This document was printed on recycled paper. The Cegedim Group is contributing in this way to sustainable development.

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2 This document was printed on recycled paper. The Cegedim Group is contributing in this way to sustainable development.

3 WARNING Certain information other than historical contained in this Reference Document may concern objectives, projected data or unaudited financial projections. This information is sometimes identified by the use of the future or conditional tense and terms such as expect, may, assume, intend to, consider, anticipate, as well as other similar terms. This data is subject to risks and contingencies that may subsequently be expressed by actual data that is substantially different. By nature, it is possible that these objectives will not be achieved, and the prospective items on which they are based may prove partially or completely erroneous. This data is presented on the date of this Reference Document, and Cegedim S.A. assumes no obligation to update them due to a new event or for any other reason other than the applicable regulations Cegedim Reference Document 2007

4 Public limited company with a capital of 8,891, to 137, rue d Aguesseau Boulogne-Billancourt Cedex Trade and Companies Register of Nanterre NAF code: 6311 Z Telephone: + 33 (0) Fax: + 33 (0) Reference Document Copies of the Reference Document are available at Cegedim S.A., 137, rue d Aguesseau, Boulogne-Billancourt, or on the Cegedim S.A. web site: This Reference Document is a free translation in English of the French Reference Document filed with the Autorité des Marchés Financiers [French stock market Regulatory Authority - AMF] on April 29, 2008, in accordance with the provisions of Article of its General Regulations. It may be used in support of a financial operation if it is completed by a prospectus approved by the Autorité des Marchés Financiers Cegedim Reference Document

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6 Chapter 1 - Persons responsible Name and title of the person responsible for the Reference Document Statement of the person responsible for the Reference Document Auditors Alternate Auditors Market Risks Legal risks Industrial and environmental risks Legal and arbitration proceedings Insurance Chapter 5 - Information concerning the issuer History and development of the Company Investments Chapter 6 - Summary of Activities Main business activities Main markets Exceptional events that influenced the information provided in chapters 6.1. and Degree of dependency Information on which any declaration made by the issuer concerning its competitive position is based Chapter 7 - Organisational chart Cegedim Group and Cegedim s place within the Group List of Cegedim subsidiaries Chapter 8 - Real Estate, Production Plants and Equipment Significant, existing or planned tangible assets, including real estate leased and any major spending related to them Use of tangible assets and the environment Chapter 9 - Analysis of the financial position and earnings Description of and changes in Cegedim s financial position Operating earnings Chapter 10 - Cash Position and Capital Cegedim equity capital Borrowing terms and Cegedim financing structure Source and amount of Cegedim cash flow and description of these flows Restriction on the use of capital Expected sources of financing necessary to honor investment commitments (mentioned in points and 8.1) Chapter 11 - Research and development, patents and licenses Chapter 12 - Information concerning trends Chapter 13 - Profit projections or estimates Chapter 14 - Administrative and Management Bodies Name, business address and offices of the corporate officers Conflicts of interest in the administrative and management bodies Chapter 15 - Compensation and Benefits Total compensation and in-kind benefits paid individually, directly or indirectly, during the fiscal year to each corporate officer by Cegedim and by any company of the Group Total amounts allocated or accrued by the issuer or its subsidiaries for the purposes of paying pensions, retirement or other benefits Allocation of free shares Chapter 16 - Operation of the administrative and management bodies Expiry date and length of the current Directors terms of office Information concerning the service contracts binding the members of the administrative and management bodies to the issuer or to any of its subsidiaries and providing for the granting of benefits at the end of this contract Information concerning the audit committee and the compensation committee Compliance with the corporate governance system in effect in France Chapter 17 - Employees CEGEDIM Group workforce on the closing date Cegedim Reference Document

7 17.2 Managers interests in the capital and stock options Agreement providing for Cegedim employee equity participation plans Chapter 18 - Main Shareholders Shareholders Special voting rights Control of Cegedim Agreement that may result in a change in control Chapter 19 - Operations with related parties Chapter 20 - Financial Information Involving the Issuer s Assets, Financial Position and Earnings Historical financial information - Statutory financial statements Historical financial information - Consolidated financial statements Pro forma financial information Audit of annual historical financial information Date of the latest financial information Interim financial information Dividend distribution policy Legal and arbitration procedures Significant changes in the financial or commercial position Chapter 21 - Additional Information Share capital Deed of incorporation and bylaws Chapter 22 - Important Contracts Chapter 23 - Information from Third Parties, Declarations Filed by Experts and Declarations of Interest Chapter 24 - Publicly Available Documents Chapter 25 - Information on Trade Investments Chapter 26 - Appendices Management report on the operations for the fiscal year ended December 31, Appendices to the Management Report Auditors reports Text of the resolutions proposed to the annual ordinary General Meeting held on May 7, Cegedim Reference Document 2007

8 Chapter 1 - Persons responsible 1.1 Name and title of the person responsible for the Reference Document Jean-Claude Labrune Chairman and CEO Cegedim S.A. 1.2 Statement of the person responsible for the Reference Document I certify, after having taken all reasonable steps to this end, that to my knowledge, the information contained in this Reference Document is consistent with reality and does not comprise any omissions likely to alter its scope. I hereby certify that, to the best of my knowledge, the financial statements have been established in accordance with applicable accounting standards and give a true and fair view of the assets, financial position and earnings of the company and all of the companies included in the consolidation scope. I hereby certify that, to the best of my knowledge, the Management Report included in this document presents a true image of the change in business, earnings and financial position of the company and of all the companies included in the scope of consolidation as well as a description of the main risks and uncertainties that they are faced with. I received a final letter from the legal Auditors indicating that they had audited the information regarding the financial position and the information given in this Reference Document and that they had read the entire Reference Document. The Auditors letter does not contain any comments. The Auditors reports concerning the annual financial statements and the consolidated financial statements for fiscal year 2007 (which appear respectively in chapters and of this Reference Document) do not contain any comments. The Auditors reports concerning the consolidated financial statements and the statutory financial statements for fiscal year 2006 (which appear in the Reference Document filed with the Autorité des Marchés Financiers on April 23, 2007 under the number D ) and concerning the consolidated financial statements and the annual financial statements for fiscal year 2005 (which appear in the Reference Document filed with the Autorité des Marchés Financiers on June 27, 2006 under the number D ) do not contain any comments, except for the report on the 2005 annual financial statements, which contains a comment concerning the change in method resulting from the initial application, on January 1, 2005, of Regulation No of the CRC relative to assets depreciation and impairment. Drawn up in Boulogne-Billancourt, on April 28, 2008 Jean-Claude Labrune Chairman and CEO Cegedim S.A. Cegedim Reference Document

9 Chapter 2 - Legal auditors for the period covered by the historical financial information 2.1 Auditors Cabinet Mazars et Guérard represented by Mr. Jean-Paul Stevenard Exaltis, 61 rue Henri Regnault Courbevoie Renewal during the 2007 General Meeting approving the 2006 financial statements for a term of 6 years until the 2013 General Meeting approving the 2012 financial statements. Cabinet Grant Thornton represented by Mr. Michel Cohen 100, rue de Courcelles Paris Renewal during the 2007 General Meeting approving the 2006 financial statements for a term of 6 years until the 2013 General Meeting approving the 2012 financial statements. 2.2 Alternate Auditors M. Thierry Colin 39, rue de Wattignies Paris Renewal during the 2007 General Meeting approving the 2006 financial statements for a term of 6 years until the 2013 General Meeting approving the 2012 financial statements. IGEC - Institut de Gestion et d Expertise Comptable represented by Mr. Victor Amselem 3, rue Léon Jost Paris Renewal during the 2007 General Meeting approving the 2006 financial statements for a term of 6 years until the 2013 General Meeting approving the 2012 financial statements. Chapter 3 - Selected financial information Consolidated data 12/31/07 12/31/06 12/31/05 Sales Revenue ( M) Income from operations before non-recurring items ( M) Net earnings ( M) A Group share net earnings ( M) Cash flow ( M) Total Balance Sheet ( M) 1, Group share shareholders equity ( M) Number of shares outstanding 9,331,449 9,331,449 9,331,449 Number of shares excluding treasury shares 9,331,449 9,290,266 9,280,717 B Net earnings per share ( ) A / B Dividend per share( ) Closing price ( ) Market capitalization ( M) Cegedim Reference Document 2007

10 Chapter 4 - Risk factors In order to assess how the Group evaluates risks, as well as the procedures set up to monitor risks, it is also necessary to refer to the Report from the Chairman of the Board of Directors concerning the conditions for preparing and organizing the Board s work and concerning the internal control procedures, reproduced in full in the appendices to this Reference Document. 4.1 Market Risks Interest rates risk A loan for 350,000 K contracted at a variable rate was completely hedged by the implementation of a derivative rate instrument: From 05/09/2007 to 09/30/2008 = Cap at 4.10% for Euribor 3 months From 09/30/2008 to 09/30/2010 = Swap Rate set at 4.39% for Euribor 3 months From 09/30/2010 to 05/04/2013 = Cap at 4.69% for Euribor 3 months The loan for $200,000 K contracted at a variable rate was completely hedged by the implementation on September 21, 2007 of a variable rate swap receiver, 4.26% fixed rate payer for two years. Borrowing is monitored centrally. Only the parent company hedges borrowing with a swap when necessary. The amount of the loans exposed to an interest rate risk amounts to 140,000 K (revolver credit Euribor 3-month rate). The subordinated loan for 50,000 K to Financière Cegedim does not benefit either from interest rate hedging. Assessment of the interest rates risk (in thousands of ) A 1% increase in interest rates applied to the revolver credit of 140,000 K would have an impact of around 1.4iM on the Group s earnings before taxes Exchange rates risk 64% of the Group s activities are carried out by subsidiaries located in the Euro area, which means that s exposure to an exchange risk is relatively limited. The currencies representing a significant percentage of consolidated revenues are the pound sterling (10% of revenues) and the dollar (around 15%). There is no particular hedge preventing fluctuations in these currencies compared to the Euro, which could expose the Group to a more or less significant exchange rate risk depending on the years. Moreover, the Group contracted a $200 million loan for which there is no euro/dollar hedge Liquidity Risk The Group's non-operational cash risk is caused mainly by the due date of its bank loans giving rise to the payment of interest and the payment flows on financial instruments as well as on other debts not giving rise to the payment of interest. Cegedim Reference Document

11 4.1.4 Credit risk The Group s clients in the "Healthcare and strategic data" division (88% of consolidated sales) are essentially pharmaceutical companies, physicians, pharmacists and health insurance companies. They do not represent any significant counterparty risk. The activities acquired from the Dendrite Group completely belong to this division. 4.2 Legal risks Specific regulations Although the healthcare sector is highly regulated, as a service provider, the Cegedim Group is not subject to special regulations aside from the routine declarations made to the CNIL (or its local equivalents), relative to all of files and databases it owns or manages. The Group complies with the provisions set forth in the French data protection law of August 6, 2004 (which transposes into French law European Directive 95/46/EC of October 24, 1995, related to the protection personal information and the free circulation of this information). The Group s subsidiaries established in the European Union act in accordance with the national laws of the different States that set forth declaration obligations analogous to those established by the CNIL, in accordance with the above-mentioned Directive. Outside the European Union, the subsidiaries must also make declarations to the regulatory authorities in order to comply with the different laws related to data protection. Moreover, the public authorities do not have any specific right to access the information and data managed by the Group. The Group s International Legal Department centralizes and monitors the regulations in force and ensures that the subsidiaries comply with them Intellectual property Cegedim designs and produces all of its service offers using its own human, infrastructure and financing resources. The necessary operating assets are also owned by the Group. Thus the control of expertise is internalized. The related intellectual property rights (particularly trademarks and software) are centrally monitored by the Group s general management in order to ensure sufficient, adequate and up-to-date protection on an international scale. Employees with specific expertise are bound by a non-competition and confidentiality clause Other legal risks The confidentiality constraints imposed on the Group are directly related to these declarations. There are no ties or dependencies with other companies whose threshold is significant enough to have an appreciable impact on Cegedim (cf. also Chapter 6.4). The assets necessary for operations are held by the Cegedim Group. There are no special tax provisions applicable to the Group. To the Company s knowledge, there are no litigations that have not been covered by provisions in the financial statements likely to have or that have recently had a significant impact on the financial position, the earnings, the activity and the assets of the Company or the Group Cegedim Reference Document 2007

12 4.3 Industrial and environmental risks Industrial risks Operating in the sector of technologies and services tied to information and databases, the Cegedim Group s priority is to satisfy its clients and partners concerning systems and data security. The Chairman s report on internal control details the information system security measures implemented in the Cegedim Group. The industrial risks are also covered by adequate insurance policies Environmental risks Given their essentially intangible nature (software, databases, and intellectual services), the activities of the Cegedim Group have no significant environmental impact. Nevertheless, the Cegedim Group continues to implement actions specifically aimed at: Preserving energy resources via a reduction in indirect and direct consumption, specifically by mastering the fleet of vehicles and limiting the amount of business travel Optimizing the life cycle of manufactured goods by managing certain products end of life (paper, cardboard, IT equipment, cartridges, etc.) Progressively formalizing specific charters regarding Ethics, social and environmental sectors and security. 4.4 Legal and arbitration proceedings There are no government, legal or arbitration proceedings, including any proceedings Cegedim is aware of that have been suspended or with which Cegedim is threatened, that during the past 12 months might have or that recently had a significant impact on the financial position or the profitability of the Company or of the Cegedim Group. 4.5 Insurance Cegedim S.A. has taken out a contract from a recognized insurance company covering it and all the companies of the Group against all risks inherent to its professional and operational civil liability. To take into account the nature of the activities of the different subsidiaries, two levels of coverage were established: 7,622,450 for Cegedim S.A. (CRM activity), Cegedim Activ and Cegedim SRH Each foreign subsidiary of the Group (excluding the USA) has taken out coverage in the amount of 1,000,000 from a local insurer. Over and above this amount, the French coverage takes over 500,000 for the other companies and non-crm activities of the Group. Cegedim has also taken out from this same company a comprehensive policy covering all tenant risks in the amount of 1,725 /m² for all the sites occupied by it or by the companies of the Group. This contract also covers the consequences of a malfunction of the Group s computer system up to 12,784,102. For the American subsidiaries, the insurance policies covering all the risks related to civil liability (employee risk, employer risk, automobile risks, all risks tied to land ownership and other risks related to technological activities) were combined with those of Dendrite and renewed during Cegedim Reference Document

13 Several levels of coverage were established: $10,000,000 for risks tied to technological malfunctions $31,000,000 for risks tied to the commercial activity $29,000,000 for risks tied to site ownership. Chapter 5 - Information concerning the issuer 5.1 History and development of the Company Registered company name and trade name of the issuer The issuer s registered company name is: Cegedim. The issuer s trade name is: Cegedim Dendrite Issuer s place of registration and number Registered in Nanterre Trade and Companies Register under the number: , NAF Code 6311 Z Date of incorporation and term of the issuer Cegedim S.A. was incorporated on August 27, On April 18, 1989, Financière Cegedim was incorporated for a term of ninety-nine years. On December 26, 1994, Financière Cegedim merged with Cegedim S.A. and took over its name Issuer s corporate headquarters and legal form, laws governing its business activities, country of origin, address and telephone number of the head office Cegedim S.A. A public limited company with a Board of Directors and capital of 8,891, Corporate headquarters: 127 to 137 rue d Aguesseau, Boulogne-Billancourt, France. Telephone: + 33 (0) Fax: + 33 (0) Country of origin: France Laws governing the business activities of Cegedim: Law of July 24, 1966, on public limited companies Significant events in the development of the issuer s business activities Cegedim develops exclusive high value-added databases and software solutions. These skills are carried out in two divisions: The Healthcare and Strategic Data division includes the Cegedim Group services intended for the Healthcare sector. These functions present strong synergy and are divided into three activity sectors, aimed specifically at pharmaceutical companies ( CRM and strategic data ), at physicians Cegedim Reference Document 2007

14 and pharmacists ( Healthcare professionals ) and at health insurance providers ( Healthcare insurance services ) The Technologies and Services division extends the Cegedim Group's objectives and know-how by developing computerized management and information administration skills. It also serves a clientele outside of the health market History Founded in 1969 by Jean-Claude Labrune to become the management and documentation center for data gathered from European medical publications, the Cegedim Group quickly evolved toward data collection and processing intended for the marketing and sales divisions of pharmaceutical companies. These activities aim to provide companies with the means necessary to organize and optimize their sales forces and seek to provide them with a complete range of studies and statistics allowing them to gain a better understanding of their market and their targets. These activities are now consolidated in the CRM and strategic data sector. Little by little the Group also turned towards all healthcare professionals (doctors, pharmacists, paramedical personnel, hospitals, wholesale distributors and insurance companies) in order to offer them IT, communication and data exchange solutions. In doing so, the Group was able to develop effective collaborations that helped strengthen its knowledge of the market and guarantee the excellence of the services it offers. At the interface of a growing number of healthcare professionals, Cegedim is at the heart of the problem of managing healthcare insurance services and in 2005 took on the challenges of the Personal Medical Record. These businesses are now part of the Healthcare professionals and Healthcare insurance services sectors. The expertise required in this historical core business area led the Group to master cutting edge technologies and services related to databases, management applications, data processing, the Internet and networks. Capitalizing on these skills, Cegedim offers high value-added management solutions to its many customers concerned with problems related to outsourcing, exchanges and control of their professional data. These activities are now consolidated in the Technologies and services division Company development Sales for the CRM and strategic data have more than tripled since 2000 and represent 58% of the Group s sales revenue at December 31, This increase was particularly affected by the acquisition of Dendrite in 2007 which enabled the Group to cross a strategic threshold in its development. Sustained internal and external growth has allowed Cegedim to cover over 80 countries at present with an extensive line of products and services. The computerization of Healthcare professionals, initiated in French doctors offices, expanded to the United Kingdom in 1999 and to French pharmacists in It continued through the acquisition of software for doctors publishing companies in Belgium (2003), in Italy (2006), in Spain (2006) and software for pharmacists publishing companies in the United Kingdom (2004). The Healthcare insurance services sector, historically devoted to managing direct billing and direct payment health insurance flows, has, since 2000, included computerization services and software packages for members of the healthcare insurance and pension industries. This sector has been steadily strengthened since 2003 and again in 2008 with the acquisition of Protectia, French publisher of health software packages aimed at personal insurance, particularly well implanted on the middle market. The Technologies and services offerings rely on the Group s strategic know-how. They bring together a diversified range of services that now represent 12% of the Group s business activities. Cegedim Reference Document

15 5.2 Investments Main investments made by the issuer during the period covered by the historical financial information up to the date of the registration document External growth operations are generally financed through loans, except for transactions involving activities that record less than 10 million euros in sales, which are generally financed with equity capital. The acquisition price is covered by confidentiality agreements. The other growth operations (launch of new business activities, opening of a new country, etc.) are financed with the Group s equity capital main capital expenditure CRM and strategic data January 2005: strengthening of CRM activities in Germany with the acquisition of EasyCom, publisher of a web solution for managing sales forces. This company equips some 3,000 medical representatives and for a full year records around 2 million euros in sales. April 2005: acquisition of Target Software in the U.S. Target Software is the up and coming player in SFA and CRM tools in the North American market where, up this point, Cegedim had a weak presence. Target Software equips virtually all of the most effective CSOs (Contracted Sales Organizations - medical call service provider) in the United States, and bases its technological innovations on Microsoft tools. The Target Suite is proving to be particularly suited to the booming Biotechnology market. For a full year, Target Software records sales over 12 million dollars. July 2005: acquisition of 70% of the Egyptian company Trends Technology, which markets an ETMS (Electronic Territory Management System) solution available on PC and PDA. Trends Technology s solution has been used since 1989 by more than 1,000 medical representatives in Egypt and in the countries of the Middle East. For a full year, these activities contribute close to 500 thousand euros in consolidated sales. July 2005: acquisition of Epic and Compufile in Great Britain, specialists in qualitative studies based on information gathered from doctors. These activities are similar to the Thalès Panels used for many years by Cegedim in France. For a full year, Epic and Compufile account for sales of around 6.5 million euros. In addition to these acquisitions, the panel activities progressively expand to the 5 main European markets: the United Kingdom, Italy, Belgium, then Germany (1 st quarter of 2006) and Spain (end of 2006). Healthcare professionals April 2005: acquisition of Rosenwald, which has specialized in publishing directories of healthcare professionals for over a hundred years. With the 2006 acquisition of the Mail Group s activity, the French leader in medical Bus Mailings, Cegedim is further expanding its line of promotional tools designed for healthcare professionals. For a full year, these activities produce sales of around 1.5 million euros. December 2005: creation of the joint venture Thales Cegedim. As part of the experimentation of the Personal Medical File (DMP in French) 2006, Cegedim was selected, along with its partner Thales, to kick off the experimental phase of the project. Healthcare insurance services April 2005: creation of Cegedim Morocco, intended to represent the Group s global offering of health insurance plan management software on the African continent. This subsidiary accompanies the startup of two large-scale Cegedim Reference Document 2007

16 projects won by Soltim-Proval for the implementation of a complete system for managing the Compulsory Health Insurance Plan for private sector employees, as well as a second call for bids for the Plan for Public Officials main capital expenditure CRM and strategic data May and July 2006: creation of new subsidiaries in Korea and Mexico in the marketing studies sector (Cegedim Strategic Data) for the pharmaceutical industry. July 2006: acquisition of the company GERS Maghreb, initiator of drug sales statistics for North Africa December 2006: creation of a subsidiary in Finland in the CRM field whose activity is intended for pharmaceutical companies. With the acquisition in 2007 of the database of LTK, a major supplier of physician information in Finland, Cegedim reinforces its database and its services in Scandinavia. Healthcare professionals February 2006: acquisition of 35% of the company Millennium, the leading publisher of physicians software in Italy (over 11,000 workstations installed). This stake was raised to 49.2% in December Former Italian shareholders keep the majority all full power (50.8%). This participation contributes to the Group s earnings through the equity method (no control). March 2006: acquisition of the company RM Ingénierie, French publisher of medical and paramedical software intended for physiotherapists (No. 1 in France), nurses, speech therapists, midwives, foot care specialists, and chiropodists. This acquisition expands Cegedim s expertise to the paramedical professions some of which recently obtained authorization to prescribe medical devices. 27,000 stations have been installed in France. For a full year, sales for these activities represent around 6.5 million euros. December 2006: acquisition of the company Stacks, specializing in professional software programs for doctors in Spain since 1989 and in Chile since Stacks develops physicians software and handles integration and maintenance for 12 Regional Health Care Communities in Spain, as well as for numerous private practitioners. The Spanish leader with more than 30,000 users, Stacks successfully launched its new generation product Julia during the last quarter of 2006 in the Madrid community. For a full year, the activities bring in revenues of over 6 million euros main capital expenditure up to March 31, 2008 CRM and strategic data May 2007: Acquisition of the American company, Dendrite International Inc., by purchasing 100% of its shares for 560 million euros. Cegedim financed this acquisition through bank loans. The combination of the two companies will create a major world leader for supplying solutions to the pharmaceutical industry in the fields of sales and marketing as well as associated research. The groups are complementary both with respect to the range of products and solutions offered and from a geographic standpoint, since Cegedim is well established in Europe and Dendrite in the United States and in the Asia-Pacific area. The new Group will be able to answer the worldwide needs of its customers and provide a diversified range of high value-added integrated solutions. Dendrite is a 100% held subsidiary of Cegedim which has been contributing to the Group s consolidated earnings since May 9, For the full fiscal year 2006, Dendrite had sales of 336 million euros. November 2007: Acquisition of the 3ES company which develops integrated solutions dedicated to the management of clinical studies and online surveys. This transaction enables Cegedim to reinforce its range of products in the medical sector, particularly for hospitals and more specifically for oncology. For a full year, these activities contribute close to 1 million euros. Cegedim Reference Document

17 February 2008: Acquisition of the Ultima Company, supplier of CRM solutions in Turkey. The inclusion of Ultima s database reinforces the existing OneKey database, making Cegedim a leader in this country. For a full year, Ultima s sales are about 1.5 million euros. Healthcare professionals June 2007: Acquisition of Servilog, publisher and distributor of computer software for retail pharmacies in France. This transaction reinforces Cegedim s position in the French pharmacist computerization market. For a full year, the sales from these activities are about 2 million euros. Healthcare insurance services February 2008: Acquisition of Protectia, French publisher of health software packages dedicated to personal insurance and managing nearly 1,500,000 people. This transaction enriches Cegedim s range of services in the middle market segment, with a modern solution, based on the latest technology. The activities acquired represent annual sales of 4 million euros Main current investments The Cegedim Group s external growth strategy consists in developing its historical core business: services for players in healthcare and strategic data. Investments are essentially made through internal and external growth, with particular attention to the international development of the activities intended for pharmaceutical companies, physicians and pharmacists, as well as to opportunities for expanding the range of services offered. The desire to support the Group s customers in their markets is the main driver of international expansion. The Group regularly looks into acquisition possibilities that are consistent with this strategy. There is no active and routine search for targets, but rather constant internal monitoring concerning potential target players in order to seize the best opportunities when the time comes Investments Cegedim intends to make in the future and for which its management bodies have already made firm commitments At the time this Reference Document was filed, no firm commitment has been given by the Cegedim Group Cegedim Reference Document 2007

18 Chapter 6 - Summary of Activities 6.1 Main business activities Description of the issuer s operations and main products Cegedim furnishes services, technological tools, databases and information flow management services. Cegedim s expertise lies in the two following divisions: The Healthcare and strategic data division comprises services specifically designed for pharmaceutical companies, healthcare professionals and health insurance providers The Technologies and services division covers a variety of sectors. The world leader 1 for pharmaceutical CRM, its historical core business, Cegedim assists the largest pharmaceutical companies with their CRM (Customer Relationship Management) projects and measures the effectiveness of their marketing and sales activities. These CRM tools, whose value is enhanced by the Group s strategic databases, provide customers with an informed view of their market and their targets so that they can optimize their strategies and their return on investment. Cegedim has also positioned itself as one of Europe s leading 2 producers of medical and para-medical management software and also designs management applications for the health insurance sector. Structured, communicative and evolutional, this software is integrated into the Cegedim Group s healthcare flow management systems. Capitalizing on its expertise, Cegedim offers high value-added management solutions to its many clients interested in outsourcing, exchanging and controlling their professional data. Cegedim Reference Document

19 HEALTHCARE AND STRATEGIC DATA CRM AND STRATEGIC DATA HEALTHCARE PROFESSIONALS CRM For medical reps Cegedim Dendrite OneKey - Mobile Intelligence -Teams - Target - Trends Software for pharmacists Alliadis Cegedim Rx Market research studies Cegedim Strategic Data Software and customized statistics for pharmacists Santestat Sales forces optimization Itops Sales statistics for pharmaceutical products Infopharm Software for doctors and paramedics Software for doctors - France CLM - RM Ingénierie Software for doctors - International In Practice Systems, HDMP, Millennium, Stacks Prescription analysis Cegedim Customer Information Icomed - Medimed Physician Connect Healthcare networks AGDF Cegedim RS Intranet and healthcare portal Santesurf Professional databases Banque Claude Bernard Rosenwald Promotional information RNP MedExact Cegedim Reference Document 2007

20 HEALTHCARE AND STRATEGIC DATA TECHNOLOGIES AND SERVICES HEALTHCARE INSURANCE SERVICES TECHNOLOGIES IT for healthcare insurers Cegedim Activ Hosta Outsourced payroll and human resources management Cegedim SRH Healthcare flows Cetip Tiers-payant isanté Hosting, services and Internet Cegedim PCO Cegedim Electronic data interchange Cegedim EDI Edipharm - GIS Hospitalis Medical financial leasing Cegelease Electronic transmission of treatment healthcare sheets Qualitrans-Télépharma SERVICES Corporate databases and associated services Cegedim Communication Directe Printing and package inserts Pharmapost Medical sample management 3S Pharmastock Cegedim Reference Document

21 I. HEALTHCARE AND STRATEGIC DATA The Healthcare and Strategic Data division brings together the Cegedim Group services for the Healthcare sector. These services have strong synergies that are combined in three sectors of activity, each serving a specific sector: pharmaceutical companies - CRM and strategic data sector doctors and pharmacists - Healthcare professionals sector and health insurance operators - Healthcare insurance services sector I.1. CRM AND STRATEGIC DATA Medicines are prescribed by doctors who are not direct purchasers of goods produced by the pharmaceutical industry. And yet doctors are the audience toward which pharmaceutical companies must direct and target their marketing efforts without having the individual information provided by a traditional client-supplier relationship. Therefore the main objective of Cegedim is to offer pharmaceutical companies marketing and sales divisions a better understanding of where drugs are sold, who prescribes them and why. Cegedim develops exclusive databases that respond to these problems, along with the most efficient information tools allowing pharmaceutical companies to optimize their CRM (Customer Relationship Management) approaches. They are thus provided with the best chances of success in persuading prescribing doctors. Cegedim s solutions combine performance and compliance with the Public Health Code and the personal data protection regulations in force in all the countries concerned. In particular, Cegedim offers: tools for optimizing information resources and sales and marketing investments report and analysis tools for office and hospital sales forces databases and tools that provide better knowledge of prescribers strategic marketing, operational marketing and competition monitoring tools and studies performance measurement tools and promotional spending auditing tools order taking tools for pharmacies. I.1.1 CRM FOR MEDICAL REPRESENTATIVES Cegedim Dendrite With more than 200,000 users and a presence in more than 80 countries, Cegedim Dendrite is positioning itself as the world leader 3 in CRM (Customer Relationship Management) for the pharmaceutical industry. By relying on its OneKey database, the database of choice for pharmaceutical professionals world-wide 4, Cegedim Dendrite offers a complete line of high value-added CRM solutions in the fields of sales, marketing and compliance studies. The chief objective for the Cegedim Dendrite product line is to provide its clients in the healthcare and life sciences industries with the tools that are optimally adapted to respond to the complex problems in the medical information business. They are designed to measure and optimize the efficiency of various medical promotional media in a professional world that is constantly changing. It is the only product line capable of managing action histories without being subject to constraints relating to changes in the structure of medical populations Cegedim Reference Document 2007

22 OneKey The OneKey world-wide database is the focal point of the Cegedim Group s activities. It now includes more than 5 million healthcare professionals and in a very short time will, with the United States, China and India, exceed 8 million. Collaborators present in each country and linked by way of the Group s computer network enrich, validate and monitor the database, in keeping with ISO 9001 certified procedures, on a daily basis. Approximately 550 very experienced collaborators with in-depth knowledge of local healthcare problems carry out more than 7 million updates every year. Used by medical reps as well as major players in the healthcare world (specialized journals, insurance companies, mutual healthcare companies, ), the OneKey database makes it possible to have specific knowledge of medical information needs in each healthcare professional category and provides different means of contacting them: business addresses, telephone numbers, , etc. Each year, 10% of the contact information for healthcare professionals based in cities changes, and the rate goes up to almost 30% for those that are hospital-based. In this context, supplying medical reps with real time up to date information is a high added-value that allows them to optimize their time as well as the quality of their visits. Around this essential information, Cegedim Dendrite offers specific services that improve knowledge of the environment, needs, influences and habits of healthcare professionals. Cegedim Dendrite integrates an exact representation of the organization of healthcare systems in use in each country, including hierarchical and influential links at institutional and individual levels. A complete line of pharmaceutical CRM services With a regulatory framework that is constantly changing and an environment in which economic pressures are increasingly tense, now more than ever, players in the pharmaceutical industry need marketing and sales tools that allows them to improve their efficiency. In order to help them respond to these challenges, Cegedim Dendrite offers a complete line of CRM products and services: a line of software packages adapted to the needs of large medical rep networks and complex environments installation and support services, including local issues business intelligence services hosting services A line of software that is specialized for each country, market and functionality Cegedim Dendrite s top priority is the satisfaction of its clients, be they local, regional or world-wide players. That is why dedicated and highly qualified resources are allocated for each product, service and client, with the best level of service in the industry for each country: Asia Pacific solution Americas solution Mobile Intelligence Mobile Intelligence, Compliance Solutions Integrated Sales & Marketing Solutions Target, available for PDA (Personal Digital Assistant) Cegedim Reference Document

23 EMEA solution Global Offers TEAMS (ASP model) Mobile Intelligence, also available in SaaS (software as a service) mode Trends for specific segments, PDA and Web Mobile Intelligence These solutions integrate in-depth knowledge of the pharmaceutical industry and its specificities, in particular, the importance of face-to-face contact and the emergence of new promotional channels. With OneKey, all interactions with healthcare professionals are coordinated and optimized. A world-wide presence By combining Cegedim s European activities with those of Dendrite in the United States and in Asia-Pacific, Cegedim Dendrite responds to the regional and world-wide issues and needs of pharmaceutical companies and is supported in particular by: 6 hosting centres 9 skills centres (Chesapeake, Mexico, Paris, Cairo, Warsaw, Tokyo, Osaka, Auckland, Bangalore) and world-wide the largest and best pharmaceutical CRM dedicated R&D structure 5 capable of ensuring the continued existence and optimization of its clients investments. Cegedim is constantly innovating in order to meet the needs of its clients in the best manner possible, as is the case with its newly launched "Compliance" solutions. These "Compliance" products are designed to ensure that information of the highest quality is distributed by pharmaceutical companies and their medical reps. They have been very successful in the United States and will expand quickly to other major world markets. In the face of increasing pharmaceutical product infringements, this activity is destined for large scale world-wide development. Cegedim Dendrite s principal strength is the ability to think globally and act locally by putting solutions in place that are adapted to the structure, issues and legislation specific to each market. I.1.2 MARKET STUDIES Cegedim Strategic Data (CSD) Cegedim Strategic Data (CSD) is a leader 6 in the field of dedicated market studies for the healthcare industry. With more than 30 years of experience in the pharmaceutical industry, CSD (created as a result of the consolidation of CAM, Thalès, Zoom and Decisions Research) offers a wide range of services and solutions adapted to the needs of its clients. CSD sets itself apart from its competitors in particular by its ability to integrate promotional data from healthcare professionals with longitudinal follow-up data for patients stemming from their epidemiological observations. 50 international and 500 local companies are among CSD s world-wide clients. CSD has international expertise as a result of its presence in 58 countries, which allows it to provide its clients with comparable analyses from one country to another. All CSD studies focus on the players in the healthcare world: office and hospital-based physicians, pharmacists and patients. Each step is carried out internally, from the collection of raw data to their processing, analysis, interpretation and finally to the presentation of the studies to clients Cegedim Reference Document 2007

24 Promotional Data Each year, more than 150,000 healthcare professionals all over the world participate in CSD panels. The data collected on the different investments made by companies are updated on a monthly or quarterly basis. This data makes it possible to follow the pharmaceutical industry s marketing and promotional activities: mixed media analysis (medical reps, press advertisements, distribution of samples, direct mailings, meetings, clinical trials, the Internet and DTC, etc), the evolution of investments in different targets (general practitioners and specialists, pharmacists), the impact of visits from medical reps, the effectiveness of sales forces and competitive watches. Patient Data Longitudinal patient data offers a complete approach to therapeutic patient management in urban medicine. These studies are carried out using real and anonymous data from CSD computerized physician observations. Information collected in this manner opens up a large range of possibilities for studies: market changes, product performance follow-up in particular in the launch phase, patient cohort follow-up, proper drug use studies, epidemiological and economic studies related to a pathology, overview of prescribing behaviour relative to a class of product. CSD currently owns 9 world-wide longitudinal patient databases and is preparing to add new countries in the near future. Medical Studies CSD recently enriched its medical research capabilities (in particular in hospitals and oncology departments), when it merged its Pharmaco-epidemiological activities with 3ES, a CRO (Contract Research Organization). Its computerized GP observations and its web-based patient data collection tool (INES) makes it possible for CSD to respond to any pharmaceutical company s medical problems, be they clinical trials, epidemiological studies or observations. Communications Follow-up The Communication Follow-up range allows clients to get a full view of market communications, measure their sales force performance and evaluate how their messages are recalled and estimate the impact of their communications on prescriptions. CSD has carried out more than 3,000 recall studies over the course of the past ten years. These reports are adapted to the specific needs of each client, deal with product communications and its evolution over time, and allow for strategic adjustments to strategies and communications campaigns, if necessary. Ad hoc Studies CSD performs all types of custom market research studies, both qualitative and quantitative, in order to offer strategic recommendations to its clients. With strong international experience in this field, in 2007, CSD conducted over 70 international studies (Recall tests, prescription behaviour, sales call quality, image assessment promotional tests, etc.). CSD is also able to implement multi-locale studies. Cegedim Reference Document

25 I.1.3 SALES FORCE OPTIMIZATION Itops Itops offers its clients in France, Great Britain, Germany, Italy, Spain, Portugal, Benelux and Romania with a service for optimizing sales force sector allocations. Itops is also developing auditing services, sales force sizing services and services that break down the products to be presented to medical professionals. The Itops Navi software is a new, dedicated territory-mapping tool that features geo-coding of doctors locations and enables regional directors to analyze results in terms of sales, contact objectives and target objectives on a monthly basis. I.1.4 SALES STATISTICS FOR PHARMACEUTICAL PRODUCTS Cegedim, Sales statistics This department manages the French pharmaceutical products database (CIP codes file) on behalf of the pharmaceutical industry s CIP Association. It processes and establishes sales statistics for all pharmaceutical products by GAU (Geographic Analysis Units) on behalf of the GERS (Economic Interest Group made up of the pharmaceutical companies operating in France) using data collected from wholesale distributors and pharmaceutical companies. Since 1999, these statistics have been available online on a weekly basis. The most recent geographical segmentation (746 geographic units divided into 4,612 Sales Points Aggregates or APV each containing 3 to 8 pharmacies), which is much more homogeneous in terms of activity volume, allows pharmaceutical companies to develop true micro-marketing strategies. France is one of the few countries in the world in which the industry players have joined forces to produce their own statistics and the system has become a benchmark for both industry and public health authorities. Cegers Cegers, a subsidiary owned 50% by Cegedim S.A. and 50% by GERS. It develops customized studies for pharmaceutical companies and service providers based on sales data from a range of different sources (GERS, IMS, Nielsen, IRI, etc.). Cegers also provides target management (calculation and monitoring of targets, rankings, bonus calculation) for pharmaceutical companies. These customized studies are sent on a monthly or weekly basis to the pharmaceutical companies sales forces via various media: Click-Pharma: micro software that retrieves trend charts and pre-formatted graphs Click-Pocket: palm or pocket PC software whose philosophy is identical to Click-Pharma TEAMS Vision: EIS (Executive Information System) integrated into the TEAMS package. Infopharm Through its subsidiaries Infopharm UK and InfoSanté in Romania, the Cegedim Group provides sales statistics on pharmaceutical products, significantly different from those offered by competing companies. Relying on Cegedim s leading market position 7 in software for pharmacists in the UK, Infopharm UK is now positioned to offer drug manufacturers an entire range of wholesale distributors sales statistics as well as a full range of sales statistics based on information collected from pharmacies. New quantitative and qualitative studies have been developed and perfected. InfoSanté Romania is now the market leader 8 in regional and national sales data and provides a full range of products and services for the pharmacy and hospital segments Cegedim Reference Document 2007

