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gfi.world
2017
Annual Financial Report
Registration Document We draw the attention of the recipient that this Registration document is an English non-binding translation for information purposes only. In case of discrepancies between the French and English version, the French version shall prevail.
CO
NTE
NTS MANAGEMENT REPORT 3
CHAIRMAN'S MESSAGE 4
KEY FIGURES 6
1 PRESENTATION OF THE GROUP AND ITS BUSINESS 9
General overview of the business1.1. 10Geographical zones1.2. 11Presentation of the Group1.3. 12Simplified Group organisation chart at March 1.4.20, 2018 18Financial data from the consolidated financial 1.5.statements 20Financial data from the corporate financial 1.6.statements 22Highlights1.7. 23Other information1.8. 25Research and development1.9. 27IT services market and outlook for the Group1.10. 28Corporate Management – Human Resources1.11. 29Subsequent events to the closing date1.12. 30Risk factors1.13. 31Significant matters likely to impact a takeover 1.14.bid 41
2 CORPORATE SOCIAL RESPONSIBILITY 43
Social information2.1. 44Environmental information2.2. 60Information on social commitments to 2.3.promote sustainable development 67Ethics, at the heart of the Group's business 2.4.practices 69Conclusion2.5. 72Overview of social and environmental 2.6.indicators 73Methodological note2.7. 76Independent verifier’s report on consolidated 2.8.social, environmental and societal information presented in the management report 78
3 COMPANY SHARES AND SHARE CAPITAL 81
General information3.1. 82Shareholding structure at December 31, 20173.2. 83Share capital and changes in share capital3.3. 86Share buybacks3.4. 87Other information on shares – Stock market 3.5.prices 89
4 REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE 93
New governance Model4.1. 94List of the main positions held and functions 4.2.carried out by the gfi informatique corporate officers 97Related-party agreements and 4.3.commitments 108Compensation paid to corporate officers4.4. 110Other information on the corporate officers4.5. 114Corporate governance4.6. 115Application of the recommendations in the 4.7.AFEP-MEDEF Code 120Significant matters likely to impact a takeover 4.8.bid 120List of financial authorisations granted as at 4.9.December 31, 2017 121Board of Directors’ report on free shares4.10. 122Supplementary report on the compensation 4.11.of executive officers 123
5 CONSOLIDATED FINANCIAL STATEMENTS 127
Consolidated financial statements5.1. 128Notes to the consolidated financial 5.2.statements 133Statutory Auditors’ report on the 5.3.consolidated financial statements 169
6 CORPORATE FINANCIAL STATEMENTS 173
Corporate financial statements 6.1. 174Notes to the corporate financial statements6.2. 176Other information6.3. 198Statutory Auditor's Report on the financial 6.4.statements 200Statutory auditor's report on related party 6.5agreements and commitments 203
7 ADDITIONAL INFORMATION 209Company information7.1. 210About the Company's senior management7.2. 213Person responsible for the document7.3. 213Persons responsible for auditing the financial 7.4.statements 214Financial communication7.5. 215Cross-reference table and index 7.6. 216Notes 218
1Gfi Informatique - 2017 REGISTRATION DOCUMENT
2017REGISTRATION DOCUMENT Annual financial report
This Registration Document was registered with the Autorité des Marchés Financiers (French Financial Markets Authority - AMF), on April 18th, 2018, pursuant to Article 212-13 of theGeneral Regulation of the AMF. It may be used in support of a financial transaction if complemented by a transaction note validated by the AMF. This document was prepared by theissuer and engages the liability of its signatories.
This Registration Document is available on the Gfi Informatique website: www.gfi.world and from the Group Legal and Compliance Department, 145, boulevard Victor Hugo, 93400Saint-Ouen, France.
Gfi Informatique’s website contains comprehensive information about the Group (strategy, operations, subsidiaries, key figures, financial information, etc.).In application of Article 28of Regulation (EC) No. 809/2004 of the Commission, the following information is included by reference in this Registration Document.
the consolidated and individual financial statements and the corresponding audit reports which appear on pages 101 to 181 of the Registration Document for the 2015 financial year•filed with the AMF on April 15, 2016 under number D.16-0357;the financial information set out on pages 9 to 101 and 183 to 192 of the 2015 Registration Document registered with the AMF on April 15, 2016 under number D.16-0357;•the consolidated and individual financial statements and the corresponding audit reports which appear on pages 117 to 196 of the Registration Document for the 2016 financial•year filed with the AMF on April 7, 2017 under number D.17-0358;the financial information set out on pages 9 to 196 of the 2016 Registration Document registered with the AMF on April 7, 2017 under number D.17-0358.•
The parts of these documents not included are either not relevant to investors or covered elsewhere in the Registration Document.
2 Gfi Informatique - 2017 REGISTRATION DOCUMENT
3Gfi Informatique - 2017 REGISTRATION DOCUMENT
MANAGEMENT REPORT
Dear Shareholders,
As required by law and the Memorandum and Articles of Association, you have been convened to this Ordinary Annual General Meeting so that wemight report on the activities of the Company and the Gfi Informatique Group during the financial year ending on December 31, 2017, itsorganisation, and present the Group’s prospects to you.
The information presented below in Chapters 1 to 4 and their references to Chapters 5 and 6 comprise the Management Report. The corporatesocial responsibility report can be found in Chapter 2 of this report.
Chairman’s message
Vincent RouaixChairman and General Manager
Dear Shareholders,
After a turning point in the development of the Gfi informatique Group in 2016, marked by the takeover of our Group by Mannai Corporation, 2017 was distinctly a year of consolidation and transition.
Consolidation in terms of shareholdings, with Mannai Corporation’s acquisition, as planned, of an additional 29% interest in May 2017, bringing the total stake held by our leading shareholder and partner to 81%; the continuation of this process will ultimately take Mannai Corporation’s interest to 95% as from June 2018, thereby securing the support of a new shareholder and industrial partner for our Group in the long term.
Consolidation in terms of international development as well, through the successful integration of the Roff and Efron group acquisitions at the end of 2016. The move has enabled the Group to strengthen its presence in high-potential business areas (the Iberian peninsula) and win new markets (LatAm). Additionally, the acquisition of the Roff group has also helped Gfi informatique to signifi cantly ramp up its integration and maintenance offering around SAP technologies, thus allowing the Group to include a new SAP Business Line – its sixth – into its range of offerings.
At the same time, the Group has continued its business development with its Digital, Outsourcing, Omni-Commerce and Migration offerings, plus its proprietary software, in order to provide customers
4 Gfi Informatique - 2017 REGISTRATION DOCUMENT
Chairman's message
Chairman’s message
A year of consolidation and transition.
with top support in their digital transformation. The France business unit has accordingly seen significant signings in the omni-commerce segment, and won substantial market share for its key accounts while building up its industrial and innovation capacities and continuing its recruitment efforts.
With revenue for the 2017 financial year reaching 1,131.9 million euros, an increase of 11.5% over the previous period, our Group once again posted exceptional growth, also marked by a significant increase in net profit rising to 37.3 million euros, an increase of 16.2% year on year.
Consolidation internationally – international operations now account for 25.5% of consolidated revenue, up from 18% in 2016 – was also accompanied by the marked contribution of these activities to our earnings with the operating margin of international activities representing 30.1% of the consolidated total. The Group’s successful international expansion since 2015 demonstrates our ability to integrate and develop new activities in new territories, and to combine organic growth and ambitious external growth in line with our ambitions.
2017 was a year of transition, leading into the year 2018 during which our objectives in terms of growth and margin improvement will move up a scale, starting with a fresh round of acquisitions through which the Group will be able to consolidate its industrial capacity and extend its international footprint. The two acquisitions made in February 2018, namely Cynapsys, a Tunisian multi-specialist group working
with French, Tunisian and African customers, and Gesfor, a Mexican company operating primarily in the banking sector in Latin Amercia, pertain to this two-fold objective.
Lastly, the imminent launch of an agreed takeover bid for Realdolmen, a leader in IT services in Belgium and Luxembourg with a headcount of 1,250 should, if the deal goes through, significantly strengthen the Gfi informatique Group’s presence in Belgium and Luxembourg by combining the skills of both companies.
Finally, we will be pursuing our efforts to invest in innovation and new industrial solutions, while maintaining one of the key features of our Group, namely our closeness to our customers backed by an ability to attract talent.
It is my pleasure to present you with the 2017 Registration Document, in which you will read of our achievements and our financial results, the quality of which depends on the full-hearted involvement of all our employees and the ongoing support of our customers.
Vincent Rouaix
Chairman and General Manager
5Gfi Informatique - 2017 REGISTRATION DOCUMENT
20
2018 // COMPANY PROFILE
Gfi Informatique Group
E M P L O Y E E S
COUNTRIES VALUES
SERVICECENTERS
millionsREVENUE
AMBITION INNOVATION COMMITMENTTEAM SPIRITSOCIAL RESPONSIBILITY
•LILLE•LYON•NANTES•TOULOUSE•MEUDON
•ALICANTE (Spain)
•ZAMUDIO (Spain)
•LISBON (Portugal)
•COVILHÃ (Portugal)
•BRAGANÇA (Portugal)
•CASABLANCA (Morocco)
•WARSAW (Poland)
•POZNAŃ (Poland)
•LUBLIN (Poland)
•PUNE (India)
•SÃO PAULO (Brazil)
•BOGOTA (Colombia)
•MACAU (APAC)
IN FRANCE INTERNATIONAL
16,000
18
5
1,132
FRANCE SPAINPORTUGALBELGIUMSWITZERLANDLUXEMBOURGENGLAND
POLANDROMANIAMOROCCOTUNISIAIVORY COASTANGOLAUSA
MEXICOPANAMA COLOMBIABRAZILSINGAPOREUAE
BUSINESSLINES
BUSINESSSECTORS
GROUPPRACTICES
BUSINESSSOLUTIONS
CONSULTING APPLICATION SERVICES INFRASTRUCTURE SERVICES BUSINESS SOLUTIONS SOFTWARE SAP
INSURANCEDISTRIBUTION-SERVICESHEALTH-SOCIALPUBLIC SECTORTELECOM
Cybersecurity
DevOps
DigitalTransformation
Digital Banking
Industry 4.0
IoT
OmniCommerce
Smart Cities
www.gfi.world
R2-22/04/13
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Recommandation de la taille minimale :
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PARTNERSHIP—Gfi Informatique is a major partner of Paris Saint-Germain Handball
6
86 Industrialisation
* As of March, 20th 2018
BANKING-FINANCE-INSURANCEINDUSTRY-AEROSPACE-TRANSPORTPUBLIC SECTORTELECOM-MEDIA-ENTERTAINMENTENERGY-UTILITIES-CHEMICALSDISTRIBUTION-SERVICES
STOCK EXCHANGE— Gfi Informatique is listed on the Euronext Paris Market.Code ISIN: FR 0004038099
Innovation Proximity
€
6 Gfi Informatique - 2017 REGISTRATION DOCUMENT
KEY FIGURES
20
2018 // COMPANY PROFILE
Gfi Informatique Group
E M P L O Y E E S
COUNTRIES VALUES
SERVICECENTERS
millionsREVENUE
AMBITION INNOVATION COMMITMENTTEAM SPIRITSOCIAL RESPONSIBILITY
•LILLE•LYON•NANTES•TOULOUSE•MEUDON
•ALICANTE (Spain)
•ZAMUDIO (Spain)
•LISBON (Portugal)
•COVILHÃ (Portugal)
•BRAGANÇA (Portugal)
•CASABLANCA (Morocco)
•WARSAW (Poland)
•POZNAŃ (Poland)
•LUBLIN (Poland)
•PUNE (India)
•SÃO PAULO (Brazil)
•BOGOTA (Colombia)
•MACAU (APAC)
IN FRANCE INTERNATIONAL
16,000
18
5
1,132
FRANCE SPAINPORTUGALBELGIUMSWITZERLANDLUXEMBOURGENGLAND
POLANDROMANIAMOROCCOTUNISIAIVORY COASTANGOLAUSA
MEXICOPANAMA COLOMBIABRAZILSINGAPOREUAE
BUSINESSLINES
BUSINESSSECTORS
GROUPPRACTICES
BUSINESSSOLUTIONS
CONSULTING APPLICATION SERVICES INFRASTRUCTURE SERVICES BUSINESS SOLUTIONS SOFTWARE SAP
INSURANCEDISTRIBUTION-SERVICESHEALTH-SOCIALPUBLIC SECTORTELECOM
Cybersecurity
DevOps
DigitalTransformation
Digital Banking
Industry 4.0
IoT
OmniCommerce
Smart Cities
www.gfi.world
R2-22/04/13
valise logo quadrichromie - PSG HANDBALL
PSG
Cyan
Noir
Magenta Jaune
Recommandation de la taille minimale :
L 13,6 mm
ATTENTION ! INFORMATIONS TECHNIQUES Le logo contient des e�ets : en cas de réduction ou d'augmentation,
véri�er que le �chier vectoriel soit bien en 800 ppp (MENU > EFFET > PARAMETRES DES EFFETS DE PIXELLISATION DU DOCUMENT > 800 PPP) et que l'option "Mise à l'échelle des contours et des e�ets" (pop-up de la fenêtre Transformation) soit cochée.
Sinon utilisez les �chiers tif, jpg ou png selon les besoins.
PARTNERSHIP—Gfi Informatique is a major partner of Paris Saint-Germain Handball66666666666666666666666666666666666
66666666666666
6
8888888888888886 Industrialisation
BANKING-FINANCE-INSURANCEINDUSTRY-AEROSPACE-TRANSPORTPUBLIC SECTORTELECOM-MEDIA-ENTERTAINMENTENERGY-UTILITIES-CHEMICALSDISTRIBUTION-SERVICES
STOCK EXCHANGE— Gfi Informatique is listed on the Euronext Paris Market.Code ISIN: FR 0004038099
Innovation
Industrialisation Proximity
€
7Gfi Informatique - 2017 REGISTRATION DOCUMENT
8 Gfi Informatique - 2017 REGISTRATION DOCUMENT
9Gfi Informatique - 2017 REGISTRATION DOCUMENT
1PRESENTATIONOF THE GROUP
AND ITS BUSINESSGENERAL OVERVIEW OF THE 1.1.BUSINESS 10Group performance: growth in revenue and 1.1.1.EBITDA 109.1% Growth in operating income and 16.2% 1.1.2.growth in net income 10Workforce1.1.3. 10
GEOGRAPHICAL ZONES1.2. 11France1.2.1. 11International1.2.2. 12
PRESENTATION OF THE GROUP1.3. 12Six Business Lines1.3.1. 12Six sectors1.3.2. 15
SIMPLIFIED GROUP ORGANISATION 1.4.CHART AT MARCH 20, 2018 18
FINANCIAL DATA FROM THE 1.5.CONSOLIDATED FINANCIAL STATEMENTS 20Income statement and financial position1.5.1. 20Cash flow and debt1.5.2. 21
FINANCIAL DATA FROM 1.6.THE CORPORATE FINANCIAL STATEMENTS 22Income statement1.6.1. 22Balance sheet1.6.2. 22
HIGHLIGHTS1.7. 23Highlights of the financial year: Friendly takeover 1.7.1.by Mannai Corporation 23New Governance model1.7.2. 24Dividends paid out following the Combined 1.7.3.General Meeting of May 22, 2017 24Continued roll-out of the Group’s development 1.7.4.strategy 24
OTHER INFORMATION1.8. 25Subsidiaries and shareholdings – Inventory of 1.8.1.marketable securities 25Five-year results summary1.8.2. 25
Allocation of Gfi Informatique SA net income1.8.3. 25Dividends and dividend policy1.8.4. 26Supplier and clients terms of payment of Gfi 1.8.5.Informatique SA 26Acquisitions of stake and control during the year1.8.6. 27
RESEARCH AND DEVELOPMENT1.9. 27
IT SERVICES MARKET AND OUTLOOK 1.10.FOR THE GROUP 28Market and trends1.10.1. 28Outlook for the Group1.10.2. 28
CORPORATE MANAGEMENT – 1.11.HUMAN RESOURCES 29Employee profit sharing1.11.1. 29Employee shareholders1.11.2. 29
SUBSEQUENT EVENTS TO THE 1.12.CLOSING DATE 30
RISK FACTORS1.13. 31Operational risks – Legal risks1.13.1. 31Financial risks1.13.2. 32Strategic risks1.13.3. 33Intellectual property risks1.13.4. 33Insurance and risk cover1.13.5. 33Financial risks related to the effects of climate 1.13.6.change 34The Company's low-carbon strategy1.13.7. 34Information on the internal control and risk 1.13.8.management procedures relating to the preparation and processing of accounting and financial information Summary description of the internal control 35
SIGNIFICANT MATTERS LIKELY TO 1.14.IMPACT A TAKEOVER BID 41
10 Gfi Informatique - 2017 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP AND ITS BUSINESS
General overview of the business1
GENERAL OVERVIEW OF THE BUSINESS1.1.
Group performance: growth in revenue and EBITDA (1)1.1.1.
Group revenue for the 2017 financial year totalled 1,131.9 millioneuros, up 11.5% compared to the previous financial year. On alike-for-like consolidation scope and exchange rate basis, theCompany grew by 2.0, including 0.4% in France and 9.1% in theinternational market.
EBITDA was 88.2 million euros versus 80.1 million euros in 2016. Itwas up by 10.1% and represented 7.8% of revenue. The Group’soperating margin was 69 million euros, i.e. 6.1% of revenue comparedwith 61.7 million euros in 2016, an increase of 11.8% in value terms.
IN FRANCE: REVENUE INCREASERevenue in France rose 1.2% (0.4% on an organic basis) to 842.9million euros (74.5% of Group revenue in 2017). It is worthremembering that growth in France reflects an adverse calendareffect, with two fewer working days than in 2016, and the expectedfall-off in activity on the 3SI outsourcing contract, signed in 2016.Restated for this impact, organic growth would have been 3.0%,instead of 0.4%.
plans, with a resulting significant turnaround in sales. On the basis ofexactly the same calendar as last year, we posted 7.7% organic growthin the fourth quarter. At the same time, France has continued todevelop business in the Digital, Outsourcing, Omni-commerce,Migration and proprietary software markets. These efforts wererewarded with significant contracts in Omni-commerce and largermarket shares with key accounts.
Profitability in terms of EBITDA and operating margin declined veryslightly, by 0.2 point. The contraction was due in part to recruitmentdifficulties in the first half, which dampened growth and increased ouruse of subcontracting. Hence, we powered ahead with our hiring
INTERNATIONALLY: REVENUE UP, SUCCESSFUL INTERNATIONAL EXPANSIONRevenue for the year soared by 58.2% to 289 million euros, withorganic growth of 9.1%. International activity accounted for 25.5% ofsales compared with 18.0% the previous year, in line with the Group’sgoal of stepping up its international expansion. Note that in 2016 theGroup acquired the entities Impaq, Efron and Roff.
At 20.8 million euros, the operating margin accounted for 30.1% oftotal consolidated operating margin and represented 7.2% of totalrevenue, compared with 6.8% in the prior year. This organic growthand the very significant improvement in operating margindemonstrate the Group's capacity to consolidate and develop newactivities in new geographies.
9.1% Growth in operating income and 16.2% 1.1.2.growth in net income
Operating income came out at 55.8 million euros, up 9.1% on 2016.Higher restructuring costs meant that growth in operating income wasslightly lower than the increase in operating margin.
Net income grew by 16.2% to 37.3 million euros while the dilutedearnings per share rose from 0.49 euro in 2016 to 0.56 euro in 2016.
Workforce1.1.3.
At December 31, 2017, the Group had 14,800 employees, including 9,800 in France.
EBITDA: Operating margin excluding non cash items.(1)
11Gfi Informatique - 2017 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP AND ITS BUSINESS
Geographical zones
1GEOGRAPHICAL ZONES1.2.
Summary by geographical zone
Following the acquisitions of Efron, Roff and Impaq in 2016, management reorganised the Group's geographical zones creating two newgeographical zones: Latam and Rest of the World.
(in thousands of euros) 2017 France Spain Portugal LatAm Belux Switzerland Poland Africa
Restof theWorld
Revenues 1,131,874 842,860 126,992 76,706 15,670 27,464 9,734 15,914 12,668 3,866
Operating margin 68,994 48,234 6,623 7,845 694 1,728 398 2,897 423 152
Operating marginb % 6.1% 5.7% 5.2% 10.2% 4.4% 6.3% 4.1% 18.2% 3.3% 3.9%
(in thousands of euros) 2016 France Spain Portugal LatAm Belux Switzerland Poland Africa
Rest ofthe
World
Revenues 1,015,415 832,182 102,989 30,378 n/a 23,950 2,060 13,360 10,496 n/a
Operating margin 61,733 49,300 5,370 2,948 n/a 1,150 (465) 2,360 1,070 n/a
Operating margin % 6.1% 5.9% 5.2% 9.7% n/a 4.8% (22.6)% 17.7% 10.2% n/a
(in thousands of euros)Variation
2017/2016 France Spain* Portugal* LatAm Belux Switzerland* Poland* Africa
Rest ofthe
World
Revenues 116,459 10,678 24,003 46,328 15,670 3,514 7,674 2,554 2,172 3,866
In % 11.5% 1.3% 23.3% 152.5% n/a 14.7% 372.5% 19.1% 20.7% n/a
Operating margin 7,261 (1,066) 1,253 4,897 694 578 863 537 (647) 152
In % 11.8% (2.2)% 23.3% 166.1% n/a 50.3% (185.6)% 22.8% (60.5)% n/a
The difference in the scopes of Spain, Portugal, Switzerland and Poland is due to geographical zones.*
France1.2.1.
In 2017 France returned to growth in the fourth quarter and ended theyear brilliantly with 7.7% organic growth, on the basis of the samecalendar as the previous year.
Full-year organic growth was 0.4%, despite an unfavourable calendareffect (two fewer working days than in 2016).
Moreover, restated for the expected impact of the 3SI outsourcingcontract on e-commerce, organic growth would have been 3.0%instead of 0.4%.
Our successes during the year are reflected in the quality of ourbusiness indicators. At December 31, 2017 the order book was 22.4%higher and the weighted pipeline (1) was up 13.3%, while the 12-monthyear-on-year book-to-bill ratio was 1.35.
At December 31, 2017, the main indicators remained at the previousyear's high levels.
Weighted pipeline: Set of potential cases weighted by chance of winning.(1)
12 Gfi Informatique - 2017 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP AND ITS BUSINESS
Presentation of the Group1
International1.2.2.
Internationally, revenue for the year increased by 58.2% to 289million euros, with organic growth of 9.1%.
the 8.7% organic growth in existing business. Revenue in Spainremained stable overall, notwithstanding the impact of anunfavourable calendar effect (one less working day than in 2016).Iberia-Latam (19.4% of revenue): generated 57.3 million euros in
fourth-quarter revenue, a 15.8% increase. This robust growth showsthe momentum of the local activities, notably in Portugal, wheregrowth was 46.1% on the acquisition of Roff in November 2016 and
Northern and Eastern Europe (4.7% of revenue): sustained 17.2% infourth-quater organic growth driven by a strong performance inPoland and the success of outsourcing in Telecoms.
PRESENTATION OF THE GROUP1.3.
Six Business Lines1.3.1.
Gfi Informatique is a major player in value-added IT services and Software, which strengthened its international positioning in 2016 following theacquisition of Impaq in Eastern Europe, Efron in Spain and South America, and Roff in Portugal, South America and Angola. It occupies a uniquestrategic position between global operators and niche providers. With its profile as a multispecialist, the Group provides its customers with localservice, combined with sector-based organisation and industrial quality solutions. The Group has grown considerably by using its skills andexpertise in five Business Lines.
Group revenue per Business Line
Business Solutions10%
Infrastructureservices & Outsourcing
26%Application Services
41%
12% Software
4% Consulting
7% SAP
At December 31, 2017 Total ConsultingBusiness
SolutionsApplication
ServicesInfrastructure
Services Software SAP
Revenue per Business Line (in millions of euros) 1,131.9 47.2 113.8 467.7 293.7 129.3 80.2
13Gfi Informatique - 2017 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP AND ITS BUSINESS
Presentation of the Group
1Consulting
The Consulting Business Line assists Gfi Informatique’s clients toimprove their performance. The Consulting team intervenes in largetransformation projects regarding customers Information Systemdimension.
Its goal is to help Gfi Informatique’s clients deploy their strategy andassist them in their projects of transformation as digitaltransformation. The Consulting Division is the spearhead of the GfiInformatique Group’s sector-based approach. Its main areas ofinvolvement are the banking, insurance, public and industrial sectors,providing project management and project ownership assistanceservices.
The Consulting Business Line approaches the client’s need with anoverview of its strategic trade, processes and the transformationrequired. Its consultants help translate these requirements intooperational solutions by providing know-how on the organisationaland operational roll-out of solutions, and by proposing compositesolutions to support the transformation.
The Consulting Business Line's habitual areas of expertise are projectmanagement assistance in the banking sector, operationaleffectiveness, IS governance, steering complex programmes,performance and competitiveness, management programme, asset,risk and legislation management, and the extended supply chain.
Its consultants have different backgrounds and provide appropriateand adapted solutions to the challenges facing them. They havedeveloped methodologies and pragmatic and proven approachesbased on best practices. They are reactive and accustomed tomethods implemented on structural projects on Information System,they work closely with Gfi Informatique’s clients to speed up theattainment of results.
Business Solutions
The Business Solutions, Business Line, includes functional andtechnical expertise concerning the main ERP software companies,Oracle E-Business Suite, Sage X3, and JD Edwards, HRIS solutions suchas HR-Access and PeopleSoft and Business Intelligence solutions(Business Objects, Cognos, Informatica, etc.).
It also includes the Microsoft centres of expertise (SharePoint, Office365, CRM), e-business (Liferay, ATG, Alfresco, etc.) and Innovation(social networks, mobility, etc.).
The skills of our consultants cover the whole market, from largeaccounts to SMEs, as well as different branches of industry in whichvertical solutions (services, pharmaceuticals-chemicals, consumergoods, etc.) are developed and implemented. Know-how also takesthe form of integration projects such as third-party applicationmaintenance, third-party acceptance testing or even outsourcing.
The Group has developed a SAGE skill centre (Gfi CCS) which canoperate SAGE ERP X3 in standard, in SaaS or hosted mode, in cloud,indifferently. Gfi Informatique is also a partner with Oracle and anintegrator of the Oracle e-Business Suite solution. It became theleader on this ERP after acquiring the “JDE” activities of iORGA inFrance, Spain and Portugal in September 2014.
Application Services
The Application Services Business Line covers the entire software lifecycle: from design and development, through to integration, testingand maintenance.
To help clients take up the challenge of digital transformation,Applications Services offers a comprehensive and integrated approachstructured around four complementary priorities:
urbanisation and new service-oriented architectures: SOA, API,•micro services, data management;
increased verticalisation of systems and specifically tailored•methods (end-to-end digital): "agile" methodologies and DevOps,migration to cloud computing;
systems modernisation: replatforming, technical migration of•legacy systems;
beefed up systems and data security: security by design, data•protection, cybersecurity.
The Business Line also provides clients with powerful industrialisationtools and greater capacity to increase cost effectiveness:
national services centre, nearshore services centre in the eurozone•and in North Africa;
process and method reengineering, lean IT;•automation of development and testing tasks and processes;•capitalisation and management of functional and technical•knowledge of IT assets.
It also develops and integrates comprehensive full-digital informationsystems in line with its clients' changing business models and tosupport innovation:
accelerated processes through integrated and innovative solutions•and platforms: portals, mobility, bpm, crm;
integration of data collection and mining: business intelligence, big•data, smart analytics, IoT;
development of business-specific applications using cutting-edge•technologies and methods.
Infrastructure Services and Outsourcing
The Infrastructure Services Business Line is for its clients the ITproduction promoter enabling their digital transformation.
Companies have an array of challenges and needs when it comes todigital transformation: more agility, shorter time to market, optimisedfinances, more reliable production in complex and diverseenvironments, combined with tighter security and compliance rules.To meet these requirements, Gfi Informatique offers governance andoptimisation solutions for IT processes, software production andinfrastructures. Our solutions aim to provide clients with new deliverymodels, incorporating technological and operating innovations forDevOps, Cloud Computing and IoT, and security solutions for theirenvironments.
Gfi Informatique’s commitment is underpinned by our R&D andconsulting resources, teams certified in our partners' technologies,specialised service centres in France, (Lille, Nantes and Lyon), Europe(Lisbon) and Morocco (Casablanca). Gfi Informatique is an IT servicesprovider which applies the best practices. It has built strongpartnerships with major technology suppliers.
14 Gfi Informatique - 2017 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP AND ITS BUSINESS
Presentation of the Group1
Having an experience of over 30 years, Gfi Informatique's model isgeared towards enabling large-scale transformation projects as clientsrestructure their organisation for the needs of digital transformation.Our approach is built on four fundamental areas of expertise:
technological expertise spanning all market technologies:•datacenters, systems, networks, applications and connected objects;
services expertise to provide consistent, end-to-end solutions;•process expertise for predictive and agile industrial operations;•transformation expertise: covering governance of transformation,•alignment with new uses of organisations, and technologicalinnovation as a driver of efficiency.
Our clients are key accounts, large government bodies, public serviceoperators and mid-size companies who come to us with their IToutsourcing needs as part of their multi-year transformation projects.
Gfi Informatique is positioned to support clients for major changeprojects as they migrate to Cloud Computing and Fast IT/Devopsmodels to accelerate digitisation of IT organisations. Our positioningcovers a range of dimensions: consulting, to revamp major operatingprocesses while guaranteeing consistent end-to-end service provision;integration of market technologies, especially our major partners'technologies (AWS, Microsoft, CA Tech, RedHat and Citrix);outsourced IT environment management, including IAAS(Infrastructure as a Service), PAAS (Platform as a Service) or SAAS(Software as a Service); and support for client organisations tomanage the far-reaching changes these models involve.
Software
From its position as a key player in the public sector with localauthorities and government departments and the private sectorthrough its time management offers and solutions in the insurancefield, Gfi Informatique has accelerated the growth of its SoftwareBusiness Line through the acquisitions of ITN (Insurance and Finance)in June 2014, the Ordirope group (Distribution) in June 2015, BusinessDocument (CCM) in September 2015, and the Impaq group in March2016, thus becoming a multi-sector trade publisher.
This strong growth is also supported in particular by an internationaldevelopment programme. Gfi Informatique intends to distribute itsSoftware systems in countries where it is already located (Portugal,Spain, Belux, Switzerland and Morocco) and to speed up its growth inAfrica.
It also has strong partnerships with the main players in the marketsuch as Microsoft, SAP, Orange, Oracle and TCS.
systems based on dematerialisation, cloud, mobility, CRM, ERP trades,CCM and SIG.
The Software Business Line offers innovative solutions to assist itsclients in their digital transformation through its range of Software
The Software Business Line's main function is to help its customers totake their business to the next level by facilitating sharing ofmanagement information, leveraging business intelligence, ensuringcompliance with legislation and continuously innovating.
Our key reference:
in France, all the General Councils and several hundred city hall•administrations, over 3,000 clients in all, are equipped with GfiInformatique solutions offering the widest functional coverage forhuman resources, financial management, local taxation, socialservices, school transport, asset and infrastructure management, aswell as GIS (Geographic Information Systems);
Gfi Informatique’s range of “Health and Social Action” solutions•makes the Group the partner of over 40,000 users every day. In thehealth sector more than 20,000 hospital beds and over 6 millionpatient files are managed every year;
Gfi Informatique’s range of solutions in the insurance field provides•savings, personal protection insurance and Retirement simulationsfor a segment of the safety net savings market, and offers backoffice management which mainly addresses the Tier 2 insurancemarket with over 40 clients;
thanks to its team of 220 experts and its Chronotime time range•with over 1,700 clients, Gfi Informatique is the leader in the supplyof solutions and services to companies for time management,activities management and human resources planning;
with the Bdoc suite range, Gfi Informatique gives companies the•ability to create, harmonise and manage cross-media customercommunication in an interactive and personalised way, in real time.Gfi Informatique’s business is international, with references inEurope, the United States, Africa and the Middle East representing25% of the 230 key accounts having chosen this solution.
SAP
The SAP Business Line now has more than 1,000 consultants withinthe GFI Group striving to achieve regional coverage.
With a strong presence in both France and Portugal, following theacquisition of ROFF in 2016, the Business Line serves the GfiInformatique Group's key clients through unique solutions, combiningproximity and quality industrialisation (PSA, EDP, Givaudan).
The SAP Business Line is heavily invested in vertical integrationproposals to promote digital transformation (Industry 4.0, ERP Cloud,Retail, Agribusiness) targeting intermediate-sized enterprises.
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Presentation of the Group
1Internationally, by capitalising on its positions in Morocco, Brazil andMexico, the SAP Business Line is pursuing a strategy focused on bothgrowth and the development of its products and services inFrench-speaking Africa and in Latin America.
This business strategy is based on securing new growth markets inEastern Europe and the Middle East, with a historic presence in Asia inSingapore, thus ensuring 24/7 coverage.
For its own transformation, the Gfi Group also decided to overhaul itsmanagement system using SAP's Public Cloud solutions (S/4 HANAand SAP Cloud Platform) in order to become a leader for this newmodel.
Six sectors1.3.2.
Gfi Informatique has chosen to develop a strategy based on a sectoral approach. Six major sectors have been identified at the Group level. Thisresponds to new market requirements which are increasingly oriented towards trade knowledge, beyond technological expertise. This organisationis also based on the progression in the value chain, by providing new structured offerings for each sector.
Group revenue per sector
Banking FinanceInsurance
30%
IndustryAerospace/Transport
16%
Energy UtilitiesChemicals
Telecom MediaEntertainment
10%
12%16% Public Sector
16% Distribution Services
At December 31, 2017 Total
BankingFinance
InsuranceDistribution
Services
IndustryAerospaceTransport
EnergyUtilities
ChemicalsPublicSector
TelecomMedia
Entertainment
Group Revenue per Sector (in millions of euros) 1,131.9 333.9 183.2 176.2 117.0 182.2 139.4
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Presentation of the Group1
Banking-Finance-Insurance – (BFI)
Gfi Informatique is a long-standing partner of leading players in thebanking, financial markets, insurance, retirement savings, and welfareprotection sectors. Gfi Informatique works on many industrial projectsevery year (third-party application maintenance, development,outsourcing, consulting and PMA, Software packages), making it oneof the sector’s leading companies.
The offers target the major business challenges facing clients in Franceand Europe today:
DIGITAL MODERNISATION CHALLENGE
Gfi Informatique’s goal is to ensure that its clients’ digital projectssucceed (speed of design and manufacture, parallel tasks, joint tradeand IT work, etc.), which requires new resources and a new approachto respond to the challenges of time-to-market and increaseddifferentiation, with the following services:
design of new customer routes;•accelerated design and development of mobile solutions – mobile,•tablet, connected objects;
development of solutions for in-depth customer knowledge;•implementation of 100% digital solutions, including Artificial•Intelligence and Robotic Process Automation (RPA);
design and implementation of digital brand and communication plans;•re-urbanisation and securing of IT systems; including application•modernisation and mainframe replatforming.
IS INDUSTRIALISATION CHALLENGE
Gfi Informatique’s goal is to help its clients obtain margins ofmanoeuvre (less RUN more BUILD), to refocus their in-house IT teamson urgent or critical projects, to better manage spikes in demand, andto shorten lead times by:
setting up dedicated platforms inside Gfi Informatique’s network•of service centres (France and Europe), to manage developmentmaintenance and application approval works, to superviseproduction, packaging and approval infrastructures, and to designand approve functional project ownership;
providing a complete product and service offering of Software•packages for the insurance and asset management sectors as well asto combat money laundering and fraud, providing a credible andeffective alternative to in-house applications: ITN’s Cléva, BDoc byBusiness Document, Cogit from Techmind, and kdprevent by Impaq,with additional integration and outsourcing services.
Public Sector – (PS)
Simplifying administrative tasks and improving public efficiency havebecome major concerns for national government, local authorities andpublic bodies.
The networking of the Public Sector has become obligatory.E-administration, Public Sector performance, cost-cutting and theopening and securing of Information Systems are key components inthe modernisation of public services.
In recent years, several hundred priority ICT projects have beenimplemented to help the process of state modernisation:
in the trade expertise field: oversight, financial management,•HR/time and activities management, collaboration, social action,school transport, health;
in relation to technology offers: Gfi Software solutions,•dematerialisation, ERP integration, BI, cloud open source, testing,mobility, GIS.
At the same time, territorial authorities and health and medical socialorganisations are modernising with a significant growth in digital such as:
intelligent cities by managing the relationship between the citizens•and technologies, via connected objects, Wi-Fi hotspots and video;
digital health territories providing the link between professionals,•the health organisation and the patient;
management of social action and service to the person at the•departmental level by putting payers, beneficiaries and serviceproviders into contact with each other.
Telecom-Media-Entertainment – (TME)
With its multidisciplinary teams, Gfi Informatique is a preferredpartner for telecommunications operators, equipment builders andtelecommunication and media solutions. The Group offers a set ofsolutions in response to its clients’ needs:
reduction in time-to-market;•reduction in the cost and complexity of the IS/network;•improvement in customer knowledge and quality of service;•innovation in new services (NFC, M2M, Innovative interfaces,•Cloud, Xaas, etc.).
Gfi Informatique has gone beyond its mastery of generalist IT tradesto position itself on strategic domains with integration andmaintenance offers:
use of Big Data and BI technologies to create customer loyalty,•manage fraud, steer sales, ensure revenue;
manage the Order to Cash processes of B2C and B2B operators:•CRM, Order Management, Billing, services activation;
management of networks and services of telecommunication•operators on traditional and virtualised networks;
development of innovative portals and interfaces: content•management, self-care, social networks and mobility;
as well as the offers of services to infrastructures aiming to•optimise the infrastructure investment via the cloud as well as theIS operating costs through its production integration skills.
Aerospace-Transport-Industry – (ATI)
The automotive and industrial equipment market is continuing toadapt to cost pressure, in a context of increased competition,globalisation, and a triple challenge: digital developments, electriccars, and self-driving cars. Gfi Informatique’s Aerospace customersneed to guarantee production rates. Transport operators areundergoing complete transformation.
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Presentation of the Group
1Thanks to PLM, Gfi Informatique allows industrialists to control theproduct life cycle from design to maintenance. Its SLM solutionsimprove how product-client interactions are managed by designingservices upstream. Gfi Informatique’s Usine 4.0 makes manufacturingprocesses more efficient and flexible.
Gfi Informatique also wants to increase the customer base for its ownclients and create customer loyalty by supplying tools to improve thecustomer experience.
Its high-level standardisation (services centre, TMA) is an effectiveresponse to the desire to cut IT costs.
Gfi Informatique is taking an innovative stance with “intelligenttransport” to improve infrastructure management by reducingpollution and improving traveller information.
Distribution-Services – (DS)
This is a fast-growing vertical sector within the Gfi InformatiqueGroup which is particularly open to innovations and digital solutions.The following are cited from amongst the Group’s offers:
omni-commerce solutions: frontal, multichannel, cross-channel,•mobility;
an integrated ERP Software solution for Hypermarkets (Ordirope•Minos);
a capacity to integrate and optimise all the Information System•components of the supply chain.
A “communicative business” offering allows a combination of Internetservices, community portals and collaborative platforms.
Energy-Utilities-Chemicals – (EUC)
The Energy-Utilities-Chemicals sector has now entered a majortransformation cycle. The challenges of the energetic transition andthe digital transformation of uses and services are reflected in majorinvestments.
The global presence of respected French companies amongst themajor energy and water suppliers has given Gfi Informatique a greatmany references in the sector.
Gfi Informatique’s offering includes:
management of technical production, transport and distribution•assets, industrial maintenance, intervention management, technicalmobility, PLM;
customer relationship management: invoicing, call centre,•multichannel, e-business, and the development of services;
Smart Grid and optimisation: smart metering and intelligent•networks, optimisation of energy systems, upstream-downstreamoptimisation;
operating performance: with optimisation of support functions, IT•cost cutting, shared service centres;
dedicated software system offer: customer management and•invoicing of collective services, GIS.
Gfi Informatique has recognised know-how in integrating market ERPsin the chemistry and pharmaceutical domain.
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Simplified Group organisation chart at March 20, 20181
SIMPLIFIED GROUP ORGANISATION 1.4.CHART AT MARCH 20, 2018
ROFF SDF Lda(100%)
ROFF ESPAÑAINDEPENDIENTES SA
(100%)
ROFF CONSULTORESINDEPENDENTES SA
(100%)
GRUPO CORPORATIVOGFI INFORMATICA SA
(100%)
GFI NORTE(100%)
GFI LEVANTE(100%)
GFI CATALUNA(100%)
SAVAC(100%)
GFI PORTUGAL(100%)
SOUTHERN EUROPE
SPAIN
PORTUGAL
GFI BENELUX(100%)
GFI NV(100%)
GFI PSF(100%)
ROFF SUISSE(100%)
IMPAQ AG(100%)
NORTHERN AND EASTERN EUROPE
BELUX
GFI INTERNATIONAL(100%)
SWITZERLAND
IMPAQ Sp Z.o.o(100%)
POLAND
IMPAQ ADDSTONE SRL(100%)
ROMANIA
IMPAQ UK(100%)
ENGLAND
RNIC INDEPENDENT CONSULTANTS AB
(100%)
SWEDEN
GFI OSTERREICH GmbH(100%)
AUSTRIA
ROFF FRANCE(100%)
ADDSTONES(100%)
GFI IES(100%)
NOVULYS(65%)
BUSINESS DOCUMENT(100%)
GFI CIS(70%)
GFI INFORMATIQUE
GFI PROGICIELS(100%)
ITN CONSULTANTS(100%)
GFI INFOGEN SYSTEM(100%)
GFI BT(100%)
GFI INFORMATIQUETÉLÉCOM(100%)
METAWARETECHNOLOGIES
(98%)
GFI INFORMATIQUEPRODUCTION(100%)
GARSYS (1)
(100%)
COGNITIS France(100%)
AWAK’IT(100%)
FRANCE
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PRESENTATION OF THE GROUP AND ITS BUSINESS
1
ROFFMEX(55%)
GFI INFORMATICAMEXICO SA DE CV
(100%)
GESFOR MEXICOSA DE CV (5)
(100%)
LATAM
MEXICO
COLOMBIA
ROFF BRASIL(100%)
BRAZIL
GFI INFORMATIQUEMAROC(100%)
GFI INFORMATICACOLOMBIA(100%)
GFI MAROC OFFSHORE(100%)
HOLDING GFI MAROC(100%)
ROFF NCA SARL(100%)
MOROCCO
GFI TUNISIE (3)
(100%)
CYNAPSYS (5)
(100%)
TUNISIA
ROFFTEC ANGOLA(100%)
ANGOLA
AFRICA
SOMAFOR RCI(100%)
ROFF CONSULTING AFR(100%)
IVORY COAST
ROFFTEC ANGOLA(100%)
ANGOLA
BUSINESSDOCUMENT INC(100%)
EFRON CONSULTING INC(100%)
USA
NORTH AMERICA
GFI INFORMATIQUEBRANCH (4)
EMEA ANDEASTERN ASIA
DUBAI
SINGAPORE
ADDSTONE SAS BRANCH
ROFF SINGAPORE (2)
(100%)
(1) May 2017: Acquisition of the company Garsys France (2) July 2017: incorporation of company named Roff Singapore in Singapore (3) August 2017: Acquisition of the company Garsys Tunisie and change of the corporate name to Gfi Tunisie (4) September 2017: Incorporation of a Branch Gfi Informatique in Dubai (5) February 2018: Acquisition of the Cynapsys Group in Tunisia and acquisition of the Gesfor Group in Mexico
The simplified organisation chart presents the Group's main operating companies.A complete list of the Group's subsidiaries at December 31, 2017 is presented in Note 23 of the consolidedfinancial statements.
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Financial data from the consolidated financial statements1
FINANCIAL DATA FROM THE 1.5.CONSOLIDATED FINANCIAL STATEMENTS
Income statement and financial position1.5.1.
The consolidated financial data on 31 December 2017 arecharacterised by:
solid growth, an increase in operating margin and successful•international expansion;
revenue totalling 1,131.9 million euros, an increase of 11.5%;•
operating income totalling 55.8 million euros, an increase of 9.1%;•net income totalling 37.3 million euros, an increase of 16.2%.•
CONSOLIDATED SUMMARY INCOME STATEMENT AND FINANCIAL POSITION
Income statement (in millions of euros) 2017 2016 Change
Revenues 1,131.9 1,015.4 116.5
OPERATING MARGIN 69.0 61.7 7.3
Operating margin % 6.1% 6.1% 0 point
Amortisation of assigned intangible assets (2.4) (1.9) (0.5)
Restructuring costs (7.5) (5.6) (1.9)
Gains (losses) on disposals (0.0) 1.0 (1.0)
Goodwill impairment losses - - -
Other operating income and expenses (3.2) (4.1) 0.9
OPERATING INCOME 55.8 51.1 4.7
Income from cash and cash equivalents 0.1 0.1 0
Cost of gross debt (3.9) (3.3) (0.6)
NET COST OF DEBT (3.9) (3.2) (0.7)
Other financial income (expenses) (1.3) (1.1) (0.2)
Income tax expense (13.3) (14.7) 1.4
NET CONSOLIDATED INCOME 37.3 32.1 5.2
o/w attributable to owners of the Group 37.1 32.2 4.9
o/w non-controlling interests 0.2 (0.1) 0.3
Diluted Earnings per share (in euros) 0.56 0.49 0.07
Consolidated statement of financial position (in millions of euros) 2017 2016 Change
Goodwill 283.1 280.9 2.2
Fixed assets 102.6 96.8 5.8
Current and non-current assets 533.5 489.1 44.4
Cash 29.7 28.9 0.8
TOTAL ASSETS 948.9 895.7 53.2
Net equity - attributable to owners of the Group 321.1 300.6 20.5
Non-controlling interests 0.9 0.0 0.9
Borrowings (current and non-current) 167.8 130.2 37.6
Current and non-current liabilities 451.9 442.6 9.3
Financial liabilities and current provisions 7.2 22.3 (15.1)
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 948.9 895.7 53.2
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Financial data from the consolidated financial statements
1Cash flow and debt1.5.2.
Consolidated cash flow statement (in millions of euros) 2017 2016
Operating cash flow 73.3 67.9
Tax paid (14.1) (12.1)
Change in WC requirement (35.5) (22.2)
Net cash from operating activities 23.7 33.6
Net cash from investing activities excl. business combinations (31.3) (34.6)
Net cash linked to business combinations investments (15.2) (49.2)
Net cash from investing activities (46.4) (83.8)
Repurchases and sales of treasury shares (0.1) 0.2
Dividends paid (10.0) (9.9)
New borrowings 10.3 50.0
Repayment of borrowings (15.4) (6.5)
Interests paid (3.6) (3.1)
Change in factoring drawdowns and other 21.4 3.5
Net cash from financing activities 2.6 34.2
Effect of changes in foreign exchange rate (0.4) 0.1
Change in cash and cash equivalents (20.5) (16.0)
OPERATING CASH FLOW UP 7.9% - NET DEBT/EQUITY RATIO AT 43%Operating cash flow after debt costs and tax was up by 7.9% to 73.3million euros.
Investment flows (CAPEX and external acquisitions) were 46.4 millioneuros compared to 83.8 million euros last year, i.e. a reduction of37.4 million euros.
At 35.5 million euros, the change in working capital requirement ishigher than last year, reflecting the very considerable increase in tradereceivables on robust sales growth in the fourth quarter.
The Group ended the year with a gearing of 43% and a net debt toEBITDA (1) ratio that positions us for external growth transactions, ifthe opportunity arises.
FINANCIAL DEBTS PAYMENT SCHEDULE
(in thousands of euros) 31.12.2017 2018 2019 2020 2021maturities and
refinancing beyond
Bond issue 24,885 - 24,885 - - -
Bank loans 80,495 24,027 27,971 28,085 115 297
Finance lease obligations 124 124 - - - -
TOTAL 105,504 24,151 52,856 28,085 115 297
OTHERThe Group also has credit facilities with factoring institutions in France, Spain and Portugal, as well as bank overdrafts and lease financing. Detailscan be found in Note 6 to the consolidated financial statements.
EBITDA: Operating margin excluding non cash items.(1)
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Financial data from the corporate financial statements1
FINANCIAL DATA FROM THE CORPORATE 1.6.FINANCIAL STATEMENTS
Income statement1.6.1.
MAIN ITEMS OF PROFIT & LOSS STATEMENT
(in millions of euros) 2017 2016
Revenues 684.3 682.1
Operating results 13.2 19.1
Financial result 9.5 5.3
Profit on ordinary activities before taxes 22.7 24.4
Extraordinary income (loss) (6.8) (8.0)
Net profit after tax 24.1 23.2
Total operating income was up by 0.3%, from 694.8 million euros in2016 to 697 million euros. Total operating costs raised by 1.20% from675.7 million euros in 2016 to 683.8 million euros. Operating incomeslipped 31% to 13.2 million euros, from 19.1 million euros in 2016.
The financial result is positive at 9.5 million euros compared with 5.3million euros in 2016. In financial income, dividends received fromsubsidiaries amounted to 10 million euros. Note 15 to the corporatefinancial statements show all of the components.
external growth operations for 1.8 million euros, as well as rentalexpenses of 0.7 million euros on vacant offices. Note 16 to thecorporate financial statements shows all of the components.
The 6.8 million euros extraordinary loss (8.0 million euros in 2016)includes restructuring costs for an amount net of reversals onprovisions of 3.7 million euros, the costs related to the Group's
The tax Group agreement implemented allows the Company tobenefit from net integration proceeds of 2.1 million euros. TheCompany applied for research tax credits for 2017 totalling 5.8 millioneuros. These two components contributed to tax proceeds of 7.9million euros. Note 18 to the corporate financial statements show allof the components.
Notes 11 to 18 to the corporate financial statements (see chapter 6)outline the main headings of the income statement.
Balance sheet1.6.2.
SUMMARY BALANCE SHEET
(in millions of euros) 2017 2016 2017 2016
Intangible assets and property, plant and equipment 130.9 130.5 Equity - profit for the year 293.4 278.3
Non-current financial assets 225.9 210.3 Provisions 0.9 2.8
Bond issue and financial debts 191.3 122.9
Current assets 375.1 339.2 Operating liabilities 211.2 234.3
Other - regularisation 0.7 0.8 Other - regularisation 35.8 42.5
TOTAL ASSETS 732.6 680.8TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 732.6 680.8
Notes 1 to 10 to the corporate financial statements (see chapter 6) outline the main headings of the assets and liabilities.
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Highlights
1HIGHLIGHTS1.7.
Highlights of the financial year: Friendly takeover 1.7.1.by Mannai Corporation
SIGNING OF AN AMENDMENT TO THE SHAREHOLDERS' AGREEMENT BETWEEN MANNAI CORPORATION, APAX AND BOUSSARD & GAVAUDAN - SUMMARYOn April 8, 2016, a shareholders' Agreement was entered into toconstitute shareholders acting in concert regarding Gfi Informatique(hereinafter "shareholders' Agreement"), between i) BG Master Fundplc, Boussard & Gavaudan Holding limited, and BG SelectInvestments Limited (Ireland) (hereinafter "Boussard & Gavaudan"), ii)Itefin Participations, Altamir, and FPCI Apax France VII (hereinafter"Apax"), and iii) Mannai Corporation QPSC (hereinafter "MannaiCorporation").
This shareholders' agreement was the subject of a notice from theAutorité des marchés financiers published on April 15, 2016, no.216C0904, whose main clauses can be accessed on the Autorité desmarchés financiers website, www.amf-france.org.
An Amendment to say shareholders' Agreement was entered into onMay 10, 2017 and filed with the Autorité des marchés financiers (AMF)on May 16, 2017 and published on May 18, 2017 under number217C0991. This Amendment provides for (i) the implementation of GfiInformatique's new governance and (ii) the procedure for the transferof Apax's shares (via Itefin Participations) and Boussard & Gavaudan'sshares to Mannai Corporation.
The main provisions of this Amendment are also available on AMF'swebsite www.amf-france.org.
THE ACQUISITION BY MANNAI CORPORATION OF AN ADDITIONAL STAKE IN GFI INFORMATIQUEAs part of the Amendment to the shareholders' Agreement onMay 10, 2017, Apax and Boussard & Gavaudan agreed to sell theirshares to Mannai Corporation in the following manner:
the "First Block" represents 29% of Gfi Informatique's share capital•and voting rights (on a fully diluted basis):
the off-market sale of Gfi Informatique's shares held by Itefin•Participations (12% of the share capital and voting rights) in June2017, at a price per share of 8.00 euros,
then in July 2017, the sale of Gfi Informatique's shares held by•Boussard & Gavaudan (17% of the share capital and votingrights) under the same terms;
the "Second Block" represents the remaining stake, i.e.•approximately 15% of the share capital and voting rights (also on adiluted basis) which is expected to be sold at a price per share of8.50 euros in Q2 2018, following the shareholders General Meetingcalled to approve the 2017 financial statements and the ex-dividenddate, subject to applicable regulatory authorisations.
COMPLETION OF THE SALE OF GFI INFORMATIQUES SHARES HELD BY ITEFIN PARTICIPATIONS AND BOUSSARD & GAVAUDAN TO MANNAI CORPORATIONOn June 19, 2017, Itefin Participations which held approximately18.5% of Gfi Informatique's share capital and voting rights, completedthe first sale of 8,063,789 shares to Mannai Corporation, i.e.approximately 12% of Gfi Informatique's share capital and votingrights, in compliance with the commitments made upon signing theAmendment to the shareholders' Agreement.
On July 10, 2017, Boussard & Gavaudan shareholders sold 11,231,313shares namely (i) 8,702,227 Gfi Informatique shares held by BG SelectInvestments Limited (Ireland), and (ii) 2,529,086 Gfi Informatiqueshares held by Boussard & Gavaudan Holding Limited, to MannaiCorporation, making up approximately 17% of Gfi Informatique'sshare capital and voting rights, in compliance with the commitmentsmade upon signing the Amendment to the shareholders' Agreement.
ALLOCATION OF GFI INFORMATIQUE'S SHARE CAPITAL FOLLOWING MANNAI CORPORATION'S ACQUISITION OF AN ADDITIONAL STAKEThe breakdown of Gfi Informatique's share capital followingcompletion of the disposals of Itefin Participations' andBoussard & Gavaudan's stakes is given in chapter 3 of this 2017registration document, in section 3.2 "Shareholding structure atDecember 31, 2017".
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Highlights1
New Governance model1.7.2.
In accordance with the commitments undertaken by the shareholdersacting in concert under the shareholders' Agreement and theprovisions of law no. 2011(103) of January 27, 2011 on gender balanceon companies' boards of directors and Supervisory Boards and genderequality (known as the Copé-Zimmermann law), the Gfi Informatiqueshareholders General Meeting on May 22, 2017 voted on a new Boardof Directors and adopted the following motions:
renewal of the term of office of Mrs Carolle Foissaud as a Company•director for a three-year term, until the end of the Ordinary GeneralMeeting called to approve the financial statements for the yearended December 31, 2019 to be held in 2020;
official cognisance of the expiration of the term of office as a director•of Mr Jean-Paul Lepeytre, non-replacement and appointment as anobserver for a three-year term, until the end of the Ordinary GeneralMeeting called to approve the financial statements for the yearended December 31, 2019 to be held in 2020;
official cognisance of the expiration of the term of office as a•director of Mr Nicolas Roy, non-replacement and appointment asan observer for a three-year term, until the end of the OrdinaryGeneral Meeting called to approve the financial statements for theyear ended December 31, 2019 to be held in 2020;
Meeting called to approve the financial statements for the yearended December 31, 2019 to be held in 2020;
renewal of the term of office of Mr Gérard Longuet as an observer•for a three-year term, until the end of the Ordinary General
official cognisance of the resignation of Mr Patrick de Giovanni as•director, non-replacement and appointment as an observer for athree-year term, until the end of the Ordinary General Meetingcalled to approve the financial statements for the year endedDecember 31, 2019 to be held in 2020.
Following the renewal of the terms of office of Mrs Carolle Foissaud asa director for a three-year term, of Mr Gérard Longuet as an observerfor a three-year term, and the appointment as observers of MessieursJean-Paul Lepeytre, Nicolas Roy and Patrick de Giovanni, also for athree-year term, the Board of Directors approved the newcomposition of the specialised Board committees during its meetingof May 22, 2017.
The members of the specialised Board committees are appointed toserve for a term to coincide with the terms of office of the directorsand observers, in accordance with the provisions of articles 1.1 of theInternal Regulations of the Board of Directors approved on March,20th 2018.
The new Governance of Gfi Informatique is set out in chapter 4 of this2017 registration document in paragraph 4.1 "New Governancemodel".
Dividends paid out following the Combined General 1.7.3.Meeting of May 22, 2017
After shareholder approval during the Combined General Meeting onMay 22, 2017, the Company distributed a dividend of 0.15 euro pershare.
Dividends distributed in cash amounted to 9,985,615.65 euros (afterdeducting 160,462 treasury shares), and were paid to shareholders onMay 30, 2017.
Continued roll-out of the Group’s development strategy1.7.4.
CONSOLIDATING OUR LEADERSHIP IN IS INTEGRATION AND MANAGEMENT IN THE DISTRIBUTION AND FASHION SECTORS
business and all their brands. These two companies together generatealmost 450 million euros in sales through around 1,000 retail outletsin some 20 countries.
On June 19, 2017, Gfi Informatique announced the signature of majorIS transformation contracts with Kidiliz and Tartine & Chocolat. Theprojects covered by the contracts extend across all areas of their
The deal anchors us in a commanding position in the distribution andfashion industries, particularly with our OmniCommerce solution.
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PRESENTATION OF THE GROUP AND ITS BUSINESS
Other information
1OTHER INFORMATION1.8.
Subsidiaries and shareholdings – Inventory of marketable 1.8.1.securities
The table of subsidiaries and shareholdings and the inventory of transferable securities are appended to the yearly corporate financial statementsunder Note 23 of chapter 6.2.6 and in chapter 6.3.2 of this registration document.
Five-year results summary1.8.2.
The five-year results summary table is appended to the corporate financial statements in chapter 6.3.1 of this registration document.
Allocation of Gfi Informatique SA net income1.8.3.
The profit to be allocated comprises the following:
Source (in thousands of euros)
Profit for the year 24.104
Legal reserve 1.205
Intermediate balance 22.899
Previous carry-forward 46.986
Distributable profit 69.885
It is suggested that net earnings be allocated as follows:
Allocation of distributable profit (in thousands of euros)
To the shareholders, as dividends 9.985
Retained Earnings 59.900
TOTAL 69.885
The dividend to be distributed for the financial year is set at 0.15 euro per share. The dividends corresponding to shares held by the Company onthe dividend payment date will be allocated to retained earnings.
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PRESENTATION OF THE GROUP AND ITS BUSINESS
Other information1
Dividends and dividend policy1.8.4.
The following dividends were paid in respect of the previous five financial years:
Years 2016 2015 2014 2013 2012
Number of shares at December 31 66,570,771 66,570,771 (2) 54,450,342 54,450,342 54,450,342
Par value (in euros) 2.00 2.00 2.00 2.00 2.00
Dividend per share (in euros) 0.15 0.15 0.10 0.10 0.06
NET AMOUNT PAID (IN EUROS) (1) 9,985,615 9,875,233 5,432,937 5,437,940 3,222,848
Treasury shares held by the Company on the date of payment do not carry any entitlement to dividends.(1)66,570,771 shares were taken into consideration when calculating the dividends paid for the year ended on December 31, 2015, following the exercise of the 590,505 Bsaars by (2)Mannai Corporation on June 17, 2016 that generated a capital increase for the Company.
Within the framework of the Group’s main bank loan, the Group is subject to contractual limitations on its dividend payout policy (see Note 6.6to the consolidated financial statements).
Supplier and clients terms of payment of Gfi 1.8.5.Informatique SA
(Article L. 441-6-1 of the French Commercial Code)
Trade payables and clients receivables are broken down by maturity as follows:
(in thousands of euros)
Article D. 441 I. 1: Invoices received and not paid on the closing date that are due for payment
Article D. 441 I. 2: Invoices issued not paid on the closing date that are due for payment
0 day (indicative)
1 - 30 days
31 - 60 days
61 - 90 days
91 days and
more
Total (1 day
and more)
0 day (indicative)
1 - 30 days
31 - 60 days
61 - 90 days
91 days and
more
Total (1 day
and more)
(A) Late payment tranches
Number of invoices concerned 1,941 3,856 6,772 1,833
Total of invoices concerned, including tax 30,253 4,316 3,806 641 1,728 10,493 127,748 14,913 2,746 1,169 4,282 23,112
Per cent of total purchases for the financial year, before tax 8.54% 1.22% 1.07% 0.18% 0.49%
2.96%
354,231
Per cent of revenue for the financial year, including tax 15.73% 1.84% 0.34% 0.14% 0.53%
2.85%
812,228
(B) Invoices excluded from (A) relative to bad debts or unrecognised debts and receivables
Number of invoices excluded 0 0
Total amount of invoices excluded, including tax 0 0
(C) Reference payment terms (contractual or statutory, Article L. 441-6 or Article L. 443-1 of the Commercial code)
Payment terms used to calculate late payments CONTRACTUAL CONTRACTUAL
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PRESENTATION OF THE GROUP AND ITS BUSINESS
Research and development
1Acquisitions of stake and control during the year1.8.6.
In accordance with the provisions of article L 233-6 of the French Commercial Code, Gfi Informatique carried out the following acquisition of stakeduring the year ended December 31, 2017:
Acquiring Companies Acquired Companies
Direct acquisition of stake during 2017
Total of the acquisition stake on 31/12/2017
% capital % voting rights % capital % voting rights
IN FRANCE
Gfi Informatique Entreprise Solutions Garsys 100% 100% 100% 100%
INTERNATIONAL
Garsys Gfi Tunisie (1) 100% 100% 100% 100%
Gfi Tunisie: company formerly named Garsys Tunisie1
RESEARCH AND DEVELOPMENT1.9.
Gfi Informatique's Research & Development strategy, one of the mainfactors that set it apart from its competitors, is an integral part of theGroup's strategy. The Group’s Executive Committee, chaired byVincent Rouaix, approves the major technological objectives to be setby the Group.
Gfi Informatique is today characterised by its ability, and readiness, todevelop increasingly innovative products by focusing on an approachthat delivers rapid results in terms of operational effects and wherethe initiatives that are being taken have to lead, as quickly as possible,to the outcomes of such initiatives being placed on the market, andwhere blank spaces are prioritised.
The Group can, therefore, achieve multiple objectives, including thatof creating its own markets in terms of Business and IndustrialInnovation.
Gfi Informatique’s goal of innovating even more intensely illustratesthe increased value of the Group, inspiring ideas of change andspreading an “it’s possible” spirit of enterprise to all levels.
From an operational perspective, the Group’s R&D and Innovationstrategy centres around:
creating new products, different solutions to add new highly•profitable sources of revenue;
identifying new uses, new products and new solutions, as far•upstream as possible, to capitalise on the new areas found;
creating or modifying production means, optimising them, thereby•improving the margin, and managing knowledge in the Company;
cooperating closely with clients and even prospects to reposition•the Group on new markets;
acquisition of equity interests in start-ups with significant growth•potential. The aim is to provide backing and Technical Angel adviceand guidance for R&D and strategic innovation to promote thedevelopment and marketing of the "Innovations of the future".
The Innovation Department whose director sits on the Group’sExecutive Committee instils these principles throughout GfiInformatique, by means of:
the Gfi Lab, a team which creates and incubates new products some•of which are destined for industrialisation. It unearths new trendsand manages collaborative creation with Group clients. The Gfi Labis also involved in upstream research phases, publishing articles forthe scientific community and offering conferences. The Gfi Labcovers Technology Readiness Levels (TRLs) 1 to 4 and works withacademic players such as the French national research centre(CNRS) and university partners;
the “Fablab” and the “Forge” (set up in 2016) are the organisations•that work on TRL phases above TRL 4. The Fablab follows amethodology laid down by Gfi Informatique to solve trade-specificproblems using functional and technical bricks designed by the GfiLab, by assembling and studying the related technological aspects inorder to optimise the possible marketing process. The Forge createsthe industrialisation conditions to achieve optimal marketing;
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PRESENTATION OF THE GROUP AND ITS BUSINESS
IT services market and outlook for the Group1
the different centre of expertise within the Group, key research and•development players and innovation contributors;
a creative process which manages all the ideas and contributions of•the 15,000 Group employees;
the Innovation committee, made up of members of the Group’s•Executive Committee and key persons involved in innovation andR&D and innovation within the Gfi Informatique Group, periodicallydefines strategy investments and experiments.
In 2017, research at Gfi Informatique focused on:
Artificial Intelligence;•IOT and Ambient Intelligence;•
Data Capture and Platform;•Virtual, Augmented and Mixed Reality;•Industry 4.0;•Security;•Social Robotics.•
The Group's expenditure in 2017 in France on Research andDevelopment has been valued at 46.8 million euros and includes (i)the amount invested by the Group in Research in 2016, and (ii) incapitalised development costs.
When the conditions are satisfied, research tax credits are applied for.
IT SERVICES MARKET AND OUTLOOK 1.10.FOR THE GROUP
Market and trends1.10.1.
The sector expanded by 3.4% in 2017, a record high not seen since2011. Growth was powered by the large number of digitaltransformation projects and the provision of IT services (consulting,integration, hosting, etc.).
It included growth of 4.2% in Technology Consulting, 2.9% inConsulting and Services and 4.4% in the Software market.
The outlook for 2018 confirms this trend, with expected sector growthof 3.6% (4.5% in the Technology Consulting market, 3% in theConsulting and Services market and 4.7% in the Software market).
Outlook for the Group1.10.2.
For 2018, while remaining attentive to the general economic transformation, further international expansion and beef up itsenvironment, the Group will draw on the progress made and a strong operating margin and net income.balance sheet to accelerate growth, push ahead with its
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PRESENTATION OF THE GROUP AND ITS BUSINESS
Corporate Management – Human Resources
1CORPORATE MANAGEMENT – 1.11.HUMAN RESOURCES
The law of July 12, 2010 known as Grenelle II, marking a nationalcommitment to the environment, and its implementing decree ofApril 26, 2012 created an obligation for large companies to makedisclosures on the social and environmental consequences of theiractivities and on their societal commitments to sustainabledevelopment.
This takes the form of a specific report which is presented below inchapter 2. However, this report does not contain the followinginformation.
Employee profit sharing1.11.1.
Profit-sharing for the 2017 financial year in France totals 0.97 millioneuros compared to 0.5 million euros the previous year.
These amounts are managed under an employee savings plan whichoffers a choice of several Company investment funds (Fonds Communde Placement d’Entreprise - FCPE) with different investment purposes.Note that no discretionary profit sharing plan is in force within theGroup.
Employee shareholders1.11.2.
COMPANY SAVINGS PLANAn employee savings plan was set up in 1998 for all Group employees.The Gfi Informatique Expansion employee share ownership fund wasset up to purchase and manage shares in Gfi Informatique. ThisCompany investment fund obtained agreement No. 06985 of theTransactions Commission of the Stock Exchange on May 7, 1998. TheFCPE is managed by Natixis Asset Management.
The FCPE “Gfi Informatique Expansion” has been the vehicle whichheld the free shares awarded to all employees under the Group’semployee profit-sharing scheme.
Offer initiated by Mannai Corporation, the “Gfi InformatiqueExpansion” FCPE was closed to subscription.
Following the decision of the Supervisory Board of the “GfiInformatique Expansion” FCPE, on May 20, 2016, to tender alltransferable Gfi Informatique shares to the Simplified Public Tender
The Group’s Company savings plan offers employees the chance toinvest their shareholding during the vesting period, as well as theirvoluntary savings.
At December 31, 2017, the “Gfi Informatique Expansion” FCPE held187,695 Gfi Informatique shares, representing 0.30% of the sharecapital.
AWARDING FREE SHARESThe Board of Directors’ report on free shares (see section 4.10)contains details of all free share plans currently in force or which havebeen authorised by the General Meeting.
