rapport annuel octo 2015 veng - amazon...

OCTO Technology | Rapport annuel 2015

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OCTO Technology | 2015 Annual Report

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Disclaimer: this is a free and partial translation into English of a report issued in French and provided solely for the

convenience of English reader.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2015

Consolidated statement of income

In thousand euros Note 2015 2014

Net revenue 1 38,424 27,624

Other operating income 3 1,274 951

Purchases 4 (1,824) (804)

Other operating expenses 5 (5,535) (4,404)

Taxes (981) (748)

Staff expenses 6 (27,008) (20,259)

Depreciation, amortisation and provision 7 (523) (525)

Operating income 2 3,827 1,834

Financial income 8 (3) 82

Income before taxes of fully consolidated companies 3,824 1,916

Non current income 9 (134) (14)

Income taxes 10 (753) (380)

Net income of fully consolidated companies before

goodwill amortisation 2,938 1,522

Goodwill amortisation (30) -

NET INCOME 2,908 1,522

Net income attributable to minority interests 64 77

NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS 11 2,844 1,445


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Consolidated balance sheet

In thousand euros Note 2015 2014

Goodwill 12 149

Intangible assets 13 311 242

Tangible assets 14 880 757

Financial assets 15 584 229

Fixed assets 1,925 1,229

Trade account receivables 16 12,999 10,208

Other receivables 17 2,326 2,412

Cash and cash equivalents 18 12,886 5,241

Current assets 28,238 17,861

TOTAL ASSETS 30,136 19,090

Share capital 19 461 373

Additional paid-in capital 10,044 5,259

Consolidated retained earnings 2,328 1,915

Translation reserve (36) (54)

Net income 2,844 1,445

Equity attributable to equity holders 15,642 8,939

Equity attributable to minority holders 191 135

Provisions 20 528 341

Financial liabilities 18 - -

Trade account payables 21 1,543 953

Other payables 22 12,231 8,723

Liabilities 13,801 9,676

TOTAL EQUITY AND LIABILITIES 30,136 19,090


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Consolidated statements of cash flows

In thousand euros 2015 2014

Consolidated net income (including minority interests) 2,908 1,522

Adjustments for non-cash items

- Depreciation, amortisation and impairment 656 528

- Changes in deferred tax (135) (205)

- Gains and losses on disposals - -

Cash from operating activities before changes in working capital 3,429 1,845

Changes in working capital 1,513 (707)

Cash from operating activities 4,942 1,138

Investments in fixed asset (1,015) (369)

Proceeds from disposals of fixed assets 23 19

Effect of changes in scope of consolidation (221)

Cash from investing activities (1,213) (350)

Dividends paid (995) (926)

Capital increase/decrease 4,870 119

Cash from financing activities 3,875 (807)

Effect of changes in exchange rates 42 24

INCREASE / DECREASE IN CASH AND CASH EQUIVALENTS 7,646 6

Cash and cash equivalents at beginning of period 5,241 5,234

CASH AND CASH EQUIVALENTS AT ENDING OF PERIOD 12,887 5,241


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Consolidated statements of changes in equity

In thousand euros Share

capital

Additional

paid-in

capital

Consolidated

retained

earnings

Translation

reserve

Net

income

Equity -

equity

holders

Equity -

minority

interests

TOTAL

EQUITY

At 31 December 2013 370 5,151 1,658 (69) 1,183 8,294 45 8,339

Capital increase 3 108 109 10 119

Dividends paid (926) (926) - (926)

Allocation to earnings 265 (265) - - -

Net income 1,445 1,445 77 1,522

Exchange differences 1 15 16 2 18

Changes in scope (8) 8 - - -

At 31 December 2014 373 5,259 1,915 (54) 1,445 8,938 135 9,073

Capital increase 89 4,785 (7) 4,866 3 4,869

Dividends paid (995) (995) - (995)

Allocation to earnings 451 (451) - - -

Net income 2,844 2,844 64 2,908

Exchange differences 18 18 2 20

Changes in scope (12) (12) (30) (42)

Others (17) (17) 17 -

At 31 December 2015 461 10,044 2,328 (36) 2,844 15,642 191 15,833


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Notes to the consolidated financial statements

1. Accounting policies

1.1 Standards applied

The Octo Group’s consolidated financial statements have been prepared in accordance with French GAAP, in application of the

regulation issued by the Accounting Regulation Committee (Comité de la Réglementation Comptable).

