AXWAY_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS AXWAY GROUP AND ITS BUSINESS ACTIVITIES Report of the Board of Directors on corporate governance and internal control CORPORATE GOVERNANCE CORPORATE RESPONSIBILITY

2017 ANNUAL FINANCIAL STATEMENTS

CAPITAL AND AXWAY SOFTWARE STOCK

INFORMATIONS ADMINISTRATIVES ETbJURIDIQUES

COMBINED GENERAL MEETING OFb6bJUNEb2018

Committees of the Board of Directors The committees, the working procedures of which are detailed below, lack the authority to take decisions alone but submit their findings and make respective recommendations to the Board of Directors. Audit Committee (formerly Accounting Committee) The Audit Committee was created on 9ǾMay 2011. Following the renewals of the directors’ terms of office, its current members are: ● Michael Gollner. The Committee meets at least four times per year (in a full year). The Committee dedicates at least two meetings per year to the half-yearly and annual financial statements. The members of the Audit Committee have in-depth economic and/or industry knowledge as detailed in ChapterǾ3, SectionǾ1 (“Administrative bodies and Executive Management”), enabling them to fully investigate all issues submitted to them by the Company. Without prejudice to the powers given by law to the Board of Directors, the Audit Committee’s main responsibilities include the following: ● examine the financial statements, especially in order to: ● review the Company’s exposure to risks as well as its off- balance sheet commitments, ● verify the procedures for collecting and validating the reliability of information, ● ensure that accounting policies have been applied consistently and are relevant, ● check the working methods used by the Statutory Auditors; ● promote the effectiveness of internal control and risk management procedures; ● monitor the statutory audit of the Group’s financial statements by the Statutory Auditors; ● ensure compliance with the independence requirement for Statutory Auditors. In addition, the Audit Committee: ● issues a recommendation on the Statutory Auditors proposed for appointment by the General Meeting, where applicable. This recommendation to the Board is prepared in accordance with regulations: it also issues a recommendation to the Board when renewal of the Statutory Auditor(s)’ term of office is proposed under the conditions defined by regulations; ● Hervé Saint-Sauveur (Chairman); ● Véronique de la Bachelerie; ● Hervé Déchelette;

● monitors the statutory auditor’s performance of its mission and takes into account the findings and conclusions of the Haut Conseil du commissariat aux comptes following audits conducted in accordance with regulations; ● ensures that the statutory auditor complies with the conditions of independence under the terms set forth by regulations; ● approves the provision of services other than the certification of financial statements in compliance with applicable regulations; ● regularly reports to the Board regarding performance of its duties. It also reports the results of the certification of financial statements, ensuring that such certification ensured the integrity of the financial information and the role it played in the process. It immediately notifies the Board of any problems encountered. The Committee met five times inǾ2017 in the presence of the Statutory Auditors. The main items of business at these meetings were as follows: ● review of the consolidated and parent company financial statements for the year ended 31ǾDecember 2016; ● review of the financial statements for the first half ofǾ2017; ● the organization of work inǾ2017 for the Group’s internal audit function It should be stated in this respect that, since the reform of the law governing audits, the workload of the Audit Committee has significantly increased. The Audit Committee was responsible for (i)Ǿ reviewing implementation of statutory audit reforms, (ii)Ǿreviewing the Group’s implementation of requirements under the SapinǾII law, (iii)Ǿverifying that the auditors of the financial statements are still independent, (iv)Ǿauthorizing the ability to contract for services, other than certification of the financial statements, provided the total amount does not exceed €100,000. In addition, the Audit Committee had significant discussions with the Statutory Auditors during preparation of the new Statutory Auditors’ report to the Audit Committee: ● impact of the Cloud on the Group's business model; ● review of the insurance policies contracted by the Group; ● the Chairman’s draft report on corporate governance and internal control procedures. As a general matter, it should be noted that the Board of Directors followed the Audit Committee’s recommendations. The Statutory Auditors appeared before the Committee in the absence of Management and the Finance Department. Various operating and functional Group managers were also interviewed for the informational purposes of the members of the Audit Committee in relation to risk management, internal controls and the preparation of financial and accounting information. ● the 2017 impairment tests; ● the intra-group transfer pricing policy; ● update on cyber security within the Group;

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AXWAY - 2017 REGISTRATION DOCUMENT

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