26 I.1.5 PRESCRIPTION ANALYSIS Cegedim Customer Information (CCI) Cegedim Customer Information provides pharmaceutical companies with defined nominative information on healthcare professionals. Relying on its OneKey database, the world-wide database reference 9 for healthcare professionals, Cegedim Customer Information offers its clients three main types of studies. Icomed (Medimed in Germany) Icomed measures physicians preferential attachment to the products that they prescribe while evaluating the size and profile of their clientele. In France, more than 50% of physicians, in 19 areas of specialization, entrust their prescribing habits to Icomed. This personal prescribing data allows pharmaceutical companies to: define physician profiles and adapt their information strategies measure the effectiveness of their information perform general interest studies on the markets in which they are present or that they wish to develop. For certain fields of therapy - Cardiology, Rheumatology, and Dermatology - multi-country studies are performed based on the same questionnaire making it possible to consolidate and compare information. Doc Scan Doc Scan, more specifically, provides information on the physicians therapeutic behaviours as well as their promotional preferences. Doc Scan studies may also be performed to meet the specific needs of a given pharmaceutical company. Physician Connect Physician Connect evaluates the existing ties among opinion leaders (KOL: Key Opinion Leaders) and prescribers, and makes it possible to identify local networks of influence amongst physicians treating a specific pathology at the local, regional or national level, for therapeutic management and continuing education purposes. Icomed, Doc Scan and Physician Connect studies have been carried out in ten major European countries. The Physician Connect study is also available in Canada and the United States. Cegedim Reference Document

27 I.2. HEALTHCARE PROFESSIONALS With many years of experience dedicated to healthcare professionals, Cegedim has positioned itself as one of the leading 10 European publishers of medical and paramedical management software. The Group thus works on a daily basis with pharmacists, general practitioners and specialists, whether they work independently or in group practices, in healthcare centres or networks. Cegedim s software responds to the needs of professionals and to the latest technical and regulatory requirements. Structured, communicative and scalable, it covers the main principles of the French Personal Medical File and, more generally, the exchange of patient files in a number of European countries. It makes it possible to transfer scientific, medical and promotional information to the place of practice and among healthcare professionals. Partnered with an ever-growing number of professionals in Europe, the Cegedim Group is thus strengthening its extensive knowledge of the healthcare market, allowing it to guarantee the excellence of the information and services it provides. I.2.1 SOFTWARE FOR PHARMACISTS Alliadis Specializing in pharmacy computerization, the Alliadis group (Alliance-Software, Alliadis, Data Conseil and Servilog) has been providing support to pharmacists since that sector began to be computerized more than 20 years ago. It develops and markets comprehensive, integrated software solutions for pharmacists, including the supply of suitable IT equipment. Alliadis is at the forefront of the latest technological innovations, and is meeting its clients occupational needs with high value-added and continuously updated solutions. This is illustrated by the successful introduction of solutions such as its electronic price display solution (Sin Etiq) and audiovisual communication systems (the Clip Santé range). The new regulatory challenges such as the Pharmaceutical File, the development of the SESAM-Vitale environment, substitution objectives, product traceability and product codification all require the development of IT tools in the short and medium term. By closely monitoring new developments in the pharmacy industry, the Alliadis Group has succeeded in adapting to economic challenges and offers customized solutions to the different market players: independent pharmacists who nevertheless require, for example, communicative solutions offered by the PharmADSL solution mutual pharmacies, the main target for the Premium solutions pharmacies organized in SELs (Independent Professional Companies), with different products that allow colleagues to network pharmacist groups for whom, to date, the Alliadis solutions are the most popular. Some partnerships allow members to use exclusive IT tools adapted to the specific operational characteristics of their group pharmaceutical companies, via a dedicated solution. Since 50% of drug flows are managed through its software applications, the Alliadis group is the preferred partner of the leading pharmaceutical companies for implementing information and promotional systems designed for pharmacists. In France, 400 employees, 30 skills centres and 2 help-lines deployed throughout the entire territory provide daily local service whose quality is recognized by the clients. With 9,130 clients, the Alliadis Group holds 41% of the pharmacy computerization market in France Cegedim Reference Document 2007

28 Cegedim Rx Cegedim Rx is the leading supplier of software solutions and computer services in United Kingdom with nearly 50% of the UK pharmacy market which incorporates in excess of 5,000 pharmacies. Its product line includes Mediphase, Nexphase and Pharmacy Manager PMR systems it processes over 180 million prescriptions every year in the UK. Cegedim Rx also offers products for: hardware distribution and engineering support and training the sale of consumables. I.2.2 CUSTOMIZED STATISTICS FOR PHARMACISTS Santestat The Santestat database is compiled from data collected in pharmacies and the statistical results are provided through GERS. Santestat provides pharmacists and pharmacist groups with the tools necessary to optimize pharmacy management, track pricing policies and monitor purchasing markets. At the same time, these statistics enhance GERS analyses by providing pharmaceutical companies with the data necessary to track pharmacy inventories and get a better understanding of the drug distribution channels. I.2.3 SOFTWARE FOR DOCTORS AND PARAMEDICS Following the acquisition of Stacks in Spain and with more than 115,000 physicians or paramedical professionals using one of its software solutions, Cegedim has positioned itself as the leading 11 software publisher in Europe. Software for physicians - France Cegedim companies in the field of software for physicians in France include: Cegedim Software for Physicians: CrossWay, Doc Ware, Cardiolite, Médiclick, Eglantine, Médigest, Dia and dbmed, Ordogest, Secure Medical Mail, the secure messaging solution RM Ingénierie: software AGDF Cegedim RS demonstrated the soundness of the basic technological choices made relative to the data structuring used, the interoperability and security that characterize the Cegedim line of software. This software line makes it possible to respond completely to all regulatory requirements, in particular those in place in Europe. It is completely consistent with the logic of the DMP (Personal Medical File) and of healthcare networks, while ensuring that practitioners expectations are met to the extent possible. Positioned at the crossroads of the largest number of medical and paramedical professionals in the healthcare sector, the Cegedim Group was selected for several health care network projects and allowed the opening of 6,000 patient files under secure and reliable conditions recognized by the reference authorities. Cegedim will continue to support the establishment of these networks in 2008 through its participation in the calls for proposals issued by the GIP-DMP. Furthermore, Cegedim is now the uncontested leader in terms of the number of practitioners who transmit their Electronic Care Sheets electronically. Cegedim Reference Document

29 Software for doctors - International Cegedim companies in the field of software for physicians outside France include: In Practice Systems (Vision) in the United Kingdom HDMP (Health One) in Belgium Millennium (Millewin) in Italy Stacks (OMI and Julia) in Europe (UK, Belgium, Italy and Spain) and in Chile. In the United Kingdom, In Practice Systems is strengthening its position as leader 12 in the Primary Care sector with its Vision product. The reforms undertaken by the National Health Service require different levels of interoperability between healthcare professionals, which In Practice System s software continues to meet progressively in order to adapt its IT solutions for General Practitioners. Obvious synergies are developing with the software for pharmacists, who are also involved in the British reform. After Belgium in 2003, the Cegedim Group has continued to expand its influence in Europe, particularly in 2006 with the acquisition of a significant stake in Millennium, the leading 13 publisher of physician software in Italy (over 11,000 workstations) and the acquisition of the Stacks group, the leader 14 in physician software in Spain with more than 30,000 users, also present in Chile. I.2.4 HEALTHCARE NETWORKS AGDF Cegedim RS With many years of experience in the field of publishing and implementing patient file sharing management system solutions, and with the advantage of a unique position in the healthcare information systems market, AGDF Cegedim RS handles the development, deployment and maintenance of solutions for Healthcare Networks. This line of products responds to issues of local interoperability of the solutions that healthcare professionals experience with the healthcare information systems in which they participate. It deliberately places itself in a dynamic of synergy with the different Cegedim Group products for healthcare professionals. The success of this line was clearly demonstrated during the DMP experimental phase and positions AGDF Cegedim RS as an indispensable player in the implementation of healthcare network information systems. I.2.5 INTRANET AND HEALTHCARE PORTAL Santesurf Santesurf is France s secured IT portal dedicated to healthcare professionals. Whether or not they are equipped with Cegedim systems, doctors can transmit Electronic Care Sheets (FSE) to primary health insurance providers. They also benefit from specialized services ( boxes, company mail boxes) and Internet access. Santesurf is the only free and secure French intranet exclusively for healthcare professionals (doctors, pharmacists). 31,000 subscribers use Santesurf.com every day and 9,000 transmit FSEs, making Santesurf the leading private French data concentrator with a market share of close to 17% Santesurf, a private operator, has become the benchmark data exchange platform for healthcare professionals and medical sales reps Santesurf also serves as a hub for the majority of information flows managed by Cegedim Cegedim Reference Document 2007

30 I.2.6 PROFESSIONAL DATABASES Banque Claude Bernard - RESIP RESIP (Research and Professional IT Systems Studies) provides healthcare professionals with a scientific database to assist them in prescribing and issuing medications: the Banque Claude Bernard (BCB), the only electronic database competing with the Vidal database. The BCB is integrated into the pharmacy management software marketed by the Alliadis network (Alliance-Plus, Premium and Servilog software), representing more than 9,000 subscribing pharmacies. The BCB is also represented in software programs for doctors: more than 10,000 medical practices are now equipped. It will be increasingly present on all computerized physicians workstations owned by the Cegedim Group in France and is also distributed by other medical software publishers. As the lead player 15 in the Web market, the BCB is integrated into healthcare sites and portals. The BCB s technology makes it easy for hospitals to incorporate the database into their Intranet systems for fast consultation (already more than 500 institutions are using it). APIs (Application Program Interface) also make it possible to interface with the hospital management software. Since 2006, around thirty hospitals have integrated the BCB into their prescription or dispensation software. Rosenwald Rosenwald, which specializes in publishing directories of healthcare professionals, offers three directories, the physicians directory (including a geographic listing of private and hospital practitioners by specialty), the pharmacists directory (which lists retail and hospital pharmacists) and the hospital directory (providing helpful information on more than 9,700 public and private hospitals). These directories are available in hard copy or may be consulted on line at With the acquisition of Mail Group, the French leader 16 in medical Bus Mailings, Rosenwald allows advertisers to share the costs of their mailing operations and has confirmed its role as provider of promotional tools dedicated to the healthcare profession. I.2.7 PROMOTIONAL INFORMATION RNP RNP (National Promotions Network) is the undisputed 17 French benchmark for POS (Point of Sale) advertising in the pharmaceutical and para-pharmaceutical industry. RNP promoters and merchandisers provide pharmaceutical companies with privileged access to 20,000 pharmacies in France every three weeks. Services include: window dressing - from standard to event-specific setting up in-store promotional materials (shelving, counters and displays) conducting surveys. Personnel are equipped with PDAs which allow them to provide follow-up on the results of their work in real time, including digital photos. Pharmaceutical companies can access follow-up of their promotional activities via the RNP Internet site. Cegedim Reference Document

31 MedExact MedExact works in synergy with all Cegedim Group companies involved in medical rep promotion, with the exception of doctor calls promotion. The ScreenPub solution targets doctors equipped with Cegedim Medical Software interconnected to the Cegedim server. It makes it possible to exchange information and download and circulate advertising campaigns directly onto the computer screen. The PharmExact line offers the pharmaceutical industry studies on the delivery of drugs or OTC medications, as well as customer loyalty promotion and information communication tools for pharmacists computerized by Alliadis. With its Net-enquête panel of 600 representative pharmacies, PharmExact produces ad hoc studies on prescribing and drug delivery. These surveys provide information on medical prescriptions, the attitude of the pharmacy team and may even offer patient opinions. I.3. HEALTHCARE INSURANCE SERVICES Making the most of its skills in publishing occupational software and in processing complex information, the Cegedim Group brings together in the Healthcare insurance services sector, a broad range of services for major health insurance players. These players interface with all of the professionals in the healthcare sector thanks to the Group s healthcare flow management systems adapted to an environment where dematerialization is a necessity. I.3.1 IT FOR HEALTHCARE INSURERS Cegedim Activ Managing more than 30 million insured in France, Cegedim Activ is the uncontested leader 18 in the personal insurance market, supplemental health insurance, compulsory insurance, pensions, life insurance and retirement plan markets. Cegedim Activ s products are intended for all market operators: insurance companies, mutual healthcare companies, provident institutions and brokers. As an expert in personal insurance, Cegedim Activ works with its clients to create innovative products and manage their activities in a profitable manner. To accomplish this, Cegedim Activ has a unique combination of expertise: in its collaborators sector of activity, and in cutting edge technology in optimized solutions and consulting. Cegedim Activ thus provides a synergy of skills in publishing sector specific software packages, information management solutions and healthcare flow management activity which handles 250 million EDI flows per year (Noemie, Third party payment systems and SESAM-Vitale 1.40). In 2007, Cegedim was engaged in the continuation of several large projects. After having launched its providence activity in 2006, the MNH (National Hospitals Mutual Healthcare Company) started up its supplemental health insurance. The ANETO software package also went into production for MAAF Assurances for health services. Harmonie Mutuelles, a mutual healthcare group already managing more than 2.3 million insured individuals, launched a convergence project for healthcare management for all of the Group s mutual healthcare companies. Lastly, SMI (Interprofessional Mutual Company) chose Cegedim Activ to rebuild its healthcare and retirement information management. From an international standpoint, in 2007, Cegedim Activ also strengthened its activities in Morocco by starting up the CNOPS (National Agency for Social Planning Organizations), an agency that manages health insurance for 3.5 million government employees Cegedim Reference Document 2007

32 I.3.2 HEALTHCARE FLOWS Cetip Third-party payments CETIP is the leader 19 in managing direct healthcare billing and payment flows as historical operator of the Santé- Pharma Association since CETIP s flow receipt and management platform processed close to 80 million direct healthcare billing and payment transactions, 99% of which were transmitted electronically. CETIP handles all the regulatory and technical changes related to direct billing and payment for its clients (SESAM Vitale 1.40 standard, Common Classification of Medical Acts (CCAM), Electronic Requests for Reimbursement (DRE), care initiative management, etc.). The CETIP information system was produced in cooperation with Cegedim Activ. More than 200 Supplemental Health Insurance agencies, close to 40,000 healthcare professionals and 10 million beneficiaries through Santé-Pharma have placed their trust in CETIP for over 17 years. At present, direct billing and payment has been extended to all healthcare professionals: medical biology laboratories, radiologists, physical therapists, healthcare aides, health centres, hospitals and opticians. CETIP works in partnership with the French Federation of Insurance Companies and with APRIARSA for delegated project management. isanté The health insurance sector is always changing: Social Security reforms, coverage individualization, improved services for the insured and relations with healthcare professionals. To assist supplemental health insurance agencies, particularly mutual clients who use Cegedim Group IT solutions with these developments, isanté relies on in-house solutions and expertise to develop new front office services like non-nomenclature management, articulation with healthcare platforms, medicalization of services, real-time management of direct billing payment and benefits processing, etc. I.3.3 ELECTRONIC DATA INTERCHANGE Cegedim EDI The division dedicated to electronic document interchanges (EDI), Cegedim-EDI has computerized all supply chain documents (order forms, order tracking, invoices, etc.). This activity began in 1991 through an alliance with GIE Edipharm and the creation of an EDI system for wholesale distributors and pharmaceutical companies, and then quickly expanded: to medical analysis laboratories and the animal health sector to the industry, mass distribution and public services sectors. Cegedim-EDI is meeting the drug traceability requirements (lot number and expiration date) by deploying shipping advice messages for the different participants in the pharmaceutical products distribution chain (Edipharm system). The first French company to have obtained, in 1992, General Tax Division approval for tax-compliant computerized invoices, over the years Cegedim-EDI has established itself as the French leader 20 in this market. With Global Invoice Services (GIS), Cegedim-EDI offers the most complete computerization platform in ASP mode on the market. GIS allows partners equipped with heterogeneous systems to connect and exchange messages and includes a complete range of value-added services: tax-compliant computerization archiving ensuring the probative value of documents Web interface control Cegedim Reference Document

33 electronic signature, an approved product certified as EAL3+ by the Central Information System Security Division (DCSSI) automatic document reading re-materialization of electronic documents. In 2007, Cegedim-EDI processed close to 170 million electronic invoices for its partners, representing a financial volume of close to 50 billion euros. Hospitalis Hospitalis is a Web portal for healthcare institutions and their suppliers that offers global management of medical supplies, equipment and laboratory reagent. The Hospitalis line covers all exchanges, from supply contracting to billing, including orders and their associated logistical information. Hospitalis improves the traceability of exchanges by centralizing all information on its Web portal The Hospi-marchés module allows any public agency to computerize its calls for bids, and to receive and process supplier responses securely and in accordance with article 56 of the government contracting code Moreover, through its Web portal, Hospitalis provides hospital healthcare practitioners with an exhaustive database of drugs (BCB Banque Claude Bernard). Hospitalis is in use at more than 400 major healthcare institutions including 17 hospitals; it transmitted 560,000 orders in I.3.4 ELECTRONIC TRANSMISSION OF HEALTHCARE SHEETS Qualitrans-Télépharma Qualitrans-Télépharma is a Technical Concentrator Organization (OCT). It acts as intermediary for healthcare professionals, compulsory (AMO) and supplemental (AMC) health insurers. Its role is to centralize requests for reimbursement from pharmacists and to allocate them to the payer agencies concerned. Qualitrans-Télépharma is connected to all of the AMO and AMC agencies and handles all the standards and exchange protocols in the healthcare sector. Founded in 1995, Qualitrans-Télépharma handled more than 70 million Electronic Care Sheets in 2007, for more than 3,000 pharmacists. Thus, Qualitrans-Télépharma is the N 2 21 French OCT. Qualitrans-Télépharma, information system, on the cutting edge of technology, is completely compatible with the SESAM-Vitale 1.40 standards and makes it possible to integrate, with great responsiveness, legislative and regulatory changes. Qualitrans-Télépharma also offers value-added services such as tracking requests for reimbursements and payments on its Web portal Cegedim Reference Document 2007

34 II. TECHNOLOGIES AND SERVICES With long and in-depth experience in database management and the design of value-added services, Cegedim Group aims to provide optimum support to its clients in mastering, managing and fully benefiting from customer information. The pursuit of these objectives has allowed the Group to develop niche abilities in terms of technology and services. The expansion of Cegedim s customer base beyond the healthcare market is evidence of the dynamism inherent in these activities. II.1. TECHNOLOGIES II.1.1 OUTSOURCED PAYROLL AND HUMAN RESOURCES MANAGEMENT Cegedim SRH Cegedim SRH provides support to businesses in addition to human resource management and enhancement. A major player 22 in the payroll and Human Resources (HR) outsourcing market, Cegedim SRH relies on its own solutions and experience to help businesses to better identify their priorities and simplify processing through the use of technological levers. In a particularly volatile and complex legal context, Cegedim SRH offers outsourcing services that are customized and adapted to the specific needs, context and size of the business. Thanks to its complete and modular information system, Cedegim SRH s services are supported by: Industry and consulting expertise With over 10 years of experience in optimizing human resources management processes, the Cegedim SRH teams assist clients to carry out their projects (project management assistance, HR process optimization assistance, etc.) and provides consultancy on a day to day basis to ensure the efficiency of their HRIS. An array of services Orchestrated around major functional fields (payroll/gta/personnel administration, HR Intranet, employee relations, GRH and archiving), this array of services also covers IT hosting, system maintenance, data backup, monitoring of legal and bargaining agreements as well as training and change support. A technological platform: TEAMS RH The innovative TEAMS RH solution is the world s leading modular HRIS solution on the market developed with 100% Java technology. With modular architecture and a process-oriented approach, TEAMS RH allows delivery of customized and innovative services, responding to all outsourcing needs. Cegedim Reference Document

35 II.1.2 HOSTING, SERVICES AND INTERNET Cegedim, hosting Cegedim s network, with more than 4,500 servers, boasts substantial hosting capacity: Paris (Boulogne-France) dual-building infrastructure Toulouse (France) London (U.K.) dual-building infrastructure Chesapeake (USA) Bangalore (India) Osaka (Japan) Sydney (Australia) These main centers meet client s securtity requirements and standards for hosting medical files. PCO Cegedim PCO Cegedim provides information management services and technological solutions that enable companies to secure, administer and supervise the various system components in a simplified, integrated and centralized manner. Its area of competence covers the development of information systems for large corporations, local government agencies and teaching and/or research institutions. PCO Cegedim s product range covers 3 main operational areas: information system management based on ITIL good practices (sales, leasing, fleet management, computerization of schools) the integration of administration and security solutions into the system and the network (vulnerability management, SSO, strong authentication, FW/VPN, anti-virus, anti-spam, publishing applications as well as supervision for systems, networks and messaging) managed services (SOC, NOC and storage of backup media). PCO Cegedim, along with its publishing and manufacturing partners, provides solutions especially designed to meet the evolving needs of the market. II.1.3 MEDICAL FINANCIAL LEASING Cegelease Cegelease, with its Cofidata, Pharmalease and Médilease brands, is a financial leasing company that offers financing options to retail pharmacies and physicians for the purchase and rental of IT equipment and management systems Cegedim Reference Document 2007

36 II.2. SERVICES II.2.1 CORPORATE DATABASES, CRM AND ASSOCIATED SERVICES Cegedim Communication Directe (CCD) Cegedim Communication Directe designs, manages and markets a wide range of databases, and is the first 23 supplier of business address lists in France. CCD provides valuable data for business-to-business communications and, from the acquisition stage to the supply stage, data is updated and refined through input from an extended range of services. Databases Corporate and managerial: 318,650 companies, categorized by sales, with telephone and fax numbers. More than 544,000 qualified operational functions CEO: 2,813,856 head offices including names of top managers (President and CEO, GM, manager, etc.) or sole proprietors with telephone and fax numbers INSEE Sirène database (official distributor since 1981): 4,749,856 establishments (exhaustive company index) Professional: independent professionals, administrations, elected officials, hotel-restaurants, senior citizens organizations French and European healthcare professionals. The databases available on the market enable the optimization of communications among professionals by offering a wide choice of possible media: postal service, telephone, fax and e mail (depending on the database). Data processing Standardization, restructuring, clearing Merge and purge (legal entity and individual), reconciliation, data consolidation. Services for company databases Database auditing Automatic concordance with the Sirène database) Data cleaning and enrichment Client data maintenance using updates specific to CCD Analysis of data and client profiles B to B segmentation, CEGEDIM Affinity Score: modelling of financial information to develop an optimal segmentation method for B to B prospecting. To offer all of these services, CCD relies on programs and tools, a number of which are unique in France, such as the Source database (a log of all the SIRET number changes since 1993). Subscription management SIGA: all-purpose professional software package for managing subscriptions and client information (press and home shopping). Comprehensive, integrated direct marketing services CCD offers comprehensive direct marketing services that include every process in the direct marketing chain (design, printing, routing, enveloping and returns analysis). Cegedim Reference Document

37 II.2.2 PRINTING AND PACKAGE INSERTS Pharmapost Pharmapost, an ISO-9001 certified company, is a mass production printing company that specializes in fine paper printing and finishing. In 2007 it produced 350 million flat, folded or single or double roll pharmaceutical inserts thus placing it among the leading French producers. II.2.3 MEDICAL SAMPLE MANAGEMENT Pharmastock - 3S Pharmaceutical companies require sample management systems that meet stringent regulations governing traceability and distribution. The Cedegim Group offers two management packages: Tracere, designed to respond to the sample management needs of medical reps and doctors. 3S designed to manage sample requests from healthcare professionals.. These packages are supported by the Group s expertise in databases for healthcare professionals and by its subsidiary Pharmastock, a pharmaceutical depositary institution specialized in managing and shipping physician samples as well as documentation for medical reps Cegedim Reference Document 2007

38 6.1.2 Notes concerning the Group s main activities 1 Cegedim is the world leader in term of number of users of its CRM solutions for the pharmaceutical industry. 2 Cegedim is one of Europe s leading producers of medical and para-medical management software in term of number of programs installed. 3 Cf. note 1. 4 The Onekey database is the benchmark in the European pharmaceutical industry in terms of number of countries covered and data entered as well as in terms of number of users. 5 Cegedim has the largest and best R&D structure dedicated to pharmaceutical CRM in terms of numbers of specialized employees in this sector. 6 CSD is a leader in market studies intended for the healthcare industry in view of the variety and coverage of the studies offered. 7 Cegedim is the leader in the pharmacists software market in the United Kingdom in number of workstations installed. 8 InfoSanté Roumanie is the leader in revenue in the sales data market in Romania. 9 Cf. note Cf. note Cf. note In the UK, In Practice Systems is the leader in number of doctor software workstations installed in the Windows environment. 13 Millennium is the first publisher of doctor s software in Italy in number of workstations installed. 14 Stacks is the leader in Spain in number of workstations installed with its doctor s software. 15 The BCB is the main tool of the web market in France since this database is deployed on the tools used daily by healthcare professionals (software, intranets, portals, etc.). 16 Mail Group is the French leader in medical Bus Mailings in terms of the number of folds processed. 17 RNP is the French benchmark in point-of-sale advertising due to the number of pharmacies covered by its display network. 18 Cegedim Activ is the leader with 30 million beneficiaries in France. 19 CETIP is the French leader in terms of number of direct billing flows processed per year. 20 Cegedim-EDI is the French leader given its market share in dematerializing order/billing flows between pharmaceutical companies and wholesale distributors. 21 Qualitrans-Télépharma is the N 2 OCT in the market based on number of Electronic Care Sheets processed each year and on the number of healthcare professionals who use it. 22 Cegedim SRH is a major player in the payroll outsourcing and Human Resources market according to a study published by Markess in CCD is the premier supplier of business address lists in France in the healthcare professionals sector in term of number of managed references and users Products or services released on the market during the 2007 fiscal year The Cegedim Group has established an innovative on-going policy to better serve its clients by continuously providing new functionalities for the existing solutions. The main innovations for each product or service were mentioned in the presentation of the business lines in chapter and readers may thus refer to that section. In 2007, in each activity sector, we can emphasize the following developments: In CRM: Implementation of the synergy between Dendrite s and Cegedim s range of products, specifically the combination of the OneKey databases, the focus of the Group s CRM activities, and they new worldwide coverage of sales force management software, adapted to the specificities for each country and continent. The Group also innovated in 2007 with the launching of its Compliance solutions intended to guarantee the quality of information disseminated by pharmaceutical companies. For strategic databases: Extension of the CSD products to 58 countries and development of new study subjects, specifically in oncology with the integration of 3ES. The combination of the Cegedim and Dendrite portfolios also opens new perspectives for the understanding of physicians therapeutic behaviors or existing links between opinion leaders. Cegedim Reference Document

39 For healthcare professionals: SMM (Secure Medical Mail) is the first solution that is GIP certified, a secured messaging CPS integrated with core software giving Cegedim Logiciels Médicaux a key component to include with its software. In Spain, Stacks successfully launched the first pilot of Julia, its medical management software package in the Madrid region. The software solutions intended for pharmacists have been enriched with modules dedicated to retail groups or intended to be used with the new modes of exercising their profession (SEL), requiring a reinforced network component. New service solutions emphasize the consulting part of a pharmacist s role. In Healthcare insurance services : The Group now offers its solutions for the Personal Insurance market under its new identity, Cegedim Activ. The Cegedim Group has also launched its new isanté solution for the management of direct billing systems generalized with a wider range of insurers and mutual healthcare companies, which already has more than 55,000 healthcare professionals under contract. In Technologies and services: At the beginning of 2007, Cegedim SRH launched its new product, TEAMS RH, human resource management platform which offers, beyond the outsourcing of payroll, the valuation of all of the strategic HR information for the company. The Cegelease subsidiary strongly developed its Pharmalease portfolio aimed at financing all types of investments in pharmacies (excluding computerization investments, covered by Cegelease and Cofidata financing packages). 6.2 Main markets Sales Revenue (In thousands of euros) France Abroad Total France Abroad Total CRM and strategic data 114, , , , , ,612 Healthcare professionals 81,833 64, ,965 74,119 51, ,640 Healthcare insurance services 79,952 1,311 81,263 73,559 3,706 77,265 Technologies and services 90,140 1,436 91,576 90,689 3,003 93,692 Total 366, , , , , , CRM and strategic data Key figures 58% of the Cegedim Group consolidated sales. Geographic presence: 80 countries on 5 continents. Main clients: marketing and sales departments of pharmaceutical companies Cegedim Reference Document 2007

40 Competition The services offered by Cegedim are unique for the pharmaceutical industry and are highly differentiated from competitors offers. Cegedim is the only company that combines CRM tools and strategic databases that are highly interlinked. Cegedim Dendrite systematically includes a list of target physicians with its CRM products in order to help its customers direct their marketing-sales activities. Physicians files contain data essential to pharmaceutical companies to help them manage their sales forces in the field. Cegedim owns its OneKey physicians databases and updates them daily. There are few alternatives to Cegedim s physician database and the products are geographically limited. In addition to the OneKey physician files, Cegedim designs a complete line of strategic databases giving pharmaceutical companies a better understanding of where drugs are sold, who prescribes them and why and how effective their marketing campaigns are. The objective is to provide them with the information necessary to define their marketing and sales strategy. Cegedim s competitors for CRM products do not have this know-how. Furthermore, the leading competitor in this industry (IMS) offers no CRM services. More specifically, Cegedim s competitors in these two business areas are as follows. CRM Oracle (Siebel), Microsoft and SAP: These companies are software generalists who, contrary to Cegedim, do not focus exclusively on the healthcare sector. They focus on supplying software, unlike Cegedim, which supplies outsourced solutions combining them with a complete range of services (hosting, maintenance, help-line, fleet management, training, etc.). Oracle finalized the acquisition of Siebel at the end of May 2006, thus becoming the world leader in generalist CRM services. Update is an Austrian publisher specializing in CRM that has a dedicated healthcare focus and primarily targets the European market. A new competitor appeared in 2007 in the US market: Verticals on Demand with an SaaS (Software as a Service) mode product but with limited analysis capabilities. There are also a number of local competitors in the different countries. Strategic data IMS is the world leader in the health sector strategic study market in terms of sales. France, with GERS and Cegedim, is one of the rare countries where IMS market share is negligible. NDC Health (National Data Corp.) left Europe in 2004, and its American activities were split and acquired in 2005 by Per-Sé Technologies which has become McKesson and Wolters Kluwer. Generalists such as Taylor Nelson Sofres plc and GFK also offer ad hoc studies in the medical field. Synovate Healthcare (with a strong presence in South America and in Asia) and Verispan are the most recent competitors. There are still a number of local competitors in this market. Main market trends The worldwide pharmaceutical industry remains a prosperous industry that, despite competitive pressure, the development of the generics market and attempts at government regulation, maintains growth and profitability rates that are among the best in the world. This market has recorded an average annual growth rate of 7 to 10% over the last twenty years. According to a study published in Les Echos, the worldwide drug market in 2006 reached 643 billion dollars (compared to less than 200 billion dollars in 1990), corresponding to a growth rate of 7% compared to The North American market (United States and Canada) remains the largest market with 45% of global drug sales and Cegedim Reference Document

41 an 8% rate of growth in Worldwide growth is also driven by emerging countries; sales grew by close to 13% in Latin America and by 10% in the Africa-Asia-Australia zone. In Europe, five countries account for more than 70% of sales. Among these countries, Germany and France are the two countries where drug consumption is the highest. Cegedim primarily provides solutions intended for the sales and marketing departments of pharmaceutical companies, so it is essential to understand how promotion spending is organized. According to the studies published by Cegedim Strategic Data (CSD), Cegedim Group, that serve as a pharmaceutical industry reference, almost 87.2 billion dollars went to promotional spending worldwide in 2007 broken down as follows: 64% related to sales calls, 11% to distributed samples, 9% to DTC (Direct to Consumer) spending and, finally, close to 16% for public relations, press and Internet promotions. Worldwide pharmaceutical industry trends The pharmaceutical industry continues to consolidate. Some experts estimate that this wave of consolidation will continue and that it is likely that within ten to fifteen years only around ten pharmaceutical giants will remain. To cite just one operation, Sanofi Aventis remains the leading European group and is one of the world leaders with close to 100,000 employees worldwide and more than 28 billion euros in sales in Sales and marketing, along with R&D quality, are the main differentiation criteria in the pharmaceutical industry. Thus, more and more attention is being paid to the new forms of promotion via the Internet, as well as to the notion of return on investment or ROI of CRM projects. DTC Direct To Consumer is also one of the major trends in this market. The patient himself becomes a preferred target for pharmaceutical company marketing teams in the USA. However, this trend is particularly apparent in the American market as the European legal framework limits this type of activity for the time being. French pharmaceutical industry trends Since 1995, France has been the European Union s leading producer of drugs. In 2006, there were more than 250 production centers in France, 337 industrial companies, 233 companies devoted strictly to biotechnology and 100,000 employees working in this market. France is the world s third largest drug exporter. (Source: LEEM) Promotion is the main means for optimizing pharmaceutical company marketing and sales. Despite government attempts to regulate the industry, it continues to benefit from considerable resources: over 3.9 billion dollars in 2007 (compared to 3.5 billion dollars in 2006). For example, in 2007, promotional spending by French pharmaceutical companies consisted of 68% for sales calls, less than 1% for distributed samples, around 15% on DTC and 16% for promotional spending for public relations, press and Internet promotions. (Source: CSD, Cegedim Group) Healthcare professionals Key figures 19% of the Cegedim Group s consolidated sales. Geographic presence: France, Great Britain, Belgium, Spain, Italy and Chile. Main clients: doctors, pharmacists and paramedical personnel. Competition The analysis must be segmented according to market and country. Physician software in the United Kingdom: Cegedim, with its subsidiary, In Practice Systems, is ranked second in the market in terms of number of users (with its Vision software), behind EMIS and ahead of isoft and TPP Cegedim Reference Document 2007

42 Physician software in France: Cegedim leads the French market in terms of number of medical practices computerized, ahead of Axilog (a subsidiary of Compugroup) and Imagine Editions (Hellodoc software). RM Ingénierie is also the leader in France for software for physical therapists and paramedical personnel in general (nurses, speech therapists, orthoptists, midwives, foot care specialists, etc.) ahead of Epsilog. Physician software in Belgium: The Belgian market counts a number of small players, including Cegedim, in the leading positions. Physician software in Spain: Cegedim is the leader in the Spanish market for the number of physicians using its products with its subsidiary, Stacks. Pharmacist software in France: Cegedim, with its subsidiaries Alliadis and Data Conseil, is No. 2 in terms of number of pharmacies equipped (after Pharmagest Interactive, now No. 1 in terms of number of pharmacy clients since its acquisition of CIP) but is No. 1 in terms of the size of its pharmacy clients. Pharmacist software in the United Kingdom: Cegedim entered this market at the end of 2004, with the acquisition of NDC Health and Enigma Health, which today are combined into one entity called Cegedim Rx. Cegedim Rx is the leader in terms of the number of computerized retail pharmacies in Britain. For promotions, Cegedim is the French leader both at the point of sale (advertising at the pharmacy) in terms of the number of pharmacies included in its outdoor network and at the point of prescription (given its number of computerized physicians). Main market trends Cegedim strives to provide all healthcare professionals with effective tools for managing their day-to-day practice. Doctors and pharmacists are the Group s benchmark clients, particularly in France and the United Kingdom. The number of these professionals gives a good estimate of Cegedim s potential market Population - France Doctors: Total dont Libéraux General practitioners 73,468 55,771 Specialists 105,526 43,776 Physiotherapists 37,328 35,080 Retail pharmacists: Total Generalist retail pharmacists 28,752 Assistant pharmacists 18,633 Retail pharmacies 22, Population - UK Doctors: Total General practitioners 51,495 Hospitals specialists 56,561 Pharmacists: Total Hospital pharmacies 7,794 Retail pharmacies 13,628 (Source: Onekey database, Cegedim Group) Cegedim Reference Document

43 Computerization of doctors in France A great majority of French medical practices, close to 90% according to the most commonly cited figures, are computerized. However, this computerization essentially concerns electronic care sheet management: only 40 to 60% of computerized doctors use a computerized patient file to record their diagnoses, their prescriptions and to update their patient s profile (pathologies, allergies, family history, test results, etc.). Nevertheless, it is clear that use of the Internet in medical practices is becoming more widespread since a large majority of these practices have Internet access, most often high-speed access. On the whole, the doctor computerization market in France, which depends on individual initiative, has remained relatively stable over the last few years. There are numerous areas for improvement both in terms of the number of doctors equipped and in terms of use of the most sophisticated tools. While waiting for the start-up of the Personal Medical File (DMP), the need for exchanging information between healthcare professionals and the development of wide-spread networks are positive factors that feed the growth in this market. Computerization of doctors and pharmacists in the United Kingdom All medical practices are computerized in the United Kingdom. This is encouraged by the local healthcare authorities who are overseeing and promoting a sweeping reform of the healthcare system computerization. An initial budget, regularly increased, of 6.2 billion pounds sterling over 10 years has been devoted to the reform which affects all of the players in the healthcare field (physicians, pharmacists and hospitals). This program requires, specifically from physicians, progressive levels of interoperability among the different players to improve the management of patient files within a private network called N3. Level 0 Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Compliance with NHS standards (RFA99) Level 0 + Shared office-hospital schedule Level 1 + Electronic transmission of care sheets between physicians offices and pharmacies Level 2 + Electronic transmission of patient files between general practitioners Level 3 + Centralized hosting of hospital physicians IT systems Level 4 + Patient files structured in compliance with the NHS requests Optimum integration level. This reform is ambitious and demanding for all of the players in the British market. Cegedim and its subsidiaries In Practice Systems (software for physicians) and Cegedim Rx (software for pharmacists) successfully meet these expectations. Outlets for these developments are ensured through government financial incentives, which subsidize the development, the implementation and the technical support for software for physicians as well as electronic transmission and connection to the private network for pharmacists. Computerization of pharmacists in France All of the French pharmacies are now computerized: The market for pharmacists software is therefore a replacement market. Nevertheless, this market remains dynamic given the considerable technological developments it has experienced and continues to experience, particularly with respect to computerizing flows (both for managing direct billing with health insurance and for orders placed with wholesalers and pharmaceutical companies). The new regulatory challenges such as the Pharmaceutical File, the development of the SESAM- Vitale environment, the substitution objectives, the creation of SEL (professional partnerships), product traceability and coding all require short or medium-term developments of the IT tools Cegedim Reference Document 2007

44 6.2.3 Healthcare insurance services Key figures 11% of the Cegedim Group s consolidated sales. Geographic presence: France and French-speaking Africa. Main clients: health insurance and mutual health insurance companies. Competition With 30 million insured people managed, Cegedim Activ is today the French leader in the personal insurance computerization market. In contrast with Cegedim Activ, who specializes in this sector, its competitors are mainly generalists in Consulting, Engineering and Integration such as CSC, Sopra, Linedata and Accenture. As for health flows, there are three technical operators for direct billing management in France: isanté and Cetip, a Cegedim subsidiary (leading operator in terms of number of transactions handled, with 80 million transactions in 2007), Viamedis and Almerys (Orange Business Services). Main market trends Health insurance software According to the French Federation of Insurance Companies (FFSA), the insurance market in France underwent a slight decline in 2007 (down 1.2% to 195 billion euros), breaking with the strong growth in previous years (up 12.2% in 2006 and 11.3% in 2005). The market consolidation remains very active in the personal insurance sector, with the emergence of players managing several million beneficiaries, such as Harmonie Mutuelles which has more than 3 million, Médéric-Malakoff in the provident institutions field and SIACI Saint-Honoré for Brokering. At the same time, the reform of the health insurance system in France is making the system more complex and generates new needs. New communication needs essentially change the situation. The Internet culture, its potential and its ease in communication are winning over all the healthcare players. Behind this cultural and technical change, is the will to better master lead times and costs, to make the circuits more reliable and to guarantee complete confidentiality. More and more projects depend on a complete chain of exchange going from the healthcare professional to the supplementary insurance organization. Recent cases in which Cegedim Activ participated, such as the implementation of Babusiaux recommendations (access to health data from supplementary health organizations) and the rate cards for supplementary plans, are direct results of this logic. On an international level, the Cegedim Group is expanding its services to markets whose health insurance system is similar to the French system, particularly in French-speaking Africa, with confirmed success in Morocco. Healthcare data flows France has a modern healthcare system where the electronic transmission of information has become the norm. More than 245,000 healthcare professionals have SESAM-Vitale systems and approximately 90 million electronic care sheets are exchanged every month. In January 2008, more than 97% of pharmacists electronically transmitted their data along with almost 85% of general practitioners and 67% of specialists (Source GIE SESAM-Vitale). The secure dematerialization of flows in the healthcare field has an operational impact on all the players in supplemental health insurance with the implementation of the Vitale2 card (Mutuality) and the DUO card (FFSA- French Federation of Insurance Companies): these systems will allow the development of nationwide direct billing systems for supplemental healthcare with most healthcare institutions and healthcare professionals. Cegedim Reference Document

