Hermès - Registration Document 2016

CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

OFF BALANCE SHEET COMMITMENTS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES

NOTE 27

27.1 Financial commitments

< 1 year

1 to 5 years

> 5 years

31/12/2016

31/12/2015

In millions of euros

Bank guarantees given Bank guarantees received

4.7 0.1

3.7 0.3

14.8

23.2

9.3 0.3

-

0.4

Commitments to purchase financial assets

-

- -

41.3

41.3 23.4

20.8 16.3

Other commitments

23.4

-

Future non-cancellable commitments for discounted payments on operating lease agreements for all stores operated by the Group worldwide are as follows:

Annual discount rate

< 1 year

1 to 5 years

> 5 years

Total

In millions of euros

Minimum future payments - Status at end of 2016 Minimum future payments - Status at end of 2015

165.4 122.7

495.3 316.6

149.9 117.7

810.5 557.0

7.71% 8.83%

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 2016. 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.

Moreover, future non-cancellable commitments in respect of discounted minimum payments on the operating leases of the administrative buil- dings (headquarters, offices) or logistics premises operated by the Group worldwide amounted to €126 million as at 31 December 2016. In total, future non-cancellable commitments in respect of discounted future minimum payments on operating lease contracts amounted to €937 million as at 31 December 2016.

5

RELATED-PARTY TRANSACTIONS

NOTE 28

28.1 Transactions with equity-accounted associates

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-Maurice 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 addi- tion, Hermès International charges Émile Hermès SARL for certain expenses incurred. Hermès International charged back €0.2 million in this respect in 2016; s ARDIAN Holding: as part of the diversification of its investments, Hermès International has a 11.71% equity interest in the company ARDIAN Holding, in which a member of the Supervisory Board has responsibilities. This commitment had been assumed prior to this person’s appointment. Certain of the above transactions constitute related-party agreements according to the definition contained in the French Commercial Code ( Code de commerce ). For further details, see the description of the pro- posed resolutions on pages 282 to 304.

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 was commissioned toundertakeadesignassignment for the application of the architectural concept to all Hermès Group stores. Fees paid by the Hermès Group amounted to €8.1 million excluding tax in 2016. 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;

2016 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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