Hermès - Registration Document 2016

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22.3 Interest rate and liquidity risks TheHermès Group’s policy is tomaintain a positive treasury position and to have cash available in order to be able to finance its growth strategy independently. The Group’s treasury surpluses and needs are directly managed or overseen by Hermès International’s Treasury Management department in accordance with a conservative policy designed to avoid the risk of capital loss and to maintain a satisfactory liquidity position. Cash surpluses are invested mainly in money-market mutual funds and cashequivalentswitha sensitivity of less than0.5%anda recommended investment period of less than three months. The items recognised by the Group as “Cash and cash equivalents” stric- tly correspond with the criteria used in the AMF position, as updated

in 2011. The investments are regularly reviewed in accordance with Group procedures and in strict compliance with the qualification criteria as defined by IAS 7 Cash flow statement, and the recommendations of the AMF. As at 31 December 2016, these analyses had not led to changes in the previously adopted accounting classification. From time to time, the Group uses financial instruments such as swaps and interest rate derivatives to hedge part of its payables and recei- vables against interest rate fluctuations. The risk control and management procedures are identical to those applied to foreign exchange transactions. The following interest rate risks involve only items in thenet cashposition. Moreover, the interest rate risks are not material as concerns the finan- cial assets and liabilities not included in the net cash position.

As at 31/12/2016

< 1 year

1 to 5 years

> 5 years

Total

Floating rate

Fixed rate

In millions of euros

Financial assets

2,328.9 1,772.0

- - - - - -

- - - - - -

2,328.9 1,772.0

2,153.9 1,597.0

175.0 175.0

Euro Yuan

72.9

72.9

72.9

- - - -

US dollar

139.3

139.3

139.3

Yen

21.0

21.0

21.0

Others

323.7

323.7

323.7

20.2

1.6 0.9

1.1

23.0

20.7

2.3 0.5

Financial liabilities 1

Euro

8.8 0.1

- -

9.7 0.1

9.2 0.1

5

Yen

-

11.4

0.7

1.1

13.2

11.3

1.8

Others 2

Net cash position before hedging Net cash position after hedging

2,308.7 2,308.7

(1.6) (1.6)

(1.1) (1.1)

2,305.9 2,305.9

2,133.3 2,133.3

172.7 172.7

As at 31/12/2016

< 1 year

1 to 5 years

> 5 years

Total

Floating rate

Fixed rate

In millions of euros

Financial assets

2,328.9 2,328.9

- -

- -

2,328.9 2,328.9

2,153.9 2,153.9

175.0 175.0

Cash and cash equivalents

20.2

1.6

1.1 1.1

23.0

20.7

2.3 1.8 0.5

Financial liabilities 1

Medium- and long-term financial debt Bank overdrafts and short-term debt

-

- - -

2.7

0

20.2

- -

20.2

20.7

Current accounts in debit

-

-

-

Net cash position before hedging Net cash position after hedging

2,308.7 2,308.7

(1.6) (1.6)

(1.1) (1.1)

2,305.9 2,305.9

2,133.3 2,133.3

172.7 172.7

(1) Excluding commitments to buy out non-controlling interests (€18.0 million as at 31 December 2016). (2) Mainly consists of long-term reducing fixed-rate loans taken out by Hermès India Retail and Distributors, floating-rate loans taken out by Hermès Brazil and foreign subsidiaries’ bank overdrafts.

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