Hermès - Registration Document 2016

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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:

2016

2015

In millions of euros

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

360.3

335.8

50.7

31.3

309.6

304.4

57.0

3.9

-

-

4.1

15.8

10.7

(14.7) 309.6 360.3

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

49.0

50.7

(1) Other items primarily involve deferred taxes resulting from changes in the portion of revaluation of financial instruments recorded under equity (transferable portion) 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:

2016

2015

In millions of euros

Internal margins on inventories and provisions for inventories

263.0

231.0

Employee benefits

63.1 12.1 17.1

59.6 (4.0)

Derivatives

Impairment losses Regulated provisions

9.9

(40.8)

(43.4)

Others TOTAL

66.9

56.3

381.4

309.6

As at 31 December 2016, 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 €48.6 million (compared with €27.5 million in 2015).

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2016 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL