ANNUAL FINANCIAL REPORT 2014

Transcription

1 A French société anonyme with share capital of 200, Registered office: 30 rue de la Victoire Paris Paris Trade and Companies Register No.: ANNUAL FINANCIAL REPORT 2014 (Article L of the AMF General Regulation) 1

2 SUMMARY DECLARATION OF THE RESPONSIBLE EXECUTIVES 4 Page PART 1 MANAGEMENT REPORT OF THE BOARD OF DIRECTORS 5 Situation of the Group during the financial year 5 Outlook and foreseeable business trends for the Group 8 Consolidated financial statements 9 Risk factors 15 Information relative to social, environmental and societal performance ( Grenelle II ) 15 Separate financial statements 16 Information on directors 19 Information on the Company s shares and shareholders 27 Subsidiaries and investments 35 Agreements referred to in Articles L et seq. of the French Commercial Code 37 Subsequent events 38 Financial results of the last five financial years 39 PART 2 CORPORATE GOVERNANCE 40 Chairman s report on the functioning of the Board of Directors and on internal 40 control procedures relating to the preparation and processing of accounting and financial information Statutory Auditors report prepared pursuant to Article L of the French 69 Commercial Code on the report of the Chairman of the Board of Directors of Viadeo SA in respect of the year ended 31 December

3 Page PART 3 CORPORATE SOCIAL RESPONSIBILITY 71 Report on the social, environmental and societal performance 71 (Annex of Part 1 relating to the management report of the Board of Directors) Report of the independent body on the social and environmental information 93 PART 4 FINANCIAL STATEMENTS 97 Consolidated financial statements (financial statements and notes) 97 Separate financial statements (financial statements and notes) 171 Table of Statutory Auditors fees 204 Statutory Auditors report on the consolidated financial statements 206 Statutory Auditors report on the annual financial statements 208 Statutory Auditors special report on regulated agreements and 211 commitments 3

4 DECLARATION OF THE RESPONSIBLE EXECUTIVES Persons responsible for the Annual Financial Report Mr Dan Serfaty, co-founder, Chairman and Chief Executive Officer of the Company; Mr Thierry Lunati, co-founder, Deputy Chief Executive Officer. DECLARATION OF THE PERSONS RESPONSIBLE FOR THE ANNUAL FINANCIAL REPORT We hereby certify that, to the best of our knowledge, the financial statements were prepared in accordance with applicable accounting standards and give a fair view of the assets, financial position and results of the Company and all consolidated companies, and that the attached management report provides a fair view of the business trends, earnings and financial situation of the Company and all consolidated companies, together with a description of the principal risks and uncertainties they face. Paris, 29 April 2015 Jean-Paul Alves Chief Financial Officer Dan Serfaty Chairman and CEO 4

5 PART 1 MANAGEMENT REPORT OF THE BOARD OF DIRECTORS To the shareholders, We are pleased to present the management report of the Board of Directors, pursuant to the provisions of Article L of the French Commercial Code. Your Board of Directors has called this general shareholders meeting to report to you on the activity of the Company and its subsidiaries during the year ended 31 December 2014, and to submit for your approval the consolidated and separate financial statements in respect of that year. The reports of the Statutory Auditors and the Board of Directors were made available to you within the legal timeframe. Your Board of Directors, at its meeting of 28 April 2015, examined and approved the consolidated and separate financial statements for the year ended 31 December The consolidated financial statements of the Viadeo Group have been prepared in accordance with IFRS. The Chairman of the Board of Directors also reports, in a report attached to this report (Part 2), on the composition of the Board, including the application of the principle of balanced representation of women and men, the conditions governing the preparation and organisation of the work of the Board and the internal control and risk management procedures implemented by the Company pursuant to Article L of the French Commercial Code. 1.1 Situation of the Group during the fiscal year ended Presentation of activities Viadeo allows professional users, by signing up to the website free of charge, to create a profile and develop a professional network. Although Viadeo has members across the world, the Group focuses its efforts in a number of key geographical regions, such as France and China, where it leads the market in terms of the number of registered members. It has adopted a differentiated strategy consisting of taking local characteristics into account (known as a multi-local strategy). Presence on a professional social network (PSN) such as Viadeo addresses multiple needs: - managing your career (promoting your visibility on the web to other members of the network and recruiters, and facilitating contact for employment applications or replies to job postings); - identifying new business opportunities (identifying companies and finding out who their decision-makers are); - maintaining a link with contacts in order to monitor their professional activity and have an accessible, up-to-date online address book. 5

6 PSNs also draw on a concept common to generalist social networks: the social graph. This enables links to be forged between members and allows those links to be used to access other contacts through recommendations, thus multiplying the possible interactions. From a business perspective, while they can be used for various means, their use is currently centred mainly on recruitment services. Viadeo allows client companies to rapidly identify professionals (either in or seeking employment) who meet their recruitment criteria and/or circulate job postings in order to contact them. Moreover, the accessible data is richer than the data shown on job boards (contacts network, detailed career history, skills, activity on the network, etc.). PSNs are also a shop window for these businesses, which can also use Viadeo to communicate about their products or company. The Group s activities are divided into three separate lines of revenue: online member subscriptions; the sale to companies of recruitment and training services; the sale of marketing and advertising services Highlights of the year 2014 was a pivotal year in Viadeo s development. IPO of the Company on the regulated market of Euronext Paris The Company s July 2014 IPO increased shareholders equity by a significant 32.7 million. This breaks down as a capital increase of 22 million and the conversion of convertible bonds, issued in early 2014, in the amount of 10.7 million. This transaction enjoyed support from major shareholders including Bpifrance Participations, Idinvest and Ventech, which marked their confidence in the Company s development plans by subscribing to the capital increase and converting their bonds into shares. Change in revenue from Corporate activities At the time of its IPO, the Group laid out its strategy of ramping up its activities for professionals, resulting in an increase of over 9% in Corporate revenue in 2014 (+ 1.2 million). These activities include the following business lines: - sale of recruitment and training services to companies; - sale of marketing and advertising services. Threshold crossed of 65 million members worldwide At the end December 2014, the Viadeo Group had over 65 million members worldwide, including nearly 10 million in France and more than 25 million in China. 6

7 2014 was a year of robust growth in terms of registered members, with between 400,000 and 600,000 new members per month on average over the period. The Group accordingly increased its membership base by more than 8.5 million in 2014, of which more than 1 million in France and 6.4 million in China. Success in the platform s technological developments Building on investments made in 2012 and 2013 to modernise the technology platform, the Group launched many new products in 2014 for members and customers of Corporate services, and in terms of Mobile applications. Mobile activity is growing rapidly in the field of recruitment and training services. A total of 20% of mobile users visit the Job & Career section, with more than 520,000 consultations of job offers giving rise to more than 25% of the applications received by Viadeo recruiters Human resources As of 31 December 2014, the Group s workforce totalled 299 people, compared with 447 at the end of Following the IPO, the headcount grew in the finance and HR departments in order to support business growth. By contrast, the workforce was reduced in technical functions following the completion of technical developments on the new Viadeo platform and the liquidation of the subsidiary Soocial BV (Netherlands). The closure of the Senegalese, Spanish, Italian and Mexican subsidiaries, and the mothballing of the Indian subsidiary resulted in the elimination of 68 jobs in marketing and sales functions in 2013 and

8 1.2 Outlook and foreseeable business trends for the Group Promising business momentum on the Corporate business lines in 2015 In view of the growth of the order book of over 20% in recruitment services and nearly 199% in marketing and advertising services in 2014, the Group is anticipating robust revenue on these business lines in Continued development in the Group s strategic geographical markets For 2015, the Group has confirmed the continuation of its multi-local strategy, in which its development is focused on France, China, Russia and the CIS (Commonwealth of Independent States) countries, and North and West Africa (mainly Morocco, Tunisia, Algeria and Senegal). In late 2014, it announced plans to continue its development and rapidly conquer a substantial membership base in order to cement its critical mass and increase the monetisation of its audience. This strategy will involve alliances, partnerships with local investors and any other transactions enabling the development of the business. In Russia, following the decision of our partner Sanoma to withdraw from the area, a change in the ownership of the share capital of our Russian subsidiary Viadeo Independent Media LLC ( VIM LLC ) is expected in the first half of On 3 April 2015, the Group, which aims to continue its development in Russia, signed a Share Purchase Agreement (SPA) on the 50% of our subsidiary Viadeo Independent Media BV ( VIM BV ) previously held by Independent Media Holding BV, with a view to selling the shares in turn to a Russian partner in order to maintain a local presence considered essential to the success of operations in this area. Pursuant to the SPA, the conditions precedent having been lifted, the transaction was completed on 24 April Lastly, in Africa, the Group s strong position in French-speaking countries will be maintained, with the possibility of making acquisitions or forging alliances as a means of obtaining local structures and imposing the Group as a leading operator in each country. Massive communication campaign in 2015 Following the investment phases resulting in the modernisation of the Group s technological platform, and in view of the new positioning around Corporate solutions, the Group launched a massive communication campaign in France in 2015 to reaffirm its leadership and its key status on all issues related to careers. Targeting all people on the job market, and using 360 media (digital, TV, press, billboards), communication will take the form of successive campaigns conducted throughout

9 1.3 Consolidated financial statements Revenue The consolidated revenue from operating activities of the Viadeo Group totalled 28.0 million in 2014, compared with million in the previous year, breaking down as follows: Online subscriptions Marketing and advertising Recruitment and training Other The revenue generated by the Viadeo platform (Viadeo geographical segment) mainly includes revenue generated in France and Africa. In 2014, these areas represented 96% of the Group s consolidated revenue from operating activities. The remainder was derived from the Tianji platform (China geographical segment). At the present time, the Group has not launched any monetisation activities among its members in the rest of the world. Revenue from Corporate activities increased by 9.1% in 2014 financial year. Revenue from recruitment and training services increased by 6.0% over the year ( 8,635 million in 2014, compared with 8,143 million in 2013). Revenue from marketing and advertising services grew by more than 14% to 5,373 million at 31 December 2014 (compared with 4,695 million in 2013). Breakdown of revenue from operating activities by business line (in thousands of euros) Change Recruitment/Training services 8,635 8, % Marketing/Advertising services 5,373 4, % Online subscriptions 13,497 15, % Revenue 27,505 28, % Other revenue 499 2, % Revenue from operating activities 28,004 30, % 9

10 Breakdown of revenue by quarter Revenue by quarter (in thousands of euros) Change Q1 6,751 7, % Q2 6,793 7, % Q3 6,315 6, % Q4 7,645 7, % Billings Commercial momentum in Recruitment and training services intensified in the middle of 2014, with billings up 5% over the year compared with 2013: (in thousands of euros) Change Billings for Recruitment and training services 9,138 8,728 +5% Order book by Corporate activity Recruitment and training services On this business line, the sustained growth of the order book (+20% over the year) should allow the confirmation of the positive momentum achieved in 2014 going forward. (in thousands of euros) 31/12/ /12/2013 Change Recruitment and training services 3,324 2, % Marketing and advertising services (in thousands of euros) 31/12/ /12/2013 Change Marketing and advertising services 1, % EBITDA In line with the strategy announced at the time of the IPO, consolidated EBITDA improved by 4.5 million in 2014, from a negative 7.8 million to a negative 3.2 million. The improvement was particularly pronounced in the Viadeo geographical segment (France, rest of Europe, USA and Morocco), where EBITDA rose by 3.7 million from a negative 1.95 million in 2013 to a positive 1.86 million in In the Tianji segment (China), still in the investment phase, EBITDA was a negative 5.01 million at end- 2014, compared with a negative 5.9 million in

11 The positive trend in EBITDA is attributable in large part to a decline in personnel expenses and other external expenses. Personnel expenses fell sharply in the Viadeo and Tianji (China) segments alike, from 22.9 million in 2013 to 17.7 million in 2014 (see 1.1.3). The reduction in other external expenses ( 8.4 million in 2014, compared with 10.9 million in 2013) is attributable to a fall in costs relating to IT services, impacting the income statement by negative 1.8 million, as well as lower rental expenses following the liquidation of certain subsidiaries at the end of 2013 and the renegotiation of rent for the premises occupied by Tianji and APVO (- 0.5 million) Share-based payments The IFRS 2 expense totalled 1.3 million in 2014, an increase of 0.3 million compared with The increase breaks down as: - an increase of 0.2 million relative to the BCE 3a plan, the expiry date of which was extended in 2014 to 31 December 2019; - a reduction of 0.1 million relating to the BCE 4 plan, the vesting of which was completed in April 2014; - an increase of 0.2 million relating to the BCE 5 plan, awarded in June The benefit recognised in 2013 was pro rated, contrary to that recognised in Operating income The Group s operating income accordingly improved from a loss of 14.1 million to a loss of 10.1 million, an improvement of 4 million Net financial income/(expense) In 2014, net financial income/(expense) was a loss of 2.2 million, compared with a loss of 0.2 million in the previous year. The variation of 2.0 million is attributable to the cost of converting bonds in June 2014 (non-recurring expense of 3.1 million) and financial income resulting from significant fluctuations of the euro-dollar exchange rate in the accounts of Californian subsidiary APVO. 11

12 1.3.6 Net profit/(loss) Thanks to the 4.0 million improvement in operating income, and despite a non-recurring financial expense of 3.1 million, the net profit/(loss) from continuing operations for the year for the Group was stable at a loss of 13.5 million in 2014, compared with a loss of 13.1 million in Note the reversal of a provision for deferred tax in the amount of 0.8 million in the year ended 31 December 2014, in view of the profit generated by US subsidiary APVO for the year Information on the consolidated balance sheet data Non-current assets As of 31 December 2014, the Group s non-current assets amounted to 24.9 million, compared with 23.3 million as of 31 December They mainly comprise: goodwill ( 5.8 million as of 31 December 2014, compared with 5.2 million as of 31 December 2013); intangible assets ( 10.0 million as of 31 December 2014, compared with 7.8 million as of 31 December 2013); property, plant and equipment ( 0.8 million as of 31 December 2014, compared with 1.3 million as of 31 December 2013); other non-current financial assets ( 1.4 million as of 31 December 2014, compared with 1.8 million as of 31 December 2013); non-current tax receivables ( 1.6 million as of 31 December 2014, stable compared with 31 December 2013); deferred tax assets ( 5.1 million as of 31 December 2014, compared with 5.3 million as of 31 December 2013). The change in intangible assets during the year was characterised mainly by the capitalisation of the development costs of professional networking platforms in the amount of 4.9 million, largely offset by depreciation and amortisation of 4.3 million over the period. The Group did not recognise deferred tax assets in respect of losses generated in France or China. As regards the APVO subsidiary (USA), the amount of deferred tax assets recognised as of 31 December 2014 was 2.6 million. This is justified by the taxable profits anticipated in the coming three fiscal years. Current assets As of 31 December 2014, the Group s current assets amounted to 31.5 million, compared with 11.3 million as of 31 December They mainly comprise: trade receivables ( 6.3 million as of 31 December 2014, compared with 6.2 million as of 31 December 2013); 12

13 other current receivables ( 0.8 million as of 31 December 2014, compared with 0.6 million as of 31 December 2013); cash and cash equivalents ( 24.4 million, compared with 4.5 million as of 31 December 2013). The change in cash and cash equivalents during the year represents an increase of 19.9 million. Consolidated shareholder s equity As of 31 December 2014, consolidated shareholders equity amounted to 32.0 million, compared with 10.5 million as of 31 December The change in shareholders equity during the period was attributable mainly to: the consolidated loss of 13.5 million for the year; translation differences relating to foreign subsidiaries in the amount of 1.5 million; the cash capital increase in the amount of 18.9 million; the capital increase by conversion of convertible bonds in the amount of 13.7 million; the consideration for the expense related to share-based payments in the amount of 1.3 million. Non-current liabilities As of 31 December 2014, the Group s non-current liabilities amounted to 1.9 million, compared with 2.5 million as of 31 December They mainly consist of loans ( 0.9 million as of 31 December 2014, compared with 1.1 million as of 31 December 2013), provisions ( 0.2 million as of 31 December 2014, compared with 0.3 million as of 31 December 2013) and deferred income to be recognised in more than one year ( 0.9 million as of 31 December 2014, compared with 0.8 million as of 31 December 2013). Current liabilities Current liabilities amounted to 22.5 million as of 31 December 2014, compared with 21.6 million as of 31 December They comprise: - trade payables ( 12.4 million as of 31 December 2014, compared with 10.2 million as of 31 December 2013); - borrowings with maturities of less than one year ( 0.8 million as of 31 December 2014, compared with 2.5 million as of 31 December 2013); - other current provisions ( 0.9 million as of 31 December 2014, compared with 0.7 million as of 31 December 2013); 13

14 - other current liabilities ( 8.5 million as of 31 December 2014, compared with 8.1 million as of 31 December 2013). These items are mainly deferred income in the amount of 8.3 million as of 31 December 2014, compared with 7.9 million as of 31 December Off-balance sheet commitments Lease obligations on buildings The Company occupies its headquarters in France under a commercial lease. Future rent and expenses until the end of the next three-year lease period break down as follows as of 31 December 2014: less than one year: 1.0 million; more than one year and less than five years: 1.2 million. Rent recognised as an expense during the year ended 31 December 2014 amounted to 1.0 million. The Group has pledged investment securities in the amount of 0.5 million as security for the commercial lease. The investments in question are presented under non-current financial assets. The Group has signed two property leases for a term of three full consecutive years for its business in China (Tianji). Rents for the year amounted to 0.5 million, and future expenses within one year to 0.4 million. Lastly, the Group has signed a lease for its premises in the United States, for which the commitment in respect of future expenses is not material. Pledges and other collateral The Viadeo Group has pledged its business goodwill as collateral for the repayment of a bank loan in the amount of 0.2 million in the consolidated balance sheet. As of 31 December 2014, the Viadeo Group was in compliance with all banking covenants relating to this loan Research and development activity After a year devoted almost exclusively to the development and implementation of the new platform in 2013, the research and development activity turned its focus in 2014 to the launch of new products ( Let s meet and Face to Face, among others). Also noteworthy was the overhaul of the Dashboard, the Company pages and the Employment space on Mobile applications. At Tianji, R&D activity was focused on the development of a new mobile application. 14

15 1.4 Description of the principal risks and uncertainties faced by the Group The risks to which the Group is exposed are described in the document de base dated end-may The types of risk and their nature had not changed as of the time of writing of this report, with the exception of liquidity risk, which has been extended to the medium term by virtue of the funds raised by the Group during its IPO on the regulated market of Euronext Paris on 2 July There are no governmental, legal or arbitration proceedings, including any proceedings which the Company is aware of, which are left unresolved or pending, and which are liable to have, or have had a significant impact on the Group s financial position and profitability during the last 12 months. 1.5 Information relative to social, environmental and societal performance ( Grenelle II ) French Law No of 12 July 2010, known as Grenelle II, and its implementing decree published on 24 April 2012 amending Article L of the French Commercial Code set out the mandatory information to be included in the annual management report and introduce the obligation of having the social, environmental and societal information contained therein verified by an independent third party. In respect of 2014, and pursuant to the decision of the French Accreditation Committee (COFRAC) to prohibit the involvement of a panel of Statutory Auditors in the performance of the assignment of the independent third party, Grant Thornton was the sole auditor appointed by the Company to proceed with the verification of this information. To facilitate its reading, social, environmental and societal information is the subject of a dedicated report (part 3) appended to this management report, of which it is an integral part. 15

16 1.6 Separate financial statements Summary of the trading environment and significant events in 2014 The highlights for the Company and the Group are presented in section 1.1 above. The financial statements of the parent company Viadeo SA are an integral part of this report. The accounting policies are identical to those used during the previous year. A reminder of the financial statements for the previous year is provided for comparison purposes. During the year ended 31 December 2014, revenue amounted to 22,984,631, compared with 28,310,122 in the previous year. External expenses amounted to 9,292,442, compared with 11,321,787 in the previous year. Wages and salaries amounted to 11,527,619, compared with 13,327,917 in the previous year. Payroll charges amounted to 5,114,748, compared with 5,977,665 in the previous year. Taxes and similar charges amounted to 601,625 euros, compared with 727,142 in the previous year. Depreciation and amortisation expense amounted to 1,376,744, compared with 1,647,773 in the previous year. The year-end workforce was 188, compared with 222 at the end of the previous year. Operating expenses amounted to 27,955,027, compared with 33,041,448 in the previous year. Operating income was a loss of 3,619,268, compared with a loss of 3,755,374 in the previous year. The recurring profit/(loss) before tax, taking into account financial losses totalling 2,657,719, was a loss of 961,548, compared with a loss of 6,002,611 in the previous year. Exceptional income/(expense) for the year was an expense of 3,073,482, compared with an expense of 208,569 in the previous year. After taking into account a corporate tax credit of 535,527, the result for the year ended 31 December 2014 was a loss of 3,484,834, compared with a loss of 5,424,965 in the previous year. Liabilities recorded as of 31 December 2014, with the comparison with the end of 2013, are summarised in the following table: 16

17 Item (in thousands of euros) 31/12/ /12/2013 Trade and other payables 4,101 2,836 Tax and social security liabilities. Personnel 1,148 1,075. Social security bodies 1,442 1,624. State, income taxes. State, taxes on revenue State guaranteed bonds. Other taxes, duties and similar Liabilities on fixed assets and related accounts Other liabilities 1,980 2,598 Deferred income 3,652 2,409 Total 13,617 11, Annual Financial Report Expenses not deductible for tax purposes Pursuant to Article 223 (c) of the French Tax Code, please note that the financial statements for the past fiscal year do not take into account expenses that are not deductible for income tax purposes under Article 39-4 of the aforementioned Code. Table of results for the last five financial years Pursuant to Article R the French Commercial Code, the summary table of results for the last five years is included in section 1.12 of this report. Proposed appropriation of net income We ask you to approve the annual financial statements (balance sheet, income statement and notes) as presented, showing a loss of 3,484,834, which we propose to carry forward in full, bringing retained losses account to a total of 3,484,834. The Company s shareholders equity accordingly amounted to 61,135,545 as of 31 December Payment of dividends To comply with the provisions of Article 243 (a) of the French Tax Code, we inform you that no dividends have been paid in any of the last three fiscal years. Supplier payment terms Pursuant to Article L of the French Commercial Code, introduced by Law No on the modernisation of the economy and its implementing decree, companies must, from the year beginning 1 January 2009, disclose payment terms for their suppliers. The table below gives details of the amount of trade payables as of 31 December 2014 and 31 December 2013 by maturity: 17

18 Trade and other payables 31/12/ /12/2013 In thousands of euros Less than or equal to 30 days 1,514 1,036 Between 30 and 60 days Over 60 days(1)

19 1.7 Information on directors Composition of the Board of Directors As of the date of the financial statements, the Company s Board of Directors was comprised of eight directors and two observers. Dan Serfaty, Chairman of the Board of Directors and CEO, and Thierry Lunati, Deputy CEO, fulfil the functions of executive directors. The membership of the Board of Directors is set out in Part 2 (section 2.1 Corporate governance) of this document Other corporate offices Please refer to Part 2 (section 2.1 Corporate governance) of this document Compensation of the members of the Board of Directors Amount of attendance fees In accordance with the law, the amount of annual attendance fees payable to directors is set by the general shareholders meeting. The combined shareholders meeting of 21 May 2014 decided to set the amount of attendance fees allocated to members of the Board of Directors in respect of 2014 and for each subsequent year at 50,000, until decided otherwise by the ordinary shareholders meeting. By decision of the Board of Directors on 10 February 2015, it was decided not to pay attendance fees in respect of the year ended 31 December Compensation and benefits of any kind awarded non-executive directors of Viadeo Please be informed that no compensation or benefits in kind were paid by the Company or companies of the Group to any of the non-executive directors during the 2013 and 2014 financial years Compensation of directors Pursuant to Article L of the French Commercial Code, we hereby report on the total compensation and benefits in kind paid to each director during the past year, both by the company and by the companies controlled by the Company within the meaning of Article L of the French Commercial Code. The information below is established by reference to the Corporate Governance Code for Small and Midcaps, as published in December 2009 by MiddleNext and validated as a code of reference by the 19

20 French Financial Markets Authority (Autorité des Marchés Financiers AMF) (the MiddleNext Code ). This code is available on the MiddleNext website ( The total compensation paid in 2014 financial year by Viadeo SA and the companies it controls to each of the directors of Viadeo SA is presented in the tables below: Table 1 Summary of compensation and founders warrants (BSPC) awarded to each executive director (in thousands of euros) Name FY 2014 FY 2013 Dan Serfaty Chairman and Chief Executive Officer Compensation due in respect of the fiscal year (see Table 2) Value of multi-year variable compensation awarded during the financial year - - Value of founders warrants (BSPCE) allocated during the financial year - - Value of free shares allocated during the financial year - - TOTAL Thierry Lunati Deputy Chief Executive Officer Compensation due in respect of the fiscal year (see Table 2) Value of multi-year variable compensation awarded during the financial year - - Value of founders warrants (BSPCE) allocated during the fiscal year - - Value of free shares allocated during the financial year - - TOTAL TOTAL The Board of Directors, at its meeting of 25 February 2014, appointed Dan Serfaty as Chairman and CEO and Thierry Lunati as Deputy CEO, whereas prior to that date, Mr Lunati had been Chairman and CEO and Mr Serfaty had been Deputy CEO. 20

21 Table 2 Summary of compensation of each director (in thousands of euros) FY 2014 FY 2013 Name Amounts due in respect of 2014 Amounts paid in respect of 2014 Amounts due in respect of 2013 Amounts paid in respect of 2013 Dan Serfaty Chairman and Chief Executive Officer Annual fixed compensation(1) Variable annual compensation Multi-year variable compensation Exceptional compensation(3) (fully reinvested in Viadeo SA securities) Attendance fees Benefits in kind TOTAL Thierry Lunati Deputy Chief Executive Officer Annual fixed compensation(2) Variable annual compensation Multi-year variable compensation Exceptional compensation(3) (fully reinvested in Viadeo SA securities) Attendance fees Benefits in kind TOTAL TOTAL DIRECTORS (1) The Board of Directors, on the recommendation of the Appointment and Compensation Committee dated 27 August 2014, decided to set the gross annual fixed component of the compensation of Dan Serfaty from 1 September 2014 at 96,000 in his capacity as Chairman and CEO of Viadeo SA and 250,000 in his capacity as General Manager of Tianji Boren Technology Ltd (Beijing). In addition to each of these components of fixed compensation, Mr Serfaty is eligible for a variable portion in a maximum amount of 25,000, awarded in respect of targets related to the activity of the respective companies, as set by the Appointment and Compensation Committee. (2) Regarding Thierry Lunati, and on the recommendation of the Appointment and Compensation Committee dated 17 September 2014, the Board of Directors decided to set the gross annual fixed component of compensation from 1 September 2014 at 96,000 in his capacity as Deputy CEO of Viadeo SA and 250,000 in his capacity as Director of APVO Corp (San Francisco). In 21

22 addition to each of these components of fixed compensation, Mr Lunati is eligible for a variable portion in a maximum amount of 25,000, awarded in respect of targets related to the activity of the respective companies, as set by the Appointment and Compensation Committee. (3) As announced in the document de base filed with the AMF in May 2014, the Board of Directors, at its meeting of 26 May 2014, unanimously decided to grant the Chairman and CEO and Deputy CEO special bonuses of a maximum of 100,000 following the Company s IPO. The amount paid to each director was fully reinvested in Viadeo securities on the day of the IPO, i.e. 4 July 2014, at a unit price of per share. These amounts are in addition to the fees levied by KDS Associés SARL and Kadomi SARL, of which Dan Serfaty and Thierry Lunati are co-manager and manager respectively. In 2014 financial year, KDS Associés SARL received payment in respect of services provided by Dan Serfaty and invoiced under the agreement between the company and KDS Associés for the provision of technical assistance services. The conclusion of this agreement was approved by the general shareholders meeting of 26 June 2007, and is described in the special report of the Statutory Auditors. The amount of the fees invoiced was 67,000 for 2013 and 164,500 for During the same year, Kadomi SARL invoiced fees for services provided by Thierry Lunati and performed under the assistance agreement for the technical and functional development of the Viadeo.com website. The conclusion of the contract was also approved by the general shareholders meeting of 26 June 2007, and is also described in the special report of the Statutory Auditors. The amount of fees invoiced was 322,000 for 2013 and 164,500 for Table 3 Table of attendance fees and other compensation received by non-executive directors (mandataires sociaux non dirigeants) None Table 4 Stock options granted to each executive director (dirigeant mandataire social) by the Company or any company within the Group during the financial years ended 31 December 2013 and 2014 None Table 5 Stock options exercised by each executive director (dirigeant mandataire social) during the financial year None Table 6 Free shares granted to each executive director (dirigeant mandataire social) during the financial years ended 31 December 2013 and 2014 None Table 7 Free shares granted that became available for each executive director (dirigeant mandataire social) during the financial years ended 31 December 2013 and 2014 None 22

23 Table 8 History of stock options granted to executive directors Summary table of founders warrants (BCE) granted during the period and in previous periods: Creation BCE 01 BCE 02 BCE 03 BCE 04 BCE 05 EGM 27/08/2007 EGM 27/08/2007 EGM 06/07/2009 EGM 30/06/2010 EGM 29/06/2012 Original maturity 31/08/ /12/ /12/ /12/ /09/ /06/ /12/2023 Modified maturity Extension of the maturity to 31/08/2017 following the decision of the EGM of 29/06/2012 Extension of the maturity to 31/12/2017 following the decision of the EGM of 29/06/ Number granted (1) 28,466 7,846 8,245 9,180 15,000 Number granted (2) 711, , , , ,000 Features (1) Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Features (2) Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Conditions of exercise Present as employee or corporate officer Present as employee or corporate officer Present as employee or corporate officer Present as employee or corporate officer Present as employee or corporate officer 23

24 Vesting period Exercisable immediately BCE 02 warrants may be exercised by their holders in the proportion of (i) one-third of the number subscribed from the date of the third anniversary of the holder s employment contract, another third from the date of the fourth anniversary of the holder s employment contract, and the final third from the fifth anniversary of the holder s employment contract until 31 December 2017, and (ii) on the condition that the beneficiary is still employed by the Company at the exercise date. BCE 03 warrants may be exercised by their holders in the proportion of (i) one-third of the number subscribed from the date of the third anniversary of the holder s employment contract, another third from the date of the fourth anniversary of the holder s employment contract, and the final third from the fifth anniversary of the holder s employment contract until 31 December 2014, and (ii) on the condition that the beneficiary is still employed by the Company at the exercise date BCE 04 warrants may be exercised by their holders in the proportion of (i) one-third of the number subscribed from the date of the first anniversary of the subscription, another third from the date of the second anniversary of the subscription, and the final third from the third anniversary of the subscription until 31 December 2017, and (ii) on the condition that the beneficiary is still an employee or director of the Company at the exercise date BCE 05 warrants may be exercised by the beneficiary in the proportion of: - one-third from the first anniversary of the grant, - one-third from the second anniversary of the grant, one-third from the third anniversary of the award, and (ii) on the condition that the beneficiary is still an employee or director of the Company at the exercise date. Beneficiaries Management Management/Employees Management/Employees Management/Employees Management/Employees (1) The figures shown do not take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May (2) The figures shown take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May Option series Number of options granted (1) Number of options granted (2) Grant date Expiry date Exercise price (1) Exercise price (2) Fair value at grant date (1) Charge in 2012 financial year in k Charge in 2013 financial year in k Charge in 2014 financial year in k BCE 01 * 28, ,650 27/08/ /08/ BCE 02 * 7, ,150 BCE 03 8, ,125 06/12/ /02/ /02/ /09/ /03/ /12/ /12/ BCE 04 9, ,500 05/07/ /10/ /12/ /12/ /12/ BCE 05 15, ,000 10/09/ /09/ ,074 Total 68,737 1,718, ,270 * The expiry dates of BCE 01 and BCE 02 were extended by the extraordinary general shareholders meeting of 29/06/2012. The fair value of the options indicated in the above table corresponds to that of the extended options (on the date the plans were changed). (1) The figures shown do not take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May (2) The figures shown take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May

25 Extending the vesting period of the BCE 01 and BCE 02 plans increases their fair value measured immediately before and after the change. In accordance with IFRS 2, the Group included the incremental fair value granted in the measurement of the amount recognised for services received in exchange for the equity instruments. The incremental fair value granted is the difference between the fair value of the modified equity instrument and the fair value of the original equity instrument, both measured at the date of the change. Expenses related to BCE 01 and BCE 02 in the 2012 financial year correspond to the incremental fair value of these two options recognised fully and immediately in profit or loss. Change in options in 2014 BCE 01 BCE 02 BCE 03 BCE 04 BCE 05 Warrants outstanding as of 1 January 2014 Warrants granted during the year Cancelled or lapsed warrants Exercised warrants 711, ,000 (1,125) (7,428) 155, , ,000 (27,875) (13,140) (33,418) (4,338) (42,250) Warrants outstanding as of 31 December ,650 93, ,610 87, ,750 Table 9 Stock options granted to the ten non-director employees (salariés non mandataires sociaux) who received the largest number of options and options exercised by those employees Weighted average price 2014 Number of entitlements granted to the 10 nondirector group employees whose number of entitlements granted is the highest (total number) - None Number of entitlements exercised/acquired/waived by the 10 nondirector group employees whose number of entitlements is the highest (total number) ,678 BCE 02, 11,515 BCE 03 and 1,006 BCE 04 granting entitlement to subscribe for 19,199 shares Table 10 History of free share allocations Not applicable 25

26 Table 11 Conditions for compensation and other benefits granted to executive directors (dirigeants mandataires sociaux) Executive directors (dirigeants mandataires sociaux) Employment contract Supplementary pension scheme Compensation or benefit due or liable to be due in respect of a termination or change of position Compensation relating to a noncompetition clause YES NO YES NO YES NO YES NO Dan Serfaty (1) Chairman and Chief Executive Officer X X X X (2) Date term of office started First appointed: 22 June 2006 Last renewed: 28 February 2011 Date term of office ends At the close of the general shareholders meeting held to approve the financial statements for the year ending 31 December 2016 Thierry Lunati (1) Deputy Chief Executive Officer X X X X (2) Date term of office started First appointed: 22 June 2006 Last renewed: 28 February 2011 Date term of office ends At the close of the general shareholders meeting held to approve the financial statements for the year ending 31 December 2016 The Board of Directors has authorised the combination of employment contracts in the Company s subsidiaries with a director position in the Company for Dan Serfaty, Chairman and Chief Executive Officer, and Thierry Lunati, Deputy Chief Executive Officer. (1) The Board of Directors meeting of 25 February 2014 appointed Mr Dan Serfaty as Chairman and Chief Executive Officer and Mr Thierry Lunati as Deputy Chief Executive Officer. Until that date, Mr Lunati was Chairman and Chief Executive Officer and Mr Serfaty was Deputy Chief Executive Officer. The date first appointed given in the table is the date of initial appointment to their previous respective positions, it being specified that the duration of their respective terms of office as Company director has not been amended. (2) Undertaking not to compete incumbent on Dan Serfaty and Thierry Lunati for a period of 12 months following the termination of their respective duties as General Manager of Tianji 26