45 6.2.4 Technologies and services Key figures 12% of the Cegedim Group s consolidated sales. Geographic presence: France (all industries), Great Britain and Switzerland (payroll and HR). Main clients: businesses in all sectors (banking, telephony, printing, publishing, etc.) including companies in the healthcare sector. Competition The activities of the Technologies and services division cover the supplying of business databases and associated services, payroll outsourcing and human resources management, outsourced IT services and financial leasing. There are a large number of competitors in these different businesses. However, Cegedim SRH is one of the leaders in France for outsourced payroll and human resources management services (according to the 2007 Markess study). Its main competitor is ADP GSI. 6.3 Exceptional events that influenced the information provided in chapters 6.1. and 6.2. There were no exceptional events that affected the information provided in chapters 6.1. and Degree of dependency Cegedim does not depend on either patents or licenses. The Group owns its own operating resources. There are no business partnerships or specific contracts that impact sales by more than 3% except for two customers who do not exceed 6.5% of the 2008 budgeted sales each. Due to its activity as a service provider, the Group has no particular dependency with respect to its suppliers. 6.5 Information on which any declaration made by the issuer concerning its competitive position is based The sources of the figures presented in chapter 6 of this Reference Document are generally cited in the text or explained in the references given below. The topics discussed in the market study in Chapter 6.2 were gathered from web sites, trade publications, Gartner and Eurostaf-type market studies and discussions with pharmaceutical industry experts Cegedim Reference Document 2007

46 Chapter 7 - Organisational chart 7.1 Cegedim Group and Cegedim s place within the Group Cegedim S.A. is a subsidiary of Financière Cegedim, the lead holding company of the Cegedim Group. It is the only Group company listed for trading and does not belong to another group. Cegedim S.A. is active in the following fields: Information technologies: development and upgrading of most of the IT tools used by the other departments and subsidiaries of the Group to supply the services they sell. It is also the Group s IT operations center. Centralized services: payroll processing, employee management, billing, accounting and monthly reporting. All the security, insurance and confidentiality rules in effect in the IT facilities management fields are obeyed. Centralized services also include handling tax, legal, social and accounting, organization and audit questions, insurance, purchasing, external communication and intellectual property. Based on an annual projected operating budget, these expenses are allocated monthly to the Group s subsidiaries according to the allocation key specific to each family of services. Cegedim S.A. also plays an operational role with its departments: Statistics: management of the French pharmaceutical products file, processing and establishment for GERS (EIG uniting all the pharmaceutical companies established in France) of sales statistics for all the pharmaceutical products using data gathered from wholesale distributors and pharmaceutical companies in France. CCD (Cegedim Communication Directe): design, management and marketing of different personal databases (business addresses and associated direct marketing services) as well as management and processing of files for third parties. EDI: Electronic data interchange; data concentrator for the transmission of orders and bills between pharmaceutical companies, wholesale distributors and hospitals (Edipharm system) and the transmission of subrogatory bills between pharmacies and payer agencies (Télépharma). Hosting of application software developed by the Group and information flows management. DMP: tests and development of tools for the management of personal medical files. 7.2 List of Cegedim subsidiaries The list of the Group s subsidiaries, their country of origin and the percentage of control held are given in note 1 of the consolidated financial statements and in chapter 20 of this Reference Document. The Group s organizational chart is presented on next page. Cegedim Reference Document

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49 Cegedim Reference Document 2007

50 Chapter 8 - Real Estate, Production Plants and Equipment 8.1 Significant, existing or planned tangible assets, including real estate leased and any major spending related to them Only 12 companies out of the 156 included in the Group s scope of consolidation own buildings or land for a net book value of 9.4 M on December 31, Most of the companies of the Cegedim Group rent the buildings in which they carry out their operations. In particular, Cegedim S.A. rents all of the facilities it occupies in Boulogne-Billancourt. Some rent amounts are paid to companies (managing holding company Financière Cegedim or different real estate holding companies) that have common directors with Cegedim S.A, as indicated in the Auditors special report reproduced and appended to this Reference Document. The total rent amounts involved (premises and parking) amounted to 4.5iM excluding occupancy expenses for The rent amounts are established based on market conditions and will remain so. 8.2 Use of tangible assets and the environment As indicated in chapter 4.3.2, given their essentially intangible nature, the activities of the Cegedim Group have no significant impact on the environment. The use of tangible assets with respect to the environment thus does not call for any particular remarks. Chapter 9 - Analysis of the financial position and earnings 9.1 Description of and changes in Cegedim s financial position The Management Report prepared by the Board of Directors of Cegedim S.A. gives a description of the financial position of Cegedim S.A. and of the Group. It appears in chapter 26 of this Reference Document. 9.2 Operating earnings The Management Report prepared by the Board of Directors of Cegedim S.A. (appearing in chapter 26 of this Reference Document) gives, where relevant, a description: of the major players, unusual or infrequent events and new developments having an impact on operating revenues; of the reasons for significant changes in net sales or in net income.. To the Company s knowledge, except for the developments presented in chapter 4.3.1, there are no specific governmental, economic, budgetary, monetary or political strategies or factors capable of influencing Cegedim s operations directly or indirectly. Cegedim Reference Document

51 Chapter 10 - Cash Position and Capital 10.1 Cegedim equity capital Consolidated equity capital amounted to M at December 31, 2007 compared to M at December 31, 2006 which was an increase of 39.8 M compensated by a negative translation difference for the Group of 51.8 M and variations in minority holdings ( 0.6 M). The portion belonging to minority holdings including in the equity capital amounts to 1.2 M at December 31, 2007, which is 0.6% 10.2 Borrowing terms and Cegedim financing structure Financial liabilities payable in less than one year amounted to 29.6 M and financial liabilities payable in more than one year came to M, or a total of M compared to M in Given the active cash position, the Group s net debt amounts to M compared to M at the end of 2006, an increase of M. It represents 2.9 times the amount of equity capital. Operating cash flow before the net cost of financial debt is M compared to 90.6 M at December 31, The new loans taken out during the fiscal year were used to finance the acquisition of Dendrite International Inc. (effective May 9, 2007) and to refinance all of the existing loans at that same date. A portion of this debt ( 37 M) corresponds to the financing of activity of the subsidiary Cegelease, which provides financial leasing services, generally over 36 months, to French pharmacists. These pharmacists present virtually no risk of insolvency. The debt is thus backed by financial leases that could easily be assigned to banks in order to free up the necessary cash and cash equivalents, as was the case in April 2007 for a total of 71 M. Because of the reimbursement due dates and cash flow generated by operations, the Group forecasts a return to a net debt ratio less than 3 times the EBITDA (earnings before income tax, depreciation & amortizations) during Source and amount of Cegedim cash flow and description of these flows The closing cash position came to 57.8 M in 2007, compared to M in 2006, which was an increase of 74.3 M. The cash flow statement is reproduced in detail in the consolidated financial statements in chapter 20. Net cash flow generated by operating activities M in 2007 compared to 52.4 M in 2006 ( M). The change in working capital requirement amounted to M in 2007, compared to M in 2006 which was an increase of 41.4 M, essentially due to the deconsolidation of a portion of the Cegelease s customer portfolio in April Operating cash flow (after the net cost of financial debt and tax expense) was 84.4 M in 2007, compared to 65.9iM in 2006, up 18.5 M (+ 28%). This increase reflects in particular the impact of the acquisition of Dendrite. Because this significant acquisition was financed 100% by loan, the cost of financial borrowing amounts to 28.7 M in 2007, an increase of 24.3 M for the fiscal year Cegedim Reference Document 2007

52 Operating cash flow (before the net cost of financial debt and tax expense) was M in 2007, compared to 90.6 M in 2006, up 40.4 M. At the same time, the new combined Group s tax situation was a significant reduction in the effective consolidated tax rate (28.7% in 2007 compared to 34.2% in 2006). Net flows tied to investment operations: M in 2007 compared to M in 2006 ( M). The greatest impact for the fiscal year results from the change in scope caused by the acquisition of Dendrite (which was M out of a total of M for 2007). The acquisition of intangible fixed assets ( 24.0M for 2007) includes an amount for capitalized R&D for the Group for 15.5 M in 2007 (respectively 16.1M including 12.3M in 2006). The acquisition of tangible fixed assets ( 40.2 M for 2007) includes an amount for fixed assets acquired for the purpose of being leased by Cegelease for 23.6 M in 2007 (respectively 35.4 M including 18.6 M in 2006). Consequently, the cost of equipment effectively purchased for use by the Group, excluding R&D, amounts to 25.1iM in 2007 compared to 18.3 M in It also must be noted that there was a disposal of financial fixed assets amounting to 24.8 M in 2007, essentially resulting from the disposal of a group of activities to the Tessi Group. Net cash flow resulting from financing transactions M in 2007 compared to 7.9 M in 2006 ( M). The loans taken out for the fiscal year, net of repayments, amount to M in 2007 compared to 19.8 M in These loans were taken out to finance the acquisition of Dendrite on May 9, 2007, with the concomitant refinancing of all of the Cegedim Group s existing loans. The financial interest paid ( 27.3 M in 2007 compared to 4.4 M in 2006) increased as a result of the new loan. The dividends paid in 2007 amounted to 7.5 M, compared to 7.2 M in Restriction on the use of capital The loans taken out by the Group carry terms based on the consolidated financial statements, particularly related to the net level of indebtedness compared to restated EBITDA or the level of restated EBITDA compared to net financial expenses. These ratios were met at the closing date. The Group is also responsible for not exceeding a certain amount of annual external growth investments. Besides these conditions, there are no restrictions on the use of capital that directly or indirectly appreciably influenced or that might appreciably influence Cegedim s operations. Cegedim Reference Document

53 10.5 Expected sources of financing necessary to honor investment commitments (mentioned in points and 8.1) Considering the operating cash flow and the overdraft margins authorized but not completely used, the Cegedim Group has the necessary cash assets to meet its operating cycle and its capital expenditure plan for the next 12 months. If necessary, Cegedim does not rule out the possibility of going to the market to obtain additional sources of financing. Chapter 11 - Research and development, patents and licenses The Management Report prepared by the Board of Directors of Cegedim S.A. gives a description of the Cegedim Group s research and development policy. It appears in chapter 26 of this Reference Document. Cf. also chapter 4.2.2, relating to intellectual property. Chapter 12 - Information concerning trends The trends applicable at the beginning of 2008 do not show any major differences with those encountered during the 2007 fiscal year. Operating revenue and pricing policy It should be noted that the Group realizes 88% of its sales revenue in the healthcare field, a sector known for its particularly defensive nature which makes the Group rather insensitive (or with a certain amount of inertia) to the general tensions which can affect the economy. The aging tendency of the population in mature countries or the increase in population with a standard of living which is progressively increasing in emerging countries make for an increase in healthcare spending, which is a favorable indicator for the Group s activities. For 2008, Cegedim s international growth perspectives are being confirmed for territories such as South America, Asia and Russia. China and India also offer strong potential which the Group is only starting to tap. The Group does not foresee any significant changes in its pricing policy and is exposed to general parameters which are relatively unchanged for the beginning of Cegedim permanently negotiates with its customers to maintain its selling prices in line with the quality of its services and the permanent updating of its products. Operating expenses Employees make up the Group s main resource and represent one of the most significant expenses. Cegedim adapts its wage policy appropriately in order to motivate talent, ensure training and recruiting while maintaining salary costs within a reasonable growth level. Annual salary reviews, based on individual performances, were applied at the beginning of 2008 and do not require any specific comments Cegedim Reference Document 2007

54 Inventory and production These items do not require any specific comments, and are not significant because of the nature of Cegedim s activities as a service provider. Chapter 13 - Profit projections or estimates The Group does not disclose profit projections or estimates. Chapter 14 - Administrative and Management Bodies 14.1 Name, business address and offices of the corporate officers Members of the Board of Directors The Board of Directors during the 2007 fiscal year was made up of the following members: Jean-Claude Labrune, Chairman & CEO and Founder of Cegedim S.A. Financière Cegedim S.A.S., lead holding company represented by Pierre Marucchi, also Executive General Manager of Cegedim S.A. GERS, an economic interest grouping (EIG) of pharmaceutical companies operating in France, represented by François Blanot Alliance Healthcare France, a company held by the pharmaceuticals distributor Alliance Unichem, represented by Jean-Louis Mery Laurent Labrune, Chairman and CEO of Cegedim SRH, a subsidiary of Cegedim S.A. Aude Labrune-Marysse, Chairman and CEO of Rosenwald, a subsidiary of Cegedim S.A. Jean-Claude Labrune is the father of Aude Labrune-Marysse and Laurent Labrune. The business address of the Directors is the Company s corporate headquarters. Cegedim Reference Document

55 List of offices occupied during the last 5 years excluding the subsidiaries of the Cegedim Group Director Company Office Start End Jean-Claude Labrune Cegedim Director 04/12/1989 General Manager 12/20/1989 Chairman and CEO 08/18/1994 Financière Cegedim Chairman of the Board of Director 07/21/ /24/2005 President (SAS) 06/24/2005 JCL Managing Director 11/30/1994 Pierre Marucchi Cegedim Representative of Financière Cegedim on the Board of Directors 12/04/1989 General Manager 23/04/2002 IRIS Managing Director 1997 Laboratoire Biodim President (SAS) 06/30/ /23/2006 Laurent Labrune Cegedim Director 04/18/2001 Brun co-managing Director 03/11/ /29/2006 Financière Cegedim Director and Executive General Manager 11/21/2005 Aude Labrune-Marysse Cegedim Director 04/27/2007 Brun co-managing Director 03/11/ /29/2006 Financière Cegedim Director and Executive General Manager 11/21/2005 François Blanot Cegedim Representative of GERS on the Board of Directors 02/2005 GIE GERS Director 03/2001 President 01/ Cegedim Reference Document 2007

56 Director Company Office Start End Jean-Louis Mery Alliance Sante France Chairman of the Executive Board 06/23/ /06/2003 President (SAS) 06/13/2003 Alliance Healthcare France Director 04/30/ /29/2003 Chairman and CEO 04/29/2003 Alliance Healthcare Répartition Président (SAS) 1999 Locapharm Director 10/23/ /12/2003 Serex Alliance Sante Director 02/27/ /13/2003 Alphega Representative of Alliance Healthcare France on the Board of Directors 2001 Ouest Répartition Representative of Alliance Healthcare France on the Board of Directors and Director 07/2003 Cegedim Representative of Alliance Healthcare France on the Board of Directors 05/2003 Sedley Participations France Président (SAS) 12/12/2007 Alliance SAT Director 05/ /13/2003 Elvetec Service Director /13/2003 Jean-Claude Labrune and Pierre Marucchi also hold various other offices in the Cegedim Group s French and foreign subsidiaries Experience Jean-Claude Labrune graduated from the Ecole Nationale Supérieure des Arts et Métiers. During his years of experience with IBM as a sales engineer, he became very familiar with the pharmaceutical industry. He was among the promoters of business focus groups bringing together IT directors from pharmaceutical companies like Cedhys. Concerned with providing responses to the problems raised by the profession, he founded Cegedim in Pierre Marucchi graduated from the Ecole Nationale Supérieure des Télécommunications, Stanford University (USA) and the Centre d Etudes Supérieures Bancaires. He was also Member of the Institute of French Actuaries. Pierre Marucchi began his career in 1977 at Crédit Lyonnais where he held various technical and commercial positions. He joined the Cegedim Group in Laurent Labrune graduated from the Ecole Nationale Supérieure des Arts et Métiers. He joined Cegedim in 1995, where he was coordinator of IT development for the Group, before taking over as manager of the subsidiary Cegedim SRH. Aude Labrune-Marysse has a Master s in Commercial Law and a DESS in International Taxation. She joined Cegedim in 1999 before assuming the direction of Rosenwald, a Cegedim subsidiary and holding the position of Executive General Manager in charge of legal matters for the lead holding company, Financière Cegedim. Cegedim Reference Document

57 GERS EIG, a grouping of pharmaceutical companies operating in France, is very familiar with the expectations of the industry. It exercises special vigilance concerning the nature and quality of the services supplied by CEGEDIM, and is a particularly informed source of proposals. Alliance Santé Distribution, a subsidiary of one of the main European pharmaceutical distributors - Alliance Unichem, also offers Cegedim the advantage of its excellent knowledge of the pharmaceutical market. It contributes to fruitful exchanges of viewpoints concerning the opportunities, challenges and strategies specific to the Cegedim environment Declaration During the last five years and to the Company s knowledge: no member of the administrative and management bodies has been convicted of fraud no member of the administrative and management bodies has been involved in bankruptcy, placed under sequestration undergone liquidation proceedings no indictments and/or official public sanctions have been handed down against these persons by the statutory or regulatory authorities and the designated professional agencies no member of the administrative and management bodies has been prevented by a court from acting in his capacity as member of an administrative, management or supervisory body of an issuer or from taking part in the management and conduct of the issuer s business dealings Conflicts of interest in the administrative and management bodies To the Company s knowledge, there are no conflicts of interest in the administrative and management bodies of Cegedim. Each Director must hold at least one share of Cegedim S.A. There are no particular restrictions concerning any potential sale of this share Cegedim Reference Document 2007

58 Chapter 15 - Compensation and Benefits 15.1 Total compensation and in-kind benefits paid individually, directly or indirectly, during the fiscal year to each corporate officer by Cegedim and by any company of the Group The total gross compensation for each corporate officer is as follows: In euros Fiscal year 2007 Total compensation Fixed portion Variable portion Extraordinary variable portion Directors fees Jean-Claude Labrune 724, , ,500 Pierre Marucchi 437, , ,154-10,500 Laurent Labrune 213, ,595 78,562-7,500 Aude Labrune-Marysse 86,079 79,829 6, In-kind benefit Executive car Executive car Executive car Executive car François Blanot 7, ,500 - Jean-Louis Mery 7, ,500 - The variable portion is based on the Group s earnings. The Company has made no commitments to its corporate officers involving compensation or benefits owed or that may be owed as a result of the assumption, cessation or change of these duties or subsequent to them. There are no stock-option plans within the Cegedim Group. There are no financial instruments giving access to the capital, nor other optional instruments of any kind subscribed by the management or employees as part of reserved operations Total amounts allocated or accrued by the issuer or its subsidiaries for the purposes of paying pensions, retirement or other benefits There are no specific supplemental retirement plans set up for certain corporate officers. All the pertinent information related to calculating the provision for retirement compensation is presented in Accounting Principles and note 13 (retirement liabilities) of the consolidated financial statements found in chapter 26 of this Reference Document Allocation of free shares Cegedim adopted, during an extraordinary Shareholder s Meeting on February 22, 2008, an allocation plan for free shares. This instrument was implemented in order to reinforce the motivation of the Group s management. Cegedim Reference Document

59 Chapter 16 - Operation of the administrative and management bodies 16.1 Expiry date and length of the current Directors terms of office Jean-Claude Labrune joined the Board on December 1, Financière Cegedim, which joined the Board on April 12, 1989, has been represented by Pierre Marucchi since this date. The GERS EIG, which joined the Board on March 6, 1995, has been represented by François Blanot since February Alliance Santé Distribution, which joined the Board on November 15, 2000, has been represented by Jean-Louis Mery since May Laurent Labrune joined the Board of Directors on April 18, Aude Labrune-Marysse joined the Board of Directors following the meeting of the Board of Directors on April 27, 2007 for a 6-year term until the General Meeting which will approve the 2012 financial statements. The terms of the Directors of Cegedim S.A. were renewed on April 28, 2004 for 6 years (or until the Meeting called to approve the financial statements for the fiscal year ending in 2009) Information concerning the service contracts binding the members of the administrative and management bodies to the issuer or to any of its subsidiaries and providing for the granting of benefits at the end of this contract None 16.3 Information concerning the audit committee and the compensation committee Cegedim does not have an audit committee or a compensation committee Compliance with the corporate governance system in effect in France Cegedim does not apply the recommendations of the Viénot (1995 and 1999) and Bouton (2002) reports concerning corporate governance. Cegedim complies with all the provisions of Corporate Law and the Code of Commerce governing the operation and organization of its administrative and management bodies. The Company feels that these legal provisions offer completely satisfactory and suitable guarantees for exercising and controlling the powers of its management bodies Cegedim Reference Document 2007

60 Chapter 17 - Employees 17.1 CEGEDIM Group workforce on the closing date The total number of Group employees (Open-ended contracts and Fixed-term contracts) on the closing dates of the last two fiscal years are given in the following table. 12/31/07 12/31/06 12/31/05 CRM and strategic data 5,692 2,460 2,359 Healthcare professionals 1,414 1,311 1,155 Healthcare insurance services Healthcare and strategic data 7,679 4,290 4,014 Technologies and services Total 8,032 4,968 4, Managers interests in the capital and stock options At December 31, 2007, Jean-Claude Labrune, Chairman and CEO of Cegedim, holds 38,496 registered shares of Cegedim, representing 0.41% of the capital and 0.47% of the voting rights Pierre Marucchi, Executive General Manager of Cegedim, among its 3,326 registered shares of Cegedim, holds 16 registered shares entitling him to a double voting right, representing a negligible portion of the capital and voting rights. To the Company s knowledge, there are no other members of the administrative and management bodies who hold registered shares. Cf. also chapter 18.1 of this Reference Document. There are no stock-option plans in the Cegedim Group either for management or for any other category of employees. However, the Group recently implemented a system for the allocation of free shares (cf Chapter 15.3 in this Reference Document) Agreement providing for Cegedim employee equity participation plans There are employee equity sharing agreements in accordance with the legal provisions with application of the ordinary law calculation formula. The share may, at the employee s choice, be paid into a Mutual Fund or left in a current account frozen in the corporate accounts. On December 31, 2007, the Corporate Mutual Fund consisted of 68,174 Cegedim shares, representing 0.73% of the capital. Cegedim Reference Document

61 Chapter 18 - Main Shareholders 18.1 Shareholders Share ownership at December 31, 2006 Number of shares % Held # single votes # double votes Total Shares Votes Votes % Voting rights Financière Cegedim 6,221, % 29,000 6,192,044 12,384,088 12,413, % Alliance Healthcare France 933, % 0 933,145 1,866,290 1,866, % Jean-Claude Labrune 38, % 0 38,496 76,992 76, % GERS 36, % 0 36,788 73,576 73, % Public 2,060, % 2,049,977 10,816 21,632 2,071, % Cegedim S.A. 41, % % Total 9,331, % 2,078,977 7,211,289 14,422,578 16,501, % Share ownership at December 31, 2007 Number of shares % Held # single votes # double votes Total Shares Votes Votes % Voting rights Financière Cegedim 6,221, % 29,000 6,192,044 12,384,088 12,413, % Alliance Healthcare France 933, % 0 933,145 1,866,290 1,866, % Jean-Claude Labrune 38, % 0 38,496 76,992 76, % GERS 36, % 0 36,788 73,576 73, % Public 2,101, % 2,091,586 10,387 20,774 2,112, % Cegedim S.A % % Total 9,331, % 2,120,586 7,210,860 14,421,720 16,542, % To the Company s knowledge, on the date this Reference Document was compiled, the shareholders holding more than 5% of the capital and voting rights are the same as in 2006: Financière Cegedim, Alliance Healthcare France and Financière de l Echiquier. Financière Cegedim is a Simplified Joint-stock Company (S.A.S.) with capital of 479,240 (Trade and Companies Register of Nanterre ) mostly held by Jean-Claude Labrune. It is a management holding company. Alliance Healthcare France is a Public Limited Company (S.A.) with capital of 22,107, (RCS Nanterre ) mostly held by the Alliance Unichem Group (pharmaceutical distributor) Cegedim Reference Document 2007

62 Financière de l Echiquier is an independent Portfolio Management company that specializes in stocks and that is wholly owned by its management and its employees. It is now one of the leading private management companies in France. The latest declared threshold crossings are as follows: March 28, 2001: Alliance Healthcare France (10% threshold) November 23, 2006: Financière de l Echiquier (5% threshold) 18.2 Special voting rights Cf. above in chapter 18.1 of this Reference Document Control of Cegedim Cegedim is controlled by Financière Cegedim, cf. above chapter Agreement that may result in a change in control No shareholders agreement has been declared to the market authorities or made known to the Company. (A shareholders agreement is an agreement that sets forth preferred conditions for selling or buying shares traded on a regulated market or for which listing is requested and that concerns at least 0.5% of the capital or voting rights of the company that issued these shares). To the Company s knowledge, there are no agreements whose implementation could, at a later date, result in a change in its control. Chapter 19 - Operations with related parties The regulated agreements that were submitted for the prior authorization of the Board of Directors are detailed in the Auditors special report contained in chapter 26 of this Reference Document. Note 24 of the notes to the 2007 consolidated financial statements appearing in chapter 20 of this Reference Document also provides detailed figures for operations with related parties. Cegedim Reference Document

63 Chapter 20 - Financial Information Involving the Issuer s Assets, Financial Position and Earnings 20.1 Historical financial information - Statutory financial statements Financial statements as at December 31, 2007 for Cegedim S.A. ASSETS BALANCE SHEET - STATUTORY FINANCIAL STATEMENTS In thousands of euros Headings Gross Depreciation Euros/Net Euros/Net Euros/Net Euros/Net Pro forma Amount and Provisions 12/31/07 12/31/06 12/31/05 12/31/05 INTANGIBLE ASSETS Development costs Concessions, patents, and similar rights Goodwill Other intangible assets TANGIBLE ASSETS Buildings Technical facilities, tooling Other tangible assets Construction work in progress FINANCIAL ASSETS Other equity investments Loans Other financial investments FIXED ASSETS INVENTORIES AND WORK IN PROGRESS Inventories of goods and raw materials Advances and deposits made on orders RECEIVABLES Trade receivables and associated accounts Other receivables Subscribed and Called Capital not paid 500 Marketable securities Cash and cash equivalents ACCRUALS Prepaid expenses CURRENT ASSETS Deferred loan issuing costs Unrealized exchange gains GRAND TOTAL Cegedim Reference Document 2007

64 LIABILITIES BALANCE SHEET - STATUTORY FINANCIAL STATEMENTS In thousands of euros Headings 12/31/ /31/ /31/ /31/2005 Pro forma Share capital Share premium Legal reserves Regulated reserves Other reserves Retained earnings EARNINGS FOR THE FISCAL YEAR Regulated Provisions SHAREHOLDERS EQUITY Provisions for risks Provisions for expenses PROVISIONS FOR RISKS AND EXPENSES FINANCIAL LIABILITIES Borrowings and liabilities from financial institutions Miscellaneous borrowings and debt Advances & payments on account received on orders in progre OPERATING LIABILITIES Trade payables and related accounts Tax and social liabilities MISCELLANEOUS LIABILITIES Debts on fixed assets and associated accounts Other liabilities Deferred income LIABILITIES Unrealized exchange losses GRAND TOTAL Cegedim Reference Document

65 INCOME STATEMENT - PART ONE In thousands of euros Headings 12/31/ /31/ /31/ /31/ /31/2005 Pro forma Pro forma Sale of goods France Production sold - goods France Production sold - services France Production sold - services outside France NET SALES REVENUES Capitalized production Write-back of depreciation, provisions and transfer of costs Other income OPERATING REVENUES Purchase of goods Variations in inventories of goods and raw materials Purchase of raw materials and supplies Other external purchases and expenses Taxes, duties and similar payments Wages and salaries Payroll taxes Depreciation of fixed assets Provisions for current assets Provisions for risks and expenses Other expenses OPERATING EXPENSES OPERATING EARNINGS Cegedim Reference Document 2007

66 INCOME STATEMENT - PART TWO In thousands of euros Headings 12/31/ /31/ /31/ /31/ /31/2005 Pro forma Pro forma Financial income from equity interests Other interest and related income Write-backs of provisions and transferred expenses Foreign exchange gains Net gain on disposal of short-term investments FINANCIAL INCOME Financial depreciation and provisions Interest and related expenses Foreign exchange losses FINANCIAL EXPENSES FINANCIAL PROFIT/LOSS EARNINGS BEFORE INCOME TAX Non-recurring income on management operations Non-recurring income on capital operations Writebacks on provisions and transferred expenses NON-RECURRING INCOME Non-recurring expenses on management operations Non-recurring expenses on capital operations Non-recurring expenses from depreciation and provisions NON-RECURRING EXPENSES NON-RECURRING PROFIT/LOSS Employee profit-sharing Income taxes TOTAL REVENUE TOTAL EXPENSES NET PROFIT/LOSS NET EARNINGS PER SHARE (in euros) EARNINGS BEFORE TAX PER SHARE (in euros) NET INCOME PER SHARE (in euros) Cegedim Reference Document

67 TABLE OF SUBSIDIARIES AND TRADE INVESTMENTS Subsidiaries held at over 50% Share capital (1) Shareholders' equity, other than share capital (1) % control Book value of securities held Gross value AMIX % 8 ALLIADIS % APSYS NET % 956 BKL Consultants % CBU % 15 CDS % CEGELEASE % CEGEDIM SRH % CEGEDIM HOLDING CIS % 420 CETIP % HOSPITALIS % 37 ICOMED % 189 INCAMS % MEDEXACT % 655 PCO CEGEDIM % PHARMAPOST % PHARMASTOCK % 76 QUALIPHARMA % 234 RESIP % RNP % ROSENWALD % I SANTE (ex SANTESTAT) % 8 SOFILOCA % 15 SCI % 847 CEGEDIM INC USA % CEGEDIM DO BRAZIL % 716 CEGEDIM HOLDING GMBH % CEGEDIM GMBH (Autstria) % 130 CEGEDIM denrite LTD % 64 IN PRACTICE SYSTEMS (England) % 0 THIN (England) % 188 CEGEDIM WORLD INT.SERVICES LTD % CEGEDIM HUNGARY KFT % 89 CEGEDIM TURKEY % 390 CEGEDIM HELLAS % 360 CEGEDIM ROMANIA SRL % CEGEDIM SK (Slovakia) % 8 CROISSANCE 2006 (Luxemburg) % CEGEDIM Belgium % 75 CEGEDIM TUNISIA % 196 CEGEDIM ALGERIA % 85 CEGEDIM CIS (ex: CEI STAT) Czech Republic % CEGEDIM CZ Czech Republic % 29 CEGEDIM Italy % CEGEDIM TRENDS (Egypt) % 434 CEGEDIM Spain % CEGEDIM Portugal % 495 Subsidiaries held with less than 50% Share capital (1) Shareholders' equity, other share capital (1) % control Book value of securities held Gross value ART & STRATÉGIE % 13 CEGERS % 23 EDIPHARM % 3 AGDF CEGEDIM RS (ex ICSF) % 0 NETFECTIVE TECHNOLOGY % 899 THALES CEGEDIM % 19 BKL Pharma Consulting (Belgium) % 0 CEGEDIM POLAND SP % 10 GERS MAGHREB (Tunisia) % 40 (1) Share capital and shareholders equity of subsidiaries that are not in the Euro zone are indicated in thousands of euros at the historical date Cegedim Reference Document 2007

68 TABLE OF SUBSIDIARIES AND TRADE INVESTMENTS Book value of securities held Net value Book value of securities held Net value Loans and advances granted not Sales revenue reimbursed Gross value Provision Provision Risk excl. tx (2) Net earnings (2) Dividends received Loans and advances granted not Sales revenue reimbursed Gross value Provision Provision Risk excl. tx (2) Net earnings (2) Dividends received (2) Revenue and net earnings of subsidiaries that are not in the Euro zone are indicated in thousands of euros at the annual average exchange rate for Cegedim Reference Document

69 Notes to Cegedim S.A. s corporate financial statements NOTE 1: HIGHLIGHTS OF THE 2007 FISCAL YEAR A) Acquisition of the Dendrite Group On May 9, 2007, in order to consolidate its activities, the Cegedim Group, whose corporate headquarters is located in Boulogne Billancourt, acquired the Dendrite Group. This acquisition generated an increase in the financial borrowing which impacted Cegedim S.A. s financial expenses for 33,064 K compared to 9,741 K in B) Sale of CMP Business Cegedim S.A. sold its CMP activity business to XWZ 32MP on April 30, Cegedim S.A. recorded capital gains of 2,400 K on this sale. The valuation of the CMP business line was carried out by the DCF (Discounted Cash Flow) method, which consisted in calculating, by discounting, the net present value of the expected future cash flow for the activity sold. The discount rate used was increased by a risk premium, compared to the WACC generally used for the Cegedim Group, in order to take into account the lower recurrence of sales and the higher-risk profile of the clientele belonging to the business sold. The sale price which thus determined ( 2.4 M) was then broken down between tangible assets (insignificant because of the high service component for the activity) and intangible assets (almost all). C) Capitalization of development expenses Development expenses for internal projects were capitalized as intangible assets in the amount of 7,117 K, since the conditions set forth for this capitalization by the General Chart of Accounts were satisfied. D) Sale and transfer of ownership of Securities Cegedim S.A. sold the securities for Declaratis and SDI to XWZ 32, and then sold XWZ 32 s securities to Tessi on July 03, 2007, for a price which remains confidential. Cegedim S.A. recorded a loss on the sale of shares for 3,662 K and a loss on the sale of receivables of 4,339 K. On December 31, 2007, Cegedim S.A. transferred ownership of CAM CORP US shares to Cegedim Inc. for an amount of 16,739 K. E) Pro forma of the 2006 Income Statement resulting from the Complete transfer of assets and liabilities on December 30, 2006 Cegedim S.A. absorbed TVF, Santesur, and Pharma CRM on December 30, This complete transfer of assets and liabilities took place on December 30, 2006, without accounting retroactivity. As a result, the Cegedim S.A. balance sheet at December 31, 2006, consists, on the one hand, of the assets and liabilities of the company and, on the other, of the assets and liabilities of the companies taken over. Concerning the income statement at December 31, 2006, Cegedim S.A. takes into account the merger boni and mali tied to the complete transfer of assets and liabilities. A pro forma for the 2005 fiscal year was established taking into account the merger boni and mali as if the complete transfer of assets and liabilities had taken place in For the 2007 fiscal year, the Income Statement includes the information from the absorbed companies excluding intra-group transactions. Because of this, pro forma financial statements were established for the 2006 fiscal year in order to provide comparative information between the 2006 and 2007 Income Statements. The pro forma financial statements were established by combining the revenue and expense accounts for Cegedim and the absorbed companies and eliminating the intra-group transactions recorded among them Cegedim Reference Document 2007

70 NOTE 2: ACCOUNTING RULES AND METHODS The annual financial statements are prepared in accordance with the French legal and regulatory provisions. The general accounting conventions were applied in accordance with the principle of conservatism using the following basic assumptions: Operational continuity Consistency of accounting methods from one fiscal year to the next Independence of fiscal years. The basic method used to value the items included in the financial statements is the historical costs method. The main rules and methods used are as follows: A) Intangible fixed assets Cegedim S.A. s intangible assets consist essentially of development expenses and acquired software. Research and development expenses Cegedim incurs costs in connection with internal project development operations. The expenses incurred for the research phase of an internal project are recorded as expenses when they are incurred. Development costs for new internal projects are capitalized as long as the following criteria are fully satisfied (CRC Regulation No ): The technical feasibility necessary to complete the intangible asset in order to use it or sell it The intention to complete the intangible asset and to use or sell it The ability to use or sell the intangible assets The way in which the intangible asset will generate likely future economic benefits The availability of appropriate resources (technical, financial and other) to complete the development and use or sell the intangible asset The ability to reliably measure the expenses attributable to the intangible assets during its development. If these criteria are not satisfied, development costs are recorded as expenses for the fiscal year during which they were incurred. Development costs include all expenses that can be directly attributed to the intangible asset and that are necessary to create it, produce it and prepare it so that it operates in accordance with the use planned by management. Depreciation is calculated using the straight-line method starting with the initial use of the underlying asset and is calculated over its foreseeable useful life. Acquired assets Acquired intangible assets are valued at their purchase cost and depreciated using the straight-line method over their economic useful life. Cegedim Reference Document

71 The main depreciation periods used are as follows: Depreciation period Method Concessions Between 5 and 20 years Straight-line Software Between 1 and 5 years Straight-line B) Tangible fixed assets Acquired tangible assets are valued at their purchase cost and depreciated over their economic useful life. The depreciable base used is the purchase cost. The useful lives are reviewed periodically and may be modified prospectively depending on the circumstances. Cegedim S.A. s tangible assets consist essentially of computer hardware and fixtures and facilities. The depreciation periods and methods used are generally the following: Computer equipment Microcomputers intended for office use: between 3 and 4 years; straight-line method Server systems: straight-line depreciation; between 5 and 15 years Fixtures and facilities Fixtures and facilities have a useful life from 8 to 15 years (8 years is the basic useful life). They are depreciated using the straight-line method. C) Equity investments and other investments Their gross value consists of the purchase cost, excluding ancillary acquisition expenses. Securities are the subject of a provision for impairment determined according to the consolidation method. This method s objective is to compare the amount of the securities to the net value + goodwill (recorded in the consolidation) for the subsidiary. On the basis of impairment tests carried out each year and/or loss in value indicators that have been identified, a provision is recognized if necessary. Provisions deemed necessary are charged against equity investments, loans or current accounts or are accounted for as provisions for risks and expenses. Treasury shares held pursuant to an authorization granted by the General Meeting are valued at their purchase price. A provision for impairment is set up if the average price for the last month of the fiscal year is lower than the acquisition value. The provision is equal to this difference. D) Accounts receivable Receivables are valued at their face value. A provision for impairment is set up if the inventory value, based on the probability of their collection, is less than the recorded value. Thus, doubtful clients are routinely impaired at 100% and receivables outstanding for more than six months are monitored on a case by case basis and, if necessary, impaired in the amount of the estimated risk of non-collection Cegedim Reference Document 2007