1.2 Accounting principles

General principles of prudence, continuity, sincerity and faithful image of the Group’s financial situation are applied in respect of the

following conventions:

� going concern assumption

� consistency and comparability

� cut off respect

� historical costs

� and in accordance with general guidelines for the preparation and presentation of annual financial statements. The

recommended accounting methods have been applied if appropriate.

Amounts in the financial statements are in thousand euros, unless otherwise stated.

1.3 Consolidation methods

Entities controlled directly or indirectly by the Group are fully consolidated. Control is defined by having majority of the voting

rights and/or by being able to monitor financial and operating policies.

1.4 Scope of consolidation

The list of the consolidated entities at 31 December 2015 is as follow:

Entity Headquarter Country % of interest Consolidation

method

OCTO Technology SA N° SIRET : 418 166 096 00051

50 avenue des Champs-Elysées, 75008 Paris France Parent

Company Fully consolidated

Appaloosa Technology SAS N° SIRET : 801 364 258 00013 50 avenue des Champs-Elysées, 75008 Paris France 96,00% Fully consolidated

Elcurator SAS N° SIRET : 809 501 679 00017

50 avenue des Champs-Elysées, 75008 Paris France 66,66% Fully consolidated

OCTO Technology SA 7 avenue du théâtre, 1003 Lausanne Switzerland 90,00% Fully consolidated

OCTO Technology SA 49 rue Jabal Tazekka, 10000 Agdal, Rabat Morroco 84,90% Fully consolidated

OCTO Technology LTDA 1811 avenue Faria Lima, CJ 216/217 Sao Paulo Brasil 99,03% Fully consolidated

OCTO Technology PTY Ltd 263 Clarence Street, NSW 2000, Sydney Australia 100,00% Fully consolidated

OCTO Technology SPRL* 4 rue des Pères Blancs, B-1040 Bruxelles Belgium 100,00% Fully consolidated

*Standby position of the belgium subsidary

The 2015 changes in the scope of consolidation are the following:

- Creation on April 2015 of OCTO Technology PTY Ltd (Australie), 100% held by OCTO Technology;

- Creation on February 2015 of Elcurator SAS, 66.66% held by OCTO Technology;

- Complementary purchase of 5% of the OCTO Technology’s shares (Maroc) on July.


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1.5 Closing

The Group entities are consolidated on the basis of the financial statements at and for the year ended 31 December 2014, closing

date of their social financial statements, and restated where applicable in accordance with the Group's accounting principles.

1.6 Translation of the financial statements of foreign companies

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the dates of the

transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-

end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement

under the heading financial income.

1.7 Goodwill

Goodwill on acquisitions is booked when there is a difference between:

- the acquisition cost of shares (including the related costs net of taxes) and

- the share of the acquiring company in the assets and liabilities evaluated at the acquisition date.

Positive goodwill is booked under fixed assets and amortized over a period that reflects, as reasonably as possible, the assumptions

made or objectives set at the time of the acquisition. Goodwill is generally amortized over 3 years.

The Cash Generating Units (CGU) correspond to the subsidiaries included in the scope of consolidation. At the end of the year or

in the event of a loss in value, impairment tests are performed, on an individual basis, for each CGU that include goodwill.

1.8 Research and development expenses

Development expenditure which meets the activation criteria is recognised as an intangible asset in accordance with French GAAP

(similar to IFRS criteria).

As such, the group has capitalised the development expenses engaged for elCurator online platform for 61 thousand euros.

Previously developed and tested internally, a free trial version is available since july 2014, and put on the market since the beginning

of 2015.

For 2014, the total research and development expenses, including amortisation of capitalised costs amounts to 1,949 thousand

euros (1,701 thousand euros in 2013).

1.9 Intangible assets

Intangible assets are recorded at historical cost and consist mainly of licenses and softwares. They are amortised on a straight-line

basis over a period of 1 to 5 years.

1.10 Tangible assets

Tangible assets are recorded at purchase or production cost, plus incidental costs required to bring the asset into usable condition.

They are depreciated on straight-line basis over the following expected useful lives:

� General equipment, fixtures and fittings : 7 to 15 years

� Computer hardware : 3 to 5 years

� Office equipment and furniture : 5 years

� Vehicles : 5 years

1.11 Trade account receivables

Trade accounts receivable are recorded at their face value. If applicable, a provision for impairment is recorded in case of high risk

of non-recovery.