27 Boren Technology Ltd (Beijing) and Director of APVO Corporation (San Francisco), equivalent to the amount of their fixed annual compensation. 1.8 Information on the Company s shares and shareholders For more information on the share capital of Viadeo SA, see Note 11 to the consolidated financial statements Composition of share capital Share capital amounts to 200,563. It is divided into 10,028,159 shares fully subscribed and paid up, with a par value of This excludes unexercised stock warrants and share options granted to certain investors and certain individuals who may or may not be Company employees. Statement of changes in share capital: Number In euros of shares Situation as of 1 January , , Exercise of founders warrants (BSPCE) Exercise of share warrants (BSA) Situation as of 31 December , Exercise of founders warrants (BSPCE) 24, Exercise of share warrants (BSA) 0 Increase in the par value of shares 47, for-1 stock split 7,568,472 Conversion of convertible bonds 831,691 16,634 IPO 1,287,737 25,755 Situation as of 31 December ,028, ,563 As of 31 December 2014 the number of Viadeo SA shares held in treasury was: - 25,619 shares acquired under the liquidity contract; - 107,421 shares held following the liquidation of CBC. The voting rights of each shareholder are equal to the number of shares held by each of them. Double voting rights have not been authorised. 27

28 1.8.2 Major shareholders The table below provides the list of shareholders owning more than 10% of the share capital and voting rights. Name of shareholder Number of shares held Percentage of share capital/ Voting rights Idinvest Partners 1,372, % AV3 1,330, % CBC 1,124, % Ventech Capital 3 1,114, % Shares in CBC were classified as available-for-sale assets held by Viadeo SA in In 2014, they were offset by shareholders equity Threshold crossing No threshold crossing was brought to the attention of the Company during 2014 financial year Delegation of authority and powers granted by the general shareholders meeting to the Board of Directors and still valid Issue resolutions adopted by the combined shareholders meeting of 21 May 2014, ruling on an extraordinary basis, are summarised below: Period of validity/ Expiry Ceiling Price calculation procedures Delegation of authority granted to the Board with a view to increasing the capital through the issue of ordinary shares or any securities giving immediate or future access to share capital with preferential subscription rights* Delegation of authority granted to the Board with a view to increasing the capital through the issue of ordinary shares or any securities giving access to share capital with removal of preferential subscription rights and public offering as well as with the option to introduce preferential rights 26 months 140,000(1) 26 months 140,000(1) N/A Please refer to (2) Delegation of authority granted to the Board with a view to increasing the capital through the issue of ordinary shares or any securities giving access to share capital with removal of preferential subscription rights, to eligible investors or to a limited circle of investors* 26 months 140,000(1) no more than 20% of share capital per 12-month period Please refer to (3) Authorisation given to the Board, in the event of the issue of shares or 26 months no more than 10% Please refer to 28

29 Period of validity/ Expiry Ceiling Price calculation procedures any securities giving access to share capital with removal of shareholders preferential subscription rights, to set the issue price at no more than 10% of the share capital and within the limits set by the general shareholders meeting* of the share capital (4) Delegation of authority granted to the Board with a view to increasing the number of securities to be issued in the event of a capital increase with, or without preferential subscription rights, decided by virtue of previous delegations of power 26 months no more than 15% of the initial issue(1)(5) Same price as the initial issue Delegation of authority to the Board with a view to issuing ordinary shares or securities giving access to the Company s share capital, in the event of a public offering involving an exchange component, initiated by the Company* 26 months 140,000(1) Delegation of power granted to the Board for the purpose of increasing the capital in compensation for contributions in kind involving equity securities or securities giving access to the share capital of third-party companies outside of a public exchange offer* 26 months 140,000, no more than 10% of the existing share capital on the date of the transaction under consideration(1) Delegation of authority granted to the Board with a view to increasing the capital through the incorporation of premiums, reserves, profits or other items, the issue and allocation of bonus shares or by raising the par value of existing shares or by combining these two procedures* 26 months 400,000 Authorisation granted to the Board with a view to granting stock options for the subscription or purchase of shares 38 months 1,000,000 shares (6) Please refer to (7) Authorisation granted to the Board with a view to granting existing or new bonus shares 38 months 1,000,000 shares and no more than 10% of the share capital (6) Delegation of authority to be granted to the Board for the purposes of issuing bonus founders warrants [BSPCE] to the Company s employees and executives Delegation of authority to be granted to the Board of Directors for the purpose of issuing and allocating warrants to (i) observers and members of the Company s Board of Directors in office on the allocation date of the warrants, who are not employees or executives of the Company or any of its subsidiaries or (ii) persons connected by a services or consulting contract to the Company or any of its subsidiaries or (iii) members of any committee liable to be established by the Board of Directors, who are not employees or executives of the Company or any of its subsidiaries 18 months 18 months 1,000,000 ordinary Please refer to shares(6) (8) 1,000,000 ordinary Please refer to shares(6) (9) 29

30 Period of validity/ Expiry Ceiling Price calculation procedures Authorisation granted to the Board with a view to the company buying back its own shares* 18 months 10% of the share capital 10% of the share capital Authorisation granted to the Board with a view to reducing the share capital by cancelling shares within the context of the authorisation to buy back treasury shares* * Subject to the non-retroactive condition precedent of completion of the IPO. 18 months 10% of the share capital per 24- month period 10% of the share capital per 24-month period (1) These amounts are not cumulative. The maximum overall ceiling authorised by the shareholders meeting for share capital increases at par value is set at 140,000. (2) The issue price will be calculated as follows: as regards the capital increase to be completed upon the admission to trading and initial listing of the Company s shares on the regulated market of Euronext in Paris, the subscription price of one new share will be calculated by matching the shares offered with subscription orders placed by investors using the bookbuilding technique ; subsequent to the admission to trading and the first listing of the Company s shares on the regulated market of Euronext in Paris, the issue price will be at least equal to the weighted average share price on the three trading days prior to the setting of said issue price less, where appropriate, the legally authorised discount (currently 5%) corrected in the case of any difference in the possession date (date de jouissance), provided that the issue price of the securities giving access to share capital will be such that the amount immediately received by the Company plus, where appropriate, the amount likely to be received by it at a later date, for each share issued as a result of the issue of such securities, will be at least equal to the issue price defined above. (3) The issue price will be at least equal to the weighted average share price on the three trading days prior to the setting of said issue price less, where appropriate, the legally authorised discount (currently 5%) corrected in the case of any difference in the possession date (date de jouissance), provided that the issue price of securities giving access to share capital will be such that the amount immediately received by the Company plus, where appropriate, the amount likely to be received by it at a later date, for each share issued as a result of the issue of such securities, will be at least equal to the issue price defined above. (4) Up to the limit of 10% of the share capital of the Company (as of the date of the transaction) per 12-month period, the Board of Directors may deviate from the price-setting conditions provided 30

31 for by the aforementioned resolutions and set the issue price of the ordinary shares and/or the securities giving immediate or future access to the share capital, as follows: the issue price of the ordinary shares will be at least equal to the weighted average share price on the five trading sessions prior to the setting of said issue price, less a maximum 15% discount, if applicable, provided that this may, under no circumstances, be less than the par value of one share of the Company on the issue date of the shares in question; the issue price of securities giving access to capital will be such that the amount immediately received by the Company plus, if applicable, the amount likely to be received by it at a later date, for each share issued as a result of the issue of such securities, will be at least equal to the issue price defined in the paragraph above. (5) 15% or any other percentage that may have been set by applicable regulations. (6) These amounts are not cumulative. The maximum overall ceiling authorised by the shareholders meeting for issues of securities giving access to share capital is set at 1,000,000 shares. (7) The purchase or subscription price per share will be set by the Board of Directors on the date on which the option is granted, as follows: (i) as long as the shares have not been admitted for trading on a regulated market in the European Union or on a stock exchange in Switzerland, or on the Nasdaq National Market or the New York Stock Exchange in the US, the subscription or purchase price will be calculated in accordance with Article L of the French Commercial Code and shall be at least equal to the price per share used for the Company s last capital transaction, unless the Board has taken a duly substantiated decision to the contrary; (ii) should the Company s shares be admitted for trading on a regulated market in the European Union or on a stock exchange in Switzerland, or on the Nasdaq National Market or the New York Stock Exchange in the US, the Board may set the purchase or subscription price in reference to the sale price of one share at closing on the regulated market the day before the Board s decision to grant the Options. The purchase or subscription price may not, however, under any circumstances be less than ninety five percent (95%) of the average share price on the 20 trading sessions preceding the date on which the Board took the decision to grant the options; provided that when an option enables its beneficiary to purchase shares previously purchased by the Company, its exercise price, without prejudice to the above clauses and in accordance with applicable legal provisions, may also not be less than 80% of the average price paid by the Company for all the shares previously purchased by it. (8) When a BSPCE is exercised, the share subscription price will have been set by the Board on the BSPCE grant date as follows: 31

32 (i) (ii) until the Company s shares are admitted to any stock market or exchange, each founders warrant (BSPCE) will allow for the subscription of one ordinary share with a par value of 0.02 at an exercise price set by the Board on the allocation date of the BSPCE, as follows: o if a capital increase took place during the period of validity of this authorisation, through the issue of ordinary shares, the exercise price will, for a six-month period from the date of said capital increase, be at least equal to the subscription price of one ordinary Company share under said capital increase, o if no ordinary shares are issued during the six-month period preceding the allocation of the BSPCE but a capital increase takes place less than six months prior to the allocation of the BSPCE through the issue of preferred shares or securities giving future access to a percentage of share capital, the Board will calculate and set the exercise price by taking into consideration the rights conferred by equity securities or securities thus issued compared with the rights conferred by ordinary shares, o if no ordinary shares, preference shares or securities giving future access to a percentage of share capital are issued within the six months prior to the BSPCE grants, the exercise price will be set, mutatis mutandis, in accordance with Article L of the French Commercial Code, taking into account the price per share used for the Company s last capital transaction, unless the Board has taken a duly substantiated decision to the contrary, it being specified that, when calculating the exercise price, the Board will not take into account the capital increases resulting from the exercise of warrants, stock options or free share allocations; when the Company s shares are admitted to trading on a stock market or exchange, the exercise price, to be set by the Board when the BSPCE are granted, shall be at least equal to the weighted average share price of the last 20 trading sessions prior to the date on which said BSPCE are granted by the Board. (9) The exercise price of warrants (BSA) will be set by the Board on their allocation date, as follows: (i) until the shares are admitted to trading on any stock market or exchange, each BSA will allow for the subscription of one ordinary share with a par value of 0.02 at an exercise price set by the Board on the allocation date of the BSA, as follows: (a) if a capital increase took place during the period of validity of this authorisation, through the issue of ordinary shares, the Exercise Price will, for a six-month period from the date of said capital increase, be no less than the subscription price of one ordinary Company share under said capital increase, (b) if no ordinary shares are issued during the six-month period preceding the allocation of the BSA but a capital increase takes place less than six months prior to the allocation of the BSA through the issue of preferred shares or securities giving future access to a percentage of share capital, the Board will calculate and set the exercise price by taking into consideration the rights conferred by equity securities or securities thus issued 32

33 compared with the rights conferred by ordinary shares, 2014 Annual Financial Report (c) if no ordinary shares, preference shares or securities giving future access to a percentage of share capital are issued within the six months prior to the BSA grants, the exercise price will be set, mutatis mutandis, in accordance with article L of the French Commercial Code, taking into account the price per share used for the Company s last capital transaction, unless the Board has taken a duly substantiated decision to the contrary, it being specified that, when calculating the exercise price, the Board of Directors will not take into account the capital increases resulting from the exercise of warrants, stock options or free share allocations; (ii) as long as the Company s shares will be admitted to trading on a stock market or exchange, the exercise price, to be set by the Board when the BSA are granted, shall be at least equal to the weighted average share price on the last 20 trading sessions prior to the date on which said BSA were granted by the Board Employee shareholdings For the purposes of this section, the term Group refers to the Company and its consolidated companies within the meaning of Article L of the French Commercial Code. As of 31 December 2014, the Group s personnel held no Viadeo SA shares as part of a company savings plan or company mutual fund as referred to in Article L of the French Commercial Code List of transactions on Viadeo SA shares by directors Since the date of the initial public offering on the regulated market of Euronext Paris, no directors, executives, senior managers or persons to whom they are closely related have purchased or sold Viadeo SA shares Elements liable to have an impact in case of a takeover bid (Article L of the French Commercial Code) 1) Information on the structure and breakdown of share capital and voting rights is provided above in section of this report. 2) None of the restrictions set out in the bylaws on the exercise of voting rights and transfer of shares or the clauses of any agreements brought to the knowledge of the Company pursuant to Article L of the French Commercial Code would be liable to have an impact in the event of a takeover bid. 3) The main shareholders of the Company are identified in section of this report. 33

34 4) The Company has no knowledge of any agreements between shareholders that would be liable to entail restrictions on the transfer of shares or the exercise of voting rights. 5) The rules applicable to the appointment and replacement of members of the Board of Directors and the amendment of the bylaws are not liable to have an impact in the event of a takeover bid. 34

35 1.9 Subsidiaries and investments The Group consists of Viadeo SA, which owns the following companies: Viadeo SA: created in December 2005 under the name VIADUC, the Group s parent company and registered office, Viadeo SA is the decision-making and support centre for the Group. The Company is also home to some of the development teams for the Viadeo platform. In this context, Viadeo SA issues the invoices for the income related to the recruitment and training solutions, the marketing services, and also for all of the Group s marketing subsidiaries (excluding China) on the basis of the operating rights granted to it by its US subsidiary, APVO Corporation. APVO Corporation ( APVO ): created in 2010, this San Francisco-based subsidiary is home to all of the Group s technological assets for the Viadeo platform (excluding China), including the website and membership database. In this capacity, this entity issues the invoices for the income related to premium subscriptions (online subscriptions) and grants the Company operating rights for other activities, namely, at this date, Recruitment and Training and Marketing and Advertising. 35

36 Tianji group: the Tianji group in China was acquired by the Company in February It has a dedicated platform and its own infrastructures (technical and product development, marketing, sales and support functions), and is made up of three companies: Wayson Technology Development Limited ( Wayson ) is a Hong Kong law holding company, incorporated on 10 October 2007 and wholly-owned by the Company. Wayson owns 100% of the capital of Tianji Boren Technology Development (Beijing) Co., Ltd. ( Boren ), a company under Chinese law, formed on 18 December Beijing Yingke Times Information Technology Co., Ltd. ( Yingke, together with Wayson and Boren, the Tianji group ) is a company under Chinese law, formed on 12 August Yingke owns Tianji, the Chinese professional social network. Apna Circle Infotech Private Limited ( ApnaCircle ): acquired at the end of 2009, ApnaCircle is developing a professional social network in India. As part of the strategic re-evaluation of the Group s assets, the Board of Directors of the Company decided, during its meeting held on 18 June 2013, to discontinue ApnaCircle s activities as of 1 July Apna Circle has currently been mothballed ahead of its liquidation. The members, integrated in the Viadeo platform, are now managed from the Company s head office. Viadeo Independent Media B.V. ( Viadeo IM ): this Dutch company is a joint venture created with the Russian media group Sanoma in October 2011 (the company and Sanoma each own 50%). Viadeo IM handles business development for the Viadeo platform in Russia and Russian-speaking countries through the Russian subsidiary Viadeo Independent Media LLC ( VIM ). Viadeo Maroc SARL ( Viadeo Maroc ): created in August 2011, this subsidiary handles business development for Viadeo in Sub-Saharan Africa and the Maghreb. Viadeo Limited: created in 2007, this English subsidiary comprises the Group s support activities for emerging markets. Sabri SARL: this subsidiary comprises a support activity for preparing one-off receptions organised by the Group. In addition, the Group holds a non-consolidated interest of 11% in ChinaBizNetwork Corp. (CBC), a holding company for the legacy shareholders of the Chinese business network Tianji. The assets of CBC consist solely of equity securities held in the Company. The Group s scope of consolidation is set out in detail in the notes to the consolidated financial statements. Investments and takeovers The Company did not make any investments or takeovers within the meaning of Article L of the French Commercial Code in

37 1.10 Agreements referred to in Articles L et seq. of the French Commercial Code Agreements approved during the year Guarantee agreement At the time of the IPO of Viadeo SA, a guarantee agreement was authorised by the Board of Directors at its meeting of 1 July 2014 and signed on the same day between Viadeo SA, Jefferies International Limited and Société Générale, as joint lead managers and joint bookrunners, Oddo & Cie, as co-lead manager, and some shareholders of Viadeo SA wishing to sell shares in the Company as part of the offer. Directors concerned: Thierry Lunati, Dan Serfaty, Idinvest Partners, Ventech and Bpifrance Participations Agreements signed in previous years that continued in 2014 Agreement with Kadomi SARL Under the terms of a service agreement dated 1 October 2006 and two amendments approved on 26 May 2010 and 26 May 2014 respectively, Kadomi SARL invoiced our Company an amount of 164,500 excluding tax for its work in 2014 financial year. Agreement with KDS SARL Under the terms of a service agreement dated 15 December 2005 and two amendments approved on 26 May 2010 and 26 May 2014 respectively, KDS SARL invoiced our Company an amount of 164,500 excluding tax for its work in 2014 financial year. Loan agreement with CBC On 27 October 2011, Viadeo granted CBC a loan of US$75,150 at an interest rate of 5% per annum. This loan will be repaid upon CBC s liquidation. 37

38 1.11 Subsequent events In Russia, following the decision of our partner Sanoma to withdraw from the area, a change in the ownership of the share capital of our Russian subsidiary Viadeo Independent Media LLC ( VIM LLC ) is expected in the first half of On 3 April 2015, the Group, which aims to continue its development in Russia, signed a Share Purchase Agreement (SPA) on the 50% of our subsidiary Viadeo Independent Media BV ( VIM BV ) previously held by Independent Media Holding BV, with a view to selling the shares in turn to a Russian partner in order to maintain a local presence considered essential to the success of operations in this area. Pursuant to the SPA, the conditions precedent having been lifted, the transaction will be finalised in May As requested by the Board of Directors of Viadeo SA, the Company has appointed BNY Mellon as custodian bank and Jones Day as legal counsel to launch an ADR programme (level 1) in the United States. The approval of the SEC was obtained on 27 April 2015, and the programme is now effective. 38

39 1.12 Table of results for the last five fiscal years 2014 Annual Financial Report Nature of indications/periods 31/12/ /12/ /12/ /12/ /12/2010 Duration of the financial year 12 months 12 months 12 months 12 months 12 months I Financial position at end of year a) Share capital 200, , ,157 91,990 88,814 b) Number of shares issued 10,028, , , , ,755 c) Bonds convertible into shares II Comprehensive results of operations a) Net revenue 22,984,631 28,310,122 23,268,804 20,943,430 16,424,088 b) Earnings before tax, depreciation, amortisation and provisions (5,941,411) (3,057,925) (1,576,392) (592,703) 6,405,486 c) Income tax (550,197) (786,215) (739,355) (662,975) (397,709) b) Earnings after tax, but before depreciation, amortisation and provisions (5,391,214) (2,271,710) (837,037) 70,272 6,803,195 e) Earnings after tax, depreciation, amortisation and provisions (3,484,834) (5,424,965) (3,205,702) 1,253,485 4,354,993 f) Amounts of profits distributed g) Employee profit-sharing III Earnings per share a) Earnings after tax, but before depreciation and amortisation n/a n/a n/a b) Earnings after tax, depreciation, amortisation and provisions n/a n/a n/a 5 17 c) Dividend paid per share n/a n/a n/a n/a n/a IV Personnel a) Number of employees b) Total payroll 11,527,619 13,327,917 10,468,645 7,860,987 5,390,671 c) Amounts paid for employee benefits 5,114,748 5,977,665 4,769,413 3,628,273 2,304,083 39

40 PART 2 Chairman s report on the functioning of the Board of Directors and on internal control procedures relating to the preparation and processing of accounting and financial information in respect of 2014 financial year (pursuant to Article L of the French Commercial Code) To the shareholders, Pursuant to the provisions of the Financial Security Act of 1 August 2003, I hereby report to you, in my capacity as Chairman of the Board of Directors, on the composition of the Board, including the application of the principle of balanced representation of women and men, the conditions of the preparation and organisation of the work of the Board and the internal control and risk management procedures implemented by the Company. The report also reviews the implementation of the recommendations of the MiddleNext Corporate Governance Code for Small and Midcaps published in December 2009 (hereinafter the MiddleNext Code ), lists any provisions that have been rejected, and provides the reasons for which they have been rejected. This report, together with the 2014 management report, has been prepared in accordance with the provisions of Article L of the French Commercial Code, and was reviewed and approved by the Board of Directors at its meeting of 28 April It is available on the Company s website, in accordance with Articles L of the French Commercial Code and of the AMF General Regulation. A special report presents the Statutory Auditors observations on the information contained in this report concerning internal control and risk management procedures relating to the preparation and processing of accounting and financial information. For the purposes of the Chairman s report, unless otherwise stated, the term Group refers to the Company and its consolidated companies within the meaning of Article L of the French Commercial Code. 2.1 Corporate governance As part of the process of admission to trading of the Company s shares on the regulated market of Euronext Paris in 2014, the Company undertook a review of its governance. Committed to basing its governance on best practice, the Company s Board of Directors considered that the MiddleNext Code was best suited to its size and structure. The Board of Directors, at its meeting of 26 May 2014, approved the use of the MiddleNext Code as the reference code in terms of corporate governance, with the aim of gradually complying with its key provisions. For the sake of transparency and public information, and with a view in particular to the admission of its shares to trading on the regulated market of Euronext Paris, the Company initiated a general review of its corporate governance practices. 40

41 The table below summarises the recommendations with which the Company is not in full or partial compliance, as well as the justifications provided, in accordance with Article L of the French Commercial Code: Recommendations of the MiddleNext Code Practices and justification of the Company Combination of an employment contract with a director position The Board of Directors has authorised the combination of employment contracts in the Company s subsidiaries with a director position in the Company for Dan Serfaty, Chairman and Chief Executive Officer, and Thierry Lunati, Deputy Chief Executive Officer. Presence of independent members on the Board of Directors The composition of the Board of Directors does not comply with the MiddleNext recommendation that requires the presence of at least two independent members when the Board is composed of more than six members. In view of the number of directors comprising the Company s Board of Directors, these committees should include two independent members, which is not currently the case. The Company intends to make its best efforts to comply on this point during the coming year. Assessment of the work performed by the Board To date, the Company s Board of Directors has not assessed its working and operating methods. This issue will be on the agenda of a Board meeting in the coming financial year, in order to establish the timeframe for this evaluation, which could take the form of a self-assessment. In accordance with the commitment made in the document de base registered with the AMF on 27 May 2014 under number I , the Company has made the internal rules established by its Board of Directors on 26 May 2014 available on the Company s website ( 41

42 2.1.1 Administrative and management bodies Company management Composition and functioning Created in the form of a French société à responsabilité limitée, the Company was converted into a French société anonyme with a Board of Directors at the general shareholders meeting of 22 June The Board of Directors, which met for the first time on 22 June 2006, decided not to separate the duties of Chairman and Chief Executive Officer. It also appointed a Deputy Chief Executive Officer. On 25 February 2014, the Board of Directors decided to appoint Dan Serfaty as Chairman and Chief Executive Officer and Thierry Lunati as Deputy Chief Executive Officer of the Company. The following is an excerpt of the bylaws of the Company relating to its general management (Article 14 of the bylaws): Responsibility for the Company s general management is undertaken either by the Chairman of the Board of Directors or by another natural person appointed by the Board of Directors and bearing the title of Chief Executive Officer. The Chief Executive Officer is vested with the broadest powers to act on behalf of the Company under any circumstance. The Chief Executive Officer s powers are exercised within the bounds of the corporate purpose and without prejudice to those powers expressly vested by law in shareholders meetings and in the Board of Directors. The CEO represents the Company in its relations with third parties. The Company is also bound by acts of the Chief Executive Officer not falling within the remit of the corporate purpose, unless it can prove that the third party knew that the act went beyond said purpose or that, under the circumstances, it could not fail to have been aware of this fact. Publication of the bylaws does not, of itself, constitute sufficient proof thereof. The Chief Executive Officer may not be more than 70 years of age. The Chief Executive Officer will be deemed to have resigned should this age limit be reached. The Chief Executive Officer s mandate would, however, be extended to the next Board meeting at which the new Chief Executive Officer would be appointed. Should the Chief Executive Officer also be a director, the term of office as Chief Executive Officer may not exceed that as director. The Board of Directors may dismiss the Chief Executive Officer at any time. Should the dismissal be decided without just cause, it may give rise to the payment of compensation, unless the Chief Executive Officer takes over the duties of Chairman of the Board of Directors. The Board of Directors chooses, by simple majority vote of those directors present or represented, between the two operating procedures listed below. 42

43 Shareholders and third parties are informed of this choice in accordance with legal and regulatory requirements. The Deputy Chief Executive Officer or officers may be dismissed at any time by the Board of Directors, on the proposal of the Chief Executive Officer. Should the dismissal be decided without just cause, it may result in the payment of compensation. Deputy Chief Executive Officers may not be more than 70 years of age. Should a Chief Executive Officer reach the age limit, he or she will be assumed as resigning from his or her position. The Deputy Chief Executive Officer s mandate would, however, be extended to the next Board meeting at which the new Deputy Chief Executive Officer would be appointed. Should the Chief Executive Officer cease to perform, or be prevented from performing, his or her duties, unless decided otherwise by the Board of Directors, the Deputy Chief Executive Officer or officers will remain in office and will retain their powers until the new Chief Executive Officer is appointed. Principles and rules for determining the compensation of directors The Company applies all the recommendations of the MiddleNext Code regarding the compensation of executive and non-executive directors. Detailed information about such compensation and its presentation are included in the Board s management report for the year ended 31 December At its meeting on 10 February 2015, the Board of Directors confirmed that the directors have waived the allocation of attendance fees in respect of 2014 financial year. The Company did not make any provisions for the payment of pensions, retirement funds and other advantages in favour of directors and executives Board of Directors a Composition The Board of Directors has eight directors and two observers. Changes in the Board s composition occurred during 2014 financial year: 1 July 2014: resignation of Sébastien Brault from his position as observer; 25 July 2014: appointment by A Capital of a new permanent representative, André Lösekrug; 6 August 2014: resignation of Derek Ling from his position as director; 27 August 2014: resignation of William Henry Johnston from his position as director. 43

44 List of positions held within the Group Name Position Operational functions and other positions within the Group Date first appointed and date last renewed First appointed as director: general shareholders meeting of 22 June 2006 Last renewed as director: general shareholders meeting of 28 February 2011 Dan Serfaty Chairman of the Board of Directors and Chief Executive Officer Chairman of APVO Director of Wayson Technology Development Ltd Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2016 Appointed as Chairman and Chief Executive Officer: Board of Directors meeting of 25 February 2014, for the duration of his term as director First appointed as director: general shareholders meeting of 22 June 2006 Last renewed as director: general shareholders meeting of 28 February 2011 Thierry Lunati Director and Deputy Chief Executive Officer Technical director Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2016 Appointed as Chairman and Chief Executive Officer: Board of Directors meeting of 25 February 2014 AV3 represented by Olivier Lazar Director None First appointed: general shareholders meeting of 22 June 2006 Last renewed: general shareholders meeting of 28 February 2011 Term of office expires: after the general 44

45 shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2016 First appointed: general shareholders meeting of 22 June 2006 Idinvest Partners (formerly AGF Private Equity) represented by Benoist Grossmann Director None Last renewed: general shareholders meeting of 28 February 2011 Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2016 First appointed: general shareholders meeting of 22 June 2006 Ventech represented by Alain Caffi Director None Last renewed: general shareholders meeting of 28 February 2011 Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2016 China Biznetwork Corp represented by William Melton Director None First appointed: general shareholders meeting of 2 September 2009 Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2014 Bpifrance Participations (formerly FSI) represented by Jean d Arthuys Director None First appointed: general shareholders meeting of 25 April 2012 Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December 2017 A Capital Switch SARL represented by André Lösekrug Director None First appointed: general shareholders meeting of 21 May 2014 Term of office expires: after the general shareholders meeting called to rule on the financial statements for the financial year ending 31 December

46 Two observers, both founders of entities acquired by the Company and as such experts in their field, also attend Board of Directors meetings: Yogesh Bansal (co-founder of ApnaCircle); Sabeer Bhatia (co-founder of ApnaCircle). They were all appointed by the general shareholders meeting of 28 February 2011 for a period of six financial years expiring at the close of the general shareholders meeting called to rule on the financial statements for the fiscal year ending 31 December The business address of the Chairman and Chief Executive Officer and the Deputy Chief Executive Officer is the registered office of the Company. The business addresses of the other directors are as follows: AV3: 30 rue de la Victoire, Paris; Idinvest Partners: 117 avenue des Champs-Elysées, Paris; Ventech: 47 avenue de l Opéra, Paris; China Biznetwork Corp: 2086 Hunters Crest Way, Vienna va (United States); Bpifrance: avenue du Général Leclerc, Maisons-Alfort Cedex; A Capital Switch SARL: 2 avenue Charles de Gaulle, L-1653 Luxembourg. The expertise and management experience of these persons comes from various salaried and senior management positions they have held in the past. No family ties exist between the persons mentioned above. Over the last five years, none of the above persons: has been found guilty of fraud; has been involved in a bankruptcy, receivership or liquidation in their position as director or administrator; has been banned from managing a company; has been subject to any official public incrimination or sanctions by statutory or regulatory authorities. 46

47 Other current executive positions (outside the Group) Other current executive positions outside the Group Dan Serfaty Thierry Lunati Co-manager Director Manager Manager Nature of executive position Company KDS ASSOCIES SARL CHINA BIZNETWORK CORP (CBC) FINANCIERE MARLU SC Kadomi SARL AV3 (Olivier Lazar) Chief Executive Officer Manager Permanent representative of Angyal on the Board of Directors Permanent representative of Angyal on the Board of Directors Permanent representative of Amplegest on the Board of Directors AMPLEGEST SA SCI OK VEP DIRECTANNONCES SA PROMETIS SA SICAV MARIGNAN Director WINAMAX Director SIGFOX Director KANTOX Idinvest Partners (formerly AGF Private Equity) (Benoist Grossmann) Chief Executive Officer Director Chairman Member of the executive board Holding Entreprises & Patrimoine II 2010 Holding Entreprises & Patrimoine Annapurna Capital IDINVEST PARTNERS 47

48 Other current executive positions outside the Group Ventech (Alain Caffi) Nature of executive position Permanent representative of Ventech on the Board of Directors Permanent representative of Ventech on the management board Permanent representative of Ventech on the Board of Directors Permanent representative of Ventech on the Board of Directors Permanent representative of Ventech on the Board of Directors Permanent representative of Ventech on the Board of Directors Permanent representative of Ventech on the Board of Directors Permanent representative of Ventech on the Board of Directors Chairman of the executive board Observer Observer Manager AUGURE BELIEVE EYEKA IN COM WEBEDIA CURSE SOJEANS SHOPMIUM Company VENTECH OKTOGO PIXONIC VENTECH CHINA SARL China Biznetwork Corp (William Melton) Director Director Manager E4E TARANG TECHNOLOLGY GLOBAL INTERNET VENTURES LLC ST MICROELECTRONICS Bpifrance Participations (formerly FSI) (Jean d Arthuys) Permanent representative of Bpifrance Participations on the Board of Directors Permanent representative of Bpifrance Participations on the Board of Directors Permanent representative of Bpifrance Participations on the Board of Directors Permanent representative of Bpifrance Participations on the Board of Directors TALEND EUTELSAT SARENZA 48

49 Directors and observers biographies Dan Serfaty is the co-founder and CEO of Viadeo. He oversees all Viadeo operations at an international level. Viadeo s basic premise was first developed in 2000 when Dan Serfaty teamed up with two friends (one of whom was Thierry Lunati, co-founder of Viadeo) at Creadev, a fund owned by the Mulliez family. Together, they went on to launch an innovative concept in the private equity world - Agregator, an entrepreneurs club that aggregated and valued private company shares to fund the expansion of member companies. On the back of this success, and armed with a network 400 members, Viadeo first emerged in Prior to founding Viadeo, Dan Serfaty was involved in a string of entrepreneurial ventures including the formation and turnaround of several companies in the tourism sector and the creation of a company specialising in the distribution of textile products from Asia. Dan is a graduate of HEC (École des Hautes Études Commerciales). Thierry Lunati co-founded Viadeo alongside Dan Serfaty. He oversees Viadeo s technology strategy. The first steps towards Viadeo s creation were taken in 2000 when Thierry and Dan launched Agregator, an entrepreneurs club that aggregated and valued private company shares to fund the expansion of member companies. That same year, Thierry also co-founded TBX Trade, an innovative stock exchange online trading solution. Previously, Thierry had been involved in several company start-ups, including Forlog, an IT training company, and the search engine Lokace in 1993, which quickly became a benchmark in the sector and was sold to Infosources less than two years later. In 1996, Thierry also co-founded the online portal and webmail service Caramail that was purchased by Lycos in Thierry is a graduate of École Centrale de Paris and HEC. Olivier Lazar (permanent representative of AV3): in July 2012, Olivier Lazar became CEO of Amplégest, an entrepreneurial management company specialising in three main areas: private management (wealth consulting, discretionary management, etc.), asset management (Eurozone, Small and Midcap, and flexible, top-down activity management) and family office services. Before joining Amplégest, Olivier was Chairman of the executive board at Olympia Capital Gestion from 1995 to 2012, a company providing fund management for private clientele, and previously worked as head of Banque OBC s Asset Management department for more than eight years. During his career, Olivier Lazar has also led several projects on behalf of Banque Louis- Dreyfus, World Promotions, and OTTO Lazar SA. 49

50 Benoist Grossmann joined Idinvest Partners in He was appointed a member of the executive board in 2003 and operates mainly in the Internet sector. Before joining Idinvest Partners, Benoist worked for several venture capital funds for over ten years. He was a partner at Viventures from 1998 to 2002 and worked as Investment Manager at La Financière de Brienne. He had previously spent over ten years working as a laser systems specialist at EDF, NASA and Thomson-CSF Optronique, for whom he invented five patents and authored some twenty publications. The holder of a Ph.D. in physics from Université de Paris VI and an MBA from the Institut d Études Politiques de Paris, Benoist is currently on the Boards of Viadeo, Sigfox, Withings and Winamax and was previously on the Boards of Criteo, Dailymotion and Meetic. In 1998, Alain Caffi founded Ventech, a company dedicated to providing IT solutions for businesses and is now a Partner. Alain has 18 years of experience working for a diverse range of private equity companies. He has particularly strong experience in the organisation of syndicates, corporate governance and crisis management as well as the organisation of mergers and acquisitions and initial public offerings. In 1986, Alain was involved in the launch of the NATIXIS investment fund, which became one of the leading private equity firms in France. Alain currently sits on the Boards of many internet companies including Viadeo. William Melton is co-founder of Global Internet Ventures, a private equity firm specialising in new technology. A leading entrepreneur in integrating technology into the financial world, he has founded several companies including Verifone in 1981 and CyberCash in He also founded the Melton Foundation, an international community devoted to combining exceptional young talent with new technologies. William Melton is an active investor in and board member of multiple young businesses in the ICT sector. Jean d Arthuys has been a member of the Executive Committee at France s Strategic Investment Fund (FSI) since June Now a part of BPI, the Group aims to foster economic growth and competitiveness and to serve public interest by responding to the capital requirements of French businesses. After graduating from HEC, he built his career within media and digital roles, most notably at the heart of the M6 group, where he became a member of the executive board in 1999 after having been in charge of development from 1996 to He served more recently as Chairman and CEO of television channels Paris Première and W9 (in 2004 and 2005 respectively) and, owing to his considerable experience in digital media, has since been an administrator at TPS, Sportfive, and Newsweb, and Chairman and CEO of the French soccer club Les Girondins de Bordeaux. From 2007 to 2010 he acted as a partner at PAI Partners, in charge of media, Internet, and telecoms. 50

