group management report for the financial year 2014 · 2020. 2. 21. · in raw data. on a...

Prodware Group – Management Report 2014 - 1

GROUP MANAGEMENT REPORT FOR THE FINANCIAL YEAR 2014


SOMMAIREA. THE PRODWARE GROUP IN 2014

1. General Presentation Of The Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32. Presentation Of The Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43. Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54. Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65. Events Subsequent To The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106. Investment Policy And R&D Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108. Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

B. THE PRODWARE SHARE – SHAREHOLDING9. General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1210. Structure Of The Shareholding At December 31st, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . 1211. Crossing Of Thresholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1212. Treasury Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1213. Share Purchase Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1314. Employee Shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1315. Current And Potential Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1416. Delegations Of Capital Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1417. Stock Exchange Quotation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

C. CORPORATE GOVERNANCE18. Board Of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1519. Remuneration Of The Corporate Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1620. Statutory Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1721. Regulated Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

D. SOCIAL AND ENVIRONMENTAL RESPONSIBILITY OF PRODWARE SA22. Sustainable Development As Core Values Of Prodware SA . . . . . . . . . . . . . . . . . . . . . . . 1823. Our Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1824. Environmental Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2325. Our Economic Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2526. Prodware, An Innovative And Citizen Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

APPENDIX 1 : SUBSIDIARIES’ RESULTS

APPENDIX 2 : TABLE OF DELEGATION OF POWERS AND AUTHORISA-TIONS REGARDING CAPITAL INCREASES AND USE OF THESE AUTHORI-SATIONS IN 2013

APPENDIX 3 : AUDITORS’ FEES


A. THE PRODWARE GROUP IN 2014

1. GENERAL PRESENTATION OF THE ACTIVITY

2014 has been a year of transition and optimization for Prodware in the implementation of its strategic plan.

In a wait-and-see economic context, the Group has continued and accelerated its development model based on sales of own software vendor solutions (34.2% versus 33.9% in 2013), as well as SaaS+Cloud sales (7.2% versus 5.0% in 2013).

This growth, coupled with significant performances from subsidiaries in Spain, Israel and UK, has allowed the Group to offset the downturn in the Benelux area and in Germany.

The 2014 revenue, which has decreased by 0.9% to reach €174,8m, is nonetheless growing by 2.3% on a like-for-like basis.

The underperformance of subsidiaries in Benelux and in Germany led the Group to accelerate the alignment of these subsidiaries to the Group model. Organisational measures (Sales, HR, etc.), combined with the strengthening of their equity, enable Prodware to foresee a return to financial balance of these entities from 2015.

Notwithstanding these difficulties, the Group maintained an EBITDA ratio virtually stable at 17% versus 17.3% (€29.6m versus €30.5m).

Non-recurring restructuration costs of the Group’s entities for €4.5m weight on the current operational result, down 27% to €8.9m.

Alongside these offers deployment and structures optimisation challenges, Prodware has transformed part of its short and mid-term debt into long term debt (5 years essentially), thus ensuring the adequacy of the maturity of its financing with its strategy of development at the Eurepean level. Despite non-recurring financial costs of €0.9m, mainly related to debt restructuring, the financial result is stable at (3.6) M€. In spite of a rise of its net debt, the Group gearing displays a limited increase to 39.4% versus 36% in 2013.

The net income Group share stands at 5.2 M€ versus 7.7 M€ in 2013.

After the alignment measures to the Group’s model implemented in 2014 for subsidiaries in Benelux and Germany, the Group contemplates, after this year of transition, a rebound of its sales growth and its profitability.


2. PRESENTATION OF THE GROUP

2.1. Key figures at December 31, 2014

2.2. Group’s organization chart

At December 31st, 2014, the Group was present in 15 countries. The exhaustive list of the subsidiaries is displayed in the appendix to the consolidated financial statements.

2.2.1. Scope changes

Comparing to last year, one can note:

› The absorption of Columbus Spain by its sister-company Prodware Spain in October 2014, retroactive to January 1, 2014; › The creation of a new Near-Shore subsidiary in Georgia by subscription to the capital by Prodware France; › An increase of capital among Prodware Business Solution (Israel) by offset against receivables alongside with an increase of capital reserved to minority shareholders (local management team).

The subsidiaries’ results are displayed in Appendix 1.

€174.8 MREVENUE COUNTRIES

1,425EMPLOYEES

15

42BRANCHES

LISTED ON THE ALTERNEXT STOCK EXCHANGE MARKET

PRODWARE SA

Germ

any -

100 %

UK - 100 %

Belgiu

m - 1

00 %

Ivory

Coas

t - C

amer

oon - 51 %

Spain - 1

00 %

Israe

l - 10

0 %

Luxe

mbourg

- 100 %

Moro

cco - 9

9.3 %

Nether

lands -

100 %

Roman

ia - 1

00 %

Czech

Rep

ublic - 1

00 %

Tunisi

a - 8

0 %


3. REVENUE

3.1. At Group level

The 2014 revenue amounts to €174.8m vs €176.4m in 2013, which represents a decrease of 0.9% in raw data.

On a like-for-like basis, the revenue has increased by 2.3%.

3.1.1. Revenue per operating segment

2014 2013

Integration of IT solutions and software vendor solutions 148 579 149 991

Infrastructure and Saas 26 245 26 406

Net Income 174 824 176 397

Software vendor activity amounts to 59 879 K€ in 2014 versus 59 794K€ in 2013.

Saas activity amounts to 12 520 K€ in 2014 versus 8 859 K€ in 2013.

3.1.2. Revenue per geographic area

Revenue is split between the French speaking areas (Maghreb included) for 50.2% and others countries for 49.8% (respectively 51.5% and 48.5% in 2013).

The breakdown of this revenue (in K€) by geographic area is as follows:

Geographic area 31/12/2014 31/12/2013 Growth

Benelux 30 341 36 400 - 16,6%

Spain 18 155 15 356 18,2%

Germany 15 009 19 505 - 23,1%

UK 8 684 6 333 37,1%

France and Maghreb* 94 690 92 443 2,4%

Israël 7 944 6 360 24,9%

Total 174 824 176 397 -0,9%

*Including 6 947K€ generated by exports by France (excluding intra-group operations)

This segmentation highlights the performance of subsidiaries already integrated in the Group model (Spain, Israel and UK) and those (Benelux and Germany) whose integration process was still ongoing in 2014.

3.2. At Prodware SA level

The revenue of the consolidating entity has amounted to € 96.2K versus € 95.9K in 2013, thus a 0.37% increase.

11% of this amount has been generated through exportations versus 8% last year.


