SOMFY - Annual Financial Report 2020

06 PARENT COMPANY FINANCIAL STATEMENTS

and in compliance with the general rules for the preparation and – presentation of annual financial statements. The method used to value the items in the accounts is the historical cost method.

Such share purchases could be effected by all means, including by means of acquiring blocks of shares and at any times considered appropriate by the Management Board. The company reserved the right to use options or derivative instruments, in accordance with applicable regulations. These shares are classified in account 502 “Treasury shares”. Income or losses on treasury share transactions are thus recognised as financial income/expenses. Treasury shares to be granted to employees and allocated to stock option or free share plans are valued on a plan by plan basis at the lower of acquisition cost or exercise price of the call option. Shares not yet allocated to plans or which have lapsed are valued at the lower of the average purchase price of all these shares or the average quoted stock exchange price over the month of December 2020. Allocations are valued based on the first in, first out method. Shares bought and sold to ensure the liquidity and to stimulate the secondary market and shares purchased to be retained and subsequently exchanged are valued at the lower of the average purchase price of all these shares or the average quoted stock exchange price over the month of December 2020. Disposals are valued based on the first in, first out method. At 31 December 2020, no more stock option plans existed. At its meeting of 12 November 2018, the Management Board of Somfy SA decided to allocate Somfy SA performance shares to 7 beneficiaries who are employees of Somfy Protect by Myfox. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 1 July 2021 and will not be subject to a retention obligation. During 2019, the Management Board of Somfy SA agreed on the following allocations of Somfy SA performance shares: at its meeting of 20 May 2019, allocation of Somfy performance – shares to 173 beneficiaries. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 1 July 2021 and will not be subject to a retention obligation; at its meeting of 15 November 2019, allocation of Somfy – performance shares to 1 beneficiary. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 17 November 2021 since they will be subject to a retention obligation; at its meeting of 15 November 2019, allocation of Somfy – performance shares to 10 beneficiaries. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 17 November 2021 since they will be subject to a retention obligation. During 2020, the Management Board of Somfy SA agreed on the following allocations of Somfy SA performance shares: at its meeting of 31 August 2020, allocation of Somfy – performance shares to 52 beneficiaries. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 15 September 2022. The shares vested will be available from 16 September 2022 and will not be subject to a retention obligation; SOMFY SA STOCK OPTION AND FREE SHARE ALLOCATION PLANS

EQUITY INVESTMENTS

The gross value of equity investments comprises their acquisition cost less related expenses. Writedown is recognised when the book value falls below historical cost. Book value is determined based on several assessment items, such as year-end net assets, profitability level, future prospects and share price for listed companies.

OTHER SECURITIES

The initial value of other securities comprises their acquisition cost less associated expenses. When the estimated realisable value is lower than cost, an impairment provision is recorded for the difference.

MARKETABLE SECURITIES

The gross value of marketable securities comprises their purchase price less related expenses or their transfer value, calculated using the first in, first out method. Marketable securities are valued at their average quoted stock exchange price over the month of December 2020 and are impaired when this is lower than cost. At 31 December 2020, marketable securities totalled €96.8 million, comprising: treasury shares of €98.3 million; – a provision of €1.6 million for the writedown of treasury shares. – The company has implemented several successive share buyback programmes. The most recent buyback programme was launched in 2020; it was authorised by the Combined General Meeting of 24 June 2020, and had the following objectives: to stimulate the secondary market or ensure the liquidity of the – Somfy share, by way of an investment services provider within a liquidity contract that complies with practices recognised by regulations, it being specified that within this framework the number of shares considered for the calculation of the limit specified above corresponds to the number of shares purchased less the number of shares resold; to retain the shares purchased and subsequently exchange them – or use them as payment within the framework of potential acquisitions; to ensure the coverage of stock option plans and/or free share – allocation plans (or similar) granted to employees and/or corporate officers of the Group, as well as all other shares allocated under a company or group savings scheme (or similar), in relation to employee profit-sharing and/or any other form of allocation to employees and/or corporate officers of the Group; to cover marketable securities giving right to the allocation of – company shares, in accordance with applicable regulations; to proceed with the possible cancellation of shares acquired, in – accordance with the authorisation granted or to be granted by the Extraordinary General Meeting. TREASURY SHARES

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SOMFY – ANNUAL FINANCIAL REPORT 2020