51 André Lösekrug-Pietri is the founder and managing partner of A Capital, a private equity fund investing in European companies to intensify their growth in emerging markets, particularly in Asia. André was previously a co-founder of CEL Partners, a growth fund dedicated to China, and developed Jaccar Capital Fund (for Vietnam and China). He began his career at Aérospatiale-Airbus in Toulouse. He has dual French and German nationality, and is a graduate of HEC, the International MBA programme at Michigan Business School and the Global Leadership and Public Policy programme at the Harvard Kennedy School. He is a French Foreign Trade Advisor and was named Young Global Leader by the World Economic Forum (Davos). Yogesh Bansal is the founder of ApnaCircle, an Indian professional social network acquired by the Viadeo Group and integrated into the Viadeo platform. Before establishing ApnaCircle.com, Yogesh Bansal carried out market research on social networks. In the earlier stages of his career, Yogesh Bansal worked at McKesson Inc, a company providing innovative healthcare services. As a true entrepreneur, he is involved in many community activities in India and his work has been published a number of times. Yogesh Bansal holds an MBA from the University of North Carolina. Indian IT mogul Sabeer Bahtia co-founded Hotmail in He was Chairman and CEO of the company until it was acquired by Microsoft in In 2007, he became a member of the Board of Directors of ApnaCircle. Following ApnaCircle s acquisition by Viadeo in 2009, Sabeer joined Viadeo s Management Committee. Saaber s success has been acknowledged by many awards and prizes, including being named by TIME Magazine as one of the People to Watch in International Business in

52 b Conditions of preparation and organisation of the Board s work 2014 Annual Financial Report The Board of Directors meets as often as required in the Company s interest. Meetings are held at any place indicated in the notice, but preferably at the registered office. Board members are called to meetings by letter, fax or at least five (5) days prior to each meeting. The Board may also be convened by any other means, even orally, if all sitting Board members are present or represented at the meeting. All documents or draft documents needed to inform them about the agenda and the issues to be discussed by the Board must be sent, delivered or made available to Board members a reasonable time prior to the meeting. In addition, the Board is informed at its meetings of the Company s financial position, cash position and commitments. Once every year, the Board reviews its operations. At least once every three years, it conducts a formal assessment, with the assistance of an external consultant if necessary. This assessment is intended to ensure that important issues are properly prepared and discussed, and to measure the contribution of each member in the work of the Board, notably with regard to their skills and commitment. Board members may participate in Board meetings by videoconference or by telecommunication. This form of participation is not applicable for the approval of the annual financial statements, including the consolidated financial statements and the management report. The means used must enable the proper identification of participants and ensure their effective participation. The minutes must make mention of participation of members of the Board by videoconference or by telecommunication. 52

53 c Bylaws relating to the Company s Board of Directors Composition of the Board of Directors The Company is run by a Board made up of natural persons or legal entities, numbers being set by the ordinary shareholders meeting in accordance with legal requirements. At their time of appointment, all legal entities are required to designate a natural person as their permanent representative on the Board of Directors. The term of office for the permanent representative is the same as for the legal entity director being represented. When a legal entity dismisses its permanent representative, it is also responsible for finding a replacement. The same applies in the event of the death or resignation of the permanent representative. Directors have a six-year term of office. The director s term of office comes to an end at the close of the general shareholders meeting to approve the financial statements for the year just ended and held in the year in which said directorship is due to expire. Directors can always be re-elected. They can be dismissed at any time by decision of the general shareholders meeting. In the event of a vacancy becoming available as a result of death or resignation from one or more seats on the Board, the Board of Directors may make temporary appointments in the interim period between two general shareholders meetings. Any appointments made by the Board, by virtue of the above, are subject to ratification by the next ordinary general shareholders meeting. Failing ratification, resolutions adopted and acts performed by the Board at an earlier date nonetheless remain valid. If the number of directors falls below the legal minimum, the remaining directors shall immediately convene an ordinary general shareholders meeting with a view to making up the Board s numbers. Company employees may be appointed as directors. Their employment contracts must, however, correspond to actual jobs. In such case, the benefits of the employment contract will not be lost. No more than one-third of the directors currently in post may be bound to the Company by an employment contract. No more than one-third of the directors currently in post may be over 70 years of age. If this limit is exceeded during the course of a term of office, the oldest director is automatically deemed to have resigned at the close of the next general shareholders meeting. 53

54 Meetings of the Board of Directors Directors are called to board meetings by the Chairman of the Board. Meetings may be convened by any means, whether verbally or in writing. The Chief Executive Officer, the Deputy chief executive office or two members of the Board of Directors may also ask the Chairman to convene a board meeting on a specific agenda. Moreover, if the Board has not met for over two months, one third or more of directors may ask the Chairman to convene a board meeting on a specific agenda. The Chairman may not refuse this request. If a works committee has been set up, the representatives of this committee, appointed in accordance with the provisions of the French Labour Code, shall be invited to attend all board meetings. Board meetings take place at the Company s registered office or at any other venue in France or outside France. For the Board s decisions to be valid, at least half of its members shall be in attendance. Board of Directors decisions will be taken by majority vote. In the event of a tied vote, the Chairman has the casting vote. The internal rules adopted by the Board of Directors notably state that directors taking part in board meetings by means of video or teleconferencing shall be deemed to be in attendance when calculating the quorum and majority, in accordance with prevailing regulations. This provision does not apply to the adoption of the decisions referred to in Articles L and L of the French Commercial Code. Directors receive the information needed to perform their duties and fulfil their mandates and may ask to be supplied with any further documents which they deem appropriate. Directors may authorise other directors to represent them at board meetings by letter, telegram, telex, fax, or any other means of telecommunication, but each director may only hold one proxy per meeting. Copies or extracts of decisions taken by the Board of Directors are duly authenticated by the Chairman of the Board of Directors, the Chief Executive Officer, directors temporarily acting as Chairman or any proxy duly authorised to this end. 54

55 Powers of the Board of Directors The Board of Directors determines the Company s business strategy and oversees its implementation. Without prejudice to the powers expressly vested in shareholders meetings and within the bounds of the corporate purpose, the Board deals with any issues involving the smooth operation of the Company and takes decisions on any related matters. In its relations with third parties, the Company is also bound by acts of the Board of Directors not falling within the remit of the corporate purpose, unless it can prove that the third party knew that the act went beyond said purpose or that, under the circumstances, it could not fail to have been aware of this fact. Publication of the bylaws does not, of itself, constitute sufficient proof thereof. The Board of Directors carries out any checks and controls that it deems appropriate. Furthermore, the Board of Directors exercises special powers vested in it by the law. Observers The ordinary general shareholders meeting may, at the suggestion of the Board of Directors, appoint observers. The Board of Directors may also appoint observers directly, subject to ratification by the next general shareholders meeting. The observers form a Board. They are chosen freely on the basis of their skills. They are appointed for a six-year term, ending at the close of the ordinary shareholders meeting called to approve the financial statements for the year just ended. The advisory board studies the issues submitted for review by the Board of Directors or its Chairman. Observers attend board meetings and take part in decision-making solely on a consultative basis. Their absence is never cause for the validity of such decisions to be called into question. They are called to meetings under the same terms as directors. The Board of Directors may compensate observers using the attendance fees granted to the board members by the general shareholders meeting. 55

56 d Report of the activity of the Board during 2014 financial year 2014 Annual Financial Report Internal rules were adopted by the Board of Directors at its meeting of 26 May Among other items, these internal rules list the business principles and obligations of the members of the Company s Board of Directors. All directors undertake to maintain their independence of thought, judgement and action, and to participate actively in the Board s work. They will inform the Board of any conflicts of interest they may face. Furthermore, the Board reiterated the applicable regulations pertaining to the dissemination and use of inside information and specified that its members should refrain from performing securities transactions when they have inside information. Each director must declare any transactions carried out directly or indirectly on the Company s securities to the Company and the AMF. The Board of Directors has, in the form of A Capital Switch SARL, represented by André Lösekrug, an independent director within the meaning of the provisions of the MiddleNext Corporate Governance Code, insofar as A Capital Switch SARL, represented by André Lösekrug: is neither an employee nor executive director (mandataire social dirigeant) of the Company or of one of its subsidiaries, and has not been in the last three years; is not a significant customer, supplier or banker of the Company or its group, or for which the Company or its group comprises a significant portion of its business; is not a reference shareholder in the Company; has no close family ties with a director (mandataire social) or reference shareholder; has not been an auditor of the Company in the last three years. The number of meetings of the Board of Directors takes into account the various events that punctuate the Company s life. Accordingly, the Board of Directors meets as often as is required by the Company s current position. During the year ended 31 December 2014, the Company s Board of Directors met 12 times, and the average attendance rate for board members was 70.7%. The Board also includes two observers, namely Yogesh Bansal and Sabeer Bhatia. Observers are called to meetings of the Board under the same conditions as directors. They accordingly benefit from a right to information prior to board meetings, under the same terms as board members. They attend board meetings in a consultative capacity only. The Company aims to make its best efforts to comply promptly with the law of 27 January 2011 on the balanced representation of men and women on Boards of Directors. 56

57 2.1.2 Special committees Audit committee By decision of the Board of Directors on 26 May 2014, the Company has established an Audit Committee for an indefinite period. The members of the Audit Committee set out their committee s operating rules in internal rules approved on the same day. The main terms of the Audit Committee s internal rules are set out below. Composition The Audit Committee comprises at least two members appointed by the Board of Directors after the Appointment and Compensation Committee has given its opinion. The members of the Audit Committee are chosen from among the members of the Board of Directors and, as far as possible, two-thirds of them are independent members, with at least one of them having special financial or accounting skills, it being specified that all members have a minimum level of proficiency in terms of financial and accounting expertise. At the time of writing, the members of the Audit Committee were: Bpifrance Participations, director, represented by Jean d Arthuys; A Switch Capital SARL, director, represented by André Lösekrug, independent member of the Board with specific expertise in accounting and finance. It is stipulated as necessary that the members of the Audit Committee are members of the Board of Directors not performing management duties. Duties The Audit Committee is responsible for: monitoring the financial reporting process; monitoring the effectiveness of internal control and risk management systems; monitoring the statutory audit of annual and consolidated financial statements; issuing a recommendation on the Statutory Auditors proposed for appointment by the general shareholders meeting and reviewing the terms for their payment; monitoring the independence of Statutory Auditors; assessing the conditions for the use of derivatives; regularly monitoring the status of significant disputes; assessing the Company s procedures in terms of receiving, keeping and processing complaints related to accounting matters and accounting checks performed internally, to questions related to accounting checks and the documents provided by employees on an anonymous and 57

58 confidential basis, and which may challenge accounting practices or those related to accounting checks; and more generally, to provide advice and make appropriate recommendations in the abovementioned areas. Functioning The Audit Committee meets at least four times a year, with the Statutory Auditors if the committee s Chairman considers it useful, based on a schedule determined by the Chairman, to assess the annual, half-yearly and, where appropriate, quarterly consolidated financial statements, based on an agenda approved by the Chairman and sent to the Audit Committee members no later than seven days before the meeting. The Committee also meets at the request of its Chairman, two of its members, or the Chairman of the Company s Board of Directors. The Audit Committee can hear all members of the Company s Board of Directors and perform all internal and external audits on all subjects which it considers appropriate to its duties. The Chairman of the Audit Committee shall inform the Board of Directors of such hearing beforehand. In particular, the Audit Committee may hear people who contribute to the financial reporting or auditing process (administrative and financial director, and main officers of the financial department). The Audit Committee hears the Statutory Auditors. It may hear them without any Company representatives being present. Reports and activity reports for the prior year The Chairman of the Audit Committee ensures that the ommittee s summary reports to the general shareholders meeting enable the latter to be fully informed, thereby facilitating its deliberations. During the year ended 31 December 2014, the Company s Audit Committee met twice, and the average attendance rate of the members of the Audit Committee was 75% Appointment and Compensation Committee Composition By decision of the Board of Directors on 26 May 2014, the Company has established an Appointment and Compensation Committee. The members of this committee set out their committee s operating rules in internal rules approved by the Board of Directors on 26 May The main terms of the Appointment and Compensation Committee s internal rules are described below. Wherever possible, the Appointment and Compensation Committee comprises at least two members of the Board of Directors, appointed by the latter. Furthermore, wherever possible, the majority of its members are independent members. 58

59 It is stipulated as necessary that no director performing management duties within the Company can be a member of the Appointment and Compensation Committee. At the time of writing, the members of the Appointment and Compensation Committee were as follows: Idinvest Partners, director, represented by Benoist Grossmann; the company Ventech, director, represented by Mr Alain Caffi. Duties The Appointment and Compensation Committee is notably tasked with: in terms of appointments: o o o o o presenting recommendations on the composition of the Board of Directors and its Committees to the Board of Directors, proposing to the Board of Directors, on a yearly basis, the list of its members who may be qualified as independent members in accordance with the criteria set out by the MiddleNext Corporate Governance Code, preparing a succession plan for the Company s executives and helping the Board of Directors appoint and assess executives, preparing a list of people who may be recommended as directors, preparing a list of members of the Board of Directors who may be recommended as members of a Committee of the Board of Directors; in terms of compensation: o o assessing the main objectives proposed by general management in terms of the compensation of the Company s non-executive directors, including free share allocations, share subscription and purchase option plans, reviewing the compensation of non-executive directors, including free share and stock option plans, pension, health and welfare schemes, and benefits in kind; making recommendations and propositions to the Board of Directors regarding: o o compensation, pension, health and welfare schemes, benefits in kind, and other financial entitlements, including those of directors in the event of termination of employment. The committee proposes compensation amounts and structures, in particular the rules for determining the variable portion taking into account the Company s strategy, goals and results, in addition to market practices, free share allocations, share subscription and purchase option plans, together with any other similar profit-sharing mechanism and, in particular, registered shares allotted to directors eligible for such a mechanism; assessing the total amount of attendance fees and their distribution system among directors, together with the terms for reimbursement of expenses incurred by the members of the Board of Directors; 59

60 2014 Annual Financial Report preparing and presenting reports, where applicable, pursuant to the internal rules of the Board of Directors; making any other recommendation which may be requested by the Board of Directors in terms of compensation. Generally speaking, the Appointment and Compensation Committee provides any advice and recommendations relevant to the above-mentioned issues. Operating procedures The Appointment and Compensation Committee meets at least four times a year, based on a schedule determined by its Chairman and following an agenda approved by its Chairman and provided to the members of the Appointment and Compensation Committee at least seven days before the meeting. It also meets at the request of its Chairman, two of its members, or the Board of Directors. All non-executive directors who are not members of the Appointment and Compensation Committee may freely participate in its meetings. If the Chairman of the Company s Board of Directors is not a committee member, he/she may be invited to participate in the Committee meetings. The Committee invites the Chairman to present his/her propositions. He/she does not have voting rights and may not attend deliberations regarding his/her own situation. The Appointment and Compensation Committee may request the Chairman of the Board of Directors to receive assistance from any Company executive with expertise that may facilitate the handling of an agenda item. The Chairman of the Appointment and Compensation Committee or the Chairman of the meeting must point out that any person participating in discussions must comply with confidentiality obligations. Reports and activity reports for the prior year The Chairman of the Appointment and Compensation Committee ensures that the committee s summary reports to the general shareholders meeting enable the latter to be fully informed, thereby facilitating its deliberations. During the year ended 31 December 2014, the Company s Appointment and Compensation Committee met twice, and the average attendance rate of the members of the Appointment and Compensation Committee was 100% Other governance questions The provisions relating to the participation of shareholders at meetings are contained in Title IV of the bylaws, which are available at the Company s headquarters. The information referred to in Article L of the French Commercial Code liable to have an impact in the case of public offer is set out in the management report of the Board of Directors. Furthermore, and for the record, the following commitments were made during the Company s IPO: 60

61 Abstention undertaking Under the terms of the Underwriting Agreement, the Company undertakes not to issue, offer, sell, or grant a promise to sell, either directly or indirectly (notably in the form of trading in derivatives with shares as the underlying assets), shares or securities giving access through conversion, exchange, redemption, presentation of a warrant or any other method to the allotment of securities issued or to be issued in the future representing a portion of the Company s share capital, nor to publicly declare the intention to proceed to one or more of the transactions referred to hereinabove, from the date of signature of the Underwriting Agreement until the expiration of a period of 180 days following the date of settlement/delivery of the shares issued in the context of the Offering, (i.e. until 4 January 2015), unless with the prior written agreement of the Joint Lead Managers and Joint Bookrunners notified to the Company. It is specified in this regard that (i) the shares issued for the Offering, (ii) all transactions carried out in the context of a share buyback programme in accordance with the law and regulations, as well as with applicable market rules, (iii) the securities that may be issued, offered or transferred to the employees or corporate officers of the Company and of the companies in its group under the terms of future plans, already authorised on this date, or which will be authorised by the Company s general shareholders meeting, and (iv) the Company s securities issued in the context of a merger or acquisition of securities or assets of another entity, provided that the beneficiary of these securities agrees to take over this undertaking for the remaining term and provided that the total number of securities of the Company issued in this case does not exceed 5% of the capital, are excluded from the scope of this abstention agreement. Founding directors lock-up undertaking The Company s two founders who own shares and founders warrants have made an undertaking to the Underwriters not to offer, pledge, loan, transfer, sell or promise to sell, directly or indirectly, without the prior agreement of the Joint Lead Managers and Joint Bookrunners, (i) 100% of the shares they own on the Offering settlement/delivery date or that they might come to hold in the event that AV3 is wound up, restructured or otherwise, for a period of 180 calendar days following the settlement/delivery date of the Company s shares, (ii) 90% of the shares they own on the Offering settlement/delivery date, for an additional 180 calendar days following the 180-day period referred to above; this includes the shares they are entitled to subscribe by virtue of their founders warrants. It is specified in this regard that the following are excluded from the scope of these lock-up undertakings: (a) the sale of the Sold Shares, in order to finance the increase in the equity stake in the Company of the founders concerned, (b) all transactions on the Company s shares in the context of a tender offer on the Company s securities, (c) all transactions on the Company s shares acquired on the market subsequent to the initial listing of the Company s shares. This undertaking was made by Dan Serfaty, Thierry Lunati, Karen Serfaty and their respective asset holdings. Lock-up undertaking by the Company s main financial shareholders Bpifrance Participations, the investment funds managed by Idinvest Partners and the fund managed by Ventech (collectively holding more than 33.04% of the share capital before the IPO) have each made an 61

62 undertaking to the Underwriters not to offer, pledge, loan, transfer, sell or promise to sell, directly or indirectly, without the prior agreement of the Joint Lead Managers and Joint Bookrunners, (i) 100% of the shares they own on the Offering settlement/delivery date, for a period of 180 calendar days following the settlement/delivery date of the Company s shares, (ii) 66% of the shares they own on the Offering settlement/delivery date, for the period of 90 calendar days following the 180-day period referred to hereinabove, and (iii) 33% of the shares they own on the Offering settlement/delivery date, for an additional 90 calendar days following the 90-day period referred to hereinabove, nor to enter into any other contract or transaction having an equivalent financial effect, nor to publicly declare the intention to proceed to one or more of the transactions referred to hereinabove. It is specified in this regard that the following are excluded from the scope of these lock-up undertakings: (a) the sale of the Sold Shares, (b) all transactions on the Company s shares in the context of a tender offer on the Company s securities, (c) all transactions on the Company s shares subscribed in the context of the Offering or acquired on the market subsequent to the initial listing of the Company s shares and (d) any sale by (i) an investment fund to another investment fund managed by the same management company, or (ii) a legal entity to any legal entity which, directly or indirectly through one or more entities, controls or is controlled by the seller, or is controlled, directly or indirectly by the one or more entities, by a person who controls the seller, directly or indirectly by one or more entities. Lock-up undertaking by the Company s other main shareholders The Company s main shareholders other than the founders and financial investors referred to above (that collectively own more than 52.46% of the share capital before the IPO) have each made an undertaking to the Underwriters not to offer, pledge, loan, transfer, sell or promise to sell, directly or indirectly, without the prior agreement of the Joint Lead Managers and Joint Bookrunners, 100% of the shares they own on the Offering settlement/delivery date, for a period of 180 calendar days following the settlement/delivery date of the Company s shares, nor to enter into any other contract or to conduct any transaction having an equivalent financial effect, nor to publicly declare the intention to proceed to one or more of the transactions referred to hereinabove. It is specified in this regard that the following are excluded from the scope of these lock-up undertakings: (a) the sale of the Sold Shares, (b) all transactions on the Company s shares in the context of a public offering on the Company s securities, (c) all transactions on the Company s shares subscribed in the context of the Offering or acquired on the market subsequent to the initial listing of the Company s shares and (d) any sale by (i) an investment fund to another investment fund managed by the same management company, or (ii) a legal entity to any legal entity which, directly or indirectly through one or more entities, controls or is controlled by the seller, or is controlled, directly or indirectly by one or more entities, by a person who controls the seller, directly or indirectly by one or more entities. The fund managed by A Capital Management also made a similar undertaking for a period of 540 calendar days following the settlement/delivery date of the Company s shares. The starting date of all the periods specified in section is 4 July 2014, the settlement/delivery date of the Offering. 62

63 2.2 Internal control Internal control is a system that includes a set of resources, behaviours, procedures and actions adapted to the specific characteristics of each company and the Group taken as a whole, which: contributes to the control of its activities, the effectiveness of its operations and the efficient use of its resources; enables it to take appropriate account of significant risks, whether operational, financial or compliance. Internal control aims to ensure: compliance with laws and regulations; the application of instructions and guidelines set by the executive board; the proper functioning of the internal processes of each company, particularly those contributing to the safeguarding of its assets; the reliability of financial information; the prevention and control of risks identified in relation to the Group s activities; the optimisation of operating activities. However, there are inherent limitations in any internal control system, including uncertainties in the external environment, the exercise of individual judgement or the cost effectiveness of implementing new controls. The summary information on the internal control procedures in place, described in this report, focus on the significant elements liable have an impact on the financial and accounting information published by the Viadeo Group. The rules of internal control implemented within the Group are laid down by the senior management. In particular, they draw on the AMF recommendation dated 9 January 2008 and amended on 22 July 2010 ( Reference framework for risk management and internal control systems for small caps and midcaps ). The Company currently has internal control procedures relative to the reliability of accounting and financial information: To ensure the sustained increase of business activities through organic and external growth, the Company will strengthen its financial and accounting teams in France and abroad, in order to: monitor the financial statements issued by the Group s subsidiaries; strengthen the application of financial and internal control procedures implemented within the Group; speed up the production and analysis of the main performance and control indicators implemented within the framework of monthly reporting. 63

64 The teams at headquarters also supervise and assist with the preparation of financial statements for each of the Group s companies and each business activity. Ad hoc financial audits are conducted at the subsidiaries during the year in order to ensure reliable management forecasts and financial closing. This audit function is currently performed by the Group s administrative and financial director. Likewise, the Company may call on external experts if certain issues (accounting and tax issues, for example) require a particular skill for calculating or selecting the method most suited to presenting the relevant financial information. The Company produces all the financial statements for its French and foreign companies internally. However, the most significant companies (France, China, USA, Russia and Morocco) are assisted by local experts where necessary. IFRS compliance is ensured internally with the support of experts from well-known accounting firms. The main options for closing the parent company (France and abroad) and consolidated financial statements are described and shared with the Statutory Auditors before the financial year end General provisions The Group has a set of measures to control and reduce the risks that may affect the achievement of objectives. These measures come notably in the form of procedures, instructions, means of supervision, authorisations and delegations of authority. The system has deep roots within the Group and covers all of its activities and processes. The internal control system accordingly comprises an integrated framework, the key information being included in Confluence, the knowledge base used by the Group. This base is fuelled by all group services (finance, human resources, IT, products and marketing). Projects are carried out by teams working close to customers in order to provide them with solutions promptly. To help teams respond swiftly and to allow each operational unit to make the necessary decisions, a decentralised organisation is in place within the Group. The table below summarises the main roles expected of each category of players. Actors Management Roles expected in internal control - Initiates and inculcates the internal control system by communicating clearly on it. - Is responsible for its deployment within the Group and its proper operation. - Ensures the adequacy of the internal control system with the Group s strategy and its risks. Operational management Operational and functional staff - Is responsible for its deployment within its scope and its proper operation. - Ensures the alignment of the internal control system with the structure, strategy or tactics, and the organisation of its scope. - Take an active part in the implementation of the internal control system. - Perform activities and operations in compliance with the established internal control system. - Inform management of malfunctions and helps search for corrective measures. Audit Committee - Ensures the existence of a coherent internal control system compatible with the Group s strategy and 64

65 its risks. - Approves the internal audit plan, is regularly informed of audit findings and recommendations implemented. - Ensures the effective operation of the risk management process related to the preparation of financial information. The system is complemented by the intervention of external actors, including the Statutory Auditors. The auditors are not, as part of their legal assignment, stakeholders of the internal control and risk management systems. They review them, and independently form an opinion on their appropriateness. They conduct an annual inspection of the Group as part of their statutory audit of the consolidated financial statements and the separate financial statements of group companies. In accordance with French law on commercial companies, Viadeo s consolidated and separate financial statements are audited by two auditors, which carry out a joint review of all financial statements, procedures for their establishment and certain internal control procedures relating to the preparation of accounting and financial information. The auditors present their observations on the Chairman s report on internal control procedures relating to the preparation and processing of accounting and financial information, and certify the establishment of other information required by law. 65

66 2.2.3 Internal control objectives Internal control at Viadeo is a system that aims to gain reasonable assurance within the Group of the following: compliance with the laws and regulations applicable to the Group s subsidiaries and establishments; the effective application of internal procedures, policies and directives, and best practice set by the Group s general management; the safeguarding of the Group s assets; the reliability and sincerity of the financial and accounting information provided to social bodies and published; the prevention and control of risks identified in relation to the Group s activities; the optimisation of operating activities Components of the internal control system Procedures Budget and management control A framework note laying down the general objectives of the budget is set by the Group s management in September each year in respect of the subsequent fiscal year. The Group s various operating units prepare and present management with their strategy and annual budget in the final quarter. The budget is then presented to and approved by the Board of Directors. An updated budget is established in the course of the second quarter of each year. In the third quarter, au update is provided on the previously defined bases. The monthly analysis of the various key reporting indicators allows the Finance Department to analyse the differences between the implementation and forecasts, exposing any significant errors by crosschecking and analysing various key performance indicators. Consolidation The consolidated financial statements of the Group are prepared in accordance with International Financial Reporting Standards ( IFRS ) from the accounting data prepared under the responsibility of the Group s Finance Department. Particularly significant items are subject to centralised work; as such, regular testing of the value of assets held by the Company, disposals and acquisitions are performed by the Group s Finance Department. 66

67 Accounting The Group s Finance Department coordinates the closing work on accounts and issues instructions to subsidiaries when necessary. It also meets regularly with the Statutory Auditors to present particular and significant operations for the year and the options chosen within the framework of the accounting standards in force. Financing and cash The Group monitors the monthly cash position of each subsidiary in France and internationally. This work also covers cash forecasts and an examination of the main related flows. Investments An investment authorisation procedure is applied to all subsidiaries of the Group and covers all categories of investments. Insurance The list of insurable risks and the policy for covering these risks are controlled by the Group s Finance Department. Communication of results The preparation and validation of media statements and investor presentations concerning the presentation of the Group s results are governed by a specific procedure involving management, the Finance Department, the Strategy Department and the Statutory Auditors Identification, analysis and management of risks Section 1.4 of the management report reviews the main risks to which the Group is exposed. 67

68 action plan The Company intends to continue implementing measures to develop a risk identification and assessment system and associated control procedures. As such, at its meeting of 27 August 2014, the Audit Committee approved the establishment of a disaster recovery plan that would restore the Viadeo Group s central support functions, thereby minimising the impact of a possible disaster on the Group s activity. Under the plan, the Audit Committee has decided that the priority support functions in the event of a disaster recovery procedure are finance, human resources and the commercial back office. The plan subsequently provides for the restoration of IT infrastructures dedicated to other services of the Company. This plan will focus on the following topics: definition of the disaster recovery strategy, priority action to be taken; the scope of critical resources for the functioning of the Company that must be available or restored in the event of a disaster (communications, premises, means of payment); the people strictly necessary for the realisation of the disaster recovery plan; the disaster recovery timetable of the various departments in order to minimise the impact on the Company s activity. The Audit Committee aims to be in a position to present a disaster recovery plan to the Board during fiscal

69 Report of the Statutory Auditors prepared pursuant to Article L of the French Commercial Code on the report of the Chairman of the Board of Viadeo SA for the year ended 31 December 2014 To the shareholders, In our capacity as Statutory Auditors of Viadeo, and pursuant to the provisions of Article L of the French Commercial Code, we hereby report on the report prepared by the Chairman of your Company in accordance with the provisions of Article L of the French Commercial Code in respect of the year ended 31 December The Chairman is required to prepare and submit for approval to the Board of Directors a report describing the internal control and risk management procedures implemented within the Company and providing the other information required by Article L of the French Commercial Code relating notably to corporate governance procedures. It is our responsibility: to provide you with our observations on the information contained in the Chairman s report on internal control and risk management procedures relating to the preparation and processing of accounting and financial information; and to certify that the report includes the other information required by Article L of the French Commercial Code, it being stipulated that it is not our responsibility to verify the fairness of this other information. We conducted our work in accordance with professional standards applicable in France. Information concerning internal control and risk management procedures relating to the preparation and processing of accounting and financial information Professional standards require that we plan and perform the audit to assess the fairness of the information concerning the internal control and risk management procedures relating to the preparation and processing of financial and accounting information contained in the report of your Chairman. These procedures notably include: 69

70 examining the internal control and risk management procedures relating to the preparation and processing of accounting and financial information underlying the information presented in the Chairman s report and the existing documentation; reviewing the work done to prepare this information and existing documentation; determining whether any major deficiencies in internal control relevant to the preparation and processing of accounting and financial information identified in the course of our assignment are properly disclosed in the Chairman s report. Based on our work, we have no comment to make on the information given on the internal control and risk management procedures of the Company relating to the preparation and processing of accounting and financial information as presented in the report of the Chairman of the Board of Directors, established under the provisions of Article L of the French Commercial Code. Other information We certify that the report of the Chairman of the Board of Directors includes the other information required by Article L of the French Commercial Code. Paris and Paris La Défense, 29 April 2015 The Statutory Auditors Grant Thornton French Member of Grant Thornton International KPMG Audit IS Vincent Frambourt Jean-Pierre Valensi 70

71 PART 3 CORPORATE SOCIAL RESPONSIBILITY Report on social, environmental and societal information (Annexe of Part 1 relating to the management report of the Board of Directors) French Law No of 12 July 2010, known as Grenelle II, and its implementing decree published on 24 April 2012 amending Article L of the French Commercial Code set out the mandatory information to be included in the annual management report and introduce the obligation of having the social, environmental and societal information contained therein verified by an independent third party. Pursuant to the decision of the French Accreditation Committee (COFRAC) to prohibit the involvement of a panel of auditors in the performance of the assignment of the independent third party, Grant Thornton was the sole auditor appointed by the Company to proceed with the verification of this information. Given the Company s recent initial public offering, 2014 financial year is the first year for which a report has been prepared on social, environmental and societal information. The Group has mobilised internal resources to collect data so as to provide as complete and coherent a vision as possible of the required information and actions, given its midcap status and its organisation. The provisions of the Grenelle II law provide that if certain information cannot be given or does not appear relevant, the report may mention this, specifying the recommendations of the selected framework and the consultation arrangements. This report was reviewed by the Audit Committee at its meeting of 24 April 2015, prior to the meeting of the Board of Directors, which approved it. 3.1 Methodological note on HR and environmental information Tools used/process for reporting data The workforce is monitored via Cegid Business in France and HRIS in the United States. Training hours and environmental indicators are monitored via Excel files. Timeline The information published below corresponds to a calendar year (from 1 January to 31 December 2014). 71

72 Reporting scope of the report on the social, environmental and societal performance ( CSR report) Unless otherwise stated, the information published below corresponds to entities based in France, the rest of Europe, the United States and Morocco. Work is currently being done to increase the reliability of data in respect of the Tianji group (China). These data have therefore not been included in this report, with the exception of the total workforce. The methodology used for collecting the information included in this report is set out below. The four employees of Sabri SARL are excluded from the HR reporting scope. The Lyon office, consisting of two employees, is not included in the reported environmental data. Definitions of reported data Unless otherwise stated in the report, the items of the CSR report take into account: - Employees: permanent contracts, fixed-term contracts and combined work-study contracts are included in the workforce. People on maternity leave or extended absence are also included. However, trainees and agents are excluded. Employees and their breakdown are shown as of 31 December Entries and departures: the reported data cover all entries and departures in Change from a fixed-term to a permanent contract is not recorded as an entry, as opposed to change from a professional development contract to a permanent contract. - The absenteeism rate is calculated by dividing the total number of hours of absence over the period under review by the number of theoretical hours worked. It takes into account absences due to illness and/or following an accident. Maternity, paternity and parental leave are excluded from the calculation of absenteeism. - Accidents: the calculation is based solely on commuting accidents. No accidents or injuries related to business travel occurred in Days of absence due to illness or an accident: the calculation is expressed in working days. - Training: the reporting scope is the same as for the workforce. Training is conducted in face-toface mode, whether delivered in-house or by external bodies. All hours reported are charged to the training budget. - Greenhouse Gas Emissions (GHG) associated with travel: the reported data cover the entire CSR reporting scope (France, rest of Europe, USA, Morocco). - Energy consumption and GHG emissions related to energy: the reported data correspond to buildings located in France, the US, Morocco, and data centres located in the United States. The emission factors used are those of the ADEME Bilan Carbone v

73 3.2 Social information A) Employment a- Total workforce by type of employment contract as of 31 December December 2014 France United States China Africa Other Europe Permanent Fixed-term Work-study contracts TOTAL As of 31 December 2014, the average age of employees was 33 years (total scope excluding China). > 45 years years years years years < 25 years Femmes Hommes Women Men b- Total workforce and breakdown of employees by gender 31 December 2014 France United States China Africa Other Europe TOTAL Men NA 1 1 TOTAL Women 75 2 NA 2 0 TOTAL NA

74 Over the last two years, the representation of women within the Viadeo Group has tended to increase. The Management Committee had three women members in c- Hires and dismissals 2014 France United States China Africa Other Europe Number of entries 55 4 NA 1 0 Number of departures 91 7 NA 2 2 There were 25 dismissals in 2014 financial year, of which 21 in France, 2 in the USA and 2 in Europe. In accordance with its development plan, Viadeo focused much of its hiring in 2014 on its technical and commercial departments. Staff movements recorded over the same period resulted from the end of the technological transformation dating back to 2013 (migration to a new platform and changes in work methodologies). d- Compensation and career development A new system of variable compensation was implemented at the beginning of 2014 for the whole of the population covered, representing 56% of the workforce. The aim is to harmonise the system within and between departments, and to align employees interests with the Company s results and collective goals. Terms of consideration of items of variable compensation The variable portion of the compensation is divided into three parts: - corporate objectives; - self-management; - individual qualitative and quantitative objectives. During 2014 financial year, a new variable compensation structure was also introduced for commercial employees. In conjunction with this process, the Group introduced pay scales based on expertise and experience, by department, so as to harmonise the compensation policy. Wage increases are individual and consistent, both by category (managers, employees, technicians and supervisors) and between men and women. 74