4. INCOME

4.1. At the Group level

4.1.1. Simplified income statement

IFRS Standards (in K€) 2014 2013 Variation

Revenue 174 824 176 397 - 2,9%

EBITDA 29 634 30 520

As a % of revenue 16.95% 17.3%

Current operating income 13 518 17 709 - 23,7%


Operating income 8 929 12 207 - 26,9%


Net income 5 251 7 722 - 32,0%


The current operating income amounts to €13,518k in 2014 (- 23,7% compared to 2013) and takes into account on amount of €14.2m for amortization and provisions, net of reversals (vs €10.8m in 2013), which reflects the maturity of some Group's offers (net allocation of €10.8m in 2013).This income takes even into account the tax credit for research, net of fees, from €14 290k in 2013 to €13 169k in 2014.

The operating income amounts to €8 929k and includes €4 589k of non-recurring costs versus €5 503k.

The financial result is stable and at €(3.6)m. It takes into account non-recurring costs of €0.9m, mainly related to debt structuring.

4.1.2. Simplified balance sheet

Gross Value in €k 2014 2013 Gross Value in €k 2014 2013

Goodwill 33 368 33 099 Equity 104 465 95 372

Fixed tangible and intangible assets 78 578 71 417 Minority interests 321 161

Other current and non-current assets 106 517 96 401 Non-current liabilities 33 877 28 100

Cash 5 441 8 915 Current liabilities 85 241 86 199

Total 223 904 209 832 Total 223 904 209 832

a. Equity

At December 31st, 2014, the group share equity amounts to €104 465k vs €95 372k in 2013, thus a 9.5% increase.

This variation especially takes into account the capital increases performed during the financial year, for € 4m (premium included) by conversion of convertible bonds.

b. Trésorerie

The Group has €5,441k in cash at closing vs €8,915k at previous closing.


c. Bank and financial debts

At December 31st, 2014, financial debt amounts to €46 613k; which represents a 8.4% increase. It is detailed as follow:

In K€ 31/12/2014 31/12/2013

Non-current liabilities 29 760 24 505

Bank borrowings and bond-debts 28 143 16 844

Convertible bond-debt - debt component 1 617 7 661

Current financial liabilities 16 853 18 483

Bank overdrafts and accrued interest on borrowings 16 853 13 361

Factor current accounts - 5 121

Total 46 613 42 988

This variation reflects the structuration of the debt performed during the year in order to give it a greater degree of maturity in line with the long term investment policy of the Group.The actions undertaken could be summarised as follows:

› Bond issue in two tranches subscribed by Tikehau Investment Management, representing the FCT NOVO 2, the 10th April and the 31th July 2014, for an amount of €19m with a nominal interest rate of 5.3% and a 5 year maturity.

› Early repayment in July of: » the convertible bond subscribed by the investment fund A Plus Finance in 2012 thus (2.1 M€) which should have been repaid in three parts between 2015 and 2017. This payback has extinguished the potential dilution from the conversion of these bounds (estimated at 207 000 shares).

» the bank loan from the Dutch bank NIBC (7.2 M€ without interests) which expired in January 2015.

› The termination of the group factoring contract the 30th June 2014.

d. Convertible bond debt

At December 31st, 2014, after the operations detailed above, bond debts are as follows (two of them expiring in October 2015):

Convertible Bond Loans

Number of Outstanding Bonds

Repayment Price in € (per bond)

Amount of Issuance in €k

Total Amount in €k in case of

repayment (debt)

Annual Interest Rate

Maximum date of repayment

Number of Potential Shares in case of whole

conversion

OC 10 2012 300 5 669 € 1 701 K€ 1 617 K€ 7% 19/10/2015 150 000

Total 1 701 K€ 1 617 K€ 150 000

Simple Bond Loans

Number of Outstanding Bonds

Repayment Price in € (per bond)

Amount of Issuance in €k

Total Amount in €k in case of

repayment (debt)

Annual Interest Rate

Maximum date of repayment

OS 102009 5082 1 000 € 5 082 K€ 5 001 K€ 7.9% 15/10/2015

OS 04 2014 100 100 000 € 10 000 K€ 9 691 K€ 5.3% 11/04/2019

OS 07 2014 90 100 000 € 9 000 K€ 8 749 K€ 5.3% 31/07/2019

Total 24 082 K€ 23 441K€

e. Net debt/equity ratio (gearing)

From abovementioned elements, the short and medium-term global net debt amounts to €41 172k vs €34 073k last year.

The Group’s gearing has maintained at a satisfactory level to 39.4% vs 35.7% in 2013.


4.1.3. Simplified cash flow statement

12/31/2014 12/31/2013

Net income of integrated companies 5 283 7 722

Variation of operating working capital requirement - 9 145 - 315

Net cash flows generated by activity = A 13 484 22 610

Net cash flows generated by investment operations = B - 21 361 - 20 553

Net cash flows generated by financing operations = C 6 393 - 3 980

Cash flow variation = (A + B + C) - 1 470 - 1 922

4.2. At the level of Prodware SA

4.2.1. Simplified income statement

Gross Value in €k 2014 2013

Revenue 96 240 95 883

Operating Income 4 686 2 663

Current Income before Taxes 2 438 716

Extraordinary income - 1 032 -2 991

Net Income 15 825 12 065

4.2.2. Simplified balance sheet

Gross Value in €k 2014 2013 Gross Value in €k 2014 2013

Fixed Assets 135 277 116 342 Equity 120 866 100 923

Inventories 2 020 1 766 Provisions for risks 1 025 1 023

Receivables and miscellaneous 54 911 41 716 Financial debts 47 389 34 017

Liquid assets 8 366 9 230 Other debts 33 754 35 355

Adjustment accounts 2 863 2 586 Adjustment accounts 402 322

Total 203 437 171 641 Total 203 437 171 641

4.2.3. Allocation of the income

We suggest you to allocate the €15 825k income as follows:

› Allocation of €28.7k into legal reserve, › Distribution of a dividend of €0.03 per share (excluding treasury shares), thus an amount of €246k, › Allocation of the balance into “Retained earnings” for €15 550k.

Pursuant to the article 243 bis of the General Tax Code, it is reminded that, during the three last financial years, the following distributions have been performed:

› 2014 (financial year 2013): nothing, › 2013 (financial year 2012): nothing,

› 2012 (financial year 2011): €311k (giving right to tax allowance).