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PRESENTATION OF THE GROUP AND ITS BUSINESS
Subsequent events to the closing date1
SUBSEQUENT EVENTS TO THE CLOSING 1.12.DATE
Acquisitions of Cynapsys and Gesfor
CYNAPSYS On February 6, 2018, the Gfi Informatique Group acquired the Tunisiangroup Cynapsys, a group of multi-specialist companies for French(service centres) and local clients in Tunisia and the broader Africanmarket. Cynapsys was already a Group partner in some transactions inNorth Africa. The Cynapsys Group posted revenue of €5 million withprofitability in line with similar activities for the GFI Group.
It has a headcount of 150 people in France and Tunisia. The Cynapsysgroup will be consolidated as of March 1, 2018.
GESFOROn February 22, 2018, Gfi Informatique acquired Gesfor Mexico S.A.de C.V., a Mexican company, and its subsidiaries.
Gesfor's main business activity involves outsourcing technicalassistance and application development services. It also conducts ITprojects, with banks and financial institutions as its main customers.
At September 30, 2017, the Gesfor Group had 440 employees, whichincludes 400 IT consultants and around forty support staff members.In 2017, the Gesfor Group posted revenue of €12 million mainly inMexico, including close to 80% in the banking sector. The acquisitionof the Gesfor Group represents a real opportunity for the Gfi Group,enabling it to acquire market share in Mexico and to strengthen itscommercial ties with leading banking customers that GFI already hasin Spain.
As a result, the Group increased its presence in Latin America where itposted cumulative revenue of €15.7 million in 2017. With the activitiesof Efron and Roff in SAP, the Group posted revenue of more than €4.1million in Mexico before this transaction.
Gesfor is expected to contribute profit as from 2018 and will beconsolidated as of March 1, 2018.
Proposed friendly takeover bid for Realdolmen
On February 23, 2018, Gfi Informatique and Realdolmen, a leading ITservices provider in Belgium and Luxembourg, announced thesignature of a memorandum of understanding according to which GfiInformatique committed to filing a voluntary and conditional takeoverbid for Realdolmen with the Belgian Financial Services and MarketsAuthority (FSMA). The bid is a cash offer set at 37 euros per share, andwas filed on March 8, 2018 with the FSMA.
around 1,250 highly trained employees, Realdolmen providesstrategic, tactical and operating services to over 1,000 clients inBelgium and Luxembourg.
Realdolmen is an independent ICT expert supporting clients throughthe complete ICT-lifecycle, combining support services in bothinfrastructure and applications with product offerings. Its maindivisions are IT & business consulting services and IT business supportwith an especially strong presence in the upper range of SMEs. With
The transaction will deepen Gfi Informatique's footprint in Belgiumand Luxembourg, in line with its international expansion strategy. Itwill draw on Realdolmen's management and employees to furtherdevelop a platform for the Benelux.
Gfi Informatique intends to focus on business continuity and willdevelop joint actions in services offerings by leveraging bothcompanies' skills and expertise.
The proposed transaction is a voluntary and conditional takeover bidin cash for all outstanding shares and warrants of Realdolmen at aprice of 37.00 euros per share and an equivalent price per warrant.
The proposed price gives a transaction value of around 196 millioneuros. The offer will be conditional on Gfi Informatique obtainingmore than 75% of Realdolmen's fully diluted share capital and morethan 75% of the voting rights.
Consistent with its fiduciary duties as directors and subject to reviewof the final bid prospectus, the bid has the unanimous support ofRealdolmen's Board of Directors. The Board of Directors will issue aformal response to the proposed takeover bid in a memorandum ofreply in accordance with the applicable legal provisions.
A group of entities and persons affiliated with the Colruyt family andQuaeroQ CVBA, long-term shareholders of Realdolmen that togetherrepresent 21.94% of its share capital, have entered an undertakingwith Gfi Informatique to tender their shares for the bid. Realdolmenwill not tender its 3,192 treasury shares. After the close of the bid, GfiInformatique intends to launch a simplified squeeze-out bid, if theconditions for such a squeeze-out bid are met.
Financing: signing a syndicated loan agreement subject to restrictions
In the context of the friendly takeover bid on Realdomen, GfiInformatique signed a syndicated loan agreement on February 21,2018, subject to the success of the takeover bid. The agreementprovides for:
a €200 million loan redeemable over five years (40% of the loan•will be repaid on maturity) to finance the acquisition ofRealdolmen;
bridge financing for €110 million to refinance the existing•syndicated loan and potentially the existing private placement also.This loan will be refinanced by a new private placement;
a €50 million growth loan, redeemable over five years, which•represents new sources of funds for the Group's acquisitions andinvestments;
a five-year €50 million revolving credit to fund the Group's working•capital requirements.
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Risk factors
1RISK FACTORS1.13.
The Gfi Informatique Group regularly reviews those risks that could relevance of the business model, Gfi Informatique considers that thehave a major negative effect on its business, its financial position, its main risks on the operating front are those connected to humanresults or its ability to meet its targets. It does not consider that there resources and the performance of customer projects. They are theare any other major risks apart from those presented below. Apart subject of continuing action plans.from the strategic risk of competitive positioning and the loss of
Operational risks – Legal risks1.13.1.
HUMAN RESOURCESIn a service business, which has to deal with the scarcity of certainskills and with new client needs, risks related to human resources arenaturally of great importance. The performance of the hiring systemand of career and competency management, the stability of key roles,and the sharing of Group culture and values are constant andfundamental challenges.
CUSTOMER PROJECTSGfi Informatique is involved in sometimes complex IT projects, eitheras a software publisher, an integrator of proprietary solutions orthird-party products and as a service provider. Consequently, theGroup is exposed to the risk of a dispute with a customer if it isconsidered that the products or services supplied by the Group havenot achieved the expected results in the contractually agreed timeframe and/or have caused a prejudice. The Group may in such anevent be forced to pay damages.
The procedures implemented, under the aegis of the differentcommittees set up for that purpose, mean that no extraordinarycommitments are taken on with a client and that projects areimplemented in line with forecasts.
Gfi Informatique’s ISO 9001-certified quality system defines the rulesfor establishing and validating financial and technical proposals.
The Group’s Legal Department, supporting the relevant managemententities, is involved in steering the systems for the management andcontrol of operational risks: standard-term contracts have been set upfor the Group’s services and offers and are updated regularly, andclient contracts are subject to legal reviews to validate and secure theGroup’s contractual commitments.
Operational staff also receives regular training on the contractualmanagement of projects.
Mediation of issues that might arise, especially in the performance ofsignificant or difficult projects, could affect the Group’s credibility andimage with its clients and, consequently, its ability to carry on ordevelop certain activities. In that event, an ad hoc crisis managementpolicy would be carried out.
REGULATIONSThe Gfi Informatique Group is not subject to any particular regulationsand its activities are not subject to any legal or administrativeauthorisation, even for its international subsidiaries. Some sensitivesectors in which its customers operate sometimes require specificconfidentiality agreements to be entered into.
However, legal risks in different areas (corporate law, contract law,tax law, etc.) concern the Group in the same way as any other servicesCompany.
Proposals for the repayment of back taxes or orders from socialwelfare agencies are provisioned for their principal amount andinterest on receipt of the repayment notice, even if a claim has beenissued or if a dispute has been opened. However, in this case, theamount of the penalties and increases are not provisioned for.
INFORMATION ON DISPUTES
Disputes and litigation are referred to in Note 10 to the consolidatedfinancial statements.
As far as the Company is aware, over a period covering the last 12months, there was no other governmental, legal or arbitrationprocedure (including any procedure of which the Company is aware,which is suspended or with which it is threatened) which could have orhas recently had major effects on its financial position or theprofitability of the Company and/or the Group.
Disputes are managed by the Group’s Legal Department incollaboration with law firms. The insurers are also included in the riskmanagement process in order to keep risks to a minimum.
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Risk factors1
Financial risks1.13.2.
CUSTOMER SOLVENCYThe Group is exposed to the risk of credit default on the part of acustomer. Financial risks are identified at the business prospectingstage and when business, technical and financial proposals are beingdrawn up. If applicable, customers undergo a solvency test performedby the Recovery Department. The results of this test are sent to theGroup’s Financial Director.
Gfi Informatique’s top ten clients account for nearly 29% of 2017consolidated revenue. None of these top ten clients alone representsmore than 10% of the Group’s revenue.
The breakdown of receivables due and not depreciated can be found inNote 3 to the consolidated financial statements. The Group takesaccount of the specific risks inherent to the situation of the differentcountries.
INTEREST RATE RISK ON CASH FLOWSThe Group’s exposure to variation risks in market interest rates islinked to the financial indebtedness of the Group, at a variable rate.The management of this risk is explained in Note 6 to the consolidatedfinancial statements under “Interest rate risk on cash flows”.
The hedging instruments implemented are presented in Note 6 to theconsolidated financial statements.
LIQUIDITY RISKS
Group must comply with. Details of so-called default covenants areprovided in Note 6 to the consolidated financial statements.
The goal of the Group is to maintain a balance between the continuity offinancing and its flexibility thanks to the use of overdrafts, bank loans,bonded debt and factoring contracts. The bank loan contracts featureso-called default covenants in the form of financial covenants that the
The Company performed a specific review of its liquidity risk andconsiders itself able to honour its future repayments.
CURRENCY RISKSThe currency risk in respect of commercial transactions is not hedged,as most transactions are made within the euro zone. Elsewhere(outside the euro zone), revenue is generated in the same currency asthe related operating charges, thereby limiting exposure to foreignexchange fluctuations. Very few intercompany operating transactionsare denominated in currencies other than the euro.
This point is discussed further in Note 13 to the consolidated financialstatements under “Currency risks”.
GOODWILL RISKSThe value of goodwill may be negatively affected by impairment in theevent of deterioration of the business concerned and/or a negativechange in its long-term outlook and/or external parameters (increasein interest rates, economic crisis).
For continuing operations, these assets are valued periodically basedon the recoverable value. The recoverable value is the higher of thefair value less costs to sell and the value in use. The procedures fordetermining the value in use are sensitive to any changes in thefeatures of the underlying economic model. The consolidated financialstatements show in Note 8 the sensitivity testing performed.
The net carrying amounts for goodwill as at December 31, 2017, aswell as the impairment from previous years are outlined as follows:
(in thousands of euros) Total France Spain Portugal latAM BeluxSwitzer-
land PolandAfrica
Morocco
Restof theworld
Goodwill 283,126 208,579 33,621 21,507 2,152 5,116 3,873 7,074 1,204 -
Impairment losses recorded in 2017 - - - - - - - - - -
impairment losses recorded in 2016 - - - - - - - - - -
The risk of goodwill impairment losses may also arise as part of a price, net of sale costs, which may be lower than the book value of thedisinvestment strategy, when the disposal of a business is planned. In business.this particular case, goodwill is valued based on the estimated sale
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Risk factors
1Strategic risks1.13.3.
RISKS LINKED TO POTENTIAL ACQUISITIONSThe main purpose of the acquisition of companies which are ofinterest to the Group is for it to establish itself on new markets orimprove its presence in strategic activities. Acquisitions always pose arisk of selecting the correct target, integrating teams, success of theintended synergies, and the implementation of the guarantees taken.The Group’s Investments Committee monitors the correctimplementation of acquisitions processes.
The method for valuing goodwill is presented in Note 8 to theconsolidated financial statements. The same note describes thesensitivity testing which is carried out.
COMPETITION RISKSGfi Informatique operates in a competitive market. Sales of softwarepackages and IT services are linked to the investment decisions of itscustomers.
Economic risks may prompt customers to postpone or even cancelcertain projects. Management of human resources and subcontractorsmay also prove sensitive, particularly in period when salaries and ratesare increased.
Intellectual property risks1.13.4.
There is a policy to protect and enhance the Gfi Informatique Group’sintangible assets namely its innovation, software systems, andindustrial property portfolio. The Group’s Legal and ComplianceDepartment assists players in the Group to protect its creations andalso ensures that the intellectual property rights of its competitorsand clients are respected.
With regard to innovation, particular attention is given to all clausesconcerning intellectual property in the contracts which the Group maysign. This involves ensuring that its clients and partners respect itsintellectual property rights, on the one hand, and that the terms forassigning developments to its clients are specified, on the other. TheGroup also undertakes to respect its co-contractors’ intellectualproperty rights through these agreements.
repository. The Quality Department carries out an audit to ensure thatthis rule is respected.
The Group registers the initial versions or substantial updates of thesources of its software systems with the French ComputerProgrammes Protection Agency (Agence pour la Protection desProgrammes - APP). Therefore, a process called “Protection ofIntellectual Property for the Gfi Informatique Group’s softwaresystems” has been formalised and updated in the form of a“Requirement and Recommendation” available in the Group’s GMS
Finally, with an international perspective, the Group strives toprotect and enhance its trademarks, domain names and designs in itsindustrial property portfolio. Therefore, an international strategy hasbeen set up to register the names and logos of the Group's softwaresystems and offers as trademarks and domain names. Two filingprocesses are in place in the Group, for brands and domain names.
Gfi Informatique is determined to defend its interests and consistentlyobjects to the registration of trademarks by third-party companieswhen it considers that there is the risk of confusion between these andits own. Brand or trademark coexistence agreements are alsoconcluded to strengthen Gfi Informatique's property rights.
Tools have also been set up to monitor the Group’s most strategicindustrial property rights to effectively combat any infringement,unfair competition or economic parasitism.
The Group also runs training workshops on protecting and enhancingbrands in order to promote best practices with regards to its ownintellectual property rights as well as those of third parties.
Insurance and risk cover1.13.5.
The Group has set up an insurance programme with leading insurancecompanies, both at the central as well as international level, withinthe scope of its risk management and financing policy in order tocover the main risks which could affect it.
As regards insurance, a distinction must be made between propertyand damages insurance and liability insurance.
The Gfi Informatique Group’s main insurance policies cover itsprofessional and operational liability risks, civil liability of its seniorexecutives, employees' business travel, the entire fleet of Companycars, all hardware and premises occupied in France and abroad, as wellas fraud/cybercrime risks.
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Risk factors1
PROFESSIONAL LIABILITY INSURANCEGfi Informatique has taken out, on its own behalf and that of itssubsidiaries, a Group professional liability and operational insurancepolicy covering the pecuniary consequences arising from GfiInformatique’s civil liability for damage caused to third parties by itsprofessional activities.
DIRECTORS’ LIABILITY POLICYThe Group has taken out a civil liability insurance policy for seniorcorporate executives which is valid for the de jure and de factodirectors of Gfi Informatique and all the Group’s French and foreignsubsidiaries.
BUSINESS TRAVEL POLICYThe Group has a policy covering business travel for its employees andsenior executives on business in France and abroad. The mainguarantees under the policy are assistance and/or compensation inthe event of theft, accidents, death or imprisonment.
DAMAGES POLICYThe Group has taken out insurance, on its own behalf as well as itsFrench subsidiaries, for:
the premises which the Group leases or owns;•movable property: furniture, all computers belonging to or•entrusted to the Gfi Informatique Group (fixed and portableequipment).
This policy covers all damage as well as certain financial consequencesimpacting one of the items concerned (in particular the reconstitutionof computer data).
Foreign subsidiaries are covered by local insurance policies.
MOTOR FLEET INSURANCEThe Gfi Informatique Group has taken out, on its own behalf and onthat of its French subsidiaries, insurance cover for all motor vehiclesmade available under long-term leases and for the risks inherent toemployees’ personal vehicles when they are used for professionalpurposes.
FRAUD/CYBERCRIME INSURANCEThe Gfi Informatique Group has taken out, on its own behalf and onthat of its subsidiaries, insurance cover against fraud and cybercrimerisks. The aim is to cover the Group against fraudulent activitiescommitted for the purpose of any direct or indirect personal gainamounting to a criminal offence (breach of trust, embezzlement,counterfeiting, cheque fraud, etc.) as well as any claims following acyber attack or personal data confidentiality breach.
Financial risks related to the effects of climate change1.13.6.
(see chapter 2, Corporate Social Responsibility)
The Company's low-carbon strategy1.13.7.
(see chapter 2, Corporate Social Responsibility)
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Risk factors
1Information on the internal control and risk management 1.13.8.procedures relating to the preparation and processing of accounting and financial information Summary description of the internal control
DEFINITIONS, GOALS AND LIMITS OF INTERNAL CONTROLThe Group refers the AMF reference framework in matters of internalcontrol and uses it as the inspiration for the analysis and improvementof its internal control system.
Internal control is a system defined which aims to ensure:
compliance with laws and regulations;•the application of the instructions and guidelines determined by the•Board of Directors;
the proper functioning of the Company’s internal processes,•notably those contributing to the protection of its assets;
the reliability of financial disclosures; and•in a general way, anything that contributes to the control of the•Company’s activities, the efficiency of its transactions and theefficient use of its resources.
Risk management aims to:
preserve the Company’s value, assets and reputation;•add security to the Company’s decision-making and processes so as•to make the attainment of its objectives more likely;
ensure the Company’s actions are in keeping with its values; and•enlist the employees in a common vision of the principal risks.•
One objective of our procedures for internal control and riskidentification is to prevent and limit risks of error and fraud,particularly in accounting and finance. However, internal control andrisk management cannot provide an absolute guarantee that theserisks are totally eliminated and the objectives of the Company will bereached. According to the AMF, an internal control system requires:
an organisation;•the internal distribution of information;•a system of risk identification and risk management;•the application of controls; and•ongoing monitoring of the system.•
ORGANISATIONThis description follows the structure of the AMF referenceframework.
Scope and environment
The internal control system implemented by the Gfi InformatiqueGroup and described in the present report covers all the transactionsperformed within the Group, at the level of the parent Company andthe subsidiaries included in the consolidation scope.
computer applications, employing formal rules and a set of indicators totrack the new Company. To take account of the specifics of particularbusiness models, exceptions are made for some subsidiaries to retain anindependent internal control and risk management system. The level ofinformation required, however, is geared to Group standards.
As part of recent consolidations, the Group has made its best efforts tointegrate the new subsidiaries into the Group’s standard processes and
Internal control is carried out in a context which covers, in particular:
the Group’s values, which are shared on Gfi Informatique’s website;•the Group’s culture, which is promoted through various training•seminars;
the Company’s organisational structure, including centralised staff•services;
the Group’s quality assurance system and quality policy;•the frequency of discussions, through meetings, or more informal•channels, between the different country managements;
the human resources management policy, which in France notably•involves conducting annual reviews with the Group’s employees.
Internal organisation of the Group
The organisation is structured along the following main lines:
area, or geography, in order to locate the national and international•coverage of operations;
Business Line, in order to improve the delivery and management of•operations;
sector, or customer Business Line, in order to help operations•become larger parts of the customer’s value chain.
Definition of authority and responsibility
The Organisational Memorandum, updated yearly by the QualityDepartment, defines the internal organisation, the distribution oftasks and the reporting relationships within the Group.
Additionally, in France the actual delegation of authority andresponsibility to managers, heads of employee representative bodiesand site managers is handled through Human Resources with riders totheir employment contracts.
Furthermore, formalised delegations of authority are signed by theheads of country and the heads of the international financedepartments. These delegations of authority set out the operationalactivities that are subject to the approval or prior notice of theGroup’s Management, notably as regards general policy decisions(operations having an impact on the Group’s scope of consolidation,strategic decisions, premises, external communication, intellectualproperty, and legal disputes and decisions), human resources and pay,financial operations and management (contracts, banks and financialtransactions), investments, and significant accounting forecasts. Therules for lines of accountability and signing authority are defined inthe quality manual.
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Risk factors1
Information system and applications
REPORTING IS AT THE CORE OF THE SYSTEM
Line management reports (by Area/Business Line/sector) throughapplications installed by the Group, including those specifically for:
sales management;•human resources management and payroll;•production management on fixed-price contracts;•management of the business as a whole and establishment of a•reporting system;
preparation of the parent Company and consolidated financial•statements.
SECURITY OF INFORMATION SYSTEMS
The Group Security Department (DSG) ensures the security andcontinuity of the information system. As such, it defines theapplicable security strategy and guiding principles, laid down in theinformation systems security policy statement (PSSI), and sees to theuse of best practices by employees and the optimal level of security inrelation to the risk incurred.
The Group’s PSSI serves to spell out the guidelines that will protectthe IT assets of the Gfi Informatique Group against a wide variety ofrisks-including fraud, espionage, accidents and human error-so as toearn the trust of our customers and comply with legal and regulatoryframeworks.
In this way the DSG provides a framework for standards andconsistency by making clear the coordination necessary among ISsecurity, business continuity, safety and security of persons andproperty, and the hedging of or insuring against IS Security risks.
The DSG supports line managers with training, advice, audits andrecommendations to make sure that the Group’s security measuresare complied with.
In the event of a major security crisis affecting the security ofinformation, a security crisis unit is set up under a written procedurefor security crisis management. The Information System SecurityGovernance committee (CGSSI), chaired by the Group’s InformationServices director, meets weekly to address and validate the impact ofsecurity on the master plan. The Industrial Director oversees andmonitors the information system master plan.
Quality and procedures
QUALITY ASSURANCE POLICY
To implement Group policy, a Quality Management System (QMS) isused, available in a document base accessible to all employees on theGroup’s Intranet. The quality charter, the starting point for theGroup’s quality vision and how it organises its QMS, lays out thelinkages with external standards and models.
Gfi Informatique is assessed by external accredited bodies (such asAfnor Certification) on its compliance with ISO quality and safetystandards, CMMi, and since 2016, ISAE3401.
The mission of the Group’s Quality Department (DQG) is to:
lay down, along with Senior Management, the Company’s quality•assurance policy, which sets precise guidelines, and to define theobjectives for implementing the policy throughout theorganisation;
prepare and track the Company’s quality certifications and ensure•consistency between the documented management system and therequirements of the leading sets of standards;
develop and implement a quality assurance process that ensures•that the Group’s various entities are consistent with one another;
support the Group’s managerial units in order to achieve overall•improvement of the management system.
PROCEDURES
The Group has internal regulations covering all operational areas(manufacturing, sales, marketing, etc.), functional areas (humanresources, purchasing, legal, internal IT system), management-relatedand financial departments. These are available in the documentedGMS (Global Management System) and its various adaptations in theGroup’s subsidiaries.
INTERNAL INFORMATION DISTRIBUTION SYSTEM
Overview
The purpose of the internal information distribution system is tocommunicate information upwards to Senior Management anddownwards to operating units, and along with that to direct, verify,assist and train.
It is based on Steering Committees that meet at each organisationallevel including the Group’s Executive Committee.
These meetings adhere to precise standards as to scheduling,participants and agenda. They are held at regular intervals in line withthe different planning horizons.
For particular issues that so deem necessary, further ad hocmonitoring is performed by support staff.
CODIR
To have tightly organised governance on a weekly basis, a SeniorManagement Committee known as the CODIR has been set up,bringing together the Group’s major business activities around theChairman and General Manager. Each member, selected from theExecutive Committee or COMEX, represents not only his or her areaof responsibility on the COMEX but also his or her line or staffposition, in a direct reporting relationship.
COMEX
The Group’s Executive Committee meets on a monthly basis to ensurethat the policies set by the CODIR are being carried out and tocoordinate the Group’s “commercial development”.
Management Committee
The Group’s Management Committee meets once every quarter,bringing together the managers of the Group’s principal entities inFrance and abroad, so as to share the Group’s strategy and ensurethat, operationally, it is carried out in a coordinated manner by sharingbest practices and focusing the teams’ energy on the major issues ofthe coming quarter.
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Risk factors
1Moreover, at the Business Unit level, management meetings of theoperating managers and their Control Department are held monthlyto analyse performance.
Every quarter, meetings are held with the COMEX and the BusinessUnit managers or country managers to analyse the performance forthe period and the outlook for the next quarter and the year inprogress.
RISK IDENTIFICATION AND MANAGEMENT SYSTEMThe Group regularly reviews the risks which could have a majornegative effect on its business, its financial position, its results or itsability to meet its targets.
The Board of Directors, assisted when necessary by the various specialcommittees according to their area of competence, is responsible fordefining the Group’s risk management policy, implementing theappropriate internal control system and monitoring its efficiency. Thispolicy is implemented via financial and operating management andcontrols concerning compliance with the regulations.
Risk mapping
In France and in the international market, a general risk map is used toidentify risks, both in terms of their occurrence and their significance,the evaluation of risk management procedures, and the submission ofan action plan for the risks considered as priorities.
The approach taken involves meeting the main functional managers tohelp them, via a self-assessment questionnaire, to identify andmeasure the main risks faced, to identify and evaluate the steps andprocesses established to address them, and to then assess the residualrisks, for which remedial or monitoring measures are proposed.
The Group has also started a process of formal and systematic riskmonitoring through an Enterprise Risk Management (ERM) system.This is a strategic and proactive approach according to the COSOframework. The goal is to maximise shareholder value by a process atsenior management level to assess and respond to identified risks.
Operational risks, management of customer projects
The bulk of the operating control activities are carried out by themanagement at each operating unit, assisted by the ManagementControllers and by the subsidiaries’ Finance Departments.
General and operational procedures seek to ensure that allcommitments given and/or agreed to contractually with customersmeet Group standards, that projects are carried out according tocontractual conditions and that any possible related risks aremanaged.
The Company’s quality system, which is ISO 9001 certified and listedin the management report, defines the rules to set up and validatetechnical and financial proposals.
conformity of the developments with respect for a high level ofquality and the budget used with the customer.
The Large Customer Accounts Department provides commercialassistance for the preparation of the offer and the understanding ofthe problems of the customer. The Industrial Department provides themethodological and technical assistance to ensure the technical
In addition to these mechanisms, the following special committeesexist within the Group:
Oversight of the sales cycle by the Business Committee.
The Business Committee (BC) oversees the progress of the sales cycle(from the lead to signing):
during the RFP stage, it confirms that Gfi Informatique’s•involvement is financially and technically worthwhile;
during the proposal stage, it decides whether or not to bid•depending on the capabilities of the Group, identifies any externalresources needed, identifies the at-risk elements, and reviews thetechnical, legal and financial aspects of the response;
and before submitting the response, it investigates all factors going•into the price and reviews the entire proposal.
Controlling commitments made to customers from a legal standpointis carried out through a review, mandatory for contracts of 200thousand of euros or more, by the Legal department before signing. Awritten procedure outlines the series of approvals for such contracts.
Management of at-risk projects by the Risk Management Committee
The Risk Management Committee, chaired by the Group’s IndustrialDepartment, meets weekly in France to identify and manage contractswith the highest level of risk.
It is made up of the Industrial Director, the Quality Director and theHead of Group legal division, and on occasion, a representative of theFinance Department and a member of the Executive Committee.
Over the course of the project it oversees the technical and financialcontrols undertaken to manage the risks.
The Group uses a computer application installed by the IndustrialDepartment to monitor and report on contractual projects. Itgenerates automatic alerts when certain criteria are not met. Theoperational risks identified are included in the weekly review until anappropriate action plan has been completed.
Outside France, the local Risks Committees are made up of localmanagers (management, finance and operations).
The Group Risks Committee also reviews international projects andthe projects of foreign subsidiaries that cross certains threshold.Moreover, it may be consulted by a simple request from a foreignsubsidiary.
CONTROL AND OVERSIGHT
Oversight of the internal control system
In addition to the internal controls and the controls placed on thosereporting to them, carried out by line managers at all levels, pursuantto the lines of accountability in effect in the Group, the staffdepartments play a special role in terms of risk management byproviding support to line management, by working in a preventivemanner in mandatory consultations required under procedures or byperforming audits after the fact as to the application of proceduresand the results obtained.
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Risk factors1
A particular role is played by the Finance Department in terms ofmanagement control and by the Quality Department in terms ofcompliance with the requirements laid down in Group and contractualguidelines.
FINANCE DEPARTMENT
All of the Group’s financial transactions fall within the responsibilitiesof the Chief Financial Officer, to whom the Group ManagementController and the heads of the subsidiaries’ Finance Departmentsreport directly.
The primary mission of Management Control is to consolidate andanalyse the monthly performance reported by the internalmanagement system, to verify that performance is in line with themonthly projections, to help line management to train participants inthe management system, and to reconcile the data in the internalmanagement system with those in the general accounting system.Management Controllers are divided into six teams specialising bybranch of Group operations in France and abroad. The departmentconsisted of about forty people at December 31, 2017.
As part of its mission, Management Control identifies and measureseach unit’s particular risks. It specifically ensures that there isinsurance coverage on revenue-generating projects. It reviews projects“on alert”, i.e. projects experiencing technical, market or legaldifficulties. It checks that revenue recognition complies with theGroup’s rules. It ensures that each unit’s expenses are properlyaccounted for. It audits uninvoiced revenue and inspects unraised bills.It audits compliance with rules and procedures and with closing dates.
The main mission of the Group Quality and Security Department(DQSG) is to protect the Group:
ensure compliance with applicable laws, regulations, certifications•and compliance requirements;
escalate any crisis situation to the appropriate competence level•and take all protective decisions in the event of a critical situation;
ensure compliance with our contractual obligations and verify the•implementation of our processes;
prevent and control all risks of non-quality, customer•dissatisfaction and security breaches involving customer data orGroup data;
set up and deploy the required quality and security systems across•the entire organisation (Countries, Sectors, Business Lines, Areas,Corporate Functions) to ensure that the Group’s objectives are met;
measure the degree to which the objectives have been met;•propose and conduct the required operational improvement plans;
on behalf of the CNIL, take charge of the management processes•legally required of the CIL (data protection officer); This particularlyconcerns the exercise of the right to access personal data;
support operations, including those that relate to customer needs•(from their own quality assurance manager or CISO) in theimplementation of good practices, especially in respect of Frenchoperators of vital importance.
The DQSG has some twenty internal auditors certified by externalaccredited bodies such as Afnor.
involved within the Group. The DQSG is independent from the projectmanagement system. As such, it provides “external” quality assurance,whose objectives are to keep production reliable and to verify thecompliance, application and effectiveness of the system, as describedin the internal Global Management System (GMS) and externaldocuments (contracts and quality/security assurance plans).
As part of its control remit, the DQSG conducts some 10 systemaudits and some 30 operating performance audits each year, in Franceand abroad, in accordance with the needs and programme determinedby Senior Management. These audits aim to verify that theManagement System is being applied effectively by all persons
An annual review by Senior Management ensures that theManagement System is efficient and includes appropriate riskmanagement. This review relies on the evaluation and analysis ofstakeholder objectives and feedback, the results obtained, and thesummary of internal and external audits.
The review provides an opportunity to enhance policies (Quality,Security, etc.) and related objectives, and draw up an action plan ofthe improvements envisaged over the coming year.
Oversight of the internal control system
INTERNAL OVERSIGHT
While improving the internal control system is a responsibility sharedby all Group employees, Senior Management plays a key role in termsof oversight.
Senior Management
Senior Management oversees the continued efficacy of the internalcontrol and risk management systems. It initiates any action thatbecomes necessary to correct malfunctions that have been observedand keep them within the parameters of acceptable risk. SeniorManagement ensures that the appropriate information iscommunicated in a timely manner to the Board of Directors and theAudit Committee. It makes particular use of the Internal AuditingDepartment.
Internal auditing
under the internal auditing charter updated and approved by the AuditCommittee, the Internal Audit Department helps to oversee theinternal control system. Its mission is to:
make independent and objective an evaluation of the functioning of•the internal control system through audits assigned to it by theaudit plan approved by the Chairman of the Board of Directors;
draft any and all recommendations that would improve the way the•Group functions;
track the implementation of the recommendations;•keep the risk map up to date.•
The Internal Audit Department is placed under the direct authority ofthe Chairman of the Board of Directors and has a close, ongoingrelationship with the Audit Committee. It reports to them.
The annual internal audit plan is approved by the Chairman of theBoard of Directors, based inter alia on the priorities adopted for theyear and on the risk map, and is presented to the Audit Committee fortheir opinion.
A three-year audit plan was prepared to provide full cover of the risksidentified within the Group and future acquisitions.
The rules and reference framework used by the Group are theinternational internal audit rules, specifically the InternationalStandards for the Professional Practice of Internal Audit (IPPF). Thisprofessional practice framework provides the authoritative guidanceapproved by the Institute of Internal Auditors (IIA).
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Risk factors
1To meet these standards, the internal audit department added newworking tools that comply with the standards mentioned above.
Board of Directors (Audit Committee)
The Audit Committee examines the main features of the internalcontrol and risk management systems implemented by SeniorManagement to manage risks: the organisation, roles and functions ofthe key people involved, the risk reporting structure and oversight ofthe Group's control systems.
It takes an overall view of the procedures for the preparation andprocessing of accounting and financial information:
it hears the Statutory Auditors several times a year. The latter•report on all work they have carried out and especially their workon the quality of the internal control system;
it is made aware of the contents of the annual internal audit plan.•EXTERNAL OVERSIGHT
Furthermore, the internal control system is overseen by the StatutoryAuditors and the AFNOR certification auditors with respect to theQuality and Security Systems.
Statutory Auditors
The ongoing assignment of the Statutory Auditors is to ensure thequality of the internal controls and procedures in place. In this regard,they perform their work in the Group throughout the year, and theirwork is not limited to interactions with the Accounting Department.
To get a better understanding of how operations and transactions arereflected in the financial statements, they interview operatingmanagers on a regular basis. These interviews are conducted withinthe entity or subsidiary examinations, during which the auditorsundertake a review of the major projects underway, their progress andany difficulties experienced.
Afnor Certification Auditors
The auditing process aims to ensure (a) that the system complies withinternational standards and (b) that it is in fact applied throughout thelist of certified companies.
Each year AFNOR Certification chooses sites to visit based on the timesince they were last visited and how representative their operationsare.
This audit is undertaken in the spirit of identifying pathways forimproving Gfi’s quality management system and continuouslyimprove performance.
Preparation of financial and accounting information
CENTRALISED FINANCE AND ACCOUNTINGPreparation of the accounting, economic and financial information isplaced under the responsibility of the Group’s Chief Financial Officer,after review by the Audit Committee.
The Finance Department is managed through a Finance DepartmentCommittee (CODIR), which holds weekly meetings conducted by theGroup’s CFO. These are attended by the directors of the principalFinance units that report directly to the CFO (Treasury, ManagementControl, Accounting, Consolidation, Legal, Information System, Tax)and handles all critical Group-wide issues.
PREPARATION OF ACCOUNTING AND FINANCIAL INFORMATION TO BE PUBLISHEDTo ensure effective control on its businesses, the Group places itsoperating entities under an obligation to report on all budgetary,projected, operating and accounting information that are needed forthe general management of the Group on a monthly, quarterly,half-yearly and annual basis. A closing schedule is communicated tofinancial managers, Management Controllers and accountingmanagers.
The process of producing accounting and financial information occurson two levels: local:
at the country level, responsibility for financial and accounting•information lies with each country’s financial controller;
centralised: the Group’s Management Controllers analyse the•reports submitted by the French and foreign subsidiaries andpublish a consolidated report, which includes a number of keymanagement indicators, and the Consolidation Departmentproduces the financial consolidation.
Preparing and monitoring the budget
The budget is a fundamental management control tool. The process ofpreparing the budget is the high point of the various reportingrelationships and levels of the Group. Each of the basic budgets isdrawn up according to the budget instructions in light of pastperformance, the strategic directions chosen by the Group and theforecasts available on the probable course of the market.
Once reviewed at different levels of management, the final budget isset for the entire year. The projections are updated at least twiceduring the year based on forecasts.
The Group uses a market IT tool to develop the homogeneity ofpractices and secure budget processes as a whole.
The operating reports process
The information is collected at the most detailed level by Costscentre. These are aggregated into Business Units that make up theGroup’s six business lines. The operating reports are presented bycountry.
The operating reports make it possible to make monthly analyses ofrevenue and expenses, both by type and by purpose, and to updatethe various performance indicators versus budget. The performancesgive rise every month to an analysis carried out with operatingmanagers of variances from budget, done in order to decideimmediately on any action plans necessary.
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Risk factors1
The Management Controllers validate the information received fromthe entities or the Accounting Departments of all the companiesincluded in the scope of consolidation.
Process of accounting consolidation
Financial consolidation is done on a monthly basis by theConsolidation Department based on the consolidation sheetsproduced at the legal entity level, using a standard commercialcomputer application.
The financial statements are prepared in line with local standards.Where necessary, they are then restated to meet Group standards.The Group applies the IFRS accounting standards, as adopted by theEuropean Union.
At each closing, the scope of consolidation is updated by the FinanceDepartment. A systematic comparison is made between the financialdata supplied by the operating reports and the consolidated financialinformation to verify that they match.
A Group manual on consolidation procedures sets out the main stagesinvolved in preparing the consolidated financial statements. Thesubsidiaries have a closing schedule and a manual that defines themethodology for reporting sets and the nature of the information tobe sent to the Consolidation Department.
Throughout the year, the Consolidation Department monitors newIFRS standards under development, in order to be aware of andanticipate, as far as possible, their impact on the Group’s financialstatements.
Critical sub-processes
The Group has implemented means of risk control adapted to each ofthe processes identified as being critical for the preparation of theaccounting and financial information. The following processes aremonitored and closely analysed:
recognising revenue;•monitoring trade receivables;•
monitoring cash positions;•purchasing;•monitoring off-balance sheet commitments.•
COMMUNICATION OF FINANCIAL AND ACCOUNTING INFORMATIONThe Group’s Chief Financial Officer is responsible for communicatingthe Group’s results to the Board of Directors every six months.
The financial and accounting information is primarily deliveredthrough the annual and half-year financial reports, financial pressreleases and meetings with analysts and investors.
The annual financial report is a key document in the Group’scommunications. The registration document, including the annualreport, brings together, under the responsibility of SeniorManagement and the Finance Department, all disclosures whosepublication is required by law and regulations.
Prior to publishing the consolidated financial statements, the AuditCommittee examines the statements and meets with the StatutoryAuditors. The latter present their conclusions and comments directly tothe Audit Committee and then to the Board of Directors. This takes placebefore the statements are approved. The Board of Directors receives fromthe Chairman of the Audit Committee the minutes of its meetings.
Senior Management and the Finance Department define the financialcommunications and the terms of financial press releases.
The analysts’ and investors’ meetings involve special preparation and apresentation to the Board of Directors beforehand which is used as abasis for the comments and explanations that will be provided duringthese meetings by the Chairman and General Manager, the CFO andthe employees handling investor relations.
Outlook and works continued in 2018
The improvement and rationalisation of processes are an ongoingeffort, the purpose of which is to further advance the internal controlsystem. As part of its internal control, in 2018 the Gfi InformatiqueGroup expects to:
switch to Sage SBE in SaaS mode for banking communication,•which includes modules for anti-fraud protection and managingbanking authorisations;
expand international cash management;•
conduct audits on a selection of operating units, particularly units•newly consolidated in 2016;
specific mission according to particular event ;•lay out and execute the annual internal audit plan for 2018;•launch a pilot project to roll out a new ERP (SAP cloud).•
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Significant matters likely to impact a takeover bid
1SIGNIFICANT MATTERS LIKELY TO IMPACT 1.14.A TAKEOVER BID
Pursuant to Article L. 225-100-3 of the French Commercial Code, asfar as the Company is aware, there are no significant matters likely tohave an impact in the event of a takeover bid, with the exception of asyndicated credit agreement signed on October 9, 2015, whichbecomes renegotiable in the event of a change in control. However,this clause did not apply to the acquisition of a majority interest bythe Mannai Corporation.
It should also be noted that, in the event of a change of control, aholder of 2014 bonds can, in certain conditions, request the earlyredemption in cash of all or some of their bonds. However, theBondholders’ General Meeting of January 14, 2016 decided to waivethe right to early redemption of bonds within the scope of the plannedfriendly takeover by Mannai Corporation.
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PRESENTATION OF THE GROUP AND ITS BUSINESS1
43Gfi Informatique - 2017 REGISTRATION DOCUMENT
2CORPORATESOCIAL
RESPONSIBILITY
SOCIAL INFORMATION2.1. 44Gfi Informatique employees, the Group’s greatest 2.1.1.asset 44Working hours, tailored to the Group’s needs and 2.1.2.reflecting the views expressed by employees 48Ongoing intensive dialogue with trade unions2.1.3. 49Employee health and safety, concrete actions2.1.4. 50Development of human capital and skills, a lever 2.1.5.for success 52Equal treatment and respect for others, two major 2.1.6.pillars of the Group’s employment policy 55Promotion of and compliance with the 2.1.7.fundamental conventions of the International Labour Organization 58Raising employee awareness of sustainable 2.1.8.development 59
ENVIRONMENTAL INFORMATION2.2. 60General environmental policy2.2.1. 60Pollution2.2.2. 61Circular economy2.2.3. 61Climate change2.2.4. 64Biodiversity protection2.2.5. 65Global compact – Environment principle2.2.6. 66
INFORMATION ON SOCIAL 2.3.COMMITMENTS TO PROMOTE SUSTAINABLE DEVELOPMENT 67Geographical, economic and social impact of the 2.3.1.Company’s business 67Stakeholder relations2.3.2. 67Subcontractors and suppliers2.3.3. 68
ETHICS, AT THE HEART OF THE 2.4.GROUP'S BUSINESS PRACTICES 69Commitments made by Gfi Informatique's 2.4.1.Management 69Concrete measures2.4.2. 70
CONCLUSION2.5. 72
OVERVIEW OF SOCIAL AND 2.6.ENVIRONMENTAL INDICATORS 73Social indicators2.6.1. 73Environmental indicators2.6.2. 75
METHODOLOGICAL NOTE2.7. 76
INDEPENDENT VERIFIER’S REPORT ON 2.8.CONSOLIDATED SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION PRESENTED IN THE MANAGEMENT REPORT 78Responsibility of the company2.8.1. 78Independence and quality control2.8.2. 78Responsibility of the independent verifier2.8.3. 78
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Social information2
Corporate Social Responsibility (CSR) involves integrating social and environmental concerns into the Company’s strategy, itsactivities and its interactions with its different stakeholders.
The United Nations Global Compact, launched in July 2000, was the first major initiative to bring companies, the world of workand civil society together around ten universal principles in four main areas: Human Rights, International Labour Standards,Environment and the Fight Against Corruption.
In France, Article 225 of the Grenelle II law introduced transparency obligations on CSR initiatives for businesses. CSR-relatedissues have since become a key area for the General Management of companies, including the Gfi Informatique Group, whichprovides disclosures on the subject each year in its annual report.
Gfi Informatique obtained the “Silver” award when it replied to the EcoVadis CSR questionnaire in December 2014. The Groupobtained a mark of 60/100 during the EcoVadis 2016 assessment (i.e. a 10-point improvement on the 2014 assessment), thusmaintaining its “Silver” status.
The law of July 12, 2010 and its implementing decrees made it compulsory for large companies to communicate on theemployee-related and environmental consequences of their activities and on their social commitments.
This report, which meets this requirement, is divided into three sections:
social information;•environmental information;•information on social commitments.•
SOCIAL INFORMATION2.1.
Gfi Informatique employees, the Group’s greatest asset2.1.1.
GFI INFORMATIQUE IS A LEADING EMPLOYERPresent in sixteen European countries (France, Spain, Portugal, Poland,Belgium, Luxembourg, Switzerland and England), in China, in Africa(Morocco and Ivory Coast), in South-East Asia (Singapore) and in theAmericas (United States, Mexico, Colombia), the Group had 14,716employees at December 31, 2017. This represents an increase of 17%over the previous year. The expansion of the Group’s workforce in2017 can mainly be attributed to Spain (+674 employees) andPortugal (+758 employees). However, France, with 9,814 employees,accounts for 66.7% of the Group’s workforce. In 2017, the Grouprecruited 2,006 employees in France and welcomed 78 employeesfrom acquisitions, including Garsys.
integrating young people into the workplace before they enter the jobmarket. Several actions are undertaken by the Group in France toassist young people looking for a job or who have dropped out ofschool, as outlined in greater detail in section 2.3.2.
With almost 3,084 and 3,539 new employees in 2016 and 2017,respectively, the Group makes a significant contribution toemployment in France, with its workforce evenly spread between theParis region and the rest of the country. In 2017, new hires within theGroup represented 97.8% of new entries in the Group and acquisitionsrepresented 2.2%. It should be noted that a quarter of employeeshired in France were co-opted. The data excludes the hundred or sointerns that the Group employs each year, which is another way of
Conversely, 2,969 employees left the Group in 2017, including 248through redundancies (8.4%).
With 93.5% of Group employees employed under a permanentcontract at the end of December 2017 (96.3% in France), the Group hasendeavoured to build a lasting relationship and foster trust withemployees, especially by offering them attractive job prospectsthroughout their careers. In Portugal, where market demand and locallabour laws are different, Gfi Informatique relies more on fixed-termcontracts, which at the end of December 2017 represented 21% of thelocal contracts. Morocco, Belgium, Luxembourg, Switzerland, IvoryCoast and Poland have no or very few fixed-term contracts, while lessthan 1% of employees in France and 8.4% in Spain are employed underthese contracts, including some employees from disadvantaged groups.
With 55% of employees in France being outside the Paris region, GfiInformatique is a major driver of regional employment growth. GfiInformatique is based in around 50 towns and cities all over France.
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Social information
2
This national network enables it to serve its customers and theirprojects better. Gfi Informatique has also developed shared servicecentres, particularly in Lille, Lyon, Nantes, Toulouse and Meudon. Byhaving a regional presence, Gfi Informatique gains a betterunderstanding of its customers’ core concerns and contributes to thevitality of certain regions.
In Spain, with nationwide locations (Madrid, Basque Country,Valencia, Catalonia, Andalusia), the Group is also a national playerfully engaged with local communities.
A SUSTAINED INDUCTION POLICYAt the end of the recruitment process, which can vary from two weeksto four months depending on the profiles, the Group’s inductionpolicy is a continuous and sustained process over several weeks. Inorder to create a sense of belonging to the Group, an online employeeorientation programme on an e-learning platform is available to futureemployees, allowing them to discover the Group's values, strategy,talent management, etc. When the new employee joins the Group inFrance, he or she is informed of the administrative aspects and themilestones of their induction (entry in the activity report, presentationto the team, identifying direct and indirect management, tour of thepremises, etc.). The welcome booklet and the main information andcommunication platforms (Intranet, Sharepoint, YAMMER, GlobalManagement System (GMS)) are presented to the new employee. Onthis occasion, the employee hands over the administrative documentsthat were requested from him or her beforehand in order toadminister the employee file.
The employee then meets his or her manager and the commercialteam that will provide support throughout his or her employment.The employee is also introduced to the clients concerned by his or hermissions or in-house projects. Before a mission begins, the managerwrites up a mission order, which includes the client’s name, and theplace, duration and type of the mission. On several occasions, inparticular when the work contract starts, the manager and/or thesales team will discuss the project/mission and any problemsencountered and the resources allocated to overcoming them, eitherover the telephone or face-to-face. The employee’s permanentintegration is validated at the end of the trial period. In addition, newemployees are asked to give their opinion on the induction andrecruitment process using questionnaires, which once completed aresent to General Management and managers allowing them to makeany necessary improvements.
Specific induction courses for three areas (delivery, sales andmanagers) are organised at the Group level in France to facilitateemployees’ induction and provide them with key insights into theinternal tools at their disposal.
MULTI-GENERATIONAL DIVERSITY, A PILLAR OF GFI INFORMATIQUE’S EMPLOYMENT POLICYWith employees having an average age of 40, Gfi Informatique isrecognised as a dynamic and multi-generational company. Thedistribution of employees by age Group and country can be found inthe appendix.
new talent, who can then join Gfi Informatique on a permanentcontract.
For several years, Gfi Informatique in France has campaigned for theprofessional and social inclusion of young people, arranging more than309 work-study contracts (apprenticeships and vocational training)and more than 174 internships in 2017. Indeed, work-studyprogrammes and internships are regarded as an undisputed source of
After negotiating with trade unions, Gfi Informatique in France signedan employment and career management agreement (GEPP) at the endof 2016 for a period of two years.
This resulted in the following commitments and measures covering anumber of topics:
trade repositories;1.
career supervision for employees;2.
measures to promote the integration of young people and skills3.development;
measures to promote the employment of older workers, in terms of4.developing skills and qualifications, and access to training;
training courses;5.
Gfi corporate university;6.
promoting employee mobility;7.
measures specific to the career progression of employees with trade8.union responsibilities.
Other Group subsidiaries are also particularly proactive and engagedin this area. For example, Belux this year hired several young peoplewho recently graduated from school. After being trained in-house,they continue to receive guidance from more experienced consultants.This form of mentoring is particularly popular among youngeremployees. Belgium has also introduced an employment plan for olderworkers, i.e. employees over the age of 45. Likewise, Gfi InformatiqueMorocco, in cooperation with the Moroccan employment service(ANAPEC), welcomed several new graduate trainees, with the aim ofrecruiting them to the Group on permanent contracts.
A PERFORMANCE-BASED PAY POLICY
Average annual remuneration
At a time of global uncertainty, Gfi Informatique has neverthelessmaintained an attractive remuneration policy (see appendix fordetails), with remuneration levels above the local conventionalminimum. With a theoretical gross basic salary of around 44,503euros per annum in 2017, the average salary at Gfi Informatique inFrance is almost 2.5 times the French minimum wage. With grossaverage earnings in France in 2016 of 43,966 euros, the increase inaverage salary of 1.2% in 2016 and 2017 is explained primarily by theindividual increases granted under the pay policy. The sharp increasein average compensation in Spain (+7%) and Portugal (+43%)compared to 2016 is due to the acquisition of the subsidiaries Efronand Roff, which had employees with a long length of service and highsalaries. Details of the average annual salary in 2016 and 2017 bycountry can be found in the appendix.
Pay increases
In terms of the process, in order to ensure that the pay policyimplemented in France is consistent with the Group’s other BusinessUnits, the Remuneration committee assesses the pay increase requestssubmitted by managers. The committee meets four times a year (twicein March and again in June and September). Pay increases can beimplemented on three different effective dates during the year,depending on the employee’s anniversary date. The committee reachesdecisions objectively in accordance with the principles of its pay policy,namely: recognition of individual performance and/or contribution,potential for change, respect for fairness and equality in the workplace,
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identification of Key People and High-Potential Employees, strategicworkforce planning, external competitiveness and payroll cost control.The committee also takes steps to reduce any gender pay gaps and toneutralise the fulfilment of employee representation mandates incompliance with the principles of equal treatment. Managers arereminded of these principles at the beginning of each year, whenannual pay guidance is issued. Managers are also reminded each year ofthe need to offer identical starting salaries to future employees withthe same qualifications, skills and experience. During the peoplereviews prepared by each manager ahead of Remuneration Committeemeetings, HR managers also act in accordance with the pillars thatform the Group’s remuneration policy. With their broad knowledge ofHR processes, HR managers also ensure that the remuneration policy isconsistent with the HR projects undertaken (for example, thedeployment of strategic workforce planning or the launch of onlineappraisals). During the three pay increase campaigns carried out in2017, over 46% of employees received an individual pay rise of anaverage significant amount of 4%.
For the 2017 financial year, management in France reiterated its policyof individual increases for the compulsory 2017 annual salarynegotiation with an individual increase envelope of 1.8% of thepayroll. Individual pay increases are awarded based on a performancereview and based on whether the salary is consistent with internal andexternal data, following a recommendation from managers and aftervalidation by the Pay Committee. Mileage allowances were reviewedin 2017, with 60% of public transport season tickets paid for (up from50%), i.e. above the legal requirement.
Lastly, with regard to gender equality, management has adoptedseveral measures: systematic pay increase for women returning frommaternity/adoption leave, payment of compensation in addition tosocial security benefits to men who take paternity leave, guaranteedwage increase for employee representatives and release of specificfunds to reduce potential pay differences between women and men.These points are described more fully in section 2.1.6 on equaltreatment.
Involvement in the Group’s performance
10% of our Group's employees in France are entitled toperformance-related pay, under the terms of their contract, of anaverage annual contractual amount of 15,800 euros gross. This givesthem a vested interest in the success of the Group and its strategicplan. Sharing the Group’s financial performance targets fosterscohesion between teams and the pooling of efforts, and can onlystrengthen employees’ sense of being part of the Group.
Finally, as part of the CSR approach regarding salary policy,management in France has dematerialised part of the pay slips andlunch vouchers since 2014. The dematerialisation of lunch vouchersapplies to all employees, whereas the dematerialisation of pay slipshas been optional to date and up to the employee. Wishing to build onthis momentum and facilitated by the legislative framework, allemployees should receive dematerialised pay slips from the start of2018, unless employees have notified the Group otherwise. Pleasenote that said dematerialisation was accompanied by the provision ofelectronic safes in which employees can store large numbers ofdocuments securely. This is particularly reassuring in case of damageoccurring at an employee’s home.
This initiative was strengthened in 2015 with the dematerialisation ofprofit sharing option forms for volunteering employees. Thispioneering development will enable the Group to contribute moretowards sustainable development.
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INTERNATIONALLY
Spain
In Spain, the remuneration policy is equally comprehensive. An annualappraisal and grading campaign begins in September, when allemployees are assessed and graded for their investment in theCompany, their competencies and their potential by comparison withtheir peers. Depending on the manager’s assessment of theemployee’s overall performance, a promotion and pay increase maybe offered based on internal guidelines. The correlation betweenperformance and career progression and pay increases is handled withthe utmost transparency to ensure equal treatment. The career andsalary plan takes effect in March of the following year. This process iseven reinforced for young employees with less than two years’ lengthof service with an assessment every six months. Gfi InformatiqueSpain devoted 1.67% of its payroll to granting individual pay risesduring the 2017 financial year.
Our Efron subsidiary has a number of offices internationally. Efron'spay policy varies depending on the countries in which it operates(Colombia, Mexico and the United States).
In Colombia, 5.1% of its payroll was devoted to granting individual•pay rises in 2017. A study is being conducted to bring Colombia'spay policy in line with the one in France, in order to prepare a salarygrid based on experience, training and performance assessment.
Mexico's pay policy is also currently being improved. Based on the•customers' assessment of the employee's performance andemployee goals achieved during the period, the employee may beentitled to a pay rise. In 2017, 6% of Mexican employees obtainedan individual pay rise.
Lastly, Efron's pay policy for the US is essentially the same as in•Mexico, i.e. customers' assessment of the employee's performancein addition to the employee's contribution and potential. Anevaluation or grading process takes place every six months tovalidate the revised salary. Pay rises take effect in December ofeach year. The increase rate in 2017 ranged from 1% to 4% basedon performance.
Portugal
Portugal adopts the same process as Spain, except that it is initiated inthe first quarter of the year. With a budget of 2.3% of the payroll theGroup in Spain increased 30% of its workforce in 2017. In addition, thePortuguese subsidiary Roff devoted 4% of its payroll to individual payrises. In 2017, 50% of the employees were awarded a pay rise.
Morocco
The compensation process in Morocco is essentially the same as inFrance and Spain, with individual pay rises awarded based onemployee performance, assessed during appraisal interviews. As inFrance, increases tend to be timed to coincide with the anniversary ofemployees joining the Group and are spaced at minimum two-yearintervals for the best employees. Over 70% of employees received anindividual increase in 2017.
Belux
With respect to the pay policy in Belgium and Luxembourg, thesalaries for all Belgian employees were indexed in January 2017,resulting in a 1.1% increase in October 2017. In contrast, salaries forLuxembourg employees were not indexed in 2017. These collectiveincreases correspond to the health index, which corresponds toindexing salaries to the consumer price index. This mechanismmaintains the purchasing power of employees. In parallel, at thebeginning of each year managers examine whether each employee’ssalary is in line with that offered in the domestic market for anequivalent position. If an employee’s salary is found to be inconsistentwith this, then it is adjusted.
Poland
The wage increase policy is applied in Poland from November "N-1",with increases coming into force in April "N". For the financial year2017, the amount devoted to pay rises remained much the same as in2016.
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Working hours, tailored to the Group’s needs and 2.1.2.reflecting the views expressed by employees
Part-time hours
Around 5% of the Group’s workforce work part-time, with slightdifferences between countries (0% in Switzerland, Poland, IvoryCoast, Morocco and Portugal, 1.3% in Spain, 5% in France and 6% inBelux). Although part-time work appears to be more developed inBelux, this is relative to the subsidiary’s workforce. The rate ofpart-time employees must also be compared to full-time workinghours, because the differences in part-time employees are explainedby the significant variations in working hours between countries. TheCompany is committed to offering job security while seeking toencourage part-time work, where employees request this and theservice constraints can be overcome. The rate of part-time employeesis similar to the branch level (4.7%).
Striking a balance between work and personal life is essential toachieving employees’ full potential. Part-time work mainly concernswomen who wish to balance their working life and family life. Thechange to part-time working almost always occurs during theemployee’s employment contract and not for new hires. Any switch topart-time work involves a signature of a rider to the employmentcontract by the employee and Management stipulating the newworktime, its apportionment over the week and the term of thepart-time hours. Upon an employee’s request and subject tomanagement approval, a part-time arrangement can be renewed.
Remote working
In a bid to foster balance between work and personal life, a remoteworking agreement was signed in late 2011 by Gfi Informatique Groupin France. Employees can ask to work from home, although theCompany doctor may also recommend this. The agreement seeks tomaintain a link with employees through “part-time” remote working.under this arrangement, employees can work from home up to twodays a week. The Company provides the employee with a laptop andpays an allowance for Internet and home office costs.
From an operational point of view, employees who are pregnant canbe given priority for remote working from the third month ofpregnancy providing there is no incompatibility with the position heldand the resources needed to perform it.
Remote working has been introduced by all of the Group’s foreignsubsidiaries as a way of organising working time, provided that this iscompatible with the employee’s role and the manager approves thedecision. Although there is no collective agreement for this, acontractual document is signed between the employee and theemployer.
Seasonal working hours
Furthermore, in order to adapt to the local climate and way of life inSpain, the Group implements seasonal working hours during thesummer. By shortening the working day in July and August, thetheoretical working week during these two months is reduced from 40hours 30 minutes to 35 hours.
With an annual average of a 40 hour working week in Spain, thecountry is also in line with the average for the Group’s othersubsidiaries: 40 hours in Morocco, Portugal and Luxembourg; 40 hoursin Belgium but with twelve days of additional leave. France issomething of an exception, with a working week of 37 hours with 10days off.
Geographical mobility
In addition, in order to accommodate those employees who want tohave an international career, while meeting the needs of customers atthe same time, Gfi Informatique encourages geographical mobilitybetween the Group’s subsidiaries, allowing its employees to work on atemporary basis in a foreign country. More than a hundred of theGroup’s employees took advantage of this option in 2017.
Gfi Informatique has strengthened its procedures and communication,in particular its procedures involving employee security andexpatriation.
Absenteeism and sick leave
With an average rate of absenteeism of 3.2% in 2017 for the Group asa whole and 3.8% in France, the Group’s rate was slightly up on lastyear with 2.8% at Group level in 2016. By comparison, according tothe survey conducted by the consulting Group Ayming, published inearly September 2017, the absenteeism rate at French companies was4.6% in 2016 (i.e. 16.8 days of absence per year and per employee)peaking at 5.5% in the service sector. The rate of absenteeism in 2017in Belux was higher than any other country due to employees withlong illnesses.
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Ongoing intensive dialogue with trade unions2.1.3.
ORGANISATION OF SOCIAL DIALOGUE AND COLLECTIVE BARGAINING AGREEMENTS IN FRANCESocial dialogue is carried out at two levels:
the Gfi Informatique ESU which concerns more than 87% of the•workforce: the Joint Committee, comprised of unionrepresentatives and management representatives, with an averagemembership of twelve;
the legal entities outside the ESU where union representatives have•been appointed such as ITN Consultants, Gfi Informatique Telecomand Gfi Business Transformation.
Assessment of the negotiations
The Joint Committee, met around two themes at the ESU level:
Compensation, worktime, breakdown of added value: Although1.talks failed to reach an agreement, management introducedmeasures to promote employee mobility, in line with the measuresput in place last year. As a result, reimbursement ofaccommodation expenses will be pegged to Urssaf guidelines. Inaddition, a budget of 1.5% of payroll will be devoted to pay risesdecided in the Compensation Committee, and a dedicated andadditional budget of 250,000 euros will be devoted to employeeswho have not been awarded a pay rise for five years.
Gender parity and quality of life: Talks failed to reach an agreement2.but management adopted a gender parity action plan, with abudget of 300,000 euros devoted to reducing/eliminatingdifferences. A charter relating to the right to disconnect, echoingthe provisions of internal regulations and including trainingmeasures for managers and information for all employees wasadopted in place of an agreement. Lastly, 2017 was focused onconducting a disability impact assessment, with the aim ofimplementing measures to promote employment of individualswith disabilities through an agreement to be entered into withAGEFIPH starting in 2018 for a three-year period.
LABOUR RELATIONS IN THE FOREIGN SUBSIDIARIES
Spain
improvements to work schedules (more flexibility for office openingand closing times, more flexibility during lunchtimes and extendingthe summer calendar).
In Spain, management held talks with five trade unions (ELA, LAB,UGT, CCOO and CGT) on various issues during 2017, including but notlimited to: the definition of a compensatory remuneration system foremployees who cannot benefit from the summer timetable,
Currently, the Efron subsidiary in Colombia, Mexico and the UnitedStates has neither a Works Council nor trade unions.
Portugal
In Portugal, as in the Roff subsidiary, there are no Works Councils ortrade unions. Under local legislation, there are no special consultationprocedures. Nevertheless, management maintains a regular dialoguewith employees. Employees are informed of decisions by variousmeans: intranet posts, communication by managers and the HumanResources Department and staff newsletters.
Belgium
In Belux, despite the fact that professional elections were held in2016, no employees applied. In the absence of a Joint Committee,management continued to keep its employees abreast of vacancies bymeans of the Intranet and/or adverts in common areas. If nocomments or observations are received from employees within amonth, the new Company rules are considered approved. The nextprofessional elections in Belgium are planned for 2020.
Luxembourg
In Luxembourg, in the absence of trade unions, management againheld discussions in 2017 with a delegation composed of three staffrepresentatives elected by employees. The topics addressed includedthe organisation of the annual employee assessment campaign,absenteeism, the organisation chart and the car fleet policy etc.
Morocco
In Morocco, Gfi Informatique is not represented by a trade unionorganisation. The management organises monthly meetings with staffrepresentatives or even special meetings where the need arises or ifspecifically requested. The main topics discussed with employeerepresentatives in 2017 concerned improving the Group's insurancecontracts, the possibility of making suggestions about the Company'soverall organisation, improving health and safety internally as well asworking conditions.
Switzerland
Finally, with regards to Switzerland, the relatively low number of GfiInformatique employees in Switzerland precludes the formation ofstaff representative bodies.
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Employee health and safety, concrete actions2.1.4.
With a workplace accident frequency and severity rate of 1.53 and0.68 respectively across the Group in 2017, Gfi Informatique seemsless exposed to work-related accidents than other groups. In 2017, 41work accidents with stoppages were recorded in the Group including12 in France. These relatively low rates, and the absence of workplacefatalities, can be attributed primarily to the nature of the work, whichinvolves little exposure to physical hazards. Furthermore, nooccupational illness was recorded in 2016 and one was recordedwithin the Gfi Informatique Group in 2017.
ACTIONS IN FRANCE
Prevention and treatment of work-related stress
Mindful of its employees’ welfare, an agreement on improvingworking conditions was signed in 2010. Aside from its legalobligations, the Group is convinced of the need to implement a planto prevent and combat work-related stress and the sources of this toimprove employee welfare within the Group. In early 2012,management, together with the firm PSYA and the SteeringCommittee on Work-related Stress, conducted a survey among allemployees of the Gfi Informatique Group in France. The SteeringCommittee is composed of senior and middle management andmembers of the Health and Safety Committee. Based on this survey,to which 43% of employees responded, and following 88 individualinterviews aimed at drilling down into the initial results, the Groupnow has a picture of the business and its position in relation to theissue of work-related stress. The picture is somewhat reassuring: whilerisk factors have been identified and stress factors pinpointed, theGroup is on high average for the firms hitherto studied by PSYA(average of 1.85 for Gfi Informatique versus 1.91 in the PSYA panel,with a horizontal risk scale of 1 to 4, where 4 = major risk). The riskfactors identified, in common with most other companies in the ITsector, include: work environment, workload, work-life balance,recognition, manager support, role, decision-making power, careerprospects, peer support and participation in change. The results of theanalysis of work-related stress factors were posted on the Group’sintranet site.
At the end of this survey, management used the results to update theprevention plans in the unique documents. In addition, all the Group’sHuman Resources managers received training on understanding andregulating stress as well as on making management aware of thissubject. As part of an initiative focused on being attentive toemployees, for the past three years employees have been able todescribe their working conditions and the work environment theyexperience through questions sent to them every month. Situationsconsidered to be alarming are reviewed by human resources managersso as to prevent and mitigate any psychosocial risk.
leave. This provision goes beyond the contractual conditions, whichrestrict it to employees who work a fixed number of days per yearbecause it applies to all the employees in the Group.
In addition, for the past three years management has also informedeach employee about disconnecting from work tools outside normalworking time, between 8:30 pm and 7:30 am and during periods of
Awareness of road safety is raised by, amongst other things,management-led preventive measures. Communication campaigns(posters, leaflets, emails, etc.) were, in fact, directed at employees,just as with the last operation conducted in the Rhône-Alpes region, insupport of the road safety office.
Giving consideration to working conditions and stressful situations
In addition, due to the operating constraints of some of its customers,a certain number of employees work in shifts or at night. The purposeof night working and shift work is to provide continuous service to theclient with the aim of:
carrying out intervention work outside working hours and days to•enable the client companies to perform their activities withoutinterruptions;
avoiding interruptions to the applications used by the client and/or•made available to the client’s users, during working hours;
preventing risks of blocking our clients’ activity.•Employees who work nights or on shifts are mainly InfrastructureServices technicians in the Paris region and in the provinces.
For seven years, an analysis of the stress-related risk factors thatcould affect employees has been conducted in France. Of the six riskfactors listed, Gfi Informatique is primarily concerned with night workand shift work. Although Gfi Informatique in France does not have astress action plan, given the small number of employees affected,specific actions have been implemented with, for example, advicefrom consultants on best working practices, or a training session bythe occupational health doctor from Clichy on their premises on theright gestures and postures to adopt.
During 2013 and 2014, talks were held with the unions and anagreement signed with the Gfi Informatique Economic and Social Unitin France on atypical work, which mainly consists of night work, shiftwork, working on a Sunday/public holidays and on-call work. To reducethe stress linked to working at night, management has proposed, asidefrom financial compensation, to increase time off in lieu. Furthermore,in order to allow the proper recovery periods, management has statedthat this time off in lieu should be evenly distributed throughout thework cycle by reducing work schedules. For employees working aneight-hour shift, the cycle must be in the following order:morning/afternoon/night. under no circumstances may a night shift befollowed by a morning shift. Shifts should not start or end between thehours of 11 p.m. and 6 a.m. Among the other measures proposed bymanagement is a temporary guarantee to maintain the higher rate ofpay for employees switching from a regular night shift to a regular dayshift. This measure is restricted to cases where a night shift worker wasbeing taken off nights by the employer or had been declared medicallyunfit by the Company doctor.
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Since 2015, managers have completed a stressful working conditionsprevention sheet for any employee who is considered to be exposed toa stress factor, i.e. any work performed between midnight and 5 a.m.
Lastly, pregnant women are entitled to a paid reduction in workingtime of twenty minutes per day from the third month of pregnancyand thirty minutes per day from the fifth month of pregnancy.
A special focus on health
HEALTHCARE AND PERSONAL PROTECTION INSURANCE
Mindful of its employees’ health, the Group has offered all staff inFrance an attractive healthcare and personal protection insurance planfor several years with an employer’s contribution of more than 50%.100% of employees on open-ended contracts have been covered bythe healthcare and personal protection insurance plan for severalyears now. On the issue of bringing the health costs regime intoconformity with the "responsible" contract and maintaining a highlevel of cover while protecting the regime's financial balance,management and unions agreed to sign an agreement in 2016. Thisagreement also gives spouses the opportunity to access cost-effectivehealthcare cover.
Please note that employees’ salary is maintained during the first threedays of absence, so-called “qualifying” pay, subject to one year’sprevious employment.
BLOOD DONATION: ORGANISING TWO BLOOD DONATION DAYS
Each year since 2011, management has allowed employees at theSaint-Ouen site to give blood in association with the Bichat Hospital.Taxis pick blood donors up from the office and take them to thehospital, returning them to Saint-Ouen afterwards (escorted donationplan). Around twenty employees regularly give blood in this way. TheHR and Marketing departments are actively involved in the initiative,with the appointment of a blood donation officer and webmaster whodesigns and manages a dedicated intranet site. Both the blooddonation service and donors like the escorted donation plan: the blooddonation service has reported an increase in regular donations, whileemployees like having everything taken care of (including transport)and being motivated by colleagues.