75 The Group s objective for 2015 is to extend the implementation of items of variable compensation to all employees. Changes in the compensation policy take into account benchmarking studies conducted by the Group. The aim is to retain talent. Working hours In August 2014, Viadeo signed a new agreement on working hours, pursuant to changes in the collective agreement. - employees, technicians and supervisors, and non-autonomous managers: working week of 37 hours plus 10 rest days (RTT) on average; - autonomous managers: package of 218 days worked per year. An agreement on on-call periods has also been in force within the Group since July This agreement determines the hours and terms of compensation for on-call periods, for technical staff in France and the United States. B) Absenteeism Absence The rate of absence amounted to 5.5% in France in 2014, broken down as follows: % sickness/commuting accidents (absenteeism rate); % maternity/paternity leave. In terms of days of absence, this represents a cumulative 1,907 days not worked, all reasons combined. The concept of sick leave is different in the United States. Employees acquire an entitlement of nine sick days per year. They can use these days when they or their children are sick, without needing to present any proof. In 2014, a total of 44 sick days were claimed, or an average of four days per employee. No sick leave was recorded in Morocco or the rest of Europe in

76 C) Robust social dialogue and Company agreements Viadeo aims to maintain proactive and constructive dialogue, notably towards its employees. In accordance with the law, professional elections are held in France every four years. The most recent elections were held on 7 January 2014, and led to the establishment of a works council consisting of eight managerial employees and two non-managerial employees. Ordinary meetings of the works council are held once a month. During these meetings, the works council is informed and consulted on strategic and organisational issues affecting the Group s employees. The quality of the social dialogue led to the signing in 2014 of the collective agreement on the duration and organisation of working time. It is planned to sign an agreement on telework and to extend the gender equality plan in The 7 January 2014 elections also resulted in the appointment of two managerial employees as staff delegates. A monthly meeting is held to discuss individual cases. The Committee on health, safety and working conditions ( HSC ), consisting of one member, meets quarterly. It is involved in the development and implementation of the Group s safety policy. To assess the performance and set objectives for each employee, in accordance with the business strategy, half-yearly individual appraisal interviews are organised within the Group. Lastly, scheduled and/or informal events are regularly held to promote the cohesion and well-being of teams, notably: - All Hands: meetings involving all available employees held once every fortnight. These meetings deal with the operational news of the Viadeo Group in terms of products and marketing, as well as technological developments. - Quarterly Meetings: meetings held to allow Viadeo s management to present the results and strategy of the Group to all employees. They are often accompanied by a theme party or a day of team building to promote cohesion between teams and celebrate success. - Integration Day: Integration Days are held once a month. On average, they bring together 15 new employees from all Viadeo departments around a cooking workshop and a series of presentations made by the members of Viadeo s Executive Committee. Their purpose is to improve understanding of the Group s strategy, its businesses and the role of each department in the structure. At the time of writing, the following agreements were in place within Viadeo: - collective agreement on the duration and organisation of working time; - agreement on on-call payments; 76

77 - action plan on gender equality. Viadeo is currently negotiating an intergenerational agreement, and expects to sign an agreement on teleworking in D) Workplace safety: a priority In collaboration with workplace inspectors, the occupational doctor and the HSC, the Viadeo Group has implemented an action plan to raise employee awareness of the critical issue of safety. To do this, a personalised risk assessment specific to Viadeo has been conducted. Risks are listed in the UORAD (Unique Occupational Risk Assessment Document). This document gives rise to an occupational risk prevention programme run each year, as well as work to improve working conditions in cooperation with the HSC. Viadeo ensures that its premises are equipped to ensure the safety and hygiene essential to all employees, notably in terms of: - cleaning of premises/toilets; - removal of obstructions from common areas, emergency exits and fire escapes, etc.; - verification and regular maintenance of technical and electrical installations; - ventilation/sanitation of premises; - lighting; - heating/air conditioning; - design of workstations (computers, desks, chairs, headsets, etc.); - signing (building plan, emergency exits, fire escapes, etc.); - emergency equipment (first aid box, etc.); - first aid assistance (training, sufficient numbers of first aid officers per floor). In accordance with the safety requirements prevailing in France, the Company conducted two fire drills during the period. Workplace accidents No workplace accidents or occupational diseases were recorded within the Group in E) Training policy undertaken to strengthen the motivation and skills of employees Training is a major challenge for Viadeo. Operating in a highly innovative sector, the Group aims to give each employee the resources necessary to advance within the Group, and to further his or her skills and expertise. In 2014, training expenses totalled 115,295, or 1.05% of the gross payroll. Training efforts broke down as follows: - personal development: 5%; - languages: 6%; 77

78 - management: 34%; - profession: 51%; - safety: 4%. All socio-professional categories within the Group had access to training in 2014: - 72 people were trained, 40% of the average workforce; - 26 women (36% of employees trained); - 46 men (64% of employees trained) Annual Financial Report Only French employees were trained in 2014, as no requests were made by employees in San Francisco or Casablanca. Access to training by category Number of % of average trainees workforce Employees, technicians and supervisors % Managers % 72 40% Breakdown of training conducted in 2014 by field 70% 60% 50% 40% 30% 20% 10% 0% 63% 28% 33% 29% 44% 44% 50% 0% 50% Product development Sales Marketing Finance Mobile 78

79 Number of people trained as a percentage of the total workforce by age bracket in % 70% 60% 50% 40% 30% 20% 10% 0% 74% 10% 13% 0% 4% < 20 years years years years 50 years Number of people trained by seniority in 2014 > 5 years 42% 3 to 5 years 72% 1 to 3 years 38% < 1 year 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 79

80 Breakdown of training conducted in 2014 by field 34% Profession 47% Management Personal development 5% Safety 14% Breakdown of hours of training provided in 2014 by field Breakdown by hours Number of hours Management 1,092 Profession 777 Languages 189 Personal development 45 Safety 31 Total 2,404 80

81 Evaluation of training by employees trained Unsatisfied 0% Not very satisfied 7% Very satisfied 38% Satisfied 55% Employees who were not very satisfied with the training (7% of cases) generally cited the training period (too long) or the excessively theoretical aspect of the training. Strategic thrusts for continuation of the policy of ramping up managers skills (16 people trained in 2013/2014 and 5 new enrolments in 2015 to date); - implementation of training for employees ahead of a functional or geographical transfer in order to assist them in assuming their new position; - continued efforts on training employees in speaking English; - identification and implementation of individual training action for employees (staff development and professional training) to promote adaptation to their jobs and the development of their skills; - refresher courses in fire safety for employees already trained (safety training). 81

82 F) Equal opportunity a- Gender equality Professional equality between men and women represents a major challenge for Viadeo. By way of example, Viadeo s management ensures the representation of women: - the Executive Committee, also known as the Management Committee, comprises three women and seven men; the top management comprises five women and nine men. In total, 29 of the Viadeo Group s 68 managers are women. In 2012, the Group implemented an action plan on gender equality. The goal is to act in several areas: - compensation; - work-life balance. b- Ease of access to work for disabled people The Group currently has one member of staff recognised as a disabled worker. Viadeo has been working regularly with Ezanville, an employer with a majority of employees with a disability, for two years. This collaboration is expected to evolve every year. To encourage access for disabled workers to employment in the Viadeo Group, a partnership with CAP EMPLOI is envisaged in This body will help us identify positions accessible to disabled workers and set out a suitable recruitment process. c- The fight against discrimination In the fight against discrimination, Viadeo complies with the prevailing regulations and conventions, and is committed to providing all of its employees with equal opportunities for recognition and career development, regardless of their origin, sex or religious beliefs. The Group does not tolerate any form of discrimination. It also prohibits any form of discrimination in hiring. Employees are chosen solely on the basis of their studies, professional experience and the quality of the interviews conducted. Viadeo currently has employees from ten nationalities. The Viadeo Group signed a partnership with Passeport Avenir, an NGO committed to fighting social inequality: 82

83 Its purpose is to support young people from poor backgrounds in their post-secondary studies until they obtain their degree, through professional mentoring, in order to combat social inequalities, by mobilising employers and higher education institutions. This partnership will continue and intensify in the coming years. G) Promotion and enforcement of ILO conventions relative to - respect for freedom of association and the right to collective bargaining; - the elimination of discrimination in respect of employment and occupation; - the elimination of forced or compulsory labour; - the effective abolition of child labour. Viadeo complies with the regulations in force in each of its host countries. In Morocco, work contracts are monitored in France, to ensure proper compliance with the ILO Conventions. For China, Viadeo is conducting a review on the subject, in collaboration with its Chinese teams. 3.3 Environmental information A) Overall policy on environmental issues a. Organisation of the Company to take into account environmental issues, if any, assessment or certification processes on environmental matters The Company does not have certification, and has not begun an evaluation process. b. Training and information for employees on environmental protection In early 2014, Viadeo introduced paperless pay slips for employees in France, thereby generating savings in terms of paper for printing and enveloping. This practice also assists the reduction of GHG emissions resulting from the delivery of these documents. This system was already active for employees in the United States. The switch to paperless format, initiated by the Human Resources department, has generated interest among other departments in the Group, which plan to do the same for some of their documents. c. Resources devoted to the prevention of environmental risks and pollution This issue is irrelevant in view of Viadeo s activity. d. Provisions and guarantees for environmental risks, provided that such information is not liable to cause serious prejudice to the Company in ongoing litigation 83

84 No provisions or guarantees were recorded in B) Pollution and waste management a- Prevention, reduction or remediation of emissions to air, water and soil seriously affecting the environment This issue is irrelevant in view of Viadeo s activity. b- Measures promoting the prevention, recycling and disposal of waste As regards the management of electrical and electronic equipment, the Group systematically offers obsolete computer equipment for sale to employees. The internal IT department is currently looking for a provider to scrap, in an ecologically responsible manner, equipment that cannot be reused personally by employees. Data centre waste is obsolete equipment, which Viadeo aims to get rid of through its migration to AWS. For the moment, this equipment is stored in data centres. The Group is studying the possibility of selling the equipment to an IT equipment broker, which will then be able to opt to either repair or recycle it. c- Consideration of noise and other forms of pollution specific to an activity This issue is irrelevant in view of Viadeo s activity. 84

85 C) Sustainable use of resources a- Consumption and supply of water in accordance with local constraints Viadeo s water consumption has two sources: water used in the various premises by employees, and water used for cooling data centres. Water fountains are also available in the Paris and Lyon offices. A total of 15,365 litres was consumed in It is planned to install water fountains in Casablanca and San Francisco. b- Consumption of raw materials and measures to improve efficiency in their use In 2014, Viadeo consumed 327 reams of paper in France. By virtue of its activity, Viadeo mainly works with digital tools. c- Power consumption In 2014, Viadeo consumed 397 MWh of electricity in Paris, 3 MWh in Casablanca and 60 MWh in San Francisco. Energy consumption related to data centres Viadeo s infrastructure is currently hosted in the data centre operated by Hosting.com in San Francisco. It consists of 325 servers and some network equipment, occupying 15 server bays in total. Energy consumption is related to this infrastructure mode. Studies are underway to modify Viadeo s infrastructure. Moreover, the data centres used by Viadeo consumed roughly 450 MWh of energy in d- Land use This issue is irrelevant in view of Viadeo s activity. 85

86 D) Climate change a- Greenhouse gas emissions (GHG) To reduce GHG emissions related to business travel, the Group favours: - conference calls between the Group s various national and international sites; - a business travel policy based on the use of public transport wherever possible. Company cars are reserved exclusively to commercial staff working outside major cities. Total GHG emissions from air travel in 2014 Country Distance Carbon dioxide emissions (kg) Africa 161,712 19,192 France 643,639 85,959 Europe 8, San Francisco 489,841 66,434 UK 385,299 49,326 Total 1,688, ,894 In 2014, Viadeo emitted the equivalent of about 306 tonnes of greenhouse gases related to energy consumption. b- Climate change This issue is irrelevant in view of Viadeo s activity. E) Protection of biodiversity This issue is irrelevant in view of Viadeo s activity. 86

87 3.4 Societal information A) Regional, economic and social impact of the business Viadeo has 9 million professional members in France, and aims to give them the keys to developing their employability, to make them more visible to recruiters, and in that way to equip them exploit new career opportunities. Through various tools, such as the Enterprise Page or Face to Face, Viadeo promotes exchanges between its members, be they job candidates or recruiters. Viadeo is a professional social network, representative of the French labour market. It accordingly operates across the entire country, and nearly 60% of its members are located outside Paris. Large groups and small companies alike are on the network, and can use it to attract future employees to drive the growth of their business. B) Relations with people or organisations with an interest in the Company s activities a- Dialogue with stakeholders Stakeholders taken into account by Viadeo are customers, suppliers, civil society, shareholders, employees, management and the natural and societal environment. Viadeo has set itself the objective of ensuring factual and honest communication with external stakeholders as regards its business, results and financial condition, but also in respect of its environmental, social and societal policies. Viadeo has been listed on the regulated market of Euronext Paris since summer 2014, and the Company complies with the regular disclosure requirements applicable in the capital markets. Lastly, its financial communication is available and consultable on the website: where there is an investors space. b- Partnerships and associations Viadeo has partnered with Passeport Avenir (see 3.2 Social Information fight against discrimination). Viadeo has also partnered with ANIMAFAC, a nationwide NGO that assists students and students in carrying out their charitable projects, promotes commitment in higher education and puts actors of change in contact with each other. 87

88 APEC, a French private body managed jointly by unions and employers, funded by contributions from managerial employees and their employers, whose purpose is to provide services and advice to companies and managerial employees on topics related to the employment of managerial staff and young graduates, signed a partnership with Viadeo in C) Subcontracting and suppliers a- Consideration of social and environmental issues in the purchasing policy At the present time, the Company does not take social or environmental criteria into account in its purchasing contracts. The purchasing department does however plan to review this issue, with the aim of implementing a policy if appropriate. b- Weight of subcontractors and consideration of their social and environmental responsibility in relations with suppliers and subcontractors Viadeo does not make significant use of subcontracting. D) Fair trade practices a- Action taken to prevent corruption The Group complies with the prevailing laws, and ensures that its action is mindful of business ethics and the greatest integrity. Viadeo has not identified any specific risk related to corruption. In 2014, awareness training was conducted on these questions to allow the Group to remain attentive to these issues. For instance, the work contract model has been modified, with the insertion of a new specific clause. b- Measures taken for the health and safety of consumers Members personal data is stored by APVO on its servers, for their processing as the service is used. APVO treats the personal data of members it has collected in accordance with the Safe Harbor Provisions proposed by the Federal Trade Commission and the European Union, to which it adheres. All personal data transmitted by members in connection with the use of the website are collected legally and fairly. Their purpose is the use of the website and the provision of the service, and may be used by APVO for this purpose. In particular, each member is informed that the data may be used by APVO to suggest making contact with other members, selected on the basis of these data; other than those accessible via the public 88

89 profile, the data are not communicated to the members concerned, and are only used by APVO for the above purpose. All members accept this use of their data. The registration form present on the website allows members to enter the website and service by providing APVO with certain personal data concerning them. The mandatory or optional nature of the communication of the data requested is mentioned on the form for each collection field. In cases where the provision of data is mandatory, the absence of their provision will cause the member s registration application not to be processed. APVO does not disclose the personal data of members to third parties, other than the data available on the public profile of each member, in accordance with the settings determined by each member and the purpose of the website and the service, except in cases where the communication of such data is required by the regulations in force, notably at the request of judicial authorities. The personal data provided by members is deleted five years after their last connection to the website or on expiry of the Agreement, at the member s express request. Members have a right of access, rectification and deletion of their personal data processed through the website, and the right to object to the disclosure of such data to third parties for valid reasons. Members may exercise these rights by writing to the following address: [email protected]. However, access may be denied in cases provided by law. Regarding personal information transferred from the European Economic Area, Viadeo has undertaken to treat personal data in compliance with the Safe Harbor Principles. The certificate of conformity with these principles is available on Information collected - Information collected on registration To access the services, members must create an APVO account providing personal information including their name, address, country and a password. Members may also provide additional information such as their biography, geographical location or a photo. This information is displayed publicly. - Internet protocol (IP) address The website uses internet protocol (IP) addresses. An IP address is a number assigned by the internet provider to a computer, allowing the user to access the Internet. Generally, an IP address changes every time the member connects to the internet (such addresses are referred to as dynamic ). However for members using broadband connections, it may be in some cases that the IP address collected or the cookie used includes potentially identifiable information. With some broadband connections, the IP 89

90 address does not change (it is in such cases referred to as static ), and can therefore be associated with the member s personal computer. Viadeo uses the IP address to identify general usage information and to improve the website. - Lists and other public information The APVO services are designed to help members share business information with the rest of the world. Most of the information that members transmit is data that they wish to make public through the website. In most cases, the website s activity requires the information that the member communicates to be made public, but it is possible, where applicable, to maintain some privacy in respect of these data. Public information is disseminated globally and instantaneously. Thus, many search engines can access public information, which are immediately communicated to a wide range of users and services. It is therefore advisable that members take care in selecting the information they wish to make public through APVO. - Session information The servers automatically record information created using the Group s services ( session information ). Session information may include such data as browser type and version, operating system, IP address, referring domain, pages visited and search terms. Other actions, such as clicking on an advertisement, may also be included in the session information. - Cookies Like many other websites, the Group uses cookies to offer services when the member visits the site. Cookies are small alphanumeric files transferred to the hard drive of the computer. They make it possible, for instance, to recognise members without requiring them to enter their login information each time they log on to the site. They also help collect information on the use of the website so as to observe how customers use it, to see how they interact with the services offered by the Group and to understand how to improve internet traffic flows. Most of the services on offer, such as research and consultation lists or public user profiles, do not use cookies. Members may choose to disable the use of cookies by changing the preferences in their browser. In such cases, certain APVO features will not be available. Sharing and transfer of information Viadeo uses personal information to offer several types of services. Viadeo does not and will not disclose personal information to third parties, except in exceptional circumstances as described below: - Consent: Viadeo may share or disclose personal information with members consent, be it express or implied, such as when they access their account via a third-party web client. - Internet service providers: Viadeo uses certain trusted third parties to perform certain operations and provide certain services. Viadeo may communicate personal information to these third parties, but only to the extent necessary for the performance of these operations and the provision of its services, and only in accordance with its obligations, including the protection provided for in this privacy policy. 90

91 - Legal obligations: Viadeo may disclose information, including IP addresses, in order to comply with any law, regulation, court order or other legal request to protect people and property, solve technical problems or protect the rights or property of APVO. - Transfers of activity: Viadeo may also transmit personal information to a third party as part of a sale or transfer of an activity to which this website has linked its information. In such situations, Viadeo would require any beneficiary of the sale or transfer to agree to treat personal information in accordance with this privacy policy. The safeguards provided under this privacy policy would then apply in full to the beneficiary. - Non-private or non-personal information: Viadeo may share or disclose general information, not deemed private or personal, such as the number of users to have clicked on a specific link. Protection of information The sections of the website that collect information use the SSL Internet exchange security protocol. However, to take advantage of this system, members browsers must support encryption protection (available with Internet Explorer versions 3.0 and higher). Policy towards minors Viadeo s services are not targeted at minors (persons under 18 years). If Viadeo becomes aware of personal information being communicated by minors, necessary measures will be taken immediately to remove this information and close the account. Data security Viadeo takes all reasonable steps to protect the information against loss, misuse and unauthorised access, disclosure, modification or unauthorised destruction. The Company has implemented appropriate physical, electronic and managerial procedures to safeguard and secure information against loss, misuse and unauthorised access, disclosure, modification or unauthorised destruction. The Company cannot guarantee the security of information posted on or transmitted via the Internet. Data integrity Viadeo processes the personal information of all people in accordance with the objectives for which it was collected or for which treatment was authorised by that person. To meet these objectives, the Company will, as appropriate, take all reasonable steps to ensure that personal information is accurate, complete, timely and reliable in relation to the intended use. Enforcement Viadeo uses a self-assessment method to ensure compliance with the privacy policy, and periodically verifies that the policy is accurate, comprehensive, i.e. that it covers all relevant information, widely available, properly implemented, accessible and consistent with the Safe Harbor Principles. The Company asks all users to report any concerns using the contact details below. An investigation will be 91

92 conducted to attempt to resolve complaints and disputes regarding the use and disclosure of personal information in accordance with these principles. Viadeo will respond to any formal written complaint sent to this address by contacting the user originating the claim. The Company cooperates with regulatory bodies, including local data protection authorities, to resolve any complaints regarding the transfer of personal data that cannot be resolved directly between Viadeo and the person concerned. Further information Viadeo adheres to the US Safe Harbor Privacy Principles regarding notice, choice, onward transfer, security, data integrity, access and enforcement. Viadeo has also joined the United States Department of Commerce Safe Harbor Program. For further information regarding the privacy policy of the Safe Harbor Framework, please visit the website of the United States Department of Commerce 92

93 E) Other actions taken in favour of human rights The Group did not take other actions in favour of human rights in

94 Report of one of the Statutory Auditors, appointed as an independent third party, on the social, environmental and societal information contained in the consolidated management report To the shareholders, In our capacity as independent third-party assessor, whose accreditation application has been approved by COFRAC under number No , we hereby report on the consolidated social, environmental and societal information for the fiscal year closed on 31 December 2014, included in the management report (hereinafter the CSR Information ), pursuant to Article L of the French Commercial Code. The Company s responsibilities The Board of Directors is responsible for drafting a management report including the CSR Information pursuant to Article R of the French Commercial Code, prepared in accordance with the standards used by the Company (hereinafter the Framework ). A summary of the Framework is included in the management report and is available on request at the Company s headquarters. Independence and quality control Our independence is defined by the applicable regulations, the industry code of ethics and by Article L of the French Commercial Code. We have also established a quality control system that includes documented policies and procedures aimed at ensuring compliance with ethical and professional standards, as well as with the applicable laws and regulations. The Statutory Auditors responsibilities Based on our work, we are responsible for: - certifying that the required CSR Information is included in the management report, or, in case of omission, that an explanation is provided in accordance with the third paragraph of Article R of the French Commercial Code (Certification of inclusion of CSR Information); - providing a moderate assurance that the CSR Information as a whole is presented in a truthful manner in all relevant aspects, in accordance with the Framework (Reasoned opinion on the fairness of the CSR Information). Our work was carried out by a team of three people in April 2015 over a period of approximately ten days. To carry out our work, we relied on the assistance of our CSR experts. 1 Scope available on 94

95 We conducted the work described below in accordance with professional standards applicable in France and the order of 13 May 2013 determining the manner in which the independent third-party assessor conducts its assignment and, as regards the reasoned opinion on the fairness of the information, the international ISAE 3000 standard Certification of inclusion of CSR Information We have reviewed the sustainable development strategy through interviews with the department managers concerned, based on the social and environmental impact connected to the Company s business and its labour commitments and, where applicable, the derived actions or programmes. We have compared the CSR Information in the management report with the list included in Article R of the French Commercial Code. In the event of omission of certain consolidated information, we have ascertained that explanations had been provided in compliance with Article R , paragraph 3, of the French Commercial Code. We have verified that the CSR Information covers the consolidated scope, i.e. the Company and its subsidiaries as defined in Article L , and the companies it controls as defined in Article L of the French Commercial Code, within the limits stated in our note on reporting methods included in the Corporate Social Responsibility section of the management report. Based on this work and taking into account the aforementioned limitations, we certify that the required CSR Information has been included in the management report. 2. Reasoned opinion on the fairness of the CSR Information Nature and scope of work We have conducted interviews with the people responsible for preparing the CSR Information in the departments overseeing data collection and, where required, responsible for internal control and risk management, with a view to: - assessing the appropriateness of the Framework, ensuring that it is pertinent, comprehensive, reliable, neutral, understandable, taking into consideration, where applicable, industry best practice; - checking the implementation of a data collection, compilation, processing and verification procedure in order to ensure that the CSR Information is complete and consistent and to familiarise ourselves with the internal control and risk management procedures for processing CSR Information. We have determined the type and scope of our tests and checks based on the nature and pertinence of the CSR Information in relation to the Company s features, the social and environmental issues linked to its business, its strategies for sustainable development and industry best practice. For the CSR Information that we have deemed most important 3 : 2 ISAE 3000 Assurance engagements other than audits or reviews of historical financial information. 3 Quantitative information: total workforce as of 31 December and breakdown of employees by gender, age and geographical area; hires and dismissals; sustained social dialogue and enterprise agreements; number of employees trained; total hours of training; energy consumption; greenhouse gas emissions. Qualitative information relating to consumers data security. 95

96 - for the parent company, we reviewed the documents and conducted interviews to corroborate the qualitative information (organisation, policies, actions); we implemented analytical procedures on the quantitative information and verified the calculation and consolidation of data through sampling. We also verified their consistency and coherence with the other information included in the management report; - for the representative sample of companies selected 4 based on their business, their contribution to the consolidated indicators, their location and a risk analysis, we conducted interviews in order to verify the correct application of procedures and to identify any omissions. We carried out detailed tests on samples to verify the calculations made and to match the data with the corresponding supporting documentation. The selected sample represents 67% of employees and between 6% and 47% of quantitative environmental data. We have assessed the consistency of the other consolidated CSR Information in relation to our knowledge of the Company. Lastly, we have assessed the appropriateness of the explanations, if any, of the total or partial absence of certain information. We believe that the sampling methods and sample sizes we used based on our professional judgement allow us to provide a conclusion of moderate assurance. A higher level of assurance would have required a more extensive review. Due to the use of sampling techniques and to other limitations inherent to the operation of any information and internal control system, the risk of non-identification of a significant anomaly in the CSR Information cannot be excluded completely. 4 For social information: Viadeo SA and APVO Corporation. For environmental information: Viadeo SA. 96

97 Conclusion Based on our work, we have not identified any significant anomaly liable to call into question the fact that the CSR Information as a whole has been presented truthfully and in accordance with the Framework. Paris, 29 April 2015 One of the Statutory Auditors Grant Thornton French Member of Grant Thornton International Vincent Frambourt Partner 97

98 PART 4 FINANCIAL INFORMATION 4.1 Consolidated financial statements prepared in accordance with IFRS as of 31 December 2014 I. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS 31 December December 2013 Note No. Non-current assets 24,878 23,254 Goodwill 5,781 5,219 3 Intangible assets 9,976 7,827 4 Tangible assets 831 1,287 5 Equity-accounted investments Other non-current financial assets 1,441 1,786 7 Non-current tax receivables 1,565 1,631 7 Deferred tax asset 5,120 5, Current assets 31,518 11,320 Trade and other receivables 6,276 6,191 Other payables and accruals Current tax receivables 60 0 Cash and cash equivalents 24,421 4, Assets held for sale - - TOTAL ASSETS 56,397 34,575 98

99 LIABILITIES 31 December December 2013 Note no. 32,010 10,511 Equity attributable to shareholders of the parent Share capital Share premiums 63,703 44,153 Reserves and retained earnings (31,894) (33,752) 11 Non-controlling interests - - Non-current liabilities 2,505 1,888 Interest-bearing loans 858 1, Provisions Deferred tax liabilities Other long term liabilities Current liabilities 22,500 21,559 Trade and other payables 12,372 10, Interest-bearing loans 756 2, Current provisions Tax liability 1 69 Other current liabilities 8,497 8, TOTAL EQUITY CAPITAL AND LIABILITIES 56,397 34,575 99

100 II. CONSOLIDATED INCOME STATEMENT Consolidated statement of net income In thousands of euros Notes 31 December December 2013 Online subscriptions 13,497 15,793 Recruitment and training services 8,635 8,142 Marketing and advertising services 5,373 4,695 Other income 499 2,105 Income from ordinary activities ,004 30,734 Personnel expenses (17,735) (22,880) 16 External marketing expenses (5,254) (5,242) Other external expenses 17 (8,457) (10,851) Other current expenses and operating income Gross operating surplus (3,247) (7,818) Share-based payments to employees 11 (1,270) (972) Net impairment of current assets 5 94 Amortisation and provisions expenses 19 (5,513) (5,283) Current operating income (10,026) (13,978) Other operating expenses (53) (92) Other operating income - - Non-current operating income 20 (53) (92) Operating income (10,078) (14,070) Financial income 1, Financial expense (3,437) (434) Net Financial income/(expense) 21 (2,245) (236) Share of profit of associates (357) (354) Other income and expenses - - Profit before tax (12,680) (14,660) Tax expense on income 22 (776) 1,539 Result of continuing operations for the year (13,456) (13,121) INCOME FOR THE FINANCIAL YEAR (13,456) (13,121) Attributable to The Company s owners (13,456) (13,121) Non-controlling interests - - Basic earnings per share ( /share) 25 (1.50) (1.66) Diluted earnings per share ( /share) 25 (1.50) (1.66) 100

101 III. Consolidated statement of comprehensive income 2014 Annual Financial Report Consolidated statement of net income and other comprehensive income In thousands of euros 31 December December 2013 Net profit of the consolidated group (13,456) (13,121) Other components of comprehensive income Items which will not subsequently be reclassified to profit and loss (7) 17 Revaluation of the net liability for defined benefit schemes (10) 17 Income taxes relating to items that will not subsequently be reclassified 3 0 Items that may subsequently be reclassified to profit and loss 1,955 (466) Available-for-sale financial assets 440 Exchange differences arising from the translation of foreign operations 1,516 (466) Income taxes relating to items that may subsequently be reclassified - - TOTAL COMPREHENSIVE INCOME FOR THE YEAR (11,508) (13,569) 101

102 IV. STATEMENT OF CHANGES IN EQUITY In thousands of euros Note Capital Share social Reserves and Share premiums consolidated income Treasury shares Currency translation differences Share capital group share Noncontrolling interests Total shareholders equity Situation as of 1 January ,112 (21,490) ,108-23,108 Net income for the period - - (13,121) - (13,121) - (13,121) Change in translation differences, net of tax - (0) (0) (466) (466) - (466) Revaluation of the net liability for defined * 17 benefit schemes Overall profit/loss - (0) (13,103) (466) (13,569) - (13,569) Newly consolidated companies Distribution by the parent company Capital increase Share-based payments Other changes. - (41) 0 (41). (41) Total transactions with the Company s owners 0 0 TOTAL ON 31 December ,153 (33,661) (91) 10,511-10,511 Net income for the period.. (13,456).. (13,456). (13,456) Change in translation differences, net of tax 0. (0). 1,516 1,516. 1,516 Revaluation of the net liability for defined - - (7) - - (7) - (7) benefit schemes Available-for-sale financial assets Overall profit/loss Entry into consolidation scope (13,023) ,516 - (11,508) -. - (11,508) - Distribution by the parent company Capital increase ,200 (387).. 18, ,904 Capital increase through conversion of convertible bonds , ,748-13,748 Purchase/sale of treasury shares (222) (223) Removal of treasury shares held by CBC - - (686) (686) Share-based payments , ,270-1,270 Other changes 0. (8). (0) (8). (8) Total transactions with the Company s 90 19,550 13,588 (223) (0) 33,006-33,006 owners TOTAL as of 31 December ,703 (33,096) (223) 1,425 32,010-32,010 (1) Includes the capital increase related to the IPO of Viadeo SA in the amount of 22,020 thousand ( 26 thousand in share capital and 21,994 thousand in share premiums). In accordance with IAS 32, the costs relating to the IPO were offset against the share premium and reserves in the amount of 3,319 thousand. 102

103 V. STATEMENT OF CASH FLOWS In euro thousands 31 December 31 December Net income for the period (13,456) (13,121) Adjustments for: - Depreciation, amortisation and provisions (excluding those related to current 5,044 5,034 assets) Elimination of income from disposals and dilution gains and losses Income and expenses calculated for share-based payments 1, Actuarial gains and losses 7 11 Gains and losses related to fair value 3,082 - Share in net income + impairment of investments in associated companies Other income and expenses with no impact on cash flow (0) (0) Cash flow after net financial income and tax on continuing operations (3,192) (6,446) Cost of net financial debt Income tax expense (including deferred tax) 776 (1,539) Cash flow before net financial income and tax on continuing operations (2,276) (7,946) Tax paid (359) (244) Change in working capital from operations 677 (222) Net change in operating cash and cash equivalents for continuing (1,959) (8,413) operations Net cash flow from/(used by) investing activities for discontinued operations - I - NET CASH FLOW FROM OPERATING ACTIVITIES (1,959) (8,413) Acquisition of property, plant and equipment (212) (875) Acquisition of intangible assets (4,894) (5,126) Acquisition of financial assets (712) (751) Proceeds from disposals of property, plant and equipment and intangible assets 6 3 Disposal of or reduction in financial assets Impact of changes in the scope of consolidation (83) (11) Net cash flow from investing activities for continuing operations (5,401) (6,739) Net cash flow from/(used by) investing activities for discontinued operations - II NET CASH FLOW RELATED TO INVESTING ACTIVITIES (5,401) (6,739) Capital increase 18, Purchase/sale of treasury shares (223) Dividends paid - - New borrowings (1) 11,101 2,132 Loan repayment (including (1) finance lease agreements) (2,537) (574) Net financial interest paid (including finance lease agreements) (23) (39) Net change in financing cash flow for continuing operations 27,222 1,561 Net cash flow from/(used by) financing activities for discontinued operations - III NET CASH FLOW RELATED TO FINANCING ACTIVITIES 27,222 1,561 CHANGE IN NET CASH (I) + (II) + (III) 19,863 (13,590) Cash at beginning of period (including divested or discontinued operations) ,188 Impact of changes in foreign exchange rates 43 (86) Change in continuing operations 19,863 (13,590) Net cash flow from/(used in) discontinued operations - - CASH AND CASH EQUIVALENTS AT END OF YEAR 24, of which cash flow from continuing activities 24, of which cash flow from divested or discontinued operations - (1) For more details, see 12.1 Bonds p

104 Detail of cash and cash equivalents at the end of the year: In thousands of euros 31 December December 2013 Cash & cash equivalents 5,421 3,485 Investment securities 19,000 1,031 Bank overdrafts (cash liability) (3) (3) Total net cash 24,417 4,

105 NOTES TO THE FINANCIAL STATEMENTS (Unless otherwise indicated, the amounts stated in this appended note are in thousands of euros). Table of contents I. CONSOLIDATED STATEMENT OF FINANCIAL POSITION II. CONSOLIDATED INCOME STATEMENT III. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IV. STATEMENT OF CHANGES IN EQUITY V. STATEMENT OF CASH FLOWS Note 1: Presentation of activities and highlights Information about the Company and its business Highlights Events occurring subsequent to year-end Note 2: Accounting method and principles for drawing up the consolidated accounts Basis for drawing up the accounts Changes of method Use of judgements and estimates Scope and consolidation methods Business combinations Functional and presentation currency Foreign currency Distinction between current and non-current Intangible assets Property, plant and equipment Financial assets Recoverable amount of non-current assets Cash, cash equivalents and financial instruments Fair value of financial instruments Government grants Receivables Equity

106 2.18 Share based payments Provisions Employee benefits Financial liabilities Recognition of revenue Corporation tax Segment information Geographical information Presentation of the consolidated income statement Earnings per share Note 3: Goodwill Note 4: Other intangible assets Note 5: Tangible assets Note 6: Investments in associates Joint ventures Other investments in associates Note 7: Other financial assets and other non-current asset s 7.1. Other financial assets Non-recurring tax receivables Note 8: Trade and other receivable Trade and other receivable s 8.2 Transfer of financial assets Other receivables and accrual s Note 9: Cash, cash equivalents and current financial instruments Cash and cash equivalents Note 10: Financial assets and liabilities and their effects on profit or loss Note 11: Share capital Share capital issued Warrants and stock options Note 12: Loans and other financial liabilities Bonds OSEO Advances COFACE advances

107 Note 13: Provision Employee benefits Provision Note 14: Trade and other payables Trade and other payables Note 15: Other current and non-current liabilities Note 16: Staff and staffing costs Note 17: Other external expense s Note 18: Other recurring operating income and expenses Note 19: Depreciation, amortisation and provisions Note 20: Non-recurring operating income Note 21: Financial profit or loss Note 22: Corporation tax Note 23: Off-balance sheet commitments Operating lease obligation Pledges and other security interests Other off-balance sheet commitments Note 24: Relationship with related parties Compensation for executives and senior managers Transactions with related parties Note 25: Earnings per share Note 26: Management of financial risks Note 27: Statutory Auditors fees Note 28: Group scope of consolidation