4.2.4. Results of the five last financial years

FIVE-YEAR FINANCIAL SUMMARY

Nature of the information N-4 N-3 N-2 N-1 N (2014)

Share capital at 31 December (2)Share capital 2 772 382 3 381 447 4 437 589 5 043 324 5 330 364

Number of ordinary shares issued 4 265 204 5 202 226 6 827 060 7 758 960 8 200 560

Number of non-voting preference shares issuedMaximum number of shares to be created in the future:

through the conversion of bonds 809 937 1 251 537 1 407 143 798 600 150 000

through the exercise of share options 1 272 645 145 000 460 000 341 900 341 900

through the issue of bonus shares 134 840 -

Results for the year ended (3)Revenue excluding VAT 77 856 870 77 401 151 94 098 727 95 883 831 96 240 402

Profit (7) before depreciation (6), provisions (5), employee 10 544 743 2 477 894 (208 669) 6 596 333 12 335 622

profit-sharing and taxIncome tax (4) 133 992 -14 741 993 -15 731 976 -14 340 219 -14 419 701

Employee profit-sharing for the year ended - - - - -Profit (7) after depreciation (6), provisions (5), employee 5 671 432 11 820 703 14 226 520 12 064 622 15 825 320

profit-sharing and taxDividends (8) 170 608 285 815 311 275 - -

Earnings per share (9)Profit (7) after employee profit-sharing and tax, but before 3,07 3,31 2.27 2,70 3,26

depreciation and provisions (7)Profit (7) after depreciation (6), provisions (5), employee 1,33 2,27 2.08 1,55 1,93

profit-sharing and taxGross dividend per share (a) 0.04 0.06 0.06 - -

EmployeesAverage number of employees during the year (10) 646 646 768 700 608

Salaries and wages (11) 25 836 233 26 537 570 32 478 008 30 359 216 28 315 223

Staff benefits (social security and other benefits) 11 607 523 11 907 490 14 687 470 13 316 537 12 254 756

4.2.5. Miscellaneous information: suppliers payment deadline

(in €k) 2014 % 2013 %

Non-matured 9 649 89,6% 11 247 89.8%

Mature for 30 days 540 5,0% 464 3.7%

Mature for between 30 and 60 days 215 2,0% 186 1.5%

Mature for more than 60 days 370 3,4% 632 5%

TOTAL 10 774 100,0% 12 529 100%

4.2.6. Extravagant expenses

None.


5. EVENTS SUBSEQUENT TO THE CLOSING

Since December 31st, the following events should be pointed out:

› Disposal of SAGE ERP X3 activity in March 2015, representing €4.4M of revenue and 28 employees.

6. INVESTMENT POLICY AND R&D ACTIVITY

In 2014, the Group has carried on its research and development activities for its software offering.

A research tax credit has been recorded in current operational result for an amount, net of fees, of €13 169k versus €14 290k last year.

Besides, during the financial year, the Group has capitalized € 16 845k, i.e. 9.6% of its revenue, in expenses dedicated to the development of the industry and role-tailored software solutions offering (verticals).

7. RISK FACTORS

While maintaining the relevance of its strategy and accelerating its expansion, the Group is thus necessarily cautious on the evolution of its different activities in Europe in an uncertain climate – despite a return of favourable macroeconomic outlook – as well as the potential impact of these risks on its growth and results.

The Group may more precisely be impacted in the following fields:

› Risk related to the strategy of the Global Solutions Integrators (GSI): these international groups who come from the consulting industry currently stand on the Mid-Market (mainly on the CRM) by dedicating investments to this market, according to their financial means. These players are thus hard competitors for Prodware on a Group’s expanding market made up by the subsidiaries of big international groups where the GSI are well introduced. This strengthened competition is thus a risk factor for the development of the Group, but also an opportunity, inasmuch as the GSI may search expertise and partnerships to carry out their projects.

› Risk related to its external growth operations: the significant external growth operations performed by the Prodware Group in 2011 and 2012, among which the acquisition of European companies with a deteriorated financial situation, induces a risk that is inherent to the recovery and proper development of these entities.

The measures set by the Group in 2014 (sales management, organisational, financial, HR, etc.) has thus enabled to consolidate the financial situation of certain subsidiaries for which the alignment process to the Group model was longer than expected. While it cannot be excluded that unanticipated and/or economic difficulties may further delay this alignment, Prodware nevertheless expect that, by 2015, all of its subsidiaries will be fully integrated into the Group’s development model.

The costs involved in this integration process must also be balanced with the opportunities and insights offered by the new dimension of the Group. The presence of Prodware in 15 countries enables it to support its customers in their international expansion which lead to the conclusion of major contracts and strong growth prospects for the Group’s offerings.

› Risk related to the financing of the research and development activities: the slowdown of the financing of the research and development activities may lead the Group to review the running of its research activities in France and in Europe and, consequently, of its induced resources. An externalization of these activities in lower cost countries (India, China, etc.) would then seriously be considered. If this risk cannot be excluded, it may be dismissed in the short-term.

› Commercial risks: Regardless of their business area, the time taken by the client companies to make decisions remains very high, and the Group needs more resources and costs to sign agreements. This increase competition in this economic climate may thus necessarily have an impact on the Group’s margin. The Group deals with this situation by emphasising on the expertise of its resources and on its targeted policy as a software vendor of industry and role-tailored solutions.

› Liquidity risk: as the Group has noticeably consolidated its equity and gearing in 2013, it does not currently anticipate any difficulty regarding the financing of its activities.


8. PERSPECTIVES

After a year of transition, Prodware expects an increasing of its sales combined with a rebound of its profitability in 2015.

In particular, Prodware expects a further decline in non-recurring costs associated with the completion in 2015 of the integration of subsidiaries in Benelux and Germany.


B. THE PRODWARE SHARE – SHAREHOLDING

9. GENERAL INFORMATION

At December 31st, 2014, the share capital amounted to 5,330,364 euros divided into 8,200,560 shares of the same category with a nominal value of €0.65.The Prodware share is listed on the NYSE Euronext Alternext market.

The shares are freely negotiable according to the legal and regulatory provisions in force. They can, to the shareholder’s choice, be recorded either as pure registered shares with the company, or as administered registered shares with an authorized financial intermediary, or as bearer shares.

The shares held as registered shares for more than two years benefit from a double voting right. There were 2,436,933 of these double voting right shares at December 31st, 2014.

Any shareholder who may directly or indirectly become the owner of at least 2.5% of the capital and/or voting rights shall inform the company thereof by registered letter pursuant to article 12 of the company’s bylaws. This notification shall be reiterated every time the capital is increased or decreased by a 2.5% portion. The shareholder who fails to do this shall be deprived from his voting right pursuant to the legal provisions.

