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

Notes to the financial statements

Taking present value into account, the details of the Syncplicity Group’s net assets were as follows, as of 31ǾDecember 2017:

Carrying amount withbthebseller

Restatements

Fair value

(in thousands of euros)

Intangible assets

22,895

-10,551

12,344

Property, plant and equipment

208

0 0 0 0 0 0

208

Financial assets Deferred tax assets

77

77

0

0

Current assets

2,648

54

2,702

Cash and cash equivalents

148

148

Financial liabilities

0 0

0 0

Provision for post-employment benefits

Current liabilities

-35,290 -9,314

144

-35,145 -19,666

Net assets acquired

-10,353

Adjustments of €10,551Ǿthousand, to obtain the fair value of the net assets acquired, break down as follows: ● valuation of the Syncplicity technologies and customer base, entailing an upward adjustment of €11,488Ǿthousand; ● cancellation of the goodwill previously measured by Syncplicity, entailing a downward adjustment by €22,039Ǿthousand. 8.1.3 Foreign exchange gains and losses Changes in exchange rates relate mainly to fluctuations in the Euro compared to the following currencies:

4

Change euro/currency (in thousands of euros)

31/12/2017

31/12/2016

31/12/2015

USD SEK

-31,163

5,732 -818

14,724

-610

466 -14

Other currencies

-39

-5

Total

-31,813

4,909

15,176

8.2 Impairment tests

The Group’s segmentation into cash-generating units is consistent with the operating structure of its businesses, its management and reporting structure and its segment information. Impairment testing involves comparing cash-generating units’ carrying amounts with their recoverable amounts. A cash-generating unit’s recoverable amount is the higher of its fair (generally market) value, less costs of disposal, and its value-in-use. The Axway Group provides IT solutions enabling the automatic management of data exchange within and outside the Company. Axway has developed partly by external growth in recent years, and its main acquisitions were the following: Cyclone Commerce in the United States inǾ2006, Actis in Germany inǾ2007, Tumbleweed in the United States inǾ2008, Vordel in Ireland inǾ2012, Systar in France inǾ2014, Appcelerator in the United States inǾ2016 and Syncplicity in the United States inǾ2017. All of the products developed internally or related to acquisitions are integrated in a common technical platform. Axway operates as a global software developer whose main markets are the USA and Europe. The various software packages from the technical platform are distributed by sales subsidiaries that pay royalties on the income they earn from licenses, the Cloud and maintenance.

a. Cash-generating units Under IASǾ36 Impairment of assets, an impairment test must be conducted at each reporting date where there is an indication of impairment of an asset. Where there is such an indication, the entity must estimate the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, an entity must also: ● test annually intangible assets with indefinite useful lives; ● test annually the impairment of goodwill acquired in a business combination. In practice, impairment testing is most relevant to goodwill which comprises the main portion of Axway Software’s consolidated balance sheet non-current assets. Impairment testing is performed at the level of the cash generating units (CGUs) to which assets are allocated. A cash- generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

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AXWAY - 2017 REGISTRATION DOCUMENT