72 E) Retirement commitments Retirement obligations are accounted for as a provision for expenses. Cegedim S.A. effectively applies the provisions of the CNC recommendation No R-01 of April 1, 2003, related to accounting for and measuring retirement obligations and similar benefits as the preferred method. Cegedim S.A. s obligations are partially covered by funds paid to a financial agency; the amount of these dedicated investments is therefore deducted from the total obligation on the liabilities side of the balance sheet. The company s actuarial liabilities are calculated using the projected credit unit method and on the basis of measurements that include assumptions concerning wage increases, inflation, life expectancy, employee turnover and return on dedicated investments. Changes tied to periodic modifications of the actuarial assumptions listed above related to financial and economic situations or to demographic conditions are recorded in the income statement. F) Revenue Recognition Cegedim S.A. s revenues consist primarily of services and any sales of software and hardware. Services The main categories of services and the methods of revenue recognition are as follows: Access to Cegedim s databases is usually by subscription, with periodic invoicing (monthly or yearly) The sales are then recorded on a prorated basis, according to elapsed time. Standard and specific studies supplied by Cegedim are recorded when they are delivered to the customers. Data processing performed for clients is recorded when the service is provided. Support services (assistance, maintenance, etc.) are covered by a contract (generally annual) calculated on a lump sum basis in relation to the costs and resources committed by Cegedim to provide these services. Income from these contracts is recorded on a prorated basis over the term of the contract and results in the recognition of deferred income. Software and hardware sales These sales are recorded at the time of delivery, concomitant with installation at the professional s site. Any discounts and rebates are subtracted from sales. G) Transactions in foreign currencies Expenses and income in foreign currencies are recorded at their exchange value in euros on the date of the transaction. Liabilities and receivables in foreign currencies appear in the balance sheet at their exchange value in euros at the end of the fiscal year. Differences resulting from the translation of liabilities and receivables from foreign currencies at this closing exchange rate are listed in the balance sheet as Exchange gains or losses. Unrealized, unhedged exchange losses are covered by a provision for risks. H) Detail of expenses to allocate / loan issuing expense The loan issuing expenses for the loan which was needed to carry out the purchase of the Dendrite Group were allocated over the life of the loan in a manner which was appropriate to the repayment terms of the loan. The expenses were recorded in account 6272 Commissions and expenses for issuing of loans. Cegedim Reference Document

73 At the end of the fiscal year, in order to be able to allocate it, all of the expenses were transferred to account 4816 Loan issuing expenses by crediting account 791 Transfer of operating expenses. Starting with the fiscal year when the loan was issued and the following fiscal years, the expense resulting from the allocation of loan issuing costs is recorded as a debit to account 6812 Depreciation for operating expenses to be allocated. NOTE 3: FIXED ASSETS - GROSS VALUE In thousands of euros Headings Balance on Acquisitions Disposals Balance on 12/31/2006 Contributions Withdrawals 12/31/2007 INTANGIBLE ASSETS Buildings on un-owned land Technical installations, tooling Office and IT equipment and furniture Tangible assets under construction TOTAL TANGIBLE FIXED ASSETS Other equity investments (1) Loans and other financial investments (3) (2) TOTAL LONG-TERM INVESTMENTS GRAND TOTAL (1) The increase in the value of equity investments is essentially explained by the increase in value of Cegedim USA s shares following an increase in capital by incorporation of a current account in the amount of 280,515 K. (2) The account Loans, other financial assets is made up of security deposits paid for 2,669 K and loans to subsidiaries for K. (3) Including a loan granted to Cegedim USA for 553,610 K for the acquisition of the Dendrite Group. The terms generally used for loans granted to subsidiaries are 4% for the interest rate, with variable length and the absence of a tacit agreement clause and other specific clauses Cegedim Reference Document 2007

74 NOTE 4: SECTOR DEPRECIATION In thousands of euros Balances and transactions Balance on Depreciation Reversals Balance on for the fiscal year 12/31/ /31/2007 INTANGIBLE ASSETS Buildings on un-owned land Technical facilities, tooling Office and computer equipment TOTAL TANGIBLE FIXED ASSETS GRAND TOTAL Breakdown of depreciation Accelerated Straight-line Declining balance Depreciation Reversals INTANGIBLE ASSETS Buildings on un-owned land 51 Technical facilities, tooling Office and computer equipment 123 TOTAL TANGIBLE FIXED ASSETS GRAND TOTAL NOTE 5: PROVISIONS In thousands of euros Headings Balance on Depreciation Reversals Balance on 12/31/2006 Used Not Used 12/31/2007 Accelerated depreciation TOTAL REGULATED PROVISIONS Provisions for litigation Provision for exchange losses Provisions for pensions and similar obligations Provisions for risk on equity investments TOTAL PROVISIONS FOR RISKS AND EXPENSES Equity investments Other long-term investments Provisions for impairment of trade receivables TOTAL PROVISIONS FOR IMPAIRMENT GRAND TOTAL Operating depreciation and reversals Financial depreciation and reversals Non-recurring depreciation and reversals Cegedim Reference Document

75 NOTE 6: DUE DATES OF RECEIVABLES AND LIABILITIES In thousands of euros Statement of Receivables Gross Within Over amount 1 year 1 year Loans Other long-term investments Doubtful or litigious customer receivables Other customer receivables Employees and related obligations Social security and other social agencies 0 0 Government: Corporate tax Government: Value added tax Government: Miscellaneous receivables 2 2 Group and associates 0 0 Miscellaneous debtors Prepaid expenses GRAND TOTAL Loans granted during the fiscal year (1) Reimbursements received during the fiscal year (2) (1) Including a loan granted to Cegedim USA for 553,610 K for the acquisition of the Dendrite Group. (2) Including a reduction of 280,515 K which can be explained by an increase in capital due to the incorporation of the current account. Statement of Liabilities Gross Within Between 1 More than Amount 1 year and 5 years 5 years Loans due in under 1 year maximum originally Loans due in more than 1 year originally Miscellaneous borrowings and financial liabilities Accounts payable Employees and related obligations Social security and other social agencies Government: Corporate tax 0 0 Government: Value added tax Government: Other income tax, and other related taxes Payables on fixed assets and associated accounts 0 0 Group and associates Other liabilities Deferred income GRAND TOTAL Loans taken out during the fiscal year Loans reimbursed during the fiscal year Cegedim Reference Document 2007

76 NOTE 7: RETIREMENT Through an insurance fund Through a provision for expenses Retirement obligation covered 1,314 K 1,417 K When employees retire, they receive retirement compensation as defined in the collective bargaining agreement. An actuarial valuation plan has been set up to fund the obligations tied to this compensation. The total obligation comes to 2,731,560 including 1,313,935 paid to an insurance company. The actuarial assumptions used are as follows: Economic assumptions Net interest rate: 5.0% Wage increases: 2.0%, inflation included Demographic assumptions Mortality: Mortality tables used are the prospective tables by generation (TPG93) Mobility: 5.0% per year up to age % up to age % up to age 50 and 0% after that. Retirement age Retirement at age 65 for non-management personnel Retirement at age 65 for management personnel Collective bargaining agreement: Cegedim comes under the national collective bargaining agreement for the Pharmaceutical Industry. NOTE 8: CONSOLIDATED TAX GROUP Cegedim S.A. is the parent company and head of the Group. The following companies elected to form a consolidated tax group with Cegedim S.A.: Alliadis, Alliance Software, AGDF Cegedim RS, Apsys NET, AMIX, Bkl Thales, CBU, CDS, Cegedim Activ, Cegedim Holding CIS, Cegedim Ingénierie, Cegedim SRH, Cegelease, Cetip, Data Conseil, Euroformat, Hospitalis, Icomed, Incams, PCO Cegedim, Pharmastock, Qualipharma, RESIP, RNP, RMI, Rosenwald, isanté, Selectis, Sofiloca, Proval S.A. and Proval NTIC. Tax expenses are borne by the consolidated companies as if there were no tax consolidation. The tax savings of unprofitable subsidiaries are recorded as an immediate gain in the parent company and amounted to 7,263 Kfor 2007 ( 2,085 Kfor 2006). The deficits of the companies included in the consolidated tax group scope flowed to the parent company. Companies likely to become profitable again at an undetermined future time would potentially generate an additional future tax expense estimated at 10,568 K on December 31, 2007 for Cegedim S.A. Cegedim Reference Document

77 NOTE 9: IDENTITY OF CEGEDIM S PARENT COMPANY: FINANCIERE CEGEDIM A public limited company (S.A.) held primarily by Mr. Labrune, his family and by certain members of the Board of Directors of Cegedim S.A. NOTE 10: DATA COMING UNDER SEVERAL BALANCE SHEET AND INCOME STATEMENT ITEMS In thousands of euros Headings Consolidated Equity Investments Related companies companies FIXED ASSETS Equity Investments Loans CURRENT ASSETS Trade receivables and associated accounts Other receivables 0 14 LIABILITIES Financial liabilities Trade payables and related accounts Other liabilities 868 INVESTMENTS Financial expenses Financial income OPERATING Management fees Rent NOTE 11: ADVANCES PAID TO MANAGEMENT In accordance with article L of the French Code of Commerce, no advances or loans were granted to the Company s management. NOTE 12: INCOME RECEIVABLE In thousands of euros Amount Clients - Invoices to be prepared 694 Trade receivables 694 Suppliers, accrued credits 795 Miscellaneous accrued receivables 2 Receivables from employees 29 Other receivables 826 Banks, accrued interest receivable 0 TOTAL Cegedim Reference Document 2007

78 NOTE 13: EXPENSES PAYABLE In thousands of euros Headings Amount Accrued interest payable on loans 0 Accrued interest payable on equity investments 128 Accrued interest payable on overdrafts 24 Borrowings and financial liabilities 152 Suppliers, accrued invoices Accounts payable and related accounts Provision for paid holidays Reduced work time provision 944 Other personnel expenses payable Government, expenses payable Tax and social liabilities Clients - Credits to be established Miscellaneous expenses payable Other liabilities TOTAL Cegedim Reference Document

79 NOTE 14: DEFERRED REVENUE AND EXPENSES In thousands of euros Headings Amount CCA Group Custom Work 14 Purchase of files 36 Custom work 127 Transpac IT lines 23 Water, EDF, heating 0 Finance lease 12 Rent 722 Lease computer hardware 3 Software royalties 101 Lease miscellaneous equipment 5 Maintenance premises and facilities 16 Maintenance computer hardware 124 Maintenance software 916 Maintenance machinery and equipment 3 Insurance 12 Accruals 9 Documentation 0 Temporary contract 150 Advertising 66 Stock market fees 1 Receiving costs 1 Contributions 2 Recruiting costs 64 TOTAL Accrued Expenses Headings Amount Service revenues 159 TOTAL Accrued Revenue 159 NOTE 15: DETAIL OF EXPENSES TO ALLOCATE In thousands of euros Balance on Increase Decrease Balance on 12/31/ /31/2007 Loan issue costs 0 9,345 1,007 8,338 The loan issuing expenses for the loan which was needed to carry out the purchase of the Dendrite Group were allocated over the life of the loan in which is 6 years, by linear method Cegedim Reference Document 2007

80 NOTE 16: COMPOSITION OF THE CAPITAL STOCK Categories of shares Number of shares Par Value At the end of the fiscal year Created during the fiscal year Created by division At the beginning of the fiscal year At the end of the fiscal year Par at the beginning of the fiscal year Common shares 9,331,449 9,331, NOTE 17: TABLE OF CHANGES IN SHAREHOLDERS EQUITY Capital Premiums Legal Regulated Other Carry Earnings from Regulated Total reserves reserves reserves forward fiscal year provisions Capital increase 0 Decrease in capital profit/loss Dividends Carry forward Regulated Provisions profit/loss As of 12/31/2005 (1) Capital increase 0 Decrease in capital profit/loss Dividends Carry forward Regulated Provisions profit/loss As of 12/31/2006 (1) Capital increase 0 Decrease in capital profit/loss Dividends Carry forward Regulated Provisions profit/loss As of 12/31/2007 (1) (1) Equity capital before distribution Cegedim Reference Document

81 NOTE 18: BREAKDOWN OF SALES In thousands of euros Headings Sales Revenue France Outside France Total Sales of goods Production of goods Production of services TOTAL NOTE 19: SHARE OF NET INCOME ON JOINT OPERATIONS In thousands of euros Total earnings Transferred earnings EDIPHARM TOTAL NOTE 20: NON-RECURRING EXPENSES AND INCOME In thousands of euros Description of expense Amount Book value of intangible fixed assets sold 3 Book value of tangible fixed assets sold 46 Book value of long-term investments sold (1) Accelerated amortization and depreciation 390 TOTAL Type of Income Amount Gain on the sale of intangible fixed assets Gain on the disposal of tangible fixed assets 19 Gain on the disposal of long term investments (1) Gain on treasury stock repurchase Writeback of accelerated depreciation 719 Writeback provision on holdings for subsidiaries sold (3) TOTAL (2) (1) (2) (3) Including sale of Declaratis and SDI securities to XWZ 32 and sale of XWZ 32 securities to Tessi Including sale of CMP business to XWZ 32 MP Including writeback on securities of companies sold (Declaratis, SDI and Docubase Inc.) Cegedim Reference Document 2007

82 NOTE 21: BREAKDOWN OF CORPORATE TAX In thousands of euros Breakdown Earnings Taxes due Net earnings before income tax after income tax Current earnings Corporate tax savings on deficits/consolidated companies CT refunds consolidated companies Neutralization of CT tax consolidation Short term non-recurring earnings Employee profit-sharing Tax on transferred companies 0 0 Source withholding CT previous years ACCOUNTING EARNINGS NOTE 22: DEFERRED AND LATENT TAX SITUATION Deferred taxation is as follows: Organic: 258 K Construction: 155 K Equity interests: 254 K Retirement provision: 1,417 K The corresponding deferred tax amounts to 718 K. NOTE 23: COMPENSATION OF MANAGEMENT AND BOARD OF DIRECTORS In thousands of euros Directors fees paid to board members came to 37.5 K in 2007 and are recorded as "Other expenses" in the income statement. 12/31/ /31/2006 Short-term benefits (wages, bonuses, etc.) Post-employment benefits nil nil Severance pay nil nil Benefits recognized Termination benefits nil nil Benefits not recognized nil nil Cegedim Reference Document

83 NOTE 24: NUMBER OF EMPLOYEES AT DECEMBER 31, 2007 Employees Salaried personnel Management 509 Non-management 401 Trainees 3 TOTAL 913 NOTE 25: DEBT In thousands of euros 12/31/ /31/2006 Long-term financial borrowing and liabilities (>5 years) (1) Mid and long-term financial borrowing and liabilities (>1 year, < 5 years) (1) Short-term financial borrowing and liabilities (<1 year) (1) Current bank loans (2) Total financial liabilities Total active cash (3) Net financial debt Operating cash flow (1) New borrowing: 684,958 K (2) Bank loans: advances to subsidiaries (3) Including SGN CPTE USD account for 5,325 K The financing of the acquisition of the Dendrite Group was carried out entirely through an outside loan contracted by the Cegedim Group. Financing was implemented on May 9, 2007 to purchase Dendrite and to reconsolidate the existing debt. The financing is divided in the following way: RESIDUAL TERMS FOR MAIN LOANS VALUE EURIBOR RATE Year As revolver credit facilities renewable every 3 months Year As an amortizable loan with the following terms: Euribor rate with SWAP for a total of 350,000 K - from 05/09/2007 to 09/30/2008: Ceiling at 4.10% for Euribor 3 months - from 09/30/2008 to 09/30/2010: Fixed rate at 4.39% for Euribor 3 months - from 09/30/2010 to 05/04/2013: Ceiling at 4.69% for Euribor 3 months USD LIBOR RATE Year Loan for $200,000 K with value on 12/31/2007 of 135,860 K As an amortizable loan with the following terms: Including 4.26% fixed rate SWAP Loan of $50,000 K As revolver credit facilities renewable every 3 months This loan was completely reimbursed on July 20, Cegedim Reference Document 2007

84 NOTE 26: OFF-BALANCE SHEET COMMITMENTS Guarantees given by Cegedim to its subsidiaries Pharmastock Subsidiary Joint and several surety of its subsidiary Pharmastock in favor of Baticentre concerning the performance of the terms of the leasing operation in the amount of 299 K (Board of Directors authorization dated August 13, 2002). Cegedim granted other bank securities (LCL) amounting to 7 K in favor of the Centre Hospitalier P. Ardier and 30 K in favor of C.R.P.C.E.N. Pledges of subsidiary securities For the Dendrite acquisition financing transaction, the securities of the following companies were pledged: In Practice Systems Cegedim USA Inc. NOTE 27: TREASURY SHARES In 2002, Cegedim bought back 59,319 shares for a total of 3,435 K in accordance with the authorization given by the General Meeting of April 23, During 2007, the Company sold 41,183 shares for a total of 3,434 K. In 2006, the Company sold 9,549 of these shares for a total of 731 K. At December 31, 2007 there are no longer any treasury shares. Qty Amount In '000s Balance carried forward on 01/01/ Acquisitions Disposals Balance as of 12/31/ NOTE 28: INFORMATION REGARDING THE INDIVIDUAL RIGHT TO TRAINING The aggregate training hours corresponding to the rights acquired pursuant to the individual right to training by employees on 12/31/2007 amounted to 52,062 (48,787 of these training hours were not requested). Cegedim Reference Document

85 Auditors General Report on the corporate financial statements Ladies and Gentlemen, In accordance with the mandate given to us by your Shareholders Meeting, we hereby present our report for the fiscal year ended 31 st December, 2007 on: The audit of the accompanying statutory financial statements for Cegedim The justification of our assessments The specific verifications and information required by law. The annual financial statements have been accepted by the Board of Directors. Our role is to express an opinion on these financial statements based on our audit I - Opinion on the statutory financial statements We conducted our audit in accordance with the professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statutory financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the statutory financial statements present fairly, in all material respects, the financial position of the Company at the end of the fiscal year, and the results of its operations for the year then ended in accordance with the accounting rules and principles applicable in France. II - Justification of our assessments Pursuant to the provisions of article L of the Code of Commerce related to justifying our assessments, we bring to your attention the following information: Accounting principles Capitalization of development costs As part of our assessment of the accounting principles used by your Company, we examined how development expenses are recorded as assets, how they are depreciated and how their recoverable value is determined, and we made sure that Note 2 Accounting Rules and Methods Paragraph A) Intangible assets in the notes to the annual financial statements provides appropriate information. Accounting estimates Valuation of equity investments Equity investments appearing on the assets side of your Company s balance sheet are valued using the methods presented in Note 2 Accounting Rules and Methods paragraph C) Equity investments and other investments in the notes to the annual financial statements. We performed specific assessments of the information taken into consideration to estimate inventory values and, where necessary, we checked the calculation of impairment provisions. These assessments do not call for any particular comments from us either concerning the methodology used or the reasonable nature of the valuations used or the information provided in the appended notes Cegedim Reference Document 2007

86 Retirement obligations Note 2 Accounting Rules and Methods - paragraph E) Retirement commitments in the notes to the annual financial statements specifies the methods for measuring retirement obligations. These obligations were measured by outside actuaries. Our work consisted in examining the data used, in assessing the assumptions used and in making sure that note 7 of the notes to the annual financial statements provides appropriate information. As part of our assessments, we made sure that these estimates were reasonable. The assessments we performed are thus consistent with our approach to auditing annual financial statements, taken in their entirety, and thus helped us form our opinion expressed in the first part of this report. II - Specific verifications and information We have also performed the specific verifications required by law in accordance with professional standards applicable in France. We have no comments to make regarding: The fair presentation and the conformity with the financial statements of the information given in the Management Report, and in the documents addressed to the shareholders with respect to the financial position and the financial statements. The truth and fairness of the information given in the Management Report regarding the compensation and in-kind benefits paid to company officers involved as well as commitments given to them as a result of the assumption, cessation or change in their duties or subsequent to them. In accordance with French Law, we have ensured that the required information concerning the purchase of investments and controlling interests has been properly disclosed in the Management Report. Drawn up in Paris and Courbevoie, on April 23, 2008 The Auditors Grant Thornton 100 rue de Courcelles Paris cedex 17 TEL: +33 (0) Mazars & Guérard 61 rue Henri Regnault Courbevoie TEL: +33 (0) Michel Cohen Auditor Jean-Paul Stevenard Auditor Cegedim Reference Document

87 20.2 Historical financial information - Consolidated financial statements Consolidated financial statements at December 31, Cegedim Group ASSETS BALANCE SHEET - CONSOLIDATED FINANCIAL STATEMENTS In thousands of euros Note 12/31/ /31/ /31/2005 Net Net Net Uncalled subscribed capital GOODWILL ON ACQUISITION (Note 7) Development costs Concessions, patents, trademarks Other intangible assets INTANGIBLE ASSETS (Note 3) Property Buildings Plant, machinery and equipment Other intangible assets Construction in progress TANGIBLE ASSETS (Note 4) Equity investments Equity shares in equity method companies (Note 6) Loans granted Other financial assets FINANCIAL ASSETS (Note 5) Government - Deferred tax (Note 17) Accounts receivable: long-term portion (Note 9) Other receivables: long-term portion (Note 10) NON CURRENT ASSETS Services in progress (Note 8) Goods (Note 8) Advances, installments on orders Accounts receivable: Short-term portion (Note 9) Unpaid, called capital Other receivables: Short-term portion (Note 10) Cash equivalents Cash Prepaid expenses CURRENT ASSETS GRAND TOTAL Note Reclassification 12/31/ Reclassification starting in 2006 of the "Commercial goodwill" item as "Goodwill on acquisition": Items identified as inseparable from goodwill on acquisition with an indefinite useful life Cegedim Reference Document 2007

88 LIABILITIES BALANCE SHEET - CONSOLIDATED FINANCIAL STATEMENTS In thousands of euros 12/31/ /31/ /31/2005 Net Net Net Share capital Issue premium Group reserves Group translation reserves Group translation gains / losses GROUP EARNINGS Investment subsidies Regulated provisions EQUITY CAPITAL, GROUP SHARE Minority interests (reserves) Minority interests (earnings) MINORITY INTERESTS EQUITY CAPITAL Long-term financial liabilities (Note 14) Deferred tax liabilities (Note 17) Provisions (Note 12) Other non-current liabilities (Note 15) NON CURRENT LIABILITIES Short term financial liabilities (Note 14) Accounts payable Tax and benefits-related liabilities Provisions (Note 12) Other current liabilities (Note 15) CURRENT LIABILITIES GRAND TOTAL Cegedim Reference Document

89 INCOME STATEMENT - CONSOLIDATED FINANCIAL STATEMENTS In thousands of euros 12/31/ /31/ /31/2005 Net Net Net Sale of goods France Sale of goods outside France Production sold - goods France Production sold - goods outside France Production sold - services France Production sold - services outside France SALES Other operating income Capitalized production Purchases used External expenses (Note 16) Taxes Payroll costs Depreciation Allocations to and reversals of provisions Change in inventories of products in progress and finished products Other operating expenses OPERATING INCOME BEFORE NON-RECURRING ITEMS AND TAXES (1) Other operating income and expenses OPERATING INCOME Income from cash & cash equivalents Gross cost of financial debt NET COST OF FINANCIAL DEBT (Note 14) OTHER FINANCIAL INCOME AND EXPENSES Corporate tax Deferred taxes on profits TAX EXPENSE (Note 17) SHARE OF NET EARNINGS OF EQUITY METHOD COMPANIES NET EARNINGS BEFORE EARNINGS FROM ACTIVITIES THAT HAVE BEEN DISCONTINUED OR ARE BEING SOLD EARNINGS NET OF TAXES FROM ACTIVITIES THAT HAVE BEEN DISCONTINUED OR ARE BEING SOLD CONSOLIDATED NET INCOME GROUP SHARE Minority interests Number of shares excluding treasury stock EARNINGS PER SHARE in Euros (Note 20) Diluting instruments nil nil nil DILUTED EARNINGS PER SHARE in Euros (Note 21) Note Impact of disposals made on July 2, /31/ /31/2006 Operating income before non-recurring items Including group share of earnings on activities that have been sold (*) Operating income before non-recurring items excluding activities sold (*) The income from the activities sold mid-year are subject to significant seasonality Cegedim Reference Document 2007

90 TABLE OF CHANGES IN CONSOLIDATED SHAREHOLDERS EQUITY In thousands of euros Capital Reserves tied to capital Earnings Consolidate recorded d reserves directly as and earnings shareholder s equity Translation gains / losses Total Group share Minority interests TOTAL Balance as of 01/01/ Capital operations Operations on own shares Distribution of dividends (1) earnings Impact correction capitalization prior DT Impact correction depreciation Miscellaneous impacts Earnings recorded directly as shareholders equity Translation gains / losses Other changes Change in consolidation scope Balance as of 12/31/ Capital operations Operations on own shares Distribution of dividends (1) earnings Miscellaneous impacts 0 0 Earnings recorded directly as shareholders equity 0 0 Translation gains / losses Other changes Change in consolidation scope Balance as of 12/31/ (1) : The total amount of dividends is distributed for common shares. There are no other classes of shares. There were no issues, repurchases or redemptions of equity securities during 2006 or Cegedim Reference Document

91 STATEMENT OF CHANGES IN THE CONSOLIDATION SCOPE The changes in the Group's consolidation scope are as follows: Companies entering the consolidation scope % held for the fiscal year % held for the previous fiscal year Consolidation method for the fiscal year Consolidation method for the previous fiscal year Comments Cegedim India % F.C. Created in April 2007 Cegedim Malaysia SDN % F.C. Created in April 2007 Groupe Dendrite % F.C. Acquired in May 2007 Servilog Concept % F.C. Acquired in July ES % F.C. Acquired in September 2007 Companies leaving the consolidation scope % held for the fiscal year % held for the previous fiscal year Consolidation method for the fiscal year Consolidation method for the previous fiscal year Avt advanced Technologies % F.C. Jmb conseils % F.C. Eglantine informatique % F.C. Cetip encaissements % F.C. Comments Complete transfer of assets and liabilities to Soltim on 05/30/2007 Complete transfer of assets and liabilities to Cegedim S.R.H on 12/31/2007 Complete transfer of assets and liabilities to BKL Consultants on 12/31/2007 Complete transfer of assets and liabilities to Cetip on 12/31/2007 XWZ % F.C. Disposed of on July 2, 2007 Sdi % F.C. Disposed of on July 2, 2007 Medipost % F.C. Disposed of on July 2, 2007 Docubase systems % F.C. Disposed of on July 2, 2007 Docubase services % F.C. Disposed of on July 2, 2007 Docubase systems inc % F.C. Disposed of on July 2, 2007 Aspone.fr % F.C. Disposed of on July 2, 2007 Declaratis % F.C. Disposed of on July 2, 2007 Infosante limited % F.C. Liquidation in progress Infopharm services % F.C. Liquidation in progress Mka % F.C. Liquidation in progress Chemtec % F.C. Liquidation in progress Cegedim Reference Document 2007

92 CASH FLOWS STATEMENT FROM EARNINGS OF CONSOLIDATED COMPANIES Consolidation at 12/31/07 In thousands of euros Consolidated net earnings Share of earnings from equity method companies Depreciation and provisions Capital gains or losses on sales Cash flow after net financial debt expense and taxes Financial debt expenses Tax expense Operating cash flow before net financial debt expense and taxes Taxes paid Plus: change in working capital requirement for operations Net cash flows generated by business activities (A) Acquisitions of intangible assets Acquisitions of tangible assets Acquisitions of financial assets Disposals of tangible and intangible assets Disposals of financial assets Impact of changes in the consolidation scope Dividends received from equity method companies Net cash flows generated by capital investment transactions (B) Dividends paid to shareholders of the parent company Dividends paid to the minority interests of consolidated companies Capital increase in cash Loans floated Loans repaid Financial interest paid Net cash flows generated by financing transactions (C) CHANGE IN CASH POSITION (A+B+C) Opening cash position Closing cash position Impact of changes in foreign currency exchange rates Cegedim Reference Document

93 SEGMENT REPORTING At December 31, 2007 In thousands of euros Income Statement Items Primary Sectors Secondary Sectors CRM and strategic data Healthcare professionals Healthcare and insurance Technologies and services TOTAL TOTAL France TOTAL Rest of world SECTOR REVENUE A Outside Group sales (*) B Sales to other Group sectors C=A+B Total sector sales SECTOR EARNINGS D Operating income for the sector OPERATING MARGIN (as a %) D/A Operating margin outside Group 15.0% 13.5% 4.3% 7.7% 12.7% D/C Sector operating margin 14.1% 12.7% 4.1% 7.1% 11.9% SECTOR DEPRECIATION AND IMPAIRMENT (*) 2007 consolidated sales France Euro area Pound Rest of US Dollar Area excluding Sterling Area world Total Geographic breakdown % 49% 15% 10% 15% 11% 100% Balance Sheet Items Primary Sectors Secondary Sectors CRM and strategic data Healthcare professionals Healthcare and insurance Technologies and services TOTAL TOTAL France TOTAL Rest of world SECTOR ASSETS (in net values) Goodwill Intangible Assets Tangible Assets Net total CAPITAL INVESTMENTS FOR THE FISCAL YEAR (gross values) Goodwill Intangible Assets Tangible Assets Gross total SECTOR LIABILITIES Provisions Advances, installments rec'd on orders Accounts payable Tax and benefits-related liabilities Other liabilities Total Cegedim Reference Document 2007

94 At December 31, 2006 In thousands of euros Income Statement Items Primary Sectors Secondary Sectors CRM and strategic data Healthcare professionals Healthcare and insurance services Technologies and services TOTAL TOTAL France TOTAL Rest of world SECTOR REVENUE A Outside Group sales (*) B Sales to other Group sectors A+B Total sector sales SECTOR EARNINGS C Operating income for the sector OPERATING MARGIN (as a %) C/A Operating margin outside Group 16.0% 12.1% 8.1% 6.0% 12.2% C/B Sector operating margin 14.7% 11.3% 7.9% 5.5% 11.4% SECTOR DEPRECIATION AND IMPAIRMENT (*) 2006 consolidated sales France Euro area Pound excluding Sterling Area Rest of world Total Geographic breakdown % 64% 13% 13% 10% 100% Balance Sheet Items CRM and strategic data Primary Sectors Healthcare professionals Healthcare and insurance services Technologies and services TOTAL Secondary Sectors TOTAL France TOTAL Rest of world SECTOR ASSETS (in net values) Goodwill Intangible Assets Tangible Assets Net total CAPITAL INVESTMENTS FOR THE FISCAL YEAR (gross values) Goodwill Intangible Assets Tangible Assets Gross total SECTOR LIABILITIES Provisions Advances, installments rec'd on orders Accounts payable Tax and benefits-related liabilities Other liabilities Total Cegedim Reference Document

95 Notes to the Consolidated Financial Statements for the Cegedim Group Major Events during the 2007 Fiscal Year Acquisition of the Dendrite Group On May 9, 2007, the Cegedim Group announced the acquisition of Dendrite International Inc. according to the terms of the agreement signed March 2, The combination of the two companies will create a major world leader for supplying solutions to the pharmaceutical industry in the fields of sales and marketing as well as associated research. The groups are complementary both with respect to the range of products and solutions offered and from a geographic standpoint, since Cegedim is well established in Europe and Dendrite in the United States and in the Asia-Pacific area. The new group will be able to meet the worldwide needs of its customers and provide a diversified range of high value-added integrated solutions (see also note 2). Disposal of activities to the Tessi Group On July 2, 2007, Cegedim Group and Tessi signed a contract finalizing the acquisition by Tessi of the Marketing Services Activities (SDI, Médipost and XWZ32MP), GEIDE Activities - Electronic Information and Document Management for Businesses (Docubase Systems, Docubase Services and Docubase Systems Inc.), Remote Declaration Filing Portal Activities (AspOne.fr and Déclaratis), Data Acquisition and Capture Activities (Atelier Pré Saint-Gervais) and XWZ32, a holding created for operational needs. This opportunity enabled Cegedim to transfer these activities to a partner whose competence is recognized while still working with Tessi through service agreements ensuring the continuation of processing and the sharing of experience. In its "Technologies and Services" division, Cegedim is refocusing its marketing skills on the management of databases with its CCD activity (Cegedim Direct Communication) whose vocation is to design, manage and market commercial and marketing databases. CCD supplies updated and enriched data from multiple sources to businesses who wish to communicate with the professional world. Deconsolidation of the Cegelease Debt Cegelease is a French subsidiary of Cegedim that provides financial leasing solutions for pharmacies, primarily for their computer equipment. This activity significantly increases the Cegedim Group's financial debts, but with a risk level that is very low because of the solid solvability profiles of the pharmacist customers. Through a Balance Sheet transaction carried out on April 30, 2007, it was decided to deconsolidate this debt. Cegelease assigned without recourse the major portion of its receivables to the Natixis Company for a cash contribution of 71 million euros (see Note 27). Other Major Events in 2007 The Cegedim Group is also continuing to develop its databases and its services for the pharmaceutical industry with the creation of subsidiaries in India and Malaysia (marketing studies) and the acquisition of the 3ES Company in France. The "Pharmacists software" activity is also pursuing its development with the acquisition of the French Servilog Company Cegedim Reference Document 2007

96 Accounting Principles IFRS Accounting Standards Pursuant to European regulation No. 1606/2002 of July 19, 2002, the consolidated financial statements of the Cegedim Group were prepared as at December 31, 2007, in accordance with the international accounting standards adopted in the European Union. The international accounting standards include the IFRS ("International Financial Reporting Standards"), the IAS ("International Accounting Standards") and their mandatory application interpretations on the closing date. The consolidated financial statements were drawn up by the Board of Directors of Cegedim SA during their meeting held on March 21, 2008, and will be submitted to the General Meeting for approval. Revisions of standards, new standards and interpretations applicable in 2007 New standards, interpretations and amendments of existing standards were adopted by the European Union and are under mandatory application starting with January 1st, The new standards, amendments and interpretations which apply to the Group are: IAS 1 Presentation of Financial Statements IFRS 7 Financial Instruments IFRIC 7 Applying the Restatement Approach under IAS 29 IFRIC 8 Scope of IFRS 2 IFRIC 9 Reassessment of Embedded Derivatives IFRIC 10 Interim Financial Reporting and Impairment (depreciation). Valuation bases The financial statements are prepared according to the historic cost principle, except for derivative instruments and financial assets available for sale, which are valued at their fair value. Financial liabilities are valued according to the amortized cost principle. The book values of hedged assets and liabilities and their hedge instruments are valued at the fair value. Use of estimates and assumptions In order to prepare the financial statements, the management of the Group or the subsidiaries must make estimates and use certain assumptions that impact the value of the assets and liabilities, the valuation of positive and negative contingencies on the closing date, as well as income and expenses for the fiscal year. Due to the uncertainties inherent in any valuation process, the Group revises its estimates based on regularly updated information. It is possible that the future results of the operations concerned will differ from these estimates. The assumptions and estimates primarily concern: The valuation of the recoverable value of assets (assumptions described in the "impairment of assets" and in note 7); The valuation of retirement obligations (assumptions described in note 13). Cegedim Reference Document

97 Basis of Consolidation Subsidiaries and equity investments are included in the consolidation scope on the date on which control is effectively transferred to the Group, while subsidiaries and equity investments sold are excluded from the consolidation scope on the date on which control is lost. Subsidiaries over which the Group exercises exclusive control are consolidated using the full consolidation method, even if the percentage held is less than 50%. Exclusive control is presumed if the parent company directly or indirectly holds the power to dictate the financial and operational policies of a company so as to benefit from its activities. The full consolidation method used is the one by which the assets, liabilities, income and expenses are fully consolidated. The share in net assets and net profit attributable to the minority shareholders is presented separately as minority interests in the consolidated balance sheet and the consolidated income statement. Equity investments over which the Group exercises joint control with a limited number of other shareholders such as joint ventures are consolidated using the proportional consolidation method. Equity investments over which the Group exercises significant influence are consolidated using the equity method. Significant influence is presumed if the Group holds a percentage of voting rights greater than or equal to 20%. According to this method, the Group records the share of the net earnings of the companies consolidated using the equity method on a specific line of the consolidated income statement. The list of consolidated entities is given in note 1. Some companies, insignificant from the Group s perspective, are not consolidated. Company Mergers Business combinations are accounted for using the purchase method in accordance with the provisions of standard IFRS 3 - Business combinations. The assets, liabilities and contingent liabilities of the entity acquired are accounted for at their fair value at the end of a valuation period, which may cover 12 months following the date of acquisition. The difference between the acquisition cost and the Group s share in the fair value of the assets and liabilities on the date of acquisition is recorded as goodwill on acquisition subject to any allocations to identifiable assets and liabilities items. In general, the acquisitions made by the Group correspond to acquisitions of market shares leading to limited allocations of acquisition on goodwill. If the acquisition cost is less than the fair value of the identified assets and liabilities acquired, the difference is immediately recognized as income. Goodwill on acquisition is recorded in the functional currency of the entity acquired. Standard IAS 21 ( 47) requires that goodwill on acquisition in foreign currencies be accounted for at the closing rate and not at the historic cost on each accounting closing date. Goodwill on acquisition is not depreciated and is subject, in accordance with revised standard IAS 36, to impairment testing when an impairment indicator is identified and at least once a year (see "Impairment of assets"). If necessary, impairments are recorded as Other operating income and expenses Cegedim Reference Document 2007

98 Intangible Assets Intangible assets acquired separately or in connection with a business combination Intangible assets acquired separately (primarily software) are recorded on the balance sheet at their historic cost. They are then valued at the amortized cost according to the prescribed treatment of standard IAS 38 - Intangible assets. Intangible assets acquired in connection with business combinations (primarily commercial goodwill) are recorded in the balance sheet at their fair value. Their value is monitored regularly to ensure that no impairment must be recognized. With the exception of commercial goodwill, intangible assets are depreciated using the straight-line method over their economic service life. The value of depreciated intangible assets is tested if an impairment indicator is identified. Impairment resulting from valuation testing is recorded, if necessary, as Other operating income and expenses. Commercial goodwill - Goodwill on acquisition Commercial goodwill acquired in connection with business combinations for which the length of consumption of the future economic benefits cannot be determined are not depreciated. On the other hand, in accordance with revised standard IAS 36, they are subjected to impairment testing if an impairment indicator is identified and at least once a year (see Impairment of assets ). If the current value of commercial goodwill is less than the net book value, the difference in value is recorded on the income statement. The current value is estimated based on the present and future profitability of the activity concerned. Research and development expenses Research expenses are recorded as expenses for the fiscal year during which they were incurred. Development expenses for new internal projects are capitalized if the following criteria are fully satisfied in accordance with standard IAS 38: The project is clearly identified and the related costs are separable and tracked reliably The technical feasibility of the project has been demonstrated, and the Group has the intention and the financial capacity to complete the project and use or sell the products resulting from this project It is probable that the developed project will generate future economic benefits that will flow to the Group. If the criteria are not satisfied, development expenses are recorded as expenses for the fiscal year during which they were incurred. Depreciation is taken once the underlying asset is placed into service and is calculated on the basis of the foreseeable useful life of this asset. At the time of its startup, an asset whose development is finished is removed from development expenses and is recognized in the corresponding asset item (generally to software). Brands Brands are associated with the company's service life and therefore are not depreciated because they will contribute future economic advantages. The brands' longevity is indivisible from the Group's core activity and therefore it is considered to have an indefinite service life. Cegedim Reference Document

99 Acquired assets Acquired intangible assets are valued at their acquisition cost and depreciated according to the straight-line method over their economic service life. The main depreciation periods used are as follows: Concessions Between 5 and 20 years Straight-line method Software Between 1 and 15 years Straight-line method Tangible Assets Tangible assets consist primarily of computer hardware and industrial equipment and are recorded at their purchase cost less accumulated depreciation and impairment losses, according to the treatment prescribed in standard IAS 16 - Tangible assets. Depreciation is calculated based on the economic service life, the depreciable basis used being the purchase cost less any estimated residual value. The depreciation method used is the straight-line method. The depreciation periods used are generally as follows: Computer equipment Microcomputers intended for office use: Server systems Industrial equipment Printing equipment Industrial material and tooling Fixtures and fittings Transportation equipment Office equipment Moveable property Between 3 and 4 years Between 5 and 10 years Between 8 and 10 years Between 5 and 8 years 8 years 4 years 4 years 8 years Additionally, standard IAS 16 prescribes the separate component approach for assets that can be broken down into elements that each has different uses or offers economic benefits at a different rate. In the Cegedim Group, this involves buildings consisting of administrative offices and industrial facilities (shop, warehouse, storage area, etc.) for which separate depreciation plans have been established based on the useful life of the different components (shell, facades and waterproofing, general and technical facilities, fixtures). The useful lives of tangible assets are reviewed periodically and may be modified prospectively depending on the circumstances. Tangible assets are subject to impairment testing if an impairment indicator is identified. If necessary, additional impairment is recorded on the income statement as Other operating income and expenses Cegedim Reference Document 2007