10. STRUCTURE OF THE SHAREHOLDING AT DECEMBER 31ST, 2014

To the company’s knowledge, the structure of the capital was as follows at December 31st, 2014:

In % of the capital In % of the voting rights

Managers 25.2% 38.9%

Private and public investors 3.0% 4.5%

Employees 1.8% 2.7%

Self-owned securities 0.1% 0%

Securities owned by the public 69.9% 53.9%

11. CROSSING OF THRESHOLDS

During the financial year 2014, the following statements have been notified to the Company:

› In January, 2014, the Entrepreneur Venture gestion company declared the crossing of the threshold of 2.5% of the capital (subsequent to the conversion of convertible bonds held by several hedge funds managed by it) before notifying a downward crossing.At December 31st, 2014, Entrepreneur Venture holds 239,291 shares, representing 2.9% of the capital.

› In April, 2014, the Financial Arbevel, as fund manager, declared the crossing of the threshold of 2.54% of the capital to this date.

12. TREASURY SHARES

At December 31st, 2014, the Company held 7,870 of its own shares, i.e. 0.1% of the capital, within the only framework of the liquidity agreement managed by Gilbert Dupond.


13. SHARE PURCHASE PROGRAM

13.1. Description of the program

The ordinary general shareholders meeting of June 25th, 2014 renewed the Board of Directors’ authorization to purchase shares from the Company up to 10% of the capital for a maximum of 19 euros per share.

This purchase program has in particular been implemented to meet the following objectives:

› Stimulation of the market or shares liquidity within the framework of a liquidity agreement; › Delivery of shares in exchange or payment within the framework of any external growth operation performed by the Company or the Group; › Allocation and/or disposal of shares to the Company’s employees and managers, especially within the framework of investment and profit-sharing and of employee shareholding schemes; › Their cancellation.

The authorization has been given to the Board until December 24th, 2015 and will be renewed at the next general meeting in June 2015.

13.2. Assessment of the share purchase program as part of the Company’s following liquidity contract:

› Shares recorded at January 1st: 7,494 › Total number of purchased shares: 396 745 › Average purchase price: €9.07 › Total number of disposed shares: 396,373 › Average disposal price: €9.03 › Total number of cancelled shares: 0 › Number of shares at December 31st: 7,866 › Nominal value at December 31st: €0.65 › Market capitalisation at December 31st: €55,062 › Cash account at December 31st: €88,479

13.3. Assessment of the share purchase program within the framework of employee profit-sharing

› 2,895 purchased securities

14. EMPLOYEE SHAREHOLDING

Within the framework of the saving scheme set up by the company, the employees collectively own 13,956 Prodware shares.

When taking into account the shares acquired individually by the employees and the shares that have freely been granted to them in 2011, the total participation of the employees to the company’s register of shares amounted to 1.8% of the capital at December 31st, 2014.

There is no ongoing free share allocation, subscription options or share purchase scheme.


15. CURRENT AND POTENTIAL CAPITAL

At the end of March 2015, the capital amounts to 5,330,364 euros and is composed of 8,200,560 shares.

A total of 441,600 new shares has indeed been issued in January 2014 following the Entrepreneur Venture fund’s conversion request of two convertible bond loans.

After this conversion, there are 491,900 potentially issuable shares remaining which represent a total induced dilution of 5.6%.

The potential issuance of these shares would result from:

› The conversion of convertible loans for 150,000 shares, › The exercise of subscription warrants for 341,900 shares.

16. DELEGATIONS OF CAPITAL INCREASES

(Table: see in appendix 2)

17. STOCK EXCHANGE QUOTATION

At year end closing, the Prodware share quotation amounted to €7.00 vs €9.18 at December 31st, 2013.

The daily average volume of shares exchanged during the year 2014 amounts to 24,283.


C. CORPORATE GOVERNANCE

18. BOARD OF DIRECTORS

18.1. Composition of the Board - Duties

The Board of Directors is composed of 7 directors, including 2 women.Two of these directors are independents according to the definition of the Middlenext Code. A censor is member of the Board.Four representatives of the Works Council may attend the Board’s meetings.

Members Position in Prodware SA End of office Position in the Group at December 31st, 2014 Roles outside the Group in

2014

Philippe Bouaziz Chairman of the Board GM 2017

› Chairman of Prodware Belgium’s Board. › Member of Prodware Deutschland’s Supervisory

Board.

› Manager of the NEMUR and B&B real-estate companies › Chairman of Bouaziz

Partners

Alain Conrard Director and CEO GM 2016

Director of: › Chairman of Prodware Belgium’s Board. › Prodware Belgium › Prodware Spain › Columbus Spain › Prodware UK Limited › Prodware Weca (Ivory Coast) › Prodware Israel › Prodware Dynamics (Israel) › Prodware Business Solution

Representative of Prodware SA among: › Prodware Netherlands › Watermark Belgium › Prodware Spain

Manager of Prodware Luxemburg and Prodware MoroccoMember of Prodware Deutschland’s Supervisory Board (Aufsichtsrats)

Stéphane Conrard

Director

Deputy CEOGM 2016 › Member of Qurius Germany’s Supervisory Board

› Manager of the SARL S&AUDIT

› Chairman of PHAST INVEST

Jean-Gérard Bouaziz Director GM 2017

Viviane Neiter

(Independent) Director GM 2016

› Director of the Dolphin Integration company

› Censor of the GINGER company

Klara Fouchet Director GM 2016

Jacques Tordjman

(Independent) Director GM 2017 › Manager of Jactor SPRL

Alain Beaulac (Entrepreneur Venture)

Censor GM 2015

18.2. Renewal of directorship

The mandate of censor of Entrepreneur Venture expiring at the next general meeting, it is suggested to the members of the GM to renew for a further period of 3 year.Mr Fréderic Zablocki would represent the Entrepreneur Venture fund.


18.3. Works of the Board

The Board shall gather as many times as justified by the company’s interest. It gathered 7 times during the financial year 2014, deliberating, in particular, on:

› The issuance of new shares by conversion of convertible bonds, › The approval of the 2013 financial statements and half-year 2014 statement, › The subscription of two new bonds by Tikehau Investment Management in April and July 2014, and early repayments of current financial contracts. › The project of disposal of a non-strategic activity, › The approval of the 2015 budget, › The measures aiming at improving some subsidiaries’ financial situation. › Optimisation and restructuration measures among entities of the Group (mergers, HR, etc.).

18.4. Attendance fees

The general meeting held on June 28th, 2013 decided the payment of € 30k for 2013 and the following financial years until a new decision is taken on this matter.

Regarding the financial year 2014, Prodware’s Board of Directors decided to allocate the attendance fees to the main benefit of the independent directors who do not receive any other remuneration from the Company.

› Miss Viviane Neiter: €10k › Mister Jacques Tordjman: €10k › Other administrators: €2k each

19. REMUNERATION OF THE CORPORATE OFFICERS

19.1. Synthesis of the main managers’ remunerations

The detail of the remunerations received by the managers is communicated below.

