AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

Report of the Board of Directors on corporate governance and internal control

Production of accounting and financial information

Organization of the accounting information system All Axway Group companies prepare complete quarterly financial statements on which the Company and the Axway Group base their published quarterly sales figures and interim financial statements. All of these companies are fully consolidated. Monthly cash flow forecasts and financial statements that include operating profit are prepared for all Group companies. The application of rules is monitored continuously by the Finance Department (Management Audit), particularly regarding the application of revenue recognition rules and project valuation. The accounting methods and principles used are those presented in the notes to the consolidated financial statements. Any changes are presented to the Audit Committee. b. Preparation of the reported accounting and financial information Reconciliation of accounting data with the internal backend All of the Business Units prepare a monthly budget, a monthly operating statement and budget forecasts that are revised monthly. These procedures are designed to present the reality of operations and are based upon simple management rules that provide a clear view of performance. The budget process is the opportunity to apply the strategy approved by the Executive Committee (ExCom), adapt the organization to developments in business segments, market demand and competition, and assign quantitative and qualitative objectives to all entities. Budgets, including detailed monthly operating forecasts, are prepared by each unit. A monthly operating statement is prepared by each of the Business Units. The third component of the back-end is a revised operating statement prepared each month. This statement includes the results of the previous month and a revised forecast for the remaining months of the current year. All of these documents are combined with numerous management indicators: concerning the economy, invoicing and receipts. The results derived from the analytical backend are verified by accountants reporting to the Chief Financial Officer, who also reconcile these data with the quarterly accounting results. Revenue is reconciled on a monthly basis.

a. Coordination of the accounting and financial function Organization of the accounting and financial function Limited number of accounting entities As indicated above, the legal entities, and consequently the accounting entities, are limited (26 entities) (see “Simplified Group structure at 31ǾDecember 2017 – List of main subsidiaries”: ChapterǾ1 SectionǾ7) which provides operational savings and limits operating risks. Centralization of the accounting and financial function As for most functions, the financial and accounting function is predominantly centralized within the Company. Local teams are of adequate size to best serve their role as correspondents within the subsidiaries. The Chief Financial Officer closely supervises his teams’ activities, in particular through weekly and monthly steering meetings. The responsibilities of the Finance Department mainly involve maintaining the parent company financial statements of the Company’s subsidiaries and preparing the consolidated financial statements, management audits, tax issues, sales administration, financing and cash accounting. ● Involvement of Executive Management: the Finance Department reports to the Company’s Executive Management. Like all of its entities, it participates in the monitoring system described above: weekly meetings dealing with current operations, monthly meetings devoted to a detailed examination of figures (achieved and forecast), the organization of the function and the monitoring of business. Executive Management is closely involved in the planning and supervision process as well as in preparing the financial statements. ● Role of the Board of Directors: the Board of Directors is responsible for the ongoing oversight of accounting and financial information. It reviews and validates the annual and interim financial statements in consideration of the opinion expressed by the Audit Committee whose organization, working procedures and primary responsibilities for the year ended on 31ǾDecember 2017 are described in SectionǾ3.1 of ChapterǾ3.1 of the Registration Document. Supervision of the accounting and finance function

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AXWAY - 2017 REGISTRATION DOCUMENT