108 Note 1: Presentation of activities and highlights 1.1 Information about the Company and its business The Viadeo Group owns and manages professional social networks consisting of nearly 55 million members worldwide. The Group was founded in 2004 by Dan Serfaty and Thierry Lunati, and is currently structured around two brands: Viadeo in the international market and Tianji in China. Its business consists of making tools and social networks available to professionals to improve their career prospects, seek business opportunities, find new contacts and create effective online identifies. The Group s activity generates three sources of income: premium subscriptions sold to professionals (Online Subscriptions, or OS), recruitment tools and services sold to corporate clients (Hiring Solutions), and advertising space and marketing services sold to corporate clients (Marketing Solutions). 1.2 Highlights January 2014: issue of a 5 million convertible bond subscribed by certain Company shareholders, namely the two founders (Thierry Lunati and Dan Serfaty), Ventech, Idinvest Partners, Bpifrance Participations, Angyal, TMM Consulting, Global Internet Ventures LLC and Financière WM. These convertible bonds may be converted into shares on the date of the initial listing of the Company s shares. February 2014: issue of a 0.5 million convertible bond in favour of an investor who is a natural person. These convertible bonds may be converted into shares on the date of the initial listing of the Company s shares. February 2014: appointment by the Board of Directors of Dan Serfaty as Chairman and Chief Executive Officer of Viadeo SA and Thierry Lunati as Deputy Chief Executive Officer of Viadeo SA. May 2014: issue of a 5 million convertible bond in favour of a new investor, A Capital. These convertible bonds may be converted into shares on the date of the initial listing of the Company s shares. May 2014: appointment of A Capital Switch as a member of the Board of Viadeo SA. May 2014: registration by Viadeo of its document de base issued in support of its initial public offering on the regulated market of Euronext Paris Compartment B. June 2014: grant of the AMF visa on the prospectus relating to the IPO. 108

109 July 2014: completion by the Company of the issue of 1,287,737 new shares as part of an Open Price Offer (OPO), the settlement/delivery of which took place on 4 July The Company s shares were admitted to trading on compartment B of the regulated market of Euronext Paris under the ISIN code FR and the mnemonic VIAD on 7 July The price of the Open Price Offer and global placement was set at per share (par value of 0.02 and premium of 17.08). July 2014: immediately prior to the initial listing of the shares of the Company (i.e. on 4 July 2014), convertible bonds in the amount of 10.7 million (par value and accrued interest) were converted into 831,691 new shares (based on the offer price less a discount of 25%), increasing the Company s share capital in the same amount. The conversion covered 105,500 bonds converted into 831,691 new shares at an issue price of per share (par value of 0.02 and premium of 12.81). The two aforementioned transactions, namely the conversion of convertible bonds and the IPO, resulted in capital increases worth a total of 42,389 in par value and 32,648,510 in share premiums. July 2014: implementation of a liquidity agreement with Invest Securities. The contract came into effect on 24 July 2014 for a period of 12 months. Its purpose is to facilitate trading in Viadeo shares in accordance with the Charter of Ethics of the AMAFI, recognised by the Autorité des Marchés Financiers. The resources made available under this contract and credited to the liquidity account amounted to 300,000 (three hundred thousand euros) in cash. As of 31 December 2014, the liquidity account contained the following assets: - 25,619 Viadeo shares - 77, September and December 2014: signature of two amendments relating to the lease agreement of 14 March 2013 with La Mondiale to enable the Company to return ahead of schedule the vacant premises located on the third and fourth floors of the building located at 65 rue de la Victoire, Paris. August 2014: resignation of Derek Ling and William Johnston from their positions as director, effective on 6 August 2014 and 27 August 2014 respectively. December 2014: finalisation of the liquidation of Soocial BV on 31 December Warrants were exercised as follows in 2014 financial year: 7,428, 13,140 and 4,338 under the BCE 02, BCE 03 and BCE 04 plans respectively. This resulted in a capital increase of in par value and 202, in share premiums. 109

110 1.3 Events occurring subsequent to year-end In Russia, following the decision of our partner Sanoma to withdraw from the area, a change in the ownership of the share capital of our Russian subsidiary Viadeo Independent Media LLC ( VIM LLC ) is expected in the first half of On 3 April 2015, the Group, which aims to continue its development in Russia, signed a Share Purchase Agreement (SPA) on the 50% of our subsidiary Viadeo Independent Media BV ( VIM BV ) previously held by Independent Media Holding BV, with a view to selling the shares in turn to a Russian partner in order to maintain a local presence considered essential to the success of operations in this area. Pursuant to the SPA, the conditions precedent having been lifted, the transaction will be finalised in May As requested by the Board of Directors of Viadeo SA, the Company has appointed BNY Mellon as custodian bank and Jones Day as legal counsel to launch an ADR programme (level 1) in the United States. The approval of the SEC was obtained on 27 April 2015, and the programme is now effective. 110

111 Note 2: Accounting method and principles for drawing up the consolidated accounts Amounts in the financial statements are in thousands of euros unless otherwise indicated. 2.1 Basis for drawing up the accounts Statement of compliance Viadeo SA has prepared its consolidated financial statements, which have been authorised by the Board of Directors on 24 April 2015, in accordance with the standards and interpretations published by the International Accounting Standards Board (IASB) and adopted by the European Union on the date of preparation of the consolidated financial statements for all the periods presented. These standards, available on the European Commission s website (1), incorporate international accounting standards (IAS and IFRS) and the interpretations issued by the Standing Interpretations Committee (SIC) and the International Financial Interpretations Committee (IFRIC). (1) ( The accounting policies and options used by the Group are described below. In certain cases, IFRS give a choice between a benchmark treatment and an allowed alternative treatment. Basis of preparation of the financial statements The Group consolidated accounts were drawn up on the basis of historical cost, except for certain types of assets and liabilities, in accordance with IFRS requirements. The asset types in question are mentioned in the notes that follow. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether this price is directly observable or estimated using another valuation technique. When measuring the fair value of an asset or liability, the Group considers the characteristics of the asset or liability if market participants are likely to do so when pricing the asset or liability at the measurement date. For measurement purposes or purposes of providing information in these consolidated financial statements, fair value is determined on this basis, except for share-based payment transactions under the scope of application of IFRS 2, rental operations under the scope of application of IAS 17, and measurements similar but not equivalent to fair value, such as value in use under IAS

112 Standards and interpretations applied The accounting policies applied are consistent with those used in preparing the consolidated financial statements for the year ended 31 December 2013, except for new standards, revised standards and interpretations applicable for fiscal years beginning on or after 1 January 2014, and which had not been applied early by the Group: Amendment to IAS 32 Financial Instruments: Presentation adopted by the European Union on 29 December This standard aims to clarify the conditions for applying the offsetting criteria for financial assets and liabilities laid down in section 42 of IAS 32, specifying the notion of the current legally enforceable right to offset the amounts recognised and the circumstances in which some gross settlements may be equivalent to net settlements. The application of this standard had no impact on the financial statements for the year ended 31 December Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets issued by the IASB on 29 May 2013 and adopted by the European Union on 19 December The application of this standard had no impact on the financial statements for the year ended 31 December Amendments to IAS 39 and IFRS 9 Novation of Derivatives and Continuation of Hedge Accounting issued by the IASB on 27 June 2013 and adopted by the European Union on 19 December The application of this standard had no impact on the financial statements for the year ended 31 December Amendments to IFRS 10 Consolidated Financial Statements issued by the IASB on 12 May 2011 and adopted by the European Union on 29 December This standard was applied in the financial statements for the year ended 31 December IFRS 11 Joint Arrangements published by the IASB on 12 May 2011 and adopted by the European Union on 29 December This standard introduces a distinction between joint operations and joint ventures and imposes a single accounting method for the latter, namely the equity method, by eliminating the option for proportionate consolidation. The mandatory effective date of IFRS 11 Consolidated Financial Statements is set by the European Union as 1 January This standard was applied in the financial statements for the year ended 31 December 2014 and for the comparative periods. The impacts of this change of accounting method are described in Note 2.2. IFRS 12 Disclosure of Interests in Other Entities issued by the IASB on 12 May 2011 and adopted by the European Union on 29 December The objective of IFRS 12 is to require disclosures allowing users of financial statements to evaluate the basis of control, any restrictions on consolidated assets and liabilities, exposure to risks arising from interests in unconsolidated structured entities and the participation of non-controlling interests in the activities of the consolidated entities. The mandatory effective date of IFRS 12 is set by the European Union as 1 January The application of this standard had no impact on the financial statements for the year ended 31 December Amendments on the transitional provisions of IFRS 10, 11 and 12 Consolidated Financial Statements, Partnerships and Disclosure of Interests in Other Entities: Transitional Provisions published by the IASB on 28 June 2012 and adopted by the European Union on 4 April The application of this standard had no impact on the financial statements for the year ended 31 December

113 Investment entities: amendments to IFRS 10, IFRS 12 and IAS 27 Consolidated Financial Statements, Disclosure of Interests in Other Entities, Separate Financial Statements published by the IASB on 31 October 2012 and adopted by the European Union on 20 November The application of this standard had no impact on the financial statements for the year ended 31 December None of these standards, interpretations or amendments was applied early. The Group continues to conduct analysis on the practical consequences of new standards and the effects of applying them in the financial statements. They include: IFRIC 21 Levies issued by the IASB on 20 May 2013 and adopted by the European Union on 13 June This interpretation is mandatory for fiscal years starting on or after 1 January Changes of method The impacts identified result from the implementation of IFRS 10 and IFRS 11 relative to the consolidated financial statements, and particularly the consolidation by the equity method of joint arrangements in which the Group has an interest, previously consolidated by the proportionate consolidation method. The only joint venture affected by this change of method is the subgroup consisting of Viadeo Independent Media BV and Viadeo Independent Media LLC, two companies jointly owned by the Group and a partner, which since 1 January 2014 have been consolidated by the equity method. The comparative data for 2013 financial year have been restated in the summary tables, as well as in all of the notes. 113

114 The impacts on the consolidated statement of financial position as of 31 December 2013 are as follows: ASSETS 31 December 2013 published Impact of the application of IFRS 10/11 31 December 2013 restated Non-current assets 233, ,254 Goodwill 5,219-5,219 Intangible assets 7,827 (0) 7,827 Tangible assets 1,287-1,287 Equity-accounted investments Other non-current financial assets 1,786-1,786 Non-current tax receivables 1,631-1,631 Deferred tax assets 5,460 (123) 5,338 Current assets 11,435 (114) 11,320 Trade and other receivables 6,223 (33) 6,191 Other receivables and accruals 614 (0) 614 Current tax receivables 0-0 Cash and cash equivalents 4,597 (82) 4,516 TOTAL ASSETS 34,645 (70) 34,575 Opening cash in the statement of cash flows is impacted in the negative amount of 82 thousand by the consolidation by the equity method of Viadeo Independent Media BV and Viadeo Independent Media LLC. LIABILITIES 31 December 2013 published Impact of the application of IFRS 10/11 31 December 2013 restated Equity attributable to shareholders of the parent company 10,511-10,511 Share capital Share premiums 44,153-44,153 Reserves and retained earnings (33,752) - (33,752) Non-controlling interests Non-current liabilities 2,506 (1) 2,565 Interest-bearing loans 1,072-1,072 Provisions 330 (1) 329 Deferred tax liabilities 312 (0) 311 Other long term liabilities Current liabilities 21,628 (69) 21,559 Trade and other payables 10,282 (64) 10,219 Interest-bearing loans 2,473-2,473 Current provisions Tax liability 69 (1) 69 Other current liabilities 8,129 (5) 8,124 TOTAL EQUITY CAPITAL AND LIABILITIES 34,645 (70) 34,

115 Data relative to the opening balance sheet indicated in the notes take into account the effects of the implementation of IFRS 10 and IFRS 11. Consolidated statement of net income In thousands of euros 31 December Reclassification within Impact of the 31 December 2013 the categories of application of IFRS 2013 restated published services 10/11 Online subscriptions 15,793-15,793 Recruitment and training services 3,312 (670) 0 3,142 Marketing and advertising services 1,953 (263) 1,695 Other income 1, ,105 Revenue from ordinary activities 30,917 - (133) 30,731 Personnel expenses (23,171) 291 (22,333) External marketing expenses (5,113) 171 (5,212) Other external expenses (11,039) 153 (10,851) Other current expenses and operating income Gross operating surplus (8,291) (7,813) (972) * (972) Share-based payments reserved for staff Net impairment of current assets Amortization and provisions expenses (5,231) 1 (5,233) Recurring operating income (11,121) * 446 (13,978) (92) - (92) Other operating expenses Other operating income Non-current operating income (92) - - (92) Operating income (11516) 446 (11,070) Financial income 210 (11) 193 Financial expense (139) 5 (431) Financial income (229) (7) (236) Share of profit of associates Other income and expenses - (354) (354) Profit/loss before tax (14,715) 85 (14,660) Tax expense on income 1,621 (35) 1,539 Result of continuing operations for the year (13,121) (0) (13,121) INCOME FOR THE FINANCIAL YEAR (13,121) (0) (13,121) The impacts of changes in method on the consolidated income statement for 2013 financial year include: - the application of IFRS 10 and IFRS 11; - a reclassification within categories of revenue aimed at isolating a non-recurring transaction in the amount of 670 thousand, previously recorded under Recruitment and Training services and reclassifying it to Other income. 115

116 In euro thousands 31 December 2013 published Impact of the application of IFRS 10/11 31 December 2013 restated Net income for the period (13,121) - (13,121) Adjustments for: - Depreciation, amortisation and provisions (excluding those related to current 5,035 (1) 5,034 assets) Elimination of income from disposals and dilution gains and losses Income and expenses calculated for share-based payments Actuarial gains and losses Gains and losses related to fair value - - Share in net income + impairment of investments in associated companies Other income and expenses with no impact on cash flow (0) 0 (0) Cash flow after net financial income and tax on continuing operations (6,798) 353 (6,446) Cost of net financial debt Income tax expense (including deferred tax) (1,624) 85 (1,539) Cash flow before net financial income and tax on continuing operations (8,384) 439 (7,946) Tax paid (244) - (244) Change in working capital from operations (188) (35) (222) Net change in operating cash and cash equivalents for continuing (8,817) 404 (8,413) operations Net cash flow used by investing activities for discontinued operations - I - NET CASH FLOW FROM OPERATING ACTIVITIES (8,817) 404 (8,413) Acquisition of property, plant and equipment (875) - (875) Acquisition of intangible assets (5,126) 0 (5,126) Acquisition of financial assets (337) (414) (751) Proceeds from disposals of property, plant and equipment and intangible 3-3 assets Disposal of or reduction in financial assets 21 (0) 21 Impact of changes in the scope of consolidation (11) - (11) Net cash flow from investing activities for continuing operations (6,325) (413) (6,739) Net cash flow from/(used by) investing activities for discontinued operations - II NET CASH FLOW RELATED TO INVESTING ACTIVITIES (6,325) (413) (6,739) Capital increase Purchase/sale of treasury shares - Dividends paid - New loans 2,132-2,132 Loan repayment (including finance lease agreements) (574) - (574) Net financial interest paid (including finance lease agreements) (39) - (39) Net change in financing cash flow for continuing operations 1,561 (0) 1,561 Net cash flow from/(used by) financing activities for discontinued operations - III NET CASH FLOW RELATED TO FINANCING ACTIVITIES 1,561 (0) 1,561 CHANGE IN NET CASH (I) + (II) + (III) (13,581) (9) (13,590) Cash at beginning of period (including divested or discontinued operations) 18,268 (80) 18,188 Impact of changes in foreign exchange rates (94) 8 (86) Change in continuing operations (13,581) (9) (13,590) Net cash flow from/(used in) discontinued operations - - CASH AND CASH EQUIVALENTS AT END OF YEAR 4,593 (82) 4,512 of which cash flow from continuing activities 4,593 (82) 4,512 of which cash flow from divested or discontinued operations 116

117 2.3 Use of judgements and estimates To prepare financial statements in accordance with IFRS, estimates, opinions and assumptions were made by Group Management; they could have affected the reported amounts of assets and liabilities, contingent liabilities at the date of preparing the financial statements, and the reported amounts of income and expenses for the financial year. These estimates were made on a going concern basis and on the basis of the information available at the time. They are assessed continuously based on past experience and various other factors deemed to be reasonable, which represent the basis for assessing the carrying amount of assets and liabilities. The estimates may be revised if the circumstances on which they are based change or if new information arises. Actual results may differ greatly from these estimates based on assumptions or different conditions. The main estimates and assumptions used concern the assessment of the following items: the intangible nature of and amortization period for intangible assets regarding capitalised research and development projects; compensation based on equity instruments: assumptions used to measure the value of these instruments and the corresponding cost, updated annually; goodwill: yearly assumptions within the context of loss of value tests with particular respect to determining cash-generating Units (CGU), future cash flows and discount rates; deferred taxes, in particular deferred tax assets relating to losses that may be carried forward; assessment of provisions. 2.4 Scope and consolidation methods Subsidiaries The companies controlled by the Group are consolidated. Control is defined as the direct or indirect power to determine the financial and operating policy of a company in order to benefit from its activities. In order to assess control, potential voting rights that can currently be exercised are taken into consideration. The individual financial statements of subsidiaries are included in the consolidated financial statements starting from the date on which control is obtained and ending on the date when control ceases. Holdings in associates and joint ventures An associate is an entity over which the Group exercises significant influence. Considerable influence is defined as the power to participate in the financial and operational policy-making of an issuing entity without however having control or joint control over policy. A joint venture is a partnership in which the parties exercising joint control over the venture have rights on its net assets. Joint control is taken to mean the agreed contractual sharing of control over a company that only exists when decisions concerning relevant activities require the unanimous consent of the parties sharing control. 117

118 The profit and loss and the assets and liabilities of joint ventures were recognised in the present consolidated financial statements using the proportional consolidation method. Items composing the assets and the profit and loss of joint ventures were recognised in proportion to the representative fraction of the holding of the Company owning the securities without establishing the existence of any direct minority interests. Transactions eliminated from the consolidated financial statements Balance sheet balances, and income and expenses resulting from intra-group transactions are eliminated in the preparation of the consolidated financial statements. Reciprocal loans and debts and reciprocal income and expenditure for proportionally consolidated joint ventures were eliminated according to the joint venture s percentage of consolidation. 2.5 Business combinations Business combinations are recognised using the acquisition method. According to this method, in the first-time consolidation of an entity over which the Group acquires control: the identifiable assets acquired and liabilities assumed are measured at fair value on the date on which control is obtained, non-controlling interests are measured either at fair value, or at their share of the net identifiable assets of the acquiree. This option is available on a case-by-case basis for each acquisition. Goodwill is measured as the positive difference between the sum of (i) the value of the consideration transferred plus (ii) the value of any non-controlling interest in the acquiree plus (iii) the fair value of the acquirer s previously held interest in the acquiree (if applicable) over the net balance of the identifiable assets acquired and the liabilities assumed on the acquisition date. If, after remeasurement, the acquisition-date net balance of the identifiable assets acquired and liabilities assumed is greater than the sum of (i) the value of the consideration transferred plus (ii) the value of any non-controlling interest in the acquiree plus (iii) the fair value of the acquirer s previously held interest in the acquiree (if applicable), the difference is recognised immediately as net profit on an acquisition under favourable conditions. Other types of non-controlling interest must be measured at fair value or, if applicable, according to the provisions of another IFRS. In a business combination achieved in stages, the Group policy is to remeasure its previous interest in the acquiree at its acquisition date fair value and recognise the resulting gain or loss, if any, in profit or loss. Acquisition-related costs and their recognition must be finalised within a twelve-month period from the acquisition date. 118

119 Goodwill is then measured at its initial value minus the total losses of value where applicable. 2.6 Functional and presentation currency The Group consolidated financial statements are prepared in euros, which is the functional and presentation currency of the Company. 2.7 Foreign currency Foreign currency transactions were converted into the respective functional currencies of the Company s entities by applying the current exchange rate on the transaction dates. Monetary assets and liabilities denominated in foreign currency at year-end were converted into the functional currency using the exchange rate on that date. Foreign exchange gains and losses resulting from the conversion of monetary instruments correspond to the difference between (i) depreciated cost denominated in the functional currency at the opening of the period, adjusted for the effective interest rate and payments over the period, and (ii) depreciated cost denominated in the foreign currency converted at the rate of exchange at year-end. Non-monetary assets and liabilities denominated in foreign currency measured at value were converted into the functional currency using the current exchange rate on the fair value measurement date. Foreign currency differences arising on these translations are recognised in profit or loss, except for differences resulting from the conversion of available-for-sale equity instruments, a financial liability designated as a hedging instrument of a net investment in a foreign operation, or a cash flow hedging instrument recognised directly as equity. 2.8 Distinction between current and non-current In its balance sheet, the Group makes a distinction between current and non-current assets and liabilities. The distinction between current and non-current items is made according to the following rules: assets and liabilities making up working capital requirements within the normal business cycle are classified as current ; assets and liabilities outside the normal business cycle are presented as either current or noncurrent depending on whether their maturity is for more or less than one year, or in accordance with specific cases covered in IAS Intangible assets Goodwill Goodwill acquired from a business combination was recognised at the cost established on the acquisition date (see Note 2.4 above) minus total losses of value, if any. For the purpose of impairment testing, goodwill is allocated to each of the Group s cash-generating units or groups of cash-generating units expected to benefit from the synergies of the combination. 119

120 Cash-generating units to which goodwill is allocated are subject to an annual impairment test, or more frequently if there is any indication that a given unit may have suffered an impairment loss. The recoverable amount is determined using the following method: Five years of estimated future cash flows were included in the discounted cash flow model before taking a terminal value into account. If the recoverable amount of a given cash-generating unit is less than its carrying amount, the impairment loss is first recognised as a reduction in the carrying amount of any goodwill allocated to the unit and is then allocated to the unit s other assets in proportion to the carrying amount of each of the unit s assets. Any impairment loss involving goodwill is recognised directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods. On disposal of a cash-generating unit, the resulting goodwill is included when determining the net income from the sale. Separately acquired intangible assets Separately acquired intangible assets with a finite useful life were recognised at cost minus accumulated amortisation and total losses of value. Amortisation was recognised using the straight-line method over the estimated useful life of the asset. Estimated useful lives and amortisation methods are reviewed at the end of each financial information presentation period and any estimate changes are recorded as forecasts. Separately acquired intangible assets with an indefinite useful life were recognised at cost minus accumulated amortisation and total losses of value. Internally generated intangible assets Research and development costs Research costs were expensed for the period in which they were incurred. An intangible asset generated internally from development (or the development phase of an internal project) is recognised if, and only if, all of the following can be demonstrated: the technical feasibility of completing the intangible asset so that it can be used or sold; the intention to complete the intangible asset and use it or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate probable future economic benefits; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; the ability to measure reliably the expenditure attributable to the intangible asset during its development. The initial cost of an internally generated intangible asset was recognised as the sum of expenditure incurred from the date when the intangible asset first met the recognition criteria listed above. When no internally generated intangible asset could be recognised, development costs were recognised in net profit or loss for the period in which they were incurred. After initial recognition, internally generated intangible assets were recognised at cost minus accumulated amortisation and total losses of value using the same method as for separately acquired intangible assets. 120

121 These primarily concern internal development costs of professional networking platforms (websites) and software. Viadeo Group has two main professional networking platforms: the Tianji platform accessible exclusively in China, the Viadeo platform accessible everywhere except in China. The latter in particular is widely used in Europe (including Russia) and in Africa. These two platforms are distinct both technically (different location of technical and human resources) and economically with different levels of market maturity; this is especially the case in China (Tianji platform), where the Group considers that the criteria for capitalising the development costs associated with the website were not satisfied before 31 December During 2014 fiscal year, the criteria for capitalising development costs associated with the Tianji platform were satisfied, in particular those relating to future economic benefits. Accordingly, the Group capitalised 1,314 thousand in respect of 2013 financial year and 1,336 thousand in respect of 2014 financial year. 121

122 Amortisation period and expense Amortisation was recognised using the following method: Method Period Internally developed platforms Software acquired Straight-line 3 years Straight-line 1 to 5 years 2.10 Property, plant and equipment Tangible assets were recorded at their acquisition cost or at factory cost. They were subsequently measured at cost minus accumulated depreciation and any loss of value. Depreciation was calculated using the straight line method according to estimated useful lives and taking residual values into account where applicable: Method Period General facilities and fixtures Transport equipment Office and computer equipment Furnishings Straight-line 5 years Straight-line 5 years Straight-line 3 years Straight-line 5 years Residual values, useful lives and asset depreciation methods were reviewed and amended as necessary at each annual closing of accounts. Such changes were recorded as changes in estimates in accordance with IAS 8. A tangible asset was derecognised on disposal if no future economic advantage was expected from its continued use. Any profit or loss resulting from the disposal or discontinued use of a tangible asset, corresponding to the difference between the proceeds from its disposal and its carrying amount, was recognised in profit or loss. Assets held under finance leases Assets held under finance leases are initially recognised as Group assets measured at fair value at the starting date of the lease or, if the fair value is lower, at the present value of minimum payments due under the lease. The corresponding liability to be paid to the lessor was recognised in the consolidated statement of financial position as a debt resulting from a finance lease. Rental payments were broken down between financing costs and depreciation of the debt resulting from the finance lease so as to obtain a constant rate of interest on the balance outstanding on the liability. Financing costs were recognised directly in profit and loss. 122

123 Assets rented under finance leases are depreciated over their estimated useful life using the same method as for assets held. However, when there is no reasonable certainty that ownership will be acquired at the end of the lease, the assets must be depreciated over whichever is the shorter period: the lease duration or the useful life Financial assets The Group s financial assets are classified by type and availability for sale: financial assets measured at fair value in profit or loss; investments available for sale recognised at fair value; investments held until their maturity date; loans and receivables. Except for assets measured at fair value in profit or loss, all financial assets were initially recognised at cost, i.e. the fair value of the price paid plus acquisition costs. Standardised purchases and sales of financial assets were recognised at their settlement date. Financial assets measured at fair value in profit or loss These are assets held for transaction purposes, i.e. assets acquired by the Company with the aim of disposing of them in the short term. They were measured at fair value; changes in fair value were recognised in profit or loss. Certain assets may also be voluntarily classified under this category. Transaction costs that could be directly allocated thereto were recognised in profit or loss when incurred. Investments available for sale recognised at fair value Available-for-sale financial assets are non-derivative financial assets that are available for sale or that are not classified as a) loans and receivables, b) investments held until maturity, or c) financial assets measured at fair value in profit or loss. Assets available for sale were measured at fair value; any change in profit or loss was recorded under other comprehensive income, except for losses of value and exchange differences (in the case of loan instruments). Investments in available-for-sale equity instruments that were not listed on an active market and whose fair value could not be measured reliably were measured at cost minus losses in value identified at the end of each financial information presentation period. Loans and receivables This category includes other loans and receivables and trade receivables. Non-current financial assets include advances and deposits granted to third parties. Advances and deposits are non-derivative financial assets for which payment is or can be determined but which are not listed on an active market. 123

124 Such assets were recognised at impairment cost using the effective interest rate method. Gains/losses were recognised in profit or loss when loans and receivables were derecognised or depreciated. Depreciation of financial assets Financial assets other than those measured at fair value in profit or loss are subject to an impairment test at the end of each financial information presentation period. Financial assets are depreciated if there is an objective indication that one or more events occurring after the initial recognition of the financial assets will affect future estimated cash flows from the investment. Derecognition of financial assets The Group derecognises a financial asset when the contractual rights over the cash flows related to this asset expire, or when the ownership and the associated risks and rewards of the financial asset are transferred to a third party. If the Group neither transfers nor keeps substantially all of the risks and rewards associated with the ownership of the asset and continues to control the disposed asset, it recognises its share in the asset and any related liability for the amounts it must pay. If the Group keeps substantially all of the risks and rewards associated with the ownership of a disposed financial asset, the financial asset continues to be accounted for, in addition to the consideration received against the secured debt accounted for Recoverable amount of non-current assets Assets with an indefinite useful life are not depreciated; they are subject to an annual impairment test or more frequently if there is an indication of an impairment loss. Depreciated assets are subject to an impairment test whenever there is an internal or external indication that an asset may have lost value. The impairment test consists of comparing the carrying amount of a given asset with its recoverable amount. The test is performed at the level of a cash-generating unit (CGU), which is the smallest group of assets including the given asset whose continued use generates cash inflows largely independent of cash inflows generated by other assets or groups of assets. An impairment loss is recognised to the extent that the carrying amount of a given asset is higher than its recoverable amount. The recoverable amount of an asset is equal to its fair value less its costs of disposal or its value in use, whichever of the two is greater. Fair value is the amount that can be obtained from the sale of an asset in an orderly transaction between market participants at the measurement date. Value in use is the present value of estimated future cash flows expected from the continued use of an asset and from its disposal at the end of its useful life. Value in use is determined on the basis of estimated cash flows based on five-year forecast periods; cash flows are further projected by applying a constant or declining growth rate and then discounted using long-term market rates after tax reflecting market estimates of the time value of money and the specific risks attached to the asset(s) in question. Terminal value is determined by discounting the last cash flow in the test in perpetuity. 124

125 As of 31 December 2013 and 31 December 2014, there was no internal or external indication of impairment in respect of non-current assets other than on assets held by ApnaCircle Infotech, which were impaired during 2014 financial year in the amount of 53 thousand Cash, cash equivalents and financial instruments Cash and short-term deposits recorded in the balance sheet include cash in bank, available funds on hand and short-term deposits with an initial maturity date of less than three months. Cash equivalents consist of current investments (UCITS). Cash equivalents are held for transaction purposes, since they are readily convertible into cash and carry a negligible risk of changing in value. They are measured at fair value; changes in value are recorded in financial profit or loss. Short-term deposits are investments made for a period of less than three months at a fixed interest rate. The Company s funds are secured and it can withdraw them before the maturity date, albeit at a lower interest rate than that agreed initially. No penalty is due for early withdrawal. For the purposes of presenting the consolidated cash flow statement, net cash includes cash and cash equivalents as defined above Fair value of financial instruments Current investments defined as cash equivalents at year-end were recognised at fair value in profit or loss, fair value being based on market value. Loans and other financial liabilities are recognised at amortised cost, calculated using the effective interest rate. The fair value of trade receivables and trade payables was put in the same category as their carrying amount in view of the very short payment terms of these loans. The same applies to other current receivables and payables. The Group has distinguished three categories of financial instruments according to how their characteristics affect their measurement; it uses this classification to disclose some of the information required by IFRS 7: category 1: financial instruments quoted on an active market; category 2: financial instruments measured on the basis of observable parameters; category 3: financial instruments partly or wholly measured on the basis of unobservable parameters; an unobservable parameter is defined as a parameter whose value is based on assumptions or correlations not supported by either observable market trades in the instrument on the measurement date or observable market data available on the same date. The only instruments recognised at fair value through profit or loss that are held by the Group are cash equivalents in category

126 2.15 Government grants Grants and conditional advances The Group receives various government grants in the form of grants or conditional advances. They are recognised in accordance with IAS 20: financial advances granted at an interest rate below the market rate are measured in accordance with IAS 39 at amortised cost, if such adjustment is material. The amount resulting from the beneficial rate obtained on a refundable advance is not interest-bearing and is thus considered to be a grant. This beneficial rate is determined by applying a discount rate corresponding to the market rate on the date of the grant. These grants are recorded under other operating income in the statement of profit or loss. These advances are recorded under Non-current financial liabilities or Current financial liabilities depending on their maturity date. Investment tax credit The French government grants investment tax credits to companies as incentives to carry out technical and scientific research. Companies with demonstrable expenditure meeting the relevant requirements (research expenditure undertaken in France or, from 1 January 2005, within the European Community or in another State that is party to the European Free Trade Area Agreement and that has entered into a tax agreement with France containing an administrative assistance clause) benefit from a tax credit against income tax for the financial year in which expenditure was incurred and in the following three financial years; amounts exceeding taxes otherwise due are refunded where applicable. The investment tax credit is presented in the consolidated profit and loss account as a grant under Other current operating income and expenses Receivables Receivables are measured at their face value. Where applicable, they are depreciated on a case-by-case basis through allowances for doubtful accounts. Income tax receivables amount to the face value of the investment tax credit recorded as an asset for the financial year of acquisition corresponding to the financial year during which the eligible expenditure giving rise to the tax credit was incurred. Current tax assets also include the nominal value of the competitiveness and employment tax credit Equity The classification of an item under equity depends on the characteristics of each instrument issued. Ordinary shares and preference shares were thus classified as equity instruments. Ancillary costs directly attributable to issuing shares or share options are deducted from equity, net of tax. 126

127 2.18 Share based payments Since its creation, the Group has implemented several compensation plans settled in equity instruments in the form of Warrants (BSA) and Founder s warrants (BSPCE) attributed to employees, executives and members of the Board of Directors. Pursuant to IFRS 2, the cost of transactions settled in equity instruments is recognised as an expense for the period during which the rights to benefit from equity instruments are acquired, in return for an increase in shareholders equity. The fair value of the share options granted to employees is determined by means of the Black-Scholes option pricing model. The fair value of the options is determined in line with the conditions governing rights acquisitions as described in Note Note 11.2 also presents the other factors taken into consideration. The benefit measured in accordance with IFRS 2 represents beneficiaries fixed compensation: it is recognised as Share-based payments to employees within the current operating income on a straightline basis over the rights-acquisition period with a corresponding increase in shareholders equity Provisions A provision is recognised if (i) the Group has a present obligation (legal or constructive) resulting from a past event, (ii) it is probable that a Group outflow of economic benefits will be required to settle the obligation and (iii) the amount of the obligation can be reliably estimated. The amount recognised under provision is the best estimate of the consideration needed to settle the present obligation at the end of the financial information presentation period, taking the risks and uncertainties related to the obligation into account. If a provision is measured on the basis of the estimated cash flows required to settle the present obligation, its carrying amount will correspond to the discounted value of these cash flows (due to the large impact of the time value of money). If arrangements have been made for part or all of the economic benefits required to settle a provision to be recovered from a third party, the amount to be received will be recognised as an asset if it can be measured reliably and if the repayment is virtually guaranteed. Restructuring A provision for restructuring is recognised once the Group has finalised a formal and detailed restructuring plan and has created well-founded expectations in the persons concerned which will trigger the restructuring, either by starting to put the plan into action or by informing them of its main characteristics. The measurement of a provision for restructuring only takes expenditure directly linked to the restructuring into account, i.e. both unavoidable restructuring expenses and expenses not linked to the entity s business Employee benefits The Group s French employees receive the following retirement benefits under French law: a lump sum payment by the Company when an employee retires (defined benefit plan); 127

128 pension payments by State Welfare organisations financed by employer and employee contributions (defined contribution plan). Pension plans and other post-employment defined benefit plans (in which the Company undertakes to guarantee defined payments or benefits) are recognised in the balance sheet on the basis of an actuarial measurement of the undertakings at year-end minus the fair value of the assets pledged to the relative plan. The actuarial measurement is based on the projected unit credit method taking staff turnover and probability of death into account. Remeasured net liabilities incurred as a result of defined benefits are recognised under Other comprehensive income. Payments by the Group into defined contribution plans are acknowledged as expenses in the statement of profit or loss for the related period. Undertakings in relation to employees of foreign subsidiaries are immaterial in view of local legal and regulatory provisions. 128

