2015 CONSOLIDATED FINANCIAL STATEMENTS - HiPay · 2018-08-21 · CONSOLIDATED FINANCIAL STATEMENTS 5 Statement of Comprehensive Income for FY 2015 and 2014 in thousands of Euros 31

2015 CONSOLIDATED

FINANCIAL STATEMENTS

Public limited company with capital of €54,504,715 6 place du Colonel Bourgoin – 75012 Paris

810 246 421 R.C.S. Paris www.HiPay.com

CONSOLIDATED FINANCIAL STATEMENTS 2

Contents

CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................... 4

NOTES CONCERNING THE GROUP'S CONSOLIDATED FINANCIAL STATEMENTS ......................................... 9

Note 1. Accounting principles and methods ................................................................................................................................ 9 1.1. Entity presenting the financial statements ............................................................................................................................. 9 1.2. Significant events .................................................................................................................................................................... 9 1.3. Basis of preparation of the consolidated financial statements .............................................................................................. 9 1.4. Accounting principles and evaluation methods ..................................................................................................................... 9 1.5. Consolidation principles ....................................................................................................................................................... 10 1.6. Use of estimates and judgments .......................................................................................................................................... 10 1.7. Foreign currency ................................................................................................................................................................... 11 1.8. Intangible fixed assets .......................................................................................................................................................... 11 1.9. Property, plant, and equipment ........................................................................................................................................... 12 1.10. Impairment losses of fixed assests ....................................................................................................................................... 13 1.11. Receivables ........................................................................................................................................................................... 13 1.12. Cash and cash equivalents and current financial assets ....................................................................................................... 14 1.13. Non-current assets and disposal group inteded for sale ...................................................................................................... 14 1.14. Capital ................................................................................................................................................................................... 14 1.15. Provisions .............................................................................................................................................................................. 14 1.16. Employee benefits ................................................................................................................................................................ 14 1.17. Segment Reporting Information ........................................................................................................................................... 15 1.18. Income tax ............................................................................................................................................................................ 15 1.19. Revenue recognition ............................................................................................................................................................. 16 1.20. Operating profit .................................................................................................................................................................... 16

Note 2. Financial risk management ........................................................................................................................................... 17 2.1. Credit risk .............................................................................................................................................................................. 17 2.2. Liquidity risk .......................................................................................................................................................................... 17 2.3. Market risk ............................................................................................................................................................................ 18 2.4. Categorization of financial instruments ................................................................................................................................ 18

Note 3. Consolidation scope ...................................................................................................................................................... 18

Note 4. Payroll Charges ............................................................................................................................................................. 19

Note 5. Other non-current income and expenses ...................................................................................................................... 19

Note 6. Financial result .............................................................................................................................................................. 19

Note 7. Tax on profit or loss ...................................................................................................................................................... 20

Note 8. Goodwill ....................................................................................................................................................................... 20

Note 9. Intangible assets ........................................................................................................................................................... 21

Note 10. Tangible fixed assets ..................................................................................................................................................... 22

Note 11. Differed taxes ............................................................................................................................................................... 23

Note 12. Other financial assets .................................................................................................................................................... 23

Note 13. Customers and other debtors ....................................................................................................................................... 23


Note 14. Other current assets ..................................................................................................................................................... 24

Note 15. Cash and cash equivalents ............................................................................................................................................ 24

Note 16. Non-current provisions ................................................................................................................................................. 25 16.1 Details concerning non-current provisions ................................................................................................................................. 25 16.2 Provisions for risks and charges .................................................................................................................................................. 25 16.3 Provisions for retirement ............................................................................................................................................................ 25

Note 17. Other debts and current liabilities ................................................................................................................................ 25

Note 18. Working capital requirement ........................................................................................................................................ 26

Note 19. Segment Reporting Information ................................................................................................................................... 26

Note 20. Stock option plan and allocations of free shares ........................................................................................................... 26 20.1. Stock options ........................................................................................................................................................................ 27 20.2. Allocations of free shares ..................................................................................................................................................... 28

Note 21. Off-balance sheet commitments ................................................................................................................................... 28 21.1. Commitments received......................................................................................................................................................... 28 21.2. Commitments given .............................................................................................................................................................. 28 21.3. Claims.................................................................................................................................................................................... 29

Note 22. Significant events during FY 2015 .................................................................................................................................. 29

Note 23. Events occurred since December 31st

2015 ................................................................................................................... 29

Note 24. Transactions between related parties ........................................................................................................................... 29 24.1. Compensation of the members of the management bodies ................................................................................................ 29 24.2. Other related parties ............................................................................................................................................................ 29


CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statements for FY 2015 and 2014

in thousands of Euros Notes 31 Dec.2015 31 Dec.2014 (3)

Sales (1)

25 823 23 184

Direct costs

- 8 107 - 6 733

Payroll charges Note 4 - 9 016 - 7 090

General expenses

- 4 842 - 5 737

EBITDA (2)

3 858 3 624

Depreciation and amortization

- 2 716 - 2 715

Current operating profit 1 142 909

Stock based compensation

- 627 -

Other non-current income and charges Note 5 - 3 996 - 4 030

Operating profit - 3 481 - 3 122

Other financial income and charges Note 6 - 223 - 1 435

Earning of the consolidated companies - 3 704 - 4 557

Share in the earnings of the companies treated on an equity basis - -

Earnings before tax of the consolidated companies - 3 704 - 4 557

Income Tax Note 7 856 - 987

Net income of the consolidated companies - 2 848 - 5 544

Including minority interests

187 533

Including Group share - 3 035 - 6 078

31 Dec.2015 31 Dec.2014 (3)

Weighted average number of ordinary shares 4 914 409 (4)

Earnings per share, Group share (in euro) -0,62

Weighted average number of ordinary shares (diluted) 4 914 409

Diluted earnings per share, Group share (in euro) -0,62

(1) In the context of recent European legislative change, from 1st January 2015, the group has modified the accounting of its turnover for its micropayment

activities using Telecom resources and changed from a gross turnover recognition to a net recognition which is already the case for other business line. Net revenue is the former gross margin.The turnover on December 31st, 2014 is presented based on the same accounting principle.

(2) Current operating income before allowances and reversals of depreciation, amortisation and provisions.

(3) Comparative data related to 2014 has been established in the HiPay Group combined financial statements (cf note 1.3).

(4) Information on earnings per share for the 2014 combined financial statements is not applicable as the combined group was not legally constituted as of

December 31st, 2014.