Since 2015, the initiative has become widespread in France and theparticipation of a large number of sites has been a resounding success:more than 50 employee donors per participating site.
SPONSORSHIP WITH CHARITABLE ASSOCIATIONS
By signing a sponsorship agreement three years ago with the RedCross, Gfi Informatique is supporting actions for first aid,humanitarian aid, and action in the social and health spheres. Theactions respond both to emergency and extraordinary situations aswell as day-to-day help or awareness for actions in a familiarenvironment (in the home, on the roads, at work, etc.).
PROMOTING SPORT
participates in many sports competitions. Every October, a number ofemployees take part in the Paris 20 km running race, and 130employees, from all over France, took part in the race in October2017. The “running” Group on Yammer is one of the most active andreflects a sporting spirit amongst employees.
The practice of a physical activity is known to be a factor forwell-being and health. The Group actively encourages this and
ACTIONS BY FOREIGN SUBSIDIARIES
Spain
In Spain, Gfi Informatica SA runs health and safety campaigns to preventpotential occupational hazards and maintain a high level of health andsafety for all employees. In order to achieve this high level for allemployees, a risk assessment was conducted according to regulations inforce. Each year, plants are visited for the purpose of inspecting all theemergency equipment (extinguishers, defibrillators, etc.).
The Group in Spain has negotiated the cost of a mutual health fundwith two companies. Although the costs are borne by employees, theemployer negotiates a competitive plan offering the best cover. Thisyear, 15% of employees have chosen to be covered under the mutualinsurance plan.
Gfi Informatica SA is particularly interested in preventing work risksand runs theoretical and practical prevention training courses for itsemployees. This training is provided not only when hiring newemployees, but also when they have to relocate to different sites ortake on new responsibilities. 95% of the employees have receivedoccupational risk prevention training to date. The remaining 5%represent new hires and are currently receiving this training. Theemployees are also trained in first aid, evacuating sites, extinguishingfires and using semi-automated defibrillators.
For Efron subsidiaries in Colombia, Mexico and the United States, thefollowing measures have been taken:
En Colombia, an action plan is being developed to provide a mutual•insurance plan and personal protection insurance for employees.
In Mexico, an occupational risk prevention plan is being drafted to•comply with new laws which will soon come into effect in thecountry. In addition, the staff of Gfi Mexico has access to bothpublic healthcare through the Mexican Institute of Social Securityand private healthcare through private insurance which coversmedical costs. In this way, employees have access to improvedmedical assistance.
In the United States, the employer provides medical assistance to•all employees and pays 50% of their insurance. This year, 90% ofthe employees have health insurance.
Portugal
Gfi Portugal is covered by health insurance, including medicalcheckups and tests every two years. Gfi Portugal renegotiated itsinsurance contract to improve health coverage for all its employees.193 employees currently have a life insurance policy. Each employeewill be eligible to join an employer mutual insurance plan after sixmonths of seniority. 517 employees currently participate in this plan.
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Our Roff subsidiary has the same health policy as Gfi Portugal.Employees are eligible to join an employer mutual insurance plan fromthe date of hire. 790 employees currently participate in the mutualinsurance plan. All employees are covered by personal protectioninsurance.
Belgium
In Belgium, as well as compliance with the safety requirements laiddown by the 1996 law on workplace wellness, Gfi Informatique haspartnered with a specialised external service, IDEWE, on protectionand prevention in the workplace and organises medical checkups foremployees. This service advises Gfi Informatique on prevention andoffers solutions for workplace safety.
As part of the risk prevention plan prepared by the in-house adviser,new emergency signage has been installed in the building to facilitateevacuation in the event of fire.
At the same time, management is particularly focused on theprevention of alcohol and drug consumption in the workplace.Management adheres to a policy to promote the well-being of itsemployees. The responsible behaviour expected both of employeesand management is outlined in the Company regulations, which arestrictly enforced if necessary. Finally, Belgium offers all its employeesan insurance plan for hospital expenses as well as a personalprotection insurance plan.
Luxembourg
In Luxembourg, for each new hire, a medical checkup is scheduled toidentify any health problems in order to adapt the work area. ASteering Committee was set up to identify and monitor employeesdealing with absenteeism and illnesses.
Although employees in Luxembourg are not members of a collectivehealthcare plan, they do have a collective personal protectioninsurance plan.
Morocco
The Group in Morocco also offers all employees the opportunity tojoin an employer personal protection insurance plan as well as acollective mutual insurance plan. The mutual insurance policy wasrenegotiated for several years with the insurer to increase the leveland types of coverage. As a result, the average coverage in Morocco isaround 90%.
At the same time, a medical centre has been available for a number ofyears at one of the sites in Casablanca in order to look after the healthand safety of employees and increase the number of medicalexaminations carried out. The medical facility is run by two Companydoctors and is open four days a month.
Likewise, around twenty employees attended awareness-raisingsessions on health-related topics conducted by the Company doctors.As part of this responsible approach, an influenza vaccinationcampaign was conducted again this year.
Poland
IMPAQ employees and their families are entitled to join a personalprotection insurance and mutual insurance plan. In addition, accidentinsurance is available.
In line with our commitment to health, all new hires receive healthand safety training. This measure has reduced the total number ofwork accidents for the past two years.
An initiative to promote health was recently launched to encourageour employees to participate in sport. With this in mind, IMPAQco-organised a work-related sports activity "Biking to work". Eachkilometre covered enables an association to make money.
Development of human capital and skills, a lever 2.1.5.for success
Gfi Informatique has equipped itself with a policy and tools fordeveloping human capital and skills for the success of itstransformation in a competitive market context.
Responding to our clients’ demands not only necessitates identifyingand knowing the skills of its employees but also knowing how toimprove them in an innovative and constantly changing sector.
Gfi Informatique launched a forecasted job and skills management(GPEC) action six years ago to map its trades and associated skills andto achieve a forward-looking vision of the skills required within threeyears.
hours training hours per year per employee in France, representingover 113,915 hours of training in 2017. Approximately 34% ofemployees in France received training in 2017, with this rate reaching41% for the entire Gfi Informatique Group.
As a result of this reflection, apart from our policy of recruitment andmobility, investment in training is an essential area for development.Training therefore continues to be sustained with an average of 35
Gfi Informatique pays special attention to the quality of its trainingcourses and continually assesses the organisations with which wework as well as the level of satisfaction of the skills acquired by theemployees who attended a training course.
In terms of vocational training, the objectives of the business coincidewith employees’ personal goals:
staff want to progress and acquire specialist skills to keep pace with•market demand;
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the Group wants to provide all employees with tools that enable•them to enhance their skills and motivation.
The Group’s training strategy goes beyond the statutoryrequirements. The strategic aspects of training plans are defined eachyear based on market trends and the specific characteristics of eachactivity.
Training focuses on three main areas of expertise:
technical;•professional;•personal development.•
Training falls into one of six categories:
specific training to adapt to the customer’s environment;•training as part of a strategic workforce planning approach to•satisfy the medium-term business strategy;
Gfi Informatique University, which provides training for managers,•sales engineers, project managers and project leaders;
retraining programmes;•integration of young graduates with a tailored training plan and job•seekers through pre-employment training;
two e-learning platforms, one with access to close to 2,000 IT•courses designed by outside professionals and the other designed toset up training courses tailored to the Group's processes and needs.
In France, specific actions have been carried out on subjectsconsidered strategic for the Company, for example:
improving the skills of sales staff for the sale of complex solutions;•strengthening of expertise testing and Devops through•qualifications-based, personalised training;
training all new managers, sales representatives or project•managers/project directors on our internal process tools through anintegration course at Gfi University; in addition, in November 2016,an ambitious eighteen-month training programme was launched forour managers with one of the major business schools. In the light ofnew industry and Group challenges, this training will enablemanagers to arm themselves with the main educational toolsrequired in order to lead their teams through the Group’stransformation process.
Some training projects are conducted to maintain the employability ofemployees following customers’ organisational and technologicalchanges.
Gfi Informatique uses, amongst other mechanisms, the annualinterview and professional interview (two separate interviews) toassess its employees and establish their future career path. In additionother interviews assess the follow up, the employability andintegration of employees, in particular young and senior staff. Inresponse to contractual provisions, a special interview was set up in2015 for employees on a fixed number of days in order to considertheir work/life balance.
Human Resource Management System (Talentsoft) allows for anintegrated approach to different aspects of human resources,initialising the recruitment process, transferring and archiving annualinterviews, receiving training demands and following up on actionstaken, managing trade repositories and skills as well as compensation.
Lastly, the Group has also supplied managers with IT applications tocoordinate all these HR development projects. Gfi Informatique’s
TRAINING COURSES GIVEN BY FOREIGN SUBSIDIARIES
Portugal
As in France, the majority of the training courses in Portugal relate totechnical training (74%), followed by business and management(12%) and, finally, language training, mainly in French, (14%). Theemployees can also use the same e-learning platform as is used byFrance as the majority of courses are in English. The trainingorganisations used by Gfi Informatique Portugal are assessed in thesame way as in France. This "hot" assessment is carried out byemployees combined with a "cold" assessment to assess the training'seffectiveness.
For the Roff subsidiary, the annual training plan is based on the sametopics outlined above. Most of the training courses are technicaltraining courses (68%), followed by business and managementcourses (13%), and lastly, personal development courses (15%). Aspart of the SAP projects, Roff Portugal acquired an e-learning platform(Learning Hub) to provide employees with access to interactive SAPapprenticeship content. 210 employees have participated to date. Thegoal over the next three years is to provide access to all employees.
Spain
In the same spirit, employees in Spain can attend any type of coursebearing in mind that the majority of courses followed involvetechnical training courses (60% of courses), followed by languagecourses (34% of courses) for English and French. Every yearmanagement provides employees with a list of possible trainingcourses on a portal with their content and dates. At the same time,employees may also use the same e-learning platform as the onechosen in France for technical training. Employees and managers carryout several assessments of the training courses to measure theservices provided by the training organisations and to assess theireffectiveness when implemented.
The training policy of the Efron subsidiary in Spain is as follows:
A training policy has been put in place in Colombia for technical and•managerial courses over the past two years. In the same way as inSpain, a satisfaction questionnaire is sent to employees to assessboth the course content and the trainer.
In Mexico, 90% of the training involves technical courses with the•remaining 10% devoted to language courses for English. Theemployee assesses the training to evaluate the knowledge acquiredduring the course. A training catalogue is being prepared for 2018.
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In the United States, a new training strategy was launched to•provide all employees with the opportunity to develop their skillsand knowledge.
Belux
In Belgium and Luxembourg, training in 2017 was based on three keyareas: technical courses (software development, system management,business object, etc.) followed by business and management courses,and lastly personal development courses. E-learning is the uniquefeature shared by the training policy in these two countries: inaddition to the platform chosen in France which employees in Beluxcan use, a partnership has also been concluded with another publisheron the subject, on both software development and the essentialtraining for developing the skills of an IT consultant.
Morocco
employees combined with a “cold” assessment by managers to assessthe application of the skills acquired during a training course. As partof the ISO 27001 standard, a major training campaign on IT securityhas been organised by Gfi in an e-learning format.
Most of the training courses offered in Morocco are technical trainingcourses (60%), especially those connected to the publisher SAGE,followed by business or management training courses (20%) andlastly, personal development courses (20%), mainly related tolearning English. As in France a “hot” assessment is carried out by
Poland
In Poland, more than half of all training courses involve technicaltraining (JAVA, Oracle, ITIL, Angular, etc.) followed by business and/ormanagement training, and lastly personal development mainlyrelating to learning French due to Gfi Informatique Group's recentconsolidation of the Polish subsidiary.
At the end of the training course, a questionnaire is sent to employeesallowing them to evaluate both the course's content and trainer.
Ivory Coast
In Ivory Coast, all training courses involved technical training (JAVA,Oracle, ITIL, Angular, etc.). As in France a “hot” assessment is carriedout by employees combined with a “cold” assessment by managers toassess the application of the skills acquired during a training course.
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Equal treatment and respect for others, two major pillars 2.1.6.of the Group’s employment policy
AN ETHICS CHARTER, SYMBOL OF RESPONSIBILITY, INTEGRITY AND RESPECT FOR OTHERS
France
Although the basic principles, which guide the working behaviour of allemployees, are known and respected inside the Group, Management’spolicy is to formalise and reaffirm them, and it drafted an ethicscharter in 2014.
The Gfi Informatique Group’s ethics charter underlines the Group’srespect for the law, people and its responsibilities to its clients and itsother stakeholders. The Gfi Informatique Group’s ethics cover thethree basic principles of responsibility, integrity and respect for others.The importance of talking about social responsibility, health andsafety, quality, diversity, integration and harassment is underlined inthe respect for others section. In particular, the Group undertakes torespect and promote the basic rights protected by the UniversalHuman Rights Declaration, the dignity and value of human beings andgender equality. The charter underlines the respect for confidentialinformation and the protection of personnel data.
This charter was the subject of information and consultation with thestaff’s representative bodies.
Portugal
In Portugal, Gfi Portugal signed an Ethics Code in which the subsidiaryundertook to respect ethical principles and values: respect for humanrights, promotion of diversity, fight against discrimination. In itsgeneral terms and conditions of business, the subsidiary also requiresits suppliers to comply with ethical standards. In line with thisproactive approach, management has issued new employees with arecruitment guide setting out the principles of equality andnon-discrimination since 2013.
Morocco
Since 2008, the Gfi Informatique subsidiary in Morocco has beenawarded the CGEM (Moroccan General Business Consolidation) label,valid for three consecutive years each time. The subsidiary’saccreditation was renewed in December 2016. The high level ofcommitment of the Group’s teams in Morocco to the objectives ofCGEM’s social responsibility charter and the preparation of an actionplan justified the renewal of this accreditation.
Today, the Group in Morocco is part of a small and exclusive clubalongside more than fifty other Moroccan companies that havereceived this accreditation. under this charter, our Moroccan entitiescommit themselves to several points, especially in terms of theworkforce: respect for human rights, continuous improvement ofemployment and working conditions and labour relations, and thedevelopment of community engagement.
GENDER DIVERSITY, A CHALLENGEWith women making up almost 24% of its workforce, GfiInformatique has achieved a ratio that corresponds to the average ofother IT companies. The distribution of staff by gender and countrycan be found in the appendix.
2017 gender equality action plan in France
INSIDE THE GROUP’S FRENCH SUBSIDIARIES
Gender equality on the Board of Directors
The Copé-Zimmermann law of January 27, 2011 and the AFEP-MEDEFCode, which was revised in November 2016, provide that as of the endof the shareholders' General Meeting of 2017, (i) 40% of the membersof the Board of Directors of a listed Company must be women or (ii) ifthe Board has fewer than eight members, the difference between thegenders cannot exceed two (excluding the director representingemployees).
The Combined General Meeting of Gfi Informatique, held on May 22,2017, reappointed the director Carolle Foissaud and the observer GérardLonguet. In addition, the General Meeting appointed the followingobservers: Jean-Paul Lepeytre, Nicolas Roy and Patrick de Giovanni.
As a result, at December 31, 2017, the Board of Directors is composedof eight directors of whom three are female (excluding the directorrepresenting employees), in accordance with the provisions of theCopé-Zimmermann law, thus ensuring gender balance amongdirectors on the Board of Directors.
Gender equality
The 2017 action plan reflects the commitment of management topromote gender equality in areas such as recruitment, pay, careerprogression and even vocational training. To underline itscommitment to the principle of gender equality, management hasagreed in the action plan on targets for improvement in the differentareas and the implementation of actions to achieve these targets.
Hiring
The actions taken in line with the policy, defined by the division, topromote digital sector jobs in higher education institutions and forums,were prioritised. By way of example, the Gfi Informatique Group inFrance has already taken part in the second Young Women and Digitalforum. As a Gold sponsor, one of the members of the senior managementconducted a conference on the theme “Reshape your Briefs”, with AxelleLemaire, the Secretary of State for Digital, and other partners. Thepurpose of this forum, in which 1,483 women were enrolled, was topromote the digital trades to women and future employees and todevelop the entrepreneurial spirit among this female public.
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Management has also set itself the target of increasing, by 1%, thenumber of women hired as a percentage of women in the workforce.
Career progression and vocational training
Management wants all women who are team leaders or who are insenior management to take part in a management training coursebetween now and December 2020. In addition, it wants to step up itsefforts in terms of training for women by setting itself the target ofincreasing, by 2%, the number of women following training initiativesas a percentage of the women in the workforce.
Equal pay
Pay is based on the principles of fairness and objectivity. Pay increasesare based on performance and development potential, with no genderbias.
In the event of a pay gap, which is not justified by the level ofresponsibility, training, experience or professional expertise, thesituation is investigated. It was agreed that a budget of 300,000 euroswould be set aside in 2017, at Group level, to adjust wage disparities,as has been the case for the last three years. On that basis, in the lastfive years, almost 900 wage increases were awarded.
Every year, management has also offered to provide information on theuse of this budget to the Gender Equality Committee of the CentralWorks Council of the Gfi Informatique Economic and Social Unit.
Likewise, Gfi Informatique offers a guaranteed pay increase for staffreturning from maternity/adoption leave, which is higher than thestatutory minimum. In financial year 2017, 66 employees benefitedfrom this guaranteed pay increase.
Furthermore, Gfi Informatique pays staff on paternity leave additionalremuneration on top of the minimum social security benefits theyreceive, which can lead to employees with a minimum of two yearsservice receiving 100% remuneration in accordance with anestablished scale.
Childcare centres
A multi-Company childcare centre has been set up at the Saint-Ouensite. This allows Gfi Informatique to offer places for children ofemployees working at its registered office.
INSIDE THE GROUP’S FOREIGN SUBSIDIARIES
Spain
The Group in Spain is also focused on the issue of workplace equality,and broaches the subject in negotiations on equality with the tradeunions. The unions are particularly keen on the question of work/lifebalance.
Efron (Colombia, Mexico, United States) respects equal opportunityand encourages non-discrimination based on race, age, gender,ideology, nationality, religion or any other personal characteristic.
Portugal
A sign that gender equality is a force for the Company’s growth anddynamism, Senior Management in Portugal has almost perfect genderequality with five men and four women. Similarly to Spain, there is nodistinction between women and men, whether it be for compensation,promotion or treatment.
Belux
The Group’s employees in Belgium can file a complaint against acts ofviolence or sexual/mental harassment at work. This collectivemeasure is brought to the attention of all employees in the companyregulations applicable in Belgium. It should be noted that this measureis aimed at both men and women. under this system, aggrievedemployees can speak to an adviser and/or counsellor appointed by theemployer, who can offer advice, help and support. Valuablepsychological support can be obtained by being able to share aproblem – sometimes with mediation – in an environment wherediscretion is guaranteed. For example, one IT consultant whorequested counselling was re-assigned to a more suitable role withanother customer.
Gfi Belux approves the anti-discrimination law in force in the countrywhich strictly prohibits discrimination based on age, sexualorientation, marital status, religion, health issues, etc. A generalcampaign on inappropriate workplace behaviour was launched to raiseemployees' awareness.
Morocco
Finally, by signing the social responsibility charter drawn up by theMoroccan General Business Confederation (CGEM), the GfiInformatique Group in Morocco has made a commitment to preventingall forms of discrimination and to promoting equal opportunitiesbetween men and women and vulnerable groups, including disabledpersons. The CGEM's CSR label has just been renewed.
Poland
The Polish government is committed to complying with the genderequality laws in force.
THE INTEGRATION OF FOREIGN EMPLOYEESConscious of the positive contribution made by foreign employees, GfiInformatique in France has nearly 750 employees from around 70different nationalities in its workforce. Their culture and languagecontributes to the added value of the projects inside the Group.
In addition, Gfi Informatique in France is involved in the lastingintegration of certain employees by requesting a change of status atthe prefectures and competent employment offices. In certain tradeswhere there is a shortage in the business sector, Gfi Informatique inFrance will demand a change of status (students to employees) forseveral employees by paying the relevant costs in order to continuethe collaboration with these employees.
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GFI INFORMATIQUE AND ITS EMPLOYEES ARE MOBILISED ON THE SUBJECT OF DISABILITY
Ongoing initiatives in France, particularly since 2013
Since 2013, Gfi Informatique in France has encouraged diversity andhas developed its policy on disability.
Since 2010, the Gfi Informatique Group has had a disability officerwho liaises with employees and coordinates disability actions.
From 2013 to 2015, an employee awareness-raising campaign wascarried out in France. This campaign resulted in Gfi InformatiqueIntranet dedicating an area to disability. To raise employee awarenessof the issue and to ensure that staff are better informed, leaflets ondisability were circulated in June 2013 at major sites in France,accompanied by a poster campaign at those sites.
Employee awareness has also been raised with the launch of an onlinecomic strip on the subject. To answer employees’ questions ondisability and to streamline administrative procedures, a telephonesupport line and email address were set up, managed by externaladvisers to Gfi Informatique, from June 2013 to mid-June 2014.
A communications company specialising in disability approached theGroup to provide professional support and impetus for the project. Gfiaccompanies its action by helping disabled employees through theawarding of CESU disabled pay checks to employees who declarethemselves disabled.
Gfi's action on disability also consists in initiatives that promote thecontinued employment of employees with disabilities, by adaptingworkstations with the help of an occupational health physician,SAMETH, an organisation offering support services for disabledemployee retention and AGEFIPH, the French association for theintegration of disabled persons, so they remain in their jobs.
Gfi Informatique has also implemented a recruitment policy fordisabled persons. Job vacancies are advertised on disabilityemployment websites such as Monster Handicap and AGEFIPH. TheGfi Informatique Group attends events dedicated to the recruitmentof disabled persons. In addition, a partnership agreement was signedwith Tremplin in 2012 the aim of which is to put disabled students andtrainee apprentices in touch with Gfi Informatique. This initiative hasalso allowed Gfi Informatique to exchange best practices in this areawith partner companies.
As part of its partnership with Tremplin, Gfi is partner to the sixthedition of "Tous HanScène", a video competition about disabilities, thataims to motivate more disabled middle- and secondary-school studentsto pursue higher education, to incite higher learning institutions to opentheir doors and courses of study to disabled young people and to enablecompanies to recruit disabled university graduates.
Furthermore, partnerships have been developed with the non-profitorganisations CEDRE (paper recycling), INTERNETTO and COPIVER(digital printing) to establish a referral system within the Group. GfiInformatique continues to work with Esat or Adapted companies foroffice supplies, services, subcontracting and the provision of personnel.
Gfi Informatique is part of a digital disability collective composed ofaround 12 IT companies with the aim of fostering synergy in thissector by mainstreaming disability and exchanging best practices, andsetting up actions on the subject of disability. The common digitaldisability portal was set up in June 2014 in order to make training andjobs in the digital sector more understandable.
Lastly, Gfi Informatique launched a "Diagnostic Conseil Approfondi", athorough advisory assessment, with the aim of preparing for anagreement with AGEFIPH from 2018. This agreement will make itpossible to continue and expand the measures which have been takenover the past few years.
AWARENESS-RAISING CONTINUES IN FOREIGN SUBSIDIARIES
Spain
In Spain, Gfi Informatica SA acts in accordance with the LISMI Act of1982 (a law on the inclusion of disabled persons) and therefore adoptsalternative measures. The Group in Spain uses specialised centres,where more than 80% of the workforce is composed of employeeswith disabilities, to outsource certain tasks: purchase of officeequipment, office maintenance, etc. At the same time, Gfi InformaticaSA also works with specialised foundations to recruit more disabledemployees whose technical skills match those required for its projects.The management in Spain is keen to promote these measures and toshowcase its commitments and actions on the intranet site. Therehave been no problems or difficulties encountered to date withrespect to their involvement in projects and in the Company.
Belgium
In Belgium, although no binding disability agreement or plan has beensigned, the inclusion of disabled persons still takes place and workingconditions are adapted to accommodate the disability concerned.Remote working is also encouraged to reduce or even avoid businesstravel. In this case, the employer may contribute towards the costs ofadapting the workstation in the employee’s home (paying for thecomputer, internet and telephone line, etc.). Finally, the localgovernment employment office (VDAB) ensures that the employer isproactive on the subject and that it offers its employees theappropriate working conditions.
Morocco
Concerning Morocco, Gfi Informatique has retained the services of anassociation specialising in the integration of disabled persons, AMH, sothat it can hire more disabled persons. With around 25,000 members,AMH is a key player in Morocco for the inclusion and welfare ofdisabled persons. A disabled employee was recruited in 2015 with anadjustment of working conditions. The management in Morocco iskeen to promote these measures and to showcase its commitmentsand actions on the intranet site.
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Despite everything, the rate of disabled employees within our foreign subsidiaries (0.8% in Portugal, 0.5% in Belux, and 0% inworkforce does not reflect the efforts made: around 2.7% in Ivory Morocco, Switzerland, Colombia, United States, Mexico). The sameCoast, 1.3% in France, 1.2 % in Spain, 2.3% in Poland, 2.7% in Ivory problem is encountered at the branch level where there is an averageCoast and less than 1% inside the Gfi Informatique Group's other rate of French disabled new hires of around 1.4%.
Promotion of and compliance with the fundamental 2.1.7.conventions of the International Labour Organization
THE GROUP’S MEMBERSHIP OF THE GLOBAL COMPACTBy signing the Global Compact on July 22, 2015 the Gfi InformatiqueGroup confirms its strong attachment and above all its respect in thefollowing four key areas: human rights, international labour standards,environment, and the fight against corruption, as outlined insection 2.4.1.
The principles respected by the Gfi Informatique Group, in terms ofhuman rights and international labour standards, and confirmedwithin the scope of this initiative are above all:
promoting and respecting the protection of international law on•Human Rights;
ensuring that it does not aid and abet breaches of Human Rights;•respecting freedom of association and recognising the right to•collective bargaining;
helping to eliminate forced or obligatory labour;•helping to abolish child labour;•helping to eliminate all professional and employment•discrimination.
The associated actions carried out by the Group are explained in theparagraphs below.
CHANNELS FOR EMPLOYEE DISCUSSION AND COMMUNICATIONFor the past few years, employees have been encouraged toparticipate in collaborative platforms and social networks. In 2011,collaborative forums were set up to support the Business Units. Sincethen, several online communities have been created to encouragediscussion of professional topics.
In addition, an internal blog aimed at all Group employees waslaunched in 2012. A symbol of the Group’s modernity and dynamism,the blog is an invaluable tool for internal communication, allowing awide range of information to be exchanged. Employees are given theopportunity to express their views, add comments and demonstratetheir knowledge of the topics covered. The same principle wasdeveloped in Belgium via a platform where employees can askquestions, post messages and share information.
In addition, in September 2013, Gfi Informatique Group in Francelaunched a corporate social network called Yammer to turn individualknowledge into collective wisdom. This is a particularly innovativebusiness project because it offers employees a new communicationtool based on the use of Web 2.0 technologies. The inspiration for theproject came from a desire to foster better communication betweenemployees from different backgrounds (trade, production, supportfunctions, etc.) who share a common professional interest. Joinedtogether to form a “community”, employees can use Web 2.0technologies to get to know each other, exchange information moreeasily and take advantage of collective intelligence.
A groundbreaking initiative entitled “Chat with our Chairman” waslaunched in September 2016, giving all Group employees theopportunity to ask the Chairman questions during their lunch break.Over 1,800 employees took part in this first session, which lasted forone hour. The script was transcribed on our internal blog, enablingabsent employees to read the answers given by the Chairman on adiverse range of issues relating to Group organisation, humanresources, the quality of life at work, future projects etc.
Finally, the organisation of informal events, whether at theinternational level (seminars for managers and sales staff in January ofeach year), national level (winter barbecue in Belgium) or local level(kick-off) events also allows employees to broaden their knowledge.
FREEDOM OF ASSOCIATION AND THE RIGHT TO COLLECTIVE BARGAINING IS AT THE HEART OF THE COMPANY'S PROCESS
Elimination of employment and professional discrimination
Freedom of association is the right of every person to join others toexpress, promote, pursue and defend common interests. Freedom ofassociation is enshrined in many national constitutions and HumanRights declarations, such as the European Convention on HumanRights.
The Gfi Informatique Group in France and worldwide complies withnational laws and international conventions on freedom of associationin all countries where it operates. The means of communicationavailable to employees as well as the various organised events help toimplement this freedom of association.
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Collective bargaining between employers and employeerepresentatives covers various topics such as pay, working conditions,working hours and conflict resolution. The Group is in favour of this asa way of guiding and implementing its development strategy. In June2014, Gfi Informatique France also set up an Economic and socialdatabase (BDES) in the form of a SharePoint for five of its principalcompanies in the Group, which in 2015 was extended to the Group’sother companies. This base, which gives access to the Group’s mainsocial and financial documents, is intended to permit staffrepresentatives to be able to understand the Group’s strategy.
The right to organise, the freedom to join the trade union of one’schoice and the absence of discrimination against employees who areactive union members are also intangible principles within the Group.
In May 2011, the Gfi Informatique Group in France signed anagreement on the organisation of trade union rights and socialdialogue within the Gfi Informatique Economic and Social Unit. Thisagreement contains, inter alia, clauses on the communicationchannels of union branches, the operating subsidy for union branches,negotiations on agreements or even pay increases and theprofessional development of staff representatives.
Abolition of forced labour and the effective abolition of work by children
Given the nature of the industry, the absence of forced or compulsorylabour and non-use of child labour is self-evident.
The two parties make a deliberate choice to work together following aclear and established recruitment process. This is evidenced by signingan employment contract, a document that removes all suspicion, werethis to exist, of forced or compulsory labour in any of the Group’scompanies. The identity and skills of the future employee are checkedupstream: curriculum vitae, passport, driving licence etc. Theprocedure for foreign new hires is stricter with the presentation of andauthentication of the residence permit.
Finally, it should also be pointed out that the Gfi Informatique Groupdoes not employ children in France nor in any of its subsidiaries.
Commitment to the Paris Saint-Germain Foundation
Gfi Informatique extended its commitment with the ParisSaint-Germain Handball Club, by sponsoring the first ParisSaint-Germain Foundation Children’s Day at the Pierre de CoubertinStadium. Nearly 1,000 children aged between 8 and 12, includingsome from complicated social backgrounds who are unable to go onholiday, took part in this extraordinary event. Children of employeesand customers were also invited to attend this event. The objective forGfi Informatique and the Paris Saint-Germain Foundation was to offerthem a unique experience, making magnificent memories that theycould share with others. During the day they were able to take part ineducational and sporting workshops on sporting values and attended ashow with performances from sportspeople, freestylers and musicians.
Raising employee awareness of sustainable development2.1.8.
Since 2015, several initiatives have been conducted to raiseemployees’ awareness of sustainable development, as outlined insection 2.2.
In the same vein, Gfi Informatique Group France launched theSharecar programme in June 2015 enabling its employees to shareelectric and/or hybrid cars. Encouraging more environmental friendlytraveling has been the leitmotiv of this initiative at the registeredoffice and in our main regions.
In 2015, these initiatives were also warmly welcomed in France onsecondary sites or subsidiaries in the regions, such as IDVROM bySNCF intervening in Gfi Informatique’s premises in the Nantes regionto promote car sharing. In the southeast, Gfi Informatique’s teams inthe Lyon region took part in the Mobility challenge organised by theregion to make a maximum number of employees aware of alternativemeans of transport (bikes, public transport, car sharing, etc.).Employees were asked to travel to their place of work using a meansof transport causing limited or no pollution.
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ENVIRONMENTAL INFORMATION2.2.
General environmental policy2.2.1.
Group organisation in relation to dealing with environmental issues and environment-related assessment and certification
Since 2006, the Group has taken steps to educate staff onenvironmental issues and the impact of its activities on the localenvironment. The objective was to identify best practices within theGroup and to put forward some concrete actions that could be sharedwith colleagues and business partners. The coordination anddeployment of this approach are the responsibility of the departmentsin charge of Purchasing, Human Resources, Corporate Services orQuality of Service, depending on the country and site. Sometimesthey are overseen directly by General Management in the country inquestion.
In France, CSR initiatives and procedures applicable to all employeesare coordinated by the Quality Department as well as by the Group’sPurchasing Department. To find out how well it is doing, every yearsince 2010 the Group has assessed its CSR via EcoVadis, a specialist inrating CSR in line with Global Reporting Initiative, UN GlobalCompact and ISO 26000 methodology. This analysis is based on 21criteria across four themes: Environment, Employment, BusinessEthics and Responsible Purchases. In 2017, Gfi Informatique obtaineda GOLD award (compared to SILVER in 2016), and was ranked in thetop 5% of suppliers awarded the highest scores by EcoVadis.
Spain also monitors compliance with environmental standards veryclosely. In fact, the Quality Department, in conjunction with theCorporate Services Department, worked on a Programa anual demejora, aiming, in particular, at reducing waste, energy consumptionand even carbon production. These various initiatives have enabledSpain to make its mark in terms of controlling the environmentalimpact of its business, as well as by implementing environmentalprotection rules. On this basis, Spain had its ISO 14001 2015 versioncertification renewed in 2017 for three years for its buildings in Madridand Bilbao (certification obtained for the first time in 2011 under theStandard's 2004 version).
In Portugal, the initiatives and environmental procedures applicableto all employees are coordinated by both the Corporate ServicesDepartment and the IT Department, most of which involve recycling.
In Portugal, the subsidiary adopts Associação Nacional para o Registode Equipamentos Eléctricos e Electrónicos (ANREEE) standards forselling electronic equipment and complies with environmentalspecifications. In 2017, the subsidiary renewed its registration in thenational register of electrical and electronic equipment manufacturers.
In Morocco, initiatives to reduce the environmental impact of theGroup’s business are organised by the Human Resources Department.In Morocco, Gfi Informatique received, for the first time in 2008, thenin 2012, CSR accreditation awarded by the Moroccan General BusinessConfederation to companies that adopt a sustainable developmentstrategy. This accreditation represents the Group’s solemncommitment to promote the universal principles of SocialResponsibility and Sustainable Development in its business activities,its labour relations and, more generally speaking, in its contribution tovalue creation. In December 2016, Gfi Morocco had its CGEM Labelrenewed for the second time for another four years. This renewaldemonstrates the Group’s ongoing engagement in CSR-related areasas well as its commitment to a corporate culture that brings togetherall its employees and stakeholders around responsible values andbehaviours.
In Belgium and Luxembourg, issues relating to environmentalprotection are monitored directly by General Management, which isworking on initiatives relating to waste management and reducingenergy consumption.
Starting in November 2017, Ivory Coast's initiatives relating toenvironmental protection have been coordinated by the HumanResources Department, which is implementing measures which will beapplicable from 2018.
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Environmental protection training and information initiatives for employees
In France, so as to raise the profile of its CSR initiative amongst itsemployees and customers, Gfi Informatique rolled out a CSR headingon its intranet, containing all the Group’s CSR documentation (inparticular, the letter of adhesion to the Global Pact of the UnitedNations, Group certifications, the ethics charter, the ResponsiblePurchases Charter and questionnaires in French and English) therebymaking it easier to respond to calls to tender and enabling the Groupto be more transparent. Specific training on these issues is carried outby the Group’s Quality Department.
ISO 14001 certification in Spain was accompanied by various trainingand communication initiatives for employees on the theme of theenvironment. The Quality Department and the Corporate ServicesDepartment are working to raise employees’ awareness of riskysituations and what to do in the event of an incident with anenvironmental impact. Employees also have direct access to all thedocumentation on the website. In 2017, environmentalawareness-raising campaigns were launched on all of the Group'spremises in Spain.
At the Roff subsidiary in Portugal, magnetic boards have been set upin the cafeterias and eating areas to teach employees how to protectthe environment, especially by providing advice to promote recyclingand saving water.
In Spain and Portugal, special attention has been paid to celebratingWorld Environment Day in June 2017, where the slogan "BringingPeople Closer to Nature" helped to raise the employees' awareness.
Lastly, poster campaigns were carried out in most of the Group’ssubsidiaries to raise employees’ awareness of paper and water use orrecycling or to encourage them to prioritise the use of public transportrather than using their cars.
The resources devoted to preventing environmental risks and pollution
Since there is no direct risk of the Group’s business causing anenvironmental incident, no corresponding provision was recorded inthe Group’s consolidated financial statements for the financial yearended on December 31, 2017. Some resources were, however,deployed by the Group to prevent the production of waste and toenable energy consumption and the emission of greenhouse gases tobe reduced, as set out in the sections below.
Pollution2.2.2.
Preventive measures to reduce emissions released into the air, water and soil that are seriously harmful to the environment
The IT and intellectual services provided by the Group have a limitedimpact on the environment and do not directly cause emissions to bereleased into the air, water or soil.
generated by the business (see section 2.2.4), to use resources in asustainable manner (see section 2.2.3.2) and to reduce wasteproduction (see section 2.2.3.1).
Every country in which the Group operates is working to put in placeprocedures to reduce significant levels of greenhouse gas emissions
Consideration of noise and other forms of pollution
The Group’s business does not generate any noise or olfactorypollution.
Circular economy2.2.3.
WASTE PREVENTION AND 2.2.3.1MANAGEMENT
Measures for the prevention, recycling, re-use and other forms of recovery of waste as well as for its disposal
With regard to Gfi Informatique’s business, management of paper andwaste electrical and electronic equipment (WEEE) is one of the mainchallenges in environmental terms. The Group has therefore put inplace measures for the prevention, sorting, recycling and disposal ofwaste as well as procedures specifying how materials and componentsare to be recovered for recycling.
In France, an approved supplier for the recovery and processing ofWEEE (Waste Electrical and Electronic Equipment) from obsoletescrapped IT equipment was selected: 2.4 tonnes of materials werecollected in this way on the Saint-Ouen site in 2017. The scope of thiscollection was extended to include all the sites in the Paris region, atotal of 2.809 tonnes of materials were thus collected in 2017(compared to 2.078 tonnes in 2016). In addition, the Nantes sitecentralises management of all WEEE in the Western region of France.This site is also a member of the waste commission for an associationof all the companies in the city and works with institutionals toprovide recycling solutions for different types of waste and thenapplies them to the Gfi Informatique site in Nantes. In addition, one ofGfi Informatique's activities involves the manufacture of electronicequipment, consequently it is a member of the French eco-organismESR which is responsible for collecting and processing scrappedprofessional electrical and electronic equipment. As a result, in 2017this organism collected 2 tonnes of Gfi Informatique's equipment(compared to 2.2 tonnes in 2016), mostly involving badge readers.
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In Spain, the Group also signed a sub-contract with an approvedwaste management company to facilitate the collection and recyclingof WEEE. As a result, WEEE collected was estimated at 380 kg in 2017at the Madrid site (vs. 400 kg in 2016), with no WEEE collected forrecycling at the Bilbao site in 2017 (vs. 150 kg in 2016). However,obsolete equipment was donated to employees, including 53 obsoletecomputers (vs. 41 in 2016) to personnel on the Bilbao, Barcelona,Alicante and Madrid sites. In addition, an annual environmentalimprovement programme was implemented, including raising theemployees' awareness of source-separated waste.
In Portugal, a similar approach was taken for management ofelectronic waste. Where equipment cannot be donated, it is recycled.To this end, the Group in Portugal is working in partnership with theAmb 3e Associaçao Portuguesa de Gestao de Residuos recyclingcompany to collect WEEE. Nevertheless, the Group had no equipmentto recycle in 2017. Lastly, an agreement was signed direct with theprinter supplier, tasking said supplier with the systematic collectionand recycling of used toners. At the Roff subsidiary, all WEEE isgrouped in a dedicated area with collection and recycling periodicallyhandled by an outside service provider.
In Belgium and Luxembourg, WEEE is also collected by a specialistfirm for recycling.
In Morocco, waste computer and computer consumables managementwas set up in partnership with associations in order to recycle thiswaste. In 2017, 625 kg of WEEE was collected (vs. 500 kg in 2016).
Initiatives to reduce food waste
In view of the nature of Gfi Informatique Group’s business, thisindicator was not subject to any particular monitoring and wasdeemed to be irrelevant.
SUSTAINABLE USE OF RESOURCES2.2.3.2
Water consumption and supply dependant on local constraints
Since Gfi Informatique’s business does not involve water consumptionoutside normal building use, the Group does not particularly monitorconsumption. However, setting up offices in buildings built to highenvironmental quality specifications helps to reduce waterconsumption.
To this end, since the Saint-Ouen building is HQE (High EnvironmentalQuality) certified, it is fitted with a rainwater collection system.
Likewise, in 2012, the Golf Park building in Toulouse was awarded theVery High Energy Performance (THPE) Label, and has water-savingequipment that makes savings of 44% compared with conventionalbuildings.
In addition, some excellent initiatives can be noted at certain Groupsites:
In Morocco for example, posters were put up in local premises to raiseemployees’ awareness of water use. In addition, wastewater wasrecovered in accordance with Moroccan environmental protectionstandards.
In Poland, the Warsaw site relocated in May 2017 to a building withBREEAM (Building Research Establishment Environmental AssessmentMethodology) Excellent certification, ensuring much lower waterconsumption than in a standard office building.
At the Roff subsidiary in Portugal, awareness training for employeesregarding water conservation is carried out using magnetic boards setup in the cafeterias and eating areas.
In Ivory Coast, Gfi Informatique will launch a poster campaignstarting in 2018 to enhance employee awareness of environmentalprotection, especially water consumption.
Consumption of raw materials and measures taken to make their use more effective
Direct consumption of raw materials by the Group’s business isextremely limited. It is not, therefore, appropriate to include rawmaterials monitoring in the Group’s environmental policy.
The Group is, however, vigilant when it comes to the consumption ofpaper by each of its subsidiaries and awareness-raising initiatives areconducted to reduce the amount of printing.
In France, for example, this involved a poster campaign to limit theamount of printing, a recommendation in every email to print onlywhatever is strictly necessary, duplex printing as the default settingand, wherever possible, the use of recycled paper.
Thus:
in 2011, waster paper bins were installed at the Saint-Ouen site•with selective sorting at source and this was subsequently extendedto all sites in the Paris area in 2012. As a result, a total of 9.3 tonnesof paper were collected in 2017, compared to 9 tonnes in 2016;
the collection was extended to the Lille, Lyon, Nantes and Toulouse•sites.
In late 2016, Cèdre also installed paper recycling boxes in offices atthe Saint-Ouen and Mozart (Clichy) sites, as well as selective wastesorting bins on every floor, thereby enabling plastic cups, cans, bottlesand paper to be separated.
As part of its CSR strategy and to reduce paper consumption, GfiInformatique’s Management in France in April 2014 introduced thedematerialisation of pay slips and luncheon vouchers, as outlined insection 2.1.1 “Involvement in the Group’s performance”.
In Spain, a Programa anual de mejora was introduced, as outlinedabove, which aims:
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to define, on an annual basis, areas for improvement focusing, in(i) particular, on adopting a responsible printing policy, optimisingenergy consumption and reducing greenhouse gas emissions,identifying new sources in order to reduce waste and rationalisingthe use of means of transport, and
to specify which departments are responsible for monitoring the(ii)measures put in place.
For example, in 2017 as part of this programme, employee awarenesscampaigns were introduced by the Quality Department about errorscommitted during waste recycling. In 2017, the Madrid site collected2.58 tonnes of paper (vs. 2.29 tonnes in 2016).
In Portugal, paper recycling bins were installed in a room specificallydesignated for this purpose. Likewise, staff have personal printingcodes to reduce paper waste and avoid printing blank pages. Inaddition, at the Roff subsidiary, all internal documentation must be indigital form. This initiative is also recommended for both projects andcustomer relations.
In Morocco, a poster campaign was also launched to raise employees’awareness of the need to reduce the amount of printing and, in 2017,910 kg of paper was collected (vs. 960 kg in 2016).
In Poland, 0.34 tonnes of paper was collected at the Warsaw site in2017 (vs. 1.3 tonnes in 2016). This sharp reduction in paperconsumption is due to a number of reasons:
the relocation of offices to a BREEAM-certified building in May•2017, where employees instinctively reduced both paper usage andorders before and during the relocation;
employees' lower demand for printing as developers prefer•displaying content on several large wide-screen monitors, thussignificantly reducing the need to transfer and present the contenton paper;
more and more documents exist only in electronic form;•the growing level of the employees' environmental awareness.•
In Ivory Coast, Gfi Informatique has introduced a paper quota peremployee to raise awareness of dematerialisation. Like the Group, useof the Cloud is strongly recommended for sending and storingdocuments rather than using paper.
Energy consumption, measures taken by the Group to improve energy efficiency
The IT services provided only consume a moderate amount ofelectricity.
Gfi Informatique has no data for energy consumption Group-wide, orfor its renewable energy use. The Group does, however, wish toextend its electricity consumption and resulting CO2 emissionsmonitoring, and in section 2.6.2 “Environmental indicators” presentsall consumption data available to date.
In France, the grouping of all the sites in the Paris region at theSaint-Ouen site in 2010 was an opportunity for the Company tointroduce an energy consumption reduction policy. The building hasHQE (High Environmental Quality) certification and has manyfeatures designed to reduce energy consumption.
Since then, each new site relocation has been an opportunity topromote the use of energy-efficient buildings (Building ManagementSystem) for heating, air-conditioning and ventilation on the sites inLyon and Toulouse (which is also Very High-Energetic performancecertified) and if possible HQE certified (like the Toulouse site).
In addition, in accordance with directive 2012/27/EU of October 25,2012 on energy efficiency, Gfi Informatique hired a specialist firm(accredited by the Laboratoire National de Métrologie et d’Essais (LNE)to conduct an energy audit on certain buildings (Saint-Ouen and Paris8e), to find ways of saving energy and introduce initiatives to reduceenergy consumption. Said company compiled a set ofrecommendations for all the sites in question so as to define prioritiesfor improving energy consumption at business management level.
The audit identified certain areas for improvement at the Saint-Ouensite, such as optimising fan coils, replacing neon lights and halogen bulbswith led lighting and installing motion detectors in meeting rooms.
In 2017, electricity consumption at the Saint-Ouen site was 219,307kWh (compared to 291,107 kWh in 2016), which represents a carbonfootprint of 5,573 tonnes of CO2 (1) equivalent (compared to 6,322tonnes of CO2 equivalent in 2016). In addition, electricityconsumption on all the sites in France totalled 5,696,203 kWh(compared to 5,104,483 kWh in 2016), which represents a carbonfootprint of 467 tonnes of CO2 equivalent (compared to 418 tonnesof CO2 equivalent in 2016).
In Portugal, in accordance with this same directive, the ROFFsubsidiary also hired a specialist firm to conduct an energy audit onfleet vehicles and to identify priority measures to reduce energyconsumption. The firm compiled a set of recommendations to definepriorities for improving the energy consumption of fleet vehicles.Although certifications must be renewed every four years inaccordance with the European directive, the Roff subsidiary decided tocarry out this verification every two years. In addition, buildings inLisbon and Porto have been issued energy certification from ADENE.
What's more, Gfi Informatique's room temperature is monitored withautomated switch-offs to limit the use of air conditioning. Likewise,office lights switch off automatically at 8:00 p.m. to avoid anyunnecessary consumption. Awareness-raising actions are also carriedout among employees.
In Spain, the building housing the Madrid offices has LEED (Leadershipin Energy and Environmental Design) Gold certification which isawarded to high environmental quality buildings.
In 2016, audits were also conducted in Spain on the Madrid and Bilbaosites by approved companies, in accordance with Royal Decree56/2016, transposing the European directive on energy efficiency.These audits confirmed that management of energy consumption inSpain is particularly effective. In addition, starting in 2016, electricityconsumption monitoring was extended to the Madrid and Bilbao sitesas well as to sites in the Basque Country, Catalonia, Alicante, Sevilleand the Canaries. In 2017, other sites were added, with totalelectricity consumption amounting to 1,408,780 kWh (compared to977,060 kWh in 2016). This increase in electricity consumption ismainly due to the inclusion of new sites and the increased floor areaof Gfi Information's premises in Madrid and Alicante. In 2017, the newsites also benefited from a change in lighting in order to reduce energyconsumption.
Amount calculated over 11 months between January and November.(1)
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In Poland, electricity consumption was monitored at the Warsaw siteand is due to be extended to all sites in years to come. As a result, in2017 electricity consumption on the Warsaw site totalled 84,000kWh (down from 244,715 kWh in 2016). This significant drop inenergy consumption is due to the site's relocation to a building withBREEAM Excellent certification in May 2017, ensuring much lowerenergy consumption than in a standard office building.
In Belgium, some rules have been enforced to reduce energyconsumption such as, for example, switching the heating off outsideoffice opening hours.
In Ivory Coast, energy-saving light bulbs were used which not onlylast longer but also reduce energy consumption. In addition, airconditioning is centrally controlled and switches off automaticallyduring non-office hours.
In Morocco, Gfi Informatique also favours the use of energy-savinglight bulbs to reduce energy consumption. In addition, air conditioningunits are grouped and managed by the fleet manager.
Climate change2.2.4.
SIGNIFICANT INSTANCES OF GREENHOUSE GAS EMISSIONS GENERATED BY THE BUSINESSThe Group does not believe it is directly exposed to the consequencesof climate change in the short or medium term.
The Group’s General Management has, however, sought to raiseawareness among all staff on this topic for several years. Theproliferation of regional branches both in France and abroad, inaddition to the social aspects already mentioned, contributes tobetter management of resources, particularly through the customerproximity it creates and the attendant reduction in business travel.
In 2008, Gfi Informatique employed a specialist firm in France tomeasure its carbon footprint. This carbon footprint measurementcovered all data relating to business travel, energy consumption ofbuildings and data centres, and the impact of equipment andconsumables. It was carried out on the basis of 2008 data. The carbonfootprint came to 10,700 tonnes of CO2 equivalent. Business travelaccounted for the largest share, with 7,500 tonnes of carbonequivalent.
Following this study, measures were then implemented to limit travel,including:
a systematic approach towards minimising travel, mainly through•video-conferencing and the use of web conferencing tools;
instructions for all site managers to take every measure possible to•reduce energy consumption through the introduction of lightingmanagement plans and temperature control systems for offices;
the opening of negotiations to introduce remote working, as•previously outlined in section 2.1.2 “Working hours, tailored to theGroup’s needs and reflecting the views expressed by employees”.
The car fleet is also a cause for concern, in particular, because a carpolicy has existed since January 1, 2017 requiring models withmaximum CO2 emissions of 110 g CO2/km. The average CO2emission for the fleet of vehicles was 101.96 g per km on December31, 2017, a slight reduction compared the December 31, 2016 figure of104.34 g per km. Actions were also taken to develop the use of hybridvehicles (petrol electricity or diesel electricity) inside the fleet wherethe number now stands at 31 (up from 24 in 2016).
A car sharing system called “SHAREcar by Gfi” was also deployed inJune 2015. It involves a car sharing solution using electric and/orhybrid vehicles throughout France. This programme enablesemployees to borrow electric and/or hybrid cars for professionaljourneys without cost during working hours and for personal journeysat weekends (Friday 6:00 p.m. to Monday 9:00 a.m.).
In the Paris region, the Group installed two electrical charge points inthe car park on the Saint-Ouen site followed by an electricalcar-sharing programme on the same site. This car model is suitable fortravelling in the Paris region (short distances).
Hybrid vehicles are favoured outside the Paris region (longerdistances). Hybrid cars are powered by using two separate energysources, fuel and electricity, which enables them to consume less fuel,to release less CO2 and greenhouse gases and therefore fewerpolluting substances than traditional vehicles.
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The Group has deployed several of these cars throughout France todate:
Site Number of cars available
Aix en provence 1 hybrid Company vehicle
Orthez 1 hybrid Company vehicle
Orléans 1 hybrid vehicle under the SHAREcar scheme
Bordeaux 1 hybrid vehicle under the SHAREcar scheme
Saint-Ouen
2 electric vehicles under the SHAREcar scheme +11 Company vehicles +1 hybrid Company vehicle
Lille1 hybrid vehicle under the SHAREcar scheme +2 Company vehicles
Lyon2 hybrid vehicles under the SHAREcar scheme +1 Company vehicle
Nîmes 1 hybrid Company vehicle
Nantes2 hybrid vehicles under the SHAREcar scheme +1 Company vehicle
Toulouse2 hybrid vehicles under the SHAREcar scheme +3 maintenance vehicles
Two hybrid vehicles under the SHAREcar scheme were added outsidethe Paris region in 2017.
The Group sought to centralise the ordering and distribution of“vignettes” permitting vehicles to enter municipalities with trafficrestriction policies in the event of pollution peaks (to date, particularlyin Paris and Lyon). Since the car fleet is made up of recent,low-emission vehicles (diesel or petrol), the majority of these vehicleswill not be banned from entry unless there is a major peak in pollution.
These recommendations have been shared with the variousinternational subsidiaries, particularly regarding the use of webconferencing tools.
In Portugal, for business travel between the Porto and Lisbon sites,employees are encouraged to use car-sharing solutions. In addition,bicycles are available to all employees for short journeys during theirlunch break or for personal one-day use.
In Spain, a carbon footprint analysis was carried out on the Madridsite (buildings only), showing that consumption was down in 2017,with electricity-related CO2 emissions at 266,711 kWh, representing67 tonnes (compared to 77 tonnes in 2016). This reduction in theamount of CO2 is the result of lower kWh consumption due toconverting lighting to LED, thus reducing electricity consumption byaround 16%.
In addition, in 2017, one of the parking areas is equipped with 13charging stations for electric vehicles whose management and use arecoordinated by the head of the business park. In addition, the carsharing system has been expanded and a subsidy has been granted toemployees using this type of transportation.
In Poland, the Bike2work Program aims to encourage all employees tocome to work on a bike instead of using their vehicles.
In Belgium, each replacement vehicle is preceded by a study of itsCO2 emissions. Vehicles emitting more than 139 g of CO2/km are notpermitted under the car policy. In addition, the Group in Belgiumfavours the use of hybrid or electric cars and has installed an electriccharging station enabling cars to be recharged.
In Morocco, shuttle services were set up between subsidiaries'premises and train stations, as well as the large surrounding cities inorder to encourage employees to leave their vehicles at home.
In Ivory Coast, in light of the country's economic and social context,measuring the consumption of fleet vehicles has not been possible.
Biodiversity protection2.2.5.
The IT services provided have no direct impact on biodiversity.
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Global compact – Environment principle2.2.6.
As previously outlined in section 2.1.7 "Promotion of and compliancewith the fundamental conventions of the International LabourOrganization" in this report, by signing the Global Compact andrenewing its commitment in July 2017, the Gfi Informatique Groupconfirms its strong attachment and above all its respect in the fourfollowing major areas: human rights, international labour standards,environment and the fight against corruption.
The principles respected by the Gfi Group for the environment andconfirmed within the scope of this initiative are:
promote greater environmental responsibility;•apply the precautionary approach to problems affecting the•environment;
encourage the development and dissemination of technologies•respectful of the environment.
The associated actions carried out by the Group are explained in theparagraphs below.
GREAT ENVIRONMENTAL RESPONSIBILITYSince 2006, the Group has taken steps to educate staff onenvironmental issues and the impact of its activities on the localenvironment. The objective was to identify best practices within theGroup and to put forward some concrete actions that could be sharedwith colleagues and business partners. The coordination anddeployment of this approach are the responsibility of the departmentsin charge of purchasing, logistics and quality of service. These aremonitored by General Management.
The nature of the IT services provided by the Group does not pose anydirect environmental threat. A review has been carried out on theeconomics of sustainable development and specific actions have beentaken or are in progress. They are detailed in section 2.2.Environmental information.
SETTING UP ENVIRONMENTALLY-FRIENDLY TECHNOLOGIESActively involved in smart mobility, digital urban planning (digitalterritorial models), Analytics and Big Data serving cities and improvingthe management of services provided by local authorities, GfiInformatique has presented several solutions dedicated to the SmartCity, notably the urban data management platform Intelligent UrbanExchange (IUX), Superhub and Public CRM.
In November 2017, Gfi Informatique Group in partnership with TataConsultancy Services, also participated in the Forum Smart City ofGreater Paris. This noteworthy event, organised by the newspaper LaTribune, was marked by several key moments for Gfi Informatique:
presentation of the Medium-sized Smart City Award to the cities•of Béthune and Mulhouse by Vincent Rouaix, Chairman and GeneralManager of Gfi Informatique;
participation in a round table discussion on artificial intelligence•and data serving more liveable cities;
an advertorial in La Tribune (issue dated November 23, 2017),•interviews and a VIP luncheon in the presence of Anne Hidalgo andSmart City's decision-makers and key players.
This action enables Gfi Informatique to satisfy all the expectations ofcities, citizens, local representatives and economic players by offeringinnovative solutions to serve operational effectiveness and providesatisfaction for citizens.
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INFORMATION ON SOCIAL 2.3.COMMITMENTS TO PROMOTE SUSTAINABLE DEVELOPMENT
Geographical, economic and social impact of the 2.3.1.Company’s business
As mentioned earlier, the Group has set up numerous regionalbranches (around 40 in France and the same number internationally).This long-standing preference to be based near customers enablesfuture employees to be hired locally and reduces travel to projectsites. This allows project teams to work in a familiar economic andsocial environment and helps avoid misunderstandings and conflictswith customers.
The contribution made by Gfi Informatique to local development andbetter management of resources is the key to its strategy, as outlined insection 2.1.1 “Gfi Informatique employees, the Group’s greatest asset”.
In France, Gfi Informatique has undertaken a number of initiatives interms of the territorial, economic and social impact, including:
enables the Group to get involved in practical initiatives onemployment, training, business creation, links with the localeconomic fabric, disability and the lives of employees and thuscreate synergies between economic players and the local region;
in November 2016, Gfi Informatique signed the enterprise-territory•charter. Introduced by Plaine Commune and the Plaine CommunePromotion Association, the aim of the enterprise-territory charter isto promote local employment and subcontracting by implementingspecific initiatives and specially adapted tools. This partnership
in France, like Spain, the companies providing waste recycling are•non-profit companies employing a large number of disabled persons.
In Poland, Gfi Informatique promotes the recruitment of disabledpersons thus ensuring their social and professional inclusion.
In Portugal, in view of the dynamic and innovative digital sector, GfiInformatique has seen a sharp increase in the number of employeesand interns. As a result, Gfi Informatique has contributed to thecreation of new jobs, by focusing on IT professionals, recent graduatesand professionals in other areas who have attended an IT skillsdevelopment programme. It should be noted that Gfi Informatique inPortugal is responsible for developing projects having a positiveimpact on the everyday life of citizens.
Stakeholder relations2.3.2.
The constraints of local recruitment and specific expertise limitopportunities for cooperation with job placement associations,teaching establishments and other local bodies.
However, Gfi Informatique is involved in several partnerships andsponsorships, as described below.
Work-study programmes and workplace learning are regarded as anundisputed source of new talent, which can then join Gfi Informatiqueon a permanent contract. In 2017, more than 300 young people werehired on work-study contracts (compared to 210 in 2016) and morethan 170 young people on internships (compared to 110 in 2016)across the Group.
Also worthy of note:
participation in and support for the creation of a child care centre•run by Babilou. This childcare centre is mixed: multi-enterprise andopen to the population of Saint-Ouen;
blood donation campaigns. Each year, two blood drives are•organised in association with Bichat Hospital. The donor employeesare taken to Bichat and then back to Saint-Ouen (principal of theescorted donation). An EFS (French blood donation service) contacthas been appointed and a website dedicated to the operation wasset up on the Intranet;
sponsorship with charitable associations such as, for example, the•Sponsorship agreement signed, in 2015, with the Red Cross;
in January 2017, the signing of a sponsorship agreement with the•association Pianomasterclub, accompanied by a piano project at GfiInformatique, which welcomed a first piano in the lobby of corporateheadquarters, followed by other pianos at the main regionalagencies. These pianos are accessible to all employees and can befound in either the lobby or break room, depending on the layout ofthe premises. They are expected to provide many opportunities tointeract, share and spend time together. The Gfi Informatique Groupalso intends to ensure a healthy work-life balance and thedevelopment of employees' talents through music. At the same time,Gfi Informatique has become a sponsor for Piano Masterclasseswhere the most promising pianists from conservatories receiveweekend-long training led by a maestro and financed by the Group;
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partner in 2017 to the 6th edition of "Tous HanScene" in order to•raise employee awareness of disability issues;
in May 2017, Gfi Informatique signed a partnership agreement with•the G9+ Institute to promote and coordinate information, exchangeand training activities relating to IT technologies, communication,digital technology, on a scientific, technical, technological,economic, social and cultural level;
in September 2017, Gfi Informatique became a partner to Women•In Africa Philanthropy, dedicated to promoting education in thefield of economic development, and more specifically to trainingfuture female entrepreneurs.
In late 2017, Gfi Informatique launched a programme called•"HappyGfi" to promote workplace well-being and to improve thequality of life in the workplace through sporting and communityevents and to help managers strengthen their bonds with theirteams.
In Spain, the Group was able to benefit from the Espacio deVoluntariado Corporativo programme, which offers a wide range ofactivities to strengthen the bonds between Company employees. Aspart of this programme, a partnership was entered into with theSpanish Federation of Rare Diseases (FEDER), to support federationinitiatives to improve the living conditions of sick people, in particular,through annual donations.
In Portugal, Gfi Informatique entered into a partnership with theBanco Empreededor da Cidade -Olivais association which providessupport to the most vulnerable families, for example by collectingfood. The Group invites its employees to volunteer in these initiatives.Following the acquisition of Roff, Gfi Informatique was also able tobenefit from two main volunteer programmes so as to further involveemployees in these activities with non-profit organisations (humansciences association, Bagos D’Ouro association).
In Morocco, an agreement signed with the National Agency forEmployment and Skills Development (ANAPEC) aims to offer certainyoung unemployed people inclusion contracts to promote theirprofessional inclusion with a view to basic training. In 2017, 108 chairswere donated to the Association des Randonneurs Solidaires. Inaddition, employees were also encouraged to participate insponsorships, for example through "Collecting winter clothes" inpartnership with Association Maghreb Secours.
In Poland, the Group joined the "Bike2Work" programme, which aimsto help people in need. In 2017, Management offered to turn everykilometre cycled by employees into financial aid and support forchildren dealing with illness. This initiative was a great success, withacross-the-Board involvement from the Group’s employees in Poland.
The Group also participated in the "Noble Box Project" which makes itpossible to help families in need during the Christmas holidays.Employees can make material or financial donations.
In Belgium and Luxembourg donations were given to the Association“SOS Villages d’Enfants”, to enable young people unable to financetheir studies to attend a technology course in a technical school inRwanda. Charity work was also carried out.
Subcontractors and suppliers2.3.3.
The vast majority of the Group's suppliers can be divided into twocategories: service providers connected to building logistics andbusiness subcontractors. In 2017, business contractors represented9.19% of the Group’s revenue in France.
“RESPONSIBLE PURCHASES” CHARTERIn its purchasing policy, Gfi Informatique has always made a point ofnot working with suppliers who fail to meet ethical standards. A“Responsible Purchases” Charter has been drafted. It has beengradually used for invitations for bids since November 2014 with theGroup’s subcontractors in order to satisfy its clients’ increasinglytough demands in terms of sustainable development.
During an invitation for bids with suppliers, the Responsible PurchasesCharter and its assessment questionnaire are sent with thespecifications. They must be completed and signed by the supplier andattached to their proposal.
By signing the charter appended to the contract, the supplierundertakes to respect its provisions.
At the end of 2015, a “flash Achats” review was written to assess howthe Responsible Purchases Charter and its assessment questionnairewere being applied within the Group. To this end, 256 audits werecarried out on the various divisions and on the Purchasing Departmentfor the period between January and September 2015. This sampleaudit aimed to identify Group suppliers and subcontractors in France(historic suppliers, assessed and/or selected, competitors) and also toinform purchasing assistants and the recipients of Group purchasesabout the Responsible Purchases Charter. In addition, the Responsiblepurchases charter and its assessment questionnaire were translatedinto English in 2016, in order to facilitate the expansion of thisinitiative to our international subsidiaries.
In late 2016, Gfi Informatique hired a trusted third party specialising incollecting and checking suppliers’ regulatory and legal documents. Thiscompany, whose services were first employed in 2014 so as to gatheradministrative, social and tax documents for all suppliers, also monitorsthe Responsible Purchases Charter as well as the CSR questionnaireannexed thereto, in relation to Group suppliers and subcontractorslisted on its platform. Every month the Gfi Informatique Group is sentstatistics on suppliers who are not up-to-date with their legaldocumentation. Suppliers’ compliance with CSR documentation ismonitored by direct connection with the platform.
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In 2017, the Purchasing Department initiated consistency controls onthe sustainability of suppliers present on the platform with which theGroup does business (adding or deleting suppliers).
In Morocco, subcontractors are required to sign a ResponsiblePurchases Charter and to commit to a sustainable development policyfor the Company to be awarded CGEM CSR accreditation.
In Spain, the purchasing policy specifies the rules in place to preventits employees from committing an offence when dealing withsuppliers. All documentation is available on the intranet and itsdeployment is being implemented.
ETHICS, AT THE HEART OF THE GROUP'S 2.4.BUSINESS PRACTICES
Commitments made by Gfi Informatique's Management2.4.1.
RENEWING ITS ADHERENCE TO THE UN GLOBAL COMPACTIn July 2017, Gfi Informatique renewed its adherence to the UN GlobalCompact, which aims to encourage businesses worldwide to adoptsustainable and socially responsible policies by committing tointegrate and promote the Compact's four issue areas relating tohuman rights, labour, environment and the fight against corruption.
Aware of the importance of ethical business practices, the Groupimplemented a number of measures and initiatives, demonstrating itsstrong commitment to a CSR policy applicable across the Group, bydrafting a new ethics charter, launching a compliance programme,anticipating the implementation of the General Data Protectionregulation (GDPR) and an Information Security Management System(ISMS) in accordance with the ISO 27001 standard.
CHANGES TO THE GROUPS' ETHICS CHARTERIn France, an ethics charter, formalised since 2014 and implementedin early 2015 (the "Ethics Charter"), aims to guide the conductexpected from employees, corporate officers and directors in terms offundamental principles such as: responsibility, integrity, respect forothers, objectivity, loyalty and trust.
Pursuant to the provisions in law No. 2016-1691 on transparency, thefight against corruption and the modernisation of economic life ofDecember 9, 2016 (Sapin II law), the Ethics Charter was updated in2017 to include the "anti-corruption" provisions of Sapin II and toextend its scope of application to all of the Group's subsidiaries(anti-competitive practices, corruption, fraud, conflicts of interest andinsider trading).
The new Ethics Charter, in force since January 1, 2018, was subject to aconsultation with employee representative bodies and has beenappended to internal regulations. The Charter is being implemented inall of the Group's international subsidiaries.
In Spain, a code of conduct has been drafted, inspired by the Group'sinstitutional principles, in order to establish the values and ethicalprinciples which govern the Company's performance as well as thestandards of behaviour to be followed by employees, which reflectthose provided for in the Ethics Charter.
LAUNCH OF A GROUP COMPLIANCE PROGRAMMEAware of the new obligations that have been imposed on listedcompanies and concerned with the need to implement procedures toensure greater transparency and prevent various potential risks, GfiInformatique Group decided to adopt a Compliance programme whichwill be implemented by the Group's Legal and Compliance Divisionthroughout Gfi Informatique's subsidiaries. The Head of Group legalDivision, appointed Chief Compliance Officer, is in charge ofCompliance implementation for the Group.
The Group Legal and Compliance Division is responsible for:
identifying and assessing any existing or potential risks through risk•mapping (conducted in 2017 by a third-party expert and repeatedeach year);
establishing preventive and corrective measures;•implementing Group procedures applicable to all Group•subsidiaries, as for example the prevention rules which apply beforeany partnership, relationships with business partners, gift policy;
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Ethics, at the heart of the Group's business practices2
creating a compliance officer network at foreign subsidiaries and•organising it to ensure that key messages (tone from the top) arerelayed to all Group employees;
and their implications, ensuring that any new policy, procedure ortool is explained during specific information and training sessionsand ensuring implementation of the Ethics Charter.
reinforcing compliance awareness in daily professional activities:•informing the Group's operational divisions of the new regulations
Concrete measures2.4.2.
