sick leave, profit-sharing), long-term benefits (long-service awards) and post-employment benefits under defined contribution/defined benefit plans (mainly retirement benefits, and supplemental pension plans). Post-employment benefits are awarded either through defined contribu- tion plans or through defined-benefit plans. 25.1.1 Defined contribution plans Under these plans, regular payments aremade to outside organisations, which are responsible for their administrative and financial manage- ment. These plans release the employer fromany subsequent obligation,

as the outside organisation takes responsibility for paying amounts due to employees (basic social security old-age plan, ARRCO/AGIRC supple- mental pension plans, defined contribution pension funds). 25.1.2 Defined benefit plans Under these plans, the employer assumes an obligation vis-à-vis its employees. If these plans are not entirely funded in advance, a provision is recorded. Post-employment and similar benefit obligations (Defined Benefit Obligations or DBOs) are measured using the projected credit unit method, based on actuarial assumptions that take into consideration specific conditions, primarily macroeconomic conditions, in the different countries in which the Group operates.

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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