Statement of Comprehensive Income for FY 2015 and 2014

in thousands of Euros 31 Dec.2015 31 Dec.2014 (1)

Net result - 3 035 - 6 078

Other element of the global result Elements recycled in net result - Translation adjustments - 459 - 363

- Other elements of the global result 453 -

Elements not recycled in net result - Actuarial gain and losses related to post-employment benefits - 43 - 14

Other elements of the global result, net of tax - 49 - 377

Group share - 49 - 377

Minority interests - -

Global result - 3 084 - 6 455

(1)

Comparative data related to 2014 has been established on the HiPay Group combined financial statement (cf note 1.3 - Basis of preparation)


Consolidated balance sheets on December 31st

, 2015 and December 31st

, 2014

ASSETS - in thousands of Euros Notes 31 Dec.2015 31 Dec.2014 (1)

Net Goodwill Note 8 45 222 45 222

Net intangible fixed assets Note 9 6 847 6 308

Net tangible fixed assets Note 10 97 81

Deferred tax credits Note 11 1 552 37

Other financial assets Note 12 396 237

Non-current assets 54 115 51 885

Customers and other debtors Note 13 13 394 17 253

Other current assets Note 14 26 703 19 813

Cash and cash equivalents Note 15 11 929 23 337

Current assets 52 027 60 402

TOTAL ASSETS 106 142 112 287

LIABILITIES - in thousands of Euros Notes 31 Dec.2015 31 Dec.2014 (1)

Share capital

54 505 -

Premiums on issue and on conveyance

15 495 -

Reserves and retained earnings

- 9 284 61 305

Consolidated net income (Group share)

- 3 035 - 6 078

Shareholders’ equity (Group share) 57 681 55 227

Minority interests

360 585

Shareholders’ equity 58 041 55 812

Non-current Provisions Note 16 197 214

Deferred tax liabilities

- 33

Non-current liabilities 197 248

Short-term financial liabilities and bank overdrafts Note 15 - 7 120

Suppliers and other creditors

22 313 28 409

Other current debts and liabilities Note 17 25 590 20 698

Current liabilities 47 904 56 228

TOTAL LIABILITIES 106 142 112 287

(1)



Consolidated cash flow statement for FY 2015 and 2014


Net income

- 2 848 - 5 544

Adjustments for:

- -

Depreciation of the fixed assets

2 761 2 381

Other non curent elements without impact on the cash

1 567 1 987

Financial income and charges

73 782

Net income on disposals of fixed assets

2 1 333

Costs of payments based on shares

453 -

Tax charge or proceeds Note 7 - 856 987

Operating profit before variation of the operating capital need and provisions 1 152 1 926

Variation of the operating capital need

- 5 396 - 3 100

Cash flow coming from operating activities - 4 245 - 1 173

Interest paid

- 73 - 782

Tax on earnings paid

- - 673

Net Cash Flow Resulting From Operating Activities - 4 318 - 2 629

Disposal of subsidiary, after deduction of cash transferred

3 679 -

Acquisition of a subsidiary, after deduction of cash acquired

- -

Acquisition of fixed assets

- 2 481 - 3 126

Variation of financial assets

- 160 - 20

Net Cash Flow Resulting From Investment Activities 1 038 - 3 146

Repurchase of own shares

- 472 -

Other financial liabilities variation

- - 11

Dividends paid to minority interests

- 529 - 225

Net Cash Flow Coming From Financial Activities - 1 001 - 237

Effect of exchange rates variation

- 8 11

Net Variation Of Cash And Cash Equivalents - 4 288 - 6 001

Cash and cash equivalents on January 1st

16 217 22 221

Cash And Cash Equivalents At The End Of The Period 11 929 16 217

(1)



Statement of changes in consolidated shareholders equity for FY 2015 and 2014

in thousands of Euros

Number of

shares

Share capital

Premiums

Reserves on

combined statement

s

Transactions with Hi-media (2)

Income and

expenses on equity

Reserves and

consolidated earnings

Shareholders’ equity restated

Shareholders equity

Shareholders equity

(Group share)

Minority interests

December 31, 2013 (1) - - 459 - 149 61 166 61 774 539 62 313

Dividends paid by subsidiaries to the minorities

- - - -

- - 125 - 125 - 104 - 229

Perimeter variation

- - - - 32 - 32 - 384 - 352

Income and charges directly posted in shareholders’ equity

- - - -

- 377 - - 377 - - 377

Net income of the period - - 427 - - - 6 505 - 6 078 533 - 5 544

Total global income - - 427 - - 377 - 6 505 - 6 455 533 - 5 921

December 31, 2014 (1) - - 886 - - 196 54 537 55 227 585 55 812

Capital increase 54 505 54 505 15 495 - - - - 70 000 - - -

Purchase of own share Perimeter variation

- - - - - - 472 - 472 - - 472

5 598

- - - 886 7 076 - - 180 6 009 - 411

Income and charges directly posted in shareholders’ equity

- - - - - 49 - - 49 - - 49

Net income of the period - - - - - - 3 035 - 3 035 187 - 2 848

Total global income

- - - - - 49 - 3 035 - 3 084 187 - 2 897

December 31, 2015 4 955(3) 54 505 15 495 - 7 076 - 244 - 19 150 57 681 360 58 041

(1)

Comparative figures related to 2013 and 2014 have been established in the HiPay Group combined financial statements (cf note 1.3 Basis of preparation). (2)

In 2015, transactions with HiMedia S.A. are mainly legal restructuring due to the contribution of HPME shares, capital increase of HiPay S.A.S. and HiPay Mobile Espana SL.

(3) On July 24th, 2015, HiPay Group shares were subject to a shares consolidation: 1 new share with a nominal value of € 11 was allocated for 11 old shares

with a nominal value of € 1 each.

The comparative figures presented as of December 31

st, 2014 correspond to the combined financial statements of the Group.

These combined financial statements were prepared based on the combination of equity of each entity of the perimeter. As a consequence, no capital or share premium has been recognized as there was no combinante legal entity (cf. note 1) The capital increase in 2015 relates to the contributions of securities HPME to HiPay Group SA on June 15

th, 2015 (cf note 1.2).

Figures related to minority shareholders concern HiPay Portugal Lda owned at 53.9% by HPME. On December 31

st, 2015, HiPay Group holds 40,565 of its own shares valued at €471,594 and acquired through the liquidity contract.


NOTES CONCERNING THE GROUP'S CONSOLIDATED FINANCIAL STATEMENTS Note 1. Accounting principles and methods

1.1. Entity presenting the financial statements

The company’s consolidated financial statements for FY2015 include the financial statements of HiPay Group S.A. and its subsidiaries

(together referred to as "the Group") and the Group’s share in the associates companies or joint ventures. They are presented in

thousands of euros.

The head office of the Company is located at 6, Place Colonel Bourgoin, 75012 Paris.

1.2. Significant events On May 27

th, 2015, securities of companies Mobile Espana SL, HiPay SAS, HiPay Payments do Brasil, and 53.9% of HiPay Portugal’s

capital were brought by HiMedia to HPME. On June 15

th, 2015, securities of the company HPME were brought to HiPay Group SA, newly created.

On June 22

nd, 2015, HiMedia decided to distribute a dividend in kind to its shareholders corresponding to 80% of the shares of HiPay

Group. On June 29

th, 2015, securities HiPay Group SA have been listed on Euronext Paris.

1.3. Basis of preparation of the consolidated financial statements

Persuant to the European regulation n° 1606/2002 of July 19

th 2002, the Group's consolidated financial statements have been

prepared in accordance with IAS 34 - Financial Reporting Standard IFRS as adopted in the European Union. These International Accounting Standards are made of the IFRS (International Financial Reporting Standards), the IAS (International Accounting Standards) and their interpretations, which were adopted on the December 31st, 2015 by the European Union (publication in the Official Journal of the European Union). In order to present relevant historical information, comparative data presented on December 31

st 2014 correspond to the combined

financial statements of the Group. The scope of the combined accounts on December 31st

, 2014 includes companies owned directly or indirectly by HiMedia and related to payment activities. For entities which had both payment and advertising activities, in order to retain payment activities in the combined financial statements of HiPay, only the assets, liabilities and flows related to online payments business have been included in the scope of combination. The basis of preparation of these combined financial statements are detailed in the prospectus. The consolidated financial statements on December 31

st, 2015 and the related notes have been prepared under the responsibility of

the Board of Directors and agreed at its meeting on March 15th, 2016. Besides, in the context of recent European legislative change, from 1st January 2015, the group has modified the accounting of its turnover for its micropayment activities using Telecom resources and changed from a gross turnover recognition to a net recognition which is already the case for other business line. Net revenue is the former gross margin. 1.4. Accounting principles and evaluation methods

HiPay Group has applied the same accounting methods as in its consolidated financial statements for the financial year ending on

December 31st

, 2014, except for standards, amendments and interpretations applicable for the first time on January 1st

, 2015.