129 2.21 Financial liabilities Financial liabilities are recognised at fair value in profit or loss or under Oher financial liabilities. Financial liabilities measured at fair value in profit or loss Financial liabilities are recognised at fair value in profit or loss when they are held for trading or when they are measured at fair value in profit or loss. Other financial liabilities Other financial liabilities (including loans and trade and other payables) are subsequently measured at amortised cost through the effective interest method. The effective interest method is used to calculate the amortised cost of a financial liability and allocate the interest expenses over the period in question. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that are an integral part of the effective interest rate, transaction costs and other premiums or discounts) over the expected life of the financial liability, or a shorter period when appropriate, to the net carrying amount of the financial liability at the time of initial recognition. Derecognition of financial liabilities The Group derecognises financial liabilities if, and only if, the Group s contractual obligations are discharged, cancelled or expired. The difference between the carrying amount of a derecognised financial liability and the duly paid consideration is recognised in profit or loss Recognition of revenue The Group s activity generates three sources of income: premium subscriptions sold to professionals (Online Subscriptions, or OS), recruitment tools and services sold to corporate clients (Hiring Solutions), and advertising space and marketing services sold to corporate clients (Marketing Solutions). Revenue is measured at the fair value of the consideration received or receivable. Revenue from Online Subscriptions constitutes a service provided on an on-going basis. Revenue is recognised pro rata temporis on a daily basis. At year-end, the share of subscriptions giving access to the websites over the following period is recognised as prepaid expenses. Revenue from advertising campaigns consisting of banners posted on the Group s Marketing Solutions website is recognised as the campaigns progress. Job advertisements generate revenue when they are posted, whereas recruitment and training solutions are recognised pro rata based on their useful lives. The application of these principles gives rise to the recognition of billable services and deferred revenue when invoices are not prepared in the same period as the services are rendered. As part of its activities, the Viadeo Group barters services (ad swaps) with its partners. In accordance with SIC 31, the revenue from a barter transaction involving advertising is recognised by the Group at the 129

130 fair value of the advertising services it provides in a barter transaction by reference to non-barter transactions that: involve advertising similar to the advertising in the barter transaction; occur frequently; represent a predominant number and amount of transactions when compared to all transactions to provide advertising that is similar to the advertising in the barter transaction; involve cash and/or another form of consideration whose fair value can be reliably measured; do not involve the same consideration as the barter operation. Other revenue is recognised when future economic benefits are likely to flow to the Group and this revenue can be reliably measured Corporation tax Income tax expense represents the sum of tax payable and deferred tax. Tax payable Tax payable is based on taxable profit for the financial year. Taxable profit differs from Income before tax recognised in the consolidated statement of net profit and loss because of income and expense line items that are taxable or deductible during other financial years, as well as items that are never taxable or deductible. The group s tax payable is calculated using the adopted or near-adopted tax rates in each country at the end of the financial information presentation period. In France, the 2010 Finance Act, passed on 30 December 2009, abolished the requirement for French tax units to pay business tax as from 2010 and replaced it with the Regional Economic Contribution (Contribution Économique Territoriale, or CET) made up of two separate contributions: the Cotisation Foncière des Entreprises (CFE) based on the property rental values of the business tax; the Cotisation sur la Valeur Ajoutée (CVAE) based on the value added resulting from the individual accounts. The Group considered that the CVAE fits the definition of income tax as stated in IAS 12 Income taxes. Thus, since 1 January 2012 (the transition date), the expense relating to the CVAE has been presented in the statement of profit or loss under Income taxes. The CFE has been recognised under Recurring operating income. The third amendment to the 2012 Finance Act introduced the Tax Credit for Competitiveness and Employment (Crédit d impôt pour la compétitivité et l emploi, or CICE) as from 1 January This tax credit is calculated on the basis of wages and salaries. In the Group consolidated accounts, the CICE is presented in accordance with IAS 19 as a reduction in salaries and fringe benefits. Deferred tax Deferred tax is determined according to the temporary differences between the carrying amounts of the assets and liabilities in the consolidated financial statements and their corresponding tax bases when calculating taxable profit. 130

131 In general, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that a taxable profit, to which these temporary differences can be allocated, will be available. Such deferred tax assets and liabilities are not recognised if the temporary difference results from the initial recognition of assets and liabilities related to a transaction (other than a business combination) that has no effect on taxable profit or on accounting profit. Furthermore, deferred tax liabilities are not recognised if the temporary difference results from the initial recognition of goodwill. Deferred tax liabilities are recognised for all taxable temporary differences related to investments in subsidiaries, associates and jointly controlled entities unless the Group is capable of controlling the date on which the temporary difference is reversed and if the temporary difference is unlikely to be reversed in the foreseeable future. Deferred tax assets resulting from deductible temporary differences generated by such holdings are recognised only if it is probable that the taxable profit will be sufficient to enable use of the temporary difference benefits and if the temporary difference will be absorbed within a period of three years. The carrying amount of deferred tax assets is reviewed at the end of each financial reporting period on the basis of three-year tax planning, and is reduced if it is no longer probable that sufficient taxable profit will be available to enable the recovery of all or part of the asset. Deferred tax liabilities and assets are measured on a per-country basis at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled according to the tax rates (and tax laws) adopted or near-adopted at the end of the financial information presentation period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would result from how the Group expects to recover or settle the carrying amount of its assets and liabilities at each reporting date. Tax payable and deferred tax for the financial year are recognised in profit or loss unless they involve items recognised under Other comprehensive income or directly under Equity, in which case tax payable and deferred tax are also recognised under Other comprehensive income or directly under Equity, respectively Segment information The Group identifies and presents operating segments based on the information provided internally to the chief operating decision-makers. An operating segment is a component of the Group that engages in business activities from which it may earn income and incur expenses, including income and expenses related to transactions with other components of the Group. The gross margin per segment is regularly reviewed by General Management to make decisions regarding the resources to be allocated to the segment and to assess its performance. Separate financial information is available for this component. Information provided to the chief operating decision maker for the purposes of resource allocation and sector performance assessment focuses on the types of goods or services provided and, in respect of activities related to the Viadeo and Tianji platforms, information is then analysed in accordance with the different categories of services (subscription, recruitment, advertising and training). 131

132 In accordance with IFRS 8, the Group segments are as follows: - the Viadeo platform: this segment consists of the Viadeo subscriber database, the Viadeo technical platform and dedicated employees. It comprises the Group s activities in Europe, the United States, Africa and Russia; - the Tianji platform: this segment consists of the Tianji subscribers database, the Tianji technical platform and dedicated employees. It comprises the Group s activities in China. 132

133 Segment results In thousands of euros VIADEO 2014 TIANJI 2014 Inter-segment transactions Consolidated result Online subscriptions 13,497-13,497 Recruitment and training services 8, ,635 Marketing and advertising services 4, ,373 Other income (452) 499 Of which inter-segment revenue Revenue from ordinary activities 26,888 1,568 (452) 28,004 Personnel expenses (15,173) (2,562) (17,735) External marketing expenses (3,065) (2,189) - (5,254) Other external expenses (7,120) (1,849) 512 (8,457) Other current operating expenses and income 312 (56) (61) 196 Gross operating surplus 1,841 (5,088) (0) (3,247) Share-based payments reserved for staff (1,270) Net impairment of current assets 5 Amortization and provisions expenses (5,513) Current operating income (10,026) Other operating expenses (53) Other operating income - Non-current operating income (53) Operating profit/loss (10,078) Financial income 1,193 Financial expenses (3,437) Net financial income (2,245) Share of profit of associates (357) Other income and expenses - Profit/loss before tax (12,680) Tax expense on income (776) Result of continuing operations for the year (13,456) INCOME FOR THE FINANCIAL YEAR (13,456) 133

134 Segment results In thousands of euros VIADEO 2013 TIANJI 2013 Intersegment transactions Consolidated result Online subscriptions 15, ,793 Recruitment and training services 7, ,142 Marketing and advertising services 4, ,695 Other income 2, (362) 2,105 Revenue from ordinary activities 29,893 1,202 (362) 30,734 Personnel expenses External marketing expenses Other external expenses (19,43 5) (3,478 ) (9,414 ) (3,4 44) (1,7 64) (1,8 60) (22,880) - (5,242) 423 (10,851) Other current operating expenses and income (61) 421 Gross operating surplus (1,95 2) (5,8 66) 0 (7,818) Share-based payments reserved for staff (972) Net impairment of current assets 94 Amortization and provisions expenses (5,283) Current operating income (13,978) Other operating expenses (92) Other operating income - Non-current operating income (92) Operating profit/loss (14,070) Financial income 198 Financial expenses (434) Net financial income (236) Share of profit of associates (354) Other income and expenses - Profit/loss before tax (14,660) Tax expense on income 1,539 Result of continuing operations for the year (13,121) INCOME FOR THE FINANCIAL YEAR (13,121) The Group has no operational sub-segments apart from the operational segments presented above. 134

135 Segment assets In thousands of euros 31/12/2014 VIADEO TIANJI Inter-segment assets Consolidated assets 19,83 5,04 Non-current assets - 24, ,53 Goodwill 3,247 5, ,10 Intangible assets 7,869 9,976 7 Tangible assets Equity-accounted investments Other non-current financial assets 1, ,441 Non-current tax receivables 1,565-1,565 Deferred tax asset 5,120-5,120 Current assets 29,99 7 1,72 9 (207) 31,518 Trade and other receivables 5, (207) 6,276 Other receivables and accruals Current tax receivables Cash and cash equivalents 23,26 4 1, ,421 TOTAL ASSETS 49,83 0 6,77 4 (207) 56,397 Segment liabilities In thousands of euros VIADEO TIANJI 31/12/2014 Inter-segment liabilities Consolidated liabilities Non-current liabilities 1,888-1,888 Interest-bearing loans Other provisions Deferred tax liabilities (0) - (0) Other long term liabilities Current liabilities 21, (207) 22,500 Trade and other payables 11, (210) 12,372 Interest-bearing loans Other current provisions Tax liability 1-1 Other current liabilities 8, ,497 TOTAL LIABILITIES 23, (207) 24,387 Segment assets In thousands of euros 31/12/

136 VIADEO TIANJI Inter-segment assets Consolidated assets Non-current assets 19,163 4,091-23,254 Goodwill 2,932 2,287 5,219 Intangible assets 6,633 1,194 7,827 Tangible asets ,287 Equity-accounted investments Other non-current financial assets 1, ,786 Non-current tax receivables 1,631-1,631 Deferred tax asset 5,338-5,338 Current assets 10,313 1,058 (51) 11,320 Trade and other receivables 6, (51) 6,191 Other receivables and accruals Current tax receivables 0-0 Cash and cash equivalents 3, ,516 TOTAL ASSETS 29,477 5,149 (51) 34,575 Segment liabilities In thousands of euros VIADEO TIANJI 31/12/2013 Inter-segment liabilities Consolidated liabilities Non-current liabilities 2,505-2,505 Interest-bearing loans 1,072-1,072 Other provisions Deferred tax liabilities Other long term liabilities Current liabilities 20, (51) 21,559 Trade and other payables 9, (51) 10,219 Interest-bearing loans 2,473-2,473 Other current provisions Tax liability Other current liabilities 8, ,124 TOTAL LIABILITIES 23, (51) 24,064 All assets have been allocated to the segments to be presented except for other non-current financial assets (investments) Geographical information The Group operates primarily in the following geographical regions: France (where it has its registered office), China, Russia and Africa. 136

137 The following table presents revenue generated from external customers of the Group based on their geographical location, and information on its non-current assets per region for the last two fiscal years ended 31 December 2014 and 31 December In thousands of euros 31/12/ /12/2013 France 26,723 29,459 China 1, Africa Other 390 Total 28,004 30,734 (1) Following the application of IFRS 10/11, the Viadeo Independent Media joint venture is now consolidated using the equity method, and as such no longer makes a contribution to revenue from operating activities. No single customer accounts for more than 10% of the Group s total revenue. Breakdown of non-current assets by region: Non-current assets In thousands of euros Country 12/31/ /31/2013 France 4,263 4,606 United States 15,343 12,611 Africa 9 14 China 5,046 4,091 Russia Others 53 1,765 Total 24,878 23,254 The Others region mainly consists of European countries Presentation of the consolidated income statement The statement of profit or loss account is presented according to the type of expense and income. The presentation of the consolidated statement of profit or loss comprises the following sub-totals: EBITDA, which is the operating resource generated by the ongoing business operations. It is equal to recurring operating income (defined below) before amortisation and provision for the depreciation of fixed assets, provision for the depreciation of current assets, provision for operating liabilities, and non-monetary items, especially share-based payments. Recurring operating income (loss), which is the balance between income and expenses before tax, except for expenses and income resulting from financial activities, associates and discontinued operations. This fundamental indicator to the Group enables measurement of its performance before the effect of Non-recurring operating income. Non-recurring operating income (loss) comprises income and expenses from a major event which occurred during the accounting period and which may distort the proper interpretation of the Company s performance. This therefore concerns a limited number of items of income and expenses that are both unusual and infrequent. 137

138 2.27 Earnings per share Basic earnings per share is calculated by dividing the net profit due to Company shareholders by the weighted average number of ordinary shares in circulation during the period. Diluted earnings per share is determined by adjusting the net profit due to holders of ordinary shares and the weighted average number of ordinary shares in circulation for the effect of all potential dilutive ordinary shares. If the inclusion of instruments giving access to equity (stock warrants, share options) in the calculation of diluted earnings per share has an anti-dilutive effect, these instruments are not taken into account. Note 3: Goodwill In thousands of euros 1 January 2013 Increase Reduction Reclassification Currency translation differences 31 December 2013 Cost VIADEO 3, (105) 2,932 TIANJI 2, (36) 2,287 Cumulative total impairment Total 5, (141) 5,219 In thousands of euros 31 December 2013 Increase Reduction Reclassification Currency translation differences 31 December 2014 Cost VIADEO 2, ,247 TIANJI 2, ,534 Cumulative total impairment Total 5, ,781 Impairment test for intangible assets with an indefinite life Goodwill (carrying amount as of 31 December 2014: 5,781 thousand) was subject to an annual impairment test. Five years of estimated cash flow were included in the discounted cash flow model before taking a terminal value into account. 138

139 The principles applied by the Company are described in Note 2.9. In view of the nature of the Group s business, the definition of a CGU assumes a combination of the following three factors: a technical platform, a subscriber database and dedicated employees. Thus, for the purposes of the impairment tests goodwill was allocated to the following cash-flowgenerating units: VIADEO TIANJI The Company applied the following discount rates: Discount rate 31/12/ /12/2014 VIADEO 12.83% 11.43% TIANJI 14.50% 14.30% CGU VIADEO settings 31/12/ /12/2014 Risk-free rate 2.33% 0.93% Risk premium 7.00% 7.00% Beta CGU TIANJI settings 31/12/ /12/2014 Risk-free rate 3.60% 3.80% Risk premium 10.90% 7.00% Beta The perpetuity growth rate applied is 1.5% for the Viadeo CGU and 5% for the Tianji CGU. An one-basis point increase in the discount rate would not lead to an impairment loss. A one-basis point decrease in the perpetuity growth rate would not lead to an impairment loss. Viadeo carried out sales and market penetration forecasts using available market data and with respect to the growth achieved during the fiscal years presented. The Group also took account of risk factors derived from the forecasts and retained assumptions on the probability of success of its research and development projects currently underway. 139

140 These analyses enabled the Group to produce five-year cash flow projections correlated to the Group s stage of development, its business model and its financing structure. The cash flow projections were produced on the basis of an assumption of average revenue growth over the five-year period of 26.3% per annum for the Viadeo CGU and 86.2% per annum for the Tianji CGU in view of the growth potential in the Chinese market. As of 31 December 2014, sensitivity analysis of the business plans did not indicate a risk of impairment. Note 4: Other intangible assets Financial year ended 31 December 2013 In thousands of euros 1 January 2013 Acquisitions/ capitalisation/ amortisation Reclassifications/ installation Disposals/ scrapping Change in scope Translation differences Other 31 December 2013 Gross values Software (373) Business network platforms 10,033 1,973 1,899 (3,024) Other intangible assets (6) Intangible assets in progress 1,518 3,132 (1,899) 0 Advance payments (0) 0 80 (562) 0 10, (108) 0 2, Total 11,990 5,126 1 (3,404) 0 (670) 0 13,043 Depreciation and impairment Software (324) (85) (36) Business network platforms (4,521) (3,514) 0 2, (5,180) Other intangible assets (5) Intangible assets in progress Advance payments Net Total (4,850) (3,600) 0 3, (5,216) Software 109 (65) 0 (0) 0 (0) 0 44 Business network platforms 5,513 (1,541) 1,899 (265) 0 (465) 0 5,140 Other intangible assets (1) Intangible assets in progress 1,518 3,132 (1,899) 0 0 (108) 0 2,643 Advance payments Total 7,140 1,526 1 (267) 0 (573) 0 7,827 Fiscal year ended 31 December

141 In thousands of euros 31 December 2013 Acquisitions/ capitalisation/ amortisation Reclassifications/ installation Disposals/ scrapping Change in scope Translation differences Other 31 December 2014 Gross values Software (29) Business network platforms 10,320 6,090 (490) 0 2,292 (7) 18,204 Other intangible assets Intangible assets in progress 2,643 4,894 (6,090) (128) ,529 Total 13,043 4,894 0 (647) 0 2,502 (7) 19,785 Depreciation and impairment Software (36) (12) (0) 0 (23) Business network platforms (5,180) (4,283) (527) 0 (9,786) Other intangible assets Intangible assets in progress Total (5,216) (4,295) (527) 0 (9,810) Net Software 44 (12) 0 (3) Business network platforms 5,140 (4,283) 6,090 (287) 0 1,765 (7) 8,417 Other intangible assets Intangible assets in progress 2,643 4,894 (6,090) (128) ,529 Total 7, (418) 0 1,975 (7) 9,976 Intangible assets in progress relate to expenses for the development of professional networking platforms which were not used at year-end. The total development cost of the platforms capitalised during 2014 financial year amounts to 4,894 thousand and the total used amounts to 6,090 thousand. During 2014 financial year, the criteria for capitalising development costs were met, notably the criterion concerning future economic benefits. Accordingly, the Group capitalised 3,558 thousand relating to the Viadeo platform and 1,336 thousand relating to the Tianji platform. In 2014, the Group wrote off the development costs for the platform corresponding to applications that had become obsolete. Since these applications had been partially amortised, the corresponding net carrying amount was 415 thousand. There were no indications of impairment losses in accordance with IAS 36. Consequently, the Company did not carry out the impairment test for amortisable intangible assets. For the professional networking platform, an indication of impairment loss can for example correspond to changes in technology making it obsolete, or to a series of technical hitches materially affecting its profitability. 141

142 Note 5: Tangible assets Financial year ended 31 December 2013 In thousands of euros 1 January 2013 Acquisitions/ amortisation Disposals/ scrapping Change in scope Translation differences Assignment and transfer 31 December 2013 Gross values Computer hardware 2, (199) (6) (83) 0 2,396 Office equipment (24) (1) (6) (0) 271 Motor vehicles (4) 0 48 Other property, plant and equipment Total 2, (223) (7) (93) 0 3,076 Depreciation and impairment Computer hardware (1,049) (674) (0) (1,504) Office equipment (61) (67) (105) Motor vehicles (38) (4) (40) Other property, plant and equipment (46) (94) (140) Total (1,195) (839) (1,789) Net Computer hardware 1,119 (160) (32) (6) (30) (0) 892 Office equipment (3) (1) (4) Motor vehicles 13 (4) 0 0 (1) 0 8 Other property, plant and equipment Total 1, (35) (7) (35) 0 1,

143 Fiscal year ended 31 December 2014 In thousands of euros 31 December 2013 Acquisitions/ amortisation Disposals/s crapping Change in scope Translation differences Assignment and transfer 31 December 2014 Gross values Computer hardware 2, (96) ,755 Office equipment (18) 0 24 (7) 287 Motor vehicles 48 0 (24) Technical facilities, equipment and tools Other property, plant and equipment (48) Total 3, (186) ,404 Depreciation and impairment Computer hardware (1,504) (568) 73 0 (204) (7) (2,209) Office equipment (105) (80) 10 0 (13) 9 (180) Motor vehicles (40) (1) 16 0 (1) 0 (25) Technical facilities, equipment and tools (2) (2) Other property, plant and equipment (140) (64) (156) Total (1,789) (713) (218) (0) (2,573) Net Computer hardware 892 (378) (23) 0 60 (5) 546 Office equipment 166 (63) (9) Motor vehicles 8 (1) (8) Technical facilities, equipment and tools Other property, plant and equipment 222 (47) Total 1,287 (489) (39) 0 71 (0) 831 There were no indications of a loss of value in property, plant and equipment as of 31 December 2014; no provision for impairment was recognised. Note 6: Investments in associates 6.1 Joint ventures The following table presents details on the Group s joint ventures at the end of the financial information presentation period: Name of the joint venture Main activity Place of incorporation and main business establishment Percentage of interest and voting rights held by the Group 31/12/ /12/2013 Viadeo Independant Media BV Holding company Netherlands 50% 50% Viadeo Independant Media LLC Professional social network Russia 50% 50% 143

144 The abovementioned joint ventures are accounted for using the equity method in these consolidated financial statements. The following table summarises the financial information of the Group s joint ventures. It summarises the amounts relating to joint ventures as indicated in the financial statements prepared in accordance with IFRS: In thousands of euros 31 December December 2013 Non-current assets Current assets TOTAL ASSETS Equity Non-current liabilities 1 2 Current liabilities TOTAL EQUITY CAPITAL AND LIABILITIES % held 50% 50% Share of profit of associates In thousands of euros 31 December December 2013 Revenue from ordinary activities Operating income (927) (893) Profit/loss before tax (878) (879) Result of continuing operations for the year (713) (708) INCOME FOR THE FINANCIAL YEAR (713) (708) % held 50% 50% Share of profit of associates (357) (354) 6.2 Other investments in associates ApnaCircle Infotech has ceased operating and been mothballed. For this reason, the Group has decided to recognise this investment under Investments in associates. This reclassification became effective on 1 July Concurrently with this reclassification, the relevant securities were fully impaired in the amount of 53 thousand. The impairment was recognised in other operating expenses. 144

145 Note 7: Other financial assets and other non-current assets 7.1. Other financial assets Financial year ended 31 December January 2013 Increase Reduction Liquidation of CBC Change in scope Other changes 31 December 2013 Gross values Available-for-sale investments (AFS non-current) (5) Receivables related to equity investments 83 9 (1) (7) (29) 55 Loans, deposits and other receivables (non-current) (19) 0 (9) 1,039 Investment securities at fair value through profit or loss Total 1, (21) (12) (37) 1, Depreciation/impairment Equity investments Receivables related to equity investments Other non-current financial assets Total Net 0 0 Equity investments (5) Receivables related to equity investments 83 9 (1) (7) (29) 55 Other non-current financial assets (19) 0 (9) 1,039 Investment securities (HTM non-current) Total 1, (21) (12) (37) 1,

146 Fiscal year ended 31 December December 2013 Increase Reduction Liquidation of CBC Change in scope Other changes 31 December 2014 Gross values Available-for-sale investments (AFS non-current) (685) 0 5 (0) Receivables related to equity investments (6) Loans, deposits and other receivables (non-current) 1, (488) Investment securities at fair value through profit or loss Total 1, (494) (685) ,441 Depreciation/impairment Equity investments 0 (0) Receivables related to equity investments Other non-current financial assets Net Total 0 (0) Equity investments (685) (0) Receivables related to equity investments (6) 0 73 Other non-current financial assets 1, (488) Investment securities (HTM non-current) Total 1, (494) (685) ,441 The Group owns 10% of the share capital of China Biznetwork Corp, which owns 11% of Viadeo SA s shares. China Biznetwork Corp shares are presented under the line item Interests available for sale. Since these shares are an investment in equity instruments not traded on an active market and their fair value cannot be reliably measured, they are measured at cost as of 31 December Following the IPO of Viadeo SA, these securities are now measured at fair value. At the end of 2014, the shareholders of that entity decided to dissolve the Company. This liquidation results in a transfer of Viadeo securities (held by CBC) to Viadeo SA. These treasury shares have therefore been eliminated in exchange for equity on the basis of their market value as of 31 December Long-term investments ( 452,000) are securities pledged as a debt guarantee for the payment of rent for the Group s registered offices. This account is frozen for the term of the commercial lease. 146

147 7.2. Non-recurring tax receivables Non-current tax receivables correspond to the share of the research tax credit and the competitiveness and employment tax credit refundable in more than one year. The unallocated balance constitutes a liability for the State which can be used against tax payable for the three years following that for which the credit was acknowledged. At the end of the allocation period, the unallocated portion may be recovered by the Company. Change in competitiveness and employment tax credit and research tax credit Competitiveness and employment tax credit Research tax credit Total Receivable as of 31 December ,398 1,398 Refunded or allocated in Recognised during 2013 financial year Receivable as of 31 December ,518 1,628 Refunded or allocated in Recognised in respect of 2014 financial year Receivable as of 31 December ,319 1,565 of which current 0 0 of which non-current 246 1,319 1,565 Note 8: Trade and other receivable 8.1 Trade and other receivables In thousands of euros 31 December December 2013 Trade receivables 5,112 5,778 Tax receivables (excluding corporation tax) Other receivables (current) Gross total 6,328 6,235 Impairment of trade and other receivables (52) (44) Net total 6,276 6,191 Depreciation is determined on the basis of a risk assessment carried out by the management of each subsidiary and reviewed at group level. The trade receivables presented above include amounts that were past due at the end of the reporting period (see below for the aged balance), for which the Group has not recognised significant impairment for doubtful receivables because the credit quality of the debtors in question has not changed significantly and because the amounts are still considered recoverable. 147

148 8.2 Transfer of financial assets At the end of the reporting period, the carrying amount of trade receivables that had been sold but not yet collected was 2,568 thousand (compared with a total of 2,720 thousand as of 31 December 2013). Receivables subject to non-recourse sale under a customer insurance policy have been derecognised. The contract provides that the cash flows and substantially all the risks and rewards attached to the receivables are transferred to factor. Those that have been sold with recourse resulted in the recognition of a debt of 482 thousand ( 2,000 thousand as of 31 December 2013) in exchange for the cash received. 8.3 Other receivables and accruals Other receivables and accruals consist of prepaid recurring expenses. Prepaid expenses relate to recurring expenses and correspond for the most part to the share of rent for the next financial year. Note 9: Cash, cash equivalents and current financial instruments 9.1 Cash and cash equivalents Cash and cash equivalents are broken down as follows: In thousands of euros 31 December December 2013 Cash and cash equivalents 5,421 3,485 Investment securities 19,000 1,031 Net total 24,421 4,516 Cash is made up of cash in bank, while cash equivalents are made up of liquid and risk-free investments (UCITS, unit trusts, short-term investments). No impairment of investments was acknowledged. 148

149 Note 10: Financial assets and liabilities and their effects on profit or loss Measurement of the non-recurring fair value of financial assets and liabilities Financial instruments are broken down into the following categories: Financial assets and liabilities as of 31 December 2014 In thousands of euros Available-forsale financial assets Loans and receivables Fair value adjustment through profit and loss Financial liabilities at amortised cost Carrying amount Fair value Non-current financial assets (0) ,441 1,441 Trade and other receivables 6,276 6,276 6,276 Cash and cash equivalents 5,421 19,000 24,421 24,421 Total financial assets (0) 12,685 19, ,137 32,137 Non-current financial debt Current financial liabilities Trade and other payables 12,372 12,372 12,372 Total financial liabilities ,986 13,986 13,986 Due to their short-term nature, the carrying amount of cash credit, trade and other payables and shortterm borrowings is an estimate of their fair value. Available-for-sale financial assets are investments in equity instruments not traded on an active market and whose fair value cannot be reliably measured; they are thus measured at cost at 31 December 2013 and 31 December There were no indications of an impairment loss. 149

150 Analysis of financial assets and liabilities measured at fair value Financial assets measured at fair value in the balance sheet: 2014 Annual Financial Report 31 December 2014 In thousands of euros Level 1 Level 2 Level 3 Total Investment securities at fair value through profit or loss Investment securities investments available for sale recognised at fair value Investment in CBC 0 0 Financial assets at fair value through profit or loss Cash and cash equivalents 19,000 19, December 2013 In thousands of euros Level 1 Level 2 Level 3 Total Investment securities at fair value through profit or loss Investment securities investments available for sale recognised at fair value Investment in CBC Financial assets at fair value through profit or loss Cash and cash equivalents 1,031 1,031 Note 11: Share capital 11.1 Share capital issued Share capital amounts to 200,563. It is divided into 10,028,159 shares fully subscribed and paid up, with a par value of This excludes unexercised stock warrants and share options granted to certain investors and certain individuals who may or may not be Company employees. 150

151 Statement of changes in equity: Number of shares in Situation as of 1 January , , Exercise of founders warrants (BSPCE) Exercise of share warrants (BSA) Situation as of 31 December , ,374 Exercise of founders warrants (BSPCE) 24, Exercise of share warrants (BSA) 0 Increase in the par value of shares 47, for-1 stock split 7,568,472 Conversion of convertible bonds 831,691 16,634 IPO 1,287,737 25,755 Situation as of 31 December ,028, ,563 As of 31 December 2014 the number of Viadeo shares held in treasury was: - 25,619 shares acquired under the liquidity contract; - 107,421 shares held following the liquidation of CBC. Management of share capital The Company s policy is to maintain a solid equity base so as to maintain investor and creditor confidence and to support future business development Warrants and stock options Stock warrants Soocial warrants BSA 01 Creation 28/10/ /06/2008 Expiry date - 30/06/2013 Warrants outstanding as of 1 January Cancelled or lapsed warrants (200) Exercised warrants (405) Warrants outstanding as of 31 December Cancelled or lapsed warrants Exercised warrants Warrants outstanding as of 31 December

152 Startup stock options (in French: BCE, or Bons de Créateurs d Entreprises) 2014 Annual Financial Report Summary table of startup stock options allocated during the period and in previous periods: Creation Original maturity Modified maturity Number granted (1) BCE 01 BCE 02 BCE 03 BCE 04 BCE 05 EGM EGM EGM EGM EGM 27/08/ /08/ /07/ /06/ /06/ /08/ /12/ /12/ /12/2017 Extension of the maturity to 31/08/2017 following the decision of the EGM of 29/06/2012 Extension of the maturity to 31/12/2017 following the decision of the EGM of 29/06/ /09/ /06/ /12/ ,466 7,846 8,245 9,180 15,000 Number granted (2) 711, , , , ,000 Features (1) Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Features (2) Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Right to subscribe for one new share at a price of Conditions of exercise Present as employee or corporate officer Present as employee or corporate officer Present as employee or corporate officer Present as employee or corporate officer Present as employee or corporate officer Vesting period Exercisable immediately BCE 02 warrants may be exercised by their holders in the proportion of (i) onethird of the number subscribed from the date of the third anniversary of the holder s employment contract, another third from the date of the fourth anniversary of the holder s employment contract, and the final third from the fifth anniversary of the holder s employment contract until 31 December 2017, and (ii) on the condition that the beneficiary is still employed by the Company at the exercise date. BCE 03 warrants may be exercised by their holders in the proportion of (i) onethird of the number subscribed from the date of the third anniversary of the holder s employment contract, another third from the date of the fourth anniversary of the holder s employment contract, and the final third from the fifth anniversary of the holder s employment contract until 31 December 2014, and (ii) on the condition that the beneficiary is still employed by the Company at the exercise date BCE 04 warrants may be exercised by their holders in the proportion of (i) onethird of the number subscribed from the date of the first anniversary of the subscription, another third from the date of the second anniversary of the subscription, and the final third from the third anniversary of the subscription until 31 December 2017, and (ii) on the condition that the beneficiary is still an employee or director of the Company at the exercise date BCE 05 warrants may be exercised by the beneficiary in the proportion of: (i) one-third from the first anniversary of the grant, (ii) one-third from the second anniversary of the grant, one-third from the third anniversary of the award, and (iii) on the condition that the beneficiary is still an employee or director of the Company at the exercise date. Beneficiaries Management Management/Employees Management/Employees Management/Employees Management/Employees (1) The figures shown do not take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May (2) The figures shown take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May

153 Charge in 2012 financial year in thousands of euros Charge in 2013 financial year in thousands of euros Option series Number of options granted Grant date Expiry date Exercise price Fair value at grant date BCE 01 * 28,466 27/08/ /08/ Charge in 2014 financial year in thousands of euros BCE 02 * 7,846 BCE 03 8,245 BCE 04 9,180 06/12/ /02/ /02/ /09/ /03/ /04/ /05/ /10/ /12/ /12/ /12/ BCE 05 15,000 10/09/ /09/ ,074 Total 68, ,270 * The expiry dates of BCE 01 and BCE 02 were extended by the extraordinary general shareholders meeting of 29/06/2012. The fair value of the options indicated in the above table corresponds to that of the extended options (on the date the plans were changed). (3) The figures shown do not take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May (4) The figures shown take into account the 25-for-1 stock split approved by the combined shareholders meeting of 21 May Extending the vesting period of the BCE 01 and BCE 02 plans increases their fair value measured immediately before and after the change. In accordance with IFRS 2, the Group included the incremental fair value granted in the measurement of the amount recognised for services received in exchange for the equity instruments. The incremental fair value granted is the difference between the fair value of the modified equity instrument and the fair value of the original equity instrument, both measured at the date of the change. Change in options in 2014 BCE 01 BCE 02 BCE 03 BCE 04 BCE 05 Warrants outstanding as of 1 January , , , , ,000 Warrants granted during the year Cancelled or lapsed warrants Exercised warrants (1,125) (27,875) (33,418) (42,250) (7,428) (13,140) (4,338) Warrants outstanding as of 31 December ,650 93, ,610 87, ,

154 Methods of measurement The fair value of the stock warrants was measured according to the Black & Scholes model. Where relevant, the fair value of the options was adjusted in view of Management s best estimate of the effect of restrictions on their exercise and handling. The expected volatility is based on the historical price volatility of similar shares. Model data BCE 01 BCE 02 BCE 03 BCE 04 BCE 05 Share price at grant date Exercise price Risk-free interest rate 1.34% 1.40% 2.94% 3.37% 2.72% Assumed turnover rate 20% 20% 20% 20% 20% Volatility 39.72% 39.72% 39.72% 39.72% 39.72% Illiquidity discount 15% 15% 15% 15% 15% No future dividend payments were taken into account when measuring the fair value of the stock warrants. Note 12: Loans and other financial liabilities Financial liabilities are composed as follows: Financial year ended 31 December 2013 In thousands of euros 1 January 2013 Subscription Redemption Assignment and transfer Discounting of the debt Translation differences 31 December 2013 Convertible bonds debt component Borrowings from credit institutions (224) (139) - (4) 247 Coface advance Oséo advance 221 (125) Other borrowings and similar debts 1 1 NON-CURRENT 1, (224) (264) 11 (4) 1,072 Factor debt - 2, ,000 Borrowings from credit institutions portion due in < 1 year (192) (10) 355 Coface advance 12 (12) - Oséo advance 129 (140) Bank overdrafts (cash liability) (0) 3 Current Bank overdrafts (debt) Accrued interest on borrowings CURRENT 560 2,000 (341) (10) 2,

