Saint Gobain - Registration document 2016

9 FINANCIAL AND ACCOUNTING INFORMATION 1. 2016 Consolidated Financial Statements

Foreign currency transactions 2.1.6

carrying amount and fair value less costs to sell. Depreciation ceases when non-current assets are classified as held for sale. disposal groups held for sale are measured at the lower of Non-current assets and liabilities held for sale are presented separately on two lines of the consolidated balance sheet, and income and expenses continue to be recognized in the consolidated income statement on a line-by-line basis. At the provision adjustments should be recorded due to a change in end of each reporting period, the value of the assets and liabilities held for sale is reviewed to determine whether any a separate major line of business for the Group, and when the criteria for classification as an asset held for sale have been An operation is classified as discontinued when it represents met, or when the Group has sold the asset. Discontinued operations are reported on a single line in the Group’s income discontinued operations are reported, by type of operation, on a separate line in the consolidated statement of cash flows for the relevant periods. gains or losses net of taxes realized on the disposals of these operations. In addition, cash flows generated by the Intragroup transactions 2.1.4 All intragroup balances and transactions are eliminated in consolidation. statement. This line shows the after-tax net income from discontinued operations until the date of disposal and the foreign companies Translation of the financial statements of 2.1.5 presentation currency. The consolidated financial statements are presented in euros, which is Compagnie de Saint-Gobain’s functional and Assets and liabilities of subsidiaries outside the Eurozone are translated into euros at the closing exchange rate, while income and expense items are translated using the average exchange rate for the period, except in the case of significant exchange rate volatility. The Group’s share of any translation gains or losses is included in equity under “Cumulative translation adjustments” statement, if the transaction results in a loss of control, or recognized directly in the statement of changes in equity, if translation differences are either taken to the income the change in minority interests does not result in a loss of control. until the assets or liabilities and all foreign operations to which they relate are sold or liquidated. In this case, these their fair value less costs to sell.

the income statement. However, exchange differences relating to loans and borrowings between consolidated liabilities denominated in foreign currencies are translated at the closing rate and any exchange differences are recorded in Group companies are recorded in equity net of tax under “Cumulative translation adjustments”, as they are in exchange rates prevailing at the transaction date. Assets and Expenses and income from operations in currencies other than the Company’s functional currency are translated at the substance an integral part of the net investment in a foreign subsidiary. companies at December 31, 2016 is provided in Note 13 “Principal consolidated companies”. 2015 are presented below and a list of the main consolidated Significant changes in the Group’s structure during 2016 and Transactions carried out in 2016 2.2.1 In 2016, Saint-Gobain pursued active management of the scope of its business activities, adhering closely to the Group’s strategy. Various transactions were carried out with a view to strengthening the Group’s profile in high value-added businesses and promising markets. controlling interest in Sika, a leading construction chemicals company. The plan consists of the acquisition by Further, Saint-Gobain is continuing its plan to acquire a which, at December 31, 2016, held 16.97% of Sika’s share capital and 52.92% of its voting rights. After the acquisition, Saint-Gobain, for 2.83 billion Swiss francs (an amount fully hedged in euros), of Schenker Winkler Holding AG (SWH) positive impact on net income from year one. the Saint-Gobain Group will be able to incorporate Sika into its financial statements by global consolidation, with a Completion of this deal is subject to clearance from the December 2, 2015. Further, on August 27, 2015, the Swiss Federal Administrative Court confirmed in last resort the competent anti-trust authorities, which were all obtained on takeover bid following the acquisition of the SWH shares. validity of the opt-out clause provided in Sika’s bylaws exempting Saint-Gobain from launching a mandatory Saint-Gobain and its Board of Directors took note of the cancellation of the resolutions of the Annual General Meeting ruling handed down by the Cantonal Court of Zug on October 28, 2016, which rejected SWH’s demand for of Sika on April 14, 2015 for which SWH voting rights had been restricted, and SWH’s appeal to the Zug Supreme Court against this decision. Saint-Gobain had anticipated these decisions by extending the term of the purchase agreement relating to the disposal of SWH shares with the Burkard until December 31, 2018. family, from March 2016 to June 30, 2017. As of this date, Saint-Gobain will have the option to extend the agreement Changes in Group structure 2.2

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016