HERMES_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OFF BALANCE SHEET COMMITMENTS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES

NOTE 27

27.1 Financial commitments

Financial commitments are discounted at the rate of 7.88% in 2017 (7.71% in 2016).

< 1 year

1 to 5 years

> 5 years

31/12/2017

31/12/2016

In millions of euros

Bank guarantees given Bank guarantees received

2.6

3.5 0.2

5.5

11.6

13.9

- -

-

0.2

0.3

Commitments to purchase financial assets

14.4 63.9

11.0

25.4

18.3 21.7

Other commitments

45.8

-

109.7

The future non-cancellable commitments of discounted minimum payments resulting from operating leases can be analysed as follows:

< 1 year

1 to 5 years

> 5 years

31/12/2017

31/12/2016

In millions of euros

Minimum future payments - Stores

179.4

450.1 100.6 550.7

171.5

801.0 196.3 997.3

810.6 126.2 936.8

Minimum future payments - Admin and logistics buildings

38.6

57.1

TOTAL

218.0

228.6

27.2 Other off-balance sheet commitments The Group has no knowledge of any commitments other than thosemen- tioned elsewhere herein and that would not be reflected in the financial statements for the year ended 31 December 2017. To date, there is no exceptional event or dispute that would be liable to have a likely and material impact on the Group’s financial position.

Furthermore, in the normal course of its business operations, the Group is involved in legal actions and is subject to controls. A provision is recorded when a risk is identified and when its cost can be estimated.

5

RELATED-PARTY TRANSACTIONS

NOTE 28

28.1 Transactions with equity-accounted associates

The RDAI firm, as well as the SCI mentioned below, are considered to be related parties given that certainmembers of GroupManagement or members of the Supervisory Board have personal interests therein and exercise significant influence; s Émile Hermès SARL, Active Partner: Émile Hermès SARL is a société à responsabilité limitée à capital variable (limited company with variable capital). Its partners are the direct descendants of Mr Émile Hermès and his wife. Émile Hermès SARL’s Executive Chairman is Mr Henri-Louis Bauer. The Company is governed by an Executive Management Board. Each year, Hermès International pays 0.67% of the distributable profits to the Active Partner. In addition, Hermès International charges Émile Hermès SARL for certain expenses incur- red. Hermès International charged back €0.2 million in this respect in 2016;

Transactions with equity-accounted associates were not material rela- tive to the Group’s overall business activities.

28.2 Other related-party transactions

Relationships with other related parties, within the meaning of IAS 24 Related Party Disclosures can be summarised as follows: s RDAI firm: RDAI architects were appointed to carry out design work on the internal layout of all Hermès Group stores. Fees paid by the Group totalled €9.6 million excluding tax in 2017;

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