Standards, amendments and interpretations, whose application is mandatory on January 1st

, 2015:

- Amendments induced by IFRS annual improvements cycle of 2011- 2013

o IFRS 1: « First-time Adoption of International Financial Reporting Standards »


o IFRS 3: Business Combinations : « Scope exceptions for joint ventures » o IFRS 13: « Fair Value Measurement » o IAS 40: « Investment Property »

- IFRIC 21, Levies.

The application of these standards, amendments and interpretations to be applied as from January 1

st, 2015 did not have a significant

impact on the Group’s consolidated financial statements on December 31st

, 2015. Application by anticipation On December 31

st, 2015, the Group has not applied by anticipation new standards or interpretations.

Standards issued by the IASB whose application is not mandatory Principles applied by the Group do not differ from IFRS standards as published by IASB as the application of the following standards and interpretations is not mandatory for fiscal year beginning after January 1

st 2015:

- IFRS 9 and complements to IFRS 9 - Financial Instruments: classification and valuation of financial assets, the fair option

value for financial liabilities and hedge accounting; - IFRS 15 - " Revenues from contracts with customers.

1.5. Consolidation principles A subsidiary is an entity controlled by the Group. The Control exists when the Group has the power to govern financial and operating policies of the entity to obtain benefits from its activities. To appreciate the control, potential voting rights which can currently be exercised have been taken into consideration. Subsidiaries’ financial statements are included in the consolidated financial statements from the date which control was gained until the date on which control ended. Subsidiaries’ accounting methods are modified when necessary to align them on those adopted by the Group.

1.5.1. Companies under exclusive control The companies exclusively controlled directly or indirectly by HiPay Group SA are fully consolidated.

1.5.2. Associates companies (companies accounted for under the equity method) Associate companies are the entities in which the Company has significant influence over the financial and operating policies, without having control. Significant influence is presumed when the Group holds from 20% to 50% of the voting rights of an entity. Associate companies are accounted for under the equity method and are initially recorded at cost. The Group’s investments inc lude goodwill identified on acquisition, net of accumulated impairment losses. The consolidated financial statements include the Group's share in total profits and losses and movements in equity accounted by the equity method, after taking into account adjustments for compliance of accounting policies with those of Group, from the date that significant influence is exercised until the date that significant influence ceases. If the Group’s share of the losses exceeds its interest in the company under the equity method, the book value of equity affi liates (including any long-term investment) is reduced to zero, and the Group ceases to post its share of the future losses, unless the Group is obliged to take part in the losses or to make payments on behalf of the company.

1.5.3. Transactions in the consolidated financial statements Balance sheet amounts and transactions, income and expenses resulting from intra-group transactions are eliminated during preparation of consolidated financial statements. Income from transactions with associate companies is eliminated through consideration of investments in equity shares up to the Group’s interest in the company. Losses are eliminated in the same manner as income but only where they do not represent a loss in value. 1.6. Use of estimates and judgments


Preparation of the financial statements in accordance with the IFRS standards requires Management to take account of estimates and of assumptions for determination of the amounts to be posted with regard to certain assets, liabilities, income and charges, as well as of certain information provided in notes attached to the assets and liabilities, in particular :

- The goodwill and the impairment tests,

- The intangible assets acquired,

- The deferred tax credits,

- The depreciations of receivables,

- The provisions for risk.

The estimates and underlying assumptions are developed on the basis of past experience and other factors considered reasonable in light of the circumstances. They are thus used as the basis for exercise of the judgment necessary for determination of the book values of assets and liabilities, which cannot be obtained directly from other sources. In view of the inherently uncertain nature of these valuation procedures, the definitive amounts may prove to be different from the ones initially estimated. The estimates and the underlying assumptions are continuously reconsidered. The impact of the changes in accounting estimates is directly entered in the accounting during the period of the change if it affects only said period, or during the period of change and in subsequent periods if they are also affected by the change.

1.7. Foreign currency

1.7.1. Foreign currency transactions

Exchange differences on receivables and liabilities denominated in foreign currency of an entity are recognized in earnings or financial results of the entity according to the nature of the underlying transaction. The exchange differences relating to monetary elements forming part of the net investment in foreign subsidiaries are included in translation reserves at their amount net of tax. The Balance sheet accounts expressed in foreign currency are converted into euro at the rate of the closing of the FY, excluding the net position which is maintained at its historical value. The income statement and cash flow expressed in foreign currencies are converted at the average monthly exchange rate, absenting significant changes in the exchange rate. Currency gains and losses resulting from application of these different rates are not included in the income statement for the period but directly allocated into conversion reserves in the combined financial statements.

1.7.2. Activities abroad The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from the acquisition, are translated into euro by using the exchange rate on the closing date. Revenues and expenses of a foreign operation, apart from overseas operations in a hyperinflationary economy are translated into euro using the exchange rates prevailing at the dates of transactions. Exchange differences arising from the conversion are posted to the translation reserves under shareholders’ equity. 1.8. Intangible fixed assets

1.8.1. Goodwill Business combinations are accounted for using the 'acquisition method' at the date of the historical acquisition

Goodwill is evaluated by the group at acquisition date as:

- The fair value of the consideration transferred; plus - If the business combination is done step by step, the fair value of any participation previously held in the

acquired company; minus - The net amount accounted (generally at the fair value) for the identifiable acquired assets and liabilities


When the difference is negative, revenue can be directly booked in the result as a gain on a bargain purchase. The acquisition costs, other than the ones related to a debt or capital account issuance the group has to bear due to the business combination, are booked in expenses. Any consideration to be paid, such as a price adjustment clause to be paid among the achievement of any performance ratio, is evaluated at the fair value at the acquisition date. The changes of the fair value of the consideration which could occur at a later date are booked in the profit and loss statement. Impairment test methods of cash generating units are detailed in Note 1.10 below. In the event of impairment, depreciation is included in profit for the year. Goodwill related to associate company acquisitions is included in the item “Equity method investments.” They are tested through impairment test on the securities.

1.8.2. Other intangible assets Research and development costs

Development costs, including those related to software and new sites or new versions of sites are capitalized as intangible assets as soon as the company can demonstrate:

- Its intention, financial and technical ability to conduct the development project to completion; - Its ability to use or sell the intangible asset, once completed ; - The availability of adequate technical and financial resources to complete the development and the sale; - That it is likely that the future economic advantages attributable to the development expenditure will go to the company; - And that the cost of the asset may be measured reliably. -

Other research and development costs are expensed in the period in which they are incurred. These intangible assets are depreciated over the estimated useful life according to the consumption of the economic benefits connected with them. They are impaired if their recoverable value is less than their book value. Other acquired intangibles To satisfy the definition of an intangible fixed asset, an element must be identifiable (separable or arising from contractual or legal rights), controlled by the company, and it must be probable that future economic benefits attributable to them will go to the company. An acquired intangible asset is recognized in the balance sheet as soon as its cost can be reliably measured, on the basis that in such a case the future economic benefits attributable to the asset will go to the company. These intangible assets consist primarily of trademarks, licenses and software, and customer relations. Licenses, software and customer relations, which have a finite useful life, are amortized over a period between 3 and 8 years. 1.9. Property, plant, and equipment The original value of PPE corresponds to their purchase cost. Maintenance costs and repairs are expensed as incurred, except those incurred for increased productivity or to extend the useful life of the property. Assets financed by finance leases, for which risks and rewards have been transferred to the lessee, are presented to the asset for the present value of future payments or market value, whichever is lower. Corresponding debt is recognized under financial liabilities. These capital assets are amortized according to the method and useful life described below.