In euros Fixed Variable Benefits in kind Attendance fees (owed amount)

Philippe Bouaziz 152 712 none none 2 000

Alain Conrard 127 260 none none 2 000

Stéphane Conrard (ht) 151 200 none none 2 000

Total 431 172 6 000

In addition to his remuneration one officer invoices a €130k repayment of expenses.


19.2. Remuneration in the form of securities giving access to the capital

There has been no allocation of subscription options or share purchase options/share performance during 2014.

It is reminded that 400,000 share subscription warrants have been issued in July 2012 (members of the General Management or Group officers). In December 2013, 58,100 of these warrants have been exercised. It remains 341,900 bounds which can be exercised until July 2017 at the price of €5.62 per warrant (1 share per warrant).

It is recalled that the General Assembly of June 2014 authorized the Board to issue new warrants for up to 5% of the share capital. No decision of the Council took place in 2014.

19.3. Commitments taken for the managers

Pursuant to a decision taken by the Board of Directors in 2003, Mr. Alain Conrard is entitled to a severance pay equivalent to 2 years of gross salary at his current function’s termination date.

20. STATUTORY AUDITORS

20.1. Fees

(see table in appendix 3)

21. REGULATED AGREEMENTS

There has been no new agreement signed during the financial year.

The agreements previously entered into with the NEMUR, B&B and SYSTAR real-estate companies regarding premises used for business purposes, has been going on.

The terms of these different agreements are displayed in our statutory auditors’ special report.


D. SOCIAL AND ENVIRONMENTAL RESPONSIBILITY OF PRODWARE SA

22. SUSTAINABLE DEVELOPMENT AS CORE VALUES OF PRODWARE SA

Supplier and vendor of business solutions since more than 20 years, Prodware is at the heart of the companies’ performance.

Prodware aspires to be an environmentally citizen company in words as well as in deeds, in both its internal and external practices, by providing common sense, cost-efficient and right management solutions to meet its clients need.

As a listed company, Prodware has been publishing since 2008 its human, societal and environmental indicators under a Progress report, while using the international reference report of the GRI, Global Reporting Initiative.

Prodware voluntarily chose to rally and to adopt all the ethical rules of Global Compact, the Worldwide Pact of the United Nations.

At 31st December, 2014, RSE consolidation includes the French company Prodware SA which represent 43% of the human resources of the Group.

Given the recent significant acquisitions made by Prodware, significant foreign subsidiaries are not included in this scope without indicators deemed sufficiently reliable to December 31th, 2014.

The establishment of a more reliable reporting in CSR will be progressively implemented by the Group.

23. OUR SOCIAL RESPONSIBILITY

23.1. Human capital: our first wealth

Besides the yearly establishment of the Social report, Prodware SA assesses its social performances through Human Resources indicators from the « Global Reporting Initiative ». The indicators presented below are the GRI « Core indicators » defined in partnership with the United Nations Environment Program (UNEP).

23.1.1. 23.1.1. Total workforce by employment type, status and work contract (GRI CORE Indicator LA 1) (LA = Labour, indicators related to work conditions)

Prodware average workforce in 2014 amounts to 608 employees (700 in 2013). The executives portion of the workforce has kept on increasing as following: 69% of executives against 31% of non-executives in 2014 (2013: 68% of executives against 32% of non-executives).

Workforce 2007 2008 2009 2010 2011 2012 2013 2014

Total 752 761 730 645 646 738 700 608

Variation +1,1% -4,0% -11,60% 0% +14,2% -5,4% -15,4%

Executives 51,4% 50,4% 56,9% 56,7% 60,9% 67% 68% 69%

Non-executives 48,5% 49,5% 43,1% 43,2% 39,1% 33% 32% 31%

Prodware uses fixed-term contracts only in the case of employee’s replacement or for specific needs. Their share in the workforce is therefore relatively low. In 2014, 7 fixed-term contracts were signed during the year. At December 31, 2014, there were 5 fixed term employees.


Prodware hired 28 permanent employees in 2014; 25 men and 3 women.23.1.2. Staff turnover (GRI CORE Indicator LA 2)

With an average staff of 608 employees and 82 departures, employee turnover is of 13.49%. [According to SYNTEC turnover definition: Number of departures (excluding DPC, CDD in french)/ average workforce]

2007 2008 2009 2010 2011 2012 2013 2014

Variation 19,8% 21,6% 20,0% 17,6% 13,0% 14,77% 18% 13,49%

The turnover rate this year (13.49%) confirms that the rise observed in 2013 was occasional and not structural

We analyse this turnover depending on status, employment and age group.

Regarding the status, the evolution of falling turnover was more significant on executive workforce than on non-executives.

2014 2014 departures (excluding DPC) Average workforce 2014 turnover 2013 turnover

Cadres 60 420 19,5% 14,29%

Non-cadres 22 188 14,9% 11,7%

Workforce turnover by type can be presented as follows:

2014 Consulting Developpement Hotline Commerce Administrative TOTAL

Departures (excluding DPC) 40 9 7 14 12 82

Average workforce 252 112 40 107 97 608

Turnover 15,87% 8,04% 17,5% 13,08% 12,37% 13,49%




Turnover 18,8% 13% 11% 25,7% 14,2% 18%




Turnover 19,7% 6,4% 12,7% 13,2% 13,7% 14,7%

One may notice that the turnover decreased in almost all areas. The turnover of consultants and salesmen is particularly low related to the high mobility noted and while the market demand still exists in the SSII sector.

Concerning the age group distribution of turnover rate in 2014, one should notice its significant decline compared to 2013, except for those under 25.

2014 < 25 years 25-34 years 35-44 years 45-54 years 55-64 years TOTAL



Turnover 7,14% 20% 10,13% 12,78% 17,31% 13,49%




Turnover 0% 21,9% 18,2% 12,4% 16,3% 18%





Turnover 4,1% 17,2% 14,8% 12,4% 19,5% 14,77%

23.1.3. Rémunération et leur évolution

The remuneration policy is based on the following objectives:

› Attract and retaining best talents; › Motivating employees by a remuneration policy combined for some employees with performance targets in line with the major challenges of the company.

23.1.4. Organisation of working time

As part of the Syntec branch agreement, working time reduction to 35 hours a week was implemented at Prodware since 2000 for all its employees.

The large majority of employees are on permanent contracts.

67 people are part-time employees (53 women and 14 men), especially in the context of parental leave. According to the law, parenting interviews was set up. Half-dozen employees benefited during 2014.

23.1.5. Health and security at work (GRI CORE Indicator LA 7)

In 2014, 6,428 leave days have been recorded all causes considered (illness, maternity, work injuries, various reasons, personal reasons, including paternity leaves).

