SOMFY // 2022 Annual Report

05 CONSOLIDATED FINANCIAL STATEMENTS

CONTINGENT LIABILITIES NOTE 9.2

Accounting principle Note 9.2.1

Contingent liabilities correspond to potential obligations arising from past events, whose existence will only be confirmed by the occurrence of uncertain future events that are beyond the entity’s control, or from current obligations for which no cash outflow is likely to occur. Except for those resulting from business combinations, they are not recognised but disclosed in the notes to the financial statements.

Detailed information Note 9.2.2

The Group has contingent liabilities relating to legal action and arbitration or regulatory proceedings arising in the normal course of business. Each known dispute or proceeding in progress involving SOMFY or any of the Group companies was reviewed at the balance sheet date. After advice from legal counsel, allprovisions deemed necessary were madeto cover the estimated risks. All the Group’s contingent liabilities are listed in the Highlights.

EMPLOYEE INFORMATION NOTE 10 — WORKFORCE NOTE 10.1

The amount of future payments corresponding to benefits granted to employees are measured on the basis of salary increase, retirement age and death rate assumptions, and then discounted to their present value on the basis of long-term bond interest rates of prime issuers. These plans are either financed – their assets being managed separately and independently from the Group – or not, with their commitments being recognised in the balance sheet under “Employee benefits”. The provision recognised in the balance sheet corresponds to the present value of the obligations calculated as described above, less the fair value of plan assets. The different defined benefit plans are the following: – retirement benefit plans (IFC) for all French companies, in compliance with applicable collective agreements; – defined benefit pension plans in international subsidiaries (United States in particular). Re-measurements of the net defined benefit liability, which comprises actuarial gains and losses, the return on plan assets (excluding amounts accounted for in the calculation of net interest on the net liability) and, if applicable, the change in the effect of assets ceiling (excluding amounts accounted for in the calculation of net interest on the net liability) are recognised immediately in other comprehensive income. The past service cost resulting from a plan amendment or curtailment of an existing plan is immediately expensed. Expenses relating to this type of plan are recognised under employee expenses and, with regard to the accretion expense, under financial expense. Long service awards are treated as long-term benefits granted to employees and provided for on the basis of an actuarial evaluation at every year-end. Actuarial gains and losses are recognised as expenses. Also, the severance pay provision (TFR) applicable to Italian companies is treated as a long-term benefit.

The Group’s workforce at 31 December 2022, including temporary and part-time employees recorded on a full-time equivalent basis, was as follows: 31/12/22 31/12/21 Average workforce 6,905 6,906 Workforce at period end 6,736 6,878 The Group’s average workforce held steady, with the reduction in the use of temporary staff as business slowed in the second half of 2022 offset by an increase in the average permanent workforce. The Teleco Automation group has an average headcount of 103, compared with a period-end headcount of 102. Accounting principle Note 10.2.1.1 In respect of pension plan commitments, the Group contributes to pension plans or grants benefits to employees on retirement in compliance with the rules and regulations in place in each country. These benefits have been measured. Contributions paid in respect of plans analysed as defined contribution plans, for which the Group has no other obligation than paying contributions, are recognised as expenses for the financial year. For defined benefit plans relating to post-employment benefits the cost of benefits is measured using the projected unit credit method. According to this method, the rights to benefits are allocated to periods of service depending on the plans’ specificities for acquisition of rights, by taking account of a straight-line effect where the rate of acquisition of rights is not uniform to the periods of subsequent service. EMPLOYEE BENEFITS NOTE 10.2 Pensions and other long-term benefits Note 10.2.1

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SOMFY – ANNUAL REPORT 2022