The depreciation is expensed over the estimated useful life for each asset. The estimated useful lives are as follows:


Fixtures and facilities 5 to 10 years Office and computer equipment 3 to 5 years Furniture 4 to 8 years

1.10. Impairment losses of fixed assests

1.10.1. Financial assets A financial asset is examined on each closing date to determine if there is an objective evidence of impairment. The Group considers that a financial asset is impaired if there is objective evidence that one or several events had a negative impact on the future estimated cash flows of the asset.

The loss of value of a financial asset measured at amortized cost is the difference between its carrying amount and the value of estimated future cash flows, discounted at the original effective interest rate on financial assets. Impairment losses are recognized in the income statement. The impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.

1.10.2. Non-financial assets The carrying amounts of non-financial assets of the Group, other than deferred tax liability, are examined on each closing date to assess if there is any indication of an asset which has been impaired. If there is such an indication, the asset’s recoverable amount is appraised. For goodwill, intangible assets with indeterminate useful life or which are not yet ready to be put on service, the recoverable amount is estimated on each closing date. The recoverable amount of an asset or cash generating unit is the greatest amount between its useful value and the fair value depreciated from sales costs. To assess the useful value, future estimated cash flows are updated at pre-tax rates reflecting current market appreciation of the time value of money and specific risks to the asset. For the purpose of impairment tests, assets are regrouped in the smallest group of assets generating cash inflows resulting from continued use, largely independent of cash inflows generated from other assets or groups of assets, i.e. cash generating units.

An impairment loss is recognized if the carrying amount of an asset or its cash generating unit is greater than its recoverable amount. Impairment losses are recognized in the income statement. An impairment loss recognized as a cash generating unit (group of units) is allocated first to reduce the carrying amount of any goodwill allocated to cash generating unit, then the reduction in carrying value of other assets of the unit (group of units) pro rata to the carrying value of each asset in the unit (group of units). An impairment loss recognized in connection with goodwill cannot be reversed. For other assets, on the closing date of each FY the Group assesses if there is an indication that impairment losses recognized during previous periods have decreased or no longer exist. An impairment loss is reversed if there is a change in assessments used to determine the recoverable amount. The carrying value of an asset, increased due to the reversal of impairment loss must not be higher than the carrying value which would have been determined, net of depreciation, if no impairment loss had been recognized. 1.11. Receivables Trade receivables are initially assessed at their fair value then at the amortized cost and subject to individual consideration. Impairment is recognized when the current value (updated value of estimated future cash flows) is less than the book value.

The receivables transferred to third parties (billing contract) are removed from the Group’s assets when the risks and benefits associated with them are substantially transferred to such third parties and if the factoring company in particular accepts the credit risk, the rate risk and the payback period.

The credit risk is the risk of non-recovering receivables. Under contracts deconsolidating of the entities in the Group, the credit risk is supported by the factoring company. This means that the Group is no longer exposed to the risks of non-recovery, and, as a result, the disposal is regarded as being without recourse.


The rate risk and payback period risk corresponds to the transfer of the financial risk linked with the lengthening of the debt collection period and related carrying costs. Under the deconsolidating contracts of the entities in the Group, the commission rate for a given disposal is adjusted exclusively according to EURIBOR and the time it took to settle the previous disposal. The financing commission is paid at the start of the period and is not subsequently modified. The risk of technical dilution is linked with non-payment of the receivable due to faults observed in services rendered or commercial disputes. For every deconsolidating contract signed by the entities in the Group, the warranty does not cover the general risks or the risk of delayed payment; the guarantee fund is made up to cover the debts (credit notes etc.) in a technical dilution.

1.12. Cash and cash equivalents and current financial assets The cash and cash equivalents comprise the elements that are immediately liquid and whose changes in fair value are not significant, such as cash in bank deposit accounts, mutual fund shares and the available cash with the factor. Current financial assets that do not meet the definition of cash equivalents and held for future transactions are valued at fair value and changes are recorded in the income statement.

1.13. Non-current assets and disposal group inteded for sale A non-current asset or a group of assets and liabilities is held for sale when its carrying value may be recovered principally through its divestiture and not by its continued utilization. To meet this definition, the asset must be available for immediate sale and the divestiture must be highly probable. These assets and liabilities are recognized as assets held for sale and liabilities associated with assets held for sale, without offset. The related assets recorded as assets held for sale are valued at the lowest value between the fair value (net of divestiture fees) and the carrying value, or cost less accumulated depreciation and impairment losses, and are no longer depreciated.

1.14. Capital

1.14.1. Common shares (common stock)

Common shares are classified as equity instruments. Incidental costs directly attributable to the issuance of common stock or stock options are deducted from equity, net of tax.

1.14.2. Repurchase of equity instruments (treasury shares)

If the Group repurchases its treasury stock, the compensation amount paid, including directly related costs, is recognized net tax, reduced by shareholders’ equity. Shares repurchased are classified as treasury stock and deducted from shareholders’ equity. When treasury stock is sold or reissued, the amount received is recognized via increasing shareholders’ equity, and the transaction profit or loss is transferred as retained earnings increases or decreases.

1.15. Provisions A provision is recognized when the Group has a current, legal or implicit bond resulting from a past event regarding a third-party, and about which it is likely or certain that it will provoke a resources outflow benefiting this third-party. In cases of restructuring, a bond is made when the restructuring has been subject of a detailed plan or a start of execution.

1.16. Employee benefits

1.16.1. Cost based plans A cost based plan is a defined post-employment plan under which an entity pays fixed contributions to a separate entity and has no legal or constructive obligation to make additional contributions. Contributions payable to a defined contribution plan are recognized under charges related to employee benefits when due.

1.16.2. Defined-benefit pensions plans


A defined-benefit plan refers to post-employment defined benefits other than defined contribution plan. HiPay Group net bonds pursuant to defined benefit plans are assessed separately for each plan in assessing the amount of future benefits acquired by personnel in exchange for services rendered during the current and previous periods. This amount is updated to determine its current value. The fair value of plan assets is then deducted. Calculations are made every year by a qualified actuary, using the projected unit credit method. HiPay Group recognizes immediately in other comprehensive income of all actuarial gains and losses under defined benefit plans.

1.16.3. Benefits upon termination of the employment contract

Benefits at the end of the employment contract are recognized as expenses when HiPay Group, without realistic possibility of retraction, is manifestly involved in a formalized and detailed plan either through redundancies before the normal retirement date or packages encouraging premature retirement to reduce payroll, and concerned persons must have been informed before the closing date. Preliminary retirement benefits are recognized as expenses if the Group has issued a package encouraging the early retirements, and it is likely the package will be accepted and the number of persons accepting it could be assessed in a reliable way.