100 Financial leases Assets used for lease agreements are capitalized at their fair value and offset by a financial debt if these lease agreements effectively transfer to the Group virtually all the risks and benefits inherent in ownership of this property. Rent payments are broken down into financial expense (recorded as Net cost of the financial debt ) and debt retirement. Assets covered through financial leases are depreciated over the same periods as property of the same purchased assets category. Depreciation of assets In accordance with standard IAS 36 - Impairment of assets, the Group determines the recoverable amount of its long-term assets using the following method: The impairment indicators used are: For intangible assets that are depreciated (software, databases): even though these intangible assets are depreciated, they are individually monitored for their profitability as well as their productivity and their usefulness. Consequently, in the absence of future cash flows, a provision for depreciation is recognized. For intangible assets that are not depreciated (brands, goodwill on acquisition): in compliance with the IAS 36 standard, impairment tests are carried out once a year at the fiscal year end date, in order to evaluate any possible impairment. For each CGU, we make business plan forecasts for 4 years. Based on these business plans, we use the DCF method (Discounted Cash Flow). This method of future cash flows consists in calculating, by discounting, the net present value of future cash flows expected from a CGU. The discount rate used (WACC) is the subject of a calculation that is updated once per year. The infinite growth rate used is determined according to inflation (1.5% for the two previous years). Also, a sensitivity test is carried out by varying the assumptions used for the WACC and for the infinite growth rate by +/- 0.5 base point. Generally, these indicators depend specifically on the change in sales revenue and the operating margin before non-recurring items. Other qualitative indicators can be added, such as a change in legislation that would slow down or jeopardize the continuation or development perspectives for certain activities. For all CGUs, even by using the most conservative assumptions (reduced infinite growth rate and increased WACC), the discounting of future flows remains higher than the value of the goodwill on acquisition. The determination of the WACC was carried out by an independent firm of experts. The WACC is the Group s weighted average cost of capital after taxes. It is weighted as a function of the respective market values of the Group s net financial debt and equity capital. The cost of capital corresponds to the risk-free rate plus a risk premium and a beta, determined based on the market parameters applicable to CEGEDIM. The cost of debt after taxes is calculated based on the average cost of debt in 2007 and a normal tax rate. At December 31, 2007, the WACC was 8.5% compared to 6.7% at December 31, This change reflects the modification in the Group's liability structure. If necessary, impairment losses resulting from impairment tests are recorded as Other operating income and expenses. Impairment tests are performed at the level of the Cash Generating Units (CGUs) to which these assets may be allocated. The CGU is the smallest group of assets that includes the asset tested and that generates cash inflows that are largely independent of the cash inflows generated by other assets or groups of assets. CGUs generally correspond to a set of entities contributing to the same sector of activity (nature of the services) and using the same tools. CGUs follow the divisions of the Group s main sectors of activity, which further divided themselves into separate industry components if they are relevant to the direction of the cash flows. In some cases the geographic Cegedim Reference Document

101 component takes precedence over the industry component due to synergies established in the countries or in certain regions thus leading to the definition of geographic CGUs. The following CGUs have been defined: CRM and Strategic Data of Cegedim, which combine predominately industry skills applied in a number of countries in the CRM and strategic data sector; Doctors software, Pharmacists software and Promotional activities in the Healthcare professionals sector; Insurance software and Healthcare flow management operator activities in the Healthcare insurance services sector; Financial leasing activities, the activities focused predominately on Technology, in the Technologies and services sector. Goodwill on acquisition is allocated the first time it is recognized. The allocation to the CGUs is consistent with the way in which the Group s management tracks operational performance and assesses the synergies tied to acquisitions. A loss in value is recorded if the recoverable amount of an asset or of a CGU is below its book value. If the CGU tested comprises goodwill on acquisition, the impairment is allocated to this goodwill first. If a loss in value were recognized in 2007, it would be accounted for in the financial statements and mentioned in the appended notes. Long-Term Investments Equity investments in non-consolidated companies are classified as securities available for sale. They are initially recorded at the purchase cost, and then subsequently valued at their fair value if this fair value can be determined reliably. Changes in fair value are accounted for in a separate item of equity capital until the securities are effectively sold, at which time the transaction is recognized in the Income Statement. Additionally, if an identified loss in value is considered durable in view of the circumstances, it is accounted for as financial profit/loss. Loans granted are accounted for at the amortized cost and are impaired if there is an objective indication they may be impaired. Long-term financial receivables are discounted if the effect of discounting is deemed significant. Deferred Taxes Deferred taxes are calculated using the variable tax rate method for all temporal differences between the book value entered in the consolidated financial statements and the tax basis of the Group s assets and liabilities. Deferred tax assets and liabilities are valued at the tax rate expected to be applied for the fiscal year during which the asset will be realized or the liability paid, based on the tax rates approved on the closing date. Deferred tax assets on deductible temporal differences and on unused tax losses carried forward are recognized to the extent that it is likely that future taxable profits will be offset by as yet unused tax losses. Deferred tax assets and liabilities are not discounted and are offset if they relate to a same tax entity and if they have identical reversal dates Cegedim Reference Document 2007

102 Inventories of Goods and Services in Progress Inventories of goods Inventories of goods are valued using the weighted average cost method. The gross value of goods purchased for resale and of supplies is made up of the purchase price plus incidental costs. Impairment is recorded if the book value is less than the inventory value (net realizable value). Services in progress The inventory value consists solely of the direct costs recorded on contracts being performed. An impairment is recorded when future billings for work in progress will not cover the corresponding direct costs. Trade Receivables and Other Operating Receivables An impairment is established when the inventory value is less than the recorded value based on the probability of recovery. Receivables are accounted for at their discounted amount if they are due and payable in more than one year and if the effects of discounting are significant. Cash and cash equivalents Cash equivalents are valued at their market value on the closing date. Differences in value are recorded as financial income. Treasury shares In accordance with standard IAS 32, treasury shares are accounted for at their purchase cost and are recorded against consolidated shareholders equity. Gains (losses) arising from sales of treasury shares are added to (deducted from) consolidated reserves at their amount net of tax effects. Sales of treasury shares are accounted for using the FIFO method. Provisions and Contingent Liabilities A provision is recorded if the Group has a probable obligation resulting from past events, whose extinguishment should correspond to an outflow without any, at least, equivalent compensation and whose amount can be reasonably measured. The provision is maintained as long as the due date and the amount of the outflow of resources have not been precisely determined. If the loss or the liability is not probable or cannot be measured reliably, but remains possible, the Group records a contingent liability in commitments. Provisions are estimated on a case by case basis or based on statistics and discounted when they are due in more than one year. The main provisions in the Cegedim Group (excluding retirement compensation) are intended to cover employee, client and supplier litigation. Cegedim Reference Document

103 Employee Benefits Defined contribution plans As part of defined contribution plans, that is to say, if the commitments are satisfied through contributions paid by the companies of the Group to outside agencies which pay out benefits or reimburse medical expenses, these contributions are recorded as expenses for the fiscal year during which they are owed, as no liabilities are retained on the balance sheet. Defined benefits plans These primarily involve retirement obligations. If these obligations are assumed directly by the companies of the Group, the corresponding actuarial liabilities are covered by a provision in the balance sheet; the change in this obligation is accounted for in the underlying earnings for the fiscal year, including the effect of financial discounting. Actuarial liabilities are calculated using the projected credit units method and are based on valuations specific to each country and to each company of the Group; these valuations include assumptions concerning wage increases, inflation, life expectancy, employee turnover and the profitability of dedicated investments. Changes tied to periodic modifications of the actuarial assumptions listed above related to the financial and overall economic situation or to demographic conditions are recognized immediately in the amount of the Group s obligation and are offset by consolidated earnings. Additionally, the impact on the valuation of the provision for retirement of changes to the collective bargaining agreements is spread over the residual length of the working life of employees. Finally, if this obligation is partially or completely covered by funds paid by the companies of the Group to financial agencies, the amounts of these dedicated investments are deducted from the liability on the balance sheet. Financial debt Share premiums and issue costs impact the value at the recognition of financial liabilities, and are included in the calculation of the EIR (Effective Interest Rate) in compliance with IAS Loans and other financial liabilities which carry interest are valuated according to the depreciated cost method using the effective rate for the loan. The costs are thus spread out over the loan's life cycle via the EIR. In the event of financial liabilities arising from financial leases, the financial liability recorded to offset the tangible asset is initially recorded at the fair value of the leased asset or, if this is lower, at the present value of the minimum lease payments. Derivatives The Group uses financial instruments to hedge its expose to changing interest rates. However, because of the complexity of financial instruments the Group did not apply hedge accounting. These derivatives are categorized as trading instruments and in compliance with IAS are valuated at fair value and recognized in the Income Statement Cegedim Reference Document 2007

104 Revenue Recognition Cegedim Group s revenues consist primarily of services and sales of software and in a small measure of hardware. Services The main categories of services and the methods of revenue recognition are as follows: Access to the Group s databases is generally realized by subscription with periodic billing (monthly or yearly); sales revenues are then recorded on a prorated basis according to elapsed time Standard and specific studies supplied by the Group are recorded when they are delivered to clients Data processing performed for clients is recorded when the service is provided Support services (assistance, maintenance, etc.) are covered by a contract (generally annual), calculated on a lump sum basis in relation to the costs and resources committed by the Group to provide these services. Income from these contracts is recorded on a prorated basis over the term of the contract and results in the recognition of deferred income. Software and hardware sales These sales are recorded at the time of delivery, concomitant with installation at the professional s site. Any discounts and rebates are subtracted from sales. Methods for Translating Items into Foreign Currencies Transactions in foreign currencies Transactions in foreign currencies are recorded using the exchange rate applicable on the date the transactions are recorded. On the closing date, accounts payable or receivable denominated in foreign currencies are converted into euros at the closing exchange rate. Translation differences for transactions in foreign currencies are recorded as financial income or expenses. These operations are very limited in number. Therefore, there is no specific management of the exchange risk. Financial statements of foreign entities The currency used to prepare consolidated financial statements is the Euro. The financial statements of foreign entities using a different functional currency are converted into euros using: The official closing rate for assets and liabilities The average rate for the fiscal year ended for items of the income statement and the cash flow statement The historic cost for shareholders equity. Translation gains or losses resulting from this treatment and those resulting from the translation of the shareholders equity of subsidiaries at the beginning of the fiscal year based on the closing rates are included as Group translation gains and losses under consolidated shareholders equity. Additionally, translation gains or losses involving intra-group current accounts that can be equated with capital have been recorded as Group translation gains or losses since fiscal year Finally the translation gains or losses corresponding to the subsidiaries of the Euro area were entered in Group translation reserves in consolidated shareholders equity. Cegedim Reference Document

105 Statement of cash flows The consolidated cash flow statement is prepared using the indirect method: this method presents the reconciliation of net earnings with the net cash flow generated by the operations during the fiscal year. The opening and closing cash positions include the cash and cash equivalents made up of investment instruments, less overdrafts and outstanding bank loans. Segment reporting Level-one segment reporting is based on the division of the Group s activities into four business sectors: "CRM and strategic data", combining all the activities dedicated to pharmaceutical companies "Healthcare professionals", combining professional software publishing for doctors, pharmacists and the paramedical professions, as well as promotional activities geared toward these same professionals "Healthcare insurance services" combining the publication of software packages for mutual and health insurance companies, as well as healthcare flow management activities "Technologies and services" combining the activities based on expanding the Group s know-how, initially developed to support the healthcare activities. The level-one breakdown corresponds to the organization of the Group s internal reporting, which leads to the development of the management tools used by the Group s management. It is also the axis for financial communication. Level-two segment reporting uses a geographic breakdown. The activities carried out in France remain dominant (49% of consolidated revenues). The level-two breakdown thus shows the France / outside France dichotomy. This analysis is refined for consolidated turnover in order to show the Group s exposure to different currencies, when such information is significant (more than 10% of the consolidated total). The other segment reporting items are not differentiated by geographic area, because the significance threshold of 10% is generally not reached, or because these precisions would reveal confidential information. Intra-Group transfer prices are relative to standard agreements signed under normal terms. Risk management Market risks 64% of the Group s activities are carried out by subsidiaries located in the Euro area, which means that Cegedim s exposure to an exchange risk is relatively limited. The currencies representing a significant percentage of consolidated revenues are the pound sterling (10% of revenues) and the dollar (around 15%). There is no particular hedge preventing fluctuations in these currencies compared to the Euro, which could expose the Group to a more or less significant exchange rate risk depending on the years. Moreover, the Group contracted a $200 million loan for which there is no euro/dollar hedge. The amount of the loans exposed to an interest rate risk amounts to 140,000 K (revolver credit Euribor 3-month rate). The subordinated loan for 50,000 K to Financière Cegedim does not benefit either from interest rate hedging. All the other loans are hedged. The Group's non-operational cash risk is caused mainly by the due date of its bank loans giving rise to the payment of interest and the payment flows on financial instruments as well as on other debts not giving rise to the payment of interest. The Group s clients in the "Healthcare and strategic data" division (88% of consolidated sales) are essentially pharmaceutical companies, doctors, pharmacists and health insurance companies. They do not represent any significant counterparty risk. The activities acquired from the Dendrite Group fully belong to this division and it was not possible to produce an aged trial balance for the Dendrite scope Cegedim Reference Document 2007

106 Borrowing is monitored centrally. Only the parent company hedges borrowing with a swap when necessary. Legal risk Although the healthcare sector is highly regulated, as a service provider, the Cegedim Group is not subject to special regulations aside from the routine declarations made to the CNIL (or its local equivalents), relative to all of the files and databases it owns or manages. The confidentiality constraints imposed on the Group are directly related to these declarations. There are no ties or dependencies with other companies whose threshold is significant enough to have an appreciable impact on Cegedim. The assets necessary for operations are held by the Cegedim Group. There are no special tax provisions applicable to the Group. To the Company s knowledge, there are no litigations that have not been covered by provisions in the financial statements likely to have or that have recently had a significant impact on the financial position, the earnings, the activity and the assets of the Company or the Group. Industrial and environmental risks Given their essentially immaterial nature (software, databases, and intellectual services) the activities of the Cegedim Group have no significant environmental impacts. Operating in the sector of technologies and services tied to information and databases, the Cegedim Group s priority is to satisfy its clients and partners concerning systems and data security. The Chairman s report on internal control, appended hereto, details the information system security measures implemented in the Cegedim Group The industrial risks are also covered by adequate insurance policies. Cegedim Reference Document

107 Additional Notes and Tables NOTE 1: LIST OF CONSOLIDATED ENTITIES List of consolidated French entities: Companies Main place of business SIREN # % control % interest Method Fully consolidated companies (France) CEGEDIM , rue d Aguesseau BOULOGNE % % FC 3ES (Essais cliniques Evaluation route de la reine Epidemiologies Statistiques) BOULOGNE % % FC AGDF CEGEDIM RS Parc d'activité Cadera - Av.d'ariane MERIGNAC % % FC ALLIANCE SOFTWARE Le Crystal Palace -369/371 Promenade des Anglais NICE % % FC ALLIADIS 3, impasse des Chênes NIORT % % FC AMIX Le Gros Moulin MONTARGIS % % FC APSYS NET 137 rue d Aguesseau BOULOGNE % % FC BKL CONSULTANTS 122, rue d Aguesseau BOULOGNE % % FC CAM France route de la reine BOULOGNE % % FC C B U 573, av. d Antibes MONTARGIS % % FC C D S 137, rue d'aguesseau BOULOGNE % % FC CEGEDIM ACTIV (ex SOLTIM) Imm.le Pyrénéen-ZAC de la Grande Borde LABEGE % 97.04% FC CEGEDIM HOLDING CIS 137, rue d Aguesseau BOULOGNE % % FC CEGEDIM INGENIERIE 326, rue du Gros Moulin MONTARGIS % 98.99% FC CEGEDIM S.R.H. 17, rue de l Ancienne Mairie BOULOGNE % % FC CEGELEASE Rue de la Zamin CAPINGHEM % % FC CEGERS 137, rue d'aguesseau BOULOGNE % 50.00% FC CETIP 122, rue d Aguesseau BOULOGNE % 99.81% FC DATA CONSEIL 52, Jean Jacques Rousseau NANTERRE % % FC DECISION RESEARCH EUROPE90-92 route de la reine BOULOGNE % % FC DENDRITE 1, place Charles de Gaulle MONTIGNY LE % 99.98% FC EUROFARMAT 54, rue Jacquemars Giélée LILLE % % FC HOSPITALIS 137, rue d'aguesseau BOULOGNE % % FC ICOMED 137, rue d'aguesseau BOULOGNE % % FC INCAMS 95, rue de Billancourt BOULOGNE % 97.04% FC I SANTE 137, rue d'aguesseau BOULOGNE % % FC MEDEXACT 137, rue d Aguesseau BOULOGNE % % FC MIDIWAY Miniparc bât 1 Innopole voie 2 LABEGE INNOPOLE % 69.43% FC MONTARGEST Rue des Fleurs MONTARGIS % % FC PCO CEGEDIM 15, rue Paul Dautier VELIZY % % FC PHARMAPOST 573, av. d Antibes MONTARGIS % % FC PHARMASTOCK 326, rue du Gros Moulin MONTARGIS % % FC PROVAL NTIC 137, rue d'aguesseau BOULOGNE % 99.35% FC PROVAL SA 137, rue d'aguesseau BOULOGNE % 99.36% FC QUALIPHARMA Rue de la Zamin CAPINGHEM % % FC RESIP 56, rue Ferdinand Buisson BOULOGNE s/mer % % FC ROSENWALD , rue d'aguesseau BOULOGNE % 99.84% FC RM INGENIERIE av de la gineste RODEZ % % FC RNP 15 rue de l'ancienne mairie BOULOGNE % % FC SCI MONTARGIS , av. d Antibes MONTARGIS % 68.83% FC SELECTIS CONSULTING 95, rue de Billancourt BOULOGNE % 97.04% FC SERVILOG CONCEPT Plan les Delphines - CD ST GELY DU St Clément de Rivière FESC % % FC SOFILOCA 137, rue d Aguesseau BOULOGNE % % FC TRIDOM 116, rue d'aguesseau BOULOGNE % 91.45% FC Proportionally consolidated companies (France) THALES CEGEDIM 4, rue Léon Jost PARIS % 50.00% PC Companies consolidated using the equity method (France) EDIPHARM 137, rue d Aguesseau BOULOGNE % 20.00% EM HOSTA 6, rue Emile Raynaud PARIS % 37.24% EM INFODISK Centre d''aff. Béterbat- V. Lamon & Stade de Place d'armes LE LAMENTIN % 34.00% EM Cegedim Reference Document 2007

108 List of consolidated international entities: Companies Main place of business % control % interest Method Fully consolidated companies (International) ABACAM s.r.l ITALY MILAN % % FC ALLIADIS EUROPE LTD GREAT BRITAIN LONDON % % FC BKL CONSULTING GREAT BRITAIN LONDON % % FC BKL CONSULTING SRL ITALY MILAN % % FC BKL PHARMA CONSULTING BELGIUM BRUSSELS % % FC CAM CORP INTERNATIONAL MR INC CANADA MONTREAL % % FC CAMM EASTERN EUROPE POLAND WARSAW % % FC CAMM INTERNACIONAL SPAIN MADRID % % FC CAM PORTUGAL E.M Lda PORTUGAL LISBON % % FC CAM INTERNATIONAL UK GREAT BRITAIN LONDON % % FC CAMM KK JAPAN OSAKA % % FC CAMM AMERICA LATINA ARGENTINA ARGENTINA BUENOS AIRES % % FC CEGEDIM CIS CZECH SOCIALIST REPUBLIC PRAGUE % % FC CEGEDIM ALGERIE ALGERIA ALGIERS % % FC CEGEDIM Bilisim AS TURKEY ISTANBUL 65.00% 65.00% FC CEGEDIM GMBH AUSTRIA WIENER NEUDORF % % FC CEGEDIM BELGIUM BELGIUM BRUSSELS 99.97% 99.97% FC CEGEDIM DO BRASIL BRAZIL SAO PAOLO % % FC CEGEDIM CENTROAMERICA Y EL CARAIBE GUATEMALA GUATEMALA 95.00% 90.22% FC CEGEDIM COLOMBIA COLOMBIA BOGOTA % 94.97% FC CEGEDIM CZ SRO CZECH SOCIALIST REPUBLIC PRAGUE % % FC CEGEDIM DENMARK AS DENMARK GLOSTRUP % 99.97% FC CEGEDIM DEUTSCHLAND GMBH GERMANY BENSHEIM % % FC CEGEDIM ECUADOR EQUADOR QUITO 95.00% 94.97% FC CEGEDIM FINLAND FINLAND ESPOO % % FC CEGEDIM HOLDING GMBH GERMANY BENSHEIM % % FC CEGEDIM HELLAS GREECE ATHENS 99.89% 99.98% FC CEGEDIM HISPANIA SPAIN BARCELONA 97.33% 97.33% FC CEGEDIM KFT HUNGARY BUDAPEST % % FC CEGEDI INDIA PRIVATE LIMITED INDIA MUMBAI % % FC CEGEDIM ITALIA ITALY MILAN 99.99% 99.99% FC CEGEDIM LTD GREAT BRITAIN CHERTSEY SURREY % % FC CEGEDIM MALAYSIA SDN MALAYSIA KUALA LUMPUR % % FC CEGEDIM MAROC MOROCCO CASABLANCA % 97.04% FC CEGEDIM MEXICO MEXICO MEXICO 95.00% 94.97% FC CEGEDIM NETHERLAND BV NETHERLANDS HOUTEN % 99.97% FC CEGEDIM NORWAY AS NORWAY OSLO % 99.97% FC CEGEDIM ONEKEY INC USA ALLENTOWN % % FC CEGEDIM POLAND POLAND WARSAW % 99.97% FC CEGEDIM PORTUGAL PORTUGAL LISBON 98.50% 98.50% FC CEGEDIM ROMANIA SRL ROUMANIA BUCHAREST % % FC CEGEDIM RU RUSSIA MOSCOW % % FC CEGEDIM RX Ltd GREAT BRITAIN PRESTON % % FC CEGEDIM S.R.H. LTD GREAT BRITAIN LONDON % % FC CEGEDIM SK SRO SLOVAKIA BRATISLAVA % % FC CEGEDIM SOFTWARE INDIA PRIVATE LIMITED INDIA BENGALURU % % FC CEGEDIM SRH SWIZTERLAND GENEVA % % FC CEGEDIM STRATEGIC DATA AUSTRALIA Pty Ltd AUSTRALIA SYDNEY % % FC CEGEDIM STRATEGIC DATA GMBH GERMANY BENSHEIM % % FC CEGEDIM STRATEGIC DATA MEXICO MEXICO MEXICO % 95.02% FC CEGEDIM STRATEGIC DATA KOREA KOREA SEOUL % % FC CEGEDIM STRATEGIC DATA UK LIMITED (ex HEALTHCARE DATA SERVICES LTD) GREAT BRITAIN CHERTSEY SURREY % % FC CEGEDIM STRATEGIC DATA USA LLC (ex CAM CORP INTERNATIONAL) USA WILMINGTON % % FC CEGEDIM SWEDEN AB SWEDEN KISTA % 99.97% FC CEGEDIM TRENDS L.L.C EGYPT CAIRO 70.00% 70.00% FC CEGEDIM TUNISIE TUNISIE TUNIS 65.00% 65.00% FC CEGEDIM INC USA ALLENTOWN % % FC CEGEDIM WORLD INT.SERVICES LTD IRELAND DUBLIN % % FC COMPUFILE LTD GREAT BRITAIN CHERTSEY SURREY % % FC Cegedim Reference Document

109 Companies Main place of business % control % interest Method Fully consolidated companies (International) CROISSANCE 2006 BELGIUM FOREST % % FC DENDRITE ASIA PACIFIC PTE Ltd SINGAPORE SINGAPORE % % FC DENDRITE AUSTRALIA Pty Ltd AUSTRALIA PYMBLE % % FC DENDRITE BELGIUM BELGIUM DROGENBOS % % FC DENDRITE BRASIL BRAZIL SAO PAOLO % % FC DENDRITE Canada CANADA SCARBOROUGH % % FC DENDRITE COLOMBIA LTDA COLOMBIA BOGOTA % % FC DENDRITE DEUTSCHLAND GERMANY OTTOBRUNN % % FC DENDRITE EUROPE LIMITED GREAT BRITAIN LONDON % % FC DENDRITE HELLAS GREECE ATHENS % % FC DENDRITE INFORMATION CONSULTING (Shanghai) Co CHINA SHANGHAI % % FC DENDRITE INTERACTIVE MARKETING LLC USA NEW JERSEY % % FC DENDRITE INTERNATIONAL INC USA NEW JERSEY % % FC DENDRITE INTERNATIONAL SERVICES Company USA CHESAPEAKE % % FC DENDRITE ITALIA srl ITALY SESTO SAN % % FC GIOVANNI DENDRITE JAPAN LLC JAPAN CHUO-KU % % FC DENDRITE KOREA INC USA WILMINGTON % % FC DENDRITE MEXICO MEXICO MEXICO % % FC DENDRITE NETHERLAND BV NETHERLANDS NAARDEN % % FC DENDRITE NETHERLAND FINANCE BV NETHERLANDS NAARDEN % % FC DENDRITE NEW ZEALAND Ltd NEW ZEALAND AUCKLAND % % FC DENDRITE Portugal PORTUGAL CARNAXIDE % % FC DENDRITE Sp Zoo POLAND WARSAW % % FC DENDRITE SPAIN SPAIN MADRID % 97.33% FC DENDRITE TURKEY INC USA WILMINGTON % % FC EPIC DATA BASE RESEARCH COMPANY LTD GREAT BRITAIN LONDON % % FC ENIGMA HEALTH UK GREAT BRITAIN CHERTSEY SURREY % % FC GERS MAGHREB TUNISIE TUNIS % % FC HDMP BELGIUM BRUSSELS % 99.97% FC ICOMED BELGIUM BELGIUM BRUSSELS % 99.97% FC INFOPHARM LTD GREAT BRITAIN CHERTSEY SURREY % % FC IN PRACTICE SYSTEMS GREAT BRITAIN LONDON % % FC INPRATICE ENTREPRISE SOLUTION LTD GREAT BRITAIN LONDON % % FC INTERCAM LTD Irlande IRELAND DUBLIN % % FC INTERCAM LTD GREAT BRITAIN LONDON % % FC MEDICAL DATA MANAGEMENT LLC RUSSIA MOSCOW % % FC MEDIMED GMBH GERMANY BENSHEIM % % FC MS CENTROAMERICA Y EL CARIBE, SA COSTA RICA HEREDIA 95.00% 94.97% FC OEPO BELGIUM BRUSSELS % 99.97% FC TARGET SOFTWARE USA ALLENTOWN % % FC THIN GREAT BRITAIN LONDON % % FC SHANGHAI CAMM MARKETING RESEARCH Co. CHINA SHANGHAI % % FC SYNAVANT UK HOLDING GREAT BRITAIN LONDON % % FC STACKS CONSULTING E INGENIERA DE SOFTWARE SPAIN BARCELONA % % FC STACKS SERVICIOS TECNOLOGICOS S.L. SPAIN BARCELONA % % FC STACKS SERVICIOS TECNOLOGICOS S.L. CHILE CHILE LTDA SANTIAGO % % FC SCHWARZECK VERLAG GMBH GERMANY OTTOBRUNN % % FC UTO BRAIN LLC JAPAN CHUO-KU % % FC Companies consolidated using the equity method (International) MILLENNIUM ITALY FLORENCE 49.20% 49.20% EM Art & Strategie and Netfective Technologie are held at 20% or less and are not consolidated. NOTE 2: IMPACT OF CHANGES IN SCOPE Acquisition of DENDRITE International Inc. In May 2007, the Cegedim Group acquired Dendrite International Inc. and the company was consolidated for the first time in June This acquisition enabled the Group to significantly increase its size Cegedim Reference Document 2007

110 Cegedim's acquisition of Dendrite was carried out by purchasing 100% of the shares with a loan for 560 M to which was added 9 M in expenses directly resulting from the consolidation (audit, lawyers, consultants). In compliance with the IFRS 3 standard regarding business combinations and the IAS 38 standard regarding intangible assets, the Cegedim Group ensured that the assets and liabilities acquired as a result of the purchase of Dendrite are recognized at their fair value in the post acquisition Group's consolidated balance sheet. At June 30, 2007, the goodwill on acquisition amounted to 502 M. After allocating the Dendrite brand for 93 M, technology for 10 M generating a deferred tax liability impact of 42 M, the adjustment of certain provisions for restructuring costs as well as the adjustment of the capitalization of deferred tax assets, the goodwill on acquisition amounted to 380 M at December 31, The analyses of the deferred income tax according to future earnings permitted the refining of their capitalization. The amount of goodwill on acquisition remains provisional and will be established definitely for the establishment of the financial statements at June 30, The main balance sheet items acquired are fixed assets for 535 M, current assets for 117 M, payables for 98 M as well as 58 M in cash. Pro forma financial information The pro forma financial information presents the consolidated earnings for the Cegedim Group for 2007 as if the acquisition of Dendrite had been carried out on January 1st For the period from January 1st to May 8, 2007, Dendrite bore a certain number of non-recurring expenses directly resulting from the sale transaction (M&A consultant fees, legal fees, audits, restructuring expenses specifically related to termination benefits for management, etc.). These expenses were related to acquisition price items, in compliance with the method used on May 8, 2007 to determine the goodwill on acquisition. Dendrite's financial statements for January 1st to May 8, 2006 were restated as accounting entries on the opening balance on May 9, The asset items which were recreated and depreciable were depreciated for the period. Also, the interest expenses for the loan resulting from the Dendrite acquisition were restated for 12 months. PUBLISHED FINANCIAL Accounts DENDRITE FINANCIAL STATEMENTS STATEMENTS PRO-FORMA (In thousands of euros) 01/01/2007 to 05/08/ /31/ /31/2007 SALES ORDINARY OPERATING INCOME Other operating income and expenses (1) OPERATING INCOME Net financial debt costs EARNINGS BEFORE NON-RECURRING ITEMS (1) Including expenses incurred for the "Operating effectiveness" restructuring plan ( 2.5M), fees and miscellaneous non-recurring expenses spent by the Dendrite Board during the period ( 1.5 M), impact of the former stock options policy upon acquisition ( 0.3 M) and various other extraordinary corrections ( 0.6 M). Cegedim Reference Document

111 Impact of the changes in consolidation scope on the Balance Sheet at the closing date In thousands of euros Consolidated before the change at 12/31/07 Change Consolidated after the change at 12/31/07 Goodwill on acquisition 176, , ,195 Other extraordinary assets (excluding goodwill on 292,852 9, ,564 acquisition) Current assets 102, , ,954 Balance sheet total 571, ,861 1,249,713 Figures used were not the consolidation entry values but the figures from the financial statements at December 31, At the acquisition date, the impact of the companies entering the consolidation at the opening rates is: On assets 712,136 On payables 711,672 Impact of the changes in consolidation scope on the Income Statement at the closing date In thousands of euros Consolidated after the change at 12/31/2006 Consolidated before the change at 12/31/07 Change Consolidated after the change at 12/31/07 Sales 541, , , ,994 Operating income 66,199 69,664 20,221 89,885 Consolidated net income 38,918 46,673-2,522 44,151 Company Acquisition Financing The acquisitions of the 3ES and Servilog companies were completely financed with cash flow. The financing of the acquisition of Dendrite was carried out entirely through an outside loan contracted by the Cegedim Group. At the acquisition date, the impact of the companies entering the consolidation was: On assets 712,136 On payables 711, Cegedim Reference Document 2007

112 NOTE 3: INTANGIBLE FIXED ASSETS In thousands of euros Balance Opening Increase Decrease Change in Balance reclassification rate Change in 12/31/2006 and correction Acquisitions scope 12/31/2007 Development costs (1) (2) Internal concessions, patents (3) External concessions, patents Internal databases Internal software (1) (4) External software TOTAL GROSS VALUES Depreciation of internal concessions, patents Depreciation of external concessions, patents Depreciation of internal databases Depreciation of internal software Depreciation of external software TOTAL DEPRECIATION AND IMPAIRMENT NET VALUES (1) Reclassification of development costs as internal software following a startup for a net total of 942 K (2) Including development costs for Cegedim ( 6,608 K) and IES ( 3,043 K). (3) Dendrite Inc. (4) Including Soltim Aneto project 2,934 K. At December 31, 2007, the net intangible assets totaled 173,266 K compared to 41,776 at December 31, The net increase of 131,490 mainly comes from the addition of the Dendrite Group's brands. NOTE 4: TANGIBLE FIXED ASSETS In thousands of euros Change in Balance Opening Increase Decrease rate Balance reclassification Change in and correction 12/31/2006 Acquisitions scope 12/31/2007 Land (1) Buildings (1) Plant, machinery & equip. (1) Other tangible assets Construction work in progress Advances & payments/ acc. 0 0 TOTAL GROSS VALUES Depreciation of buildings Deprec. of plant, mach, equip Deprec.other tang. fixed assets TOTAL DEPRECIATION NET VALUES (1) Including financial leases (see note 19). Cegedim Reference Document

113 NOTE 5: NON-CURRENT FINANCIAL ASSETS In thousands of euros Balance Increase Decrease Change in Balance 31/12/2006 Acquisitions Change in rate 31/12/2007 Equity investments (1) Investments in EM companies Loans Cash collateral Other Long-Term Investments (2) 0 TOTAL GROSS VALUES Provisions for equity investments Provisions on loans TOTAL PROVISIONS TOTAL NET VALUES (1) Including Netfective in the amount of 899 K. (2) Dendrite transaction NOTE 6: EQUITY SHARES ACCOUNTED FOR USING THE EQUITY METHOD In thousands of euros Value of shares in companies accounted for by the equity method Group's share of profits (losses) Net financial situation Value of Securities Sales % interests % control Earnings Edipharm 20.00% 20.00% ,625 Hosta 37.81% 38.38% -1, ,054 2,153 14,182 Infodisk 34.00% 34.00% ,185 Millennium 49.20% 49.20% ,172 8,600 5, Change in shares in companies accounted for by the equity method The change in equity shares accounted for using the equity method can be analyzed as follows: Interests accounted for using the equity method on January 1 st, ,018 Change in consolidation scope -1,286 Earnings 12/ Equity shares accounted for using the equity method on December 31, ,500 Presentation of asset / liabilities items for equity method companies Assets Liabilities Non-current Current Total Shareholders Non current Current Total assets assets Assets Equity liabilities liabilities Liabilities Edipharm Hosta Infodisk Millennium Cegedim Reference Document 2007

114 NOTE 7: GOODWILL ON ACQUISITION In thousands of euros The first time a controlled company is consolidated, the entry value of the identifiable items of its assets and liabilities is determined using the methods described in chapter 1 - Accounting principles. An impairment test is carried out at least once a year and as soon as an impairment indicator is identified. Flow discounting carried out during these tests is done at a rate corresponding to the group s weighted average costs of capital (WACC) on the valuation date (8.5% on December 31, 2007 compared to 6.7% on December 31, 2006). The sensitivity of the impairment tests is measured by varying the assumptions used for the WACC and for the infinite growth rate by +/- 0.5 base point. For all CGUs, even by using the most conservative assumptions (reduced infinite growth rate and increased WACC), the discounting of future flows remains much higher than the value of the goodwill. A depreciation of 2,791 K was recorded during the fiscal year because of the absence of a favorable outlook for Infopharm Limited. Segment Presentation of CGUs Balance 12/31/2006 Scope Impair-ment Restatement Balance 12/31/2007 CRM and strategic data Healthcare professionals Healthcare and insurance services Technologies and services Total Goodwill on acquisition is subject to readjustment or allocation in the 12 months following the acquisition. The goodwill on acquisition which existed on December 31, 2006 was not adjusted during the 2007 fiscal year. NOTE 8: INVENTORIES AND WORK IN PROGRESS In thousands of euros Gross values as of 12/31/2007 Provision Net values as of 12/31/2007 Net values as of 12/31/2006 Services in progress Inventories of goods (1) TOTAL (1) Including 2007 depreciation: 168 K and 2007 reversals: 398 K. Cegedim Reference Document

115 NOTE 9: ACCOUNTS RECEIVABLE In thousands of euros CUSTOMERS Balance Balance Current Non-current 12/31/ /31/2006 French companies (1) Foreign companies TOTAL GROSS VALUES Provisions TOTAL NET VALUES (1) Receivables corresponding to financial leases granted by Cegelease and due for payment in more than one year. NOTE 10: OTHER RECEIVABLES In thousands of euros Corporate Tax Advances and Other Balance Balance receivables receivables installments receivables personnel 12/31/ /31/2006 Current receivables French companies Foreign companies TOTAL GROSS VALUES Provisions TOTAL CURRENT RECEIVABLES (net values) Non-current receivables French companies Foreign companies TOTAL GROSS VALUES Provisions TOTAL NON-CURRENT RECEIVABLES (net NOTE 11: DISTRIBUTION OF THE CAPITAL Considering the operations that occurred during the year, the closing situation for the fiscal year analyzed is as follows: Number of % Held # single votes # double votes Total % shares Shares Voice Votes Voting rights Financière Cegedim 6,221, % 29,000 6,192,044 12,384,088 12,413, % Alliance Healthcare France 933, % 0 933,145 1,866,290 1,866, % Jean-Claude Labrune 38, % 0 38,496 76,992 76, % GERS 36, % 0 36,788 73,576 73, % Public 2,101, % 2,091,586 10,387 20,774 2,112, % Total 9,331, % 2,120,586 7,210,860 14,421,720 16,542, % The par value of the shares is Cegedim Reference Document 2007

116 NOTE 12: CURRENT AND NON-CURRENT PROVISIONS In thousands of euros Provisions are determined on the basis of estimated future costs for the company. Balance 12/31/2006 Reclassification Change in consolidation Depreciation Additional provisions New provisions On provisions used Reversals On provisions not used Change in rate Balance 12/31/2007 Current provisions Provision for litigation with employees Other provisions (1) Other non-current provisions Provision for restructuring Provision for retirement TOTAL (1) Provisions for client risks, supplier risks. The amounts involved are insignificant if taken individually. NOTE 13: RETIREMENT LIABILITY In thousands of euros Through insurance funds Through a provision for expenses Retirement obligation covered 1,713 7,468 When employees retire, they receive retirement compensation as defined in the collective bargaining agreements. An actuarial valuation plan has been set up to fund the obligations resulting from this compensation. The total obligation comes to 9,552 K including 1,713 K paid to an insurance company. The actuarial assumptions used are as follows: Economic assumptions Net interest rate: 5.0% 4.5% 4.0% Expected asset yield rate: 4.5% 4.0% 4.25% Wage increases (including inflation): 2% 2% 1% Demographic assumptions Mortality: Table INSEE Mobility: 5.0% per year up to age % up to age % up to age 50 0% after 51 years old Retirement age Retirement at age Sensitivity of discount rate 4.5% 5.0% 5.5% Commitment 8,926 8,243 7,631 The Group s collective bargaining agreements are the following: National collective bargaining agreement for the publishing industry National collective bargaining agreement for road salesmen, representatives, ushers National collective bargaining agreement for the advertising industry Cegedim Reference Document