The work injury rate is of 0.15% in 2014 (against 0.1% in 2013) and remains stable. The number of work injuries rises to 12 in 2014 against 6 in 2013 and 17 in 2012.

Prodware has a Hygiene, Safety and Working Condition committee (CHSCT in french). This committee is assigned to occupational hazards prevention and to working conditions improvement activities. In accordance with Article L.4611-8 and L.4612 of the Labour Code, the committee compile annually a record of undertook or initiated activities.

The absentee rate is of 4.7% (in 2013: 4.22%), mainly related to illness leaves rather than work injuries or professional illness.

This variation is also observed by the Alma Consulting Group in its annual report which noticed an absentee rate of 4.26% in France in 2013 (illness, work/journey and professional illness). Absenteeism within Prodware is slightly below the national average in 2013.

Absenteeism 2008 2009 2010 2011 2012 2013 2014

Total leave days (open days) 7593 6160 6172 5056 6377 6690 6428

Absentee rate 4,5% 3,8% 4,2% 3,4% 3,81% 4,22% 4,7%

- of which work injury leave 0,1% 0,1% 0,2% 0,06% 0,10% 0,1% 0,15%

- of which maternity leave 1,2% 0,7% 1,0% 0,55% 0,85% 0,56% 0,55%

- of which work illness leave 2,4% 2,3% 2,3% 2,3% 2,31% 3,09% 3,63%


23.1.6. Training and education (GRI CORE Indicator LA 10)

A total of 540 training days have been financed in 2014 (2013: days) (category said « imputable ») for the whole workforce.

There is also the equivalent of 108 days of safety training for 118 employees which are not charged and which included a safety prevention investment and technical trainings.

Finally, 658 training days has been provided to 267 employees.

The average number of training days is of 2.5 days per employee with an average of 2.5 days for both executives and non-executives (2013: 2 for non-executives and 3 for the executives).

Technical fields trainings and job trainings have globally concerned 50% of the investments made by the Prodware Management of Human resources. Other important investments are then English and management trainings.

Training days delivered 2009 2010 2011 2012 2013 2014

For the whole workforce 1423 1140 865 902 736 540

Per executive 4,1 3,6 3,5 3 3 2,5

Per non-executive 4,3 3,4 3,1 4 2 2,5

Per male employee 4,1 3,7 3,6 3,3 2 2.3

Per female employee 4,3 3,2 3,1 3,1 3 2.9

54 employees took advantage from training as part of the Individual Right to Training (DIF in french).

Prodware employed fifteen young people in training contract in 2014 (learning and professional), from second-year University to Master degree level, and 15 interns still at school.

23.1.7. Diversity (GRI CORE Indicator LA 13)

The average age of Prodware employees in 2014 is 41.6 years old (40.8 in 2013 and 39.8 in 2012). It is 43 years old for the executives and 37 years old for the non-executives.

Women accounted for 27% of the workforce remaining steady compared to 2013 and 2012 (2013: 27%). They represent 21.8% of the executives (2013: 23%).

Demography 2007 2008 2009 2010 2011 2012 2013 2014

Workforce average age 37.5 37.5 38.6 38.8 39.0 39.8 40.8 41.64

Women rate in the workforce 32.4% 31.8% 29.5% 30.3% 29.0% 27.7% 27% 27%

% women in executives group 24.0% 22.6% 20.4% 21.2% 22.0% 20.7% 23% 21.8%

23.1.8. Concerning the integration of disabled employees

Disabled employees accounted for 3.3% of the average workforce in 2014 (2013: 3.1%, 2012: 3.04%, 2011:3.24%, 2010: 1.87%, 2009: 1.37%), or 20 people (2012and 2013: 22, 2011: 18, 2010: 12, 2009: 10).

10 of them are under the senior TH category (>45 years old) versus 9 last year.

Our work station improvement policy has been maintained in 2014: chairs, articulating keyboards, wrist rests, ergonomic vertical mouse, split keyboards, foot rests, audio systems, portable PC support.

In the same way to that, internal communication has been enhanced – newsletters- a testimony movie has also been screened to our employees which allowed once again to raise awareness to disability; all these communications being available on the Human resources intranet.


Likewise, Prodware kept on outsourcing the organisation of cocktails marketing operations (mailing and folders) in protected warehouses.

23.1.9. Organisation of labour relation

There is within Prodware:

› A Workers Committee (CE in French); › Staff representatives (DP in French); › Hygiene, Safety and Working Condition committee (CHSCT in French); › 2 union representatives elected as staff representatives and as members of the Workers Committee and the CHSCT; › 4 members of the Workers Committee take part in meetings of the Board of Directors and in the General Meeting.

23.1.10. Equal opportunities (GRI CORE Indicator LA 14)

Regarding gender equality:

Men/women wages ratio 2008 2009 2010 2011 2012 2013 2014

Non-executive category 0,89:1 0,86:1 0,91:1 0,97:1 0,91:1 0,89:1 0,92:1

Executive category 0,87:1 0,89:1 0,86:1 0,87:1 0,93:1 0,91:1 0,89:1

Consolidation Women/Men wage ratio 0,88:1 0,875:1 0,89:1 0,92:1 0,92:1 0,90:1 0,905:1

In the framework of actions led in 2011 for gender equality, Prodware launched a program aiming at better managing maternity leaves while initiating a parenthood interview. This interview objectives are:

› Improve the family/professional lives reconciliation while easing the departure conditions and the return to the company while discussing on that matter. › Neutralize the effects of leaves on careers. › Understand the employee situation.

It has been launched at the beginning of 2014.

23.1.11. Generation agreement:

To follow up with the implementation of its first senior agreement, Prodware negotiated with its social partners the new « generation agreement » aiming at better meeting with legal obligations in that matter.

This agreement has various objectives:

› Easier employment and sustainable integration of the youths through a program adapted as well to training contracts as to internships (access to the company training program, integration path, welcome booklet, referents). › Easier employment and preservation of seniors in the workforce (preservation of a hiring rate of 1% of the total recruitments, improve employment through training, working plans, second half career interview). › Easier knowledge and skills sharing (tutoring and tutoring path).

23.1.12. Promotion and enforcement of ILO terms and conventions

The reporting scope was limited this year to France, no action was carried out in favour of human rights within this scope.


24. ENVIRONMENTAL RESPONSIBILITY

Prodware endeavours to minimize its ecological footprint on nature while rather using sustainable actions and developing solutions offers for management and assistance to sustainable development.

24.1. Environmental policy:

24.1.1. Environmental organisation and activities

In this voluntary effort of sustainable development, Prodware wishes to reduce its ecological footprint to the level necessary to its productivity.