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1.12 Foreign currency operations

Revenues and expenses denominated in foreign currencies are recorded at the rate of exchange prevailing at the transaction date.

Current liabilities and receivables in foreign currencies appear in the balancesheet at their exchange value in euros at the closing

date. Difference resulting from the conversion of foreign currencies transactions are recorded in the statement of income.

1.13 Cash and cash equivalents

Cash and cash equivalents consist of highly liquid and immediately available investments. Short-term investments are

recorded at acquisition cost, with any unrealized losses covered by a provision for impairment.

1.14 Provision for pension benefits

A provision for pension benefits corresponding to the compensation set in the IT professional agreement (convention Syntec) is

recorded.

The principal assumptions used to determine the provision are the following:

� Retrospective method of projected credit units

� Retirement age : 65-67 years old

� Average salary : 1/12 of fixed annual remuneration

� Discount rate Iboxx Corporate AA 10+ as at 31 december 2015 : 2,03%

� Life table from official INSEE national datas

� Social security rate : 50%

1.15 Revenue recognition

Revenue recognition depends on the nature of the service provided:

- Time-spent services correspond to skills and expertise provision. Revenue is progressively recognised as the service is performed.

It corresponds to the time spent in days valued at daily selling price.

- Fixed price services correspond to the execution of a project resulting in a deliverable, a summary report or a product according

to the type of service provided (consulting or implementation). Revenue is progressively recognised with the operational progress

of the project, corresponding mainly to the time spent. When an offset appears, delay or advance, between the time effectively

spent and the actual progress, revenue is recognised according to actual progress.

Accordingly, this leads to the recording of invoices to be established or accrued income when invoicing does

not reflect the stage of completion. These are mainly delay for billing for time-spent services and payment schedule for fixed prices

services.

1.16 Other operating income

In accordance with the substance over form principle, the Tax Research Credit (‘CIR’) is recognised as operating subsidy.

1.17 Taxes

In application of the ANC position, the Territorial Economic Tax (‘CET’) is accounted in operating income. This represents 1.3% of

the consolidation net revenues.

1.18 Payroll expenses

The Competitiveness Employment Tax Credit (‘CICE’) is recognised in diminution of the payroll expenses.

1.19 Non-reccuring income and expenses

Non-recurring income and expenses include items that are both exceptional and nonrecurring and therefore cannot be considered

to be inherent to the Group's activity.


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1.20 Income taxes

Income taxes correspond to the sum of current and deferred taxes. Deferred taxes are recorded on all temporary differences

between the book value of assets and liabilities and their tax bases.

1.21 Earnings per share (EPS)

Basic earnings per share is calculated by dividing the consolidated net income by the weighted average number of shares

outstanding during the period.

Diluted earnings per share is calculated by dividing the consolidated net income by the weighted average number of shares in

circulation, plus all the potentially dilutive shares (if any). Dilutive instruments comprise mainly common share warrants ('BSAs') and

employees bonus shares.

2. Notes to the consolidated financial statements

Note 1 | Net revenue – Segment information

� Business segments


Services, Manufacturing, Retail, Energy 14,835 39% 7,109 26%

Bank, Finance, Insurance 13,299 35% 11,009 40%

Telecoms, Media, Web & Entertainment 7,587 20% 8,017 29%

Others (rebilling, training, etc) 747 2% 454 2%

Subtotal Consulting 36,468 95% 26,589 96%

USI conference 1,372 4% 847 3%

Products (Appaloosa & elCurator) 584 2% 188 1%

TOTAL 38,424 100% 27,624 100%

� Geographical segments


France (including USI conference &

Products) 34,545 90% 24,022 87%

Morocco 1,473 4% 1,889 7%

Switzerland 1,374 4% 1,180 4%

Brazil 574 1% 448 2%

Australia 458 1% - -

Belgium - 0% 85 0%

TOTAL 38,424 100% 27,624 100%


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Note 2 | Other segment information

� Operating income


France (including USI conference & Products) 3,507 1,584

Morocco 521 521

Switzerland 5 64

Brazil (47) (259)

Australia (155) -

Belgium (3) (77)

TOTAL 3,827 1,834

� Total assets


France (including USI & Products) 28,218 17,598

Morocco 1,600 1,174

Switzerland 212 161

Brazil (34) 105

Australia 92 -

Belgium 49 52

TOTAL 30,136 19,090

Note 3 | Other operating income


Capitalised production 186 103

Operating subsidy 1,053 825

Transferred expenses and other operating income 35 23

TOTAL 1,274 951

Capitalised production consists essentially in the capitalized development costs of the elCurator product and in the test benchs.