117 National collective bargaining agreement for the pharmaceutical industry National collective bargaining agreement for the stationary and bookstore industries Syntec national collective bargaining agreement. Comparison of Actuarial Commitments and Hedge Assets Actuarial commitments 6,476 8,555 10,001 9,552 Hedge Assets (1,536) (1,609) (1,806) (1,713) Unrecognized prior service cost (467) (435) (403) (371) Recognized liabilities 4,473 6,515 7,792 7,468 Change in the Cost of Services Rendered and in the Fair Value of Hedge Instruments In thousands of euros Hedged commitment Unhedged commitment 12/31/2007 Foreign companies Total Opening actuarial liabilities (1) Cost of services rendered during the fiscal year Financial cost for the fiscal year Unrecognized prior service cost Costs for the fiscal year (2) Benefits paid out (3) (139) (115) (96) (350) Actuarial Losses (gains) generated during the fiscal year for the obligation (4) (514) (399) (913) Newly consolidated companies (5) Companies no longer consolidated (6) (239) (881) (1 120) Closing actuarial liabilities Value of the hedge assets (A) = (1)+(2)+(3)+(4)+(5)-(6) Opening fair value of the hedge assets Expected return on assets Contributions - Benefits paid out - Actuarial Gains (Losses) for the fiscal year generated on assets 4 4 Newly consolidated companies - Companies no longer consolidated (171) Closing fair value of the hedge assets Cegedim Reference Document 2007

118 Amounts recognized in the balance sheet and income statement In thousands of euros 12/31/2007 Hedged commitment Unhedged commitment Foreign companies Total Cost of services rendered at the closing date Fair value of the hedge assets (1 713) (1 713) Unrecognized prior service cost (371) (371) Liabilities recognized on the Balance Sheet Cost of services rendered during the fiscal year Financial cost for the fiscal year Return on assets (74) (74) Recognized prior service cost- vested rights Effect of plan reduction or liquidation Expenses recognized in the Income Statement Change in Net Liabilities Recorded in the balance sheet In thousands of euros Hedged commitment Unhedged commitment 12/31/2007 Foreign companies Total Opening net liabilities Actuarial Losses (Gains) recognized for the fiscal year as a net position change (518) (399) - (917) Expenses recognized in the Income Statement Benefits paid out (139) (115) (96) (350) Contributions paid - - Newly consolidated companies Companies no longer consolidated (68) (881) - (949) Closing net liabilities NOTE 14: NET FINANCIAL DEBT In thousands of euros Financial Miscellaneous 12/31/ /31/2006 Long-term financial borrowing and debt (>5 years) Mid and long-term financial borrowing and debt (>1 year, < 5 years) Short-term financial borrowing and debt (<1 year) Bank loans and overdrafts Total financial liabilities (1) Total active cash Net financial debt (1) Including finance-lease for 533 K and employee equity plans for 9,182 K New loans contracted in 2007: Cegedim S.A. for 677,385 K. Cegedim Reference Document

119 Statement of change in net indebtedness In thousands of euros 12/31/ /31/2006 Net debt at the beginning of the fiscal year (A) Gross cash flow margin (1) Variation of working capital needs Net cash provided by operating activities 3= Changes resulting from investment transactions Net available cash flow 5= Incidence of change in the consolidation scope Dividends Cash capital increase 0 0 Other changes Total net change for the fiscal year (B) Net debt at the end of the fiscal year (A - B) (1) Operating cash flow after cost of net financial debt and tax 84,444 Deferred taxes 12,931 Operating cash flow 97,375 Bank loans have the following terms: In thousands of euros < 1 year Between 1 and 5 > 5 years years Fixed Rate month Euribor Rate - 424, ,656 3-month Libor USD Rate - 92,385 41,778 In accordance with IAS 39, changes in the fair value of hedge instruments are recorded in the income statement for the year 2007 (- 950 K). Main loans taken out are accompanied by terms involving the consolidated financial statements and related more particularly to net debt compared to the Group s operating cash flow or compared to shareholders' equity or compared to the consolidated gross operating margin (or the EBITDA). These ratios were satisfied at the closing. Cost of net financial debt In thousands of euros 12/31/07 12/31/06 Cash or equivalent income 20,164 3,158 Cost of gross financial debt (1) 47,793 9,946 Cost of net financial debt (2) -27,629-6,788 (1) Including in Cegedim 30,129 5,042 (2) The impact of the net translation gains or losses represents a net income of 8,008 K for Cegedim Reference Document 2007

120 Financing The financing of the acquisition of Dendrite was carried out entirely through an outside loan contracted by the Cegedim Group. Financing was implemented on May 9, 2007 to purchase Dendrite and to reconsolidate the existing debt. The financing is divided in the following way: In thousands of euros: 350,000 K: As an amortizable loan until ,000 K: As revolver credit facilities renewable every three months (amount used out of a total available line of 165,000 K) In thousands of dollars: $200,000 K: As an amortizable loan until 2013 $50,000 K: As revolver credit facilities renewable every three months. This loan was completely reimbursed on July 20, The loan for 350,000 K contracted at a variable rate was completely hedged by the implementation of a derivative rate instrument. From 05/09/2007 to 09/30/2008 = Cap at 4.10% for Euribor 3 months From 09/30/2008 to 09/30/2010 = Swap Rate set at 4.39% for Euribor 3 months From 09/30/2010 to 05/04/2013 = Cap at 4.69% for Euribor 3 months The loan for $200,000 K contracted at a variable rate was completely hedged by the implementation on September 21, 2007 of a variable rate swap receiver, 4.26% fixed rate payer for two years. The interest expense resulting from these loans amounts to 24,390 K for Liquidity Risk Contractual cash flows are not discounted. For variable rate instruments, the rate used for calculation is the spot rate on 12/31/2007. When there is a fixed rate, the rate is used to calculate the future interest drops. Cash flow In thousands of euros < 1 year Between 1 and 5 > 5 years years Bank loans 43, , ,823 Hedging instruments -2,430-2,126 0 Current bank loans 29, Finance lease Holdings 1,241 7, Miscellaneous including deposits & guarantees Financial Instruments Hypothesis: Variable rates 12/27/ month Euribor % 3-month Libor USD Rate % Cegedim Reference Document

121 Forecasted cash flow RATE and + TOTAL OPTIONS EUR Standard caps Premiums paid on standard Caps SWAPS MT EUR Swaps borrowers EUR Fixed paid Var. received TOTAL OPTIONS & SWAPS SWAPS In EUROS Fixed paid Var. received Rate hedging In thousands of euros STARTING DATE ENDING DATE NOTIONAL AMOUNT RATE PAID RATE REC'D VARIA- BLE RATE 2008 ANNUAL FLOW 2009 ANNUAL FLOW 2010 ANNUAL FLOW 2011 to 2013 ANNUAL FLOW LENGTH 09/28/ /30/ /30/ /30/ STARTING DATE ENDING DATE NOTIONAL AMOUNT RATE PAID RATE REC'D VARIA- BLE RATE 2008 ANNUAL FLOW 2009 ANNUAL FLOW 2010 ANNUAL FLOW 2011 to 2013 ANNUAL FLOW LENGTH 09/28/ /30/ LIBO3M$ /30/ /30/ EUR3M VALUE DATE MATURITY DATE NOTIONAL AMOUNT TITLE STRIKE VARIA- BLE RATE PREMIUM 2008 ANNUAL FLOW 2009 ANNUAL FLOW 2010 ANNUAL FLOW 2011 to 2013 ANNUAL FLOW LENGTH 05/09/ /30/ Standard cap /30/ /06/ Standard cap Cegedim Reference Document 2007

122 NOTE 15: OTHER LIABILITIES In thousands of euros CURRENT NON-CURRENT Balance Balance Balance Balance 12/31/ /31/ /31/ /31/2006 Advances and payments on account Clients - Credits to be made Expenses payable Miscellaneous payables Deferred income TOTAL NOTE 16: OUTSIDE EXPENSES In thousands of euros CURRENT NON-CURRENT 12/31/ /31/ /31/ /31/2006 Purchases of studies & services and purchases of unstocked goods Outside services (leasing, maintenance, insurance) Other: advertising, detached personnel, entertainment expenses, postal expenses TOTAL OUTSIDE EXPENSES NOTE 17: DEFERRED TAXES In thousands of euros Breakdown of Income Tax Expenses The tax expense recognized during the fiscal year amounts to 17,872 K compared to 20,316 K in The costs for the period break down as follows: TAX PAYABLE France Abroad TOTAL DEFERRED TAXES France Abroad TOTAL Total tax expense recognized to the Income Statement Cegedim SA is the parent company of a fiscal group comprised almost exclusively of French companies. Tax expenses are borne by the consolidated companies as if there were no tax consolidation. Cegedim Reference Document

123 The tax savings of unprofitable subsidiaries are recorded as an immediate gain in the parent company and amounted to 7,263 K for 2007 ( 2,085 K on 12/31/2006). The deficits of the companies included in the consolidation tax group flowed to the parent company. Companies likely to become profitable again at an undetermined future time would potentially generate an additional future tax charge estimated at 10,568 K on December 31, 2007 for Cegedim S.A. Other foreign fiscal groups were constituted when it was possible. Theoretical Tax Expense and Recognized Tax Expense The reconciliation between the theoretical tax expense for the Group and the tax expense effectively recognized is presented in the following table: Net income Group share of EM companies Income taxes Earnings before tax from consolidated companies (a) including French consolidated companies including foreign consolidated companies Normal tax rate in France (b) 34.45% 34.45% Theoretical tax expense ( c) = (a) x (b) Impact of income and expenses ultimately not deductible or not taxable Impact of differences in tax rates on profits Impact of differences in tax rates on capitalized losses Uncapitalized tax on losses Impact of reversal of previous capitalization 296 Impact tax credit Exit impact for companies sold Tax expenses recognized in the Income Statement Effective tax rate 28.71% 34.20% Cegedim Reference Document 2007

124 Recognized deferred tax assets and liabilities Analysis by category of the temporal difference for the net deferred tax position recognized in the balance sheet (before compensation by fiscal entities for deferred tax assets and liabilities) TOTAL 12/31/2006 Earnings Change in consolidation scope TOTAL 12/31/2007 DEFERRED TAX ASSETS Tax loss carryforwards and tax credits Pension Plan commitments Non deductible provisions Updating to fair value of financial instruments Cancellation of margin on inventory Cancellation of internal capital gain Restatement capital costs Other TOTAL DEFERRED TAX LIABILITIES Translation adjustments Cancellation of accelerated depreciation Cegelease gross capital gain Cancellation of depreciation on goodwill Finance lease R&D capitalization Updating to fair value of financial instruments Allocation DIL brands Other TOTAL NET DEFERRED TAXES Change in deferred taxes recognized in the consolidated Balance Sheet after compensation by fiscal entities for the deferred tax assets and liabilities can be proved in the following way: ASSETS LIABILITIES NET As of December 31, Impact on earnings for the period Impact on equity Impact of net presentation by fiscal entity As of December 31, The amount of uncapitalized tax at December 31, 2007 amounts to 9,240 K. Cegedim Reference Document

125 NOTE 18: LEASE COMMITMENTS In thousands of euros Financial Leases - Groupe Cegedim Lessor Financial leases involve the Cegelease Company who provides financing for pharmacies and doctors. Schedule of payments receivable and present value These leases are financial leases with terms of 24 to 60 months for computer equipment and 36 to 84 months for capital goods. In thousands of euros Minimum payments - Within one year Between one and 5 years More than 5 years 210 TOTAL (A) Financial income not acquired (B) Minimum payments (A) + (B) Present value of payments Operating Leases - Cegedim Group Lessee The Group lists different types of operating leases in the Group: Real estate Computer equipment Photocopiers Vehicle leases As for real estate leases, the leases are renewable every years. The Group signs standard leasing agreements. The discount rate used is 8.5%. Payment schedule and present value In thousands of euros Minimum payments - Within one year Between one and 5 years More than 5 years Present value of payments TOTAL Cegedim Reference Document 2007

126 NOTE 19: RESTATEMENT OF FINANCIAL LEASES In thousands of euros Commitments on Cegedim Lessee financial lease contracts Deprec. Gross value Accumulated Net book period depreciation value Property Buildings 15 to 40 yrs Machinery 5 years Vehicles 3 years Total assets held under financial leases Minimum payments - Within one year Between 1 and 5 years More than 5 years 0 TOTAL (A) 607 Financial expenses (B) 31 Present value of payments (A)-(B) 576 Present value of payments Lease payments are not indexed. The option exercise dates fall between 2008 and 2011 for virtually nil residual values. NOTE 20: EARNINGS PER SHARE Earnings per share are calculated by dividing the Group earnings by the number of shares making up the capital, excluding treasury stock (or 9,331,449 shares on December 31, 2007 and 9,290,266 shares on December 31, 2006). NOTE 21: DILUTED EARNINGS PER SHARE IAS 33 - Diluted earnings per share are calculated by dividing the net earnings for the fiscal year attributable to the ordinary shareholders (net earnings for the fiscal period after deducting preferred dividends) by the weighted average number of common shares outstanding during the fiscal year. On December 31, 2007, the diluted earnings per share were identical to the earnings per share due to the lack of instruments that would dilute the capital. NOTE 22: OFF-BALANCE SHEET COMMITMENTS All the earn-outs were recorded. Guarantees Given by Cegedim to Its Subsidiaries Pharmastock Subsidiary Joint and several surety of its subsidiary Pharmastock in favor of Baticentre concerning the performance of the terms of the leasing operation in the amount of 299 K (Board of Directors authorization dated August 13, 2002). Cegedim Reference Document

127 Cegelease Subsidiary Guarantee given in case Cegelease defaults on the lease with Guilaur Sarl (Board of Directors authorization dated September 3, 2003). Letter of comfort issued to the Ixis CIB Company for a flow exchange transaction concluded between itself and the Cegelease subsidiary (Board of Directors authorization dated April 20, 2007). Dendrite International Inc Subsidiary Security of $3.5 M in favor of the Bank of America (Board of Directors authorization dated December 27, 2007). All Subsidiaries Guarantee or security for a term of one year limited to 5 M (Board of Directors authorization dated 03/12/2007). Pledges Of Subsidiary Securities All pledged and secured securities for loans present on December 31, 2006 were lifted following the reimbursement of the loans. For the Dendrite acquisition financing transaction, the securities of the following companies were pledged: In Practice Systems, Alliadis Europe Ltd, Epic Database Research Company Ltd, Cegedim RX, Dendrite International Inc (DIL), Dendrite International Service Company (Disco), Target Software Inc, Cegedim USA Inc. for an amount of 520,591 K. Subsidiary Securities Pharmastock Subsidiary Security in favor of France Paquets in the amount of 200 K. Soltim Subsidiary Security in favor of the Caisse Nationale de Sécurité Sociale de Casablanca in the amount of 256 K. Security in favor of the CNOPS in the amount of 257 K. Security in favor of the ANAM in the amount of 240 K. Other securities have been granted by Cegedim and its subsidiaries for a total amount of 154 K. Dendrite Subsidiary Securities The off-balance sheet commitments involving Dendrite companies amount to 653 K. NOTE 23: TREASURY SHARES In 2002, Cegedim bought back 59,319 shares for a total amount of 3,435 K in accordance with the authorization given by the General Meeting held on April 23, ,587 of these shares were sold in During 2006, the company sold 9,549 shares, bringing the number of treasury shares held to 41,183. According to IAS 32, treasury shares are not recognized as assets and offset the Group s shareholders equity in the amount of 2,389 K on December 31, During 2007, the Company sold all of its treasury shares, which amounted to 41,183 shares. The shares sold net of expenses amounts to 3,422 K giving rise to a sale bonus before tax of 1,045 K Cegedim Reference Document 2007

128 NOTE 24: RELATED PARTIES In thousands of euros The object of the present note is to present the transactions that exist between the Group and its related parties. The main manager's compensations are stated in Note 25. Identity of Cegedim s parent company: Financière Cegedim. A public limited company (S.A.) held primarily by Mr. Jean-Claude Labrune Chairman and CEO of Cegedim S.A., his family and by certain members of the Board of Directors of Cegedim S.A. Figures connected with the related parties Certain transactions were carried out with companies who share a Cegedim S.A. Director. The main subsidiaries (companies consolidated with the fully consolidated method) are listed in Note 1. Only the significant transactions are described below: The Financière Cegedim reinvoices leases to Cegedim S.A. for an amount of 5,387 K as well as the taxes pertaining to them which amount to 400 K. The Financière Cegedim reinvoiced head office costs for 1,970 K. The Financière Cegedim granted a loan to Cegedim SA. The loan was for 50,000 K at December 31, 2007 compared to 20,000 K at December 31, The interest resulting from this loan amounted to 2,719 K. The Financière Cegedim acted as a guarantor for the securization contract between Cegelease and Ixis CIB for 2,033 K. Moreover, an insurance premium of 1,236 K was invoiced to Cegelease. (In thousands of euros) 12/31/ /31/ /31/ /31/ /31/ /31/2006 Companies under Companies under joint control or joint control or significant influence significant influence FINANCIERE CEGEDIM FINANCIERE CEGEDIM Family companies Family companies Products nil nil Expenses nil nil Loans nil nil Cash collateral nil nil Receivables nil nil Provisions for receivables nil nil nil nil nil nil Liabilities nil nil Commitments given nil nil nil nil nil nil Commitments received nil nil nil nil nil Cegedim Reference Document

129 NOTE 25: MANAGEMENT COMPENSATION In thousands of euros Directors fees paid to Directors came to 54 K on December 31, 2007, and are recorded in the "Other outside purchases and expenses" item of the income statement. 12/31/2007 Total Gross Amount 12/31/2006 Total Gross Amount Short-term benefits (wages, bonuses, etc.) 1,434 1,137 (1) Post-employment benefits nil nil Severance pay nil nil Benefits recognized 1,434 1,137 Termination benefits nil nil Benefits not recognized nil nil (1) The 2006 amount was modified to be expressed as the gross amount. The short term benefits include the variable and fixed portions of the manager's compensation. NOTE 26: EMPLOYEES 12/31/ /31/2006 France 2,948 3,107 International 5,084 1,861 TOTAL 8,032 4,968 Personnel costs for 2007 amounted to 352,367 K. NOTE 27: ASSIGNMENT OF RECEIVABLES The Cegelease Company concluded a flow exchange transaction with the Natixis company, according to whose terms Natixis must pay forecasted amounts for lease receivables to Cegelease, and Cegelease must pay the actual amounts for these same receivables to Natixis. For this transaction, and as a guarantee of its payment obligations, Cegelease committed to transfer ownership of certain receivables resulting from its goods leasing activity to Natixis. NOTE 28: EVENTS OCCURRING AFTER THE CLOSING DATE Cegedim Activ, number one on the French market for software and services dedicated to Personal Insurance, subsidiary of Cegedim SA, acquired Protectia, publisher of the "Protectia" health software package. This transaction was signed on January 16, The activities acquired represent annual sales of about 4 million euros. The acquisition price, financed by net worth is covered by a confidentiality agreement Cegedim Reference Document 2007

130 NOTE 29: DIVIDENDS A dividend of 0.80 euros per share for the 2006 fiscal year was approved and paid during the fiscal year in compliance with the decision taken during the Ordinary General Shareholders' Meeting held on April 27, 2007 for a net amount of 7,432 K Cegedim Reference Document

131 Auditors General Report on the consolidated financial statements Ladies and Gentlemen, In compliance with the mandate entrusted to us by your shareholders' annual general meeting, we have audited the accompanying consolidated financial statements for Cegedim for the year ended December 31, These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial statements based on our audit I - Opinion on the consolidated financial statements We have conducted our audit in accordance with the professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements for the fiscal year prepared in accordance with IFRS standards as adopted in the European Union fairly present, in all material respects, the assets, the financial position and earnings of the entity made up of the persons and entities included in the scope of consolidation. II - Justification of our assessments Pursuant to the provisions of article L of the Code of Commerce related to justifying our assessments, we bring to your attention the following information: Accounting principles Capitalization of development costs As part of our assessment of the accounting principles applied by your Company, we examined the methods for recognizing development costs as assets as well as those used to depreciate them and to verify their recoverable value, and we made sure that the sections Accounting principles - Intangible assets and impairment of assets of the financial statements provide appropriate information. Accounting estimates Impairment tests On each closing date, the Company systematically tests goodwill on acquisition and assets with an indefinite life for impairment and also determines whether there is an indication that long-term assets are impaired using the methods described in the section Accounting principles - Impairment of assets in the financial statements. We examined the methods used for this impairment test, as well as the cash flow projections and assumptions used, and we made sure that the section Accounting principles - Impairment of assets as well as note 7 to the financial statements provides appropriate information Cegedim Reference Document 2007

132 Retirement obligations The section Accounting principles - Employee benefits indicates the methods for measuring retirement obligations. These obligations were measured by outside actuaries. Our work consisted in examining the data used, in assessing the assumptions used and in making sure that note 13 of the financial statements provides appropriate information. Pro forma financial information Note 2 Impact of the change in scope paragraph B) Pro forma financial information states the modalities for the determination of the pro forma financial information. Our work consisted in examining the data and the assumptions used and in making sure that note 2 paragraph B) to the financial statements provides appropriate information. As part of our assessments, we made sure that these estimates were reasonable. The assessments performed are consistent with our approach to auditing consolidated financial statements taken in their entirety, and therefore helped form our opinion expressed in the first part of this report. III - Specific verification In accordance with professional standards applicable in France, we have also verified the information given in the Group's Management report. We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements. Drawn up in Paris and Courbevoie, on April 23, 2008 The Auditors Grant Thornton 100 rue de Courcelles Paris cedex 17 TEL: +33 (0) Mazars & Guérard 61 rue Henri Regnault Courbevoie TEL: +33 (0) Michel Cohen Auditor Jean-Paul Stevenard Auditor Cegedim Reference Document

133 20.3 Pro forma financial information The pro forma financial information presents the consolidated earnings for the Cegedim Group for 2007 as if the acquisition of Dendrite had been carried out on January 1 st, For more information, see Note 2 in Chapter in the consolidated financial statements and the management report Audit of annual historical financial information Audit of the historical financial information The statutory financial statements drawn up at December 31, 2007 (and their comparative pro forma financial statements at December 31, 2006 and 2005) and the consolidated financial statements drawn up at December 31, 2007 (and their comparative financial statements drawn up in accordance with IFRS standards at December 31, 2006 and 2005) were audited by the independent Auditors. Their reports concerning fiscal year 2007 are presented respectively in chapters and of this Reference Document. The reports for fiscal year 2006 are presented in the Reference Document filed with the Autorité des Marchés Financiers on April 23, 2007, under the number D The reports for fiscal year 2005 are presented in the Reference Document filed with the Autorité des Marchés Financiers on June 27, 2006, under the number D These reports and the statements accompanying them are included by reference in this Reference Document Other information contained in this Reference Document that was audited by the statutory Auditors This entire Reference Document and its notes were read by the Auditors who reported their findings in a final letter. Their comments, where relevant, are reproduced in the statement of the person responsible for the Reference Document appearing in chapter Source of the financial information The financial information appearing in this Reference Document was taken from the audited financial statements of Cegedim Date of the latest financial information On the date of this Reference Document, the latest information audited goes back to December 31, Interim financial information No interim financial information has been published since December 31, Cegedim Reference Document 2007

134 20.7 Dividend distribution policy For 2005, each shareholder received a dividend of 0.77 per share, a sum representing 19.1% of the Group share of consolidated net earnings. For 2006, each shareholder received a dividend of 0.80 per share, a sum representing 19.3% of the Group share of consolidated net earnings. For 2007, the General Meeting will be asked to approve a dividend of 0.90 per share, a sum representing 19.2% of the Group share of consolidated net earnings. The number of shares remained the same in 2005, 2006 and In accordance with the law, all dividends that have not been collected within five years of their payment date expire in favor of the Government Legal and arbitration procedures Cf. chapter 4.4 of this Reference Document Significant changes in the financial or commercial position The Group s financial or commercial position has not changed significantly since the end of fiscal year Chapter 21 - Additional Information 21.1 Share capital The share capital of Cegedim S.A. is 8,891, The following information is given at December 31, Subscribed Capital There are 9,331,449 authorized shares. The shares have a par value of There is no authorized unissued capital and there are no issued shares that are not fully paid up. There was no change in the number of outstanding Cegedim shares during the 2007 fiscal year Shares not representing capital There are no shares not representing capital Number, book value and par value of the shares held by Cegedim or in its own name At December 31, 2007, Cegedim does not hold any of its own shares. Cegedim Reference Document

135 Total convertible or exchangeable securities or securities accompanied by subscription notes There are no convertible or exchangeable bonds or bonds redeemable as shares or share subscription notes or any other securities capable of increasing the capital stock Conditions governing all acquisition rights and all obligations attached to subscribed, unpaid up capital or any undertaking seeking to increase the capital stock None Information concerning the capital of any member of the Group subject to an option or a conditional or unconditional agreement placing it under option None History of the share capital Number of shares Date Transaction Created After transactions Premiums (in ) Capital (in ) Par value (in ) Initial number of shares 488, /94 Takeover of Cegedim (1) 6, ,894 3,308, ,544, Division of the par value by 4 1,484,682 1,979,576-7,544, Capital increase 120,000 2,099,576 7,090, (2) 8,001, /98 Division of the par value by 4 6,298,728 8,398,304-8,001, /00 12/00 12/00 Conversion of the capital into (3) euros - 8,398,304-8,001, Capital increase through inkind contribution 891,112 9,289,416 70,900, (4) 8,850, Capital increase through cash contribution 42,033 9,331,449 73,910, (5) 8,891, (1) (2) (3) (4) (5) Financière Cegedim, which, since it was founded in 1989, has held 98.61% of Cegedim, merged with Cegedim on December 26, 1994, and took over its name (cf Chapter 5, Note 5.1.3). This internal operation was carried out on the basis of the companies book value. Cumulative 1994 merger premium, and 3,782, in issue premium. When the capital stock was converted into euros, the par value of the share was set at The conversion rounding based on 8,398,304 shares (i.e ) resulted in a capital reduction allocated to the unavailable reserves. The cumulative premiums mentioned in (2) are increased by the contribution premium of 63,810, The cumulative premiums mentioned in (3) are increased by the issue premium of 3,009, Since December 2000, there have been no changes in Cegedim s share capital Cegedim Reference Document 2007

136 21.2 Deed of incorporation and bylaws Cegedim s business purpose According to Article 2 of the bylaws, the business purpose of the Company is: The acquisition of stakes or interests in all companies or enterprises that offer data processing, studies and marketing. The provision of various services in various fields. Economic and social studies of all kinds in various fields, particularly statistical, financial, commercial and legal studies, market studies, opinion pools, surveys of all kinds and in all fields, the creation and use of panels, public relations, advertising and calculations of all kinds. The organization and management of companies and company information by the most diverse means. Documentation through all means and in all fields, particularly the scientific, economic, social and statistical fields, etc. Marketing, particularly the penetration of various markets with all the operations such penetration requires. All activities involving information and its processing, information technologies and machine processing in all their design and operational aspects in the various fields. All administrative, financial, accounting or management services for the Company s subsidiaries or all other companies in which it holds a stake or any other company. The acquisition, subscription and management of all securities. All industrial, commercial and financial, moveable and real property operations that may be directly or indirectly related to the business purpose and all similar or related purposes. The acquisition by the Company, by all means, of equity interests in all enterprises or companies created or to be created related to the business purpose, particularly through the creation of new companies, contributions, general partnerships, the subscription or acquisition of shares or corporate rights, mergers, alliances or joint ventures or economic interest groups or lease management Provisions contained in the deed of incorporation and bylaws concerning the members of the administrative or management bodies The provisions of the Cegedim bylaws concerning the members of its administrative and management bodies conform to the laws in effect, with the exception of the following terms and conditions: Unless the Code of Commerce exempts him from this obligation, each Director is required to own at least one share for his entire term of office; No one over the age of 75 may be named Chairman of the Board of Directors. If the Chairman in office exceeds this age, he is assumed to have resigned at the end of the next upcoming meeting of the Board of Directors; Decisions are made by the majority of members present or represented; each Director has one vote. In case of a tie, the Chairman casts the deciding vote; No one over the age of 75 may be named General Manager. If the General Manager in office exceeds this age, he is assumed to have resigned at the end of the next upcoming meeting of the Board of Directors Rights, privileges and restrictions attached to each class of existing shares All the shares making up the Company s capital are of the same class. The Extraordinary General Meeting held on February 8, 1995, decided that in consideration of the share of the capital stock they represent, a double voting right would be allotted to all fully paid-up shares providing proof of registration for at least 4 years in the name of the same shareholder. This double voting right is reserved for shareholders with French nationality and for shareholders originating from a Member State of the European Union. Cegedim Reference Document

137 Furthermore, in case of a capital increase through incorporation of reserves, profit or issue premium, the double voting right is attached, as of their issuance, to the registered shares allotted free of charge to a shareholder in the amount of the old shares that entitle him to this right. The double voting right ceases for any share that has been converted into a bearer share or transferred, to the exclusion of any transfer of registered shares through inheritance or family gift. In accordance with the law, all dividends that have not been collected within five years of their payment date expire in favor of the Government. Treasury shares give no right to dividends: the pertaining portion is allocated to the carry forward account Actions necessary to modify shareholders rights There are no stricter conditions than those set forth by law for modifying shareholders rights Conditions under which Annual General Meetings and Extraordinary General Meetings of shareholders are called General Meetings are called and transact business under the conditions set forth by law. They are held at the corporate headquarters or at any other location indicated in the notice of meeting. Any shareholder has the right to attend General Meetings and to take part in votes personally or through a proxy regardless of the number of shares he owns, upon simple proof of his status as shareholder at least five days before the meeting. However, the Board of Directors has the right to reduce this time frame. All shareholders may vote by mail Provisions of the deed of incorporation and bylaws that could delay, defer or prevent a change in control of the Company None Provisions of the deed of incorporation and bylaws setting the threshold beyond which any equity interest must be disclosed The bylaws contain no special provision for declaring threshold crossings. Only the legal provisions are applicable Conditions set by the deed of incorporation and bylaws governing modifications of the capital if these conditions are stricter than those required by law None Cegedim Reference Document 2007

138 Chapter 22 - Important Contracts Significant contracts for the two years preceding the publication of this Reference Document, other than contracts signed in the normal course of business to which Cegedim or any other member of the Group is party, concern external growth operations. They are systematically subject to confidentiality agreements. If these transactions are concluded and are likely to have a significant impact on the issuer s situation, they are published in a press release that can also be consulted at the Company s web site ( Cf. Chapter of this Reference Document for a recall of these operations. Any contract signed by any member of the Group that contains provisions conferring on any member of the Group a significant obligation or commitment for the entire Group on the date of this Reference Document is mentioned in the off balance sheet commitments appearing in note 22 to the notes to the consolidated financial statements presented in Chapter 20 of this Reference Document. Chapter 23 - Information from Third Parties, Declarations Filed by Experts and Declarations of Interest None Chapter 24 - Publicly Available Documents During the term of validity of this Reference Document, the following documents (or copies of these documents) may be consulted at Cegedim S.A. corporate head-quarters: (a) The Cegedim deed of incorporation and bylaws; (b) All reports, correspondence and other documents, historical financial information, valuations and declarations prepared by an expert at the request of Cegedim, some of which are included or referred to in the registration document; (c) The historical financial information for Cegedim S.A. and its subsidiaries for each of the two fiscal years preceding the publication of this Reference Document. Chapter 25 - Information on Trade Investments Cegedim s trade investments are presented in the organizational chart in chapter 7 of this Reference Document. They are taken into account to prepare the Group s consolidated financial statements in accordance with the methods presented in note 1 of the consolidated financial statements presented in chapter 20. Specific comments concerning the main subsidiaries (whose individual sales exceed 30M) are included in the Management Report found in chapter 26. Cegedim Reference Document

139 Chapter 26 - Appendices 26.1 Management report on the operations for the fiscal year ended December 31, 2007 Ordinary Annual General Meeting held on May 7, Management report on the operations for the fiscal year ended December 31, Ladies and Gentlemen, We have called this annual ordinary General Meeting pursuant to the bylaws and the provisions of the Code of Commerce to report to you about the Company s activity during the fiscal year ended December 31, 2007, the results of this activity and the future outlook and to submit for your approval the balance sheet and the annual financial statements for this fiscal year. These financial statements are appended to this Report. The notices of meeting required by law were duly sent to you, and all the documents set forth by the regulations in force were made available to you within the required time frames Cegedim S.A. Management Report PRESENTATION OF THE ANNUAL FINANCIAL STATEMENTS The annual financial statements for the fiscal year ended December 31, 2007, that we are submitting for your approval were prepared in accordance with the presentation rules and valuation methods set forth by the regulations in force. The presentation rules and the valuation methods used are identical to those used for the previous fiscal year. COMPANY SITUATION AND OPERATIONS DURING THE PAST FISCAL YEAR Cegedim S.A. activities Cegedim S.A. is a subsidiary of Financière Cegedim, the lead holding company of the Cegedim Group. It has been listed for trading on NYSE Euronext since Cegedim provides various centralized services for its subsidiaries, such as: accounting, financial, legal, human resources and purchasing management. It also plays an operational role by pooling the Group s resources and IT tools, which it makes available to its French and foreign subsidiaries. This infrastructure is specifically the source of a certain number of product developments that benefit the entire Group. Cegedim also carries out certain commercial activities in its own name connected to information production, particularly with its statistics departments (pharmaceutical products sales statistics), file management and processing (professional nominative databases) and EDI (electronic data interchange) Cegedim Reference Document 2007

140 Highlights Acquisition of the Dendrite Group The acquisition of the Dendrite Group, Cegedim s American competitor, was the major event in the 2007 fiscal year as well as a historic step in Cegedim Group's development. Announced on May 9, 2007, this transaction created a major world leader for supplying solutions to the pharmaceutical industry in the fields of sales and marketing as well as associated research. The impacts caused by this acquisition are discussed in Cegedim Group s management report (cf. infra), as well as in the section involving Cegedim S.A. s financial structure and borrowing. Disposal Of Activities To The Tessi Group On July 2, 2007, Cegedim Group and Tessi signed a contract finalizing the acquisition by Tessi of the Marketing Services, GEIDE - Electronic Information and Document Management for Business, Remote Declaration Filing Portal and Data Acquisition and Capture Activities (Atelier Pré Saint-Gervais) activities from the Cegedim Group. For the transaction, these activities were grouped together between the end of 2006 and the beginning of 2007 as securities in XWZ 32, holding created for the occasion. Thus, in 2007: Cegedim S.A. sold its CMP activity business to XWZ 32 MP, a subsidiary of XWZ 32 on April 30, Cegedim S.A. recorded capital gains of 2.4 M on this sale. Cegedim S.A. also transferred its holdings in Declaratis and SDI to XWZ 32. Cegedim then sold the XWZ 32 securities to Tessi on July 2, 2007 for an amount which remains confidential. Cegedim S.A. recorded a loss on the sale of shares for 3.7 M and a loss on the sale of receivables of 4.3 M. Other internal reorganizations On December 31, 2007, Cegedim S.A. transferred the ownership of the shares for its CAM Corp US subsidiary to its other subsidiary, Cegedim Inc. for an amount of 16.7 M in order to reorganize its activities carried out in the United States from a legal standpoint. Pro forma of the 2006 Income Statement resulting from the complete transfer of assets and liabilities on December 30, 2006 Cegedim S.A. absorbed TVF, Santesur, and Pharma CRM on December 30, This complete transfer of assets and liabilities took place on December 30, 2006, without accounting retroactivity. In order to re-establish the comparability with the 2005 fiscal year, a pro forma for the 2005 fiscal year was established taking into account the merger boni and mali as if the complete transfer of assets and liabilities had taken place in For the 2007 fiscal year, the Income Statement includes the information from the absorbed companies excluding intra-group transactions. Because of this, pro forma financial statements were also established for the 2006 financial year in order to be able to compare the 2006 and 2007 Income Statements. Sales revenue Changes in activity during fiscal year 2007 In 2007, Cegedim S.A. s business grew by 1.3% with sales increasing from M 2006 pro forma to 138 M. Cegedim Reference Document

141 Without comparing to the 2006 pro forma Income Statement, sales increased in 2007 by 48.4%, increasing from 93 M to 138 M. The impact from the absorbed companies is 43.3 M, while the sale to Tessi of the CMP business on July 2, 2007 contributed a reduction in sales of approximately 3.3 M compared to Sales outside the Group represent 69.5% of the total sales. These are relatively mature activities that Cegedim S.A. has been carrying out for many years. They do not call for any particular comments. Operating income and expenses Operating income increased by 7.6%. Operating expenses increased by 9.2%. The income and expenses are impacted by the allocation of loan expenses and commissions, incurred during the acquisition of Dendrite. In particular, we note the following: Strong growth (+ 11 M compared to the 2006 pro forma) of operating income, of which 9.3M is due to the writeback of loan issuing commissions and expenses in order to spread them out over 6 years. An increase in Other external purchases and expenses for 8.1 M which is up 13.1% compared to 2006 pro forma, including 9.3 M which is due to the same loan issuing expenses. The net expense, after writeback for distribution, amounts to 1 M for The impact as an absolute value of the few changes in other operating income and expense items was insignificant. Operating earnings amounted to 16.6 M, down by only 0.7 M compared to 2006 pro forma. Financial income and expenses Financial income amounted to a loss of 10.9 M compared to a profit of 4.4M in It includes 66.3 M of financial expenses including 33.1 M in interest and similar expenses mainly resulting from the implementation of the financing for the acquisition of the Dendrite Group. Financial income amounts to 55.4 M for It includes dividends received in 2007 for 8.4 M, down 6.7 M compared to the 2006 pro forma because of the sale of certain subsidiaries to Tessi. Financial income also includes net income on sale of short-term investment for 3.9 M, corresponding essentially to the gain on the sale of Dendrite shares acquired in Earnings before taxes Earnings before taxes came to 5.7 M compared to 17.3 M in 2006 ( 21.7 M Pro forma). Non-recurring profit/loss Non-recurring profit/loss in 2007 gave a loss of 1.6 M. It includes the reorganizations discussed previously which were done to prepare the sale of a scope of activities to the Tessi Group and the actual sale itself Cegedim Reference Document 2007

142 Income taxes In 2007, the income tax item showed income of 7.4 M due to the reversal of the provision for income tax that had been recorded in the financial statements of the companies taken over through complete transfers of assets and liabilities. Excluding the effect of this reversal, the tax charge amounted to 4.5 M. Net earnings Considering the elements above and employee profit-sharing in the amount of 0.3 M, the fiscal year ended with a profit of 11.2 M compared to 32.5 M in The earnings statement for the last five fiscal years set forth by article 148 of the decree of March 23, 1967, is appended to this Report. Balance sheet At December 31, 2007, Cegedim S.A. s balance sheet total came to 962 M compared to M for the previous fiscal year which was an increase of 144.5%. Subsidiary activities The subsidiaries activity is described in the part of the Management Report devoted to the consolidated financial statements. The table of subsidiaries and equity investments, appended to the financial statements, also provides the necessary clarifications. A specific commentary is included in an appendix to this Report on subsidiaries whose corporate sales exceed 30 M. FINANCIAL STRUCTURE AND DEBT Shareholders equity totaled M compared to M in 2006, which is an increase of 3.4 M, following a dividend distribution of 7.5 M for fiscal year Because of the loan taken out for the acquisition of Dendrite, the financial debts increased from M to M at the end of Cegedim repaid all of its loans on May 9, 2007 and completely restructured its debt at the same time the acquisition was made. The detail for the different lines (their due dates and their hedging) is given in the Cegedim Group s management report (cf. infra Acquisition of the Dendrite Group Acquisition Financing) Considering the cash position, net financial debt amounted to M, compared to M in CAPITAL EXPENDITURES Cegedim S.A. s capital expenditures are a result of its activities and involves the IT infrastructure and equity investments. Net intangible and tangible fixed assets increased by 4.9 M in 2007 (mainly for capitalized development projects) Cegedim increased its interest in its subsidiaries by 308 M. It specifically consented to an increase in capital for its subsidiary, Dendrite International Inc. by incorporation of a current account for an amount of M. Additionally, disposals for the securities for the scope of activities sold to Tessi came to 22.4 M for the fiscal year. Cegedim Reference Document

