SOMFY - Annual financial report 2019

07 CONSOLIDATED FINANCIAL STATEMENTS

OPERATIONS TREATED IN ACCORDANCE NOTE 2.4 WITH IFRS 5

Pursuant to the application of IFRS 5: in the case of balance sheet items reclassified as assets and – liabilities held for sale, no adjustments are made to comparative figures for prior periods; income statement and cash flow statement items relating to – the individual assets held for sale are not restated. DISCONTINUED OPERATIONS A discontinued operation is a component of Group activities whose business and cash flows are clearly separate from the remainder of the Group and: represents either a separate major line of business or a – geographical area of operations; is part of a single coordinated plan to dispose of a separate – major line of business or geographical area of operations; or is a subsidiary acquired exclusively with a view to resale. – Classification as a discontinued operation takes place at the time of sale or earlier if the activity meets the criteria for classification as held for sale. When an activity is classified as a discontinued operation, the comparative statement of comprehensive income is restated as if the entity had met the criteria for classification as a discontinued operation from the start of the comparative period. It should be noted that new rules of governance were adopted at Dooya at the end of June 2018 without involving any changes to the capital structure but consolidating the minority shareholder’s role with joint control over the entity. Pursuant to IFRS 10 and 11, these changes resulted in Dooya being excluded from full consolidation and its consolidation under the equity accounting method at its fair value as determined by an independent expert. Given the change in governance detailed above, it met the IFRS 5 criteria for classification as “Discontinued Operations”. The Group replaced the term “Discontinued Operations” with the term “Operations treated in accordance with IFRS 5” throughout this annual financial report, terminology that is more appropriate to the transaction. The impacts of the transaction had been isolated in a specific item in the income statement and the cash flow statement to 31 December 2018 (see note 2.4.1 of the 2018 annual financial report).

ASSETS HELD FOR SALE Pursuant to IFRS 5 “Non-current assets held for sale”, a non-current asset or asset group must be classified in the balance sheet as held for sale if its book value will be recovered principally through a sale transaction rather than through continuing use. Within the meaning of the standard, “sale” includes sales, distributions and exchanges against other assets. The non-current asset or asset group held for sale must be available for immediate sale in their present condition subject only to terms that are usual and customary for sales of such assets and their sale must be highly probable. For a sale to be regarded as highly probable, the following criteria must be met: the appropriate level of management must be committed to – a disposal plan; an active programme to locate a buyer and complete the – plan must have been initiated; the asset must be actively marketed for sale at a price that is – reasonable in relation to its current fair value; the disposal must be reliably expected to be completed – within 12 months from the reclassification of the assets as held for disposal or exchange; the actions required to complete the plan must indicate that – it is unlikely that significant changes will be made or that the plan will be withdrawn. Prior to their reclassification as “Assets held for sale”, the non-current asset or assets and liabilities of the disposal group are measured in accordance with their respective applicable standards. Following their reclassification as “Assets held for sale”, the non-current asset or group of assets is measured at the lower of its net book value and its fair value less costs to sell, an impairment loss being recognised where relevant. On reclassification of a non-current asset as held for sale, the depreciation/amortisation of this asset ceases. In the case of a disposal resulting in a loss of control, the assets and liabilities of the entire subsidiary are classified as assets and liabilities “held for sale” in the “Assets held for sale” and “Liabilities related to assets held for sale” balance sheet items, as soon as the disposal meets the classification criteria of IFRS 5.

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SOMFY – ANNUAL FINANCIAL REPORT 2019