Operating subsidy corresponds mainly to the OCTO Technology, Appaloosa Technology and Elcurator Tax Research Credit (‘CIR’)

on research work performed in 2015 for 1,048 thousand euros.

Note 4 | Purchases


Subcontracting (1,677) (684)

Other purchases (147) (120)

TOTAL (1,824) (804)


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Note 5 | Other operating expenses


Property rental and related charges (949) (1,006)

Training, conferences and seminars (534) (464)

Legal, audit & other fees (503) (420)

Public relations, communication (including USI conference) (1,662) (976)

Mission and travel expenses (1,117) (891)

Telecom and internet expenses (271) (220)

Recruitment expenses (141) (135)

Other expenses (358) (291)

TOTAL (5,535) (4,404)

The raise in the public relations expenditures is related to the increased budget allocated to the USI conference.

Note 6 | Staff expenses


Wages and salaries (18,223) (13,976)

Social security charges (8,371) (6,017)

Other staff expenses (167) (136)

Employee profit sharing (247) (130)

TOTAL (27,008) (20,259)

Staff expenses include the OCTO Technology, Appaloosa Technology and Elcurator Competitiveness Employment Tax Credit

(‘CICE’) for 90 thousand euros in 2015.

� Geographical average staff :

2015 2014

France 235 192

Morroco 14 11

Switzerland 10 10

Brazil 9 8

Australia 5 -

Belgium 0 1

TOTAL 274 222


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Note 7 | Operating depreciation, amortisation and provision


Depreciation of intangibe assets (153) (97)

Depreciation of tangibe assets (286) (262)

Provision for contingencies (52) (19)

Provision for pension (31) (147)

Depreciation of trade receivables (1) -

TOTAL (523) (525)

Note 8 | Financial income


Income from short-term investment 4 -

Net profit on disposal of short-term investment 16 67

Interest income 22 16

Interest expense (5) (7)

Net foreign exchange income (40) 4

Depreciation and provision - 2

TOTAL (3) 82

Note 9 | Non current income


Income from the disposal of fixed assets - 1

Non-recurring expense on management operations (22) (12)

Non-recurring income on management operations (7) -

Depreciation and provision (105) (3)

TOTAL (134) (14)

Depreciation and provision correspond to employment-related litigations.


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Note 10 | Income tax

� Detail of income tax expense


Income tax (926) (605)

Other tax credits and reductions 39 20

Current tax expense/income (887) (585)

Deferred tax 135 205

Effective tax expense/income (753) (380)

� Tax proof


Consolidated income before tax 3,661 1,901

French standard tax rate 33.33% 33.33%

Theoretical tax expense at French standard rate (1,220) (634)

Differences in foreign tax rates 15 24

Impact of permanent differences* 414 209

Other tax credits and reductions 39 20

Effective tax expense/income (753) (380)

* including goodwill amortisation

Note 11 | Earnings per share (EPS)

2015 2014

Net income – attribuable to equity holders 2,844 1,445

Weighted average number of shares outstanding 4,313,042 3,711,649

Basic EPS (€) 0.66 0.39

Number of free shares issuable and exercisable - -

Number of common share warrants (‘BSAs’) converted

into shares 490,425 560,076

Diluted average number of shares 4,843,475 4,271,725

Diluted EPS (€) 0.59 0.34

Note 12 | Goodwill

In thousand euros 2014 Net value Acquisitions Changes in

scope Amortisation 2015 Net value

OCTO Technology (Maroc) - - 179 (30) 149

TOTAL - - 179 (30) 149

Considering that the Moroccan subsidiary goodwill was booked on July 2015, no impairment test was performed at the end of the

year.


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Note 13 | Intangible assets

� Gross value

In thousand euros 2014 Acquisitions Disposals Exchange

differences 2015

Start-up costs 1 1

Softwares, licences 690 276 (88) 877

Assets in progress 61 46 (100) 7

TOTAL 752 321 (188) - 885

The increase of the assets in progress correspond to the capitalized development costs of the elCurator product, marketed since

july 2015. The decrease of softwares and licences is due to scrapping.