1.16.4. Short-term benefits

The obligations in connection with the short-term benefits are valued on a non-discounted basis and are recognized when the corresponding service is rendered. A liability is recognized for the amount HiPay Group expects to pay under profit-sharing and bonuses paid in treasury in the short term if the Group has a present legal or constructive obligation to make such payments in exchange for past services rendered by the staff member and the obligation can be reliably estimated.

1.16.5. Share-based payments

Buy options and share subscription options as well as bonus shares are granted to senior managers and to certain Group employees. In accordance with IFRS 2 "Share-Based Payment", options and shares are valued at fair value at the grant date.

The related expense is recalculated each closing date in function of the levels reached from performance criteria and Sales rates. To determine the future expected expense on these plans, the parameters are recalculated at each closing in function of past completion and better estimate of management on that date. Final parameters could thus appear different to those initially valued.

1.17. Segment Reporting Information In accordance with IFRS 8, HiPay Group presents segment information based on internal reporting, as it is reviewed regularly by the Executive Board to assess the performance of each sector and allocate resources.

An operating segment is a component of the company:

- that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses related to transactions with other components of the same entity);

- Whose operating results are regularly reviewed by the chief operating decision maker of the entity to make decisions about resources to be allocated to the segment and assess its performance, and for which specific financial information is available.

Based on this definition, HiPay’s operational segments correspond to the following business lines:

- micropayment (HiPay Mobile) - E-Payment (HiPay FullService)

This identification is based on the Group’s internal organizational systems and management structure. Accordingly, the Group provides in note 19 the following information:

- segment sales, EBITDA and current EBIT, - Reconciliations of the totals of segment information with the corresponding amounts of HiPay Group. - No liability is assigned to the sectors in the internal system for monitoring results.

1.18. Income tax


Income tax on the profit or loss for the year comprises current and deferred tax. Tax is recognized in income/expense unless it relates to a business combination or to elements that are recognized directly in equity or in other comprehensive income in which case it is recognized in equity or other elements of comprehensive income. The income taxes are calculated in accordance with tax legislations in the countries where incomes are taxable. Current tax is the estimated amount of tax payable in relation to taxable income of a period, and is determined using tax rates enacted or substantively enacted at the balance sheet date, any adjustment added to the amount tax payable with regard to previous periods.

Deferred tax is determined and recognized using the balance sheet approach of the liability method for all temporary differences between the carrying amounts of assets and liabilities and their tax bases.

The following elements are not subject to deferred taxes: the initial recognition of an asset or liability in a transaction that is not a regrouping of businesses and that affects neither the accounting profit nor the taxable income, and the temporary differences connected with investments in subsidiaries and joint ventures insofar as it is likely that they will not be reversed in the foreseeable future. Furthermore the deferred tax is not accounted for in case of a taxable temporary difference generated from the initial recognition of goodwill.

The deferred tax credits and liabilities are valued at the tax rates that are expected to be applied for the period during which the asset is realized and the liability settled, on the basis of the taxation rules and regulations that have been adopted or virtually adopted as at the closeout date. The deferred tax credits and liabilities are offset if there is a legal enforceable right to offset the payable tax credits and liabilities, and if they concern taxes on earnings deducted by the same taxation authority, either in the same taxable entity, or in taxable entities that are different but that intend to settle the payable tax credits and liabilities on the basis of their net amount or to realize the credits and settle tax liabilities simultaneously.

A deferred tax credit is posted only insofar as it is likely that HiPay Group will record future taxable profits to which the corresponding timing difference can be charged. The deferred tax credits are considered on each closeout date and are reduced to the extent that it is no longer likely that a sufficient taxable profit will be available.

1.19. Revenue recognition

Online payment activity corresponds to two separate activities: - HiPay Mobile, which enables websites to charge users through telecom resources (DCB, SMS+…); - HiPay FullService, which offers e-merchants a complete solution for online payment thanks to electronic payment methods

(bank cards, local payment methods, transfer…).

In the first case, the turnover is recognized in net amount and corresponds to the difference between the revenues granted by the telephone operators regarding mobile payment solutions used by the Internet users to access to the contents of the websites, and the compensation paid by HiPay to website’s editor.

In the second case, HiPay intervenes to provide a technical and service-based delivery to the merchant and the turnover is the difference between the transactions amount received from internet users and the payment granted to the merchants.

HiPay has two European banking licenses:

- A payment licence obtained from the ACPR (Autorité de Contrôle Prudentiel et de Résolution) in August 2011 by the company Allopass SAS (HiPay SAS) which allows HiPay Group to provide payment services,

- An electronic money issuer licence obtained from the NBB (National Bank of Belgium) in December 2008 by HPME with an European passport, which allows HiPay Group to propose its electronic wallet solution overall in all European Union countries.

1.20. Operating profit Operating profit is obtained by deducting, from the current operating profit, the charges for stock options and free shares and the other non-recurring charges. Non-current charges may include impairment of assets, capital gains or losses on disposal of consolidated companies or of activities, restructuring charges, expenses related to exceptional terminations of contracts, business litigations or any other significant non-current expense or product.


Note 2. Financial risk management

The Group is exposed to the following risks connected with to the use of financial instruments: - credit risk - liquidity risks - market risk

This note provides information concerning HiPay Group’s exposure to each of the above risks, its objective, its policy and procedures for measuring and managing risk and capital. It is incumbent on the Board of Directors og HiPay Group to define and monitor the framework for the risk management.

2.1. Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This risk arises mainly from client’s receivables. The HiPay Group’s exposure to the credit risk is influenced mainly by the individual characteristics of the customers. The statistical profile of customers, particularly including the risk of default by activity sector and country in which the customers do business, has no real influence on the credit risk. There is no concentration of the credit risk, whether with respect to the customers or geographically speaking.

HiPay Group has defined a credit policy under which the solvency of each new customer is analyzed individually before it can benefit from the payment and delivery conditions offered by the Group. To that end, the Group uses external ratings, when they are available. The customers that are not meeting HiPay Group demands, with respect to solvency may not conclude any transactions with the Group unless they pay for their orders in advance.

At each closing, the Group determines a level of impairment representing its estimate of the losses on receivables and other debts, and investments. This impairment is determined by an analysis of individualized significant risks. To minimize credit risk, HiPay SAS has taken out credit insurance. The credit insurance contract concluded is based on three services: prevention, collection, compensation.

- Prevention: the credit insurer provides continuous monitoring and informs the company in case of a deterioration of its customers’ creditworthiness.

- Collection: in case of default, the company forwards the legal proceedings consisting of all documents proving the claim to the insurance company, which intervenes with the defaulter and sees to collection by amicable or legal means.

- Compensation: the company will be indemnified in case of established insolvency or of judicial proceedings affecting the debtor. The insurance company bears 75% of the amount, including all taxes, namely 90% of the amount excluding taxes. The indemnification period is approximately from one to five months. To qualify for such coverage, the subsidiaries must first obtain the insurer’s coverage approval customer by customer and making the unpaid declaration within 150 days after the term.

In addition, HiPay SAS has concluded factoring contracts for which the main risks and advantages have been transferred to the factoring companies (see note 13).

2.2. Liquidity risk The liquidity risk corresponds to the risk that HiPay Group encounters difficulties in honoring its debts when they come due. The Group’s approach for managing the liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they come due, under normal or "tense" conditions, without incurring any unacceptable losses or impairing the Group’s reputation.