155 Fiscal year ended 31 December 2014 In thousands of euros 1 January 2014 Subscription Redemption Assignment and transfer Discounting of the debt Translation differences 31 December 2014 Convertible bonds debt component 0 10,550 - (13,632) 3,082-0 Borrowings from credit institutions (217) Coface advance Oséo advance 108 (108) 0 Other borrowings and similar debts NON-CURRENT 1,072 10,632 (325) (13,632) 3, Factor debt 2, (2,000) Borrowings from credit institutions portion due in < 1 year (209) Coface advance - - Oséo advance 113 (3) 110 Bank overdrafts (cash liability) 3 - (1) Accrued interest liability Current Bank overdrafts (debt) CURRENT 2, (2,213) Bonds The VIADEO Group issued three bonds convertible into new shares in the first half of 2014: - CB 1: 27/01/2014, issue of a nominal amount of 5,050 thousand; - CB 2: 26/02/2014, issue of a nominal amount of 500 thousand; - CB 3: 23/05/2014, issue of a nominal amount of 5,000 thousand; The characteristics of these bonds are as follows: Maturity Type of repayment 5 years On maturity Coupon 5% Capitalised interest rate 4% Non conversion premium IRR of 15% Bondholders had the option of requesting the conversion of their bonds into shares in the following cases: - IPO of the VIADEO Group; 155

156 - issuance of shares or securities by VIADEO SA providing access to capital for a total amount (including share premium) of at least 10 million for which one or more third-party shareholders subscribe; - sale of more than 50% of the share capital and voting rights of VIADEO SA to a non-shareholder third party. The conversion option is at the bondholders sole initiative. The number of shares issued in the event of an IPO (most likely scenario) would be based on the share price used for the IPO after applying a discount of 25% should the event occur during 2014 or 2015, and 30% thereafter. The number of shares to be issued was therefore not known at the time of issue of these bonds. They were accordingly classified as hybrid financial instruments with: - a debt component; - a derivative liability corresponding to the conversion option. The Group has elected to recognise all hybrid instruments at fair value through profit or loss. The difference between the cash received and the fair value of these instruments is recognised in liabilities in the balance sheet, and under Financial expenses in the income statement: In thousands of euros Issue price Fair value of convertible bonds Expenses recognised CB 1 5,050 6,762 1,712 CB CB 3 5,000 6,201 1,201 Total 10,550 13,632 3,082 Following the IPO on 4 July 2014, bondholders converted all of their bonds into VIADEO shares. Accordingly, 831,691 new shares were created through the conversion of 105,500 bonds. This transaction resulted in an increase in consolidated equity in the amount of 13,748 thousand ( 13,632 thousand in bonds and 116 thousand in accrued interest). 156

157 12.2 OSEO Advances On 26 June 2009, VIADEO obtained non-interest-bearing refundable innovation financing from OSEO in the amount of 490 thousand to finance the development of the VIADEO interface. The amount was paid in instalments between 2009 and It is repayable in 16 quarterly instalments between 2012 and As of 31 December 2014, 380 thousand had been repaid, of which 120 thousand in respect of 2012, 140 thousand in respect of 2013 and 120 thousand in respect of The balance of 110 thousand will be repaid as follows: 110,000 in 2015, in four quarterly instalments of 27, COFACE advances VIADEO obtained refundable advances from COFACE for two business development insurance contracts covering the AFRICA and INDIA & MEXICO regions. Each contract provides cover to Viadeo for three years during which the Company s business development expenses are underwritten within the limits of a defined budget. A four-year redemption period subsequently begins during which Viadeo must repay the advance obtained on the basis of a percentage of the turnover achieved in the regions concerned. Under IFRS, the fact that the refundable advance is not subject to annual interest payments amounts to viewing it as a zero per cent interest loan, i.e. more favourable than what is available on the market. The difference between the advance amount at historical cost and the advance amount discounted at a market rate is considered immaterial. Note 13: Provision 13.1 Employee benefits Employee benefits are made up of the provision for post-employment benefits measured on the basis of the measures laid out in the collective agreement in force, in this case the SYNTEC collective agreement. This undertaking only concerns employees covered by French law. Undertakings in relation to employees of foreign subsidiaries are immaterial in view of local legal and regulatory provisions. The main actuarial assumptions used to measure lump sum payments on retirement are as follows: 31/12/ /12/2013 Discount rate 1.49% 3% Retirement age 67 years Annual increase in salaries 4% Mortality rate INSEE Staff rotation 26% sliding scale based on age The provision for retirement benefits developed as follows: 157

158 In thousands of euros Retirement commitment Cost of services rendered 2014 Annual Financial Report Change Financial cost Actuarial differences Situation as of 31/12/ Impact on operating income Other elements affecting comprehensive income (17) - - (17) Situation as of 31/12/ (17) Impact on operating income Other elements affecting comprehensive income Situation as of 31/12/ Provision The following tables show changes in current and non-current provision for the two periods: Fiscal year ended 31 December 2014 In thousands of euros 1 January 2014 Appropriations Reversals* Deconsolidation Other components of comprehensive income Currency translation differences 31 December 2014 Provisions for retirement and similar benefits Provisions for contingencies (20) Other provisions for charges (non-current) Provisions for contract losses (non-current) (220) Restructuring provisions (non-current) Total non-current provisions (220) (20) * Of which reversals used: 220k In thousands of euros 1 January 2014 Appropriation s Reversals * Deconsolidation Other components of comprehensiv e income Currency translation differences 31 December 2014 Provisions for guarantees (current) Provisions for contract losses (current) (176) Provisions for contingencies (225) Restructuring provisions (current) Total current provisions (401) * Of which reversals used: 269k Provision for liabilities o As of 31 December 2014, provisions for contingencies mainly corresponded to the termination of employment contracts with certain employees. 158

159 Note 14: Trade and other payables Trade and other payables Trade and other payables were not discounted to the extent that amounts were not overdue by more than one year at the end of the financial year in question. In thousands of euros 31 December December 2013 Supplier payables 4,890 4,175 Social security liabilities (current) 3,301 2,901 Tax liabilities (excluding corporation tax and CVAE) (current) 4,301 3,128 Other liabilities (current) (120) 14 Total trade and other payables 12,372 10,219 Note 15: Other current and non-current liabilities Other current liabilities are broken down as follows: In thousands of euros 31 December December 2013 Debts on acquisition of assets (current) - - Deferred income 8,376 7,973 Clients Advances received Total other current liabilities 8,497 8,124 Other current liabilities are broken down as follows: In thousands of euros 31 December December 2013 Debts on acquisition of assets (non-current) - - Other liabilities (non-current) - - Deferred income Total other non-current liabilities The Viadeo Group is led to record deferred revenue relating to invoice issued in order to link revenue to the corresponding period of services rendered. 159

160 Note 16: Staff and staffing costs Staffing costs are broken down as follows: In thousands of euros 31 December December 2013 Tax and payroll levies (264) (447) CET (local business tax) (5) (34) Staff compensation (11,700) (15,598) Social Security and employee benefit charges (5,822) (6,816) Other personnel expenses (including profit-sharing) Employee profit-sharing - - Total (17,735) (22,880) The following table shows the Group s workforce by function at the end of the fiscal year: Management and support function Production function Marketing and sales function Total Note 17: Other external expenses The following are other external expenses: In thousands of euros 31 December December 2013 Payment of intermediaries and fees (1,699) (3,446) Hire and rental charges (2,118) (2,574) Hosting maintenance (608) (646) General sub-contract work (378) (381) Non-inventoried purchases of materials and supplies (323) (482) Travel expenses transport (804) (1,308) Business expenses entertainment (463) (399) Postage (517) (573) Banking services (341) (216) Other external expenses (901) (497) Other taxes and charges (65) (127) Miscellaneous (238) (203) Total (8,457) (10,851) Compensation for intermediaries & fees includes part of the compensation to executive directors through service provision agreements. 160

161 Note 18: Other recurring operating income and expenses Other recurring operating income and expenses are broken down as follows: In thousands of euros Operating subsidies (research tax credit and competitiveness and employment tax credit) 31 Decembe r Decembe r Gain or loss on disposal and write-off of assets (452) (297) Other exceptional expenses (78) (5) Miscellaneous 174 (65) Other current operating expenses and income Note 19: Depreciation, amortisation and provisions Depreciation and provision expenses are broken down as follows: In thousands of euros 31 December December 2013 Amortisation and impairment of intangible assets (4,295) (3,600) Depreciation and impairment of property, plant and equipment (713) (799) Amortisation of deferred operating expenses - - Allowances to operating provisions (615) (894) Allowances to pension obligations (45) (33) Reversal of operating provisions (unused) Total (5,513) (5,283) Note 20: Non-recurring operating income Non-recurring operating income is broken down as follows: In thousands of euros 31 December December 2013 Site closure costs - (92) Impairment (53) - Non-current operating income (53) (92) The impairment charge relates to the impairment of equity-accounted investments in ApnaCircle Infotech (see Note 6.2). 161

162 Note 21: Financial profit or loss The financial profit or loss is broken down as follows: In thousands of euros 31 December December 2013 Income from financial assets excluding cash equivalents Foreign exchange gains 1, Income from sale and other income from cash equivalents - - Change in fair value (income) - - Other financial income 3 2 Financial income 1, Interest costs on borrowings (140) (39) Foreign exchange losses (209) (370) Change in fair value (convertible bonds) (3,082) - Other financial costs 0 (14) Accretion effect (expense) (7) (11) Financial expenses (3,437) (434) Net financial income (2,245) (236) The Change in fair value line in the amount of - 3,082 thousand is the change in fair value of bond conversion options in the first half of 2014 (see Note 12.1 Bonds). This expense is non-recurring. Note 22: Corporation tax Under current legislation, as of 31 December 2014, the Company had tax loss carryforwards amounting to: 13,449 thousand in indefinite tax loss carryforwards in France; US$7,251 thousand ( 5,972 thousand) carried forward over 20 years in the US; CNY 132,822 thousand ( 1,763 thousand) carried forward over five years in the People s Republic of China. The carrying amount of deferred tax assets is reviewed at the end of each financial information presentation period on the basis of a three-year tax planning period. The Group did not recognise deferred tax assets for France and China. The Group only recognised tax loss carryforwards for the APVO subsidiary, which had a 2,559 thousand impact on deferred tax assets. This activation is justified by the forecast taxable profits generated in the next three financial years. 162

163 The principal items comprising the income tax expense and the reconciliation between the theoretical tax expense calculated at the effective tax rate in France (33.33% in 2014 and 2013) and the actual tax expense recognised in the consolidated income statement are presented below: Detailed tax benefit (expense) in profit or loss In thousands of euros 31/12/ /12/2013 Deferred tax (535) 1,838 Current tax (242) (299) Income tax (776) 1,539 Reconciliation between theoretical tax and effective tax in euro thousands 31/12/2014 Profit/loss before tax (12,680) Standard rate of tax applicable in France (%) 33.33% Theoretical tax (expense)/income 4,226 Impact of: Results of associates (71) Share-based payments (423) Other permanent differences 120 CVAE (Cotisation sur la Valeur Ajoutée) (160) Foreign exchange differences (812) Effect of non-recognition of deferred tax assets on tax loss (3,974) carryforwards and other deductible temporary differences Recognition of tax loss carryforwards and other deductible temporary 3 differences or use of tax losses and temporary differences not previously activated Untaxed income (competitiveness and employment tax credit, 224 research tax credit) Adjustment of tax expense in previous years 22 Other 70 Tax (expense)/income (776) Effective tax rate (%) -6.12% 163

164 Nature of deferred taxes Net balance sheet position In thousands of euros 1 January 2014 Result Impact on shareholders equity Other Currency translation differences 31-dec.-14 Tax loss carryforwards 5, ,042 Temporary differences in goodwill and in PP&E 1,743 (347) 175 1,572 Retirement commitments Other temporary differences 1,099 1, ,522 Unrecognised deferred tax assets (3,186) (2,485) (5,671) Sub-total deferred tax asset 5,591 (722) ,517 Tax depreciation (228) (11) (239) Valuation differences (286) Other temporary differences (50) (88) (4) (15) (158) Sub-total deferred tax liabilities (564) 187 (4) 0 (15) (396) Total net deferred tax assets on the balance sheet 5,027 (535) ,120 Deferred tax assets 5,337 5,120 Deferred tax liabilities Temporary differences on goodwill and intangible assets are related on the one hand to the tax value of intangible assets resulting from internal transfers eliminated in consolidation and to the tax deductibility of the APVO goodwill on the other hand. Note 23: Off-balance sheet commitments 23.1 Operating lease obligation The Company signed a standard 3/6/9 lease for its registered office in France. This type of lease is granted for nine full consecutive years and gives the Company the option to give notice once every three years. Future rent and expenses relating to the headquarters until the end of the next three-year period are broken down as follows at 31 December 2014: less than one year: 954 thousand; more than one year and less than five years: 954 thousand. Rent recognised as an expense during the fiscal year ended 31 December 2014 amounted to 963 thousand. The Group has signed two leases for its business in China (TIANJI). The leases were granted for three full consecutive years. Future rent and expenses relating to the premises in China are broken down as follows at 31 December 2014: less than one year: 375 thousand. Rent under this lease expensed during the fiscal year ended 31 December 2014 amounted to 523 thousand. 164

165 The Group has signed one lease for its premises in the United States. It was granted for a term of twelve months. Future rent and expenses are broken down as follows at 31 December 2014: less than one year: 80 thousand; more than one year and less than five years: 130 thousand. Rent under this lease expensed during the fiscal year ended 31 December 2014 amounted to 119 thousand Pledges and other security interests The Viadeo Group pledged investments in the amount of 452 thousand as warranty against the lease for its headquarters. The investments in question are presented under non-current financial assets. The Viadeo Group has pledged its goodwill as security against the repayment of a bank loan in the amount of 150 thousand recognised in the liabilities caption of the consolidated balance sheet. As of 31 December 2014, the Viadeo Group was in compliance with all banking covenants relating to this loan Other off-balance sheet commitments The Company acquired the Pealk software programme. This asset was acquired for 1 including a price review clause based on a percentage of the revenue generated by the application until 31 March At 31 December 2013 and 31 March 2014, no additional price was acknowledged in view of the amount of revenue generated by the application. Note 24: Relationship with related parties The Viadeo Group s related parties consist of: the Group s executive officers; the Group s directors; the companies in which the above exercise control, joint control or significant influence, or hold significant voting rights Compensation for executives and senior managers Senior managers receive compensation in the form of short-term employee benefits and share-based payments. The amount of fixed and variable compensation allocated to executives for 2014 and the number of shares relating to all plans in place at 31 December 2014 are presented below: 165

166 In thousands of euros Annual Financial Report Gross remuneration and benefits in kind Benefits Post-employment benefits Other long-term benefits Retirement gratuities Cost of stock option and similar plans Total expensed in the statement of profit or loss 1,658 1, Transactions with related parties Balances and transactions between the Company and its subsidiaries that are related parties were eliminated at consolidation and are not presented in this note. Details of transactions between the Group and other related parties are presented below. Transactions with joint ventures In thousands of euros With joint ventures 31 December December December 2012 Equity interests Loans Trade and other receivables Provisions for contingencies Trade payables and related accounts Other current liabilities Operating income Financial income Operating expenses Financial expense Note 25: Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the net profit/(loss) attributable to Company shareholders by the weighted average number of ordinary shares in circulation during the fiscal year. Instruments giving deferred access to share capital (warrants (BSA) and founders warrants (BSPCE)) are considered anti-dilutive since they result in increased earnings per share. Diluted earnings per share is thus identical to basic earnings per share. 166

167 In euros per share 31/12/ /12/2013 Basic earnings per share Continued activities (1.50) (1.66) Discontinued activities Total basic earnings per share (1.50) (1.66) Diluted earnings per share Continued activities (1.50) (1.66) Discontinued activities Total diluted earnings per share (1.50) (1.66) Weighted average number of ordinary shares used in the calculation of basic earnings per share Weighted average number of ordinary shares used in the calculation of diluted earnings per share 8,943,996 7,883,825 8,943,996 7,883,825 The number of instruments deemed anti-dilutive giving deferred access to share capital was 1,340,201 as of 31 December 2014 (see Note 11.2). Note 26: Management of financial risks The Group is exposed to the following risks related to the use of financial instruments: credit risk; market risk; liquidity risk. This note presents information on the Group s exposure to each of the above risks and to risks resulting from early repayment clauses due to covenants, as well as on its objectives, policies and how it measures and manages risks. Quantitative information can be found in other notes to the consolidated financial statements. The Company s main financial instruments consist of financial assets, cash flow and investments. The management of these instruments is aimed at financing the Company s activities. It is Company policy not to use financial instruments for speculation purposes. The Company does not use derivatives. Credit risk Credit risk is the risk of a financial loss to the Group if a customer or the counterparty to a financial instrument fails to meet their contractual obligations. Maximum exposure to credit risk at the end of each financial year is represented by the carrying amount of the financial assets and summarised in the following table: In thousands of euros Book value 167

168 31/12/ /12/2013 Other non-current financial assets 1,441 1,786 Trade receivables and related accounts 6,276 6,191 Other operating receivables 2,387 2,245 Cash and cash equivalents 24,421 4,516 Total 34,524 14, Annual Financial Report Trade receivables A credit risk exists if a customer cannot honour their commitments within the agreed deadlines, resulting in a potential loss. The Group permanently monitors its customers credit risk. Furthermore, the Group s dependence on any given customer is limited as no single customer accounts for more than 10% of Group revenue. To determine the recoverability of a trade receivable, the Group takes into account any changes to its credit rating from the date on which it was initially granted to the end of the end of the reporting date. There is a limited risk of credit concentration as the customer base is diversified and unrelated. Depreciation is determined on the basis of a risk assessment carried out by the management of each subsidiary and reviewed at Group level, and is presented below for the 2013 and 2014 fiscal years: 1 January 2013 Appropriations Reversals Change in scope Other changes 31 December 2013 Trade receivables and related accounts (150) (66) (44) Other receivables Total (150) (66) (44) 31 December 2013 Appropriations Reversals Change in scope Other changes 31 December 2014 Trade receivables and related accounts (44) (46) (52) Other receivables Total (44) (46) (52) On the basis of its experience and in view of its commercial loan recovery policy, the Group estimates that the level of depreciation for the fiscal year matches the risk involved. The following table summarises all late payments under the Trade and other receivables line item as well as provisions set aside for disputes and defaults relating to billed customers: In thousands of euros 31 December December 2013 Not past due 4,167 3,

169 Overdue receivables not impaired 890 2,069 Less than 60 days 318 1,386 From 60 to 90 days From 90 to 120 days More than 120 days Impaired receivables Total trade receivables 5,112 5,778 Cash and cash equivalents Cash and cash equivalents consist exclusively of securitised investments such as UCITS, unit trusts and short-term investments. Investments are mostly made in Viadeo SA. Market risk Market risk corresponds to the risk that price movements such as exchange rates and interest rates affect the Group s profit. The management of market risk is designed to manage and control exposure to market risk within acceptable limits, while optimising the profitability/risk ratio. Interest rate risk Interest rate risk is managed by the Group s Accounts department which is in charge of determining subsidiaries recurring requirements and surpluses and arranging adequate external financing. Translation risk The Group is active internationally and is therefore subject to currency exchange risk originating from various exposures in currencies other than the euro, which is its functional and presentation currency. Operating result and the assets of Chinese and Russian entities in particular, as well as the Group s liquidities are subject to exchange rates fluctuations, primarily to fluctuations in the euro/yuan et euro/dollar exchange rates. Assuming a 5% rise in the value of the dollar, the Group estimates that the net impact on operating income for the fiscal year ending 31 December 2014 would have been a gain of about 94 thousand. Assuming a 5% rise in the value of the yuan, the Group estimates that the net impact on operating income for the fiscal year ending 31 December 2014 would have been a loss of about 286 thousand. Exposure to exchange rate fluctuations in the 2013 and 2014 fiscal years was limited in view of the relative weight of the Chinese segment in the Group s accounts. Exposure to exchange rate fluctuation in subsequent financial years might be limited naturally due to cash inflows and outflows in a single currency. The Group did not hedge any of its transactions in the periods presented. 169

170 Liquidity risk To manage the liquidity risk that could result from financial liabilities falling due, whether at their contractual due date or prematurely, the Group has implemented a prudent financing policy based in particular on investing its surplus available cash flow into risk-free investments. Liquidity risk management is handled by the Group s Accounts department, which provides adequate short- or long-term financing to the Group s subsidiaries. Liquidity is optimised by centrally managing the cash surpluses and requirements of the Group s subsidiaries. This is done by means of intra-group loans in compliance with local regulations. Surplus consolidated cash flow is managed with liquidity and yield optimisation in mind. External financing is also managed centrally by the Group s Accounts department, thus allowing for costs to be optimised. Non-discounted contractual cash flows (principal and interest) on outstanding financial liabilities by date of maturity are broken down as follows: In thousands of euros 31/12/2014 Carrying amount < 1 year 1 to 5 years > 5 years Convertible bonds debt component 0 Borrowings from credit institutions Coface advance Oséo advance 0 0 Other borrowings and similar debts Elimination link intercompany balance sheet LT financial 0 0 NON-CURRENT COSTS Factor debt Borrowings from credit institutions portion due in < 1 year Coface advance - - Oséo advance Bank overdrafts (cash liability) 3 3 Accrued interest liability 1 1 Bonds portion due in < 1 year - - FC balance sheet adjustment (current) - - Issue of shares and government advances portion due in < 1 year - - Other borrowings and similar debts < 1 year - - Current Bank overdrafts (debt) - - CURRENT Risks resulting from early repayment clauses on account of covenants In December 2010, the Group took out a 450 thousand loan from HSBC France, redeemable on a monthly basis over 60 months from the date on which it came into effect. This loan contains clauses (covenants) requiring compliance with several financial provisions. 170

171 The clauses entail: maintaining total equity of at least 15,000; maintaining an equity/total assets ratio of over 20%; maintaining a financial expenses (corrected for lease financing)/ebitda ratio of over 30%. Failure to comply with these covenants enables the lender to demand early repayment of the loans. At year-end, the Group complied with the ratios set out in the bank s documentation. 171

172 Note 27: Statutory auditors fees KPMG Grant Thornton In thousands of In thousands of As a % As a % euros euros Statutory audit, certification of separate and consolidated financial statements - Issuer % 63% % 63% - Fully consolidated subsidiaries 30-33% 0% - - 0% 0% Other procedures and services directly related to the work of the Statutory Auditors - Issuer 13 0% 37% 13 0% 37% - Fully consolidated subsidiaries - - 0% 0% - - 0% 0% Total statutory work of Statutory Auditors % 100% % 100% Other services provided by the network to fully consolidated subsidiaries - Legal, tax, social Other Total other services Total % 100% % 100% Note 28: Group scope of consolidation 31/12/ /12/2013 Consolidated entities in 2014 Country % control Consolidation method % interest % control Consolidation method % interest Viadeo SA France 100% Full consolidation 100% 100% Full consolidation 100% Viadeo Ltd United Kingdom 100% Full consolidation 100% 100% Full consolidation 100% Wayson Ltd People s Republic of China 100% Full consolidation 100% 100% Full consolidation 100% Tianji Boren People s Republic of China 100% Full consolidation 100% 100% Full consolidation 100% Yingke People s Republic of China 100% Full consolidation 100% 100% Full consolidation 100% Apnacircle Infotech (1) India 100% Equity method 100% 100% Full consolidation 100% Sabri France 100% Full consolidation 100% 100% Full consolidation 100% APVO Corp. USA 100% Full consolidation 100% 100% Full consolidation 100% Viadeo Maroc Morocco 100% Full consolidation 100% 100% Full consolidation 100% Soocial (2) Netherlands % Full consolidation 100% Viadeo Independant Media BV Netherlands 50% Equity method 50% 50% Equity method 50% Viadeo Independant Media LLC Russia 50% Equity method 50% 50% Equity method 50% (1) See Note 6.2 (2) Liquidated in

173 4.2 Separate financial statements of Viadeo SA for the year ended 31 December 2014 ASSETS Year ended 31/12/2014 (12 months) Previous year ended 31/12/2013 (12 months) Gross Amort. & Prov. Net % Net % Uncalled committed capital (0) Fixed assets Start-up costs Research and development Concessions, patents, trademarks, software and similar rights 1,828,644 1,171, , ,087, Business Other intangible assets 226, , , Advance payments on intangible assets Grounds Buildings Plant, machinery and industrial equipment Other property, plant and equipment 824, , , , Construction in progress Advances and instalments Investments valued using the equity method Other investments 11,920,868 1,067,197 10,853, ,151, Receivables related to equity investments 27,466,926 Other locked-up securities 179,461 16,012 27,466, ,246, Loans 163, Other financial assets 1,067,962 1,067, ,147, TOTAL (I) 43,515,456 2,780,231 40,735, ,420, Current assets Raw materials, supplies Production of goods in progress Production of services in progress Intermediate and finished products Goods Advances and downpayments on orders 11,242,733 52,064 11,190, ,489, Trade and other receivables Other receivables. Receivables from suppliers 87,496 87, Personnel 5,800 5, , Social security bodies 40,933 40, , State, income taxes 1,564,628 1,564, ,630, State, taxes on revenue 508, , , Other 355, , , Uncalled committed capital, unpaid 19,000, ,000, Marketable securities 19,000,000 Cash instruments Cash and cash equivalents 2,544,820 2,544, ,075, Prepaid expenses 650, , , TOTAL (II) 36,001,769 52,064 35,949, ,029, Charges to be allocated over several years (III) Redemption premiums on bonds (IV) Translation reserve assets (V) 14,786 14, , TOTAL ASSETS (O to V) 79,532,011 2,832,295 76,699, ,451,

174 LIABILITIES Year ended 31/12/2014 (12 months) Previous year ended 31/12/2013 (12 months) Shareholders equity 200, , Social or individual capital (of which paid up: 200,563) 63,703, ,152, Additional paid-in capital, merger, contribution premiums, etc. Revaluation differences Legal reserve Statutory or contractual reserves Regulated reserves Other reserves Retained earnings -4,892, Net profit/(loss) for the year (3,484,834) (5,424,965) Investment subsidies 716, , Regulated provisions TOTAL (I) 61,135, ,630, Proceeds from the issue of equity securities Conditional advances TOTAL (ll) Provisions for contingencies and losses 888, , Provisions for contingencies Provisions for losses TOTAL (Ill) 888, , Borrowings Convertible bonds Other bonds Borrowings from credit institutions 260, , Borrowings Overdrafts, bank borrowings Borrowings and other financial liabilities. Miscellaneous 783, , Associates Advances and downpayments on orders in progress Trade and other payables 4,100, ,835, Tax and social security liabilities. Personnel 1,147, ,074, Social security bodies 1,442, ,623, State, income taxes. State, taxes on revenue 979, , State, guaranteed bonds. Other taxes, duties and similar 315, , Debts on fixed assets and similar 1,980, ,597, Other liabilities Cash instruments Deferred income 3,651, ,409, TOTAL (IV) 14,662, ,923, Translation differences liabilities 12, , (V) TOTAL EQUALITY AND LIABILITIES (I to V) 76,699, ,451,

175 INCOME STATEMENT Year ended 31/12/2014 (12 months) Previous year ended 31/12/2013 (12 months) Absolute change (12/12) % France Export Total % Total % Change % Goods sold Production of goods sold Production of services sold 12,061,463 10,923,169 22,984, ,325, Net revenue 12,061,463 10,923,169 22,984, ,310, ,325, Stored production Capitalised production 499,168 2,17 621, (122,626) Operating subsidies 15,425 0,07 5, , Reversal of amortisation and provisions, transfer of 713,777 3,11 196, , charges Other income 122,759 0,53 152, , Total operating revenue (I) 24,335, ,88 29,286, (4,950,314) Purchases of goods (including customs duties) Change in inventories Purchases of raw materials and other supplies Change in inventories (raw materials and other supplies) 9,292,442 40,43 11,321, (2,029,345) Other purchases and external expenses 601,325 2,62 727, (125,818) Taxes and similar payments 11,527,619 50,15 13,327, (1,800,298) Wages and salaries 5,114,748 22,25 5,977, (862,917) Social security expense 716,544 3,12 719, , Charges to provisions for contingencies and losses Charges to provisions for impairment of assets 45,565 0,20 34, , Charges to provisions for current assets 614,635 2,67 893, (279,118) Other charges 42,148 0,18 39, , Total operating expenses (II) 27,955, ,62 33,041, (5,086,421) OPERATING INCOME (I-II) (3,619,268) -15,74 (3,755,374) , Share of earnings of joint operations Income allocated or loss transferred (III) Loss incurred or profit transferred (IV) Financial income from equity investments Income from other securities and receivables 44, , , Other interest and similar income 73,356 0,32 32, , Reversals of provisions and transfers of expenses 2,673,656 11,63 810, ,863, Foreign exchange gains 77,778 0,34 187, (109,789) Net income from sales of investment securities Total financial income (V) 2,869,690 12,49 1,068, ,801, Amortisation and charges to provisions for financial 30,798 0,13 2,632, (2,601,482) items Interest and similar expense 127,632 0,56 481, (354,204) Foreign exchange losses 53,541 0,23 201, (148,056) Net expense on sales of investment securities Total financial expense (VI) 211,971 0,92 3,315, (3,103,742) NET FINANCIAL INCOME/(LOSS) (V-VI) 2,657,719 11,56 (2,247,237) ,904, PROFIT/(LOSS) BEFORE TAX (I-II+III-IV+V-VI) (961,548) -4,17 (6,002,611) ,041, Extraordinary income from management transactions 23,872 0,10 11, , Extraordinary income from capital transactions 76,451 0,33 76,451 N/M Reversals of provisions and transfers of expenses 63, , (196,561) Total exceptional income (VII) 164,025 0,71 272, (108,136) Extraordinary expenses on management transactions 267,518 1,16 272, (5,349) Extraordinary expenses on capital transactions 2,874,598 12,51 67, ,806,949 N/M Exceptional depreciation, amortisation and provisions 95,391 0,42 140, ,

176 INCOME STATEMENT (continued) Year ended 31/12/2014 (12 months) Previous year ended 31/12/2013 (12 months) Absolute change (12/12) % Total exceptional expenses (VIII) 3,237, , ,756, EXCEPTIONAL INCOME/(LOSS) (VII-VIII) ,09 (208,569) (2,864,913) N/M Employee profit-sharing (IX) Income tax (X) (550,197) (786,215) , Total exceptional income (I+Ill+V+VII) 27,369, ,626, (3,257,237) Total exceptional expenses (II+IV+VI+VIII+IX+X) ,08 36,051, (5,197,367) NET INCOME (3,484,834) 134,24 (5,424,965) ,940, Including equipment leasing Loss Loss Including property leasing 88, , NOTES To the balance sheet before distribution for the year ended 31 December 2014, the total of which is 76,699,716, and to the income statement for the year, showing a loss of 3,484,834, presented in list form. The fiscal year had a duration of 12 months, covering the period from 1 January 2014 to 31 December The notes and tables below are an integral part of the annual financial statements. The previous year was a period of 12 months from 1 January 2013 to 31 December

177 SUMMARY ACCOUNTING RULES AND METHODS - General - Preferred method - Changes of method - Highlights of the year NOTES TO BALANCE SHEET ITEMS - Statement of fixed assets - Statement of depreciation and amortisation - Statement of provisions - Statement of maturity of receivables - Statement of maturity of borrowings Information and comments on: - Items relating to several balance sheet items - Income and credits to be received - Accrued expenses and credit notes to be issued - Accrued and deferred income - Structure of share capital - Statement of changes in equity NOTES TO THE INCOME STATEMENT - Operating income - Financial income/(expense) - Exceptional income/(expense) 177

178 OTHER INFORMATION - Subsequent events - Equipment leasing - Financial commitments - Information on risks - Increases and reductions in future tax liabilities - Identity of the consolidating parent company - Management compensation - Average number of employees - List of subsidiaries and affiliates 178

179 ACCOUNTING RULES AND METHODS GENERAL General accounting conventions were applied in compliance with the principle of prudence, in accordance with the basic assumptions: - going concern; - consistency of accounting methods from one year to another; - independence of fiscal years, and with the general rules for preparing and presenting annual financial statements. The basic method used to measure items recorded in the financial statements is the historical cost method. The main methods used are: Use of estimates The preparation of financial statements in French GAAP led the management of the Company to make estimates and assumptions that affect the carrying amount of certain assets and liabilities, income and expenses, and the information provided in certain notes. These assumptions are by nature uncertain, and actual results may differ from these estimates. Management regularly reviews its estimates and assessments to take into account past experience and to integrate factors deemed relevant in light of economic conditions. The main estimates and assumptions used concern the assessment of the following items: - intangible and financial assets; - receivables; - provisions, and comply with recommendations of the French National Accounting Board and the Order of Chartered Accountants. Capitalisation of development costs The Group also took account of risk factors derived from the forecasts and retained assumptions on the probability of success of its research and development projects currently underway. 179

180 Going concern The Board of Directors chose to prepare the financial statements on a going concern basis in view of the Company s financial capacity in respect of its financing needs for the next 12 months. Provisions for contingencies and losses Provisions for contingencies and losses are recognised when, at the end of the year, the Company has an obligation in respect of a third party involving the probable or certain outflow of resources embodying economic benefits for the third party. The estimated amount shown in provisions represents the outflow of resources that the Company is likely to incur to settle its obligation. The major part of provisions for contingencies and losses recognised by the Company cover the estimated costs of litigation, claims or actions by third parties or former employees. Property, plant and equipment and Intangible assets Property, plant and equipment is stated at acquisition or production cost, taking into account the costs necessary to bring the assets into use, and after deduction of commercial discounts, rebates and discounts obtained on payments. The following decisions were taken in respect of the presentation of the annual financial statements: - decomposable assets: the Company was not able to identify any decomposable assets, or their decomposition does not have a material impact; - non-decomposable assets: benefiting from measures of tolerance, the Company has opted to maintain the customary periods for amortisation of non-decomposed assets. Intangible assets are also stated at acquisition or production cost. Internal and external software has an amortisation rate of 20% on a straight-line basis, i.e. five years for all acquisitions or capitalisations until 31 December Since 1 January 2009, the period has been three years. The development costs of new features of the software are capitalised when the following criteria are fully satisfied (Regulation CRC ): - the technical feasibility necessary for completing the intangible asset so that it can be used or sold; - the intention to complete the intangible asset for the purpose of use or sale; - the capacity to use or sell the intangible asset; - how the intangible asset will generate probable future economic benefits; - the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; - the ability to measure reliably the expenses attributable to the intangible asset during its development. 180

181 In case of non-compliance with any of these criteria, development costs are expensed in the period in which they are incurred. Interest on financing specific to the production of fixed assets is not included in the production cost of these assets. Depreciation period and method Depreciation is calculated on a straight-line basis over the expected life: Software Patents, trademarks Fixtures, land improvements Motor vehicles Office and computer equipment Furnishings 3 years 3 to 5 years 5 years 5 years 3 years 5 years The Viadeo software VIADEO SA s core business is the operation of professional services (recruitment, advertising, and IT) generated by the professional social networking platform on the Internet, and providing related or social networking services contributed on 1 December 2005 by SAS Agregator, headquartered at 32 rue de la Bienfaisance, Paris. The net assets contributed (software developed as of 1 December 2005, VIADUC brand and domain) was valued at 340, On 15 August 2010, VIADEO transferred to its American subsidiary APVO, through a partial asset transfer, the OS&P (Online Subscription and Platform) functionality of its VIADEO internal software for a net amount of 2,055, The other functionalities of the VIADEO software remain the property of VIADEO SA, and were valued at 436, as of 31 December As of 31 December 2014, Recruitment & Advertising services were carried under balance sheet assets at 1,789,374. Financial investments and securities The gross value of equity securities and other investment securities included in assets consists of the purchase price plus acquisition costs. When the inventory value is lower than the carrying amount, an impairment loss is recognised for the difference. 181