STRENGTHENING OF ETHICAL RULES IN THE GROUP'S GOVERNANCETo take into account ethical challenges, the Board of Directorsmeeting of March 20, 2018, on the recommendation of theAppointments and Compensation Committee on February 20, 2018,adopted new Internal Regulations for the Board, which i) determinethe various powers and duties of Gfi Informatique's governancebodies, ii) prevent risks associated with conflicts of interest, and iii)uphold standards of ethical behaviour to prevent insider trading.
ANTI-CORRUPTION PREVENTION AND MEASURES
Commitment to fair competition
The Group conducts its activities, innovates and develops its businessin a fair manner in compliance with the principle of freedom of tradeand industry and shall refrain from any action which would adverselyaffect open competition through cartel activity, active or passivecorruption, influence peddling or patronage.
In addition, the Ethics Charter specifically prohibits entering into acontract or arrangement with competitors, illegally joining forces forany purpose of trade, addressing issues aimed at reducingcompetition, fixing the price, sales terms and the costs of services orsharing customers and sales territories, the choice of partners, salesvolumes, market share and margins.
The Group complies with national, European and international lawswhich prohibit or regulate the financing of political parties and iscommitted to responsible lobbying.
Fight against corruption
The Group condemns all forms of corruption, regardless of thecountry in which it operates and the Group has set a "zero tolerance"policy. Stringent, well-defined policies regulate any behaviour orsituation that could present a corruption risk such as politicaldonations and invitations and strictly oversee any intermediaries andbusiness partners: for this purpose, a process was implemented tosystematically examine in advance the reputation and honourabilityof this type of business partner as well as the conditions under whichthe contracts were entered into with intermediaries and businesspartners.
In addition, at their level and by virtue of their duty of loyalty,employees are expected to carry out their duties in the interest of theGroup, by participating in the prevention of fraud and avoiding anyconflicts of interest, patronage or insider trading.
An ethical selection of subcontractors and suppliers
The Group expects the same loyal and ethical treatment from itssuppliers.
In France, the Responsible Purchases Charter incorporates social andenvironmental criteria in the purchasing policy and set outs theGroup's expectations in relation to its suppliers. The charter outlinesthe conduct to be followed with respect to employment, professionalrelationships, the environment, the fight against corruption, customerinterests, competition and taxation.
Through this Responsible Purchases Charter, which is now included incontractual provisions, the Gfi Informatique Group not only intends toshare its commitment with suppliers but also to meet theever-increasing sustainable development needs of its customers.
In Spain, a guideline was drafted on crime prevention, establishing theinternal control system, internal corruption prevention procedures,whistleblower system and risk matrix.
In Portugal, the general conditions of purchase and sale alreadyinclude clauses that the business partner, customer or supplier mustagree to comply with. These concern active and passiveanti-corruption commitments, commitments regarding the health andsafety of employees, and respect for environmental legislation.
In Morocco, implemented internal procedures with respect to thefight against corruption obtained the Corporate Social Responsibility(CSR) label from the General Confederation of Moroccan Companies(CGEM).
In Belgium, anti-corruption rules and regulations are covered byinternal control procedures under the supervision of SeniorManagement and a dual signature policy.
The Group is committed to treating its suppliers and subcontractors ina fair manner.
SETTING UP A WHISTLEBLOWER MECHANISMIn compliance with the Sapin II law, a whistleblower mechanismaccessible to all employees, the terms of which are outlined in theEthics Charter, has been implemented by the Group. As a result, in theevent of a suspected actual or potential violation of a law, regulationor any of the principles set out in the Ethics Charter, employees orcorporate officers of the Group may contact the ethics officer in theGroup Legal Division via the dedicated address [email protected] byreporting the acts directly observed and by providing any evidence intheir possession.
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2
The Group is committed to making every effort to ensure thatwhistleblowers are not subjected to any pressure or retribution due totheir actions, by guaranteeing that the identities of the whistleblowerand the person(s) targeted by the report are not disclosed, includingwhere it is necessary to communicate with other parties in handlingthe report.
Alerts are subject to internal investigation. Findings which indicateactual breaches may warrant/elicit sanctions for professionalmisconduct, whose nature and scope are outlined in InternalRegulations.
PROTECTION OF HUMAN RIGHTS, WORKPLACE SAFETY AND THE ENVIRONMENTlaw No. 2017-399 of March 27, 2017 on the "Duty of Vigilance ofParent Companies and Ordering Companies" makes it possible todetect risks and prevent serious violations with respect to humanrights and fundamental freedoms, and the health and safety ofpersons and the environment.
The scope of the law focuses on the activities of Gfi Informatique, itssubsidiaries, subcontractors and suppliers with which it has anestablished business relationship.
Through the active involvement of all its stakeholders, GfiInformatique was able to implement a vigilance plan in accordancewith the law's requirements.
The report will be presented in its entirety in the next managementreport for the financial year ended December 31, 2018 under theheading "Implementation of the law on the "Duty of vigilance".
The contents of Gfi Informatique's plan include:
risk mapping per country to identify, analyse and prioritise risks−resulting from the relationship between Gfi Informatique and itssubcontractors and suppliers;
evaluating Group subsidiaries, subcontractors and suppliers with−which the Company has an established business relationship, interms of risk mapping;
concrete actions taken to reduce identified risks:−
signing the Responsible Purchases Charter with suppliers and•subcontractors;
including CSR clauses in contracts;•internal controls for all Group subsidiaries through social and•environmental audits at each stage of the value chain(evaluations, audits, reporting);
a Steering Committee for the vigilance plan meeting every six−months was set up. Reports should be submitted on an annual basisto Executive VPs, to monitor and evaluate the prevention measuresimplemented in the Group;
implementation of a compliance programme as outlined above in−section 2.4.1, which includes a whistleblower mechanism andcollecting reports relating to the existence and occurrence of risks.
PERSONAL DATA PROTECTIONIn France, law No. 78-17 of January 6, 1978 as amended in 2004 oninformation technology, data files and civil liberties sets out theconditions under which personal data may be processed. It allowspersons concerned by the processing to have the right to access andcorrect their recorded data. Gfi Informatique Group ensures thatpersonal data is kept safe and remains confidential. Gfi Informatiquethus designated a Personal Data Officer (PDO) at the end of 2014. APDO is responsible for ensuring compliance with the provisions of theamended law No. 78-17 of January 6, 1978. The data processingmanager must consult the PDO before new files are created. Themanager enters the list of all of the Group's personal data as andwhen it is processed in a register. He/She must also ensure compliancewith an individual's rights (right to access, correct and oppose).
In preparation for the entry into force on May 25, 2018 of the GeneralData Protection regulation (GDPR) requiring companies to implementdata governance, ensure data system security and guarantee the newrights of individuals, Gfi Informatique Group under the aegis of theGroup's Quality and Safety Division and Legal and ComplianceDivision carried out a number of initiatives in 2017:
establishing a Group Data Protection Policy for all of the Group's•entities, incorporating GDPR provisions to be implemented witheffect from May 25, 2018 with the objective of establishing andenforcing the rules and practices to be adopted by employees,systems and entities involved in the Group's activity, itssubsidiaries, shared service centres, to preserve the confidentiality,integrity, personal data and the availability of data issued, received,amended, published and deleted;
examining "Personal data" clauses in Gfi Group's customer and•supplier contracts and modifying standardised contractual clausesto be included in the contracts entered into by the Group, incompliance with GDPR provisions and taking into account localregulations;
implementing a regulatory awareness programme for all employees•and in-depth regulatory awareness training;
reviewing design programmes so that they natively integrate•patterns and best practices leading to "by default, by design"compliance;
implementing a "Personal data Management Plan" for all•committed projects (in addition to existing Quality and Securityplans);
appointing a PDO (Personal Data Officer) in each country to liaise•with their customer counterparts (in addition to their role liaisingwith control authorities);
setting up an audit programme for compliance and personal data•processing for all of the Group's subsidiaries.
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Conclusion2
In 2017 and pending the implementation of a Group Data Protectionpolicy, with respect to foreign subsidiaries:
In Spain, Gfi Informatique initiated IT security awareness training,•including GDPR, on the various sites (Alicante, Barcelona, Bilbao,Seville, Madrid) for all employees followed by a self-evaluationquestionnaire.
In Portugal, at the Roff subsidiary, an IT security policy has already•been formalised and governs security and information involvingpersonal data (customers, employees, suppliers).
In Belgium and Luxembourg, a GDPR-related project was initiated•with the involvement of all the relevant departments (HumanResources, IT, etc.).
CYBER RISK MANAGEMENTAs cyber security is a priority for Gfi Informatique Group, the followingmeasures have been taken:
Security organisation (human organisation (Group Security•Department, DSG), Information Security Management System,monitoring, implementation of best practices and certifications,employee awareness raising and training, managing the scope ofcompliance (specific measures implemented and monitored for agiven scope, mostly for customers or partners);
The processes and resources organising the Company's vigilance•(security continuity with suppliers and subcontractors, VigiFraudwhistleblower network, FR-Secur whistleblower network;
The processes and resources organising business continuity.•
In France, Gfi Informatique expanded its ISO 27001 certification(2013 version), relating to the Information Security ManagementSystem, i.e. to a total of 11 certified sites including the shared servicecentre in Morocco valid until 2019.
In Morocco, both of the Group's Morocco sites have a security systemfor the data from different customers. One of the sites has a systemwhich is identical to the central IT Division's system in terms of toolsand process. In addition, as part of ISO 27001 certification relating tothe Information Security Management System, some computers haveencrypted hard drives and encryption keys to safely open computersessions. On the other site in Morocco, computer software is deployedin accordance with the network security policy and computerhardware is equipped with intrusion and virus detection systems.Customer development servers are hosted on a sub-network separatefrom the local network and isolated from any Internet access whereonly employees have access. Lastly, just as for the Group, allcomputers are equipped with the same virus detection system.
In Spain, Gfi Informatique also obtained ISO 27001 certification inBilbao, Alicante and Madrid, valid until 2020.
Gfi Informatique Group took out an insurance policy on its own behalfand that of its subsidiaries, covering specific risks associated withfraud and cybercrime in order to protect against fraudulent actscommitted for direct or indirect personal gain classified as criminaloffences as well as claims resulting from a computer or data breach.This topic was already covered in the section 1.13.5. "Insurance andrisk cover" in the registration document.
CONCLUSION2.5.
This presentation gives an idea of the strategy adopted and explains the actions carried out each year. The implementation of Group policies for allGroup subsidiaries contributes to this approach targeting strategic alignment and coherence in support of acquisition-led growth andinternationalisation.
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Overview of social and environmental indicators
2
OVERVIEW OF SOCIAL AND 2.6.ENVIRONMENTAL INDICATORS
Social indicators2.6.1.
France SpainEfron
ColombiaEfronUSA
EfronMexico Portugal
RoffBrésil Belux
Switzer-land Morocco
IvoryCoast Poland
Group2017
Group2016
WORKFORCE AND DISTRIBUTION BY GENDER, AGE AND CONTRACT TYPE
Average workforce for the year 9,624 2,431 143 36 65 1,286 63 203 41 319 50 123 14,375 12,356
Distribution of workforce by gender*: 9,814 2,499 170 35 90 1,311 13 212 41 311 37 133 14,716 12,582
Women 2,275 717 58 9 28 408 50 34 4 100 2 41 3,689 3,015
Men 7,539 1,782 112 26 62 903 63 178 37 211 35 92 11,027 9,567
Distribution of workforce by age group*: 9,814 2,499 170 35 90 1,311 1 212 41 311 37 133 14,716 12,582
< 20 years old 10 - 3 - - - 12 - 1 - - - 15 10
[20 to 24 years old] 459 69 39 - 23 32 16 9 1 14 - 9 667 480
[25 to 29 years old] 1,327 265 53 3 24 222 17 25 - 108 1 34 2,078 1,707
[30 to 34 years old] 1,448 440 29 8 18 273 9 25 2 91 15 24 2,390 2,167
[35 to 39 years old] 1,517 580 15 4 14 286 3 39 5 47 9 25 2,550 2,186
[40 to 44 years old] 1,536 603 12 5 3 296 3 34 10 24 8 22 2,556 2,236
[45 to 49 years old] 1,283 349 7 5 4 125 2 33 2 13 - 9 1,833 1,514
[50 to 54 years old] 1,123 118 6 4 2 45 - 33 8 9 - 5 1,355 1,245
[55 to 59 years old] 847 57 4 3 2 23 - 10 7 5 2 2 962 796
>= 60 years old 264 18 2 3 - 9 31,2 4 5 - 2 3 310 241
Average age of employees* 40.9 38.5 31,5 42,9 30,8 37.3 1,8 40.5 46.9 32.8 38.0 35.0 39.7 40.0
Average length of service of employees* 8.1 5.7 1,7 2,2 1,3 6.0 63 6.8 10.9 5.0 4.4 5.0 7.2 7.5
Distribution of workforce by type of employment contract*: 9,814 2,499 170 35 90 1,311 63 212 41 311 37 133 14,716 12,582
permanent contract 9,454 2,290 170 26 3 1,036 - 212 41 311 36 122 13,764 11,818
fixed-term contract 60 209 - - 87 275 - - - - 1 11 643 532
other types of contracts (vocational training, apprenticeships, etc.) 300 - - 9 - - - - - - - - 309 232
Number of interns* 10 35 10 - - 107 23 2 - 7 - 3 174 46
BREAKDOWN OF EMPLOYEES JOINING AND LEAVING THE COMPANY BY GEOGRAPHICAL REGION
Total new employees for the year: 2,080 716 136 19 71 306 - 55 6 77 4 46 3,539 3,084
of which new •hires 2,006 716 136 19 71 306 8 52 6 77 4 45 3,461 2,990
of which •employees absorbed following an acquisition or an outsourcing contract 74 - - - - - - 3 - - - 1 78 94
Total lost employees for the year: 1,819 610 82 14 19 233 8 50 4 88 13 29 2,969 2,413
including •transfers outside or within the Group - - - - - 86 22 146 - - - - - 86 6
including •dismissals 124 74 11 7 1 4 NA 12 1 - 6 - 248 166
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Overview of social and environmental indicators2
France SpainEfron
ColombiaEfronUSA
EfronMexico Portugal
RoffBrésil Belux
Switzer-land Morocco
IvoryCoast Poland
Group2017
Group2016
AVERAGE REMUNERATION IN EUROS AND NET CHANGE BETWEEN 2016 AND 2017
Average theoretical annual fixed remuneration at December 31, 44,503 30,573 7,424 67,063 17,528 25,493 22,146 48,841 100,238 19,494 26,278 22,631 39,254 39,766
Changes between December 31, 2016 and December 31, 2017 1.3% 7.13% NA NA NA 43.2% NA 5.41% 8.14% 7.12% 27.81% 3.37% (1.3)% (0.24)%
Average percentage of full-time employees in the year 95% 98% 100% 100% 100% 100% 100% 94% 100% 96% 100% 97% 96% 95%
Average absenteeism rate for the year 3.8% 2.5% 0,3% 0,5% - 0.9% - 5.0% 2.3% 1.3% 1.2% 1.8% 3.2% 2.8%
Number of employees working shifts or at night* 182 123 - - - 74 - - - 26 - - 405 480
Occupational medicine: number of clinical examinations 2,406 560 197 - - 630 20 7 - 265 - - 4,085 3,598
Number of time-lost accidents 12 16 - - - 9 - 4 - - - - 41 54
Frequency rate of work-related accidents 0.70% 3.64% - - - 3.52% - 11.18% - - - - 1.53% 2.42%
Severity rate of work-related accidents 0.01% 0.10% - - - 0.40% - 0.17% - - - - 0.68% 0.05%
Number of work-related deaths - - - - - - - - - - - - 0 -
Number of occupational diseases recognised - - 1 - - - - - - - - - 1 -
Average number of training hours per year and per trained employee 35 28.4 37 - 252 44 66 139 57 8 61 5 34 27
Number of employees trained 3,300 1,619 70 - 2 536 19 80 5 248 3 75 5,957 5,157
Average percentage of employees trained in the year 34% 67% 49% - 3% 42% 35% 39% 12% 78% 6% 61% 41% 42%
At December 31.*
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Environmental indicators2.6.2.
ENVIRONMENTAL BENEFITS OF WASTE COLLECTION IN 2017
Country Scope Paper (in Kg) WEEE (in Kg)
France Greater Paris 9,374.5 2809
Spain Madrid 2,585 380
Portugal Not monitored Not monitored
Poland Warsaw 340 Not monitored
Belgium Not monitored Not monitored
Morocco 910 625
Ivory Coast 250 Not monitored
TOTAL 13,459.5 3,814
GROUP ELECTRICITY CONSUMPTION AND RELATED EMISSIONS IN 2017
Country Scope
Electricityconsumption
(in kWh) (1)
CO2 emissions(tonnes of CO2
equivalent) (1)
France Overall 5,696,203 467
Spain
Madrid, BasqueCountry, Catalonia,
Alicante, Seville,Canaries 1,408,780 335
Portugal 155,323 39
Poland Warsaw 84,000 65
Belgium 69,322 15
Morocco 327,260 235
Ivory Coast 45,000 20
TOTAL 7,785,888 1,176
Greenhouse gas emissions associated with electricity consumption for the different countries were updated using the emission factors contained in the Carbon Footprint v12.1.0 (1)of December 15, 2016, published on the French Environment and Energy Management Agency (ADEME) greenhouse gas emissions resource centre website at http://www.bilans-ges.ademe.fr.
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Methodological note2
METHODOLOGICAL NOTE2.7.
This report and the various statistics it contains were produced inconjunction with HR staff in France and at foreign subsidiaries. Thesocial reporting unit in France, which is in charge of compiling the CSRreport for the entire Group, ensures the coherence and consolidationof the figures for France and internationally, and writes the report inassociation with the Human Resources Department.
To prepare the report, the social reporting unit in France launched theconsultation and information-gathering process for France and foreignsubsidiaries, from September 2017. The procedure and informationrequired were explained in French and English to the partiesconcerned.
Since all quantitative social data for France is managed within a singlepiece of computer software, the analysis was done using saidsoftware.
Internationally, for financial year 2016, the figures do not include thefollowing companies acquired in 2016 by the Gfi Group: Efronacquired by Gfi Spain and Roff acquired by Gfi Portugal.
For financial year 2017, the following countries were not included insocial data due to their small workforce: England (9 employees),Angola (2 employees), Austria (2 employees), Romania (7 employees),Singapore (9 employees) and China (9 employees).
This was a two-step process:
step one was to collect information from foreign and French•subsidiaries in November 2017 to allow a qualitative assessment oftheir CSR policy with regard to employees (gender equality,working time, health and safety, etc.). A qualitative questionnairewas sent to them for this purpose covering various topics. As far asFrance is concerned, an interview with the Human ResourcesDirector based on this questionnaire was used to assess therelevant actions taken by the Group in France;
step two, which took place in January 2018, involved the•calculation, checking and consolidation of employment figures. Assuch, a glossary of indicators covering the expected scope, thelimitations to be considered and the calculation method was sentto each subsidiary, which could then calculate the various indicatorsexpected under the decree (workforce, absenteeism rate,percentage of employees trained, etc.) and report back to the socialreporting unit with this information.
For France, these figures were calculated directly from the payrollsystem.
Only interns and the CEO were excluded from the workforce and thedifferent indicators calculated in this report. With respect tocalculating the absenteeism rate, the length of sick leave/work-relatedaccidents/journey accidents was converted into full-time equivalents(FTP) and we divided the number of FTPs present by employees toobtain a rate. Sick leave (paid and unpaid) work accidents and journeyaccidents, which resulted in a work stoppage as well as maternity andpaternity leave are calculated in absenteeism. The frequency rate ofwork-related accidents is calculated by calculating the ratio betweenthe number of work-related accidents which resulted in a stoppagedivided by the total number of hours worked over the year multipliedby 1 million. The severity rate of work-related accidents is calculatedby the ratio between the number of days of work lost due towork-related accidents by the total number of hours worked over theyear and multiplied by 1,000. Finally when an employee attends acomplete day of training the hours calculated are the Gfi InformatiqueGroup’s collective working hours, i.e. 7 hours 24 minutes.
The main consistency controls were established by using the socialindicators calculated every month, but also the consistency ofindicators covering the same perimeter, and by comparing the figuresbetween different countries or subsidiaries attached to the samebusiness sector.
These two different stages made it possible to prepare the editorialline of this report. Finally, the Group Human Resources Director wasresponsible for validating the entire report.
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Methodological note
2
CROSS-REFERENCE TABLE WITH THE TEN PRINCIPLES OF THE UN GLOBAL COMPACT
Document chapter(s)
HUMAN RIGHTS
1. Businesses should support and respect the protection of internationally proclaimed human rights.
2. Businesses should make sure that they are not complicit in human rights abuses.
2.1. Social information
2.1. Social information
INTERNATIONAL LABOUR STANDARDS
3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.
4. Businesses should uphold the elimination of all forms of forced and compulsory labour.
5. Businesses should uphold the effective abolition of child labour.
6. Businesses should uphold the elimination of discrimination in respect of employment and occupation.
2.1. Social information
2.1. Social information
2.1. Social information
2.1. Social information
2.3. Information on socialcommitments to promotesustainable development
ENVIRONMENT
7. Businesses should support a precautionary approach to environmental challenges.
8. Businesses should undertake to promote greater environmental responsibility.
9. Businesses should encourage the development and diffusion of environmentally friendly technologies.
2.2. Environmental information
2.2. Environmental information
2.2. Environmental information
FIGHT AGAINST CORRUPTION
10. Businesses should work against corruption in all its forms, including extortion and bribery.
2.3. Information on social commitmentsto promote sustainable development
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Independent verifier’s report on consolidated social, environmental and societal information2
INDEPENDENT VERIFIER’S REPORT ON 2.8.CONSOLIDATED SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION PRESENTED IN THE MANAGEMENT REPORT
This is a free translation into English of the original report issued in the French language and it is provided solely for the convenience of English speakingusers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
To the shareholders,
In our quality as an independent verifier accredited by the COFRAC (1), presented in chapter two of the management report, hereafterunder the number n° 3-1050, and as a member of the network of one referred to as the “CSR Information,” pursuant to the provisions of theof the statutory auditors of the company GFI Informatique, we article L.225-102-1 of the French Commercial code (Code depresent our report on the consolidated social, environmental and commerce).societal information established for the year ended on the 31 12 2017,
Responsibility of the company2.8.1.
It is the responsibility of the Board of Directors to establish a information (hereafter referred to as the “Criteria”), and of which amanagement report including CSR Information referred to in the summary is included in introduction to chapter two of thearticle R. 225-105-1 of the French Commercial code (Code de management report and available on request at the company’scommerce), in accordance with the protocols used by the company headquarters.instructions for HR reporting and guides for environmental
Independence and quality control2.8.2.
Our independence is defined by regulatory requirements, the Code of documented policies and procedures to ensure compliance withEthics of our profession as well as the provisions in the article L. ethical standards, professional standards and applicable laws and822-11-3 of the French Commercial code (Code de commerce). In regulations.addition, we have implemented a quality control system, including
Responsibility of the independent verifier2.8.3.
It is our role, based on our work:
to attest whether the required CSR Information is present in the•management report or, in the case of its omission, that anappropriate explanation has been provided, in accordance withthe third paragraph of R. 225-105 of the French Commercial code(Code de commerce) (Attestation of presence of CSRInformation);
to express a limited assurance conclusion, that the CSR•Information, overall, is fairly presented, in all material aspects, inaccording with the Criteria;
Nonetheless, it is not our role to give an opinion on the compliancewith other legal dispositions where applicable, in particular thoseprovided for in the Article L. 225-102-4 of the French CommercialCode (vigilance plan) and in the Sapin II law n°2016-1691 of 9December 2016 (anti-corruption).
Our verification work mobilized the skills of five people betweenDecember 2017 and February 2018 for an estimated duration of threeweeks.
We conducted the work described below in accordance with theprofessional standards applicable in France and the Order of 13 May2013 determining the conditions under which an independentthird-party verifier conducts its mission, and in relation to the opinion
Scope available at www.cofrac.fr(1)
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Independent verifier’s report on consolidated social, environmental and societal information
2
of fairness and the reasonable assurance report, in accordance withthe international standard ISAE 3000 (1).
ATTESTATION OF PRESENCE OF CSR 1.INFORMATION
Nature and scope of the work
We obtained an understanding of the company’s CSR issues, based oninterviews with the management of relevant departments, apresentation of the company’s strategy on sustainable developmentbased on the social and environmental consequences linked to theactivities of the company and its societal commitments, as well as,where appropriate, resulting actions or programmes.
We have compared the information presented in the managementreport with the list as provided for in the Article R. 225-105-1 of theFrench Commercial code (Code de commerce).
In the absence of certain consolidated information, we have verifiedthat the explanations were provided in accordance with the provisionsin Article R. 225-105-1, paragraph 3, of the French Commercial code(Code de commerce).
We verified that the information covers the consolidated perimeter,namely the entity and its subsidiaries, as aligned with the meaning ofthe Article L.233-1 and the entities which it controls, as aligned withthe meaning of the Article L.233-3 of the French Commercial code(Code de commerce) with the limitations specified in theMethodological Note in chapter two of the management report.
Conclusion
Based on this work, and given the limitations mentioned above weconfirm the presence in the management report of the required CSRinformation.
LIMITED ASSURANCE ON CSR 2.INFORMATION
Nature and scope of the work
We undertook two interviews with the people responsible for thepreparation of the CSR Information in the different departments, incharge of the data collection process and, if applicable, the peopleresponsible for internal control processes and risk management, inorder to:
Assess the suitability of the Criteria for reporting, in relation to•their relevance, completeness, reliability, neutrality, andunderstandability, taking into consideration, if relevant, industrystandards;
Verify the implementation of the process for the collection,•compilation, processing and control for completeness andconsistency of the CSR Information and identify the proceduresfor internal control and risk management related to thepreparation of the CSR Information.
We determined the nature and extent of our tests and inspectionsbased on the nature and importance of the CSR Information, inrelation to the characteristics of the Company, its social andenvironmental issues, its strategy in relation to sustainabledevelopment and industry best practices.
For the CSR Information which we considered the most important (2):
at the level of the consolidated entity, we consulted documentary•sources and conducted interviews to corroborate the qualitativeinformation (organisation, policies, actions, etc.), weimplemented analytical procedures on the quantitativeinformation and verified, on a test basis, the calculations and thecompilation of the information, and also verified their coherenceand consistency with the other information presented in themanagement report ;at the level of the representative selection of branches that we•selected (3), based on their activity, their contribution to theconsolidated indicators, their location and a risk analysis, weundertook interviews to verify the correct application of theprocedures and to identify potential omissions and undertookdetailed tests on the basis of samples, consisting in verifying thecalculations made and linking them with supportingdocumentation. The sample selected therefore represented onaverage 84% of the total workforce.
For the other consolidated CSR information, we assessed theirconsistency in relation to our knowledge of the company.
Finally, we assessed the relevance of the explanations provided, ifappropriate, in the partial or total absence of certain information.
We consider that the sample methods and sizes of the samples thatwe considered by exercising our professional judgment allow us toexpress a limited assurance conclusion; an assurance of a higher levelwould have required more extensive verification work. Due to thenecessary use of sampling techniques and other limitations inherent inthe functioning of any information and internal control system, therisk of non-detection of a significant anomaly in the CSR Informationcannot be entirely eliminated.
Conclusion
Based on our work, we have not identified any significantmisstatement that causes us to believe that the CSR Information,taken together, has not been fairly presented, in compliance with theCriteria.
Paris-La Défense, March 21, 2018
Independent verifier
ERNST & YOUNG et Associés
Partner, Sustainable Development
Eric Mugnier
Partner
Bruno Perrin
ISAE 3000 – Assurance engagements other than audits or reviews of historical information (1)Social information: employment (total headcount, hiring and terminations), absenteeism, average of training hours per year and per trained employees, number of (2)work accidents, policies implemented in training. Environmental and societal information: power consumption, greenhouse gas emissions, waste electrical and electronical equipment and paper waste.France and Spain(3)
80 Gfi Informatique - 2017 REGISTRATION DOCUMENT
CORPORATE SOCIAL RESPONSIBILITY2
81Gfi Informatique - 2017 REGISTRATION DOCUMENT
3COMPANYSHARES AND
SHARE CAPITAL
GENERAL INFORMATION3.1. 82Share capital3.1.1. 82Trading of shares3.1.2. 82Form of shares3.1.3. 82Share registration 3.1.4.(Article 7 of the Articles of Association) 82
SHAREHOLDING STRUCTURE 3.2.AT DECEMBER 31, 2017 83Shareholders' Agreement relating to Gfi 3.2.1.Informatique's share capital 83Employee shareholders3.2.2. 84Company shares purchased and sold 3.2.3.by the corporate officers during the year 84Crossing of thresholds3.2.4. 85Reciprocal shareholdings3.2.5. 85
SHARE CAPITAL AND CHANGES 3.3.IN SHARE CAPITAL 86Potential share capital3.3.1. 86Changes in the share capital since January 1, 20133.3.2. 86
SHARE BUYBACKS3.4. 87Description of the 2018 share buyback programme3.4.1. 87Review of the “2017 share buyback programme”3.4.2. 88
OTHER INFORMATION ON SHARES – 3.5.STOCK MARKET PRICES 89Pledge of Company shares and subsidiaries’ shares3.5.1. 89Share prices and trading volumes3.5.2. 89Table of the Company's financial results in each 3.5.3.of the past five years 89Gfi Informatique share prices during 2017 3.5.4.(source Bloomberg) 90Change in Gfi Informatique share price from 3.5.5.October 1, 2015 to February 28, 2018 91
3
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General information3
GENERAL INFORMATION3.1.
Share capital3.1.1.
At 31 December 2017, the share capital was 133,141,542 euros. It is Informatique (158,825 shares), which do not have voting rightssplit into 66,570,771 shares with a par value 2 euros each, all of the attached, the number of voting rights was 66,411,946 onsame category. Given the number of treasury shares held by Gfi December 31, 2017.
Trading of shares3.1.2.
The shares are listed on Euronext (compartment B). They are fully negotiable as permitted by applicable legal and regulatory provisions (Article 8of the Articles of Association) and identified as follows: Gfi Informatique ISIN code: FR 0004038099.
Form of shares3.1.3.
The shares are fully paid-up and are available in registered or bearer form as chosen by the shareholder and as defined by the prevailing legal andregulatory provisions (Article 7 of the Articles of Association).
Share registration (Article 7 of the Articles of Association)3.1.4.
Shareholders may choose to register their shares in the following ways:
for registered shares - deposit them in a fully registered account with the Company or in a managed registered account with an authorised•financial intermediary;
for bearer shares - deposit them in an account with an authorised financial intermediary.•The shares are admitted to the Euroclear France system. As permitted by law, the Company’s Articles of Association provide for the identificationof bearer shares.
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Shareholding structure at December 31, 2017
3
SHAREHOLDING STRUCTURE 3.2.AT DECEMBER 31, 2017
To the Company’s best knowledge, its estimated shareholder base is as follows:
Shareholders
2017 2016 2015
Number ofshares held
%share
capital
%votingrights
Number ofshares held
%share
capital
%votingrights
Number ofshares held
%share
capital
%votingrights
Public (1) 1,781,284 2.7% 2.7% 1,898,103 2.9% 2.9% 8,594,916 13.0% 13.1%
Shareholders acting in concert 64,269,502 96.5% 96.7% 63,570,897 95.5% 95.7% 52,919,135 80.2% 80.4%
Mannai Corporation Q.P.S.C 54,062,807 81.2% 81.4% 34,109,194 51.2% 51.4% none none none
Itefin Participations (2) 4,265,572 6.4% 6.4% 12,329,361 18.5% 18.6% 17,069,443 25.9% 25.9%
Infofin Participations none none none none none none 10,416,431 15.8% 15.8%
Boussard & Gavaudan (3) 5,941,123 8.9% 9.0% 17,132,342 25.7% 25.8% 25,433,261 38.5% 38.7%
Financière de l’Échiquier none none none none none none 2,222,825 3.4% 3.4%
Manager and employee shareholders 127,078 0.2% 0.2% 613,897 0.9% 0.9% 1,194,406 1.8% 1.8%
Directors & Non-voting members (4) 46,387 0.1% 0.1% 151,179 0.2% 0.2% 536,320 0.8% 0.8%
FCPE Gfi Informatique Expansion (1) 187,695 0.3% 0.3% 187,695 0.3% 0.3% 326,520 0.5% 0.5%
Repurchases and sales of treasury shares 158,825 0.2% none 149,000 0.2% none 186,144 0.3% none
TOTAL 66,570,771 100.0% 100.0% 66,570,771 100.0% 100.0% 65,980,266 100.0% 100.0%
In accordance with the Public Tender Offer filed on April 19, 2016 with the AMF and registered under number 216C0925, Mannai Corporation Q.PSC. stated that they do not have (1)the intention to implement a mandatory withdrawal on the Company's shares at the end of the Offer or to ask Euronext to cancel the trading of the Gfi Informatique shares.Itefin Participations is a holding company held by FCPR Apax VII (52.56%), Altamir (39.65%), Auteuil Conseil (7.76%), and Vincent Rouaix (0.03%).(2)Boussard & Gavaudan, representing BG Select Investments Limited (Ireland) ) (6.57%), Boussard & Gavaudan Holding Limited (1.96%), and BG Master Fund ICAV (0.40%).(3)Excluding Itefin Participations, whose shares are listed under Shares held in concert.(4)
With the exception of treasury shares, which do not carry voting paid-up shares held in registered form for at least two years in therights, all Gfi Informatique shares carry one voting right each. Fully name of the same shareholder do not hold double voting rights.
Shareholders' Agreement relating to Gfi Informatique's 3.2.1.share capital
On April 8, 2016, a shareholders' Agreement was entered into consistingof shareholders acting in concert regarding Gfi Informatique (hereinafterthe "shareholders' Agreement"), between i) BG Master Fund plc,Boussard & Gavaudan Holding limited, and BG Select InvestmentsLimited (Ireland) (hereinafter "Boussard & Gavaudan"), ii) ItefinParticipations, Altamir, and FPCI Apax France VII (hereinafter "Apax"),and iii) Mannai Corporation QPSC (hereinafter "Mannai Corporation").
216C0904, whose main clauses can be accessed on the Autorité desmarchés financiers website, www.amf-france.org.
This shareholders' agreement was the subject of a notice from theAutorité des marchés financiers published on April 15, 2016, no.
An Amendment to say shareholders' Agreement was entered into onMay 10, 2017 and filed with the Autorité des marchés financiers (AMF)on May 16, 2017 and published on May 18, 2017 under number217C0991. This Amendment provides for (i) the implementation of GfiInformatique's new governance and (ii) the procedure for the transferof Apax's shares (via Itefin Participations) and Boussard & Gavaudan'sshares to Mannai Corporation. The main provisions of thisAmendment are also available on AMF's website www.amf-france.org.
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Shareholding structure at December 31, 20173
THE ACQUISITION BY MANNAI CORPORATION OF AN ADDITIONAL STAKE IN GFI INFORMATIQUEAs part of the Amendment to the shareholders' Agreement onMay 10, 2017, Apax and Boussard & Gavaudan agreed to sell a portionof their shares to Mannai Corporation in the following manner:
the "First Block" represents 29% of Gfi Informatique's share capital•and voting rights (on a fully diluted basis):
the off-market sale of Gfi Informatique's shares held by Itefin•Participations (12% of the share capital and voting rights) in June2017, at a price per share of 8.00 euros,
then in July 2017, the sale of Gfi Informatique's shares held by•Boussard & Gavaudan (17% of the share capital and votingrights) under the same terms;
the "Second Block" represents the remaining stake, i.e.•approximately 15% of the share capital and voting rights (also on adiluted basis) which is expected to be sold at a price per share of8.50 euros in Q2 2018, following the Shareholders General Meetingcalled to approve the 2017 financial statements and the ex-dividenddate, subject to applicable regulatory authorisations.
COMPLETION OF THE SALE OF GFI INFORMATIQUE SHARES HELD BY ITEFIN PARTICIPATIONS TO MANNAI CORPORATION
the first sale of 8,063,789 shares to Mannai Corporation, i.e.approximately 12% of Gfi Informatique's share capital and votingrights, in compliance with the commitments made upon signing theAmendment to the shareholders' Agreement.
On June 19, 2017, Itefin Participations which held approximately18.5% of Gfi Informatique's share capital and voting rights, completed
COMPLETION OF THE SALE OF GFI INFORMATIQUE SHARES HELD BY BOUSSARD & GAVAUDAN TO MANNAI CORPORATIONOn July 10, 2017, Boussard & Gavaudan which held approximately25.7% of Gfi Informatique's share capital and voting rights, completedthe first sale of 11,231,313 shares, i.e. (i) 8,702,227 Gfi Informatiqueshares held by BG Select Investments Limited (Ireland), and (ii)2,529,086 Gfi Informatique shares held by Boussard & GavaudanHolding Limited, to Mannai Corporation, i.e. close to 17% of GfiInformatique's share capital and voting rights, in compliance with thecommitments made upon signing the Amendment to theshareholders' Agreement.
MANNAI CORPORATION ACQUIRES AN ADDITIONAL STAKE IN GFI INFORMATIQUE IN MAY AND JUNE 2017In May and June 2017, Mannai Corporation acquired 658,511 GfiInformatique shares at a price per share of 8.50 euros from holders offree shares which did not contribute their shares to the SimplifiedPublic Tender Offer initiated by Mannai Corporation in 2016, andwhich exercised their put options in compliance with the liquiditycontract entered into with Mannai Corporation in November 2016.
Employee shareholders3.2.2.
COMPANY SAVINGS PLANSection 1.11.2 “Employee shareholders” sets out details of theCompany savings plan.
FREE SHARE PLANSAdditional explanations are provided in section 4.10 “Board ofDirectors’ report on free share plans”.
STATUS OF EMPLOYEE PARTICIPATION IN THE SHARE CAPITAL AT DECEMBER 31, 2017 (ARTICLE L. 225-102 OF THE FRENCH COMMERCIAL CODE)
In accordance with Article L. 225-102 of the French Commercial Code,Gfi Informatique employees held 220,166 Company shares atDecember 31, 2017, i.e. 0.33% of the share capital, directly orindirectly through the Company savings plan.
Company shares purchased and sold by the corporate 3.2.3.officers during the year
None.
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Shareholding structure at December 31, 2017
3
Crossing of thresholds3.2.4.
The Company was informed of the following crossing of shareholding thresholds during 2017:
Threshold(s) crossed Thresholds crossed in termsof share capital and in terms
of voting rights Direction
Shareholders(s)having crossed
the threshold(s)Number ofshares held
% sharecapital held
voting rightsDate
June 16, 2017 individually (D &I 217C1285 06.20.2017) 15%, 10% Decrease
ItefinParticipations 4,265,572 6.41% (1)
June 16, 2017 Individually by assimilation (D &I 217C1285 06.20.2017) 2/3 Increase
MannaiCorporation
Q.P.S.C 54,062,807 81.21% (1)(2)
July 7, 2017 individually (D &I 217C1545 07.11.2017) 15%, 10% Decrease
BG SelectInvestments
Limited 4,373,436 6.57% (1)
July 7, 2017 individually (D &I 217C1545 07.11.2017) 5% Decrease
Boussard &Gavaudan
Holding Limited 1,303,159 1.96% (1)
July 7, 2017 Boussard & Gavaudan(3) (D &I 217C1545 07.11.2017) 25%, 20%, 15%, 10% Decrease
Boussard &Gavaudan 5,941,123 8.92% (1)
July 7, 2017 Sub-Group(4) (D &I 217C1545 07.11.2017) 30%, 25%, 20% Decrease
Boussard &Gavaudan / Apax 10,206,695 15.33% (1)
July 7, 2017 individually, "physical holding" (D &I 217C1545 07.11.2017) 2/3 Increase
MannaiCorporation QSC 54,062,807 81.21% (1)(2)
On the basis of a share capital composed of 66,570,771 shares representing an equal number of voting rights, in accordance with the provisions of Article 223-11 of the General (1)Regulation of the Autorité des Marchés Financiers.These shares were acquired off market from Boussard & Gavaudan on July 10, 2017 at a price per share of 8 euros, in accordance with the press release of May 10, 2017 issued by (2)Mannai Corporation, Apax and Boussard & Gavaudan and the Amendment to the shareholders' Agreement D&I 217C0991 made public on May 18, 2017.Boussard & Gavaudan: BG Select Investments Limited (Ireland), Boussard & Gavaudan Holding Limited and BG Master Fund ICAV.(3)Sub-Group: Boussard & Gavaudan (BG Select Investments Limited (Ireland), Boussard & Gavaudan Holding Limited and BG Master Fund ICAV) and Apax (Itefin Participations, (4)FPCI Apax France VII and Altamir).
Reciprocal shareholdings3.2.5.
There is no reciprocal shareholding giving control of Gfi Informatique treasury shares.
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Share capital and changes in share capital3
SHARE CAPITAL AND CHANGES IN SHARE 3.3.CAPITAL
Potential share capital3.3.1.
The potential share capital at December 31, 2017 is 203,541,542 euros.
To determine the potential share capital, the following components must be taken into account:
Number of sharesPotential share capital
(in euros)
NUMBER OF SHARES COMPRISING THE SHARE CAPITAL AT 12.31.2017 66,570,771
a) Free shares authorised by the Shareholders’ Meeting of 11.18.2015 1,200,000
b) Share issue authorised by the Shareholders’ Meeting of 06.28.2016 (capital increase by cash contribution) 11,000,000
c) Share issue authorised by the Shareholders’ Meeting of 06.28.2016 (capital increase by incorporation of reserves) 23,000,000
NUMBER OF POTENTIAL SHARES 35,200,000
TOTAL 101,770,771 203,541,542
The number of potential shares comprises:
the 1,200,000 Free shares authorised by the Shareholders’ Generala)Meeting of November 18, 2015 and not yet issued by the Board ofDirectors as at December 31, 2017. However, the Board ofDirectors, on January 21, 2016, using the powers granted to it bythe Shareholders’ General Meeting of November 18, 2015, decidedto grant Gfi Informatique Group employees and directors rights tofree shares under the Gfi Informatique 2016 Free Share Plan, with apar value of 2 euros each (see section 4.10 “report of the Board ofDirectors on the Grant of Free Shares”);
the 11,000,000 shares for which the authorisation to issue sharesb)by capital increase in cash, decided by the Ordinary ShareholdersMeeting of June 28, 2016, has not been used and which expire onAugust 28, 2018;
the 23,000,000 shares for which the authorisation to issue shares,c)decided by the Shareholders’ General Meeting of June 28, 2016, hasnot been used and which expire on August 28, 2018.
Changes in the share capital since January 1, 20133.3.2.
Date of decision Transaction
Par value pershare
(in euros)Capital increase
(in euros)
Share, merger orcontribution
premium(in euros)
Amount of newshare capital
(in euros)
Cumulativenumber of
Company shares
January 1, 2013 Carried forward 108,900,684 54,450,342
June 12, 2015Cash capital increase recorded – free shares allocated 2 1,177,704 - 110,078,388 55,039,194
July 27, 2015Cash capital increase recorded – 2011 Océanes conversion 2 21,796,566 28,719,605 131,874,954 65,937,477
July 30, 2015
Cash capital increase recorded – exercise of 42,789 Bsaar warrants 2 85,578 78,731 131,960,532 65,980,266
June 17, 2016
Cash capital increase recorded – exercise of 590,505 Bsaar warrants 2 1,181,010 1,086,529 133,141,542 66,570,771
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Share buybacks
3
SHARE BUYBACKS3.4.
The Extraordinary and Ordinary Shareholders General Meeting ofMay 22, 2017 authorised the Board of Directors to acquire a numberof Gfi Informatique shares representing 10% of the share capital. Themaximum purchase price per share was set at 10 euros. The objectivesof this share buyback programme were as follows:
to award free shares to employees and corporate officers of the•Company and its associated companies;
to allocate or transfer shares to employees under mandatory•employee profit sharing schemes;
to invigorate the market for the Company’s shares under a liquidity•agreement entered into with an independent investment servicesprovider governed by terms in line with the code of conductrecognised by the AMF;
to hold and subsequently use in exchange or as payment for any•external growth transactions up to 5% of the share capital forexchanges as part of a merger, spin-off or asset contributiontransaction;
to deliver or exchange shares when exercising the rights attached to•shares carrying entitlement, in any way whatsoever, to theallocation of Company shares;
to reduce the share capital by cancellation of all or some of the•shares acquired.
This authorisation shall expire on November 22, 2018.
Description of the 2018 share buyback programme3.4.1.
This programme will be implemented subject to a shareholder vote, atthe General Meeting of Gfi Informatique called to vote on thefinancial statements for the financial year ending December 31, 2017,on the resolution set forth below.
AUTHORISATION GRANTED TO THE BOARD OF DIRECTORS WITH A VIEW TO ALLOWING THE COMPANY TO PURCHASE ITS OWN SHARESThe General Meeting, acting in accordance with the quorum and majorityrequirements for Ordinary General Meetings, having considered thereport of the Board of Directors in accordance with the provisions ofArticles L 225-209 et seq. of the French Commercial Code,Articles 241-1 to 241-5 of the AMF General Regulation and regulation(EU) No. 596/2014 of April 16, 2014 on market abuse ("MAR", i.e. MarketAbuse regulation) and Delegated regulation (EU) No. 2016/1052 ofMarch 8, 2016 supplementing MAR, authorises the Board of Directors topurchase a number of Gfi Informatique shares representing a maximumof 10% of the share capital at the date of the General Meeting, with amaximum price per share of 10 euros. If required, the number of shareswill be adjusted in the event of transactions on the share capital,particularly in the event of incorporation of reserves, profits or premiumsand free share allocations, division or grouping of shares.
The Board of Directors may use this authorisation to meet thefollowing objectives:
to award free shares to employees and corporate officers of the•Company and its associated companies;
to allocate or transfer shares to employees under mandatory•employee profit sharing schemes;
provider governed by terms in line with the code of conductrecognised by the AMF;
to invigorate the market for the Company’s shares under a liquidity•agreement entered into with an independent investment services
to hold and subsequently use in exchange or as payment for any•external growth transactions up to 5% of the share capital forexchanges as part of a merger, spin-off or asset contributiontransaction;
to deliver or exchange shares when exercising the rights attached to•shares carrying entitlement, in any way whatsoever, to theallocation of Company shares;
to reduce the share capital by cancellation of all or some of the•shares acquired.
This programme will also be designed to allow the Company toperform transactions on the Company’s shares for any otherpermitted purpose or a purpose which has been authorised by currentlegislation or regulations.
In such a scenario, the Company will notify its shareholders in apublished statement.
The acquisition, sale or transfer of these shares may take place at anytime, including during a takeover bid, in line with regulations, and by anymeans, including on the market or over the counter or by means of theacquisition of blocks of shares, by the use of derivative products orthrough the implementation of option strategies. It is noted that during atakeover bid, these transactions may be carried out only in strictcompliance with Article 231-40 II of the AMF General Regulation, in orderto enable the Company to comply with its prior commitments, and only:
first, if the offer for Gfi Informatique shares is entirely for cash;1)
second, if the buyback transactions are performed in connection2)with a programme that is already in effect, falling within the scopeof one of the objectives referred to above, and which are not liableto cause the offer to fail.
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Share buybacks3
The General Meeting grants all powers to the Board of Directors, withsubdelegation authority, to implement this authorisation and to placeany orders, enter into any agreements, draw up and modify anydocuments, particularly information documents, perform allformalities and make any declarations to any bodies, and generally, dowhat is necessary to apply this authorisation.
The Board will inform the Ordinary Annual General Meeting of thetransactions carried out in accordance with this resolution. Theauthorisation granted to the Board of Directors is valid for eighteen (18)months from this meeting; it terminates and replaces, for the remainingperiod and for the amounts unused to date, the authorisation issued bythe Combined General Meeting of May 22, 2017.
Review of the “2017 share buyback programme”3.4.2.
Gfi Informatique has a liquidity agreement with Oddo Corporate Finance, in accordance with the AFEI charter. The 2017 share buyback programmewas included in the 2016 registration document, which can be viewed on the Company’s website or can be obtained in hard copy format from thehead office by any shareholder requesting it.
The results of the share buyback programme as at December 31, 2017 are as follows:
Number of shares comprising the issuer’s capital as at January 1, 2017 66,570,771
Number of treasury shares held directly or indirectly on January 1, 2017 (number of shares and percentage) 149,000 0.22%
MARKET INVIGORATION (LIQUIDITY AGREEMENT)
Cumulative data from January 1, 2017 to December 31, 2017
Number of shares held on January 1, 2017 (number of shares and percentage) 33,070 0.05%
Number of shares purchased 106,173
Number of shares sold (96,348)
Number of shares transferred -
Number of shares cancelled -
Share buyback from shareholders holding more than 10% of the capital or Company managers -
Number of shares cancelled over the past 24 months -
Number of shares held by the Company on December 31, 2017 (number of shares and percentage) 42,895 0.06%
Stock market value of treasury shares held by the Company on December 31, 2017(1) €321,712
Gross book value of portfolio as at December 31, 2017 €331,425
Average purchase price in 2017 €7.84
Average sale price in 2017 €7.91
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Other information on shares – Stock market prices
3
As at December 31, 2017, the following resources appeared in the liquidity agreement:
42,895 Gfi Informatique shares;•157,943.75 euros in cash.•
OTHER OBJECTIVES (SHARE BUYBACK PORTFOLIO)
Cumulative data from January 1, 2017 to December 31, 2017
Number of shares held directly or indirectly on January 1, 2017 115,930
Number of shares purchased or transferred -
Number of shares allocated as free shares to employees -
Number of shares cancelled -
Number of shares held by the Company on December 31, 2017 115,930
Stock market price at December 31, 2017(1) €7.50
Stock market value of treasury shares held by the Company on December 31, 2017 (1) €869,475
Gross book value of portfolio as at December 31, 2017 €700,727
Average purchase price in 2017 €6.04
Based on the share price on the last business day, i.e. December 29, 2017.(1)
OTHER INFORMATION ON SHARES – 3.5.STOCK MARKET PRICES
Pledge of Company shares and subsidiaries’ shares3.5.1.
On April 10, 2013, Gfi Informatique pledged all the shares it held in itssubsidiary Gfi Informatique-Production to the French Treasury, asguarantee for the debt from the VAT dispute.
On October 9, 2015, Gfi Informatique pledged all the shares it holdsin its subsidiary Gfi Progiciels, to the banking pool, as part of thesyndicated credit agreement dated October 9, 2015.
Share prices and trading volumes3.5.2.
Gfi Informatique is listed on the Euronext Paris regulated market(Compartment B) of NYSE Euronext and the following indices: CACTechnology, CAC Software & Computer Services and CAC All Shares.
Gfi Informatique shares meet the eligibility criteria for the ShareSavings Plan (French Plan d'Épargne en Actions, or PEA) but not theDeferred Settlement Service (SRD).
The information disclosed below has been obtained from Euronextand has been reproduced faithfully with no omission that mightrender this information untrue or misleading.
Table of the Company's financial results in each of the past 3.5.3.five years
The table of the Company's financial results in each of the past five years provided for in Article R. 225-102 par. 2 is referred to in paragraph 6.3.1of this registration document.
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Other information on shares – Stock market prices3
Gfi Informatique share prices during 2017 3.5.4.(source Bloomberg)
Numberof trading
sessions
Totalnumberof share
transactions(in number
of shares)
Average dailyvolume
(in numberof shares)
Total volume(in thousands
of euros)
Dailyaverage
of capital(in millions
of euros)
Lowestprice over
the month(in euros)
Highestprice over
the month(in euros)
Averageprice duringthe month*
(in euros)
2015
October 21 162,002 7,714 991,599 0.05 5.82 6,37 6,12
November 20 614,255 30,713 4,787,243 0.24 6.1 8,45 7,79
December 22 1,804,031 82,001 15,060,020 0.68 8.18 8.38 8.35
2016
January 20 1,032,467 51,623 8,639,802 0.43 8.3 8.45 8.37
February 21 1,043,656 49,698 8,777,722 0.42 7.94 8.47 8.41
March 21 386,997 18,428 3,246,125 0.15 8.25 8.45 8.39
April 21 1,029,416 49,020 8,720,119 0.42 8.19 8.53 8.47
May 21 147,807 7,038 1,253,934 0.06 8.48 8.5 8.48
June 22 10,118,809 459,946 86,010,700 3.91 8.21 8.79 8.50
July 21 89,923 4,282 723,510 0.03 7.81 8.65 8.05
August 23 44,248 1,924 352,997 0.02 7.9 8.1 7.98
September 22 66,855 3,039 533,141 0.02 7.87 8.14 7.97
October 21 55,650 2,650 437,565 0.02 7.71 8.14 7.86
November 22 78,501 3,568 609,167 0.03 7.56 8.19 7.76
December 21 58,618 2,791 475,525 0.02 7.96 8.26 8.11
2017
January 22 88,338 4,015 736,450 0.03 8.01 8.5 8.34
February 20 71,150 3,558 586,575 0.03 8.12 8.4 8.24
March 23 75,122 3,266 597,619 0.03 7.61 8.25 7.96
April 18 83,701 4,650 628,375 0.03 7.03 7.9 7.51
May 22 90,230 4,101 705,577 0.03 7.41 8 7.82
June 22 64,842 2,947 505,056 0.02 7.62 7.98 7.79
July 21 40,805 1,943 319,082 0.02 7.71 7.98 7.82
August 23 19,874 864 153,358 0.01 7.65 7.8 7.72
September 21 22,575 1,075 174,506 0.01 7.66 7.8 7.73
October 22 37,891 1,722 292,133 0.01 7.62 7.76 7.71
November 22 26,864 1,221 208,233 0.01 7.68 7.93 7.75
December 19 29,549 1,555 223,021 0.01 7.37 7.8 7.55
2018
January 22 31,563 1,435 243,564 0.01 7.4 7.88 7.74
February 20 50,605 2,530 395,345 0.02 7.62 8 7.93
Based on daily closing prices.*
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COMPANY SHARES AND SHARE CAPITAL
Other information on shares – Stock market prices
3
Change in Gfi Informatique share price from October 1, 3.5.5.2015 to February 28, 2018
100 index as at October 1, 2015
oct-15 dec-15 feb-16 apr-16 jul-16 aug-16 oct-16 dec-16 jul-17 aug-17 oct-17 feb-18dec-17feb-17 apr-17
90
100
110
120
130
140
150
160
LowerHigher
100.00150.77
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COMPANY SHARES AND SHARE CAPITAL3
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4REPORT OF THEBOARD OF
DIRECTORS ONCORPORATE
GOVERNANCE
NEW GOVERNANCE MODEL4.1. 94The Board of Directors4.1.1. 95Audit and Internal Control Committee4.1.2. 95Appointments and Compensation Committee4.1.3. 96Investments Committee4.1.4. 96Strategic Committee4.1.5. 96
LIST OF THE MAIN POSITIONS HELD 4.2.AND FUNCTIONS CARRIED OUT BY THE GFI INFORMATIQUE CORPORATE OFFICERS 97List of the main positions held by the members of 4.2.1.GFI Informatique's Board of Directors 97List of the main positions held by the observers on 4.2.2.GFI Informatique's Board of Directors 104
RELATED-PARTY AGREEMENTS AND 4.3.COMMITMENTS 108Agreements and commitments authorised during 4.3.1.the 2017 financial year and since the reporting date 108Agreements and commitments approved by the 4.3.2.Shareholders General Meeting 109
COMPENSATION PAID TO 4.4.CORPORATE OFFICERS 110
OTHER INFORMATION ON THE 4.5.CORPORATE OFFICERS 114
CORPORATE GOVERNANCE4.6. 115
APPLICATION OF THE 4.7.RECOMMENDATIONS IN THE AFEP-MEDEF CODE 120
SIGNIFICANT MATTERS LIKELY TO 4.8.IMPACT A TAKEOVER BID 120
LIST OF FINANCIAL AUTHORISATIONS 4.9.GRANTED AS AT DECEMBER 31, 2017 121
BOARD OF DIRECTORS’ REPORT ON 4.10.FREE SHARES 122
SUPPLEMENTARY REPORT ON THE 4.11.COMPENSATION OF EXECUTIVE OFFICERS 123
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Dear Shareholders,
Our report to you on corporate governance has been prepared in accordance with Order No. 2017-1162 of July 12, 2017. It replacesthe report of the Chairman of the Board of Directors on the composition of the Board and application of the principle of genderbalance, the conditions for the preparation and organisation of the Board's work, and on the Company's internal control and riskmanagement procedures.
This report, which concerns both Gfi Informatique and its subsidiaries, was prepared with the assistance of the FinanceDepartment, partly on the basis of the summaries of the work performed by the Audit Committee.
This report was approved by the Board of Directors on March 28, 2018.
NEW GOVERNANCE MODEL4.1.
In accordance with the commitments undertaken by the shareholdersacting in concert under the Amendment to the shareholders'Agreement and the provisions of law no. 2011-103 of January 27, 2011on gender balance on companies' Boards of Directors and SupervisoryBoards and gender equality (known as the Copé-Zimmermann law),the Company's Shareholders General Meeting held on May 22, 2017voted to approve a new Board of Directors and adopted the followingmotions:
renewal of the term of office of Mrs Carolle Foissaud as a company•director for a three-year term, until the end of the Ordinary GeneralMeeting called to approve the financial statements for the yearended December 31, 2019 to be held in 2020;
official cognisance of the expiration of the term of office as a•director of Mr Jean-Paul Lepeytre, non-replacement andappointment as an observer for a three-year term, until the end ofthe Ordinary General Meeting called to approve the financialstatements for the year ended December 31, 2019 to be held in2020;
official cognisance of the expiration of the term of office as a•director of Mr Nicolas Roy, non-replacement and appointment asan observer for a three-year term, until the end of the OrdinaryGeneral Meeting called to approve the financial statements for theyear ended December 31, 2019 to be held in 2020;
renewal of the term of office of Mr Gérard Longuet as an observer•for a three-year term, until the end of the Ordinary GeneralMeeting called to approve the financial statements for the yearended December 31, 2019 to be held in 2020;
official cognisance of the resignation of Mr Patrick de Giovanni as•director, non-replacement and appointment as an observer for athree-year term, until the end of the Ordinary General Meetingcalled to approve the financial statements for the year endedDecember 31, 2019 to be held in 2020.
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The Board of Directors4.1.1.
As from May 22, 2017, the Board of Directors of Gfi Informatique is composed as follows:
Members of the Board of Directors Functions
Vincent Rouaix• Chairman and General Manager
Anne-Lise Bapst• Independent director
William Bitan• Independent director
Carolle Foissaud• Independent director
Alekh Grewal• Director
Keith Higley• Director
Itefin Participations represented by Gilles Rigal•Sabine Schimel•
Director
Independent director
Jean-Philippe Duboust (1)• Director representing the employees
Henry Capelle• Observer
Patrick de Giovanni• Observer
Santhosh Krishnamoorthy• Observer
Jean-Paul Lepeytre• Observer
Gérard Longuet• Observer
Henri Moulard• Observer
Nicolas Roy• Observer
Laurent Calvet• Gfi Informatique ESU Representative of the Central Works Council
Nadira Zeroual (2)• Gfi Informatique ESU Representative of the Central Works Council
Jean-Luc Louis, director representing the employees, was replaced by Jean-Philippe Duboust on January 20, 2017.(1)
Alain Kuong Kaing, Central Works Council representative of the Gfi Informatique ESU on the Board of Directors, was replaced by Nadira Zeroual on(2)December 26, 2016.
Following the renewal of the terms of office of Mrs Carolle Foissaud asa director for a three-year term, of Mr Gérard Longuet as an observerfor a three-year term, and the appointment as observers of Jean-PaulLepeytre, Nicolas Roy and Patrick de Giovanni, also for a three-yearterm, the Board of Directors approved the new composition of thespecialised Board committees during its meeting of May 22, 2017.
The members of the specialised Board committees are appointed toserve for a term to coincide with the terms of office of the directorsand observers, in accordance with the provisions of articles 1.1 and 7.3of the Board's new internal regulations adopted on March 20, 2018; asof May 22, 2017, the members of the specialised committees of theBoard of Directors are as follows:
Audit and Internal Control Committee4.1.2.
The Audit and Internal Control Committee is composed of four members.
William Bitan (1) Chairman
Patrick de Giovanni (2) Member
Alekh Grewal Member
Sabine Schimel (1) Member
Independent director.(1)Observer of the Board of Directors.(2)
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Appointments and Compensation Committee4.1.3.
The Appointments and Compensation Committee is composed of four members.
Henri Moulard (2) Chairman
Anne-Lise Bapst (1) Member
Alekh Grewal Member
Gilles Rigal Member
Independent director.(1)Observer of the Board of Directors.(2)
Investments Committee4.1.4.
The Investments Committee comprises seven members.
Vincent Rouaix Chairman
Henry Capelle (1) Member
Alekh Grewal Member
Santhosh Krishnamoorthy (1) Member
Jean-Paul Lepeytre (1) Member
Gilles Rigal Member
Nicolas Roy (1) Member
Observer of the Board of Directors.(1)
Strategic Committee4.1.5.
The Strategic Committee comprises seven members.
Jean-Paul Lepeytre (2) Chairman
Henry Capelle (2) Member
Carolle Foissaud (1) Member
Alekh Grewal Member
Santhosh Krishnamoorthy (2) Member
Gilles Rigal Member
Vincent Rouaix Member
Independent director.(1)Observer of the Board of Directors.(2)
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LIST OF THE MAIN POSITIONS HELD AND 4.2.FUNCTIONS CARRIED OUT BY THE GFI INFORMATIQUE CORPORATE OFFICERS
List of the main positions held by the members of GFI 4.2.1.Informatique's Board of Directors
VINCENT ROUAIXBorn: June 16, 1959Age (1): 58Nationality: FrenchBusiness Address: 145, boulevard Victor-Hugo, 93400 Saint-OuenDate of first appointment: 2006End of term as Director (2): 2019Number of Company shares held: 45,004Independence criteria(3): no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Chairman and General Manager and member of the Board of−Directors, Gfi Informatique (France)
Chairman of the Investments Committee, Gfi Informatique (France)−
Member of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
Chairman of the Board of Directors and member of the Board of Gfi−Informatique - Production SA (France)
Representative of Gfi Informatique in his capacity as Chairman of−Gfi Informatique Entreprise Solutions SAS (France)
Representative of Gfi Informatique in his capacity as Chairman of−ITN Consultants SAS (France)
Representative of Gfi Informatique in his capacity as Chairman of−Business Document SAS (France)
Representative of Gfi Informatique in his capacity as Chairman of−Addstones SAS (France)
Representative of Gfi Informatique in his capacity as Chairman of−Gfi Informatique Telecom SAS (France)
Representative of Gfi Informatique in his capacity as Chairman and−member of the Board of Directors of Grupo Corporativo GfiInformatica SA (Spain)
Chairman and member of the Board of Director of Gfi Portugal -−Tecnologias de Informaçao SA (Portugal)
Representative of Gfi Informatique in his capacity as a non-executive−Director of Roff Consultores Independentes (Portugal)
Chairman and member of the Board of Directors of Gfi−International SA (Switzerland)
Representative of Gfi Informatique in his capacity as Managing−Director of Gfi Bénélux (Belgium)
Chairman, Managing Director and member of the Board of−Directors, Holding Gfi Informatique Maroc SA (Morocco)
Representative of Gfi Informatique in his capacity as member of the−Board of Directors of Gfi Maroc Offshore SA (Morocco)
Representative of Gfi Informatique in his capacity as member of the−Board of Directors of Somafor RCI (Ivory Coast)
Member of the Board of Directors of Impaq Sp Z.o.o (Poland)−
Member of the Board of Directors of Impaq UK (United Kingdom)−
Chairman of the Board of Directors of Impaq AG (Switzerland)−
Representative of Gfi Informatique in his capacity as Chairman and−member of the Board of Directors of Efron Consulting Inc (UnitedStates)
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
None
UNLISTED COMPANIES
Manager, Auteuil Conseil EURL (France)−
Member of the Administrative Committee, Itefin Participations SAS−(France)
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Representative of Gfi Informatique in his capacity as Chairman of−Gfi Consulting SAS (until 2016) (France) (Total transfer of assets toGfi Informatique on April 1, 2016)
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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Chairman of the Supervisory Board of Financière Ordirope SAS−(until 2016) (France) (Total transfer of assets to Gfi Progiciels onJune 27, 2016)
Chairman of Gfi-BUS SAS (until 2015) (France) (total transfer of−assets to Gfi Informatique, July 30, 2015)
Chairman and General Manager and Director, Cognitis group SA (until−2015) (France) (total transfer of assets to Gfi Informatique, May 25,2015)
EXPERTISE AND PROFESSIONAL EXPERIENCE
After graduating from the Ecole Supérieure des Travaux Publics (aconstruction engineering school), Vincent Rouaix's entire career hasbeen in international groups in the services industry. In 1986, he joinedLogispace, where he became General Manager, and then Chairmanand General Manager. In 1999, he was appointed General Manager ofCognicase France, and then, in 2001, Executive Vice-President andGeneral Manager Europe of Cognicase.
Vincent Rouaix then set up the Adelior group, with the backing ofinvestment funds. After Gfi Informatique acquired the Adelior group,he was appointed as a member of the Board of Directors (March2006) and then Deputy General Manager (December 2006) of GfiInformatique, and has been General Manager since March 17, 2009.He was appointed Chairman of the Board of Directors on May 20,2009.
ANNE-LISE BAPSTDate of birth: March 3, 1964Age (1): 54Nationality: FrenchBusiness Address: 109 Avenue des Champs-Élysées 75008 ParisDate of first appointment: Shareholders General Meeting on March 24, 2016End of term as Director (2): 2019Number of Company shares held: 50Independence criteria (3): yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Member of the Board of Directors, Gfi Informatique (France)−
Member of the Appointments and Compensation Committee, Gfi−Informatique (France)
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
Member of the Executive Committee of Fondation HSBC pour−l’Éducation
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
None
EXPERTISE AND PROFESSIONAL EXPERIENCE
Ms Anne-Lise Bapst started her career at the Commission desOpérations de Bourse, an agency of the French government concernedwith securities trading, where her positions included Head of PublicRelations, among other things directing the implementation of thecommunications strategy, relations with the financial community(annual report of the President of the Republic, representative of theCOB on government panels and bodies responsible for adopting theeuro as currency) and writing the booklet L’investisseur et l’Euro,circulated in partnership with the major banking networks.
In 2000, she joined groupe ABN-Amro Bank France (Banque deFinancement et d’Investissement and Banque Privée Neuflize OBC) asDirector of Communications, where she implemented local andinternational communications strategies.
In 2008, she was appointed Director of Communications and SustainableDevelopment at the Wendel Investissement group (founder MarineWendel), where she was responsible for redefining and implementing theGroup’s corporate communications strategy with a view to repositioningthe Group’s institutional presence, in addition to leading the Group’sfinancial communications, facilitating communications throughout theGroup’s subsidiaries and managing communications in crisis situations.
In 2011, Anne-Lise Bapst joined HSBC France as Director ofCommunications, where her role involves defining and leading thedevelopment of the bank’s communications strategy in France andthat of its various segments (retail banking for private and BusinessCustomers, corporate and investment banking, private banking,insurance and asset management). Anne-Lise Bapst is also a memberof the Executive Committee of HSBC France and is a member of theBoard of Fondation pour l’Éducation.
WILLIAM BITANDate of birth: January 1, 1949Age (1) : 69Nationality: FrenchBusiness address: 44, rue Ferdinand, 75017 ParisDate of first appointment: 2009End of term as Director (4): 2018Number of Company shares held: 1Independence criteria (3): yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Member of the Board of Directors, Gfi Informatique (France)−
Chairman of the Audit and Internal Control Committee,−Gfi Informatique (France)
UNLISTED COMPANIES
None
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.General Meeting called to approve the annual financial statements for 2017.(4)
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MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Member of the Board of Directors of Adomos (France)−
UNLISTED COMPANIES
Manager of WHB Conseil (France)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Member of the Supervisory Board of Acheter-Louer.fr (France)−
EXPERTISE AND PROFESSIONAL EXPERIENCE
William Bitan began his career in 1968 in the Finance Department ofSEMA. In 1986, he was appointed as Head of Management Control atSEMA group Plc (a company incorporated under British law listed onthe London Stock Exchange and the Bourse de Paris), and then asChief Financial Officer, member of the Executive Committee andmember of the Board of Directors, in 1992. He was appointed as theGroup’s Chief Operating Officer in 2000. In 2001, he joined theCapgemini group, where he successively served as Head ofManagement Control, Chief Financial Officer, member of theExecutive Committee and member of the Board of Directors of anumber of the Group’s subsidiaries. Since 2005, he has worked as anindependent consultant for companies in the fields of mergers andacquisitions, coaching, financial information policy and theelaboration of strategic plans for international groups.