HiPay Group has established management of the cash flow needs, aimed at optimizing its return of cash flow on investment. This excludes the potential impact of extreme circumstances, such as natural disasters, that one cannot reasonably predict.


Moreover, HiPay SAS company has concluded factoring contracts in order to obtain short-term financing and be more flexible in daily management of its liquidities.

The group conducted a special review of its liquidity risk and deems that it is able to meet future scheduled payments. 2.3. Market risk

2.3.1. Currency risk

Currency risk is the risk that changes in exchange rates affects the Group’s earnings or the value of the financial instruments. Currency risk management aims to control market risk exposures in acceptable limits, while optimizing the couple (profitability/risk).

HiPay Group is exposed to a exchange risk on revenues outside the euro area (primarily latin America and the United States). Futhermore, in the online payment business, the currency of repayment to the partner sites may differ from that of income received. A variation of currencies would have no significant impact on the financial statements of HiPay.

2.4. Categorization of financial instruments

All the financial assets fall under the category "Loans and receivables" on December 31st

, 2015. No financial assets are classified either as "Assets available for sale" or "fair value throught the income statement". All the financial assets fall under the category "debts at amortized cost” on December 31

st, 2015. No financial liabilities are classified

as "derivative instruments”.

Note 3. Consolidation scope

Company name Country 31 Dec.2015 % Interest

Consolidation method

Date of creation /

acquisition Closing dates

Hipay Group SA France 100% FC 16.03.2015 31.12

Created companies HPME SA Belgium 100% FC 08.05.08 31.12

HiPay Payment do Brasil LTDA Brasil 100% FC 16.11.11 31.12

HiPay Portugal LDA Portugal 54% FC 22.01.15 31.12

HiPay Mobile Espana SL Spain 100% FC 29.12.06 31.12

Acquired companies Hipay SAS France 100% FC 08.02.06 31.12

On May 27

th, 2015, shares of companies HiPay Mobile Espana SL, HiPay SAS, HiPay Payments do Brasil, and 53.9% of HiPay Portugal’s

capital were brought by HiMedia to HPME. On June 15

th, 2015 shares of HPME were brought to HiPay Group SA, newly created.

The consolidation scope on December 31

st, 2014, included in addition to the entities of the current perimeter, the following entities,

for which the integration to HiPay Group was initially envisaged; these entities have not been integrated due to the non-significant nature of their activity: HPMP SPRL, Allopass Scandinavia AB, Allopass Mexico SRLCV. The same judgment was applied to payment activities of legal entities HiMedia Deutschland, HiMedia Group USA Inc. and HiMedia Italy SRL.


Note 4. Payroll Charges

The breakdown of the payroll charges between salaries, social security charges and provision for end-of-career indemnities look as

follows:


Salaries 6 177 5 303

social security charges 2 875 1 768

Provision for end of career indemnities -36 19

Payroll charges 9 016 7 090

Staff changes are as below:

31 Dec.2014

(1) Incoming Outgoing 31 Dec.2015

France 98 34 -21 111

Foreign 26 5 -7 24

Staff 124 39 -28 134

In return of payment to HiMedia for deliveries of “management fees”, HiPay Group benefited in 2014 of financial, legal, human and

IT resources services. These charges were included in General expenses. On December 31st

, 2015, the Group does not use these

services anymore and has strengthen its teams accordingly (these charges are now integrated in payroll charges).

(1)

Comparative data related to 2014 has been established on the HiPay Group combined financial statement (cf note 1.3 - Basis of preparation).

Note 5. Other non-current income and expenses

On December 31st

, 2014, other non-current income and expenses mainly concerned disputes, external fraud and relinquishment of

some projects.

On the 31st

December, 2015, other non-current income and expenses mainly correspond to restructuring expenses related to the

spin off with HiMedia Goup (€1.7 million) and the IPO process (€1.7 million).

Note 6. Financial result


Investment products 47 87

Interest on borrowing -73 -782

Other comprehensive income -197 -739

Financial net income -223 -1 435

Interest on borrowing corresponded to interest on the cash pooling with HiMedia and to exchange losses, on December 31

st, 2014.

On December 31

st, 2015, it is mainly exchange impacts.


Note 7. Tax on profit or loss

The tax expense can be analysed as shown below:


Current taxes - 705 - 1 075

Deferred taxes 1 561 88

Tax (charge)/Proceeds 856 - 987

Effective tax rate (%) 23% -22%

The discrepancy between the effective tax rate and the theoretical tax rate can be analysed as shown below:


Tax rate in France 33% 33%

Theoretical tax (charge)/proceeds 1 235 1 519

Elements concerning the comparison with the effective rate: Difference of tax rate between the countries 49 112

Effect of non-asset deficit transfers from the fiscal year - 1 449 - 2 164

Permanent differences and other elements 1 193 - 58

Taxes without basis - 172 - 397

Other - -

Real tax (charge)/proceeds 856 - 987

Effective tax rate 23% -22%

(1) Comparative data related to 2014 has been established on the HiPay Group combined financial statement (cf note 1.3 - Basis of preparation).

On December 31

st, 2015, the effective tax rate results primarily from:

- Deferred taxes on fiscal deficits not recognized in the period mainly on HiPay Group SA and Mobile Espana SL,

- And permanent differences related to internal depreciations deductible. Note 8. Goodwill The goodwill is equal to €45.2 million as a gross value and net value on December 31

st, 2015. It comes from the goodwill previously

allocated to the activity of payment in the consolidated Himedia Group and was allocated to the two CGUs based on their relative value in use as of December 31

st, 2015.

No indication of impairment of these assets were identified on December 31

st, 2015.

The net book value of goodwill is assigned to each CGU as below :

in thousands of euros 31 Dec.2014 (1)

Increase Decrease 31 Dec.2015

Micropayment 5 000 - - 5 000

E-Payment 40 222 - - 40 222

Goodwill net 45 222 - - 45 222


As part of control of the value of goodwill, impairment tests were carried out on December 31st

, 2015. This procedure, based mainly on the method of discounted future net cash flows, is the assessment of the recoverable value of each entity generating its own cash flow. The main assumptions in order to determine the value of the cash generating units are as follows:

- method for valuation of the cash generating unit : value in use, - number of years for which the cash flows are estimated and projected to infinity: 4 years (2016-2019), - long-term growth rate: 2.5% for the electronic payment CGU and 2% for the micropayment CGU, the maturity of

these CGUs being different (2.5% in 2014), - discount rate: 9% (5.8% in 2014), - growth rate of sales online with the rates observed in the past few years.

The discount rate corresponds to the weighted average cost of capital. It was calculated by the company according to the standards on the basis of sectoral data, and the market data source for the beta, the risk-free rate, the risk premium and the debt. The result of these impairment tests did not lead to the recognition of a loss of value, on December 31

st, 2015.

Moreover a sensitivity analysis calculating the variation in key parameters did not point to any likely scenario in which the recoverable value of a CGU will become less than its book value. The key parameters variations used for the sensitivity analysis are presented below:

Revenue

Growth Rate

Rate used Var Rate used Var Var

9,0% +150 pts 2,5% -150 pts -500 pts

Discounting rate Growth rate to infinity

In the impairment tests, the above variables have been adjusted separately and two per two the results didn’t show any likely scenario where the recoverable value of a CGU becomes lower than its accounting value

(1)


Note 9. Intangible assets The development expenses activated during the period are shown on the line “Software programs and licences”, and correspond primarily to:

- developments of new back offices, - the development of a platform (Business Intelligence) intended for our merchant, - the integration of new payment instruments on our payment platforms, - the continuing developments for the roll-out of the TPP platform, - the finalizing of the developments or the overhaul of our internal tools (invoicing tools, sales management tools…).

