AXWAY_REGISTRATION_DOCUMENT_2017

CORPORATE RESPONSIBILITY AXWAY GROUP AND ITS BUSINESS ACTIVITIES Notes to the annual financial statements 2017

CORPORATE GOVERNANCE

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

c. In fairly rare instances, ancillary services may be considered essential to the operation of a software package This may be the case for very complex projects, the completion of which may be subject to particular risks. The project is then examined as a whole and is the focus of specific monitoring. They are accounted for using the percentage of completion method described in paragraphǾe below. d. Technical assistance, consulting, training and projects provided on an ongoing contract basis These services are recognized when performed, i.e. in general at the time of invoicing. Operations are reviewed at each balance sheet date: ● services already performed but not yet, or only partially, invoiced are measured on the basis of billable time and the contractual billing rates. They are recognized as revenue and are included in the balance sheet under the Accrued income item Trade receivables ; ● services already billed but not yet entirely performed are deducted from invoiced revenue and included in the balance sheet under the Deferred income , item Other current liabilities . e. Services covered by fixed-price contracts Under such contracts the Group commits itself to a price, a result and a deadline. Revenue and profit generated by a contract are recognized on the basis of a technical assessment, in line with the Group’s quality procedures, of the contract’s degree of completion. Trade receivables Trade receivables are recognized using the methods specified above. A separate estimate is carried out for each trade receivable at the end of the fiscal year and impairment is recognized in the event of a risk of non-recovery linked to collective proceedings.

Doubtful receivables for which legal proceedings have not been instigated are treated as accrued credit notes.

Transactions in foreign currencies Expenses and income in foreign currencies are recognized for their counter-value upon the date of the transaction. The receivables and liabilities in foreign currencies existing upon the close of the fiscal year are converted at the rate in force upon such date. The conversion difference is recorded in the balance sheet under the headings “foreign exchange gains and losses”. Unrealized foreign-exchange losses, which are not offset, shall be the subject of a provision for risk. The cash accounts in foreign currencies existing upon the close of the fiscal year are converted at the rate in force upon such date. Exchange-rate gains or losses resulting from such conversion are recorded in the profit-and-loss statement. Retirement benefits SinceǾ2004, Axway Software has provided for its retirement benefits in accordance with the provisions of the Syntec collective bargaining agreement regarding retirement and pensions. Axway Software’s obligation to its employees is determined on an actuarial basis, using the projected unit credit method: the employer’s discounted obligation is recognized in proportion to the probable length of service of the employees, taking into account actuarial assumptions such as future compensation level, life expectancy and employee turnover. We assumed a discount rate of 1.77%, a salary increase rate of 2.50% and an average turnover rate of 13.1%. The male-female mortality table used for our forecasts is INSEE tableǾ2013-2015. Among these assumptions we adopted 65 as the retirement age. Changes in actuarial assumptions that affect the valuation of the obligation are recognized as actuarial gains and losses. Changes in actuarial assumptions that affect the valuation of the obligation are recognized as actuarial gains and losses. Axway Software uses the corridor method.

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AXWAY - 2017 REGISTRATION DOCUMENT

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