Since 2012, in accordance with Grenelle 2, all companies employing more than 500 people have to produce carbon balance assessment. Prodware anticipated this requirement and produced its first carbon balance in 2009. Annually renewed until 2013, these assessments enabled to detect progress tracks and to measure results on a comparable basis.

In the absence of specific events generating a significant gap on consumption and thus on CO2 emissions, the Greenhouse Gas Protocol was not updated for 2014 at the date of this report.

This is a relevant choice to consider the carbon balance assessment as an indicator of the overall environmental impact of a services company such as Prodware. Taking the measure of key items of expenditures (travel, heating / air conditioning, materials consumption…) it covers indeed the core of Prodware tertiary activity.

RODWARE France Greenhous gas emissions 2010 2011 Evolution

2010/2011 2012 Evolution 2011/2012 2013 Evolution

2012/2013

Total CO2 emissions (T CO2 equ) 5 786 6 083 5,13% 6 134 0,84% 5 852 -4,60%Workforce 641 770 20,12% 761 -1,17% 644 -15,37%CO2 emissions per employee (T CO2 equ) 9,03 7,90 -12,48% 8,06 2,04% 9,09 12,74%Revenue (€m) 78 94 21,12% 94 -0,21% 96 1,84%CO2 emissions per €1 of revenue (grams CO2 equ) 74 65 -13,20% 65 1,06% 61 -6,32%

PRODWARE France Consumption of energy (gas and electricity) 2010 2011 Evolution

2010/2011 2012 Evolution 2011/2012 2013 Evolution

2012/2013 2014 Evolution 2013/2014

Total energy consumption (kWh) 1 015 976 970 216 -4,50% 1 133 977 16,88% 981 400 -13,46% 849 667 - 13,42%

Revenue (€m) 78 94 94 96 96

Energy consumption divided by revenue (kWh/revenue in €m) 13 049 10 311 -20,99% 12 051 16,88% 10 241 -15,02% 8 851 - 13,58%

Workforce 641 770 761 644 608

Energy consumption per employee (kWh/workforce) 1 585 1 260 -20,50% 1 490 18,26% 1524 -2,27% 1 397 -8,33%

Property surface area (square metres) 7 938 8 515 9 128 9 970 9 367

Energy consumption per square metres (kWh/total surface area in square metres) 128 113,94 -10,98% 124 9,03% 98 -20,76% 91 - 7,14%

24.1.2. Training and information activities for employees conducted for environmental protection

Awareness for fire extinguishers handling and fire drill exercises are also promoted and have gathered more than 108 employees in 2014 (fire SST, fire extinguishers handling, CACES, electrical security clearance) against 122 in 2013 and 95 in 2012.

24.1.3. Traveling policy

The company has continued its travel policy that leads to minimize the environmental impact of employees business travels. For example, flying is allowed only if the train journey exceeds 3 hours. Vehicles with lower energy consumption are systematically rented, failing to find an internal carpooling system available in car rental agencies.


After the significant investments made by the Group for the establishment of videoconferencing tools in the main offices in France and abroad, 1,628 videoconferences, totalling 1,990 hours held in 2014, thus limiting the number of business trips of employees in France or abroad.

24.1.4. Resources devoted to prevention of environmental risks and pollution

Environmental risks, related to our activity, are relatively low. The most significant hazards in term of severity are fire risks. Training exercises was implemented on this topic (see previous section).

No provision was recorded on the environmental field and no amount was paid as such.

24.2. Pollution and waste treatment

24.2.1. Resources devoted to prevention of environmental risks and pollution

Environmental risks, related to our activity, are relatively low. The most significant hazards in term of severity are fire risks. Training exercises was implemented on this topic (see previous section).

No provision was recorded on the environmental field and no amount was paid as such.

24.2.2. Prevention, recycling and disposal of wastes procedures

Main wastes generated by Prodware are office wastes and computer equipment reaching the end of its life-cycle.

As an IT business, Prodware is subject to the requirements from the directive on Waste Electrical and Electronic Equipment and on its recycling.

24.2.3. Noise disturbance

Through its business, the Group is not subject to noise disturbance.

24.3. Sustainable use of soils

24.3.1. Water and raw material consumption

Through its business, the Group uses a small amount of water and raw materials. Moreover, the company rents its offices; these consumption are not always available.

24.3.2. Use of soilsProdware SA has offices located in urban areas in which it does not own.

24.4. Adaptation to climate changeProdware is not impacted by potential climate change.

24.5. Biodiversity protectionProdware has no real impact on biodiversity.


25. OUR ECONOMIC RESPONSIBILITY

25.1. Information relating to societal commitments towards sustainable development

25.1.1. Eco friendly products offer

Most of Prodware assisting products and services which are on the market under the GreenITude® brand have an economic and ecologic profitability. This is due to:

› une meilleure gestion des flux; › l’optimisation de la consommation énergétique des équipements

informatiques; › la dématérialisation des documents; › la flexibilité et l’évolutivité de nos solutions de gestion adaptées aux besoins

de nos clients.

The outcome in 2012 of a management and reporting software adapted to Sustainable development strategy will allow companies to formalize the production of their annual extra financial statements.

Besides GRI guidelines, Global compact and ISO 26000, Prodware will propose some samples of sustainable development reporting which could be customized for each business activity.

This new software offer Sustainability Manager Suite benefited from 3 years of development in France supported by public authorities, among which Oséo, ADEME and the Innovation department of the Industry ministry, which have co-financed 50% of this project in the framework of the EcoTech 2009 call.

25.1.2. Territorial, economic and social impact of the company’s activity

Prodware has a strong national position for local service: the head office of Prodware Group is in Paris. 18 agencies spread throughout the country provide responsive service and proximity.

Over 19,000 Prodware customers benefit from our presence in the territory.

25.1.3. Partnership and sponsorship activities

The company did not implement partnership or sponsorship activities in 2014.

25.2. Suppliers and outsourcing

The company uses few external outsourcing. Its main suppliers are software companies such as Microsoft or Sage.

25.3. Fairness of practices

Ethics and integrity are part of Prodware values. Thes values are included in the Managerial Charter of the Company and applies to all employees.

25.4. Others commitments toward human rights

The Company implemented no activities for human rights in 2014.

SUSTAINABILITY


26. PRODWARE, AN INNOVATIVE AND CITIZEN COMPANY

Prodware, an innovative company, joined the OSEO Excellence club in 2010 with 2000 other leading companies.

Prodware is evaluated annually by EthiFinance teams in charge of the GAIA Index, launched in October 2009. Supported by MiddleNext association and the SFAF, the GAIA Index information system enables to determine the French average values commitment on financial criteria (Environment, Social, and Governance)

With 400 references, the Gaia Index panel is composed of 280 listed companies spread in three representative sectors of the French economy: industry, services and distribution. This 280 companies represent 157 billion euros in sales and 1.1 million employees. Questions and scoring system are controlled by an independent committee of investors, listed companies and analysts.

