AXWAY_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE AXWAY GROUP AND ITS BUSINESS ACTIVITIES Comments on the 2017 annual financial statements of Axway SoftwarebSA CORPORATE RESPONSIBILITY

CONSOLIDATED FINANCIAL STATEMENTS

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

The remaining balance of trade receivables breaks down as follows:

ArticlebD.b441-2°: Unpaid invoices issued subject to late payment delays at the fiscal year-end

Total 1 day andbover

91 days andbover

0 days 1 to 30 days 31 to 60 days 61 to 90 days

(A) Late payment buckets Number of invoices

937

787

Total amount of invoices excluding VAT Percentage of total purchases for the fiscal year, excluding VAT

27,068,847.44 2,672,198.01 704,982.80 542,262.38 9,075,023.53 12,994,466.72

16.70%

1.65%

0.43%

0.33%

5.60%

8.02%

(B) Invoices excluded from (A) regarding disputed or unrecognized debts and receivables Number of invoices excluded Total amount of invoices excluded (C) Customers’ payment terms contractual or legal terms − ArticlebL.b441-6 or ArticlebL.b443-1 of the French Commercial Code Payment terms of reference used to calculate late payments

NONE

Legal terms: 30 days from invoice date

Invoices at more than 91Ǿdays mainly concern intragroup receivables.

calculation of foreign exchange gains and losses on the U.S. subsidiary’s current account, amounting to €8Ǿmillion. Provisions for risk were impacted by the change in the dollar, which led to a €6.3Ǿmillion increase in the provision for foreign exchange losses. “Financial debt” rose by €26Ǿmillion. This change is attributable to the €13Ǿmillion increase in current accounts, as well as transactions that impact borrowings. The $45Ǿmillion loan raised at the start of the year for the Syncplicity acquisition was repaid at year-end, resulting in a foreign exchange gain of €3.9Ǿmillion, and a new €36Ǿmillion loan was taken out. In addition, €23Ǿmillion in loans (including €20Ǿmillion used for the Appcelerator acquisition) were repaid duringǾ2017. The €6.5Ǿmillion change in “Trade payables” resulted from a change in transfer pricing for €3.8Ǿmillion, and an increase in non-Group accrued expenses for €2.3Ǿmillion. The related-party transactions are described in ChapterǾ 3, SectionǾ3, and in ChapterǾ4, SectionǾ5, in NoteǾ31 “Related-party transactions” of this Registration Document.

Significant facts between these two fiscal years included the financing of the Syncplicity acquisition with a $45Ǿmillion loan from LCL and the 13.8% change in the value of the dollar, which significantly impacted the Axway Software financial statements (2016 closing exchange rate 1.0541 and 2017 closing exchange rate 1.1993). Axway Inc. acquired Syncplicity in FebruaryǾ2017. To complete this acquisition, Axway Software borrowed $45Ǿmillion and transferred this amount to the Axway Inc. current account. The increase in “Financial investments” is mainly attributable to this transaction (at year-end, the Axway Inc. current account was up €37Ǿmillion) and to a reversal of provisions for Axway GMBH equity investments of €3.7Ǿmillion. The change in “Trade receivables” is due to implementation of a new transfer pricing policy which led to a €11.5Ǿmillion increase in intragroup billing. The €10.9Ǿmillion change in “Other receivables, prepayments and accrued income” is mainly attributable to two matters concerning Axway Inc. The first is a €6Ǿmillion credit note on 2017 R&D costs, and the second is the dollar exchange rate impact through the

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AXWAY - 2017 REGISTRATION DOCUMENT

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