JEAN-PHILIPPE DUBOUSTDate of birth: March 26, 1958Age (1): 60Nationality: FrenchBusiness address: 145, boulevard Victor-Hugo, 93400 Saint-OuenDate of first appointment: Elected by the Central Works Council of Gfi Informatique ESU on January 20, 2017.End of term as Director representing the employees (2): 2020Number of Company shares held: zeroIndependence criteria (3): no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Director representing employees of Gfi Informatique (France)
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
None
UNLISTED COMPANIES
None
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Alternate member of the Gfi Progiciels Works Council.−
EXPERTISE AND PROFESSIONAL EXPERIENCE
Jean-Philippe Duboust is currently an IT Project Manager specialisingin development and application administration and has 35 years’experience in service companies (G-CAM, Sinorg, Gfi Progiciels),project development and production of software packages for thePublic Sector.
CAROLLE FOISSAUDDate of birth: September 2, 1966Age (1): 51Nationality: FrenchBusiness address: Bouygues Energies & Services – 19 rue Stephenson - CS 20 734 – 78 063 Saint-Quentin en Yvelines, FranceDate of first appointment: 2014End of term as Director (4): 2020Number of Company shares held: 1,287Independence criteria (3) : yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Member of the Board of Directors, Gfi Informatique (France)−
Member of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Independent director of Mersen−
UNLISTED COMPANIES
None
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
None
On the date of the General Meeting called to approve the annual financial statements.(1)Mr Duboust was elected to replace Jean-Luc Louis for the remainder of his term of office, in accordance with Article 11 of the Company's Articles of Association.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.General Meeting called to approve the annual financial statements for 2019.(4)
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EXPERTISE AND PROFESSIONAL EXPERIENCE
Carolle Foissaud, is a graduate of the École Polytechnique and theÉcole Nationale Supérieure des Télécommunications. She began hercareer in 1991 at Thomson as a Systems Research engineer workingwith Rafale aircraft equipment. She joined the “Combustible” BusinessUnit of Areva NP in 1995 where she became head of the Fuel RodDepartment. She then joined the Connectivity Division of the FCIgroup (a former subsidiary of the Areva group) in 2000 as Director ofIndustrialisation for the Automotive factory at Epernon (France). In2003, she joined the “Reactors” Business Unit and was appointedDirector of the Office of the BU Directorate and later Deputy Head ofEPR™ in China. In 2007, at Areva TA, she took up the post of Head ofthe Unit responsible for the design and manufacture of navalpropulsion nuclear reactors, subsequently also responsible for theirmaintenance. In July 2009, she became Director of the NuclearClean-up Business Unit and was responsible for its restructuring. InMarch 2012, she was appointed Director of Operations Safety,Security and Support and she is now a member of the ExecutiveManagement Board (EMB). She also sits on the Board of Directors ofMersen. On March 1, 2014, Carolle Foissaud was appointed Chairmanand General Manager of Areva TA and Director of Research for thePropulsion and Reactors Business Division.
ALEKH GREWALDate of birth: March 10, 1957Age (1): 61Nationality: Australian
Business address: Ramada Junction, Salwa Road, P.O. Box 76, Doha, QatarDate of appointment: General Meeting on March 24, 2016, effective April 11, 2016End of term as Director (2): 2019Number of Company shares held: zeroIndependence criteria (3): no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Member of the Board of Directors, Gfi Informatique (France)−
Member of the Audit and Internal Control Committee, Gfi−Informatique (France)
Member of the Appointments and Compensation Committee, Gfi−Informatique (France)
Member of the Investments Committee, Gfi Informatique (France)−
Member of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Director and General Manager of the Group and member of the−Executive Committee and Audit Committee of Mannai CorporationQPSC (Qatar)
UNLISTED COMPANIES
Alekh Grewal is also a Director of the following companies of theMannai Corporation group:
Gfi India Pvt. Ltd, Pune, (India)−
Cofely Besix Mannai Facilities Management Services WLL, (Qatar)−
AXIOM Telecom, Dubaï, (UAE)−
NEXThink SA, (Switzerland)−
Damas International LLC, Dubaï (UAE)−
Gfi informatique India (India)−
Member of the Audit Committee of Damas International LLC, Dubaï−(UAE)
Member of the Audit Committee of AXIOM Telecom, Dubaï (UAE)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
None
EXPERTISE AND PROFESSIONAL EXPERIENCE
Alekh Grewal’s first job was with Thomson McLintock (now KPMG) inLondon and spent eight years in the UK before immigrating toAustralia in 1987.
Alekh Grewal has over 25 years’ experience in industry, many of whichwere dedicated to the general management of medium to large sizedcompanies. The businesses included hire & sale, contracting, services,technology, trading & distribution, Consulting and manufacturing.
During this period, he gained significant expertise in all aspects ofexecutive management, particularly business start-ups, acquisitions,divestments and turnarounds.
Alekh Grewal spent 15 years in Australia, where he mainly worked forthe Australian multinational company James Hardie. He acted asGeneral Manager of several subsidiaries. His final position with JamesHardie Asia Pacific was as Chief Financial Officer.
He left Australia in 2001 to join KPMG India as its Chief OperatingOfficer, Partner and Deputy Chairman.
Alekh Grewal joined Mannai Corporation in November 2004 as ChiefFinancial Officer. In 2008 Alekh was promoted as Chief OperationsOfficer and in 2009 he was appointed as General Manager.
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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He has been very instrumental in acquisitions of Axiom Telecom, UAE,and Damas International LLC, UAE. Following the acquisition ofDamas LLC., in 2012, Alekh Grewal was promoted as Group GeneralManager. Alekh Grewal is also a member of Executive Committee,Audit Committee and Board member of Mannai Corporation.
Alekh Grewal is a member of the Institute of Chartered Accountantsin England and Wales and an Associate of the Institute of CharteredAccountants in Australia. He holds a university degree (withconcentration) and attended the Advanced Management Program atHarvard and the International Directors Programme at INSEAD. Heholds a Certificate in Corporate Governance from the INSEADBusiness School.
KEITH HIGLEYDate of birth: January 15, 1946Age (1): 72Nationality: EnglishBusiness address: Ramada Junction, Salwa Road, P.O. Box 76, Doha, QatarDate of first appointment: General Meeting on March 24, 2016, effective April 11, 2016End of term as Director (2): 2019Number of Company shares held: zeroIndependence criteria (3): no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Member of the Board of Directors, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Director of Mannai Corporation Q.P.S.C (Qatar)−
UNLISTED COMPANIES
Director of AXIOM Telecom, Dubai (UAE)−
Executive Chairman of Damas International LLC, Dubai, (UAE)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
President of Mansoft Systems Pvt. Ltd., (India)−
Director of Transfield Mannai Facilities Management Ltd−
EXPERTISE AND PROFESSIONAL EXPERIENCE
Following a period with Standard Chartered Bank in London andoverseas, Keith Higley spent the majority of his career with LloydsBank until joining Mannai Corporation in Qatar in 2001.
He held a succession of management positions in the Lloyds Bankgroup both in the United Kingdom and around the world includingCountry Manager UAE, General Manager Japan and Regional Directorof Lloyds Bank in the United Kingdom.
He was Managing Director of the two largest factoring and invoicediscounting companies in the United Kingdom and played a leadingrole in the UK finance industry including eight years on the Board ofthe Factors and Discounters Association, latterly as its Chairman.
Following his appointment as Chairman and General Manager inMannai, his remit was to concentrate resources on its core domesticbusiness to ensure that Mannai remained a market leader in Qatar’sfast growing economy. The Group was completely restructured overthe following four years into today’s thriving business focused ontrade and services. Keith Higley joined the Board of MannaiCorporation in 2005 and was subsequently appointed ManagingDirector.
Mannai Corporation was successfully listed on the Qatar Exchange in2007. Keith Higley retired as Managing Director of Mannai inDecember 2008 and continues to sit on the Board as a Non-ExecutiveDirector.
He is a Fellow of the Chartered Institute of Bankers (FICB), a Member ofthe Institute of Credit Management (MICM) and a Chartered Director(CDir) qualified by the Institute of Directors U.K. He also holds theCertificate in Corporate Governance from INSEAD Business School.
ITEFIN PARTICIPATIONS, AN UNLISTED COMPANY REPRESENTED BY GILLES RIGALBusiness Address: 1, rue Paul-Cézanne, 75008 ParisDate of first appointment: 2007End of term as Director of Itefin Participations (2) : 2019Number of company shares held by Itefin Participations: 4,265,572Independence criteria (3) : no
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Permanent representative of Itefin Participations on the Board of−Directors of Gfi Informatique (France)
Member of the Investments Committee, Gfi Informatique (France)−
Member of the Appointments and Compensation Committee, Gfi−Informatique (France)
Member of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Member of the Board of Directors of Altran Technologies SA−(France)
UNLISTED COMPANIES
Chairman and member of the Administrative Committee, Itefin−Participations SAS (France)
Member of the Board of Directors of Willink SAS (France)−
Chairman, Altrafin Participations SAS (France)−
Chairman of Altimus SAS (France)−
Member of the Board of Directors of Vocalcom SAS (France)−
Member of the Board of Directors of Apax Partners SAS (France)−and of Financière MidMarket SAS (France)
Member and Chairman of the Board of Directors, Magequam−(Luxembourg)
Legal representative of Altrafin Participations in Altitude SEP−(France)
Associate Manager, Sofaprig (France)−
Category-A Manager and Chairman of the Management Board of−Vista Lux SARL (Luxembourg)
Sole Manager of VistaLuxManagement SARL (Luxembourg)−
Chairman and Member of the Supervisory Board of InfoVista−Holding SAS (France)
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Acting Chairman of Altran Technologies from April 29, 2015 to−June 18, 2015
Member of the Board of Directors, Odyfinance (until 2012)−(Luxembourg)
Manager of Infofin Participations (until 2016) (Luxembourg)−
Chairman of Betax Participations SAS (until 2016) (France)−
Chairman of Alphax Participations SAS (until 2016) (France)−
Chairman of the Board of Directors, Willink SAS (until 2016)−(France)
EXPERTISE AND PROFESSIONAL EXPERIENCE
Gilles Rigal is Associate Director of Apax Partners. Gilles Rigal joinedApax Partners in 2001 as part of the Technologies & Telecom team.He began his career as an entrepreneur by participating in theestablishment of IGL, a software and IT services company that wassold to Thales five years later. He then joined McDonnell DouglasInformation Systems where he became a Head of Department, thenSystar, an international software company based in France where heserved successively as General Manager for France, for Europe and forglobal operations. In 1995, he joined BMC Software, the world’s fifthlargest software publisher, as General Manager for France andVice-President of Marketing and Indirect Sales for EMEA. Gilles Rigal isan ENSEEIHT Engineer (Toulouse) and the holder of a DEA in Roboticsfrom the University of Toulouse.
SABINE SCHIMELDate of birth: September 10, 1963Age (1): 54Nationality: FrenchBusiness address: 98 rue d’Assas 75006 ParisDate of first appointment: Shareholders General Meeting on March 24, 2016End of term as Director (2): 2019Number of Company shares held: 25Independence criteria (3): yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Member of the Board of Directors, Gfi Informatique (France)−
Member of the Audit and Internal Control Committee, Gfi−Informatique (France)
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
None
UNLISTED COMPANIES
CEO of ACMN Vie (SA) Lille−
Chairwoman of the Board of Directors of ACMN IARD (SA) Paris−
Chairwoman of the Board of Directors of Nord Europe Life−Luxembourg (SA), Luxembourg
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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Chairwoman of the Board of Directors of Nord Europe Life Belgium−(SA), Brussels
Chairwoman of the Executive Board of Nord Europe Assurances−(SA) Paris
Deputy Director of CP BK Reinsurance (SA) Luxembourg−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Chairwoman of Courtage Crédit Mutuel Nord Europe (SAS) Lille−(until December 2017)
Member of the Board of Director of Bpifrance Financement SA−(France) (until March 2016)
Chairwoman of the Supervisory Board of Innovation Capital SAS−(France) (until March 2016)
Chairman & General Manager of the publicly traded real estate firm−Silic SA (France) (until December 2013)
Member of the Board of Directors and General Manager of Qualium−Investissement SAS (France) (until September 2013)
Member of the Board of Directors of Egis SA (France) (until April−2013)
Member of the Board of Directors of Icade SA (France) (until April−2013)
Member of the Board of Directors of La Poste SA (France) (until−April 2013)
Member of the Board of Directors of Transdev group SA (France)−(until March 2013)
EXPERTISE AND PROFESSIONAL EXPERIENCE
Born in September 1963, a graduate of École Polytechnique andENSAE (École Nationale Supérieure de la Statistique et del’Administration Economique), and former Director of INSEE, SabineSchimel began her career in 1989 in the forecasting department of theFrench Ministry for the Economy, Finance and Industry.
In 1993, she joined CNP Assurances, where she successively heldvarious positions in technical and financial management. In 2000, sheheaded the management of financial partnerships and then themanagement of the performance of the international subsidiaries in2004. In 2009, she was appointed Head of Development, Subsidiariesand Equity Interests at the Caisse des Dépôts.
In March 2013, she joined Qualium Investissement, an AMF-accreditedasset management company belonging to the Caisse des Dépôtsgroup. Since June 2012, she has served as Chairwoman of the Board ofDirectors of Silic; she became Chairwoman-General Manager thereofin September 2013 and implemented the merger-absorption of Silicinto Icade.
In January 2014, Sabine Schimel was appointed Adviser to the GeneralManager of the Caisse des Dépôts.
On October 1, 2016, Sabine Schimel was appointed General Managerof ACMN Vie and Chairwoman of the Executive Board of Nord EuropeAssurances (NEA).
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List of the main positions held by the observers on GFI 4.2.2.Informatique's Board of Directors
HENRY CAPELLEDate of birth: April 15, 1983Age (1): 34Nationality: FrenchBusiness address: Apax Partners, 1 rue Paul-Cézanne, 75008 ParisDate of first appointment: Shareholders General Meeting on March 24, 2016Date of expiration of term as observer (2): 2019Independence criteria (3): no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
Member of the Investments Committee, Gfi Informatique (France)−
Member of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Non-voting member of the Board of Directors of Altran−Technologies (France)
UNLISTED COMPANIES
Member of the Supervisory Board of InfoVista Holding SAS (France)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
LISTED COMPANIES
None
UNLISTED COMPANIES
Representative of Apax Partners SA on the Supervisory Board of−Infopro Digital SAS (France)
EXPERTISE AND PROFESSIONAL EXPERIENCE
Henry Capelle began his career as an analyst in 2006 at theInvestment Banking Division of Goldman Sachs in London andsubsequently in Paris. He then became an Associate and member ofthe French Mergers & Acquisitions team where he worked on variousmerger, acquisition, LBO and IPO transactions involving major Frenchcompanies.
Henry Capelle joined Apax Partners in 2011 as a business manager inthe Technologies, Media & Telecoms team, then as Director ofInvestments in 2014 and as Director in 2016. Henry Capelle isresponsible for identifying and analysing investment opportunities,transaction execution and monitoring companies in the Telecoms,Media and Technology (TMT) sector portfolio. Henry Capelle has beeninvolved in monitoring the following companies: ALTRAN: globalleader in innovation and high-tech engineering consultancy, memberof the Board of Directors since 2014 (observer); Infovista: globalleader in performance management software for fixed and mobilenetworks, member of the Supervisory Board since 2016; InfoproDigital: leading B2B media group in France, member of the Board ofDirectors from 2013 to 2016; Arkadin: leader in B2B communicationservices.
PATRICK DE GIOVANNIDate of birth: March 4, 1945Age (1) : 73Nationality: FrenchBusiness address: 1, rue Paul-Cézanne, 75008 ParisDate of first appointment: 2007End of term as observer (2) : 2019Number of Company shares held: 1Independence criteria (3) : no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
Member of the Audit and Internal Control Committee, Gfi−Informatique (France)
UNLISTED COMPANIES
None
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
None
UNLISTED COMPANIES
Member of the Board of Directors of Apax Partners SA (France)−
General Manager and member of the Administrative Committee,−Itefin Participations SAS (France)
Chief Financial Officer, Financière Helios SAS (France)−
Chairman of the Supervisory Board, Impact Partenaires SAS−(France)
Manager, SC Plamet (France)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Member of the Executive Committee, Financière Helios SAS (until−2013) (France)
Member of the Board of Directors of Altamir Gérance SA (until−2014) (France)
Member of the Board of Directors of Albioma SA (until 2015)−(France)
EXPERTISE AND PROFESSIONAL EXPERIENCE
Patrick de Giovanni has been Associate Director of Apax Partners since1983. He has implemented a large number of investments in industrialenterprises and service companies and in all types of transactions(LBO, development capital, risk capital). He is the former Chairman ofFrance Invest, an investors’ association for growth. Patrick de Giovanniis a former student of the École Polytechnique.
SANTHOSH KRISHNAMOORTHYDate of birth: May 15, 1982Age (1): 34Nationality: IndianBusiness Address: Ramada Junction, Salwa Road, P.O. Box 76, Doha, QatarDate of first appointment: General Meeting on March 24, 2016, effective April 11, 2016Date of expiration of term as observer (2): 2019Independence criteria (3): no
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
Member of the Investments Committee, Gfi Informatique (France)−
Member of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
M&A Manager for the Mannai Corporation Q.P.S.C. group (United−Arab Emirates)
UNLISTED COMPANIES
Member of the Strategic Committee of AXIOM Telecom, Dubai−(United Arab Emirates)
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
None
EXPERTISE AND PROFESSIONAL EXPERIENCE
Santhosh Krishnamoorthy joined Mannai Corporation in June 2008.Santhosh Krishnamoorthy is experienced Mergers & Acquisitions andhas over 12 years in-depth knowledge of this field.
Before joining Mannai Corporation, Santhosh Krishnamoorthy spentsix years working for Emirates Investment and Development PSC, aprivate equity firm in Dubai. His duties concerned Buy & Sell in thefollowing sectors: Retail, Financial Services, Manufacturing,Information and Communication Technology, Construction &Associated Industries, Telecommunications, Education, Oil and Gas,and Automotive.
He has experience in executing and advising on deals with valuesranging between 150 million US dollars and 2 billion US dollars andhas structured complex cross-border merger and acquisition Big TicketTransactions, strategic joint ventures and partnerships, and publictakeover transactions in the region and overseas.
He holds a degree in Electrical and Electronics Engineering from Indiaand an MBA obtained in Toronto, Canada. He also attended theINSEAD business school’s management programme.
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2018.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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JEAN-PAUL LEPEYTREDate of birth: August 16, 1947Age (1): 70Nationality: FrenchBusiness address: 1, Square Moncey, 75009 Paris Chevalier de la Légion d’HonneurDate of first appointment: 2011End of term as Observer (2): 2020Number of Company shares held: 10Independence criteria (3) : yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
Member of the Investments Committee, Gfi Informatique (France)−
Chairman of the Strategic Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
None
UNLISTED COMPANIES
Chairman of JPL Consulting SAS (France)−
Director of MCSA SA (France)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
None
EXPERTISE AND PROFESSIONAL EXPERIENCE
Jean-Paul Lepeytre has spent the length of his career at the Thalesgroup where he has held a number of executive positions in the fieldsof Optronics (1972-1987), Missile Electronics (1987-1989), Avionics(1989-1999), Services and Security (1999-2008). In 2004, he becameDeputy General Manager and a member of the Executive Committeeof Thales, and then adviser to the Chairman, notably on riskmanagement. He joined the Board of Gfi Informatique as a non-votingmember in 2010 and then as a Director in 2011.
GÉRARD LONGUETDate of birth: February 24, 1946Age (1): 72Nationality: FrenchBusiness address: 56 rue de Châteaudun, 75009 ParisDate of first appointment: 2014End of term as observer (2) : 2020Independence criteria (3) : yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
UNLISTED COMPANIES
Member of the Board of Directors of SA Sea Invest (France)−
Member of the Board of Directors of Cockrill Maintenance &−Ingénierie SA (Belgium)
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
None
EXPERTISE AND PROFESSIONAL EXPERIENCE
Gérard Longuet, a former student of ENA (Ecole Nationaled’Administration) has held several government positions: DeputyMinister for Postal Services and Telecommunications (Chiracgovernment), Minister for Industry, Postal Services andTelecommunications (Balladur government) and Defence Minister(Fillon government). He was first elected MP for Meuse in 1978 andwas re-elected several times thereafter; Gérard Longuet is currentlySenator of the Meuse department, for which he has been the electedrepresentative since 2001.
Gérard Longuet has been a Director on the Boards of several ITengineering companies and has published various works.
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2019.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.
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HENRI MOULARDDate of birth: May 2, 1938Age (1): 79Nationality: FrenchBusiness address: 35, rue Mazarine, 75006 ParisDate of first appointment: 2003Date of expiration of term as observer (2): 2018Independence criteria (3): yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
Chairman of the Appointments and Compensation Committee, Gfi−Informatique (France)
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
Observer of the Board of Directors of Burelle SA (Paris)−
Member of the Appointments Committee of Burelle SA (Paris)−
Member of the Audit Committee of Burelle SA (Paris)−
UNLISTED COMPANIES
Chairman of HM et Associés SAS (France)−
Chairman of the Supervisory Board of Foncière Saint Gothard SAS−(France) and Compagnie Franco-Suisse (SAS) (France)
Member of the Board of Directors of Neuflize Vie (France) and of−Sogelym-Dixence (France)
Chairman of the Audit Committee and member of the−Compensation Committee, Neuflize Vie (France)
Member of the Board of Directors, Atlamed (Morocco)−
Non-voting member of the Board of Directors, Amundi Private−Equity Fund (France)
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
Chairman of Truffle Capital SAS (until November 2, 2016) (France)−
Non-voting member on the Board of Gerpro SAS (until 2015)−(France)
Member of the Supervisory Board and of the Appointments and−Compensation Committee, Unibail-Rodamco (until 2011) (France)
Member of the Board of Directors of Petra (until 2012) (Morocco)−
EXPERTISE AND PROFESSIONAL EXPERIENCE
A graduate of IEP Lyon and a holder of a DESS in Public law, Henri Moulardhas been responsible for various managerial positions at Lyonnaise deBanque and Banque La Hénin. He was appointed Secretary-General ofLyonnaise de Banque in 1977, then General Manager in 1984 andChairman in 1987. In 1992, he was appointed Chairman of the ExecutiveBoard of Banque de Neuflize and of the ABN Amro group in France.
In 2000, he took over the chairmanship of Generali France. Between2002 and 2016, he became Chairman of an independent private equitymanagement company (Truffle Capital). In 1998, he was appointed amember of the Board of Directors of Gfi Informatique. He has servedas a non-voting member of the Board of Directors of Gfi Informatiquesince 2003.
NICOLAS ROYDate of birth: July 7, 1968Age (1) :49Nationality: FrenchBusiness address: Orange France, 1 avenue Nelson Mandela, 94745 Arcueil Cedex FranceDate of first appointment: 2011End of term as Director (4): 2020Number of Company shares held: 1Independence criteria (3) : yes
MAIN POSITIONS HELD WITHIN THE GFI INFORMATIQUE GROUP
LISTED COMPANIES
Observer of the Board of Directors, Gfi Informatique (France)−
Member of the Investments Committee, Gfi Informatique (France)−
UNLISTED COMPANIES
None
MAIN POSITIONS HELD OUTSIDE THE GROUP
LISTED COMPANIES
None
UNLISTED COMPANIES
Director of Très Haut Débit Bretagne SA (France)−
Member of the Board of Directors, Indivision Maître SA (France)−
MAIN POSITIONS FOR WHICH THE TERM OF OFFICE EXPIRED OVER THE LAST FIVE YEARS
LISTED COMPANIES
None
UNLISTED COMPANIES
Member of the Board of Directors of France Telecom Lease SA−(France)
Chairman of the Board of Directors, EGT (France)−
On the date of the General Meeting called to approve the annual financial statements.(1)General Meeting called to approve the annual financial statements for 2017.(2)The criteria used to qualify an independent director are those set forth in the AFEP-MEDEF Code of Business Governance for Listed Companies. The situation of each (3)Director with regard to the independence criteria has been examined by the Board of Directors.General Meeting called to approve the annual financial statements for 2019.(4)
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Related-party agreements and commitments4
EXPERTISE AND PROFESSIONAL EXPERIENCE appointed Orange France Technical Director responsible forinformation systems and the network. He has served as Director ofA former student of the École Normale Supérieure (ENS) and athe Network Business Solutions Unit, part of Orange Businessgraduate of École Nationale Supérieure des Télécommunications,Services, from September 2010 to June 2014. He has acted asNicolas Roy began his career at France Telecom Marine in 1994 beforeTechnical Director of Networks and Services at Orange France sincejoining France Telecom Mobile in 2000. There, he worked on IT andJune 2014.networks in a number of management positions, and was later
RELATED-PARTY AGREEMENTS AND 4.3.COMMITMENTS
Agreements and commitments authorised during the 2017 4.3.1.financial year and since the reporting date
AGREEMENTS AND COMMITMENTS AUTHORISED DURING THE YEAR, NOT APPROVED BY THE SHAREHOLDERS MEETING
No agreements or commitments were approved during the financialyear.
AGREEMENTS AND COMMITMENTS AUTHORISED AFTER CLOSING
We have been advised of the following related party agreements andcommitments authorised by the Board since the reporting date:
amendment to the service provision agreement of October 15,•2007 with Auteuil Conseil, represented by Vincent Rouaix,Chairman of the Board of Directors and General Manager of GfiInformatique, and manager of Auteuil Conseil. The serviceprovision agreement covers marketing and commercial strategy,processes relating to the acquisition of IT services companies andhuman resources. The employee with responsibility for providingthe services under this agreement is Vincent Rouaix. The agreementwas entered into for a period of two years as from February 1, 2008,tacitly renewable every year, unless it is terminated one year beforethe end date.
In the interests of ensuring stable management and to draw onAuteuil Conseil’s expertise in relation to the development of theGroup, notably through external growth transactions, the Board ofDirectors meeting on February 21, 2018 authorised Gfi Informatiqueto sign three amendments to the service provision agreement ofOctober 15, 2007:
the amendment, signed March 16, 2018, with Auteuil Conseil, fixing•an additionnal fee of € 213,248 excluding taxes, for the servicesprovided by Auteuil Conseil (France) relaised in 2017, and related toperformance objectives of a maximum of € 400,000;
the second amendment to the service provision agreement with•Auteuil Conseil, approved by the Board of Directors on February 21,2018, on fixing an exceptional additional fee in the amount of€500,000 excluding taxes. This amendment, signed in March 16,2018 is pursuant to the amendment signed on December 23, 2015,which fixed an exceptional additional fee for a maximum amount of€2 million excluding taxes, conditional on the definitive completionof the Mannai Corporation Share Purchase transaction andquantitative objectives;
the third amendment, signed on March 16, 2018, on re-evaluating•the fees calculated on an annual basis to €860,000 excluding taxes,as from April 1, 2018.
During financial year 2017 the Company recognised a charge of€1,513,248 excluding taxes in respect of the amendments and theinitial agreement.
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Agreements and commitments approved by 4.3.2.the Shareholders General Meeting
AGREEMENTS AND COMMITMENTS APPROVED IN PRIOR YEARS
WHOSE IMPLEMENTATION CONTINUED DURING THE YEAR:
With Auteuil Conseil Company (France):•Several amendments to the service provision agreement with AuteuilConseil (France), mentioned in the special report of the statutoryauditors dated April 7, 2017 were approved by the ShareholdersGeneral Meeting .
the amendment signed on December 23, 2015 fixed Auteuil•Conseil’s annual fees at €800,000 excluding taxes as from January1, 2016;
the amendment signed on December 23, 2015 which provided for•an exceptional additional fee for a maximum amount of €2 millionexcluding taxes to be paid by Gfi Informatique, subject to (i) thedefinitive completion of the Mannai Corporation Share Purchasetransaction and (ii) the achievement of quantitative objectives.
The Board of directors of February 23, 2017 authorized the Companyto sign an amendment of Auteuil Conseil (France) service agreement.This amendment was signed on May 22, 2017, provided for additionalfees amounting to €316,666 in respect of the services performed byAuteuil Conseil (France) during financial year 2016. These additionalfees was paid during 2017.
WHICH WERE NOT IMPLEMENTED DURING THE YEAR:
With Group companies:•At its meeting on March 17, 2009, the Board of Directors authorisedthe amendment of all tax agreements with companies in the taxconsolidation scope in France to allow a systematic refund to theloss-making subsidiary of the tax saving that it provides to the Group.
No change has been made to the initial tax agreements.
No tax saving has been refunded by the Company for financial year2017.
With Vincent Rouaix, the Chairman of the Board of Directors and•General Manager of the Company:
At its meeting on March 1, 2013, the Board of Directors authorised theCompany to sign an amendment on December 18, 2007 to thenon-compete clause entered into with Vincent Rouaix on October 15,2007.
The amendment dated March 29, 2013 sets €850,000 euros as thelump sum to be paid by way of compensation for the non-competeagreement signed by Vincent Rouaix.
With Auteuil Conseil Company (France):•amendment to the service provision agreement of October 15, 2007with Auteuil Conseil, represented by Vincent Rouaix, Chairman of theBoard of Directors and General Manager of Gfi Informatique, andmanager of Auteuil Conseil. The service provision agreement coversmarketing and commercial strategy, processes relating to theacquisition of IT services companies and human resources. Theemployee with responsibility for providing the services under thisagreement is Vincent Rouaix. The agreement was entered into for aperiod of two years as from February 1, 2008, tacitly renewable everyyear, unless it is terminated one year before the end date.
Furthermore, the Shareholders General Meeting of June 28, 2016 tooknote of the Board of Directors’ authorisation to allocate anexceptional additional fee capped at 2 million euros, before taxes, tobe paid by Gfi Informatique in 2020, subject to the achievement ofthe performance objectives relating to the Group’s operating marginand net income, to be set at a later date.
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Compensation paid to corporate officers4
COMPENSATION PAID TO CORPORATE 4.4.OFFICERS
Compensation due or paid to the Company's executive corporate compensation package is based on the principles and criteria forofficer, Vincent Rouaix, in respect of the financial year just ended is determining, distributing and allocating compensation, approved by theproposed as the (8th resolution) for a vote of the shareholders. The Shareholders Meeting in its 13th resolution on May 22, 2017, as follows:
Table 1: Summary of the remuneration paid and options and shares granted to each executive officer
Vincent Rouaix: Chairman and General Manager 2017 2016
Remuneration due for the year (detailed in table 2) 39,950 39,950
Valuation of options allocated over the year (detailed in table 4) None None
Valuation of rights to performance shares allocated over the year (detailed in table 6) None None
TOTAL 39,950 39,950
Table 2: Summary of compensation paid to each executive officer
Vincent Rouaix: Chairman and General Manager
2017 2016
Due Paid Due Paid
Fixed remuneration 36,000 36,000 36,000 36,000
Variable remuneration None None None None
Multi-year variable remuneration None None None None
Exceptional remuneration None None None None
Directors’ fees None None None None
Benefits in kind(1) 3,950 3,950 3,950 3,950
TOTAL 39,950 39,950 39,950 39,950
Details of benefits in kind: vehicle.(1)
As indicated in 4.3.1 above, the Company has a service provision 2015 and 2016, and two amendments were signed in financial year 2017,agreement that indirectly links Vincent Rouaix to Gfi Informatique via on proposal of the Appointments and Compensation Committee andAuteuil Conseil. He is the manager of Auteuil Conseil and the sole approved by the Board of Directors. Said contract and its amendmentspartner. Four amendments to said contract were signed in financial years gave rise to the recognition in expenses of the following fees:
Recognition of fees, excluding taxes of Auteuil Conseil
2017 2016
Fees due in respect of the financial year (detailed in the table below) 1,513,248 1,116,666
Valuation of the multi-year variable fees paid during the financial year - -
TOTAL 1,513,248 1,116,666
Fees excluding tax due and paid to Auteuil Conseil
2017 2016
Due Paid Due Paid
Fixed Fees 800,000 800,000 800,000 800,000
Additional fees (detailed in table 3) 213,248 316,666 316,666 336,000
Exceptional fees (detailed in table 3) 500,000 - - -
TOTAL 1,513,248 1,116,666 1,116,666 1,136,000
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Table 3: Additional fees
Variable component in respect of the 2017 financial year approved ex ante by the Shareholders Meeting on May 22, 2017
Amount of variable componentdue in respect of 2017*
Maximum amount: 400,000 euros, excluding taxes, (50% quantitative criteria and 50% qualitative criteria)
213,248
Variable long-term component in respect of the 2017 financial year approved by the Shareholders Meeting on May 22, 2017
Maximum amount: 2 million euros, excluding taxes, subject to: definitive completion of the takeover of Mannai Corporation;•achieving the target net income for the year ended December 31, 2017; and•reaching the target operating margin for the year ended December 31, 2017.•
500,000
Paid once approved by the Shareholders General Meeting.*
In accordance with the provisions of the Sapin II law, a resolution on financial statements for the year ended December 31, 2017 and isthe principles for determining the compensation of corporate officers discussed in a supplementary report under Section 4.11 “Report of thewill be proposed to the General Meeting called to approve the Board of Directors on the compensation of executive officers”.
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Table 4: Directors’ fees and other compensation received by non-executive officers
Gross Directors’ fees paid Other remuneration paid
2017 2016 2017 2016
Anne-Lise Bapst 18,000 20,000 - -
William Bitan 40,000 40,000 - -
Henry Capelle - - - -
Patrick de Giovanni - - - -
Jean-Philippe Duboust 20,000
Carolle Foissaud 20,000 20,000 - -
Alekh Grewal - - - -
Keith Higley - - - -
Itefin Participations (Gilles Rigal) - - - -
Santhosh Krishnamoorthy - - - -
Jean-Paul Lepeytre (1) 40,000 40,000 - -
Gérard Longuet 18,000 20,000 - -
Jean-Luc Louis (2) - 20,000 - -
Henri Moulard 28,000 30,000 - -
Nicolas Roy 20,000 20,000 - -
Sabine Schimel 20,000 20,000 - -
TOTAL 224,000 230,000 NONE NONE
A service contract indirectly links Jean-Paul Lepeytre to Gfi Informatique via JPL Consulting, in which he is the Chairman and sole shareholder. This contract led to the invoicing (1)of fees for the year 2017 amounting to 52,000 euros excluding tax.Jean-Luc Louis, Director representing the employees, was replaced by Jean-Philippe Duboust on January 20, 2017.(2)
The Directors’ attendance fees paid to the Directors and the Observers are allocated by the Board of Directors according to their participation inthe meetings of the Board and of the specialised committees.
Table 5: Options to subscribe or purchase shares allocated to each executive officer during the year
None.
Table 6: Options to subscribe or purchase shares exercised during the year by each executive officer
None.
Table 7: Rights to performance shares allocated to each corporate officer during the year
None.
Table 8: Rights to shares subject to performance criteria, allocated to each corporate officer definitively during the year by the Board of Directors
None.
Table 9: Background of allocation of share subscription or purchase options
None.
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Compensation paid to corporate officers
4
Table 10: Background of allocation of rights to shares subject to performance criteria
General Meeting Authorisation 06.29.2007 05.19.2010 05.19.2010 05.22.2012 11.18.2015
Board of Directors 12.09.2009 03.10.2011 03.14.2012 03.01.2013 01.21.2016
Total number of rights granted
Of which to corporate officer: Vincent Rouaix
584,000
100,000
599,725
200,000
775,212
250,000
870,950
150,000
310,000
-
Date of final allocation 12.14.2011 06.07.2013 03.25.2014 03.26.2015 01. 21.2018
Date lock-in period ends 12. 09.2013 03.10.2015 03.14.2016 03. 01.2017 01. 21.2019
Performance criteria Yes Yes Yes Yes Yes
Number of shares allocated definitively
Of which to corporate officer: Vincent Rouaix
156,600
30,000 (1)
282,360
100,000 (1)
661,188
250,000 (1)
814,630
150,000 (1)
77,500
-
Number of shares cancelled or void 427,400 317,365 114,024 56,320 232,500
Number of shares not yet definitively allocated at 12.31.2016 - - - - 310,000
The obligation to hold shares until the end of the term of office as Chairman and General Manager of Gfi Informatique relates to 30% of the free shares, or 45,004 free shares.(1)
The Board of Directors, on January 21, 2016, using the powers grantedto it by the Shareholders’ General Meeting of November 18, 2015,decided to grant bonus share rights to certain Gfi Informatiqueemployees, with 310,000 bonus shares to be granted in total, tonamed beneficiaries designated by the Board of Directors.
The meeting of the Board of Directors held on February 21, 2018carried out the final allocation of 77,500 free shares, having verifiedthe beneficiaries' continued employment in the Company inaccordance with the requirements set out in section 4.10. “Board ofDirectors’ report on free shares”.
Table 11: Commitments made to executive officers
Name
Work contractSupplementary
pension plan
Compensation or advantages dueor likely to be due in the event of
termination or change of office
Compensationstemming from a
non-compete clause
Yes/No Yes/No Yes/No Yes/No
Vincent Rouaix Chairman and General Manager No No No Yes
On December 18, 2007, the Company signed a non-competeagreement with Vincent Rouaix. By way of payment for thenon-compete commitment entered into by Vincent Rouaix, thisagreement stipulates the payment to the latter, on the day his officeends, of a lump sum of 850,000 euros by amendments of March 29,2013.
It should be noted that the services contract of October 15, 2007,indirectly linking Vincent Rouaix to Gfi Informatique via AuteuilConseil, contains a tacit renewal clause with a one-year notice period.
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Other information on the corporate officers4
OTHER INFORMATION ON THE CORPORATE 4.5.OFFICERS
Table: Company shares purchased and sold by the corporate officers during the year
None.
OTHER INFORMATIONThe Company has received no statement from the corporate officersregarding:
the existence of a family link with another member of the Board of•Directors; or
the existence of a conflict of interest in the performance of their•work.
Moreover, the Company has received no statement from thecorporate officers reporting a criminal conviction or an administrativesanction that would prevent them from managing or running aCompany (a Société Anonyme), or any other conviction for fraud,bankruptcy, escrow or liquidation, or any official public incriminationor sanctions.
Equally, the Company has received no statement from them regardinga ban from serving as a member of the management, executive orsupervisory body of an issuer, or to participate in the businessmanagement or operations of an issuer during the last five years.
Article 6 of the directors’ charter annexed to the Board of Directors’internal regulations provides that the directors must constantlyensure that their personal situations do not place them in situations ofconflicts of interest with the Company. In the event of any doubt,they must notify the Board so that the latter can rule on the issue andrequest the regularisation of the situation, if necessary.
To the Company’s knowledge, there are no conflicts of interest in itsexecutive and management bodies.
RESTRICTIONS ON TRADING GFI INFORMATIQUE SHARESArticle 6 of the internal regulations of the Board of Directors, as wellas the guide to preventing insider misconduct adopted by the Board ofDirectors meeting of March 20, 2018, stipulate that directors mustnot:
use inside information in their possession, by making or trying to•make, for themselves or others, either directly or indirectly, one ormore acquisition or disposal transactions or by cancelling ormodifying one or more orders placed before they possessed theinside information on the relevant securities;
disclose inside information, whether inside or outside the Group,•outside the normal course of their work, occupation or duties, or forpurposes or activities other than those for which said information ispossessed;
trade in shares of other listed companies when, by virtue of their•office as a Director of the Gfi Informatique Group, they holdinformation that could affect share prices once such price is madepublic;
trade in Company shares during ‘negative window’ periods, which•will be specifically indicated to them.
Directors who are also members of the Board or managers ofinvestment funds (such as Sicavs or FCPs) and who hold GfiInformatique shares themselves, must not disclose or use anyinformation concerning the Gfi Informatique Group in the course oftheir duties. All the above rules also apply to any transactionsexecuted by the directors’ spouses, ascendants or descendants.
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Corporate governance
4
CORPORATE GOVERNANCE4.6.
The Board of Directors adopted a new set of internal regulations at itsmeeting of March 20, 2018. They may be obtained in hard copy fromthe corporate headquarters by any shareholder who requests them.
These internal regulations serve to establish the mode of operation ofthe Board of Directors, ensuring transparency among its participantsand the effectiveness of Gfi Informatique governance. They integrateprinciples of best practice already in use and define the composition,organisation and responsibilities of the various committees.
Privées (AFEP) and the Mouvement des Entreprises de France(MEDEF), as revised in November 2016.
Note that the Corporate Governance Code to which Gfi Informatiquevoluntarily refers is the Corporate Governance Code of listedcompanies published by the Association Française des Entreprises
The AFEP-MEDEF Code may be consulted on the MEDEF websitewww.medef.fr.
The Board determines the principles and rules governing allremuneration received by corporate officers, on the recommendationof the Appointments and Compensation Committee. The rulesgoverning the work of the Board of Directors and of its members, itsChairman, the non-voting members, the General Manager and whereapplicable the Deputy General Managers are set out in the Articles ofAssociation.
The Board of Directors
COMPOSITIONThe composition of the Board of Directors reflects its diversity policywith regards to criteria such as age, international representation,qualifications, professional experience and gender balance.
As of March 20, 2018, the Board of Directors is composed of sixteendirectors, including five men, three women, one director representingemployees, and seven observers.
Two representatives of the Gfi Informatique ESU's Central WorksCouncil also attend Board meetings.
The list of the members of the Company's Board of Directors is givenin paragraph 4.1 “New Governance model”.
EQUAL REPRESENTATION OF WOMEN AND MEN
The Copé-Zimmermann law of January 27, 2011 and the AFEP-MEDEFCode, which was revised in November 2016, provide that as of the endof the Shareholders' General Meeting of 2017, (i) 40% of the membersof the Board of Directors of a listed company must be women or (ii) ifthe Board has fewer than eight members, the gender differencecannot exceed two.
At December 31, 2017, three out of five directors were women(excluding the director representing employees), in line with themaximum authorised gender gap.
EVALUATION
and quality. The evaluation is based on a questionnaire which is sentto all directors.
The Board of Directors conducts an annual evaluation of the work andoperation of the Board and its Committees, focusing on preparation
This is an annual evaluation that looks at the composition of theBoard, the length of terms of office, frequency of renewal ofappointments, selection of members and independence criteria. It alsocovers the operation of the Board, meeting organisation, access toinformation, agendas and work, the amount and distribution ofattendance fees and evaluation. Similar questions are asked about theCommittees.
It gives the members the opportunity to freely express their opinionson the contributions made by their fellow members. They can alsodiscuss this issue individually with the Chairman of the Board. TheBoard of Directors voted unanimously to retain this model and not torequire a formal questionnaire to specifically evaluate thecontributions of each individual director.
The Board conducted a self-assessment in 2017, led by Henri Moulard,Chairman of the Appointments and Compensation Committee. Theconclusions were presented to the Board meeting on March 20, 2018.
Generally speaking, the members were very satisfied with thecomposition, organisation and operation of the Board and itscommittees. The availability of sector-specific studies to Boardmembers was particularly welcome.
Opportunities for improvement included broader access to certaindocuments (more frequent distribution of the notes of analystscovering the Group, more granular reporting on the work of thecommittees, etc.) and the need for more in-depth insight into someaspects of our competitive landscape.
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INDEPENDENT DIRECTORS
As at December 31, 2017, Gfi Informatique is a controlled companydue to its shareholding structure. Four out of eight members satisfythe independence criteria prescribed by AFEP-MEDEF (excluding thedirector representing the employees), bringing the number ofindependent directors on the Board to 50%, thus respecting the 1/3rd
percentage required by AFEP-MEDEF for controlled companies.
At its meeting of February 21, 2018, the Appointments andCompensation Committee analysed the situation of each directorwith regard to the independence criteria set out in the AFEP-MEDEFCorporate Governance Code and the Company’s internal regulationsto determine their independence.
The Board of Directors, on the proposal of the Appointments andCompensation Committee, decided to consider the following to beindependent directors: Carolle Foissaud, Anne-Lise Bapst, SabineSchimel, and William Bitan.
OBSERVERIn accordance with the Company’s Articles of Association, as amendedduring the General Meeting of May 22, 2017, the Company has eightobservers at most, each appointed for a three-year term by theOrdinary General Meeting. On March 20, 2018, the Board of Directorshad seven observers, Henry Capelle, Patrick de Giovanni, SanthoshKrishnamoorthy, Jean-Paul Lepeytre, Gérard Longuet, Henri Moulardand Nicolas Roy.
The Observers participate in the meetings of the Board of Directorsand are convened on the same terms as the directors. They may alsosit on the committees set up by the Board. They have nodecision-making power or right to vote. They are available to theBoard of Directors on a consultative basis to provide their opinion onany kind of issue submitted to them, notably as regards technical,commercial, administrative or financial matters.
FREQUENCY OF MEETINGSThe Board of Directors meets whenever the Company’s interests sorequire. Over the past financial year, the Board of Directors met fivetimes (average attendance rate of 93,75%).
Telephone meetings were also held in 2017 to discuss certain matters.
RELATIONSHIPS WITH THIRD PARTIESThe Board of Directors monitors the quality of the informationprovided to the shareholders and the financial markets. It reviews thepress releases issued by the Company to inform the markets of keyevents concerning the Gfi Informatique Group.
Pursuant to Article L. 225-238 of the French Commercial Code, theStatutory Auditors are summoned to the meetings of the Board ofDirectors where the latter reviews and approves the interim(half-yearly) and annual financial statements.
MAIN DECISIONS TAKENThe main decisions of the Board of Directors during 2017 were asfollows:
approval of the 2017 budget;•approval of the Company and consolidated financial statements at•December 31, 2016, approval of the forecast financial statementsand convening the General Meeting;
approval of the proposed partial contribution of assets by Gfi•Informatique, from the Business Solutions business line to itssubsidiary, Gfi Conseil et Intégration de Solutions;
review of the composition of the Board's specialised committees;•approval of the consolidated interim financial statements at•June 30, 2017, and approval of the forecast financial statements;
analysis of Gfi Informatique’s governance and application of•AFEP-MEDEF recommendations;
review of the succession plan for the Company's Chairman and•General Manager;
authorisation of the amendment to the credit agreement dated•October 9, 2015, to provide the Company with additional financing.
During the meetings devoted to approval of the financial statements,the Chairman of the Audit Committee reported to the Board on thevaluations made and accounting decisions taken.
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The General Manager
The General Manager is vested with the broadest powers to allow himor her to act on behalf of the Company in all circumstances, within thelimits of its corporate purpose, and with the powers granted to theShareholders’ General Meetings and the Board of Directors by the lawand the Articles of Association, in respect of the internal regulations.
In this respect, Article 3.2 of the Board of Directors’ internalregulation states that the following decisions require priorauthorisation from the Board of Directors:
acquisition of equity interests exceeding enterprise value of €10•million;
disposal of assets or equity interests exceeding 5% of the Group's•annual consolidated revenue;
acquistion of assets or equity interests beyond the Group's regular•activity;
strategic alliances or partnerships which might have a fundamental•impact for the Group (in that such a transaction might affect theGroup's strategy or modify its financial structure or scope ofactivity);
guarantees of Gfi Informatique's parent company exceeding the•delegation of authority granted by the General Manager.
Deputy General Managers
On the recommendation of the General Manager, the Board of Directors may appoint one or various natural persons to support his or her work.They are given the title of Deputy General Manager. The Board determines the extent and length of their mandate. There is no Deputy GeneralManager at this time.
Audit and Internal Control Committee
COMPOSITIONThe Audit and Internal Control Committee had four members as atMarch 28, 2018, as per section 4.1 “New Governance model”.
FUNCTIONSPursuant to Article 8.2 of the Internal Regulations of the Board ofDirectors, the Audit and Internal Control Committee is mainlyresponsible for:
monitoring the preparation of financial reporting, analysing and •expressing an opinion on the annual accounts, interim and quarterly•financial statements;
ensuring the relevance and consistency of the accounting methods•used for the preparation of the consolidated financial statementsand individual financial statements;
monitors changes in scope;•monitors the appointment of Statutory Auditors and the renewal of•their engagements, in addition to ensuring their independence andthus the rotation of the signatories.
The Audit and Internal Control Committee also verifies that theinternal data collection and control procedures are such as toguarantee the quality of the information provided.
The Audit and Internal Control Committee is responsible for:
ensuring the relevance and continuity of the accounting methods•used for the preparation of the consolidated and individual financialstatements;
verifies that the internal data collection and control procedures are•such as to guarantee the quality of the information provided;
to this end, it is responsible for preparing financial information, ensuring•the effectiveness of internal control systems and monitoring riskmanagement procedures, the legal audit of the financial statements bythe Statutory Auditors and the independence of said auditors;
notably, it reviews, the evaluation reports on goodwill and the level•of provisioning that is appropriate for different risks.
To perform its tasks, the Audit and Internal Control Committee musthold regular meetings with management and the staff responsible forpreparing the financial statements, internal control and riskmanagement, as well as with the Statutory Auditors responsible forauditing the financial statements. These meetings may take placewithout the presence of the Company’s General Management.
It regularly reports to the Board of Directors on the implementation ofits work as well as on any difficulty faced, in an expeditious manner.
WORK CARRIED OUT BY THE AUDIT COMMITTEEAfter meeting with the Statutory Auditors and the Group’s ChiefFinancial Officer, the Audit and Internal Control Committee:
reviewed the content of the Company and consolidated financial•statements for the year ended December 31, 2017;
reviewed the content of the consolidated financial statements at•June 30, 2017;
reviewed the evaluation tests of the different Group entities;•carried out a review of all risks.•
The committee met four times (attendance rate of 90%).
Telephone meetings were also held in 2017 to discuss certain matters.
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Appointments and Compensation Committee
COMPOSITIONThe Appointments and Compensation Committee comprised fourmembers as at March 20, 2018, as per 4.1 “New Governance model”.
FUNCTIONSThe Appointments and Compensation Committee’s mission is todevelop proposals for the Board of Directors regarding the entirecriteria for the appointment and remuneration of the members of theBoard of Directors, of the members of the Group’s Management, and ofthe executives of its international subsidiaries or of the Group’sBusiness Units, and to review all the candidatures to these positions.
Pursuant to AFEP-MEDEF recommendations, it also examines theindependent status of directors on an annual basis and monitors anysituations which may present a potential conflict of interest. TheAppointments and Compensation Committee makesrecommendations to the Board of Directors on the remuneration ofexecutive officers, puts forward the implementation of a free shareplan and budget for the directors' attendance fees and expresses anopinion on the exceptional remuneration of any of its members.
The Committee’s operating rules are contained in Article 9.2 of theInternal Regulations of the Board of Directors. In accordance with theprovisions of Article 10.3 of the AFEP-MEDEF Code, the Chairman andGeneral Manager will not attend meetings dealing with hisperformance and remuneration. The Appointments and CompensationCommittee reports to the Board of Directors on its work and finding.
WORK CARRIED OUT BY THE APPOINTMENTS AND COMPENSATION COMMITTEEThe Appointments and Compensation Committee examined thevariable remuneration criteria applicable to executive officers.Decisions made are detailed in section 4.4 “Compensation ofcorporate officers”.
During 2017, the Appointments and Compensation Committee:
examined the fixed and variable remuneration of the Group’s top•executives;
examined the independent status of directors;•proposed a succession plan for the Company's Chairman and•General Manager;
deliberated on the appointment of new members to the Board of•Directors and specialised committees;
deliberated on the renewal of directors’ terms of office;•deliberated on the amount of directors’ fees to be paid to the•members of the Board of Directors;
verified compliance of the governance rules with AFEP-MEDEF•recommendations.
The committee met three times (90% attendance rate).
Telephone meetings were also held in 2017 to discuss certain matters.
Investments Committee
COMPOSITION
The Investments Committee had seven members as at March 20,2018, as per section 4.1 “New Governance model”.
FUNCTIONSThe Investments Committee is given responsibility by the Board ofDirectors to examine and issue proposals on:
internal restructuring;•divestment transactions;•significant investment proposals (organic growth), previously•recommended by the Strategic Committee and approved by theBoard of Directors;
creation or equity investment transactions in any company, carried•out directly or indirectly;
significant operations/contracts likely to have an impact on the•Group’s strategy or earnings, or to modify its financial structure.
WORK CARRIED OUT BY THE INVESTMENTS COMMITTEEIn 2017, the Investments Committee reviewed among otheropportunities the following matters:
acquisition of Garsys (France);•acquisition of a business activity from Nokia;•
The committee met three times (90% attendance rate).
Telephone meetings were also held in 2017 to discuss certain matters.
Strategic Committee
COMPOSITION
The Strategic Committee had seven members as at March 20, 2018,as per 4.1 “New Governance model”.
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4
FUNCTIONSThe Strategic Committee’s mission is to analyse markets and come upwith proposals on the Group’s development, in particular as regardsits industrial and technological objectives.
WORK CARRIED OUT BY THE STRATEGIC COMMITTEE
draft a strategic plan and steer the Group’s development, andparticularly its business lines and sectors.
In 2017, the Strategic Committee met several times in response tochanging conditions in the IT products and services market, in order to
The committee met four times (attendance rate: 88%).
Shareholders General Meeting
CONDITIONS OF ACCESS TO GENERAL MEETINGSArticle 17 of the Articles of Association amended by the ShareholdersGeneral Meeting of May 22, 2017 – reproduced in section 7.1.8“General Meetings” – specifies the conditions of access to GeneralMeetings. This information can also be found in the notice ofShareholders’ Meetings published in the bulletin of obligatory legalannouncements (BALO) and on the Company’s websitewww.gfi.world.
VOTING RIGHTS AT SHAREHOLDERS GENERAL MEETINGS (ARTICLE 17 OF THE ARTICLES OF ASSOCIATION)All shares of Gfi Informatique carry one voting right per share. Fullypaid-up shares held in registered form for at least two years in thename of the same shareholder do not hold double voting rights.
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Application of the recommendations in the AFEP-MEDEF Code4
APPLICATION OF THE RECOMMENDATIONS IN 4.7.THE AFEP-MEDEF CODE
Under the terms of the “Apply or explain” rule set out in Article L. otherwise specifically stated in the Registration Document. In this225-37 of the French Commercial Code and in Article 27.1 of the respect, and in accordance with the above-mentioned provisions, theAFEP-MEDEF Code, which was reviewed in November 2016, the table below sets out the AFEP-MEDEF Code recommendations whichCompany considers that its practices comply with the the Company will not apply, as decided in its Board of Directorsrecommendations set forth in the AFEP-MEDEF Code, unless meeting of February 21, 2018, as well as the reasons for this decision.
AFEP-MEDEF Recommendations Gfi Informatique Justifications
Appointment of a Representative director
6.3 - Should the Board decide to assign specific duties to adirector relating to governance or shareholder relations,particularly in the capacity of a representative director orvice-Chairman, such duties and the resources and rights thatthey confer shall be set out by the internal regulations. It isrecommended that the Representative director is independent.
The Board of Directors deemed that it was not currently necessaryto appoint a representative director, as Mr Moulard, in his capacityof Chairman of the Appointments and Compensation Committee,performs these various duties (Evaluation of the Board ofDirectors, managing conflicts of interests etc.)
Composition of the Compensation Committee
17.1 - It is recommended that the Chairman of the committee isindependent, and that one member is an employee director.
The Board of Directors deemed that Mr Henri Moulard's skills weremost suited to the role of Chairman of the Appointments andCompensation Committee, and that his capacity as anindependent Observer should have no impact on his duties.
Having formed a committee which covers both Appointments andCompensation, i.e. a wider remit than that set out under theAFEP-MEDEF Recommendations, the decision has been made notto appoint a director representing the employees within thecommittee.
Proportion of independent directors on the Audit Committee
15.1 - The Audit Committee should be formed of a minimum oftwo thirds independent directors. Executive officers should notbe members of the committee.
The Board of Directors decided to prioritise directors with financialbackgrounds when forming the Audit Committee. 50% of itsmembers are independent.
SIGNIFICANT MATTERS LIKELY TO IMPACT 4.8.A TAKEOVER BID
Pursuant to Article L. 225-100-3 of the French Commercial Code, as far as the Company is aware, there are no significant matters likely to have animpact in the event of a takeover bid, with the exception of a syndicated credit agreement signed on October 9, 2015, which becomes renegotiablein the event of a change in control.
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List of financial authorisations granted as at December 31, 2017
4
LIST OF FINANCIAL AUTHORISATIONS 4.9.GRANTED AS AT DECEMBER 31, 2017
Currently valid financial authorisations:
Date of authorisation by the General Meeting Type of authorisation
Maximumnumber of
sharesauthorised
Limit perauthorisation
Duration ofauthorisation
Dateof expiry Exercised
11.18.2015
1st resolution
Free share plan 1,200,000 N/A 26 months 01.18.2018 Yes(cf. 3.5)
05.22.2017
14th resolution
Authorisation to be granted to theBoard of Directors to implement ashare buyback programme by stockmarket orders, buyback of blocks anddisposal of the shares thus acquired byany means. Possibility of reduction ofthe share capital by cancellation of therepurchased shares. Maximum unitpurchase price: 10 euros.
6,657,077 N/A 18 months 11.22.2018 Yes(cf. 3.5)
06.28.2016
15th resolution
Delegation of authority granted to theBoard of Directors to increase sharecapital by issuing ordinary sharesand/or transferable securities of theCompany that are convertible intoequity, with preferential subscriptionrights for shareholders, within the limitof a total nominal value of 22 millioneuros (1) for shares of capital, and a totalnominal value of 120 million euros (1)
for issuing debt securities that areconvertible to equity.
11,000,000 11 million sharesand 120 million
euros
26 months 08.28.2018 None
06.28.2016
16th resolution
Delegation of authority granted to theBoard of Directors to increase thenumber of shares to be issued inconnection with capital increases withpreferential subscription rights, up to amaximum of 15% of the initial issuance.
15% of the initialissuance
26 months 08.28.2018 None
06.28.2016
17th resolution
Delegation of authority granted to theBoard of Directors to decide to increasethe share capital in consideration ofcontributions in kind made to theCompany, by the issuance of Companyshares and/or transferable securitiesgiving access to the share capital.
10% of the sharecapital, to be
counted againstthe maximum
stated in the 15th
resolution
26 months 08.28.2018 None
06.28.2016
18th resolution
Delegation of authority granted to theBoard of Directors to increase the sharecapital by incorporating all or part ofthe reserves, earnings, premiums orother amounts for which incorporationinto the share capital would bepermitted.
23,000,000 46 million euros 26 months 08.28.2018 None
05.22.2017
4th resolution
Delegation of authority granted to theBoard of Directors to decide todecrease the Company’s share capitalby cancellation of treasury shares thatit may acquire in connection with theshare buyback programme.
6,657,077 the maximum of10% of the
Company’s sharecapital restated for
transactionsaffecting the share
capital after22.05.2017, by
24-month period.
18 months 11.22.2018 None
The same caps as apply to the delegations of authority authorised by the 16th and 17th resolutions of the General Meeting on June 28, 2016.(1)
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Board of Directors’ report on free shares4
BOARD OF DIRECTORS’ REPORT ON FREE 4.10.SHARES(ARTICLE L. 225-197-4 OF THE COMMERCIAL CODE)
Rights to free share grants: January 21, 2016 plan
On January 21, 2016, the Board of Directors, exercising the powersgranted by the Shareholders’ General Meeting on November 18, 2015,decided to allocate free shares of Gfi Informatique stock to certainemployees:
in total, 310,000 free shares to the beneficiaries designated by•name by the Board of Directors subject to meeting the followingconditions:
being an employee or manager of Gfi Informatique or one of its•subsidiaries at the date on which the recipients of the free shareswere named, specifically January 21, 2016, and at the date onwhich the free shares vest, specifically January 21, 2018;
a level of Group financial performance for financial year 2017 that•meets at least one of the following objectives:
either a Gfi Group Operating Margin on Revenue at least equal to•that budgeted for financial year 2017, i.e. 8.2%,
a net consolidated profit for FY2017 at least equal to that•budgeted for FY2017, or 43 million euros;
a vesting period of two years ending January 21, 2018•a one-year holding period (lock-up) in the form of registered•(name) shares, ending January 21, 2019.
2016 authorisation to award free shares
The meeting of the Board of Directors held on February 21, 2018 toapprove the profit/loss for the period ended December 31, 2017observed that the criteria set out in the Plan of January 21, 2016 havebeen partially met, due to exceptional and unforeseeable events.
Consequently, the Board of Directors decided to use its power toadjust the performance criteria originally intended as part of Plan2016.
final allocation of 77,500 free shares equating to 25% of the freeshares included in the Plan at the outset.
On a proposal of the Appointments and Compensation Committeeand having verified the beneficiaries' continued employment in theCompany as at 21 January 2018, the Board of Directors authorised the
As a result, the definitive attribution modalities of the 77,500 freeshares, will be realised by the Board of directors, on the treasuryshares or by a share capital increase.
The Chairman and General Manager is not a beneficiary of this freeshare grant.
The Board of Directors
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Supplementary report on the compensation of executive officers
4
SUPPLEMENTARY REPORT ON THE 4.11.COMPENSATION OF EXECUTIVE OFFICERS
AND ALLOCATING THE COMPONENTS OF THE TOTAL COMPENSATION AND BENEFITS APPROVAL OF THE PRINCIPLES AND THE CRITERIA FOR DETERMINING, DISTRIBUTING
THAT MAY BE ALLOCATED FOR 2018, FOR THE EXECUTIVE OFFICERS (EX ANTE VOTE AS PER THE LAW OF DECEMBER 9, 2016 CONCERNING TRANSPARENCY, THE FIGHT AGAINST CORRUPTION AND THE MODERNISATION OF THE ECONOMY, ALSO KNOWN AS THE “SAPIN 2” ACT)
Presentation of the 9th resolution
This section provides the report prepared pursuant to the provisions ofArticle L. 225-37-2 of the French Commercial Code, attached to thereport referred to in Articles L. 225-100 and L. 225-102 of the FrenchCommercial Code in order to provide information on the income andbusiness for the Company and the Gfi Informatique Group during theyear ended December 31, 2017. This report presents the principles andcriteria for determining, distributing and allocating the fixed, variable,and extraordinary components of the total compensation and benefitsof any kind for the executive officers of Gfi Informatique for 2018, asexplained in greater detail in Article R. 225-29-1 of the FrenchCommercial Code.
It was drafted by the Board of Directors at its meeting of February 21,2018, as proposed by the Appointments and CompensationCommittee at its meeting of February 20, 2018.
All of the components of the compensation for executive officers,whether existing or potential, are made public after adoption by theBoard of Directors.
In compliance with Article L. 225-37-2 of the French CommercialCode, the compensation policy as it is detailed in this report is subjectto the approval of the Annual Shareholders' Ordinary GeneralMeeting.
According to the current governance structure, the executive officer isVincent Rouaix, who is Chairman of the Board of Directors andGeneral Manager.
Principles and criteria for determining, 1.distributing and allocating the different components of compensation for the Chairman and General Manager as provided for in Article R. 225-29-1 of the French Commercial Code
profitable growth over the long term requires that we pay constantattention to each investment decision, and the profitability of everytransaction, while at the same time making continuous efforts overtime to support innovation, employee training, and the durability ofrelationships.
Historically, the compensation policy approved by the Board ofDirectors includes incentives that reflect the Group's strategy,oriented towards long-term sustainable growth, acting responsiblywith regards to all stakeholders. In a very competitive industry,
The compensation policy must be competitive. It is set by the Board ofDirectors and is subject to an annual review on the recommendationof the Appointments and Compensation Committee. It is based on theprinciples of exhaustiveness, balance, comparability, consistency andtransparency in line with performance, allowing us to optimally alignthe interests of the Company, its shareholders, its employees, andother stakeholders.
The Appointments and Compensation Committee ensures that all ofthe above principles are applied as part of its work and itsrecommendations to the Board of Directors, both for developing andimplementing the compensation policy in order to determine theamounts or values of compensation components or benefits.
In this context, the components considered for determining the totalcompensation and benefits of any kind referred to inArticle R. 225-29-1 of the French Commercial Code directly payableto the Chairman and General Manager or “in respect of agreementsconcluded, whether directly or through third parties”, are the following:
a short-term component made up of fixed compensation and an•annual bonus;
a long-term incentive component made up of performance shares•or a bonus entirely dependent on performance criteria and/orquantitative and qualitative criteria;
an exceptional compensation component;•other benefits, including:•
a personal protection insurance policy,•benefits in kind such as a company car,•compensation related to a non-compete commitment on•termination.
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REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE
Supplementary report on the compensation of executive officers4
On the recommendation of the Appointments and CompensationCommittee, the Board of Directors has set an objective to maintain aproportionate balance between the three components ofcompensation (fixed, variable, and long-term incentive components).This structure is part of the continuation of the policy implemented in2017. This means that, in order to strengthen the alignment ofinterests with the business and its shareholders, this compensationstructure, along with annual fixed compensation, is mainly based onthe balance between short-term and long-term performance asappreciated by the Board of Directors. In this approach, the greaterportion is subject to performance criteria.
The overall fixed portion is determined based on criteria specific to theperson concerned (including experience, seniority, and level ofresponsibility) and criteria linked to the sector of activity and theoverall business environment.
The annual variable portion is intended to provide an incentive toreach annual performance objectives that are set by the Board ofDirectors, consistent with the Company's strategy. More specifically,this multi-year variable compensation is based on achieving levels ofperformance that apply to personal and economic performanceobjectives, financial and non-financial objectives, quantitative andqualitative objectives, key indicators that represent overallperformance and the expected contribution of the Chairman &General Manager, in line with the implementation of the Company'sstrategy. Each year, during the first quarter, the Board of Directors,following the recommendations of the Appointments andCompensation Committee, confirms or determines these objectives,how they are weighted, and the related levels of performance. Theeconomic performance objectives, which are quantitative, are basedon financial indicators and are precisely set based on the budgetpreviously approved by the Board of Directors, and are generallysubject to thresholds of performance.
additional extraordinary fees to Auteuil Conseil based partly onperformance for 2017, and partly on performance for 2019.
The variable long-term component serves to build loyalty over time inorder to reinforce cohesion and involvement of the Chairman &General Manager while simultaneously favouring alignment of theCompany's interests with the interests of shareholders. For thisportion, as part of the friendly takeover by Mannai Corporation, theBoard of Directors, at its meeting of December 22, 2015 decided, asproposed by the Appointments and Compensation Committee, to pay
Lastly, the Board of Directors intends to reserve the right to decide onexceptional compensation exclusively in the case of transformativestrategic transactions being carried out for the Group, whose detailsand size fall outside of the objectives linked to regular business. In anyevent, should the Board of Directors make such a decision, (i) thepayment of this exceptional compensation will be subject to acase-by-case approval by the Board of Directors, on therecommendation of the Appointments and CompensationCommittee, depending on the event that justifies it, and the specificinvolvement of the interested party, (ii) this decision will be madepublic after it has been adopted by the Board of Directors, and (iii) itmust be justified, and the conditions leading to the completion of theevent must be specified.
Lastly, the Chairman & General Manager has the use of:
a company vehicle. He has the right to make claims for•reimbursement for expenses incurred while carrying out his duties,and has material means at his disposal in order to carry out hismandate;
a personal protection insurance policy applicable in France to Group•managerial staff under the same terms and conditions as otherrelevant staff.
He does not receive attendance fees, does not benefit from a specificsupplementary pension plan, and does not benefit from compensationor advantages due or liable to be due in the event of termination orchange of office. However, should he have agreed to a non-competecommitment in the event of termination, he will also receive paymentof a corresponding benefit.
Implementation for determining compensation 2.for 2018
This section presents the compensation and benefits of any kindreferred to in Article R. 225-29-1 of the French Commercial Code tobe paid to the Chairman and General Manager directly or “in respect ofagreements concluded, whether directly or through third parties”, nowapproved by the Board of Directors for 2018 at the publication date ofthe present registration document.