182 The inventory value of the securities corresponds to their value in use for the Company. It is determined in light of a multi-criteria analysis based on net assets, profitability and future prospects. The related receivables are stated at their nominal value. Impairment is recognised when the inventory value is lower than the nominal amount. Securities are impaired before the debts attached to them. In addition, the Company ensures that commitments to subsidiaries are covered by a provision for risks if necessary. Accelerated depreciation is recognised on securities acquisition costs over a period of five years. Marketable securities are stated at their acquisition cost. Impairment is recognised when the probable market value is less than the amount at which they were first recorded as assets. Financial assets amounted to 39,552 thousand and consist in the amount of 27,281 thousand in equity investments and loans to subsidiaries and affiliates of the Wayson subsidiary. One of the methods used by the Company to value Wayson is the discounted cash flow method. The main assumptions used to estimate these flows are: Discount rate 31/12/ % Breakdown of the discount rate 31/12/2014 Risk-free rate 3.80% Risk premium 7.00% Beta 1.5 The cash flow projections were produced on the basis of an assumption of average growth in revenue for the period over five years of 61.4% per year and a perpetual growth rate of 5%. An one-basis point increase in the discount rate would not lead to an impairment loss. A one-basis point decrease in the perpetuity growth rate would not lead to an impairment loss. Recognition of revenue Revenue from advertising campaigns consisting of banners posted on the Company s website is recognised as the campaigns progress. Job advertisements generate revenue when they are posted, whereas recruitment and training solutions are recognised pro rata temporis based on the period of services. 182

183 The rebilling of corporate costs to subsidiaries relates primarily to IT services, and are recognised as and when services are performed. The application of these principles gives rise to the recognition of unbilled services and deferred income when invoices are not issued in the same period as the services are performed. Operating receivables and payables Receivables and payables are stated at their nominal value. Impairment is recognised when the inventory value is lower than the carrying amount. Payment for recruitment subscriptions (profilthèques) is made at the beginning of the service, and may be spread for up to 12 months. Prepaid income is recorded accordingly. The Company assigns part of its receivables to a factoring Company. The factor provides debt recovery services, and can also guarantee them as appropriate. Factoring provides liquidity and is paid a commission on the amount of invoices assigned. Foreign currency transactions Expenses and income in foreign currencies are recorded at their counter-value at the date of the transaction. Liabilities, receivables and cash in foreign currencies are recorded in the balance sheet at their countervalue at the year-end. The difference resulting from the translation of foreign currency payables and receivables at the closing rate is recognised in the balance sheet under Translation differences. Unrealised foreign exchange losses that are not offset are subject to provision in full. Tax credits - Research tax credit: The French government grants investment tax credits to companies as incentives to carry out technical and scientific research. Companies with demonstrable expenditure meeting the relevant requirements (research expenditure undertaken in France or, from 1 January 2005, within the European Community or in another State that is party to the European Free Trade Area Agreement and that has entered into a tax agreement with France containing an administrative assistance clause) benefit from a tax credit against income tax for the financial year in which expenditure was incurred and in the following three financial years; amounts exceeding taxes otherwise due are refunded where applicable. The amount of the research tax credit in respect of 2014 financial year was 535,

184 - Competitiveness and employment tax credit: Pursuant to legislation in force and analysis of the ANC, it has been decided to offset the amount of the competitiveness and employment tax credit determined by the legal rules against personnel expenses. The purpose of this tax credit is to finance the improvement of the competitiveness of the Company, notably by allowing it to restructure its working capital. The amount of the competitiveness and employment tax credit in respect of 2014 financial year was 136,653. ACCOUNTING PREFERRED METHOD In accordance with the preferred method (CUCNC Opinion No D of 21 December 2000), capital increase expenses were offset against the share premium resulting from the increase. These costs are charged net of the tax effect on the share premium. Given the absence of tax expense, they were charged in their gross amount. CHANGES OF METHOD The annual financial statements were prepared in accordance with the same valuation and presentation methods as for the previous year. The annual financial statements were prepared in accordance with the ANC regulation No approved by the order of 8 September 2014 on the General Accounting Plan. HIGHLIGHTS OF THE YEAR January 2014: issue of a 5 million convertible bond subscribed by certain Company shareholders, namely the two founders (Thierry Lunati and Dan Serfaty), Ventech, Idinvest Partners, Bpifrance Participations, Angyal, TMM Consulting, Global Internet Ventures LLC and Financière WM. These convertible bonds may be converted into shares on the date of the initial listing of the Company s shares. February 2014: issue of a 0.5 million convertible bond in favour of an investor who is a natural person. These convertible bonds may be converted into shares on the date of the initial listing of the Company s shares. February 2014: appointment by the Board of Directors of Dan Serfaty as Chairman and Chief Executive Officer of Viadeo SA and Thierry Lunati as Deputy Chief Executive Officer of Viadeo SA. May 2014: issue of a 5 million convertible bond in favour of a new investor, A Capital. These convertible bonds may be converted into shares on the date of the initial listing of the Company s shares. 184

185 May 2014: appointment of A Capital Switch as a member of the Board of Viadeo SA. May 2014: registration by Viadeo of its document de base issued in support of its initial public offering on the regulated market of Euronext Paris Compartment B. June 2014: grant of the AMF visa on the prospectus relating to the IPO. July 2014: completion by the Company of the issue of 1,287,737 new shares as part of an Open Price Offer (OPO), the settlement/delivery of which took place on 4 July The Company s shares were admitted to trading on compartment B of the regulated market of Euronext Paris under the ISIN code FR and the mnemonic VIAD on 7 July The price of the Open Price Offer and global placement was set at per share (par value of 0.02 and premium of 17.08). July 2014: immediately prior to the initial listing of the shares of the Company (i.e. on 4 July 2014), convertible bonds in the amount of 10.7 million (par value and accrued interest) were converted into 831,691 new shares (based on the offer price less a discount of 25%), increasing the Company s share capital in the same amount. The conversion covered 105,500 bonds converted into 831,691 new shares at an issue price of per share (par value of 0.02 and premium of 12.81). The two aforementioned transactions, namely the conversion of convertible bonds and the IPO, resulted in capital increases worth a total of 42,389 in par value and 32,648,510 in share premiums. July 2014: implementation of a liquidity agreement with Invest Securities. The contract came into effect on 24 July 2014 for a period of 12 months. Its purpose is to facilitate trading in Viadeo shares in accordance with the Charter of Ethics of the AMAFI, recognised by the Autorité des Marchés Financiers. The resources made available under this contract and credited to the liquidity account amounted to 300,000 (three hundred thousand euros) in cash. As of 31 December 2014, the liquidity account contained the following assets: - 25,619 Viadeo shares ; - 77, September and December 2014: signature of two amendments relating to the lease agreement of 14 March 2013 with La Mondiale to enable the Company to return ahead of schedule the vacant premises located on the third and fourth floors of the building located at 65 rue de la Victoire, Paris. 185

186 August 2014: resignation of Derek Ling and William Johnston from their positions as director, effective on 6 August 2014 and 27 August 2014 respectively. December 2014: finalisation of the liquidation of Soocial BV on 31 December Warrants were exercised as follows in 2014 financial year: 7,428, 13,140 and 4,338 under the BCE 02, BCE 03 and BCE 04 plans respectively. This resulted in a capital increase of in par value and 202, in share premiums. 186

187 NOTES TO BALANCE SHEET ITEMS 2014 Annual Financial Report STATEMENT OF ASSETS (1/2) Increases Gross value of assets at the beginning of year Revaluation during the year Acquisitions, creations, transfers between items Start-up, research and development expenses Other intangible assets 1,996, ,008 Total intangible assets 1,996, ,008 Land Constructions on own land Constructions on land belonging to other owners General facilities, fixtures and buildings Technical facilities, production equipment and machinery Other plant, fixtures and fittings 361,710 17,563 Motor vehicles 25,186 Office and computer equipment, furniture 450,024 44,717 Recoverable and other packaging Property, plant and equipment in progress Advance payments Total property, plant and equipment 836,921 62,280 Investments valued using the equity method Other investments 15,194,168 Receivables related to equity investments 19,246,372 8,223,229 Other investment securities 0 179,461 Loans 583 Other non-current financial assets 1,147, ,774 Total financial assets 35,588,694 8,631,464 Other investment securities TOTAL ASSETS 38,421,777 9,543,

188 STATEMENT OF ASSETS (2/2) Reductions Gross value Revaluation Leg. By transfer between items By sale or scrapping Assets at year-end Original value at year-end Start-up, research and development expenses Other intangible assets 349, ,159 2,055,381 Total intangible assets 349, ,159 2,055,381 Land Constructions on own land Constructions on land belonging to other owners General facilities, fixtures and buildings Technical facilities, production equipment and machinery Other plant, fixtures and fittings 47, ,362 Motor vehicles 25,186 Office and computer equipment, furniture 26, ,310 Recoverable and other packaging Property, plant and equipment in progress Advance payments Total property, plant and equipment 74, ,859 Investments valued using the equity method Other investments 824,024 2,449,276 11,920,868 Receivables related to equity investments Other Other investment investment securities securities 2,676 27,466, , ,461 Loans 583 Other non-current financial assets 308,384 1,067,961 Total financial assets 824,024 2,760,919 40,635,215 TOTAL ASSETS 1,173,654 3,276,420 43,515,

189 STATEMENT OF DEPRECIATION (1/2) Situations and movements during the year Start of year Allowances during the period Items removed, reversed End of year Start-up, research expenses Other intangible assets 828, , ,506 1,171,641 Land Constructions on own land Amortisation of intangible assets 828, , ,506 1,171,641 Constructions on land belonging to other owners General facilities, fixtures and buildings Technical facilities, production equipment and machinery General facilities, fixtures and other 139,993 64,156 47, ,239 Motor vehicles 24, ,186 Office and computer equipment, furniture 269,163 96,420 21, ,955 Recoverable and other packaging Depreciation of property, plant and equipment 433, ,545 69, ,381 TOTAL DEPRECIATION 1,261, , ,043 1,697,

190 STATEMENT OF DEPRECIATION (2/2) Breakdown of depreciation and amortisation for the year Movements affecting provisions for accelerated depreciation Straightline Declining balance Exceptional Appropriat ions Reversals Start-up, research expenses Other intangible assets 554,999 Land Constructions on own land Amortisation of intangible assets 554,999 Constructions on land belonging to other owners General facilities, fixtures and buildings Technical facilities, production equipment and machinery General facilities, fixtures and other 64,156 Motor vehicles 969 Office and computer equipment, furniture 96,420 Recoverable and other packaging Depreciation of property, plant and equipment 161,545 TOTAL DEPRECIATION 716,

191 STATEMENT OF PROVISIONS PROVISIONS Start of year Increase, allowances Reductions Reversals* End of year For reconstitution of deposits For investment Accelerated depreciation 685,015 95,391 63, ,705 Other regulated provisions Total regulated provisions 685,015 95,391 63, ,705 For litigation with employees 497, , , ,978 For customer guarantees For fines and penalties For foreign exchange losses 1,487 14,786 1,487 14,786 For pensions and obligations For tax For charges on paid leave Other provisions 396, ,159 Total provisions for contingencies and losses 895, , , ,764 On intangible assets On property, plant and equipment On investment securities 3,739,367 2,672,169 1,067,197 On other financial assets 16,012 16,012 On inventories and work in progress On receivables 44,043 45,565 37,544 52,064 Other impairment Total impairment provisions 3,783,410 61,577 2,709,713 1,135,273 TOTAL PROVISIONS 5,363, ,389 3,409,313 2,740,742 Of which allowances and reversals - operating 660, ,955 - financial 30,798 2,673,656 - exceptional 95,391 63,702 Of which amounts recovered during the year - on regulated provisions (operating) 63,702 - on provisions for C&L (operating) 480,519 - on provisions for impairment (financial) 2,449,

192 The provision of 396 thousand recorded in 2013 for the loss related to the non-use of the premises at 65 rue de la Victoire was reversed in full during the year. Reversals on investment securities include 2,406,769 for the reversal of a provision recorded in 2013 on Soocial securities following the completion of its liquidation at the end of STATEMENT OF MATURITY OF RECEIVABLES AT YEAR-END STATEMENT OF RECEIVABLES Gross amount Less than 1 year More than 1 year Receivables related to equity investments 27,466,926 27,466,926 Loans Other non-current financial assets 1,067,962 1,067,962 Doubtful or disputed receivables 55,736 55,736 Other trade receivables 11,186,998 11,186,998 Receivables representative of loaned securities Personnel and related accounts 5,800 5,800 Social security, other social bodies 40,933 40,933 State and other public authorities - Income taxes (research tax credit and 1,564,628 1,564,628 competitiveness - VAT and employment tax credit) 508, ,939 - Other taxes, duties and similar payments - Miscellaneous 49,580 49,580 Group and associates 14,670 14,670 Miscellaneous receivables 378, , ,738 Prepaid expenses 650, ,999 1,879 TOTAL 42,991,836 40,206,631 2,785,207 Amount of loans granted during the year Amount of loans repaid during the year 583 Loans and advances to associates 192

193 STATEMENT OF MATURITY OF PAYABLES AT YEAR-END STATEMENT OF DEBTS Gross amount Less than 1 year More than 1 year Less than 5 years More than 5 years Convertible bonds Other bonds Borrowings from credit institutions: Less More than than 1 one year year 260, ,451 56,340 Borrowings and other financial liabilities 783, ,504 Trade payables and related accounts 4,100,857 4,100,857 Personnel and related accounts 1,147,913 1,147,913 Social security and other social bodies 1,442,124 1,442,124 State and other public authorities - Income VAT taxes 979, ,006 - Guaranteed bonds - Other taxes and charges 315, ,611 Debts on fixed assets and similar Group and associates Other liabilities (1) 1,980,059 1,980,059 Debt representative of borrowed securities Deferred income 3,651,743 3,644,557 7,186 Borrowings subscribed during the year 10,619,304 Borrowings repaid during the year 10,764,543 Borrowings from associates TOTAL 14,662,410 13,815, ,030 (1) Of which 1,925 thousand in exchange for the mobilisation of the amount from the factor. 193

194 ITEMS RELATING TO SEVERAL BALANCE SHEET ITEMS Amount concerning the companies Amount of Linked With which the Company has capital ties payables and receivables represented by commercial paper Uncalled committed capital Advance payments on intangible assets Advance payments on property, plant and equipment Equity interests 10,063,521 1,847,347 Receivables related to equity investments 26,197,652 1,269,274 Loans Other investment securities Other non-current financial assets Advances and down payments on orders Trade and other receivables 5,167,002 77,133 Other receivables Called committed capital, unpaid Marketable securities Cash and cash equivalents Convertible bonds Other bonds Borrowings from credit institutions Borrowings and other financial liabilities Advances and down payments on orders in progress Trade and other payables 630,391 Tax and social security liabilities Debts on fixed assets and similar Other current liabilities 26,132 Income from equity investments Other financial income Financial expenses Transactions with related parties have been concluded by the Company on an arm s length basis. 194

195 INCOME AND CREDITS TO BE RECEIVED Amount of income and credits to be received included in the following balance sheet items Amount including VAT FINANCIAL ASSETS Receivables related to equity investments 101,648 Other non-current financial assets RECEIVABLES Trade and other receivables 2,646,325 Other receivables (including accrued credits: 112,686) 112,686 INVESTMENT SECURITIES CASH AND CASH EQUIVALENTS 48,658 TOTAL 2,909,317 ACCRUED EXPENSES AND CREDIT NOTES TO BE ISSUED Amount of accrued expenses and credit notes included in the following balance sheet items Amount including VAT Convertible bonds Other bonds Borrowings from credit institutions 1,116 Borrowings and other financial liabilities Trade and other payables 2,328,628 Tax and social security liabilities 2,196,269 Debts on fixed assets and similar Other receivables (including accrued credits) TOTAL 4,526,

196 ACCRUED AND DEFERRED INCOME Expenses Income Operating income/expenses 650,878 3,651,743 Financial income/expenses Exceptional income/expenses TOTAL 650,878 3,651,743 This item contains only deferred income usually associated with the Company s normal operations. STRUCTURE OF SHARE CAPITAL Number Par value Stocks/shares comprising the share capital at beginning of year 315, Stocks/shares issued during the year 9,712, Stocks/shares redeemed during the year Stocks/shares comprising the share capital at end of year 10,028, Basic earnings and diluted earnings per share are a negative The number of instruments deemed anti-dilutive giving deferred access to share capital was 1,340,201 as of 31 December

197 STATEMENT OF CHANGES IN EQUITY 31/12/2013 Appropriation Results Other changes 31/12/2014 Capital 110,374 90, ,563 Share premium 38,828,008 5,345,214 44,173,222 Bond conversion premium 4,547,189 14,205,282 18,752,472 Warrants (BSA) 777, ,417 Retained earnings (4,892,078) (5,424,965) 10,317,042 0 Regulated provisions 685,015 31, ,705 Income for the prior year (5,424,965) 5,424,965 0 Income for the financial year (3,484,834) (3,484,834) TOTAL SHAREHOLDERS EQUITY 34,630, ,504,582 61,135,545 The expenses resulting from the capital increase were charged to the share premium in the total amount of 2,932,124. Changes in equity are described in detail in the highlights of the year. 197

198 NOTES TO THE INCOME STATEMENT 2014 Annual Financial Report OPERATING INCOME Breakdown of net revenue Breakdown by business segment Amount Recruitment and training services 8,265, Marketing and advertising services 4,626, Rebilling of overheads to subsidiaries 10,061, Miscellaneous income 30, TOTAL REVENUE 22,984, Breakdown by geographical market Amount Revenue France 12,013, Revenue International 10,970, TOTAL REVENUE 22,984, Operating expenses Operating expenses include 1,033,288 in subcontracting expenses with related parties. Operating expenses amounted to 27,955 thousand, a decline of 5,086 thousand compared with This performance is mainly attributable to a reduction of 2,663 thousand in the payroll. The wage bill was reduced by 14% over the year. R&D spending totalled 499,

199 Statutory Auditors fees The Statutory Auditors fees included in the income statement break down as follows: Grant Thornton KPMG Total Statutory audit 60,000 60, ,000 Other procedures 7,500-7,500 Total 67,500 60, ,500 NET FINANCIAL INCOME/(EXPENSES) Financial income amounted to 2,869,690 and breaks down as follows: Revenues from receivables 73,356 Income from loans to related parties 44,900 Reversal of provision for impairment of Soocial securities 2,567,324 Reversal of provision for impairment of Soocial/Apna acquisition costs 104,845 Reversal of provision for foreign exchange loss 1,487 Translation differences and foreign exchange gains 77,778 Financial expenses amounted to 211,971 and breaks down as follows: Provision for impairment of financial assets 30,798 Interest on receivables financing 4,625 Translation differences and foreign exchange losses 53,541 Miscellaneous interest 3,

200 EXCEPTIONAL INCOME/(EXPENSES) Exceptional income amounted to 164,025 and breaks down as follows: Adjustment of third-party accounts 70,990 Reversal of accelerated depreciation 63,702 Exceptional expenses amounted to 3,237,508 and breaks down as follows: Net carrying amount of Soocial securities 2,449,276 Net carrying amount of deconsolidated software 229,653 Work contract termination indemnities 195,171 Allowances to accelerated depreciation 95,391 Transactional and other indemnities 213,712 Exceptional items are generated by events of an exceptional nature, i.e. not recurring and not within the current operations of the Company. FINANCIAL COMMITMENTS AND OTHER INFORMATION SUBSEQUENT EVENTS In Russia, following the decision of our partner Sanoma to withdraw from the area, a change in the ownership of the share capital of our Russian subsidiary Viadeo Independent Media LLC ( VIM LLC ) is expected in the first half of On 3 April 2015, the Group, which aims to continue its development in Russia, signed a Share Purchase Agreement (SPA) on the 50% of our subsidiary Viadeo Independent Media BV ( VIM BV ) previously held by Independent Media Holding BV, with a view to selling the shares in turn to a Russian partner in order to maintain a local presence considered essential to the success of operations in this area. Pursuant to the SPA, the conditions precedent having been lifted, the transaction will be finalised in May As requested by the Board of Directors of Viadeo SA, the Company has appointed BNY Mellon as custodian bank and Jones Day as legal counsel to launch an ADR programme (level 1) in the United States. The approval of the SEC was obtained on 27 April 2015, and the programme is now effective. 200

201 INFORMATION ON RISKS Translation risk The Company operates internationally, and is therefore subject to foreign exchange risk arising from exposure to various currencies other than the euro, primarily the United States dollar. Liquidity risk To manage the liquidity risk that could result from financial liabilities falling due, whether at their contractual due date or prematurely, the Group has implemented a prudent financing policy based in particular on investing its surplus available cash flow into risk-free investments. EQUIPMENT LEASING Fittings Equipment Tools Other Total Original value 314, ,441 Payments made - Total over prior years 171, ,045 - Year under review 88,555 88,555 Total payments made 259, ,600 Remaining payments: - less than 1 year: 61,908 61,908 - more than 1 year and less than 5 years - more than 5 years Total payable 61,908 61,908 Residual value: - less than 1 year - less than 1 year: - more than 1 year and less than 5 years 3,144 3,144 - more than 5 years Total residual value 3,144 3,144 Amount paid during the year 88,555 88,

202 FINANCIAL COMMITMENTS Commitments given Amount Discounted notes receivable Pledge of SICAV as collateral for the lease on the Victoire premises (SG) 452,088 Pledge of business goodwill as collateral for the bank loan (HSBC) 450,000 TOTAL COMMITMENTS GIVEN 902,088 Of which regarding - managers - subsidiaries - investments - other related companies Of which commitments with sureties 902,088 Given the age structure of the Company s workforce, its commitment in respect of pension liabilities has not been apprehended in accounting terms. For information, the amount is 158 thousand. There is also no commitment as regards long-service awards, and no bonuses are due in this respect. Under the terms of the 450 thousand loan contracted with HSBC, Viadeo is subject to banking covenants. As of 31 December 2014, it was in compliance with these covenants. Commitments received Amount Guarantees and warranties - Other commitments received - TOTAL COMMITMENTS RECEIVED - Of which regarding - managers - subsidiaries - investments - other related companies Of which commitments with sureties 202

203 INCREASES AND REDUCTIONS IN FUTURE TAX LIABILITIES Increases in future tax liabilities Amount INCREASES Regulated provisions Accelerated depreciation 716,705 Reductions in future tax liabilities TOTAL 716,705 REDUCTIONS Provisions not deductible in the year of recognition 34,534 TOTAL 34,534 IDENTITY OF THE CONSOLIDATING PARENT COMPANY Viadeo SA has benefited from the tax consolidation regime (Article 223 A of the French General Tax Code) since 1 January The tax group, of which it is the parent company, includes Viadeo SA and SABRI SARL. The tax consolidation agreement is based on the neutrality method, and places each member company of the tax group in the situation in which it would have been in the absence of consolidation. MANAGEMENT COMPENSATION The compensation of the management bodies is not disclosed, as this would tend to result in the disclosure of individual compensation. 203

204 AVERAGE NUMBER OF EMPLOYEES Salaried employees Personnel made available to the Company Managers 168 Supervisors and technicians 20 2 Employees Workers TOTAL As of 31 December 2014, the number of hours in respect of individual right to training under the French Labour Code was 8,

205 LIST OF SUBSIDIARIES AND AFFILIATES Subsidiaries and affiliates Share capital Social Shareholde rs equity % of share capital held Gross value of shares held Net value of shares held Loans/adv ances granted by the Company and not yet repaid Revenue excluding VAT in the last fiscal year Profit/(loss ) for the last fiscal year Dividends received by the Company during the year 1. Subsidiaries (more than 50% of share capital held): WAYSON US$0.13 US$ (31,349) 100% 3,249,175 3,249,175 24,032,57 6 US$600,00 0 US$74,854 0 APVO US$8,653, 562 US$(1,542, 885) 100% 6,787,640 6,787,640 2,165,075 US$19,236,889 US$2,584, VIADEO LTD 1 195, % ,356 12,540 0 SABRI SARL 8,000 10, % 22,200 22, ,621 35,246 0 APNACIRCLE INR 4,200,000 INR 14,109,292 (2013) 99.99% 1,442, ,646 INR 51,897,066 (2013) INR 3,237,755 (2013) 0 VIADEO MAROC MAD 50,000 MAD 172, % 4,504 4,504 MAD 3,978,865 MAD 170, Investments (between 10% and 50% of share capital held): VIADEO IM BV 18,000 2,409,595 50% 169, ,000 1,196,000 1,180 (138) 0 CBC US$1,716, 500 NM 11% 245, ,604 73,273 NM NM 0 205

206 4.3 Table of Statutory Auditors fees KPMG Grant Thornton In thousands of In thousands of As a % As a % euros euros Statutory audit, certification of separate and consolidated financial statements - Issuer % 63% % 63% - Fully consolidated subsidiaries 30-33% 0% - - 0% 0% Other procedures and services directly related to the work of the Statutory Auditors - Issuer 13 0% 37% 13 0% 37% - Fully consolidated subsidiaries - - 0% 0% - - 0% 0% Total statutory work of Statutory Auditors % 100% % 100% Other services provided by the network to fully consolidated subsidiaries - Legal, tax, social Other Total other services Total % 100% % 100% STATUTORY AUDITORS PRINCIPAL STATUTORY AUDITORS - KPMG AUDIT IS represented by Jean-Pierre Valensi Immeuble Le Palatin 3 cours du triangle, Paris La Défense Cedex KPMG AUDIT IS was appointed principal Statutory Auditor by the general shareholders meeting of 29 June 2012 for a term of six financial years. Its term of office will come to an end after the ordinary general shareholders meeting held to approve the financial statements for the year ended 31 December GRANT THORNTON represented by Vincent Frambourt 100 rue de Courcelles, Paris 206

207 GRANT THORNTON was appointed principal Statutory Auditor by the general shareholders meeting of 29 June 2012 for a term of six financial years. Its term of office will come to an end after the ordinary general shareholders meeting held to approve the financial statements for the year ended 31 December DEPUTY STATUTORY AUDITORS - KPMG AUDIT ID represented by Jean-Luc Decornoy Immeuble Le Palatin 3 cours du triangle, Paris La Défense Cedex KPMG AUDIT ID was appointed Deputy Statutory Auditor by the general shareholders meeting of 29 June 2012 for a term of six financial years. Its term of office will come to an end after the ordinary general shareholders meeting held to approve the financial statements for the year ended 31 December INSTITUT DE GESTION ET D EXPERTISE COMPTABLE (IGEC) represented by Vincent Papazian 3 rue Léon Jost, Paris IGEC was appointed Deputy Statutory Auditor by the general shareholders meeting of 29 June 2012 for a term of six financial years. Its term of office will come to an end after the ordinary general shareholders meeting held to approve the financial statements for the year ended 31 December

208 4.4 Statutory Auditors report on the consolidated financial statements To the shareholders, As Statutory Auditors to your Company, we hereby present our report for the year ended 31 December 2014 on: our audit of the accompanying consolidated financial statements of Viadeo SA; the justification of our assessments; the specific verification required by law. The consolidated financial statements have been approved by the Board of Directors. It is our responsibility to express an opinion on these consolidated financial statements, based on our audit. 1. Opinion on the consolidated financial statements We conducted our audit in accordance with professional standards applicable in France. These standards require that we perform such tests and procedures so as to obtain reasonable assurance that the consolidated financial statements are free from material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We consider that the elements we have collected are sufficient and adequate for us to form an opinion. In our opinion, the consolidated financial statements for the year fairly present, in all material respects, the net assets and liabilities, financial position and results of the consolidated group of companies, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. 2. Justification of our assessments In accordance with the requirements of Article L of the French Commercial Code relating to the justification of our assessments, we draw your attention to the following matters. In our audit of the consolidated financial statements for the year ended 31 December 2014, we found that goodwill, development costs and deferred tax assets are subject to significant accounting estimates by management. As indicated in Note 2.3 to the consolidated financial statements, these estimates are based on assumptions that are inherently uncertain. Actual outcomes are likely to differ, sometimes significantly, from the provisional data used. - On each balance sheet date, the Company conducts impairment testing of goodwill in accordance with accounting rules and methods described in Notes 2.9 and 3 to the consolidated financial statements. We have reviewed the terms of implementation of this impairment testing and the assumptions used, and have verified that Notes 2.9 and 3 to the consolidated financial statements provide the appropriate disclosures. 208

209 - Note 2.9 to the consolidated financial statements also explains the accounting rules and methods relating to the recognition of development costs. As part of our assessment of the accounting policies applied by the Group, we have examined the methods used for recognising assets, and the amortisation and depreciation of these costs, and have ensured that Notes 2.9 and 4 to the consolidated financial statements provide the appropriate disclosures. - Note 2.23 to the consolidated financial statements also sets out the accounting rules and methods relating to the recognition of deferred tax assets. As part of our assessment of the accounting policies applied by the Group, we examined the recognition of deferred tax assets. We have reviewed the projections of taxable income used to justify this recognition, and verified that Notes 2.23 and 22 to the consolidated financial statements provide the appropriate disclosures. These assessments were performed as part of our audit of the consolidated financial statements taken as a whole, and as such contributed to the formation of our opinion expressed in the first part of this report. 3. Specific verification In accordance with professional standards applicable in France, we have also performed the specific verification of the information provided in the Group s management report, as required by law. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements. The Statutory Auditors Paris La Défense, 29 April 2015 Paris, 29 April 2015 KPMG Audit IS Grant Thornton Member of Grant Thornton International Jean-Pierre Valensi Partner Vincent Frambourt Partner 209

210 4.5 Statutory Auditors report on the annual financial statements To the shareholders, As Statutory Auditors to your Company, we hereby present our report for the year ended 31 December 2014 on: our audit of the accompanying annual financial statements of Viadeo SA; the justification of our assessments; the specific verifications and information required by law. The annual financial statements have been approved by the Board of Directors. Our responsibility is to express an opinion on these financial statements, based on our audit. 1 Opinion on the annual financial statements We conducted our audit in accordance with professional standards applicable in France. These standards require that we perform such tests and procedures so as to obtain reasonable assurance that the annual financial statements are free from material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain evidence supporting the amounts and disclosures in the annual financial statements. An audit also includes assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We consider that the elements we have collected are sufficient and adequate for us to form an opinion. In our opinion, the annual financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as of 31 December 2014, and of the results of its operations for the year then ended in accordance with French accounting principles. 2 Justification of our assessments As required by the provisions of Article L of the French Commercial Code relating to the basis of our assessments, we draw your attention to the following matters. In our audit of the annual financial statements for the year ended 31 December 2014, we found that development costs and equity investments are subject to significant accounting estimates by management. As indicated under Use of estimates in the Accounting rules and methods note, these estimates are based on assumptions that are inherently uncertain. Actual outcomes are likely to differ, sometimes significantly, from the provisional data used. 210

211 - On its balance sheet, your Company has capitalised development costs relating to a professional social networking platform, and measures them in accordance with the methodology described under Intangible assets and property, plant and equipment in the Accounting rules and methods note. - The inventory value of the equity securities held by the Company and related receivables is determined using the methods described under Financial assets in the Accounting rules and methods note and according to the assumptions described in the Accounting rules and methods note. Based on the information made available to us, we evaluated the appropriateness of the accounting rules and methods used for the said estimates, the consistency of the data and assumptions on which they are based, and the appropriateness of the information disclosed in the notes. These assessments were performed as part of our audit of the annual financial statements taken as a whole, and as such contributed to the formation of our opinion expressed in the first part of this report. 3 Specific verifications and information We have also carried out the specific verifications required by French law in accordance with professional standards applicable in France. We have no matters to report as to the fair presentation and the consistency with the annual financial statements of the information given in the management report by the Board of Directors and in the documents sent to shareholders on the financial position and the annual financial statements. Concerning the information provided in accordance with the requirements of Article L of the French Commercial Code on compensation and benefits received by the directors and any other commitments made in their favour, we have verified its consistency with the information given in the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from companies that control it or are controlled by it. Based on this work, we attest to the accuracy and fair presentation of this information. 211

212 In accordance with French law, we have verified that the required information concerning the purchase of investments and controlling interests and the identity of the shareholders has been properly disclosed in the management report. The Statutory Auditors Paris La Défense, 29 April 2015 Paris, 29 April 2015 KPMG Audit IS Grant Thornton Member of Grant Thornton International Jean-Pierre Valensi Partner Vincent Frambourt Partner 212

213 4.6 Statutory Auditors special report on regulated agreements and commitments To the shareholders, In our capacity as Statutory Auditors of your Company, we hereby present our report on the regulated agreements and commitments. Our role is to report to you, on the basis of the information provided to us, on the principal terms and conditions of the agreements and commitments indicated to us, or that we may have identified in the performance of our assignment. We are not required to comment as to whether they are beneficial or appropriate or to ascertain the existence of any such agreements or commitments. Pursuant to the provisions of Article R of the French Commercial Code, it is your responsibility to evaluate the benefits resulting from these agreements and commitments prior to their approval. We are also required to report to you, where applicable, on the information referred to in Article R of the French Commercial Code related to the implementation of agreements throughout the year ended and commitments that have already been approved by you. We have performed the procedures we considered necessary with regard to the professional standards of the Compagnie nationale des commissaires aux comptes (the French national association of Statutory Auditors) relative to this assignment. These procedures consisted of checking that the information provided to us was consistent with the documents de base from which it came. AGREEMENTS AND COMMITMENTS SUBMITTED FOR APPROVAL BY THE GENERAL SHAREHOLDERS MEETING CALLED TO APPROVE THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Agreements and commitments authorised during the year Pursuant to Article L of the French Commercial Code, we have been advised of certain regulated agreements and commitments that have received prior authorisation from your Board of Directors. At the time of the IPO of Viadeo SA, your Company signed an underwriting agreement authorised by the Board of Directors on 1 July 2014 between Viadeo SA, Jefferies International Limited and Société Générale as joint lead managers and joint bookrunners, Oddo & Cie, as co-lead manager, and some shareholders of Viadeo SA wishing to sell shares in the Company as part of the offer. Directors concerned: 213

214 - Dan Serfaty, Chairman of the Board of Directors, and Director of Viadeo - Thierry Lunati, Deputy Chief Executive Officer - Idinvest Partners: Director - Ventech: Director - Bpifrance Participations: Director 2014 Annual Financial Report AGREEMENTS AND COMMITMENTS ALREADY APPROVED BY THE GENERAL SHAREHOLDERS MEETING Agreements and commitments that remained current during the past fiscal year and were approved by the shareholders meeting in prior years In accordance with Article R of the French Commercial Code, we were advised that the following agreements and commitments, approved in prior years by the general shareholders meeting, remained valid in Agreement with the company Kadomi Pursuant to the service contract signed on 1 October 2006 and its amendment of 30 June 2010, an amount of 164,500 has been billed by Kadomi to your Company, for the fiscal year 2014, for technical and functional services provided for the development of the website. This amount excludes taxes and outlays/business expenses, as the reimbursement of these expenses corresponds to the actual cost incurred and is not material. Director concerned: Thierry Lunati, Deputy Chief Executive Officer of Viadeo. Agreement with the company KDS Pursuant to the technical assistance agreement signed on 15 December 2005 and its amendment of 1 August 2010, an amount of 164,500 has been billed by KDS to your Company for the fiscal year This amount excludes taxes and outlays/business expenses, as the reimbursement of those expenses corresponds to the actual cost incurred and is not material. Director concerned : Mr Dan Serfaty, Chairman of the Board of Directors and VIADEO director. Agreement with China Biznetwork Corporation On 27 October 2011, your Company granted China Biznetwork Corporation a loan of US$75,150 at an interest rate of 5% per annum. This loan must be reimbursed upon the liquidation or initiation public offering of your Company. 214

215 Paris La Défense and Paris, 29 April 2015 KPMG Audit IS Grant Thornton Member of Grant Thornton International Jean-Pierre Valensi Partner Vincent Frambourt Partner 215