SOMFY - Annual Financial Report 2020

05 CONSOLIDATED FINANCIAL STATEMENTS

Standards, amendments and interpretations whose application is not yet mandatory Note 1.4.2

Standards

Content

Application date

Classification of Liabilities as Current or Non-Current

Applicable from 1 January 2023 according to the IASB, not yet approved by the EU Applicable from 1 January 2022 according to the IASB, not yet approved by the EU Applicable from 1 January 2022 according to the IASB, not yet approved by the EU Applicable from 1 January 2022 according to the IASB, not yet approved by the EU Applicable from 1 January 2021 according to the IASB Applicable from 1 January 2022 according to the IASB, not yet approved by the EU

Amendments to IAS 1

Amendments to IAS 16

Proceeds before Intended Use

Amendments to IAS 37

Cost of Fulfilling a Contract

Amendments to IFRS 3

Reference to the Conceptual Framework

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

IBOR Reform – Phase 2

2018-2020 Cycle (IFRS 1, IFRS 9, IFRS 16, IAS 41)

Annual improvements to IFRS

The Group did not opt for the early application of any of these new standards or amendments and is currently assessing the impact resulting from their initial application. Detailed information is available on the following website: http://www.ifrs.org

CONSOLIDATION SCOPE NOTE 2 — CONSOLIDATION METHOD NOTE 2.1

items included in the financial statements of each of these entities are measured in this functional currency.

RECOGNITION OF FOREIGN CURRENCY DENOMINATED TRANSACTIONS IN THE FINANCIAL STATEMENTS OF CONSOLIDATED COMPANIES All foreign currency denominated transactions are translated at the exchange rate applicable on the transaction date. Foreign currency denominated amounts included in the balance sheet are translated at the exchange rate applicable at year-end. Resulting translation differences are recorded in the income statement. TRANSLATION OF FOREIGN SUBSIDIARIES’ FINANCIAL STATEMENTS The financial statements of Group companies which have a different functional currency to the parent company are translated into Euro, as follows: assets and liabilities are converted into Euros at the year-end – exchange rate; income and expenses are translated at the average exchange – rate for the period, provided significant variations in the exchange rates do not call this method into question; the resulting translation adjustments are recognised in items – of other comprehensive income with a corresponding entry in the translation reserve under shareholders’ equity. Unrealised exchange differences relating to monetary values that are an integral part of the net investment in foreign subsidiaries are recorded in the translation adjustment reserve in equity until the disposal of the investment, at which date they are taken to the income statement. At 31 December 2020, no Group subsidiary operated in countries whose economy is hyperinflationary, with the exception of Argentina. Given the size of the subsidiary in Argentina, the application of IAS 29 on hyper-inflationary economies did not have a material impact on the Group’s financial statements.

EXCLUSIVE CONTROL Companies are fully consolidated when they are controlled by the Group. The concept of control means the power to govern the financial and operational policies of an affiliated company so as to benefit from its operations. Control is generally deemed to exist where the Group holds more than half of the controlled company’s voting rights. Financial statements of subsidiaries are included in the consolidated financial statements from the date of effective control transfer, until control ceases to exist. Minority shareholders’ interests are included in the balance sheet under a separate headline called “non-controlling interests”. Non-controlling interests’ share of net profit is presented separately in the income statement as an allocation of profit for the period. JOINT CONTROL AND SIGNIFICANT INFLUENCE Companies over which the Group exercises control jointly with a limited number of partners based on a contractual agreement are consolidated using the equity method. Associates are companies over which the Group has significant influence on their financial and operating policies, but does not control them. Companies over which the Group has significant influence are consolidated using the equity method. Acquisition expenses are recorded in the cost of acquisition of the shares.

The consolidation scope is presented in note 15 to the consolidated financial statements.

FOREIGN EXCHANGE TRANSLATION NOTE 2.2

The consolidated financial statements at 31 December 2020 have been prepared in Euros, which is the parent company’s functional currency. Each Group entity determines its functional currency and

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SOMFY – ANNUAL FINANCIAL REPORT 2020