Since 2012, Prodware remain without interruption in the TOP 5 companies with revenue under € 150 million in all sectors – industry, services and distribution.


APPENDIX 1 : SUBSIDIARIES’ RESULTS

Subsidiaries’ results are presented in the below table before consolidation restatements.

In Euros Share Capital Other equity Share Share gross value

Share net value

Untaxed revenue for

the period

Net income of the period

Subsidiaries owned directly or indirectly for more 50%

Cap Lease 40 000 167 257 50% 20 779 20 779 3 177 345 38 893

Prodware Nederlands BV 6 800 000 -7 715 208 100% 12 565 488 12 565 488 27 177 604 -6 176 779

Qurius Tchequie 7 299 90 436 100% 915 177 -23 312

Prodware Deutchland AG 51 150 -745 380 100% 10 560 530 10 560 530 15 114 535 -3 336 926

Prodware Advanced Sol Gmbh 100 000 230 699 100% 530 317 *

CKL Software GmbH 26 500 1 361 832 50% 1 556 029 337 336

Prodware UK Limited 240 394 016 100% 2 000 000 2 000 000 8 791 292 200 463

Prodware Belgium 2 300 000 -2 414 548 100% 2 955 013 2 955 013 5 169 782 -1 116 466

Watermark Belgium NV 835 000 -1 034 520 100% 1 1 -17 548

Prodware Luxembourg 15 000 -510 837 100% 15 000 - 362 683 -73 967

Prodware East Europe 807 148 916 100% 1 000 1 000 116 266 18 517

Prodware Spain 152 010 1 269 957 100% 2 600 000 2 500 000 18 183 819 556 858

Prodware Tunisie 22 167 80 725 80% 25 000 25 000 361 646 -21 193

Prodware Maroc 45 070 -118 415 99,3% 44 337 44 337 1 161 783 56 312

NA2 SI 18 028 -72 549 80% 14 550 - - **

Rentasoft 104 214 -273 656 100% 200 000 - 975 266 -29 619

Prodware Israël 73 017 770 214 100% 6 038 756 -148 241

Prodware Dynamics Ltd 95 111 50% - 882 365 63 546

mAXimum ERP Ltd 208 23 742 100% 405 905 405 905 51 998 -71 484

Prodware Business Solutions 36 162 690 200 54% - 2 972 807 -31 529

Prodware Weca 15 245 -13 706 51% 7 775 7 775 530 126 -13 132

Prodware Georgie 15 008 100% 112 199 15 008

Subsidiaries owned for less 50%

Cap Vision 10 000 20% 20 000 20 000 NC

Iris Capital 625 920 25,62% 344 990 344 980 NC

*Company integrated for accounting purpose within Prodware Deutschland AG.**Dormant company


APPENDIX 2 : TABLE OF DELEGATION OF POWERS AND AUTHORISATIONS REGARDING CAPITAL INCREASES AND USE OF THESE AUTHORISATIONS IN 2013

Authorizations Date of general meeting

Duration of the delegation

Delegation expiry date

Amount of authorized capital

increase

Amount used during

the year 2014

Remaining amount to use Comments

Capital reduction by cancelling repurchased shares

25/06/2014 (12nd resolution) 18 months 24/12/2015 10% of the capital 0 10% of the

capital

Renewal of the authorization given on June 28th, 2013

Capital increase for qualifiedinvestors only

25/06/2014 (13rd resolution) 18 months 24/12/2015 €3m (€40m

VMDAC) 0 €3m (€40m VMDAC)


Capital increase for strategic operations only

25/06/2014 (14th resolution) 18 months 24/12/2015 €3m (€40m



Issuance of share subscription warrants to the benefit of the members of the general management, employees and corporate officers

25/06/2014 (15th resolution) 38 months 24/08/2017 5% of the capital 0 5% of the

capital


Free allocation of shares to employees and corporate officers

25/06/2014 (16th resolution) 38 months 24/08/2017 5% of the capital 0 5% of the

capital


Issuance of share subscription warrants or of new or outstanding share subscription warrants to the benefit of the members of the general management, employees and corporate officers

25/06/2014 (18th resolution) 18 months 24/12/2015 5% of the capital €0 €0

Capital increase through issuance of shares for employees only

25/06/2014 (20th resolution) 26 months 24/08/2016 150,000 0 150,000

Capital increase through issuance of shares/ securities giving access to the share capital with or without a maintenance of the preferential subscription right, including through private placement

28/06/2013 (16th to 20th resolution) 26 months 27/08/2015 €3m (€40m


Reminder


30/06/2011 (10th resolution) Cancelled €120,315 €0

Conversion in January 2014 of a convertible bond issued in December 2011 – creation of 185,100 new shares


15/01/2010 (1st resolution) Cancelled €166,725 €0

Conversion in January 2014 of a convertible bond issued in February2011 – creation of 256,500 new shares

Issuance of share subscription to the benefit of the members of the general management, employees and corporate officers

30/06/2011 (17th resolution) Cancelled €0 € 222,235

Possible exercise of 341,900 warrants issued in July 2012 (1st of July 2017)

VMDAC = Valeur mobilière donnant accès au capital (Security giving access to the capital)


APPENDIX 3 : AUDITORS’ FEES

SARL C. TOURNOIS EXCELIA AUDIT R.S.P B.D.O

Amount excl. VAT % Amount excl.

VAT % Amount excl. VAT % Amount excl.

VAT %

In €k 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013

Audit

Statutory Auditing

Certification, Examination of the

Individual and

Consolidated Financial Statements (b)

•Issuer 145 124 100% 100% 145 124 100% 78%

•Wholly integrated subsidiaries 22% 15 27 100% 100% 161 192 100% 100%

Other due cares and services

directly related to the

Statutory Auditors' mission (c)

•Issuer

•Wholly integrated subsidiaries 0%

Subtotal (1) 145 124 100% 100% 145 124 100% 100% 15 27 100% 100% 161 192 100% 100%Other services provided by

the networks to the wholly integrated

subsidiaries (d)

Legal tax, social

Other (to specify if > 10 % of

audit fees)

Subtotal (2) 0% 0% 0% 0% 0% 0% 0% 0%

TOTAL (1) + (2) 145 124 100% 100% 145 124 100% 100% 15 27 100% 100% 161 192 100% 100%

Prodware France45, quai de la Seine, 75019 PARIS T +33 (0) 979 999 799 – www.prodware.fr – [email protected]

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