AXWAY_REGISTRATION_DOCUMENT_2017

AXWAY GROUP AND ITS BUSINESS ACTIVITIES Notes to the financial statements

CORPORATE RESPONSIBILITY

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

6.5 Maturity of tax losses carried forward

31/12/2017

31/12/2016

31/12/2015

(in thousands of euros)

N+1 N+2 N+3 N+4

8,786

2,881

-

11,958 15,928

24,650 16,910 18,519 109,863 172,823 36,912 209,735 128,760

17,858 23,866 16,372 85,106 143,210 39,362 182,572 102,492

1,000

N+5 and subsequent years

126,355 164,027 13,941 177,968

Tax losses carried forward with a maturity date Tax losses which may be carried forward indefinitely

Total

Deferred tax basis – portion used Deferred tax basis – unused portion

87,741 90,226 19,510 19,228

80,974 44,899 24,979

80,080 35,624 24,654

Deferred tax – used Deferred tax – unused

As of 31ǾDecember 2017, deferred tax assets, not capitalizing the tax losses which may be carried forward, amounted to €19.2Ǿmillion, relating to the following subsidiaries: Axway Inc. (€11.7Ǿmillion), Axway SoftwareǾSA (€3.1Ǿmillion), Axway Pte Ltd in Singapore (€0.9Ǿmillion), Axway Romania (€1.3Ǿmillion), Axway Brazil (€1.0Ǿmillion), Axway Hong Kong (€0.6Ǿmillion), Axway UK (€0.2Ǿmillion) and Axway Srl in Italy (€0.3Ǿmillion). Axway Software’s position: As of 31Ǿ December 2016, capitalized tax losses stood at €7.1Ǿmillion (in deferred tax assets). The non-capitalized tax losses which may be carried forward was nil. As of 31Ǿ December 2017, capitalized tax losses stood at €4.4Ǿmillion (in deferred tax assets). The non-capitalized tax losses which may be carried forward amounted to €12.1Ǿmillion (taxable base). Axway Inc’s situation: Tax losses carried forward for Axway Inc. essentially resulted from the acquisitions of Cyclone inǾ 2006, Tumbleweed Communications Corp. inǾ 2008, Systar Inc. inǾ 2014 and Appcelerator inǾ2016. These losses are subject to an overall time limit (20 years) as well as an annual limit on their use

($8.1Ǿmillion) imposed by US tax regulations following a change in shareholding structure. FromǾ2010, the earning prospects of the American subsidiary allowed capitalization of losses of approximately two years of forecast results. At 31ǾDecember 2013, the accrued earning capacity of fiscal yearsǾ 2011 and 2012, and its projected maintenance over the years to come, improved primarily through the contribution of the API Server offer, led to the capitalization of the tax losses to approximately five years of forecast result, i.e. $28.8Ǿmillion. As of 31Ǿ December 2015, capitalized tax losses stood at $31.3Ǿmillion (in deferred tax assets). The non-capitalized tax losses which may be carried forward amounted to $58.1Ǿmillion (taxable base). As of 31Ǿ December 2016, capitalized tax losses stood at $32.8Ǿmillion (in deferred tax assets). The non-capitalized tax losses which may be carried forward amounted to $37.4Ǿmillion (taxable base). As of 31Ǿ December 2017, capitalized tax losses stood at $18.1Ǿmillion (in deferred tax assets). The non-capitalized tax losses which may be carried forward amounted to $67.3Ǿmillion (taxable base).

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AXWAY - 2017 REGISTRATION DOCUMENT

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