The changes to the gross values of the intangible fixed assets are shown below:

in thousands of Euros 31 Dec.2014 (1)

Others(2)

Transfer Increase Decrease 31 dec. 2015

Software and licenses 12 266 2 102 3 991 - - 18 359 Trademarks 384 1 - 50 - 435 Fixed assets in progress 2 359 - -3 991 2 559 - 927

Other 152 16 - - - 168

Total 15 161 2 119 - 2 609 - 19 889


The changes to the accumulated depreciation and impairment of the intangible fixed assets are shown below:


Others(2)

Transfer Increase Decrease 31 dec. 2015

Software and licenses - 8 351 - 1 521 - - 2 668 - - 12 540 Trademarks - 384 - - - - - 384 Fixed assets in progress 34 - - - - 34

Other - 152 - - - - - 152

Total - 8 852 - 1 521 - - 2 668 - - 13 042

The changes to the net values of the intangible fixed assets are shown below:


31 dec. 2015

Software and licenses 3 915 5 820

Trademarks - 51

Fixed assets in progress 2 393 961

Other - 16

Total 6 308 6 847

Note 10. Tangible fixed assets The changes to the gross values of the tangible fixed assets are shown below:


Increase Decrease 31 Dec. 2015

Fittings & installations 7 - - 7

Office equipment and computer hardware 975 82 - 1 056

Furniture 51 - -8 43

Total 1 033 82 -8 1 107

(1)

Comparative data related to 2014 has been established on the HiPay Group combined financial statement (cf note 1.3 - Basis of preparation). (2)

These flows are related to differences in the scope of combination on December 31st, 2014 and in the scope of consolidation on December 31st, 2015 (cf Note 3)

The changes to the accumulated depreciation and impairment of the tangible fixed assets are shown below:


Increase Decrease 31 Dec. 2015

Fittings & installations -6 - - -6

Office equipment and computer hardware -903 -60 - -963

Furniture -43 -3 6 -41

Total -952 -63 6 -1 010

The changes to the net values of the tangible fixed assets are shown below:


31 Dec.

2015

Fittings & installations 1 1

Office equipment and computer hardware 72 93

Furniture 7 3

Total 81 97


Note 11. Differed taxes On December 31

st, 2015, deferred taxes are composed solely of deferred tax assets worth €1.6 million of which €1.5 million relating

to loss carryforwards of HiPay SAS generated in 2015 and €0.1 million to temporary differences. Loss carryforwards have been activated in view of taxable earnings prospects over a maximum period of 5 years. On December 31

st, 2015, the balance of deficits carried forward non activated is €5.2 million (in base).

Note 12. Other financial assets

On December 31

st, 2015 the other financial assets decompose as follows:


Other securities unconsolidated 200 -

Deposits and sureties 196 237

Total 396 237

Other non-consolidated securities correspond to minority stakes in companies in the payment industry.

Note 13. Customers and other debtors

in thousands of Euros 31 Dec. 2015 31 Dec.2014 (1)

Customers and invoices to be established 16 471 20 366

Depreciation -3 077 -3 113

Customers and other debtors 13 394 17 253

The book value indicated above represents the maximum exposure to the credit risk on this item.

(1) Comparative data related to 2014 has been established on the HiPay Group combined financial statement (cf note 1.3 - Basis of preparation).

On December 31

st, 2015, the factoring contract implies a transfer of the credit risk: all assigned receivables have been de-recognised.

The amount of the receivables assigned with transfer of the credit risk, therefore de-recognised within the meaning of IAS 39, under the factoring contracts on December 31

st, 2015 is equal to €8.1 million against €8.9 million on December 31

st, 2014.

The changes to the anteriority of the trade receivables at the closing date are shown below:

in thousands of euros 31 Dec. 2015 31 Dec.2014 (1)

Unmatured (*) 11 779 16 342

0-30 days 903 835

31-120 days 364 77

121-360 days 163 512

More than one year 3 262 2 600

16 471 20 366

(*) All the unmatured receivables lower than one year


The changes to the impairment of the trade receivables are shown below:

in thousands of euros 31 Dec.2015 31 Dec.2014 (1

)

Depreciation: Balance as at January 1st -3 113 -1 244

Period increase / decrease 37 -1 870

Impairments: balance as of 31/12 -3 077 -3 113

The impairments mainly correspond to due receivables for which the recoverability presents risk on December 31

st, 2015.

Available cash at the factor under this contract is 57k€ on December 31

st, 2015 (see note 15).

Note 14. Other current assets All other current assets mature at under one year.

in thousands of Euros 31 Déc. 2015 31 Dec.2014 (1)

Financial and corporate assets 5 032 5 801

Prepaid charges 1 041 84

Factor guarantee fund 476 517

Available cash balance 18 521 12 387

Other 1 634 1 023

Other current assets 26 703 19 813

The tax and social assets item consists primarily of VAT receivables and debts to social and fiscal institutions. Prepaid expenses mainly concern the rent deposit consented to HiMedia SA.

(1) Comparative data related to 2014 has been established on the HiPay Group combined financial statement (cf note 1.3 - Basis of preparation)

Available cash balance concerns the HiPay FullService business in Belgium and in France. It amounts to €18.5m at the end of 2015 against €12.4 m at the end of 2014 and relate to the financial commitments resulting from the issuance of electronic money and payouts to websites (see note 17 Other debts and current liabilities). In compliance with current regulation, cash received for the execution of a payment transaction – or cash collected in consideration of the issuance of electronic money for HPME – is invested in one or several accounts specifically opened for this purpose in a credit institution authorised in a Member State of the European Community or in another State that is part of the European Economic Aera agreement. Those accounts are identified separately from all other bank accounts that are used by the company for its own use. Note 15. Cash and cash equivalents


"OPCVM" fund shares 3 018 3 007

Cash reserve with the factor 57 286

Current account with Hi-media - 4 798

Liquid assets 8 854 15 246

Cash and cash equivalents 11 929 23 337

Current account with Hi-media - -7 120

Short-term financial liabilities and bank overdrafts - -7 120

Cash net 11 929 16 217


Note 16. Non-current provisions 16.1 Details concerning non-current provisions

in thousands of euros 31 Dec.2015 31 Dec.2014 (1)

Provisions for risks and expenses 46 25

End-of-career benefits 151 189

Non-current provisions 197 214

16.2 Provisions for risks and charges

in thousands of euros 31 Dec.2014

(1) Increase

Decrease - Non used Decrease - Used 31 Dec.2015

Non-current provisions 25 32 - -11 46

Provisions for risks are mainly related to commercial and social disputes. 16.3 Provisions for retirement Group commitments mainly concern French entities. The evaluation of these last is determined by the method of projected credit units. Commitments have been calculated in accordance with the provisions of the collective agreement SYNTEC. The provision relative to the Group’s retirement commitments is as follows:

in thousands of euros 31 Dec.2015 31 Dec.2014

(1)

Discounted value of the obligations as at January 1 189 156

Cost of services rendered and financial cost 4 19

Actuarial losses/(gains) recognized in equity - 2 14

Change in scope - 41 -

Discounted value of the obligations as at December 31 151 189

The assumptions used in the assessment of pension liabilities for the French entities at closing are as follows:

2015 2014 2013

Discounting rate 2,00% 1,60% 3,25%

Rate of future increase of salaries 2,50% 2,50% 2,50%

Retirement age (Executives) 67 years 67 years 67 years

Retirement age (Non-Executives) 62 years 62 years 62 years

Actuarial table INSEE F 2010 INSEE F 2010 INSEE F 2010

(1)


Note 17. Other debts and current liabilities


All other debts mature at under one year.