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REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE
Supplementary report on the compensation of executive officers
4
Vincent Rouaix
Annual fixed compensation The compensation policy defined by the Board of Directors provides for annual fixed compensation of up to a maximum of 36,000 euros.
The fixed compensation has therefore remained unchanged since 2015 and is extended for 2018.
Benefits in kind Company car under the terms of the rules defined by the Company: 3,950 euros.
Personal protection insurance Identical personal protection insurance to that provided for the Group's directors
Compensation related to a non-compete commitment on termination
850,000 euros for a 24-month commitment. The Board of Directors may renounce the application of this clause should the mandate be revoked due to gross misconduct; this decision to renounce is left to the Board of Directors of Gfi Informatique.
This commitment was the subject of authorisation from the Board of Directors and was approved by the General Meeting in accordance with the law.
Free share plan Subject to the decision of the Shareholders General Meeting called to vote on the financial statements for the financial year ended December 31, 2017, a new free share plan could be adopted. As a result, the Board of Directors of the Company reserves the right to award free shares to the Chairman and General Manager.
Components of compensation and benefits of any kind due or liable to be due to the director under the agreements concluded, directly or through third parties, as part of their mandate, with the Company in which the mandate is carried out, any company controlled by it, any company that controls it, or any company under the same control: the company concerned is Auteuil Conseil
Annual fixed component• The amount of annual fixed compensation has been reassessed for 2018. This reassessment was subject to prior authorisation from the Board of Directors and is submitted for approval to the annual General Meeting in 2018 in compliance with Article L. 225-38 of the French Commercial Code.
Therefore fixed compensation is 860,000 euros excluding taxes.
Annual variable component• The variable component can be a maximum of 800,000 euros excluding taxes, and is made up of 90% based on quantitative criteria, and 10% on non-financial criteria linked to the Group’s strategic development plan.
Long-term variable component• Note: Long-term variable component implemented in 2015 at the moment of the friendly takeover by Mannai Corporation.
This long-term variable component of a maximum of 2 million euros excluding taxes, which is subject to achieving the quantitative criteria, was decided by the Board of Directors and approved by the General Meeting on June 28, 2016. This exceptional additional compensation, limited to 2 million euros excluding taxes, is to be paid by the Company in 2020, subject to achieving the performance targets linked to the Group’s operating margin and net income for the financial year ending December 31, 2019.
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REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE4
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5CONSOLIDATEDFINANCIAL
STATEMENTS
CONSOLIDATED FINANCIAL 5.1.STATEMENTS 128
NOTES TO THE CONSOLIDATED 5.2.FINANCIAL STATEMENTS 133
Accounting rules and principlesNote 1 133Standards used1.1 133Basis of preparation1.2 134Presentation1.3 134
Consolidation scopeNote 2 134Accounting policy as to consolidated companies2.1 134Changes in the consolidation scope2.2 135Impact of changes in consolidation scope2.3 135Off balance sheet commitments related to changes 2.4in consolidation scope 136
Revenue and trade receivablesNote 3 137Revenue3.1 137Segment reporting3.2 137Trade receivables3.3 138
Payroll and benefits expensesNote 4 139Headcount4.1 139Employee benefits4.2 139Retirement benefit plans4.3 139
Operating incomeNote 5 140Operating margin by segment5.1 140Net operating income5.2 141Off balance sheet commitments related to operating 5.3activities 142
Financing and financial instrumentsNote 6 142Debt6.1 142Interest rate risk on cash flows6.2 144Debt-to-equity ratio6.3 145Liquidity risk6.4 146Financial income and expense6.5 146Off balance sheet commitments relating 6.6to the Company’s financing activities 147
Income tax expenseNote 7 147Reconciliation of theoretical and actual income tax 7.1expense 148Deferred taxes7.2 148Carryable tax losses7.3 149
Intangible assets and property, Note 8plant and equipment 150Main assets by segment8.1 150Goodwill8.2 150Other intangible assets8.3 153Property, plant and equipment8.4 154
Shareholders’ equity and earnings per shareNote 9 155Changes in share capital9.1 155Average number of shares and earnings per share9.2 156Treasury shares transactions9.3 156Dividends and appropriation of income for the period9.4 156Free shares plans9.5 156Related parties disclosures9.6 157
Other provisions and contingent liabilitiesNote 10 157Non-current provisions10.1 157Current provisions10.2 158Off balance sheet commitments related to risks 10.3and disputes 158
Other non-current assetsNote 11 158Non-current financial assets11.1 158Other non-current assets11.2 159
Current assets and liabilitiesNote 12 159Other receivables12.1 159Tax and social security contingencies12.2 159Other current liabilities12.3 160
Financial instrumentsNote 13 160Financial instruments recorded on the balance sheet13.1 160Income statement effect of financial instruments13.2 161Maturity13.3 162Objectives and financial risk management policy13.4 162
Cash flow statementNote 14 163
Compensation paid to members of the Board Note 15of Directors and senior management 164
Subsequent events to the closing dateNote 16 164
List of consolidated companiesNote 18 166
STATUTORY AUDITORS’ REPORT ON 5.3.THE CONSOLIDATED FINANCIAL STATEMENTS 169
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CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements5
CONSOLIDATED FINANCIAL STATEMENTS5.1.
Consolidated comprehensive income statement5.1.1.
Net income
(in thousands of euros) 2017 2016
Revenue (note 3) 1,131,874 1,015,415
Staff costs (note 4) (787,370) (708,921)
Purchases and external charges (243,683) (211,602)
Taxes (other than corporation tax) (16,496) (16,095)
Depreciation (other than goodwill) (17,978) (16,678)
Other underlying operating income/(expenses) 2,647 (386)
OPERATING MARGIN 68,994 61,733
Operating margin % 6.1% 6.1%
Amortisation of intangibles identified on acquisitions (2,421) (1,873)
Restructuring costs (note 5) (7,500) (5,601)
Gains (losses) on disposals (note 5) (36) 981
Goodwill impairment losses (note 8) - -
Other operating income and expenses (note 5) (3,218) (4,100)
OPERATING PROFIT 55,819 51,140
Income from cash and cash equivalents 58 110
Cost of gross debt (3,921) (3,302)
COST OF NET DEBT (NOTE 6) (3,863) (3,192)
Other financial income (expenses) (note 6) (1,306) (1,143)
Income tax expense (note 7) (13,341) (14,696)
NET CONSOLIDATED INCOME FOR THE PERIOD 37,309 32,109
o/w attributable to owners of the Group 37,124 32,222
o/w non-controlling interests 185 (113)
Basic earnings per share (in euros) (note 9) 0.56 0.49
Diluted earnings per share (in euros) (note 9) 0.56 0.49
Other comprehensive income
(in thousands of euros) 2017 2016
NET CONSOLIDATED INCOME FOR THE PERIOD 37,309 32,109
Items that may be reclassified as net income
Recognised translation differences 95 386
Changes in the value of hedging instruments 23 (71)
Other comprehensive income
Changes in actuarial differences (4,069) (2,577)
Deferred taxes on changes in actuarial gains and losses 1,347 309
RECOGNISED COMPREHENSIVE INCOME (2,604) (1,953)
COMPREHENSIVE INCOME 34,705 30,156
o/w attributable to owners of the Group 34,520 30,269
o/w non-controlling interests 185 (113)
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Consolidated financial statements
5
Consolidated cash flow statement5.1.2.
(in thousands of euros) 2017 2016
Consolidated net income 37,309 32,109
Net depreciation, amortisation and other non-cash items 19,142 18,522
Fair value adjustments 441 588
Gains or losses on asset disposals (598) (1,033)
Dilution gain or losses - -
Operating cash flows after cost of net debt and income tax expense 56,294 50,186
Cost of net debt (adjusted for changes in fair value) 3,608 2,960
Cost of swaps 39 46
Tax charge 13,341 14,696
Operating cash flows before cost of net debt and income tax expense 73,282 67,888
Tax paid (14,089) (12,135)
- Change in working capital requirements from operations (note 14) (35,496) (22,195)
I- NET CASH FLOW FROM OPERATING ACTIVITIES 23,697 33,558
- Disbursements for acquisitions of intangible assets (22,946) (23,974)
- Disbursements for acquisition of property, plant and equipment (11,891) (11,488)
+ Proceeds on disposals of intangible assets and property, plant and equipment 6,658 2,906
- Disbursements for acquisition of financial investments (479) (198)
+/- Impact of changes in consolidation scope (note 14) (15,158) (49,198)
+/- Changes in loans and advances (2,627) (1,843)
II- NET CASH FLOW FROM/(USED IN) INVESTING ACTIVITIES (46,443) (83,795)
+ Proceeds on issue of shares
Subscribed to by the equity holders of the parent• - 2,250
Subscribed to by the non-controlling interests of consolidated subsidiaries• 178 -
+/- Repurchases and sales of treasury shares (67) 150
- Dividends paid during the period
to the equity holders of the parent• (9,963) (9,875)
to the non-controlling interests of consolidated subsidiaries• - (234)
+ New borrowings (note 6) 10,270 50,014
- Repayment of borrowings (note 6) (15,422) (6,452)
+/- Change in factoring drawdowns 21,265 1,404
- Interest paid (3,590) (3,004)
- Cost of swaps (38) (46)
III- NET CASH FLOW FROM (USED IN) FINANCING ACTIVITIES 2,633 34,207
+/- Effect of changes in foreign exchange rates (404) 72
CHANGE IN CASH AND CASH EQUIVALENTS (20,517) (15,958)
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CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements5
CHANGE IN NET FINANCIAL DEBT
(in thousands of euros) 12.31.2016 Variation 12.31.2017
Marketable securities 5,308 (5,163) 145
Cash at bank and in hand 23,617 5,913 29,530
Bank overdrafts (11,750) (21,267) (33,017)
NET CASH AND CASH EQUIVALENTS 17,175 (20,517) (3,342)
Non-current borrowings (84,533) 3,180 (81,353)
Current borrowings (excluding bank overdrafts) (33,908) (19,553) (53,461)
GROSS BORROWINGS (118,441) (16,373) (134,814)
NET BORROWINGS (101,266) (36,890) (138,156)
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CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements
5
Consolidated statement of financial position5.1.3.
ASSETS
(in thousands of euros) 12.31.2017 12.31.2016
Goodwill (note 8) 283,126 280,935
Other intangible assets (note 8) 81,272 77,438
Property, plant and equipment (note 8) 21,315 19,342
Non-current financial assets (note 11) 14,909 11,907
Deferred tax assets (note 7) 8,068 5,070
Other non-current assets (note 11) 24,717 21,780
NON-CURRENT ASSETS 433,407 416,472
Goods purchased for resale 624 779
Trade receivables (note 3) 430,366 397,300
Other receivables (note 12) 39,729 36,069
Prepaid expenses 15,068 16,165
Cash and cash equivalents (note 14) 29,675 28,925
CURRENT ASSETS 515,462 479,238
TOTAL ASSETS 948,869 895,710
LIABILITIES
(in thousands of euros) 12.31.2017 12.31.2016
Share capital (note 9) 133,142 133,142
Additional paid-in capital 64,869 64,869
Consolidated reserves 129,839 105,110
Other (6,186) (3,435)
Translation reserve (596) 891
Equity attributable to the Group 321,068 300,577
Non-controlling interests 850 31
EQUITY (note 9) 321,918 300,608
Non-current borrowings (note 6) 81,353 84,533
Deferred tax liabilities (note 7) 2,217 2,827
Non-current provisions (note 10) 45,497 39,096
Other non-current financial liabilities (note 2) 2,929 9,085
NON-CURRENT LIABILITIES 131,996 135,541
Current provisions (note 10) 5,310 6,233
Current borrowings (note 6) 86,478 45,658
Current financial liabilities (note 6) 60 83
Other current financial liabilities (note 2) 1,832 15,987
Trade payables 90,616 87,846
Tax and social security liabilities (note 12) 228,558 219,954
Other current liabilities (note 12) 13,807 15,122
Deferred income 68,294 68,678
CURRENT LIABILITIES 494,955 459,561
TOTAL EQUITY AND LIABILITIES 948,869 895,710
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CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements5
Change in consolidated shareholders’ equity5.1.4.
(in thousands of euros)Share
capital
Additionalpaid-incapital
Conso-lidated
reservesTreasury
shares
Recog-nised
incomeand
expenseTranslation
reserve
Equityattributable
to theGroup
Non-controlling
interestsTotal
equity
POSITION AT 12.31.2015 131,961 63,800 81,678 (1,130) (116) 518 276,711 122 276,833
2016 net income - - 32,222 - - - 32,222 (113) 32,109
Recognised income (expense) - - - - (2,339) 386 (1,953) - (1,953)
2016 comprehensive income - - 32,222 - (2,339) 386 30,269 (113) 30,156
Dividends paid - - (9,875) - - - (9,875) - (9,875)
Treasury shares - - (19) 150 - - 131 - 131
Valuation of share-based payments - - 1,104 - - - 1,104 - 1,104
Capital increase 1,181 1,069 - - - 2,250 - 2,250
Change in consolidation scope - - - - - - - 18 18
Change in translation reserve - - - - - (13) (13) 4 (9)
POSITION AT 12.31.2016 133,142 64,869 105,110 (980) (2,455) 891 300,577 31 300,608
2017 net income - - 37,124 - - - 37,124 185 37,309
Recognised income (expense) - - - - (2,699) 95 (2,604) - (2,604)
2017 comprehensive income - - 37,124 - (2,699) 95 34,520 185 34,705
Dividends paid - - (9,963) - - - (9,963) - (9,963)
Treasury shares - - (3) (52) - - (55) - (55)
Valuation of share-based payments - - (536) - - - (536) - (536)
Capital increase - - - - - - - 163 163
Change in consolidation scope - - (1,893) - - - (1,893) 479 (1,414)
Change in translation reserve - - - - - (1,594) (1,594) - (1,594)
POSITION AT 12.31.2017 133,142 64,869 129,839 (1,032) (5,154) (608) 321,056 858 321,914
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
NOTES TO THE CONSOLIDATED 5.2.FINANCIAL STATEMENTS
Accounting rules and principlesNOTE 1
Gfi Informatique SA is the parent company of an international Groupproviding IT services.
Gfi Informatique provides its structured know-how to customers in sixareas: Consulting, Business Solutions, Application Services,Infrastructure Services & Outsourcing, Software and SAP.
On February 21, 2018 and March 20, 2018, the Board of Directorsexamined and approved the consolidated financial statements of GfiInformatique. These financial statements will only be definitive aftertheir approval by the shareholders’ Annual General Meeting.
Significant accounting methods used for the preparation of theconsolidated financial statements are described hereunder. Unlessindicated otherwise, these methods were applied consistently in allthe financial periods for which information is given in thesestatements.
STANDARDS USED1.1The accounting principles applied in preparing the consolidatedfinancial statements are in compliance with IFRS as they were adoptedby the European Union on December 31, 2017 and can be consultedat: https://ec.europa.eu/info/law/international-accounting-standards-regulation-ec-no-1606-2002/law-details_fr
These accounting principles are in line with those used in preparing theconsolidated financial statements for the financial year endedDecember 31, 2016, except for the adoption of the following newstandards and amendments:
Amendment to IAS 12 – Recognition of Deferred Tax Assets for•Unrealised Losses,
Amendment to IAS 7 – Disclosure Initiative.•The Group decided against the early application of the followingstandards, interpretations and amendments whose application wasnot mandatory for the financial year beginning January 1, 2017:
adopted by the European Union and not yet applicable:•IFRS 4 – Insurance contracts: Application of the standard,•IFRS 9 – Financial instruments,•IFRS 10 and IAS 28 – Sales or contributions of assets between an•Investor and an Associate or Joint Venture (date of initialapplication postponed by the IASB to a date to be determined),
IFRS 15 - Revenue from Contracts with Customers,•IFRS 15 – Clarifications,•IFRS 16 – Leases,•IAS 40 – Transfers of Investment Property,•IFRS annual improvements (cycles 2015-2017);•
not yet adopted by the European Union:•IFRS 12 – Disclosure of Interests in Other Entities.•
The IASB has also published the following Standards for which GfiInformatique has identified no material impact on the Group'sconsolidated financial statements:
IFRS 2 – Classification and Measurement of Share-based Payment•Transactions,
IFRS 17 – Insurance Contracts,•IFRIC 22 – Foreign Currency Transactions and Advance•Consideration,
IFRIC 23 – Uncertainty over Income Tax Treatments,•IAS 28 – Investments in Associates and Joint Ventures: Fair value•measurement.
The Group is currently in the process of determining the potentialimpact of these new standards on its consolidated financialstatements. The Group believes that, at this stage of the analysis, theimpacts of applying these standards cannot be known with sufficientcertainty.
Application of IFRS 15 - Revenue recognition
In May 2014, the IASB published IFRS 15 "Revenue from Contractswith Customers" along with clarifications in April 2016. The standardrequires a single 5-stage model for revenue recognition, based onthe transfer of control over the performance obligations identified aspart of customer contracts.
As the application is mandatory at January 1, 2018, the Groupconducted, in 2017, an internal project with the following objectives:
the identification of the main differences between the current•standard (IAS 18 and IAS 11) and IFRS 15,
the collection of the necessary information to the assessment of•the impacts on the consolidated financial statements and,
the implementation of the method for applying the standard•using the modified retrospective approach, adopted by theGroup.
Following this project, the Group identified the following subjects asthe main restatements resulting from the application of IFRS 15:
fixed-price Build and Run contracts: the identified issue concerned•the existence of contract start-up costs that may not correspond tothe definition of a separate performance obligation in certain cases.
The application of IFRS 15 results in:
the revenue recognition up only to the level of services rendered•during this start-up phase,
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
the capitalization of the cost incurred for the execution of this•contract fulfilling the requirements of the standard (directlyrelated to a contract, procuring to the entity new or increasedresources that will be used to meet the service obligations in thefuture, and that Gfi Informatique expects to recover). The assetwill be written of over the average duration of the contract.
Based on our estimates, these different restatements will lead to adecrease in equity at December 31, 2017 of approximately €7million, net of deferred tax.
Software: the identified issue concerned the identification of the•performance obligations, and specifically the distinction betweenlicence and integration.
The application of IFRS 15 results in:
the recognition of a single performance obligation in the case of•the sale and integration of software considered as complex. Therevenue from this performance obligation will be recognisedovertime.
Based on our estimates, this restatement will lead to a decrease inequity at December 31, 2017 of approximately €7 million, net ofdeferred tax.
BASIS OF PREPARATION1.2The financial statements are presented in euros rounded to thenearest thousand.
Estimates as well as critical judgements must be used in preparing theconsolidated financial statements in accordance with InternationalFinancial Reporting Standards (IFRS). Management must also use itsjudgement in the application of Group accounting methods (seeValuation methods below).
The areas in which assumptions and estimates may have a materialimpact on the consolidated financial statements notably include themeasurement of retirement benefit plans, testing of goodwill forimpairment, provisions for liabilities and charges and therecoverability of deferred tax.
PRESENTATION1.3Assets linked to the Group’s normal operating cycle, assets held forsale within 12 months of the balance sheet date and available cashand marketable securities are reported under current assets. All otherassets are reported under non-current assets.
Liabilities falling due within the Group’s normal operating cycle orwithin 12 months of the balance sheet date are reported under currentliabilities.
Consolidation scopeNOTE 2
ACCOUNTING POLICY AS TO CONSOLIDATED COMPANIES2.1
CONSOLIDATION PRINCIPLES
The consolidated financial statements incorporate the financialstatements of Gfi Informatique and its subsidiaries. Subsidiaries areconsolidated as from the date of acquisition, which corresponds tothe date on which the Group took control of them and until suchtime as control ceases.
Control is achieved when Gfi Informatique has the power to governthe financial and operating policies of an entity so as to obtainbenefits from its activities.
Intercompany transactions are eliminated on consolidation.
Valuation methods applied by Group companies are aligned withthose used by the Group.
Non-controlling interests represent the portion of profit or loss andnet assets that are not held by the Group. They are presented inequity in the consolidated balance sheet, separately from the parentshareholders' equity.
CLOSING DATE OF THE FINANCIAL STATEMENTS
Companies included in the consolidation scope were consolidated onthe basis of the financial statements for the same reference period asthe parent company.
FOREIGN CURRENCY TRANSLATION METHODS
Conversion of the financial statements in foreign currency
The Group’s consolidated financial statements are prepared in euros.
The operating currency of each Group entity is the currency of theeconomic environment in which the entity operates.
All the assets and liabilities of consolidated entities whose functionalcurrency is not the euro are converted at year-end into euros, which isthe Group’s reporting currency. Income and expense items areconverted at the average exchange rates for the past financial year.Resulting exchange rate differences and those arising from theapplication of closing exchange rates to the subsidiaries’ openingequity are recognised under Translation reserve in consolidated equity.
Exchange rate differences from converting net investment in foreignsubsidiaries are recorded under equity.
When a foreign entity is sold, these exchange rate differences areincorporated in the income statement as part of the profit or lossfrom the sale.
Conversion of foreign currency transactions
Transactions in currencies other than the entity’s functional currencyare recorded at the rates of exchange prevailing on the dates of thetransactions. At each balance sheet date, monetary itemsdenominated in foreign currencies are retranslated at the ratesprevailing on the balance sheet date. All exchange differences arerecognised to profit or loss except for exchange differences on itemsthat, in substance, form part of the net investment in foreignoperations that are recognised directly to equity.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
CHANGES IN THE CONSOLIDATION SCOPE2.2
Business combinations
The Group did not carry out any acquisition that falls within the scopeof application of IFRS 3.
CHANGES IN OWNERSHIP INTERESTS
On June 14, 2017, the Group acquired, via Gfi Informatique SA, a 30%stake in the subsidiaries Somafor RCI and Somafor France from aminority shareholder individual. The Group now owns all the shares ofboth of these companies.
On March 1, 2017, the subsidiary Gfi Conseil et Intégration de Solutions(CIS) completed a capital increase in favour of some managers, enablingthem to become minority shareholders with a 30% stake.
On August 4, 2017, the subsidiary Roffmex Consulting S.A. de C.V.completed a capital increase in favour of its minority shareholderInndot S.A. de C.V. which now holds a 45% stake compared with itsprevious 30% stake in the Company.
MERGERS AND COMPANY NAME CHANGES
To simplify and streamline its organisation chart, the Group hascarried out the following mergers:
Efron Consulting, a Spanish subsidiary, absorbed by its parent company,•Gfi PSF, a Luxembourg subsidiary, absorbed by Gfi Infrastructures•Services.
The following Company name changes took place during the financialyear:
AST to Roff España Independientes SA,•Gfi Infrastructure Services to Gfi PSF,•Efromex to Gfi informatica Mexico S.A. de C.V.•
IMPACT OF CHANGES IN CONSOLIDATION SCOPE2.3
Other current and non-current financial liabilities
(in thousands of euros) 12.31.2017 12.31.2016
Other non-current financial liabilities 2,929 9,085
Other current financial liabilities 1,832 15,987
TOTAL 4,761 25,072
(in thousands of euros) Debt maturities
12.31.2017 2018 2019 2020 2021
Other non-current financial liabilities 2,929 - 2,929 - -
Other current financial liabilities 1,832 1,832 - - -
TOTAL 4,761 1,832 2,929 - -
Other current and non-current financial liabilities include the liabilities incurred to acquire the consolidated subsidiaries (Metaware, Novulys andSomafor). The earn-outs calculated at December 31, 2017 are based on the expected results of the corresponding companies.
136 Gfi Informatique - 2017 REGISTRATION DOCUMENT
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
OFF BALANCE SHEET COMMITMENTS RELATED TO CHANGES IN CONSOLIDATION SCOPE2.4In the course of its disposals and acquisitions, the Group has given and received liability warranties, described below:
(in thousands of euros) 12.31.2017
Liability guarantees received in relation to the following acquisitions: Overall expiration
Specific expiration Overall, tax andsocial security
limit
Intellectualproperty
limitTax and social
security liabilitiesIntellectual
property
Tahis Consulting 06.25.2018 - - 40 -
Ordirope expired 12.31.2018 12.31.2018 410* 2,800
Business Document expired 12.31.2018 12.31.2018 800* 12,500
Impaq 03.18.2018 03.18.2021 - 1,747 -
Efron 10.31.2018 legal prescription - 2,000 -
Roff 04.04.2018 legal prescription -4,000 (+1,000
Angola) -
Metaware 11.22.2018 legal prescription 11.22.2021 600* -
Novulys 10.10.2017 03.31.2018 - 322* -
Computacenter 03.01.2018 legal prescription - 400 -
The limit on the warranty declines over time.*
SUBSEQUENT EVENTS2.5
Acquisition of Gesfor Group in Latin America
On February 22, 2018, Gfi Informatique acquired Gesfor Group whichspecialises in projects and application development. It also developsmobility and payment solutions and carries out fixed-price projects.
With 450 employees, Gesfor generates a revenue of 12 million euros, ofwhich more than 90% is generated in Mexico and the remainder inPanama. The banking sector represents 80% of its revenue as, with 25years of experience, Gesfor has been able to capitalise on its strong tiesto banking leaders who were already customers of Gfi Informatique.
Acquisition of Cynapsys in Tunisia
On February 6, 2018, Gfi Informatique acquired the Cynapsys groupcompanies (150 employees), a multi-specialist for French customers(in service centres), or local customers in Tunisia and in Africa ingeneral. Cynapsys, already a group partner in some transactions inNorth Africa, generates revenue of 5 million euros with profitability inline with the comparable activities of Gfi Informatique.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
Revenue and trade receivablesNOTE 3
REVENUE3.1
Rules for the recognition of revenue are summarised below:
TECHNICAL ASSISTANCE, CONSULTING AND SYSTEMS INTEGRATION
Revenue arising from these services is recognised as and when theservices are rendered. Revenue is determined by reference to thecontractually agreed price and to billable chargeable hours spent onthe job. Invoices to be raised or deferred income are recognised whenbilling is out of phase with the stage of completion.
SERVICES INVOICED FOR A FIXED AMOUNT
Revenue arising from these services is recognised overtime on thebasis of costs incurred to date and costs that will be incurredsubsequently. When it is probable that costs will exceed revenue, theexpected loss is recognised immediately. Invoices to be raised ordeferred income are recognised when billing is out of phase with thestage of completion.
SYSTEMS INTEGRATION ASSOCIATED WITH SALES OF SOFTWARE PACKAGES AND HARDWARE
on delivery, except when projects are of an unusually complex natureand may present particular completion risks, in which case projectsare considered in their entirety and revenue is recognised accordingto the stage of completion. In this case, the project is considered as awhole and the revenue is recorded overtime.
That part of the revenue arising from the sale of softwareapplications and hardware is recognised upon the transfer of the risksand rewards of ownership to the buyer. This transfer generally occurs
The share of revenue relating to services is recorded overtime on thebasis of the costs incurred and the costs remaining to be incurred.
SALES OF SOFTWARE AND HARDWARE
Revenue from the sale of software packages and hardwareindependently of any services is recognised when risks have beentransferred to the buyer. This transfer occurs on delivery.
MAINTENANCE
Revenue arising from maintenance is recognised prorata temporisover the length of the contract.
TRANSACTIONS CARRIED OUT AS AN AGENT
When the Group acts as an agent, the revenue relating to thetransaction is not recognised. Only the margin achieved on thistransaction is recorded under Revenue.
SEGMENT REPORTING3.2
The Group bases its segment reporting on geographic sectors in accordance with the internal management data used by Management.
The acquisition of the Efron, Roff and Impaq groups in 2016 resulted in the reorganisation of geographical segments by the management and thecreation of two new segments: LatAm and Rest of the World. The breakdown of revenue by geographical segment is therefore as follows:
(in thousands of euros) 2017
Intr-group France
Interna-tional Spain Portugal LatAm Belux Switzerland Poland
Moroccoand
Africa
Restof theWorld
Revenue 1,131,874 - 842,860 289,014 126,992 76,706 15,670 27,464 9,734 15,914 12,668 3,866
100% - 74% 26% 11% 7% 1% 2% 1% 1% 1% 0%
Trade receivables 430,366 (7,285) 329,848 107,803 41,616 32,099 2,988 4,794 3,526 4,690 15,753 2,337
(in thousands of euros) 2016
Intra-group France
International Spain Portugal LatAm Belux Switzerland Poland
Moroccoand
Africa
Rest ofthe
World
Revenue 1,015,415 - 832,182 183,233 102,989 30,378 na 23,950 2,060 13,360 10,496 na
100% - 82% 18% 10% 3% na 2% 0% 1% 1% na
Trade receivables 397,300 (4,042) 311,336 90,006 36,267 31,955 na 4,678 284 5,263 11,559 na
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
TRADE RECEIVABLES3.3
TRADE RECEIVABLES
Trade receivables are current financial assets, initially recognised atfair value and subsequently at amortised cost less any impairmentloss. The fair value of trade receivables is deemed to be the facevalue, since their due date is usually less than three months.
IMPAIRMENT OF ACCOUNTS RECEIVABLE
Amounts disputed by customers are provisioned in full.
FACTORING
Gfi Informatique factors part of its receivables. Depending on thetype of contract, the factoring company may be responsible forcollecting the accounts receivable. Gfi Informatique and itssubsidiaries have drawing rights limited to a certain fraction of thereceivables assigned.
Trade receivables subject to drawing are kept in the “Tradereceivables” item. A counterpart entry to the drawing is posted to“current borrowings”.
In the presence of a factoring agreement without recourse,receivables are not recognised as “Trade receivables” but as “cash andcash equivalents”.
(in thousands of euros) 12.31.2017 12.31.2016
Trade receivables 157,837 137,792
Receivables sold to factoring companies 127,061 127,878
Impairment losses (8,067) (8,275)
TOTAL 276,831 257,395
Bills receivable 30 992
Invoices to be issued 153,505 138,913
TOTAL 430,366 397,300
All trade receivables are due within one year.
Changes regarding the provision for bad debts were as follows:
(in thousands of euros) 12.31.2017 12.31.2016
Accumulated provision at January 1 8,275 2,796
Depreciation 2,583 2,918
Reversals of provision (2,264) (2,767)
Change in consolidation scope (313) 5,239
Foreign exchange effects (214) 89
ACCUMULATED PROVISION AT THE CLOSING DATE 8,067 8,275
Trade receivables net of provisions are broken down as follows:
(in thousands of euros) 12.31.2017Receivables Not
past due
Receivables overdue since
Less than6 months 6 to 12 months Over 12 months
Net trade receivables* 276,831 203,976 56,540 7,793 8,522
Excluding bills receivable and Invoices to be issued*
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
Gfi Informatique’s top ten clients account for nearly 29% of 2017consolidated revenue. None of these top ten clients alone representsmore than 10% of the Group’s revenue.
In France, invoices worth 5,190 thousand euros excluding taxes weresold under a factoring agreement without recourse, and are thereforederecognised, as compared to 4,940 thousand euros at December 31,2016.
In Spain and Portugal, invoices worth respectively 8,529 thousandeuros excluding tax (7,060 thousand euros excluding tax atDecember 31, 2016) and 915 thousand euros excluding tax (595thousand euros excluding tax at December 31, 2016) were sold undera factoring agreement without recourse and are thereforederecognised.
Payroll and benefits expensesNOTE 4
HEADCOUNT4.1
Average workforce 2017 2016
Managerial staff 12,219 10,503
Employees, technicians and supervisory staff 2,156 1,853
TOTAL 14,375 12,356
EMPLOYEE BENEFITS4.2
PROFIT SHARING
Amounts distributed to employees under compulsory anddiscretionary profit-sharing schemes are reported under “Staff costs”in the statement of comprehensive income.
CICE
The French tax credit for competitiveness and employment (CICE) isreported in the statement of comprehensive income as a deductionfrom employee expenses.
RESEARCH COSTS AND RESEARCH TAX CREDIT
Research costs are recognised as an expense in the period whenincurred.
Unless assigned to capitalised development costs, research taxcredits (CIR) are recognised in underlying operating margin. They arereported as a deduction from employee expenses. If assigned tocapitalised development costs, they are recorded as a deduction fromcapitalised development costs.
(in thousands of euros) 2017 2016
Wages and salaries 568,231 502,280
Social security costs 218,166 206,095
Profit sharing 973 546
TOTAL 787,370 708,921
The CICE credited in respect of 2016 amounted to 12,913 thousand euros compared with 10,700 thousand euros for 2016.
RETIREMENT BENEFIT PLANS4.3
In the case of defined benefit plans covering post-employmentbenefits, the costs of these benefits are estimated using the projectedunit credit method. The projected unit credit sees each period ofservice as giving rise to an additional unit of benefit entitlementapplying the plan’s vesting formula, taking into account thelinearization effect when the rights do not vest uniformly oversubsequent vesting periods.
Future payments corresponding to the benefits granted to employeesare determined using various assumptions (rate of increase in salaries,retirement age, mortality, etc.) and these defined benefit obligationsare then discounted to their present value using as discount rate themarket yields on high quality corporate bonds.
When assumptions are revised, this results in actuarial differencesthat are recognised in the period in which they arise, not to profit orloss but directly to equity under Recognised income and expense.
Pursuant to the French pension reform act, the minimum legal age ofretirement will increase gradually, by four months per year, from 60years in 2010 to 62 years in 2018.
Excluding retirement benefits, the Group does not operate any otherdefined benefit plan in respect of post-employment benefits in Groupcompanies.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
The total value of the Group’s total retirement indemnities payable in France changed as follows:
(in thousands of euros)
PROVISION FOR RETIREMENT INDEMNITIES AT DECEMBER 31, 2015 33,952
Newly consolidated companies and other* 22
Cost of services rendered during the year 2,952
Interest costs 668
Amounts paid for severance/retirement during the year (1,075)
Changes in actuarial differences 2,577
PROVISION FOR RETIREMENT INDEMNITIES AT DECEMBER 31, 2016 39,096
Newly consolidated companies and other* 423
Cost of services rendered during the year 3,412
Interest costs 677
Amounts paid for severance/retirement during the year (2,180)
Changes in actuarial differences 4,069
PROVISION FOR RETIREMENT INDEMNITIES AT DECEMBER 31, 2017 45,497
including taking on staff under outsourcing agreements.*
The legal and conventional indemnities are provisioned for eachpresent employee of the Group according to their theoretical seniorityon the date of their retirement, in accordance with IAS 19 as revised.
These commitments are based on the assumption that in all casesemployees will leave at their own initiative. The average rate of socialsecurity costs applied is 47%. The calculation of the commitmentsincludes:
an attendance coefficient based on turnover by age bracket; the•average in 2017 was 10% to 10.4% depending on the company,
a wage increase rate of 2.25% to 3.00%, and,•2011-2013 INSEE mortality tables by gender.•
The life of the plan is estimated at 14 years, the discount rate used is1.51% (versus 1.75% at the end of 2016).
As regards sensitivity, a drop in this discount rate of 0.25 basis pointwould generate a 3% increase in the commitment.
Operating incomeNOTE 5
OPERATING MARGIN BY SEGMENT5.1
OPERATING MARGIN
The Group’s key profit indicator, underlying operating margin,corresponds to operating profit before non-recurring items (includinggoodwill impairment losses) and before amortisation of recognisedintangible assets from business combinations.
Gfi Informatique bases its segment reporting on geographic sectors inaccordance with the internal management data used byManagement.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
Segment performance indicators, taking account of the new reorganisation of geographical segments, are as follows:
(in thousands of euros) 2017 France Spain Portugal LatAm Belux Switzerland Poland
Moroccoand
Africa
Rest ofthe
World
Revenue 1,131,874 842,860 126,992 76,706 15,670 27,464 9,734 15,914 12,668 3,866
OPERATING MARGIN 68,994 48,234 6,623 7,845 694 1,728 398 2,897 423 152
Operating margin % 6.1% 5.7% 5.2% 10.2% 4.4% 6.3% 4.1% 18.2% 3.3% 3.9%
(in thousands of euros) 2016 France Spain Portugal LatAm Belux Switzerland Poland
Moroccoand
Africa
Rest ofthe
World
Revenue 1,015,415 832,182 102,989 30,378 na 23,950 2,060 13,360 10,496 na
OPERATING MARGIN 61,733 49,300 5,370 2,948 NA 1,150 (465) 2,360 1,070 NA
Operating margin % 6.1% 5.9% 5.2% 9.7% na 4.8% (22.6)% 17.7% 10.2% na
NET OPERATING INCOME5.2
Intangible assets recognised from business combinations
Amortisation associated with assigned intangible assets as part ofthe allocation of goodwill amounted to 2,421 thousand of euros(1,873 thousand of euros in 2016) and mainly concerns customerrelationships.
Restructuring costs
Restructuring costs included in the operating profit are mainly relatedto France and Spain and amounted to 6,132 thousand of euros and1,131 thousand euros respectively.
Other operating income and expenses
CONSOLIDATION TRANSACTIONS
In accordance with revised IFRS 3, costs related to businesscombination transactions are recorded under expenses.
FREE SHARES
The fair value of free shares allocated to employees is recognisedunder other operating income and expenses over the vesting period.Free shares are valued at the price on the day the share wasallocated.
(in thousands of euros) 2017 2016
Business combinations transactions (1,564) (1,025)
Free shares 536 (1,104)
Disputes and tax/social security contingencies (note 10) 1,661 (200)
Relocation (871) (1,461)
Other (2,980) (310)
TOTAL (3,218) (4,100)
FREE SHARES
The Board of Directors meeting on January 21, 2016 allocated 310,000rights to free shares to certain Group employees. The shares will beacquired by beneficiaries following a minimum vesting period of twoyears and are subject to Group performance conditions
A revenue of 536 thousand euros was recognised over the period,resulting from updating the probability of performance attainmentcriteria for the awarding of free shares (see note 9.5 "Free sharesplans").
OTHER
Other non-current costs include:
deferred interest on disposal of assets occurring during the year of•453 thousand euros;
the impairment loss on the Théséus software for 800 thousand•euros following the decision to change the ERP within the Group.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
OFF BALANCE SHEET COMMITMENTS RELATED TO OPERATING ACTIVITIES5.3
(in thousands of euros) 12.31.2017 12.31.2016
Guarantees on customer contracts 7,250 5,787
Guarantees on supplier contracts 113 69
Guarantees on the payment of rents 451 504
TOTAL 7,814 6,360
As part of an outsourcing contact in Spain signed in 2014, the Group amount. Because of the low probability of payment, no provision wasassumed a certain number of initially uncertain liabilities totalling an recognised.estimated 3.8 million euros. A payment guarantee was given in that
Within the scope of its continuing activities, the Group has the following commitments in respect of non-cancellable lease agreements for realestate:
(in thousands of euros) 12.31.2017
Maturities
Less than one year 1 to 5 years Over 5 years
Operating leases 52,809 15,105 36,934 770
The lease agreement for the head office was extended in 2015 to a six-year fixed term agreement from 2016. The rent due under this agreement,presented in the table above, amounted to 14.6 million euros at December 31, 2017.
Financing and financial instrumentsNOTE 6
DEBT6.1
When initially accounted for, borrowings are recorded at fair valueadjusted to account for transaction costs directly attributable to thedebt issuance.
Costs and issue premiums for loans are not included in the initial costbut are taken into account in calculating amortised cost using theeffective interest method and are therefore recorded in income in anactuarial manner over the life of the debt.
Borrowings
NON-CURRENT BORROWINGS
(in thousands of euros) 31.12.2017 31.12.2016
Bonds - long-term portion 24,885 24,827
Banks loans due in more than one year 56,468 59,706
TOTAL 81,353 84,533
CURRENT BORROWINGS
(in thousands of euros) 12.31.2017 12.31.2016
Bank loans due within 1 year 24,027 25,666
Finance lease obligations, short-term portion 124 204
Bank overdrafts 33,017 11,750
Amounts drawn down from factoring companies 29,267 8,006
Accrued interests on miscellaneous borrowings and debts 43 32
TOTAL 86,478 45,658
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
CHANGE IN BORROWINGS
In accordance with the new provisions of IAS 7, the Group will disclose for the first time the change in borrowings, which excludes bank overdraftsand accrued interest not yet due:
(in thousands of euros) 12.31.2016 Cash flows
“Non cash” changes
12.31.2017Acquisitions
Change inexchange
rateChange infair value
Paymentschedule
reclassifications
Long-term borrowings 84,533 10,254 - - 82 (13,516) 81,353
Short-term borrowings 25,666 (15,326) - (3) 174 13,516 24,027
Finance lease obligations 204 (80) - - - - 124
Amounts drawn down from factoring companies 8,006 21,265 - (4) - - 29,267
TOTAL ASSETS FROM FINANCING ACTIVITIES 118,409 16,113 - (7) 256 - 134,771
BOND ISSUE
A bond was issued in 2014 for 25 million euros, maturing onDecember 27, 2019.
The issue bears interest of 3.947% per year. The interest on thesebonds are payable yearly in arrears on December 27 of the year.
The AMF issued approvals No. 14–244, dated May 27, 2014 and No.14-450, dated August 4, 2014, of the respective new issue prospectuses.These describe in detail the features of the issues and the debt. Theprospectus is also accessible on the website (https://www.gfi.world/en/)in French only, under Shareholders’ Information.
BANK LOANS
On October 9, 2015, the Group signed a syndicated credit agreementwith a banking syndicate for 82.6 million euros. This agreement wasamended on July 27, 2017, making an additional 37.0 million eurosavailable to Gfi Informatique, which included:
12.0 million for financing acquisitions; and•25.0 million for financing working capital requirements.•
10.4 million euros of this loan for acquisitions were drawn down.
The loan is redeemable over five years and carries interest at a variablerate.
It also authorises the Company to issue new EuroPP notes of up to80 million euros.
This credit agreement accounts for most of the bank loans.
SUBSEQUENT EVENTS TO THE CLOSING DATE
In the context of the friendly takeover bid on Realdomen, GfiInformatique signed a syndicated loan agreement on February 21,2018, subject to the success of the takeover bid. The agreementprovides for:
a 200 million euros loan redeemable over five years (40% of the•loan will be repaid on maturity) to finance the acquisition ofRealdolmen;
bridge financing for 110 million euros to refinance the existing•syndicated loan and potentially the existing private placementalso. This loan will be refinanced by a new private placement;
a 50 million euros loan for acquisitions, redeemable over five•years, which represents new sources of funds for the Group'sacquisitions and investments;
a five-year 50 million euros revolving credit to fund the Group's•working capital requirements.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
Debt maturities
(in thousands of euros) 12.31.2017 2018 2019 2020 2021Maturities
beyond 2021
Bonds 24,885 - 24,885 - - -
Bank loans 80,495 24,027 27,971 28,085 115 297
Finance lease obligations 124 124 - - - -
TOTAL 105,504 24,151 52,856 28,085 115 297
The current portion of bank borrowings at December 31, 2017 shows the following maturities:
(in thousands of euros) 12.31.2017Less than 3
monthsBetween 3 and
6 monthsBetween 6 and
9 months
Between9 and 12months
Loans due within one year * 24,201 11,714 762 11,602 123
Capital due, nominal value.*
INTEREST RATE RISK ON CASH FLOWS6.2
Fixed rate and variable rate distribution
The bank loans are subscribed at both fixed and variable rates according to the break down below (before interest rate hedges):
(in thousands of euros) 12.31.2017 12.31.2016
Variable interest rates 69% 55,826 58,072
Fixed interest rates 31% 25,527 26,461
NON-CURRENT BORROWINGS 100% 81,353 84,533
(in thousands of euros) 12.31.2017 12.31.2016
Variable interest rates 96% 22,957 19,357
Fixed interest rates 4% 1,070 6,309
CURRENT BORROWINGS 100% 24,027 25,666
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
LEVEL OF EXPOSURE
The Group’s exposure to risks of variation in market interest rates islinked to the level of its financial indebtedness. Interest ratemanagement forms an integral part of debt management. The Groupdecides what proportion of the debt bears fixed interest rates andwhat proportion bears variable rates.
With this aim, the Group implements traditional swap type contracts.As at December 31, 2017, after taking account of the interest-rateswaps, 63% of the Group’s debt is at a fixed interest rate.
If the hedges are activated, the analysis of interest-rate sensitivityshows that a marginal 1 basis point increase in interest rates wouldhave an impact of 0.4 million euros on the consolidated financialstatements of Gfi Informatique on the basis of the financial liabilitiesrecognised at December 31, 2017.
With regard to its principal financing contract, the Group hedged thisloan within certain limits against an increase in the three-monthEuribor.
Current financial liabilities
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING
The Group’s current policy is to enter into transactions on the financial markets only for the purpose of hedging commitments arising from itsactivity and not for speculative purposes.
The Group uses derivative financial instruments such as interest rateswaps to cover itself against the risks associated with interest-ratevariations. These derivative financial instruments are initiallyrecorded at their fair value at the time when the contract isnegotiated and later. The derivatives are recorded as assets when thefair value is positive and as liabilities when the fair value is negative.
The profits or losses resulting from the variations in the market valueof hedge instruments, taken out to hedge future cash flows and forwhich the Group chose to apply hedge accounting, are recorded asequity capital at the hedge effectiveness percentage. When theGroup chose not to apply hedge accounting, the profits or lossesresulting from the variations in market value were entered into theincome statement.
Current financial liabilities correspond to hedging instruments based on observable data other than a price listed on an activerecognised at fair value. Some interest-rate hedging instruments are market. At December 31, 2017 the Group used two hedgingsigned for a constant amount until maturity, whereas others are for instruments, recorded under “Current financial liabilities” and with theamounts that decline gradually until maturity. These hedging following features:instruments are valued in accordance with IFRS 7 revised, Level II, i.e.
(in thousands of euros) Maturities
FairValueType of instrument Issue date
Date ofexpiration
CounterParty
Hedging at12.31.2017 2018 2019 2020 2021
Fixed rate swap 12.31.2015 09.30.2020 CACIB 13,560 4,520 4,520 4,520 - (51)
Fixed rate swap 09.29.2017 09.30.2020 CACIB 11,829 3,943 3,943 3,943 - (5)
Fixed rate swap 12.29.2017 09.30.2020 CACIB 5,216 - 2,608 2,608 - (4)
CAP 12.31.2015 09.28.2018 CACIB 9,000 9,000 - - - -
39,605 17,463 11,071 11,071 - (60)
DEBT-TO-EQUITY RATIO6.3The goal of the Group is to maintain a limited net debt-to-equity ratio in relation to equity capital. In the context of managing this goal, the Groupseeks to maintain an optimal financial structure in relation to the financing of its external growth and the yield on its equity.
At December 31, 2017, the debt-to-equity ratio was as follows:
(in thousands of euros) 12.31.2017 12.31.2016
Net borrowings 138,156 101,266
Net equity 321,918 300,608
DEBT-TO-EQUITY RATIO 43% 34%
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
LIQUIDITY RISK6.4The goal of the Group is to maintain a balance between the continuityof financing and its flexibility thanks to the use of factoring contracts,overdrafts, bank loans and bonds debts.
Factoring agreements
Gfi Informatique has, through factoring agreements, credit facilitiesaccording to the value of the trade receivables sold. These creditfacilities are limited to 100 million euros in France.
Bank overdraft facilities
The Group has negotiated bank overdraft facilities of up to 35.0 millioneuros. At December 31, 2017, the Group had used 16.1 million euros ofthese bank overdraft facilities, primarily in France.
EuroPPs issued
The credit agreement of October 9, 2015 authorises Gfi Informatiqueto issue new EuroPP notes for up to 80 million.
Agreements featuring so-called default covenants
The credit agreement of October 9, 2015, with a pool of bankinginstitutions, includes so-called default covenants in the form offinancial covenants with which the Group must comply (see Note 6.6Off-balance sheet commitments relating to the Company’s financingactivities).
FINANCIAL INCOME AND EXPENSE6.5
Cost of net debt
(in thousands of euros) 2017 2016
Gains on disposal and income from marketable securities 58 110
INCOME FROM CASH AND CASH EQUIVALENTS 58 110
Interest expenses (2,579) (2,117)
Change in the fair value of borrowings and bonds (255) (232)
Interest expenses in connection with factoring (1,087) (953)
COST OF DEBT (3,921) (3,302)
TOTAL (3,863) (3,192)
Other financial income (expenses)
(in thousands of euros) 2017 2016
Foreign exchange gains 357 326
Foreign exchange losses (764) (443)
Discounting effects (140) (340)
Provisions relating to employees (note 4) (677) (668)
Impairment losses - 10
Other financial income (swaps and others) 21 30
Sundry financial expenses (swaps and others) (103) (58)
TOTAL (1,306) (1,143)
The discounting effects mainly concern receivables on loans to organisations hat collect employers' contributions to the "1% construction scheme"("effort construction").
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
OFF BALANCE SHEET COMMITMENTS RELATING TO THE COMPANY’S FINANCING ACTIVITIES6.6
Pledges, guarantees and mortgages granted
As part of its financing arrangements with banks, the Group has pledged all shares that it holds in its subsidiary Gfi Progiciels.
Other commitments given in the context of financing operations
Within the framework of its main bank loan in France, the Group is obliged to comply with the following commitments.
CONTRACTUAL LIMITATIONS TO THE GROUP’S DIVIDEND PAYOUT POLICY
The Group is committed to adopting a dividend payout policy thattakes into account the debt repayment requirements and payment ofrelated interest. These payouts are limited to 40% of net incomeattributable to the Group if the R2 ratio is greater than 1.25.
CEILING ON INVESTMENTS
The Group must comply with certain ceilings on net investments.
COVENANTS
The financial criteria, measured at the yearly and half-yearly closing,are summarised below:
Covenants Requirement
from12.31.2015
to 06.30.2018
from12.31.2018
to 06.30.2019 on 12.31.2019 on 06.30.2020
Net Financial Debt/EBITDA R2 < than: 2.50 2.25 2.00 1.50
Net Financial Debt/Shareholders’ equity R3 < than: 1.00 1.00 1.00 1.00
The amounts used to calculate these ratios are explained in detail in the terms of the loan agreement. The concept of EBITDA corresponds tounderlying operating EBITDA plus the impact of restructuring costs and CVAE.
Gfi Informatique meets the bank contract requirements based on the 2017 balance sheet and performance. Therefore, the Group is not exposed toany risk of early payment related to covenants for the financial year.
Income tax expenseNOTE 7
Accounting treatment of CVAE
The CVAE (French business value added tax), which according to theGroup’s analysis complies with the definition of an income tax as setforth in IAS 12, is recorded under income tax.
For the period, the CVAE represented 10.4 million euros, as comparedwith 10.8 million euros in 2016.
Tax pooling
As at December 31, 2017, Gfi Informatique’s tax Group in Francecomprised sixteen companies (see table of consolidated companies innote 18: List of consolidated companies). The existence of this taxconsolidation group generated a tax savings of 2,064 thousand eurosover the year.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
RECONCILIATION OF THEORETICAL AND ACTUAL INCOME TAX EXPENSE 7.1The reconciliation between the tax expense and the result of the accounting profit multiplied by the applicable tax rate is as follows:
(in thousands of euros) 2017 2016
Profit before corporation tax 50,650 46,805
Parent company tax rate 33.33% 33.33%
Theoretical tax 16,882 15,600
Tax losses not recognised as deferred tax assets 5,658 1,153
Used of tax losses not recognised previously as deferred tax assets (349) (853)
Tax assets on non-recoverable consolidation adjustments (2,873) (1,230)
Impact of permanent tax differences (4,316) (3,771)
Impact of goodwill impairment losses - -
Impact of tax loss carry-forwards recognised (4,065) -
Impact of changes in tax rates (1,539) (710)
Net impact of CVAE 6,945 7,180
Tax savings from not-taxable income (CIR) (3,040) (2,838)
Other 38 165
INCOME TAX EXPENSE 13,341 14,696
Of which: Current tax 14,713 14,050
Deferred tax (1,372) 646
Permanent differences include 4.3 million euros due to non-taxable CICE income, as compared to 3.6 million euros for 2016.
DEFERRED TAXES7.2
Deferred tax
Deferred taxes are recognised on differences between the carryingamounts of assets and liabilities in the financial statements and thecorresponding tax bases used in the computation of taxable profit,and are calculated using the balance sheet liability method at the taxrates known at the balance sheet date.
Deferred tax assets relating to tax loss carry-forwards are recognisedonly to the extent that it is probable that sufficient taxable profitswill be available to allow these assets to be recovered.
Deferred tax assets and liabilities are offset at the level of the taxentity or tax group if one exists.
Deferred tax assets and liabilities are not discounted and aretherefore reported at the nominal value.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
At December 31, 2017, the sources of deferred taxes in France and abroad were as follows.
(in thousands of euros) 12.31.2016
Change in consolidation
scope
Otherand
exchangedifferences
Impacton profit
or loss 12.31.2017
Temporary differences arising from tax declarations
Employee profit sharing and paid leave 416 - (48) 368
Other tax timing differences 1,371 - 6 (992) 385
Temporary differences arising from consolidation adjustments
Tax loss carry-forwards recognised 5,689 - - 2,866 8,555
Provisions for retirement indemnities 13,024 141 1,356 636 15,157
Assets developed internally (14,060) - - (3,268) (17,328)
Customer relationships (3,310) - - 512 (2,798)
Other 1,805 - (5) (74) 1,726
NET DEFERRED TAX - FRENCH COMPANIES 4,935 141 1,357 (368) 6,065
Tax timing differences 422 - (60) 522 884
Tax loss carry-forwards recognized - - - 1,198 1,198
Customer relationships (2,669) 788 10 173 (1,698)
Other (445) - - (153) (598)
NET DEFERRED TAX - FOREIGN COMPANIES (2,692) 788 (50) 1,740 (214)
NET DEFERRED TAX - TOTAL 2,243 929 1,307 1,372 5,851
Including: Deferred tax assets 5,070 8,068
Deferred tax liabilities (2,827) (2,217)
CARRYABLE TAX LOSSES7.3
Recognition of tax loss carry-forward
Based on the projected consumption of tax losses, the Group used, both in France and abroad, capitalised tax loss carryforwards generating taxincome of 4 million euros.
Tax loss carry-forwards
The tax savings from tax loss carry-forward from subsidiaries are shown in the table below:
(in thousands of euros)Base at
12.31.2015Tax losses
usedNew tax
losses
Losses,exchange
ratedifferences
andcorrections
Changes inconsoli-
dationscope and
reclassi-fications
Base at12.31.2015
Future tax savings
RecognisedNot
recognised
France 40,506 (85) 15,138 - - 55,562 8,555 9,963
Spain 4,574 (66) 120 - (26) 4,602 691 483
Portugal 356 - - - (356) - - -
LatAm - (29) 218 (73) 251 367 - 119
Belux 416 (736) - 5,368 - 5,048 507 875
Switzerland 4,199 (83) 683 (606) 2,791 6,984 - 1,676
Poland 3,686 - - - (3,686) - - -
Morocco and Africa 210 (196) 995 523 - 1,532 - 443
Rest of the World - - 360 (200) 1,026 1,186 - 209
TOTAL 53,947 (1,195) 17,514 5,012 - 75,281 9,753 13,768
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
MATURITIES
Breakdown of tax loss carryforwards by maturity:
Base at12.31.2017
Expiration
2018 2019 2020 20212022 and
beyondWithout
time limit
Tax losses carried forward 75,281 1,239 1,256 1,555 1,174 4,612 65,445
Intangible assets and property, plant and equipmentNOTE 8
MAIN ASSETS BY SEGMENT8.1
The Group bases its segment reporting on geographic sectors in accordance with the internal management data used by Management.
(in thousands of euros) 12.31.2017 France Spain Portugal LatAm Belux Switzerland PolandMorocco& Africa
Rest ofthe World
Goodwill 283,126 208,579 33,621 21,507 2,152 5,116 3,873 7,074 1,204 -
Other intangible assets 81,272 72,073 3,675 3,184 228 3 - 2,084 25 -
Property, plant and equipment 21,315 16,374 2,439 719 250 280 49 611 576 17
(in thousands of euros) 12.31.2016 France Spain Portugal LatAm Belux Switzerland PolandMorocco& Africa
Rest ofthe World
Goodwill 280,935 213,328 35,601 16,614 na 4,628 794 8,702 1,268 na
Other intangible assets 77,438 63,613 3,960 7,402 na 29 - 2,411 23 na
Property, plant and equipment 19,342 14,704 2,319 1,155 na 318 2 300 544 na
GOODWILL8.2
Business Combinations are accounted under the purchase method.The cost of an acquisition is measured as the sum of the counterparttransferred, measured at acquisition-date fair value, and the amountof all non-controlling interests (NCI) in the acquire. For each BusinessCombination, a choice is made to measure the non-controllinginterests of the entity either at fair value or in accordance with theirproportionate share of revalued net assets. The acquisition costsincurred are recognised as operating expenses for the period duringwhich the corresponding services were rendered.
When the Group acquires an entity, it measures the acquired entity’sassets and liabilities at fair value. When the Business Combinationtakes place in stages (Step Acquisitions), the investment held by theacquirer prior to control being obtained is measured at the fair valueon the acquisition date, and the difference between this and theprevious carrying amount is recognised in profit or loss under IFRS 3R.
Price adjustments are recognised at their acquisition-date fair value.They will be recorded as an asset or a liability and subsequentchanges in fair value are recognised to profit or loss.
Resulting fair value adjustments are recognised on the same line asthe asset or liability concerned. Residual goodwill being the excess ofthe cost of the Business Combination over the Group’s interest in thenet fair value of the identifiable assets and liabilities, it is recognisedunder “Goodwill” and allocated to each cash-generating unit likely tobenefit from the Business Combination.
Subsequently, this goodwill is valued at cost less any impairmentlosses in accordance with the method described in the paragraphSubsequent measurement of non-current assets.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
(in thousands of euros) Gross values Impairment losses Net values
DECEMBER 31, 2015 262,130 23,736 238,394
Acquisitions 42,523 - 42,523
Disposals - - -
Impairment for the period - - -
Exchange differences 80 62 18
DECEMBER 31, 2016 304,733 23,798 280,935
Acquisitions 2,283 - 2,283
Disposals - - -
Impairment for the period - - -
Exchange differences (669) (577) (92)
DECEMBER 31, 2017 306,347 23,221 283,126
Changes during the financial year
The valuation of the fair value of identifiable assets, liabilities andcontingent liabilities related to acquisitions carried out in 2016 wascompleted during the year. The impact on goodwill valuation is2.3 million euros. As the corresponding adjustments to thecomparative accounts are not significant, they were not reprocessed,in accordance with IFRS 3.
Cash-generating units (CGU)
CGUs are identified on the basis of the geographical segments used byManagement and in accordance with the “Services” and “Software”businesses.
At the national level, both businesses may be developed (as in Franceand Spain). In fact, the various “Services” operations have generatedpowerful synergies, whilst the “Software” operations, owing to theirspecific nature, are relatively independent.
In view of this structure (geographical segments and businesses), andon the basis of the 2016 acquisitions, the Group now has ten CGUs,including three new ones:
The “Poland” CGU,•The “Morocco” CGU,•the “LatAm” CGU, which encompasses the following countries:•Brazil, Mexico, Colombia and the United States.
SUBSEQUENT MEASUREMENT OF NON-CURRENT ASSETS
Changes in the value of non-current assets are reviewed annually ormore frequently if internal or external events or circumstancessuggest that their value might have been impaired. If performancesare significantly below the budgets used as a basis for determiningcarry values in the past, this is considered as evidence of a possibleimpairment in the value.
In particular, the carrying value at which goodwill is stated on thebalance sheet is compared to the recoverable value. The recoverablevalue is the higher of the fair value less costs to sell and the value inuse. To determine value in use, assets are regrouped into CGUs whenit is not possible to determine cash inflows generated independentlyfrom assets or groups of assets. The CGUs correspond to thehomogeneous units generating identifiable cash flows.
The value in use of a CGU is determined using the Discounted FutureCash Flow (DCF) method according to the following principles:
cash flows arise from operational budgets set by Management for•the coming financial year with predictions of changes in revenue,operating margins and WCR levels for the next four years;
the combination of the discount rate and the infinite growth rate is•in line with the standard values used in the sector for comparableprofile groups;
the terminal value is calculated by totalling to infinity the•discounted cash flows, calculated according to a standardised flowand a perpetual growth rate. This growth rate is consistent withthe development potential of the markets in which the entityconcerned operates as well as with its competitive positioning.
The recoverable amount of the CGU determined as described aboveis then compared to the carrying value of the non-current assets(goodwill included) as reported in the consolidated balance sheet. Animpairment loss is recognised if the carrying value of the CGUexceeds its recoverable amount, with the offsetting credit entry beingagainst goodwill in priority.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
Measurement method applied to continuing operations
The value in use of the CGUs is determined using the discountedfuture cash flow method (DCF).
Perpetual growth rates used:
2.0% for the France, Belux and Switzerland CGUs (2.0% at 2016•year-end),
2.0% for the Spain and Portugal CGUs (1.5% at 2016 year-end),•2.0% for the Poland, LatAm and Morocco CGUs.•
The discount rates used for the year are presented below. This ratewas 9.5% for all CGUs in 2016.
9.0% for the France, Belux and Switzerland CGUs,•9.5% for the CGUs in Spain,•10.0% for the Portugal and Poland CGUs,•12.0% for the LatAm and Morocco CGUs.•
Business Projections are based on operating budgets set byManagement for the 2018 financial year. For 2019 to 2022, thegrowth rates used were then between 3% and 8% for all CGUs.
Given the assumptions used in terms of profitability and workingcapital requirements, the tests carried out in 2017 did not lead to anyimpairment being recorded.
Sensitivity testing and goodwill impairment losses for each CGU
At year-end, the Group’s assessment of the reasonably possiblechange in key assumptions corresponded to the brackets of valuesused in the sensitivity tests which are presented below:
0.5 basis point increase in discount rate,•0.5 basis point decrease in growth rate to infinity,•
0.5 basis point decrease in margin over all 2018 to 2022 periods,•0.5 basis point decrease in revenue growth rate over all 2018 to•2022 periods,
10% decrease in working capital assumptions.•Sensitivity testing also uses the combined decrease of several of theseassumptions, depending on their sensitivity.
At December 31, 2017, the results of the sensitivity tests show that noreasonably possible change in key assumptions brought therecoverable value of these CGUs below their net carrying amounts.
IN FRANCE
France accounts for 74% of the Group’s goodwill. This amounted to209 million euros at December 31, 2017 and breaks down as148 million euros for the “Services Business” CGU and 61 millioneuros for the “Software Business” CGU.
INTERNATIONALLY
Goodwill internationally was 75 million euros. With the exception ofSpain, the international CGUs correspond to the “Services” business.
In Spain, this amounted to 34 million euros at December 31, 2017 andbreaks down as 33 million euros for the “Services Business” CGU and1 million euros for the “Software Business” CGU.
Goodwill from the Roff and Efron acquisitions were assigned to the“Service Business” CGUs for the following geographical regions:Portugal, Spain, Switzerland and LatAm, respectively.
Goodwill from the Impaq acquisition was assigned to the new PolandCGU.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
OTHER INTANGIBLE ASSETS8.3
INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
Intangible assets and property, plant and equipment are stated atcost less any accumulated amortisation, depreciation and possibleimpairment losses.
Amortisation and depreciation are charged so as to write off the costof these assets over their estimated useful lives, using thestraight-line method.
The carrying value of each of these assets is reviewed at each balancesheet date to identify possible impairment losses of each of theassets in question (see 8.2 "Subsequent measurement of non-currentassets").
DEVELOPMENT COSTS
The development costs incurred in connection with the creation ofSoftware applications (new projects and development of existingmodules) are entered into the accounts as intangible assets, becausethe Group can demonstrate:
the technical feasibility of the intangible asset in view of its•bringing into service or its sale;
its intention to complete this asset and its ability to use or sell it; •the fact that this asset will generate future financial benefits; •the existence of available resources to complete the development•and;
its ability to reliably value the expenses incurred in respect of the•development project.
Development costs not meeting the criteria for capitalisation set out inIAS 38 are recognised as operating expenses as and when committed.
These development costs are amortised from the in-house date of“acceptance” of the project so as to write off these costs over theexpected useful life of the Software, not exceeding eight years.
The assessment of the value of the fixed assets is carried out each year,or more frequently if events or circumstances, internal or external,indicate that a write-down is likely to occur. Performances significantlylower than the budgets on which the framework of the evaluationspreviously carried out, are considered as an indication of impairment.
The balance sheet value of the activated development costs iscompared to the recoverable amount. The recoverable amount is thehighest between fair value net of disposal costs and value in use. Thevalue in use is determined using the discounted cash flow method(DCF), based on operating budgets for the year to come and forecastturnover for the following four years.
An impairment loss is recognized, if applicable, if the value at balancesheet is greater than the recoverable amount.
CUSTOMER RELATIONSHIPS
The client relationships acquired from a business combination arerecorded at their fair value on the acquisition date. Subsequent totheir initial entry into the accounts, they are valued at cost less thecumulative amortisation. Amortisation periods are 2 to 21 years.
COMPUTER SOFTWARE
Computer software purchased and computer software developed areamortised from the date they were brought into service so as to writeoff the cost of these assets over their estimated useful lives, using thestraight-line method.
Software purchased: 1 to 5 years,•Software developed: 5 to 10 years.•
In the case of internally developed computer software, developmentcosts capitalised by Gfi Informatique comprise all costs directlyattributable to software development and programming.
(in thousands of euros) Gross valuesDepreciation and
amortisation
12.31.2017 12.31.2016
Net values Net values
Software purchased 37,404 27,200 10,204 1,095
Software developed 15,097 10,867 4,230 13,804
Development costs 96,666 46,766 49,900 40,691
Customer relationships and contracts 35,690 18,752 16,938 21,848
TOTAL 184,857 103,585 81,272 77,438
Software purchased refers to software operating licenses acquired. Software created refers primarily to costs of the Group’s ERP project (Theseusproject).
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
Changes in intangible assets are shown in the table below:
(in thousands of euros) Gross valuesDepreciation and
amortisation Net values
DECEMBER 31, 2015 109,503 59,837 49,666
Assets purchased 8,703 - 8,703
Assets developed internally 15,271 - 15,271
Assets sold or retired (918) (918) -
Depreciation in the period - 14,717 (14,717)
First-time consolidation 31,504 12,993 18,511
Reclassifications - - -
Exchange differences 17 13 4
DECEMBER 31, 2016 164,080 86,642 77,438
Assets purchased 2,828 - 2,828
Assets developed internally 20,118 - 20,118
Assets sold or retired (59) (58) (1)
Depreciation in the period - 16,581 (16,581)
First-time consolidation (3,500) (143) (3,357)
Reclassifications 1,506 663 843
Exchange differences (116) (100) (16)
DECEMBER 31, 2017 184,857 103,585 81,272
The fixed assets generated internally include capitalised software development costs related to the Group’s “Software” activity.
Evaluation method applied to research and development costs
The value in use is determined using the discounted cash flow method (DCF).
The activity forecasts are based on the operating budgets set by the Management for the 2018 fiscal year. For the years 2019 to 2022, the growthrates retained are between 2% and 10% for all the software packages.
Given the assumptions made, the achievement of the impairment tests for 2017 did not lead to the recognition of impairment.
PROPERTY, PLANT AND EQUIPMENT8.4
PROPERTY, PLANT AND EQUIPMENT
Depreciation is charged so as to write off the cost of the assets, usingthe straight-line method over their estimated useful lives. Theseuseful lives are principally as follows:
land: not depreciated,•buildings: 20 to 40 years,•hardware: 1 to 5 years,•motor vehicles: 5 years,•office equipment and other assets: 5 to 10 years.•
Maintenance and repair costs are recognised as an expense of theperiod.
Non-current assets made available to the Group under finance leasesare recorded in the same way as non-current assets purchasedoutright. They are depreciated over the shorter of the lease term andtheir estimated useful life according to the above principles. Thecorresponding lease obligation is recognised as a liability in thebalance sheet.
(in thousands of euros) Gross valuesDepreciation and
amortisation
12.31.2017 12.31.2016
Net values Net values
Land and buildings 1,142 697 445 272
Plant and equipment 9,471 7,025 2,446 2,133
Other property, plant and equipment 46,279 27,855 18,424 16,937
TOTAL 55,892 35,577 21,315 19,342
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
(in thousands of euros) Gross valuesDepreciation and
amortisation Net values
DECEMBER 31, 2015 42,591 30,374 12,217
Assets purchased 11,023 - 11,023
Assets developed internally - - -
Assets sold or retired (6,477) (4,653) (1,824)
Depreciation in the period - 3,814 (3,814)
First-time consolidation 7,874 6,149 1,725
Reclassifications - - -
Exchange differences 54 39 15
DECEMBER 31, 2016 55,065 35,723 19,342
Assets purchased 11,863 - 11,863
Assets developed internally - - -
Assets sold or retired (11,883) (5,824) (6,059)
Depreciation in the period - 4,961 (4,961)
First-time consolidation - - -
Reclassifications 1,986 810 1,176
Exchange differences (139) (93) (46)
DECEMBER 31, 2017 56,892 35,577 21,315
The Group does not generate property, plant and equipment internally.