� Amortisation

In thousand euros 2014 Charges Reversals Exchange

differences 2015

Start-up costs (1) (1)

Softwares, licences (509) (152) 88 (573)

TOTAL (510) (152) 88 - (574)

Note 14 | Tangible assets

Tangible assets mainly include fixtures, office furniture and computer hardware.

� Gross value


differences 2015

Tangible assets 1,812 412 (94) 1 2,131

Assets in progress - -

TOTAL 1,812 412 (94) 1 2,131

The decrease of tangible assets is due to scrapping.

� Amortisation

In thousand euros 2014 Charges Reversals Exchange

differences 2015

Tangible assets (1,055) (286) 92 (2) (1,251)

TOTAL (1,055) (286) 92 (2) (1,251)


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Note 15 | Financial assets


differences 2015

Loans - 364 (17) 347

Deposits and guarantees paid 229 17 (9) 237

TOTAL 229 381 (26) 584

Note 16 | Trade account receivables


Trade receivables clients 6,621 5,649

Clients – invoices to be issued 6,379 4,559

Depreciation of trade receivables (1) -

TOTAL 12,999 10,208

Note 17 | Other receivables

In thousand euros 2014 Variation Exchange

differences 2015

Advances and prepayments made 23 1 (6) 17

Employee-related receivables 25 4 2 31

Tax receivables 332 23 2 357

Income tax receivables 1,310 (361) (7) 942

Deferred tax assets 345 134 (17) 463

Capital called but not paid in - 19 - 19

Other receivables 9 (14) 7 2

Prepaid expenses 369 126 - 495

TOTAL 2,412 (68) (19) 2,326

Note 18 | Net cash position


differences 2015

Short-term investments 111 (4) (5) 101

Depreciation of short-term investments - -

Cash 5,130 7,639 17 12,785

Active cash-flow 5,241 7,635 11 12,887

Passive cash-flow - - - -

TOTAL 5,241 7,635 11 12,887


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Note 19 | Share capital

� Share capital structure

Number of shares Nominal value

Share capital as at 31 december 2014 3,727,952 0.1 €

Share capital increase:

- Capital increase with shareholders’ PSR 745,592 0.1 €

- Capital increase reserved to employees 69,912 0.1€

- Exercise of common share warrants (‘BSAs’) 69,651 0.1 €

Share capital as at 31 december 2015 4,613,107 0.1 €

Note 20 | Provisions

In thousand euros 2014 Charges Reversals 2015

Provision for contingencies 35 157 192

Provision for pension 306 31 336

TOTAL 341 188 - 528

The annual charges correspond mainly to employment-related litigations.

Note 21 | Trade account payables


Trade payables 1,280 677

Suppliers – unbilled payables 244 258

Attendance fees 19 19

TOTAL 1,543 953

Note 22 | Other payables


differences 2015

Clients creditors 239 (117) 122

Employee-related liabilities 4,709 2,229 (1) 6,937

Tax payables 2,583 652 8 3,241

Income tax payables 179 (70) (6) 103

Deferred tax liabilities - -

Other payables 22 33 55

Deferred income 990 784 1,774

TOTAL 8,723 3,509 (1) 12,231


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Note 23 | Auditors’ fees

JF Plantin Mazars Others*

Amount % Amount % Amount %

In thousand euros 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Audit

Statutory & consolidated

accounts

- Parent company 30 29 100% 100% - - - -

- Subsidiaries - - 14 13 100% 100% 14 9 100% 69%

Other services directly

related to audit

- Parent company - - - - - -

- Subsidiaries - - - - - 4

Subtotal Audit 30 29 100% 100% 14 13 100% 100% 14 13 100% 31%

Non audit services

Legal, tax and social - - - - - -

Subtotal Non Audit

TOTAL 30 29 100% 100% 14 13 100% 100% 14 13 100% 100%

* SAADA & DU REAU Associés, ACDEN

Note 24 | Off balance sheet commitments

Maturing

In thousand euros TOTAL Up to 1 year In thousand euros TOTAL

Commitments given

Rentals 727 727 - -

TOTAL 727 727 - -

Commitments received

Subleasing - - - -

TOTAL - - - -


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