143 The loans granted to subsidiaries increased by more than 640 M for the fiscal year, including a loan for M granted to its subsidiary, Cegedim USA for the acquisition of Dendrite International Inc. At the same time, more than 401 M was repaid during the fiscal year. Acquisition of direct and indirect equity investments Company % Held Holding Entry date Indirect through the CAM France subsidiary 99.85% Cegedim Malaysia SDN 100.0% and CDS 0.15% (creation) April 07 Cegedim India Private Limited Indirect through CDS 99% and CAM France 1% 100.0% (creation) April 07 Dendrite Group indirect through the Cegedim USA subsidiary 100.0% (acquisition) May 07 Servilog Concept 100.0% Indirect through the Alliadis subsidiary (acquisition) July 07 3ES Indirect through the CAM France subsidiary 100.0% (acquisition) Sept 07 Companies that entered and exited during 2007 Atelier Pré Saint-Gervais % Indirect through the XWZ32 subsidiary (creation) March 07 XWZ32MP 100.0% Indirect through the XWZ32 subsidiary (creation) March 07 Servilog Assystinfo 100.0% Indirect through the Alliadis subsidiary (acquisition) July 07 Sales of equity shares During the 2007 fiscal year, Cegedim sold its holdings in Declaratis and SDI to XWZ 32 then sold its holdings in XWZ 32 to Tessi on July 3, RESEARCH AND DEVELOPMENT Cegedim S.A. brings together the pooled development teams assigned to projects using the Group s shared IT infrastructure. Development projects continued during fiscal year 2007 and a total of 7.1 M was capitalized as intangible assets, since the conditions set forth for this capitalization by the General Chart of Accounts were satisfied. The projects involve in particular the revamping of the back-office for the Group s CRM offer, the invoice exchange and dematerialization chain and the portals allowing commercial operation of the Group s solutions as well as the revamping of the processing chain for the Care Sheets. Aside from these specific developments, Cegedim handles daily application maintenance for all of the Group s pooled offers based on a budget that is relatively comparable each year. ANALYSIS OF BUSINESS DEVELOPMENTS Key financial performance indicators The key financial indicators at Cegedim S.A. are the following: Sales made within the Group and outside the Group Dividends collected Capital expenditures Cegedim Reference Document 2007

144 Financial structure. These were commented on in detail earlier. Key non-financial performance indicators Cegedim has pooled its IT resources available to its subsidiaries and their clients. It is therefore essential for Cegedim to be on the cutting edge of new technologies, to make sure these systems are operating optimally and to handle their maintenance and security (physical security, access security, security of the information and of the administration of the systems and developments). Cegedim considers the training of its teams to be a key factor of success, making it possible to ensure client satisfaction and employee motivation. The general training policy implemented at Cegedim consists primarily in continuously adapting the skills of its research and development teams and in assisting its employees in acquiring new skills necessary for their work. The Cegedim Group s international expansion, particularly through external growth, relies on its ability to incorporate new activities. Here, the measures taken by Cegedim seek to accelerate the incorporation of new activities, control the risks inherent in growth operations and track its performance. RISK FACTORS AND USE OF FINANCIAL INSTRUMENTS Exchange rates risk Cegedim S.A. makes 11.5% of its sales through exports, essentially in the Euro area. The Company has therefore limited exposure to an exchange risk. There is no specific hedging to cover fluctuations in the exchange rates compared to the euro. Moreover, Cegedim contracted a $200 million loan for which there is no euro/dollar hedge. Interest rates risk and financial instruments The amount of the loans exposed to an interest rate risk amounts to 140,000 K (revolver credit Euribor 3-month rate). The subordinated loan for 50,000 K to Financière Cegedim does not benefit either from interest rate hedging. All the other loans are hedged. The loan for $200,000 K contracted at a variable rate was completely hedged by the implementation of a variable rate swap receiver, fixed rate payer. The loan for 350,000 K was completely hedged by the implementation of a derivative rate instrument. Cf. infra: for the significant risk factors at the consolidated level. SIGNIFICANT EVENTS THAT HAVE OCCURRED SINCE THE END OF THE FISCAL YEAR Since the end of the fiscal year, business has been conducted in compliance with the tendencies recorded during Cf infra for events after the end of the fiscal year for the consolidated scope. FORESEEABLE CHANGES IN THE COMPANY S SITUATION AND FUTURE OUTLOOK The 2008 operating margin should evolve in relation with a relatively stable growth in sales resulting from the maturity of Cegedim S.A. s historical activities. Cegedim Reference Document

145 NON TAX-DEDUCTIBLE EXPENSES In accordance with the provisions of articles 223 quater and 223 quinquies of the General Tax Code, we indicate that the financial statements for the past fiscal year take into account the sum of 458, corresponding to non tax-deductible expenses. As a result, the income tax paid due to these costs and expenses amounted to 157,886. EARNINGS ALLOCATION We propose that you allocate the profit for the fiscal year totaling 11,211, as follows: As dividends, the sum of 8,398, The balance or the sum of 2,812, to the other reserves account. Amount - Payment - Tax treatment of the dividend The unit dividend is The cash dividend will be paid at the corporate headquarters beginning on May 21, For individuals who are tax residents of France, this dividend is eligible for the exemption set forth in No. 2 of article of the General Tax Code. Dividend and holding by the Company of treasury shares If, when the dividend is paid, the Company holds certain treasury shares, the distributable profit corresponding to the dividend not paid because the company holds these shares will be allocated to the carry forward account. REMINDER OF THE DIVIDENDS DISTRIBUTED In accordance with the provisions of article 243 bis of the French General Tax Code, we recall that the amounts distributed as dividends for the three previous fiscal years are as follows: Deductible income allowance Fiscal Number of Non-deductible Dividend Other income year shares income allowance Per share Total distributed ,331, ,345, None None ,331, ,185, None None ,331, ,465, None None INFORMATION CONCERNING THE CAPITAL HELD BY CERTAIN SHAREHOLDERS In accordance with the provisions of article L of the French Code of Commerce, and given the information and notifications received pursuant to articles L and L of this Code, we identify below the shareholders (individuals or legal entities) who directly or indirectly owned more than one-twentieth, one-tenth, three-twentieths, one-fifth, one-fourth, one-third, half, two-thirds, eight twentieths or nineteen-twentieths of the capital stock or voting rights on December 31, 2007: Cegedim Reference Document 2007

146 Number of % Held # single votes # double votes Total % Voting shares Shares Votes votes rights Financière Cegedim 6,221, % 29,000 6,192,044 12,384,088 12,413, % Alliance Healthcare France 933, % 0 933,145 1,866,290 1,866, % Financière de l Echiquier 589, % 589, , % Jean-Claude Labrune 38, % 0 38,496 76,992 76, % GERS 36, % 0 36,788 73,576 73, % Public 1,512, % 1,502,365 10,387 20,774 1,523, % Cegedim S.A % % Total 9,331, % 2,120,586 7,210,860 14,421,720 16,542, % To the Company s knowledge, on the date this Reference Document was compiled, the shareholders holding more than 5% of the capital and voting rights are the same as in 2006: Financière Cegedim, Alliance Healthcare France and Financière de l Echiquier. On December 31, 2006, the makeup of the capital and voting rights was as follows: Number of % Held # single votes # double votes Total % Voting shares Shares Votes votes rights Financière Cegedim 6,221, % 29,000 6,192,044 12,384,088 12,413, % Alliance Healthcare France 933, % 0 933,145 1,866,290 1,866, % Financière de l Echiquier 484, % 484, , % Jean-Claude Labrune 38, % 0 38,496 76,992 76, % GERS 36, % 0 36,788 73,576 73, % Public 1,576, % 1,565,547 10,816 21,632 1,587, % Cegedim S.A. 41, % % Total 9,331, % 2,078,977 7,211,289 14,422,578 16,501, % ITEMS LIKELY TO HAVE AN IMPACT IN CASE OF A PUBLIC OFFERING (art. L ) In the event of a public offering, there are no specific provisions likely to have an impact on: The structure of the Company s capital The statutory restrictions on exercising voting rights and transferring shares Direct or indirect stakes in the Company s capital that it is aware of pursuant to articles L and L The rules applicable to appointing and replacing members of the Board of Directors and to amending the Company s bylaws Cegedim Reference Document

147 The powers of the Board of Directors, particularly with respect to issuing or buying back shares. Furthermore, The Company was not informed of any agreements pursuant to article L There are no holders of shares comprising special control rights (except for the double voting rights, whose allotment is completely independent of the occurrence of a public offering) There is no special mechanism set forth in the employee shareholding plan when control rights are not exercised by employees The Company has no knowledge of agreements between shareholders that might result in restrictions on transferring shares and exercising voting rights The agreements signed by the Company likely to be amended or to end in case of a change in control of the Company are relatively few in number and are confidential in nature There are no agreements providing for compensation for the members of the Board of Directors or employees if they resign, are dismissed for just and serious cause or if their employment ends due to a public offering. EMPLOYEE EQUITY PARTICIPATION PLAN In accordance with the provisions of article L of the Code of Commerce, we are reporting to you on the employee equity participation plan as at the last day of the fiscal year. On December 31, 2007, the Corporate Mutual Fund consisted of 68,174 Cegedim shares representing 0.73% of the capital. COMMENTS FROM THE WORK COUNCIL Pursuant to the provisions of article L of the French Labor Code, we inform you that the Work Council has not made any comments concerning the Company s economic position and its employment practices. AUDITORS AUDIT We ask you, in accordance with article L of the Code of Commerce, to approve the agreements cited in article L of this same Code, signed or continued during the fiscal year, after having been duly authorized by your Board of Directors. The Auditors were duly advised of these agreements, which they describe in their special report that can be consulted in accordance with the legal and regulatory provisions. We also inform you that the list and the purpose of the routine agreements signed during fiscal year 2007 under normal conditions that, due to their purpose or their financial implications, are significant for the parties, were provided to the Directors and to the Auditors and are appended to this report. DIRECTORS FEES We propose that you approve the total amount of Directors fees allocated to the Board of Directors for the fiscal year in progress, which may be set at the sum of 45, Cegedim Reference Document 2007

148 INFORMATION CONCERNING THE CORPORATE OFFICERS List of corporate officers In accordance with the provisions of article L , paragraph 3 of the Code of Commerce, we provide in the appendix a list of all the offices held and duties performed in all companies by each of the Company s corporate officers. Compensation of corporate officers Pursuant to article L , paragraph 2 of the Code of Commerce, we inform you of the amount of compensation and benefits of all kinds that each corporate officer of the Company received during the past fiscal year from the companies controlled by your Company as per article L of the Code of Commerce. OPERATIONS ON SHARES Treasury shares We inform you that the Company as at December 31, 2007, did not hold any treasury shares. Transactions on shares held by corporate officers To the Company s knowledge, and for the period from January 1 st 2007 to December 31, 2007, no Cegedim corporate officer carried out transactions on shares. AUTHORIZATIONS CONCERNING CAPITAL INCREASES The extraordinary General Meeting of shareholders held on June 28, 2006: Decided to authorize the Board of Directors, in accordance with the provisions of article L of the Code of Commerce, to carry out a capital increase within a maximum of 26 months from this meeting limited to a maximum total amount of 3,811,200, in one or more phases, with maintenance of the shareholders preemptive subscription right. This authorization was not acted on. Decided to authorize the Board of Directors, in accordance with the provisions of article L of the Code of Commerce, to proceed with a capital increase within a maximum of 26 months from this meeting limited to a maximum face value of 3,811,200, in one or more phases, with elimination of the preemptive subscription right. This authorization was not acted on. The extraordinary General Meeting of shareholders held on April 27, 2005: Decided to authorize the Board of Directors, in accordance with the provisions of articles L to of the Code of Commerce, to proceed, within a maximum of 38 months, to award free shares, existing or to be issued, to employees and/or managers of the Cegedim Group. This authorization was not acted on. Cegedim Reference Document

149 Cegedim Group Management Report PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS Pursuant to European regulation No. 1606/2002 of July 19, 2002, the consolidated financial statements of the Cegedim Group were prepared as at December 31, 2006, in accordance with the international accounting standards adopted in the European Union. The international accounting standards include the IFRS ("International Financial Reporting Standards"), the IAS ("International Accounting Standards") and their mandatory application interpretations on the closing date. GROUP SITUATION AND ACTIVITY DURING THE PAST FISCAL YEAR Group activities The Cegedim Group designs exclusive databases and high value-added software solutions. These skills are carried out in two divisions: Healthcare and strategic data, which covers services dedicated to pharmaceutical companies, healthcare professionals and key players of the health insurance sector Technologies and services multi-sector. Healthcare and strategic data The worldwide leader in its historical core business, Cegedim assists the largest pharmaceutical companies worldwide with their CRM (Customer Relationship Management) projects and measures the effectiveness of their marketing and sales activities. With its CRM tools, whose value is enhanced by the Group s strategic databases, Cegedim provides marketing and sales departments with an informed view of their market and their targets so that they can optimize their strategies and their return on investment. Cegedim has also positioned itself as one of the main European publishers of medical and paramedical management software and management applications dedicated to the health insurance sector. Structured scalable and communicative, these software programs are an integral part of the Cegedim Group s health flow management solutions. Technologies and services Capitalizing on this expertise, Cegedim offers high value-added management solutions to its numerous clients in the business world concerned by outsourcing schemes, professional data exchange and control problems. Highlights Acquisition of the Dendrite Group The acquisition of the Dendrite Group, Cegedim s American competitor, was the major event in the 2007 fiscal year as well as a historic step in Cegedim Group's development. Announced on May 9, 2007, this transaction will create a major world leader for supplying solutions to the pharmaceutical industry in the fields of sales and marketing as well as associated research. The groups are complementary both with respect to the range of products and solutions offered and from a geographic standpoint, since Cegedim is well established in Europe and Dendrite in the United States and in the Asia-Pacific area. The new Group is able to answer the worldwide needs of its customers and provide a diversified range of high valueadded integrated solutions Cegedim Reference Document 2007

150 At the end of the transaction, Dendrite International Inc, which was listed on the NASDAQ, was removed from the American stock market. It became a 100% subsidiary of the American company, Cegedim Inc., which in turn is held completely by Cegedim S.A. Disposal Of Activities To The Tessi Group On July 2, 2007, Cegedim Group and Tessi signed a contract finalizing the acquisition by Tessi of the Marketing Services (SDI, Médipost and XWZ32MP), GEIDE Activities - Electronic Information and Document Management for Business (Docubase Systems, Docubase Services and Docubase Systems Inc.), Remote Declaration Filing Portal Activities (AspOne.fr and Déclaratis), Data Acquisition and Capture Activities (Atelier Pré Saint-Gervais) and XWZ32, holding created for operational needs. This opportunity enabled Cegedim to transfer these activities to a partner whose competence is recognized while still working with Tessi through service agreements ensuring the continuation of processing and the sharing of experience. In its "Technologies and Services" division, Cegedim is refocusing its marketing skills on the management of databases with its CCD activity (Cegedim Direct Communication) whose vocation is to design, manage and market commercial and marketing databases. CCD supplies updated and enriched data from multiple sources to businesses who wish to communicate with the professional world. Deconsolidation of the Cegelease Debt Cegelease is a French subsidiary of Cegedim that provides financing solutions for pharmacies, primarily for their computer equipment. This activity significantly increases the Cegedim Group's financial debts, but with a risk level that is very low because of the solid solvability profiles of the pharmacist customers. Through a Balance Sheet transaction carried out on April 30, 2007, it was decided to deconsolidate this debt. Other Major Events in 2007 The Cegedim Group is also continuing to develop its databases and its services for the pharmaceutical industry with the creation of subsidiaries in India and Malaysia (marketing studies) and the acquisition of the 3ES Company in France. The Pharmacist software activity is also pursuing its development with the acquisition of the French Servilog Company. Impact on the 2007 consolidated financial statements Deconsolidation of the Cegelease Debt The permanent deconsolidation of the debt was decided in order to improve the cash position. Cegelease assigned without recourse the major portion of its receivable portfolio to the Natixis Bank for a cash contribution of 71 million euros on April 30, Acquisition of the Dendrite Group Financing the acquisition It should be noted that the Dendrite Group did not have any debts when it was acquired on May 9, The acquisition was carried out for $16.00 per share, for a total of 560 million. It was financed by a complete restructuring of Cegedim Group s bank borrowing (reconsolidation of the existing debt), with the following terms: Cegedim Reference Document

151 A loan for $200 million based on the Libor, as an amortizable loan until 2013 A loan for $50 million also based on the Libor, as an amortizable loan due in 6 months, which was completely paid off in July 2007 A loan for 350 million based on the Euribor, as an amortizable loan until million loaned by the lead holding company, Financière Cegedim A revolver credit with 122 million used out of a total of 165 million available. The loan for 350 million taken out with a variable rate was completely hedged by the implementation of an optional derivative rate instrument. The loan for 200 million contracted at a variable rate was completely hedged by the implementation of a rate swap. Because of the financing method for the acquisition of the Dendrite Group and the deconsolidation of Cegelease s debt discussed previously, the net consolidated financial debt at December 31, 2007 amounts to 611 million. Goodwill on acquisition resulting from the acquisition of the Dendrite Group The acquisition of Dendrite was carried out by purchasing 100% of the shares for 560 M to which was added 9 M in expenses directly resulting from the consolidation (audit, lawyers, consultants). In compliance with the IFRS 3 standard regarding business combinations and the IAS 38 standard regarding intangible assets, the Cegedim Group ensured that the assets and liabilities acquired as a result of the purchase of Dendrite are recognized at their fair value in the post-acquisition Group's consolidated balance sheet. Specifically, the Dendrite brand was valued at 93 M as well as various technologies for 10 M. Residual goodwill on acquisition totals 380 M at the end of The amount of goodwill on acquisition remains provisional and will be established definitely for the establishment of the financial statements at June 30, The main balance sheet items acquired are fixed assets for approximately 535 M, current assets for approximately 117 M, payables for approximately 98 M as well as approximately 58 M in cash. Pro forma financial information The pro forma financial information presents the consolidated earnings for the Cegedim Group for 2007 as if the acquisition of Dendrite had been carried out on January 1st The non-recurring expenses directly related to the acquisition transaction (fees for M&A consultants, legal fees, audits, restructuring expenses specifically related to management severance packages, etc.) were matched with items in the acquisition price, coherent with the method used on May 9, 2007 to determine the goodwill on acquisition. Dendrite's financial statements for January 1st to May 8, 2007 were restated as accounting entries on the opening balance on May 9, 2007 and their impact on the fiscal year (depreciation, financial expenses) Cegedim Reference Document 2007

152 In millions of euros Item Pro forma 12 months 2007 Sales Ordinary operating income 97.3 Non-recurring expenses Operating income 86.8 Cost of net financial debt Earnings before taxes 53.7 The pro forma sales are 860 M and the operating margin at 11.3%, lower than the consolidated operating margin of 12.7%, because of Dendrite's first quarter where it was only beginning the reorganization of its activities. The borrowing taken out to finance the acquisition of Dendrite results in a net financial borrowing expense of 33 M for 12 months pro forma. Disposal Of Activities To The Tessi Group For the needs of the sale transaction, Cegedim created XWZ 32 during 2006 in order to hold the shares which were part of the scope which was to be sold. We recall that in 2006, Cegedim assigned Médipost and Docubase Systems to XWZ 32. In 2007, the internal reorganization preparatory to the sale continued, as discussed previously in Cegedim S.A. s management report (cf supra). The sale being effective on July 2, 2007, the scope of activity was recorded until that date, which was 6 months contribution to the 2007 consolidated annual financial statements. These activities are subject to significant seasonality. The impact on the 2007 consolidated financial statements (a loss of 2.5M for 6 months) compared to virtually break even in 2006 (- 0.7 M for 12 months) weighs significantly on the operating margin. Excluding these activities, the consolidated operating earnings for 2007 would be 97.8 M which is an operating margin of 13.2%. Changes in activity during fiscal year 2007 Consolidated sales amounted to 753 M in 2007, up 39%. Henceforth, the Cegedim Group realizes 51% of its sales in its foreign markets. With earnings on operations of 95.3 M, the operating margin is a satisfactory level at 12.7%, compared to a rate of 12.2% in 2006, which is an increase of 50 base points. This increase confirms the success of the consolidation of the Dendrite Group into the CRM and strategic data activity, Cegedim s core business. Operating margin before interest and taxes SALES EBIT EBIT/SALES EBIT/SALES IFRS - thousands of euros 12/31/ /31/ CRM and strategic data 434,190 65, % 16.0% Healthcare professionals 145,965 19, % 12.1% Healthcare insurance services 81,263 3, % 8.1% Healthcare and strategic data 661,418 88, % 13.5% Technologies and services 91,576 7, % 6.0% Consolidated total 752,994 95, % 12.2% Cegedim Reference Document

153 The margin for the CRM and strategic data sector remains high at 15% and confirms the successful integration of the Dendrite Group, consolidated since May 9, The total annual growth of 77.5% of the sector s sales is mainly a result of this acquisition which enabled Cegedim to cross a decisive step in its international development. 74% of this activity is now carried out outside of France, compared to 55% in 2006, a basic tendency which should continue in the future. The Healthcare professionals sector confirms its dynamism with a strong annual growth of 16.2% of its sales (10.2% of sales using a comparable scope of activities) Up 31%, the pharmacist software in the United Kingdom underwent a second consecutive year of significant growth. In France, all of the activities are well targeted, particularly with a strong upswing in physician software activity, up almost 14%. In 2007, these excellent performances contributed one again to an increase in the operating margin, which went from 12.1% to 13.5%. 44% of these activities took place outside of France. Sales in the Healthcare insurance services" sector increased by 5.2%, consistent with annual projections. The operating margin was 4.3%, penalized by the delays in the startup of certain projects, which will take shape in The businesses of the Technologies and services" division experienced an improvement in their operating margin, which increased from 6% to 7.7%, specifically as a result of the performance of financial leasing activities. The combination of these different factors brings the EBIT to 95.3 million, which is an operating margin of 12.7%. Excluding the impact of the activities sold to the Tessi Group halfway through the year, the earnings on operations amount to 97.8 M, bringing the margin to 13.2%. Entirely financed by borrowing, the acquisition of Dendrite incited the Group to restructure all of its debt. The financial borrowing expense amounts to 27.6 M for the fiscal year, compared to 6.8 M for At the same time, the new Group s tax situation was a significant reduction in the effective consolidated tax rate (28.7% in 2007 compared to 34.2% in 2006). Net consolidated earnings were 44.2 M, an increase of more than 5 M for FINANCIAL STRUCTURE AND DEBT Equity capital amounted to M at December 31, 2007 compared to M at December 31, 2006 which was an increase of 39.8 M compensated by a negative translation difference for the Group of 51.8 M and variations in minority holdings ( 0.6 M). Financial liabilities payable in less than one year amounted to 29.6 M and financial liabilities payable in more than one year came to M, or a total of M compared to M in Given the cash position, the Group s net debt amounts to M compared to M at the end of It represents 3 times the value of equity capital. The Group forecasts a return to a net debt ratio less than 3 times the EBITDA (earnings before income tax, depreciation and amortizations) during 2009 compared to 3.85 times at the end of It should be noted that a portion of this debt ( 37 M) corresponds to the financing of activity of the subsidiary Cegelease, which provides financial leasing services to French pharmacists. This debt could easily be deconsolidated, as was the case in April 2007, for a portion of the portfolio (cf. supra) Cegedim Reference Document 2007

154 INVESTMENTS The direct equity investments made by Cegedim S.A. and indirect equity investments made via the Group s subsidiaries were presented earlier. Net consolidated intangible and tangible assets grew respectively by M and by 19.5 M in These changes are a result of the consolidation of the Dendrite Group with brands and technologies recorded for 103 M. RESEARCH AND DEVELOPMENT ACTIVITY Cegedim S.A. brings together the pooled research and development teams assigned to projects using the Group s shared IT infrastructure. Certain subsidiaries also have their own teams and conduct their R&D operations autonomously. Development costs capitalized for fiscal year 2007 for projects in development phase totaled 15.5 M (excluding the effect caused by the consolidation scope), including 3 M for foreign subsidiaries (particularly the revamping of physicians software in the United Kingdom), 7.1 M invested by Cegedim S.A. (cf: part of this report dealing with Cegedim S.A.) and 2.9 M for Cegedim Activ. They are rounded out by capital expenditure for software and hardware, as well as by the work of the dedicated IT teams performed routinely in the Group s different subsidiaries, in order to provide applicative maintenance for all of the solutions marketed. In all, the Cegedim Group devotes around 8% of its sales revenues to research and development. ANALYSIS OF BUSINESS DEVELOPMENTS Key financial performance indicators The Cegedim Group s key financial indicators are: Consolidated sector sales Consolidated EBIT Capital expenditures Financial structure. These were commented on in detail earlier. Key non-financial performance indicators The key non-financial performance indicators applicable to Cegedim S.A. are also applicable at the consolidated Group level. They are rounded out by different indicators specific to the Group s businesses, particularly: Tracking of the number of users of CRM solutions As well as the qualitative and quantitative content of the databases marketed by the Group. The Cegedim Group presently boasts 200,000 users of its products and hopes to provide new services aimed at 400,000 mechanized visitors around the world. Cegedim Reference Document

155 RISK FACTORS AND USE OF FINANCIAL INSTRUMENTS Exchange rates risk 64% of the Group s activities are carried out by subsidiaries located in the Euro area, which means that s exposure to exchange risk is relatively limited. The foreign currencies representing a significant percentage of consolidated revenues are the pound sterling (10% of revenues) and the dollar (around 15%). There is no particular hedge preventing fluctuations in these currencies compared to the Euro, which could expose the Group to a more or less significant exchange rate risk depending on the years. Moreover, the Group contracted a $200 million loan for which there is no euro/dollar hedge. Interest rates risk The amount of the loans exposed to an interest rate risk amounts to 140,000 K (revolver credit Euribor 3-month rate). The subordinated loan for 50,000 K to Financière Cegedim does not benefit either from interest rate hedging. All the other loans are hedged. (cf supra) Liquidity Risk The Group's non-operational cash risk is caused mainly by the due date of its bank loans giving rise to the payment of interest and the payment flows on financial instruments as well as on other debts not giving rise to the payment of interest. Credit risks The Group s clients in the "Healthcare and strategic data" division (88% of consolidated sales) are essentially pharmaceutical companies, physicians, pharmacists and health insurance companies. They do not represent any significant counterparty risk. The activities acquired from the Dendrite Group completely belong to this division. Legal risks Although the healthcare sector is highly regulated, as a service provider, the Cegedim Group is not subject to special regulations aside from the routine declarations made to the CNIL (or its local equivalents) regarding all of the files and databases it owns or manages The confidentiality constraints imposed on the Group are directly related to these declarations. There are no ties or dependencies with other companies whose threshold is significant enough to have an appreciable impact on Cegedim. The assets necessary for operations are held by the Cegedim Group. There are no special tax provisions applicable to the Group. To the Company s knowledge, there are no litigations that have not been covered by provisions in the financial statements likely to have or that have recently had a significant impact on the financial position, the earnings, the activity and the assets of the Company or the Group Cegedim Reference Document 2007

156 Industrial and environmental risks Operating in the sector of technologies and services tied to information and databases, the Cegedim Group s priority is to satisfy its clients and partners concerning systems and data security. The Chairman s report on internal control, appended hereto, details the information system security measures implemented in the Cegedim Group. The industrial risks are also covered by adequate insurance policies. Given their essentially intangible nature (software, databases and intellectual services), the activities of the Cegedim Group have no significant environmental impact. SIGNIFICANT EVENTS THAT OCCURRED SINCE THE CLOSING DATE OF THE FISCAL YEAR Cegedim Activ, number one for software and services dedicated to Personal Insurance, subsidiary of Cegedim S.A., acquired Protectia, publisher of the "Protectia" health software package. This transaction was signed on January 16, The activities acquired represent annual sales of about 4 M. The acquisition price, financed by net worth is covered by a confidentiality agreement. FORESEEABLE CHANGES IN THE GROUP S POSITION AND FUTURE OUTLOOK For 2008, sales should be between 840 M and 850 M and the operating margin should be the same as in EMPLOYMENT AND ENVIRONMENTAL INFORMATION To satisfy the provisions of article L paragraph 4 of the Code of Commerce, we provide the required information below. Employment information We have appended a table of the required information to this Report. Environmental information Considering their nature, the Cegedim Group s activities do not require any specific comments about the environment. We ask you, in accordance with article L and L of the Code of Commerce to approve the consolidated financial statements presented to you in the attached appendices. The Board of Directors Cegedim Reference Document

157 26.2 Appendices to the Management Report Earnings for the last five fiscal years (in euros) Closing date 12/31/ /31/ /31/ /31/ /31/2003 Length of the fiscal year (months) CAPITAL AT END OF FISCAL YEAR Share capital 8,891, ,894, ,891, ,891, ,891, Number of shares - common 9,331,449 9,331,449 9,331,449 9,331,449 9,331,449 - with a preferred dividend Maximum number of shares to be created - through bond conversions - through subscription rights OPERATIONS AND EARNINGS Sales excluding taxes 138,039, ,995, ,325, ,913, ,659, Earnings before taxes, profit sharing, depreciation and provisions 6,730, ,185, ,201, ,294, ,857, Corporate tax (7,377,518.42) (2,225,125.50) 5,202, ,447, ,379, Employee profit sharing 254, , ,091, , , Depreciation and provisions 2,642, ,261, ,773, ,235, ,470, Net earnings 11,211, ,489, ,134, ,297, ,195, Distributed earnings (1), 8,398, ,465, ,185, ,345, ,038, EARNINGS PER SHARE Profit after tax, profit sharing, and before allowances, depreciation, provisions. Profit after tax, profit sharing, allowances, depreciation, provisions. Dividend allotted (1), PERSONNEL Average number of employees Payroll 40,295, ,925, ,703, ,204, ,191, Sums paid for employee benefits (Social security, welfare institutions, etc.) 18,138, ,790, ,417, ,179, ,143, (1) Proposal to the ordinary General Meeting ruling on the financial statements at December 31, Cegedim Reference Document 2007

158 Inventory of securities at December 31, 2007 Equity interests Companies Number of shares % stake Net inventory values in euros 1. French companies AGDF CEGEDIM RS (ex ICSF) 1 0,001% 7 AMIX ,00% ARTS & STRATEGIE ,00% ALLIADIS ,00% APSYS NET ,00% BKL CONSULTANTS ,00% 0 CBU ,00% 0 CDS ,00% CEGELEASE ,00% CEGERS ,00% CEGEDIM SRH ,00% CEGEDIM HOLDING CIS ,00% 0 CETIP ,66% EDIPHARM ,00% HOSPITALIS ,00% 0 ICOMED ,00% INCAMS ,52% MEDEXACT ,00% NETFECTIVE TECHNOLOGY ,11% PCO CEGEDIM ,00% PHARMAPOST ,00% PHARMASTOCK ,00% QUALIPHARMA ,00% RESIP ,00% RNP ,00% ROSENWALD ,84% I SANTE ,00% 0 SOFILOCA ,00% SCI ,83% THALES CEGEDIM ,00% Foreign companies CEGEDIM INC USA ,00% CEGEDIM DO BRASIL ,00% 0 CEGEDIM HOLDING GMBH ,00% CEGEDIM GMBH (Autriche) ,00% CEGEDIM POLAND 72 1,77% CEGEDIM DENDRITE LIMITED ,00% 0 IN PRACTICE SYSTEMS (Angleterre) ,00% 1 THIN (Angleterre) ,00% 0 CEGEDIM WORLD INT.SERVICES Ltd ,00% CEGEDIM HUNGARY KFT ,00% CEGEDIM TURKEY ,92% CEGEDIM HELLAS ,98% CEGEDIM ROUMANIA Srl ,00% CEGEDIM SK SRO (Slovaquie) - 100,00% CROISSANCE 2006 (Belgique) ,00% CEGEDIM Belgique ,97% BKL Pharma Consulting (Belgique) 1 0,02% 10 GERS MAGHREB (Tunisie) ,14% 0 CEGEDIM TUNISIE ,00% 0 CEGEDIM Algérie - 100,00% CEGEDIM CIS (Tchéquie) ,00% CEGEDIM CZ (Tchéquie) ,00% CEGEDIM Italie ,99% CEGEDIM TRENDS (Egypte) 28 70,00% CEGEDIM Espagne ,33% CEGEDIM Portugal ,50% Total net value of equity investments Cegedim Reference Document

159 Other long-term securities For French companies: nil For international companies: nil Marketable securities None Summary Net Asset Value (in euros) Ownership interests 487,228,423 Other long-term securities - Marketable securities - Total 487,228, List of Directors in office, terms of office and compensation Prepared prior to the General Meeting held on May 7, Mr. Jean-Claude Labrune - 19A, rue Massenet Sèvres TERM OF OFFICE COMPANIES Chairman and CEO Cegedim Permanent representative Of Cegedim on the Board of directors of Cegedim SRH Chairman of the Board of Directors CETIP S.A.S. Président Financière Cegedim - Hospitalis - Pharmapost Managing Director CBU - CEGERS - ICOMED - JCL - RNP Fixed compensation: 713,873 Director s fees: 10,500 In-kind benefit: executive car Mr. Laurent Labrune - 64, rue de Silly, Boulogne TERM OF OFFICE COMPANIES Director Cegedim - Financière Cegedim Président and CEO Cegedim SRH S.A.S. Managing Director Financière Cegedim Fixed compensation: 127,595 - Variable compensation: 78,562 Director s fees: 7,500 In-kind benefit: executive car Mrs. Aude Labrune-Marysse - 11, rue des Fontenelles Sèvres TERM OF OFFICE COMPANIES Director Cegedim - Financière Cegedim S.A.S President Rosenwald S.A.S Managing Director Financière Cegedim Fixed compensation: 79,829 - Variable compensation: 6,250 In-kind benefit: executive car Cegedim Reference Document 2007

160 GERS - Tour Franklin , quartier Boildieu, Paris La Défense Cedex Permanent representative of GERS: Mr. François Blanot - 194, rue Jean-Louis Breteau Bois-Guillaume. TERM OF OFFICE President S.A.S Managing Director Directors fees: 7,500 COMPANIES GIE GERS GERS on the Board of Directors of Cegedim Alliance Healthcare France - 222, rue des Caboeufs Gennevilliers Permanent representative of Alliance Healthcare France: Mr. Jean-Louis Mery - 194, av. de la Forêt Le Poinconnet. TERM OF OFFICE Director Chairman and CEO S.A.S President Permanent representative Directors fees: 7,500 COMPANIES Ouest Répartition S.A. Alliance Healthcare France (ex Alliance Sante Distribution) Alliance Healthcare Répartition (ex Alliance Sante) - Alliance Sante France - Sedley Participations France Alliance Healthcare France on the Boards of Directors of Cegedim - Ouest Répartition S.A. - Alphega S.A. Financière Cegedim (ex Sofimator) - 137, rue d'aguesseau, Boulogne Permanent representative of Financière Cegedim: Mr. Pierre Marucchi - 9, cour Jasmin, Paris. TERM OF OFFICE COMPANIES Director CETIP - Cegedim SRH - Financière Cegedim - Proval NTIC - Selectis Consulting Permanent representative Financière Cegedim on the Board of Directors of Cegedim Cegedim on the Board of Directors of Medexact Financière Cegedim President of Financière Cofisante Chairman of the Board of Directors AGDF Cegedim RS Chairman and CEO Proval S.A.S President CAM - CDS - Cegedim Holding CIS - Cegedim Ingenierie - Chebranmic - DRE - INCAMS S.A.S Managing Director Financière Cegedim Assistant General Manager Cegedim - Cegedim SRH Manager AMIX- Apsys NET IRIS isanté - Qualipharma Fixed compensation: 278,276- Variable compensation: 149,154 Director s fees: 10,500 In-kind benefit: executive car Cegedim Reference Document

161 Employment information (Article L paragraph 4 of the Code of Commerce) France 2007 Abroad 2007 Total 2007 Employees at December 31, 2007 Permanent 2,753 4,551 7,304 Fixed-term contracts Total Employees 2,948 5,084 8,032 Full time employees (1) 2,715 4,690 7,405 Part time employees Hires Permanent 1,027 1,438 2,465 Fixed-term contracts Total hires 1,258 1,885 3,143 Departures 1,496 1,298 2,794 Temporary employees (3) (man/days) 14,524 13,368 27,892 Absenteeism (2) (3) (man/days) 38,405 53,888 92,293 Payroll at12/31/07 (in thousands of ) 119, , ,971 Payroll taxes at 12/31/07 (in thousands of ) 51,968 27,428 79,396 Training (3) (in thousands of ) 2, ,200 (1) Number of work hours in compliance with the regulations in effect in the different countries. (2) The absenteeism shown excludes paid holidays and reduced work time (RTT), both in France and abroad. (3) Excluding information involving the personnel from the entities sold to the Tessi Group Cegedim Reference Document 2007

162 Details of the activity of the companies of the Cegedim Group whose corporate sales exceed 30 million CEGEDIM ACTIV Presentation Cegedim Activ s activities include the publishing, sales and integration of application software packages dedicated to personal insurance (Health, Pension) and associated services. These solutions cover 30 million insured people in compulsory, supplemental and pension plans. The healthcare flow management activity handles 200 million transactions and manages 5 million Vitale cards. Cegedim Activ s products are intended for all market operators, such as insurance companies, mutual companies, pension institutions and brokers. Cegedim Activ designs, integrates and hosts services connected to its Aneto and Esquif software packages, thus covering healthcare reimbursements for 15 million people. Activity during the fiscal year Cegedim Activ is recognized as a key player in the field of healthcare and pension management. Cegedim Activ absorbed AVT. This complete transfer of assets and liabilities took place on May 30, 2007, without accounting retroactivity. As a result, the Cegedim Activ balance sheet and income statement at December 31, 2007, consists, on the one hand, of the assets, liabilities and earnings of the company and, on the other, of the assets, liabilities and earnings of the company taken over, AVT. For better comparability, the financial statements which are commented below are based on a comparable scope, which means that the Soltim (ex. Cegedim Activ) 2006 financial statements are restated to include the AVT financial statements and for 2007, the Cegedim Activ financial statements are restated to include the AVT financial statements from January 1, 2007 to May 29, Sales increased from 63,209 K to 63,994 at December 31, 2007 which is an increase of approximately 1.24%. In 2007, Cegedim Activ s activity continued to grow, but only slightly. The complete transfer of assets and liabilities transaction developed a greater synergy within the company, and heavily accented the marketing force already underway. Income statement Statutory financial statements at December 31, 2007 Operating earnings came to 3,210 K compared to 6,790 K at December 31, 2006, down by 3,580 K due essentially to: The increase in Cegedim Activ s activity was accompanied by a considerable increase in sub-contracting expense of 4,184 K (up 34%) explained in part by the startup of the externalization of developments during the second half of 2007 A significant increase in wages and payroll taxes of 973 K Other operating income increased by 567 K explained in part by the increase in capitalized production for 2007 Sales showed a variation of 785 K. Cegedim Reference Document