Shareholders’ equity and earnings per shareNOTE 9
The statement of changes in equity is presented in the first part of the consolidated financial statements.
CHANGES IN SHARE CAPITAL9.1
The share capital, unchanged since December 31, 2016, comprising 66,570,771 shares with a par value of 2 euros per share, amounts to133,141,542 euros.
Number of shares at December 31
Number of shares 2017 2016
NUMBER OF COMMON SHARES 66,570,771 66,570,771
Number of free shares that could be allocated 77,500 310,000
NUMBER OF ISSUABLE SHARES 77,500 310,000
TOTAL 66,648,271 66,880,771
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
AVERAGE NUMBER OF SHARES AND EARNINGS PER SHARE9.2
Earnings per share
Earnings per share are calculated:
based on net profits, not including profits from discontinued•operations,
based on net profits, attributable to owners of the Group.•
Earnings per share are calculated by reference to the weightedaverage number of shares in circulation during the financial year.
Diluted earnings per share are calculated by reference to theweighted average number of shares in circulation during the financialyear plus the average number of free shares that could be allocated.
Average number of shares 2017 2016
Weighted average number of common shares 66,570,771 66,275,519
Weighted average number of treasury shares (153,913) (167,572)
Weighted average number of common shares outstanding 66,416,858 66,107,947
Weighted average number of common shares which may be diluted 77,500 310,000
Weighted average number of diluted shares 66,494,358 66,417,947
Earnings per share 2017 2016
Profit (loss), attributable to owners of the Group (in thousands of euros) 37,124 32,222
Basic EPS (in euros) 0.56 0.49
Diluted EPS (in euros) 0.56 0.49
TREASURY SHARES TRANSACTIONS9.3
Treasury shares are deducted from equity on the basis of theirpurchase value. When these shares are sold to unrelated parties, thegain or loss on the disposal net of taxation is recognised directly in“Consolidated reserves”.
At December 31, 2016, a total of 149,000 shares were held under theheading "Treasury shares of the consolidating enterprise", valued at980 thousand euros. During the financial year:
the acquisition of 106,173 shares at an average price of 7.84 euros•each,
the disposal of 96,348 shares at the average price of 7.91 euros,•took this number of securities to 158,825 as at December 31, 2017.
These securities, valued at 1,032 thousand euros, accounted for 0.2%of the total outstanding shares at December 31, 2017.
DIVIDENDS AND APPROPRIATION OF 9.4INCOME FOR THE PERIOD
Dividends paid in 2017
The Combined Shareholders’ General Meeting of May 22, 2017decided to pay a dividend of 0.15 euro per share in 2017 as part of theappropriation of 2016 income. A total dividend payout of9,963 thousand euros was made this year.
Appropriation of parent company income for 2017
The proposed appropriation of parent company income presented tothe Annual General Meeting would allocate parent company incomeequal to 24,104 thousand euros as follows: to the shareholders, asdividends in the amount of 9,986 thousand euros, to the financialstatements in the legal reserve account in the amount of 1,205thousand euros and the balance in retained earnings.
FREE SHARES PLANS9.5The Board of Directors' meeting on February 21, 2018, approving theresults for the financial year ended December 31, 2017, noted that theconditions specified in the Plan of January 21, 2016 had been met inpart, due to exceptional and unforeseeable events, and decided toadjust the initial performance criterion in the 2016 Plan.
On a proposal of the Appointments and Compensation Committeeand after verifying the beneficiaries' presence in the Company as atJanuary 21, 2018, the Board of Directors authorised the final allocationof 77,500 free shares equating to 25% of the free shares (310,000)initially planned.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
RELATED PARTIES DISCLOSURES9.6
Transactions concluded with the reference shareholder
As part of the Amendment to the Shareholders' Agreement on May10, 2017, Apax and Boussard & Gavaudan agreed to sell their shares toMannai Corporation in the following manner:
a "First Block" of around 29% of Gfi Informatique's share capital•and voting rights at €8.00 per share was sold during the financialyear, in accordance with the description disclosed below,
a "Second Block" amounting to approximately 15% of the share•capital and voting rights is due to be sold at €8.50 per share duringthe second quarter of 2018.
Pursuant to this commitment, the sale of the "First Block" wascompleted in two tranches:
on June 19, 2017, Itefin Participations disposed of 8,063,789 shares,•equating to some 12% of the share capital and voting rights of GfiInformatique,
on July 10, 2017, shareholders Boussard & Gavaudan sold•11,231,313 shares of Gfi Informatique, broken down as (i) 8,702,227shares held by BG Select Investments Limited (Ireland), and (ii)2,529,086 shares held by Boussard & Gavaudan Holding Limited,equal to approximately 17% of the share capital and voting rights ofGfi Informatique.
The purchase of this "First Block" brings Mannai Corporation's stake to81.2% of the share capital.
Other transactions with management bodies
The other related-party transactions are presented in note 15.
Other provisions and contingent liabilitiesNOTE 10
Provisions are recognised when the Group has a present obligation(legal or constructive) as a result of a past event, when it is probablethat the Group will be required to settle that obligation, and whenthe amount can be estimated reliably.
Provisions for disputes are analysed on an individual basis. Provisionsreported in the balance sheet under Disputes correspond to the risk asestimated by the Management of Gfi Informatique and may differfrom the amounts sought by the other party.
As regards provisions for restructuring, the estimated cost of therestructuring measure is recognised to profit or loss when thesemeasures are the object of a detailed plan that has been announcedor has started to be implemented.
Contingent liabilities are not recognised but are described in thenotes if they are significant, except for Business Combinations wherethey are identifiable.
NON-CURRENT PROVISIONS10.1
Retirement indemnities
Retirement indemnities in France are employee benefits and are shown in note 4 "Payroll and benefits expenses".
(in thousands of euros) 12.31.2016Consolidation
scope Increases Decreases
Changes inactuarial
differences 12.31.2017
Retirement indemnities 39,096 423 4,089 (2,180) 4,069 45,497
TOTAL 39,096 423 4,089 (2,180) 4,069 45,497
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
CURRENT PROVISIONS10.2
(in thousands of euros) 12.31.2016Consolidation
scope Increases Decreases 12.31.2017
Labour disputes and restructuring undertaken 1,863 - 515 (483) 1,895
Miscellaneous disputes 44 118 - (35) 127
Tax and social security contingencies 3,403 1,966 657 (2,976) 3,050
Other 923 119 63 (867) 238
TOTAL 6,233 2,203 1,235 (4,361) 5,310
A breakdown of the amounts set aside and reversed is presented in the table below:
(in thousands of euros)
Expensed
Totalexpenses
Reversals
Totalreversals
Of whichreversals
unused
Operating
Financial
Operating
FinancialCurrent Non-current Current Non-current
Labour disputes and restructuring undertaken - 515 - 515 - (483) - (483) (60)
Miscellaneous disputes - - - - (35) - - (35) -
Tax and social security liabilities 24 633 - 657 (198) (2,778) - (2,976) (1,997)
Other 63 - - 63 (367) (500) - (867) (830)
TOTAL 87 1,148 - 1,235 (600) (3,761) - (4,361) (2,887)
Provisions for labour disputes and restructuring undertaken
The depreciation and provisions and reversals for labour risks andreorganisations essentially relate to France.
Tax and social security contingencies
The reversal primarily concerns the French and Portuguese subsidiariesfor which tax audits were completed during the financial year.
OFF BALANCE SHEET COMMITMENTS RELATED TO RISKS AND DISPUTES10.3The payment of the outstanding debt relating to the VAT dispute led to an application for release to the state treasury. This pledge given by theGroup on October 30, 2012, covered all of the shares it held in its subsidiary Gfi Informatique-Production.
Other non-current assetsNOTE 11
NON-CURRENT FINANCIAL ASSETS11.1
(in thousands of euros) Gross valuesDepreciation and
amortisation
12.31.2017 12.31.2016
Net values Net values
Construction funds and staff loans 6,720 - 6,720 4,888
Deposits and other forms of collateral 5,691 - 5,691 5,000
Other long-term receivables 2,394 - 2,394 1,946
Non-consolidated equity investments 169 65 104 73
TOTAL 14,974 65 14,909 11,907
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
OTHER NON-CURRENT ASSETS11.2
(in thousands of euros) 12.31.2017 12.31.2016
Tax receivables 24,717 21,780
GROSS VALUES 24,717 21,780
Impairment losses - -
TOTAL 24,717 21,780
Other non-current assets mainly comprise research tax credits receivable for 2015 and subsequent years.
Tax credit for competitiveness and employment (CICE)
The Tax credit for competitiveness and employment (CICE) is a taxcredit granted by the tax authorities as from the calendar year 2013.The CICE is calculated as a percentage of gross salaries below acertain limit. The CICE is reported in the statement ofcomprehensive income as a deduction from employee expenses.
The CICE receivables of the tax consolidation group of which GfiInformatique is the parent were sold without recourse and thereforederecognised for the amount of 12,234 thousand euros during 2017,10,149 thousand euros in 2016 and 9,648 in 2015.
The residual CICE will either be deducted from a potential corporationtax payment in the next three financial years or paid by the French taxauthorities to the Company in 2021 at the latest.
Current assets and liabilitiesNOTE 12
OTHER RECEIVABLES12.1
(in thousands of euros) 12.31.2017 12.31.2016
Tax receivables 35,005 31,854
Other receivables 3,497 3,682
Advances paid 1,238 533
Receivables from asset disposals - -
GROSS TOTAL 39,740 36,069
Impairment losses (11) -
NET TOTAL 39,729 36,069
Tax receivables include, amongst other items, research tax credit receivables (CIR) recoverable in 2018 and sold with recourse during the financialyear.
The “Other receivables” item mainly comprises social security receivables.
TAX AND SOCIAL SECURITY CONTINGENCIES12.2
(in thousands of euros) 12.31.2017 12.31.2016
Social security debts 135,201 132,750
Tax debts 89,989 84,023
Income tax 3,368 3,181
TOTAL 228,558 219,954
All the above amounts are payable within one year.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
OTHER CURRENT LIABILITIES12.3
(in thousands of euros) 12.31.2017 12.31.2016
Debts on fixed assets 970 967
Down payments and instalments received, unraised bills 11,504 12,169
Other 1,333 1,986
TOTAL 13,807 15,122
All the above amounts are payable within one year.
Financial instrumentsNOTE 13
FINANCIAL INSTRUMENTS RECORDED ON THE BALANCE SHEET13.1
FINANCIAL ASSETS AND LIABILITIES
The Group defines its financial assets in accordance with thefollowing categories: assets measured at fair value withcorresponding entry in the income statement, hedge instruments forfuture cash flow, held-to-maturity assets, loans and debts,available-for-sale assets and debts measured at amortised cost. Theclassification depends on the reasons for the acquisition of thefinancial assets. Management determines the classification of itsfinancial assets during the initial entry into the accounts.
FINANCIAL ASSETS AT THEIR FAIR VALUE WITH THE OFFSETTING ENTRY IN THE INCOME STATEMENT
The financial assets valued at their fair value with the offsetting entryto profit or loss is the financial assets held for transaction purposes. Afinancial asset is classified in this category if it was principallyacquired for the purpose of short-term resale. Derivative financialinstruments are also designated as being held for transactionpurposes unless they are classified as hedging instruments. They areclassified among non-current liabilities.
HELD-TO-MATURITY ASSETS
Non-derivative financial assets associated with determined ordeterminable payments and a fixed maturity are classified asinvestments held until maturity, provided that the Group has themanifest intention and the ability to retain them until their maturity.The profits or losses are entered into the income statement whenthese investments are removed from the accounts or depreciated.
LOANS AND RECEIVABLES
Loans and debts are non-derivative financial assets with fixed ordeterminable payment which are not listed on an active market. Theyare included in current assets, except those with a maturity greaterthan twelve months after the closing date.
On each closing, the Group evaluates whether an objectivedepreciation indicator exists for a financial asset or a group offinancial assets.
A financial asset and a financial liability are offset if, and only if, theGroup has a legally enforceable right to offset the recognisedamounts and intends either to settle on a net basis or to realise theasset and settle the liability simultaneously.
161Gfi Informatique - 2017 REGISTRATION DOCUMENT
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
(in thousands of euros) 12.31.2017
Breakdown by category of instruments
Assetsvalued at
fair value inprofit or loss
Hedginginstruments
for futurecash flows
Assets heldto maturity
Loans andreceivables
Debts atamortised
cost
Non-current financial assets 14,909 - - - 14,909 -
Other non-current financial assets 24,717 - - - 24,717 -
Trade receivables 430,366 - - - 430,366 -
Other receivables 39,740 - - - 39,740 -
Cash and cash equivalents 29,675 29,675 - - - -
ASSETS 539,407 29,675 - - 509,732 -
Non-current borrowings 81,353 - - - - 81,353
Other non-current financial liabilities 2,929 - - - - 2,929
Current borrowings 86,354 - - - - 86,354
Current financial liabilities 60 - 60 - - -
Other current financial liabilities 1,832 - - - - 1,832
Trade payables 90,616 - - - - 90,616
Tax and social security liabilities 228,558 - - - - 228,558
Other current liabilities 13,807 - - - - 13,807
LIABILITIES 505,509 - 60 - - 505,449
INCOME STATEMENT EFFECT OF FINANCIAL INSTRUMENTS13.2
(in thousands of euros)
Income statement effect of financial instruments
2017 Interest Fair value Amortised costImpairment
loss
Assets and liabilities at fair value in profit or loss (82) (82) - - -
Loans and receivables (1,488) (1,029) (140) - (319)
Assets held to maturity - - - - -
Debts at amortised cost (2,834) (2,579) - (255) -
(4,404) (3,690) (140) (255) (319)
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
MATURITY13.3
The following table shows the maturity profile of the financial liabilities of the Group as at December 31, 2017, on the basis of the non-discountedcontractual payments.
(in thousands of euros) 12.31.2017 2018 2019 2020 2021
2022and
beyond
Other bond issues* 25,000 - 25,000 - - -
Interest 1,974 987 987 - - -
Loans due in more than one year* (note 6) 56,918 - 28,257 28,256 115 290
Interest 1,091 - 809 282 - -
Other non-current financial liabilities (note 2) 2,929 - 2,929 - - -
NON-CURRENT FINANCIAL LIABILITIES 87,912 987 57,982 28,538 115 290
Current borrowings* (note 6) 24,201 24,201 - - - -
Interest 1,249 1,249 - - - -
Current financial liabilities (note 6) 60 60 - - - -
Other current financial liabilities (note 2) 1,832 1,832 - - - -
Trade payables 90,616 90,616 - - - -
Other current liabilities (note 12) 13,807 13,807 - - - -
CURRENT FINANCIAL LIABILITIES 131,765 131,765 - - - -
Capital due, nominal value.*
Details on the maturities by quarter of short-term bank debt at December 31, 2017 are shown in note 6 "Financing and financial instruments".
All of the Group’s other current financial liabilities mature in less than three months.
OBJECTIVES AND FINANCIAL RISK 13.4MANAGEMENT POLICY
The main financial liabilities of the Group consist of loans and bankoverdrafts, financial lease obligations and trade payables. Theprincipal purpose of these financial liabilities is to finance theoperating activities of the Group. The Group holds financial assetssuch as customer receivables, cash and short-term deposits whichare generated by its activities directly.
It also contracts derivative instruments, primarily interest rate swaps.These instruments have the goal of managing the interest rate risksassociated with the Group’s financing. The policy of the Group is notto subscribe to derivative instruments for speculative purposes.
The principal risks attached to the Group’s financial instruments are asfollows: interest rate risk on cash flow, liquidity risk and counterpartyrisk. The risk management policies are summarised below.
Credit risk
Regarding the credit risk relating to the financial assets of the Group,i.e. principally customers, cash and cash equivalents, the exposure ofthe Group is associated with the risk of possible failure of the thirdparties concerned, with a maximum exposure equal to the book valueof these instruments.
The customer balances are subject to permanent monitoring. Theageing of these past due and non-impaired financial assets is shown innote 3 "Revenue and trade receivables". The table presenting thechanges in impairment losses for the period is also provided in this note.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
Currency risks
The currency risk in respect of commercial transactions is not hedged, as most transactions are made within the euro zone. Elsewhere (outside ofthe euro zone), revenue is generated in the same currency as the related operating charges, thereby limiting exposure to foreign exchangefluctuations. Very few intercompany operating transactions are denominated in currencies other than the euro.
The Group’s net assets and liabilities in foreign currencies are broken down in the table below. The impact of a uniformly negative one-centimechange in the euro would total 0.3 million euros.
(in thousands of euros) Assets LiabilitiesNet balance
before hedging
Polish zloty 19,930 (3,931) 15,999
Angolan kwanza 5,784 (1,580) 4,204
Moroccan dirham 13,887 (8,727) 5,160
Swiss franc 6,450 (5,081) 1,369
CFA franc 2,815 (3,579) (764)
Pound sterling 1,982 (2,714) (732)
US dollar 1,002 (298) 704
Mexican peso 2,067 (1,942) 125
Swedish kroner 881 (21) 860
Brazilian real 2,732 (661) 2,071
Macanese pataca 1,416 (166) 1,250
Colombian peso 2,806 (1,416) 1,390
Romanian leu 85 (220) (135)
TOTAL 12.31.2017 61,835 (30,336) 31,499
Equity risk
The marketable securities held by the Group exclusively consist of money market funds. The risk linked to the evolution of the financial markets istherefore limited.
Cash flow statementNOTE 14
Cash and cash equivalents
Cash and cash equivalents reported in the balance sheet comprisecash in hand, cash at bank and short-term deposits for less thanthree months as well as short-term highly liquid investments thatare subject to an insignificant risk of changes in value.
Marketable securities are considered as being held for trading andare therefore measured at fair value on the balance sheet date.Changes in fair value are recognised to profit or loss. As thesesecurities are adjusted to fair value with the offsetting entry to profitor loss, no impairment losses are recognised. Fair value of thesesecurities is determined mainly by reference to listed prices.
In the consolidated cash flow statement, cash and cash equivalentscomprise the items indicated above, from which are deductedcurrent bank overdrafts.
Impact of changes in consolidation scope
Cash flow as a result of the impact of changes in consolidation scopeof -15,158 thousand euros concern only acquisitions completed duringprior periods.
Subscription and repayment of borrowings
Subscriptions and repayment of borrowings include:
cash flow, net of costs associated with drawdowns of additional•credit (Amendment to 2015 Syndicated Loan), for +10,270 thousandeuros,
cash flows, in the amount of -15,422 thousand euros, mainly•relating to the repayment of said Syndicated Loan.
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
Compensation paid to members of the Board NOTE 15of Directors and senior management
Compensation paid
The total compensation and benefits, including all benefits in kind, paid in 2017 and 2016 to the members of the management and administrativebodies by Gfi Informatique and controlled companies are indicated in the table below:
(in thousands of euros)Fixed
remunerationVariable
remunerationBenefits in
kindDirectors’
feesTotal
remuneration
Commitmentsin respect of
retirementindemnities
2017 836 316 4 224 1,380 -
2016 836 336 4 230 1,406 -
The variable portion of the remuneration paid to corporate officers iscalculated using criteria established by the Appointments andCompensation Committee related to the year’s performance and theexternal growth objectives.
Gfi Informatique considers that only the corporate officers have theauthority and responsibility for the planning, management and controlof the activities, directly or indirectly (IAS 24.9).
Non-compete agreement and post-engagement commitment
On December 18, 2007, the Company signed a non-compete agreementwith Vincent Rouaix. By way of payment for the non-competecommitment entered into by Vincent Rouaix, this agreement stipulatesthe payment to the latter, on the day his office ends, of a lump sum of850,000 euros by amendments of March 29, 2013.
As at December 31, 2017, there are no anticipated payments inrespect of corporate officers after leaving office.
Awarding free shares
310,000 rights to free shares were awarded to certain Groupemployees under the 2016 Plan. By a decision of the Board meeting onFebruary 21, 2018, 77,500 free shares were definitively awarded.
Subsequent events to the closing dateNOTE 16
PROPOSED FRIENDLY TAKEOVER BID FOR REALDOLMEN BY GFI INFORMATIQUEOn February 23, 2018, Gfi Informatique and Realdolmen, a leadingIT services provider in Belgium and Luxembourg, announced thesignature of a memorandum of understanding according to whichGfi Informatique will file a voluntary and conditional takeover bidfor Realdolmen with the Belgian Financial Services and MarketsAuthority (FSMA). The bid is a cash offer.
Benelux. It supports clients through the complete ICT-lifecycle,combining support services in both infrastructure and applicationswith appropriate product offerings.
The transaction will deepen Gfi Informatique's footprint in Belgiumand Luxembourg, in line with its international expansion strategy.With around 1,250 highly trained employees, Realdolmen is anindependent ICT expert providing IT services to over 1,000 clients in
The main terms of the transaction are:
cash takeover bid for all the company's shares at an offered price•of €37.00 per share, giving a value of some €196 million,
the offer will be conditional on Gfi Informatique obtaining more•than 75% of Realdolmen's fully diluted share capital and votingrights,
the commitment of a group of entities and individuals to tender•their shares for the bid, amounting to 21.94% of the share capital.
165Gfi Informatique - 2017 REGISTRATION DOCUMENT
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
Fees for Statutory AuditorsNOTE 17
The fees for the Group's Statutory Auditors indicated in the consolidated income statement for France are as follows:
(in euros)
GRANT THORNTON ERNST & YOUNG and Others TOTAL
2017 2016 2017 2016 2017 2016
Amount % Amount % Amount % Amount % Amount % Amount %
AUDIT
* Statutory audit, reporting, review of company and consolidated financial statements
421800 81% 386 214 89% 529 600 99% 550 800 93% 951 400 90% 937 014 91%
* Services other than the audit of financial statemens 100 500 19% 45 475 11% 6 500 1% 42 900 7% 107 000 10% 88 375 9%
TOTAL 522 300 100% 431 689 100% 536 100 100% 593 700 100% 1 058 400 100% 1 025 389 100%
In 2017, the services other than the audit of financial statements covered the services required by the legal and regulatory texts (reports on capitalincreases, etc.) as well as the services provided at Gfi Informatique's request (agreed procedures on internal control processes, acquisitiondiligences and various attestations).
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements5
List of consolidated companiesNOTE 18
Company name
Registered office
Siren No.
Consoli-dation
method% of
control% of
interestCountry of
activityAddressPost code
and city
FRANCE
Gfi Informatique SA (1)145, boulevard
Victor-Hugo 93400 Saint-Ouen 385 365 713Parent company –
Group leader France
Gfi 7 SARL145, boulevard
Victor-Hugo 93400 Saint-Ouen 808 372 924 FC 100% 100% France
Gfi 8 SARL145, boulevard
Victor-Hugo 93400 Saint-Ouen 808 373 161 FC 100% 100% France
Gfi 9 SARL145, boulevard
Victor-Hugo 93400 Saint-Ouen 808 373 237 FC 100% 100% France
Gfi Progiciels SAS (1)145, boulevard
Victor-Hugo 93400 Saint-Ouen 340 546 993 FC 100% 100% France
Cognitis France SAS (1)145, boulevard
Victor-Hugo 93400 Saint-Ouen 348 786 799 FC 100% 100% France
Addstones SAS (1)145, boulevard
Victor-Hugo 93400 Saint-Ouen 432 146 504 FC 100% 100% France
Gfi Business- Transformation SAS (1)
145, boulevardVictor-Hugo 93400 Saint-Ouen 790 077 937 FC 100% 100% France
Awak’IT (S&I) SAS (1)59-61 Quai Alphonse
Le Gallo92100 Boulogne
Billancourt 412 013 922 FC 100% 100% France
Tikawa Productions SARL (1)
59-61 Quai AlphonseLe Gallo
92100 BoulogneBillancourt 451 571 293 FC 100% 100% France
ITN Consultants SAS (1) 82, rue Saint-Lazare 75009 Paris 333 489 532 FC 100% 100% France
Gfi Informatique Telecom SASU (1)
145, boulevardVictor-Hugo 93400 Saint-Ouen 501 707 293 FC 100% 100% France
Business Document SAS (1) 50, boulevard de la Reine
92100 BoulogneBillancourt 492 079 058 FC 100% 100% France
Novulys SAS (1)145, boulevard
Victor-Hugo 93400 Saint-Ouen 534 713 789 FC 65% 65% France
Metaware Technologies SA (1)
60, route de SartrouvilleParc les grillons BAT 1 78230 Le Pecq 398 138 545 FC 100% 100% France
Garsys SAS 53, rue Sibert42400
Saint-Chamond 493 036 602 FC 100% 100% France
SCI Via Domitia 151, rue Gilles-Roberval 30900 Nîmes 418 871 166 FC 100% 100% France
Gfi Informatique -Production SA (1)
145, boulevardVictor-Hugo 93400 Saint-Ouen 428 286 496 FC 100% 100% France
Gfi Informatique Entreprise Solutions SAS (1)
145, boulevardVictor-Hugo 93400 Saint-Ouen 315 930 578 FC 100% 100% France
Gfi Conseil et Intégration de Solutions SASU
145, boulevardVictor-Hugo 93400 Saint-Ouen 822 269 551 FC 70% 70% France
Gfi Infogen Systems SAS (1)
145, boulevardVictor-Hugo 93400 Saint-Ouen 387 554 710 FC 100% 100% France
SCI Gifimo (1)145, boulevard
Victor-Hugo 93400 Saint-Ouen 350 934 139 FC 100% 100% France
Roff France145, boulevard
Victor-Hugo 93400 Saint-Ouen 494 239 908 FC 100% 100% France
Somafor SARL145, boulevard
Victor-Hugo 93400 Saint-Ouen 389 150 137 FC 100% 100% France
Companies in the French tax consolidation group.(1)Companies in the Spanish tax consolidation group.(2)= Full ConsolidationFC
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CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements
5
Company name
Registered office
Siren No.
Consoli-dation
method% of
control% of
interestCountry of
activityAddressPost code
and city
EUROPE
Gfi Benelux Square de Meeûs 38/40 B-1000 BRUSSELS 0 427 608 266 FC 100% 100% Belgium
Gfi NV Square de Meeûs 38/40 B-1000 BRUSSELS 0 450 798 491 FC 100% 100% Belgium
Gfi PSF SA 13-15, Parc d’activités L-8308 Capellen B 52.391 FC 100% 100% Luxembourg
Impaq Sp. Z.o.o ul.Wołoska 2402-675 Warsaw
Poland 0000008546 FC 100% 100% Poland
IT Skills Sp. Z o.o ul.Wołoska 2202-675 Warsaw
Poland 0000397402 FC 100% 100% Poland
IMPAQ UK Limited
9 Bridle Close SurbitonRoad, Kingston upon
Thames Surrey KT1 2JW 05054175 FC 100% 100%United
Kingdom
Impaq Addstone S.R.L. 48 Temisana Street Bucharest 313033 FC 100% 100% Romania
Gfi Österreich GmbH Bozner Platz 4 6020 Innsbruck 466734 z FC 100% 100% Austria
Impaq Addstones Services S.R.L.
No 169A Floreasca Street,Building A, Floor 4,
Office No. 2057 Bucharest 259897 FC 100% 100% Romania
Gfi International Chemin des Aulx, 101228
Plan-les-OuatesCH-660
0,703,000-2 FC 100% 100% Switzerland
IMPAQ AG Badenerstrasse 580 CH-8048 ZürichCHE –
107.414.656 FC 100% 100% Switzerland
Gfi Levante SL (2) C/Los Monegros S/N 0 03006 Alicante B-53096749 FC 100% 100% Spain
Gfi Cataluña Grupo Corporativo SA (2) Passeig de Gracia 08007 Barcelona A-82673542 FC 100% 100% Spain
Grupo Corporativo Gfi Norte C/Licenciado Poza, 55
48013 Bilbao(Vizcaya) B-48301865 FC 100% 100% Spain
Roff Espana Consultores Independientes SA (2)
C/Serrano Galvache,56 – Edificio Olmo 28033 Madrid A-78897964 FC 100% 100% Spain
Savac Consultores SLMáximo Aguirre,
18-Bis 3°48011 Bilbao
(Vizcaya) B-48989990 FC 100% 100% Spain
Grupo Corporativo Gfi Informatica SA (2) C/Serrano Galvache, 56 28033 Madrid A-82206400 FC 100% 100% Spain
Gfi Portugal – Tecnologias de Informaçao, SA
Edifício Atlantis –Avenida D. João II,
lote 1.06,2.2 –Parque das Nações 1990-095 Lisboa PT502726890 FC 100% 100% Portugal
Roff Consultores Independetes SA
Rua Afonso Praça n°30,6ème étage, Torre de
Monsanto Miraflores 1495 Algés PT503882887 FC 100% 100% Portugal
Roff SDF Lda
Parkurbis, Parque deCiencia e Tecnologia
da Covilha6200-865
Tortosendo 508924928 FC 100% 100% Portugal
Roff SuisseRoute de Saint-Cergue
303, C.P. 1171 CH-1260 Nyon 55011238122 FC 100% 100% Switzerland
RNIC Independent Consultants AB
Stureplan 4C – 4ème étage,bureau 42 111 435 Stockholm 556824809901 FC 100% 100% Sweden
Gfi Informatique Holding GmbH Heilbronner Str., 86 70191 Stuttgart HRB20548 FC 100% 100% Germany
Companies in the French tax consolidation group.(1)Companies in the Spanish tax consolidation group.(2)= Full ConsolidationFC
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Notes to the consolidated financial statements5
Company name
Registered office
Siren No.
Consoli-dation
method% of
control% of
interestCountry of
activityAddressPost code
and city
OUTSIDE EUROPE
Somafor RCI SA 6, II Plateaux des Vallons06 BP 1293
AbidjanCI-Abj-1989-B-
33816 FC 100% 100% Ivory Coast
Gfi Informatique Maroc
1100, Bd Al Qods,Sidi Maârouf 20190 Casablanca 50 877 FC 100% 100% Morocco
Value Team, SARL 131, Bd d’Anfa 20100 Casablanca 292 201 FC 100% 100% Morocco
NVBS SARL332, Bd Brahim Roudani,
Maârif 20100 Casablanca 144 615 FC 100% 100% Morocco
Holding Gfi Informatique Maroc
1100, Bd Al Qods,Sidi Maârouf 20190 Casablanca 113 607 FC 100% 100% Morocco
Metaware ServicesLot Mandarouna 300
Sidi Maarouf 20190 Casablanca 1 125 255 FC 100% 100% Morocco
Gfi Maroc Offshore1100, Bd Al Qods, Sidi
Maârouf 20190 Casablanca 163 083 FC 100% 100% Morocco
Roff NCA SARL14, avenue Mers Sultan,
3e étage 20190 Casablanca 40 453 753 FC 100% 100% Morocco
RoffTec Angola-Consultoria, Serviҫos e Produtos, Lda.
Rua Comandante StonaNo. 19/21 Bairro Alvalade 5401152493 FC 100% 100% Angola
Roff Brasil - Consultoria em Sistemas de Informaçao, Ltda.
Avenida Paulista no 37,4e étage Bela Vista
CEP 01311-902,Sao Paulo
15.323.818/0001-12 FC 100% 100% Brazil
RoffMex Consulting, S.A. de C.V.
Teololco No. 325 ColoniaJardines des Pedregal
Delegacion AlavaroObregon
01900 Ciudad deMexico 558815/1 FC 55% 55% Mexico
Roff Asia Limitada
Alameda Dr. CarlosD'Assumpçao n° 181-187,
Edificio Brilhantismo 19°U Macau 545154 FC 100% 100% China
Efron Colombia SAS Carrera 20# 33 A - 20
Bogotá 830 053693-2 FC 100% 100% Columbia
Gfi Informatica Mexico S.A. de C.V.
Calle Solón, 212 Dep 101Colonia Palmas PolancoDistrito Miguel Hidalgo 11560 México DF ECO110602KR2 FC 100% 100% Mexico
Efron Consulting Inc 27 School Street, FL4 Boston MA02108 33-1223303 FC 100% 100% USA
Companies merged during the period
Gfi PSF SARLZI Am Bann,
2 rue de DrosbachL-3372
LEUDELANGE LU- 219,410 25 FC 100% 100% Luxembourg
Efron Consulting SL Calle Ulises, 97 28043 Madrid B-81626913 FC 100% 100% Spain
Companies in the French tax consolidation group.(1)Companies in the Spanish tax consolidation group.(2)= Full ConsolidationFC
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CONSOLIDATED FINANCIAL STATEMENTS
Statutory Auditors’ report on the consolidated financial statements
5
STATUTORY AUDITORS’ REPORT ON THE 5.3.CONSOLIDATED FINANCIAL STATEMENTS
This is a translation into English of the statutory auditors’ report on the consolidated financial statements of the Company issued in French and it isprovided solely for the convenience of English speaking users.
This statutory auditors’ report includes information required by European regulation and French law, such as information about the appointment of thestatutory auditors or verification of the information concerning the Group presented in the management report.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
To the annual general meeting of GFI Informatique,
Opinion
In compliance with the engagement entrusted to us by your annualgeneral meetings, we have audited the accompanying consolidatedfinancial statements of GFI Informatique for the year ended 31December 2017.
In our opinion, the consolidated financial statements give a true andfair view of the assets and liabilities and of the financial position of theGroup as at 31 December 2017 and of the results of its operations forthe year then ended in accordance with International FinancialReporting Standards as adopted by the European Union.
The audit opinion expressed above is consistent with our report to theAudit Committee.
Basis for Opinion
Audit Framework
We conducted our audit in accordance with professional standardsapplicable in France. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for ouropinion.
Our responsibilities under those standards are further described in the“Statutory Auditors’ Responsibilities for the Audit of the ConsolidatedFinancial Statements” section of our report.
Independence
We conducted our audit engagement in compliance withindependence rules applicable to us, for the period from 1 January2017 to the date of our report and specifically we did not provide anyprohibited non-audit services referred to in Article 5(1) of Regulation(EU) No 537/2014 or in the French code of ethics (code dedéontologie) for statutory auditors.
Justification of Assessments - Key Audit Matters
In accordance with the requirements of Articles L.823-9 and R.823-7of the French Commercial Code (Code de commerce) relating to thejustification of our assessments, we inform you of the key auditmatters relating to risks of material misstatement that, in ourprofessional judgment, were of most significance in our audit of theconsolidated financial statements of the current period, as well ashow we addressed those risks.
These matters were addressed in the context of our audit of theconsolidated financial statements as a whole, and in forming ouropinion thereon, and we do not provide a separate opinion on specificitems of the consolidated financial statements.
Revenue recognition for fixed-priced contracts
Key audit matter Our response
Revenue for fixed-price contracts is recognized by stage of completion on thebasis of costs incurred to date and to be incurred.
When a loss upon completion of a contract is likely, a provision for loss atcompletion is recorded.
We considered the recognition of revenue on fixed-price contracts to be akey audit matter as the estimated costs on these contracts are based onoperating assumptions which have a direct impact on the revenue andoperating margin of the consolidated financial statements.
The accounting principles for revenue recognition are disclosed in Note 3.1 tothe consolidated financial statements.
We examined the internal control system for recognition ofrevenue from fixed-price contracts. We tested theeffectiveness of the controls performed, particularly thoserelated to costs incurred and to be incurred by contract.
We performed the following procedures on a selection ofcontracts based on both quantitative (significant unbilled anddeferred income) and qualitative (contracts with identifiedrisks, unusual profitability, etc.) criteria:
We analyzed the contractual conditions and reconciled the•financial information in the contract follow-up formprepared by management control (revenue, billing, costsincurred, unbilled and deferred income) with the accountingsystem; We verified the accuracy of the calculation of the standard•costs used to value the hours charged on the contracts;
We assessed the costs to be incurred and the percentage of•completion of contracts selected by interviewingmanagement controllers;
We performed analytical reviews of business units with•management controllers;
We evaluated the assumptions used by the management to•determine losses upon completion identified forloss-making contracts, if any.
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Statutory Auditors’ report on the consolidated financial statements5
Valuation of goodwill
Key audit matter Our response
As at 31 December 2017, goodwill is recorded in the balance sheet for a netcarrying amount of 283,126 thousand euros, representing 30% of totalassets. These assets are the subject of impairment test at least once per year.
This impairment test is based on the value in use of each Cash GeneratingUnit (CGU), determined on the basis of the discounted cash flow model,requiring the use of assumptions and estimates.
CGUs correspond to the geographical areas used by the management for the“Services” and “Software” business lines.
We considered goodwill valuation to be a key audit matter in view of (i) thesignificance of these assets in the consolidated balance sheet (ii) thesignificance of the judgments made by the management in determining cashflow, discount rate and long-term growth assumptions.
Impairment, if any, is recorded if the recoverable value is lower than the bookvalue. The recoverable value corresponds to the higher of the net fair value ofdisposal expenses and the value in use, as disclosed in Note 8.2 to theconsolidated financial statements.
Within the context of our audit, we examined the methodsused by the Group for impairment tests.
We performed the following procedures on the impairmenttesting of each CGU:
We reconciled the 2018 forecast with the budget approved•by the Board of Directors;
We evaluated the consistency of the key assumptions used•to determine cash flow models for 2019 to 2022;
With assistance from our valuation specialists, we assessed•the discount rates used in relation to market references;
We analyzed the sensitivity analyses performed by the•management.
Valuation of capitalized development costs
Key audit matter Our response
As at 31 December 2017, capitalized development costs are recorded in thebalance sheet for a net carrying amount of 49,900 thousand euros. Theseassets are amortized over the useful life of the software programs and arealso the subject of impairment tests on a yearly basis.
This impairment test is performed on the basis of the discounted cash flowmodel, which itself draws on operating budgets for the coming year andrevenue forecasts for the following four years.
We considered the valuation of capitalized development costs to be a keyaudit matter due to the significance of the judgments and assessments madeby the management in determining cash flow assumptions for the entireduration of the project.
Impairment, if any, is recorded when the recoverable amount is lower thanthe book value. The recoverable amount corresponds to the higher of the fairvalue and the value in use, as disclosed in Note 8.3 to the consolidatedfinancial statements.
We performed the following procedures:
For projects presenting impairment indicators, we checked•that an appropriate impairment test was performed;
We reconciled the 2018 forecasts with the operating•budgets approved by the management;
We challenged the consistency of the key assumptions used•to determine cash flow amounts for 2019 to 2022.
Verification of the Information Pertaining to the Group Presentedin the Management Report
As required by law we have also verified in accordance withprofessional standards applicable in France the information pertainingto the Group presented in the management report of the Board ofDirectors.
We have no matters to report as to its fair presentation and itsconsistency with the consolidated financial statements.
Report on Other Legal and Regulatory Requirements
Appointment of the Statutory Auditors
We were appointed as statutory auditors of GFI Informatique by theannual general meetings held on 19 May 2010 for Grant Thornton andon 21 May 2008 for ERNST & YOUNG et Autres.
As at December 31, 2017, Grant Thornton and ERNST & YOUNG etAutres were in the 8th year and 10th year of total uninterruptedengagement, respectively.
Previous to that date, ERNST & YOUNG Audit had been statutoryauditor since 1996.
Responsibilities of Management and Those Charged withGovernance for the Consolidated Financial Statements
European Union and for such internal control as managementdetermines is necessary to enable the preparation of consolidatedfinancial statements that are free from material misstatement,whether due to fraud or error.
Management is responsible for the preparation and fair presentationof the consolidated financial statements in accordance withInternational Financial Reporting Standards as adopted by the
In preparing the consolidated financial statements, management isresponsible for assessing the Company’s ability to continue as a goingconcern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless it is expectedto liquidate the Company or to cease operations.
The Audit Committee is responsible for monitoring the financialreporting process and the effectiveness of internal control and risksmanagement systems and where applicable, its internal audit,regarding the accounting and financial reporting procedures.
The consolidated financial statements were approved by the Board ofDirectors.
Statutory Auditors’ Responsibilities for the Audit of theConsolidated Financial Statements
Objectives and audit approach
Our role is to issue a report on the consolidated financial statements.Our objective is to obtain reasonable assurance about whether theconsolidated financial statements as a whole are free from materialmisstatement. Reasonable assurance is a high level of assurance, but isnot a guarantee that an audit conducted in accordance withprofessional standards will always detect a material misstatement
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5
when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of userstaken on the basis of these consolidated financial statements.
As specified in Article L.823-10-1 of the French Commercial Code(Code de commerce), our statutory audit does not include assuranceon the viability of the Company or the quality of management of theaffairs of the Company.
As part of an audit conducted in accordance with professionalstandards applicable in France, the statutory auditor exercisesprofessional judgment throughout the audit and furthermore:
Identifies and assesses the risks of material misstatement of the•consolidated financial statements, whether due to fraud or error,designs and performs audit procedures responsive to those risks,and obtains audit evidence considered to be sufficient andappropriate to provide a basis for his opinion. The risk of notdetecting a material misstatement resulting from fraud is higherthan for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the overrideof internal control.
Obtains an understanding of internal control relevant to the audit•in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion onthe effectiveness of the internal control.
Evaluates the appropriateness of accounting policies used and the•reasonableness of accounting estimates and related disclosuresmade by management in the consolidated financial statements.
a material uncertainty exists, there is a requirement to drawattention in the audit report to the related disclosures in theconsolidated financial statements or, if such disclosures are notprovided or inadequate, to modify the opinion expressed therein.
Assesses the appropriateness of management’s use of the going•concern basis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s abilityto continue as a going concern. This assessment is based on theaudit evidence obtained up to the date of his audit report. However,future events or conditions may cause the Company to cease tocontinue as a going concern. If the statutory auditor concludes that
Evaluates the overall presentation of the consolidated financial•statements and assesses whether these statements represent theunderlying transactions and events in a manner that achieves fairpresentation.
Obtains sufficient appropriate audit evidence regarding the•financial information of the entities or business activities within theGroup to express an opinion on the consolidated financialstatements. The statutory auditor is responsible for the direction,supervision and performance of the audit of the consolidatedfinancial statements and for the opinion expressed on theseconsolidated financial statements.
Report to the Audit Committee
We submit a report to the Audit Committee which includes inparticular a description of the scope of the audit and the auditprogram implemented, as well as the results of our audit. We alsoreport, if any, significant deficiencies in internal control regarding theaccounting and financial reporting procedures that we have identified.
Our report to the Audit Committee includes the risks of materialmisstatement that, in our professional judgment, were of mostsignificance in the audit of the consolidated financial statements ofthe current period and which are therefore the key audit matters thatwe are required to describe in this report.
We also provide the Audit Committee with the declaration providedfor in Article 6 of Regulation (EU) N° 537/2014, confirming ourindependence within the meaning of the rules applicable in Francesuch as they are set in particular by Articles L.822-10 to L.822-14 ofthe French Commercial Code (Code de commerce) and in the Frenchcode of ethics (code de déontologie) for statutory auditors. Whereappropriate, we discuss with the Audit Committee the risks that mayreasonably be thought to bear on our independence, and the relatedsafeguards.
Neuilly-Sur-Seine and Paris-La Défense, March 21, 2018
The Statutory AuditorsFrench original signed by
GRANT THORNTON
French Member of Grant Thornton International
Samuel Clochard
ERNST & YOUNG et Autres
Pierre Jouanne
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Statutory Auditors’ report on the consolidated financial statements5
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6CORPORATEFINANCIAL
STATEMENTS
CORPORATE FINANCIAL 6.1.STATEMENTS 174Balance sheet6.1.1. 174Income statement6.1.2. 175
NOTES TO THE CORPORATE 6.2.FINANCIAL STATEMENTS 176Significant events in the financial year6.2.1. 176Subsequent events to the closing date6.2.2. 176Accounting rules and principles6.2.3. 177Notes to the balance sheet6.2.4. 180
Intangible assetsNote 1 180
Property, plant and equipmentNote 2 181
Non-current financial assetsNote 3 181
Trade receivablesNote 4 182
Other receivablesNote 5 183
Accrual adjustmentsNote 6 183
EquityNote 7 184
Provisions for risks and costsNote 8 185
Financial liabilitiesNote 9 185
Operating and other liabilitiesNote 10 186Notes to the income statement6.2.5. 187
RevenueNote 11 187
Capitalised production costsNote 12 187
Reversals of impairment, provisions and Note 13transferred expenses 187
Amortisation and depreciationNote 14 187
Financial resultNote 15 188
Extraordinary income (loss)Note 16 189
Employee profit sharingNote 17 189
Corporation taxNote 18 190Other information6.2.6. 191
Off balance sheet commitmentsNote 19 191
Remuneration of DirectorsNote 20 193
Average workforceNote 21 193
Information regarding the related partiesNote 22 194
Table of subsidiaries and shareholdingsNote 23 195
OTHER INFORMATION6.3. 198Financial result for the last five financial years6.3.1. 198Inventory of marketable securities6.3.2. 199
STATUTORY AUDITOR'S REPORT 6.4.ON THE FINANCIAL STATEMENTS 200
STATUTORY AUDITOR'S REPORT 6.5ON RELATED PARTY AGREEMENTS AND COMMITMENTS 203
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CORPORATE FINANCIAL STATEMENTS
Corporate financial statements6
CORPORATE FINANCIAL STATEMENTS 6.1.
Balance sheet6.1.1.
(in thousands of euros)
12.31.2017 12.31.2016
Gross values
Depreciationand
amortisation Net values Net values
Intangible assets Note 1 152,617 (35,193) 117,424 117,840
Property, plant and equipment Note 2 26,351 (12,857) 13,494 12,644
Non-current financial assets Note 3 258,662 (32,805) 225,857 210,310
FIXED ASSETS 437,630 (80,855) 356,775 340,794
Goods purchased for resale 233 (48) 185 243
Advances paid on orders in progress 687 - 687 336
Trade receivables Note 4 236,744 (410) 236,334 229,012
Other receivables Note 5 124,476 (3,305) 121,171 93,734
Marketable securities - - - 5,001
Cash at bank and in hand 3,942 - 3,942 941
Prepaid expenses Note 6 12,755 - 12,755 10,015
CURRENT ASSETS 378,837 (3,763) 375,074 339,282
Deferred expenses 746 - 746 824
Unrealised exchange loss - - - -
TOTAL ASSETS 817,214 (84,619) 732,595 680,900
Share capital 133,141 133,141
Share, merger or contribution premiums 71,319 71,319
Legal reserve 9,243 8,083
Retained Earnings 46,986 34,918
Profit for the year 24,104 23,191
Regulated provisions 8,610 7,685
EQUITY Note 7 293,403 278,337
Provisions Note 8 916 2,748
Other equity 14 14
RESERVES AND OTHER EQUITY 930 2,762
Bonds Note 9 25,014 25,014
Loans and debts from banks Note 9 125,017 92,272
Sundry financial debts Note 9 41,282 40,597
Advances received on orders in progress 762 552
Trade payables Note 10 75,219 62,335
Tax and social security liabilities Note 10 124,530 126,979
Debts on fixed assets and associated accounts Note 10 2,043 672
Other debts Note 10 8,626 8,914
Deferred income 35,769 42,466
LIABILITIES 438,263 399,801
Unrealised currency gains -
TOTAL EQUITY AND LIABILITIES 732,595 680,900
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CORPORATE FINANCIAL STATEMENTS
Corporate financial statements
6
Income statement6.1.2.
(in thousands of euros) 2017 2016
Sales of services 683,619 675,477
Sales of goods 660 6,628
REVENUE Note 11 684,279 682,105
Capitalised production costs Note 12 3,632 3,408
Operating subsidies - -
Reversals of impairment and provisions and transfers of costs Note 13 8,206 9,104
Other income 856 148
OPERATING INCOME 696,973 694,765
Other purchases and external charges (296,995) (293,665)
Taxes (other than corporation tax) (16,014) (16,424)
Salaries and stipends (251,787) (246,468)
Social security costs (111,074) (110,864)
Amortisations and depreciation Note 14 (7,377) (7,894)
Other costs (518) (354)
OPERATING COSTS (683,765) (675,669)
OPERATING RESULTS 13,208 19,096
Financial income from shareholdings 12,645 8,665
Income from other marketable securities and receivables on fixed assets - 1
Other interests and related income 15 50
Reversals of provisions and depreciations 9,443 6,000
Positive exchange-rate differences 71 4
FINANCIAL INCOME 22,174 14,720
Amortisations and depreciations on financial assets (9,444) (6,691)
Interest and other financial costs (3,257) (2,762)
FINANCIAL COSTS (12,701) (9,453)
FINANCIAL RESULT Note 15 9,473 5,267
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXES 22,681 24,363
Extraordinary income on management transactions 54 272
Extraordinary income on capital transactions 4,382 1,483
Reversals of extraordinary provisions and transfers of costs 3,839 18,392
EXTRAORDINARY INCOME 8,275 20,147
Extraordinary costs on management transactions (6,883) (22,119)
Extraordinary costs on capital transactions (4,474) (1,661)
Extraordinary amortisation and depreciations (3,731) (4,368)
EXTRAORDINARY EXPENSES (15,088) (28,148)
EXTRAORDINARY INCOME (LOSS) Note 16 (6,813) (8,001)
Employee profit sharing Note 17 - -
Profit-sharing bonus - -
Income tax Note 18 8,236 6,829
NET PROFIT/(LOSS) 24,104 23,191
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
NOTES TO THE CORPORATE FINANCIAL 6.2.STATEMENTS
Significant events in the financial year6.2.1.
MANNAI CORPORATION ACQUIRES AN ADDITIONAL STAKE IN GFI INFORMATIQUEAs part of the Amendment to the shareholders’ Agreement enteredinto on May 10, 2017, Apax and Boussard & Gavaudan agreed to selltheir shares to Mannai Corporation in the following manner:
a “First Block” represents approximately 29% of Gfi Informatique’s•share capital and voting rights, sold at a price of 8.00 euros duringthe financial year as indicated below;
a “Second Block” represents approximately 15% of the share•capital and voting rights which is expected to be sold at a price pershare of 8.50 euros in Q2 2018.
In accordance with this commitment, the sale of the “First Block” wascarried out in two parts:
on June 19, 2017, Itefin Participations completed the sale of•8,063,789 shares, i.e. approximately 12% of Gfi Informatique’sshare capital and voting rights.
on July 10, 2017, Boussard & Gavaudan shareholders sold•11,231,313 Gfi Informatique shares namely (i) 8,702,227 GfiInformatique shares held by BG Select Investments Limited(Ireland), and (ii) 2,529,086 Gfi Informatique shares held byBoussard & Gavaudan Holding Limited, to Mannai Corporation i.e.approximately 17% of Gfi Informatique’s share capital and votingrights.
The acquisition of this “First Block” brings Mannai Corporation’sshareholding to 81.2% of the share capital.
CHANGES IN SHAREHOLDING
on May 22, 2017, Gfi Informatique carried out a partial transfer of•assets to Gfi Conseil et Intégration de Solutions (“CIS”). Inexchange for this transfer, Gfi Informatique received Gfi CIS sharesworth 87 thousand euros;
on June 14, 2017, Gfi Informatique carried out the acquisition of 30%•of the share capital of Somafor Sarl in the amount of 1,292 thousandeuros, and Somafor RCI in the amount of 83 thousand euros;
on November 30, 2017, Gfi Informatique acquired a 25% stake in•SL Process in the amount of 20 thousand euros.
Subsequent events to the closing date6.2.2.
PROPOSED FRIENDLY TAKEOVER BID FOR REALDOLMEN BY GFI INFORMATIQUEOn February 23, 2018, Gfi Informatique and Realdolmen, a leading ITservices provider in Belgium and Luxembourg, announced thesignature of a memorandum of understanding according to which GfiInformatique will file a voluntary and conditional takeover bid forRealdolmen with the Belgian Financial Services and Markets Authority(FSMA). The bid is a cash offer.
The transaction will deepen Gfi Informatique's footprint in Belgiumand Luxembourg, in line with its international expansion strategy.With around 1,250 highly trained employees, Realdolmen is anindependent ICT expert providing IT services to over 1,000 clients inBenelux. It supports clients throughout the complete ICT-lifecycle,combining support services in both infrastructure and applicationswith appropriate product offerings.
The main terms of this transaction are:
cash takeover bid for all the company's shares at an offer price of•€37.00 per share, giving a value of some €196 million;
the offer will be conditional on Gfi Informatique obtaining more•than 75% of Realdolmen's fully diluted share capital and votingrights;
the commitment of a group of entities and individuals to tender•their shares for the bid, amounting 21,94% of the share capital.
FINANCING : SIGNATURE OF A SYNDICATED LOAN AGREEMENT UNDER CONDITION In the context of the friendly takeover bid on Realdomen, GfiInformatique signed a syndicated loan agreement on February 21,2018, subject to the success of the takeover bid. The agreementprovides for:
a €200 million loan redeemable over five years (40% of the loan•will be repaid on maturity) to finance the acquisition ofRealdolmen;
a bridge financing for €110 million to refinance the existing•syndicated loan and, potentially, also the existing privateplacement. This loan will be refinanced by a new private placement;
a €50 million loan for acquisitions, redeemable over five years,•which represents new sources of funds for the Group's acquisitionsand investments;
a five-year €50 million revolving credit to fund the Group's working•capital requirements.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Accounting rules and principles6.2.3.
FOREWORDThe year-end financial statements have been prepared in accordancewith French accounting standards authority and especially with theregulation No. 2014-03 related to the General accounting principlesapplicable.
INTANGIBLE ASSETS
Business assets
The business assets have an unlimited lifetime and in compliance withaccounting rules, are subject to an impairment test once a year.
The value in use is determined using an estimate of discounted futurecash flows according to the following principles:
cash flows are based on five-year forecasts;•the discount rate is the weighted average cost of capital for the•sector;
the terminal value is calculated by totalling to infinity the•discounted cash flows, calculated according to a standardised flowand a perpetual growth rate. This growth rate is consistent with thedevelopment potential of the markets in which the concernedentity operates as well as with its competitive positioning.
If applicable, an impairment loss is recognised when the value in use islower than the value recorded on the balance sheet.
The share of business assets associated with customers is amortisedaccording to the straight-line method over five years.
Software and development costs
Software purchased is recognised at its acquisition cost and amortisedunder the straight-line method, according to its expected length ofuse from one to five years.
Software developed for internal use is recorded in the assets on thebalance sheet and amortised according to the straight-line method, asof its commissioning, over the anticipated useful life of five to tenyears.
Development costs are recorded in the assets on the balance sheetand amortised by the straight-line method, as of commissioning, overthe anticipated useful life of five years.
The assement of the value of the fixed assets is carried out each year,or more frequently if events or circumstances, internal or external,indicate that a write-down is likely to occur. Performancessignificantly lower than the budgets on which the framework of theevaluations previously carried out, are considered as an indication ofimpairment.
In particular, the carrying value of developpement costs activated iscompared to the value in use. The estimation of the value in use ismade via the discounted cash flow method, based on operationalbudget for the following year and expectation of changes in revenuefor the next four years. If applicable, an impairment loss is recognisedif the value in use is lower than the accounting value.
Accelerated amortisation is recognised on capitalised expenses forsoftware created for internal use and capitalised development costs.
PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment (tangible fixed assets) are recognisedat their acquisition cost.
Maintenance and repair costs are recognised as expenses of thefinancial year.
Depreciation is calculated using the straight-line method over theestimated useful lives. These useful lives are principally as follows:
hardware: 1 to 5 years;•motor vehicles: 5 years;•office equipment and other assets: 5 to 10 years.•
NON-CURRENT FINANCIAL ASSETS
Shareholdings and other long-term investments
Shareholdings appear on the balance sheet at their acquisition cost.An impairment is recorded when the book value is lower than theacquisition value.
The costs related to these acquisitions are posted to exceptional costs.
The book value is notably determined by taking into account the shareof Gfi Informatique in the equity of these companies and theprofitability prospects valued with reference to the discounted futurecash flows of these companies according to the following principles:
cash flows are based on five-year forecasts;•the discount rate is the weighted average cost of capital for the•sector;
the terminal value is calculated by totalling to infinity the•discounted cash flows, calculated according to a standardised flowand a perpetual growth rate. This growth rate is consistent with thedevelopment potential of the markets in which the concernedentity operates as well as with its competitive positioning.
Treasury shares acquired in the context of the share buybackprogramme with multiple goals are considered to be long-terminvestments. When their acquisition value is lower than the averageprices in the last month, an impairment is recorded equal to thedifference between the historic price and the average monthly price.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
Receivables associated with shareholdings
In terms of cash management, Gfi Informatique and its subsidiarieshave common financial interests. An optimisation of the managementof their flows, needs and excesses of cash is performed by the parentcompany. These transactions are regulated by cash agreements signedbetween Gfi Informatique and its subsidiaries.
The amounts made available to Gfi Informatique by its subsidiaries areremunerated on the basis of the quarterly average of the three-monthEuribor plus 1.05%.
The amounts loaned by Gfi Informatique to its subsidiaries areremunerated on the basis of the quarterly average of the three-monthEuribor plus 1.55%.
This rule is used to calculate current account interests close to theactual interest rates applied by banks and credit institutions.
The decision whether or not to impair the current account advancesand receivables linked to shareholdings is taken essentially in the lightof the companies’ shareholders’ equity and their profitability forecastscalculated on the basis of their discounted future cash flows.
CURRENT ASSETS
Trade receivables
IMPAIRMENT OF TRADE RECEIVABLES
Receivables for which the maturity has been exceeded by more than12 months are analysed on a case-by-case basis and impairedaccording to the risk of default, where applicable, with the exceptionof the receivables guaranteed by the company Euler Hermes Sfac andreceivables owed by government offices which are not subject todisputes.
Receivables subject to disputes are impaired on a case-by-case basis.
FACTORING OF TRADE RECEIVABLES
Gfi Informatique factors the majority of its trade receivables to BNPParibas Factor. An insurance partially covers default risk.
Trade receivables subject to drawing are kept in the “tradereceivables” item. A counterpart entry is posted to “financial debt”.
When there is a non-recourse factoring arrangement, receivables forwhich nearly all risks and benefits have been transferred not longerappear under “trade receivables”.
Other receivables
When there is a non-recourse agreement to sell these items,receivables for which nearly all risks and benefits have beentransferred do not appear under “Other receivables”.
CICE
The tax credit for competitiveness and employment (CICE) is a taxcredit granted by French tax authorities. The CICE is calculated as apercentage of gross salaries below a certain limit. It is recognised as adeduction from staff costs in the income statement.
Marketable securities
The marketable securities are shown on the balance sheet at theiracquisition value or at their book value if the latter is lower. Thevaluation is estimated globally by type of investment according to theofficial prices on the closing date of the financial year.
DEFERRED EXPENSESThe cost of issuing debt is recognised in deferred charges and spreadover the term of the borrowing.
The capital increase fees are recorded net of tax on the issuepremiums.
CONVERSION OF ITEMS IN FOREIGN CURRENCIESThe debts and receivables in foreign currencies are converted to theexchange rate as at December 31. The latent exchange rate lossescaused by this conversion are provisioned.
PROVISIONS FOR LIABILITIES AND CHARGESProvisions are made to cover the risks and costs that are clearlyspecified with respect to their purpose, if the events which haveoccurred make them probable and if they can be valued reliably.
Gfi Informatique does not provision its commitments relating tolong-term staff benefits. The pension commitments which appear inoff-balance-sheet commitments are valued according to theprovisions of ANC Recommendation no. 2014-03.
FINANCIAL INSTRUMENTSGfi Informatique subscribes derivatives in order to manage its interestrate and exchange rate risks. The hedge accounting method applied isin line with Article 372-2 of the PCG (French general accountingstandards). To be classified as a hedging instrument, the derivativesmust be intended to reduce the risk of a change in value of the itemhedged and there must be a correlation between the value of the itemhedged and the derivative instrument.
The rate spread on these financial instruments is recognised in thefinancial result.
REVENUESRules for the recognition of revenue are summarised below:
Technical assistance, consulting and systems 1.integration billed at cost
Revenue arising from these services is recognised as and when theservices are rendered. Revenue is determined by reference to thecontractually agreed price and to billable chargeable hours spent onthe job. Invoices to be raised or deferred income are recognised whenbilling is out of phase with the stage of completion.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Services invoiced for a fixed amount2.
Revenue arising from these services is recognised overtime on thebasis of costs incurred to date and costs that will be incurredsubsequently. When it is probable that costs will exceed revenue, theexpected loss is recognised immediately. Invoices to be raised ordeferred income are recognised when billing is out of phase with thestage of completion.
System integration relating to hardware 3.sales
The share of the revenue arising from the sale of hardware isrecognised on the transfer of the risks and rewards of ownership tothe buyer. This transfer generally occurs on delivery, except whenprojects are of an unusually complex nature and may presentparticular completion risks, in which case projects are considered intheir entirety and revenue is recognised according to the stage ofcompletion. In this case, the project is considered as a whole and therevenue is recorded overtime.
The share of revenue relating to services is recorded overtime on thebasis of the costs incurred and the costs remaining to be incurred.
Sales of software and hardware4.
Revenue from the sale of software packages and hardwareindependently of any services is recognised when risks have beentransferred to the buyer. This transfer occurs on delivery.
Maintenance5.
Revenue arising from maintenance is recognised prorata temporis overthe length of the contract.
INCOME TAX EXPENSEThe tax is calculated according to the rate applicable at the end of thefinancial year.
Tax pooling1.
Gfi Informatique is the head of a tax consolidation Group. The Groupcomprises all its French subsidiaries and sub-subsidiaries which werewholly-owned as at January 1 of the financial year.
Gfi Informatique recognises the tax cost for the entire tax group in theincome statement. Gfi Informatique does not return the tax savingmade as a result of the deficits of consolidated companies.
CIR2.
Research tax credits are recognised in tax income.
EXTRAORDINARY INCOME (LOSS)The extraordinary costs and income consist of items which, due totheir nature, their unusual character and non-recurrence, cannot beconsidered to be inherent to the operating activities of the Company.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
Notes to the balance sheet6.2.4.
Intangible assetsNOTE 1
(in thousands of euros) 12.31.16 Increases Decreases
Effect ofmergers and
reclass. 12.31.2017
Set-up costs 437 - - - 437
Business assets 101,112 - - - 101,112
Customer Relations 16,160 - - - 16,160
Development costs 3,232 - - 1,162 4,394
Computer software 22,531 982 (1) 2,628 26,140
Intangible assets – work in progress 4,263 3,901 - (3,790) 4,374
GROSS VALUES 147,735 4,883 (1) - 152,617
Set-up costs 437 - - - 437
Business assets - - - - -
Customer Relations 9,381 609 - - 9,990
Development costs 943 930 - - 1,873
Computer software 13,600 2,959 - - 16,559
Intangible assets – work in progress - - - - -
DEPRECIATION 24,361 4,498 - - 28,859
Business assets 5,534 - - - 5,534
Computer software - 800 - - 800
IMPAIRMENT LOSSES 5,534 800 - - 6,334
NET VALUES 117,840 (415) (1) - 117,424
The impairment of computer software relates to the ERP Théseus, which is planned to be scrapped following the scheduled change of ERP withinthe Group.
The intangible assets - work in progress include both Software projects for internal use and development costs. (See Note 12 – Capitalisedproduction costs).
Customer Relations is broken down as follows:
(in thousands of euros) Acquisition Date Gross value
12.31.2017
Expensed 2017 Acc. Deprec. Net value
Gfi BUS – Customer Relations 10.01.2015 14,094 609 7,924 6,170
Gfi IES – Customer Relations 07.01.2006 1,066 - 1,066 -
Euvoxa – Customer Relations 01.01.2009 1,000 - 1,000 -
TOTAL 16,160 609 9,990 6,170
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Property, plant and equipmentNOTE 2
(in thousands of euros) 12.31.16 Increases DecreasesEffect of mergers
and reclass. 12.31.2017
Vehicles 131 - - - 131
Plant, equipment and tools 14,115 2,934 (3,997) 4,138 17,190
Office materials and furniture 4,041 665 (88) 25 4,643
IT hardware 3,193 1,067 (992) (11) 3,257
Assets –work in progress 2,184 3,109 - (4,163) 1,130
GROSS VALUES 23,664 7,775 (5,077) (11) 26,351
Vehicles 131 - - - 131
Plant, equipment and tools 6,366 1,705 (380) - 7,691
Office materials and furniture 1,644 420 (56) - 2,008
IT hardware 2,879 334 (182) (4) 3,027
DEPRECIATION 11,020 2,459 (618) (4) 12,857
NET VALUES 12,644 5,316 (4,459) (7) 13,494
Non-current financial assetsNOTE 3
(in thousands of euros) 12.31.16 Increases DecreasesEffect of mergers
and reclass. 12.31.2017
Shareholdings 154,167 3,119 - - 157,286
Treasury shares 962 832 (762) - 1,032
Payment of non-capitalised contribution 5,823 - - - 5,823
Receivables associated with shareholdings 77,235 54,234 (47,288) - 84,181
Loans 3,657 1,198 (154) - 4,701
Deposits 3,498 465 (116) - 3,847
Other long-term receivables 1,078 829 (115) - 1,792
GROSS VALUES 246,420 60,677 (48,435) - 258,662
Shareholdings 17,902 5,238 9,443 - 13,697
Payment of non-capitalised contribution 5,823 - - - 5,823
Receivables associated with shareholdings 12,385 900 - - 13,285
IMPAIRMENT LOSSES 36,110 6,138 9,443 - 32,805
NET VALUES 210,310 54,539 (38,992) - 225,857
SHAREHOLDINGSThe shareholdings are detailed in the table of subsidiaries andshareholdings shown in Note 23. The change in the gross value ofequity investments breaks down as follows:
shareholdings acquired includes:•Impaq UK shares in the amount of 1,637 thousand euros,•Somafor Sarl shares in the amount of 1,292 thousand euros,•
Somafor RCI shares in the amount of 83 thousand euros,•capital increase carried out by Gfi Conseil et Intégration de•Solutions (“CIS”) in the amount of 87 thousand euros,
SL Process shares in the amount of 20 thousand euros.•The impairment of shareholdings taking into account the inventoryvalue determined at December 31, 2017 based on five-year forecastswith a discount rate of 9% and 12%, and the net equity of subsidiariesamounted to 13,697 thousand euros.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
These are broken down as follows:
Gfi International for 2,457 thousand euros;•Awak’IT for 5,650 thousand euros;•Gfi Informatique Entreprise Solutions for 3,390 thousand euros;•Gfi Impaq UK for 1,637 thousand euros;•Gfi Benelux for 235 thousand euros;•Gfi Informatique Télécom for 326 thousand euros;•Dacrydium Interactive Paris for 2 thousand euros.•
TREASURY SHARES
Treasury shares totalled 1,032 thousand euros, corresponding to158,825 shares and representing 0.2% of the share capital. During thefinancial year:
106,173 shares were purchased at an average price of 7.84 euros;•96,348 shares were sold at an average price of 7.91 euros.•
PAYMENT OF NON-CAPITALISED CONTRIBUTIONThe payment of non-capitalised contribution relates to a “quasicapital” payment of 5,823 thousand euros made to the Germansubsidiary Gfi Informatik Holding GmbH. This amount has been fullyimpaired.
RECEIVABLES ASSOCIATED WITH SHAREHOLDINGSReceivables associated with shareholdings refer to the currentaccounts of subsidiaries under the Group’s cash managementagreements.
The impairments for receivables associated with shareholdingsamounts to 13,285 thousand euros related to the current accounts of:
Gfi Informatik Holding GmbH for 12,385 thousand euros;•Gfi Benelux for 900 thousand euros.•
Trade receivablesNOTE 4
(in thousands of euros) 12.31.2017 12.31.2016
Customers excluding the Group 18,644 17,917
Group customers 10,480 7,682
Receivables sold to factoring companies 121,737 121,347
Invoices to be issued 85,559 81,212
Bad debts 311 312
Bills receivable 13 949
TRADE RECEIVABLES, GROSS 236,744 229,419
Depreciation on bad debts (410) (407)
NET TRADE RECEIVABLES 236,334 229,012
All of the trade receivables and associated accounts have a maturity of less than one year.
