SOMFY - Annual financial report 2018

07 CONSOLIDATED FINANCIAL STATEMENTS

TAX PROOF NOTE 11.1

€ thousands

31/12/18 165,837

31/12/17 169,847

Profit before tax from continuing operations

Share of expenses on dividends

1,732

1,600

Goodwill impairment

421

–

Reclassification of CVAE to Income tax Reclassification of CICE to Employee expenses Reclassification of CIR to Other operating income

-3,825 -2,382 -6,645

-3,589 -2,657 -5,717 2,924 -7,439 -31,707 130,700 34.43% 45,000

Other

988

Permanent differences

-9,712 -32,530 123,594 34.43% 42,554

Net profit taxed at reduced rate Net profit taxable at standard rate

Tax rate in France

Tax charge recalculated at the French standard rate

Tax at reduced rate

5,042

4,915

Difference in standard rate in foreign countries

-21,165

-22,651

Tax losses for the year, unrecognised in previous periods, deficits used

3,042

942

Effect of the rate difference

-18,124 -3,678

-21,709 -6,216 -18,003

Tax credits

Other taxes and miscellaneous

3,736

GROUP TAX

29,530 17.81%

3,987 2.35%

Effective rate

The results taxed at a reduced rate involve royalties, which were taxed at 15.5% (unchanged from 2017). The main countries that contributed to the difference in the tax rate were Tunisia (€13.0 million), Germany (€0.7 million), other European countries (€5.9 million) and the United States (€1.0 million). Tax credits were primarily affected by the SOPEM tax credit (Poland): €2.6 million in 2018 compared with €5.9 million in 2017. Other taxes and miscellaneous items included, in particular, the French Corporate Value-Added Contribution (CVAE), which amounted to €3.8 million in 2018 and €3.6 million in 2017. In 2017, this item also included a total of €22.3 million in corporate income tax relief. In France, the Draft 2018 Finance Act, in keeping with the 2017 Finance Act, changed the procedures for the gradual decrease in the normal corporate income tax rate (33.1/3%), which will be spread over a period of five years as from 2018, and lead to a 25% tax rate in 2022. The deferred tax calculation has been adjusted accordingly and generated a gain of €1.1 million in 2017 and €0.2 million in 2018. The effective tax rate, restated for tax claims, the change in the deferred tax rate in France, and an additional tax credit in Poland, amounted to 17.64% at 31 December 2017. Current tax assets and liabilities

Retained losses capitalised or used

Deferred tax relating to tax losses was not capitalised where it was deemed unlikely that future taxable profits will be sufficient to absorb unused previous tax losses. The total amount of these losses was €59.2 million at the end of 2018, based on the standard tax rate, compared with €57.6 million at the end of 2017. No significant deferred tax assets were recognised in 2018 in relation to tax losses arising during the financial year or in previous years.

DEFERRED TAX RECOGNISED IN ITEMS NOTE 11.2 OF OTHER COMPREHENSIVE INCOME

€ thousands

31/12/18 31/12/17

Deferred tax assets Actuarial gains and losses on – pensions Foreign currency hedges –

2,966

2,041

17 41

– –

Raw material hedges –

Deferred tax liabilities Foreign currency hedges –

– –

166

Raw material hedges – NET DEFERRED TAX

31

The change in tax liabilities and receivables was due to the effect of tax instalments.

3,024

1,844

116

SOMFY – ANNUAL FINANCIAL REPORT 2018