163 The financial earnings amount to a loss of 1,499 K compared to a loss of 1,154 K in 2006, impacted by an increase in financial expenses of 345 K explained in particular by the impact of a short term loan in the form of a current account. Earnings before taxes came to 1,711 K compared to 5,635 K in Balance sheet Intangible and tangible assets continue to grow (particularly an additional capital expenditure of 2,933 K during 2007 for the Aneto software). These investments are recorded in accordance with the latest CRC Regulations concerning assets. The increase in the receivables ( 25,193 K in 2007 compared to 21,173 k in 2006) is justified by the impact of AVT s receivables following the absorption of the company. Shareholders equity was 22,955 K compared to 23,910 K, following distribution of a 2,184 K dividend in 2007, with the equity remaining stable overall. A loan for 17,900 K was taken out with Imcams to acquire AVT s shares and to improve the cash position which went from 3,069 K to 1,067 K at December 31, The tax and social liabilities show significant variation of 2,817 K resulting from the increase in social expenses due to the increase in payroll. Outlook for 2008 The personal insurance market is changing. There is an acceleration in the change in regulations. With the acquisition of Protectia in February 2008 and its Protectia software package, Cegedim Activ intends to become a force to be reckoned with in the market. Sales are projected to grow by more than 5% in Cegedim Reference Document 2007

164 ALLIADIS Presentation Alliadis is part of the Pharmacists Software business in the Cegedim Group s Healthcare professionals sector. It markets and sells the Alliance Plus software for French pharmacists. Alliadis works in close synergy with the other companies of the Cegedim Group producing and marketing software intended for French pharmacists (the Alliance Software and Data Conseil subsidiaries, in particular) and with Cegelease, which offers its clients financial leasing solutions. The following comments concern only the legal entity Alliadis, to the exclusion of the other subsidiaries. Activity during the fiscal year Alliadis' business grew in Sales increased from 42,822 K to 44,549 K, an increase of 4.0%. This increase can be broken down into: A 0.3% increase for the sale of goods activity A 9.1% increase for the "maintenance and miscellaneous products activity. The growth in sales resulting from maintenance contracts results mainly from an increase in market share (nearly 400 businesses in the Auvergne region) and the acquisition of a company on July 1st, Overall, operating income grew by 3.9% while operating expenses grew by 4.1%. Income statement Statutory financial statements at December 31, 2007 Operating earnings amounted to 7,189 K, up by 200 K (+ 2.9%), which can be explained in particular by the following combination of elements: An increase in sales: + 1,727 K, which is +4.0% An increase in payroll: K, which is +3.5% An increase in purchases of goods and other supplies of 339 K (+2.6%) as well an increase in other external purchases and expenses of 656 K (+8.8%). The other items of the income statement do not call for any particular comments. Financial earnings at December 31, 2007, amounted to a gain of 430 K compared to a profit of 1,639 K for fiscal year This change from one year to the next can be explained in particular by the following items. For financial expenses, Alliadis recorded a financial depreciation of 490 K for the partial impairment of the loan granted to its subsidiary Alliadis Europe (total loan amount at December 31, 2007 was 22,578 K). In 2006 the depreciation amounted to 3,826. Depreciation for exchange loss for 1,492 K for the current account belonging to its subsidiary, Alliadis Europe. For financial income, revenues from holdings amount to 1,919 K up 103 K and corresponding to a dividend paid by its subsidiary Alliance Software. Earnings before taxes came to 7,619 K compared to 5,350 K in Cegedim Reference Document

165 Balance sheet Alliadis granted a new loan for 170 K to its subsidiary Servilog Concept (company acquired on July 1 st, 2007). At the same time, the other loans decreased by 2,137 K compared to the previous year end. Cash increased by 364 K and the loans granted by the Cegedim Group increased by 500 K and amount to 15,500 K at the year end. Shareholders equity at December 31, 2007 was 17,212 K compared to 13,757 K in 2006 which is an increase of 3,455 K. Outlook for 2008 Alliadis projects a change in its business and earnings in line with that observed in Cegedim Reference Document 2007

166 IN PRACTICE SYSTEMS Presentation In Practice Systems (INPS) is the British subsidiary of the Cegedim Group s Physicians Software business and contributes to the earnings in the Healthcare professionals sector. Its Vision software is earning recognition as the benchmark in Windows solutions for Primary Care in the United Kingdom. INPS is recognized by the market s main Local Service Providers. The company is continuing to develop its solutions in order to comply with the recommendations of the governmental program of the National Health Service. Activity during the fiscal year In 2007, the company s activity stayed relatively stable compared to the previous year, with sales amounting to 26,338 K at December 31, 2007 compared to 26,471 K at December 31, 2006, a very slight decrease. Income statement Statutory financial statements at December 31, 2007 Earnings were 4,178 K at December 31, 2007 compared to 3,775 K at December 31, In spite of a very slight decrease in sales for 133 K, the earnings on operations increased 403 K and are essentially explained by tight cost control, specifically: A decrease in maintenance and repair expenses for K A significant decrease in purchase of goods for K An increase in payroll and benefit-related expenses for 356 K resulting from an increase in the average number of employees An increase in depreciation and impairment of assets for 52 K The other operating expenses increased by 201 K. Financial earnings for the fiscal year are a gain (+ 680 K), a combination of financial income in the amount of 695 K and interest expenses amounting to 14 K. Given the preceding items, earnings before interest and taxes came to 4,859 K. Balance sheet In Practice System s shareholders equity amounted to 21,594 K at December 31, 2007, an increase of 4,859iK for the fiscal year. The total amount of loans granted to various subsidiaries at the end of December 2007 was 21,762 K. Outlook for 2008 Continuing its excellent performances of previous fiscal years, activity should progress with an increase in sales and earnings on operations for 2008 when compared with 2007 and an operating margin always over 10%. Cegedim Reference Document

167 CEGELEASE Presentation Cegelease is a financial leasing company that offers financing options for pharmacies, primarily for their computer equipment (software packages, hardware and maintenance). Since 2005, the financing solutions have also covered pharmacy fixtures (sign, cross, automatic devices, furniture) with the Pharmalease brand and since 2006 the financing solutions have spread to other medical sectors under the Médilease brand. Activity during the fiscal year In 2007, Cegelease s activity continued its growth. Sales increased from 40,451 K to 59,420 K, an increase of approximately 46.9%. The activity s growth continues to follow the development of the pharmacist computerization market and the activity of the Pharmalease and Médilease brands in the medical sector other than Pharmacy, but the strong increase in sales is also due to a strong increase in the assignment of contracts to financial partners. We must also note an overall increase in operating income of 41.3% versus an increase in operating expenses of 43.9%. Income statement Statutory financial statements at December 31, 2007 Operating earnings amounted to 4,272 K or an increase of 466 K (+ 12.2%) resulting essentially from: A 18,969 K increase in sales, as well as a sharp increase in disposals of fixed assets totaling 13,142 K An increase in operating expenses of 18,513 K An increase in Depreciation on fixed assets for 4,634 K. The increase in depreciation follows the changes in the Fixed assets item (in direct relation to Cegelease s activity). Purchases of goods, because of the variation in inventory, went up sharply (108%) resulting from the sharp increase in contract assignment activity (up 110%) mainly from the Pharmalease brand which involves financing of automatic devices, fixtures, signs and heavy equipment, but also from other brands such as Cegelease, Medilease and Cofidata, and are for the main part, immediately assigned to financial institutions, in order to transfer the financial risk over the term of the contract. The other expense items show a few variations individually but are stable overall in 2007, excluding the expenses resulting from the sale of Ixis with an amount of 351 K for fees and 1,236 K for insurance premiums for Ixis. The other income items also show a few variations individually but are stable overall in The financial loss went up by 858 K because of the interest paid on the securitization for Ixis obtained in April 2007 ( 71 M). Earnings before taxes amounted to 1,657 K compared to 2,048 K in 2006, which was down by 391 K Cegedim Reference Document 2007

168 Balance sheet Under assets, the tangible assets rose by 15,124 K in 2007 including 37,961 K in acquisitions and 22,837 K in disposals, an increase that is directly related to Cegelease s activity (financial leases). Inventories of goods grew sharply to 2,088 K in 2007 compared to 1,290 K in 2006, corresponding to contracts awaiting assignment to financial institutions, whose installation was not completed on the closing date. Cegelease s cash position is negative (- 3,328 K) in 2007 compared to available cash of 260 K in 2006, as a result of the accelerated repayment of loans from banks and the CWISL current account during the first half of 2007 and also as a result of the sharp increase in tangible fixed assets. Receivables amounted to 3,456 K in 2007 compared to 2,245 K in 2006, which is an increase of 1,211 K resulting from the increase in contracts assigned to banks. The other items show insignificant changes. Under liabilities, the financial borrowing and loans decreased by 41,056 K resulting from the securitization of Ixis in April Accounts payable were up 575 K primarily due to supplier billings for projects that could not finalized on December 31, 2007 because installation at the client s facilities was not complete. Outlook for 2008 In 2008, Cegelease will pursue its development by relying on its existing brands of financial leases applied to projects related to computerizing pharmacies and physicians practices. Cegedim Reference Document

169 DENDRITE INTERNATIONAL INC. (DIL) Presentation Since its acquisition on May 9, 2007, Dendrite International Inc. has been part of Cegedim Group s "CRM and strategic data" sector. It is a major leader for supplying solutions to the pharmaceutical and life science industry in the fields of sales, marketing and conformance studies. Dendrite International Inc. carries out its activities in the United States. It is head of the Dendrite Group with activities covering North America, Asia-Pacific and Europe. The following comments only concern the legal entity Dendrite International Inc. USA. Activity during the fiscal year The description of Dendrite International Inc. s activity only covers the period between May 9, 2007 and December 31, Income statement Statutory financial statements at December 31, 2007 Sales for the period were 81,257 K. They consisted essentially of revenues resulting from SFE (Sales Force Effectiveness) activities: Sales force optimization services) and database activities. Operating earnings amounted to 27,421 K. The savings resulting from the restructuring plan implemented the previous fiscal year (Operating effectiveness) bore fruit with a reduction in employees and various reorganizations, to which is added the savings resulting from no longer being listed on the NASDAQ. Payroll remains one of the most significant expenses at 31,479 and depreciation on fixed assets amounts to 6,539 K. Financial income at December 31, 2007 was 371 K. Financial income was 461 K for the period and financial expenses, mainly interest and related expenses were 90 K. For the period, earnings before taxes came to 27,792 K. Balance sheet At December 31, 2007, the main items making up the assets, in net value, are the goodwill on acquisition for 347,187 K, concessions, patents and brands for 103,512 K, receivables for 83,611 K and cash and cash equivalents for 16,163 K. Shareholders equity at December 31, 2007 was 258,212 K, provisions for risks and expenses were 28,426 K and payables were 58,782 K. During Cegedim Group s acquisition of the Dendrite Group, Dendrite International Inc. took out new loans for an amount of 271,741 K at December 31, Outlook for 2008 Dendrite International Inc. s complementarity with the other entities in Cegedim Group s CRM and strategic data sector should be confirmed during the 2008 fiscal year and will enable Dendrite International Inc. to retain its strong position in the United States. A reduction in earnings on operations is nevertheless projected because of the loss of a customer, Pfizer for outsourced services. This does not alter the performances of the other subsidiaries of the previous Dendrite consolidation scope Cegedim Reference Document 2007

170 Report from the Chairman of the Board of Directors concerning the conditions for preparing and organizing the Board s work, as well as the internal control procedures set up by the Company (Article L of the Code of Commerce) Introduction In accordance with the provisions of article L of the Code of Commerce, as amended by financial security law No of August 1, 2003, the purpose of this report is to report on: Conditions for preparing and organizing the work of the Board of Directors Any limitations made by the Board of Directors to the powers of the General Manager and the Managing Director The internal control procedures established in the Cegedim Group. This report was prepared on the basis of reports and meetings led by the General Management with all of the bodies involved in the Group s internal control mentioned in the remainder of this document. Corporate governance and operation of the Board of Directors Composition of the Board of Directors We remind you that your Board of Directors is composed of six members. The list of Directors of Cegedim S.A. including the offices held in other companies is appended to the Management Report. Frequency of meetings Article 13 of the bylaws of Cegedim S.A. states that the Board of Directors meets as often as the Company s interests dictate. Thus during the past fiscal year, your Board of Directors met eight times. The schedule of meetings of the Board of Directors was as follows: Date Agenda February 14, 2007 Authorization of use of the Cegedim company name by the Indian subsidiary Update on real estate transaction at , rue d'aguesseau, Boulogne- Billancourt. March 12, 2007 Approval of the financial statements for the fiscal year ended December 31, 2006 Approval of the consolidated financial statements for the fiscal year ended December 31, 2006 Decisions to be made to prepare and call the ordinary General Meeting to approve the financial statements for the 2006 fiscal year Approval of the provisional financial statements. Miscellaneous business March 26, 2007 Write-off of receivables Authorization of a loan subscription Authorization for hypothecation of shares. April 20, 2007 Financing of the Dendrite transaction Egyptian subsidiary Approval and authorization for the signature of a comfort letter issued by Cegedim Reference Document

171 Cegedim for the benefit of IXIS Corporate & Investment Bank. May 7, 2007 Decisions to be made about the Dogwood Enterprises Inc. subsidiary Decisions to be made about the merger plan between Dogwood Enterprises Inc. and Dendrite International Inc. Powers to be delegated. July 11, 2007 Nomination of a Company representative to the Egyptian subsidiary. October 16, 2007 Approval of the statutory and consolidated financial statements for the first six months of 2007 Examination of the budgeted financial statements for the second half of Examination and approval of the principle and modalities of the draft plan for the allocation of free existing Cegedim shares to Cegedim Group directors and/or members of salaried personnel. Examination and approval of the principle and modalities of the project for the implementation of a repurchase plan by the Company of its own shares Calling of the extraordinary Shareholders Meeting, establishing of the Board of Directors Report and the text of the resolutions to be submitted to it. December 27, 2007 Security to be given to American subsidiaries Authorization of agreements mentioned in articles L and following of the Code of Commerce. Project for the distribution of free shares: preparation of the extraordinary Shareholders Meeting. Convening of Directors Directors were convened by fax and in compliance with article 13 of the Cegedim S.A. bylaws. In accordance with article L of the Code of Commerce, the Auditors were convened to the Board of Directors meeting during which the annual and interim financial statements are examined and approved. Information provided to Directors All documents and information necessary for the Directors to perform their duties are sent to them prior to each meeting of the Board of Directors. At any time of the year, the Board of Directors may perform the checks and audits it deems advisable. At that time, each Director may request the documents necessary to perform his mission from the Chairman of the Board of Directors. Meeting location Meetings of the Board of Directors are held at the Company s corporate headquarters Cegedim Reference Document 2007

172 Meeting minutes Minutes of meetings of the Board of Directors are drawn up at the end of each meeting and sent to the Directors. Directors compensation The compensation paid to Directors is stipulated in the list of Directors of Cegedim S.A. appended to the Management Report. Limitation of the powers of the Chairman and CEO and of the Managing Director We inform you that the Board of Directors has not imposed any limitations on the powers of Jean-Claude Labrune, your Chairman and CEO or on those of Pierre Marucchi, Managing Director. Internal control procedures Purpose of the internal control procedures in the Cegedim Group The purpose of internal control is to provide a reasonable assurance that the Company s priorities will be adhered to and that the figures published are reliable. Its effectiveness relies on the behavior of the employees responsible, without any systematic guarantee that these objectives will be met. On the one hand, it makes sure that the management actions or the performance of operations, as well employee behavior are consistent with the framework defined by the laws and regulations applicable, as well as the Company s values, standards and internal rules. On the other hand, it ensures that the accounting and financial information complies with the standards in force. The internal control procedures in force in the Cegedim Group have the following purposes: Coordination of its activities Cegedim s growth relies particularly on its ability to know its clients needs and to satisfy them by combining a large number of industry skills. From the standpoint of internal control, the success of this model requires the harmonization of management actions and employee behavior. It means that these actions and this behavior must be consistent with the focuses given to the Group s activities by its corporate bodies, by the law and regulations in force and by the Group s internal standards. Control and transparency of its accounting and financial information The internal control procedures govern the development and communication of the Group s accounting and financial information. This information is established in order to guarantee its availability, integrity, conformity and auditability. Support for its growth The Cegedim Group s international expansion, particularly through external growth, relies on its ability to incorporate new activities. Here, the measures taken by Cegedim seek to accelerate the incorporation of new activities, control the risks inherent in growth operations and track its performance. The acquisition of Dendrite International Inc. in May 2007 enabled Cegedim to double its size in its core business activities. This major step in the Group s development requires the spending of considerable effort to make the Cegedim Reference Document

173 consolidation of the new activities successful. Conscious of what was at stake, the Group's Executive Management decided to create an Operational Excellence unit (Opex) in charge of optimizing the organization and information circuits both internally as well as externally, but also to reinforce the Group's customer oriented culture, in order to generate savings through synergy, rationalization of procedures and optimization of team productivity. Chaired by an employee with more than 10 years of experience within the Group, particularly in the role of Director of Human Resources, then Director of international CRM activities, Opex is able to propose improvements to internal control and financial control, by systematically looking at each business unit individually. The security of its information processing operations Leader in the sector of technologies and services tied to medical information, the Cegedim Group s priority is to provide its clients and partners with complete satisfaction concerning data security. The acquisition of cutting edge skills The Cegedim Group considers the training of its teams to be a key factor of success, making it possible to ensure client satisfaction and employee motivation. In 2004, Cegedim was one of the first companies to implement the individual right to training. The general training policy at Cegedim consists primarily in: Continuously adapting the skills of its research and development teams, and Assisting its employees in acquiring new skills necessary for their jobs. Organization of the Management bodies that play a role in internal control Cegedim s internal control system is characterized by a high level of interaction between the Board of Directors, the General Management and the Activity Divisions thus encouraging the transparency of the strategies, risks and actions implemented in the Group. Cegedim s General Management has central management and control bodies that include the Financial Division, the Accounting Division, the Management Control Division, the Human Resources Division, the Legal Division, the General Secretariat, the IT Division and the Quality Division. Consistently since 2006, the Group has desired to strengthen its teams dedicated to controlling and coordinating international operations. Reporting to the General Management, their main mission is to formalize, then to establish procedures that are common to the Group s subsidiaries, to guarantee the uniformity of the work methods. The network of financial controllers, by country or region, continues to be reinforced, particularly in 2007 with the consolidation of the Dendrite teams. They are responsible for applying Headquarter policies at the local level, for ensuring local financial control of operations as part of routine management or during the operational revamping processes decided on by Headquarters. In their respective fields, the mission of these management and control bodies is to regulate the Group s operation and, at the same time, put their specialized skills to use in carrying out operations Cegedim Reference Document 2007

174 Key elements of internal control related to developing financial and accounting information In 2007, the Group continued its work to harmonize and to optimize its information and internal control procedures in compliance with the financial security law. Development of the Group s financial statements Centralized accounting of the companies of the Cegedim Group The Cegedim Accounting Division prepares the statutory financial statements for the subsidiaries in the French scope and oversees the process for the preparation of the consolidated financial statements. For the newly acquired companies and foreign subsidiaries, the Accounting Department established a standard procedure for passing up consolidation documents. At the same time, the Management Control Division sends up their key financial and operational data on a monthly basis. The two Divisions routinely check the consistency of their data jointly. The creation in 2005 of a department dedicated specifically to international consolidation allowed the Company to help make the financial information coming from foreign subsidiaries reliable while at the same time adapting to the new accounting regulations. Furthermore, this centralized consolidation process made it possible to considerably reduce the time necessary to pass up international information. Control and enhancement of financial and accounting information by Management Control The data supplied by the Accounting Department is systematically reconciled with the work done by the Management Control Department, whether this involves regular analytical monitoring of the activities, budgetary control or inspection reports. This information forms the basis for the operating reports developed by Management Control allowing regular tracking of key indicators. IT tools used to develop financial and accounting information Cegedim implements a policy aimed at upgrading its IT tools to ensure optimum availability, integrity, conformity and auditability of its financial and accounting data. In order to ensure the necessary internal consistency as well as to meet the Group s steering needs, the responsibility for the implementation of new tools (which will be operational during 2008) was given to the Managing Director, seconded by a project manager ensuring the interface with the Accounting Department and the Management Control Department. Key elements of the legal and operational control exercised by the parent company over the subsidiaries Control of commitments The General Secretariat of the Group s Legal Department handles the central supervision of authorizations and delegations and makes sure, when they are created, that they are limited in accordance with the Group s internal rules regarding commitments. Control of the Group s legal activity The Cegedim Group s procedures require that the Legal Department be consulted prior to signing contracts with third parties, depending on their purpose, declarations and the commitments they contain and, where relevant, the Cegedim Reference Document

175 transnational nature of the operations they govern. The Legal Department also centralizes information related to certain key contracts. Control of internal security Two specialized coordinators, both of whom report to the General Management, implement the internal security policy of the Cegedim Group: the Head of IT Security and the Head of Physical Security; both rely on a network of local correspondents. The internal security policy involves the Department of Human Resources through awareness raising and the commitments of all the Group s employees when hired, and then at regular intervals. Concerning the internal security of the information systems, Cegedim has pooled the IT resources available to its subsidiaries and their clients. The Group has also established a centralized internal security policy for its information system and for those of all its departments and subsidiaries. The internal security policy for the information system covers in particular: Employee security (reducing the risks of human error, theft, fraud or abusive use of the infrastructures) Physical security (controlling access, damage and disruptions tied to the Group s assets) IT access security (controlling access to information) Information security (ensuring an appropriate level of information protection) Systems administration security (ensuring that the information processing infrastructures operate correctly and reliably) The security of IT developments (incorporating security in the developments and ensuring the secured execution of support activities) Crisis prevention, detection and management. This policy is actively facilitated by the General Management, which, since 2005, has strengthened the team dedicated to security in the Information Systems Department. This team performs security audits of the Group s subsidiaries, particularly the foreign subsidiaries. The Cegedim Group s main pharmaceutical company clients have adopted the PDA (Parenteral Drug Association) standards, which incorporate strict requirements concerning the auditing and control of corporate information systems, (purpose of the COBIT standards, established by the Information Systems Audit and Control Association and the recommendations of the COSO, Committee Of Sponsoring Organizations). The PDA audit guide has thus naturally been adopted by the Cegedim Group. With the consolidation of Dendrite in 2007, the Group again reinforced the security of its IT system, benefiting from a worldwide infrastructure, with hosting and production capabilities on 5 continents. Control of operations management Control of the Group s operations management covers four areas: The annual budget development process Monthly management reporting and presentation of annual forecasts Quarterly business reporting The ad hoc inspection mandates performed for the Group s departments and subsidiaries. These procedures concern all of the Group s departments and subsidiaries. Furthermore, when new acquisitions are made, a standardized consolidation process ensures that the information necessary for management and management control in accordance with the standards in force is passed back up the line as quickly as possible Cegedim Reference Document 2007

176 The annual budget development process Each year, the Activity Directors present the annual budget for the activities placed under their responsibility to the General Management. To prepare these budgets, Management Control is responsible for providing all assistance necessary to the operational managers and for guiding their work in order to ensure overall consistency and to record the key assumptions in order to track them during the year. Monthly management reporting and presentation of annual forecasts Management Control is responsible for preparing the monthly reporting for all of the Group s subsidiaries, including their annual forecasts and their budget tracking. Routinely presented to the Group s General Management, this reporting makes it possible to identify the basic performance trends for each entity and to chart any corrective measures to be taken. Quarterly business reporting Every quarter, each Activities Director is responsible for providing the General Management with information concerning the management activities relative to the scope of activities for which he is responsible. This reporting concerns the commercial activity, products and services, personnel, organization and capital expenditure. Its essential purpose is to identify the risks that could affect the Group s earnings in each of these areas. The crosscompany nature of this business reporting helps identify market risks, the status of competition and helps identify growth opportunities (external growth, strategic growth axes) and to strengthen the Group s synergies. Ad hoc inspections Inspections decided by the General Management are conducted routinely. Other control bodies help to determine the selection and content of these inspections and are generally involved in facilitating their execution. The scope of these inspections covers all area relating to internal control Objectives Make Dendrite s consolidation successful on the organizational and internal control levels as well as customer service and satisfaction. Continue the optimization of internal procedures by acting on the conclusions of the Operational Excellence Unit Implement new integrated and homogenous financial management tools within the Group, ensuring a secure, systematic and consistent flow of information to simultaneously serve the management and statutory or consolidated needs. Drawn up in Boulogne-Billancourt on April 18, 2008 Jean-Claude LABRUNE Chairman and CEO Cegedim S.A. Cegedim Reference Document

177 26.3 Auditors reports Auditors General Report Annual financial statements for the fiscal year ending December 31, 2007 Cf. chapter of this Reference Document Auditors Special Report on Cegedim S.A. s regulated agreements Fiscal year from January 1 to December 31, 2007 Ladies and Gentlemen, As your Company s Auditors, we present to you our report concerning regulated agreements and commitments. 1. Agreements and commitments authorized during the fiscal year Pursuant to articles L , L and L of the Code of Commerce, we have been advised of the agreements and commitments that are subject to the prior authorization by your Board of Directors. It is not our responsibility to determine whether other agreements and commitments exist but to indicate to you, based on the information provided to us, the characteristics and essential terms and conditions of those of which we have been advised. We are not responsible for determining whether they are advisable or justified. You are responsible, in accordance with the terms of article R of the Code of Commerce, for assessing the interest in signing these agreements and commitments prior to their approval. We performed our work in accordance with the professional standards applicable in France; these standards require that we take the appropriate measures to make sure that the information provided to us is consistent with the base documents from which it is taken. Board of Directors meeting held on February 14, 2007 Director involved: Nature and purpose: Mr. Jean-Claude Labrune, Chairman of Cegedim S.A. and Manager of SCI at 114 rue d Aguesseau Bureau. Signing of a lease for future completion of an office building located at 114, rue d Aguesseau in Boulogne from the SCI at 114, rue d Aguesseau Bureau, Cegedim S.A. being in charge of the furnishing and technical work for the premises. Board of Directors meeting held on March 26, 2007 Director involved: Nature and purpose: Director involved: Nature and purpose: Mr. Pierre Marucchi, permanent representative of Financière Cegedim on the Board of Directors of Cegedim S.A. and Managing Director and Director of Docubase Systems Inc. Debt write-off in favor of its subsidiary Docubase Systems Inc. in the amount of 323,000, entered in a current account. Cegedim S.A. represented by Mr. Jean-Claude Labrune and Mr. Pierre Marucchi, President of Declaratis. Debt write-off in favor of its subsidiary Declaratis in the amount of 505,004, entered in a current account Cegedim Reference Document 2007

178 Board of Directors meeting held on December 27, 2007 Director involved: Nature and purpose: Mr. Jean-Claude Labrune, Chairman and CEO of Cegedim S.A. and President of Financière Cegedim and Mr. Pierre Marucchi, Managing Director of Cegedim S.A. and General Director of Financière Cegedim. Lease to Cegedim by Financière Cegedim starting January 1 st, 2007 of the following premises: 86 to 94, avenue André Morizet in Boulogne-Billancourt, for a rental charge (excluding expenses) of 205, for , impasse Latécoère in Vélizy-Villacoublay, for a rental charge (excluding expenses) of 259, for , rue d'aguesseau in Boulogne-Billancourt, for a rental charge (excluding expenses) of 30,689 for , rue de l'ancienne Mairie in Boulogne-Billancourt, for a rental charge (excluding expenses) of 133, for Agreements and commitments approved during previous fiscal years whose performance continued during the fiscal year Additionally, pursuant to the decree of Code of Commerce, we have been informed that the performance of the following agreements and commitments, approved during prior fiscal years, continued during the last fiscal year. With SCI MAG Nature and purpose: Leasing of premises at , rue d'aguesseau, Boulogne-Billancourt. Terms Rent paid in 2007 (excluding expenses): 25, With Financière Cegedim Premises and parking spaces at , rue d'aguesseau Nature and purpose: Leasing of premises and parking spaces at , rue d'aguesseau, Boulogne- Billancourt. Terms Rent paid in 2007 (excluding expenses): 2,743,617. Premises and parking spaces at , rue d'aguesseau Nature and purpose: Leasing of parking spaces at , rue d'aguesseau, Boulogne-Billancourt. Terms Rent paid in 2007 (excluding expenses): 5, Premises and parking spaces at 17, rue de l Ancienne Mairie Nature and purpose: Leasing of premises and parking spaces at 17, rue de l'ancienne Mairie, Boulogne- Billancourt. Terms Rent paid in 2007 (excluding expenses): 1,097, Cegedim Reference Document

179 Premises at Longjumeau Nature and purpose: Leasing of premises in Longjumeau. Terms Rent paid in 2007 (excluding expenses): 80,000 Service contracts Nature and purpose: Contract for strategic consulting, human resources, marketing, finance, budget and internal information system services. Terms Services paid for in 2007: 1,970,000 With Ms. Aude Labrune and Mr. Laurent Labrune Nature and purpose: Temporary assignment to Cegedim S.A. of the usufruct for the shares of the SCI at 114 Rue d Aguesseau Bureau, under the following conditions, subject to the approval of Cegedim S.A. as a new partner: 198 stripped shares that belong to Aude Labrune and Laurent Labrune in equal amounts, Term of the assignment of the usufruct: 18 years beginning on September 20, 2006 Acquisition price: 920. Drawn up in Paris and Courbevoie, on April 23, 2008 The Auditors Grant Thornton 100 rue de Courcelles Paris cedex 17 TEL: +33 (0) Mazars & Guérard 61 rue Henri Regnault Courbevoie TEL: +33 (0) Michel Cohen Auditor Jean-Paul Stevenard Auditor Auditors report on the consolidated financial statements Fiscal year ended December 31, 2007 Cf. chapter of this Reference Document Cegedim Reference Document 2007

180 Auditors report prepared pursuant to article L of the Code of Commerce, on the report from the Chairman of the Cegedim s Board of Directors concerning the internal control procedures related to developing and handling accounting and financial information Fiscal year ended December 31, 2007 Ladies and Gentlemen, As Auditors of Cegedim and pursuant to the provisions of article L of the Code of Commerce, we present to you our report on the report prepared by the Chairman of your Board of Directors in accordance with the provisions of article L of the Code of Commerce for the fiscal year ended December 31, The Chairman of the Board of Directors must include in his report information on the manner in which the work of the Board of Directors and the internal oversight procedures implemented by the Company are prepared and organized. It is our responsibility to indicate to you any comments we may have concerning the information provided in the report by the Chairman of the Board of Directors concerning the internal control procedures related to developing and handling accounting and financial information. We performed our procedures in accordance with professional standards applicable in France. These require us to perform procedures to assess the fairness of the information set out in the report by the Chairman of the Board of Directors on the internal control procedures relating to the preparation and processing of financial and accounting information. These measures consist in: Examining the internal control procedures regarding the preparation and handling of the accounting and financial information underlying the information presented in the report by the Chairman of the Board of Directors as well as existing documentation Examining the work done to prepare the existing information and documentation Determine if any major deficiencies in internal control regarding the preparation and handling of accounting and financial information that we noted during the course of our audit are the subject of appropriate information in the report by the Chairman of the Board of Directors. Based on this work, we have no comment to make regarding the information concerning the Company s internal control procedures related to developing and handling the accounting and financial information contained in the report of the Chairman of the Board of Directors prepared pursuant to the provisions of article L of the Code of Commerce. Drawn up in Paris and Courbevoie, on April 23, 2008 The Auditors Grant Thornton 100 rue de Courcelles Paris cedex 17 TEL: +33 (0) Mazars & Guérard 61 rue Henri Regnault Courbevoie TEL: +33 (0) Michel Cohen Auditor Jean-Paul Stevenard Auditor Cegedim Reference Document

181 26.4 Text of the resolutions proposed to the annual ordinary General Meeting held on May 7, 2008 Resolution under the authority of the Ordinary General Meeting FIRST RESOLUTION The General Meeting, after having examined the management report from the Board of Directors and the Auditors general report, approves the annual financial statements for the fiscal year ended December 31, 2007, showing a profit of 11,211, It also approves the operations reflected in these financial statements or summarized in these reports. As a result, the General Meeting gives the Directors full and unreserved discharge for the performance of their responsibilities for this fiscal year. The General Meeting approves the non tax-deductible expenses mentioned in article 39-4 of the General Tax Code totaling 458,304.26, as well as the corresponding tax amounting to 157, SECOND RESOLUTION The General Meeting decides to allocate the profit for the fiscal year amounting to 11,211, as follows: As dividends, the sum of 8,398, The balance which is a sum of 2,812, to the other reserves account. Amount - Payment - Tax treatment of the dividend The unit dividend will be 0.90 and will be paid at the corporate headquarters as from May 21, For individuals who are tax residents of France, this dividend is eligible for the exemption set forth in No. 2 of article of the General Tax Code. Dividend and holding by the Company of treasury shares If, when the dividend is paid, the Company holds certain treasury shares, the distributable profit corresponding to the dividend not paid because the company holds these shares will be allocated to the carry forward account. Reminder of the dividends distributed The General Meeting notes that the amounts distributed as dividends for the three previous fiscal years were as follows: Deductible income allowance Fiscal Number of Non-deductible Dividends Other income years shares income allowance Per share Total distributed ,331, ,345, ,331, ,185, ,331, ,465, Cegedim Reference Document 2007

182 THIRD RESOLUTION The General Meeting, after having heard the Auditors reports on the consolidated financial statements for the previous fiscal year, approves these financial statements at December 31, 2007 as well as the operations reflected in them or summarized in the report on the Group s management. FOURTH RESOLUTION The General Meeting, after having heard the Auditors special report on the agreements coming under articles L and following of the Code of Commerce, approves the findings of this report and the agreements mentioned in it. FIFTH RESOLUTION The General Meeting sets the amount of Directors fees to be distributed among the Directors for the fiscal year in progress at 45, SIXTH RESOLUTION The General Meeting, having duly noted the Report from the Board of Directors and pursuant to Article L and following of the Code of Commerce authorizes the Board of Directors to purchase Company shares. The purchase of shares, which cannot represent more than 10% of the Company s share capital, can be carried out at any time and by any means on the market, off-market, over the counter or by the use of optional mechanisms, by any third party acting on the company s behalf, including an investment service provider intervening on the Company s shares, under a liquidity contract in compliance with a Code of Ethics recognized by the Autorité des Marchés Financiers, in accordance with the terms of the last paragraph in article L in the Code of Commerce. This authorization would permit the allocation of Company shares to Cegedim Group corporate officers and salaried employees in accordance with articles L to L of the Code of Commerce. The Company shall, in compliance with legal provisions, have permanent reserves, other than the legal reserve, in an amount at least equal to the value of all of the treasury shares it holds. The maximum unitary purchase price is fixed at 100 per share. This authorization is given for a period of eighteen (18) months, ending on November 6, It cancels and replaces the one granted by the Ordinary and Extraordinary General Shareholder meeting held February 22, The General Meeting gives all powers to the Board of Directors, with the option of delegation, to implement this authorization, to give any stock market order, sign any agreements, including an AFEI liquidity contract, carry out any formalities and declarations to all organizations and, generally, do all that is necessary to execute the decisions which were made by it within the framework of this authorization. Resolutions under the authority of the Extraordinary General Meeting SEVENTH RESOLUTION The General Meeting, after having heard the Board of Directors' Report and noted that the capital was completely paid up, decided to grant the Board of Directors, in accordance with the provisions of article L of the Code of Commerce, all powers necessary to carry out one or more capital increases, either immediately or in the Cegedim Reference Document

183 future, within a maximum of 26 months from this meeting, limited to a maximum total cash amount of 3,811,200, with maintenance and/or elimination of the shareholders preemptive subscription right. By creation and issuing, with or without share premiums, of common shares By issuing of complex investment securities, granting the right to subscribe to Company shares, including any free allocation of investment securities to shareholders. For this and within these limits, the Board of Directors has full powers to decide and carry out the increase(s) in capital that they deem appropriate and to specifically set: The terms for the issue of the new capital shares, to be issued immediately or in the future, and specifically the subscription price Ascertain the execution of these capital increases Proceed with the resulting modifications to the company bylaws. This delegation of authority also includes, within the framework of an increase in capital with maintenance of shareholders' preemptive subscription rights, the option for the Board of Directors to institute, if necessary, additional subscription rights for new capital shares that were not subscribed to on a preemptive basis, which will be attributed to holders of subscription rights who have subscribed to a number of shares higher than that which they could have subscribed to under the initial allocation. This will be applied proportionally to the number of their subscription rights and within the limits of their requests. Non-subscribed shares can be distributed completely or in part by the Board of Directors to the persons of its choice. They can also be offered to the public. The Board of Directors may limit the capital increase amount to the equity subscribed for, provided that subscriptions are for at least two-thirds of the capital increase. The General Meeting decides, in addition, that the number of shares to be issued for an increase in capital that may be decided by the Board of Directors under this delegation may be increased within thirty days of the subscription closing date to meet any additional share requests. This increase in the number of shares to be issued may not exceed 15% of the initial issue, however. Additional subscriptions will be carried out at the same price as the initial subscriptions. The Board of Directors may, within the legal limits, delegate to the Chief Executive Officer or, in agreement with the latter, to the Deputy Chief Executive Officer, the authority granted to it pursuant to this resolution. EIGHTH RESOLUTION The General Meeting, after having heard the Board of Directors' Report, decides that the general delegation of authority granted in the previous resolution includes the authorization for the Board of Directors to decide to maintain or eliminate the shareholders preemptive subscription right to increases in capital that may be decided upon by the Board of Directors resulting from the said delegation. If this delegation is used by the Board of Directors and the shareholders preemptive subscription right is eliminated and because of the terms of the Board of Directors Report and the Special Auditor s Report, the issue price for the new capital shares shall be set according to legal provisions and the time frame for the general delegation of authority granted under the first resolution shall be reduced from 26 to 18 months. If this delegation is used by the Board of Directors and the shareholders preemptive subscription right is eliminated, the General Meeting authorizes the Board of Directors to institute, if necessary, a priority period for shareholders to subscribe. A special Auditors' Report, containing the regulatory disclosures provided for, will be prepared as soon as the share issue with elimination of the shareholders preemptive subscription right is carried out Cegedim Reference Document 2007

184 NINTH RESOLUTION The Extraordinary General Meeting, after having heard the Board of Directors Report, decides, in application of the provisions of article L of the Code of Commerce, to reserve for Company employees an increase in share capital in cash under the conditions provided for in Article L of the Code of Commerce. If the present resolution is adopted, the General Meeting decides: That the Board of Directors will have a maximum of 26 months to implement a company savings plan under the conditions provided for in article L of the Labor Code. To authorize the Board of Directors to proceed, within 26 months effective immediately, with an increase in capital for a cash amount not exceeding 3% of the capital which will be reserved for employees joining the said plan and carried out in compliance with the provisions of article L.443-5, paragraph 3 of the Labor Code; consequently, this authorization entails the waiver by the shareholders of their preemptive subscription right. TENTH RESOLUTION In accordance with the provisions of article L , paragraph 2 in the Code of Commerce, the general delegations of authority granted in the resolutions above nullify, effective immediately, any previous delegations having the same subject. ELEVENTH RESOLUTION The Board of Directors must answer to the General Meeting for the use it will have made of the delegations it has been granted by preparing a report, in addition to the annual general report on Company management, bearing the descriptions required by the regulation in effect as well as a summary table of the delegations which are still valid which it has at its disposal and any use that was made thereof. This report should accompany the management report or be appended to it. TWELFTH RESOLUTION The General Meeting gives all powers to the bearer of an original or a copy or excerpt of the minutes of this meeting to accomplish all legal formalities. Cegedim Reference Document

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