Trade receivables sold under a non-recourse factoring contract represent 5,190 thousand euros, including taxes.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Other receivablesNOTE 5
(in thousands of euros) 12.31.2017 12.31.2016
National and other gov’t bodies
CICE tax credit 985 1,104
Other tax credits of the tax consolidation group 24,401 26,710
Value added tax 12,936 9,540
Other taxes 465 357
Tax on dividends receivable 459 -
Subsidiaries
Subsidiaries in tax consolidation, income tax 2,064 1,821
Group current accounts in debit 81,625 52,290
Employee receivables 928 788
Sundry debtors 453 507
Credits to be received 161 617
TOTAL 124,476 93,734
Depreciation of other receivables (3,305) -
TOTAL OTHER RECEIVABLES 121,171 93,734
The depreciation of receivables is related to the following Groupcurrent accounts in debit:
Awak’IT for 2,883 thousand euros;•Gfi Informatique Télécom for 422 thousand euros.•
TAX CREDITS OF THE TAX CONSOLIDATION GROUP
Tax credit for competitiveness and 1.employment (CICE)
Gfi Informatique’s CICE receivable for 2017 was 7,967 thousand eurosand was sold without recourse. In accordance with accountingprinciples, it appears in cash for the amount received.
Research tax credits (CIR)2.
Research tax credits include the portion recognised by the Companydue to its subsidiaries in the tax consolidation Group, in the amount of8,482 thousand euros. The offsetting entry is shown in liabilities as“Tax liabilities” in the same amount (see Note 10 Operating and otherliabilities).
MATURITIES All other receivables have a maturity of less than one year, with theexception of receivables from tax savings from reasearch tax credit(CIR) relating to the 2015-2017 period, in the amount of24,401 thousand euros.
Accrual adjustmentsNOTE 6
PREPAID EXPENSESThe prepaid expenses correspond to the operating costs incurredduring the financial year which are attached to the following financialyear.
DEFERRED EXPENSESThe deferred expenses over several financial years relate to theexpenses incurred on subscription of:
the bonds of June and August 2014;•the syndicated loan of October 2015;•the amendment of the October 2015's loan in July 2017.•
These costs are amortised over the respective lifetimes of these loans.
184 Gfi Informatique - 2017 REGISTRATION DOCUMENT
CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
(in thousands of euros)
Grossvalues
12.31.2016
Acc.Deprec.
12.31.2016Net value
12.31.2016 Increase Deprec Reclassification CPNet value
12.31.2017
2014 bond issue costs 320 (147) 173 - (58) - 115
2015 loan issue costs 864 (213) 651 - (174) - 477
2017 loan issue costs - - - 177 (23) - 154
TOTAL DEFERRED EXPENSES 1,184 (360) 824 177 (255) - 746
EquityNOTE 7
(in thousands of euros)
Beforeallocation at
12.31.2016 VariationDividend
distribution
Allocation of2016 net
income2017 net
income
Beforeallocation at
12.31.2017
Share capital 133,141 - - - - 133,141
Issue premiums 71,004 - - - - 71,004
Merger premiums 315 - - - - 315
Legal reserve 8,083 - - 1,160 - 9,243
Retained Earnings 34,918 - - 12,068 - 46,986
Profit for the year 23,191 - (9,963) (13,228) 24,104 24,104
Regulated provisions 7,685 925 - - - 8,610
TOTAL 278,337 925 (9,963) - 24,104 293,403
SHARE CAPITAL
At December 31, 2017, share capital was 133,141,542 euros,consisting of 66,570,771 shares with a par value of 2 euros. Theseshares are all of the same category. Treasury shares do not result inthe payment of dividends.
REGULATED PROVISIONSThe regulated provisions refer to the additional accumulatedamortisation recorded for Software used internally and capitaliseddevelopment costs.
FREE SHARE PLAN
Rights to award free shares: January 21, 2016 plan
On January 21, 2016 the Board of Directors, availing themselves of theauthorisation granted by the Extraordinary General Meeting ofShareholders on November 18, 2015, decided to award free shares ofGfi Informatique stock to certain employees.
In total, 310,000 free shares were awarded to the beneficiariesdesignated by name by the Board of Directors subject to certainconditions:
2016 authorisation to award free shares
The Board of Directors' meeting on February 21, 2018 approving theresults for the financial year ended December 31, 2017, noted that theconditions specified in the Plan of January 21, 2016 had been partiallymet, due to exceptional and unforeseeable events, and on a proposalby the Appointments and Compensation Committee authorised thefinal allocation of 77,500 free shares.
PROPOSED ALLOCATION OF INCOMEThe financial year 2017 income allocation proposal reads as follows:
“The General Meeting, having satisfied the quorum and majorityrequirements for Ordinary General Meetings:
recorded a profit for the financial year ended December 31, 2017 of•24,104 thousand euros;
recorded a distributable profit, after allocation to the legal reserve,•of 69,885 thousand euros;
decided to allocate the distributable profit as follows:•9,985 thousand euros as a dividend to shareholders,•59,900 thousand euros in retained earnings.”•
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Provisions for risks and costsNOTE 8
CHANGES IN PROVISIONS FOR RISKS AND COSTS
(in thousands of euros) 12.31.16 Expensed Reversals usedReversalsnot used
Effect ofmergers and
reclass. 12.31.2017
Labour court litigation and other labour disputes 1,030 235 (370) - - 895
Tax and social security contingencies 1,718 - - (1,697) - 21
TOTAL PROVISIONS 2,748 235 (370) (1,697) - 916
Depreciation and reversals of provisions for risks are recorded in extraordinary income (loss).
The provisions for tax and social security contingencies which were no longer applicable were reversed during the financial year.
Financial liabilitiesNOTE 9
The table below gives a breakdown of the maturity dates of loans and debts as at December 31, 2017:
(in thousands of euros) 31.12.2017 1 yearMaturities of 1 to
5 years 31.12.2016
Bonds 25,000 - 25,000 25,000
Accrued interest on bond debt 14 14 - 14
BONDS 25,014 14 25,000 25,014
Medium-term loans and debts from banks 79,209 22,926 56,283 78,080
Accrued interest not yet due 14 14 - 5
Factor drawing 16,782 16,782 - 5,857
Bank overdrafts 29,012 29,012 - 8,330
LOANS AND DEBTS FROM BANKS 125,017 68,734 56,283 92,272
Debts associated with Group shareholdings 40,048 - 40,048 39,361
Deposit received (ITN/Filhet Allard) 1,152 1,152 - 1,152
Outstanding interest incurred towards subsidiaries 82 82 - 84
DEBTS ASSOCIATED WITH SHAREHOLDINGS 41,282 1,234 40,048 40,597
TOTAL 191,313 69,982 121,331 157,883
BOND ISSUE
Bond issue characteristics
Number of bonds issued 250
Nominal value (in euros) 100,000
Issue price (in euros) 100,000
Total amount of the issue (in euros) 25,000,000
Interest rate (paid annually in arrears) 3.947%
Anticipated redemption date 12.27.2019
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
BANK LOANS
Syndicated loans
As part of the Company’s bank debt restructuring:
the syndicated loan for a total initial amount of 82.6 million euros•amounts to 68.8 million euros at December 31, 2017;
on July 27, 2017, the Company signed an amendment to the•syndicated loan providing a sum of 12 million euros leading to adrawn down of 10.4 million euros.
Bank covenants
The credit agreement of October 9, 2015 with a pool of bankinginstitutions and the bonds feature so-called default covenants in theform of financial covenants that are measured at the yearly andhalf-yearly reporting dates.
As part of its main bank loan, the Company committed to complyingwith certain ceilings on net investments.
Based on the 2017 balance sheet and performance, Gfi Informatique isbelow the thresholds set under these contracts and the covenants havebeen adhered to at the date of publication of this document. Furtherdetails can be found in Note 6 to the consolidated financial statements.
Operating and other liabilitiesNOTE 10
(in thousands of euros) 31.12.2017of which accrued
expenses 31.12.2016
ADVANCES AND PAYMENTS ON ACCOUNT 762 - 552
Trade payables 39,932 - 32,507
Invoices not received 35,287 35,287 29,828
TRADE PAYABLES 75,219 35,287 62,335
Social security debts
Works Council and remuneration due 370 - 756
Provision for paid holidays, 13th month and ARTT 22,869 22,869 22,482
Provision for bonus 1,833 1,833 2,641
Other debts towards staff 770 770 1,642
Debts towards social-security bodies
Social security 20,401 - 20,559
Social security costs on provisions for paid holidays, 13th month and ARTT (work-time organisation) 11,245 11,207 11,017
Social security costs on provisions for bonus 897 897 1,294
Organic provision 1,056 1,056 1,044
Other provisions for costs (bonus, apprenticeship tax, construction tax, etc.) 7,092 7,130 7,399
Tax debts
Value added tax 49,073 49,073 46,988
Subsidiaries in tax consolidation, tax credits due 8,482 - 7,091
French government, income tax 177 - 177
CET 91 91 940
TVTS 174 174 41
VAT dispute - - 2,908
TAX AND SOCIAL SECURITY LIABILITIES 124,530 95,100 126,979
Suppliers of fixed assets 814 - 672
Invoices not received for fixed assets 1,229 1,229 -
DEBTS ON FIXED ASSETS AND ASSOCIATED ACCOUNTS 2,043 1,229 672
Credits notes to be issued 7,708 7,708 7,510
Miscellaneous creditors 918 918 1,404
OTHER DEBTS 8,626 8,626 8,914
All the operating liabilities have a maturity of less than one year, with the exception of the tax credit due to the consolidated subsidiaries. Thematurity schedule for this amount mirrors that of the related receivables (see Note 5).
187Gfi Informatique - 2017 REGISTRATION DOCUMENT
CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Notes to the income statement6.2.5.
RevenueNOTE 11
(in thousands of euros) 31.12.2017 France Foreign
Sales of goods 660 569 91
Sales of services 683,619 664,282 19,337
REVENUE 684,279 664,851 19,428
in % 100% 97% 3%
Capitalised production costsNOTE 12
Capitalised production amounted to 3,632 thousand euros, of which:
2,137 thousand euros were for capitalised development costs;•1,495 thousand euros were for fixed assets intended for in-house use.•
Reversals of impairment, provisions and transferred NOTE 13expenses
(in thousands of euros) 2017 2016
Reversed depreciation of current assets 147 274
Reversed depreciation provisions - -
Transferred expenses 8,059 8,830
TOTAL 8,206 9,104
Transferred expenses mainly include the following items:
employee redundancy costs in the amount of 3,879 thousand•euros;
audit and due diligences fees to acquire new shareholdings in the•amount of 1,754 thousand euros;
moving costs in the amount of 657 thousand euros;•miscellaneous other operating expenses in the amount of•577 thousand euros.
Amortisation and depreciationNOTE 14
(in thousands of euros) 2017 2016
Amortisation on intangible assets note 1 4,498 5,513
Amortisation on property, plant and equipment note 2 2,459 2,033
Amortisation of deferred expenses note 6 255 232
Depreciation on current assets 165 116
TOTAL 7,377 7,894
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
Financial resultNOTE 15
The items composing the financial result are as follows:
(in thousands of euros) 2017 2016
Revenue from shareholdings 10,000 7,000
Revenue from current accounts 2,645 1,665
Net income on transfers of marketable securities - 1
Foreign exchange gains 71 4
Other financial income 15 50
Reversals of impairments on shareholdings 9,443 6,000
Reversals of other financial provisions - -
FINANCIAL INCOME 22,174 14,720
Interests on loans (2,073) (1,481)
Interests on current accounts (308) (413)
Bank interests (432) (315)
Factoring interests (342) (200)
Foreign exchange losses (36) (108)
Impairments on shareholdings 5,238 (6,434)
Impairments of Group current accounts and receivables associated with shareholdings 4,206 (257)
Other financial costs (66) (245)
FINANCIAL COSTS (12,701) (9,453)
FINANCIAL RESULT 9,473 5,267
REVENUE FROM SHAREHOLDINGSGfi Informatique recorded 10,000 thousand euros of dividends in2017, broken down as follows:
Gfi Progiciels paid dividends in the amount of 4,000 thousand euros;•Gfi Informatique-Production paid dividends in the amount of•3,000 thousand euros;
Gifimo paid dividends in the amount of 300 thousand euros;•Gfi NV paid dividends in the amount of 500 thousand euros;•Gfi PSF paid dividends in the amount of 200 thousand euros;•Gfi Portugal must pay dividends in the amount of 2,000 thousand•euros.
IMPAIRMENTS ON SHAREHOLDINGSImpairments on shareholdings break down as follows:•Awak'IT for 1,649 thousand euros;•Gfi Informatique Entreprise Solutions for 1,390 thousand euros;•Impaq UK for 1,637 thousand euros;•Gfi Informatique Telecom for 327 thousand euros;•Gfi Benelux for 235 thousand euros.•
The reversal of the provision on shareholdings concerns the subsidiaryGfi International.
The impairment losses on Group current accounts and receivablesattached to shareholdings concern:
Awak'IT for 2,883 thousand euros;•Gfi Informatique Telecom for 422 thousand euros;•Gfi Benelux for 900 thousand euros;•Gfi Informatique Holding GmbH for 1 thousand euros.•
189Gfi Informatique - 2017 REGISTRATION DOCUMENT
CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Extraordinary income (loss)NOTE 16
The items comprising extraordinary income are as follows:
(in thousands of euros) 2017
2017Extraordinary
income
2017Extraordinary
expenses
Costs of employee redundancies (3,879) - (3,879)
Costs of audit and due diligence (1,754) - (1,754)
Miscellaneous fees and charges paid for extraordinary transactions (577) - (577)
Rent and charges paid for unoccupied offices (657) - (657)
Costs of tax adjustments (16) - (16)
Other 54 54 -
EXTRAORDINARY INCOME AND EXPENSE FOR OPERATING ACTIVITIES (6,829) 54 (6,883)
Capital gains and losses on the purchase of treasury shares 3 18 (15)
Disposal of fixed assets, selling price and NAV of the items sold (95) 4,364 (4,459)
EXTRAORDINARY INCOME AND EXPENSE FOR INVESTMENT ACTIVITIES (92) 4,382 (4,474)
Allowances and reversals of provisions for liabilities and charges 1,400 1,400 -
Allowances and reversals of accelerated depreciation (924) 1,772 (2,696)
Allowances and reversals of provisions for risks linked to labour court litigation and other labour disputes 135 370 (235)
Other allowances and reversals (503) 297 (800)
ALLOWANCES AND REVERSALS OF EXTRAORDINARY PROVISIONS 108 3,839 (3,731)
EXTRAORDINARY INCOME (LOSS) (6,813) 8,275 (15,088)
COSTS OF EMPLOYEE REDUNDANCIESEmployee redundancy costs linked to restructuring operations are notconsidered to be inherent in the Company’s operations. These costs,net of the related provision reversals, amounted to 3,744 thousandeuros for financial year 2017.
COSTS OF AUDIT AND DUE DILIGENCEThese costs relate to due diligence and audits of target companies inconnection with our external growth strategy. They totalled1,754 thousand euros.
MISCELLANEOUS FEES AND CHARGES PAID FOR EXTRAORDINARY TRANSACTIONSThese costs relate to fees considered as not inherent to theCompany’s operating activity. They totalled 577 thousand euros.
RENT AND CHARGES PAID FOR UNOCCUPIED OFFICESThese costs relate to the various moves and related chargesconcerning premises that remained unoccupied during the financialyear, for a total of 657 thousand euros.
Employee profit sharingNOTE 17
Under the agreement entered into by the Economic and Social Unit(ESU) comprising Gfi Informatique, Gfi Progiciels and GfiInformatique-Production, the employee profit sharing for the financialyear is not calculated according to Common law rules unless the latterwould be more advantageous for employees.
The Company will distribute 738 thousand euros in respect of profitsharing for financial year 2017 to ESU employees.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
Corporation taxNOTE 18
For the financial year, the Company recorded an after-tax income of 8,236 thousand euros, which is broken down below:
(in thousands of euros) Current Extraordinary 2017
Net accounting profit/loss 30,917 (6,813) 24,104
Income tax (8,236) - (8,236)
ACCOUNTING INCOME BEFORE INCOME TAX AND PROFIT SHARING 22,681 (6,813) 15,868
Reintegrations 1,211 - 1,211
Deductions (19,045) (2,935) (21,980)
TAXABLE BASIS PASSED TO THE TAX CONSOLIDATION GROUP 4,847 (9,748) (4,901)
Income tax, income from integrated companies 2,064
Income tax, tax Group charge (50)
TOTAL INCOME TAX 2,014
Taxes on dividends paid and others 459
Carry-back -
Apprenticeship training tax credit -
Family tax credit -
Research tax credits 5,763
TOTAL CORPORATION TAX 8,236
TAX POOLINGIn France, the Gfi Informatique tax consolidation Group atDecember 31, 2017 included the net profit or loss for the period of thefollowing 16 companies:
Gfi Informatique, Gfi Progiciels, Gfi Infogen Systems, GfiInformatique-Production, Gfi Informatique Entreprise Solutions, GfiBusiness Transformation, Addstones, Cognitis France, Awak’IT, TikawaProductions, ITN Consultants, Gfi Informatique et Télécom, S.C.I.Gifimo, Business Document, Novulys, Metaware Technologies.
TAX DEFICITThe Company has a carryable tax deficit:
of 38,169 thousand euros for the tax consolidation of which it is•the parent company;
of 2,085 thousand euros corresponding to its own losses.•In connection with the tax consolidation Group, Gfi Informatique usedtax losses of the following consolidated subsidiaries: Gfi Progiciels, GfiInformatique Télécom, Gfi Infogen Systems, Gfi InformatiqueEntreprise Solutions, Addstones, Cognitis France, MetawareTechnologies, Novulys, Tikawa Productions, Awak’IT and ITNConsultants, and did not provision for the return of the tax savingsrealised.
INCREASE AND DECREASE OF FUTURE TAX LIABILITY
(in thousands of euros) Basis Taxes
Solidarity contribution 1,063 354
Participation in construction efforts - -
TOTAL REDUCTIONS 1,063 354
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Other information6.2.6.
Off balance sheet commitmentsNOTE 19
OFF BALANCE SHEET COMMITMENTS RELATED TO OPERATING ACTIVITIES
(in thousands of euros) 2017 2016
Rent payment guarantees 158 385
Guarantees on customer contracts 425 437
Guarantees on supplier contracts 41 33
BANK GUARANTEES 624 855
Bank guarantee 114 1,000
GUARANTEES GRANTED TO SUBSIDIARIES 114 1,000
On real estate leases 37,779 33,531
On equipment leases 6,201 3,146
LEASE LIABILITIES 43,980 36,677
On retirement indemnities 26,648 22,981
OTHER 26,648 22,981
Guarantees granted to subsidiaries
Bank guarantees were given to:
Gfi Progiciels for 34 thousand euros;•Roff for 80 thousand euros.•
Commitments on real estate leases
As regards its commitments on real estate leases, the Companyprimarily holds the following contracts:
lease for the registered office in Saint-Ouen: renewed on•October 26, 2015 for a six-year fixed term agreeement. AtDecember 31, 2017, the obligation was 14.6 million euros;
lease for the Toulouse site: signed in 2012 for a six-year fixed term•agreement. At December 31, 2017, the obligation was 3.7 millioneuros;
lease for Rue Mozart in Clichy: signed in 2014 for a six-year fixed•term agreement. At December 31, 2017, the obligation was3.5 million euros;
the lease agreement for the Meudon site, signed in 2015, is a•nine-year fixed term agreement. At December 31, 2017, theobligation was 3.2 million euros;
the lease agreement for the Lyon site, signed in 2016, is a six-year•fixed term agreement. At December 31, 2017, the obligation was3.1 million euros.
Commitments on equipment leases
The payments still outstanding on equipment rental contracts as atDecember 31, 2017 are as follows:
less than one year: 2,624 thousand euros;•past one year: 3,577 thousand euros.•
Commitments on finance leases
There were no financial lease contracts in place on December 31,2017.
Construction tax
The Company planned to pay the tax for construction for FY2017 bymaking a payment to an authorised collection agency in the form of along-term loan. This payment will be made at the end of 2018 in theamount of 1,125 thousand euros.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements6
Commitments in respect of retirement indemnities
Gfi Informatique’s commitments for retirement indemnities stood at26,648 thousand euros as at December 31, 2017 compared to22,981 thousand euros as at December 31, 2016.
These commitments are estimated using the method of projectedcredit units. The projected unit credit sees each period of service asgiving rise to an additional unit of benefit entitlement applying theplan’s vesting formula, taking into account the linearization effectwhen the rights do not vest uniformly over subsequent vestingperiods.
Future payments corresponding to the benefits granted to employeesare determined using various assumptions (rate of increase in salaries,retirement age, mortality, etc.) and these defined benefit obligationsare then discounted to their present value using as discount rate themarket yields on high quality corporate bonds.
The legal and conventional indemnities are calculated for each of thesalaried employees of the Group present according to their theoreticalseniority on the date of their retirement, in accordance with theapplicable standards. These commitments are determined based onthe assumption that in all cases employees will leave at their owninitiative. The average rate of social security costs applied is 47%. Thecalculation of the commitments includes:
an attendance coefficient based on turnover by age bracket; the•average in 2017 was 10.0% to 10.4% depending on the company;
a wage increase rate of 2.25% to 3.00%;•2011-2013 INSEE mortality tables for both genders.•
The life of the plan is estimated at 14 years, the discount rate used is1.51% (versus 1.75% at the end of 2016).
As regards sensitivity, a drop in this discount rate of 0.25 basis pointwould generate a 3% increase in the commitment.
OFF BALANCE SHEET COMMITMENTS RELATING TO FINANCING ACTIVITIES
Collateral pledged
On October 9, 2015, Gfi Informatique pledged all the shares it held inits subsidiary Gfi Progiciels to the banking pool under the creditagreement dated October 9, 2015.
Commitments given in the context of financing operations
CONTRACTUAL LIMITATIONS TO THE GROUP’S DIVIDEND PAYOUT POLICY
Within the framework of its main bank loan in France, the Group iscommitted to adopting a dividend payout policy that takes intoaccount the debt repayment requirements and payment of relatedinterest. This dividend policy is limited to 40% of net incomeattributable to the Group if the R2 ratio is greater than 1.25. Furtherdetails can be found in Note 6 to the consolidated financialstatements.
COVENANTS
Within the framework of its main bank loan in France, the Group iscommitted to complying with so-called default covenants in the formof financial covenants that are measured at the yearly and half-yearlyclosing. These commitments are presented in Note 6.4 to theconsolidated financial statements under “Liquidity risk”.
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Rate hedges
At December 31, 2017, Gfi Informatique held the following financial instruments:
(in thousands of euros) Type of instrument
Dateentered into
Date ofexpiration
CounterParty
Hedging12/30/2017 2018 2019 2020
Fairvalue
5-year fixed rate swap, 0% floor over 3 years 12.31.201509.30.2020 CACIB 13,560 4,520 4,520 4,520 (51.1)
Fixed rate swap, 0% floor over 3 years 09.29.201709.30.2020 CACIB 11,829 3,943 3,943 3,943 (5.2)
Fixed rate swap, 0% floor over 3 years 12.29.201709.30.2020 CACIB 5,216 - 2,608 2,608 (3.7)
CAP with strike at 0.25% 12.31.2015 09.28.2018 CACIB 9,000 9,000 - - -
39,605 17,463 11,071 11,071 (60)
Gfi Informatique’s exposure to variation risks in market interest ratesis linked to the level of its financial indebtedness. Interest ratemanagement forms an integral part of debt management. The Groupdecides what proportion of the debt bears fixed interest rates andwhat proportion bears variable rates. With this aim, the Group isimplementing hedging instruments. Swaps and cap agreements arethe instruments most frequently used for this purpose. As atDecember 31, 2017, once hedging instruments had been taken intoaccount, 63% of the Company’s debt with banks was at a fixedinterest rate.
Currency risks
The currency risk of commercial transactions is not hedged as mosttransactions are made within the euro zone.
Very few intra-group transactions are denominated in currencies otherthan the euro. When Gfi Informatique invests directly or indirectly in aforeign subsidiary, the investment is generally made in the currency ofthe beneficiary country.
To the Company’s knowledge, no off-balance sheet commitmentclassed by law as material has been omitted from the presentation.
Remuneration of DirectorsNOTE 20
The total amount of the compensation and benefits of any kind paid during financial years 2017 and 2016 to members of the administrative andmanagement bodies is broken down as follows:
(in thousands of euros)Fixed
remunerationVariable
remunerationBenefits in
kind Directors’ feesTotal
remuneration
2017 836 316 4 224 1,380
2016 836 336 4 230 1,406
Average workforceNOTE 21
The average number of employees of the Company is as follows:
Average workforce 2017 2016
Managerial staff 5,091 5,069
Employees, technicians and supervisory staff 507 464
TOTAL 5,598 5,533
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Notes to the corporate financial statements6
Information regarding the related partiesNOTE 22
The items relating to the related entities and shareholdings are summarised as follows:
(in thousands of euros) 2017
Gross shareholdings 158,318
Payment of non-capitalised contribution 5,823
Receivables associated with shareholdings 84,181
Impairment of non-current financial assets 32,805
Deposit and security paid -
Deposit and security received (1,152)
Trade receivables 13,353
Trade payables (17,924)
Other receivables: sundry debtors -
Other receivables: credit notes to be received 90
Other receivables: tax consolidation -
Other debts: subsidiaries’ research tax credit (8,482)
Other debts: credits notes to be issued (1,489)
Current accounts in debit 81,625
Depreciation of current accounts in debit (3,305)
Current accounts in credit (38,133)
Debts associated with shareholdings (1,990)
Operating income 48,789
Operating costs (177,415)
Financial income 22,088
Financial costs (9,751)
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CORPORATE FINANCIAL STATEMENTS
Notes to the corporate financial statements
6
Table of subsidiaries and shareholdingsNOTE 23
The subsidiaries of Gfi Informatique SA are listed below:
Company name Registered office Siren No.
FRENCH COMPANIES Gfi Progiciels SAS 145, boulevard Victor-Hugo 93400 Saint-Ouen 340 546 993
Gfi Informatique-Production SA 145, boulevard Victor-Hugo 93400 Saint-Ouen 428 286 496
Gfi Informatique Entreprise Solutions SAS 145, boulevard Victor-Hugo 93400 Saint-Ouen 315 930 578
Gfi Business-Transformation SAS 145, boulevard Victor-Hugo 93400 Saint-Ouen 790 077 937
Gfi Informatique &Télécom 145, boulevard Victor-Hugo 93400 Saint-Ouen 501 707 293
Gfi Conseils et Intégration de Solutions’SASU 145, boulevard Victor-Hugo 93400 Saint-Ouen 822 269 551
S.C.I. Gifimo 145, boulevard Victor-Hugo 93400 Saint-Ouen 350 934 139
Awak’IT (S&I) SAS 59-61 quai Alphonse Le Gallo 92100 Boulogne Billancourt 412 013 922
Gfi 7 SARL 145, boulevard Victor-Hugo 93400 Saint-Ouen 808 372 924
Gfi 8 SARL 145, boulevard Victor-Hugo 93400 Saint-Ouen 808 373 161
Gfi 9 SARL 145, boulevard Victor-Hugo 93400 Saint-Ouen 808 373 237
Somafor SARL 145, boulevard Victor-Hugo 93400 Saint-Ouen 389 150 137
SL Process 6 B Avenue de l’Europe 78117 Toussus Le Noble 819 182 387
Cognitis France SAS 145, boulevard Victor-Hugo 93400 Saint-Ouen 348 786 799
Dacrydium Interactive Paris nc nc nc
FOREIGN COMPANIES Gfi Portugal – Tecnologias de Informaçao, SA Ed. Atlantis, Av. D. João II, lote
1.06.2.2 – Parque das Nações1990-095 Lisboa PT502726890
Gfi Benelux Square de Meeûs 38/40 B(1000) Brussels 0 427 608 266
Gfi PSF SA 13-15 Parc d‘activités L-8308 Capellen B 52 391
Gfi NV Square de Meeûs 38/40 B(1000) Brussels 0 450 798 491
Gfi International Chemin des Aulx, 10 1228 Plan-les-Ouates CH-660 0 703 000-2
Holding Gfi Informatique Maroc Parc Casa Nearshore, Sh. 2.2. (1100,) Bd Al Qods, Sidi Maârouf
20190 Casablanca 113 607
Gfi Maroc Offshore Parc Casa Nearshore, Sh. 2.2. (1100,) Bd Al Qods, Sidi Maârouf
20190 Casablanca 163 083
Impaq UK Limited 9 Bridle Close Surbiton Road, Kingston upon Thames
Surrey KT1 2JW 05054175
Somafor RCI SA 06 II Plateaux des Vallons 06 BP 1293 Abidjan CI-ABJ-(1989)-B(33816)
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Notes to the corporate financial statements6
TABLE OF SUBSIDIARIES AND SHAREHOLDINGS
(in thousands of euros)Share
capital
Reserves andretained earnings
beforeappropriation
Share ofcapital held
(%)
A- SUBSIDIARIES (AT LEAST 10% OF THE CAPITAL HELD BY THE COMPANY)
French companies
Gfi Progiciels SAS France 7,978 5,273 100.00%
Gfi Informatique-Production SA France 10,910 9,377 100.00%
GFI Informatique Entreprise Solutions SAS France 347 (500) 100.00%
Gfi Business Transformation SAS France 2,037 959 100.00%
Gfi Informatique & Télécom France 340 (1,418) 100.00%
Gfi Conseil et Intégration de Solutions SASU France 125 - 70.00%
S.C.I. Gifimo France 1 - 100.00%
Awak’it (S&I) SAS France 102 (1,703) 100.00%
Gfi 7 SARL France 1 - 100.00%
Gfi 8 SARL France 1 - 100.00%
Gfi 9 SARL France 1 - 100.00%
Somafor SARL France 8 437 100.00%
SL Process France 10 nc 25.00%
Cognitis France SAS France 3,500 3,072 100.00%
Dacrydium Interactive Paris France nc nc nc
Foreign companies
Gfi Portugal - Tecnologias de Informaçao, SA Portugal 1,500 2,482 100.00%
Gfi Benelux Belgium 225 (1,898) 100.00%
Gfi PSF SARL Luxembourg 1,000 332 100.00%
Gfi NV Belgium 62 1,992 99.80%
Gfi International Switzerland 30,161 (10,886) 100.00%
Holding Gfi Informatique Maroc Morocco 1,656 191 100.00%
Gfi Maroc Offshore Morocco 36 1,719 100.00%
Impaq UK Limited United Kingdom 196 (828) 100.00%
Somafor RCI SA Ivory Coast 228 (73) 70.00%
B – OTHER SHAREHOLDINGS 7,212 17,970
C – TREASURY SHARES
TOTAL
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Notes to the corporate financial statements
6
Book value of the shares held
Loans andadvances
granted bythe Company
Provision onreceivables
Sureties andguarantees
given by theCompany Revenue
Net earningsfor last
financial year
Dividendsreceived by
the Companyover the yearGross Net
22,075 22,075 5,635 - 34 89,134 4,065 4,000
21,311 21,311 - - - 154,642 6,532 3,000
4,803 1,413 4,392 - - 9,149 (1,046) -
2,037 2,037 - - - 8,201 186 -
327 - 2,305 (422) - 9,430 (1,787) -
88 88 - - - 4,260 422 -
1 1 - - - 80 36 300
5,650 - 4,309 (2,883) - 2,098 (2,239) -
1 1 - - - - - -
1 1 - - - - - -
1 1 - - - - - -
1,321 1,321 465 - - 630 15 -
20 20 - - - - - -
6,288 6,288 10,705 - - 26,532 (485) -
2 - - - - - - -
10,923 10,923 36,085 - - 25,276 184 2,000
235 - 1,687 (900) - 1,151 28 -
921 921 - - - 6,497 718 200
2,260 2,260 - - - 20,891 541 500
74,599 72,142 3 322 - - 2,014 (829) -
1,895 1,895 - - - - 10 -
36 36 - - - 6,276 409 -
1,638 - - - - 1,794 (201) -
253 253 899 - - 2,856 (447) -
602 602 11,174 - - 97,076 1,448 -
1,032 1,032
158,318 144,621 80,978 (4,205) 34 467,989 7,560 10,000
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Other information6
OTHER INFORMATION6.3.
Financial result for the last five financial years6.3.1.
2017 2016 2015 2014 2013
I – YEAR-END FINANCIAL POSITION
Share capital 133,141 133,141 131,960 108,901 108,901
Number of shares issued 66,570,771 66,570,771 65,980,266 54,450,342 54,450,342
Number of convertible bonds - - - 10,074,417 10,077,917
II – COMPREHENSIVE INCOME FOR ALL ACTIVITIES
Revenue excluding taxes 684,279 682,105 576,109 487,628 450,651
Profit before tax, depreciation, provisions and employee profit sharing 22,991 10,649 14,648 9,639 9,778
Employee profit sharing for the year - - - - -
Income tax(1) (8,236) (6,829) (5,849) (6,288) (5,507)
Profit after tax, depreciation, provisions and employee profit sharing 24,104 23,191 16,731 16,061 13,019
Amount of dividends distributed* 9,985 9,875 9,897 5,445 5,438
III – COMPREHENSIVE EARNINGS PER SHARE
Net income before amortisation, depreciation, impairment and provision expense 0.47 0.26 0.31 0.29 0.28
Profit after tax, depreciation, provisions and employee profit sharing 0.36 0.35 0.25 0.29 0.24
Dividend* 0.15 0.15 0.15 0.10 0.10
IV – EMPLOYEES
Average number of employees 5,598 5,533 4,943 4,452 4,325
Total payroll costs (in thousands of euros) 251,787 246,468 217,179 192,142 182,409
Total employee benefits 111,074 110,864 98,096 86,285 82,998
Subject to approval by the General Meeting.*The negative income tax expense is income primarily from effects of the tax consolidations and a loss carry-back.(1)
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Other information
6
Inventory of marketable securities6.3.2.
(in thousands of euros) Number of shares
Net carryingamount
31.12.2017
FRENCH COMPANIES
Gfi Progiciels SAS 10,466,439 22,075
Gfi Informatique-Production SA 351,925 21,311
Gfi Informatique Entreprise Solutions SAS 5,925 1,413
Gfi BusinessTransformation SAS 203,700 2,037
Gfi Informatique Telecom SASU 21,250 -
Gfi Conseils et Intégration de Solutions 8,750 88
S.C.I. Gifimo 651 1
Awak’IT (S&I) SAS 10,200 -
Gfi 7 SARL 100 1
Gfi 8 SARL 100 1
Gfi 9 SARL 100 1
Somafor SARL 500 1,321
SL Process 240 20
Cognitis France SAS 3,500,000 6,288
FOREIGN COMPANIES
Gfi Portugal – Tecnologias de Informaçao, SA 12,000 10,923
Gfi Benelux 88,464 -
Gfi PSF SA 30,000 921
Gfi NV 1,259 2,260
Gfi International 9,428,334 72,142
Holding Gfi Informatique Maroc 185,000 1,895
Gfi Maroc Offshore 4,000 36
Grupo Corporativo GFI Informatica SA 100,000 602
Somafor RCI 15,000 253
IMPAQ UK Limited 150,000 -
TREASURY SHARES
Gfi Informatique 158,825 1,032
TOTAL 144,621
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Statutory Auditor's Report on the financial statements6
STATUTORY AUDITOR'S REPORT ON THE 6.4.FINANCIAL STATEMENTS
This is a translation into English of the statutory auditors’ report on the financial statements of the Company issued in French and it is provided solely forthe convenience of English-speaking users.This statutory auditors’ report includes information required by European regulation and French law, such asinformation about the appointment of the statutory auditors or verification of the management report and other documents provided to theshareholders.This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standardsapplicable in France.
To the Annual General Meeting of GFI Informatique,
Opinion
In compliance with the engagement entrusted to us by your AnnualGeneral Meetings, we have audited the accompanying financialstatements of GFI Informatique for the year ended December 31,2017.
In our opinion, the financial statements give a true and fair view of theassets and liabilities and of the financial position of the Company as atDecember 31, 2017 and of the results of its operations for the yearthen ended in accordance with French accounting principles.
The audit opinion expressed above is consistent with our report to theAudit Committee.
Basis for Opinion
Audit Framework
We conducted our audit in accordance with professional standardsapplicable in France. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for ouropinion.
Our responsibilities under those standards are further described in theStatutory Auditors’ Responsibilities for the Audit of the FinancialStatements section of our report.
Independence
We conducted our audit engagement in compliance withindependence rules applicable to us, for the period from January 1,2017 to the date of our report and specifically we did not provide anyprohibited non-audit services referred to in Article 5(1) of Regulation(EU) No 537/2014 or in the French Code of Ethics (Code dedéontologie) for statutory auditors.
Justification of Assessments - Key Audit Matters
In accordance with the requirements of Articles L.823-9 and R.823-7of the French Commercial Code (Code de commerce) relating to thejustification of our assessments, we inform you of the key auditmatters relating to risks of material misstatement that, in ourprofessional judgment, were of most significance in our audit of thefinancial statements of the current period, as well as how weaddressed those risks.
These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon,and we do not provide a separate opinion on specific items of thefinancial statements.
Revenue recognition for fixed-price contracts
Key audit matter Our response
Revenue for fixed-price contracts is recognized by stage ofcompletion on the basis of costs incurred to date and to be incurred.
When a loss upon completion of a contract is likely, a provision forloss at completion is recorded.
We considered the recognition of revenue on fixed-price contracts tobe a key audit matter as the estimated costs on these contracts arebased on operating assumptions which have a direct impact on therevenue and operating margin of the financial statements.
The accounting principles for revenue recognition are disclosed inNote 2.3 to the financial statements.
We examined the internal control system for recognition of revenuefrom fixed-price contracts. We tested the effectiveness of thecontrols performed, particularly those related to costs incurred andto be incurred by contract.
We performed the following procedures on a selection of contractsbased on both quantitative (significant unbilled and deferredincome) and qualitative (contracts with identified risks, unusualprofitability, etc.) criteria:
We analysed the contractual conditions and reconciled the•financial information in the contract follow-up form prepared bymanagement control (revenue, billing, costs incurred, unbilledand deferred income) with the accounting system; We verified the accuracy of the calculation of the standard costs•used to value the hours charged on the contracts;
We assessed the costs to be incurred and the percentage of•completion of contracts selected by interviewing managementcontrollers;
We performed analytical reviews of business units with•management controllers;
We evaluated the assumptions used by the management to•determine losses upon completion identified for loss-makingcontracts, if any.
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Statutory Auditor's Report on the financial statements
6
Valuation of shareholdings
Key audit matter Our response
As at December 31, 2017, shareholdings are recorded in the balancesheet for a net carrying amount of 143,589 thousand euros.
An impairment loss is recorded when the value in use of theshareholding in subsidiaries is lower than their net carrying amount.Value in use is determined, notably, on the basis of the level of GFIInformatique's shareholding in the equity and on the profitabilityprospects.
based on discounted future cash flows, requiring the use ofassumptions and estimates.
In view of the judgment required to determine cash flow, discountrate and long-term growth assumptions, we considered the valuationof shareholdings to be a key audit matter.
Within the context of our audit, we examined the methods used forthe impairment tests performed by GFI Informatique.
We performed the following procedures on the impairment tests:
We analyzed the consistency of the key assumptions resulting•from goodwill impairment tests with those used to valueshareholdings;
We performed the verification of the consistency of the key•assumptions used to determine cash flows;
with the assistance of our valuation specialists, we assessed the•discount rates used in relation to market references.
Valuation of business assets
Key audit matter Our response
As at December 31, 2017, business assets are recorded in the balancesheet for a net carrying value of 101,112 thousand euros. These assetsare not amortized and are the subject of impairment testing on ayearly basis.
This impairment test is based on the value in use determined on thebasis of discounted future cash flows, requiring the use ofassumptions and estimates.
We considered the valuation of business assets to be a key auditmatter in view of the judgment used by the management todetermine cash flow, discount rate and long-term growthassumptions.
Impairment, if any, is recorded if the value in use is lower than thebook value, as specified in Note 2.3 to the financial statements.
Within the context of our audit, we examined the methods used byGFI Informatique for impairment tests.
We performed the following procedures on the impairment tests:
We evaluated the consistency of the key assumptions resulting•from goodwill impairment tests with those used in the context ofvaluing business assets;
We evaluated the consistency of the key assumptions used to•determine cash flow models;
with the assistance of our valuation specialists, we assessed the•discount rates used in relation to market references.
Verification of the Management Report and of the OtherDocuments Provided to the Shareholders
We have also performed, in accordance with professional standardsapplicable in France, the specific verifications required by French law.
Information provided in the Management Report and in the OtherDocuments Provided to the Shareholders with respect to the financialposition and the financial statements
We have no matters to report as to the fair presentation and theconsistency with the financial statements of the information given inthe Board of Directors’ management report and in the otherdocuments provided to the shareholders with respect to the financialposition and the financial statements.
Report on Corporate Governance
We attest that the Board of Directors’ Report on CorporateGovernance sets out the information required by Articles L. 225-37-3and L. 225-37-4 of the French Commercial Code (Code de commerce).
(Code de commerce) relating to remunerations and benefits receivedby the directors and any other commitments made in their favor, wehave verified its consistency with the financial statements, or with theunderlying information used to prepare these financial statementsand, where applicable, with the information obtained by yourCompany from controlling and controlled companies. Based on theseprocedures, we attest the accuracy and fair presentation of thisinformation.
Concerning the information given in accordance with therequirements of Article L. 225-37-3 of the French Commercial Code
With respect to the information relating to items that your Companyconsidered likely to have an impact in the event of a public purchaseoffer or exchange, provided pursuant to Article L. 225-37-5 of theFrench Commercial Code (Code de commerce), we have verified that itcomplies with the underlying documentation provided to us. Based onour work, we have no observations to make on this information.
Other information
In accordance with French law, we have verified that the requiredinformation concerning the purchase of investments and controllinginterests and the identity of the shareholders and holders of thevoting rights has been properly disclosed in the management report.
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CORPORATE FINANCIAL STATEMENTS
Statutory Auditor's Report on the financial statements6
Report on Other Legal and Regulatory Requirements
Appointment of the Statutory Auditors
We were appointed as statutory auditors of GFI Informatique by theannual general meeting held on May 19, 2010 for Grant Thornton andon May 21, 2008 for ERNST & YOUNG et Autres.
As at December 31, 2017, Grant Thornton and ERNST & YOUNG etAutres were in the 8th year and 10th year of total uninterruptedengagement respectively.
Previous to that date, ERNST & YOUNG Audit had been statutoryauditor since 1996.
Responsibilities of Management and Those Charged withGovernance for the Financial Statements
Management is responsible for the preparation and fair presentationof the financial statements in accordance with French accountingprinciples and for such internal control as management determines isnecessary to enable the preparation of financial statements that arefree from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible forassessing the Company’s ability to continue as a going concern,disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless it is expected to liquidatethe Company or to cease operations.
The Audit Committee is responsible for monitoring the financialreporting process and the effectiveness of internal control and risksmanagement systems and where applicable, its internal audit,regarding the accounting and financial reporting procedures.
The financial statements were approved by the Board of Directors.
Statutory Auditors’ Responsibilities for the Audit of the FinancialStatements
Objectives and audit approach
Our role is to issue a report on the financial statements. Our objectiveis to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement.Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with professionalstandards will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on thebasis of these financial statements.
As specified in Article L.823-10-1 of the French Commercial Code(Code de commerce), our statutory audit does not include assuranceon the viability of the Company or the quality of management of theaffairs of the Company.
As part of an audit conducted in accordance with professionalstandards applicable in France, the statutory auditor exercisesprofessional judgment throughout the audit and furthermore:
Identifies and assesses the risks of material misstatement of the•financial statements, whether due to fraud or error, designs andperforms audit procedures responsive to those risks, and obtainsaudit evidence considered to be sufficient and appropriate toprovide a basis for his opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resultingfrom error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control;
Obtains an understanding of internal control relevant to the audit•in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion onthe effectiveness of the internal control;
Evaluates the appropriateness of accounting policies used and the•reasonableness of accounting estimates and related disclosuresmade by management in the financial statements;
Assesses the appropriateness of management’s use of the going•concern basis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s abilityto continue as a going concern. This assessment is based on theaudit evidence obtained up to the date of his audit report. However,future events or conditions may cause the Company to cease tocontinue as a going concern. If the statutory auditor concludes thata material uncertainty exists, there is a requirement to drawattention in the audit report to the related disclosures in thefinancial statements or, if such disclosures are not provided orinadequate, to modify the opinion expressed therein;
Evaluates the overall presentation of the financial statements and•assesses whether these statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Report to the Audit Committee
We submit a report to the Audit Committee which includes inparticular a description of the scope of the audit and the auditprogram implemented, as well as the results of our audit. We alsoreport, if any, significant deficiencies in internal control regarding theaccounting and financial reporting procedures that we have identified.
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CORPORATE FINANCIAL STATEMENTS
Statutory auditor's report on related party agreements and commitments
6
Our report to the Audit Committee includes the risks of materialmisstatement that, in our professional judgment, were of mostsignificance in the audit of the financial statements of the currentperiod and which are therefore the key audit matters that we arerequired to describe in this report.
independence within the meaning of the rules applicable in Francesuch as they are set in particular by Articles L.822-10 to L.822-14 ofthe French Commercial Code (Code de commerce) and in the FrenchCode of Ethics (Code de déontologie) for statutory auditors. Whereappropriate, we discuss with the Audit Committee the risks that mayreasonably be thought to bear on our independence, and the relatedWe also provide the Audit Committee with the declaration providedsafeguards.for in Article 6 of Regulation (EU) N° 537/2014, confirming our
Neuilly-Sur-Seine and Paris-La Défense, March 21, 2018
The Statutory Auditors
French original signed by
GRANT THORNTON
French Member of Grant Thornton International
Samuel Clochard
ERNST & YOUNG et Autres
Pierre Jouanne
STATUTORY AUDITOR'S REPORT 6.5ON RELATED PARTY AGREEMENTS AND COMMITMENTS
This is a translation into English of a report issued in French and it is provided solely for the convenience of English-speaking users. This report should beread in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
To the Annual General Meeting of Gfi Informatique,
In our capacity as statutory auditors of your Company, we herebypresent to you our report on related party agreements andcommitments.
We are required to inform you, on the basis of the informationprovided to us, of the terms and conditions of those agreements andcommitments indicated to us, or that we may have identified in theperformance of our engagement, as well as the reasons justifying whythey benefit the Company. We are not required to give our opinion asto whether they are beneficial or appropriate or to ascertain theexistence of other agreements and commitments. It is yourresponsibility, in accordance with Article R. 225-31 of the FrenchCommercial Code (Code de commerce), to assess the relevance ofthese agreements and commitments prior to their approval.
Auditors (Compagnie nationale des commissaires aux comptes)relating to this type of engagement.
We are also required, where applicable, to inform you in accordancewith Article R. 225-31 of the French Commercial Code (Code decommerce) of the continuation of the implementation, during theyear ended December 31, 2017, of the agreements and commitmentspreviously approved by the Annual General Meeting. We performedthose procedures which we deemed necessary in compliance withprofessional guidance issued by the French Institute of Statutory
These procedures consisted in verifying the consistency of theinformation provided to us with the relevant source documents.
Agreements and commitments submitted for approval to the Annual General Meeting
AGREEMENTS AND COMMITMENTS AUTHORIZED AND CONCLUDED DURING THE YEAR ENDED DECEMBER 31, 2017
We hereby inform you that we have not been notified of anyagreements or commitments authorized during the year endedDecember 31, 2017 to be submitted to the Annual General Meetingfor approval in accordance with Article L. 225-38 of the FrenchCommercial Code (Code de commerce).
AGREEMENTS AND COMMITMENTS AUTHORIZED AND CONCLUDED AFTER CLOSING
We have been notified of the following related party agreements andcommitments, authorized and concluded after closing, which receivedprior authorization from your Board of Directors after closing.
With Auteuil Conseil (France) •Person concerned
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CORPORATE FINANCIAL STATEMENTS
Statutory auditor's report on related party agreements and commitments6
Mr. Vincent Rouaix, Chairman of the Board of Directors and GeneralManager of your Company, and Manager of Auteuil Conseil.
Additional fees received in 2017
Nature, purpose and conditions
On October 15, 2007, your Company entered into a service provisionagreement with Auteuil Conseil (France). The purpose of thisagreement was to define the conditions under which Auteuil Conseil(France) assists your Company with marketing and commercialstrategy, processes relating to the acquisition of IT service companiesand human resources. The employee assigned to the performance ofthe services pursuant to said agreement is Mr. Vincent Rouaix.
The agreement was entered into for a period of two years as fromFebruary 1, 2008, tacitly renewable every year, unless it is terminatedone year before the end date. Auteuil Conseil (France) receives feesfor its services. At its meeting on February 21, 2018, the Board ofDirectors authorized your Company to sign three new amendments tothe service provision agreement of October 15, 2007.
The amendment, signed on March 16, 2018, provides for•additional fees amounting to € 213,248 excluding taxes forservices performed by Auteuil Conseil (France) in 2017, in respectof the performance objectives provided for amounting to amaximum amount of € 400,000 excluding taxes.
The second amendment involves exceptional additional fees•amounting to € 500,000 excluding taxes. This amendment,signed on March 16, 2018, applies the amendment concluded onDecember 23, 2015, which provides for this exceptionaladditional fee for a maximum amount of M€ 2 excluding taxes,conditional on the definitive completion of the MannaiCorporation share purchase operation, and for quantitativeobjectives.
The third amendment, signed on March 16, 2018, is related to•the revaluation of fees calculated on an annual basis and fixed atthe amount of € 860,000 excluding taxes, as from April 1, 2018.The amendments to the service provision agreement of 2017,authorized in prior years, are mentioned in the “Agreements andcommitments previously approved by the Annual GeneralMeeting” section of this report.
During financial year 2017 your Company recognized a charge of €1,513,248 excluding taxes in respect of the amendments and theinitial agreement.
Reasons justifying why the Company benefits from this agreement
The Board of Directors justified this agreement by its desire to ensurestable management and to benefit from Auteuil Conseil (France)’sexpertise in relation to the development of the GFI InformatiqueGroup, notably through external growth transactions.
Agreements and commitments previously approved by the Annual General Meeting
AGREEMENTS AND COMMITMENTS APPROVED IN PRIOR YEARS
a) whose implementation continued during the year ended December31, 2017
In accordance with Article R.225-30 of the French Commercial Code(Code de commerce), we have been notified that the implementationof the following agreements and commitments, which were approvedby the Annual General Meeting in prior years, continued during theyear ended December 31, 2017.
With Auteuil Conseil (France)•
Person concerned
Mr. Vincent Rouaix, Chairman of the Board of Directors and GeneralManager of your Company, and Manager of Auteuil Conseil (France).
Nature, purpose and conditions
As mentioned in the “Agreements and commitments submitted forapproval to the Annual General Meeting” section hereof, on October15, 2007, your Company entered into a service provision agreementwith Auteuil Conseil (France).
At its meeting on December 22, 2015, the Board of Directorsauthorized your Company to sign amendments to the serviceprovision agreement of October 15, 2007.
The amendment signed on December 23, 2015 fixed the annual•fees at € 800,000 excluding taxes as from January 1, 2016.
The amendment signed on December 23, 2015 provided for an•exceptional additional fee for a maximum amount of M€ 2excluding taxes to be paid by your Company no later than March31, 2018, conditional on (i) the definitive completion of theMannai Corporation share purchase transaction, (ii) theachievement of the objective relating to the GFI Group’s netincome in respect of the year ending December 31 2017 and (iii)the achievement of the objective relating to the GFI Group’soperating margin in respect of the year ending December 31,2017.
The Board of Directors, at its meeting on February 23, 2017,authorized your Company to sign an amendment to the serviceprovision agreement of October 15, 2007. This amendment, signed onMay 22, 2017, provided for additional fees amounting to € 316,666excluding taxes in respect of the services provided by Auteuil Conseil(France) in 2016. These fees were paid during the 2017 financial year.
b) which were not implemented during the year ended December 31,2017
In addition, we have been notified that the following agreements andcommitments, which were approved by the Annual General Meetingin prior years, were not implemented during the year ended December31, 2017.
1. With Group companies
Nature, purpose and conditions
At its meeting on March 17, 2009, the Board of Directors authorizedthe amendment of all tax agreements with companies in the taxconsolidation scope in France to allow a systematic refund to theloss-making subsidiary of the tax saving that it provides to the Group.No change has been made at this time to the initial tax agreements.No tax saving has been refunded by your Company for financial year2017.
2. With Mr. Vincent Rouaix, Chairman of the Board of Directorsand General Manager of your Company
Nature and purpose
Non-competition clause. Conditions At its meeting on March 1, 2013,the Board of Directors authorized your Company to sign anamendment to the non-competition clause entered into with Mr.Vincent Rouaix on December 18, 2007. This amendment, signed onMarch 29, 2013, sets the lump sum amount to be paid asindemnification for the non-competition agreement agreed by Mr.Vincent Rouaix at € 850,000.
3. With Auteuil Conseil (France)
Person concerned
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Statutory auditor's report on related party agreements and commitments
6
Mr. Vincent Rouaix, Chairman of the Board of Directors and GeneralManager of your Company, and Manager of Auteuil Conseil (France).
Nature, purpose and conditions
As mentioned in the “Agreements and commitments submitted forapproval to the Annual General Meeting” section hereof, on October15, 2007 your Company entered into a service provision agreementwith Auteuil Conseil (France).
At its meeting on December 22, 2015, the Board of Directorsauthorized your Company to sign amendments to the serviceprovision agreement of October 15, 2007.
The Annual General Meeting of June 28, 2016 took note of the Boardof Directors’ authorization to allocate an exceptional additional fee fora maximum amount of M€ 2 excluding taxes, to be paid by yourCompany in 2020, subject to reaching the performance objectives, tobe defined at a later date, relating to the Group’s operating marginand net income.
Neuilly-Sur-Seine and Paris-La Défense, April 17, 2018
The Statutory Auditors
French original signed by
GRANT THORNTON
French Member of Grant Thornton International
Samuel Clochard
ERNST & YOUNG et Autres
Pierre Jouanne
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Statutory auditor's report on related party agreements and commitments6
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Statutory auditor's report on related party agreements and commitments
6
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Statutory auditor's report on related party agreements and commitments6
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7ADDITIONALINFORMATION
7
Additional information
COMPANY INFORMATION7.1. 210Company name and registered office7.1.1. 210Legal status7.1.2. 210Formation date and duration of the Company7.1.3. 210Corporate purpose (Article 2 of the Articles of 7.1.4.Association) 210Company registration details7.1.5. 210Consultation of Company documents and 7.1.6.information 210Financial year7.1.7. 211General Meetings (Article 17 of the Articles of 7.1.8.Association) 211Appropriation of profit or loss (Article 19 of the 7.1.9.Articles of Association) 211Dividend payments (Article 20 of the Articles 7.1.10.of Association) 211Major shareholdings7.1.11. 211Identification of owners of bearer shares: 7.1.12.Identifiable bearer shares (Article 7 of the Articles of Association) 212Appointment and dismissal of directors (Article 11 7.1.13.of the Articles of Association) 212Directors’ fees (Article 15 of the Articles of 7.1.14.Association) 212
ABOUT THE COMPANY'S SENIOR 7.2.MANAGEMENT 213
PERSON RESPONSIBLE FOR THE 7.3.DOCUMENT 213
PERSONS RESPONSIBLE FOR 7.4.AUDITING THE FINANCIAL STATEMENTS 214Appointed Statutory Auditors7.4.1. 214Alternate Statutory Auditors7.4.2. 214
FINANCIAL COMMUNICATION7.5. 2152018 financial reporting schedule7.5.1. 215Person responsible for Gfi Informatique’s corporate 7.5.2.communication 215
CROSS-REFERENCE TABLE 7.6.AND INDEX 216NOTES 218
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ADDITIONAL INFORMATION
Company information7
COMPANY INFORMATION7.1.
Company name and registered office7.1.1.
Gfi Informatique – 145, boulevard Victor Hugo – 93400 Saint-Ouen – France
Legal status7.1.2.
French registered public limited Company (société anonyme) with a Board of Directors governed primarily by Articles L. 225-1 to L. 225-257 of theFrench Commercial Code.
Formation date and duration of the Company7.1.3.
The Company was incorporated on April 8, 1992. Its lifetime is 99 years from May 5, 1992, the date of its registration with the Trade and CompanyRegistry, unless it is dissolved in advance or its term extended.
Corporate purpose (Article 2 of the Articles of Association)7.1.4.
The Company’s purpose is:
the provision of services and advice, at its own offices or those of its clients, relating to the study, design, equipment, installation,•administration, usage and upgrading of computer systems and networks;
the design, production and operation of information technology products;•and more generally, carrying out all forms of commercial, industrial or financial operations, involving personal or real property, which may be•directly or indirectly connected with, or likely to contribute to or facilitate the achievement of the Company’s purpose.
Company registration details7.1.5.
Registered with the Bobigny Trade and Company Registry under number 385,365,713 and industry code and sector 6.202 A informationtechnology systems consultants.
Consultation of Company documents and information7.1.6.
The Articles of Association, financial statements, reports and minutes of General Meetings can be consulted at the Company’s registered office:145, boulevard Victor Hugo – 93400 Saint-Ouen, France.
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ADDITIONAL INFORMATION
Company information
7
Financial year7.1.7.
From January 1 to December 31 of each year.
General Meetings (Article 17 of the Articles of Association)7.1.8.
General Meetings are called under the conditions laid down by law. The meetings are only open to owners of registered (name) shares or bearershares who have proven their ownership of shares in accordance with Article R. 225-85 of the French Commercial Code.
Appropriation of profit or loss 7.1.9.(Article 19 of the Articles of Association)
The distributable profits are determined in accordance with the law.They are divided between all of the shareholders in proportion to thenumber of shares held by each shareholder.
However, after deducting the sums to be transferred to the legalreserves in compliance with the law, the General Meeting may decideto deduct any additional sums it deems appropriate to be allocated tooptional, ordinary or special reserves or to retained earnings.
Dividends will be deducted in priority from the distributable profit forthe financial year. The General Meeting may also distribute sums fromthe available reserves, expressly stating the accounts from which theamounts are transferred.
Dividend payments 7.1.10.(Article 20 of the Articles of Association)
Annual dividends will be paid on the date and at the places decided bythe General Meeting or, failing that, by the Board of Directors.
The General Meeting may grant shareholders an option to receive allor part of the dividend payment in cash or in shares, in accordancewith the conditions laid down by law or stipulated in the Company’sArticles of Association.
The General Meeting may grant shareholders an option to receive allor part of the interim dividend payment in cash or in shares, inaccordance with the conditions laid down by law or stipulated in theCompany’s Articles of Association.
Major shareholdings7.1.11.
The terms applicable to shareholding thresholds are those set out by law.
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ADDITIONAL INFORMATION
Company information7
Identification of owners of bearer shares: Identifiable 7.1.12.bearer shares (Article 7 of the Articles of Association)
Pursuant to Article L. 228-2 of the French Commercial Code, the Company may make use of the Euroclear France procedure to identify holders ofbearer shares at any time.
Appointment and dismissal of directors 7.1.13.(Article 11 of the Articles of Association)
The Company is administered by a Board of Directors with from threeto 18 members.
During the existence of the Company, directors shall be appointed orre-appointed by an Ordinary General Meeting of shareholders.
They shall be appointed for a three-year term of office.
They may be removed from office by an Ordinary General Meeting atany time.
No person may be appointed to the Board of Directors if, havingreached the age of 70, his/her appointment would have the effect ofbringing the number of members of the Board of Directors who haveexceeded that age to more than one third. If, due to the fact that amember of the Board of Directors reaches the age of 70, theabove-mentioned proportion of one third is exceeded, then the oldestmember of the Board of Directors is considered to have automaticallyresigned at the end of the next Ordinary General Meeting.
If one or more seats on the Board become vacant between twoGeneral Meetings as a result of death or resignation, the Board ofDirectors may make one or more provisional appointments.
Pursuant to legal requirements, whenever the number of members ofthe Board of Directors appointed by the Ordinary General Meeting isless than or equal to twelve, a director representing the employeesshall be designated for a term of three years by the Company’s centralworks council. In the event of a seat becoming vacant before thenormal end of a term, a replacement is designated in the same manneras for the residual portion of the initial term of office.
Whenever the number of members of the Board of Directors is greaterthan 12, a second director representing the employees shall bedesignated for a three-year period by the European works council. Ifthe number of members of the Board of Directors appointed by theOrdinary General Meeting is less than or equal to 12, the term ofoffice of the second director representing the employees shallcontinue to its finish.
Directors’ fees (Article 15 of the Articles of Association)7.1.14.
The Ordinary General Meeting may decide to pay directors’ fees, the amount of which shall remain unchanged until the General Meeting resolvesotherwise.
The Board of Directors shall allocate the fees between its members as it sees fit.
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ADDITIONAL INFORMATION
About the Company's senior management
7
ABOUT THE COMPANY'S SENIOR 7.2.MANAGEMENT
Vincent Rouaix is Chairman and General Manager.
PERSON RESPONSIBLE FOR THE 7.3.DOCUMENT
Vincent Rouaix
Having taken all measures that might reasonably be expected, I declare that, to the best of my knowledge, the information set out in thisregistration document is true and that there is no omission that could alter the scope thereof.
I attest, to the best of my knowledge, that the financial statements have been drawn up in accordance with the applicable accounting standardsand convey a faithful picture of the assets, the financial situation and the results of the Company and of all of the enterprises included in theconsolidation scope, and that the management report appearing on Chapters 1 to 4 with their reference to Chapters 5 and 6, depicts a true pictureof the business developments, results and financial situation of the Company and all the enterprises included in the consolidation scope anddescribes the main risks and uncertainties that they face.
I have obtained from the Statutory Auditors a letter, drawn up at the end of their audit assignment, in which they state that they have carried outprocedures to verify the information relating to the financial position and the financial statements contained in the registration document andhave acquainted themselves with all the information contained in said registration document.
Saint-Ouen, April 18, 2018
Chairman and General Manager
Vincent Rouaix
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ADDITIONAL INFORMATION
Persons responsible for auditing the financial statements7
PERSONS RESPONSIBLE FOR AUDITING 7.4.THE FINANCIAL STATEMENTS
Appointed Statutory Auditors7.4.1.
Ernst & Young et Autres
Tour First – 1, place des – Paris La Défense 92400 Courbevoie
Represented by Pierre Jouanne
Date of first appointment: May 21, 2008
End of term: Ordinary General Meeting called to vote on the financialstatements for the financial year ending December 31, 2019 (length ofengagement: 6 years).
Grant Thornton
29, rue du Pont 92200 Neuilly-sur-Seine
Represented by Samuel Clochard
Date of first appointment: May 19, 2010
End of term: Ordinary General Meeting called to vote on the financialstatements for the financial year ending December 31, 2021 (length ofengagement: 6 years).
Alternate Statutory Auditors7.4.2.
Cabinet Auditex
Tour First – 1, place des Saisons – Paris La Défense 92400 Courbevoie
Date of first appointment: May 21, 2008.
End of term: Ordinary General Meeting called to vote on the financialstatements for the financial year ending December 31, 2019 (length ofengagement: 6 years).
Institut de Gestion et d’Expertise Comptable – IGEC
22 rue Garnier 92200 Neuilly-sur-Seine
Date of first appointment: May 19, 2010.
End of term: Ordinary General Meeting called to vote on the financialstatements for the financial year ending December 31, 2021 (length ofengagement: 6 years).
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ADDITIONAL INFORMATION
Financial communication
7
FINANCIAL COMMUNICATION7.5.
2018 financial reporting schedule7.5.1.
Publication date
Revenue for 4th quarter 2017 January 31, 2018
2017 annual results February 23, 2018
Revenue for 1st quarter of 2018 April 26, 2018
Revenue for 2nd quarter 2018 and 2018 1st half year results July 26, 2018
Revenue for 3rd quarter 2018 November 6, 2018
NB : the announcement takes place after the stock market closing.
This registration document is available on the Gfi Informatique website: www.gfi.world or from the Group's Legal and Compliance Department,145 boulevard Victor Hugo in Saint-Ouen – 93400.
Person responsible for Gfi Informatique’s corporate 7.5.2.communication
Cyril Malher
Group Financial Director
145, boulevard Victor Hugo-93400 Saint-Ouen, France.
Tel.: +33 (0)1 44 04 50 64
E-mail: [email protected]
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ADDITIONAL INFORMATION
Cross-reference table and index7
CROSS-REFERENCE TABLE AND INDEX 7.6.
The cross-reference table below refers to the principal headings required by regulation No. 809/2004 taken in application of directive2003-1971/EC and the pages of the present registration document.
Persons responsible1
Persons responsible1.1 7.3
Declaration by the persons responsible1.2 7.3
Statutory Auditors of the financial statements2
Information about the Statutory Auditors of the financial statements2.1 7.4
Changes2.2 n/a
Selected financial information3
Historical financial information3.1 n/a
Interim periods3.2 n/a
Risk factors4. 1.13
Information about the issuer5
History and development of the Company5.1 n/a
Investments5.2 1.12
Overview of the activities6
Principal activities6.1 1.3
Principal markets6.2 1.3
Dependency6.3 none
Competitive situation6.4 1.10.1
Organisation chart7 Group7.1 1.4
Subsidiaries7.2 6.2.6 Note 23
Property, plant and equipment8 Significant property, plant and equipment8.1 none
Environmental aspects8.2 2.2, 2.4.2
Examination of the financial situation and earnings9 Financial situation9.1 1.5, 1.6
Net operating income9.2 1.5, 1.6
Cash situation and capital10 Capital10.1 3.3
Cash flows10.2 1.5.2
Financing structure10.3 1.5.2
Restriction10.4 n/a
Sources of financing10.5 1.5.2, 1.12
Research and Development, patents and licenses11 1.9
Information about trends12 Trends12.1 1.10
Influence12.2 1.10
Forecasts or earnings estimates13 Assumptions13.1 n/a
Report13.2 n/a
Comparisons13.3 n/a
Updating13.4 n/a
Administrative, management and supervisory bodies and General Management14 Conflicts of interests14.2 4.5
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ADDITIONAL INFORMATION
Cross-reference table and index
7
Compensation and benefits15 Compensation15.1 4.4, 5.2 Note 4Retirement pensions or other benefits15.2 4.4, 5.2 Note 4Operation of administrative and management bodies16 Mandates16.1 4.2
Service contracts16.2 4.3
Committees16.3 4.1, 4.6
Compliance16.4 1.13.8
Employees17 Information about the employees17.1 1.11, 2.1 and 2.4.1.
Profit-sharing and share subscription options for corporate officers17.2 4.4
Employee profit sharing17.3 1.11.1
Principal shareholders18 Shareholders18.1 3.2
Voting rights18.2 3.2
Shareholdings and control18.3 3.2
Agreements concerning control18.4 3.2.1
Transactions with related parties19 none
Financial information concerning the assets and financial situation20 Historical financial information20.1 n/a
Pro forma financial information20.2 n/a
Financial statements20.3 5 and 6
Verification of the historical annual financial information20.4 5.3 and 6.4
Date of the most recent financial information20.5 n/a
Interim and other financial information20.6 n/a
Dividend distribution policy20.7 1.8.4
Judicial and arbitration proceedings20.8 1.13.1
Significant changes in the financial or commercial situation20.9 1.5.2, 5.2 Note 6Additional information21 Share capital21.1 3.1.1
Memorandum and Articles of Association21.2 7.1
Significant contracts22 n/a
Information originating from third parties, declarations by experts and declarations of interests23 Declarations of interests23.1 n/a
Attestation23.2 n/a
Publicly available documents24 7.5
Information about equity interests25 1.8.1, 1.8.6, 6.2.6 Note 23
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NOTES
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NOTES
220 Gfi Informatique - 2017 REGISTRATION DOCUMENT
NOTES
This document is printed in France by an Imprim’Vert certified printer on PEFC certified paper produced from sustainably managed forest.
Gfi Informatique – La Porte du Parc – 145, boulevard Victor-Hugo – 93400 Saint-Ouen
Tel: +33 (0)1 44 04 50 00 – Fax: +33 (0)1 44 04 59 00
www.gfi.world