Taxation and social liabilities 7 105 9 685

Prepaid income 106 -

Other liabilities 18 379 11 014

Other current liabilities 25 590 20 698

The Tax and social security liabilities item primarily consists of VAT debts and debts to social institutions. The other debts are notably comprised of the financial commitments arising from the issuance of electronique money and from the ongoing payouts from merchant sites using the platform FullService (see Note 14 Other current assets). Note 18. Working capital requirement

in thousands of Euros notes 31 Dec.2014 (1) Cash impacts

Other

movements 31 Dec.2015

Customers and other debtors Note 13 17 253 2 291 - 1 567 - 13 394

Fisca l and socia l assets Note 14 5 801 283 1 052 - 5 032

Prepaid expenses Note 14 84 957 - 1 041

Other receivables Note 14 13 927 6 702 - 20 630

Sub-total asset (1) 37 066 5 928 2 896 - 40 098

Suppl iers and other creditors 28 409 629 - 5 467 - 22 313

Taxation and socia l l iabi l i ties Note 17 9 685 3 251 - 671 7 105

Deferred incomes Note 17 - 106 - 106

Other l iabi l i ties Note 17 11 014 6 437 928 18 379

Sub-total liabilities (2) 49 107 2 663 3 867 - 47 904

Working capital required (1)-(2) 12 042 - 2 988 1 248 7 806 -


Note 19. Segment Reporting Information

in thousands of Euros

2015 2014(1) 2015 2014(1) 2015 2014(1)

Sales 12 629 14 712 13 194 8 472 25 823 23 184

Direct costs 2 361 - 3 373 - 5 746 - 3 360 - 8 107 - 6 733 -

Payrol l charges 3 074 - 3 516 - 5 942 - 3 574 - 9 016 - 7 090 -

General expenses 1 759 - 4 220 - 3 083 - 1 516 - 4 842 - 5 737 -

EBITDA 5 435 3 603 1 577 - 21 3 858 3 624

Depreciation 1 518 - 2 618 - 1 198 - 97 - 2 716 - 2 715 -

Current EBIT 3 917 984 2 775 - 76 - 1 142 909

TotalMicropayment E-payment

Losses on electronic payments in 2015 are due to the investments made over the year, this activity continuing to structure itself and invest to support the technological deployment of the platforms and the business development of the solutions. Note 20. Stock option plan and allocations of free shares


20.1. Stock options

Plan n°1 Total

Meeting date 15.06.15

Date of Board of Directors meeting 28.05.15

Total number of shares allocated (1) 54 546 54 546

Total number of shares available for subscription

54 546 54 546

Including number of shares that could be acquired by authorized agents

54 546 54 546

Including number of shares that could be acquired by the ten leading employee

0 0

Beginning of exercise of the options 29.06.17

Date of expiration 29.06.19

Subscription price (in euros) (2) 14.13 14.13

Exercise procedures (3) A

Number of shares subscribed to on Dec. 31st, 2015

0 -

Options cancelled during the period 0 0

Remaining options non subscribed 54 546 54 546

(1)

Options allocated to the employees present to this day in the Company, the employees having left the Company being unable to retain the benefit of such options.

(2)

Subscription price of the calculated options on the day of allocation of the options. (3)

Procedure A: 100% of the options may be exercised at the end of a period of 2 years following the Board of Directors meeting that allocated to these options. Procedure B : 1/3 of the options may be exercised after a period of 2 years following the Board of Directors meeting have attributed options, then 1/3 the following year, the remaining one third 4 years after the allocation. Procedure C: 1/6 at the end of each quarter-year following the beginning time for exercise of the options.

The number of options and the weighted average of the exercise prices are as follows:

2015

Options

Weighted average exercise price

Options in circulation at the opening - -

Options allocated during the period 54 546 14,13

Options exercised during the period - -

Options cancelled during the period - -

Options in circulation at the close 54 546 14,13

Options that could be exercise at the close - -

The parameters adopted for valuing the share option plans granted are as follows:


Date of the Board of Directors’ meeting 28 mai 2015

Number of options allocated 54 546

Fair value of an option on the date of allocation 4,28

Fair value of the plan on the date of allocation 233 457

Exercise price of the option 14,13

Anticipated volatility of the option price 55%

Anticipated lifetime 2 years

Dividend expected on the options 0%

Option lapse rate adopted 0%

Risk-free interest rate adopted 0%

20.2. Allocations of free shares

Plan n°1 Total

Meeting date 15 Jun. 15

Date of the Board of Directors’ meeting 28 May 15

Total number of shares allocated 129,545 129,545

Including the number of shares that can be subscribed to by the authorized agents

129,545 129,545

Including the number of shares that can be subscribed to by the leading ten employee allocated

- -

Number of cancelled shares - -

Number of shares definitively allocated as at Dec. 31, 2015

- -

Number of shares that can be definitively allocated 129,545 129,545

End of acquisition period 29 Jun. 17

End of retention period 29 Jun. 19

Share price on the date of the executive board meeting 14.13

Non-transferability discount yes

Fair value of the free share 12.02

The financial impact related to these plans is presented under "Valuation of stock options and free shares" in the income statement. Note 21. Off-balance sheet commitments

21.1. Commitments received

HiPay Group has no commitment applicable on December 31

st, 2015.

21.2. Commitments given No third party is the recipient of a commitment from HiPay Group applicable on December 31

st, 2015.


21.3. Claims Labour tribunal disputes are in progress with former employees who are disputing the legitimacy of their layoffs. The company has established the provisions that it considers necessary based on its assessment of the merits of the actions of the claimants. Note 22. Significant events during FY 2015 There are no significant events other than those mentioned in note 1.2. Note 23. Events occurred since December 31

st 2015

None Note 24. Transactions between related parties 24.1. Compensation of the members of the management bodies

Compensations correspond to the compensation of the authorized agents.

in thousands of Euros 31 déc.2015 31 Dec.2014 (1)

Short term employee benefit 299 652

Post-employment benefits - -

Other long-term benefits - -

Providing termination benefits - -

Total 299 652

Furthermore, SPRL Cyril Zimmermann invoiced some advisory services (510K€) related to all the restructurations needed for the transfer of payment legal entities under HPME in order to introduce HiPay Group.


24.2. Other related parties Until 2014, Group companies have concluded into numerous transactions with HiMedia SA as mentioned in the combined financial statements on December 31

st,2014.

HiPay Group is from now on autonomous and the main part of the operations with the Group HiMedia consists of legal restructuring prior to its constitution and a sublease signed on December 8

th, 2015 under which HiMedia SA invoices costs under the rent and

amortization of fixtures for € 0.9 million in 2015. On June 29

th, 2015, HiPay Group acquired to the company HiMedia SA a stake in the company Ledger.

Documents

2015 CONSOLIDATED FINANCIAL STATEMENTS - HiPay · 2018-08-21 · CONSOLIDATED FINANCIAL STATEMENTS 5 Statement of Comprehensive Income for FY 2015 and 2014 in thousands of Euros 31